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Engility Reports Third Quarter 2013 Results



  Engility Reports Third Quarter 2013 Results

  * Third quarter revenue of $339 million and adjusted diluted EPS of $0.80
  * Adjusted operating margin increases to 8.9% from 8.6% in the prior quarter
  * Record Q3 2013 cash flow from operations of $75 million and $110 million
    year-to-date
  * DSO decreases by 6 days to 77 days
  * Updates 2013 outlook

Business Wire

CHANTILLY, Va. -- November 12, 2013

Engility Holdings, Inc. (NYSE: EGL) today announced financial results for the
third quarter ended September 27, 2013.

Third Quarter 2013 Results

Total revenue for the third quarter of 2013 was $339 million. GAAP and
adjusted operating income for the third quarter was $30 million, or an
operating margin of 8.9%. Net income attributable to Engility was $12 million,
or $0.68 per diluted share. Adjusted net income was $14 million, or $0.80 per
diluted share. Our adjusted net income excludes the $4 million write-off of
bank debt fees associated with the refinancing of our senior secured credit
facility, which we previously disclosed and is recorded in our third quarter
2013 interest expense. Information about the use of our non-GAAP financial
information is provided below under “Non-GAAP Measures”.

“Our third quarter profitability and cash flow were very strong and we saw
significant improvement in our DSO from last quarter. We increased our
operating margin to 8.9%, generated record quarterly cash flow of $75 million
and reported a six day decrease in our DSO,” said Tony Smeraglinolo, President
and CEO of Engility. “We continue to benefit from our differentiated low-cost
business model and from the process improvements we recently implemented to
increase our cash velocity. We are controlling what we can control and,
overall, believe we are executing well in a difficult environment.”

“We expect our business will continue to be impacted by lower contract funding
levels and award delays as a result of Federal budget uncertainty and by
reduced in-theater work. However, during the third quarter, we won two major
IDIQ awards, as well as a number of important single-award contracts. In
addition, we received a considerable amount of funding from some of our
existing customers at the beginning of the fourth quarter. The enhanced
business development team we put into place at the beginning of this year has
increased our pipeline and our competitive position in the market, which
positions us for long-term growth.”

Key Performance Indicators

  * Funded backlog at the end of the 2013 third quarter was $574 million.
  * Contract funded orders in the third quarter of 2013 were $263 million,
    representing a book-to-bill ratio of 0.8. On a trailing-twelve month
    basis, our contract funded orders were approximately $1.3 billion,
    representing a book-to-bill ratio of 0.9.
  * Days sales outstanding, net of advanced payments, at the end of the 2013
    third quarter was 77 days.

Cash Flow and Credit Facility

  * Cash flow from operations for the third quarter of 2013 was $75 million,
    and our net debt to trailing 12-month adjusted EBITDA leverage ratio was
    approximately 1.5 times.
  * On August 9, 2013, we replaced our previous senior secured credit facility
    with a new $450 million senior secured credit facility. This new facility
    lowered our borrowing costs by almost 50%. At the end of the 2013 third
    quarter, we had net debt of $206 million, compared to $275 million at the
    end of the second quarter of 2013.

Significant Third Quarter 2013 Awards

  * Awarded a prime position on two major Navy IDIQ vehicles with a combined
    ceiling value of approximately $1.1 billion. We now have won more than $15
    billion worth of IDIQ ceiling value since we established Engility a little
    over one year ago.
  * Awarded six task orders totaling more than $28 million under the African
    Contingency Operations Training and Assistance (ACOTA) contract, a program
    managed by the Bureau of African Affairs in the U.S. Department of State.
    Under these task orders, Engility personnel will provide an array of
    training to forces in Djibouti, Nigeria, Malawi, Benin, Rwanda and
    Tanzania.
  * An $18.9 million single-award contract by the U.S. Army’s Natick Soldier
    Research, Development and Engineering Center (NSRDEC). Under this 18-month
    contract for new work, Engility will provide our integration services
    expertise along with hardware integration kits to support the U.S. Marine
    Corp’s requirements for Integration Technology (IT) communication
    interface hubs that enable high speed data distribution and interface
    connectivity between communication electronics maintenance (CEM) systems,
    worldwide IT Infrastructure and network data links.
  * A $13.5 million task order by the U.S. Agency for International
    Development (USAID) to support clean energy initiatives in Ukraine. Under
    this single-award cost-plus fixed fee contract for new work, Engility will
    support USAID and Ukrainian efforts to improve the clean energy
    legislative and regulatory enabling environment, promote investments in
    clean energy, build capacity in the Ukrainian private and public sector to
    carry clean energy activities in the long-run, and enhance the capacity of
    the Ukrainian government to plan and implement low emissions development
    strategies.

