Leidos Holdings, Inc. (LDOS) 10-Q Quarterly Report May 2022

Roger Krone, Leidos Chairman and Chief Executive Officer, commented, "Our first quarter marked a strong start to 2022, with record levels of revenues and backlog stemming from our leadership position in the government technology market. We continued to build our reputation and track record of performance in digital technology, cyber, and innovative systems across our diversified, resilient business portfolio. Our strong first quarter results and the improving federal budget picture increase our confidence in delivering on our full-year financial commitments."

Summary Operating Results


	Three Months Ended
(in millions, except margin and per share amounts)	April 1, 2022			April 2, 2021
Revenues	$	3,494		$	3,315


Net income	$	177		$	205
Net income margin	5.1		%	6.2		%
Diluted earnings per share (EPS)	$	1.25		$	1.42

Non-GAAP Measures*:
Adjusted EBITDA	$	358		$	389
Adjusted EBITDA margin	10.2		%	11.7		%
Non-GAAP diluted EPS	$	1.58		$	1.73

* 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 $3.49 billion, up 5% in total and up 4% organically compared to the prior year quarter. Revenues grew across all reportable segments; the largest contributors were the start-up of the Navy Next Generation Enterprise Network Recompete (NGEN-R) Service Management, Integration and Transport (SMIT) contract and the increased deployments on the Defense Healthcare Management System Modernization (DHMSM) program.

Net income was $177 million and diluted EPS was $1.25. Net income and diluted EPS were down 14% and 12% year-over-year, respectively, primarily as a result of the $26 million net benefit from an adjustment to legal reserves related to the Mission Support Alliance (MSA) joint venture recorded in the first quarter of fiscal year 2021. The weighted average diluted share count for the quarter was 140 million compared to 144 million in the prior year quarter. Net income margin decreased from 6.2% to 5.1% year-over-year.

The following information was filed by Leidos Holdings, Inc. (LDOS) on Tuesday, May 3, 2022 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:

Revenue - Product Highlight
The increases in revenue and operating income for the three months ended April 1, 2022, as compared to the three months ended April 2, 2021, was primarily due to a net increase in volumes on higher margin programs and net profit write-ups on certain programs.

Financial - Shares Highlight
The change was primarily due to the Accelerated Share Repurchase agreement entered into by the Company on February 16, 2022, which resulted in an increase of $403 million in stock repurchases during the current quarter and $38 million in capital contributions received from our non-controlling interest in the prior year quarter, partially offset by $75 million of net proceeds from our commercial paper program in the current quarter.
Financial - Cash Flow Highlight
Summary of Cash Flows Three Months Ended April 1,2022 April 2,2021 (in millions) Net cash provided by operating activities $ 93 $ 239 Net cash used in investing activities (21) (244) Net cash used in financing activities (519) (148) Net decrease in cash, cash equivalents and restricted cash $ (447) $ (153) Net cash provided by operating activities decreased $146 million for the three months ended April 1, 2022, when compared to the prior year quarter.
Financial - Expense Highlight
Beginning in 2022, a provision in the Tax Cuts and Jobs Act of 2017 ("TCJA") which eliminated the option to deduct research and development costs for tax purposes and requires taxpayers to capitalize and amortize the costs over five years became effective.
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.
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On February 16, 2022, we...Read more
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Although our Credit Facilities include...Read more
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We also have letters of...Read more
Revenue - Product
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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: 0001336920-22-000024
Submitted to the SEC: Tue May 03 2022 12:00:40 PM EST
Accepted by the SEC: Tue May 03 2022
Period: Friday, April 1, 2022
Industry: Computer Integrated Systems Design

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Leidos Holdings, Inc. (LDOS) SEC Filing 10-Q Quarterly Report for the period ending Friday, April 1, 2022

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