KEYW reports a fortunate third quarter

KEYW Corp. saw its revenue and earnings grow in the third quarter as it reaped the benefits of its acquisition strategy.

Leonard Moodispaw, president and CEO of KEYW, said that swift transactions made this a notable quarter for the company. “Not only did we see solid business execution and financial results, but we also announced and, subsequent to quarter end, closed two major acquisitions: Poole & Associates and SenSage.”

“KEYW also completed a successful $100 million secondary offering of our common stock," he added.

Revenue was up 6 percent at $57.4 million, an increase from 2011’s $54 million in for the same quarter.

KEYW attributed the increase to its acquisition of Flight Landata in August 2011, and added that the increase might have been greater had it not been for a large product delivery order that was included in 2011’s third quarter revenue figure.

Its 2012 third quarter revenue also might have been greater if not for decreases in Air Force services work, a contract reassignment to another company and increased use of billable staff for internal research and development plans, the company said.

KEYW had third quarter earnings per share of 1 cent on a fully diluted basis, as opposed to no earnings per share in 2011.

KEYW said that this quarter’s EPS figure was affected by amortization associated with acquisition-related intangibles, reducing it by about 10 cents per share on an after tax basis. 2011’s EPS was also affected, but only by 8 cents.

KEYW’s unaudited net income in 2012 third quarter alone was $341,000, an increase over the previous year’s third quarter net income of $105,000.

Year-to-date 2012, the company’s unaudited net income was $835,000, an increase over 2011’s year-to-date figure, $218,000.

Consolidated gross margins rose from 28 percent in the third quarter of 2011 to 34 percent in this quarter. KEYW attributed this 6 percent increase to a revenue mix shift toward its integrated solutions segment.

Research and development expenses were $1.7 million, an increase from $904,000 in 2011.

Moodispaw said he expects “the acquisitions of Poole, which adds several key prime contract vehicles, and SenSage, a major technology contributor to our 'horizontal path' efforts, to play key roles in the next chapter of KEYW's story.”

He said he sees a strong ending to 2012 and “a transformational 2013,” he said.