DRC Reports Second Quarter 2010 Results
28 Julho 2010 - 9:59PM
Dynamics Research Corporation (Nasdaq:DRCO), a leading provider of
innovative management consulting, engineering, technical and
information technology services and solutions to federal and state
governments, today announced operating results for the second
quarter ended June 30, 2010.
Financial Results
The Company reported income from continuing operations for the
second quarter of 2010 of $2.6 million, or $0.26 per diluted share,
up 18.6 percent from $2.2 million, or $0.22 per diluted share, for
the second quarter of 2009. Revenue for the second quarter of
2010 was $65.3 million compared with $68.1 million for the same
period in 2009. Excluding the expiration of restricted 8(a)
contracts assumed with the Kadix acquisition in 2008, second
quarter 2010 revenue for the Federal business was down 0.8%
compared with the same period a year ago.
For the six month period ended June 30, 2010 income from
continuing operations was $5.3 million, or $0.53 per diluted share,
compared with $4.1 million, or $0.42 per diluted share, for the
same period in 2009. For the six months ended June 30, 2010
revenue was $133.9 million compared with $135.3 million for the
same period in 2009. Excluding the expiration of restricted
8(a) contracts assumed with the Kadix acquisition in 2008, revenue
for the Federal business during the six month period rose 3.4%
compared with the same period a year ago.
Business Highlights
"We remain well positioned in growth sectors of the Federal
market and are aggressively pursuing new business in these target
markets, as evidenced by $63 million in new business contract
awards for the first half of the year and $377 million in submitted
new business bids awaiting award – a record for DRC. Although
top line growth is lower than we had anticipated primarily due to
insourcing and a delay in contract awards, the prospects for
accelerated revenue growth are strong. We also are pleased
with the nearly one-and-a-half points of operating margin expansion
reported this quarter versus a year ago," said Jim Regan, DRC's
chairman and chief executive officer. "We continued to
generate solid positive cash flow, as our federal business
receivables days outstanding dropped to 65, down another three days
from the first quarter of 2010."
In other matters the Company reported the sale of the
Metrigraphics unit effective July 19, 2010, which was classified as
a discontinued operation for financial reporting purposes as of
December 31, 2009. The financial effect of the sale is
reflected in second quarter 2010 operating results.
Also, the Company noted that an agreement in principle had been
reached regarding an outstanding Fair Labor Standards Act claim,
the effect of which was accrued on the Company's June 30, 2010
balance sheet.
Company Guidance
The Company's estimate for revenue for 2010 is in the range of
$271 to $278 million. Regarding earnings from continuing
operations for 2010, the Company anticipates results to be in the
range of $1.18 to $1.24 per diluted share. For the third
quarter of 2010 the Company anticipates revenue in the range of $67
to $69 million and earnings from continuing operations per diluted
share of $0.27 to $0.30.
Conference Call
The Company will conduct a second quarter 2010 conference call
tomorrow, July 29, 2010 at 10:00 a.m. ET. The call will be
available via telephone at (877) 303-4382 and accessible via Web
cast at www.drc.com. Recorded replays of the conference call
will be available on Dynamics Research Corporation's investor
relations home page at www.drc.com and by telephone at (800)
642-1687, passcode #87022919, beginning at 1:00 p.m. ET on July 29,
2010.
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 the capabilities of a large
company and the responsiveness of a small company, 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 and the Washington, D.C. area. For more
information please visit our website at www.drc.com.
Safe Harbor
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.
ATTACHMENT I |
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DYNAMICS RESEARCH
CORPORATION |
CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS (unaudited) |
(in thousands, except
share and per share data) |
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|
|
|
Three Months
Ended June 30, |
|
2010 |
2009 |
Revenue |
$ 65,308 |
$ 68,128 |
Cost of revenue |
55,111 |
57,015 |
Gross profit |
10,197 |
11,113 |
|
|
|
Selling, general and administrative
expenses |
5,080 |
6,211 |
Amortization of intangible assets |
386 |
972 |
Operating income |
4,731 |
3,930 |
Interest expense, net |
(367) |
(477) |
Other income (expense), net |
(30) |
282 |
Income from continuing operations before
provision for income taxes |
4,334 |
3,735 |
Provision for income taxes |
1,755 |
1,561 |
Income from continuing operations |
2,579 |
2,174 |
Effect of discontinued operations, net of
tax |
173 |
(124) |
Net income |
$ 2,752 |
$ 2,050 |
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|
|
Earnings per share (1) |
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|
Basic |
|
|
Income from continuing operations |
$ 0.26 |
$ 0.23 |
Effect of discontinued operations, net of
tax |
0.02 |
(0.01) |
Net income |
$ 0.28 |
$ 0.21 |
Diluted |
|
|
Income from continuing operations |
$ 0.26 |
$ 0.22 |
Effect of discontinued operations, net of
tax |
0.02 |
(0.01) |
Net income |
$ 0.27 |
$ 0.21 |
|
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|
Weighted average shares outstanding |
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Basic |
9,896,738 |
9,610,428 |
Diluted |
10,070,809 |
9,729,721 |
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(1) Totals may not add due to rounding |
