L-3 Communications Announces Strong Second Quarter Results.Business Editors NEW YORK--(BUSINESS WIRE)--July 25, 2000 -- Sales, 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 increase 46.6%, 59.8% and 42.4%, respectively -- 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 second quarter ended June 30, 2000. Sales for the second quarter of 2000 increased 46.6% to $461.0 million, from $314.4 million in the second quarter of 1999. In the second quarter of 2000, operating income increased 59.8% to $49.7 million compared with operating income of $31.1 million for the same quarter a year ago. Operating income as a percentage of sales was 10.8% in the second quarter, versus 9.9% for the same period in 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.
For the 2000 second quarter, the company reported net income of $16.5 million, an increase of 48.6% over net income of $11.1 million in the second quarter of 1999. Diluted earnings per share rose 42.4% to $0.47 per diluted share, compared with $0.33 per diluted share for the same period in 1999. Included in the quarter was a net gain of $0.8 million, or $0.02 per diluted share, consisting of an after-tax gain of $2.0 million on the sale of a business offset by certain charges. Free cash flow amounted to approximately $20 million for the quarter, reflecting the company's continued focus on cash management. "We continued to see the benefits of successful execution on our business strategy with strong second quarter results," said Frank C. Lanza, chairman and chief executive officer of L-3 Communications. "There was solid performance in the major segments of our business, including data links, ocean products, microwave and explosive detection systems Noun 1. explosive detection system - a rapid automatic system to detect plastic explosives in passengers' luggage using X-ray technology and computers; designed for use in airports EDS ." Mr. Lanza also noted that the company achieved strong second quarter bookings, with $480.5 million in funded orders, up 45.1% from the second quarter a year ago. Resulting backlog at June 30, 2000 was $1,268.6 million, up 33.3% from $951.6 million at June 30, 1999. "In the second quarter, L-3 also continued its acquisition strategy," continued Mr. Lanza. "L-3 acquired MPRI MPRI Military Professional Resources Inc. MPRI Midwest Proton Radiotherapy Institute MPRI Mannose 6-Phosphate Receptor, Cation-Independent MPRI Multiphoton Resonance Ionization , which provides teaching and training programs to domestic and international governments as well as commercial customers. MPRI is a very well managed company with good margins in a growing market. As U.S. military forces look to outsourcing to compensate for increased costs and manpower constraints, MPRI has the people and the proven programs to continue its growth in excess of 10% per year." On July 13, L-3 announced a $15 million investment for majority control of LogiMetrics, Inc. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :LGMTA), a designer, manufacturer, and marketer of broadband wireless See wireless broadband. communications infrastructure equipment. "LogiMetrics' transceivers advance our efforts in LMDS (Local Multipoint Distribution Service) A digital wireless transmission system that works in the 28 GHz range in the U.S. and 24-40 GHz overseas. It requires line of sight between transmitter and receiving antenna, which can be from one to four miles apart technology by two years, and complement our existing subscriber units," said Mr. Lanza. "This combination allows us to provide more products to the rapidly-growing broadband wireless infrastructure market in an earlier timeframe." Regarding the acquisition environment, Mr. Lanza noted, "There is no shortage of candidates -- either assets of larger companies or smaller public and private companies. We will continue to maintain our very disciplined review process and adhere to adhere to verb 1. follow, keep, maintain, respect, observe, be true, fulfil, obey, heed, keep to, abide by, be loyal, mind, be constant, be faithful 2. our policy that each acquisition be accretive within 12 months. With such a robust environment, we expect to continue growing L-3 through both internal and external means well into the future." There were also significant developments in L-3's existing businesses that included: -- The continued expansion of the company's recorder business, in which L-3 has leveraged its extensive aviation recorder experience into the railroad and maritime niche markets. In May, L-3 won a contract to provide Hardened Voyage Recorders for use in new maritime vessels produced by Samsung. This represents the company's first agreement in the $500 million market for hardened voyage recording devices. -- The signing of a letter of intent to permit Ampex Data Systems, a leading distributor of flight test equipment, to market L-3's Strategic/Tactical Airborne Recorder(TM) (S/TAR), a state-of-the-art, high performance, solid-state recorder designed for the severe environments of flight test applications. This agreement allows L-3 to further penetrate the market for this product. -- The award of initial