News Release
Quarter Highlights
-
$2.2 billion in new wins, up 16 percent year over year. -
Backlog of
$20.5 billion , up 22 percent year over year. -
FY14 EPS guidance in the range of
$2.50 to $2.60 , excluding costs associated with acquisitions. -
Reported EPS of
$0.70 . -
Acquisition of
URS Corporation currently expected to close in October.
Third Quarter | Year to Date | ||||||||||||
($ in millions, except EPS) | Q3 FY13 | Q3 FY14 |
YOY % |
Q3 YTD |
Q3 YTD |
YOY % |
|||||||
Gross Revenue | $2,067 | $1,968 | (4.8%) | $6,074 | $5,794 | (4.6%) | |||||||
Net Service Revenue1 | $1,236 | $1,205 | (2.5%) | $3,733 | $3,536 | (5.3%) | |||||||
Operating Income | $112 | $92 | (18.2%) | $254 | $250 | (1.5%) | |||||||
Net Income2 | $71 | $69 | (2.1%) | $163 | $166 | 1.9% | |||||||
Earnings per Share2 | $0.70 | $0.70 | (0.0%) | $1.58 | $1.69 | 7.0% | |||||||
Operating Cash Flow | $96 | $80 | (17.1%) | $248 | $186 | (25.3%) | |||||||
Free Cash Flow3 | $84 | $63 | (24.4%) | $211 | $136 | (35.6%) | |||||||
Note: All comparisons are year over year unless noted otherwise.
“New wins of
Burke continued, “In mid-July, we announced the execution of a
definitive agreement to acquire
“Year to date, we generated free cash flow of
New Wins and Backlog
New wins in the quarter of
Business Segments
In addition to providing consolidated financial results,
Professional Technical Services
The PTS segment delivers planning, consulting, architecture and engineering design, as well as program and construction management services to institutional, commercial and public-sector clients worldwide.
Revenue of
The MSS segment provides program and facilities management and maintenance, training, logistics, consulting, technical assistance and systems integration services, primarily for agencies of the U.S. government.
Revenue declined 21.3 percent to $174 million compared to the same
period last year, and net service revenue declined 30.8 percent to
$93 million. Declines in revenue and NSR were primarily due to the
migration of operations away from
Tax Rate and Costs Associated With Acquisitions
The company’s third-quarter effective tax rate was 16.5 percent,
inclusive of a non-controlling interest deduction. Its tax rate
benefited from an increase in tax deductions related to U.S. operations.
The lower-than-expected tax rate contributed
Cash Flow
Cash flow from operations for the quarter was
Share Repurchase
There were no share repurchases made in the quarter.
Balance Sheet
As of
Fiscal 2014 Outlook
The company expects that full-year EPS will be in the range of
Acquisition of URS
On
As previously announced,
Investor Call
1AECOM’s revenue includes a significant amount of pass-through costs and, therefore, the company believes that revenue, net of other direct costs (net service revenue, or NSR), which is a non-GAAP measure, also provides a meaningful perspective on its business results. See the accompanying reconciliation of revenue, net of other direct costs, to revenue, the closest comparable GAAP measure.
2Attributable to
3Free cash flow is defined as cash flow from operations less capital expenditures and is a non-GAAP measure. See the accompanying reconciliation of free cash flow from operations, to cash flow from operations, the closest comparable GAAP measure.
4Book-to-burn ratio is defined as the amount of gross revenue wins divided by gross revenue recognized during the period.
About
Ranked as the #1 engineering design firm by revenue in Engineering
News-Record magazine’s annual industry rankings, AECOM is a premier,
fully integrated infrastructure and support services firm, with a broad
range of markets, including transportation, facilities, environmental,
energy, water and government. With approximately 45,000 employees —
including architects, engineers, designers, planners, scientists and
management and construction services professionals — serving clients in
more than 150 countries around the world, AECOM is a leader in all of
the key markets that it serves. AECOM provides a blend of global reach,
local knowledge, innovation and technical excellence in delivering
solutions that create, enhance and sustain the world's built, natural
and social environments. A Fortune 500 company, AECOM serves
clients in more than 150 countries and had revenue of
Forward-Looking Statements: All statements in this press release other than statements of historical fact are “forward looking statements” for purposes of federal and state securities laws, including any projections of earnings, revenue, profit margins, cash flows, free cash flows, targeted earnings per share, share count or other financial items; any statements of the plans, strategies and objectives for future operations; any statements regarding the proposed acquisitions of URS, including without limitation statements relating to the expected benefits of the proposed transaction and the expected timetable for completing the proposed transaction and any statements regarding future economic conditions or performance. Although we believe that the expectations reflected in our forward looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward looking statements.
