Booz Allen Hamilton Holding Corp - FORM 8-K - EX-99.2 - SLIDES FOR THE EARNINGS CONFERENCE CALL

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8-K - FORM 8-K - Booz Allen Hamilton Holding Corp	d360661d8k.htm
EX-99.1 - PRESS RELEASE - Booz Allen Hamilton Holding Corp	d360661dex991.htm

Booz Allen Hamilton

Fourth Quarter Fiscal 2012

Booz Allen Hamilton

Fourth Quarter Fiscal 2012

May 30, 2012

Exhibit 99.2

Today’s Agenda

Curt Riggle

Director, Investor Relations

Ralph Shrader

Chairman, Chief Executive Officer and President

Sam Strickland

Executive Vice President and Chief Financial Officer

Introduction

Management

Overview

Financial

Overview

Questions and

Answers

Disclaimers

Forward Looking Safe Harbor Statement

The following information includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements

include information concerning Booz Allen’s preliminary financial results, financial outlook and guidance, including projected Revenue, Diluted EPS, and Adjusted Diluted EPS, as well

as any other statement that does not directly relate to any historical or current fact. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,”

“could,” “should,” “forecasts,” “expects,” “intends,” “plans,” “anticipates,” “projects,” “outlook,” “believes,” “estimates,” “predicts,” “potential,” “continue,” “preliminary,” or the negative of

these terms or other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we can give you no assurance

these expectations will prove to have been correct. These forward-looking statements relate to future events or our future financial performance and involve known and unknown risks,

uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity,

performance or achievements expressed or implied by these forward-looking statements. These risks and other factors include: cost cutting and efficiency initiatives and other efforts

to reduce U.S. government spending, which could reduce or delay funding for orders for services especially in the current political environment; delayed funding of our contracts due to

delays in the completion of the U.S. government’s budgeting process and the use of continuing resolutions by the U.S. government to fund its operations or related changes in the

pattern or timing of government funding and spending; any issue that compromises our relationships with the U.S. government or damages our professional reputation; changes in

U.S. government spending and mission priorities that shift expenditures away from agencies or programs that we support; the size of our addressable markets and the amount of U.S.

government spending on private contractors; failure to comply with numerous laws and regulations; our ability to compete effectively in the competitive bidding process and delays

caused by competitors’ protests of major contract awards received by us; the loss of General Services Administration Multiple Award Schedule Contracts, or GSA schedules, or our

position as prime contractor on Government-wide acquisition contract vehicles; changes in the mix of our contracts and our ability to accurately estimate or otherwise recover

expenses, time and resources for our contracts; our ability to generate revenue under certain of our contracts; our ability to realize the full value of our backlog and the timing of our

receipt of revenue under contracts included in backlog; changes in estimates used in recognizing revenue; any inability to attract, train or retain employees with the requisite skills,

experience and security clearances; an inability to hire, assimilate and deploy enough employees to serve our clients under existing contracts; an inability to timely and effectively

utilize our employees; failure by us or our employees to obtain and maintain necessary security clearances; the loss of members of senior management or failure to develop new

leaders; misconduct or other improper activities from our employees or subcontractors; increased competition from other companies in our industry; failure to maintain strong

relationships with other contractors; inherent uncertainties and potential adverse developments in legal or regulatory proceedings, including litigation, audits, reviews and

investigations, which may result in materially adverse judgments, settlements, withheld payments, penalties or other unfavorable outcomes including debarment, as well as disputes

over the availability of insurance or indemnification; internal system or service failures and security breaches, including, but not limited to, those resulting from external cyber attacks on

our network and internal systems; risks related to changes in our operating structure, capabilities, or strategy intended to address client needs, grow our business, or respond to

market developments; risks associated with new relationships, clients, capabilities, and service offerings in our U.S. and international businesses; risks related to our indebtedness and

credit facilities which contain financial and operating covenants; the adoption by the U.S. government of new laws, rules and regulations, such as those relating to organizational

conflicts of interest issues; an inability to utilize existing or future tax benefits, including those related to our Net Operating Losses and stock-based compensation expense, for any

reason, including a change in law; and variable purchasing patterns under U.S. government GSA schedules, blanket purchase agreements and Indefinite Delivery/Indefinite Quantity

contracts. Additional information concerning these and other factors can be found in our filings with the Securities and Exchange Commission (SEC), including our Annual Report on

