EX-99.1 2 v114077_ex99-1.htm

 
Company Contact:
Investor Relations:
Timothy C. Dec
John McNamara
Chief Financial Officer
Cameron Associates
Fortress International Group, Inc.
(212) 245-8800 x 205
Phone: (410) 312-9988 x 224
john@cameronassoc.com

FOR IMMEDIATE RELEASE:
 
Fortress International Group, Inc. Announces 2008 First Quarter Financial Results

Backlog reaches $207.5 million
 
Forecasts $3 Million Adjusted EBITDA for 2008 Full Year
 
COLUMBIA, MD - May 13, 2008 - Fortress International Group Inc. (NASDAQ: FIGI), a company providing comprehensive services for the planning, design, development and maintenance of mission-critical facilities and information infrastructure, announced today financial results for the first quarter of 2008.

For the first quarter ended March 31, 2008, the Company reported revenue of $19.4 million and a net loss of $2.3 million, or $ 0.19 per basic and diluted share compared to revenue of $8.7 million and a net loss of $1.0 million or $0.09 per basic and diluted share for the first quarter of 2007. The adjusted EBITDA loss for the quarter ended March 31, 2008 was approximately $935 thousand compared to an adjusted EBITDA loss of $876 thousand for the first quarter of 2007.

The Company defines adjusted EBITDA as earnings before non-cash stock-based compensation, interest, taxes, depreciation and amortization. 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.

Commenting on the results, Chief Executive Officer, Thomas P. Rosato said, “Our new business efforts continued to yield strong results as can be seen in growing backlog, which increased 20% from December 31, 2007. Through the first quarter of 2008, we were awarded $54.0 million in new business and the pace of new projects is expected to continue to be strong. The first quarter presented us with the challenge of a few customers who had delayed the start-up of some large projects. These delays had an impact on revenues in the first quarter of 2008. However, we have been in recent discussions with those customers and we now have more clarity and we anticipate that these projects will begin converting to revenue this year. Our reputation for high-quality works continues to grow as evidenced by our extensive customer list which contains many of the most well-known companies and organizations in the country.”

Commenting on the financial results, Chief Financial Officer Timothy C. Dec said, “Despite the challenging environment for corporate spending, we generated both year over year and sequential revenue growth. Our financial position remains strong with $8.4 million in cash. Our backlog at March 31, 2008 was at a Company historic high of $207.5 million. We believe that the size of our backlog, its ongoing growth and our expected timeline for the conversion of backlog to revenue, now allow us to offer some financial guidance. We believe that we will generate revenue of between $120 and $125 million for the full calendar year with an adjusted EBITDA of $3 million for the full year.

The Company will conduct a conference call and webcast to discuss its financial results on Wednesday May 14 at 8:30 a.m. ET. The call may be accessed live by dialing 877-440-5804 five minutes before the start of the call. An accompanying slide presentation will be available via the Internet at:

www.thefigi.com
 
The webcast and conference call will be archived after its completion and will remain available through May 28, 2008 by dialing 888-203-1112 and entering replay passcode 8443214.  

 
 

 
 
FORTRESS INTERNATIONAL GROUP, INC.
CONSOLIDATED BALANCE SHEETS

 
 
March 31,
 
December 31,
 
 
 
2008
 
2007
 
Current Assets
         
Cash and cash equivalents
 
$
8,391,830
 
$
13,172,210
 
Contract and other receivables, net
   
12,221,311
   
18,349,140
 
Costs and estimated earnings in excess
             
of billings on uncompleted contracts
   
1,428,688
   
1,322,254
 
Prepaid expenses and other current assets
   
606,526
   
301,487
 
Income taxes receivable
   
893,322
   
893,322
 
Total current assets
   
23,541,677
   
34,038,413
 
               
Property and equipment, net
   
1,017,451
   
1,044,545
 
Goodwill
   
22,429,483
   
20,714,967
 
Intangible assets, net
   
21,585,826
   
21,089,136
 
Other assets
   
814,414
   
512,000
 
Total assets
 
$
69,388,851
 
$
77,399,061
 
               
Liabilities and Stockholders' Equity
             
Current Liabilities
             
Notes payable, current portion
 
$
224,100
 
$
1,650,306
 
Accounts payable and accrued expenses
   
11,691,848
   
16,121,492
 
Billings in excess of costs and
             
estimated earnings on uncompleted
             
contracts
   
2,814,715
   
3,880,279
 
Total current liabilities
   
14,730,663
   
21,652,077
 
               
Notes payable, less current portion
   
8,239,544
   
7,848,661
 
Other liabilities
   
44,648
   
44,648
 
Total liabilities
   
23,014,855
   
29,545,386
 
               
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;
             
12,247,296 and 12,150,400 issued;
             
