January 28, 2015
Equity Research
Government Services: Market Space Firming
Sector Rating to Market Weight from Underweight
Fundamentals Stabilizing, But Valuation Already Reflects
Sector Rating: Government Services, Market Weight
Company Name
Government Services
Booz Allen Hamilton Holding
Corporation (BAH)
CACI International Inc. (CACI)
ICF International, Inc. (ICFI)
Leidos Holdings, Inc. (LDOS)
ManTech International Corporation
(MANT)
NCI, Inc. (NCIT)
Science Applications International
Corp. (SAIC)
Price
Rating 01/27/15
FY EPS
2014E
2015E
FY P/E
2014
2015
2
$29.62
$1.63 A
$1.61
18.2x
18.4x
2
2
2
2
86.84
38.77
42.44
31.52
5.39 A
2.25
2.36 A
1.28
5.35
2.70
2.30
1.50
16.1x
17.2x
18.0x
24.6x
16.2x
14.4x
18.5x
21.0x
2V
2V
12.30
50.50
0.67
2.27 A
0.60
2.85
18.4x
22.3x
20.5x
17.7x
Source: Company data and Wells Fargo Securities, LLC estimates 1= Outperform, 2 = Market Perform, 3 = Underperform, V = Volatile,
= Company is on the Priority Stock List NA = Not Available, NC = No Change, NE = No Estimate, NM = Not Meaningful
• Government Services (i.e., BAH, CACI, ICFI, LDOS, MANT, NCIT,
SAIC) Fundamentals Stabilizing, But Valuation May Be Ahead of
Improvements, In Our View; Sector Rating Upped to Market Weight.
We upgraded our government services sector weighting to Market Weight from
Underweight. We also upgraded, to Market Perform from Underperform, our
investment ratings on the shares of Booz Allen (BAH), CACI (CACI), Leidos
(LDOS), ManTech (MANT), and NCI (NCIT). This reflects an improving pace of
award decisions as clients gain comfort in at least a stable federal funding
environment. This suggests to us a reduced risk of downward EPS revisions. Of
this group, we believe that BAH has the most extended valuation, but is also the
best-managed/positioned name in the sector.
• Sector Fundamentals Stabilizing as Book-to-Bill Improvements
Should Lead to a Positive Turn in Revenue Growth. We see a
stable/slightly up government funding environment (even with full
Sequestration) the next few years, and more important, a recent return to
decision making on awards by government agencies. We therefore see at least a
neutral market backdrop, although pricing pressure continues, especially for work
with the Department of Defense. We expect to see a divergence in company
performance driven by positioning (i.e., for cybersecurity, etc.) and new business
capabilities/success (as growth will be dependent on contract takeaways).
• Valuation--Free Cash Flow Yield Still Appears Reasonable, Other
Approaches Extended. We examined ten-plus years of historical valuation
trends looking at P/E, EV/EBITDA, and Free Cash Flow Yield. P/E and
EV/EBITDA are trading near levels when the sector’s yr/yr organic growth rate
was 10+%. Currently, organic revenue growth remains negative, suggesting that
investors expect a notable recovery in financial performance. Free cash flow yield
for the services pure plays, always ones to produce solid and consistent cash flow,
are in the low teens, and a notable premium to both S&P500 and A/D Primes.
Please see page 81 for rating definitions, important disclosures
and required analyst certifications
All estimates/forecasts are as of 01/28/15 unless otherwise stated.
Wells Fargo Securities, LLC does and seeks to do business with companies
covered in its research reports. As a result, investors should be aware that
the firm may have a conflict of interest that could affect the objectivity of the
report and investors should consider this report as only a single factor in
making their investment decision.
ITSERV012615-150546
Ed Caso, CFA, Senior Analyst
( 4 43 ) 2 6 3- 6 5 2 4
e dw a rd. ca s o@ we ll sf argo. co m
Richard Eskelsen, CFA, Associate Analyst
( 41 0 ) 6 25 - 6 38 1
ri c h a r d. e sk e ls en @ we ll s f a rg o . c o m
Tyler Scott, Associate Analyst
( 4 43 ) 2 6 3 - 6 5 4 0
tyl e r. scot t@w el l sfa rgo .com
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
IT & BPO Services
TABLE OF CONTENTS
Investment Summary.....................................................................................................................................................................................3
Share Price Performance................................................................................................................................................................................5
Funding Outlook ............................................................................................................................................................................................ 7
Award Activity ..............................................................................................................................................................................................10
Book-to-Bill ................................................................................................................................................................................................. 12
Takeaways and Pricing................................................................................................................................................................................. 13
Operating Margin ........................................................................................................................................................................................ 14
M&A .............................................................................................................................................................................................................. 15
September Quarter Recap............................................................................................................................................................................ 16
December Quarter Preview.......................................................................................................................................................................... 17
Valuation ...................................................................................................................................................................................................... 18
Company Tear-Sheets, Annual/Quarterly Income Statement, and Operating Cash Flow Analysis
Booz Allen (BAH) ................................................................................................................................................................................23
CACI International (CACI) .................................................................................................................................................................27
ICF International (ICFI) ..................................................................................................................................................................... 31
Leidos (LDOS) .....................................................................................................................................................................................34
ManTech (MANT) ...............................................................................................................................................................................39
NCI (NCIT) ..........................................................................................................................................................................................43
SAIC (SAIC) .........................................................................................................................................................................................46
The Primes
General Dynamics (GD) ......................................................................................................................................................................50
Lockheed Martin (LMT) .....................................................................................................................................................................52
Margin Analysis...................................................................................................................................................................................54
“The Numbers”
Revenue Analysis.................................................................................................................................................................................56
Employee Metrics................................................................................................................................................................................59
Margin Analysis...................................................................................................................................................................................62
Pricing Mix ..........................................................................................................................................................................................65
Client Mix ........................................................................................................................................................................................... 68
Backlog Analysis..................................................................................................................................................................................73
Other Metrics (Pipeline, Percentage Prime, And Days Sales Outstanding) .....................................................................................78
2
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
Government Services: Market Space Firming
Investment Summary - Upgraded Sector Rating to Market Weight from Underweight
Favorable Turn in Book-to-Bill and Revenue Growth, Although Latter Still Negative. We moved
our sector rating to Market Weight from Underweight given (1) an improving book-to-bill ratio (on a trailing12-month basis), (2) a turn in the organic growth rate, although it is still expected to remain negative yr/yr for
at least the next several quarters, and (3) an expectation of a return to industry consolidation, with the pure
plays both potential buyers and sellers. Other than our recent fine-tuning (up) of CACI’s FY2015 EPS estimate,
our earnings estimates for the sector are unchanged since the last earnings reports. Our relatively more
positive view is tempered by the fact that valuation (P/E and EV/EBITDA) has rebounded to levels that are
consistent with much stronger revenue growth and somewhat higher operating margin. Therefore, if there is
not a recovery in dollars of EBITDA (from other than acquisitions) in the next few quarters, the sector’s share
prices may again come under pressure. (We take a detailed look at long-term valuation trends further on in
this report.) We also note that most government service providers (and other industry sources) remain
cautious on the outlook. Of course, that would not be unusual as industry participants usually lag investor
sentiment both on the way down and the way up. Current estimates and valuation are summarized in Exhibit 1.
Exhibit 1. Selected Operating and Valuation Highlights.
($ in billions, except EPS)
Mkt.
Cap.
(Basic)
Enter.
Value (EV)
(Basic)
(2%)
(5%)
(10%)
(13%)
$4.4
2.1
0.7
0.8
$5.7
3.2
1.1
0.9
9%
34%
21%
(59%)
(8%)
(2%)
0.3
3.1
1.2
56.72
12.30
50.50
49%
96%
48%
(2%)
(6%)
(5%)
3.9
0.2
2.4
2029.56
17%
(3%)
Price
52 wk
Low
High
Rating
1/27/15
Booz Allen Hamilton
CACI International
Engility Holdings, Inc.
ICF International, Inc.
2
2
NR
2
$29.62
86.84
41.62
38.77
72%
30%
38%
28%
KEYW Holding Corp.
Leidos Holdings, Inc.
ManTech International
NR
2
2
9.51
42.44
31.52
Maximus Inc.
NCI, Inc.
SAIC, Inc.
NR
2
2
S&P500
Rev. Growth
CY 14E CY 15E
Debt /
TTM
EBITDA
Op. Margin
CY14E CY 15E
P/E
CY 14E CY 15E
EV/
EBITDA
CY14E
CY 15E
EV/
Revenue
Y ield
Div.
CY 14E CY 15E
FCF
TTM
Yield
Ticker
(6%)
(4%)
(0%)
11%
1%
0%
13%
18%
8.4%
6.9%
7.1%
6.9%
8.4%
7.3%
7.2%
7.9%
G
G
G
G
3.2x
3.7
3.5
1.3
19x
18
16
17
20x
16
16
14
11.2x
10.3
8.9
8.9
11.2x
9.8
7.6
6.4
1.1x
0.9
0.8
0.8
1.1x
0.9
0.7
0.7
8%
13%
21%
5%
1.5%
NA
NA
NA
BAH
CACI
EGL
ICFI
0.4
4.0
1.1
(2%)
(12%)
(22%)
14%
NA
0%
(2.8%)
6.7%
5.3%
2.8%
7.3%
5.3%
G
P
G
5.1
2.9
0.0
NM
18
25
NM
16
21
25.2
9.7
8.8
13.1
9.2
8.8
1.5
0.8
0.6
1.3
0.8
0.6
4%
11%
14%
NA
3.0%
2.7%
KEY W
LDOS
MANT
3.8
0.1
2.6
24%
(5%)
(5%)
14%
(2%)
NA
13.1%
4.5%
6.2%
NA
4.8%
6.3%
G
G
G
0.0
0.0
1.9
26
18
18
23
21
16
13.2
7.0
10.1
12.0
6.8
9.8
2.1
0.4
0.7
1.9
0.5
0.7
2%
13%
12%
0.3%
NA
2.2%
MMS
NCIT
SAIC
SPX
Rating Legend: 1-Outperform, 2-Market Perform, 3-Underperform
G = GAAP EPS
P = Pro Forma EPS
Estimates for DRCO, EGL, KEYW, and MMS are consensus estimates; all other estimates are Wells Fargo Securities, LLC estimates
Source: Wells Fargo Securities, LLC estimates, company data, Thomson One and FactSet
Cash Flow Shift to M&A? The modestly improved award activity the past few quarters, reflecting in part (in
our view) government agencies becoming more accepting of a generally flat funding outlook, could lead to an
uptick in acquisition activity as buyers gain better comfort in the seller’s contract waterfall. This should be
supported by low interest rates and the credit market’s continued willingness to provide funding, although we
expect that the industry’s strong cash flow generation could be re-directed to M&A, rather than returned to
shareholders, as has been the case the past few years. This could put some pressure on the shares as the
investor profile shifts away from those focused primarily on a return of capital. We summarize in Exhibit 2 the
(five-year average) uses of operating cash flow. We expect special dividends to decline and acquisitions to
increase as a percent of operating cash flow in the next several years. (See our detailed analysis further on in
this report.)
Exhibit 2. Cash Flow Usage, Average Over The Past Five Years
as a % of Operating C ash Flow
C apital Expenditures
Acquisitions
Share Repurchases
Dividends
Total
BAH
16%
9
0
128
152
CACI
7%
110
41
0
158
MANT
13%
67
0
11
91
LDOS / SAIC
11%
47
67
23
148
Debt (Increase)/Decrease
(21)
(52)
(18)
(19)
Note: Average based on fiscal years
Note: SAIC includes historical legacy SAI data prior to FY2014: FY2014 data represent combined LDOS and “new” SAIC
Source: Company data and Wells Fargo Securities, LLC
3
IT & BPO Services
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
Stock Pickers’ Market. While the sector fundamental backdrop is mixed, it is no longer negative. We
believe this will see a divergence in share price behavior as those able to reaccelerate organic growth (within
margin diminution) will relatively outperform. Exhibit 3 examines factors that should influence sector funding,
competitive behavior and valuation.
Exhibit 3. Summary of Factors Influencing Funding, Financials, and Valuation
Tailwinds
• Large addressable market (more than $200 billion)
• GFY2015 CROmnibus funding bill signed
• Agencies more comfortable (accepting) of flattish funding outlook
• Ongoing threat of terrorism
• Responding to ISIS Threat, Ebola outbreak
• Improved pace of award activity in recent months
• Spending outlook comfort growing, so consolidation should pick up
• Sustained positive cash flow
• CQ4 has easy comps given government shutdown a year ago
Headwinds
• Does “Sequester” return in GFY2016?
• Congressional rejection of DoD re-prioritization/cost-saving proposals
• Political positioning going into 2016 election cycle affect budget timing?
• Wind-down of Afghanistan military commitment
• Army increasingly a “bill payer” given “Asia Pivot”
• Challenged procurement process, and continued award protests
• “Takeaways” critical to growth
• Pricing pressure remains intense, even if not called LP/TA
• Can service providers get even leaner?
• “Primes” and private equity yet to show much interest in service/providers
• Valuation already suggesting meaningfully positive growth
• Will investors be happy when free cash flow redirected to M&A?
Source: Wells Fargo Securities, LLC
4
Government Services: Market Space Firming
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
Share Price Performance
Investors Bid Up Shares as Confidence Built That Worst Was Past. After a sharp correction with the
onset of the 16-day government shutdown in October 2013, the shares of the government service providers
have generally trended upward (see Exhibit 4a). We note that the overall market (i.e., the S&P 500) rose by
approximately 18% since October 17, 2013 (end of the government shutdown), while the government service
providers index (highlighted below) rose by about 24% (see Exhibit 4b). While there were some positive EPS
revisions during this time frame, much of that was for below-the-line items. We believe this may be an overreaction (in our view) to the expected improvement in government spending post the Ryan-Murray bill
(December 2013), the completion of the GFY2014 appropriations (January 2014), the expectation of increased
DoD spending in the wake of the early successes of the ISIS terrorist group, and the expectation (and in some
cases, actuality) of improved awards in GFQ4/CQ3. During this period, we estimate that EV/EBITDA multiple
expansion, looking at Booz Allen (BAH), CACI (CACI), Leidos (LDOS), and ManTech (MANT) was about 7
points to the mid-10x range (about a 40% improvement), and the free cash flow multiple expanded to 15x from
10x (about a 50% improvement).
Exhibit 4 (a-b)
4a. Factors Affecting Sector Total Return the Past Five Years
Gov't Services: BAH, C AC I, DC P, DRC O, EGL, IC FI, KEYW, LDOS, MANT, NC IT, SAIC , SRX, SXE
Afghanistan C ombat 220
Government
Operations End
Shutdown Begins
200
200
Government
Shutdown Ends
C ongressional
180
180
"Supercommittee"
Iraq C ombat
Unable to Reach Deal
160
160
GFY13
Operations
2014
Sequestration
Budget
End
140
140
Elections
Begins
C ontrol Act
of 2011
"Fiscal C liff"
120
120
GFY15
Agreement
Bipartisan
"C Romnibus" 100
100
Budget Act of
signed
2013
2010
80
80
(Ryan-Murray)
2012 Elections
Elections
60
60
2010
2011
2012
2013
2014
Source: FactSet and Wells Fargo Securities, LLC
220
5
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
IT & BPO Services
Exhibit 4b. Relative (to the S&P 500) Total Return
1.1
Gov't Services: BAH, C AC I, DC P, DRC O, EGL, IC FI, KEYW, LDOS, MANT, NC IT, SAIC , SRX, SXE
1.1
1.0
1.0
0.9
0.9
0.8
0.8
0.7
0.7
0.6
0.6
0.5
2010
Source: FactSet
2011
2012
2013
0.5
2014
Services Versus Primes--Total Return. Over the past five years, the aerospace/defense prime contractors
have outperformed the government services pure plays given their stronger cash flow characteristics, substantial
margin improvement, and willingness to return capital to shareholders (see Exhibit 5).
Exhibit 5. Government Services Relative to Defense Primes
120
120
Gov't Services Primes Relative to Defense Primes (total return)
110
110
100
100
90
90
80
80
70
70
60
2010
2011
2012
2013
2014
60
Notes: Government Services index includes BAH, CACI, DCP, DRCO, EGL, ICFI, KEYW, LDOS, MANT, NCIT, SAIC, SRX,
and SXE.
Defense Primes index includes GD, LMT, LLL, NOC, RTN
Source: FactSet
6
Government Services: Market Space Firming
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
Funding Outlook--Bottomed, But Not Really Growing
GFY2015 Funded, Well, Almost. CY2015 starts with (almost all) funding in place given the December
signing of the “CROmnibus” appropriations bill that funds all but the Department of Homeland Security
(DHS) through GFY-end September 30, 2015. Sadly, this was the fifteenth year where the federal government
used a “Continuing Resolution” (CR) to provide initial funding for at least some portion of the government.
The total level of GFY2015 funding was never in doubt as that had already been agreed to under the Bipartisan
Budget Act (Ryan-Murray) in December 2013. Given the ongoing fight over immigration, the Department of
Homeland Security (DHS) is funded using a CR through February 27, which is roughly when the federal
government will likely be bumping up against its debt ceiling. Given these two events, the Republicans hope to
force President Obama to reverse some of his non-legislated Administration efforts to give rights to illegal
aliens, while still showing they can do Congress’ normal bidding of funding the federal government. Despite
control of both houses of Congress, the Republicans are already thinking about positioning for the 2016
elections, when the sitting President cannot run and 24 Republican Senators are up for reelection (similar to
the disastrous situation the Democrats faced in the 2014 elections). The Republican also need to keep the far
right in check, some of whom have Presidential ambitions, and this may affect their ability to compromise with
the President, who still holds veto power, and as his State of the Union address suggested, shows little
willingness to be accommodating.
The Budget Control Act (BCA) of 2011 and Sequester. The BCA (August 2011) agreed to about
$2 trillion in savings (or new revenue) over a decade, but provided specifics on only about half of the total. The
other half was supposed to be determined by the “Super Committee” by November 2011, and if they did not
come to an agreement, an annual across-the-board spending reduction methodology called sequestration
would become the law of the land. As many of us know, the Super Committee proved underwhelming, in our
view, and we now live with a need for Congress to cut spending (from a growing base line) by $100-110 billion
a year, either by agreement, or forced by the sequestration mechanism (see Exhibit 6, which is our best
understanding of the spending limits under the BCA, and which remains the current law of the land). Note that
defense spending is relatively flat near term, before turning slightly higher in the coming years. This, of course,
excludes funding for “overseas contingency operations” (OCO), which is used to fund the conflicts in Iraq and
Afghanistan, as well as for the fight against terrorism more globally, and sometimes, other “temporary” crises,
such as the Ebola response in West Africa. Most believe that some “base” level funding has been included in
the OCO, taking some pressure off making some harder decisions on defense spending in recent years. This
should become more difficult to do with the efforts in Afghanistan and Iraq being far more limited now.
Protecting local funding (and in some cases, pet causes), has made it difficult to wind-down programs that are
no longer deemed necessary. In addition, Congress has specifically disallowed any effort to rationalize the
military base footprint in the United States. DoD would like to move forward with another base realignment
program (BRAC), which would create a list of base closings that would have to be voted on in an all-or-nothing
approach, i.e., pain for almost everyone, in our view. As a reminder, Sequester is an across-the-board reduction
in spending if Congress and the President are unable to agree on more specific reductions to reach the BCA
targets, or legislate some adjustment to the annual limits (such as the Ryan-Murray Act), which pushed some
of the required reductions into the out years of the ten-year agreement. Hope remains for a “grand bargain”
that would likely include less discretionary spending, more tax revenue, and adjustments to entitlement
programs, the latter being the most sensitive. Usually, the most successful “big deals” are ones where everyone
comes away unhappy, i.e., shared pain.
7
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
IT & BPO Services
Exhibit 6. Discretionary Federal Spending Limits Under the Budget Control Act (BCA) 2011 ($
in Billions)
GFY= September
National Defense: (a)
Original Caps under BCA (b)
JSC/ Sequestration Reductions (c)
BBA relief (d)
JSC/ Sequestration Levels
% growth
Adjustments (e)
Available appropriations
% growth
Non-National Defense:
Original Caps under BCA (b)
JSC/ Sequestration Reductions (c)
BBA relief (d)
JSC/ Sequestration Levels
Adjustments (e)
Available appropriations
Total federal pre-adjustments
Adjustements (d)
Total federal appropriations
% growth
Department of Defense ("051") only:
Base
% growth
OCO
Total "051"
% growth
2012
$554
0
0
554
2013
2014
2015
2016
2017
2018
2019
2020
$544
(43)
0
501
-10%
118
619
-10%
$552
(53)
22
521
4%
86
607
-2%
$567
(54)
8
521
0%
65
586
-3%
$577
(54)
0
523
0%
30
553
-6%
$590
(54)
0
536
2%
30
566
2%
$603
(54)
0
549
2%
30
579
2%
$616
(54)
0
562
2%
30
592
2%
$630
(54)
0
576
2%
NA
576
-3%
$644
(54)
0
590
2%
NA
590
2%
489
0
0
489
4
493
499
(26)
0
473
35
508
506
(37)
22
491
13
504
520
(36)
8
492
22
514
530
(37)
0
493
0
493
541
(37)
0
504
0
504
553
(37)
0
516
0
516
566
(36)
0
530
0
530
578
(35)
0
543
NA
543
590
(35)
0
555
NA
555
1,043
137
1,180
974
153
1,127
-4%
1,012
99
1,111
-1%
1,013
87
1,100
-1%
1,016
30
1,046
-5%
1,040
30
1,070
2%
1,065
30
1,095
2%
1,092
30
1,122
2%
1,119
NA
1,119
0%
1,145
NA
1,145
2%
530
496
-6%
82
578
-10%
496
0%
85
581
1%
496
0%
65
561
-3%
504
2%
30
534
-5%
515
2%
30
545
2%
527
2%
30
557
2%
537
2%
30
567
2%
133
687
115
645
(a) Budget category "050", which includes the Department of Defense, and parts of Energy and Homeland Security.
(b) Includes minor adjustments for American Taxpayer Relief Act (ATRA), i.e. "fiscal cliff" deal that impacted GFY13-14.
This includes about half the cuts (specified ones) under the Budget Control Act of 2011 (BCA).
JSC/Sequester impact higher on discretionary spending for Defense, as Non-Defense side has mandatory (e.g. farm subsidies) accounts.
(c) Joint Select Committee on Deficit Reduction (JSC), a.k.a. the "Super Committee" reflects the other half (~$1 billion over 10 years).
This includes the other half of the BCA cuts that need to be determined annually; if not across the board (with expectations) cuts occur.
(d) Bipartisan Budget Act of 2013 (BBA) reduced the required BCA/ATRA levels for GFY14-15, and extend the program of cuts by two years.
(e) Funding outside the BCA. Largest piece is for "Overseas Contingency Operations," but also includes items such as disaster relief.
Source: Congressional Budget Office (January 2015, August 2014, March 2013 and January 2012), Congressional Research Service (November
2014), Controller, Department of Defense (March 2014) and Wells Fargo Securities, LLC
8
2021
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
Government Services: Market Space Firming
GFY2016 Budget. The President is expected to offer his GFY2016 budget proposal on February 2, which
would be much earlier than in recent years. Both the President and Republicans are talking about “regular
order” (i.e., getting the appropriations bills completed before the GFY begins), but there are already signs (in
our view) that this will be difficult. The President set an aggressive posture during the January 20, State of the
Union address, and the response by Republicans was (not surprisingly) chilly. This does not bode well for
timely GFY2016 appropriations or any hope for a “grand bargain” that would eliminate the Sequestration
mechanism, in our view. The President is currently proposing new spending programs, including a $60 billion
proposal to dramatically reduce the cost of community college and technical schools. Great idea (and that is
sure to play well to the Democratic base as the party positions for the 2016 election cycle), in our opinion, but
we have not heard how he plans to fund this new entitlement program given the already sizeable federal deficit
that is expected to once again grow meaningfully in the coming years as the “Baby Boomers” increasingly
retire. In our view, this proposal is particularly noteworthy given the calls by some Republican and Democratic
members of Congress to increase defense and cybersecurity funding. Remember that the defense industry has
wisely put aspects of the military industrial base in most states, helping provide for broad-based support on
defense spending, in some cases even for spending the Department of Defense (DoD) does not want (e.g., A-10,
U-2, etc.). The current spending limits as set by the Budget Control Act (BCA) of 2011 limit national security
(mostly DoD) to $523 billion and non-security spending to $493 billion, both essentially flat year over year (
see Exhibit 7).
Exhibit 7. National Defense Spending Levels Under Existing Legislation ($ in Billions)
DoD Only ("051')
Adjustments (primarily OCO)
Other National Security
$700
$700
$24
$650
$650
$600
$5
$133
$600
$25
$25
$118
$550
$86
$65
$19
$30
$21
$30
$22
$30
$25
$30
$500
$500
$450
$550
$530
$496
$496
$504
$515
$527
$537
$496
2013
2014
2015
2016
2017
2018
2019
$450
$400
$400
2012
Note: Base budget category "050" includes Department of Defense and parts of Energy and Homeland Security. Does not include any OCO.
Source: Congressional Budget Office, Congressional Research Service, Controller, Department of Defense and Wells Fargo Securities, LLC
So What Gets Funded, At Least On A Relative Basis? Our expectation is that support for the fight
against terrorism has fairly universal support, although how that is executed does not. We assume this will
mean support of intelligence gathering and analysis, as well as special operations. Cybersecurity is also an area
likely to see steady funding as the (unpleasant) risks to our inter-connected world become more apparent, as
seen in the recent Sony attack and constant pressure on the banks and federal government. We also see a
growing focus on healthcare funding, reflecting the Affordable Care Act, notable under-investment by
healthcare payers and providers around administrative costs, and the rapidly aging U.S. population, which will
likely put significant pressure on government funding in the coming years. In addition, a decade of fighting
brings a rising burden to the Veterans Administration (VA), which is already coping with the aging of those
that fought in Vietnam. While the above-noted areas are likely to see higher funding levels, that does not mean
a sharp pullback in spending elsewhere as there is lots to do to keep the federal government running every day,
and in the past 30 years, contractors have played a growing role in “keeping the lights on.” We believe this will
be more so in the coming years as the federal employment “retirement tsunami” gains momentum and the
government continues to struggle in attracting (especially tech savvy) younger people. We understand that the
addressable market, although less than a few years ago, still exceeds $200 billion annually.
9
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
IT & BPO Services
Award Activity--How to Interpret?
After a very slow start to GFY2014 (October 2013 through September 2014) given the government shutdown,
award activity was strong at the end of the fiscal year, particularly in the latter part of the month of September
(see Exhibit 8a-b). Several service providers indicated that award activity continued to be strong into October,
which historically sees a sharp fall-off after the GFY-end rush. We also examined funded award activity over
the past several years, and it is noteworthy that despite the uptick in awards in GFQ4/CQ3, the funded awards
showed a more subdued quarterly pattern. When looking at funding orders, the seasonality (high GFQ4/CQ3)
remains, but is more muted, suggesting the rush of awards at GFY-end does not always come with immediate
funding. GFQ4 typically provides about 40% of annual award activity, but closer to 30% of funded awards.
Correspondingly, GFQ1 typically provides about 15% of annual awards, but 20% of funded awards (see Exhibit
9a-b for a look at the seasonal pattern for both awards and funded awards).
What we find more interesting is the positive movement on some of the larger indefinite-delivery/indefinitequantity (IDIQ) contract vehicles, e.g. OASIS. This may suggest that agency clients are beginning to have
enough forward visibility to available funding that they are moving forward with these critical awards. We note
that IDIQ awards often come with little initial “funded” work, but are critical to service provider participation
in funding. Several conversations that we have had with industry participants suggest that agency clients are
becoming more accepting/realistic to what is likely to be a generally flat budget environment and are making
their spending plans accordingly. This appears to be truer on the civilian agency side than at the DoD.
Exhibit 8a. Government Services Average Quarterly Award Activity
Average (BAH, CACI, ICFI, LDOS, MANT, SAIC)
$2,500
2010
2011
2012
2013
$2,500
2014
$2,000
$2,000
$1,500
$1,500
$1,000
$1,000
$500
$500
$0
$0
Q1
Q2
Q3
Q4
Note: Based on Government Fiscal Year (GFY; ends September)
Legacy SAIC figures included; beginning in GQ4 2013 SAIC and LDOS presented separately
Source: Company Data and Wells Fargo Securities, LLC
Exhibit 8b. Government Services Average Quarterly Funded Awards
Average (BAH, CACI, ICFI, LDOS, MANT, SAIC)
$2,500
2010
2011
2012
2013
$2,500
2014
$2,000
$2,000
$1,500
$1,500
$1,000
$1,000
$500
$500
$0
$0
Q1
Q2
Q3
Note: Based on Government Fiscal Year (GFY) ends September
Legacy SAIC figures included; beginning in GQ4 2013 SAIC and LDOS presented separately
Source: Company data and Wells Fargo Securities, LLC
10
Q4
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
Government Services: Market Space Firming
Exhibit 9a. Seasonality of Award Activity
Average (BAH, CACI, ICFI, LDOS, MANT, SAIC, SRX, SXE)
50%
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
50%
40%
40%
30%
30%
20%
20%
10%
10%
0%
0%
Q1
Q2
Q3
Q4
Note: Based on Government Fiscal Year (GFY; ends September)
Source: Company data and Wells Fargo Securities, LLC
Exhibit 9b. Seasonality of Funded Awards
Average (BAH, CACI, EGL, ICFI, LDOS, MANT, SAIC, SRX, SXE)
2007
50%
2008
2009
2010
2011
2012
2013
2014
50%
40%
40%
30%
30%
20%
20%
10%
10%
0%
0%
Q1
Q2
Q3
Q4
Note: Based on Government Fiscal Year (GFY) ends September
Legacy SAIC figures included; beginning in GQ1 2014 SAIC and LDOS presented separately
2007: Includes MANT, legacy SAIC, SRX and SXE
2008: ICFI included
2009: BAH and CACI included
2010: SXE is no longer included
2011-2012: SRX is excluded due to lack of data
2013: EGL is included
Source: Company data and Wells Fargo Securities, LLC
11
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
IT & BPO Services
Book-to-Bill--Two Views
A similar, but maybe more encouraging, observation appears when examining book-to-bill, as award activity
(on a trailing-12-month basis, to remove the influence of seasonality) appears to have bottomed several
quarters ago. We note that the aerospace/defense primes reflect a similar upturn, although on a more muted
basis (see Exhibit 10). We also note that CACI has an unusually strong CQ3 2014, which includes several
awards still in the protest period (as is their practice). We have been hearing that awards have been getting
shorter (there has been a DoD policy shift to three-year from five-year awards and greater use of
extensions/bridges during this period of budget uncertainty). We expect that award duration to lengthen given
what we sense is improved (or at least more stable) funding visibility for clients. This should lead to an
uptrend in award activity (and therefore, book-to-bill) without necessarily an increase in the near-term
revenue outlook. We examined book-to-funding orders, as well, comparing the trailing-12-month trend to the
year-over-year revenue growth in that quarter. The two lines generally track, as shown in Exhibit 11.
Exhibit 10. Book-to-Bill (Tr12 basis) for Government Service Providers and Aerospace/Defense
Primes Based on Reported Awards
1.4x
1.4x
"Gov't Services: BAH, CACI, EGL, ICFI, LDOS, MANT, SAIC
A&D Primes: GD, LMT, NOC
1.3x
1.3x
1.2x
1.2x
1.1x
1.1x
1.0x
1.0x
0.9x
0.9x
0.8x
0.8x
Note: Based on Government Fiscal Year (GFY) ends September
Source: Company data and Wells Fargo Securities, LLC
Exhibit 11. Book-to-Bill (Tr12 basis) on Calculated Funding Orders Versus Revenue Growth for
Government Service Providers Based
1.2x
Average Funded Orders / Revenue (TTM)
Average Revenue Growth
40%
30%
1.1x
20%
1.0x
10%
0%
0.9x
-10%
0.8x
Note: Based on Government Fiscal Year (GFY) ends September
Source: Company data and Wells Fargo Securities, LLC
12
-20%
Government Services: Market Space Firming
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
Takeaways and Pricing
We used to examine “submitted awards” levels, but found the data to not be a good indicator of future growth
(see Exhibit 12). We believe this reflects that with there being fewer revenue opportunities to pursue, there
became more bidders per opportunity, so when consolidated, there was double and triple counting of the
opportunity set. It is interesting to us that despite this factor, few acknowledged a lower win rate. We also
viewed pipeline, when given, not to be a very predictive statistic as it includes IDIQ awards, which are very
large in size, but normally offer very limited near- and intermediate-term revenue. Given the easy comps and
the forward movement in award activity, we expect some of the service providers (who gain share) to begin
reporting relatively improved (but not necessarily positive) organic revenue growth.
The general consensus of most industry participants is that market growth will be limited, if any, over the nearterm horizon. This suggests that organic growth will need to be driven by “takeaways” of re-competed work. As
shown in Exhibit 12, the uptick in reported “bids submitted and awaiting approval” has not led to an
improvement in the organic growth rates, suggesting more bidders chasing the same opportunity. This often
implies a more aggressive pricing strategy. We continue to hear that pricing (or total project/activity revenue)
on renewals declines by about 25%. This has been the case for some time now, but the impact on provider
operating margin has been muted for two reasons, in our view. First, approximately 40-50% of revenue is costplus-based pricing, so margins are generally sustained although revenue is reduced. Second, awards have been
extended/bridged/protested, leading to the sustainment of old rates in some cases. A few years ago, we
consistently heard that incumbent win rates were 95+%. We now (but not consistently) hear that incumbent
win rates are south of 50%. While the incumbent benefits from knowledge of the process and should have a
good relationship with the end client, it is often hampered by a higher cost labor pool and “in-the-box”
thinking on the contract proposal. For the incumbent to remain competitive, it needs to force compensation
and benefits reductions on the existing project team, which we are sure does not bode well for morale. But if
the work is for base operations, there may be limited alternative job opportunities in the local area. We expect
that some incremental winning bidders will be too aggressive on their pricing and either lose money on the
contract, or provide below desired value to the client and be removed possibly before the end of the contract
period. Two years ago, we heard that clients were consistently using a low-price/technically acceptable
(LP/TA) approach, despite the higher risk of quality reduction or failed projects. While usage of LP/TA has
clearly eased as a provider issue, most say that price remains the primary decision factor.
Exhibit 12. Organic Growth versus Bids Outstanding
$18
Average Bids Outstanding ($ in billions)
Average Organic Revenue Growth Yr/Yr
$16
$14
$12
$10
$8
$6
$4
$2
$0
15%
10%
5%
0%
-5%
-10%
-15%
-20%
Notes: Averages are for CACI International (CACI), ManTech (MANT), Leidos (LDOS) and SAIC (SAI). Prior to CQ3 2013, figures represent
legacy (pre-split) SAIC business. MANT’s bids outstanding are adjusted for MRAP bid submitted in Q3 2011.
Note: SAIC and LDOS CQ3 figures are our estimates as both companies have not yet reported results.
Source: Company Data and Wells Fargo Securities, LLC estimates
13
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
IT & BPO Services
Operating Margin--Impressively Stable, But Is Pricing Impact Still on the Horizon?
The one thing we underestimated the past few years was the ability of the CFOs to sustain operating margin in
the face of declining organic growth. As shown in Exhibit 13, operating margin has stayed within a fairly
narrow band over the past few years. While cost cutting has been a big part of this stability, we also note the
following: (1) reduced pace of lower-margin “pass-through” revenue; (2) an increased focus on (higher margin)
direct labor; (3) cost-plus accounting for approximately 40-50% of revenue, so a revenue not margin impact;
and (4) the rapid reduction in the cost structure ahead of any decline in pricing. We believe this latter factor is
now just starting to materialize and may hamper any margin recovery even if organic growth improves. Exhibit
14 reflects a similar trend for the service arms of the defense primes.
Exhibit 13. Government Services -- Margin Stability versus Organic Growth
11%
Operating Margin - Average (left axis)
Average Organic Revenue Growth Yr/Yr (right axis)
15%
10%
10%
5%
9%
0%
8%
-5%
7%
-10%
6%
-15%
5%
-20%
Notes: Averages are for Booz Allen Hamilton (BAH), CACI International (CACI), Engility (EGL), ICF International (ICFI), Leidos (LDOS),
ManTech (MANT), NCI (NCIT), and SAIC (SAIC). Prior to CQ3 2013, figures represent legacy (pre-split) SAIC business.
Note: ICFI, LDOS, SAIC CQ3 figures are our estimates as both companies have not yet reported results.
Source: Company data and Wells Fargo Securities, LLC
Exhibit 14. Aerospace/Defense Primes’ Services Segments--Margin Stability Versus Revenue
Growth
11%
Operating Margin (left axis)
10%
9%
8%
7%
15%
10%
5%
0%
-5%
-10%
6%
-15%
5%
-20%
Note: Includes General Dynamics, Lockheed Martin and Northrop Grumman
Growth rates reflect restated numbers for all divestitures
Source: Company data and Wells Fargo Securities, LLC
14
Reported Revenue Growth (right axis)
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
Government Services: Market Space Firming
M&A--Expect to See Uptick in Activity by Public Companies
We believe three factors could lead to an uptick of industry consolidation beginning in 2015. First, service
providers are feeling better about their visibility (because their clients are moving forward with awards) and
believing they need to step up the pace of repositioning to the faster growth areas. No change in that list: cybersecurity, parts of C4ISR, big data analytics, and healthcare. Second, with cost structures cut to the bone and
organic award activity uncertain, some will move to add revenue to leverage their current cost structure.
Historically in the sector, companies could be acquired and nearly all their overhead removed, leaving just the
existing contract book, contract vehicles, and relationship personnel. Third, interest rates remain at very low
levels and, given the contracted nature of the revenue stream, financial institutions remain willing to lend. Of
course, the expectation is that the next move in interest rates is up (although the debate continues on when);
so some buyers may seek to use more expensive fixed-price debt (or hedge out floating-rate debt), making the
accretion less compelling (or the prices paid lower). We expect the “strategics” to be the primary buyers in
2015 as the private equity firms (which have historically been active) continue to monetize prior investments
(e.g., Booz Allen, TASC). In addition, for several years now, the aerospace/defense primes have shown a
dramatically reduced interest in services and focused more on divestitures to remove operations that have
organizational conflicts of interest (OCI) and therefore, restrict bids on more lucrative work.
Given the notable recovery in valuation (especially on the important M&A metric of EV/EBITDA), we wonder
if buyers will consider using equity. This has historically not been the case, but financial leverage capacity may
be more limited for some given the aggressive return of capital to investors over the past few years. The faster
growth areas noted above are often seeing multiples in the teens, while sellers with less attractive growth
potential are more likely in the single-digit EV/EBITDA multiple area if they can find any interest at all. As
shown in Exhibit 15, it is interesting to note that public company valuations are approaching the low-teens deal
multiples over the past decade despite the less compelling market backdrop. We note that DynCorp, Dynamics
Research, and TASC offered less attractive growth prospects and margin, and therefore, deal multiples. This
suggests to us that EBITDA will need to improve soon, or current share prices may prove vulnerable.
Exhibit 15. Selected Government Services M&A Multiples
Govt' Services M&A Multiples
Veridian (VNX) - C Y03
DigitalNet (DNET) - C Y04
Titan (TTN) - C Y05
Anteon (ANT) - C Y06
SI International (SINT) - C Y08
TASC (private equity sale by NOC ) - C Y09
DynC orp (DC P) - C Y10
Stanley (SXE) - C Y10
SRA (SRX) - C Y11
Six3 Systems (private; by C AC I)
Dynamics Research (DRC O) - C Y14
TASC (private; by EGL) - C Y14
Average - all transactions
Average - pre-CY10 transactions
Average - post-CY10 transactions
Forward EV/EBITDA
1-Year
2-Year
13.9x
12.4x
11.6
10.1
12.7
10.7
13.3
NA
12.4
9.7
10.3
NA
6.0
5.5
11.4
9.7
10.8
10.0
11.5
NA
6.7
NA
7.9
NA
10.7x
9.7x
12.4
10.7
9.1
8.4
Note: Multiples for acquisitions of VNX, DNET, TTN, ANT, SI, DCP, SXE, and SRA are based on Wells Fargo Securities, LLC
estimates as of the date of acquisition or assumptions per the management of the acquiring companies
Note: DRCO and TASC acquisition multiples are per EGL management and adjust for tax benefits
Note: Six3 acquisition multiple is per CACI management and adjusts for tax benefits
Note: TASC multiples (in sale to GA and KKR) are Wells Fargo Securities, LLC estimates based on comments from NOC
management on a public conference call announcing the divestiture
Note: Acquisition date noted is based on the date of transaction closing
Source: Company data and Wells Fargo Securities, LLC estimates
15
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
IT & BPO Services
CQ3--Recap
CQ3 saw mixed performance (relative to Street expectations) for revenue, but generally better for EPS (see
Exhibit 16). The highlight of the quarter was the stronger-than-expected award activity. This was true for some
even when adjusting for the traditionally strong nature of GFQ4/CQ3. The standout was CACI, although we
note that $200-300 million of its reported awards were under protest at the time of the earnings report. In
addition to the solid awards, most management teams were upbeat on their pipelines and indicated that strong
award activity continued into CQ4, which historically has been a modest awards quarter. The service providers
reported that civilian agencies were being more thoughtful around low-price/technically acceptable (LP/TA),
although that did not translate to the DoD, which has remained fairly price sensitive. Most indicated an uptick
in “new” wins. This suggests that the publicly traded providers gained some share as there remain few new
programs, just re-competes. Again the margins remained fairly stable, in part reflecting a slower pace of passthroughs, i.e., other direct costs (ODC). Most providers indicated an intent to focus on improving their level of
(high-margin) direct labor (i.e., providers’ billable employee, rather than a subcontractor). This means that
subcontractors, many being legislatively favored small business/female-owned/veteran-owned providers, will
be squeezed out. It is not unusual for 30% or more revenue to be facilitated by a subcontractor. What was
interesting is that we saw little change in the forward period guidance despite what was viewed as a strongerthan-expected quarter.
Exhibit 16. Summary of CQ3 Results
($ in millions, except EPS)
Net Revenue ($)
YrAgo
Prior
Seq.
Mgt.
Guid.
Our
Est.
1,378
1,322
864
906
none given
none given
ICF International, Inc.
Leidos Holdings, Inc.
244
1,414
264
1,306
ManTech International
NCI, Inc.
567
78
463
78
none given
none given
none given
SAIC, Inc.
974
939
Government Services
Booz Allen Hamilton
CACI International
Pro Forma EPS
Street
Avg.
Rptd.
1,300
1,306
1,305
0.47
850
857
815
1.33
266
1,240
264
1,220
265
1,276
0.55
0.49
70-76
465
72
484
74
447
76
0.48
0.15
none given
960
971
993
0.44
Note: Our/Street estimates are prior to reporting CQ3 results
Source: Wells Fargo Securities, LLC estimates, company data, and Thomson One
16
YrAgo
Mgt.
Guid.
Our
Est.
none given
none given
0.41
0.41
0.44
29-Oct
BAH
1.16
1.21
1.29
29-Oct
CACI
none given
none given
none given
0.14-0.16
none given
Street
Avg.
Rptd.
Report
Date
Ticker
0.60
0.50
0.59
0.53
0.62
0.65
6-Nov
3-Dec
ICFI
LDOS
0.38
0.14
0.40
0.15
0.41
0.17
29-Oct
29-Oct
MANT
NCIT
0.72
0.00
0.74
0.77
9-Dec
SAIC
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
Government Services: Market Space Firming
CQ4--Our Pre-report Thoughts
Based on the commentary on the last quarter’s call and our observation of award announcements, CQ4 shaped
up to be a better-than-normal GFQ1 for award activity. Of course, as the holidays approached, the pace of
award announcements fell sharply. The yr/yr comparison should be more favorable given that the prior year
includes the 16-day government shutdown and very slow recovery in award activity after that as clients awaited
the outcome of budget negotiations that resulted in the Ryan-Murray bill. In addition to an easy comp on
awards, many of the contractors maintained their work forces through the shutdown even though (unlike the
federal employees) they never received any payment for lost opportunity. This weighed on the period’s margin.
For the calendar year-based service providers, CQ4 is always the most difficult for estimating operating
margin. This often reflects the cost true-ups on many cost-plus contracts, as well as award fees on others, that
can move margins (potentially significantly) either up, or down. It is usually up. In addition, with the delayed
(again) passage of the R&D tax credit for 2014, we expect some service providers to have a modest benefit in
their tax rate, which was not included in guidance, or likely Street estimates. Given that it is CQ4, we plan to be
more focused on the initial guidance for 2014. As always, the first look comes from the aerospace/defense
primes that have significant service units, with particular focus on Lockheed Martin (on January 27), General
Dynamics (January 28), and Northrop Grumman (on January 29). In addition, we expect to hear from the
non-calendar reporters Booz Allen and CACI, both on January 28. The calendar year-end companies are
scheduled to report in mid-February.
Exhibit 17. Our Expectations for CQ4 Results
($ in millions, except EPS)
Government Services
Booz Allen Hamilton
CACI International
ICF International, Inc.
Leidos Holdings, Inc.
ManTech International
NCI, Inc.
SAIC, Inc.
Net Revenue ($)
YrAgo
Prior
Seq.
Mgt.
Guid.
Our
Est.
1,273
894
230
1,291
492
80
931
1,305
815
265
1,276
447
76
993
none given
none given
1,305
830
281
1,182
437
74
934
none given
none given
none given
70-76
none given
Pro Forma EPS
Street
Avg.
Rptd.
1,272
845
278
1,245
437
76
979
NA
NA
NA
NA
NA
NA
NA
YrAgo
0.33
1.38
0.38
0.70
0.54
0.16
0.66
Mgt.
Guid.
Our
Est.
Street
Avg.
none given
none given
0.32
0.99
0.57
0.44
0.40
0.16
0.70
0.00
0.34
1.06
0.56
0.60
0.39
0.17
0.76
none given
none given
none given
0.15-0.17
none given
Rptd.
NA
NA
NA
NA
NA
NA
NA
Report
Date
Ticker
28-Jan
28-Jan
26-Feb
March
18-Feb
11-Feb
March
BAH
CACI
ICFI
LDOS
MANT
NCIT
SAIC
Note: SAIC/LDOS estimates are for FQ4 (Jan) 2015
Source: Wells Fargo Securities, LLC estimates, company data, and Thomson One
17
IT & BPO Services
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
Valuation--Fully, if not overly, Discounted
We have gone back to pre-September 11, 2001, to examine various valuation metrics. We have also tracked the
service providers versus the aerospace/defense (A/D) primes that have the largest services exposure (GD,
LMT, NOC). In general, the A/D primes have a similar, but more muted valuation history. Also, in general,
valuation has returned to levels not seen since the strongest period of Department of Defense (DoD) budget
increases and peak overseas contingency operations (OCO, war-fighter support) expenditures. This is
particularly true when looking at price/earnings and EV/EBITDA multiples. Free cash flow (FCF) yield, while
less attractive by historical standards, offers the most compelling valuation of the three metrics. In our view,
some of the improvement in valuation metrics over the past several years is explained by the rising valuation of
the stock market as a whole, as evidenced by the S&P 500’s P/E multiple, which has increased by about 40%
over the past three years.
