From saic at vision.moundalexis.com Mon Apr 2 02:27:14 2007 From: saic at vision.moundalexis.com (Daily SAIC News) Date: Sun, 1 Apr 2007 22:27:14 -0400 (EDT) Subject: [saic] Trade Group Does Who Knows What Message-ID: <20070401222401.K574-100000@vision.moundalexis.com> 1 April 2007 ; Washington Post Trade Group Does Who Knows What http://www.washingtonpost.com/wp-dyn/content/article/2007/04/01/AR2007040100686.html --- Secretive INSA Includes Intelligence Contractors, Academics, Spies By Alec Klein Washington Post Staff Writer Page D01 Enter a nondescript building in Ballston, take the escalator to the second floor, and make a sharp right. There, next to a MyEyeDr. shop, is Room 205, with little to hint that it's a gathering place for spies and their business associates. There is, though, a locked door: You have to be buzzed in to enter the Intelligence and National Security Alliance. The group, a nonprofit professional association for members of the intelligence community -- including private contractors, academics and members of U.S. spy agencies -- is largely unknown. That's quite a feat, because its chairman, retired Navy Vice Adm. John M. McConnell, the former head of the National Security Agency, left recently to be sworn in as director of national intelligence, the president's top intelligence adviser. (A new chairman for the professional association is expected to be selected soon.) Since the group's inception nearly 30 years ago as the Security Affairs Support Association, it has never been profiled in the media, its officers say. But in 2005, the group renamed itself and began to broaden its mission. It is no longer just a place where spies, not the most forthcoming of sorts, can network with other spies and business partners; the group is working to introduce a growing network of private contractors, large and small, to government intelligence agencies. Like much of the rest of the government, U.S. intelligence agencies are increasingly outsourcing what they need in the name of expediency: cutting-edge technology, goods and services, such as gee-whiz satellites, particularly to protect against another terrorist attack. "Intelligence is more important now to preserve the peace," said Timothy R. Sample, INSA's president. "It stems from the history that we have as a nation of tending once we get through a crisis of building down intelligence. The most dramatic example of that was the decision to look for the so-called peace dividend at the end of the Cold War, where we cut our intelligence resources extensively and then 9/11 happened. . . . We're still in the catch-up mode." Open-collared casual and affable, the 49-year-old Sample could pass for a successful businessman shooting the breeze. But his resume is all about national security: He's a product of the Air Force, where he was an intelligence analyst for about 4 1/2 years, and the CIA, where he spent about 12 years as an imagery analyst, a specialist in Soviet weapons and a negotiator of treaties with the Soviet Union. He was staff director of the House intelligence committee from 2000 to 2003. He left General Dynamics, where he was vice president for intelligence strategy and programs, in 2005 to join INSA. Sample's second-in-command at INSA gives off more of the air of a former spook. Even Frank F. Blanco's age is on a need-to-know basis, and he needs it not to be known. The group's executive vice president is distinguished, silver-haired and buttoned-down in a dark-blue-suit-NSA kind of way. He spent 30 years at that secretive agency, retiring in 2001 as the executive director, the NSA's third-highest-ranking official, to join the professional association. Blanco said INSA is "a forum for thoughtful discussion on issues critical to the nation," including "domestic intelligence, the security clearance process for contractor personnel and ways to highlight the innovation that is taking place across America in smaller companies." Reflecting the world both men come from, INSA keeps things close to the vest. For example, it will not reveal the names of most of its members. It claims about 1,500 members, including private contractors and members of every government intelligence agency. The people remaking INSA represent much of the vanguard of the intelligence-industrial complex: BAE Systems, Booz Allen Hamilton, Computer Sciences, General Dynamics, Hewlett-Packard, Lockheed Martin, ManTech International, Microsoft, Potomac Institute for Policy Studies and SAIC. INSA doesn't just make introductions for such members; it conducts research and analysis, and sponsors workshops, symposiums and councils on such matters as domestic intelligence, security, counterintelligence and innovative technologies. Since September, it has funded a Georgetown University professorship in the practice of intelligence, held by retired Air Force Lt. Gen. James R. Clapper Jr., the former director of the National Geospatial-Intelligence Agency who has been nominated as undersecretary of defense for intelligence. Appropriately enough, INSA's offices are near Rosslyn and Crystal City, two unofficial centers of private intelligence and national defense contractors. But it's hard for INSA to give much of a definitive shape to this undefined nexus between intelligence contractors and the government agencies they work for, a cast of characters located mostly in greater Washington, with the occasional cluster in such places as Silicon Valley. INSA isn't sure just how many intelligence contractors are out there, reckoning only that there are several thousand. The group says it's hard to make an estimate in part because many contractors identify themselves as defense firms, not intelligence shops. Even so, an accounting of publicly available government contracts shows that many of the top recipients include major contractors who do intelligence work, according to OMB Watch, a nonprofit group in Washington. For example, SAIC is ranked eighth in federal contracts awarded in fiscal 2006 with $3.48 billion -- and that's just the reported figure, which doesn't include classified work SAIC that may be doing. Or not. INSA does have a good idea of how much in annual revenue intelligence contractors generate in a given year but doesn't disclose it because so much of their work is classified. What kind of spy group would it be, after all, if it coughed up secrets? The association will disclose that the intelligence contracting business is growing, but the rate of growth is also shrouded in secrecy. The fall of communism "was hard on intelligence," Blanco said. But Sept. 11, 2001, changed that. With government agencies looking to quickly grab the latest intelligence technology, many have turned to private contractors -- outsourcing much of the spy business. "Then," Blanco said, "there was a big ramp-up." From saic at vision.moundalexis.com Tue Apr 3 23:30:36 2007 From: saic at vision.moundalexis.com (Daily SAIC News) Date: Tue, 3 Apr 2007 19:30:36 -0400 (EDT) Subject: [saic] Cubic Awarded Subcontract From SAIC to Support Fort Lewis Battle Command Training Center Message-ID: <20070403193027.X574-100000@vision.moundalexis.com> 3 April 2007 ; Market Wire Cubic Awarded Subcontract From SAIC to Support Fort Lewis Battle Command Training Center http://www.marketwire.com/mw/release_html_b1?release_id=234216 --- AN DIEGO, CA -- (MARKET WIRE) -- April 03, 2007 -- The U.S. Army Contracting Agency has awarded a contract to Science Applications International Corporation (NYSE: SAI), which has selected the defense segment of Cubic Corporation (AMEX: CUB) as a subcontractor, to help operate and maintain the I Corps and Fort Lewis Battle Command Training Center (BCTC). The cost-plus-fixed-fee subcontract has a base period of performance of nine months, along with four one-year options, with a total estimated value of $19.9 million if SAIC exercises all options. The cost-plus-fixed-fee prime contract specifies the same period of performance, with a total estimated value of $39.8 million if the customer exercises all options. Employees from Cubic's Training and Education Division, part of the company's Mission Support Business Unit, will deliver a full range of live, virtual and constructive simulation support, including planning, designing and building data bases, configuring facilities, and training soldiers to operate simulations. The BCTC offers digital training to soldiers of all ranks, with network connectivity to military outposts throughout the Middle East and Asia-Pacific region. Launched in 2005, the BCTC is a model of how to most effectively and efficiently train units and soldiers deploying to war. It is recognized by the U.S. Army Chief of Staff and the I Corps Commander as an outstanding model for future BCTCs. Cubic has supported the BCTC and its predecessor, the Battle Simulation Center, for 12 years, since 1995. The current award reflects the collaboration that Cubic and SAIC have enjoyed since teaming together under the U.S. Army Forces Command (FORSCOM) Operations, Planning, Training and Resource Support Services (OPTARSS) contract. The Cubic/SAIC team operates under the motto that a lesson learned in Iraq today is a training event tomorrow. The team supports soldiers with the latest tactics, techniques, and procedures captured through lessons learned. Cubic's Mission Support Business Unit is part of Cubic Defense Applications (CDA), one of Cubic Corporation's two major segments. CDA is a world leader in realistic combat training systems, mission support services and defense electronics. The corporation's other major segment, Cubic Transportation Systems, designs and manufactures automatic fare collection systems for public mass transit authorities. For more information about Cubic, see the company's website at www.cubic.com. From saic at vision.moundalexis.com Wed Apr 4 22:33:03 2007 From: saic at vision.moundalexis.com (Daily SAIC News) Date: Wed, 4 Apr 2007 18:33:03 -0400 (EDT) Subject: [saic] SAIC Signs Contract Modification Enabling Completion of the Security System for Greek Government Message-ID: <20070404183257.F574-100000@vision.moundalexis.com> 4 April 2007 ; PRNewswire SAIC Signs Contract Modification Enabling Completion of the Security System for Greek Government http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/04-04-2007/0004560027 --- SAN DIEGO and MCLEAN, Va., April 4 /PRNewswire-FirstCall/ -- SAIC (NYSE: SAI) announced it has executed a modification to its contract to deliver a state-of-the-art security system for the Greek government. The security system, known as Command, Control, Communications, Coordination and Integration (C4I), was begun in advance of the 2004 Summer Olympics and deployed during the Games. It is composed of sensors, communications, and command and control software. "We have reached a mutually beneficial agreement that allows SAIC and its teammates to deliver the final modifications to the C4I system linking the police, fire, ambulance and coast guard departments," said Ken Dahlberg, SAIC chairman of the Board and chief executive officer. "We're pleased with this resolution and look forward to continuing cooperation with the Greek Ministry of Public Order to complete the program." The contract modification clarifies the parties' obligations on this large contract, which had fallen into dispute. The original contract price was euro 259M. The modification, executed on March 29 resulted in a euro 4M immediate reduction, with the final price to be determined by processes identified in the modification. "Through very significant efforts for more than a year, we and our customers have produced a well-defined contract modification. We now have a clear path leading to contract completion," said Donald H. Foley, the SAIC executive vice president involved directly in the negotiation of the modification. Last week's modification to the contract provides for SAIC, with its subcontractors, to deliver enhanced command and control software, as well as upgraded coast guard boat video and port security subsystems over a schedule ending in calendar 2008 to meet the post-Olympic needs of the Greek State. In addition, SAIC, with its subcontractors, will provide maintenance of the subsystems for a period of up to five years following subsystem acceptance. In turn, within 70 days of the modification signing, the Greek government will accept the already completed 20 subsystems at a maximum reduction of euro 7M from the original contract price. Additionally, the Greek government will make a euro 26M payment in approximately 30 days to compensate SAIC for previously performed work. SAIC had initiated arbitration of the dispute before the International Chamber of Commerce while continuing to negotiate the modification. With the signature of the modification last week, the ICC arbitration proceeding between the parties was dismissed. From saic at vision.moundalexis.com Mon Apr 9 11:59:51 2007 From: saic at