12,089,221 and 11,996,325 outstanding
             
at March 31, 2008 and December 31, 2007,
             
respectively
   
1,224
   
1,214
 
Additional paid-in capital
   
56,088,523
   
55,268,012
 
Treasury stock, 158,075 shares at
             
March 31, 2008 and December 31,
             
2007, at cost
   
(814,198
)
 
(814,198
)
Accumulated deficit
   
(8,901,553
)
 
(6,601,353
)
Total stockholders' equity
   
46,373,996
   
47,853,675
 
Total liabilities and stockholders' equity
 
$
69,388,851
 
$
77,399,061
 

 
 

 

FORTRESS INTERNATIONAL GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS

 
 
Successor (Fortress
 
Predecessor
 
 
 
International Group, Inc.)
 
(TSS/Vortech)
 
 
       
For the
 
 
       
period
 
 
 
For the three
 
For the three
 
January 1,
 
 
 
months ended
 
months ended
 
through
 
 
 
March 31,
 
March 31,
 
January 19,
 
 
 
2008
 
2007
 
2007
 
Results of Operations:
             
Revenue
 
$
19,432,080
 
$
8,676,937
 
$
1,412,137
 
Cost of revenue
   
16,020,878
   
7,205,566
   
1,108,276
 
Gross profit
   
3,411,202
   
1,471,371
   
303,861
 
Operating expenses:
                   
Selling, general and
                   
administrative
   
4,806,070
   
2,637,940
   
555,103
 
Depreciation
   
106,877
   
55,431
   
33,660
 
Amortization of intangibles
   
755,385
   
440,454
   
-
 
Total operating costs
   
5,668,332
   
3,133,825
   
588,763
 
Operating loss
   
(2,257,130
)
 
(1,662,454
)
 
(284,902
)
Interest income (expense), net
   
(43,070
)
 
98,805
   
3,749
 
Loss from operations before
                   
income taxes
   
(2,300,200
)
 
(1,563,649
)
 
(281,153
)
Income tax benefit
   
-
   
531,641
   
-
 
Net loss
 
$
(2,300,200
)
$
(1,032,008
)
$
(281,153
)
Per Common Share (Basic and Diluted):
                   
Basic and diluted net loss
 
$
(0.19
)
$
(0.09
)
$
-
 
Weighted average common shares
                   
outstanding-basic and diluted
   
12,073,072
   
11,390,487
   
-
 
 
 
 

 

FORTRESS INTERNATIONAL GROUP, INC.
ADJUSTED EBITDA RECONCILIATION

 
 
Successor (Fortress
 
Predecessor
 
 
 
International Group, Inc.)
 
(TSS/Vortech)
 
 
       
For the
 
 
 
 
     
period
 
 
 
For the three
 
For the three
 
January 1,
 
 
 
months ended
 
months ended
 
through
 
 
 
March 31,
 
March 31,
 
January 19,
 
 
 
2008
 
2007
 
2007
 
Net loss
 
$
(2,300,200
)
$
(1,032,008
)
$
(281,153
)
Interest
   
43,070
   
(98,805
)
 
(3,749
)
Taxes
   
-
   
(531,641
)
 
-
 
Depreciation
   
106,877
   
55,431
   
33,660
 
Amortization
   
857,310
   
529,052
   
-
 
EBITDA
   
(1,292,943
)
 
(1,077,971
)
 
(251,242
)
Non-cash equity based compensation
   
357,746
   
202,359
   
-
 
Adjusted EBITDA
 
$
(935,197
)
$
(875,612
)
$
(251,242
)
 
 
 

 

ABOUT FORTRESS INTERNATIONAL GROUP, INC.
 
Fortress International Group, Inc. (FIGI), operating through its principal division Total Site Solutions (TSS), plans, designs, builds and maintains specialized facilities such as data centers, trading floors, call centers, network operation centers, communication facilities, laboratories and secure facilities. For more than a quarter-century, the TSS team has pioneered building robust and scalable infrastructure into mission-critical facilities. The firm offers unsurpassed expertise in the infrastructure systems (electrical, mechanical, telecommunications, security, fire protection and building automation) that are the critical facility's lifeblood. TSS’s comprehensive portfolio of services and multi-disciplinary expertise provide customers a highly respected single source for critical services that bridge the gap between IT and facilities.

Headquartered in the Baltimore-Washington corridor, FIGI provides complete turnkey facility services from the initial planning stages, to construction, to ongoing maintenance of the completed project. Its clients include the world's most demanding mission-critical organizations, including Fortune 500 firms and US government agencies. For more information, visit www.totalsiteteam.com or call 888-321-4TSS (4877).

FORWARD-LOOKING STATEMENTS

This press release contains “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 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.