Important factors that could cause our actual results, performance and
achievements, or industry results to differ materially from estimates or
projections contained in forward-looking statements include:
uncertainties related to global economic conditions and funding, audits,
modifications and termination of long-term government contracts; losses
under fixed-price contracts; limited control over operations run through
our joint venture entities; misconduct by our employees or consultants
or our failure to comply with laws or regulations; failure to
successfully execute our merger and acquisition strategy; the failure to
retain and recruit key technical and management personnel; unexpected
adjustments and cancellations related to our backlog: risks associated
with the proposed transaction, including the ability to consummate the
merger and the timing of the closing of the merger, the failure to
obtain the necessary debt financing arrangements set forth in the
commitment letter received in connection with the merger, the interest
rate on any borrowings incurred in connection with the proposed
transaction, the impact of the indebtedness incurred to finance the
proposed transaction, the ability to successfully integrate our
operations and employees, the ability to realize anticipated benefits
and synergies of the proposed transaction, the potential impact of
announcement of the transaction or consummation of the transaction on
relationships, including with employees, customers and competitors, the
outcome of any legal proceedings that have been or may be instituted
against URS and/or
This press release contains financial information calculated other than in accordance with U.S. generally accepted accounting principles (“GAAP”). In particular, the company believes that non-GAAP financial measures such as revenue, net of other direct costs (NSR), and free cash flow also provide a meaningful perspective on its business results as the company utilizes this information to evaluate and manage the business. This non-GAAP disclosure has limitations as an analytical tool, should not be viewed as a substitute for financial information determined in accordance with GAAP, and should not be considered in isolation or as a substitute for analysis of the company’s results as reported under GAAP, nor is it necessarily comparable to non-GAAP performance measures that may be presented by other companies.
Additional Information About the Proposed Transaction and Where to Find It
In connection with the proposed transaction,
This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended.
AECOM Technology Corporation Consolidated Statements of Income (unaudited - in thousands, except per share data) |
|||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
June 30, 2013 |
June 30, 2014 |
% Change |
June 30, 2013 |
June 30, 2014 |
% Change |
||||||||||||||||
Revenue | $ | 2,067,490 | $ | 1,968,155 | (4.8)% | $ | 6,074,408 | $ | 5,794,254 | (4.6)% | |||||||||||
Other direct costs | 831,491 | 763,453 | (8.2)% | 2,341,552 | 2,257,862 | (3.6)% | |||||||||||||||
