CHANTILLY, Va., Feb. 5, 2021 /PRNewswire/ -- Perspecta Inc.
(NYSE:PRSP), a leading U.S. government services provider, today
announced financial results for the third quarter of fiscal year
2021, which ended January 1, 2021.
As previously announced on January 27,
2021, Perspecta entered into a definitive merger agreement
to be acquired by Peraton, a portfolio company of Veritas Capital
Fund Management, L.L.C. Under the terms of the merger agreement,
Perspecta stockholders will receive $29.35 per share in cash. The merger is subject
to customary conditions, including approval by Perspecta
stockholders as well as the receipt of regulatory approvals and
other customary closing conditions. The transaction is expected to
close in the first half of calendar year 2021.
Summary operating results (unaudited)
|
|
Fiscal Quarter
Ended
|
(in millions, except
margin and per share amounts)
|
|
January 1,
2021
|
|
December 31,
2019
|
Revenue
|
|
$
|
1,134
|
|
|
$
|
1,126
|
|
Income before
taxes
|
|
$
|
45
|
|
|
$
|
75
|
|
Operating
margin
|
|
4.0
|
%
|
|
6.7
|
%
|
Net income
|
|
$
|
31
|
|
|
$
|
53
|
|
Diluted earnings per
share (EPS)
|
|
$
|
0.19
|
|
|
$
|
0.33
|
|
|
|
|
|
|
Non-GAAP
Measures*:
|
|
|
|
|
Adjusted Net
Income
|
|
$
|
90
|
|
|
$
|
90
|
|
Adjusted
EBITDA
|
|
$
|
181
|
|
|
$
|
195
|
|
Adjusted EBITDA
Margin
|
|
16.0
|
%
|
|
17.3
|
%
|
Adjusted Diluted
EPS
|
|
$
|
0.56
|
|
|
$
|
0.55
|
|
|
|
|
|
|
* Adjusted Net
Income, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted
Diluted EPS are non-GAAP financial measures. Non-GAAP financial
measures should be considered in addition to, but not as a
substitute for, the information provided in accordance with GAAP.
See Selected Financial Data and Reconciliation of Non-GAAP
Financial Measures at the end of this press release for more
information.
|
The tables in Selected Financial Data and Reconciliation of
Non-GAAP Financial Measures at the end of this press release
provide all appropriate reconciliations from adjusted results to
GAAP.
Revenue for the quarter was $1.13
billion, up 1% compared to the third quarter of fiscal year
2020, and down 1% compared to the second quarter of fiscal year
2021. The year-over-year increase in revenue was due to growth on
existing programs partially offset by the COVID-19 impact of
approximately $19 million in the
third quarter of fiscal year 2021. Excluding the impact of the
COVID-19 pandemic, revenue for the quarter grew 2%
year-over-year.
Income before taxes for the third quarter of fiscal year 2021
was $45 million, which was down 40%
compared to the third quarter of fiscal year 2020. Operating margin
decreased from 6.7% to 4.0% year-over-year. Net income was
$31 million, or $0.19 per diluted share.
Adjusted net income was $90
million for the third quarter of fiscal year 2021, which was
flat year-over-year. Adjusted EBITDA was $181 million for the third quarter of fiscal year
2021, down 7% compared to adjusted EBITDA for the third quarter of
fiscal year 2020. The as-expected year-over-year decrease in
profitability was primarily due to lower asset intensity, an
increased mix of cost-reimbursable programs and a $3 million COVID-19 impact. Adjusted diluted EPS
for the third quarter of fiscal year 2021 was $0.56, up 2% compared to adjusted diluted EPS for
the third quarter of fiscal year 2020.
Segment operating results (unaudited)
For the fiscal quarter ended January 1, 2021, Defense and
Intelligence segment revenue of $795 million decreased by 2%
compared to the segment's revenue from the third quarter of fiscal
year 2020, primarily due to lower volume, including revenue lost as
a result of COVID-19. Civilian and Health Care segment revenue of
$339 million increased by 8% compared
to the segment's revenue from the comparable period of the prior
year due to the continued ramp up of key new programs.
