Analex Corporation NEWS RELEASE
5904 Richmond Highway
Suite 300
Alexandria, Virginia 22303
Tel: (703) 329-9400
Fax: (703) 329-8187
www.analex.com Release: IMMEDIATE
For: ANALEX CORPORATION
(Symbol: NLX)
Contact: Amber Gordon
(703) 329-9400
ANALEX ANNOUNCES RECORD 2004 FINANCIAL RESULTS
Revenue up 51%; Operating Income up 77%; Non-Cash Charges Yield Net
Loss
Alexandria, VA, February 23, 2005 - Analex Corporation (Amex: NLX), a
leading provider of mission-critical professional services to federal
government clients, today reported full year 2004 revenue of $94.4
million, a 51% increase over 2003 revenue of $62.3 million. Operating
income, or earnings before interest and taxes (EBIT), increased 77%
over 2003, while earnings before interest, taxes, depreciation, and
amortization (EBITDA) increased by 96%, from $4.1 million to $8.0
million in 2004. EBITDA margins increased to 8.5% from 6.6% last
year. As a result of non-cash accretion charges on convertible debt
instruments used to finance acquisitions, net income from continuing
operations was a loss of $3.8 million in 2004 compared to a $2.7
million profit in 2003. As a result of dividends and non-cash
accretion charges on convertible preferred stock used to finance
acquisitions, net income attributable to common shareholders amounted
to a loss of $9.2 million in 2004, or ($0.64) per share, compared to
income of $2.5 million in 2003, or $0.14 per share on a fully-diluted
basis.
For the fourth quarter revenue was $27.7 million, a 76% increase
over the fourth quarter of 2003 revenue of $15.7 million. EBIT
increased 180% over 2003, while EBITDA for the quarter increased by
195%, from $738,300 to $2.2 million in this year. EBITDA margins for
the quarter increased to 7.9% from 4.7% last year. Net income from
continuing operations increased by 66% from $794,400 to $1.3 million,
due in part to a tax benefit for the quarter. As a result of
dividends and non-cash accretion charges on convertible preferred
stock used to finance acquisitions, net income attributable to common
shareholders amounted to a loss of $255,700 for the quarter, or
($0.02) per share, compared to income of $462,900 in 2003, or $0.03
per share.
These operating results demonstrate the underlying strength of
Analex core business. Offsetting these results were various non-cash
charges associated with acquisition financing activities. The total
non-cash charges included in the net loss to the common stockholders
amounted to $1.7 million for the quarter and $11.4 million for the
year.
Sterling Phillips, Analex's Chairman and CEO, stated, "Analex's
fourth quarter and full year 2004 results reflect continued strong
organic revenue growth and margin improvement. Our performance was
achieved by focusing on providing our clients with superior program
work - fueled by the strong market demand for our services by federal
government clients. We will continue to emphasize organic growth,
while executing a disciplined approach to identifying acquisition
candidates that we believe will yield exceptional long-term growth and
value to Analex."
Cash generation and management are strong. Accounts receivable
Days Sales Outstanding remains at 60 days. Bank debt under the Bank
of America credit agreement had $6.6 million outstanding at December
31, 2004. Analex remains within the required financial covenant
requirements of that credit facility.
Webcast Today
The Company has scheduled a webcast / conference call for 11:00 a.m.
(ET), today, during which management will make a brief presentation
regarding third quarter results and operating trends. A question-and-
answer session will follow. Interested parties can listen to the
conference call over the Internet by logging on to Analex's website at
www.analex.com at the scheduled time and following the sign-in
instructions. A replay will be available over the Internet and can be
accessed on Analex's website. The replay of the conference call and
question / answer session will also be available after 1:00 p.m. (ET)
today. The replay will be available through March 25, 2005 via
telephone at 888-286-8010 (replay Pass Code: # 72721086). The
International dial-in replay number is 617-801-6888.
About Analex
Analex specializes in providing intelligence, systems engineering and
security services in support of our nation's security. Analex focuses
on developing innovative technical approaches for the intelligence
community, analyzing and supporting defense systems, designing,
developing and testing aerospace systems and providing a full range of
security support services to the U.S. government. The Company's stock
trades on the American Stock Exchange under the symbol NLX. Analex
investor relations can be reached at amber.gordon@analex.com or 703-
329-9400 x311. The Company can be found on the Internet at
www.analex.com.