Revenue, net of other direct costs (non-GAAP) | 1,235,999 | 1,204,702 | (2.5)% | 3,732,856 | 3,536,392 | (5.3)% | |||||||||||||||
Cost of revenue, net of other direct costs | 1,104,185 | 1,096,162 | (0.7)% | 3,423,081 | 3,262,247 | (4.7)% | |||||||||||||||
Gross profit | 131,814 | 108,540 | (17.7)% | 309,775 | 274,145 | (11.5)% | |||||||||||||||
Equity in earnings of joint ventures | 4,094 | 5,896 | 44.0 % | 17,855 | 49,415 | 176.8 % | |||||||||||||||
General and administrative expenses | (24,010 | ) | (22,904 | ) | (4.6)% | (73,365 | ) | (73,198 | ) | (0.2)% | |||||||||||
Income from operations | 111,898 | 91,532 | (18.2)% | 254,265 | 250,362 | (1.5)% | |||||||||||||||
Other income | 1,215 | 1,034 | (14.9)% | 2,042 | 856 | (58.1)% | |||||||||||||||
Interest expense | (11,719 | ) | (9,797 | ) | (16.4)% | (34,495 | ) | (30,722 | ) | (10.9)% | |||||||||||
Income before income tax expense | 101,394 | 82,769 | (18.4)% | 221,812 | 220,496 | (0.6)% | |||||||||||||||
Income tax expense | 30,179 | 13,677 | (54.7)% | 56,843 | 52,367 | (7.9)% | |||||||||||||||
Net income | 71,215 | 69,092 | (3.0)% | 164,969 | 168,129 | 1.9 % | |||||||||||||||
Non-controlling interests in income of | |||||||||||||||||||||
consolidated subsidiaries, net of tax | (460 | ) | 148 | (132.2)% | (2,294 | ) | (2,301 | ) | 0.3 % | ||||||||||||
Net income attributable to AECOM | $ | 70,755 | $ | 69,240 | (2.1)% | $ | 162,675 | $ | 165,828 | 1.9 % | |||||||||||
Net income attributable to AECOM per share: | |||||||||||||||||||||
Basic | $ | 0.71 | $ | 0.71 | 0.0 % | $ | 1.60 | $ | 1.71 | 6.9 % | |||||||||||
Diluted | $ | 0.70 | $ | 0.70 | 0.0 % | $ | 1.58 | $ | 1.69 | 7.0 % | |||||||||||
Weighted average shares outstanding: | |||||||||||||||||||||
Basic | 99,257 | 97,483 | (1.8)% | 101,482 | 96,933 | (4.5)% | |||||||||||||||
Diluted | 100,761 | 98,956 | (1.8)% | 102,706 | 98,295 | (4.3)% | |||||||||||||||
AECOM Technology Corporation Balance Sheet and Cash Flow Information (unaudited - in thousands) |
|||||||||||||||
September 30 |
June 30, |
||||||||||||||
Balance Sheet Information: | |||||||||||||||
Total cash and cash equivalents | $ | 600,677 | $ | 510,147 | |||||||||||
Accounts receivable, net | 2,342,262 | 2,431,517 | |||||||||||||
Working capital | 1,078,053 | 1,067,950 | |||||||||||||
Working capital, net of cash and cash equivalents | 477,376 | 557,803 | |||||||||||||
Total debt | 1,173,325 | 1,043,425 | |||||||||||||
Total assets | 5,665,623 | 5,753,742 | |||||||||||||
Total AECOM stockholders’ equity | 2,021,443 | 2,197,512 | |||||||||||||
Three months ended | Nine months ended | ||||||||||||||
June 30, 2013 |
June 30, 2014 |
June 30, 2013 |
June 30, 2014 |
||||||||||||
Cash Flow Information: | |||||||||||||||
Net cash provided by operating activities | $ | 96,117 | $ | 79,713 | $ | 248,451 | $ | 185,709 | |||||||
Capital expenditures | (12,435 | ) | (16,411 | ) | (37,067 | ) | (49,578 | ) | |||||||
Free cash flow | $ | 83,682 | $ | 63,302 | $ | 211,384 | $ | 136,131 | |||||||
AECOM TECHNOLOGY CORPORATION Reportable Segments (unaudited - in thousands) |
|||||||||||||||||
Reportable Segments: |
Professional Technical Services |
Management Support Services |
