Engility Holdings, Inc. (NYSE:EGL) Q3 2017 Earnings Conference Call Transcript
Nov 02, 2017 • 05:00 pm ET
Good day, ladies and gentlemen, and welcome to the Engility Holdings Third Quarter 2017 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. (Operator Instructions) As a reminder, this conference call is being recorded.
I would now like to turn the conference over to Dave Spille, VP of IR. Please begin.
Thank you. Good afternoon, and thank you for joining us today to discuss our third quarter 2017 financial results. Please note that we provided presentation slides on the Investor Relations section of our website. On the call with me today are Lynn Dugle, CEO; and Wayne Rehberger, SVP, CFO.
Today, Lynn, will provide an overview of our operating results for the quarter, and then Wayne will discuss our third quarter financial results, and our outlook for the remainder of 2017. We then will close with a question-and-answer session.
(Forward-Looking Cautionary Statements)
And now, we'll turn the call over to Lynn.
Thanks, Dave, and good afternoon, everyone. Thank you for joining us to discuss our third quarter results. Over the last 18 months, we've made significant progress. We delivered a good third quarter with strong profitability, bookings and cash flow, and we remain on track to achieve our profit and cash flow goals for the year. And we are especially encouraged by the continued growth in our Space and Intel businesses.
Before I review the specifics of Q3 and planned growth drivers over the next 18-plus months, let me briefly comment on the macro budget environment. We are closely monitoring the Hill's efforts to pass spending bills prior to December 8. In the near-term, Congress will be focused on tax reform and modifying the Budget Control Act caps, prior to the passage of the 2018 spending bill. As such, we think it's likely that the short-term continuing resolution will be extended through the end of the year or early next.
That said, we remain optimistic that we will receive a budget that reflects the nation's very real need to increase military readiness, as well as modernize and secure our critical intelligence and space systems. We continue to believe the budget environment will be a net positive for Engility in 2018. Regardless of the timing of an approved budget, our team is focused on delivering the capabilities that our customers need, with or without a continuing resolution.
Now, let me turn to our Q3 results. Revenue was slightly down from Q2, driven by softness in our Products group and our Federal Civilian businesses which continued to be impacted from small business conversions throughout the year. Our profit and cash flow were up, beating our quarterly targets.
This strong cash flow enabled us to make $27 million in debt payments during the third quarter, and keeps us on track to meet our 2017 debt repayment commitment of $110 million.
With a book-to-bill ratio of 1:1 in the third quarter, we have successfully achieved a trailing 12-month book-to-bill ratio above 1 for five