SAIC Announces Fourth Quarter and Full Fiscal Year 2023 Results
Science Applications International Corporation (SAIC) reported Q4 FY2023 revenues of $1.97 billion, reflecting a 10% increase year-over-year, while FY2023 revenues reached $7.70 billion, up 4% from the prior year. SAIC achieved Q4 diluted earnings per share of $1.34, a 76% increase compared to last year. Operating cash flow for FY2023 was $532 million, with free cash flow of $457 million, exceeding prior guidance. Updated FY2024 guidance anticipates $7.05B - $7.20B in revenue with a ~3% pro-forma organic growth. The company plans to divest its Logistics & Supply Chain Management business for $350 million to optimize its portfolio.
- Q4 FY2023 revenues increased by $186 million to $1.97 billion, 10% YOY growth.
- FY2023 revenues rose to $7.70 billion, reflecting a 4% increase over FY2022.
- Q4 diluted EPS increased by 76% to $1.34; adjusted diluted EPS rose by 36% to $2.04.
- Operating cash flows increased to $532 million for FY2023, with free cash flow at $457 million, exceeding previous guidance.
- Updated FY2024 guidance indicates revenue of $7.05B - $7.20B, expected pro-forma organic growth of ~3%, and 10% free cash flow growth.
- Adjusted EBITDA margin decreased from 8.8% in FY2022 to 8.7% in Q4 FY2023.
- Expected revenue impact of approximately $650 million from the divestiture of the Logistics & Supply Chain Management business.
-
Q4 of fiscal year 2023 revenues of
,$1.97 billion 10% growth over Q4 of fiscal year 2022; fiscal year 2023 revenues of ,$7.70 billion 4% growth over fiscal year 2022
-
Q4 of fiscal year 2023 diluted earnings per share of
; Adjusted diluted earnings per share(1) of$1.34 $2.04
-
Reported fiscal year 2023 cash flows provided by operating activities of
; free cash flow(1) of$532 million ,$457 million ahead of top end of prior guidance adjusting for$5 million under Section 174 of the Internal Revenue Code and other cash tax payments$68 million
-
Updated fiscal year 2024 guidance reflects Logistics &
Supply Chain Management (L&SCM) divestiture, deconsolidation ofForfeiture Support Associates joint venture and inclusion of impact from Section 174 of the Internal Revenue Code on cash tax payments
-
Midpoint of fiscal year 2024 guidance reflects ~
3% pro-forma organic revenue growth, 50 bps of adjusted EBITDA margin expansion, and10% pro-forma free cash flow growth compared to fiscal year 2023
“Our results in the quarter and for the fiscal year reflect sound execution of our strategy to deliver excellence for our customers and value for our shareholders,” said
“The sale of our Logistics &
Fourth Quarter and Full Fiscal Year 2023: Summary Operating Results
|
|
Three Months Ended |
|
Year Ended |
||||||||||||||||||
|
|
|
|
Percent change |
|
|
|
|
|
Percent change |
|
|
||||||||||
|
|
(in millions, except per share amounts) |
||||||||||||||||||||
Revenues |
|
$ |
1,968 |
|
|
10 |
% |
|
$ |
1,782 |
|
|
$ |
7,704 |
|
|
4 |
% |
|
$ |
7,394 |
|
Operating income |
|
|
118 |
|
|
39 |
% |
|
|
85 |
|
|
|
501 |
|
|
8 |
% |
|
|
462 |
|
Operating income as a percentage of revenues |
|
|
6.0 |
% |
|
120 bps |
|
|
4.8 |
% |
|
|
6.5 |
% |
|
30 bps |
|
|
6.2 |
% |
||
Adjusted operating income(1) |
