MCLEAN, Va., June 9, 2015 /PRNewswire/ -- Science Applications International Corporation (NYSE: SAIC), a leading technology integrator providing full lifecycle services and solutions in the technical, engineering and enterprise information technology markets, today announced financial results for the first quarter ended May 1, 2015. As previously announced, SAIC completed its acquisition of Scitor Holdings, Inc. (Scitor) on May 4, 2015 subsequent to the end of the quarter.

"We continue to see progress in our strategy execution with our third straight quarter of internal revenue growth. The recent Scitor acquisition further expands our market access and enhances our strong cash flow generation," said CEO Tony Moraco. "The increase in our quarterly dividend demonstrates confidence in our business model and underscores our commitment to our shareholders."

First Quarter: Summary Operating Results

Total revenues for the first quarter were $1,009 million compared to $977 million during the first quarter of the prior year. Total revenues increased due to higher volume on supply chain contracts and increased U.S. Department of Defense (DoD) material and subcontract revenues. Material and subcontract revenues were lower in the prior year period due to award and funding delays. These increases were partially offset by net decreases on other programs and a decrease in revenues performed by former parent due to the expected ramp down of pre-separation joint work.

Operating income for the quarter was $57 million, down from $59 million in the prior year quarter. The decrease was primarily driven by costs associated with the acquisition and integration of Scitor ($3 million) and net unfavorable changes in estimates on contracts accounted for under the percentage-of-completion method ($2 million).

The Scitor acquisition and integration costs of $3 million, as a discrete, current year expense, has been added back to operating income in the summary table for the calculation of adjusted operating income in order to aid comparison with the prior year period.

Net income for the quarter was $33 million compared to $34 million in the prior year quarter. Net income was slightly lower than the prior year due to lower operating income.

Diluted earnings per share was $0.69 for the quarter, which includes the impact of acquisition and integration costs of approximately $3 million, or $0.04 per share. The weighted-average diluted shares outstanding during the quarter was 47.6 million shares.

Cash Generation and Capital Deployment

Cash flow provided by operating activities for the quarter was $29 million representing a $5 million decline compared to the same period in the prior year. The current quarter decrease in operating cash is primarily due to prior year utilization of prepaid taxes and lower net income in the current quarter.

During the quarter, SAIC deployed $13 million in dividends. Subsequent to the quarter, SAIC acquired Scitor for $790 million plus working capital adjustments and funded the acquisition and related transaction costs of $30 million through additional borrowings of $670 million and cash on hand of $157 million.

Quarterly Dividend Declared, 10.7% Increase from Previous Quarterly Dividend

Subsequent to the quarter, the Board of Directors declared a regular quarterly cash dividend of $0.31 per share payable on July 30, 2015 to stockholders of record on July 15, 2015. The dividend represents a 10.7 percent increase from the previous quarterly dividend of $0.28 per share. SAIC intends to continue paying dividends on a quarterly basis, although the declaration of any future dividends will be determined by the Board of Directors each quarter and will depend on earnings, financial condition, capital requirements and other factors.

New Business Awards

Net bookings for the quarter were $1.0 billion, which reflects a book-to-bill ratio of approximately 1.0.

SAIC was awarded the following notable contracts during the quarter:

Federal Aviation Administration (FAA): SAIC was awarded new business through an indefinite delivery, indefinite quantity (IDIQ) contract by the FAA to provide all training and training program support services under the FAA Controller Training Contract. The single-award, firm-fixed price and time-and-material contract, which, in part, represents an expansion of our support of the FAA, has a three-year period of performance, two one-year options, and an estimated contract value if all options are exercised of $425 million and a maximum contract ceiling of $727 million. Under the contract, SAIC will provide support services to the FAA Academy and Air Traffic Control (ATC) Facilities to help fulfill controller training requirements. These services include program management support; classroom training; simulation and laboratory training; monitoring of student progress; training curriculum development, maintenance and revision; air traffic training program support; and administrative and innovation support. Work will be performed mainly in Oklahoma, Washington, D.C. as well as air traffic control sites nationwide.

Defense Logistics Agency (DLA): SAIC was awarded an IDIQ contract by the DLA to continue providing tailored logistics support for maintenance, repair and operations requirements at the DoD and other federal installations. The single-award, firm-fixed price contract has a five-year period of performance and an estimated total contract value of $165 million. The work will be performed in Arizona, California, Nevada and Utah.

Toyota Motor North America: SAIC was awarded a firm-fixed price contract extension by Toyota Motor North America, a subsidiary of Toyota Motor Corporation, to provide ongoing information systems end-user support services. The contract has a five-year period of performance and an estimated total contract value of $54 million. SAIC will provide support services to Toyota sales and manufacturing affiliates located in California, Kentucky and Texas.

U.S. Navy - Fleet Forces Command: SAIC was awarded a cost-plus-fixed-fee task order to continue providing fleet deployment training program support to the Fleet Forces Command. Under the contract, SAIC will assist the Fleet Forces Command with fleet training policy/directive development and implementation; curriculum development and instruction; and synthetic training and live exercise development, execution, assessment and reconstruction. The task order has a one-year base period of performance, four one-year options and a total contract value of approximately $118.5 million if all options are exercised. Work will be performed primarily in California and Virginia.

