GTEC Reports First Quarter 2010 Financial Results

MCLEAN, Va., May 10 /PRNewswire-FirstCall/ -- Global Defense Technology & Systems, Inc. (Nasdaq: GTEC), a provider of mission-critical, technology-based systems, solutions and services for national security agencies and programs of the U.S. government, today announced its first quarter 2010 financial results.

First Quarter 2010 Results – Above Expectations

Revenue for the first quarter 2010 was $45.9 million. The Company's revenue from the Technology and Intelligence Services (TIS) and Force Mobility and Modernization Systems (FMMS) segments was $24.6 million and $21.3 million, respectively. Total segment operating income was $4.1 million, or 9.0% of segment revenues. Unallocated corporate expenses totaled $2.7 million. This resulted in operating income for the first quarter 2010 of $1.4 million and diluted earnings per share (EPS) of $0.12.

"Our first quarter results are above our expectations despite a number of challenges. Delays in contract award timing for our FMMS business pushed some of our revenue into the rest of the year and the impact of the federal government shutdown due to February weather emergencies shortened our billable labor at TIS during the quarter," said John Hillen, President & CEO of GTEC. "Our business development pipeline continues to expand and the contract awards we received late in the quarter and early in the second quarter provide continued momentum to meet our objectives of 14 to 20 percent growth in 2010."

Business Highlights – Contract Awards Momentum

Contract awards totaled $50 million for the first quarter 2010. Two significant awards are highlighted below:

• $18.7 million contract award from U.S. Army for field feeding systems
• $10.4 million, 5-year follow-on contract with the Naval Research Laboratory

GTEC's contract momentum continued into the second quarter of 2010, with a $26.7 million order to provide additional field feeding systems to the U.S. Army. The Company has approximately $60 million in two expeditionary camp solutions orders that are expected to be awarded by the end of the second  quarter. The Company's qualified business development pipeline is currently over $3 billion, a significant increase from $1.8 billion at the end of 2009. This growth is largely due to newly qualified opportunities in our FMMS pipeline, which represents $1.5 billion of the total qualified pipeline, and continued growth in our TIS pipeline.  Additionally, the FMMS pipeline has over $1 billion of opportunities, which are scheduled to be awarded by June 30, 2011.

As of March 31, 2010, GTEC had total backlog of $602 million and funded backlog of $127 million, which is up over 23% from December 31, 2009.

Balance Sheet Metrics – Strong Cash Flow

As of March 31, 2010, GTEC had no net debt based on over $4 million in operating cash flow in the first quarter.  

Jim Allen, Executive Vice President & CFO of GTEC, noted, "We had strong cash flow in the first quarter and expect to execute on our recent awards and backlog to deliver operating results in line with our 2010 growth objectives."

Forward Guidance – Maintains Full Year Outlook

GTEC's second quarter 2010 and full year 2010 guidance is summarized in the table below. GTEC's guidance does not include the assumption of any future acquisitions.

Key Guidance Assumptions

• Receipt of approximately $60 million in expeditionary camp solutions orders by June 30, 2010
• Net interest income of $50,000 in the second quarter and $125,000 for full year 2010
• Tax rate of 39.7% for the next three quarters

Conference Call

GTEC executive management will hold a conference call today at 5:00 p.m. ET, to discuss first quarter 2010 results and answer questions. Interested parties may access the call by dialing 866-804-6928 (domestic) or +1 857-350-1674 (international) and entering passcode 22212139. The conference call will be Webcast (audio only) simultaneously via the Investor Relations page of GTEC's website at   www.gtec-inc.com .  Interested parties should dial in or log on approximately 10 minutes prior to the start of the call.

A replay of the call will be available beginning at 8:00 p.m. ET today and will remain available through midnight ET, May 24, 2010. To access the replay, call (888) 286-8010 (domestic) or +1 (617) 801-6888 (international).  The confirmation code for the replay is 64235611.  A replay will also be available via the Investor Relations page of GTEC's website approximately 24 hours after the conclusion of the call.

About Global Defense Technology & Systems, Inc.

Global Defense Technology & Systems, Inc. (GTEC) provides mission-critical, technology-based systems, solutions and services for national security agencies and programs of the U.S. government. Our services and solutions are integral parts of mission-critical programs run by the Department of Defense, Intelligence Community, Department of Homeland Security, federal law enforcement agencies, and other parts of the federal government charged with national security responsibilities. Learn more about Global Defense Technology & Systems at www.gtec-inc.com .  

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this announcement other than historical data and information constitute forward-looking statements that involve risks and uncertainties. A number of factors could cause our actual results, performance, achievements or industry results to differ materially from the results, performance or achievements expressed or implied by such forward-looking statements. Some of these factors include, but are not limited to, the risk factors set forth in Global Defense Technology & Systems, Inc.'s (GTEC) Annual Report on Form 10-K, and such other filings that GTEC makes with the Securities and Exchange Commission from time to time. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward-looking statements.  All forward-looking statements speak only as of the date hereof and GTEC undertakes no obligation to update such forward-looking statements in the future except as required by law.

SOURCE Global Defense Technology & Systems, Inc.