VIENNA, Va., Jan. 19 /PRNewswire/ -- GRC International's (NYSE: GRH)
announcement today of its second quarter financial results demonstrates that
it is successfully delivering on its goals of producing annual revenues of
$150 million and earnings before taxes of $6 million for fiscal 1999. These
successful results are based on the strategy of repositioning the company as a
prime contractor in all of its markets with an emphasis on the information
technology market.
Consolidated Second Quarter Financial Results
2Q -- 1999 2Q -- 1998 Delta Percent
(Rounded) Change
Revenues $39.1 million $29.7 million $9.3 million 31%
EBIT $ 2.2 million $ 1.2 million $1.0 million 87%
EBIT Margin 5.7% 4.0% 170 basis points
EBT $ 1.9 million $696,000 $1.2 million 172%
EBT Margin 4.8% 2.3% 250 basis points
Revenues for the second quarter ended December 31, 1998, were
$39.1 million, an increase of 31% over revenues of $29.7 million for the
second quarter of fiscal 1998. This improvement was driven primarily by
revenue derived from a new prime contract with the U.S. Army for which the
company is the overall integrator in a large logistics information systems
program.
Earnings before interest and taxes (EBIT) for the quarter were
$2.2 million, an increase of 87% over EBIT of $1.2 million for last year's
second quarter. With declining interest payments, the company's earnings
before taxes (EBT) rose 172% to $1.9 million from last year's $696,000.
Net income was $3.2 million, or $0.31 per share assuming full dilution,
for the second quarter ended Dec. 31, 1998. Net results included a
$1.2 million benefit for income taxes and a gain from discontinued operations,
net of taxes, of $140,000. This compares with net income of $2.5 million, or
$0.25 per share assuming full dilution, for the second quarter of the prior
year. Last year's net income included a $1.3 million benefit for income taxes
and a gain from discontinued operations, net of taxes, of $468,000.
"Today's results are a compelling, positive demonstration that our
on-going efforts to build a strong, preeminent, independent professional and
technical services company focused on the federal contract business can and
will allow us to successfully deliver higher revenues and improved
profitability," said GRC International President and CEO Dr. Gary Denman.
"We remain committed to the goals I outlined for the company in the annual
report:
-- "Double revenues in three years driven by internally generated revenue
growth of 10% to 20% per year and supported by very selective
acquisitions that are compatible with our current business;
-- "Achieve a 10% or greater improvement in operating margins --
year-to-year -- through greater operating efficiencies and more
effective management of our contract profits;
-- "Reposition GRCI as a prime contractor in all of our markets,
particularly the information technology market through aggressive
marketing to current and new federal customers and the leveraging of
our quality reputation in the marketplace.
"In fact, on a trailing 12-month basis, we are already delivering revenues
of $150 million, which is our goal for the current fiscal year. This also
puts the company in an excellent position to deliver the $6 million in
earnings before taxes that we are targeting for this year.
"For the longer term, the outlook also looks very bright," said
Dr. Denman. "Our maximum contract backlog continued growing during the
quarter, and surpassed $600 million. This is convincing evidence that our
emphasis on a strong, unified marketing effort is the correct strategy. By
pursuing and winning larger opportunities GRCI remains on course to generate
$260 million in revenues and EBIT margins approaching 6% by the end of
fiscal 2001."
Consolidated Six-Month Financial Results
For the first six months of the current fiscal year, GRCI reported
revenues of $75.8 million, an increase of 33% over the prior year's six month
revenues of $56.9 million. Earnings before interest and taxes rose 67% to
$4.3 million from $2.6 million last year. A decline in interest expense
contributed to a more than doubling of EBT to $3.7 million from $1.6 million
last year.
For the first six months of the fiscal 1999, the company reported net
income of $6.3 million, or $0.61 per share assuming full dilution. Net income
included a $194,000 gain, net of tax, from discontinued operations and a
$2.5 million tax benefit.
