Science Applications International Corporation (Nasdaq: SAIC), a
premier Fortune 500® technology integrator driving our nation's
digital transformation across the defense, space, civilian, and
intelligence markets, today announced results for the second
quarter ended August 2, 2024.
"Our second quarter results were solid, reflecting strong
program performance and exceptional cash flow with a continued
focus on returning capital to shareholders," said SAIC CEO Toni
Townes-Whitley. “We are seeing encouraging trends as we execute our
growth strategy. Our expanded pipeline of qualified opportunities
is now converting to a higher number and quality of submissions and
increasing book-to-bill, trends which are expected to accelerate
and drive growth into Fiscal Year 2026. This momentum fuels the
confidence we have in our ability to meet our Fiscal Year 2027
targets of 5% organic revenue growth, mid 9% adjusted EBITDA
margins, and approximately $12 of free cash flow per share."
Second Quarter of Fiscal Year 2025: Summary Operating
Results
|
Three Months Ended |
|
August 2, 2024 |
|
Percentchange |
|
August 4, 2023 |
|
(in millions, except per share amounts) |
Revenues |
$ |
1,818 |
|
|
2 |
% |
|
$ |
1,784 |
|
Operating
income |
|
134 |
|
|
(63) % |
|
|
362 |
|
Operating income as a percentage of revenues |
|
7.4 |
% |
|
-1,290 bps |
|
|
20.3 |
% |
Adjusted
operating income(1) |
|
164 |
|
|
1 |
% |
|
|
163 |
|
Adjusted operating income as a percentage of revenues |
|
9.0 |
% |
|
-10 bps |
|
|
9.1 |
% |
Net income |
|
81 |
|
|
(67) % |
|
|
247 |
|
EBITDA(1) |
|
169 |
|
|
(58) % |
|
|
402 |
|
EBITDA as a percentage of revenues |
|
9.3 |
% |
|
-1,320 bps |
|
|
22.5 |
% |
Adjusted
EBITDA(1) |
|
170 |
|
|
(2) % |
|
|
174 |
|
Adjusted EBITDA as a percentage of revenues |
|
9.4 |
% |
|
-40 bps |
|
|
9.8 |
% |
Diluted
earnings per share |
$ |
1.58 |
|
|
(65) % |
|
$ |
4.56 |
|
Adjusted diluted earnings per share(1) |
$ |
2.05 |
|
|
— |
% |
|
$ |
2.05 |
|
Net cash
provided by operating activities |
$ |
138 |
|
|
(8) % |
|
$ |
150 |
|
Free cash
flow(1) |
$ |
241 |
|
|
67 |
% |
|
$ |
144 |
|
Transaction-adjusted free cash flow(1) |
$ |
241 |
|
|
69 |
% |
|
$ |
143 |
|
(1)Non-GAAP measure, see Schedule 6 for information about this
measure.
Second Quarter Summary Results
Revenues for the quarter increased $34 million or 2% compared to
the same period in the prior year primarily due to ramp up in
volume on existing and new contracts, partially offset by contract
completions.
Operating income as a percentage of revenues decreased from the
comparable prior year period primarily due to the gain on the sale
of the Supply Chain Business ($234 million) in the prior year
period, and contract completions, partially offset by ramp up in
volume on existing and new contracts.
Adjusted EBITDA(1) as a percentage of revenues for the quarter
decreased to 9.4% from 9.8% for the same period in the prior year
primarily due to contract completions, partially offset by ramp up
in volume on existing and new contracts.
Diluted earnings per share for the quarter was $1.58 compared to
$4.56 in the prior year quarter. Adjusted diluted earnings per
share(1) for the quarter was $2.05 compared to $2.05 in the prior
year quarter. The weighted-average diluted shares outstanding
during the quarter decreased to 51.2 million from 53.9 million
during the prior year quarter.
(1)Non-GAAP measure, see Schedule 6 for information about this
measure.
Cash Generation and Capital Deployment
Cash flows provided by operating activities for the second
quarter decreased $12 million compared to the prior year quarter,
primarily due to higher cash used from the Master Accounts
Receivable Purchase Agreement ("MARPA Facility") in the current
year, partially offset by timing of collections, lower tax payments
in the current year, and other net favorable changes in working
capital.
During the quarter, SAIC deployed $226 million of capital,
consisting of $201 million of plan share repurchases, $19 million
in cash dividends, and $6 million of capital expenditures.
Quarterly Dividend Declared
As previously announced, subsequent to quarter end, the
Company's Board of Directors declared a cash dividend of
$0.37 per share of the Company's common stock payable on
October 25, 2024 to stockholders of record on October 11, 2024.
SAIC intends to continue paying dividends on a quarterly basis,
although the declaration of any future dividends will be determined
by the Board of Directors each quarter and will depend on earnings,
financial condition, capital requirements and other factors.
Backlog and Contract Awards
Net bookings for the quarter were approximately $1.2 billion,
which reflects a book-to-bill ratio of 0.6 and a trailing twelve
months book-to-bill ratio of 1.1. SAIC’s estimated backlog at the
end of the quarter was approximately $22.9 billion. Of the total
backlog amount, approximately $4.2 billion was funded.
Notable New Awards:
U.S. Treasury: During the quarter, SAIC was
awarded a one year, approximately $134 million task order to
support the Treasury Cloud (TCloud). This effort provides
enterprise-level commercial Infrastructure as a Service (IaaS),
Platform as a Service (PaaS), and Software as a Service (SaaS)
cloud products and professional services to support Treasury and
Bureau business and mission operations.
Notable Recompete Awards:
Department of Veterans Affairs: During the
quarter, SAIC was awarded a five-year (one year base, plus four,
one-year option periods), $206 million recompete to deliver
high-quality IT services that are crucial to the seamless execution
of the Veterans Affairs Financial Services Center’s operations.
