VERSAR INC FORM 8-K (Current report filing) Filed 09/03/13 for the Period Ending 09/03/13 Address 6850 VERSAR CENTER SPRINGFIELD, VA 22151 Telephone 7037503000 CIK 0000803647 Symbol VSR SIC Code 8711 - Engineering Services Industry Construction Services Sector Capital Goods Fiscal Year 06/30 http://www.edgar-online.com Copyright 2016, EDGAR Online, Inc. All Rights Reserved. Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use.
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): September 3, 2013 VERSAR, INC. (Exact name of Registrant as specified in its charter) Delaware 1-9309 54-0852979 (State of Incorporation) (Commission File Number) (I.R.S. Employer Identification No.) 6850 Versar Center Springfield, Virginia 22151 (Address of principal executive offices) (Zip Code) (703) 750-3000 (Registrant s telephone number, including area code) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) Soliciting material pursuant to Rule 14a-12(b) under the Exchange Act (17 CFR 240.14a-12(b)) Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.01 Completion of acquisition or disposition of Assets. On September 3, 2013, Versar, Inc. ( Versar ) acquired all of the issued and outstanding capital stock of Geo-Marine, Inc. ( GMI ), a Texas corporation, from Applied Research Associates, Inc. ( ARA ). GMI provides engineering design, construction management, environmental planning and programming, and other services in support of a wide range of government, industry and commercial clients. The outstanding capital stock of GMI was acquired by Versar pursuant to a Stock Purchase Agreement by and among Versar, GMI and ARA, entered into on September 3, 2013. The maximum aggregate purchase price to be paid by Versar to ARA is $6,500,000, which is comprised of: (i) $3,100,000 of cash paid at closing; (ii) a seller note in the principal amount of $1,250,000 issued by Versar to ARA at closing; and (iii) up to $2,150,000 in contingent payments to be paid based on the achievement of certain contract award and revenue goals. The purchase price is subject to a post-closing adjustment based on an agreed target net working capital of GMI as of the date of closing. The Stock Purchase Agreement contains customary representations and warranties and requires ARA to indemnify Versar for certain liabilities arising under the agreement, subject to certain limitations and conditions. Item 2.02 Results of Operations and Financial Condition. On September 3, 2013, Versar issued a press release announcing Versar s financial results for the fiscal year ended June 28, 2013. A copy of the press release is attached as Exhibit 99.1 to this Current Report. Item 7.01 Regulation FD Disclosure. On September 3, 2013, Versar issued a press release announcing the acquisition of GMI. The press release is furnished as Exhibit 99.2 to this Current Report. Item 9.01 Financial Statements and Exhibits. (d) Exhibits. 99.1 Press Release issued on September 3, 2013 relating to the Company s financial results 99.2 Press Release issued on September 3, 2013 relating to the acquisition of Geo-Marine, Inc. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Dated: September 3, 2013 VERSAR, INC. By: /s/ Joshua J. Izenberg Joshua J. Izenberg Senior Vice President and General Counsel
NEWS RELEASE FOR IMMEDIATE RELEASE September 3, 2013 VERSAR, INC. ANNOUNCES FOURTH QUARTER AND FISCAL YEAR END 2013 RESULTS Offices Headquarters Springfield, VA Inside the U.S. Chandler, AZ Sacramento, CA Denver, CO Louisville, KY Columbia, MD Gaithersburg, MD Germantown, MD Charleston, SC San Antonio, TX Dugway, UT Dulles, VA Virginia Beach, VA Outside the U.S. Kabul, Afghanistan Baghdad, Iraq Manila, Philippines Abu Dhabi, UAE Milton Keynes, UK Springfield, VA September 3, 2013 Versar, Inc. (NYSE MKT: VSR) today announced financial results for the fourth quarter and fiscal year ended June 28, 2013. Continuing Operation Results Gross revenue from continuing operations for fiscal year 2013 of $102.6 million decreased 11% compared to $115.0 million in fiscal year 2012. Net income from continuing operations for the year ended June 28, 2013, was $4.1 million, or $0.43 per share. This compares to net income from continuing operations last year of $4.5 million, or $0.48 per share. Gross revenue from continuing operations for the fourth quarter of fiscal year 2013 was $25.1 million, a decrease of 10% compared to gross revenue from continuing operations of $27.9 million reported in the same quarter of fiscal year 2012. The Company reported a net income from continuing operations for the quarter of $450,000, or $0.05 per share on a fully diluted basis, compared to $1.1 million, or $0.12 per share on a fully diluted basis for the fourth quarter last year. Versar closed fiscal year 2013 with a cash balance of approximately $8.7 million and stockholders equity of $37.6 million, a 9% increase in stockholders equity compared to last year. As of June 28, 2013, Versar recorded funded backlog of approximately $108 million, an increase of 16% compared to $93 million of funded backlog at June 29, 2012. Tony Otten, CEO of Versar said, Fiscal 2013 was a solid year for Versar given the challenging business environment. For the year, we achieved profitability, grew our backlog, and maintained our very strong balance sheet. Revenues for the year were down, as expected, given the completion of our Tooele Chemical Demilitarization project and decreased domestic construction. In the fourth quarter, as we saw in the third quarter, profitability was lower resulting from a shift in revenue mix with the completion of two high margin programs in the fourth quarter of fiscal 2012, but in addition, we also had a significant write-off of an uncollected receivables account. Our backlog is robust including multiple Performance Based Remediation contracts as well as a large Personal Services contract with the U.S. Army Corps of Engineers. While we converted a bit less of our backlog to revenue in the fourth quarter than expected, we anticipate realizing these revenues in fiscal 2014. 