2013 Outlook

We are updating the fiscal year 2013 financial guidance we issued on August
12, 2013 based on our financial results for the first nine months of 2013 and
our outlook for the remainder of 2013. Previously, we indicated our financial
results may be near the low-end of our 2013 guidance ranges. We now are
narrowing our 2013 revenue and earnings per share guidance ranges. For 2013,
we expect our 2013 revenue results to be slightly below our prior guidance
range due to lower contract funding levels and award delays as a result of
Federal budget uncertainty. We expect our earnings per share results to be
in-line with the low-end of our prior guidance range. In addition, we expect
our operating cash flow to exceed our prior range due to the process
improvements we recently implemented to increase our cash velocity. The table
below summarizes our fiscal year 2013 guidance.

                                                           
                               Current 2013 Outlook       Low-End of Prior
                                                          2013 Outlook
Revenue                        $1.39-1.41 billion         $1.45 billion
Adjusted Diluted EPS           $3.20-3.30                 $3.25
^(1) ^(2)
GAAP Diluted EPS ^(1)          $2.96-3.06                 $3.01
Operating cash flow            $110 million to $130       $80 million
(range)                        million

^(1) 2013 GAAP and adjusted diluted EPS guidance assumes weighted-average
outstanding shares of approximately 17.7 million and a full year effective tax
rate of 39.0%.

^(2) Our adjusted diluted EPS guidance excludes $3.2 million of legal and
settlement costs incurred in the second quarter of 2013 and a $3.6 million
write-off of bank debt fees in the third quarter of 2013 associated with the
refinancing of our senior secured credit facility.

Non-GAAP Measures

The tables under “Engility Holdings, Inc. Reconciliation of Non-GAAP Measures”
present Adjusted Operating Income, Adjusted Operating Margin, Earnings before
Interest, Taxes, Depreciation, and Amortization (EBITDA), Adjusted EBITDA,
EBITDA Margin, Adjusted EBITDA Margin, Adjusted Net Income, Adjusted Diluted
EPS and Adjusted Diluted EPS Guidance, reconciled to their most directly
comparable GAAP measure. These financial measures are calculated and presented
on the basis of methodologies other than in accordance with U.S. generally
accepted accounting principles (“Non-GAAP Measures”). Engility has provided
these Non-GAAP Measures to adjust for the impact of (i)
transaction-related-spin-off costs for the Company’s July 2012 spin-off from
L-3 Communications Holdings, Inc. (ii) legal and settlement costs and (iii) in
the case of our Adjusted Diluted EPS Guidance, the write-off of bank debt fees
associated with the refinancing of our senior secured credit facility. These
items have been adjusted because they are not considered core to the Company’s
business or otherwise not considered operational or because these charges are
non-cash or non-recurring. The Company presents these Non-GAAP Measures
because management believes that they are meaningful to understanding
Engility’s performance during the periods presented and the Company’s ongoing
business. Non-GAAP Measures are not prepared in accordance with GAAP and
therefore are not necessarily comparable to the financial results of other
companies. These Non-GAAP Measures should be considered a supplement to, not a
substitute for, or superior to, the corresponding financial measures
calculated in accordance with GAAP.

CONFERENCE CALL INFORMATION

Engility will host a conference call at 5 P.M. ET on November 12, 2013, to
discuss the financial results for the third quarter of 2013.

Listeners may access a webcast of the live conference call from the Investor
Relations section of the company's website at http://www.EngilityCorp.com.
Listeners may also access a slide presentation on the website which summarizes
our 2013 third quarter results. Listeners should go to the website at least 15
minutes before the live event to download and install any necessary audio
software.

Listeners also may participate in the conference call by dialing (866)
515-2914 (domestic) or (617) 399-5128 (international) and entering pass code
46072979.

A replay will be available on the company's website approximately two hours
after the conference call and continuing for one year. A telephonic replay
also will be available through November 19, 2013 at (888) 286-8010 (domestic)
or (617) 801-6888 (international) and entering pass code 70913874.

