SINT SiNtx Technologies Inc

SI International Reports Record Revenue and Net Income for First Quarter FY05 Revenue up 50% to $84 million; Operating Income up 47% to $6.5 million; Net Income up 37% to $3.2 million; EPS of 28 Cents RESTON, Va., April 25 /PRNewswire-FirstCall/ -- SI International, Inc. (NASDAQ:SINT), an information technology and network solutions (IT) company, today announced record results for its first quarter ended March 26, 2005. Revenue for the first quarter of fiscal year 2005 (FY05) increased 50 percent and net income increased by 37 percent as compared to the first quarter in the previous year. The Company's results were driven by strong organic growth in the Federal government IT business and the acquisition of Bridge Technology Corporation in December 2004 and of Shenandoah Electronic Intelligence, Inc. in February 2005. First Quarter FY05 Financial Results Revenue for the first quarter of FY05 was $83.7 million, an increase of 50 percent over first quarter FY04 revenue of $56.0 million. Federal government contract revenue, which represented 98 percent of first quarter FY05 total revenue, grew by 52 percent to $81.9 million from $53.8 million for the first quarter FY04. Revenue growth in the first quarter was primarily the result of continued growth in the Company's key focus areas: Federal IT modernization, defense transformation, homeland defense, and mission-critical outsourcing. Net income for the first quarter FY05 was $3.2 million, an increase of 37 percent over first quarter FY04 net income of $2.4 million. Diluted earnings per share for the first quarter FY05 was $0.28. Income from operations for the first quarter of FY05 was $6.5 million, an increase of 47 percent over operating income of $4.4 million reported in the first quarter FY04. Backlog as of March 26, 2005 was $879 million, including $168 million in funded backlog and $711 million in unfunded backlog. Days Sales Outstanding (DSOs) were 74 days at the end of the first quarter FY05. "We are very pleased to report our continued trend of robust revenue growth. These record results provide a solid foundation for meeting our financial goals for fiscal year 2005," said Ray Oleson, SI International's Chairman and CEO. "Our financial results demonstrate the close alignment of the Federal government's IT agenda with SI International's core strategic focus and proven capabilities." Business Outlook Based on the Company's current backlog and management estimates as to future tasking and contract awards, SI International issued the following guidance ranges for the second fiscal quarter FY05 and maintained its previous guidance for full year 2005. The Company projects annual organic growth of 10 to 15 percent for fiscal year 2005: Q2 2005 Full Year 2005 Revenue $88 - 92 million $380 - 390 million Net income $3.3 - 3.5 million $15.1 - 15.6 million Diluted earnings per share $0.28 - 0.30 $1.30 - 1.34 Conference Call SI International has scheduled a conference call to discuss its results and business outlook for 11:00 AM EDT, tomorrow. Participating in the conference call will be SI International's Chairman and CEO, Ray Oleson, President and COO, Brad Antle, and Executive Vice President and CFO, Ted Dunn. A question and answer session will be included to further discuss the results and the Company's future performance expectations. Interested parties should contact Alan Hill at 703-234-6854 for dial-in information. The conference call will be webcast simultaneously to the public through a link on the Investor Relations section of SI International's web site, http://www.si-intl.com/. A replay of the webcast will be available on the SI International web site beginning two hours after the conclusion of the conference call. In addition, a replay of the conference will be available by telephone beginning on Tuesday, April 26, 2005 at 1:00 PM ET through Tuesday, May 3, 2005 at 5:00 PM ET by calling 1-888-286-8010 and entering the conference passcode number 50122355. About SI International: SI International, a member of the Russell 2000 index, is a provider of information technology and network solutions primarily to the Federal government. The Company combines technological and industry expertise