Company News: Page (1) of 1 - 05/01/14 Email this story to a friend. email article Print this page (Article printing at MyDmn.com).print page facebook

KEYW Reports First Quarter 2014 Financial Results

(May 01, 2014)

HANOVER, Md., May 1, 2014 (GLOBE NEWSWIRE) -- The KEYW Holding Corporation (Nasdaq:KEYW) announces Q1 2014 revenue of $63.8 million, a decrease of 18% versus Q1 2013. GAAP loss per share was $0.08 in Q1 2014 versus a GAAP loss per share of $0.06 in Q1 2013. Adjusted EBITDA for Q1 2014 was $2.4 million, or 4% of Q1 2014 revenue, as compared to $6.8 million in adjusted EBITDA for Q1 2013, or 9% of Q1 2013 revenue. Although consolidated adjusted EBITDA margin for Q1 2014 declined versus last year, adjusted EBITDA margin for KEYW's Government Solutions segment in Q1 2014 was a solid 14% as compared to 11% in Q1 2013. In Q1 2014, KEYW was awarded new funding actions of $72.1 million and ended the quarter with 1,081 employees.



"As we discussed on our Analyst Day webcast in March, our first quarter performance was impacted by the lingering effects of sequestration and weather disruptions in the greater DC area. However, the government business has begun to improve as evidenced by $9 million of new funding being added to our largest prime contract and the recent announcement of a new $8 million prime contract for open source data analysis and management," commented Len Moodispaw, CEO and President of KEYW. "We also continue to see positive growth in the business development metrics for the commercial business with increases in both pilot discussions and qualified opportunities. Despite a slow start to the year, I expect to see continued improvement across both segments over the course of the rest of the year."



In KEYW's Government Solutions segment, revenue decreased 19% in Q1 2014 to $61.3 million with the largest drivers of the decrease attributed to sequestration-related cuts and severe Q1 2014 weather in the DC area. However, Q1 2014 gross margin improved versus last year from 30% to 32% due primarily to a mix shift away from lower-margin subcontractor revenue. An improved mix of higher gross margin revenue and cost reductions in the Government Solutions segment increased the EBITDA margin for the Government Solutions segment from 11% in Q1 2013 to 14% in Q1 2014.


Revenue in KEYW's Commercial Cyber Solutions segment increased 24% in Q1 2014 versus last year from $2.0 million to $2.5 million. Bookings in Q1 2014 were $3.5 million. Operating expense in Q1 2014 increased to $8.5 million from $3.2 million in Q1 2013 due to additional investment in the infrastructure of the segment. These investments include substantial increases to the sales and customer support teams and growth in the engineering department.




Adjusted EBITDA, as defined by KEYW, is a non-GAAP measure that is calculated as GAAP net income plus other non-recurring expense, interest expense, income taxes, stock compensation, depreciation, and amortization. We have provided Adjusted EBITDA because we use the measurement internally to evaluate performance and we believe it is a commonly used measure of financial performance in comparable companies. It is provided to help investors evaluate companies on a consistent basis, as well as to enhance an understanding of our operating results. In addition, our board of directors and management use Adjusted EBITDA:




  • As a measure of operating performance;


  • To determine a significant portion of management's incentive compensation;


  • For planning purposes, including the preparation of our annual operating budget; and


  • To evaluate the effectiveness of our business strategies.



Adjusted EBITDA is not a recognized term under U.S. GAAP and does not purport to be an alternative to net income as a measure of operating performance or the cash flows from operating activities as a measure of liquidity. Please refer to the table below that reconciles GAAP net income to Adjusted EBITDA.




















































































 

Three months 

Three months

 

ended

ended

 

March 31, 2014

March 31, 2013

 

(Unaudited and in thousands)

Net (Loss) Income

$ (3,076)

$ (2,262)

Depreciation

1,554

1,345

Intangible Amortization

3,125

6,921

Acquisition and Other Nonrecurring Costs

2

144 (1)

Stock Compensation Amortization

1,624

1,287

Interest Expense

858

914

Tax Benefit

(1,669)

(1,536)

 

 

 

Adjusted EBITDA

 $ 2,418

 $ 6,813

 

 

 

(1) Includes non-cash gain associated with the write-down of the earn-out from the National Semiconductor asset purchase.

