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Booz Allen Hamilton Holding Corporation Reports Operating Results (10-Q)

October 31, 2012 | About:
10qk

10qk

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Booz Allen Hamilton Holding Corporation (BAH) filed Quarterly Report for the period ended 2012-09-30.

Booz Allen Hamilton Holding Corp has a market cap of $1.64 billion; its shares were traded at around $13.11 with a P/E ratio of 7.3 and P/S ratio of 0.3. The dividend yield of Booz Allen Hamilton Holding Corp stocks is 2.9%.

Highlight of Business Operations:

Operating income grew 8.9% to $102.0 million in the three months ended September 30, 2012 from $93.7 million in the three months ended September 30, 2011, which reflects a 80 basis point increase in operating margin to 7.4% from 6.6% in the comparable periods. Operating income grew 13.0% to $216.8 million in the six months ended September 30, 2012 from $191.8 million in the six months ended September 30, 2011, which reflects a 100 basis point increase in operating margin to 7.7% from 6.7% in the comparable period. The improvement in operating margin was due to increased contract profitability due to disciplined cost management of indirect spending, as well as decreases in stock-based compensation costs and lower amortization of our intangible assets. The factors contributing to the increased operating margin were partially offset by increases in depreciation expense due to facility expansion in previous years, causing a higher increase in depreciation for fiscal 2013.

Cost of revenue decreased to $702.1 million from $715.6 million, or a 1.9% decrease. This decrease was primarily due to decrease in salaries and salary related benefits of $21.7 million. The cost of revenue decrease was offset by increases in incentive compensation costs of $6.4 million, employer retirement plan contributions of $1.2 million, and other direct consulting staff expenses of $0.6 million attributable to the modest growth in direct consulting staff labor sold. The increase in incentive compensation costs was due to higher incentive compensation accrual rates in fiscal 2013 as compared to fiscal 2012 offset by reduced headcount in the senior ranks associated with the cost restructuring plan that was implemented during fiscal 2012. The increase in employer retirement plan contributions was due to an increase in the number of employees who completed one year of service and became eligible to participate in our defined contribution plan, the Employees' Capital Accumulation Plan, or ECAP. Cost of revenue as a percentage of revenue was 50.6% and 50.1% in the three months ended September 30, 2012 and 2011, respectively.

General and administrative expenses decreased to $212.5 million from $220.3 million, or a 3.5% decrease. This decrease was primarily due to a decrease of $9.5 million in other business-related expenses and professional fees attributable to the Company's disciplined management of corporate-related expenditures and a decrease in salaries and salary-related benefits of $7.9 million. These decreases were offset by transaction costs for the pending acquisition of DSES of $2.6 million and increases in incentive compensation costs of $4.6 million and employer retirement plan contributions of $2.5 million. The increase in incentive compensation costs was due to higher incentive compensation accrual rates in fiscal 2013 as compared to fiscal 2012 offset by reduced headcount in the senior ranks associated with the cost restructuring plan that was implemented during fiscal 2012. The increase in employer retirement plan contributions was due to an increase in the number of employees who completed one year of service and became eligible to participate in our defined contribution plan, the ECAP. General and administrative expenses as a percentage of revenue were 15.3% and 15.4% for the three months ended September 30, 2012 and 2011, respectively.

Cost of revenue decreased to $1,429.4 million from $1,442.5 million, or a 0.9% decrease. This decrease was primarily due to decrease in salaries and salary related benefits of $21.8 million and $1.2 million in stock-based compensation expense. The cost of revenue decrease was offset by increases in employer retirement plan contributions of $2.1 million, and other direct consulting staff expenses of $7.9 million attributable to the modest growth in direct consulting staff labor sold. The increase in employer retirement plan contributions was due to an increase in the number of employees who completed one year of service and became eligible to participate in our defined contribution plan, the ECAP. Cost of revenue as a percentage of revenue was 50.7% and 50.2% in the six months ended September 30, 2012 and 2011, respectively.

General and administrative expenses decreased to $405.9 million from $432.1 million, or a 6.1% decrease. This decrease was primarily due to a decrease of $24.1 million in other business-related expenses and professional fees attributable to the Company's disciplined management of corporate-related expenditures, a decrease of $5.6 million in salaries and salary-related benefits, and a decrease in stock-based compensation of $2.9 million. These decreases were offset by transaction costs for the pending acquisition of DSES of $2.6 million, increases of $2.0 million in employer retirement plan contributions and incentive compensation costs of $1.8 million. The increase in incentive compensation costs was due to increased incentive compensation accrual rates in fiscal 2013 as compared to fiscal 2012 despite reduced headcount in the senior ranks associated with the cost restructuring plan that was implemented in late fiscal 2012. The increase in employer retirement plan contributions was due to an increase in the number of employees who completed one year of service and became eligible to participate in our defined contribution plan, the ECAP. General and administrative expenses as a percentage of revenue were 14.4% and 15.0% for the six months ended September 30, 2012 and 2011, respectively.

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