Booz Allen Hamilton
Booz Allen Hamilton Holding Corp (Form: 8-K, Received: 06/07/2011 07:25:53)
 
 
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): June 7, 2011
Booz Allen Hamilton Holding Corporation
(Exact name of registrant as specified in its charter)
         
Delaware   333-171288   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 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:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o 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 June 7, 2011, Booz Allen Hamilton Holding Corporation (the “Company”) issued a press release announcing its results of operations for the fiscal year and quarter ended March 31, 2011. A copy of the press release is attached hereto as Exhibit 99.1.
On June 7, 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 February 9, 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
 
 
June 7, 2011   By:    Samuel R. Strickland    
    Name:   Samuel R. Strickland    
    Title:   Executive Vice President, Chief Financial Officer
and Chief Administrative Officer
 
 
 

Exhibit 99.1
BOOZ ALLEN HAMILTON ANNOUNCES
FOURTH QUARTER AND FULL YEAR FISCAL 2011 RESULTS
Fourth quarter revenue increased 10.4 percent, to $1.49 billion with increased margins
Full year revenue increased 9.1 percent to $5.59 billion
Full year Adjusted EBITDA increased 20.7 percent, to $444 million
Full year Adjusted Diluted Earnings per Share increased by 41 cents, to $1.24 per share
Total backlog at fiscal year end increased 21.2 percent, to $10.9 billion
McLean, Virginia; June 7, 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 fourth quarter and full year of its fiscal 2011 with significant revenue and earnings growth over the prior year. Booz Allen also reported strong backlog of $10.9 billion as of March 31, 2011. Booz Allen’s fiscal year runs from April 1 to March 31, with the fourth quarter of fiscal 2011 ending March 31, 2011.
Revenue in the fourth quarter of fiscal 2011 was $1.49 billion, compared with $1.35 billion in the prior year period, an increase of 10.4 percent. In fiscal year 2011, revenue was $5.59 billion, compared with $5.12 billion in the prior year, an increase of 9.1 percent. During fiscal 2011, Booz Allen continued to grow revenue organically across all markets.
In the fourth quarter of fiscal 2011, net income increased to $18.1 million from $4.9 million in the prior year period and Adjusted Net Income increased to $50.5 million from $20.1 million in the prior year period. Diluted Earnings per Share (EPS) and Adjusted Diluted EPS in the fourth quarter of fiscal 2011 were $0.13 and $0.36, respectively, compared with $0.04 and $0.17 in the prior year period.
In fiscal 2011, net income increased to $84.7 million from $25.4 million in fiscal 2010 and Adjusted Net Income increased to $157.5 million from $97.0 million in fiscal 2010. Diluted EPS and Adjusted Diluted EPS in fiscal 2011 were $0.66 and $1.24, respectively, compared with $0.22 and $0.83 in fiscal 2010.
Ralph W. Shrader, Booz Allen’s Chairman, Chief Executive Officer, and President, said, “We grew revenue in all of our major markets — defense, intelligence, and civil — for the full fiscal year and the fourth quarter. Additionally, we saw profitability gains due in part to a larger percentage of higher-margin, fixed-price work. Our ability to grow even in a challenging and uncertain budget environment is testament to our unique

 


 

management consulting heritage, collaborative culture, and continued ability to deliver value and enduring results to our clients.”
“On a year-over-year basis, we grew our total backlog to $10.9 billion as of March 31, 2011, from $9.0 billion as of March 31, 2010. Client demand across our service offerings of strategy and organization, technology, analytics, and engineering and operations remains solid,” said Dr. Shrader.
“Our fastest growing current business areas are cyber and health, and we will have expanded access to commercial and international markets for all of our service offerings when the non-compete agreement with our spin off, Booz & Co., ends on July 31, 2011,” Dr. Shrader added. “We will focus our commercial expansion in areas that benefit from our core strengths in management consulting combined with technology and analytics expertise. We plan to serve clients in industries such as financial services, health care, and energy where we see strong intersections between the commercial and government sector.”
Financial Review
Fourth Quarter 2011 — Booz Allen’s 10.4 percent increase in revenue in the fourth quarter of fiscal 2011 over the prior year period was a 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 fourth quarter of fiscal 2011, operating income increased to $83.7 million from $48.6 million in the prior year period and Adjusted Operating Income increased to $101.9 million from $72.1 million in the prior year period. The increase in Adjusted Operating Income was primarily driven by higher revenue and increased profitability, which was positively affected by a continuing shift in Booz Allen’s contract mix toward fixed-price contracts.
In the fourth quarter of fiscal 2011, net income increased to $18.1 million from $4.9 million in the prior year period and Adjusted Net Income increased to $50.5 million from $20.1 million in the prior year period. Adjusted EBITDA increased 36.0 percent to $115.6 million in the fourth quarter of fiscal 2011 compared with $85.0 million in the prior year period. In the fourth quarter of fiscal 2011, diluted EPS increased to $0.13 per share from $0.04 per share in the prior year period, while Adjusted Diluted EPS increased to $0.36 per share from $0.17 per share in the prior year period.
Full Fiscal Year 2011 — Booz Allen’s 9.1 percent increase in revenue in fiscal 2011 over the prior year was a result of the deployment of additional consulting staff against funded backlog under existing contracts and funded backlog under new contracts in all markets despite funding delays by the U.S. federal government.

