- Net bookings of $2.0 billion resulting in a book-to-bill of
1.1x in the quarter
- Revenues of $1.91 billion; 1% revenue growth
- Diluted earnings per share: $1.45; Adjusted diluted earnings
per share(1): $1.90
- Company increases revenue and adjusted diluted EPS(1)
guidance for fiscal year 2023
Science Applications International Corporation (NYSE: 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 third quarter
ended October 28, 2022.
“Our results reflect continued strong
performance from the team with notable momentum in new business
capture and on-contract growth,” said SAIC CEO Nazzic Keene. “We
are confident that the investments we are making - both internally
and via our capital deployment program - are aligned with
maximizing long-term shareholder value. This is our focus and will
allow us to provide opportunities to grow for our incredibly
talented employees while delivering excellence to our
customers.”
Third Quarter of Fiscal Year 2023:
Summary Operating Results
Three Months Ended
Nine Months Ended
October 28,
2022
Percent
change
October 29, 2021
October 28,
2022
Percent
change
October 29, 2021
(in millions, except per share
amounts)
Revenues
$
1,909
1
%
$
1,898
$
5,736
2
%
$
5,612
Operating income
133
17
%
114
383
2
%
377
Operating income as a percentage of
revenues
7.0
%
100 bps
6.0
%
6.7
%
— bps
6.7
%
Adjusted operating income(1)
136
8
%
126
395
(4
)%
413
Adjusted operating income as a percentage
of revenues
7.1
%
50 bps
6.6
%
6.9
%
-50 bps
7.4
%
Net income attributable to common
stockholders
80
13
%
71
226
(3
)%
234
EBITDA(1)
168
6
%
159
498
(1
)%
505
EBITDA as a percentage of revenues
8.8
%
40 bps
8.4
%
8.7
%
-30 bps
9.0
%
Adjusted EBITDA(1)
170
(1
)%
171
509
(6
)%
540
Adjusted EBITDA as a percentage of
revenues
8.9
%
-10 bps
9.0
%
8.9
%
-70 bps
9.6
%
Diluted earnings per share
$
1.45
19
%
$
1.22
$
4.04
1
%
$
4.01
Adjusted diluted earnings per share(1)
$
1.90
3
%
$
1.85
$
5.53
(4
)%
$
5.76
Net cash provided by operating
activities
$
128
(4
)%
$
134
$
387
(7
)%
$
415
Free cash flow(1)
$
122
(2
)%
$
124
$
309
(17
)%
$
373
(1)Non-GAAP measure, see Schedule 5 for information about this
measure.
Third Quarter Summary
Results
Revenues for the quarter increased $11 million or 1% compared to
the same period in the prior year primarily due to ramp up on new
and existing contracts, partially offset by contract completions
and lower accelerated amortization on certain off-market liability
contracts.
Operating income as a percentage of revenues increased from the
comparable prior year period primarily due to lower acquisition and
integration costs and indirect costs, partially offset by lower
accelerated amortization on certain off-market liability
contracts.
Adjusted EBITDA(1) as a percentage of revenues for the quarter
decreased to 8.9% from 9.0% for the same period in the prior year
primarily due to lower revenue resulting from accelerated
amortization on certain off-market liability contracts and net
unfavorable changes in contract estimates, partially offset by
lower indirect costs.
Diluted earnings per share for the quarter was $1.45 compared to
$1.22 in the prior year quarter. Adjusted diluted earnings per
share(1) for the quarter was $1.90 compared to $1.85 in the prior
year quarter. The weighted-average diluted shares outstanding
during the quarter decreased to 55.5 million from 58.0 million
during the prior year quarter.
Cash Generation and Capital
Deployment
Cash flows provided by operating activities for the third
quarter were $128 million, a decrease of $6 million compared to the
prior year quarter, primarily due to the timing of customer
collections and other changes in working capital, partially offset
by the first installment of the deferred payroll taxes allowed
under the CARES Act paid in the prior year.
Free cash flow(1) for the third quarter decreased by $2 million
from the prior year quarter to $122 million, primarily due to the
timing of customer collections and other changes in working
capital, partially offset by the first installment of the deferred
payroll taxes allowed under the CARES Act paid in the prior
year.
