| [October 28, 2014] |
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Engility Reports Third Quarter 2014 Results
CHANTILLY, Va. --(Business Wire)--
Engility Holdings, Inc. (NYSE: EGL) today announced financial results
for the third quarter ended September 30, 2014.
Third Quarter 2014 Results
Total revenue for the third quarter of 2014 was $345 million and
operating income was $27 million. Adjusted operating income for the
third quarter was $31 million. Operating margin for the third quarter of
2014 was 7.8% and adjusted operating margin for the same period was
8.9%. Net income attributable to Engility was $13 million, or $0.73 per
diluted share. Adjusted net income attributable to Engility was $16
million, or $0.86 per diluted share. Our adjusted net income and
adjusted operating margin exclude $1 million of restructuring costs, $2
million of additional amortization of intangible asset expenses and $2
million of integration costs associated with our acquisition of Dynamics
Research Corporation (DRC). Information about our use of non-GAAP
financial information is provided below under "Non-GAAP Measures".
"As anticipated, we experienced strong award activity to start the
second half of 2014 and achieved a solid sequential and year-over-year
increase in our book-to-bill ratio. We won many new awards in the
quarter and continue to increase our competitiveness in the market,"
said Tony Smeraglinolo, President and CEO of Engility. "We are pleased
with our customers' positive response to our business model and the
significant improvements we have made to our business development
processes. We believe we are well positioned for continued success
throughout the remainder of 2014, which will provide us with positive
momentum as we enter 2015."
"As separately announced, we are extremely excited about our definitive
agreement to acquire TASC. This transaction is strongly aligned with our
growth and capital allocation strategies. It further diversifies and
balances our portfolio, allows us to gain access to new strategic
customers in enduring markets, expands our capabilities, and adds scale
to our business. TASC will build upon our successful acquisition of DRC,
which we completed in January 2014. DRC continues to meet its financial
targets and our integration efforts remain on track. We will leverage
the experiences we gained from the DRC acquisition to help ensure we
maximize the strategic and financial benefits provided by TASC's highly
complementary business. We expect that the strong free cash flow
generated by the combined company will enable us to rapidly pay down the
debt of the combined companies."
Key Performance Indicators
-
Contract funded orders in the third quarter of 2014 were $410 million,
a 55% increase compared to the third quarter of 2013. The book-to-bill
ratio for the third quarter of 2014 was 1.2x, compared to 0.8x in the
third quarter of 2013.
-
Funded backlog at the end of the 2014 third quarter was $587 million,
a 2% increase compared to the third quarter of 2013.
-
Days sales outstanding (DSO) at the end of the 2014 third quarter, net
of advanced payments, was 70 days, compared to 77 days in the third
quarter of 2013.
-
Cash flow from operations was $37 million for the third quarter of
2014, compared to $75 million in the third quarter of 2013.
Significant Third Quarter 2014 Awards
-
Awarded a $50 million task order to support Veterans Benefits
Management System (VBMS) Records Program. Under this cost plus fixed
fee recompete award, Engility will provide an array of engineering,
technical and program management support for the Veterans Affairs
Department's principal benefits management program, VBMS.
-
Awarded a $43 million contract for new work to provide system
engineering, design, prototype, and testing and evaluation for
shipboard and shore-based electronic systems under a program
supporting the Naval Air Warfare Center Aircraft Division (NAWCAD).
-
Awarded a $25 million cost-plus-fixed-fee contract to provide
technical advisory services to the U.S. Agency for International
Development (USAID) and the Rwandan government as the two work
together to strengthen the agricultural sector in that country.
Engility advisers will support Rwandan government agencies' efforts to
increase smallholder farmer incomes by promoting private sector
investments from international and domestic sources.
-
Awarded a $23 million contract to provide engineering and analytical
support to help the U.S. Department of Transportation (DOT) and the
Federal Aviation Administration (FAA) implement the Next Generation
Air Traffic Control System, commonly known as NextGen. This task order
award represents a combination of new and recompete work.
-
Awarded a $10 million single award to train and prepare military
battalions from Benin, Senegal and Niger as the units ready for
participation in the United Nations Peacekeeping Mission in Mali.
