DRC Reports Third Quarter 2011 Results
01 Novembro 2011 - 9:58PM
Dynamics Research Corporation (Nasdaq:DRCO), a leading provider of
innovative management consulting, science, engineering, and
information technology services and solutions to federal and state
governments, today announced operating results for the third
quarter ended September 30, 2011.
Financial Results
The Company reported income from continuing operations for the
third quarter of 2011 of $3.3 million, or $0.32 per diluted share,
up from $3.0 million, or $0.30 per diluted share, for the third
quarter of 2010. Revenue for the third quarter of 2011 was $96.4
million, up from $68.4 million for the same period in 2010,
reflecting the Company's merger with High Performance Technologies
Inc. (HPTi), which closed on June 30, 2011. Third quarter 2011
federal business revenue was up 3.4 percent compared with the same
period a year ago on a pro forma basis, as if HPTi had been owned
by DRC in both periods.
For the nine month period ended September 30, 2011 income from
continuing operations, excluding second quarter transaction costs,
was $8.7 million, or $0.86 per diluted share, compared with $8.3
million, or $0.83 per diluted share, for the same period in 2010.
For the nine months ended September 30, 2011 revenue was $234.4
million compared with $202.3 million for the same period in
2010.
Business Highlights
"We are pleased to report our first full quarter with High
Performance Technologies as a DRC operating group," said Jim Regan,
DRC's chairman and chief executive officer. "The integration of
HPTi into DRC is proceeding very successfully, and for the combined
companies we ended the quarter with the highest backlog in DRC's
history. Even given the general market uncertainties tied to
the Congressional budget process, we believe that DRC, now more
than ever, is well positioned with the right customers and contract
vehicles to succeed going forward.
"We are seeing continued demand for our high end information
technology solutions and management consulting services within the
cyber security, healthcare, homeland security, intelligence and
financial regulatory markets. Third quarter results once again
showed the strength of our market presence, with operating margins
of 9.2 percent and cash generation from operations of $14.3
million. As a result we have accelerated the de-levering of
our balance sheet, prepaying $15 million of debt in the
quarter.
"From a business development viewpoint our pipeline of
opportunities remains robust – with total backlog of $841 million,
including funded backlog of $214 million, which represents more
than six months of revenue. With a third quarter book-to-bill
ratio of 1.7-to-1.0 and a 1.1-to-1.0 trailing twelve months ratio,
funded bookings in the quarter were strong based on a 98 percent
re-compete win rate and nearly $60 million of new business contract
wins in the quarter."
Company Guidance
The Company's estimate for 2011 full year revenue is in the
range of $326 to $330 million. The Company's estimate for 2011
earnings are in the range of $1.24 to $1.27 per diluted share,
excluding one-time transaction costs incurred in the second quarter
of 2011, which represented $0.13 per share. For the fourth
quarter of 2011, the Company anticipates revenue in the range of
$91.5 to $95 million and earnings per diluted share of $0.38 to
$0.41.
Conference Call
The Company will conduct a third quarter 2011 conference call
tomorrow, November 2, 2011 at 10:00 a.m. ET. The call will be
available by telephone at 877-303-4382 and accessible by webcast at
www.drc.com. Recorded replays of the conference call will be
available on the Company's website and by telephone at
800-585-8367, replay passcode # 18576450, beginning at 1:00 p.m. ET
on November 2, 2011.
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 |
|
|
|
DYNAMICS RESEARCH
CORPORATION |
CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS (unaudited) |
(in thousands, except
share and per share data) |
|
|
|
|
|
|
|
Three Months
Ended |
|
September
30, |
|
2011 |
2010 |
Revenue |
$ 96,379 |
$ 68,420 |
Cost of revenue |
78,941 |
57,630 |
Gross profit |
17,438 |
10,790 |
|
|
|
Selling, general and administrative
expenses |
7,041 |
5,197 |
Amortization of intangible assets |
1,553 |
385 |
Operating income |
8,844 |
5,208 |
Interest expense, net |
(3,027) |
(339) |
Other income (expense), net |
(157) |
151 |
Income from continuing operations before
provision for income taxes |
5,660 |
5,020 |
Provision for income taxes |
2,382 |
2,014 |
Income from continuing operations |
3,278 |
3,006 |
Effect of discontinued operations, net of
tax |
-- |
87 |
Net income |
$ 3,278 |
$ 3,093 |
|
|
|
Earnings per share |
|
|
Basic |
|
|
Income from continuing
operations |
$ 0.32 |
$ 0.30 |
Effect of discontinued
operations, net of tax |
-- |
0.01 |
Net income |
$ 0.32 |
$ 0.31 |
Diluted |
|
|
Income from continuing
operations |
$ 0.32 |
$ 0.30 |
Effect of discontinued
