L-3 Communications Announces Third Quarter 2002 Results.Business Editors NEW YORK--(BUSINESS WIRE)--Oct. 15, 2002 - Third quarter 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 on an adjusted basis reflecting 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. 142 increase 70.4%, 47.6% and 21.6%, 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 results for the third quarter of 2002, reflecting strong growth in sales, operating income, free cash flow and diluted earnings per share compared to the same period last year. For comparative purposes, results for the third quarter of 2001 have been adjusted to reflect the impact of Statement of Financial Accounting Standards (SFAS) No. 142, Accounting for Goodwill and Other Intangible Assets, by adding back $11.1 million to operating income and $0.10 per diluted share for the goodwill amortization expense recorded in the 2001 third quarter. In the 2002 third quarter, the company reported sales of $1,053.6 million, an increase of 70.4% over sales of $618.2 million in the third quarter of 2001. In the third quarter of 2002, operating income increased 47.6% to $127.4 million from $86.3 million, as adjusted, in the third quarter of 2001. As a percentage of sales, operating income in the 2002 third quarter was 12.1% versus 14.0%, as adjusted, in the third quarter of 2001. As expected, this decrease primarily reflects lower margins on commercial aviation and commercial communication products because of declines in sales, as well as lower margins associated with recently acquired businesses. On a sequential basis, operating income as a percentage of sales improved from 10.2% in the second quarter of 2002, in keeping with the company's prior guidance that operating margins would improve on a sequential basis throughout the second half of 2002. Free cash flow for the third quarter of 2002, defined as cash flow from operating activities less net capital expenditures, was approximately $138.0 million, an increase of $96.4 million over free cash flow of $41.6 million in the year-ago period. Free cash flow for the third quarter includes an increase in customer advances of about $75.0 million related to a contract, which the company expects to fully liquidate in the fourth quarter of 2002. 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 third quarter of 2002 increased 45.1% to $61.8 million versus net income of $42.6 million, as adjusted, in the third quarter of 2001. Diluted earnings per share rose 21.6% to $0.62 per diluted share, versus $0.51 per diluted share, as adjusted, for the third quarter of 2001. In the third quarter of 2002, diluted shares outstanding increased approximately 18.2% to 104.5 million from 88.4 million in the 2001 third quarter, principally reflecting the company's public offering of 14.0 million shares of common stock, effective June 28, 2002. Shares outstanding for all periods have been restated to reflect the company's two-for-one stock split on May 20, 2002. The company's balance sheet continues to reflect its financial strength. As of September 30, 2002, the company had $448.2 million in cash, compared to $361.0 million at December 31, 2001. Total debt increased to $1,850.0 million at September 30, 2002 from $1,325.0 million at December 31, 2001. Total debt as a percentage of book capitalization decreased from 51% at December 31, 2001 to 45% at September 30, 2002, reflecting the $1.4 billion of acquisitions completed by the company during the nine months ended September 30, 2002 and the debt and equity offerings of June 2002. Additionally, shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. increased to $2,172.9 million on September 30, 2002, an increase of $959.0 million from $1,213.9 million at December 31, 2001. In the 2002 third quarter, the company's strong bookings growth continued, with funded orders reaching $1,166.7 million, an increase of 86.8% over bookings of $624.6 million in the third quarter of 2001. As of September 30, 2002, funded backlog was $2,884.9 million, an increase of 67.8% over funded backlog of $1,719.3 million at December 31, 2001. "We are very pleased with our performance in the third quarter," said Frank C. Lanza, chairman and chief executive officer of L-3 Communications. "We had excellent results in our Intelligence, Surveillance, Reconnaissance and Communications (ISR&C) businesses, data links and secure communications operations. Other solid performers included training, simulation and support services support services Psychology Non-health care-related ancillary services–eg, transportation, financial