KBR Announces First Quarter Fiscal 2024 Financial Results
KBR, Inc. announced strong Q1 2024 financial results with Adjusted EBITDA growth and margin expansion. New business awards and backlog were robust, totaling $20.8 billion. Sustainable Technology Solutions and Government Solutions segments performed well, with notable achievements and contracts. Financial highlights include revenue of $1.8 billion, net income of $93 million, Adjusted EBITDA of $207 million, and operating cash flows of $91 million. The company reaffirmed fiscal 2024 guidance with revenue expected between $7.4B - $7.7B and Adjusted EBITDA in the range of $810M - $850M.
Strong Q1 2024 financial results with Adjusted EBITDA growth and margin expansion.
New business awards and backlog totaling $20.8 billion showcase robust performance.
Sustainable Technology Solutions segment secured notable contracts and achievements.
Government Solutions segment performed well with significant contract wins.
Financial highlights include revenue of $1.8 billion, net income of $93 million, and Adjusted EBITDA of $207 million.
Operating cash flows increased to $91 million, and capital returned to shareholders totaled $79 million.
Company reaffirmed fiscal 2024 guidance with revenue expected between $7.4B - $7.7B and Adjusted EBITDA in the range of $810M - $850M.
Contraction in Readiness & Sustainment segment due to Ukraine funding delays.
Higher interest expense and other non-operating expenses impacted net income slightly negatively.
Strong Q1 2024 Performance
Adjusted EBITDA2 Growth with Margin Expansion
"KBR's extraordinary team has yet again surpassed expectations, delivering outstanding first-quarter results," said Stuart Bradie, KBR's President and CEO. "Our team's unwavering commitment to our customers has led to year-over-year increases across all key financial metrics, particularly in Adjusted EBITDA2 and operating cash flow. Bookings during the quarter were well-aligned with our end markets across energy security, national defense, human performance, and sustainability."
New Business Awards
Backlog and options as of March 29, 2024 totaled
Sustainable Technology Solutions (STS) delivered 0.9x TTM book-to-bill1 as of March 29, 2024, including awards and achievements in the quarter as follows:
- KBR's Purifier™ ammonia technology selected by Wuhuan Engineering Co. Ltd. for the expansion of El Nasr Company for Intermediate Chemicals' 1,200 metric tonnes per day ammonia plant in
Egypt . - Selected by First State Hydrogen, Inc. to provide engineering services to study the feasibility of developing a clean hydrogen production facility through electrolysis powered by renewable energy. The study is part of First State Hydrogen's vision to provide clean hydrogen for
Delaware and theU.S. mid-Atlantic and help the region meet its sustainability goals. - Signed an alliance agreement with GeoLith SAS to offer its advanced Direct Lithium Extraction technology, Li-Capt®. This technology enables zero-emission lithium extraction from untapped sources like geothermal and oil well brines.
- Awarded a project management contract by Sonangol for the design and construction oversight of a new 200,000 barrels per day refinery in Lobito,
Angola - one of the most significant and sustainable energy infrastructure projects in the region. - Secured a five-year asset condition monitoring program contract from Rabigh Refining & Petrochemical Company to deploy predictive maintenance services at its plant in Rabigh,
Saudi Arabia .
Government Solutions (GS) delivered 1.2x TTM book-to-bill1 as of March 29, 2024, including awards and achievements in the quarter as follows:
- Awarded new contracts estimated at more than
$450 million U.S. Government. - Awarded a new subcontract with Bering Straits Information Technologies in support of the
U.S. Air Force Air Combat Command to provide human performance optimization services at various military bases around the world. This contract expands upon KBR's more than 50 years of commitment to the wider health and human performance market within NASA and the Department of Defense. - Won a new one-year task order with three one-year options on the Seaport NxG IDIQ contract to assist with project execution for the Naval Information Warfare Center Atlantic, supporting the Defense Health Agency's cybersecurity services and risk management framework initiatives.
- Selected to provide specialized IT services that will equip the Royal Australian Navy with a more modern and cyber worthy Fleet Information Environment.
- Awarded a three-year contract, with a two year-option period, to deliver Heavy Equipment Transporter (HET) capability on behalf of the British Army.
- Awarded option years for LOGCAP V to support activity in NORTHCOM and EUCOM.
