IRVING, TEXAS (August 4, 2005) – DynCorpInternational, LLC and its subsidiaries (collectively, the”Company”), a leading professional services and project managementfirm serving government and industry, today reported revenue of$1.9 billion and net income of $58.8 million for the 12-monthperiod that ended April 1, 2005.
Full Year Operating Results
The Company reported revenue of $1.9 billion, adjusted EBITDA of$118.4 million and net income of $58.8 million for the fiscal year.Revenue increased 58.3 percent when compared to revenue from theprior year of $1.2 billion. The Company´s revenue increase isprimarily the result of a significant contract award received inFebruary 2004 to train and offer logistic support to police forcesof foreign countries, growth under the Contract Field Teamscontract in the Company´s Field Technical Services segment, andgrowth in various other contracts in the Company´s InternationalTechnical Services segment.
The Company generated adjusted earnings before interest, taxes,depreciation and amortization (EBITDA) of $118.4 million for the 12months that ended April 1, 2005, compared with adjusted EBITDA of$60.1 million for the prior year. EBITDA is a primary component ofcertain covenants under the Company´s senior credit facility. Inaddition, adjusted EBITDA does not represent net income or cashflows from operations, as these terms are defined by accountingprincipals generally accepted in the United States of America. Adetailed reconciliation of net income to adjusted EBITDA has beenincluded and should be read in conjunction with this release.
The Company reported net income of $58.8 million for the 12 monthsthat ended April 1, 2005, compared with $31.4 million for the prioryear – an increase of 87.3 percent. The Company´s net incomeincrease resulted primarily from the stronger revenue performancediscussed above and a shift in contract mix to include a lowerpercentage of cost reimbursable contracts during the most recent12-month period. Cost reimbursable contract types have a bias togenerate lower margins than those realized from the Company´s timeand material or fixed price contract types.
As of April 1, 2005, the Company possessed $13 million of cash onhand. The Company had also drawn $35 million under its revolvingcredit facility, leaving $34.9 million available for borrowingunder this facility. As of July 1, 2005, the Company had repaidamounts outstanding under its revolving credit facility, and hadcash on hand of approximately $29.1 million. The Company hadavailable to borrow approximately $69.9 million under its revolvingcredit facility on July 1, 2005.
The Company expects to file Form S-4 with the Securities andExchange Commission by end of business August 10, 2005. The Companyadvises readers of this release to refer to the Form S-4 filing foradditional information
About DynCorp International, LLC andsubsidiaries
DynCorp International is a leading professional services andproject management firm with global expertise in aviation services,logistics, and security operations. Headquartered in Irving, Texas,DynCorp International employs more than 14,000 people in some 35countries. It traces its beginnings to the founding of DynalectronCorporation in 1946. The statements in this press release that arenot historical fact are “forward-looking statements” within themeaning of Private Securities Litigation Reform Act of 1995. All ofthese forward-looking statements are based on estimates andassumptions made by the Company´s management that, althoughbelieved by DynCorp International and its subsidiaries to bereasonable, are inherently uncertain.
Forward-looking statements involve risks and uncertainties,including, but not limited to, economic, competitive, governmental,and technological factors outside of its control that may cause itsbusiness, strategy or actual results to differ materially from theforward-looking statements.
These risks and uncertainties may include, among other things:changes in the demand for services which the Company provides; theactivities of competitors; changes in significant operatingexpenses; changes in availability of capital; general economic andbusiness conditions in the United States; acts of war or terroristactivities; variations in performance of financial markets; andother factors described in the “Risk Factors” section in theCompany´s Form S-4, which is expected to be filed with theSecurities and Exchange Commission by end of business August 10,2005.
Given these risks and uncertainties, you are cautioned not toplace undue reliance on forward-looking statements. DynCorpInternational and its subsidiaries undertake no obligation topublicly update or revise any forward-looking statement as a resultof new information, future events or otherwise, except as requiredby law.
Basis of Presentation
On February 11, 2005, DynCorp International was sold by ComputerSciences Corporation (“CSC”) to an entity controlled by The VeritasCapital Fund II, L.P. and its affiliates (“Veritas”). The financialinformation presented below from March 29, 2003 to February 11,2005, falls into the period of CSC ownership, and is referred to asthe “immediate predecessor period.” The Company refers to financialstatements from and after February 12, 2005 as the “successorperiod.” The presentation of financial results during the”immediate predecessor period” are presented on a historical basisand do not include the significant impact that the sell transactionhas had on the Company.