CALABASAS, Calif.--(BUSINESS WIRE)--ASGN Incorporated (NYSE: ASGN), one of the foremost providers of IT and
professional services in the technology, digital, creative, engineering,
life sciences and government sectors, today reported financial results
for the fourth quarter and full year ended December 31, 2018.
Highlights
-
Revenues were $929.7 million, up 36.9 percent (11.8 percent on a pro
forma basis) over the fourth quarter of 2017. Pro forma assumes the
acquisition of ECS occurred at the beginning of 2017.
-
Net income was $45.9 million ($0.86 per diluted share), which was
above the high end of our previously announced financial estimates.
-
Adjusted Net Income (a non-GAAP measure) was $60.8 million ($1.14 per
diluted share), which was in line with our previously announced
estimates of $59.2 million to $62.9 million.
-
Adjusted EBITDA (a non-GAAP measure) was $109.0 million, up from $82.9
million in the fourth quarter of 2017 on an as reported basis.
-
Cash flows from operating activities were $63.9 million, up from $58.3
million in the fourth quarter of 2017 on an as reported basis.
-
Free cash flow (a non-GAAP measure) was $57.3 million, or 6.2 percent
of revenues.
-
Paid down $55.0 million of debt during the quarter and the leverage
ratio (a non-GAAP measure) was 2.69 to 1 at December 31, 2018, down
from 2.89 to 1 at September 30, 2018. Since the closing of the ECS
acquisition on April 2, 2018 through December 31, 2018, ASGN has
repaid $276.0 million of debt.
-
During the fourth quarter, ECS secured $196.6 million in new awards,
which are included in its $1.4 billion contract backlog as of December
31, 2018.
-
Subsequent to the fourth quarter, ASGN acquired DHA Group, Inc.
("DHA") for $46.0 million in cash. DHA is a provider of mobility,
cybersecurity, cloud and IT services to the Federal Bureau of
Investigation and other federal customers. DHA will become part of
ASGN's ECS Segment.
Management Commentary
"We continued to see incremental spending among our commercial and
government clients over the past quarter, notwithstanding the debate
regarding the strength of the U.S. economy and the current stage of
economic expansion,” commented Peter Dameris, CEO of ASGN. “Against this
strong demand environment, along with a continual increase in the
adoption of our shared resource delivery model, we were able to
accelerate our growth rate in the fourth quarter to the highest
quarterly growth rate for any quarter in 2018.”
Dameris continued, “Along with our strong operational performance, our
cash flow remained very strong. We generated $258.8 million of free cash
flow in 2018 and since the closing of the ECS acquisition, have repaid
$276.0 million of our total debt, reducing our leverage ratio from 3.67
to 2.69. Our strong cash flow permitted us to fund the purchase of our
most recently announced acquisition, DHA.”
Fourth Quarter 2018 Financial Results
Revenues were $929.7 million, up 36.9 percent year-over-year on a
reported basis and 11.8 percent on a pro forma basis, which assumes the
acquisition of ECS occurred at the beginning of 2017. The combined
effects of year-over-year differences in foreign exchange rates and the
number of "Billable Days" were not significant. Revenues for the quarter
included $7.1 million in software sales under one of ECS' contracts that
had been expected to occur in the first quarter of 2019.
Assignment revenues were $720.6 million, up 11.3 percent year-over-year
and permanent placement revenues were $35.2 million (3.8 percent of
revenues), up 11.4 percent year-over-year. Revenues from our ECS Segment
were $173.9 million for the quarter, up 14.0 percent year-over-year on a
pro forma basis.
Revenues from our Apex Segment accounted for 65.0 percent of total
revenues and were up 13.1 percent year-over-year. Revenues from our
Oxford Segment accounted for 16.3 percent of total revenues and were up
4.8 percent year-over-year. Revenues from our ECS Segment accounted for
18.7 percent of total revenues and were up 14.0 percent year-over-year
on a pro forma basis.
Gross profit was $272.0 million, up $51.3 million, or 23.2 percent
year-over-year on a reported basis and $24.2 million, or 9.8 percent on
a pro forma basis. Gross margin was 29.2 percent, compared with 29.8
percent for the fourth quarter of 2017 on a pro forma basis.
Selling, general and administrative (“SG&A”) expenses were $183.6
million (19.7 percent of revenues), compared with $151.4 million (22.3
percent of revenues) in the fourth quarter of 2017. SG&A expenses for
the quarter included acquisition, integration and strategic planning
expenses of $1.8 million, compared with $0.9 million in the fourth
quarter of 2017.
Amortization of intangible assets was $13.8 million, up from $8.4
million in the fourth quarter of 2017. The increase is related to the
intangible assets from the ECS acquisition. Amortization for the quarter
was $4.8 million lower than our previously announced estimate. This
favorable variance related to a change in the estimated useful life of
the Backlog intangible for ECS from 0.75 to 2.75 years. This change more
closely matches the useful life to the estimated cash flows from the
underlying funded contract awards.
The purchase accounting for the acquisition of ECS has been completed
and the related adjustments were recorded in the fourth quarter. There
were no significant changes to the recorded asset values on the balance
sheet. There were, however, changes made to the Contract Backlog data, a
non-GAAP measure, which are included in the "ECS Segment Supplemental
Information" section of this press release.
Interest expense was $14.2 million, up from $6.0 million in the fourth
quarter of 2017 and down from $14.6 million in the third quarter of
2018. The year-over-year increase in interest expense related to
borrowings to fund the purchase of ECS in April 2018. Interest expense
for the quarter was comprised of (i) $12.7 million of interest on the
credit facility and (ii) $1.5 million of amortization of deferred loan
costs.
