DRS Technologies Reports Record Third Quarter Earnings; Record New Orders Bring Backlog to an All Time High.Business Editors/Hi Tech Writers PARSIPPANY, N.J.--(BUSINESS WIRE)--Feb. 7, 2001 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. (AMEX AMEX See: American 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 earnings for the third quarter and first nine months of fiscal 2001. A record amount of new orders received by DRS during the three-month period brought 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 December December: see month. 31, 2000 to the highest level in the company's history. Third quarter 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. of $10,091,000 was 42 percent higher than operating income of $7,120,000 reported for the third quarter a year earlier, and was a record for the period. Operating income as a percentage of sales was 10.5 percent, versus 6.9 percent for the third quarter a year ago, a 52 percent improvement. Earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
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 were a new quarterly record at $13,751,000, a 25 percent rise above EBITDA of $11,031,000 for the same three months in the previous fiscal year. EBITDA as a percentage of sales was 14.3 percent, 34 percent higher than 10.7 percent for the third quarter last year. Fiscal 2001 third quarter net earnings were substantially higher and set a new third quarter record at $3,479,000, or $0.28 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, on revenues of $95,935,000. This was 64 percent above earnings from continuing operations of $2,120,000, or $0.21 per diluted share, on revenues of $103,570,000, for the third quarter in the prior year. Lower revenues for the third quarter were attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk primarily to some temporary timing delays in the receipt of production material and delays by the U.K. Ministry of Defence in the award of certain programs. Higher sales for the fourth quarter are expected. "Results for the third quarter of fiscal 2001 were excellent," said Mark S. Newman, chairman, president and chief executive officer of DRS Technologies. "We turned in another quarter of solid performance, posting quarterly records in operating income, EBITDA, earnings, bookings and backlog. Clearly evident throughout this fiscal year to date has been our demonstrated ability to deliver significantly increased profitability and higher margins resulting from successfully implemented operational improvements. Additionally, new records were established for product orders and funded backlog, indicating that the company is well-positioned to continue to deliver top- top- pref. Variant of topo-. and bottom- line growth. DRS is on track to turn in a strong fourth quarter and post another record fiscal year." He continued, "During the third quarter, we called for the redemption The liberation of an estate in real property from a mortgage. Redemption is the process by which land that has been mortgaged or pledged is bought back or reclaimed. It is accomplished through a payment of the debt owed or a fulfillment of the other conditions. of our 9 percent Senior Subordinated Subordinated A claim ranked lower in priority than other claims. Common stock claims are always subordinated to debt. Convertible Debentures Convertible Debenture Any type of debenture that can be converted into some other security. Notes: For example, a convertible bond can be converted into stock. , due October October: see month. 1, 2003. In January January: see month. , all remaining bonds outstanding were converted by their holders into DRS stock, resulting in an increase in 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. of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $6.2 million. This action, in combination with our strong cash flow, enabled us to significantly lower debt during the first nine months of the fiscal year. These moves strengthened our balance sheet and enhanced the company's position for growth." DRS booked a third quarter record amount of new contract awards valued at approximately $129 million, 36 percent higher than the same period last year, increasing funded backlog at December 31, 2000 to approximately $459 million, 18 percent above the $388 million in backlog at March 31, 2000, the company's fiscal 2000 year end. During the first nine months of fiscal 2001, DRS secured a record $348 million in new orders, up 39 percent from last year. Backlog at the end of the third quarter was 32 percent higher than backlog of $346 