IPOs fire fed market

Increased revenue and new public players are bright spots of active third quarter

Three initial public offerings highlighted the 2006 third quarter, with ICF International Inc., Science Applications International Corp. and Stanley Inc. joining the ranks of public companies in the government IT space.

First out of the blocks was ICF of Fairfax, Va., which went public in late September. The professional services and technology solutions company offered 4,670,000 shares of its common stock and raised about $85.9 million.

In October, SAIC raised more than $1.1 billion with its 75 million-share IPO. The company's plans to go public earlier this year were derailed by a contract dispute with the Greek government for security services SAIC provided at the 2004 Summer Olympics in Athens.

About a week after SAIC went public, Stanley of Arlington, Va., held its IPO offering of 6.3 million shares of common stock and raised about $81.9 million. The IT services and solutions company will use the proceeds to pay off outstanding debt.
Several other companies in this space, including CACI International Inc. of Arlington, Va., MTC Technologies Inc. of Dayton, Ohio, and NCI Inc. of Reston, Va. , reported record revenues in the third quarter. NCI, however, saw its net income drop in the third quarter to $2.4 million, compared to $2.7 million for the same quarter in 2005.

Other highlights

Accenture Ltd. The Hamilton, Bermuda, company won a five-year, $199 million contract to modernize the technology platform for the California Public Employees' Retirement System, one of the largest public pension funds in the United States. The company will help move CalPERS to an enterprisewide, Web-based system.

BearingPoint Inc. In September, the New York Stock Exchange granted the McLean, Va., company a three-month trading period through Jan. 2, 2007, for it to complete and file its 2005 annual report. The NYSE is monitoring BearingPoint's progress on its other delayed filings as part of its continued listing assessment. In mid-October, the company promoted Judy Ethell, its chief accounting officer, to chief financial officer. She is overseeing efforts to complete the audit on the 2005 and 2006 financial statements.

CACI International Inc. The Arlington, Va., contractor won about $230 million in previously unannounced contracts from federal government clients in the national security and intelligence communities. CACI will help boost the capabilities of federal agencies that perform homeland security and anti-terrorism duties. About 90 percent of the work is new.

Computer Sciences Corp. Although CSC reported preliminary results for the quarter, the El Segundo, Calif., company has not filed quarterly report with the Securities and Exchange Commission. CSC is waiting until it completes its review of its stock option grant practices and has determined the impact of taxes and accounting procedures, which may affect the reported preliminary results.

Dynamics Research Corp. The Andover, Mass., company was a subcontractor on a team, led by Lockheed Martin Corp., that won a $589 million deal from the Air Force for the Air Operation Center's Weapon System integrator program. The project will merge and standardize hardware and software across the more than 20 Air Force Air Operation Centers. DRC's subcontract is for up to 10 years, with first-year revenue estimated to be about $5 million.

General Dynamics Corp. General Dynamics Information Technology, Fairfax, Va., won a five-year, $18.8 million contract from the Health and Human Services Department for systems integration services to support its Grants.gov Line of Business initiative.

The company will relocate and maintain the Grants.gov system through March 2007, as well as build an improved delivery system. It also will maintain and furnish enhancements to the new system for the life of the contract.

GTSI Corp. The Chantilly, Va., contractor notified SEC that it was still reviewing past statements for errors and would not meet the deadline for filing its 2006 third quarter financial report.

The company previously determined that it had to restate its 2004 and 2005 consolidated financial reports to correct errors in the accounting of the transfer of certain lease receivables. GTSI also said that it had to restate its 2003 consolidated financial statements because of required changes in accounting treatment.

It also must restate its financial report for the first quarter of 2006.

Harris Corp. Harris completed the cutover of the Federal Aviation Administration's legacy satellite network to the new FTI-SAT, the FAA Telecommunications Infrastructure satellite network. The Melbourne, Fla., company is the prime contractor and system architect for the FTI program, awarded in 2002.

Its most recent work involved 85 Earth stations and 200 satellite services, and was completed on schedule in slightly more than 12 months.

ICF International Inc. The company completed its IPO, and its common stock started trading on Nasdaq Sept. 28. During the third quarter, ICF won contract recompetes totaling $147 million and new government and commercial contract awards worth $51 million.

L-3 Communications Inc. Michael Strianese was appointed president and CEO of the New York company, replacing Frank Lanza, who died in June. Strianese also was elected to L-3's board. He had been interim CEO and chief financial officer since Lanza's death.

Lockheed Martin Corp. Bethesda, Md.-based Lockheed Martin completed its acquisition of Pacific Architects and Engineers Inc., which operates and maintains facilities and performs base operations support for the Defense and State departments, Canada's National Defense Department and New Zealand's Defense Ministry. The California company is now part of Lockheed Martin's Information Technology unit.

ManTech International Corp. In early October, the Fairfax, Va., company completed its acquisition of GRS Solutions Inc., a business that makes specialized technical, operational and analytical services for intelligence agencies. Terms of the transaction were not disclosed.

MTC Technologies Inc. CEO David Gutridge will retire Jan. 12, 2007, his 60th birthday, although he will continue to serve on MTC's board of directors until its 2007 annual meeting of stockholders. Rajesh Soin, chairman of the board and company founder, will become CEO.

NCI Inc. The systems integrator won a four-year task order, potentially worth $25.3 million, to supply the Air National Guard's Information Analysis Network with technology transformation and IT services.

Northrop Grumman Corp. The Los Angeles company's Information Technology sector in McLean, Va., won a five-year, $500 million contract to equip New York with a broadband, public-safety wireless network. Northrop Grumman IT will supplement the city's mobile wireless communications network with high-speed data and video capabilities. It also will deploy several advanced wireless applications to support first responders and transportation personnel.

Raytheon Co. The Waltham, Mass., company won a $229.8 million contract from Florida's Turnpike Enterprise to supply electronic toll collection systems for the next 10 years.

Raytheon will furnish 835 lanes of toll equipment, a central processing and audit system and open-road tolling technology. Raytheon plans to complete the installation
within four years and remain under contract for the following six years for related tasks.

Science Applications International Corp. Company shares started trading on the New York Stock Exchange Oct. 12, raising $1.1 billion.

SI International Inc. The Reston, Va., company won a 10-year, $138 million outsourcing contract from the Patent and Trademark Office for pre-grant publication classification services.

SI International will provide expert documentation classification services and software and electronic performance support technologies for a system that can determine proper classifications.

SRA International Inc. The Fairfax, Va., company completed its acquisition of RABA Technologies LLC of Columbia, Md., a provider of high-end technical services to the national security and intelligence communities.

Stanley Inc. The IT services and solutions company completed its IPO, and Oct. 18 shares of its common stock started trading on the New York Stock Exchange. Stanley will use the IPO's net proceeds to pay down some of the outstanding debt under its senior credit facility.

Unisys Corp. The Blue Bell, Pa., company won a contract, potentially worth $50 million, from FBI to develop and deploy a DNA Index System that will let federal, state and local laboratories share and compare profiles to link convicted offenders to violent crimes.

The IT company will develop software, deploy operations and provide maintenance support.

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