Huntington Ingalls Industries, Inc. · NYSE:HII
Huntington Ingalls Industries — Q2 2024 Earnings Presentation
18 slides from Huntington Ingalls Industries's earnings presentation, Aug 1, 2024
Slide 1: HII Q2 2024 Earnings
HII Q2 2024 Earnings August 1, 2024 Chris Kastner President & CEO Tom Stiehle Executive Vice President & CFO Exhibit 99.2
Slide 2: Cautionary Statement Regarding Forward-looking Statements
Cautionary Statement Regarding Forward-looking Statements 2 Statements in this presentation, other than statements of historical fact, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking s
Slide 3: Q2 2024 Financial Highlights
Q2 2024 Financial Highlights 3 • Record second quarter revenues of $3.0B, up 6.8% YoY – Mission Technologies revenues $765M, up 18.6% YoY • Operating Income of $189M, up 21.2% YoY • Net Income of $173M, up 33.1% YoY • Diluted EPS of $4.38, up 33.9% YoY • Quarter-end backlog of $48.5B
Slide 4: HII Q2 2024 Operational Highlights
HII Q2 2024 Operational Highlights 4 Ingalls Shipbuilding Highlights • Delivered Richard M. McCool Jr. (LPD 29) Newport News Shipbuilding Highlights • Delivered Virginia-class submarine New Jersey (SSN 796) • Completed dry dock work for aircraft carrier USS John C. Stennis (CVN 74) RCOH Mission Tech
Slide 5: Upcoming Shipbuilding Milestones
5 Upcoming Shipbuilding Milestones1 2024 o Ingalls Complete sea trials and deliver LPD 29 (Richard M. McCool Jr.) Launch LPD 30 (Harrisburg) o Newport News Re-deliver SSN 794 (USS Montana) Deliver SSN 796 (New Jersey) Float off SSN 798 (Massachusetts) Float off SSN 800 (Arkansas) Ship
Slide 6: HII Q2 2024 Consolidated Results
$156 $189 $0 $20 $40 $60 $80 $100 $120 $140 $160 $180 $200 Q223 Q224 6 HII Q2 2024 Consolidated Results • Revenue grew $190M or 6.8% YoY driven by growth across all segments CONSOLIDATED REVENUE ($M) OPERATING INCOME ($M) & MARGIN % 5.6% • Operating income increased $33M YoY driven by Mission Techno
Slide 7: HII Q2 2024 Segment Results YoY
7 HII Q2 2024 Segment Results YoY Newport News Shipbuilding Ingalls Shipbuilding Mission Technologies 1 Non-GAAP measures. See appendix for definitions and reconciliations. REVENUE ($M) SEGMENT OPERATING INCOME1 ($M) & MARGIN %1 REVENUE ($M) REVENUE ($M) SEGMENT OPERATING INCOME1 ($M) & MARGIN %1 SE
Slide 8: HII Q2 2024 Capital Deployment
$82 ($9) ($68) ($90) $14 ($99) ($125) ($100) ($75) ($50) ($25) $0 $25 $50 $75 $100 Cash from Ops. CAPEX Free Cash Flow 8 HII Q2 2024 Capital Deployment CASH FLOW USE ($M) SHAREHOLDER DISTRIBUTIONS ($M) • Cash balance of $11 million and liquidity of ~$1.1 billion at quarter end • Net capital expendit
Slide 9: HII Financial Outlook
9 HII Financial Outlook1 FY24 Outlook1 Shipbuilding Revenue2 $8.8B - $9.1B Shipbuilding Operating Margin2 7.6% - 7.8% Mission Technologies Revenue $2.75B - $2.8B Mission Technologies Segment Operating Margin2 3.0% - 3.5% Mission Technologies EBITDA Margin2 8.0% - 8.5% Operating FAS/CAS Adjustment ($
Slide 10: Investment Thesis
Investment Thesis Largest U.S. military seapower provider with leading all-domain, integrated defense technologies Historic and significant market tailwinds providing highly visible growth Margin expansion opportunity driven by operational execution and delivering on commitments Projected free cash
Slide 11: Appendix
Appendix
Slide 12: Non-GAAP Information
12 Non-GAAP Information We make reference to “free cash flow,” “segment operating income,” “segment operating margin,” “shipbuilding revenue,” “shipbuilding operating margin,” “Mission Technologies EBITDA” and “Mission Technologies EBITDA margin.” We internally manage our operations by reference to
Slide 13: Non-GAAP Measures Definitions
13 Non-GAAP Measures Definitions Segment operating income is defined as operating income for the relevant segment(s) before the Operating FAS/CAS Adjustment and non-current state income taxes. Segment operating margin is defined as segment operating income as a percentage of sales and service revenu
Slide 14: Non-GAAP Reconciliations: Segment Operating Income & Margin
14 Non-GAAP Reconciliations Segment Operating Income & Segment Operating Margin ($ in millions) 2024 2023 2024 2023 Ingalls revenues 712 664 1,367 1,241 Newport News revenues 1,535 1,509 2,969 3,015 Mission Technologies revenues 765 645 1,515 1,269 Intersegment eliminations (35) (31) (69) (64) Sales
Slide 15: Non-GAAP Reconciliations: Shipbuilding Revenues & Operating Margin
15 Non-GAAP Reconciliations Shipbuilding Revenues & Operating Margin ($ in millions) 2024 2023 2024 2023 Sales and service revenues 2,977 2,787 5,782 5,461 Mission Technologies (765) (645) (1,515) (1,269) Intersegment eliminations 35 31 69 64 Shipbuilding Revenues 2,247 2,173 4,336 4,256 Operating I
Slide 16: Non-GAAP Reconciliations: Free Cash Flow
16 Non-GAAP Reconciliations Free Cash Flow ($ in millions) 2024 2023 2024 2023 Net cash provided by (used in) operating activities (9) 82 (211) 73 Less capital expenditures: Capital expenditure additions (90) (68) (165) (111) Grant proceeds for capital expenditures — — 3 3 Free cash flow (99) 14 (37
Slide 17: Non-GAAP Reconciliations: Mission Technologies EBITDA & EBITDA Margin
17 Non-GAAP Reconciliations Mission Technologies EBITDA & EBITDA Margin (in millions) 2024 2023 2024 2023 Mission Technologies sales and service revenues 765 645 1,515 1,269 Mission Technologies segment operating income 36 9 64 26 Mission Technologies depreciation expense 2 3 5 6 Mission Technologie
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