And the Health team has been working hard to find opportunities to offset that. Tuesday, February 15, 2022 8:00 AM EST. And if I think about, say, if the enduring fires programs, the technology risk is essentially behind us. Obviously, our SES business does a lot of work internationally. In the third quarter, we hired just over 2,800 people. Leidos to Participate in The Morgan Stanley 10th Annual Laguna Conference But from an invention standpoint, we do that kind of work under, we call it, 6263 [ph] kind of early stage programs with customers like the Office of Naval Research and AFRL and DARPA. ~58% Defense, ~23% Civil, ~19% Health. I see if I can do this quickly. Non-GAAP net income and diluted EPS were down 15% and 12% respectively compared to the third quarter of fiscal year 2021, which had the highest earnings in our history, driven primarily by the COVID catchup in the business. P.O. Leidos Innovations Center (LInC) Leidos completes Gibbs & Cox acquisition, expanding maritime undersea, autonomous and cybersecurity capabilities. So that's why there's a range there. But there are just the way that portfolio shapes and the nature of the programs that as it tails down and we replace it with other work, frankly, there might even be some opportunities for margin improvement. The . We're not in an aggressive posture on M&A. During the third quarter, we returned $53 million to shareholders primarily through our ongoing dividend program. For more information, visit www.leidos.com. Leidos to Participate in The Jefferies Industrials Conference Leidos Investor Relations Executive Jobs | Glassdoor And first the footstall. Trading Update. Leidos Careers We don't feel compelled to do a big M&A. So, we don't see them leaving the market. Adjusted EBITDA is computed by excluding the following items from income before income taxes: (i) discrete items as identified above; (ii) interest expense; (iii) interest income; (iv) depreciation expense; and (v) amortization of internally developed intangible assets. A comment I would make is Bill LaPlante finally was confirmed by the Senate and put in as the acquisition exec in the Pentagon. The Leidos pay range for this job level is a general guideline only and not a guarantee of compensation or salary. Civil revenues of $795 million increased by 4% compared to the prior year quarter. With no change in law, the cost capitalization provision amounts to a negative impact to operating cash flow of about $150 million annually. So if you think about what we will look like five years from now, we will have the base business that we've always had and we will add to it, kind of above that base some significant production program. Investors; Contact; Company. Contact Us via Online Form. Feel confident. UNAUDITED NON-GAAP FINANCIAL MEASURES [CONTINUED]. Revenues were slightly up compared . Yeah, that's right. You have 5-year production runs, you have 10-year production runs. Headquartered in Reston, Va., Leidos reported annual revenues of approximately $13.7 billion for the fiscal year ended December 31, 2021. Our strong first quarter results and the improving federal budget picture increase our confidence in delivering on our full-year financial commitments. So we're really excited about the company five years from now. Because certain deductions for non-GAAP exclusions used to calculate projected net income attributable to Leidos shareholders may vary significantly based on actual events, Leidos is not able to forecast on a GAAP basis with reasonable certainty all deductions needed in order to provide a GAAP calculation of projected net income attributable to Leidos shareholders at this time. Adjusted EBITDA was $372 million for the third quarter for an adjusted EBITDA margin of 10.3%, which was up 10 basis points sequentially. DSOs in the quarter came down 3 days sequentially to 58, which is our target level. And that bodes well for increased orders, which will lead to increased sales in our global security business. And that did have an impact. And so, Roger has just hit on it. The Five Eyes countries, the NATO aligned countries, and then we tend to go where the world is complicated. And then maybe when we bid the next program, we win those. As a result, backlog at the end of the quarter was a record $36.3 billion, of which $7.1 billion was funded. Given the strength of the company and a valuation that doesn't reflect our long history of driving steady earnings growth and cash generation, we'll lean towards share repurchase when we have deployable capital. Revenue in the year-ago period benefited from the backlog of disability exams caused by COVID-19. These non-GAAP measures are frequently used by financial analysts covering Leidos and its peers. Leidos does not provide a reconciliation of forward-looking adjusted EBITDA margins or non-GAAP diluted EPS to net income attributable to Leidos shareholders, due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation. From the actual hardware component by the way, we love to make hardware that is part of the bigger solution where those things go, go hand in glove. And then they start to engage with the contractor base, they put out RFPs, we go and talk, we do demos, right. Leidos named one of the Worlds Most Ethical Companies for fifth consecutive year. We support important programs that expedite identity theft recovery, protect electronic health records, streamline paper tax filings, enhance consumer fraud investigations, support census data collection, and enable