•
Price/Earnings Multiples: When looking at CY2015, P/Es have returned to the high teens (see Exhibit 1).
These are levels not seen the 2005-07 time frame, when the service providers were enjoying their best
growth as Iraq and Afghanistan, and related domestic-based activity, was at a peak. Throughout this
period, the U.S. Army was the primary growth client, and it is now seeing the greatest decline, especially
when one includes the OCO funding, which is rapidly declining. When compared to the A/D primes, the
past few years have seen reduced differentiation in P/Es (see Exhibit 18).
•
EV/EBITDA. We view this as a more relevant metric given the historical consolidation trend within the
sector. Since about the time of the 2012 Presidential election, EV/EBITDA has steadily improved from a
low of about 4x. After a brief dip for the October 2013 government shutdown, the EV/EBITDA multiple
continued its upward climb and now trades in the range of 9.5-10.5x, which is a level not seen since before
the strong fundamental period of 2005-07. When comparing the EV/EBITDA multiple of the services’
pure plays with the A/D primes, they offered a slight discount the past few years after outperforming
during the “Great Recession” period (see Exhibit 19).
•
Free Cash Flow Yield. Several years ago, the investor base turned over from growth investors to those
primarily focused on cash return, in our view. This brought an increased focus on free cash flow (FCF)
yield. In Exhibits 20-21, we examine the FCF yield of the service pure plays compared to that of the overall
market (i.e., S&P 500). The yield has held plus/minus 10% in the past year after being at higher levels
previously. The S&P 500 FCF yield showed only a modest decline during this period, so the services pureplay premium has averaged 5-8 points over the past year. Again, this is down from the several years before
that, when budget uncertainty was at its peak. In Exhibits 22-23, we provide a similar look at the A/D
primes’ FCF yield, both in absolute terms and relative to the S&P 500. The historical trend appears more
volatile, and the past two years have seen a FCF yield premium of 2-5 points, a several point differential to
the services’ pure plays.
18
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
Government Services: Market Space Firming
Exhibit 18. Price-to-Earnings (P/E) Analysis (FY1)
Services Pureplays
Government Index: BAH, C AC I, IC FI, MANT, and SRX
Average: 14.06x
Average Since 2009: 12.43x
30
30
25
25
20
20
15
15
10
10
5
'00
'01
'02
'03
'04
'05
'06
'07
'08
'09
'10
'11
'12
'13
'14
5
Aerospace and Defense Primes
Primes: GD, LMT, NOC
Average: 14.98x
Average Since 2009: 11.22x
30
30
25
25
20
20
15
15
10
10
5
'00
'01
'02
'03
'04
'05
'06
'07
'08
'09
'10
'11
'12
'13
'14
5
P/E Differential: Average Services Minus Prime
10
P/E Differential: Services Minus Prime 2.09
Average: 2.03
10
8
8
6
6
4
4
2
2
0
0
-2
-2
-4
-4
'00
'01
'02
'03
'04
'05
'06
'07
'08
'09
'10
'11
'12
'13
'14
Source: FactSet and Wells Fargo Securities, LLC
19
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
IT & BPO Services
Exhibit 19. Enterprise Value (EV) to EBITDA Analysis (FY1)
Services Pureplays
16
Government Index: BAH, C AC I, IC FI, MANT, and SRX
Average: 8.29x
Average Since 2009: 6.70x
16
14
14
12
12
10
10
8
8
6
6
4
'03
'04
'05
'06
'07
'08
'09
'10
'11
'12
'13
'14
4
Aerospace and Defense Primes
Primes: GD, LMT, NOC
Average: 7.75x
Average Since 2009: 6.27x
16
16
14
14
12
12
10
10
8
8
6
6
4
'03
'04
'05
'06
'07
'08
'09
'10
'11
'12
'13
'14
4
EV/EBITDA Differential: Average Services Minus Prime
4
EV/EBITDA Differential: Services Minus Prime 0.66
Average: 0.70
4
3
3
2
2
1
1
0
0
-1
-1
-2
'03
'04
'05
'06
Source: FactSet and Wells Fargo Securities, LLC
20
'07
'08
'09
'10
'11
'12
'13
'14
-2
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
Government Services: Market Space Firming
Exhibit 20. Free Cash Flow Yield, Government Services versus S&P500
Government Services
Government Services - Average
S&P 500 - Free Cash Flow Yield - LTM
S&P500 - Average
20%
20%
15%
15%
10%
10%
5%
5%
0%
0%
Note: Includes BAH, CACI, ICFI, LDOS, MANT and SAIC
Note: Free cash flow yield is trailing twelve months (TTM) and uses month (end) prices
Note: Government Services Average from 12/31/2002-1/31/2007 only CACI, MANT
Government Services Average from 2/28-2007 - 10/29/2010 excludes BAH, SAIC
Government Services Average from 11/30/2010 to 8/30/2013 excludes SAIC
Government Services Average from 9/30/2013 to 12/31/2014 includes all companies
Note: Beginning in September 2013, legacy SAIC split into LDOS and SAIC
Source: Company data, FactSet and Wells Fargo Securities, LLC
Exhibit 21. Government Services FCF Yield Minus S&P500 FCF Yield (TTM)
20%
Difference: Government Services - S&P500
Avg. Spread
20%
15%
15%
10%
10%
5%
5%
0%
0%
-5%
-5%
Footnotes for Exhibit _ and __: Government Services includes, BAH, CACI, ICFI, LDOS, MANT, and SAIC
Note: Free cash flow yield is trailing twelve months (TTM) and uses month (end) prices
Note: Government Services Average from 12/31/2002-1/31/2007 only CACI, MANT
Government Services Average from 2/28-2007 - 10/29/2010 excludes BAH, SAIC
Government Services Average from 11/30/2010 to 8/30/2013 excludes SAIC
Government Services Average from 9/30/2013 to 12/31/2014 includes all companies
Note: Beginning in September 2013, legacy SAIC split into LDOS and SAIC
Source: Company data, FactSet and Wells Fargo Securities, LLC
21
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
IT & BPO Services
Exhibit 22. Free Cash Flow Yield, Government Primes versus S&P500
Government Primes
Government Primes - Average
S&P 500 - Free Cash Flow Yield - LTM
S&P500 - Average
20%
20%
15%
15%
10%
10%
5%
5%
0%
0%
Source: Company data, FactSet and Wells Fargo Securities, LLC
Exhibit 23. Government Primes FCF Yield Minus S&P500 FCF Yield (TTM)
20%
Difference: Government Primes - S&P500
Avg. Spread
20%
15%
15%
10%
10%
5%
5%
0%
0%
-5%
-5%
Source: Company data, FactSet and Wells Fargo Securities, LLC
22
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
Government Services: Market Space Firming
Exhibit 24. Booz Allen Hamilton (BAH): Tear Sheet, Annual/Quarterly Income Statement,
Operating Cash Flow Analysis
Booz Allen Hamilton (BAH) Company Tear-Sheet
($ in millions, except per share)
Price (1/27/15)
$29.62
Company Description:
Booz Allen is the second largest pure-play provider of management and technology
consulting services to the U.S. federal government which accounts for ~98% of
revenue. Approximately 75% of revenue comes from Defense and Intelligence
clients with a particular focus on cyber-security. The acquisition of ARINC 's defense
business moves BAH into operations support, an area of limited prior focus.
Management
C EO:
C FO:
PE Ownership:
Ownership (%)
<1%
<1%
~37%
Horacio Rozanski
Sam Strickland
C arlyle Group
Model Assumptions (3-5 Year View):
Revenue Growth:
Adj. Op Mgn.
C ash Deployment
Flat
9-10%
Dividends, M&A
Revenue ($mm) and Y/Y Growth
Revenue ($mm)
$6,200
Potential Catalysts:
▪ We expect market opportunities to remain limited given sustained federal
budget pressure for DoD (and increasingly Intel) clients.
▪ Recent debt covenant changes create potential for additional special dividends,
in our view
FY 2014 Revenue by Client (%)
6%
$6,400
Y/Y Growth
$6,000
$5,800
$5,600
Investment Positives:
▪ Strong relationship with key Defense/Intel clients given higher-end consulting
and technology support services.
▪ Long-term track record of organic growth, although model has shifted to margin
improvement given challenging U.S. federal budget.
▪ High percentage of "cleared" employees makes for stickier revenue.
▪ Increasingly lean and flexible operating structure, in our view.
Investment Concerns:
▪ We expect U.S. federal funding to be under pressure for next several years,
with competitive pricing pressure already visible.
▪ BAH very sensitive to short-term, more discretionary work that is often
awarded in GFQ4 (C Q3).
▪ Very tight expense/compensation control also limits margin flexibility.
▪ Acquisition integration risk, as BAH appears to be embracing M&A to a more
meaningful degree than the prior strategy.
▪ Significant financial leverage, in our view, given special dividends and acquisition.
▪ 37% ownership by PE C arlyle raises potential "overhang" concerns; although
recent secondary offerings completed have been succesfully absorbed.
4%
C ivil 2 3%
9.5%
0%
9.0%
D efens e
47%
10.5%
10.0%
10.0%
9.2%
9.5%
9.0%
8.5%
8.3%
8.0%
7.5%
-6%
$5,000
9.7%
8.5%
8.0%
-4%
$5,200
Adjusted EBITDA Margin (%)
10.2%
10.0%
2%
-2%
$5,400
10.5%
7.5%
I ntel 2 8 %
Price to Earnings (P/E)
20
Enterprise Value to EBITDA (EV/EBITDA)
Price to Earnings - NTM
Average: 11.5x
20
18
18
16
16
11
NTM EV/EBITDA
11
Average 7.1x
10
10
9
9
8
8
14
14
12
12
7
7
10
10
6
6
8
5
5
8
6
1/26/10 10/14/10
7/1/11
3/19/12
Financial Metrics
Price (1/27/15)
$29.62
52-Week Range
$17 - $29
Shares O/S (mm)
144.9
Mkt C ap. ($mm)
$4,292
Ent. Value ($mm)
5,696
Fiscal Year
Mar.
Total Headcount
22,105
Revenue
Our estimate
Street estimate
Adj. Op. Margin
Our estimate
Street estimate
EPS (pro forma)
Our estimate
Street estimate
12/5/12
8/23/13
5/9/14
6
1/27/15
Balance Sheet ($mm)
as of September '14
C ash & Equiv.
$241.8
Total Debt
1,645.5
Share. Equity
164.3
Net Debt/C apital
77.6%
Debt/TTM EBITDA
3.2x
(Non-GAAP)
Estimates
($ in mm, except EPS)
FY15E
Revenue
$5,290
Our estimate
5,383
Street estimate
FY15E
Adj. Op. Margin
10.0%
Our estimate
10.5
Street estimate
FY15E
EPS (pro forma)
$1.61
Our estimate
1.69
Street estimate
FY16E
$5,340
5,578
FY16E
9.9%
10.5
FY16E
$1.62
1.81
4
1/26/10 10/14/10
7/1/11
3/19/12
12/5/12
8/23/13
5/9/14
4
1/27/15
BAH- US (24- Jan-2014 to 27-Jan- 2015, Daily)
30
30
28
28
26
26
24
24
22
22
20
20
18
18
16
16
Volume in Millions
4,000
2,000
0
F eb
M ar
A pr
M ay
J un
J ul
A ug
S ep
O ct
N ov
D ec
J an
Source for all tables/charts: C ompany data, ThomsonOne, FactSet, and Wells Fargo Securities, LLC estimates
23
(figures in $ thousands, except per share)
Revenue
C ost of revenue
Billable expenses
Gross profit
G&A expenses
LBO amortization
Depreciation and amortization
Restructuring charge
Operating income
Interest income
Interest expense
Other income/(expense)
Pretax income
Income tax expense
Net income - continuing ops.
Discontinued operations
Net Income (GAAP)
FY2009
Mar-09
FY2010
Mar-10
FY2011
Mar-11
FY2012
Mar-12
FY2013
Mar-13
FY2014
Mar-14
FY2015E
Mar-15
FY2016E
Mar-16
CY2013
Dec
CY2014E
Dec
CY2015E
Dec
$4,351,218
2,296,335
1,158,320
$5,122,633
2,654,143
1,361,229
$5,591,296
2,836,955
1,473,266
$5,859,218
2,934,378
1,542,822
$5,758,059
2,871,240
1,532,590
$5,478,693
2,716,113
1,487,115
$5,290,000
2,613,934
1,404,996
$5,340,000
2,612,203
1,408,650
$5,624,151
2,797,547
1,502,056
$5,286,970
2,591,176
1,429,448
$5,317,862
2,618,411
1,409,798
896,563
723,827
57,833
48,502
0
66,401
5,312
(146,803)
(182)
(75,272)
(25,831)
(49,441)
0
(49,441)
1,107,261
811,944
40,597
55,166
0
199,554
0
(150,734)
174
48,994
23,575
25,419
0
25,419
1,281,075
881,028
28,641
51,962
0
319,444
0
(131,892)
(59,488)
128,064
43,370
84,694
0
84,694
1,382,018
903,721
16,364
58,841
15,660
387,432
0
(48,078)
4,520
343,874
103,919
239,955
0
239,955
1,354,229
833,986
12,510
61,499
0
446,234
0
(70,284)
(7,639)
368,311
149,253
219,058
0
219,058
1,275,465
742,527
8,450
63,877
0
460,611
0
(78,030)
(1,794)
380,787
148,599
232,188
0
232,188
1,271,070
745,236
4,224
60,229
0
461,381
0
(72,231)
(303)
388,847
154,377
234,470
0
234,470
1,319,148
776,658
4,225
61,475
0
476,791
0
(70,500)
0
406,291
164,548
241,743
0
241,743
1,324,548
766,158
9,463
64,680
0
484,247
0
(79,257)
(1,566)
403,424
163,318
240,106
0
240,106
1,266,346
753,971
5,281
60,635
0
446,459
0
(72,750)
(478)
373,231
143,279
229,952
0
229,952
1,289,654
776,855
4,225
61,231
0
447,343
0
(70,700)
0
376,643
152,540
224,102
0
224,102
EPS - GAAP
NA
$0.22
$0.66
$1.70
$1.45
$1.54
$1.52
$1.54
$1.63
$1.53
$1.47
EPS - Pro forma (mgt. defined)
NA
0.83
1.24
1.61
1.65
1.63
1.61
1.62
1.70
1.59
1.51
153,450
147,681
149,982
152,525
Guidance (GA A P EP S):
(pro fo rma EP S, mgt. defined):
Avg. shares outstanding - diluted
105,695
116,228
127,449
140,812
144,855
148,681
Guidance (avg. shares):
Yr/Yr % increase:
Revenue
Avg. no. of shares
C ompensation and other costs/rev.
Billable expenses/revenue
Gross Margin
G&A/revenue
D&A/ revenue (x-LBO)
$ 1.48-1.56
$ 1.54-1.62
150,508
150.5 mm
Guidance (to tal revenue gro wth): mid-single digit decline
20%
NM
18%
10
9%
10
5%
10
-2%
3
-5%
3
-3%
1
1%
2
-2%
3
-6%
2
1%
2
52.8%
51.8%
50.7%
50.1%
49.9%
49.6%
49.4%
48.9%
49.7%
49.0%
49.2%
26.6
26.6
26.3
26.3
26.6
27.1
26.6
26.4
26.7
27.0
26.5
20.6
21.6
22.9
23.6
23.5
23.3
24.0
24.7
23.6
24.0
24.3
16.6
15.9
15.8
15.4
14.5
13.6
14.1
14.5
13.6
14.3
14.6
$172,736
4.0%
$277,344
6.4%
$295,317
5.8%
$368,323
7.2%
$400,047
7.2%
$444,442
7.9%
$462,637
7.9%
$488,060
8.3%
$520,243
9.0%
$528,836
9.2%
$532,938
9.7%
$534,032
9.7%
$525,834
9.9%
$527,873
10.0%
$542,490
10.2%
$542,490
10.2%
$558,390
9.9%
$560,408
10.0%
$512,375
9.7%
$514,414
9.7%
$512,799
9.6%
$512,799
9.6%
1.15
1.11
1.08
0.93
1.00
1.07
1.17
1.14
1.15
1.15
1.15
Adjusted Operating margin
4.8
6.1
7.0
7.3
8.1
8.6
8.8
9.0
8.8
8.6
8.5
Operating margin
1.5
3.9
5.7
6.6
7.7
8.4
8.7
8.9
8.6
8.4
8.4
Pretax margin
-1.7
1.0
2.3
5.9
6.4
7.0
7.4
7.6
7.2
7.1
7.1
Tax rate
34.3
48.1
33.9
30.2
40.5
39.0
39.7
40.5
40.5
38.4
40.5
Guidance (tax rate):
39.7%
Note: Adjusted results reflect management's best effort to remove impact of LBO related adjustments.
Source: C ompany data and Wells Fargo Securities, LLC estimates
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
EBITDA ($)
EBITDA margin
Adjusted EBITDA ($)
Adjusted EBITDA margin
IT & BPO Services
24
Booz Allen Hamilton Holding Corp.
Annual Earnings Model, FY (March)
(figures in $ thousands, except per share)
Revenue
C ost of revenue
Billable expenses
Gross profit
G&A expenses
LBO amortization
Depreciation and amortization
Restructuring charge
Operating income
Interest income
Interest expense
Other income/(expense)
Pretax income
Income tax expense
Net income - continuing ops.
Discontinued operations
Net Income (GAAP)
EPS - GAAP
EPS - Pro forma (mgt. defined)
Avg. shares outstanding - diluted
Sequential revenue growth:
Yr/Yr % increase:
Revenue
Avg. no. of shares
C ompensation and other costs/rev.
Billable expenses/revenue
Gross Margin
G&A/revenue
D&A/ revenue (x-LBO)
FQ2 2014
Sep-13
FQ3 2014
Dec-13
FQ4 2014
Mar-14
FQ1 2015
Jun-14
FQ2 2015
Sep-14
FQ3 2015E
Dec-14
FQ4 2015E
Mar-15
FQ1 2016E
Jun-15
FQ2 2016E
Sep-15
FQ3 2016E
Dec-15
FQ4 2016E
Mar-16
$1,427,691
701,472
397,888
$1,378,020
685,138
365,632
$1,273,150
662,053
320,370
$1,399,832
667,450
403,225
$1,322,297
645,001
350,972
$1,304,841
642,425
347,651
$1,260,000
636,300
327,600
$1,402,862
690,208
378,773
$1,325,000
646,203
351,125
$1,300,000
637,000
344,500
$1,290,000
645,000
335,400
$1,425,000
684,000
377,625
328,331
171,328
2,113
16,217
0
138,673
0
(20,712)
54
118,015
47,702
70,313
0
70,313
327,250
173,481
2,112
15,990
0
135,667
0
(20,175)
(1,694)
113,798
45,985
67,813
0
67,813
290,727
175,748
2,112
15,833
0
97,034
0
(18,874)
21
78,181
31,014
47,167
0
47,167
329,157
221,970
2,113
15,837
0
89,237
0
(18,269)
(175)
70,793
23,898
46,895
0
46,895
326,324
171,069
1,056
15,176
0
139,023
0
(18,864)
(1,110)
119,049
47,934
71,115
0
71,115
314,765
176,972
1,056
14,754
0
121,983
0
(17,817)
807
104,973
39,689
65,284
0
65,284
296,100
183,960
1,056
14,868
0
96,216
0
(17,800)
0
78,416
31,758
46,658
0
46,658
333,881
213,235
1,056
15,431
0
104,159
0
(17,750)
0
86,409
34,996
51,413
0
51,413
327,673
185,500
1,057
15,238
0
125,878
0
(17,700)
0
108,178
43,812
64,366
0
64,366
318,500
187,200
1,056
15,340
0
114,904
0
(17,650)
0
97,254
39,388
57,866
0
57,866
309,600
190,920
1,056
15,222
0
102,402
0
(17,600)
0
84,802
34,345
50,457
0
50,457
363,375
213,038
1,056
15,675
0
133,607
0
(17,550)
0
116,057
47,003
69,054
0
69,054
$0.48
$0.45
$0.31
$0.30
$0.47
$0.42
$0.30
$0.33
$0.41
$0.37
$0.32
$0.44
$0.50
$0.47
$0.33
$0.33
$0.50
$0.44
$0.32
$0.35
$0.43
$0.39
$0.34
$0.46
147,238
FY(GAAP):
$1.54
FY(GAAP):
$1.52
FY(GAAP):
FY(Adj. per mgt.):
$1.63
FY(Adj. per mgt.):
$1.61
FY(Adj. per mgt.):
148,506
148,835
149,146
149,627
150,404
150,750
151,250
151,950
152,950
153,950
$1.54
$1.62
154,950
-7.6%
-3.5%
-7.6%
10.0%
-5.5%
-1.3%
-3.4%
11.3%
-5.6%
-1.9%
-0.8%
10.5%
0%
3
-1%
3
-9%
3
-9%
2
-7%
2
-5%
1
-1%
1
0%
1
0%
2
0%
2
2%
2
2%
2
49.1%
49.7%
52.0%
47.7%
48.8%
49.2%
50.5%
49.2%
48.8%
49.0%
50.0%
48.0%
27.9
26.5
25.2
28.8
26.5
26.6
26.0
27.0
26.5
26.5
26.0
26.5
23.0
23.7
22.8
23.5
24.7
24.1
23.5
23.8
24.7
24.5
24.0
25.5
12.0
12.6
13.8
15.9
12.9
13.6
14.6
15.2
14.0
14.4
14.8
15.0
$157,003
11.0%
$158,097
11.1%
$153,769
11.2%
$153,769
11.2%
$114,979
9.0%
$114,979
9.0%
$107,187
7.7%
$107,187
7.7%
$155,255
11.7%
$157,294
11.9%
$137,793
10.6%
$137,793
10.6%
$112,140
8.9%
$112,140
8.9%
$120,646
8.6%
$120,646
8.6%
$142,173
10.7%
$142,173
10.7%
$131,300
10.1%
$131,300
10.1%
$118,680
9.2%
$118,680
9.2%
$150,338
10.6%
$150,338
10.6%
1.10
1.14
1.16
1.24
1.13
1.15
1.13
1.18
1.10
1.15
1.18
1.18
Adjusted Operating margin
9.9
10.0
7.8
6.5
10.7
9.4
7.7
7.5
9.6
8.9
8.0
9.5
Operating margin
9.7
9.8
7.6
6.4
10.5
9.3
7.6
7.4
9.5
8.8
7.9
9.4
Pretax margin
Tax rate
8.3
8.3
6.1
5.1
9.0
8.0
6.2
6.2
8.2
7.5
6.6
8.1
40.4
40.4
39.7
33.8
40.3
37.8
40.5
40.5
40.5
40.5
40.5
40.5
Note: Adjusted results reflect management's best effort to remove impact of LBO related adjustments.
Source: C ompany data and Wells Fargo Securities, LLC estimates
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
EBITDA ($)
EBITDA margin
Adjusted EBITDA ($)
Adjusted EBITDA margin
FQ1 2014
Jun-13
Government Services: Market Space Firming
25
Booz Allen Hamilton Holding Corp.
Quarterly Earnings Model
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
IT & BPO Services
Booz Allen Hamilton (BAH)
Operating C ash Flow (OC F) Analysis
$ in millions
Operating C ash Flow (OC F)
C apital Expenditures
Free C ash Flow (FC F)
Acquisitions
Share Repurchases
Dividends
C hange in Debt (from C F)
Revenue
Yr/Yr C hange
Adjusted EBITDA
EBITDA margin
Adjusted Net Income
% of OCF
C apital Expenditures
Acquisitions
Share Repurchases
Dividends
Subtotal
Debt (Increase)/Decrease
FY08
Mar-08
$159.4
(35.2)
124.3
FY09
Mar-09
($6.2)
(46.1)
(52.4)
FY10
Mar-10
$270.5
(49.3)
221.2
FY11
Mar-11
$296.3
(88.8)
207.6
FY12
Mar-12
$360.0
(76.9)
283.1
FY13
Mar-13
$464.7
(33.1)
431.5
FY14
Mar-14
$332.7
(20.9)
311.8
0.0
0.0
0.0
(4.8)
(1,623.7)
0.0
0.0
1,216.8
0.0
0.0
(612.4)
330.4
0.0
0.0
0.0
(596.0)
0.0
0.0
(11.9)
(30.0)
(158.0)
0.0
(1,172.2)
716.9
3.6
0.0
(401.9)
(55.6)
$3,625
NM
226.9
6.3%
NA
$4,351
20%
277.3
6.4%
38.2
$5,123
18%
368.3
7.2%
97.0
$5,591
9%
444.4
7.9%
157.5
$5,859
5%
488.1
8.3%
227.2
$5,758
-2%
528.8
9.2%
239.5
$5,479
-5%
534.0
9.7%
241.9
22%
0%
0%
0%
-22%
NM
NM
0%
0%
NM
18%
0%
0%
226%
208%
30%
0%
0%
0%
-30%
21%
0%
0%
3%
-18%
7%
34%
0%
252%
279%
6%
-1%
0%
121%
113%
3%
NM
-122%
201%
8%
-154%
17%
Note: C arlyle acquisition occurred in July 2008
Note: BAH's IPO occurred in November 2010
Source: C ompany data and Wells Fargo Securities, LLC
26
5-Yr. Avg.
(FY10-FY14)
16%
9%
0%
128%
152%
-21%
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
Government Services: Market Space Firming
Exhibit 25. CACI International (CACI): Tear Sheet, Annual/Quarterly Income Statement,
Operating Cash Flow Analysis
CACI International (CACI) Company Tear-Sheet
($ in millions, except per share)
Price (1/27/14)
$77.46
Investment Positives:
▪ Strong relationships and domain expertise, in our view, specifically at
DoD and Intel agencies.
▪ High client-touch model and strong execution (no troubled projects among
over 2,000 active).
▪ Strong cash flow driven by industry-leading DSO enhances ability to acquire,
in our view.
Company Description:
C AC I is a provider of information technology (IT), network, engineering, and
knowledge management services primarily to the U.S. federal government.
Traditionally strong with intelligence and DoD clients, C AC I is diversifying into
other, better-funded areas, primarily healthcare and cyber. C AC I has been a
meaningful industry consolidator over time, and we expect continued M&A as
federal government end-market growth remains challenged near-term.
Management
C hairman:
C EO:
C FO:
Investment Concerns:
▪ We expect U.S. federal funding to be under pressure for next several years,
leading to competitive pricing.
▪ Government clients remain focused on price/cost reduction, which could
limit the potential for additional margin expansion.
▪ Acquisition integration risk, particularly with large Six3 deal, although
somewhat tempered by C AC I's acquisitive track record.
▪ EPS growth over the past few years helped by large accelerated share
repurchase; we expect cash deployment to now focus on M&A.
▪ Large ($820mm), accretive acquisition of intel-focused Six3, adds high-end
capabilities but increased leverage (>3.0x EBITDA).
Ownership (%)
<1%
<1%
<1%
J. P. London
Ken Asbury
Tom Mutryn
Model Assumptions (3-5 Year View):
Revenue Growth:
Operating Margin:
C ash Deployment:
low-single digits
7-8%
M&A
Potential Catalysts:
▪ Very strong C Q3 2014 contract awards, supporting company's expectation
of a return to revenue growth in FH2 2015.
▪ Opportunity to capture federal clearance investigative work with OPM
given non-renewal of contract option with a competitor (USIS).
$4,000
Revenue ($mm) and Y/Y Growth
FQ1 2015 Revenue by End Market (%)
9%
$3,800
$3,600
C omm. /
I nt'l 6 %
7%
$3,400
Revenue ($mm)
$3,000
Y/Y Growth
3%
$2,800
1%
$2,600
8.0%
7.9%
7.5%
Fed. C ivil
26%
-1%
$2,400
8.5%
8.0%
5%
$3,200
Operating Margin (%)
8.5%
7.4%
7.5%
7.3%
7.2%
7.2%
7.0%
7.0%
-3%
$2,200
$2,000
6.5%
-5%
6.5%
D oD 6 8 %
Price to Earnings (P/E)
Price to Earnings - NTM
18
Average: 11.5x
18
16
16
14
14
12
12
10
10
8
8
6
1/26/10
10/14/10
7/1/11
3/19/12
Financial Metrics
Price (1/27/14)
$77.46
52-Week Range
$67 - $92
Shares O/S (mm)
23.5
Mkt C ap. ($mm)
$1,820
Ent. Value ($mm)
2,930
Fiscal Year
Jun.
Total Headcount
>16,200
Revenue
Our estimate
Street estimate
Adj. Op. Margin
Our estimate
Street estimate
EPS (pro forma)
Our estimate
Street estimate
12/5/12
8/23/13
5/9/14
6
1/27/15
Balance Sheet ($mm)
as of September '14
C ash & Equiv.
$100.0
Total Debt
1,210.2
Share. Equity
1,385.5
Net Debt/C apital
42.8%
Debt/TTM Op. Inc.
3.7x
(Non-GAAP)
Estimates
($ in mm, except EPS)
FY15E
Revenue
$3,430
Our estimate
3,437
Street estimate
FY15E
Adj. Op. Margin
7.2%
Our estimate
7.3
Street estimate
FY15E
EPS (pro forma)
$5.35
Our estimate
5.33
Street estimate
FY16E
$3,525
3,522
FY16E
7.3%
7.4
FY16E
$5.46
5.56
Enterprise Value to EBITDA (EV/EBITDA)
11.0
NTM EV/EBITDA
Average 6.9x
11.0
10.0
10.0
9.0
9.0
8.0
8.0
7.0
7.0
6.0
6.0
5.0
5.0
4.0
1/26/10
11/26/10
9/27/11
7/27/12
5/28/13
3/28/14
4.0
1/27/15
CACI- US (24-Jan-2014 to 27- Jan-2015, Daily)
90
90
85
85
80
80
75
75
70
70
65
65
Volume in Millions
1,600
800
0
F eb
M ar
A pr
M ay
Jun
Jul
A ug
Se p
O ct
N ov
D ec
Jan
Source for all tables/charts: C ompany data, ThomsonOne, FactSet, and Wells Fargo Securities, LLC estimates
27
Annual Earnings Model
($ in thousands, exc ept per share amounts)
Not Restated Not Restated
FY2008
FY2009
(June)
(June)
FY2010
(June)
FY2011
(June)
FY2012
(June)
FY2013
(June)
FY2014
(June)
Revenue guidance:
Gross revenue
Direc t costs
Indirect and selling expenses
EBITDA
Deprec iation and amortization
Operating Income
Net interest inc ome (expense)
Other inc ome (expense)
Pretax inc ome
Inc ome tax expense
Nonc ontrolling interest in JV
Net income from continuing ops.
FY2015E
(June)
FY2016E
(June)
CY2013
(Dec)
CY2014E
(Dec)
CY2015E
(Dec)
$3.3-3.6bn
$2,420,537
$2,730,162
$3,149,131
$3,577,780
$3,774,473
$3,681,990
$3,564,562
$3,430,000
$3,525,000
$3,577,578
$3,450,837
$3,467,274
1,625,591
1,871,884
2,207,574
2,528,660
2,598,890
2,535,606
2,426,520
2,273,220
2,346,345
2,458,414
2,316,110
2,299,112
584,600
627,572
693,736
741,652
819,772
821,465
815,458
837,083
856,122
798,314
826,095
845,807
210,346
230,706
247,821
307,468
355,811
324,919
322,584
319,697
322,533
320,850
308,632
322,355
47,517
46,592
53,039
56,067
55,962
54,078
65,181
71,158
66,438
56,692
70,876
68,897
162,829
184,114
194,782
251,401
299,849
270,841
257,403
248,539
256,096
264,158
237,756
253,458
(25,198)
(22,323)
(26,353)
(23,144)
(24,101)
(25,818)
(38,158)
(36,080)
(35,200)
(29,649)
(39,394)
(35,800)
-
-
-
-
-
-
-
-
-
-
-
-
137,631
161,791
168,429
228,257
275,748
245,023
219,245
212,459
220,896
234,509
198,362
217,658
54,308
66,311
61,171
83,105
107,537
92,347
83,326
81,892
85,045
89,501
75,546
83,798
-
-
(743)
(934)
(757)
(987)
83,323
95,480
106,515
144,218
167,454
151,689
$2.72
$3.14
$3.47
$4.61
$5.96
$6.35
(422)
135,497
(127)
130,440
-
(749)
IT & BPO Services
28
CACI International Inc.
(201)
-
135,851
144,259
122,615
133,859
$5.46
$5.88
$4.96
$5.42
24,539
24,711
24,675
Net income guidance: $125-135mm
EPS (GAAP)
Avg. Diluted Shares (GAAP)
$5.39
$5.35
EPS guidance (GAAP):
$5.10-5.51
23,885
25,156
Guidance (avg. shares):
24,364
24.5mm
24,900
30,606
30,427
30,677
31,301
28,111
25%
13%
15%
14%
5%
(2%)
(3%)
(4%)
3%
(4%)
(4%)
14
10
13
12
2
(6)
(11)
(8)
3
NA
NA
NA
14
8
(2)
10
15
(1)
7
11
1
24
33
2
16
29
(10)
(9)
7
(15)
(1)
(15)
5
(1)
(1)
(3)
1
2
2
(5)
(5)
(5)
(4)
(16)
1
4
9
(0)
67.2%
24.2
8.7
2.0
6.7
(0.8)
68.6%
23.0
8.5
1.7
6.7
0.0
70.1%
22.0
7.9
1.7
6.2
(0.6)
70.7%
20.7
8.6
1.6
7.0
0.8
68.9%
21.7
9.4
1.5
7.9
0.9
68.9%
22.3
8.8
1.5
7.4
(0.6)
68.1%
22.9
9.0
1.8
7.2
(0.1)
66.3%
24.4
9.3
2.1
7.2
0.0
66.6%
24.3
9.1
1.9
7.3
0.0
68.7%
22.3
9.0
1.6
7.4
(0.2)
67.1%
23.9
8.9
2.1
6.9
(0.5)
66.3%
24.4
9.3
2.0
7.3
0.4
5.7
39.5
5.9
41.0
5.3
36.3
6.4
36.4
7.3
39.0
6.7
6.2
37.7
38.0
Guidanc e (op. mgn.)
Guidance (tax rate)
6.2
38.5
~7.2-7.3%
38.5%
6.3
38.5
6.6
38.2
5.7
38.1
6.3
38.5
Yr/Yr % Increase:
Revenue
Organic revenue
EBITDA
EPS
Avg. No. Of Diluted Shares
Pretax margin
Tax rate
Source: Company data and Wells Fargo Securities, LLC estimates
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
Direc t costs/ revenue
Indirect costs/ revenue
EBITDA margin
Depr & amort./ revenue
Operating margin
Yr/yr c hange in operating margin
0%
Quarterly Earnings Model
($ in thousands, except per share amounts)
Gross revenue
FQ1 2014
(Sep 2013)
FQ2 2014
(Dec 2013)
FQ3 2014
(Mar 2014)
FQ4 2014
(Jun 2014)
FQ1 2015
(Sep 2014)
FQ2 2015E
(Dec 2014)
FQ3 2015E
(Mar 2015)
FQ4 2015E
(Jun 2015)
FQ1 2016E
(Sep 2015)
FQ2 2016E
(Dec 2015)
FQ3 2016E
(Mar 2016)
FQ4 2016E
(Jun 2016)
$864,265
$894,186
$900,393
$905,718
$814,726
$830,000
$870,000
$915,274
$831,000
$851,000
$901,000
$942,000
Direct costs
601,422
606,672
605,780
612,646
536,604
561,080
575,940
599,596
555,108
568,468
599,165
623,604
Indirect and selling expenses
188,710
204,830
216,164
205,754
200,827
203,350
211,410
221,496
205,257
207,644
217,141
226,080
74,133
82,684
78,449
87,318
77,295
65,570
82,650
94,182
70,635
74,888
84,694
92,316
EBITDA
Depreciation and amortization
12,951
16,230
17,917
18,083
17,236
17,640
17,960
18,322
16,233
16,383
16,758
17,065
61,182
66,454
60,532
69,235
60,059
47,930
64,690
75,860
54,403
58,506
67,937
75,251
(7,388)
(9,456)
(11,480)
(9,834)
(9,080)
(9,000)
(9,000)
(9,000)
(8,950)
(8,850)
(8,750)
(8,650)
-
-
-
-
-
-
-
-
-
-
-
-
Pretax income
53,794
56,998
49,052
59,401
50,979
38,930
55,690
66,860
45,453
49,656
59,187
66,601
Income tax expense
20,402
22,088
18,043
22,793
19,722
14,988
21,441
25,741
17,499
19,117
22,787
25,641
-
-
-
-
-
-
Operating Income
Net interest income (expense)
Other
Noncontrolling interest in JV
Net income from cont. ops.
EPS (GAAP)
(400)
52
-
(74)
-
32,992
34,962
31,009
36,534
31,130
23,942
34,249
41,119
27,953
30,538
36,400
40,960
$1.33
$1.38
$1.19
$1.49
$1.29
$0.99
$1.40
$1.67
$1.13
$1.23
$1.46
$1.64
FY:
Avg. Diluted Shares (GAAP)
(127)
24,835
25,297
25,973
$5.39
24,517
FY:
24,104
24,250
24,450
$5.35
FY:
Government Services: Market Space Firming
29
CACI International Inc.
$5.46
24,650
24,750
24,850
24,950
25,050
3%
Yr/Yr % Increase:
Revenue
Organic revenue
EBITDA
EPS
Avg. No. Of Diluted Shares
Pretax margin
Tax rate
(4%)
(1%)
(1%)
(6%)
(7%)
(3%)
1%
2%
3%
4%
(9)
(11)
(12)
(13)
(16)
(16)
(3)
1
2
3
4
3
(5)
(11)
4
(0)
(18)
7
(5)
(26)
10
7
(4)
1
4
(3)
(3)
(21)
(29)
(4)
5
17
(6)
8
12
1
14
24
2
2
4
2
(2)
(2)
2
69.6%
21.8
8.6
1.5
7.1
0.1
67.8%
22.9
9.2
1.8
7.4
(0.0)
67.3%
24.0
8.7
2.0
6.7
(0.8)
67.6%
22.7
9.6
2.0
7.6
0.2
65.9%
24.6
9.5
2.1
7.4
0.3
67.6%
24.5
7.9
2.1
5.8
(1.7)
66.2%
24.3
9.5
2.1
7.4
0.7
65.5%
24.2
10.3
2.0
8.3
0.6
66.8%
24.7
8.5
2.0
6.5
(0.8)
66.8%
24.4
8.8
1.9
6.9
1.1
66.5%
24.1
9.4
1.9
7.5
0.1
66.2%
24.0
9.8
1.8
8.0
(0.3)
6.2
38.2
6.4
38.7
5.4
36.8
6.6
38.4
6.3
38.8
4.7
38.5
6.4
38.5
7.3
38.5
5.5
38.5
5.8
38.5
6.6
38.5
7.1
38.5
Source: Company data and Wells Fargo Securities, LLC estimates
(9)
(13)
3
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
Direct costs/ revenue
Indirect costs/ revenue
EBITDA margin
Depr & amort./ revenue
Operating margin
Yr/yr change in operating margin
(7%)
$ in millions
Operating C ash Flow (OC F)
C apital Expenditures
Free C ash Flow (FC F)
Acquisitions
Share Repurchases
Dividends
C hange in Debt (from C F)
Revenue
Yr/Yr C hange
EBITDA
EBITDA margin
Net Income
% of Operating Cash Flow
C apital Expenditures
Acquisitions
Share Repurchases
Dividends
Subtotal
Debt (Increase)/Decrease
FY05
Jun-05
$131.6
(8.8)
122.8
FY06
Jun-06
$106.9
(9.5)
97.4
FY07
Jun-07
$143.1
(7.9)
135.2
FY08
Jun-08
$187.1
(13.6)
173.5
FY09
Jun-09
$151.1
(12.4)
138.7
FY10
Jun-10
$258.6
(22.5)
236.1
FY11
Jun-11
$249.6
(14.4)
235.2
FY12
Jun-12
$300.6
(18.3)
282.3
FY13
Jun-13
$217.1
(15.4)
201.6
FY14
Jun-14
$198.6
(15.3)
183.4
(6.6)
(8.4)
0.0
(65.7)
(244.3)
(7.5)
0.0
21.4
(106.2)
(50.3)
0.0
236.2
(315.9)
(2.0)
0.0
(3.4)
(26.5)
(23.7)
0.0
(3.9)
(87.9)
(3.5)
0.0
(53.6)
(129.7)
(53.6)
0.0
(138.4)
(185.9)
(316.6)
0.0
116.3
(107.0)
(127.5)
0.0
46.9
(839.1)
(3.7)
0.0
660.9
$1,623
42%
183.1
11.3%
85.3
$1,755
8%
183.7
10.5%
84.8
$1,938
10%
184.9
9.5%
78.5
$2,421
25%
210.3
8.7%
83.3
$2,730
13%
230.7
8.5%
95.5
$3,149
15%
247.8
7.9%
106.5
$3,578
14%
307.5
8.6%
144.2
$3,774
5%
355.8
9.4%
167.5
$3,682
-2%
324.9
8.8%
151.7
$3,565
-3%
322.6
9.0%
135.5
IT & BPO Services
30
CACI International (CACI)
Operating C ash Flow (OC F) Analysis
7%
5%
6%
0%
5%
9%
228%
7%
0%
227%
6%
74%
35%
0%
104%
7%
169%
1%
0%
163%
8%
18%
16%
0%
25%
9%
34%
1%
0%
27%
6%
52%
21%
0%
68%
6%
62%
105%
0%
161%
7%
49%
59%
0%
101%
8%
422%
2%
0%
417%
5-Yr. Avg.
(FY10-FY14)
7%
110%
41%
0%
158%
50%
-20%
-165%
2%
3%
21%
55%
-39%
-22%
-333%
-52%
Source: C ompany data and Wells Fargo Securities, LLC
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
Government Services: Market Space Firming
Exhibit 26. ICF International (ICFI): Tear Sheet, Annual/Quarterly Income Statement
ICF International (ICFI) Company Tear-Sheet
($ in millions, except per share)
Price (1/27/15)
$38.77
Company Description:
IC F International is a provider of consulting, advisory, program management, and
implementation services to U.S. federal government, state and local government,
international government and commercial clients. C ompared to competitors in the
government services market, IC FI has a significantly higher exposure to civilian
agencies, particularly in healthcare areas, a far more limited Defense Department
footprint, and broader and deeper base of commercial/international work.
Management
C hairman/C EO:
President/C OO:
C FO:
Investment Concerns:
▪ While U.S. federal government and DoD exposure more limited than peers',
civilian agencies still exposed to overall budget pressures.
▪ Acquisition integration risk, particularly given management's desire to
continue to diversify business away from historical federal government focus.
▪ Internal revenue growth still paced, although compares getting easier.
▪ C ontinued push into commercial/international markets could lead to greater
competition from larger providers, although subject-matter expertise limits.
▪ Large S&L exposure to fiscally challenged C alifornia market.
Ownership (%)
1.5%
<1%
<1%
Sudhakar Kesavan
John Wasson
James Morgan
Model Assumptions (3-5 Year View):
Revenue Growth:
Organic
3-8%
Operating Margin:
7-9%
C ash Deployment:
M&A; Debt Reduction;
Share Repurchase
$1,400
Revenue ($mm) and Y/Y Growth
12%
Revenue ($mm)
$1,200
Potential Catalysts:
▪ Recent Olson acquisition further diversifies away from U.S. federal government
and into higher-growth potential areas, but large size ($295mm) and
leverage (3.0x+) increases integration risks, in our view.
Q3 2014 Revenue by End Market (%)
I nt'l 8 %
10%
Y/Y Growth (organic)
Investment Positives:
▪ Acquisitions (notably Olson, Ironworks, GHK, and Nostra) help to transition
business away from more challenging U.S. federal government end markets.
▪ C ommercial revenue (~40% of revenue) growing faster and offers higher
margin potential than U.S. federal government business which is now
less than 50% of the total.
▪ Non-DoD focus and capabilities in healthcare and energy tilt revenue into
relatively better funded areas within the U.S. federal government.
▪ Solid cash flows, in our view, facilitating M&A and continued debt reduction.
Operating Margin (%)
10%
U .S. S&L
11%
9%
9%
8%
$1,000
7.9%
8%
6%
$800
4%
$600
7.0%
U .S.
C omm'l
29%
7.0%
0%
6.9%
6.8%
7%
2%
$400
10%
8%
7%
6%
6%
5%
5%
U .S .
Federal
52%
Price to Earnings (P/E)
18
Enterprise Value to EBITDA (EV/EBITDA)
Price to Earnings - NTM
Average: 13.8x
18
17
17
16
16
15
15
14
14
13
13
12
12
11
11
10
10
9
8
1/26/10 10/14/10
9
7/1/11
3/19/12
Financial Metrics
Price (1/27/15)
$38.77
52-Week Range
$30 - $44
Shares O/S (mm)
19.4
Mkt C ap. ($mm)
$752
Ent. Value ($mm)
860
Fiscal Year
Dec.
Total Headcount
5,000+
Revenue
Our estimate
Street estimate
Op. Mgn (GAAP)
Our estimate
Street estimate
EPS
Our estimate
Street estimate
12/5/12
8/23/13
5/9/14
8
1/27/15
Balance Sheet ($mm)
as of September '14
C ash & Equiv.