Defense and Intelligence adjusted segment profit margin for the
third quarter of fiscal year 2021 decreased to 13.2% from 14.4% in
the third quarter of fiscal year 2020. Civilian and Health Care
adjusted segment profit margin for the third quarter of fiscal year
2021 decreased to 12.7% from 12.8% in the third quarter of fiscal
year 2020.
Cash management and capital deployment
Perspecta generated $117 million
of net cash provided by operating activities, used $5 million in investing activities, and used
$101 million in financing activities
in the third quarter of fiscal year 2021. Quarterly free cash flow
was $93 million, or 103% of adjusted
net income, and was reduced by $15
million (or approximately 17% of adjusted net income) of
restructuring, separation, transaction, and integration-related
costs. During the third quarter of fiscal year 2021, Perspecta used
$72 million to make debt repayments
and returned $11 million to
shareholders in the form of its regular quarterly cash dividend
program.
At quarter end, Perspecta had $224 million in cash and
cash equivalents, $750 million of
undrawn capacity in its revolving credit facility, and $2.4 billion in total debt, including
$191 million in finance lease
obligations. On February 3, 2021, the Perspecta Board of
Directors declared that Perspecta will pay a cash dividend of
$0.07 per share on April 15,
2021 to Perspecta shareholders of record at the close of business
on March 3, 2021.
Contract awards
Contract awards (bookings) totaled $0.9
billion in the third quarter of fiscal year 2021,
representing a book-to-bill ratio of 0.8x. Included in the
quarterly bookings were the following single-award prime
contracts:
- Space Development Agency (SDA) systems engineering and
integration program work: Perspecta will deliver systems
engineering and integration support for SDA's initial satellite
constellation known as Tranche 0, a system designed to demonstrate
the initial capabilities of the National Defense Space Architecture
(NDSA). Under the terms of the agreement, Perspecta engineers and
architects will develop infrastructure to ensure the NDSA Transport
Layer, Tracking Layer and ground segment operate in unison to
support warfighter mission scenarios and experiments. The single
award, indefinite delivery/indefinite quantity (ID/IQ) contract,
which represents new work for the company, has a ceiling of
$112 million and an ordering period
of five years.
- Next Generation Enterprise Services Contract Extension from
the U.S. Navy: Perspecta was awarded an extension of the Next
Generation Enterprise Network (NGEN) contract from the U.S.
Department of the Navy with a maximum ceiling value of $797 million, if all options are exercised, for
continued delivery of enterprise IT services. The ID/IQ contract
includes an extension for six months of support, from January 1, 2021 to June
30, 2021, and three one-month options beyond that
timeframe.
Perspecta's backlog of signed business orders at the end of the
third quarter of fiscal year 2021 was $13.6 billion; funded backlog at the end of
the third quarter was $1.7
billion.
The fourth quarter of fiscal year 2020 marked the beginning of
the COVID-19 pandemic in the United
States, and the pandemic has continued through the third
quarter of fiscal year 2021. Due to the mission-critical nature of
the majority of our business, substantially all of the services we
provide to our government customers have been considered essential
services, which has allowed them to continue, and the company has
maintained its workforce at near full capacity. For the fiscal
quarter ended January 1, 2021, the overall impact of the
COVID-19 pandemic on our results of operations was approximately
$19 million lower revenue,
$3 million lower adjusted EBITDA and
a year-to-date liquidity benefit of $57
million due to a deferral of payroll tax payments afforded
by the Coronavirus Aid, Relief and Economic Security Act. We
continue to assess further possible implications to our business,
supply chain and customers, and to take actions in an effort to
mitigate adverse consequences.
About Perspecta Inc.
At Perspecta, we question, we seek and we solve. Perspecta
brings a diverse set of capabilities to our U.S. government
customers in defense, intelligence, civilian, health care and state
and local markets. Our 280+ issued, licensed and pending patents
are more than just pieces of paper, they tell the story of our
innovation. With offerings in mission services, digital
transformation and enterprise operations, our team of nearly 14,000
engineers, analysts, investigators and architects work tirelessly
to not only execute the mission, but build and support the backbone
that enables it. Perspecta was formed to take on big challenges. We
are an engine for growth and success and we enable our customers to
build a better nation. For more information about Perspecta, visit
perspecta.com.
