PEC Solutions Reports Record Third Quarter Revenue of $55.2 Million; Fully Diluted Third Quarter EPS was 15 Cents.FAIRFAX, Va. -- 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 technology services firm specializing in high-end eGovernment solutions, today reported third quarter 2004 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 (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 15 cents (on 29.0 million shares) for the quarter, compared to 15 cents (on 30.0 million shares) in the comparable quarter a year ago.
Net income was $4.3 million in the third quarter of 2004, compared to $4.4 million in the third quarter 2003. PEC also reported third quarter 2004 revenue of $55.2 million, compared to $43.3 million for the same period in 2003.
Stuart Lloyd, PEC's Chief Financial Officer, commented, "PEC's revenues and earnings for the third quarter were in line with our guidance for the quarter. In addition, the results reflect our acquisition of AC Technologies, Inc. (ACT) on September 9, 2004, which contributed results for a portion of the last month of the quarter."
Going forward, revenue is expected to be between $64 and $66 million for the fourth quarter 2004, with diluted EPS for the quarter expected to be 16 cents. Full year 2004 revenue is expected to be between $204 and $206 million, and full year diluted EPS is expected to be 56 cents. PEC's guidance for the full year 2005 is for revenue to grow between 33% to 37%, resulting in revenue between $270 and $280 million. EPS is estimated to be between 69 and 72 cents for the full year 2005.
Paul Rice Paul Rice is the founder and CEO of the non-profit organisation Transfair USA. He lived in Nicaragua for 11 years working with local coffee farmers before he returned to the US to found what is now the largest fair trade organisation in the US. , PEC's President, commented, "PEC just completed one of the busiest Government fiscal year-end Fiscal Year-End
The completion of a one-year, or 12-month, accounting period.
The reason that a company's fiscal year often differs from the calendar year and does not close on Dec 31, is due to the nature of company's needs. periods in our history. We have established solid traction in a number of new project starts and through enhancements to existing activities. In addition, both of our recent acquisitions, AC Technologies and IITC IITC International Indian Treaty Council
IITC International Interconnect Technology Conference
IITC International Imaging Technology Council
IITC Integrated Information Technology Corporation
IITC Intertribal Information Technology Company , contributed solid going-forward business with renewals in their contract base and new opportunities."
Acquisition of AC Technologies
On September 9, 2004, PEC completed the acquisition of AC Technologies, a certified Capability Maturity Model(R) (CMM (Capability Maturity Model) A process developed by SEI in 1986 to help improve, over time, the application of an organization's supporting software technologies. ) Level 3 software developer and network engineering services firm. ACT's largest client, the U.S. Postal Service The U.S. Postal Service (USPS) processes and delivers mail to individuals and businesses within the United States. The service seeks to improve its performance through the development of efficient mail-handling systems and operates its own planning and engineering programs. , recently awarded the company tasking valued at $13.8 million for continuing the development of the PostalOne! System, and for additional support for the development and administration of USPS (1) (Uninterruptible Switching Power Supply) A power supply for a computer that contains its own battery and uninterruptible power supply (UPS) circuitry. See power supply and UPS. automation.
For the third quarter of 2004, PEC received aggregate funded contract awards and modifications valued at $89 million. The awards include incremental Additional or increased growth, bulk, quantity, number, or value; enlarged.
Incremental cost is additional or increased cost of an item or service apart from its actual cost. funding across existing project activities, as well as initial funding actions for a number of new project awards.
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 - PEC received new contracts and continuation funding from various components of the Department of Homeland Security Noun 1. Department of Homeland Security - the federal department that administers all matters relating to homeland security
executive department - a federal department in the executive branch of the government of the United States (DHS DHS Department of Homeland Security (USA)
DHS Department of Human Services
DHS Department of Health Services
DHS Demographic and Health Surveys
DHS Dirhams (Morocco national currency) ) including the Border and Transportation Security Directorate, the Coast Guard, the Transportation Security Administration, Bureaus of Citizenship and Immigration immigration, entrance of a person (an alien) into a new country for the purpose of establishing permanent residence. Motives for immigration, like those for migration generally, are often economic, although religious or political factors may be very important. Services, the Customs and Border Patrol, and Immigration and Customs Enforcement.
DHS exercised the first option year of PEC's US-VISIT US-VISIT United States Visitor and Immigrant Status Indicator Technology program, where the company is providing a wide-range of program management support services support services Psychology Non-health care-related ancillary services–eg, transportation, financial aid, support groups, homemaker services, respite services, and other services . PEC was also awarded a contract to provide program support services for DHS's Bureau of Citizenship and Immigration Services (DHS/CIS) National Customer Service Center, as well as tasking to provide technical support services to assist with the execution of information technology programs for the Office of the Chief Information Officer of the DHS/CIS.