$7.5
Total Debt
115.2
Share. Equity
488.7
Net Debt/C apital
17.8%
Debt/TTM EBITDA
1.3x
Estimates
($ in mm, except EPS)
FY14E
Revenue
$1,055
Our estimate
1,052
Street estimate
FY14E
Op. Mgn (GAAP)
6.9%
Our estimate
7.0
Street estimate
FY14E
EPS
$2.25
Our estimate
2.24
Street estimate
FY15E
$1,250
1,254
FY15E
7.9%
7.6
FY15E
$2.70
2.63
11
NTM EV/EBITDA
11
Average 7.1x
10
10
9
9
8
8
7
7
6
6
5
5
4
1/26/10 10/14/10
7/1/11
3/19/12
12/5/12
8/23/13
5/9/14
4
1/27/15
ICFI- US (24-Jan-2014 to 27-Jan- 2015, Daily)
46
46
44
44
42
42
40
40
38
38
36
36
34
34
32
32
30
30
Volume in Millions
800
400
0
F eb
M ar
A pr
M ay
J un
J ul
A ug
S ep
O ct
N ov
D ec
J an
Source for all tables/charts: C ompany data, ThomsonOne, FactSet, and Wells Fargo Securities, LLC estimates
31
(figures in $ thousands, except per share)
2006
"C ore" revenue
Road Home revenue
Gross revenue
Direct costs
Gross profit
Indirect and selling expenses
Other expense (credit)
EBITDA
Depreciation, amortization
Amortization of intangibles
Operating income
Interest income (expense), net
Other income (expense), net
Pre-tax income
Income tax expense (benefit)
Net income from continuing ops
Income from discontinued ops
Net income
Add: one-time items
Adjusted net income
2007
2008
2009
2010
2011
$215,779
$267,720
$432,627
$614,099
$764,734
$840,775
115,500
459,400
264,800
60,300
$331,279
$727,120
$697,427
$674,399
$764,734
$840,775
217,747
532,153
460,002
411,334
476,187
520,522
113,532
194,967
237,425
263,065
288,547
320,253
79,856
117,428
171,260
202,061
217,933
241,062
7,200
700
(900)
1,367
600
26,476
76,839
67,065
59,637
70,014
79,191
2,054
2,432
5,407
9,416
10,774
10,757
1,482
3,884
8,683
11,137
12,327
9,550
22,940
70,523
52,975
39,084
46,913
58,884
(3,509)
(1,944)
(4,083)
(5,106)
(3,403)
(2,248)
646
519
581
1,005
172
124
20,077
69,098
49,473
34,983
43,682
56,760
8,210
28,542
20,750
12,627
16,511
21,895
11,867
40,556
28,723
22,356
27,171
34,865
11,867
40,556
28,723
22,356
27,171
34,865
4,256
(523)
16,123
40,556
28,200
22,356
27,171
34,865
2012
$937,133
$937,133
583,195
353,938
263,896
90,042
10,351
14,089
65,602
(3,384)
(307)
61,911
23,836
38,075
38,075
38,075
2013
2014E
Guidance:
$ 1,040-1,060mm
$949,303
$1,055,000
$1,250,000
$949,303 $1,055,000 $1,250,000
591,516
660,299
763,722
$357,787
$394,701
$486,278
272,387
297,897
352,797
$85,400
$96,803
$133,481
11,238
13,500
16,778
9,477
10,550
18,240
$64,685
$72,753
$98,463
(2,447)
(4,148)
(9,750)
(12)
(991)
$62,226
$67,614
$88,713
22,896
25,190
33,711
$39,330
$42,424
$55,002
39,330
42,424
55,002
2,404
39,330
44,828
55,002
GA A P Guidance:
EPS (GAAP)
EPS (Pro forma)
$1.10
$1.49
$2.72
$2.72
$1.88
$1.85
$1.40
$1.40
$1.38
$1.38
$1.75
$1.75
$1.91
$1.91
$1.95
$1.95
P ro fo rma Guidance:
Avg. shares outstanding-diluted
Gross margin
Indirect costs/revenue
EBITDA margin
Operating margin
Pretax margin
Net margin
Tax rate
14,896
15,270
15,914
19,626
19,928
19,957
20,186
$ 2.12-2.20
$2.13
$2.25
$2.70
$2.70
$ 2.19-2.27
19,949
20,375
87%
3
139
313
417
487
429
119%
11
190
207
244
242
148
-4%
20
-13
-25
-28
-29
-31
-3%
16
-11
-26
-29
-22
-25
13%
14
17
20
25
22
-1
10%
10
13
26
30
28
26
11%
1
14
11
9
9
9
1%
0
-5
-1
1
3
2
11%
3
13
12
9
8
9
18%
5
38
35
31
30
27
34.3%
24.1
8.0
6.9
6.1
3.6
40.9
26.8%
16.1
10.6
9.7
9.5
5.6
41.3
34.0%
24.6
9.6
7.6
7.1
4.1
41.9
39.0%
30.0
8.8
5.8
5.2
3.3
36.1
37.7%
28.5
9.2
6.1
5.7
3.6
37.8
38.1%
28.7
9.4
7.0
6.8
4.1
38.6
37.8%
28.2
9.6
7.0
6.6
4.1
38.5
37.7%
28.7
9.0
6.8
6.6
4.1
36.8
37.4%
28.2
9.2
6.9
6.4
4.0
37.3
38.9%
28.2
10.7
7.9
7.1
4.4
38.0
Tax rate guidance:
37.0%
Source: C ompany data and Wells Fargo Securities, LLC estimates
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
Yr/Yr Δ
Revenue
Organic "core" revenue
EBITDA
Operating income
Pretax income
Net income from cont. ops
EPS (GAAP)
10,796
2015E
IT & BPO Services
32
ICF International (ICFI)
Annual Earnings Model
(figures in $ thousands, except per share)
Q1:13
"C ore" revenue
Road Home revenue
Gross revenue
Direct costs
Gross profit
Indirect and selling expenses
Other expense (credit)
EBITDA
Depreciation, amortization
Amortization of intangibles
Operating income
Interest income (expense), net
Other income (expense), net
Pre-tax income
Income tax expense (benefit)
Net income from continuing ops
Income from discontinued ops
Net income
Add: one-time items (our ests.)
Adjusted net income
EPS (GAAP)
EPS (Pro forma)
Avg. shares outstanding-diluted
Gross margin
Indirect costs/revenue
EBITDA margin
Operating margin
Pretax margin
Net margin
Tax rate
Q3:13
Q4:13
Q1:14
Q2:14
Q3:14
Q4:14E
Q1:15E
Q2:15E
Q3:15E
Q4:15E
$233,921
$233,921
142,818
91,103
68,262
$241,568
$241,568
151,528
90,040
67,604
$244,055
$244,055
154,024
90,031
67,647
$229,759
$229,759
143,146
86,613
68,874
$245,052
$245,052
153,730
91,322
69,637
$263,860
$263,860
166,667
97,193
74,232
$264,796
$264,796
166,064
98,732
74,704
$281,292
$281,292
173,838
107,454
79,324
$305,000
$305,000
186,965
118,035
86,620
$313,000
$313,000
190,930
122,070
88,892
$319,000
$319,000
194,271
124,729
89,958
$313,000
$313,000
191,556
121,444
87,327
22,841
2,799
2,393
17,649
(768)
78
16,959
6,847
10,112
22,436
2,782
2,359
17,295
(626)
(9)
16,660
6,329
10,331
22,384
2,771
2,459
17,154
(476)
140
16,818
5,687
11,131
17,739
2,886
2,266
12,587
(577)
(221)
11,789
4,033
7,756
21,685
3,076
1,959
16,650
(714)
(35)
15,901
6,185
9,716
22,961
3,190
2,197
17,574
(774)
(621)
16,179
6,181
9,998
24,028
3,227
2,273
18,528
(800)
(335)
17,393
5,840
11,553
28,129
4,007
4,121
20,001
(1,860)
18,141
6,984
11,157
31,415
4,082
4,560
22,773
(2,600)
20,173
7,666
12,507
33,178
4,157
4,560
24,461
(2,500)
21,961
8,345
13,616
34,771
4,232
4,560
25,979
(2,400)
23,579
8,960
14,619
34,117
4,307
4,560
25,250
(2,250)
23,000
8,740
14,260
10,112
10,112
10,331
10,331
11,131
11,131
7,756
7,756
9,716
203
9,919
9,998
1,492
11,490
11,553
709
12,262
11,157
11,157
12,507
12,507
13,616
13,616
14,619
14,619
14,260
14,260
$0.51
$0.51
$0.52
$0.52
$1.95
$0.38
$0.38
$0.48
$0.49
$0.50
$0.57
$2.13
$0.57
$0.57
$0.62
$0.62
$0.67
$0.67
19,875
19,996
20,233
20,277
20,082
19,725
20,300
20,350
C Y13:
$0.55
$0.55
20,165
C Y14 (GAAP):
$0.59
$0.62
19,713
C Y15:
$0.72
$0.72
20,400
$2.70
$0.70
$0.70
20,450
3%
1
6
9
14
13
14
1%
1
-8
-4
-3
0
0
3%
2
-4
2
5
16
14
-1%
-2
-15
-13
-15
-16
-18
5%
0
-5
-6
-6
-4
-6
9%
2
2
2
-3
-3
-4
8%
2
7
8
3
4
6
22%
7
59
59
54
44
48
24%
6
45
37
27
29
29
19%
3
44
39
36
36
34
20%
5
45
40
36
27
22
11%
7
21
26
27
28
23
38.9%
29.2
9.8
7.5
7.2
4.3
40.4
37.3%
28.0
9.3
7.2
6.9
4.3
38.0
36.9%
27.7
9.2
7.0
6.9
4.6
33.8
37.7%
30.0
7.7
5.5
5.1
3.4
34.2
37.3%
28.4
8.8
6.8
6.5
4.0
38.9
36.8%
28.1
8.7
6.7
6.1
3.8
38.2
37.3%
28.2
9.1
7.0
6.6
4.4
33.6
38.2%
28.2
10.0
7.1
6.4
4.0
38.5
38.7%
28.4
10.3
7.5
6.6
4.1
38.0
39.0%
28.4
10.6
7.8
7.0
4.4
38.0
39.1%
28.2
10.9
8.1
7.4
4.6
38.0
38.8%
27.9
10.9
8.1
7.3
4.6
38.0
Source: C ompany data and Wells Fargo Securities, LLC estimates
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
Yr/Yr Δ
Revenue
Organic "core" revenue
EBITDA
Operating income
Pretax income
Net income from cont. ops
EPS (GAAP)
Q2:13
Government Services: Market Space Firming
33
ICF International (ICFI)
Quarterly Earnings Model
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
IT & BPO Services
Exhibit 27. Leidos (LDOS): Tear Sheet, Annual/Quarterly Income Statement, Operating Cash
Flow Analysis (LDOS and “legacy” SAIC)
Leidos (LDOS) Company Tear-Sheet
($ in millions, except per share)
Price (1/27/15)
$42.44
Company Description:
Leidos is a provider of national security, intelligence, healthcare, and engineering
solutions to the U.S. federal government (~80% of revenue) and commercial
(~20%) clients. LDOS is the renamed parent entity in the split-up of the former
SAIC (SAI) into "solutions"-focused LDOS and "services"-focused new SAIC . LDOS
was the larger (~$6 billion at the time of the split) and higher margin part of the
prior combined business.
Management
C EO:
C FO:
Ownership (%)
<1%
<1%
Roger Krone
Mark Sopp
Model Assumptions (3-5 Year View):
Revenue Growth:
Low single digit decline
Adj. Op Mgn.:
~8%
C ash Deployment:
Regular dividend, support organic
investment, debt pay down
$7,000
Revenue ($mm) and Y/Y Growth
$6,500
FQ3 2015 Revenue by Segment (%)
Y/Y Growth
5%
GAAP Operating Margin (%)
10%
H ealth &
E ngineer.
Sec tor
29%
10%
$6,000
Investment Concerns:
▪ Prior commitment to return "excess" cash (i.e. above $200mm) to shareholders
now unclear as the new C EO takes a more cautious approach near-term
to cash deployment, in our view.
▪ Government sector still facing budget uncertainty, declining spending
(particularly DoD), regular contract protests and decision-making delays.
▪ Declining in-theater revenue still represents ~$400mm of revenue (~8% of
total) and is relatively higher margin work.
▪ Engineering business (~17% of total) has had some troubled projects and
has a relatively higher risk profile, in our view, although management is
taking steps to restructure and reduce risk in this business.
▪ Large Plainfield, C T renewable energy project continues to underperform.
Potential Catalysts:
▪ Improved clarity on capital deployment plans, especially around potential
distribution of "excess" cash.
15%
Reven ue ($mm)
Investment Positives:
▪ Removed organizational conflicts of interest (OC I) expands market opportunity.
▪ C urrent dividend yield (~3%) provides downside risk support for the shares, as
well as the potential for return of "excess" cash to shareholders.
▪ Taking steps to lower costs and improve or remove underperforming
segments (e.g. commercial health and commercial engineering).
8%
9.5%
10%
7.3%
6.5%
8%
6%
6%
4%
4%
0%
$5,500
-5%
$5,000
2%
-10%
0%
0%
-15%
$4,500
2%
2.8%
N ational
Sec urity
S ec tor
71%
Price to Earnings (P/E)
20
Enterprise Value to EBITDA (EV/EBITDA)
Price to Earnings - NTM
Average: 12.0x
18
20
18
11
NTM EV/EBITDA
11
Average 6.6x
10
10
9
9
8
8
7
7
6
6
16
16
14
14
12
12
10
10
5
5
8
4
4
8
6
1/26/10 10/14/10
7/1/11
3/19/12
Financial Metrics
Price (1/27/15)
$42.44
52-Week Range
$32 - $46
Shares O/S (mm)
74.0
Mkt C ap. ($mm)
$3,141
Ent. Value ($mm)
4,115
Fiscal Year
Jan.
Total Headcount
22,000
Revenue
Our estimate
Street estimate
Op. Margin
Our estimate
Street estimate
EPS
Our estimate
Street estimate
12/5/12
8/23/13
5/9/14
6
1/27/15
Balance Sheet ($mm)
as of Oct '14
C ash & Equiv.
$358
Total Debt
1,332
Share. Equity
957
Net Debt/C apital
42.6%
Debt/TTM EBITDA
3.1x
Estimates
($ in mm, except EPS)
FY15E
Revenue
$5,080
Our estimate
5,090
Street estimate
FY15E
Op. Margin
-3.7%
Our estimate
7.0%
Street estimate
FY15E
EPS
$2.30
Our estimate
2.32
Street estimate
FY16E
$5,000
4,946
FY16E
7.3%
7.4
FY16E
$2.60
2.52
3
1/26/10 10/14/10
7/1/11
12/5/12
8/23/13
5/9/14
3
1/27/15
LDOS-US (24-Jan- 2014 to 27-Jan- 2015, Daily)
46
46
44
44
42
42
40
40
38
38
36
36
34
34
32
32
Volume in Millions
4,000
2,000
0
F eb
M ar
A pr
Source for all tables/charts: C ompany data, ThomsonOne, FactSet, and Wells Fargo Securities, LLC estimates
34
3/19/12
M ay
J un
J ul
A ug
S ep
O ct
N ov
D ec
J an
P ro fo rma
FY 2009
C Y 2008
(Jan 09)
FY 2010
C Y 2009
(Jan 10)
FY 2011
C Y 2010
(Jan 11)
National Security (NSS)
Health & Engineering (H&E)
Adjustments (incl. C ityTime)
Revenue
C ost of revenue
FY 2012
C Y 2011
(Jan 12)
$4,631
1,622
(393)
FY 2013
C Y 2012
(Jan 13)
$4,646
1,831
(8)
Restated
FY 2014
C Y 2013
(Jan 14)
Guidance:
$4,049
1,718
(12)
FY 2015E
C Y 2014E
(Jan 15)
$4.9-5.1bn
$3,625
1,462
(7)
$5,425
NA
$5,687
NA
$6,058
5,088
$5,860
5,299
$6,469
5,564
$5,755
4,992
NA
NA
970
561
905
763
NA
NA
352
413
469
440
329
13
160
527
423
163
(186)
Gross profit
SG&A
Other operating income (exp.)
Operating income
C ityTime:
571
513
618
(410)
558
Net interest income/ (expense)
NA
NA
NA
NA
Other income/(expense)
NA
NA
NA
NA
8
NA
NA
543
449
347
NA
NA
190
163
23
Pretax income
Provision for income taxes
Earnings allocated to participating securities
(84)
7
$5,080
4,410
670
(67)
(73)
(8)
1
88
(258)
4
66
-
-
FY 2016E
C Y 2015E
(Jan 16)
$3,590
1,410
0
$5,000
4,288
712
346
0
366
(64)
302
109
-
Discontinued operations
Net income (GAAP)
18
281
17
302
61
414
67
353
201
518
80
164
(12)
(336)
193
Net income (cont. ops.)
263
285
353
286
317
84
(324)
193
NA
NA
414
353
(11)
514
(3)
161
343
8
193
$2.30
$2.60
Back out from net income:
Nonrecurring items
Net income for computing EPS
EPS - Non-GAAP
EPS - GAAP (cont. ops.)
NA
NA
NA
NA
$2.84
$2.36
2.87
3.11
3.86
3.40
3.82
0.98
Non-GAAP EPS Guidance (C ont. Ops.):
Avg. shares outstanding-diluted
92
92
92
84
83
(4.32)
2.60
$2.10-2.30
83
75
74
Revenue
NA
5%
7%
-3%
10%
-11%
-12%
-2%
Operating income
NA
(10)
20
(10)
(24)
(61)
(214)
(297)
NA
-
-
(8)
(1)
-
(10)
(1)
Gross margin
SG&A/ revenue
NA
NA
NA
NA
16.0
5.8
9.6
7.0
14.0
7.2
13.3
7.6
13.2
6.5
14.2
6.9
EBITDA
EBITDA margin
$0
NA
$0
NA
NA
NA
NA
NA
$515
8.0%
242
4.2%
$408
8.0%
$430
8.6%
10.5
9.0
10.2
9.5
6.5
2.8
-3.7
7.3
NA
NA
NA
NA
NA
35.0
7.7
36.3
5.4
6.6
1.5
4.5
-5.1
35.2
(FY15 adj.)
36-37%
6.0
36.0
Operating margin
Pretax margin (cont. ops)
Tax rate
Tax rate (pro forma):
Note: FY2009-11 financials derived from subtracting "new" SAIC data from September 2013 F-10 filing from prior combined results.
Note: FY2014 (annual and quarterly) financials restated per updated financials provided with FQ2 2015 management slides.
Source: C ompany data and Wells Fargo Securities, LLC estimates
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
Yr/Yr % increase:
Avg. no. of shares
Government Services: Market Space Firming
35
Leidos Holdings, Inc.
Annual Earnings Model
($ in millions, except per share data)
Restated
Q1 FY14
(Apr 13)
National Security (NSS)
Health & Engineering (H&E)
Adjustments (incl. C ityTime)
$1,077
517
(1)
Revenue
C ost of revenue
Gross profit
SG&A
Other operating income (exp.)
Operating income
Net interest income/ (expense)
Other income/(expense)
$1,019
445
(7)
Restated
Q3 FY14
(Oct 13)
$1,011
406
(3)
Restated
Q4 FY14
(Jan 14)
$942
350
(1)
Restated
Q1 FY15
(Apr 14)
$944
372
(4)
$925
381
0
Q3 FY15
(Oct 14)
$906
373
(3)
Q4 FY15E
(Jan 15)
Q1 FY16E
(Apr 15)
Q2 FY16E
(Jul 15)
Q3 FY16E
(Oct 15)
Q4 FY16E
(Jan 16)
$850
336
0
$890
340
0
$895
350
0
$900
360
0
$905
360
0
$1,457
1,293
$1,414
1,219
$1,291
1,107
$1,312
1,141
$1,306
1,119
$1,276
1,115
$1,186
1,035
$1,230
1,059
$1,245
1,070
$1,260
1,078
$1,265
1,081
220
164
195
184
171
187
161
151
171
175
182
184
125
105
113
97
84
87
72
86
84
85
88
18
49
87
6
510
17
-
77
10
(5)
81
87
(16)
(12)
(16)
(23)
(20)
-
2
(11)
47
(19)
2
(1)
(430)
(2)
(19)
21
(6)
(11)
Discontinued operations
Net income (GAAP)
40
81
38
42
5
(3)
(3)
44
(9)
36
Net income (cont. ops.)
41
4
(8)
47
45
Back out from net income:
Nonrecurring items
Net income for computing EPS
11
92
30
72
53
50
44
36
$0.58
$0.53
-
(410)
69
62
Provision for income taxes
Q2 FY15
(Jul 14)
$1,593
1,373
1
Pretax income
Restated
Q2 FY14
(Jul 13)
24
-
-
-
-
89
-
72
65
87
90
94
95
(18)
(16)
(16)
(16)
(16)
(16)
-
-
-
-
-
-
54
49
71
74
78
79
16
17
26
27
28
28
(4)
34
32
45
47
50
51
(439)
38
32
45
47
50
51
332
(107)
12
46
32
45
47
50
51
$0.44
$0.61
$0.64
$0.67
0.44
0.61
0.64
0.67
9
IT & BPO Services
36
Leidos Holdings, Inc.
Quarterly Earnings Model
($ in millions, except per share data)
Earnings allocated to participating securities
FY14 (non-GAAP):
EPS - Non-GAAP
EPS - GAAP (cont. ops.)
0.44
0.05
$0.49
(0.10)
FY14 (cont. ops.):
Avg. shares outstanding-diluted
84
$2.36
FY15 (non-GAAP):
$0.70
$0.59
0.56
0.58
$0.98
84
1
(438)
$0.61
(5.93)
$0.65
0.51
FY15 (cont. ops.):
78
$2.30
FY16 (non-GAAP):
($4.32)
FY16 (cont. ops.):
84
84
NA
NA
-16%
-18%
-17%
Revenue
0%
-10%
-15%
-18%
-18%
Operating income
NA
NA
NA
(11)
13
NM
NM
(19)
0
NA
NA
NA
NA
(7)
(12)
(12)
(12)
(5)
$2.60
$0.68
0.68
$2.60
74
74
74
74
74
74
74
NA
NA
NA
NA
NA
NA
NA
-8%
-6%
-5%
-1%
7%
(122)
30
45
0
1
Yr/Yr % increase:
Avg. no. of shares
-10%
-10%
0
Gross margin
SG&A/ revenue
13.8%
7.8
11.3%
7.2
13.8%
8.0
14.3%
7.5
13.0%
6.4
14.3%
6.7
12.6%
5.6
12.8%
7.3
13.9%
6.8
14.0%
6.8
14.4%
7.0
14.5%
7.0
EBITDA
EBITDA margin
$103
6.5%
$35
2.4%
$7
0.5%
$97
7.5%
$106
8.1%
$116
8.9%
105
8.2%
$81
6.9%
$103
8.4%
$106
8.5%
$110
8.7%
$111
8.8%
Operating margin
Pretax margin (cont. ops)
Tax rate
4.8
5.0
5.0
6.3
6.6
7.7
7.0
5.5
7.1
7.2
7.4
7.5
3.9
33.9
-0.1
NM
-1.3
57.9
3.6
0.0
5.3
34.8
6.1
42.0
(adj.)
5.6
29.6
4.2
34.5
5.8
36.0
5.9
36.0
6.2
36.0
6.2
36.0
Note: FY2014 (annual and quarterly) financials restated per updated financials provided with FQ2 2015 management slides.
FQ2-FQ3 2014 and 2015 operating margin is adjusted for intangible impairments, impact from Plainfield and separation costs (FY2014 only)
Source: C ompany data and Wells Fargo Securities, LLC estimates
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
Organic (Per Mgt.):
$ in millions
Operating C ash Flow (OC F)
C apital Expenditures
Free C ash Flow (FC F)
Acquisitions
Share Repurchases
Dividends
C hange in Debt (from C F)
Dividend received from SAIC
Revenue
Yr/Yr C hange
EBITDA
Margin
Net Income (cont. ops.)
% of OCF
C apital Expenditures
Acquisitions
Share Repurchases
Dividends
Subtotal
Debt (Increase)/Decrease
FY12
Jan-12
$397
56
341
FY13
Jan-13
$36
39
(3)
FY14
Jan-14
$195
53
142
(218)
(471)
0
(1)
0
(483)
(22)
(165)
(550)
0
(3)
(319)
(477)
(114)
269
$5,860
-3%
NA
NA
286
$6,469
10%
515
8.0%
317
$5,755
-11%
242
4.2%
84
14%
55%
119%
0%
188%
108%
1342%
61%
458%
1969%
27%
2%
164%
245%
437%
0%
1528%
58%
3-Yr. Avg.
(FY12-FY14)
50%
466%
114%
229%
1079%
764%
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
Source: C ompany data and Wells Fargo Securities, LLC
Government Services: Market Space Firming
37
Leidos (LDOS) Operating Cash Flow Analysis (post-split financials from 10-K/our model)
$ in millions
Operating C ash Flow (OC F)
C apital Expenditures
Free C ash Flow (FC F)
Acquisitions
Share Repurchases
Dividends
C hange in Debt (from C F)
Revenue
Yr/Yr C hange
EBITDA
EBITDA margin
Net Income (pro forma)
% of OCF
C apital Expenditures
Acquisitions
Share Repurchases
Dividends
Subtotal
Debt (Increase)/Decrease
FY04
Jan-04
$374
(115)
259
FY05
Jan-05
$588
(42)
546
FY06
Jan-06
$573
(52)
521
FY07
Jan-07
$693
(73)
620
FY08
Jan-08
$345
(61)
284
FY09
Jan-09
$583
(59)
524
FY10
Jan-10
$620
(58)
562
FY11
Jan-11
$737
(74)
663
FY12
Jan-12
$772
(65)
707
FY13
Jan-13
$345
(48)
297
FY14
Jan-14
$378
(69)
309
(193)
0
(3)
343
(232)
0
(4)
3
(226)
0
0
(40)
(378)
0
(2,439)
(20)
(145)
(309)
(2)
(10)
(204)
(445)
(1)
(113)
(258)
(474)
0
(18)
(382)
(601)
0
739
(218)
(471)
0
(3)
(483)
(22)
(165)
(554)
(3)
(332)
(504)
385
$6,910
18%
518
7.5%
263
$7,518
9%
540
7.2%
335
$8,061
7%
644
8.0%
365
$8,935
11%
746
8.3%
386
$9,768
9%
835
8.5%
439
$10,580
8%
926
8.8%
479
$10,921
3%
1,057
9.7%
561
$10,997
1%
965
8.8%
468
$11,173
2%
850
7.6%
525
$9,772
-13%
438
4.5%
232
$5,833
432
7.4%
224
IT & BPO Services
38
SAIC: Old + New Combined
Legacy Company (SAI) Data Prior to FY14; FY14 Data Represents Combination of LDOS and New SAIC Reported Data (per 10-K Filings)
Operating C ash Flow (OC F) Analysis
31%
52%
0%
1%
22%
7%
39%
0%
1%
33%
9%
39%
0%
0%
30%
11%
55%
0%
352%
396%
18%
42%
90%
1%
114%
10%
35%
76%
0%
101%
9%
42%
76%
0%
109%
10%
52%
82%
0%
123%
8%
28%
61%
0%
81%
14%
140%
6%
48%
180%
18%
1%
88%
133%
204%
5-Yr. Avg.
(FY10-FY14)
11%
47%
67%
23%
148%
-92%
-1%
7%
3%
3%
19%
3%
-100%
0%
161%
-102%
-19%
Source: C ompany data and Wells Fargo Securities, LLC
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
Government Services: Market Space Firming
Exhibit 28. ManTech (MANT): Tear Sheet, Annual/Quarterly Income Statement, Operating
Cash Flow Analysis
ManTech (MANT) Company Tear-Sheet
($ in millions, except per share)
Price (1/27/15)
$31.52
Company Description:
ManTech is a provider of IT and professional services to the U.S. federal
government, with revenue concentrated with Defense Department and Intelligence
clients. MANT's 10%+ exposure to direct warfighter support (i.e. OC O) is the
highest in the peer group and is an area that is under particularly intense pricing
pressure. Management is attempting to diversify into better-funded/higher margin
areas, notably healthcare, primarily through M&A.
Management
C hairman/C EO:
C FO:
Ownership (%)
84.6% (voting)
<1%
George Pedersen
Kevin Phillips
Model Assumptions (3-5 Year View):
Revenue Growth:
Organic
Operating Margin:
C ash Deployment
$3,500
-2 to +3%
~6%
M&A; Dividends
Revenue ($mm) and Y/Y Growth
5%
$3,000
0%
$2,500
-5%
$2,000
-10%
$1,500
-15%
Investment Concerns:
▪ Historical strength with DoD/Intel a headwind given budget pressures.
▪ 10%+ to direct warfighter support work that is rapidly winding down.
▪ Operating margin pressured as higher margin (cyber, healthcare) areas not
large enough to offset price sensitive in-theater work.
▪ Acquisition integration risk, although limited by track record, in our view.
▪ C hairman/C EO controls ~85% of voting power and has historically shown
very limited openness to takeover approaches.
Potential Catalysts:
▪ Acquisitions to accelerate expansion into better-funded areas (e.g. healthcare)
given financial flexibility.
Q3 2014 Revenue by Major Contract
(%)
Revenue ($mm)
M RAP 7 %
9%
7.9%
8%
S- 3 1 7 %
8%
6.6%
7%
7%
6.1%
6%
-30%
$0
10%
9%
-25%
Y/Y Growth (organic)
Operating Margin (%)
10%
-20%
$1,000
$500
Investment Positives:
▪ Good capabilities in key DoD areas such as cybersecurity, although remains
a small offering relative to the total revenue base.
▪ Lean operating structure, in our view, but margin remains pressured.
▪ Strong cash flow generation, in our view, and available "dry powder" could
facilitate MANT's consolidator strategy over time.
▪ $0.84/share annual dividend (~2.5% yield) provides some downside risk share
price support, in our view.
5.3%
5.3%
6%
5%
5%
4%
4%
O ther 77%
Price to Earnings (P/E)
22
Enterprise Value to EBITDA (EV/EBITDA)
Price to Earnings - NTM
Average: 12.7x
22
10
NTM EV/EBITDA
10
Average 5.9x
20
20
9
9
18
18
8
8
16
16
7
7
14
14
6
6
12
12
10
10
5
5
4
4
8
6
1/26/10 10/14/10
8
7/1/11
3/19/12
Financial Metrics
Price (1/27/15)
$31.52
52-Week Range
$26 - $32
Shares O/S (mm)
37.3
Mkt C ap. ($mm)
$1,175
Ent. Value ($mm)
1,120
Fiscal Year
Dec.
Total Headcount
NA
Revenue
Our estimate
Street estimate
Op. Mgn (GAAP)
Our estimate
Street estimate
EPS
Our estimate
Street estimate
12/5/12
8/23/13
5/9/14
6
1/27/15
Balance Sheet ($mm)
as of September '14
C ash & Equiv.
$54.6
Total Debt
0.0
Share. Equity
1,145.5
Net Debt/C apital
-4.8%
Debt/TTM EBITDA
0.0x
Estimates
($ in mm, except EPS)
FY14E
Revenue
$1,800
Our estimate
1,800
Street estimate
FY14E
Op. Mgn (GAAP)
5.3%
Our estimate
5.3
Street estimate
FY14E
EPS
$1.28
Our estimate
1.27
Street estimate
FY15E
$1,800
1,788
FY15E
5.3%
5.4
FY15E
$1.50
1.51
3
1/26/10 10/14/10
7/1/11
3/19/12
12/5/12
8/23/13
5/9/14
3
1/27/15
MANT-US (24-Jan- 2014 to 27-Jan- 2015, Daily)
32
32
31
31
30
30
29
29
28
28
27
27
26
26
Volume in Millions
4, 000
2, 000
0
F eb
M ar
A pr
M ay
J un
J ul
A ug
S ep
O ct
N ov
D ec
J an
Source for all tables/charts: C ompany data, ThomsonOne, FactSet, and Wells Fargo Securities, LLC estimates
39
($ in thousands, except per share data)
2006
Revenue
2008
2009
2010
2011
2012
2013
2014E
Guidance:
$1.8 billion
2015E
$1,448,098
$1,870,879
$2,020,334
$2,604,038
$2,869,982
$2,582,295
$2,310,072
$1,800,000
$1,800,000
944,150
1,214,150
1,565,198
1,668,763
2,208,631
2,453,679
2,213,894
1,995,630
1,550,862
1,558,543
193,028
233,948
305,681
351,571
395,407
416,303
368,401
314,442
249,138
241,458
96,051
120,244
152,323
172,492
180,267
188,949
197,413
292,199
153,363
146,695
Operating income
90,650
113,704
153,358
179,079
215,140
227,354
170,988
22,243
95,775
94,763
Adjusted Operating income
90,650
113,704
153,358
179,079
215,140
227,354
170,988
140,670
95,775
94,763
Notational: EBITDA (OI+D&A)
Notational: EBITDA (mgt defined)
100,827
106,657
127,948
134,654
170,681
177,307
196,826
205,115
244,018
251,461
282,543
291,713
223,730
231,872
171,174
176,410
126,915
131,463
127,563
132,763
(1,566)
1,371
90,455
34,825
55,630
(4,929)
50,701
(3,842)
272
110,134
42,798
9
67,327
(120)
67,207
(3,166)
(233)
149,959
59,667
90,292
90,292
(926)
355
178,508
66,744
111,764
111,764
(12,206)
(483)
202,451
77,355
125,096
125,096
(15,459)
3,607
215,502
82,196
133,306
133,306
(15,961)
(73)
154,954
59,935
95,019
95,019
(15,873)
183
6,553
11,842
860
(6,149)
(6,149)
(15,648)
34
80,161
32,012
388
47,761
47,761
(1,000)
93,763
37,224
56,539
56,539
C ost of services
Gross profit
Selling, general & administrative
Net interest income (expense)
Equity in earnings (losses) of affiliates
Other income (exp.)
Pretax income
Income tax expense
Minority interest
Net income - continuing operations
Extraordinary income (loss)
Net income
Adjustments to net income
Pro forma net income
$1,137,178
2007
4,929
120
-
-
-
55,630
67,327
90,292
111,764
125,096
131,106
(2,200)
-
-
-
-
95,019
79,561
47,761
56,539
$1.64
$1.95
$2.55
$3.11
$3.43
$3.57
$2.57
1.49
1.95
2.55
3.11
3.43
3.63
2.57
33,938
34,441
35,461
35,989
36,421
36,762
36,961
Guidance for net income:
EPS (pro forma)
EPS (GAAP, diluted)
$2.14
(0.17)
Guidance (GAAP EPS):
Avg. no. of shares--diluted
37,110
Total growth in guidance:
Gross margin
SG&A/revenue
EBITDA margin
EBITDA (mgt defined) margin
Operating margin
Pretax margin
Tax rate
16%
7
4
2
27%
25
19
1
29%
35
30
3
8%
17
22
1
29%
20
11
1
10%
6
4
1
17.0%
8.4
8.9
9.4
8.0
8.0
38.5
16.2%
8.3
8.8
9.3
7.9
7.6
38.9
16.3%
8.1
9.1
9.5
8.2
8.0
39.8
17.4%
8.5
9.7
10.2
8.9
8.8
37.4
15.2%
6.9
9.4
9.7
8.3
7.8
38.2
14.5%
6.6
9.8
10.2
7.9
7.5
38.1
Note: EBITDA (mgt defined) is EBITDA plus FAS123(R) expense.
Source: C ompany data and Wells Fargo Securities, LLC estimates
(10%)
(25)
(28)
1
$47.5 mm
$1.28
$1.50
1.28
1.50
$1.28
37,334
37,575
-22%
(11%)
(87)
(17)
0
(22%)
331
(40)
1
0%
(1)
18
1
14.3%
13.6%
7.6
7.5
8.7
7.4
9.0
7.6
6.6
6.1
6.0
0.3
38.7
35.7
Tax rate guidance:
13.8%
8.5
7.1
7.3
5.3
4.5
39.9
~40%
13.4%
8.1
7.1
7.4
5.3
5.2
39.7
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
Yr/Yr % increase:
Revenue
Operating income
EPS (pro forma)
Avg. no. of diluted shares
IT & BPO Services
40
ManTech International Corp.
Annual Earnings Model
($ in thousands, except per share data)
Q2 2013
Q1 2013
Revenue
C ost of services
Gross profit
Selling, general & administrative
Q3 2013
Q4 2013
Q1 2014
Q2 2014
Q3 2014
Q4 2014E
Q1 2015E
Q2 2015E
Q3 2015E
Q4 2015E
$646,008
$605,129
$567,399
$491,536
$452,033
$463,381
$447,200
$437,386
$445,000
$450,000
$450,000
$455,000
562,297
523,039
493,604
416,690
393,009
399,789
382,787
375,277
386,928
390,150
388,800
392,665
83,711
82,090
73,795
74,846
59,024
63,592
64,413
62,109
58,073
59,850
61,200
62,335
47,340
43,419
41,756
159,684
38,982
39,522
37,681
37,178
36,490
36,450
36,900
36,855
Operating income
36,371
38,671
32,039
(84,838)
20,042
24,070
26,732
24,931
21,583
23,400
24,300
25,480
Adjusted Operating income
36,371
38,671
32,039
33,589
20,042
24,070
26,732
24,931
21,583
23,400
24,300
25,480
Notational: EBITDA (OI+D&A)
Notational: EBITDA (mgt defined)
44,057
45,440
46,317
47,712
39,576
40,753
41,224
42,505
27,634
28,860
31,729
32,752
34,421
35,495
33,131
34,356
29,783
31,083
31,600
32,900
32,500
33,800
33,680
34,980
(3,938)
(3,949)
(3,937)
(4,049)
(3,942)
(11,149)
(90)
34,632
13,081
21,551
21,551
(20)
28,082
9,614
750
17,718
17,718
247
(88,640)
(23,152)
110
(65,598)
(65,598)
(41)
16,059
6,368
57
9,634
9,634
8
12,929
5,156
65
7,708
7,708
Net interest income (expense)
Equity in earnings (losses) of affiliates
Other income (exp.)
Pretax income
Income tax expense
Minority interest
Net income - continuing ops
Extraordinary income (loss)
Net income
Adjustments to net income
Pro forma net income
46
32,479
12,299
20,180
20,180
EPS (GAAP, diluted)
67
26,492
10,739
266
15,487
15,487
(250)
24,681
9,749
14,932
14,932
(250)
21,333
8,469
12,863
12,863
(250)
23,150
9,191
13,959
13,959
(250)
24,050
9,548
14,502
14,502
(250)
25,230
10,016
15,214
15,214
-
-
-
-
-
-
-
-
-
-
-
-
20,180
21,551
17,718
20,112
9,634
7,708
15,487
14,932
12,863
13,959
14,502
15,214
$0.54
$0.58
$0.48
$0.26
$0.21
$0.41
$0.40
$0.34
$0.37
$0.39
$0.40
0.54
0.58
0.48
0.26
0.21
0.41
0.40
0.34
0.37
0.39
0.40
37,069
37,133
37,175
37,250
37,285
37,350
37,450
37,500
37,550
37,600
37,650
YR:
EPS (pro forma, x-disco)
(307)
($0.17)
0.54
(1.77)
YR:
$1.28
YR:
Government Services: Market Space Firming
41
ManTech International Corp.
Quarterly Earnings Model
$1.50
Guidance (co nt. o ps):
Avg. no. of shares--diluted
37,061
3.9%
-6.3%
-6.2%
-13.4%
-8.0%
2.5%
-3.5%
-2.2%
1.7%
1.1%
0.0%
1.1%
(5%)
(20)
(22)
0
(5%)
(14)
(13)
1
(12%)
(25)
(28)
1
(21%)
(325)
(1)
0
(30%)
(45)
(52)
0
(23%)
(38)
(64)
0
(21%)
(17)
(13)
0
(11%)
(129)
(27)
1
(2%)
8
33
1
(3%)
(3)
80
1
1%
(9)
(7)
1
4%
2
1
1
Gross margin
SG&A/revenue
EBITDA margin
EBITDA (mgt defined) margin
Operating margin
Pretax margin
Tax rate
13.0%
7.3
6.8
7.0
5.6
5.0
37.9
13.6%
7.2
7.7
7.9
6.4
5.7
37.8
13.0%
7.4
7.0
7.2
5.6
4.9
34.2
15.2%
8.4
8.4
8.6
6.8
4.1
32.1
13.1%
8.6
6.1
6.4
4.4
3.6
39.7
13.7%
8.5
6.8
7.1
5.2
2.8
39.9
14.4%
8.4
7.7
7.9
6.0
5.9
40.5
14.2%
8.5
7.6
7.9
5.7
5.6
39.5
13.1%
8.2
6.7
7.0
4.9
4.8
39.7
13.3%
8.1
7.0
7.3
5.2
5.1
39.7
13.6%
8.2
7.2
7.5
5.4
5.3
39.7
13.7%
8.1
7.4
7.7
5.6
5.5
39.7
Note: EBITDA (mgt defined) is EBITDA plus FAS123(R) expense.
Source: C ompany data and Wells Fargo Securities, LLC estimates
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
Sequential revenue growth
Yr/Yr % increase:
Revenue
Operating income
EPS (pro forma)
Avg. no. of diluted shares
IT & BPO Services
42
ManTech (MANT)
Operating C ash Flow (OC F) Analysis
FY04
Dec-04
$39.4
(4.5)
34.9
FY05
Dec-05
$47.3
(5.6)
41.7
FY06
Dec-06
$90.9
(5.2)
85.7
FY07
Dec-07
$64.9
(4.8)
60.1
FY08
Dec-08
$127.3
(7.8)
119.5
FY09
Dec-09
$132.2
(6.2)
126.0
FY10
Dec-10
$171.4
(13.3)
158.1
FY11
Dec-11
$221.4
(59.7)
161.7
FY12
Dec-12
$126.3
(14.9)
111.4
FY13
Dec-13
$188.3
(13.6)
174.7
Acquisitions
Share Repurchases
Dividends
C hange in Debt (from C F)
(10.9)
0.0
0.0
(0.1)
(98.2)
0.0
0.0
17.3
(17.8)
0.0
0.0
(42.5)
(275.7)
(9.1)
0.0
163.6
(36.5)
0.0
0.0
(120.9)
(13.8)
0.0
0.0
(44.1)
(368.9)
0.0
0.0
195.0
(109.0)
(0.0)
(30.8)
(3.9)
(63.1)
0.0
(31.0)
0.0
(11.4)
0.0
(31.2)
0.0
Revenue
Yr/Yr C hange
EBITDA
EBITDA margin
Net Income (pro forma)
$842
20%
47.8
5.7%
24.7
$980
16%
93.2
9.5%
52.2
$1,137
16%
100.8
8.9%
55.6
$1,448
27%
127.9
8.8%
67.3
$1,871
29%
170.7
9.1%
90.3
$2,020
8%
196.8
9.7%
111.8
$2,604
29%
244.0
9.4%
125.1
$2,870
10%
282.5
9.8%
131.1
$2,582
-10%
223.7
8.7%
95.0
$2,310
-11%
171.2
7.4%
79.6
$ in millions
Operating C ash Flow (OC F)
C apital Expenditures
Free C ash Flow (FC F)
% of OCF
C apital Expenditures
Acquisitions
Share Repurchases
Dividends
Subtotal
Debt (Increase)/Decrease
11%
28%
0%
0%
16%
12%
207%
0%
0%
196%
6%
20%
0%
0%
14%
7%
425%
14%
0%
432%
6%
29%
0%
0%
23%
5%
10%
0%
0%
6%
8%
215%
0%
0%
207%
27%
49%
0%
14%
36%
12%
50%
0%
25%
63%
7%
6%
0%
17%
15%
0%
-37%
47%
-252%
95%
33%
-114%
2%
0%
0%
-18%
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
Note: Operating cash flow is on a continuing operations basis
Source: C ompany data and Wells Fargo Securities, LLC
5-Yr. Avg.
(FY09-FY13)
13%
67%
0%
11%
91%
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
Government Services: Market Space Firming
Exhibit 29. NCI (NCIT): Tear Sheet, Annual/Quarterly Income Statement
NCI (NCIT) Company Tear-Sheet
($ in millions, except per share)
Price (1/27/15)
$12.30
Company Description:
NC I is a small provider of information technology and professional services to the
U.S. federal government. The company is going through a significant dislocation as
its prior strategy of pursuit of follow-on work from BRAC clients was unsuccessful
and its revenue base has shrunk dramatically as existing work has wound-down
and new business efforts have been unsuccessful to date. Founder and C EO's
85%+ voting power has limited potential strategic alternatives.
Management
C hairman/C EO:
President:
C FO:
Ownership (%)
39%
3.9%
1.8%
C harles Narang
Brian C lark
Lucas Narel
86% (voting)
Model Assumptions (3-5 Year View):
Revenue Growth:
Organic
low-single digits
Operating Margin:
4-6%
C ash Deployment:
Debt reduction; M&A
$800
$700
Revenue ($mm) and Y/Y Growth
0%
Revenue ($mm)
Investment Positives:
▪ Management team has moved aggressively to reduce costs and reset
business, although difficult given dramatic fall-off and increasingly
challenged U.S. federal government end-market.
▪ No debt; meaningfully reduced from $70mm in Q2 2011.
▪ Results have recently surprised to the upside, but we believe more reflective
of one-time items and not yet a significantly improved outlook.
▪ January 2015 acquisition of C omputech is NC IT's first in a long-time and
signals greater management comfort in the financial underpinnings, in our view.
Investment Concerns:
▪ Business still not stabilized as prior contracts continue to run-off and award
of new contracts remains weak.
▪ IT-focus a disadvantage as has been an area of relative government cuts.
▪ Very weak recent contract awards, complicating turnaround further; NC IT
continues to struggle winning larger contract takeaways, in our view.
▪ Large founder ownership (~40% economic/85% voting) limits float as well
as reduces potential interest by strategic acquirers.
Potential Catalysts:
▪ Successfully winning new, larger contract opportunities.
Q3 2014 Revenue by End Market (%)
Operating Margin (%)
9%
-5%
Y/Y Growth ( organic)
Fed.
C ivilian
27%
9%
8%
8%
7%
7%
$600
-10%
$500
-15%
$400
-20%
5%
$300
-25%
4%
$200
-30%
3%
3%
$100
-35%
2%
2%
$0
-40%
1%
1%
6%
D oD /I ntel
73%
Price to Earnings (P/E)
30
Price to Earnings - NTM
Average: 15.7x
30
25
20
20
15
15
10
10
7/1/11
Financial Metrics
Price (1/27/15)
52-Week Range
Shares O/S (mm)
Mkt C ap. ($mm)
Ent. Value ($mm)
Fiscal Year
Total Headcount
Revenue
Our estimate
Street estimate
Op. Mgn (GAAP)
Our estimate
Street estimate
EPS
Our estimate
Street estimate
4.5%
4.2%
4.7%
3.5%
6%
5%
4%
Enterprise Value to EBITDA (EV/EBITDA)
25
5
1/26/10 10/14/10
4.3%
3/19/12
$12.30
$6 - $13
13.0
$160
147
Dec.
1,900
12/5/12
8/23/13
5/9/14
5
1/27/15
Balance Sheet ($mm)
as of September '14
C ash & Equiv.
$12.6
Total Debt
0.0
Share. Equity
88.0
Net Debt/C apital
-14.3%
Debt/TTM EBITDA
0.0x
Estimates
($ in mm, except EPS)
FY14E
Revenue
$317
Our estimate
318
Street estimate
FY14E
Op. Mgn (GAAP)
4.5%
Our estimate
4.5
Street estimate
FY14E
EPS
$0.67
Our estimate
0.65
Street estimate
FY15E
$315
332
FY15E
4.7%
4.9
FY15E
$0.60
0.67
11
NTM EV/EBITDA
11
Average 6.5x
10
10
9
9
8
8
7
7
6
6
5
5
4
4
3
3
2
1/26/10 10/14/10
7/1/11
3/19/12
12/5/12
8/23/13
5/9/14
2
1/27/15
NCIT- US (24-Jan- 2014 to 27- Jan-2015, Daily)
1 3 .0
1 3 .0
1 2 .0
1 2 .0
1 1 .0
1 1 .0
1 0 .0
1 0 .0
9 .0
9 .0
8 .0
8 .0
7 .0
7 .0
6 .0
6 .0
Volume in Millions
800
400
0
Feb
M ar
A pr
M ay
J un
J ul
A ug
S ep
O ct
N ov
D ec
J an
Source for all tables/charts: C ompany data, ThomsonOne, FactSet, and Wells Fargo Securities, LLC estimates
43
Annual Earnings Model
(in thousands except per share data)
Revenue
Cost of revenue
Gross profit
General & administrative
Other
EBITDA
Depreciation and amortization
Amortization of intangibles
Operating income
2006
2007
2008
2009
2010
2011
2012
2013
2014E
Guidance:
$312-318mm
$218,341
$304,420
$390,596
$468,911
$581,341
$558,261
$368,387
$332,325
$317,000
$315,000
188,878
263,679
336,473
407,322
512,779
499,398
322,322
289,387
271,060
272,386
29,463
40,741
54,123
61,589
68,562
58,863
46,065
42,938
45,940
42,614
12,852
15,396
20,079
22,048
23,730
24,150
26,108
23,392
26,070
22,283
-
-
-
(2,285)
-
-
-
-
16,611
25,345
34,044
41,826
44,832
19,957
19,546
19,870
20,331
6,299
5,700
5,400
1,012
33,701
1,629
1,652
1,888
2,111
2,665
6,732
6,926
957
1,360
1,772
2,117
2,389
3,139
153,062
14,025
22,333
30,384
37,598
39,778
23,830
Net Interest income (expense)
727
(1,342)
(2,026)
(1,698)
(1,325)
Other inc ome (expense)
-
-
-
-
-
-
-
14,752
20,991
28,358
36,941
39,180
22,132
Pretax income
Income tax
Net income (GAAP)
EPS - Pro Forma (diluted)
EPS - GAAP (diluted)
(657)
(598)
(140,031)
(141,356)
(864)
14,111
(784)
0
0
0
14,170
14,931
(403)
(400)
-
-
-
13,327
13,767
14,531
5,493
8,420
11,318
14,785
15,309
8,974
(54,532)
5,589
5,506
5,958
9,259
12,571
17,040
22,156
23,871
13,158
(86,824)
7,738
8,261
8,573
$0.60
$0.67
$0.60
$0.60
$0.60
$0.60
$0.69
$0.93
$1.25
$1.54
$1.72
$1.09
$0.69
$0.93
$1.25
$1.61
$1.72
$0.95
13,483
13,539
13,633
13,775
13,879
13,830
$0.51
($6.51)
Guidance:
Avg. shares (diluted)
2015E
13,335
12,829
IT & BPO Services
44
NCI, Inc.