 


 

In fiscal 2011, operating income increased to $319.4 million from $199.6 million in fiscal 2010 and Adjusted Operating Income increased to $392.5 million from $313.2 million in fiscal 2010. The increase in Adjusted Operating Income was primarily driven by higher revenue and increased profitability, which was positively affected by a shift in Booz Allen’s contract mix toward more fixed-price contracts.
In fiscal 2011, net income increased to $84.7 million from $25.4 million in fiscal 2010 and Adjusted Net Income increased to $157.5 million from $97.0 million in fiscal 2010. Adjusted EBITDA increased 20.7 percent to $444.4 million in fiscal 2011 compared with $368.3 million in fiscal 2010, primarily as a result of the growth in Adjusted Operating Income. In fiscal 2011, diluted EPS increased to $0.66 per share from $0.22 per share in fiscal 2010. In fiscal 2011, Adjusted Diluted EPS increased to $1.24 per share from $0.83 per share in fiscal 2010, excluding the effects of an $0.08 per share benefit related to the reversal of tax reserves during the third quarter of fiscal 2011.
Net cash provided by operating activities in fiscal 2011 was $296.3 million compared to $270.5 million in fiscal 2010. Free Cash Flow was $207.6 million in fiscal 2011, compared to $221.2 million in fiscal 2010. Free Cash Flow in fiscal 2011 was impacted by both the $16.5 million cash effect of the pre-payment costs associated with early repayments of debt and the debt refinancing in February 2011, and additional property and equipment costs associated with Booz Allen’s facility strategy of realigning offices in the Washington DC metropolitan area.
Funded backlog as of March 31, 2011 was $2.39 billion, compared to $2.53 billion as of March 31, 2010. This was impacted by the repeated use of Continuing Resolutions to fund the government, and a threatened government shutdown, which was finally resolved on April 15, 2011 by the passage of a spending bill providing funding for the government through the end of the government’s fiscal 2011. Booz Allen’s priced options during fiscal 2011 have increased by more than $1.5 billion. A significant contributor to the increase in priced options was the signing of a 10-year cyber contract in the intelligence market.
Financial Outlook
Booz Allen currently forecasts revenue growth and margin improvements to continue, with top-line revenue in fiscal 2012 expected to be in the range of mid-single digits for the first half of the fiscal year, with higher growth rates expected in the second half of the year, similar to the pattern we experienced in our fiscal 2011. This is in line with the U.S. government’s historical timing on contract awards and funding patterns which have historically increased in September at the end of the government fiscal year, and reflects our current expectations for continued growth despite the generally challenging environment for government contractors.

 


 

