- Net bookings of $2.1 billion resulting in a book-to-bill of
1.1x in the quarter and 1.0x TTM
- Revenues of $1.83 billion, approximately flat with prior
year
- Diluted earnings per share: $1.30; Adjusted diluted earnings
per share(1): $1.75
- 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 second
quarter ended July 29, 2022.
“I am proud of the results we delivered in
the quarter and fiscal year to date which contribute to our
improved outlook for the year,” said SAIC CEO Nazzic Keene. “The
investments we have made to build differentiated solutions in the
areas of Secure Cloud and Systems Integration position us well to
gain share in a growing market. Our focus remains on converting a
strong pipeline of opportunities into sustained, profitable growth
and increased value for our shareholders.”
Second Quarter of Fiscal Year 2023:
Summary Operating Results
Three Months Ended
Six Months Ended
July 29,
2022
Percent
change
July 30,
2021
July 29,
2022
Percent
change
July 30,
2021
(in millions, except per share
amounts)
Revenues
$
1,831
—
%
$
1,836
$
3,827
3
%
$
3,714
Operating income
125
(6
)%
133
250
(5
)%
263
Operating income as a percentage of
revenues
6.8
%
-40 bps
7.2
%
6.5
%
-60 bps
7.1
%
Adjusted operating income(1)
125
(15
)%
147
259
(10
)%
287
Adjusted operating income as a percentage
of revenues
6.8
%
-120 bps
8.0
%
6.8
%
-90 bps
7.7
%
Net income attributable to common
stockholders
73
(11
)%
82
146
(10
)%
163
EBITDA(1)
166
(3
)%
171
330
(5
)%
346
EBITDA as a percentage of revenues
9.1
%
-20 bps
9.3
%
8.6
%
-70 bps
9.3
%
Adjusted EBITDA(1)
166
(10
)%
185
339
(8
)%
369
Adjusted EBITDA as a percentage of
revenues
9.1
%
-100 bps
10.1
%
8.9
%
-100 bps
9.9
%
Diluted earnings per share
$
1.30
(8
)%
$
1.41
$
2.59
(7
)%
$
2.79
Adjusted diluted earnings per share(1)
$
1.75
(11
)%
$
1.97
$
3.62
(8
)%
$
3.92
Net cash provided by operating
activities
$
141
53
%
$
92
$
259
(8
)%
$
281
Free cash flow(1)
$
74
(13
)%
$
85
$
187
(25
)%
$
249
(1)Non-GAAP measure, see Schedule 5 for information about this
measure.
Second Quarter Summary
Results
Revenues for the quarter decreased $5 million compared to the
same period in the prior year primarily due to contract
completions, one fewer working day compared to the prior year
period, lower net favorable changes in contract estimates, and
higher accelerated amortization on certain off-market liability
contracts during the prior year period, partially offset by ramp up
on new and existing contracts and the acquisition of Halfaker
(approximately $30 million). Adjusting for the impact of acquired
and divested revenues, revenues contracted 1.8%.
Operating income as a percentage of revenues decreased from the
comparable prior year period primarily due to lower net favorable
changes in contract estimates, higher accelerated amortization on
certain off-market liability contracts during the prior year
period, and higher indirect costs in the current year period,
partially offset by lower acquisition and integration costs and
higher benefit from net favorable settlement of prior indirect rate
years in the current year period.
Adjusted EBITDA(1) as a percentage of revenues for the quarter
decreased to 9.1% from 10.1% for the same period in the prior year
primarily due to lower net favorable changes in contract estimates,
higher revenue resulting from accelerated amortization on certain
off-market liability contracts during the prior year period, and
higher indirect costs in the current year period, partially offset
by higher benefit from net favorable settlement of prior indirect
rate years in the current year period.
Diluted earnings per share for the quarter was $1.30 compared to
$1.41 in the prior year quarter. Adjusted diluted earnings per
share(1) for the quarter was $1.75 compared to $1.97 in the prior
year quarter. The weighted-average diluted shares outstanding
during the quarter decreased to 55.9 million from 58.4 million
during the prior year quarter.