to provide a full spectrum of state-of-the-practice solutions and services, from design and development to documentation and operations, to assist clients in achieving their missions. More information about SI International can be found at http://www.si-intl.com/. The above-referenced statements may contain forward-looking statements that are made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Expressions of future goals and similar expressions reflecting something other than historical fact are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. These forward-looking statements involve a number of risks and uncertainties, which are described in the Company's filings with the Securities and Exchange Commission. These risks and uncertainties include: differences between authorized amounts and amounts received by the Company under government contracts; government customers' failure to exercise options under contracts; changes in federal government (or other applicable) procurement laws, regulations, policies and budgets; the Company's ability to attract and retain qualified personnel; and the important factors discussed in the Risk Factors section of the annual report on Form 10-K filed by the Company with the Securities and Exchange Commission and available directly from the Commission at http://www.sec.gov/. The actual results may differ materially from any forward-looking statements due to such risks and uncertainties. The Company undertakes no obligations to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release. SI International, Inc. Consolidated Income Statement (unaudited) (In thousands, except per share data) Three Months Ended ------------------------- March 26, March 27, 2005 2004 ----------- ----------- Revenue $83,717 $55,970 Direct costs 52,603 33,529 Indirect costs 23,580 17,309 Depreciation and amortization 551 589 Amortization of intangible assets 457 113 ----------- ----------- Income from Operations 6,526 4,430 Other income (expense) (99) -- Interest expense (1,097) (534) ----------- ----------- Income before provision for income taxes 5,330 3,896 Provision for income taxes 2,106 1,539 ----------- ----------- Net income $3,224 $2,357 =========== =========== Basic weighted average shares outstanding 11,063 8,458 Diluted weighted average shares outstanding 11,627 8,833 Earnings per common share: Basic $0.29 $0.28 Diluted $0.28 $0.27 EBITDA (1) $7,534 $5,132 Notes: (1) EBITDA is defined as GAAP net income (loss) plus other expense (income), interest expense, income taxes, depreciation and amortization. EBITDA as calculated by us may be calculated differently than EBITDA for other companies. We have provided EBITDA because we believe it is a commonly used measure of financial performance in comparable companies and is provided to help investors evaluate companies on a consistent basis, as well as to enhance an understanding of our operating results. EBITDA should not be construed as either an alternative to net income as an indicator of our operating performance or as an alternative to cash flows as a measure of liquidity. Reconciliation of Net Income to EBITDA is as follows: Three Months Ended --------------------------- March 26, March 27, 2005 2004 ------------ ------------ Net income $3,224 $2,357 Other expense 99 -- Interest expense 1,097 534 Provision for income taxes 2,106 1,539 Depreciation 551 589 Amortization 457 113 ------------ ------------ EBITDA $7,534 $5,132 SI International, Inc. Revenue Segmentation Data (unaudited) (In thousands) Three Months ended -------------------------------------------------- March 26, 2005 March 27, 2004 Growth ---------------- ---------------- -------- $ % $ % $ % Core Federal government 81,924 97.9% 53,812 96.2% 28,112 52.2% Commercial and other 1,793 2.1% 2,158 3.8% (365) -16.9% -------------------------------------------------- Total revenue 83,717 100.0% 55,970 100.0% 27,747 49.6% Prime contracts 64,931 77.6% 44,443 79.4% 20,488 46.1% Subcontract 18,786 22.4% 11,527 20.6% 7,259 63.0% -------------------------------------------------- Total revenue 83,717 100.0% 55,970 100.0% 27,747 49.6% Cost reimbursable 28,653 34.2% 13,064 23.3% 15,589 119.3% Time and materials 39,485 47.2% 28,525 51.0% 10,960 