DRS Technologies Reports Record Third Quarter Results -- Revenues, Net Earnings and Diluted Eps Advance 47%, 54% and 36%, Respectively.Business Editors PARSIPPANY, N.J.--(BUSINESS WIRE)--Feb. 7, 2002 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 results for the third quarter and nine-month period of fiscal 2002. Results for both periods included significant increases 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. , net earnings and earnings per share. The company's 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, 2001 was a third quarter record. Revenues were $141.2 million, a 47 percent increase above revenues of $95.9 million for the same period last year. Third quarter operating income of $13.9 million was 38 percent higher than the $10.1 million reported for the third quarter a year ago. Operating income as a percentage of sales was 9.8 percent, compared with 10.5 percent for the third quarter last year. 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.
Third quarter net earnings were $5.4 million, or $0.38 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, 54 percent higher than net earnings of $3.5 million, or $0.28 per diluted share, posted for the three months ended December 31, 2000. Free cash flow (cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses less capital expenditures) for the third quarter of fiscal 2002 was approximately $6.6 million. At December 31, 2001, the company had $104.1 million in cash and cash equivalents, compared with $2.3 million at March 31, 2001, the company's prior fiscal year end, reflecting net cash received from the completion of the company's equity offering on December 19, 2001. Total debt on December 31, 2001 was $140.6 million, compared with $83.1 million at March 31, 2001, reflecting utilization of the company's credit facility for acquisitions. Net debt (total debt less cash on hand) was $36.5 million, compared with $80.8 million at March 31, 2001. "DRS continued to demonstrate increased profitability and strong top line growth for the third quarter of fiscal 2002, establishing new quarterly records in revenues, operating income, EBITDA and earnings," said Mark S. Newman, chairman, president and chief executive officer of DRS Technologies. Record fiscal 2002 third quarter revenues were primarily attributable to the addition of sales generated by programs associated with the acquisition of the Sensors
[Listed in CACM 2(5):16, May 1959]. Company (NYSE NYSE See: New York Stock Exchange : BA) at the end of the second quarter. Higher sales from each of the company's operating segments also contributed to the increase, led by higher shipments of second generation 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. ground vehicle electro-optical sighting systems. Third quarter record operating income was primarily the result of higher sales volume overall, as well as improved program performance in the company's flight safety and communications segment. In addition, the company's adoption in the first quarter of Statements of Financial Accounting Standards (SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System ) No. 141 and 142, "Goodwill and Other Intangible Assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. ," effective April 1, 2001, contributed $1.1 million to operating income, $1.0 million to net earnings and $0.07 to earnings per share in the third quarter. Mr. Newman continued, "During the third quarter, we completed an equity offering that resulted in approximately 3.8 million additional shares of DRS common stock in the marketplace and $113.6 million in 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). for the company. This transaction, coupled with the new $240 million credit facility secured in the second quarter, strengthened the company, significantly enhancing our cash position and our ability to implement our strategic plans for long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. growth." DRS secured new orders for products and services valued at approximately $133.3 million in the third quarter and a record $378.2 million in contract awards during the first nine months of fiscal 2002. Funded backlog at December 31, 2001 was approximately $558.4 million, 22 percent above the $458.7 million in backlog at the end of last year's third quarter and backlog of $456.5 million at March 31, 2001, the company's fiscal 2001 year end. Backlog reflected the addition of two acquisitions completed by the company in the second quarter. New contract awards during the third quarter included: - $38.7 million in new orders for advanced infrared aircraft sighting, targeting and weapons systems and maritime infrared 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. systems; - $26.8 million in new orders from Lockheed Martin For the former company, see . Lockheed Martin (NYSE: LMT) is a leading multinational aerospace manufacturer and advanced technology company formed in 1995 by the merger of Lockheed Corporation with Martin Marietta. to manufacture and provide engineering development for combat display systems associated with the U.S. Navy's AN/UYQ-70 Advanced Display Systems program in support of ships, aircraft and submarines; - $16.5 million in new awards for Second Generation Forward Looking Infrared (SG FLIR) ground vehicle sighting, targeting and weapons systems, soldier systems and electro-optical technology development, primarily supporting the U.S. Army; - $16.4 million in new contracts for communications systems, avionics, high- speed digital imaging systems and mission recording systems for U.S. and international military and industrial applications; - $13.2 million in new awards for electronic manufacturing services for domestic and international defense, commercial and space-based applications; - $11.5 million in new orders for rugged computers and peripheral equipment in support of U.S. Army, intelligence and international military programs. The company's Electronic Systems Group achieved solid results for the third quarter, posting strong increases in revenues, operating income and bookings. Sales of $53.1 million were up 28 percent from a year ago, while operating income was $4.3 million, a 12 percent rise over the same prior-year period. The group's operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: was 8.1 percent. Notable performance was achieved on programs associated with U.S.