million posted at the same time a year ago. Key awards received during the quarter included: -- $40 million in new awards for second generation infrared sighting systems under the U.S. Army's Horizontal Technology Integration (HTI) program. These systems support the Abrams Main Battle Tanks, Bradley Fighting Vehicles and Long Range Advanced Scout mobile vehicles. -- $36.5 million in new awards for domestic and international electronic manufacturing services for Army, Navy, space-based and commercial electro- optical applications. -- $19.3 million in new awards from Lockheed Martin to produce combat display systems and provide engineering services for the U.S. Navy's AN/UYQ-70 Advanced Display Systems program in support of ships, aircraft and submarines. -- $13.5 million in new contracts for rugged computers and peripheral products associated with U.S. Army, intelligence and international military programs. -- $5.8 million in new awards for data communications systems, ship communications systems, mission recorders and international avionics products. For the first nine months of fiscal 2001, DRS posted record revenues of $297,683,000, 7 percent above revenues of $277,469,000 for the same period last year. Operating income was a nine-month record at $25,749,000, a 47 percent increase above the $17,513,000 in operating income reported for the comparable period a year earlier. Operating income as a percentage of sales was 8.6 percent, a 37 percent improvement over the 6.3 percent posted for the nine-month period a year ago. For the first three quarters of the fiscal year, the company reported record EBITDA from continuing operations of $37,309,000, 26 percent higher than EBITDA of $29,711,000 for the same period last year. EBITDA as a percentage of sales was 12.5 percent, compared with 10.7 percent for the same period last year, a 17 percent improvement. Net earnings for the nine months ended December 31, 2000 were $7,616,000, or $0.66 per diluted share, 68 percent above earnings from continuing operations of $4,528,000, or $0.46 per diluted share, for the same three quarters in the prior year. Record sales for the nine-month period were primarily attributable to increased shipments in the company's infrared detector An infrared detector is a photodetector that reacts to infrared (IR) radiation. The two main types of detectors are thermal and photonic. The thermal effects of the incident IR radiation can be followed through many temperature dependent phenomena. , rugged computer A rugged (or ruggedized) computer is a computer specifically designed to reliably operate in harsh usage environments and conditions, such as strong vibrations, extreme temperatures and wet or dusty conditions. and radar system product lines, in addition to higher revenue generation in manufacturing services for commercial electro-optical systems and in engineering services for military display workstations. Sales generated by the company's acquisition in the first quarter of General Atronics Corporation, renamed DRS Communications Company Communications Company is a communications unit of the United States Marine Corps. They are part of Combat Logistics Regiment 37 , 3rd Marine Logistics Group (3MLG) and III Marine Expeditionary Force (III MEF). The unit is based out of the Marine Corps Base Camp Smedley D. , also contributed to higher revenues over the comparable period a year earlier. Record operating income during the first three quarters of fiscal 2001 was the result of increased sales and lower operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. , due primarily to the cost reduction and consolidation measures implemented by the company in the second half of last fiscal year. Higher margin electro-optical system production work during the three- and nine-month periods also contributed to record operating income. "During the first nine months of fiscal 2001, we reduced debt by $20.5 million, completed another strategic acquisition, divested two non-core business operations Business operations are those activities involved in the running of a business for the purpose of producing value for the stakeholders. Compare business processes. The outcome of business operations is the harvesting of value from assets and achieved record financial performance," Mr. Newman said summing up. "DRS is in a strong position to deliver accelerated profitability, top-line growth and another record breaking fiscal year. The company is well positioned as a vibrant, emerging, mid-tier technology leader." DRS Technologies provides leading edge products and