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ATTACHMENT II |
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DYNAMICS RESEARCH
CORPORATION |
CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS (unaudited) |
(in thousands, except
share and per share data) |
|
|
|
|
|
|
Six Months
Ended June 30, |
|
2010 |
2009 |
Revenue |
$ 133,892 |
$ 135,331 |
Cost of revenue |
112,938 |
112,958 |
Gross profit |
20,954 |
22,373 |
|
|
|
Selling, general and administrative
expenses |
11,036 |
12,522 |
Amortization of intangible assets |
771 |
1,945 |
Operating income |
9,147 |
7,906 |
Interest expense, net |
(743) |
(1,096) |
Other income, net |
83 |
321 |
Income from continuing operations before
provision for income taxes |
8,487 |
7,131 |
Provision for income taxes |
3,171 |
3,000 |
Income from continuing operations |
5,316 |
4,131 |
Effect of discontinued operations, net of
tax |
305 |
(310) |
Net income |
$ 5,621 |
$ 3,821 |
|
|
|
Earnings per share |
|
|
Basic |
|
|
Income from continuing operations |
$ 0.54 |
$ 0.43 |
Effect of discontinued operations, net of
tax |
0.03 |
(0.03) |
Net income |
$ 0.57 |
$ 0.40 |
Diluted |
|
|
Income from continuing operations |
$ 0.53 |
$ 0.42 |
Effect of discontinued operations, net of
tax |
0.03 |
(0.03) |
Net income |
$ 0.56 |
$ 0.39 |
|
|
|
Weighted average shares outstanding |
|
|
Basic |
9,858,538 |
9,611,783 |
Diluted |
10,042,916 |
9,727,387 |
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ATTACHMENT III |
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DYNAMICS RESEARCH
CORPORATION |
CONDENSED CONSOLIDATED
BALANCE SHEETS (unaudited) |
(in
thousands) |
|
|
|
|
|
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|
June 30, 2010 |
December 31,
2009 |
Assets |
|
|
Current assets |
|
|
Cash and cash equivalents |
$ 7,411 |
$ 55 |
Contract receivables, net |
61,928 |
72,569 |
Prepaid expenses and other current
assets |
5,104 |
5,702 |
Discontinued operations |
2,026 |
2,058 |
Total current assets |
76,469 |
80,384 |
Noncurrent assets |
|
|
Property and equipment, net |
13,053 |
13,915 |
Goodwill |
97,641 |
97,641 |
Intangible assets, net |
3,303 |
4,074 |
Deferred tax asset |
4,129 |
4,252 |
Other noncurrent assets |
3,057 |
3,335 |
Total noncurrent assets |
121,183 |
123,217 |
Total assets |
$ 197,652 |
$ 203,601 |
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Liabilities and stockholders' equity |
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Current liabilities |
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Current portion of long-term debt |
$ 8,000 |
$ 8,000 |
Accounts payable |
14,986 |
18,299 |
Accrued compensation and employee
benefits |
15,426 |
16,357 |
Deferred taxes |
4,638 |
7,046 |
Other accrued expenses |
4,381 |
3,708 |
Discontinued operations |
300 |
186 |
Total current liabilities |
47,731 |
53,596 |
Long-term liabilities |
|
|
Long-term debt |
18,000 |
23,973 |
Other long-term liabilities |
30,988 |
31,936 |
Total stockholders' equity |
100,933 |
94,096 |
Total liabilities and stockholders'
equity |
$ 197,652 |
$ 203,601 |
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ATTACHMENT IV |
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DYNAMICS RESEARCH
CORPORATION |
SUPPLEMENTAL
INFORMATION (unaudited) |
(dollars in
thousands) |
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Contract revenues were earned
from the following sectors: |
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Three Months
Ended |
Six Months
Ended |
|
June
30, |
June
30, |
|
2010 |
2009 |
2010 |
2009 |
National defense and intelligence
agencies |
$ 40,406 |
$ 39,722 |
$ 84,481 |
$ 78,783 |
Homeland security |
13,209 |
13,674 |
26,140 |
26,762 |
Federal civilian agencies |
6,406 |
7,864 |
12,573 |
16,793 |
Total revenue from federal
agencies |
60,021 |
61,260 |
123,194 |
122,338 |
State and local government agencies |
5,285 |
6,487 |
10,679 |
12,304 |
Other |
2 |
381 |
19 |
689 |
Total revenue |
$ 65,308 |
$ 68,128 |
$ 133,892 |
$ 135,331 |
|
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|
Revenues by contract type as a
percentage of contract revenue were as follows: |
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|
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|
|
|
|
|
Three Months
Ended |
Six Months
Ended |
|
June
30, |
June
30, |
|
2010 |
2009 |
2010 |
2009 |
Fixed price, including service-type
contracts |
44% |
38% |
45% |
37% |
Time and materials |
35 |
44 |
34 |
45 |
Cost reimbursable |
21 |
18 |
21 |
18 |
|
100% |
100% |
100% |
100% |
|
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|
Prime contract |
72% |
71% |
72% |
71% |
Sub-contract |
28 |
29 |
28 |
29 |
|
100% |
100% |
100% |
100% |
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Three Months
Ended |
Six Months
Ended |
|
June
30, |
June
30, |
|
2010 |
2009 |
2010 |
2009 |
Net cash provided by operating activities -
continuing operations |
$ 1,963 |
$ 5,086 |
$ 15,050 |
$ 8,532 |
Capital expenditures |
$ 1,111 |
$ 545 |
$ 3,581 |
$ 768 |
Depreciation |
$ 878 |
$ 703 |
$ 1,764 |
$ 1,440 |
Bookings |
$ 52,922 |
$ 66,324 |
$ 130,143 |
$ 122,151 |
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June 30, |
December 31, |
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2010 |
2009 |
|
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Total backlog |
$ 362,304 |
$ 434,475 |
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Funded backlog |
$ 150,609 |
$ 158,518 |
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Employees |
1,369 |
1,469 |
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CONTACT: Darrow Associates, Inc.
Investors:
Chris Witty
646.438.9385
cwitty@darrowir.com
Sage Communications (for DRC)
Media:
Duyen "Jen" Truong
703.584.5645
duyent@aboutsage.com
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