- Revenues of $1.78 billion; 8.3% organic growth adjusted for
impact of divestitures
- Net income of $247 million; Adjusted EBITDA(1) of $174
million or 9.8% as a % of revenues, an increase of 70 bps
year-over-year
- Diluted earnings per share of $4.56; Adjusted diluted
earnings per share(1) of $2.05
- Cash flows provided by operating activities of $150 million;
Transaction-adjusted free cash flow(1) of $143 million
- Company increases revenue, adjusted EBITDA margin(1), and
adjusted diluted EPS(1) guidance for fiscal year 2024
Science Applications International Corporation (NYSE: SAIC), a
premier Fortune 500® technology integrator driving our nation's
digital transformation across the defense, space, civilian, and
intelligence markets, today announced results for the second
quarter ended August 4, 2023.
“I am proud of the financial performance we
delivered in the quarter with both strong organic revenue growth
and margin expansion. We remain on track to achieve our three year
financial targets and are off to a strong start,” said SAIC CEO
Nazzic Keene. "Our focus remains on building and sustaining our
high-performance culture to deliver value for our employees,
customers, and shareholders."
Second Quarter of Fiscal Year 2024:
Summary Operating Results
Three Months Ended
August 4, 2023
Percent
change
July 29, 2022
(in millions, except per share
amounts)
Revenues
$
1,784
(3
)%
$
1,831
Operating income
362
190
%
125
Operating income as a percentage of
revenues
20.3
%
1,350 bps
6.8
%
Adjusted operating income(1)
134
7
%
125
Adjusted operating income as a percentage
of revenues
7.5
%
70 bps
6.8
%
Net income
247
234
%
74
EBITDA(1)
402
142
%
166
EBITDA as a percentage of revenues
22.5
%
1,340 bps
9.1
%
Adjusted EBITDA(1)
174
5
%
166
Adjusted EBITDA as a percentage of
revenues
9.8
%
70 bps
9.1
%
Diluted earnings per share
$
4.56
251
%
$
1.30
Adjusted diluted earnings per share(1)
$
2.05
17
%
$
1.75
Net cash provided by operating
activities
$
150
6
%
$
141
Free cash flow(1)
$
144
95
%
$
74
Transaction-adjusted free cash flow(1)
$
143
93
%
$
74
(1)Non-GAAP measure, see Schedule 5 for
information about this measure.
Second Quarter Summary
Results
Revenues for the quarter decreased $47 million or 3% compared to
the same period in the prior year primarily due to the sale of the
logistics and supply chain management business (Supply Chain
Business) ($149 million), the deconsolidation of the Forfeiture
Support Associates J.V. (FSA) ($34 million), and contract
completions, partially offset by ramp up on existing and new
contracts. Adjusting for the impact of the divestiture of the
Supply Chain Business and the deconsolidation of FSA, revenues grew
8.3%.
Operating income as a percentage of revenues increased from the
comparable prior year period primarily due to the gain recognized
from the sale of the Supply Chain Business, improved profitability
across our contract portfolio, and lower indirect costs.
Adjusted EBITDA(1) as a percentage of revenues for the quarter
increased to 9.8% from 9.1% for the same period in the prior year
primarily due to improved profitability across our contract
portfolio and lower indirect costs.
Diluted earnings per share for the quarter was $4.56 compared to
$1.30 in the prior year quarter. Adjusted diluted earnings per
share(1) for the quarter was $2.05 compared to $1.75 in the prior
year quarter. The weighted-average diluted shares outstanding
during the quarter decreased to 53.9 million from 55.9 million
during the prior year quarter.
Cash Generation and Capital
Deployment
Cash flows provided by operating activities for the second
quarter increased $9 million compared to the prior year quarter,
primarily due to the timing of payroll payments, partially offset
by higher cash provided by the MARPA Facility in the prior year and
higher tax payments in the current year.
