Click here to close now.

Welcome!

Cloud Expo Authors: Lori MacVittie, Leon Fayer, Elizabeth White, Greg O'Connor, Asad Ali

News Feed Item

NCI Reports Second Quarter 2014 Financial and Operating Results

NCI, Inc. (NASDAQ: NCIT), a leading provider of information technology (IT), engineering, logistics, and professional solutions and services to U.S. Federal Government agencies, today announced its financial and operating results for the second quarter ended June 30, 2014.

Second quarter 2014 revenue exceeded the midpoint of management’s guidance range issued last quarter. Diluted earnings per share (EPS) exceeded the high end of guidance by $0.02.

Second Quarter 2014 Results

For the second quarter of 2014, NCI reported revenue of $77.8 million compared with second quarter 2013 revenue of $83.0 million, a decrease of 6.2%. The year-over-year decline was primarily the result of the expiration of certain task orders and contracts, and, to a lesser extent, reductions in scope of work.

Operating income for the second quarter of 2014 was $4.1 million compared with $3.3 million in the second quarter of last year. Operating margin was 5.3% for the second quarter of this year and 4.0% for the second quarter of 2013. The increase in year-over-year operating income and margin resulted from improved contract performance, increased direct labor utilization and lower overhead costs.

Net income for the second quarter of 2014 was $2.4 million, or 18 cents per diluted share, compared with $1.8 million, or 14 cents per diluted share, for the second quarter of last year. The year-over-year increase in net income was attributable to improved operating income, lower interest expense, and a lower effective income tax rate. Diluted EPS increased for the second quarter of 2014 as a result of improved net income, partially offset by higher weighted average diluted shares outstanding.

Days sales outstanding (DSO) for the second quarter ended June 30, 2014, was 66 days, compared with 68 days at March 31, 2014, and 74 days at December 31, 2013.

Net cash provided by operating activities was $13.7 million for the six months ended June 30, 2014, $12.6 million of which was generated in the second quarter.

NCI reported total backlog at June 30, 2014, of $362 million, of which $125 million was funded. This compared with total backlog of $440 million at March 31, 2014, of which $159 million was funded.

Management’s Outlook

Based on the company’s current contract backlog and management’s estimate as to future tasking and contract awards, NCI is issuing guidance for the third quarter of 2014 and updating guidance previously issued for fiscal year 2014. The table below represents management’s current expectations about future financial performance based on information available at this time:

             
     

Third Quarter
Fiscal Year 2014 Ending
September 30, 2014

   

Fiscal Year
Ending
December 31, 2014

Revenue     $70 million–$76 million     $304 million–$316 million
Diluted EPS     $0.14–$0.16    

$0.60–$0.641

Diluted projected share count     13.8 million     13.8 million
       

“NCI continued to meet or exceed operating results expectations in the second quarter. We also posted impressive cash flow from operations during the quarter,” said Charles K. Narang, NCI’s Chairman and CEO. “However, bookings continue to pose a challenge for NCI. We are doing everything possible to rebuild NCI’s backlog in the second half of 2014 and into the first half of 2015. We remain confident that we have the pieces in place to win significant new business awards in the coming months.”

“We expect to submit bids for contracts worth approximately $1 billion throughout the remainder of 2014, including three to four opportunities each valued at more than $100 million,” said NCI’s President, Brian J. Clark. “We’ve also added increased energy and focus in pursuing acquisitions that would complement NCI’s core capabilities or add new ones in promising areas of federal spending. We believe that such a move would help shore up our backlog, add significant revenue, and provide valuable synergies to improve our profitability going forward.”

Conference Call Information

As previously announced, NCI will conduct a conference call today at 4:30 p.m. EDT to discuss second quarter 2014 results and guidance for the third quarter and fiscal year 2014.

Analysts and institutional investors may listen to the conference call by dialing (888) 510-1786 (United States/Canada) or (719) 457-2697 (international) with pass code 1970700. The conference call will be provided simultaneously as a webcast through a link on the NCI website (www.nciinc.com).

A replay of the conference call will be available approximately two hours after the conclusion of the call through August 14, 2014, by dialing (877) 870-5176 (United States/Canada) or (858) 384-5517 (international) and entering pass code 1970700.

About NCI, Inc.

