Anteon Reports Record 4th Quarter and Full Year 2004 Results.
-- Q4 revenues of $350.2 million, up 24.8%; 20.1% organic
-- Q4 fully diluted EPS of $0.45 vs. $0.16
-- Full year revenues of $1.27 billion, up 21.6%
-- Full year fully diluted EPS of $1.66 vs. $0.98
Anteon International Corporation (NYSE NYSE See: New York Stock Exchange :ANT), a leading information technology and systems engineering and integration company, announced today its operating results for the fourth quarter and full year ended December December: see month. 31, 2004. Financial Results Revenues for the fourth quarter of 2004 increased 24.8% to $350.2 million from $280.7 million for the comparable period in 2003. Fourth quarter revenues exceeded the top end of the Company's guidance by $5.2 million. Approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $9 million of fourth quarter revenues were attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to revenues accelerated from the first quarter of 2005. Excluding acquisitions, the organic revenue growth rate for the quarter was 20.1%. 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 fourth quarter increased 28.9% to $29.9 million from $23.2 million for the comparable period in 2003. Net income for the fourth quarter was $17.0 million versus $5.9 million in the comparable period in 2003. Earnings per share on a 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. basis (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. ) was $0.45 versus $0.16 in the comparable quarter in 2003. Fourth quarter 2003 EPS included a charge of $0.17 associated with debt refinancing Refinancing An extension and/or increase in amount of existing debt. . 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 quarter end increased to 82 days. The increase was largely the result of delays related to customer process changes. Cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses for the fourth quarter was negative $30.0 million due to the increase in DSO. For the year ended December 31, 2004, cash flow from operations was $18.2 million and free cash flow was $14.3 million. Cash flow from operations is expected to exceed $20 million for the first quarter of 2005 and $40 million for the first half of the year. For the 12 months ended December 31, 2004, Anteon's revenues increased 21.6% to $1.27 billion from $1.04 billion reported in 2003. Revenues for 2004 included $20.8 million from acquisitions. The organic revenue growth rate for 2004 was 14.2%, near the top of the Company's long term guidance range of 12% to 15%. Operating income for 2004 increased 26.1% to $106.0 million compared to $84.1 million for 2003. Net income for the year increased 70.8% to $61.8 million from $36.2 million for 2003. EPS increased 69.4% to $1.66 for full year 2004 from $0.98 last year. A reconciliation between certain non-GAAP financial measures and reported financial results is provided as an attachment See attach a file. to this press release. New Business The Company added $497 million in new business orders in the fourth quarter, and closed the quarter with $6.3 billion in total estimated remaining contract value. New awards included: --A contract with a ceiling value of $48 million to support the U.S. Central Command Air Forces with Information Technology services; --A sub-contract with a ceiling value of $75 million to support the Air Force Center For Environmental Excellence with range and environmental management services; --A contract with a ceiling value of $69 million to provide C4ISR C4ISR Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance C4ISR Command, Control, Communications, Computer, Intelligence, Surveillance and Reconnaissance C4ISR Command Control Communications Computers Intelligence Surveillance and Reconnaissance services to the Assistant Secretary of the Navy Assistant Secretary of the Navy (abbrev. "ASN") is the title given to certain senior officials in the U.S. Department of the Navy. They serve as chief assistants to the Secretary of the Navy (SECNAV). for Research, Development and Acquisition; --A contract with a ceiling value of $24 million to provide aircraft structural technology engineering to the Air Force Research Laboratory; and, --A contract with a ceiling value of $49 million to provide shipboard ship·board n. 1. The condition of being aboard a ship: on shipboard. 2. Archaic The side of a ship. adj. security services Security services are state institutions for the provision of intelligence, primarily of a strategic nature, but also including protective security intelligence. Examples include the Security Service (MI5) and the Secret Intelligence Service (MI6) in the United Kingdom, and the to the Military Sealift Command A major command of the US Navy, and the US Transportation Command's component command responsible for designated common-user sealift transportation services to deploy, employ, sustain, and redeploy US forces on a global basis. Also called MSC. See also transportation component command. . 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, "We closed the year with a very strong quarter. 2004 was another exceptional year for Anteon. We're we're Contraction of we are. we're we are also very excited to have acquired two outstanding companies in 2004, strengthening our modeling and simulation The mathematical representation of the interaction of real-world objects. See scientific application and simulator. Simulation A broad collection of methods used to study and analyze the behavior and performance of actual or theoretical systems. , and information security capabilities within the Departments of Defense and State. Based on our well-stocked well-stocked adj [shop, larder] → bien surtido well-stocked adj → bien approvisionné(e) well-stocked well adj business development pipeline and secure positioning in reliable growth areas across our marketplace, we look forward to another great year in 2005." Company Guidance The Company reiterates its previous guidance for the first quarter and full year 2005 as summarized in the table below.
