VIENNA, Va., Oct. 19 /PRNewswire/ -- GRC International (NYSE: GRH) today
reported its seventh consecutive quarter of year-to-year double-digit revenue
growth and its fifth consecutive quarter of year-to-year operating income
improvement of 50 percent or more.
For the first quarter ended September 30, 1999, revenues were up 25
percent to $45.8 million, compared to revenues of $36.8 million for the first
quarter of last year. Current quarter revenues included a $2.5 million
contribution by GRCI subsidiary Management Consulting & Research Inc., which
was acquired on September 2, 1999, as one element of management's long-term
growth strategy for the company. Excluding the MCR contribution, revenues
increased 18 percent year-to-year from a broad base of contracts, further
demonstrating the company's fundamental strength.
"GRCI's continuing strong revenue growth, which is now being supplemented
by our recent acquisition of MCR, unquestionably demonstrates we are on the
right course to continue building additional shareholder value," said
President and CEO Gary Denman. "Our three-part revenue enhancement strategy to
grow revenues from existing customers, capture new customers, and add to
revenues through selective, accretive acquisitions is clearly delivering
positive results."
Operating income for the first quarter of the current year doubled to $4.2
million compared to $2.1 million for the same quarter last year. The operating
margin percentage for the current quarter rose sharply to 9.1 percent from 5.8
percent last year. Current quarter operating income includes $920,000 from the
favorable resolution of prior year contract audits and settlement of a
contract claim. Excluding these benefits, operating income would have risen 57
percent to $3.3 million with an operating margin of 7.1 percent, both of which
are significantly above goals set by management.
Income from continuing operations before taxes for the quarter was up 123
percent to $3.9 million from $1.8 million last year.
Net income for the first quarter of the current year was $2.4 million, or
$0.21 per diluted share. This includes a $1.6 million tax provision. Last
year, the company reported first quarter net income of $3.1 million, or $0.30
per diluted share. Those results included a $1.3 million net tax benefit
related to the recognition of prior year tax net operating loss carryforwards.
Management Discussion
"Revenue growth is only one component of our improvement strategy for
GRCI," said Denman. "We understand that sustainable value requires strong
margin improvement and growing cash flows in addition to top line revenue
growth. I am pleased to report we are delivering on all three parts of our
plan. The basis for the significant increase in recurring margins this quarter
is two fold. We are managing and controlling our indirect costs more closely
and we are placing greater emphasis on profit performance for our time-and-
materials contracts, which now account for approximately 60 percent of our
business.
"The margin improvement we are reporting this quarter goes well beyond our
stated goal of increasing pre-tax margin by 10 percent year-over-year," said
Denman. "We continue to build measurable value at GRCI and plan to continue
doing so for the foreseeable future.
"We also have continued to make excellent progress on our balance sheet,"
said Denman. "Even during a quarter when we used a portion of our credit line
to acquire MCR, we ended the quarter with only $16.5 million in long-term
debt, down substantially from one year ago when long-term debt stood at $23.8
million. This is further proof that we can execute our acquisition strategy,
sustain growth and profitability, and maintain healthy ratios on the balance
sheet. These are excellent results, top to bottom.
"Performance from our growth and profitability improvement plan continues
to exceed all expectations. These results reported on the heels of the strong
performance we have delivered over past seven quarters demonstrate that our
new management team has put the company's poor performance behind it. I look
forward to continue implementing our plan."
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.
GRC International, Inc.
Consolidated Condensed Statements of Income
(in thousands, except for per share data)
(unaudited)
Three Months Ended
September 30,
1999 1998
Revenues $45,821 $36,756
Cost of services 36,992 30,964
Indirect costs and other costs 4,656 3,675
Operating income 4,173 2,117
Interest expense, net (230) (352)
Income from continuing operations before
income tax benefit (provision) 3,943 1,765
Income tax benefit (provision) (1,585) 1,265
Income from continuing operations 2,358 3,030
Gain from discontinued operations
(Net of tax) - 54
Net Income $ 2,358 $ 3,084
Basic income per common share:
Continuing operations $ 0.22 $ 0.29
Discontinued operations - 0.01
Net income $ 0.22 $ 0.30
Number of shares used in EPS calculation 10,959 10,214
Diluted income per common share:
Continuing operations $ 0.21 $ 0.29
Discontinued operations - 0.01
Net income $ 0.21 $ 0.30
Number of shares used in EPS calculation 11,418 10,386
Consolidated Balance Sheets
(Condensed and unaudited)
(in thousands)
September 30, June 30,
1999 1999
Assets
Current assets $53,864 $48,182
Property and equipment, net 9,689 9,095
Goodwill and other
intangible assets, net 22,715 1,989
Deferred taxes 15,070 15,428
Other assets 2,104 1,387
Total assets $103,442 $76,081
Liabilities and stockholders' equity
Current liabilities $25,827 $23,100
Long-term debt 16,500 12,623
Other non-current liabilities 1,444 299
Stockholders' equity 59,671 40,059
Total liabilities and
stockholders' equity $103,442 $76,081
SOURCE GRC International
 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:
James Allen, CFO, 703-506-5574, or Wayne
Jackson, Director, Corporate Communications, 703-506-5038, both
of GRC International
NOTE TO EDITORS: GRCI press releases are available on the
Internet through Company News On-Call at
http://www.prnewswire.com
|
