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Booz Allen Hamilton Announces Second Quarter Fiscal 2013 Results

Stocks in this article: BAH

Financial Review

Second Quarter Fiscal 2013 – Below is a summary of Booz Allen’s results for the fiscal 2013 second quarter and the key factors driving those results:

  • Booz Allen’s 2.9 percent decrease in revenue in the second quarter of fiscal 2013 compared with the prior year period was primarily due to a decrease in the percentage of revenue attributable to billable expenses and a lower ratio of indirect costs to direct labor compared with the prior year period. The lower indirect costs are due to the cost restructuring in January 2012 and a continued emphasis on cost management in the business, which has a direct correlation to a reduction in revenue recognized on cost reimbursable contracts.
  • In the second quarter of fiscal 2013, operating income increased to $102.0 million from $93.7 million in the prior year period, and Adjusted Operating Income increased to $109.3 million from $100.0 million in the prior year period. The improvement in Adjusted Operating Income was driven by more effective deployment of Booz Allen’s consulting staff and disciplined management of the Company’s costs.
  • In the second quarter of fiscal 2013, net income decreased to $46.1 million from $75.3 million in the prior year period, and Adjusted Net Income increased to $55.7 million from $50.6 million in the prior year period. Adjusted EBITDA increased 8.2 percent to $123.8 million in the second quarter of fiscal 2013, compared with $114.5 million in the prior year period. In the second quarter of fiscal 2013, diluted EPS decreased to $0.27 from $0.53 in the prior year period; Adjusted Diluted EPS increased to $0.39 from $0.36 in the prior year period. These metrics were driven by the same factors as Adjusted Operating Income as well as by an increase in income taxes, interest and other expenses for the quarter ended September 30, 2012.
  • As previously noted, earnings in the prior year period reflected a substantial increase attributable to the release of a significant income tax reserve and the realization of a gain from the sale of Booz Allen’s state and local transportation business in the quarter ending September 30, 2011. In the current quarter ended September 30, 2012, the Company incurred one-time costs associated with the July 2012 refinancing transaction. Adjusted Net Income, Adjusted EBITDA, and Adjusted Diluted Earnings per Share remove these one-time and unusual items.

Funded backlog as of September 30, 2012 was $3.52 billion, compared with $3.44 billion as of September 30, 2011. Booz Allen’s total backlog, as of September 30, 2012, was $12.45 billion, compared with an all-time high of $12.86 billion as of September 30, 2011. The seasonally strong total backlog and increased funded backlog in the second quarter of fiscal 2013 are important indicators of resilience in the Company’s business given the continuing uncertainty faced by its clients.

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