Attached files
| file | filename |
|---|---|
| EX-99.1 - EXHIBIT 99.1 - Booz Allen Hamilton Holding Corp | bah063016exhibit991.htm |
| 8-K - 8-K - Booz Allen Hamilton Holding Corp | fy2017q18kearningsrelease.htm |
Fiscal Year 2017 Q1
E A R N I N G S C A L L P R E S E N TAT I O N
Today’s Agenda
1
Curt Riggle
Vice President, Investor Relations Introduction
Horacio Rozanski
President and Chief Executive Officer
Management
Overview
Lloyd Howell
Executive Vice President and Chief Financial Officer
Financial
Results / Outlook
Question &
Answer
Disclaimer
Forward Looking Safe Harbor Statement
Certain statements contained in this press release and in related comments by our management include “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 forecasted revenue, Diluted EPS, and Adjusted Diluted EPS, future quarterly
dividends, and future improvements in operating margins, 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. A number of important factors could cause actual
results to differ materially from those contained in or implied by these forward-looking statements, including those factors discussed in our filings with
the Securities and Exchange Commission (SEC), including our Annual Report on Form 10-K for the fiscal year ended March 31, 2016, which can be
found at the SEC’s website at www.sec.gov. All forward-looking statements attributable to us or persons acting on our 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, we
undertake 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 net cash provided by operating activities to free cash flows, 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. With respect to our expectations under “Fiscal 2017 Full Year Outlook on slide 5, reconciliation of Adjusted
Diluted EPS guidance to the closest corresponding GAAP measure is not available without unreasonable efforts on a forward-looking basis due to our
inability to predict our stock price, equity grants and dividend declarations during the course of fiscal 2017. Projecting future stock price, equity grants
and dividends to be declared would be necessary to accurately calculate the difference between Adjusted Diluted EPS and GAAP EPS as a result of
the effects of the two-class method and related possible dilution used in the calculation of EPS. Consequently, any attempt to disclose such
reconciliation would imply a degree of precision that could be confusing or misleading to investors. We expect the variability of the above charges to
have an unpredictable, and potentially significant, impact on our future GAAP financial results.
2
Fiscal Year 2017 First Quarter Highlights
Reporting a solid First Quarter that positions us well for the full year
Delivered top and bottom line in line with our plan
Key priorities for Fiscal Year 2017
− Aggressively pursue opportunities in a market that continues to signal demand
− Deliver the highest quality of work to our clients
− Further operationalize our investments in advanced capabilities and talent
− Improve organic growth while operating with agility and efficiency
Differentiated by the powerful combination of consulting expertise, domain knowledge, and
technical capabilities
First quarter results underscore that Booz Allen is on the path toward sustainable quality growth
− Made the right investments for the future
− Demonstrating growth earlier and faster than competitors
3
Revenue $1.4 billion 5.3% Increase
Net Income $67.8 million 5.5% Increase
Adjusted Net Income $69.3 million 5.4% Increase
Adjusted EBITDA $143.8 million 1.8% Increase
Diluted EPS $0.45 4.7% Increase
Adjusted Diluted EPS $0.46 4.6% Increase
Total Backlog $12 billion 29.8% Increase
Key Financial Results
4
Comparisons are to prior fiscal year period
Preliminary First Quarter Fiscal 2017 Results
Financial Outlook
5
Fiscal 2017 Full Year Outlook
Revenue growth forecast:
Growth in the Range of
Two to Five Percent
Diluted EPS forecast (1): $1.60 - $1.70
Adjusted Diluted EPS forecast (1): $1.65 - $1.75
(1) Full Fiscal Year 2017 Estimated Weighted Average Diluted Share Count of 150.0 million shares; assumes an effective tax rate of 40.1%,
which does not include federal and state tax credits for which qualification has not yet been established.
Executing our Strategy
We made a deliberate choice more than three years ago to immerse Booz Allen in the “innovation
ecosystem”
− Technology is changing and developing faster than ever
− We anticipated our clients’ needs to take advantage of technological change
Benefits of our strategic partnerships and alliances
− Keeps us in the constant flow of ideas
− Helps us stay ahead of the market and deliver the best, most advanced solutions
− Enables us to serve as a technology translator for our clients
Established an iHub Network in cities where technology and innovation are already driving forces
− Boston, St. Louis, Austin, Seattle, San Francisco, and other locations
− iHubs build connections with local companies, start-up accelerators, and academia
− Innovation Center in DC fosters collaboration with partners and clients
External partnerships and alliances are foundational elements in achieving sustainable, quality growth
− Keeps Booz Allen on the leading edge of technological change
− Supports the creation of differentiated, profitable positions in high-demand areas
− Broadens our clients’ thinking about what we can do for them
− Helps us recruit and retain highly skilled people
6
Booz Allen Hamilton Holding Corporation
Non-GAAP Financial Information
8
"Adjusted Operating Income" represents operating income before adjustments related to the
amortization of intangible assets. We prepare Adjusted Operating Income to eliminate the impact of
items we do 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. We prepare Adjusted EBITDA to eliminate
the impact of items we do 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) adjustments related to the amortization of
intangible assets, and (ii) amortization or write-off of debt issuance costs and write-off of original issue
discount, net of the tax effect where appropriate calculated using an assumed effective tax rate. We
prepare Adjusted Net Income to eliminate the impact of items, net of tax, we do 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 as disclosed in the footnotes to the financial statements.
"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
9
(Amounts in thousands, except share and per share data) 2016 2015
Adjusted Operating Income
Operating Income
129,301$ 126,144$
Amortization of intangible assets (a)
1,126 1,056
Adjusted Operating Income
130,427$ 127,200$
EBITDA & Adjusted EBITDA
Net income
67,817$ 64,306$
Income tax expense
45,547 44,280
Interest and other, net
15,937 17,558
Depreciation and amortization
14,501 15,117
EBITDA & Adjusted EBITDA
143,802 141,261
Adjusted Net Income
Net income
67,817$ 64,306$
Amortization of intangible assets (a)
1,126 1,056
Amortization or write-off of debt issuance costs and write-off of original
issue discount 1,289 1,294
Adjustments for tax effect (b)
(966) (940)
Adjusted Net Income
69,266$ 65,716$
Adjusted Diluted Earnings Per Share
Weighted-average number of diluted shares outstanding
149,634,592 149,271,321
Adjusted Net Income Per Diluted Share (c)
0.46$ 0.44$
Free Cash Flow
Net cash provided by operating activities
11,647$ 19,096$
Less: Purchases of property and equipment
(6,171) (13,140)
Free Cash Flow
5,476$ 5,956$
(Unaudited)
Three Months Ended
June 30,
(a) Reflects amortization of intangible assets resulting from
the Acquisition of our Company by The Carlyle Group.
(b) Reflects tax effect of adjustments at an assumed
marginal tax rate of 40%.
(c) Excludes an adjustm nt of approximately $0.6 million
and $0.7 million of net earnings for the three months
ended June 30, 2016 and 2015 respectively, associated
with the application of the two-class method for computing
diluted earnings per share.