Mastech Digital, Inc (NYSE:MHH)

Mastech Digital Inc  (NYSE:MHH) ($15.49; $182.0M market cap), a leading provider of digital transformation IT, announced new deals worth $23 million for the month of December. 

 "Considering that Mastech InfoTrellis delivered annual revenues of $24 million just a year ago, these large orders are a testament to the yeoman efforts from Paul Burton and his team during 2019.  With significant enhancements to our service offerings, a vastly improved backlog of work on hand and a robust pipeline driven by an energized sales engine, the future looks very promising for our data and analytics business." 

The new orders come on the heels of the company just posting strong Q4 2019 results on February 5, 2020. 

Mastech Digital, Inc (NYSE:MHH) (Staffing & IT Services) reported non-GAAP EPS of $0.26 vs. $0.16 in the prior year on 13% topline growth, beating both top and bottom line analyst estimates for the quarter.  A bullish conference call indicated strong momentum in 2019 should carry over into 2020 with a focus on improving operational efficiencies, which should help improve the bottom line.  We will watch closely for sharp pullbacks as possible re-entry points.

GeoBargain Mastech Digital Inc (NYSE: MHH) ($13.16; $71.8M market cap) is a leading provider of digital transformation IT services announced Q1 2018 results:

• Sales of $43.3 million vs $33.1 million in the prior year

• Non-GAAP EPS of $0.36 vs $0.09 in the prior year

Quotes from management:

Activity levels at the Company's data and analytics services segment continued at elevated levels, as revenues for the first quarter 2018 increased by 28% as compared to the fourth quarter of 2017. Demand for the Company's IT staffing services remained robust during the quarter and our billable consultant-base expanded by 30 consultants during the quarter. Additionally, gross margins in the IT staffing services segment increased by 120 basis points in the 2018 quarter, when compared to the same period last year.

"I am pleased with the way we have started the year," commented Vivek Gupta, President and CEO, Mastech Digital. "Our data and analytics segment, in particular, has performed well, backed by increased customer demand. This is the second consecutive quarter where we are seeing a sequential revenue growth of nearly 30% in this unit. We kicked off several exciting project-based engagements during the quarter and our pipeline continues to remain healthy.

On February 8, 2018 we stated we had re-established a long position based on strong Q4 2017 results and bullish outlook when the stock was trading at ~$10.36.  We also added MHH to our favorite stockscreen on March 7, 2018 when the stock was trading at $11.90.

MHH ($7.88) reported Q3 2016results:

• Sales of $34.3 million vs $34.6 million in the prior year period

• Non-GAAP EPS of $0.25 vs $0.25 in the prior year

Quotes from management:

“we rebranded the Company, which included our name change to Mastech Digital, a new logo and the launch of a refreshed corporate website - all reflective of our ongoing transformation into a digital technologies company.  As our digital services gain further traction over the next several quarters, we expect that the pace at which we grow our business will accelerate as well."

MHH ($6.41) reported Q2 2016 results:

• Sales of $33.6 million vs $29.3 million in the prior year

• Non-GAAP EPS of $0.25 vs $0.18 in the prior year

Comments from management:

"We were able to organically grow our consultant-base during the quarter by 7%; our gross margins improved nicely from a quarter ago; and we completed a number of personnel moves aimed at strengthening our leadership capabilities and improving our operational effectiveness. Additionally, we have begun our journey of re-positioning Mastech to capitalize on opportunities in the vast area of digital technologies."

PITTSBURGH, June 16, 2015 /PRNewswire/ -- Mastech Holdings, Inc. (NYSE MKT: MHH), a national provider of Information Technology staffing services, announced today the completion of its previously announced agreement to acquire Hudson Global's U.S. IT staffing business.  The planned acquisition was announced on May 11, 2015, subject to customary closing conditions.

As previously disclosed, the financial terms of the acquisition included a $17 million cash purchase price paid at closing, with the seller retaining working capital. The cash purchase price was paid with a combination of cash balances on hand and borrowings under the Company's existing credit facility. Mastech expects the transaction to be immediately accretive to earnings. 

