Leidos Holdings, Inc. · NYSE:LDOS
Leidos — Q3 2018 Earnings Presentation
16 slides from Leidos's earnings presentation, Oct 25, 2018
Slide 1: Leidos 3Q 2018 Earnings Conference Call
Leidos 3Q 2018 Earnings Conference Call October 25, 2018
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain statements in this release contain or are based on "forward-looking" information within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by words such as "expects," "intends," "plans," "
Slide 3: 3Q FY 2018 Highlights
3Q FY 2018 Highlights Revenue growth: 2.9% year-over-year; 1.8% sequential Driving Growth 1.8x book-to-bill Record backlog of $20.3B Generating Strong $371M cash flow from operations Cash Flow 199% conversion of non-GAAP net income to free cash* $62M share repurchase; $162M year-to-date
Slide 4: Leidos 3Q FY 18 Results
Leidos 3Q FY 18 Results Revenue Non-GAAP Adjusted EBITDA Cash Flow from ($B) Diluted EPS Margin Operations ($) (%) ($M) $371 10.9 $1.14 % 10.8% $2.6 +$104M $2.5 $0.95 +20% +2.9% -10bps $267 3Q FY 17 3Q FY 18 3Q FY 17 3Q FY 18 3Q FY 17 3Q FY 18 3Q FY 17 3Q FY18 Note: See appendix for definition & rec
Slide 5: Backlog & Book-to-Bill
Backlog & Book-to-Bill 20.3 17.7 17.5 17.6 18.3 Backlog1 ($B) 14.2 12.1 12.5 13.0 13.0 5.6 5.0 4.6 5.3 6.1 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 1.8 Book to Bill2 1.4 1.2 0.9 1.0 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 Funded Backlog Negotiated Unfunded Backlog (1) Backlog presented at exchange rate in effe
Slide 6: Defense Solutions Segment
Defense Solutions Segment Revenue Non-GAAP Operating Income Non-GAAP Operating Margin ($M) ($M) (%) 8.4% 8.4% $1,201 $1,249 $101 $105 Flat +4.0% +4.0% 3Q FY 17 3Q FY 18 3Q FY 17 3Q FY 18 3Q FY 17 3Q FY 18 Note: See appendix for definition & reconciliation of Non-GAAP Financial Measures 6
Slide 7: Civil Segment
Civil Segment Revenue Non-GAAP Operating Income Non-GAAP Operating Margin ($M) ($M) (%) 13.3% $882 $117 $838 +210 bps +5.3% $94 11.2% +24% 3Q FY 17 3Q FY 18 3Q FY 17 3Q FY 18 3Q FY 17 3Q FY 18 Note: See appendix for definition & reconciliation of Non-GAAP Financial Measures 7
Slide 8: Health Segment
Health Segment Revenue Non-GAAP Operating Income Non-GAAP Operating Margin ($M) ($M) (%) $464 16.4% $444 $76 14.2% -4.3% $63 - 220bps -17.1% 3Q FY 17 3Q FY 18 3Q FY 17 3Q FY 18 3Q FY 17 3Q FY 18 Note: See appendix for definition & reconciliation of Non-GAAP Financial Measures 8
Slide 9: 2018 Guidance
2018 Guidance Current Prior Revenue $10.1B - $10.3B $10.25B - $10.65B Adjusted EBITDA Margin(1) 10.2% - 10.4% 10.1% - 10.4% Non-GAAP Diluted EPS(1,2) $4.20 - $4.40 $4.15 - $4.50 Operating Cash Flow Meet or exceed $775M(3) Meet or exceed $675M(3) (1) A quantitative reconciliation of adjusted EBITDA m
Slide 10: Appendix
Appendix * leidos
Slide 11: Non-GAAP Financial Measures
Non-GAAP Financial Measures This presentation includes certain non-GAAP financial measures, such as non-GAAP operating income, non-GAAP operating income margin, non-GAAP diluted earnings per share (EPS), adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), free cash flow
Slide 12: Definition of Non-GAAP Financial Measures
Definition of Non-GAAP Financial Measures Non-GAAP operating income is computed by excluding the following items from net income: (i) non-operating expense, net; (ii) adjustments to the income tax provision to reflect non-GAAP adjustments; and (iii) the following discrete items: Integration and re
Slide 13: Non-GAAP Operating Income Reconciliation
Non-GAAP Operating Income Reconciliation 1QFY17 2QFY17 3QFY17 4QFY17 FY17 1QFY18 2QFY18 3QFY18 (in millions) Operating income $ 141 $ 166 $ 151 $ 101 $ 559 $ 159 $ 199 $ 203 Integration and restructuring costs 32 22 27 58 139 17 8 7 Amortization of acquired intangible assets 69 67 76 69 281 50 51 50
Slide 14: Non-GAAP Financial Measures Reconciliation
Non-GAAP Financial Measures Reconciliation 1QFY172 2QFY172 3QFY17 4QFY17 FY17 1QFY18 2QFY18 3QFY18 (in millions, except per share amounts) Non-GAAP operating income $ 242 $ 264 $ 256 $ 231 $ 993 $ 236 $ 260 $ 262 Depreciation expense 13 13 16 13 55 13 15 14 Other income, net 3 4 - 1 8 - 1 2 Adjusted
Slide 15: Non-GAAP Financial Measures Reconciliation (cont'd)
Non-GAAP Financial Measures Reconciliation (cont’d) Quarter Ended September 28, 2018 (in millions, except per share amounts) Integration and Amortization of Amortization of equity Tax adjustments on Other tax As reported restructuring costs intangibles method investment assets held for sale adjustme
Slide 16: Reportable Segment Non-GAAP Operating Income Reconciliation
Reportable Segment Non-GAAP Operating Income Reconciliation Quarter Ended September 28, 2018 (in millions) Operating income Integration and Amortization of Amortization of equity Non-GAAP operating (loss) restructuring costs intangibles method investment income (loss) Defense Solutions $ 88 $ - $ 17