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 provided its preliminary business outlook for 2012 and announced that it has taken actions to remove more than $5 million from its annual cost structure, which will result in a one-time restructuring charge in the fourth quarter of 2011. The company also reaffirmed previously issued fourth quarter and full-year 2011 revenue and earnings per share guidance, excluding the restructuring charge.
NCI will report its full fiscal year 2011 results and issue guidance for 2012 on February 15, 2012.
Preliminary 2012 Business Outlook
NCI cited continuing difficulty and uncertainty in the Federal procurement environment as well as a high number of contract awards under protest in setting its current expected revenue range for 2012 at $340 million to $360 million. The company stated that the major components of the anticipated year-over-year revenue decline in 2012 were as follows:
- Attrition of BRAC-related and other non-core program revenue, as previously disclosed;
- Expiration of task orders and contracts within NCI’s core contract base; and
- A net reduction of revenue associated with NCI’s core contract base as a result of reductions in scope of work and certain lost contract recompetes, among other factors.
The company added that bookings of new contract awards in 2011 would generate insufficient revenue in 2012 to meaningfully offset the revenue drop resulting from the aforementioned factors.
“A number of factors contributed to our bookings shortfall in 2011, including an unfavorable competitive environment, pricing pressures and delayed or cancelled procurements,” said NCI’s President, Brian J. Clark. “In addition, as we’ve previously disclosed, significant potential future revenue was held up in protests or cancellations of contracts awarded to NCI. It was clear that offsetting the year-over-year decline with new business revenue in 2012 was impracticable.”