NCI is a leading provider of enterprise solutions and services to U.S. defense, intelligence, health care, and civilian government agencies. The company has the expertise and proven track record to solve its customers’ most important and complex mission challenges through technology and innovation. NCI’s team of highly skilled professionals focuses on delivering cost-effective solutions and services in the areas of cybersecurity and information assurance; engineering and logistics support; enterprise information management and advanced analytics; cloud computing and IT infrastructure optimization; health IT and medical support; IT service management; software and systems development/integration; and modeling, simulation, and training. Headquartered in Reston, Virginia, NCI has approximately 1,900 employees operating at more than 100 locations worldwide. NCI: Trust. Integrity. Performance. For more information, visit www.nciinc.com or email [email protected]. Like us on Facebook and follow us on Twitter (@nciinc_) and LinkedIn.

Forward-Looking Statement: Statements and assumptions made in this press release that do not address historical facts constitute “forward-looking” statements that NCI believes to be within the definition in the Private Securities Litigation Reform Act of 1995 and involve risks and uncertainties, many of which are outside of our control. Words such as “may,” “will,” “intends,” “should,” “expects,” “plans,” “projects,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue,” or “opportunity,” or the negative of these terms or words of similar import are intended to identify forward-looking statements.

Such statements are subject to factors that could cause actual results to differ materially from anticipated results. The factors that could cause actual results to differ materially from those anticipated include, but are not limited to, the following: our dependence on our contracts with Federal Government agencies, particularly within the U.S. Department of Defense, for substantially all of our revenue; a reduction in the overall U.S. Defense budget, volatility in spending authorizations for Defense- and Intelligence-related programs by the U.S. Federal Government or a shift in spending to programs in areas where we do not currently provide services; Federal Government shutdowns (such as that which occurred during the Federal Government’s 1996 and 2014 fiscal years), other delays in the Federal Government appropriations process, or budgetary cuts resulting from Congressional committee recommendations or automatic sequestration under the Budget Control Act of 2011 (as amended by the American Taxpayer Relief Act of 2012 and the Consolidated Appropriations Act of 2014), risk of contract performance or termination; failure to achieve contract awards in connection with recompetes for present business and/or competition for new business; adverse results of Federal Government audits of our government contracts; Government contract procurement (such as bid protest, small business set asides, etc.) and termination risks; competitive factors such as pricing pressures and competition to hire and retain employees (particularly those with security clearances); Federal Government agencies awarding contracts on a technically acceptable/lowest cost basis in order to reduce expenditures; failure to successfully identify and integrate future acquired companies or businesses into our operations or to realize any accretive or synergistic effects from such acquisitions or to effectively integrate acquisitions appropriate to the achievement of our strategic plans; economic conditions in the United States, including conditions that result from terrorist activities or war; material changes in laws or regulations applicable to our businesses, particularly legislation affecting (i) government contracts for services, (ii) outsourcing of activities that have been performed by the government, (iii) government contracts containing organizational conflict of interest (OCI) clauses, (iv) delays related to agency specific funding freezes, (v) competition for task orders under Government Wide Acquisition Contracts (GWACs), agency-specific Indefinite Delivery/Indefinite Quantity (IDIQ) contracts and/or schedule contracts with the General Services Administration; and (vi) our own ability to achieve the objectives of near-term or long-range business plans, including internal systems failures. These and other risk factors are more fully discussed in the section titled “Risk Factors” in NCI's Form 10-K filed with the Securities and Exchange Commission (SEC), and from time to time, in other filings with the SEC, such as our Forms 8-K and Forms 10-Q.

Any projections of revenue, margins, expenses, earnings, tax provisions, cash flows, benefit obligations, or share repurchases, and any statements of the plans, strategies and objectives of management for future operations, the execution of cost reduction programs, and restructuring and integration plans are also subject to factors that could cause actual results to differ materially from anticipated results.

The forward-looking statements included in this news release are only made as of the date of this news release, and NCI undertakes no obligation to publicly update any of the forward-looking statements made herein, whether as a result of new information, subsequent events or circumstances, or changes in expectations or otherwise.

