Highlights: Record revenues of $227.0 million, up 12%, all
organic(1); Diluted EPS of $0.49; Third-quarter bookings total $357
million; Company raises Fiscal Year 2010 revenue and earnings
guidance. ARLINGTON, Va., Jan. 28 /PRNewswire-FirstCall/ --
Stanley, Inc. (NYSE: SXE), a leading provider of systems
integration and professional services to the U.S. federal
government, today announced record revenues for its third quarter
ended December 25, 2009. (Logo:
http://www.newscom.com/cgi-bin/prnh/20040106/DCTU010LOGO )
Third-quarter revenues exceeded the high end of management's
guidance by $8 million, and diluted EPS exceeded the high end of
guidance by $0.01. Stanley's revenue growth in the third quarter of
fiscal year 2010 was attributed to increased cybersecurity and IT
infrastructure protection programs for the Defense Information
Systems Agency (DISA); IT support services for the U.S. Marine
Corps (USMC); military intelligence training and operations support
for the U.S. Army; biometrics software development, training and
support; additional task orders under the FIRST
indefinite-delivery, indefinite-quantity contract; and added
production and engineering services performed for the Navy's Space
and Naval Warfare Systems Command. Third Quarter Fiscal Year 2010
Results: Revenues for the third quarter ended December 25, 2009,
all organic, were $227.0 million, an increase of 12 percent over
third-quarter fiscal year 2009 revenues of $203.6 million.
EBITDA(2) was $22.9 million for the quarter, an increase of 13
percent over EBITDA of $20.3 million in the third quarter of last
fiscal year, due primarily to increased year-over-year revenues,
and to a lesser extent, higher EBITDA margin. EBITDA margin for the
third quarter was 10.1 percent compared with 10.0 percent in the
third quarter of last fiscal year. Operating income was $20.0
million, up 14 percent from $17.5 million in the same quarter of
last fiscal year. Operating margin was 8.8 percent versus 8.6
percent in the third quarter of last fiscal year. Net income for
the quarter was $11.8 million versus $9.7 million for the third
quarter of last fiscal year, an increase of 22 percent. Diluted
earnings per share for the quarter were $0.49 compared with diluted
earnings per share of $0.41 for the third quarter of last fiscal
year. Contract backlog at December 25, 2009, was $2.1 billion, up
from second quarter of fiscal year 2010 contract backlog of $2.0
billion at September 25, 2009, and essentially unchanged from
third-quarter fiscal year 2009 contract backlog of $2.1 billion at
December 26, 2008. Third Quarter Fiscal Year 2010 Operational
Highlights: -- Third-quarter net bookings totaled $357 million,
equating to a book-to-bill ratio of 1.6:1. -- Among new business
awards and additional tasking in the third quarter: -- A $117
million, five-year contract with the Army Sustainment Command to
continue Stanley's support of the Integrated Material Management
Operations System, formerly known as the Army War Reserve
Deployment System, or AWRDS; -- A $55 million, five-year,
firm-fixed-price contract with the U.S. Army to provide financial
management support services to the U.S. Army Central Command
(USARCENT) in theater; -- A $49 million, five-year,
firm-fixed-price contract, awarded under the company's ENCORE II
vehicle, with DISA to provide cybersecurity services to the
Connection Approval Division; -- A $30 million, five-year,
firm-fixed-price contract with the U.S. Army to provide operational
logistics support services to the USARCENT G4/G1 in theater; -- A
$23 million, five-year, firm-fixed-price contract, awarded under
the company's ENCORE II vehicle, with DISA to provide a
cybersecurity solution for web content filtering; -- An estimated
$18 million, five-year blanket purchase agreement, with options, to
provide document processing services in support of the Office of
Personnel Management; -- A $13 million, five-year,
time-and-materials contract with the U.S. Marshals Service to
sustain support and expand capabilities of the Justice Detainee
Information System; and -- A $12 million, five-year,
firm-fixed-price contract with the USMC to support and maintain the
Total Information Gateway for Enterprise Resources web portal.
