- Revenue of $402 million in Q4, $1.54 billion in FY 2009 - Diluted
EPS of $0.30 in Q4, $1.01 in FY 2009 - Contract awards of $434
million in Q4, $2.37 billion in FY 2009 - Operating cash flow of
$60 million in Q4, $91 million in FY 2009 FAIRFAX, Va., Aug. 12
/PRNewswire-FirstCall/ -- SRA International, Inc. (NYSE:SRX), a
leading provider of technology and strategic consulting services
and solutions to government organizations and commercial clients,
today announced operating results for the fourth quarter and fiscal
year (FY) 2009, which ended June 30, 2009. For the quarter, revenue
was $402.0 million, up 4.5% from $384.8 million in the June 2008
quarter. Organic revenue growth for the same period was 3.5%.
Operating income for the quarter was $29.0 million, for an
operating margin of 7.2%. Net income was $17.5 million, for a net
margin of 4.3%. Diluted earnings per share (DEPS) for the quarter
were $0.30, down $0.02 year over year. For the full fiscal year,
revenue was $1.541 billion, up 2.2% from $1.507 billion in FY 2008.
Organic revenue growth for the same period was 0.7%. Operating
income for the year was $99.9 million, for an operating margin of
6.5%. Net income was $58.0 million, for a net margin of 3.8%. DEPS
for the year were $1.01, down $0.23 year over year. SRA President
and CEO Stan Sloane said, "We're pleased to have made progress in
our business execution during the second half of FY09. Organic
revenue growth and operating margins were higher in Q4 than in any
prior quarter during the year. Having won over $2.3 billion of new
business in FY09, we've improved our revenue visibility for FY10
and established a solid foundation for growth." Executive Vice
President and CFO Rick Nadeau added, "Our Q4 financial results
reflected effective cost containment across the company and
improving performance in our Era business. Cash flow from
operations was $60 million in Q4, and our net debt balance was $300
thousand as of June 30, 2009." Contract Awards SRA won new business
in the third quarter with potential value of $434 million, if all
option years are exercised. As of June 30, 2009, the company's
backlog of signed business orders was $4.1 billion, up 5%
year-over-year, and the funded portion of backlog was $762 million.
Major highlights of competitive contract awards in the quarter
include: -- Classified Contract. SRA was awarded a $68 million
contract in support of a classified customer. -- Department of
Defense, Joint Staff Information Network. The company won a
31-month, $63 million task order to provide systems integration
services for the Pentagon's Joint Staff Information Network.
Awarded under the ENCORE II contract vehicle, the task order
involves system and application upgrades, as well as communications
infrastructure support. -- Environmental Protection Agency (EPA).
The EPA awarded SRA two recompete task orders under its Software
Engineering and Specialized Scientific Support contract. The task
orders have a combined value of $30 million and cover a range of
technical and program support services. SRA was also awarded
several multiple-award, indefinite delivery, indefinite quantity
(ID/IQ) contracts in the June quarter. ID/IQ wins are not included
in the company's quarterly bookings figure, but they provide a
solid foundation for future growth. -- U.S. Army, Program Executive
Office Enterprise Information Systems (PEO EIS). PEO EIS named SRA
one of the awardees of its Program Management Support Services-2
(PMSS-2) contract, which covers a variety services related to
information technology and program support. -- Department of
Homeland Security (DHS), National Communications System (NCS). SRA
was one of the prime contractors selected by DHS for a five-year
ID/IQ contract with a combined ceiling value of $388 million. Task
orders under this contract will involve support for emergency
communications and operations. Forward Guidance The company is
issuing initial revenue and earnings guidance for Fiscal Year 2010.