-based 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. programs for the Army, as well as engineering development contracts related to U.S. Navy display workstations and radar support systems. Bookings of $43.3 million contributed to funded backlog of approximately $154.5 million at December 31, 2001, slightly higher than the same time last year. Revenues for DRS's Electro-Optical Systems Group were 76 percent higher for the third quarter at $60.0 million, due primarily to the addition of sales generated by programs associated with the company's acquisition of Boeing's Sensors and Electronic Systems business at the end of the second quarter. Higher shipments of SG FLIR FLIR Forward-Looking Infrared (Radar) FLIR Forward Looking Infrared Radiometer FLIR Forward Looking Infrared Radar FLIR Forward Looking Infra Red sighting and targeting systems associated with U.S. Army ground vehicle applications also contributed to the increase. Operating income was $7.2 million, reflecting the continuance The adjournment or postponement of an action pending in a court to a later date of the same or another session of the court, granted by a court in response to a motion made by a party to a lawsuit. of a healthy operating margin of 12.0 percent. New orders valued at $58.5 million boosted funded backlog for this segment to a record $279.7 million, up 36 percent from the same time a year ago. The company's Flight Safety and Communications Group achieved substantial improvements in performance, with increases in revenues, operating income, operating margin, bookings and backlog. Revenues were $25.7 million, up 44 percent from the prior year. Operating income of $2.6 million for the third quarter represented an operating margin of 10.3 percent, versus a loss of $1.7 million for the same period last year. Increased profitability was due to 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. , as a result of a facility consolidation in the second quarter, coupled with higher sales volume and improved performance throughout the Group's operating units operating unit A type of operating company that engages in transactions with outsiders and that is owned by another business. For example, in 1995 the stockholders of Capital Cities/ABC approved a $19 billion merger with the Walt Disney Company, whereupon . Funded backlog of $123.6 million was 20 percent above backlog at the end of the third quarter of fiscal 2001, driven by bookings of $29.2 million, which were 61 percent above new orders for the third quarter last year. New contracts associated with international electronic manufacturing services, 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. digital cameras for domestic and international customers, and mission recording systems were primarily responsible for the increase. For the first nine months of fiscal 2002, DRS posted record operating results. Revenues of $360.8 million were 21 percent above revenues of $297.7 million for the same period last year. Higher sales during the nine-month period were primarily attributable to the addition of revenues generated by programs related to the company's acquisition of Boeing's Sensors and Electronic Systems business at the end of the second quarter, coupled with increased sales volume in each of the company's operating segments. Operating income was $34.3 million, a 33 percent increase above the $25.7 million reported for the same period last year. Nine-month operating income as a percentage of sales was 9.5 percent, versus 8.6 percent for the same period a year earlier, a 10 percent improvement. Higher operating income during the first three quarters of fiscal 2002 was the result of the overall increase in sales and improved program performance, primarily in the company's flight safety and communications segment. For the first nine months of the fiscal year, the company posted EBITDA of $42.8 million, 15 percent higher than the $37.3 million reported for the comparable period in the prior year. EBITDA as a percentage of sales was 11.9 percent, compared with 12.5 percent last year. Record net earnings for the nine-month period were $13.8 million, or $1.02 per diluted share, an 81 percent increase above net earnings of $7.6 million, or $0.66 per diluted share, for the same three quarters a year ago. The positive impact of the company's adoption of SFAS No. 141 and 142 on nine-month operating income, net earnings and earnings per share was $3.6 million, $3.0 million and $0.22, respectively. Free cash flow for the first three quarters of fiscal 2002 was approximately $2.9 million. "During the nine-month period, we made important progress toward our strategic goals for long-term growth by securing an expanded credit facility, completing an equity offering, acquiring a significant business and achieving record financial results," Mr. Newman added. He concluded, "This positive performance also is indicative of continued strong customer demand for DRS's products and services. As a leading supplier of defense electronics systems for ground, sea and air combat, surveillance, reconnaissance  This article or section needs copy editing for grammar, style, cohesion, tone and/or spelling.You can assist by [ editing it] now. and intelligence gathering missions, DRS has the core technologies and product mix being sought to support U.S. and allied forces for the challenges of asymmetrical a·sym·met·ri·cal or a·sym·met·ric adj. Abbr. a Lacking symmetry between two or more like parts; not symmetrical. , conventional and covert COVERT, BARON. A wife; so called, from her being under the cover or protection of her husband, baron or lord. military operations This is a list of missions, operations, and projects. Missions in support of other missions are not listed independently. World War I ''See also List of military engagements of World War I
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 systems and components in the areas of communications, combat systems, rugged computers, electro-optics See electro-optic. , data storage, digital imaging, flight safety and space. 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: 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 broadcast live over the internet. 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, executive vice president, chief financial officer and treasurer, and Patricia M. Williamson, vice president, corporate communications/investor relations, will host the call, which is scheduled for today, Thursday, February 7, 2002 at 10:00 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy . Listeners can access the call live and archived at DRS's site on page http://www.drs.com/investorInfo/quarterly.cfm or at 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.companyboardroom.com. 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. (See attached tables.)