Form 10K, filed with the SEC on June 8, 2011.All forward-looking statements attributable to the company or persons acting on the company’s behalf are expressly qualified in their

entirety by the foregoing cautionary statements. All such statements speak only as of the date made and, except as required by law, the company undertakes no obligation to update

or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Note Regarding Non-GAAP Financial Data Information

Booz Allen discloses in the following information Adjusted Operating Income, Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS, and Free Cash Flow which are not

recognized measurements under GAAP, and when analyzing Booz Allen’s performance or liquidity as applicable, investors should (i) evaluate each adjustment in our reconciliation of

Operating and Net Income to Adjusted Operating Income, Adjusted EBITDA and Adjusted Net Income, and cash flow to free cash flow, and the explanatory footnotes regarding those

adjustments, and (ii) use Adjusted EBITDA, Adjusted Net Income, Adjusted Operating Income, and Adjusted Diluted EPS in addition to, and not as an alternative to operating income,

net income or Diluted EPS as a measure of operating results with cash flow in addition to and not as an alternative to net cash generated from operating activities as a measure of

liquidity, each as defined under GAAP. The Financial Appendix includes a reconciliation of Adjusted Operating Income, Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted

EPS, and Free Cash Flow to the most directly comparable financial measure calculated and presented in accordance with GAAP. Booz Allen presents these supplemental

performance measures because it believes that these measures provide investors and securities analysts with important supplemental information with which to evaluate Booz Allen’s

performance, long term earnings potential, or liquidity, as applicable and to enable them to assess Booz Allen’s performance on the same basis as management. These supplemental

performance and liquidity measurements may vary from and may not be comparable to similarly titled measures by other companies in Booz Allen’s industry.

Fiscal Year-to-Date 2012

Business Highlights

Fiscal Year-to-Date 2012

Business Highlights

Continued top and bottom line growth in a challenging environment

Declaration of $0.09 quarterly dividend and $1.50 special dividend

High demand for services demonstrated by book-to-bill of 1.0

Increasing investment in growth areas as a result of cost reductions

Strategically

aligned

serve

clients’

core

missions

Ongoing recognition as a “Best Company to Work For”

Key Financial Highlights

Comparisons are to prior fiscal year period

Preliminary

Fourth Quarter Fiscal 2012 Results

Key Financial Highlights

Preliminary Full Year Fiscal 2012 Results

Comparisons are to prior fiscal year

Capital Generation and Deployment

($M)

Total Debt

$1,568.6

$1,563.9

$1,474.9

$1,229.3

$994.3

$987.1

$979.9

$972.7

$965.4

Cash Taxes

$3.2

$0.2

$2.5

$2.7

$2.3

$1.6

$48.4

$19.2

$20.1

See SEC Filings for full discloure regarding these transactions

($300.0)

($200.0)

($100.0)

$0.0

$100.0

$200.0

$300.0

$500.0

$600.0

FY10 Q1

FY10 Q2

FY10 Q3

FY10 Q4

FY11 Q1

FY11 Q2

FY11 Q3

FY11 Q4

FY12 Q1

FY12 Q2

FY12 Q3

FY12 Q4

Net Cash From Operations

Net Cash From Investing Activities

Net Cash From Financing Activities

Cash Balance

$30M Share Repurchase

Authorization

Recapitalization

Special

Dividend

Mezz

Repayment

IPO

Refinancing

$11.9M Quarterly Dividend, $211.8M

Special Dividend, and $3.4M in accrued

interest on DPO Payable on June 29, 2012

Quarterly

Dividend and

$19.4M in Accrued

Interest on DPO

Special Dividend Payment (July 2009) - $114.9M of cash on hand

Recapitalization Transaction (December 2009) - $321.9M of cash on hand plus net proceeds from recapitalization to pay dividend of $497.5M and DPO principal and accrued interest of $100.4M

Mezzanine Prepayment (August 2010) - $85M of cash on hand to optionally repay indebtedness outstanding under mezzanine credit facility

Initial Public Offering (November 2010) - $250.2M net proceeds (and no cash on hand) used to repay indebtedness under mezzanine credit facility ($242.9M plus $7.3M in penalties)

Refinancing Transaction (February 2011) - $268.9M of cash on hand to repay balance of mezzanine facility, $21.5M of senior term loans, fees, expenses, and penalties

Share Repurchase (December 2011) - Authorization of $30M share repurchase. As of May 30, 2012, no purchases have occurred.