Our effective income tax rate for the quarter was 23.7 percent, compared
with our guidance estimate of 26.0 percent. The lower rate reflected,
among other things, excess tax benefits on stock-based compensation
(which we do not include in our guidance estimates) and lower estimated
book-to-tax differences for the full year. Our provision for income
taxes for the fourth quarter of 2017 included a one-time, non-cash
benefit of $31.4 million related to the remeasurement of our net
deferred income tax liabilities as a result of tax reform. This one-time
adjustment was the reason net income for the fourth quarter of 2017
exceeded that of the current quarter.
Net income was $45.9 million ($0.86 per diluted share), compared with
$67.3 million ($1.28 per diluted share) in the fourth quarter of 2017.
Net income for the current quarter was above our previously announced
estimates. Net income for the fourth quarter of 2017 included the
one-time tax benefit of $31.4 million mentioned above. Adjusted Net
Income (a non-GAAP measure) was $60.8 million ($1.14 per diluted share),
compared with $76.0 million ($1.44 per diluted share) in the fourth
quarter of 2017. Adjusted EBITDA (a non-GAAP measure) was $109.0 million
(11.7 percent of revenues), up from $82.9 million (12.2 percent of
revenues) in the fourth quarter of 2017. Reconciliations between GAAP
and non-GAAP measures are included in this release.
Cash flows from operating activities were $63.9 million and free cash
flow (a non-GAAP measure) was $57.3 million. At December 31, 2018, our
leverage ratio (a non-GAAP measure) was 2.69 to 1, down from 2.89 to 1
at September 30, 2018.
First Quarter 2019 Financial Estimates
ASGN is providing financial estimates for the first quarter of 2019.
These estimates assume continuation of current operating trends and no
significant changes in foreign exchange rates. These estimates include
the (i) estimated results from DHA from the date of acquisition (January
25, 2019) and (ii) the estimated effect on revenues of $2.0 million of
the recent government shutdown, but does not include any acquisition,
integration or strategic planning expenses. Reconciliations of estimated
net income to the estimated non-GAAP measures are included in this
release.
-
Revenues of $916.6 to $926.6 million
-
Gross margin of 28.8 percent to 29.2 percent
-
SG&A expenses (excludes amortization of intangible assets) of $187.6
to $189.2 million (includes $7.4 million in depreciation and $9.9
million in stock-based compensation expense)
-
Amortization of intangible assets of $13.3 million
-
Interest expense of $14.3 million
-
Effective tax rate of 26.5 percent (before any excess tax benefits
related to stock-based compensation)
-
Net income of $35.8 to $39.5 million
-
Earnings per diluted share of $0.67 to $0.74
-
Diluted shares outstanding of 53.2 million
-
Adjusted EBITDA(1) (a non-GAAP measure) of $96.3 to $101.3
million
-
Adjusted Net Income (a non-GAAP measure) of $48.8 to $52.5 million
-
Adjusted Net Income per diluted share(2) (a non-GAAP
measure) of $0.92 to $0.99
_______________
(1)
|
|
Depreciation of $2.7 million included in costs of services related
to an ECS project and depreciation of $7.4 million included in SG&A
expenses are added back in the determination of Adjusted EBITDA.
|
(2)
|
|
Does not include the “Cash Tax Savings on Indefinite-lived
Intangible Assets.” These savings total $6.9 million each quarter,
or $0.13 per diluted share, and represent the economic value of the
tax deduction that we receive from the amortization of goodwill and
trademarks. These savings do not include the added benefit of the
DHA acquisition, which we will provide at a later date.
|
|
|
|
Our financial estimates above are based on our estimate of “Billable
Days” which are Business Days (calendar days for the period less
weekends and holidays) adjusted for other factors, such as the day of
the week a holiday occurs, additional time taken off around holidays,
year-end client furloughs and inclement weather. For the first quarter,
we estimate Billable Days of 62.0, which is one fewer than the first
quarter of 2018. Each Billable Day is approximately $14.2 million in
revenues. Excluding estimated results from DHA, our revenue estimates
imply year-over-year pro forma revenue growth (as if ECS were acquired
at the beginning of 2017) of 8.5 to 9.7 percent and 10.6 to 11.8 percent
on a same "Billable Days" and "Constant Currency" basis.
The above estimates also include the effects of the payroll tax reset,
which occurs at the beginning of each year. These annual resets cause,
among other things, lower gross and Adjusted EBITDA margins in the first
quarter of the year.
Conference Call
ASGN will hold a conference call today at 5:00 p.m. EST to review its
financial results for the fourth quarter. The dial-in number is
800-230-1059 (+1-612-234-9959 for callers outside the United States) and
the conference ID number is 462084. Participants should dial in ten
minutes before the call. The prepared remarks, supplemental materials,
and the webcast for this call can be accessed at asgn.com.
A replay of the conference call will be available beginning Wednesday,
February 13, 2019 at 7:00 p.m. EST until midnight on Wednesday, February
27, 2019. The access number for the replay is 800-475-6701
(+1-320-365-3844 outside the United States) and the conference ID number
is 462084.
About ASGN Incorporated
ASGN Incorporated (NYSE: ASGN) is one of the foremost providers of IT
and professional services in the technology, digital, creative,
engineering and life sciences fields across commercial and government
sectors. Operating through its Apex, Oxford and ECS segments, ASGN helps
leading corporate enterprises and government organizations develop,
implement and operate critical IT and business solutions through its
integrated offering of professional staffing and IT solutions.
Our mission as an organization is to be the most trusted partner for
companies seeking highly skilled human capital and integrated solutions
to fulfill their strategic and operational needs. ASGN was founded in
1985 and is headquartered in Calabasas, California. For more
information, visit us at asgn.com.
Reasons for Presentation of Non-GAAP Financial Measures
Statements in this release and the accompanying financial information
include non-GAAP financial measures. Such information is provided as
additional information, not as an alternative to our consolidated
financial statements presented in accordance with accounting principles
generally accepted in the United States ("GAAP"), and is intended to
enhance an overall understanding of our current financial performance.
