-- Fiscal Fourth Quarter Revenue: Up 10% to $326 Million -- Fiscal
Year 2007 Revenue: Up 8% to $1.269 Billion -- Diluted EPS: $0.28
for Fiscal Fourth Quarter, $1.09 for Fiscal Year 2007 FAIRFAX, Va.,
Aug. 8 /PRNewswire-FirstCall/ -- SRA International, Inc.
(NYSE:SRX), a leading provider of technology and strategic
consulting services and solutions to federal government
organizations, today announced operating results for the fourth
quarter and fiscal year 2007, which ended June 30, 2007. Revenue
for the quarter increased 10% from $297.2 million in the June 2006
quarter to $326.2 million. Revenue for the year increased 8% from
$1.179 billion in fiscal year 2006 to $1.269 billion. Operating
income for the quarter was $25.2 million, and full-year operating
income was $92.8 million. Net income for the quarter was $16.7
million, and full-year net income was $63.4 million. Diluted
earnings per share for the quarter were $0.28, and full-year
diluted earnings per share were $1.09. SRA President and Chief
Executive Officer Stan Sloane stated, "Fiscal year 2007 ended on a
high note with strong fourth quarter results and the key
acquisition of Constella, which we expect to close soon. We're also
beginning to see returns on our marketing and sales investments in
the form of bid and proposal activity and new contract awards."
Chief Financial Officer Stephen Hughes added, "We're pleased with
our June quarter progress in operating margins and earnings per
share. Operating cash flow was outstanding throughout fiscal year
2007, totaling 1.3 times operating income. Days sales outstanding
improved to 69 days in the fourth quarter, our best to date." New
Business Awards The Company won new business with potential value
of $255 million in the fourth quarter and $1.6 billion in the
fiscal year, if all options are exercised. The Company's backlog of
signed business orders stands at $3.4 billion. Major highlights of
competitive contract awards during the June quarter include: --
U.S. Health Resources and Services Administration (HRSA), National
Practitioner Data Bank (NPDB). Under this 4.5 year, $69 million
task order, the Company will continue operating, maintaining and
enhancing the NPDB system for HRSA. SRA will provide software
development, systems engineering, testing and security services for
the system, which it has supported since 1994. -- Department of
Homeland Security, U.S. Citizenship and Immigration Services
(USCIS). SRA is a member of the General Dynamics team that won the
Technology Operations and Maintenance Infrastructure Support task
order for USCIS. This key Homeland Security program was awarded
under the Department's EAGLE contract. -- Department of Veterans
Affairs, Veterans Benefits Administration (VBA). SRA was awarded an
$11 million contract to deliver information assurance services for
the VBA, which manages compensation, pension, education, insurance
and other services for veterans and their dependents. SRA was also
awarded prime contracts on several multiple-award ID/IQs in the
June quarter. We do not include these in our current bookings or
backlog, but they do provide significant opportunity for future
growth. -- Department of State, Security Assurance Services and
Innovation (SASI). The State Department named SRA one of eight
awardees of the SASI blanket purchase agreement, which has a
ceiling value of $710 million over five years. This contract will
provide for information assurance services to sustain a secure
information environment and support compliance with the Federal
Information Security Management Act. -- U.S. Transportation Command
(TRANSCOM), Advisory and Assistance Services. SRA was one of the
six large business winners of this five- year, $250 million
contract to deliver advisory and assistance services for TRANSCOM,
which provides air, land and sea transportation for the Department
of Defense. Subsequent to the end of the June quarter, SRA has won
several significant contracts, including one major multiple-award
ID/IQ. -- National Institutes of Health (NIH), Center for
Information Technology. The NIH awarded SRA a five-year, $39
million contract to continue delivering Web development services at
the Division for Enterprise and Custom Applications. -- Government
Accountability Office (GAO), Information Management and Product
Dissemination (IMPD). Under this five-year, $36 million task order,
SRA will provide information technology (IT) services to reduce
manual processes and increase automation for the IMPD program,
which supports GAO's capture, retrieval and dissemination of
written reports. -- Department of the Air Force, Intelligence,
Surveillance and Reconnaissance (ISR). SRA won a five-year, $30
million contract to deliver a full spectrum of ISR support
solutions at Beale Air Force Base. Services will include mission
planning, unmanned aircraft systems planning and training
management. -- Department of Justice, Joint Automated Booking
