AECOM Technology Corporation (NYSE: ACM) today reported its financial results for the fourth quarter and full year for fiscal 2012, which ended Sept. 30, 2012. The company reported fourth-quarter revenue of $2.1 billion. In addition, fourth-quarter revenue, net of other direct costs 1, was $1.3 billion. Due to the $336-million impairment charge ($317 million net of tax), the company reported an operating loss of $199 million, a net loss of $225 million, and a loss per share of $2.05 for the fourth quarter. Adjusted to exclude the goodwill impairment charge, operating income was $137 million, net income was $92 million, and diluted earnings per share was $0.83 in the fourth quarter.
During the fourth quarter, in connection with its annual goodwill impairment testing, the company concluded that an impairment of its goodwill existed within its Europe business and its Management Support Services (MSS) reporting unit. As a result, the company recorded a goodwill impairment charge of $2.88 per share or $317 million net of tax. In Europe, the impairment charge resulted primarily from the negative impact of economic trends, which drove a reduction in profit levels. The impairment in MSS was largely driven by the loss of revenue due to the precipitous drawdown of troops in Iraq during 2012. Based on the strong growth in profit in the second half of fiscal 2012, the company expects that both its Europe and MSS businesses will show strong growth in profitability in fiscal 2013. The impairment did not have any impact on the company’s compliance with its debt covenants, its cash flows or its operations.
|Fourth Quarter||Fiscal Year 2012|
($ in millions, except EPS)
|Q4 FY11||Q4 FY12||Change||FY11||FY12||
|Net Service Revenue 1||$1,359||$1,340||(1%)||$5,181||$5,184||0%|
|Net Income 2||$87||($225)||(357%)||$276||($59)||(121%)|
|Earnings per Share 2||$0.75||($2.05)||(373%)||$2.33||($0.52)||(122%)|
|Operating Cash Flow||$262||$226||(14%)||$132||$433||228%|
|Free Cash Flow 3||$231||$211||(9%)||$202||$370||83%|
|Net Income 2||$87||$92||6%||$276||$259||(6%)|
|Earnings per Share 2||$0.75||$0.83||11%||$2.33||$2.30||(1%)|
For purposes of comparison, the discussion below of results excludes the impact of the impairment charge unless noted otherwise. Also, all growth comparisons that follow are year over year unless noted otherwise.
“I am pleased with the progress that we made sequentially in the quarter on growth and profitability,” said John M. Dionisio, AECOM chairman and chief executive officer. “We won $2.3 billion in new wins during the quarter, driving backlog up 3% year over year to $16 billion. Our unyielding commitment to improved profitability lifted EBITDA margins to 12% — a record level for the fourth quarter. Our results clearly demonstrate the progress that we’ve made to drive a performance culture committed to improved growth, profitability and liquidity. For fiscal year 2013, we are targeting earnings per share of $2.40-$2.50, which reflects continued pressure on growth as a result of the global macro-economic climate.”
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