6850 Versar Center Springfield, VA 22151 703.642.6888 Fax: 703.642.6825 www.versar.com
Discontinued Operations During the quarter, management decided that the Company s chemical laboratory, domestic telecommunications, and domestic protective equipment operations were no longer aligned with the Company s business strategy. As such, management elected to discontinue the Company s operations in these three components and has ended revenue generating business operations. Loss from discontinued operations for the fourth quarter ended June 28, 2013, net of tax, was $861,000, or $0.09 per diluted share, compared to income, net of tax, of $460,000, or $0.05 per diluted share for the same quarter last year. For the full year ended June 28, 2013, loss from discontinued operations, net of tax, was $1.7 million, or $0.18 per diluted share, compared to a loss of $287,000, or $0.03 last year. For the full year ended June 28, 2013, earnings per diluted share for continuing and discontinued operations was $0.25, compared to $0.45 in the prior year. Mr. Otten commented, We are a more nimble organization today and are focused on continually evaluating and evolving our operations to enhance Versar s business and long term profitability. During the quarter, we discontinued three of our smaller businesses that were not strategically aligned with our core operations and were also detracting from the overall profitability of the business. Mr. Otten concluded, Our focus remains on securing significant contracts related to non-discretionary funding, such as sustainable range management, unexploded ordnance and performance based remediation. Our balance sheet remains strong, and provides a solid foundation upon which to drive long term growth and enhanced profitability. Conference Call: The Company will hold a conference call at 10:00 AM Eastern Time on Wednesday, September 4 to discuss the Company's operational performance and financial results for its fiscal year 2013, ended June 28, 2013. The dial in number for the US and Canada is toll free, 877-407-8033. The international dial in number is 201-689-8033. Participants should call in a few minutes before 10:00 AM Eastern Time. For those unable to attend the conference call, replays will be available on Versar's website, www.versar.com. VERSAR, INC., headquartered in Springfield, Virginia, is a publicly traded global project management company providing sustainable value oriented solutions to government and commercial clients in the construction management, environmental services, munitions response, and professional services market areas. VERSAR operates a number of web sites, including the corporate web sites, www.versar.com, www.geomet.com, www.viap.com, www.dtaps.com, www.adventenv.com, www.charronconsulting.com, and www.ppsgb.com. This news release contains forward-looking information. The forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be significantly impacted by certain risks and uncertainties described herein and in Versar s Annual Report on Form 10-K filed with the Securities and Exchange Commission for the fiscal year ended June 29, 2012, as updated from time to time in the Company s periodic filings. The forward-looking statements are made as of the date hereof and Versar does not undertake to update its forward-looking statements. Contact: David Gray John Nesbett or Jennifer Belodeau Director of Financial Reporting Institutional Marketing Services (IMS) Versar, Inc. (203) 972-9200 (703) 642-6888 jnesbett@institutionalms.com dgray@versar.com 6850 Versar Center Springfield, VA 22151 703.642.6706 Fax: 703.642.6825 www.versar.com
VERSAR, INC. AND SUBSIDIARIES Consolidated Balance Sheets (in thousands, except share and per share amounts) June 28, 2013 As of June 29, 2012 ASSETS Current assets Cash and cash equivalents $ 8,728 $ 8,012 Accounts receivable, net 29,488 25,598 Inventory 1,225 1,428 Prepaid expenses and other current assets 928 1,938 Deferred income taxes 2,314 2,305 Income tax receivable, net 1,764 --- Total current assets 44,447 39,281 Property and equipment, net 2,108 3,341 Deferred income taxes, non-current 622 193 Goodwill 7,515 7,418 Intangible assets, net 1,798 2,283 Other assets 887 861 Total assets $ 57,377 $ 53,377 LIABILITIES AND STOCKHOLDERS EQUITY Current liabilities Accounts payable $ 10,788 $ 5,415 Accrued salaries and vacation 3,042 3,124 Other current liabilities 3,304 7,409 Income tax payable -- 677 Notes payable, current 333 333 Total current liabilities 17,467 16,958 Notes payable, non-current 333 667 Deferred income taxes 849 332 Other long-term liabilities 1,104 1,037 Total liabilities 19,753 18,994 Commitments and contingencies Stockholders equity Common stock, $.01 par value; 30,000,000 shares authorized; 9 849,773 shares and 9,645,149 shares issued; 9,579,753 shares and 9,391,575 shares outstanding 99 96 Capital in excess of par value 29,758 29,047 Retained earnings 9,366 6,963 Treasury stock, at cost (270,020 and 253,600 shares, respectively) (1,224) (1,166) Accumulated other comprehensive loss, foreign currency translation (375) (557) Total stockholders equity 37,624 34,383 Total liabilities and stockholders equity $ 57,377 $ 53,377 6850 Versar Center Springfield, VA 22151 703.642.6706 Fax: 703.642.6825 www.versar.com
