Leidos Holdings, Inc. · NYSE:LDOS
Leidos — Q1 2020 Earnings Presentation
19 slides from Leidos's earnings presentation, May 5, 2020
Slide 1: Leidos 1Q 2020 Earnings Conference Call
Leidos 1Q 2020 Earnings Conference Call May 5, 2020
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: 1Q FY 2020 Highlights
1Q FY 2020 Highlights Continued Generated $2.9B of revenue Revenue Growth Year-over-year revenue growth of 12.1%; 8.2% organic growth(1) Acceleration Grew backlog to a record of $28.3B; 1.9x book-to-bill Healthy Cash Flow $372M cash flows from operations Generation Continued expectation to
Slide 4: Leidos 1Q FY 20 Results
Leidos 1Q FY 20 Results Revenue Non-GAAP Adjusted EBITDA Cash Flows from ($M) Diluted EPS Margin Operations ($) (%) ($M) $2,889 $372 +12.1% $1.19 10.1% $2,577 (+8.2% $1.13 +$84M organic) +5.3% 9.3% $288 -80bps 1Q FY19 1Q FY20 1Q FY19 1Q FY20 1Q FY19 1Q FY20 1Q FY19 1Q FY20 Note 1: Dotted line repres
Slide 5: Defense Solutions Segment
Defense Solutions Segment Revenue Non-GAAP Operating Income Non-GAAP Operating Margin ($M) ($M) (%) $1,705 8.0% $120 $116 +14.4% $1,491 (+5.7% 6.8% organic) -3.3% -120bps 1Q FY19 1Q FY20 1Q FY19 1Q FY20 1Q FY19 1Q FY20 Note 1: Dotted line represents organic revenue for the quarter; see appendix for
Slide 6: Civil Segment
Civil Segment Revenue Non-GAAP Operating Income Non-GAAP Operating Margin ($M) ($M) (%) 12.4% $623 $654 $77 +5% 10.9% (+6.9% $71 -150bps organic) -7.8% 1Q FY19 1Q FY20 1Q FY19 1Q FY20 1Q FY19 1Q FY20 Note 1: Dotted line represents organic revenue for the quarter; see appendix for calculation of orga
Slide 7: Health Segment
Health Segment Revenue Non-GAAP Operating Income Non-GAAP Operating Margin ($M) ($M) (%) $530 +14.5% 15.5% $463 (+18.5% $82 organic) +360bps +49.1% 11.9% $55 1Q FY19 1Q FY20 1Q FY19 1Q FY20 1Q FY19 1Q FY20 Note 1: Dotted line represents organic revenue for the quarter; see appendix for calculation o
Slide 8: Backlog & Book-to-Bill
Backlog & Book-to-Bill 28.3 23.9 24.1 Backlog1 ($B) 21.5 21.7 22.1 15.4 15.4 18.3 18.7 6.1 6.3 5.6 5.4 6.2 1Q FY19 2Q FY19 3Q FY19 4Q FY19 1Q FY20 1.8 1.8 1.9 Book-to-Bill22 Book-to-Bill 1.3 1.3 1.1 1.1 1.0 1.0 1Q 1Q FY19 FY19 2Q 2Q FY19 FY19 3Q 3Q FY19 FY19 4Q 4Q FY19 FY19 1Q 1Q FY20 FY20 Funded Ba
Slide 9: 2020 Guidance
2020 Guidance Current Prior Revenue $12.5B - $12.9B $12.6B - $13.0B Adjusted EBITDA Margin(1) 9.8% - 10.0% 10.0% - 10.2% Non-GAAP Diluted EPS(1,2) $5.00 - $5.30 $5.30 - $5.65 Operating Cash Flow Meet or exceed $1.0B(3) Meet or exceed $1.0B(3) (1) A quantitative reconciliation of adjusted EBITDA marg
Slide 10: Acquisition of L3 Harris' Security Detection & Automation Businesses
Acquisition of L3 Harris’ Security Detection & Automation Businesses Transaction closed on 5/4/2020 Cash consideration of $1.0 billion funded through a combination of cash on hand and Accretive Transaction two-year term loan Successfully Closed Immediately accretive to revenue growth, adjusted
Slide 11: Guidance Assumptions
Guidance Assumptions ~$290M of Security Detection & Automation acquisition revenue contribution in 2020 at mid- teens adjusted EBITDA margins ~$370M revenue impact for COVID & market uncertainties relative to prior guidance; expect Business Specific majority of this to be recovered in 2021 Facto
Slide 12: Appendix
Appendix »~ leidos
Slide 13: 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 margin, non-GAAP effective tax rate, non-GAAP diluted earnings per share (EPS), adjusted earnings before interest, taxes, depreciation and amortization (E
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 net income: (i) non-operating expense, net; (ii) income tax expense, and (iii) the following discrete items and the related tax impacts: Acquisition, integration and restructuring
Slide 15: Organic Revenue Calculation
Organic Revenue Calculation 1QFY19 2QFY19 3QFY19 4QFY19 1QFY20 (dollars in millions) Defense Solutions Revenues, as reported $ 1,491 $ 1,560 $ 1,594 $ 1,655 $ 1,705 Dynetics actual revenues (Acquired on 1/31/2020) - - - - 129 Pro-forma revenues $ 1,491 $ 1,560 $ 1,594 $ 1,655 $ 1,576 YoY revenue gro
Slide 16: Non-GAAP Operating Income Reconciliation
Non-GAAP Operating Income Reconciliation 1QFY19 2QFY19 3QFY19 4QFY19 FY19 1QFY20 (in millions) Operating income $ 192 $ 210 $ 249 $ 261 $ 912 $ 192 Acquisition, integration and restructuring costs 2 1 - 2 5 12 Amortization of acquired intangibles 42 43 43 43 171 42 Amortization of equity method inve
Slide 17: Reportable Segments Non-GAAP Operating Income Reconciliation
Reportable Segments Non-GAAP Operating Income Reconciliation Quarter Ended April 3, 2020 (in millions) Operating income Acquisition, integration Amortization of Amortization of equity Non-GAAP operating (loss) and restructuring costs acquired intangibles method investment income (loss) Defense Solut
Slide 18: Non-GAAP Financial Measures Reconciliation
Non-GAAP Financial Measures Reconciliation 1QFY19 2QFY19 3QFY19 4QFY19 FY19 1QFY20 (in millions, except per share amounts) Non-GAAP operating income $ 239 $ 256 $ 295 $ 309 $ 1,099 $ 246 Depreciation expense 15 14 16 16 61 18 Other income (expense), net 4 3 (7) (1) (1) 5 Amortization of internally d
Slide 19: Non-GAAP Financial Measures Reconciliation (cont'd)
Non-GAAP Financial Measures Reconciliation (cont’d) Quarter Ended April 3, 2020 (in millions, except per share amounts) Acquisition, integration Amortization of Acquisition related Loss on debt As reported and restructuring costs acquired intangibles financing costs modification Non-GAAP results Ope