aid, support groups, homemaker services, respite services, and other services , military displays and especially our security systems business, with explosive detection systems for airport and cargo security. These business areas more than made up for continued weakness in the commercial aviation and commercial communication product areas." "Increased defense spending this year has fueled good growth for L-3's products, as U.S. military forces continue to modernize and upgrade their existing assets," continued Mr. Lanza. "U.S. defense spending in the 2002-2003 timeframe is up 19%, with the investment account rising from $109 billion to $130 billion, not including supplemental increases. Growth in the defense electronics segment of that budget is over 20%, and this is the area where L-3 has many of its products and services." "One of those key growth areas is ISR&C, as our military forces focus on realizing the potential of network-centric warfare Network-centric warfare (NCW), now commonly called network-centric operations (NCO), is a new military doctrine or theory of war pioneered by the United States Department of Defense. with its real-time sharing of tactical information so that the warfighter can respond immediately with even greater precision and lethality. L-3 is currently developing the architecture and the products that will play a major role in making network-centric warfare a reality for our fighting forces." "Spending on homeland security Noun 1. Homeland Security - the federal department that administers all matters relating to homeland security Department of Homeland Security executive department - a federal department in the executive branch of the government of the United States products has also been a driver for L-3's growth this year and this should continue into the future," said Mr. Lanza. "We expect that, out of the overall spending in this category, there is a $5 billion market for products for use in securing air travel, ports, bridges, tunnels, power facilities and businesses, and in services that will enable cities and states to provide crisis management support in case of terrorist threats. Even if domestic demand for airport security systems declines from the high levels seen in 2002, we expect growth in both the cargo and the international markets for airport security to substantially offset this, and we believe that L-3 has the most advanced and most comprehensive product line for these niche areas." "The businesses that we acquired in 2002 are performing well and according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. plan," said Mr. Lanza. He also noted that L-3 Integrated Systems is also making significant progress in reducing its costs. Recent acquisitions include: - L-3 acquired 100% of the common stock of Technology, Management and Analysis Corporation (TMA), a provider of high quality professional services to the U.S. Department of Defense, primarily in support of the Naval surface and combat fleet. - The company signed a definitive agreement to acquire Wescam Inc., which designs and manufactures systems for defense applications that capture images from mobile platforms for transmission in real time to tactical command centers for interpretation and for commercial broadcast applications to production facilities. - L-3 Communications announced the proposed acquisition of two Northrop Grumman businesses. Electron Devices is a worldwide supplier of microwave power devices to all major prime contractors on key military programs. Displays-Navigation Systems - San Diego is a world leader in ruggedized displays, computers and electronic systems for both military and commercial applications and Shipboard Central Identification Friend or Foe systems. - In August, the company entered into a definitive agreement to acquire Westwood Corporation, a leader in shipboard power control, switchgear and power distribution systems. Westwood provides control switchgear to the United States Navy's LPD-17 and DDG-51 vessels as well as portable power generators to the Army's Communications-Electronics Command organization and products to the U.S. Air Force and Coast Guard. - Also in August, L-3 acquired ComCept, Inc., a leader in network-centric warfare (NCW) capabilities. ComCept has key contracts in NCW, Information Operations, Electronic Warfare and Specific Emitter ID. Mr. Lanza cited a number of key contract wins and milestones for L-3 during the third quarter: - L-3 was selected as the provider of Tactical Common Data Link (TCDL TCDL Tactical Common Data Link (US DoD Joint) ) technology by the Army's