During the quarter, SAIC deployed $86 million of capital,
consisting of $59 million of plan share repurchases, $21 million in
cash dividends, and $6 million of capital expenditures. In
addition, SAIC made $90 million of voluntary debt repayments during
the quarter.
(1)Non-GAAP measure, see Schedule 5 for information about this
measure.
Quarterly Dividend
Declared
As previously announced, subsequent to the end of the quarter,
the Company's Board of Directors declared a cash dividend of $0.37
per share of the Company's common stock payable on January 27, 2023
to stockholders of record on January 13, 2023. 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 $2.0 billion,
which reflects a book-to-bill ratio of 1.1 and a trailing twelve
months book-to-bill ratio of 1.1. SAIC’s estimated backlog at the
end of the quarter was approximately $24.4 billion. Of the total
backlog amount, approximately $4.0 billion was funded.
Notable New Business Awards:
U.S. Army Space and Missile Defense Command: SAIC was
awarded a $208 million Scenarios Training Operation Research and
Modeling and Simulation (STORMS) contract by the U.S. Army Space
and Missile Defense Command (USASMDC) to assist in the areas of
space, space control, high altitude, air and missile defense, and
associated cyberspace operations. Under this task order, SAIC will
provide studies and analysis associated with campaign and
theater-level modeling and simulation development, sustainment and
execution as well as data mining.
Notable Recompete Awards:
U.S. Army Space and Missile Defense Command: SAIC was
awarded a follow-on contract Decision Support Division (DSD)
Integrated Air Missile and Network Defense and Space Support
(DIAMNDSS) III valued at $181 million. Under the task order, SAIC
will continue to provide system utility analysis and combat
development in support of the warfighter through analysis,
execution experiments, exercises and war games, and modeling and
simulation development and integration support.
Notable Space and Intelligence Community Awards:
U.S. Space and Intelligence Community: SAIC was awarded
approximately $950 million of contract awards by space and
intelligence community organizations during the quarter. These
awards represent a combination of new business and recompetes.
SAIC was awarded the following contracts subsequent to the end
of the quarter which are not included in the current quarter net
bookings and book-to-bill:
U.S. Army Enterprise Service Desk: SAIC was awarded a
contract to continue providing software development and management
services for the U.S. Army Enterprise Service Desk (AESD). The
single-award contract has an estimated ceiling value of $757
million. Under this contract, SAIC will continue existing AESD
operations, optimize Army Enterprise Service Management Framework
(AESMF) service delivery processes, and expand the functionality
provided by the software as a service (SaaS) environment via
optional capabilities. SAIC will also migrate legacy IT service
management systems to a modern IT Service Management platform using
ServiceNow®. Additionally, SAIC will provide service desk solutions
to include service desk support for voice, messaging, video
teleconferencing, computing, network infrastructure, customer
support and information assurance support to the Army.
Other Notable News
SAIC Recognized for Commitment to Hiring Veterans: SAIC
has received multiple acknowledgments for its commitment to
military veterans, including being named on Forbes list of 2022
America’s Best Employers for Veterans. Additionally, SAIC ranked #7
on the Military.com list of Top 25 Veteran Employers and was
recently recognized as a first-time recipient of the Gold HIRE Vets
Medallion Award from the Department of Labor (DOL). "One out of
four of our employees are veterans, who selflessly answered the
call to serve our nation,” said Nazzic Keene, Chief Executive
Officer at SAIC. “We are honored to receive recognition from Forbes
and the Department of Labor for our commitment to military veterans
and their families. I am thankful for our veterans that continue
their service to our nation, bringing their exceptional talent and
experiences to support our customers.”
SAIC Raises More Than $350,000 to Help Address Food
Insecurity During Hunger Action Month: SAIC announced the
Company raised more than $350,000, equivalent to more than 3.5
million meals, to combat food insecurity during Hunger Action Month
in September. Through SAIC’s partnership with Feeding America®,
SAIC’s contribution will provide meals to people in need, address
food waste and promote awareness of the issue of hunger in
America.
