DRS Technologies Reports Record Fourth Quarter and Fiscal Year Results; Record New Orders Increase Backlog to a New High; Company Provides FY2006 Guidance.PARSIPPANY, N.J. -- DRS Technologies DRS Technologies, Inc. (commonly known as DRS; formerly known as Diagnostic/Retrieval Systems, Inc.) is a supplier of defense electronic products and systems to the United States Air Force, Army, Coast Guard, Marine Corps, Navy, aerospace and defense prime , Inc. (NYSE NYSE See: New York Stock Exchange : DRS DRS Drives (street suffix) DRS Dispute Resolution Service DRS Doctorandus DRS Department of Rehabilitative Services DRS Direct Registration System (securities) DRS Department of Rehabilitation Services ) today reported record financial results for the fourth quarter and fiscal year ended March 31, 2005. Results for the fiscal year included significant gains in revenues, operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. and diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of . A quarterly record in new orders for products and services increased funded backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. at the end of the period to a new high. "Fiscal 2005 results were outstanding," said Mark S. Newman, chairman, president and chief executive officer of DRS Technologies. "Revenues were up 33 percent over last year, including double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. organic growth, and free cash flow was very strong. Operating income was 39 percent higher, and earnings from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the increased 33 percent, despite the impact of charges related to the settlement of 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. . We set a record in new orders, driving funded backlog at the end of the year to the highest level ever achieved by the company." Fiscal 2005 Results Fiscal 2005 revenues from continuing operations were $1.31 billion, 33 percent higher than revenues from continuing operations of $986.9 million for fiscal 2004. Organic revenue growth accounted for approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 11.5 percent of the increase, with the balance from acquisitions. Operating income of $143.1 million for the year ended March 31, 2005 was 39 percent higher than the $103.3 million reported for last fiscal year. Record operating income for fiscal 2005 was attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the higher overall sales volume and the strong performance of the company's operating segments. Operating income as a percentage of sales was 10.9 percent, compared with 10.5 percent for the prior fiscal year. Operating income included a $6.5 million provision during fiscal 2005 related to the settlement of litigation, $5.5 million of which was recorded in the fourth quarter.(1) Earnings from continuing operations before interest, taxes, depreciation and amortization (EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become ) were $181.2 million for fiscal 2005, 40 percent higher than EBITDA of $129.3 million reported a year earlier. EBITDA as a percentage of sales was 13.8 percent, compared with 13.1 percent a year ago. Fiscal 2005 net earnings were $60.7 million, or $2.18 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, including $2.6 million from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. . Fiscal 2004 net earnings were $44.7 million, or $1.80 per diluted share. Before the charge for litigation, pro forma earnings pro forma earnings Income not necessarily calculated in accordance with generally accepted accounting principles. For example, a company might report pro forma earnings that exclude depreciation expense and nonrecurring expenses such as restructuring costs. from continuing operations were $61.8 million, or $2.22 per diluted share. After the litigation charge, earnings from continuing operations were $58.1 million, 33 percent higher than a year ago, or $2.09 per diluted share, on weighted average diluted shares outstanding of 27.8 million. Last year's earnings from continuing operations were $43.5 million, or $1.76 per diluted share, on 24.8 million weighted average diluted shares outstanding. Net cash provided by operating activities of continuing operations for fiscal 2005 increased to $136.2 million from $104.7 million reported the year before. Free cash flow (net cash provided by operating activities of continuing operations less capital expenditures) was strong at $101.7 million, 27 percent higher than free cash flow of $80.3 million last year. Mr. Newman said, "Fiscal 2005 was an excellent year for DRS, and we accomplished a number of important objectives, including: --Record financial results in both of our operating segments; --Record new orders for products and services of $1.43 billion and record year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. funded backlog of $1.31 billion; --Completion of the integration of our fiscal 2004 acquisition of Integrated Defense Technologies, Inc. (IDT IDT Integrated Device Technology, Inc. (Santa Clara, CA, USA) IDT I Don't Think IDT Identity Theft IDT Interrupt Descriptor Table IDT Integrated DNA Technologies IDT Inactive Duty Training IDT Instructional Design & Technology ) and the sale of two former IDT units operating in non-core business areas; --Completion of an acquisition during the year that broadened our thermal imaging soldier SOLDIER. A military man; a private in the army. 2. The constitution of the United States, amend. art. 3, directs that no soldier shall, in time of peace, be quartered in any house, without the 'consent of the owner; nor in time of war, but in a manner to be systems product line and customer base; and --Completion of an additional $200 million bond offering of 6-7/8 percent senior subordinated Subordinated A claim ranked lower in priority than other claims. Common stock claims are always subordinated to debt. notes due 2013, which were priced at 105 percent of the principal amount and issued as additional debt securities under our $350 million indenture An agreement declaring the benefits and obligations of two or more parties, often applicable in the context of Bankruptcy and bond trading. The term indenture primarily describes secured contracts and has several applications in U.S. law. of October October: see month. 