Perspecta Inc. (NYSE:PRSP) Q1 2020 Results Earnings Conference Call August 14, 2019 5:00 PM ET
Stuart Davis - Vice President, Investor Relations
Mac Curtis - President and Chief Executive Officer
John Kavanaugh - Senior Vice President and Chief Financial Officer
- Stuart Davis - 投资者关系副总裁
- Mac Curtis - 总裁兼首席执行官
- John Kavanaugh - 高级副总裁兼首席财务官
Justin Donati - Wells Fargo Securities, LLC
Joseph DeNardi - Stifel, Nicolaus
Gautam Khanna - Cowen and Company, LLC
- Justin Donati - 富国银行证券有限责任公司
- Joseph DeNardi - Stifel，Nicolaus
- Gautam Khanna - Cowen and Company，LLC
Good day and welcome to the Perspecta Inc. First Quarter Fiscal Year 2020 Earnings Conference Call and Webcast. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded.
I would now like to turn the conference over to Stuart Davis, Vice President, Investor Relations and Strategy. Please go ahead, sir.
美好的一天，欢迎来到Perspecta Inc. 2020财年第一季度的收益电话会议和网络直播。 所有参与者都将处于只听模式。 [操作员说明]请注意正在记录此事件。
Thank you. Welcome everyone to today's quarterly earnings conference call. Presenting on the call today are Mac Curtis, our CEO, and John Kavanaugh, our CFO.
This call is being webcast on the Investor Relations portion of our website where you'll also find the earnings release and financial presentation slides that we will use for today's call.
Turning to slide two of the presentation, please note that, during this call, we'll make forward-looking statements that are subject to known and unknown risks and uncertainties that can cause actual results to differ materially from anticipated results.
For a full discussion of these risks and uncertainties, please refer to our SEC filings including our latest Form 10-K.
In addition, the statements represent our views as of today and subsequent events may cause our views to change. Though we may elect to update the forward-looking statements, we specifically disclaim any obligation to do so.
Finally, as shown on slide three, we'll discuss some non-GAAP financial measures that we believe provide useful information for investors. The slide deck for today's call includes reconciliations to the most closely comparable GAAP measures.
At this time, it's my pleasure to turn the call over to Mac, who will begin on slide four.
谢谢。欢迎大家参加今天的季度收益电话会议。今天出席的电话会议是我们的首席执行官Mac Curtis和我们的首席财务官John Kavanaugh。
Thank you, Stuart. And thank you all for joining us this afternoon. A lot has happened since our last call. First, we had another strong quarter of operations with robust organic growth, strong margins and excellent free cash flow.
Second, the president has signed a two-year budget framework that gives our customers the predictability they need to plan for and execute their critical missions.
Third, we had another strong quarter of new business awards.
And fourth, we made our first acquisition as a public company.
I'll now address each of these points in more detail. First, again, we exceeded consensus estimates on all of our key financial metrics. Quarter after quarter, we're delivering on our growth, margin, earnings and cash commitments.
Revenue was up 1% sequential and up 7% year-over-year on a pro forma basis, our fastest growth quarter yet.
Controlling for last year's divestiture gain, adjusted EBITDA was up 19% and adjusted diluted EPS was up 18%. Free cash generation was again stellar at 189% of adjusted net income. Just absolutely great execution by the entire team.
Second, the president signed the Bipartisan Act of 2019, which increases statutory spending limits by $323 billion in fiscals 2020 and 2021 and permanently ends the sequester threat.
The law also suspends the debt limit through July of 2021, avoiding the risk of a federal default on payments until after next presidential election.
For government fiscal year of 2020, the defense budget will be $738 million which is up 3.1% and the budget for civilian agencies will be $632 billion which is up 4.5%. This deal is very positive for Perspecta and our industry. Budgets are up nicely and our customers can proceed with the new program starts and expansions of existing programs.
Now, Congress still needs to pass the 12 individual funding bills, so some of the agencies may begin the fiscal year on a continuing resolution. But all agencies should have full year budgets in the fall which is a great outcome.
Third, new business bookings are very strong, with 76% of the $1 billion in total bookings representing new work for Perspecta. Book-to-bill ratio in the quarter was 0.9 times. For the trailing 12 months, our book-to-bill ratio was 1.5 times. So, we are well positioned for continued growth.
An area of booking strength in the first quarter was trusted workforce, which is one of our strategic priorities. The Wall Street shorthand is background investigations, but trusted workforce is more than background investigations. And our trusted workforce business is more than just the OPM contract.
This market includes continuous vetting and insider threat. And the newly established defense counterintelligence and security agency, our DCSA, is taking a broader view of how to attract and retain a trusted national security workforce.
