Booz Allen Hamilton ready to compete again as profits soar
Wednesday, February 9, 2011; 7:41 PM
Contracting giant Booz Allen Hamilton, which recently went public, expects to have a much larger market to pursue this summer when a non-compete agreement with its now-separate commercial unit Booz & Co. expires.
The company separated its government and commercial businesses in 2008, selling a majority stake in the government unit to District private-equity firm Carlyle Group.
McLean-based Booz Allen Hamilton said the non-compete agreement between the two companies is set to end July 31. The expiration of the deal comes as the government contractor is already off to a strong start as a public company.
In its first earnings report since completing its initial public offering, Booz Allen Hamilton recorded a profit of $23.6 million ($0.18 per share) in the three-month period that ended Dec. 31, up from $1.3 million ($0.01) in the same period a year earlier. Quarterly revenue grew 10.1 percent to $1.39 billion.
In a call with investors, the company attributed a large chunk of its income growth to the reversal of tax reserves.
Booz Allen also said its backlog of business increased 21.4 percent from a year earlier to $11 billion, $2.7 billion of which is funded, meaning the government has approved the expenditures.
Ralph W. Shrader, the company's chairman, president and chief executive, said in an interview that the company is mindful of future budget challenges but optimistic about how Booz Allen will fare.
The company's leadership have "all been through a lot of change, if you will, in the government over a long period of time. We're familiar with good times; we're familiar with bad times," Shrader said. "I think that gives us a lot of comfort" in handling uncertainty about future spending.
Samuel R. Strickland, Booz Allen's chief financial officer, chief administrative officer and executive vice president, said once the non-compete agreement expires, the company will first start pursuing the financial services market, particularly anticipating demand for its cybersecurity, fraud detection and risk management services.
Internationally, Strickland added, the company will target the Middle East and North Africa.
"We already have a solid business space there serving U.S. government clients and believe there is a strong market for our services in cyber . . . and in [information technology] and infrastructure project management," he said.