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Mastech Q4 revenue edges up, net income falls

January 28, 2015

Pittsburgh-based IT staffing firm Mastech Holdings Inc. (NYSE MKT: MHH) reported fourth-quarter revenue edged up 0.2% year over year to $28.5 million.

Demand for the company’s staffing services continues to be robust but supply-side pressures are impacting both attrition levels and consultant compensation increases, according to the company. These pressures are impacting average assignment durations and having some adverse effect on gross margin.

Mastech reported fourth-quarter net income fell 18.6%.

Quote

"Despite strong performance in October and November, December proved to be an extremely challenging month in our fourth quarter,” said CEO Kevin Horner. “Weaker sales and recruiting activity levels, driven by the holiday season, combined with an abnormally high level of assignment ends, negatively impacted our billable consultant base. Historically we plan for a higher level of project ends at year-end. However, this year we faced a number of unexpected resignations and client hires, which reflects a tightening of supply in the marketplace."

Revenue

  Q4 2014 ($000s) Q4 2013 ($000s) % growth
Revenue $28,549 $28,483 0.2%

Gross margin

  Q4 2014  Q4 2013 
Gross margin 18.3% 19.1%

Net income

  Q4 2014 ($000s) Q4 2013 ($000s) % growth
Net income $782 $961 -18.6%

Full-year results

  2014 ($000s) 2013 ($000s) % growth
Revenue $113,523 $106,901 6.2%
Net income $3,423 $3,805 -10.0%

Share price and market cap

Shares in Mastech fell 6.58% in early afternoon trading today to $10.51. The company has a market cap of approximately $45.26 million, according to Yahoo!