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Press Release: Perspecta announces financial -2-

· 02/05/2021 17:05
Condensed Consolidated Statements of Operations (preliminary and unaudited) Fiscal Quarter Ended (in millions, except per share amounts) January 1, 2021 December 31, 2019 Revenue $ 1,134 $ 1,126 Costs of services 906 863 Selling, general and administrative 57 77 Depreciation and amortization 93 92 Restructuring costs 2 -- Separation, transaction and integration-related costs 7 20 Interest expense, net 28 34 Other (income) expense, net (4) (35) Total costs and expenses 1,089 1,051 Income before taxes 45 75 Income tax expense 14 22 Net income $ 31 $ 53 Earnings per common share: Basic $ 0.19 $ 0.33 Diluted $ 0.19 $ 0.33 Selected Condensed Consolidated Balance Sheets (preliminary and unaudited) (in millions) January 1, 2021 March 31, 2020 ASSETS Current assets: Cash and cash equivalents $ 224 $ 147 Receivables, net of allowance for doubtful accounts of $1 and $1 531 513 Other receivables 11 45 Prepaid expenses 63 81 Other current assets 69 101 Total current assets 898 887 Property and equipment, net of accumulated depreciation of $280 and $193 262 307 Goodwill 2,702 2,671 Intangible assets, net of accumulated amortization of $691 and $515 1,026 1,193 Other assets 314 347 Total assets $ 5,202 $ 5,405 LIABILITIES and SHAREHOLDERS' EQUITY Current liabilities: Current maturities of long-term debt $ 90 $ 89 Current finance lease obligations 96 111 Current operating lease obligations 33 39 Accounts payable 191 218 Accrued payroll and related costs 203 142 Accrued expenses 363 385 Other current liabilities 96 73 Total current liabilities 1,072 1,057 Long-term debt, net of current maturities 2,123 2,283 Non-current finance lease obligations 95 136 Non-current operating lease obligations 126 129 Deferred tax liabilities 71 114 Other long-term liabilities 307 329 Total liabilities 3,794 4,048 Commitments and contingencies Total shareholders' equity 1,408 1,357 Total liabilities and shareholders' equity $ 5,202 $ 5,405 Condensed Consolidated Statements of Cash Flows (preliminary and unaudited) Three Fiscal Quarters Fiscal Quarter Ended Ended January 1, December January December 31, (in millions) 2021 31, 2019 1, 2021 2019 Cash flows from operating activities: Net income $ 31 $ 53 $ 44 $ 113 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization 93 92 285 283 Share-based compensation 10 6 27 21 Deferred income taxes (31) 24 (48) 4 Loss (gain) on sale or disposal of assets, net -- (33) 12 (23) Other non-cash charges, net 1 (1) 12 3 Changes in assets and liabilities, net of effects of acquisitions: Receivables, net 26 (1) 51 49 Prepaid expenses and other current assets 9 (8) 16 38 Accounts payable, accrued expenses and other current liabilities (9) (4) 28 (20) Deferred revenue and advanced contract payments (12) (8) 1 (24) Income taxes payable and liability 4 (4) (3) (6) Other assets and liabilities, net (5) 4 (12) 2 Net cash provided by operating activities 117 120 413 440 Cash flows from investing activities: Payments for acquisitions, net of cash acquired -- -- (53) (265) Proceeds from sale of assets 1 77 10 77 Purchases of property, equipment and software (6) (7) (32) (11) Payments for outsourcing contract

All statements and assumptions in this press release that do not directly and exclusively relate to historical facts could be deemed "forward-looking statements." Forward-looking statements are often identified by the use of words such as "anticipates," "believes," "estimates," "expects," "may," "could," "should," "forecast," "goal," "intends," "objective," "plans," "projects," "strategy," "target" and "will" and similar words and terms or variations of such. These statements represent current intentions, expectations, beliefs or projections, and no assurance can be given that the results described in such statements will be achieved. Forward-looking statements include, among other things, statements with respect to the expected timing of the closing of the merger with Peraton and our financial condition, results of operations, cash flows, business strategies, prospects, guidance, share repurchases, dividend payments, contract value, revenue acceleration, profitability and revenue generation. Such statements are subject to numerous assumptions, risks, uncertainties and other factors that could cause actual results to differ materially from those described in such statements, many of which are outside of our control. Important factors that could cause actual results to differ materially from those described in forward-looking statements include, but are not limited to, (i) potential disruptions to our business caused by the proposed acquisition of us by Peraton, a portfolio company of Veritas Capital Fund Management, L.L.C.; (ii) failure to complete the merger with Peraton in a timely manner or at all; (iii) various risks related to health epidemics, pandemics and similar outbreaks, such as the COVID-19 pandemic, which may have material adverse effects on our business, financial position, results of operations and/or cash flows; (iv) any issue that compromises our relationships with the U.S. federal government, or any state or local governments, or damages our professional reputation; (v) changes in the U.S. federal, state and local governments' spending and mission priorities that shift expenditures away from agencies or programs that we support; (vi) any delay in completion of the U.S. federal government's budget process; (vii) failure to comply with numerous laws, regulations and rules, including regarding procurement, anti-bribery and organizational conflicts of interest; (viii) failure by us or our employees to obtain and maintain necessary security clearances or certifications; (ix) our ability to compete effectively in the competitive bidding process and delays, contract terminations or cancellations caused by competitors' protests of major contract awards received by us; (x) our ability to accurately estimate or otherwise recover expenses, time and resources for our contracts; (xi) problems or delays in the development, delivery and transition of new products and services or the enhancement of existing products and services to meet customer needs and respond to emerging technological trends; (xii) failure of third parties to deliver on commitments under contracts with us; (xiii) misconduct or other improper activities from our employees or subcontractors; (xiv) delays, terminations, or cancellations of our major contract awards, including as a result of our competitors protesting such awards; (xv) failure of our internal control over financial reporting to detect fraud or other issues; (xvi) failure or disruptions to our systems, due to cyber-attack, service interruptions or other security threats; (xvii) failure to be awarded task orders under our indefinite delivery/indefinite quantity contracts; (xviii) changes in government procurement, contract or other practices or the adoption by the government of new laws, rules and regulations in a manner adverse to us; and (xix) uncertainty from the expected discontinuance of the London Interbank Offered Rate and transition to any other interest rate benchmark; as well as the matters described in the "Cautionary Statement Regarding Forward-Looking Statements" and "Risk Factors" sections of Perspecta's Annual Report on Form 10-K for the fiscal year ended March 31, 2020, as may be updated or supplemented in our Quarterly Reports on Form 10-Q and our other filings with the Securities and Exchange Commission, which discuss these and other factors that could adversely affect our results. Readers are cautioned not to place undue reliance on such statements which speak only as of the date they are made. We do not undertake any obligation to update or release any revisions to any forward-looking statement or to report any events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events except as required by law.

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February 05, 2021 17:05 ET (22:05 GMT)