These terms might not be calculated in the same manner as, and thus
might not be comparable to, similarly titled measures reported by other
companies. The financial statement tables that accompany this press
release include a reconciliation of each non-GAAP financial measure to
the most directly comparable GAAP financial measure. Below is a
discussion of our non-GAAP financial measures.
Pro forma revenues and gross profit by segment are presented to provide
a more consistent basis for comparison between quarters. Pro forma was
prepared as if the acquisition of ECS occurred at the beginning of 2017.
Although the pro forma segment data are considered non-GAAP measures,
they were calculated in the same manner as the consolidated pro forma
data, which are GAAP measures.
EBITDA (earnings before interest, taxes, depreciation and amortization
of intangible assets) and Adjusted EBITDA (EBITDA plus stock-based
compensation expense and, as applicable, acquisition, integration and
strategic planning expenses, write-off of loan costs and impairment
charges) are used to determine a portion of the compensation for some of
our executives and employees. Stock-based compensation expense is added
to arrive at Adjusted EBITDA because it is a non-cash expense. Write-off
of loan costs, acquisition, integration and strategic planning expenses
and impairment charges are added, as applicable, to arrive at Adjusted
EBITDA as they are not indicative of the performance of our core
business on an ongoing basis.
Non-GAAP net income (net income, less income (loss) from discontinued
operations, net of tax, plus, as applicable, write-off of loan costs,
credit facility amendment expenses, acquisition, integration and
strategic planning expenses, accretion of fair value discount on
contingent consideration, impairment charges, and the tax effect of
these items) provides a method for assessing our operating results in a
manner that is focused on the performance of our core business on an
ongoing basis. Adjusted Net Income (Non-GAAP net income plus
amortization of intangible assets, less income taxes on amortization for
financial reporting purposes not deductible for income tax purposes)
provides a method for assessing our operating results in a manner that
is focused on the performance of our core business on an ongoing basis,
adjusted for some of the cash flows associated with amortization of
intangible assets to more fully present the performance of our
acquisitions.
Constant currency information removes the effect of year-over-year
changes in foreign currency exchange rates. Constant currency
information is calculated using the foreign currency exchange rates from
the same period in the prior year.
Billable Days are Business Days (calendar days for the period less
weekends and holidays) adjusted for other factors, such as the day of
the week a holiday occurs, additional time taken off around holidays,
year-end client furloughs and inclement weather. In order to remove the
fluctuations caused by comparable periods having different billable
days, revenues on a Same Billable Days basis are calculated by taking
the current period average revenue per billable day, multiplied by the
number of billable days from the same period in the prior year.
The term Same Billable Days and Constant Currency basis means that the
impact of year-over-year changes in foreign currency exchange rates has
been removed from the Same Billable Days basis calculation.
Free cash flow is defined as net cash provided by (used in) operating
activities, less capital expenditures. Management believes this provides
useful information to investors about the amount of cash generated by
the business that can be used for strategic opportunities. Our leverage
ratio provides information about our compliance with loan covenants and
is calculated in accordance with our credit agreement, as filed with the
Securities and Exchange Commission ("SEC"), by dividing our total
indebtedness by trailing 12 months Adjusted EBITDA.
Reasons for Presentation of Operating Metrics and Supplemental
Information
Operating metrics are intended to enhance the overall understanding of
our business and our current financial performance. These operating
metrics might not be calculated in the same manner as, and thus might
not be comparable to, similarly titled metrics reported by other
companies. Contract backlog for our ECS segment represents the estimated
amount of future revenues to be recognized under negotiated contracts
and task orders. Book-to-bill ratio for our ECS segment is calculated as
the sum of the change in total backlog during the quarter plus revenues
for the quarter, divided by revenues for the quarter. The operating
metrics for the Apex and Oxford segments presented on this release are
calculated as follows: average number of staffing consultants are full
time equivalent staffing consultant headcount in the quarter; average
number of contract professionals and average number of customers are the
number of contract professionals employed each week and the number of
customers served each week, averaged for the quarter, respectively
(average is weighted by total number of hours billed per week); top 10
customers as a percentage of revenue are the 10 largest clients defined
by the revenue generated in the quarter, divided by total revenues in
the quarter; gross profit per staffing consultant is gross profit for
the quarter divided by the average number of staffing consultants;
average bill rate is total assignment revenue client billings in the
quarter divided by total hours billed in the quarter.
Safe Harbor
Certain statements made in this news release are “forward-looking
statements” within the meaning of Section 21E of the Securities Exchange
Act of 1934, as amended, and involve a high degree of risk and
uncertainty. Forward-looking statements include statements regarding our
anticipated financial and operating performance.
All statements in this release, other than those setting forth strictly
historical information, are forward-looking statements. Forward-looking
statements are not guarantees of future performance, and actual results
might differ materially. In particular, we make no assurances that the
estimates of revenues, gross margin, SG&A, amortization, effective tax
rate, net income, diluted shares outstanding, contract backlog,
book-to-bill ratio, Adjusted EBITDA, Adjusted Net Income, and related
per share amounts (as applicable) set forth above will be achieved.
Factors that could cause or contribute to such differences include
actual demand for our services, our ability to attract, train and retain
qualified staffing consultants, our ability to remain competitive in
obtaining and retaining clients, the availability of qualified contract
professionals, management of our growth, continued performance and
improvement of our enterprise-wide information systems, our ability to
manage our litigation matters, the successful integration of our
acquired subsidiaries, and other risks detailed from time to time in our
reports filed with the SEC, including our Annual Report on Form 10-K for
the year ended December 31, 2017, as filed with the SEC on March 1, 2018
and our Quarterly Reports on Form 10-Q for the quarters ended March 31,
2018, June 30, 2018 and September 30, 2018, as filed with the SEC on May
10, 2018, August 9, 2018 and November 8, 2018, respectively. We
specifically disclaim any intention or duty to update any
forward-looking statements contained in this news release.
SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
|
(In thousands, except per share amounts)
|
|
|
|
|
|
Three Months Ended
|
|
Year Ended
|
|
|
|
December 31,
|
|
September 30,
|
|
December 31,
|
|
|
|
|
2018
|
|
2017
|
|
2018
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
$
|
929,650
|
|
|
$
|
679,035
|
|
|
$
|
906,449
|
|
|
$
|
3,399,781
|
|
|
$
|
2,625,924
|
|
Costs of services
|
|
|
|
|
657,754
|
|
|
|
458,358
|
|
|
|
636,277
|
|
|
|
2,376,130
|
|
|
|
1,775,851
|
|
Gross profit
|
|
|
|
|
271,896
|
|
|
|
220,677
|
|
|
|
270,172
|
|
|
|
1,023,651
|
|
|
|
850,073
|
|
Selling, general and administrative expenses
|
|
|
|
|
183,602
|
|
|
|
151,447
|
|
|
|
177,335
|
|
|
|
704,997
|
|
|
|
591,893
|
|
Amortization of intangible assets
|
|
|
|
|
13,817
|
|
|
|
8,433
|
|
|
|
18,540
|
|
|
|
58,506
|
|
|
|
33,444
|
|
Operating income
|
|
|
|
|
74,477
|
|
|
|
60,797
|
|
|
|
74,297
|
|
|
|
260,148
|
|
|
|
224,736
|
|
Interest expense
|
|
|
|
|
(14,249
|
)
|
|
|
(5,976
|
)
|
|
|
(14,606
|
)
|
|
|
(55,973
|
)
|
|
|
(27,643
|
)
|
Income before income taxes
|
|
|
|
|
60,228
|
|
|
|
54,821
|
|
|
|
59,691
|
|
|
|
204,175
|
|
|
|
197,093
|
|
Provision for income taxes
|
|
|
|
|
14,302
|
|
|
|
(12,556
|
)
|
|
|
10,474
|
|
|
|
46,191
|
|
|
|
39,219
|
|
Income from continuing operations
|
|
|
|
|
45,926
|
|
|
|
67,377
|
|
|
|
49,217
|
|
|
|
157,984
|
|
|
|
157,874
|
|
Loss from discontinued operations,
net of tax
|
|
|
|
|
(45
|
)
|
|
|
(46
|
)
|
|
|
(45
|
)
|
|
|
(278
|
)
|
|
|
(199
|
)
|
Net income
|
|
|
|
$
|
45,881
|
|
|
$
|
67,331
|
|
|
$
|
49,172
|
|
|
$
|
157,706
|
|
|
$
|
157,675
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share income from continuing operations and net income:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
$
|
0.88
|
|
|
$
|
1.29
|
|
|
$
|
0.94
|
|
|
$
|
3.02
|
|
|
$
|
3.01
|
|
Diluted
|
|
|
|
$
|
0.86
|
|
|
$
|
1.28
|
|
|
$
|
0.93
|
|
|
$
|
2.98
|
|
|
$
|
2.97
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of shares and share equivalents
used to calculate earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
52,482
|
|
|
|
52,038
|
|
|
|
52,362
|
|
|
|
52,333
|
|
|
|
52,503
|
|
Diluted
|
|
|
|
|
53,159
|
|
|
|
52,822
|
|
|
|
53,034
|
|
|
|
53,061
|
|
|
|
53,205
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT FINANCIAL INFORMATION (Unaudited)
|
(Dollars in millions)
|
|
|
|
|
|
Reported
|
|
Pro Forma
|
|
|
|
|
Three Months Ended
|
|
Year Ended
|
|
Three Months Ended
|
|
Year Ended
|
|
|
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Apex:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assignment
|
|
|
|
$
|
590.7
|
|
|
$
|
524.3
|
|
|
$
|
2,244.5
|
|
|
$
|
1,993.3
|
|
|
$
|
590.7
|
|
|
$
|
524.3
|
|
|
$
|
2,244.5
|
|
|
$
|
1,993.3
|
|
Permanent placement
|
|
|
|
|
13.9
|
|
|
|
10.4
|
|
|
|
55.8
|
|
|
|
43.9
|
|
|
|
13.9
|
|
|
|
10.4
|
|
|
|
55.8
|
|
|
|
43.9
|
|
|
|
|
|
|
604.6
|
|
|
|
534.7
|
|
|
|
2,300.3
|
|
|
|
2,037.2
|
|
|
|
604.6
|
|
|
|
534.7
|
|
|
|
2,300.3
|
|
|
|
2,037.2
|
|
Oxford:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assignment
|
|
|
|
|
129.9
|
|
|
|
123.2
|
|
|
|
516.0
|
|
|
|
503.1
|
|
|
|
129.9
|
|
|
|
123.2
|
|
|
|
516.0
|
|
|
|
503.1
|
|
Permanent placement
|
|
|
|
|
21.3
|
|
|
|
21.2
|
|
|
|
90.5
|
|
|
|
85.7
|
|
|
|
21.3
|
|
|
|
21.2
|
|
|
|
90.5
|
|
|
|
85.7
|
|
|
|
|
|
|
151.2
|
|
|
|
144.4
|
|
|
|
606.5
|
|
|
|
588.8
|
|
|
|
151.2
|
|
|
|
144.4
|
|
|
|
606.5
|
|
|
|
588.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ECS
|
|
|
|
|
173.9
|
|
|
|
—
|
|
|
|
493.0
|
|
|
|
—
|
|
|
|
173.9
|
|
|
|
152.6
|
|
|
|
642.1
|
|
|
|
587.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assignment
|
|
|
|
|
720.6
|
|
|
|
647.5
|
|
|
|
2,760.5
|
|
|
|
2,496.4
|
|
|
|
720.6
|
|
|
|
647.5
|
|
|
|
2,760.5
|
|
|
|
2,496.4
|
|
