SRA Announces Financial Results for Third Quarter of Fiscal Year 2008

FAIRFAX, Va. , May 6 /PRNewswire-FirstCall/ -- SRA International, Inc. (NYSE: SRX), a leading provider of technology and strategic consulting services and solutions to government organizations, today announced operating results for the third quarter of fiscal year 2008, which ended March 31, 2008 .

Revenue for the quarter was $376.0 million, up 18% from $317.6 million in the March 2007 quarter. Operating income for the quarter was $29.6 million, for an operating margin of 7.9%. Net income was $18.0 million, for a net margin of 4.8%. Diluted earnings per share for the quarter were $0.30, up $0.04 year-over-year.

SRA President and CEO Stan Sloane said, "We were pleased to win nearly three times the volume of contract awards that we won in the same quarter last year. Some of these programs will take time to ramp up because of protested award decisions, but they are a positive indicator for future growth."

"We're also enthusiastic about our agreement to acquire Era Corporation, which we announced last week. Era fits nicely into our plan to increase the product-based component of our business and continue to expand our international footprint. We look forward to completing the transaction and joining forces with an air surveillance market leader."

CFO and Executive Vice President for Operations Steve Hughes added, "Third quarter revenue grew 18% year-over-year, while the low-margin rebillable component declined as planned. This improvement in the business mix led to better operating margins. Operating margin increased to 7.9% in the quarter, 70 basis points better than a year ago."

New Business Awards

The Company won new business in the third quarter with potential value of $503 million, if all options are exercised. As of March 31, 2008 , the Company's backlog of signed business orders was $3.9 billion, an increase of 11% year-over-year.

The Company was also awarded several multiple-award, indefinite delivery/indefinite quantity (ID/IQ) contracts in the March quarter. ID/IQ vehicles are not included in the Company's quarterly bookings total, but they provide a solid foundation for future growth.

Share Repurchase

In accordance with a repurchase authority established by its Board of Directors in 2007, SRA executed an open market share buyback during the March quarter. The Company repurchased about 754,000 shares of its stock in the quarter, deploying a total of $17.3 million in cash. The average share price for repurchased shares was $22.91. Although the Company's acquisition program remains its top priority for capital deployment, management may elect to continue opportunistic use of its repurchase authority in the future.

Forward Guidance

The Company is updating its forward guidance for the fourth quarter and full 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 this table does not include any effect for the pending acquisition of Era Corporation or any acquisitions SRA might make in the future.

The updated revenue guidance is lower than previously issued guidance primarily because of a reduced direct material revenue forecast. Given the consistent June quarter Diluted EPS range, the implied profit margins are higher in this revised guidance. These changes are consistent with the higher labor services component of revenue in the latest forecast.

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 888-287-9905 (U.S./ Canada ) or 706-643-7540 (Other) with passcode 42439207. The conference call will be Webcast simultaneously through a link on the SRA Web site ( A replay of the conference call will be available approximately two hours after the conclusion of the call from May 6 through May 20, 2008 by dialing 800-642-1687 (U.S./ Canada ) or 706-645-9291 (Other) and entering passcode 42439207.

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 nine consecutive years. The Company's 6,400 employees serve clients from its headquarters in Fairfax, Virginia , and offices around the world. For additional information on SRA, please visit

Any statements in this press release about future expectations, plans, and prospects for SRA, including guidance about future financial results and statements about the estimated value of 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 February 7, 2008 . In addition, the forward-looking statements included in this press release represent our views as of May 6, 2008 . 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 May 6, 2008 .

SOURCE SRA International, Inc.