During the quarter, SAIC deployed $126 million of capital,
consisting of $100 million of plan share repurchases, $20 million
in cash dividends, and $6 million of capital expenditures.
Sale of Logistics and Supply Chain
Management Business
On May 6, 2023, SAIC closed the sale of its logistics and supply
chain management business to ASRC Federal Holding Company, LLC for
$356 million in cash, including $355 million received at closing
and a post-closing adjustment for working capital. The divestiture
is consistent with SAIC’s broader strategy to focus on Growth &
Technology Accelerants and on innovative, platform-agnostic
solutions that add shareholder value. SAIC recorded a preliminary
pre-tax gain of $233 million, net of $7 million of transaction
costs, which is included within other operating income on the
condensed and consolidated statements of income.
Quarterly Dividend
Declared
On September 6, 2023, the Company's Board of Directors declared
a cash dividend of $0.37 per share of the Company's common stock
payable on October 27, 2023 to stockholders of record on October
13, 2023. SAIC intends to continue paying dividends on a quarterly
basis, although the declaration of any future dividends will be
determined by the Board of Directors each quarter and will depend
on earnings, financial condition, capital requirements and other
factors.
(1)Non-GAAP measure, see Schedule 5 for
information about this measure.
Backlog and Contract
Awards
Net bookings for the quarter were approximately $0.7 billion,
which reflects a book-to-bill ratio of 0.4 and a trailing twelve
months book-to-bill ratio of 0.8. SAIC’s estimated backlog at the
end of the quarter was approximately $22.5 billion. Of the total
backlog amount, approximately $3.7 billion was funded.
Notable New Business Awards:
U.S. Department of Treasury: SAIC was awarded a $1.3
billion seven-year single-award indefinite delivery, indefinite
quantity (IDIQ) contract by the Department of the Treasury to
provide T-Cloud, a complete range of cloud and professional
services. The T-Cloud contract supports Treasury’s adoption and
transformation of a multi-cloud environment by centralizing
management of the systems infrastructure, platform and
software-as-a-service by a single broker. SAIC is responsible for
delivering a shared service cloud infrastructure model that
provides enterprise-wide efficiencies in access, contracting and
security. SAIC will also provide services for business operations,
technical, security, network, service desk, subject matter expert
support and transition services. Net bookings and backlog for the
quarter do not include any value related to T-Cloud. Consistent
with the Company's policy, bookings and backlog related to this
award will be recognized as the task orders under the IDIQ are
received.
Notable Recompete Awards:
Naval Air Warfare Center Weapons Division: SAIC was
awarded a multiple-award IDIQ contract with a $249 million ceiling
from the U.S. Navy to continue supporting the Naval Air Warfare
Center Weapons Division (NAWCWD)’s combat instrumentation platforms
used for training and test evaluation ranges. Under the new
contract, SAIC will perform systems design and integration,
hardware and software upgrades or modifications for the Combat
Environment Instrumentation Systems (CEIS). SAIC will also provide
services to support global position system-based range equipment,
airborne electronic warfare (EW) systems, warning &
countermeasures systems and range Radio-Frequency/Electro-Optical
Tracking systems. The Company will deliver test support and
instrumentation for unmanned aerial vehicle (UAV) and telemetry
systems.
Notable Space and Intelligence Community Awards:
U.S. Space and Intelligence Community: During the
quarter, SAIC was awarded approximately $520 million of contract
awards by space and intelligence community organizations. These
awards represent a combination of new business and recompetes.
SAIC was awarded the following contracts subsequent to the end
of the quarter which are not included in the current quarter net
bookings and book-to-bill:
U.S. Space Force: SAIC was awarded a seven-year, $575
million contract by the United States Space Force to support its
Ground Based Radar Maintenance and Sustainment Services (GMASS).