This effort will support the Financial Services Center in Austin,
TX with essential services such as infrastructure and application
support, cloud services, cybersecurity, data analytics, database
design, and administration.
U.S. Navy: During the quarter, SAIC was awarded
three contracts worth $58 million to support the Airborne
Electronic Attack (AEA) Integrated Product Team (IPT) Jammer
Technique Optimization (JATO) Program, the International Program,
and the AEA IPT EA-18G Program. These three contracts will deliver
mission-critical solutions with dedicated support to the Naval Air
Warfare Center Weapons Division.
U.S. Defense and Space Portfolio: During the
quarter, SAIC was awarded approximately $250 million of contract
awards by defense and space organizations. These awards represent a
combination of new business and recompetes.
Fiscal Year 2025 Guidance
Management is increasing Adjusted Diluted EPS(1) fiscal year
2025 guidance to $8.10 - $8.30 from $8.00 - $8.20, reaffirms all
other fiscal year 2025 guidance which represents the Company's
views as of September 5,
2024.
|
Fiscal Year |
|
2025 Guidance |
Revenue |
$7.35B - $7.50B |
Adjusted EBITDA(1) |
$680M - $700M |
Adjusted EBITDA Margin(1) |
9.2% - 9.4% |
Adjusted Diluted EPS(1) |
$8.10 - $8.30 |
Free Cash Flow(1) |
$490M - $510M |
(1)Non-GAAP measure, see Schedule 6 for information about this
measure.
Webcast Information
SAIC management will discuss operations and financial results in
an earnings conference call beginning at 10:00 a.m. Eastern time on
September 5, 2024. The conference call will be webcast
simultaneously to the public through a link on the Investor
Relations section of the SAIC website
(https://investors.saic.com/). We will be providing webcast access
only – “dial-in” access is no longer available. Additionally, a
supplemental presentation will be available to the public through
links to the Investor Relations section of the SAIC website. After
the call concludes, an on-demand audio replay of the webcast can be
accessed on the Investor Relations website.
About SAIC
SAIC® is a premier Fortune 500® technology integrator focused on
advancing the power of technology and innovation to serve and
protect our world. Our robust portfolio of offerings across the
defense, space, civilian and intelligence markets includes secure
high-end solutions in mission IT, enterprise IT, engineering
services and professional services. We integrate emerging
technology, rapidly and securely, into mission critical operations
that modernize and enable critical national imperatives.
We are approximately 24,000 strong; driven by mission, united by
purpose, and inspired by opportunities. SAIC is an Equal
Opportunity Employer, fostering a culture of diversity, equity and
inclusion, which is core to our values and important to attract and
retain exceptional talent. Headquartered in Reston, Virginia, SAIC
has annual revenues of approximately $7.4 billion. For more
information, visit saic.com. For ongoing news, please visit our
newsroom.
Contacts
Investor Relations: Joe DeNardi, +1.703.488.8528,
joseph.w.denardi@saic.com
Media: Kara Ross, kara.g.ross@saic.com
GAAP to Non-GAAP Guidance Reconciliation
The Company does not provide a reconciliation of forward-looking
adjusted diluted EPS to GAAP diluted EPS, adjusted EBITDA margin to
GAAP net income or transaction-adjusted free cash flow and free
cash flow to GAAP net cash flows from operating activities due to
the inherent difficulty in forecasting and quantifying certain
amounts that are necessary for such reconciliation. Because certain
deductions for non-GAAP exclusions used to calculate net income and
cash flows from operating activities may vary significantly based
on actual events, the Company is not able to forecast GAAP diluted
EPS, GAAP net income or GAAP net cash flows from operating
activities with reasonable certainty. The variability of the above
charges may have an unpredictable and potentially significant
impact on our future GAAP financial results.
Forward-Looking Statements
Certain statements in this release contain or are based on
“forward-looking” information within the meaning of the Private
Securities Litigation Reform Act of 1995. In some cases, you can
identify forward-looking statements by words such as “expects,”
“intends,” “plans,” “anticipates,” “believes,” “estimates,”
“guidance,” and similar words or phrases. Forward-looking
statements in this release may include, among others, estimates of
future revenues, operating income, earnings, earnings per share,
charges, total contract value, backlog, outstanding shares and cash
flows, as well as statements about future dividends, share
repurchases and other capital deployment plans. Such statements are
not guarantees of future performance and involve risk,
uncertainties and assumptions, and actual results may differ
materially from the guidance and other forward-looking statements
made in this release as a result of various factors. Risks,
uncertainties and assumptions that could cause or contribute to
these material differences include those discussed in the “Risk
Factors,” “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” and “Legal Proceedings”
sections of our Annual Report on Form 10-K, as updated in any
subsequent Quarterly Reports on Form 10-Q and other filings with
the SEC, which may be viewed or obtained through the Investor
Relations section of our website at www.saic.com or on the SEC’s
website at www.sec.gov. Due to such risks, uncertainties and
assumptions you are cautioned not to place undue reliance on such
forward-looking statements, which speak only as of the date hereof.