30, 2003. The accomplishment of these objectives beneficially contributed to the company and continue to favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. impact DRS, reinforcing our positive outlook for fiscal 2006." New Contract Awards and Backlog DRS secured $394.3 million and $1.43 billion in new orders for products and services during the fourth quarter and fiscal year, respectively, reflecting increases of 38 percent and 36 percent, respectively, over bookings for the comparable prior-year periods. Funded backlog at March 31, 2005 climbed to a record $1.31 billion, 10 percent above $1.20 billion in funded backlog at the same time last year. During the fourth quarter of fiscal 2005, the company's C4I C4I Command, Control, Communications, Computers, & Intelligence (US DoD) C4I Command Control Communications Computer and Intelligence segment booked $191.4 million in new contracts, including: --$48 million to provide electronic manufacturing services, primarily associated with the U.S. Navy's AN/UYQ-70 Advanced Display Systems program supporting ships, submarines and aircraft; --$44 million for battlefield digitization dig·i·tize tr.v. dig·i·tized, dig·i·tiz·ing, dig·i·tiz·es To put (data, for example) into digital form. dig systems, the largest orders associated with a multi-year, indefinite INDEFINITE. That which is undefined; uncertain. INDEFINITE, NUMBER. A number which may be increased or diminished at pleasure. 2. When a corporation is composed of an indefinite number of persons, any number of them consisting of a majority of those delivery/indefinite quantity (IDIQ IDIQ Indefinite Delivery, Indefinite Quantity (contracting/procurement) ) U.S. Army contract to produce rugged Applique Computer Systems for the Force XXI Battle Command, Brigade brigade Military unit commanded by a brigadier general or a colonel and composed of two or more subordinate units, such as regiments or battalions. Two or more brigades make up a division. and Below (FBCB FBCB Force XXI Battle Command Brigade (US Army) FBCB Fixed Bed Circulating Bioreactor 2) program; --$42 million to provide data collection and processing equipment, including receivers, tuners, signal processing See DSP. systems and recorders supporting U.S. intelligence operations The variety of intelligence and counterintelligence tasks that are carried out by various intelligence organizations and activities within the intelligence process. Intelligence operations include planning and direction, collection, processing and exploitation, analysis and production, ; --$32 million to provide Naval nuclear products, ship control, power generation, distribution and propulsion systems Noun 1. propulsion system - a system that provides a propelling or driving force system - instrumentality that combines interrelated interacting artifacts designed to work as a coherent entity; "he bought a new stereo system"; "the system consists of a motor and a supporting U.S. Navy ships, carriers and submarines; --$13 million for data link, ship telephone products and other secure and non-secure communications systems In telecommunication, a communications system is a collection of individual communications networks, transmission systems, relay stations, tributary stations, and data terminal equipment (DTE) usually capable of interconnection and interoperation to form an integrated whole. ; and --$9 million to provide engineering for shipboard ship·board n. 1. The condition of being aboard a ship: on shipboard. 2. Archaic The side of a ship. adj. integrated display systems and for the design and production upgrades of AN/SPS-67 radar systems. New contracts for DRS's Surveillance & Reconnaissance  This article or section needs copy editing for grammar, style, cohesion, tone and/or spelling.You can assist by [ editing it] now. segment were $202.9 million for the fourth quarter and included: --$51 million for weapons and sensor A device that measures or detects a real-world condition, such as motion, heat or light and converts the condition into an analog or digital representation. An optical sensor detects the intensity or brightness of light, or the intensity of red, green and blue for color systems. products utilizing uncooled infrared An invisible band of radiation at the lower end of the visible light spectrum. With wavelengths from 750 nm to 1 mm, infrared starts at the end of the microwave spectrum and ends at the beginning of visible light. technology, the largest awards related to the multi-year Thermal Weapon Sights and the U.S. Army Driver Vision Enhancers (DVE See digital video effects. ) II programs; --$25 million to produce airborne airborne /air·borne/ (ar´born) suspended in, transported by, or spread by air. airborne, adj carried through the air. In health care settings, viruses or bacteria may become airborne, e.g. thermal imaging systems and FLIR FLIR Forward-Looking Infrared (Radar) FLIR Forward Looking Infrared Radiometer FLIR Forward Looking Infrared Radar FLIR Forward Looking Infra Red sensors