Aviation Applied Technology Directorate (AATD AATD Aviation Applied Technology Directorate AATD Alpha-1 Antitrypsin Deficiency AATD Advanced Aviation Training Device AATD Army Advanced Technology Demonstration AATD Adapted Alternating Treatments Design AATD Automated Articulation Testing Device ) for their Hunter Standoff Killer Team (HSKT HSKT Hunter Standoff Killer Team (Unmanned Aerial Vehicle) ) Advanced Concept Technology Demonstration (ACTD ACTD Advanced Concept Technology Demonstration/Demonstrator (US DoD) ACTD A Call to Duty (Star Trek) ACTD Advanced Concept Technical Demonstration ACTD Australian Conference of TAFE Directors ). - Two contracts were awarded totaling up to $40 million 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. for the Joint Strike Fighter A strike fighter is a fighter aircraft which is also capable of attacking surface targets, including ships. It differs from an attack aircraft in that the aircraft remains a capable fighter. (JSF (JavaServerFaces) A standard framework of components for building rich user interfaces for Java applications. JavaServer Faces run on the server, but are displayed on the client. JSF - JavaServer Faces ) program. Under these awards, L-3 will provide engineering analysis and studies support as well as Type 1 Cryptographic-based security, key management and data for classified hardware and software. - The company has been selected as a member of the Boeing Integrated Defense Systems-led team for a transformational Department of Defense initiative known as the Family of Advanced Beyond Line-of-Sight Terminals (FAB-T FAB-T Family of Advanced Beyond-Line-of-Sight Terminals ). The team will design and develop the first increment of wideband satellite communication terminals that will provide the military with critical protected communications. - L-3 received additional funds for the conversion of a TC-135 aircraft to a RC-135 configuration, as part of a contract awarded in the first quarter that increases the Rivet Joint a joint between two or more pieces secured by rivets. See also: Rivet fleet to 17 aircraft. The company also received bookings on other continuing ISR (Interrupt Service Routine) Software routine that is executed in response to an interrupt. platform programs, including the EP-3 and Compass Call. - L-3 Communications' Link Simulation & Training division was awarded a $15.3 million contract to build and deliver two F-16 Block 40L unit training devices for the Egyptian Air Force The Egyptian Air Force, or EAF (Arabic: القوات الجوية المصرية, . - L-3 received key production contracts from Lockheed Martin and South Korea's Hyop Chin Industries to begin the processes relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the manufacture of fuze fuze n. & v. Variant of fuse1. Noun 1. fuze - any igniter that is used to initiate the burning of a propellant fuse, primer, priming, fuzee, fusee products in South Korea. - Boeing awarded L-3 a contract to provide high-resolution displays for AH-64 Apache helicopter simulators. Follow-on orders are expected over the next few years. Additionally, L-3 will provide a variety of spares for C-130J display systems, the Color Multi-function Display Unit (CMDU CMDU Core Multi-Drive Unit (Nortel) CMDU Color Multipurpose Display Unit (cockpit display on KC-130J aircraft) ), the Avionics Management Unit (AMU amu atomic mass unit. amu abbr. atomic mass unit ), the Communication, Navigation, Breaker Panel (CNBP) and the Multi-Function Control Display (MFCD MFCD Multi-Function Colour Display (F-15 cockpit display) MFCD Muslim Foundation for Cultural Development ). - L-3 received orders for its new Terrain and Traffic Collision Avoidance System (T2CAS T2CAS Terrain and Traffic Collision Avoidance System (avionics) (TM)) products from Federal Express, the U.S. Customs Service, as well as Northwest Airlines, Virgin Express and Aeromexico. - L-3 received two awards in the third quarter aggregating $193.0 million from the Transportation Security Administration (TSA TSA See tax-sheltered annuity (TSA). ), which fully funds the 425 eXaminer 3DXTM 6000 explosive detection systems. These awards bring the total contract value to approximately $355 million. The company also received an award from the Canadian Air Transport Security Authority The Canadian Air Transport Security Authority (CATSA) (French:Administration canadienne de la sûreté du transport aérien, or ACSTA) is a Canadian Crown corporation responsible for the security of air traffic within Canada. (CATSA CATSA Canadian Air Transport Security Authority ) for its Level 1 