Anteon Reports Record 3rd Quarter 2004 Results, and Increases Full Year EPS Guidance.FAIRFAX Fairfax, city (1990 pop. 19,622), historic seat of Fairfax co., NE Va., a residential suburb of Washington, D.C.; inc. 1892, as a city 1961 (at which time it became independent and no longer included in a county). There is some light manufacturing. , Va. -- Anteon International Corporation (NYSE NYSE See: New York Stock Exchange :ANT) --Revenues of $325.6 million, up 16.7% --Operating income of $27.7 million, up 21.9% --Fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. of $0.45, up 50.0% --Free cash flow of $17.0 million Anteon International Corporation (NYSE:ANT), a leading information technology, and systems engineering and integration company, announced operating results today for its third quarter and nine months ended September September: see month. 30, 2004. Financial Results Anteon's revenues for the third quarter of 2004 increased 16.7% to $325.6 million from $279.1 million for the comparable period in 2003. The organic revenue growth rate for the quarter was 13.9%. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. for the third quarter increased 21.9% to $27.7 million from $22.7 million for the comparable period in 2003. Net income for the third quarter increased 54.0% to $16.8 million versus $10.9 million in the comparable period in 2003. Earnings per share on a fully diluted basis was $0.45 versus $0.30 in the comparable quarter in 2003, an increase of 50.0%. Earnings per share of $0.45 for the third quarter of 2004 included a one time after tax benefit of $1.0 million related to a settlement from a prior acquisition. Excluding this benefit, EPS on an operating basis was $0.42. Free cash flow for the third quarter was $17.0 million, and accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying days sales outstanding In accountancy, Days Sales Outstanding is a company's average collection period. A low figure indicates that the company collects its outstanding receivables quickly. Typically it is looked at either quarterly or yearly (90 or 365 days). (DSO See CSO. ) at September 30, 2004 was 70 days. Anteon's revenues for the nine months ended September 30, 2004 increased 20.5% to $917.9 million from $761.8 million reported in the comparable period in 2003. Operating income for the nine months ended September 30, 2004 increased 25.0% to $76.1 million versus $60.9 million for the comparable period in 2003. Net income for the nine months ended September 30, 2004 increased 47.9% to $44.8 million from $30.3 million for the comparable period in 2003. Earnings per share on a fully diluted basis was $1.21 versus $0.82 in the first nine months of 2003, an increase of 47.6%. A reconciliation between certain non-GAAP financial measures discussed above and reported financial results is provided as an attachment See attach a file. to this press release. New Business Major contracts awarded during the third quarter were across the company's Department of Defense and Department of Homeland Security Noun 1. Department of Homeland Security - the federal department that administers all matters relating to homeland security Homeland Security executive department - a federal department in the executive branch of the government of the United States customers and included: --A task order contract with a ceiling of $870 million to support U.S. Navy shipboard ship·board n. 1. The condition of being aboard a ship: on shipboard. 2. Archaic The side of a ship. adj. maintenance and modernization modernization Transformation of a society from a rural and agrarian condition to a secular, urban, and industrial one. It is closely linked with industrialization. As societies modernize, the individual becomes increasingly important, gradually replacing the family, programs; --A $320 million ceiling value contract to support command and control programs of the Space and Naval Warfare naval warfare Military operations conducted on, under, or over the sea and waged against other seagoing vessels or targets on land or in the air. The earliest naval attacks were raids by the armed men of a tribe or town using fishing boats or merchant ships. Systems Command; --A $150 million contract to support the military intelligence community's global CENTRIXS CENTRIXS Combined Enterprise Regional Information Exchange System (formerly CENTCOM Region Information Exchange System) program and NATO NATO: see North Atlantic Treaty Organization. NATO in full North Atlantic Treaty Organization International military alliance created to defend western Europe against a possible Soviet invasion. component. These multi-national information sharing See data conferencing. programs represent the most widely used coalition intelligence sharing systems in the world today; --A $120 million contract to support the Naval Sea Systems Command The Naval Sea Systems Command (NAVSEA) is the largest of the U.S. Navy's five "systems commands," or materiel organizations. NAVSEA consists of four shipyards, eight "warfare centers" (two undersea and six surface), four major shipbuilding locations and the NAVSEA headquarters, integrated warfare The conduct of military operations in any combat environment wherein opposing forces employ non-conventional weapons in combination with conventional weapons. systems programs; --A $118 million contract to support U.S. Army personnel recruitment recruitment /re·cruit·ment/ (re-krldbomact´ment) 1. the gradual increase to a maximum in a reflex when a stimulus of unaltered intensity is prolonged. 