Delaware | 333-173746 | 27-2525959 |
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Exhibit No. | Description | |
Press Release issued by the Companies on November 13, 2018, furnished pursuant to Item 2.02 of this Form 8-K. |
Date: | November 13, 2018 | DELTA TUCKER HOLDINGS, INC. |
/s/ William T. Kansky | ||
William T. Kansky | ||
Senior Vice President and Chief Financial Officer |
• | Revenue of $525.0 million |
• | Net income attributable to Delta Tucker Holdings, Inc. of $26.6 million |
• | Adjusted EBITDA of $45.2 million |
• | Total backlog of $3.9 billion |
• | DSO of 41 days |
• | In August 2018, DynAviation announced the award of the General Services Administration ("GSA") task order to provide executive airlift aircraft maintenance and back shop support services in support of the 89 Airlift Wing, located at Joint Base Andrews, Maryland. The task order has a one-year base period and four one-year option periods and a total potential task order value of $203.1 million. |
• | In August 2018, DynAviation announced the award of the GSA task order to support maintenance and maintenance training for the Royal Saudi Naval Forces at Naval Station Mayport in Jacksonville, Florida. The task order has a one-year base period and four one-year option periods and a total potential task order value of $21.8 million. |
• | In September 2018, DynLogistics announced a six-month contract extension on the Fort Irwin National Training Center on the Northcom task order under the LOGCAP IV contract. The extension has a total potential value of $48.8 million. |
• | In September 2018, DynLogistics announced a contract extension to support material management and logistics services for the USACE South Atlantic Division, Task Force Power Restoration in Puerto Rico on the Northcom task order under the LOGCAP IV contract. The contract extension has a total potential value of $19.9 million. |
• | In September 2018, DynLogistics announced a contract expansion on the Afghanistan South Base Life Support Services ("AFSOR") task order under the LOGCAP IV contract. The expansion has a total potential value of $21.7 million. |
• | On October 19, 2018, we made a voluntary principal payment of $50.0 million on the Term Loan. |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, 2018 | September 30, 2017 | September 30, 2018 | September 30, 2017 | ||||||||||||
Revenue | $ | 525,022 | $ | 502,974 | $ | 1,609,676 | $ | 1,437,133 | |||||||
Cost of services | (454,270 | ) | (447,796 | ) | (1,396,291 | ) | (1,256,924 | ) | |||||||
Selling, general and administrative expenses | (21,163 | ) | (21,243 | ) | (71,192 | ) | (80,129 | ) | |||||||
Depreciation and amortization expense | (6,022 | ) | (8,792 | ) | (18,053 | ) | (25,936 | ) | |||||||
(Loss) earnings from equity method investees | (60 | ) | 53 | 209 | 105 | ||||||||||
Operating income | 43,507 | 25,196 | 124,349 | 74,249 | |||||||||||
Interest expense | (16,197 | ) | (17,149 | ) | (49,268 | ) | (53,628 | ) | |||||||
Loss on early extinguishment of debt | — | — | (239 | ) | (24 | ) | |||||||||
Interest income | 863 | 15 | 1,796 | 39 | |||||||||||
Other income (expense), net | 790 | (43 | ) | 1,931 | 1,474 | ||||||||||
Income before income taxes | 28,963 | 8,019 | 78,569 | 22,110 | |||||||||||
Provision for income taxes | (2,040 | ) | (3,338 | ) | (9,924 | ) | (11,677 | ) | |||||||
Net income | 26,923 | 4,681 | 68,645 | 10,433 | |||||||||||
Noncontrolling interests | (278 | ) | (295 | ) | (783 | ) | (858 | ) | |||||||
Net income attributable to Delta Tucker Holdings, Inc. | $ | 26,645 | $ | 4,386 | $ | 67,862 | $ | 9,575 | |||||||
Provision for income taxes | 2,040 | 3,338 | 9,924 | 11,677 | |||||||||||
Interest expense, net of interest income | 15,334 | 17,134 | 47,472 | 53,589 | |||||||||||
Depreciation and amortization (1) | 6,913 | 9,320 | 20,635 | 27,245 | |||||||||||
EBITDA (2) | $ | 50,932 | $ | 34,178 | $ | 145,893 | $ | 102,086 | |||||||
Certain income/expense or gain/loss adjustments per our credit agreements (3) | (5,773 | ) | 3,409 | (3,063 | ) | 2,171 | |||||||||
Employee share based compensation, severance, relocation and retention expense (4) | 377 | 296 | 25 | 1,771 | |||||||||||
Cerberus fees (5) | 19 | 479 | 105 | 1,755 | |||||||||||
Global Advisory Group expenses (6) | — | — | — | 6,943 | |||||||||||
Other (7) | (342 | ) | (247 | ) | (1,684 | ) | (817 | ) | |||||||
Adjusted EBITDA | $ | 45,213 | $ | 38,115 | $ | 141,276 | $ | 113,909 |
(1) | Includes certain depreciation and amortization amounts which are classified as Cost of services in the condensed consolidated statements of operations. |