SAIC expressly disclaims any duty to update any forward-looking
statement provided in this release to reflect subsequent events,
actual results or changes in SAIC’s expectations. SAIC also
disclaims any duty to comment upon or correct information that may
be contained in reports published by investment analysts or
others.
|
Schedule 1: |
SCIENCE APPLICATIONS INTERNATIONAL
CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF
INCOME(Unaudited) |
|
|
Three Months Ended |
|
Six Months Ended |
|
August 2,2024 |
|
August 4,2023 |
|
August 2,2024 |
|
August 4,2023 |
|
(in millions, except per share amounts) |
Revenues |
$ |
1,818 |
|
|
$ |
1,784 |
|
|
$ |
3,665 |
|
|
$ |
3,812 |
|
Cost of revenues |
|
1,608 |
|
|
|
1,568 |
|
|
|
3,242 |
|
|
|
3,361 |
|
Selling, general and
administrative expenses |
|
77 |
|
|
|
88 |
|
|
|
162 |
|
|
|
172 |
|
(Gain) loss on divestitures,
net of transaction costs |
|
— |
|
|
|
(234 |
) |
|
|
— |
|
|
|
(240 |
) |
Other
operating (income) expense |
|
(1 |
) |
|
|
— |
|
|
|
(4 |
) |
|
|
— |
|
Operating income |
|
134 |
|
|
|
362 |
|
|
|
265 |
|
|
|
519 |
|
Interest expense, net |
|
31 |
|
|
|
29 |
|
|
|
65 |
|
|
|
61 |
|
Other
(income) expense, net |
|
3 |
|
|
|
(2 |
) |
|
|
5 |
|
|
|
— |
|
Income before income taxes |
|
100 |
|
|
|
335 |
|
|
|
195 |
|
|
|
458 |
|
Provision for income taxes |
|
(19 |
) |
|
|
(88 |
) |
|
|
(37 |
) |
|
|
(113 |
) |
Net income |
$ |
81 |
|
|
$ |
247 |
|
|
$ |
158 |
|
|
$ |
345 |
|
Weighted-average number of shares outstanding: |
|
|
|
|
|
|
|
Basic |
|
50.9 |
|
|
|
53.5 |
|
|
|
51.3 |
|
|
|
53.9 |
|
Diluted |
|
51.2 |
|
|
|
53.9 |
|
|
|
51.7 |
|
|
|
54.3 |
|
Earnings per share: |
|
|
|
|
|
|
|
Basic |
$ |
1.59 |
|
|
$ |
4.60 |
|
|
$ |
3.08 |
|
|
$ |
6.40 |
|
Diluted |
$ |
1.58 |
|
|
$ |
4.56 |
|
|
$ |
3.06 |
|
|
$ |
6.35 |
|
|
Schedule 2: |
SCIENCE APPLICATIONS INTERNATIONAL
CORPORATIONCONDENSED CONSOLIDATED BALANCE
SHEETS(Unaudited) |
|
|
August 2,2024 |
|
February 2, 2024 |
|
(in millions) |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
48 |
|
$ |
94 |
Receivables, net |
|
946 |
|
|
914 |
Prepaid expenses and other current assets |
|
109 |
|
|
123 |
Total current assets |
|
1,103 |
|
|
1,131 |
Goodwill |
|
2,851 |
|
|
2,851 |
Intangible assets, net |
|
836 |
|
|
894 |
Property, plant, and
equipment, net |
|
95 |
|
|
91 |
Operating lease right of use
assets |
|
168 |
|
|
152 |
Other
assets |
|
197 |
|
|
195 |
Total assets |
$ |
5,250 |
|
$ |
5,314 |
LIABILITIES AND EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
639 |
|
$ |
567 |
Accrued payroll and employee benefits |
|
338 |
|
|
370 |
Other accrued liabilities |
|
118 |
|
|
144 |
Debt, current portion |
|
197 |
|
|
77 |
Total current liabilities |
|
1,292 |
|
|
1,158 |
Debt, net of current
portion |
|
1,970 |
|
|
2,022 |
Operating lease
liabilities |
|
158 |
|
|
147 |
Deferred income taxes |
|
19 |
|
|
28 |
Other long-term
liabilities |
|
186 |
|
|
174 |
Equity: |
|
|
|
Total stockholders' equity |
|
1,625 |
|
|
1,785 |
Total liabilities and stockholders' equity |
$ |
5,250 |
|
$ |
5,314 |
|
Schedule 3: |
SCIENCE APPLICATIONS INTERNATIONAL
CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS(Unaudited) |
|
|
Three Months Ended |
|
Six Months Ended |
|
August 2,2024 |
|
August 4,2023 |
|
August 2,2024 |
|
August 4,2023 |
|
(in millions) |
Cash flows from operating
activities: |
|
|
|
|
|
|
|
Net income |
$ |
81 |
|
|
$ |
247 |
|
|
$ |
158 |
|
|
$ |
345 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
34 |
|
|
|
36 |
|
|
|
69 |
|
|
|
72 |
|
Deferred income taxes |
|
(8 |
) |
|
|
(19 |
) |
|
|
(8 |
) |
|
|
(25 |
) |
Stock-based compensation expense |
|
12 |
|
|
|
15 |
|
|
|
25 |
|
|
|
27 |
|
(Gain) loss on sale of long-lived assets |
|
— |
|
|
|
(3 |
) |
|
|
— |
|
|
|
(3 |
) |
(Gain) loss on divestitures |
|
— |
|
|
|
(240 |
) |
|
|
— |
|
|
|
(247 |
) |
Other |
|
(2 |
) |
|
|
1 |
|
|
|
(3 |
) |
|
|
— |
|
Increase (decrease) resulting from changes in operating assets and
liabilities, net of the effect of divestitures: |
|
|
|
|
|
|
|
Receivables |
|
(12 |
) |
|
|
37 |
|
|
|
(32 |
) |
|
|
(90 |
) |
Prepaid expenses and other current assets |
|
(1 |
) |
|
|
4 |
|
|
|
14 |
|
|
|
8 |
|