services to government and commercial customers worldwide. Focused on defense electronics, the company develops and manufactures a broad range of mission critical products, from rugged computers and peripherals to systems and components in the areas of communications, combat systems, data storage, digital imaging, electro-optics See electro-optic. , flight safety and space. Additional information is available on 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: Except for historical information contained herein, the matters set forth in this news release are 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. . The forward-looking statements set forth above involve a number of risks and uncertainties that could cause actual results to differ materially from any such statement, 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. Note to investors: DRS Technologies will host a conference call, which will be simultaneously si·mul·ta·ne·ous adj. 1. Happening, existing, or done at the same time. See Synonyms at contemporary. 2. Mathematics broadcast live over the internet. Mark S. Newman, chairman, president and chief executive officer, and 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, chief financial officer and treasurer TREASURER. An officer entrusted with the treasures or money either of a private individual, a corporation, a company, or a state. 2. It is his duty to use ordinary diligence in the performance of his office, and to account with those whose money he has. , will host the call, which is scheduled for Thursday Thursday: see week. , February February: see month. 8, 2001 at 11:00 a.m. ET. Listeners can access the call live and archived at http://www.streetfusion.com or at the company's web site at http://www.drs.com/investor/index.html. Please allow 15 minutes prior to the call to visit 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)
Three Months Ended December 31,
2000(a) 1999(b)
---- ----
Revenues $ 95,935,000 $ 103,570,000
Operating Income $ 10,091,000 $ 7,120,000
Earnings before Interest, Taxes,
Depreciation and Amortization
(EBITDA) $ 13,751,000 $ 11,031,000
Interest and Related Expenses $ 2,618,000 $ 3,424,000
Earnings from Continuing Operations
before Income Taxes $ 7,247,000 $ 3,553,000
Earnings from Continuing Operations $ 3,479,000 $ 2,120,000
Loss from Discontinued Operations,
Net of Tax $ -- $ (347,000)
Net Earnings $ 3,479,000 $ 1,773,000
Net Earnings per Share of
Common Stock:
Basic Earnings per Share:
Earnings from Continuing
Operations $ .32 $ .23
Loss from Discontinued
Operations, Net of Tax $ -- $ (.04)
Net Earnings $ .32 $ .19
Diluted Earnings per Share:
Earnings from Continuing
Operations $ .28 $ .21
Loss from Discontinued
Operations, Net of Tax $ -- $ (.03)
Net Earnings $ .28 $ .18
Weighted Average Number of Shares
of Common Stock Outstanding:
Basic 10,734,000 9,276,000
Diluted 12,699,000 11,584,000
(a) Fiscal 2001 third quarter results include the operations of DRS
Communications Company, LLC, as a result of the acquisition of
General Atronics Corporation in the first quarter (June 14, 2000).
(b) Certain fiscal 2000 results have been restated to reflect the
Company's current operating structure.
DRS TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
Nine Months Ended December 31,
------------------------------
2000(a) 1999(b)
---- ----
Revenues $ 297,683,000 $ 277,469,000
Operating Income $ 25,749,000 $ 17,513,000
Earnings before Interest, Taxes,
Depreciation and Amortization
(EBITDA) $ 37,309,000 $ 29,711,000
Interest and Related Expenses $ 9,262,000 $ 9,503,000
Earnings from Continuing Operations
before Income Taxes $ 15,708,000 $ 7,591,000
Earnings from Continuing Operations $ 7,616,000 $ 4,528,000
Loss from Discontinued Operations,
Net of Tax $ - $ (727,000)
Net Earnings $ 7,616,000 $ 3,801,000
Net Earnings per Share of Common
Stock:
Basic Earnings per Share:
Earnings from Continuing
Operations $ .76 $ .49
Loss from Discontinued
Operations, Net of Tax $ - $ (.08)
Net Earnings $ .76 $ .41
Diluted Earnings per Share:
Earnings from Continuing
Operations $ .66 $ .46
Loss from Discontinued
Operations, Net of Tax $ - $ (.06)
Net Earnings $ .66 $ .40
Weighted Average Number of Shares
of Common Stock Outstanding:
Basic 10,030,000 9,266,000
Diluted 12,337,000 11,579,000
(a) Fiscal 2001 nine-month results include the operations of DRS
Communications Company, LLC, as a result of the acquisition of
General Atronics Corporation in the first quarter (June 14, 2000).
(b) Certain fiscal 2000 results have been restated to reflect the
Company's current operating structure.