Forward-looking statements
All statements and assumptions in this press release that do not
directly and exclusively relate to historical facts could be deemed
"forward-looking statements." Forward-looking statements are often
identified by the use of words such as "anticipates," "believes,"
"estimates," "expects," "may," "could," "should," "forecast,"
"goal," "intends," "objective," "plans," "projects," "strategy,"
"target" and "will" and similar words and terms or variations of
such. These statements represent current intentions, expectations,
beliefs or projections, and no assurance can be given that the
results described in such statements will be achieved.
Forward-looking statements include, among other things, statements
with respect to the expected timing of the closing of the merger
with Peraton and our financial condition, results of operations,
cash flows, business strategies, prospects, guidance, share
repurchases, dividend payments, contract value, revenue
acceleration, profitability and revenue generation. Such statements
are subject to numerous assumptions, risks, uncertainties and other
factors that could cause actual results to differ materially from
those described in such statements, many of which are outside of
our control. Important factors that could cause actual results to
differ materially from those described in forward-looking
statements include, but are not limited to, (i) potential
disruptions to our business caused by the proposed acquisition of
us by Peraton, a portfolio company of Veritas Capital Fund
Management, L.L.C.; (ii) failure to complete the merger with
Peraton in a timely manner or at all; (iii) various risks related
to health epidemics, pandemics and similar outbreaks, such as the
COVID-19 pandemic, which may have material adverse effects on our
business, financial position, results of operations and/or cash
flows; (iv) any issue that compromises our relationships with the
U.S. federal government, or any state or local governments, or
damages our professional reputation; (v) changes in the U.S.
federal, state and local governments' spending and mission
priorities that shift expenditures away from agencies or programs
that we support; (vi) any delay in completion of the U.S. federal
government's budget process; (vii) failure to comply with numerous
laws, regulations and rules, including regarding procurement,
anti-bribery and organizational conflicts of interest; (viii)
failure by us or our employees to obtain and maintain necessary
security clearances or certifications; (ix) our ability to compete
effectively in the competitive bidding process and delays, contract
terminations or cancellations caused by competitors' protests of
major contract awards received by us; (x) our ability to accurately
estimate or otherwise recover expenses, time and resources for our
contracts; (xi) problems or delays in the development, delivery and
transition of new products and services or the enhancement of
existing products and services to meet customer needs and respond
to emerging technological trends; (xii) failure of third parties to
deliver on commitments under contracts with us; (xiii) misconduct
or other improper activities from our employees or subcontractors;
(xiv) delays, terminations, or cancellations of our major contract
awards, including as a result of our competitors protesting such
awards; (xv) failure of our internal control over financial
reporting to detect fraud or other issues; (xvi) failure or
disruptions to our systems, due to cyber-attack, service
interruptions or other security threats; (xvii) failure to be
awarded task orders under our indefinite delivery/indefinite
quantity contracts; (xviii) changes in government procurement,
contract or other practices or the adoption by the government of
new laws, rules and regulations in a manner adverse to us; and
(xix) uncertainty from the expected discontinuance of the London
Interbank Offered Rate and transition to any other interest rate
benchmark; as well as the matters described in the "Cautionary
Statement Regarding Forward-Looking Statements" and "Risk Factors"
sections of Perspecta's Annual Report on Form 10-K for the fiscal
year ended March 31, 2020, as may be
updated or supplemented in our Quarterly Reports on Form 10-Q and
our other filings with the Securities and Exchange Commission,
which discuss these and other factors that could adversely affect
our results. Readers are cautioned not to place undue reliance on
such statements which speak only as of the date they are made. We
do not undertake any obligation to update or release any revisions
to any forward-looking statement or to report any events or
circumstances after the date of this press release or to reflect
the occurrence of unanticipated events except as required by
law.
