Fortress International Group, Inc. (NASDAQ: FIGI) (NASDAQ: FIGIU)
(NASDAQ: FIGIW) ("Fortress"), a leading provider of consulting and
engineering, construction management and 24/7/365 site services for
mission-critical facilities, today announced its financial results
for the first quarter ended March 31, 2009.
First Quarter 2009 Business Highlights:
-- Improved cost structure drove lower net loss and third consecutive
quarter of positive adjusted EBITDA;
-- Established Fortress as a premier provider in the growing
mission-critical facilities market by:
- Re-branding its subsidiaries, Rubicon Professional Services and
Total Site Solutions, into a vertically integrated organization
with comprehensive and turnkey capital infrastructure solutions
spanning the lifecycle of mission-critical facilities;
- Launching a new line of efficiency-focused mission-critical
facility services -- Fortress Strategic Energy Management
Solutions, Fortress Capital Solutions, Fortress Real Estate
Solutions -- to further differentiate Fortress' services-set in a
fragmented industry.
-- Added senior-level members to the management team to guide the Company's
growth, including the senior vice presidents for Energy Services and
Sales and Marketing.
For the three-month period ended March 31, 2009, the Company
reported revenue of $30.1 million, a 55% increase compared to
revenue of $19.4 million for the first quarter of 2008. Gross
profit for the first quarter of 2009 was $3.7 million, or 12.2%,
compared to gross profit of $3.4 million, or 17.6%. Gross margin
for the first quarter of 2009 reflects greater revenue
participation by the Company's construction management business
relative to the comparable period in 2008. Total operating expenses
for the first quarter of 2009 were $4.6 million, a decline of 19%
compared to operating expenses of $5.7 million in the first quarter
of 2008. Operating loss for the first quarter of 2009 was ($1.0)
million, a decline of 57% compared to an operating loss of ($2.3)
million in the first quarter of 2008. Net loss for the first
quarter of 2009 was ($1.0) million, or ($0.08) per share, compared
to a net loss of ($2.3) million, or ($0.19) per share for the first
quarter of 2008. Adjusted EBITDA for the first quarter ended March
31, 2009 was approximately $0.3 million, compared to an adjusted
EBITDA loss of ($0.9) million for the first quarter of 2008. The
Company defines adjusted EBITDA as earnings before non-cash
stock-based compensation, interest, taxes, depreciation and
amortization. Backlog totaled $45.5 million as of March 31, 2009,
compared to $63.2 million as of December 31, 2008.
Commenting on the results, Chief Executive Officer, Thomas P.
Rosato, stated, "We are pleased to report a third consecutive
quarter of adjusted EBITDA profitability driven primarily by
operational initiatives taken in the second-half of fiscal 2008 to
re-align our cost structure to our revenue base. Growth in revenues
year-over-year, though impressive, was offset by a sequential
decline in backlog as we continue to be impacted by the weak
economic environment. Overall, we view the growth in revenues and
improvement in our bottom line as reflective of the strength in our
business model and management's fiscal discipline in an uncertain
economic environment."
Mr. Rosato continued, "The several-quarter weakness in the
economy has given us the opportunity to rationalize our product
offering across our subsidiaries, and subsequent to the close of
the quarter, we re-branded Fortress into a leading provider of
comprehensive infrastructure solutions to the mission-critical
facilities industry. This is a position unique to Fortress given
our integration across all aspects of a mission-critical facility's
lifecycle, with particular strengths in consulting and engineering
and facilities management, two key areas of focus going forward. We
are already beginning to see the fruits of our vertical integration
with a recent uptick in contracts in our consulting and engineering
business. We believe this is a leading indicator of future
opportunities for our construction and facilities management
groups."
Chief Financial Officer Timothy C. Dec added, "Gross margin
declined sequentially as a result of a shift in sales towards
higher dollar-value, but lower margin construction business as
customers proceeded with existing build-out plans. Longer term,
however, and as part of the re-branding, we expect that our
emphasis on the higher margin consulting and engineering business,
coupled with greater sales focus on facilities management
contracts, will result in margin expansion and greater levels of
recurring revenues."
Mr. Rosato concluded, "The mission-critical facilities market is
experiencing a secular growth trend that we believe is being driven
by the continued exponential growth in data. The financing
environment is also driving demand as companies seek to lease
rather than own facilities in order to preserve capital.
Furthermore, the recent economic stimulus package allocates
substantial sums to digitizing entire industries, such as
healthcare. We believe that our pipeline of opportunities for the
second half of the fiscal year validates this thesis. Fortress, by
virtue of its vertical integration, experienced management team and
national footprint, is well positioned to capitalize on these
catalysts for growth and enhance long-term value for
shareholders."
Quarterly Conference Call Details
The Company will conduct its regularly scheduled financial
announcement conference call on Thursday, May 14, 2009, at 8:30
a.m. ET. Investors may listen to the conference call via telephone
at: 888-846-5003 (U.S./Canada) or 480-629-9856 (international) or
via live audio web cast on the investor relations section of the
Company's website at www.thefigi.com.
An audio replay of the conference call will also be available
approximately two hours after the conclusion of the call and will
be available until 8:30 a.m. ET on Wednesday, May 27, 2009. The
audio replay can be accessed by dialing 800-406-7325 (U.S./Canada)
or 303-590-3030 (international) and entering conference call ID
4069339, or via an archived webcast available on the investor
relations section of the Company's website at www.thefigi.com.