scientific research. Obviously, we had a tremendous performance in Q3, which puts us on track for another strong cash year. By the way, come to Huntsville, and we'll talk about technology, we'll talk about the technologies in the different products. And do you have any visibility to that improving or increasing into next year? Everybody's talking about supply chain constraints. And as Chris said, we have a lot of work to do between now and the end of the year. Our next question is from Colin Canfield with Barclays. Sentinel fits within the Joint All-Domain Command and Control or JADC2 umbrella. After submitting your information, you will receive an email. I would now like to turn the floor back over to Mr. Davis for closing comments. The team is working hard, as they always do, to minimize the tax expense. Transfer Agent EQ Shareowner Services. You noted some positive commentary on SG&A. Manager, Investor Relations. Well, definitely. And so, our team, DJ, our program manager, Steve Hall [ph] (51:27), our ops manager, have done an excellent job preparing that program for success. And so, our Defense business has really held up held up well. ", (in millions, except margin and per share amounts). Investors. I think we're going to be opportunistic, as we go forward and execute on our book of business and deploy our cash in a way that creates value for our shareholders. There are some other reasons why we tweaked algorithms in the US. Our third quarter results demonstrate the momentum in our business as we continue to report revenue growth at the upper end of our guidance across our diversified portfolio. Job email alerts. I think, operationally, we feel solid about the trajectory of the business. Pay and benefits are fundamental to any career decision, which is why our compensation packages reflect the importance of the work we do for our customers. It's still early, but voluntary attrition is trending in the right direction, and we don't expect that staffing will significantly constrain our plans for next year. In addition, the government customers were looking to clear the decks at the end of their fiscal year and, in some cases, paid invoices that would normally have been collected in Q4. Group: Quarterly Report. What we will tell you, though, is that if you go back to our Investor Day and we put some longer term goals on Investor Day, and we're still confident with the numbers we provided you. From our airborne work alerting warfighters to what's over the next hill to our autonomous maritime platforms protecting sea lanes and shores, our team is solving global critical challenges. And that required us to tweak our algorithms. We have a strong history of performance that rests on our foundation of integrity. To this point, we have not seen much benefit from the PACT Act that was passed in the last quarter, although disability exam volumes remain high. But in accordance with our policy, we only booked $100 million in the quarter. We're teaming up with Bubba Wallace and 23XI Racing in 2022 advancing a culture of inclusion and diversity. This concludes today's teleconference. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME, April 1, How should we think about that bill impacting both 4Q sales and then into 2023? The decline in segment profitability was primarily attributable to higher investments on developmental programs. * Non-GAAP financial measures should be considered in addition to, but not as a substitute for, the information provided in accordance with GAAP. Have a great day. And I'll highlight one other thing. Year ago acquisition revenues reflect revenues from assets subsequently divested. Analysts and institutional investors may participate by dialing +1 (877) 869-3847 (toll-free U.S.) or +1 (201) 689-8261 (international callers). Like all companies, we do lose programs. We need to start building UUVs. And good morning, everyone. (in millions, except per share amounts and margin and growth percentages). Number three, our business development results demonstrate that our strong positioning in the government technology marketplace is enabling us to navigate a difficult environment. Which brings me to point number two, our approach to capital allocation. This is Spencer Breitzke on for Cai. And we always hear about your successes, but are there any losses to be aware of? And we've been successful there. We do a lot of engineering for investor owned utilities and energy savings programs for large production facilities. The computation of non-GAAP measures may not be comparable to similarly titled measures reported by other companies, thus limiting their use for comparability. And so, if we were to lose a $1 billion program and, clearly, we don't win everything, and so there are programs like that that we have not won. So that's been very active in our proposal pits very recently. If you've got a manufacturing facility, you tend to hold on to the program. And he's trying to, I think, accelerate the RFPs and to get outlays where they need to be. And that business has turned out to be a huge growth engine for us as well. . So I think we have time for just one more question. I don't think you should expect significant movements, but it should be a nice tailwind for us as we look ahead to 2023 and beyond. But I feel better today than I did a year ago that we're going to get an omnibus and we'll avoid the extended CR that we had last year. Additional factors considered in extending . 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