Why it is profiled?
The company's new acquisitions and new contract vehicles provide for a stronger business base platform going forward.
Versar Inc. (VSR) is a project management company providing construction management, environmental sciences and engineering infrastructure solutions to public and private customers.
Fiscal 2010, which ended June 25, was a down year - with the company witnessing project losses in its U.S. construction business, Chemical Lab renovations in its National Security Segment, and higher than anticipated legal costs associated with an ongoing construction claim.
The net loss of $2.29 million or $0.25 per share incurred in fiscal 2010, hurt by a $1 million restructuring charge, was the firm's first yearly loss since 2003. Gross revenue for the year dropped 10% to $100.76 million as the wind down of Department of Defense work in Iraq and the weakened State and Municipal economy affected results.
But things are looking up for Versar this year as it continues to focus on larger programs for government customers, developing long-term level of effort contracts to stabilize its business base, and on several new expanding markets such as rural telecommunications and energy development.
In line with its strategic plan of growing revenue via acquisition, Versar acquired Professional Protection Systems Ltd. and Advent Environmental Inc in fiscal 2010.
Professional Protection Systems, or PPS, manufactures and sells proprietary personal protective equipment to the nuclear industry, including protective suits, decontamination showers, and emergency shelters. Advent is a Department of Defense, full service environmental contractor with significant capabilities in Military Munitions Response Plans and Unexploded Ordinance clean-up.
The PPS acquisition of January is expected to add approximately $5 million in annualized gross revenue to Versar's base business while the Advent acquisition of March is expected to be accretive in the first year and add over $12 million in annualized gross revenue.
The company ended fiscal 2010 with a funded backlog of about $78 million, an increase of 37% from fiscal 2009, primarily due to the acquisitions of Advent and PPS. The total contract backlog for Versar including unfunded expected government task orders, at year-end was about $745 million, an increase of a modest 1% over 2009.
Versar has also been able to snap up a series of contracts this year.
Heading into fiscal 2011, Versar secured two biological sciences support contracts of five-year term, valued at $5 million and $1 million from the Maryland Department of Natural Resources in early August.
Barely days after winning the contract from Maryland Department of Natural Resources, on August 12, the company was awarded a new $17.1 million contract by the US Army Corps of Engineers, Middle East District. The contract, known as Task Force SAFE (Safety Actions for Fire and Electricity), is to perform electrical inspections and repairs of facilities used by American personnel throughout Iraq and will run until August 2011.
On September 23, the company was awarded two new Cultural Resources contracts - one, a $500,000, 3-year contract from the Delaware Department of Transportation and the other a $2 million 5-year contract from the Maryland State Highway Administration.
The company won the third contract for this month on September 28 - a new $5 million, three-year contract from the U.S. Department of Commerce, National Oceanic & Atmospheric Administration to provide scientific and technical support to the National Marine Fisheries Service's Chesapeake Bay Office.
VSR has hit a low of $1.98 and a high of $5.70 over the past 52 weeks. The stock is currently up over 12% trading at $3.01 on an above-average volume of 185 thousand shares.
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