DRS Technologies Reports Strong Third Quarter Results.Business Editors PARSIPPANY, N.J.--(BUSINESS WIRE)--Feb. 10, 2000 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 Up 37%, 66% and 167%, Respectively; Performance On Target for a Record Year 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. (ASE (Adaptive Server Enterprise) A relational DBMS from Sybase that runs on Windows NT/2000, Linux and a variety of Unix platforms. ASE is a comprehensive and robust data management product with a long history dating back to the late 1980s. : 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 strong financial results for the third quarter and nine-month period ended December December: see month. 31, 1999. Revenues and operating income set new records for both periods. 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 and net earnings were a third quarter high. For the third quarter of fiscal 2000, revenues set a new quarterly record of $105,664,000, up 37 percent from revenues of $76,991,000 reported for the third quarter last year. Record quarterly operating income of $6,653,000 was 66 percent higher than the $4,006,000 in operating income reported for the same three-month period a year earlier. 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.
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, a third quarter record, despite the effect of 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. of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $693,000, or $0.03 per diluted share. These charges were the result of management changes within the company's Electro-Optical Systems Group, a commercial plant closure and the transfer of certain product lines to other company facilities during the quarter. Fiscal 2000 third quarter net earnings were a substantial improvement over the $664,000, or $0.10 per diluted share, in net earnings before an extraordinary item recorded in the prior year's third quarter. The company incurred an extraordinary charge of $2,306,000, net of tax, in last year's third quarter related to refinancing Refinancing An extension and/or increase in amount of existing debt. and modifications to the company's existing credit facility in support of its acquisition program. Last year's third quarter net loss after the charge for the extraordinary item, net of tax, was $1,642,000, or $0.25 per diluted share. Mark S. Newman, chairman, president and chief executive officer of DRS Technologies, remarked: &uot;We are pleased to report another quarter of solid financial - more results, establishing new quarterly records in revenues and operating income, and new third quarter records in EBITDA and net earnings. The company's strong performance during the period was the direct result of a corporate-wide management effort to strategically focus on implementing operational improvements, identifying synergistic synergistic /syn·er·gis·tic/ (sin?er-jis´tik) 1. acting together. 2. enhancing the effect of another force or agent. syn·er·gis·tic adj. 1. areas where we can achieve increased efficiencies, and reducing costs to enhance 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. profitability, while accelerating revenue growth in our core defense businesses. Results for the three months were a significant improvement over the same period last year, and we set new records in sales, operating income and EBITDA for the first nine months of fiscal 2000. The progress achieved to date bodes well for a strong fourth quarter and another record fiscal year.&uot; During the third quarter, the company began executing a series of cost reduction measures designed to provide long-term operational efficiencies and financial benefits for the corporation. These actions included the closing of a Mid-West facility, thereby effecting a consolidation of domestic commercial operations into two plants, and the transfer of management oversight
Oversight may refer to:
The company currently is evaluating additional initiatives and anticipates that these will be implemented in the fourth quarter of fiscal 2000. Mr. Newman continued, &uot;Restructuring charges related to these additional initiatives are expected to be offset substantially by operating efficiencies already achieved and are not expected to adversely impact earnings estimates for the fourth quarter or fiscal year. The benefits of these actions, combined with measures already taken in the third quarter, are expected to generate more than $5 million in annual cost savings and will have a favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. influence on operating results throughout next fiscal year and beyond.&uot; &uot;As expected, DRS remains on target to turn in record performance for fiscal 2000,&uot; he said. &uot;With the company poised as an emerging, mid-tier defense technology leader, we are in a strong position to demonstrate accelerated profitability and achieve our goal of $400 million in revenues for the year.&uot; Mr. Newman stated that the company received new contract awards valued at approximately $97 million in the third quarter and approximately $257 million for the first nine months of fiscal 2000. 