--$24 million for air combat training, range support and test systems, the largest awards under the Enhanced Range Applications Program and the P5 Combat Training System program; --$19 million for electronic warfare Noun 1. electronic warfare - military action involving the use of electromagnetic energy to determine or exploit or reduce or prevent hostile use of the electromagnetic spectrum EW military action, action - a military engagement; "he saw action in Korea" , ship network systems and avionics avionics (ā'vēŏn`ĭks), electronic instruments used in air or space flight; also the design and production of such instruments. Early planes had few instruments, but as aviation and aircraft became more complex, so did instrumentation. , the most significant contracts related to providing fiber optic optic /op·tic/ (op´tik) ocular (1). op·tic or op·ti·cal adj. 1. Of or relating to the eye or vision. 2. network systems supporting shipboard data and integrated communications for international customers; --$18 million for ground-based thermal imaging systems, the largest orders associated with ground vehicle electro-optical systems, which incorporate Second Generation Forward Looking Infrared
A forward looking infrared (FLIR) is the North American English term for a camera that takes pictures using the infrared portion of the electromagnetic spectrum. (FLIR) technology; --$16 million for embedded Inserted into. See embedded system. test and diagnostic systems and energy management systems, the largest award for Direct Support Electrical System Test Sets (DSESTS DSESTS Direct Support Electrical System Test Set (US DoD) ) used on the Abrams Abrams may refer to:
--$14 million for digital imaging systems, flight and airborne mission recorders, and avionics support systems, the most significant orders associated with high-speed high-speed adj. 1. Operated or designed for operation at high speed: a high-speed food processor. 2. Taking place at high speed: a high-speed chase. 3. airborne digital cameras; and --$8 million for advanced electro-optical technology programs, related to infrared countermeasures This article is about missile counter measures. For IRCMonitor, see Wikipedia:IRCMonitor. Infrared countermeasures (IRCM) are devices designed to protect aircraft from infrared homing ("heat seeking") missiles by confusing the missiles' infrared , remote sensing Deriving digital models of an area on the earth. Using special cameras from airplanes or satellites, either the sun's reflections or the earth's temperature is turned into digital maps of the area. and sensor arrays A sensor array is a set of several sensors that an information gathering device uses to gather information (usually directional in nature) that cannot be gathered from a single source for a central processing unit. for advanced military and space surveillance applications. Balance Sheet Highlights At March 31, 2005, the company had $306.9 million in cash and cash equivalents, reflecting positive fourth quarter cash flow, net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). from its $200 million debt offering of 6-7/8 percent senior subordinated notes due 2013, completed in the third quarter, and the sale of two non-core business units. The company prepaid pre·pay tr.v. pre·paid, pre·pay·ing, pre·pays To pay or pay for beforehand. pre·pay  ment n. $20.0 million of its term
loan debt during the quarter and $45.0 million during fiscal 2005.
Total debt at March 31, 2005 was $730.3 million, compared with $571.4 million at the end of fiscal 2004, and net debt (total debt less cash) was $423.4 million. Stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. increased to $671.4 million, up 13 percent from $595.6 million at the same time a year earlier. Fourth Quarter Results For the fourth quarter of fiscal 2005, DRS reported record quarterly revenues of $361.2 million, 7 percent above revenues of $339.1 million for the same period last year. Higher sales for the three-month period were primarily attributable to the company's acquisition of Night Vision Equipment Company (NVEC NVEC Night Vision Equipment Company, Inc. NVEC Nespelem Valley Electric Cooperative ) in the third quarter. Operating income was a quarterly record at $41.6 million, a 10 percent increase above the $37.9 million reported for the fourth quarter a year earlier. The increase was the result of higher sales volume and strong operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: . Operating income was higher, despite the impact in the fourth quarter, as mentioned, of a $5.5 million provision related to settlement of litigation(1). Operating income as a percentage of sales was 11.5 percent, compared with 11.2 percent for the same period a year ago. The company posted a quarterly record in EBITDA from continuing operations of $51.3 million for the last quarter of fiscal 2005, 12 percent higher than the $45.9 million reported for the same period last year. EBITDA as a percentage of sales was 14.1 percent, compared with 13.6 percent for the prior year's fourth quarter. Net earnings for the fourth quarter of fiscal 2005 were $17.0 million, or $0.61 per diluted share, including discontinued operations. Net earnings for fiscal 2004 were $16.3 million, or $0.60 per diluted share. Before the charge