Falls Church, Va. (August 15, 2011) - Delta Tucker Holdings, Inc. ("Holdings"), the parent of DynCorp International Inc. ("DI", and together with Holdings, the "Company"), today reported 2011 second quarter revenue of $918.7 million, up $123.3 million or 15.5% from the same quarter in 2010, adjusted for the deconsolidation of GLS, which recorded $149.3 million of revenue during that quarter. The revenue increase was driven primarily from:
These increases were partially offset by the loss of the Life Cycle Contract Support ("LCCS") Army and Navy contracts in the Aviation BAT, the completion of the African Peacekeeping ("APK") task order in Somalia under the Contingency Operations BAT and lower volume on the Mine Resistant Ambush Protected Vehicle ("MRAP") program under the Operations and Maintenance BAT.
Net income attributable to Holdings was $3.3 million, representing an increase of $35.6 million over 2010, primarily driven by non-recurring Merger related expenses in the second quarter of 2010. Excluding these charges, net income attributable to Holdings would have been down $9.5 million, primarily attributable to higher depreciation and amortization expense as well as higher interest expense related to the Company's new debt.
Adjusted EBITDA for second quarter 2011 was $43.9 million or $8.6 million lower than the $52.5 million recorded for the comparable period in 2010, a 16.4% decrease. Lower volume and profitability under our MRAP contract as it moves to sustainment phase, the transition from our CivPol-Afghanistan task order to the new ANP MOI Development Program ("AMDP") which carries lower margins, coupled with an investment made in the power generation market and costs incurred to settle a customer matter contributed to the decrease. These factors were partially offset by increased business and profitability under our INL Air Wing and LOGCAP IV programs.
Backlog of $3.9B was down $359.7 million sequentially from first quarter 2011 due to timing of order patterns. The company has already booked over $2.5 billion in new orders for third quarter 2011.
"This has been an extremely encouraging quarter with key wins across the company," said Steven F. Gaffney, DynCorp International chairman and chief executive officer. "This diverse mix of contract awards - from Training and Mentoring to Contingency Operations to our Global Linguist Solutions joint venture - is evidence that the process improvement journey we have been on over the last several quarters is making a difference. I'm pleased with what the team has accomplished and look forward to continued growth ahead."
Second Quarter 2011 Highlights
Global Stabilization and Development Solutions ("GSDS") Second Quarter Highlights:
GSDS segment revenue of $598.2 million, which represents 65.1% of our total revenue for the three months ended July 1, 2011, increased of 25.1% over the second quarter 2010. GSDS reported adjusted EBITDA of $18.3 million for the second quarter, a decrease of $4.6 million from the comparable period in 2010. The performance was primarily driven by the following:
Contingency Operations - $417.1 million in Revenue:
Training and Mentoring--$156.0 million in Revenue:
Security Services-- $12.9 million in Revenue:
Intelligence Training and Solutions-- $8.4 million in Revenue:
Global Platform Support Solutions ("GPSS") Second Quarter Highlights:
GPSS segment revenue of $317.9 million, which represents 34.6% of our total revenue for the three months ended July 1, 2011, flat to second quarter 2010. GPSS also reported adjusted EBITDA of $24.3 million for the second quarter 2011, an 8.1% increase from the comparable period in 2010. The results were primarily driven by the following:
Aviation--$156.7 million in Revenue:
Air Operations---$113.1 million in Revenue:
Operations and Maintenance--$48.3 million in Revenue:
Global Linguist Solutions (GLS) Second Quarter Highlights:
Liquidity
Cash From Operating Activities of $50.3 million for the
second quarter of 2011 benefited from a seven day reduction in Days
Sales Outstanding from 86 days in first quarter 2011 to 79 days in
second quarter 2011, and an $18.0 million reduction in Restricted
Cash. This benefit was partially offset by a reduction in our
Accounts Payable and Accruals.
Conference Call
The Company will host a conference call at 10:00 a.m. EDT
on Monday August 15, 2011 to discuss results for the second quarter
2011. The call may be accessed by webcast or through a dial-in
conference line.
To access the webcast and view the accompanying presentation, please go to http://www.dyn-intl.com/, click on "Investor Relations" and "Events & Presentations." Please go to the site approximately fifteen minutes prior to the start of the call to register, download and install any necessary audio software.
To participate by phone, dial (866) 871-0758 and enter the conference ID number: 88783157. International callers should dial (706) 634-5249 and enter the same conference ID number above.
A telephonic replay will be available from 1:00 p.m. EDT on August 15, 2011 through 11:59 PM EDT September 15, 2011. To access the replay, please dial (855) 859-2056 or (404) 537-3406 and enter the conference ID number.