Other assets |
|
(1 |
) |
|
|
(7 |
) |
|
|
(1 |
) |
|
|
(3 |
) |
Accounts payable and accrued liabilities |
|
(21 |
) |
|
|
(54 |
) |
|
|
41 |
|
|
|
52 |
|
Accrued payroll and employee benefits |
|
51 |
|
|
|
52 |
|
|
|
(32 |
) |
|
|
9 |
|
Income taxes payable |
|
— |
|
|
|
67 |
|
|
|
(2 |
) |
|
|
74 |
|
Operating lease assets and liabilities, net |
|
(2 |
) |
|
|
1 |
|
|
|
(5 |
) |
|
|
(2 |
) |
Other long-term liabilities |
|
7 |
|
|
|
13 |
|
|
|
12 |
|
|
|
15 |
|
Net cash provided by operating activities |
|
138 |
|
|
|
150 |
|
|
|
236 |
|
|
|
232 |
|
Cash flows from investing
activities: |
|
|
|
|
|
|
|
Expenditures for property, plant, and equipment |
|
(6 |
) |
|
|
(6 |
) |
|
|
(12 |
) |
|
|
(12 |
) |
Purchases of marketable securities |
|
(4 |
) |
|
|
(2 |
) |
|
|
(8 |
) |
|
|
(5 |
) |
Sales of marketable securities |
|
2 |
|
|
|
3 |
|
|
|
6 |
|
|
|
4 |
|
Proceeds from sale of long-lived assets |
|
— |
|
|
|
3 |
|
|
|
— |
|
|
|
3 |
|
Proceeds from divestitures |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
355 |
|
Cash divested upon deconsolidation of joint venture |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(8 |
) |
Other |
|
(1 |
) |
|
|
— |
|
|
|
(2 |
) |
|
|
(3 |
) |
Net cash (used in) provided by investing activities |
|
(9 |
) |
|
|
(2 |
) |
|
|
(16 |
) |
|
|
334 |
|
Cash flows from financing
activities: |
|
|
|
|
|
|
|
Dividend payments to stockholders |
|
(19 |
) |
|
|
(20 |
) |
|
|
(39 |
) |
|
|
(41 |
) |
Principal payments on borrowings |
|
(296 |
) |
|
|
(100 |
) |
|
|
(606 |
) |
|
|
(260 |
) |
Issuances of stock |
|
5 |
|
|
|
4 |
|
|
|
9 |
|
|
|
8 |
|
Stock repurchased and retired or withheld for taxes on equity
awards |
|
(201 |
) |
|
|
(102 |
) |
|
|
(304 |
) |
|
|
(190 |
) |
Proceeds from borrowings |
|
380 |
|
|
|
— |
|
|
|
673 |
|
|
|
160 |
|
Net cash used in financing activities |
|
(131 |
) |
|
|
(218 |
) |
|
|
(267 |
) |
|
|
(323 |
) |
Net (decrease) increase in cash, cash equivalents and restricted
cash |
|
(2 |
) |
|
|
(70 |
) |
|
|
(47 |
) |
|
|
243 |
|
Cash,
cash equivalents and restricted cash at beginning of period |
|
58 |
|
|
|
431 |
|
|
|
103 |
|
|
|
118 |
|
Cash, cash equivalents and restricted cash at end of period |
$ |
56 |
|
|
$ |
361 |
|
|
$ |
56 |
|
|
$ |
361 |
|
|
Schedule 4: |
SCIENCE APPLICATIONS INTERNATIONAL
CORPORATIONSEGMENT OPERATING
RESULTS(Unaudited) |
|
|
Three Months Ended |
|
Six Months Ended |
|
August 2,2024 |
|
August 4,2023 |
|
August 2,2024 |
|
August 4,2023 |
|
(in millions) |
Revenues |
|
|
|
|
|
|
|
Defense and Intelligence |
$ |
1,415 |
|
|
$ |
1,389 |
|
|
$ |
2,851 |
|
|
$ |
2,986 |
|
Civilian |
|
403 |
|
|
|
395 |
|
|
|
814 |
|
|
|
826 |
|
Total revenues |
$ |
1,818 |
|
|
$ |
1,784 |
|
|
$ |
3,665 |
|
|
$ |
3,812 |
|
|
|
|
|
|
|
|
|
Operating income
(loss) |
|
|
|
|
|
|
|
Defense and Intelligence |
$ |
107 |
|
|
$ |
106 |
|
|
$ |
214 |
|
|
$ |
230 |
|
Civilian |
|
34 |
|
|
|
43 |
|
|
|
68 |
|
|
|
85 |
|
Corporate |
|
(7 |
) |
|
|
213 |
|
|
|
(17 |
) |
|
|
204 |
|
Total operating income |
$ |
134 |
|
|
$ |
362 |
|
|
$ |
265 |
|
|
$ |
519 |
|
|
|
|
|
|
|
|
|
Operating income
margin |
|
|
|
|
|
|
|
Defense and Intelligence |
|
7.6 |
% |
|
|
7.6 |
% |
|
|
7.5 |
% |
|
|
7.7 |
% |
Civilian |
|
8.4 |
% |
|
|
10.9 |
% |
|
|
8.4 |
% |
|
|
10.3 |
% |
Total operating income
margin |
|
7.4 |
% |
|
|
20.3 |
% |
|
|
7.2 |
% |
|
|
13.6 |
% |
Second Quarter Defense and Intelligence
Results
Revenues for the quarter increased $26 million or 2% compared to
the same period in the prior year primarily due to ramp up in
volume on existing and new contracts, partially offset by contract
completions.
Operating income and adjusted operating income(1) as a
percentage of revenues was comparable to the prior year period,
primarily due to ramp up in volume on existing and new contracts,
offset by contract completions.
Second Quarter Civilian Results
Revenues for the quarter increased $8 million or 2% compared to
the same period in the prior year primarily due to ramp up in
volume on existing contracts.
Operating income and adjusted operating income(1) as a
percentage of revenues decreased from the comparable prior year
period partially due to timing and volume mix.