for litigation, pro forma earnings from continuing operations were up 18 percent to $19.3 million, or $0.69 per diluted share. After the charge, earnings from continuing operations were $16.3 million, or $0.58 per diluted share, on weighted average diluted shares outstanding of 28.1 million. For the fourth quarter last year, earnings from continuing operations were $15.6 million, or $0.57 per diluted share, on 27.4 million weighted average diluted shares outstanding. Free cash flow from continuing operations for the fourth quarter of fiscal 2005 was $41.0 million. Fourth Quarter Segment Results DRS's C4I Group reported revenues of $184.7 million for the fourth quarter of fiscal 2005, up 7 percent from $172.1 million for the same quarter a year ago. The increase in revenues was attributable to organic growth. Operating income of $17.8 million and the Group's 9.6 percent operating margin reflected the full impact of the $5.5 million litigation charge taken in the fourth quarter. Bookings during the three-month period of $191.4 million were 30 percent higher than the same period last year and contributed to a funded backlog of $617.2 million at March 31, 2005. Fourth quarter results for DRS's Surveillance & Reconnaissance Group reflected increases in revenues, operating income, bookings and backlog over the prior-year period. Revenues of $176.5 million were up 6 percent from $167.0 million for same quarter in the previous year. Significantly higher operating income of $24.0 million was a 35 percent increase over the $17.8 million in operating income reported for the same quarter a year earlier and reflected a 13.6 percent operating margin, compared with 10.6 percent for last year's fourth quarter. The increases in sales and profitability were due primarily to the addition of the operating results from the NVEC acquisition. Strong new orders of $202.9 million during the quarter were 48 percent above the comparable period a year ago and contributed to a quarterly record in funded backlog of $697.5 million at March 31, 2005, 21 percent higher than backlog at the same time last year. Fiscal 2006 and First Quarter Guidance The company today provided guidance for the fiscal year ending March 31, 2006, indicating it anticipates revenues between $1.45 billion and $1.50 billion, an increase of approximately 11 to 15 percent over fiscal 2005 sales. An estimated 6 to 9 percent of the revenue growth is expected to be organic, and DRS targeted an operating margin of approximately 11.0 percent. The company estimated full-year diluted earnings per share to range between $2.35 and $2.45, based on weighted average diluted shares outstanding of approximately 28.5 million. Company guidance indicated free cash flow of $40 million to $50 million for fiscal 2006. The company's fiscal 2006 guidance includes the effect of increased interest expense from its fiscal 2005 bond offering of 6-7/8 percent notes, but does not include the potential benefit from the deployment of the remaining cash from the offering for acquisitions. For the first quarter of fiscal 2006, DRS expects revenues of $310 million to $320 million, compared with $291.2 million in sales for the first quarter of fiscal 2005. New company guidance for the quarter ending June June: see month. 30, 2005 reflects diluted earnings per share of $0.41 to $0.43 anticipated on approximately 28.2 million weighted average diluted shares outstanding, compared with $0.40 in diluted earnings per share on 27.5 million shares outstanding for the first quarter of fiscal 2005. Outlook "Fiscal 2006 is expected to be another solid year for DRS," Mr. Newman added. "Moving into the first quarter of the new fiscal year with the highest backlog in our history - one that is extensively diversified diversified (di·verˑ·s , yet focused on priority areas of military spending - DRS is well positioned to participate in growing areas of the defense budget on the strength, solid reputation and performance of our core technology businesses. DRS's technologies, products and services transcend specific platforms and have broad application across a spectrum of military initiatives associated with both the transformation and recapitalization Recapitalization Restructuring a company's debt and equity mixture often with the aim of making a company's capital structure more stable. Notes: Companies often want to diversify their debt-to-equity ratio to improve liquidity. of military assets. Closely aligned with our customers' objectives for end-to-end end-to-end a pattern of anastomosis in which severed ends are matched and united, in contrast with other patterns such as end-to-side or side-to-side. Usually applied to anastomosis of the intestine. , modular system solutions, we are continuing our support of the current force as a leading supplier of C4ISR C4ISR Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance C4ISR Command, Control, Communications, Computer, Intelligence, Surveillance and Reconnaissance C4ISR Command Control Communications Computers Intelligence Surveillance and Reconnaissance systems for military backfit back·fit tr.v. back·fit·ted or back·fit, back·fit·ting, back·fits To retrofit. and modernization modernization Transformation of a society from a rural and agrarian condition to a secular, urban, and industrial one. It is closely linked with industrialization. As societies modernize, the individual becomes increasingly important, gradually replacing the family, programs, as well as our support of the future force." DRS Technologies, headquartered