Commenting on the acquisition, Kevin Horner, Mastech's Chief Executive Officer, stated, "After several months of working towards a successful closing with the Hudson IT team , I am more excited than ever about the long-term potential of our combined company.  Given Hudson's impressive stable of direct retail clients and talented sales and recruitment team, I'm confident that this transaction will prove to be a rewarding experience for our shareholders, our collective clients and our employees as well."

Raptor Partners LLC acted as Company's financial advisor on the transaction and Pepper Hamilton LLP acted as its legal advisor.

PITTSBURGH, May 11, 2015 /PRNewswire/ -- Mastech Holdings, Inc. (NYSE MKT: MHH), a national provider of Information Technology staffing services, announced today that its wholly-owned subsidiary, Mastech, Inc. has entered into a definitive asset purchase agreement to acquire Hudson Global's U.S. IT staffing business.  The transaction is subject to customary closing conditions and expected to close in the second quarter of 2015.

The financial terms of the agreement include a $17 million cash purchase price paid at closing, with the seller retaining working capital. The cash purchase price will be paid with a combination of cash balances on hand and borrowings under the Company's existing credit facility. Mastech expects the transaction to be immediately accretive to earnings.  

Commenting on the planned acquisition, Kevin Horner, Mastech's Chief Executive Officer, stated, "I'm extremely excited about this opportunity, which will materially increase our scale and enhance our abilities to service our collective clients.  As I have mentioned on numerous occasions, a selective acquisition is an important component of our long-term growth strategy.  With its impressive list of direct retail clients, domestic recruitment focus and adept management talent, Hudson's U.S. IT Staffing business is a compelling fit for Mastech, and I believe it will serve to strengthen our overall business model."

Raptor Partners LLC acted as Company's financial advisor on the transaction and Pepper Hamilton LLP acted as its legal advisor

First Quarter 2015 Results

• Revenues totaled $27.1 million compared to $28.7 million in the 2014 first quarter;
• EPS of $0.09 (excluding severance costs) versus $0.20 per diluted share in the 2014 first quarter

Comments on the Proposed Acquisition of Hudson Global's U.S IT Staffing Business:

Earlier today, Mastech announced that it signed a definitive asset purchase agreement to acquire Hudson Global's U.S. IT staffing business. Commenting on the proposed acquisition, Kevin Horner stated, "This acquisition will provide Mastech with an impressive list of direct retail client relationships. We plan to maintain this relationship-focused business and all of its sales and recruiting staff. Additionally, we believe that there will be opportunities to leverage the advantages of Mastech's high-volume, low cost recruiting engine to enhance client value. I am very excited about this opportunity, which is expected to be immediately accretive to earnings and is estimated to increase Mastech's revenue run-rate by close to 30 percent." Subject to the completion of customary closing conditions, the acquisition is expected to close in the second quarter of 2015.

Fourth Quarter 2014 Results

• Revenues from continuing operations for the fourth quarter of 2014 totaled $28.5 million vs $28.4 million in the corresponding quarter last year.
• Consolidated net income from continuing operations for the fourth quarter 2014 totaled $782,000 or $0.18 per diluted share, compared to $961,000 or $0.22 per diluted share, during the same period last year.

While demand for the Company's staffing services continues to be robust, supply-side pressures are impacting both attrition levels and consultant compensation increases. These pressures are impacting average assignment durations and are having some adverse effect on gross margins. Gross margins from continuing operations in the fourth quarter of 2014 were 18.3%, which was in-line with third quarter 2014's performance, but below our gross margins reported a year earlier.

Commenting on the Company's fourth quarter 2014 performance, Kevin Horner, Mastech's Chief Executive Officer stated, "Despite strong performance in October and November, December proved to be an extremely challenging month in our fourth quarter. 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. During the quarter, we tweaked our offshore leadership which will enhance the Company's prospects for future growth. Our expectations for 2015 are to achieve growth levels in excess of our industry average and to continue to invest in our business organically and by acquisition should an attractive opportunity arise."

