{"id":521810,"date":"2021-08-03T06:03:59","date_gmt":"2021-08-03T10:03:59","guid":{"rendered":"https:\/\/www.marketnewsdesk.com\/index.php\/leidos-holdings-inc-reports-second-quarter-fiscal-year-2021-results\/"},"modified":"2021-08-03T06:03:59","modified_gmt":"2021-08-03T10:03:59","slug":"leidos-holdings-inc-reports-second-quarter-fiscal-year-2021-results","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/leidos-holdings-inc-reports-second-quarter-fiscal-year-2021-results\/","title":{"rendered":"Leidos Holdings, Inc. Reports Second Quarter Fiscal Year 2021 Results"},"content":{"rendered":"
\n

– Revenues of $3.4 billion, up 18% year-over-year<\/h2>\n

– Diluted Earnings per Share of $1.18, or $1.52 on a non-GAAP basis<\/h2>\n

– Net Bookings of $3.8 billion (book-to-bill ratio of 1.1) build a strong foundation for growth<\/h2>\n

– Backlog grows for fourteenth consecutive quarter to $33.5 billion, up 9% year-over-year<\/h2>\n

PR Newswire<\/p>\n<\/p><\/div>\n

\n

\n RESTON, Va.<\/span>, Aug.\u00a03, 2021 \/PRNewswire\/ —\u00a0Leidos Holdings, Inc. (NYSE: LDOS), a FORTUNE 500\u00ae <\/sup>science and technology leader, today reported financial results for the second quarter of fiscal year 2021. \u00a0<\/p>\n

\n Roger Krone<\/span>, Leidos Chairman and Chief Executive Officer, commented, “Our results in the second quarter reflect our leadership position in the government technology market. I am tremendously proud of the way Leidos has responded throughout the pandemic, as our employees and business partners continually delivered for our customers and shareholders. While we remain vigilant with the recent uptick in COVID-19 cases, Leidos is stronger than ever, with new quarterly record levels of revenue and backlog consistent with our industry-leading organic growth.”<\/p>\n

\n Summary Operating Results<\/b>\n <\/p>\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n \n <\/td>\n\n \n <\/td>\n\n

\n Three Months Ended<\/span>\n <\/p>\n<\/td>\n<\/tr>\n

\n

\n
\n (in millions, except margin and per share amounts)<\/i>
\n <\/span>\n <\/p>\n<\/td>\n