Condensed
Consolidated Statements of Operations
|
(preliminary and
unaudited)
|
|
|
|
Fiscal Quarter
Ended
|
(in millions, except
per share amounts)
|
|
January 1,
2021
|
|
December 31,
2019
|
Revenue
|
|
$
|
1,134
|
|
|
$
|
1,126
|
|
|
|
|
|
|
Costs of
services
|
|
906
|
|
|
863
|
|
Selling, general and
administrative
|
|
57
|
|
|
77
|
|
Depreciation and
amortization
|
|
93
|
|
|
92
|
|
Restructuring
costs
|
|
2
|
|
|
—
|
|
Separation,
transaction and integration-related costs
|
|
7
|
|
|
20
|
|
Interest expense,
net
|
|
28
|
|
|
34
|
|
Other (income)
expense, net
|
|
(4)
|
|
|
(35)
|
|
Total costs and
expenses
|
|
1,089
|
|
|
1,051
|
|
|
|
|
|
|
Income before
taxes
|
|
45
|
|
|
75
|
|
Income tax
expense
|
|
14
|
|
|
22
|
|
Net income
|
|
$
|
31
|
|
|
$
|
53
|
|
|
|
|
|
|
Earnings per common
share:
|
|
|
|
|
Basic
|
|
$
|
0.19
|
|
|
$
|
0.33
|
|
Diluted
|
|
$
|
0.19
|
|
|
$
|
0.33
|
|
Selected Condensed
Consolidated Balance Sheets
|
(preliminary and
unaudited)
|
|
(in
millions)
|
|
January 1,
2021
|
|
March 31,
2020
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
224
|
|
|
$
|
147
|
|
Receivables, net of
allowance for doubtful accounts of $1 and $1
|
|
531
|
|
|
513
|
|
Other
receivables
|
|
11
|
|
|
45
|
|
Prepaid
expenses
|
|
63
|
|
|
81
|
|
Other current
assets
|
|
69
|
|
|
101
|
|
Total current
assets
|
|
898
|
|
|
887
|
|
Property and
equipment, net of accumulated depreciation of $280 and
$193
|
|
262
|
|
|
307
|
|
Goodwill
|
|
2,702
|
|
|
2,671
|
|
Intangible assets,
net of accumulated amortization of $691 and $515
|
|
1,026
|
|
|
1,193
|
|
Other
assets
|
|
314
|
|
|
347
|
|
Total assets
|
|
$
|
5,202
|
|
|
$
|
5,405
|
|
|
|
|
|
|
LIABILITIES and
SHAREHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Current maturities of
long-term debt
|
|
$
|
90
|
|
|
$
|
89
|
|
Current finance lease
obligations
|
|
96
|
|
|
111
|
|
Current operating lease
obligations
|
|
33
|
|
|
39
|
|
Accounts
payable
|
|
191
|
|
|
218
|
|
Accrued payroll and
related costs
|
|
203
|
|
|
142
|
|
Accrued
expenses
|
|
363
|
|
|
385
|
|
Other current
liabilities
|
|
96
|
|
|
73
|
|
Total current
liabilities
|
|
1,072
|
|
|
1,057
|
|
Long-term debt, net
of current maturities
|
|
2,123
|
|
|
2,283
|
|
Non-current finance
lease obligations
|
|
95
|
|
|
136
|
|
Non-current operating
lease obligations
|
|
126
|
|
|
129
|
|
Deferred tax
liabilities
|
|
71
|
|
|
114
|
|
Other long-term
liabilities
|
|
307
|
|
|
329
|
|
Total
liabilities
|
|
3,794
|
|
|
4,048
|
|
Commitments and
contingencies
|
|
|
|
|
Total shareholders'
equity
|
|
1,408
|
|
|
1,357
|
|
Total liabilities and
shareholders' equity
|
|
$
|
5,202
|
|
|
$
|
5,405
|
|
Condensed
Consolidated Statements of Cash Flows
|
(preliminary and
unaudited)
|
|
|
|
Fiscal Quarter
Ended
|
|
Three Fiscal
Quarters Ended
|
(in
millions)
|
|
January 1,
2021
|
|
December 31,
2019
|
|
January 1,
2021
|
|
December 31,
2019
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
31
|
|
|
$
|
53
|
|
|
$
|
44
|
|
|
$
|
113
|
|
Adjustments to
reconcile net (loss) income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
93
|
|
|
92
|
|
|
285
|
|
|
283
|
|
Share-based
compensation
|
|
10
|
|
|
6
|
|
|
27
|
|
|
21
|
|
Deferred income
taxes
|
|
(31)
|
|
|
24
|
|
|
(48)
|
|
|
4
|
|
Loss (gain) on sale or
