L-3 Communications Announces Strong First Quarter 2000 Results; Sales, Operating Income and Earnings Per Share Increase 36.8%, 32.4% and 39.1%, Respectively.Business Editors NEW YORK--(BUSINESS WIRE)--April 25, 2000 L-3 Communications
L-3 Communications Holdings, Inc. (NYSE: LLL) is a company that supplies command, control, communications, intelligence, surveillance and reconnaissance (C3ISR) systems and (NYSE NYSE See: New York Stock Exchange :LLL LLL abbr. left lower lobe (of the lung) ) today announced strong results for the first quarter of 2000, including significant increases in sales, profit and cash flow compared to the same period a year ago. Sales for the 2000 first quarter increased 36.8% to $377.1 million, compared to sales of $275.6 million for the same period in 1999. First quarter 2000 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. was $34.7 million, a 32.4% increase over operating income of $26.2 million for the same period in 1999. As a percentage of sales, operating income was 9.2% in the first quarter, versus 9.5% in the same period of 1999. 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.
Net income for the first quarter of 2000 rose 51.4% to $10.9 million, compared with net income of $7.2 million a year ago. 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 rose 39.1% to $0.32 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, over $0.23 per diluted share for the same period in 1999. Included in the quarter was a net gain of $0.4 million, or $0.01 per diluted share, consisting of an after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. gain of $6.8 million on the sale of the company's interest in the Network Security business, largely offset by a write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. in the carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. of certain other investments. Bookings for the company's products continued to exhibit strong growth, with funded orders in the first quarter of 2000 increasing 42.1% to $392.7 million, compared to $276.3 million in the same period a year ago. 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. increased 38.5% to $1,212.5 million at March 31, 2000, compared to $875.3 million at March 31, 1999. "L-3 began 2000 with an excellent first quarter," said Frank C. Lanza Lan·za , Mario Originally Alfredo Arnold Cocozza. 1921-1957. American tenor and actor who recorded both popular music and opera. His films include That Midnight Kiss (1946). , chairman and chief executive officer of L-3 Communications. "We continued to execute well, with solid performance in each of the segments of our business, and particularly good results from secure data links, Secure Terminal Equipment and ocean products. During the quarter, we also enhanced our growth prospects by adding key acquisitions that support our strategy for a broader product base and the application of present products to new sectors." In the first quarter, L-3 announced that it had acquired the assets of Raytheon's Training Devices and Training Services, a leader in fully integrated simulation training products. The company also announced that it had signed a definitive agreement to acquire the Traffic Alert and Collision Avoidance System (1) See adaptive cruise control. (2) A passenger car system that detects objects on the road that the driver may not be able to see. Using radar or infrared sensors, distant objects, such as a deer crossing the road at night or in a fog, are projected onto the (TCAS TCAS Traffic Alert and Collision Avoidance System TCAS Traffic Collision Avoidance System TCAS T-Carrier Administration System TCAS Terminal Control Address Space (MVS/TSO) TCAS Technical Control and Analysis System ) business, an 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. safety system product line of Honeywell In 1927, the Minneapolis Honeywell Regulator Company was formed as a merger of Alfred Butz' temperature control company (1885) and Mark Honeywell's water heater company (1906). In 1957, Honeywell, along with Ratheon, introduced one of the first computers in the U.S., the Datamatic 1000. , Inc. L-3 has entered into a memorandum of agreement A memorandum of agreement (MOA) or cooperative agreement is a document written between parties to cooperatively work together on an agreed upon project or meet an agreed upon objective. The purpose of an MOA is to have a written understanding of the agreement between parties. to form a joint venture company for TCAS in which Sextant sextant, instrument for measuring the altitude of the sun or another celestial body; such measurements can then be used to determine the observer's geographical position or for other navigational, surveying, or astronomical applications. , a subsidiary of Thomson CSF Cerebrospinal Fluid (CSF) Analysis Definition Cerebrospinal fluid (CSF) analysis is a laboratory test to examine a sample of the fluid surrounding the brain and spinal cord. , will acquire a 30% interest. Mr. Lanza commented, "With the acquisition of TDTS TDTS Tactical Data Transfer System , L-3 enters into the rapidly growing simulation and training business for the U.S. military. This sector has been positively impacted by the U.S. government's decision to increase its reliance on simulation and training to reduce its operational, maintenance and training costs. We restored some of this business' legacy by bringing back the name of its visionary 1. visionary - One who hacks vision, in the sense of an Artificial Intelligence researcher working on the problem of getting computers to "see" things using TV cameras. (There isn't any problem in sending information from a TV camera to a computer. founder to the operation -- Link Simulation and Training." "TCAS is a premier product addition to our aviation product line, and significantly expands our growing market in transportation," continued