operations, net of tax |
-- |
0.01 |
Net income |
$ 0.32 |
$ 0.31 |
|
|
|
Weighted average shares outstanding |
|
|
Basic |
10,244,868 |
9,937,470 |
Diluted |
10,314,413 |
10,060,980 |
|
ATTACHMENT II |
|
|
|
DYNAMICS RESEARCH
CORPORATION |
CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS (unaudited) |
(in thousands, except
share and per share data) |
|
|
|
|
|
|
|
Nine Months
Ended |
|
September
30, |
|
2011 |
2010 |
Revenue |
$ 234,375 |
$ 202,312 |
Cost of revenue |
195,746 |
170,568 |
Gross profit |
38,629 |
31,744 |
|
|
|
Selling, general and administrative
expenses |
19,519 |
16,233 |
Amortization of intangible assets |
2,301 |
1,156 |
Operating income |
16,809 |
14,355 |
Interest expense, net |
(4,047) |
(1,082) |
Other income, net |
6 |
234 |
Income from continuing operations before
provision for income taxes |
12,768 |
13,507 |
Provision for income taxes |
5,345 |
5,185 |
Income from continuing operations |
7,423 |
8,322 |
Effect of discontinued operations, net of
tax |
-- |
392 |
Net income |
$ 7,423 |
$ 8,714 |
|
|
|
Earnings per share |
|
|
Basic |
|
|
Income from continuing
operations |
$ 0.74 |
$ 0.84 |
Effect of discontinued
operations, net of tax |
-- |
0.04 |
Net income |
$ 0.74 |
$ 0.88 |
Diluted |
|
|
Income from continuing
operations |
$ 0.73 |
$ 0.83 |
Effect of discontinued
operations, net of tax |
-- |
0.04 |
Net income |
$ 0.73 |
$ 0.87 |
|
|
|
Weighted average shares outstanding |
|
|
Basic |
10,060,585 |
9,879,905 |
Diluted |
10,205,603 |
10,057,211 |
|
ATTACHMENT
III |
|
|
|
DYNAMICS RESEARCH
CORPORATION |
CONDENSED CONSOLIDATED
BALANCE SHEETS (unaudited) |
(in
thousands) |
|
|
|
|
|
|
|
September 30, |
December 31, |
|
2011 |
2010 |
Assets |
|
|
Current assets |
|
|
Cash and cash equivalents |
$ 3,417 |
$ 30,163 |
Contract receivables, net |
74,731 |
48,394 |
Prepaid expenses and other
current assets |
3,725 |
2,924 |
Total current assets |
81,873 |
81,481 |
Noncurrent assets |
|
|
Property and equipment,
net |
15,993 |
12,219 |
Goodwill |
210,895 |
97,641 |
Intangible assets, net |
20,232 |
2,533 |
Deferred tax asset |
-- |
585 |
Other noncurrent assets |
4,314 |
3,757 |
Total noncurrent assets |
251,434 |
116,735 |
Total assets |
$ 333,307 |
$ 198,216 |
|
|
|
Liabilities and stockholders' equity |
|
|
Current liabilities |
|
|
Current portion of long-term
debt |
$ 11,688 |
$ 8,000 |
Accounts payable |
28,227 |
16,883 |
Accrued compensation and
employee benefits |
25,747 |
18,046 |
Deferred tax liability |
2,762 |
2,418 |
Other accrued expenses |
6,041 |
4,617 |
Total current liabilities |
74,465 |
49,964 |
Long-term liabilities |
|
|
Long-term debt |
114,976 |
14,000 |
Deferred tax liability |
637 |
-- |
Other long-term
liabilities |
26,015 |
27,067 |
Total stockholders' equity |
117,214 |
107,185 |
Total liabilities and
stockholders' equity |
$ 333,307 |
$ 198,216 |
|
ATTACHMENT IV |
|
|
|
|
|
DYNAMICS RESEARCH
CORPORATION |
SUPPLEMENTAL
INFORMATION (unaudited) |
(dollars in
thousands) |
|
|
|
|
|
|
|
|
|
|
Contract revenues were earned
from the following sectors: |
|
|
|
|
|
|
Three Months
Ended |
Nine Months
Ended |
|
September
30, |
September
30, |
|
2011 |
2010 |
2011 |
2010 |
National defense and intelligence
agencies |
$ 59,479 |
$ 45,464 |
$ 154,761 |
$ 130,360 |
Homeland security |
12,963 |
13,533 |
36,573 |
39,706 |
Federal civilian agencies |
20,148 |
5,438 |
31,738 |
17,564 |
Total revenue from federal
agencies |
92,590 |
64,435 |
223,072 |
187,630 |
State and local government agencies |
3,774 |
3,980 |
11,274 |
14,658 |
Other |
15 |
5 |
29 |
24 |
Total revenue |
$ 96,379 |
$ 68,420 |
$ 234,375 |
$ 202,312 |
|
|
|
|
|
Revenues by contract type as a
percentage of contract revenue were as follows: |
|
|
|
|
|
|
Three Months
Ended |
Nine Months
Ended |
|
September
30, |
September
30, |
|
2011 |
2010 |
2011 |
2010 |
Fixed price, including service-type
contracts |
46% |
45% |
48% |
45% |
Time and materials |
33 |
34 |
31 |
34 |
Cost reimbursable |
21 |
21 |
21 |
21 |
|
100% |
100% |
100% |
100% |
|
|
|
|
|
Prime contract |
82% |
73% |
78% |
72% |
Sub-contract |
18 |
27 |
22 |
28 |
|
100% |
100% |
100% |
100% |
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
Nine Months
Ended |
|
September
30, |
September
30, |
|
2011 |
2010 |
2011 |
2010 |
Net cash provided by (used in) operating
activities - continuing operations |
$ 14,277 |
$ 16,421 |
$ 14,278 |
$ 31,471 |
Capital expenditures |
$ 663 |
$ 685 |
$ 1,525 |
$ 4,266 |
Depreciation |
$ 1,067 |
$ 896 |
$ 2,774 |
$ 2,660 |
Bookings |
$ 160,881 |
$ 95,445 |
$ 274,634 |
$ 225,588 |
|
|
|
|
|
|
|
|
|
|
|
September 30, |
December 31, |
|
|
|
2011 |
2010 |
|
|
Total backlog |
$ 840,957 |
$ 400,881 |
|
|
Funded backlog |
$ 213,995 |
$ 133,516 |
|
|
Employees |
1,604 |
1,298 |
|
|
CONTACT: Investors: Chris Witty
Darrow Associates, Inc.
646.438.9385
cwitty@darrowir.com
Media: Duyen "Jen" Truong
Sage Communications (for DRC)
703.584.5645
duyent@aboutsage.com
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