Largest-ever contract win spurs SRA 3Q numbers

The contractor reported organic revenue growth of 8.4 percent.

SRA International Inc. reported $411.0 million in revenue for the third quarter of fiscal 2010, which ended March 31, a percent 9.0 increase over the $376.9 million in revenue for the March 2009 quarter. Organic revenue growth was 8.4 percent.

In a statement released following market closing May 6, the company reported an operating loss in the quarter of $30.9 million, net losses of $39.7 million, and a loss per share of $0.70.

Included in the quarter are non-cash asset impairment charges of $61.3 million related to the acquisition of Era Corp. This includes a $60.0 million goodwill impairment charge that is not tax deductible.

Adjusted for the effect of these impairment charges, operating income was $30.4 million, net income was $21.1 million, and diluted earnings per share were $0.36, the company said.

Reported figures include two other unusual items, SRA said. Resolution of a dispute with the sellers of Era resulted in a gain of $3.4 million, which is shown on a separate line on the income statement, and is not taxable.

SRA International in 2008 acquired Era, a privately held provider of advanced surveillance technologies for air traffic management, airport operations, military and security markets.

The company also recognized additional federal and state tax benefits attributable to prior periods that reduced income tax expense in the quarter by $1.1 million.

Adjusted for the effect of these two items and the impairment charges, operating income was $27.1 million, net income was $16.6 million, and diluted earnings per share were $0.29.

“We’re happy to report another quarter of solid organic growth. We won the largest contract in the company’s history during the quarter, and are confident that our bid pipeline provides continued opportunity for growth,” said SRA President and Chief Executive Officer Stan Sloane.

Sloane was referring to the $500 million blanket purchase agreement from the General Services Administration’s Federal Systems Integration and Management Center for SAP implementation across the Agriculture Department, won in March 2010.

Cash flow from operations was strong in the quarter, added Executive Vice President and Chief Financial Officer Rick Nadeau in the statement. “We repaid all borrowings on our line of credit and finished the quarter with no debt.”

SRA International, of Fairfax, Va., ranks No. 26 on Washington Technology’s 2009 Top 100 list of the largest federal government prime contractors.

About the Author

David Hubler is the former print managing editor for GCN and senior editor for Washington Technology. He is freelance writer living in Annandale, Va.

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