MSX International Sales Increase 42% In 1999
28 February 2000
MSX International Sales Increase 42% In 1999; Operating Income Increases 64%
AUBURN HILLS, Mich., Feb. 25 -- MSX International's sales for
the fiscal year ended January 2, 2000 increased 42% to $760 million from $534
million in fiscal 1998. The increase included 20% internal growth, primarily
in engineering and staffing services, as well as incremental sales of
approximately $121 million from companies acquired in fiscal 1998 and 1999.
Operating income for fiscal 1999 was $38.3 million compared with operating
income of $23.3 million in 1998, a 65% increase. The increase is a result of
the improved sales in existing businesses, a reduction in administrative costs
relative to sales, and the accretive impact of acquisitions. Net income for
the fiscal year was $10.2 million compared with net income of $2.8 million in
the comparable prior period. The increase in net income was due to increased
operating income and decreases in the company's effective income tax rate,
partially offset by increased interest cost due to the company's 1999
acquisition and financing activities.
Thomas T. Stallkamp, MSX International's new chief executive officer,
commented, "The company's 1999 performance is an outstanding achievement and
provides a solid base for the year 2000. Our strong internal growth is
enhanced by several strategic acquisitions, which expand the company's
geographic reach and result in several important new customer relationships.
"We intend to focus the company on the continuing growth in engineering
services, technical services and professional staffing, which are all vital to
the new economy. Based on our strengths in these areas, we expect to assist
our U.S. and global customers as they take advantage of the merger of
e-commerce with their traditional businesses."
MSX International's reported 1999 sales reflect a change in presentation
from prior reporting. Sales and cost of sales generated by the company's
purchasing support services, which are included in total net sales, are now
shown net of billings from sub-suppliers. The new presentation has no impact
on the current or historical gross profit, operating income or net income of
the company. It improves visibility to the operating performance of the
company relative to "value-added" revenues, as well as reflects clarifying
guidance issued during the fourth quarter of 1999 by the Securities and
Exchange Commission to, among others, companies that provide "master vendor"
services for their customers. Previously reported sales and cost of sales
have been reclassified to correspond to the 1999 presentation.
MSX International is a leading, global provider of technology-driven
engineering, business, and specialized staffing services. The company's
services enable customers to significantly improve their business performance
by adding value and helping them to achieve a competitive advantage.
MSX International deploys more than 15,000 professional staff and contract
personnel at over 85 operating locations in 23 countries worldwide. MSX
International offers its customers a wide range of technology-driven services,
both on-site and off-site, including product engineering and manufacturing
engineering; contract and temporary staffing; training; purchasing support;
marketing support; electronic document and information storage and retrieval;
process improvement consulting; and web and information technology services.
MSX International's headquarters is in Auburn Hills, Michigan. Visit MSX
International's Web site at http://www.msxi.com . MSX International's news
releases are also available at http://www.prnewswire.com .
This document contains statements that constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements are not guarantees of future
performance and involve significant risks and uncertainties. Actual results
may vary materially from those in the forward-looking statements as a result
of any number of factors, many of which are beyond the control of management.
These important factors are discussed in MSX International's Registration
Statement on Form S-4 (dated July 20, 1999) and in other filings with the
Securities and Exchange Commission.
Fiscal Quarters Fiscal Years
1999 1998 1999 1998
(dollars in thousands)
Net Sales $189,900 $154,342 $759,842 $533,942
Cost of sales 163,192 130,341 653,543 449,914
Gross profit 26,708 24,001 106,299 84,028
Selling, general
and administrative
expenses 16,994 15,970 64,813 59,083
Amortization of
goodwill and
other intangibles 1,005 1,001 3,156 1,690
Operating income 8,709 7,030 38,330 23,255
Interest expense, net 5,792 4,440 21,141 17,416
Income (loss) before
income taxes 2,917 2,590 17,189 5,839
Income tax provision 1,317 1,340 6,995 3,068
Net income (loss) $1,600 $1,250 $10,194 $2,771