disposal of assets, net
|
|
—
|
|
|
(33)
|
|
|
12
|
|
|
(23)
|
|
Other non-cash
charges, net
|
|
1
|
|
|
(1)
|
|
|
12
|
|
|
3
|
|
Changes in assets and
liabilities, net of effects of acquisitions:
|
|
|
|
|
|
|
|
|
Receivables,
net
|
|
26
|
|
|
(1)
|
|
|
51
|
|
|
49
|
|
Prepaid expenses and
other current assets
|
|
9
|
|
|
(8)
|
|
|
16
|
|
|
38
|
|
Accounts payable,
accrued expenses and other current liabilities
|
|
(9)
|
|
|
(4)
|
|
|
28
|
|
|
(20)
|
|
Deferred revenue and
advanced contract payments
|
|
(12)
|
|
|
(8)
|
|
|
1
|
|
|
(24)
|
|
Income taxes payable
and liability
|
|
4
|
|
|
(4)
|
|
|
(3)
|
|
|
(6)
|
|
Other assets and
liabilities, net
|
|
(5)
|
|
|
4
|
|
|
(12)
|
|
|
2
|
|
Net cash provided by
operating activities
|
|
117
|
|
|
120
|
|
|
413
|
|
|
440
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Payments for
acquisitions, net of cash acquired
|
|
—
|
|
|
—
|
|
|
(53)
|
|
|
(265)
|
|
Proceeds from sale of
assets
|
|
1
|
|
|
77
|
|
|
10
|
|
|
77
|
|
Purchases of property,
equipment and software
|
|
(6)
|
|
|
(7)
|
|
|
(32)
|
|
|
(11)
|
|
Payments for
outsourcing contract costs
|
|
—
|
|
|
(1)
|
|
|
—
|
|
|
(4)
|
|
Net cash used in
investing activities
|
|
(5)
|
|
|
69
|
|
|
(75)
|
|
|
(203)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Principal payments on
long-term debt
|
|
(72)
|
|
|
(24)
|
|
|
(124)
|
|
|
(69)
|
|
Payments of debt
issuance costs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3)
|
|
Proceeds from
revolving credit facility
|
|
—
|
|
|
—
|
|
|
—
|
|
|
175
|
|
Payments on revolving
credit facility
|
|
—
|
|
|
(125)
|
|
|
(50)
|
|
|
(125)
|
|
Payments on finance
lease obligations
|
|
(18)
|
|
|
(33)
|
|
|
(85)
|
|
|
(110)
|
|
Repurchases of common
stock
|
|
—
|
|
|
(14)
|
|
|
—
|
|
|
(46)
|
|
Repurchases of common
stock to satisfy tax withholding obligations
|
|
(1)
|
|
|
(2)
|
|
|
(3)
|
|
|
(2)
|
|
Dividends
paid
|
|
(11)
|
|
|
(10)
|
|
|
(32)
|
|
|
(28)
|
|
Proceeds from employee
stock purchase plan
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
Net cash used in
financing activities
|
|
(101)
|
|
|
(208)
|
|
|
(293)
|
|
|
(208)
|
|
Net change in cash and
cash equivalents, including restricted
|
|
11
|
|
|
(19)
|
|
|
45
|
|
|
29
|
|
Cash and cash
equivalents, including restricted, at beginning of
period
|
|
255
|
|
|
147
|
|
|
221
|
|
|
99
|
|
Cash and cash
equivalents, including restricted, at end of period
|
|
266
|
|
|
128
|
|
|
266
|
|
|
128
|
|
Less restricted cash
and cash equivalents included in other current assets
|
|
42
|
|
|
59
|
|
|
42
|
|
|
59
|
|
Cash and cash
equivalents at end of period
|
|
$
|
224
|
|
|
$
|
69
|
|
|
$
|
224
|
|
|
$
|
69
|
|
Selected Financial Data and Reconciliation of Non-GAAP
Financial Measures
The following tables present selected financial data, including
the reconciliation of non-GAAP financial measures to the most
directly comparable financial measures calculated and presented in
accordance with GAAP. Perspecta management believes that these
non-GAAP financial measures provide useful additional information
to investors regarding Perspecta's results of operations as they
provide another measure of Perspecta's profitability and ability to
service its debt and are considered important to financial analysts
covering Perspecta's industry.