vision.moundalexis.com (Daily SAIC News) Date: Mon, 9 Apr 2007 07:59:51 -0400 (EDT) Subject: [saic] Employee Ownership Through ESOPS: A Bad Bargain Message-ID: <20070409075855.S574-100000@vision.moundalexis.com> 9 April 2007 ; The Becker-Posner Blog Employee Ownership Through ESOPS: A Bad Bargain http://www.becker-posner-blog.com/archives/2007/04/employee_owners.html --- By Becker Recently Sam Zell, a leading Chicago businessman, arranged to buy the Tribune company, owner of the Chicago Tribune, Los Angeles Times, other newspapers, and many TV and radio stations. Aside from the low price that he paid, which reflected the rapidly declining fortunes of the print media and conventional TV stations, the most noteworthy aspect of the deal is that he plans to take the company private through the creation of an ESOP, or employee stock ownership plan. The number of American ESOPs has grown substantially during the past 30 years, and they are currently estimated to hold more than trillion dollars in assets and cover over 10 million workers. Probably the main reason for their growth is that ESOPs had during this period sizeable tax advantages that include deductibility from federal taxes not only of the interest payments but also of much of the principal used to finance creation of an ESOP. The argument made for these special privileges is that employee ownership is a good thing for workers that should be encouraged, but is that true? In reality, the creation of an ESOP is often a management tool to fend off unfriendly takeover bids. This was certainly the case behind the pilot-led ESOP created by United Airlines, and may have played a role in the ESOP to be created at Tribune company. ESOPs that help keep poorly performing management in power would contradict the claim that this organizational form improves rather than contributes to poor performance. Employee ownership is said to induce employees to work harder because they then have a financial stake in the company where they work. If that were true, owners would not need a tax advantage to create a sizable employee ownership since they would subsidize stock ownership by employees in order to improve productivity. Employees in a small closely held company with few workers may feel part of a family and work harder when they own an interest in the company. But in large companies with thousands of employees, such as Tribune company and other ESOPs like Science Applications International, ownership is not likely to be a strong motivating factor because hard working employees would then mainly benefit the many other employees and stockholders. Between 1995 and 2000 United Airlines was an ESOP with employee representatives on its board. Soon after 2000 the company entered bankruptcy with employees and management not known either for their great effort. Careful studies that compare the productivity of employee-owned companies with those owned by general stockholders are limited in number and scope, and advocates of ESOPs often get quite emotional in reacting to criticisms of the concept. Still, there is little hard evidence indicating that ESOPs are better run than normal companies. Reputable studies of employee ownership in the United States and other countries generally indicate that both profits and productivity remained about the same after companies introduced employee ownership. This is not surprising since most ESOP-owned companies are not run by employees, and for the reasons I gave employee ownership does not usually better motivate workers of larger companies. However, the most powerful argument against the view that employee ownership improves efficiency is that new firms would tend to take this form if it improved efficiency, and many older firms would convert to employee ownership on their own, even without tax advantages from doing so. Yet despite the competitive nature of American industry, with substantial rates of entry and exit of companies, less than 10 percent of employees in the United States work in firms that have ESOPs despite the considerable tax advantages to this organizational form. This more than all the highly imperfect comparisons between the performance of ESOPs and other companies is persuasive evidence that ESOPs would not usually be more efficient. Indeed, given the tax advantages, there would be many more ESOPs if they were equally efficient. Various types of employee-ownership of enterprises are found in many other countries. Usually they are the result of legislation that either forces or encourages this form of ownership through regulations and tax advantages, sometimes when public enterprises are privatized. The evidence on their efficiency as determined by their spread and performance in these countries is similar to that for the United States: even with special privileges, employee ownership has not become the dominant organizational form of enterprises. This suggests again that employee-owned companies would tend to under perform more conventional ownership structures that have stockholders who either manage the enterprise, or are largely independent of both employees and managers. The biggest and most obvious drawback of employee ownership from the perspective of the financial wellbeing of employees is that they hold their assets in one basket, the company where they work. Even without ownership of equity the wealth of experienced employees is still poorly diversified since it is largely in the form of human capital whose value depends on the success of the company that employs them. When the company does well, earnings from their human capital tend to rise more quickly, while the opposite occurs when the company does poorly. Ownership of shares in the company exacerbates the economic dependence on the company's performance since now the value of the financial assets of employees also rises and falls with the company's fortunes. The same problem arises with the many corporate pension plans that mainly hold bonds and stock that they have issued. When the company does poorly, the value of pension assets, and thus of the retirement incomes of employees, go down along with earnings, employment and profits of the company. Forcing top management to hold much of their financial assets in the stock of the companies they run through stock option and stock ownership plans reduces their financial diversification too, but that may be beneficial to the company's performance since the decisions of CEOs and others at the top do greatly impact company performance. As I indicated earlier, that is not the case for typical employees of large corporations. The disadvantages of being poorly diversified is not simply hypothetical, but was sadly brought home to employees of companies like Enron and United that had substantial stock ownership by employees. After these companies went into bankruptcy, mainly due in Enron's case to mismanagement and corruption, many employees not only lost their jobs but employees lost much of their other wealth as well. From saic at vision.moundalexis.com Mon Apr 9 23:21:16 2007 From: saic at vision.moundalexis.com (Daily SAIC News) Date: Mon, 9 Apr 2007 19:21:16 -0400 (EDT) Subject: [saic] The SAIC Story: An $8 billion business success Message-ID: <20070409192048.L574-100000@vision.moundalexis.com> 9 April 2007 ; Washington Technology The SAIC Story: An $8 billion business success http://www.washingtontechnology.com/print/25_05/30393-1.html --- Company founder Beyster recounts SAIC's beginnings By J. Robert Beyster Special to Washington Technology Below is the first chapter of Robert Beyster's book on the philosophy and principles that created and built Science Applications International Corp., the company he founded in 1969. The book, "The SAIC Solution: How We Built an $8 Billion Employee-Owned Technology Company," was published March 30. --- Perhaps you've already been introduced to Science Applications International Corp. Maybe you're one of the tens of thousands of people who have worked for the company since I founded it in 1969, or perhaps you're working on one of the company's 9,000 current contracts. Or you might be one of SAIC's current or former customers in the public or private sector, a list that includes a veritable Who's Who of federal government leaders and agencies (including the Defense, Energy and Homeland Security departments; the Federal Aviation Administration; NASA and many more); a variety of state and local governments; commercial firms such as Southern California Edison, Entergy, Pfizer, and other Fortune 100 companies; and international customers such as British Petroleum, the Saudi Royal Naval Forces, and Scottish Power. Or you might even be one of SAIC's new shareholders. This company -- employee-owned since the very beginning -- recently completed an initial public offering in October 2006, raising $1.13 billion. But even if you're not familiar with SAIC and its remarkable story, you've surely felt its impact on your own life. If you've ever wondered how the nation's intelligence services track down and capture elusive terrorists by sifting through mountains of electronic data gathered by the nation's intelligence services, you may have encountered just one example of SAIC's vast array of leading-edge database technologies. If someone you know has faced the challenge of beating cancer or AIDS, SAIC has been active in the search for cures in its role as Operations and Technical Support Contractor for the National Cancer Institute's Frederick Cancer Research and Development Center. Or, if you surfed to a Web site, the pathways your computer followed from your desktop to its ultimate destination were paved by one of SAIC's former subsidiaries, Network Solutions Inc. Some say that SAIC is the best company that most people have never heard of. On one hand, much of SAIC's mainline work has been on federal contracts -- many of which involved classified programs that are intentionally kept out of the public eye. But on the other hand, SAIC is an incredibly eclectic company -- a decentralized organization that explicitly encourages and rewards entrepreneurial upstarts and initiatives in new project areas and with new customers -- and it has touched the everyday lives of many people in the United States and beyond, often in unexpected ways. SAIC's environment is one where creativity, innovation and entrepreneurship are more than management buzzwords -- they are the company's core principles. Over the past 38 years, SAIC has managed and performed on tens of thousands of contracts and it has a hard-earned reputation for succeeding on the "tough" jobs -- the very complex technical and important problems few companies are willing or able to tackle. Instead of focusing on only a handful of large customers working on a small number of large contracts, SAIC historically has taken a different tack, also engaging in thousands of relatively small-dollar jobs -- representing an incredibly diverse array of different projects and customers across many market sectors. Some observers might view this symbiotic mix of government and commercial business as a vice, because of the challenge of focusing on so many different kinds of businesses with so many different customers. However, SAIC's diversity of customers and contracts was a virtue and not a vice, and it was a way of life for our employees. More importantly, it was a key defense mechanism for protecting the company from market and environmental changes beyond our control. SAIC's success was the result of the convergence of innovative technology and innovative business practices. When I decided to start the company, my motivation wasn't financial. I wanted to create a company that would attract talented scientists and engineers who would tackle nationally important scientific issues. And they would stay at SAIC because of the challenging problems and a work environment that encouraged creative thinking. As this unique workplace evolved, a number of business principles and practices emerged. Five of these twelve principles and practices, explored in greater depth in subsequent chapters, are summarized here: People first. Over its many years, SAIC put people first -- the organization was expected to serve customers, employees and owners (who were employees), not the other way around. The basic formula worked exceedingly well: Hire very smart people, encourage their entrepreneurial spirit, let them focus on customers and reward them for their contributions. Freedom (with strings attached). SAIC was specifically designed to be an organization where managers and employees would be free to pursue work they were passionate about -- to start, operate, control and grow their own business units under the umbrella of the parent company, and unleash their own energy and creativity. Although they were encouraged to build and run their own business, employees were expected to follow company practices for