Booz Allen Hamilton
Booz Allen Hamilton Holding Corp (Form: 8-K, Received: 11/03/2011)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): November 3, 2011

 

 

Booz Allen Hamilton Holding Corporation

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   001-34972   26-2634160
(State or other jurisdiction   (Commission   (I.R.S. Employer
of incorporation)   File Number)   Identification No.)

8283 Greensboro Drive,

McLean, Virginia

    22102
(Address of principal executive offices)     (Zip Code)

Registrant’s telephone number, including area code: (703) 902-5000

Not Applicable

Former name or former address, if changed since a last report

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Item 2.02 Results of Operations and Financial Condition.

On November 3, 2011, Booz Allen Hamilton Holding Corporation (the “Company”) issued a press release announcing its results of operations for the quarter ended September 30, 2011. A copy of the press release is attached hereto as Exhibit 99.1.

On November 3, 2011, the Company posted to the “Investor Relations” section of its website slides that accompany the earnings conference call. A copy of the slides are attached hereto as Exhibit 99.2.

 

Item 9.01 Financial Statements and Exhibits.

 

99.1    Press Release dated November 3, 2011
99.2    Slides for the Earnings Conference Call


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    Booz Allen Hamilton Holding Corporation
November 3, 2011     By:   / S /    S AMUEL R. S TRICKLAND        
    Name:   Samuel R. Strickland
    Title:   Executive Vice President, Chief Financial Officer and Chief Administrative Officer

Exhibit 99.1

BOOZ ALLEN HAMILTON ANNOUNCES

SECOND QUARTER FISCAL 2012 RESULTS

Revenue increased 4.5 percent, to $1.43 billion

Adjusted EBITDA increased by 13 percent, to $114.5 million

Adjusted Diluted Earnings per Share increased by 44 percent, to 36 cents per share

Total backlog increased 16.4 percent, to a record $12.86 billion

McLean, Virginia; November 3, 2011 – Booz Allen Hamilton Holding Corporation (NYSE:BAH), the parent company of management and technology consulting firm Booz Allen Hamilton Inc., today announced preliminary results for the second quarter of its fiscal 2012 with solid growth over the comparable prior year period. Booz Allen also reported backlog at a record level of $12.86 billion as of September 30, 2011. Booz Allen’s fiscal year runs from April 1 to March 31, with the second quarter of fiscal 2012 ending September 30, 2011.

Revenue in the second quarter of fiscal 2012 was $1.43 billion, compared with $1.37 billion in the prior year period, an increase of 4.5 percent. Booz Allen continued to grow revenue organically across all major markets.

Net income increased to $75.3 million from $14.8 million in the prior year period and Adjusted Net Income increased to $50.6 million from $30.1 million in the prior year period. Diluted Earnings per Share (EPS) and Adjusted Diluted EPS in the second quarter of fiscal 2012 were $0.53 and $0.36, respectively, compared with $0.12 and $0.25 in the prior year period.

Ralph W. Shrader, Booz Allen’s Chairman, Chief Executive Officer, and President, said, “We continued to grow revenue across our federal government business, which serves our civil, defense, and intelligence markets, during the second quarter of fiscal 2012 despite challenging conditions in those markets. Our record backlog of $12.86 billion – and our position supporting key programs related to government efficiency, cyber, and health – give us confidence for the future. Booz Allen’s portfolio, already well-situated in these growth areas of the federal market, is becoming more diverse as we continue to implement our strategic expansion in commercial and international markets that began with the expiration of our non-compete agreement on July 31, 2011.

“Booz Allen is different from its competitors in many ways. Our focus is helping clients succeed in their core mission and in improving enterprise effectiveness and efficiency which is so important in lean budget environments. Our single P&L structure and collaborative culture make us agile and able to move leaders and resources to growth markets. From a capital management standpoint, Booz Allen has a strong cash position that gives us stability and flexibility in how we operate our business and create value for shareholders.” Shrader said.


Financial Review

Second Quarter 2012 — Booz Allen’s 4.5 percent increase in revenue in the second quarter of fiscal 2012 over the prior year period was primarily the result of the deployment of additional consulting staff against funded backlog under existing contracts and funded backlog under new contracts in all markets, and a related increase in billable expenses.

In the second quarter of fiscal 2012, operating income increased to $93.7 million from $71.9 million in the prior year period and Adjusted Operating Income increased to $100.0 million compared to $88.9 million in the prior year period. The improvement in operating income was driven by the continued growth in revenue, increased profitability resulting from decreases in incentive and stock-based compensation costs, lower amortization of intangible assets, a shift in contract mix to more fixed-price contracts, as well as improved profitability on subcontractor arrangements. The profitability increases were partially offset by a significant investment in business development costs leading up to the end of the government’s fiscal year (September 30) as well as unbillable staff compensation cost incurred in advance of demand.

Adjusted EBITDA increased 13.0 percent to $114.5 million in the second quarter of fiscal 2012 compared with $101.3 million in the prior year period, for the reasons cited above which drove the corresponding increase in operating income.

Net income increased to $75.3 million from $14.8 million in the prior year period and Adjusted Net Income increased to $50.6 million from $30.1 million in the prior year period. The increase in net income was driven by the increase in operating income, as well as a decrease in interest costs, the gain from the sale of the state and local transportation business in July 2011, and the release of certain income tax reserves. In the second quarter of fiscal 2012, diluted EPS increased to $0.53 per share from $0.12 per share in the prior year period, while Adjusted Diluted EPS increased to $0.36 per share from $0.25 per share in the prior year period.

