Mastech Digital, Inc

Greetings, and welcome to Mass Tech Digital, Inc.' 's fourth quarter 2021 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone requires operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce our host, Jennifer Ford Lacey, Manager of Legal Affairs for Mass Tech Digital, Inc. Thank you, Ms. Ford-Lacy. You may begin.

Thank you, Operator, and welcome to MassPIC Digital's fourth quarter 2021 conference call. If you have not yet received a copy of our earnings announcement, it can be obtained from our website at www.masspicdigital.com. With me on the call today are Vivek Gupta, MassPIC Digital's Chief Executive Officer, and Jack Cronin, our Chief Financial Officer. I would like to remind everyone that statements made during this call that are not historical facts are forward-looking statements. These forward-looking statements include our financial, growth, and liquidity projections, as well as statements about our plans, strategies, intentions, and beliefs concerning the business, cash flows, costs, and the markets in which we operate. Without limiting the foregoing, the words believe, anticipate, plan, expect, and similar expressions are intended to identify certain forward-looking statements. These statements are based on information currently available to us, and we assume no obligation to update these statements as circumstances change. There are risks and uncertainties that could cause actual events to differ materially from these forward-looking statements, including those listed in the company's 2020 Annual Report on Form 10-K, filed with the Securities and Exchange Commission, and available on its website at www.sec.gov. Additionally, management has elected to provide certain non-GAAP financial measures to supplement our financial results presented on a GAAP basis. Specifically, we will provide non-GAAP net income and non-GAAP diluted earnings per share, which we believe will provide greater transparency with respect to the key metrics used by management in operating the business. Reconciliations of these non-GAAP financial measures to their comparable GAAP measures are included in our earnings announcements, which can be obtained from our website at www.masstechdigitals.com. As a reminder, we will not be providing guidance during this call, nor will we provide guidance in any subsequent one-on-one meetings or calls. I will now turn the call over to Jack for a review of our fourth quarter and full year 2021 results.

Thanks, Jen, and good morning, everyone. I'm pleased to say that fourth quarter 2021 was a continuation of our strong financial performance. While we came up slightly short in exceeding our third quarter 2021 record results, we believe we're well positioned to continue our growth trajectory in 2022. A major assumption, of course, is that the global markets remain resilient to development around COVID-19. Addressing fourth quarter 2021 financial results, consolidated revenues totaled $59 million, representing an organic increase of 21% compared to $48.7 million in Q4 2020. This revenue performance was a half million dollars lower than our record revenues in Q3 2021, largely due to lower utilization reflective of seasonal holiday and vacation schedules in Q4. Our data and analytic services segment contributed revenues of $10.1 million Our second consecutive quarter where revenues exceeded the $10 million threshold and represented organic growth of 13% over last year's revenues. During Q4, we generated order bookings of $14.4 million in our data and analytics services segment, which included two significant multi-year, multi-million dollar assignments in the healthcare space. Both of these new orders were accepted in Q3, but didn't close until late Q4, which did impact our fourth quarter revenues. Additionally, pipeline opportunities continues to show promise as we enter 2022. In our IT staffing services segment, Revenues of $49 million essentially matched our record revenues in Q3 2021 and represented a year-over-year increase of 23%. Activity levels remained elevated in Q4 despite seasonal holiday and vacation disruptions, as well as normal high levels of December assignment end. Gross profits in the fourth quarter of 2021 totaled $15.7 million compared to $13.1 million in the fourth quarter of 2020, an increase of 20%. Gross margins as a percent of revenue in Q4 2021 was 26.6% compared to 26.8% in the 2020 fourth quarter. This slight margin variance was primarily the result of Q4 2021 having fewer business days in December than Q4 2020 due to the timing of December holiday. Gap net income for the fourth quarter of 2001 was $3.9 million or 32 cents per diluted share compared to $2 million or 17 cents per diluted share in Q4 2020. Non-GAAP net income for the fourth quarter of 2021 was $4 million or 34 cents per diluted share compared to $3.4 million or 29 cents per diluted share in the fourth quarter of 2020. SG&A expense items not included in non-GAAP financial measures, net of tax benefits, or detailed in our fourth quarter 2021 earnings release, which is available on our website.