Third Quarter 2014 Results

• Revenues from continuing operations for the third quarter of 2014 totaled $28.6 million vs $28.2 million in the prior year period.
• Consolidated net income from continuing operations for the third quarter 2014 totaled $879,000 or $0.20 per diluted share, which was in-line with last quarter's performance and compared to $999,000 or $0.23 per diluted share during the same period last year.

Demand for our IT staffing services remained in-line with activity levels of a quarter ago. Our ratio of new assignment wins-to-activity levels improved during the recent quarter and, accordingly, we were able to increase our billable consultant-base by approximately 4-percent. Gross margins in the third quarter of 2014 were 18.3% compared to 18.9% reported a year earlier. Compensation increases in excess of bill rate increases and slightly lower margins on new assignments in our wholesale channel impacted overall margins during the quarter.

Kevin Horner, Mastech's Chief Executive Officer stated, "I'm pleased to report that we have essentially recovered all of our billable consultant headcount that was lost in the surprise project termination during the previous quarter. As I communicated in our last earnings call, third quarter's revenue and gross profit performance would be impacted by this unexpected project termination. As a result of this recovery, we were able to achieve 4% sequential growth in both revenues and billable consultants during the third quarter. Additionally, we continued to invest for growth during the quarter by ramping-up the production side of our business with the aggressive hiring of recruitment resources at both of our facilities in India and sales staff in the U.S. While these hires constrained our bottom-line results in the third quarter, they will allow us to better service the demand side of our business going forward."

Second Quarter 2014 Results

• Revenues from continuing operations for the second quarter of 2014 totaled $27.7 million, which represented a 6% increase over the corresponding quarter last year.
• Consolidated net income from continuing operations for the second quarter 2014 totaled $893,000 or $0.20 per diluted share, compared to $765,000 or $0.18 per diluted share, during the same period last year.

Kevin Horner, Mastech's Chief Executive Officer stated, "We are disappointed with our performance in the second quarter when compared to our historical trend lines. The challenges that we faced in second quarter plainly illustrate a pressing need to accelerate the scale of our recruitment engine. With demand likely to remain at healthy levels during the second half of the year, we will look to aggressively ramp-up our off-shore recruiter hiring."

Commenting on the Company's financial position, Jack Cronin, Chief Financial Officer, stated, "Our financial position at June 30, 2014 remains strong, with no short-term borrowings outstanding and cash balances on hand of $1.2 million. During the quarter, our Days Sales Outstanding ("DSO") measurement improved by 6-days from last quarter and now stands at 50-days. In July, we expanded and extended for three years our credit facility with PNC Bank, which will continue to provide us the financial flexibility to capitalize on future market opportunities."

First Quarter 2014 Results

• First quarter 2014 revenues of $28.7 million compared to $24.0 million in the prior year.
• First quarter 2014 EPS of $0.20 compared to $0.13 in the prior year period.

Kevin Horner, Mastech's Chief Executive Officer stated, "We are pleased to deliver strong year-over-year financial results in our traditionally challenging first quarter, as we were able to increase our billable consultant-base by approximately 3%.  Operationally, we continue to strive for productivity gains in both our sales and recruitment organizations."

Commenting on the Company's financial position, Jack Cronin, Chief Financial Officer, stated, "Our financial position at March 31, 2014 remains strong, with short-term borrowings, net of cash balances on hand, of $1.1 million and over $15 million of available borrowing capacity under our existing credit facility.  During the quarter we invested $2.6 million in operating working capital.  This level of investment was in part due to an up-tick in our Days Sales Outstanding measurement during the quarter related to billing process changes at a major client.  We are confident that DSO's will revert back to more normal levels in the second quarter of 2014."  