Free Cash Flow was $97.2 million in the second quarter of fiscal 2012, compared to $138.1 million in the prior year period. The primary driver of this change was higher federal taxes paid this year principally due to the anticipation that taxable income will exceed the maximum annual available tax benefits from net operating losses that had previously been carried forward. Booz Allen continued to generate cash through strong receivables collections as evidenced by an average Days Sales Outstanding (DSO) for the second quarter of fiscal 2012 of 68 days.


Total backlog as of September 30, 2011 was $12.86 billion, compared with $11.05 billion as of September 30, 2010, an increase of 16.4 percent. Funded backlog was $3.44 billion as of September 30, 2011, compared to $3.12 billion as of September 30, 2010. Unfunded backlog increased to $3.35 billion as of September 30, 2011 compared with $2.85 billion as of September 30, 2010. Priced options under existing contracts in the second quarter of fiscal 2012 increased by nearly 20 percent compared to the prior year period.

Second Half 2012 – Booz Allen’s cumulative performance for the first and second quarters of fiscal 2012, driven by the same factors discussed above, has resulted in revenue of $2.88 billion for the six months ended September 30, 2011 compared to $2.71 billion for the prior year period, an increase of 6.2 percent. Net income for the first half of fiscal 2012 was $126.5 million compared to $43.0 million for the prior year period, and Adjusted Net Income for the first half of fiscal 2012 was $108.6 million compared to $71.8 million. Adjusted EBITDA for the first half of fiscal 2012 was $237.4 million compared to $222.9 million in the prior year period. Diluted EPS for the first half of fiscal 2012 was $0.90 per share and Adjusted Diluted EPS was $0.77 per share, compared with $0.35 and $0.59 per share, respectively, for the first six months of fiscal 2011.

Net cash provided by operating activities increased to $177.1 million for the first half of fiscal 2012 from $170.9 million in the first half of fiscal 2011, while Free Cash Flow increased to $133.5 million compared to $131.9 million for the comparable period. As discussed above, Free Cash Flow was affected by an increase in tax payments of approximately $47.4 million in the six months ended September 30, 2011 compared to the prior year. As a result of the refinancing of our credit facilities in February 2011 which resulted in a reduction in outstanding debt and lower interest rates, Booz Allen realized a reduction in interest expense of $54.7 million in the six months ended September 30, 2011 compared to the prior year period.

Financial Outlook

Booz Allen continues to forecast revenue growth and margin improvements, with higher growth rates expected overall for the second half of the year including a ramp up expected into the fourth quarter as we deploy staff against recent contract awards. This also reflects our current expectations for continued growth despite the challenging federal budget environment. Funding patterns have generally shifted later into the fiscal year as a result of the repeated use of Continuing Resolutions to fund government contracting in the first half of the year.

We are increasing our diluted EPS guidance, which is now expected to be in the range of $1.56 to $1.66 per share, and we are re-affirming our guidance for Adjusted Diluted EPS, which is expected to be in the range of $1.55 to $1.65 per share. The increase to the diluted EPS forecast reflects the gain from the sale of our state and local transportation business in July 2011 and the release of certain income tax reserves; these non-recurring items are excluded from our calculation of Adjusted Diluted EPS. Overall, our EPS outlook reflects expectations that bottom-line performance will continue to benefit from reduced interest expense and an improvement in operating margins.


These EPS estimates are based on fiscal year 2012 estimated average diluted shares outstanding of approximately 140.6 million shares.

Conference Call Information

Booz Allen will host a conference call at 10:30 a.m. EDT on Thursday, November 3, 2011, to discuss the financial results for its second quarter of fiscal 2012. Analysts and institutional investors may participate on the call by dialing 800-299-0148 (international 617-801-9711) and entering passcode 88480760. The conference call will be webcast simultaneously to the public through a link on the investor relations section of the Booz Allen Hamilton web site at www.boozallen.com . A replay of the conference call will be available online at www.boozallen.com beginning at 1:30 p.m. EDT on November 3, 2011, and continuing until December 3, 2011. The replay will also be available by telephone at 888-286-8010 (international 617-801-6888) with the passcode 11500549.

About Booz Allen Hamilton

Booz Allen Hamilton is a leading provider of management and technology consulting services to the U.S. government in defense, intelligence, and civil markets, and to major corporations, institutions, and not-for-profit organizations. Booz Allen is headquartered in McLean, Virginia, employs more than 25,000 people, and had revenue of $5.59 billion for the fiscal year ended March 31, 2011 (NYSE: BAH).

CONTACT: Media Relations — Marie Lerch 703-902-5559; James Fisher 703-377-7595 Investor Relations – Curt Riggle 703-377-5332.

Non-GAAP Financial Information

“Adjusted Operating Income” represents Operating Income before (i) certain stock option-based and other equity-based compensation expenses, (ii) adjustments related to the amortization of intangible assets, and (iii) any extraordinary, unusual, or non-recurring items. Booz Allen prepares Adjusted Operating Income to eliminate the impact of items it does not consider indicative of ongoing operating performance due to their inherent unusual, extraordinary or non-recurring nature or because they result from an event of a similar nature.

“Adjusted EBITDA” represents net income before income taxes, net interest and other expense and depreciation and amortization and before certain other items, including: (i) certain stock option-based and other equity-based compensation expenses, (ii) transaction costs, fees, losses, and expenses, including fees associated with debt prepayments, and (iii) any extraordinary, unusual or non-recurring items. Booz Allen prepares Adjusted EBITDA to eliminate the impact of items it does not consider indicative of ongoing operating performance due to their inherent unusual, extraordinary or non-recurring nature or because they result from an event of a similar nature.


