PEC Solutions, Inc. Reports 45% Improvement in Net Income for Quarter.Business Editors/Hi-Tech Writers 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.--(BUSINESS WIRE)--Oct. 23, 2000 Continued Strong Operating Performance Results in $0.26 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. for Nine Months PEC Peć (pĕch), Albanian Peja, town (1991 pop. 68,163), S Serbia, in the Kosovo region. A trade center, it has industries that produce leather goods, foodstuffs, and handicrafts. Solutions, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on NM: PECS), a professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. firm specializing in high-end high-end adj. Informal 1. Appealing to sophisticated and discerning customers: a high-end department store; high-end video equipment. 2. solutions that help government organizations capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the , today reported third quarter revenues of $17.7 million, compared to $13.4 million for the same period in 1999, a 32% increase. Revenue for the first nine months of 2000 increased to $49.9 million from $38.6 million in the same period in 1999, a 29% increase. Net income was $2.3 million in the third quarter, compared to $1.6 million in the third quarter of last year, an increase of 45%. Net income for the first nine months of 2000 increased to $5.4 million from $4.0 million in the same period in 1999, a 37% increase. Earnings per share in the third quarter were 10 cents basic (on 22.3 million shares) and 9 cents 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. (on 25.3 million shares), compared to basic and fully diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of of 9 cents (on 17 million shares) and 8 cents (on 20.1 million shares), respectively, in the same period in 1999. Earnings per share for the first nine months of 2000 were 26 cents basic (on 20.7 million shares) and 22 cents fully diluted (on 24.1 million shares), compared to basic and fully diluted earnings per share of 23 cents (on 17.1 million shares) and 20 cents (on 20 million shares), respectively, in the first nine months of 1999. On August 28, 2000, PEC Solutions, Inc. acquired the outstanding stock of Viking Viking Either of two unmanned U.S. spacecraft launched by NASA in 1975. After nearly yearlong journeys, Vikings 1 and 2 entered orbits around Mars and released landers that touched down on the planet and relayed measurements of properties of its atmosphere and soil, as well Technology, Inc. for $2.0 million cash plus the assumption of debt. The transaction resulted in the recognition of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $4.6 million of goodwill. Viking had twenty employees at the time of the acquisition who will remain with the company. "We are extremely pleased with the caliber and number of high-value eGovernment See e-government. applications of Internet technology we saw emerging in the third quarter. In this landscape of increasing opportunity, the company will continue to aggressively pursue larger programs in order to accelerate growth in our core service areas," said Paul Paul, 1901–64, king of the Hellenes (1947–64), brother and successor of George II. He married (1938) Princess Frederika of Brunswick. During Paul's reign Greece followed a pro-Western policy, and the Cyprus question was temporarily resolved. G. Rice, PEC Solutions Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. . Rice also noted several key business achievements in the third quarter: -- PEC is a member of EDS's successful "Information Strike Force" Team, which was awarded the Navy/Marine Corps Internet, the Internet, the, international computer network linking together thousands of individual networks at military and government agencies, educational institutions, nonprofit organizations, industrial and financial corporations of all sizes, and commercial enterprises largest Federal information technology contract in history, valued at $6.9 billion. In support of this major award, PEC will provide transition planning and execution services, perform system-capacity planning, and provide support in the information assurance and Public Key Infrastructure roll-out. -- PEC was awarded a five-year engagement by the Administrative Office of the U.S. Courts for development and implementation support in the Case Management and Electronic Case-Filing (CM/ECF) systems program. Under this engagement, the company is establishing project offices in San Antonio, Texas, and downtown Washington, DC, and will provide more than 50 staff in support of the effort. -- Under the Department of Transportation's VANITS program, PEC was awarded contracts in three important niche service areas: E-mail/messaging, E-commerce, and Secure Communications. -- PEC completed the acquisition of Viking Technologies, Inc., a leading provider of integrated software products and advanced technology solutions for State and local law enforcement, fire, and emergency medical service agencies. The combined resources and capabilities of the companies will lead to a diverse set of quality products and solution sets for customers at all levels of government, and will serve to accelerate PEC Solutions entry into the State and local marketplace. -- PEC continued to expand the company's eGovernment business activities across traditional Federal, State and local clients, and undertook significant new engagements in the development of Web-based systems to automate back-office Government processes and the dissemination of public information. About PEC PEC Solutions is a professional services firm that helps clients harness harness, comprehensive term for the gear of a draft animal, excluding the yoke, by which it is attached to the load that it pulls. Although harnesses are used on dogs (for drawing travois and dogsleds), on goats, and sometimes on oxen, the typical harness is for the power of the Internet and other advanced technologies to improve organizational performance Organizational performance comprises the actual output or results of an organization as measured against its intended outputs (or goals and objectives). Specialists in many fields are concerned with organizational performance including strategic planners, operations, . The company specializes in Web-Enabling Government(sm) by planning, designing, building, and managing high-technology solutions that enhance productivity and improve services to the public. PEC Solutions is based 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. , with offices around the nation. Visit the company on the Web at www.pec.com. This press release may contain forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. information within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and is subject to the 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. created by those sections. PEC Solutions assumes no obligation to update the information contained in this press release. PEC Solutions' future results may be affected by its ability to continue to implement its eGovernment solutions, its dependence on the federal government and other federal government contractors A government contractor is a private company that produces goods or services under contract for the government. Often the terms of the contract specify cost plus – i.e., the contractor gets paid for its costs, plus a specified profit margin. as its major customers, its dependence on procuring Procuring, in general, is the act of acquiring goods or services, usually by contract. It may refer to:
Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. government contracts, its dependence on hiring and retaining qualified professionals, potential fluctuations in its quarterly operating results, its dependence on certain key employees and its ability to timely and effectively integrate the businesses it may acquire.