|
|
131 |
|
|
24 |
% |
|
|
106 |
|
|
|
526 |
|
|
1 |
% |
|
|
519 |
|
Adjusted operating income as a percentage of revenues |
|
|
6.7 |
% |
|
80 bps |
|
|
5.9 |
% |
|
|
6.8 |
% |
|
-20 bps |
|
|
7.0 |
% |
||
Net income attributable to common stockholders |
|
|
74 |
|
|
72 |
% |
|
|
43 |
|
|
|
300 |
|
|
8 |
% |
|
|
277 |
|
EBITDA(1) |
|
|
160 |
|
|
28 |
% |
|
|
125 |
|
|
|
658 |
|
|
4 |
% |
|
|
630 |
|
EBITDA as a percentage of revenues |
|
|
8.1 |
% |
|
110 bps |
|
|
7.0 |
% |
|
|
8.5 |
% |
|
— bps |
|
|
8.5 |
% |
||
Adjusted EBITDA(1) |
|
|
171 |
|
|
17 |
% |
|
|
146 |
|
|
|
680 |
|
|
(1 |
)% |
|
|
686 |
|
Adjusted EBITDA as a percentage of revenues |
|
|
8.7 |
% |
|
50 bps |
|
|
8.2 |
% |
|
|
8.8 |
% |
|
-50 bps |
|
|
9.3 |
% |
||
Diluted earnings per share |
|
$ |
1.34 |
|
|
76 |
% |
|
$ |
0.76 |
|
|
$ |
5.38 |
|
|
13 |
% |
|
$ |
4.77 |
|
Adjusted diluted earnings per share(1) |
|
$ |
2.04 |
|
|
36 |
% |
|
$ |
1.50 |
|
|
$ |
7.55 |
|
|
4 |
% |
|
$ |
7.27 |
|
Net cash provided by operating activities |
|
$ |
145 |
|
|
41 |
% |
|
$ |
103 |
|
|
$ |
532 |
|
|
3 |
% |
|
$ |
518 |
|
Free cash flow(1) |
|
$ |
148 |
|
|
57 |
% |
|
$ |
94 |
|
|
$ |
457 |
|
|
(2 |
)% |
|
$ |
467 |
|
The Company utilizes a 52/53 week fiscal year ending on the Friday closest to
(1)Non-GAAP measure, see Schedule 5 for information about this measure.
Fourth Quarter Summary Results
Revenues for the quarter increased
Operating income as a percentage of revenues increased to
Adjusted EBITDA(1) as a percentage of revenues for the quarter was
Diluted earnings per share for the quarter was
Fiscal Year 2023 Summary Results
Revenues for the fiscal year increased
Operating income as a percentage of revenues for the fiscal year was
Adjusted EBITDA(1) as a percentage of revenues for the fiscal year decreased to
Diluted earnings per share for the year was
Cash Generation and Capital Deployment
Total cash flows provided by operating activities for the fourth quarter were
Total cash flows provided by operating activities for the year were
During the quarter, SAIC deployed
(1)Non-GAAP measure, see Schedule 5 for information about this measure.
Quarterly Dividend Declared
As previously announced, subsequent to fiscal year-end, the Company’s Board of Directors (Board of Directors) declared a cash dividend of
Backlog and Contract Awards
Net bookings for the quarter were approximately
SAIC’s estimated backlog at the end of fiscal year 2023 was approximately
SAIC was awarded the following contracts during the quarter:
Notable New Business Awards:
Notable Recompete Awards:
Notable Space and Intelligence Community Awards:
Other
SAIC Cloud Survey Highlights Federal Government’s Challenges and Successes with Multi-Cloud Services and Solutions: SAIC announced findings from an independent survey of defense and civilian federal government employees identifying the current status, challenges and success in implementation and utilization of cloud, DevSecOps and artificial intelligence. Commissioned by and conducted by Market Connections, a portfolio platform of GovExec, the survey polled IT and business influencers and decision makers in the federal government regarding IT and digital services within their agencies.
