MCLEAN, Va.--(BUSINESS WIRE)--Science Applications International Corporation (NYSE: SAIC), a leading technology integrator providing full life cycle services and solutions in the technical, engineering, intelligence, and enterprise information technology markets, today announced financial results for the first quarter ended May 6, 2016.

“SAIC delivered solid results for the first quarter of fiscal year 2017 and continued to deploy capital from strong cash flow to enhance shareholder value,” said Tony Moraco, Chief Executive Officer of SAIC. “The combination of modest market improvements, notable business development results, and an increase in the pace of share repurchases provides a sound foundation to start the fiscal year.”

Revenues for the first quarter were $1,215 million compared to $1,009 million during the prior year quarter, which represents an increase of $206 million. Our fiscal year 2017 is a 53-week year and contains an extra week compared to the prior fiscal year. The extra week occurred during the first quarter of fiscal 2017. Of the $206 million increase in revenue in the current quarter, an estimated $88 million of the increase was due to the additional week in the first quarter. The remaining revenue growth was primarily due to the acquisition of Scitor, which occurred during the second quarter of the prior fiscal year and revenue from newly awarded programs ($42 million). These increases were partially offset by lower current quarter supply chain material volume ($41 million) as a result of a recompete contract loss last year.

The Company’s internal revenue contraction for the first quarter was 3.1%. As is shown in Schedule 5, to calculate internal revenue growth or contraction, revenues from the prior year quarter were adjusted to include Scitor’s historical revenues as if the acquisition had occurred at the beginning of the comparable prior year period. Also, this calculation adjusted first quarter fiscal 2017 revenues to exclude the estimated impact of the additional week in order to provide a more equitable comparison to fiscal 2016. Revenues contracted primarily due to the supply chain contract loss and a decrease in revenues generated by the legacy Scitor business caused by delays in contract awards, and transition of work to small business set aside contracts. These decreases were partially offset by revenues on newly awarded programs.

Operating income for the quarter was $66 million, or 5.4% of revenues, down from 5.6% in the prior year quarter. The decrease was primarily due to increased current year selling, general and administrative expense (SG&A) as well as acquisition and integration costs related to lease exit costs. SG&A for the quarter includes the amortization of acquired Scitor intangible assets ($7 million) and executive severance expense ($2 million). These decreases to operating income were partially offset by higher net favorable changes in contract profit estimates compared to the prior year period ($5 million) and reduced volume on supply chain contracts that generate lower operating margins.

Adjusted EBITDA (which excludes acquisition and integration costs) was $86 million for the first quarter, or 7.1% of revenues, compared to 6.4% in the comparable prior year quarter. The increase was due to strong contract performance and the inclusion of Scitor which has a relatively higher EBITDA margin percentage than our historical business, along with reduced supply chain contract volume.

Net income for the quarter was consistent with the prior year quarter, primarily due to increased operating income ($6 million, net of tax), offset by increased interest expense on incremental term loan borrowings related to the Scitor acquisition ($6 million, net of tax).

Diluted earnings per share was $0.71 for the quarter and adjusted diluted earnings per share was $0.80 (which excludes the estimated after-tax effects of $7 million of acquisition and integration costs). The weighted-average diluted shares outstanding during the quarter was 46.5 million shares.

Cash Generation and Capital Deployment

Total cash flows provided by operating activities for the quarter were $35 million, an increase of $6 million from the comparable prior year quarter. The increase in operating cash flows over the prior year quarter was primarily due to lower income tax payments ($3 million) and cash flows provided by the operating activities of Scitor. These increases were partially offset by a current period investment of working capital for the Assault Amphibious Vehicle contract ($7 million) and higher interest payments in the current period as a result of additional borrowings ($9 million).

During the quarter SAIC deployed $44 million of capital, consisting of $14 million in cash dividends and $30 million in plan share repurchases (approximately 622 thousand shares) under SAIC’s previously announced share repurchase program.

Quarterly Dividend Declared

Subsequent to quarter end, the Board of Directors declared a regular quarterly cash dividend of $0.31 per share payable on July 29, 2016 to stockholders of record on July 15, 2016. 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 approximately $1.3 billion, which reflects a book-to-bill ratio of approximately 1.0. SAIC’s estimated backlog of signed business orders at the end of the quarter was approximately $7.2 billion of which $2.1 billion was funded.

SAIC was awarded the following notable contracts during the quarter:

U.S. Army – Aviation and Missile Research, Development, and Engineer Center (AMRDEC): SAIC received multiple task order contract modifications by AMRDEC to continue to provide services, including: modeling and simulation environments support; integrated air and missile defense technical support; business system combined software support; aircraft survivability equipment support; joint battle command platform and aviation systems support; and computer resources support. These task order modifications have a total contract value of approximately $190 million.

U.S. Navy – Naval Sea Systems Command (NAVSEA): SAIC was awarded a task order by the U.S. Navy to continue to provide technical solutions to the NAVSEA Program Executive Office Integrated Warfare Systems (PEO IWS). SAIC will provide technical services (including systems engineering, integration, and testing) to support product development on current and future programs. The task order has a one year base period of performance and two one-year options with a total contract value of approximately $141 million if all options are exercised.

U.S. Navy – Naval Surface Warfare Center, Crane Division (NSWC Crane): SAIC was awarded two task orders by NSWC Crane under the SeaPort-e contracting vehicle to continue to provide engineering, technical, and program management support services. Under the task orders SAIC will support the Quality and Systems Engineering Assurance, and Surveillance and Reconnaissance Systems divisions. The task orders each have a one-year base period of performance and four one-year options and have a total estimated combined contract value of $73 million if all options are exercised.

SAIC was awarded the following notable contracts after the end of the quarter:

General Services Administration (GSA) and Office of Personnel Management (OPM): The GSA and OPM awarded SAIC a new contract on two Human Capital and Training Solutions contract pools to provide training and development services to the federal government’s workforce. The multiple-award, indefinite delivery, indefinite quantity (IDIQ) contract has a five-year base period of performance, one five-year option and one six-month option. Pool 1 has a total contract value available to all awardees of $3.45 billion and Pool 2 of $2.3 billion, if all options are exercised. SAIC is one of 33 awardees in Pool 1 and one of 39 awardees in Pool 2. Under the contract, SAIC will provide federal government agencies with training and development, human capital strategy and organizational performance improvement services to meet the U.S. government’s workforce needs.

U.S. Cyber Command (USCYBERCOM): SAIC was awarded a new contract to provide a wide range of cyber operations services to support USCYBERCOM’s operational mission. SAIC is one of six awardees under the IDIQ contract, which has a five-year base period of performance and a total contract value of $460 million for all awardees.

U.S. Navy - Naval Supply Systems Command: SAIC was awarded a new contract to provide reengineering, development, and personal computer simulation services in support of the command’s Naval Training Products and Services program. SAIC is one of five awardees under the IDIQ contract, which has a three-year base period of performance, one three-year option, and a total estimated contract value of approximately $343 million for all awardees, if all options are exercised.

About SAIC

SAIC is a premier technology integrator providing full life cycle services and solutions in the technical, engineering, intelligence, and enterprise information technology markets. SAIC is Redefining Ingenuity through its deep customer and domain knowledge 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. Headquartered in McLean, Virginia, SAIC has annual revenues of approximately $4.3 billion. For more information, visit saic.com. For ongoing news, please visit our newsroom.