Wednesday, November 28, 2007


DELTEK ANNOUNCES RELEASE DATE FOR THIRD-QUARTER 2007 RESULTS: "...announced today that it will release its third-quarter 2007 financial results on Thursday, November 29, 2007. The Company will host a conference Call at 5:00 p.m. ET to discuss the third-quarter results.

The dial-in number for the conference call is 1-877-381-6419 or 1-706-643-9496 (no password required). Interested parties may also go to the Investor Relations section of the Company's Web site ( to listen to the earnings call. Those unable to participate in the live call may hear a rebroadcast by dialing 1-800-642-1687 or 1-706-645-9291 (pass code: 23959906). The rebroadcast will be available through December 6, 2007. In addition, a recording of the call will be available on Deltek's Web site."

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Free Webinar: Web Based Project Management Solutions

Free Webinar: Web Based Project Management Solutions: "kpi-insight consulting, a leading provider of Professional Services Automation (PSA) software solutions, is hosting a free webinar on the web based project management solution Deltek Vision. The 1-hour interactive webinar will demonstrate how to achieve more efficient time and expense collection, billing and project visibility using Deltek Vision.

Lunch and Learn Webinar
Date: Wednesday, 28-11-2007
Time: 12.30 – 13.30"

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Monday, November 26, 2007

Verizon Business Helps Deltek Improve Its Customer Support While Reducing Costs

Verizon Business Helps Deltek Improve Its Customer Support While Reducing Costs: "Deltek, a leading provider of enterprise applications software for project-focused organizations, is employing a wide range of Verizon Business services to support Deltek's rapid growth and portfolio expansion. The multiyear, multimillion-dollar agreement calls for Verizon Business to provide Managed Private IP, Managed IP PBX, Web Center, voice services, Audio, Video and Net Conferencing, and customer premises equipment.

'The primary goal of our relationship with Verizon Business is to build a communications platform that will enable our fast-growing company to meet the needs of our internal and external customers, both today and in the future,' said Lee Evans, Deltek vice president of IT.
Deltek is employing Private IP, Verizon Business' fastest-growing service, and IP PBX to streamline voice and data and to link more than 1,200 employees across 14 business locations in the United States, Europe, Australia and the Philippines.

Through its use of Verizon Web Center -- a network-based, contact center solution that provides multimedia contact options, customer prioritization and intelligent routing tools -- Deltek is greatly improving the support experience for customers contacting the company."

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ZachStocks » Blog Archive » Deltek Inc. (PROJ)

A PROJ stock commentary focusing on the broader economic market and the level of variable interest debt carried by Deltek. With the large number of government contractors as customers, I would argue that there is less exposure to the broader economic state given the growth in government spending and the unlikely scenario of large magnitude reduction in aggregate government spending in the short-medium term.

ZachStocks » Blog Archive » Deltek Inc. (PROJ): "Many stocks posted impressive gains including Deltek Inc (PROJ) which has only been public a few weeks. Pricing at $18.00 on November first, the market was quick to knock the stock down sending it nearly 15% lower in the first 3 weeks of trading. Friday, the stock caught a bid rising $1.60 to finally close at the IPO price but the volume was light at only 35,600 shares. A light volume rally like this to an area that is likely to prove resistance may in fact offer a great short entry if one can secure a borrow on the shares.

There is little fundamental information out on the company at this time, but reading through the prospectus was an educational experience. The firm focuses on offering project management software and consulting to companies who… (you guessed it)… manage projects. The customer list is actually quite impressive with 90 or the 100 leading federal information technology contractors and 76% of the top 500 architectural and engineering firms using services provided by Deltek. The company believes that its specialized product offering allows it to compete due to the level of detail necessary for many of its clients projects. With customers contracting with federal agencies for specific projects, tracking expense items, timetables and quality of work is very important.

While it was easy to become impressed..."

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with the level of detail available in the software Deltek produces, I was struck by the significant amount of debt the company is carrying, especially considering how unpredictable the revenue stream is, and how dependent on the economic cycle the business model is. Furthermore, with the majority of the debt revolving on a variable interest rate, the firm seems very much at risk and the factors surrounding that risk are completely out of management’s control. As a point of reference, net income was reduced by nearly 50% in the first 6 months of 2007 due to interest expense. It seems that our economy is at an interesting crossroad where weakening economic conditions may cause somewhat lower interest rates (but Deltek’s revenue would likely drop significantly), or an stabilizing economy would be met with much higher rates as the Fed attempts to rescue the purchasing power of the dollar and ward off inflation (which would mean significantly higher interest expense for Deltek).