Second Quarter Corporate Results
Operating loss and adjusted operating loss(1) for the quarter
increased $220 million and decreased $9 million, respectively, from
the comparable prior year period primarily due to the gain
recognized from the divestiture of the Supply Chain Business in the
prior year period ($234 million), partially offset by lower
selling, general and administrative expenses.
(1)Non-GAAP measure, see Schedule 6 for information about this
measure.
|
Schedule 5: |
SCIENCE APPLICATIONS INTERNATIONAL
CORPORATIONBACKLOG(Unaudited) |
|
The estimated
value of our total backlog as of the dates presented was: |
|
August 2, 2024 |
|
February 2, 2024 |
|
Defense and Intelligence |
Civilian |
Total SAIC |
|
Defense and Intelligence |
Civilian |
Total SAIC |
|
(in millions) |
Funded backlog |
$ |
3,411 |
|
$ |
826 |
|
$ |
4,237 |
|
$ |
2,707 |
|
$ |
832 |
|
$ |
3,539 |
Negotiated unfunded backlog |
|
15,819 |
|
|
2,843 |
|
|
18,662 |
|
|
16,316 |
|
|
2,908 |
|
|
19,224 |
Total backlog |
$ |
19,230 |
|
$ |
3,669 |
|
$ |
22,899 |
|
$ |
19,023 |
|
$ |
3,740 |
|
$ |
22,763 |
Backlog represents the estimated amount of future revenues to be
recognized under negotiated contracts and task orders as work is
performed and excludes contract awards which have been protested by
competitors until the protest is resolved in our favor. SAIC
segregates backlog into two categories, funded backlog and
negotiated unfunded backlog. Funded backlog for contracts with
government agencies primarily represents contracts for which
funding is appropriated less revenues previously recognized on
these contracts, and does not include the unfunded portion of
contracts where funding is incrementally appropriated or authorized
by the U.S. government and other customers even though the contract
may call for performance over a number of years. Funded backlog for
contracts with non-government agencies represents the estimated
value of contracts which may cover multiple future years under
which SAIC is obligated to perform, less revenues previously
recognized on these contracts. Negotiated unfunded backlog
represents the estimated future revenues to be earned
from negotiated contracts for which funding has not been
appropriated or authorized, and unexercised priced contract
options. Negotiated unfunded backlog does not include any estimate
of future potential task orders expected to be awarded under
indefinite delivery, indefinite quantity (IDIQ), U.S. General
Services Administration (GSA) schedules or other master agreement
contract vehicles, with the exception of certain IDIQ contracts
where task orders are not competitively awarded and separately
priced but instead are used as a funding mechanism, and where there
is a basis for estimating future revenues and funding on future
anticipated task orders.
Schedule 6:
SCIENCE APPLICATIONS INTERNATIONAL
CORPORATIONNON-GAAP FINANCIAL
MEASURES(Unaudited)
This schedule describes the non-GAAP financial measures included
in this earnings release. While we believe that these non-GAAP
financial measures may be useful in evaluating our financial
information, they should be considered as supplemental in nature
and not as a substitute for financial information prepared in
accordance with GAAP. Reconciliations, definitions, and how we
believe these measures are useful to management and investors are
provided below. Other companies may define similar measures
differently.
EBITDA and Adjusted EBITDA
|
Three Months Ended |
|
Six Months Ended |
|
August 2,2024 |
|
August 4,2023 |
|
August 2,2024 |
|
August 4,2023 |
|
(in millions) |
Revenues |
$ |
1,818 |
|
|
$ |
1,784 |
|
|
$ |
3,665 |
|
|
$ |
3,812 |
|
Net
income |
$ |
81 |
|
|
$ |
247 |
|
|
$ |
158 |
|
|
$ |
345 |
|
Interest expense, net and loss
on sale of receivables |
|
35 |
|
|
|
31 |
|
|
|
72 |
|
|
|
66 |
|
Provision for income
taxes |
|
19 |
|
|
|
88 |
|
|
|
37 |
|
|
|
113 |
|
Depreciation and amortization |
|
34 |
|
|
|
36 |
|
|
|
69 |
|
|
|
72 |
|
EBITDA(1) |
|
169 |
|
|
|
402 |
|
|
|
336 |
|
|
|
596 |
|
EBITDA as a percentage of revenues |
|
9.3 |
% |
|
|
22.5 |
% |
|
|
9.2 |
% |
|
|
15.6 |
% |
Acquisition and integration
costs |
|
— |
|
|
|
1 |
|
|
|
(2 |
) |
|
|
1 |
|
Restructuring and impairment
costs |
|
2 |
|
|
|
5 |
|
|
|
4 |
|
|
|
6 |
|
Recovery of acquisition and
integration costs and restructuring and impairment costs |
|
(1 |
) |
|
|
— |
|
|
|
(2 |
) |
|
|
— |
|
(Gain)
loss on divestitures, net of transaction costs |
|
— |
|
|
|
(234 |
) |
|
|
— |
|
|
|
(240 |
) |
Adjusted EBITDA(1) |
$ |
170 |
|
|
$ |
174 |
|
|
$ |
336 |
|
|
$ |
363 |
|
Adjusted EBITDA as a percentage of revenues |
|
9.4 |
% |
|
|
9.8 |
% |
|
|
9.2 |
% |
|
|
9.5 |
% |
EBITDA is a performance measure that is calculated by taking net
income and excluding interest and loss on sale of receivables,
provision for income taxes, and depreciation and amortization.
Adjusted EBITDA is a performance measure that excludes the impact
of non-recurring transactions that we do not consider to be
indicative of our ongoing operating performance. The acquisition
and integration costs relate to the Company's acquisitions. The
restructuring and impairment costs represent the reorganization and
facilities optimization costs or impairments of long-lived assets.