SAIC Receives Big Innovation Award for Counter Unmanned Aerial Systems: SAIC was named a 2023 Business Intelligence Group’s (BIG) Innovation Award Winner for its Counter Unmanned Aerial Systems (CUAS) solution. The annual BIG Innovation Award recognizes organizations, products and people that bring new ideas to life in innovative ways. SAIC’s CUAS was developed to safeguard against the threats drones pose to defense and civilian infrastructures using CUAS architectures comprised of sensors and effectors within scalable, platform-agnostic command and control capabilities.
Agreement to Sell Logistics & Supply Chain Management Business
On
Forfeiture Support Associates Joint Venture
Effective on
Fiscal Year 2024 Guidance
The Company's outlook for fiscal year 2024 is being provided. The table below summarizes fiscal year 2024 guidance and represents our views as of
|
PRIOR |
Estimated Impacts |
Estimated Impacts |
CURRENT |
|
Fiscal Year |
from L&SCM sale, |
from Operating |
Fiscal Year |
|
2024 Guidance |
FSA, and Section 174 |
Performance |
2024 Guidance |
Revenue |
|
Less |
Plus |
|
Adjusted EBITDA Margin(1) |
~ |
Plus |
- |
|
Adjusted Diluted EPS(1) |
Not Provided |
- |
- |
|
Free Cash Flow(1) |
|
Less |
Plus |
|
(1)Non-GAAP measure, see Schedule 5 for information about this measure |
||||
(2) |
||||
(3)L&SCM divestiture expected to contribute |
||||
(4)Cash taxes primarily due to Section 174 of the Code represents |
Webcast Information
SAIC management will discuss operations and financial results in an earnings conference call beginning at
About SAIC
SAIC® is a premier Fortune 500® technology integrator driving our nation’s technology transformation. Our robust portfolio of offerings across the defense, space, civilian and intelligence markets includes secure high-end solutions in engineering, digital, artificial intelligence and mission solutions. Using our expertise and understanding of existing and emerging technologies, we integrate the best components from our own portfolio and our partner ecosystem to deliver innovative, effective, and efficient solutions that are critical to achieving our customers' missions.
We are approximately 25,000 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
GAAP to Non-GAAP Guidance Reconciliation
The Company does not provide a reconciliation of forward-looking adjusted diluted EPS to GAAP diluted EPS or adjusted EBITDA margin to GAAP net income due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation, including, but not limited to, amortization of acquired intangible assets, acquisition and integration costs, and restructuring and impairment costs. As a result, the Company is not able to forecast GAAP diluted EPS or GAAP net income 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
Schedule 1: | ||||||||||||||||
CONDENSED AND CONSOLIDATED STATEMENTS OF INCOME (Unaudited) |
||||||||||||||||
|
|
Three Months Ended |
|
Year Ended |
||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
(in millions, except per share amounts) |
||||||||||||||
Revenues |
|
$ |
1,968 |
|
|
$ |
