Fortress International Group, Inc. Reports First Quarter 2013
Financial Results
COLUMBIA, Md., May 15, 2013 /PRNewswire/ -- Fortress
International Group, Inc. (Other OTC: FIGI), a provider of
consulting and engineering, construction management and site
services for mission-critical facilities, today announced financial
results for the first quarter ended March
31, 2013.
Anthony Angelini, Chief Executive
Officer of Fortress, stated, "We are pleased with our continued
progress both financially and strategically. We continue to build
momentum in our recurring business as well as capturing
opportunistic project related business. During the quarter we
delivered a significant portion of the Washington Metropolitan Area
Transit Authority contract we announced in January, revenue
contribution from which was $5
million. Revenue outside of that contract was down
year over year, but margins remained strong and are consistent with
our focus of developing a recurring stream of higher margin
business. We are pleased to report another quarter of adjusted
EBITDA profitability and are working diligently to grow our
business in 2013. To that end, we have retained additional
sales and business development resources during the quarter and are
gaining traction with new growth opportunities through direct
sales, alliances and other external relationships. We hope to
be able to report to you on some results of those opportunities
soon."
First Quarter 2013 Financial Highlights:
- Revenue of $14.1 million,
compared with $14.3 million in the
first quarter of 2012.
- Gross profit of $2.8 million,
compared with $2.1 million in the
first quarter of 2012.
- Normalized Adjusted EBITDA of $0.2
million, compared with Normalized Adjusted EBITDA loss of
$(0.5) million in the first quarter
of 2012.
- Net loss of $23,000, or
$(0.00) per basic and diluted share,
compared with net loss of $(1.3)
million or $(0.09) per basic
and diluted share, in the first quarter of 2012.
- Cash and cash equivalents totaling $4.6
million as of March 31,
2013.
Chief Financial Officer Kenneth D.
Schwarz added, "Our first quarter results reflect continued
positive EBITDA and growth in our more profitable Facilities
Management business. The Washington Metropolitan Area Transit
Authority project previously disclosed temporarily expanded our
balance sheet and had a slightly negative impact on our gross
margin percentage. We continue to focus on investing our
resources to support our growth and initiatives that will propel us
forward in the future."
Quarterly Conference Call Details
The Company will schedule a conference call to discuss the first
quarter 2013 financial results and issue a subsequent announcement
regarding the date and call-in details of that call.
About Non-GAAP Financial Measures
Adjusted EBITDA and Normalized Adjusted EBITDA are supplemental
financial measures not defined under Generally Accepted Accounting
Principles (GAAP). We define Adjusted EBITDA as net income (loss)
before interest expense, income taxes, depreciation and
amortization, impairment loss on goodwill and other intangibles,
stock-based compensation, and provision for bad debts. We
present Adjusted EBITDA because we believe this supplemental
measure of operating performance is helpful in comparing our
operating results across reporting periods on a consistent basis by
excluding non-cash items that may, or could, have a
disproportionate positive or negative impact on our results of
operations in any particular period. We also use Adjusted EBITDA as
a factor in evaluating the performance of certain management
personnel when determining incentive compensation.
We define Normalized Adjusted EBITDA as Adjusted EBITDA before
restructuring charges and certain other non-recurring costs. We
present Normalized Adjusted EBITDA because we believe it is helpful
in comparing our operating results across reporting periods on a
consistent basis by excluding from Adjusted EBITDA certain
non-recurring items that do not directly correlate to our business
and may, or could, have a disproportionate positive or negative
impact on our performance during a particular period. Similar
to Adjusted EBITDA, we also use Normalized Adjusted EBITDA as a
factor in evaluating the performance of certain management
personnel when determining incentive compensation.
Adjusted EBITDA and Normalized Adjusted EBITDA may not be
comparable to similarly titled measures reported by other
companies. Adjusted EBITDA and Normalized Adjusted EBITDA, while
providing useful information, should not be considered in isolation
or as an alternative to net income or cash flows as determined
under GAAP. Consistent with Regulation G under the U.S. federal
securities laws, Adjusted EBITDA and Normalized Adjusted EBITDA
have been reconciled to the nearest GAAP measure, and this
reconciliation is located under the heading "Normalized Adjusted
EBITDA Reconciliation" following the Consolidated Statements of
Operations included in this press release.