Through this contract, which was awarded under the Africa Contingency
Operations Training and Assistance (ACOTA) program, Engility will
provide 12-week courses of intensive training for soldiers and
battalion leaders. The ACOTA award represents new work for Engility.
-
Awarded a $9 million contract by the United States Marine Corps (USMC)
to support the Director of Intelligence (DIRINT) in developing and
sustaining the Marine Corps' Intelligence, Surveillance, and
Reconnaissance Enterprise (MCISR-E). Under this recompete contract,
Engility's team of professionals will provide services that include
program management, systems engineering, communications engineering,
intelligence subject matter expertise, and Technology Innovation
Division liaison assistance for the Tactical Exploitation of National
Capabilities (TENCAP) Program.
-
Awarded a prime position on the One Acquisition for Integrated
Services (OASIS) contract, a government-wide IDIQ contract that will
be administered by the General Services Administration (GSA). The
contract has a five year period of performance and one five year
option. Engility, along with its subsidiary DRC, won positions on each
of the five pools they bid upon.
2014 Outlook
We are updating the fiscal year 2014 financial guidance we issued on
August 7, 2014 based on our financial results for the first nine months
of 2014 and our outlook for the remainder of 2014. We are increasing our
GAAP diluted EPS and adjusted diluted EPS guidance as a result of our
continuing focus on cost efficiencies. We are reiterating our fiscal
year 2014 revenue and cash flow guidance. The table below summarizes our
fiscal year 2014 guidance.
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Current Outlook for Fiscal Year 2014
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Prior Outlook for Fiscal Year 2014
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Revenue
|
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$1.35 billion - $1.45 billion
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$1.35 billion - $1.45 billion
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Adjusted Diluted EPS (1) (2)
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$2.90 - $3.10
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$2.70 - $2.90
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GAAP Diluted EPS (1)
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$2.39 - $2.59
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$2.24 - $2.44
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Operating cash flow
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$95 million - $105 million
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$95 million - $105 million
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(1) 2014 GAAP and adjusted diluted EPS guidance assumes
weighted-average shares outstanding of approximately 18.2 million
and a full year effective tax rate of 39.0%. It also includes eleven
months of DRC's expected financial results as the acquisition closed
on January 31, 2014. Our 2014 GAAP guidance does not include
estimated transaction costs resulting from the anticipated
acquisition of TASC.
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(2) Our adjusted diluted EPS guidance excludes an
estimated $6.2 million, or $0.21 per share, of additional
amortization of intangible asset expenses, and approximately $9.0 to
$10.0 million, or $0.30 to $0.34 per share, of estimated integration
costs associated with the DRC acquisition. The adjusted diluted EPS
guidance also excludes an estimated $1.0 million, or $0.03 per
share, of restructuring costs, which were incurred in the nine
months ended September 30, 2014.
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Non-GAAP Measures
The tables under "Engility Holdings, Inc. Reconciliation of Non-GAAP
Measures" present Adjusted Operating Income, Adjusted Operating Margin,
Earnings before Interest, Taxes, Depreciation, and Amortization
(EBITDA), Adjusted EBITDA, EBITDA Margin, Adjusted EBITDA Margin,
Adjusted Net Income, Adjusted Diluted EPS, reconciled to their most
directly comparable GAAP measure. These financial measures are
calculated and presented on the basis of methodologies other than in
accordance with U.S. generally accepted accounting principles ("Non-GAAP
Measures"). Engility has provided these Non-GAAP Measures to adjust for
the impact of transaction and integration costs and amortization
expenses related to our acquisition of DRC, as well as restructuring and
legal and settlement costs. These items have been adjusted because they
are not considered core to the Company's business or otherwise not
considered operational or because these charges are non-cash or
non-recurring. The Company presents these Non-GAAP Measures because
management believes that they are meaningful to understanding Engility's
performance during the periods presented and the Company's ongoing
business. Non-GAAP Measures are not prepared in accordance with GAAP and
therefore are not necessarily comparable to similarly titled metrics or
the financial results of other companies. These Non-GAAP Measures should
be considered a supplement to, not a substitute for, or superior to, the
corresponding financial measures calculated in accordance with GAAP.
CONFERENCE CALL INFORMATION
Engility will host a conference call at 5 P.M. ET on October 28, 2014,
to discuss the financial results for our third quarter of 2014, and our
definitive agreement to acquire TASC.