bidding and contracting and adhere to the highest ethical standards in the process to protect their customers' and the company's best interests. >From science to solutions. SAIC was a company founded by scientists, and it used science and engineering to provide the most effective, efficient, up-to-date and highest quality solutions for specific client problems. The company put a premium on hiring the most talented scientists and engineers it could find, pointing them toward problems of national importance, and then getting out of the way. We believed in and valued small beginnings. As our experience showed, small things often beget large things. Although SAIC eventually performed on a wide variety of projects, science and engineering has always remained deep within the company's core. Employee ownership. If freedom of movement was the incentive that drew talented people into SAIC, then employee ownership was the glue that kept them there. SAIC built a culture firmly rooted in the simple idea that those who contribute to the company should own it, and ownership should be commensurate with a person's contribution and performance. Without employee ownership, SAIC would not exist today. Participation in decision making. At SAIC, employees were not only expected to contribute their ideas to improve the company and the services it provided, but also to make decisions that would put their ideas into action. While there was certainly a hierarchy of various managers and employees, the expectation was that decisions would be made at the lowest level possible, and problems resolved at the lowest appropriate level, thus cutting red tape and providing customers with more responsive service. In the chapters that follow, we consider how each of these principles and practices led to SAIC's extraordinary success, and how the lessons that we learned over the years can help you create your own business success stories if you are so inclined. Finally, in Chapter 14, I take a look at the future of employee ownership, American business competitiveness, science and technology, and SAIC. As you will see, there is much to be hopeful about, and much work to be done. --- Adapted and reprinted by permission of John Wiley & Sons from "The SAIC Solution: How We Built an $8 Billion Employee-Owned Technology Company" by J. Robert Beyster with Peter Economy. Copyright 2007 The Foundation for Enterprise Development. All rights reserved. From saic at vision.moundalexis.com Wed Apr 11 02:32:56 2007 From: saic at vision.moundalexis.com (Daily SAIC News) Date: Tue, 10 Apr 2007 22:32:56 -0400 (EDT) Subject: [saic] SAIC "hold" Message-ID: <20070410223249.K574-100000@vision.moundalexis.com> 10 April 2007 ; Newratings.com SAIC "hold" http://www.newratings.com/analyst_news/article_1508726.html --- NEW YORK -- In a research note published yesterday, analysts at Stifel Nicolaus & Company maintain their "hold" rating on SAIC Inc (ticker: SAI). From saic at vision.moundalexis.com Wed Apr 11 02:36:16 2007 From: saic at vision.moundalexis.com (Daily SAIC News) Date: Tue, 10 Apr 2007 22:36:16 -0400 (EDT) Subject: [saic] Foolish Forecast: Say What, SAIC? Message-ID: <20070410223445.H574-100000@vision.moundalexis.com> 10 April 2007 ; The Motley Fool Foolish Forecast: Say What, SAIC? http://www.fool.com/investing/value/2007/04/10/foolish-forecast-say-what-saic.aspx --- By Rich Smith It's Round 2 for government contracting powerhouse and NYSE-newcomer SAIC (NYSE: SAI) Wednesday afternoon, as it makes its second earnings announcement as a public company. Want to know what Wall Street expects to see? Read on. Want to know what really matters? Read on a bit more. What analysts say: * Buy, sell, or waffle? Fifteen analysts follow SAIC today, up one from last quarter. The stock now has one sell rating, in addition to its original 14 holds. * Revenues. On average, they're looking for 5% revenue growth to $2.07 billion. * Earnings. Profits are predicted to fall 55% to $0.17 per share. What management says: In last quarter's earnings report, CEO Ken Dahlberg termed SAIC's performance "solid ... especially in cash flow generation." He wasn't kidding, either. Despite modest sales growth of just 6% -- half of which was inorganic -- earnings from continuing operations leapt 30%, and cash flow from continuing operations 55%. Looking forward, Dahlberg saw "a healthy funding environment" generally and made a rather interesting observation that "focus on collaboration to pursue larger opportunities is starting to bear fruit." We'll want to keep an eye on developments in this regard and watch particularly to see whether SAIC's "collaboration" takes the form of lead contractor assignments, which generally bring the highest profit margins, or more subordinate roles. I have a sneaking suspicion (i.e., fear) that SAIC will more likely be collaborating with larger rivals on the scale of Accenture (NYSE: ACN), IBM (NYSE: IBM), or Lockheed Martin (NYSE: LMT). When it comes to smaller firms, SAIC tends to just buy out rather than partner up. What management does: So far, however, growing margins have not proven to be a problem for SAIC. Although the firm's taken a significant hit to its net margins -- thanks in large part to higher income taxes last year -- its rolling gross and operating margins have been rising steadily for nearly a full year. One Fool says: Investors worried by the declining net margins, single-digit revenue growth, and expected fall in absolute net earnings in Wednesday's news may take heart from the words of Fool analyst Alex Dumortier, who recommended SAIC to readers of Motley Fool Inside Value back in February: "The record is clear ... : SAIC has posted 37 years of uninterrupted revenue growth at a 32% annualized rate, without a single year of losses." Far from a flash-in-the-pan kind of IPO, Alex compares SAIC to similar well-established firms that had IPOs in the past decade: UPS (NYSE: UPS) and Goldman Sachs (NYSE: GS). Both have gone on to beat the market since their IPOs. Not coincidentally, both have something else in common with SAIC, in that they're employee-owned shops. While SAIC may be down temporarily, it's not yet time to count this one out. (If you'd like to read Alex's full write-up on SAIC, complete with his estimate of the company's true worth, you can. Just claim your free trial subscription to Inside Value and you'll get free access to his February 2007 recommendation.) Fool contributor Rich Smith does not own shares of any company named above. From saic at vision.moundalexis.com Wed Apr 11 20:31:17 2007 From: saic at vision.moundalexis.com (Daily SAIC News) Date: Wed, 11 Apr 2007 16:31:17 -0400 (EDT) Subject: [saic] Red Hat Signs Master Marketing Agreement with SAIC Message-ID: <20070411163111.T574-100000@vision.moundalexis.com> 11 April 2007 ; Business Wire Red Hat Signs Master Marketing Agreement with SAIC http://home.businesswire.com/portal/site/google/index.jsp?ndmViewId=news_view&newsId=20070411005340&newsLang=en --- Linux(tm) Leader and Systems Integrator Collaborate to Provide Open Source Solutions to Joint Customers RALEIGH, N.C.--(BUSINESS WIRE)--Red Hat, Inc. (NYSE: RHT), the world's leading provider of open source solutions, today announced it has signed a master marketing agreement with Science Applications International Corporation (NYSE: SAI) to deliver Red Hat solutions and the benefits of open source to defense-related, federal government and commercial markets. The agreement highlights Red Hat's open source solutions and SAIC's depth and breadth in providing design and implementation services across leading companies and governments worldwide. Under the terms of the agreement, the two organizations will use their respective expertise to collaborate in the development and delivery of reliable open source solutions to customers. This collaboration is expected to provide powerful, proven solutions for federal agencies looking to improve operational effectiveness and productivity. Red Hat is the recognized leader in enterprise solutions that take full advantage of the quality and performance provided by the open source model. With Red Hat, enterprise hardware and software vendors have a standard platform on which to certify their technology, assuring the necessary scalability and security of open source software and enabling mission-critical Linux deployments. Red Hat's open source solutions are designed to satisfy the government's demand for scalable, reliable, high-performance and secure commercial-off-the-shelf (COTS) products. By deploying Red Hat Enterprise Linux, the government will receive cost-effective products and solutions that can integrate with or replace existing systems with increased effectiveness. During the signing ceremony at SAIC's McLean, Va., facility, Steven D. Rizzi, SAIC vice president of operations for Advanced Information Technology, said, "This agreement will benefit not only Red Hat and SAIC, but also our customers. By pairing SAIC's expertise in systems integration, software development, database architecture and management of large, complex projects with Red Hat's global open source enterprise leadership, our customers can benefit from the move to flexible, cost-effective, robust and open IT infrastructures." "The product capabilities of Red Hat combined with the demonstrated success of SAIC in the federal IT marketplace can enable federal agencies to rapidly move toward an open systems model, incorporating open source solutions to meet the complex system requirements of the U.S. military, intelligence community, homeland security and other federal agencies," said Paul Smith, Red Hat's Vice President for Government Sales Operations. "This new collaboration offers Red Hat's functionality, scalability, security and performance combined with SAIC's federal government expertise to meet many of the U.S. government's most pressing challenges." From saic at vision.moundalexis.com Thu Apr 12 12:18:05 2007 From: saic at vision.moundalexis.com (Daily SAIC News) Date: Thu, 12 Apr 2007 08:18:05 -0400 (EDT) Subject: [saic] SAIC profit falls with contract losses, holds forecast Message-ID: <20070412081759.D574-100000@vision.moundalexis.com> 12 April 2007 ; Reuters SAIC profit falls with contract losses, holds forecast http://www.reuters.com/article/technology-media-telco-SP/idUSN1125245720070411 --- NEW YORK -- Government technology contractor SAIC Inc. (SAI.N) said on Wednesday quarterly profit fell sharply, partly due to stock option costs and losses on a contract for the Greek government. But the company, which was the Pentagon's No. 10 contractor last year, beat Wall Street's profit forecast and held its forecast for fiscal 2008, helping its shares higher in extended trading. SAIC reported fiscal fourth-quarter net profit of $84 million, or 20 cents per share, compared with $154 million, or 44 cents per share, in the year-ago quarter. Profit from continuing operations in the quarter ending Jan. 31 was 20 cents per share. On that basis, Wall Street expected 17 cents, on average, according to Reuters Estimates. Revenue rose 10 percent to $2.1 billion, in line with analysts' estimates. Founded in 1969 as Science Applications International Corp., the company has built itself up into one of the biggest suppliers of technology for the Pentagon, the Federal Bureau of Investigation, the U.S. Central Intelligence Agency and the U.S. Department of Homeland Security. The details of many of its contracts are secret. The San Diego-based company said quarterly profit was cut by $8 million for the cost of stock options for employees, and by $6 million for a contract with the Greek government to provide security software for the Athens Olympic Games in 2004, which was delayed. For fiscal 2008, it held its forecast for earnings from continuing operations at a range of 83 cents to 88 cents. Wall Street, on average, is expecting 85 cents. SAIC shares rose 3.5 percent to $17.70 in extended trading after closing up 1.3 percent at $17.10 on the New York Stock Exchange on Wednesday. The company raised $1.1 billion in an initial public offering in October, selling shares at $15 each. The shares rose as high as $21.10 that month, but have since edged down. From saic at vision.moundalexis.com Thu Apr 12 12:19:22 2007 From: saic at vision.moundalexis.com (Daily SAIC News) Date: Thu, 12 Apr 2007 08:19:22 -0400 (EDT) Subject: [saic] SAIC Q4 Profit Falls 35%, Revenue Gains 10%; Reaffirms FY08 Earnings Message-ID: <20070412081915.N574-100000@vision.moundalexis.com> 12 April 2007 ; Trading Markets SAIC Q4 Profit Falls 35%, Revenue Gains 10%; Reaffirms FY08 Earnings http://www.tradingmarkets.com/.site/news/BREAKING%20NEWS/530893/ --- SAIC, Inc., a provider of engineering and systems integration services, on Wednesday for the fourth quarter reported income from continuing operations that fell, despite improved revenues. A reduction in interest income coupled with an increase in