MPWG Mpw Industrial Services

MPW Reports Fiscal Third Quarter and Year-to-Date Results HEBRON, Ohio, May 12 /PRNewswire-FirstCall/ -- MPW Industrial Services Group, Inc. today announced total revenue of $22.8 million for the third fiscal quarter ended March 31, 2004. The revenue was down $1.3 million from $24.1 million for the quarter ended March 31, 2003. The Company reported net income of $455 thousand, or $0.04 per share, for the third fiscal quarter ended March 31, 2004, compared with net income of $600 thousand, or $0.05 per share, for the same period last year. Total revenue for the first nine months of fiscal 2004 was $64.8 million compared with $72.2 million for the first nine months of fiscal 2003. The net loss for the nine months ended March 31, 2004 was $(1.5) million, or ($0.14) per share, compared with a net loss of $(2.2) million, or $(0.21) per share, for the nine months ended March 31, 2003. The net loss for the first nine months of fiscal 2003 included a $2.8 million, net of tax of $1.9 million, non-cash goodwill impairment charge as a result of the adoption of Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets." This charge was recorded as a cumulative effect of a change in accounting principle as of July 1, 2002. CEO Comments Monte Black, Chairman and Chief Executive Officer, commented, "We continue to expand our sales and marketing efforts and are beginning to see some benefits from these initiatives. In addition, we are committed to increasing our market presence, to improve our operating efficiencies, and to provide excellent service to our customers to support their operations." Quarterly Discussion Revenues decreased 5.4% to $22.8 million in the third quarter of fiscal 2004 from $24.1 million in the same prior year period. The decline in revenues was primarily in the Chemical Cleaning business unit of the Industrial Water Process Purification ("Industrial Water") segment as a result of aggressive pricing by competitors, deferred customer spending and a one- time $0.5 million project in the prior year. Income from operations was $0.9 million for the three months ended March 31, 2004 compared to $2.0 million for the three months ended March 31, 2003. The decline in operating income was driven by a high fixed labor base in the Industrial Cleaning and Facility Maintenance and Industrial Water segments, increased workers compensation costs and recoveries from two favorable contract settlements in the prior year, slightly offset by decreased repair and maintenance costs, decreased bad debt expense and improved efficiencies in operating supply usage. The net loss for the third quarter of fiscal 2003 included the Company's equity loss in affiliate of $0.3 million. During the fourth quarter of fiscal 2003, the Company wrote off its remaining investment in Pentagon Technologies, Inc. ("Pentagon") due to continued declines in Pentagon's operating results as well as the slowdown and uncertainty in the semi-conductor industry. As a result of the full write-off of the Company's investment in Pentagon at June 30, 2003, the Company has not continued to recognize its equity investment in the losses of Pentagon in fiscal 2004. Corporate Profile MPW Industrial Services Group, Inc. is a leading provider of integrated, technically based industrial cleaning and related facilities support services in North America. MPW offers three principal service lines that are integral to a wide variety of manufacturing processes. These three service lines are industrial cleaning and facility maintenance, industrial container cleaning and industrial process water purification. Forward-Looking Statements The statements contained in this news release that are forward-looking are based on current expectations that are subject to a number of uncertainties and risks, and actual results may differ materially. The uncertainties and risks include, but are not limited to, competitive and other market factors, customer purchasing behavior, general economic conditions and other facets of the Company's business operations. Additional information about these and other risks and uncertainties can be found in "Investment Considerations" in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2003; and in other documents the Company files or has filed with the Securities and Exchange Commission. Further information may also be obtained at the Company's Internet site: http://www.mpwservices.com/ . MPW INDUSTRIAL SERVICES GROUP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except share data) March 31, June 30, 2004 2003 (unaudited) ASSETS Cash $358 $2,726 Accounts receivable, net 15,253 17,201 Inventories 2,296 2,294 Deferred income taxes 1,512 1,461 Prepaid expenses 798 1,197 Other current assets 2 16 Total current assets 20,219 24,895 Property and equipment, net 31,382 35,120 Goodwill 6,044 6,044 Other intangibles, net 6,427 6,889 Other assets 96 122 Total assets $64,168 $73,070 LIABILITIES Accounts payable $3,383 $8,218 Accrued compensation and related taxes 2,152 2,373 Current maturities of long-term debt 1,281 1,322 Other accrued liabilities 4,265 6,153 Total current liabilities 11,081 18,066 Long-term debt 18,912 18,892 Deferred income taxes 3,643 3,400 Other long-term liabilities 321 469 Total liabilities 33,957 40,827 SHAREHOLDERS' EQUITY Preferred stock, $0.01 par value; 5,000,000 shares authorized; no shares issued and outstanding - - Common stock, no par value; 30,000,000 shares authorized; 10,708,707 and 10,939,957 shares issued and outstanding at March 31, 2004 and June 30, 2003, respectively 107 109 Additional paid-in capital 40,921 41,507 Accumulated deficit (10,575) (9,027) Accumulated other comprehensive loss (242) (346) Total shareholders' equity 30,211 32,243 Total liabilities and shareholders' equity $64,168 $73,070 MPW INDUSTRIAL SERVICES GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share data) Three Months Ended Nine Months Ended March 31, March 31, 2004 2003 2004 2003 (unaudited) (unaudited) Revenues $22,833 $24,144 $64,808 $72,150 Cost of services (including depreciation) 18,171 18,127 53,278 56,061 Gross profit 4,662 6,017 11,530 16,089 Selling, general and administrative expenses 3,724 4,052 12,852 12,751 Income (loss) from operations 938 1,965 (1,322) 3,338 Interest expense, net 296 457 857 1,470 Income (loss) from continuing operations before income taxes (benefit) and equity in loss of affiliate 642 1,508 (2,179) 1,868 Provision (benefit) for income taxes 187 634 (631) 785 Income (loss) from continuing operations before equity in loss of affiliate 455 874 (1,548) 1,083 Equity in loss of affiliate - (315) - (499) Income (loss) from continuing operations 455 559 (1,548) 584 Income from discontinued operations, net of tax - 41 - 84 Income (loss) before cumulative effect of change in accounting principle 455 600 (1,548) 668 Cumulative effect of change in accounting principle - - - (2,845) Net income (loss) $455 $600 $(1,548) $(2,177) Net income (loss) per share, basic and diluted: Income (loss) from continuing operations $0.04 $0.05 $(0.14) $0.05 Income from discontinued operations, net of tax - - - - Income (loss) before cumulative effect of change in accounting principle $0.04 $0.05 $(0.14) $0.05 Cumulative effect of change in accounting principle - - - (0.26) Net income (loss) per share $0.04 $0.05 $(0.14) $(0.21) Weighted average shares outstanding 10,747 10,940 10,881 10,940 Weighted average shares outstanding, assuming dilution 10,857 10,941 10,881 10,965 DATASOURCE: MPW Industrial Services Group, Inc. CONTACT: Robert Valentine, Vice President and Chief Financial Officer of MPW Industrial Services Group, Inc., +1-740-927-8790 Web site: http://www.mpwservices.com/ Company News On-Call: http://www.prnewswire.com/comp/126032.html

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