Corporate | Total | |||||||||||||
Three Months Ended June 30, 2014: | |||||||||||||||||
Revenue | $ | 1,794,612 | $ | 173,543 | $ |
— |
$ | 1,968,155 | |||||||||
Other direct costs | 682,604 | 80,849 | — | 763,453 | |||||||||||||
Revenue, net of other direct costs (non-GAAP) | 1,112,008 | 92,694 | — | 1,204,702 | |||||||||||||
Cost of revenue, net of other direct costs | 1,012,510 | 83,652 | — | 1,096,162 | |||||||||||||
Gross profit | 99,498 | 9,042 | — | 108,540 | |||||||||||||
Equity in earnings of joint ventures | 2,075 | 3,821 | — | 5,896 | |||||||||||||
General and administrative expenses |
— |
— |
(22,904 | ) | (22,904 | ) | |||||||||||
Operating income (loss) | $ | 101,573 | $ | 12,863 | $ | (22,904 | ) | $ | 91,532 | ||||||||
Gross profit as a % of revenue | 5.5 | % | 5.2 | % | — | 5.5 | % | ||||||||||
Gross profit as a % of revenue, net of other direct costs (non-GAAP) |
8.9 |
% | 9.8 | % | — | 9.0 | % | ||||||||||
Three Months Ended June 30, 2013: | |||||||||||||||||
Revenue | $ | 1,847,089 | $ | 220,401 | $ | — | $ | 2,067,490 | |||||||||
Other direct costs | 745,057 | 86,434 | — | 831,491 | |||||||||||||
Revenue, net of other direct costs (non-GAAP) | 1,102,032 | 133,967 | — | 1,235,999 | |||||||||||||
Cost of revenue, net of other direct costs | 982,208 | 121,977 | — | 1,104,185 | |||||||||||||
Gross profit | 119,824 | 11,990 | — | 131,814 | |||||||||||||
Equity in earnings of joint ventures | 993 | 3,101 | — | 4,094 | |||||||||||||
General and administrative expenses |
— |
— |
(24,010 | ) | (24,010 | ) | |||||||||||
Operating income (loss) | $ | 120,817 | $ | 15,091 | $ | (24,010 | ) | $ | 111,898 | ||||||||
Gross profit as a % of revenue | 6.5 | % | 5.4 | % | — | 6.4 | % | ||||||||||
Gross profit as a % of revenue, net of other direct costs (non-GAAP) | 10.9 | % | 8.9 | % | — | 10.7 | % | ||||||||||
AECOM TECHNOLOGY CORPORATION Reportable Segments (unaudited - in thousands) |
|||||||||||||||||
Reportable Segments: |
Professional Technical Services |
Management Support Services |
Corporate | Total | |||||||||||||
Nine Months Ended June 30, 2014: | |||||||||||||||||
Revenue | $ | 5,248,387 | $ | 545,867 | $ | — | $ | 5,794,254 | |||||||||
Other direct costs | 2,006,647 | 251,215 |
— |
2,257,862 | |||||||||||||
Revenue, net of other direct costs (non-GAAP) | 3,241,740 | 294,652 | — | 3,536,392 | |||||||||||||
Cost of revenue, net of other direct costs | 2,996,996 | 265,251 | — | 3,262,247 | |||||||||||||
Gross profit | 244,744 | 29,401 | — | 274,145 | |||||||||||||
Equity in earnings of joint ventures | 36,488 | 12,927 | — | 49,415 | |||||||||||||
General and administrative expenses |
— |
— |
(73,198 | ) | (73,198 | ) | |||||||||||
Operating income (loss) | $ | 281,232 | $ | 42,328 | $ | (73,198 | ) | $ | 250,362 | ||||||||
Gross profit as a % of revenue | 4.7 | % | 5.4 | % | — | 4.7 | % | ||||||||||
Gross profit as a % of revenue, net of other direct costs (non-GAAP) | 7.5 | % | 10.0 | % | — | 7.8 | % | ||||||||||
Contracted backlog | $ | 8,877,862 | $ | 679,638 | $ | — | $ | 9,557,500 | |||||||||
Awarded backlog | 9,351,624 | 1,578,052 | — | 10,929,676 | |||||||||||||