Listeners may access a webcast of the live conference call from the
Investor Relations section of the company's website at http://www.EngilityCorp.com.
Listeners also may access a slide presentation on the website which
summarizes our 2014 third quarter results and our definitive agreement
to acquire TASC. Listeners should go to the website at least 15 minutes
before the live event to download and install any necessary audio
software.
Listeners also may participate in the conference call by dialing (877)
703-6109 (U.S. dial-in) or (857) 244-7308 (international dial-in) and
the pass code is 70379558.
A replay will be available on the company's website approximately two
hours after the conference call and continuing for one year. A
telephonic replay also will be available through November 28, 2014 at
(888) 286-8010 (domestic) or (617) 801-6888 (international) and entering
pass code 33672993.
ABOUT ENGILITY
Engility is a pure-play government services contractor providing highly
skilled personnel wherever, whenever they are needed in a cost-effective
manner. Headquartered in Chantilly, Virginia, Engility is a leading
provider of specialized technical consulting, program and business
support services, engineering and technology lifecycle support,
information technology modernization and sustainment, supply chain
services and logistics management, and training and education for the
U.S. Government. To learn more about Engility, please visit www.engilitycorp.com.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
including statements regarding Engility's future prospects, projected
financial results, estimated integration costs and acquisition related
amortization expenses, business plans, as well as the TASC transaction
and its expected benefits. Words such as "may," "will," "should,"
"likely," "anticipates," "expects," "intends," "plans," "projects,"
"believes," "estimates" and similar expressions are also used to
identify these forward-looking statements. These statements are based on
the current beliefs and expectations of Engility's management and are
subject to significant risks and uncertainties. Actual results may
differ from those set forth in the forward-looking statements. Factors
that could cause Engility's actual results to differ materially from
those described in the forward-looking statements can be found under the
heading "Risk Factors" included in our Annual Report on Form 10-K for
the year ended December 31, 2013, and more recent periodic reports,
which have been filed with the Securities and Exchange Commission (SEC)
and are available on the investor relations section of Engility's
website (http://www.engilitycorp.com)
and on the SEC's website (www.sec.gov).
Forward-looking statements are made only as of the date hereof, and we
undertake no obligation to update or revise the forward-looking
statements, whether as a result of new information, future events or
otherwise, except as required by law. In addition, historical
information should not be considered as an indicator of future
performance.
ADDITIONAL INFORMATION FOR STOCKHOLDERS
In connection with the proposed merger, Engility Holdings, Inc. will
file with the SEC a Registration Statement on Form S-4 that will include
a joint proxy/consent solicitation statement of Engility and TASC and a
prospectus of Engility Holdings, Inc., as well as other relevant
documents concerning the proposed transaction. Engility will mail the
joint proxy/consent solicitation statement/prospectus to the Engility
and TASC stockholders. SHAREHOLDERS OF ENGILITY AND TASC ARE URGED TO
READ THE REGISTRATION STATEMENT AND JOINT PROXY/CONSENT SOLICITATION
STATEMENT/PROSPECTUS REGARDING THE PROPOSED MERGERS WHEN IT BECOMES
AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL
AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION. Investors and security holders may obtain
a free copy of the joint proxy/consent solicitation statement/prospectus
(when available) and other filings containing information about Engility
and TASC at the SEC's website at www.sec.gov.
The joint proxy statement/consent solicitation prospectus (when
available) and the other filings may also be obtained free of charge at
Engility's website at www.engilitycorp.com
under the tab "Investor Relations," and then under the heading "SEC
Filings".
Engility, TASC and certain of their respective directors and executive
officers, under the SEC's rules, may be deemed to be participants in the
solicitation of proxies of Engility's shareholders in connection with
the proposed merger. Information about the directors and executive
officers of Engility and their ownership of Engility common stock is set
forth in the proxy statement for Engility's 2014 annual meeting of
shareholders, as filed with the SEC on Schedule 14A on April 11, 2014.
Additional information regarding the interests of those participants and
other persons who may be deemed participants in the transaction may be
obtained by reading the joint proxy/consent solicitation
statement/prospectus regarding the proposed merger when it becomes
available. Free copies of this document may be obtained as described in
the preceding paragraph.
