[2] TRW Announces Record First Quarter 2000 Results; Earnings Increase 46 Percent.Business Editors CLEVELAND--(BUSINESS WIRE)--April 19, 2000 TRW TRW The Real World (TV reality show) TRW The Right Way TRW Tactical Reconnaissance Wing TRW The Retriever Weekly (University of Maryland, Baltimore, MD) TRW Thompson Ramo Wooldridge Inc Inc. (NYSE NYSE See: New York Stock Exchange :TRW)
Financial Highlights First Quarter First Quarter
2000 1999
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- Sales $4.6 billion $3.1 billion
- Excluding Unusual Items
- Net Earnings $152.1 million $104.2 million
- Diluted Earnings
Per Share $1.22 per share $0.86 per share
- Including Unusual Items
- Net Earnings(Loss) $209.3 million ($28.4) million
- Diluted Earnings(Loss)
Per Share $1.68 per share ($0.24) per share
- Net Debt To Total Capital 68.2 percent 83.5 percent
TRW Inc. (NYSE:TRW) today reported that for the first quarter ended March 31, 2000, net earnings increased 46 percent to a record $152.1 million, or $1.22 per share, excluding unusual items. This compares with first quarter 1999 net earnings of $104.2 million, or $0.86 per share. First quarter 2000 sales increased 47 percent to $4.6 billion, compared with $3.1 billion the first quarter of 1999. TRW's first quarter 2000 earnings and sales reflect the results of LucasVarity LucasVarity plc was a UK motor parts manufacturer, created by a merger of the British Lucas Industries plc and the North American Varity Corporation in August 1996. Foundation At the time of the merger LucasVarity announced plans for a £65 million pound savings programme. , which was acquired on March 25, 1999. Excluding LucasVarity, first quarter 2000 sales increased 5 percent, compared with 1999. Including unusual items, net earnings in the first quarter of 2000 were a record $209.3 million, or $1.68 per share, compared with a net loss of $28.4 million, or $0.24 per share, in the first quarter of 1999. For the first quarter 2000, unusual items resulted in net earnings of $57.2 million, or $0.46 per share. After-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. net gains of $126.1 million from asset sales, primarily the sale of RF Micro Devices RF Micro Devices (NASDAQ: RFMD) is a manufacturer of integrated circuits, founded in Greensboro, NC, in 1991 by William J. Pratt, Powell T. Seymour and Jerry D. Neal.[1]. (RFMD RFMD RF Micro Devices (NASDAQ) RFMD Rotary Fluid Management Device ) stock and the company's Nelson Stud Welding Stud welding is a form of spot welding where a bolt or specially formed nut is welded on to another metal part. The bolts may be automatically fed into the spot welder. Weld nuts generally have a flange with small nubs that melt to form the weld. and Australian Australian pertaining to or originating in Australia. Australian bat lyssavirus disease see Australian bat lyssavirus disease. Australian cattle dog a medium-sized, compact working dog used for control of cattle. steering The process whereby builders, brokers, and rental property managers induce purchasers or lessees of real property to buy land or rent premises in neighborhoods composed of persons of the same race. businesses, were offset by a $48.7 million charge that was previously announced relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc warranty An assurance, promise, or guaranty by one party that a particular statement of fact is true and may be relied upon by the other party. Warranties are used in a variety of commercial situations. In many instances a business may voluntarily make a warranty. reserves, claims, and threatened litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. ; $11.8 million for automotive restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. ; and $8.4 million of unrealized losses Unrealized Loss A loss that results from holding onto an asset rather than cashing it in and officially taking the loss. Notes: Let's say you own a stock that is down 50%, but you haven't sold it to realize the loss yet. This is said to be an unrealized loss. on foreign currency hedges Currency hedge Applies mainly to international equities. Hedging technique to guard against foreign exchange fluctuations (i.e., short Euro l00 mm when holding a long position of Euro l00 mm in stocks). . First quarter 1999 net earnings included unusual items that resulted in net after-tax charges of $132.6 million, or $1.10 per share. These charges included $125.9 million for expenses related to the LucasVarity acquisition, of which $85.3 million related to purchased in-process research and development; $28.1 million for losses on fixed-price type contacts; and $7.1 million for automotive restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). . These charges were partially offset by after-tax gains of $28.5 million related to RFMD. "We made excellent progress against our plan to deleverage Deleverage The reduction of financial instruments or borrowed capital previously used to increase the potential return of an investment. It is the opposite of leverage. Notes: Increasing leverage increases a firm's risk, therefore, deleveraging attempts to lower risk. the balance sheet, and we reduced net debt by approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $1.2 billion in the first quarter," said Joseph T. Gorman Joseph T. Gorman is on the Board of Directors of Alcoa. Principal occupation: Chairman and Chief Executive Officer of Moxahela Enterprises, LLC, a venture capital firm, since 2001. Recent business experience: Mr. Gorman retired as Chairman of TRW Inc. , chairman and chief executive officer. "We completed our actions to divest To deprive or take away. Divest is usually used in reference to the relinquishment of authority, power, property, or title. If, for example, an individual is disinherited, he or she is divested of the right to inherit money. significant noncore businesses with the closing of Lucas Lucas (l  `kəs), variant of Luke. Diesel Systems, Lucas Rists
Wiring Systems, and Nelson Stud Welding. Through innovative forward
sales forward sales npl → ventas fpl a término agreements and the outright sale of 2.2 million shares, we have
further monetized a portion of our ownership position in RFMD.