(2) | We define EBITDA as GAAP net income attributable to DTH, Inc. adjusted for interest, taxes, depreciation and amortization. We believe these non-GAAP financial measures are useful in evaluating operating performance and are regularly used by security analysts, institutional investors and other interested parties in reviewing the Company. Non-GAAP financial measures are not intended to be a substitute for any GAAP financial measure and, as calculated, may not be comparable to other similarly titled measures of the performance of other companies. |
(3) | Includes the completion of certain contracts and certain unusual income and expense items, as defined in the Indenture and New Senior Credit Facility. |
(4) | Includes post-employment benefit expense related to severance in accordance with ASC 712 - Compensation, relocation expenses, retention expense and share based compensation expense. |
(5) | Includes Cerberus Operations and Advisory Company expenses, net of recovery. |
(6) | Reflects Global Advisory Group cost incurred during nine months ended September 30, 2017, which we were able to add back to Adjusted EBITDA under the Indenture and New Senior Credit Facility in an aggregate amount up to a total of $30 million, which was fully utilized as of the second quarter of calendar year 2017. |
(7) | Includes changes due to fluctuations in foreign exchange rates, earnings from affiliates not received in cash, costs incurred pursuant to ASC 805 - Business Combination and other immaterial items. |
DTH, Inc. CY18 QTD Q3 | |||||||||||||||
DynAviation | DynLogistics | Headquarters/ Others | Consolidated | ||||||||||||
Operating income (loss) | $ | 21,152 | $ | 35,788 | $ | (13,433 | ) | $ | 43,507 | ||||||
Depreciation and amortization expense (1) | 272 | 632 | 6,009 | 6,913 | |||||||||||
Noncontrolling interests | — | — | (278 | ) | (278 | ) | |||||||||
Other income, net | 460 | (52 | ) | 382 | 790 | ||||||||||
EBITDA(2) | $ | 21,884 | $ | 36,368 | $ | (7,320 | ) | $ | 50,932 | ||||||
Certain income/expense or gain/loss adjustments per our credit agreements (3) | (1,263 | ) | (9,032 | ) | 4,522 | (5,773 | ) | ||||||||
Employee share based compensation, severance, relocation and retention expense (4) | (3 | ) | 100 | 280 | 377 | ||||||||||
Cerberus fees (5) | 9 | 9 | 1 | 19 | |||||||||||
Other (6) | (2 | ) | 53 | (393 | ) | (342 | ) | ||||||||
Adjusted EBITDA | $ | 20,625 | $ | 27,498 | $ | (2,910 | ) | $ | 45,213 |
(1) | Includes certain depreciation and amortization amounts which are classified as Cost of services in the condensed consolidated statements of operations. |
(2) | We define EBITDA as GAAP net income attributable to DTH, Inc. adjusted for interest, taxes, depreciation and amortization. We believe these non-GAAP financial measures are useful in evaluating operating performance and are regularly used by security analysts, institutional investors and other interested parties in reviewing the Company. Non-GAAP financial measures are not intended to be a substitute for any GAAP financial measure and, as calculated, may not be comparable to other similarly titled measures of the performance of other companies. |
(3) | Includes the completion of certain contracts and certain unusual income and expense items, as defined in the Indenture and New Senior Credit Facility. |
(4) | Includes post-employment benefit expense related to severance in accordance with ASC 712 - Compensation, relocation expenses, retention expense and share based compensation expense. |
(5) | Includes Cerberus Operations and Advisory Company expenses, net of recovery. |
(6) | Includes changes due to fluctuations in foreign exchange rates, earnings from affiliates not received in cash, costs incurred pursuant to ASC 805 - Business Combination and other immaterial items. |
DTH, Inc. CY17 QTD Q3 | |||||||||||||||
DynAviation | DynLogistics | Headquarters/ Others | Consolidated | ||||||||||||
Operating income (loss) | $ | 26,415 | $ | 9,125 | $ | (10,344 | ) | $ | 25,196 | ||||||
Depreciation and amortization expense (1) | 525 | 258 | 8,537 | 9,320 | |||||||||||
Noncontrolling interests | — | — | (295 | ) | (295 | ) | |||||||||
Other income, net | 5 | 56 | (104 | ) | (43 | ) | |||||||||
EBITDA(2) | $ | 26,945 | $ | 9,439 | $ | (2,206 | ) | $ | 34,178 | ||||||
Certain income/expense or gain/loss adjustments per our credit agreements (3) | — | 3,168 | 241 | 3,409 | |||||||||||
Employee share based compensation, severance, relocation and retention expense (4) | 87 | 123 | 86 | 296 | |||||||||||
