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| 8-K - FORM 8-K - Booz Allen Hamilton Holding Corp | d429184d8k.htm |
| EX-99.1 - PRESS RELEASE - Booz Allen Hamilton Holding Corp | d429184dex991.htm |
 Booz
Allen Hamilton Second Quarter Fiscal 2013
October 31, 2012
Exhibit 99.2 |
 Curt
Riggle Director, Investor Relations
Introduction
Today’s Agenda
Ralph Shrader
Chairman, Chief Executive Officer and President
Management
Overview
Sam Strickland
Executive Vice President and Chief Financial Officer
Financial
Overview
Questions and
Answers
1 |
 Disclaimers
2
Forward Looking Safe Harbor Statement
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.
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, including
automatic sequestration required by the Budget Control Act of 2011, 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 to 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; failure to comply with
special U.S. government laws and regulations relating to our international operations; 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; our ability to realize the expected benefits from our acquisition of the DSES division of ARINC Incorporated; risks related to future
acquisitions; an inability to utilize existing or future tax benefits, including those related to
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 10-K, filed with the SEC on May 30, 2012. All
forward-looking statements attributable to Booz Allen or persons acting on Booz Allen’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, Booz Allen undertakes no
obligation to update or revise publicly any forward-looking statements, whether as a result
of new information, future events or otherwise. |
 Fiscal Year-to-Date 2013
Business Highlights
Continued adjusted
earnings growth, margin expansion, and cash
generation
Total Shareholder Returns of 68% for LTM ended September 30, 2012
–
Recurring $0.09 quarterly dividend
–
Payment of $8.00 in special dividends Fiscal Year to Date
Book-to-bill ratio of 2.6 at the end of Fiscal Q2 (end of Government
FY) Signed definitive agreement to purchase Defense Systems Engineering and
Support (DSES) division of ARINC using available cash on hand
Committed to impress clients, win work over competitors, and ensure Booz
Allen is the best firm to work for
3 |
 Key
Financial Highlights Comparisons are to prior fiscal year period
4
Revenue
$1.39 billion
Down 2.9%
Net Income
$46.1 million
Down 38.8%
Adjusted Net Income
$55.7 million
Up 10.0%
Adjusted EBITDA
$123.8 million
Up 8.2%
Diluted EPS
$0.27/share
Down from $0.53/share
Adjusted Diluted EPS
$0.39/share
Up from $0.36/share
Total Backlog
$12.4 billion
Down 3.2%
Preliminary
Second Quarter Fiscal 2013 Results |
 Key
Financial Highlights Comparisons are to prior fiscal year period
5
Revenue
$2.82 billion
Down 1.9%
Net Income
$108.1 million
Down 14.6%
Adjusted Net Income
$121.7 million
Up 12.0%
Adjusted EBITDA
$259.5 million
Up 9.3%
Diluted EPS
$0.69/share
Down from $0.90/share
Adjusted Diluted EPS
$0.85/share
Up from $0.77/share
Preliminary
First Half 2013 Results |
 Value Drivers
Managing our business with agility and precision
Enhancing margins and a focus on long-term performance
Investing in growth markets and capabilities
Deploying capital to deliver value to stockholders
Balancing our historic focus on organic growth with strategically-aligned
inorganic growth
Establishing a strategic vision that positions Booz Allen well for the
future Helping clients with their most important missions with a passion for
their success
6 |
 Outlook
Revenue growth forecast:
Flat
for
the
2
nd
Half
of
Fiscal
2013
Diluted EPS forecast:
$1.40 -
$1.50
Adjusted Diluted EPS
forecast:
$1.60 -
$1.70
7
Full Fiscal Year 2013 Estimated Weighted Average Diluted Share Count: 144.5
million Fiscal 2013 Outlook |
 Financial Appendix
8 |
 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) adjustments related to the amortization of
intangible assets, and (iii) 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,
including
fees
associated
with
debt
prepayments, and (iii) any extraordinary, unusual or non-recurring items. Booz
Allen prepares Adjusted EBITDA 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 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) adjustments related to the amortization of intangible assets,
(iv) amortization or write-off of debt issuance costs and write-off
of original issue discount and (v) 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 taxes, 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. Additionally, Adjusted Diluted EPS does not contemplate any
adjustments to Net Income as required under the two-class method of
calculating EPS as required in accordance with GAAP. “Free
Cash
Flow”
represents
the
net
cash
generated
from
operating
activities
less
the
impact
of
purchases
of
property and equipment.
9 |
 Booz Allen Hamilton Holding Corporation
Non-GAAP Financial Information
10
(Unaudited and in thousands, except share and per share data)
Three Months Ended
September 30,
Six Months Ended
September 30,
2012
2011
2012
2011
Adjusted Operating Income
Operating Income
$102,029
$93,665
$216,765
$191,787
Certain stock-based compensation expense (a)
1,465
2,274
3,858
9,171
Amortization of intangible assets (b)
3,126
4,091
6,259
8,182
Transaction expenses (c)
2,725
-
2,725
-
Adjusted Operating Income
$109,345
$100,030
$229,607
$209,140
EBITDA & Adjusted EBITDA
Net income
$46,116
$75,332
$108,061
$126,468
Income tax expense
30,759
10,190
71,821
44,440
Interest and other, net
25,154
8,143
36,883
20,879
Depreciation and amortization
17,613
18,536
36,116
36,394
EBITDA
119,642
112,201
252,881
228,181
Certain stock-based compensation expense (a)
1,465
2,274
3,858
9,171
Transaction expenses (c)
2,725
-
2,725
-
Adjusted EBITDA
$123,832
$114,475
$259,464
$237,352
Adjusted Net Income
Net income
$46,116
$75,332
$108,061
$126,468
Certain stock-based compensation expense (a)
1,465
2,274
3,858
9,171
Transaction expenses (c)
2,725
-
2,725
-
Amortization of intangible assets (b)
3,126
4,091
6,259
8,182
Amortization or write-off of debt issuance
costs and write-off of original issue discount
8,628
1,206
9,826
2,400
Net gain on sale of state and local transportation business (d)
-
(5,681)
-
(5,681)
Release of income tax reserves (e)
-
(23,584)
-
(24,048)
Adjustments for tax effect (f)
(6,378)
(3,028)
(9,068)
(7,901)
Adjusted Net Income
$55,682
$50,610
$121,661
$108,591
Adjusted Diluted Earnings Per Share
Weighted-average number of diluted shares outstanding
144,249,162
141,259,964
143,648,477
140,600,986
Adjusted Net Income per diluted share (g)
$0.39
$0.36
$0.85
$0.77
Free Cash Flow
Net cash provided by operating activities
$315,705
$123,273
$389,748
$177,117
Less: Purchases of property and equipment
(10,406)
(26,039)
(14,375)
(43,640)
Free Cash Flow
$305,299
$97,234
$375,373
$133,477
(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 of
our Company by The Carlyle Group (the
Acquisition) under the Officers' Rollover
Stock Plan. 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.
(c) Reflects debt refinancing costs incurred
in connection with the Recapitalization
Transaction consummated on July 31,
2012.
(d) Three and six months ended September
30, 2011 reflects the gain on sale of our
state and local transportation business, net
of the associated tax benefit of $1.6 million.
(e) Reflects the release of income tax
reserves.
(f) Reflects tax effect of adjustments at an
assumed marginal tax rate of 40%.
(g) Excludes an adjustment of
approximately $7.6 million and $8.9 million
of net earnings for the three and six months
ended September 30, 2012, respectively,
associated with the application of the two-
class method for computing diluted
earnings per share. |