Mr. Lanza. "There is significant opportunity to market TCAS in the U.S. to military markets as well as to regional airlines and corporate aircraft operators. Furthermore, our arrangement with Sextant, with its considerable marketing and distribution resources overseas, will enable us to accelerate opportunities with international commercial customers." Mr. Lanza noted that L-3 has taken steps to leverage key opportunities in the commercial communications and commercial transportation markets. "In 1999, we achieved a critical mass in these two commercial areas having generated about $350 million in revenue. With the addition of new operations, TCAS and our leading suppliers of antennas and tracking systems for the satellite industry -- LNR LNR Local Nature Reserve (United Kingdom) LNR Last Number Redial LNR London News Radio LNR Left/Node/Right (in order binary tree traversal in computer programming) LNR Local Negotiated Rate and EMP EMP abbr. electromagnetic pulse -- we have built up a $500 million business as we go forward. We continue to enter other related growth areas as well, such as our recent agreement with Core Software Technology, which allows us to apply our broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). communications skills to remote imaging providers." L-3's Commercial Communications Group includes: - Secure Communication Systems booked approximately $159 million in funded orders. Key bookings included awards for the company's core data link programs for the U-2, CHBDL and Predator UAV, and follow-on funding for Secure Terminal Equipment, various signal intelligence programs, International Space Station communication systems and the ACTS military satellite communications network. The quarter also included activity for the Link Simulation and Training business paced by awards for C-130, C-18, E-3 and Battlefield Mobility and Target Acquisition programs. - Specialized Communication Products booked approximately $234 million in funded orders. Ocean products bookings were led by orders for the company's core power distribution equipment, dipping sonar and towed array products for U.S. and international customers. Additionally, the company booked strategically important orders for the Airborne Low Frequency Sonar and Multi-Purpose Processor retrofit programs. - Telemetry, Instrumentation and Space products included awards from Boeing for encoders for the Joint Direct Attack Munition program, space transponders for the classified military satellite market, encoders for Lockheed Martin on the Guided Multiple Launch Rocket System, and a telemetry system for the Maverick Weapon Systems Evaluation Platform for Redstone Arsenal. Microwave components achieved strong results for the quarter led by orders for the company's filters, isolators and duplexer products for base station applications for customers ranging from original equipment manufacturers to service providers. Aviation Recorders booked important orders for Delta's fleet retrofit program, Raytheon and Bombardier regional jets, and American and Continental airlines, while the display business booked key orders for the S-3 and T-38 military aircraft. - Strategically important commercial orders activity in the quarter included bookings for Static Transfer Switches for internet service providers, locomotive displays for General Motors, satellite ground station equipment for Core Software Technology, Inc. and United Pan Europe Communications and broadband test equipment for Sirius Satellite Radio Incorporated. In the commercial transportation area are: - Secure Communication Systems booked approximately $159 million in funded orders. Key bookings included awards for the company's core data link programs for the U-2, CHBDL and Predator UAV, and follow-on funding for Secure Terminal Equipment, various signal intelligence programs, International Space Station communication systems and the ACTS military satellite communications network. The quarter also included activity for the Link Simulation and Training business paced by awards for C-130, C-18, E-3 and Battlefield Mobility and Target Acquisition programs. - Specialized Communication Products booked approximately $234 million in funded orders. Ocean products bookings were led by orders for the company's core power distribution equipment, dipping sonar and towed array products for U.S. and international customers. Additionally, the company booked strategically important orders for the Airborne Low Frequency Sonar and Multi-Purpose Processor retrofit programs. - Telemetry, Instrumentation and Space products included awards from Boeing for encoders for the Joint Direct Attack Munition program, space transponders for the classified military satellite market, encoders for Lockheed Martin on the Guided Multiple Launch Rocket System, and a telemetry system for the Maverick Weapon Systems Evaluation Platform for Redstone Arsenal. Microwave components achieved strong results for the quarter led by orders for the company's filters, isolators and duplexer products for base station applications for customers ranging from original equipment manufacturers to service providers. Aviation Recorders booked important orders for Delta's fleet retrofit program, Raytheon and Bombardier regional jets, and American and Continental airlines, while the display business booked key orders for the S-3 and T-38 military aircraft. - Strategically important commercial orders activity in the quarter included bookings for Static Transfer Switches for internet service providers, locomotive displays for General Motors, satellite ground station equipment for Core Software Technology, Inc. and United Pan Europe Communications and broadband test equipment for Sirius Satellite Radio Incorporated. Mr. Lanza concluded, "Looking ahead, we remain confident. Demand for our products and systems