NO OFFERS OR SOLICITATIONS
This announcement is for informational purposes only and is neither an
offer to purchase, nor a solicitation of an offer to sell, subscribe for
or buy any securities or the solicitation of any vote in any
jurisdiction pursuant to the proposed transactions or otherwise, nor
shall there be any sale, issuance or transfer of securities in any
jurisdiction in contravention of applicable law. No offer of securities
shall be made except by means of a prospectus meeting the requirements
of Section 10 of the Securities Act of 1933, as amended.
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ENGILITY HOLDINGS, INC.
|
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UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
|
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(in thousands, except per share data)
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Three Months Ended
|
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Nine Months Ended
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|
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September 30,
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September 27,
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|
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September 30,
|
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September 27,
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|
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|
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2014
|
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2013
|
|
Change
|
|
2014
|
|
2013
|
|
Change
|
|
Revenue
|
|
$
|
345,061
|
|
|
$
|
339,302
|
|
$
|
5,759
|
|
|
$
|
1,047,575
|
|
|
$
|
1,078,309
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$
|
(30,734
|
)
|
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Costs and expenses
|
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|
|
|
|
|
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|
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|
|
Cost of revenue
|
|
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293,039
|
|
|
|
289,280
|
|
|
3,759
|
|
|
|
897,114
|
|
|
|
932,874
|
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|
(35,760
|
)
|
|
Selling, general and administrative expenses
|
|
|
25,255
|
|
|
|
19,901
|
|
|
5,354
|
|
|
|
80,897
|
|
|
|
56,134
|
|
|
24,763
|
|
|
Total costs and expenses
|
|
|
318,294
|
|
|
|
309,181
|
|
|
9,113
|
|
|
|
978,011
|
|
|
|
989,008
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|
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(10,997
|
)
|
|
Operating income
|
|
|
26,767
|
|
|
|
30,121
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|
|
(3,354
|
)
|
|
|
69,564
|
|
|
|
89,301
|
|
|
(19,737
|
)
|
|
Interest expense, net
|
|
|
3,342
|
|
|
|
7,558
|
|
|
(4,216
|
)
|
|
|
9,538
|
|
|
|
19,099
|
|
|
(9,561
|
)
|
|
Other income (expense), net
|
|
|
(67
|
)
|
|
|
193
|
|
|
(260
|
)
|
|
|
(20
|
)
|
|
|
266
|
|
|
(286
|
)
|
|
Income before income taxes
|
|
|
23,358
|
|
|
|
22,756
|
|
|
602
|
|
|
|
60,006
|
|
|
|
70,468
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|
|
(10,462
|
)
|
|
Provision for income taxes
|
|
|
9,115
|
|
|
|
8,699
|
|
|
416
|
|
|
|
23,454
|
|
|
|
27,344
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|
|
(3,890
|
)
|
|
Net income
|
|
|
14,243
|
|
|
|
14,057
|
|
|
186
|
|
|
|
36,552
|
|
|
|
43,124
|
|
|
(6,572
|
)
|
|
Less: Net income attributable to non-controlling interest
|
|
|
1,082
|
|
|
|
2,049
|
|
|
(967
|
)
|
|
|
3,615
|
|
|
|
4,276
|
|
|
(661
|
)
|
|
Net income attributable to Engility
|
|
$
|
13,161
|
|
|
$
|
12,008
|
|
$
|
1,153
|
|
|
$
|
32,937
|
|
|
$
|
38,848
|
|
$
|
(5,911
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)
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|
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|
|
|
|
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|
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Net income per share attributable to Engility
|
|
|
|
|
|
|
|
|
|
|
|
|
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Basic
|
|
$
|
0.77
|
|
|
$
|
0.71
|
|
$
|
0.06
|
|
|
$
|
1.93
|
|
|
$
|
2.30
|
|
$
|
(0.37
|
)
|
|
Diluted
|
|
$
|
0.73
|
|
|
$
|
0.68
|
|
$
|
0.05
|
|
|
$
|
1.83
|
|
|
$
|
2.21
|
|
$
|
(0.38
|
)
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
17,151
|
|
|
|
16,915
|
|
|
|
|
17,080
|
|
|
|
16,855
|
|
|
|
Diluted
|
|
|
18,065
|
|
|
|
17,770
|
|
|
|
|
17,994
|
|
|
|
17,592
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
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ENGILITY HOLDINGS, INC.