tax expense adversely impacted the quarterly earnings. However, fourth quarter earnings and revenues exceeded the previous guidance. The company has reiterated its guidance for fiscal 2008. The San Diego, California-based company's income from continuing operations declined 35% to $85 million for the quarter from $132 million in the comparable period of fiscal 2006. Earnings on a per share basis from continuing operations plunged 46% to $0.20 from $0.37 last year. On average, fourteen analysts polled by First Call/Thomson Financial expected the company to earn $0.17 per share for the quarter. The company attributed the fall in earnings per share to a reduction in interest income to $20 million from $28 million, and an increase in tax expense to $53 million from a gain of $8 million last year. The diluted share count for the quarter was 420 million, up 19 percent from 353 million last year, as a result of the shares issued in the IPO. Net income, which includes income from discontinued operations, was $84 million or $0.20 for the quarter, down 55% from $154 million or $0.44 per share. Discontinued operations include the majority owned subsidiary ANX, which was sold in the third quarter of fiscal year 2007, and Telcordia, which was sold in the first quarter of fiscal year 2006. Revenues during the quarter grew 10% to $2.1 billion, from $2.0 billion last year. Ten analysts, on an average, expected the company to report revenues of $2.07 billion for the quarter. Internal or non-acquisition, growth represented about 7% points of the consolidated growth for the quarter. Operating income for the quarter rose 10% to $144 million from $131 million. However, operating income remained flat with 6.7% of revenue last year. Operating income for the fourth quarter include $8 million in compensation expenses related to stock options that were not included in the comparable period last year. Operating income reflects $6 million in contract losses associated with the company's firm fixed-price contract with the Greek government. For the full- year, income from continuing operations increased 8% to $369 million from $341 million. Earnings per share from continuing operations rose 6% to $1.01 from $0.95 last year, even as the diluted share count increased from 359 million to 364 million. The Street anticipated earnings of $0.98 per share for the year. Net income, which includes income from discontinued operations, was $391 million or $1.07 per share, compared to $927 million or $2.58 per share a year ago. Revenues for the year were $8.3 billion, up 7% from $7.8 billion last year. Analysts estimated revenues of $8.23 billion for the year. Looking ahead to fiscal 2008, the company has reaffirmed its guidance. SAIC expects earnings in the range of $0.83 to $0.88 per share on revenues of $8.70 to $9.00 billion. Analysts see earnings of $0.85 per share on revenues of $8.74 billion for the year. SAI gained $0.68 or 3.98% in the after hours trading at $17.78. The shares closed the regular trading at $17.10, up $0.22 or 1.30% on a volume of 2.66 million shares. From saic at vision.moundalexis.com Thu Apr 12 12:21:06 2007 From: saic at vision.moundalexis.com (Daily SAIC News) Date: Thu, 12 Apr 2007 08:21:06 -0400 (EDT) Subject: [saic] SAIC Announces Financial Results for Fourth Quarter and Fiscal Year 2007 Message-ID: <20070412082032.A574-100000@vision.moundalexis.com> 12 April 2007 ; PRNewswire SAIC Announces Financial Results for Fourth Quarter and Fiscal Year 2007 http://sev.prnewswire.com/aerospace-defense/20070411/NEW06311042007-1.html --- Revenues: $2.1 billion (up 10%) for fourth quarter, $8.3 billion (up 7%) for fiscal year SAN DIEGO and MCLEAN, Va., April 11 /PRNewswire-FirstCall/ -- SAIC, Inc. (NYSE: SAI) today announced financial results for the fourth quarter and fiscal year 2007, which ended January 31, 2007. Revenue, diluted earnings per share, and cash flow from operations exceeded the top end of the guidance ranges provided by the company on its previous earnings release. "The company completed its 38th year in strong fashion," said Ken Dahlberg, SAIC chairman and chief executive officer. "The growth initiatives and margin expansion plans we described during our recent initial public offering (IPO) are beginning to show results. Our 44,000 employees -- most of whom are shareholders -- are collaborating more effectively to offer the full breadth of services and solutions to our customers." Summary Operating Results Revenues for the quarter were $2.1 billion, up 10 percent from $2.0 billion in the fourth quarter of fiscal year 2006. Revenues for the year were $8.3 billion, up 7 percent from $7.8 billion in fiscal year 2006. Internal, or non-acquisition, growth represented approximately 7 percentage points of the consolidated growth for the quarter and 4 percentage points of the consolidated growth for the fiscal year. Operating income for the quarter was $144 million (6.7 percent of revenue), up 10 percent from $131 million (6.7 percent of revenue) in the fourth quarter of fiscal year 2006. Full-year operating income was $585 million (7.1 percent of revenue), up 19 percent from $490 million (6.3 percent of revenue) in fiscal year 2006. Operating income for the fourth quarter and full fiscal year 2007 include $8 million and $33 million, respectively, in compensation expenses related to stock options and the company's employee stock purchase program that were not included in the comparable periods for fiscal year 2006 in accordance with Statement of Financial Accounting Standard (SFAS) No. 123R. Operating income for the fourth quarter and full fiscal year 2006 reflect $6 million and $83 million, respectively, in contract losses associated with the company's firm fixed-price contract with the Greek government. Income from continuing operations for the quarter was $85 million, down 36 percent from $132 million in the fourth quarter of fiscal year 2006. Full- year income from continuing operations was $369 million, up 8 percent from $341 million in fiscal year 2006. Year-over-year comparisons of income from continuing operations are not as positive as those from operating income primarily because the fiscal year 2006 tax rates were significantly below the fiscal year 2007 rates. This was due to the reversal of certain tax contingency accruals during fiscal year 2006, which brought the effective tax rate well below a normal rate of about 40 percent. In addition, interest income was lower for the fourth quarter but higher for the year in fiscal year 2007 compared to fiscal year 2006. Diluted earnings per share from continuing operations for the quarter were $0.20, down 46 percent from $0.37 in the fourth quarter of fiscal year 2006, driven by a reduction in interest income, increase in tax expense, and higher share count compared to the prior year. The diluted share count for the quarter was 420 million, up 19 percent from 353 million in the fourth quarter of fiscal year 2006 as a result of the shares issued in the IPO. Diluted earnings per share from continuing operations for the year were $1.01, up 6 percent from $0.95 in fiscal year 2006, even as the diluted share count increased from 359 million to 364 million. Diluted earnings per share, which include discontinued operations, were $0.20 for the quarter, down 55 percent from $0.44 in the fourth quarter of fiscal year 2006. Diluted earnings per share for the year were $1.07, down 59 percent from $2.58 in fiscal year 2006. Discontinued operations include the majority owned subsidiary ANX, which was sold in the third quarter of fiscal year 2007, and Telcordia, which was sold in the first quarter of fiscal year 2006. Cash Generation and Capital Deployment Cash flow from operations for the quarter was $199 million, down 14 percent from $231 million in the fourth quarter of fiscal year 2006. For the year cash flow from operations was $704 million, up 20 percent from $587 million in fiscal year 2006. As of January 31, 2007, the company had $1.1 billion in cash and cash equivalents and $1.2 billion in long-term debt. During the quarter the company used a total of $67 million to repurchase 2.4 million shares under the 40-million share stock repurchase program and 1.3 million shares in privately negotiated transactions or to pay withholding taxes associated with stock option exercises and vesting events. Only the repurchases under the stock repurchase plan had not been planned when the company provided guidance on December 12, 2006. In addition, SAIC completed the following two acquisitions during the fourth quarter for a total cost of $252 million: * Applied Marine Technology, Inc. (AMTI), a leading provider of services, products and expertise particularly to the special warfare and intelligence communities, including the areas of homeland security and the global war on terrorism. The company brings more than 500 people specializing in training and exercises, systems engineering and integration, information systems and communications, and rapid prototyping of technical solutions. * AETC Incorporated, which develops acoustic, non-acoustic, radar, and electromagnetic remote sensing techniques and systems for underwater, underground, and above-ground applications. The company's 46 employees are highly skilled in physics, signal processing and systems engineering. Mark Sopp, SAIC chief financial officer commented, "In fiscal year 2007, our core business showed improved profitability and excellent cash flow. Looking forward, we are focused on internal growth initiatives, continued operating margin expansion, and deploying cash flow and other capital wisely to strengthen our company and increase its value." New Business Awards New business bookings totaled $2.7 billion in the fourth quarter and $9.2 billion for the fiscal year, representing a book-to-bill ratio of 1.3 and 1.1 for the fourth quarter and fiscal year, respectively. Bookings reflect net additions to backlog, derived by taking the change in total backlog plus revenue recognized for the period. No bookings value is assigned unless the company has received a signed contract for a priced statement of work. Notable highlights of competitive single-award delivery order contracts received during the quarter include: * NATO Theater Missile Defense Systems Engineering and Integration. Under a six-year, $95 million firm-fixed-price contract, SAIC will support the integration of the North Atlantic Treaty Organization (NATO) Active Layered Theater Ballistic Missile Defense capability. * Department of Homeland Security (DHS) Security Services. SAIC received a five-year, $39 million time-and-material contract from the Security and Technology Policy Branch to continue to provide security services to Customs and Border Protection. SAIC will perform work including certification and accreditation, security risk assessments, security test and evaluation, system architecture, communication security services, and technology policy and administration. * Cargo and Container Inspection Systems. SAIC received orders for 23 ruggedized mobile VACIS(R) inspection systems from the U.S. Army Research Lab and three VACIS(R) P7500 container inspection systems from the DHS. The Military Mobile VACIS(R) is an all-terrain, self- relocatable non-intrusive inspection system that can perform inspections in remote locations using both bi-directional moving scan and stationary scan modes. The VACIS(R) P7500 inspection system is a compact, high- energy X-ray-based portal container inspection system that images dense cargo in high-volume throughput operations. This contract supports the Secure Freight Initiative international pilot program and marks a transition to higher penetration and the need for greater systems and data integration. In addition to these defined delivery awards, SAIC also won several indefinite delivery/indefinite quantity (IDIQ) contracts that are not included in the bookings total. Notable IDIQ awards during the quarter include: * Enterprise Command and Control Advanced Technology Services (EC2ATS). SAIC will provide a full range of enterprise services and solutions to the Space and Naval Warfare (SPAWAR) Systems Center, Charleston (SSCC) under a single award contract with a potential seven-year term and a ceiling value of $423 million. * Program and Integration Support. As the sole recipient of a five-year, $250 million ceiling contract from the U.S. Army Research and Development Command Acquisition Center, SAIC will continue to provide program management, integration and site services for the Army's Chemical Materials Agency (CMA). SAIC will support program- and site- level management and integration requirements related to the CMA mission to store and dispose of the U.S. chemical weapons stockpile and non- stockpile material. * Army Information Technology Enterprise Solutions - 2 Services (ITES-2S). The Army Contract Agency, Information Technology, E-Commerce and Commercial