Nine-Month Fiscal Year 2010 Results: For the nine months ended
December 25, 2009, revenues increased 15 percent, 9 percent of
which was organic, to $652.9 million, compared with $567.2 million
for the same period in the prior fiscal year. EBITDA for the
nine-month period ended December 25, 2009, increased 22 percent to
$67.6 million compared with $55.4 million for the same period in
the prior fiscal year, due primarily to increased year-over-year
revenues, and to a lesser extent, higher EBITDA margin. EBITDA
margin for the first nine months of fiscal year 2010 was 10.4
percent, up from 9.8 percent for the same period in the prior
fiscal year. EBITDA margin increased primarily as a result of
improved performance on contracts and a greater proportion of more
profitable fixed-price contracts, as well as continued efficiencies
realized in the company's general and administrative infrastructure
on a higher revenue base. Operating income for the first nine
months of fiscal year 2010 was $59.1 million, an increase of 23
percent over operating income of $48.1 million reported a year
earlier. Operating margin for the first nine months of fiscal year
2010 was 9.0 percent compared with 8.5 percent in the first nine
months of fiscal year 2009. Operating income and margin increased
year over year, primarily as a result of the factors improving
EBITDA and EBITDA margin. Net income for the first nine months of
fiscal year 2010 was $34.3 million, up 28 percent over net income
for the same period last fiscal year of $26.7 million. Diluted
earnings per share for the first nine months of fiscal year 2010
were $1.42 compared with diluted earnings per share of $1.12 for
the first nine months of fiscal year 2009. Cash flow from
operations for the first nine months of fiscal year 2010 was $34.3
million. Capital expenditures for the first nine months of fiscal
year 2010 were $3.4 million. Days sales outstanding (DSO) for the
third quarter was 76 days, down from 79 days for the second quarter
of fiscal year 2010. "Stanley delivered record revenues and
outstanding year-over-year earnings growth in the third quarter of
fiscal year 2010," said Phil Nolan, Stanley's chairman, president
and CEO. "Healthy bookings in the third quarter, as well as
potential new awards in the next three to six months, should help
provide solid near-term growth in a challenging federal procurement
environment." Management's Outlook: Based on the company's current
contract backlog and management's estimate as to future tasking and
contract awards, Stanley is issuing guidance for its fiscal year
2010 fourth quarter and updating guidance for its full fiscal year
2010. The table below represents management's current expectations
about future financial performance, based on information available
at this time: Fourth Quarter Fiscal Year 2010 Fiscal Year 2010
Ending Ending March 31, 2010 March 31, 2010 Revenues $215 - $223
million $868 - $876 million Diluted EPS $0.46 - $0.48 $1.87 - $1.89
Diluted projected share count 24.1 - 24.2 million 24.1 - 24.2
million As previously announced, Stanley will conduct a conference
call today at 5:00 p.m. EST to discuss fiscal third quarter 2010
results. Analysts and institutional investors may access the call
by dialing (888) 680-0890 (U.S.) or (617) 213-4857 (international)
and entering passcode 15874542. All other investors may access the
call via the Investor Relations page of the company's website at
http://www.stanleyassociates.com/. Investors are advised to log on
to the website at least 15 minutes prior to the call to register,
download and install any necessary audio software. An archive of
the webcast will be available for two weeks following the live
event. The replay will also be available through February 11, 2010,
at (888) 286-8010 (U.S.) or (617) 801-6888 (international) with a
passcode of 29753863. About Stanley Stanley (NYSE:SXE) is a
provider of information technology services and solutions to U.S.
defense, intelligence and federal civilian government agencies.
Stanley offers its customers systems integration solutions and
expertise to support their mission-essential needs at any stage of
program, product development or business lifecycle through five
service areas: systems engineering, enterprise integration,
operational support, business process management, and advanced
engineering and technology. Headquartered in Arlington, Va., the
company has approximately 5,000 employees at over 100 locations in
the U.S. and worldwide. Stanley has been recognized by FORTUNE
magazine as one of the "100 Best Companies to Work For" from 2007
through 2009. Please visit http://www.stanleyassociates.com/ for
more information. Any statements in this press release about our
future expectations, plans and prospects, including statements
containing the words "estimates," "anticipates," "plans," "expects"
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 discussed in our Annual Report on Form 10-K for the fiscal
year ended March 31, 2009, as filed with the Securities and
Exchange Commission (SEC), and additional filings we make with the
SEC. In addition, the forward-looking statements included in this
press release represent our views as of the date of this release.