Cash Generation and Capital
Deployment
Cash flows provided by operating activities for the second
quarter were $141 million, an increase of $49 million compared to
the prior year quarter, primarily due to higher cash provided by
the MARPA Facility, partially offset by timing of customer
collections.
Free cash flow(1) for the second quarter decreased by $11
million from the prior year quarter to $74 million, primarily due
to timing of customer collections.
During the quarter, SAIC deployed $89 million of capital,
consisting of $62 million of plan share repurchases, $20 million in
cash dividends, and $7 million of capital expenditures.
Debt Refinancing
During the quarter, SAIC executed a successful refinancing of
its Credit Agreement, consolidating some existing loans into an
upsized $1.23 billion 5-year Term Facility maturing June 2027 and
increasing the Revolving Credit Commitment from $400 million to
$1.0 billion. The refinancing reduced the applicable interest rate
margins under the Term Facility to a range from 0.75% to 1.75% per
annum for SOFR loans, resulting in initial interest savings of
0.50%. Incremental proceeds of $400 million of were used to repay a
portion of the higher interest rate Term Loan B Facility due
October 2025. The transaction was recognized by Bloomberg for the
inclusion of three minority-owned banks that joined SAIC’s
syndicated bank group and committed capital to the refinancing.
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 October 28, 2022
to stockholders of record on October 14, 2022. 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.
(1)Non-GAAP measure, see Schedule 5 for information about this
measure.
Backlog and Contract
Awards
Net bookings for the quarter were approximately $2.1 billion,
which reflects a book-to-bill ratio of 1.1 and a trailing twelve
months book-to-bill ratio of 1.0. SAIC’s estimated backlog at the
end of the quarter was approximately $24.3 billion. Of the total
backlog amount, approximately $3.6 billion was funded.
Notable New Business Awards:
Air Force Air Operations Center: SAIC was awarded a $319
million Falconer Air Operations Center (AOC) Weapon System
Sustainment contract by the U.S. Air Force. The Falconer program
assists Air Force component commanders in planning, directing, and
assessing air, space, and cyberspace operations. The AOC ingests,
analyzes, and disseminates command, control, and intelligence data
to support operations.
U.S. Army Forces Command G-2 Intelligence: SAIC has been
awarded a $200 million single-award task order by the U.S. Army to
conduct research, analysis, and assessments for the Forces Command
(FORSCOM) G-2-Intelligence, Intelligence Warfighting Function
(IWF). Under this task order, SAIC will develop and provide
valuable training and recommend readiness procedures to increase
the timeliness and accuracy of intelligence, weather and security
for the warfighter and mission commanders.
U.S. Navy: SAIC was awarded a $163 million contract by
the U.S. Navy to support design, development, integration,
modernization, sustainment and life cycle support to shore
networks, network components and network service solutions for the
Naval Information Warfare Center (NIWC) Pacific Shore Networks
Branch located in San Diego, CA. Under the contract, SAIC will
maintain Naval Enterprise Networks for all shore based U.S. Navy
commands and personnel critical to the Navy’s day-to-day
operations, as well as supporting command and control of U.S. Navy
units deployed by operational commanders.
Notable Recompete Awards:
U.S. Department of State: SAIC was awarded a contract
extension, valued at $104 million, to continue providing
engineering and design services, security, and operation and
maintenance services for critical IT infrastructure.
Notable Space and Intelligence Community Awards:
U.S. Space and Intelligence Community: SAIC was awarded
approximately $400 million of contract awards by space and
intelligence community organizations which excludes the AOC
Falconer program mentioned previously. These awards represent a
combination of new business and recompetes.
Other Notable News
SAIC Publishes 3rd Annual Corporate Responsibility
Report: SAIC has published its 3rd annual Corporate
Responsibility Report, highlighting the Company’s ongoing
commitment to improving our world, communities and people’s lives.