Cerberus fees (5) | 262 | 171 | 46 | 479 | |||||||||||
Other (6) | — | 17 | (264 | ) | (247 | ) | |||||||||
Adjusted EBITDA | $ | 27,294 | $ | 12,918 | $ | (2,097 | ) | $ | 38,115 |
(1) | Includes certain depreciation and amortization amounts which are classified as Cost of services in the condensed consolidated statements of operations. |
(2) | We define EBITDA as GAAP net income attributable to DTH, Inc. adjusted for interest, taxes, depreciation and amortization. We believe these non-GAAP financial measures are useful in evaluating operating performance and are regularly used by security analysts, institutional investors and other interested parties in reviewing the Company. Non-GAAP financial measures are not intended to be a substitute for any GAAP financial measure and, as calculated, may not be comparable to other similarly titled measures of the performance of other companies. |
(3) | Includes certain unusual income and expense items, as defined in the Indenture and New Senior Credit Facility. |
(4) | Includes post-employment benefit expense related to severance in accordance with ASC 712 - Compensation, relocation expenses, retention expense and share based compensation expense. |
(5) | Includes Cerberus Operations and Advisory Company expenses, net of recovery. |
(6) | Includes changes due to fluctuations in foreign exchange rates, earnings from affiliates not received in cash, costs incurred pursuant to ASC 805 - Business Combination and other immaterial items. |
DTH, Inc. CY18 YTD Q3 | |||||||||||||||
DynAviation | DynLogistics | Headquarters/ Others | Consolidated | ||||||||||||
Operating income (loss) | $ | 72,368 | $ | 83,991 | $ | (32,010 | ) | $ | 124,349 | ||||||
Depreciation and amortization expense (1) | 1,057 | 1,700 | 17,878 | 20,635 | |||||||||||
Loss on early extinguishment of debt | — | — | (239 | ) | (239 | ) | |||||||||
Noncontrolling interests | — | — | (783 | ) | (783 | ) | |||||||||
Other income, net | 764 | (18 | ) | 1,185 | 1,931 | ||||||||||
EBITDA(2) | $ | 74,189 | $ | 85,673 | $ | (13,969 | ) | $ | 145,893 | ||||||
Certain income/expense or gain/loss adjustments per our credit agreements (3) | (1,150 | ) | (6,833 | ) | 4,920 | (3,063 | ) | ||||||||
Employee share based compensation, severance, relocation and retention expense (4) | (530 | ) | 265 | 290 | 25 | ||||||||||
Cerberus fees (5) | 45 | 35 | 25 | 105 | |||||||||||
Other (6) | — | 49 | (1,733 | ) | (1,684 | ) | |||||||||
Adjusted EBITDA | $ | 72,554 | $ | 79,189 | $ | (10,467 | ) | $ | 141,276 |
(1) | Includes certain depreciation and amortization amounts which are classified as Cost of services in the condensed consolidated statements of operations. |
(2) | We define EBITDA as GAAP net income attributable to DTH, Inc. adjusted for interest, taxes, depreciation and amortization. We believe these non-GAAP financial measures are useful in evaluating operating performance and are regularly used by security analysts, institutional investors and other interested parties in reviewing the Company. Non-GAAP financial measures are not intended to be a substitute for any GAAP financial measure and, as calculated, may not be comparable to other similarly titled measures of the performance of other companies. |
(3) | Includes the completion of certain contracts and certain unusual income and expense items, as defined in the Indenture and New Senior Credit Facility. |
(4) | Includes post-employment benefit expense related to severance in accordance with ASC 712 - Compensation, relocation expenses, retention expense and share based compensation expense. |
(5) | Includes Cerberus Operations and Advisory Company expenses, net of recovery. |
(6) | Includes changes due to fluctuations in foreign exchange rates, earnings from affiliates not received in cash, costs incurred pursuant to ASC 805 - Business Combination and other immaterial items. |
DTH, Inc. CY17 YTD Q3 | |||||||||||||||
DynAviation | DynLogistics | Headquarters/ Others | Consolidated | ||||||||||||
Operating (loss) income | $ | 66,060 | $ | 50,424 | $ | (42,235 | ) | $ | 74,249 | ||||||
Depreciation and amortization expense (1) | 1,139 | 594 | 25,512 | 27,245 | |||||||||||
Loss on early extinguishment of debt | — | — | (24 | ) | (24 | ) | |||||||||
Noncontrolling interests | — | — | (858 | ) | (858 | ) | |||||||||
Other income, net | 1,047 | 103 | 324 | 1,474 | |||||||||||
EBITDA(2) | $ | 68,246 | $ | 51,121 | $ | (17,281 | ) | $ | 102,086 | ||||||
Certain income/expense or gain/loss adjustments per our credit agreements (3) | — | 862 | 1,309 | 2,171 | |||||||||||