1,782 |
|
|
$ |
7,704 |
|
|
$ |
7,394 |
|
Cost of revenues |
|
|
1,746 |
|
|
|
1,585 |
|
|
|
6,816 |
|
|
|
6,535 |
|
Selling, general and administrative expenses |
|
|
102 |
|
|
|
92 |
|
|
|
374 |
|
|
|
344 |
|
Acquisition and integration costs |
|
|
2 |
|
|
|
20 |
|
|
|
13 |
|
|
|
56 |
|
Other operating income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(3 |
) |
Operating income |
|
|
118 |
|
|
|
85 |
|
|
|
501 |
|
|
|
462 |
|
Interest expense |
|
|
33 |
|
|
|
26 |
|
|
|
120 |
|
|
|
105 |
|
Other (income) expense, net |
|
|
— |
|
|
|
2 |
|
|
|
6 |
|
|
|
(1 |
) |
Income before income taxes |
|
|
85 |
|
|
|
57 |
|
|
|
375 |
|
|
|
358 |
|
Provision for income taxes |
|
|
(10 |
) |
|
|
(13 |
) |
|
|
(72 |
) |
|
|
(79 |
) |
Net income |
|
$ |
75 |
|
|
$ |
44 |
|
|
$ |
303 |
|
|
$ |
279 |
|
Net income attributable to non-controlling interest |
|
|
1 |
|
|
|
1 |
|
|
|
3 |
|
|
|
2 |
|
Net income attributable to common stockholders |
|
$ |
74 |
|
|
$ |
43 |
|
|
$ |
300 |
|
|
$ |
277 |
|
Weighted-average number of shares outstanding: |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
|
54.6 |
|
|
|
56.8 |
|
|
|
55.3 |
|
|
|
57.6 |
|
Diluted |
|
|
55.3 |
|
|
|
57.4 |
|
|
|
55.8 |
|
|
|
58.1 |
|
Earnings per share: |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
$ |
1.36 |
|
|
$ |
0.76 |
|
|
$ |
5.42 |
|
|
$ |
4.81 |
|
Diluted |
|
$ |
1.34 |
|
|
$ |
0.76 |
|
|
$ |
5.38 |
|
|
$ |
4.77 |
|
Schedule 2: | ||||||
CONDENSED AND CONSOLIDATED BALANCE SHEETS (Unaudited) |
||||||
|
|
|
|
|
||
|
|
(in millions) |
||||
ASSETS |
|
|
|
|
||
Current assets: |
|
|
|
|
||
Cash and cash equivalents |
|
$ |
109 |
|
$ |
106 |
Receivables, net |
|
|
936 |
|
|
1,015 |
Inventory, prepaid expenses and other current assets |
|
|
152 |
|
|
142 |
Total current assets |
|
|
1,197 |
|
|
1,263 |
|
|
|
2,911 |
|
|
2,913 |
Intangible assets, net |
|
|
1,009 |
|
|
1,132 |
Property, plant, and equipment, net |
|
|
92 |
|
|
100 |
Operating lease right of use assets |
|
|
158 |
|
|
209 |
Other assets |
|
|
176 |
|
|
129 |
Total assets |
|
$ |
5,543 |
|
$ |
5,746 |
|
|
|
|
|
||
LIABILITIES AND EQUITY |
|
|
|
|
||
Current liabilities: |
|
|
|
|
||
Accounts payable and accrued liabilities |
|
$ |
767 |
|
$ |
840 |
Accrued payroll and employee benefits |
|
|
328 |
|
|
364 |
Long-term debt, current portion |
|
|
31 |
|
|
148 |
Total current liabilities |
|
|
1,126 |
|
|
1,352 |
Long-term debt, net of current portion |
|
|
2,343 |
|
|
2,370 |
Operating lease liabilities |
|
|
152 |
|
|
192 |
Other long-term liabilities |
|
|
218 |
|
|
203 |
Equity: |
|
|
|
|
||
Total common stockholders' equity |
|
|
1,694 |
|
|
1,619 |
Non-controlling interest |
|
|
10 |
|
|
10 |
Total stockholders' equity |
|
|
1,704 |
|
|
1,629 |
Total liabilities and stockholders' equity |
|
$ |
5,543 |
|
$ |
5,746 |
Schedule 3: | ||||||||||||||||
CONDENSED AND CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) |
||||||||||||||||
|
|
Three Months Ended |
|
Year Ended |
||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
(in millions) |
||||||||||||||