Under the contract, SAIC will provide on-going sustainment and
modification of the GMASS Contract-covered systems, including
Upgraded Early Warning Radars (UEWR), the Precision Acquisition
Vehicle Entry (PAVE) Phased Array Warning System (PAWS), and the
Perimeter Acquisition Radar Attack Characterization System (PARCS)
radars and all associated systems and equipment. In addition to
sustaining operational capabilities, the contract will also utilize
an integrated roadmap to highlight incremental opportunities and
areas for innovation to promote backlog items and improve
operational efficiencies. Through this work, SAIC will help further
modernize critical missile warning and space domain awareness
radars for key Space Force missions.
Fiscal Year 2024
Guidance
The table below summarizes fiscal year 2024 guidance and
represents the Company's views as of September 7, 2023.
CURRENT
PRIOR
Fiscal Year
Fiscal Year
2024 Guidance
2024 Guidance
Revenue
$7.20B - $7.25B
$7.125B - $7.225B
Adjusted EBITDA Margin(1)
9.3% - 9.4%
9.2% - 9.4%
Adjusted Diluted EPS(1)
$7.20 to $7.40
$7.00 to $7.20
Transaction-Adjusted Free Cash
Flow(1)
$460M - $480M(2)
$460M - $480M
Webcast Information
SAIC management will discuss operations and financial results in
an earnings conference call beginning at 10:00 a.m. Eastern time on
September 7, 2023. The conference call will be webcast
simultaneously to the public through a link on the Investor
Relations section of the SAIC website (http://investors.saic.com).
We will be providing webcast access only – “dial-in” access is no
longer available. Additionally, a supplemental presentation will be
available to the public through links to the Investor Relations
section of the SAIC website. After the call concludes, an on-demand
audio replay of the webcast can be accessed on the Investor
Relations website.
About SAIC
SAIC® is a premier Fortune 500® technology integrator driving
our nation’s technology transformation. Our robust portfolio of
offerings across the defense, space, civilian and intelligence
markets includes secure high-end solutions in engineering, digital,
artificial intelligence and mission solutions. Using our expertise
and understanding of existing and emerging technologies, we
integrate the best components from our own portfolio and our
partner ecosystem to deliver innovative, effective and efficient
solutions that are critical to achieving our customers'
missions.
We are approximately 24,000 strong; driven by mission, united by
purpose, and inspired by opportunities. SAIC is an Equal
Opportunity Employer, fostering a culture of diversity, equity and
inclusion, which is core to our values and important to attract and
retain exceptional talent. Headquartered in Reston, Virginia, SAIC
has annual revenues of approximately $6.9 billion. For more
information, visit saic.com. For ongoing news, please visit our
newsroom.
GAAP to Non-GAAP Guidance
Reconciliation
The Company does not provide a reconciliation of forward-looking
adjusted diluted EPS to GAAP diluted EPS or adjusted EBITDA margin
to GAAP net income due to the inherent difficulty in forecasting
and quantifying certain amounts that are necessary for such
reconciliation. Because certain deductions for non-GAAP exclusions
used to calculate net income may vary significantly based on actual
events, the Company is not able to forecast GAAP diluted EPS or
GAAP net income with reasonable certainty. The variability of the
above charges may have an unpredictable and potentially significant
impact on our future GAAP financial results.
(1)Non-GAAP measure, see Schedule 5 for
information about this measure.
(2)Current transaction-adjusted free cash
flow guidance excludes expected cash tax and other payments of
approximately $82M related to the L&SCM sale which will impact
cash flows provided by operating activities in the second, third
and fourth quarters of fiscal year 2024.
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,” “anticipates,” “believes,” “estimates,”
“guidance,” and similar words or phrases. Forward-looking
statements in this release may include, among others, estimates of
future revenues, operating income, earnings, earnings per share,
charges, total contract value, backlog, outstanding shares and cash
flows, as well as statements about future dividends, share
repurchases and other capital deployment plans. Such statements are
not guarantees of future performance and involve risk,
uncertainties and assumptions, and actual results may differ
materially from the guidance and other forward-looking statements
made in this release as a result of various factors. Risks,
uncertainties and assumptions that could cause or contribute to
these material differences include those discussed in the “Risk
Factors,” “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” and “Legal Proceedings”
sections of our Annual Report on Form 10-K, as updated in any
subsequent Quarterly Reports on Form 10-Q and other filings with
the SEC, which may be viewed or obtained through the Investor
Relations section of our website at www.saic.com or on the SEC’s
website at www.sec.gov. Due to such risks, uncertainties and
assumptions you are cautioned not to place undue reliance on such
forward-looking statements, which speak only as of the date hereof.
