News Release
Horne International Reports 2006 Financial Results and 2007 Outlook
Fairfax, VA April 3, 2007 Horne International, Inc. (OTCBB: HNIN.OB), today announced its financial results for the twelve months ending December 31, 2006. The company reported net revenue of $28.3 million and a net loss from continuing operations of $6.4 million, which includes $1.2 million of intangible amortization. 2006 was notable for the continued improvement in gross margin both in dollars and as a percentage of sales. The company expects continued improvement in this area.
Reflecting on 2006 and the first quarter of 2007, Darryl K. Horne, Chairman and Chief Executive Officer of Horne International, said, “2006 was a challenging year for Horne International. We responded to last year’s challenges by refocusing our company’s efforts on growth markets. We have shed unprofitable parts of the company and built a strong management team with an emphasis on business development. We are already seeing positive results from this strategy with growing opportunities at Customs and Border Protection and with the Department of Homeland Security’s Secure Border Initiative (SBInet).”
As part of its long-term business growth strategy, Horne International last year initiated an intense effort to expand its business development program to develop a sustainable business pipeline. This strategy is showing early, positive results. In addition to new work on contracts at the Department of Homeland Security, the business development team is pursuing opportunities at the Department of Defense, including the U.S. Army and the Army Corps of Engineers.
For nearly two decades, Horne International has maintained a reputation as a preferred provider of program engineering and technology solutions. Today, it is bringing leading-edge, cost-effective solutions to some of the federal government’s foremost agendas. Horne International is working with contractors and federal agencies to provide new tools to monitor whether large-scale contracts are meeting performance and cost objectives. The company is also working at several Army installations to demonstrate and evaluate a Web-based environmental management information system to reduce costs and strengthen environmental performance.
To maximize efficiency, reduce costs, , and better position itself for growth, the company has closed non-producing offices, reduced staffing, and implemented shared services for the accounting, contracts, and human resources functions. Estimated cost savings are in excess of $1.5 million per year.
Horne International estimates that first-quarter 2007 revenue will range from $3.0 to $3.2 million. Revenues and profits from its core services business are expected to trend steadily upward during the remaining three quarters of 2007. Procurement revenue is expected to add to this growth trend.
Commenting on Horne International’s financial results, Michael M. Megless, Horne International’s Chief Financial Officer, said, “In response to the business downturn in early 2006, we spent much of the year implementing a comprehensive plan to restructure Horne International to make it a leaner, more competitive company for the remainder of this decade and the next. Our twin goals in 2007 are to obtain significant new contract wins to complement our core business, and to build a solid business pipeline to solidify Horne International over the next decade. We are beginning to see encouraging results, and I am cautiously optimistic about the results for the remainder of 2007.”
On April 2, 2007, Horne International filed its 10-K annual financial statement with the Securities and Exchange Commission. It is available on the company’s Web site, www.horne.com.
About Horne International, Inc.
Horne International (OTCBB: HNIN) is a government services company focused on defense & homeland security, environment & energy, and transportation markets. The company’s business offerings include engineering program management for large-scale government programs; environmental science, safety & health; technology; acquisition services; business process engineering; manufacturing for aircraft and munitions support; and support services for shipping and U.S. waterways. Horne International currently operates under three subsidiaries: Horne Engineering Services, LLC; Spectrum Sciences & Software, Inc.; and Coast Engine and Equipment Company. More information can be found at www.horne.com.
Forward-Looking Statements
This news release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements, which are other than statements of historical facts. These statements are subject to uncertainties and risks including, but not limited to, risks set forth in documents filed by the company from time to time with the Securities and Exchange Commission. All such forward-looking statements, whether written or oral, and whether made by, or on behalf of, the Company, are expressly qualified by these cautionary statements and any other cautionary statements which may accompany the forward-looking statements. In addition, the Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.