PEC SOLUTIONS, INC.
UNAUDITED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
AS OF AS OF
SEPT 30, DEC. 31,
2000 1999
------- -------
(UNAUDITED)
ASSETS
Current assets:
Cash and cash equivalents $ 7,294 $ 7,981
Short-term investments 17,434 --
Accounts receivable, net 11,948 13,241
Other current assets 1,785 924
------- -------
Total current assets 38,461 22,146
Property and equipment,
net 3,084 1,507
Marketable securities 9,469 --
Goodwill, net 4,524 --
Other assets 3,677 747
------- -------
Total assets $59,215 $24,400
======= =======
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and
accrued expenses $ 3,430 $ 2,425
Advanced payments on
contracts 1,250 1,473
Dividends payable -- 413
Retirement plan
contribution payable 757 --
Accrued payroll 2,084 3,249
Accrued vacation 1,239 903
Other current liabilities 613 373
------- -------
Total current liabilities 9,373 8,836
Long-term liabilities:
Supplemental retirement
program liability 439 281
Deferred rent payable 337 --
Other long-term liabilities 15 --
======= =======
Total long-term liabilities 791 281
======= =======
Total liabilities 10,164 9,117
------- -------
Commitments and contingencies:
Stockholders' equity
Undesignated capital
stock, 10,000,000 shares
authorized -- --
Common stock, $0.01 par
value, 75,000,000 shares
authorized, 22,288,170 and
17,706,372 shares issued and
outstanding, respectively 223 177
Additional paid-in capital 28,584 601
Retained earnings 20,244 14,505
------- -------
Total stockholders' equity 49,051 15,283
------- -------
Total liabilities and
stockholders' equity $59,215 $24,400
======= =======
See notes to financial statements (unaudited).
PEC SOLUTIONS, INC.
UNAUDITED STATEMENTS OF INCOME
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED NINE MONTHS ENDED
----------------- -----------------
SEPT 30, SEPT 30, SEPT 30, SEPT 30,
2000 1999 2000 1999
Revenues $17,695 $13,394 $49,892 $38,593
------- ------- ------- -------
Operating costs
and expenses:
Direct costs 9,337 7,618 27,267 22,069
General and
administrative
expenses 4,276 2,759 12,857 8,797
Sales and
marketing
expenses 935 549 2,070 1,456
Amortization of
goodwill 76 -- 76 --
------- ------- ------- -------
Total operating
costs and expenses 14,624 10,926 42,270 32,322
------- ------- ------- -------
Operating income 3,071 2,468 7,622 6,272
Other income, net 673 63 1,261 141
------- ------- ------- -------
Income before
income taxes 3,744 2,531 8,883 6,413
Provision for
income taxes 1,475 962 3,458 2,437
------- ------- ------- -------
Net income $ 2,269 $ 1,569 $ 5,425 $ 3,976
------- ------- ------- -------
Earnings per
share:
Basic $ 0.10 $ 0.09 $ 0.26 $ 0.23
------- ------- ------- -------
Diluted $ 0.09 $ 0.08 $ 0.22 $ 0.20
------- ------- ------- -------
Weighted average
shares used in
computing earnings
per share:
Basic 22,275 17,039 20,711 17,057
------- ------- ------- -------
Diluted 25,285 20,113 24,140 20,019
------- ------- ------- -------
See notes to financial statements (unaudited).
PEC SOLUTIONS, INC.
UNAUDITED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
NINE MONTHS ENDING
-------------------------
SEPT 30, SEPT 30,
2000 1999
Cash flows from operating activities:
Net income $ 5,425 $ 3,976
Adjustments to reconcile net income
to net cash provided by
operating activities:
Depreciation and amortization 504 536
Deferred rent 337 --
Gain/(loss) on disposal of assets -- 3
Amortization of goodwill 76 --
Changes in operating assets and liabilities:
Accounts receivable, net (763) 966
Other current assets (853) 5
Other assets (239) (189)
Accounts payable and accrued expenses 746 179
Advance payments on contracts (1,260) (14)
Retirement plan contribution payable 757 (733)
Accrued payroll (1,329) (554)
Accrued vacation 267 202
Other current liabilities 574 (103)
Supplemental retirement program liability 158 127
Other long-term liabilities (1) --
-------- --------
Net cash provided by operating activities 4,399 4,401
-------- --------
Cash flows from investing activities:
Purchases of property and equipment (1,283) (540)
Capitalized software (32) --
Proceeds from sale of property and
equipment -- 6
Purchases of short-term investments (17,434) --
Purchases of long-term investments (9,469) --
Purchase of subsidiary (1,855) --
-------- --------
Net cash used by investing activities (30,073) (534)
-------- --------
Cash flows from financing activities:
Dividends paid (413) (348)
Proceeds from issuance of common
stock 28,429 199
Repurchases of common stock -- (1,291)
Common stock offering costs (883) --
Notes payable (2,146) 199
-------- --------
Net cash provided (used) by
financing activities 24,987 (1,241)
-------- --------
Net increase (decrease) in
cash (687) 2,626
Cash and cash equivalents at
beginning of period 7,981 5,367
-------- --------
Cash and cash equivalents
at end of period $ 7,294 $ 7,993
======== ========
Income taxes paid $ 3,371 $ 2,475
-------- --------
Interest paid $ 176 $ 33
-------- --------
See notes to financial statements (unaudited).
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