 

 























































































































































































THE KEYW HOLDING CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share amounts)

 

 

 

 

Three months 

Three months 

 

ended

ended

 

March 31, 2014

March 31, 2013

 

(Unaudited)

Revenues

 

 

 Government Solutions

 $ 61,308

 $ 75,855

 Commercial Cyber Solutions

2,499

2,017

 Total

63,807

77,872

Costs of Revenues, excluding amortization

 

 

 Government Solutions

41,769

53,354

 Commercial Cyber Solutions

546

456

 Total

42,315

53,810

Gross Profit

 

 

 Government Solutions

19,539

22,501

 Commercial Cyber Solutions

1,953

1,561

 Total

21,492

24,062

Operating Expenses

 

 

 Operating expenses

22,255

20,233

 Intangible amortization expense

3,125

6,921

 Total

25,380

27,154

Operating Loss

(3,888)

(3,092)

Non-Operating Expense, net

857

706

Loss before Income Taxes

(4,745)

(3,798)

Income Tax Benefit, net

(1,669)

(1,536)

Net Loss

$ (3,076)

$ (2,262)

Weighted Average Common Shares Outstanding

 

 

Basic

37,154,579

36,378,929

Diluted

37,154,579

36,378,929

Loss per Share

 

 

Basic

$ (0.08)

$ (0.06)

Diluted

$ (0.08)

$ (0.06)

 

 

 

 

 

 




















































































































































































































































THE KEYW HOLDING CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts)

 

 

 

 

March 31,

December 31, 

 

2014

2013

ASSETS

(Unaudited)

 

Current assets:

 

 

Cash and cash equivalents

 $ 64

 $ 2,480

Receivables

49,068

51,198

Inventories, net

12,940

11,305

Prepaid expenses

2,234

2,009

Income tax receivable

4,166

4,133

Deferred tax asset, current

1,133

1,133

Total current assets

69,605

72,258

 

 

 

Property and equipment, net

26,767

26,826

Goodwill

297,484

297,484

Other intangibles, net

26,218

29,343

Other assets

3,071

3,038

TOTAL ASSETS

 $ 423,145

 $ 428,949

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

Current liabilities:

 

 

Revolver

 $ 24,000

 $ 22,000

Accounts payable

7,293

8,004

Accrued expenses

5,422

5,628

Accrued salaries & wages

9,665

11,948

Term note – current portion

7,000

7,000

Deferred revenue

3,320

2,745

Total current liabilities

56,700

57,325

Long-term liabilities:

 

 

Term note – non-current portion

54,250

56,000

Non-current deferred tax liabilities

5,819

8,095

Other non-current liabilities

7,103

7,292

TOTAL LIABILITIES

123,872

128,712

 

 

 

Commitments and contingencies



 

 

 

Stockholders' equity:

 

 

Preferred stock, $0.001 par value; 5 million shares authorized, none issued



Common stock, $0.001 par value; 100 million shares authorized, 37,403,338 and 36,925,730 shares issued and outstanding

37

37

Additional paid-in capital

304,669

302,557

Retained earnings

(5,433)

(2,357)

Total stockholders' equity

299,273

300,237

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 $ 423,145

 $ 428,949

 

 

 

 

 

 


































































































































































































THE KEYW HOLDING CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

 

 

 

 

Three months 

Three months 

 

ended March 31, 

ended March 31, 

 

2014

2013

 

(Unaudited)

(Unaudited)

Net loss

$ (3,076)

$ (2,262)

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

 

 

