Science Applications International Corporation (SAIC) has announced results for the first quarter ended May 1, 2020, the company reported on Friday.
“SAIC continues to operate as an essential business in a resilient market through the COVID-19 pandemic. Our focused response prioritizes our employees' safety and well-being, ensuring on-going, high-quality customer performance, and protecting shareholder interests," said SAIC CEO, Nazzic Keene and 2020 Wash100 Award recipient.
SAIC has estimated the first quarter impact from the COVID-19 pandemic to be approximately $33 million of revenue, $8 million of adjusted EBITDA and an immaterial net impact to free cash flow.
These impacts were primarily driven by SAIC employees and subcontractors unable to access facilities to perform on customer contracts and uncertain profit recovery on ready-state labor. Since the onset of the COVID-19 pandemic, SAIC has operated as an essential business, continuing to operate in a resilient market and business model.
SAIC’s revenues for the quarter increased $142 million compared to the prior year quarter due to the acquisition of Unisys Federal, revenue on new contracts primarily supporting the U.S. Air Force and intelligence community, and increased volume on existing programs, partially offset by the impacts of the COVID-19 pandemic.
The company’s operating income as a percentage of revenues of 4.4 percent, decreased from 5.8 percent in the comparable prior year period, due to higher acquisition and integration costs and the impacts of COVID-19, partially offset by the acquisition of Unisys Federal.
SAIC’s net income attributable to common stockholders for the quarter decreased $19 million as compared to the same period in the prior year primarily due to decreased operating income and higher interest expense.
Adjusted EBITDA as a percentage of revenues for the quarter decreased to 7.8 percent of revenues from 8.4 percent of revenues in the prior year quarter driven by the impacts of COVID-19 and lower current quarter net profit write-ups, partially offset by the acquisition of Unisys Federal.
Diluted earnings per share for the quarter was $0.62 compared to $0.92 in the prior year quarter. Adjusted diluted earnings per share for the quarter was $1.38 compared to $1.36 in the prior year quarter. The weighted-average diluted shares outstanding during the quarter decreased to 58.5 million from 60.0 million during the prior year quarter, primarily due to shares directly repurchased from a private equity holder in the second quarter of fiscal year 2020, as well as plan share repurchases in fiscal year 2020.
SAIC’s cash flows provided by operating activities for the first quarter were $367 million, an increase of $189 million compared to the same period in the prior year. The improvement is primarily due to $200 million of sales of receivables under the Master Accounts Receivable Purchase Agreement (MARPA) and cash provided from operating activities of Unisys Federal.
During the quarter, SAIC deployed $39 million of capital, consisting of $23 million in cash dividends and $16 million of mandatory debt repayment. There were no plan share repurchases or voluntary debt repayments in the first quarter.
The company's Board of Directors declared a cash dividend of $0.37 per share of the Company's common stock payable on July 31, 2020 to stockholders of record on July 17, 2020. SAIC intends to continue paying dividends on a quarterly basis, although the declaration of any future dividends will be determined by the Board of Directors each quarter and will depend on earnings, financial condition, capital requirements and other factors.
“Our strong first quarter results demonstrate the resiliency of our market and business model, providing organic revenue growth, consistent profitability, and strong cash generation,” added Keene.
SAIC is a premier technology integrator solving our nation’s most complex modernization and readiness challenges across the defense, space, federal civilian, and intelligence markets. Our robust portfolio of offerings includes high-end solutions in systems engineering and integration; enterprise IT, including cloud services; cyber; software; advanced analytics and simulation; and training.
With an intimate understanding of our customers’ challenges and deep expertise in existing and emerging technologies, we integrate the best components from our own portfolio and our partner ecosystem to rapidly deliver innovative, effective, and efficient solutions.