DRCO Dynamics Research Corp. (MM)

Dynamics Research Corporation Reports Higher Revenues For First Quarter 2004 ANDOVER, Mass., May 4 /PRNewswire-FirstCall/ -- Dynamics Research Corporation today reported revenues of $62.1 million and earnings from continuing operations of $2.0 million, or $0.23 per diluted share, for the first quarter ended March 31, 2004. This compares with revenues of $58.6 million and earnings from continuing operations of $1.6 million, or $0.19 per diluted share, for the same period in 2003. Regarding operating results for the quarter, James P. Regan, chairman and chief executive officer, said, "I am pleased that both the top and bottom lines were consistent with our expectations. Funded bookings of $78 million for the quarter were very strong, 26% above revenues for the quarter, resulting in more than seven months of funded backlog. I am further encouraged by strong first quarter leading indicators as evidenced by the book-to-bill ratio of 1.26, and a consistently high level of first year revenue awaiting award." "Our continued, focused business development activities in DRC's identified national priority markets have resulted in an increasing pipeline of qualified opportunities and improved new business win rate. We expect these trends to continue through 2004 and beyond. Based on our results in the quarter, we are on a path to achieve record new business bookings in 2004. Our first quarter achievements, combined with the leading new business development indicators, underlie my confidence in achieving our 2004 goals," Regan continued. "As reported last quarter, on January 1, 2004, we placed into service a new PeopleSoft-based enterprise business system, replacing and integrating our back office systems. In the years ahead, we believe this strategically important initiative will facilitate improvements in operating effectiveness and scalability. While receivables have risen as we converted to the system during the quarter, this was expected, and we anticipate sequential declines in receivables through the rest of this year, returning to days sales outstanding of 85 or better by the end of the year," he added. DRC re-affirmed guidance for 2004, with revenues expected to be in the range of $260 to $268 million and earnings per diluted share from continuing operations expected to be in the range of $1.02 to $1.08. For the second quarter of the year the company expects to book revenues in the range of $64 to $67 million and report earnings per diluted share from continuing operations of $0.24 to $0.26. The company will conduct a conference call tomorrow, May 5, 2004 at 8:30 a.m. ET to discuss its first quarter results and the outlook for 2004 in more detail. The call will be available via telephone at (800) 915-4836, and accessible via Web cast at http://www.drc.com/. Recorded replays of the conference call will be available on Dynamics Research Corporation's investor relations home page at http://www.drc.com/ and by telephone at (800) 428-6051, passcode #351256, beginning at 10:00 a.m. May 5, 2004 through 11:59 p.m. May 12, 2004. About Dynamics Research Corporation Dynamics Research Corporation is an innovative solutions provider that partners with government customers to apply proven processes and technologies. DRC delivers engineering, logistics, training, simulation, modeling and information technology services that enhance the performance and cost- effectiveness of its customers' mission critical systems. For additional information please visit the website at http://www.drc.com/. 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 CONTACT: Elise Caffrey, Treasurer & Director, Investor Relations (978) 475-9090, Ext. 1309 ATTACHMENT I DYNAMICS RESEARCH CORPORATION RESULTS OF OPERATIONS (unaudited) (in thousands, except share and per share data) Three months ended March 31, 2004 2003 Contract revenue $60,637 $56,929 Product sales 1,431 1,677 Total revenue 62,068 58,606 Cost of contract revenue 51,837 48,152 Cost of product sales 1,141 1,253 Selling, general and administrative expenses 5,335 5,781 Amortization of intangible assets 381 455 Total operating costs and expenses 58,694 55,641 Operating income 3,374 2,965 Interest expense, net (213) (277) Other income 381 42 Income from continuing operations before provision for income taxes 3,542 2,730 Provision for income taxes 1,498 1,098 Income from continuing operations 2,044 1,632 Loss from discontinued operations, net of taxes - (357) Loss on disposal of discontinued operations, net of taxes - (233) Net income $2,044 $1,042 NET EARNINGS PER COMMON SHARE Basic Income from continuing operations $0.24 $0.20 Loss from discontinued operations - (0.04) Loss on disposal of discontinued operations - (0.03) Net earnings per common share $0.24 $0.13 Diluted Income from continuing operations $0.23 $0.19 Loss from discontinued operations - (0.04) Loss on disposal of discontinued operations - (0.03) Net earnings per common share $0.23 $0.12 Weighted average shares outstanding Weighted average shares outstanding - basic 8,394,265 8,116,515 Dilutive effect of options 608,862 529,402 Weighted average shares outstanding - diluted 9,003,127 8,645,917 ATTACHMENT II DYNAMICS RESEARCH CORPORATION CONDENSED BALANCE SHEETS (unaudited) (in thousands) March 31, December 31, 2004 2003 Assets Cash and cash equivalents $50 $2,724 Accounts receivable, net of allowances 24,480 28,251 Unbilled expenditures and fees on contracts in process 50,476 34,257 Prepaid expenses and other current assets 3,245 2,145 Total current assets 78,251 67,377 Property, plant and equipment, net 20,955 20,672 Deferred income taxes 2,340 2,337 Goodwill 26,711 26,711 Intangible assets, net 1,962 2,343 Other noncurrent assets 1,924 1,630 Total noncurrent assets 53,892 53,693 Total assets $132,143 $121,070 Liabilities and stockholders' equity Current portion of long-term debt $500 $500 Notes payable and revolver 15,226 8,500 Accounts payable 14,812 13,351 Accrued payroll and employee benefits 16,062 15,657 Deferred income taxes 9,503 9,698 Other accrued expenses 2,219 2,371 Discontinued operations 823 778 Total current liabilities 59,145 50,855 Long-term debt, less current portion 7,625 7,750 Accrued pension liability 12,030 12,030 Other long-term liabilities 1,669 1,386 Discontinued operations 250 398 Total long-term liabilities 21,574 21,564 Total liabilities 80,719 72,419 Stockholders' equity 51,424 48,651 Total liabilities and stockholders' equity $132,143 $121,070 ATTACHMENT III DYNAMICS RESEARCH CORPORATION SUPPLEMENTAL INFORMATION (unaudited) (dollars in thousands) Three Months Ended March 31, 2004 2003 Capital expenditures - continuing operations $1,157 $833 Capital expenditures - total company $1,157 $833 Depreciation - continuing operations $874 $800 Depreciation - total company $874 $840 Bookings - continuing operations $78,264 $66,711 Bookings - total company $78,264 $68,195 March 31, 2004 2003 Funded backlog - continuing operations $145,766 $119,176 Funded backlog - total company $145,766 $119,844 Employees - continuing operations 1,641 1,820 Employees - total company 1,641 1,910 DATASOURCE: Dynamics Research Corporation CONTACT: Elise Caffrey, Treasurer & Director, Investor Relations of Dynamics Research Corporation, +1-978-475-9090, Ext. 1309 Web site: http://www.drc.com/

Copyright