The company was awarded a new contract to provide development support for a module of a case tracking system for the Bureau of Immigration and Customs Enforcement. The system is a Web-based module that will support the booking and tracking of detainees while in custody, and activities associated with removal proceedings. PEC also continues to support development of a range of intelligence, analysis, and information sharing See data conferencing. applications for the DHS.
Criminal Justice and Intelligence - PEC's business in law enforcement, court and judicial systems, and intelligence saw increased activity in new programs and enhanced funding.
PEC received funding to continue development of the Joint Application Booking System, a system to assist in acquiring and sharing biometric and other arrest information across components of the Department of Justice (DOJ (Department Of Justice) The legal arm of the U.S. government that represents the public interest of the United States. It is headed by the Attorney General. ). PEC also received a significant new DOJ contract award to support the Executive Office for Immigration Review The Executive Office for Immigration Review (EOIR) is an office of the United States Department of Justice and is responsible for adjudicating immigration cases in the United States. to provide management and development services for the eWorld project, an integrated system designed to streamline the processing of appeals of orders from immigration judges.
The company was selected to provide a public safety solution for the Norfolk Southern Railway
PEC received a number of awards from the Drug Enforcement Administration The Drug Enforcement Administration (DEA) was established in 1973 by President richard m. nixon as part of the Justice Department, thus uniting a number of federal drug agencies that had often worked at cross-purposes. (DEA DEA - Data Encryption Algorithm ), including contracts for continued support of its Electronic File Room operations and maintenance; its investigative management program; and its case tracking system (IMPACT), and a new contract in which PEC will support classified network operations. PEC also received tasking to implement production operations of the DEA's Diversion Control Public Key Infrastructure (PKI (Public Key Infrastructure) A framework for creating a secure method for exchanging information based on public key cryptography. The foundation of a PKI is the certificate authority (CA), which issues digital certificates that authenticate the identity of ) program initiatives.
The company received awards of two 5-year Judiciary Multiple Awards Schedules from the Administrative Office of the U.S. Courts for Information Technology Technical Support, and project management planning and acquisition support, allowing PEC to continue in its position as a leading provider of technology and management services to the Federal Judiciary.
The Nuclear Regulatory Commission Nuclear Regulatory Commission (NRC), an independent U.S. government commission, created by the Energy Reorganization Act of 1974 and charged with licensing and regulating civilian use of nuclear energy to protect the public and the environment. (NRC NRC
1. National Research Council
2. Nuclear Regulatory Commission
Noun 1. NRC - an independent federal agency created in 1974 to license and regulate nuclear power plants ) awarded PEC two contracts. PEC will develop a system to support the new SafeSource business practices that handle nuclear materials licensing, and secondly, PEC will support the upcoming Yucca Mountain Yucca Mountain, mountain in the SW Nevada desert about 100 mi (161 km) northwest of Las Vegas. It is the proposed site of a Dept. of Energy (DOE) repository for up to 77,000 metric tons of nuclear waste (including commercial and defense spent fuel and high-level licensing hearings in Las Vegas Las Vegas (läs vā`gəs), city (1990 pop. 258,295), seat of Clark co., S Nev.; inc. 1911. It is the largest city in Nevada and the center of one of the fastest-growing urban areas in the United States. by enhancing and deploying a second Digital Data Management System to support the automation of the license hearings.
PEC was a member of Northrop Grumman's team that competed successfully for a National Security Agency program. PEC will assist in developing program documentation and management of core program office activities including integrated program schedules.
Defense - PEC continued to receive awards and enhanced funding for new and continuing programs in the defense sector including the Navy, Army, and Air Force.
IITC, a PEC subsidiary, will continue to support the Air Force's network control operations center The facility or location on an installation, base, or facility used by the commander to command, control, and coordinate all crisis activities. See also base defense operations center; command center. and provide administrative support for their communications switching and telemetry telemetry
Highly automated communications process by which data are collected from instruments located at remote or inaccessible points and transmitted to receiving equipment for measurement, monitoring, display, and recording. processing.
The Navy exercised options for PEC's continued work on its Iran Litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute.
When a person begins a civil lawsuit, the person enters into a process called litigation. Program. Under this program, PEC will provide research support and documentary evidence A type of written proof that is offered at a trial to establish the existence or nonexistence of a fact that is in dispute.
Letters, contracts, deeds, licenses, certificates, tickets, or other writings are documentary evidence. for Department of State responses to Iranian claims. The Navy awarded PEC a contract to provide business and financial management support to the Program Executive Officer, Integrated Warfare The conduct of military operations in any combat environment wherein opposing forces employ non-conventional weapons in combination with conventional weapons. Systems (PEO IWS PEO IWS Program Executive Office Integrated Warfare Systems ), and PEC will assist the Navy PEO Ships in program planning, budget planning, and financial execution tracking for the PEO Ships staff-level business manager and chief financial officer.