In fiscal 2012, diluted EPS is expected to be in the range of $1.40 to $1.50 per share, not including any potential gain from the sale of the state and local transportation business, and Adjusted Diluted EPS is expected to be in the range of $1.55 to $1.65 per share, higher than previously forecast, with bottom-line performance expected to benefit from reduced interest expense and an attractive contract mix with more fixed-price work. As a result of the refinancing of our credit facilities and use of cash on hand in February 2011 to repay debt, we have less total debt outstanding at lower interest rates. We expect the resulting annual reduction in interest expense to positively affect net income in fiscal 2012 and beyond by approximately $38 million after tax, assuming no change in the interest rates on our outstanding indebtedness. The firm has reduced its total outstanding debt by $574.3 million to $994.3 million as of March 31, 2011.
These EPS estimates are based on fiscal year 2012 estimated average diluted shares outstanding of 143,000,000 shares.
Conference Call Information
Booz Allen will host a conference call at 8:00 a.m. EDT on Tuesday, June 7, 2011, to discuss the financial results for its fourth quarter and full year of fiscal 2011. Analysts and institutional investors may participate on the call by dialing 888-679-8035 (international 617-213-4848) and entering passcode 35009362. 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 11:00 a.m. EST on June 7, 2011, and continuing until July 7, 2011. The replay will also be available by telephone at 888-286-8010 (international 617-801-6888) with the passcode 99562654.
About Booz Allen Hamilton
Booz Allen Hamilton is a leading provider of management and technology consulting services primarily to the U.S. government in the defense, intelligence, and civil markets. Booz Allen Hamilton is headquartered in McLean, Virginia, employs more than 25,000 people, and had revenue of more than $5.5 billion in its latest fiscal year.
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) 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, including fees associated with debt prepayments (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 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 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 the explanatory footnotes regarding those adjustments, and (ii) use Adjusted Operating Income, Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS, and Free Cash Flow in addition to, and not as an alternative to Operating Income, Net Income or Diluted EPS as a measure of operating results or Net Cash Provided by Operating Activities as

 


 

a measure of liquidity, each as defined under GAAP. Exhibit 5 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 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 General Services Administration schedules or our position as prime contractor on Government-wide Acquisition Contracts; 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 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, including the prospectus, dated November 16, 2010, relating to the Company’s initial public offering.
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:
  Consolidated Statements of Operations
Exhibit 2:
  Consolidated Balance Sheets
Exhibit 3:
  Consolidated Statements of Cash Flows
Exhibit 4:
  Basic and Diluted Earnings Per Share Calculations
Exhibit 5:
  Non-GAAP Financial Information
Exhibit 6:
  Operating Data

 


 

Exhibit 1
Booz Allen Hamilton Holding Corporation
Consolidated Statements of Operations
                                 
    Three Months     Three Months     Fiscal Year     Fiscal Year  
    Ended     Ended     Ended     Ended  
    March 31,     March 31,     March 31,     March 31,  
(Amounts in thousands, except per share data)   2011     2010     2011     2010  
    (Unaudited)     (Unaudited)                  
Revenue
  $ 1,492,977     $ 1,352,564     $ 5,591,296     $ 5,122,633  
Operating costs and expenses:
                               
Cost of revenue
    742,723       688,800       2,836,955       2,654,143  
Billable expenses
    389,265       358,837       1,473,266       1,361,229  
General and administrative expenses
    256,495       233,284       881,028       811,944  
Depreciation and amortization
    20,835       23,090       80,603       95,763  
 
                       
Total operating costs and expenses
    1,409,318       1,304,011       5,271,852       4,923,079  
 
                       
Operating income
    83,659       48,553       319,444       199,554  
Interest expense
    (18,177 )     (39,945 )     (131,892 )     (150,734 )
Other, net
    (33,722 )     456       (59,488 )     174  
 
                       
Income before income taxes
    31,760       9,064       128,064       48,994  
Income tax expense
    13,690       4,174       43,370       23,575  
 
                       
Net income
  $ 18,070     $ 4,890     $ 84,694     $ 25,419  
 
                       
Earnings per common share:
                               
Basic
  $ 0.14     $ 0.05     $ 0.74     $ 0.24  
 
                       
Diluted
  $ 0.13     $ 0.04     $ 0.66     $ 0.22  
 
                       
Dividends declared per share
  $     $     $     $ 5.73  
 
                       

 


 

Exhibit 2
Booz Allen Hamilton Holding Corporation
Consolidated Balance Sheets
                 
    March 31,  
(Amounts in thousands, except share and per share data)   2011     2010  
ASSETS
               
Current assets:
               
Cash and cash equivalents
  $ 192,631     $ 307,835  
Accounts receivable, net of allowance
    1,111,004       1,018,311  
Prepaid expenses
    38,703       32,546  
Other current assets
    23,311       11,476  
 
           
Total current assets
    1,365,649       1,370,168  
Property and equipment, net
    173,430       136,648  
Intangible assets, net
    240,238       268,880  
Goodwill
    1,163,549       1,163,129  
Other long-term assets
    81,157       123,398  
 
