Mastech Holdings (NYSE AMEX:MHH)

PITTSBURGH, Feb. 7, 2012 /PRNewswire/ -- Mastech Holdings, Inc. (NYSE Amex: MHH), a national provider of Information Technology and Specialized Healthcare staffing services, announced today that it is commencing a modified "Dutch auction" tender offer to repurchase up to 608,000 shares of its common stock, representing approximately 17% of Mastech's outstanding shares. The 608,000 shares represent the remaining shares available for purchase under Mastech's stock repurchase program, which was previously announced on December 23, 2010.  The closing price of Mastech's common stock on the NYSE Amex on February 6, 2012 was $4.57.

Under the tender offer, shareholders will have the opportunity to tender some or all of their shares at a price within the range of $4.65 to $5.50 per share. The low end of this range is greater than the closing price of Mastech's common stock on the NYSE Amex on February 6, 2012.  Based on the number of shares tendered and the prices specified by the tendering shareholders, Mastech will determine the lowest per share price within the range that will enable it to buy 608,000 shares, or such lesser number of shares that are properly tendered.

If more than 608,000 shares are properly tendered at or below the determined price per share, Mastech will first purchase shares tendered by those shareholders owning fewer than 100 shares without pro ration, and then purchase all other shares on a pro rata basis, at the determined price per share. The number of shares subject to this tender offer may, at the discretion of Mastech, be increased by up to 2% of Mastech's outstanding shares, or approximately 71,382 shares, without amending or extending the tender offer.

Fourth Quarter 2011 Results

• Revenues for the quarter were $23.9 million and represented an 18% increase over the corresponding quarter last year and a 2% improvement over third quarter 2011 results.
• Consolidated net income for the fourth quarter 2011 totaled $253,000 or $0.07 per diluted share, compared to $304,000 or $0.08 per diluted share, in the same period last year. The 2011 fourth quarter results included severance expense equal to $0.05 per diluted share, related to the elimination of several executive positions during the quarter.

Demand for our IT staffing services remained solid during the fourth quarter when considering the normal year-end industry trends. Market conditions in healthcare staffing remained largely positive and we were able to achieve sequential revenue growth for the sixth consecutive quarter.

Kevin Horner, Mastech's Chief Executive Officer, stated, "We are pleased with the results that we delivered during the quarter and for the full year 2011. For the year, we organically grew our revenues and consultant-base by over 20%, increased profitability by approximately 67% and rationalized our management cost structure to better position us to continue to outperform our industry peers."

Commenting on the Company's financial position, Jack Cronin, Chief Financial Officer, stated, "Our balance sheet remains strong. We enter 2012 positioned with the financial flexibility to support our growth objectives and to capitalize on inorganic value creation opportunities. At December 31, 2011, cash on hand totaled $5.8 million; we had no outstanding debt; and have access to a credit facility with a maximum borrowing capacity of $19 million."

Third Quarter 2011 Results

• Revenues for the quarter were $23.5 million which represented a 24% increase over the corresponding quarter last year of $18.6 million
• Consolidated net income for the third quarter 2011 totaled $441,000 or $0.12 per diluted share, compared to $187,000 or $0.05 per diluted share, in the same period last year.

Despite a significant amount of economic uncertainty during the third quarter, our business activity levels remained stable.  Demand for our IT staffing services was higher than the previous quarter and our healthcare staffing business continued to achieve sequential revenue growth for the fifth consecutive quarter.

Kevin Horner, Chief Executive Officer of Mastech stated, "I'm pleased to report that during the quarter we grew total revenues by 6.2% sequentially and delivered an earnings per share performance that was $0.02 per diluted share better than second quarter 2011's results.  This solid performance reflects operating leverage opportunities in our cost structure and improvements in operating efficiencies, as selling, general and administrative expenses declined to 16.7% of revenues."

Commenting on the Company's financial position, Jack Cronin, Chief Financial Officer, stated, "Our balance sheet remains strong with $5.6 million of cash on hand and no outstanding debt. During the quarter we amended our credit facility with PNC Bank which was set to expire on October 15, 2011.  The amended facility increases our maximum borrowing capacity to $19 million and extends the term of the agreement through August 31, 2014."