While the company has had strong growth the last 2 years, it has not significantly outpaced many other growth names that have been brought to market. Yet the stock is priced at a hefty multiple when looking at the last 4 quarters of income. While the market is obviously willing to pay higher multiples for strong growth stories, there are also discounts that should be applied when higher levels of risk or uncertainty are involved. The debt adds to the company’s risk especially when one considers that the stipulations on the credit line do not allow the company to enter any other debt agreements. This limits the firms access to additional capital if needed. Furthermore, the uncertainty surrounding the economic state in the US (95% of the company’s customers are based in the United States) adds to uncertainty and should be reflected in a lower multiple.

The conclusion is that an unstable revenue base and an economic environment create risk for higher multiple growth names. While my fund has a very small position taken on the IPO, I have reduced my exposure to this name as much as possible and will consider taking a short position in the coming weeks as the stock has rallied to offer an attractive entry point near the IPO price. The float is very thin and price fluctuations are obviously wide so please use caution if shorting this name. Still over the next several months, I see the risks in this name far outweighing the possible reward.

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Wednesday, November 21, 2007

Deltek Receives 2007 ACE Award for Achievement in Customer Excellence

Deltek Receives 2007 ACE Award for Achievement in Customer Excellence: "Deltek, Inc. (NASDAQ: PROJ), the leading provider of enterprise applications software for project-focused organizations, today announced that it has received the 2007 Achievement in Customer Excellence (ACE)(TM) Award for 'Customer Support Satisfaction.' The program's sponsor, CustomerSat, recognized 16 organizations this year. 'Receiving this ACE Award demonstrates the dedication that Deltek has to the application of customer feedback to our support processes and the outstanding performance of our support staff,' said David Hare, Executive Vice President of Global Support. 'Deltek has in place robust global support strategies and customer support operations that allow more than 12,000 customers worldwide to have the optimal experience with our enterprise applications software.' John Chisholm, CustomerSat Chairman and CEO, added: 'Customer satisfaction is much more than a key performance metric. It is the most enduring and consistent predictor of customer loyalty, long-term growth, and corporate value. Moreover, it is the measure that customers themselves care about most. The CustomerSat ACE Award recognizes organizations that have both committed to and achieved the highest levels of customer satisfaction.'"

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Deltek's Second Bite at the IPO Cherry (Part I) » The TEC Blog

The Technology Evaluation Centers blog has a good article summarizing Deltek's business strategy and product history.

Deltek's Second Bite at the IPO Cherry (Part I) » The TEC Blog: "it is very likely that many passages from the Deltek’s 1997 S-1 filing were leveraged 10 years later too (after all, most products are still the same and serve the same customers). In fact, it is quite likely that the justifications for the IPO back in 1997 sound quite similar to those of Parker’s today (e.g., expansion, improved brand recognition, visibility, and whatnot). Deltek had indeed made a number of acquisitions previously as a public company and had reached the US$ 100 million mark by 2002. The de-listing at the end of 2002 was justified by the fact that being public was just too much of a hassle and unneeded expense for the C-level executives (due to the just introduced Sarbanes-Oxley Act [SOX]-compliance then, etc.) without much real benefit. This was particularly true in terms of the (lack of) freedom to make decisions (i.e., the market nervousness often stifles the CEO to make bold and risky moves). Thus, why should anyone believe that this time the IPO will work much better than before, especially given the timing of poor stock performance across the board? Is there anything fundamentally different at Deltek now compared to 10 or five years ago?"

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Saturday, November 03, 2007

Deltek Meets the Market

Deltek Meets the Market: By Tom Taulli November 2, 2007:

"It was an awful time for an IPO, but Deltek (Nasdaq: PROJ) managed an admirable debut yesterday. The stock price fell only $0.05, to $17.95 on its first day of trading.

Then again, Deltek has developed a strong suite of software for project planning, which helps with the design of airports, stadiums, and even the space shuttle. Its capabilities include regulatory compliance, profitability analysis, business development, and scheduling.

