NCI, Inc. (NASDAQ:NCIT), a leading provider of information technology (IT), professional services, and solutions to U.S. Federal Government agencies, today announced financial and operating results for the third quarter ended September 30, 2012.
NCI’s third quarter revenue exceeded the high end of management’s guidance range issued last quarter. EPS—excluding the goodwill impairment charge and the costs associated with the previously announced stock option tender offer—exceeded the high end of guidance by $0.05.
Third Quarter 2012 Results
For the third quarter of 2012, NCI reported revenue of $88.5 million compared with third quarter 2011 revenue of $132.0 million, a decrease of $43.5 million, or 33.0%. The year-over-year decrease in revenue consisted of a net decrease of approximately $22.5 million as a result of scope of work reductions, the expiration of task orders and contracts, and certain lost contract recompetes; a net decrease of $16.3 million resulting from the ending of Base Realignment and Closure (BRAC)-related and other non-core programs; and a decrease of $4.7 million of revenue from NCI’s Program Executive Office (PEO) Soldier program.
During the quarter ended September 30, 2012, NCI recorded an after-tax goodwill impairment charge of $55.6 million.
“The determination as to whether a write-down of goodwill was necessary involved significant judgments and estimates based principally on the projections of the company’s future performance and differences in NCI’s market value versus its book value,” said NCI’s President, Brian J. Clark. “A number of factors led to the ultimate conclusion that an impairment existed and was appropriate to be measured—and recorded—in the third quarter of this year: namely, the continued turmoil in the Federal market and the fact that NCI’s market value has declined further—remaining well below the net asset value of the company for the past couple of quarters. The goodwill impairment assessment took into account these factors in addition to Federal budget issues, delayed award activity, and the resulting expectations for NCI’s future performance.”