SAIC expressly disclaims any duty to update any forward-looking
statement provided in this release to reflect subsequent events,
actual results or changes in SAIC’s expectations. SAIC also
disclaims any duty to comment upon or correct information that may
be contained in reports published by investment analysts or
others.
Schedule 1:
SCIENCE APPLICATIONS
INTERNATIONAL CORPORATION
CONDENSED AND CONSOLIDATED
STATEMENTS OF INCOME
(Unaudited)
Three Months Ended
Six Months Ended
August 4, 2023
July 29, 2022
August 4, 2023
July 29, 2022
(in millions, except per share
amounts)
Revenues
$
1,784
$
1,831
$
3,812
$
3,827
Cost of revenues
1,568
1,612
3,361
3,382
Selling, general and administrative
expenses
88
93
172
185
Acquisition and integration costs
1
1
1
10
Other operating income
(235
)
—
(241
)
—
Operating income
362
125
519
250
Interest expense
33
30
66
57
Other (income) expense, net
(6
)
—
(5
)
3
Income before income taxes
335
95
458
190
Provision for income taxes
(88
)
(21
)
(113
)
(42
)
Net income
$
247
$
74
$
345
$
148
Net income attributable to non-controlling
interest
—
1
—
2
Net income attributable to common
stockholders
$
247
$
73
$
345
$
146
Weighted-average number of shares
outstanding:
Basic
53.5
55.6
53.9
55.9
Diluted
53.9
55.9
54.3
56.3
Earnings per share:
Basic
$
4.60
$
1.31
$
6.40
$
2.61
Diluted
$
4.56
$
1.30
$
6.35
$
2.59
Schedule 2:
SCIENCE APPLICATIONS
INTERNATIONAL CORPORATION
CONDENSED AND CONSOLIDATED
BALANCE SHEETS
(Unaudited)
August 4, 2023
February 3, 2023
(in millions)
ASSETS
Current assets:
Cash and cash equivalents
$
352
$
109
Receivables, net
958
936
Inventory, prepaid expenses and other
current assets
74
152
Total current assets
1,384
1,197
Goodwill
2,851
2,911
Intangible assets, net
951
1,009
Property, plant, and equipment, net
90
92
Operating lease right of use assets
140
158
Other assets
256
176
Total assets
$
5,672
$
5,543
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued
liabilities
$
820
$
767
Accrued payroll and employee benefits
330
328
Long-term debt, current portion
62
31
Total current liabilities
1,212
1,126
Long-term debt, net of current portion
2,215
2,343
Operating lease liabilities
138
152
Other long-term liabilities
264
218
Equity:
Total common stockholders' equity
1,843
1,694
Non-controlling interest
—
10
Total stockholders' equity
1,843
1,704
Total liabilities and stockholders'
equity
$
5,672
$
5,543
Schedule 3:
SCIENCE APPLICATIONS
INTERNATIONAL CORPORATION
CONDENSED AND CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
Six Months Ended
August 4, 2023
July 29, 2022
August 4, 2023
July 29, 2022
(in millions)
Cash flows from operating activities:
Net income
$
247
$
74
$
345
$
148
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
36
40
72
81
Amortization of off-market customer
contracts
(2
)
(4
)
(4
)
(6
)
Amortization of debt issuance costs
3
4
4
6
Deferred income taxes
(19
)
(24
)
(25
)
(22
)
Stock-based compensation expense
15
12
27
23
Gain on sale of long-lived assets
(3
)
—
(3
)
—
Gain on divestitures
(240
)
—
(247
)
—
Increase (decrease) resulting from changes
in operating assets and liabilities, net of the effect of
divestitures:
Receivables
37
68
(90
)
(21
)
Inventory, prepaid expenses and other
current assets
4
(4
)
8
7
Other assets
(7
)
2
(3
)
5
Accounts payable and accrued
liabilities
(54
)
(11
)
52
29
Accrued payroll and employee benefits
52
(58
)
9
(27
)
Income taxes payable