ABOUT ENGILITY CORPORATION

Engility is a pure-play government services contractor providing highly
skilled personnel wherever, whenever they are needed in a cost-effective
manner. Headquartered in Chantilly, Virginia, Engility is a leading provider
of specialized technical consulting, program and business support services,
engineering and technology lifecycle support, information technology
modernization and sustainment, supply chain services and logistics management,
and training and education for the U.S. Government. Engility has approximately
7,000 employees worldwide and achieved revenue of $1.7 billion in 2012. To
learn more about Engility, please visit www.engilitycorp.com.

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995, including statements
regarding Engility’s future prospects, projected financial results and
business plans. Words such as “may,” “will,” “should,” “likely,”
“anticipates,” “expects,” “intends,” “plans,” “projects,” “believes,”
“estimates” and similar expressions are also used to identify these
forward-looking statements. These statements are based on the current beliefs
and expectations of Engility’s management and are subject to significant risks
and uncertainties. Actual results may differ from those set forth in the
forward-looking statements. Factors that could cause Engility’s actual results
to differ materially from those described in the forward-looking statements
can be found under the heading “Risk Factors” included in our Annual Report on
Form 10-K for the year ended December 31, 2012, and our more recent periodic
reports, which have been filed with the Securities and Exchange Commission
(SEC) and are available on the investor relations section of Engility’s
website (http://www.engilitycorp.com) and on the SEC’s website
(www.sec.gov). Forward-looking statements are made only as of the date hereof,
and we undertake no obligation to update or revise the forward-looking
statements, whether as a result of new information, future events or
otherwise, except as required by law. In addition, historical information
should not be considered as an indicator of future performance.

                                                            
ENGILITY HOLDINGS, INC.
UNAUDITED CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
                                                                                                         
                 Three Months Ended                          Nine Months Ended
                 September     September                     September       September      
                 27,           28,                           27,             28,
                 2013          2012           Change         2013            2012            Change
Revenue          $ 339,302     $ 404,496      $ (65,194  )   $ 1,078,309     $ 1,159,625     $ (81,316  )
Revenue from
former             —             4,888          (4,888   )     —               100,035         (100,035 )
affiliated
entities
Total revenue      339,302       409,384        (70,082  )     1,078,309       1,259,660       (181,351 )
                                                                                                         
Costs and
expenses
Cost of            289,280       352,063        (62,783  )     932,874         981,710         (48,836  )
revenue
Cost of
revenue from
former             —             4,888          (4,888   )     —               100,035         (100,035 )
affiliated
entities
Total cost of      289,280       356,951        (67,671  )     932,874         1,081,745       (148,871 )
revenue
Selling,
general and        19,901        38,696         (18,795  )     56,134          107,589         (51,455  )
administrative
expenses
Goodwill
impairment         —             426,436        (426,436 )     —               426,436         (426,436 )
charge
                                                                                                         
Total costs        309,181       822,083        (512,902 )     989,008         1,615,770       (626,762 )
and expenses
                                                                                                         
Operating          30,121        (412,699 )     442,820        89,301          (356,110  )     445,411
income (loss)
Interest           7,558         4,833          2,725          19,099          5,027           14,072
expense, net
Other income       193           (7       )     200            266             (52       )     318
(expense), net
                                                                                                         
Income (loss)
from
continuing         22,756        (417,539 )     440,295        70,468          (361,189  )     431,657
operations
before income
taxes
Provision for      8,699         1,378          7,321          27,344          24,997          2,347
income taxes
                                                                                                         
Income (loss)
from               14,057        (418,917 )     432,974        43,124          (386,186  )     429,310
continuing
operations
Loss from
discontinued
operations         —             (469     )     469            —               (1,017    )     1,017
before income
taxes
Benefit for        —             (161     )     161            —               (391      )     391
income taxes
                                                                                                         
Loss from
discontinued       —             (308     )     308            —               (626      )     626
operations
                                                                                                         
Net income       $ 14,057      $ (419,225 )   $ 433,282      $ 43,124        $ (386,812  )   $ 429,936
(loss)
Less: Net
income
attributable       2,049         1,080          969            4,276           4,510           (234     )
to
noncontrolling
interest
                                                                                                         
Net income
(loss)           $ 12,008      $ (420,305 )   $ 432,313      $ 38,848        $ (391,322  )   $ 430,170
attributable
to Engility
                                                                                                         
