Leidos Holdings, Inc. · NYSE:LDOS
Leidos — Q3 2016 Earnings Presentation
18 slides from Leidos's earnings presentation, Nov 3, 2016
Slide 1: Leidos 3Q 2016 Earnings Conference Call
Leidos 3Q 2016 Earnings Conference Call November 3, 2016
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 2016 Highlights
3Q FY 2016 Highlights ► Organic & inorganic revenue growth Improving Financials ► Margin expansion ► Raising guidance range ► 77M shares successfully issued Successful Transaction The new Leidos ► Integration milestones on-track Close ► Cost & revenue synergies on-track 2018 & beyond* 3% revenue gro
Slide 4: Leidos 3Q FY 16 Results
Leidos 3Q FY 16 Results Non-GAAP Adjusted EBITDA Cash Flow from Revenue ($B) Diluted EPS Margin Operations ($)2 (%)2 ($M) +5.1%1 +71.2% +160bps -16.0% $1.9 $1.25 10.0% $269 8.4% $226 $1.3 $1.2 $0.73 $1.2 3Q CY 15 3Q FY 16 3Q CY 15 3Q FY 16 3Q CY 15 3Q FY 16 3Q CY 15 3Q FY 16 Adjusted revenue of $1.1
Slide 5: National Security Sector (NSS)
National Security Sector (NSS) Revenue Non-GAAP Operating Income Non-GAAP Operating Margin ($M) ($M)1 (%)1 +4.9% +16.7% +100bps $921 $91 $878 9.9% $78 8.9% 3Q CY 15 3Q FY 16 3Q CY 15 3Q FY 16 3Q CY 15 3Q FY 16 (1) See appendix for definition & reconciliation of Non-GAAP Financial Measures 5 ©2016 LE
Slide 6: Health & Infrastructure Sector (HIS)
Health & Infrastructure Sector (HIS) Revenue Non-GAAP Operating Income Non-GAAP Operating Margin ($M) ($M)2 (%)2 +8.3%1 +220bps1 +31.3%1 $42 12.8% $418 $328 10.6% $32 $303 $19 4.5% 3Q CY 15 3Q FY 16 3Q CY 15 3Q FY 16 3Q CY 15 3Q FY 16 Adjusted revenue of $303M represents 3Q CY 15 excluding revenues
Slide 7: Information Systems & Global Solutions (IS&GS) Sector
Information Systems & Global Solutions (IS&GS) Sector Revenue Non-GAAP Operating Income Non-GAAP Operating Margin ($M) ($M)1 (%)1 $620(2) 8.4%(2) $52(2) 3Q FY 16 3Q FY 16 3Q FY 16 (1) See appendix for definition & reconciliation of Non-GAAP Financial Measures (2) Source: Actual results for 8/16/2016
Slide 8: Awards & Backlog
Awards & Backlog NSS HIS IS&GS Backlog** ($M) Backlog ($M) Backlog ($M) $9,000 $8,538 $8,707 $8,851 $8,026 $2,500 $9,000 $7,861 $7,925 $8,000 $7,288 $8,000 $1,931 $7,000 $2,000 $1,869 $1,746 $1,888 $7,000 $1,679 $6,000 $6,000 $5,780 $6,029 $5,000 $6,752 $1,500 $884 $820 $866 $5,000 $6,554 $6,102 $6,
Slide 9: 2016 Guidance Update
2016 Guidance Update: INCLUDES IS&GS RESULTS POST 8/16/2016 TRANSACTION CLOSE Current Prior Revenue $7.0B to $7.1B $6.8B to $7.0B Adjusted EBITDA Margin Unchanged 8.5% to 9.0% Non-GAAP Diluted EPS $3.50 to $3.60(1) $3.15 to $3.35(2) Effective Tax Rate ~26% ~28% Operating Cash Flow from Continuing Op
Slide 10: Appendix
Appendix * leidos
Slide 11: Weighted Average Share Count Impact
Weighted Average Share Count Impact 1QFY161 2QFY16 3QFY16 4QFY162 2016 Guidance 2 (in millions, except for per share amounts) GAAP Income from continuing operations attributable to Leidos Holdings, Inc. $ 53 $ 41 $ 91 - Quarter-to-Date - Diluted weighted average number of shares outstanding 74 74 11
Slide 12: Supplementary IS&GS Historical Financials
Supplementary IS&GS Historical Financials 7/1/2016- 1QCY15 2QCY15 3QCY15 4QCY15 CY15 1QFY16 2QFY16 8/15/2016 Information Systems & Global Solutions (in millions) Normalized Revenues $ 1,382 $ 1,405 $ 1,401 $ 1,414 $ 5,604 $ 1,348 $ 1,296 $ 724 Normalized Non-GAAP Operating income 134 120 134 127 515
Slide 13: Non-GAAP Reconciliations
Non-GAAP Reconciliations This presentation includes certain non-GAAP financial measures, such as non-GAAP operating income, non-GAAP operating income margin, non-GAAP income from continuing operations, non-GAAP diluted earnings per share (EPS) and adjusted earnings before interest, taxes, depreciati
Slide 14: 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 (loss) from continuing operations: (i) other income (expense), net; (ii) interest expense; (iii) interest income; (iv) income tax (expense) benefit adjusted to reflect non-GAA
Slide 15: Non-GAAP Operating Income Reconciliation
Non-GAAP Operating Income Reconciliation 1QCY151 2QCY151 3QCY151 4QCY151 CY151 1QFY16 2QFY16 3QFY16 (in millions) GAAP operating income from continuing operations $ 38 $ 64 $ 94 $ 102 $ 298 $ 89 $ 75 $ 101 Acquisition and integration costs - - - - - 9 15 44 Amortization of acquired intangible assets
Slide 16: Non-GAAP Financial Measures Reconciliation
Non-GAAP Financial Measures Reconciliation 1QCY151 2QCY151 3QCY151 4QCY151 CY151 1QFY162 2QFY16 3QFY16 (in millions, except for per share amounts) Non-GAAP operating income from continuing operations $ 82 $ 96 $ 101 $ 107 $ 386 $ 99 $ 93 $ 177 Depreciation expense 10 9 9 7 35 7 7 10 Other (expense)
Slide 17: Segment Non-GAAP Operating Income Reconciliation
Segment Non-GAAP Operating Income Reconciliation Quarter Ended September 30, 2016 Nine Months Ended September 30, 2016 (in millions) (in millions) Operating Acquisition and Amortization Restructuring Non-GAAP Operating Operating Acquisition and Amortization Restructuring Non-GAAP Operating income (l
Slide 18: Non-GAAP Financial Measures Reconciliation
Non-GAAP Financial Measures Reconciliation 7/1/16 - 1QCY15 2QCY15 3QCY15 4QCY15 CY15 1QFY16 2QFY16 8/15/16 (in millions) IS&GS GAAP Revenue $ 1,382 $ 1,405 $ 1,401 $ 1,394 $ 5,584 $ 1,325 $ 1,336 $ 739 Reserve Release - - 20 20 - - - International Contract Loss Charge - - - - - 23 - - Pre-Sale Contr