FAIRFAX, Va., Nov. 7 /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 first quarter of fiscal year 2008, which ended September 30, 2007 .
Revenue for the quarter was
These first quarter financial results include the effect of the Constella
Group acquisition as of August 9, 2007 . Constella contributed about
SRA President and CEO Stan Sloane said, "We're pleased to see solid returns on our marketing and sales investments. Despite the challenging market conditions, we've bolstered our backlog with a number of valuable wins, and we've continued to devote more resources to the next wave of bid opportunities."
CFO and Executive Vice President for Operations Stephen Hughes added, "One of the tenets of our strategic plan is to drive G&A cost efficiencies to increase our investment in business and employee development and to expand margins, and we were highly successful on those fronts in the quarter. Cash flows were also strong as we held Days Sales Outstanding to 69 days, equaling our best figure to date."
New Business Awards
The Company won new business in the first quarter with potential value of
SRA was also awarded several multiple-award, indefinite delivery,
indefinite quantity (ID/IQ) contracts in the September quarter. ID/IQ wins
are not included in the Company's quarterly bookings figure, but they provide
a solid foundation for future growth. The largest ID/IQ that the Company won
in the September quarter was Alliant, a General Services Administration
contract vehicle with a
Forward Guidance
SRA is providing forward guidance for the second 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 this table does not include any effect for acquisitions SRA might make in the future.
Measure Quarter Ending Fiscal Year Ending December 31, 2007 June 30, 2008 Revenue (in millions) $370-$380 $1,500-$1,560 Diluted EPS At least $0.28 $1.20-$1.26 Diluted Share Equivalents (in millions) 59.6 59.8Conference 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 19411259. The conference call will be Webcast simultaneously through a link on the SRA Web site (www.sra.com). A replay of the conference call will be available approximately two hours after the conclusion of the call through November 21, 2007 by dialing (800) 642-1687 (U.S./Canada) or (706) 645-9291 (Other) and entering passcode 19411259.
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 6,300 employees serve clients from its headquarters in Fairfax, Virginia, and offices around the world. For additional information on SRA, please visit www.sra.com.
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-K filed with the Securities and Exchange Commission on August 16, 2007 . In addition, the forward-looking statements included in this press release represent our views as of November 7, 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 November 7, 2007 .
Condensed Consolidated Statements of Operations (Unaudited) (in thousands, except share and per share amounts) Three Months Ended 30-Sep-07 30-Sep-06 Revenue $364,127 $304,034 Operating costs and expenses: Cost of services 274,969 228,059 Selling, general and administrative 53,118 48,404 Depreciation and amortization 6,167 4,740 Total operating costs and expenses 334,254 281,203 Operating income 29,873 22,831 Interest expense (853) (10) Interest income 1,599 1,853 Income before taxes 30,619 24,674 Provision for income taxes 12,160 9,553 Net income $18,459 $15,121 Earnings per share: Basic $0.32 $0.27 Diluted $0.31 $0.26 Weighted-average shares: Basic 57,287,034 55,981,631 Diluted 59,152,948 57,964,502 Condensed Consolidated Balance Sheets (Unaudited) (in thousands) As of 9/30/07 6/30/07 Current assets: Cash and cash equivalents $103,070 $212,034 Restricted funds 855 - Short-term investments 85 85 Accounts receivable, net 321,819 262,409 Prepaid expenses and other 27,538 26,285 Deferred income taxes, current 11,174 5,860 Total current assets 464,541 506,673 Property and equipment, net 41,385 36,685 Other assets: Goodwill 387,484 256,530 Identified intangibles, net 44,372 30,849 Deferred income taxes, noncurrent 6,947 8,163 Deferred compensation trust 8,588 8,784 Other assets 10,714 - Total other assets 458,105 304,326 Total assets $964,031 $847,684 Current liabilities: Accounts payable and accrued expenses $135,485 $110,897 Accrued payroll and employee benefits 81,447 81,711 Billings in excess of revenue recognized 17,993 16,980 Total current liabilities 234,925 209,588 Long-term liabilities: Long-term debt 50,000 - Other long-term liabilities 25,641 12,641 Total long-term liabilities 75,641 12,641 Total liabilities 310,566 222,229 Stockholders' equity 653,465 625,455 Total liabilities and stockholders' equity $964,031 $847,684 Condensed Consolidated Statements of Cash Flows (Unaudited) (in thousands) Three Months Ended 9/30/07 9/30/06 Cash flows from operating activities: Net income $18,459 $15,121 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 6,167 4,740 Stock-based compensation 2,183 3,275 Deferred income taxes (4,098) (550) Working capital changes, net of the effect of acquisitions (1,203) 22,135 Net cash provided by operating activities 21,508 44,721 Cash flows from investing activities: Capital expenditures (1,794) (3,652) Sales and maturities of investments - 4,922 Acquisition of Constella Group, LLC, net of cash acquired (185,812) - Net cash (used in) provided by investing activities (187,606) 1,270 Cash flows from financing activities: Issuance of common stock 6,134 1,689 Tax benefits of stock option exercises 1,462 895 Borrowings (repayments) under credit facility, net of associated financing costs 49,676 - Purchase of treasury stock (138) - Net cash provided by financing activities 57,134 2,584 Net (decrease) increase in cash and cash equivalents (108,964) 48,575 Cash and cash equivalents, beginning of period 212,034 173,564 Cash and cash equivalents, end of period $103,070 $222,139 Supplemental disclosures of cash flow information: Cash paid during the period: Interest $400 $10 Income taxes $7,989 $7,221 Cash received during the period: Interest $1,769 $1,616 Income taxes $84 $314 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 9/30/07 9/30/06 % Increase Total Revenue, as reported $364,127 $304,034 19.8% Plus: Revenue from acquired companies for the comparable prior year period - 40,826 Organic Revenue $364,127 $344,860 5.6%SOURCE SRA International, Inc.