The trusted workforce market also encompasses industrial and facility security, supply chain security and other trusted identity markets both in the US and abroad.
In the quarter, we had $42 million in bookings on our OPM/NBIB contract, reflecting continued workload on that important mission.
在本季度，我们在OPM / NBIB合同上预订了4200万美元，反映了该重要任务的持续工作量。
We also won a $100 million other transaction agreement, or OTA, modernizing the IT systems that support background checks and insider threat programs. Leading a team of several non-traditional partners will enable the DoD to achieve bold transformational change by combining commercial off-the-shelf solutions with our capabilities and expertise in artificial intelligence, machine learning and natural language processing to automate and operate processes a secure government cloud environment.
Anyone who wants to understand the trusted workforce market should take a look at the July Bloomberg government report. Their key takeaway is that the demand for investigations will be steady and ongoing. Background investigations are required for all sensitive government positions.
200,000 ongoing investigations and 50,000 to 55,000 new background investigation requests per week will be the norm. According to the report, reducing the backlog will continue to be major focus in the short-term; and in long-term, DCSA is seeking a balanced mix of technology and human services to meet the demand and eliminate vulnerabilities. Perspecta is the best company positioned to succeed in this robust market.
Now, we also won a five-year, $162 million award from Air Force to develop and operate a modernized enterprise infrastructure for SIPRNet. SIPRNet is the secret Internet protocol router network. This is all new work for Perspecta.
As part of this effort, we'll transform and standardize the network's infrastructure to improve management operations and enhance the cyber security posture for over 400,000 SIPRNet users, client devices and servers.
Moving on, our intelligence community business remains strong. In Q1, we secured $139 million, 10-year, sole-source award for one of our core intelligence community programs. And shortly after we closed Q1, we were competitively awarded a five-year $824 million contract by the National Geospatial Intelligence Agency to perform full lifecycle systems engineering and integration work.
This is our largest program in the intelligence community and the new contract significantly expands the ceiling value and the scope.
The pipeline continues to build as we aggressively pursue new opportunities. Our three-year qualified pipeline is $77 billion, including $24 billion of proposals already submitted and awaiting decision. And this is up $17 billion from this time last year.
The pipeline is a lot more than NGEN. We're taking some big swings on programs that have the opportunity to reshape this company. Now, while we're on the topic of NGEN, there have been some positive developments since the last call. As part of the procurement process, bidders on the Service Management, Integration and Transport, or SMIT, have received evaluation notices, or ENs. Also, the Navy has indicated that they want to extend our current contract on a sole-source basis.
We view this extension as wholly positive for Perspecta. The Navy now has a schedule they can execute to and we're on track for an award in the first quarter of calendar year 2020, so that they'll extend our contract for up to seven months, which could be to December of 2020.
This is an acknowledgment of what we've been saying since investor day. NGEN-R is a very complex procurement. The underlying work is complex and it's made even more difficult by splitting the work into the end user hardware and SMIT components. We believe that complexity strengthens our incumbency advantage.
Fourth, we're excited to complete the acquisition of Knight Point Systems and welcome their employees and customers to the Perspecta team. We paid $250 million for the company which represents a single-digit multiple on for-12 months EBITDA. The deal will be immediately accretive to Perspecta.
Throughout the process, we were impressed by Knight Point's deep customer intimacy, rich legacy of innovation, patented IP and delivery of managed services programs. The acquisition further enhances our already robust and proven offerings in cloud, cyber, digital transformation, enterprise IT that modernize and transform government mission delivery.
Knight Point is a perfect acquisition for us. They're complementary to our culture and offerings, while accelerating our growth strategy. And they look a lot like us, which will ease the integration.
They have a heavy mix of fixed price contracts and an IP portfolio that differentiates them in the marketplace. They're very focused in both terms of customer footprint with franchise positions at the Department of Homeland Security and DISA, and capabilities with a strong emphasis in IP around digital transformation, cloud and cyber.
They offer patented and trademarked cloud technologies that will differentiate us in the market, including Zeus, a managed services automation tool that allows full visibility into public, private and hybrid cloud instances, and CloudSeed, a FedRAMP-authorized cybersecurity-as-a-service offering, with 24/7 SOC operations, certification and accreditation, ISSO and vulnerability management.
Now, last fall, we laid out a strategy with five strategic priorities and Knight Point significantly enhances our position in three of them – cloud and IT, cybersecurity and emerging mission challenges. As a result, we expect significant revenue synergies.
Just looking at our current pipeline, we see many large opportunities where our win probability is much higher as we integrate our solutions.