Contracting Center awarded SAIC a prime contract to provide a comprehensive range of IT services to support the Army's enterprise infrastructure and information structure challenges worldwide. This multiple award contract has a potential seven-year period of performance and a total ceiling value for all 16 awardees of $20 billion. * Joint Test and Evaluation (JT&E). SAIC received one of four awards to provide joint military environment process planning support services to the Department of Defense (DoD) JT&E Program Office. The program maximum for all awardees is $930 million over 10 years. * Department of Veterans Affairs (DVA) Veterans Health Information Systems and Technology Architecture (VistA). SAIC received one of eight blanket purchase agreement awards representing an aggregate ceiling value of $1 billion over 10 years. Recognized as one of the world's most comprehensive health and clinical support systems, VistA includes over 100 clinical and administrative applications at 157 healthcare facilities and 887 ambulatory care and community-based outpatient clinics. The company's backlog of signed business orders at the end of fiscal year 2007 was over $15.1 billion, of which $4.8 billion was funded. The negotiated unfunded backlog of $10.3 billion represents the estimated amount to be earned in the future from firm orders for which funding has not been appropriated or otherwise authorized and unexercised priced contract options. Negotiated unfunded backlog does not include any estimate of future potential task orders that might be awarded under IDIQ or other Master Agreement contract vehicles. Forward Guidance The company is reaffirming its guidance for fiscal year 2008 given on December 12, 2006, which is shown in the table below. Measure FY Ending 1/31/2008 Revenue (billions) $8.70 - $9.00 Diluted EPS from continuing operations $0.83 - $0.88 Diluted share equivalents (millions) 430 Cash flow from operations (millions) $450 or greater About SAIC SAIC is a leading provider of scientific, engineering, systems integration and technical services and solutions to all branches of the U.S. military, agencies of the Department of Defense, the intelligence community, the U.S. Department of Homeland Security and other U.S. Government civil agencies, as well as to customers in selected commercial markets. With more than 44,000 employees in over 150 cities worldwide, SAIC engineers and scientists solve complex technical challenges requiring innovative solutions for customers' mission-critical functions. From saic at vision.moundalexis.com Thu Apr 12 12:21:57 2007 From: saic at vision.moundalexis.com (Daily SAIC News) Date: Thu, 12 Apr 2007 08:21:57 -0400 (EDT) Subject: [saic] SAIC "hold," estimates raised Message-ID: <20070412082152.V574-100000@vision.moundalexis.com> 12 April 2007 ; Newratings.com SAIC "hold," estimates raised http://www.newratings.com/analyst_news/article_1510297.html --- NEW YORK, April 12 (newratings.com) - Analysts at Stifel Nicolaus & Company maintain their "hold" rating on SAIC Inc (ticker: SAI), while raising their estimates for the company. In a research note published this morning, the analysts mention that the company has reported its F4Q07 results ahead of expectations. The federal IT budget environment, however, remains difficult, the analysts say. The EPS estimate for FY09 has been raised from $0.89 to $0.93 to reflect moderate margin expansion going forward. From saic at vision.moundalexis.com Thu Apr 12 12:23:17 2007 From: saic at vision.moundalexis.com (Daily SAIC News) Date: Thu, 12 Apr 2007 08:23:17 -0400 (EDT) Subject: [saic] SAIC To Provide Services Under GSA Networx Universal Program Message-ID: <20070412082311.D574-100000@vision.moundalexis.com> 12 April 2007 ; PRNewswire SAIC To Provide Services Under GSA Networx Universal Program http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/04-12-2007/0004564080 --- SAN DIEGO and McLEAN, Va., April 12 /PRNewswire-FirstCall/ -- Science Applications International Corporation (NYSE: SAI) announced today that it will have a role in the General Services Administration's Networx Universal program as a member of the team headed by Qwest Communications International Inc. Qwest is one of three companies to receive a prime contract under the Networx Universal program. The estimated value of the multiple-award prime contracts is $20 billion over the next 10 years, with a GSA-established ceiling of $48.1 billion. The Networx program is the largest communications services contract in the world, according to the GSA. SAIC will work with Qwest to provide comprehensive, best-value communications and networking services and technical solutions to all federal agencies. Networx is the follow-on program to FTS2001, and provides an expanded suite of services including Internet Protocol-based services, as well as enabling agency procurement of customized solutions. As a member of the Qwest Team, SAIC will provide managed security services, managed tiered security services, customer specific design and engineering services, managed hosting services, transition services, and other related professional services. "We are pleased to work with Qwest and are excited about the opportunity to provide SAIC's extensive capabilities to this important program," said Larry Cox, SAIC senior vice president and general manager of the Intelligence and Information Solutions Business Unit. "This allows our customers to embrace a services-oriented network approach to meet their communications and data needs. SAIC's professional services complement Qwest's world-class communications services and provide outstanding value to customers." From saic at vision.moundalexis.com Thu Apr 12 12:26:08 2007 From: saic at vision.moundalexis.com (Daily SAIC News) Date: Thu, 12 Apr 2007 08:26:08 -0400 (EDT) Subject: [saic] Revenue Bulks Up While Net Income Slims Down at SAIC Message-ID: <20070412082603.M574-100000@vision.moundalexis.com> 12 April 2007 ; San Diego Business Journal Revenue Bulks Up While Net Income Slims Down at SAIC http://www.sdbj.com/article.asp?aID=112309&link=perm --- By: Mike Allen Science Applications International Corp., a San Diego engineering and research firm, reported net income for its 2007 fiscal year ended Jan. 31 of $391 million, down from $927 million in net profit for the 2006 fiscal year. The company that went public in October said April 11 that its annual revenue grew 7 percent to $8.3 billion, making it the second largest local company, trailing only Sempra Energy. It is also one of the largest in terms of employees, with more than 44,000, including 4,300 locally. The company cited much higher income taxes for the past year, and lower interest income as the reasons for the reduced profits. For the fourth quarter, SAIC reported net income of $84 million on revenue of $2.14 billion, compared with net income of $154 million on revenue of $1.96 billion in the prior year's fourth quarter. For the full year, SAIC incurred $234 million in income taxes, compared with $137 million for the 2006 fiscal year. In terms of growing its business, SAIC was a big winner, reporting new business bookings in the fourth quarter of $2.7 billion, bringing the total for the year to $9.2 billion. Nearly all of SAIC's business is derived from contracts with federal government agencies, including the Department of Defense and the Department of Homeland Security. The firm is flush with cash, having a cash pile of $1.1 billion on its books as of the end of January, but it's also carrying long-term debt of $1.2 billion. The stock hasn't been faring well of late, but rose 22 cents April 11 to close at $17.10 on the New York Stock Exchange. The company's ticker symbol is SAI. From saic at vision.moundalexis.com Thu Apr 12 12:27:16 2007 From: saic at vision.moundalexis.com (Daily SAIC News) Date: Thu, 12 Apr 2007 08:27:16 -0400 (EDT) Subject: [saic] SAIC upbeat despite drop in earnings Message-ID: <20070412082609.Q574-100000@vision.moundalexis.com> 12 April 2007 ; San Diego Union-Tribune SAIC upbeat despite drop in earnings http://www.signonsandiego.com/news/business/20070412-9999-1b12saic.html --- By Bruce V. Bigelow UNION-TRIBUNE STAFF WRITER SAIC executives offered an optimistic view of government defense spending this year, even though the company's fourth-quarter net income fell more than 45 percent from last year. The San Diego defense contractor suggested yesterday that it could still thrive amid a congressional crackdown to tighten government spending, as it announced fourth-quarter financial results that exceeded analysts' expectations. The company, also known as Science Applications International Corp., reported net income of $84 million, or 20 cents per share, for the fourth quarter that ended Jan. 31. That was sharply lower than the profit of $154 million, or 44 cents per share, in the year-ago quarter. The company said the downdraft was driven by higher taxes, reductions in interest income and a 19 percent increase in outstanding shares -- to 420 million -- compared with the same period last year. Yet SAIC's earnings still beat analysts' projected average estimate of 17 cents a share. "We indeed had a strong fourth quarter on all major fronts: revenue, profits, cash flow and bookings, the four pillars in measuring our financial performance," Mark Sopp, SAIC's chief financial officer, told analysts during a conference call. Although SAIC recently modified its contract with the Greek government to provide a command-and-control security network, Sopp said SAIC was awaiting "more clarity" to assess the financial impact. "There was no accounting effect related to the Greek contract modification in our fiscal 2007 results," he added. "I was very disappointed that they didn't provide an update on what the modification to the Greek Olympics contract meant," said analyst Alex P. Hamilton of The Benchmark Co. In its statement issued after the market closed, SAIC also reported fourth-quarter revenue of $2.15 billion, a 10 percent increase from the $1.96 billion reported during the same quarter last year. Shares of SAIC rose 47 cents to $17.57 in after-hours trading on the New York Stock Exchange. Many Wall Street analysts have raised concerns over reduced funding for future federal information technology contracts. Of the 15 analysts who follow SAIC, 14 rate the company's stock as "hold" or "neutral." Morgan Stanley downgraded SAIC last week to "underweight" from "equal-weight." Ken Dahlberg, SAIC's chairman and chief executive, sought to address such concerns at the outset of yesterday's conference call. "Investors have expressed concerns about our markets since several competitors lowered their growth expectations," Dahlberg said. He cited several underlying factors, including the diversion of Pentagon spending from operations and maintenance to combat operations. "To some extent these factors affect us all, but none of them are new," Dahlberg said. "This is in my opinion still a large and growing market, and I believe, filled with opportunities for SAIC." But a key factor in Dahlberg's optimism is whether a supplemental spending request of $142 billion for the wars in Iraq and Afghanistan can be passed by June. He predicted that any impasse in supplemental spending would be temporary, but he also described the measure as a "wild card" that could affect the entire defense industry. The SAIC executives also argued that the company holds an advantage among defense contractors because of the way it usually works as a neutral integrator of technologies. "We wouldn't be as concerned with some of the single-award installation (contracts) as well as intelligence and homeland security work due to the priority of those missions," Sopp said. "I don't buy that argument that government funding is tightening, but it's not going to affect them," said Benchmark's Hamilton. "On the other hand, they are leaving themselves room by providing conservative guidance" for the upcoming year. SAIC reaffirmed its December estimates for a profit between 83 and 88 cents a share from continuing operations and revenue between $8.7 billion and $9 billion in its fiscal year ending in January 2008. For fiscal 2007, SAIC's profit tumbled almost 58 percent to $391 million, or $1.07 a share, from $927 million, or $2.58 a share, the previous year. Annual revenue grew 6.7 percent to $8.29 billion from $7.78 billion. The company also said it had spent $250 million in the fourth quarter to complete its acquisitions of Applied Marine Technology and AETC Inc., and $67 million to repurchase shares of SAIC stock. The company also said it ended the fiscal year with about $1.1 billion in cash on hand, which approximately offset SAIC's total debt of $1.2 billion. From saic at vision.moundalexis.com Thu Apr 12 20:23:05 2007 From: saic at vision.moundalexis.com (Daily SAIC News) Date: Thu, 12 Apr 2007 16:23:05 -0400 (EDT) Subject: [saic] BAE Systems Fires First