SAIC's estimated backlog of signed business orders at the end of the quarter was approximately $6.2 billion of which $1.8 billion was funded. Negotiated backlog does not include any estimate of future task orders expected to be awarded under IDIQ, U.S. General Services Administration schedules or other master agreement contract vehicles.

Special Recognition – SAIC Named Top Employer for Veterans

Forbes recently ranked SAIC sixth on its list of the top 15 employers for veterans. SAIC has always been a strong supporter of our military and this is further demonstrated by our retention and hiring practices that recognize the extraordinary skills and experience that veterans bring to our workforce.

Conference Call Information

SAIC management will discuss operations and financial results in an earnings conference call beginning at 8 a.m. ET on June 9, 2015. A live audio broadcast of the conference call, along with a supplemental presentation, will be available to the public through links to the Investor Relations section of the SAIC website (http://investors.saic.com). Interested parties may listen to the conference call by dialing +1.877.852.6543 (toll-fee U.S.) or +1.719.325.4841 (International/Local) and entering passcode 6189669.

About SAIC

SAIC is a premier technology integrator providing full lifecycle services and solutions in the technical, engineering, intelligence, and enterprise information technology markets. SAIC is Redefining Ingenuity through its deep customer and domain knowledge, talented people, effective processes, and innovation to enable the delivery of systems engineering and integration offerings for large, complex projects. SAIC's approximately 15,000 employees are driven by integrity and mission focus to serve customers in the U.S. federal government, state/local, and global commercial markets. Headquartered in McLean, Virginia, SAIC has annual revenues of about $4.4 billion (including Scitor).

For more information, visit http://www.saic.com. For ongoing news, please visit our newsroom.

Forward-Looking Statements

Certain statements in this release contain or are based on "forward-looking" information within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by words such as "expects," "intends," "plans," "anticipates," "believes," "estimates," "guidance," and similar words or phrases. Forward-looking statements in this release may include, among others, estimates of future revenues, operating income, earnings, earnings per share, charges, total contract value, backlog, outstanding shares and cash flows, as well as statements about future dividends, share repurchases and other capital deployment plans. These statements reflect our belief and assumptions as to future events that may not prove to be accurate. Actual performance and results may differ materially from the guidance and other forward-looking statements made in this release depending on a variety of factors, including: developments in the U.S. government defense budget, including budget reductions, implementation of spending cuts (sequestration) or changes in budgetary priorities; delays in the U.S. government budget process or approval to raise the U.S. debt ceiling; delays in the U.S. government contract procurement process or the award of contracts; delays or loss of contracts as result of competitor protests; changes in U.S. government procurement rules, regulations and practices; our compliance with various U.S. government and other government procurement rules and regulations; governmental reviews, audits and investigations of our company; our ability to effectively compete and win contracts with the U.S. government and other customers; our ability to retain key employees and customers of Scitor Holdings, Inc. and its subsidiaries (collectively, Scitor) following the acquisition of recently-acquired Scitor; our ability to successfully integrate Scitor, including implementing IT and other control systems relating to Scitor's operations; our ability to generate sufficient earnings to meet the required leverage ratio under our credit facilities following the acquisition of Scitor, which if unsuccessful would give lenders the right to, among other things, foreclose on all of our assets; our ability to attract, train and retain skilled employees, including our management team, and to obtain security clearances for our employees; our ability to accurately estimate costs associated with our firm-fixed price and other contracts; cybersecurity, data security or other security threats, systems failures or other disruptions of our business; resolution of legal and other disputes with our customers and others or legal or regulatory compliance issues; our ability to effectively deploy capital and make investments in our business; our ability to maintain relationships with prime contractors, subcontractors and joint venture partners; our ability to manage performance and other risks related to customer contracts, including complex engineering projects; the adequacy of our insurance programs designed to protect us from significant product or other liability claims; our ability to declare future dividends based on our earnings, financial condition, capital requirements and other factors, including compliance with applicable laws and contractual agreements; risks associated with our recently completed spin-off transaction from our former parent, such as protests of awards of contracts to us that were bid before completion of the spin-off or novation of contract vehicles to us or a failure to realize the expected benefits of the spinoff; and our ability to execute our business plan and long-term management initiatives effectively and to overcome these and other known and unknown risks that we face. The above-outlined risks apply to our current company, including the operations of Scitor. These are only some of the factors that may affect the forward-looking statements contained in this release. For further information concerning risks and uncertainties associated with our business, please refer to the filings we make from time to time with the U.S. Securities and Exchange Commission, including the "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Legal Proceedings" sections of our Annual Report on Form 10-K, which may be viewed or obtained through the Investor Relations section of our web site at www.saic.com.

All information in this release is as of June 9, 2015. SAIC expressly disclaims any duty to update any forward-looking statement provided in this release to reflect subsequent events, actual results or changes in SAIC's expectations. SAIC also disclaims any duty to comment upon or correct information that may be contained in reports published by investment analysts or others.

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