These non-GAAP financial measures have limitations as an
analytical tool and should not be considered in isolation or as a
substitute for income from operations, net income, diluted EPS or
any other measure of financial performance reported in accordance
with GAAP. Perspecta's non-GAAP measures may be calculated
differently than similarly named measures reported by other
companies. In addition, using non-GAAP measures may have limited
value as they exclude certain items that may have a material impact
on reported financial results and cash flows. When analyzing
Perspecta's performance, it is important to evaluate each
adjustment in the reconciliation tables and use adjusted measures
in addition to, and not as an alternative to, GAAP measures.
The tables below provide information about the estimated
financial impact of the network component of the existing U.S. Navy
NGEN Service Management, Integration, and Transport (SMIT)
contract, for which we are under contract through June 30, 2021, and which includes the potential
for three one-month options beyond that timeframe.
Revenue Excluding NGEN SMIT (Unaudited)
|
|
Fiscal Quarter
Ended
|
(in
millions)
|
|
January 1,
2021
|
|
December 31,
2019
|
Revenue
|
|
$
|
1,134
|
|
|
$
|
1,126
|
|
Less NGEN SMIT
impact
|
|
221
|
|
|
221
|
|
Revenue excluding
NGEN SMIT impact
|
|
$
|
913
|
|
|
$
|
905
|
|
Adjusted EBITDA, Net Income, and Diluted EPS
(Unaudited)
Adjusted EBITDA excludes the following items: interest, income
taxes, depreciation and amortization, restructuring, separation,
transaction and integration-related costs, mark-to-market
adjustments to the pension and other post-employment benefit
programs, stock-based compensation, and other non-recurring items.
There were no mark-to-market changes in either the current or
year-ago quarterly periods. Adjusted net income and adjusted
diluted EPS also exclude acquisition-related intangible
amortization.
|
|
|
Fiscal Quarter
Ended
|
(in millions, except
margin)
|
|
January 1,
2021
|
|
December 31,
2019
|
Net
income
|
|
$
|
31
|
|
|
$
|
53
|
|
Income tax
expense
|
|
14
|
|
|
22
|
|
Interest expense,
net
|
|
28
|
|
|
34
|
|
Depreciation and
amortization
|
|
93
|
|
|
92
|
|
EBITDA
|
|
166
|
|
|
201
|
|
Restructuring
costs
|
|
2
|
|
|
—
|
|
Separation,
transaction and integration-related costs
|
|
7
|
|
|
20
|
|
Share-based
compensation
|
|
10
|
|
|
6
|
|
Gain on sale of
assets
|
|
—
|
|
|
(33)
|
|
Other
|
|
(4)
|
|
|
1
|
|
Adjusted
EBITDA
|
|
181
|
|
|
195
|
|
Adjusted EBITDA
margin (a)
|
|
16.0
|
%
|
|
17.3
|
%
|
NGEN SMIT
EBITDA
|
|
34
|
|
|
29
|
|
Adjusted EBITDA,
excluding NGEN SMIT (b)
|
|
147
|
|
|
166
|
|
Adjusted EBITDA
margin, excluding NGEN SMIT (b)
|
|
16.1
|
%
|
|
18.3
|
%
|
Depreciation and
amortization
|
|
(93)
|
|
|
(92)
|
|
Amortization of
acquired intangibles
|
|
60
|
|
|
54
|
|
Interest expense,
net
|
|
(28)
|
|
|
(34)
|
|
Adjusted earnings
before taxes
|
|
120
|
|
|
123
|
|
Income tax expense
(c)
|
|
30
|
|
|
33
|
|
Adjusted net
income
|
|
90
|
|
|
90
|
|
Impact of NGEN
SMIT (d)
|
|
24
|
|
|
21
|
|
Adjusted net
income, excluding NGEN SMIT
|
|
$
|
66
|
|
|
$
|
69
|
|
|
Notes:
|
(a)
|
Adjusted EBITDA
margin is calculated as the ratio of adjusted EBITDA to revenue for
the fiscal quarters ended January 1, 2021 and December 31,
2019.