The report features continued progress in areas such as reducing
energy consumption and greenhouse gas emissions, elevating the
Company’s commitment to leadership and workforce diversity,
expanding workplace flexibility, and focusing philanthropy in three
areas important to the Company: military heroes; community
wellness; and science, technology, engineering and mathematics
(STEM) efforts. Similar to previous reports, the current
publication is accompanied by SAIC’s response to the Global
Reporting Index (GRI). Reflecting the Company’s continued progress,
this year’s response is expanded to include the Company’s first
Taskforce on Climate-related Financial Disclosure (TCFD) report as
well as an ESG Reporting Framework and Standards Index, which has
been prepared in accordance with the GRI, the Sustainability
Accounting Standards Board (SASB), and the United Nations
Sustainable Development Goals (UN SDGs).
SAIC Ranked #1 in Gartner Market Share: Gartner’s new
Market Share report on IT services ranked SAIC as the #1 provider
by revenue of IT services to the U.S. government in two categories:
application managed services and infrastructure implementation and
managed services. This is the second consecutive year the Company
was ranked #1 for application managed services. Additionally
Gartner’s report also ranked SAIC as the #2 provider of application
implementation and managed services, and for the second year in a
row #3 for technology consulting, and the #3 overall IT services
provider by revenue in all segments for the U.S. government.
SAIC Donated $100,000 to Fund Alabama A&M University
Scholarship: SAIC has made a $100,000 scholarship donation in
partnership with Alabama A&M University. This year’s donation
will finance the education of two incoming freshmen pursuing a
career in the historically Black university’s College of
Engineering, Technology and Physical Sciences in Huntsville,
Alabama. This is the first year SAIC has worked alongside Alabama
A&M to provide opportunities for passionate and driven students
to pursue opportunities through the College of Engineering,
Technology and Physical Sciences (CETPS) and the AAMU-RISE
Foundation, which facilitates research and development efforts with
the school, industry and government partners.
Koverse, an SAIC Company, Introduces Zero Trust Data
Platform: Koverse, Inc., an SAIC company, announced
availability of Koverse Data Platform (KDP) 4.0, a security-first
data platform that introduces attribute-based access controls
(ABAC) to enforce Zero Trust for data, allowing customers to safely
work with complex and sensitive information to power the most
demanding analytics, data science, and AI use cases. KDP 4.0
creates an incredibly flexible, unified security model across data
at the dataset and record level, increasing the value and
utilization of all data within an organization, particularly of
mixed sensitivities, by delivering fine-grained control to ensure
authorized use.
Fiscal Year 2023
Guidance
The table below summarizes fiscal year 2023 guidance and
represents our views as of September 1, 2022.
Current Fiscal Year
Prior Fiscal Year
2023 Guidance
2023 Guidance
Revenue
$7.50 billion to $7.55
billion
$7.43 billion to $7.55
billion
Adjusted EBITDA Margin(1)
Approximately 8.9%
Approximately 8.9%
Adjusted Diluted EPS(1)
$7.00 to $7.20
$6.90 to $7.20
Free Cash Flow(1)
$500 million to $530 million
$500 million to $530 million
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 1, 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
Six Months Ended
July 29,
2022
July 30,
2021
July 29,
2022
July 30,
2021
(in millions, except per share
amounts)