“Adjusted Net Income” represents net income before: (i) certain stock option-based and other equity-based compensation expenses, (ii) transaction costs, fees, losses, and expenses, including fees associated with debt prepayments, (iii) adjustments related to the amortization of intangible assets, (iv) amortization or write-off of debt issuance costs and write-off of original issue discount and (v) any extraordinary, unusual or non-recurring items, in each case net of the tax effect calculated using an assumed effective tax rate. Booz Allen prepares Adjusted Net Income to eliminate the impact of items, net of tax, it does not consider indicative of ongoing operating performance due to their inherent unusual, extraordinary or non-recurring nature or because they result from an event of a similar nature.

“Adjusted Diluted EPS” represents diluted EPS calculated using Adjusted Net Income as opposed to Net Income.

“Free Cash Flow” represents the net cash generated from operating activities less the impact of purchases of property and equipment.

Booz Allen utilizes and discusses in this release Adjusted Operating Income, Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted EPS because management uses these measures for business planning purposes. Management views Adjusted Operating Income, Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted EPS as measures of the core operating business, which exclude the impact of the items detailed in the supplemental exhibits, as these items are generally not operational in nature. These supplemental performance measures also provide another basis for comparing period to period results by excluding potential differences caused by non-operational and unusual or non-recurring items. Booz Allen also utilizes and discusses Free Cash Flow in this release because management uses this measure for business planning purposes, measuring the cash generating ability of the operating business and measuring liquidity generally. Booz Allen presents these supplemental measures because it believes that these measures provide investors and securities analysts with important supplemental information with which to evaluate Booz Allen’s performance, long term earnings potential, or liquidity, as applicable, and to enable them to assess Booz Allen’s performance on the same basis as management. These supplemental performance measurements may vary from and may not be comparable to similarly titled measures by other companies in Booz Allen’s industry. Adjusted Operating Income, Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS, and Free Cash Flow are not recognized measurements under GAAP and when analyzing Booz Allen’s performance or liquidity, as applicable, investors should (i) evaluate each adjustment in our reconciliation of Operating and Net Income to Adjusted Operating Income, Adjusted EBITDA and Adjusted Net Income, and cash flows to Free Cash Flows and the explanatory footnotes regarding those adjustments, (ii) use Adjusted Operating Income, Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted EPS in addition to, and not as an alternative to Operating Income, Net Income or Diluted EPS as a measure of operating results, each as defined under GAAP, and (iii) use Free Cash Flows, in addition to, and not as an alternative to, Net Cash Provided by Operating Activities as a measure of liquidity, each as defined under GAAP. Exhibit 6 includes a reconciliation of Adjusted Operating Income, Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS, and Free Cash Flow to the most directly comparable financial measure calculated and presented in accordance with GAAP.

No reconciliation of the forecasted range for Adjusted Diluted EPS to Diluted EPS for fiscal 2012 is included in this release because we are unable to quantify certain amounts that would be required to be included in the GAAP measure without unreasonable efforts and we believe such reconciliations would imply a degree of precision that would be confusing or misleading to investors.


Forward Looking Statements

Certain statements contained in this press release and in related comments by our management include “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include information concerning Booz Allen’s preliminary financial results, financial outlook and guidance, including forecasted revenue, Diluted EPS, and Adjusted Diluted EPS, as well as any other statement that does not directly relate to any historical or current fact. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “could,” “should,” “forecasts,” “expects,” “intends,” “plans,” “anticipates,” “projects,” “outlook,” “believes,” “estimates,” “predicts,” “potential,” “continue,” “preliminary,” or the negative of these terms or other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we can give you no assurance these expectations will prove to have been correct.

These forward-looking statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

These risks and other factors include: cost cutting and efficiency initiatives and other efforts to reduce U.S. government spending, which could reduce or delay funding for orders for services especially in the current political environment; delayed funding of our contracts due to delays in the completion of the U.S. government’s budgeting process and the use of continuing resolutions by the U.S. government to fund its operations or related changes in the pattern or timing of government funding and spending; any issue that compromises our relationships with the U.S. government or damages our professional reputation; changes in U.S. government spending and mission priorities that shift expenditures away from agencies or programs that we support; the size of our addressable markets and the amount of U.S. government spending on private contractors; failure to comply with numerous laws and regulations; our ability to compete effectively in the competitive bidding process and delays caused by competitors’ protests of major contract awards received by us; the loss of General Services Administration Multiple Award Schedule Contracts, or GSA schedules, or our position as prime contractor on Government-wide acquisition contract vehicles; changes in the mix of our contracts and our ability to accurately estimate or otherwise recover expenses, time and resources for our contracts; our ability to generate revenue under certain of our contracts; our ability to realize the full value of our backlog and the timing of our receipt of revenue under contracts included in backlog; changes in estimates used in recognizing revenue; any inability to attract, train or retain employees with the requisite skills, experience and security clearances; an inability to hire, assimilate and deploy enough employees to serve our clients under existing contracts; an inability to effectively and timely utilize our employees and professionals; failure by us or our employees to obtain and maintain necessary security clearances; the loss of members of senior management or failure to develop new leaders; misconduct or other improper activities from our employees or subcontractors; increased competition from other companies in our industry; failure to maintain strong relationships with other contractors; inherent uncertainties and potential adverse developments in legal proceedings, including litigation, audits, reviews and investigations, which may result in materially adverse judgments, settlements or other unfavorable outcomes; internal system or service failures and security breaches, including, but not limited to, those resulting from external cyber attacks on our network and internal systems; risks related to our indebtedness and credit facilities which contain financial and operating covenants; the adoption by the U.S. government of new laws, rules and regulations, such as those relating to organizational conflicts of interest issues; an inability to utilize existing or future tax benefits, including those related to our Net Operating Losses and stock-based compensation expense, for any reason, including a change in law; and variable purchasing patterns under U.S. government GSA schedules, blanket purchase agreements and Indefinite Delivery/Indefinite Quantity contracts. Additional information concerning these and other factors can be found in our filings with the Securities and Exchange Commission (SEC), including our Annual Report on Form 10K, filed with the SEC on June 8, 2011.