automatic 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. ) for in-line, automated baggage screening, as well as international awards from Ireland, Italy and Austria. - For port and cargo security, L-3 also shipped the first CX-450M (450kV) mobile vehicle inspection system acquired through a $500 million Blanket Purchase Agreement received from the U.S. Army in May 2002. This agreement includes delivery and deployment of a number of L-3's cargo products and includes operator training, routine and preventative maintenance as well as parts and labor warranty protection. Additionally L-3 will deliver the first CX-2500M mobile inspection system to Dutch Customs to be deployed at the Port of Rotterdam later this month. - The Air Force selected L-3 to supply two separating MBRV-3 air launch targets in support of the Arrow missile The Arrow "Interceptor" (Hebrew: טיל חץ, Til hetz) is a theater missile defense (TMD) system; it is the first missile developed by Israel that was specifically designed and interceptor program. - The company received key bookings for its Portable Flyaway fly·a·way adj. 1. Made or worn loose or draped, as to allow or suggest fluttering in the wind: a flyaway coat; long, flyaway hair. 2. a. Tri-Band Satellite Terminal (FTSAT FTSAT Flyaway Triband Satellite Terminal ) product, Single Hub Terminal version of the FTSAT in transit cases and the Quad Band Dual Hub Satellite Terminal / High Mobility Multi-purpose Wheeled Vehicle Noun 1. wheeled vehicle - a vehicle that moves on wheels and usually has a container for transporting things or people; "the oldest known wheeled vehicles were found in Sumer and Syria and date from around 3500 BC" axle - a shaft on which a wheel rotates system. - Key orders for the Hardened Voyage Recorder from maritime organizations including Consilium, Marubeni and Samsung. - A contract from the Coast Guard for L-3's combination flight data and cockpit voice recorders as part of the Falcon upgrade initiative. "As we head into the home stretch for 2002, we believe we are well positioned to achieve a good, strong year of growth, both top and bottom line. We expect defense spending to continue to be solid, and our focus will always be on program performance, strong financial controls and a plan to fold in niche acquisitions that complement our existing product base." "The pipeline for acquisition opportunities continues to be robust. There may be larger assets that major defense companies wish to divest because they are not core to their operations. There is also a large number of small, public or privately held companies privately held company A firm whose shares are held within a relatively small circle of owners and are not traded publicly. in the range of $50 million to $300 million in revenue that need the marketing support, R&D funding and financial management that L-3 can provide in order to grow. The DoD recognizes the value of consolidating the vendor base to preserve and invigorate in·vig·or·ate tr.v. in·vig·or·at·ed, in·vig·or·at·ing, in·vig·or·ates To impart vigor, strength, or vitality to; animate: "A few whiffs of the raw, strong scent of phlox invigorated her" one of the strengths of the defense industry. Small companies have been the source of much innovation in the industry, and L-3 can help preserve this continuity." The $1,166.7 million in third quarter bookings included the following notable contract awards: - Secure Communications and ISR booked approximately $326.5 million in funded orders. Key orders included follow-on funding for the company's core Data Link Air Force Surveillance Programs including U-2, Global Hawk, Predator and various special projects, and additional funding for the Army's Ground Mobile Forces contract along with Space Lift Range Systems (SLRS SLRS Space Lift Range System SLRS Seismic-Load-Resisting System (structures) SLRS Space Launch Range System SLRS Suse Linux Retail Solution ), Mission Director Support (MDS MDS, n See temporomandibular pain-dysfunction syndrome. MDS 1 Maternal deprivation syndrome, see there 2 Myelodysplastic syndrome, see there ) and the Satellite Control Network Contract (SCNC SCNC Southern Cameroons National Council SCNC Studio City Neighborhood Council (Studio City, CA) SCNC Satellite Control Network Contract (Air Force Space Command contract) ). The company was also selected to design and develop the Family of Advanced Beyond Line-Of-Sight Terminals (FAB-T). The company also received the balance of funding for the seventeenth Rivet Joint aircraft and a key win to provide upgrades for the EC-130 Compass Call