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 this table does not
include any effect for acquisitions that SRA might make in the
future. The guidance assumes a FY 2010 diluted share count of 58.6
million. Fiscal Year (FY) Ending Change from Measure June 30, 2010
FY 2009 to 2010
-------------------------------------------------------------------
Revenue $1.585 billion to $1.645 billion 3% to 7%
-------------------------------------------------------------------
Diluted earnings $1.15 to $1.25 14% to 24% per share
-------------------------------------------------------------------
Conference Call SRA senior management will hold a conference call
to discuss these operating results and forward guidance today at
5:00 PM Eastern. Interested parties may listen to the conference
call by dialing 888-603-9073 (U.S./Canada) or 210-234-0078 (Other)
with passcode SRX. The conference call will be Webcast
simultaneously through a link on the SRA Web site
(http://www.sra.com/). A replay of the conference call will be
available approximately two hours after the conclusion of the call
through August 26, 2009 by dialing 866-373-9228 (U.S./Canada) or
203-369-0280 (Other) and entering passcode 9458. About SRA
International, Inc. SRA and its subsidiaries are dedicated to
solving complex problems of global significance for government
organizations serving the national security, civil government and
global health markets. Founded in 1978, the company and its
subsidiaries have expertise in such areas as air surveillance and
air traffic management; contract research organization (CRO)
services; cybersecurity; disaster response planning; enterprise
resource planning; environmental strategies; IT systems,
infrastructure and managed services; logistics; public health
preparedness; strategic management consulting; systems engineering;
and wireless integration. FORTUNE magazine has chosen SRA as one of
the "100 Best Companies to Work For" for ten consecutive years. The
company and its subsidiaries employ more than 6,900 employees
serving clients from headquarters in Fairfax, Va., and offices
around the world. 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. In addition, the
forward-looking statements included in this press release represent
our views as of August 12, 2009. 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
12, 2009. Consolidated Statements of Operations (Unaudited) (in
thousands, except share and per share amounts) Three Months Ended
Year Ended 30-Jun-09 30-Jun-08 30-Jun-09 30-Jun-08 ---------
--------- --------- --------- Revenue $401,950 $384,789 $1,540,556
$1,506,933 Operating costs and expenses: Cost of services 293,130
284,207 1,123,868 1,121,913 Selling, general and administrative
71,353 63,842 287,853 240,340 Depreciation and amortization 8,484
6,442 30,021 25,263 Gain on sale of Constella Futures Holding, LLC
- - (1,939) - Acquired in-process research and development - - 900
- -- -- --- -- Total operating costs and expenses 372,967 354,491
1,440,703 1,387,516 ------- ------- --------- --------- Operating
income 28,983 30,298 99,853 119,417 Interest expense (694) (1,072)
(5,526) (3,288) Interest income 431 887 2,283 4,261 Gain on sale of
Mantas, Inc. - 892 - 892 -- --- -- --- Income before taxes 28,720
31,005 96,610 121,282 Provision for income taxes 11,237 12,234
38,610 48,018 ------ ------ ------ ------ Net income $17,483
$18,771 $58,000 $73,264 ======= ======= ======= ======= Earnings
per share: Basic $0.31 $0.33 $1.03 $1.27 ===== ===== ===== =====
Diluted $0.30 $0.32 $1.01 $1.24 ===== ===== ===== =====
Weighted-average shares: Basic 56,331,705 57,463,961 56,315,718
57,566,645 ========== ========== ========== ========== Diluted
57,388,438 58,886,594 57,481,742 59,277,059 ========== ==========
========== ========== Consolidated Balance Sheets (Unaudited) (in
thousands) As of 30-Jun-09 30-Jun-08 --------- --------- Current
assets: Cash and cash equivalents $74,683 $229,260 Accounts
receivable, net 356,261 344,974 Inventories, net 6,786 - Prepaid
expenses and other 37,707 65,353 Deferred income taxes, current
13,924 11,544 ------ ------ Total current assets 489,361 651,131
------- ------- Property, plant and equipment, net 38,130 37,949
------ ------ Other assets: Goodwill 490,481 395,766 Identified
intangibles, net 43,235 36,813 Deferred income taxes, noncurrent
1,272 3,217 Deferred compensation trust 6,494 7,747 Other assets
25,320 3,892 ------ ----- Total other assets 566,802 447,435
------- ------- Total assets $1,094,293 $1,136,515 ==========
