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ExecutiveBiz: How did SI International end up last year in terms of revenue through the 3rd quarter?
Brad Antle:
We were pleased to report another quarter of strong performance for the third quarter which ended on September 30, 2006. Revenues grew by 18 percent to a record $120 million, when compared to third quarter of 2005. During the third quarter of 2006, we had bookings of $417 million. It bumped up our total backlog to $1.3 billion, with a healthy ratio of approximately 3 times revenue in backlog. We came out of the third quarter very strong; however, there were still some concerns about pressure that we were facing in terms of cost of war, war on terror, and the impact that’s had on other budgets in general. It’s caused some restraints on government spending. Normally we see some budget flush at the end of the government’s fiscal year which ends in September; but we didn’t see that this time. It appears as though Iraq and Afghanistan activities took whatever funding was left. It was a new experience for us going into the fourth quarter.
ExecutiveBiz: What are you hoping to accomplish this year?
Brad Antle:
As we look ahead at the issues that are at the top of the agenda for the Federal Government for 2007, we believe that SI International’s strategic focus and proven capabilities are squarely aligned with the government’s high priority initiatives – federal IT modernization, defense transformation, homeland defense, and mission-critical outsourcing. We focus on areas where the government continues to have mission-critical requirements. Our method of rapid execution, what we call “Rapid Response, Rapid Deployment,” has provided for us an outstanding track record and continues to serve us well. For areas of the government facing fiscal restraint, we expect to see new business process outsourcing opportunities as those agencies turn to contractors when they are faced with reducing program costs while coping with a shortage of federal employees. We’re going to continue to focus on IT modernization. The government knows it can’t do the job that it’s supposed to without critical improvements in information sharing. Technology is the foundation for information sharing, which makes our services critical to their needs. We will also continue to focus on defense transformation and homeland defense, which continues to be spending priorities of the federal government.
ExecutiveBiz: What are your criteria in making acquisitions?
Brad Antle:
Our overall objective is to grow the company by 25 percent annually, with 10 to 15 percent coming from organic growth and the other 10 to 15 percent coming from acquisitions. We look for good, solid companies with annual revenues between $25 and $100 million that also have great potential for growth. Suitable candidates must bring us complimentary customer sets where the opportunity for double digit growth exists. One thing that sets SI International apart is the rigorous way in which we approach acquisitions and integration. Our senior management team understands what it takes for an acquisition to create value for company, and ultimately the stockholder. We have a proven screening and detailed due diligence process in place. The target company must share our commitment to customer satisfaction and have a compatible culture that would allow for rapid integration. We see how they treat their workers, how they treat their customers, and how they work together. We want to sustain our collegial environment. If they have that kind of culture, then it’s an easier integration for us. Once acquired, the company, its operations and its people are fully integrated within 90 days.
ExecutiveBiz: What is your view of the new rule change by SBA that companies when selling need to re-certify their small business contracts within 30 days?
Brad Antle:
It’s going to have an impact on small business owners. The intent was to keep small business opportunities with small business companies. That’s a noble goal, but the result will be lower valuations when small business owners want to sell. Historically, buying companies with small business content has not been a problem for us. We just want to have a year or two to develop a strong relationship with the new customer. With the new rule change, you have to recertify within 30 days after the acquisition is completed. Although this will not require an immediate re-compete of the small business work, the risk is there and therefore the future revenue stream will be discounted. This rule change will have a negative effect for sellers, although I don’t believe this was the original intent.
ExecutiveBiz: What advice would you give to companies who want to work with SI International?
Brad Antle:
We’re very aggressive with our small business outreach. We now have small business partnerships established with the Air Force, State Department, and the Small Business Administration. We’ve received numerous recognitions for exceeding our small business goals. We work them extremely well; we pay in timely manner – that’s vital to entrepreneurial firms; and we give them the support they need. Their success affects our success.
ExecutiveBiz: Tell us about SI International’s work with IPv6
Brad Antle:
SI International has been supporting IPv6 longer than almost any other company out there and the Federal government space, we are known as thought leaders in this area. In the short term, there’s going to be a lot of transition planning. In the long term, expect the shift to IPv6 to drive a multi-year cycle of investments and enhancements to a broad range of Web applications. The future gains will come as applications start to roll out about three to five years down the road, taking advantage of the capabilities of IPv6.
ExecutiveBiz: How has your Navy service helped you be CEO?
Brad Antle:
Having served in the military on both active duty and the Reserves gives me an appreciation for a war-buying environment and the requirements of the war fighter. It gives me sensitivity for being recalled and deployed for a year at a time. It’s given me greater discipline in my life and I am much better at managing my time because of the military experience. I have a much greater appreciation for the DoD.
ExecutiveBiz: What is your favorite business book?
Brad Antle:
I just finished reading Good to Great. It’s an interesting book that highlights characteristics of companies that have been able to sustain performance many times greater than their peer group. The book contrasts good companies against the great companies within an industry. This objective research provides insights on ways to improve a company and put it on the path to greatness. I want to take SI International further than where it is today, and make that transition over time from good to great.
ExecutiveBiz: What’s something most people don’t know?
Brad Antle:
Most don’t know that I love to ride Harleys. Currently, I have two. I also like snowboarding. Most people think that at my age, snowboarding is risky, but managing risks is part of being a CEO. I stay off of the terrain parks.
For more information about
SI International, visit
www.si-intl.com.
Interview with Brad Antle conducted by JD Kathuria.
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