Permanent placement
|
|
|
|
|
35.2
|
|
|
|
31.6
|
|
|
|
146.3
|
|
|
|
129.6
|
|
|
|
35.2
|
|
|
|
31.6
|
|
|
|
146.3
|
|
|
|
129.6
|
|
ECS
|
|
|
|
|
173.9
|
|
|
|
—
|
|
|
|
493.0
|
|
|
|
—
|
|
|
|
173.9
|
|
|
|
152.6
|
|
|
|
642.1
|
|
|
|
587.6
|
|
|
|
|
|
$
|
929.7
|
|
|
$
|
679.1
|
|
|
$
|
3,399.8
|
|
|
$
|
2,626.0
|
|
|
$
|
929.7
|
|
|
$
|
831.7
|
|
|
$
|
3,548.9
|
|
|
$
|
3,213.6
|
|
Percentage of total revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Apex
|
|
|
|
|
65.0
|
%
|
|
|
78.7
|
%
|
|
|
67.7
|
%
|
|
|
77.6
|
%
|
|
|
65.0
|
%
|
|
|
64.3
|
%
|
|
|
64.8
|
%
|
|
|
63.4
|
%
|
Oxford
|
|
|
|
|
16.3
|
%
|
|
|
21.3
|
%
|
|
|
17.8
|
%
|
|
|
22.4
|
%
|
|
|
16.3
|
%
|
|
|
17.4
|
%
|
|
|
17.1
|
%
|
|
|
18.3
|
%
|
ECS
|
|
|
|
|
18.7
|
%
|
|
|
—
|
%
|
|
|
14.5
|
%
|
|
|
—
|
%
|
|
|
18.7
|
%
|
|
|
18.3
|
%
|
|
|
18.1
|
%
|
|
|
18.3
|
%
|
|
|
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assignment
|
|
|
|
|
77.5
|
%
|
|
|
95.3
|
%
|
|
|
81.2
|
%
|
|
|
95.1
|
%
|
|
|
77.5
|
%
|
|
|
77.9
|
%
|
|
|
77.8
|
%
|
|
|
77.7
|
%
|
Permanent placement
|
|
|
|
|
3.8
|
%
|
|
|
4.7
|
%
|
|
|
4.3
|
%
|
|
|
4.9
|
%
|
|
|
3.8
|
%
|
|
|
3.8
|
%
|
|
|
4.1
|
%
|
|
|
4.0
|
%
|
ECS
|
|
|
|
|
18.7
|
%
|
|
|
—
|
%
|
|
|
14.5
|
%
|
|
|
—
|
%
|
|
|
18.7
|
%
|
|
|
18.3
|
%
|
|
|
18.1
|
%
|
|
|
18.3
|
%
|
|
|
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic
|
|
|
|
|
95.6
|
%
|
|
|
95.0
|
%
|
|
|
95.4
|
%
|
|
|
95.0
|
%
|
|
|
95.6
|
%
|
|
|
95.9
|
%
|
|
|
95.5
|
%
|
|
|
95.9
|
%
|
Foreign
|
|
|
|
|
4.4
|
%
|
|
|
5.0
|
%
|
|
|
4.6
|
%
|
|
|
5.0
|
%
|
|
|
4.4
|
%
|
|
|
4.1
|
%
|
|
|
4.5
|
%
|
|
|
4.1
|
%
|
|
|
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
Gross profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Apex
|
|
|
|
$
|
181.8
|
|
|
$
|
160.4
|
|
|
$
|
687.9
|
|
|
$
|
606.3
|
|
|
$
|
181.8
|
|
|
$
|
160.4
|
|
|
$
|
687.9
|
|
|
$
|
606.3
|
|
Oxford
|
|
|
|
|
61.6
|
|
|
|
60.3
|
|
|
|
248.9
|
|
|
|
243.8
|
|
|
|
61.6
|
|
|
|
60.3
|
|
|
|
248.9
|
|
|
|
243.8
|
|
ECS
|
|
|
|
|
28.6
|
|
|
|
—
|
|
|
|
86.9
|
|
|
|
—
|
|
|
|
28.6
|
|
|
|
27.1
|
|
|
|
113.6
|
|
|
|
111.9
|
|
Consolidated
|
|
|
|
$
|
272.0
|
|
|
$
|
220.7
|
|
|
$
|
1,023.7
|
|
|
$
|
850.1
|
|
|
$
|
272.0
|
|
|
$
|
247.8
|
|
|
$
|
1,050.4
|
|
|
$
|
962.0
|
|
Gross margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Apex
|
|
|
|
|
30.1
|
%
|
|
|
30.0
|
%
|
|
|
29.9
|
%
|
|
|
29.8
|
%
|
|
|
30.1
|
%
|
|
|
30.0
|
%
|
|
|
29.9
|
%
|
|
|
29.8
|
%
|
Oxford
|
|
|
|
|
40.7
|
%
|
|
|
41.8
|
%
|
|
|
41.0
|
%
|
|
|
41.4
|
%
|
|
|
40.7
|
%
|
|
|
41.8
|
%
|
|
|
41.0
|
%
|
|
|
41.4
|
%
|
ECS
|
|
|
|
|
16.5
|
%
|
|
|
—
|
%
|
|
|
17.6
|
%
|
|
|
—
|
%
|
|
|
16.5
|
%
|
|
|
17.7
|
%
|
|
|
17.7
|
%
|
|
|
19.0
|
%
|
Consolidated
|
|
|
|
|
29.2
|
%
|
|
|
32.5
|
%
|
|
|
30.1
|
%
|
|
|
32.4
|
%
|
|
|
29.2
|
%
|
|
|
29.8
|
%
|
|
|
29.6
|
%
|
|
|
29.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SELECTED CASH FLOW INFORMATION (Unaudited)
|
(In thousands)
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Cash provided by operating activities
|
|
|
|
$
|
63,890
|
|
|
$
|
58,259
|
|
|
$
|
287,451
|
|
|
$
|
196,446
|
|
Capital expenditures
|
|
|
|
|
(6,608
|
)
|
|
|
(6,227
|
)
|
|
|
(28,701
|
)
|
|
|
(24,265
|
)
|
Free cash flow (non-GAAP measure)
|
|
|
|
$
|
57,282
|
|
|
$
|
52,032
|
|
|
$
|
258,750
|
|
|
$
|
172,181
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash used in investing activities(1)
|
|
|
|
$
|
(6,207
|
)
|
|
$
|
(6,251
|
)
|
|
$
|
(788,733
|
)
|
|
$
|
(50,117
|
)
|
Cash provided by (used in) financing activities(1)
|
|
|
|
$
|
(56,218
|
)
|
|
$
|
(43,652
|
)
|
|
$
|
507,799
|
|
|
$
|
(138,469
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Investing and financing activities in 2018 included the ECS
acquisition and related financing.