orders for L-3's new line of mixed signal digital test and instrumentation products by Sirius Satellite Radio, Inc. for its satellite and entertainment radio downlink for passenger cars. -- The continued expansion of the company's recorder business, in which L-3 has leveraged its extensive aviation recorder experience into the railroad and maritime niche markets. In May, L-3 won a contract to provide Hardened Voyage Recorders for use in new maritime vessels produced by Samsung. This represents the company's first agreement in the $500 million market for hardened voyage recording devices. -- The signing of a letter of intent to permit Ampex Data Systems, a leading distributor of flight test equipment, to market L-3's Strategic/Tactical Airborne Recorder(TM) (S/TAR), a state-of-the-art, high performance, solid-state recorder designed for the severe environments of flight test applications. This agreement allows L-3 to further penetrate the market for this product. -- The receipt of a contract from the FAA for up to 60 eXaminer 3DX(TM) 6000 Explosive Detection Systems (EDS (Electronic Data Systems, Plano, TX, www.eds.com) Founded in 1962 by H. Ross Perot (independent candidate for the President of the U.S. in 1992), EDS is the largest outsourcing and data processing services organization in the country. ). The contract, which provides for initial funding of $9.2 million and has a potential value of $89 million, also includes development funds to add enhanced features and capabilities. The FAA also awarded the company a contract to develop the ARGUS Argus (är`gəs) or Argos (är`gŏs, –gəs), in Greek mythology. 1 Many-eyed monster, also called Panoptes. He guarded Io after she had been changed into a heifer. Explosive Detection Explosive detection is a non-destructive inspection process to determine whether a container contains explosive material. Explosive detection is commonly used at airports, ports and for border control. System, a smaller, lower-cost version of the eXaminer 3DX(TM) 6000. Total development funding could exceed $7 million. The FAA also requested a proposal for 100 ARGUS systems, which has a potential contract value of over $30 million. -- The receipt of a payload (1) Refers to the "actual data" in a packet or file minus all headers attached for transport and minus all descriptive meta-data. In a network packet, headers are appended to the payload for transport and then discarded at their destination. segment development subcontract sub·con·tract n. A contract that assigns some of the obligations of a prior contract to another party. intr. & tr.v. sub·con·tract·ed, sub·con·tract·ing, sub·con·tracts from General Dynamics General Dynamics Corporation (NYSE: GD) is a defense conglomerate formed by mergers and divestitures, and as of 2006 it is the sixth largest defense contractor in the world[1]. The company has changed markedly in the post-Cold War era of defense consolidation. Information Systems to provide a communications payload for the FAISAT(TM) global wireless data system developed by Final Analysis. In addition, L-3 will make a small equity investment in Final Analysis. The agreement allows the company to participate in the expanding market for broadband data over satellite. For the six-month period ended June 30, 2000, sales totaled $838.1 million, an increase of 42.1% over sales of $590.0 million in the six-month period ended June 30, 1999. Operating income for the first half of 2000 increased 47.3% to $84.4 million compared with operating income of $57.3 million in the year ago period. As a percentage of sales, operating income was 10.1%, versus 9.7% for the same period a year ago. Earnings before interest, taxes, depreciation and amortization (EBITDA) for the 2000 six-month period rose 41.6% to $118.5 million, compared with $83.7 million in the same period last year. Net income in the first half of 2000 rose 49.7% to $27.4 million compared to $18.3 million in the first six months of 1999. Diluted earnings per share for the six-month period rose 41.1% to $0.79 per diluted share, compared with $0.56 per diluted share for the same period in 1999. Included in the company's six month results were net gains of $1.2 million, net of taxes, or $0.03 per diluted share, consisting of after-tax gains of $8.8 million on the sale of two businesses, offset by certain charges. Free cash flow for the six-month period amounted to $30 million. Mr. Lanza concluded, "As we enter the seasonally stronger second half of 2000, we remain confident of our continued strong performance, supported by excellent momentum, solid bookings, good performance across the board, some promising contract opportunities and an attractive acquisition landscape." The $480.5 million in second quarter bookings included the following notable contract awards: Secure Communication Systems booked approximately $200.1 million in funded orders. Key bookings included awards for the company's core data link programs for the U-2, CHBDL CHBDL Common High Bandwidth Data Link S/T S/T Such That S/T Self-Titled (also seen as ST) S/T Short Ton(s) , LAMPS, and Hawklink programs, as well as follow-on funding for Secure Terminal