 

NCI, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

(in thousands, except per share data)

   
 
Three months ended June 30, Six months ended June 30,
2014   2013 2014   2013
 
Revenue $ 77,845 $ 82,971 $

166,929

$ 174,512
 
Operating expenses:
Cost of revenue 65,929 71,991 143,932 152,468
General and administrative expenses 6,364 6,129

13,763

11,990
Depreciation and amortization   1,450   1,527  

2,899

  3,145
Total operating expenses   73,743   79,647   160,594   167,603
 
Operating income 4,102 3,324 6,335 6,909
Interest expense, net   82   248  

208

  499
 
Income before income taxes 4,020 3,076 6,127 6,410
Provision for income taxes   1,594   1,265  

2,460

  2,624
Net income $ 2,426 $ 1,811 $

3,667

$ 3,786
 
Earnings per common and common equivalent share:
Basic:
Weighted average shares outstanding 13,623 12,825 13,365 12,818
 
Net income per share $ 0.18 $ 0.14 $ 0.27 $ 0.30
 
Diluted:
 
Weighted average shares outstanding 13,771 12,825 13,762 12,818
 
Net income per share $ 0.18 $ 0.14 $ 0.27 $ 0.30
 
 

NCI, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in thousands, except par values)

   
 

As of
June 30,
2014

As of
December 31,
2013
Assets:
Current assets:
Cash and cash equivalents $ 12,624 $ 50
Accounts receivable, net 56,250 63,991
Deferred tax assets, net 3,276 3,217
Prepaid expenses and other current assets   3,255     2,941  
 
Total current assets 75,405 70,199
 
Property and equipment, net 8,612 9,752
Other assets 1,876 2,113
Deferred tax assets, net 39,888 39,990
Intangible assets, net   4,530     5,340  
 
Total assets $ 130,311   $ 127,394  
 
 
Liabilities and stockholders’ equity:
Current liabilities:
Accounts payable $ 14,302 $ 17,371
Accrued salaries and benefits 16,034 16,645
Deferred revenue 2,567 2,594
Other accrued expenses   5,947     4,578  
 
Total current liabilities   38,850     41,188  
 
 
Long-term debt 1,000
Other long-term liabilities   3,452     3,399  
 
Total liabilities   42,302     45,587  
 
 
Stockholders’ equity:
Class A common stock, $0.019 par value—37,500 shares authorized; 9,170 shares issued and 8,252 shares outstanding as of June 30, 2014, and 9,142 shares issued and 8,226 shares outstanding as of December 31, 2013 174 174
Class B common stock, $0.019 par value—12,500 shares authorized; 4,700 shares issued and outstanding as of June 30, 2014 and December 31, 2013 89 89
Additional paid-in capital

73,440

70,905
Treasury stock at cost—917 shares of Class A common stock as of June 30, 2014 and December 31, 2013 (8,331 ) (8,331 )
Retained earnings  

22,637

    18,970  
 
Total stockholders’ equity   88,009     81,807  
 
 
Total liabilities and stockholders’ equity $ 130,311     127,394  
 
 
NCI, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in thousands)

   
 
Six months ended June 30,
2014 2013
Cash flows from operating activities:
Net income $

3,667

$ 3,786
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization

2,899

3,145
Share-based payments 2,413 657
Deferred income taxes 43 (6 )
Changes in operating assets and liabilities:
Accounts receivable, net 7,741 (810 )
Prepaid expenses and other assets

(77

) 4,700
Accounts payable (3,069 ) (3,816 )
Accrued expenses and other liabilities   78     551  
 
Net cash provided by operating activities   13,695     8,207  
 
 
Cash flows from investing activities:
Purchases of property and equipment  

(243

)   (454 )
 
Net cash used in investing activities  

(243

)   (454 )
 
 
Cash flows from financing activities:
Borrowings under credit facility 42,496 60,300
Repayments on credit facility (43,496 ) (67,800 )
Proceeds from exercise of stock options 191
Shares repurchased for tax withholdings on vesting of restricted shares   (69 )    
 
Net cash used in financing activities   (878 )   (7,500 )
 
 
Net change in cash and cash equivalents 12,574 253
Cash and cash equivalents, beginning of period   50     763  
 
Cash and cash equivalents, end of period $ 12,624   $ 1,016  
 
 
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 180   $ 403  
 
Income taxes $ 1,462   $ 135  
 
Non-cash investing and finance activities during the period for:
Leasehold improvements acquired under tenant improvement funds   706      
 

1 As previously disclosed, in the first quarter of 2014, NCI recognized $1.5 million, or $0.07 per diluted share, of accelerated stock compensation expense. Diluted EPS estimates for fiscal year 2014 exclude the effects of the accelerated stock compensation expense. NCI believes that removing the effects of the accelerated stock compensation expense from operating income, net income, and earnings per share portrays NCI’s estimated fiscal year 2014 financial results in a more consistent manner. The company’s position is that this non-GAAP financial measure provides useful information because it allows management and investors to better assess NCI’s comparable financial results absent the expense. This non-GAAP financial measure should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. Actual results for the first six months of 2014 presented in the table “Condensed Consolidated Statements of Income” contained in today’s press release include the effects of the accelerated stock compensation expense.

