Q2 2012 Earnings Call Transcript

Transcript Call Date 08/31/2011

As you can see in our earnings release today, there were significant awards this quarter. Let me take a moment to highlight two of these wins that each of which has an expected value to SAIC of greater than $100 million. The Integrated Justice Systems International LLC, a joint venture of SAIC and Tetra Tech, received a multiple award IDIQ contract to provide worldwide civilian police and criminal justice assistance to the Department of State's Bureau of international Narcotics and Law Enforcement Affairs.

The five-year contract has a ceiling of $10 billion for all awardees. This award is important as it represents our first major win in what we refer to as a smart power business area with more in the pipeline. SAIC also received a multiple award IDIQ contract to provide broad range of IT services to the Department of Veterans Affairs under the Transformation Twenty-One Total Technology program. The five year contract has a ceiling value of $12 billion.

I would now like to take a moment to highlight SAIC's approach for driving growth in health IT business.

To become a leading systems integrator and a professional services company in the federal and commercial health markets. In driving towards this goal we intend to maintain our leadership position in the military health system and expand our position at Department of Veterans Affairs and the Department of Health and Human Services.

To leverage our information integration, data analytics, cyber security, cloud and modeling and simulation capabilities to drive new health solution-based offerings for both federal and commercial health plans and capitalize on new opportunities as federal and commercial health markets converge.

We are investing our capital in this strategic growth area most recently through our acquisition of Vitalize Consulting Solutions Incorporated a leading provider of clinical, business and information technology services for healthcare enterprises. The addition of Vitalize will expand SAIC's health solutions portfolio in both commercial and federal markets to help customers better address electronic health records implementation, the combination of Vitalize's expertise in integrating commercial off-the-shelf software for electronic health records and systems with SAIC's information integration, data analytics and cyber security capabilities creates a powerful combination in the marketplace.

As a quick update to the divestiture announced early in the year during the second quarter the company completed the sale of its operations focused on providing IT services to oil and gas companies to Wipro Ltd. for proceeds of about $170 million. We plan to redeploy those proceeds consistent with our overall cash deployment strategy which will include targeted M&A in our strategic growth markets.

Before I turn the discussion over to Mark, I want to close by sharing a special recognition SAIC recently received. SAIC was awarded the Champions of Veterans Enterprise Award from the National Veterans Small Business Coalition for exemplary commitment to working with veteran-owned small businesses. The award is given in recognition of SAIC's strong support and use of veteran-owned and service-disabled veteran-owned small businesses as subcontractors and suppliers. It is the only award given to the industry by veteran-owned small business community.

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