System (JABS). Under this five-year, $20 million blanket purchase
agreement, SRA will operate and maintain the JABS system, a
multi-agency initiative to promote information sharing among the
federal law enforcement community. -- General Services
Administration (GSA), Alliant. SRA was named one of the 29 awardees
of the GSA Alliant contract, which has a ceiling value of $50
billion over 10 years. A follow-on to the Millennia and Answer
contracts, Alliant can be used government-wide for integrated IT
solutions. In addition, as of June 30, 2007, the Company had
approximately $1.6 billion of pending bids outstanding. Changes to
Board of Directors SRA also announced today that President and CEO
Sloane was appointed to the Company's Board of Directors, effective
August 6. Concurrently, in keeping with the Company's effort to
maintain the independence of its Board, two inside directors have
offered their resignations. William K. Brehm has been a director
since 1978 and served 23 years as Chairman. Edward E. Legasey was
named the first SRA vice president in 1978 and became a director in
2003; he was previously the Company's executive vice president and
chief operating officer. SRA Chairman Ernst Volgenau said, "Bill
and Ted have been instrumental in building this Company based on a
steadfast commitment to our ethic of honesty and service. I thank
both for their years of dedicated service to SRA." Forward Guidance
The Company is issuing initial guidance for the first quarter and
fiscal year 2008. The table below represents management's current
expectations about the Company's future financial performance,
based on information available at this time. The forward guidance
in the table below does not include any effect for the Constella
acquisition, nor for acquisitions SRA might make in the future. The
Company intends to provide updated guidance to include the
Constella acquisition before the end of the quarter. Measure
Quarter Ending Fiscal Year Ending Sept 30, 2007 June 30, 2008
Revenue (in millions) $320-$330 $1,330-$1,380 Diluted EPS At least
$0.26 $1.13-$1.20 Diluted Share Equivalents (in millions) 59.3 59.8
About SRA International, Inc. SRA is a leading provider of
technology and strategic consulting services and solutions -
including systems design, development, and integration; and
outsourcing and managed services - to clients in national security,
civil government, and health care and public health markets. The
Company also delivers business solutions for contingency and
disaster response planning, information assurance, business
intelligence, environmental strategies, enterprise architecture,
infrastructure management, and wireless integration. FORTUNE(R)
magazine has chosen SRA as one of the "100 Best Companies to Work
For" for eight consecutive years. The Company's 5,200 employees
serve clients from its headquarters in Fairfax, Virginia, and
offices across the country. For additional information on SRA,
please visit http://www.sra.com/. Any statements in this press
release about future expectations, plans, and prospects for SRA,
including statements about the estimated value of the contracts and
work to be performed, and other statements containing the words
"estimates," "believes," "anticipates," "plans," "expects," "will,"
and similar expressions, constitute forward-looking statements
within the meaning of The Private Securities Litigation Reform Act
of 1995. Actual results may differ materially from those indicated
by such forward-looking statements as a result of various important
factors, including: our dependence on our contracts with federal
government agencies, particularly within the U.S. Department of
Defense, for substantially all of our revenue; our dependence on
our GSA schedule contracts and our position as a prime contractor
on government-wide acquisition contracts to grow our business; our
ability to attract and retain skilled employees; any reductions in
or reallocations of the U.S. defense budget or the budgets for
civil government agencies; the market price of the company's stock
prevailing from time to time; the nature of other investment
opportunities presented to the company from time to time; the
company's cash flows from operations; and other factors discussed
in our latest quarterly report on Form 10-Q filed with the
Securities and Exchange Commission on May 3, 2007. In addition, the
forward-looking statements included in this press release represent
our views as of August 8, 2007. We anticipate that subsequent
events and developments will cause our views to change. However,
while we may elect to update these forward-looking statements at
some point in the future, we specifically disclaim any obligation
to do so. These forward-looking statements should not be relied
upon as representing our views as of any date subsequent to August
8, 2007. Condensed Consolidated Statements of Operations
(Unaudited) (in thousands, except share and per share amounts)
