Booz Allen Hamilton Holding Corporation Debt increased on 9.3% while Net Debt / EBITDA decreased on 0.038x from 2.7x to 2.6x
05/29/2018 • About Booz Allen Hamilton Holding Corporation (
$BAH) • By InTwits
Booz Allen Hamilton Holding Corporation reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is relatively stable: 9.5% in FY2018 vs. 9.4% in FY2017 vs. 9.7% in FY2014
- Booz Allen Hamilton Holding Corporation has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.9%.
- In the last 5 years the company invested considerably less than D&A: $256m vs. $321m
- The company has highly profitable business model: ROIC is 22.5%
- It operates with medium-size leverage: Net Debt/EBITDA is 2.6x while industry average is -0.4x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Booz Allen Hamilton Holding Corporation's Revenue increased on 6.3%. Revenue growth showed slowdown in FY18Q4 - it was 3.1% YoY. Revenue decline was slowing down on average by 3.3 pp per annum in the last 5 years. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.6 pp from 20.0% to 21.7% in 2018.
Gross Margin showed almost no change in FY2018. Gross Margin grew at 0.90 pp per annum in FY2014-FY2018. SG&A as a % of Revenue showed almost no change in FY2018. During the last 5 years SG&A as a % of Revenue topped in FY2016 at 14.9% and was declining since that time. Stock Based Compensation (SBC) as a % of Revenue showed almost no change in FY2018. SBC as a % of Revenue grew at 0.15 pp per annum in the last 5 years.
Net Income margin increased slightly on 0.54 pp from 4.4% to 4.9% in FY2018. The efficient tax rate was 29.8% in FY2018 while the average for the last five years was 34.0%.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 1.3% in FY2018. The company's CAPEX/Revenue increased slightly on 0.59 pp from 0.68% in FY2015 to 1.3% in FY2018. For the last three years the average CAPEX/Revenue was 1.1%.
Accounts receivable as a % of Revenue increased slightly on 1.3 pp from 17.1% to 18.4% in FY2018.
Booz Allen Hamilton Holding Corporation has spent
$19m on M&A in FY2018 which accounts for 0.31% of revenue.
Return on investment
The company operates at high and attractive ROIC (22.5%) and ROE (53.1%). ROIC showed almost no change in FY2018. ROE increased slightly on 1.7 pp from 51.4% to 53.1% in FY2018. During the last 5 years ROIC topped in FY2015 at 26.5% and was declining since that time. ROE followed a declining trend at -20.5 pp per annum in the last 5 years.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.6x and Debt / EBITDA is 3.1x. Net Debt / EBITDA decreased on 0.038x from 2.7x to 2.6x in FY2018. Debt increased on 9.3% while cash jumped on 32.0%. During the last 5 years Net Debt/EBITDA topped in FY2016 at 2.8x and was declining since that time.
Booz Allen Hamilton Holding Corporation has good short term financial stability: Interest coverage ratio (ICR) is 6.3x. Booz Allen Hamilton Holding Corporation has no short term refinancing risk: cash is higher than short term debt (454.8%).
Average interest expence paid by the company was 4.5% in FY2018.
Valuation and dividends
The company's trades at EV/EBITDA 13.7x and P/E 21.4x.
The company paid 34.5% of Net Income as dividends in FY2018. Dividends grew on average at -23.7% per annum in the last 5 years).
Management team
The company's CEO is Horacio D Rozanski. Horacio D Rozanski is a founder and has 4 years tenure with the company. CEO total compensation was
$4,922,357 in FY2018 which included
$1,500,000 salary. Lloyd W Howell Jr is a Booz Allen Hamilton Holding Corporation's CFO. Lloyd W Howell Jr has spent 3 years at the company.
2.5% of the company is owned by insiders. Insider ownership didn't change in 2018.
The company has 24,600 employees. The number of employees increased on 5.6%. Average revenue per employee in FY2018 was
$250,715 and it increased slightly on 0.64%.