$0.66-0.68
13,673
14,250
Yr/yr % increase:
Revenue
Organic revenue growth (actual per mgt.)
Gross margin
G&A/revenue
EBITDA margin
Operating margin
Inc./(decr.) in op. mgn. (bp)
Pretax margin
Tax (benefit) rate
14
39%
19
28%
11
20%
16
24%
22
-4%
-34%
-10%
-5%
-1%
(10)
(37)
(10)
(5)
(5)
19
-52
56
53
35
0
34
35
1
23
29
1
7
7
1
-25
-45
0
-41
-784
-4
-2
-109
-4
2
0
7
2
0
4
13.5%
5.9
7.6
13.4%
5.1
8.3
13.9%
5.1
8.7
13.1%
4.7
8.9
11.8%
4.1
7.7
10.5%
4.3
6.0
12.5%
7.1
5.4
12.9%
7.0
5.9
14.5%
8.2
6.3
13.5%
7.1
6.5
6.4
55
7.3
91
7.8
44
8.0
24
6.8
(118)
4.3
(257)
3.5
(73)
4.2
71
4.5
22
4.7
27
6.8
37.2
6.9
40.1
7.3
39.9
7.9
40.0
6.7
39.1
4.0
40.5
4.0
41.9
4.3
40.0
4.6
41.0
Source: Company data and Wells Fargo Securities, LLC estimates
3.2
41.3
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
EBITDA
EPS GAAP (dil.)
Avg. no. of shares
14%
Quarterly Earnings Model
(in thousands except per share data)
Q1 2013
Q2 2013
Q3 2013
Q4 2013
Q1 2014
Q2 2014
Q3 2014
Q4 2014E
$80-86mm
$76-84mm
$70-78mm
$67-73mm
$74-82mm
$75-80mm
$70-76mm
$70-76mm
$91,541
$82,971
$77,918
$79,895
$89,084
$77,845
$75,660
Cost of revenue
80,477
71,991
67,832
69,087
78,003
65,929
64,102
Gross profit
11,064
10,980
10,086
10,808
11,081
11,916
5,861
6,129
5,819
5,583
7,399
5,203
4,851
4,267
5,225
1,618
1,527
1,679
1,475
Guidance:
Revenue
General & administrative
Q1 2015E
Q2 2015E
Q3 2015E
Q4 2015E
$74,411
$76,000
$77,000
$80,000
$82,000
63,026
65,968
66,528
68,960
70,930
11,558
11,385
10,032
10,472
11,040
11,070
6,364
6,205
6,102
5,396
5,467
5,680
5,740
3,682
5,552
5,353
5,283
4,636
5,005
5,360
5,330
1,449
1,450
1,401
1,400
1,350
1,350
1,350
1,350
-
-
-
-
-
-
-
-
-
3,750
2,233
4,102
3,952
3,883
3,286
3,655
4,010
3,980
Other
EBITDA
Depreciation and amortization
Amortization of intangibles
Purch. contingency gain:
Operating income
3,585
Net Interest income (expense)
Other income (expense)
Pretax inc ome
Income tax
Net income (GAAP)
(251)
3,324
(248)
(864)
3,452
(82)
(95)
-
-
(157)
-
-
-
-
-
-
-
-
-
-
3,334
3,076
3,295
3,622
2,107
4,020
3,857
3,783
3,186
3,555
3,910
3,880
EPS - GAAP (diluted)
Guidance:
Avg. shares (diluted)
(126)
(100)
(100)
(100)
(100)
(100)
1,359
1,265
1,344
1,621
866
1,594
1,495
1,551
1,306
1,458
1,603
1,591
1,975
1,811
1,951
2,001
1,241
2,426
2,362
2,232
1,880
2,097
2,307
2,289
$0.15
$0.14
$0.15
$0.16
$0.16
$0.18
$0.17
$0.16
$0.13
$0.15
$0.16
$0.16
$0.15
$0.14
$0.15
$0.16
$0.09
$0.18
$0.17
$0.16
$0.13
$0.15
$0.16
$0.16
$0.08-0.10
$0.10-0.12
$0.09-0.11
$0.09-0.11
$0.12-0.14
$0.14-0.16
$0.14-0.16
$0.15-0.17
12,812
12,825
12,837
12,842
13,104
13,771
13,816
14,000
14,100
14,200
14,300
14,400
FY:
EPS - Pro Forma (diluted)
(128)
$0.60
FY:
$0.67
FY:
Government Services: Market Space Firming
45
NCI, Inc.
$0.60
Yr/yr % increase:
Revenue
Organic revenue growth (actual per
Gross margin
G&A/revenue
EBITDA margin
Operating margin
Yr/Yr inc./(decr.) in op. mgn. (bp)
Pretax margin
Tax (benefit) rate
(9%)
(12%)
(11%)
(3%)
(6%)
(3%)
(7%)
(15%)
(1%)
(8)
(9)
(12)
(11)
(3)
(6)
(3)
(7)
(15)
(1)
6
33
(6)
7
30
(6)
(16)
(104)
(3)
(4)
(106)
(1)
(29)
(39)
2
14
25
7
25
12
8
1
2
9
26
41
8
12.1%
6.4
5.7
13.2%
7.4
5.8
12.9%
7.5
5.5
13.5%
7.0
6.5
12.4%
8.3
4.1
15.3%
8.2
7.1
15.3%
8.2
7.1
15.3%
8.2
7.1
13.2%
7.1
6.1
3.9
77
4.0
88
4.4
60
4.7
59
2.5
(141)
5.3
126
5.2
79
5.2
52
4.3
182
3.6
40.8
3.7
41.1
4.2
40.8
4.5
44.8
2.4
41.1
5.2
39.7
5.1
38.8
5.1
41.0
4.2
41.0
Source: Company data and Wells Fargo Securities, LLC estimates
6%
10%
6
10
(10)
(16)
3
0
(6)
4
1
(0)
3
13.6%
7.1
6.5
13.8%
7.1
6.7
13.5%
7.0
6.5
4.7
(52)
5.0
(21)
4.9
(36)
4.6
41.0
4.9
41.0
4.7
41.0
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
EBITDA
EPS GAAP (dil.)
Avg. no. of shares
(8%)
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
Government Services: Market Space Firming
Exhibit 30. SAIC (SAIC): Tear Sheet, Annual/Quarterly Income Statement, Operating Cash
Flow Analysis
SAIC (SAIC) Company Tear-Sheet
($ in millions, except per share)
Price (1/27/15)
$50.50
Company Description:
SAIC provides technical, engineering, and information technology (IT) services to
U.S. federal government clients. "New" SAIC was spun-off from prior parent Leidos
(LDOS) in September 2013. Revenue is concentrated in the Department of Defense
(~75% of the total), particularly with the Army and the Navy. Revenue outside of
the U.S. federal government is limited (~5% of total).
Management
C EO:
C FO:
Investment Concerns:
▪ Government sector facing notable budget uncertainty, spending headwinds
(particularly at DoD), and decision-making delays.
▪ Limited new program starts by government increases competition and
reduces win rates on recompetes and opportunities, in our view.
▪ Long-term margin expansion targets may be difficult to achieve, and pre-split
reductions could lead to less opportunity for positive surprise, in our view.
▪ Book-to-bill (on a TTM basis) is just 0.8x, remaining below 1.0x, which could
make it more challenging to return to "modest" growth in FY16.
Ownership (%)
<1%
<1%
Tony Moraco
John Hartley
Model Assumptions (3-5 Year View):
Revenue Growth:
low-single digits
Adj. Op Mgn.:
~6.5%
C ash Deployment:
Regular dividend; "consistent"
share repurchase
$5,000
Revenue ($mm) and Y/Y Growth
Potential Catalysts:
▪ C ash return has potential to accelerate given: 1) "excess" cash level now
$150mm versus $200mm previously and 2) company noted comfort with higher
leverage levels.
FY2013 Employees by Offering (%)
4%
2%
$4,500
5%
0%
7%
9%
-8%
-12%
Revenue ($mm)
$2,500
10%
Logistics/ Supply Chain
-14%
Y/Y Growth
6.0%
Hardware Int.
-10%
$3,000
7.5%
19%
7.0%
6.6%
6.3%
6.5%
Software Int.
-6%
$3,500
7.0%
21%
IT Managed Svcs
-4%
Operating Margin (%)
7.5%
Mission/SETA
-2%
$4,000
Investment Positives:
▪ Removal of organizational conflicts of interest (OC I) expands the addressable
market opportunity.
▪ C ost reduction efforts and split from LDOS allow more competitive
pricing in an increasingly price sensitive market.
▪ Focus on "lights-on" work that could be less sensitive to budget headwinds.
▪ Diverse contract base with over 1,500 contracts, with most (86%) from IDIQs.
▪ C ommitment to return "excess" cash (over ~$150mm) to shareholders through
share buybacks and regular ($0.28/share quarterly) dividend.
6.5%
6.0%
6.4%
6.0%
6.2%
5.5%
5.5%
5.0%
5.0%
Training/Sim.
-16%
Network Int.
14%
Emerging IT
15%
Price to Earnings (P/E)
Enterprise Value to EBITDA (EV/EBITDA)
Price to Earnings - NTM
17.0
Average: 14.3x
17.0
16.0
16.0
15.0
15.0
14.0
14.0
13.0
13.0
12.0
12.0
11.0
1/24/14
3/26/14
5/26/14
7/25/14
Financial Metrics
Price (1/27/15)
$50.50
52-Week Range
$34 - $53
Shares O/S (mm)
46.0
Mkt C ap. ($mm)
$2,323
Ent. Value ($mm)
2,564
Fiscal Year
Jan.
Total Headcount
13,000
Revenue
Our estimate
Street estimate
Op. Margin
Our estimate
Street estimate
EPS
Our estimate
Street estimate
9/26/14
11/26/14
11.0
1/27/15
Balance Sheet ($mm)
as of October '14
C ash & Equiv.
$254
Total Debt
495
Share. Equity
340
Net Debt/C apital
28.9%
Debt/NTM EBITDA
1.9x
Estimates
($ in mm, except EPS)
FY15E
Revenue
$3,820
Our estimate
3,852
Street estimate
FY15E
Op. Margin
6.2%
Our estimate
6.2
Street estimate
FY15E
EPS
$2.85
Our estimate
2.86
Street estimate
FY16E
$3,885
3,920
FY16E
6.3%
6.5
FY16E
$3.23
3.22
11
NTM EV/EBITDA
10
10
9
9
8
8
7
7
6
9/9/13
11/20/13 1/31/14 4/11/14
6/24/14
9/4/14
6
11/14/14 1/27/15
SAIC- US (24- Jan-2014 to 27- Jan- 2015, Daily)
50
50
45
45
40
40
35
35
Volum e in Millions
2,000
0
F eb
M ar
A pr
Source for all tables/charts: C ompany data, ThomsonOne, FactSet, and Wells Fargo Securities, LLC estimates
46
11
Average 8.8x
M ay
J un
J ul
A ug
S ep
O ct
N ov
D ec
J an
FY 2009
C Y 2008
(Jan 09)
FY 2010
C Y 2009
(Jan 10)
Revenue (external)
Revenue (w/parent, zero margin)
Total revenue
C ost of revenue
C ost of revenue (revenue w/ parent)
Gross profit
SG&A
FY 2011
C Y 2010
(Jan 11)
FY 2012
C Y 2011
(Jan 12)
$4,017
104
$3,820
49
$3,885
40
$4,343
NA
NA
$4,893
NA
NA
$4,863
4,292
96
$4,733
4,211
96
$4,781
4,282
91
$4,121
3,684
104
$3,869
3,491
49
$3,925
3,548
40
NA
NA
475
426
408
333
329
337
NA
NA
146
127
99
92
90
28
58
281
183
183
323
329
-
-
-
-
-
-
NA
NA
329
NA
176
NA
194
121
208
176
194
NA
NA
Discontinued operations
Net income (GAAP)
FY 2016E
C Y 2015E
(Jan 16)
$4,690
91
Net interest income
Provision for income taxes
Net income (cont. ops.)
FY 2015E
C Y 2014E
(Jan 15)
$4,637
96
Other income/(exp)
Pretax income
FY 2014
C Y 2013
(Jan 14)
$4,767
96
Other operating income (exp.)
Operating income
FY 2013
C Y 2012
(Jan 13)
299
-
-
91
-
238
247
(17)
(18)
-
-
-
-
298
281
176
221
229
116
182
99
182
63
113
83
138
87
142
208
182
182
113
138
142
208
182
182
35
148
138
142
(1)
(7)
-
Back out from net income:
Nonrecurring items
Pro forma net income
EPS - Pro forma
NA
NA
NA
NA
NA
$2.99
$2.85
$3.23
3.37
3.71
3.98
3.66
3.66
2.27
2.85
3.23
52
52
52
48
50
49.7
48.4
44.0
Revenue (external)
NA
13%
-3%
-3%
1%
-14%
Avg. no. of shares
NA
-
-
EPS
NM
NM
NM
NA
NA
NA
NA
10.0
3.1
EPS - GAAP - net
Avg. shares outstanding-diluted
Government Services: Market Space Firming
47
Science Applications International Corp. ("new" SAIC)
Annual Earnings Model
($ in millions, except per share data)
Yr/Yr % increase:
EBITDA
NA
EBITDA Margin
NA
NA
Operating margin
NA
Adjusted operating margin
Pretax margin (cont. ops)
Tax rate
$347
NM
9.2
2.7
$327
4
NM
8.7
2.1
$311
-5%
2%
-
(3)
(9)
NM
26
13
8.6
2.4
8.7
2.3
8.3
2.3
$196
$259
$267
7.3%
7.1%
6.6%
4.9%
6.8%
6.6
6.9
6.4
6.0
4.6
6.2
6.3
NA
6.6
6.9
6.4
6.6
6.0
6.2
6.3
NA
NA
NA
NA
6.9
36.8
6.4
38.9
6.0
35.2
4.4
35.8
5.8
37.6
5.9
38.0
Note: SAIC provides long-term ("on average and over time") guidance only
Organic revenue growth target: low single digit growth; Operating margin expansion target: 10-20 bps annual improvement
Note: C ompany guidance based on external revenue (excludes revenue performed by former parent).
Note: All ratios are computed based on external revenue (excludes revenue performed by former parent).
Note: FY2013 revenue decline reflects: ~$400mm loss of DGS contract, ~$100mm OC O drawdown and ~$125mm Sequestration impact.
Source: C ompany data and Wells Fargo Securities, LLC estimates
6.9%
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
Gross margin
SG&A/ revenue
(8)
Q1 FY14
(Apr 13)
Revenue (external)
Revenue (w/parent, zero margin)
Total revenue
C ost of revenue
C ost of revenue (revenue w/ paren
Gross profit
Q2 FY14
(Jul 13)
Q3 FY14
(Oct 13)
$1,107
32
$1,005
29
$1,139
1,010
32
$1,034
931
29
$974
33
Q4 FY14
(Jan 14)
Q1 FY15
(Apr 14)
Q2 FY15
(Jul 14)
Q3 FY15
(Oct 14)
$931
10
$962
15
$939
13
$1,007
892
33
$941
851
10
$977
881
15
$952
858
13
$993
11
Q4 FY15E
(Jan 15)
Q1 FY16E
(Apr 15)
Q2 FY16E
(Jul 15)
Q3 FY16E
(Oct 15)
$990
10
$926
10
$980
10
$965
10
$1,004
906
11
$936
846
10
$990
896
10
$975
882
10
$1,000
904
10
$960
865
10
85
97
74
82
80
81
81
87
80
84
83
86
SG&A
29
18
22
23
22
22
24
22
23
23
24
Other operating income (exp.)
16
18
23
1
52
38
37
56
Net interest income
-
-
Other income/(exp)
-
-
Operating income
(3)
-
$950
10
22
-
-
-
-
-
-
-
-
59
59
63
57
61
60
62
63
(4)
-
Q4 FY16E
(Jan 16)
(5)
-
(4)
-
(4)
-
(4)
-
(4)
-
(4)
-
(5)
-
(5)
-
Pretax income
52
38
34
52
54
55
59
53
57
56
58
58
Provision for income taxes
Net income (cont. ops.)
19
33
13
25
12
22
19
33
20
34
21
34
22
37
20
33
22
35
21
35
22
36
22
36
33
25
22
33
34
34
37
33
35
35
36
36
8
41
12
37
15
37
1
34
-
-
-
-
-
-
-
EPS - Pro forma
$0.81
$0.74
$0.74
EPS - GAAP - net
0.67
0.50
0.44
FY14 (GAAP):
2.27
Discontinued operations
Net income (GAAP)
IT & BPO Services
48
Science Applications International Corp. ("new" SAIC)
Quarterly Earnings Model
($ in millions, except per share data)
Back out from net income:
Nonrecurring items
Pro forma net income
Avg. shares outstanding-diluted
50
50
50
34
34
37
33
35
35
$0.68
$0.69
$0.70
$0.77
$0.70
$0.77
0.66
0.69
0.70
0.77
0.70
0.77
FY15 (GAAP):
2.85
48.9
48.2
47.0
36
36
$0.78
$0.83
$0.85
0.78
0.83
0.85
FY16 (GAAP
45.8
44.6
43.4
3.23
49.7
49.4
42.2
-18%
-13%
-7%
2%
-1%
2%
3%
0%
3%
(1)
(2)
(4)
(5)
(7)
(9)
(10)
(10)
39
74
12
12
8.6%
2.4
8.5%
2.3
8.6%
2.4
8.7%
2.4
8.9%
2.3
DGS ramp down
Yr/Yr % increase:
Revenue (external)
Avg. no. of shares
Gross margin
SG&A/ revenue
(1)
-17%
-18%
-
-
-
NM
NM
NM
NM
8.8%
2.6
7.4%
1.8
8.4%
2.3
8.6%
2.5
8.4%
2.3
8.6%
2.3
8.8%
2.4
2
6
8
21
EBITDA
$55
$39
$43
$59
$64
$64
$69
$62
$66
$65
$67
$68
EBITDA Margin
5.0%
3.9%
4.4%
6.3%
6.7%
6.8%
6.9%
6.7%
6.8%
6.8%
6.8%
7.1%
Operating margin
4.7
3.8
3.8
6.0
6.1
6.3
6.3
6.2
6.2
6.3
6.3
6.6
6.1
5.6
6.2
6.1
6.1
6.3
6.3
6.2
6.2
6.3
6.3
6.6
4.7
36.5
3.8
34.2
3.5
35.3
5.6
36.5
5.6
37.0
5.9
38.2
5.9
37.3
5.8
38.0
5.8
38.0
5.8
38.0
5.8
38.0
6.1
38.0
Adjusted operating margin
Pretax margin (cont. ops)
Tax rate
Note: All ratios are computed based on external revenue (excludes revenue performed by former parent).
Note: FY2013 revenue decline reflects: ~$400mm loss of DGS contract, ~$100mm OC O drawdown and ~$125mm Sequestration impact.
Source: C ompany data and Wells Fargo Securities, LLC estimates
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
EPS
-5%
$ in millions
Operating C ash Flow (OC F)
C apital Expenditures
Free C ash Flow (FC F)
Acquisitions
Share Repurchases
Dividends
C hange in Debt (from C F)
Dividend paid to LDOS
Net transfers to LDOS
Revenue (external)
Yr/Yr C hange
EBITDA
Margin
Net Income (pro forma)
FY11
Jan-11
$231
10
221
FY12
Jan-12
$303
6
297
FY13
Jan-13
$280
7
273
FY14
Jan-14
$183
16
167
0
0
0
(2)
0
0
0
0
0
(2)
0
(300)
0
0
0
(4)
0
(270)
0
(13)
(27)
499
(269)
(103)
$4,767
NM
347
7.3%
208
$4,637
-3%
327
7.1%
182
$4,690
1%
311
6.6%
182
$4,017
-14%
196
4.9%
148
% of OCF
C apital Expenditures
Acquisitions
Share Repurchases
Dividends
Subtotal
2%
0%
0%
0%
2%
3%
0%
0%
0%
3%
9%
0%
7%
15%
31%
Debt (Increase)/Decrease
1%
1%
-273%
3-Yr. Avg.
(FY12-FY14)
4%
0%
2%
5%
12%
-90%
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
Source: C ompany data and Wells Fargo Securities, LLC
Government Services: Market Space Firming
49
"New" SAIC (SAIC) Operating Cash Flow Analysis (post-split financials from 10-K/our model)
General Dynamics (GD)
Annual Information Systems and Technology Segment Analysis
($ in millions)
2007
2008
2009
2010
2011
2012
2013
Dec
Dec
Dec
Dec
Dec
Dec
Dec
Revenue and Operating Income (EBIT)
Total Company
Revenue
$27,240 $29,300 $31,981 $32,466 $32,677 $31,513 $30,990
Yr/Yr % change
8%
9%
2%
1%
-4%
-2%
Operating income (EBIT)
3,113
3,653
3,675
3,945
3,826
833
3,686
EBIT margin
11.4%
12.5%
11.5%
12.2%
11.7%
2.6%
11.9%
Information Systems and Technology
Revenue
$9,622 $10,038 $10,802 $11,612 $11,221 $10,017 $10,268
Yr/Yr % change
4%
8%
7%
-3%
-11%
3%
% of total
35%
34%
34%
36%
34%
32%
33%
Operating income (EBIT)
1,027
1,075
1,151
1,219
1,200
(1,369)
795
EBIT margin
10.7%
10.7%
10.7%
10.5%
10.7% -13.7%
7.7%
Backlog
Funded
Information systems and technology
Total company
Unfunded
Information systems and technology
Total company
Total
Information systems and technology
Total company
Estimated Potential Contract Value
Information systems and technology
Total company
Total Potential Contract Value
Information systems and technology
Total company
$7,158
37,194
$7,242
51,712
$8,423
45,856
$7,978
43,379
$7,434
44,699
$8,130
44,525
$7,253
38,404
2,457
9,638
3,003
22,415
1,909
19,689
1,843
16,182
2,145
12,711
1,643
6,756
1,267
7,601
9,615
46,832
10,245
74,127
10,332
65,545
9,821
59,561
9,579
57,410
9,773
51,281
8,520
46,005
8,721
14,506
10,263
16,847
12,815
17,575
15,196
21,786
22,384
28,000
21,009
26,850
19,127
27,568
18,336
61,338
20,508
90,974
23,147
83,120
25,017
81,347
31,963
85,410
30,782
78,131
27,647
73,573
Funded backlog - % of total
Information systems and technology
Total company
Unfunded backlog - % of total
Information systems and technology
Total company
Bookings (Calculated)
Information systems and technology
Book-to-bill
1%
39%
16%
-11%
-5%
-5%
-7%
3%
9%
0%
-11%
-14%
22%
133%
-36%
-12%
-3%
-18%
16%
-21%
-23%
-47%
-23%
13%
7%
58%
1%
-12%
-5%
-9%
-2%
-4%
2%
-11%
-13%
-10%
18%
16%
25%
4%
19%
24%
47%
29%
-6%
-4%
-9%
3%
12%
48%
13%
-9%
8%
-2%
28%
5%
-4%
-9%
-10%
-6%
74%
79
71%
70
82%
70
81%
73
78%
78
83%
87
85%
83
26%
21
29%
30
18%
30
19%
27
22%
22
17%
13
15%
17
NA $10,668 $10,889 $11,101 $10,979 $10,211
1.06x
1.01x
0.96x
0.98x
1.02x
$9,015
0.88x
Total company
Book-to-bill
Note: Bookings calculations are based on total backlog
Source: C ompany data and Wells Fargo Securities, LLC
56,595
1.93x
23,399
0.73x
26,482
0.82x
30,526
0.93x
25,384
0.81x
25,714
0.83x
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
Backlog Growth
Funded
Information systems and technology
Total company
Unfunded
Information systems and technology
Total company
Total
Information systems and technology
Total company
Estimated Potential Contract Value
Information systems and technology
Total company
Total Potential Contract Value
Information systems and technology
Total company
IT & BPO Services
50
Exhibit 31. General Dynamics (GD)
General Dynamics (GD)
Quarterly Information Systems and Technology Segment Analysis
($ in millions)
Q1:11
Q2:11
Q3:11
Jun
Sep
Mar
Revenue and Operating Income (EBIT)
Total Company
Revenue
$7,798
$7,879
$7,853
Yr/Yr % change
1%
-3%
-2%
Operating income (EBIT)
929
949
998
EBIT margin
11.9%
12.0%
12.7%
Information Systems and Technology
Revenue
$2,814
$2,806
$2,680
Yr/Yr % change
2%
-6%
-9%
% of total
36%
36%
34%
Operating income (EBIT)
276
299
310
EBIT margin
9.8%
10.7%
11.6%
Backlog
Funded
Information systems and technology
Total company
Unfunded
Information systems and technology
Total company
Total
Information systems and technology
Total company
Estimated Potential Contract Value
Information systems and technology
Total company
Total Potential Contract Value
Information systems and technology
Total company
Funded backlog - % of total
Information systems and technology
Total company
Unfunded backlog - % of total
Information systems and technology
Total company
Bookings (Calculated)
Information systems and technology
Book-to-bill
Book-to-bill (TTM)
Total company
Book-to-bill
Book-to-bill (TTM)
Q1:12
Mar
Q2:12
Jun
Q3:12
Sep
Q4:12
Dec
Q1:13
Mar
Q2:13
Jun
Q3:13
Sep
Q4:13
Dec
Q1:14
Mar
Q2:14
Jun
Q3:14
Sep
$9,147
6%
950
10.4%
$7,579
-3%
860
11.3%
$7,922
1%
970
12.2%
$7,934
1%
905
11.4%
$8,078
-12%
(1,902)
-23.5%
$7,314
-3%
843
11.5%
$7,834
-1%
961
12.3%
$7,735
-3%
961
12.4%
$8,107
0%
921
11.4%
$7,324
0%
871
11.9%
$7,474
-5%
949
12.7%
$7,751
0%
999
12.9%
$2,921
-1%
32%
315
10.8%
$2,440
-13%
32%
218
8.9%
$2,528
-10%
32%
226
8.9%
$2,472
-8%
31%
201
8.1%
$2,577
-12%
32%
(2,014)
-78.2%
$2,447
0%
33%
185
7.6%
$2,550
1%
33%
198
7.8%
$2,580
4%
33%
216
8.4%
$2,691
4%
33%
196
7.3%
$2,281
-7%
31%
183
8.0%
$2,163
-15%
29%
188
8.7%
$2,247
-13%
29%
202
9.0%
$7,958
43,859
$7,468
44,264
$8,248
45,901
$7,434
44,699
$7,649
46,251
$7,348
43,926
$8,224
43,219
$8,130
44,525
$8,158
42,415
$7,943
41,109
$7,950
39,995
$7,253
38,404
$7,134
48,329
$7,343
50,720
$7,421
54,532
1,724
13,717
2,168
12,852
2,389
12,622
2,145
12,711
1,913
8,975
1,951
8,436
1,887
8,239
1,643
6,756
1,551
6,036
1,856
8,317
1,485
7,946
1,267
7,601
1,343
7,675
1,602
20,373
1,452
19,901
9,682
57,576
9,636
57,116
10,637
58,523
9,579
57,410
9,562
55,226
9,299
52,362
10,111
51,458
9,773
51,281
9,709
48,451
9,799
49,426
9,435
47,941
8,520
46,005
8,477
56,004
8,945
71,093
8,873
74,433
15,119
20,593
15,697
21,164
21,429
27,236
22,384
28,000
22,256
26,928
21,774
26,241
22,052
26,061
21,009
26,850
19,811
25,173
20,788
27,713
20,433
27,444
19,127
27,568
16,494
28,683
16,477
28,409
16,520
26,661
24,801
78,169
25,333
78,280
32,066
85,759
31,963
85,410
31,818
82,154
31,073
78,603
32,163
77,519
30,782
78,131
29,520
73,624
30,587
77,139
29,868
75,385
27,647
73,573
24,971
84,687
25,422
99,502
25,393
101,094
-6%
-7%
-14%
-4%
-5%
1%
-7%
3%
-4%
5%
-2%
-1%
0%
-6%
9%
0%
7%
-8%
8%
-6%
-3%
-7%
-11%
-14%
-13%
14%
-8%
23%
-7%
36%
-8%
-17%
9%
-23%
8%
-22%
16%
-21%
11%
-35%
-10%
-34%
-21%
-35%
-23%
-47%
-19%
-33%
-5%
-1%
-21%
-4%
-23%
13%
-13%
27%
-14%
145%
-2%
150%
-6%
-10%
-10%
-9%
-2%
-5%
-2%
-4%
-1%
-4%
-3%
-8%
-5%
-12%
2%
-11%
2%
-12%
5%
-6%
-7%
-7%
-13%
-10%
-13%
16%
-9%
44%
-6%
55%
14%
21%
6%
-3%
53%
31%
47%
29%
47%
31%
39%
24%
3%
-4%
-6%
-4%
-11%
-7%
-5%
6%
-7%
5%
-9%
3%
-17%
14%
-21%
3%
-19%
-3%
5%
-3%
-1%
-7%
29%
4%
28%
5%
28%
5%
23%
0%
0%
-10%
-4%
-9%
-7%
-10%
-2%
-2%
-7%
-3%
-10%
-6%
-15%
15%
-17%
29%
-15%
34%
82%
76
78%
77
78%
78
78%
78
80%
84
79%
84
81%
84
83%
87
84%
88
81%
83
84%
83
85%
83
84%
86
82%
71
84%
73
18
24
22
23
22
22
22
22
20
16
21
16
19
16
17
13
16
12
19
17
16
17
15
17
16
14
18
29
16
27
$2,675
0.95x
0.94
5,813
0.75x
0.81
$2,760
0.98x
0.91
7,419
0.94x
0.83
$3,681
1.37x
0.98
9,260
1.18x
0.90
$1,863
0.64x
0.98
8,034
0.88x
0.93
$2,423
0.99x
0.99
5,395
0.71x
0.93
$2,265
0.90x
0.97
5,058
0.64x
0.85
$3,284
1.33x
0.95
7,030
0.89x
0.78
$2,239
0.87x
1.02
7,901
0.98x
0.81
Note: Bookings calculations are based on total backlog
Note: Q1 -Q3 2013 total company results restated to reflect axle business being in discontinued operations as of Q2
Source: C ompany data and Wells Fargo Securities, LLC
$2,383
0.97x
1.01
4,484
0.61x
0.78
$2,640
1.04x
1.05
8,809
1.12x
0.91
$2,216
0.86x
0.93
6,250
0.81x
0.89
$1,776
0.66x
0.88
6,171
0.76x
0.83
$2,238
0.98x
0.88
17,323
2.37x
1.24
$2,631
1.22x
0.91
22,563
3.02x
1.71
$2,175
0.97x
0.94
11,091
1.43x
1.86
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
Backlog Growth
Funded
Information systems and technology
Total company
Unfunded
Information systems and technology
Total company
Total
Information systems and technology
Total company
Estimated Potential Contract Value
Information systems and technology
Total company
Total Potential Contract Value
Information systems and technology
Total company
Q4:11
Dec
Government Services: Market Space Firming
51
Exhibit 31 - continued. General Dynamics (GD)
Lockheed Martin Corporation (LMT)
Annual Information Systems & Global Solutions Segment Analysis
(figures in $ millions)
Consolidated Operations
C onsolidated revenue
Operating profit (consolidated)
Operating profit (segment)
2008
Dec
restated
$ 41,212
4,987
4,826
% of company sales
Operating (segment) margin
Backlog
Bookings (calculated)
Book: Bill
2012
Dec
2013
Dec
$47,182
4,434
5,583
$45,358
4,505
5,752
Guidance
2014
Dec
$45.0bn
$5.60bn
$5.50bn
4%
-6
-1
2%
-2
5
1%
10
6
-4%
2
3
(at mid-point)
-1%
24%
-4%
12.1%
11.7
10.0%
11.5
9.0%
11.0
8.6%
11.4
9.4%
11.8
9.9%
12.7
12.4%
12.2
$
80,100
NA
NA
$77,300
41,195
0.9x
$78,400
46,771
1.0x
$80,700
48,799
1.0x
$82,300
48,782
1.0x
$82,600
45,658
1.0x
NA
$41.5-43.0bn
1.9x
$
9,057
876
$9,599
874
$9,921
814
$9,381
874
$8,846
808
$8,367
759
$7.70bn
$695mm
NM
NM
6%
0
3%
-7
-5%
7
-6%
-8
-5%
-6
(at mid-point)
-8%
-8%
22%
22%
22%
20%
19%
18%
17%
9.7%
9.1%
8.2%
9.3%
9.1%
9.1%
9.0%
$11,500
NA
NA
$10,700
8,808
0.9x
$9,700
8,921
0.9x
$9,300
8,981
1.0x
$8,700
8,246
0.9x
$8,300
7,967
1.0x
Note: 2014 guidance as of June 2014 quarterly press release.
Note: 2008 and 2009 annual results restated for divestitures of EIG (in 2010), PAE (in 2011), and Savi (in 2012)
Note: 2010 and 2011 annual results restated for reorganization of former Electronic Systems segment (in 2012)
Source: C ompany data and Wells Fargo Securities, LLC
NA
NA
NA
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
Sales growth - IS&GS
Operating profit (segment) growth
2011
Dec
restated
$46,499
4,020
5,281
6%
-12
5
Operating margin (consolidated)
Operating margin (segment)
IS&GS Segment
IS&GS revenue
Operating profit (segment)
2010
Dec
restated
$45,671
4,105
5,028
1%
12
NA
Sales growth - C onsolidated
Operating profit growth - C onsolidated
Operating profit growth - Segment
Backlog
Bookings (calculated)
Book: Bill
2009
Dec
restated
$43,867
4,367
5,056
IT & BPO Services
52
Exhibit 32. Lockheed Martin (LMT)
Lockheed Martin Corporation
Quarterly Information Systems & Global Solutions Segment Analysis
(figures in $ millions)
Consolidated Operations
C onsolidated revenue
Operating profit (consolidated)
Operating profit (segment)
Sales growth - C onsolidated
Operating profit growth - C onsolidated
Operating profit growth - Segment
Operating margin (consolidated)
Operating margin (segment)
Backlog
Bookings (calculated)
Book: Bill
Book: Bill (TTM)
IS&GS Segment
IS&GS revenue
Operating profit (segment)
1Q:11
Mar
restated
$10,626
880
1,171
2Q:11
Jun
restated
$11,543
999
1,351
3Q:11
Sep
restated
$12,119
1,035
1,355
4Q:11
Dec
restated
$12,211
1,106
1,404
1Q:12
Mar
restated
$11,293
1,044
1,340
2Q:12
Jun
restated
$11,921
1,192
1,470
3Q:12
Sep
restated
$11,869
1,137
1,434
4Q:12
Dec
1Q:13
Mar
2Q:13
Jun
3Q:13
Sep
4Q:13
Dec
1Q:14
Mar
2Q:14
Jun
3Q:14
Sep
$12,099
1,061
1,339
$11,070
1,119
1,343
$11,408
1,298
1,533
$11,347
1,254
1,455
$11,533
834
1,421
$10,650
1,432
1,429
$11,306
1,426
1,406
$11,114
1,392
1,346
3%
-6
5
3%
-11
6
7%
18
7
-4%
-1
2
6%
19
14
3%
19
9
-2%
10
6
-1%
-4
-5
-2%
7
0
-4%
9
4
-4%
10
1
-5%
-21
6
-4%
28
6
-1%
10
-8
-2%
11
-7
8.3%
11.0
8.7%
11.7
8.5%
11.2
9.1%
11.5
9.2%
11.9
10.0%
12.3
9.6%
12.1
8.8%
11.1
10.1%
12.1
11.4%
13.4
11.1%
12.8
7.2%
12.3
13.4%
13.4
12.6%
12.4
12.5%
12.1
$80,000
12,226
1.2x
1.1
$77,200
8,743
0.8x
1.1
$73,000
7,919
0.7x
1.1
$80,700
19,911
1.6x
1.0
$76,600
7,193
0.6x
0.9
$75,500
10,821
0.9x
1.0
$75,600
11,969
1.0x
1.1
$82,300
18,799
1.6x
1.0
$77,900
6,670
0.6x
1.0
$75,100
8,608
0.8x
1.0
$78,700
14,947
1.3x
1.1
$82,600
15,433
1.3x
1.0
$79,600
7,650
0.7x
1.0
$77,800
9,506
0.8x
1.1
$76,500
9,814
0.9x
1.0
$2,149
194
$2,361
213
$2,323
213
$2,548
254
$2,090
188
$2,263
208
$2,292
209
$2,201
203
$2,106
189
$2,101
194
$2,059
187
$2,101
189
$1,910
174
$1,941
175
$1,949
175
Sales growth - IS&GS
Operating profit (segment) growth
-4%
-2
-6%
1
-8%
2
-3%
28
-3%
-3
-4%
-2
-1%
-2
-14%
-20
1%
1
-7%
-7
-10%
-11
-5%
-7
-9%
-8
-8%
-10
-5%
-6
% of company sales
20%
20%
19%
21%
19%
19%
19%
18%
19%
18%
18%
18%
18%
17%
18%
9.0%
9.0%
9.2%
10.0%
9.0%
9.2%
9.1%
9.2%
9.0%
9.2%
9.1%
9.0%
9.1%
9.0%
9.0%
$9,100
1,549
0.7x
0.9
$8,600
1,861
0.8x
0.9
$8,300
2,023
0.9x
0.9
$9,300
3,548
1.4x
1.0
$8,700
1,490
0.7x
1.0
$8,300
1,863
0.8x
1.0
$8,200
2,192
1.0x
1.0
$8,700
2,701
1.2x
0.9
$7,800
1,206
0.6x
0.9
$7,400
1,701
0.8x
0.9
$7,700
2,359
1.1x
0.9
$8,300
2,701
1.3x
1.0
$8,200
1,810
0.9x
1.0
$7,500
1,241
0.6x
1.0
$8,000
2,449
1.3x
1.0
Operating (segment) margin
Backlog
Bookings (calculated)
Book: Bill
Book: Bill (TTM)
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
Note: Q1 2011-Q3 2012 restated to reflect reorganization of former Electronic Systems segment
Source: C ompany data and Wells Fargo Securities, LLC
Government Services: Market Space Firming
53
Exhibit 32 - continued. Lockheed Martin (LMT)
Northrop Grumman Corporation (NOC)
Information Technology Business Segment Analysis - post TASC divestiture
(figures in $ millions)
Guidance
2008
2007
2009
2010
2011
2012
2013
2014
Consolidated Operations
Consolidated revenue
$
24,664
$
26,251
$
27,650
$
28,143
$
26,412
$
25,218
$
24,661
Segment operating profit
3,025
2,015
2,635
3,010
3,055
3,176
3,080
Operating inc ome (GAAP)
2,464
2,076
2,274
2,827
3,276
3,130
3,123
~$23.8bn
Sales growth - Consolidated
Segment operating profit growth
5%
7
6%
NM
5%
NM
2%
14
-6%
1
-5%
4
-2%
(3)
Segment operating profit margin
EBIT margin (GAAP)
12.3%
10.0
7.7%
7.9
9.5%
8.2
10.7%
10.0
11.6%
12.4
12.6%
12.4
12.5%
12.7
High 12%
Low 13%
7,921 $
766
7,356 $
761
6,596
633
$6.2bn
Information Systems Segment
Revenue
Operating profit
$
Information Systems revenue (% of tota
Sales growth
Operating margin
Information Systems Segment Backlog
Funded
Unfunded
Total
7,717
722
$
8,174
626
$
8,536
624
$
31%
31%
30%
30%
29%
27%
9.4%
6%
7.7%
4%
7.3%
-2%
9.0%
-6%
9.7%
-7%
10.3%
-10%
9.6%
$
4,319
4,508
8,827
$
4,711
5,879
10,590
$
10,158
1.21x
$
22,582
26,159
48,741
$
24,752
22,090
46,842
26,244
0.93x
4,123
4,440
8,563
$
5,894
0.74x
$
23,200
16,315
39,515
19,085
0.72x
Note: Figures adjusted to reflec t Shipbuilding spin-off (completed Marc h 2011)
Note: TASC divested in December 2009
Note: "Awards" are Wells Fargo Sec urities, LLC c alc ulations and are c alculated from total backlog
Note: In Q4'11, backlog measurement c hanged by management, reducing total bac klog by $3 billion
Sourc e: Company data and Wells Fargo Sec urities, LLC
4,045
4,496
8,541
$
7,334
1.00x
$
25,700
15,109
40,809
26,512
1.05x
High 9%
3,579
3,285
6,864
4,919
0.75x
$
22,544
14,489
37,033
20,885
0.85x
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
Awards
Book:Bill
$
31%
Awards
Book:Bill
Consolidated Backlog
Funded
Unfunded
Total
8,395
756
IT & BPO Services
54
Exhibit 33. Northrop Grumman (NOC)
Northrop Grumman Corporation (NOC)
Information Systems Business Segment Analysis - post TASC divestiture
(figures in $ millions)
2Q:11
1Q:11
3Q:11
4Q:11
1Q:12
2Q:12
3Q:12
4Q:12
1Q:13
2Q:13
3Q:13
4Q:13
1Q:14
2Q:14
3Q:14
Consolidated Operations
Consolidated revenue
$
6,734
$
6,560
$
6,612
$
6,506
$
6,198
$
6,274
$
6,270
$
6,476
$
6,104
$
6,294
$
6,106
$
6,157
$
5,848
$
6,039
$
5,984
Segment operating profit
721
784
777
773
789
782
730
875
748
797
763
772
757
742
840
Operating income (GAAP)
811
841
825
799
796
774
736
824
759
806
790
68
845
820
769
Sales growth - Consolidated
Segment operating profit growth
-3%
2
-10%
(1)
-6%
2
-6%
3
-8%
9
-4%
(0)
-5%
(6)
0%
13
-2%
(5)
0%
2
-3%
5
-5%
(12)
-4%
1
-4%
(7)
-2%
10
Segment operating profit margin
EBIT margin (GAAP)
10.7%
12.0
12.0%
12.8
11.8%
12.5
11.9%
12.3
12.7%
12.8
12.5%
12.3
11.6%
11.7
13.5%
12.7
12.3%
12.4
12.7%
12.8
12.5%
12.9
12.5%
1.1
12.9%
14.4
12.3%
13.6
14.0%
12.9
Information Systems Segment
Revenue
Operating profit
$
Information Systems revenue (% of total
Sales growth
Operating margin
Information Systems Segment Backlog
Funded
$
Unfunded
Total
Awards
Book:Bill
Book:Bill (TTM)
Consolidated Backlog
Funded
Unfunded
Total
$
2,031
189
$
1,955
187
$
1,910
196
$
1,844
205
$
1,856
202
$
1,776
170
$
1,880
184
$
1,674
171
$
1,689
141
$
1,619
162
$
1,614
159
$
1,577
162
$
1,562
153
$
1,511
150
30%
31%
30%
29%
30%
30%
28%
29%
27%
27%
27%
26%
27%
26%
25%
-2%
9.6%
-4%
9.3%
-8%
9.6%
-8%
10.3%
-9%
11.1%
-9%
10.9%
-9%
9.6%
-2%
9.8%
-9%
10.2%
-9%
8.3%
-9%
10.0%
-14%
9.9%
-6%
10.3%
-8%
9.8%
-7%
9.9%
4,498
4,269
8,767
202
0.10x
1.00
$ 23,792
24,602
48,394
8,286
1.23x
1.00
$
4,369
5,497
9,866
3,130
1.54x
0.97
$ 23,381
18,423
41,804
(30)
0.00x
0.79
$
5,142
5,346
10,488
2,577
1.32x
1.00
$ 24,910
17,043
41,953
6,761
1.02x
0.79
$
4,123
4,440
8,563
(15)
-0.01x
0.74
$ 23,200
16,315
39,515
4,068
0.63x
0.72
$
4,265
4,571
8,836
2,117
1.15x
1.01
$ 25,040
14,094
39,134
5,817
0.94x
0.64
$
3,984
4,412
8,396
1,416
0.76x
0.81
$ 25,945
15,602
41,547
8,687
1.38x
0.99
$
4,385
4,433
8,818
2,198
1.24x
0.77
$ 25,636
15,373
41,009
5,732
0.91x
0.96
$
4,045
4,496
8,541
1,603
0.85x
1.00
$ 25,700
15,109
40,809
6,276
0.97x
1.05
$
3,485
4,551
8,036
1,169
0.70x
0.89
$ 24,556
14,854
39,410
4,705
0.77x
1.01
$
3,146
3,930
7,076
$
729
0.43x
0.81
$ 23,206
14,516
37,722
3,694
3,641
7,335
1,878
1.16x
0.78
$ 23,424
14,094
37,518
4,606
0.73x
0.85
Note: Spin-off of Shipbuilding business reflected beginning in 2009 in consolidated revenue and operating income
Note: TASC divested in December 2009
Note: "Awards" are Wells Fargo Securities, LLC calculations and are calc ulated from total backlog
Note: In Q4'11, bac klog measurement changed by management, reduc ing total backlog by $3 billion; therefore backlog beginning from Q4'11 may not be c omparable
Source: Company data and Wells Fargo Securities, LLC
5,902
0.97x
0.86
$
3,579
3,285
6,864
1,143
0.71x
0.75
$ 22,544
14,489
37,033
5,672
0.92x
0.85
$
3,335
3,407
6,742
1,455
0.92x
0.80
$ 22,757
13,480
36,237
5,052
0.86x
0.87
$
3,154
3,510
6,664
1,484
0.95x
0.94
$ 22,176
13,379
35,555
5,357
0.89x
0.91
$
3,549
3,258
6,807
1,654
1.09x
0.92
$ 22,687
15,850
38,537
8,966
1.50x
1.04
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
Awards
Book:Bill
Book:Bill (TTM)
2,025
194
Government Services: Market Space Firming
55
Exhibit 33 - continued. Northrop Grumman (NOC)
FYE
Booz Allen Hamilton
Mar
$2,902.5
$3,209.2
CACI International Inc.