information operations Actions taken to affect adversary information and information systems while defending one's own information and information systems. Also called IO. See also defensive information operations; information; offensive information operations; operation. / electronics warfare aircraft. The company's Secure Terminal Equipment (STE STE Saint (French) STE Suite (US Postal Service) STE Societe (French: Society) STE Spanning Tree Explorer STE Software Test Engineer ) in the quarter reflected increasing demand along with key wins to provide a Protocol Encryption product and various classified encryption programs. Also, additional funding was received on the Advanced EHF EHF abbr. extremely high frequency Noun 1. EHF - 30 to 300 gigahertz extremely high frequency radio frequency - an electromagnetic wave frequency between audio and infrared Comsec / Transec Systems (ACTS) Program. - Training, Simulation and Support Services booked approximately $210.0 million in funded awards. Among the noteworthy awards were Force Protection and Installation Security contracts in Korea, a contract to provide upgrades to the U.S. Marine Corps AV-8B Manufacturing Training Devices, a chemical demilitarization de·mil·i·ta·rize tr.v. de·mil·i·ta·rized, de·mil·i·ta·riz·ing, de·mil·i·ta·riz·es 1. To eliminate the military character of. 2. contract for the Aberdeen Proving Ground Aberdeen Proving Ground (APG) is a United States Army facility located near Aberdeen, Maryland (in Harford County). The Army's oldest active proving ground, it was established on October 20, 1917, six months after the United States entered World War I. , a contract for expansion of the Force Modernization for Bulgaria, a contract for maneuver and live fire exercises in Kuwait, a contract for technical support for the Aerial Common Sensor Program and a contract to supply the Air Force a MBRV-3 Air Launch Target in support of the Arrow Missile Interceptor Program. Additional follow-on funding for Support of NORAD NORAD abbr. North American Aerospace (formerly Air) Defense Command , along with a contract for communication planning Communication planning is the art and science of reaching target audiences using marketing communication channels such as advertising, PR, experiences or direct mail for example. It is concerned with deciding who to target, when, with what message and how. for the Northern Command and various classified customers contracts were also received. - Aviation Products and Aircraft Modernization booked approximately $165.7 million in funded orders. A key win was received for the conversion of Special Mission EP-3 from the P-3C Aircraft to the EP-3 configuration. Also received, were contracts for displays for various platforms including AH-64 Apache Helicopter, the C-130J, the C-130H and the U-2. The U.S. Customs Service is the company's launch customer for the unique Terrain and Traffic Collision Avoidance System The Traffic alert and Collision Avoidance System (or TCAS) is a computerised avionics device which is designed to reduce the danger of mid-air collisions between aircraft. (T2CAS(TM)) and additional orders from commercial carriers were received from Virgin Express and Aeromexico. Alaska Airlines selected the company's 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 2000 Product for the next generation 737 aircraft. Continued strong interest in the company's improved Voyage Recorder was received, key customers included Consilium, Marubeni and Samsung. Aviation related recorders received orders from the U.S. Coast Guard for Falcon Jets and C-12 Platforms, and additional orders for various commercial carriers. - Specialized Products booked approximately $464.5 million in funded orders. The company received additional funding from the Transportation Security Administration (TSA) for the Examiner 3DXTM6000 Explosive Detection System (EDS) and an order from the Canadian Air Transport Authority (CATSA) to improve Level 1 automatic EDS for inline, automated baggage screening. Also received were orders to design, build and deliver F-16 Block 40L Training Devices to the Egyptian Air Force and a contract from the U.S. Navy to build a P-3C Partial Aircrew Coordination Trainer (PACT) for intelligence gathering crews. The company's portable Flyaway Tri-Band Satellite Terminals (FTSAT) recorded various contracts and continued to gain high interest. In addition, the company expanded the product offering with the receipt of a contract to provide a Quad Band Quad band (also known as quad-band or quadband) literally means four bands. Most people come