Regular Dividend (February 2012) - $11.9M of cash on hand to pay $0.09/share quarterly dividend

Regular and Special Dividend (June 2012) - $11.9M of cash on hand to pay $0.09/share quarterly dividend and $211.8M of cash on hand to pay $1.50/share special dividend

Payment of Accrued Interest on DPO (June 2012) - $3.4M in cash on hand to pay accrued interest on DPO

Value Drivers

Deployment of capital to maximize shareholder value

Management of our business with agility and precision

Alignment

with

our

clients’

core

missions

Commitment to being essential to our clients and differentiated from our

competitors

Investment in growth markets and capabilities

Development of industry-leading talent and a commitment to excellence

Enhancement of margins and a focus on long-term performance

Outlook

Revenue growth forecast:

Relatively Flat to Low-Single

Digits in the First Half

Diluted EPS forecast:

$1.62 -

$1.72

(1)

Adjusted Diluted EPS forecast:

$1.71 -

$1.81

(1)

Fiscal 2013 Outlook

(1) Full Fiscal Year 2013

Financial Appendix

Booz Allen Hamilton Holding Corporation

Non-GAAP Financial Information

Booz Allen Hamilton Holding Corporation

Non-GAAP Financial Information

“Adjusted Operating Income”

represents Operating Income before (i) certain stock option-based and other equity-based

compensation expenses, (ii) the impact of the application of purchase accounting, (iii) adjustments related to the

amortization of intangible assets and (iv) any extraordinary, unusual or non-recurring items. Booz Allen prepares

Adjusted Operating Income to eliminate the impact of items it does not consider indicative of ongoing operating

performance due to their inherent unusual, extraordinary or non-recurring nature or because they result from an event of

a similar nature.

“Adjusted EBITDA”

represents net income before income taxes, net interest and other expense and depreciation and

amortization and before certain other items, including: (i) certain stock option-based and other equity-based

compensation

expenses,

(ii)

transaction

costs,

fees,

losses,

and

expenses,

(iii)

the

impact

the

application

purchase

accounting and (iv) any extraordinary, unusual or non-recurring items. Booz Allen prepares Adjusted EBITDA to

eliminate

the

impact

items

does

not

consider

indicative

ongoing

operating

performance

due

their

inherent

unusual, extraordinary or non-recurring nature or because they result from an event of a similar nature.

“Adjusted Net Income”

represents net income before: (i) certain stock option-based and other equity-based

compensation

expenses,

(ii)

transaction

costs,

fees,

losses,

and

expenses,

including

fees

associated

with

debt

prepayments, (iii) the impact of the application of purchase accounting, (iv) adjustments related to the amortization of

intangible assets, (v) amortization or write-off of debt issuance costs and write-off of original issue discount, or OID, and

(vi) any extraordinary, unusual or non-recurring items, in each case net of the tax effect calculated using an assumed

effective tax rate. Booz Allen prepares Adjusted Net Income to eliminate the impact of items, net of tax, it does not

consider indicative of ongoing operating performance due to their inherent unusual, extraordinary or non-recurring nature

or because they result from an event of a similar nature.

“Adjusted Diluted EPS”

represents Diluted EPS calculated using Adjusted Net Income as opposed to Net Income.

“Free Cash Flow”

represents the net cash generated from operating activities less the impact of purchases of property

and equipment.