67
37
74
36
Operating lease assets and liabilities,
net
1
4
(2
)
—
Other long-term liabilities
13
1
15
—
Net cash provided by operating
activities
150
141
232
259
Cash flows from investing activities:
Expenditures for property, plant, and
equipment
(6
)
(7
)
(12
)
(12
)
Purchases of marketable securities
(2
)
(2
)
(5
)
(4
)
Sales of marketable securities
3
1
4
2
Proceeds from sale of long-lived
assets
3
—
3
—
Proceeds from divestitures
—
—
355
—
Cash divested upon deconsolidation of
joint venture
—
—
(8
)
—
Other
—
(3
)
(3
)
(3
)
Net cash (used in) provided by investing
activities
(2
)
(11
)
334
(17
)
Cash flows from financing activities:
Dividend payments to stockholders
(20
)
(20
)
(41
)
(42
)
Principal payments on borrowings
(100
)
(516
)
(260
)
(575
)
Issuances of stock
4
4
8
8
Stock repurchased and retired or withheld
for taxes on equity awards
(102
)
(64
)
(190
)
(148
)
Proceeds from borrowings
—
515
160
515
Debt issuance costs
—
(5
)
—
(5
)
Distributions to non-controlling
interest
—
(1
)
—
(2
)
Net cash used in financing activities
(218
)
(87
)
(323
)
(249
)
Net (decrease) increase in cash, cash
equivalents and restricted cash
(70
)
43
243
(7
)
Cash, cash equivalents and restricted cash
at beginning of period
431
65
118
115
Cash, cash equivalents and restricted cash
at end of period
$
361
$
108
$
361
$
108
Schedule 4:
SCIENCE APPLICATIONS
INTERNATIONAL CORPORATION
BACKLOG
(Unaudited)
The estimated value of our total backlog
as of the dates presented was:
August 4, 2023
May 5, 2023
February 3, 2023
(in millions)
Funded backlog
$
3,716
$
3,899
$
3,554
Negotiated unfunded backlog
18,808
$
19,895
20,248
Total backlog
$
22,524
$
23,794
$
23,802
Backlog represents the estimated amount of
future revenues to be recognized under negotiated contracts and
task orders as work is performed and excludes contract awards which
have been protested by competitors until the protest is resolved in
our favor. SAIC segregates backlog into two categories, funded
backlog and negotiated unfunded backlog. Funded backlog for
contracts with government agencies primarily represents contracts
for which funding is appropriated less revenues previously
recognized on these contracts, and does not include the unfunded
portion of contracts where funding is incrementally appropriated or
authorized by the U.S. government and other customers even though
the contract may call for performance over a number of years.
Funded backlog for contracts with non-government agencies
represents the estimated value of contracts which may cover
multiple future years under which SAIC is obligated to perform,
less revenues previously recognized on these contracts. Negotiated
unfunded backlog represents the estimated future revenues to be
earned from negotiated contracts for which funding has not been
appropriated or authorized, and unexercised priced contract
options. Negotiated unfunded backlog does not include any estimate
of future potential task orders expected to be awarded under
indefinite delivery, indefinite quantity (IDIQ), U.S. General
Services Administration (GSA) schedules or other master agreement
contract vehicles, with the exception of certain IDIQ contracts
where task orders are not competitively awarded and separately
priced but instead are used as a funding mechanism, and where there
is a basis for estimating future revenues and funding on future
anticipated task orders.
