- The Washington Times - Monday, June 30, 2003

Shares of American Management Systems Inc. have jumped 20 percent since January, after the Fairfax company captured $100 million in new and extended contracts and settled a yearlong lawsuit.

First-quarter revenue was $227 million, down from $251 million a year earlier. AMS’ net profit for the first quarter was $6.3 million, down from $10.7 million last year, according to AMS reports.

AMS is a $1-billion-a-year company with 60 offices worldwide, and specializes in global business and information technology. It’s customers include Bank of America, JP Morgan Chase and federal agencies such as the Treasury Department.

Although the company has made less this year than last year, AMS attributes its decline in revenue from last year to its sale of its subsidiary, General Utilities, a low-profit company.

“We aren’t looking to keep companies that don’t make at least $50 million,” said AMS Chief Financial Officer John Britain in a company report.

In December, the company sold General Utilities to Wipro, an India-based power company. The sale resulted in a decline of $4.8 million in first-quarter revenue, compared with fourth-quarter revenue.

The company would not disclose specifics of the new contracts other than they are with U.S. intelligence and security agencies, and are expected to generate $100 million in revenue during the next five years.

Analysts at Legg Mason Wood Walker, Inc., which owns 20,205 shares of AMS stock, noted that the settlement of a yearlong lawsuit should resolve uncertainty about the future of the company. But the analysts did not predict a near-term surge in profits.

The suit in question involved the Federal Retirement Thrift Investment, a company that oversees pension funds. The original contract stipulated that AMS would set up a record-keeping system. Instead, the two companies “ran into a dispute,” Mr. Britain said. “But any litigation issues we’ve had in the past are gone.”

For 2002, the company reduced expenses by 18 percent and generated a net income of $28.3 million, or 66 cents per share, an 87 percent increase over 2001.

Mr. Britain attributes this quarter’s success to the restructuring and refocusing of business targets.

In December the company hired a new chief executive and chairman, Alfred T. Mockett. When he became president, Mr. Mockett said in a statement, “The company is positioned to do well in the federal, local and state governments, including security and defense issues.”

LOAD COMMENTS ()

 

Click to Read More

Click to Hide