Jun
$557.9
$681.9
$843.1
$1,145.8
$1,623.1
1,755.3
1,938.0
Dynamics Research Corporation
Dec
190.3
192.6
244.8
275.7
300.4
259.0
Engility
Dec
Global Defense Technology & Systems Dec
ICF International, Inc.
Dec
KEYW Corporation
Dec
Leidos Holdings
Jan
ManTech International Corporation
Dec
NCI, Inc.
Dec
2001
2002
NA
NA
NA
NA
NA
111.7
NA
143.5
NA
NA
NA
431.4
NA
500.2
NA
NA
NA
NA
NA
NA
145.8
NA
NA
NA
NA
NA
139.5
NA
2005
NA
NA
NA
177.2
NA
2006
NA
NA
331.3
NA
2008
2009
2010
2011
2012
2013
2014
$3,625.1 $4,351.2 $5,122.6 $5,591.3 $5,859.2 $5,758.1 $5,478.7
2,420.5
2,730.2
3,149.1
3,577.8
3,774.5
3,682.0
BAH
CACI
229.6
236.8
268.7
272.1
322.6
317.0
2,958.0
2,882.0
2,658.0
2,374.3
2,070.8
1,655.3
189.4
212.8
232.7
697.4
674.4
764.7
840.8
937.1
949.3
NA
ICFI
108.0
190.6
243.5
298.7
NA
KEYW
NA
727.1
NA
NA
NA
NA
NA
NA
3,564.6
1,407.4
NA
NA
DRCO
NA
EGL
NA
GTEC
5,833.0
6,910.0
7,518.0
8,061.0
8,935.0 10,073.0 10,846.0 10,921.0
5,860.0
6,469.0
842.4
980.3
1,137.2
1,448.1
1,870.9
2,020.3
2,604.0
2,870.0
2,582.3
2,310.1
NA
MANT
136.4
171.3
191.3
218.3
304.4
390.6
468.9
581.3
558.3
368.4
332.3
NA
NCIT
4,767.0
4,637.0
4,690.0
4,017.0
1,675.2
1,675.2
1,507.7
1,386.4
Jan
SRA International, Inc.
Jun
Stanley, Inc.
Mar
NA
NA
NA
VSE Corporation
Dec
NA
NA
NA
361.2
2004
701.6
SAIC, Inc.
312.5
NA
2003
Fiscal Year
2007
Company
NA
450.4
NA
NA
NA
NA
NA
NA
NA
615.8
881.8
1,179.3
1,268.9
1,506.9
1,540.6
1,666.6
178.7
282.5
284.8
409.4
604.3
779.7
884.8
280.1
363.7
653.2
1,043.7
1,014.6
866.0
NA
NA
580.8
NA
546.8
NA
471.6
5,755.0
IT & BPO Services
56
Exhibit 34. Revenue Metrics
Revenue (MM)
LDOS
SAIC
SRX
NA
SXE
NA
VSEC
Revenue Growth (Yr/Yr)
Company
FYE
2001
2002
2003
2004
2005
Booz Allen Hamilton
Mar
NA
NA
NA
NA
NA
CACI International Inc.
Jun
15%
22%
24%
36%
Dynamics Research Corporation
Dec
4%
1%
27%
13%
Engility
2006
Fiscal Year
2007
2009
2010
2011
2012
2013
2014
NA
11%
13%
20%
18%
9%
5%
(2%)
(5%)
42%
8%
10%
25%
13%
15%
14%
5%
(2%)
(3%)
CACI
9%
(14%)
(11%)
3%
13%
1%
19%
(2%)
NA
NA
DRCO
(3%)
(8%)
(11%)
(13%)
(20%)
NA
EGL
NA
12%
9%
(4%)
(3%)
NA
NA
11%
13%
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
ICF International, Inc.
Dec
NA
28%
(4%)
27%
87%
KEYW Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
Leidos Holdings
Jan
NA
NA
NA
21%
18%
9%
7%
ManTech International Corporation
Dec
14%
16%
40%
20%
16%
16%
27%
29%
8%
29%
10%
(10%)
(11%)
NA
MANT
NCI, Inc.
Dec
NA
NA
(1%)
26%
12%
14%
39%
28%
20%
24%
(4%)
(34%)
(10%)
NA
NCIT
SAIC, Inc.
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
(3%)
1%
(14%)
SRA International, Inc.
Jun
0%
16%
25%
37%
43%
34%
2%
8%
2%
(2%)
(10%)
(8%)
NA
119%
8%
19%
(15%)
BAH
Global Defense Technology & Systems Dec
2%
NA
2008
NA
NA
NA
NA
GTEC
13%
10%
11%
1%
NA
ICFI
NA
76%
28%
23%
1%
(46%)
8%
Stanley, Inc.
Mar
NA
NA
NA
25%
58%
1%
44%
48%
29%
13%
VSE Corporation
Dec
NA
NA
NA
NA
30%
30%
80%
60%
(3%)
(15%)
2005
2006
NA
(33%)
NA
(6%)
NA
NA
(14%)
NA
(11%)
KEYW
LDOS
SAIC
SRX
NA
SXE
NA
VSEC
Organic Revenue Growth (Yr/Yr)
FYE
Booz Allen Hamilton
Mar
NA
CACI International Inc.
Jun
3%
Dynamics Research Corporation
Engility
2001
2002
2003
2004
NA
Fiscal Year
2007
2008
2009
2010
2011
2012
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
11%
15%
15%
16%
3%
(1%)
14%
10%
13%
12%
(2%)
(14%)
(11%)
NA
2%
2013
NA
(6%)
2014
NA
(11%)
BAH
CACI
Dec
NA
NA
NA
6%
6%
1%
19%
NA
NA
NA
DRCO
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
EGL
Global Defense Technology & Systems Dec
NA
NA
NA
NA
NA
NA
NA
NA
12%
NA
NA
NA
NA
NA
GTEC
ICF International, Inc.
Dec
NA
NA
NA
NA
5%
3%
11%
20%
16%
14%
10%
1%
32%
NA
ICFI
KEYW Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
25%
8%
16%
NA
Leidos Holdings
Jan
NA
NA
NA
NA
17%
3%
4%
7%
6%
0%
0%
NA
10%
NA
(11%)
KEYW
LDOS
ManTech International Corporation
Dec
NA
10%
14%
16%
14%
12%
16%
18%
6%
10%
4%
(14%)
(11%)
NA
MANT
NCI, Inc.
Dec
NA
NA
(1%)
10%
12%
14%
19%
11%
16%
22%
(10%)
(37%)
(10%)
NA
NCIT
SAIC, Inc.
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SRA International, Inc.
Jun
NA
20%
15%
25%
38%
17%
3%
3%
1%
8%
2%
18%
37%
19%
NA
NA
NA
NA
NA
SXE
NA
(3%)
NA
NA
NA
NA
NA
VSEC
Stanley, Inc.
Mar
NA
NA
NA
NA
VSE Corporation
Dec
NA
NA
NA
NA
NA
130%
NA
130%
166%
Notes:
BAH, CACI, ICFI, LDOS, MANT, NCIT, and SAIC are followed by this analyst, and data may be adjusted from what is in the SEC filings.
For all other companies, information is derived from SEC filings and press releases.
Source: Wells Fargo Securities, LLC, FactSet, and company reports
NA
(3%)
NA
(10%)
NA
SAIC
(8%)
SRX
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
Company
2003
$228.6
$235.7
$263.4
$288.4
$358.3
$388.7
$389.7
$414.9
$429.8
$423.1
$419.5
$435.4
$477.3
$467.6
$476.9
$473.1
$520.4
$553.6
$577.8
$634.2
Dynamics Research Corporation
Dec
58.6
62.1
62.4
61.6
62.1
65.0
70.5
78.2
73.5
76.2
79.1
71.6
68.2
67.3
63.2
60.3
56.8
58.0
58.3
56.5
Engility
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Global Defense Technology & Systems Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
43.3
49.9
50.0
46.2
49.6
53.4
54.0
55.8
45.9
ICF International, Inc.
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
186.4
175.1
184.1
176.3
161.9
157.9
175.4
167.1
174.1
Dec
Leidos Holdings
Jan
ManTech International Corporation
Dec
NCI, Inc.
Dec
SAIC, Inc.
NA
NA
148.1
NA
Jan
NA
116.4
NA
NA
177.1
NA
NA
127.1
NA
NA
181.6
NA
NA
132.0
NA
NA
NA
194.8
NA
NA
143.0
NA
NA
NA
202.8
NA
NA
160.0
Jun
Sep
NA
NA
NA
198.6
NA
NA
180.9
NA
NA
NA
211.3
NA
NA
203.5
Dec
NA
NA
Mar
Jun
NA
Sep
NA
Sep
NA
NA
Jun
NA
Sep
NA
Sep
Dec
Mar
Jun
Sep
Dec
$1,073.0
$1,030.4
$1,091.6
$1,156.3
$1,229.5
$1,279.3
655.0
654.8
672.5
674.0
728.9
739.5
776.7
CACI
54.8
53.7
62.3
66.0
67.2
68.1
67.5
65.8
DRCO
NA
NA
NA
NA
NA
NA
NA
NA
10.1
12.1
2,011.0
2,222.0
2,365.0
2,337.0
2,369.0
2,555.0
2,631.0
2,518.0
2,649.0
2,749.0
2,765.0
2,683.0
290.7
294.3
348.7
383.4
421.8
425.1
465.0
486.1
494.7
449.6
514.1
514.6
542.1
MANT
45.8
46.4
47.5
50.1
47.4
46.0
47.9
59.9
64.6
64.3
66.7
85.2
88.2
91.5
96.3
101.1
101.6
105.0
108.5
130.2
125.2
NCIT
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
GTEC
2,147.0
NA
NA
CACI
ICFI
283.7
NA
NA
BAH
2,142.0
NA
NA
NA
287.5
NA
NA
Jun
NA
2,055.0
NA
NA
Mar
NA
275.3
NA
NA
Dec
NA
1,958.0
241.1
NA
Mar
261.0
NA
NA
Dec
1,966.0
226.0
NA
NA
262.4
NA
NA
Jun
2,028.0
NA
NA
NA
239.4
NA
NA
Mar
217.5
211.2
NA
NA
229.8
NA
NA
NA
Dec
2009
$222.0
NA
Mar
2008
Jun
NA
Dec
2007
CACI International Inc.
Dec
Sep
2006
Mar
NA
Jun
2005
FYE
KEYW Corporation
Mar
2004
Company
Booz Allen Hamilton
NA
NA
NA
NA
KEYW
LDOS
SAIC
SRA International, Inc.
Jun
280.7
305.3
296.1
297.2
304.0
321.0
317.6
326.2
364.1
382.0
376.0
384.8
392.4
369.3
376.9
402.0
417.5
413.5
SRX
Stanley, Inc.
Mar
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
66.9
68.9
84.2
92.6
98.2
102.0
116.6
133.5
150.2
147.1
173.5
172.6
191.1
203.6
212.4
208.7
217.1
227.0
SXE
VSE Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
64.9
63.3
94.8
103.6
102.0
120.7
159.6
174.7
198.1
188.7
251.7
306.8
296.5
240.5
255.1
263.1
256.0
VSEC
Revenue Growth (Yr/Yr)
2003
Company
FYE
Booz Allen Hamilton
Mar
Mar
NA
Jun
2004
Sep
NA
NA
Dec
Mar
Jun
2005
Sep
NA
NA
NA
NA
Dec
Mar
Jun
2006
Sep
NA
NA
NA
NA
Dec
NA
Mar
NA
Jun
2007
Sep
NA
NA
Dec
NA
Mar
Jun
NA
2008
Sep
NA
Dec
NA
Mar
NA
Jun
NA
2009
Sep
Dec
NA
NA
NA
Mar
Jun
NA
Sep
Dec
NA
15%
24%
BAH
CACI International Inc.
Jun
NA
20%
25%
29%
30%
57%
65%
48%
44%
20%
9%
8%
5%
11%
11%
14%
9%
9%
18%
21%
34%
26%
18%
16%
6%
11%
13%
15%
Dynamics Research Corporation
Dec
NA
30%
32%
22%
6%
5%
13%
27%
18%
17%
12%
(8%)
(7%)
(12%)
(20%)
(16%)
(17%)
(14%)
(8%)
(6%)
(4%)
(7%)
7%
17%
23%
27%
8%
(0%)
Engility
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Global Defense Technology & Systems Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
15%
7%
8%
21%
ICF International, Inc.
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
(13%)
(10%)
(5%)
(5%)
KEYW Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Leidos Holdings
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
10%
5%
6%
5%
6%
10%
3%
11%
14%
12%
18%
15%
11%
8%
ManTech International Corporation
Dec
NA
49%
39%
37%
37%
12%
16%
18%
7%
21%
24%
14%
27%
20%
8%
11%
7%
21%
35%
45%
44%
33%
27%
17%
6%
11%
6%
10%
MANT
NCI, Inc.
Dec
NA
NA
NA
NA
NA
NA
NA
42%
14%
18%
13%
3%
(1%)
1%
20%
36%
40%
39%
42%
37%
42%
44%
19%
15%
15%
13%
29%
23%
NCIT
SAIC, Inc.
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SRA International, Inc.
Jun
25%
30%
36%
37%
42%
54%
48%
41%
Stanley, Inc.
Mar
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
VSE Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
33%
NA
NA
NA
NA
NA
NA
NA
12%
NA
8%
5%
NA
(7%)
CACI
DRCO
EGL
GTEC
7%
ICFI
NA
KEYW
7%
LDOS
SAIC
38%
45%
31%
23%
8%
5%
7%
10%
20%
19%
18%
18%
8%
(3%)
0%
4%
6%
12%
SRX
(15%)
12%
24%
43%
47%
48%
39%
44%
53%
44%
49%
29%
27%
38%
22%
21%
14%
12%
SXE
NA
NA
NA
NA
NA
57%
91%
68%
69%
94%
56%
58%
76%
50%
27%
1%
(14%)
(14%)
VSEC
Government Services: Market Space Firming
57
Exhibit 34. Revenue Metrics continued
Revenue (MM)
Organic Revenue Growth (Yr/Yr)
2003
Mar
Jun
2004
Sep
Dec
Mar
Jun
2005
Company
FYE
Booz Allen Hamilton
Mar
NA
NA
NA
NA
NA
NA
Sep
NA
Dec
NA
Mar
NA
Jun
NA
CACI International Inc.
Jun
14%
15%
11%
15%
15%
23%
23%
14%
15%
Dynamics Research Corporation
Dec
NA
8%
9%
NA
6%
5%
6%
8%
0%
Engility
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
2006
Sep
Dec
Mar
Jun
2007
Sep
NA
Dec
NA
Mar
NA
Jun
NA
2008
Sep
NA
Dec
NA
Mar
NA
NA
NA
NA
NA
14%
9%
4%
0%
(1%)
(4%)
1%
(0%)
7%
13%
11%
0%
0%
NA
NA
NA
(20%)
(16%)
(17%)
(14%)
(8%)
(6%)
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Jun
2009
Sep
Dec
NA
NA
NA
20%
12%
11%
(4%)
(7%)
2%
NA
NA
Mar
Jun
Sep
Dec
NA
NA
NA
13%
5%
11%
12%
13%
7%
5%
4%
2%
(0%)
NA
NA
NA
NA
NA
NA
BAH
CACI
DRCO
EGL
Global Defense Technology & Systems Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
21%
(7%)
ICF International, Inc.
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
21%
20%
24%
21%
16%
14%
9%
14%
22%
KEYW Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
KEYW
Leidos Holdings
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
4%
0%
3%
2%
3%
7%
2%
8%
8%
9%
14%
10%
10%
7%
11%
7%
1%
4%
LDOS
ManTech International Corporation
Dec
13%
13%
12%
15%
24%
17%
12%
14%
14%
14%
18%
10%
18%
14%
8%
10%
6%
10%
18%
28%
19%
20%
23%
12%
3%
8%
4%
8%
NCI, Inc.
Dec
NA
NA
NA
NA
NA
NA
NA
21%
14%
18%
13%
3%
(1%)
1%
20%
36%
33%
25%
15%
12%
16%
10%
10%
7%
6%
13%
26%
19%
NCIT
SAIC, Inc.
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SAIC
SRA International, Inc.
Jun
10%
14%
17%
22%
27%
33%
44%
40%
39%
30%
22%
25%
13%
10%
7%
1%
2%
4%
6%
3%
2%
1%
1%
(3%)
1%
NA
Stanley, Inc.
Mar
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
14%
17%
18%
24%
34%
42%
34%
39%
29%
17%
24%
10%
5%
11%
12%
VSE Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
(14%)
(14%)
8%
12%
GTEC
ICFI
MANT
SRX
SXE
VSEC
Notes:
BAH, CACI, ICFI, LDOS, MANT, NCIT, and SAIC are followed by this analyst, and data may be adjusted from what is in the SEC filings.
For all other companies, information is derived from SEC filings and press releases.
Source: Wells Fargo Securities, LLC, FactSet, and company reports
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
2010
Jun
Sep
Dec
Mar
Jun
2012
Sep
Dec
Booz Allen Hamilton
Mar
$1,261.4
$1,352.6
$1,341.9
$1,367.2
CACI International Inc.
Jun
784.2
848.7
834.0
867.3
913.4
963.2
924.4
973.2
928.0
948.9
931.2
931.6
906.2
912.9
864.3
Dynamics Research Corporation
Dec
68.6
65.3
68.4
69.8
69.5
68.5
96.4
88.2
85.9
80.8
76.8
73.5
73.6
72.1
67.5
CACI International Inc.
Jun
432.0
418.3
409.4
395.7
361.7
377.3
339.3
$1,493.0 $1,446.8 $1,429.0 $1,442.7
NA
NA
NA
NA
NA
NA
NA
NA
49.2
55.4
82.2
NA
NA
NA
NA
NA
Mar
Jun
2013
FYE
Global Defense Technology & Systems Dec
Mar
2011
Company
Sep
Dec
$1,540.6 $1,432.4 $1,387.7 $1,392.7
NA
NA
NA
NA
Mar
Jun
Sep
Dec
$1,545.3 $1,427.7 $1,378.0 $1,273.2
NA
NA
NA
894.2
NA
329.1
NA
Mar
2014
Jun
Sep
$1,399.8 $1,322.3 $1,304.8
900.4
NA
338.8
NA
905.7
NA
363.7
NA
814.7
NA
345.1
NA
ICF International, Inc.
Dec
174.4
199.6
197.7
192.9
194.7
213.4
218.7
213.9
227.6
239.6
237.9
232.0
233.9
241.6
244.1
229.8
245.1
263.9
264.8
KEYW Corporation
Dec
21.7
27.9
29.0
29.3
41.7
44.9
54.0
50.1
55.8
56.2
57.4
74.2
77.9
78.3
73.8
68.8
63.8
74.2
79.0
BAH
CACI
DRCO
EGL
GTEC
ICFI
KEYW
Leidos Holdings
Jan
2,627.0
2,749.0
2,821.0
2,724.0
2,688.0
2,596.0
2,863.0
2,850.0
1,598.0
1,624.0
1,673.0
1,580.0
1,593.0
1,457.0
1,414.0
1,291.0
1,312.0
1,306.0
1,276.0
LDOS
ManTech International Corporation
Dec
587.6
661.6
657.0
697.9
700.9
752.7
734.6
681.8
676.5
638.9
645.0
621.8
646.0
605.1
567.4
491.5
452.0
463.4
447.2
MANT
NCI, Inc.
Dec
115.0
126.6
168.8
171.0
150.2
161.2
132.0
114.8
SAIC, Inc.
Jan
SRA International, Inc.
Jun
NA
411.0
NA
424.6
Stanley, Inc.
Mar
232.0
213.3
VSE Corporation
Dec
228.2
212.5
NA
423.9
NA
212.9
NA
434.8
NA
212.4
NA
437.3
NA
NA
NA
429.3
429.1
NA
151.2
158.5
Mar
Jun
NA
425.9
NA
NA
99.1
91.2
88.5
89.7
91.5
83.0
77.9
79.9
89.1
77.8
75.7
1,163.0
1,211.0
1,186.0
1,130.0
1,107.0
1,005.0
974.0
931.0
962.0
939.0
993.0
SAIC
397.2
422.9
389.8
376.7
376.3
364.9
349.8
333.7
355.9
346.9
338.6
SRX
NA
NA
159.9
148.9
140.0
135.7
Sep
Dec
Mar
NA
NA
NA
NA
134.2
115.0
119.2
119.1
Jun
Sep
Dec
Mar
NA
NA
NA
111.1
122.4
119.4
Jun
Sep
Dec
Mar
NA
108.0
NA
101.7
IT & BPO Services
58
Exhibit 34. Revenue Metrics continued
Revenue (MM)
NCIT
SXE
VSEC
Revenue Growth (Yr/Yr)
2010
16%
17%
9%
7%
10%
8%
5%
4%
3%
(1%)
(3%)
(3%)
0%
(0%)
(1%)
(9%)
(9%)
(7%)
(5%)
BAH
CACI International Inc.
Jun
16%
16%
13%
12%
16%
13%
11%
12%
2%
(1%)
1%
(4%)
(2%)
(4%)
(7%)
(4%)
(1%)
(1%)
(6%)
CACI
2%
(4%)
5%
41%
26%
24%
18%
(20%)
(17%)
(14%)
(11%)
(12%)
NA
NA
NA
NA
NA
NA
(16%)
(10%)
(17%)
NA
NA
NA
Dec
Global Defense Technology & Systems Dec
NA
NA
(8%)
3%
1%
Dec
2014
Jun
Mar
Dec
Sep
2013
Booz Allen Hamilton
Engility
Jun
2012
FYE
Dynamics Research Corporation
Mar
2011
Company
6%
NA
NA
47%
NA
1%
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
(17%)
NA
NA
(6%)
NA
NA
(4%)
NA
Sep
NA
2%
NA
DRCO
EGL
GTEC
ICF International, Inc.
Dec
11%
14%
18%
11%
12%
7%
11%
11%
17%
12%
9%
8%
3%
1%
3%
(1%)
5%
9%
8%
ICFI
KEYW Corporation
Dec
NA
NA
188%
143%
92%
61%
86%
71%
34%
25%
6%
48%
40%
39%
29%
(7%)
(18%)
(5%)
7%
KEYW
Leidos Holdings
Jan
(1%)
NA
2%
2%
2%
(6%)
1%
5%
NM
NM
NM
NM
(0%)
(10%)
(15%)
(18%)
(18%)
(10%)
(10%)
LDOS
ManTech International Corporation
Dec
31%
29%
28%
29%
19%
14%
12%
(2%)
(3%)
(15%)
(12%)
(9%)
(5%)
(5%)
(12%)
(21%)
(30%)
(23%)
(21%)
MANT
NCI, Inc.
Dec
9%
17%
30%
37%
31%
27%
(22%)
(33%)
(34%)
(43%)
(33%)
(22%)
(8%)
(9%)
(12%)
(11%)
(3%)
(6%)
(3%)
SAIC, Inc.
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
(5%)
(17%)
(18%)
(18%)
(13%)
(7%)
2%
SRA International, Inc.
Jun
9%
6%
2%
5%
6%
1%
1%
(2%)
(9%)
(1%)
(9%)
(12%)
(5%)
(14%)
(10%)
(11%)
(5%)
(5%)
(3%)
Stanley, Inc.
Mar
9%
2%
VSE Corporation
Dec
(5%)
(17%)
NA
NA
(19%)
(17%)
Sep
Dec
NA
NA
(34%)
(25%)
Mar
Jun
NA
NA
(25%)
(30%)
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
(7%)
(14%)
(16%)
(23%)
(15%)
(12%)
(17%)
6%
0%
(9%)
(8%)
Dec
Mar
Jun
NCIT
SAIC
SRX
SXE
VSEC
Organic Revenue Growth (Yr/Yr)
2010
Mar
Jun
2011
2012
Sep
Dec
Mar
Jun
2013
Sep
Sep
Mar
2014
Jun
NA
NA
NA
NA
(11%)
(12%)
(13%)
(16%)
CACI
NA
NA
NA
DRCO
NA
NA
NA
EGL
NA
NA
NA
GTEC
0%
2%
2%
ICFI
FYE
Dec
Booz Allen Hamilton
Mar
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
CACI International Inc.
Jun
14%
14%
11%
10%
14%
12%
8%
9%
(2%)
(5%)
(3%)
(7%)
(6%)
(7%)
(9%)
Dynamics Research Corporation
Dec
2%
(4%)
1%
6%
1%
5%
3%
3%
(10%)
(16%)
NA
NA
NA
NA
NA
NA
Engility
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Global Defense Technology & Systems Dec
(8%)
3%
37%
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
18%
20%
15%
8%
11%
6%
10%
10%
7%
1%
(2%)
(2%)
1%
1%
2%
(2%)
Sep
BAH
ICF International, Inc.
Dec
KEYW Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
KEYW
Leidos Holdings
Jan
(1%)
(1%)
2%
1%
1%
(7%)
(2%)
3%
2%
8%
0%
(6%)
(4%)
NA
NA
NA
NA
NA
NA
LDOS
ManTech International Corporation
Dec
15%
13%
11%
4%
9%
8%
5%
(6%)
(6%)
(18%)
(16%)
(11%)
(5%)
(6%)
(12%)
(21%)
(31%)
(23%)
(27%)
NCI, Inc.
Dec
6%
13%
28%
37%
31%
17%
(31%)
(37%)
(44%)
(43%)
(33%)
(22%)
(8%)
(9%)
(12%)
(11%)
(3%)
(6%)
(3%)
SAIC, Inc.
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SAIC
SRA International, Inc.
Jun
8%
5%
(0%)
1%
4%
NA
NA
NA
(9%)
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SRX
MANT
NCIT
Stanley, Inc.
Mar
9%
2%
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SXE
VSE Corporation
Dec
(5%)
(17%)
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
VSEC
Notes:
BAH, CACI, ICFI, LDOS, MANT, NCIT, and SAIC are followed by this analyst, and data may be adjusted from what is in the SEC filings.
For all other companies, information is derived from SEC filings and press releases.
Source: Wells Fargo Securities, LLC, FactSet, and company reports
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
Company
Company
FYE
2001
2002
2003
2004
2005
2006
Booz Allen Hamilton
Mar
NA
NA
NA
NA
NA
NA
CACI International Inc .
Jun
NA
NA
1,517
NA
2009
2010
2011
2012
2013
2014
18,822
21,614
23,315
25,024
24,950
24,455
22,664
BAH
14,900
15,300
CACI
6,400
9,400
9,500
10,200
10,500
12,100
12,500
13,200
12,900
14,900
1,714
1,960
1,822
1,513
1,414
1,503
1,469
1,298
1,263
1,255
Dynamics Research Corporation
Dec
Engility
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
Global Defense Tec hnology & Systems Dec
NA
NA
NA
NA
NA
NA
NA
NA
695
ICF International, Inc .
Dec
NA
NA
NA
NA
KEYW Corporation
Dec
NA
NA
NA
NA
NA
1,765
Fiscal Year
2007
2008
Jan
NCI, Inc.
Dec
NA
NA
SAIC, Inc .
Jan
NA
NA
SRA International, Inc .
Jun
Stanley, Inc .
Mar
NA
NA
NA
NA
VSE Corporation
Dec
NA
NA
NA
NA
Company
FYE
2001
2002
2003
2004
Booz Allen Hamilton
Mar
NA
NA
NA
NA
NA
NA
NA
CACI International Inc .
Jun
NA
NA
$132
$122
$171
$172
$185
Dynamics Research Corporation
Dec
$125
$109
143
141
165
171
Engility
Dec
NA
NA
NA
NA
NA
NA
Global Defense Tec hnology & Systems Dec
NA
NA
NA
NA
NA
ICF International, Inc .
Dec
NA
NA
NA
NA
KEYW Corporation
Dec
NA
NA
NA
NA
2,082
5,000
5,500
~1,450
~1,480
NA
2,651
NA
3,400
NA
6,000+
~1,400
NA
4,203
43,600
44,000
5,600
7,300
~1,500
~2,000
NA
3,600
NA
Dec
1,694
NA
NA
3,142
ManTec h International Corporation
4,436
NA
NA
2,111
Leidos Holdings
3,500
NA
1,677
NA
44,000
~7,900
~2,500
NA
NA
NA
1,125
NA
NA
DRCO
NA
NA
NA
NA
EGL
NA
NA
NA
NA
GTEC
3,500+
3,700+
4,000+
4,500
4,500
NA
ICFI
NA
722
837
1,200
1,068
NA
KEYW
45,587
~8,000
~2,800
NA
4,975
5,215
6,497
6,977
NA
1,852+
2,400+
3,600+
4,700+
716
857
1,223
1,920
2,534
46,200
~10,100
~2,600
NA
43,000
~9,300
~2,600
NA
7,132
NA
~4,800
NA
2,897
40,000
~9,700
2,200
NA
6,100
NA
22,000
~7,800
1,900
NA
5,600
NA
2,516
2,472
1,872
22,000
LDOS
NA
MANT
NA
NCIT
13,000
5,200
SAIC
SRX
NA
SXE
NA
VSEC
Revenue/Employee
2005
2006
Fiscal Year
2007
2008
2009
2010
2011
2012
2013
2014
$193
$201
$220
$223
$235
$235
$242
200
218
239
277
253
247
233
CACI
162
158
183
210
255
253
NA
NA
DRCO
NA
NA
NA
NA
NA
NA
NA
NA
EGL
NA
NA
NA
306
207
NA
NA
NA
NA
GTEC
106
157
231
194
193
207
210
208
211
NA
ICFI
NA
NA
NA
NA
NA
150
228
203
280
NA
KEYW
BAH
Leidos Holdings
Jan
NA
NA
NA
NA
NA
172
183
203
221
235
254
147
294
262
LDOS
ManTec h International Corporation
Dec
123
113
140
153
163
203
198
237
253
258
309
266
296
NA
MANT
NCI, Inc.
Dec
NA
NA
94
116
137
146
152
156
167
224
215
167
168
NA
NCIT
SAIC, Inc .
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
309
SAIC
SRA International, Inc .
Jun
185
173
170
181
210
237
243
232
221
234
NA
275
269
267
SRX
Stanley, Inc .
Mar
NA
NA
NA
NA
NA
154
171
168
166
184
NA
NA
NA
NA
SXE
VSE Corporation
Dec
NA
NA
NA
NA
391
424
534
544
400
299
231
221
252
NA
VSEC
Company
FYE
2001
2002
2003
2004
2005
2006
Fiscal Year
2007
2008
2009
2010
2011
2012
2013
Booz Allen Hamilton
Mar
NA
NA
NA
NA
NA
NA
NA
15%
15%
14%
19%
21%
NA
NA
BAH
CACI International Inc .
Jun
NA
15%
14%
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
CACI
Dynamics Research Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
DRCO
Engility
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
EGL
Global Defense Tec hnology & Systems Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
GTEC
ICF International, Inc .
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
ICFI
KEYW Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
KEYW
Leidos Holdings
Jan
NA
NA
NA
NA
NA
NA
NA
14%
12%
<10%
ManTec h International Corporation
Dec
19%
15%
15%
NA
NA
NA
NA
NA
17%
18%
mid teens
mid teens
Government Services: Market Space Firming
59
Exhibit 35. Employee Metrics
Total Headcount
Voluntary Turnover
NA
11-12%
NA
NA
NA
NA
LDOS
NA
NA
NA
NA
MANT
NCIT
NCI, Inc.
Dec
NA
NA
15-18%
15-18%
17-18%
20%
NA
NA
NA
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SAIC
SRA International, Inc .
Jun
12%
10%
10%
11%
13%
15%
15%
17%
14%
12%
NA
NA
NA
NA
SRX
mid to high teens
Stanley, Inc .
Mar
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SXE
VSE Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
VSEC
Notes:
BAH, CACI, ICFI, LDOS, MANT, NCIT, and SAIC are followed by this analyst, and data may be adjusted from what is in the SEC filings.
For all other c ompanies, information is derived from SEC filings and press releases.
Revenue/Employee is in thousands, annualized, period-end
BAH does not spec ify turnover as voluntary or total
Source: Wells Fargo Sec urities, LLC, Fac tSet, and company reports
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
NA
12%
SAIC, Inc .
midteens
high teens
NA
2014
2003
2004
2005
2006
2007
2008
2009
Company
FYE
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Booz Allen Hamilton
Mar
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Jun
Sep
Dec
21,614
22,492
22,806
CACI International Inc.
Jun
6,000
6,400
6,900
7,200
7,700
9,400
9,400
9,500
9,500
9,500
9,500
9,500
10,100
10,200
10,100
10,000
10,000
10,500
10,700
11,600
11,800
12,100
12,300
12,400
12,300
12,500
12,700
12,800
Dynamics Research Corporation
Dec
1,820
1,797
1,758
1,714
1,641
1,653
1,975
1,960
1,933
1,905
1,829
1,822
1,744
1,610
1,541
1,513
1,501
1,501
1,496
1,414
1,305
1,272
1,514
1,503
1,481
1,477
1,506
1,469
Engility
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Global Defense Technology & Systems Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
675
680
ICF International, Inc.
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
3,000+
3,000+
3,000+
3,000+
3,000+
3,500+
3,500+
KEYW Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Leidos Holdings
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
ManTech International Corporation
Dec
NCI, Inc.
Dec
SAIC, Inc.
Jan
4,760
5,000
NA
5,000
NA
NA
NA
NA
2,502
5,000
NA
NA
2,651
2,732
NA
2,891
5,300
NA
NA
3,212
5,300
5,400
NA
NA
NA
NA
3,400
3,500
NA
43,800
5,500
5,400
6,000
~1,480
~1,460
~1,450
NA
3,794
NA
3,905
6,000+
~1,450
NA
SRA International, Inc.
Jun
Stanley, Inc.
Mar
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
VSE Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Company
FYE
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Booz Allen Hamilton
Mar
NA
NA
NA
NA
NA
NA
NA
NA
NA
CACI International Inc.
Jun
$148
$143
$137
$146
$150
$152
$165
$164
Dynamics Research Corporation
Dec
129
138
142
144
151
157
143
160
Engility
Dec
NA
NA
NA
NA
NA
NA
NA
Global Defense Technology & Systems Dec
NA
NA
NA
NA
NA
NA
ICF International, Inc.
Dec
NA
NA
NA
NA
NA
NA
KEYW Corporation
Dec
NA
NA
NA
NA
NA
Leidos Holdings
Jan
NA
NA
NA
NA
NA
ManTech International Corporation
Dec
124
142
145
156
NCI, Inc.
Dec
NA
NA
NA
NA
NA
4,203
NA
43,600
6,000+
~1,400
NA
NA
43,300
6,000+
~1,400
NA
NA
NA
43,100
6,000+
~1,400
NA
NA
43,000
44,000
44,000
5,800
5,600
5,690
~1,400
~1,500
~1,500
NA
NA
NA
NA
NA
NA
NA
NA
44,000
44,000
6,700+
~1,900
7,000~1,900
NA
NA
4,649
4,868
4,950
4,975
4,989
5,023
5,213
5,215
6,307
1,724
1,766
1,852
2,308
~2,300
~2,350
2,400
2,800+
3,000NA
NA
NA
44,000
7,300
~2,000
NA
6,400
~3,500
1,223
NA
NA
44,000
7,400+
~2,200
NA
NA
NA
NA
NA
44,800
45,200
7,400+
~2,300
7,600+
~2,400
NA
NA
NA
NA
NA
NA
45,587
45,500
~7,900
~8,000
~2,500
~2,600
NA
NA
NA
NA
NA
8,000+
~2,600
CACI
DRCO
NA
EGL
695
NA
GTEC
3,500+
3,500+
ICFI
NA
45,500
BAH
NA
KEYW
46,100
46,200
~8,000
~8,000
MANT
~2,700
~2,800
NCIT
NA
NA
NA
LDOS
SAIC
6,442
6,497
6,689
6,951
6,896
6,977
6,997
7,075
SRX
3,600+
4,400+
4,700+
4,700+
4,700+ ~4,800
~4,800
~5,000
SXE
NA
NA
NA
1,920
2,244
2,501
2,534
2,410
IT & BPO Services
60
Exhibit 35. Employee Metrics continued
Total Headcount
NA
NA
NA
NA
NA
NA
NA
NA
VSEC
Jun
Sep
Dec
Mar
NA
NA
NA
NA
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
$214
$219
$224
$175
$181
$178
$177
152
160
173
157
$172
$187
$185
$191
$189
$198
$207
$199
215
217
213
217
219
233
233
243
156
167
164
160
151
155
156
160
168
169
165
176
182
185
179
179
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
EGL
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
317
318
321
NA
GTEC
NA
NA
NA
NA
NA
NA
NA
NA
NA
249
234
245
235
216
180
200
191
199
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
KEYW
NA
NA
NA
NA
NA
185
180
181
191
199
195
183
202
215
212
215
228
233
221
233
242
240
232
LDOS
153
150
156
167
161
160
175
174
184
192
196
208
207
208
219
231
230
251
256
250
225
257
257
271
MANT
NA
NA
NA
124
127
131
138
135
132
137
171
172
171
140
179
176
166
168
169
163
162
167
193
179
NCIT
NA
SAIC
Revenue/Employee
2003
SAIC, Inc.
2004
2005
2006
NA
NA
NA
NA
2007
2008
NA
NA
NA
NA
2009
NA
NA
NA
NA
NA
BAH
CACI
DRCO
ICFI
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SRA International, Inc.
Jun
186
192
193
198
199
213
233
223
232
229
242
251
239
239
244
256
244
250
231
239
233
237
235
213
219
230
239
234
Stanley, Inc.
Mar
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
155
156
182
160
171
174
194
191
200
168
193
157
163
173
181
174
181
182
SXE
VSE Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
648
NA
NA
NA
618
429
423
421
404
VSEC
Company
FYE
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Booz Allen Hamilton
Mar
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
BAH
CACI International Inc.
Jun
14-15%
14-15%
14-15%
14-15%
14-15%
14-16%
15%
15%
15%
NA
15-20%
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
CACI
Dynamics Research Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
DRCO
Engility
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
EGL
Global Defense Technology & Systems Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
GTEC
SRX
Voluntary Turnover
2003
Dec
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Leidos Holdings
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
~13%
~13%
~13%
~13%
ManTech International Corporation
Dec
13%
15%
15%
15%
15%
15%
17%
15-19%
NA
15-19%
20%
18%
17%
20%
NCI, Inc.
Dec
NA
NA
NA
NA
NA
NA
NA
15-18%
15-18%
15-18%
17%
high teens
19%
18%
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
13%
13%
14%
15%
12%
13%
13%
12%
21%
21%
19%
~20%
~20%
~20%
~20%
~20%
upper teens
~18%
high teens high teens
20%
midteens
NA
NA
NA
NA
~20%
high teens
9%
~19%
~17%
high teens mid teens
NA
ICFI
NA
KEYW
<10%
LDOS
~18%
15%
MANT
~14%
14%
NCIT
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
10%
13%
11%
17%
10%
14%
14%
14%
13%
14%
16%
16%
14%
13%
15%
17%
15%
16%
17%
18%
15%
11%
14%
13%
12%
SRX
NA
NA
NA
NA
NA
NA
NA
22%
12%
18%
20%
~15%
16%
16%
14%
14%
14%
14%
15%
~14%
15%
NA
14%
13%
NA
11%
NA
SXE
SAIC
VSE Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
VSEC
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
NA
NA
NA
NA
NA
<10%
NA
Source: Wells Fargo Securities, LLC, FactSet, and company reports
NA
mid to high teens
NA
NA
9%
13%
Revenue/Employee is in thousands, annualized, period-end
NA
midteens high teens
NA
NA
NA
NA
NA
midteens
NA
NA
<10%
NA
For all other companies, information is derived from SEC filings and press releases.
NA
NA
NA
14%
Jun
BAH, CACI, ICFI, LDOS, MANT, NCIT, and SAIC are followed by this analyst, and data may be adjusted from what is in the SEC filings.
NA
NA
NA
2009
Mar
Notes:
NA
NA
midteens
2008
Stanley, Inc.
9%
NA
NA
2007
SRA International, Inc.
8%
NA
NA
2006
KEYW Corporation
Jan
NA
2005
ICF International, Inc.
SAIC, Inc.
NA
2004
2010
FYE
Mar
Booz Allen Hamilton
Mar
23,230
23,315
23,848
25,075
25,024
CACI International Inc .
Jun
13,000
13,200
12,900
13,600
Dynamics Research Corporation
Dec
1,418
1,369
1,393
1,298
Engility
Dec
Global Defense Tec hnology & Systems Dec
ICF International, Inc .
Dec
KEYW Corporation
Dec
Leidos Holdings
Jan
Jun
2011
Company
NA
Sep
NA
NA
NA
800
3,500+
3,500+
NA
45,000
Dec
NA
1,125
3,500+
NA
45,000
Mar
Dec
24,989
25,804
25,825
24,950
24,138
23,963
13,700
13,900
14,300
14,400
14,600
14,900
1,263
1,673
1,604
1,534
1,461
1,380
NA
NA
Mar
Jun
Booz Allen Hamilton
Mar
$217
CACI International Inc .
Jun
241
Dynamics Research Corporation
Dec
Engility
15,300
16,200
NA
NA
NA
NA
NA
NA
NA
~7,500
NA
~7,500
NA
NA
NA
NA
NA
NA
NA
4,500+
4,500+
4,500+
4,500+
4,500+
5,000+
837
864
1,000
1,200
1,137
NA
NA
775
824
805
827
43,000
41,000
41,000
41,000
~2,900
FYE
15,500
4,500+
~10,000
Company
15,800
1,130
NA
722
NA
NA
7,300
NA
2,809
14,500
1,159
4,500+
~3,100
2,612
14,900
1,200
NA
~10,300
NA
15,300
1,255
4,500+
~2,600
Dec
15,500
1,265
NA
~10,100
VSE Corporation
14,900
NA
Sep
4,500+
43,000
NA
22,105
NA
~9,800
~4,800
22,127
4,500+
~2,700
Mar
22,664
NA
~9,100
Stanley, Inc .
22,713
4,000+
453
7,237
23,168
NA
45,000
NA
23,395
4,000+
~2,700
7,132
24,455
NA
Mar
NA
~9,000
NA
24,791
NA
Dec
2014
Jun
Jun
3,700+
~2,800
7,099
2013
Sep
Mar
NA
Dec
NA
Dec
Jan
Sep
3,700+
Dec
Jun
NA
Jun
NA
NCI, Inc.
SRA International, Inc .
NA
Mar
3,700+
ManTec h International Corporation
SAIC, Inc .
2012
Sep
NA
Jun
NA
NA
7,100
NA
NA
~2,800
NA
~2,600
NA
NA
NA
NA
NA
NA
NA
NA
NA
2,897
2,698
2,780
Sep
Dec
Mar
Jun
$232
$225
$218
$239
257
259
255
267
193
191
196
215
Dec
NA
NA
NA
Global Defense Tec hnology & Systems Dec
NA
277
199
228
2,746
NA
~2,300
NA
6,200
NA
NA
NA
NA
~2,300
~2,300
NA
6,100
NA
5,900
NA
2,516
2,800
2,500
Sep
Dec
Mar
Jun
$232
$222
$223
$247
277
259
270
254
220
164
240
230
NA
NA
NA
NA
292
NA
NA
NA
226
209
211
231
NA
2,692
NA
~9,700
~2,200
NA
6,000
NA
NA
NA
~2,000
NA
5,800
NA
NA
NA
NA
~2,000
NA
5,600
NA
2,472
2,240
2,000
Sep
Dec
Mar
Jun
$237
$232
$225
$253
255
250
240
237
235
234
243
234
NA
NA
NA
NA
NA
NA
NA
NA
219
214
202
213
NA
~23,000
NA
1,068
~22,000
1,100
~22,000
1,100
1,081
~21,000
~20,000
~7,800
~8,000
~8,000
~8,000
~2,000
~1,900
~1,900
~1,900
~1,800
~14,000
~13,000
~13,000
~13,000
~13,000
5,400
5,400
5,300
5,200
5,300
NA
2,000
NA
NA
NA
NA
1,872
1,800
1,800
1,800
2013
Sep
Dec
Mar
2014
Jun
Sep
$244
$238
$224
$247
$239
$236
245
238
226
232
237
201
245
249
239
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
211
206
208
215
217
204
218
235
212
Revenue/Employee
2010
2011
2012
ICF International, Inc .
Dec
KEYW Corporation
Dec
NA
NA
64
41
54
54
67
61
67
65
57
62
68
NA
NA
64
58
67
73
Leidos Holdings
Jan
234
244
251
253
250
253
279
278
NA
NA
NA
NA
NA
NA
246
235
239
249
255
ManTec h International Corporation
Dec
261
291
268
276
272
301
NA
NA
NA
NA
NA
64
NA
NA
NA
63
57
58
56
NCI, Inc.
Dec
164
187
250
263
194
222
189
177
172
159
154
163
183
166
156
168
188
164
168
SAIC, Inc .
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
287
278
286
296
289
306
SRA International, Inc .
Jun
232
238
234
238
246
NA
NA
NA
256
277
264
251
260
261
259
247
269
267
256
Stanley, Inc .
Mar
193
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
VSE Corporation
Dec
NA
325
303
293
224
228
233
237
200
217
199
186
213
238
222
261
265
240
226
Company
FYE
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
2013
Sep
Dec
Mar
2014
Jun
Sep
Booz Allen Hamilton
Mar
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
CACI International Inc .
Jun
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Dynamics Research Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Engility
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Global Defense Tec hnology & Systems Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
ICF International, Inc .
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
KEYW Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Leidos Holdings
Jan
<10%
<12%
12%
12%
12%
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
ManTec h International Corporation
Dec
17%
<18%
<15%
17%
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NCI, Inc.
Dec
14%
16%
20%
20%
20%
NA
NA
NA
NA
NA
NA
NA
NA
SAIC, Inc .
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SRA International, Inc .
Jun
12%
13%
18%
15%
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Stanley, Inc .
Mar
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
VSE Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Government Services: Market Space Firming
61
Exhibit 35. Employee Metrics continued
Total Headcount
Voluntary Turnover
2010
2011
19%
17%
mid teens mid teens
mid to high teens
11-12%
Notes:
BAH, CACI, ICFI, LDOS, MANT, NCIT, and SAIC are followed by this analyst, and data may be adjusted from what is in the SEC filings.
For all other c ompanies, information is derived from SEC filings and press releases.
Revenue/Employee is in thousands, annualized, period-end
Source: Wells Fargo Sec urities, LLC, Fac tSet, and c ompany reports
<---------- high teens --------->
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
low teens 11-12%
2012
Gross Margin
Company
FYE
Booz Allen Hamilton
Mar
CACI International Inc.
Jun
38.7%
38.2%
38.6%
38.2%
37.2%
Dynamic s Research Corporation
Dec
15.3%
16.1%
16.4%
15.6%
16.5%
Engility
Dec
NA
NA
NA
Global Defense Technology & Systems Dec
2001
NA
NA
44.3%
2002
NA
NA
NA
NA
ICF International, Inc .
Dec
KEYW Corporation
Dec
NA
NA
NA
Leidos Holdings
Jan
NA
NA
NA
ManTech International Corporation
Dec
NCI, Inc .
Dec
NA
NA
SAIC, Inc.