The recovery of acquisition and integration costs and restructuring
and impairment costs relate to costs recovered through the
Company's indirect rates in accordance with Cost Accounting
Standards. The (gain) loss on divestitures includes gains
associated with the deconsolidation of FSA and the sale of the
logistics and supply chain management business, net of transaction
costs. We believe that these performance measures provide
management and investors with useful information in assessing
trends in our ongoing operating performance and may provide greater
visibility in understanding the long-term financial performance of
the Company.
(1)Non-GAAP measure, see above for definition.
|
Schedule 6 (continued): |
SCIENCE APPLICATIONS INTERNATIONAL
CORPORATIONNON-GAAP FINANCIAL
MEASURES(Unaudited) |
|
Adjusted
Operating Income |
|
Three Months Ended August 2,
2024 |
|
(dollars in millions) |
|
As Reported |
|
Restructuring and impairment costs |
|
Recovery of acquisition and integration costs and restructuring and
impairment costs |
|
Amortization of intangible assets |
|
Non-GAAP results(1) |
|
Non-GAAP operating margin(1) |
Defense and Intelligence |
$ |
107 |
|
|
$ |
— |
|
$ |
— |
|
|
$ |
17 |
|
$ |
124 |
|
|
8.8 |
% |
Civilian |
|
34 |
|
|
|
— |
|
|
— |
|
|
|
12 |
|
|
46 |
|
|
11.4 |
% |
Corporate |
|
(7 |
) |
|
|
2 |
|
|
(1 |
) |
|
|
— |
|
|
(6 |
) |
|
NM |
Total |
$ |
134 |
|
|
$ |
2 |
|
$ |
(1 |
) |
|
$ |
29 |
|
$ |
164 |
|
|
9.0 |
% |
|
Three Months Ended August 4,
2023 |
|
(dollars in millions) |
|
As Reported |
|
Acquisition and integration costs |
|
Restructuring and impairment costs |
|
Amortization of intangible assets |
|
(Gain) loss on divestitures, net of transaction costs |
|
Non-GAAP results(1) |
|
Non-GAAP operating margin(1) |
Defense and Intelligence |
$ |
106 |
|
$ |
— |
|
$ |
— |
|
$ |
17 |
|
$ |
— |
|
|
$ |
123 |
|
|
8.9 |
% |
Civilian |
|
43 |
|
|
— |
|
|
— |
|
|
12 |
|
|
— |
|
|
|
55 |
|
|
13.9 |
% |
Corporate |
|
213 |
|
|
1 |
|
|
5 |
|
|
— |
|
|
(234 |
) |
|
|
(15 |
) |
|
NM |
Total |
$ |
362 |
|
$ |
1 |
|
$ |
5 |
|
$ |
29 |
|
$ |
(234 |
) |
|
$ |
163 |
|
|
9.1 |
% |
Adjusted operating income is a performance measure that excludes
the impact of non-recurring transactions that we do not consider to
be indicative of our ongoing operating performance. The acquisition
and integration costs relate to the Company's acquisitions. The
restructuring and impairment costs represent the reorganization and
facilities optimization costs or impairments of long-lived assets.
The recovery of acquisition and integration costs and restructuring
and impairment costs relate to costs recovered through the
Company's indirect rates in accordance with Cost Accounting
Standards. Adjusted operating income also excludes amortization of
intangible assets because we do not have a history of significant
acquisition activity, we do not acquire businesses on a predictable
cycle, and the amount of an acquisition's purchase price allocated
to intangible assets and the related amortization term are unique
to each acquisition. The (gain) loss on divestitures includes gains
associated with the sale of the logistics and supply chain
management business, net of transaction costs. We believe that
these performance measures provide management and investors with
useful information in assessing trends in our ongoing operating
performance and may provide greater visibility in understanding the
long-term financial performance of the Company. All adjustments to
operating income for the periods presented were associated with
Corporate costs and initiatives.
(1)Non-GAAP measure, see above for definition.
|
Schedule 6 (continued): |
SCIENCE APPLICATIONS INTERNATIONAL
CORPORATIONNON-GAAP FINANCIAL
MEASURES(Unaudited) |
|
Adjusted Operating Income |
|
Six Months Ended August 2,
2024 |
|
(dollars in millions) |
|
As Reported |
|
Acquisition and integration costs |
|
Restructuring and impairment costs |
|
Recovery of acquisition and integration costs and restructuring and
impairment costs |
|
Amortization of intangible assets |
|
Non-GAAP results(1) |
|
Non-GAAP operating margin(1) |
Defense and Intelligence |
$ |
214 |
|
|
$ |
— |
|
|
$ |
— |
|
$ |
— |
|
|
$ |
34 |
|
$ |
248 |
|
|
8.7 |
% |
Civilian |
|
68 |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
24 |
|
|
92 |
|
|
11.3 |
% |
Corporate |
|
(17 |
) |
|
|
(2 |
) |
|
|
4 |
|
|
(2 |
) |
|
|
— |
|
|
(17 |
) |
|
NM |
Total |
$ |
265 |
|
|
$ |
(2 |
) |
|
$ |
4 |
|
$ |
(2 |
) |
|
$ |
58 |
|
$ |
323 |
|
|
8.8 |
% |
|
Six Months Ended August 4,
2023 |
|
(dollars in millions) |
|
As Reported |
|
Acquisition and integration costs |
|
Restructuring and impairment costs |
|
Amortization of intangible assets |
|
(Gain) loss on divestitures, net of transaction costs |
|
Non-GAAP results(1) |
|
Non-GAAP operating margin(1) |
Defense and Intelligence |
$ |
230 |
|
$ |
— |
|
$ |
— |
|
$ |
34 |
|
$ |
— |
|
|
$ |
264 |
|
|
8.8 |
% |
Civilian |
|
85 |
|
|
— |
|
|
— |
|
|
24 |
|
|
— |
|
|
|
109 |
|
|
13.2 |
% |
Corporate |
|
204 |
|
|
1 |
|
|
6 |
|
|
— |
|
|
(240 |
) |
|
|
(29 |
) |
|
NM |
Total |
$ |
519 |
|
$ |
1 |
|
$ |
6 |
|
$ |
58 |
|
$ |
(240 |
) |
|
$ |
344 |
|
|
9.0 |
% |
Adjusted operating income is a performance measure that excludes
the impact of non-recurring transactions that we do not consider to
be indicative of our ongoing operating performance. The acquisition
and integration costs relate to the Company's acquisitions. The
restructuring and impairment costs represent the reorganization and
facilities optimization costs or impairments of long-lived assets.
