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SAIC Inc. Reports Operating Results (10-Q)

December 09, 2010 | About:

SAIC Inc. (SAI) filed Quarterly Report for the period ended 2010-10-31.

Saic Inc. has a market cap of $6.03 billion; its shares were traded at around $16.21 with a P/E ratio of 11.6 and P/S ratio of 0.5. SAI is in the portfolios of Steven Cohen of SAC Capital Advisors.

Highlight of Business Operations:

Bookings and Backlog. We received net bookings worth an estimated $3.1 billion and $9.0 billion during the three and nine months ended October 31, 2010, respectively. Bookings generally represent the estimated amount of revenue to be earned in the future from funded and unfunded contract awards that were received during the period, net of any adjustments to previously awarded backlog amounts. We calculate net bookings as the periods ending backlog plus the periods revenues less the prior periods ending backlog and less the backlog obtained in acquisitions during the period.

The DoD is in the process of restructuring one of our largest programs, Army Brigade Combat Team Modernization. As a result of this restructuring, certain efforts associated with the program were terminated for convenience by the DoD in July 2009 and January 2010. We received an undefinitized change order which required us to submit a restructure proposal. We submitted the restructure proposal to our prime contractor in April 2010 and the prime contractor submitted its restructure proposal to the customer in May 2010. We continue to perform on this program in accordance with the revised scope of work under a reduced provisional billing rate that allows us to receive a lesser amount of the projected fee until the contract negotiations are completed. The future volume and profitability of this program is dependent on the outcome of the change order negotiations. Included within the Government segment backlog above is approximately $80 million in funded backlog and $350 million in negotiated unfunded backlog related to this program, which represents our best estimate of our remaining effort under this restructured contract to be performed through fiscal 2014. Of these amounts, we expect to recognize revenues of approximately $60 million during the remainder of fiscal 2011.

Revenues. Our revenues increased $104 million, or 4%, and $185 million, or 2%, for the three and nine months ended October 31, 2010, respectively, as compared to the same periods in the prior year. Our internal revenue growth rate (as defined in Non-GAAP Financial Measures) was 2% and 0% for the three and nine months ended October 31, 2010, respectively, due to internal revenue growth in our Government segment, which was partially offset by contraction in our Commercial segment. Internal revenue growth for the nine months ended October 31, 2010 was also favorably impacted by a $56 million royalty payment received in the second quarter of fiscal 2011 in the Government segment.

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