|
|
|
|
SELECTED CONSOLIDATED BALANCE SHEET DATA
|
AS OF DECEMBER 31, 2018 AND DECEMBER 31, 2017
|
(In thousands)
|
|
|
|
|
|
2018
|
|
2017
|
|
|
|
|
(Unaudited)
|
|
|
Cash and cash equivalents
|
|
|
|
$
|
41,826
|
|
$
|
36,667
|
Accounts receivable, net
|
|
|
|
|
613,825
|
|
|
428,536
|
Total current assets
|
|
|
|
|
686,372
|
|
|
499,523
|
Goodwill and intangible assets, net
|
|
|
|
|
1,909,767
|
|
|
1,246,861
|
Total assets
|
|
|
|
|
2,687,851
|
|
|
1,810,129
|
Total current liabilities
|
|
|
|
|
308,249
|
|
|
166,717
|
Working capital
|
|
|
|
|
378,123
|
|
|
332,806
|
Long-term debt
|
|
|
|
|
1,100,424
|
|
|
575,213
|
Other long-term liabilities
|
|
|
|
|
97,116
|
|
|
76,808
|
Stockholders’ equity
|
|
|
|
|
1,182,062
|
|
|
991,391
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF NET INCOME TO EBITDA (NON-GAAP MEASURE) AND
|
ADJUSTED EBITDA (NON-GAAP MEASURE) (Unaudited)
|
(In thousands)
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Net income
|
|
|
|
$
|
45,881
|
|
$
|
67,331
|
|
|
$
|
157,706
|
|
$
|
157,675
|
Loss from discontinued operations,
net of tax
|
|
|
|
|
45
|
|
|
46
|
|
|
|
278
|
|
|
199
|
Interest expense
|
|
|
|
|
14,249
|
|
|
5,976
|
|
|
|
55,973
|
|
|
27,643
|
Provision for income taxes
|
|
|
|
|
14,302
|
|
|
(12,556
|
)
|
|
|
46,191
|
|
|
39,219
|
Depreciation
|
|
|
|
|
9,860
|
|
|
6,678
|
|
|
|
36,469
|
|
|
25,160
|
Amortization of intangible assets
|
|
|
|
|
13,817
|
|
|
8,433
|
|
|
|
58,506
|
|
|
33,444
|
EBITDA (non-GAAP measure)
|
|
|
|
|
98,154
|
|
|
75,908
|
|
|
|
355,123
|
|
|
283,340
|
Stock-based compensation
|
|
|
|
|
9,108
|
|
|
6,101
|
|
|
|
31,488
|
|
|
24,044
|
Acquisition, integration and strategic planning expenses
|
|
|
|
|
1,781
|
|
|
937
|
|
|
|
16,647
|
|
|
4,052
|
Adjusted EBITDA (non-GAAP measure)
|
|
|
|
$
|
109,043
|
|
$
|
82,946
|
|
|
$
|
403,258
|
|
$
|
311,436
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF NET INCOME TO NON-GAAP NET INCOME AND
|
ADJUSTED NET INCOME (NON-GAAP MEASURE) (Unaudited)
|
(In thousands, except per share amounts)
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Net income
|
|
|
|
$
|
45,881
|
|
|
$
|
67,331
|
|
|
$
|
157,706
|
|
|
$
|
157,675
|
|
Loss from discontinued operations, net of tax
|
|
|
|
|
45
|
|
|
|
46
|
|
|
|
278
|
|
|
|
199
|
|
Credit facility amendment expenses(1)
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
6,159
|
|
|
|
2,728
|
|
Acquisition, integration and strategic planning expenses
|
|
|
|
|
1,781
|
|
|
|
937
|
|
|
|
16,647
|
|
|
|
4,052
|
|
Tax effect on adjustments
|
|
|
|
|
(465
|
)
|
|
|
(365
|
)
|
|
|
(5,952
|
)
|
|
|
(2,644
|
)
|
Non-GAAP net income
|
|
|
|
|
47,242
|
|
|
|
67,949
|
|
|
|
174,838
|
|
|
|
162,010
|
|
Amortization of intangible assets(3)
|
|
|
|
|
13,817
|
|
|
|
8,433
|
|
|
|
58,506
|
|
|
|
33,444
|
|
Income taxes on amortization for financial reporting purposes not
deductible for income tax purposes
|
|
|
|
|
(268
|
)
|
|
|
(405
|
)
|
|
|
(1,075
|
)
|
|
|
(1,622
|
)
|
Adjusted Net Income (non-GAAP measure)(2)
|
|
|
|
$
|
60,791
|
|
|
$
|
75,977
|
|
|
$
|
232,269
|
|
|
$
|
193,832
|
|
|
|
|
|
|
|
|
|
|
|
|
Per diluted share:
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
$
|
0.86
|
|
|
$
|
1.28
|
|
|
$
|
2.98
|
|
|
$
|
2.97
|
|
Adjustments
|
|
|
|
|
0.28
|
|
|
|
0.16
|
|
|
|
1.40
|
|
|
|
0.67
|
|
Adjusted Net Income (non-GAAP measure)(2)
|
|
|
|
$
|
1.14
|
|
|
$
|
1.44
|
|
|
$
|
4.38
|
|
|
$
|
3.64
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common and common equivalent shares outstanding
(diluted)
|
|
|
|
|
53,159
|
|
|
|
52,822
|
|
|
|
53,061
|
|
|
|
53,205
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
During the year ended December 31, 2018 we incurred $22.5 million in
fees related to the amendment to our credit facility to fund the
acquisition of ECS, of which $6.2 million were expensed as incurred
and included in interest expense. The remaining $16.3 million fees
were capitalized and are being amortized over the term of the credit
facility. During the year ended December 31, 2017 we amended our
credit facility and incurred $3.3 million in fees, of which $2.7
million were expensed as incurred and included in interest expense,
while the remaining were capitalized and are being amortized over
the term of the credit facility.