All forward-looking statements attributable to the company or persons acting on the company’s behalf are expressly qualified in their entirety by the foregoing cautionary statements. All such statements speak only as of the date made and, except as required by law, the company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.


Exhibits:  

 

Exhibit 1:    Condensed Consolidated Statements of Operations
Exhibit 2:    Condensed Consolidated Statements of Comprehensive Income
Exhibit 3:    Condensed Consolidated Balance Sheets
Exhibit 4:    Condensed Consolidated Statements of Cash Flows
Exhibit 5:    Basic and Diluted Earnings Per Share Calculations
Exhibit 6:     Non-GAAP Financial Information
Exhibit 7:    Operating Data


Exhibit 1

Booz Allen Hamilton Holding Corporation

Condensed Consolidated Statements of Operations

 

     Three Months Ended
September 30,
    Six Months Ended
September 30,
 
(Amounts in thousands, except per share data)    2011     2010     2011     2010  
     (Unaudited)     (Unaudited)  

Revenue

   $ 1,429,044      $ 1,367,214      $ 2,875,880      $ 2,709,143   

Operating costs and expenses:

        

Cost of revenue

     715,642        698,563        1,442,473        1,375,658   

Billable expenses

     380,911        359,243        773,101        715,529   

General and administrative expenses

     220,290        217,911        432,125        418,330   

Depreciation and amortization

     18,536        19,588        36,394        38,972   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating costs and expenses

     1,335,379        1,295,305        2,684,093        2,548,489   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     93,665        71,909        191,787        160,654   

Interest expense

     (12,194     (38,830     (24,488     (79,183

Other, net

     4,051        (6,803     3,609        (7,110
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     85,522        26,276        170,908        74,361   

Income tax expense

     10,190        11,459        44,440        31,375   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 75,332      $ 14,817      $ 126,468      $ 42,986   
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per common share:

        

Basic

   $ 0.58      $ 0.14      $ 0.98      $ 0.40   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 0.53      $ 0.12      $ 0.90      $ 0.35   
  

 

 

   

 

 

   

 

 

   

 

 

 


Exhibit 2

Booz Allen Hamilton Holding Corporation

Condensed Consolidated Statements of Comprehensive Income

 

     Three Months Ended
September 30,
     Six Months Ended
September 30,
 
(Amounts in thousands)    2011      2010      2011      2010  
     (Unaudited)      (Unaudited)  

Net income

   $ 75,332       $ 14,817       $ 126,468       $ 42,986   

Actuarial gain related to employee benefits, net of taxes

     108         82         215         164   
  

 

 

    

 

 

    

 

 

    

 

 

 

Comprehensive income

   $ 75,440       $ 14,899       $ 126,683       $ 43,150   
  

 

 

    

 

 

    

 

 

    

 

 

 


Exhibit 3

Booz Allen Hamilton Holding Corporation

Condensed Consolidated Balance Sheets

 

     September 30,     March 31,  
(Amounts in thousands, except share and per share data)    2011     2011  
     (Unaudited)        

ASSETS

    

Current assets:

    

Cash and cash equivalents

   $ 356,220      $ 192,631   

Accounts receivable, net of allowance

     1,031,545        1,111,004   

Prepaid expenses and other current assets

     83,645        62,014   
  

 

 

   

 

 

 

Total current assets

     1,471,410        1,365,649   

Property and equipment (less accumulated depreciation of $165.0 million and $138.1 million at September 30, 2011 and March 31, 2011, respectively)

     188,789        173,430   

Intangible assets, net

     232,016        240,238   

Goodwill

     1,177,031        1,163,549   

Other long-term assets

     66,923        81,157   
  

 

 

   

 

 

 

Total assets

   $ 3,136,169      $ 3,024,023   
  

 

 

   

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

    

Current liabilities:

    

Current portion of long-term debt

   $ 36,250      $ 30,000   

Accounts payable and other accrued expenses

     425,972        406,310   

Accrued compensation and benefits

     343,961        396,996   

Other current liabilities

     25,427        32,829   
  

 

 

   

 

 

 

Total current liabilities

     831,610        866,135   

Long-term debt, net of current portion

     943,628        964,328   

Income tax reserve

     66,255        90,474   

Other long-term liabilities

     223,898        195,836   
  

 

 

   

 

 

 

Total liabilities

     2,065,391        2,116,773   

Stockholders’ equity:

    

Common stock, Class A — $0.01 par value — authorized, 600,000,000 shares; issued, 127,807,003 shares at September 30, 2011 and 122,784,835 shares at March 31, 2011; outstanding, 127,473,228 shares at September 30, 2011 and 122,784,835 shares at March 31, 2011

     1,278        1,227   

Non-voting common stock, Class B — $0.01 par value — authorized, 16,000,000 shares; issued and outstanding, 2,801,180 shares at September 30, 2011 and 3,053,130 shares at March 31, 2011

     28        31   

Restricted common stock, Class C — $0.01 par value — authorized, 5,000,000 shares; issued and outstanding, 1,706,670 shares at September 30, 2011 and 2,028,270 shares at March 31, 2011

     17        20   

Special voting common stock, Class E — $0.003 par value — authorized, 25,000,000 shares; issued and outstanding, 10,140,067 shares at September 30, 2011 and 12,348,860 shares at March 31, 2011

