Federal Revenue Up 4 Percent; Operating Margins Rise 40 Basis Points
Company Sees Strong New Business Pipeline
ANDOVER, Mass., April 27, 2011 (GLOBE NEWSWIRE) -- Dynamics Research Corporation (Nasdaq:DRCO), a leading provider of innovative management consulting, engineering, technical and information technology services and solutions to federal and state governments, today announced operating results for the first quarter of 2011.
Financial Results
The Company reported income from continuing operations of $2.7 million, or $0.27 per diluted share, for the first quarter of 2011, an increase of 9 percent over income from continuing operations in the first quarter of 2010 adjusted for the impact of a one-time $253 thousand tax benefit recorded last year.
Revenue for the first quarter of 2011 was $69.5 million, as compared with $68.6 million for the same period in 2010. Federal revenue grew 4.3 percent in the first quarter of 2011 compared with the same period in 2010. Overall, reported revenue including state government clients grew 1.4 percent on a year-over-year comparison. Operating margin was 6.8 percent for the quarter, up from 6.4 percent in the first quarter of last year.
The Company ended the quarter with $18.6 million in cash and cash equivalents, down from the end of 2010 as a result of an anticipated $3.5 million discretionary pension plan payment, seasonal payments of annual incentive compensation and anticipated temporary delays in federal payments.
Business Highlights
"The Company's operating performance for the quarter included solid growth in organic revenue, margin gains, and healthy contract activity," said Jim Regan, DRC's chairman and chief executive officer. "We booked new contracts worth approximately $49 million, representing a win rate of 68 percent, while our new business pipeline rose to $2.5 billion, up from $1.7 billion since February. The increased pipeline reflects our strategic business development initiatives pursuing larger program opportunities, which, as they mature, we expect will accelerate growth in our target markets – homeland security, healthcare, high priority defense programs, cyber security, financial regulation, and intelligence agencies. We continue to be very optimistic about our business opportunities and outlook."
Company Guidance
The Company's estimate for revenue for 2011 is in the range of $277 to $285 million. Regarding earnings from continuing operations for 2011, the Company anticipates results to be in the range of $1.23 to $1.30 per diluted share. For the second quarter of 2011, the Company anticipates revenue in the range of $68 to $71 million and earnings from continuing operations per diluted share of $0.26 to $0.28.
Conference Call
The Company will conduct a first quarter 2011 conference call on Thursday, April 28, 2011 at 10:00 a.m. ET. The call will be available via telephone at 877-303-4382, and accessible via Web cast at . Recorded replays of the conference call will be available on Dynamics Research Corporation's investor relations home page at and by telephone at 800-642-1687, passcode #67398280, beginning at 1:00 p.m. ET April 28, 2011.
About Dynamics Research Corporation
Dynamics Research Corporation (DRC) is a leading provider of mission-critical technology management services and solutions for government programs. DRC offers the capabilities of a large company and the responsiveness of a small company, backed by a history of excellence and customer satisfaction. Founded in 1955, DRC is a publicly held corporation (Nasdaq:DRCO) and maintains more than 25 offices nationwide with major offices in Andover, Massachusetts and the Washington, D.C. area. For more information please visit our website at .
Safe Harbor
Safe harbor statements under the Private Securities Litigation Reform Act of 1995: Some statements contained or implied in this news release, may be considered forward-looking statements, which by their nature are uncertain. Consequently, actual results could materially differ. For more detailed information concerning how risks and uncertainties could affect the Company's financial results, please refer to DRC's most recent filings with the SEC including the Company's Annual Report on Form 10-K for the year ended December 31, 2010. The Company assumes no obligation to update any forward-looking information.
CONTACT: Investors: Chris Witty Darrow Associates, Inc. 646.438.9385 cwitty@darrowir.com Media: Duyen "Jen" Truong Sage Communications (for DRC) 703.584.5645 duyent@aboutsage.com