Earnings
(loss) per
share
allocable to
Engility
Holdings, Inc.
common
shareholders –
Basic
Net income
(loss) per
share from
continuing       $ 0.71        $ (25.78   )   $ 26.49        $ 2.30          $ (24.15    )   $ 26.45
operations
less
noncontrolling
interest
Net income
(loss) per
share from         —             (0.02    )     0.02           —               (0.04     )     0.04
discontinued
operations
Net income
(loss) per
share            $ 0.71        $ (25.80   )   $ 26.51        $ 2.30          $ (24.19    )   $ 26.49
attributable
to Engility
Earnings
(loss) per
share
allocable to
Engility
Holdings, Inc.
common
shareholders –
Diluted
Net income
(loss) per
share from
continuing       $ 0.68        $ (25.78   )   $ 26.46        $ 2.21          $ (24.15    )   $ 26.36
operations
less
noncontrolling
interest
Net income
(loss) per
share from         —             (0.02    )     0.02           —               (0.04     )     0.04
discontinued
operations
Net income
(loss) per
share            $ 0.68        $ (25.80   )   $ 26.48        $ 2.21          $ (24.19    )   $ 26.40
attributable
to Engility
Weighted
average number
of shares
outstanding
Basic              16,915        16,291                        16,855          16,176
Diluted            17,770        16,291                        17,592          16,176

                                                               
ENGILITY HOLDINGS, INC.
UNAUDITED CONSOLIDATED BALANCE SHEETS
(in thousands)
                                                                              
                                              As of             As of
                                              September 27,     December 31,
                                              2013              2012
Assets:
Current assets:
Cash and cash equivalents                     $   24,323        $  27,021
Receivables, net                                  316,488          366,236
Other current assets                              28,216           34,832
Total current assets                              369,027          428,089
Property, plant and equipment, net                10,898           11,941
Goodwill                                          477,604          477,604
Identifiable intangible assets, net               94,386           100,929
Other assets                                      7,352            8,887
Total assets                                  $   959,267       $  1,027,450
                                                                              
Liabilities and Equity:
Current liabilities:
Current portion of long-term debt             $   7,500         $  50,250
Accounts payable, trade                           23,492           20,725
Accrued employment costs                          62,602           63,278
Accrued expenses                                  59,275           76,955
Advance payments and billings in excess of        26,238           24,855
costs incurred
Deferred income taxes, current and income         8,089            10,607
taxes payable
Other current liabilities                         17,055           19,311
Total current liabilities                         204,251          265,981
Long-term debt                                    222,500          284,750
Income tax payable                                80,093           68,725
Other liabilities                                 17,473           19,683
Total liabilities                                 524,317          639,139
Equity:
Preferred stock, par value $0.01 per share,
25,000 shares authorized, none issued or          —                —
outstanding as of September 27, 2013 and
December 31, 2012
Common stock, par value $0.01 per share,
175,000 shares authorized, 17,221 shares
issued and outstanding as of September 27,        172              168
2013 and 16,703 shares issued and
outstanding as of December 31, 2012
Additional paid-in capital                        762,256          755,638
Accumulated deficit                               (341,590  )      (380,438  )
Noncontrolling interest                           14,112           12,943
Total equity                                      434,950          388,311
Total liabilities and equity                  $   959,267       $  1,027,450

                                            
ENGILITY HOLDINGS, INC.
UNAUDITED CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS
(in thousands)
                                                                              
                                             Nine Months Ended
                                             September 27,     September 28,
                                             2013              2012
Operating activities:
Net income (loss)                            $   43,124        $   (386,812  )
Less: loss from discontinued operations,         —                 (626      )
net of tax
Income (loss) from continuing operations         43,124            (386,186  )
Goodwill impairment charge                       —                 426,436
Share-based compensation                         7,282             4,552
Depreciation and amortization                    9,055             12,365
Amortization of bank debt fees                   5,880             645
Deferred income taxes                            (2,727    )       (20,854   )
Changes in operating assets and
liabilities:
Receivables                                      49,748            25,389
Other assets                                     4,145             (13,362   )
Accounts payable, trade                          2,767             (21,832   )
Accrued employment costs                         (676      )       6,224
Accrued expenses                                 (17,680   )       17,032
Advance payments and billings in excess of       1,383             (6,727    )
costs incurred
Other liabilities                                7,215             297
                                                                              