"I am particularly excited about developments in the commercialization of TRW technology," Gorman Gorman may refer to: People with the surname Gorman
Contraction of we have. we've have experienced in unlocking the value of TRW's vast technology bank through partnerships with RFMD, Astrolink, E-Sync, and E-Certify continued this quarter with the announcement of the merger forming Endwave Corporation, creating an industry-leading provider of broadband wireless See wireless broadband. Internet access See how to access the Internet. products. We followed that with the announcement of an equity ownership in Paracel Inc., which has agreed to be acquired by Celera Genomics ge·no·mics n. The study of all of the nucleotide sequences, including structural genes, regulatory sequences, and noncoding DNA segments, in the chromosomes of an organism. Corporation, through which TRW technology will be used in the documentation of human gene sequences." Automotive Operations First quarter sales in TRW's automotive business increased 55 percent to a record $3.0 billion from $2.0 billion in the first quarter of 1999, due to the acquisition of LucasVarity. Excluding LucasVarity, first quarter sales were approximately even with the prior year's, as higher volume was offset primarily by the effect of the strong dollar and price reductions. Total automotive profit before tax and unusual items for the first quarter of 2000 increased to a record $241.5 million, compared with $145.5 million in the first quarter of 1999, primarily due to the inclusion of LucasVarity. Excluding LucasVarity results and unusual items, profit before tax increased 4 percent to $143.1 million, compared with the first quarter of 1999. This improvement was primarily due to an increase in volume and benefits from the company's cost-reduction programs, partially offset by continuing price reductions. "I am very encouraged by the overall improvement in our automotive business," said Gorman. "As evidenced by its solid first quarter performance, the effects of restructuring activities over the past year are taking hold. "Driven by its new leadership team, changes within the automotive organization continue at a robust pace. Focusing on three initiatives -- purchasing, working capital, and capital expenditures -- we are driving improved financial performance while continuing to meet our customer commitments," Gorman said. "Going forward, these actions should have a positive impact on performance throughout the organization. I am also pleased that in the quarter, TRW received more than $1.2 billion in new automotive sales awards, with significant awards for electric steering and vehicle stability control." Aerospace and Information Systems In TRW's aerospace and information systems business, first quarter sales increased 35 percent to a record $1.5 billion from $1.1 billion in the first quarter of 1999, primarily due to the inclusion of LucasVarity sales and organic growth. Excluding LucasVarity, first quarter 2000 sales increased 13 percent, primarily due to growth in the civil federal marketplace, specifically related to the U.S. Census census, periodic official count of the number of persons and their condition and of the resources of a country. In ancient times, among the Jews and Romans, such enumeration was mainly for taxation and conscription purposes. and Treasury communications programs Software that manages the transmission of data between computers, typically via modem and the serial port. Such programs were very popular for connecting to BBSs before the Internet took off. , and from growth in the company's space and missile defense systems Noun 1. missile defense system - naval weaponry providing a defense system missile defence system naval weaponry - weaponry for warships contracts and commercial programs, particularly those related to Astrolink. Total aerospace and information systems first quarter profit before tax and unusual items increased 40 percent to a record $127.3 million, compared with $90.8 million in the first quarter of 1999. Profit before tax and unusual items increased primarily due to the LucasVarity acquisition. Excluding LucasVarity and unusual items, first quarter 2000 profit increased 13 percent to $99.8 million, primarily due to the increase in revenues. "TRW continues its ongoing role as a contributor to the nation's defense through several new