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 THIRD QUARTER 2005 FINANCIAL RESULTS
Revenue up 36%; EBITDA up 25%; Acquisition Related Charges Yield Net Loss
Alexandria, VA, November 3, 2005 - Analex Corporation (Amex: NLX), a
leading provider of mission-critical professional services to federal
government clients, today reported third quarter 2005 revenue of $37.9
million, a 36% increase over 2004 third quarter revenue of $27.9
million. For the quarter ended September 30, 2005, reported operating
income was $2.1 million compared to $2.0 million in 2004. However,
operating profit as measured by earnings before interest and taxes,
depreciation, and amortization (EBITDA), which the Company considers a more
representative measure of its operating results, increased by 25%, to
$3.4 million.
For the nine months ended September 30, 2005, revenue increased
to $104.4 million from $66.7 million in 2004, a 57% increase.
Operating income rose to $6.9 million from $4.7 million, a 48%
increase over 2004; and EBITDA for the period increased by 69%, to
$9.9 million.
Year to date revenue growth was strong in the Homeland Security
Group, which increased 102% over 2004, whereas the Systems Engineering
Group, which represents the company's NASA business, showed overall
growth of 5%, despite experiencing the planned reduction of a major
program within that group. For the quarter, the Homeland Security
Group revenue increased 61%, which was partially offset by a 4%
decrease of the Systems Engineering Group revenue. Growth in the
Homeland Security Group was fueled by increased services to the
intelligence community.
As Analex has previously explained, the net losses for the common
stockholders reported for the quarter and nine-month periods result
from various cash and non-cash accretion charges associated with
acquisition financing activities. The net loss for the third quarter
2005 was $2.2 million, or ($0.14) per share, compared to a net loss of
$5.9 million, or ($0.39) per share, for 2004. In the third quarter of
2005, the charges associated with the acquisition financing were $2.1
million of non-cash interest and accretion and $1.3 million of cash
interest and dividends. For the 2005 and 2004 nine-month periods, the
net losses were $4.7 million, or ($0.30) per share and $9.0 million,
or ($0.63) per share, respectively. For the nine months ended
September 30, 2005, the charges associated with the acquisition
financing were $5.6 million of non-cash interest and accretion and
$3.5 million of cash interest and dividends.
Sterling Phillips, Analex's Chairman and CEO, stated, "We are
pleased with our growth and the progress of our acquisitions, even
though these results are diminished somewhat by customer budget cuts
previously discussed. We continue to view the defense and
intelligence sector of government as an attractive opportunity for
growth from organic as well as acquisition sources. We're confident
that Analex's core lines of business provide a strong foundation for
future growth."
Cash generation remains strong with cash flow from operations of
$6.3 million for the nine months ended September 30, 2005, compared to
$2.5 million for the comparable period in 2004. Analex's bank debt
increased by $0.6 million during the quarter primarily as a result of
working capital requirements. Analex remains in compliance with the
financial covenant requirements of its 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 of the conference call and question / answer
session will also be available on the Internet after 1:00 p.m. (ET)
today, and can be accessed on Analex's website. The replay will also
be available through December 2, 2005 via telephone at 888-286-8010
(replay Pass Code: #74643203). The International dial-in replay
number is 617-801-6888.
About Analex
Analex (www.analex.com) 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.