In the comparable six month period last year, the company reported net
income of $3.9 million, or $0.40 per share assuming full dilution. Net income
for the first half of last year included a $758,000 gain, net of tax, from
discontinued operations and a $1.6 million tax benefit.
GRC International Inc. is a professional services company that uses
advanced computer, engineering, and scientific technologies to help its
government and commercial customers fulfill their critical missions. Since
1961, GRCI has succeeded by providing analytical services and tools; designing
and integrating effective information systems; and developing innovative
technology-based solutions. GRC International is publicly traded on the
New York Stock Exchange under the symbol GRH. Details about the company can
be obtained on the Internet at http://www.grci.com/ and from Company News On-
Call at http://www.prnewswire.com/.
Forward-looking statements contained in this release are subject to risks
and uncertainties that could cause actual results to differ materially. These
risks and uncertainties include the company's dependence on continued funding
of U.S. Department of Defense (DoD) programs; government contract procurement
and termination risks; the company's ability to fill required staff positions
to service the contracts granted under the DoD programs; the risk that the
company will not be sufficiently prepared for the Y2K problem and/or that the
company may incur Y2K-related liabilities; and other risks described in the
company's Securities and Exchange Commission filings.
GRC INTERNATIONAL, INC.
Consolidated Condensed Statements of Income
(in thousands, except for per share data)
(unaudited)
Three Months Ended Six Months Ended
Dec. 31, Dec. 31,
1998 1997 1998 1997
Revenues $39,052 $29,705 $75,808 $56,870
Cost of services 32,896 24,479 63,860 46,639
Indirect costs and other costs 3,926 4,031 7,601 7,626
Operating income 2,230 1,195 4,347 2,605
Interest (expense), net (340) (499) (692) (1,027)
Income from continuing operations
before benefit for income taxes 1,890 696 3,655 1,578
Benefit for income taxes 1,210 1,331 2,475 1,585
Income from continuing operations 3,100 2,027 6,130 3,163
Gain from discontinued operations
(Net of tax) 140 468 194 758
Net Income $ 3,240 $ 2,495 $ 6,324 $ 3,921
Basic income per common share:
Continuing operations $ 0.31 $ 0.21 $ 0.60 $ 0.32
Discontinued operations $ 0.01 $ 0.05 $ 0.02 $ 0.08
Net income $ 0.32 $ 0.26 $ 0.62 $ 0.40
Number of shares used
in EPS calculation 10,222 9,777 10,218 9,704
Diluted income per common share:
Continuing operations $ 0.30 $ 0.20 $ 0.59 $ 0.32
Discontinued operations $ 0.01 $ 0.05 $ 0.02 $ 0.08
Net income $ 0.31 $ 0.25 $ 0.61 $ 0.40
Number of shares
used in EPS calculation 10,411 9,914 10,438 9,834
GRC INTERNATIONAL, INC.
Consolidated Balance Sheets
(Condensed and unaudited)
(in thousands)
Dec. 31, June 30,
1998 1998
Assets
Current assets* $40,358 $39,157
Property and equipment, net 8,844 9,569
Goodwill and other
intangible assets, net 2,115 2,176
Deferred software costs, net -- 349
Deferred taxes* 19,157 16,678
Other assets 3,340 3,334
-- --
Total assets $73,814 $71,263
Liabilities and stockholders' equity
Net liabilities of
discontinued operations $ 417 $ 297
Other current liabilities 17,364 20,084
Long-term debt 22,023 23,264
Other non-current liabilities 287 258
Stockholders' equity 33,723 27,360
Total liabilities and
stockholders' equity $73,814 $71,263
* Total deferred tax assets, current and long-term, amounted to
$20.5 million at Dec. 31, 1998 and $17.9 million at June 30, 1998.
SOURCE GRC International, Inc.
 back to top
Related links:
http://www.grci.com
Company News On-Call:
http://www.prnewswire.com/comp/320275.html or fax,
800-758-5804, ext. 320275
CONTACT:
Wayne Jackson, Director of Corporate
Communications of GRC International, 703-506-5038
|
