Versar, Inc. Announces First Quarter Fiscal 2014 Results

SPRINGFIELD, Va., Nov. 7, 2013

Gross revenue for the first quarter of fiscal year 2014 was $29.1 million, an increase of 30% compared to $22.4 million during the first quarter of the last fiscal year.  The increase was attributable to a combination of Versar's acquisition of Geo-Marine, Inc. (GMI); continued activity associated with its ongoing contract with the U.S. Army Corps of Engineers (USACE) for construction support services in Afghanistan; and the ramp up of the Company's performance based remediation (PBR) work for the U.S. Air Force in New England and the Great Lakes Region. The Company reported net income of $659,000, or $0.07 per share on a fully diluted basis, compared to net income of $845,000 or $0.09 per share on a fully diluted basis for the first quarter last year, which included a loss of $0.01 from discontinued operations. 

During the quarter, Versar acquired Geo-Marine, Inc., a company with approximately $20 million in annual revenues, which provides engineering design, construction management, environmental planning and programming, and other services in support of a wide range of government, industry, and commercial clients.  Key long-term clients include the U.S. Navy, the U.S. Air Force and the U.S. Army Corps of Engineers.  Geo-Marine is expected to be accretive to earnings in year one and adds contracted backlog of $15 million.

As of September 27, 2013, Versar recorded funded backlog of approximately $136 million, an increase of 26% compared to $108 million of funded backlog at the end of fiscal year 2013.

Versar closed the fiscal first quarter 2014 with a cash balance of approximately $5.6 million and stockholders' equity of $38.5 million.

Tony Otten, CEO of Versar said, "We are pleased to report strong revenue growth with improved sequential gross margin performance, continued profitability and increased backlog during the first quarter. We've added several new contracts subsequent to the close of the quarter, including two new task orders for our USACE contract in Afghanistan valued cumulatively at $30.5 million, as well as a program management support contract from the General Services Administration valued at up to $5.4 million and a task order contract from Fairfax County, Virginia for engineering consulting services with an annual maximum capacity of $1.5 million."

Mr. Otten continued, "Our integration of GMI is progressing well and we are confident that their technical capabilities and established customer base will enable us to expand our reach in terms of clients, technical capabilities and geography.  With our solid balance sheet, we believe we are well positioned to drive organic growth and to pursue our acquisition strategy."