There are competitive offerings...

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There are competitive offerings from companies such as Oracle (Nasdaq: ORCL), SAP (NYSE: SAP), and Lawson (Nasdaq: LWSN), however, these solutions require significant customization, which can be quite expensive.

Deltek, on the other hand, has specialized in its sector for more than 20 years and has racked up more than 12,000 customers, which include biggies like Boeing and Lockheed (NYSE: LMT). It's turned into a growth business, with revenues increasing 23% to $130.8 million for the first half of this year, and net income of $9.6 million. The operating margin is a hefty 19%.

In light of its growth rate and solid customer base, Deltek's valuation is reasonable at three times revenues. Other mid-tier enterprise software companies -- such as such as Wind River Systems (Nasdaq: WIND) and MicroStrategy (Nasdaq: MSTR) -- have similar multiples. In other words, there really is no bargain here, so there's no need for Foolish investors to jump on the stock."

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Deltek IPO news coverage

In chronological order:

IPOs planned
Deltek Inc., Herndon, Va.: 9 million shares, priced $17 to $19, managed by Credit Suisse. Proposed Nasdaq symbol PROJ. Business: Provider of enterprise applications software and services designed for project-focused organizations.

Deltek Prices Initial Public Offering
HERNDON, Va.--(BUSINESS WIRE)--Nov. 1, 2007--Deltek, Inc. (NASDAQ:PROJ), today announced the pricing of its initial public offering of 9,000,000 shares of its common stock at $18.00 per share. Of the shares offered, 3,009,475 were offered by Deltek and 5,990,525 were offered by selling shareholders. In addition, the underwriters have been granted a 30-day over-allotment option to purchase up to an additional 1,347,820 shares from the selling shareholders.

Deltek's common shares will begin trading November 1, 2007 on the NASDAQ Global Select Market under the trading symbol "PROJ". The offering is expected to close on November 6, 2007, subject to customary conditions.

Deltek IPO nets more than $50 million - Washington Business Journal:

Deltek Inc. raised $54 million in its IPO.

Shares were priced at $18 a piece, the midpoint of the forecasted range, and the Herndon software company began trading Thursday on the Nasdaq stock exchange (NASDAQ: PROJ).

Deltek said it would sell 9 million shares, but 6 million are offered by selling shareholders, including management and directors.

The company said it will not get any proceeds from the selling shareholders' stock but may get $3.8 million from options the shareholders plan to exercise, according to a filing with the Securities and Exchange Commission.

Three private equity funds, called the New Mountain Funds, currently own 74 percent of the company's common stock. After the IPO, the funds will own 59 percent of Deltek's outstanding shares.


Deltek plans to use the proceeds from the IPO to repay a $235.9 million debt.


The company said its third-quarter financial report is not complete, but it expects to report revenue of about $70 million in the quarter ended Sept. 30, compared with $55 million in the year-ago quarter.

UPDATE 1-Deltek shares fall in market debut | News | New Issues & IPO's | Reuters

Shares of software maker Deltek Inc (PROJ.O: Quote, Profile, Research) fell in their market debut on Thursday, a day after an initial public offering that raised $162 million.

Shares were flat at $18 per share when the market opened, before falling as low as $17.01 a share. In midday trading, Deltek's shares were trading at $17.93.

IPO Roundup: Deltek
NEW YORK (AP) _ Shares of Deltek Inc. dipped in their first day of trading Thursday, a down day in the broader market, after the business software maker's initial public offering priced at the midpoint of the expected range.

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Deltek: No plans for hosted applications

UPDATE 1-Deltek shares fall in market debut | News | New Issues & IPO's | Reuters: [Chief Executive Kevin Parker] "...said the company did not have any plans to roll out 'on demand' versions of its software, which would allow customers to download its applications over the Internet, a backbone of businesses such as (CRM.N: Quote, Profile, Research), and Larry Ellison's NetSuite, which has filed to sell shares in an IPO.

'Resonance for on-demand has been pretty nonexistent' with Deltek customers, Parker said.

The company has made five acquisitions since Parker joined the company in mid-2005, and he said the firm intends to match that pace, boosting growth through acquisitions."

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