NCI, Inc. (NASDAQ:NCIT), a leading provider of information technology (IT), engineering, logistics, and professional services and solutions to U.S. Federal Government agencies, today announced financial and operating results for the second quarter ended June 30, 2011.
Second quarter revenue was within management’s guidance range issued last quarter and diluted earnings per share, including acquisition-related costs, was below the guidance range.
Second Quarter Fiscal Year 2011 Results:
For the second quarter of 2011, NCI reported revenue of $161.2 million, an increase of 27.4% over second quarter 2010 revenues of $126.6 million. Organic revenue growth was 16.6%. The year-over-year increase in revenue was attributable primarily to the acquisition of AdvanceMed Corporation (AdvanceMed), as well as growth in the U.S. Army Program Executive Office (PEO) Soldier, Base Realignment and Closure (BRAC), and U.S. Air Force’s Network Centric Solutions (NETCENTS) contracts.Operating income for the second quarter of 2011 decreased by 24.1% from the second quarter of 2010. Operating income for the second quarter of 2011 was $6.9 million, or 4.3% of revenue, compared with $9.1 million, or 7.2% of revenue, for the second quarter ended June 30, 2010. The year-over-year decrease in operating margin was attributed to acquisition-related expenses; losses on two separate and unrelated fixed-price contracts; lower profitability on the PEO-Soldier cost-plus-fee bridge contract; and increases in materials and subcontractor labor costs, which typically carry lower margins than the company’s direct labor costs. As expected and previously disclosed, materials-related revenue associated with the BRAC NETCENTS contracts, contributed little to no operating margin. Excluding this BRAC and NETCENTS revenue and related costs, operating margin was 4.6% and 7.7% for the second quarters of 2011 and 2010, respectively. Excluding the aforementioned AdvanceMed acquisition costs, operating margin was 5.2% for the second quarter of 2011. The effective tax rate for the second quarter of 2011 was 39.7% compared with 39.5% for the second quarter of 2010.