DRS TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
(Millions Except Earnings per Share)
Three Months Ended December 31,
2001(1) 2000
------------------------------
Revenues $141.2 $95.9
Operating Income $13.9 $10.1
Interest and Related Expenses $3.3 $2.6
Earnings before Income Taxes $10.1 $7.2
Net Earnings $5.4 $3.5
Net Earnings per Share of
Common Stock:
Basic $.42 $.32
Diluted $.38 $.28
Weighted Average
Number of Shares of
Common Stock
Outstanding:
Basic 12.8 10.7
Diluted 14.1 12.7
Nine Months Ended December 31,
2001(1,2) 2000
------------------------------
Revenues $360.8 $297.7
Operating Income $34.3 $25.7
Interest and Related Expenses $7.2 $9.3
Earnings before Income Taxes $25.9 $15.7
Net Earnings $13.8 $7.6
Net Earnings per Share
of Common Stock:
Basic $1.11 $.76
Diluted $1.02 $.66
Weighted Average Number
of Shares of
Common Stock Outstanding:
Basic 12.4 10.0
Diluted 13.5 12.3
1) Fiscal 2002 third quarter and nine-month results include the
operations of DRS Surveillance Support Systems, Inc., as a result of
the acquisition of Electro Mechanical Systems, Inc., a unit of
Lockheed Martin Corporation, on August 22, 2001, and DRS Sensors &
Targeting Systems, Inc., as a result of the acquisition of Sensors and
Electronic Systems, a business of The Boeing Company, on September 28,
2001.
2) Fiscal 2002 nine-month results include a full nine months of
operations from DRS Communications Company, LLC, as a result of the
acquisition of General Atronics Corporation in the first quarter of
fiscal 2001 (June 14, 2000).
DRS TECHNOLOGIES, INC. AND SUBSIDIARIES
SELECTED FINANCIAL DATA
(UNAUDITED)
($ Millions)
Three Months Ended Nine Months Ended
December 31, December 31,
2001(1) 2000 2001(1,2) 2000
-----------------------------------------------
EBITDA $17.0 $13.8 $42.8 $37.3
Depreciation and
Amortization $3.6 $3.9 $9.6 $12.5
Capital Expenditures $3.0 $1.9 $10.5 $10.3
Bookings $133.3 $129.3 $378.2 $348.0
December 31, March 31,
2001(1) 2001
---------------------------------------------
Backlog(3) $558.4 $456.5
Cash and Cash Equivalents $104.1 $2.3
Total Debt $140.6 $83.1
Stockholders' Equity $247.1 $111.9
1) Fiscal 2002 third quarter and nine-month results include the
operations of DRS Surveillance Support Systems, Inc., as a result of
the acquisition of Electro Mechanical Systems, Inc., a unit of
Lockheed Martin Corporation, on August 22, 2001, and DRS Sensors &
Targeting Systems, Inc., as a result of the acquisition of Sensors and
Electronic Systems, a business of The Boeing Company, on September 28,
2001.
2) Fiscal 2002 nine-month results include a full nine months of
operations from DRS Communications Company, LLC, as a result of the
acquisition of General Atronics Corporation in the first quarter of
fiscal 2001 (June 14, 2000).
3) Backlog at December 31, 2001 includes approximately $93.6
million from DRS Sensors & Targeting Systems, Inc., as a result of the
acquisition of the Sensors and Electronic Systems business of The
Boeing Company on September 28, 2001, and $10.8 million from DRS
Surveillance Support Systems, Inc., as a result of the acquisition of
Electro Mechanical Systems, Inc., a unit of Lockheed Martin
Corporation, on August 22, 2001.
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