     30        37   

Treasury stock, at cost — 333,775 shares at September 30, 2011 and 0 shares at March 31, 2011

     (5,377     —     

Additional paid-in capital

     882,242        840,058   

Retained earnings

     197,798        71,330   

Accumulated other comprehensive loss

     (5,238     (5,453
  

 

 

   

 

 

 

Total stockholders’ equity

     1,070,778        907,250   
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 3,136,169      $ 3,024,023   
  

 

 

   

 

 

 


Exhibit 4

Booz Allen Hamilton Holding Corporation

Condensed Consolidated Statements of Cash Flows

 

     Six Months Ended
September 30,
 
(Amounts in thousands)    2011     2010  
     (Unaudited)  

Cash flow from operating activities

    

Net income

   $ 126,468      $ 42,986   

Adjustments to reconcile net income to net cash provided by operating activities:

    

Gain on sale of state and local transportation business

     (4,082     —     

Transaction costs on sale of state and local transportation business

     (5,432     —     

Depreciation and amortization

     36,394        38,972   

Amortization of debt issuance costs

     2,400        7,186   

Amortization of original issuance discount on debt

     550        2,224   

Excess tax benefits from the exercise of stock options

     (15,960     (15,779

Stock-based compensation expense

     18,448        27,295   

Loss on disposition of property and equipment

     10        —     

Changes in assets and liabilities:

    

Accounts receivable, net

     71,045        45,769   

Prepaid expenses and other current assets

     (6,674     (20,874

Other long-term assets

     11,847        19,939   

Accrued compensation and benefits

     (49,198     (25,565

Accounts payable and other accrued expenses

     21,135        11,398   

Accrued interest

     4,694        4,146   

Income tax reserve

     (24,219     680   

Other current liabilities

     (6,412     (629

Other long-term liabilities

     (3,897     33,137   
  

 

 

   

 

 

 

Net cash provided by operating activities

     177,117        170,885   

Cash flow from investing activities

    

Purchases of property and equipment

     (43,640     (38,957

Escrow payments

     —          1,384   

Proceeds from sale of state and local transportation business

     23,332        —     
  

 

 

   

 

 

 

Net cash used in investing activities

     (20,308     (37,573

Cash flow from financing activities

    

Net proceeds from issuance of common stock

     4,695        1,002   

Repayment of debt

     (15,000     (95,925

Excess tax benefits from the exercise of stock options

     15,960        15,779   

Stock option exercises

     6,502        4,523   

Repurchases of common stock

     (5,377     —     
  

 

 

   

 

 

 

Net cash provided by (used in) financing activities

     6,780        (74,621

Net increase in cash and cash equivalents

     163,589        58,691   

Cash and cash equivalents — beginning of period

     192,631        307,835   
  

 

 

   

 

 

 

Cash and cash equivalents — end of period

   $ 356,220      $ 366,526   
  

 

 

   

 

 

 

Supplemental disclosures of cash flow information

    

Cash paid during the period for:

    

Interest

   $ 17,085      $ 69,639   
  

 

 

   

 

 

 

Income taxes, net

   $ 50,072      $ 2,717   
  

 

 

   

 

 

 


Exhibit 5

Booz Allen Hamilton Holding Corporation

Basic and Diluted Earnings Per Share Calculations

 

     Three Months Ended
September 30,
     Six Months Ended
September 30,
 
(Amounts in thousands, except share and per share data)    2011      2010      2011      2010  
     (Unaudited)      (Unaudited)  

Earnings for basic and diluted computations

   $ 75,332       $ 14,817       $ 126,468       $ 42,986   

Adjusted earnings for basic and diluted computations

   $ 50,610       $ 30,147       $ 108,591       $ 71,808   

Total weighted-average common shares outstanding for basic computations

     130,456,979         109,411,287         129,226,001         108,432,351   

Average number of common shares outstanding for diluted computations

     141,259,964         122,509,408         140,600,986         121,737,842   

Earnings per common share

           

Basic

   $ 0.58       $ 0.14       $ 0.98       $ 0.40   
  

 

 

    

 

 

    

 

 

    

 

 

 

Diluted

   $ 0.53       $ 0.12       $ 0.90       $ 0.35   
  

 

 

    

 

 

    

 

 

    

 

 

 

Adjusted earnings per common share

           

Basic

   $ 0.39       $ 0.28       $ 0.84       $ 0.66   
  

 

 

    

 

 

    

 

 

    

 

 

 

Diluted

   $ 0.36       $ 0.25       $ 0.77       $ 0.59   
  

 

 

    

 

 

    

 

 

    

 

 

 


Exhibit 6

Booz Allen Hamilton Holding Corporation

Non-GAAP Financial Information

 

     Three Months Ended
September 30,
    Six Months Ended
September 30,
 
(Amounts in thousands, except share and per share data)    2011     2010     2011     2010  
     (Unaudited)     (Unaudited)  

Adjusted Operating Income

        

Operating Income

   $ 93,665      $ 71,909      $ 191,787      $ 160,654   

Certain stock-based compensation expense (a)

     2,274        9,771        9,171        23,115   

Amortization of intangible assets (b)

     4,091        7,161        8,182        14,319   

Transaction expenses (c)

     —          63        —          135   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted Operating Income

   $ 100,030      $ 88,904      $ 209,140      $ 198,223   
  

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA & Adjusted EBITDA

        

Net income

   $ 75,332      $ 14,817      $ 126,468      $ 42,986   

Income tax expense

     10,190        11,459        44,440        31,375   

Interest and other, net

     8,143        45,633        20,879        86,293   

Depreciation and amortization

     18,536        19,588        36,394        38,972   
  

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA

     112,201        91,497        228,181        199,626   

Certain stock-based compensation expense (a)