contracts with the U.S. Air Force," Gorman said. "Our decades-long relationship with NASA NASA: see National Aeronautics and Space Administration. NASA in full National Aeronautics and Space Administration Independent U.S. continues with our selection for a study contract on the Terrestrial Planet Finder The Terrestrial Planet Finder (TPF) is a plan by the National Aeronautics and Space Administration of the United States for a telescope system that will be capable of detecting extrasolar terrestrial planets. Mission. A new contract for a ground-to-satellite interface from Astrolink International LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control further expands our commercial satellite business, while Samsung's and Honeywell's selection of TRW for its unique power take off shafts for jet aircraft and unmanned aerial vehicles
adv. & adj. Throughout a whole country; nationwide: launched a fundraising campaign countrywide; a countrywide search. Adj. 1. ." TRW provides advanced-technology products and services for the automotive, aerospace, and information systems markets. The company's news releases are available through TRW's corporate Web site (http://www.trw.com). Statements that are not statements of historical fact may be forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . Important factors that could cause TRW's actual results to differ materially from the forward-looking statements contained in this release include the ability to continue technical innovation and the development of and demand for new products and contract awards; the ability to effectively implement the Company automotive restructuring program and improve automotive margins; the ability to develop and market products and services for customers outside of the traditional aerospace and information systems markets; the ability to reduce debt; and the ability to design and develop e-commerce e-commerce, commerce conducted over the Internet, most often via the World Wide Web. E-commerce can apply to purchases made through the Web or to business-to-business activities such as inventory transfers. initiatives for business systems and processes. Additional factors can be found in Item 7, "Management's Discussion and Analysis--Forward-Looking Statements," in the company's most recent Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. . TRW undertakes no obligation to update any forward-looking statement.
TRW STATISTICAL SUMMARY (UNAUDITED)
(Dollar Amounts in Millions Except for Per Share Data)
FIRST QUARTER 2000
------------------------------------
Margin Unusual Margin
Operations % Items Total %
----------------------------------------------------------------------
Sales
Occupant Safety Systems $ 760.5 $ 760.5
Chassis Systems 1,528.1 1,528.1
Automotive Electronics 471.5 471.5
Other Automotive 274.7 274.7
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Total Automotive 3,034.8 3,034.8
Space & Electronics 486.0 486.0
Systems & Information Technology 773.8 773.8
Aeronautical Systems 270.7 270.7
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Total Aerospace & Information
Systems 1,530.5 1,530.5
Sales $4,565.3 $4,565.3
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----------------------------------------------------------------------
Profit Before Taxes
Occupant Safety Systems $ 54.6 7.2% $(40.6) $ 14.0 1.8%
Chassis Systems 122.8 8.0% (44.0) 78.8 5.2%
Automotive Electronics 36.6 7.8% (4.2) 32.4 6.9%
Other Automotive 27.5 10.0% 31.0 58.5 21.3%
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Total Automotive 241.5 8.0% (57.8) 183.7 6.1%
Space & Electronics 52.9 10.9% 173.7 226.6 46.6%
Systems & Information Technology 46.9 6.1% - 46.9 6.1%
Aeronautical Systems 27.5 10.2% - 27.5 10.2%
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Total Aerospace & Information
Systems 127.3 8.3% 173.7 301.0 19.7%
Profit Before Taxes 368.8 8.1% 115.9 484.7 10.6%
Corporate Expense and Other (51.4) (12.1) (63.5)
Financing Costs (136.8) (0.7) (137.5)
Pension Income 57.4 - 57.4
In-process Research and Development - - -
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Earnings(Loss) Before
Income Taxes $238.0 5.2% $103.1 $341.1 7.5%
Income Taxes 85.9 45.9 131.8
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Net Earnings(Loss) $152.1 3.3% $ 57.2 $209.3 4.6%
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Diluted earnings(loss) per share $ 1.22 $ 0.46 $ 1.68