In conclusion, I hope that it's very clear that we're focused on growth. Our financial results show it and our end markets support it. Our BD engine is focused on delivering it. And we're now allocating capital to enhance it. The market appears focused on NGEN, but we've got 400 other contracts in the portfolio and, frankly, we're not waiting around for it. We're competing aggressively in the market.
Over the last year, we submitted $28 billion in proposals and it's showing up in our bookings, with a trailing 12-month book-to-bill and a ratio of 1.5 times with 60% of that being new business. With the two-year budget deal, now is the time to take advantage. We're seeing revenue synergies coming sooner than we expected and we're finding if we really go after something, we can be successful, whether it's an Army cyber command or the US Senate.
第四，我们很高兴完成对Knight Point Systems的收购，并欢迎他们的员工和客户加入Perspecta团队。我们为该公司支付了2.5亿美元，该公司在12个月的EBITDA中代表了一位数的倍数。该交易将立即增加Perspecta。
现在，去年秋天，我们制定了一项具有五个战略优先级的战略，Knight Point显着提升了我们在其中三个领域的地位 - 云和IT，网络安全和新兴任务挑战。因此，我们预计会产生显着的收入协同效应。
The Knight Point acquisition is also exciting to us as it opens up new growth areas. I'm confident that we once we win NGEN, the market valuation will rewards us and our shareholders for our ability to drive growth.
With that, let me turn the call over to John.
Knight Point的收购对我们来说也是令人兴奋的，因为它开辟了新的增长领域。 我相信，一旦我们赢得NGEN，市场估值将奖励我们和我们的股东，因为我们有能力推动增长。
Thanks, Mac. And good afternoon, everyone. I'm extremely pleased with our performance in the first quarter, making it five quarters in a row of solid execution. Once again, we delivered strong margins and cash generation which enables us to deploy capital to grow the business and enhance shareholder value. With an accretive acquisition, we are able to raise guidance and accelerate our strategy.
Turning to slide five, revenue for the quarter was $1.11 billion, which was up 7% from the first quarter of fiscal year 2019 on a pro forma basis and up 1% from the fourth quarter of fiscal year 2019.
On a year-over-year revenue growth basis, both segments performed at their highest levels as a public company and our 7% growth well exceeded our best performance to date.
The growth driver in the quarter was our Defense and Intelligence segment, which increased 13% year-over-year despite an $11 million rollover challenge from last year's contract divestiture.
Civilian and Health Care segment revenue decreased 4% year-over-year.
In total, the growth in background investigation support as well as the ramp-ups of new Department of Defense and intelligence community programs more than offset the decrease in a few civil agency contracts.
Contract mix was consistent with recent levels. As a percentage of total revenue, our contracts were 53% fixed price, 20% time and materials, and 27% cost plus.
Q1 adjusted EBITDA was $204 million, which was up 5% compared to year-ago pro forma adjusted EBITDA as margin decreased from 18.8% to 18.4%. Pro forma earnings in the first quarter of fiscal year 2019 benefited from a $24 million gain on last year's contract divestiture. Excluding the divestiture gain, adjusted EBITDA was up 19% and adjusted EBITDA margin was up 193 basis points year-over-year, driven by strong fixed-price program execution and the full run rate from merger cost synergies and operational efficiencies we achieved last year.
Also, depreciation and amortization totaled $101 million in the quarter, which was higher than its normal level. Continuing the trend from Q4 of last year, depreciation of $53 million ran hot from additional asset acquisitions and support of customer requirements.
Acquisition-related intangibles amortization, which is backed out of adjusted net income and adjusted diluted EPS, was $48 million. We expect depreciation and amortization to moderate over the coming quarters and for D&A to be only slightly higher in fiscal year 2020 than in fiscal year 2019.
Net interest expense totaled $35 million in Q1. We also incurred $21 million of transaction, integration and restructuring expense, which was down $7 million sequentially.
Q1 adjusted net income was $85 million, resulting in adjusted diluted earnings per share of $0.52 against a diluted share count of 163.3 million. Excluding the year-ago divestiture gain, adjusted diluted EPS was up 18% year-over-year on a pro forma basis.
Turning to slide six, during the first quarter, we generated $185 million of cash flow from operating activities and $161 million of adjusted free cash flow or 189% of adjusted net income.
The difference between the cash metrics is $36 million of capital expenditures which includes finance lease payments and $12 million of integration and restructuring payments. Note that we adopted ASC 842 this quarter and now use the term finance lease instead of capital lease as we used previously.
The strong cash flow in the quarter was reflected in our days sales outstanding metric of 55 days which is at the low end of our target DSO range of the mid to high 50s. Adjusted free cash flow was higher than normal, partly based on timing, with some finance lease payments flipping into Q2, no tax payments in the quarter and one fewer payroll cycle than we'll have in Q2.
