Dynamics Research Corp. (DRCO, Financial) filed Quarterly Report for the period ended 2010-03-31.
Dynamics Research Corp. has a market cap of $136.3 million; its shares were traded at around $13.73 with a P/E ratio of 12.8 and P/S ratio of 3. DRCO is in the portfolios of Jim Simons of Renaissance Technologies LLC, Chuck Royce of Royce& Associates.
Contract receivables were $66.9 million at March 31, 2010, or 88 days sales outstanding (“DSO”), compared to $72.6 million, or 99 days at December 31, 2009. Billed receivables decreased $5.7 million in the first quarter of 2010, while unbilled receivables remained unchanged. Federal business DSO, which excludes the effect of our state contracts, was 68 days at March 31, 2010 compared to 73 days at December 31, 2009. The states of Ohio and Tennessee had a combined contract receivable balance outstanding of $14.3 million and $19.9 million at March 31, 2010 and December 31, 2009, respectively. In the first quarter of 2010, we received $8.0 million in payments from the State of Tennessee.
Our net deferred tax liability was $1.3 million and $2.8 million at March 31, 2010 and December 31, 2009, respectively. The decrease in the deferred tax liability is due to a decline in unbilled receivable related to our contract with the State of Tennessee. We paid $0.3 million in income taxes in the first quarter of 2010 and currently anticipate additional income tax payments of $11.9 million in the last three quarters of 2010.
Net cash used in investing activities from continuing operations was $2.3 million and $4.4 million in the first quarters of 2010 and 2009, respectively. The net cash used in 2010 primarily comprised of capital expenditures of $2.5 million. The net cash used in 2009 primarily consisted of additional consideration paid of $4.3 million as part of the Kadix acquisition and capital expenditures of $0.2 million.
Net cash used in financing activities was $3.8 million and $1.6 million in the first quarters of 2010 and 2009, respectively. The amount of cash used in both periods primarily represented payments under our term loan of $2.0 million. During the first quarter of 2010 we also made net repayments on our revolver of an additional $2.0 million, compared to net borrowing received of $0.3 million during the first quarter of 2009.
The average daily borrowing on our revolver for the first quarter of 2010 and 2009 was $3.9 million and $0.8 million, respectively, at an interest rate of 3.25% for both periods. The balance of combined term loan and swap agreement during the first quarter of 2010 and 2009 was $30.0 million and $38.0 million, respectively, at an average interest rate of 3.93% and 4.64%, respectively.
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Dynamics Research Corp. has a market cap of $136.3 million; its shares were traded at around $13.73 with a P/E ratio of 12.8 and P/S ratio of 3. DRCO is in the portfolios of Jim Simons of Renaissance Technologies LLC, Chuck Royce of Royce& Associates.
Highlight of Business Operations:
Amortization expense was $0.4 million and $1.0 million in the three months ended March 31, 2010 and 2009, respectively. The decrease in amortization expense primarily relates to the intangible assets acquired from our 2004 acquisition of Impact Innovations which fully amortized in the third quarter of 2009. The remaining amortization expense for the current fiscal year is expected to be approximately $1.2 million.Contract receivables were $66.9 million at March 31, 2010, or 88 days sales outstanding (“DSO”), compared to $72.6 million, or 99 days at December 31, 2009. Billed receivables decreased $5.7 million in the first quarter of 2010, while unbilled receivables remained unchanged. Federal business DSO, which excludes the effect of our state contracts, was 68 days at March 31, 2010 compared to 73 days at December 31, 2009. The states of Ohio and Tennessee had a combined contract receivable balance outstanding of $14.3 million and $19.9 million at March 31, 2010 and December 31, 2009, respectively. In the first quarter of 2010, we received $8.0 million in payments from the State of Tennessee.
Our net deferred tax liability was $1.3 million and $2.8 million at March 31, 2010 and December 31, 2009, respectively. The decrease in the deferred tax liability is due to a decline in unbilled receivable related to our contract with the State of Tennessee. We paid $0.3 million in income taxes in the first quarter of 2010 and currently anticipate additional income tax payments of $11.9 million in the last three quarters of 2010.
Net cash used in investing activities from continuing operations was $2.3 million and $4.4 million in the first quarters of 2010 and 2009, respectively. The net cash used in 2010 primarily comprised of capital expenditures of $2.5 million. The net cash used in 2009 primarily consisted of additional consideration paid of $4.3 million as part of the Kadix acquisition and capital expenditures of $0.2 million.
Net cash used in financing activities was $3.8 million and $1.6 million in the first quarters of 2010 and 2009, respectively. The amount of cash used in both periods primarily represented payments under our term loan of $2.0 million. During the first quarter of 2010 we also made net repayments on our revolver of an additional $2.0 million, compared to net borrowing received of $0.3 million during the first quarter of 2009.
The average daily borrowing on our revolver for the first quarter of 2010 and 2009 was $3.9 million and $0.8 million, respectively, at an interest rate of 3.25% for both periods. The balance of combined term loan and swap agreement during the first quarter of 2010 and 2009 was $30.0 million and $38.0 million, respectively, at an average interest rate of 3.93% and 4.64%, respectively.
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