SRA International, Inc. F4Q09 (Qtr End 06/30/09) Earnings Call Transcript

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2009-08-12 19:31:22.0

Tags: Call Transcript, SRA International Inc., Earnings, Stephens Inc., GCD, Mergers & Acquisitions, Investment, Finance, Seeking Alpha

Question-and-Answer Session

Operator

(Operator Instructions) Our first question comes from Tim Quillin - Stephens Incorporated.

Tim Quillin - Stephens Incorporated

It sounds like there were a couple or maybe more of one-time costs that you incurred during the quarter, and I am just trying to figure it out. I guess one was associated with the bonuses and how you expensed that. I think I understand that it was a $0.03 EPS impact. What was that in terms of the dollar expense and what was the $1 million charge taken in GCD and also what was the composition of that as regards to SG&A versus cost of services?

Rick Nadeau

That was $1 million net in SG&A.

Operator

Your next question comes from the line of Bill Loomis - Stifel Nicolaus.

Bill Loomis - Stifel Nicolaus

Keeping along that line of questioning on GCD, looking to the first quarter, do you expect a continued loss on GCD and then also on Era, when you say there was a profit in the fourth quarter, if we included the amortization on Era from the acquisition, would that have turned into a loss, and what’s the outlook there in the first quarter?

Stan Sloane

I’ll let Rick fill in the details in a second. Let me just comment on GCD. I don’t think we are going to see much of a change on GCD until the economy changes and that particular sector, the CRO sector, improves. We’re doing what’s appropriate to keep the business right-sized and keep focusing on new business, but my anticipation is that that will probably continue to operate at or below breakeven for a while until we see that change. Era, the turnaround has been pretty good. I’m very pleased with that. The expectation there is that it’ll be sustained going forward.

Rick Nadeau

For guidance what we assumed for GCD was that we could continue to have operating losses in the first half of the year and then as we got toward the end of the fiscal year that we would be getting that business toward breakeven. So you would expect to see in Q1 and Q2 losses. I would say they’ll be a little less than what we experienced in Q4 as we did right-size, but we’ll continue to suffer in Q1 and Q2, and we’re hoping to get it toward breakeven at the back half of the fiscal year.

 

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