Financial and operational results
FY ended 03/31/2018
Booz Allen Hamilton Holding Corporation ($BAH) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 5,479 | 5,275 | 5,406 | 5,804 | 6,168 | 6.3% |
| Gross Profit | 2,763 | 2,681 | 2,826 | 3,112 | 3,301 | 6.1% |
| SG&A | 743 | 753 | 807 | 817 | 856 | 4.7% |
| EBITDA | 533 | 521 | 506 | 544 | 584 | 7.5% |
| EBIT | 461 | 459 | 445 | 484 | 520 | 7.3% |
| Interest expence | 78 | 72 | 71 | 62 | 82 | 32.1% |
| Tax | 149 | 153 | 85 | 159 | 128 | -19.5% |
| Net Income | 232 | 233 | 294 | 252 | 302 | 19.5% |
| Stock Based Compensation | -18 | -25 | -7 | 3 | 9 | 188.3% |
Balance Sheet
|
|---|
| Cash | 260 | 207 | 188 | 217 | 287 | 32.0% |
| Accounts Receivable | 917 | 857 | 892 | 992 | 1,134 | 14.3% |
| Short Term Debt | 74 | 57 | 113 | 193 | 63 | -67.3% |
| Long Term Debt | 1,585 | 1,556 | 1,484 | 1,470 | 1,755 | 19.4% |
Cash flow
|
|---|
| Capex | 21 | 36 | 67 | 54 | 78 | 45.5% |
| Dividends | 402 | 262 | 112 | 95 | 104 | 9.5% |
| Acquisitions | -4 | 25 | 51 | 248 | 19 | -92.3% |
Ratios
|
|---|
| Revenue growth | -4.9% | -3.7% | 2.5% | 7.4% | 6.3% | |
| EBITDA growth | 2.4% | -2.1% | -2.9% | 7.4% | 7.5% | |
|
|---|
| Gross Margin | 50.4% | 50.8% | 52.3% | 53.6% | 53.5% | -0.1% |
| EBITDA Margin | 9.7% | 9.9% | 9.4% | 9.4% | 9.5% | 0.1% |
| EBIT Margin | 8.4% | 8.7% | 8.2% | 8.3% | 8.4% | 0.1% |
| SG&A, % of revenue | 13.6% | 14.3% | 14.9% | 14.1% | 13.9% | -0.2% |
| SBC, % of revenue | -0.3% | -0.5% | -0.1% | 0.1% | 0.1% | 0.1% |
| Net Income Margin | 4.2% | 4.4% | 5.4% | 4.4% | 4.9% | 0.5% |
| CAPEX, % of revenue | 0.4% | 0.7% | 1.2% | 0.9% | 1.3% | 0.3% |
|
|---|
| ROIC | 25.3% | 26.5% | 23.1% | 22.6% | 22.5% | -0.2% |
| ROE | 116.6% | 129.9% | 97.7% | 51.4% | 53.1% | 1.7% |
| Net Debt/EBITDA | 2.6x | 2.7x | 2.8x | 2.7x | 2.6x | -0.0x |
| Interest coverage ratio (ICR) | 5.9x | 6.4x | 6.3x | 7.8x | 6.3x | -1.5x |
| Interest expence / Average debt | 4.7% | 4.4% | 4.4% | 3.8% | 4.5% | 0.7% |
People
|
|---|
| Insider ownership | 2.5% | 2.5% | 2.5% | 2.5% | 2.5% | 0.0% |
| Employees | | 22,500 | 22,600 | 23,300 | 24,600 | 5.6% |
| Revenue/Employee, th. $ | | 234 | 239 | 249 | 251 | 0.6% |
Booz Allen Hamilton Holding Corporation ($BAH) key quoterly financial indicators
| mln. $ | FY18Q1 | FY18Q2 | FY18Q3 | FY18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 1,523 | 1,543 | 1,471 | 1,631 | | 7.0% | 10.6% | 4.7% | 3.1% |
| EBITDA | 142 | 149 | 145 | 148 | | -1.2% | 12.5% | 18.5% | 2.2% |
| Net Income | 71 | 74 | 75 | 83 | | 4.1% | 17.2% | 34.8% | 24.5% |
Balance Sheet
|
|---|
| Cash | 337 | 330 | 289 | 287 | | 87.5% | 7.4% | -17.2% | 32.0% |
| Short Term Debt | 63 | 63 | 63 | 63 | | -40.9% | 0.0% | -20.0% | -67.3% |
| Long Term Debt | 1,799 | 1,784 | 1,769 | 1,755 | | 19.8% | 18.9% | 19.1% | 19.4% |
Ratios
|
|---|
| Gross Margin | 51.7% | 54.8% | 53.9% | 53.7% | | -2.1% | 2.0% | 0.3% | -0.5% |
| EBITDA Margin | 9.3% | 9.7% | 9.9% | 9.1% | | -0.8% | 0.2% | 1.1% | -0.1% |
| Net Income Margin | 4.6% | 4.8% | 5.1% | 5.1% | | -0.1% | 0.3% | 1.1% | 0.9% |
Peers in IT Consulting & Other Services
Below we provide Booz Allen Hamilton Holding Corporation benchmarking against other companies in IT Consulting & Other Services industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Gopher Protocol Inc ($GOPH) | | -25.0% | 83.3% | 5,471.1% | 461.0% |