========== Current liabilities: Accounts payable and accrued
expenses $137,443 $163,927 Accrued payroll and employee benefits
111,296 99,742 Billings in excess of revenue recognized 16,598
15,111 Total current liabilities 265,337 278,780 ------- -------
Long-term liabilities: Long-term debt 75,000 150,000 Deferred
compensation liability 6,494 7,747 Other long-term liabilities
5,842 7,052 ----- ----- Total long-term liabilities 87,336 164,799
------ ------- Total liabilities 352,673 443,579 ------- -------
Stockholders' equity 741,620 692,936 ------- ------- Total
liabilities and stockholders' equity $1,094,293 $1,136,515
========== ========== Condensed Consolidated Statements of Cash
Flows (Unaudited) (in thousands) Year Ended 30-Jun-09 30-Jun-08
--------- --------- Cash flows from operations: Net income $58,000
$73,264 Adjustments to reconcile net income to net cash flow from
operations: Depreciation and amortization 30,021 25,263 Stock-based
compensation 10,660 10,148 Deferred income taxes 1,550 (738) Gain
on sales (1,939) (892) Loss on disposal of property and equipment -
788 Acquired in-process research and development 900 - Working
capital changes, net of the effect of acquisitions and divestitures
(8,556) (24,036) ------ ------- Net cash flow from operations
90,636 83,797 ------ ------ Cash flows from investing activities:
Capital expenditures (15,057) (10,763) Payments to Spectrum
Solutions Group, Inc. shareholders (9,396) - Acquisitions, net of
cash acquired (132,275) (189,714) Proceeds from sale of Constella
Futures Holding, LLC 14,320 - Proceeds from sale of Mantas, Inc. -
892 -- --- Net cash used in investing activities (142,408)
(199,585) -------- -------- Cash flows from financing activities:
Issuance of common stock 4,600 15,027 Excess tax benefit of stock
option exercises 1,075 4,667 Net repayments under short-term credit
facilities (9,910) - Borrowings under credit facility 75,000
230,000 Repayments under credit facility (150,000) (80,000) Payment
of financing costs - (1,081) Reissuance of treasury stock 399 679
Purchase of treasury stock (22,042) (36,278) ------- ------- Net
cash (used in) provided by financing activities (100,878) 133,014
-------- ------- Effect of exchange rate changes on cash and cash
equivalents (1,927) - ------- -- Net (decrease) increase in cash
and cash equivalents (154,577) 17,226 Cash and cash equivalents,
beginning of period 229,260 212,034 ------- ------- Cash and cash
equivalents, end of period $74,683 $229,260 ======= ========
Supplemental disclosures of cash flow information: Cash paid during
the period: Interest $5,761 $2,656 ====== ====== Income taxes
$36,451 $51,390 ======= ======= Cash received during the period:
Interest $2,643 $4,376 ====== ====== Income taxes $938 $961 ====
==== Reconciliation Between Total Revenue and Organic Revenue
(Unaudited) (in thousands) Organic revenue, as presented, is
computed by comparing our reported revenue for the current period
to revenue for the same period in the prior year adjusted to
include revenue of acquired businesses for the pre-acquisition
period of the prior year. In arriving at prior-year revenue, we
include the revenue of acquired companies and remove the revenue of
divested companies for the prior-year periods comparable to the
current-year periods for which the companies are included in our
reported revenue. The resulting rate is intended to represent our
organic, or non-acquisitive, growth or decline year-over-year,
including comparable period growth or decline attributable to
acquired companies. We believe that this non-GAAP financial measure
provides useful information because it allows investors to better
assess the underlying growth rate of our business, including the
post- acquisition activity of acquired companies. This non-GAAP
financial measure is not used for any other purpose and should not
be considered in isolation or as a substitute for measures of
performance prepared in accordance with GAAP. Three Months Ended
30-Jun-09 30-Jun-08 % Increase --------- --------- ---------- Total
Revenue, as reported $401,950 $384,789 4.5% Plus: Revenue from
acquired companies for the comparable prior year period 21,477
Less: Revenue from divested companies for the comparable prior year
period (17,857) ------- Organic Revenue $401,950 $388,409 3.5%
======== ======== === DATASOURCE: SRA International, Inc. CONTACT:
Dave Keffer, VP, Investor Relations of SRA, +1-703-502-7731, Web
Site: http://www.sra.com/
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