2. and retention programs; --A $74 million contract to provide training for the Department of Homeland A homeland (rel. country of origin and native land) is the concept of the territory (cultural geography) to which an ethnic group holds a long history and a deep cultural association with —the country in which a particular national identity began. Security's U.S. Customs and Border Protection U.S. Customs and Border Protection (CBP), a bureau of the United States Department of Homeland Security, is charged with regulating and facilitating international trade, collecting import duties, and enforcing U.S. trade laws. Agency; and, --A $29 million contract to design and operate the Advanced Training Technology Laboratory for the U.S. Joint Forces Command. This laboratory will develop and demonstrate new training systems technologies for joint, interagency in·ter·a·gen·cy adj. Involving or representing two or more agencies, especially government agencies. , and multi-national operations. CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Comments Joseph M. Kampf, President and Chief Executive Officer of Anteon, said, "This was another strong quarter for 'Team' Anteon. Our impressive capture of five contracts, each with a potential value of over $100 million, our solid revenue growth, and our total qualified business opportunity pipeline of over $12 billion, reflect the continued robustness of the defense and national security marketplace and Anteon's status as a recognized leader in that sector. Our business development outlook is very positive. The 2005 Defense and Homeland Security Noun 1. Homeland Security - the federal department that administers all matters relating to homeland security Department of Homeland Security executive department - a federal department in the executive branch of the government of the United States Appropriations bills have been passed, and we expect to see a number of contract opportunities from our core business area customers, which we are well positioned to win. Based on the strength of our third quarter results and business outlook, we are again increasing our full year EPS guidance." Company Guidance The Company provides guidance for the fourth quarter and full year 2004 as summarized in the table below.
2004 FINANCIAL GUIDANCE
(Dollars and shares in millions, except per share amounts)
----------------------------------------------------------------------
Q4 2004 Full Year 2004
-------------------- --------------------
Revenues $330 - $345 $1,250 - $1,265
Weighted Average Shares
Outstanding 37.5 37.3
Tax Rate 38.8% 37.7%
Fully Diluted Earnings
Per Share Meet or exceed $0.42 Meet or exceed $1.63
Conference Call Anteon has scheduled a conference call for 10:00 a.m. Eastern Daylight For other uses, see Daylight (disambiguation). Daylight or the light of day is the combination of all direct and indirect sunlight outdoors during the daytime (and perhaps twilight). Time TODAY, October October: see month. 27, 2004, during which senior management will discuss third quarter results and respond to questions. The conference call will be Webcast (listen only) via Anteon's website at www.anteon.com. A telephone replay of the call also will be available beginning at 1:00 p.m. Eastern Daylight Time on October 27, 2004, until midnight October 30, 2004. To access the replay, call (800) 642-1687 (U.S.) or (706) 645-9291 (International). The confirmation code for access to the replay is 8656927. A replay also will be available on Anteon's website shortly after the conclusion of the call. About Anteon Anteon, headquartered in Fairfax, Virginia Fairfax is an independent city forming an enclave within the confines of Fairfax County, in the Commonwealth of Virginia. Although politically independent of the surrounding county, the City of Fairfax is nevertheless its county seatGR6. , is a leading information technology, and systems engineering and integration company, providing support to the U.S. federal government and international sectors. For over 28 years, the Years, The the seven decades of Eleanor Pargiter’s life. [Br. Lit.: Benét, 1109] See : Time Company has designed, integrated, maintained and upgraded state-of-the-art systems for national defense, intelligence, emergency response and other high priority government missions. Anteon also provides many of its government clients with the systems analysis, integration and program management skills necessary to manage the development and operations of their mission critical systems. The Company currently has over 8,600 employees in more than 100 offices worldwide. Anteon consistently ranks among the top information technology integrators based on independent surveys. Anteon was cited by Forbes Forbes , B(ertie) C(harles) 1880-1954. American publisher and businessman who founded and edited (1916-1954) Forbes magazine. His son Malcolm Stevenson Forbes Magazine, in 2004, as one of the 25 fastest growing U.S. technology companies and has been named one of the world's top 100 information technology companies in Business Week's INFOTECH 100 Annual Report for the past two years. For more information, visit www.anteon.com. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995: The statements contained in this release which are not historical facts are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in, or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. by, forward-looking statements. The Company has tried, whenever possible, to identify these forward-looking statements using words such as "projects," "anticipates," "believes," "estimates," "expects," "plans," "intends," and similar expressions. Similarly, statements herein that describe the Company's business strategy, outlook, objectives, plans, intentions or goals are also forward-looking statements. The risks and uncertainties involving forward-looking statements include the Company's dependence on continued funding of U.S. government programs, government contract procurement The fancy word for "purchasing." The procurement department within an organization manages all the major purchases. and termination The point where a line, channel or circuit ends. See SCSI termination and hybrid. risks, including risks associated with bid protests, and other risks described in the Company's Securities and Exchange Commission filings. These statements reflect the Company's current beliefs and are based upon information currently available to it. Be advised that developments subsequent to this release are likely to cause these statements to become outdated out·dat·ed adj. Out-of-date; old-fashioned. outdated Adjective old-fashioned or obsolete Adj. 1. with the passage of time. The Company does not currently intend, however, to update the guidance provided today prior to its next earnings release.