in Parsippany, New Jersey, provides leading edge products and services to defense, government intelligence and commercial customers. Focused on defense technology, DRS develops and manufactures a broad range of mission critical systems. The company employs 5,700 people worldwide. For more information about DRS Technologies, please visit the company's web site at www.drs.com. SAFE HARBOR Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and OF 1995: This press release contains 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. , within the meaning of Section 27A of the Securities Act of 1933, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. , and Section 21E of the Securities Exchange Act of 1934, as amended, that are based on management's beliefs and assumptions, current expectations, estimates and projections. Such statements, including statements relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the Company's expectations for future financial performance, are not considered historical facts and are considered forward-looking statements under the federal securities laws. These statements may contain words such as "believes," "anticipates," "plans," "expects," "intends," "estimates" or similar expressions. These statements are not guarantees of the Company's future performance and are subject to risks, uncertainties and other important factors that could cause our actual performance or achievements to differ materially from those expressed or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. by these forward-looking statements and include, without limitation, demand and competition for the Company's products and other risks or uncertainties detailed in the Company's Securities and Exchange Commission filings. Given these uncertainties, you should not rely on forward-looking statements. Such forward-looking statements speak only as of the date on which they were made, and the Company undertakes no obligations to update any forward-looking statements, whether as a result of new information, future events or otherwise.
(1) On May 4, 2005, the Company entered into a settlement agreement
with plaintiffs Miltope Corporation and IV Phoenix Group, Inc.,
pursuant to which the Company agreed to pay $7.5 million to the
plaintiffs, and litigation involving the parties was resolved to
their satisfaction, with the elimination of all outstanding
claims. The Company recorded a $6.5 million charge during fiscal
2005 and a $1.0 million charge during fiscal 2004 related to the
settlement.
Note to Investors: DRS Technologies will host a conference call, which will be simultaneously broadcast live over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the . Mark S. Newman, chairman, president and chief executive officer, Richard Ri·chard , Joseph Henri Maurice Known as "Rocket." 1921-2000. Canadian hockey player. A right wing for the Montreal Canadiens (1942-1960), he led his team to eight Stanley Cup championships and was the first player to score 50 goals in a A. Schneider Schnei·der , Vreni Born 1964. Swiss alpine skier. She won the overall World Cup in 1989, 1994, and 1995, was a four-time world champion, and earned five Olympic medals. , executive vice president and chief financial officer, and Patricia M. Williamson Wil·liam·son , Mount A peak, 4,382.9 m (14,370 ft) high, in the Sierra Nevada of east-central California. , vice president, corporate communications Corporate communications is the process of facilitating information and knowledge exchanges with internal and key external groups and individuals that have a direct relationship with an enterprise. and investor relations Investor relations The process by which the corporation communicates with its investors. , will host the call, which is scheduled for today, Friday Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant , May 13, 2005 at 9:30 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT . Listeners can access the call live and archived by visiting DRS's web site at http://www.shareholder.com/drs or by visiting Thomson CCBN's institutional investor Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. site at http://www.streetevents.com or individual investor center at http://www.fulldisclosure.com. Please allow 15 minutes prior to the call to visit one of these sites and download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. and install any necessary audio software.
DRS TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
(Millions Except Earnings per Share)
Three Months
Ended March 31,
2005(2) 2004
--------- ---------
Revenues $ 361.2 $ 339.1
Operating Income $ 41.6 $ 37.9
Interest and Related Expenses $ 12.3 $ 9.6
Earnings from Continuing Operations
before Income Taxes $ 30.1 $ 27.7
Income Tax Expense $ 13.8 $ 12.2
Earnings from Continuing Operations $ 16.3 $ 15.6
Earnings from Discontinued Operations(1) $ 0.7 $ 0.7
Net Earnings $ 17.0 $ 16.3
Basic Earnings per Share of Common Stock:
Earnings from Continuing Operations $ .60 $ .58
Earnings from Discontinued Operations $ .03 $ .03
Net Earnings $ .63 $ .61
Diluted Earnings per Share of Common Stock:
Earnings from Continuing Operations $ .58 $ .57
Earnings from Discontinued Operations(1) $ .02 $ .03
Net Earnings $ .61 $ .60
Weighted Average Number of Shares of
Common Stock Outstanding:
Basic 27.3 26.9
Diluted 28.1 27.4
(1) Fourth quarter results reflect discontinued operations,
representing results of operations of the Company's DRS Broadcast
Technology and DRS Weather Systems units through the date of sale
(March 10, 2005).
