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Paradigm Holdings Provides Business Update
Posted May 17, 2011
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ROCKVILLE, Md.--(BUSINESS WIRE)--Paradigm Holdings, Inc. (OTCOB: PDHO), a provider of comprehensive information technology and cyber security solutions for federal government enterprises, today provided an update for the first quarter ended March 31, 2011.
First Quarter 2011 Highlights:
• Revenues increased by 66.5% to $12.5 million compared to the first quarter of 2010
• Gross profit increased by 41.6% to $2.3 million compared to the first quarter of 2010
• EBITDA increased by 181% to $0.9 million, or 7% of revenues
• Net loss of $0.09 per diluted share driven by non-cash items
Peter B. LaMontagne, Paradigm President and CEO, stated, "We are excited about demonstrating improved financial performance and achieving an even stronger position in our core markets for cybersecurity and mission critical infrastructure. We believe that making our customers' missions and our employees our top priority is distinguishing us from our competition and enabling us to exhibit increasing growth and profitability."
Richard Sawchak, Chief Financial Officer, stated, "The increase in revenues experienced over the previous three quarters coupled with associated increases in gross profits and careful containment of our operating expenses has enabled us to significantly increase our profitability and improve the fundamentals of our balance sheet. We believe that these positive financial performance measures will enable us to continue on our trajectory and achieve our strategic business goals."
The Company's EBITDA was $0.9 million during the quarter ended March 31, 2011, as compared to approximately $0.3 million for the same period of 2010. The Company defines EBITDA as earnings before interest, taxes, changes in the fair value of put warrants, depreciation and amortization, stock compensation and restructuring expenses which include the basket allowed under our senior credit facility and other actual restructuring costs. EBITDA is not a measure of performance calculated in accordance with accounting principles generally accepted in the United States ("GAAP"), and should not be considered in isolation of, or as a substitute for, earnings as an indicator of operating performance or cash flows from operating activities as a measure of liquidity. The Company believes the presentation of EBITDA is relevant and useful by enhancing the readers' ability to understand the Company's operating performance. The Company's management utilizes EBITDA as a means to measure performance. The Company's measurements of EBITDA may not be comparable to similar titled measures reported by other companies. The table below reconciles EBITDA, a non-GAAP measure, to net loss for the three months ended March 31, 2011 and 2010.
Revenue for the first quarter of 2011 was $12.5 million, compared to $7.5 million for the first quarter of 2010. The increase in revenue was attributable to an increase in our federal service contract revenue of $1.0 million driven by the expansion of existing service contracts and new contract wins in the cybersecurity practice area and an increase in new contract wins in the mission critical infrastructure practice area of $4.4 million, which was partially offset by a reduction in revenue on a federal repair and maintenance contract of $0.4 million. Net loss for the first quarter of 2011 was $2.8 million, or $0.09 per share, versus a net loss of $0.5 million, or $0.01 per share, in the first quarter of 2010. The increased net loss is attributable to the change in fair value of put warrants of $2.8 million and higher interest expenses of $0.2 million, which were partially offset by better operating income of $0.7 million.
The Company had a $5.3 million working capital deficit and approximately $2.7 million outstanding on its line of credit with Silicon Valley Bank as of March 31, 2011.
For additional details, please refer to the Company's quarterly report on Form 10-Q as filed with the SEC.
About Paradigm Holdings, Inc.
Paradigm Holdings, Inc., (www.paradigmsolutions.com) is a provider of information technology (IT) and business solutions for U.S. Federal Government enterprises. Paradigm specializes in comprehensive information assurance solutions involving cyber security and forensics as well as continuity of operations and disaster recovery planning. The Company also provides systems engineering and IT infrastructure support solutions. Headquartered in Rockville, Maryland, the Company currently employs approximately 200 people.
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