Round from NLOS Mortar Firing Platform Message-ID: <20070412162258.R574-100000@vision.moundalexis.com> 12 April 2007 ; PRNewswire BAE Systems Fires First Round from NLOS Mortar Firing Platform http://home.businesswire.com/portal/site/google/index.jsp?ndmViewId=news_view&newsId=20070412005464&newsLang=en --- MINNEAPOLIS--(BUSINESS WIRE)--BAE Systems has successfully fired the first round from the Future Combat Systems (FCS) Non-Line-of-Sight (NLOS) Mortar Firing Platform. The FCS program is managed for the U.S. Army by Boeing and Science Applications International Corporation (SAIC) and consists of 14 systems and a network to tie all the sensors, manned and robotic platforms and weapons to soldiers. The NLOS Mortar Firing Platform features an automated, single-tube, breech-loaded 120-mm smoothbore turreted mortar mounted on a test stand. With a mission to provide short to midrange indirect fire support for maneuver forces, the NLOS Mortar is one of eight Manned Ground Vehicles being designed and built as part of FCS -- the Army's premier modernization program comprising a networked, fully integrated family of manned ground vehicles, unmanned ground and air vehicles, and sensors. "As proven in Iraq, responsive fire support and enhanced mortar crew protection are combat essentials," said Jim Unterseher, vice president of Army Programs at BAE Systems in Minneapolis. "The successful test firing is a testament to the ingenuity of the BAE Systems design team and its commitment to provide soldiers with greater protection, safety and performance on the battlefield through the development of the Army's first-ever breech-loaded mortar." The first shot was fired using a M931 Training round, at a special NLOS Mortar test range built by BAE Systems. The successful firing was the first in a series of tests being conducted to confirm the reliability of the NLOS Mortar's unique breech-loading system and its other advanced armament technologies that enable greater rates of fire and firing angles, as well as the ability for Soldiers to fire the weapon under armor -- a capability mortar crews don't have today. BAE Systems will continue NLOS Mortar Firing Platform tests, including those for Multiple Round Simultaneous Impact (MRSI) missions, during the coming weeks. Following a series of successful tests, the Firing Platform will be upgraded with an early prototype of the entire mission module equipment suite, which will have 80 percent commonality with the NLOS Cannon, and then delivered to the Army for additional testing. BAE Systems is committed to delivering the first NLOS Mortar prototypes to soldiers by 2011. More information about the NLOS Mortar, including high-resolution images and video for download, is available at www.baesystemspresskits.com/NLOS-Mortar. From saic at vision.moundalexis.com Fri Apr 13 02:44:17 2007 From: saic at vision.moundalexis.com (Daily SAIC News) Date: Thu, 12 Apr 2007 22:44:17 -0400 (EDT) Subject: [saic] SAIC "neutral," estimates revised Message-ID: <20070412224346.K574-100000@vision.moundalexis.com> 12 April 2007 ; Newratings.com SAIC "neutral," estimates revised http://www.newratings.com/analyst_news/article_1510877.html --- NEW YORK -- Analysts at UBS maintain their "neutral" rating on SAIC Inc (ticker: SAI), while revising their estimates for the company. The target price is set to $21. In a research note published this morning, the analysts mention that SAIC has posted its key metrics for F4Q ahead of expectations, which might prove to be a positive catalyst for the company's share price going ahead. The upward revision in the EPS estimate for 2008 reflects lower net interest expenses, and marginally higher margins, the analysts add. The EPS estimate for 2008 has been raised from $0.86 to $0.88. The EPS estimate for 2009 has been reduced from $0.95 to $0.94. From saic at vision.moundalexis.com Fri Apr 13 02:45:39 2007 From: saic at vision.moundalexis.com (Daily SAIC News) Date: Thu, 12 Apr 2007 22:45:39 -0400 (EDT) Subject: [saic] SAIC Awarded Navy Enterprise Resource Planning Task Order Message-ID: <20070412224533.W574-100000@vision.moundalexis.com> 12 April 2007 ; PRNewswire SAIC Awarded Navy Enterprise Resource Planning Task Order http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/04-12-2007/0004564672 --- SAN DIEGO and MCLEAN, Va., April 12 /PRNewswire-FirstCall/ -- Science Applications International Corporation (NYSE: SAI) announced today it won a task order from the U.S. Navy Space and Naval Warfare (SPAWAR) Systems Center, Charleston (SSCC), S.C. This task order is on the SeaPort-e contract, and will allow SAIC to provide support to the Navy Enterprise Resource Planning Program Office during the deployment of the Navy Enterprise Resource Planning Systems, Applications and Products common business solution. This task order has a one-year base term with two one-year option periods, and a total value of approximately $22 million if all options are exercised. Work will be performed at multiple sites throughout the U.S. including Charleston, S.C., San Diego, Calif. and Washington, D.C. "This task order with SPAWAR Systems Center in Charleston provides SAIC with further opportunities to deliver the performance-based results the Navy requires as they transform their business processes," said Peter Dube, SAIC senior vice president and general manager of the Federal Communications Solutions Business Unit. SAIC will support SSCC in areas such as project management, business processes, business information, communications management, organizational change management, financial management, quality assurance, testing, training, helpdesk management, technical environment, business realization and balanced scorecard/Lean Six Sigma processes. SAIC is a leading provider of scientific, engineering, systems integration and technical services and solutions to all branches of the U.S. military, agencies of the Department of Defense, the intelligence community, the U.S. Department of Homeland Security and other U.S. Government civil agencies, as well as to customers in selected commercial markets. With more than 44,000 employees in over 150 cities worldwide, SAIC engineers and scientists solve complex technical challenges requiring innovative solutions for customers' mission-critical functions. SAIC had annual revenues of $8.3 billion for its fiscal year ended January 31, 2007. From saic at vision.moundalexis.com Fri Apr 13 02:48:33 2007 From: saic at vision.moundalexis.com (Daily SAIC News) Date: Thu, 12 Apr 2007 22:48:33 -0400 (EDT) Subject: [saic] Investors Snap Up SAIC Message-ID: <20070412224657.I574-100000@vision.moundalexis.com> 12 April 2007 ; Business Week Investors Snap Up SAIC http://www.businessweek.com/investor/content/apr2007/pi20070412_286152.htm --- Shares climbed Thursday after the technology services outfit posted better than expected quarterly earnings SAIC, Inc. (SAI) posted a drop in profit after wrangling with a customer during the quarter ended Jan. 31 - but investors had expected worse. After the news the technology services firm's stock rose on Apr. 12. To be sure, the company's revenues for the Jan. quarter were $2.1 billion, up 10% compared to the same period last year. But earnings per share from continuing operations for the quarter were 20 cents, down 46% year over year, according to a statement Apr. 11. SAIC suffered another $6 million of losses related to wrangling over a contract with the Greek government. Disagreements with the Greek government regarded performance on a deal involving the 2004 Summer Olympics, according to Morningstar. The contract has cost SAIC $83 million during the entire year of 2006. SAIC's earnings results also include a reduction in interest income, increase in tax expense, and higher share count compared to the prior year. The technology services firm had priced $1.1 billion of shares in an initial public offering in October. SAIC's news still managed to beat the consensus forecast for 17 cents per share on $2.07 billion revenue. Investors bid up the stock 4.3% to $17.83 per share in afternoon trading on the New York Stock Exchange Apr. 12. SAIC, which was started in 1969 as a consulting firm by one-time Los Alamos National Lab physicist J. Robert Beyster, went public in 2006 (see BusinessWeek.com, 10/13/06, "SAIC Shares Surge in Strong IPO Market" [1]). "We think SAIC's continued focus on business development is paying off, and we expect the firm will continue to win work on crucial homeland defense and security contracts that are not necessarily tied to ongoing military engagements in the Middle East," Morningstar analyst Marisa E. Thompson said in a research note. To name a couple examples from the recent quarter, SAIC received a five-year, $39 million contract from the Security and Technology Policy Branch to continue to provide security services to U.S. Customs and Border Protection. SAIC also won a six-year, $95 million contract to support the integration of the North Atlantic Treaty Organization's (NATO) defense systems. --- [1] http://www.businessweek.com/investor/content/oct2006/pi20061013_101733.htm From saic at vision.moundalexis.com Mon Apr 16 21:44:52 2007 From: saic at vision.moundalexis.com (Daily SAIC News) Date: Mon, 16 Apr 2007 17:44:52 -0400 (EDT) Subject: [saic] SAIC Awarded South Carolina Research Authority Contract Message-ID: <20070416174447.T13243-100000@vision.moundalexis.com> 16 April 2007 ; PRNewswire SAIC Awarded South Carolina Research Authority Contract http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/04-16-2007/0004566589 --- SAN DIEGO and MCLEAN, Va., April 16 /PRNewswire-FirstCall/ -- Science Applications International Corporation (NYSE: SAI) announced today it won a contract from SCRA to provide a full range of IT engineering, technical and program support services to streamline the contracting relationship between SCRA and SAIC. The multiple award indefinite-delivery/indefinite-quantity contract has a one-year base term with two one-year options for an estimated value of $21 million if the customer exercises all options. Throughout the contract, SAIC will provide a spectrum of engineering, implementation and operational support. Work will be performed primarily in Charleston, S.C. "This contract is an important win for the company that allows SAIC to expand our relationship with SCRA," said Tom Baybrook, SAIC senior vice president and general manager of the Naval & Maritime Solutions business unit. "We are looking forward to a long and successful association with them." "We are pleased to extend our relationship with SAIC," said Bill Mahoney, SCRA CEO. "We have worked with them on a variety of endeavors and they have been an excellent teammate." SCRA is a global leader in applied research and commercialization services with offices in South Carolina and Washington, D.C. SCRA collaborates to advance technology with more than 100 corporations, government, and more than 30 research universities including Clemson University, the University of South Carolina and the Medical University of South Carolina. For more information please visit http://www.scra.org. SCRA (R) is a registered trademark(R) of SCRA. From saic at vision.moundalexis.com Tue Apr 17 11:30:46 2007 From: saic at vision.moundalexis.com (Daily SAIC News) Date: Tue, 17 Apr 2007 07:30:46 -0400 (EDT) Subject: [saic] RFID Readers: Alien Technology Teams With SAIC To Enhance Navy's RFID Capabilities Message-ID: <20070417073037.D13243-100000@vision.moundalexis.com> 17 April 2007 ; RFID Solutions Online RFID Readers: Alien Technology Teams With SAIC To Enhance Navy's RFID Capabilities http://www.rfidsolutionsonline.com/content/news/article.asp?docid={822A4E25-B6A4-41E0-B011-17AB91946467} --- Alien Technology Corporation recently announced that Alien Gen2 RFID readers and tags are being deployed as part of the U.S. Navy's ATAC (Advanced Traceability and Control) program to help manage the movement and tracking of Navy and U.S. Marine Corps retrograde materials from overseas back to Naval Aviation Depots and commercial vendor repair facilities in the United States. As proven in field trials involving materials returning from Iraq, the use of RFID technology and Alien RFID products enable the Navy to substantially reduce the costs and improve the performance of its retrograde materials management operations compared to traditional barcode technology. "The Navy's ATAC RFID initiative demonstrates the effectiveness of advanced RFID technology in global logistics environments, and underscores how easily RFID can be leveraged for virtually any military inbound or outbound shipment process," said Barry Holland, Chief Logistics Officer, Vice President for Operations of SAIC. "Alien RFID tags and readers have been a vital part of the ATAC RFID implementation from the start and we're please to continue to be collaborating with Alien in the production rollout." Each year, the Naval Inventory