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Stanley Inc. Reports Operating Results (10-Q)

August 04, 2009 | About:

Stanley Inc. (SXE) filed Quarterly Report for the period ended 2009-07-31.

STANLEY INC is a provider of information technology services and solutions to U.S. defense and federal civilian government agencies. Stanley offers its customers systems integration solutions and expertise to support their mission-essential needs at any stage of program product development or business lifecycle through five service areas: systems engineering enterprise integration operational logistics business process outsourcing and advanced engineering and technology. Stanley Inc. has a market cap of $757 million; its shares were traded at around $31.66 with a P/E ratio of 20.2 and P/S ratio of 1.

Highlight of Business Operations:

Revenues. Our consolidated revenues increased $36.1 million, or 21.0%, from $172.6 million for the three months ended June 27, 2008, to $208.7 million for the three months ended June 26, 2009. The increase was primarily due to $12.5 million of increased revenues attributable to military intelligence training and operations support for the U.S. Army, $10.5 million of increased revenues attributable to biometric software development, training and support for certain agencies in the Department of Defense, offset by $11.5 million of decreased revenues due to reduced demand for passport services for the Department of State. The balance of increased revenues was a result of engineering and technical support services for the U.S. Air Force and the Defense Information Systems Agency, production and engineering services under various SPAWAR programs, and information technology life cycle support and logistics management services for the U.S. Army. A significant portion of this growth was due to the impact of the contracts obtained as part of the Oberon acquisition.

Cost of Revenues. Our cost of revenues increased $27.3 million, or 18.7%, from $145.8 million for the three months ended June 27, 2008, to $173.1 million for the three months ended June 26, 2009. This increase was primarily the result of additional costs attributable to revenues associated with the increased services referred to above. Cost of revenues represented 82.9% of revenues for the three months ended June 26, 2009, as compared to 84.5% of revenues for the three months ended June 27, 2008. This decrease was primarily the result of a greater percentage of more profitable time-and-material and fixed price contracts.

Selling, General and Administrative. Our selling, general and administrative expense increased $3.4 million, or 32.2%, from $10.7 million for the three months ended June 27, 2008, to $14.1 million for the three months ended June 26, 2009. This increase was primarily due to higher share-based payment expenses, an increase in business development costs and higher selling, general and administrative expenses attributable to the acquisition of Oberon. Selling, general and administrative expense represented 6.8% of revenues for the three months ended June 26, 2009, as compared to 6.2% of revenues for the three months ended June 27, 2008. This increase was primarily a result of higher selling, general and administrative expense as a percentage of revenues associated with supporting contracts and operations that were obtained as part of the Oberon acquisition.

Depreciation and Amortization. Our depreciation and amortization expense increased $1.0 million, or 53.7%, from $1.8 million for the three months ended June 27, 2008, to $2.8 million for the three months ended June 26, 2009. The increase in depreciation and amortization was primarily due to the amortization of intangible assets associated with the acquisition of Oberon as well as depreciation expense associated with capital expenditures and leasehold improvements.

Interest Income. Our interest income decreased $0.1 million from $0.1 million for the three months ended June 27, 2008, to $0.0 million for the three months ended June 26, 2009. The interest income for the three months ended June 27, 2008 was primarily due to interest earned on collections of delayed payments from several customers.

Interest Expense. Our interest expense increased $0.6 million from $0.5 million for the three months ended June 27, 2008, to $1.1 million for the three months ended June 26, 2009. The increase in interest expense was primarily due to borrowings under our Senior Credit Facility relating to the Oberon acquisition, partially offset by a lower overall borrowing rate.

Read the The complete ReportSXE is in the portfolios of Ron Baron of Baron Funds.

Rating: 2.5/5 (2 votes)

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