VERSAR, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Income (Unaudited - in thousands, except per share amounts) For the Three Months Ended June 28, June 29, 2013 2012 June 28, 2013 Fiscal Years Ended June 29, 2012 GROSS REVENUE $ 25,124 $ 27,914 $ 102,622 $ 114,970 Purchased services and materials, at cost 11,530 10,513 44,070 51,531 Direct costs of services and overhead 11,496 13,666 44,865 46,988 GROSS PROFIT 2,098 3,375 13,687 16,451 Selling, general and administrative expenses 1,552 1,684 7,603 8,083 Other (income) expense (182) 144 (182) 199 OPERATING INCOME 728 1,907 6,266 8,169 OTHER (INCOME) EXPENSE Write-off of uncollectible financing receivable - - - 694 Interest income (24) 2 (28) (70) Interest expense 20 120 86 182 INCOME BEFORE INCOME TAXES 731 1,785 6,208 7,363 Income tax expense 282 654 2,079 2,881 NET INCOME FROM CONTINUING OPERATIONS $ 450 $ 1,131 $ 4,129 $ 4,482 Income (Loss) from discontinued operations, net of tax $ (861) $ 460 (1,726) (287) NET INCOME (LOSS) $ (412) $ 1,591 $ 2,403 $ 4,195 NET INCOME (LOSS) PER SHARE BASIC and DILUTED Continuing operations $ 0.05 $ 0.12 $ 0.43 $ 0.48 Discontinued operations $ (0.09) $ 0.05 $ (0.18) $ (0.03) NET INCOME (LOSS) PER SHARE BASIC AND DILUTED $ (0.04) $ 0.17 $ 0.25 $ 0.45 WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING BASIC 9,564 9,381 9,500 9,366 WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING DILUTED 9,574 9,400 9,510 9,381 6850 Versar Center Springfield, VA 22151 703.642.6706 Fax: 703.642.6825 www.versar.com
NEWS RELEASE FOR IMMEDIATE RELEASE September 3, 2013 VERSAR INC., ACQUIRES GEO-MARINE, INC. Acquisition Expected To Provide Over $20 Million in Annualized Revenue Provides Complementary Capabilities with Strong Environmental Expertise Offices Headquarters Springfield, VA Inside the U.S. Chandler, AZ Charleston, SC Columbia, MD Denver, CO Dulles, VA Germantown, MD Louisville, KY Sacramento, CA San Antonio, TX Outside the U.S. Abu Dhabi, UAE Baghdad, Iraq Kabul, Afghanistan Manila, Philippines Milton Keynes, UK Springfield, VA September 3, 2013, Versar, Inc. (NYSE MKT: VSR) announced today it has acquired Geo-Marine, Inc., a business with more than $20 million in annual revenues. The purchase price was paid with a combination of cash and seller notes. Geo-Marine, headquartered in Plano, Texas, 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 over $15 million. Tony Otten, CEO of Versar said, Geo-Marine is a great strategic fit for Versar. Our cultures are similar and Geo-Marine s technical capabilities complement our own very well. In particular, Geo-Marine s environmental expertise and customer base will allow us to expand our reach in terms of clients, technical capabilities and geography. Of particular note, Mr. Otten continued, is Geo-Marine s long-term relationship with the U.S. Navy. Just this past July, they were selected, along with two other firms, for a new, $75 million five-year ID/IQ with NAVFAC. We have identified the U.S. Navy as a key market that Versar wanted to penetrate, and with the acquisition of Geo-Marine, we believe we have accomplished that. We look forward to providing the U.S. Navy the same high-quality service that we have provided other branches of DOD. VERSAR, INC., headquartered in Springfield, VA, is a publicly traded global project management company providing sustainable value oriented solutions to government and commercial clients in the construction management, environmental services, munitions response, and telecommunication and technology integration market areas. VERSAR operates a number of web sites, including the corporate web sites, www.versar.com, www.geomet.com; www.viap.com; www.dtaps.com; www.adventenv.com, www.charronconsulting.com and www.ppsgb.com. This news release contains forward-looking information. The forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be significantly impacted by certain risks and uncertainties described herein and in Versar s Annual Report on Form 10-K filed with the Securities and Exchange Commission for the fiscal year ended June 29, 2012, as updated from time to time in the Company s periodic filings. The forward-looking statements are made as of the date hereof and Versar does not undertake to update its forward-looking statements. 6850 Versar Center Springfield, VA 22151 703.642.6888 Fax: 703.642.6825 www.versar.com
Contact: David Gray John Nesbett or Jennifer Belodeau Director of Financial Reporting Institutional Marketing Services (IMS) Versar, Inc. (203) 972-9200 (703) 642-6888 jnesbett@institutionalms.com dgray@versar.com 6850 Versar Center Springfield, VA 22151 703.642.6888 Fax: 703.642.6825 www.versar.com