Total backlog | $ | 18,229,486 | $ | 2,257,690 | $ | — | $ | 20,487,176 | |||||||||
Nine Months Ended June 30, 2013: | |||||||||||||||||
Revenue | $ | 5,384,199 | $ | 690,209 | $ | — | $ | 6,074,408 | |||||||||
Other direct costs | 2,078,089 | 263,463 | — | 2,341,552 | |||||||||||||
Revenue, net of other direct costs (non-GAAP) | 3,306,110 | 426,746 | — | 3,732,856 | |||||||||||||
Cost of revenue, net of other direct costs | 3,024,846 | 398,235 | — | 3,423,081 | |||||||||||||
Gross profit | 281,264 | 28,511 | — | 309,775 | |||||||||||||
Equity in earnings of joint ventures | 10,305 | 7,550 | — | 17,855 | |||||||||||||
General and administrative expenses |
— |
— |
(73,365 | ) | (73,365 | ) | |||||||||||
Operating income (loss) | $ | 291,569 | $ | 36,061 | $ | (73,365 | ) | $ | 254,265 | ||||||||
Gross profit as a % of revenue | 5.2 | % | 4.1 | % | — | 5.1 | % | ||||||||||
Gross profit as a % of revenue, net of other direct costs (non-GAAP) | 8.5 | % | 6.7 | % | — | 8.3 | % | ||||||||||
Contracted backlog | $ | 8,147,121 | $ | 491,530 | $ | — | $ | 8,638,651 | |||||||||
Awarded backlog | 7,138,389 | 1,014,374 | — | 8,152,763 | |||||||||||||
Total backlog | $ | 15,285,510 | $ | 1,505,904 | $ | — | $ | 16,791,414 | |||||||||
AECOM Technology Corporation Regulation G Information ($ in millions) |
|||||||||||||||||
Reconciliation of Revenue to Revenue, Net of Other Direct Costs |
|||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
June 30, 2013 | March 31, 2014 | June 30, 2014 | June 30, 2013 | June 30, 2014 | |||||||||||||
Consolidated |
|||||||||||||||||
Revenue | $ | 2,067.5 | $ | 1,872.2 | $ | 1,968.2 | $ | 6,074.4 | $ | 5,794.3 | |||||||
Less: Other direct costs | 831.5 | 692.0 | 763.5 | 2,341.5 | 2,257.9 | ||||||||||||
Revenue, net of other direct costs | $ | 1,236.0 | $ | 1,180.2 | $ | 1,204.7 | $ | 3,732.9 | $ | 3,536.4 | |||||||
PTS Segment |
|||||||||||||||||
Revenue | $ | 1,847.1 | $ | 1,683.6 | $ | 1,794.6 | $ | 5,384.2 | $ | 5,248.4 | |||||||
Less: Other direct costs | 745.1 | 595.5 | 682.6 | 2,078.1 | 2,006.7 | ||||||||||||
Revenue, net of other direct costs | $ | 1,102.0 | $ | 1,088.1 | $ | 1,112.0 | $ | 3,306.1 | $ | 3,241.7 | |||||||
MSS Segment |
|||||||||||||||||
Revenue | $ | 220.4 | $ | 188.6 | $ | 173.6 | $ | 690.2 | $ | 545.9 | |||||||
Less: Other direct costs | 86.4 | 96.5 | 80.9 | 263.4 | 251.2 | ||||||||||||
Revenue, net of other direct costs | $ | 134.0 | $ | 92.1 | $ | 92.7 | $ | 426.8 | $ | 294.7 | |||||||
Reconciliation of EBITDA Before Goodwill Impairment to Net Income Attributable to AECOM |
|||||||||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||||||||
Sep 30, 2012 |
Dec 31, 2012 |
Mar 31, 2013 |
Jun 30, 2013 |
Sep 30, 2013 |
Dec 31, 2013 |
Mar 31, 2014 |
Jun 30, 2014 |
||||||||||||||||||||||||||
EBITDA before goodwill impairment | $ | 163.9 | $ | 84.7 | $ | 102.5 | $ | 135.1 | $ | 144.5 | $ | 111.5 | $ | 89.0 | $ | 115.9 | |||||||||||||||||
Less: Goodwill impairment | (336.0 | ) |
— |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||||
EBITDA | (172.1 | ) | 84.7 | 102.5 | 135.1 | 144.5 | 111.5 | 89.0 | 115.9 | ||||||||||||||||||||||||