Jan
NA
NA
SRA International, Inc.
Jun
18.1%
29.0%
39.1%
2003
18.6%
28.3%
37.6%
2004
NA
NA
NA
40.0%
NA
NA
NA
40.1%
Fiscal Year
2007
2008
2009
2010
2011
2012
2013
17.5%
18.1%
18.2%
20.6%
21.6%
22.9%
23.6%
23.5%
23.3%
BAH
35.3%
34.6%
32.8%
31.4%
29.9%
29.3%
31.1%
31.1%
31.9%
CACI
13.6%
16.2%
16.5%
16.7%
16.1%
17.6%
15.7%
9.0%
9.5%
15.6%
15.8%
13.8%
14.5%
NA
17.5%
17.9%
17.1%
34.0%
39.0%
37.7%
38.1%
37.8%
37.7%
NA
NA
34.3%
GTEC
NA
ICFI
NA
KEYW
29.2%
29.7%
34.4%
33.3%
13.7%
13.9%
13.2%
9.6%
14.0%
18.8%
15.3%
17.8%
17.0%
16.2%
16.3%
17.4%
15.2%
14.5%
14.3%
13.6%
16.8%
15.8%
14.8%
13.5%
13.4%
13.9%
13.1%
11.8%
10.5%
12.5%
12.9%
10.0%
9.2%
8.7%
8.3%
24.7%
24.2%
24.4%
23.5%
29.7%
NA
NA
EGL
NA
13.8%
NA
NA
NA
DRCO
NA
13.5%
NA
NA
NA
NA
12.6%
NA
NA
26.8%
NA
NA
13.7%
2014
12.5%
NA
NA
2006
13.4%
NA
NA
2005
NA
NA
28.1%
25.9%
25.3%
24.8%
23.6%
25.2%
24.4%
12.4%
11.5%
12.8%
14.6%
15.2%
16.2%
16.6%
3.7%
3.5%
3.6%
3.1%
3.9%
4.7%
NA
NA
LDOS
NA
MANT
NA
NCIT
SAIC
SRX
Stanley, Inc .
Mar
NA
NA
NA
VSE Corporation
Dec
NA
NA
NA
NA
Company
FYE
2001
2002
2003
2004
Booz Allen Hamilton
Mar
NA
NA
NA
NA
NA
2.6%
4.1%
4.2%
1.5%
3.9%
5.7%
6.6%
7.7%
8.4%
CACI International Inc.
Jun
6.7%
7.8%
8.4%
9.1%
9.3%
8.6%
7.5%
6.7%
6.7%
6.2%
7.0%
7.9%
7.4%
7.2%
CACI
Dynamic s Research Corporation
Dec
6.8%
6.6%
6.3%
6.3%
7.1%
3.2%
5.5%
6.2%
6.7%
7.7%
8.2%
(8.7%)
NA
NA
DRCO
Engility
Dec
NA
NA
NA
NA
NA
NA
9.0%
9.5%
9.6%
10.1%
8.2%
5.9%
7.7%
NA
EGL
Global Defense Technology & Systems Dec
NA
NA
NA
NA
NA
NA
NA
2.6%
2.1%
6.2%
NA
NA
NA
NA
GTEC
2.9%
3.7%
4.4%
4.7%
3.1%
6.9%
9.7%
7.6%
5.8%
6.1%
7.0%
7.0%
6.8%
NA
ICFI
NA
KEYW
7.1%
NA
13.3%
10.3%
10.0%
2012
2013
IT & BPO Services
62
Exhibit 36. Margin Analysis
NA
SXE
NA
VSEC
EBIT Margin
2005
2006
Fiscal Year
2007
2008
2009
2010
2011
2014
BAH
ICF International, Inc .
Dec
KEYW Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
(2.0%)
1.0%
1.3%
(3.3%)
Leidos Holdings
Jan
NA
NA
NA
6.8%
6.7%
6.3%
7.1%
7.5%
7.7%
8.0%
8.7%
2.5%
6.5%
2.8%
LDOS
ManTech International Corporation
Dec
7.0%
7.7%
8.7%
4.9%
8.6%
8.0%
7.9%
8.2%
8.9%
8.3%
7.9%
6.6%
1.0%
NA
MANT
NCI, Inc .
Dec
NA
NA
5.0%
4.5%
5.9%
6.4%
7.3%
7.8%
8.0%
6.8%
4.3%
3.5%
4.2%
NA
NCIT
SAIC, Inc.
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
6.9%
6.4%
6.0%
4.6%
SAIC
SRA International, Inc.
Jun
1.3%
5.1%
9.3%
8.2%
7.3%
7.9%
6.4%
7.4%
8.6%
0.0%
(18.4%)
4.6%
SRX
10.0%
10.1%
Stanley, Inc .
Mar
NA
NA
NA
7.1%
6.8%
5.7%
6.0%
7.9%
8.5%
9.0%
NA
VSE Corporation
Dec
NA
NA
NA
NA
3.5%
3.3%
3.5%
3.0%
3.8%
4.4%
6.2%
NA
NA
NA
SXE
9.3%
9.4%
NA
VSEC
Company
FYE
2001
2002
2003
2004
2005
Booz Allen Hamilton
Mar
NA
NA
NA
NA
NA
2.7%
4.1%
4.2%
(1.7%)
1.0%
2.3%
5.9%
6.4%
7.0%
CACI International Inc.
Jun
6.1%
7.5%
8.5%
9.0%
8.4%
7.6%
6.5%
5.7%
5.9%
5.3%
6.4%
7.3%
6.7%
6.2%
CACI
Dynamic s Research Corporation
Dec
6.3%
6.4%
6.1%
5.7%
6.4%
2.6%
5.2%
5.6%
6.2%
7.4%
6.1%
(11.9%)
NA
NA
DRCO
Engility
Dec
NA
NA
NA
NA
NA
NA
9.1%
9.6%
9.6%
2.8%
4.5%
(20.5%)
6.2%
NA
EGL
Global Defense Technology & Systems Dec
NA
NA
NA
NA
NA
NA
NA
1.2%
1.2%
6.0%
NA
NA
NA
NA
GTEC
1.7%
2.3%
3.8%
2.2%
6.1%
9.5%
7.1%
5.2%
5.7%
6.8%
6.6%
6.6%
NA
ICFI
NA
KEYW
Pre-tax Margin
Fiscal Year
2007
2008
2009
2010
2011
2012
2013
2014
BAH
ICF International, Inc .
Dec
KEYW Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
17.3%
0.4%
0.4%
(6.6%)
Leidos Holdings
Jan
NA
NA
NA
6.2%
5.6%
6.2%
7.4%
7.0%
6.9%
7.4%
8.0%
7.7%
5.4%
1.5%
LDOS
ManTech International Corporation
Dec
6.6%
7.7%
8.4%
4.7%
8.9%
8.0%
7.6%
8.0%
8.8%
7.8%
7.5%
6.0%
0.3%
NA
MANT
NCI, Inc .
Dec
NA
NA
4.7%
3.7%
5.2%
6.8%
6.9%
7.3%
7.9%
6.7%
4.0%
3.2%
4.0%
NA
NCIT
SAIC, Inc.
Jan
NA
NA
SRA International, Inc.
Jun
4.1%
5.7%
NA
10.9%
NA
10.3%
NA
10.5%
NA
NA
NA
NA
NA
6.9%
6.4%
6.0%
4.4%
8.6%
8.1%
8.0%
6.3%
3.7%
8.5%
(6.0%)
(25.0%)
(2.9%)
SAIC
SRX
Stanley, Inc .
Mar
NA
NA
NA
7.0%
6.5%
4.9%
4.4%
7.3%
7.9%
8.6%
NA
NA
NA
NA
SXE
VSE Corporation
Dec
NA
NA
NA
NA
3.6%
3.4%
3.6%
3.0%
3.8%
4.4%
5.6%
8.0%
8.1%
NA
VSEC
Notes:
BAH, CACI, ICFI, LDOS, MANT, NCIT, and SAIC are followed by this analyst, and data may be adjusted from what is in the SEC filings.
For all other companies, information is derived from SEC filings and press releases.
Source: Wells Fargo Securities, LLC, FactSet, and company reports
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
(0.3%)
2006
2003
2004
2005
2006
2007
2008
2009
Company
FYE
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Booz Allen Hamilton
Mar
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
21.2%
21.1%
CACI International Inc.
Jun
37.2%
39.7%
38.1%
37.9%
37.8%
38.7%
38.1%
38.2%
37.4%
35.3%
36.0%
35.5%
35.9%
34.2%
35.7%
34.7%
35.0%
33.2%
32.7%
33.1%
33.0%
32.5%
32.3%
31.4%
31.5%
30.7%
31.0%
30.1%
Dynamics Researc h Corporation
Dec
15.7%
16.1%
15.5%
18.1%
14.6%
14.5%
15.8%
17.0%
15.4%
15.7%
17.3%
17.7%
14.7%
11.4%
13.0%
15.4%
15.3%
16.1%
16.0%
17.3%
15.6%
15.1%
16.1%
18.6%
16.8%
16.3%
15.7%
18.2%
Engility
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Global Defense Technology & Systems Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
14.0%
15.9%
19.4%
20.4%
17.7%
16.1%
19.5%
17.4%
16.2%
ICF International, Inc.
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
28.2%
31.3%
35.2%
34.5%
35.2%
37.1%
40.8%
39.2%
38.8%
ICFI
KEYW Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
23.8%
32.1%
KEYW
NA
11.5%
13.3%
13.9%
Leidos Holdings
NA
Jan
NA
NA
NA
NA
NA
NA
NA
14.1%
13.1%
12.7%
13.2%
14.0%
Dec
19.1%
18.5%
18.8%
18.8%
19.3%
6.9%
16.5%
17.9%
17.6%
17.9%
17.6%
18.1%
17.3%
16.9%
17.0%
16.8%
16.1%
16.2%
16.2%
16.1%
16.3%
15.8%
16.1%
17.1%
17.6%
17.9%
17.3%
16.9%
MANT
NA
NA
NA
NA
NA
NA
NA
16.1%
14.7%
15.6%
14.1%
15.0%
14.3%
14.1%
12.8%
13.1%
13.7%
12.7%
13.3%
13.7%
13.3%
14.3%
13.4%
14.5%
13.0%
13.4%
12.9%
13.2%
NCIT
NA
NA
NA
13.3%
NA
13.8%
13.5%
NA
NA
14.1%
NA
13.4%
NA
13.8%
14.0%
NA
NA
14.2%
GTEC
Dec
NA
13.8%
DRCO
NCI, Inc.
NA
14.3%
CACI
EGL
ManTech International Corporation
SAIC, Inc .
NA
BAH
NA
LDOS
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SRA International, Inc.
Jun
30.1%
30.1%
28.7%
27.9%
28.5%
27.4%
25.5%
26.2%
25.5%
26.4%
25.1%
24.3%
25.6%
26.2%
25.0%
23.8%
25.2%
25.1%
24.5%
25.1%
26.4%
26.1%
26.6%
27.4%
27.1%
25.3%
23.9%
24.4%
SRX
Stanley, Inc .
Mar
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
13.8%
13.6%
14.6%
13.1%
13.6%
12.9%
18.1%
15.8%
15.1%
15.9%
14.3%
15.5%
16.3%
16.5%
16.3%
17.1%
16.8%
16.2%
SXE
SAIC
VSE Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
3.6%
3.7%
3.6%
3.4%
3.7%
3.1%
3.2%
2.9%
3.2%
3.2%
4.2%
4.9%
3.3%
Company
FYE
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Booz Allen Hamilton
Mar
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
4.3%
4.5%
BAH
CACI International Inc.
Jun
8.0%
9.2%
8.7%
8.8%
8.7%
10.0%
9.2%
9.5%
9.2%
9.4%
7.9%
9.4%
8.5%
8.5%
7.8%
7.8%
7.3%
7.3%
6.3%
6.6%
6.9%
7.1%
6.3%
6.7%
6.7%
7.2%
6.2%
6.1%
CACI
Dynamics Researc h Corporation
Dec
5.1%
5.6%
6.8%
7.6%
5.4%
6.3%
6.3%
7.1%
6.2%
5.9%
7.9%
8.4%
4.1%
1.4%
3.1%
4.4%
4.3%
5.1%
5.8%
4.8%
20.5%
Engility
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Global Defense Technology & Systems Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
(0.1%)
3.4%
1.4%
5.5%
4.5%
3.2%
4.4%
(3.4%)
3.1%
GTEC
5.5%
ICFI
VSEC
EBIT Margin
2003
NA
NA
NA
NA
NA
2005
NA
NA
NA
NA
2006
NA
NA
NA
NA
2007
NA
NA
NA
NA
2008
NA
6.9%
9.3%
(11.0%)
7.2%
6.0%
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
5.3%
6.8%
7.3%
7.6%
6.7%
6.7%
6.8%
7.8%
7.9%
7.3%
7.3%
7.3%
7.8%
8.3%
7.7%
8.0%
ManTech International Corporation
Dec
8.6%
8.6%
8.9%
8.6%
9.5%
(4.1%)
6.4%
7.1%
8.1%
8.4%
8.3%
9.5%
8.3%
7.8%
8.1%
7.7%
7.3%
7.3%
7.9%
8.6%
8.1%
8.0%
8.3%
8.4%
9.0%
8.7%
9.0%
8.7%
MANT
NCI, Inc.
Dec
NA
NA
NA
NA
NA
NA
NA
4.9%
5.4%
6.6%
6.6%
4.8%
5.8%
6.6%
6.2%
7.0%
7.2%
7.2%
7.4%
7.4%
7.2%
7.6%
7.7%
8.5%
7.6%
8.0%
7.2%
9.2%
NCIT
NA
5.6%
DRCO
EGL
Jan
NA
5.8%
9.0%
Dec
NA
6.4%
5.8%
Dec
NA
7.0%
5.9%
Leidos Holdings
NA
7.8%
8.1%
KEYW Corporation
NA
8.4%
2009
ICF International, Inc.
SAIC, Inc .
NA
2004
(24.2%)
8.4%
NA
NA
(0.4%)
KEYW
7.8%
LDOS
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SRA International, Inc.
Jun
9.9%
10.6%
9.4%
9.8%
10.1%
10.5%
9.7%
10.5%
10.1%
10.1%
8.1%
7.9%
7.8%
9.1%
7.5%
6.9%
7.2%
7.7%
8.2%
7.8%
7.9%
7.9%
6.5%
5.3%
6.4%
7.2%
7.2%
6.8%
SRX
Stanley, Inc .
Mar
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
8.0%
7.8%
1.8%
6.6%
7.0%
3.0%
7.3%
7.5%
7.7%
8.3%
8.1%
8.3%
8.6%
8.6%
8.7%
9.0%
9.4%
8.8%
NA
SXE
VSE Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
3.6%
3.6%
3.4%
3.1%
3.6%
3.0%
3.1%
2.8%
3.0%
3.1%
4.1%
4.8%
3.1%
VSEC
Company
FYE
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Booz Allen Hamilton
Mar
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
1.3%
1.7%
BAH
CACI International Inc.
Jun
8.3%
9.4%
8.9%
8.8%
8.8%
9.3%
8.3%
8.5%
8.4%
8.5%
7.1%
8.4%
7.5%
7.4%
6.5%
6.6%
6.2%
6.5%
5.3%
5.5%
5.8%
6.1%
5.4%
5.8%
5.9%
6.5%
5.2%
5.2%
CACI
Dynamics Researc h Corporation
Dec
4.7%
5.3%
6.6%
7.9%
5.7%
5.9%
5.6%
5.6%
4.7%
7.3%
6.7%
6.9%
3.7%
0.6%
2.3%
4.1%
3.4%
4.5%
5.7%
6.9%
5.0%
19.8%
6.7%
5.1%
5.5%
5.8%
8.4%
DRCO
Engility
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Global Defense Technology & Systems Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
(2.1%)
2.3%
0.2%
4.0%
3.5%
2.2%
3.5%
(4.1%)
3.1%
GTEC
5.0%
ICFI
Government Services: Market Space Firming
63
Exhibit 36. Margin Analysis - continued
Gross Margin
SAIC
Pre-tax Margin
2003
NA
NA
2004
NA
NA
NA
NA
2005
NA
NA
NA
NA
2006
NA
NA
NA
NA
2007
NA
NA
NA
NA
2008
NA
9.1%
(11.4%)
7.7%
7.2%
2009
6.8%
6.7%
6.0%
5.0%
4.7%
EGL
Dec
KEYW Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
(0.4%)
KEYW
Leidos Holdings
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
5.5%
6.4%
7.6%
8.0%
7.2%
6.4%
6.3%
7.2%
7.5%
7.0%
7.2%
6.8%
6.6%
7.2%
7.1%
7.3%
7.8%
7.1%
LDOS
ManTech International Corporation
Dec
7.9%
8.4%
8.6%
8.7%
9.4%
(4.4%)
6.3%
7.1%
9.8%
8.0%
7.9%
10.0%
7.9%
7.6%
8.0%
8.2%
7.4%
7.1%
7.5%
8.3%
7.8%
7.8%
8.1%
8.3%
8.9%
8.7%
9.0%
8.7%
MANT
NCI, Inc.
Dec
NA
NA
NA
NA
NA
NA
NA
4.3%
4.7%
5.7%
5.7%
4.6%
6.0%
7.0%
6.6%
7.3%
7.4%
7.4%
6.5%
6.5%
6.6%
7.0%
7.2%
8.1%
7.4%
7.8%
7.1%
9.1%
NCIT
SAIC, Inc .
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SRA International, Inc.
Jun
10.1%
10.8%
9.7%
10.2%
10.4%
10.6%
10.0%
10.9%
10.5%
10.6%
8.4%
8.3%
8.1%
9.6%
8.1%
8.5%
7.5%
8.3%
8.4%
7.8%
7.9%
8.1%
6.7%
4.9%
6.3%
7.1%
7.2%
6.9%
SRX
(23.5%)
Stanley, Inc .
Mar
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
7.4%
7.2%
0.3%
4.5%
4.1%
2.1%
6.7%
6.7%
7.0%
7.7%
7.7%
8.1%
7.6%
7.6%
8.1%
8.4%
9.0%
8.4%
SXE
VSE Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
3.7%
3.7%
3.6%
3.2%
3.7%
3.1%
3.1%
2.8%
3.0%
3.1%
4.1%
4.8%
3.1%
VSEC
Notes:
BAH, CACI, ICFI, LDOS, MANT, NCIT, and SAIC are followed by this analyst, and data may be adjusted from what is in the SEC filings.
For all other companies, information is derived from SEC filings and press releases.
Source: Wells Fargo Securities, LLC, FactSet, and c ompany reports
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
ICF International, Inc.
Gross Margin
2010
Sep
Company
FYE
Mar
Jun
Booz Allen Hamilton
Mar
21.5%
22.5%
CACI International Inc.
Jun
29.7%
29.0%
Dynamic s Research Corporation
Dec
15.7%
Engility
Dec
2011
Sep
2012
Sep
Dec
Mar
Jun
23.3%
23.7%
24.6%
22.8%
31.3%
30.2%
31.8%
31.3%
15.2%
18.1%
20.4%
15.8%
NA
NA
NA
13.7%
2013
Sep
Dec
Mar
2014
Jun
Sep
23.7%
22.8%
23.5%
24.7%
24.1%
BAH
30.4%
32.2%
32.7%
32.4%
34.1%
CACI
14.1%
15.3%
NA
NA
NA
NA
13.0%
14.7%
14.4%
13.7%
14.3%
15.1%
Dec
Mar
Jun
Dec
Mar
Jun
23.0%
22.6%
24.2%
22.7%
29.3%
29.8%
29.3%
28.9%
23.9%
22.8%
24.5%
23.0%
30.7%
31.3%
31.2%
31.3%
15.6%
15.8%
17.4%
15.5%
15.5%
14.6%
17.0%
14.8%
NA
NA
NA
NA
NA
15.9%
12.8%
15.7%
12.8%
Global Defense Technology & Systems Dec
20.5%
16.3%
16.2%
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
ICF International, Inc .
Dec
38.3%
37.3%
37.3%
38.1%
39.3%
37.4%
37.2%
38.6%
38.4%
38.3%
37.7%
36.7%
38.9%
37.3%
36.9%
37.7%
37.3%
36.8%
37.3%
ICFI
KEYW Corporation
Dec
29.9%
29.0%
29.1%
29.1%
29.4%
29.0%
28.1%
32.4%
33.9%
33.7%
34.0%
35.6%
30.9%
32.7%
33.1%
36.9%
33.7%
32.1%
33.5%
KEYW
Leidos Holdings
Jan
12.3%
14.5%
13.3%
12.8%
12.3%
13.0%
12.9%
12.4%
13.3%
14.2%
14.3%
14.5%
13.8%
11.3%
13.8%
14.3%
13.0%
14.3%
12.6%
LDOS
ManTech International Corporation
Dec
15.0%
15.0%
15.5%
15.3%
14.4%
14.4%
14.4%
14.9%
13.8%
14.8%
14.5%
13.9%
13.0%
13.6%
13.0%
15.2%
13.1%
13.7%
14.4%
MANT
NCI, Inc .
Dec
13.6%
12.4%
10.4%
11.5%
11.3%
9.6%
11.5%
9.8%
11.7%
11.9%
12.8%
13.6%
12.1%
13.2%
12.9%
13.5%
12.4%
15.3%
15.3%
NCIT
SAIC
DRCO
EGL
GTEC
SAIC, Inc.
Jan
NA
NA
NA
NA
NA
NA
NA
NA
9.5%
8.0%
9.4%
7.9%
8.8%
7.4%
8.4%
8.6%
8.4%
8.6%
8.8%
SRA International, Inc.
Jun
23.9%
25.3%
25.2%
24.6%
25.3%
NA
24.0%
22.8%
25.5%
24.5%
23.8%
24.2%
24.8%
24.8%
24.5%
22.1%
22.4%
25.1%
24.5%
SRX
Stanley, Inc .
Mar
16.4%
17.6%
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SXE
VSE Corporation
Dec
3.9%
4.9%
6.0%
3.9%
5.1%
5.8%
7.9%
8.3%
9.3%
10.3%
12.2%
10.8%
8.7%
11.3%
9.0%
11.0%
9.9%
10.6%
8.2%
Company
FYE
Mar
Jun
Dec
Mar
Jun
Dec
Mar
Jun
Dec
Mar
Jun
Dec
Mar
2014
Jun
Sep
Booz Allen Hamilton
Mar
3.2%
3.6%
6.6%
5.3%
5.6%
6.8%
6.6%
6.8%
6.3%
8.0%
7.4%
8.4%
7.3%
9.7%
9.8%
7.6%
6.4%
10.5%
9.3%
BAH
CACI International Inc.
Jun
6.0%
6.4%
6.2%
6.9%
6.8%
8.1%
8.2%
7.7%
7.8%
8.1%
7.0%
7.5%
7.6%
7.4%
7.1%
7.4%
6.7%
7.6%
7.4%
CACI
Dynamic s Research Corporation
Dec
6.4%
7.2%
7.6%
9.3%
6.8%
4.7%
9.2%
10.8%
6.6%
6.3%
5.9%
7.7%
5.7%
5.4%
6.4%
NA
NA
NA
NA
DRCO
Engility
Dec
NA
NA
NA
NA
NA
NA
NA
NA
6.0%
7.3%
3.4%
6.9%
8.3%
7.8%
8.9%
5.7%
5.8%
6.4%
7.8%
Global Defense Technology & Systems Dec
7.2%
5.0%
8.1%
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
ICF International, Inc .
Dec
5.8%
6.3%
6.3%
6.0%
6.9%
7.3%
7.4%
6.5%
7.1%
7.5%
7.1%
6.2%
7.5%
7.2%
7.0%
5.5%
6.8%
6.7%
7.0%
KEYW Corporation
Dec
2.6%
(1.2%)
(1.0%)
(7.1%)
0.4%
0.5%
0.6%
2.1%
1.2%
1.7%
1.2%
1.2%
(4.0%)
(3.8%)
(3.0%)
(2.2%)
(6.1%)
(2.0%)
(2.2%)
KEYW
Leidos Holdings
Jan
7.8%
9.9%
8.9%
8.0%
8.6%
8.1%
7.5%
6.9%
6.6%
6.3%
6.0%
5.8%
4.8%
0.7%
(0.4%)
6.3%
6.6%
(31.4%)
5.6%
LDOS
ManTech International Corporation
Dec
7.7%
8.5%
8.3%
8.4%
8.0%
7.9%
8.0%
7.9%
6.8%
7.0%
6.6%
6.1%
5.6%
6.4%
5.6%
6.8%
4.4%
5.2%
6.0%
MANT
NCI, Inc .
Dec
7.7%
7.2%
6.0%
6.9%
6.5%
4.3%
4.9%
0.7%
3.1%
3.1%
3.8%
4.1%
3.9%
4.0%
4.4%
4.7%
2.5%
5.3%
5.2%
NCIT
SAIC, Inc.
Jan
NA
NA
NA
NA
NA
NA
NA
NA
7.3%
5.1%
6.2%
5.4%
4.7%
3.8%
3.8%
6.0%
6.1%
6.3%
6.3%
SAIC
SRA International, Inc.
Jun
6.6%
8.0%
7.1%
7.3%
8.9%
8.7%
(10.9%)
4.0%
4.2%
3.1%
3.6%
4.3%
5.2%
NM
5.9%
3.9%
2.6%
6.0%
6.2%
SRX
Stanley, Inc .
Mar
8.9%
6.9%
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SXE
VSE Corporation
Dec
3.8%
4.7%
5.6%
3.7%
4.6%
4.6%
7.1%
7.5%
8.9%
9.3%
10.6%
10.2%
8.3%
10.7%
8.5%
9.8%
9.5%
9.9%
7.1%
Company
FYE
Mar
Jun
Dec
Mar
Jun
Dec
Mar
Jun
Dec
Mar
Jun
Dec
Mar
2014
Jun
Sep
Booz Allen Hamilton
Mar
0.2%
0.7%
3.6%
1.9%
2.1%
5.9%
6.0%
6.0%
5.6%
7.2%
5.5%
6.8%
6.0%
8.3%
8.3%
6.1%
5.1%
9.0%
8.0%
BAH
CACI International Inc.
Jun
5.2%
5.7%
5.5%
6.2%
6.1%
7.5%
7.6%
7.0%
7.2%
7.5%
6.2%
6.8%
6.9%
6.7%
6.2%
6.4%
5.4%
6.6%
6.3%
CACI
Dynamic s Research Corporation
Dec
6.1%
6.6%
7.3%
9.6%
6.6%
3.5%
5.9%
7.7%
3.5%
3.0%
5.7%
1.5%
2.9%
2.7%
3.4%
NA
NA
NA
NA
DRCO
Engility
Dec
NA
NA
NA
NA
NA
NA
NA
NA
6.0%
7.3%
NM
5.4%
6.7%
6.2%
6.7%
5.1%
4.9%
5.5%
6.8%
Global Defense Technology & Systems Dec
7.1%
4.9%
7.6%
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
ICF International, Inc .
Dec
5.2%
5.9%
6.0%
5.6%
6.6%
7.0%
7.1%
6.3%
6.6%
7.2%
6.7%
6.0%
7.2%
6.9%
6.9%
5.1%
6.5%
6.1%
6.6%
KEYW Corporation
Dec
2.7%
30.6%
25.8%
7.2%
0.4%
0.1%
0.0%
1.1%
0.4%
0.9%
0.6%
(0.2%)
(4.9%)
(3.5%)
(7.4%)
(3.6%)
(7.5%)
KEYW
Leidos Holdings
Jan
7.2%
9.2%
8.5%
7.0%
7.7%
7.0%
6.5%
6.0%
5.1%
5.2%
5.0%
4.7%
3.9%
(0.1%)
(1.3%)
3.6%
5.3%
(32.9%)
4.2%
LDOS
ManTech International Corporation
Dec
7.5%
8.0%
7.7%
7.8%
7.4%
7.8%
7.5%
7.3%
6.2%
6.4%
6.0%
5.4%
5.0%
5.7%
4.9%
6.1%
3.6%
2.8%
5.9%
MANT
NCI, Inc .
Dec
7.5%
7.0%
5.9%
6.8%
6.3%
4.0%
4.5%
0.2%
2.7%
2.7%
3.5%
3.8%
3.6%
3.7%
4.2%
4.5%
2.4%
5.2%
5.1%
NCIT
IT & BPO Services
64
Exhibit 36. Margin Analysis - continued
VSEC
EBIT Margin
2010
Sep
2011
Sep
2012
Sep
2013
Sep
EGL
GTEC
ICFI
VSEC
Pre-tax Margin
2011
Sep
2012
Sep
2013
Sep
(4.9%) (12.9%)
EGL
GTEC
ICFI
SAIC, Inc.
Jan
NA
NA
NA
NA
NA
NA
NA
NA
7.3%
5.1%
6.2%
5.4%
4.7%
3.8%
3.5%
5.6%
5.6%
5.9%
5.9%
SAIC
SRA International, Inc.
Jun
NA
8.0%
7.1%
7.1%
8.9%
NA
(15.9%)
(2.4%)
(2.5%)
NM
(2.9%)
(2.4%)
(1.4%)
NM
(1.6%)
(4.0%)
(4.6%)
(1.5%)
(1.8%)
SRX
Stanley, Inc .
Mar
8.5%
6.6%
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
VSE Corporation
Dec
3.8%
4.7%
5.5%
3.6%
4.5%
4.3%
6.3%
6.3%
7.8%
7.9%
9.1%
8.7%
7.0%
9.4%
7.3%
8.7%
8.5%
8.9%
6.2%
Notes:
BAH, CACI, ICFI, LDOS, MANT, NCIT, and SAIC are followed by this analyst, and data may be adjusted from what is in the SEC filings.
For all other companies, information is derived from SEC filings and press releases.
Source: Wells Fargo Securities, LLC, FactSet, and company reports
SXE
VSEC
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
2010
Sep
Time & Materials (% of Total Revenue)
2001
2002
2003
2004
2005
2006
Fiscal Year
2007
2008
Company
FYE
2009
2010
2011
2012
2013
2014
Booz Allen Hamilton
Mar
NA
NA
NA
NA
NA
NA
NA
44%
39%
38%
35%
31%
28%
28%
CACI International Inc.
Jun
60%
61%
65%
62%
57%
51%
53%
51%
48%
47%
40%
29%
23%
20%
CACI
Dynamic s Research Corporation
Dec
52%
58%
64%
59%
56%
62%
57%
49%
42%
32%
32%
35%
NA
NA
DRCO
Engility
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
EGL
Global Defense Technology & Systems Dec
NA
NA
NA
NA
NA
NA
NA
29%
29%
34%
NA
NA
NA
NA
GTEC
BAH
ICF International, Inc .
Dec
NA
NA
40%
37%
42%
46%
55%
67%
51%
49%
49%
49%
52%
NA
ICFI
KEYW Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
65%
56%
50%
37%
NA
KEYW
Leidos Holdings
Jan
NA
NA
NA
38%
38%
37%
36%
35%
33%
30%
30%
27%
29%
26%
LDOS
ManTech International Corporation
Dec
36%
45%
50%
61%
63%
64%
63%
66%
68%
64%
51%
33%
11%
NA
MANT
NCI, Inc .
Dec
NA
NA
59%
59%
54%
40%
38%
45%
51%
55%
40%
25%
19%
NA
NCIT
SAIC, Inc.
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
27%
29%
31%
SAIC
SRA International, Inc.
Jun
23%
31%
38%
39%
34%
40%
42%
42%
43%
39%
38%
36%
35%
36%
SRX
Stanley, Inc .
Mar
NA
NA
NA
NA
11%
20%
32%
36%
51%
49%
NA
NA
NA
NA
SXE
VSE Corporation
Dec
NA
NA
NA
NA
22%
47%
59%
73%
75%
63%
46%
36%
20%
NA
VSEC
Company
FYE
2001
2002
2003
2004
2005
2006
Fiscal Year
2007
2008
2009
2010
2011
2012
2013
Booz Allen Hamilton
Mar
NA
NA
NA
NA
NA
NA
NA
47%
50%
50%
51%
54%
57%
55%
CACI International Inc.
Jun
21%
19%
17%
21%
25%
29%
27%
28%
32%
33%
36%
44%
48%
49%
CACI
Dynamic s Research Corporation
Dec
31%
31%
23%
21%
20%
19%
22%
18%
18%
21%
20%
20%
NA
NA
DRCO
Engility
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
EGL
Global Defense Technology & Systems Dec
NA
NA
NA
NA
NA
NA
NA
12%
12%
10%
NA
NA
NA
NA
GTEC
23%
23%
30%
19%
NA
ICFI
4%
8%
12%
35%
NA
KEYW
46%
46%
42%
47%
LDOS
Cost Plus (% of Total Revenue)
9%
2014
BAH
ICF International, Inc .
Dec
NA
NA
44%
41%
34%
20%
11%
20%
KEYW Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
Leidos Holdings
Jan
NA
NA
NA
44%
44%
45%
48%
47%
48%
48%
ManTech International Corporation
Dec
35%
39%
34%
28%
27%
25%
23%
20%
20%
21%
34%
51%
72%
NA
MANT
NCI, Inc .
Dec
NA
NA
29%
28%
28%
29%
29%
22%
15%
14%
32%
49%
52%
NA
NCIT
SAIC, Inc.
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
44%
38%
37%
SAIC
SRA International, Inc.
Jun
62%
52%
43%
42%
46%
45%
43%
41%
35%
35%
34%
32%
30%
30%
SRX
Stanley, Inc .
Mar
NA
NA
NA
NA
60%
62%
52%
46%
30%
30%
NA
NA
NA
NA
SXE
VSE Corporation
Dec
NA
NA
NA
NA
63%
41%
34%
24%
21%
30%
26%
23%
25%
NA
VSEC
Company
FYE
2001
2002
2003
2004
2005
2006
Fiscal Year
2007
2008
Booz Allen Hamilton
Mar
NA
NA
NA
NA
NA
NA
NA
CACI International Inc.
Jun
19%
20%
19%
17%
18%
20%
Dynamic s Research Corporation
Dec
17%
11%
13%
20%
24%
Engility
Dec
NA
NA
NA
NA
NA
Global Defense Technology & Systems Dec
NA
NA
NA
NA
Government Services: Market Space Firming
65
Exhibit 37. Pricing Mix
Fixed Price (% of Total Revenue)
2010
2011
2012
2013
11%
12%
14%
15%
15%
2014
17%
BAH
20%
21%
20%
21%
25%
27%
28%
31%
CACI
19%
21%
33%
40%
47%
48%
45%
NA
NA
DRCO
NA
NA
NA
NA
NA
NA
NA
NA
NA
EGL
NA
NA
NA
59%
59%
56%
NA
NA
NA
NA
GTEC
ICF International, Inc .
Dec
NA
NA
16%
22%
24%
34%
36%
22%
29%
28%
28%
21%
29%
NA
ICFI
KEYW Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
31%
37%
38%
28%
NA
KEYW
Leidos Holdings
Jan
NA
NA
NA
18%
18%
18%
16%
18%
19%
22%
24%
27%
29%
27%
LDOS
ManTech International Corporation
Dec
29%
16%
16%
11%
10%
11%
14%
14%
12%
15%
16%
16%
17%
NA
MANT
NCI, Inc .
Dec
NA
NA
12%
13%
18%
31%
33%
33%
35%
31%
27%
26%
29%
NA
NCIT
SAIC, Inc.
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
29%
33%
32%
SAIC
SRA International, Inc.
Jun
15%
17%
20%
19%
20%
14%
15%
17%
22%
26%
28%
32%
35%
34%
SRX
Stanley, Inc .
Mar
NA
NA
NA
NA
29%
18%
16%
18%
19%
21%
VSE Corporation
Dec
NA
NA
NA
NA
15%
12%
7%
3%
4%
7%
Notes:
BAH, CACI, ICFI, LDOS, MANT, NCIT, and SAIC are followed by this analyst, and data may be adjusted from what is in the SEC filings.
For all other companies, information is derived from SEC filings and press releases.
Source: Wells Fargo Securities, LLC, FactSet, and company reports
NA
NA
NA
NA
SXE
28%
41%
55%
NA
VSEC
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
2009
9%
2003
Sep
Company
FYE
Mar
Jun
Booz Allen Hamilton
Mar
NA
NA
CACI International Inc.
Jun
68%
65%
Dynamics Research Corporation
Dec
Engility
Dec
Global Defense Technology & Systems Dec
64%
NA
NA
Mar
Jun
NA
NA
NA
NA
62%
62%
62%
61%
63%
NA
NA
NA
NA
NA
62%
NA
NA
NA
62%
NA
NA
NA
Mar
Jun
NA
NA
NA
NA
59%
58%
56%
55%
62%
57%
57%
NA
NA
NA
NA
NA
NA
55%
NA
NA
NA
57%
NA
Mar
Jun
NA
NA
NA
NA
55%
51%
51%
49%
55%
NA
NA
NA
57%
NA
NA
Dec
NA
NA
NA
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Leidos Holdings
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
ManTech International Corporation
Dec
46%
46%
51%
52%
65%
61%
61%
59%
NCI, Inc.
Dec
NA
NA
NA
NA
NA
NA
NA
59%
61%
Jan
NA
NA
NA
NA
NA
NA
NA
NA
41%
NA
NA
NA
33%
2006
Sep
Dec
KEYW Corporation
55%
NA
2005
Sep
Dec
ICF International, Inc.
SAIC, Inc.
NA
65%
NA
2004
Sep
Dec
Mar
Jun
NA
NA
NA
NA
52%
50%
53%
55%
61%
61%
64%
NA
NA
NA
NA
NA
2007
Sep
Dec
NA
61%
NA
NA
57%
NA
NA
Mar
Jun
NA
NA
NA
NA
53%
52%
50%
50%
59%
NA
NA
NA
46%
NA
NA
47%
CACI
DRCO
49%
48%
47%
49%
NA
31%
44%
41%
36%
NA
NA
NA
EGL
34%
GTEC
30%
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
KEYW
36%
36%
35%
35%
35%
35%
36%
35%
35%
35%
31%
31%
31%
30%
LDOS
62%
67%
64%
64%
65%
66%
63%
66%
61%
61%
64%
64%
65%
66%
69%
66%
68%
68%
70%
MANT
58%
51%
47%
47%
45%
38%
34%
38%
41%
37%
37%
40%
47%
44%
50%
52%
54%
48%
50%
NCIT
NA
37%
37%
38%
36%
34%
NA
NA
NA
NA
NA
NA
NA
NA
VSE Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
34%
NA
NA
NA
45%
NA
ICFI
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
38%
41%
42%
40%
39%
44%
45%
41%
42%
42%
43%
41%
43%
44%
43%
40%
38%
SRX
18%
24%
32%
32%
33%
31%
36%
35%
38%
37%
47%
55%
51%
51%
50%
50%
47%
SXE
NA
NA
60%
59%
56%
58%
64%
72%
75%
68%
76%
79%
75%
74%
72%
VSEC
Dec
Mar
Jun
2007
Sep
Dec
Mar
Jun
2008
Sep
Dec
Mar
Jun
2009
Sep
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
52%
52%
BAH
NA
NA
46%
19%
NA
NA
48%
40%
NA
NA
65%
NA
36%
38%
65%
46%
NA
NA
NA
69%
45%
NA
NA
39%
68%
48%
NA
35%
NA
66%
BAH
47%
NA
NA
NA
38%
NA
NA
Jun
60%
55%
NA
38%
Jun
NA
Mar
NA
NA
Dec
NA
Mar
35%
Stanley, Inc.
NA
58%
NA
2009
Sep
Dec
36%
SRA International, Inc.
NA
56%
NA
2008
Sep
Dec
IT & BPO Services
66
Exhibit 37. Pricing Mix - continued
Time & Materials (% of Total Revenue)
SAIC
Cost Plus (% of Total Revenue)
Mar
Jun
2003
Sep
Company
FYE
Dec
Booz Allen Hamilton
Mar
NA
NA
NA
NA
CACI International Inc.
Jun
17%
16%
19%
20%
Dynamics Research Corporation
Dec
25%
22%
23%
25%
Engility
Dec
NA
NA
NA
NA
Global Defense Technology & Systems Dec
NA
NA
NA
NA
Mar
NA
Jun
2004
Sep
Dec
Mar
NA
Jun
2005
Sep
NA
NA
NA
NA
NA
21%
22%
23%
25%
26%
26%
26%
22%
22%
22%
19%
20%
20%
21%
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Dec
NA
Mar
Jun
2006
Sep
NA
NA
NA
NA
28%
29%
30%
28%
28%
27%
27%
26%
27%
29%
29%
30%
32%
33%
34%
33%
32%
CACI
19%
21%
20%
17%
19%
22%
22%
21%
21%
19%
21%
18%
16%
17%
18%
19%
19%
DRCO
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
14%
12%
NA
NA
15%
GTEC
ICFI
ICF International, Inc.
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
10%
10%
11%
12%
11%
11%
23%
24%
23%
KEYW Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Leidos Holdings
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
ManTech International Corporation
Dec
37%
36%
34%
32%
29%
28%
28%
NCI, Inc.
Dec
NA
NA
NA
NA
NA
NA
NA
28%
SAIC, Inc.
Jan
NA
NA
NA
NA
NA
NA
NA
NA
30%
42%
32%
25%
NA
48%
28%
26%
NA
SRA International, Inc.
Jun
42%
43%
47%
45%
44%
43%
46%
Stanley, Inc.
Mar
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
VSE Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
KEYW
47%
46%
46%
50%
48%
48%
49%
48%
48%
47%
47%
47%
47%
47%
48%
48%
48%
48%
LDOS
24%
25%
26%
25%
25%
24%
24%
24%
24%
22%
22%
21%
20%
19%
22%
20%
20%
18%
MANT
NCIT
30%
32%
29%
27%
NA
NA
NA
NA
44%
48%
45%
44%
46%
46%
41%
40%
43%
61%
64%
58%
53%
54%
52%
49%
48%
49%
NA
NA
30%
33%
36%
NA
46%
EGL
NA
30%
NA
NA
28%
NA
28%
NA
32%
26%
23%
20%
19%
16%
16%
13%
14%
NA
NA
NA
NA
NA
NA
NA
NA
42%
39%
39%
37%
35%
34%
34%
36%
35%
SRX
47%
41%
33%
30%
30%
27%
29%
29%
33%
SXE
36%
31%
23%
21%
28%
22%
17%
21%
22%
23%
VSEC
2007
Sep
Dec
Mar
Jun
2008
Sep
Dec
Mar
Jun
2009
Sep
Dec
NA
28%
NA
29%
NA
SAIC
Fixed Price (% of Total Revenue)
Company
FYE
Mar
Jun
Booz Allen Hamilton
Mar
NA
NA
CACI International Inc.
Jun
15%
Dynamics Research Corporation
Dec
11%
Engility
Dec
Global Defense Technology & Systems Dec
2003
Sep
Dec
Mar
Jun
2005
Sep
Dec
Mar
Jun
2006
Sep
Dec
Mar
Jun
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
10%
10%
BAH
17%
18%
17%
18%
19%
19%
20%
20%
21%
20%
22%
20%
18%
21%
21%
22%
21%
21%
20%
20%
19%
20%
21%
CACI
15%
21%
24%
25%
23%
24%
24%
18%
19%
19%
20%
21%
22%
20%
21%
26%
33%
33%
39%
37%
38%
40%
45%
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
56%
59%
NA
NA
51%
GTEC
30%
32%
ICFI
Dec
Mar
Jun
NA
NA
NA
NA
19%
19%
18%
17%
13%
14%
13%
16%
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
30%
24%
21%
19%
24%
24%
29%
DRCO
EGL
ICF International, Inc.
Dec
KEYW Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
KEYW
Leidos Holdings
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
17%
19%
19%
14%
16%
16%
16%
17%
17%
18%
17%
18%
18%
18%
21%
21%
21%
22%
LDOS
ManTech International Corporation
Dec
17%
18%
15%
16%
15%
6%
11%
11%
9%
10%
10%
12%
10%
10%
10%
13%
10%
15%
15%
14%
14%
14%
14%
12%
12%
12%
12%
12%
MANT
NCI, Inc.
Dec
NA
NA
NA
NA
NA
NA
NA
13%
14%
16%
19%
23%
21%
26%
36%
38%
34%
27%
35%
34%
34%
30%
36%
31%
32%
30%
39%
36%
NCIT
SAIC, Inc.
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SAIC
SRA International, Inc.
Jun
19%
19%
16%
18%
17%
18%
21%
20%
19%
20%
16%
14%
14%
14%
14%
15%
15%
15%
16%
16%
19%
18%
22%
22%
22%
23%
24%
27%
Stanley, Inc.
Mar
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
20%
18%
18%
15%
14%
15%
20%
16%
16%
15%
22%
20%
15%
19%
22%
21%
21%
20%
VSE Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
10%
9%
7%
6%
5%
5%
3%
4%
2%
4%
4%
5%
5%
Notes:
BAH, CACI, ICFI, LDOS, MANT, NCIT, and SAIC are followed by this analyst, and data may be adjusted from what is in the SEC filings.
For all other companies, information is derived from SEC filings and press releases.
Source: Wells Fargo Securities, LLC, FactSet, and company reports
SRX
SXE
VSEC
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
NA
2004
Sep
Time & Materials (% of Total Revenue)
Mar
Dec
Mar
Jun
25%
26%
26%
BAH
21%
18%
CACI
NA
NA
NA
DRCO
NA
NA
NA
NA
EGL
37%
36%
36%
32%
32%
31%
31%
31%
30%
29%
27%
27%
30%
29%
26%
45%
46%
41%
38%
35%
32%
29%
28%
25%
25%
23%
24%
22%
21%
20%
Dynamics Research Corporation
Dec
33%
35%
34%
29%
29%
30%
33%
34%
34%
33%
37%
37%
39%
40%
40%
NA
Engility
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
Jun
20%
37%
46%
NA
Mar
Sep
Jun
NA
Dec
2014
Jun
Mar
NA
Jun
2013
Sep
CACI International Inc.
NA
Mar
2012
Sep
Booz Allen Hamilton
NA
Dec
2011
Sep
FYE
NA
Jun
2010
Sep
Company
Dec
Mar
Global Defense Technology & Systems Dec
37%
36%
31%
NA
NA
NA
NA
NA
NA
ICF International, Inc.
Dec
49%
49%
50%
49%
51%
49%
48%
47%
50%
KEYW Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
KEYW
Leidos Holdings
Jan
31%
29%
33%
27%
31%
30%
30%
28%
NA
NA
29%
NA
NA
NA
27%
26%
28%
26%
26%
LDOS
ManTech International Corporation
Dec
64%
64%
62%
64%
60%
55%
47%
43%
38%
36%
33%
23%
13%
11%
10%
11%
10%
10%
10%
MANT
NCI, Inc .
Dec
50%
55%
65%
49%
59%
42%
30%
26%
26%
25%
24%
23%
21%
23%
16%
15%
14%
17%
16%
NCIT
SAIC, Inc.
Jan
NA
NA
NA
NA
NA
NA
NA
NA
29%
NA
29%
29%
32%
NA
31%
31%
29%
29%
29%
SAIC
SRA International, Inc.
Jun
38%
39%
37%
36%
39%
NA
34%
NA
32%
NA
37%
34%
34%
NA
34%
34%
38%
36%
39%
SRX
Stanley, Inc .