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 31, 1999 remained at favorable levels, approximating approximating, adj See approximal. $350 million. He highlighted some of the key awards received during the quarter: - $18.3 million in new awards were received 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. on the AN/UYQ-70 Advanced Display Systems program for DRS to supply processing, display and peripheral Any input, output or storage device connected externally or internally to the computer's CPU, such as a monitor, keyboard, printer, disk, tape, graphics tablet, scanner, joy stick, paddle or mouse. equipment to U.S. Navy ships, aircraft and submarines. - $15.5 million in additional contracts were captured to provide rugged computers 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 peripheral products to support U.S. and international 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 programs. - $14.1 million in new orders were booked to provide weapons fire control and laser-based products used in various military weapons and training applications. - $13.4 million in additional contracts were awarded for engineering and production of Thermal thermal /ther·mal/ (ther´m'l) pertaining to or characterized by heat. ther·mal adj. 1. Of, relating to, using, producing, or caused by heat. 2. Imaging Systems, B-Kits and spares for the sighting systems of the U.S. Army's Abrams Abrams may refer to:
System Enhancement Package (SEP 1. SEP - Someone Else's Problem. 2. (tool) SEP - A SASD tool from IDE. ) and Bradley M2A M2A Message to Anywhere (mobile messaging framework) 3 Fighting Vehicles in association with the Horizontal horizontal /hor·i·zon·tal/ (hor?i-zon´t'l) 1. parallel to the plane of the horizon. 2. occupying or confined to a single level in a hierarchy. horizontal parallel to the plane of the horizon. Technology Integration (HTI HTI Haiti (ISO Country code) HTI High Tech Institute HTI Hand Tools Institute HTI Hamilton Island, Queensland, Australia (Airport Code) HTI Horizontal Technology Integration ) program. - $11.3 million in new contracts were received to provide 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. sensing detectors and cooler assemblies used in U.S. Army targeting and acquisition systems. For the first nine months of fiscal 2000, DRS posted record revenues, operating income and EBITDA. Revenues of $284,772,000 were 68 percent above revenues of $169,105,000 for the same nine-month period last year. The company reported a new high in operating income of $16,502,000 for the nine months ended December 31, 1999, more than double the $7,821,000 in operating income posted for the comparable period a year ago. EBITDA of $29,400,000 was 87 percent above the $15,686,000 reported for the first three quarters in the prior year. Net earnings were $3,801,000, or $0.40 per diluted share, versus $1,045,000, or $0.16 per diluted share, in net earnings before a charge for the extraordinary item during the third quarter of fiscal 1999. Last year's net loss for the nine-month period after the charge for the extraordinary item, net of tax, was $1,261,000, or $0.19 per diluted share. Record revenues for the three- and nine-month periods of fiscal 2000 were positively impacted by businesses acquired in fiscal 1999, and by the benefit of a full third quarter and nine months of revenues from the company's ground electro-optical systems and focal plane The plane, perpendicular to the optical axis of the lens, in which images of points in the object field of the lens are focused. array businesses acquired on October October: see month. 20, 1998. Higher revenues also were attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to increased shipments of the company's military display workstation workstation Computer intended for use by one person, but with a much faster processor and more memory than an ordinary personal computer. Workstations are designed for powerful business applications that do large numbers of calculations or require high-speed graphical products. Substantially higher operating income during both periods of fiscal 2000 was due to increased revenues, primarily as a result of businesses acquired last fiscal year. For the nine-month period ended December 31, 1998, operating income included charges of - more approximately $550,000, or $0.05 per diluted share, in the second quarter for costs associated with the closing of a commercial facility and write-offs of certain receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed and inventory necessitated by the bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most filing of a commercial customer. DRS Technologies provides leading edge products and services to government and commercial markets 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, data storage, digital imaging, electro-optics See electro-optic. , flight safety and space. The company offers a full complement of technical support and advanced manufacturing services. 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.