           
Total assets
  $ 3,024,023     $ 3,062,223  
 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
Current liabilities:
               
Current portion of long-term debt
  $ 30,000     $ 21,850  
Accounts payable and other accrued expenses
    406,310       354,097  
Accrued compensation and benefits
    396,996       385,145  
Other current liabilities
    32,829       24,828  
 
           
Total current liabilities
    866,135       785,920  
Long-term debt, net of current portion
    964,328       1,546,782  
Income tax reserve
    90,474       100,178  
Other long-term liabilities
    195,836       119,760  
 
           
Total liabilities
    2,116,773       2,552,640  
Stockholders’ equity:
               
Common stock, Class A — $0.01 par value — authorized, 600,000,000 shares; issued and outstanding, 122,784,835 shares at March 31, 2011 and 102,922,900 shares at March 31, 2010
    1,227       1,029  
Non-voting common stock, Class B — $0.01 par value — authorized, 16,000,000 shares; issued and outstanding, 3,053,130 shares at March 31, 2011 and 2,350,200 shares at March 31, 2010
    31       24  
Restricted common stock, Class C — $0.01 par value — authorized, 5,000,000 shares; issued and outstanding, 2,028,270 shares at March 31, 2011 and 2010
    20       20  
Special voting common stock, Class E — $0.003 par value — authorized, 25,000,000 shares; issued and outstanding, 12,348,860 shares at March 31, 2011 and 13,345,880 shares at March 31, 2010
    37       40  
Additional paid-in capital
    840,058       525,652  
Retained earnings (Accumulated deficit)
    71,330       (13,364 )
Accumulated other comprehensive loss
    (5,453 )     (3,818 )
 
           
Total stockholders’ equity
    907,250       509,583  
 
           
Total liabilities and stockholders’ equity
  $ 3,024,023     $ 3,062,223  
 
           

 


 

Exhibit 3
Booz Allen Hamilton Holding Corporation
Consolidated Statements of Cash Flows
                 
    Fiscal Year     Fiscal Year  
    Ended     Ended  
    March 31,     March 31,  
(Amounts in thousands)   2011     2010  
Cash flow from operating activities
               
Net income
  $ 84,694     $ 25,419  
Adjustments to reconcile net income to net cash provided by operating activities:
               
Depreciation and amortization
    80,603       95,763  
Amortization of debt issuance costs
    6,925       5,700  
Amortization of original issuance discount on debt
    2,640       2,505  
Non-cash expense of debt repayments
    43,177        
Excess tax benefits from the exercise of stock options
    (15,974 )     (1,915 )
Stock-based compensation expense
    48,678       71,897  
Loss on disposition of property and equipment
    41        
Deferred income taxes
    42,763       19,837  
Changes in assets and liabilities:
               
Accounts receivable, net
    (92,693 )     (92,386 )
Income taxes receivable / payable
    2,907       (14,429 )
Prepaid expenses
    (6,157 )     150  
Other current assets
    (12,941 )     15,672  
Other long-term assets
    (1,627 )     (3,742 )
Accrued compensation and benefits
    9,804       33,760  
Accounts payable and accrued expenses
    52,214       110,265  
Accrued interest
    8,451       (10,633 )
Income tax reserve
    (10,163 )     2,483  
Deferred revenue
    612       (8,190 )
Postretirement obligations
    5,898       6,139  
Other long-term liabilities
    46,487       12,189  
 
           
Net cash provided by operating activities
    296,339       270,484  
 
           
Cash flow from investing activities
               
Purchases of property and equipment
    (88,784 )     (49,271 )
Escrow payment
    1,384       38,280  
 
           
Net cash used in investing activities
    (87,400 )     (10,991 )
 
           
Cash flow from financing activities
               
Net proceeds from issuance of common stock
    251,135        
Cash dividends paid
          (612,401 )
Repayment of debt
    (1,637,850 )     (16,100 )
Net proceeds from debt
    1,041,808       330,692  
Payment of deferred payment obligation
          (78,000 )
Excess tax benefits from the exercise of stock options
    15,974       1,915  
Stock option exercises
    4,790       1,334  
 
           
Net cash used in financing activities
    (324,143 )     (372,560 )
 
           
Net decrease in cash and cash equivalents
    (115,204 )     (113,067 )
Cash and cash equivalents — beginning of period
    307,835       420,902  
 
           
Cash and cash equivalents — end of period
  $ 192,631     $ 307,835  
 
           
 