\n \n <\/td>\n\n

\n
\n July 2, 2021<\/b>
\n <\/span>\n <\/p>\n<\/td>\n

\n \n <\/td>\n\n

\n July 3, 2020<\/span>\n <\/p>\n<\/td>\n<\/tr>\n

\n

\n Revenues<\/span>\n <\/p>\n<\/td>\n

\n \n <\/td>\n\n

\n
\n $<\/b>
\n <\/span>\n <\/p>\n<\/td>\n

\n

\n
\n 3,448<\/b>
\n <\/span>\n <\/p>\n<\/td>\n

\n \n <\/td>\n\n \n <\/td>\n\n

\n $<\/span>\n <\/p>\n<\/td>\n

\n

\n 2,914<\/span>\n <\/p>\n<\/td>\n

\n \n <\/td>\n<\/tr>\n
\n

\n Operating income<\/span>\n <\/p>\n<\/td>\n

\n \n <\/td>\n\n

\n
\n $<\/b>
\n <\/span>\n <\/p>\n<\/td>\n

\n

\n
\n 269<\/b>
\n <\/span>\n <\/p>\n<\/td>\n

\n \n <\/td>\n\n \n <\/td>\n\n

\n $<\/span>\n <\/p>\n<\/td>\n

\n

\n 249<\/span>\n <\/p>\n<\/td>\n

\n \n <\/td>\n<\/tr>\n
\n

\n Operating margin<\/span>\n <\/p>\n<\/td>\n

\n \n <\/td>\n\n

\n
\n 7.8<\/b>
\n <\/span>\n <\/p>\n<\/td>\n

\n

\n
\n %<\/b>
\n <\/span>\n <\/p>\n<\/td>\n

\n \n <\/td>\n\n

\n 8.5<\/span>\n <\/p>\n<\/td>\n

\n

\n %<\/span>\n <\/p>\n<\/td>\n<\/tr>\n

\n

\n Net income attributable to Leidos shareholders<\/span>\n <\/p>\n<\/td>\n

\n \n <\/td>\n\n

\n
\n $<\/b>
\n <\/span>\n <\/p>\n<\/td>\n

\n

\n
\n 169<\/b>
\n <\/span>\n <\/p>\n<\/td>\n

\n \n <\/td>\n\n \n <\/td>\n\n

\n $<\/span>\n <\/p>\n<\/td>\n

\n

\n 153<\/span>\n <\/p>\n<\/td>\n

\n \n <\/td>\n<\/tr>\n
\n

\n Diluted earnings per share (EPS)<\/span>\n <\/p>\n<\/td>\n

\n \n <\/td>\n\n

\n
\n $<\/b>
\n <\/span>\n <\/p>\n<\/td>\n

\n

\n
\n 1.18<\/b>
\n <\/span>\n <\/p>\n<\/td>\n

\n \n <\/td>\n\n \n <\/td>\n\n

\n $<\/span>\n <\/p>\n<\/td>\n

\n

\n 1.06<\/span>\n <\/p>\n<\/td>\n

\n \n <\/td>\n<\/tr>\n
\n \n <\/td>\n\n \n <\/td>\n\n \n <\/td>\n\n \n <\/td>\n\n \n <\/td>\n<\/tr>\n
\n

\n
\n Non-GAAP Measures*:<\/i>
\n <\/span>\n <\/p>\n<\/td>\n

\n \n <\/td>\n\n \n <\/td>\n\n \n <\/td>\n\n \n <\/td>\n<\/tr>\n
\n

\n Adjusted EBITDA<\/span>\n <\/p>\n<\/td>\n

\n \n <\/td>\n\n

\n
\n $<\/b>
\n <\/span>\n <\/p>\n<\/td>\n

\n

\n
\n 359<\/b>
\n <\/span>\n <\/p>\n<\/td>\n

\n \n <\/td>\n\n \n <\/td>\n\n

\n $<\/span>\n <\/p>\n<\/td>\n

\n

\n 343<\/span>\n <\/p>\n<\/td>\n

\n \n <\/td>\n<\/tr>\n
\n

\n Adjusted EBITDA margin<\/span>\n <\/p>\n<\/td>\n

\n \n <\/td>\n\n

\n
\n 10.4<\/b>
\n <\/span>\n <\/p>\n<\/td>\n

\n

\n
\n %<\/b>
\n <\/span>\n <\/p>\n<\/td>\n

\n \n <\/td>\n\n

\n 11.8<\/span>\n <\/p>\n<\/td>\n

\n

\n %<\/span>\n <\/p>\n<\/td>\n<\/tr>\n

\n

\n Non-GAAP diluted EPS<\/span>\n <\/p>\n<\/td>\n

\n \n <\/td>\n\n

\n
\n $<\/b>
\n <\/span>\n <\/p>\n<\/td>\n

\n

\n
\n 1.52<\/b>
\n <\/span>\n <\/p>\n<\/td>\n

\n \n <\/td>\n\n \n <\/td>\n\n

\n $<\/span>\n <\/p>\n<\/td>\n

\n

\n 1.55<\/span>\n <\/p>\n<\/td>\n

\n \n <\/td>\n<\/tr>\n
\n \n <\/td>\n\n \n <\/td>\n\n \n <\/td>\n\n \n <\/td>\n\n \n <\/td>\n<\/tr>\n
\n

\n
\n * Non-GAAP financial measures should be considered in addition to, but not as a substitute for, the information
provided in accordance with GAAP. See\u00a0Non-GAAP Financial Measures\u00a0at the end of this press release for more
information.<\/i>
\n <\/span>\n <\/p>\n<\/td>\n<\/tr>\n<\/table><\/div>\n