Fourth Quarter 2013 Results

• Revenues from continuing operations for the fourth quarter of 2013 totaled $28.5 million and represented a 21% increase over the corresponding quarter last year.
• Consolidated net income from continuing operations for the fourth quarter 2013 totaled $961,000 or $0.22 per diluted share, compared to $744,000 or $0.18 per diluted share, during the same period last year. The earnings per share numbers for both periods have been adjusted to reflect the Company's November 2013 five-for-four stock split.
• Non-GAAP EPS for the fourth quarter 2013 were $0.26 vs $0.18 in the prior year period.

Demand for the Company's staffing services was solid during the fourth quarter, despite some activity disruptions due to the holiday season. Accordingly, the Company was able to grow its billable consultant-base for the 4th consecutive quarter and nine of the last ten quarters. Gross margins from continuing operations in the fourth quarter of 2013 were 19.1%, in-line with gross margins reported a year earlier.

Commenting on the Company's fourth quarter 2013 performance, Kevin Horner, Mastech's Chief Executive Officer stated, "We are pleased to deliver financial results that included strong revenue growth, the continued expansion of our billable consultant-base and increases in operating profits. While income from operations grew at a respectable 23% in the fourth quarter of 2013 from a year earlier, these results included additional operating expenses related to the early vesting of equity shares via the attainment of performance targets and the decision to institute a year-end 'appreciation bonus' for our tenured employees, linked to and paid on the same day as we paid the $0.50 per share cash dividend to our shareholders. These incremental increases in operating expense during the quarter totaled $257,000 and impacted earnings by $0.04 per diluted share."

PITTSBURGH, Oct. 30, 2013 /PRNewswire/ -- Mastech Holdings, Inc. (NYSE MKT: MHH), a national provider of Information Technology staffing services, announced today that its Board of Directors has approved a five-for-four (25 percent) stock split and declared a special cash dividend of $0.50 per post-split share of common stock.  The record date for the stock split is November 15, 2013.  Shareholders of record as of such date will receive one new share of common stock for every four shares that they own. The distribution of the new shares will be made on November 29, 2013. The cash dividend will be paid on December 20, 2013 to shareholders of record at the close of December 9, 2013.

As a result of the Board's review of the Company's current financial position, business outlook, and share trading patterns, the Board determined that both a stock split and the payment of a special dividend are in the best interest of the Company and its shareholders.

Commenting on the Board's decision to approve the stock split and declare this special dividend, Kevin Horner, Mastech's Chief Executive Officer stated, "These actions reflect our confidence about the future, the recent divestiture of the healthcare business and our commitment to return capital to our shareholders, as appropriate."

Alert sent to members on 10/23/2013

GeoBargain MHH provides information technology (IT) and specialized healthcare staffing services primarily in the United States.  Shares are healthily up in early trading. Today, the company reported strong third quarter 2013 results, including record EPS of $0.29.

• Revenues for the third quarter of 2013 totaled $28.3 million, which represented a 24% increase over the corresponding quarter last year and an 8% improvement over second quarter 2013 results.

• Consolidated net income from continuing operations for the third quarter 2013 totaled $999,000 or $0.29 per diluted share, compared to $561,000 or $0.17 per diluted share, during the same period last year.

MHH’s gross margins saw a slight decline in the third quarter 2013, but the company was able to grow EPS at a higher rate than revenue, based on the company’s operating leverage.  MHH was able to keep its SG&A at nearly the same level as last year even though revenues were 24% higher.

We highlighted the company’s ability to get more from less in our 1/23/2013 article “Mastech Holdings (MHH) GeoNugget: A Unique Value + Growth Proposition.”  The stock was trading at $6.67 at the time of our article -  gains of 80% at current prices.

In our 7/24/2013 email, when we highlghted MHH’s second quarter 2013 results, we stated that although MHH only had one more “easy” year-over-year quarterly EPS comparison left in 2013, we felt that when investors looked to value MHH, they would focus on the longer term outlook of the company - growing revenues at a rate of 1.5x the industry average of 9% and the continued shareholder friendly initiatives that it has undertaken.  We stated we think that the stock is worth $20.00 when applying a P/E of 25 on trailing EPS of $0.80.  However, broad valuation multiple expansion for microcap stocks has been a challenge over the last three years.  Thus, a more realistic valuation would be to assign a P/E of 15 on trailing EPS, which would translate to a price target to $12.00.  