During the first quarter, we paid down $22 million of debt and returned $23 million to shareholders, $8 million in quarterly dividends, and $15 million in share repurchases. We ended the quarter with $179 million of cash and $2.7 billion of debt, including $293 million of finance lease obligations.
After the close of the quarter, we amended and extended our credit agreement to provide us greater financial flexibility. We extended the maturities on a revolver, term loan A1 and term loan A2 by 15 months.
In addition, we increased our maximum total net leverage financial covenant to be more in line with our industry peers and increased our size of our revolver by $150 million to $750 million.
We also acquired all of the equity interest of Knight Point for $250 million subject to customary purchase price adjustments. Knight Point is roughly $150 million in annual revenues, with an EBIT and EBITDA margin profile similar to ours.
The acquisition should contribute roughly $100 million to FY 2020 revenue and about $0.02 to $0.03 to FY 2020 adjusted EPS. The EBITDA multiple we paid is very close to our own.
Consistent with our capital allocation model, we have built a modest amount of acquisition revenue and profit into the guidance we gave on the last call.
As Knight Point was larger than anticipated, we're able to raise fiscal year 2020 guidance as shown on slide seven. We now expect revenue for the year to be $4.4 billion to $4.5 billion, which is an increase of $50 million to the upper and lower ends of our previous guidance.
We expect adjusted diluted earnings per share of $2.08 to $2.18 which is an increase of $0.02 on the upper and increase of $0.03 on the lower end of prior guidance. There is no change to adjusted EBITDA margin, which stays at 17% to 18% and we're now trending to the middle of the range, so up compared to when we originally gave the guidance.
Finally, there is no change to adjusted free cash flow conversion guidance, which remains at 95% plus of adjusted net income.
Operator, we are now ready to take any questions.
我们还以2.5亿美元的价格收购Knight Point的所有股权，但需要进行惯常的购买价格调整。 Knight Point的年收入约为1.5亿美元，EBIT和EBITDA利润率与我们的相似。
[Operator Instructions]. And our first question today comes from Edward Caso with Wells Fargo. Please go ahead.
[操作员说明]。 我们今天的第一个问题来自爱德华卡索与富国银行。 请继续。
Hi. This is Justin Donati on for Ed. Thanks for taking my question. Good quarter here. It looks like with some of the recent contracts that you've won, you may have been able to fill in the revenue hole of NASA NEST. Can you provide any more color on that?
你好。 这是贾斯汀多纳蒂为艾德。 谢谢你提出我的问题。 这里好季度。 看起来你已经获得了一些最近的合同，你可能已经能够填补NASA NEST的收入漏洞。 你可以提供更多的颜色吗？
Sure, Justin. This is John. So, again, as we indicated, we are increasing guidance on an annual basis. We're taking it up $50 million on the lower and upper end. Clearly, NASA NEST is still a headwind that hasn't changed as we laid out in previous calls, right? It's roughly about $100 million headwind for this year. That said, again, based on the strong business development performance, the ramp ups of some new business wins that are happening, we feel overall, big picture, tailwinds will outweigh the headwinds, but NASA, obviously, still remains a headwind for us.
当然，贾斯汀。 这是约翰。 因此，正如我们所指出的那样，我们每年都在增加指导。 我们在低端和高端都拿到了5000万美元。 很明显，NASA NEST仍然是一个逆风，并没有像我们之前的电话中所说的那样改变，对吧？ 今年逆风约为1亿美元。 也就是说，再次，基于强劲的业务发展表现，正在发生的一些新业务的大幅增加，我们感觉整体，大局观，顺风将超过逆风，但显然，NASA仍然是我们的逆风。
Another way to look at it, Justin, we've talked about revenue visibility and those new wins have allowed us to increase our revenue visibility as we go through and we're kind of on plan with where we were last year.
Yeah, guidance to guidance.
Okay, thanks. And then, last quarter, you talked about some greenfield opportunities in [indiscernible], could you talk about kind of the potential timeframe for how you see that playing out? Or how long it could be until it becomes a more meaningful piece of the business?
好的谢谢。 然后，上个季度，你在[音频不清晰]中谈到了一些新的机会，你能谈谈你看到这种情况的潜在时间表吗？ 或者它可以持续多久，直到它成为一个更有意义的业务部分？
Yeah. I think we're also – that's a good question. What we also spoke of is that part of the business was somewhat under-invested as it was part of USPS. And we're reinventing in the business. We've got a new leader on, Rocky Thurston, who understands how to grow business in the civilian sector.