Revenues for the quarter were $3.45 billion<\/span>, up 18%\u00a0compared to the prior year quarter. Excluding acquired revenues of $58 million<\/span>, revenues increased 16% organically. Revenues grew across all reportable segments; the largest contributors were the increase in veterans’ disability examinations after the pause from the COVID-19 pandemic and the start-up of the Navy Next Generation IT contract. <\/p>\n

Operating income for the quarter was $269 million<\/span>, up 8.0% from the prior year quarter. Operating income margin decreased from 8.5% to 7.8% year-over-year as a result of the $81 million<\/span> net gain recognized upon the receipt of proceeds related to the VirnetX, Inc. (“VirnetX”) legal matter in the second quarter of fiscal year 2020. Net income attributable to Leidos shareholders was $169 million<\/span>, or $1.18<\/span> per diluted share. Net income attributable to Leidos shareholders was up 10% and diluted EPS was up 11% from the second quarter of fiscal year 2020. The weighted average diluted share count for the quarter was 143 million compared to 144\u00a0million in the prior year quarter. <\/p>\n

Adjusted EBITDA was $359 million<\/span> for the second quarter, up 5% year-over-year; adjusted EBITDA margin decreased from 11.8% to 10.4% over the same period. Excluding the VirnetX gain in the prior period, adjusted EBITDA margin increased by 140 basis points in the quarter, primarily due to strong program management and better direct labor utilization. Non-GAAP net income was $218 million<\/span> for the second quarter, which was down 2% year-over-year, and non-GAAP diluted EPS for the quarter was $1.52<\/span>, which was down 2% compared to the second quarter of fiscal year 2020. Excluding the VirnetX gain, non-GAAP net income and diluted EPS were both up 37%.<\/p>\n

\n Cash Flow Summary<\/b>\n <\/p>\n

Leidos generated $17 million<\/span> of net cash provided by operating activities, used $396 million<\/span> in investing activities, and provided $313 million<\/span> by financing activities in the second quarter of fiscal year 2021. After adjusting for payments for property, equipment and software, quarterly free cash flow was an outflow of $4 million<\/span>. The accounts receivable sale program decreased operating and free cash flow by $94 million<\/span>. In addition, consistent with the high levels of organic growth, operating and free cash inflows ran below their typical levels to fund the start-up of new programs and the expansion of existing programs. <\/p>\n

During the second quarter of fiscal year 2021, Leidos paid net consideration of $376 million<\/span> to acquire Gibbs & Cox, Inc. (“Gibbs & Cox”), the largest independent ship design firm focused on naval architecture and marine engineering. The acquisition positions Leidos to provide a broad set of engineering solutions to the U.S. Navy and to an expanding set of foreign navies. To finance the acquisition, on May 7, 2021<\/span>, Leidos entered into a senior unsecured term loan facility in an aggregate principal amount of $380\u00a0million\u00a0with a maturity of 364 days. <\/p>\n

In addition, Leidos paid down $27 million<\/span> of debt and returned $48 million<\/span> to shareholders as part of its regular quarterly cash dividend program. As of July\u00a02, 2021, Leidos had $338 million<\/span> in cash and cash equivalents and $5.1 billion<\/span> of debt. <\/p>\n

On July\u00a030, 2021, the Leidos Board of Directors declared that Leidos will pay a cash dividend of $0.36<\/span> per share on September\u00a030, 2021 to stockholders of record at the close of business on September\u00a015, 2021. The $0.02<\/span> per share increase in the quarterly dividend reflects Leidos’ confidence in the future outlook and commitment to shareholder returns.<\/p>\n

\n New Business Awards <\/b>\n <\/p>\n

Net bookings totaled $3.8 billion<\/span> in the quarter, representing a book-to-bill ratio of 1.1. As a result, backlog at the end of the quarter was $33.5 billion<\/span>, of which $7.2 billion<\/span> was funded. Included in the quarterly bookings were several particularly important awards: <\/p>\n