Engility Holdings Inc. [EGL] on Tuesday posted a third quarter loss due to refinancing fees and acquisition costs related to two acquisitions while sales also fell.
On the good news front, adjusted earnings easily outdistanced consensus expectations and orders were exceptionally strong.
The net loss in the quarter was $16.8 million, 46 cents earnings per share (EPS), versus $3.7 million (10 cents EPS) of income a year ago. Excluding acquisition-related costs and bank fees, adjusted net income was $19 million (52 cents EPS), with per share earnings 14 cents higher than analysts’ estimates.
Despite the hit from bank fees in the quarter, debt refinancing activities are expected to save the company $23 million annually in interest expenses, Engility said.
Sales in the quarter slid 10 percent to $511.8 million from $570.5 million a year ago.
Bookings in the quarter were $1.1 billion, more than two times sales, and total backlog stood at $3.7 billion, $700 million higher than the second quarter. The strong order flow brought bookings for the year-to-date up to 1.4 times sales. Funded backlog was $702 million, down from $753 million in the second quarter.
Lynn Dugle, Engility’s CEO, said on the earnings call that $500 million worth of single award classified contracts that had been protested were resolved in the company’s favor during the third quarter.
Engility said its bookings in the fourth quarter are off to a good start following the award of a potential $369 million contract with the Department of Transportation to provide engineering and technical services, and financial and program management services to the Volpe National Transportation Systems Center.
Sales in the quarter were below the company’s expectation and it narrowed its revenue outlook for the year to $2.1 billion from prior guidance of between $2.1 billion and $2.2 billion. Earnings for the year are now projected at a loss of between 12 cents and 2 cents EPS versus previous projections of earnings between 8 cents and 23 cents EPS.
Excluding bank fees and acquisition costs, adjusted earnings are expected to increase to between $1.56 and $1.66 EPS from the prior range of $1.18 to $1.33 EPS. The outlook for operating cash flow is between $85 million and $95 million, $20 million lower than prior guidance.