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DRS TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended December 31,
1999 1998
Revenues $105,664,000 $ 76,991,000
Restructuring Charges $ 693,000 $ --
Operating Income $ 6,653,000 $ 4,006,000
Earnings before Interest, Taxes,
Depreciation and Amortization (EBITDA) $ 10,741,000 $ 7,563,000
Interest and Related Expenses $ 3,426,000 $ 2,988,000
Earnings before Income Taxes $ 3,057,000 $ 1,054,000
Net Earnings before Extraordinary Item $ 1,773,000 $ 664,000
Extraordinary Item, Net of Tax $ -- $ (2,306,000)
Net Earnings (Loss) after Extraordinary
Item $ 1,773,000 $ (1,642,000)
Net Earnings per Share of Common Stock
before Extraordinary Item:
Basic $ .19 $ .10
Diluted $ .18 $ .10
Net Earnings (Loss) per Share of Common
Stock after Extraordinary Item:
Basic $ .19 $ (.26)
Diluted $ .18 $ (.25)
Weighted Average Number of Shares of
Common Stock Outstanding:
Basic 9,276,000 6,350,000
Diluted 11,584,000 6,515,000
Nine Months Ended December 31,
1999 1998
Revenues $ 284,772,000 $ 169,105,000
Restructuring Charges $ 693,000 $ --
Operating Income $ 16,502,000 $ 7,821,000
Earnings before Interest, Taxes,
Depreciation and Amortization (EBITDA) $ 29,400,000 $ 15,686,000
Interest and Related Expenses $ 9,507,000 $ 6,101,000
Earnings before Income Taxes $ 6,553,000 $ 1,659,000
Net Earnings before Extraordinary Item $ 3,801,000 $ 1,045,000
Extraordinary Item, Net of Tax $ -- $ (2,306,000)
Net Earnings (Loss) after Extraordinary
Item $ 3,801,000 $ (1,261,000)
Net Earnings per Share of Common Stock
before Extraordinary Item:
Basic $ .41 $ .17
Diluted $ .40 $ .16
Net Earnings (Loss) per Share of Common
Stock after Extraordinary Item:
Basic $ .41 $ (.20)
Diluted $ .40 $ (.19)
Weighted Average Number of Shares of
Common Stock Outstanding:
Basic 9,266,000 6,266,000
Diluted 11,579,000 6,481,000
DRS TECHNOLOGIES, INC. AND SUBSIDIARIES
THIRD QUARTER SEGMENT RESULTS (UNAUDITED)
Three Months Ended December 31,
1999 1998
Electronic Systems Group(1)
Revenues $ 54,141,000 $ 30,804,000
Operating Income $ 4,617,000 $ 2,068,000
Operating Margin 8.5% 6.7%
Bookings $ 38,268,000 $ 19,516,000
Backlog $ 130,228,000 $ 112,183,000
Electro-Optical Systems Group(2)
Revenues $ 36,520,000 $ 26,038,000
Operating Income $ 2,456,000 $ 1,441,000
Operating Margin 6.7% 5.5%
Bookings $ 42,957,000 $ 82,647,000
Backlog $ 170,461,000 $ 203,878,000
Flight Safety and Communications Group
Revenues $ 10,752,000 $ 15,563,000
Operating Income $ 167,000 $ 1,390,000
Operating Margin 1.6% 8.9%
Bookings $ 11,993,000 $ 14,552,000
Backlog $ 44,811,000 $ 42,621,000
Data Systems Group
Revenues $ 4,251,000 $ 4,586,000
Operating Loss $ (490,000) $ (798,000)
Operating Margin (11.5)% (17.4)%
Bookings $ 3,592,000 $ 4,148,000
Backlog $ 4,391,000 $ 6,061,000
Total
Revenues $ 105,664,000 $ 76,991,000
Operating Income $ 6,653,000 $ 4,006,000
Operating Margin 6.3% 5.2%
Bookings $ 96,810,000 $ 120,863,000
Backlog $ 349,891,000 $ 364,743,000
(1) Fiscal 2000 third quarter results include the operations of DRS
Advanced Programs, Inc., DRS Rugged Systems, Inc., DRS Rugged
Systems (Europe) Ltd. and DRS Rugged Systems (Australia) Pty.
