Engineering & Evaluation Revenues Up 20% Over Prior Year Third Quarter; Growth In Telecommunication Testing Continues.Business Editors CALABASAS, Calif.--(BUSINESS WIRE)--Dec. 12, 2000 National Technical Systems Reports Fiscal 2001 Third Quarter, Nine-Month Results National Technical Systems Inc. (Nasdaq: NTSC (National TV Standards Committee) The committee that developed the television standards for the U.S, which are also used in Canada, Japan, South Korea and several Central and South American countries. Both the committee and the standard are called "NTSC. ) (NTS NTS National Technical Systems NTS National Trust for Scotland NTS Nevada Test Site NTS NT Server (Microsoft Windows) nts Not the Same NTS National Traffic System (amateur radio) ), a leading provider of certification testing and staffing services for telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. , information technology and other industries, Tuesday announced results for its third quarter and first nine months of fiscal year 2001, ended Oct. 31, 2000. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the announcement by NTS Chairman and Chief Executive Officer Jack Lin, revenue from the company's Engineering & Evaluation Group continued its strong growth in this fiscal year's third quarter and first nine months, increasing 20 percent and 19 percent, respectively, as revenue derived from the group's testing of telecommunications products also grew at an increasing rate. The company's total overall third quarter revenue rose just six percent over the same period last year with total overall revenue for the first nine months of this fiscal year showing a modest year-to-year decline due to decreases in technical staffing revenue in both periods of this fiscal year. For this fiscal year's third quarter, total overall revenue for the company was $22.1 million, with net income of $424,000, or a fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. $0.05 per share. This compares with total overall revenue of $20.8 million, and net income of $423,000, or a fully diluted $0.05 per share, for the year-earlier third quarter. For the first nine months of fiscal year 2001, total overall revenue was $63.9 million with net income of $1.3 million, or $0.16 per fully diluted share, which compares with total overall revenue of $64.2 million with net income of $1.9 million, or $0.22 per fully diluted share, for the first nine months of last fiscal year. This fiscal year's results for the first nine months include the effect of an increase in costs in the second quarter for the Technical Staffing Group totaling approximately $880,000, which stemmed stemmed adj. 1. Having the stems removed. 2. Provided with a stem or a specific type of stem. Often used in combination: stemmed goblets; long-stemmed roses. from fraud perpetrated against the company. The company has concluded its preliminary investigation into this matter and is in the process of submitting a claim to its insurance carrier under its employee dishonesty dis·hon·es·ty n. pl. dis·hon·es·ties 1. Lack of honesty or integrity; improbity. 2. A dishonest act or statement. Noun 1. policy. After reviewing the company's Proof of Loss, the insurance carrier may request further information before accepting or rejecting the company's claim. Newly promoted NTS President and Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. William C. McGinnis said, "Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. for this fiscal year's third quarter increased approximately 16 percent to $1.24 million, up from $1.07 million for the year-earlier period; however, our third quarter net income was reduced by increases in interest charges that resulted mainly from financing purchases of capital equipment used to support the growth of our telecommunications and computer products testing businesses. "The availability of this equipment has had a positive impact on the Engineering & Evaluation Group, where we continue to see excellent growth across the board. Revenue from our telecommunications and computer products testing businesses continues to reflect solid growth trends, while aerospace and defense industry revenue is maintaining good year-to-year gains, as well." NTS has also made significant strides in its computer hardware and software testing Software testing is the process used to measure the quality of developed computer software. Usually, quality is constrained to such topics as correctness, completeness, security, but can also include more technical requirements as described under the ISO standard ISO 9126, such business in the last several months. For example, it is working with a large automotive company in Southern California Southern California, also colloquially known as SoCal, is the southern portion of the U.S. state of California. Centered on the cities of Los Angeles and San Diego, Southern California is home to nearly 24 million people and is the nation's second most populated region, , performing functional testing (testing) functional testing - (Or "black-box testing", "closed-box testing") The application of test data derived from the specified functional requirements without regard to the final program structure. of that company's Web site, which is a business-to-business site designed to serve its network of dealerships throughout the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . The site allows the dealers to conduct their day-to-day business with the company's Sales Department, including ordering cars, financing sales, ordering parts, receiving authorization for warranty work, and many other business transactions. In another new initiative, NTS has been providing USB USB in full Universal Serial Bus Type of serial bus that allows peripheral devices (disks, modems, printers, digitizers, data gloves, etc.) to be easily connected to a computer. certification and cable modem cable modem Modem used to convert