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 Nine Months Ended
September 30 September 30
2005 2004 2005 2004
-------------------------------- -------------------------------
Revenue $ 37,858,000 $ 27,852,000 $ 104,444,800 $ 66,698,900
Cost of revenue 30,579,400 22,643,400 85,276,000 54,752,800
SG&A 4,177,700 2,625,300 9,807,100 6,281,000
Amortization 960,800 541,000 2,412,000 967,500
-------------- ------------- -------------- --------------
Operating costs and expenses 35,717,900 25,809,700 97,495,100 62,001,300
-------------- ------------- -------------- --------------
Operating income 2,140,100 2,042,300 6,949,700 4,697,600
Total interest expense, net (1,017,800) (5,627,300) (2,777,000) (7,981,900)
-------------- ------------- -------------- --------------
Income (loss) from continuing
operations before income taxes 1,122,300 (3,585,000) 4,172,700 (3,284,300)
Provision for income taxes 811,100 1,455,900 2,712,700 1,840,700
-------------- ------------- -------------- --------------
Income (loss) from continuing
operations 311,200 (5,040,900) 1,460,000 (5,125,000)
Income (loss) from discontinued
operations, net of income taxes -- 76,100 -- (3,200)
(Loss) gain on disposal of discontinued
operations, net of income taxes (135,900) 214,700 (105,600) (307,100)
-------------- ------------- -------------- --------------
Net income (loss) 175,300 (4,750,100) 1,354,400 (5,435,300)
-------------- ------------- -------------- --------------
Dividends on Series A
convertible preferred stock (228,600) (225,000) (675,000) (675,000)
Dividends on Series B-1
convertible preferred stock (180,000) (29,600) (540,000) (29,600)
Dividends on Series B-2
convertible preferred stock (375,000) -- (750,000) --
Accretion of convertible
preferred stock (1,588,800) (937,600) (4,115,100) (2,814,200)
-------------- ------------- -------------- --------------
Net loss available to
common shareholders $ (2,197,100) $ (5,942,300) $ (4,725,700) $ (8,954,100)
============== ============= ============== ==============
Net income (loss) attributable to common shareholders
per share:
Continuing operations
Basic $ (0.13) $ (0.41) $ (0.29) $ (0.61)
============== ============= ============== ==============
Diluted $ (0.13) $ (0.41) $ (0.29) $ (0.61)
============== ============= ============== ==============
Discontinued operations
Basic $ (0.01) $ 0.02 $ (0.01) $ (0.02)
============== ============= ============== ==============
Diluted $ (0.01) $ 0.02 $ (0.01) $ (0.02)
============== ============= ============== ==============
Net loss available to common shareholders:
Basic $ (0.14) $ (0.39) $ (0.30) $ (0.63)
============== ============= ============== ==============
Diluted $ (0.14) $ (0.39) $ (0.30) $ (0.63)
============== ============= ============== ==============
Weighted average number of shares:
Basic 16,146,431 15,295,773 15,800,830 14,134,314
============== ============= ============== ==============
Diluted 16,146,431 15,295,773 15,800,830 14,134,314
============== ============= ============== ==============
Balance Sheet Data
September 30, December 31,
2005 2004
-------------- ---------------
Current assets $ 30,971,000 $ 23,422,400
Fixed assets, net 2,263,400 1,434,700
Goodwill, contract rights, and other intangibles, net 89,393,000 49,538,700
Other non-current assets 724,800 526,300
-------------- ---------------
Total assets $ 123,352,200 $ 74,922,100
============== ===============
Current liabilities $ 16,115,400 $ 12,237,200
Long-term liabilities 31,779,400 13,732,700
-------------- ---------------
Total liabilities 47,894,800 25,969,900
Convertible preferred stock 34,681,100 15,986,300
Shareholders' equity 40,776,200 32,965,900
-------------- ---------------
Total liabilities, convertible preferred stock and
shareholders' equity $ 123,352,200 $ 74,922,100
============== ===============
Reconciliation of Non-GAAP Measures:
Reconciliation of Operating Income (EBIT) to EBITDA:
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------------------ ------------------------------------
2005 2004 Change 2005 2004 Change
------------ -------------- ------ -------------- ------------- ------
Revenue $ 37,858,000 $ 27,852,000 36% $ 104,444,800 $ 66,698,900 57%
EBIT 2,140,100 2,042,300 5% 6,949,700 4,697,600 48%
EBIT margin 5.65% 7.33% 6.65% 7.04%
Amortization 960,800 541,000 2,412,000 967,500
Depreciation 249,900 106,400 526,300 196,700
------------ ------------- -------------- ------------
EBITDA $ 3,350,800 $ 2,689,700 25% $ 9,888,000 $ 5,861,800 69%
============ ============= ============== ============
EBITDA margin 8.85% 9.66% 9.47% 8.79%
============ ============= ============== ============
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