PEC was also awarded a contract to provide the U.S. Army with network, technical, and customer services in support of its operations in the National Capitol Region. The Army Medical Information Technology Center awarded PEC a contract to support the deployment of Microsoft's Windows(R) Server and Exchange(R) Server to 50 sites worldwide.
Civilian e-Government - In the Civilian e-Government sector, PEC received a number of awards and continuations of existing contracts in support of the Department of Veterans Affairs Veterans Affairs is a term of the business that deals with the relation between a government and its veteran communities, usually administered by the designated government agency. , the National Institutes of Health, the Internal Revenue Service, Patent and Trademark Office, National Oceanic Atmosphere Administration, and the Departments of Education and Agriculture.
The Department of Education (ED) awarded PEC a contract to provide information technology acquisition and program management support for the Migrant Student Information Exchange project. Additionally, PEC received awards to assist ED by providing support for their budget system, internet and intranet infrastructure, and information assurance activities.
The Social Security Administration issued a follow-on task to existing work to provide a consolidated authentication (1) Verifying the integrity of a transmitted message. See message integrity, e-mail authentication and MAC.
(2) Verifying the identity of a user logging into a network. and access control system.
About PEC Solutions, Inc.
PEC, founded in 1985, is a professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. firm that helps government clients harness the power of the Internet and other advanced technologies to improve mission performance. The company specializes in Web-Enabling Government(R) by providing secure, interoperable technology solutions for clients in homeland security, criminal justice and intelligence, defense, and civilian agencies within the federal government and at state and local levels. PEC is based in Fairfax County, Virginia Fairfax County is a county in Northern Virginia, in the United States. As of 2005, the estimated population of the county is 1,041,200; making it by far the most populous jurisdiction in the Commonwealth of Virginia, and larger than seven states. , with offices around the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . Visit the company on the Web at www.pec.com.
For more information, contact Martha Hill Martha Hill (December 1, 1900 – November 19, 1995) was an influential American dance instructor. She was the first Director of Dance at the Juilliard School, and held that position for 34 years. Biography
Hill was born in East Palestine, Ohio. , PEC Director of Investor Relations Investor relations
The process by which the corporation communicates with its investors. , at 703-679-4900.
Carnegie Mellon(R) and Capability Maturity Model(R) are registered trademarks of the Carnegie Mellon University Carnegie Mellon University, at Pittsburgh, Pa.; est. 1967 through the merger of the Carnegie Institute of Technology (founded 1900, opened 1905) and the Mellon Institute of Industrial Research (founded 1913). .
Windows(R) Server and Exchange(R) Server are registered trademarks of Microsoft Corporation (company) Microsoft Corporation - The biggest supplier of operating systems and other software for IBM PC compatibles. Software products include MS-DOS, Microsoft Windows, Windows NT, Microsoft Access, LAN Manager, MS Client, SQL Server, Open Data Base Connectivity (ODBC), MS Mail, .
This press release may contain forward-looking 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 assumes no obligation to update the information contained in this press release. PEC's future results may be affected by its ability to continue to implement its government technology solutions, its dependence on the federal government and state and local governments 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, timely passage of components of the federal budget, timely obligations of funding by the federal and state governments, its dependence on procuring, pricing and performing short-term government contracts, its dependence on hiring and retaining qualified professionals, potential fluctuations in its quarterly operating results, including seasonal impacts, its dependence on certain key employees and its ability to timely and effectively integrate the businesses it may acquire. For further information about 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. and other specific risks and uncertainties, please refer to PEC's recent SEC filings, including the company's Annual Report on Form 10-K Form 10-K
A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information.
See 10-K. filed with the SEC on March 15, 2004, which are available on the company's website (www.pec.com).
