August 01, 2013
ANDOVER, Mass., Aug. 1 -- Dynamics Research Corporation, a leading technology and management consulting company focused on driving performance and process improvement for government clients, today announced operating results for the second quarter ended June 30, 2013.
Net income for the quarter ended June 30, 2013 was $1.2 million, or $0.11 per diluted share, as compared with $1.4 million, or $0.14 per diluted share, for the second quarter of 2012, excluding a goodwill impairment charge of $12 million (pre-tax), or $0.73 per share, reported in the second quarter a year ago. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for the second quarter of 2013 was $5.7 million, or 7.9 percent of revenue, as compared with $7.1 million, or 8.7 percent of revenue, for the same period a year ago. Revenue for the second quarter of 2013 was $72.1 million compared with $80.8 million for the same period in 2012.
For the six month period ended June 30, 2013 net income was $2.4 million, or $0.23 per diluted share, compared with $3.2 million, or $0.31 per diluted share, for the same period in 2012, excluding the second quarter 2012 goodwill impairment charge of $12 million. Adjusted EBITDA for the first six months of 2013 was $11.8 million, or 8.1 percent of revenue, as compared to $14.9 million, or 8.9 percent of revenue, for the same period a year ago. For the six months ended June 30, 2013 revenue was $145.7 million compared with $166.7 million for the same period in 2012.
During the second quarter, the Company generated $9.0 million of cash from operations as compared with $5.7 million in the same period a year ago.
"Second quarter results were again consistent with our expectations, reflecting more stability in our end markets than existed a year ago," said Jim Regan, DRC's chairman and chief executive officer. "While industry conditions certainly remain challenging there are indications of greater visibility going forward, and our qualified pipeline now stands at $775 million – up 25 percent over the past three months. This includes over $200 million in near-term bids submitted and awaiting award.
"Revenue in our priority markets was $52.6 million, flat with the second quarter a year ago and down only slightly from $53.2 million for the first quarter of this year. Healthcare revenue was up 11 percent year-over-year, offset by weakness in homeland security revenue, while defense readiness, logistics and C3 revenue was off sharply from the year-ago period, continuing to reflect current spending trends. However, we won 92 percent of $42 million in re-compete award decisions made over the last three months and booked $17 million of new business. Funded bookings continued to be soft, as we await the beginning of government fiscal year option exercises; in addition, we are seeing an increase in the use of incremental funding, rather than full funding, upon option exercise. Our book-to-bill ratio was 0.7-to-one for the quarter, while the trailing twelve month book-to-bill was 0.9-to-one."
"Longer term, we are encouraged by early indicators of market stabilization, strong re-compete performance and customer satisfaction, as well as by the high level of bidding activity we are currently experiencing approaching the government's fiscal year end."
For the third quarter 2013 the Company anticipates revenue in the range of $68 to $71 million and earnings of $0.12 to $0.14 per diluted share. Considering current uncertainties regarding federal government expenditure decisions, the Company continues to refrain from providing financial guidance for the balance of the calendar year 2013.
The Company will conduct a second quarter 2013 conference call tomorrow, August 1, 2013 at 10:00 a.m. ET. The call will be available via telephone at 877-303-4382 and accessible via Web cast at www.drc.com. Recorded replays of the conference call will be available on Dynamics Research Corporation's investor relations home page at www.drc.com and by telephone at 800-585-8367, replay passcode # 14753510, beginning at 1:00 p.m. ET on August 1, 2013.
About Dynamics Research Corporation
Dynamics Research Corporation (DRC) provides technology and management consulting solutions focused on driving performance, process and results for government clients. DRC offers innovative solutions and delivers rock solid results. DRC has large company capabilities and small company agility. Founded in 1955, DRC is a publicly held corporation and maintains more than 25 offices nationwide with major offices in Andover, Massachusetts and the Washington, D.C. region. For more information please visit our website at www.drc.com.
Source: Dynamics Research Corporation
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