|
(b)
|
Adjusted EBITDA,
excluding NGEN SMIT is defined as revenue less cost of services,
selling, general and administrative and excludes certain operating
expenses managed at the corporate level. These unallocated costs
include certain corporate function costs, share-based compensation
expense, amortization of acquired intangible assets, impairment
charges, certain nonrecoverable restructuring costs, separation,
transaction and integration-relate costs, net periodic benefit cost
and gain or loss on sale of assets. Adjusted EBITDA margin,
excluding NGEN SMIT is calculated as the ratio of adjusted EBITDA,
excluding NGEN SMIT to revenue excluding NGEN SMIT for the fiscal
quarters ended January 1, 2021 and December 31, 2019.
|
(c)
|
Represents income tax
expense utilizing an adjusted effective tax rate that adjusts for
non-GAAP measures including: transaction costs, integration costs,
and tax add backs for non-deductible prior-merger goodwill
amortization. Adjusted effective tax rates were 25% for the fiscal
quarter ended January 1, 2021, and 27% for the fiscal quarter ended
December 31, 2019.
|
(d)
|
Impact of NGEN SMIT
is NGEN SMIT EBITDA less NGEN SMIT depreciation and income tax at
the adjusted effective tax rates of 25% for the fiscal quarter
ended January 1, 2021, and 27% for the fiscal quarter ended
December 31, 2019.
|
|
|
|
Fiscal Quarter
Ended
|
(in
dollars)
|
|
January 1,
2021
|
|
December 31,
2019
|
Diluted
EPS
|
|
$
|
0.19
|
|
|
$
|
0.33
|
|
Restructuring
costs
|
|
0.01
|
|
|
—
|
|
Separation,
transaction and integration-related costs
|
|
0.05
|
|
|
0.12
|
|
Share-based
compensation
|
|
0.06
|
|
|
0.04
|
|
Gain on sale of
assets
|
|
—
|
|
|
(0.20)
|
|
Amortization of
acquired intangibles
|
|
0.37
|
|
|
0.33
|
|
Other
|
|
(0.02)
|
|
|
—
|
|
Tax impact related to
non-GAAP adjustments
|
|
(0.10)
|
|
|
(0.07)
|
|
Adjusted diluted
EPS
|
|
0.56
|
|
|
0.55
|
|
Impact of NGEN
SMIT
|
|
(0.15)
|
|
|
(0.13)
|
|
Adjusted diluted
EPS, excluding NGEN SMIT
|
|
$
|
0.41
|
|
|
$
|
0.42
|
|
Diluted weighted
average common shares outstanding (in millions)
|
|
162.13
|
|
|
162.47
|
|
Free Cash Flow (Unaudited)
Perspecta defines free cash flow as net cash provided by
operating activities less (i) purchases of property, equipment and
software, (ii) payments on finance lease obligations, and (iii) the
impact arising from the initial sale of accounts receivables under
the Master Accounts Receivable Purchase Agreement.
|
|
|
Fiscal Quarter
Ended
|
(in
millions)
|
|
January 1,
2021
|
|
December 31,
2019
|
Net cash provided by
operating activities
|
|
$
|
117
|
|
|
$
|
120
|
|
Purchases of
property, equipment and software
|
|
(6)
|
|
|
(7)
|
|
Payments on finance
lease obligations
|
|
(18)
|
|
|
(33)
|
|
Initial sale of
qualifying receivables (a)
|
|
—
|
|
|
(17)
|
|
Free cash
flow
|
|
$
|
93
|
|
|
$
|
63
|
|
|
Notes:
|
(a)
|
Represents the impact
arising from the initial sale of accounts receivables under the
Master Accounts Receivable Purchase Agreement during the fiscal
quarter ended December 31, 2019.
|
The Company had $15 million and
$35 million of payments for
restructuring, separation, transaction and integration-related
costs for the fiscal quarters ended January
1, 2021 and December 31, 2019,
respectively.