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UNAUDITED CONSOLIDATED BALANCE SHEETS
|
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(in thousands)
|
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|
|
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As of
|
|
|
|
September 30, 2014
|
|
December 31, 2013
|
|
Assets:
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
18,732
|
|
|
$
|
29,003
|
|
|
Receivables, net
|
|
|
288,963
|
|
|
|
286,272
|
|
|
Other current assets
|
|
|
27,490
|
|
|
|
25,892
|
|
|
Total current assets
|
|
|
335,185
|
|
|
|
341,167
|
|
|
Property, plant and equipment, net
|
|
|
18,431
|
|
|
|
11,895
|
|
|
Goodwill
|
|
|
644,554
|
|
|
|
477,604
|
|
|
Identifiable intangible assets, net
|
|
|
127,399
|
|
|
|
92,205
|
|
|
Other assets
|
|
|
10,503
|
|
|
|
7,183
|
|
|
Total assets
|
|
$
|
1,136,072
|
|
|
$
|
930,054
|
|
|
Liabilities and Equity:
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Current portion of long-term debt
|
|
$
|
13,750
|
|
|
$
|
10,000
|
|
|
Accounts payable, trade
|
|
|
31,673
|
|
|
|
28,286
|
|
|
Accrued employment costs
|
|
|
71,776
|
|
|
|
49,582
|
|
|
Accrued expenses
|
|
|
61,905
|
|
|
|
63,843
|
|
|
Advance payments and billings in excess of costs incurred
|
|
|
21,735
|
|
|
|
19,087
|
|
|
Deferred income taxes, current and income taxes payable
|
|
|
6,709
|
|
|
|
10,693
|
|
|
Other current liabilities
|
|
|
17,874
|
|
|
|
17,928
|
|
|
Total current liabilities
|
|
|
225,422
|
|
|
|
199,419
|
|
|
Long-term debt
|
|
|
308,438
|
|
|
|
187,500
|
|
|
Income tax payable
|
|
|
79,401
|
|
|
|
77,494
|
|
|
Other liabilities
|
|
|
40,076
|
|
|
|
22,487
|
|
|
Total liabilities
|
|
$
|
653,337
|
|
|
$
|
486,900
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
Preferred stock, par value $0.01 per share, 25,000 shares
authorized, none issued or outstanding as of September 30, 2014
and December 31, 2013
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|
-
|
|
|
|
-
|
|
|
Common stock, par value $0.01 per share, 175,000 shares
authorized, 17,591 shares issued and outstanding as of September
30, 2014 and 17,238 shares issued and outstanding as of December
31, 2013
|
|
|
176
|
|
|
|
172
|
|
|
Additional paid in capital
|
|
|
769,129
|
|
|
|
761,119
|
|
|
Accumulated deficit
|
|
|
(297,973
|
)
|
|
|
(330,911
|
)
|
|
Non-controlling interest
|
|
|
11,403
|
|
|
|
12,774
|
|
|
Total equity
|
|
|
482,735
|
|
|
|
443,154
|
|
|
Total liabilities and equity
|
|
$
|
1,136,072
|
|
|
$
|
930,054
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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ENGILITY HOLDINGS, INC.
