May 18, 2016
Return to Annual Revenue Growth
Full-year Revenue of $5.41 billion, a 2.5 percent increase
Full-year Adjusted EBITDA of $506 million
Full-year Adjusted Diluted Earnings per Share of $1.65
Quarterly dividend of $0.15 per share, payable on June 30, 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 fourth quarter and full year fiscal 2016.
The Company achieved a return to annual revenue growth after three years of contraction, and projects continued revenue growth in fiscal 2017. Total backlog grew by 26.2 percent over the prior year to a record year-end high, and the book-to-bill ratio for fiscal 2016 was 1.45x, a six-year high.
“Fiscal 2016 was a turning point for Booz Allen as revenue began to grow again and we continued to transform our company under our Vision 2020 growth strategy,” said Horacio Rozanski, President and Chief Executive Officer. “Clients across our defense, intelligence, civil, and global commercial markets understand that we bring the best people, capabilities, and solutions to their most important missions, combining our traditional strengths in consulting and domain knowledge with advanced skills in systems delivery, cyber, analytics and engineering. We are proud to once again deliver results that met or exceeded the financial outlook we provided at the beginning of the fiscal year.”
The Company authorized and declared a regular dividend of $0.15 per share, payable on June 30, 2016, to stockholders of record on June 10, 2016.
Full Fiscal Year 2016 – Booz Allen’s fiscal year runs from April 1 to March 31. A summary of the key factors driving results for the fiscal year ended March 31, 2016, is below:
- Gross Revenue was $5.41 billion, a 2.5 percent increase over the prior year. These results reflected increased client demand, which includes an increase in billable expenses, as well as the impact on cost reimbursable contracts from higher indirect spending. The growth in indirect spending for the year was primarily driven by increased marketing, administrative and bid and proposal activities in order to drive continued growth in fiscal 2017.
- Adjusted Operating Income decreased to $448.8 million from $465.1 million in fiscal 2015. The decrease was driven by higher indirect spending, partially offset by the release of certain provisions for the potential recovery of allowable expenses.
- Adjusted Net Income increased to $246.4 million, from $240.3 million in fiscal 2015. The increase was primarily the result of the decrease in Adjusted Operating Income, which was more than offset by a lower effective tax rate associated with the qualification of certain federal and state income tax credits.
- Adjusted EBITDA decreased to $506.1 million, from $523.5 million in fiscal 2015. This was driven by the same factors as Adjusted Operating Income.
- Diluted EPS increased to $1.94 from $1.52 in fiscal 2015, and Adjusted Diluted EPS increased to $1.65 from $1.60. The increase in Adjusted Diluted EPS was driven by the same factors as Adjusted Net Income, with an additional benefit from the reduction in diluted share count as a result of the repurchase of 2.1 million shares during fiscal 2016. The increase in Diluted EPS also was driven by the same factors as Adjusted Net Income, as well as the release of certain income tax reserves in the third and fourth quarters related to the 2008 acquisition of the Company.
- Net cash provided by operating activities in fiscal 2016 was $249.2 million and Free Cash Flow was $182.6 million. A decline in cash flow generation from the prior year was primarily the result of an increase in accounts receivable and an increase in capital expenditures on facilities and equipment.
As of March 31, 2016, total backlog was $11.8 billion, compared to $9.4 billion as of March 31, 2015, an increase of 26.2 percent. The majority of the growth is in priced options, which rose by 45 percent to $6.6 billion. The improvement in total backlog was due to greater investments in bid and proposal activity in a more stable government contracting environment.
Fourth Quarter 2016 – Below is a summary of Booz Allen’s results for the fiscal 2016 fourth quarter and the key factors driving those results:
- Gross Revenue increased by 6.1 percent in the fourth quarter of fiscal 2016 compared with the prior year period, primarily as a result of increased client demand, which includes an increase in billable expenses.
- Adjusted Operating Income increased to $105.6 million from $93.6 million in the prior year period, driven by the same factors as Gross Revenue, as well as the release of certain provisions for the potential recovery of allowable expenses.
- Adjusted Net Income increased to $61.3 million, from $44.8 million in the prior year period. The increase was due to the same factors as Adjusted Operating Income, with the additional benefit of a decrease in the effective tax rate for fiscal 2016.
- Adjusted EBITDA increased to $119.4 million, from $108.0 million in the prior year period. The increase was driven by the same factors as Adjusted Operating Income.
- Diluted EPS increased to $0.43 from $0.29 in the prior year period, and Adjusted Diluted EPS increased to $0.41 from $0.30. The increase in Adjusted Diluted EPS was driven by the same factors as Adjusted Net Income.
For fiscal 2017, 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 150.0 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, May 18, 2016, to discuss the financial results for its fourth quarter and full fiscal year 2016 (ended March 31, 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 May 18, 2016, and continuing for 30 days.