PLEASE NOTE: Except for the historical information contained herein,
this press release contains forward-looking statements within the
meaning of Section 21E of the Securities Exchange Act of 1934, as
amended, that involve a number of risks and uncertainties. These
forward-looking statements may be identified by reference to a future
period by use of forward-looking terminology such as "anticipate,"
"expect," "could," "intend," "may" and other words of a similar
nature. There are certain important factors and risks that could cause
results to differ materially from those anticipated by the statements
contained herein. Such factors and risks include business conditions
and growth in the government contracting arenas and in the economy in
general. Competitive factors include the pressures toward
consolidation of small government contracts into larger contracts
awarded to major, multi-national corporations; and the Company's
ability to continue to recruit and retain highly skilled technical,
managerial and sales/marketing personnel. Other risks may be detailed
from time to time in the Company's filings with the Securities and
Exchange Commission. Analex undertakes no obligation to update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
FINANCIAL TABLES FOLLOW
Analex Corporation
Selected Financial Data
(unaudited)
Three Months Ended Twelve Months Ended
December 31 % December 31 %
2004 2003 Change 2004 2003 Change
---------- ----------- ------------ ------------
Revenues $ 27,717,800 $ 15,745,500 76% $ 94,416,700 $ 62,326,700 51%
Costs of revenue 22,026,900 13,366,300 75,913,100 52,526,500
SG&A 3,629,200 1,662,200 10,776,800 5,787,500
Amortization 453,400 142,100 1,420,900 450,800
---------- ----------- ------------ ------------
Operating costs and expenses 26,109,500 15,170,600 88,110,800 58,764,800
---------- ----------- ------------ ------------
Operating income 1,608,300 574,900 180% 6,305,900 3,561,900 77%
Total interest expense, net (940,000) (241,200) (8,921,900) (519,800)
Income (loss) from continuing
operations before income taxes 668,300 333,700 (2,616,000) 3,042,100
Provision (benefit) for income taxes (647,300) (460,700) 1,193,400 311,200
---------- ----------- ------------ ------------
Income (loss) from continuing operations 1,315,600 794,400 66% (3,809,400) 2,730,900 -239%
Net income (loss) from
discontinued operations
net of income taxes 11,300 (38,500) 8,200 15,500
Net income (loss) on disposal
of discontinued operations
net of income taxes (237,900) - (545,000) -
Net income (loss) from
discontinued operations (226,600) (38,500) (536,800) 15,500
---------- ----------- ------------ -----------
Net income (loss) 1,089,000 755,900 (4,346,200) 2,746,400
Dividends on Series A
convertible preferred stock (227,400) (56,700) (902,400) (56,700)
Dividends on Series B
convertible preferred stock (181,500) - (211,100) -
Accretion of convertible
preferred stock (935,800) (236,300) (3,750,000) (236,300)
---------- ----------- ------------ ------------
Net income (loss) available to
common shareholders $ (255,700) $ 462,900 -155% $ (9,209,700) $ 2,453,400 -475%
=========== =========== ============ ============
Net income (loss) attributable to common shareholders per share:
Continuing operations
Basic $ 0.00 $ 0.03 $ (0.60) $ 0.16
Diluted $ 0.00 $ 0.03 $ (0.60) $ 0.14
Discontinued operations
Basic $ (0.02) $ 0.00 $ (0.04) $ 0.00
Diluted $ (0.02) $ 0.00 $ (0.04) $ 0.00
Net income (loss) available for the common shareholders:
Basic $ (0.02) $ 0.03 $ (0.64) $ 0.16
Diluted $ (0.02) $ 0.03 $ (0.64) $ 0.14
Weighted average number of shares:
Basic 15,333,209 14,747,777 14,435,676 14,878,312
Diluted 15,333,209 17,319,623 14,435,676 17,670,001
Reconciliation of Non-GAAP Measures:
Reconciliation of Operating Income (EBIT) to EBITDA:
Three Months Ended Twelve Months Ended
December 31 % December 31 %
----------- -----------
2004 2003 Change 2004 2003 Change
---- ---- ------ ---- ---- ------
EBIT $1,608,300 $574,900 180% $6,305,900 $3,561,900 77%
EBIT Margin 5.8% 3.7% 6.7% 5.7%
Amortization 453,400 142,100 1,420,900 450,800
Depreciation 113,600 21,300 308,100 90,100
---------- ------- ---------- ----------
EBITDA $2,175,300 $738,300 195% $8,034,900 $4,102,800 96%
EBITDA Margin 7.9% 4.7% 8.5% 6.6%
Balance Sheet Data
December 31 December 31
----------- ------------
2004 2003
---- -----
Current assets $21,910,000 $24,879,200
Current assets of business held for sale 658,100
Fixed assets, net 1,434,700 546,100
Goodwill, contract rights, and other
intangibles, net 49,539,700 17,034,600
Other non-current assets 526,300 514,100
----------- ------------
Total assets $73,409,700 $43,632,100
=========== ============
Current liabilities $16,387,600 $8,311,100
Current liabilities of business held for sale 116,000
Long-term liabilities 8,076,000 5,476,200
----------- ------------
Total liabilities $24,463,600 $13,903,300
Convertible preferred stock $15,986,300 $236,300
Shareholders' equity $32,959,800 $29,492,500
----------- ------------
Total liabilities, convertible preferred stock
and shareholders' equity $73,409,700 $43,632,100
=========== ===========
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