July 27, 2016
Solid Execution Against Growth Objectives
First Quarter Revenue of $1.42 billion, a 5.3 percent increase
Net Income of $67.8 million; Adjusted EBITDA1 of $143.8 million
Diluted Earnings per Share of $0.45 and Adjusted Diluted Earnings per Share1 of $0.46
Quarterly dividend of $0.15 per share, payable on August 31, 2016
McLean, VA — Booz Allen Hamilton Holding Corporation (NYSE:BAH), the parent company of management and technology consulting and engineering services firm Booz Allen Hamilton Inc., today announced preliminary results for the first quarter of fiscal 2017.
The Company generated a second consecutive quarter of healthy year-over-year revenue growth, delivered improved earnings over the prior year period, and recorded seasonally strong contract awards. Total backlog grew by 29.8 percent over the prior year, generating a book-to-bill ratio of 1.14x, the strongest first-quarter award performance since fiscal 2012.
“Booz Allen’s solid first quarter results demonstrate again Booz Allen’s success in setting a plan and executing against it, as well as our continued progress toward sustainable, quality growth,” said Horacio Rozanski, President and Chief Executive Officer. “Clients across our defense, intelligence, civil, and global commercial markets see the differentiation and quality our exceptional people offer by integrating consulting, technical expertise, and mission knowledge.”
The Company authorized and declared a regular dividend of $0.15 per share, payable on August 31, 2016, to stockholders of record on August 10, 2016.
First Quarter 2016 – A summary of additional results for the first quarter of fiscal 2017 and the key factors driving those results is below:
- Gross Revenue was $1.42 billion in the first quarter of fiscal 2017, an increase of 5.3 percent compared with the prior year period, primarily driven by increased client staff billability, and therefore direct labor to meet increased client demand. The growth was additionally driven by an increase in billable expenses.
- Operating Income increased to $129.3 million from $126.1 million and Adjusted Operating Income1 increased to $130.4 million from $127.2 million in the prior year period, both primarily driven by the same factors as Gross Revenue.
- Net Income increased to $67.8 million from $64.3 million and Adjusted Net Income1 increased to $69.3 million, from $65.7 million in the prior year period. The increase in Net Income and Adjusted Net Income were primarily due to the same factors as Gross Revenue, as well as a lower effective tax rate.
- Adjusted EBITDA increased to $143.8 million, from $141.3 million in the prior year period. The increase was driven by the same factors that increased Gross Revenue.
- Diluted EPS increased to $0.45 from $0.43 in the prior year period, and Adjusted Diluted EPS increased to $0.46 from $0.44. The increases were driven by the same factors affecting Net Income and Adjusted Net Income.
- Net cash provided by operating activities was $11.6 million and Free Cash Flow1was $5.5 million. The decrease in cash flow generation from the prior year was primarily the result of an increase in accounts receivable tied to our strong revenue growth and the residual effect of excess indirect costs incurred during the prior fiscal year.
As of June 30, 2016, total backlog was $12.0 billion, compared to $9.3 billion as of June 30, 2015, an increase of 29.8 percent. The majority of the growth in total backlog was in priced options, which rose to $6.5 billion, an increase of 48.6 percent compared with the prior year period, while both funded and unfunded backlog also showed significant growth. The improvement in total backlog was due to awards resulting from greater investments in bid and proposal activity in the prior fiscal year.
1 Adjusted EBITDA, Adjusted Diluted EPS, Adjusted Operating Income, Adjusted Net Income, and Free Cash Flow are non-GAAP financial measures. See “Non-GAAP Financial Information” below for additional detail.
For our full fiscal year 2017 we are reaffirming the guidance we issued on May 18, 2016. For the full year, we expect revenue to increase in the range of two percent to five percent. At the bottom line, for the full year, we are forecasting diluted EPS to be in the range of $1.60 to $1.70 and Adjusted Diluted EPS to be on the order of $1.65 to $1.75.
These EPS estimates are based on fiscal 2017 estimated average diluted shares outstanding of approximately 150 million shares, and a 40.1 percent effective tax rate, which does not include federal and state tax credits for which qualification has not yet been established.
Conference Call Information
Booz Allen Hamilton will host a conference call at 8 a.m. EDT on Wednesday, July 27, 2016, to discuss the financial results for its first quarter of fiscal year 2017 (ended June 30, 2016).
Analysts and institutional investors may participate on the call by dialing (877) 375-9141 International: (253) 237-1151. The conference call will be webcast simultaneously to the public through a link on the investor relations section of the Booz Allen Hamilton web site at investors.boozallen.com. A replay of the conference call will be available online at investors.boozallen.com beginning at 11 a.m. EDT on July 27, 2016, and continuing for 30 days.