The recovery of acquisition and integration costs and restructuring
and impairment costs relate to costs recovered through the
Company's indirect rates in accordance with Cost Accounting
Standards. Adjusted operating income also excludes amortization of
intangible assets because we do not have a history of significant
acquisition activity, we do not acquire businesses on a predictable
cycle, and the amount of an acquisition's purchase price allocated
to intangible assets and the related amortization term are unique
to each acquisition. The (gain) loss on divestitures includes gains
associated with the deconsolidation of FSA and the sale of the
logistics and supply chain management business, net of transaction
costs. We believe that these performance measures provide
management and investors with useful information in assessing
trends in our ongoing operating performance and may provide greater
visibility in understanding the long-term financial performance of
the Company. All adjustments to operating income for the periods
presented were associated with Corporate costs and initiatives.
(1)Non-GAAP measure, see above for definition.
|
Schedule 6 (continued): |
SCIENCE APPLICATIONS INTERNATIONAL
CORPORATIONNON-GAAP FINANCIAL
MEASURES(Unaudited) |
|
Adjusted
Diluted Earnings Per Share |
|
Three Months Ended August 2,
2024 |
|
(dollars in millions) |
|
As Reported |
|
Restructuring and impairment costs |
|
Recovery of acquisition and integration costs and restructuring and
impairment costs |
|
Amortization of intangible assets |
|
Non-GAAP results(1) |
Income before income taxes |
$ |
100 |
|
|
$ |
2 |
|
$ |
(1 |
) |
|
$ |
29 |
|
|
$ |
130 |
|
Provision for income taxes |
|
(19 |
) |
|
|
— |
|
|
— |
|
|
|
(6 |
) |
|
|
(25 |
) |
Net income |
$ |
81 |
|
|
$ |
2 |
|
$ |
(1 |
) |
|
$ |
23 |
|
|
$ |
105 |
|
|
|
|
|
|
|
|
|
|
|
Diluted
EPS |
$ |
1.58 |
|
|
$ |
0.04 |
|
$ |
(0.02 |
) |
|
$ |
0.45 |
|
|
$ |
2.05 |
|
|
Three Months Ended August 4,
2023 |
|
(dollars in millions) |
|
As Reported |
|
Acquisition and integration costs |
|
Restructuring and impairment costs |
|
Amortization of intangible assets |
|
(Gain) loss on divestitures, net of transaction costs |
|
Non-GAAP results(1) |
Income before income taxes |
$ |
335 |
|
|
$ |
1 |
|
$ |
5 |
|
|
$ |
29 |
|
|
$ |
(234 |
) |
|
$ |
136 |
|
Provision for income taxes |
|
(88 |
) |
|
|
— |
|
|
(1 |
) |
|
|
(6 |
) |
|
|
69 |
|
|
|
(26 |
) |
Net income |
$ |
247 |
|
|
$ |
1 |
|
$ |
4 |
|
|
$ |
23 |
|
|
$ |
(165 |
) |
|
$ |
110 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
EPS |
$ |
4.56 |
|
|
$ |
0.02 |
|
$ |
0.07 |
|
|
$ |
0.45 |
|
|
$ |
(3.05 |
) |
|
$ |
2.05 |
|
Adjusted diluted earnings per share is a performance measure
that excludes the impact of non-recurring transactions that we do
not consider to be indicative of our ongoing operating performance.
The acquisition and integration costs relate to the Company's
acquisitions. The restructuring and impairment costs represent the
reorganization and facilities optimization costs or impairments of
long-lived assets. The recovery of acquisition and integration
costs and restructuring and impairment costs relate to costs
recovered through the Company's indirect rates in accordance with
Cost Accounting Standards. Adjusted diluted earnings per share also
excludes amortization of intangible assets because we do not have a
history of significant acquisition activity, we do not acquire
businesses on a predictable cycle, and the amount of an
acquisition's purchase price allocated to intangible assets and the
related amortization term are unique to each acquisition. The
(gain) loss on divestitures includes gains associated with the sale
of the logistics and supply chain management business, net of
transaction costs. We believe that this performance measure
provides management and investors with useful information in
assessing trends in our ongoing operating performance and may
provide greater visibility in understanding the long-term financial
performance of the Company.
