ARGON ST Inc. (STST, Financial) filed Quarterly Report for the period ended 2010-04-04.
Argon St Inc. has a market cap of $555.9 million; its shares were traded at around $25.44 with a P/E ratio of 23.8 and P/S ratio of 1.6. Argon St Inc. had an annual average earning growth of 0.6% over the past 5 years.STST is in the portfolios of Steven Cohen of SAC Capital Advisors, Jim Simons of Renaissance Technologies LLC.
At April 4, 2010, the unfavorable rate variance totaled $5.5 million, which was approximately $1.1 million more than the $4.4 million unfavorable rate variance planned for the period. Management expects the variance to be eliminated over the course of the fiscal year, and therefore, no portion of the variance is considered permanent.
Revenues decreased approximately $18.2 million or 19% for the three months ended April 4, 2010, as compared to the three months ended March 29, 2009. The second quarter of fiscal 2010 remained a quarter of replenishing low levels of backlog resulting from delays in our bookings in fiscal 2009. During the quarter, backlog increased approximately $50 million resulting from the booking of our initial production lots of the SSEE Increment F program, along with other significant bookings on new contracts. While we anticipate these bookings, along with further replenishment of backlog throughout the year, will drive revenue growth in the third and fourth quarters of fiscal 2010, the timing of these bookings has impacted our year over year revenue metrics. The decline in these year over year revenue metrics were driven by two key areas: our SSEE program and the development and production of ORBCOMM Generation Two payload (OG2).
Cost of revenues decreased approximately $15.2 million or 20% for the three months ended April 4, 2010, as compared to the three months ended March 29, 2009. The decrease was primarily due to decreased contract activity and decreased revenue as described above. As a result of the decreased contract activity, direct materials costs, including subcontract costs, decreased $14.1 million consistent with lower material costs in the SSEE production lots and lower subcontractor costs with the OG2 contract, among others. All other direct costs and overhead costs allocable to such direct costs decreased approximately $1.4 million. These decreases were partially offset by an increase in costs not allocable to a specific program of $0.3 million, primarily attributable to increased stock-based compensation. Certain stock-based instruments are accounted for as a liability. With recent increases in our stock price, the portion of stock-based compensation attributable to these instruments has increased significantly. Cost of revenues as a percentage of total revenue remained at 81% for the three months ended April 4, 2010 and the three months ended March 29, 2009.
General and administrative expenses decreased approximately $1.8 million or 29% for the three months ended April 4, 2010, as compared to the three months ended March 29, 2009. This decrease was primarily due to reduced legal fees and charges for claims resolution, which elevated general and administrative fees in 2009 as a result of claims brought against us and settled in the second quarter of fiscal 2009. As a result, legal fees decreased $1.1 million and claims resolution decreased $0.6 million in the second quarter of fiscal 2010 as compared to fiscal 2009. As a percentage of revenue, general and administrative costs have remained at 6% of revenue for the three months ended April 4, 2010 and the three months ended March 29, 2009.
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Argon St Inc. has a market cap of $555.9 million; its shares were traded at around $25.44 with a P/E ratio of 23.8 and P/S ratio of 1.6. Argon St Inc. had an annual average earning growth of 0.6% over the past 5 years.STST is in the portfolios of Steven Cohen of SAC Capital Advisors, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
We conduct internally funded research and development into complex signal processing, system and software architectures, and other technologies that are important to continued advancement of our systems and are of interest to our current and prospective customers. The variance from year to year in internal research and development is caused by the status of our product cycles and the level of complementary U.S. government funded research and development. For the three and six months ended April 4, 2010, internally funded research and development expenditures were $2.9 million and $5.3 million, respectively, representing approximately 4% of revenues in both periods. For the three and six months ended March 29, 2009, internally funded research and development expenditures were $2.4 million and $4.1 million, respectively, representing 3% of revenues in both periods.At April 4, 2010, the unfavorable rate variance totaled $5.5 million, which was approximately $1.1 million more than the $4.4 million unfavorable rate variance planned for the period. Management expects the variance to be eliminated over the course of the fiscal year, and therefore, no portion of the variance is considered permanent.
Revenues decreased approximately $18.2 million or 19% for the three months ended April 4, 2010, as compared to the three months ended March 29, 2009. The second quarter of fiscal 2010 remained a quarter of replenishing low levels of backlog resulting from delays in our bookings in fiscal 2009. During the quarter, backlog increased approximately $50 million resulting from the booking of our initial production lots of the SSEE Increment F program, along with other significant bookings on new contracts. While we anticipate these bookings, along with further replenishment of backlog throughout the year, will drive revenue growth in the third and fourth quarters of fiscal 2010, the timing of these bookings has impacted our year over year revenue metrics. The decline in these year over year revenue metrics were driven by two key areas: our SSEE program and the development and production of ORBCOMM Generation Two payload (OG2).
Cost of revenues decreased approximately $15.2 million or 20% for the three months ended April 4, 2010, as compared to the three months ended March 29, 2009. The decrease was primarily due to decreased contract activity and decreased revenue as described above. As a result of the decreased contract activity, direct materials costs, including subcontract costs, decreased $14.1 million consistent with lower material costs in the SSEE production lots and lower subcontractor costs with the OG2 contract, among others. All other direct costs and overhead costs allocable to such direct costs decreased approximately $1.4 million. These decreases were partially offset by an increase in costs not allocable to a specific program of $0.3 million, primarily attributable to increased stock-based compensation. Certain stock-based instruments are accounted for as a liability. With recent increases in our stock price, the portion of stock-based compensation attributable to these instruments has increased significantly. Cost of revenues as a percentage of total revenue remained at 81% for the three months ended April 4, 2010 and the three months ended March 29, 2009.
General and administrative expenses decreased approximately $1.8 million or 29% for the three months ended April 4, 2010, as compared to the three months ended March 29, 2009. This decrease was primarily due to reduced legal fees and charges for claims resolution, which elevated general and administrative fees in 2009 as a result of claims brought against us and settled in the second quarter of fiscal 2009. As a result, legal fees decreased $1.1 million and claims resolution decreased $0.6 million in the second quarter of fiscal 2010 as compared to fiscal 2009. As a percentage of revenue, general and administrative costs have remained at 6% of revenue for the three months ended April 4, 2010 and the three months ended March 29, 2009.
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