|
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UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(in thousands)
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
September 30, 2014
|
|
September 27, 2013
|
|
Operating activities:
|
|
|
|
|
|
Net income
|
|
$
|
36,552
|
|
|
$
|
43,124
|
|
|
Share-based compensation
|
|
|
7,283
|
|
|
|
7,282
|
|
|
Depreciation and amortization
|
|
|
15,840
|
|
|
|
9,055
|
|
|
Amortization of bank debt fees
|
|
|
1,218
|
|
|
|
5,880
|
|
|
Deferred income taxes
|
|
|
(1,631
|
)
|
|
|
(2,727
|
)
|
|
Changes in operating assets and liabilities, excluding acquired
amounts:
|
|
|
|
|
|
Receivables
|
|
|
40,555
|
|
|
|
49,748
|
|
|
Other assets
|
|
|
5,807
|
|
|
|
4,145
|
|
|
Accounts payable, trade
|
|
|
(12,049
|
)
|
|
|
2,767
|
|
|
Accrued employment costs
|
|
|
5,349
|
|
|
|
(676
|
)
|
|
Accrued expenses
|
|
|
(6,673
|
)
|
|
|
(17,680
|
)
|
|
Advance payments and billings in excess of costs incurred
|
|
|
2,339
|
|
|
|
1,383
|
|
|
Other liabilities
|
|
|
(14,105
|
)
|
|
|
7,215
|
|
|
Net cash provided by operating activities
|
|
|
80,485
|
|
|
|
109,516
|
|
|
Investing activities:
|
|
|
|
|
|
Acquisition, net of cash
|
|
|
(207,250
|
)
|
|
|
-
|
|
|
Capital expenditures
|
|
|
(2,765
|
)
|
|
|
(1,470
|
)
|
|
Net cash used in investing activities
|
|
|
(210,015
|
)
|
|
|
(1,470
|
)
|
|
Financing activities:
|
|
|
|
|
|
Gross borrowings from issuance of long-term debt
|
|
|
75,000
|
|
|
|
200,000
|
|
|
Repayment of long-term debt
|
|
|
(10,313
|
)
|
|
|
(335,000
|
)
|
|
Gross borrowings from revolving credit facility
|
|
|
383,000
|
|
|
|
167,500
|
|
|
Repayments of revolving credit facility
|
|
|
(323,000
|
)
|
|
|
(137,500
|
)
|
|
Debt issuance costs
|
|
|
(1,131
|
)
|
|
|
(2,493
|
)
|
|
Proceeds from share-based payment arrangements
|
|
|
1,481
|
|
|
|
893
|
|
|
Payment of employee withholding taxes on share-based compensation
|
|
|
(2,430
|
)
|
|
|
(1,037
|
)
|
|
Excess tax deduction on share-based compensation
|
|
|
1,642
|
|
|
|
-
|
|
|
Distributions to non-controlling interest member
|
|
|
(4,990
|
)
|
|
|
(3,107
|
)
|
|
Net cash provided by (used in) financing activities
|
|
|
119,259
|
|
|
|
(110,744
|
)
|
|
Net change in cash and cash equivalents
|
|
|
(10,271
|
)
|
|
|
(2,698
|
)
|
|
Cash and cash equivalents, beginning of period
|
|
|
29,003
|
|
|
|
27,021
|
|
|
Cash and cash equivalents, end of period
|
|
$
|
18,732
|
|
|
$
|
24,323
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ENGILITY HOLDINGS, INC.
|
|
RECONCILIATION OF NON-GAAP MEASURES
|
|
|
|
The following tables set forth a reconciliation of each of these
Non-GAAP Measures to the most directly comparable GAAP measure for
the periods presented.
|
|
|
|
|
|
|
|
Adjusted Operating Income and Adjusted Operating Margin
|
|
(dollars in thousands)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
September 27,
|
|
September 30,
|
|
September 27,
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
Operating income
|
|
$
|
26,767
|
|
|
$
|
30,121
|
|
|
$
|
69,564
|
|
|
$
|
89,301
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
|
|
|
|
|
Acquisition and integration-related expenses excluding amortization
|
|
|
1,606
|
|
|
|
-
|
|
|
|
7,716
|
|
|
|
-
|
|
|
Year-one acquisition-related amortization
|
|
|
1,683
|
|
|
|
-
|
|
|
|
4,488
|
|
|
|
-
|
|
|
Restructuring costs
|
|
|
621
|
|
|
|
-
|
|
|
|
1,134
|
|
|
|
-
|
|
|
Legal and settlement costs
|
|
|
-
|
|
|
|
-
|
|
|
|
230
|
|
|
|
3,228
|
|
|
Adjusted operating income
|
|
$
|
30,677
|
|
|
$
|
30,121
|
|
|
$
|
83,132
|
|
|
$
|
92,529
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin
|
|
|
7.8
|
%
|
|
|
8.9
|
%
|
|
|
6.6
|
%
|
|
|
8.3
|
%
|
|
Adjusted operating margin
|
|
|
8.9
|
%
|
|
|
8.9
|
%
|
|
|
7.9
|
%
|
|
|
8.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ENGILITY HOLDINGS, INC.