analog data signals to digital form and vise versa, for transmission or receipt over cable television lines, especially for connecting to the Internet. testing, a new niche, that will attract new customers and new business opportunities. Revenue in the company's core Engineering & Evaluation Group for the third quarter of fiscal year 2001 increased 20.2 percent to $14.8 million, up from $12.3 million in last fiscal year's third quarter. Revenue for this fiscal year's first nine months in the Engineering & Evaluation Group increased to $44 million, up 18.5 percent from revenue of $37.1 million for last fiscal year's first nine months. Total bookings in the Engineering & Evaluation Group, which includes telecommunications testing, continued to show steady increases, growing to $44.8 million for the first nine months of this year, up 24 percent from $36.1 million for the first nine months of last year. NTS bookings for its higher margin telecommunications testing business in the first nine months of fiscal 2001 continued to grow steadily, increasing by more than 100 percent to $9 million when compared with the same period last year. The company's California and Massachusetts telecommunications facilities In telecommunication, the term facility has the following meanings: 1. A fixed, mobile, or transportable structure, including (a) all installed electrical and electronic wiring, cabling, and equipment and (b) all supporting structures, such as utility, ground network, maintained a record pace in bookings, revenues and earnings during the third quarter and first nine months of this fiscal year as business from the telecommunications testing market continued to expand. Technical staffing third quarter revenues declined 14 percent to $7.3 million from $8.5 million in the third quarter of last fiscal year and, for the first nine months of the current fiscal year, technical staffing revenues declined 27 percent to $19.9 million, when compared with $27 million in the same period last fiscal year. "While technical staffing revenues declined on a year-to-year basis in both the third quarter and first nine months of this fiscal year," McGinnis commented, "we started to receive revenue in this fiscal year's third quarter from our contract with Litton Industries Named after inventor Charles Litton Sr., Litton Industries was a large defense contractor in the United States, bought by the Northrop Grumman Corporation in 2001. Guidance and Control Systems. In addition, we have made a number of important operational and structural changes in our Staffing Group including changing it to a virtual, Internet-based business model from a traditional bricks and mortar A store (shop, supermarket, department store, etc.) in the real world. Contrast with clicks and mortar. model, utilizing our EZAccess network program that came online earlier this year." National Technical Systems Inc. is an outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. services company providing organizations in the information technology (IT) and high technology markets integrated testing, certification, quality registration, systems evaluation and IT staffing services. For additional information about the company, visit its Web site at www.ntscorp.com. For investor relations Investor relations The process by which the corporation communicates with its investors. information visit the Allen & Caron Web site at www.allencaron.com. The statements in this news release that relate to future plans, events or performance, are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve risks and uncertainties, including risks associated with uncertainties pertaining per·tain intr.v. per·tained, per·tain·ing, per·tains 1. To have reference; relate: evidence that pertains to the accident. 2. to operating new facilities, customer orders, demand for services and products, development of markets for the company's services and products and other risks identified in the company's SEC filings. Actual results, events and performance may differ materially. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" . The company undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
National Technical Systems Inc. and Subsidiaries
Consolidated Statement of Operations
(unaudited)
Oct. 31, Oct. 31,
2000 1999 2000 1999
Net
revenues $22,103,000 $ 20,831,000 $63,899,000 $64,190,000
Cost of
sales 16,363,000 15,123,000 46,522,000 45,381,000
Gross
profit 5,740,000 5,708,000 17,377,000 18,809,000
Selling,
general and
administrative
expense 4,498,000 4,634,000 13,594,000 14,571,000
Operating
income 1,242,000 1,074,000 3,783,000 4,238,000
Other income
(expense):
Interest expense,
net (500,000) (376,000) (1,487,000) (1,027,000)
Other (26,000) 14,000 (82,000) 40,000
Total other
expense (526,000) (362,000) (1,569,000) (987,000)
Income before
income taxes
and minority
interest 716,000 712,000 2,214,000 3,251,000
Income
taxes 281,000 273,000 863,000 1,296,000
Income before
minority
interest and
discontinued
operations 435,000 439,000 1,351,000 1,955,000
Minority
interest (11,000) (1,000) (15,000) (1,000)
Income from
continuing
operations 424,000 438,000 1,336,000 1,954,000
(Loss) from
discontinued
operations,
net of taxes 0 (15,000) 0 (98,000)
Net
income $424,000 $423,000 $1,336,000 $1,856,000
Basic earnings
(loss) per
common share
Continuing
operations $0.05 $0.05 $0.16 $0.23
Discontinued
operations 0.00 0.00 0.00 (0.01)
Net income $0.05 $0.05 $0.16 $0.22
Diluted
earnings
(loss) per
common share
Continuing
operations $0.05 $0.05 $0.16 $0.23
Discontinued
operations 0.00 0.00 0.00 (0.01)
Net income $0.05 $0.05 $0.16 $0.22
Weighted
average
common shares
outstanding 8,509,000 8,352,000 8,493,000 8,337,000
Dilutive effect
of stock
options 22,000 191,000 58,000 257,000
Weighted
average
common shares
outstanding,
assuming
dilution 8,531,000 8,543,000 8,551,000 8,594,000
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