Segment Operating Results (Unaudited)
Perspecta delivers IT, mission, and operations-related services
across the U.S. federal government through two reportable
segments—Defense and Intelligence, which provides services to the
U.S. Department of Defense (DoD), intelligence community, branches
of the U.S. Armed Forces, and other DoD agencies; and Civilian and
Health Care, which provides services to the Departments of Homeland
Security, Justice, and Health and Human Services, as well as other
federal civilian and state and local government agencies. The
following tables summarize reportable segment profit and
reconciliation of reportable segment profit to income before
taxes:
Selected Segment
Measures (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Quarter
Ended
|
|
|
January 1,
2021
|
|
December 31,
2019
|
(in millions, except
profit margin)
|
|
Defense and
Intelligence
|
|
Civilian and
Health Care
|
|
Total
|
|
Defense and
Intelligence
|
|
Civilian and
Health Care
|
|
Total
|
Revenue
|
|
$
|
795
|
|
|
$
|
339
|
|
|
$
|
1,134
|
|
|
$
|
813
|
|
|
$
|
313
|
|
|
$
|
1,126
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
profit
|
|
$
|
105
|
|
|
$
|
43
|
|
|
$
|
148
|
|
|
$
|
115
|
|
|
$
|
39
|
|
|
$
|
154
|
|
Non-GAAP adjustments
(a)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
1
|
|
|
3
|
|
Adjusted segment profit
(b)
|
|
$
|
105
|
|
|
$
|
43
|
|
|
$
|
148
|
|
|
$
|
117
|
|
|
$
|
40
|
|
|
$
|
157
|
|
Segment profit
margin
|
|
13.2
|
%
|
|
12.7
|
%
|
|
13.1
|
%
|
|
14.1
|
%
|
|
12.5
|
%
|
|
13.7
|
%
|
Adjusted segment profit
margin (b)
|
|
13.2
|
%
|
|
12.7
|
%
|
|
13.1
|
%
|
|
14.4
|
%
|
|
12.8
|
%
|
|
13.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes:
|
(a)
|
Non-GAAP adjustments
include non-operating net periodic pension benefit, and certain
separation-related and other costs. Each of the individual items
was immaterial for the fiscal quarters ended January 1, 2021 and
December 31, 2019.
|
(b)
|
Adjusted results
represent non-GAAP financial measures, and it should be considered
in addition to, but not as substitute for, the information provided
in accordance with GAAP.
|
Reconciliation of
Reportable Segment Profit to Income Before Taxes
(Unaudited)
|
|
|
|
|
|
|
|
Fiscal Quarter
Ended
|
(in
millions)
|
|
January 1,
2021
|
|
December 31,
2019
|
Total profit for
reportable segments
|
|
$
|
148
|
|
|
$
|
154
|
|
Not allocated to
segments:
|
|
|
|
|
Share-based
compensation
|
|
(10)
|
|
|
(6)
|
|
Amortization of
acquired intangible assets
|
|
(60)
|
|
|
(54)
|
|
Restructuring
costs
|
|
(2)
|
|
|
—
|
|
Separation, transaction
and integration-related costs
|
|
(7)
|
|
|
(20)
|
|
Interest expense,
net
|
|
(28)
|
|
|
(34)
|
|
Other income and
(expense), net
|
|
4
|
|
|
35
|
|
Income before
taxes
|
|
$
|
45
|
|
|
$
|
75
|
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/perspecta-announces-financial-results-for-third-quarter-of-fiscal-year-2021-301223288.html
SOURCE Perspecta Inc.