| CLPS Incorporation ($CLPS) | | | | 8.1% | 56.0% |
| EPAM Systems, Inc. ($EPAM) | | 25.2% | 26.9% | 25.0% | 27.1% |
| Gartner, Inc. ($IT) | | 7.0% | 13.0% | 35.5% | 20.1% |
| Computer Task Group, Incorporated ($CTG) | | -6.0% | -12.1% | -7.3% | 19.1% |
| |
|---|
| Median (35 companies) | | 3.5% | 8.3% | 3.8% | 3.4% |
|---|
| Booz Allen Hamilton Holding Corporation ($BAH) | | -3.7% | 2.5% | 7.4% | 6.3% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Inpixon ($INPX) | 29.8% | 28.9% | 28.1% | 68.7% | 71.4% |
| Gartner, Inc. ($IT) | 60.5% | 61.2% | 61.3% | 60.1% | 63.1% |
| InterXion Holding N.V. ($INXN) | 59.2% | 60.8% | 61.5% | 61.1% | 60.9% |
| LiveRamp Holdings, Inc. ($RAMP) | 25.1% | 38.6% | 42.5% | 45.7% | 56.2% |
| Teradata Corporation ($TDC) | 54.1% | 50.4% | 51.2% | 47.5% | 47.4% |
| |
|---|
| Median (37 companies) | 25.8% | 30.9% | 28.1% | 27.7% | 28.9% |
|---|
| Booz Allen Hamilton Holding Corporation ($BAH) | 50.4% | 50.8% | 52.3% | 53.6% | 53.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| InterXion Holding N.V. ($INXN) | 41.3% | 44.9% | 43.3% | 42.2% | 42.8% |
| Switch, Inc. ($SWCH) | | 50.7% | 37.0% | 28.5% | 39.8% |
| Cognizant Technology Solutions Corporation ($CTSH) | 20.4% | 19.9% | 19.8% | 19.7% | 20.5% |
| Taoping Inc. ($TAOP) | -54.0% | -237.5% | -117.7% | 13.2% | 18.7% |
| DXC Technology Company ($DXC) | | | | 8.0% | 16.3% |
| |
|---|
| Median (36 companies) | 4.8% | 3.3% | 6.7% | 6.3% | 7.2% |
|---|
| Booz Allen Hamilton Holding Corporation ($BAH) | 9.7% | 9.9% | 9.4% | 9.4% | 9.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| InterXion Holding N.V. ($INXN) | 62.5% | 48.1% | 57.4% | 50.5% | 78.3% |
| Switch, Inc. ($SWCH) | | 71.5% | 90.2% | 106.4% | 67.9% |
| Taoping Inc. ($TAOP) | 1.4% | 29.2% | 34.0% | 20.8% | 8.7% |
| Teradata Corporation ($TDC) | 2.0% | 2.1% | 2.3% | 3.6% | 7.1% |
| ServiceSource International, Inc. ($SREV) | 3.4% | 4.7% | 10.4% | 7.2% | 6.5% |
| |
|---|
| Median (35 companies) | 1.0% | 0.9% | 1.1% | 1.4% | 1.5% |
|---|
| Booz Allen Hamilton Holding Corporation ($BAH) | 0.4% | 0.7% | 1.2% | 0.9% | 1.3% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Accenture plc ($ACN) | 80.5% | 81.0% | 81.3% | 61.7% | 66.1% |
| The Hackett Group, Inc. ($HCKT) | 11.2% | 19.5% | 31.7% | 23.8% | 24.6% |
| Cognizant Technology Solutions Corporation ($CTSH) | 24.7% | 22.0% | 21.3% | 21.9% | 23.8% |
| EPAM Systems, Inc. ($EPAM) | 19.7% | 18.4% | 18.2% | 18.9% | 21.2% |
| SCIENCE APPLICATIONS INTERNATIONAL CORPORATION ($SAIC) | 24.4% | 27.4% | 19.6% | 18.3% | 18.4% |
| |
|---|
| Median (44 companies) | 6.2% | 4.7% | 7.3% | 4.7% | 6.9% |
|---|
| Booz Allen Hamilton Holding Corporation ($BAH) | 25.3% | 26.5% | 23.1% | 22.6% | 22.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Infinite Group Inc ($IMCI) | | | 169.6x | | 10.5x |
| InterXion Holding N.V. ($INXN) | 3.3x | 2.9x | 3.4x | 3.8x | 4.6x |
| Gartner, Inc. ($IT) | 0.1x | 1.3x | 0.6x | 11.7x | 4.1x |
| Switch, Inc. ($SWCH) | | 2.2x | 4.0x | 3.2x | 3.3x |
| Presidio, Inc. ($PSDO) | 0.0x | | 5.6x | 3.6x | 3.1x |
| |
|---|
| Median (28 companies) | -0.2x | -0.3x | 0.0x | 0.4x | 0.4x |
|---|
| Booz Allen Hamilton Holding Corporation ($BAH) | 2.6x | 2.7x | 2.8x | 2.7x | 2.6x |