Schedule 5:
SCIENCE APPLICATIONS
INTERNATIONAL CORPORATION
NON-GAAP FINANCIAL
MEASURES
(Unaudited)
This schedule describes the non-GAAP
financial measures included in this earnings release. While we
believe that these non-GAAP financial measures may be useful in
evaluating our financial information, they should be considered as
supplemental in nature and not as a substitute for financial
information prepared in accordance with GAAP. Reconciliations,
definitions, and how we believe these measures are useful to
management and investors are provided below. Other companies may
define similar measures differently.
EBITDA, Adjusted
EBITDA and Adjusted Operating Income
Three Months Ended
Six Months Ended
August 4, 2023
July 29, 2022
August 4, 2023
July 29, 2022
(in millions)
Net income
$
247
$
74
$
345
$
148
Interest expense and loss on sale of
receivables
35
31
71
59
Interest income
(4
)
—
(5
)
—
Provision for income taxes
88
21
113
42
Depreciation and amortization
36
40
72
81
EBITDA(1)
402
166
596
330
EBITDA as a percentage of revenues
22.5
%
9.1
%
15.6
%
8.6
%
Acquisition and integration costs
1
1
1
10
Restructuring and impairment costs
5
2
6
2
Recovery of acquisition and integration
costs and restructuring costs
—
(3
)
—
(3
)
Gain on divestitures, net of transaction
costs
(234
)
—
(240
)
—
Adjusted EBITDA(1)
$
174
$
166
$
363
$
339
Adjusted EBITDA as a percentage of
revenues
9.8
%
9.1
%
9.5
%
8.9
%
Operating income
$
362
$
125
$
519
$
250
Operating income as a percentage of
revenues
20.3
%
6.8
%
13.6
%
6.5
%
Acquisition and integration costs
1
1
1
10
Restructuring and impairment costs
5
2
6
2
Recovery of acquisition and integration
costs and restructuring costs
—
(3
)
—
(3
)
Gain on divestitures, net of transaction
costs
(234
)
—
(240
)
—
Adjusted operating income(1)
$
134
$
125
$
286
$
259
Adjusted operating income as a percentage
of revenues
7.5
%
6.8
%
7.5
%
6.8
%
EBITDA is a performance measure that is
calculated by taking net income and excluding interest and loss on
sale of receivables, provision for income taxes, and depreciation
and amortization. Adjusted EBITDA and adjusted operating income are
performance measures that exclude the impact of non-recurring
transactions that we do not consider to be indicative of our
ongoing operating performance. The acquisition and integration
costs relate to the Company's acquisitions. The gain on
divestitures includes gains associated with the deconsolidation of
FSA and the sale of the logistics and supply chain management
business, net of transaction costs. We believe that these
performance measures provide management and investors with useful
information in assessing trends in our ongoing operating
performance and may provide greater visibility in understanding the
long-term financial performance of the Company.
(1)Non-GAAP measure, see above for
definition.