remains solid, our strategic acquisition program has positioned us well for growth, and we will continue to execute acquisitions that increase our market presence and product offerings. In our commercial efforts, we are pursuing the fast-growing, high- demand market for broadband communications and key transportation niches, and will continue to leverage our position in these markets." The $392.7 million in first quarter bookings included the following notable contract awards: - Secure Communication Systems booked approximately $159 million in funded orders. Key bookings included awards for the company's core data link programs for the U-2, CHBDL and Predator UAV, and follow-on funding for Secure Terminal Equipment, various signal intelligence programs, International Space Station communication systems and the ACTS military satellite communications network. The quarter also included activity for the Link Simulation and Training business paced by awards for C-130, C-18, E-3 and Battlefield Mobility and Target Acquisition programs. - Specialized Communication Products booked approximately $234 million in funded orders. Ocean products bookings were led by orders for the company's core power distribution equipment, dipping sonar and towed array products for U.S. and international customers. Additionally, the company booked strategically important orders for the Airborne Low Frequency Sonar and Multi-Purpose Processor retrofit programs. - Telemetry, Instrumentation and Space products included awards from Boeing for encoders for the Joint Direct Attack Munition program, space transponders for the classified military satellite market, encoders for Lockheed Martin on the Guided Multiple Launch Rocket System, and a telemetry system for the Maverick Weapon Systems Evaluation Platform for Redstone Arsenal. Microwave components achieved strong results for the quarter led by orders for the company's filters, isolators and duplexer products for base station applications for customers ranging from original equipment manufacturers to service providers. Aviation Recorders booked important orders for Delta's fleet retrofit program, Raytheon and Bombardier regional jets, and American and Continental airlines, while the display business booked key orders for the S-3 and T-38 military aircraft. - Strategically important commercial orders activity in the quarter included bookings for Static Transfer Switches for internet service providers, locomotive displays for General Motors, satellite ground station equipment for Core Software Technology, Inc. and United Pan Europe Communications and broadband test equipment for Sirius Satellite Radio Incorporated. In conjunction with this release, L-3 Communications 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 . Frank C. Lanza, Chairman and Chief Executive Officer, Robert V. LaPenta, President and Chief Financial Officer, and Cynthia Swain, Vice President-Corporate Communications, will host the call, which is scheduled for today, April 25, 2000 at 4:15 p.m. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. . Listeners can access the conference call live and archived over the Internet at http://www.streetfusion.com. Please allow 15 minutes prior to the call to visit the site 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. Headquartered in New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. , L-3 Communications is a leading merchant supplier of secure communication systems and products, microwave components, avionics and ocean systems and telemetry telemetry Highly automated communications process by which data are collected from instruments located at remote or inaccessible points and transmitted to receiving equipment for measurement, monitoring, display, and recording. , instrumentation instrumentation, in music: see orchestra and orchestration. instrumentation In technology, the development and use of precise measuring, analysis, and control equipment. , space and wireless products. Its customers include the Department of Defense (DoD), select U.S. Government intelligence agencies, foreign governments, aerospace and defense prime contractors and commercial telecommunication telecommunication Communication between parties at a distance from one another. Modern telecommunication systems—capable of transmitting telephone, fax, data, radio, or television signals—can transmit large volumes of information over long distances. and cellular customers. 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, including the risks and uncertainties discussed in the company's Safe Harbor Compliance Statement for Forward-looking Statements included in the company's recent filings, including Forms 10-K and 10- Q, with the Securities and Exchange Commission. - Financial Tables Follow -
L-3 COMMUNICATIONS HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share data)
(Unaudited)
Three Months Ended
March 31,
2000 1999
Sales $377.1 $275.6
Costs and expenses 342.4 249.4
Operating income 34.7 26.2
Interest income 0.8 1.0
Interest expense 17.6 15.5
Income before income taxes 17.9 11.7
Provision for income taxes 7.0 4.5
Net income $10.9 $7.2
Earnings per share:
Basic $0.33 $0.24
Diluted $0.32 $0.23
Weighted average common shares outstanding:
Basic 33,042,000 30,491,000
Diluted 34,478,000 31,884,000
L-3 COMMUNICATIONS HOLDINGS, INC.
SELECTED FINANCIAL DATA
(In millions)
(Unaudited)
Three Months Ended
March 31,
2000 1999
EBITDA (a) $50.4 $38.9
Depreciation and amortization $15.7 $12.7
Capital expenditures $5.4 $4.5
Orders (funded) $392.7 $276.3
March 31, December 31,
Period end data: 2000 1999
Backlog (funded) $1,212.5 $1,003.7
Cash & cash equivalents $27.4 $42.8
Total debt $785.0 $605.0
Shareholders' equity $599.2 $583.2
(a) EBITDA is defined as operating income plus depreciation and amortization. |
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