across the term when it is used to describe a mobile phone supporting four frequency bands. Dual Hub Satellite Terminal / High Mobility Multi-Purpose Wheeled Vehicle System. Ocean Products received follow-on orders for the product offerings of TB-23 and TB-29 Towed Arrays, along with additional international Towed Array orders. Also received were various awards to supply 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. hardware for various missile programs and for the Pacific Range for the Trident D-5, along with an order to provide space transponders and transmitters in support of a classified satellite program. Additional funding was received on the CSEL CSEL Cable Select (IDE hard drive jumper setting) CSEL Combat Survivor Evader Locator CSEL Command Senior Enlisted Leader CSEL circuit switch select line (US DoD) CSEL Consolidated Support Equipment List and G-BRAT Programs to supply a SAASM-based receiver, along with an award to provide switch gear for the LHD-8 platform. In the first nine months of 2002, sales increased 64.8% to $2,705.6 million from $1,641.6 million in the first nine months of 2001. Operating income for the 2002 nine-month period increased 38.4% to $296.4 million versus operating income of $214.1 million, as adjusted, in the nine-month period ended September 30, 2001. As a percentage of sales, operating income in the nine-month period ended September 30, 2002 was 11.0%, compared with 13.0%, as adjusted, in the year ago period. Operating income for the 2002 nine-month period includes a charge of $3.0 million for the settlement in June 2002 of certain litigations assumed in an acquisition, and a foreign currency-related net loss of $1.8 million. Results for the first nine months of 2001 have been adjusted for SFAS No. 142 to add back $31.6 million to operating income, and $0.33 per diluted share, for the goodwill amortization expenses recorded in the first nine months of 2001. For the 2002 nine-month period, net income totaled $122.7 million, an increase of 27.9% over net income of $95.9 million, as adjusted, in the same period last year. Diluted earnings per share for the nine-month period rose 9.6% to $1.37 per diluted share, versus $1.25 per diluted share, as adjusted, in the year ago period. The company's results for the 2002 nine-month period include an extraordinary loss of $9.9 million, or $0.11 per diluted share, net of taxes, related to the early extinguishment of debt in the second quarter of 2002, as previously announced. The company's results for the year-ago period include a net after-tax gain Net after-tax gain Capital gain after income taxes have been paid. of $0.4 million, or $0.01 per diluted share, comprised of an after-tax gain of $4.3 million on the sale of a 30% interest in the company's Aviation Communications and Surveillance Systems (ACSS ACSS Africa Center for Strategic Studies ACSS Aluminum Conductor Steel Supported (cable) ACSS African Crop Science Society ACSS Association of Computer Support Specialists ACSS Aviation Communication and Surveillance Systems ) business to Thales Avionics, which was largely offset by a $3.9 million after-tax write-down 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 an investment. In the 2002 nine-month period, diluted shares outstanding increased approximately 23.5% to 95.0 million from 76.9 million in the first nine months of 2001, principally reflecting the dilutive effect Dilutive effect Result of a transaction that decreases earnings per common share (EPS). of the company's convertible notes, the company's public offering of 14.0 million shares of common stock, effective June 28, 2002, and the company's sale of 9.2 million shares of common stock, effective May 2, 2001. Shares outstanding for all periods have been restated to reflect the company's two-for-one stock split on May 20, 2002. Free cash flow for the 2002 nine-month period was approximately $227.0 million compared to $54.0 million a year ago. EBITDA for the first nine months of 2002 was $350.6 million compared with $247.5 million in the same period last year, an increase of 41.7%. In conjunction with this release, L-3 Communications will host a conference call, 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 today, Tuesday, October 15, 2002, at 2:00 p.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT . Listeners may access the conference call live over the Internet at the following location: http://www.firstcallevents.com/service/ajwz366349780gf12.html. Please allow fifteen minutes prior to the call to visit either of these sites to download and install any necessary audio software. The archived version of the call may be accessed at this site beginning approximately two hours after the call ends through Tuesday, October 22, 2002 at 11:59 PM EDT. 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 Intelligence, Surveillance and Reconnaissance Intelligence, Surveillance and Reconnaissance may refer to:
