VIENNA, Va., July 30 /PRNewswire/ -- GRC International (NYSE: GRH) today
announced its first return to full-year profitability since fiscal 1995 with
net income of $11.5 million on an 11.3% gain in revenues. GRC International
President and CEO Gary Denman commented that the results mark the successful
adoption of the company's new strategy following its restructuring last year.
Full Year Results
Revenues for the fiscal year, ended June 30, 1998, were $130.9 million
compared with revenues of $117.6 million last year. Net income for the year
was $11.5 million, compared with a net loss of $17.8 million last year.
This year's results included net interest expense of $1.9 million,
$758,000 in income from discontinued operations, and a $7.2 million tax
benefit. Last year's results included net interest expense of $1.3 million,
$31.6 million in losses from discontinued operations, and a tax benefit of
$10.6 million.
Earnings from continuing operations before interest and tax benefits
(EBIT) were $5.4 million for the year, a 16.9% increase over the prior year
EBIT of $4.6 million. EBIT margins improved this year to 4.1% from 3.9% the
prior year.
"GRC International had a very good year and it ended on rising momentum,"
said Dr. Denman. "We won a number of important new contracts this year,
including an effort to modernize the Army's logistics system, two system
testing contracts for commercial clients, and information technology-related
tasks for a new class of Navy ships. The result of these and other contract
wins helped push a 20% increase in maximum contract backlog, an 11% increase
in revenues and a 17% rise in operating income. We also made excellent
progress in de-leveraging the company as we reduced debt (net of cash) by more
than 20%. These positive results are a direct consequence of the actions we
implemented over the past 18 months to focus on our core business."
Fourth Quarter Results
Revenues for the fourth quarter ended June 30, 1998, were $38.8 million, a
24% increase over the $31.3 million reported for the corresponding quarter
last year. The company reported EBIT from continuing operations of $1.3
million, compared with $1.5 million in the prior year period.
The reduction in operating margins for the fourth quarter was primarily
the result of charges related to contracts completed in prior years. Excluding
these charges, fourth quarter earnings from continuing operations before
interest and taxes would have been $1.6 million, an improvement of
approximately 10% over the prior year period.
Net income for the quarter was $4.0 million, after net interest expense of
$414,000 and a $3.1 million tax benefit. For the fourth quarter of last year,
the company reported net income of $3.5 million after net interest expense of
$421,000, and a $2.4 million tax benefit.
Management Discussion
Commenting further on the company's results, Dr. Denman said, "We are
benefiting from a rising demand for information technology services,
outsourcing initiatives in the federal government, a continuing demand for our
engineering services, and a focused marketing effort at all levels of the
company. We believe these catalysts will continue to drive our momentum. For
the new year, our goal is to generate internal revenue growth of between 10%
and 20%. We are targeting a growth in earnings before interest and taxes of
20% to 25% with margins approaching the 5% range by the end of fiscal 1999.
"Our balance sheet will also continue to show improvement. We ended the
year with approximately $20.6 million in funded debt (net of cash), down from
$26.5 million last year. By the close of fiscal 1999, we believe we will have
reduced debt to approximately $15 million. As debt comes down, we will see a
corresponding drop in interest expense. We expect that we will be able to
lower our debt-to-capitalization rate from 67% at the end of fiscal 1997 to
27% by the end of fiscal 1999."
Denman concluded, "GRC International is well positioned to retain and
expand its business with existing customers in the Department of Defense,
military, and intelligence communities; win new customers in other federal
military and civil agencies; and expand into contiguous commercial markets.
Our objective is to continue to grow GRCI as a premiere, independent
professional and technical services company, differentiated by our quality of
work, innovation, and customer satisfaction."
GRC International's fourth quarter 1998 earnings conference call will be
conducted on Thursday July 30, 1998, at 9 a.m. EDT. You may participate in the
conference call by dialing 888-323-2718 approximately five minutes before the
conference call is scheduled to begin. The conference call password is
"DENMAN."
GRC International Inc., with headquarters in Vienna, Va., is a
professional services company that uses advanced computer, engineering, and
scientific technologies to help its government and commercial customers
fulfill their critical missions. Over its 37-year history, GRCI has succeeded
by providing analytical services and tools; designing and integrating
effective information systems; and developing innovative technology-based
solutions. GRC International is a publicly traded company listed on the New
York Stock Exchange under the symbol GRH. Additional details about the company
can be obtained on the Internet at http://www.grci.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.
-TABLES FOLLOW-
Consolidated Condensed Statements of Income
(in thousands, except for per share data)
(unaudited)
Three Months Ended Twelve Months Ended
June 30, June 30,
1998 1997 1998 1997
Revenues $38,750 $31,251 $130,927 $117,599
Cost of services 34,291 25,020 110,477 96,123
Indirect costs and other costs 3,142 4,741 15,048 16,854
Operating income 1,317 1,490 5,402 4,622
Interest (expense), net (414) (421) (1,866) (1,343)
Income from continuing operations
before benefit for income taxes 903 1,069 3,536 3,279
Benefit for income taxes 3,088 2,382 7,166 10,582
Income from continuing operations 3,991 3,451 10,702 13,861
Gain (loss) from discontinued
operations (Net of tax) -- -- 758 (31,611)
Net Income (Loss) $ 3,991 $ 3,451 $11,460 $(17,750)
Basic income (loss)
per common share:
Continuing operations $0.39 $0.37 $1.09 $1.48
Discontinued operations $-- $-- $0.08 $ (3.39)
Net income (loss) $ 0.39 $0.37 $1.16 $(1.90)
Number of shares used in EPS
calculation 10,140 9,359 9,838 9,338
Diluted income (loss)
per common share:
Continuing operations $0.38 $0.37 $1.07 $1.45
Discontinued operations $-- $-- $0.07 $ (3.21)
Net income (loss) $0.38 $0.37 $1.14 $ (1.76)
Number of shares used in EPS
calculation 10,386 10,163 10,254 9,843
Consolidated Balance Sheets
(Condensed and unaudited)
(in thousands)
June 30, June 30,
1998 1997
Assets
Current assets* $39,157 $39,271
Property and equipment, net 9,569 10,553
Goodwill and other
intangible assets, net 2,176 2,409
Deferred software costs, net 349 461
Deferred taxes* 16,678 8,896
Other assets 3,334 4,374
Total assets $71,263 $65,964
Liabilities and stockholders' equity
Net liabilities of
discontinued operations $297 $ 4,591
Other current liabilities 20,084 18,812
Long-term debt 23,256 28,153
Other non-current liabilities 266 1,332
Stockholders' equity 27,360 13,076
Total liabilities and
stockholders' equity $71,263 $65,964
* Total deferred tax assets, current and long-term, amounted to $17.9
million at June 30, 1998, and $11.6 million at June 30, 1997.
SOURCE GRC International
 back to top
Related links:
http://www.grci.com
Company News On-Call: http://www.prnewswire.com or
fax, 800-758-5804, ext. 320275
CONTACT:
Wayne Jackson, Director, Corporate
Communications of GRC International, 703-506-5038
|
