Leidos Holdings, Inc. (LDOS) 10-Q Quarterly Report Tue Nov 02 2021

Roger Krone, Leidos Chairman and Chief Executive Officer, commented, "The third quarter marked another strong quarter for Leidos, with record levels of revenues, adjusted EBITDA, non-GAAP diluted EPS, and backlog. Our success is the direct result of building a business portfolio focused on vital missions and a workforce that is motivated to enhance those missions through technology, engineering, and science. As we described at our October Investor Day, we see continued success ahead based on our scale, positioning, and talented people."

Summary Operating Results


	Three Months Ended
(in millions, except margin and per share amounts)	October 1, 2021			October 2, 2020
Revenues	$	3,483		$	3,242


Net income	$	208		$	163
Net income margin	6.0		%	5.0		%
Diluted earnings per share (EPS)	$	1.43		$	1.13

Non-GAAP Measures*:
Adjusted EBITDA	$	403		$	347
Adjusted EBITDA margin	11.6		%	10.7		%
Non-GAAP diluted EPS	$	1.80		$	1.47

* Non-GAAP financial measures should be considered in addition to, but not as a substitute for, the information provided in accordance with GAAP. Management believes that these non-GAAP measures provide another measure of Leidos' results of operations and financial condition, including its ability to comply with financial covenants. See Non-GAAP Financial Measures at the end of this press release for more information and a reconciliation of our selected reported results to these non-GAAP measures.

Revenues for the quarter were $3.48 billion, up 7% compared to the prior year quarter. Excluding acquired revenues of $47 million, revenues increased 6% organically. Revenues grew across all reportable segments; the largest contributors were the increase in veterans' disability examinations after the pause from the COVID-19 pandemic and the start-up of the Navy Next Generation IT contract.

Net income was $208 million, or $1.43 per diluted share. Net income was up 28% and diluted EPS was up 27% from the third quarter of fiscal year 2020. The weighted average diluted share count for the quarter was 143 million compared to 144 million in the prior year quarter. Net income margin increased from 5.0% to 6.0% year-over-year as a result of the strong program management and higher volumes on certain fixed price programs.

Adjusted EBITDA was $403 million for the third quarter, up 16% year-over-year; adjusted EBITDA margin increased from 10.7% to 11.6% over the same period consistent with the increase in operating income margin. Non-GAAP net income was $260 million for the third quarter, which was up 23% year-over-year, and non-GAAP diluted EPS for the quarter was $1.80, which was up 22% compared to the third quarter of fiscal year 2020.

The following information was filed by Leidos Holdings, Inc. (LDOS) on Tuesday, November 2, 2021 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Leidos Holdings, Inc.'s 10-Q Quarterly Report:

Financial - Income Highlight
The decrease in operating income for the three months ended October 1, 2021, as compared to the three months ended October 2, 2020, was primarily attributable to a net decrease in volumes on certain programs and the completion of certain contracts, partially offset by program wins.

Financial - Income Highlight
The decrease in operating income for the nine months ended October 1, 2021, as compared to the nine months ended October 2, 2020, was primarily attributable to a net decrease in volumes due to the timing of product deliveries on certain programs, partially offset by a $26 million benefit from an adjustment to legal reserves related to the Mission Support Alliance joint venture during the first quarter of fiscal 2021.
Financial - Cash Flow Highlight
Summary of Cash Flows The following table summarizes cash flow information for the periods presented: Net cash provided by operating activities decreased $27 million for the three months ended October 1, 2021, when compared to the prior year quarter.
Financial - Shares Highlight
Stock repurchases of Leidos common stock may be made on the open market or in privately negotiated transactions with third parties including through accelerated share repurchase agreements.
Other - Other Highlight
We also have letters of credit outstanding principally related to performance guarantees on contracts and surety bonds outstanding principally related to performance and subcontractor payment bonds as described in "Note 10-Commitments and Contingencies" of the notes to the condensed consolidated financial statements contained within this Quarterly Report on Form 10-Q.
Financial - Income
The increase in operating income...Read more
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As of October 1, 2021,...Read more
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Pursuant to these registration rights...Read more
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Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Material Contracts, Statements, Certifications & more

Leidos Holdings, Inc. provided additional information to their SEC Filing as exhibits

Exhibit 31.1: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 31.2: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 32.1: Section 1350 Certification

Exhibit 32.2: Section 1350 Certification

Ticker: LDOS
CIK: 1336920
Form Type: 10-Q Quarterly Report
Accession Number: 0001336920-21-000052
Submitted to the SEC: Tue Nov 02 2021 1:09:00 PM EST
Accepted by the SEC: Tue Nov 02 2021
Period: Friday, October 1, 2021
Industry: Computer Integrated Systems Design