Net cash provided by operating activities        109,516           43,979
from continuing operations
Investing activities:
Capital expenditures                             (1,470    )       (1,640    )
Proceeds from sale of property, plant, and       —                 604
equipment
                                                                              
Net cash used in investing activities from       (1,470    )       (1,036    )
continuing operations
Financing activities:
Borrowings from term loan                        200,000           335,000
Repayments of term loan                          (335,000  )       —
Borrowings from revolving credit facility        167,500           12,190
Repayments of revolving credit facility          (137,500  )       (12,190   )
Debt issuance costs                              (2,493    )       (11,005   )
Net transfers to prior parent                    —                 (25,633   )
Dividend paid to prior parent                    —                 (335,000  )
Proceeds from share-based payment                893               484
arrangements
Payment of employee withholding taxes on         (1,037    )       —
restricted stock units
Distributions to non-controlling interest        (3,107    )       (1,402    )
member
Net cash used in financing activities from       (110,744  )       (37,556   )
continuing operations
Discontinued Operations:
Net cash provided by operating activities        —                 25,952
Net cash used in investing activities            —                 —
Net cash used in financing activities            —                 (25,952   )
                                                                              
Net cash used in discontinued operations         —                 —
                                                                              
Net change in cash and cash equivalents          (2,698    )       5,387
Cash and cash equivalents, beginning of          27,021            13,688
period
                                                                              
Cash and cash equivalents, end of period     $   24,323        $   19,075

 
ENGILITY HOLDINGS, INC.
RECONCILIATION OF NON-GAAP MEASURES
 
The following tables set forth a reconciliation of each of these Non-GAAP
Measures to the most directly comparable GAAP measure for the periods
presented (in thousands, except for ratio and per share amounts).

                                                            
Adjusted Operating Income and Adjusted Operating Margin
(in thousands)
                                                                                       
                               Three Months Ended            Nine Months Ended
                               September     September       September     September
                               27,           28,             27,           28,
                               2013          2012            2013          2012
Operating income               $  30,121     $ (412,699 )    $  89,301     $ (356,110 )
Adjustments
Goodwill impairment charge        —            426,436          —            426,436
Transaction-related-spin-off      —            4,000            —            17,300
costs
Realignment costs                 —            7,560            —            7,560
Legal and settlement costs        —            5,278            3,228        5,278
                                                                                       
Total adjustments                 —            443,274          3,228        456,574
                                                                                       
Adjusted operating income      $  30,121     $ 30,575        $  92,529     $ 100,464
                                                                                       
Operating margin                  8.9    %     (100.8   )%      8.3    %     (28.3    )%
Adjusted operating margin         8.9    %     7.5      %       8.6    %     8.0      %

                                                   
ENGILITY HOLDINGS, INC.
Adjusted Earnings Per Share
(in thousands, except per share data)
                                                                              
                    Three Months Ended              Nine Months Ended
                    September      September        September     September
                    27,            28,              27,           28,
                    2013           2012             2013          2012
Adjusted            $  30,121      $  30,575        $  92,529     $ 100,464
operating income
Other items
Interest expense,      7,558          4,833            19,099       5,027
net
Other income, net      193            (7        )      266          (52      )
                                                                              
Adjustment to
operating income
Bank fees
previously
capitalized and        3,648          —                3,648        —
included in
interest expense
                                                                              
Adjusted income
from continuing        26,404         25,735           77,344       95,385
operations before
income tax
Provision for          10,086         10,088           30,003       36,100
income taxes
                                                                              
Adjusted income
from continuing        16,318         15,647           47,341       59,285
operations
Loss from
discontinued           —              (308      )      —            (626     )
operations
Net income
attributable to        2,049          1,080            4,276        4,510
non-controlling
interest
                                                                              
Adjusted net
income
attributable to     $  14,269      $  14,259        $  43,065     $ 54,149
Engility
Holdings, Inc.
                                                                              
GAAP earnings per
share
Net income (loss)
attributable to     $  12,008      $  (420,305  )   $  38,848     $ (391,322 )
Engility
Holdings, Inc.
Earnings (loss)
per share
attributable to
Engility
Holdings, Inc.
common
shareholders
Basic               $  0.71        $  (25.80    )   $  2.30       $ (24.19   )
Diluted             $  0.68        $  (25.80    )   $  2.21       $ (24.19   )
Weighted average
common shares
outstanding
Basic                  16,915         16,291           16,855       16,176
Diluted                17,770         16,291           17,592       16,176
                                                                              