PEC SOLUTIONS, INC. CONSOLIDATED BALANCE SHEETS (Dollars in thousands) As of As of September 30, December 31, 2004 2003 ------------- ------------ (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 14,119 $ 33,401 Short-term investments 4,880 38,274 Accounts receivable, net 63,875 48,356 Other current assets 16,011 1,745 ------------- ------------ Total current assets 98,885 121,776 Property and equipment, net 26,204 26,674 Investments 24,600 37,587 Goodwill 74,400 16,932 Intangibles, net 20,790 2,849 Other assets 4,638 4,553 ------------- ------------ Total assets $ 249,517 $ 210,371 ============= ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued expenses $ 14,801 $ 5,576 Advance payments on contracts 1,095 439 Retirement plan contribution payable 1,306 -- Accrued payroll 5,030 5,503 Accrued vacation 4,451 2,839 Other current liabilities 14,280 1,163 ------------- ------------ Total current liabilities 40,963 15,520 ------------- ------------ Long-term liabilities: Supplemental retirement program liability 1,560 1,417 Deferred rent payable 2,111 1,790 Long-term lease obligation 23,212 23,062 ------------- ------------ Total long-term liabilities 26,883 26,269 ------------- ------------ Total liabilities 67,846 41,789 ------------- ------------ Commitments and contingencies Stockholders' equity: Undesignated capital stock, 10,000,000 shares authorized -- -- Common stock, $0.01 par value, 75,000,000 shares authorized, 27,443,938 and 27,303,041 shares issued and outstanding, respectively 275 273 Additional paid-in capital 96,668 95,219 Retained earnings 84,787 73,140 Accumulated other comprehensive loss (59) (50) ------------- ------------ Total stockholders' equity 181,671 168,582 ------------- ------------ Total liabilities and stockholders' equity $ 249,517 $ 210,371 ============= ============ PEC SOLUTIONS, INC. CONSOLIDATED STATEMENTS OF INCOME (Amounts in thousands, except per share data) Three Months Ended Nine Months Ended ------------------- ------------------ Sept. 30, Sept. 30, Sept. 30, Sept. 30, 2004 2003 2004 2003 --------- --------- -------- --------- (Unaudited) Revenues $55,216 43,295 140,089 $131,025 --------- --------- -------- --------- Operating costs and expenses: Direct costs 34,500 25,821 86,236 78,503 General and administrative expenses 10,798 8,758 28,783 26,992 Sales and marketing expenses 1,876 1,250 4,400 4,331 Goodwill and intangible amortization 644 213 1,160 638 --------- --------- -------- --------- Total operating costs and expenses 47,818 36,042 120,579 110,464 --------- --------- -------- --------- Operating income 7,398 7,253 19,510 20,561 Investment and other income 465 604 1,416 1,781 Interest expense (670) (664) (2,006) (1,986) --------- --------- -------- --------- Income before income taxes 7,193 7,193 18,920 20,356 Provision for income taxes 2,852 2,751 7,252 7,786 --------- --------- -------- --------- Net income $4,341 $4,442 $11,668 $12,570 ========= ========= ======== ========= Earnings per share: Basic $0.16 $0.16 $0.43 $0.46 ========= ========= ======== ========= Diluted $0.15 $0.15 $0.40 $0.42 ========= ========= ======== ========= Weighted average shares used in computing earnings per share: Basic 27,460 27,151 27,370 27,045 ========= ========= ======== ========= Diluted 28,998 29,978 28,996 29,811 ========= ========= ======== ========= PEC SOLUTIONS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) Nine Months Ending September 30, September 30, 2004 2003 (Unaudited) Cash flows from operating activities: Net income $11,668 $12,570 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 2,038 2,096 Amortization of intangibles 1,159 638 Amortization of bond premium and discounts, net 207 164 Gain on sale of assets (5) -- Deferred rent payable 272 340 Deferred income taxes 594 (540) Bad debt expense 102 15 Gain from investment in building (722) (708) Non-cash charge related to building 150 172 Other -- (3) Changes in operating assets and liabilities: Accounts receivable, net 2,220 3,448 Other current assets (13,946) 1,293 Other assets (15) (332) Accounts payable and accrued expenses 4,004 (789) Advance payments on contracts 42 (599) Retirement plan contribution payable 1,158 1,581 Accrued payroll (2,560) (3,481) Accrued vacation 389 460 Other current liabilities 11,400 277 Supplemental retirement program liability 136 487 ------- ------- Net cash provided by operating activities 18,291 17,089 Cash flows from investing activities: Purchases of property and equipment (775) (1,005) Proceeds from sale of property and equipment 5 18 Purchases of short-term investments (16,881) (47,115) Proceeds from sale of short-term investments 50,185 41,444 Purchase of business, net of cash acquired (84,582) -- Capitalized software (597) (493) Purchases of long-term investments (13,616) (16,835) Proceeds from sale of long-term investments 26,501 5,130 Distributions from building investment 664 640 ------- ------- Net cash used by investing activities (39,096) (18,216) Cash flows from financing activities: Proceeds from issuance of common stock 1,429 2,769 Proceeds from sale of subsidiary common stock 16,994 -- Payment of notes payable (16,900) -- ------- ------- Net cash provided by financing activities 1,523 2,769 ------- ------- Net increase (decrease) in cash (19,282) 1,642 Cash and cash equivalents at beginning of period 33,401 21,176 ------- ------- Cash and cash equivalents at end of period $14,119 $22,818 ======= ======= Income taxes paid $ 8,313 $ 5,934 ======= ======= Interest paid $ 2,100 $ 1,765 ======= ======= Non-cash transactions: Common stock repurchased and retired in exchange for shares in cashless exercise of stock options $ 22 $ 204 ======= =======