SAIC(US:SAIC)2024-06-03 20:21Financial Performance - Revenues for the three months ended May 3, 2024, were $1,847 million, a decrease of 8.9% compared to $2,028 million for the same period in 2023[9]. - Net income for the same period was $77 million, down 21.4% from $98 million in the prior year[9]. - Basic earnings per share decreased to $1.49 from $1.80, reflecting a decline of 17.2% year-over-year[9]. - The company reported a comprehensive income of $80 million for the three months ended May 3, 2024, compared to $92 million in the prior year[11]. - Operating income for the same period decreased by $26 million (17%) to $131 million, with an operating margin of 7.1% compared to 7.7% in the prior year[118]. - EBITDA for the three months ended May 3, 2024, was $167 million, down from $194 million, with EBITDA as a percentage of revenues decreasing to 9.0% from 9.6%[134][135]. - Adjusted EBITDA also decreased to $166 million, with adjusted EBITDA as a percentage of revenues at 9.0%, down from 9.3% in the prior year[134][135]. Revenue Sources - The Department of Defense contributed $976 million to total revenues for the three months ended May 3, 2024, down from $1,071 million in the prior year[54]. - The Defense and Intelligence segment generated revenues of $1,436 million, while the Civilian segment contributed $411 million for the same period[91]. - Revenues for the three months ended May 3, 2024, decreased by $181 million (9%) to $1,847 million compared to $2,028 million in the same period last year, primarily due to the sale of the Supply Chain Business[118]. - Revenues for the three months ended May 3, 2024, decreased by $20 million to $411 million, a 5% decline compared to $431 million in the same period last year[127]. Cash Flow and Assets - Cash and cash equivalents decreased to $49 million from $94 million at the end of the previous quarter[15]. - Net cash provided by operating activities increased to $98 million from $82 million in the same period last year[21]. - Cash flows provided by operating activities increased by $16 million (20%) to $98 million, driven by higher cash from the Master Accounts Receivable Purchase Agreement[123]. - Cash used in investing activities was $7 million, a significant decrease from cash provided of $336 million in the prior year, primarily due to the sale of the Supply Chain Business[149]. - Cash used in financing activities increased to $136 million, attributed to higher principal payments and share repurchases[150]. Business Operations and Strategy - The company completed a business reorganization effective February 3, 2024, transitioning to five customer-facing business groups[24]. - The Innovation Factory supports the company’s segments by developing enterprise-class solutions, focusing on AI, application development, and cloud services[27]. - The company anticipates that spending packages related to digital modernization and climate resiliency may provide additional growth opportunities[110]. - The company executed a definitive agreement to sell its logistics and supply chain management business for $350 million, with a refundable cash deposit of $355 million received[63][65]. Shareholder Actions - The company paid cash dividends of $0.37 per share, totaling $20 million during the quarter[21]. - A quarterly dividend of $0.37 per share was declared during the three months ended May 3, 2024[49]. - The Company has repurchased approximately 20.9 million shares under its repurchase plan as of May 3, 2024[48]. - The company repurchased a total of 612,428 shares of common stock during the three months ended May 3, 2024, at an average price of $131.77 per share[161]. - The company may repurchase shares on the open market based on various factors including market conditions and internal cash generation[160]. Tax and Compliance - The company's effective income tax rate decreased to 19.0% for the three months ended May 3, 2024, from 20.0% in the same period in 2023, primarily due to higher tax benefits[73]. - The effective income tax rate for the three months ended May 3, 2024, was 19.0%, down from 20.0% in the same period last year, primarily due to higher tax benefits from foreign-derived intangible income[120]. - The Company plans to adopt new accounting standards related to income tax disclosures and segment reporting in fiscal years 2026 and 2025, respectively[43][44]. Future Outlook - As of May 3, 2024, the company had approximately $5.4 billion in remaining performance obligations, with an expectation to recognize revenue on approximately 81% over the next 12 months[60]. - The U.S. government budget for fiscal year 2025 includes a 1% growth for both defense and non-defense budgets, which may impact future revenue opportunities[108]. - The company expects to fund ongoing working capital and commitments with cash on hand and future operating cash flows, supported by a $1.0 billion Revolving Credit Facility[144]. Risk and Compliance - The company is routinely subject to investigations and reviews related to compliance with various laws and regulations, as detailed in the fiscal 2024 Annual Report[158]. - No material changes were reported in risk factors compared to the most recent Annual Report on Form 10-K[159]. - Management evaluated the effectiveness of disclosure controls and procedures, concluding they were operating effectively as of May 3, 2024[154]. - There were no changes in internal control over financial reporting that materially affected the company during the quarterly period[155].