BTG Announces Quarterly Financial Results
FAIRFAX, Va.--(BUSINESS WIRE)--Jan. 25, 2001--BTG, Inc. (Nasdaq: BTGI), an information systems and technical services company, today released unaudited financial results for its fiscal year third quarter, which ended December 31, 2000.
The financial results were consistent with those that were previewed in the company announcement on January 16, 2001 (see BTG 01-01).
Total revenue for the third quarter was $51.4 million, compared to $59.3 million in the same period last year. For the quarter the operating loss was $251,000, and the net loss was $1.1 million, compared to operating income of $2.5 million and net income of $1.1 million in the third quarter of fiscal 2000. The fully diluted loss per share was $0.12, compared to fully diluted earnings per share of $0.13 for the same period last year. Included in the net loss and fully diluted loss per share was a non-operating, after-tax loss of $520,000, or $0.06 per share, from the sale of 1.3 million shares of GTSI, Inc., representing a liquidation of the remainder of BTG's stock holdings in GTSI.
For the first nine months of fiscal 2001, revenue from the company's core information systems and technical services business increased 7% from $150.1 million reported last year to $160.2 million this year. Total revenue was $166.1 million, down from $189.6 million reported in the same period last year due to an 85% decrease in product sales resulting from BTG's divestiture of the majority of its product reselling contracts in late 1999. Net income was $1.6 million, and fully diluted earnings per share were $0.18, compared to $3.2 million of net income and a $0.35 fully diluted EPS for the first nine months of fiscal 2000.
BTG President and CEO Dr. Edward H. Bersoff said the third quarter business plan included a ramp-up in revenue from the company's civilian and state and local business units. This did not develop as anticipated, and in certain cases simply was delayed by the failure of the federal government to pass a budget at the start of its fiscal year on October 1, 2000. Also, the new federal cabinet secretaries were announced in December, resulting in delays and the uncertainty of future funding for many agencies. Other factors contributing to the quarterly results were higher than anticipated costs for bids and proposals, expanded business development activities, severance costs for certain terminated employees, and a continuing lag in contract staff hiring during the third quarter.
Bersoff said, "We built an infrastructure to manage the growth we anticipated. But when the revenue did not develop during the quarter as we expected, the indirect costs associated with the increase in our infrastructure were not absorbed. Operating expenses increased $2.2 million over the same period last year with approximately the same levels of service contract revenues and gross margins." He added that BTG's business going forward has a number of positive indicators:
--Gross margins for contract services remain stable and the company has eliminated a considerable amount of infrastructure costs, significantly lowering projected operating expenses in the fourth quarter and in fiscal 2002.
--Voluntary employee turnover dropped notably during the third quarter, and is at its lowest level since the third quarter of last fiscal year.
--BTG's debt decreased to $29.3 million on December 31, 2000, from $34.7 million reported at the end of the second quarter; the debt decreased even with BTG repurchasing 175,000 shares of stock during the third quarter at a cost of $1.3 million.
--Contract backlog increased to $524 million as of December 31, 2000, up $83 million from the last quarter.
--BTG's bid and proposal backlog increased $92 million to over $403 million, and the company's business pipeline was approximately $1 billion at the end of the quarter.
"BTG made strategic investments in the third quarter that have produced and will continue to produce results in new and follow-on contract awards. We are reducing our indirect operating expenses, and the entire company is committed to operating within a much leaner cost structure that corresponds and adjusts quickly to revenue. And we will focus our efforts to retain and hire the high quality individuals we need to grow revenue to deliver enhanced cash flow in the fourth quarter and beyond," Bersoff said. |