SAIC to Provide $1.5 Million to Alabama School of Cyber
Technology and Engineering: SAIC announced a $1.5 million
commitment to the Alabama School of Cyber Technology and
Engineering (ASCTE) towards the school’s mission of educating the
cyber technology and engineering workforce of the future. ASCTE is
one of Alabama’s leading magnet schools in the fields of science,
technology, engineering and math (STEM) education. “We are eager to
invest in future SAIC leaders from Alabama,” said Greg Fortier,
vice president of the Army Fires, Aviation and Missile Defense
Operation at SAIC. “For more than 50 years, SAIC has been a staunch
advocate and supporter of schools like the Alabama School of Cyber
Technology and Engineering. Our commitment ensures students have
access to programs and tools that will position them to become
skilled leaders in the field of science, technology, engineering
and math.”
SAIC Named to Advanced Battle Management System Digital
Infrastructure Consortium: SAIC has been named to the Advanced
Battle Management System (ABMS) Digital Infrastructure Consortium
developing digital capabilities that enable multi-domain operations
for the Air Force, Space Force, and Joint Force. ABMS will
accelerate the fielding of new battle management capabilities,
utilizing the best industry has to offer to enable our joint and
coalition forces to counter the evolving threat. As part of the
Digital Infrastructure Consortium, SAIC will collaborate with other
members to integrate modern capabilities leveraging digital
engineering. These modern capabilities will become the foundation
for the Department of the Air Force’s contribution to the JADC2
concept.
Fiscal Year 2023
Guidance
The table below summarizes fiscal year 2023 guidance and
represents our views as of December 5, 2022.
Current Fiscal Year
Prior Fiscal Year
2023 Guidance
2023 Guidance
Revenue
Approximately $7.6 billion
$7.50 billion to $7.55
billion
Adjusted EBITDA Margin(1)
Approximately 8.9%
Approximately 8.9%
Adjusted Diluted EPS(1)
$7.05 to $7.20
$7.00 to $7.20
Free Cash Flow(1)
$500 million to $520 million
$500 million to $530 million
(1)Non-GAAP measure, see Schedule 5 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
December 5, 2022. The conference call will be webcast
simultaneously to the public through a link on the Investor
Relations section of the SAIC website (http://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 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 26,000 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.
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 and acquisition, integration and
restructuring 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.
(1)Non-GAAP measure, see Schedule 5 for information about this
measure.
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 CORPORATION
CONDENSED AND CONSOLIDATED
STATEMENTS OF INCOME
(Unaudited)
Three Months Ended
Nine Months Ended
October 28,
2022
October 29, 2021
October 28,
2022
October 29, 2021
(in millions, except per share
amounts)
Revenues
$
1,909
$
1,898
$
5,736
$
5,612
Cost of revenues
1,688
1,685
5,070
4,950
Selling, general and administrative
expenses
87
87
272
252
Acquisition and integration costs
1
12
11
36
Other operating income
—
—
—
(3
)
Operating income
133
114
383
377
Interest expense
30
26
87
79
Other (income) expense, net
3
—
6
(3
)
Income before income taxes
100
88
290
301
Provision for income taxes
(20
)
(17
)
(62
)
(66
)
Net income
$
80
$
71
$
228
$
235
Net income attributable to non-controlling
interest
—
—
2
1
Net income attributable to common
stockholders
$
80
$
71
$
226
$
234
Weighted-average number of shares
outstanding:
Basic
55.0
57.5
55.6
57.8
Diluted
55.5
58.0
56.0
58.4
Earnings per share:
Basic
$
1.45
$
1.24
$
4.06
$
4.05
Diluted
$
