Executive Mosaic is glad to announce Leidos Holdings (NYSE: LDOS) CEO Roger Krone, who is a three-time selection, as the newest inductee into the 2016 edition of the Wash100 — Executive Mosaic’s annual selection of the most influential voices in the government contracting arena.
2015 was an active period for the Reston, Va.-based government services contractor in Krone’s first full calendar year as CEO and Leidos’ second since the 2013 division of the former Science Applications International Corp. into the companies now known as Leidos and SAIC.
Leidos’ most significant move in 2015 came in the form of its deal to merge with the government services businesses of Lockheed Martin (NYSE: LMT) in a Reverse Morris Trust transaction with an estimated $5 billion enterprise value for the latter company’s shareholders.
Upon closure, this merger creates the government services industry’s largest company by annual forecasted revenue as Leidos expects the combined entity to record nearly $10 billion in sales per year, which the company’s investor slides say is more than double the amount of the two closest competitors.
“This transaction is the type of event that is often sought after but rarely found,” Krone told investors in a subsequent call to discuss the deal.
“Adding IS&GS to Leidos brings together technical capabilities and customer relationships across defense, civilian, government, health, intelligence and cyber markets.”
Krone and Leidos Chief Financial Officer James Reagan will continue in their current roles at the combined company after the merger completes.
The company also scored a landmark contract win in July when the Defense Department selected a Leidos-led team with Accenture (NYSE: ACN) and Cerner (Nasdaq: CERN) over two other groups to integrate a commercial electronic health records system for the military.
DoD has projected the cost of the Defense Healthcare Management System Modernization program to total around $9 billion over 10 years.
“We’re buying Cerner’s EHR system, Henry Schein’s Dental System and Accenture is helping us do training and deployment,” Krone told investors during the company’s third quarter earnings call.
Shares in Leidos jumped 5 percent the afternoon DoD announced the DHMSM award as reports surfaced of the company’s selection in late trade.
Leidos — which operates its fiscal year on a calendar basis — posted earnings per share that exceeded the consensus Wall Street expectation for its first and third quarters in 2015 and equaled analyst forecasts for the second quarter, with revenue even compared to the consensus outlook in all three quarters.
In its third quarter statement, the company raised its 2015 guidance for earnings per share to a range of $2.65-to-$2.80 from the previous outlook of $2.40-to-$2.60 and lifted revenue forecasts to $4.95 billion-to-$5.1 billion from the prior $4.80 billion-to-$5 billion.
Shares in Leidos rose 35 percent in 2015 and the company will release its full 2015 and fourth quarter financial results Feb. 18 with guidance for 2016.
Krone joined Leidos as chief executive in July 2014 after six years as head of Boeing‘s network and space systems unit.
Executive Mosaic congratulates Roger Krone and the Leidos team for their selection to receive this award.
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