VIENNA, Va., Jan. 19 /PRNewswire/ -- GRC International (NYSE: GRH) today
announced financial results for the second quarter ended Dec. 31, 1999, the
first full quarter to include revenue and earnings contributions from
Management Consulting & Research Inc. (MCR).
For the second quarter of fiscal 2000, revenues were $50.7 million, a 30
percent improvement over the $39.1 million reported for the second quarter of
the prior year. Approximately two-thirds of the revenue increase is
attributable to a $7.9 million contribution from the acquired businesses of
MCR. The balance of the growth was generated by other government contracts of
GRCI, including its GCSS-Army program to modernize the U.S. Army's logistics
management information system.
Operating income for the second quarter of the current year was $3.0
million, after $800,000 in non-recurring costs for a disputed proxy contest
and legal expenses incurred to defend the company against two suits filed by a
single shareholder. Without these costs, operating income grew by 71 percent
to 7.5 percent of revenues. Last year, the company reported $2.2 million in
operating income, or 5.7 percent of revenues.
Net income for the second quarter ended Dec. 31, 1999, was $1.6 million,
or $0.13 per diluted share. This compares with net income of $3.2 million, or
$0.31 per diluted share, for the second quarter of the prior year, which
included a $1.2 million tax benefit.
"GRC International continues to grow revenues from a broad base of
contracts and its new businesses, profitability remains strong, and the
balance sheet is in excellent shape," said GRCI President and CEO Gary Denman.
"Our strategy to expand our penetration of the military logistics
information technology market received a major boost this quarter. GRCI is a
major part of the winning team awarded the U.S. Army Wholesale Logistics
Modernization Program (WLMP) contract. Commonly referred to as LOGMOD, this
combination firm-fixed-price and time-and-materials task order contract is
valued at approximately $680 million over 10 years for the six companies on
the winning team headed by Computer Sciences Corp. (NYSE: CSC). We will help
the U.S. Army modernize its logistics business processes at the wholesale
level, integrate those processes with the work we are doing with GCSS-Army at
the retail level, and develop the underlying information management systems.
We are very pleased to be partnered with Computer Sciences Corp. for this
important program.
"As we previously announced, we also were awarded a Federal Supply
Schedules contract vehicle for Professional Engineering Services (PES) by the
U.S. General Services Administration during the second quarter. With this
contract, federal agencies can rapidly retain our engineering professionals to
perform technical and statistical analyses; computer-aided design; engineering
and manufacturing work; project management; research and development;
economic/business case analysis; and design specifications development.
"I am very pleased with our operating results this quarter,
notwithstanding the one-time proxy and litigation costs, which reduced our
operating margins by one-and-a-half percentage points and earnings by $0.04
per share. Excluding these charges, our operating margin for the quarter would
have been 7.5 percent, rather than the 6 percent we are reporting," Denman
said.
CONSOLIDATED SIX-MONTH FINANCIAL RESULTS
Revenues for the first half of the year improved 27 percent to $ 96.5
million, from $75.8 million for the first six months of the prior year.
Approximately half of the current year-to-date revenue improvement was from
the acquired MCR businesses.
Operating income for the first six months of the current year was $7.2
million compared to $4.3 million for the same period last year. For the first
half of this year, operating income included $920,000 from the favorable
resolution of prior year contract audits and settlement of a contract claim,
which was substantially offset by the non-recurring proxy and litigation
charges. The operating margin percentage for the first half of the year was
7.5 percent compared to 5.7 percent last year.
Net income for the six-month period ended Dec. 31, 1999, was $4.0 million,
or $0.33 per diluted share. This compares with net income of $6.3 million, or
$0.61 per diluted share, for the first six months of the prior year, which
included $2.5 million of income tax benefits.
Denman concluded, "Operationally, we continue to exceed our operating
margin goals and I am very pleased with our 7.5 percent operating margin for
the first six months. This substantially exceeds our goal of improving
operating margins by 10 percent per year and we are well on our way to
achieving our goals of $260 million in revenues by fiscal 2001."
GRC International Inc., headquartered in Vienna, Va., is a leading
provider of professional services focusing on information technology,
management consulting, and scientific engineering for a national clientele in
the government and commercial sectors. GRCI is a publicly traded company
listed on the New York Stock Exchange under the symbol GRH. Additional details
about GRC International can be obtained on the Internet at
http://www.grci.com/. Details concerning MCR can be viewed at
http://www.mcri.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 programs and the company's ability to fill
required staff positions to service the contracts granted under those
programs; government contract procurement and termination risks; and other
risks described in the company's Securities and Exchange Commission filings.
GRCI press releases are available on the Internet through Company News On-
Call at http://www.prnewswire.com/.
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,
1999 1998 1999 1998
Revenues $50,693 $39,052 $96,514 $75,808
Cost of services 41,484 32,896 78,476 63,860
Indirect costs and
other costs 6,185 3,926 10,841 7,601
Operating income 3,024 2,230 7,197 4,347
Interest (expense), net (275) (340) (505) (692)
Income from continuing
operations before
benefit for income
taxes 2,749 1,890 6,692 3,655
income tax (provision)
benefit (1,105) 1,210 (2,690) 2,475
Income from continuing
operations 1,644 3,100 4,002 6,130
Gain from discontinued
operations
(Net of tax) - 140 - 194
Net Income $ 1,644 $ 3,240 $ 4,002 $ 6,324
===== ====== ===== ======
Basic income per
common share:
Continuing operations $0.13 $0.31 $0.34 $0.60
====== ====== ====== ======
Discontinued
operations $- $0.01 $- $0.02
====== ====== ====== ======
Net income $0.13 $0.32 $0.34 $0.62
====== ====== ====== ======
Number of shares
used in EPS
calculation 12,377 10,222 11,668 10,218
Diluted income per
common share:
Continuing operations $0.13 $0.30 $0.33 $0.59
====== ====== ====== ======
Discontinued
operations $- $0.01 $- $0.02
====== ====== ====== ======
Net income $0.13 $0.31 $0.33 $0.61
====== ====== ====== ======
Number of shares used
in EPS calculation 12,974 10,411 12,180 10,438
Consolidated Balance Sheets
(Condensed and unaudited)
(in thousands)
Dec. 31, June 30,
1999 1999
Assets
Current assets $54,313 $48,182
Property and equipment, net 9,973 9,095
Goodwill and other
intangible assets, net 22,594 1,989
Deferred taxes, non-current 13,967 15,428
Other assets 1,545 1,387
------- ------
Total assets $102,392 $76,081
======= ======
Liabilities and stockholders' equity
Current liabilities $23,229 $23,100
Long-term debt 15,889 12,623
Other non-current liabilities 1,230 299
Stockholders' equity 62,044 40,059
------- ------
Total liabilities and
stockholders' equity $102,392 $76,081
======= ======
SOURCE GRC International
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Related links:
http://www.grci.com
http://www.mcri.com
Company News On-Call:
http://www.prnewswire.com/comp/320275.html or fax,
800-758-5804, ext. 320275
CONTACT:
James Allen, CFO, 703-506-5574, or Wayne
Jackson, Director, Corporate Communications, 703-506-5038, both
of GRC International
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