DRS TECHNOLOGIES, INC. AND SUBSIDIARIES
THIRD QUARTER SEGMENT RESULTS FROM CONTINUING OPERATIONS
(UNAUDITED)
Three Months Ended December 31,
2000 1999(3)
---- ----
Electronic Systems Group
Revenues $ 41,655,000 $ 54,141,000
Operating Income $ 3,869,000 $ 4,617,000
Operating Margin 9.3% 8.5%
Bookings $ 39,669,000 $ 38,268,000
Backlog $ 149,534,000 $ 130,215,000
Electro-Optical Systems Group
Revenues $ 36,955,000 $ 33,946,000
Operating Income(1) $ 7,965,000 $ 3,707,000
Operating Margin 21.6% 10.9%
Bookings $ 67,276,000 $ 41,963,000
Backlog $ 213,676,000 $ 168,236,000
Flight Safety and Communications
Group(2)
Revenues $ 15,005,000 $ 13,326,000
Operating Loss $ (987,000) $ (1,084,000)
Operating Margin (6.6)% (8.1)%
Bookings $ 20,440,000 $ 12,987,000
Backlog $ 94,219,000 $ 47,049,000
Total
Revenues $ 95,935,000 $ 103,570,000
Operating Income $ 10,091,000 $ 7,120,000
Operating Margin 10.5% 6.9%
Bookings $ 129,323,000 $ 95,248,000
Backlog $ 458,681,000 $ 346,253,000
(1) Reflects the impact of $5.2 million and $2.9 million in fiscal
2001 and fiscal 2000, respectively, as a result of favorable
contractual adjustments.
(2) Fiscal 2001 third quarter results include the operations of DRS
Communications Company, LLC, as a result of the acquisition of
General Atronics Corporation in the first quarter (June 14, 2000).
(3) Certain fiscal 2000 results have been restated to reflect the
Company's current operating structure.
DRS TECHNOLOGIES, INC. AND SUBSIDIARIES
NINE-MONTH SEGMENT RESULTS FROM CONTINUING OPERATIONS
(UNAUDITED)
Nine Months Ended December 31,
2000 1999(3)
---- ----
Electronic Systems Group
Revenues $ 128,880,000 $ 139,376,000
Operating Income $ 10,131,000 $ 10,676,000
Operating Margin 7.9% 7.7%
Bookings $ 143,678,000 $ 135,074,000
Backlog $ 149,534,000 $ 130,215,000
Electro-Optical Systems Group
Revenues $ 116,242,000 $ 95,394,000
Operating Income(1) $ 16,917,000 $ 7,509,000
Operating Margin 14.6% 7.9%
Bookings $ 138,208,000 $ 78,315,000
Backlog $ 213,676,000 $ 168,236,000
Flight Safety and Communications Group(2)
Revenues $ 45,423,000 $ 36,367,000
Operating (Loss) Income $ (731,000) $ 350,000
Operating Margin (1.6)% 1.0%
Bookings $ 58,533,000 $ 32,042,000
Backlog $ 94,219,000 $ 47,049,000
Total
Revenues $ 297,683,000 $ 277,469,000
Operating Income $ 25,749,000 $ 17,513,000
Operating Margin 8.6% 6.3%
Bookings $ 348,046,000 $ 249,916,000
Backlog $ 458,681,000 $ 346,253,000
(1) Reflects the impact of $6.3 million and $2.9 million in fiscal
2001 and fiscal 2000, respectively, as a result of favorable
contractual adjustments.
(2) Fiscal 2001 nine-month results include the operations of DRS
Communications Company, LLC, as a result of the acquisition of General
Atronics Corporation in the first quarter (June 14, 2000).
(3) Certain fiscal 2000 results have been restated to reflect the
Company's current operating structure.
DRS TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
December 31, March 31,
2000 2000
---- ----
Assets
Cash and Cash Equivalents $ 8,570,000 $ 3,778,000
Other Current Assets 163,670,000 154,855,000
Total Current Assets 172,240,000 158,633,000
Property, Plant and
Equipment, Net 34,070,000 29,006,000
Intangible and Other Assets 124,815,000 132,459,000
Total Assets $ 331,125,000 $ 320,098,000
Liabilities and
Stockholders' Equity
Short-Term Debt $ - $ 17,781,000
Current Installments of
Long-Term Debt 12,982,000 5,699,000
Accounts Payable and Other
Current Liabilities 119,411,000 113,769,000
Total Current Liabilities 132,393,000 137,249,000
Long-Term Debt, Excluding
Current Installments 87,704,000 97,695,000
Other Liabilities 9,653,000 6,970,000
Net Stockholders' Equity 101,375,000 78,184,000
Total Liabilities and
Stockholders' Equity $ 331,125,000 $ 320,098,000
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