Revenues
$
1,831
$
1,836
$
3,827
$
3,714
Cost of revenues
1,612
1,604
3,382
3,265
Selling, general and administrative
expenses
93
85
185
165
Acquisition and integration costs
1
14
10
24
Other operating income
—
—
—
(3
)
Operating income
125
133
250
263
Interest expense
30
26
57
53
Other (income) expense, net
—
(1
)
3
(3
)
Income before income taxes
95
108
190
213
Provision for income taxes
(21
)
(26
)
(42
)
(49
)
Net income
$
74
$
82
$
148
$
164
Net income attributable to non-controlling
interest
1
—
2
1
Net income attributable to common
stockholders
$
73
$
82
$
146
$
163
Weighted-average number of shares
outstanding:
Basic
55.6
57.9
55.9
58.0
Diluted
55.9
58.4
56.3
58.5
Earnings per share:
Basic
$
1.31
$
1.42
$
2.61
$
2.81
Diluted
$
1.30
$
1.41
$
2.59
$
2.79
Schedule 2:
SCIENCE APPLICATIONS
INTERNATIONAL CORPORATION
CONDENSED AND CONSOLIDATED
BALANCE SHEETS
(Unaudited)
July 29,
2022
January 28,
2022
(in millions)
ASSETS
Current assets:
Cash and cash equivalents
$
99
$
106
Receivables, net
1,036
1,015
Inventory, prepaid expenses and other
current assets
135
142
Total current assets
1,270
1,263
Goodwill
2,911
2,913
Intangible assets, net
1,069
1,132
Property, plant, and equipment, net
95
100
Operating lease right of use assets
173
209
Other assets
136
129
Total assets
$
5,654
$
5,746
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued
liabilities
$
853
$
840
Accrued payroll and employee benefits
337
364
Long-term debt, current portion
—
148
Total current liabilities
1,190
1,352
Long-term debt, net of current portion
2,462
2,370
Operating lease liabilities
162
192
Other long-term liabilities
187
203
Equity:
Total common stockholders' equity
1,643
1,619
Non-controlling interest
10
10
Total stockholders' equity
1,653
1,629
Total liabilities and stockholders'
equity
$
5,654
$
5,746
Schedule 3:
SCIENCE APPLICATIONS
INTERNATIONAL CORPORATION
CONDENSED AND CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
Six Months Ended
July 29,
2022
July 30,
2021
July 29,
2022
July 30,
2021
(in millions)
Cash flows from operating activities:
Net income
$
74
$
82
$
148
$
164
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
40
37
81
79
Amortization of off-market customer
contracts
(4
)
(13
)
(6
)
(17
)
Amortization of debt issuance costs
4
2
6
4
Deferred income taxes
(24
)
11
(22
)
31
Stock-based compensation expense
12
14
23
24
Loss (gain) on divestitures
—
1
—
(2
)
Impairment of assets
—
3
—
10
Increase (decrease) resulting from changes
in operating assets and liabilities, net of the effect of
acquisitions:
Receivables
68
(19
)
(21
)
(80
)
Inventory, prepaid expenses and other
current assets
(4
)
15
7
10
Other assets
2
(4
)
5
(8
)
Accounts payable and accrued
liabilities
(11
)
(2
)
29
42
Accrued payroll and employee benefits
(58
)
(37
)
(27
)
20
Income taxes payable
37
—
36
—
Operating lease assets and liabilities,
net
4
(2
)
—
3
Other long-term liabilities
1
4
—
1
Net cash provided by operating
activities
141
92
259
281
Cash flows from investing activities:
Expenditures for property, plant, and
equipment
(7
)
(7
)
(12
)
(17
)
Purchases of marketable securities
(2
)
(1
)
(4
)
(3
)
Sales of marketable securities
1
1
2
2
Cash paid for acquisitions, net of cash
acquired
—
(244
)
—
(244
)
Proceeds from divestitures
—
—
—
8
Other
(3
)
(1
)
(3
)
(2
)
Net cash used in investing activities
(11
)
(252
)
(17
)
(256
)
Cash flows from financing activities:
Dividend payments to stockholders
(20
)
(22
)
(42
)
(44
)
Principal payments on borrowings
(516
)
(22
)
(575
)
(61
)
Issuances of stock
4
4
8
8
Stock repurchased and retired or withheld
for taxes on equity awards
(64
)
(38
)
(148
)
(91
)
Proceeds from borrowings