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@CloudExpo Stories
Countless business models have spawned from the IaaS industry. Resell Web hosting, blogs, public cloud, and on and on. With the overwhelming amount of tools available to us, it's sometimes easy to overlook that many of them are just new skins of resources we've had for a long time. In his General Session at 16th Cloud Expo, Phil Jackson, Lead Developer Advocate at SoftLayer, will break down what we've got to work with and discuss the benefits and pitfalls to discover how we can best use them t...
SYS-CON Events announced today Arista Networks will exhibit at SYS-CON's DevOps Summit 2015 New York, which will take place June 9-11, 2015, at the Javits Center in New York City, NY. Arista Networks was founded to deliver software-driven cloud networking solutions for large data center and computing environments. Arista’s award-winning 10/40/100GbE switches redefine scalability, robustness, and price-performance, with over 3,000 customers and more than three million cloud networking ports depl...
Hosted PaaS providers have given independent developers and startups huge advantages in efficiency and reduced time-to-market over their more process-bound counterparts in enterprises. Software frameworks are now available that allow enterprise IT departments to provide these same advantages for developers in their own organization. In his workshop session at DevOps Summit, Troy Topnik, ActiveState’s Technical Product Manager, will show how on-prem or cloud-hosted Private PaaS can enable organ...
The world's leading Cloud event, Cloud Expo has launched Microservices Journal on the SYS-CON.com portal, featuring over 19,000 original articles, news stories, features, and blog entries. DevOps Journal is focused on this critical enterprise IT topic in the world of cloud computing. Microservices Journal offers top articles, news stories, and blog posts from the world's well-known experts and guarantees better exposure for its authors than any other publication. Follow new article posts on T...
Plutora provides enterprise release management and test environment SaaS solutions to clients in North America, Europe and Asia Pacific. Leading companies across a variety of industries, including financial services, telecommunications, retail, pharmaceutical and media, rely on Plutora's SaaS solutions to orchestrate releases and environments faster and with integrity. Products include Plutora Release Manager, Plutora Test Environment Manager and Plutora Deployment Manager.
Modern Systems announced completion of a successful project with its new Rapid Program Modernization (eavRPMa"c) software. The eavRPMa"c technology architecturally transforms legacy applications, enabling faster feature development and reducing time-to-market for critical software updates. Working with Modern Systems, the University of California at Santa Barbara (UCSB) leveraged eavRPMa"c to transform its Student Information System from Software AG's Natural syntax to a modern application lev...
SYS-CON Events announced today that SafeLogic has been named “Bag Sponsor” of SYS-CON's 16th International Cloud Expo® New York, which will take place June 9-11, 2015, at the Javits Center in New York City, NY. SafeLogic provides security products for applications in mobile and server/appliance environments. SafeLogic’s flagship product CryptoComply is a FIPS 140-2 validated cryptographic engine designed to secure data on servers, workstations, appliances, mobile devices, and in the Cloud....
SYS-CON Events announced today the IoT Bootcamp – Jumpstart Your IoT Strategy, being held June 9–10, 2015, in conjunction with 16th Cloud Expo and Internet of @ThingsExpo at the Javits Center in New York City. This is your chance to jumpstart your IoT strategy. Combined with real-world scenarios and use cases, the IoT Bootcamp is not just based on presentations but includes hands-on demos and walkthroughs. We will introduce you to a variety of Do-It-Yourself IoT platforms including Arduino, Ras...
When it comes to building applications, one database definitely does not fit all. Traditional SQL databases are great for storing highly structured, normalized data and performing analytics and reporting. NoSQL has attracted developers with its awesome flexibility, and JSON-centric document stores like Cloudant make web developers incredibly productive by offering a JavaScript environment from end-to-end. Recent Big Data challenges have driven the need for a distributed approach to analytics e...