About Fortress International Group, Inc.
Fortress International Group, Inc. is leading mission-critical
facilities into a new era of maximum uptime and efficiency.
Fortress provides consulting and engineering, construction
management and 24/7/365 site services for the world's most
technology dependent organizations. Serving as a trusted advisor,
Fortress delivers the strategic guidance and pre-planning that
makes every stage of the critical facility lifecycle more
efficient. For those who own, lease or manage mission-critical
facilities, Fortress provides innovative end-to-end capital
management, energy, IT strategy, procurement, design, construction,
implementation and operations solutions that optimize performance
and reduce cost.
Fortress International Group, Inc. is headquartered in
Maryland, with offices throughout
the U.S. For more information, visit: www.thefigi.com or call
888-321-4877.
Forward Looking Statements
This press release may contain "forward-looking statements" --
that is, statements related to future -- not past -- events, plans,
and prospects. In this context, forward-looking statements may
address matters such as our expected future business and financial
performance, and often contain words such as "guidance," "expects,"
"anticipates," "intends," "plans," "believes," "seeks," "should,"
or "will." Forward-looking statements by their nature address
matters that are, to different degrees, uncertain. Particular
uncertainties that could adversely or positively affect the
Company's future results include: the Company's reliance on a
significant portion of its revenues from a limited number of
customers; risks relating to operating in a highly competitive
industry; actual or potential conflicts of interest between the
Company and members of the Company's senior management; risks
relating to rapid technological, structural, and competitive
changes affecting the industries the Company serves; the
uncertainty as to whether the Company can replace its backlog;
risks involved in properly managing complex projects; risks
relating the possible cancellation of customer contracts on short
notice; risks relating our ability to continue to implement our
strategy, including having sufficient financial resources to carry
out that strategy; risks relating to our ability to meet all of the
terms and conditions of our debt obligations; uncertainty related
to current economic conditions and the related impact on demand for
our services; and other risks and uncertainties disclosed in the
Company's filings with the Securities and Exchange Commission,
including the Annual Report on Form 10-K for the fiscal year ended
December 31, 2012. These
uncertainties may cause the Company's actual future results to be
materially different than those expressed in the Company's
forward-looking statements. The Company does not undertake to
update its forward-looking statements.
Fortress International Group, Inc.
Condensed Consolidated Balance Sheets
|
|
|
|
(Unaudited)
|
|
|
|
|
March 31,
|
|
December
31,
|
|
|
|
|
2013
|
|
2012
|
Assets
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
Cash and cash
equivalents
|
|
|
$
4,632,509
|
|
$
5,608,322
|
|
Contract and other
receivables, net
|
|
|
12,564,772
|
|
7,525,340
|
|
Costs and estimated earnings
in excess of billings
|
|
|
|
|
|
|
on uncompleted
contracts
|
|
|
900,295
|
|
813,348
|
|
Prepaid expenses and other
current assets
|
|
|
480,048
|
|
429,089
|
Total current
assets
|
|
|
18,577,624
|
|
14,376,099
|
Property and equipment,
net
|
|
|
243,312
|
|
273,451
|
Goodwill
|
|
|
1,768,861
|
|