515
100
515
116
Debt issuance costs
(5
)
—
(5
)
—
Distributions to non-controlling
interest
(1
)
—
(2
)
(1
)
Net cash (used in) provided by financing
activities
(87
)
22
(249
)
(73
)
Net increase (decrease) in cash, cash
equivalents and restricted cash
43
(138
)
(7
)
(48
)
Cash, cash equivalents and restricted cash
at beginning of period
65
280
115
190
Cash, cash equivalents and restricted cash
at end of period
$
108
$
142
$
108
$
142
Schedule 4:
SCIENCE APPLICATIONS
INTERNATIONAL CORPORATION
BACKLOG
(Unaudited)
The estimated value of our total backlog
as of the dates presented was:
July 29,
2022
April 29,
2022
January 28,
2022
(in millions)
Funded backlog
$
3,630
$
3,218
$
3,491
Negotiated unfunded backlog
20,695
$
20,894
20,601
Total backlog
$
24,325
$
24,112
$
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
Six Months Ended
July 29,
2022
July 30,
2021
July 29,
2022
July 30,
2021
(in millions)
Net income
$
74
$
82
$
148
$
164
Interest expense and loss on sale of
receivables
31
26
59
54
Provision for income taxes
21
26
42
49
Depreciation and amortization
40
37
81
79
EBITDA(1)
166
171
330
346
EBITDA as a percentage of revenues
9.1
%
9.3
%
8.6
%
9.3
%
Acquisition and integration costs
1
14
10
24
Restructuring costs
2
—
2
—
Depreciation included in acquisition and
integration costs
—
—
—
(1
)
Recovery of acquisition and integration
costs and restructuring costs
(3
)
—
(3
)
—
Adjusted EBITDA(1)
$
166
$
185
$
339
$
369
Adjusted EBITDA as a percentage of
revenues
9.1
%
10.1
%
8.9
%
9.9
%
Operating income
$
125
$
133
$
250
$
263
Operating income as a percentage of
revenues
6.8
%
7.2
%
6.5
%
7.1
%
Acquisition and integration costs
1
14
10
24
Restructuring costs
2
—
2
—
Recovery of acquisition and integration
costs and restructuring costs
(3
)
—
(3
)
—
Adjusted operating income(1)
$
125
$
147
$
259
$
287
Adjusted operating income as a percentage
of revenues
6.8
%
8.0
%
6.8
%
7.7
%
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 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
Six Months Ended
July 29,
2022
July 30,
2021
July 29,
2022
July 30,
2021
Diluted earnings per share
$
1.30
$
1.41
$
2.59
$
2.79
Acquisition and integration costs and
restructuring and impairment costs, divided by diluted
'weighted-average number of shares outstanding' (WASO)
—
0.24
0.16
0.41
Tax effect of acquisition and integration
costs and restructuring and impairment costs, divided by diluted
WASO
—
(0.05
)
(0.03
)
(0.08
)
Net effect of acquisition and integration
costs and restructuring and impairment costs, divided by diluted
WASO
—
0.19
0.13
0.33
Amortization of intangible assets, divided
by diluted WASO
0.57
0.49
1.15
1.04
Tax effect of amortization of intangible
assets, divided by diluted WASO
(0.12
)
(0.12
)
(0.25
)
(0.24
)
Net effect of amortization of intangible
assets, divided by diluted WASO
0.45
0.37
0.90
0.80
Adjusted diluted earnings per
share(1)
$
1.75
$
1.97
$
3.62
$
3.92
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
Six Months Ended
July 29,
2022
July 30,
2021
July 29,
2022
July 30,
2021
(in millions)
Net cash provided by operating
activities
$
141
$
92
$
259
$
281
Expenditures for property, plant, and
equipment
(7
)
(7
)
(12
)
(17
)
Cash used (provided) by MARPA Facility
(60
)
—
(60
)
(15
)
Free cash flow(1)
$
74
$
85
$
187
$
249
FY23 Guidance
(in millions)
Net cash provided by operating
activities
$535 to $565
Expenditures for property, plant, and
equipment
Approximately $35
Free cash flow(1)
$500 to $530
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/20220901005058/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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