SYS-CON Events announced today that the DevOps Institute has been named “Association Sponsor” of SYS-CON's DevOps Summit, which will take place on June 9–11, 2015, at the Javits Center in New York City, NY. The DevOps Institute provides enterprise level training and certification. Working with thought leaders from the DevOps community, the IT Service Management field and the IT training market, the DevOps Institute is setting the standard in quality for DevOps education and training.
SYS-CON Events announced today the DevOps Foundation Certification Course, being held June ?, 2015, in conjunction with DevOps Summit and 16th Cloud Expo at the Javits Center in New York City, NY. This sixteen (16) hour course provides an introduction to DevOps – the cultural and professional movement that stresses communication, collaboration, integration and automation in order to improve the flow of work between software developers and IT operations professionals. Improved workflows will res...
The WebRTC Summit 2014 New York, to be held June 9-11, 2015, at the Javits Center in New York, NY, announces that its Call for Papers is open. Topics include all aspects of improving IT delivery by eliminating waste through automated business models leveraging cloud technologies. WebRTC Summit is co-located with 16th International Cloud Expo, @ThingsExpo, Big Data Expo, and DevOps Summit.
Even though it’s now Microservices Journal, long-time fans of SOA World Magazine can take comfort in the fact that the URL – soa.sys-con.com – remains unchanged. And that’s no mistake, as microservices are really nothing more than a new and improved take on the Service-Oriented Architecture (SOA) best practices we struggled to hammer out over the last decade. Skeptics, however, might say that this change is nothing more than an exercise in buzzword-hopping. SOA is passé, and now that people are ...
SOA Software has changed its name to Akana. With roots in Web Services and SOA Governance, Akana has established itself as a leader in API Management and is expanding into cloud integration as an alternative to the traditional heavyweight enterprise service bus (ESB). The company recently announced that it achieved more than 90% year-over-year growth. As Akana, the company now addresses the evolution and diversification of SOA, unifying security, management, and DevOps across SOA, APIs, microser...
The webinar, hosted by XebiaLabs, will feature 4 experts including Special Host Gene Kim, author of The Phoenix Project, along with IT thought leaders Gary Gruver, Randy Shoup and XebiaLabs' Andrew Phillips. The panel brings more than 30 years of collective experience surrounding microservices transformations at major companies including Google, eBay and Tripwire. "The story around microservices and containers is pretty compelling and the attraction of more flexibility is obviously alluring,"...
SYS-CON Events announced today that Creative Business Solutions will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Creative Business Solutions is the top stocking authorized HP Renew Distributor in the U.S. Based out of Long Island, NY, Creative Business Solutions offers a one-stop shop for a diverse range of products including Proliant, Blade and Industry Standard Servers, Networking, Server Options and...
WHOA.com has announced the newest addition to its data center footprint with the expansion into Equinix's newest state-of-the-art facility: DC-11 Washington, DC IBX+. Located in Ashburn, VA, this data center expands Whoa.com's presence to meet rapidly expanding customer demand for secure cloud solutions. Equinix, Inc. operates International Business Exchange™ (IBX®) data centers in 32 markets across 15 countries in the Americas, EMEA, and Asia-Pacific. Equinix is committed to operating faciliti...
SYS-CON Events announced today that FierceDevOps will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. FierceDevOps keeps software developers and IT operations personnel updated on the latest news and trends around the rapidly evolving role of the traditional IT worker.
GENBAND has announced that SageNet is leveraging the Nuvia platform to deliver Unified Communications as a Service (UCaaS) to its large base of retail and enterprise customers. Nuvia’s cloud-based solution provides SageNet’s customers with a full suite of business communications and collaboration tools. Two large national SageNet retail customers have recently signed up to deploy the Nuvia platform and the company will continue to sell the service to new and existing customers. Nuvia’s capabili...
SYS-CON Media announced today that @WebRTCSummit Blog, the largest WebRTC resource in the world, has been launched. @WebRTCSummit Blog offers top articles, news stories, and blog posts from the world's well-known experts and guarantees better exposure for its authors than any other publication. @WebRTCSummit Blog can be bookmarked ▸ Here @WebRTCSummit conference site can be bookmarked ▸ Here