Leidos Holdings, Inc. · NYSE:LDOS
Leidos — Q3 2020 Earnings Presentation
18 slides from Leidos's earnings presentation, Nov 2, 2020
Slide 1: Leidos 3Q 2020 Earnings Conference Call
Leidos 3Q 2020 Earnings Conference Call November 2, 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: 3Q FY 2020 Highlights
3Q FY 2020 Highlights Generated record revenue of $3.2B Continued Delivered year-over-year revenue growth of 14.4%; 1.7% organic growth(1) Revenue Growth Grew backlog to a record of $31.7B; 1.3x book-to-bill Achieved adjusted EBITDA margins of 10.7% Operating Margin Mitigated COVID-19 prof
Slide 4: Leidos 3Q FY 20 Results
Leidos 3Q FY 20 Results Revenue Non-GAAP Adjusted EBITDA Cash Flows from ($M) Diluted EPS Margin Operations ($) (%) ($M) $3,242 +14.4% $2,835 (+1.7% $1.47 organic) $1.36 10.7% 10.7% $592 +8.1% +$243M $349 3Q FY19 3Q FY20 3Q FY19 3Q FY20 3Q FY19 3Q FY20 3Q FY19 3Q FY20 Note 1: Dotted line represents
Slide 5: Defense Solutions Segment
Defense Solutions Segment Revenue Non-GAAP Operating Income Non-GAAP Operating Margin ($M) ($M) (%) $1,951 $171 8.8% +22.4% (+3.5% +39.0% 7.7% +110bps $1,594 organic) $123 3Q FY19 3Q FY20 3Q FY19 3Q FY20 3Q FY19 3Q FY20 Note 1: Dotted line represents organic revenue for the quarter; see appendix for
Slide 6: Civil Segment
Civil Segment Revenue Non-GAAP Operating Income Non-GAAP Operating Margin ($M) ($M) (%) $771 $733 +5.2% $81 (-4.9% organic) 10.5% +32.8% $61 8.3% +220bps 3Q FY19 3Q FY20 3Q FY19 3Q FY20 3Q FY19 3Q FY20 Note 1: Dotted line represents organic revenue for the quarter; see appendix for calculation of or
Slide 7: Health Segment
Health Segment Revenue Non-GAAP Operating Income Non-GAAP Operating Margin ($M) ($M) (%) $520 16.3% $508 $85 +2.4% 14.8% +150bps (+5.8% organic) $75 +13.3% 3Q FY19 3Q FY20 3Q FY19 3Q FY20 3Q FY19 3Q FY20 Note 1: Dotted line represents organic revenue for the quarter; see appendix for calculation of
Slide 8: Backlog & Book-to-Bill
Backlog & Book-to-Bill 30.7 31.7 28.3 Backlog1 ($B) 23.9 24.1 23.6 24.9 22.1 18.3 18.7 5.6 5.4 6.2 7.1 6.8 3Q FY19 4Q FY19 1Q FY20 2Q FY20 3Q FY20 Funded Backlog Negotiated Unfunded Backlog 1.8 1.9 Book-to-Bill22 1.6 1.5 Book-to-Bill 1.3 1.4 1.6 1.3 1.3 1.0 3Q FY19 4Q FY19 1Q FY20 2Q FY20 3Q FY20 Qu
Slide 9: 2020 Guidance
2020 Guidance Current Prior Revenue $12.3B - $12.5B $12.2B - $12.6B Adjusted EBITDA Margin(1) 10.6% - 10.8% 10.0% - 10.2% Non-GAAP Diluted EPS(1)(2) $5.65 - $5.85 $5.25 - $5.55 Operating Cash Flow(3) Meet or exceed $1.2B(4) Meet or exceed $1.2B(5) (1) A quantitative reconciliation of adjusted EBITDA
Slide 10: Guidance Assumptions
Guidance Assumptions Return to additional closed customer work locations at the start of the 4th quarter Business Specific Return to normalized revenue, margin mix, and run-rate by the start of the 4th quarter Factors Severity and duration of COVID-19 outbreak do not worsen beyond our current
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 3QFY20 (dollars in millions) Defense Solutions Revenues, as reported $ 1,491 $ 1,560 $ 1,594 $ 1,655 $ 1,705 $ 1,757 $ 1,951 Dynetics actual revenues (Acquired on 1/31/2020) - - - - 129 206 302 Pro-forma revenues $ 1,491 $ 1,560 $
Slide 15: Non-GAAP Operating Income Reconciliation
Non-GAAP Operating Income Reconciliation 1QFY19 2QFY19 3QFY19 4QFY19 FY19 1QFY20 2QFY20 3QFY20 (in millions) Operating income $ 192 $ 210 $ 249 $ 261 $ 912 $ 192 $ 249 $ 258 Acquisition, integration and restructuring costs 2 1 - 2 5 12 16 5 Amortization of acquired intangibles 42 43 43 43 171 42 51
Slide 16: Reportable Segments Non-GAAP Operating Income Reconciliation
Reportable Segments Non-GAAP Operating Income Reconciliation Quarter Ended October 2, 2020 (in millions) Acquisition, integration Amortization of Amortization of equity Non-GAAP operating Operating income and restructuring costs acquired intangibles method investment income Defense Solutions $ 145 $
Slide 17: Non-GAAP Financial Measures Reconciliation
Non-GAAP Financial Measures Reconciliation 1QFY19 2QFY19 3QFY19 4QFY19 FY19 1QFY20 2QFY20 3QFY20 (in millions, except per share amounts) Non-GAAP operating income $ 239 $ 256 $ 295 $ 309 $ 1,099 $ 246 $ 327 $ 324 Depreciation expense 15 14 16 16 61 18 20 22 Other income (expense), net 4 3 (7) (1) (1
Slide 18: Non-GAAP Financial Measures Reconciliation (cont'd)
Non-GAAP Financial Measures Reconciliation (cont’d) Quarter Ended October 2, 2020 (in millions, except per share amounts) Acquisition, integration Amortization of Amortization of equity As reported and restructuring costs acquired intangibles method investment Non-GAAP results Operating income $ 258