London, October 23, 2024, (Oilandgaspress) ––– “During the quarter, we strategically shaped our portfolio and allocated capital in a thoughtful, balanced way,”stated Stuart Bradie, KBR’s President and CEO. “Our acquisition of LinQuest, a leader in advanced engineering, data analytics, and digital integration, enhances our capabilities in space, air dominance, and connected battle space missions and introduces KBR to new U.S. government customers and contract vehicles. With strong performance across KBR and the integration of LinQuest progressing well, I am pleased to announce an increase in Revenue, Adjusted EBITDA2, and Adjusted EPS2 guidance for 2024. We welcome our new colleagues to the KBR family and look forward to the opportunities to shape the future together.”
Financial Highlights for the Three Months Ended September 27, 2024
Revenue of $1.9 billion, up 10% on a year-over-year-basis
Net income attributable to KBR of $100 million; Adjusted EBITDA2 of $219 million, up 18% on a year-over-year basis (11.2% Adjusted EBITDA2 margin)
Diluted EPS of $0.75; Adjusted EPS2 of $0.84, up 12% on a year-over-year basis
Operating cash flows of $161 million
Bookings and options1 of $3.3 billion during the quarter with 1.2x QTD book-to-bill1
Summarized Third Quarter 2024 Financial Results
| Three Months Ended | Nine Months Ended | ||||||
| September 27, | September 29, | September 27, | September 29, | ||||
| Dollars in millions, except share data | 2024 | 2023 | 2024 | 2023 | |||
| Revenues | 1,947 | 1,770 | $ 5,620 | $ 5,226 | |||
| Operating income | 173 | 147 | 520 | 301 | |||
| Net income (loss) attributable to KBR | 100 | (21) | 299 | (286) | |||
| Adjusted EBITDA2 | 219 | 186 | 642 | 559 | |||
| Operating income margin % | 8.9 % | 8.3 % | 9.3 % | 5.8 % | |||
| Adjusted EBITDA2 margin % | 11.2 % | 10.5 % | 11.4 % | 10.7 % | |||
| Earnings per share: | |||||||
| Diluted earnings per share | $ 0.75 | $ (0.16) | $ 2.22 | $ (2.10) | |||
| Adjusted earnings per share2 | $ 0.84 | $ 0.75 | $ 2.44 | $ 2.18 | |||
| Cash flows: | |||||||
| Operating cash flows | 161 | (40) | 422 | 248 | |||
| Adjusted operating cash flows2 | 161 | 92 | 422 | 380 | |||
| Adjusted free cash flows2 | 142 | 70 | 368 | 320 | |||
Financial Highlights for the Nine Months Ended September 27, 2024
- Revenue of $5.6 billion, up 8% on a year-over-year-basis
- Net income attributable to KBR of $299 million; Adjusted EBITDA2 of $642 million, up 15% on a year-over-year basis (11.4% Adjusted EBITDA2 margin)
- Diluted EPS of $2.22; Adjusted EPS2 of $2.44, up 12% on a year-over-year basis
- Operating cash flows of $422 million
- Bookings and options1 of $6.7 billion during the year to date period with 1.1x TTM book-to-bill1
Commentary on the Three Months Ended September 27, 2024
Revenues were $1.9 billion, up 10% compared to 3Q’23, primarily due to on-contract growth across all of the Government Solutions business units, the acquisition of LinQuest, and growing demand in Sustainable Technology Solutions from engineering and professional services and technology licensing.
Net income attributable to KBR was $100 million, up $121 million compared to 3Q’23, primarily due to a non-cash charge of $114 million in 3Q’23 in connection with the election of cash as the settlement method for our Convertible Notes that did not recur in the current year.
Adjusted EBITDA2 was $219 million, up $33 million compared to 3Q’23, with Adjusted EBITDA2 margins of 11.2%, up 74 bps year-over-year.
Diluted earnings per share was $0.75, up $0.91 compared to 3Q’23, primarily due to the increase in Net income attributable to KBR noted above and the decrease in diluted weighted average common shares outstanding in the current year. Adjusted earnings per share2 was $0.84, up $0.09 compared to 3Q’23, due to increases in gross profit, partially offset by higher selling, general and administrative expenses, interest expense, and provision for income taxes.
Operating cash flows were $161 million, up $201 million compared to 3Q’23, primarily due to a $132 million after-tax outflow in connection with the settlement of a legacy legal matter in the prior year and strong customer collections in the current year. Adjusted operating cash flows were $161 million, up $69 million compared to 3Q’23, primarily due to cash from strong collections in the current year.
Capital returned to shareholders totaled $29 million during the quarter, consisting of $9 million in share repurchases, inclusive of $8 million of open market repurchases and $1 million of repurchases to satisfy requirements of equity compensation plans, and $20 million in regular dividends.
Commentary on the Nine Months Ended September 27, 2024
Revenues were $5.6 billion, up 8% compared to YTD 3Q’23, primarily due to growth across Sustainable Technology Solutions; and within Government Solutions, new and on-contract growth across International, Defense & Intel, and Science & Space, partially offset by decline in Ukraine activity in Readiness & Sustainment.
Net income attributable to KBR was $299 million, up $585 million compared to YTD 3Q’23, primarily due to a $132 million settlement of a legacy legal matter in the prior year, as well as a non-cash charge of $428 million recorded in connection with the election of cash as the settlement method for our Convertible Notes and the repurchase of a portion of our Convertible Notes in the prior year that did not recur in the current year.
Adjusted EBITDA2 was $642 million, up $83 million compared to YTD 3Q’23, with Adjusted EBITDA2 margins of 11.4%, up 73 bps year-over-year.
Diluted earnings per share was $2.22, up $4.32 compared to YTD 3Q’23, primarily due to the increase in Net income attributable to KBR noted above and the decrease in diluted weighted average common shares outstanding in the current year. Adjusted earnings per share2 was $2.44, up $0.26 compared to YTD 3Q’23, due to increases in gross profit and equity in earnings of unconsolidated affiliates, partially offset by higher selling, general and administrative expenses, interest expense, other non-operating expenses, and provision for income taxes.
Operating cash flows were $422 million, up $174 million compared to YTD 3Q’23, primarily due to a $132 million after-tax outflow in connection with the settlement of a legacy legal matter in the prior year and strong customer collections in the current year. Adjusted operating cash flows were $422 million, up $42 million compared to YTD 3Q’23, primarily due to strong collections in the current year.
Capital returned to shareholders totaled $226 million during the year to date period, consisting of $167 million in share repurchases, inclusive of $154 million of open market repurchases and $13 million of repurchases to satisfy requirements of equity compensation plans, and $59 million in regular dividends.
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