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
||||||||
Net income |
|
$ |
75 |
|
|
$ |
44 |
|
|
$ |
303 |
|
|
$ |
279 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization |
|
|
39 |
|
|
|
42 |
|
|
|
157 |
|
|
|
165 |
|
Amortization of off-market customer contracts |
|
|
(2 |
) |
|
|
(3 |
) |
|
|
(14 |
) |
|
|
(33 |
) |
Amortization of debt issuance costs |
|
|
1 |
|
|
|
1 |
|
|
|
9 |
|
|
|
7 |
|
Deferred income taxes |
|
|
12 |
|
|
|
18 |
|
|
|
(17 |
) |
|
|
59 |
|
Stock-based compensation expense |
|
|
13 |
|
|
|
11 |
|
|
|
48 |
|
|
|
46 |
|
Gain on divestitures |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2 |
) |
Impairment of assets |
|
|
4 |
|
|
|
8 |
|
|
|
4 |
|
|
|
18 |
|
Increase (decrease) resulting from changes in operating assets and liabilities, net of the effect of the acquisitions: |
|
|
|
|
|
|
|
|
||||||||
Receivables |
|
|
123 |
|
|
|
92 |
|
|
|
79 |
|
|
|
(31 |
) |
Inventory, prepaid expenses, and other current assets |
|
|
(17 |
) |
|
|
(14 |
) |
|
|
(10 |
) |
|
|
14 |
|
Other assets |
|
|
1 |
|
|
|
5 |
|
|
|
6 |
|
|
|
(3 |
) |
Accounts payable and accrued liabilities |
|
|
(47 |
) |
|
|
(17 |
) |
|
|
(9 |
) |
|
|
30 |
|
Accrued payroll and employee benefits |
|
|
(68 |
) |
|
|
(35 |
) |
|
|
(36 |
) |
|
|
10 |
|
Operating lease assets and liabilities, net |
|
|
(2 |
) |
|
|
1 |
|
|
|
(3 |
) |
|
|
5 |
|
Other long-term liabilities |
|
|
13 |
|
|
|
(50 |
) |
|
|
15 |
|
|
|
(46 |
) |
Net cash provided by operating activities |
|
|
145 |
|
|
|
103 |
|
|
|
532 |
|
|
|
518 |
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
||||||||
Expenditures for property, plant, and equipment |
|
|
(7 |
) |
|
|
(9 |
) |
|
|
(25 |
) |
|
|
(36 |
) |
Purchases of marketable securities |
|
|
(2 |
) |
|
|
(4 |
) |
|
|
(7 |
) |
|
|
(9 |
) |
Sales of marketable securities |
|
|
1 |
|
|
|
2 |
|
|
|
4 |
|
|
|
6 |
|
Cash paid for acquisitions, net of cash acquired |
|
|
— |
|
|
|
(8 |
) |
|
|
— |
|
|
|
(255 |
) |
Proceeds from divestitures |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
8 |
|
Other |
|
|
(5 |
) |
|
|
(1 |
) |
|
|
(8 |
) |
|
|
(6 |
) |
Net cash used in investing activities |
|
|
(13 |
) |
|
|
(20 |
) |
|
|
(36 |
) |
|
|
(292 |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
||||||||
Dividend payments to stockholders |
|
|
(20 |
) |
|
|
(21 |
) |
|
|
(83 |
) |
|
|
(86 |
) |
Principal payments on borrowings |
|
|
(210 |
) |
|
|
(35 |
) |
|
|
(990 |
) |
|
|
(119 |
) |
Issuances of stock |
|
|
4 |
|
|
|
4 |
|
|
|
16 |
|
|
|
16 |
|
Stock repurchased and retired or withheld for taxes on equity awards |
|
|
(59 |
) |
|
|
(72 |
) |
|
|
(267 |
) |
|
|
(226 |
) |
Proceeds from borrowings |
|
|
210 |
|
|
|
— |
|
|
|
840 |
|
|
|
116 |
|
Debt issuance costs |
|
|
— |
|
|
|
— |
|
|
|
(6 |
) |
|
|
— |
|
Distributions to non-controlling interest |
|
|
(1 |
) |
|
|
(1 |
) |
|
|
(3 |
) |
|
|
(2 |
) |
Net cash used in financing activities |
|
|
(76 |
) |
|
|
(125 |
) |
|
|
(493 |
) |
|
|
(301 |
) |
Net increase (decrease) in cash, cash equivalents and restricted cash |
|
|
56 |
|
|
|
(42 |
) |
|
|
3 |
|
|
|
(75 |