1.45
$
1.22
$
4.04
$
4.01
Schedule 2:
SCIENCE APPLICATIONS
INTERNATIONAL CORPORATION
CONDENSED AND CONSOLIDATED
BALANCE SHEETS
(Unaudited)
October 28,
2022
January 28, 2022
(in millions)
ASSETS
Current assets:
Cash and cash equivalents
$
53
$
106
Receivables, net
1,059
1,015
Inventory, prepaid expenses and other
current assets
135
142
Total current assets
1,247
1,263
Goodwill
2,911
2,913
Intangible assets, net
1,040
1,132
Property, plant, and equipment, net
95
100
Operating lease right of use assets
166
209
Other assets
169
129
Total assets
$
5,628
$
5,746
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued
liabilities
$
819
$
840
Accrued payroll and employee benefits
396
364
Long-term debt, current portion
15
148
Total current liabilities
1,230
1,352
Long-term debt, net of current portion
2,358
2,370
Operating lease liabilities
155
192
Other long-term liabilities
189
203
Equity:
Total common stockholders' equity
1,686
1,619
Non-controlling interest
10
10
Total stockholders' equity
1,696
1,629
Total liabilities and stockholders'
equity
$
5,628
$
5,746
Schedule 3:
SCIENCE APPLICATIONS
INTERNATIONAL CORPORATION
CONDENSED AND CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
Nine Months Ended
October 28,
2022
October 29, 2021
October 28,
2022
October 29, 2021
(in millions)
Cash flows from operating activities:
Net income
$
80
$
71
$
228
$
235
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
37
44
118
123
Amortization of off-market customer
contracts
(6
)
(13
)
(12
)
(30
)
Amortization of debt issuance costs
2
2
8
6
Deferred income taxes
(7
)
10
(29
)
41
Stock-based compensation expense
12
11
35
35
Gain on divestitures
—
—
—
(2
)
Impairment of assets
—
—
—
10
Increase (decrease) resulting from changes
in operating assets and liabilities, net of the effect of
acquisitions:
Receivables
(23
)
(43
)
(44
)
(123
)
Inventory, prepaid expenses and other
current assets
—
18
7
28
Other assets
—
—
5
(8
)
Accounts payable and accrued
liabilities
(50
)
5
(21
)
47
Accrued payroll and employee benefits
59
25
32
45
Income taxes payable
23
—
59
—
Operating lease assets and liabilities,
net
(1
)
1
(1
)
4
Other long-term liabilities
2
3
2
4
Net cash provided by operating
activities
128
134
387
415
Cash flows from investing activities:
Expenditures for property, plant, and
equipment
(6
)
(10
)
(18
)
(27
)
Purchases of marketable securities
(1
)
(2
)
(5
)
(5
)
Sales of marketable securities
1
2
3
4
Cash paid for acquisitions, net of cash
acquired
—
(3
)
—
(247
)
Proceeds from divestitures
—
—
—
8
Other
—
(3
)
(3
)
(5
)
Net cash used in investing activities
(6
)
(16
)
(23
)
(272
)
Cash flows from financing activities:
Dividend payments to stockholders
(21
)
(21
)
(63
)
(65
)
Principal payments on borrowings
(205
)
(23
)
(780
)
(84
)
Issuances of stock
4
4
12
12
Stock repurchased and retired or withheld
for taxes on equity awards
(60
)
(63
)
(208
)
(154
)
Proceeds from borrowings
115
—
630
116
Debt issuance costs
(1
)
—
(6
)
—
Distributions to non-controlling
interest
—
—
(2
)
(1
)
Net cash used in financing activities
(168
)
(103
)
(417
)
(176
)
Net (decrease) increase in cash, cash
equivalents and restricted cash
(46
)
15
(53
)
(33
)
Cash, cash equivalents and restricted cash
at beginning of period
108
142
115
190
Cash, cash equivalents and restricted cash
at end of period
$
62
$
157
$
62
$
157
Schedule 4:
SCIENCE APPLICATIONS
INTERNATIONAL CORPORATION
BACKLOG
(Unaudited)
The estimated value of our total backlog
as of the dates presented was:
October 28,
2022
July 29, 2022
January 28, 2022
(in millions)
Funded backlog
$
4,019
$
3,630
$
3,491
Negotiated unfunded backlog
20,413
$
20,695
20,601
Total backlog
$
24,432
$
24,325
$
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 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.