About Non-GAAP Financial Measures
The Company uses adjusted EBITDA as a measure of the Company's
operating trends. Investors are cautioned that adjusted EBITDA is
not a measure of liquidity or of financial performance under
Generally Accepted Accounting Principles (GAAP). The adjusted
EBITDA numbers presented may not be comparable to similarly titled
measures reported by other companies. 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, the non-GAAP measures in this press release have
been reconciled to the nearest GAAP measure, and this
reconciliation is located under the heading "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. By
combining the knowledge and experience of Total Site Solutions and
Rubicon Professional Services, two experts in critical facilities
infrastructure, Fortress International 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. -- setting a new standard for the optimized critical
facility.
Fortress International Group, Inc. (NASDAQ: FIGI) is
headquartered in Maryland, with offices throughout the U.S. For
more information, visit: www.FortressInternationalGroup.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; the uncertainty as to whether the Company can replace
its declining backlog; risks involved in properly managing complex
projects; risks relating to revenues under customer contracts, many
of which can be canceled on short notice; risks related to the
implementation of the Company's strategic plan, including the
ability to make acquisitions and the performance and future
integration of acquired businesses; and other risks and
uncertainties disclosed in the Company's filings with the
Securities and Exchange Commission. 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.
- financial tables to follow -
FORTRESS INTERNATIONAL GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
------------ ------------
March 31, December 31,
2009 2008
------------ ------------
Current Assets
Cash and cash equivalents $ 8,277,286 $ 12,448,157
Contract and other receivables, net 17,268,293 21,288,660
Costs and estimated earnings in excess of
billings on uncompleted contracts 3,924,909 3,742,530
Prepaid expenses and other current assets 867,814 539,124
------------ ------------
Total current assets 30,338,302 38,018,471
Property and equipment, net 787,212 824,487
Goodwill 4,811,000 4,811,000
Intangible assets, net 12,867,129 13,559,234
Other assets 260,823 225,853
------------ ------------
Total assets $ 49,064,466 $ 57,439,045
============ ============
Liabilities and Stockholders' Equity
Current Liabilities
Notes payable, current portion $ 110,601 $ 1,688,845
Convertible note, current portion 1,333,333 -
Accounts payable and accrued expenses 20,974,510 24,394,990
Billings in excess of costs and estimated
earnings on uncompleted contracts 3,307,477 6,047,765
------------ ------------
Total current liabilities 25,725,921 32,131,600
Notes payable, less current portion 291,034 311,709
Convertible notes, less current portion 2,666,667 4,000,000
Other liabilities 55,224 137,198
------------ ------------
Total liabilities 28,738,846 36,580,507
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, 100,000,000
shares authorized; 12,837,296 and
12,797,296 issued; 12,661,716 and
12,621,716 outstanding at March 31, 2009
and December 31, 2008, respectively 1,283 1,279
Additional paid-in capital 61,745,903 61,262,218
Treasury stock, 175,580 shares at cost at
March 31, 2009 and December 31, 2008 (869,381) (869,381)
Accumulated deficit (40,552,185) (39,535,578)
------------ ------------
Total stockholders' equity 20,325,620 20,858,538
------------ ------------
Total liabilities and stockholders' equity $ 49,064,466 $ 57,439,045
============ ============
FORTRESS INTERNATIONAL GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
--------------------------
For the Three Months Ended
March 31, March 31,
2009 2008
------------ ------------
Results of Operations:
Revenue $ 30,071,329 $ 19,432,080
Cost of revenue 26,403,191 16,020,878
------------ ------------
Gross profit 3,668,138 3,411,202
Operating expenses:
Selling, general and administrative 3,853,661 4,806,070
Depreciation and amortization 103,422 106,877
Amortization of intangibles 692,105 755,385
------------ ------------
Total operating costs 4,649,188 5,668,332
Operating loss (981,050) (2,257,130)
Interest income (expense), net (35,548) (43,070)
------------ ------------
Net loss $ (1,016,598) $ (2,300,200)
============ ============
Per Common Share (Basic and Diluted):
Basic and diluted net loss $ (0.08) $ (0.19)
Weighted average common shares
outstanding-basic and diluted 12,641,716 12,073,072
FORTRESS INTERNATIONAL GROUP INC.
ADJUSTED EBITDA RECONCILIATION
For the Three Months Ended
March 31,
------------ ------------
2009 2008
------------ ------------
(unaudited) (unaudited)
Net loss $ (1,016,598) $ (2,300,200)
Interest income (expense), net 35,548 43,070
Depreciation and amortization 103,422 106,877
Amortization of intangibles 692,105 857,310
------------ ------------
EBITDA (185,523) (1,292,943)
Stock and warrant-based compensation 483,689 357,746
------------ ------------
Adjusted EBITDA $ 298,166 $ (935,197)
============ ============
Company Contact: Thomas P. Rosato Chief Executive Officer
Fortress International Group, Inc. Phone: (410) 423-7438 Investor
Relations: Sanjay M. Hurry The Piacente Group, Inc. Phone: (212)
481-2050 sanjay@tpg-ir.com
Fortress International Grp. - Units 7/14/2009 (MM) (NASDAQ:FIGIU)
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