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SAIC Reports Q2 FY 2021 Financial Results; Nazzic Keene Quoted

Nazzic Keene CEO
Nazzic Keene, CEO, Wash100 Winner, SAIC

Science Applications International Corporation (SAIC) has announced second quarter fiscal year 2021 results, which ended July 31, the company reported on Thursday.

"Despite pandemic-related challenges, which we are effectively navigating, we have kept our focus on the execution of our long-term strategy, advanced our positions in key markets, and delivered strong program performance. We continue to gain strategic momentum while delivering results and value for our customers, employees, and shareholders," said SAIC CEO and 2020 Wash100 Award recipient Nazzic Keene.

SAIC has estimated the second quarter impact from the COVID-19 pandemic to be approximately $65 million of revenue, $8 million of adjusted EBITDA and an immaterial net impact to free cash flow, primarily driven by reduced volume in the company's supply chain business, lower FAA training service revenues and uncertain profit recovery on ready-state labor. 

The company has reported its revenues for the quarter increased $170 million, or 10.7 percent, compared to the prior year quarter due to the acquisition of Unisys Federal, revenue on new contracts primarily supporting the intelligence community (IC) and U.S. Air Force (USAF) and increased volume on existing programs. 

SAIC has stated that operating income, as a percentage of revenues of 5.7 percent, decreased from 6.0 percent in the prior year period due to increased intangible asset amortization and the impacts of COVID-19. Net income decreased $6 million as compared to the same period in the prior year primarily due to higher interest expense. 

The company's adjusted EBITDA as a percentage of revenues for the quarter increased to 9.5 percent of revenues from 8.4 percent of revenues in the prior year quarter driven by gains related to the resolution of a legal and program contract.

SAIC's diluted earnings per share for the quarter was $0.87 compared to $0.96 in the prior year quarter. Adjusted diluted earnings per share for the quarter was $1.63 compared to $1.35 in the prior year quarter. The weighted-average diluted shares outstanding during the quarter decreased to 58.6 million from 59.1 million during the prior year quarter. 

The company reported cash flows by operating activities of $104 million, an increase of $9 million compared to the same period in the prior year. The improvement is primarily due to cash provided from operating activities of Unisys Federal and deferred payroll tax payments as provided for in the CARES Act, offset by unbilled receivables related to ready-state labor, also provided for under the CARES Act.

During the quarter, SAIC deployed $163 million of capital, consisting of $21 million in cash dividends, $17 million of mandatory debt repayment, and $125 million of voluntary debt repayment. There were no share repurchases in the second quarter. Subsequent to the end of the quarter, SAIC has made voluntary debt repayment of $100 million. 

SAIC's Board of Directors declared a cash dividend of $0.37 per share of its common stock payable. The company intends to continue paying dividends on a quarterly basis, although the declaration of any future dividends will be determined by the Board of Directors.

Net bookings for the quarter were approximately $4.6 billion, which reflects a book-to-bill ratio of 2.6. On a year-to-date basis, SAIC has produced a book to bill of 1.8. SAIC's estimated backlog of signed business orders at the end of the quarter was approximately $19.4 billion. Of the total backlog amount, approximately $3.1 billion was funded.

“SAIC continues to deliver a resilient and stable revenue base, improved profitability, strong cash generation, and the highest book-to-bill and backlog in our seven-year history," Keene added. 

About SAIC

SAIC® is a premier Fortune 500® technology integrator driving our nation's digital transformation. Our robust portfolio of offerings across the defense, space, civilian, and intelligence markets includes secure high-end solutions in engineering, IT modernization, and mission solutions. Using our expertise and understanding of existing and emerging technologies, we integrate the best components from our own portfolio and our partner ecosystem to deliver innovative, effective, and efficient solutions that are critical to achieving our customers' missions.

We are 25,500 strong; driven by mission, united by purpose, and inspired by opportunities. Headquartered in Reston, Virginia, SAIC has pro forma annual revenues of approximately $7.1 billion. 

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Written by Sarah Sybert

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