Employee share based compensation, severance, relocation and retention expense (4) | 1,143 | 528 | 100 | 1,771 | |||||||||||
Cerberus fees (5) | 1,029 | 605 | 121 | 1,755 | |||||||||||
Global Advisory Group expenses (6) | — | — | 6,943 | 6,943 | |||||||||||
Other (7) | — | 58 | (875 | ) | (817 | ) | |||||||||
Adjusted EBITDA | $ | 70,418 | $ | 53,174 | $ | (9,683 | ) | $ | 113,909 |
(1) | Includes certain depreciation and amortization amounts which are classified as Cost of services in the condensed consolidated statements of operations. |
(2) | We define EBITDA as GAAP net income attributable to DTH, Inc. adjusted for interest, taxes, depreciation and amortization. We believe these non-GAAP financial measures are useful in evaluating operating performance and are regularly used by security analysts, institutional investors and other interested parties in reviewing the Company. Non-GAAP financial measures are not intended to be a substitute for any GAAP financial measure and, as calculated, may not be comparable to other similarly titled measures of the performance of other companies. |
(3) | Includes certain unusual income and expense items, as defined in the Indenture and New Senior Credit Facility. |
(4) | Includes post-employment benefit expense related to severance in accordance with ASC 712 - Compensation, relocation expenses, retention expense and share based compensation expense. |
(5) | Includes Cerberus Operations and Advisory Company expenses, net of recovery. |
(6) | Reflects Global Advisory Group cost incurred during the nine months ended September 30, 2017 which we were able to add back to Adjusted EBITDA under the Indenture and New Senior Credit Facility in an aggregate amount up to a total of $30 million, which was fully utilized as of the second quarter of calendar year 2017. |
(7) | Includes changes due to fluctuations in foreign exchange rates, earnings from affiliates not received in cash, costs incurred pursuant to ASC 805 - Business Combination and other immaterial items. |
As of | ||||||||
September 30, 2018 | December 31, 2017 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 239,145 | $ | 168,250 | ||||
Accounts receivable, net of allowances of $5,076 and $10,142, respectively | 119,567 | 352,550 | ||||||
Contract assets | 163,876 | — | ||||||
Other current assets | 49,826 | 52,542 | ||||||
Total current assets | 572,414 | 573,342 | ||||||
Non-current assets | 143,796 | 162,375 | ||||||
Total assets | $ | 716,210 | $ | 735,717 | ||||
LIABILITIES AND DEFICIT | ||||||||
Current portion of long-term debt, net | $ | — | $ | 53,652 | ||||
Other current liabilities | 290,929 | 331,872 | ||||||
Total current liabilities | 290,929 | 385,524 | ||||||
Long-term debt, net | 536,945 | 527,039 | ||||||
Other long-term liabilities | 11,437 | 13,081 | ||||||
Total deficit attributable to Delta Tucker Holdings, Inc. | (128,550 | ) | (195,456 | ) | ||||
Noncontrolling interests | 5,449 | 5,529 | ||||||
Total deficit | (123,101 | ) | (189,927 | ) | ||||
Total liabilities and deficit | $ | 716,210 | $ | 735,717 |
As of | ||||||||
September 30, 2018 | December 31, 2017 | |||||||
Backlog(1): | ||||||||
Funded backlog | $ | 770 | $ | 968 | ||||
Unfunded backlog | 3,112 | 3,201 | ||||||
Total Backlog | $ | 3,882 | $ | 4,169 |
(1) | Backlog consists of funded and unfunded amounts under contracts. Funded backlog is equal to the amounts appropriated by a customer for payment of goods and services less actual revenue recognized as of the measurement date under that appropriation. Unfunded backlog is the dollar value of unexercised, priced contract options, and the unfunded portion of exercised contract options. Most of our U.S. government contracts allow the customer the option to extend the period of performance of a contract for a period of one or more years. |
For the nine months ended | ||||||||
September 30, 2018 | September 30, 2017 | |||||||
Cash Flow Information: | ||||||||
Net cash provided by operating activities | $ | 131,103 | $ | 10,137 | ||||
Net cash used in investing activities | (4,793 | ) | (1,273 | ) | ||||
Net cash used in financing activities | (55,415 | ) | (24,089 | ) | ||||
Net cash provided by operating activities | 131,103 | 10,137 | ||||||
Less: Purchase of property and equipment | (8,377 | ) | (3,931 | ) | ||||
Proceeds from sale of property and equipment | 13 | 537 | ||||||
Less: Purchase of software | (274 | ) | (646 | ) | ||||
Free cash flow | $ | 122,465 | $ | 6,097 |
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