Engility Holdings, Inc. (NYSE: EGL), a global provider of technical and professional services for the U.S. Government, today announced financial results for the fourth quarter and full year ended December 31, 2012.
Fourth Quarter 2012 Results
Total revenue for the fourth quarter was $396 million and operating income for the quarter was $27 million. Adjusted operating income for the fourth quarter was $28 million. Net income attributable to Engility was $41 million, or $2.38 per diluted share. Adjusted net income was $13 million, or $0.77 per diluted share. Information about Engility’s use of non-GAAP financial information is provided below under “Non-GAAP Measures.”
“Our fourth quarter was very solid, as we exceeded our internal top and bottom line targets and won key IDIQ awards that will provide opportunities for 2013 and beyond,” said Tony Smeraglinolo, President and CEO of Engility. “These achievements reflect the strength of our business model and validate that Engility is well positioned to meet the challenges of today’s budget constrained environment. During the fourth quarter, we also completed our significant cost reduction initiatives ahead of schedule. This, along with the organizational realignment we implemented on January 1
, enhances our competitive position in the market.”
“The federal government market remains challenging given current budget uncertainties. Nevertheless, our long-standing success in supporting our customers’ missions, combined with our enhanced operating efficiencies and disruptive pricing model is differentiating us from our competition. These characteristics also are enabling us to provide the mission critical services our customers require at prices that can ease their budget constraints. As we enter fiscal year 2013, we will remain focused on our pure-play services strategy and leveraging our strong current pipeline of opportunities to further increase shareholder value.”
Key Performance Indicators
Significant Fourth Quarter 2012 Awards
- Funded backlog as of December 31, 2012 was $856 million, compared to $788 million as of the end of the September 2012 quarter.
- Contract funded orders in the fourth quarter of 2012 were $461 million, representing a book-to-bill ratio of 1.2.
- Contract funded orders for the full year 2012 were $1.7 billion, representing a book-to-bill ratio of 1.0.
- Days sales outstanding at the end of the 2012 fourth quarter were 84 days, compared to 82 days at the end of the September 2012 quarter.
Key indefinite delivery/indefinite quantity (IDIQ) awards won during the fourth quarter of 2012, which highlight the breadth of our value-added service offerings, include:
Fiscal Year 2012 Results
- A prime position on a $900 million multiple-award IDIQ contract for new work to provide Production, Installation, and In-Service Support (PII) services to the Space and Naval Warfare Systems Center (SPAWARSYSCEN) Atlantic, Charleston, SC. Under this five year contract, we will provide a wide array of services, including design, acquisition, production, integration, testing, installation, lifecycle support, and configuration management of certified Command, Control, Communications, Computers, Combat Systems, Intelligence, Surveillance, and Reconnaissance (C5ISR) capabilities.
- A prime position on a $750 million multiple-award IDIQ contract for new work to support the Space and Naval Warfare Systems Center (SPAWARSYSCEN) Atlantic, Charleston, S.C. Under this five year contract, we will provide Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance (C4ISR) and Information Technical (IT) expertise in support of customers in Charleston, central Europe and other locations outside the continental United States.
- A prime position on a $350 million multiple-award IDIQ contract for the U.S. Agency for International Development’s (USAID) Clean Energy contract for Non-Critical Priority Countries. Under this five year contract, we will provide a range of critical activities, from energy sector reform to increasing human resource capacity related to energy services and fostering private sector participation and investment. This new work represents an expansion of energy support services that our highly skilled team of professionals has been providing on USAID’s behalf for the past 34 years; and
- A prime position on four domain areas of a multi-million dollar contract to support the Joint Program Executive Office for Chemical and Biological Defense (JPEO-CBD). The potential value of this six-domain IDIQ five year contract is $495 million. For this new work award, we were selected to provide services in the fields of engineering and technical support, business and analytical assistance, information technology and logistics.
For fiscal year 2012, the Company reported total revenue of $1.66 billion and a GAAP operating loss of $329 million. Fiscal year 2012 adjusted operating income was $129 million, which excludes a total of $458 million before tax in spin-off related transaction costs, realignment costs, legal and settlement costs, and a non-cash goodwill impairment charge. GAAP net loss attributable to Engility was $350 million, or $21.52 per diluted share. Excluding the above charges, adjusted net income attributable to Engility was $67 million, or $4.06 per diluted share. We exceeded the revenue and adjusted diluted earnings per share guidance we issued on November 13, 2012, primarily as a result of stronger than expected revenue, lower overall costs, and a lower than anticipated share count. Information about Engility’s use of non-GAAP financial information is provided below under “Non-GAAP Measures.”