Booz Allen Hamilton's CEO Discusses F3Q12 Results - Earnings Call Transcript
Booz Allen Hamilton Holding Corporation (
)
F3Q12 Earnings Call
February 3, 2012 8:00 AM ET
Executives
Curt Riggle – Director, Investor Relations
Ralph Shrader – Chairman, President and CEO
Sam Strickland – Executive Vice President and CFO
Horacio Rozanski – Chief Operating Officer
Kevin Cook – Senior Vice President and Controller
Analysts
Nathan Rozof – Morgan Stanley
Bill Loomis – Stifel Nicolaus
Brian Gesuale – Raymond James
George Price – BB&T Capital Markets
Edward Caso – Wells Fargo Securities
Tim McHugh – William Blair Company
Robert Spingarn – Credit Suisse
Michael Lewis – Lazard Capital
Presentation
Operator
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Good morning. Thank you for standing by. And welcome to Booz Allen Hamilton’s Earnings Call covering Third Quarter Fiscal 2012 Results. At this time, all lines are in a listen-only mode. Later, there will be an opportunity for questions.
Right now, I’d like to turn the call to Mr. Curt Riggle. Please proceed.
Curt Riggle
Thank you, Erica. And thank you all for joining us today for Booz Allen’s third quarter fiscal 2012 earnings announcement. I’m Curt Riggle, Director of Investor Relations, and with me to talk about our financial results this morning is Ralph Shrader, our Chairman, Chief Executive Officer and President; and Sam Strickland, Executive Vice President and Chief Financial Officer.
We hope you’ve had an opportunity to read the press release on our third quarter earnings that we issued earlier this morning. We’ve also provided presentation slides on our website and are now on slide two.
On today’s call, Ralph will provide you with an overview of our business performance, recent developments and strategic positioning. Sam will then discuss our financial results in detail, including our income statement, balance sheet, cash flow and backlog. Ralph and Sam will discuss our guidance for fiscal 2012, which began on April 1, 2011, and provide an initial forecast for fiscal year 2013.
As shown in the disclaimer on slide three, please keep in mind that some of the items we will discuss this morning will include statements that maybe considered forward looking and therefore our subject to known and unknown risks and uncertainties, which may cause our actual results in future periods to differ materially from forecasted results.
Those risks and uncertainties include among other things, general economic conditions, the availability of government funding for our company services and other factors discussed in today’s earnings release and set forth under the forward-looking statements disclaimer included in our fiscal 2012 earnings -- third quarter earnings release and in our SEC filings.
We caution you not to place undue reliance on any forward-looking statements that we may make today and remind you that we assume no obligation to update or revise the information discussed on this call.
During today’s call we will also discuss some non-GAAP financial measures and other metrics, which we believe provide useful information for investors. We include an explanation of adjustments and other reconciliations of our non-GAAP measures to the most comparable GAAP measures in our fiscal 2012 third quarter earnings release and in these slides.
It is now my pleasure to turn over to our CEO, Ralph Shrader and he will start on slide four.
Ralph Shrader
Thank you, Curt. Good morning and thank you for joining us today. It has been an eventful quarter without the question the global economy has been challenging and the financial markets highly volatile. As you also well aware, our primary client, the U.S. federal government is in the period of significant uncertainty, characterized by funding delays and budget cuts.
Yet, despite these challenging macro trends the demand range remains high for Booz Allen’s capabilities and expertise, and we have continue to grow our topline revenue and improve our margins. Our client success is our highest calling and we are committed as always to being an employer of choice and good corporate citizen.
Booz Allen continued to grow revenue on our federal civil, defense and intelligence markets during the third quarter of fiscal 2012. We have a large backlog of solid work. Now totaling $12.22 billion and a well-positioned in growth areas such as cyber, health, finance and ISR, which is intelligence-surveillance-reconnaissance and we have a strong capability focused on helping clients, improve effectiveness and efficiency in their core missions. Additionally, we are growing and investing for future growth in the commercial and international markets that have opened to us since the exploration of our non-compete agreement on July 31, 2011.
In terms of financial highlights, our third quarter revenue increased to $1.44 billion, up from $1.39 billion in the third quarter of fiscal 2011. Net income for the quarter increased to $62.9 million, up from $20 -- $23.6 million in the prior year period.
Adjusted EBITDA increase to $120.1 million, up from $105.9 million from the third quarter of fiscal 2011, and adjusted diluted earnings per share increased by $0.13 for the quarter to $0.40 per share. We again generated solid free cash flow and have consistently managed cash for the long-term success of our business.
Today, we are announcing that our Board of Directors has declared a cash dividend in the amount of $0.09 per share. The dividend is payable on February 29, 2012 to stockholders of record at the close of business on February 13, 2012. We intend to begin payments of regular quarterly cash dividends subject to discretion of the Board.
Our Board’s decision to initiate a dividend reflects its confidence in Booz Allen financial strength and growth potential. Internally, we have taken important and difficult steps to reduce the size of our senior and middle management ranks, and take costs out of our infrastructure and overhead.
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