) |
Cash, cash equivalents and restricted cash at beginning of period |
|
|
62 |
|
|
|
157 |
|
|
|
115 |
|
|
|
190 |
|
Cash, cash equivalents and restricted cash at end of period |
|
$ |
118 |
|
|
$ |
115 |
|
|
$ |
118 |
|
|
$ |
115 |
|
Schedule 4: | |||||||||
BACKLOG (Unaudited) |
|||||||||
The estimated value of our total backlog as of the dates presented was: |
|||||||||
|
|
|
|
|
|
|
|||
|
|
(in millions) |
|||||||
Funded backlog |
|
$ |
3,554 |
|
$ |
4,019 |
|
$ |
3,491 |
Negotiated unfunded backlog |
|
|
20,248 |
|
|
20,413 |
|
|
20,601 |
Total backlog |
|
$ |
23,802 |
|
$ |
24,432 |
|
$ |
24,092 |
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
Schedule 5: | ||||||||||||||||
NON-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, Adjusted EBITDA and Adjusted Operating Income |
||||||||||||||||
|
|
Three Months Ended |
|
Year Ended |
||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
(in millions) |
||||||||||||||
Net income |
|
$ |
75 |
|
|
$ |
44 |
|
|
$ |
303 |
|
|
$ |
279 |
|
Interest expense and loss on sale of receivables |
|
|
37 |
|
|
|
26 |
|
|
|
128 |
|
|
|
107 |
|
Interest income |
|
|
(1 |
) |
|
|
— |
|
|
|
(2 |
) |
|
|
— |
|
Provision for income taxes |
|
|
10 |
|
|
|
13 |
|
|
|
72 |
|
|
|
79 |
|
Depreciation and amortization |
|
|
39 |
|
|
|
42 |
|
|
|
157 |
|
|
|
165 |
|
EBITDA(1) |
|
$ |
160 |
|
|
$ |
125 |
|
|
$ |
658 |
|
|
$ |
630 |
|
EBITDA as a percentage of revenues |
|
|
8.1 |
% |
|
|
7.0 |
% |
|
|
8.5 |
% |
|
|
8.5 |
% |
Acquisition and integration costs |
|
|
2 |
|
|
|
20 |
|
|
|
13 |
|
|
|
56 |
|
Restructuring and impairment costs |
|
|
17 |
|
|
|
1 |
|
|
|
24 |
|
|
|
2 |
|
Depreciation included in acquisition and integration costs and restructuring and impairment costs |
|
|
(2 |
) |
|
|
— |
|
|
|
(3 |
) |
|
|
(1 |
) |
Recovery of acquisition and integration costs and restructuring and impairment costs |
|
|
(6 |
) |
|
|
— |
|
|
|
(12 |
) |
|
|
(1 |
) |
Adjusted EBITDA(1) |
|
$ |
171 |
|
|
$ |
146 |
|
|
$ |
680 |
|
|
$ |
686 |
|
Adjusted EBITDA as a percentage of revenues |
|
|
8.7 |
% |
|
|
8.2 |
% |
|
|
8.8 |
% |
|
|
9.3 |
% |
|
|
|
|
|
|
|
|
|
||||||||
Operating income |
|
$ |
118 |
|
|
$ |
85 |
|
|
$ |
501 |
|
|
$ |
462 |
|
Operating income as a percentage of revenues |
|
|
6.0 |
% |
|
|
4.8 |
% |
|
|
6.5 |
% |
|
|
6.2 |
% |
Acquisition and integration costs |
|
|
2 |
|
|
|
20 |
|
|
|
13 |
|
|
|
56 |
|
Restructuring and impairment costs |
|
|
17 |
|
|
|
1 |
|
|
|
24 |
|
|
|
2 |
|
Recovery of acquisition and integration costs and restructuring and impairment costs |
|
|
(6 |
) |
|
|
— |
|
|
|
(12 |
) |
|
|
(1 |
) |
Adjusted operating income(1) |
|
$ |
131 |
|
|
$ |
106 |
|
|
$ |
526 |
|
|
$ |
519 |
|
Adjusted operating income as a percentage of revenues |
|
|
6.7 |
% |
|
|
5.9 |
% |
|
|
6.8 |
% |
|
|
7.0 |
% |
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 and adjusted operating income are performance measures that exclude acquisition and integration costs, impairments, restructuring costs, and any other material non-recurring costs 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 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. 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 5 (continued): | ||||||||||||||||