Stock compensation

1,624

1,287

Depreciation/Amortization

4,679

8,266

Non-cash impact of TI earn-out reduction


(146)

Windfall tax benefit from option exercise

(421)


Deferred taxes

(2,276)

(721)

Changes in operating assets and liabilities:

 

 

Receivables

2,130

(947)

Inventories, net

(1,635)

70

Prepaid expenses

(225)

(63)

Income tax, net

574

(407)

Accounts payable

(711)

1,675

Accrued expenses

(2,289)

(6,647)

Other balance sheet changes

(34)

37

Net cash (used in) provided by operating activities

(1,660)

142

Cash flows from investing activities:

 

 

Acquisitions, net of cash acquired


(6,725)

Purchases of property and equipment

(1,494)

(2,108)

Capitalized software development costs


(1,273)

Net cash used in investing activities

(1,494)

(10,106)

Cash flows from financing activities:

 

 

Proceeds from revolver, net

2,000

8,000

Repayment of debt

(1,750)

(1,313)

Windfall tax benefit from option exercise

420


Proceeds from option and warrant exercises

68

705

Net cash provided by financing activities

738

7,392

Net decrease in cash and cash equivalents

(2,416)

(2,572)

Cash and cash equivalents at beginning of period

2,480

5,639

Cash and cash equivalents at end of period

 $ 64

 $ 3,067

 

 

 


A conference call has been scheduled to discuss these results on May 1, 2014 at 5:00 p.m. (EST). At that time, Management will review the Company's first quarter 2014 financial results, followed by a question-and-answer session to further discuss the results.



Interested parties will be able to connect to our Webcast via the Investor page on our website, http://investors.keywcorp.com on May 1, 2014. We encourage people to register for an email reminder about the Webcast on the Event Calendar tab, also found on the Investors page of our website. Interested parties may also listen to the conference call by calling 1-877-853-5645. The International Dial-In access number will be 1-408-940-3868. The conference ID for the event is 30049686.



An archive of the Webcast will be available on our webpage following the call. In addition, a podcast of our conference call will be available for download from our Investors page of our website at approximately the same time as the webcast replay.



About KEYW



KEYW provides agile cyber superiority, cybersecurity, and geospatial intelligence solutions for U.S. Government intelligence and defense customers and commercial enterprises. We create our solutions by combining our services and expertise with hardware, software, and proprietary technology to meet our customers' requirements. For more information contact KEYW Corporation, 7740 Milestone Parkway, Suite 400, Hanover, Maryland 21076; Phone 443-733-1600; Fax 443-733-1601; E-mail investors@keywcorp.com; or on the Web at www.keywcorp.com.



Forward-Looking Statements: Statements made in this press release that are not historical facts constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include but are not limited to statements about expected improvement and growth in our Government Solutions and Commercial Cyber Solutions segments during the remainder of 2014, statements about our future expectations, plans and prospects, and other statements containing the words "estimates," "believes," "anticipates," "plans," "expects," "will," "potential," "opportunities", and similar expressions. Our actual results, performance or achievements or industry results may differ materially from those expressed or implied in these forward-looking statements. These statements involve numerous risks and uncertainties, including but not limited to those risk factors set forth in our Annual Report on Form 10-K, dated and filed March 10, 2014 with the Securities and Exchange Commission (SEC) as required under the Securities Act of 1934, and other filings that we make with the SEC from time to time. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward-looking statements. KEYW is under no obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events or otherwise.


CONTACT: Chris Donaghey
443-733-1600

Page: 1


Related Keywords: DEFENSE, SOFTWARE, EARNINGSUSA, Science, Internet Technology, Computer Science, Business, Email, Other,

HOT THREADS on DMN Forums
Content-type: text/html  Rss  Add to Google Reader or
Homepage    Add to My AOL  Add to Excite MIX  Subscribe in
NewsGator Online 
Real-Time - what users are saying - Right Now!

@ Copyright, 2014 Digital Media Online, All Rights Reserved