Contract delays push down GTEC 2Q revenues
GTEC struggled with late contract awards and customer decisions, slowing its anticipated growth in 2010.
- By Matthew Weigelt
- Aug 06, 2010
Global Defense Technology and Systems Inc. executives predicted better business figures in the coming quarter and in 2011, despite a revenue slip in the second quarter and first half of this year.
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GTEC’s revenue from products and services for the second quarter of 2010 totaled $49.2 million, compared to $53.4 million in 2009, according to the company's latest financial report, released Aug. 5. For the first half of the year, GTEC recorded $95.1 million in revenue, which is $7.9 million below 2009’s total.
More specifically, GTEC’s Force Mobility and Modernization Systems (FMMS) segment gained $25.2 million in revenue, which is $6.1 million less than in 2009. The company’s revenue from its Technology and Intelligence Services (TIS) totaled $24 million, a $1.9 million increase from the second quarter of 2009, according to the report.
Executives said they trimmed operating costs and other expenses to yield a net income of $2.1 million for the quarter.
“Our second-quarter results reflect GTEC’s focus on delivering bottom-line results despite a number of challenges to our top line,” said John Hillen, the company's president and chief executive officer, in announcing the results. “Continued delays in contract awards for our FMMS business pushed a portion of our revenue into 2011, while delays in customer decisions in our fast-growing TIS business have slowed the extraordinary growth we anticipated in 2010.”
GTEC’s qualified business development pipeline is currently more than $3.2 billion, and the company has more than $300 million in pending awards across its business. Executives anticipate decisions on the awards by the end of 2010.
In the second quarter, GTEC had $42 million in contract awards, including a $9 million, five-year task order from a classified contract supporting the intelligence community. Also in the quarter, the Army awarded GTEC a $27 million contract for field feeding systems.
Executives said that momentum has continued into the third quarter with receipt of a $6 million, five-year task order under its Justice Department counterterrorism contract and a $47 million, five-year extension of a classified intelligence analysis subcontract.
GTEC expects to receive $25 million in revenue this month from expeditionary camp solutions orders.
“We anticipate strong cash flow in the third quarter as we bill and collect receivables from our FMMS customers for fixed-price work that was recently completed and performed in the first and second quarters,” said Jim Allen, GTEC’s executive vice president and chief financial officer.
Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.