Inside DI

DynCorp International Inc.’s Parent Reports Results For Fourth Quarter and Full Year 2012

DynCorp International parent, Delta Tucker Holdings, Inc., this week reported fourth quarter and full year 2012 financial results. Fourth quarter revenue for 2012 increased $45.1 million or 4.6% to $1,025.8 million compared to fourth quarter 2011.  Net loss attributable to Holdings for the fourth quarter 2012 was $7.7 million representing a $21.0 million improvement compared to fourth quarter 2011. The Company recorded an impairment of goodwill and intangibles of $13.7 million and $6.1 million, respectively in the fourth quarter compared to a recorded impairment of goodwill of $33.8 million in the fourth quarter of 2011. Excluding the tax adjusted impacts of both of these impairments, the Company had net income attributable to Holdings of $7.6 million in fourth quarter 2012 compared to net income attributable to Holdings of $3.2 million for the same period in 2011, an increase of $4.4 million.  Net loss attributable to Holdings also benefitted from improved operating profitability; lower selling, general and administrative expenses as a percentage of revenue; and reduced interest expense based on the $90 million reduction in long-term debt during the year. The Company reported Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) of $51.3 million for the fourth quarter, representing 5.0% of revenue and a 29.9% increase from the same period in 2011.

For the full year 2012, the Company reported revenue of $4.0 billion, an increase of $325.1 million, or 8.7%, compared to 2011.  Net loss attributable to Holdings of $8.9 million for 2012 improved $53.1 million from the net loss attributable to Holdings reported in 2011.  For the full year 2012, the Company recorded impairments to goodwill and intangibles of $50.7 million compared to $110.4 million in impairments to equity method investee and goodwill during 2011.  Excluding the tax adjusted impacts of both of these impairments, the Company had net income attributable to Holdings of $32.5 million for the full year 2012 compared to net income attributable to Holdings of $18.8 million for the same period in 2011, an increase of $13.7 million. Net loss attributable to Holdings also benefitted from improved operating profitability, primarily as a result of increased business in the Aviation and Logistics Civil Augmentation Program (LOGCAP) Groups; lower selling, general and administrative expenses as a percentage of revenue; and reduced interest expense based on the $90 million reduction in long-term debt during the year. The Company reported Adjusted EBITDA of $196.3 million for the year, representing 4.9% of revenue, in line with previous guidance.

“2012 was a year of challenge for our industry but our team responded with superior customer performance, a dedication to process improvement and a commitment to operational excellence that resulted in positive gains over 2011,” said Steve Gaffney, chairman and CEO.  “We maintained our win rate above-market, welcomed new customers, diversified our portfolio, and continued to delight our existing customers. Looking ahead, as expected, sequestration, the continuing resolution and troop drawdowns in Afghanistan present headwinds, which is why we dedicated the last two years to building a team that I am confident can succeed in this environment.”

Highlights include:

  • Fourth quarter revenue of $1,025.8 million, up 4.6% from fourth quarter 2011
  • Fourth quarter net loss attributable to Delta Tucker Holdings, Inc. of $7.7 million
  • Fourth quarter Adjusted EBITDA of $51.3 million, up 29.9% to fourth quarter 2011
  • Total backlog of $5.3 billion
  • Debt reduction of $90.0 million during the year

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