We've got some bids. We're focusing on some larger bids. There's some good opportunities, Department of Transportation. Certainly, tomorrow, we'll announce – in Q2 the Senate ITO contract which is about $170. So, we've won that.
And so, we see some of the pipeline. We see some opportunities in the Department of State that are kind of in the proposal phase. We see some additional work in the VA that's pending award. So, we're really focused. Department of Labor is another contract that was awarded and subsequent protest. We hope to get that cleared up in the next couple of weeks.
So, we don't control when these things are awarded, but we certainly see, in Q2, hopefully some of these things will come to fruition. Transportation, I think, certainly, Department of Labor, get that cleared up.
But further out, you see in proposal, the FDIC deal, some Department of State. So, I think we're really starting to see the back end of Q3, Q4 kind of a consistent flow of deals because we're writing the proposals now and really focused on that.
We don't do much of Department of Justice at this point. So, we see that as an opportunity. Certainly, several parts of Department of Treasury. So, it's a bit spotty at Q1, Q2, but we see a more steady flow, typically common for Department of State, Department of Justice kind of in the back end of Q3 and Q4. Is that helpful?
是啊。我想我们也是 - 这是一个很好的问题。我们还谈到的是，由于它是USPS的一部分，部分业务有些投资不足。我们正在重塑业务。我们有一位新的领导者，Rocky Thurston，他了解如何在民用领域发展业务。
Yeah, very helpful. And then, if I could just speak one last one in here, what are your expectations for pro forma leverage with Knight Point?
是的，非常有帮助。 然后，如果我能在这里说最后一个，那么你对Knight Point的形式杠杆的期望是什么？
Sure, Justin. This is John. So, again, we ended the quarter, net leverage was roughly 3.0. With the acquisition of Knight Point, we'd be roughly net leverage per covenant agreement right around 3.4 and we'll continue to drive that down as we proceed through the year. Very comfortable where we're at.
当然，贾斯汀。 这是约翰。 因此，我们再次结束本季度，净杠杆率约为3.0。 通过收购Knight Point，我们大约在3.4左右的每个契约协议的净杠杆率，我们将继续推动这一点，因为我们继续这一年。 在我们所处的地方非常舒适。
Great, thank you.
And our next question comes from Joseph DeNardi with Stifel. Please go ahead.
我们的下一个问题来自Joseph DeNardi和Stifel。 请继续。
Hey, good evening, guys. Mac, appreciate your enthusiasm in your prepared remarks. You spoke bullishly about the bookings activity that you see. And the book to bill the last 12 months has been strong. You talked about the pipeline and the big swings you've got out there. Is it safe to say that if you can retain NGEN and hit on one or two of the bigger opportunities you're pursuing that there's upside to the revenue CAGR guidance that you guys have provided?
嘿，晚上好，伙计们。 Mac，在你准备好的评论中感谢你的热情。 你对你看到的预订活动表示乐观。 过去12个月的账单一直很强劲。 你谈到了管道和你在那里发生的巨大波动。 可以肯定地说，如果你能够保留NGEN并找到你所追求的一个或两个更大的机会，那么你们提供的收入CAGR指导的好处是什么？
Yeah. First of all, Joe, thanks. And there's a lot to be enthusiastic about. And I think if you look at that, there's a lot to be awarded. We've got $24 billion that's in evaluation. I think we'll see maybe some those larger ones awarded maybe before NGEN. And so, yeah, that – and a lot of that, we don't have in the forecast quite frankly. So, we see a couple of large deals in NGEN, absolutely. We see some great growth opportunities in the back end of our – our fiscal year 2020, certainly into 2021. So, we've got to bring these contracts online. We don't want to get ahead of our skis. Some of them are army cyber are coming online the way we hoped. We've got to learn to do a better job in some cases of making sure we leverage all of the potential ceiling of contracts. We're getting better at that. But, yes, we see some of the large contracts, Joe, and we see NGEN. Absolutely, in the back end of our fiscal 2020, we would see some really, really strong growth.
是啊。 首先，乔，谢谢。 还有很多值得热心的事情。 我想如果你看一下，那就有很多东西要奖励。 我们已经获得了240亿美元的评估费用。 我想我们可能会看到一些可能在NGEN之前获得的大奖。 所以，是的，而且很多，我们在预测中并没有坦率地说。 所以，我们绝对会在NGEN中看到几笔大宗交易。 我们在2020年财政年度的后端看到了一些巨大的增长机会，当然是在2021年。因此，我们必须将这些合同纳入网上。 我们不想超越滑雪板。 其中一些是军队网络以我们希望的方式上线。 在确保我们充分利用合同的所有潜在上限的某些情况下，我们必须学会做得更好。 我们正在变得更好。 但是，是的，我们看到一些大合同，乔，我们看到NGEN。 当然，在2020财年的后期，我们会看到一些真正强劲的增长。
Got it. And then, Mac, just on the NGEN process, you sounded more positive about it now than maybe you have. Is there something kind of in the process, what you've heard in terms of feedback from the customer that makes you feel better about your standing there, maybe help us understand that a little bit more?
