EX-99.3 4 dex993.htm EXHIBIT 99.3 Exhibit 99.3

Exhibit 99.3

 

LOGO   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 2nd QUARTER FINANCIAL RESULTS

 

Revenue Up 44%; Operating Income Up 111%;

Non-Cash Quarterly Charges of $2.3 Million Yield ($0.13) Loss

 

Alexandria, VA, July 29, 2004 – ANALEX CORPORATION (Amex: NLX), a leading provider of mission-critical professional services to federal government clients, today reported financial results for its second quarter and six months ended June 30, 2004. Revenue for the second quarter increased 44%, from $15.4 million last year to $22.2 million this year, and operating income for the second quarter increased by 111% from $963,000 last year to $2.0 million this year. For the six months, revenue increased by 27%, from $30.7 million last year to $38.8 million this year, while operating income increased by 32% from $2.0 million last year to $2.7 million this year.

 

As a result of non-cash amortization and financing charges, as well as a loss from the discontinued operations of the Company’s Advanced Biosystems Subsidiary (ABS), Analex reported a loss from continuing operations and a net loss available to common shareholders for the quarter and six months. For the quarter, the net loss available to common shareholders amounted to $1.8 million, or ($0.13) per basic share, compared to a net profit of $673,800, or $0.04 per basic share, last year. For the six months, the net loss available to common shareholders amounted to $3 million, or ($0.22) per basic share, compared to a net profit of $1.4 million, or $0.10 per basic share, last year.

 

Sterling Phillips, Analex’s Chairman and CEO, stated, “During the second quarter, Analex completed our first acquisition under the growth strategy announced last year and posted solid year-over-year gains in revenue, operating profit, margins and cash flow. We also completed a new round of financing including adding new investors GE Pension Trust and New York Life Capital Partners. Despite the loss caused by non-cash financing charges and a discontinued operation, we view our core business as healthy and our acquisition strategy as being on track.”

 

Earnings before interest, taxes, depreciation, and amortization from continuing operations (EBITDA) increased 113% for the quarter, from $1.1 million to $2.4 million, and increased 39% for the six months, from $2.3 million to $3.2 million. EBITDA margins increased to 10.6% this year from 7.2% for last year’s second quarter, while EBITDA margins for the six months increased to 8.2% this year and 7.4% last year. The increase in EBITDA margins results from increased profitability in our program activity as well as the effect of spreading Analex’s corporate expenses over a broader base of business with the addition of BAI.

 

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Analex: Announces 2nd Quarter 2004 Results    Page 2
July 29, 2004     

 

The results for the quarter and six months included one month of operations for BAI, which was acquired on May 28, 2004. Excluding BAI, the Company’s revenue increased 23% for the quarter and 16% for the six months.

 

Of the $6.8 million increase in revenue for the second quarter, $4.8 million arose from our Homeland Security Group which had a 73% increase in revenue, from $6.6 million last year to $11.4 million this year. Excluding one month of operations from BAI for the second quarter, Homeland Security Group revenue increased by 25%. The remaining $2 million increase in revenue for the second quarter came from the Systems Engineering Group which had a 23% increase in revenue, from $8.8 million last year to $10.8 million this year, notwithstanding the continuing scheduled phase down of activity from one contract within the group.

 

For the six months, revenue increased by $8.1 million, or 27%. This increase resulted from a $5.3 million, or 40%, increase in revenue in our Homeland Security Group together with a $2.8 million, or 16%, increase in revenue in our Systems Engineering Group. Revenue in the Homeland Security Group rose from $13.3 million to $18.6 million, while revenue in our Systems Engineering Group, rose from $17.4 million to $20.2 million. Excluding one month of operations from BAI for the six months, Homeland Security Group revenue increased by 16%.

 

Earnings before interest, taxes and amortization (EBITA) for the second quarter for the Homeland Security Group increased by 157% to $2.2 million this year from $860,000 last year. Excluding the one month of operations from BAI for the second quarter, the EBITA of the group increased by 92%. EBITA margin for the group increased to 19.4% this quarter from 13.0% last year. For the six months, EBITA for the group increased by 71%, from $1.8 million to $3.1 million, and excluding BAI, EBITA increased by 39%. EBITA margin for the group for the six months increased from 13.6% to 16.5%.

 

EBITA for the second quarter for the Systems Engineering Group increased by 145%, from $258,000 last year to $631,000 this year. EBITA margin for the group increased from 2.9% last year to 5.8% this year. For the six months, EBITA increased by 16%, from $529,000 for last year to $612,000 this year, while EBITA margin for the six months remained constant at 3%.

 

The increase in EBITA margins results from increased profitability in our program activity as well as the effect of spreading Analex’s corporate expenses over a broader base of business with the addition of BAI.

 

These operating results demonstrate the underlying strength of Analex core business. Offsetting these results were various non-cash charges:

 

  • Interest expense related to the amortization of discounts on the $10 million convertible note issued in December 2003 and the $12 million convertible note issued in May 2004 amounted to $1.3 million for the quarter and $1.8 million for the six months.

 

  • Accretion on the $15 million preferred stock issued in December 2003 amounted to $940,000 for the quarter and $1.9 million for the six months.

 

  • These non-cash charges amounted to $2.3 million for the quarter and $3.7 million for the six months.

 

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Analex: Announces 2nd Quarter 2004 Results    Page 3
July 29, 2004     

 

  • Notwithstanding a pre-tax loss, a substantial portion of the non-cash intangible amortization charges and non-cash interest amortization charges are not tax deductible for federal income tax purposes.

 

The net loss to common shareholders for the quarter and six months may be viewed in its two components: core operations are strong, while various amortization and accretion charges together with losses on discontinued operations, offset those results yielding the net loss to common shareholders.