Ltd., as a result of the acquisition of NAI Technologies, Inc. in
the fourth quarter of fiscal 1999 and the acquisition of European
Data Systems Ltd. in the second quarter of fiscal 2000.
(2) Fiscal 2000 third quarter results include a full three months of
the operations of DRS Sensor Systems, Inc. and DRS Infrared
Technologies, LP, as a result of the acquisition of certain
Second-Generation Ground Electro-Optical Systems and Focal Plane
Array businesses of Raytheon Company during the third quarter of
fiscal 1999.
DRS TECHNOLOGIES, INC. AND SUBSIDIARIES
NINE-MONTH SEGMENT RESULTS (UNAUDITED)
Nine Months Ended December 31,
1999 1998
Electronic Systems Group(3)
Revenues $ 139,376,000 $ 79,534,000
Operating Income $ 10,676,000 $ 5,757,000
Operating Margin 7.7% 7.2%
Bookings $ 135,074,000 $ 99,921,000
Backlog $ 130,228,000 $ 112,183,000
Electro-Optical Systems Group(4)
Revenues $ 102,058,000 $ 38,475,000
Operating Income $ 5,901,000 $ 1,186,000
Operating Margin 5.8% 3.1%
Bookings $ 84,091,000 $ 96,811,000
Backlog $ 170,461,000 $ 203,878,000
Flight Safety and Communications Group
Revenues $ 29,703,000 $ 35,856,000
Operating Income $ 1,958,000 $ 2,688,000
Operating Margin 6.6% 7.5%
Bookings $ 26,266,000 $ 36,701,000
Backlog $ 44,811,000 $ 42,621,000
Data Systems Group
Revenues $ 13,635,000 $ 15,240,000
Operating Loss $ (1,638,000) $ (1,488,000)
Operating Margin (12.0)% (9.8)%
Bookings $ 11,123,000 $ 16,222,000
Backlog $ 4,391,000 $ 6,061,000
Total
Revenues $ 284,772,000 $ 169,105,000
Operating Income $ 16,502,000 $ 7,821,000
Operating Margin 5.8% 4.6%
Bookings $ 256,554,000 $ 249,655,000
Backlog $ 349,891,000 $ 364,743,000
(3) Fiscal 2000 nine-month results include the operations of DRS
Advanced Programs, Inc., DRS Rugged Systems, Inc., DRS Rugged
Systems (Europe) Ltd. and DRS Rugged Systems (Australia) Pty.
Ltd., as a result of the acquisition of NAI Technologies, Inc. in
the fourth quarter of fiscal 1999 and the acquisition of European
Data Systems Ltd. in the second quarter of fiscal 2000.
(4) Fiscal 2000 nine-month results include a full nine months of the
operations of DRS Sensor Systems, Inc. and DRS Infrared
Technologies, LP, as a result of the acquisition of certain
Second-Generation Ground Electro-Optical Systems and Focal Plane
Array businesses of Raytheon Company during the third quarter of
fiscal 1999.
DRS TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
December 31, March 31,
1999 1999
Assets
Cash and Cash Equivalents $ 2,920,000 $ 10,154,000
Other Current Assets 144,750,000 153,358,000
Total Current Assets 147,670,000 163,512,000
Property, Plant and Equipment, Net 30,846,000 34,163,000
Intangible and Other Assets 136,982,000 132,669,000
Total Assets $315,498,000 $330,344,000
Liabilities and Stockholders' Equity
Short-Term Debt $ 24,556,000 $ 9,169,000
Current Installments of Long-Term Debt 5,302,000 5,844,000
Accounts Payable and Other Current
Liabilities 96,374,000 135,008,000
Total Current Liabilities 126,232,000 150,021,000
Long-Term Debt, Excluding Current
Installments 104,600,000 102,091,000
Deferred Income Taxes and Other
Liabilities 5,984,000 4,790,000
Net Stockholders' Equity 78,682,000 73,442,000
Total Liabilities and Stockholders'
Equity $315,498,000 $330,344,000
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