Booz Allen Hamilton Holding Corporation

Non-GAAP Financial Information

Booz Allen Hamilton Holding Corporation

Non-GAAP Financial Information

(Unaudited and in thousands, except per share data)

Three Months Ended

March 31,

Fiscal Year Ended

March 31

2012

2011

2012

2011

Adjusted Operating Income

Operating Income

$97,457

$83,659

$387,432

$319,444

Certain stock-based compensation expense (a)

2,652

6,816

14,241

39,947

Amortization of intangible assets (b)

4,091

7,161

16,364

28,641

Net restructuring charge (h)

11,182

Transaction expenses (c)

4,313

4,448

Adjusted Operating Income

$115,382

$101,949

$429,219

$392,480

EBITDA & Adjusted EBITDA

Net income

$50,627

$18,070

$239,955

$84,694

Income tax expense

35,948

13,690

103,919

43,370

Interest and other, net

10,882

51,899

43,558

191,380

Depreciation and amortization

19,281

20,835

75,205

80,603

EBITDA

116,738

104,494

462,637

400,047

Certain stock-based compensation expense (a)

2,652

6,816

14,241

39,947

Net restructuring charge (h)

11,182

Transaction expenses (c)

4,313

4,448

Adjusted EBITDA

$130,572

$115,623

$488,060

$444,442

Adjusted Net Income

Net income

$50,627

$18,070

$239,955

$84,694

Certain stock-based compensation expense (a)

2,652

6,816

14,241

39,947

Net restructuring charge (h)

11,182

Transaction expenses (d)

10,975

20,948

Amortization of intangible assets (b)

4,091

7,161

16,364

28,641

Amortization or write-off of debt issuance

costs and write-off of original issue discount

1,181

29,163

4,783

50,102

Net gain on sale of state and local transportation business (e)

(5,681)

Release of income tax reserves (f)

111

(35,022)

(10,966)

Adjustments for tax effect (g)

(7,643)

(21,646)

(18,628)

(55,855)

Adjusted Net Income

$62,201

$50,539

$227,194

$157,511

Adjusted Diluted Earnings Per Share

Weighted-average number of diluted shares outstanding

141,716,480

140,718,057

140,812,012

127,448,700

Adjusted Net Income per diluted share

$0.44

$0.36

$1.61

$1.24

Free Cash Flow

Net cash provided by operating activities

$108,027

$15,534

$360,046

$296,339

Less: Purchases of property and equipment

(11,367)

(27,351)

(76,925)

(88,784)

Free Cash Flow

$96,660

($11,817)

$283,121

$207,555

(a) Reflects stock-based compensation expense

for options for Class A Common Stock and

restricted shares, in each case, issued in

connection with the acquisition under the Officers’

Rollover Stock Plan that was established in

connection with the acquisition. Also reflects

stock-based compensation expense for Equity

Incentive Plan Class A Common Stock options

issued in connection with the acquisition under

the Equity Incentive Plan.

(b) Reflects amortization of intangible assets

resulting from the acquisition.

certain costs related to the modification of our

credit facilities in connection with the Refinancing

Transaction. Fiscal 2011 reflects debt refinancing

costs incurred in connection with the Refinancing

Transaction and certain external administrative

and other expenses incurred in connection with

the initial public offering.

(d) Three months ended March 31, 2011 reflects

certain costs related to the modification of our

credit facilities and prepayment fees associated

with early repayments on the mezzanine term

loan and credit facilities in connection with the

Refinancing Transaction. Fiscal 2011 reflects

debt refinancing costs and prepayment fees

incurred in connection with the Refinancing

Transaction as well as certain external

administrative and other expenses incurred in

connection with the initial public offering.

(e) Fiscal 2012 reflects the gain on sale of our

state and local transportation business, net of the

associated tax benefit of $1.6 million.

(f) Reflects the release of income tax reserves.

(g) Reflects tax effect of adjustments at an

assumed marginal tax rate of 40%.

(h) Reflects restructuring charges of

approximately $15.7 million incurred during the

three months ended March 31, 2012, net of

approximately $4.5 million of revenue recognized

on recoverable expenses, associated with the

cost restructuring plan to reduce certain personnel

and infrastructure costs.

Attached files

Booz Allen Hamilton Holding Corp Reports

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