Summarized First Quarter 2024 Financial Results
Three Months Ended | |||
March 29, | March 31, | ||
Dollars in millions, except share data | 2024 | 2023 | |
Revenues | 1,818 | 1,703 | |
Operating income | 166 | 144 | |
Net income attributable to KBR | 93 | 86 | |
Adjusted EBITDA2 | 207 | 182 | |
Operating income margin % | 9.1 % | 8.5 % | |
Adjusted EBITDA2 margin % | 11.4 % | 10.7 % | |
Earnings per share: | |||
Diluted earnings per share | 0.69 | 0.56 | |
Adjusted earnings per share2 | 0.77 | 0.67 | |
Cash flows: | |||
Operating cash flows | 91 | 35 | |
Adjusted operating cash flows2 | 91 | 35 | |
Adjusted free cash flows2 | 66 | 16 | |
Financial Highlights for the Three Months Ended March 29, 2024
- Revenue of
$1.8 billion 7% on a year-over-year-basis - Net income attributable to KBR of
$93 million $207 million 14% on a year-over-year basis (11.4% Adjusted EBITDA2 margin) - Diluted EPS of
$0.69 $0.77 15% on a year-over-year basis - Operating cash flows of
$91 million - Bookings and options of
$1.9 billion
Commentary on the Three Months Ended March 29, 2024
Revenues were
Net income attributable to KBR was
Adjusted EBITDA2 was
Diluted earnings per share was
Operating cash flows were
Capital returned to shareholders totaled
Reaffirms Fiscal 2024 Guidance
The table below summarizes FY24 guidance and represents our views as of April 30, 2024.
Fiscal 2024 Guidance | |
Revenue | |
Adjusted EBITDA | |
Diluted EPS* | |
Adjusted EPS* | |
Operating cash flows |
* Fiscal 2024 Diluted and Adjusted EPS guidance is calculated using a share count of approximately 135 million. |
The company does not provide a reconciliation of Adjusted EBITDA to the most comparable GAAP financial measure on a forward-looking basis because the company is unable to predict with reasonable certainty the ultimate outcome of legal proceedings, unusual gains and losses, and acquisition-related expenses without unreasonable effort, which could be material to the company's results computed in accordance with GAAP.
Conference Call Details
The company will host a conference call to discuss its first quarter financial results on Tuesday, April 30, 2024, at 7:30 a.m. Central Time. The conference call will be webcast simultaneously through the Investor Relations section of KBR's website at investors.kbr.com. A replay of the webcast will be available shortly after the call on KBR's website or by telephone at +1.866.813.9403, passcode: 154682.
About KBR
We deliver science, technology and engineering solutions to governments and companies around the world. KBR employs approximately 35,000 people worldwide with customers in more than 80 countries and operations in over 30 countries. KBR is proud to work with its customers across the globe to provide technology, value-added services, and long-term operations and maintenance services to ensure consistent delivery with predictable results. At KBR, We Deliver.
Visit www.kbr.com
Forward-Looking Statements
The statements in this press release that are not historical statements, including statements regarding our expectations for our future financial performance, effective tax rate, operating cash flows, contract revenues, award activity and backlog, program activity, our business strategy, interest expense, and our plans for raising and deploying capital and paying dividends, are forward-looking statements within the meaning of the federal securities laws. These statements are subject to numerous risks and uncertainties, many of which are beyond the company's control that could cause actual results to differ materially from the results expressed or implied by the statements. These risks and uncertainties include, but are not limited to: uncertainty, delays or reductions in government funding, appropriations and payments, including as a result of continuing resolution funding mechanisms, government shutdowns or changing budget priorities; developments and changes in government laws, regulations and policies that may require us to pause, delay or abandon new and existing projects; the ongoing conflict between
The company's most recently filed Annual Report on Form 10-K, any subsequent Form 10-Qs and 8-Ks, and other
1 As used throughout this release and consistent with our practice, book-to-bill excludes long-term |
2 As used throughout this earnings release, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted earnings per share, Adjusted operating cash flows, and Adjusted free cash flows are non-GAAP financial measures. See additional information at the end of this release regarding non-GAAP financial information, including reconciliations to the nearest GAAP measures. |
KBR, Inc. | ||||
Condensed Consolidated Statements of Operations | ||||
(In millions, except for per share data) | ||||
(Unaudited) | ||||
Three Months Ended | ||||
March 29, | March 31, | |||
2024 | 2023 | |||
