SRA reports flat earnings

An increase in bid and proposal investment dampened SRA's earnings for the quarter that ended March 31, the company announced.

Revenue for the quarter increased 31 percent to $296.1 million from $226 million a year ago. Net income was flat at $14.8 million, or 26 cents per diluted share, compared with $14.7 million, or 26 cents per diluted share for the year-earlier quarter. The company’s earnings reflect the impact of stock option expense. Excluding that charge, March quarter earnings were 29 cents per share.

SRA in April issued guidance that its March quarter results would come in under expectations. In February, the company projected earnings, excluding stock option expense, of 31 cents to 32 cents per share. SRA attributed the results to an increase in bid and proposal costs and a contract for which the company does not expect to recover incurred costs.

Renny DiPentima, SRA's president and chief executive officer, said a delay in approval of appropriations bills last year caused procurements to slip, pushing activity into the March quarter.

As a consequence, the company stepped up its bid and proposal investment. SRA also redirected some employees to work on nonbillable bid and proposal activities to support future growth, he said.

Pointing to expected future revenue, he said the company captured new business during the quarter with a potential value of $390 million. The company’s sales pipeline stands at $12.5 billion, a 67 percent year-over-year increase.

SRA also reported the award of a blanket purchase agreement in which the integrator will offer information technology services to the U.S. Agency for International Development. The company will support USAID's Office of Economic Growth, Agriculture and Trade under a five-year contract with a maximum dollar value of $125 million.