(2) Fiscal 2005 fourth quarter results include the operations of Night
Vision Equipment Company, acquired by the Company on December 14,
2004.
DRS TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
(Millions Except Earnings per Share)
Year Ended March 31,
2005(2) 2004
---------- ----------
Revenues $ 1,308.6 $ 986.9
Operating Income $ 143.1 $ 103.3
Interest and Related Expenses $ 39.7 $ 24.3
Earnings before Income Taxes $ 103.0 $ 77.3
Income Tax Expense $ 44.9 $ 33.8
Earnings from Continuing Operations $ 58.1 $ 43.5
Earnings from Discontinued Operations $ 2.6 $ 1.2
Net Earnings $ 60.7 $ 44.7
Basic Earnings per Share of Common Stock:
Earnings from Continuing Operations $ 2.15 $ 1.80
Earnings from Discontinued
Operations(1) $ .09 $ .05
Net Earnings $ 2.24 $ 1.84
Diluted Earnings per Share of Common Stock:
Earnings from Continuing Operations $ 2.09 $ 1.76
Earnings from Discontinued
Operations(1) $ .09 $ .05
Net Earnings $ 2.18 $ 1.80
Weighted Average Number of Shares of
Common Stock Outstanding:
Basic 27.1 24.3
Diluted 27.8 24.8
(1) Fiscal year results reflect discontinued operations, representing
results of operations of the Company's DRS Broadcast Technology
and DRS Weather Systems units from the date acquired (November 4,
2003) through the date of sale (March 10, 2005).
(2) Fiscal 2005 fiscal year results include the operations of Night
Vision Equipment Company, acquired by the Company on December 14,
2004.
DRS TECHNOLOGIES, INC. AND SUBSIDIARIES
NON-GAAP FINANCIAL DATA (UNAUDITED)
($ Millions)
Three Months Ended
March 31,
2005(1,2) 2004(1)
---------- ----------
Reconciliation of Non-GAAP Financial Data:
Earnings from Continuing Operations $ 16.3 $ 15.6
Income Taxes 13.8 12.2
Interest Income (1.7) (0.2)
Interest and Related Expenses 12.3 9.6
Amortization and Depreciation 10.6 8.7
---------- ----------
EBITDA(3) $ 51.3 $ 45.9
Income Taxes (13.8) (12.2)
Interest Income 1.7 0.2
Interest and Related Expenses (12.3) (9.6)
Other Non-Cash Items and Changes in Assets
and Liabilities, Net of Effects from
Business Combinations 27.9 43.4
---------- ----------
Net Cash Provided by Operating
Activities of Continuing Operations $ 54.8 $ 67.7
Capital Expenditures (13.8) (8.7)
---------- ----------
Free Cash Flow(4) $ 41.0 $ 59.0
Year Ended March 31,
---------------------
2005(1,2) 2004(1)
---------- ----------
Reconciliation of Non-GAAP Financial Data:
Earnings from Continuing Operations $ 58.1 $ 43.5
Income Taxes 44.9 33.8
Interest Income (2.5) (0.7)
Interest and Related Expenses 39.7 24.3
Amortization and Depreciation 41.0 28.4
---------- ----------
EBITDA(3) $ 181.2 $ 129.3
Income Taxes (44.9) (33.8)
Interest Income 2.5 0.7
Interest and Related Expenses (39.7) (24.3)
Other Non-Cash Items and Changes in Assets
and Liabilities, Net of Effects from
Business Combinations 37.1 32.8
---------- ----------
Net Cash Provided by Operating
Activities of Continuing Operations $ 136.2 $ 104.7
Capital Expenditures (34.5) (24.4)
---------- ----------
Free Cash Flow(4) $ 101.7 $ 80.3
(1) Fourth quarter and fiscal year results exclude discontinued
operations, representing results of operations of the company's
DRS Broadcast Technology and DRS Weather Systems units from the
date acquired (November 4, 2003) through the date of sale (March
10, 2005).
(2) Fiscal 2005 fourth quarter and fiscal year results include the
operations of Night Vision Equipment Company, acquired by the
Company on December 14, 2004.
