Versar, Inc. Announces First Quarter Fiscal 2016 Results

SPRINGFIELD, Va., Nov. 5, 2015 /PRNewswire/ -- Versar, Inc. (NYSE MKT: VSR) today announced financial results for the fiscal first quarter ended September 25, 2015. 

Financial Results

Gross revenue for the first quarter of fiscal year 2016 increased 52% to $44.9 million, compared to revenues of $29.6 million during the first quarter of the last fiscal year.  Gross margins decreased to 5%, compared to 9% in the same prior year quarter, primarily due to product mix and approximately $200,000 in one-time expenses related to the Company's acquisition of Johnson Controls Security Systems (JCSS), now known as Versar Security Systems (VSS).  Net loss for the quarter was $431,000 or ($0.04) per share compared to a net loss of $89,000 or a loss of ($0.01) per share in the same period of fiscal 2015.   

Tony Otten, CEO of Versar, said, "We delivered strong revenue growth in the first quarter of fiscal 2016 and are well positioned for enhanced profitability as we move into the balance of the fiscal year.  The substantial revenue growth was primarily driven by our Dover Air Force Base contract, a strategically important project for us as we broaden the Company's portfolio of capabilities for our customers.  This construction project has lower margins than the balance of our revenue and affected overall gross margins, as we discussed during our year-end earnings call in September.   Importantly, the first quarter is typically our least profitable quarter as we focus on bid proposals at the end of the government's fiscal year.  That said, we continued to manage our expenses prudently during the quarter as reflected by our relatively flat SG&A."   

Mr. Otten continued, "Our funded backlog of $225 million as of October 1, 2015 is 26% higher than the funded backlog on June 26, 2015.  The mix of this backlog includes higher margin business due to our improved business development capabilities as well as our acquisition of JCSS, which closed just after the end of the quarter.  JCSS is an excellent acquisition for us, bringing new, high margin, classified construction capabilities.  Our pipeline is substantial as marketplace recognition of our expanded capabilities and demand for our customized solutions remain strong." 

Funded Backlog

As of September 25, 2015, Versar recorded funded backlog of approximately $157 million, as compared to $179 million of funded backlog at the end of fiscal year 2015.  Versar's fiscal first quarter closed before the Government's fiscal year end of September 30, 2015, thus the first quarter did not include additional funded awards received during the last five days of September 2015.  The Company's funded backlog as of October 1, 2015 was $225 million, including Government awards and backlog from its acquisition of JCSS.     

During the quarter, the Company's joint venture with Johnson Controls Federal Systems was awarded a $2.5 million contract from the Air Force Civil Engineer Center to provide construction services at Mountain Home Air Force Base in Idaho. 

"We believe that our broadened capabilities and proven reputation for providing customized solutions in difficult terrains and challenging locations positions us well to drive continued revenue growth, improved margins and a return to profitability as we move through Fiscal 2016," Mr. Otten concluded.   

Conference Call:

The Company will hold a conference call at 2:00 PM Eastern Time today, Thursday, November 5, to discuss the Company's operational performance and financial results for the fiscal first quarter ended September 25, 2015. 

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 2:00 PM Eastern Time. For those unable to attend the conference call, a replay 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 the following web sites, www.versar.com and www.versarpps.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 26, 2015, 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.

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SOURCE Versar, Inc.