     2,274        9,771        9,171        23,115   

Transaction expenses (c)

     —          63        —          135   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 114,475      $ 101,331      $ 237,352      $ 222,876   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted Net Income

        

Net income

   $ 75,332      $ 14,817      $ 126,468      $ 42,986   

Certain stock-based compensation expense (a)

     2,274        9,771        9,171        23,115   

Transaction expenses (c)

     —          2,613        —          2,685   

Amortization of intangible assets (b)

     4,091        7,161        8,182        14,319   

Amortization or write-off of debt issuance costs and write-off of original issue discount

     1,206        6,005        2,400        7,918   

Net gain on sale of state and local transportation business (d)

     (5,681     —          (5,681     —     

Release of income tax reserves (e)

     (23,584     —          (24,048     —     

Adjustments for tax effect (f)

     (3,028     (10,220     (7,901     (19,215
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted Net Income

   $ 50,610      $ 30,147      $ 108,591      $ 71,808   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted Diluted Earnings Per Share

        

Weighted-average number of diluted shares outstanding

     141,259,964        122,509,408        140,600,986        121,737,842   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted Net Income Per Diluted Share

   $ 0.36      $ 0.25      $ 0.77      $ 0.59   
  

 

 

   

 

 

   

 

 

   

 

 

 

Free Cash Flow

        

Net cash provided by operating activities

   $ 123,273      $ 160,874      $ 177,117      $ 170,885   

Less: Purchases of property and equipment

     (26,039     (22,744     (43,640     (38,957
  

 

 

   

 

 

   

 

 

   

 

 

 

Free Cash Flow

   $ 97,234      $ 138,130      $ 133,477      $ 131,928   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(a) Reflects stock-based compensation expense for options for Class A Common Stock and restricted shares, in each case, issued in connection with the acquisition described in our Annual Report under the Officers’ Rollover Stock Plan that was established in connection with the acquisition. Also reflects stock-based compensation expense for Equity Incentive Plan Class A Common Stock options issued in connection with the acquisition under the Equity Incentive Plan that was established in connection with the acquisition of our Company by The Carlyle Group described in our Annual Report, which we refer to in this Quarterly Report as the acquisition.
(b) Reflects amortization of intangible assets resulting from the acquisition described in our Annual Report.
(c) Three and six months ended September 30, 2010 reflects certain external administrative and other expenses incurred in connection with the initial public offering.
(d) Three and six months ended September 30, 2011 reflects the gain on sale of our state and local transportation business, net of the associated tax benefit of $1.6 million.
(e) Three and six months ended September 30, 2011 reflects the release of income tax reserves, net of taxes.
(f) Reflects tax effect of adjustments at an assumed marginal tax rate of 40%.


Exhibit 7

Booz Allen Hamilton Holding Corporation

Operating Data

 

     As of
September 30,
 
(Amounts in millions)    2011      2010  

Backlog

     

Funded

   $ 3,438       $ 3,123   

Unfunded (1)

     3,349         2,848   

Priced Options (2)

     6,068         5,076   
  

 

 

    

 

 

 

Total Backlog

   $ 12,855       $ 11,047   
  

 

 

    

 

 

 

 

(1) Incorporates a reduction, estimated by management, to the revenue value of orders for services under two existing single award ID/IQ contracts, based on an established pattern of funding under these contracts by the U.S. government.
(2) Amounts shown reflect 100% of the undiscounted revenue value of all priced options.

 

     As of
September 30,
 
     2011      2010  

Headcount

     

Total Headcount

     25,804         25,075   

Consulting Staff Headcount

     23,278         22,769   

 

     Three Months Ended
September 30,
    Six Months Ended
September 30,
 
     2011     2010     2011     2010  

Percentage of Total Revenue by Contract Type

        

Cost-Reimbursable (3)

     54     51     54     51

Time-and-Materials

     31     36     31     36

Fixed-Price (4)

     15     13     15     13

 

(3) Includes both cost-plus-fixed-fee and cost-plus-award fee contracts.
(4) Includes fixed-price level of effort contracts.

 

     Three  Months
Ended
September 30,
2011
     Three Months
Ended
March 31,
2011
 

Days Sales Outstanding *

     68         68   

 

* Calculated as total accounts receivable divided by revenue per day during the relevant fiscal quarter.
Booz Allen Hamilton
Second Quarter Fiscal 2012
Booz Allen Hamilton
Second Quarter Fiscal 2012
November 3, 2011
November 3, 2011
Exhibit 99.2