Revenues: | ||||
Government Solutions | $ 1,386 | $ 1,328 | ||
Sustainable Technology Solutions | 432 | 375 | ||
Total revenues | 1,818 | 1,703 | ||
Gross profit | 248 | 245 | ||
Equity in earnings of unconsolidated affiliates | 30 | 23 | ||
Selling, general and administrative expenses | (121) | (124) | ||
Gain on disposition of assets and investments | 6 | — | ||
Other | 3 | — | ||
Operating income (loss): | ||||
Government Solutions | 115 | 102 | ||
Sustainable Technology Solutions | 86 | 82 | ||
Other | (35) | (40) | ||
Total operating income (loss) | 166 | 144 | ||
Interest expense | (31) | (26) | ||
Other non-operating expense | (6) | (2) | ||
Income before income taxes | 129 | 116 | ||
Provision for income taxes | (35) | (30) | ||
Net income | 94 | 86 | ||
Less: Net income attributable to noncontrolling interests | 1 | — | ||
Net income attributable to KBR | $ 93 | $ 86 | ||
Adjusted EBITDA1 | $ 207 | $ 182 | ||
Diluted EPS | $ 0.69 | $ 0.56 | ||
Adjusted EPS1 | $ 0.77 | $ 0.67 | ||
Diluted weighted average common shares outstanding | 135 | 154 | ||
Adjusted weighted average common shares outstanding | 135 | 140 | ||
1 See additional information at the end of this release regarding non-GAAP financial information, including a reconciliation to the nearest GAAP measure |
KBR, Inc. | ||||
Condensed Consolidated Balance Sheets | ||||
(In millions, except share data) | ||||
March 29, | December 29, | |||
2024 | 2023 | |||
(Unaudited) | ||||
Assets | ||||
Current assets: | ||||
Cash and cash equivalents | $ 314 | $ 304 | ||
Accounts receivable, net of allowance for credit losses of | 1,007 | 981 | ||
Contract assets | 202 | 177 | ||
Other current assets | 211 | 189 | ||
Total current assets | 1,734 | 1,651 | ||
Property, plant, and equipment, net of accumulated depreciation of | 247 | 239 | ||
Operating lease right-of-use assets | 140 | 138 | ||
Goodwill | 2,110 | 2,109 | ||
Intangible assets, net of accumulated amortization of | 605 | 618 | ||
Equity in and advances to unconsolidated affiliates | 178 | 206 | ||
Deferred income taxes | 205 | 239 | ||
Other assets | 404 | 365 | ||
Total assets | $ 5,623 | $ 5,565 | ||
Liabilities and Shareholders' Equity | ||||
Current liabilities: | ||||
Accounts payable | $ 669 | $ 593 | ||
Contract liabilities | 348 | 359 | ||
Accrued salaries, wages and benefits | 301 | 340 | ||
Current maturities of long-term debt | 22 | 31 | ||
Other current liabilities | 239 | 249 | ||
Total current liabilities | 1,579 | 1,572 | ||
Employee compensation and benefits | 111 | 120 | ||
Income tax payable | 106 | 106 | ||
Deferred income taxes | 81 | 106 | ||
Long-term debt | 1,842 | 1,801 | ||
Operating lease liabilities | 175 | 176 | ||
Other liabilities | 310 | 290 | ||
Total liabilities | 4,204 | 4,171 | ||
Commitments and Contingencies | ||||
KBR shareholders' equity: | ||||
Preferred stock, | — | — | ||
Common stock, | — | — | ||
Paid-in capital in excess of par | 2,514 | 2,505 | ||
Retained earnings | 1,145 | 1,072 | ||
Treasury stock, 47,582,011 shares and 46,646,024 shares, at cost, respectively | (1,339) | (1,279) | ||
Accumulated other comprehensive loss | (912) | (915) | ||
Total KBR shareholders' equity | 1,408 | 1,383 | ||
Noncontrolling interests | 11 | 11 | ||
Total shareholders' equity | 1,419 | 1,394 | ||
Total liabilities and shareholders' equity | $ 5,623 | $ 5,565 | ||
KBR, Inc. | |||
Condensed Consolidated Statements of Cash Flows | |||
(In millions) | |||
(Unaudited) | |||
Three Months Ended | |||
March 29, | March 31, | ||
2024 | 2023 | ||
Cash flows from operating activities: | |||
Net income (loss) | $ 94 | $ 86 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 36 | 36 | |
Equity in earnings of unconsolidated affiliates | (30) | (23) | |
Deferred income tax | 11 | 14 | |
Gain on disposition of assets | (6) | — | |
Other | 9 | 10 | |
Changes in operating assets and liabilities: | |||
Accounts receivable, net of allowance for credit losses | (30) | (130) | |
Contract assets | (26) | (7) | |
Accounts payable | 78 | 110 | |
Contract liabilities | (8) | 6 | |
Accrued salaries, wages and benefits | (35) | (36) | |
Payments on operating lease obligation | (16) | (17) | |
Payments from unconsolidated affiliates, net | — | 6 | |
Distributions of earnings from unconsolidated affiliates | 43 | 24 | |
Pension funding | (7) | (4) | |
Other assets and liabilities | (22) | (40) | |
Total cash flows provided by operating activities | $ 91 | $ 35 | |
Cash flows from investing activities: | |||
Purchases of property, plant and equipment | $ (25) | $ (19) | |
Proceeds from sale of assets or investments | 6 | — | |
Return of (investments in) equity method joint ventures, net | 29 | 61 | |
Other | 1 | — | |
Total cash flows provided by investing activities | $ 11 | $ 42 | |
Cash flows from financing activities: | |||
Borrowings on long-term debt | 24 | — | |