               
Supplemental disclosures of cash flow information
               
Cash paid during the period for:
               
Interest
  $ 109,895     $ 126,744  
 
           
Income taxes, net
  $ 7,715     $ 5,474  
 
           

 


 

Exhibit 4
Booz Allen Hamilton Holding Corporation
Basic and Diluted Earnings Per Share Calculations
                                 
    Three Months     Three Months     Fiscal Year     Fiscal Year  
    Ended     Ended     Ended     Ended  
    March 31,     March 31,     March 31,     March 31,  
(Amounts in thousands, except share and per share data)   2011   2010       2011   2010  
    (Unaudited)     (Unaudited)                  
Net earnings for basic and diluted computations
  $ 18,070     $ 4,890     $ 84,694     $ 25,419  
Adjusted earnings for basic and diluted computations
  $ 50,539     $ 20,106     $ 157,511     $ 97,001  
Total basic weighted-average common shares outstanding
    127,860,654       107,257,583       114,478,947       106,477,650  
Weighted-average number of diluted shares outstanding
    140,718,057       119,643,501       127,448,700       116,228,380  
Earnings per common share
                               
Basic
  $ 0.14     $ 0.05     $ 0.74     $ 0.24  
 
                       
Diluted
  $ 0.13     $ 0.04     $ 0.66     $ 0.22  
 
                       
Adjusted earnings per common share
                               
Basic
  $ 0.40     $ 0.19     $ 1.38     $ 0.91  
 
                       
Diluted
  $ 0.36     $ 0.17     $ 1.24     $ 0.83  
 
                       

 


 

Exhibit 5
Booz Allen Hamilton Holding Corporation
Non-GAAP Financial Information
                                 
    Three Months     Three Months     Fiscal Year     Fiscal Year  
    Ended     Ended     Ended     Ended  
    March 31,     March 31,     March 31,     March 31,  
(Amounts in thousands, except share and per share data)   2011     2010     2011     2010  
    (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)  
Adjusted Operating Income
                               
Operating Income
  $ 83,659     $ 48,553     $ 319,444     $ 199,554  
Certain stock-based compensation expense (a)
    6,816       13,345       39,947       68,517  
Purchase accounting adjustments (b)
                      1,074  
Amortization of intangible assets (c)
    7,161       10,161       28,641       40,597  
Transaction expenses (d)
    4,313             4,448       3,415  
 
                       
Adjusted Operating Income
  $ 101,949     $ 72,059     $ 392,480     $ 313,157  
 
                       
 
                               
EBITDA & Adjusted EBITDA
                               
Net income
  $ 18,070     $ 4,890     $ 84,694     $ 25,419  
Income tax expense
    13,690       4,174       43,370       23,575  
Interest and other, net
    51,899       39,489       191,380       150,560  
Depreciation and amortization
    20,835       23,090       80,603       95,763  
 
                       
EBITDA
    104,494       71,643       400,047       295,317  
Certain stock-based compensation expense (a)
    6,816       13,345       39,947       68,517  
Transaction expenses (d)
    4,313             4,448       3,415  
Purchase accounting adjustments (b)
                      1,074  
 
                       
Adjusted EBITDA
  $ 115,623     $ 84,988     $ 444,442     $ 368,323  
 
                       
 
                               
Adjusted Net Income
                               
Net income
  $ 18,070     $ 4,890     $ 84,694     $ 25,419  
Certain stock-based compensation expense (a)
    6,816       13,345       39,947       68,517  
Transaction expenses (e)
    10,975             20,948       3,415  
Purchase accounting adjustments (b)
                      1,074  
Amortization of intangible assets (c)
    7,161       10,161       28,641       40,597  
Amortization or write-off of debt issuance costs and write-off of original issue discount
    29,163       1,854       50,102       5,700  
Release of FIN 48 reserves (f)
                (10,966 )      
Adjustments for tax effect (g)
    (21,646 )     (10,144 )     (55,855 )     (47,721 )
 
                       
Adjusted Net Income
  $ 50,539     $ 20,106     $ 157,511     $ 97,001  
 
                       
 
                               
Adjusted Diluted Earnings Per Share
                               
Weighted-average number of diluted shares outstanding
    140,718,057       119,643,501       127,448,700       116,228,380  
 
                       
Adjusted Net Income Per Diluted Share
  $ 0.36     $ 0.17     $ 1.24     $ 0.83  
 
                       
 
                               
Free Cash Flow
                               
Net cash provided by operating activities
  $ 15,534     $ 51,084     $ 296,339     $ 270,484  
Less: Purchases of property and equipment
    (27,351 )     (14,405 )     (88,784 )     (49,271 )
 
                       
Free Cash Flow
  $ (11,817 )   $ 36,679     $ 207,555     $ 221,213  
 
                       
 
(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 Officer’s 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 the connection with the acquisition.
 
