Leidos Holdings, Inc. · NYSE:LDOS
Leidos — Q2 2018 Earnings Presentation
16 slides from Leidos's earnings presentation, Jul 26, 2018
Slide 1: Leidos 2Q 2018 Earnings Conference Call
Leidos 2Q 2018 Earnings Conference Call July 26, 2018
Slide 2: Forward-Looking Statements
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," "
Slide 3: 2Q FY 2018 Highlights
2Q FY 2018 Highlights 3.5% sequential revenue growth Driving Growth 1.4x book-to-bill $18.3B backlog 10.9% Adjusted EBITDA Margin Sustaining 70bps sequential increase Profitability Above long-term 10%+ target $271M cash flow from operations Generating Strong 149% conversion of net in
Slide 4: Leidos 2Q FY 18 Results
Leidos 2Q FY 18 Results Revenue Non-GAAP Adjusted EBITDA Cash Flow from ($B) Diluted EPS Margin Operations ($) (%) ($M) $1.12 10.9% 10.9% $271 $1.04 $2.6 $2.5 +7.7% Flat +105M -1.6% $166 Q2 FY 17 2Q FY 18 2Q FY 17 2Q FY 18 2Q FY 17 2Q FY 18 2Q FY 17 2Q FY 18 Note: See appendix for definition & recon
Slide 5: Leidos Backlog & Book to Bill
Leidos Backlog & Book to Bill 17.7 17.5 17.6 18.3 17.1 Backlog1 ($B) 12.1 12.1 12.5 13.0 13.0 5.0 5.6 5.0 4.6 5.3 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 Book to Bill2 1.4 1.2 1.0 1.0 0.9 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 Funded Backlog Negotiated Unfunded Backlog (1) Backlog presented at exchange rate
Slide 6: Defense Solutions Segment
Defense Solutions Segment Revenue Non-GAAP Operating Income Non-GAAP Operating Margin ($M) ($M) (%) $1,243 $1,256 $109 $110 8.8% 8.8% +1% +0.9% Flat 2Q FY 17 2Q FY 18 2Q FY 17 2Q FY 18 2Q FY 17 2Q FY 18 Note: See appendix for definition & reconciliation of Non-GAAP Financial Measures 6
Slide 7: Civil Segment
Civil Segment Revenue Non-GAAP Operating Income Non-GAAP Operating Margin ($M) ($M) (%) $875 $96 11.0% $822 $85 10.3% -6.1% -11% -66 bps 2Q FY 17 2Q FY 18 2Q FY 17 2Q FY 18 2Q FY 17 2Q FY 18 Note: See appendix for definition & reconciliation of Non-GAAP Financial Measures 7
Slide 8: Health Segment
Health Segment Revenue Non-GAAP Operating Income Non-GAAP Operating Margin ($M) ($M) (%) $454 $451 $80 17.7% $74 +8.1% 16.3% -0.7% +140 bps 2Q FY 17 2Q FY 18 2Q FY 17 2Q FY 18 2Q FY 17 2Q FY 18 Note: See appendix for definition & reconciliation of Non-GAAP Financial Measures 8
Slide 9: 2018 Guidance
2018 Guidance Current Prior Revenue Unchanged $10.25B to $10.65B Adjusted EBITDA Margin(1) Unchanged 10.1% to 10.4% Non-GAAP Diluted EPS(1,2) Unchanged $4.15 to $4.50 Operating Cash Flow Unchanged Meet or exceed $675M(3) (1) A quantitative reconciliation of adjusted EBITDA margin and non-GAAP dilute
Slide 10: Appendix
Appendix * leidos
Slide 11: Non-GAAP Financial Measures
Non-GAAP Financial Measures This presentation includes certain non-GAAP financial measures, such as non-GAAP operating income, non-GAAP operating income margin, non-GAAP diluted earnings per share (EPS), adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), free cash flow
Slide 12: Definition of Non-GAAP Financial Measures
Definition of Non-GAAP Financial Measures Non-GAAP operating income is computed by excluding the following items from net income: (i) non-operating expense, net; (ii) adjustments to the income tax provision to reflect non-GAAP adjustments; and (iii) the following discrete items: Integration and re
Slide 13: Non-GAAP Operating Income Reconciliation
Non-GAAP Operating Income Reconciliation 1QFY17 2QFY17 3QFY17 4QFY17 FY17 1QFY18 2QFY18 (in millions) Operating income $ 141 $ 166 $ 151 $ 101 $ 559 $ 159 $ 199 Integration and restructuring costs 32 22 27 58 139 17 8 Amortization of acquired intangible assets 69 67 76 69 281 50 51 Amortization of e
Slide 14: Non-GAAP Financial Measures Reconciliation
Non-GAAP Financial Measures Reconciliation 1QFY172 2QFY172 3QFY17 4QFY17 FY17 1QFY18 2QFY18 (in millions, except per share amounts) Non-GAAP operating income $ 242 $ 264 $ 256 $ 231 $ 993 $ 236 $ 260 Depreciation expense 13 13 16 13 55 13 15 Other income, net 3 4 - 1 8 - 1 Adjusted EBITDA $ 258 $ 28
Slide 15: Non-GAAP Financial Measures Reconciliation (cont'd)
Non-GAAP Financial Measures Reconciliation (cont’d) Quarter Ended June 29, 2018 (in millions, except per share amounts) Amortization of Integration and Amortization of equity method Held for sale tax As reported restructuring costs intangibles investment adjustment Non-GAAP results Operating income
Slide 16: Reportable Segment Non-GAAP Operating Income Reconciliation
Reportable Segment Non-GAAP Operating Income Reconciliation Quarter Ended June 29, 2018 (in millions) Operating income Integration and Amortization of Amortization of equity Non-GAAP operating (loss) restructuring costs intangibles method investment income (loss) Defense Solutions $ 93 $ - $ 17 $ -