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DRC Reports First Quarter 2013 Results

Stocks in this article: DRCO

--- Adjusted EBITDA of 8.3 Percent on Revenue of $74 Million ---

ANDOVER, Mass., May 1, 2013 (GLOBE NEWSWIRE) -- Dynamics Research Corporation (Nasdaq:DRCO), a leading technology and management consulting company focused on driving performance and process improvement for government clients, today announced operating results for the first quarter ended March 31, 2013.

Financial Results

Net income for the quarter ended March 31, 2013 was $1.2 million, or $0.12 per diluted share, as compared with $1.8 million, or $0.17 per diluted share, for the first quarter of 2012. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for the first quarter of 2013 was $6.1 million, or 8.3 percent of revenue, as compared with $7.9 million, or 9.2 percent of revenue, for the same period a year ago. Revenue for the first quarter of 2013 was $73.6 million compared with $85.9 million for the same period in 2012.

During the first quarter, the Company used $6.8 million of cash from operations as compared to a use of $1.6 million in the same period a year ago. While seasonally the first quarter normally shows cash outflows, a slowdown in federal government payments, including the suspension of the Department of Defense Quick Pay program in February 2013, resulted in additional delayed invoice payments.

Business Highlights

"First quarter results were consistent with our expectations in the current operating environment," said Jim Regan, DRC's chairman and chief executive officer. "Revenue in our priority markets was $53 million, three percent below last year's first quarter, reflecting lower homeland security sales. In the defense readiness, logistics and C 3 market sectors, which are primarily legacy businesses for DRC, revenue for the first quarter just ended was down 43 percent versus the first quarter of 2012, driven by various defense cost-reduction initiatives and movement toward small business set aside contracts. While we had a seasonal net use of cash in the quarter, as is typical, we expect much stronger cash generation during the balance of 2013.

"We won 100 percent of the re-compete decisions made by our clients in the first quarter and booked $6 million of new business – up from the same period a year ago. However, our current qualified pipeline of $619 million is down from our previously reported pipeline of $1.1 billion, primarily due to recent customer decisions on two large procurements, totaling $425 million, which were awarded to other firms. As we enter the busiest period of the government fiscal year, we are replenishing the pipeline and are well positioned to win our share of these opportunities.

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