2005 FINANCIAL GUIDANCE
(Dollars and shares in millions, except per share amounts)
----------------------------------------------------------
Q1 2005 Full Year 2005
--------------------- ---------------------
Revenues $340-$355 $1,440-$1,470
Weighted Average Shares
Outstanding 37.60 37.75
Tax Rate 39.00% 38.75%
Diluted Earnings Per
Common Share Meet or exceed $0.43 Meet or exceed $1.89
Conference Call Anteon has scheduled a conference call for 10:00 a.m. Eastern Standard Time today, February February: see month. 23, 2005, during which senior management will discuss fourth 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 Standard Time on February 23, 2005, until midnight February 28, 2005. To access the replay, call 877-519-4471 (U.S.) or 973-341-3080 (International). The confirmation code for access to the replay is 5669305. 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 systems integrator An individual or organization that builds systems from a variety of diverse components. With increasing complexity of technology, more customers want complete solutions to information problems, requiring hardware, software and networking expertise in a multivendor environment. , providing information technology and engineering solutions to the federal government and international sectors. Anteon designs, integrates, maintains and upgrades 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 was founded in 1976 and has grown to currently employ over 8,800 employees in more than 100 offices worldwide. Anteon consistently ranks among the top information technology integrators based on independent surveys, and has been named to the 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 List of the 400 Best Big Companies in 2005, earning distinction on the Forbes Platinum platinum (plăt`ənəm), metallic chemical element; symbol Pt; at. no. 78; at. wt. 195.08; m.p. 1,772°C;; b.p. 3,827±100°C;; sp. gr. 21.45 at 20°C;; valence +2 or +4. List. 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
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the three months ended December 31, 2004 and 2003
($ and shares in thousands, except EPS)
Three Months Three Months
Ended Ended
December 31, December 31, Percentage
2004 2003 Change
------------ ------------ ----------
Revenues $ 350,247 $ 280,710 24.8%
Costs of revenues 302,318 240,569
General and administrative
expenses 17,244 16,259
Amortization of intangible
assets 775 687
------------ ------------
Operating income 29,910 23,195 29.0%
Operating margin 8.5% 8.3%
Other income 30 --
Secondary offering expenses 240 54
Interest expense, net of
interest income 2,194 13,860
Minority interest in earnings (46) (4)
------------ ------------
Pretax income 27,460 9,277 196.0%
Income tax provision 10,503 3,414
------------ ------------
Net income $ 16,957 $ 5,863 189.2%
============ ============
After tax margin 4.8% 2.1%
EBITDA 31,500 25,278 24.6%
Cash flow from operations (30,002) (3,383)
Tax rate 38.2% 36.8%
Basic shares 35,974 35,272
Diluted shares 37,464 37,249
EPS, basic $ 0.47 $ 0.17 176.5%
EPS, diluted $ 0.45 $ 0.16 181.3%
ANTEON INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the years ended December 31, 2004 and 2003
($ and shares in thousands, except EPS)
Year Ended Year Ended
December 31, December 31, Percentage
2004 2003 Change
------------ ------------ ----------
Revenues $ 1,268,139 $ 1,042,474 21.6%
Costs of revenues 1,093,470 897,264
General and administrative
expenses 65,964 58,647
Amortization of intangible
assets 2,676 2,450
------------ ------------
Operating income 106,029 84,113 26.1%
Operating margin 8.4% 8.1%
Other income 973 --
Secondary offering expenses 240 852
Interest expense, net of
interest income 7,769 24,244
Minority interest in earnings (72) (54)
------------ ------------
Pretax income 98,921 58,963 67.8%
Income tax provision 37,116 22,773
------------ ------------
Net income $ 61,805 $ 36,190 70.8%
============ ============
After tax margin 4.9% 3.5%
EBITDA 113,382 90,097 25.8%
Cash flow from operations 18,244 37,443
Tax rate 37.5% 38.6%
Basic shares 35,717 34,851
Diluted shares 37,267 36,925
EPS, basic $ 1.73 $ 1.04 66.3%
EPS, diluted $ 1.66 $ 0.98 69.4%
ANTEON INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
As of As of
December 31, 2004 December 31, 2003 $ Change
----------------- ----------------- ---------
ASSETS
Cash and cash
equivalents $ 4,103 $ 2,088 $ 2,015
Accounts receivable,
net 317,296 222,937 94,359
Other current assets 17,205 19,566 (2,361)
Property and
equipment, net 12,920 12,759 161
Goodwill, net 242,066 212,205 29,861
Intangible and other
assets, net 19,836 9,725 10,111
----------------- ----------------- ---------
Total assets $ 613,426 $ 479,280 $134,146
================= ================= =========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Accounts payable,
accrued expenses and
