- The Washington Times - Tuesday, April 22, 2003

April has been a nice month for Veridian Corp.
The company which is based in Arlington and develops technologies and programs to serve U.S. intelligence agencies snagged two contracts, including a deal with the National Reconnaissance Office that is worth as much as $19.7 million.
Under the agreement with the NRO, which builds and operates the nation's intelligence satellites, Veridian will help the group with core operations. The contract calls for one base year with four option years and comes on the heels of a contract with the Air Force that could be worth more than $20 million.
Thanks mainly to a boost in government spending on defense and intelligence operations, revenues and net income for Veridian have shot up significantly in the past year.
After losing money in 1999, 2000 and 2001, the company recorded a profit in 2002 and has seen three straight quarters of increased revenue. Net income from the last three months of 2002 was $8.1 million (24 cents per share), up from a loss of $9.7 million ($1.60 per share) during the last three months of 2001.
Shares of Veridian fell 4 cents to close at $19.54 on the New York Stock Exchange yesterday. They have fallen about $2 this year. Analysts blamed the sluggishness of the stock market for the decline and said Veridian shares have outperformed most stocks. The company went public in June.
Nearly all defense-oriented companies benefited in the past two years from a buildup in defense, war in Iraq and efforts to combat terrorism. Veridian receives about 80 percent of its revenue from the federal government, with about 30 percent coming from intelligence agencies.
"They are in an area of relative high priority and what I like to call consistent funding," said Mark Jordan, an analyst with A.G. Edwards and Sons Inc. in St. Louis. "That is a constant and will continue."
Mr. Jordan does not own shares of Veridian.
Veridian has many competitors, including CACI International and Anteon Corp. But, analysts said Veridian does not often see stiff competition when going after contracts, because all companies in the sector offer specific products and expertise. Veridian offers dozens of services but specializes in developing sensors and secure networks.
Analysts credited systems from smaller defense contractors such as Veridian for the success of coalition forces during the war in Iraq. Communications and sensor systems, many of them made by smaller companies, allowed troops to adjust their movements and remain flexible when moving into Baghdad, analysts said.
"If anything, the value of their capability has really been highlighted," Mr. Jordan said.
Veridian is expected to receive a boost in revenue from the creation of the Homeland Security Department, which combines 22 government agencies.
Randy Schrago, an analyst with First Albany Corp. in San Francisco, said Veridian has expanded its business with the U.S. Coast Guard; the Bureau of Citizenship and Immigration Services, which took over much of the territory of the Immigration and Naturalization Service; and the Transportation Security Administration, which will be spending the bulk of the new department's money.
The company did not return phone calls requesting comment.
Veridian will announce its financial results of the first quarter of 2003 May 1.

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