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H.S. freshman Avg
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New words:
ACCOM, adjudication, Afghan, airfield, Border, bore, bring, Calibration, CBP, Cessna, Citation, Coast, conflict, delayed, deposited, Diplomatic, entry, fleet, hand, Hedging, Importantly, Inspection, Iran, Laboratory, lift, METCAL, Metrology, peaceful, PMEL, Precision, professional, Progressive, Protection, pursue, receipt, recourse, Region, Relief, rescinded, Targeted, tension, thereunder, threat, traffic, wind
Removed:
bipartisan, grant, guide, mature, Naval, ruling
Financial report summary
?Competition
AAR • Boeing • Booz Allen Hamilton • General Dynamics • RTX • Emcor • Textron • Leidos • AECOM • Mantech InternationalRisks
- We may not be able to generate sufficient cash to service all of our indebtedness, including the New Senior Credit Facility, and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.
- Our debt agreements contain restrictions that limit our flexibility in operating our business.
- Repayment of our debt, including the New Senior Credit Facility, Second Lien Notes and Cerberus 3L Notes, is dependent on cash flow generated by our subsidiaries.
- Despite our indebtedness level, we and our subsidiaries still may be able to incur significant additional amounts of debt, which could further exacerbate the risks associated with our current or future levels of indebtedness.
- Our degree of leverage could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry, expose us to interest rate risk to the extent of our variable rate debt and prevent us from meeting our obligations under our debt obligations.
- We rely on sales to U.S. government entities. A loss of contracts, a failure to obtain new contracts, a reduction of sales or award fees under existing contracts with the U.S. government or a decline or reprioritization of funding in the U.S. defense budget or delays in the budget process could adversely affect our operating performance and our ability to generate cash flow to fund our operations.
- Our U.S. government contracts may be terminated by the U.S. government at any time prior to their completion and contain other unfavorable provisions, which could lead to an unexpected loss of revenue and a reduction in backlog.
- Our U.S. government contracts are subject to competitive bidding, both upon initial issuance and re-competition. If we are unable to successfully compete in the bidding process or if we fail to win re-competitions, it could adversely affect our operating performance and lead to an unexpected loss of revenue.
- Our IDIQ contracts are not firm orders for services, and we may never receive revenue from these contracts, which could adversely affect our operating performance.
- Our cost of performing under time-and-materials and fixed-price contracts may exceed our revenue, which would result in a recorded loss on the contracts.
- We are subject to investigation by government agencies, which could result in our inability to receive government contracts and could adversely affect our future operating performance.
- A negative audit or other actions by the U.S. government could adversely affect our operating performance.
- Economic conditions could impact our business.
- Our operations involve considerable risks and hazards. An accident or incident involving our employees or third parties could harm our reputation, affect our ability to compete for business, and if not adequately insured or indemnified, could adversely affect our results of operations and financial condition.
- Political destabilization or insurgency in the regions in which we operate may have a material adverse effect on our operating performance.
- We are exposed to risks associated with operating internationally.
- Our business could be negatively impacted by security threats, including physical and cyber security threats, and other disruptions.
- Government withholding regulations could adversely affect our operating performance.
- Proceedings against us in domestic and foreign courts could result in legal costs and adverse monetary judgments, adversely affecting our operating performance and causing harm to our reputation.
- We are subject to certain U.S. laws and regulations, which are the subject of rigorous enforcement by the U.S. government; our noncompliance with such laws and regulations could adversely affect our future operating performance.
- Environmental laws and regulations may subject us to significant costs and liabilities that could adversely affect our operating performance.
- The expiration of our collective bargaining agreements could result in increased operating costs or work disruptions, which could potentially affect our operating performance.
- If we experience loss of our skilled personnel, including members of senior management, it may have an adverse effect on our operations and/or our operating performance.
- If our subcontractors or joint venture partners fail to perform their contractual obligations, then our performance as the prime contractor and our ability to obtain future business could be materially and adversely impacted.
- We are controlled by Cerberus Capital Management, L.P. and affiliates ("Cerberus"), who will be able to make important decisions affecting our business.
- We may compete with, or enter into transactions with, entities in which our controlling stockholder may hold a substantial interest.
- Competition in our industry could limit our ability to attract and retain customers or employees, which could result in a loss of revenue and/or a reduction in margins, which could adversely affect our operating performance.
- Changes in, or interpretations of, accounting principles could have a significant impact on our financial position and results of operations.
- Future restatement of our financial statements could adversely affect our business.
- We use estimates when accounting for contracts. Changes in estimates could affect our profitability and our overall financial position.
- Goodwill and other intangible assets on our balance sheet have been significantly impaired and may continue to be impaired.
- Acquisition and divestiture related transactions require substantial management resources and may disrupt our business and divert our management from other responsibilities. Acquisitions and divestitures are accompanied by other risks, including:
- If we fail to manage acquisitions, divestitures, and other transactions successfully, our financial results, business, and future prospects could be harmed.
- The adoption of the Long-Term Cash Incentive Bonus Plan could substantially increase the cost to acquire the Company or prevent or delay a change in control.
Management Discussion
- Revenue — Revenue for the three months ended June 30, 2019 was $487.8 million, a decrease of $62.5 million, or 11.4%, compared to $550.4 million for the three months ended June 30, 2018. The decrease was primarily due to the completion of the Bureau for International Narcotics and Law Enforcement Affairs, Office of Aviation ("INL Air Wing") extension and the wind down of the T-6 Contractor Operated and Maintained Base Supply ("T-6 COMBS") Bridge contract, partially offset by increased scope on the Air Force Contractor Augmentation Program ("AFCAP") and the CLS Transport contract. See further discussion of our revenue results in the "Results by Segment" section below.
- Cost of services — Cost of services are comprised of direct labor, direct material, overhead, subcontractors, travel, supplies and other miscellaneous costs. Cost of services for the three months ended June 30, 2019 was $428.9 million, a decrease of $47.7 million, or 10.0%, compared to the three months ended June 30, 2018. The decrease in Cost of services was driven by the decrease in revenue, as discussed above. As a percentage of revenue, Cost of services increased to 87.9% for the three months ended June 30, 2019 compared to 86.6% for the three months ended June 30, 2018. See further discussion of the impact of program margins in the "Results by Segment" section below.
- Selling, general and administrative expenses ("SG&A") — SG&A primarily relates to functions such as management, legal, financial accounting, contracts and administration, human resources, management information systems, purchasing, and business development. SG&A increased by $1.3 million, or 5.2%, to $26.0 million during the three months ended June 30, 2019 compared to the three months ended June 30, 2018 primarily due to increased professional fees and legal costs. SG&A as a percentage of revenue increased to 5.3% for the three months ended June 30, 2019 compared to 4.5% for the three months ended June 30, 2018 as a result of the increase in SG&A and decrease in revenue discussed above.