Basic earnings(loss) per share $ 1.24 $ 0.47 1.71
Dividends paid per common share $ 0.33
Common stock outstanding 122.9
Shares used in computing
per share amounts
Diluted 124.7
Basic 122.3
TRW STATISTICAL SUMMARY (UNAUDITED)
(Dollar Amounts in Millions Except for Per Share Data)
FIRST QUARTER 1999
--------------------------------------
Margin Unusual Margin
Operations % Items Total %
---------------------------------------------------------------------
Sales
Occupant Safety Systems $ 795.2 $795.2
Chassis Systems 613.8 613.8
Automotive Electronics 317.3 317.3
Other Automotive 238.3 238.3
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Total Automotive 1,964.6 1,964.6
Space & Electronics 461.2 461.2
Systems & Information Technology 653.0 653.0
Aeronautical Systems 18.1 18.1
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Total Aerospace & Information
Systems 1,132.3 1,132.3
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Sales $3,096.9 $3,096.9
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Profit Before Taxes
Occupant Safety Systems $ 56.4 7.1% $ (3.1) $ 53.3 6.7%
Chassis Systems 39.4 6.4% (4.7) 34.7 5.7%
Automotive Electronics 23.3 7.3% (1.1) 22.2 7.0%
Other Automotive 26.4 11.1% (0.8) 25.6 10.7%
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Total Automotive 145.5 7.4% (9.7) 135.8 6.9%
Space & Electronics 49.9 10.8% 33.1 83.0 18.0%
Systems & Information Technology 38.8 5.9% (32.5) 6.3 1.0%
Aeronautical Systems 2.1 11.6% - 2.1 11.6%
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Total Aerospace & Information
Systems 90.8 8.0% 0.6 91.4 8.1%
Profit Before Taxes 236.3 7.6% (9.1) 227.2 7.3%
Corporate Expense and Other (30.9) (50.2) (81.1)
Financing Costs (41.6) (12.2) (53.8)
Pension Income - - -
In-process Research and Development - (85.3) (85.3)
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Earnings(Loss) Before
Income Taxes $163.8 5.3% $(156.8) $ 7.0 0.2%
Income Taxes 59.6 (24.2) 35.4
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Net Earnings(Loss) $104.2 3.4% $(132.6) $(28.4) (0.9)%
---------------------------------------------------------------------
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Diluted earnings(loss)
per share $ 0.86 $ (1.10) $(0.24)
Basic earnings(loss) per share $ 0.86 $ (1.10) $(0.24)
Dividends paid per common share $ 0.33
Common stock outstanding 120.2
Shares used in computing
per share amounts
Diluted 120.1
Basic 120.1
TRW STATISTICAL SUMMARY (UNAUDITED)
(Dollar Amounts in Millions)
SELECTED CASH FLOW ITEMS Three Months Ended
March 31, 2000 March 31, 1999
-------------- --------------
Net earnings(loss) $ 209 $ (28)
Gains on sale of nonoperating assets (174) (15)
Depreciation and amortization 212 142
Pension income (66) -
Deferred income taxes 45 2
Operating working capital (234) (240)
Capital expenditures including
other intangibles (153) (111)
Acquisitions, net of cash acquired - (36)
Net proceeds from divestitures 1,351 17
Net increase(decrease) in debt (1,145) 1,049
Dividends paid (41) (40)
Purchased in-process research and
development - 85
SUMMARY BALANCE SHEETS
March 31, 2000 December 31, 1999
-------------- -----------------
ASSETS
Cash and cash equivalents $ 261 $ 228
Accounts receivable 2,737 2,480
Inventories 978 1,039
Net assets of acquired businesses
held for sale - 827
Other current assets 605 625
----- -----
Total current assets 4,581 5,199
Property, plant & equipment-net 3,775 3,894
Intangible assets-net 4,315 4,331
Investments in affiliated companies 1,838 1,185
Other notes and accounts receivable 244 257
Prepaid pension cost 2,908 2,876
Other assets 590 524
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Total assets $18,251 $18,266
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LIABILITIES AND SHAREHOLDERS' INVESTMENT
Short-term debt $ 1,326 $ 2,444
Trade accounts payable 1,652 1,638
Current portion of long-term debt 756 758
Other current liabilities 2,088 1,889
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Total current liabilities 5,822 6,729
Long-term liabilities 2,177 1,991
Long-term debt 5,338 5,369
Deferred income taxes 1,569 1,352
Minority interests in subsidiaries 117 113
Total shareholders' investment 3,228 2,712
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Total liabilities and
shareholders' investment $18,251 $18,266
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