|
|
Adjusted Earnings Per Share
|
|
(in thousands except per share data)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
September 27,
|
|
September 30,
|
|
September 27,
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
Adjusted operating income
|
|
$
|
30,677
|
|
|
$
|
30,121
|
|
$
|
83,132
|
|
|
$
|
92,529
|
|
|
|
|
|
|
|
|
|
|
|
Other items
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
3,342
|
|
|
|
7,558
|
|
|
9,538
|
|
|
|
19,099
|
|
Other income, net
|
|
|
(67
|
)
|
|
|
193
|
|
|
(20
|
)
|
|
|
266
|
|
|
|
|
|
|
|
|
|
|
|
Adjustment to operating income
|
|
|
|
|
|
|
|
|
|
Bank fees previously capitalized and included in interest expense
|
|
|
-
|
|
|
|
3,648
|
|
|
-
|
|
|
|
3,648
|
|
Adjusted income before income tax
|
|
|
27,268
|
|
|
|
26,404
|
|
|
73,574
|
|
|
|
77,344
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes (1)
|
|
|
10,641
|
|
|
|
10,086
|
|
|
28,687
|
|
|
|
30,003
|
|
Adjusted net income
|
|
|
16,627
|
|
|
|
16,318
|
|
|
44,887
|
|
|
|
47,341
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to non-controlling interest
|
|
|
1,082
|
|
|
|
2,049
|
|
|
3,615
|
|
|
|
4,276
|
|
Adjusted net income attributable to Engility
|
|
$
|
15,545
|
|
|
$
|
14,269
|
|
$
|
41,272
|
|
|
$
|
43,065
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted diluted earnings per share attributable to Engility
|
|
$
|
0.86
|
|
|
$
|
0.80
|
|
$
|
2.29
|
|
|
$
|
2.45
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Net income attributable to Engility
|
|
$
|
13,161
|
|
|
$
|
12,008
|
|
$
|
32,937
|
|
|
$
|
38,848
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted earnings per share attributable to Engility
|
|
$
|
0.73
|
|
|
$
|
0.68
|
|
$
|
1.83
|
|
|
$
|
2.21
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average number of shares outstanding
|
|
|
18,065
|
|
|
|
17,770
|
|
|
17,994
|
|
|
|
17,592
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Current quarter tax provision is calculated at the current
quarter tax rate.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ENGILITY HOLDINGS, INC.
|
|
Earnings before interest, taxes, depreciation, and amortization
(EBITDA) and Adjusted EBITDA
|
|
(dollars in thousands)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
September 27,
|
|
September 30,
|
|
September 27,
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
Net income
|
|
$
|
14,243
|
|
|
$
|
14,057
|
|
|
$
|
36,552
|
|
|
$
|
43,124
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest, taxes, and depreciation and amortization
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
3,342
|
|
|
|
7,558
|
|
|
|
9,538
|
|
|
|
19,099
|
|
|
Provision for income taxes
|
|
|
9,115
|
|
|
|
8,699
|
|
|
|
23,454
|
|
|
|
27,344
|
|
|
Depreciation and amortization
|
|
|
5,843
|
|
|
|
1,426
|
|
|
|
15,840
|
|
|
|
9,055
|
|
|
EBITDA
|
|
$
|
32,543
|
|
|
$
|
31,740
|
|
|
$
|
85,384
|
|
|
$
|
98,622
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to EBITDA
|
|
|
|
|
|
|
|
|
|
Acquisition and integration-related expenses excluding amortization
|
|
|
1,606
|
|
|
|
-
|
|
|
|
7,716
|
|
|
|
-
|
|
|
Restructuring costs
|
|
|
621
|
|
|
|
-
|
|
|
|
1,134
|
|
|
|
-
|
|
|
Legal and settlement costs
|
|
|
-
|
|
|
|
-
|
|
|
|
230
|
|
|
|
3,228
|
|
|
Adjusted EBITDA
|
|
$
|
34,770
|
|
|
$
|
31,740
|
|
|
$
|
94,464
|
|
|
$
|
101,850
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA Margin
|
|
|
9.4
|
%
|
|
|
9.4
|
%
|
|
|
8.2
|
%
|
|
|
9.1
|
%
|
|
Adjusted EBITDA Margin
|
|
|
10.1
|
%
|
|
|
9.4
|
%
|
|
|
9.0
|
%
|
|
|
9.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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