While MHH shares have already reached our more conservative price target of $12.00 based on a P/E of 15 on trailing twelve month(TTM) EPS of $0.80, MHH’s trailing EPS is now $0.92 giving us a near term price target of 13.80.   In order for us to apply a price target on future earnings we will need to interview managment again.  Our more aggressive target of $20.00 is now raised to $23.00 based on a multiple of 25 on TTM EPS.  

Another valuation metric we used when trying to value shares of MHH was Price-to-Sales.  In our article we mentioned that MHH was trading at a Price-to-Sales multiple of 0.21, considerably less than its closest competitor Igate Corporation (NASDAQ:IGTE), which was trading at 0.88 at that time.   This valuation metric comparison is still favorable as MHH is trading at a Price-to-Sales ratio of around 0.4, while IGTE is trading at a price to sales multiple of 1.6.

We believe the staffing sector could get hot based on the possible benefit from Obamacare.  Please see an article from Time magazine titled “Why Temp Agencies Are Learning to Love the Affordable Care Act” for more details.   We will begin to research other companies that may be poised to  benefit as the staffing sector continues to heat up.

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Third Quarter 2013 Results

• Revenues from continuing operations for the third quarter of 2013 totaled $28.3 million, which represented a 24% increase over the corresponding quarter last year and an 8% improvement over second quarter 2013 results.
• Consolidated net income from continuing operations for the third quarter 2013 totaled $999,000 or $0.29 per diluted share, compared to $561,000 or $0.17 per diluted share, during the same period last year.

Kevin Horner, Mastech's Chief Executive Officer stated, "We are pleased to deliver financial results that include record earnings for the quarter, strong revenue growth and the expansion of our billable consultant-base. These impressive financial achievements reflect our continued commitment to drive operational efficiencies and enhance our value proposition to the clients that we serve. Also during the quarter we completed the sale of our healthcare business which generated a net gain of $442,000 for the Company and more importantly allows us to focus squarely on our core competency – Information Technology Staffing Services."

Commenting on the Company's financial position, Jack Cronin, Chief Financial Officer, stated, "Our financial position at September 30, 2013 remains strong, with cash on hand of $1.6 million and over $15 million of available borrowing capacity under our existing credit facility. During the quarter we repaid all outstanding bank debt with funds generated from continuing operations and from the sale of our healthcare business. Our debt-free balance sheet and access to sufficient capital gives us the flexibility to capitalize on future value-creation opportunities."

PITTSBURGH, July 31, 2013 /PRNewswire/ -- Mastech Holdings, Inc. (NYSE MKT: MHH), a national provider of Information Technology and Specialized Healthcare staffing services, announced today that it has entered into a definitive asset purchase agreement with Accountable Healthcare Staffing, Inc. to sell substantially all of the assets of its Healthcare Staffing segment. The closing is subject to customary closing conditions and is expected to occur during the third quarter of 2013.

Under the terms of the agreement, which has been unanimously approved by Mastech's Board of Directors, total consideration to be paid by the buyer totals $1.15 million.  Consideration consists of approximately $1.0 million of cash at closing, plus the assumption of certain liabilities.  Total assets to be sold exclude cash balances on hand, accounts receivables, and other current assets, which approximated $1.5 million as of June 30, 2013, net of current liabilities retained by the Company.

Commenting on the agreement, D. Kevin Horner, Mastech's Chief Executive Officer stated, "This divestiture will allow Mastech to focus entirely on its core IT Staffing business. Given Accountable Healthcare's highly regarded reputation in and commitment to the healthcare staffing market, we are excited about the opportunities that the transaction presents to our dedicated healthcare professionals.  I'm convinced that this is a great next step for all stakeholders – customers, employees and shareholders – of both organizations."

Accountable Healthcare Staffing Chairman and CEO, Robert Adamson commented, "The acquisition of Mastech Holdings' healthcare units adds a team with deep industry experience to Accountable and will accelerate our growth in both the travel nurse and per diem segments of our business."