得到它了。 然后，Mac，就在NGEN流程上，你现在对它的看法比你可能更积极。 在这个过程中有什么样的东西，你从客户的反馈中听到的是什么让你对你站在那里感觉更好，或许可以帮助我们理解更多一点？
Well, Joe, I think –I've always felt positive about it. We've always felt very positive. It's a complex contract. I think where we are in the process now is the – no, so I've gotten any ex parte feedback. This is a very tightly controlled processes, as you know. You get a lot of ENs or questions on the technical, the cost and we'll go through the process. We've always been positive about it. We feel very good about how Knight Point can help given what they do in the world of Agile DevOps and certainly looking at cloud as a service which we've wrote about being able to augment our solution with that if given the opportunity. But, no, we all feel positive about it and we'll go through the process. They've given an extension. We've talked about from mid [ph] 2020, could be to December. I'm not sure it's going to go that far. I think the team [ph] is working really hard. They're do a really good job from what we've seen of trying to evaluate this contract which is finally stood up after almost two decades. It's a complicated program. It's a complicated technical program. It's a complicated business program with a lot of buyers across the Navy looking at buying network services, laptops and the odd. So, I hope I'm in an even keel, but very positive all along. I think part of my enthusiasm is certainly that the focus on the other 85% is business. NGEN is what it is and we feel confident about our success. I'm very enthusiastic about the other 400 we've got and the 85% of the business. And it is growing and we're focused on taking big swings that will change this company. So, I've always been enthusiastic and passionate about this business, probably not more so than now.
好吧，乔，我想 - 我一直对此感到乐观。我们总是感到非常积极。这是一份复杂的合同。我想现在我们在这个过程中的位置是 - 不，所以我得到了任何单方面的反馈。如您所知，这是一个非常严格控制的流程。您会收到很多关于技术，成本的EN或问题，我们将完成整个过程。我们一直都很积极。我们非常了解Knight Point如何帮助他们在敏捷DevOps世界中所做的事情，并且肯定将云视为一种服务，我们已经写过如果有机会就可以用它来增强我们的解决方案。但是，不，我们都对此感到乐观，我们将完成整个过程。他们给了延期。我们从2020年中期开始谈到，可能会到12月。我不确定它会走多远。我认为团队[ph]工作非常努力。他们从我们所看到的试图评估这份合同的过程中做得非常好，这项合同在经过近二十年的努力后终于得以实现。这是一个复杂的计划。这是一个复杂的技术计划。这是一个复杂的商业计划，海军的很多买家正在寻找购买网络服务，笔记本电脑和奇怪的商品。所以，我希望我一直都很平稳，但一直非常积极。我认为我的一部分热情当然是关注其他85％的业务。 NGEN就是这样，我们对我们的成功充满信心。我非常热衷于我们拥有的其他400个以及85％的业务。而且它正在增长，我们专注于采取会改变这家公司的重大变化。所以，我一直对这项业务充满热情和热情，可能不会比现在更多。
Very helpful. Thanks, Mac.
[Operator Instructions]. And the next question comes from Gautam Khanna with Cowen. Please go ahead.
[操作员说明]。 下一个问题来自Gautam Khanna和Cowen。 请继续。
Yeah. Thank you, guys. Couple of questions. First, I was wondering, on the guidance raise of $50 million on sales, did you guys say the deal is going to add $100 million for current fiscal year revenue? So, is there something in the core business that's eroded? Or what's the signal there?
是啊。 感谢你们。 几个问题。 首先，我想知道，根据销售额5000万美元的指导性增加，你们有没有说这笔交易将为当前财年的收入增加1亿美元？ 那么，核心业务中有什么东西被侵蚀了吗？ 或者那里的信号是什么？
No. Hey, Gautam. It's John. So, as you know, M&A was always part of our capital allocation plan, right? So, from the get-go, the original guidance we had built-in a modest amount, about $50 million into our guidance. Okay? So, as I mentioned in my prepared remarks, Knight Point is roughly $150 million. On an annual basis, we'll see about a hundred-ish million. So, so we have raised the guidance in line with that $50 million on a lower and upper range. So, again, feel real good about the performance. We're now guiding 3% to 5%. We're breaking [ph] 4% and we feel really good again about the pipelines, as Mac talked about. That's the answer there.