NON-GAAP FINANCIAL MEASURES (Unaudited) |
||||||||||||||||
Adjusted diluted earnings per share |
||||||||||||||||
|
|
Three Months Ended |
|
Year Ended |
||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per share |
|
$ |
1.34 |
|
|
$ |
0.76 |
|
|
$ |
5.38 |
|
|
$ |
4.77 |
|
|
|
|
|
|
|
|
|
|
||||||||
Acquisition and integration costs and restructuring and impairment costs, divided by diluted 'weighted-average number of shares outstanding' (WASO) |
|
|
0.24 |
|
|
|
0.36 |
|
|
|
0.45 |
|
|
|
0.98 |
|
Tax effect of acquisition and integration costs and restructuring and impairment costs, divided by diluted WASO |
|
|
(0.03 |
) |
|
|
(0.07 |
) |
|
|
(0.09 |
) |
|
|
(0.19 |
) |
Net effect of acquisition and integration costs and restructuring and impairment costs, divided by diluted WASO |
|
|
0.21 |
|
|
|
0.29 |
|
|
|
0.36 |
|
|
|
0.79 |
|
|
|
|
|
|
|
|
|
|
||||||||
Amortization of intangible assets, divided by diluted WASO |
|
|
0.56 |
|
|
|
0.59 |
|
|
|
2.24 |
|
|
|
2.20 |
|
Tax effect of amortization of intangible assets, divided by diluted WASO |
|
|
(0.07 |
) |
|
|
(0.14 |
) |
|
|
(0.43 |
) |
|
|
(0.49 |
) |
Net effect of amortization of intangible assets, divided by diluted WASO |
|
|
0.49 |
|
|
|
0.45 |
|
|
|
1.81 |
|
|
|
1.71 |
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted diluted earnings per share(1) |
|
$ |
2.04 |
|
|
$ |
1.50 |
|
|
$ |
7.55 |
|
|
$ |
7.27 |
|
Adjusted diluted earnings per share is a performance measure that excludes acquisition and integration costs, impairments, restructuring costs, and any other material non-recurring costs 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 acquisition and integration costs and restructuring and impairment costs are net of the portion of 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. 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 5 (continued): | ||||||||||||||||
NON-GAAP FINANCIAL MEASURES (Unaudited) |
||||||||||||||||
Free Cash Flow |
||||||||||||||||
|
|
Three Months Ended |
|
Year Ended |
||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
(in millions) |
||||||||||||||
Net cash provided by operating activities |
|
$ |
145 |
|
|
$ |
103 |
|
|
$ |
532 |
|
|
$ |
518 |
|
Expenditures for property, plant, and equipment |
|
|
(7 |
) |
|
|
(9 |
) |
|
|
(25 |
) |
|
|
(36 |
) |
Cash used (provided) by MARPA Facility |
|
|
10 |
|
|
|
— |
|
|
|
(50 |
) |
|
|
(15 |
) |
Free cash flow(1) |
|
$ |
148 |
|
|
$ |
94 |
|
|
$ |
457 |
|
|
$ |
467 |
|
|
|
FY24 Guidance |
|
|
(in millions) |
Net cash provided by operating activities |
|
|
Expenditures for property, plant, and equipment |
|
Approximately |
Free cash flow(1) |
|
|
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
(1)Non-GAAP measure, see above for definition.
View source version on businesswire.com: https://www.businesswire.com/news/home/20230403005056/en/
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