other current
liabilities $ 154,030 $ 123,521 $ 30,509
Indebtedness 184,388 158,776 25,612
Deferred revenue 13,764 11,783 1,981
Other long-term
liabilities 13,686 10,498 3,188
----------------- ----------------- ---------
Total liabilities 365,868 304,578 61,290
Minority interest in
subsidiaries 282 210 72
Stockholders' equity 247,276 174,492 72,784
----------------- ----------------- ---------
Total liabilities and
stockholders' equity $ 613,426 $ 479,280 $134,146
================= ================= =========
ANTEON INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in thousands)
Years ended December 31, 2004, 2003
2004 2003
-------- --------
Cash flows from operating activities:
Net income $61,805 $36,190
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Gain on settlement of subordinated notes payable (1,327) --
Depreciation and amortization of property and
equipment, intangible assets and deferred financing
fees 7,377 10,904
Loss on disposals of property and equipment 8 190
Deferred income taxes 3,102 (1,742)
Minority interest in earnings of subsidiaries 72 54
Changes in assets and liabilities, net of acquired
assets and liabilities: (52,793) (8,153)
-------- --------
Net cash provided by operating activities 18,244 37,443
-------- --------
Cash flows from investing activities:
Purchases of property and equipment and other assets (3,963) (3,049)
Costs of acquisitions, net of cash acquired (43,915) (92,382)
-------- --------
Net cash used in investing activities (47,878) (95,431)
-------- --------
Cash flows from financing activities:
Principal payments on bank and subordinated notes
payable (1,350) (43)
Deferred financing costs (297) (2,728)
Principal payments on term loans (1,538) (21,202)
Proceeds from term loans 16,125 150,000
Proceeds from certain stockholders related to
secondary offering -- 852
Net proceeds (payments) on revolving credit facility 15,400 (2,600)
Redemption of senior subordinated notes payable (1,876) (73,124)
Proceeds from issuance of common stock, net of
expenses 5,526 4,902
Principal payments under capital lease obligations (341) (247)
-------- --------
Net cash provided by financing activities 31,649 55,810
-------- --------
Net increase (decrease) in cash and cash equivalents 2,015 (2,178)
Cash and cash equivalents, beginning of year 2,088 4,266
-------- --------
Cash and cash equivalents, end of year $ 4,103 $ 2,088
======== ========
RECONCILIATION BETWEEN NET INCOME AND EBITDA
(in thousands)
2004
---------------------------------------------
Q1 Q2 Q3 Q4 FY 2004
-------- -------- -------- -------- ---------
Net Income $13,334 $14,665 $16,849 $16,957 $ 61,805
Provision for income
taxes 8,406 8,271 9,936 10,503 37,116
Interest expense, net of
interest income 1,794 1,950 1,831 2,194 7,769
Amortization 679 680 542 775 2,676
Depreciation 1,053 934 958 1,071 4,016
-------- -------- -------- -------- ---------
EBITDA (1) $25,266 $26,500 $30,116 $31,500 $113,382
2003
---------------------------------------------
Q1 Q2 Q3 Q4 FY 2003
-------- -------- -------- -------- ---------
Net Income $ 9,075 $10,309 $10,943 $ 5,863 $ 36,190
Provision for income
taxes 5,688 6,562 7,109 3,414 22,773
Interest expense, net of
interest income 3,191 3,363 3,830 13,860 24,244
Amortization 477 563 723 687 2,450
Depreciation 892 936 1,158 1,454 4,440
-------- -------- -------- -------- ---------
EBITDA (1) $19,323 $21,733 $23,763 $25,278 $ 90,097
(1) "EBITDA" as defined represents income before income taxes plus
depreciation, amortization, net interest expense. 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.
RECONCILIATION BETWEEN TOTAL REVENUE GROWTH AND ORGANIC REVENUE GROWTH
($ in thousands)
Q4 Full Year
--------- -----------
2003 Revenue $280,710 $1,042,474
2004 Revenue 350,247 1,268,139
--------- -----------
Total Revenue Growth over 2003 24.8% 21.6%
2003 Revenue 280,710 1,042,474
Less H1 2003 ISI Revenues -- (11,588)
--------- -----------
Adjusted 2003 Revenue (a) 280,710 1,030,886
========= ===========
2004 Revenue 350,247 1,268,139
Less H1 2004 ISI Revenue -- (70,182)
Less 2004 IMSI and STI Revenues (12,993) (20,784)
--------- -----------
Adjusted Total 2004 Revenue (b) 337,254 1,177,173
========= ===========
Organic Revenue Growth over 2003 (b-a)/a 20.1% 14.2%
RECONCILIATION OF CASH FLOW FROM OPERATIONS TO FREE CASH FLOW
(in thousands)
Free Cash Flow Q4 2004 FY 2004
-------------- --------- --------
Cash flow from operations $(30,002) $18,244
Less: capital expenditures (1,117) (3,963)
--------- --------
Free cash flow $(31,119) $14,281
========= ========
NET DEBT RECONCILIATION
($ in thousands)
As of
Net Debt December 31, 2004
-------- -----------------
Revolving Credit Facility $ 19,800
Term Loan B 164,588
-----------------
Total debt: 184,388
Less: Cash (4,103)
-----------------
Net Debt $ 180,285
=================
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