|
(2)
|
|
Does not include the “Cash Tax Savings on Indefinite-lived
Intangible Assets.” These savings total $6.9 million per quarter
(approximately $0.13 per diluted share) and represent the economic
value of the tax deduction that we receive from the amortization of
goodwill and trademarks.
|
(3)
|
|
The purchase accounting for ECS has been completed and the
differences in the finalized fair value and the initial
determinations are not significant. There was a change in the
estimated useful life of the Backlog intangible asset from 0.75 to
2.75 years. As a result, estimated amortization of intangible assets
has changed. The revised estimates for amortization of intangible
assets (before the effects of the DHA acquisition) are: $47.3
million for 2019, $36.4 million for 2020, $30.7 million for 2021,
$23.0 million for 2022 and $19.6 million for 2023.
|
|
|
|
OPERATING METRICS (Unaudited)
|
|
APEX AND OXFORD SEGMENTS
|
|
|
|
|
|
Q4 2018
|
|
Q3 2018
|
|
Q4 2017
|
Average number of staffing consultants:
|
|
|
|
|
|
|
|
|
Apex
|
|
|
|
|
1,734
|
|
|
|
1,660
|
|
|
|
1,578
|
|
Oxford
|
|
|
|
|
909
|
|
|
|
929
|
|
|
|
927
|
|
Average number of customers:
|
|
|
|
|
|
|
|
|
Apex
|
|
|
|
|
3,739
|
|
|
|
3,751
|
|
|
|
3,613
|
|
Oxford
|
|
|
|
|
980
|
|
|
|
992
|
|
|
|
1,036
|
|
Average number of contract professionals(1):
|
|
|
|
|
|
|
|
|
Apex
|
|
|
|
|
21,281
|
|
|
|
20,464
|
|
|
|
19,216
|
|
Oxford
|
|
|
|
|
2,988
|
|
|
|
2,989
|
|
|
|
2,841
|
|
Top 10 customers as a percentage of revenues:
|
|
|
|
|
|
|
|
|
Apex
|
|
|
|
|
23.4
|
%
|
|
|
24.0
|
%
|
|
|
25.8
|
%
|
Oxford
|
|
|
|
|
12.4
|
%
|
|
|
12.1
|
%
|
|
|
12.4
|
%
|
Average bill rate:
|
|
|
|
|
|
|
|
|
Apex
|
|
|
|
$
|
61.24
|
|
|
$
|
59.89
|
|
|
$
|
57.46
|
|
Oxford
|
|
|
|
$
|
98.30
|
|
|
$
|
100.91
|
|
|
$
|
101.16
|
|
Gross profit per staffing consultant:
|
|
|
|
|
|
|
|
|
Apex
|
|
|
|
$
|
105,000
|
|
|
$
|
107,000
|
|
|
$
|
102,000
|
|
Oxford
|
|
|
|
$
|
68,000
|
|
|
$
|
68,000
|
|
|
$
|
65,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Average number of contract professionals placed on assignment each
week that are considered our employees; this number does not include
employees of our subcontractors.
|
|
|
|
ECS SEGMENT SUPPLEMENTAL INFORMATION (Unaudited)
|
|
|
|
|
|
|
|
|
|
MIX OF REVENUES BY CONTRACT TYPE
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q4 2018
|
|
Q3 2018
|
|
Q4 2017
|
Firm-fixed-price
|
|
|
|
23.1
|
%
|
|
29.4
|
%
|
|
29.7
|
%
|
Time and materials
|
|
|
|
30.1
|
%
|
|
25.7
|
%
|
|
32.2
|
%
|
Cost-plus-fixed-fee
|
|
|
|
46.8
|
%
|
|
44.9
|
%
|
|
38.1
|
%
|
|
|
|
|
|
|
|
|
|
MIX OF REVENUES BY CUSTOMER
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q4 2018
|
|
Q3 2018
|
|
Q4 2017
|
Department of Defense and Intelligence Agencies
|
|
|
|
65.5
|
%
|
|
62.0
|
%
|
|
61.2
|
%
|
Federal Civilian
|
|
|
|
27.2
|
%
|
|
32.0
|
%
|
|
32.5
|
%
|
Commercial and Other
|
|
|
|
7.3
|
%
|
|
6.0
|
%
|
|
6.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Firm-fixed-price ("FFP") contracts provide for a fixed price for
specified products, systems and/or services. Time and materials
("T&M") contracts provide for payments based on fixed hourly rates
for each direct labor hour expended and reimbursements for allowable
material costs and out-of-pocket expenses. Cost-plus-fixed-fee
("CPFF") contracts provide for reimbursement of our direct contract
costs and allowable and allocable indirect costs, plus the
negotiated profit margin or fee.