(b)   Reflects adjustments resulting from the application of purchase accounting in connection with the acquisition not otherwise included in depreciation and amortization.
 
(c)   Reflects amortization of intangible assets resulting from the acquisition.
 
(d)   Three months ended March 31, 2011 reflects costs related to the modification of our credit facilities in connection with the Refinancing Transaction. Fiscal 2011 reflects debt refinancing costs incurred in connection with the Refinancing Transaction and certain external administrative and other expenses incurred in connection with the initial public offering. Fiscal 2010 reflects costs related to the modification of our credit facilities, the establishment of the Tranche C term loan facility under our senior secured credit facilities and the related payment of special dividends.
 
(e)   Three months ended March 31, 2011 reflects costs related to the modification of our credit facilities and prepayment fees associated with early repayments on the mezzanine term loan and credit facilities in connection with the Refinancing Transaction. Fiscal 2011 reflects debt refinancing costs and prepayment fees incurred in connection with the Refinancing Transaction, as well as certain external administrative and other expenses incurred in connection with the initial public offering. Fiscal 2010 reflects costs related to the modification of our credit facilities, the establishment of the Tranche C term loan facility under our senior secured credit facilities and the related payment of special dividends.
 
(f)   Reflects the release of uncertain tax reserves, net of tax.
 
(g)   Reflects tax adjustments at an assumed marginal tax rate of 40%.

 


 

Exhibit 6
Booz Allen Hamilton Holding Corporation
Operating Data
                 
    As of     As of  
    March 31,     March 31,  
(Amounts in millions)   2011     2010  
Backlog
               
Funded
  $ 2,392     $ 2,528  
Unfunded (1)
    2,979       2,453  
Priced Options (2)
    5,553       4,032  
Total Backlog
  $ 10,924     $ 9,013  
 
(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     As of  
    March 31,     March 31,  
    2011     2010  
Headcount
               
Total Headcount
    25,024       23,315  
Consulting Staff Headcount
    22,586       21,078  
                                 
    Three Months     Three Months     Fiscal Year     Fiscal Year  
    Ended     Ended     Ended     Ended  
    March 31,     March 31,     March 31,     March 31,  
    2011     2010     2011     2010  
Percentage of Total Revenue by Contract Type
                               
Cost-Reimbursable (3)
    52 %     49 %     51 %     50 %
Time-and-Materials
    32 %     37 %     35 %     38 %
Fixed-Price (4)
    16 %     14 %     14 %     12 %
 
(3)   Includes both cost-plus-fixed-fee and cost-plus-award fee contracts.
 
(4)   Includes fixed-price level of effort contracts.
                 
    Three Months     Three Months  
    Ended     Ended  
    March 31,     March 31,  
    2011     2010  
Days Sales Outstanding *
    68       69  
 
*   Calculated as total accounts receivable divided by revenue per day during the relevant fiscal quarter.

 

Exhibit 99.2
Booz Allen Hamilton Fourth Quarter and Full Year Fiscal 2011 June 7, 2011


 

2 Today's Agenda Curt Riggle Director, Investor Relations Introduction Ralph Shrader Chairman, Chief Executive Officer and President Management Overview Sam Strickland Executive Vice President and Chief Financial Officer Financial Overview Questions and Answers


 

3 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, including the prospectus, dated November 16, 2010, relating to the Company's initial public offering. 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 the explanatory footnotes regarding those adjustments, and (ii) use Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS and Free Cash Flow in addition to, and not as an alternative to operating income or net income as a measure of operating results or Net Cash Provided by 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 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 2011 Business Highlights Revenue growth across all major markets Significant margin gains Significant growth in Total Backlog Successful IPO Refinancing of debt at lower interest rates Ongoing recognition as a "Best Company to Work For" Successful matrix model, collaborative culture, and single P&L Potential for growth in a challenging and uncertain market 4


 