Schedule 5 (continued):
SCIENCE APPLICATIONS
INTERNATIONAL CORPORATION
NON-GAAP FINANCIAL
MEASURES
(Unaudited)
Adjusted Diluted
Earnings Per Share
Three Months Ended
Six Months Ended
August 4, 2023
July 29, 2022
August 4, 2023
July 29, 2022
Diluted earnings per share
$
4.56
$
1.30
$
6.35
$
2.59
Acquisition and integration costs and
restructuring and impairment costs, divided by diluted
'weighted-average number of shares outstanding' (WASO)
0.11
—
0.13
0.16
Tax effect of acquisition and integration
costs and restructuring and impairment costs, divided by diluted
WASO
(0.02
)
—
(0.03
)
(0.03
)
Net effect of acquisition and integration
costs and restructuring and impairment costs, divided by diluted
WASO
0.09
—
0.10
0.13
Amortization of intangible assets, divided
by diluted WASO
0.54
0.57
1.07
1.15
Tax effect of amortization of intangible
assets, divided by diluted WASO
(0.09
)
(0.12
)
(0.21
)
(0.25
)
Net effect of amortization of intangible
assets, divided by diluted WASO
0.45
0.45
0.86
0.90
Gain on divestitures, net of transaction
costs, divided by diluted WASO
(4.34
)
—
(4.42
)
—
Tax effect of gain on divestitures, net of
transaction costs, divided by diluted WASO
1.29
—
1.30
—
Net effect of gain on divestitures, net of
transaction costs, divided by diluted WASO
(3.05
)
—
(3.12
)
—
Adjusted diluted earnings per
share(1)
$
2.05
$
1.75
$
4.19
$
3.62
Adjusted diluted earnings per share is a
performance measure that excludes the impact of non-recurring
transactions that we do not consider to be indicative of our
ongoing operating performance. The acquisition and integration
costs relate to the Company's acquisitions. The gain on
divestitures includes gains associated with the deconsolidation of
FSA and the sale of the logistics and supply chain management
business, net of transaction costs. Adjusted diluted earnings per
share also excludes amortization of intangible assets because we do
not have a history of significant acquisition activity, we do not
acquire businesses on a predictable cycle, and the amount of an
acquisition's purchase price allocated to intangible assets and the
related amortization term are unique to each acquisition. We
believe that this performance measure provides management and
investors with useful information in assessing trends in our
ongoing operating performance and may provide greater visibility in
understanding the long-term financial performance of the
Company.
(1)Non-GAAP measure, see above for
definition.
Schedule 5 (continued):
SCIENCE APPLICATIONS
INTERNATIONAL CORPORATION
NON-GAAP FINANCIAL
MEASURES
(Unaudited)
Free Cash Flow
and Transaction-Adjusted Free Cash Flow
Three Months Ended
Six Months Ended
August 4, 2023
July 29, 2022
August 4, 2023
July 29, 2022
(in millions)
Net cash provided by operating
activities
$
150
$
141
$
232
$
259
Expenditures for property, plant, and
equipment
(6
)
(7
)
(12
)
(12
)
Cash used (provided) by MARPA Facility
—
(60
)
—
(60
)
Free cash flow(1)
$
144
$
74
$
220
$
187
L&SCM divestiture transaction fees
7
—
7
—
L&SCM divestiture cash taxes
—
—
—
—
L&SCM divestiture transition
services
(8
)
—
(8
)
—
Transaction-adjusted free cash
flow(1)
$
143
$
74
$
219
$
187
FY24 Guidance
(in millions)
Net cash provided by operating
activities
$410 to $430
Expenditures for property, plant, and
equipment
Approximately $30
Free cash flow(1)
$380 to $400
L&SCM divestiture transaction fees
Approximately $7
L&SCM divestiture cash taxes
Approximately $75
Transaction-adjusted free cash
flow(1)
$460 to $480
Free cash flow is calculated by taking
cash flows provided by operating activities less expenditures for
property, plant, and equipment and less cash flows from our Master
Accounts Receivable Purchasing Agreement (MARPA Facility) for the
sale of certain designated eligible U.S. government receivables.
Under the MARPA Facility, the Company can sell eligible receivables
up to a maximum amount of $300 million. Transaction-adjusted free
cash flow excludes cash taxes, transaction fees, and other costs
related to the divestiture of the logistics and supply chain
management business from free cash flow as previously defined. We
believe that free cash flow and transaction-adjusted free cash flow
provides management and investors with useful information in
assessing trends in our cash flows and in comparing them to other
peer companies, many of whom present similar non-GAAP liquidity
measures. These measures should not be considered as a measure of
residual cash flow available for discretionary purposes.
(1)Non-GAAP measure, see above for
definition.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230907012873/en/
Investor Relations: Joe DeNardi +1.703.488.8528
joseph.w.denardi@saic.com
Media: Thais Hanson +1.703.676.8215 publicrelations@saic.com
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