Dynamics Research Corporation Completes Acquisition of Kadix Systems
11 Agosto 2008 - 12:09PM
PR Newswire (US)
Revenue Base of More Than $40 Million Strengthens DRC's Position in
Growth Markets ANDOVER, Mass., Aug. 11 /PRNewswire-FirstCall/ --
Dynamics Research Corporation (NASDAQ:DRCO), a leading provider of
innovative engineering, technology and information technology
services and solutions to federal and state governments, today
announced it has completed the acquisition of Kadix Systems, LLC,
effective August 1, 2008. As previously reported, the purchase
price of Kadix Systems by DRC was $42 million with the potential
for additional consideration of up to $5 million, based on the
achievement of certain conditions. For tax purposes, the
transaction will be treated as an asset purchase resulting in tax
benefits to DRC, which have an estimated value of $10 million.
Kadix, a rapidly growing, high-end management consulting firm,
maintains practice specialties in organizational change, human
capital, information technology and public and learning and
organizational development and is focused on the U.S. Department of
Homeland Security (DHS), Marine Corps information technology,
military medical health, and federal civilian markets. Kadix is
currently providing services, which generate more than $20 million
of revenue annually through task orders under the DHS Enterprise
Acquisition Gateway for Leading Edge Solutions (EAGLE) contract
(functional area 5 - Program Management and functional area 3 -
Independent Verification & Validation Services) and DHS Program
Management Strategic Sourcing (PMSS) contract. New task orders
received in 2008 include a five-year $22 million order, providing
IT strategic planning for the ICE Strategic Development Division at
DHS and a $9.9 million, four-year order providing financial systems
services to the Transportation Security Administration. "Kadix
Systems' customer presence significantly increases the percentage
of our business mix focused on high-growth markets, a key strategic
focus for DRC. In addition, Kadix high-end services carry strong
margins, facilitating margin expansion," said Jim Regan, DRC's
chairman and chief executive officer. Kadix had annual revenues and
earnings before interest, taxes, depreciation and amortization
(EBITDA) of $23.0 million and $3.8 million, respectively, for the
year ended December 31, 2007. Revenue reported on an unaudited
basis was $33.6 million for the twelve months ended June 30, 2008.
Revenue for the three months ended June 30, 2008, March 31, 2008
and December 31, 2007 was $11.6 million, $9.0 million and $6.8
million, respectively, and revenue for the two months ended
September 30, 2007 was $4.2 million. With rapid expansion in the
past six months, the annualized Kadix revenue base is currently in
excess of $40 million, with an estimated EBITDA margin of 15
percent and approximately 40 percent of the current estimated
annualized revenue base to be recognized in the last five months of
2008. More than 90 percent of its work is derived from prime
contracts. Employment has expanded from 207 at December 31, 2007 to
approximately 270 employees at July 31, 2008. Kadix funded backlog
at June 30, 2008 was $26.0 million. With the addition of Kadix, DRC
currently has 109 bids awaiting award with an estimated contract
value of $233 million. The inclusion of Kadix in DRC's operating
results for the last five months of 2008 is anticipated to
contribute $0.02 to $0.03 to earnings, after taking into account an
estimated $2.2 million of interest, taxes, depreciation and
amortization related to the Kadix acquisition for the five-month
period. The financial benefits of the acquisition are expected to
be more fully realized in 2009 from the inclusion in DRC results of
a full year of Kadix operations with incremental contributions of
more than $24 million in revenue and earnings of at least $0.12 per
diluted share. About Dynamics Research Corporation Dynamics
Research Corporation (DRC) is a leading provider of
mission-critical technology management services and solutions for
government programs. DRC offers forward-thinking solutions backed
by a history of excellence and customer satisfaction. Founded in
1955, DRC is a publicly held corporation (NASDAQ:DRCO) and
maintains more than 25 offices nationwide with major offices in
Andover, Massachusetts; Reston, Virginia; and Fairborn, Ohio. For
more information please visit our website at http://www.drc.com/.
Forward-Looking Disclaimer Safe harbor statements under the Private
Securities Litigation Reform Act of 1995: Some statements contained
or implied in this news release, may be considered forward-looking
statements, which by their nature are uncertain. Consequently,
actual results could materially differ. For more detailed
information concerning how risks and uncertainties could affect the
company's financial results, please refer to DRC's most recent
filings with the SEC. The company assumes no obligation to update
any forward-looking information. CONTACTS: Investors: Dave Keleher
Media: Duyen "Jen" Truong SVP and Chief Financial Officer Sage
Communications (for DRC) 978.289.1615 703.584.5645 DATASOURCE:
Dynamics Research Corporation CONTACT: Investors, Dave Keleher of
Dynamics Research Corporation, SVP and Chief Financial Officer,
+1-978-289-1615, ; or Media, Duyen "Jen" Truong of Sage
Communications for Dynamics Research Corporation, +1-703-584-5645,
Web site: http://www.drc.com/
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