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 third quarter ended September 30, 2011.
Third quarter revenue was at the low end of management’s guidance range issued last quarter, and diluted earnings per share, including acquisition-related costs, was slightly above the guidance range.
Third Quarter Fiscal Year 2011 Results:
For the third quarter of 2011, NCI reported revenue of $132.0 million compared with third quarter 2010 revenues of $168.8 million, a decrease of 21.8%. The year-over-year decrease in revenue was due to the previously disclosed winding down of non-core Base Realignment and Closure (BRAC)-related programs and a decline in U.S. Air Force’s Network Centric Solutions (NETCENTS) product orders, which collectively accounted for $42.2 million; lower revenues from the PEO Soldier program, which accounted for $4.6 million; and decreases in revenue attributable to completion of task orders awarded under several Government Wide Acquisition Contracts (GWAC) and Indefinite Delivery/Indefinite Quantity (ID/IQ) vehicles, which accounted for $6.3 million. The decrease in revenue was partially offset by revenue attributable to programs added through the acquisition of AdvanceMed, which was completed in April 2011.
Operating income for the third quarter of 2011 decreased by 35.9% from the third quarter of 2010. Operating income for the third quarter of 2011 was $6.4 million, or 4.9% of revenue, compared with $10.1 million, or 6.0% of revenue, for the third quarter ended September 30, 2010. Operating margin for the third quarter of 2011 declined as a result of lower total revenue compared with the same period in 2010; higher indirect support expenses; higher depreciation and amortization and acquisition costs resulting from the AdvanceMed acquisition; and reduced profitability on the PEO-Soldier cost-plus-fee bridge contract.
As expected and previously disclosed, non-core materials-related revenue associated with the BRAC and NETCENTS contracts contributed little to no operating margin in the third quarter of 2011. Excluding this BRAC and NETCENTS revenue and related costs, core operating margin was 5.0% and 7.3% for the third quarters of 2011 and 2010, respectively.