ANTEON INTERNATIONAL CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the three months ended September 30, 2004 and 2003
($ and shares in thousands, except EPS)
Three Months Three Months
Ended Ended Percentage
September 2004 September 2003 Change
-------------- -------------- -------------
Revenues $ 325,581 $ 279,080 16.7%
Costs of revenues 280,898 240,689
General and
administrative expenses 16,473 14,969
Amortization of
intangible assets 542 723
-------------- --------------
Operating income 27,668 22,699 21.9%
Operating margin 8.5% 8.1%
Other income 939 --
Secondary offering
expenses -- 798
Interest expense 1,831 3,831
Minority interest in
(earnings) losses 9 (18)
-------------- --------------
Pretax income 26,785 18,052 48.4%
Income tax 9,936 7,109
-------------- --------------
Net income $ 16,849 $ 10,943 54.0%
============== ==============
After tax margin 5.18% 3.9%
EBITDA 29,177 24,561 18.8%
Cash flow from operations 17,784 17,054 4.3%
Tax rate 37.1% 39.2%
Basic shares 35,817 34,970
Diluted shares 37,253 37,084
EPS, basic $ 0.47 $ 0.31 51.6%
EPS, diluted $ 0.45 $ 0.30 50.0%
ANTEON INTERNATIONAL CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
for the nine months ended September 30, 2004 and 2003
($ and shares in thousands, except EPS)
Nine Months Nine Months
Ended Ended Percentage
September 2004 September 2003 Change
-------------- -------------- -------------
Revenues $ 917,892 $ 761,764 20.5%
Costs of revenues 791,152 656,695
General and
administrative expenses 48,720 42,388
Amortization of
intangible assets 1,901 1,763
-------------- --------------
Operating Income 76,119 60,918 25.0%
Operating margin 8.3% 8.0%
Other income 943 --
Secondary offering
expense -- 798
Interest expense 5,575 10,384
Minority interest (26) (50)
-------------- --------------
Pretax income 71,461 49,686 43.8%
Income tax 26,613 19,359
-------------- --------------
Net income $ 44,848 $ 30,327 47.9%
============== ==============
After tax margin 4.9% 4.0%
EBITDA 80,939 65,617 23.4%
Cash flow from operations 48,246 40,826 18.2%
Tax rate 37.2% 38.9%
Basic shares 35,630 34,710
Diluted shares 37,201 36,816
EPS, basic $ 1.26 $ 0.87 44.8%
EPS, diluted $ 1.21 $ 0.82 47.6%
ANTEON INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
($ in thousands)
As of
September 30, As of
2004 December 31,
(unaudited) 2003 $Change
-------------- -------------- -------------
ASSETS
Cash and cash
equivalents $ 14,647 $ 2,088 $ 12,559
Accounts receivable, net 257,384 222,937 34,447
Other current assets 16,983 19,566 (2,583)
Property and equipment,
net 12,864 12,759 105
Goodwill net 246,708 212,205 34,503
Intangible and other
assets, net 15,625 9,725 5,900
-------------- -------------- -------------
Total assets $ 564,211 $ 479,280 $ 84,931
============== ============== =============
LIABILITIES AND
STOCKHOLDERS' EQUITY
Accounts payable,
accrued expenses and
other current
liabilities $ 145,000 $ 123,521 $ 21,479
Indebtedness 165,000 158,776 6,224
Deferred revenue 16,236 11,783 4,453
Other long-term
liabilities 13,628 10,498 3,130
-------------- -------------- -------------
Total liabilities 339,864 304,578 35,286
Minority interest in
subsidiaries 236 210 26
Stockholders' equity 224,111 174,492 49,619
-------------- -------------- -------------
Total liabilities and
stockholders' equity $ 564,211 $ 479,280 $ 84,931
============== ============== =============
ANTEON INTERNATIONAL CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in thousands)
For the nine months ended
September 30,
2004 2003
------------ ------------
OPERATING ACTIVITIES:
Net income $ 44,848 $ 30,327
Adjustments to reconcile net income to net
cash provided by operating activities:
Gain on settlement of subordinated notes
payable (1,327) --
Depreciation and amortization on property
and equipment, intangibles and financing
fees 5,368 5,827
Deferred income taxes 343 (3,307)
Minority interest in earnings of
subsidiaries 26 50