2
Today’s Agenda
Today’s Agenda


3
Disclaimers
Disclaimers
Forward Looking Safe Harbor Statement
The
following
information
includes
“forward-looking
statements”
within
the
meaning
of
the
Private
Securities
Litigation
Reform
Act
of
1995.
Examples
of
forward-looking
statements
include
information
concerning
Booz
Allen’s
preliminary
financial
results,
financial
outlook
and
guidance,
including
projected
Revenue,
Diluted
EPS,
and
Adjusted
Diluted
EPS,
as
well
as
any
other
statement
that
does
not
directly
relate
to
any
historical
or
current
fact.
In
some
cases,
you
can
identify
forward-looking  statements
by
terminology  such
as
“may,”
“will,”
“could,”
“should,”
“forecasts,”
“expects,”
“intends,”
“plans,”
“anticipates,”
“projects,”
“outlook,”
“believes,”
“estimates,”
“predicts,”
“potential,”
“continue,”
“preliminary,”
or the negative of these terms or other comparable terminology.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we can give you no assurance these expectations will prove to have been correct. These
forward-looking statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels
of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
These risks and other factors include: cost cutting initiatives and other efforts to reduce U.S. government spending, which could reduce or delay funding for orders for services especially in the
current political environment; delayed funding of our contracts due to delays in the completion of the U.S. government’s budgeting process and the use of continuing resolutions or related changes
in the pattern or timing of government funding and spending; any
issue that compromises our relationships with the U.S. government or damages our professional reputation; changes in U.S.
government spending and mission priorities that shift expenditures away from agencies or programs that we support; the size of our addressable markets and the amount of U.S. government
spending
on
private
contractors;
failure
to
comply
with
numerous
laws
and
regulations;
our
ability
to
compete
effectively
in
the
competitive
bidding
process
and
delays
caused
by
competitors’
protests of major contract awards received by us; the loss of GSA schedules or our position as prime contractor on GWACs; changes in the mix of our contracts and our ability to accurately estimate
or
otherwise
recover
expenses,
time
and
resources
for
our
contracts;
our
ability
to
generate
revenue
under
certain
of
our
contracts;
our
ability
to
realize
the
full
value
of
our
backlog
and
the
timing 
of
our
receipt
of
revenue
under
contracts
included
in
backlog;
changes
in
estimates
used
in
recognizing
revenue;
any
inability
to
attract,
train
or
retain
employees  with
the requisite skills, experience
and security clearances; an inability to hire, assimilate and deploy enough employees to serve our clients under existing contracts; an inability to effectively and timely utilize our employees and
professionals; failure by us or our employees to obtain and maintain necessary security clearances; the loss of members of senior management or failure to develop new
leaders;
misconduct
or
other
improper
activities
from
our
employees
or
subcontractors;
increased
competition
from
other
companies
in
our
industry;
failure
to
maintain
strong
relationships
with
other
contractors; inherent uncertainties and potential adverse developments in legal proceedings, including litigation, audits, reviews and investigations, which may result in materially adverse judgments,
settlements or other unfavorable outcomes; internal system or service failures and security breaches; risks related to our indebtedness and credit facilities which contain financial and operating
covenants; the adoption by the U.S. government of new laws, rules and regulations, such as those relating to organizational conflicts of interest issues; an inability to
utilize
existing
or
future
tax
benefits,
including
those
related
to
our
NOLs
and
stock-based
compensation
expense,
for
any
reason,
including
a
change
in
law;
and
variable
purchasing
patterns
under
U.S.
government
GSA
schedules,
blanket
purchase
agreements  and
ID/IQ  contracts.
Additional
information
concerning
these
and
other
factors
can
be
found
in
our
filings
with
the Securities
and Exchange Commission (SEC), including our Annual Report on Form 10K, filed with the SEC on June 8, 2011.  All forward-looking statements attributable to the company or
persons
acting
on
the
company’s
behalf
are
expressly
qualified
in
their
entirety
by
the
foregoing
cautionary
statements.
All
such
statements
speak
only
as
of
the
date
made
and,
except
as required
by law, the company undertakes no obligation to update or revise
publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
Note to Non-GAAP Financial Data Information
Booz Allen discloses in the following information Adjusted Operating Income, Adjusted EBITDA, Adjusted Net Income,  Adjusted Diluted EPS, and Free Cash Flow which are not recognized
measurements under GAAP, and when analyzing Booz Allen’s performance or liquidity as applicable, investors should (i) evaluate each adjustment in our reconciliation of Operating and Net Income
to Adjusted Operating Income, Adjusted EBITDA and Adjusted Net Income, and cash flow to free cash flow, and the explanatory footnotes regarding those adjustments, and (ii) use
Adjusted
EBITDA,
Adjusted
Net
Income,
Adjusted
Operating
Income,
and
Adjusted
Diluted
EPS
in
addition
to,
and
not
as
an
alternative
to
operating
income,
net
income
or
Diluted
EPS
as
a
measure of operating results with cash flow in addition to and not as an alternative to net cash generated from operating activities as a measure of liquidity, each as defined under GAAP.  The
Financial Appendix includes a reconciliation of Adjusted Operating Income, Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS, and Free Cash Flow to the most directly comparable
financial
measure
calculated
and
presented
in
accordance
with
GAAP.
Booz
Allen
presents
these
supplemental
performance
measures
because
it
believes
that
these
measures
provide investors
and securities analysts with important supplemental information with which to evaluate Booz Allen’s performance, long term earnings potential, or liquidity, as applicable and to enable them to
assess Booz Allen’s performance on the same basis as management. These supplemental performance and liquidity measurements may vary from and may not be comparable to similarly titled
measures by other companies in Booz Allen’s industry.


Fiscal Year 2012 Business Highlights
Fiscal Year 2012 Business Highlights
Growth in revenue and profitability in a challenging environment
Focused strategy for Commercial and International markets
Record high total backlog
Dynamic operating model to realign resources to growth markets
Helping clients succeed in their core missions during lean times
Ongoing recognition as a “Best Company to Work For”
4


5
Key Financial Highlights
Key Financial Highlights


6
Key Financial Highlights
Key Financial Highlights
Preliminary First Half 2012 Results


Value Drivers
Value Drivers
History of organic growth
Pursuit of quality growth in areas aligned to our client’s core missions
Margin expansion and a commitment to long term performance
Truly differentiated capabilities which span markets
Industry-leading talent and compelling approach to cybersecurity
Alignment of leadership talent and investment to growth markets
7


