Mastech Digital, Inc · AMEX:MHH
Mastech Digital — Mastech Holdings — Investor Presentation (June 2013)
25 slides from Mastech Digital's investor presentation, Jun 7, 2013
Slide 1: Q2 2013 Industry & MHH Overview
Q2 2013 Industry & MHH Overview CONFIDENTIAL Exhibit 99.1
Slide 2: Safe Harbor
Copyright ©2010 Mastech, Inc. All Rights Reserved. mastech.com 2 Safe Harbor... Certain statements contained in this presentation are forward-looking statements based on management’s expectations, estimates, projections and assumptions. Words such as “expects,” “anticipates,” “plans,” “believes,” “s
Slide 3: Mastech: A National Staffing Business
3 Service Offerings Employees/ Consultants History Business Description Core Values Mastech: A National Staffing Business e-Business Solutions; Service Oriented Architecture & Web Services Business Intelligence & Data Warehousing ERP / CRM Implementation Surgical Nursing & Physical / Occupational Th
Slide 4: MHH Shareholder Performance
MHH 2013 YTD: • 40% Increase To-Date • 12 Month Trailing P/E = 9.80 MHH – Shareholder Performance Pittsburgh Business Times, Largest Public Companies Jan 2013 Finance.Yahoo.com / MHH – June 4, 2013
Slide 5: IT Employment Index April 2013
<= mastech SSE mastech ine rion: neon IT Employment Index | April 2013 — 4,424,200 ve up 10,800 (up 0.24%) from March 2013 Mra derecish up 214,600 (up 5.10%) from April 2012 : 7 a od a Source: TechServe Alliance | 703.639.2050 | mww.techserveailiance.org
Slide 6: Pee
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Slide 7: IT Employment Hits Another All-time High in April
215K IT jobs created in the US in the past 12 months; 350K in the past 24 months 5.1% Y-O-Y Growth... 3X the Growth rate of the general workforce 17 th consecutive month of growth; former all time high eclipsed in Q1 2012 IT Employment Hits Another All-time High in April! • • •
Slide 8: IT Staffing: Industry Forecasted to Grow 8%
IT Staffing Industry Forecasted to Grow 8%
Slide 9: H/C Staffing: Industry Forecasted to Grow 9%
H/C Staffing Industry Forecasted to Grow 9%
Slide 10: Bottom Line: USA GDP Forecasted at 2%
Bottom Line....with USA GDP Forecasted @ 2%.... And Q1-2013 at 2.4%....
Slide 11: Two IT Staffing Industry Business Models
Branch Services Model Centralized Model Two IT Staffing Industry Business Models... • Geographic decentralized control & leadership; relationship sales model • Gross Margin: 24-30% • S, G & A (expenses) : 20-25% • Operating Margins: 4-8% • Customers drive Geography; majority of the organization cent
Slide 12: Professional Procurement Services Enter the Fray: VMS
Professional Procurement Services Enter the Fray... VMS ( vendor management system ) • 9 yr penetration – All Buyers : 8% to 60% • yr penetration- Core Buyers : 42% to 73% • Technology / Telecomm Industry: 75% in use; 21% planned use (96%) • All Large Scale (Fortune 1000): 75% or more in Use and nea
Slide 13: Bottom Line: Procurement Tools Have Changed the Staffing Industry
Bottom Line... Professional Procurement Processes & Tools have changed The Staffing Industry... • Create Transparency & Level the Playing Field... • Comparisons become easier • Price & Delivery Matters • Relationships less important • Exert Pressure on Gross Margins • Low Cost Players will be advant
Slide 14: Strong Balance Sheet / Access to Capital
Strong Balance Sheet / Access to Capital Returned $9.2 million to Shareholders in 2012 Q1-2012: Dutch Auction Tender Offer within Share Buyback Program Limits Q4-2012: $2 / Share Special Dividend MHH exceeds market growth rates 2010-2012 Revenue – 19% CAGR EPS – 89% CAGR Consultants On Billing – 18%
Slide 15: MHH: A Catalyst for Future Growth
Centralized Business Model; Scalable Cost Structure; Low- Cost Recruitment Engine Strong Brand Recognition with both U.S. Citizens and H1 B Visa Professionals Established Client- Base of High- Volume Consumers of Staffing Services Favorable Pricing / Value Proposition for Clients Motivated and Capab
Slide 16: Bottom Line: Macro Growing; Centralized Model; MHH Performing
Bottom Line....Macro Growing; Staffing Industry Changes Favor Centralized Model; MHH Performing
Slide 17: MHH Goals (not Guidance)
MHH Goals (not Guidance) • Organically Grow Revenues at +1.5X Industry Average.
Slide 18: MHH Goals (not Guidance)
MHH Goals (not Guidance) • Organically Grow Revenues at +1.5X Industry Average. • Maintain Gross Margins @ 19%.
Slide 19: MHH Goals (not Guidance)
MHH Goals (not Guidance) • Organically Grow Revenues at +1.5X Industry Average. • Maintain Gross Margins @ 19%. • Drive Operating Expenses to 13-14% of Revenue.
Slide 20: MHH Goals (not Guidance)
MHH Goals (not Guidance) • Organically Grow Revenues at +1.5X Industry Average. • Maintain Gross Margins @ 19%. • Drive Operating Expenses to 13-14% of Revenue.. • Deliver Operating Margins of 6%+ of Revenue.
Slide 21: MHH Goals (not Guidance)
MHH Goals (not Guidance) • Organically Grow Revenues at +1.5X Industry Average. • Maintain Gross Margins @ 19%. • Drive Operating Expenses to 13-14% of Revenue. • Deliver Operating Margins of +6% of Revenue. • Continue to Return Capital to our Shareholders.
Slide 22: Q2 2013 Industry & MHH Overview
Q2 2013 Industry & MHH Overview CONFIDENTIAL
Slide 23: Staffing Industry Analysts: Public Companies' IT Staffing Revenue Growth
mastech Mastech tne riont eo0ie = [TGrowen Upeste~ April 2, 2013 TAFFING NDUSTR' ANAL Trends in public companies’ IT staffing revenue growth + Ad@ee9 reported accelerating year-over-year revenue growth in 2432 in its North American IT staffing business, with revenue up 6% y/¥in 3042, and up 12% in 4
Slide 24: Staffing Industry Analysts: Public Companies' IT Staffing Revenue Growth
mastech Mastech tne riont 22008 = Frenent update ape 4, 2083 STAFFING INDUSTRY INALYSTS Trends in public companies’ IT staffing revenue growth + Kforce reported year-over-year growthiof 3% in its technology flex revenue in 3012, and 4% in 4Q12. Sequentially, tech flex revenue was relatively flat thr
Slide 25: Professional Procurement Services Enter the Fray: MSP
Professional Procurement Services Enter the Fray... (MSP / VMS) MSP ( managed service provider program ) • 5 yr penetration – All Buyers : 34% to 54% • yr penetration- Core Buyers : 48% to 58% • Technology / Telecomm Industry: 62% in use; 7% planned use (69%) • All Large Scale (Fortune 1000): 60% in