(3) The Company defines EBITDA as net earnings from continuing
operations before net interest and related expenses (primarily
amortization of debt issuance costs), income taxes, depreciation
and amortization. The Company believes that the most directly
comparable GAAP financial measure to EBITDA is net cash provided
by operating activities of continuing operations. The preceding
tables present the components of EBITDA and a reconciliation of
EBITDA to net cash provided by operating activities of continuing
operations. EBITDA is presented as additional information because
we believe it to be a useful indicator of an entity's debt
capacity and its ability to service its debt. EBITDA is not a
substitute for operating income, net earnings or net cash flows
provided by operating activities of continuing operations, as
determined in accordance with generally accepted accounting
principles. EBITDA is not a complete net cash flow measure because
EBITDA is a measure of liquidity that does not include reductions
for cash payments for an entity's obligation to service its debt,
fund its working capital, business acquisitions and capital
expenditures, pay its income taxes and fund its discontinued
operations. Rather, EBITDA is one potential indicator of an
entity's ability to fund these cash requirements. EBITDA also is
not a complete measure of an entity's profitability because it
does not include costs and expenses for depreciation and
amortization, interest and related expenses, income taxes and the
results of operations of discontinued operations. EBITDA, as we
define it, may differ from similarly named measures used by other
entities and, consequently, could be misleading unless all
entities calculate and define EBITDA in the same manner.
(4) The Company discloses free cash flow because the Company believes
that it is a measurement of cash flow generated that is available
for investing and financing activities. Free cash flow is defined
as net cash provided by operating activities of continuing
operations less capital expenditures. Free cash flow represents
cash generated after paying for interest on borrowings, income
taxes, capital expenditures and changes in working capital, but
before repaying outstanding debt and investing cash to acquire
businesses, make other strategic investments and fund discontinued
operations. Thus, key assumptions underlying free cash flow are
that the Company will be able to refinance its existing debt when
it matures with new debt, and that the Company will be able to
finance any new acquisitions it makes by raising new debt or
equity capital. Free cash flow, as we define it, may differ from
similarly named measures used by other entities and, consequently,
could be misleading unless all entities calculate and define free
cash flow in the same manner.
Three Months Ended Year Ended
March 31, March 31,
2005(1,2) 2004(1) 2005(1,2) 2004(1)
---------- ---------- ---------- ----------
Organic Growth
Calculation:
Total Revenues $ 361.2 $ 339.1 $ 1,308.6 $ 986.9
Less Revenues from
Acquisitions
Owned Less Than One
Year (17.1) - (208.4) -
--------- ---------- ---------- ----------
Organic Revenues $ 344.1 $ 339.1 $ 1,100.2 $ 986.9
Organic Revenue
Growth(3) 1.5% 11.5%
(1) Fourth quarter and fiscal year results exclude discontinued
operations, representing results of operations of the Company's
DRS Broadcast Technology and DRS Weather Systems units from the
date acquired (November 4, 2003) through the date of sale (March
10, 2005).
(2) Fiscal 2005 fourth quarter and fiscal year results include the
operations of Night Vision Equipment Company, acquired by the
Company on December 14, 2004.
(3) Certain investors consider organic revenue growth to be an
important metric in assessing a company's reported revenues from
period to period. We define organic revenues as revenues recorded
by DRS's subsidiaries once they are owned by the Company for at
least twelve months and exclude revenues of divested and
discontinued subsidiaries for all periods. Organic growth, as we
define it, may differ from similarly named measures used by other
entities and, consequently, could be misleading, unless all
entities calculate and define organic growth in the same manner.
Three Months Ended Year Ended
March 31, March 31,
--------------- ---------------
2005(2) 2004 2005(2) 2004
------- ------- ------- -------
Earnings from Continuing
Operations(1) $ 16.3 $ 15.6 $ 58.1 $ 43.5
Litigation Settlement Charge(3) 5.5 1.0 6.5 1.0
Tax Benefit Associated with
Litigation Settlement Charge (2.5) (0.4) (2.8) (0.4)
------- ------- ------- -------
Pro Forma Earnings from
Continuing Operations(1,4) $ 19.3 $ 16.2 $ 61.8 $ 44.1
Weighted Average Number of Diluted
Shares of Common Stock
Outstanding 28.1 27.4 27.8 24.8
Pro Forma Diluted Earnings per Share
from Continuing Operations(1,4) $ 0.69 $ 0.59 $ 2.22 $ 1.78
(1) Fourth quarter and fiscal year results exclude discontinued
operations, representing results of operations of the Company's
DRS Broadcast Technology and DRS Weather Systems units from the
date acquired (November 4, 2003) through the date of sale (March
10, 2005).
(2) Fiscal 2005 fourth quarter and fiscal year results include the
operations of Night Vision Equipment Company, acquired by the
Company on December 14, 2004.