(1)Non-GAAP measure, see above for definition.
|
Schedule 6 (continued): |
SCIENCE APPLICATIONS INTERNATIONAL
CORPORATIONNON-GAAP FINANCIAL
MEASURES(Unaudited) |
|
Adjusted Diluted Earnings Per Share |
|
Six Months Ended August 2,
2024 |
|
(dollars in millions) |
|
As Reported |
|
Acquisition and integration costs |
|
Restructuring and impairment costs |
|
Recovery of acquisition and integration costs and restructuring and
impairment costs |
|
Amortization of intangible assets |
|
Non-GAAP results(1) |
Income before income taxes |
$ |
195 |
|
|
$ |
(2 |
) |
|
$ |
4 |
|
$ |
(2 |
) |
|
$ |
58 |
|
|
$ |
253 |
|
Provision for income taxes |
|
(37 |
) |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
(11 |
) |
|
|
(48 |
) |
Net income |
$ |
158 |
|
|
$ |
(2 |
) |
|
$ |
4 |
|
$ |
(2 |
) |
|
$ |
47 |
|
|
$ |
205 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
EPS |
$ |
3.06 |
|
|
$ |
(0.04 |
) |
|
$ |
0.08 |
|
$ |
(0.04 |
) |
|
$ |
0.91 |
|
|
$ |
3.97 |
|
|
Six Months Ended August 4,
2023 |
|
(dollars in millions) |
|
As Reported |
|
Acquisition and integration costs |
|
Restructuring and impairment costs |
|
Amortization of intangible assets |
|
(Gain) loss on divestitures, net of transaction costs |
|
Non-GAAP results(1) |
Income before income taxes |
$ |
458 |
|
|
$ |
1 |
|
$ |
6 |
|
|
$ |
58 |
|
|
$ |
(240 |
) |
|
$ |
283 |
|
Provision for income taxes |
|
(113 |
) |
|
|
— |
|
|
(1 |
) |
|
|
(12 |
) |
|
|
70 |
|
|
|
(56 |
) |
Net income |
$ |
345 |
|
|
$ |
1 |
|
$ |
5 |
|
|
$ |
46 |
|
|
$ |
(170 |
) |
|
$ |
227 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
EPS |
$ |
6.35 |
|
|
$ |
0.01 |
|
$ |
0.09 |
|
|
$ |
0.86 |
|
|
$ |
(3.12 |
) |
|
$ |
4.19 |
|
Adjusted diluted earnings per share is a performance measure
that excludes the impact of non-recurring transactions that we do
not consider to be indicative of our ongoing operating performance.
The acquisition and integration costs relate to the Company's
acquisitions. The restructuring and impairment costs represent the
reorganization and facilities optimization costs or impairments of
long-lived assets. The recovery of acquisition and integration
costs and restructuring and impairment costs relate to costs
recovered through the Company's indirect rates in accordance with
Cost Accounting Standards. Adjusted diluted earnings per share also
excludes amortization of intangible assets because we do not have a
history of significant acquisition activity, we do not acquire
businesses on a predictable cycle, and the amount of an
acquisition's purchase price allocated to intangible assets and the
related amortization term are unique to each acquisition. The
(gain) loss on divestitures includes gains associated with the
deconsolidation of FSA and the sale of the logistics and supply
chain management business, net of transaction costs. We believe
that this performance measure provides management and investors
with useful information in assessing trends in our ongoing
operating performance and may provide greater visibility in
understanding the long-term financial performance of the
Company.
(1)Non-GAAP measure, see above for definition.
|
Schedule 6 (continued): |
SCIENCE APPLICATIONS INTERNATIONAL
CORPORATIONNON-GAAP FINANCIAL
MEASURES(Unaudited) |
|
Free Cash
Flow and Transaction-Adjusted Free Cash Flow |
|
Three Months Ended |
|
Six Months Ended |
|
August 2,2024 |
|
August 4,2023 |
|
August 2,2024 |
|
August 4,2023 |
|
(in millions) |
Net cash provided by operating activities |
$ |
138 |
|
|
$ |
150 |
|
|
$ |
236 |
|
|
$ |
232 |
|
Expenditures for property,
plant, and equipment |
|
(6 |
) |
|
|
(6 |
) |
|
|
(12 |
) |
|
|
(12 |
) |
Cash
used from (provided by) MARPA Facility |
|
109 |
|
|
|
— |
|
|
|
30 |
|
|
|
— |
|
Free cash flow(1) |
$ |
241 |
|
|
$ |
144 |
|
|
$ |
254 |
|
|
$ |
220 |
|
L&SCM divestiture
transaction fees |
|
— |
|
|
|
7 |
|
|
|
— |
|
|
|
7 |
|
L&SCM divestiture transition services |
|
— |
|
|
|
(8 |
) |
|
|
8 |
|
|
|
(8 |
) |
Transaction-adjusted free cash
flow(1) |
$ |
241 |
|
|
$ |
143 |
|
|
$ |
262 |
|
|
$ |
219 |
|
|
|
FY25 Guidance |
|
|
(in millions) |
Net cash provided by operating activities |
|
$520 to $540 |
Expenditures for property, plant, and equipment |
|
Approximately $30 |
Free cash flow(1) |
|
$490 to $510 |
Free cash flow is calculated by taking cash flows provided by
operating activities less expenditures for property, plant, and
equipment and less cash flows from our Master Accounts Receivable
Purchasing Agreement (MARPA Facility) for the sale of certain
designated eligible U.S. government receivables. Under the MARPA
Facility, the Company can sell eligible receivables up to a maximum
amount of $300 million. Transaction-adjusted free cash flow
excludes cash taxes, transaction fees, and other costs related to
the divestiture of the logistics and supply chain management
business from free cash flow as previously defined. We believe that
free cash flow and transaction-adjusted free cash flow provides
management and investors with useful information in assessing
trends in our cash flows and in comparing them to other peer
companies, many of whom present similar non-GAAP liquidity
measures. These measures should not be considered as a measure of
residual cash flow available for discretionary purposes.
(1)Non-GAAP measure, see above for definition.
Science Applications (NASDAQ:SAIC)
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부터 10월(10) 2024 으로 11월(11) 2024
Science Applications (NASDAQ:SAIC)
과거 데이터 주식 차트
부터 11월(11) 2023 으로 11월(11) 2024