Adjusted earnings
per share
attributable to
Engility
Holdings, Inc.
common
shareholders
Basic               $  0.84        $  0.88          $  2.56       $ 3.35
Diluted             $  0.80        $  0.83          $  2.45       $ 3.16
Weighted average
number of shares
outstanding
Basic                  16,915         16,291           16,855       16,176
Diluted                17,770         17,117           17,592       17,117

                                                            
ENGILITY HOLDINGS, INC.
Earnings before interest, taxes, depreciation, and amortization (EBITDA) and Adjusted
EBITDA
(in thousands)
                                                                                       
                               Three Months Ended            Nine Months Ended
                               September     September       September     September
                               27,           28,             27,           28,
                               2013          2012            2013          2012
Income (loss) from             $  14,057     $ (418,917 )    $ 43,124      $ (386,186 )
continuing operations
Interest, taxes,
depreciation, and
amortization
Interest expense                  7,558        4,833           19,099        5,027
Provision for income taxes        8,699        1,378           27,344        24,997
Depreciation and                  1,426        4,030           9,055         12,365
amortization
                                                                                       
EBITDA                         $  31,740     $ (408,676 )    $ 98,622      $ (343,797 )
                                                                                       
Adjustments to EBITDA
Goodwill impairment charge        —            426,436         —             426,436
Transaction-related-spin-off      —            4,000           —             17,300
costs
Realignment costs                 —            7,560           —             7,560
Legal and settlement costs        —            5,278           3,228         5,278
                                                                                       
Total adjustments                 —            443,274         3,228         456,574
                                                                                       
Adjusted EBITDA                $  31,740     $ 34,598        $ 101,850     $ 112,777
                                                                                       
EBITDA Margin                     9.4    %     (99.8    )%     9.1     %     (27.3    )%
Adjusted EBITDA Margin            9.4    %     8.5      %      9.4     %     9.0      %

                                                                                          
ENGILITY HOLDINGS, INC.
Revision to Costs and Expenses
(in thousands)
                                                                                              
                 Three Month Ended                          Nine Months Ended
                 September 28, 2012                         September 28, 2012
                 Reported      Adjustment     Revised       Reported        Adjustment     Revised
Costs and
expenses
Cost of          $ 354,147     $  (2,084  )   $ 352,063     $ 988,487       $  (6,777  )   $ 981,710
revenue
Cost of
revenue from       4,888          —             4,888         100,035          —             100,035
affiliated
entities
Total cost of      359,035        (2,084  )     356,951       1,088,522        (6,777  )     1,081,745
revenue
Selling,
general and        36,612         2,084         38,696        100,812          6,777         107,589
administrative
expenses
Goodwill
impairment         426,436        —             426,436       426,436          —             426,436
charge
Total costs        822,083        —             822,083       1,615,770        —             1,615,770
and expenses
                                                                                              
Impact of the
revision on      $ —           $  —           $ —           $ —             $  —           $ —
cost and
expenses
                                                                                              

Note – As noted in our Form 10-K for the year ended December 31, 2012,
management determined that we improperly classified certain amounts in cost of
revenue that were selling, general and administrative in nature. We have
assessed the impact of the adjustments on the statements of operations and
determined that the period was not materially misstated. This change did not
impact the balance sheet or statements of cash flows. The three and nine month
periods ended September 28, 2012 have been revised to reflect this correction.

                                                         
ENGILITY HOLDINGS, INC.
Estimated Adjusted Diluted EPS Guidance
For the Year Ending December 31, 2013
                                                           
                                              Low-End     High-End
Estimated GAAP Diluted EPS                    $  2.96     $  3.06
Known adjustments, net of tax
Legal and settlement costs                       0.11        0.11
Bank debt fees previously capitalized            0.13        0.13
                                                              
                                                 0.24        0.24
                                                              
Estimated Adjusted Diluted EPS                $  3.20     $  3.30

Contact:

Corporate Communications and Media:
Engility Holdings, Inc.
Eric Ruff, 703-375-6463
eric.ruff@engilitycorp.com
or
Investor Relations:
Engility Holdings, Inc.
Dave Spille, 703-375-4221
dave.spille@engilitycorp.com
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