Leidos Holdings, Inc. · NYSE:LDOS
Leidos — Q2 2020 Earnings Presentation
18 slides from Leidos's earnings presentation, Aug 4, 2020
Slide 1: Leidos 2Q 2020 Earnings Conference Call
Leidos 2Q 2020 Earnings Conference Call August 4, 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: 2Q FY 2020 Highlights
2Q FY 2020 Highlights Generated $2.9B of revenue Continued Year-over-year revenue growth of 6.8% Revenue Growth Adjusted EBITDA margins of 11.8% Grew backlog to a record of $30.7B; 1.6x book-to-bill Healthy Cash Flow $422M cash flows from operations Generation 169%(1) free cash flow conv
Slide 4: Leidos 2Q FY 20 Results
Leidos 2Q FY 20 Results Revenue Non-GAAP Adjusted EBITDA Cash Flows from ($M) Diluted EPS Margin Operations ($) (%) ($M) $2,914 $422 $2,728 +6.8% $1.55 11.8% (-3.0% +$236M organic) +33.6% 10.0% +180bps $1.16 $186 2Q FY19 2Q FY20 2Q FY19 2Q FY20 2Q FY19 2Q FY20 2Q FY19 2Q FY20 Note 1: Dotted line rep
Slide 5: Defense Solutions Segment
Defense Solutions Segment Revenue Non-GAAP Operating Income Non-GAAP Operating Margin ($M) ($M) (%) $143 8.3% 8.1% $1,757 $129 -20bps +10.9% $1,560 +12.6% (-0.6% organic) 2Q FY19 2Q FY20 2Q FY19 2Q FY20 2Q FY19 2Q FY20 Note 1: Dotted line represents organic revenue for the quarter; see appendix for
Slide 6: Civil Segment
Civil Segment Revenue Non-GAAP Operating Income Non-GAAP Operating Margin ($M) ($M) (%) $758 12.9% +13.6% $667 (+1.6% +180bps organic) 11.1% $98 +32.4% $74 2Q FY19 2Q FY20 2Q FY19 2Q FY20 2Q FY19 2Q FY20 Note 1: Dotted line represents organic revenue for the quarter; see appendix for calculation of
Slide 7: Health Segment
Health Segment Revenue Non-GAAP Operating Income Non-GAAP Operating Margin ($M) ($M) (%) $501 14.4% $399 $72 -20.4% (-17.3% organic) 5.3% $21 -910bps -70.8% 2Q FY19 2Q FY20 2Q FY19 2Q FY20 2Q FY19 2Q FY20 Note 1: Dotted line represents organic revenue for the quarter; see appendix for calculation of
Slide 8: Backlog & Book-to-Bill
Backlog & Book-to-Bill 30.7 28.3 Backlog1 ($B) 23.9 24.1 21.7 23.6 22.1 15.4 18.3 18.7 6.3 5.6 5.4 6.2 7.1 2Q FY19 3Q FY19 4Q FY19 1Q FY20 2Q FY20 Funded Backlog Negotiated Unfunded Backlog 1.8 1.9 Book-to-Bill22 1.6 Book-to-Bill 1.3 1.3 1.6 1.3 1.4 1.1 1.0 2Q FY19 3Q FY19 4Q FY19 1Q FY20 2Q FY20 Qu
Slide 9: 2020 Guidance
2020 Guidance Current Prior Revenue $12.2B - $12.6B $12.5B - $12.9B Adjusted EBITDA Margin(1) 10.0% - 10.2% 9.8% - 10.0% Non-GAAP Diluted EPS(1)(2) $5.25 - $5.55 $5.00 - $5.30 Operating Cash Flow(3) Meet or exceed $1.2B Meet or exceed $1.0B (1) A quantitative reconciliation of adjusted EBITDA margin
Slide 10: Guidance Assumptions
Guidance Assumptions ~$300M additional revenue impact for COVID-19 and program volume and delays (e.g. Navy NGEN & others) relative to prior guidance; expect majority of this to be recovered in 2021 Business Specific Return to previously closed customer work locations at the start of the 4th qua
Slide 11: Appendix
Appendix »~ leidos
Slide 12: 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 13: 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 14: Organic Revenue Calculation
Organic Revenue Calculation 1QFY19 2QFY19 3QFY19 4QFY19 1QFY20 2QFY20 (dollars in millions) Defense Solutions Revenues, as reported $ 1,491 $ 1,560 $ 1,594 $ 1,655 $ 1,705 $ 1,757 Dynetics actual revenues (Acquired on 1/31/2020) - - - - 129 206 Pro-forma revenues $ 1,491 $ 1,560 $ 1,594 $ 1,655 $ 1,
Slide 15: Non-GAAP Operating Income Reconciliation
Non-GAAP Operating Income Reconciliation 1QFY19 2QFY19 3QFY19 4QFY19 FY19 1QFY20 2QFY20 (in millions) Operating income $ 192 $ 210 $ 249 $ 261 $ 912 $ 192 $ 249 Acquisition, integration and restructuring costs 2 1 - 2 5 12 16 Amortization of acquired intangibles 42 43 43 43 171 42 51 Asset impairmen
Slide 16: Reportable Segments Non-GAAP Operating Income Reconciliation
Reportable Segments Non-GAAP Operating Income Reconciliation Quarter Ended July 3, 2020 (in millions) Acquisition, integration Amortization of Asset Impairment Non-GAAP operating Operating income and restructuring costs acquired intangibles charges income Defense Solutions $ 119 $ 1 $ 23 $ - $ 143 C
Slide 17: Non-GAAP Financial Measures Reconciliation
Non-GAAP Financial Measures Reconciliation 1QFY19 2QFY19 3QFY19 4QFY19 FY19 1QFY20 2QFY20 (in millions, except per share amounts) Non-GAAP operating income $ 239 $ 256 $ 295 $ 309 $ 1,099 $ 246 $ 327 Depreciation expense 15 14 16 16 61 18 20 Other income (expense), net 4 3 (7) (1) (1) 5 (4) Amortiza
Slide 18: Non-GAAP Financial Measures Reconciliation (cont'd)
Non-GAAP Financial Measures Reconciliation (cont’d) Quarter Ended July 3, 2020 (in millions, except per share amounts) Acquisition, integration Amortization of Acquisition related Loss on debt Asset Impairment As reported and restructuring costs acquired intangibles financing costs modification char