We assume no obligation to update publicly or revise any
forward-looking statements made herein or any other forward-looking
statements made by us, whether as a result of new information,
future events or otherwise. (1) Organic revenue growth, as
presented, measures revenue growth adjusted for the impact of
acquisitions. Stanley believes that this non-GAAP financial measure
provides useful information because it allows management and
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. Please see the
reconciliation table at the end of this release that reconciles
GAAP revenue to organic revenue. (2) EBITDA is a non-GAAP measure
that is defined as GAAP net income (loss) plus other expense
(income), interest expense, income taxes, and depreciation and
amortization. We believe EBITDA is useful to investors because it
is one of the measures used by our board of directors and
management to evaluate our business and we believe it is a commonly
used measure of financial performance in comparable companies and
is provided to help investors evaluate companies on a consistent
basis, as well as to enhance an understanding of our operating
results. EBITDA should not be construed as either an alternative to
net income as an indicator of our operating performance or as an
alternative to cash flows as a measure of liquidity. Please refer
to the table at the end of this release that reconciles GAAP net
income to EBITDA. Condensed Consolidated Statements of Income
(unaudited) (in thousands, except per share amounts) Three Months
Nine Months Ended Ended ------------ ----------- December December
December December 25, 26, 25, 26, 2009 2008 2009 2008 ---- ----
---- ---- Revenues $227,022 $203,597 $652,857 $567,242 --------
-------- -------- -------- Operating costs and expenses: Cost of
revenues 190,320 170,091 543,928 475,775 Selling, general and
administrative 13,794 13,220 41,286 36,103 Depreciation and
amortization 2,895 2,803 8,576 7,231 ----- ----- ----- ----- Total
operating costs and expenses 207,009 186,114 593,790 519,109
------- ------- ------- ------- Operating income 20,013 17,483
59,067 48,133 Other income (expense): Other income - 17 3 20
Interest income 23 77 82 272 Interest expense (906) (2,047) (2,951)
(4,413) ---- ------ ------ ------ Total other expenses (883)
(1,953) (2,866) (4,121) ---- ------ ------ ------ Income before
taxes 19,130 15,530 56,201 44,012 Provision for income taxes
(7,294) (5,852) (21,948) (17,289) ------ ------ ------- ------- Net
income $11,836 $9,678 $34,253 $26,723 ======= ====== =======
======= Earnings per share: Basic $0.50 $0.42 $1.46 $1.17 =====
===== ===== ===== Diluted $0.49 $0.41 $1.42 $1.12 ===== ===== =====
===== Weighted-average shares: Basic 23,488 22,832 23,406 22,785
====== ====== ====== ====== Diluted 24,086 23,818 24,058 23,798
====== ====== ====== ====== Condensed Consolidated Balance Sheets
(unaudited) (in thousands) December 25, March 31, 2009 2009
------------- ---------- Assets Current Assets: Cash $2,260 $1,811
Accounts receivable - net 198,500 187,680 Prepaid and other current
assets 9,271 6,766 ----- ----- Total current assets 210,031 196,257
Property and equipment - net 18,871 19,552 Goodwill 262,705 262,705
Intangible assets - net 11,121 15,557 Deferred taxes 5,115 4,212
Other assets 4,155 3,269 ----- ----- Total assets $511,998 $501,552
======== ======== Liabilities and Stockholders' Equity Current
liabilities: Accounts payable $15,058 $21,528 Accrued expenses and
other liabilities 87,668 79,841 Current portion of long-term debt
1,000 1,000 Income taxes payable - 2,034 --- ----- Total current
liabilities 103,726 104,403 Line of credit 102,500 135,030
Long-term debt - net of current portion 34,000 34,500 Other
long-term liabilities 8,928 10,396 ----- ------ Total liabilities
249,154 284,329 ------- ------- Commitments and contingencies:
Stockholders' equity Common stock 241 238 Additional paid-in
capital 108,086 96,957 Retained earnings 155,687 121,434
Accumulated other comprehensive loss (838) (886) Deferred
compensation (332) (520) ---- ---- Total stockholders' equity
262,844 217,223 ------- ------- Total liabilities and stockholders'
equity $511,998 $501,552 ======== ======== Organic Growth
Reconciliation (unaudited) (in thousands) Three Months Ended
------------------ December 25, December 26, Percent 2009 2008
Growth --------- --------- -------- Total revenues, as reported
$227,022 $203,597 12% Plus: Revenues from acquired companies for
the comparable prior year period - - --- --- --- Organic revenues
$227,022 $203,597 12% === Nine Months Ended -----------------
December 25, December 26, Percent 2009 2008 Growth ---------
--------- -------- Total revenues, as reported $652,857 $567,242
15% Plus: Revenues from acquired companies for the comparable prior
year period - 30,664 --- ------ --- Organic revenues $652,857
$597,906 9% === EBITDA Reconciliation (unaudited) (in thousands)
Three Months Nine Months Ended Ended ------------ -----------
December December December December 25, 26, 25, 26, 2009 2008 2009
2008 ---- ---- ---- ---- Net income $11,836 $9,678 $34,253 $26,723
Provision for income taxes 7,294 5,852 21,948 17,289 Interest
expense 906 2,047 2,951 4,413 Interest income (23) (77) (82) (272)
Other income - (17) (3) (20) Depreciation and amortization 2,895
2,803 8,576 7,231 ----- ----- ----- ----- EBITDA 22,908 20,286
67,643 55,364 ====== ====== ====== ====== Revenue $227,022 $203,597
$652,857 $567,242 ======== ======== ======== ======== EBITDA Margin
10.1% 10.0% 10.4% 9.8%
http://www.newscom.com/cgi-bin/prnh/20040106/DCTU010LOGO
http://photoarchive.ap.org/ DATASOURCE: Stanley, Inc. CONTACT:
Brian J. Clark, Executive Vice President and Chief Financial
Officer, Stanley, +1-703-310-3236, or Lawrence Delaney, Jr.,
Investor Relations Counsel, +1-703-739-7410 Web Site:
http://www.stanleyassociates.com/
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