Equipment, various signal intelligence programs and additional funding for communication systems on the International Space Station. Noteworthy Simulation and Training business booked in the quarter included concurrency Operations that are performed simultaneously within the computer. For example, dual-core CPUs provide complete overlapping of two independent processes. See dual core, hyperthreading, multiprocessing, multitasking, multithreading, SMP and MPP. concurrency - multitasking upgrades to B-2 Maintenance Trainers and various upgrades for the F-117 Weapon Systems Trainer. Lastly, L-3's Security Systems division concluded negotiations and booked initial production orders with the FAA on a three year contract for its eXaminer 3DX(TM) 6000 Explosive Detection System. Specialized Communication Products booked approximately $280.4 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 from US and international customers. Microwave components posted another strong quarter in orders performance led by products for base station applications for customers ranging from original equipment manufacturers to service providers. 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 and Space products included awards for initial funding for the previously mentioned FAISAT program and various awards for FTSAT FTSAT Flyaway Triband Satellite Terminal , the company's portable, tri-band satellite terminal. Other bookings of importance in L-3's Specialized Communication Products include: A contract to provide the shipboard ship·board n. 1. The condition of being aboard a ship: on shipboard. 2. Archaic The side of a ship. adj. workstations for the Virtual Imaging System for Approach and Landing (VISUAL). VISUAL is a major system upgrade to the Aircraft Recovery Monitoring and Display Systems aboard US Navy aircraft carriers and amphibious am·phib·i·ous adj. 1. Biology Living or able to live both on land and in water. 2. Able to operate both on land and in water: amphibious tanks. 3. assault ships. L-3 booked a follow-on order for rotodome antennas for the E-2C E-2C Hawkeye; Navy Airborne Warning and Control System Aircraft aircraft under a multi-year contract. Also, the quarter showed continued strong interest from Internet Service Providers for L-3's static transfer switches. In addition, the company was awarded a multi-year contract for the Position Navigator unit for the Multiple Launch Rocket system and received additional funding for the Redundant Inertial Flight Control Assembly (RIFCA RIFCA Redundant Inertial Flight Control Assembly ), used as part of the guidance system for the Boeing Delta Series rockets. In conjunction with this release, L-3 Communications will host a conference call from the Farnborough Air Show The Farnborough International Airshow is a seven-day international trade fair for the aerospace business which is held biennially in England. The airshow is organised by Farnborough International Limited, a wholly owned subsidiary of British aerospace industry's body the Society , which will be simultaneously broadcast live over the Internet. 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, July 25, 2000 at 12:00 p.m. EST. 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 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 communications systems and products, avionics and ocean products, training products, microwave components and telemetry, instrumentation, space and wireless products. Its customers include the Department of Defense, selected US government intelligence agencies, aerospace prime contractors and commercial telecommunications and cellular customers. To learn more about L-3 Communications, please visit the company's web site at www.L-3Com.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, 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.
L-3 COMMUNICATIONS HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share and share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2000 1999 2000 1999
Sales $461.0 $314.4 $838.1 $590.0
Costs and expenses 411.3 283.3 753.7 532.7
Operating income 49.7 31.1 84.4 57.3
Interest and
other income, net 1.7 1.8 2.5 2.8
Interest expense 24.7 14.9 42.3 30.4
Income before income taxes 26.7 18.0 44.6 29.7
Provision for income taxes 10.2 6.9 17.2 11.4
Net income $16.5 $11.1 $27.4 $18.3
Earnings per share:
Basic $0.49 $0.34 $0.83 $0.58
Diluted $0.47 $0.33 $0.79 $0.56
Weighted average common shares outstanding:
Basic 33,270,900 32,488,000 33,158,200 31,495,000
Diluted 34,855,300 33,948,000 34,681,400 32,925,000
L-3 COMMUNICATIONS HOLDINGS, INC.
SELECTED FINANCIAL DATA
(In millions)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2000 1999 2000 1999
EBITDA (a) $68.1 $44.8 $118.5 $83.7
Depreciation
and amortization $18.4 $13.7 $34.1 $26.4
Capital expenditures $8.0 $6.5 $13.4 $11.0
Orders (funded) $480.5 $331.2 $873.2 $607.5
June 30, December 31,
Period end data: 2000 1999
Backlog (funded) $1,268.6 $1,003.7
Cash & cash equivalents $45.2 $42.8
Total debt $1,076.0 $605.0
Shareholders' equity $625.9 $583.2
(a) EBITDA is defined as operating income plus depreciation
and amortization.
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