38.4% Fixed price 15,579 18.6% 14,381 25.7% 1,198 8.3% -------------------------------------------------- Total revenue 83,717 100.0% 55,970 100.0% 27,747 49.6% Department of Defense 40,885 49.0% 28,034 50.1% 12,851 45.8% Federal civilian agencies 41,039 48.9% 25,778 46.1% 15,261 59.2% Commercial entities 1,793 2.1% 2,158 3.8% (365) -16.9% -------------------------------------------------- Total revenue 83,717 100.0% 55,970 100.0% 27,747 49.6% Major contracts: C4I2TSR 14,954 17.8% 5,946 10.6% 9,008 151.5% NVC/KCC 8,274 9.9% 5,733 10.3% 2,541 44.3% All other 60,489 72.3% 44,291 79.1% 16,198 36.6% -------------------------------------------------- Total revenue 83,717 100.0% 55,970 100.0% 27,747 49.6% SI International, Inc. Consolidated Balance Sheet As of March 26, 2004 and December 25, 2004 (In thousands, except share data) March 26, December 25, 2005 2004 ---------- ---------- Assets Current assets: Cash and cash equivalents $12,326 $5,754 Accounts receivable, net 76,488 65,710 Deferred tax asset 2,740 2,740 Other current assets 4,588 3,503 Total current assets 96,142 77,707 Property and equipment, net 4,862 4,971 Intangible assets, net 18,320 6,575 Other assets 5,637 2,142 Goodwill 175,234 120,712 Total assets $300,195 $212,107 Liabilities and stockholders' equity Current liabilities: Note Payable-Line of Credit $- $28,954 Current portion of long-term debt 1,000 - Accounts payable 18,406 11,225 Accrued expenses and other current liabilities 20,545 15,314 Deferred revenue 166 289 Total current liabilities 40,117 55,782 Long-term debt, net of current portion 99,000 - Note payable-former owner of acquired business 2,280 2,280 Deferred income tax 5,046 5,046 Other long-term liabilities 4,748 3,929 Stockholders' equity: Common stock-$0.01 par value per share; 50,000,000 shares authorized; 11,105,706 and 11,047,533 shares issued and outstanding as of March 26, 2005 and December 25, 2004, respectively 111 111 Additional paid-in capital 128,870 128,192 Deferred compensation (176) (208) Retained earnings 20,199 16,975 Total stockholders' equity 149,004 145,070 Total liabilities and stockholders' equity $300,195 $212,107 SI International, Inc. Consolidated Statements of Cash Flows (unaudited) (In thousands) Three Months Ended --------------------- March 26, March 27, 2005 2004 ---------- ---------- Cash flows from operating activities: Net income $3,224 $2,357 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 551 589 Amortization of intangible assets 457 113 Deferred income tax provision - 1,480 Stock-based compensation 32 32 Amortization of deferred financing costs 120 108 Changes in operating assets and liabilities, net of effect of acquisitions: Accounts receivable 1,699 (3,629) Other current assets (976) (767) Other assets (454) 469 Accounts payable and accrued expenses 4,231 1,908 Deferred revenue (123) - Other long term liabilities 732 97 --------------------- Net cash provided by operating activities 9,493 2,757 Cash flows from investing activities: Purchase of property and equipment, net (172) (620) Cash paid for acquisition of MATCOM (35) (65,849) Cash paid for acquisition of Bridge Tech (99) - Cash paid for acquisition of SEI, net of cash assumed (71,154) - --------------------- Net cash used in investing activities (71,460) (66,469) Cash flows from financing activities: Net borrowings (repayments) under line of credit (28,954) 16,000 Proceeds from long-term debt 100,000 30,000 Payment of debt issuance costs (3,160) (1,176) Proceeds from exercise of stock options 678 124 Repayments of capital lease obligations (25) (35) --------------------- Net cash provided by financing activities 68,539 44,913 --------------------- Net change in cash and cash equivalents 6,572 (18,799) Cash and cash equivalents, beginning of period 5,754 23,252 --------------------- Cash and cash equivalents, end of period $12,326 $4,453 ===================== Supplemental disclosures of cash flow information: Cash payments for interest $41 $115 Cash payments (refund) for income taxes $296 ($77) CONTACT: Alan Hill of SI International, Inc., +1-703-234-6854, DATASOURCE: SI International, Inc. CONTACT: Alan Hill of SI International, Inc., +1-703-234-6854, Web site: http://www.si-intl.com/

Copyright