Control Point (NAVICP) ships more than 500,000 failed parts, worth approximately $25B, from locations overseas through ATAC facilities around the world, either to warehouses run by the Defense Logistics Agency (DLA) or to any one of more than 100 contractors enlisted to effect repairs. The ATAC RFID field trial implementation was conducted by the Navy and Department of Defense contractor Science Applications International Corporation (SAIC) over a seven month period to track broken aircraft parts from the Al Asad Airbase in Iraq to ATAC facilities in Norfolk, Virginia, as well shipments as between ATAC facilities and the Defense Logistics Agency's depot in Norfolk. Alien RFID tags were applied at the item and case level and Alien RFID readers were employed to interrogate the tags and confirm the shipment and receipt of tagged items. During the trial, automated receipt information collected via RFID scanning identified 355 shipments accounting for $12.6M where no POD information was captured in the system of record. Based on the results of this trial, the Navy's RFID Implementation Plan was recently updated to include the passive RFID-enabling of the ATAC automated information system. Starting in FY08, the Navy plans to implement RFID within ATAC and partner with DLA for tracking at the Defense Depots. Beyond FY08, the Navy will continue to expand RFID capabilities to other ATAC sites and connected repair facilities to complete a "closed loop" tracking capability for these critical assets. Alien products being used in the ATAC RFID implementation include Alien 96-bit RFID tags and Alien ALR-9800 Enterprise RFID Readers. About Alien Technology Alien Technology provides UHF Radio Frequency Identification (RFID) products and services to customers in retail, consumer goods, manufacturing, defense, transportation and logistics, pharmaceuticals and other industries. Organizations use Alien's RFID products and services to improve the effectiveness, efficiency and security of their supply chains, logistics and asset tracking operations. Alien's products include RFID tags, RFID readers and related training and professional services. Alien's patented Fluidic Self Assembly (FSA ) technology and related proprietary manufacturing processes are designed to enable the manufacture of high volume, low cost RFID tags. Alien was founded in l994 and employs about 235 people worldwide. The company's facilities include: its corporate headquarters in Morgan Hill, CA; an RFID tag manufacturing facility in Fargo, ND; the Alien RFID Solutions Center, in the Dayton, Ohio area, and sales offices in the U.S., Europe and Asia. Alien is a member of EPCglobal. More information about Alien is available at www.alientechnology.com. From saic at vision.moundalexis.com Tue Apr 17 20:53:50 2007 From: saic at vision.moundalexis.com (Daily SAIC News) Date: Tue, 17 Apr 2007 16:53:50 -0400 (EDT) Subject: [saic] McConnell Jones Lanier & Murphy LLP Selected as Protege Firm by SAIC Message-ID: <20070417165253.O13243-100000@vision.moundalexis.com> 17 April 2007 ; Business Wire McConnell Jones Lanier & Murphy LLP Selected as Protege Firm by SAIC http://home.businesswire.com/portal/site/google/index.jsp?ndmViewId=news_view&newsId=20070417005218&newsLang=en --- HOUSTON--(BUSINESS WIRE)--McConnell Jones Lanier & Murphy LLP (MJLM) has been selected to be a protege of Science Applications International Corporation [NYSE:SAI] under the Department of Defense's (DoD) Mentor Protege Program. This agreement is sponsored by the Department of the Army. MJLM is an 8(a) certified Small Disadvantaged Business headquartered in Houston, Texas, with a satellite location in Huntsville, Ala. MJLM's combination of leading edge engineering and technical capabilities coupled with business and accounting experience complements the offerings of SAIC. SAIC's Systems and Technology Solutions Business Unit, located in Huntsville, Ala., will administer this agreement. "We selected MJLM to participate in the Mentor Protege Program based on their broad range of capabilities in the military contract space and skill in working with the Department of Defense," said Joe Green, SAIC assistant vice president of business development and Mentor. Under this agreement, SAIC will provide MJLM with developmental assistance, infrastructure support and technology transfer, all intended to position MJLM for aggressive participation in federal and commercial contracting opportunities as a viable prime and subcontractor. MJLM is targeting opportunities at the following agencies: U.S. Army Redstone Arsenal, U.S. Army (AMCOM, IMMC, RDEC, Foreign Military Sales), U.S. Department of State, NASA, the Missile Defense Agency and other civilian and DoD agencies. "We are genuinely excited to become one of SAIC's trusted business partners and look forward to expanding our mutually beneficial relationship as we jointly pursue business opportunities for years to come," said Odysseus Lanier, partner in charge of MJLM's Federal Services Group. About McConnell Jones Lanier & Murphy LLP The founding partners formed MJLM in March of 1999 by merging McConnell & Jones LLP, a public accounting firm formed in 1987, and Empirical Management Services, Inc., a boutique consulting firm formed in 1992. Both firms began as two-person businesses, and MJLM has since grown to 126 employees, with $14.6 million in revenue for the calendar year ended 2006. MJLM established core competencies in business process improvement, accounting and financial support, program management and administrative support, and financial restructuring. In 2003, MJLM established MJLM Engineering & Technical Services in Huntsville, Alabama and expanded its traditional management consulting and analytical services offerings to include information technology, engineering and technical support services, production assembly and logistics. About SAIC SAIC is a leading provider of scientific, engineering, systems integration and technical services and solutions to all branches of the U.S. military, agencies of the Department of Defense, the intelligence community, the U.S. Department of Homeland Security and other U.S. Government civil agencies, as well as to customers in selected commercial markets. With more than 44,000 employees in over 150 cities worldwide, SAIC engineers and scientists solve complex technical challenges requiring innovative solutions for customers' mission-critical functions. SAIC had annual revenues of $7.8 billion for its fiscal year ended January 31, 2006. SAIC: FROM SCIENCE TO SOLUTIONS. From saic at vision.moundalexis.com Wed Apr 18 02:51:14 2007 From: saic at vision.moundalexis.com (Daily SAIC News) Date: Tue, 17 Apr 2007 22:51:14 -0400 (EDT) Subject: [saic] SAIC Stretches Database Limits Message-ID: <20070417225107.B13243-100000@vision.moundalexis.com> 17 April 2007 ; Byte and Switch SAIC Stretches Database Limits http://www.byteandswitch.com/document.asp?doc_id=122015&WT.svl=news1_2 --- BY: James Rogers Senior Editor SAN DIEGO -- Storage Networking World -- Killer asteroids, complex data searches for the intelligence community, and cancer research are laying the foundations for the next generation of massive databases, according to Cora Carmody, CIO of defense contractor SAIC. During her keynote today, Carmody outlined a number of SAIC projects that are stretching database technology to its limits, such as the Panoramic Survey Telescope and Rapid Response System (PAN-STARR) initiative. "Working with the University of Hawaii, we're building the largest database of astronomical data," she said. The project, which involves searching for "killer" asteroids and researching the origins of the solar system, began in 2002, and will eventually generate about 10 Tbytes of data a week. "It will, at the end of its life, create an astronomy database of 40 Pbytes," said Carmody. The long-term goal of PAN-STARR is to make the database available over the Internet so that it can be used for education and research. By way of context, the entire printed collections of the Library of Congress are said to equal 10 Tbytes of data, highlighting the sheer scale of this effort. Although Carmody did not reveal which other vendors are working on the project, she touched on some other SAIC initiatives that are pushing the database envelope. One of these is the TeraText project, which was first developed at the Royal Melbourne Institute of Technology (RMIT). "It's a non-relational text database that can scale to some very large sizes and handle both structured and unstructured data," said Carmody. "We have used it with intelligence kind of work, and we have also used it with the SEC." Another data intensive initiative is the National Cancer Institute's Cancer Genome Anatomy Project, which aims to decipher the molecular makeup of cancer cells. "This project is building an exceptionally large database of the attributes of cancer," said Carmody, adding that the database will be available to researchers via the Internet. The exec highlighted some possible uses of technologies such as RFID, Bluetooth, and ultra-high speed optical transmission, over the next few years. This could involve, for example, being checked into a hotel as soon as you pull into its parking lot, or the use of biometrics in healthcare. Thumb-scanning technologies are already used in some California gyms, explained Carmody, adding that this could be widely deployed as monitoring technology in the healthcare industry. Despite these predictions, it wasn't all future-gazing in San Diego today. Carmody used her keynote to highlight some of the major shortcomings in technology, particularly when it comes to laptops. "As long as I have been in IT, I have wondered when we will have a breakthrough in battery life -- some people can't make it across the country on one battery," she said. Also From the Podium Other users voiced their technology concerns today. "Storage is this behemoth that keeps growing," said Gary Berger, vice president of technology solutions at Bank of America Securities, during another of the day's keynotes. In an attempt to get around this problem, Berger has deployed virtualization technology from 3PAR on IBM blade hardware. (See 3Par Shines at Sunlight, 3PAR, Riverbed Deliver DR, and Jacent Deploys 3PAR.) "It helps us distribute workloads as efficiently as possible," he said, adding that he is looking at the likes of Mimosa for database recovery. Although he did not reveal how much he has saved through virtualization, the exec explained that he has slashed the amount of time spent on storage admin by 95 percent. Virtualization has helped the bank cut its hardware purchases by 50 percent, he said. From saic at vision.moundalexis.com Fri Apr 20 19:41:03 2007 From: saic at vision.moundalexis.com (Daily SAIC News) Date: Fri, 20 Apr 2007 15:41:03 -0400 (EDT) Subject: [saic] SAIC wins Air Force contract worth up to $394 million Message-ID: <20070420154057.P13243-100000@vision.moundalexis.com> 20 April 2007 ; MSN Money (Bizjournals) SAIC wins Air Force contract worth up to $394 million http://news.moneycentral.msn.com/provider/providerarticle.aspx?Feed=ACBJ&Date=20070419&ID=6771076 --- SAIC will provide engineering and technical services to a major command of the Air Force in a contract valued at up to $394 million. The contract has a one-year base term and four one-year options, according to engineering and technical services provider SAIC, which is based in San Diego and has thousands of workers in the Washington area. The government contractor will provide a range of support services to the Pacific Air Forces, one of nine major Air Force commands and one of two outside the continental United States. Operating from Hickam Air Force Base in Hawaii, Pacific Air Forces has an area of responsibility that extends from the U.S. West Coast to the east coast of Africa and from the Arctic to the Antarctic, covering more than 100 million square miles. SAIC (NYSE: SAI) and its team will provide engineering and technical services. These services will support systems of the Pacific Air Forces for command, control, computers, intelligence, war gaming and force protection activities. Work will be performed primarily in Hawaii, Alaska, Guam, Japan and Korea. From saic at vision.moundalexis.com Fri Apr 20 19:42:37 2007 From: saic at vision.moundalexis.com (Daily SAIC News) Date: Fri, 20 Apr 2007 15:42:37 -0400 (EDT) Subject: [saic] SAIC CTO Exercises Options Message-ID: <20070420154231.R13243-100000@vision.moundalexis.com> 20 April 2007 ; Forbes (AP) SAIC CTO Exercises Options http://www.forbes.com/feeds/ap/2007/04/19/ap3632457.html --- The chief technology officer of defense contractor SAIC Inc. exercised options for 60,418 shares of common stock, according to a Securities and Exchange Commission filing. In a Form 4 filed with the SEC Wednesday, Theoren P. Smith III reported he exercised the options Monday and Tuesday for $9.63 apiece and