5 Key Financial Highlights Preliminary Fourth Quarter Fiscal 2011 Results


 

6 Key Financial Highlights Preliminary Full Year Fiscal 2011 Results


 

Value Drivers History of organic growth during times of change Margin expansion Commercial/International non-compete expiration Continued scale up in critical Cyber capabilities 7


 

Outlook 8 Revenue growth forecast: Mid-single digits in H1 Higher Growth in H2 Diluted EPS forecast: $1.40 - $1.50 Adjusted Diluted EPS forecast: $1.55 - $1.65 Fiscal 2012 Outlook


 

9 Financial Appendix


 

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 (Unaudited and in thousands, except per share data) Three Months Ended March 31, Three Months Ended March 31, Fiscal Year Ended March 31, Fiscal Year Ended March 31, 2011 2010 2011 2010 Adjusted Operating Income Operating Income $83,659 $48,553 $319,444 $199,554 Certain stock-based compensation expense (a) 6,816 13,345 39,947 68,517 Purchase accounting adjustments (b) - - - 1,074 Amortization of intangible assets (c) 7,161 10,161 28,641 40,597 Transaction expenses (d) 4,313 - 4,448 3,415 Adjusted Operating Income $101,949 $72,059 $392,480 $313,157 EBITDA & Adjusted EBITDA Net income $18,070 $4,890 $84,694 $25,419 Income tax expense 13,690 4,174 43,370 23,575 Interest and other, net 51,899 39,489 191,380 150,560 Depreciation and amortization 20,835 23,090 80,603 95,763 EBITDA 104,494 71,643 400,047 295,317 Certain stock-based compensation expense (a) 6,816 13,345 39,947 68,517 Transaction expenses (d) 4,313 - 4,448 3,415 Purchase accounting adjustments (b) - - - 1,074 Adjusted EBITDA $115,623 $84,988 $444,442 $368,323 Adjusted Net Income Net income $18,070 $4,890 $84,694 $25,419 Certain stock-based compensation expense (a) 6,816 13,345 39,947 68,517 Transaction expenses (e) 10,975 - 20,948 3,415 Purchase accounting adjustments (b) - - - 1,074 Amortization of intangible assets (c) 7,161 10,161 28,641 40,597 Amortization or write-off of debt issuance costs and write-off of OID 29,163 1,854 50,102 5,700 Release of FIN 48 reserves (f) - - (10,966) - Adjustments for tax effect (g) (21,646) (10,144) (55,855) (47,721) Adjusted Net Income $50,539 $20,106 $157,511 $97,001 Adjusted Diluted Earnings Per Share Weighted-average number of diluted shares outstanding 140,718,057 119,643,501 127,448,700 116,228,380 Adjusted Net Income per diluted share $0.36 $0.17 $1.24 $0.83 Free Cash Flow Net cash provided by operating activities $15,534 $51,084 $296,339 $270,484 Less: Purchases of property and equipment (27,351) (14,405) (88,784) (49,271) Free Cash Flow $(11,817) $36,679 $207,555 $221,213 11 (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 Officer's 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 the connection with the acquisition. (b) Reflects adjustments resulting from the application of purchase accounting in connection with the acquisition not otherwise included in depreciation and amortization. (c) Reflects amortization of intangible assets resulting from the acquisition. (d) Three months ended March 31, 2011 reflects costs related to the modification of our credit facilities in connection with the Refinancing Transaction. Fiscal 2011 reflects debt refinancing costs incurred in connection with the Refinancing Transaction and certain external administrative and other expenses incurred in connection with the initial public offering. Fiscal 2010 reflects costs related to the modification of our credit facilities, the establishment of the Tranche C term loan facility under our senior secured credit facilities and the related payment of special dividends. (e) Three months ended March 31, 2011 reflects costs related to the modification of our credit facilities and prepayment fees associated with early repayments on the mezzanine term loan and credit facilities in connection with the Refinancing Transaction. Fiscal 2011 reflects debt refinancing costs and prepayment fees incurred in connection with the Refinancing Transaction, as well as certain external administrative and other expenses incurred in connection with the initial public offering. Fiscal 2010 reflects costs related to the modification of our credit facilities, the establishment of the Tranche C term loan facility under our senior secured credit facilities and the related payment of special dividends. (f) Reflects the release of uncertain tax reserves, net of tax. (g) Reflects tax adjustments at an assumed marginal tax rate of 40%.