BDM International to Go Public by Next Spring

DM International Inc.'s CEO Philip Odeen said stock market conditions are right for a public offering of the company's stock.

Bill Loomis, equity analyst for Ferris Baker Watts, said BDM's prospects "certainly look better now than a year ago. The market environment is right at this stage. People want to buy stocks."

After a strong showing in 1994, in which revenues reached an

all-time high of $774.2 million, the McLean, Va., company appears on its way to an even better performance this year. First quarter results set a company record, with revenues of $191.9 million and income of $3.3 million. BDM also has a $1.7 billion backlog, another company record. Odeen expects the company to reach $1 billion in revenues by 1997, if not sooner.

The growth, he pointed out, will depend on BDM's success in diversifying revenue streams and growing its information technology business. Odeen said he would continue to consider acquisitions of infotech companies, especially those with a sizable commercial business base.

In 1991, 67 percent of revenues came from Defense Department work, but last year, BDM cut

its dependence on the Pentagon

to 32 percent. Although BDM

has decreased its Defense De-partment business, it has stepped up foreign defense sales significantly, from 3 percent of its total revenues in 1991 to 25 percent last year.

The company's margins have slipped because of the diversification, but Odeen said he remains committed to it. He also expects to see the company's commercial business grow during the next several years through the efforts of its BDM Technologies group, formed in January 1993.

BDM's diversification strategy "definitely will help sell their story," analyst Loomis said. The company, however, will have to show how it will improve the performance of its European operation, he added. In November 1993, BDM purchased the German company IABG. The unit's revenues grew only 4 percent from 1993 to 1994.

Nevertheless, Odeen pointed out that BDM's $335.8 million in international sales exceeded the company's total revenues in 1991 of $296.8 million. For the last several years, BDM has concentrated on Europe and the Middle East for its foreign business. The company, in fact, recently won a contract for Saudi Arabia's National Guard modernization program.

Odeen said the company soon will start attacking the Pacific Rim market through alliances and joint ventures. BDM already has established relationships with companies in Korea, Japan, Malaysia, Indonesia, Singapore and Hong Kong.

The company's infotech business has given revenues a real boost during the last few years. That sector is BDM's most rapidly blooming business area, logging more than 35 percent growth annually since 1991. Little of that, Odeen said, came through acquisitions.

BDM has $100 million in new infotech contracts with state governments, $80 million in new orders from a key Pentagon integration program and approval to expand work on a large Air Force computer consolidation effort, which represents the company's largest federal contract.

CHARTS:

BDM's Diversification

1991 1994

(Revenues-$297M)(Revenues-$774M)

U.S. defense6732

Foreign defense325

Civil government2329

Commercial714

Financial Highlights

(in millions, except per share amounts)

199419931992

Revenues$774.2$558.3$424.4

Net income$13.1$11.4$9.3

Earnings per share$1.20$.95$.80