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Stanley, Inc. (SXE)
F4Q08 Earnings Call
May 14, 2008 5:00 pm ET
Larry Delaney – Investor Relations Counsel
Phil Nolan – Chairman, President and Chief Executive Officer
Brian Clark – Executive Vice President, Chief Financial Officer, Treasurer
William Loomis – Stifel, Nicolaus & Co.
Brian Kinstlinger – Sidoti & Co.
Edward Caso – Wachovia Securities
Chris Donaghey – SunTrust Robinson Humphrey
Cai von Rumohr – Cowen & Co.
Sarah Catherine Phillips - Stephens Inc.
Mike Smith - BB&T Capital Markets
Mike Lewis - BB&T Capital Markets
Previous Statements by SXE
» Stanley, Inc. F3Q09 (Qtr End 12/26/08) Earnings Call Transcript
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» Stanley, Inc. F1Q09 (Qtr End 06/27/08) Earnings Call Transcript
Thanks for joining us on Stanley’s fiscal fourth quarter 2008 conference call. Here today are Stanley’s Chairman, President and CEO; Phil Nolan and Chief Financial Officer, Brian Clark. Phil is going to begin with an overview of the company’s fiscal fourth quarter operating results. Brian will then go through the financial results and issue guidance for Stanley’s fiscal first quarter 2009 and full year 2009. We’ll then take your questions.
I’d like to remind our listeners that our comments today will contain forward-looking statements and information based on management’s current expectations. Such forward-looking statements are subject to certain risks, uncertainties and assumptions. Information about various risks that could affect the company’s financial results is available in the “Risk Factor” section of Stanley’s Form 10-K for the fiscal year ended March 31, 2008 and in other reports the company files with the SEC.
In addition, today’s call will include discussions of certain non-GAAP financial measures including EBITDA and organic revenue growth. Tables reconciling our non-GAAP financial measures are available in our earnings press release and available in the Investor Relations section of the company’s website at www.StanleyAssociates.com.
With that I’ll turn the call over to Phil Nolan.
Stanley once again delivered a solid quarter and a strong finished to our fiscal year 2008. Q4 revenue grew by 49% over the same period last year to a single-quarter record $173.5 million with 39% of that growth coming organically.
Net income for the quarter was $7.7 million versus $4.5 million a year ago, equating to diluted earnings per share of $0.33 up from $0.20 from Q4 of last year. For the year revenue was $604.3 million up 48% from revenue of $409.4 million in FY07. Full year organic growth was 37%.
Net income for FY08 was $26.2 million versus $10.7 million for FY07 and diluted earnings per share was $1.12 compared to $0.55 a year ago. Revenue for both Q4 and FY08 came in at the high end of the guidance we issued in our Q3 call. Diluted earnings per share for both periods exceeded guidance by a penny.
We are encouraged by the trends we are seeing thus far in FY09. We believe the [inaudible] that helped produce record top line numbers in FY08 will continue to drive growth and improved performance in FY09.
These include increasing system demand for passport services especially as the June 2009 deadline for the Land and Sea provisions of the Western Hemisphere Travel Initiative approaches, additional demand for products and services through SPAWAR C4ISR contracts, ramp up of contracts won in FY08 supporting the Army’s equipment RESET mission as well as anticipated new awards in FY09 and a full year’s revenue on our relatively new contract supporting the Department of Homeland Security’s Citizenship and Immigration Service Centers in California and Vermont.
Bookings for the fourth quarter were $660.7 million and $1.3 billion for fiscal 2008 equating to a Q4 book-to-bill of almost 4:1 and better than 2:1 for the full fiscal year. Our contract backlog at March 31 was approximately $1.8 billion, up 38% sequentially from Q3 and 83% year-over-year.
Our qualified pipeline currently stands at well over $3 billion. As of today we have $435 million in proposals submitted and awaiting decision. We expect to submit another $2 billion in proposals over the next six to nine months.
The overriding focus of Q4 was to secure the re-compete and follow-on awards of two of our largest vehicles, Passport Services and Corporate Production. One March 17 we announced that we won the five year, $570 million contract to continue support of the U.S. State Department’s Bureau of Consular Affairs Passport Services Directorate.
Stanley services include production, operational and business process support, training, procurement, administration and evaluation of critical supplies and facilities management support at the five passport centers and 14 passport agencies nationwide along with the headquarter support offices. We have now led this effort for the past 15 years and have been the only contractor to do so.
Our passport related efforts which include the build out and operation of the two new centers in Hot Springs, Arkansas and Tucson, Arizona are performing extremely well. The Tucson facility produced its first document on May 5 of this year and the center in Hot Springs now has more than 250 full-time employees and has produced nearly seven million passports since it opened in April 2007.
Last month we won a major follow-on contract in the SPAWAR corporate production vehicle. SPAWAR’s corporate production capabilities provide a highly flexible, responsive and affordable vehicle for the Navy to contract its C4ISR needs. It has generated a high volume of new and often unexpected quick turnaround task orders and we again look forward to being one of SPAWAR’s go-to companies and anticipate healthy performance from corporate production in FY09.