1,768,861
|
Other intangible assets,
net
|
|
|
60,000
|
|
60,000
|
Other assets
|
|
|
21,792
|
|
19,358
|
Total assets
|
|
|
$20,671,589
|
|
$
16,497,769
|
Liabilities and
Stockholders' Equity
|
|
|
|
Current
Liabilities
|
|
|
|
|
Convertible notes payable,
current portion
|
|
|
$
500,000
|
|
$
500,000
|
|
Accounts payable and accrued
expenses
|
|
|
11,283,658
|
|
5,753,347
|
|
Billings in excess of costs
and estimated earnings
|
|
|
|
|
|
|
on uncompleted
contracts
|
|
|
1,720,349
|
|
3,028,627
|
Total current
liabilities
|
|
|
13,504,007
|
|
9,281,974
|
Convertible notes, less
current portion
|
|
|
1,832,301
|
|
1,957,301
|
Other
liabilities
|
|
|
44,950
|
|
52,626
|
Total
liabilities
|
|
|
15,381,258
|
|
11,291,901
|
Commitments and
Contingencies
|
|
|
-
|
|
-
|
Stockholders'
Equity
|
|
|
|
|
|
|
Preferred stock- $.0001 par
value; 1,000,000 shares authorized; no shares
|
|
|
|
|
|
|
issued or
outstanding
|
|
|
-
|
|
-
|
|
Common stock- $.0001 par
value, 49,000,000 and 100,000,000 shares
authorized;
|
|
|
|
|
|
|
15,187,527 and 15,087,526
issued; 14,378,773 and 14,278,772 outstanding at
|
|
|
|
|
|
|
March 31, 2013 and December
31, 2012, respectively
|
|
|
1,519
|
|
1,509
|
|
Additional paid-in
capital
|
|
|
66,413,368
|
|
66,305,764
|
|
Treasury stock- 808,754 and
808,754 shares at cost at
|
|
|
|
|
|
|
March 31, 2013 and December
31, 2012, respectively
|
|
|
(1,503,496)
|
|
(1,503,496)
|
|
Accumulated
deficit
|
|
|
(59,621,060)
|
|
(59,597,909)
|
Total stockholders'
equity
|
|
|
5,290,331
|
|
5,205,868
|
Total liabilities and
stockholders' equity
|
|
|
$20,671,589
|
|
$
16,497,769
|
Fortress International Group, Inc.
Condensed Consolidated Statements of
Operations
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
For the Three Months
Ended
|
|
|
|
|
|
March 31, 2013
|
|
March 31, 2012
|
Results of
Operations:
|
|
|
|
|
|
|
Revenue
|
|
|
$
14,118,627
|
|
$
14,309,861
|
|
Cost of revenue, excluding
depreciation and amortization
|
|
11,358,976
|
|
12,255,359
|
|
Gross profit, excluding
depreciation and amortization
|
|
2,759,651
|
|
2,054,502
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
|
2,708,838
|
|
2,907,632
|
|
|
Restructuring
charges
|
|
|
-
|
|
279,286
|
|
|
Depreciation and
amortization
|
|
|
50,133
|
|
76,905
|
|
Total operating
costs
|
|
|
2,758,971
|
|
3,263,823
|
|
Operating income
(loss)
|
|
|
680
|
|
(1,209,321)
|
|
Interest expense,
net
|
|
|
(23,831)
|
|
(42,768)
|
|
Loss before income
taxes
|
|
|
(23,151)
|
|
(1,252,089)
|
|
Income tax
expense
|
|
|
-
|
|
-
|
|
Net
loss
|
|
|
$
(23,151)
|
|
$
(1,252,089)
|
Basic Loss per
Share:
|
|
|
|
|
|
|
Loss per common
share
|
|
|
$
(0.00)
|
|
$
(0.09)
|
|
Weighted average common shares
outstanding
|
|
14,356,551
|
|
14,101,711
|
Diluted Loss per
Share:
|
|
|
|
|
|
|
Loss per common
share
|
|
|
$
(0.00)
|
|
$
(0.09)
|
|
Weighted average common shares
outstanding
|
|
14,356,551
|
|
14,101,711
|
Fortress International Group, Inc.
Normalized Adjusted EBITDA Reconciliation
|
|
(Unaudited)
|
|
|
For the Three Months
Ended
|
|
|
March 31, 2013
|
|
March 31, 2012
|
Net (loss)
income
|
$
(23,151)
|
|
$
(1,252,089)
|
Interest expense,
net
|
23,831
|
|
42,768
|
Depreciation and
amortization
|
50,133
|
|
76,905
|
EBITDA
|
|
$
50,813
|
|
$
(1,132,416)
|
Stock based
compensation
|
107,614
|
|
97,367
|
Adjusted
EBITDA
|
$
158,427
|
|
$
(1,035,049)
|
Restructuring
Charges
|
-
|
|
279,286
|
Other (income)/charges
including
|
|
|
|
severance, consulting
and litigation
|
-
|
|
244,609
|
Normalized Adjusted
EBITDA
|
$
158,427
|
|
$
(511,154)
|
SOURCE Fortress International Group, Inc.