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. 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 data)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------------------------------------
2001 2001 2001 2001
Report- Adjust- Adjusted
2002 ed ed(a) 2002 Reported (a)
-------------------------------------------------------
Sales $1,053.6 $618.2 $618.2 $2,705.6 $1,641.6 $1,641.6
Costs and
expenses 926.2 543.0 531.9 2,409.2 1,459.1 1,427.5
-------------------------------------------------------
Operating
income 127.4 75.2 86.3 296.4 182.5 214.1
Interest
and other
income
(expense) 1.6 (0.2) (0.2) 2.5 1.3 1.3
Interest
expense 31.2 18.4 18.4 88.9 64.8 64.8
Minority
interest
expense 2.3 2.4 2.8 5.1 4.0 4.5
-------------------------------------------------------
Income before
income taxes
and extraord-
inary items 95.5 54.2 64.9 204.9 115.0 146.1
Provision for
income taxes 33.7 20.8 22.3 72.3 44.1 50.2
-------------------------------------------------------
Income before
extraordinary
items 61.8 33.4 42.6 132.6 70.9 95.9
Extraordinary
item - loss on
extinguishment
of debt, net of
income taxes of
$6.3 - - - (9.9) - -
-------------------------------------------------------
Net income $61.8 $33.4 $42.6 $122.7 $70.9 $95.9
=======================================================
Earnings per share
before
extraordinary item:
------------------------
Basic $0.66 $0.43 $0.55 $1.57 $0.96 $1.30
=======================================================
Diluted $0.62 $0.41 $0.51 $1.48 $0.92 $1.25
=======================================================
Earnings per share:
------------------------
Basic $0.66 $0.43 $0.55 $1.45 $0.96 $1.30
=======================================================
Diluted $0.62 $0.41 $0.51 $1.37 $0.92 $1.25
=======================================================
Weighted average common
shares outstanding:
------------------------
Basic 94.2 78.1 78.1 84.4 73.7 73.7
=======================================================
Diluted 104.5 88.4 88.4 95.0 76.9 76.9
=======================================================
(a)Represents three and nine months ended September 30, 2001
results adjusted to exclude goodwill amortization expense on a
SFAS 142 basis.
L-3 COMMUNICATIONS HOLDINGS, INC.
SELECTED FINANCIAL DATA
(In millions)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
-----------------------------------------------------
2001 2001 2001 2001
Adjusted Adjusted
2002 Reported (a) 2002 Reported (a)
-----------------------------------------------------
EBITDA (b) $147.2 $97.6 $97.6 $350.6 $247.5 $247.5
Depreciation and
amortization $19.8 $22.4 $11.3 $54.2 $65.0 $33.4
Capital
expenditures $14.5 $9.5 $9.5 $38.6 $30.0 $30.0
Orders (funded) $1,166.7 $624.6 $624.6 $3,027.2 $1,704.2 $1,704.2
Reportable Segment
Operating Data:
-----------------
Sales:
Secure
Communications
& ISR $274.9 $136.4 $136.4 $710.5 $308.0 $308.0
Training,
Simulation &
Support Svs. 198.6 157.6 157.6 590.6 426.3 426.3
Aviation Pdts.
& Aircraft
Modernization 241.3 57.1 57.1 552.1 188.5 188.5
Specialized
Products 338.8 267.1 267.1 852.4 718.8 718.8
-----------------------------------------------------
Total $1,053.6 $618.2 $618.2 $2,705.6 $1,641.6 $1,641.6
=====================================================
Operating income:
Secure
Communications
& ISR $30.3 $8.2 $9.2 $76.4 $19.3 $22.2
Training,
Simulation &
Support Svs. 26.5 19.3 21.3 70.3 47.9 52.9
Aviation Pdts.
& Aircraft
Modernization 34.0 21.2 23.2 83.7 68.7 74.6
Specialized
Products 36.6 26.5 32.6 66.0 46.6 64.4
-----------------------------------------------------
Total $127.4 $75.2 $86.3 $296.4 $182.5 $214.1
=====================================================
September 30, December 31,
Period end data: 2002 2001
---------------- --------- ---------
Backlog (funded) $2,884.9 $1,719.3
Cash & cash equivalents $448.2 $361.0
Total debt $1,850.0 $1,325.0
Shareholders' equity $2,172.9 $1,213.9
(a)Represents three and nine months ended September 30, 2001
results adjusted to exclude goodwill amortization expense on a
SFAS 142 basis.
(b)EBITDA represents earnings before interest, taxes, depreciation
and amortization and is defined as operating income plus
depreciation and amortization expenses.
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