Changes in assets and liabilities (1,012) 7,929
------------ ------------
Net Cash Provided By Operating Activities 48,246 40,826
------------ ------------
INVESTING ACTIVITIES:
Purchases of property, equipment and other
assets (2,846) (2,241)
Costs of acquisitions, net of cash
acquired (43,295) (92,369)
------------ ------------
Net Cash Used For Investing Activities (46,141) (94,610)
------------ ------------
FINANCING ACTIVITIES
Principal payment on bank and subordinated
notes payable (1,350) (38)
Principal payments on term loans (1,125) (2,849)
Proceeds from term loan 16,125 --
Deferred financing fees (294) (249)
Net proceeds (payments)on revolving credit
facility (4,400) 50,400
Redemption of senior subordinated notes
payable (1,876) --
Principal payment under capital lease
obligations (240) --
Proceeds from certain stockholders related
to second offering -- 900
Proceeds from issuance of common stock,
net of expense 3,614 4,078
------------ ------------
Net Cash Provided By Financing Activities 10,454 52,242
------------ ------------
CASH AND CASH EQUIVALENTS:
Net Increase (decrease) in cash and cash
equivalents 12,559 (1,542)
Cash and cash equivalents, beginning of
period 2,088 4,266
------------ ------------
Cash and cash equivalents, end of period $ 14,647 $ 2,724
------------ ------------
RECONCILIATION BETWEEN TOTAL REVENUE GROWTH AND
ORGANIC REVENUE GROWTH
($ in thousands)
Q3 YTD Q3
------------ ------------
2003 Revenue $ 279,080 $ 761,764
2004 Revenue 325,581 917,892
------------ ------------
Total Revenue Growth over 2003 16.7% 20.4%
2003 Revenue 279,080 761,764
Less 2003 ISI Revenues -- 11,588
------------ ------------
Adjusted 2003 Revenues (a) 279,080 750,176
============ ============
2004 Revenue 325,581 917,892
Less H1 2004 acquisition Revenues -- 70,182
Less 2004 acquisition Revenues 7,791 7,791
------------ ------------
Adjusted Total 2004 Revenue (b) 317,790 839,569
============ ============
Organic Revenue Growth over 2003 (b-a)/a 13.9% 11.9%
RECONCILIATION OF CASH FLOW FROM OPERATIONS
TO FREE CASH FLOW
($ in thousands)
Q3 YTD
------------ ------------
Cash flow from operations 17,784 48,246
Less: Capital Expenditures (802) (2,846)
------------ ------------
Free cash flow 16,982 45,400
============ ============
RECONCILIATION BETWEEN NET INCOME AND EBITDA
(in thousands)
2004
-----------------------------------
Q1 Q2 Q3 YTD Q3
-------- -------- -------- --------
Net income $13,334 $14,665 $16,849 $44,848
Other income -- (4) (939) (943)
Secondary offering expenses -- -- -- --
Provision for income taxes 8,406 8,271 9,936 26,613
Interest expense, net of
interest income 1,794 1,950 1,831 5,575
Amortization 679 680 542 1,901
Depreciation 1,053 934 958 2,945
-------- -------- -------- --------
EBITDA (1) $25,266 $26,496 $29,177 $80,939
======== ======== ======== ========
2003
-----------------------------------
Q1 Q2 Q3 Q4
-------- -------- -------- --------
Net income $ 9,075 $10,309 $10,943 $ 5,863
Secondary offering expenses -- -- 798 54
Provision for income taxes 5,688 6,562 7,109 3,414
Interest expense, net of
interest income 3,191 3,363 3,830 13,860
Amortization 477 563 723 687
Depreciation 892 936 1,158 1,454
-------- -------- -------- --------
EBITDA (1) $19,323 $21,733 $24,561 $25,332
======== ======== ======== ========
(1) "EBITDA" as defined represents income before income taxes plus
depreciation, amortization, net interest expense and secondary
offering expenses. EBITDA is a key financial measure but should not
be construed as an alternative to operating income or cashflows from
operating activities (as determined in accordance with accounting
principles generally accepted in the United States of America). The
company believes that EBITDA is a useful supplement to net income and
other income statement data in understanding cash flows generated
from operations that are available for taxes, debt service and
capital expenditures.
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