then sold 31,177 of them on the same days for $18.37 and $18.67 apiece. Smith also surrendered 9,417 shares back to the company for $18.37 and $18.67 apiece. Insiders can surrender shares as a way to cover taxes or the cost of exercising options. Insiders file Form 4s with the SEC to report transactions in their companies' shares. Open market purchases and sales must be reported within two business days of the transaction. SAIC (nyse: SAI - news - people ) is based in San Diego, Calif. From saic at vision.moundalexis.com Fri Apr 20 19:47:33 2007 From: saic at vision.moundalexis.com (Daily SAIC News) Date: Fri, 20 Apr 2007 15:47:33 -0400 (EDT) Subject: [saic] Say What, SAIC? Message-ID: <20070420154700.X13243-100000@vision.moundalexis.com> 20 April 2007 ; The Motley Fool Say What, SAIC? http://www.fool.com/investing/value/2007/04/20/say-what-saic.aspx --- By Rich Smith (TMFDitty) For the second time in its history, SAIC (NYSE: SAI) reported earnings as a public company last week. With the stock up 7% in the days since, it appears that investors liked what they saw: * Revenues rose 7% for the fourth quarter and 10% for the year. * Operating income grew 10% for the quarter and 19% for the year. * Net income, bitten hard by higher taxes this year, fell 44% for the quarter and 58% for the year. The rote recitation of the headline numbers out of the way, I want to use the rest of today's column to explore the workings of this government contractor in a bit more detail. It's been public for only a few months, after all. So even though SAIC has been in business for decades, it's only now starting to register on many investors' radars. It will probably take a while for us to get to know it really well. In furtherance of that goal, today we're going to talk a little bit about backlog. SAIC defines backlog as "signed business orders," or contractual obligations that its customers -- primarily the U.S. government -- have to pay for its goods and services. Backlog is an important metric because, theoretically at least, it shows that the firm's revenue streams several quarters, or years, down the road. The bigger the number, the more confidence an investor has that the company will remain in business and be able to generate profits. Boeing's (NYSE: BA) $250 billion in backlog, for example, represents more than four years' worth of future revenues already "in the bag." Backlog comes in two flavors. Funded contracts are those for which Congress has appropriated funds; unfunded contracts are those for which it hasn't. Logically, the funded part is the most important. The unfunded part, in contrast, represents probable future revenues -- but revenues that may never materialize if Congress doesn't authorize their payment. SAIC's $15.1 billion in backlog is composed of $4.8 billion funded and $10.3 billion not funded, meaning that only about 32% of its backlog is truly "in the bag." How does that compare with its rivals in this industry? I did some digging in the SEC filings, and here's what I found: * General Dynamics (NYSE: GD) is best in class, with 75% of its $43.7 billion in backlog funded. * Raytheon (NYSE: RTN) has funding for 54% of its $33.8 billion. * Northrop Grumman (NYSE: NOC) -- an even 50% out of $61 billion. * ManTech (Nasdaq: MANT) -- 22% of $2.87 billion. * DynCorp (NYSE: DCP) -- just 21% of $5.8 billion Conclusion: SAIC isn't the worst in this regard, but its revenue stream is far from the most secure among government contractors. Now that we've got a starting point, let's watch over future quarters to see whether it can move up the rankings. Want to learn more about SAIC? Read: * Foolish Forecast: Say What, SAIC? [1] * SAIC: A Company Built to Last [2] * A First for SAIC: Fool by Numbers [3] * No More Secrets at SAIC [4] And if you want even more details on the company, you're in luck. We just happen to have a full write-up on this Motley Fool Inside Value recommendation, yours for the perusing when you accept a free trial subscription to the newsletter service. Fool contributor Rich Smith does not own shares of any company named above. --- [1] http://www.fool.com/investing/value/2007/04/10/foolish-forecast-say-what-saic.aspx [2] http://www.fool.com/investing/value/2006/10/16/saic-a-company-built-to-last.aspx [3] http://www.fool.com/investing/general/2006/12/13/a-first-for-saic-fool-by-numbers.aspx [4] http://www.fool.com/investing/general/2006/12/14/no-more-secrets-at-saic.aspx From saic at vision.moundalexis.com Fri Apr 20 19:52:08 2007 From: saic at vision.moundalexis.com (Daily SAIC News) Date: Fri, 20 Apr 2007 15:52:08 -0400 (EDT) Subject: [saic] SAIC Contract Indicates Wolfowitz's Companion Riza Paid Message-ID: <20070420155200.G13243-100000@vision.moundalexis.com> 20 April 2007 ; OpEdNews.com SAIC Contract Indicates Wolfowitz's Companion Riza Paid http://www.opednews.com/articles/opedne_governme_070419_saic_contract_indica.htm --- Washington, D.C. -- Yesterday, GAP released the contract showing that Shaha Riza, companion of Paul Wolfowitz, performed consulting work for defense contractor SAIC in Iraq between March and May of 2003. Total funds paid to SAIC for services, according to the contract, equal $235,231.28. Riza's attorney has informed the press that she was not paid by SAIC. The details of the contract and Riza's public statements are at odds and raise serious questions that need clarification. Under the contract's Statement of Work, three Subject Matter Experts are named, with Riza appearing first. In the budget they are listed as line items: Executive Management Consultant I, II and III. Labor costs are shown as T&M (Time and Materials) in the detailed contract, while other expenses such as travel are shown as ODC (Other Direct Costs). The contract shows that all three consultants were paid labor costs. The report shows that labor costs for all three positions were funded. It is important to note that the contract clearly distinguishes between payments made for expenses and fees paid for labor. Labor costs for Consultant I equal $17,100.56; II was paid $97,144.32; and III earned $65,798.40. These appear as consultant fees, net of expenses (ODC). Paragraphs 6.3 and 6.4 explicitly state that the US Government (USG) will pay all travel expenses, supplies and equipment. Because Riza took four weeks of annual leave to work for SAIC, it is probable that she was Consultant I, paid about $17,000 for approximately 30 days work. If, as her attorney stated, Riza wasn't paid by SAIC, then disbursements were not made in compliance with the contract. If SAIC billed the Defense Department for her labor under the contract, but didn't pay her, SAIC should explain this discrepancy. The public needs the facts to understand what happened here. --- The Government Accountability Project is the nation's leading whistleblower protection organization. Through litigating whistleblower cases, publicizing concerns and developing legal reforms, GAP's mission is to protect the public interest by promoting government and corporate accountability. Founded in 1977, GAP is a non-profit, non-partisan advocacy organization with offices in Washington, D.C. and Seattle, WA. From saic at vision.moundalexis.com Mon Apr 23 11:29:06 2007 From: saic at vision.moundalexis.com (Daily SAIC News) Date: Mon, 23 Apr 2007 07:29:06 -0400 (EDT) Subject: [saic] Pentagon found no fault with SAIC deal at heart of World Bank flap Message-ID: <20070423072804.S13243-100000@vision.moundalexis.com> 23 April 2007 ; San Diego Union-Tribune Pentagon found no fault with SAIC deal at heart of World Bank flap http://www.signonsandiego.com/news/nation/20070421-9999-1n21saic.html --- By Bruce V. Bigelow The Pentagon's inspector general concluded that a woman at the heart of the controversy involving World Bank President Paul Wolfowitz did not receive personal gain under a U.S. Defense Department contract she got in 2003. Wolfowitz was the Pentagon's second-highest ranking official when he urged subordinates to award a consulting contract through San Diego defense contractor SAIC. The contract specified three consultants, including Shaha Riza, a World Bank employee with whom Wolfowitz has acknowledged a close personal relationship. The couple have been at the center of a controversy in recent weeks, following disclosures that Wolfowitz arranged to give Riza a raise and other benefits at the World Bank after he left the Pentagon. In a statement yesterday, SAIC said the company "was directed by the Office of the Secretary of Defense for Policy to enter into a subcontract with Shaha Riza as a subject matter expert, as part of the Iraq Governance Group. "SAIC had no role in the selection of the personnel who comprised the Iraq Governance Group under this contract. The term of the subcontract was from 25 April to 31 May 2003. At her request, Riza was paid expenses but no salary while in Iraq." In 2004, the Pentagon's inspector general was sharply critical of several contracts issued to SAIC in 2003 for reconstruction and humanitarian work in Iraq. In fact, media reports that linked then-Deputy Secretary of Defense Wolfowitz with Riza prompted a second review of the matter in 2005, according to a five-page report the Pentagon Inspector General released yesterday. But the directorate for investigations of senior officials found insufficient basis to warrant further investigation because: * Riza was uniquely qualified to provide the required services and was recommended by others. * Wolfowitz was forthright in acknowledging his close personal relationship with Riza and that he may have recommended her in 2003 for the Iraq "Democracy and Governance Group." * A recommendation in and of itself does not constitute misuse of office. * There was no personal gain because she was not paid by SAIC. * There was a sense of urgency at the time to fill the three positions on the 12-member "Democracy and Governance Group," which provided advice on Iraq's economic, political and other related issues to the Director of the Office of Reconstruction and Humanitarian Assistance. From saic at vision.moundalexis.com Tue Apr 24 02:37:51 2007 From: saic at vision.moundalexis.com (Daily SAIC News) Date: Mon, 23 Apr 2007 22:37:51 -0400 (EDT) Subject: [saic] SAIC Receives Eisenhower Award from the U.S. Small Business Administration Message-ID: <20070423223745.L13243-100000@vision.moundalexis.com> 23 April 2007 ; PR Inside SAIC Receives Eisenhower Award from the U.S. Small Business Administration http://www.pr-inside.com/saic-receives-eisenhower-award-from-the-r102130.htm --- SAN DIEGO and MCLEAN, Va., April 23 /PRNewswire-FirstCall/ -- Science Applications International Corporation announced today that it received the Dwight D. Eisenhower Award for Excellence from the Small Business Administration (SBA). SAIC received this award in the research and development category, recognizing its commitment to using small businesses as subcontractors and suppliers. During the federal government fiscal year 2006, SAIC subcontracted more than $1.2 billion to small businesses. This amount accounts for approximately 15 percent of SAIC's total revenue for the same period. The Eisenhower Award was presented to George Otchere, SAIC senior vice president and director of small business programs, during Small Business Week in Washington, D.C. "SAIC believes that working with small businesses makes good business sense," said Otchere. "By working together, we tap the strength of diversity. Our highly talented employees, in conjunction with the capable professional staff of our small business teammates, create innovative solutions that help solve complex challenges facing our customers and the nation." The SBA, created in 1953 during the Eisenhower administration, is dedicated to helping the growth of small businesses. The Eisenhower Award, created in 1991, is given to firms that qualify as large businesses and operate as federal prime contractors in the areas of research and development, manufacturing, service, construction, and utility. Nominees for the Eisenhower Award are selected from a large pool of contractors. To be considered for the award, companies must provide maximum, practicable opportunities for small businesses as required by the statute and regulations. Eisenhower Award winners are chosen from a select group. SAIC is a leading provider of scientific, engineering, systems integration and technical services and solutions to all branches of U.S. military, agencies of Department of Defense, the intelligence community, the U.S. Department of Homeland Security and other U.S. Government civil agencies, as well as to customers in selected commercial markets. With more than 44,000 employees in over 150 cities worldwide, SAIC engineers and scientists solve complex technical challenges requiring innovative solutions for customers' mission-critical functions. SAIC had annual revenues of 8.3 billion for its fiscal year ended in January 31, 2007.