Borrowings on Revolver | 93 | — | |
Payments on short-term and long-term debt | (75) | (4) | |
Payments on settlement of warrants | (33) | — | |
Debt issuance costs | (16) | — | |
Payments of dividends to shareholders | (18) | (16) | |
Payments to reacquire common stock | (61) | (61) | |
Other | (5) | 27 | |
Total cash flows used in financing activities | $ (91) | $ (54) | |
Effect of exchange rate changes on cash | (1) | 4 | |
Increase in cash and cash equivalents | 10 | 27 | |
Cash and cash equivalents at beginning of period | 304 | 389 | |
Cash and cash equivalents at end of period | $ 314 | $ 416 | |
Supplemental disclosure of cash flows information: | |||
Noncash financing activities | |||
Dividends declared | $ 20 | $ 18 | |
KBR, Inc. | |||
Backlog Information | |||
(In millions) | |||
(Unaudited) | |||
March 29, | December 29, | ||
2024 | 2023 | ||
Government Solutions | $ 12,888 | $ 12,790 | |
Sustainable Technology Solutions | 4,363 | 4,545 | |
Total backlog | $ 17,251 | $ 17,335 | |
Award options | 3,596 | 4,397 | |
Total backlog and options | $ 20,847 | $ 21,732 | |
Total backlog and options at March 29, 2024 totaled
Non-GAAP Financial Information
The following information provides reconciliations of certain non-GAAP financial measures presented in the press release to which this reconciliation is attached to the most directly comparable financial measures calculated and presented in accordance with generally accepted accounting principles (GAAP). The company has provided the non-GAAP financial information presented in the press release as information supplemental and in addition to the financial measures presented in the press release that are calculated and presented in accordance with GAAP. Such non-GAAP financial measures should not be considered superior to, as a substitute for or alternative to, and should be considered in conjunction with, the GAAP financial measures presented in the press release. The non-GAAP financial measures in the press release may differ from similar measures used by other companies.
EBITDA and Adjusted EBITDA
We evaluate performance based on EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin. EBITDA is defined as Net income attributable to KBR, plus Interest expense; Other non-operating expense; Provision for income taxes; and Depreciation and amortization. Adjusted EBITDA excludes certain amounts included in EBITDA. Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by Revenues. EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin for each of the three month periods ended March 29, 2024 and March 31, 2023 are considered non-GAAP financial measures under SEC rules because EBITDA and Adjusted EBITDA exclude certain amounts included in the calculation of net income (loss) attributable to KBR in accordance with GAAP for such periods. Management believes EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin afford investors a view of what management considers KBR's core performance for each of the three month periods ended March 29, 2024 and March 31, 2023 and also affords investors the ability to make a more informed assessment of such core performance for the comparable periods.
Three Months Ended | |||
March 29, | March 31, | ||
Dollars in millions | 2024 | 2023 | |
Net income attributable to KBR | $ 93 | $ 86 | |
Adjustments | |||
• Interest expense | 31 | 26 | |
• Other non-operating expense | 6 | 2 | |
• Provision for income taxes | 35 | 30 | |
• Depreciation and amortization | 36 | 36 | |
EBITDA | $ 201 | $ 180 | |
Adjustments | |||
• Acquisition, integration and restructuring | 1 | 1 | |
• Ichthys commercial resolution | 4 | 2 | |
• Legacy legal fees and settlements | 1 | 5 | |
• Benefits related to exit from Russian commercial projects | — | (6) | |
Adjusted EBITDA | $ 207 | $ 182 | |
Three Months Ended | ||||
March 29, | March 31, | |||
Dollars in millions | 2024 | 2023 | ||
Operating income | $ 166 | $ 144 | ||
Adjustments | ||||
• Net income attributable to noncontrolling interests | (1) | — | ||
• Depreciation and amortization | 36 | 36 | ||
EBITDA | $ 201 | $ 180 | ||
Adjusted EPS
Adjusted earnings per share (Adjusted EPS) for each of the three month periods ended March 29, 2024 and March 31, 2023 is considered a non-GAAP financial measure under SEC rules because Adjusted EPS excludes certain amounts included in the Diluted EPS calculated in accordance with GAAP for such periods. The most directly comparable financial measure calculated in accordance with GAAP is Diluted EPS for the same periods. Management believes that Adjusted EPS affords investors a view of what management considers KBR's core earnings performance for each of the three month periods ended March 29, 2024 and March 31, 2023 and also affords investors the ability to make a more informed assessment of such core earnings performance for the comparable periods.