|
|
|
|
CONTRACT BACKLOG
(1)
|
2018 - Revised
(4)
|
(In millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract backlog as of
|
|
|
|
|
December 31
|
|
September 30
|
|
June 30
|
|
March 31
|
Funded Contract Backlog(2)
|
|
|
|
$
|
350.0
|
|
$
|
365.1
|
|
$
|
278.2
|
|
$
|
309.3
|
Negotiated Unfunded Contract Backlog(3)
|
|
|
|
|
1,096.6
|
|
|
1,071.9
|
|
|
1,045.5
|
|
|
1,057.7
|
Total Contract Backlog
|
|
|
|
$
|
1,446.6
|
|
$
|
1,437.0
|
|
$
|
1,323.7
|
|
$
|
1,367.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Contract backlog represents the estimated amount of future revenues
to be recognized under negotiated contracts and task orders as work
is performed. Contract backlog excludes awards which have been
protested by competitors until the protest is resolved in our favor.
ECS segregates contract backlog into two categories, funded contract
backlog and negotiated unfunded contract backlog.
|
(2)
|
|
Funded contract backlog for contracts with U.S. government agencies
primarily represents contracts for which funding has been formally
awarded less revenues previously recognized on these contracts, and
does not include the unfunded portion of contracts where funding is
incrementally awarded or authorized by the U.S. government even
though the contract may call for performance over a number of years.
Funded contract backlog for contracts with non-government agencies
represents the estimated value of contracts which may cover multiple
future years, less revenues previously recognized on these contracts.
|
(3)
|
|
Negotiated unfunded contract backlog represents the estimated future
revenues to be earned from negotiated contract awards for which
funding has not been awarded or authorized, and unexercised priced
contract options. Negotiated unfunded contract backlog does not
include any estimate of future potential task orders expected to be
awarded under indefinite delivery, indefinite quantity (IDIQ), U.S.
General Services Administration (GSA) schedules or other master
agreement contract vehicles.
|
(4)
|
|
The Contract Backlog for prior quarters above has been revised for
changes in the estimated value of certain contracts as of the
acquisition date.
|
|
|
|
BOOK-TO-BILL RATIOS 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
|
|
|
December 31
|
|
September 30
|
|
June 30
|
Book-to-Bill Ratio
|
|
|
|
1.1 to 1.0
|
|
1.7 to 1.0
|
|
0.7 to 1.0
|
|
|
|
|
|
|
|
|
|
The book-to-bill ratio is calculated as the sum of the change in total
contract backlog during the quarter plus revenues for the quarter,
divided by revenues for the quarter.
FINANCIAL ESTIMATES FOR Q1 2019
|
RECONCILIATION OF ESTIMATED NET INCOME TO ESTIMATED NON-GAAP
MEASURES
|
(In millions, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
Low
|
|
|
High
|
Net income(1)(2)
|
|
|
|
$
|
35.8
|
|
|
|
$
|
39.5
|
|
Interest expense
|
|
|
|
|
14.3
|
|
|
|
|
14.3
|
|
Provision for income taxes(2)
|
|
|
|
|
12.9
|
|
|
|
|
14.2
|
|
Depreciation(3)
|
|
|
|
|
10.1
|
|
|
|
|
10.1
|
|
Amortization of intangible assets
|
|
|
|
|
13.3
|
|
|
|
|
13.3
|
|
EBITDA (non-GAAP measure)
|
|
|
|
|
86.4
|
|
|
|
|
91.4
|
|
Stock-based compensation
|
|
|
|
|
9.9
|
|
|
|
|
9.9
|
|
Adjusted EBITDA (non-GAAP measure)
|
|
|
|
$
|
96.3
|
|
|
|
$
|
101.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Low
|
|
|
High
|
Net income(1)(2)
|
|
|
|
$
|
35.8
|
|
|
|
$
|
39.5
|
|
Amortization of intangible assets
|
|
|
|
|
13.3
|
|
|
|
|
13.3
|
|
Income taxes on amortization for financial reporting purposes not
deductible for income tax purposes
|
|
|
|
|
(0.3
|
)
|
|
|
|
(0.3
|
)
|
Adjusted Net Income (non-GAAP measure)(4)
|
|
|
|
$
|
48.8
|
|
|
|
$
|
52.5
|
|
|
|
|
|
|
|
|
|
Per diluted share:
|
|
|
|
|
|
|
|
Net income
|
|
|
|
$
|
0.67
|
|
|
|
$
|
0.74
|
|
Adjustments
|
|
|
|
|
0.25
|
|
|
|
|
0.25
|
|
Adjusted Net Income (non-GAAP measure)(4)
|
|
|
|
$
|
0.92
|
|
|
|
$
|
0.99
|
|
|
|
|
|
|
|
|
|
Weighted average common and common equivalent shares outstanding
(diluted)
|
|
|
|
|
53.2
|
|
|
|
|
53.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
These estimates do not include acquisition, integration, or
strategic planning expenses.
|
(2)
|
|
These estimates do not include excess tax benefits related to
stock-based compensation.
|
(3)
|
|
Composed of $2.7 million of depreciation included in costs of
services related to an ECS project and $7.4 million of depreciation
included in SG&A expenses.
|
(4)
|
|
Does not include the “Cash Tax Savings on Indefinite-lived
Intangible Assets.” These savings total $6.9 million per quarter
($0.13 per diluted share) and represent the economic value of the
tax deduction that we receive from the amortization of goodwill and
trademarks. These savings do not include the added benefit of the
DHA acquisition, which we will provide at a later date.
|
Contact:
Ed Pierce
Chief Financial Officer
818-878-7900