Leidos Holdings, Inc. · NYSE:LDOS
Leidos — Q3 2017 Earnings Presentation
15 slides from Leidos's earnings presentation, Nov 2, 2017
Slide 1: Leidos 3Q 2017 Earnings Conference Call
Leidos 3Q 2017 Earnings Conference Call November 2, 2017
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain statements in this presentation contain or are based on “forward-looking” information within the meaning of the Private Securities Litigation Reform Act of 1995. Actual performance and results may differ materially from the guidance and other forward-looking statem
Slide 3: 3Q FY 2017 Highlights
3Q FY 2017 Highlights ► $0.95 Non-GAAP(1) Diluted Earnings Per Share Leidos ► 10.9% Adjusted EBITDA Margin 2018 & beyond(2) 3% revenue growth ► $268M Cash from Operations 10%+ Adjusted EBITDA margin 100%+ cash efficiency ► Gross Cost Synergies Realized to Date ~$300M (1) See appendix for definition
Slide 4: Leidos 3Q FY 17 Results
Leidos 3Q FY 17 Results Non-GAAP Adjusted EBITDA Cash Flow from Revenue ($B)1 Diluted EPS Margin Operations ($)2,3 (%)3 ($M) +34% -24% +90bps -$5M $2.5 10.9% $1.25 10.0% $273 $268 $1.9 $0.95 3Q FY 16 3Q FY 17 3Q FY 16 3Q FY 17 3Q FY 16 3Q FY 17 3Q FY 16 3Q FY 17 (1) Includes revenues from IS&GS acqu
Slide 5: Defense Solutions Segment
Defense Solutions Segment Revenue Non-GAAP Operating Income Non-GAAP Operating Margin ($M) ($M)1 (%)1 +19% -120bps +4% $1,201 $101 9.6% $97 8.4% $1,009 3Q FY 16 3Q FY 17 3Q FY 16 3Q FY 17 3Q FY 16 3Q FY 17 (1) See appendix for definition & reconciliation of Non-GAAP Financial Measures 5 ©2017 LEIDOS
Slide 6: Civil Segment
Civil Segment Revenue Non-GAAP Operating Income Non-GAAP Operating Margin ($M) ($M)1 (%)1 +50% +81% +190bps 11.2% $838 $94 9.3% $559 $52 3Q FY 16 3Q FY 17 3Q FY 16 3Q FY 17 3Q FY 16 3Q FY 17 (1) See appendix for definition & reconciliation of Non-GAAP Financial Measures 6 ©2017 LEIDOS. ALL RIGHTS RE
Slide 7: Health Segment
Health Segment Revenue Non-GAAP Operating Income Non-GAAP Operating Margin ($M) ($M)1 (%)1 +55% +105% +410bps $464 $76 16.4% 12.3% $300 $37 3Q FY 16 3Q FY 17 3Q FY 16 3Q FY 17 3Q FY 16 3Q FY 17 (1) See appendix for definition & reconciliation of Non-GAAP Financial Measures 7 ©2017 LEIDOS. ALL RIGHTS
Slide 8: Backlog & Book to Bill
Backlog & Book to Bill 17.7 17.7 16.9 17.1 Backlog1 ($B) 11.7 12.1 12.0 12.1 6.0 4.9 5.0 5.6 4QFY16 1QFY17 2QFY17 3QFY17 Book to Bill2 1.0 1.2 0.7 0.7 4QFY16 1QFY17 2QFY17 3QFY17 Funded Backlog Negotiated Unfunded Backlog (1) Backlog presented at exchange rate in effect at quarter end (2) Book to bi
Slide 9: 2017 Guidance Update
2017 Guidance Update Current Prior Revenue Unchanged $10.1B to $10.4B Adjusted EBITDA Margin(1) 10.2% to 10.4% 9.8% to 10.2% Non-GAAP Diluted EPS(1,2) $3.60 to $3.75 $3.45 to $3.60 Operating Cash Flow from Continuing Operations Meet or exceed $490M(3) Meet or exceed $475M (1) A quantitative reconcil
Slide 10: Appendix
Appendix
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), and adjusted E
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 income from continuing operations: (i) other (expense) income, net; (ii) interest expense; (iii) interest income; (iv) income tax expense adjusted to reflect non-GAAP adjustments; an
Slide 13: Non-GAAP Operating Income Reconciliation
Non-GAAP Operating Income Reconciliation 1QFY16 2QFY16 3QFY16 4QFY16 FY16 1QFY17 2QFY17 3QFY17 (in millions) Operating income $ 89 $ 75 $ 101 $ 152 $ 417 $ 141 $ 166 $ 151 Acquisition and integration costs 9 15 44 22 90 19 16 21 Amortization of acquired intangible assets 1 2 27 54 84 69 67 76 Asset
Slide 14: Non-GAAP Financial Measures Reconciliation
Non-GAAP Financial Measures Reconciliation 1 1QFY16 2QFY16 3QFY16 4QFY16 FY16 1QFY17 2QFY17 3QFY17 (in millions, except per share amounts) Non-GAAP operating income $ 99 $ 93 $ 177 $ 240 $ 609 $ 242 $ 264 $ 256 Depreciation expense 7 7 10 14 38 13 13 16 3 Other (expense) income, net (2) (5) (1) (10)
Slide 15: Segment Non-GAAP Operating Income Reconciliation
Segment Non-GAAP Operating Income Reconciliation Nine Months Ended September 30, 2017 (in millions) Operating income Acquisition and Amortization of Restructuring Amortization of equity Non-GAAP operating (loss) integration costs intangibles expenses method investments income (loss) Defense Solution