Mar
49%
44%
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SXE
VSE Corporation
Dec
69%
70%
59%
55%
57%
49%
36%
33%
34%
38%
38%
41%
30%
29%
14%
7%
8%
10%
10%
Company
FYE
Mar
Jun
2010
Sep
Dec
Mar
Jun
2011
Sep
Dec
Mar
Jun
2012
Sep
Dec
Mar
Jun
2013
Sep
Dec
Mar
2014
Jun
Sep
Booz Allen Hamilton
Mar
51%
49%
51%
51%
52%
53%
54%
54%
55%
56%
57%
58%
59%
56%
55%
55%
56%
56%
55%
BAH
CACI International Inc.
Jun
33%
34%
32%
33%
37%
40%
41%
45%
45%
46%
47%
49%
48%
50%
49%
50%
49%
49%
46%
CACI
Dynamics Research Corporation
Dec
20%
21%
21%
21%
22%
19%
21%
18%
20%
20%
18%
19%
18%
18%
18%
NA
NA
NA
NA
DRCO
Engility
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
EGL
Global Defense Technology & Systems Dec
12%
11%
5%
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
ICF International, Inc.
Dec
24%
22%
23%
23%
22%
24%
28%
30%
30%
31%
30%
28%
27%
30%
33%
32%
33%
KEYW Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
KEYW
Leidos Holdings
Jan
47%
47%
44%
46%
43%
43%
45%
46%
NA
NA
45%
NA
NA
NA
47%
47%
48%
48%
47%
LDOS
ManTech International Corporation
Dec
21%
21%
23%
20%
26%
31%
36%
41%
48%
46%
52%
60%
69%
73%
74%
72%
71%
71%
67%
MANT
NCI, Inc .
Dec
17%
15%
11%
12%
13%
33%
43%
45%
50%
51%
49%
48%
51%
48%
54%
53%
54%
51%
51%
NCIT
SAIC, Inc.
Jan
NA
NA
38%
38%
38%
37%
NA
37%
37%
38%
38%
37%
SAIC
SRA International, Inc.
Jun
35%
34%
33%
37%
32%
NA
34%
NA
29%
NA
30%
32%
29%
NA
30%
32%
29%
30%
27%
SRX
Stanley, Inc .
Mar
29%
32%
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SXE
VSE Corporation
Dec
26%
24%
35%
37%
30%
30%
29%
27%
21%
24%
32%
18%
21%
22%
28%
31%
35%
31%
25%
Company
FYE
Mar
Jun
2010
Sep
Dec
Mar
Jun
2011
Sep
Dec
Mar
Jun
2012
Sep
Dec
Mar
Jun
2013
Sep
Dec
Mar
2014
Jun
Sep
Booz Allen Hamilton
Mar
12%
14%
13%
13%
16%
15%
15%
15%
14%
14%
14%
15%
14%
14%
16%
19%
19%
18%
19%
BAH
CACI International Inc.
Jun
21%
21%
23%
26%
25%
24%
28%
26%
27%
29%
28%
28%
28%
28%
30%
31%
31%
30%
36%
CACI
Dynamics Research Corporation
Dec
47%
44%
45%
50%
49%
51%
46%
48%
46%
47%
45%
44%
43%
42%
42%
NA
NA
NA
NA
DRCO
Engility
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
EGL
Global Defense Technology & Systems Dec
51%
53%
64%
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
ICF International, Inc.
Dec
27%
29%
27%
28%
27%
27%
22%
21%
22%
21%
18%
21%
21%
18%
17%
20%
20%
KEYW Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
KEYW
Leidos Holdings
Jan
22%
24%
23%
27%
26%
27%
25%
26%
NA
NA
26%
NA
NA
NA
26%
27%
24%
26%
27%
LDOS
ManTech International Corporation
Dec
15%
15%
15%
16%
14%
14%
17%
17%
14%
18%
15%
17%
18%
15%
16%
17%
19%
19%
23%
MANT
NCI, Inc .
Dec
34%
30%
24%
39%
28%
25%
27%
29%
24%
24%
27%
29%
28%
29%
30%
32%
32%
32%
33%
NCIT
SAIC
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
49%
48%
48%
52%
51%
52%
52%
50%
48%
47%
GTEC
ICFI
VSEC
Cost Plus (% of Total Revenue)
NA
NA
NA
NA
NA
NA
NA
24%
30%
NA
NA
Government Services: Market Space Firming
67
Exhibit 37. Pricing Mix - continued
GTEC
ICFI
VSEC
Fixed Price (% of Total Revenue)
NA
28%
23%
GTEC
ICFI
SAIC, Inc.
Jan
NA
NA
NA
NA
NA
NA
NA
NA
33%
NA
33%
33%
31%
NA
32%
32%
33%
33%
34%
SRA International, Inc.
Jun
27%
27%
30%
27%
29%
NA
32%
NA
39%
NA
33%
34%
37%
NA
36%
34%
33%
34%
34%
SRX
Stanley, Inc .
Mar
22%
24%
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SXE
VSE Corporation
Dec
5%
7%
7%
8%
13%
21%
35%
40%
45%
38%
40%
48%
49%
49%
58%
62%
57%
59%
64%
Notes:
BAH, CACI, ICFI, LDOS, MANT, NCIT, and SAIC are followed by this analyst, and data may be adjusted from what is in the SEC filings.
For all other companies, information is derived from SEC filings and press releases.
Source: Wells Fargo Securities, LLC, FactSet, and company reports
VSEC
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
NA
Client Mix: DoD/Intel
2001
2002
2003
2004
2005
2006
Fiscal Year
2007
2008
Company
FYE
Booz Allen Hamilton
Mar
NA
NA
NA
NA
NA
NA
NA
NA
NA
76%
76%
76%
75%
75%
CACI International Inc.
Jun
58%
64%
64%
67%
73%
73%
72%
75%
76%
78%
80%
78%
74%
72%
Dynamics Research Corporation
Dec
77%
80%
78%
78%
78%
81%
80%
66%
61%
66%
64%
55%
NA
NA
Engility
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Global Defense Technology & Systems Dec
NA
NA
NA
NA
NA
NA
NA
100%
100%
100%
NA
NA
NA
NA
9%
NA
8%
2009
2010
2011
2012
2013
2014
ICF International, Inc.
Dec
NA
NA
NA
NA
NA
NA
14%
15%
14%
13%
12%
KEYW Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Leidos Holdings
Jan
NA
NA
NA
~75%
~75%
~75%
~75%
~75%
~75%
~75%
~75%
~75%
NA
NA
ManTech International Corporation
Dec
85%
87%
91%
92%
95%
95%
93%
94%
95%
96%
97%
95%
NA
NA
NCI, Inc.
Dec
NA
NA
62%
70%
74%
82%
82%
81%
88%
92%
85%
76%
75%
NA
SAIC, Inc.
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
70%
SRA International, Inc.
Jun
43%
50%
56%
59%
60%
59%
58%
53%
50%
51%
51%
47%
51%
46%
Stanley, Inc.
Mar
NA
NA
NA
64%
70%
61%
65%
66%
72%
77%
NA
NA
NA
NA
VSE Corporation
Dec
NA
NA
NA
NA
92%
95%
82%
80%
83%
78%
66%
57%
48%
NA
Company
FYE
2001
2002
2003
2004
2005
2006
Fiscal Year
2007
2008
2009
2010
2011
2012
2013
Booz Allen Hamilton
Mar
NA
NA
NA
NA
NA
NA
NA
NA
NA
24%
24%
24%
23%
23%
CACI International Inc.
Jun
27%
27%
29%
26%
22%
21%
22%
20%
20%
17%
15%
16%
20%
22%
9%
9%
17%
24%
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
IT & BPO Services
68
Exhibit 38. Client Mix
Client Mix: Civil Agencies
Dynamics Research Corporation
Dec
17%
13%
13%
12%
12%
14%
10%
Engility
Dec
NA
6%
NA
NA
NA
NA
NA
NA
NA
NA
Global Defense Technology & Systems Dec
NA
NA
NA
NA
NA
NA
NA
0%
0%
NA
0%
2014
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Leidos Holdings
Jan
NA
NA
NA
~15%
~15%
~15%
~15%
~15%
~15%
~15%
~15%
~15%
NA
NA
ManTech International Corporation
Dec
11%
10%
NA
NA
NCI, Inc.
Dec
NA
NA
25%
NA
SAIC, Inc.
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SRA International, Inc.
Jun
50%
47%
42%
40%
40%
41%
40%
47%
50%
49%
49%
47%
49%
54%
30%
39%
35%
34%
28%
23%
NA
NA
NA
NA
7%
5%
17%
20%
17%
21%
33%
43%
51%
NA
7%
7%
3%
3%
5%
4%
3%
3%
3%
4%
38%
30%
26%
18%
18%
16%
12%
8%
15%
24%
Stanley, Inc.
Mar
NA
NA
NA
36%
VSE Corporation
Dec
NA
NA
NA
NA
Notes:
BAH, CACI, ICFI, LDOS, MANT, NCIT, and SAIC are followed by this analyst, and data may be adjusted from what is in the SEC filings.
For all other companies, information is derived from SEC filings and press releases.
Source: Wells Fargo Securities, LLC, FactSet, and company reports
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
ICF International, Inc.
KEYW Corporation
Mar
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
BAH
CACI International Inc.
Jun
64%
63%
64%
65%
68%
71%
72%
73%
73%
73%
73%
73%
74%
73%
71%
72%
72%
72%
73%
74%
75%
76%
75%
75%
76%
77%
77%
78%
CACI
Dynamics Research Corporation
Dec
77%
78%
78%
80%
80%
80%
77%
78%
76%
79%
81%
75%
81%
79%
80%
78%
80%
79%
79%
61%
DRCO
Engility
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Global Defense Technology & Systems Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
100%
100%
100%
100%
100%
100%
100%
100%
100%
NA
NA
NA
NA
NA
59%
9%
55%
9%
Jun
58%
8%
61%
13%
Dec
14%
EGL
GTEC
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
KEYW
~75%
~75%
~75%
~75%
~75%
~75%
~75%
~75%
~75%
~75%
~75%
~75%
~75%
~75%
~75%
~75%
~75%
~75%
~75%
~75%
~75%
~75%
~75%
~75%
~75%
LDOS
ManTech International Corporation
Dec
88%
89%
93%
94%
93%
92%
91%
92%
94%
95%
95%
95%
95%
96%
95%
95%
94%
93%
93%
92%
92%
94%
95%
94%
95%
95%
95%
95%
MANT
NCI, Inc.
Dec
NA
NA
NA
NA
NA
NA
NA
72%
73%
73%
72%
76%
75%
79%
84%
86%
80%
82%
82%
82%
80%
79%
80%
85%
86%
87%
89%
89%
NCIT
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
64%
Mar
~75%
NA
NA
69%
Dec
NA
NA
NA
75%
Jun
~75%
NA
NA
81%
Mar
NA
NA
NA
Dec
~75%
NA
NA
Jun
Jan
NA
NA
Mar
Dec
NA
NA
Dec
Dec
NA
NA
Jun
Leidos Holdings
NA
NA
Mar
KEYW Corporation
Jan
NA
Dec
ICF International, Inc.
SAIC, Inc.
NA
Jun
2009
Sep
NA
NA
Mar
2008
Sep
NA
NA
Dec
2007
Sep
NA
NA
Jun
2006
Sep
Mar
NA
Mar
2005
Sep
Booz Allen Hamilton
NA
Dec
2004
Sep
FYE
NA
Jun
2003
Sep
Company
NA
ICFI
NA
NA
NA
NA
NA
NA
NA
NA
SRA International, Inc.
Jun
57%
60%
62%
62%
62%
62%
62%
59%
59%
59%
64%
59%
57%
59%
57%
59%
60%
61%
56%
53%
53%
51%
50%
49%
49%
50%
51%
52%
SRX
Stanley, Inc.
Mar
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
59%
62%
64%
67%
66%
66%
62%
68%
68%
68%
60%
63%
71%
76%
76%
75%
76%
79%
SAIC
SXE
VSE Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
88%
NA
78%
NA
82%
80%
75%
NA
85%
82%
77%
88%
VSEC
Mar
Jun
2008
Sep
Mar
Jun
2009
Sep
Client Mix: Civil Agencies
Mar
Jun
2003
Sep
Dec
Mar
Jun
2004
Sep
Dec
Mar
Jun
2005
Sep
Company
FYE
Dec
Mar
Jun
Booz Allen Hamilton
Mar
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
CACI International Inc.
Jun
29%
30%
30%
29%
26%
23%
23%
21%
22%
21%
22%
21%
21%
Dynamics Research Corporation
Dec
15%
15%
15%
13%
10%
11%
14%
13%
13%
11%
9%
13%
11%
Engility
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Global Defense Technology & Systems Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
2006
Sep
Dec
Mar
Jun
2007
Sep
Dec
Dec
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
BAH
22%
23%
22%
22%
22%
21%
20%
20%
19%
20%
21%
20%
19%
18%
17%
CACI
13%
11%
13%
14%
14%
13%
11%
12%
13%
15%
15%
16%
12%
9%
10%
DRCO
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
0%
0%
0%
0%
0%
0%
NA
0%
NA
0%
EGL
GTEC
ICF International, Inc.
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
ICFI
KEYW Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
KEYW
Jan
~15%
~15%
~15%
~15%
~15%
~15%
~15%
~15%
~15%
~15%
~15%
~15%
~15%
~15%
~15%
~15%
~15%
~15%
~15%
~15%
~15%
~15%
~15%
~15%
~15%
~15%
~15%
~15%
Leidos Holdings
ManTech International Corporation
Dec
NCI, Inc.
Dec
SAIC, Inc.
9%
NA
9%
NA
6%
NA
5%
NA
5%
NA
6%
NA
NA
NA
NA
NA
NA
NA
NA
27%
26%
27%
27%
23%
2%
1%
2%
2%
3%
4%
4%
6%
6%
4%
3%
4%
3%
3%
3%
3%
25%
21%
16%
14%
20%
18%
17%
17%
18%
17%
17%
14%
13%
13%
11%
11%
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
LDOS
MANT
NCIT
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SRA International, Inc.
Jun
42%
37%
38%
37%
37%
37%
37%
40%
41%
41%
35%
40%
42%
40%
41%
39%
39%
38%
44%
47%
47%
49%
50%
51%
51%
50%
49%
48%
SRX
Stanley, Inc.
Mar
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
41%
38%
36%
33%
34%
34%
38%
32%
32%
32%
40%
37%
29%
24%
24%
25%
24%
21%
SXE
VSE Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
16%
NA
12%
12%
18%
NA
6%
9%
10%
NA
VSEC
7%
NA
Government Services: Market Space Firming
69
Exhibit 38. Client Mix - continued
Client Mix: DoD/Intel
SAIC
Notes:
BAH, CACI, ICFI, LDOS, MANT, NCIT, and SAIC are followed by this analyst, and data may be adjusted from what is in the SEC filings.
For all other companies, information is derived from SEC filings and press releases.
Source: Wells Fargo Securities, LLC, FactSet, and company reports
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
Client Mix: DoD/Intel
Jun
Dec
Mar
Jun
2011
Sep
Dec
Mar
Jun
2012
Sep
Dec
Mar
Jun
2013
Sep
Dec
Mar
2014
Jun
FYE
Booz Allen Hamilton
Mar
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
BAH
CACI International Inc.
Jun
78%
78%
79%
79%
81%
81%
79%
79%
77%
76%
76%
76%
74%
72%
71%
73%
73%
72%
68%
CACI
Dynamics Research Corporation
Dec
61%
62%
66%
71%
69%
69%
62%
58%
56%
55%
54%
56%
50%
48%
49%
NA
NA
NA
NA
DRCO
Engility
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
EGL
100%
100%
100%
15%
15%
13%
Global Defense Technology & Systems Dec
Mar
2010
Sep
Company
Sep
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
GTEC
14%
14%
14%
14%
13%
13%
13%
14%
13%
13%
13%
12%
11%
11%
10%
10%
ICFI
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
KEYW
~75%
~75%
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
LDOS
ICF International, Inc.
Dec
KEYW Corporation
Dec
NA
NA
NA
NA
NA
NA
Leidos Holdings
Jan
~75%
~75%
~75%
~75%
~75%
~75%
ManTech International Corporation
Dec
95%
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
MANT
NCI, Inc.
Dec
89%
90%
93%
94%
93%
84%
82%
81%
77%
75%
75%
77%
76%
75%
74%
75%
78%
75%
73%
NCIT
SAIC, Inc.
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
73%
NA
NA
NA
NA
SAIC
SRA International, Inc.
Jun
51%
50%
50%
48%
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SRX
Stanley, Inc.
Mar
78%
77%
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SXE
VSE Corporation
Dec
79%
78%
72%
83%
74%
65%
53%
NA
56%
56%
56%
69%
51%
50%
45%
48%
50%
49%
42%
VSEC
Company
FYE
Mar
Jun
2010
Sep
Dec
Mar
Jun
2011
Sep
Mar
Jun
2012
Sep
Dec
Mar
Jun
2013
Sep
Dec
Mar
Booz Allen Hamilton
Mar
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
BAH
CACI International Inc.
Jun
17%
17%
16%
15%
14%
14%
14%
16%
17%
18%
19%
19%
21%
22%
23%
21%
21%
22%
26%
CACI
Dynamics Research Corporation
Dec
12%
10%
8%
Engility
Dec
NA
NA
NA
NA
NA
IT & BPO Services
70
Exhibit 38. Client Mix - continued
Client Mix: Civil Agencies
Global Defense Technology & Systems Dec
0%
8%
NA
0%
0%
9%
8%
Dec
2014
Jun
Sep
21%
25%
25%
25%
25%
23%
29%
31%
32%
NA
NA
NA
NA
DRCO
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
EGL
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
GTEC
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
ICFI
KEYW Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
KEYW
Leidos Holdings
Jan
~15%
~15%
~15%
~15%
~15%
~15%
~15%
~15%
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
LDOS
ManTech International Corporation
Dec
3%
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
MANT
NCI, Inc.
Dec
11%
16%
18%
19%
23%
25%
25%
22%
24%
25%
26%
25%
22%
25%
27%
NCIT
SAIC, Inc.
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SAIC
SRA International, Inc.
Jun
49%
50%
50%
52%
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SRX
Stanley, Inc.
Mar
22%
23%
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SXE
VSE Corporation
Dec
9%
10%
16%
NA
10%
18%
36%
NA
43%
43%
43%
50%
49%
50%
55%
51%
50%
50%
57%
VSEC
10%
7%
6%
7%
Notes:
BAH, CACI, ICFI, LDOS, MANT, NCIT, and SAIC are followed by this analyst, and data may be adjusted from what is in the SEC filings.
For all other companies, information is derived from SEC filings and press releases.
Source: Wells Fargo Securities, LLC, FactSet, and company reports
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
ICF International, Inc.
Client Mix: DoD/Intel (Yr/Yr % Change)
2008
2009
Fiscal Year
2010
2011
NA
NA
NA
9%
30%
15%
Dec
(13%)
(12%)
4%
Dec
NA
NA
NA
NA
NA
12%
9%
Company
FYE
2007
Booz Allen Hamilton
Mar
NA
CACI International Inc.
Jun
Dynamics Research Corporation
Engility
Global Defense Technology & Systems Dec
2009
2014
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Sep
Dec
NA
NA
NA
NA
NA
NA
NA
NA
BAH
14%
16%
19%
19%
18%
15%
14%
CACI
4%
13%
2%
10%
22%
DRCO
NA
NA
EGL
9%
5%
(3%)
(5%)
NA
NA
NA
NA
18%
17%
3%
(7%)
(6%)
40%
32%
21%
18%
8%
10%
14%
(15%)
NA
NA
(8%)
(18%)
(12%)
(12%)
(9%)
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
15%
7%
8%
9%
4%
NA
NA
NA
NA
21%
(7%)
(8%)
3%
47%
NA
GTEC
113%
ICFI
Dec
(2%)
50%
21%
(6%)
NA
NA
NA
NA
(10%)
(15%)
37%
61%
84%
18%
15%
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
KEYW
Leidos Holdings
Jan
~7%
~11%
~13%
~8%
~1%
(46%)
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
LDOS
ManTech International Corporation
Dec
25%
30%
9%
30%
11%
(11%)
NA
NA
41%
34%
30%
20%
9%
12%
6%
11%
31%
NA
NA
NA
MANT
NCI, Inc.
Dec
39%
28%
30%
30%
(11%)
(41%)
(11%)
NA
41%
40%
15%
19%
23%
24%
44%
29%
14%
20%
35%
44%
NCIT
SAIC, Inc.
Jan
NA
NA
NA
NA
NA
NA
NA
NA
SRA International, Inc.
Jun
(3%)
9%
3%
7%
NA
Jun
KEYW Corporation
8%
3%
2010
2013
ICF International, Inc.
6%
8%
2008
2012
NA
NA
NA
NA
(10%)
NA
NA
NA
Stanley, Inc.
Mar
53%
50%
41%
21%
VSE Corporation
Dec
57%
54%
1%
(20%)
Company
FYE
2007
2008
2009
Fiscal Year
2010
2011
Booz Allen Hamilton
Mar
NA
NA
NA
NA
9%
CACI International Inc.
Jun
15%
14%
10%
(1%)
Dynamics Research Corporation
Dec
(10%)
20%
(20%)
Engility
Dec
NA
NA
NA
Global Defense Technology & Systems Dec
NA
NA
NA
NA
NA
NA
NA
5%
(1%)
(4%)
(11%)
(7%)
2%
NA
NA
9%
19%
13%
16%
NA
NA
NA
NA
44%
20%
33%
55%
55%
44%
22%
(43%)
(19%)
(26%)
NA
46%
NA
NA
NA
31%
3%
(12%)
2013
2014
Mar
Jun
Sep
Dec
Mar
Jun
Sep
5%
(6%)
(5%)
NA
NA
NA
NA
NA
NA
NA
0%
16%
19%
4%
23%
14%
12%
19%
3%
7%
(10%)
124%
45%
NA
NA
(12%)
(14%)
33%
64%
63%
16%
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
6%
NA
NA
SAIC
(0%)
(3%)
SRX
NA
NA
SXE
(24%)
(22%)
12%
5%
(11%)
(21%)
Dec
Mar
Jun
NA
NA
1%
(7%)
(2%)
4%
3%
3%
CACI
(37%)
(35%)
(23%)
(19%)
(9%)
(2%)
DRCO
NA
NA
NA
NA
NA
NA
EGL
NA
NA
NA
NA
NA
NA
GTEC
NA
VSEC
Civil Agencies (Yr/Yr % Change)
2008
2012
2009
2010
NA
Sep
Dec
NA
NA
BAH
ICF International, Inc.
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
ICFI
KEYW Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
KEYW
NA
LDOS
Jan
~7%
~11%
~13%
~8%
~1%
(46%)
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
ManTech International Corporation
Dec
120%
23%
(17%)
13%
(1%)
32%
NA
NA
189%
44%
(5%)
(22%)
(47%)
(17%)
6%
(10%)
44%
NA
NA
NA
MANT
NCI, Inc.
Dec
40%
16%
(12%)
(17%)
80%
6%
(6%)
NA
32%
33%
15%
(5%)
(17%)
(15%)
(16%)
(3%)
(7%)
(8%)
(18%)
(25%)
NCIT
SAIC, Inc.
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SRA International, Inc.
Jun
5%
Stanley, Inc.
Mar
29%
VSE Corporation
Dec
NA
NA
8%
7%
43%
6%
(7%)
91%
(18%)
8%
NA
NA
NA
NA
NA
NA
NA
(5%)
NA
NA
NA
43%
52%
22%
NA
NA
NA
57%
49%
15%
NA
160%
NA
NA
NA
4%
21%
3%
Notes:
BAH, CACI, ICFI, LDOS, MANT, NCIT, and SAIC are followed by this analyst, and data may be adjusted from what is in the SEC filings.
For all other companies, information is derived from SEC filings and press releases.
Source: Wells Fargo Securities, LLC, FactSet, and company reports
5%
9%
7%
4%
(27%)
(37%)
NA
NA
4%
5%
(18%)
(6%)
(2%)
(30%)
(54%)
NA
5%
6%
1%
(6%)
(5%)
NA
NA
SAIC
14%
SRX
NA
NA
SXE
31%
NA
VSEC
4%
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
Leidos Holdings
41%
NA
Government Services: Market Space Firming
71
Exhibit 38. Client Mix - continued
Client Mix: DoD/Intel (Yr/Yr % Change)
2011
Mar
FYE
Booz Allen Hamilton
Mar
NA
NA
NA
NA
CACI International Inc .
Jun
20%
18%
12%
12%
Dynamics Research Corporation
Dec
14%
17%
31%
Engility
Dec
NA
NA
NA
NA
NA
Global Defense Tec hnology & Systems Dec
NA
NA
NA
NA
NA
4%
Jun
2012
Company
Sep
(0%)
3%
Jun
2013
Sep
Dec
Mar
Jun
Sep
Dec
Mar
2014
Jun
Sep
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
BAH
(2%)
(7%)
(4%)
(8%)
(7%)
(9%)
(12%)
(8%)
(2%)
(1%)
(10%)
CACI
1%
(6%)
(30%)
(19%)
(23%)
(22%)
(21%)
NA
NA
NA
NA
DRCO
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
EGL
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
GTEC
Dec
(12%)
(16%)
(11%)
(16%)
(10%)
KEYW Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
KEYW
Leidos Holdings
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
LDOS
Dec
NA
NA
NCI, Inc.
Dec
37%
19%
SAIC, Inc .
Jan
NA
SRA International, Inc .
Jun
NA
Stanley, Inc .
Mar
VSE Corporation
3%
Mar
ICF International, Inc .
ManTec h International Corporation
19%
Dec
9%
4%
9%
8%
3%
1%
IT & BPO Services
72
Exhibit 38. Client Mix - continued
ICFI
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
MANT
(31%)
(42%)
(45%)
(49%)
(39%)
(26%)
(9%)
(9%)
(13%)
(13%)
(0%)
(6%)
(4%)
NCIT
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SAIC
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SRX
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SXE
Dec
(38%)
(37%)
(45%)
NA
NA
NA
NA
NA
(23%)
(23%)
(34%)
(26%)
(3%)
(10%)
(13%)
Company
FYE
Mar
Jun
Dec
Mar
Jun
Mar
Jun
Sep
Dec
Mar
Booz Allen Hamilton
Mar
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
CACI International Inc .
Jun
(1%)
(3%)
(2%)
19%
23%
22%
30%
10%
17%
21%
12%
Dynamics Research Corporation
Dec
(30%)
(10%)
271%
242%
268%
250%
(5%)
(23%)
9%
11%
NA
NA
NA
NA
DRCO
Engility
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
EGL
Global Defense Tec hnology & Systems Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
GTEC
VSEC
Civil Agencies (Yr/Yr % Change)
2011
2012
Sep
2013
Sep
Dec
0%
6%
1%
2014
Jun
Sep
NA
NA
(2%)
6%
BAH
CACI
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
ICFI
KEYW Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
KEYW
Leidos Holdings
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
LDOS
ManTec h International Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NCI, Inc.
Dec
(18%)
104%
101%
113%
117%
(12%)
(7%)
(10%)
(4%)
(9%)
(8%)
(11%)
(6%)
SAIC, Inc .
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SRA International, Inc .
Jun
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SRX
Stanley, Inc .
Mar
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SXE
VSE Corporation
Dec
(24%)
38%
69%
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
VSEC
Notes:
BAH, CACI, ICFI, LDOS, MANT, NCIT, and SAIC are followed by this analyst, and data may be adjusted from what is in the SEC filings.
For all other c ompanies, information is derived from SEC filings and press releases.
Source: Wells Fargo Sec urities, LLC, Fac tSet, and c ompany reports
1%
1%
MANT
NCIT
SAIC
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
ICF International, Inc .
Fiscal Year
2007
2008
Company
FYE
2001
2002
2003
2004
2005
2006
2009
2010
2011
2012
2013
2014
Booz Allen Hamilton
Mar
NA
NA
NA
NA
NA
NA
NA
NA
$7,279
$9,013
$10,924
$10,804
$11,535
$9,838
CACI International Inc.
Jun
1,100
1,900
2,500
3,400
3,400
4,600
6,400
7,000
7,800
6,800
6,800
7,180
6,900
7,100
CACI
Dynamics Research Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
434
401
802
732
NA
NA
DRCO
Engility
BAH
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
EGL
Global Defense Technology & Systems Dec
NA
NA
NA
NA
NA
NA
NA
476
640
791
NA
NA
NA
NA
GTEC
ICF International, Inc.
Dec
NA
NA
NA
134
227
972
822
817
1,362
1,367
1,662
1,512
1,656
NA
ICFI
KEYW Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
285
452
NA
NA
NA
KEYW
Leidos Holdings
Jan
NA
NA
NA
10,901
13,416
15,062
14,911
NA
NA
15,575
17,300
18,003
10,127
9,305
LDOS
ManTech International Corporation
Dec
908
1,400
1,500
1,700
2,340
2,870
3,240
3,970
3,800
4,900
4,700
6,500
3,900
NA
MANT
NCI, Inc.
Dec
NA
NA
418
547
579
612
756
1,189
1,501
1,301
1,000
706
488
NA
NCIT
SAIC, Inc.
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
8,711
7,764
6,651
SAIC
SRA International, Inc.
Jun
686
1,034
1,559
2,100
2,700
3,300
3,410
3,859
4,059
4,450
4,261
3,595
3,300
3,500
SRX
Stanley, Inc.
Mar
NA
NA
NA
NA
520
845
1,000
1,784
2,025
2,106
NA
NA
NA
NA
SXE
VSE Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
VSEC
Company
FYE
2001
2002
2003
2004
2005
2006
2009
2010
2011
2012
2013
2014
Booz Allen Hamilton
Mar
NA
NA
NA
NA
NA
NA
NA
NA
$2,392
$2,528
$2,392
$2,898
$2,509
$2,290
BAH
CACI International Inc.
Jun
292
385
469
745
887
983
1,200
1,400
1,600
1,900
1,800
1,970
1,700
1,600
CACI
Dynamics Research Corporation
Dec
90
111
124
165
145
93
116
147
159
134
183
164
NA
NA
DRCO
Engility
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
EGL
Global Defense Technology & Systems Dec
NA
NA
NA
NA
NA
NA
NA
116
103
162
NA
NA
NA
NA
GTEC
ICF International, Inc.
Dec
NA
NA
NA
71
133
763
522
427
536
649
730
695
697
NA
ICFI
KEYW Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
92
76
NA
NA
NA
KEYW
LDOS
Funded Backlog
Fiscal Year
2007
2008
Leidos Holdings
Jan
NA
NA
NA
3,355
3,646
3,888
4,800
NA
NA
5,252
5,500
5,537
3,414
2,998
ManTech International Corporation
Dec
207
197
375
450
467
610
758
1,180
1,100
1,600
1,300
1,800
1,100
NA
MANT
NCI, Inc.
Dec
NA
NA
62
62
70
123
189
234
250
302
220
212
195
NA
NCIT
SAIC
SAIC, Inc.
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
2,056
1,953
1,639
SRA International, Inc.
Jun
129
159
243
340
453
513
600
677
762
772
779
777
704
667
SRX
Stanley, Inc.
Mar
NA
NA
NA
NA
124
161
225
299
340
344
NA
NA
NA
NA
SXE
VSE Corporation
Dec
NA
NA
NA
NA
276
299
408
567
476
407
282
250
236
NA
VSEC
Fiscal Year
2007
2008
Government Services: Market Space Firming
73
Exhibit 39. Backlog Analysis
Total Backlog (MM)
Funded Backlog (% of Total Backlog)
FYE
2001
2002
2003
2004
2005
2006
2009
2010
2011
2012
2013
2014
Booz Allen Hamilton
Dec
NM
NM
NM
NM
NM
NM
NM
NM
33%
28%
22%
27%
22%
23%
CACI International Inc.
Jun
27%
20%
19%
22%
26%
21%
19%
20%
21%
28%
26%
27%
25%
23%
CACI
Engility
Dec
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
CACI
Dynamics Research Corporation
BAH
Dec
NM
NM
NM
NM
NM
NM
NM
NM
36%
33%
23%
22%
NM
NM
DRCO
Global Defense Technology & Systems Dec
NM
NM
NM
NM
NM
NM
NM
24%
16%
20%
NM
NM
NM
NM
GTEC
ICF International, Inc.
Dec
NM
NM
NM
53%
59%
79%
63%
52%
39%
47%
44%
46%
42%
NM
ICFI
KEYW Corporation
Dec
NM
NM
NM
NM
NM
NM
NM
NM
NM
32%
17%
NM
NM
NM
KEYW
LDOS
Leidos Holdings
Jan
NM
NM
NM
31%
27%
26%
32%
NM
NM
34%
32%
31%
34%
32%
ManTech International Corporation
Dec
23%
14%
25%
26%
20%
21%
23%
30%
29%
33%
28%
28%
28%
NM
MANT
NCI, Inc.
Dec
NM
NM
15%
11%
12%
20%
25%
20%
17%
23%
22%
30%
40%
NM
NCIT
SAIC
SAIC, Inc.
Jan
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
24%
25%
25%
SRA International, Inc.
Jun
19%
15%
16%
16%
17%
16%
18%
18%
19%
17%
18%
22%
21%
19%
SRX
Stanley, Inc.
Mar
NM
NM
NM
NM
24%
19%
23%
17%
17%
16%
NM
NM
NM
NM
SXE
VSE Corporation
Dec
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
VSEC
Notes:
BAH, CACI, ICFI, LDOS, MANT, NCIT, and SAIC are followed by this analyst, and data may be adjusted from what is in the SEC filings.
For all other companies, information is derived from SEC filings and press releases.
Source: Wells Fargo Securities, LLC, FactSet, and company reports
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
Company
2003
2004
2005
Sep
2006
Company
FYE
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
Booz Allen Hamilton
Mar
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
CACI International Inc .
Jun
NA
2,500
NA
NA
NA
3,400
NA
NA
NA
3,400
~3,800
Dynamic s Research Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Engility
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
2007
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
NA
NA
NA
NA
NA
NA
NA
NA
NA
4,600
NA
NA
NA
6,400
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
2008
Sep
2009
Dec
Mar
Jun
NA
NA
NA
NA
NA
7,000
NA
NA
NA
NA
NA
NA
NA
NA
NA
$4,781
Dec
Mar
Jun
Sep
Dec
$6,541
$6,911
$7,279
$7,504
$8,351
NA
NA
7,800
NA
NA
CACI
NA
NA
NA
NA
434
DRCO
NA
NA
NA
NA
BAH
EGL
Global Defense Tec hnology & Systems Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
476
499
453
658
640
602
ICF International, Inc.
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
822
845
780
833
817
1,230
1,219
1,431
1,362
KEYW Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
KEYW
GTEC
ICFI
Leidos Holdings
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
LDOS
ManTech International Corporation
Dec
1,400
1,500
1,500
1,500
1,400
1,500
1,500
1,700
1,700
1,700
1,920
2,340
2,240
2,150
2,710
2,870
2,940
3,570
3,510
3,240
3,440
3,440
4,260
3,970
4,070
3,890
3,780
3,800
MANT
NCI, Inc.
Dec
NA
NA
NA
NA
NA
NA
NA
547
548
525
562
579
560
545
600
612
622
755
722
756
1,000
994
1,096
1,189
1,191
1,120
1,259
1,501
NCIT
SAIC, Inc.
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SAIC
Jun
1,478
1,559
1,717
1,900
2,000
2,100
2,400
2,400
2,500
SRX
SRA International, Inc.
2,700
3,200
3,200
3,200
3,300
3,600
3,700
3,500
3,410
4,000
3,900
3,891
3,859
4,151
3,917
4,208
4,059
4,538
4,442
Stanley, Inc .
Mar
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
529
580
845
833
949
1,061
1,000
986
1,400
1,300
1,784
1,996
2,084
2,135
2,025
2,024
1,986
2,117
VSE Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Company
FYE
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
Dec
Mar
Jun
Sep
Dec
Mar
2007
June
Sep
Dec
Mar
Dec
Mar
Booz Allen Hamilton
Mar
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
$1,726
$2,186
$2,291
$2,392
$2,214
$2,589
IT & BPO Services
74
Exhibit 39. Backlog Analysis - continued
Total Backlog (MM)
SXE
VSEC
Funded Backlog
2003
2004
2005
Sep
NA
2006
NA
2008
June
Sep
2009
June
Sep
Dec
CACI International Inc .
Jun
NA
469
NA
NA
NA
785
NA
NA
NA
887
NA
NA
NA
983
NA
NA
NA
1,200
NA
NA
1,400
1,400
1,700
1,500
1,600
1,600
1,920
1,750
Dynamic s Research Corporation
Dec
119
119
109
124
146
123
151
165
186
154
147
145
144
129
98
93
115
113
99
116
114
115
148
147
142
138
154
159
Engility
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Global Defense Tec hnology & Systems Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
116
153
121
122
103
127
ICF International, Inc.
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
522
528
426
476
427
500
448
556
536
KEYW Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
LDOS
Dec
278
342
411
475
352
401
466
450
390
452
439
467
519
550
504
610
767
746
846
758
949
989
1,210
1,180
1,100
971
1,280
1,100
MANT
Dec
NA
NA
NA
NA
NA
NA
NA
62
80
63
76
70
71
71
93
123
120
137
157
189
205
156
233
234
249
205
267
250
NCIT
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SAIC
Jun
261
243
269
261
316
340
400
384
459
673
600
NA
754
NA
766
NA
ICFI
KEYW
ManTech International Corporation
580
NA
GTEC
Leidos Holdings
SRA International, Inc.
NA
CACI
DRCO
EGL
NCI, Inc.
SAIC, Inc.
NA
BAH
453
583
568
555
513
655
Stanley, Inc .
Mar
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
135
138
161
202
241
219
225
242
309
327
299
309
355
359
340
351
360
390
SXE
VSE Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
299
384
372
478
408
570
785
674
677
706
840
567
802
555
808
536
762
597
832
476
845
VSEC
SRX
Dec
Mar
Jun
Sep
Dec
Mar
2007
June
Sep
Dec
Mar
2008
June
Sep
Dec
Mar
2009
June
Sep
Dec
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
33%
33%
33%
31%
Funded Backlog (% of Total Backlog)
2003
2004
Company
FYE
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
Booz Allen Hamilton
Dec
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
2005
Sep
NM
2006
NM
36%
30%
BAH
CACI International Inc .
Jun
NM
19%
NM
NM
NM
23%
NM
NM
NM
26%
NM
NM
NM
21%
NM
NM
NM
19%
NM
NM
NM
20%
NM
NM
NM
21%
NM
NM
CACI
Engility
Dec
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
EGL
Dynamic s Research Corporation
Dec
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
36%
DRCO
Global Defense Tec hnology & Systems Dec
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
24%
31%
27%
19%
16%
21%
GTEC
ICF International, Inc.
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
63%
63%
55%
57%
52%
41%
37%
39%
39%
ICFI
KEYW Corporation
Dec
KEYW
Jan
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
LDOS
ManTech International Corporation
Dec
Dec
20%
NM
23%
NM
27%
NM
32%
NM
25%
NM
27%
NM
31%
NM
26%
NM
23%
NM
27%
NM
23%
NM
20%
NM
23%
NM
26%
NM
19%
NM
21%
NM
26%
NM
21%
NM
24%
NM
23%
NM
28%
NM
29%
NM
28%
NM
30%
NM
27%
NM
25%
NM
34%
NM
29%
MANT
NCI, Inc.
Dec
NM
NM
NM
NM
NM
NM
NM
11%
15%
12%
14%
12%
13%
13%
16%
20%
19%
18%
22%
25%
21%
16%
21%
20%
21%
18%
21%
17%
NCIT
SAIC, Inc.
Jan
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
SAIC
SRA International, Inc.
Jun
18%
16%
16%
14%
16%
16%
17%
16%
18%
17%
18%
18%
17%
16%
18%
16%
19%
18%
19%
20%
20%
18%
20%
20%
19%
19%
18%
19%
Stanley, Inc .
Mar
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
26%
24%
19%
24%
25%
21%
23%
24%
22%
25%
17%
15%
17%
17%
17%
17%
18%
18%
VSE Corporation
Dec
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
Notes:
BAH, CACI, ICFI, LDOS, MANT, NCIT, and SAIC are followed by this analyst, and data may be adjusted from what is in the SEC filings.
For all other companies, information is derived from SEC filings and press releases.
Sourc e: Wells Fargo Securities, LLC, FactSet, and company reports
SRX
SXE
VSEC
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
NM
Leidos Holdings
2010
2011
Mar
Jun
2012
Sep
Dec
Jun
Sep
Dec
Jun
2014
Jun
$9,838
$9,682
7,600
7,300
7,100
8,700
CACI
NA
NA
NA
NA
DRCO
NA
NA
NA
NA
NA
EGL
NA
NA
NA
NA
NA
GTEC
Mar
Jun
Sep
Dec
Booz Allen Hamilton
Mar
$9,064
$9,013
$9,489
$11,047
CACI International Inc.
Jun
7,300
6,800
7,500
7,450
6,900
6,800
7,950
8,000
7,650
7,180
8,000
7,600
7,200
6,900
7,800
Dynamics Research Corporation
Dec
412
362
426
401
385
832
841
802
717
670
757
732
561
515
499
Engility
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Global Defense Technology & Systems Dec
590
644
791
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
$10,804 $10,234 $12,448 $16,676
Mar
Mar
FYE
$10,924 $11,208 $12,855 $12,215
Mar
2013
Company
Sep
Dec
$11,535 $10,856 $11,651 $10,367
Sep
$10,892 BAH
ICF International, Inc.
Dec
1,334
1,289
1,407
1,367
1,372
1,349
1,714
1,662
1,688
1,541
1,612
1,512
1,489
1,462
1,664
1,656
1,647
1,617
1,879
KEYW Corporation
Dec
NA
NA
NA
NA
285
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
ICFI
KEYW
Leidos Holdings
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
9,007
9,980
9,305
8,842
8,413
8,331
LDOS
ManTech International Corporation
Dec
4,600
4,500
4,900
4,900
4,700
4,100
4,400
4,700
4,300
4,000
7,000
6,500
6,100
5,300
5,400
3,900
3,800
3,800
3,500
MANT
NCI, Inc.
Dec
1,506
1,424
1,426
1,301
1,200
1,300
1,300
1,000
903
825
910
706
623
570
555
488
440
362
435
NCIT
SAIC, Inc.
Jan
NA
NA
NA
NA
NA
NA
NA
8,711
NA
NA
NA
7,764
NA
6,873
7,318
6,651
6,587
6,499
6,462
SAIC
SRA International, Inc.
Jun
4,764
4,450
5,000
4,840
4,510
3,482
NA
NA
3,859
3,595
3,987
3,888
3,638
3,300
3,686
3,679
3,362
3,500
3,552
SRX
Stanley, Inc.
Mar
2,106
2,142
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SXE
VSE Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
VSEC
Company
FYE
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
2014
Jun
Sep
Booz Allen Hamilton
Mar
$2,385
$2,528
$2,618
$3,123
$2,392
$2,450
$3,438
$2,971
$2,898
$2,576
$3,516
$3,152
$2,509
$2,192
$3,220
$2,498
$2,290
$2,347
$3,337
CACI International Inc.
Jun
1,900
1,900
2,500
2,200
1,940
1,800
2,520
2,190
2,040
1,970
2,450
2,100
1,900
1,700
2,100
1,800
1,600
1,600
2,100
CACI
Dynamics Research Corporation
Dec
172
151
158
134
117
162
214
183
152
151
182
164
131
103
137
NA
NA
NA
NA
DRCO
Engility
Funded Backlog (MM)
2010
2011
2012
2013
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
753
788
856
816
649
574
602
582
522
587
Global Defense Technology & Systems Dec
120
168
162
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
ICF International, Inc.
Dec
563
549
664
649
639
579
796
730
742
716
766
695
720
647
748
697
697
685
832
KEYW Corporation
Dec
NA
NA
NA
NA
92
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
BAH
EGL
GTEC
ICFI
KEYW
Leidos Holdings
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
2,896
2,998
2,998
3,098
2,885
2,686
LDOS
ManTech International Corporation
Dec
1,400
1,400
1,700
1,600
1,600
1,500
1,500
1,300
1,200
1,400
1,600
1,800
1,400
1,200
1,200
1,100
1,000
1,000
900
MANT
NCI, Inc.
Dec
261
230
330
302
227
254
268
220
203
196
249
212
162
142
163
195
159
125
165
NCIT
SAIC, Inc.
Jan
NA
NA
NA
NA
NA
NA
NA
2,056
NA
NA
NA
1,953
NA
1,664
1,989
1,639
1,596
1,751
2,036
SAIC
SRA International, Inc.
Jun
922
772
1,100
1,000
769
779
NA
NA
877
777
965
907
849
704
930
792
731
667
867
SRX
SXE
Stanley, Inc.
Mar
344
317
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
VSE Corporation
Dec
457
491
493
407
357
310
305
282
299
275
297
250
264
238
268
236
205
178
194
Government Services: Market Space Firming
75
Exhibit 39. Backlog Analysis - continued
Total Backlog (MM)
VSEC
Funded Backlog (% of Total Backlog)
FYE
Mar
Jun
2010
Sep
Dec
Mar
Jun
2011
Sep
Dec
Mar
Jun
2012
Sep
Dec
Mar
Jun
2013
Sep
Dec
Mar
2014
Jun
Sep
Booz Allen Hamilton
Dec
26%
28%
28%
28%
22%
22%
27%
24%
27%
25%
28%
19%
22%
20%
28%
24%
23%
24%
31%
CACI International Inc.
Jun
26%
28%
33%
30%
28%
26%
32%
27%
27%
27%
31%
28%
26%
25%
27%
24%
22%
23%
24%
Engility
Dec
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
Dynamics Research Corporation
BAH
CACI
EGL
Dec
42%
42%
37%
33%
30%
19%
25%
23%
21%
22%
24%
22%
23%
20%
27%
NM
NM
NM
NM
DRCO
Global Defense Technology & Systems Dec
20%
26%
20%
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
GTEC
ICF International, Inc.
Dec
42%
43%
47%
47%
47%
43%
46%
44%
44%
46%
47%
46%
48%
44%
45%
42%
42%
42%
44%
KEYW Corporation
Dec
NM
NM
NM
NM
32%
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
KEYW
LDOS
ICFI
Leidos Holdings
Jan
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
32%
30%
32%
35%
34%
32%
ManTech International Corporation
Dec
30%
31%
35%
33%
34%
37%
34%
28%
28%
35%
23%
28%
23%
23%
22%
28%
26%
26%
26%
MANT
NCI, Inc.
Dec
17%
16%
23%
23%
19%
20%
21%
22%
22%
24%
27%
30%
26%
25%
29%
40%
36%
35%
38%
NCIT
SAIC, Inc.
Jan
NM
NM
NM
NM
NM
NM
NM
24%
NM
NM
NM
25%
NM
24%
27%
25%
24%
27%
32%
SAIC
SRA International, Inc.
Jun
19%
17%
22%
21%
17%
22%
NM
NM
23%
22%
24%
23%
23%
21%
25%
22%
22%
19%
24%
SRX
Stanley, Inc.
Mar
16%
15%
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
SXE
VSE Corporation
Dec
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
NM
VSEC
Notes:
BAH, CACI, ICFI, LDOS, MANT, NCIT, and SAIC are followed by this analyst, and data may be adjusted from what is in the SEC filings.
