Nine years ago, five Defense Department coworkers, aged 25 to 33, formed a computer and management services company.
Now, American Management Systems in Arlington, which grew from a firm founded in friendship to one of the largest companies in the Washington area with eight offices across the country, has gone public. The company, whose revenues have risen from $6.6 million to $31.6 million in the last five years, is growing fast in a fastgrowing field.
During Aprial, 150,000 shares of the company's common stock and 250,000 shares offered by stockholders, were sold for $18 per share. Lasr Friday they sold for $24, said company President Charles O. Rossotti, 38.
"Basically, we raised some additional capital . . . and additional liquidity for shareholders," Rossotti said.
According to the company's prospectus, te proceeds of the sale of the firm's shares, $2.3 million, will be used to reduce its bank debt, "all of which has been incurred to finance working capital." The company continued bank borrowings, the prospectus said.
The company has never paid any cash dividends on its common stock and does not intend to "in the forseeable future," the prospectus said. "Its policy is to retain earnings and to use funds for the operation and expansion of its business." the prospectus said.
The shares offered consist of 27 percent of the company's outstanding stock.
The company, founded in 1970, develops, installs and operates computer software systems used by business and government organizations in management and administration. The firm also offers management consulting services.
Although earnings for the company rose from $1.2 million [ $1 a share] in 1977 to $1.44 milliom [$1.28 a share] last year the company also reposted a 13 percent drop in earnings for the first three months this year compared to the average for the peevious nine months. During that same period, earnings were 33 percent lower than earnings for the fouth quarter last year, "principally because of a lower profit margin in the computer systems business segment and higher research and development costs . . ." The lower margin in computer systems, numerous financial management and comouter processing services, "was pricipally due to a loss that was recognized on one major contract," the company prospectus said.
Rossotti and the company's four other managing directors worked with computers while at the Defense Department, in the late 1960s, Rossitti said. 4t"We were looking around at where we could get the most leverage from the skills we had," Rossotti said.