Outlook
Outlook
8


9
Financial Appendix
Financial Appendix


Booz Allen Hamilton Holding Corporation
Non-GAAP Financial Information
Booz Allen Hamilton Holding Corporation
Non-GAAP Financial Information
10
“Adjusted Operating Income”
represents Operating Income before (i) certain stock option-based and other equity-based
compensation expenses, (ii) the impact of the application of purchase accounting, (iii) adjustments related to the
amortization of intangible assets and (iv) any extraordinary, unusual or non-recurring items.  Booz Allen prepares
Adjusted Operating Income to eliminate the impact of items it does not consider indicative of ongoing operating
performance due to their inherent unusual, extraordinary or non-recurring nature or because they result from an event of
a similar nature.
“Adjusted EBITDA”
represents net income before income taxes, net interest and other expense and depreciation and
amortization and before certain other items, including: (i) certain stock option-based and other equity-based
compensation
expenses,
(ii)
transaction
costs,
fees,
losses,
and
expenses,
(iii)
the
impact
of
the
application
of
purchase
accounting and (iv) any extraordinary, unusual or non-recurring items. Booz Allen prepares Adjusted EBITDA to
eliminate
the
impact
of
items
it
does
not
consider
indicative
of
ongoing
operating
performance
due
to
their
inherent
unusual, extraordinary or non-recurring nature or because they result from an event of a similar nature.
“Adjusted Net Income”
represents net income before: (i) certain stock option-based and other equity-based
compensation
expenses,
(ii)
transaction
costs,
fees,
losses,
and
expenses,
including
fees
associated
with
debt
prepayments, (iii) the impact of the application of purchase accounting, (iv) adjustments related to the amortization of
intangible assets, (v) amortization or write-off of debt issuance costs and write-off of original issue discount, or OID, and
(vi) any extraordinary, unusual or non-recurring items, in each case net of the tax effect calculated using an assumed
effective tax rate. Booz Allen prepares Adjusted Net Income to eliminate the impact of items, net of tax, it does not
consider indicative of ongoing operating performance due to their inherent unusual, extraordinary or non-recurring nature
or because they result from an event of a similar nature.
“Adjusted Diluted EPS”
represents Diluted EPS calculated using Adjusted Net Income as opposed to Net Income.
“Free
Cash
Flow”
represents
the
net
cash
generated
from
operating
activities
less
the
impact
of
purchases
of
property
and equipment.


Booz Allen Hamilton Holding Corporation
Non-GAAP Financial Information
Booz Allen Hamilton Holding Corporation
Non-GAAP Financial Information
11
(Unaudited and in thousands, except per share data)
Three Months Ended
September 30,
Six Months Ended
September 30,
2011
2010
2011
2010
Adjusted Operating Income
Operating Income
$93,665
$71,909
$191,787
$160,654
Certain stock-based compensation expense (a)
2,274
9,771
9,171
23,115
Amortization of intangible assets (b)
4,091
7,161
8,182
14,319
Transaction expenses (c)
-
63
-
135
Adjusted Operating Income
$100,030
$88,904
$209,140
$198,223
EBITDA & Adjusted EBITDA
Net income
$75,332
$14,817
$126,468
$42,986
Income tax expense
10,190
11,459
44,440
31,375
Interest and other, net
8,143
45,633
20,879
86,293
Depreciation and amortization
18,536
19,588
36,394
38,972
EBITDA
112,201
91,497
228,181
199,626
Certain stock-based compensation expense (a)
2,274
9,771
9,171
23,115
Transaction expenses (c)
-
63
-
135
Adjusted EBITDA
$114,475
$101,331
$237,352
$222,876
Adjusted Net Income
Net income
$75,332
$14,817
$126,468
$42,986
Certain stock-based compensation expense (a)
2,274
9,771
9,171
23,115
Transaction expenses (c)
-
2,613
-
2,685
Amortization of intangible assets (b)
4,091
7,161
8,182
14,319
Amortization or write-off of debt issuance
costs and write-off of original issue discount
1,206
6,005
2,400
7,918
Net gain on sale of state and local transportation business (d)
(5,681)
-
(5,681)
-
Release of income tax reserves (e)
(23,584)
-
(24,048)
-
Adjustments for tax effect (f)
(3,028)
(10,220)
(7,901)
(19,215)
Adjusted Net Income
$50,610
$30,147
$108,591
$71,808
Adjusted Diluted Earnings Per Share
Weighted-average number of diluted shares outstanding
141,259,964
122,509,408
140,600,986
121,737,842
Adjusted Net Income per diluted share
$0.36
$0.25
$0.77
$0.59
Free Cash Flow
Net cash provided by operating activities
$123,273
$160,874
$177,117
$170,885
Less: Purchases of property and equipment
(26,039)
(22,744)
(43,640)
(38,957)
Free Cash Flow
$97,234
$138,130
$133,477
$131,928
(a) Reflects stock-based compensation expense
for options for Class A Common Stock and
restricted shares, in each case, issued in
connection with the acquisition under the Officers’
Rollover Stock Plan that was established in
connection
with
the
acquisition.
Also
reflects
stock-based compensation expense for Equity
Incentive Plan Class A Common Stock options
issued in connection with the acquisition  under
the Equity Incentive Plan that was established in
connection with the acquisition.
(b) Reflects amortization of intangible assets
resulting from the acquisition.
(c) Three and six months ended September 30,
2010 reflects certain external administrative and
other expenses incurred in connection with the
initial public offering.
(d) Three and six months ended September 30,
2011 reflects the gain on sale of our state and
local transportation business, net of the
associated tax benefit of $1.6 million.
(e) Three and six months ended September 30,
2011 reflects the release of income tax reserves,
net of taxes.
(f) Reflects tax effect of adjustments at an
assumed marginal tax rate of 40%.