About DynCorp International
DynCorp International Inc., a wholly owned subsidiary of
Delta Tucker Holdings, Inc., is a global government services
provider in support of U.S. national security and foreign policy
objectives, delivering support solutions for defense, diplomacy,
and international development. DynCorp International operates major
programs in logistics, platform support, contingency operations,
and training and mentoring to reinforce security, community
stability, and the rule of law. DynCorp International is
headquartered in Falls Church, Va. For more information, visit http://www.dyn-intl.com/.
Reconciliation to GAAP
In addition to the Company's financial results reported in
accordance with accounting principles generally accepted in the
United States of America ("GAAP") included in this press release,
the Company has provided certain financial measures that are not
calculated according to GAAP. We define EBITDA as GAAP net income
attributable to the Company adjusted for interest, taxes,
depreciation and amortization. Management believes these non-GAAP
financial measures are useful in evaluating operating performance
and are regularly used by security analysts, institutional
investors and other interested parties in reviewing the Company.
Non-GAAP financial measures such as EBITDA and Adjusted EBITDA are
not intended to be a substitute for any GAAP financial measure and,
as calculated, may not be comparable to other similarly titled
measures of the performance of other companies. We believe that
Adjusted EBITDA is useful in assessing our ability to generate cash
to cover our debt obligations including interest and principal
payments. As such, we add back certain noncash items from
operations and certain other items as defined in our 10.375% Senior
Unsecured Notes and our Credit Facility. Non-GAAP financial
measures are not intended to be a substitute for any GAAP financial
measure and, as calculated, may not be comparable to other
similarly titled measures of the performance of other
companies.
For a reconciliation of non-GAAP financial measures to the comparable GAAP financial measures please see the financial schedules accompanying this release.
Forward-looking Statements
This announcement may contain forward-looking statements
regarding future events and our future results that are subject to
the safe harbors created under the Securities Act of 1933 (the
"Securities Act") and the Securities Exchange Act of 1934 (the
"Exchange Act"). Without limiting the foregoing, the words
"believes," "thinks," "anticipates," "plans," "expects" and similar
expressions are intended to identify forward-looking statements.
Forward-looking statements involve risks and uncertainties.
Statements regarding the amount of our backlog and estimated total
contract values are other examples of forward-looking statements.
We caution that these statements are further qualified by important
economic, competitive, governmental, international and
technological factors that could cause our business, strategy,
projections or actual results or events to differ materially, or
otherwise, from those in the forward-looking statements. These
factors, risks and uncertainties include, among others, the
following: the future impact of mergers acquisitions, joint
ventures or teaming agreements; our substantial level of
indebtedness and changes in availability of capital and cost of
capital; the outcome of any material litigation, government
investigation, audit or other regulatory matters; policy and/or
spending changes implemented by the Obama Administration, any
subsequent administration or Congress; termination or modification
of key United States ("U.S.") government or commercial contracts,
including subcontracts; changes in the demand for services that we
provide or work awarded under our contracts, including without
limitation, the Civilian Police, International Narcotics and Law
Enforcement, Worldwide Personal Protection Services and Logistics
Civil Augmentation Program ("LOGCAP IV") contracts; pursuit of new
commercial business in the U.S. and abroad; activities of
competitors and the outcome of bid protests; changes in significant
operating expenses; impact of lower than expected win rates for new
business; general political, economic, regulatory and business
conditions in the U.S. or in other countries in which we operate;
acts of war or terrorist activities; variations in performance of
financial markets; the inherent difficulties of estimating future
contract revenue and changes in anticipated revenue from indefinite
delivery, indefinite quantity contracts; the timing or magnitude of
any award fee granted under our government contracts, including,
but not limited to, LOGCAP IV; changes in expected percentages of
future revenue represented by fixed-price and time-and-materials
contracts, including increased competition with respect to task
orders subject to such contracts; termination or modification of
key subcontractor performance or delivery; statements covering our
business strategy, those described in "Risk Factors" and other
risks detailed from time to time in our reports filed with the SEC;
and other risks detailed from time to time in our reports posted to
our website or made available publicly through other means.
Accordingly, such forward-looking statements do not purport to be predictions of future events or circumstances and therefore, there can be no assurance that any forward-looking statement contained herein will prove to be accurate. We assume no obligation to update the forward-looking statements. Given these risks and uncertainties, you are cautioned not to place undue reliance on forward-looking statements. The Company's actual results could differ materially from those contained in the forward-looking statements.
Second Quarter Financial Results
For more information contact
Chris Porter
Vice President and Treasurer
(817) 224-7742
Christopher.Porter@dyn-intl.com
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