We have calculated Adjusted EPS for each of the three month periods ended March 29, 2024 and March 31, 2023 by adjusting Diluted EPS for the items included in the table below.
Three Months Ended | |||
March 29, | March 31, | ||
2024 | 2023 | ||
Diluted EPS | $ 0.69 | $ 0.56 | |
Adjustments | |||
• Amortization related to acquisitions | 0.04 | 0.05 | |
• Ichthys commercial dispute costs | 0.03 | 0.01 | |
• Acquisition, integration and restructuring | 0.01 | 0.01 | |
• Impact of convert accounting | — | 0.05 | |
• Legacy legal fees and settlements | — | 0.02 | |
• Benefits related to exit from Russian commercial projects | — | (0.03) | |
Adjusted EPS | $ 0.77 | $ 0.67 | |
Diluted weighted average common shares outstanding | 135 | 154 | |
Adjusted weighted average common shares outstanding | 135 | 140 | |
We have calculated the 2024 guidance for Adjusted EPS by adjusting Diluted EPS for the items included in the table below.
Fiscal 2024 Guidance | |||
Diluted EPS1 guidance | |||
Adjustments | |||
• Amortization related to acquisitions | 0.15 | ||
• Ichthys commercial dispute costs | 0.03 | ||
• Acquisition, integration and restructuring | 0.03 | ||
• Legacy legal fees | 0.01 | ||
Adjusted EPS1 guidance | |||
--------- |
1 Diluted and Adjusted Fiscal 2024 EPS guidance are calculated using a share count of approximately 135 million. |
Adjusted Cash Flows Provided by Operating Activities and Adjusted Free Cash Flows
Adjusted operating cash flows and Adjusted free cash flows are considered non-GAAP financial measures under SEC rules. Adjusted operating cash flows exclude certain amounts included in the cash flows provided by operating activities calculated in accordance with GAAP. Adjusted free cash flows exclude capital expenditures from Adjusted operating cash flows. The most directly comparable financial measure calculated in accordance with GAAP is cash flows provided by operating activities. Management believes that Adjusted operating cash flows and Adjusted free cash flows afford investors a view of what management considers KBR's core operating cash flow performance and also afford investors the ability to make a more informed assessment of such core operating cash generation performance.
We have calculated Adjusted operating cash flows and Adjusted free cash flows for each of the three month periods ended March 29, 2024 and March 31, 2023 by adjusting operating cash flow provided by operating activities for items included in the table below.
Three Months Ended | |||
March 29, | March 31, | ||
Dollars in millions | 2024 | 2023 | |
Cash flows provided by operating activities | $ 91 | $ 35 | |
Add: Legacy legal settlement (after tax) | — | — | |
Adjust: CARES Act temporary tax repayment | — | — | |
Adjusted operating cash flows | $ 91 | $ 35 | |
Less: Capital expenditures | (25) | (19) | |
Adjusted free cash flows | $ 66 | $ 16 | |
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SOURCE KBR, Inc.
FAQ
<p>What were KBR's revenues for the first quarter of 2024?</p>
KBR's revenues for the first quarter of 2024 were $1.8 billion, up 7% compared to the previous year.
<p>How much was KBR's net income in Q1 2024?</p>
KBR reported a net income of $93 million for the first quarter of 2024.
<p>What is KBR's Adjusted EBITDA for the first quarter of 2024?</p>
KBR's Adjusted EBITDA for the first quarter of 2024 was $207 million.
<p>What is the fiscal 2024 revenue guidance provided by KBR?</p>
KBR's fiscal 2024 guidance indicates revenue expectations between $7.4B - $7.7B.
<p>What is the range for KBR's Adjusted EBITDA in fiscal year 2024?</p>
KBR's Adjusted EBITDA range for fiscal year 2024 is $810M - $850M.