For all other companies, information is derived from SEC filings and press releases.
Source: Wells Fargo Securities, LLC, FactSet, and company reports
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
Company
Total Backlog (Yr/Yr % Change)
Company
FYE
2007
2008
NA
2009
2014
(1%)
7%
6%
(4%)
2010
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
(15%)
NA
57%
28%
31%
24%
3%
NA
11%
NA
NA
NA
(13%)
26%
32%
21%
BAH
NA
NA
CACI
Mar
NA
Jun
39%
Dynamics Research Corporation
Dec
NA
NA
NA
(8%)
100%
(9%)
NA
NA
NA
NA
NA
NA
NA
NA
NA
(8%)
Engility
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
EGL
Global Defense Technology & Systems Dec
NA
NA
34%
24%
NA
NA
NA
NA
NA
NA
34%
21%
30%
(2%)
24%
NA
GTEC
67%
10%
NA
46%
56%
72%
67%
6%
(2%)
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
KEYW
NA
NA
NA
NA
NA
NA
NA
NA
LDOS
(13%)
ICF International, Inc.
Dec
(15%)
(1%)
KEYW Corporation
Dec
NA
NA
0%
Leidos Holdings
Jan
(1%)
(100%)
ManTech International Corporation
Dec
13%
23%
(4%)
29%
NCI, Inc.
Dec
24%
57%
26%
(13%)
SAIC, Inc.
Jan
NA
NA
NA
SRA International, Inc.
Jun
3%
13%
5%
Stanley, Inc.
Mar
18%
78%
13%
VSE Corporation
Dec
NA
NA
NA
2007
2008
2009
NA
NA
NA
(7%)
NA
10%
4%
NA
21%
2013
Booz Allen Hamilton
11%
24%
2009
2012
CACI International Inc.
9%
NA
Fiscal Year
2010
2011
NA
22%
NA
11%
(9%)
NA
0%
4%
4%
(4%)
38%
(40%)
NA
18%
13%
(11%)
(4%)
13%
16%
30%
29%
(23%)
(29%)
(31%)
NA
19%
13%
15%
26%
26%
27%
13%
(13%)
NA
NA
NA
NA
NA
NA
NA
(4%)
(16%)
(8%)
4%
8%
6%
8%
NA
NA
NA
NA
5%
9%
13%
13%
10%
10%
1%
(5%)
(1%)
NA
NA
NA
NA
Sep
Dec
Mar
Jun
NA
NA
NA
NA
13%
NA
NA
NA
NA
NA
NA
2012
2013
2014
Mar
Jun
4%
6%
NA
9%
DRCO
IT & BPO Services
76
Exhibit 39. Backlog Analysis - continued
ICFI
MANT
NCIT
SAIC
SRX
NA
NA
SXE
NA
NA
VSEC
Sep
Dec
Funded Backlog (Yr/Yr % Change)
Fiscal Year
2010
2011
2009
2010
Company
FYE
Booz Allen Hamilton
Mar
NA
NA
NA
6%
(5%)
21%
(13%)
(9%)
NA
28%
18%
4%
6%
18%
21%
15%
CACI International Inc.
Jun
22%
17%
14%
19%
(5%)
9%
(14%)
(6%)
NA
14%
13%
17%
19%
19%
30%
26%
CACI
Engility
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
EGL
Dynamics Research Corporation
Dec
25%
26%
(11%)
NA
NA
25%
20%
NA
NA
NA
NA
NA
NA
NA
NA
(5%)
NA
NA
NA
NA
NA
Global Defense Technology & Systems Dec
NA
8%
(16%)
(11%)
57%
NA
26%
21%
13%
NA
NA
NA
NA
(6%)
5%
Dec
(32%)
(18%)
KEYW Corporation
Dec
NA
NA
Leidos Holdings
Jan
23%
(100%)
ManTech International Corporation
Dec
24%
56%
(7%)
45%
NCI, Inc.
Dec
54%
24%
7%
21%
SAIC, Inc.
Jan
NA
NA
NA
SRA International, Inc.
Jun
17%
13%
13%
1%
Stanley, Inc.
Mar
40%
33%
14%
1%
VSE Corporation
Dec
36%
39%
(16%)
(14%)
NA
(5%)
NA
0%
NA
9%
3%
(16%)
DRCO
38%
57%
NA
GTEC
17%
26%
13%
23%
19%
21%
ICFI
NA
NA
NA
NA
NA
NA
KEYW
NA
NA
NA
NA
NA
NA
LDOS
MANT
(19%)
38%
(39%)
NA
16%
(2%)
6%
(7%)
27%
44%
33%
45%
(27%)
(4%)
(8%)
NA
21%
31%
15%
7%
5%
12%
24%
21%
NCIT
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SAIC
NA
NA
(0%)
(9%)
(5%)
3%
13%
(1%)
5%
14%
1%
32%
18%
SRX
NA
NA
NA
NA
14%
14%
2%
9%
1%
(10%)
NA
NA
SXE
(31%)
(11%)
(6%)
NA
(3%)
(20%)
(15%)
(16%)
(18%)
(8%)
(17%)
(14%)
Notes:
Source: Wells Fargo Securities, LLC, FactSet, and company reports
21%
(1%)
1%
BAH, CACI, ICFI, LDOS, MANT, NCIT, and SAIC are followed by this analyst, and data may be adjusted from what is in the SEC filings.
For all other companies, information is derived from SEC filings and press releases.
8%
(17%)
1%
1%
1%
5%
4%
(11%)
VSEC
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
ICF International, Inc.
37%
BAH
Total Backlog (Yr/Yr % Change)
2011
2012
2013
Sep
Dec
Mar
2014
Jun
Sep
(6%)
(38%)
(15%)
(11%)
(7%)
BAH
NA
NA
NA
NA
NA
CACI
(23%)
(34%)
NA
NA
NA
NA
DRCO
NA
NA
NA
NA
NA
NA
NA
EGL
NA
NA
NA
NA
NA
NA
NA
NA
GTEC
ICFI
Company
FYE
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Booz Allen Hamilton
Mar
21%
18%
16%
11%
(1%)
(9%)
(3%)
37%
CACI International Inc.
Jun
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Dynamics Research Corporation
Dec
(6%)
130%
(19%)
(10%)
(9%)
(22%)
Engility
Dec
NA
NA
NA
NA
NA
NA
NA
NA
Global Defense Technology & Systems Dec
NA
NA
NA
NA
NA
NA
NA
3%
97%
5%
100%
86%
Mar
7%
Jun
6%
ICF International, Inc.
Dec
22%
22%
23%
14%
(6%)
(9%)
(12%)
(5%)
10%
11%
11%
13%
KEYW Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
3%
NA
NA
NA
NA
KEYW
Leidos Holdings
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
LDOS
ManTech International Corporation
Dec
2%
(9%)
(10%)
(4%)
(9%)
(2%)
59%
38%
42%
33%
(23%)
(40%)
(38%)
(28%)
(35%)
MANT
NCI, Inc.
Dec
(20%)
(9%)
(9%)
(23%)
(25%)
(37%)
(30%)
(29%)
(31%)
(31%)
(39%)
(31%)
(29%)
(36%)
(22%)
NCIT
SAIC, Inc.
Jan
NA
NA
NA
NA
NA
NA
SAIC
SRA International, Inc.
Jun
(5%)
NA
NA
NA
(14%)
Stanley, Inc.
Mar
NA
NA
NA
NA
NA
VSE Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SRX
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SXE
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
VSEC
Dec
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
2014
Jun
Sep
3%
Government Services: Market Space Firming
77
Exhibit 39. Backlog Analysis - continued
Funded Backlog (Yr/Yr % Change)
2011
2012
2013
Company
FYE
Mar
Jun
Sep
Booz Allen Hamilton
Mar
(5%)
(6%)
10%
8%
21%
5%
2%
6%
(13%)
(15%)
(8%)
(21%)
(9%)
7%
CACI International Inc.
Jun
2%
(5%)
1%
(0%)
5%
9%
(3%)
(4%)
(7%)
(14%)
(14%)
(14%)
(16%)
(6%)
Engility
Dec
NA
NA
NA
NA
NA
(14%)
(27%)
(30%)
(29%)
(20%)
Dynamics Research Corporation
Dec
(32%)
Global Defense Technology & Systems Dec
NA
NA
7%
NA
5%
4%
NA
CACI
NA
NA
NA
35%
37%
30%
(7%)
(15%)
(11%)
(14%)
(32%)
(25%)
NA
NA
NA
NA
DRCO
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
GTEC
11%
ICFI
ICF International, Inc.
Dec
14%
20%
13%
16%
24%
(4%)
(5%)
(3%)
(10%)
(2%)
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
KEYW
Leidos Holdings
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
LDOS
ManTech International Corporation
Dec
14%
7%
(12%)
(19%)
(25%)
(7%)
7%
38%
17%
(14%)
(25%)
(39%)
(29%)
(17%)
(25%)
NCI, Inc.
Dec
(13%)
10%
(19%)
(27%)
(11%)
(23%)
(7%)
(4%)
(20%)
(28%)
(35%)
(8%)
(2%)
(12%)
1%
SAIC, Inc.
Jan
NA
NA
NA
NA
NA
SRA International, Inc.
Jun
(17%)
NA
NA
NA
14%
Stanley, Inc.
Mar
NA
NA
NA
NA
VSE Corporation
Dec
(22%)
(37%)
(38%)
(31%)
6%
MANT
NA
NA
(5%)
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SRX
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SXE
(16%)
(11%)
(3%)
(11%)
(12%)
(13%)
(10%)
(6%)
(22%)
(25%)
(28%)
Notes:
SAIC
VSEC
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
NCIT
(0%)
BAH, CACI, ICFI, LDOS, MANT, NCIT, and SAIC are followed by this analyst, and data may be adjusted from what is in the SEC filings.
Source: Wells Fargo Securities, LLC, FactSet, and company reports
(3%)
EGL
KEYW Corporation
For all other companies, information is derived from SEC filings and press releases.
0%
2%
BAH
Fiscal Year
2007
2008
Company
FYE
2001
2002
2003
2004
2005
2006
2009
2010
2011
2012
2013
2014
Booz Allen Hamilton
Mar
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
CACI International Inc.
Jun
NA
2,800
4,800
7,400
13,000
13,000
13-14,000
15,000+
NA
NA
NA
NA
NA
NA
CACI
Dynamics Research Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
DRCO
Engility
BAH
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
EGL
Global Defense Technology & Systems Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
GTEC
ICF International, Inc.
Dec
NA
NA
NA
NA
NA
NA
1,000
1,670
2,000
2,700
2,700
2,900
3,500
NA
ICFI
KEYW Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
KEYW
ManTech International Corporation
Dec
NA
NA
5,000
5,000
7,000
7,800
10,000+
12,600
17,600
25,000
26,000
29,000
22,000
NA
MANT
NCI, Inc.
Dec
NA
NA
NA
NA
6,800
NA
NA
NA
NA
NA
NA
NA
NA
NA
NCIT
Leidos Holdings
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
LDOS
SAIC, Inc.
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SAIC
SRA International, Inc.
Jun
NA
NA
2,981
5,500
10,100
13,300
18,900
28,300
31,500
38,200
NA
NA
NA
NA
SRX
Stanley, Inc.
Mar
NA
NA
NA
NA
NA
NA
2,000
3,000+
6,000
NA
NA
NA
NA
NA
SXE
VSE Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
VSEC
Company
FYE
2001
2002
2003
2004
2005
2006
2009
2010
2011
2012
2013
2014
Booz Allen Hamilton
Mar
NA
NA
NA
NA
NA
NA
NA
88%
86%
87%
89%
90%
91%
91%
CACI International Inc.
Jun
88%
90%
87%
86%
85%
83%
82%
82%
83%
85%
87%
88%
88%
89%
CACI
Dynamics Research Corporation
Dec
69%
66%
69%
74%
68%
67%
56%
63%
71%
73%
79%
83%
NA
NA
DRCO
Engility
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
EGL
Global Defense Technology & Systems Dec
NA
NA
NA
NA
NA
NA
NA
82%
88%
83%
NA
NA
NA
NA
GTEC
IT & BPO Services
78
Exhibit 40. Other Metrics
Pipeline (MM)
% Prime
Fiscal Year
2007
2008
BAH
ICF International, Inc.
Dec
NA
NA
NA
NA
NA
NA
94%
90%
85%
80%
86%
87%
86%
NA
ICFI
KEYW Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
KEYW
Leidos Holdings
Jan
NA
NA
NA
NA
NA
NA
NA
87%
88%
89%
89%
90%
NA
NA
LDOS
ManTech International Corporation
Dec
91%
91%
89%
86%
81%
68%
54%
48%
65%
76%
86%
90%
91%
NA
MANT
NCI, Inc.
Dec
NA
NA
55%
59%
66%
75%
81%
83%
84%
88%
90%
87%
90%
NA
NCIT
SAIC, Inc.
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SAIC
SRA International, Inc.
Jun
94%
96%
94%
91%
NA
NA
89%
87%
85%
88%
90%
91%
90%
91%
SRX
Stanley, Inc.
Mar
NA
NA
NA
NA
NA
80%
80%
77%
69%
69%
NA
NA
NA
NA
SXE
VSE Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
VSEC
Company
FYE
2001
2002
2003
2004
2005
2006
2009
2010
2011
2012
2013
2014
Booz Allen Hamilton
Mar
NA
NA
NA
NA
NA
NA
NA
NA
73
69
70
68
67
65
BAH
CACI International Inc.
Jun
NA
NA
NA
NA
NA
NA
NA
60
59
55
59
58
58
59
CACI
Dynamics Research Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
86
73
55
66
63
NA
NA
DRCO
Engility
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
78
73
NA
EGL
Global Defense Technology & Systems Dec
NA
NA
NA
NA
NA
NA
NA
75
82
94
NA
NA
NA
NA
GTEC
DSOs
ICF International, Inc.
Dec
NA
NA
NA
76
107
120
NA
84
90
83
84
80
72
NA
ICFI
KEYW Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
KEYW
Leidos Holdings
Jan
NA
NA
NA
NA
NA
NA
NA
73
68
69
68
70
67
77
LDOS
ManTech International Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
74
66
67
80
79
85
NA
MANT
NCI, Inc.
Dec
NA
NA
NA
NA
NA
NA
NA
83
81
71
76
79
74
NA
NCIT
SAIC, Inc.
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
57
60
SAIC
SRA International, Inc.
Jun
NA
NA
NA
NA
NA
NA
NA
77
75
72
69
64
64
54
SRX
Stanley, Inc.
Mar
NA
NA
NA
NA
NA
NA
NA
81
79
78
NA
NA
NA
NA
SXE
VSE Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
VSEC
Notes:
BAH, CACI, ICFI, LDOS, MANT, NCIT, and SAIC are followed by this analyst, and data may be adjusted from what is in the SEC filings.
For all other companies, information is derived from SEC filings and press releases.
Source: Wells Fargo Securities, LLC, FactSet, and company reports
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
Fiscal Year
2007
2008
2003
Dec
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
2008
Sep
Dec
Mar
Jun
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
BAH
7,400
8,000
10,000
12,000
13,000
> 14,000
> 10,000
NA
13,000
NA
NA
NA
13-14000
NA
NA
NA
15,000+
NA
NA
NA
NA
NA
NA
CACI
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
DRCO
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
EGL
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
GTEC
1,600
1,500
1,670
NA
NA
NA
Company
FYE
Mar
Jun
Sep
Dec
Mar
Jun
Booz Allen Hamilton
Mar
NA
NA
NA
NA
NA
NA
CACI International Inc.
Jun
4,300
4,800
5,000
6,400
6,600
Dynamics Research Corporation
Dec
NA
NA
NA
NA
NA
Engility
Dec
NA
NA
NA
NA
Global Defense Technology & Systems Dec
NA
NA
NA
NA
ICF International, Inc .
Dec
NA
NA
NA
NA
NA
NA
2004
Sep
NA
2005
NA
NA
NA
2006
NA
NA
NA
NA
2007
NA
NA
NA
NA
NA
1,000
1,200
KEYW Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
ManTech International Corporation
Dec
NA
4,000
4,500
5,000
NA
5,000
5,000
5,000
6,000
7,000
6,000
7,000
5,700
6,500
6,500
7,800
7,700
7,900
9,300
10,000+
11,000
NCI, Inc.
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
7,300
7,300
6,800
6,000
7,100
6,300
NA
NA
NA
NA
NA
NA
NA
NA
Leidos Holdings
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SAIC, Inc.
1,800
2009
Sep
2,400
1,940
Dec
2,000
ICFI
NA
NA
NA
NA
KEYW
12,800
13,000
16,000
17,600
MANT
NA
14,000
14,800
13,300
15,200
NCIT
NA
NA
NA
NA
NA
LDOS
SAIC
11,000+ 11,000+ 12,600
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SRA International, Inc.
Jun
2,990
2,981
3,500
4,300
5,100
5,500
6,400
6,100
7,500
10,100
10,700
11,800
12,500
13,300
11,500
12,500
16,000
18,900
21,500
23,700
23,800
28,300
25,900
32,100
35,000
31,500
30,700
34,200
Stanley, Inc.
Mar
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
1,800
1,900
1,900
2,000
2,200
2,200
2,800
3,000+
4,000
4,100+
4,500
6,000
6,000
6,000
6,000
VSE Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Company
FYE
Mar
Jun
Sep
Dec
Mar
Jun
Dec
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
2008
Sep
Dec
Mar
Jun
Booz Allen Hamilton
Mar
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
BAH
CACI International Inc.
Jun
90%
Dynamics Research Corporation
Dec
69%
Engility
Dec
Global Defense Technology & Systems Dec
SRX
SXE
VSEC
% Prime
2003
2005
2006
2007
2009
Sep
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
~90%
88%
87%
87%
86%
87%
87%
84%
82%
83%
83%
82%
83%
82%
82%
82%
83%
83%
81%
81%
82%
82%
83%
83%
83%
85%
84%
CACI
70%
71%
68%
71%
70%
73%
74%
70%
66%
68%
67%
67%
69%
67%
65%
57%
57%
51%
59%
54%
64%
68%
69%
72%
71%
70%
71%
DRCO
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
EGL
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
88%
89%
NA
88%
82%
GTEC
NA
NA
ICF International, Inc .
Dec
KEYW Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
KEYW
Leidos Holdings
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
LDOS
ManTech International Corporation
Dec
89%
90%
90%
87%
87%
86%
86%
83%
83%
79%
80%
75%
70%
64%
62%
55%
55%
55%
51%
50%
47%
45%
51%
59%
65%
67%
67%
MANT
NCI, Inc.
Dec
NA
NA
NA
NA
NA
NA
65%
63%
66%
66%
68%
68%
70%
78%
80%
78%
80%
82%
84%
84%
83%
84%
84%
84%
84%
84%
84%
NCIT
SAIC, Inc.
NA
NA
2004
Sep
NA
NA
NA
~89%
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
ICFI
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SAIC
SRA International, Inc.
Jun
93%
91%
92%
91%
91%
88%
86%
87%
87%
86%
84%
88%
88%
89%
90%
89%
89%
89%
88%
88%
87%
86%
86%
85%
85%
84%
86%
86%
SRX
Stanley, Inc.
Mar
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
81%
79%
81%
78%
81%
81%
80%
74%
77%
77%
79%
78%
68%
66%
65%
67%
69%
69%
SXE
VSE Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
VSEC
Company
FYE
Mar
Jun
Sep
Dec
Mar
Jun
Dec
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
2008
Sep
Dec
Mar
Jun
Booz Allen Hamilton
Mar
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
73
NA
70
CACI International Inc.
Jun
NA
NA
80
86
84
88
83
82
76
70
69
73
68
74
74
72
67
66
68
74
67
60
62
64
61
59
59
62
Government Services: Market Space Firming
79
Exhibit 40. Other Metrics - continued
Pipeline (MM)
DSOs
2003
2004
Sep
2005
2006
2007
2009
Sep
Dec
BAH
CACI
Dynamics Research Corporation
Dec
NA
NA
84
89
106
114
107
111
116
114
117
119
121
111
110
96
122
105
102
101
99
105
90
86
84
79
72
73
DRCO
Engility
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
EGL
Global Defense Technology & Systems Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
75
93
87
79
82
94
GTEC
Dec
90
ICFI
KEYW Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
KEYW
Leidos Holdings
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
69
69
70
67
66
69
73
64
70
73
73
66
69
68
68
64
70
69
LDOS
ManTech International Corporation
Dec
NA
NA
86
94
93
94
90
85
80
82
81
83
86
81
65
73
74
72
67
70
74
69
64
74
89
66
64
66
MANT
NCI, Inc.
Dec
NA
NA
NA
NA
NA
NA
NA
77
80
75
79
90
75
82
83
93
93
85
92
92
89
88
76
83
73
67
66
81
NCIT
Jan
NA
NA
SAIC
SAIC, Inc.
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
92
NA
83
NA
75
NA
80
NA
84
NA
84
NA
87
NA
90
NA
NA
NA
NA
NA
NA
NA
NA
NA
Jun
NA
NA
80
78
76
74
72
75
75
74
76
80
84
81
76
76
77
69
69
75
79
77
79
82
80
75
76
84
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
84
90
79
78
72
75
78
81
77
86
81
83
80
78
79
84
79
76
SXE
VSE Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
VSEC
Source: Wells Fargo Securities, LLC, FactSet, and company reports
NA
NA
Mar
Notes:
NA
NA
Stanley, Inc.
For all other companies, information is derived from SEC filings and press releases.
NA
NA
SRA International, Inc.
BAH, CACI, ICFI, LDOS, MANT, NCIT, and SAIC are followed by this analyst, and data may be adjusted from what is in the SEC filings.
NA
NA
NA
SRX
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
ICF International, Inc .
Company
FYE
Mar
Jun
Booz Allen Hamilton
Mar
NA
NA
CACI International Inc.
Jun
NA
Dynamics Research Corporation
Dec
Engility
2010
Sep
Dec
Mar
Jun
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Dec
NA
NA
NA
Global Defense Technology & Systems Dec
NA
NA
2011
Sep
Dec
Mar
Jun
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
2012
Sep
Dec
Mar
2014
Jun
Sep
NA
NA
NA
NA
NA
BAH
NA
NA
NA
NA
NA
NA
CACI
NA
NA
NA
NA
NA
NA
NA
DRCO
NA
NA
NA
NA
NA
NA
NA
NA
EGL
NA
NA
NA
NA
NA
NA
NA
NA
NA
GTEC
Dec
Mar
Jun
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
2013
Sep
ICF International, Inc.
Dec
2,300
2,900
2,900
2,700
2,600
2,900
2,300
2,700
3,000
3,200
2,700
2,900
3,000
3,600
3,200
3,500
3,800
3,700
3,300
KEYW Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
IT & BPO Services
80
Exhibit 40. Other Metrics - continued
Pipeline (MM)
ICFI
KEYW
ManTech International Corporation
Dec
21,500
23,000
25,000
25,000
27,000
27,000
28,000
26,000
29,000
29,000
25,000
29,000
32,000
26,000
25,000
22,000
22,000
21,000
20,000 MANT
NCI, Inc.
Dec
15,000
14,000
16,000
16,000
18,000
17,000
15,000
11,000
9,000
10,000
10,500
9,000
8,000
9,000
10,000
10,000
12,000
12,000
10,000 NCIT
Leidos Holdings
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
LDOS
SAIC, Inc.
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SAIC
SRA International, Inc.
Jun
35,100
38,200
33,000
33,700
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SRX
Stanley, Inc.
Mar
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SXE
VSE Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
VSEC
Company
FYE
Mar
Jun
Dec
Mar
Jun
Dec
Mar
Jun
Dec
Mar
Jun
Dec
Mar
2014
Jun
Booz Allen Hamilton
Mar
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
BAH
CACI International Inc.
Jun
86%
85%
85%
87%
87%
88%
88%
88%
89%
89%
89%
88%
87%
89%
89%
90%
89%
89%
89%
CACI
Dynamics Research Corporation
Dec
72%
72%
73%
74%
74%
76%
82%
84%
85%
85%
83%
81%
80%
79%
79%
NA
NA
NA
NA
DRCO
Engility
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
EGL
Global Defense Technology & Systems Dec
82%
85%
83%
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
GTEC
ICF International, Inc.
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
ICFI
KEYW Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
KEYW
% Prime
2010
Sep
2011
Sep
2012
Sep
2013
Sep
Sep
Leidos Holdings
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
LDOS
ManTech International Corporation
Dec
73%
74%
78%
79%
82%
84%
88%
89%
89%
89%
91%
91%
92%
91%
91%
91%
90%
89%
89%
MANT
NCI, Inc.
Dec
83%
86%
90%
91%
90%
91%
89%
89%
87%
87%
87%
89%
90%
89%
90%
92%
93%
91%
91%
NCIT
SAIC, Inc.
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
95%
NA
NA
NA
NA
SAIC
SRA International, Inc.
Jun
88%
88%
88%
90%
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SRX
Stanley, Inc.
Mar
71%
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SXE
VSE Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
VSEC
DSOs
FYE
Mar
Jun
Booz Allen Hamilton
Mar
69
NA
CACI International Inc.
Jun
59
Dynamics Research Corporation
Dec
Engility
2010
Sep
Dec
Mar
Jun
67
68
68
69
55
59
58
54
68
65
61
55
Dec
NA
NA
NA
Global Defense Technology & Systems Dec
91
81
ICF International, Inc.
Dec
86
KEYW Corporation
Dec
NA
2011
Sep
Dec
Mar
2014
Jun
Sep
66
66
60
63
59
BAH
58
65
67
62
59
61
CACI
69
64
62
NA
NA
NA
NA
DRCO
78
89
83
77
73
77
70
NA
EGL
NA
NA
NA
NA
NA
NA
NA
NA
NA
GTEC
83
78
80
80
77
73
72
81
80
77
ICFI
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
KEYW
LDOS
Dec
Mar
Jun
68
69
65
69
52
58
61
63
66
63
63
60
NA
NA
NA
NA
94
NA
NA
NA
74
77
83
84
NA
NA
NA
NA
2012
Sep
Dec
Mar
Jun
57
63
61
65
58
57
59
61
68
63
60
59
NA
NA
NA
NA
NA
NA
NA
NA
78
77
88
88
NA
NA
NA
NA
2013
Sep
Leidos Holdings
Jan
69
65
69
68
72
74
71
69
70
63
61
67
69
NA
75
77
76
76
73
ManTech International Corporation
Dec
75
63
69
67
80
65
66
71
76
73
66
79
76
76
78
85
79
80
75
MANT
NCI, Inc.
Dec
74
64
70
71
73
73
70
76
79
66
54
64
78
69
66
74
68
66
67
NCIT
SAIC, Inc.
Jan
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
57
NA
63
67
60
56
61
57
SAIC
SRA International, Inc.
Jun
79
72
71
73
71
69
NA
70
70
64
56
63
60
64
60
66
63
54
53
SRX
Stanley, Inc.
Mar
78
77
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
SXE
VSE Corporation
Dec
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
VSEC
Notes:
BAH, CACI, ICFI, LDOS, MANT, NCIT, and SAIC are followed by this analyst, and data may be adjusted from what is in the SEC filings.
For all other companies, information is derived from SEC filings and press releases.
Source: Wells Fargo Securities, LLC, FactSet, and company reports
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
Company
Government Services: Market Space Firming
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
Required Disclosures
To view price charts for all companies rated in this document, please go to
https://www.wellsfargo.com/research or send an email to: [email protected]
Additional Information Available Upon Request
I certify that:
1) All views expressed in this research report accurately reflect my personal views about any and all of the subject securities or
issuers discussed; and
2) No part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed
by me in this research report.
ƒ Wells Fargo Securities, LLC maintains a market in the common stock of ICF International, Inc., Booz Allen Hamilton Holding
Corporation, NCI, Inc., Leidos Holdings, Inc., CACI International Inc., ManTech International Corporation.
ƒ Wells Fargo Securities, LLC or its affiliates intends to seek or expects to receive compensation for investment banking services in
the next three months from ManTech International Corporation, CACI International Inc., Leidos Holdings, Inc., NCI, Inc.
ƒ Wells Fargo Securities, LLC and/or its affiliates, have beneficial ownership of 1% or more of any class of the common stock of
NCI, Inc.
ƒ Leidos Holdings, Inc. currently is, or during the 12-month period preceding the date of distribution of the research report was, a
ƒ
ƒ
ƒ
ƒ
client of Wells Fargo Securities, LLC. Wells Fargo Securities, LLC provided noninvestment banking securities-related services to
Leidos Holdings, Inc.
An affiliate of Wells Fargo Securities, LLC has received compensation for products and services other than investment banking
services from CACI International Inc., ManTech International Corporation in the past 12 months.
Wells Fargo Securities, LLC received compensation for products or services other than investment banking services from Leidos
Holdings, Inc. in the past 12 months.
Wells Fargo Securities, LLC or its affiliates has a significant financial interest in Leidos Holdings, Inc., ManTech International
Corporation, CACI International Inc.
Wells Fargo Securities, LLC or its affiliates intends to seek or expects to receive compensation for investment banking services in
the next three months from an affiliate of Leidos Holdings, Inc., Science Applications International Corp.
BAH: In our view, uneven timing of government client spending decisions is the biggest risk to consistently executing on the
financial model. In addition, BAH, in general, has higher priced offering, potentially putting them at risk given the current intense
focus on price by their government clients. BAH also has notable financial leverage.
CACI: Risks include continued slow client funding, intensified competition, sustained pricing pressure, and integration risk around
the large Six3 deal.
ICFI: Risks to our valuation range include the uneven timing and uncertain outlook of federal government funding, M&A
integration, and increasing competition as the company moves further into newer commercial and international markets.
LDOS: Risks include continued sensitivity to federal spending including intense price pressure, and challenges in the commercial
health and energy businesses.
MANT: Risks include exposure and uncertain timing of in-theatre support contracts , acquisition integration, concentrated
ownership with two classes of stock impacting voting power, and the vagaries of having the U.S. federal government as a client.
NCIT: Risks include the uneven and uncertain timing of government funding, continuing DoD budget funding pressure, and
acquisition integration risk given management's stated intent to again pursue M&A. In addition, NCIT still faces declines in their
core revenue base given the increasingly competitive, and price sensitive, market. Also, the founder owns about 37% of the company
and controls about 85% of the voting rights limiting interest by strategic investors.
SAIC: Risks include pressure on federal government spending including that caused by Sequestration, intense price pressure, and
the need to mature a new management team and operating model.
Wells Fargo Securities, LLC does not compensate its research analysts based on specific investment banking transactions.
Wells Fargo Securities, LLC’s research analysts receive compensation that is based upon and impacted by the overall profitability
and revenue of the firm, which includes, but is not limited to investment banking revenue.
81
IT & BPO Services
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
STOCK RATING
1=Outperform: The stock appears attractively valued, and we believe the stock's total return will exceed that of the market over the
next 12 months. BUY
2=Market Perform: The stock appears appropriately valued, and we believe the stock's total return will be in line with the market
over the next 12 months. HOLD
3=Underperform: The stock appears overvalued, and we believe the stock's total return will be below the market over the next 12
months. SELL
SECTOR RATING
O=Overweight: Industry expected to outperform the relevant broad market benchmark over the next 12 months.
M=Market Weight: Industry expected to perform in-line with the relevant broad market benchmark over the next 12 months.
U=Underweight: Industry expected to underperform the relevant broad market benchmark over the next 12 months.
VOLATILITY RATING
V = A stock is defined as volatile if the stock price has fluctuated by +/-20% or greater in at least 8 of the past 24 months or if the
analyst expects significant volatility. All IPO stocks are automatically rated volatile within the first 24 months of trading.
As of: January 28, 2015
44% of companies covered by Wells Fargo Securities, LLC
Equity Research are rated Outperform.
Wells Fargo Securities, LLC has provided investment banking
services for 44% of its Equity Research Outperform-rated
companies.
54% of companies covered by Wells Fargo Securities, LLC
Equity Research are rated Market Perform.
Wells Fargo Securities, LLC has provided investment banking
services for 30% of its Equity Research Market Perform-rated
companies.
2% of companies covered by Wells Fargo Securities, LLC
Equity Research are rated Underperform.
Wells Fargo Securities, LLC has provided investment banking
services for 28% of its Equity Research Underperform-rated
companies.
Important Disclosure for International Clients
EEA--The securities and related financial instruments described herein may not be eligible for sale in all jurisdictions or to certain
categories of investors. For recipients in the EEA, this report is distributed by Wells Fargo Securities International Limited
(“WFSIL”). WFSIL is a U.K. incorporated investment firm authorized and regulated by the Financial Conduct Authority. For the
purposes of Section 21 of the UK Financial Services and Markets Act 2000 (“the Act”), the content of this report has been approved
by WFSIL a regulated person under the Act. WFSIL does not deal with retail clients as defined in the Markets in Financial
Instruments Directive 2007. The FCA rules made under the Financial Services and Markets Act 2000 for the protection of retail
clients will therefore not apply, nor will the Financial Services Compensation Scheme be available. This report is not intended for,
and should not be relied upon by, retail clients.
82
Government Services: Market Space Firming
WELLS FARGO SECURITIES, LLC
EQUITY RESEARCH DEPARTMENT
Australia--Wells Fargo Securities, LLC is exempt from the requirements to hold an Australian financial services license in respect
of the financial services it provides to wholesale clients in Australia. Wells Fargo Securities, LLC is regulated under U.S. laws which
differ from Australian laws. Any offer or documentation provided to Australian recipients by Wells Fargo Securities, LLC in the
course of providing the financial services will be prepared in accordance with the laws of the United States and not Australian laws.
Canada--This report is distributed in Canada by Wells Fargo Securities Canada, Ltd., a registered investment dealer in Canada and
member of the Investment Industry Regulatory Organization of Canada (IIROC) and Canadian Investor Protection Fund (CIPF).
This report has not been prepared subject to Canadian disclosure requirements.
Hong Kong--This report is issued and distributed in Hong Kong by Wells Fargo Securities Asia Limited (“WFSAL”), a Hong Kong
incorporated investment firm licensed and regulated by the Securities and Futures Commission of Hong Kong (“the SFC”) to carry
on types 1, 4, 6 and 9 regulated activities (as defined in the Securities and Futures Ordinance (Cap. 571 of The Laws of Hong Kong),
“the SFO”). This report is not intended for, and should not be relied on by, any person other than professional investors (as defined
in the SFO). Any securities and related financial instruments described herein are not intended for sale, nor will be sold, to any
person other than professional investors (as defined in the SFO). The author or authors of this report is or are not licensed by the
SFC. Professional investors who receive this report should direct any queries regarding its contents to Mark Jones at WFSAL (email:
[email protected] ).
Japan--This report is distributed in Japan by Wells Fargo Securities (Japan) Co., Ltd, registered with the Kanto Local Finance
Bureau to conduct broking and dealing of type 1 and type 2 financial instruments and agency or intermediary service for entry into
investment advisory or discretionary investment contracts. This report is intended for distribution only to professional investors
(Tokutei Toushika) and is not intended for, and should not be relied upon by, ordinary customers (Ippan Toushika).
The ratings stated on the document are not provided by rating agencies registered with the Financial Services Agency of Japan
(JFSA) but by group companies of JFSA-registered rating agencies. These group companies may include Moody’s Investors Services
Inc., Standard & Poor’s Rating Services and/or Fitch Ratings. Any decisions to invest in securities or transactions should be made
after reviewing policies and methodologies used for assigning credit ratings and assumptions, significance and limitations of the
credit ratings stated on the respective rating agencies’ websites.
About Wells Fargo Securities
Wells Fargo Securities is the trade name for the capital markets and investment banking services of Wells Fargo & Company and its
subsidiaries, including but not limited to Wells Fargo Securities, LLC, a U.S. broker-dealer registered with the U.S. Securities and
Exchange Commission and a member of NYSE, FINRA, NFA and SIPC, Wells Fargo Institutional Securities, LLC, a member of
FINRA and SIPC, Wells Fargo Prime Services, LLC, a member of FINRA, NFA and SIPC, Wells Fargo Securities Canada, Ltd., a
member of IIROC and CIPF, Wells Fargo Bank, N.A. and Wells Fargo Securities International Limited, authorized and regulated by
the Financial Conduct Authority.
This report is for your information only and is not an offer to sell, or a solicitation of an offer to buy, the securities or instruments
named or described in this report. Interested parties are advised to contact the entity with which they deal, or the entity that
provided this report to them, if they desire further information. The information in this report has been obtained or derived from
sources believed by Wells Fargo Securities, LLC, to be reliable, but Wells Fargo Securities, LLC does not represent that this
information is accurate or complete. Any opinions or estimates contained in this report represent the judgment of
Wells Fargo Securities, LLC, at this time, and are subject to change without notice. For the purposes of the U.K. Financial Conduct
Authority's rules, this report constitutes impartial investment research. Each of Wells Fargo Securities, LLC and
Wells Fargo Securities International Limited is a separate legal entity and distinct from affiliated banks. Copyright © 2015
Wells Fargo Securities, LLC.
SECURITIES: NOT FDIC-INSURED/NOT BANK-GUARANTEED/MAY LOSE VALUE
83
Diane Schumaker-Krieg
Sam J. Pearlstein
Co-Head of Equity Research 212-214-5054
[email protected]
Global Head of Research, Economics & Strategy
212-214-5070 / 704-410-1801
[email protected]
Paul Jeanne, CFA, CPA
Associate Director of Research
443-263-6534 / 212-214-8054
[email protected]
212-214-5051
212-214-5029
212-214-8064
212-214-8050
314-875-2042
212-214-8018
415-947-5470
415-396-4328
212-214-5015
212-214-5028
617-603-4260
415-396-3873
314-875-2041
314-875-2556
314-875-2557
617-603-4314
617-603-4315
617-603-4207
212-214-5072
212-214-8065
415-396-3938
415-222-1159
415-396-3194
212-214-8024
212-214-5024
ENERGY
Exploration & Production
David R. Tameron
Gord0n Douthat, CFA
Jamil Bhatti, CFA
Richard Vidal
Master Limited Partnerships
Michael J. Blum
Sharon Lui, CPA
Praneeth Satish
Eric Shiu
Ned Baramov, CFA
Nicholas Daly
Sam Dubinsky
Amir Chaudhri
Utilities
Neil Kalton, CFA
Sarah Akers, CFA
Jonathan Reeder
Glen F. Pruitt
Peter Flynn
Oilfield Services and Drilling
Matthew D. Conlan, CFA
Oilfield Services and Equipment
Judson E. Bailey, CFA
Daniel Cruise
Coleman W. Sullivan, CFA
David Cheng
Lisa Hausner
Global Head of Publishing
443-263-6522
[email protected]
ENERGY--CONT.
CONSUMER
Beverage/Convenience Stores/Tobacco
Bonnie Herzog
Jessica Gerberi, CFA
Adam Scott
Cosmetics, Household & Personal Care
Chris Ferrara, CFA, CPA
Joe Lachky, CFA
Zachary Fadem, CPA
Education
Trace A. Urdan
Jeffrey Lee
Food
John Baumgartner, CFA
Mariya Morgaylo
Homebuilding/Building Products
Adam Rudiger, CFA
Joey Matthews, CPA
Leisure
Timothy Conder, CPA
Karen Tan
Marc J. Torrente
Restaurants & Foodservice
Jeff Farmer, CFA
Imran Ali
Jordan Kohn
Retail
Paul Lejuez, CFA, CPA, CFP
Tracy Kogan
Matt Nemer
Omair Asif
Maren Kasper
Evren Kopelman, CFA
Connie Wang
Todd M. Wickwire
Co-Head of Equity Research 410-625-6393
[email protected]
303-863-6891
303-863-6920
303-863-6880
303-863-6816
212-214-5037
212-214-5035
212-214-8056
212-214-5038
212-214-8021
212-214-8012
212-214-5043
212-214-5045
314-875-2051
314-875-2040
314-875-2052
314-875-2047
314-875-2049
212-214-5044
713-577-2514
713-577-2515
713-577-2510
713-577-2516
International E&Ps/Independent Refiners
Roger D. Read
Lauren Hendrix
713-577-2542
713-577-2543
FINANCIAL SERVICES
BDCs
Jonathan Bock, CFA
Gregory Nelson
Finian P. O’Shea
Brokers/Exchanges/Asset Managers
Christopher Harris, CFA
Andrew Bond
Robert Ryan, CFA
Insurance
John Hall
Elyse Greenspan, CFA
Kenneth Hung, CFA, ASA
Rashmi H. Patel, CFA
Specialty Finance
Joel J. Houck, CFA
Vivek Agrawal
Charles Nabhan
Max Maier
U.S. Banks
Matt H. Burnell
Jason Harbes, CFA
Jared Shaw
Timur Braziler
443-263-6410
704-410-2197
704-410-1990
443-263-6513
443-263-6526
212-214-5025
212-214-8032
212-214-8031
212-214-8023
212-214-8034
443-263-6521
443-263-6563
443-263-6578
443-263-6573
212-214-5030
212-214-8068
212-214-8028
212-214-5048
HEALTH CARE
Biotechnology
Brian C. Abrahams, M.D.
Matthew J. Andrews
Shin Kang, PhD
Ronald Hsu, M.D.
Healthcare Facilities
Gary Lieberman, CFA
Ryan Halsted
Healthcare IT & Distribution
Jamie Stockton, CFA
Stephen Lynch
Nathan Weissman
Life Science Tools, Services, & Diagnostics
Tim Evans
Luke E. Sergott
Managed Care/Ancillary Benefits
Peter H. Costa
Polly Sung, CFA
Brian Fitzgerald, CFA
Medical Technology
Larry Biegelsen
Lei Huang
Craig W. Bijou
David Y. Brill. M.D.
Pharmaceuticals
Michael Faerm
Gregory J. Renza, M.D.
212-214-8060
617-603-4218
212-214-5036
212-214-5064
212-214-8013
212-214-8022
901-271-5551
901-271-5552
901-271-5553
212-214-8010
212-214-8027
617-603-4222
617-603-4324
617-603-4277
212-214-8015
212-214-8039
212-214-8038
212-214-8042
212-214-8026
212-214-8057
INDUSTRIAL
TECHNOLOGY & SERVICES
Aerospace & Defense
Sam J. Pearlstein
Gary S. Liebowitz, CFA
Ronald Hou
Automotive/Electrical and Industrial Products
Rich Kwas, CFA
David H. Lim
Deepa Raghavan, CFA
Ronald Jewsikow
Chemicals
Frank J. Mitsch
Sabina Chatterjee
Containers & Packaging
Chris D. Manuel
Gabe S. Hajde
Diversified Industrials
Allison Poliniak-Cusic, CFA
Michael L. McGinn
Machinery
Andrew Casey
Justin Ward
Engineering & Construction
Justin Ward
Metals & Mining
Sam Dubinsky
Amir Chaudhri
Shipping, Equipment Leasing, & Marine MLPs
Michael Webber, CFA
Donald D. McLee
Transportation
Casey S. Deak
212-214-5054
212-214-5055
212-214-5056
410-625-6370
443-263-6565
443-263-6517
443-263-6449
212-214-5022
212-214-8049
216-643-2966
216-643-2967
212-214-5062
212-214-5052
617-603-4265
617-603-4268
617-603-4268
212-214-5043
212-214-5045
212-214-8019
212-214-8029
443-263-6579
MEDIA & TELECOMMUNICATIONS
Advertising
Peter Stabler
Steve Cho
415-396-4478
415-396-6056
Media & Cable
Marci R. Ryvicker, CFA, CPA
Eric Katz
Stephan Bisson
John Huh
212-214-5010
212-214-5011
212-214-8033
212-2148044
Satellite Communications
Andrew Spinola
212-214-5012
Telecommunication Services - Wireless/Wireline
Jennifer M. Fritzsche
312-920-3548
Caleb Stein
312-845-9797
Eric Luebchow
312-630-2386
REAL ESTATE, GAMING & LODGING
Gaming
Cameron McKnight
Rich Cummings
Tiffany Lee
Healthcare/Manufactured Housing/Self-Storage
Todd Stender
Philip DeFelice, CFA
Jason S. Belcher
Lodging/Multifamily/Retail
Jeffrey J. Donnelly, CFA
Dori Kesten
Robert LaQuaglia, CFA, CMT
Tamara Fique
Office/Industrial/Infrastructure
Brendan Maiorana, CFA
Young Ku, CFA
Blaine Heck, CFA
212-214-5046
212-214-8030
212-214-8066
Applied Technologies
Andrew Spinola
Communication Technology
Jess Lubert, CFA
Michael Kerlan
Gray Powell, CFA
Priya Parasuraman
E-commerce
Matt Nemer
Trisha Dill, CFA
Information & Business Services
William A. Warmington, Jr.
Bill DiJohnson
Internet
Peter Stabler
Steve Cho
Internet Infrastructure
Gray Powell, CFA
Priya Parasuraman
IT & BPO Services
Ed Caso, CFA
Richard Eskelsen, CFA
Tyler Scott
IT Hardware--Wireless Equipment
Maynard Um
Munjal Shah
Santosh Sankar
Semiconductors
David Wong, CFA, PhD
Amit Chanda
Parker Paulin
Software/Internet, Technology
Jason Maynard
Karen Russillo
Vilma Chuy
Kevin Ikeda
Transaction and Business Services
Timothy W. Willi
Robert Hammel
Alan Donatiello, CFA
212-214-5012
212-214-5013
212-214-8052
212-214-8048
617-603-4269
415-396-3938
312-920-3594
617-603-4283
617-603-4271
415-396-4478
415-396-6056
212-214-8048
617-603-4269
443-263-6524
410-625-6381
443-263-6540
212-214-8008
212-214-8061
212-214-8007
212-214-5007
314-875-2045
212-214-5066
415-947-5472
415-396-3505
415-396-3345
310-453-6660
314-875-2044
314-875-2053
314-875-2054
STRATEGY
Equity Strategy
Gina Martin Adams, CFA, CMT
Peter Chung
Strategic Indexing
Daniel A. Forth
212-214-8043
212-214-8063
704-410-3233
ECONOMICS
562-637-1371
443-263-6442
443-462-7354
Economists
John E. Silvia, PhD
Mark Vitner
Jay H. Bryson, PhD
Eugenio J. Alemán, PhD
Sam Bullard
Anika Khan
617-603-4262
617-603-4233
617-603-4263
443-263-6568
Retail Research Marketing
Colleen Hansen
704-410-3275
704-410-3277
704-410-3274
704-410-3273
704-410-3280
704-410-3271
RETAIL RESEARCH MARKETING
410-625-6378
443-263-6516
443-263-6564
443-263-6529
Wells Fargo Securities, LLC Institutional Sales Offices
Wells Fargo Securities, LLC
One Boston Place
Suite 2700
Boston, MA 02108
877-238-4491
Wells Fargo Securities, LLC
550 California Street
SAC Tower, 6th Floor, Suite 625
San Francisco, CA 94104-1004
Wells Fargo Securities, LLC
10 S. Wacker Drive
18th Floor
Chicago, IL 60606
312-345-1187
Wells Fargo Securities, LLC
375 Park Avenue
New York, NY 10152-0005
800-876-5670
Wells Fargo Securities International Limited
1 Plantation Place
30 Fenchurch Street
London, EC3M 3BD
44-207-962-2879
January 23, 2015
www.wellsfargoresearch.com
Copyright © 2015 Wells Fargo Securities, LLC

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