Second Quarter 2013 Results

• Revenues for the second quarter of 2013 totaled $28.9 million, which represented a 14% increase over the corresponding quarter last year and a 7% improvement over first quarter 2013 results.
• Gross profit in the second quarter of 2013 was $5.5 million compared to $4.8 million in the second quarter of 2012.
• Consolidated net income for the second quarter 2013 totaled $789,000 or $0.23 per diluted share, compared to $458,000 or $0.14 per diluted share, during the same period last year.

Demand for our IT staffing services was solid in the current quarter and largely in-line with activity levels of a quarter ago. Market conditions in the healthcare staffing business were steady; however, higher than expected assignment ends in our travel nursing business negatively impacted revenues during the quarter. Gross margins in the second quarter of 2013 were 18.9%, which were slightly below gross margins of 19.1% reported a year earlier, but represented an improvement over first quarter 2013 gross margins of 18.1%.

Kevin Horner, Mastech's Chief Executive Officer stated, "We are pleased to deliver another quarter of both operational progress and sequential improvement to our financial results. During the quarter, we were able to increase our IT billable consultant-base by 9% and sequentially grew revenues by 7% despite some headwinds in our travel nursing business. Operationally, we are now generating a return on our focused investments made to our recruiting organization. Commercially, we are beginning to see gross margin expansion as our sales organization takes a more disciplined approach in securing new assignments."

Commenting on the Company's financial position, Jack Cronin, Chief Financial Officer, stated, "Our financial position at June 30, 2013 remains strong, with over $14 million of available borrowing capacity under our existing credit facility. During the quarter we continued to invest in operating working capital to support revenue growth. At June 30, 2013 our "Days Sales Outstanding" measurement stood at 52 days, which is an indication of our high-quality accounts receivables and predictable cash conversion metrics."

First Quarter 2013 Results

• Revenues for the first quarter of 2013 totaled $27.0 million, which represented a 10% increase over the corresponding quarter last year and a 2% improvement over fourth quarter 2012 results.
• Consolidated net income for the first quarter 2013 totaled $575,000 or $0.17 per diluted share, compared to $352,000 or $0.10 per diluted share, during the same period last year. It is important to note that the 2013 quarter had one less billable day than last year's corresponding quarter.

Demand for our IT staffing services was solid for much of the quarter. Market conditions in the healthcare staffing business were generally steady and we were able to achieve sequential revenue growth for the eleventh consecutive quarter. Overall gross margins in the first quarter of 2013 were 18.1%, which were slightly below gross margins of 18.2% reported a year earlier.

Kevin Horner , Mastech's Chief Executive Officer stated, "We are pleased with our operational performance and the financial results that we delivered in our historically challenging first quarter. We were able to increase our IT billable consultant-base during the quarter by over 4% and grew revenues in our healthcare segment despite seasonal headwinds in our surgical nursing business. Operationally, we continued to see improvements in our recruitment performance metrics and believe that these favorable trends will translate into elevated levels of client satisfaction."

Commenting on the Company's financial position, Jack Cronin , Chief Financial Officer, stated, "Our financial position at March 31, 2013 remains strong, with short-term borrowings, net of cash balances on hand, essentially unchanged from our year-end 2012 position of $2.0 million. Additionally, we had approximately $13.2 million of available borrowing capacity under our existing credit facility with PNC Bank. During the quarter, cash generated from operations was sufficient to fund our continued investment in operating working capital and the other cash needs of our business.

Fourth Quarter 2012 Results

• Revenues for the fourth quarter of 2012 totaled $26.4 million, which represented a 11% increase over the corresponding quarter last year and a 3% improvement over third quarter 2012 results.
• Consolidated net income for the fourth quarter 2012 totaled $728,000 or $0.22 per diluted share, compared to $253,000 or $0.07 per diluted share, during the same period last year. Results in the 2011 fourth quarter included severance charges equal to $0.05 per diluted share.
  

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."

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.

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."