Schedule 5:
SCIENCE APPLICATIONS INTERNATIONAL
CORPORATION 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
Nine Months Ended
October 28,
2022
October 29, 2021
October 28,
2022
October 29, 2021
(in millions)
Net income
$
80
$
71
$
228
$
235
Interest expense and loss on sale of
receivables
32
27
91
81
Interest income
(1
)
—
(1
)
—
Provision for income taxes
20
17
62
66
Depreciation and amortization
37
44
118
123
EBITDA(1)
168
159
498
505
EBITDA as a percentage of revenues
8.8
%
8.4
%
8.7
%
9.0
%
Acquisition and integration costs
1
12
11
36
Restructuring and impairment costs
5
1
7
1
Depreciation included in acquisition and
integration costs and restructuring and impairment costs
(1
)
—
(1
)
(1
)
Recovery of acquisition and integration
costs and restructuring and impairment costs
(3
)
(1
)
(6
)
(1
)
Adjusted EBITDA(1)
$
170
$
171
$
509
$
540
Adjusted EBITDA as a percentage of
revenues
8.9
%
9.0
%
8.9
%
9.6
%
Operating income
$
133
$
114
$
383
$
377
Operating income as a percentage of
revenues
7.0
%
6.0
%
6.7
%
6.7
%
Acquisition and integration costs
1
12
11
36
Restructuring and impairment costs
5
1
7
1
Recovery of acquisition and integration
costs and restructuring and impairment costs
(3
)
(1
)
(6
)
(1
)
Adjusted operating income(1)
$
136
$
126
$
395
$
413
Adjusted operating income as a percentage
of revenues
7.1
%
6.6
%
6.9
%
7.4
%
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 of Halfaker, Koverse,
and Unisys Federal. 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):
SCIENCE APPLICATIONS
INTERNATIONAL CORPORATION
NON-GAAP FINANCIAL
MEASURES
(Unaudited)
Adjusted Diluted
Earnings Per Share
Three Months Ended
Nine Months Ended
October 28,
2022
October 29, 2021
October 28,
2022
October 29, 2021
Diluted earnings per share
$
1.45
$
1.22
$
4.04
$
4.01
Acquisition and integration costs and
restructuring and impairment costs, divided by diluted
'weighted-average number of shares outstanding' (WASO)
0.05
0.21
0.21
0.62
Tax effect of acquisition and integration
costs and restructuring and impairment costs, divided by diluted
WASO
(0.01
)
(0.04
)
(0.04
)
(0.12
)
Net effect of acquisition and integration
costs and restructuring and impairment costs, divided by diluted
WASO
0.04
0.17
0.17
0.50
Amortization of intangible assets, divided
by diluted WASO
0.52
0.57
1.68
1.61
Tax effect of amortization of intangible
assets, divided by diluted WASO
(0.11
)
(0.11
)
(0.36
)
(0.36
)
Net effect of amortization of intangible
assets, divided by diluted WASO
0.41
0.46
1.32
1.25
Adjusted diluted earnings per
share(1)
$
1.90
$
1.85
$
5.53
$
5.76
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 of Halfaker, Koverse, and Unisys Federal.
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):
SCIENCE APPLICATIONS
INTERNATIONAL CORPORATION
NON-GAAP FINANCIAL
MEASURES
(Unaudited)
Free Cash
Flow
Three Months Ended
Nine Months Ended
October 28,
2022
October 29, 2021
October 28,
2022
October 29, 2021
(in millions)
Net cash provided by operating
activities
$
128
$
134
$
387
$
415
Expenditures for property, plant, and
equipment
(6
)
(10
)
(18
)
(27
)
Cash used (provided) by MARPA Facility
—
—
(60
)
(15
)
Free cash flow(1)
$
122
$
124
$
309
$
373
FY23 Guidance
(in millions)
Net cash provided by operating
activities
$535 to $555
Expenditures for property, plant, and
equipment
Approximately $35
Free cash flow(1)
$500 to $520
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. We believe that 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 a similar non-GAAP liquidity
measure. This measure should not be considered as a measure of
residual cash flow available for discretionary purposes.
(1)Non-GAAP measure, see above for definition.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221205005070/en/
Investor Relations: Joe DeNardi, +1.703.488.8528,
joseph.w.denardi@saic.com Media: Thais Hanson, +1.703.676.8215,
publicrelations@saic.com
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