不，嘿，高塔姆。 这是约翰。 所以，如您所知，并购始终是我们资本分配计划的一部分，对吗？ 因此，从一开始，我们已经建立了适量的原始指导，大约5000万美元用于我们的指导。 好的？ 因此，正如我在准备好的评论中所提到的，Knight Point大约是1.5亿美元。 每年，我们将看到大约一百万。 所以，我们已经在上下范围内提出了5000万美元的指导。 所以，再一次，对性能感觉非常好。 我们现在指导3％到5％。 正如Mac谈到的那样，我们正在打破并且我们对管道感觉非常好。 那是答案。
And likewise, for the $0.02 to $0.03?
Yeah, correct. Yeah.
You're raising it by the corresponding amount.
To follow-up on the NASA NEST comment, question, was there erosion sequentially in the quarter? And if so, how much and how much still can drop off sequentially?
We're still performing on NASA NEST roughly through the August timeframe. Obviously, we're still in discussions with both NASA and the new awardee. So, we will see the start of that a bit in Q2, but then more pronounced, obviously, in Q3. And as we've talked about, roughly about $100 million on an annual basis, but very low margin.
我们仍然在8月的时间框架内大致在NASA NEST上演出。 显然，我们仍在与美国宇航局和新的获奖者进行讨论。 因此，我们将在Q2中看到这一点的开始，但在Q3中显然更加明显。 正如我们所谈到的那样，每年约为1亿美元，但利润率非常低。
So, it didn't actually sequentially decline in the quarter just reported?
That's correct. Not in Q1.
The earlier prepared remarks on the SMIT evaluation notices, what is the significance of that? What does that mean?
Yeah. This is Mac. It's kind of standard fare in government proposals. They used to call them Q&A. Now, they're calling them evaluation notices because it's in evaluation. And they vary. I don't think the number of – that you get is significant, whether it's split between technical, volume, management volume and a call sign. These are clarifications. And the government says, we've got a question about, what did you mean in your transition plan here. We've run our evaluation model and there's some disconnect between this contract line item and what you said at the bottom. So, they're really kind of clarifications and notices of making sure they can understand what you're saying in your proposal, your technical proposal, to your management proposal, to your cost proposal, that it all ties together clearly, so they can do an evaluation. You shouldn't read anything into it. Gautam, it's typical government evaluation process.
是啊。 这是Mac。 这是政府提案中的标准票价。 他们过去称他们为问答。 现在，他们称他们为评估通知，因为它正在评估中。 它们各不相同。 我不认为你获得的数量是多少，无论是技术，数量，管理量和呼号之间的分配。 这些都是澄清。 政府说，我们有一个问题，你在这里的过渡计划中意味着什么。 我们运行了我们的评估模型，这个合同项目与您在底部所说的内容之间存在一些脱节。 因此，它们确实是一种澄清和通知，以确保他们能够理解您在提案，技术提案，管理建议，成本提案中所说的内容，这些都清楚地联系在一起，因此他们可以 做一个评估。 你不应该读任何东西。 高塔姆，这是典型的政府评估过程。
Got it. It's just moving, I guess.
It's moving along. That's a good way – it is moving along, which is great. It is moving along. It is moving along.
它正在前进。 这是一个好方法 - 它正在前进，这很棒。 它正在前进。 它正在前进。
Excellent. And then, in the quarter, the margins came in pretty good. Could you talk a little bit about – was there any – I think you mentioned an award fee. What was the size of the contract adjustment in the quarter [indiscernible] catch up or what have you if there was one?
优秀。 然后，在本季度，利润率相当不错。 你能谈一点 - 有没有 - 我想你提到了奖励费。 本季度合同调整的大小[音频不清晰]赶上了什么，或者如果有的话，你有什么？
So, there wasn't. But let me give you a little bit more color. So, first off, very, very pleased with the continued strong execution and performance in both the segments. So, as I had mentioned in my prepared remarks, we have seen a little bit of increase in depreciation resulting from some customer required procurement of assets. So, that was roughly, if you think about the quarter, that was roughly about $13 million. So, I would look at the quarter running more like 17.3%. But as I've indicated, good performance. And as I've stated in my prepared remarks, now trending more toward the middle of the range on adjusted EBITDA. So, we feel good about where we are.
所以，没有。 但是，让我给你一点颜色。 因此，首先，非常非常满意两个细分市场的持续强劲执行和表现。 因此，正如我在准备好的评论中所提到的那样，我们看到一些客户需要采购资产导致折旧增加一点点。 所以，粗略地说，如果你考虑一下这个季度，那大约是1300万美元。 所以，我会看看季度运行更像是17.3％。 但正如我所说，表现良好。 正如我在准备好的评论中所说的那样，现在调整后的EBITDA趋势更接近范围的中间位置。 所以，我们对自己所处的位置感到满意。
Got it. So, it did not relate to a one-off contract adjustment?