(3) On May 4, 2005, the Company entered into a settlement agreement
with plaintiffs Miltope Corporation and IV Phoenix Group, Inc.,
pursuant to which the Company agreed to pay $7.5 million to the
plaintiffs, and litigation involving the parties was resolved to
their satisfaction, with the elimination of all outstanding
claims. The Company recorded a $6.5 million charge during fiscal
2005 and a $1.0 million charge during fiscal 2004 related to the
settlement.
(4) The Company presents pro forma earnings from continuing operations
and related diluted earnings per share, which exclude the impact
of the litigation settlement, to clarify the results of its core
operations. Pro forma earnings from continuing operations is
defined as earnings from continuing operations less the after-tax
effect of the litigation settlement charges. Pro forma earnings
from continuing operations, as we define it, may differ from
similarly named measures used by other entities and, consequently,
could be misleading unless all entities calculate and define it in
the same manner.
DRS TECHNOLOGIES, INC. AND SUBSIDIARIES
FOURTH QUARTER SEGMENT RESULTS (UNAUDITED)
($ Millions)
Three Months Ended
March 31,
---------------------
2005 2004(3)
---------- ----------
Revenues
C4I Group(1) $ 184.7 $ 172.1
Surveillance & Reconnaissance Group(2) 176.5 167.0
----------------------------------------------------------------------
Consolidated $ 361.2 $ 339.1
----------------------------------------------------------------------
Operating Income
C4I Group(1) $ 17.8 $ 20.0
Surveillance & Reconnaissance Group(2) 24.0 17.8
Other (0.2) 0.1
----------------------------------------------------------------------
Consolidated $ 41.6 $ 37.9
----------------------------------------------------------------------
Operating Margin
C4I Group(1) 9.6% 11.6%
Surveillance & Reconnaissance Group(2) 13.6% 10.6%
Consolidated 11.5% 11.2%
----------------------------------------------------------------------
Bookings
C4I Group(1) $ 191.4 $ 147.8
Surveillance & Reconnaissance Group(2) 202.9 137.5
----------------------------------------------------------------------
Consolidated $ 394.3 $ 285.3
----------------------------------------------------------------------
Backlog
C4I Group(1) $ 617.2 $ 619.8
Surveillance & Reconnaissance Group(2) 697.5 576.2
----------------------------------------------------------------------
Consolidated $ 1,314.7 $ 1,196.0
----------------------------------------------------------------------
(1) Fourth quarter results exclude discontinued operations,
representing results of operations of the Company's DRS Broadcast
Technology and DRS Weather Systems units through the date of sale
(March 10, 2005).
(2) Fiscal 2005 fourth quarter results include the operations of Night
Vision Equipment Company, acquired by the Company on December 14,
2004.
(3) Fiscal 2004 results were adjusted to conform to the Company's
current operating structure.
DRS TECHNOLOGIES, INC. AND SUBSIDIARIES
FISCAL YEAR SEGMENT RESULTS (UNAUDITED)
($ Millions)
Year Ended March 31,
---------------------
2005 2004(3)
---------- ----------
Revenues
C4I Group(1) $ 700.4 $ 552.3
Surveillance & Reconnaissance Group(2) 608.2 434.6
----------------------------------------------------------------------
Consolidated $ 1,308.6 $ 986.9
----------------------------------------------------------------------
Operating Income
C4I Group(1) $ 73.6 $ 58.7
Surveillance & Reconnaissance Group(2) 69.9 44.6
Other (0.4) -
----------------------------------------------------------------------
Consolidated $ 143.1 $ 103.3
----------------------------------------------------------------------
Operating Margin
C4I Group(1) 10.5% 10.6%
Surveillance & Reconnaissance Group(2) 11.5% 10.3%
Consolidated 10.9% 10.5%
----------------------------------------------------------------------
Bookings
C4I Group(1) $ 703.4 $ 575.5
Surveillance & Reconnaissance Group(2) 729.7 477.1
----------------------------------------------------------------------
Consolidated $ 1,433.1 $ 1,052.6
----------------------------------------------------------------------
Backlog
C4I Group(1) $ 617.2 $ 619.8
Surveillance & Reconnaissance Group(2) 697.5 576.2
----------------------------------------------------------------------
Consolidated $ 1,314.7 $ 1,196.0
----------------------------------------------------------------------
(1) Fiscal year results exclude discontinued operations, representing
results of operations of the Company's DRS Broadcast Technology
and DRS Weather Systems units from the date acquired (November 4,
2003) through the date of sale (March 10, 2005).
(2) Fiscal 2005 results include the operations of Night Vision
Equipment Company, acquired by the Company on December 14, 2004.
(3) Fiscal 2004 results were adjusted to conform to the Company's
current operating structure.
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