Three Months Ended Year Ended 30-Jun-07 30-Jun-06 30-Jun-07
30-Jun-06 Revenue $326,207 $297,161 $1,268,872 $1,179,267 Operating
costs and expenses: Cost of services 244,171 219,302 954,656
880,802 Selling, general and administrative 51,283 46,060 200,204
183,297 Depreciation and amortization 5,602 4,859 21,187 18,201
Total operating costs and expenses 301,056 270,221 1,176,047
1,082,300 Operating income 25,151 26,940 92,825 96,967 Interest
income, net 1,789 1,636 6,276 4,232 Gain on sale of Mantas, Inc. --
-- 3,674 -- Income before taxes 26,940 28,576 102,775 101,199
Provision for income taxes 10,287 11,132 39,345 38,679 Net income
$16,653 $17,444 $63,430 $62,520 Earnings per share: Basic $0.29
$0.31 $1.12 $1.14 Diluted $0.28 $0.30 $1.09 $1.08 Weighted-average
shares: Basic 57,008,604 55,811,502 56,476,927 55,064,138 Diluted
58,742,984 58,074,390 58,381,788 57,738,875 Condensed Consolidated
Balance Sheets (Unaudited) (in thousands) As of 6/30/07 6/30/06
Current assets: Cash and cash equivalents $212,034 $173,564
Short-term investments 85 9,834 Accounts receivable, net 262,409
268,908 Prepaid expenses and other 26,285 23,382 Deferred income
taxes, current 5,860 4,839 Total current assets 506,673 480,527
Property and equipment, net 36,685 37,462 Other assets: Goodwill
256,530 169,334 Identified intangibles, net 30,849 26,169 Deferred
income taxes, noncurrent 8,163 3,462 Deferred compensation trust
8,784 7,768 Total other assets 304,326 206,733 Total assets
$847,684 $724,722 Current liabilities: Accounts payable and accrued
expenses $110,897 $115,545 Accrued payroll and employee benefits
81,711 59,463 Billings in excess of revenue recognized 16,980 5,952
Total current liabilities 209,588 180,960 Long-term liabilities:
Other long-term liabilities 12,641 10,465 Total long-term
liabilities 12,641 10,465 Total liabilities 222,229 191,425
Stockholders' equity 625,455 533,297 Total liabilities and
stockholders' equity $847,684 $724,722 Condensed Consolidated
Statements of Cash Flows (Unaudited) (in thousands) Year Ended
6/30/07 6/30/06 Cash flows from operating activities: Net income
$63,430 $62,520 Adjustments to reconcile net income to net cash
provided by operating activities: Depreciation and amortization
21,187 18,201 Stock-based compensation 11,496 13,177 Deferred
income taxes (5,722) (1,901) Gain on sale of Mantas, Inc. (3,674)
-- Working capital changes, net of the effect of acquisitions
35,727 (5,166) Net cash provided by operating activities 122,444
86,831 Cash flows from investing activities: Capital expenditures
(12,624) (15,639) Sales and maturities of investments 9,749 25,723
Purchases of investments -- (9,748) Acquisition of Galaxy
Scientific Corporation, net of cash acquired -- (95,645)
Acquisition of Spectrum Solutions Group, net of cash acquired
(8,000) (8,802) Acquisition of Mercomms Unlimited, net of cash
acquired -- (637) Acquisition of RABA Technologies, net of cash
acquired (94,005) -- Proceeds from sale of Mantas, Inc. 3,674 --
Net cash used in investing activities (101,206) (104,748) Cash
flows from financing activities: Issuance of common stock 9,550
12,999 Tax benefits of stock option exercises 6,521 13,774
Reissuance of treasury stock 1,245 3,997 Purchase of treasury stock
(84) (2,262) Net cash provided by financing activities 17,232
28,508 Net increase in cash and cash equivalents 38,470 10,591 Cash
and cash equivalents, beginning of period 173,564 162,973 Cash and
cash equivalents, end of period $212,034 $173,564 Supplemental
disclosures of cash flow information: Cash paid during the period:
Income taxes $38,012 $26,377 Cash received during the period:
Interest $6,103 $4,219 Income taxes $938 $1,038 Reconciliation
Between Total Revenue Growth and Organic Revenue Growth (Unaudited)
(in thousands) Organic revenue growth, as presented, measures
revenue growth adjusted for the impact of acquisitions. The Company
believes that this non-GAAP financial measure provides useful
information because it allows investors to better assess the
underlying growth rate of the Company's existing business. This
non-GAAP financial measure should not be considered in isolation or
as a substitute for measures of performance prepared in accordance
with GAAP. Three Months Ended % 6/30/07 6/30/06 Increase Total
Revenue, as reported $326,207 $297,161 9.8% Plus: Revenue from
acquired companies for the comparable prior year period -- 15,748
Organic Revenue $326,207 $312,909 4.2% Year Ended 6/30/07 6/30/06
Total Revenue, as reported $1,268,872 $1,179,267 7.6% Plus: Revenue
from acquired companies for the comparable prior year period 48,022
Organic Revenue $1,268,872 $1,227,289 3.4% DATASOURCE: SRA
International, Inc. CONTACT: David Keffer, Director, Investor
Relations, +1-703-502-7731, , or Stephen Hughes, Executive Vice
President and CFO, +1-703-502-7732, , both of both of SRA
International, Inc. Web site: http://www.sra.com/
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