It was just heightened depreciation in the quarter?
And just last one, you've already started off the third calendar quarter with strong bookings, it looks like. Can you speak to anything that – can you quantify what you anticipate is yet to be adjudicated in the September quarter in terms of size, stuff that – couple of billion or how should we think about the potential?
就在最后一个，你已经开始了第三季度的预订，看起来很棒。 你能否谈谈任何一件事 - 你能否量化你预期的9月季度在规模，数十亿或者我们应该如何看待这种潜力方面尚未被裁定的事情？
So, it's just kind of in rough numbers. We've got a total of $24 billion in evaluation. There's some large ones in there we think because we don't control that, Gautam, as you well know. But there's some large – we expect the DISA [indiscernible2to be adjudicated we think, GSMO we think, those are contracts – I'm not going to give you specific number. They have a B behind them. And I think as we talked about, we certainly expect to see – hopefully, the Department of Labor, which is a contract that we were awarded that was protested and that could pull here. We think we'll see the VA contract clear which is pretty sizeable. The Department of Transportation, it was about $700 million. We expect to see that clear. So, again, we don't control that. We're coming into the end of the government fiscal year. So, certainly, they're in evaluation now. We should see some of those clear as we get through the back end of the fourth quarter of the government fiscal year. Hard to protect. Hard to predict. But that's kind of what we see.
所以，它只是粗略的数字。我们的评估总额达240亿美元。我们认为在那里有一些大的，因为我们不能控制，Gautam，你知道。但是有一些大的 - 我们期望DISA [indiscernible2被裁定我们认为，GSMO我们认为，那些是合同 - 我不打算给你具体数字。他们背后有一个B.而且我认为，正如我们所谈到的那样，我们当然希望看到 - 希望是劳工部，这是我们被授予的一份合同，这项合同得到了抗议，可以拉到这里。我们认为我们会看到VA合约清楚，这是相当大的。交通部，大约7亿美元。我们希望看到这一点。所以，我们再次控制不了。我们即将结束政府财政年度。所以，当然，他们现在正在评估中。当我们通过政府财政年度第四季度的后期时，我们应该看到一些明确的。很难保护。很难预测。但这就是我们所看到的。
And just so I'm clear, of all of those mentioned, the labor department one is one that you were awarded that's being protested. The other ones are just out. They haven't yet been adjudicated?
而且我很清楚，在提到的所有这些中，劳动部门就是一个你被授予抗议的部门。 其他的只是出局。 他们还没有被裁定？
Okay. All right. Thank you very much. I appreciate it.
好的。 行。 非常感谢你。 我很感激。
As I'm looking at the queue, it looks like that there are no other questions. So, I think we'll bring this call to a close. Obviously, as is our practice, if you have follow-up questions, please feel free to give me a shout. But, Cole, we want to thank you for your assistance and thank everybody for their interest and perspective.
当我看着队列时，看起来没有其他问题。 所以，我想我们会结束这个电话会议。 显然，按照我们的惯例，如果您有后续问题，请随时给我一个喊叫。 但是，科尔，我们要感谢你的帮助，感谢大家的兴趣和观点。
Thank you, sir. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect your lines at this time and have a wonderful day.
谢谢你，先生。 会议现已结束。 感谢您参加今天的演讲。 您现在可以断开线路并度过美好的一天。
- PRSP 电话会议
- PRSP 财务报告
- 老虎证券开户教程 美股8折佣金， 1股阿里巴巴香港股票(价值: 200港币+) , 还会邀请你进付费交流群
- 雪盈证券开户教程 开户后 最高可领取1066港币。美股佣金最低0.002美元/股，港股小额免佣，打新手续费全免
- 富途牛牛证券开户教程 开户即可领取1股汇丰，入金达到2万港币即可领取1股腾讯；新股一键认购，最高支持10倍杠杆融资，免新股认购手续费，暗盘交易免佣；
- 华盛通开证券户教程 开通美股或者港股， 享受现金200元,美股8折奖励。
- 微牛证券开户教程 开通后 享有200元现金奖励
- 必贝证券开户教程 开通后 享有280元现金奖励
- 玖富证券开户教程 开通后 最低入金1W港币可以领218元红包
- e投睿开户教程 开通后 可获得25美金奖励
- 友信证券开户教程 注册随机领3股，注册后可随机抽取苹果、腾讯、阿里、京东等热门股票