- Revenues: $2.77 billion (up 3 percent) for fourth quarter, $11.1 billion (up 2 percent) for fiscal year(PRNewswire) — SAIC, Inc. (NYSE: SAI), a scientific, engineering, and technology applications company, today announced financial results for the fourth quarter and fiscal year 2011, which ended January 31, 2011.
"While market conditions were challenging this year, I am encouraged by the strong bookings achieved, growth in our pipeline of opportunities and increased cash generation," said Walt Havenstein, SAIC chief executive officer. "Our performance and success is based upon our employees' continued dedication to solving our customers' most critical problems through the delivery of timely and cost effective solutions with a foundation of consistently strong program execution. Our strong bookings and pipeline growth in fiscal 2011 give us confidence entering fiscal 2012."
Summary Operating Results
Revenues for the quarter were $2.77 billion, up 3 percent from $2.68 billion in the prior year quarter. Full-year revenues were $11.1 billion, up 2 percent from fiscal year 2010. Internal revenue growth represented 1 percentage point of the total revenue growth for the quarter and was flat for the fiscal year. Internal revenue growth for the quarter was driven by increased activity on certain command, control and communications; intelligence and cyber security contracts.
Operating income for the quarter was $220 million (7.9 percent of revenue), up 5 percent from $209 million (7.8 percent of revenue) in the prior year quarter. Full-year operating income was $958 million (8.6 percent of revenue), up 10 percent from $867 million (8.0 percent of revenue) in the prior fiscal year. Operating income for the year benefitted from a $56 million royalty payment and from strong program performance throughout the year.
Income from continuing operations for the quarter was $132 million, up 7 percent from $123 million in the prior year quarter. Full-year income from continuing operations was $569 million, up 14 percent from $500 million in the prior fiscal year. Income from continuing operations for the quarter and the fiscal year benefited from a lower effective tax rate due to the December 2010 extension of the federal research and development tax credit, retroactive to January 1, 2010, and the resolution of income tax uncertainties.
Diluted earnings per share (EPS) from continuing operations for the quarter were $0.36, up 16 percent from $0.31 in the prior year quarter, driven by the increase in income from continuing operations and a lower share count compared to the prior year quarter. The diluted share count for the quarter was 359 million, down 7 percent from 387 million in the prior year quarter, due primarily to share repurchases made throughout the year. Diluted earnings per share from continuing operations for the year were $1.51, up 22 percent from $1.24 in fiscal year 2010, reflecting growth in operating income, a lower effective tax rate, and a lower share count from share repurchases made during the year.
Cash Generation and Capital Deployment
Cash flow provided by operations for fiscal year 2011 was $737 million, representing 1.3 times income from continuing operations and up 19 percent from $620 million in the prior fiscal year. The increase in fiscal year 2011 cash flow was primarily due to improved cash management, including a reduction in days sales outstanding, and the increase in income from continuing operations.
During the quarter, the company used $153 million to repurchase approximately 9.5 million shares, including 9.4 million shares under the company's stock repurchase program. As previously disclosed, the company completed an offering of senior, unsecured notes in the fourth quarter, raising net proceeds of $742 million. The notes are a combination of 10 and 30 year maturities, and have a weighted average fixed interest rate of 5.05%. As of January 31, 2011, the company had $1.37 billion in cash and cash equivalents and $1.85 billion in long-term debt.
Mark W. Sopp, SAIC chief financial officer commented, "This year's accomplishments included another year of double-digit earnings per share growth and return on invested capital above 20%. We did this while investing more in differentiating capabilities which we believe will provide future growth opportunities. Furthermore, we were more aggressive in capital structure transactions, most notably through execution of a bond offering at attractive long-term interest rates, to position the company for future deployment of capital aimed to increase shareholder value."
New Business Awards
Net business bookings totaled $3.8 billion in the fourth quarter and $12.8 billion for the fiscal year, representing a book-to-bill ratio of 1.4 and 1.2 for the fourth quarter and the fiscal year, respectively. Large, competitive definite delivery contract awards received during the quarter include:
U.S. Department of State (DoS) Network Infrastructure Support. SAIC received a ten-year, $2.5 billion single award task order from DoS to engineer, design, secure, operate and maintain its critical enterprise-wide information technology (IT) network infrastructure in support of the Bureau of Information Resource Management. SAIC will serve as the lead systems integrator and help streamline services and provide improved service delivery.
U.S. Army 1st Theater Sustainment Command (1st TSC) Logistics Support. Under a $102 million five-and-one-half-year contract, SAIC will provide logistics services in support of 1st TSC activities throughout the U.S. Central Command area of responsibility. SAIC will support munitions storage and resupply efforts as well as operation of the ammunition supply point and theater storage area activities.
National Aeronautics and Space Administration (NASA) Support. SAIC received a $62 million contract extension to continue work on the Unified NASA Information Technology Services (UNITeS) contract. The extension has an eight-month base period of performance and options that would total 14 months of performance for the continuation of services through March 2012. SAIC will continue to provide a broad range of IT services to operate and maintain NASA's set of integrated enterprise application systems.
U.S. Naval Surface Warfare Center (NSWC) Systems Engineering Support. SAIC was awarded a five-year, $40 million task order to provide systems engineering and lifecycle integration to the NSWC Crane Division. SAIC will support NSWC in areas including prototyping, system and platform integration, logistics, and technology insertion.
U.S. Navy Enterprise Resource Planning (ERP) Support. SAIC was awarded a four-year, $28 million contract by the U.S. Navy Strategic Systems Programs Command to provide project management planning and systems integration services in support of the Navy's ERP program. The services delivered by SAIC will help the Navy develop and sustain applications across critical command components.
U.S. Environmental Protection Agency (EPA) Geographic Information Systems (GIS) Support. Under a four-and-one-third year, $20 million task order, SAIC is helping the EPA develop GIS applications and enhance existing databases to accommodate new applications. The advanced GIS technologies SAIC provides will assist EPA in their efforts to utilize and visualize environmental data for making critical decisions.
In addition, SAIC also won several indefinite-delivery/indefinite-quantity (IDIQ) contracts that are not included in net bookings. Awards during the quarter include:
U.S. Department of Energy (DOE) Environmental Remediation Support. SAIC received a multiple-award IDIQ contract from DOE to provide environmental clean-up services to the Office of Environmental Management. The environmental restoration, waste management, regulatory support, and facility deactivation, decommissioning, decontamination and demolition services SAIC delivers will help DOE clean up the environmental legacy from nuclear weapons development and nuclear research. The five-year contract has an estimated maximum total value of $907 million for all awardees.
U.S. Army Space and Missile Defense Command Modeling and Simulation Support. Under a multiple award IDIQ contract, SAIC will provide modeling, simulation and analysis services to help the Army combat existing and future space and missile defense challenges. The seven-year contract has a ceiling value of more than $343 million for SAIC.