Less: Interest expense1 | (10.4 | ) | (10.4 | ) | (11.3 | ) | (11.0 | ) | (9.6 | ) | (9.8 | ) | (10.0 | ) | (9.2 | ) | |||||||||||||||||
Add: Interest income2 | 0.4 | 0.4 | 0.5 | 0.4 | 0.4 | 0.4 | 0.3 | 0.6 | |||||||||||||||||||||||||
Less: Depreciation and amortization3 | (26.1 | ) | (23.9 | ) | (23.9 | ) | (23.6 | ) | (23.0 | ) | (22.2 | ) | (23.9 | ) | (24.4 | ) | |||||||||||||||||
(Loss) income attributable to AECOM before income taxes | (208.2 | ) | 50.8 | 67.8 | 100.9 | 112.3 | 79.9 | 55.4 | 82.9 | ||||||||||||||||||||||||
Less: Income tax expense | 16.7 | 12.7 | 14.0 | 30.1 | 35.8 | 23.5 | 15.2 | 13.7 | |||||||||||||||||||||||||
Net (loss) income attributable to AECOM | $ | (224.9 | ) | $ | 38.1 | $ | 53.8 | $ | 70.8 | $ | 76.5 | $ | 56.4 | $ | 40.2 | $ | 69.2 |
_____________
1 Excludes related amortization
2
Included in other income
3 Includes the amount
for non-controlling interests in consolidated subsidiaries
AECOM Technology Corporation |
||||||||||
Reconciliation of Total Debt to Net Debt |
||||||||||
Balances at: | ||||||||||
June 30, 2013 | March 31, 2014 | June 30, 2014 | ||||||||
Short-term debt | $ | 12.0 | $ | 26.1 | $ | 27.9 | ||||
Current portion of long-term debt | 1.5 | 56.2 | 38.5 | |||||||
Long-term debt | 1,135.2 | 1,008.8 | 977.0 | |||||||
Total debt | 1,148.7 | 1,091.1 | 1,043.4 | |||||||
Less: Total cash and cash equivalents | 507.6 | 502.5 | 510.1 | |||||||
Net debt | $ | 641.1 | $ | 588.6 | $ | 533.3 | ||||
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow |
||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||
Jun 30, 2013 | Mar 31, 2014 | Jun 30, 2014 | Jun 30, 2013 | Jun 30, 2014 | ||||||||||||||||||
Net cash provided by / (used in) operating activities | $ | 96.1 | $ | (31.4 | ) | $ | 79.7 | $ | 248.4 | $ | 185.7 | |||||||||||
Capital expenditures | (12.4 | ) | (12.4 | ) | (16.4 | ) | (37.0 | ) | (49.6 | ) | ||||||||||||
Free cash flow | $ | 83.7 | $ | (43.8 | ) | $ | 63.3 | $ | 211.4 | $ | 136.1 | |||||||||||
Fiscal Years Ended Sep 30, | ||||||||||||||||||||||
2011 | 2012 | 2013 | ||||||||||||||||||||
Net cash provided by operating activities | $ | 132.0 | $ | 433.4 | $ | 408.6 | ||||||||||||||||
Capital expenditures | (78.0 | ) | (62.9 | ) | (52.1 | ) | ||||||||||||||||
Settlement of deferred compensation plan liability | 90.0 |
— |
— |
|||||||||||||||||||
Excess tax benefit from share-based payment (associated with DCP termination) | 58.0 |
— |
— |
|||||||||||||||||||
Free cash flow | $ | 202.0 | $ | 370.5 | $ | 356.5 | ||||||||||||||||
Reconciliation of Net Income Attributable
to AECOM per share – Diluted |
|||||
Three Months Ended | |||||
Jun 30, 2014 | |||||
Net income attributable to AECOM per share – diluted | $ | 0.70 | |||
Lower than expected tax rate | (0.10 | ) | |||
Acquisition related and internal due diligence costs | 0.05 | ||||
Adjusted net income attributable to AECOM per share – diluted | $ | 0.65 | |||
***
NR 14-0801
Source:
AECOM Technology Corporation
Media:
Paul Gennaro,
212-973-3167
SVP & Chief Communications Officer
Paul.Gennaro@aecom.com
or
Investors:
Paul
Cyril, 213-593-8322
SVP, Investor Relations
Paul.Cyril@aecom.com