 

Cash generation and management is strong. For the first six months, Analex generated more than $4 million of free cash flow and account receivables Days Sales Outstanding is at 68 days. Bank debt under the Bank of America credit agreement had $8.3 million outstanding at June 30, 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 second 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. A recorded 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 August 27, 2004 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

 

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Analex: Announces 2nd Quarter 2004 Results    Page 4
July 29, 2004     

 

ANALEX CORPORATION

Selected Financial Data

(unaudited)

 

    

Three Months Ended

June 30

          

Six Months Ended

June 30

        
     2004
     2003
           2004
     2003
        

Revenues

    $ 22,215,200     $ 15,425,200     44 %   $ 38,846,600     $ 30,703,500     27 %

Costs of revenue

      17,357,200       12,924,700             31,408,600       25,731,500        

SG&A

      2,552,500       1,432,800             4,353,900       2,750,500        

Amortization

      277,300       104,300             426,500       204,500        
    
 
       
 
     

Operating costs and expenses

      20,187,000       14,461,800             36,189,000       28,686,500        
    
 
       
 
     

Operating income

      2,028,200       963,400     111 %     2,657,600       2,017,000     32 %

Total interest expense, net

      (1,669,300 )     (84,200 )           (2,357,100 )     (195,500 )      
    
 
       
 
     

Income from continuing operations before income taxes

      358,900       879,200             300,500       1,821,500        

Provision for income taxes

      459,500       250,600             384,700       519,100        
    
 
       
 
     

Income (loss) from continuing operations

      (100,600 )     628,600     -116 %     (84,200 )     1,302,400     -106 %

Dividends on convertible preferred stock

      (225,000 )     —               (450,000 )     —          

Accretion of convertible preferred stock

      (939,100 )     —               (1,876,600 )     —          
    
 
       
 
     

Net income (loss) available to common shareholders from continuing operations

      (1,264,700 )     628,600     -301 %     (2,410,800 )     1,302,400     -285 %
    
 
       
 
     

Net income (loss) from discontinued operations, net of income taxes

      (50,700 )     45,200             (79,200 )     107,000        

Loss on disposal of discontinued operations, net of income taxes

      (521,800 )     —               (521,800 )     —          
    
 
       
             

Net income (loss) from discontinued operations

      (572,500 )     45,200             (601,000 )     107,000        
    
 
       
 
     

Net income (loss) available to common shareholders

    $ (1,837,200 )   $ 673,800     -373 %   $ (3,011,800 )   $ 1,409,400     -314 %

Net income (loss) attributable to common shareholders per share:

                                             

Continuing operations

                                             

Basic

    $ (0.09 )   $ 0.04           $ (0.18 )   $ 0.09        
    
 
       
 
     

Diluted

    $ (0.09 )   $ 0.04           $ (0.18 )   $ 0.07        
    
 
       
 
     

Discontinued operations

                                             

Basic

    $ (0.04 )   $ 0.00           $ (0.04 )   $ 0.01        
    
 
       
 
     

Diluted

    $ (0.04 )   $ 0.00           $ (0.04 )   $ 0.01        
    
 
       
 
     

Net income available for the common shareholders:

                                             

Basic

    $ (0.13 )   $ 0.04           $ (0.22 )   $ 0.10        
    
 
       
 
     

Diluted

    $ (0.13 )   $ 0.04           $ (0.22 )   $ 0.08        
    
 
       
 
     

Weighted average number of shares:

 

              

Basic

      14,049,715       14,577,663             13,547,203       14,511,875        
    
 
       
 
     

Diluted

      14,049,715       17,169,313             13,547,203       17,496,504        
    
 
       
 
     

 

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Analex: Announces 2nd Quarter 2004 Results    Page 5
July 29, 2004     

 

Reconciliation of Non-GAAP Measures:

Reconciliation of Operating Income (EBIT) to EBITA and EBITDA:

 

    

Three Months Ended

June 30

          

Six Months Ended

June 30

        
     2004
     2003
           2004
     2003
        

EBIT

      2,028,200       963,400     111 %   2,657,600     2,017,000     32 %

EBIT Margin

      9.1 %     6.2 %         6.8 %   6.6 %      

Amortization

      277,300       104,300           426,500     204,500        

EBITA

      2,305,500       1,067,700     116 %   3,084,100     2,221,500     39 %

EBITA Margin

      10.4 %     6.9 %         7.9 %   7.2 %      

Depreciation

      49,700       38,600           96,300     62,900        

EBITDA

    $ 2,355,200     $ 1,106,300     113 %   3,180,400     2,284,400     39 %

EBITDA Margin

      10.6 %     7.2 %         8.2 %   7.4 %      

 

     Balance Sheet Data
    

June 30,

2004

    December 31,
2003

Current assets

    $ 22,452,300    $ 24,879,200

Current assets of business held for sale

      93,200      658,100

Fixed assets, net

      1,108,400      546,100

Goodwill, contract rights, and other intangibles, net

      49,001,600      17,034,600

Other non-current assets

      874,000      514,100
    
  

Total assets

    $ 73,529,500    $ 43,632,100
    
  

Current liabilities

    $ 27,065,200    $ 8,311,100

Current liabilities of business held for sale

      93,200      116,000

Long-term liabilities

      6,780,200      5,476,200
    
  

Total liabilities

    $ 33,938,601    $ 13,903,300

Convertible preferred stock

    $ 2,109,700    $ 236,300

Shareholders’ equity

    $ 37,481,200    $ 29,492,500
    
  

Total liabilities, convertible preferred stock and shareholders’ equity

    $ 73,529,500    $ 43,632,100
    
  

 

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