Loral second quarter earnings rise 24 percent; Earnings per share reach 47 cents after 2-for-1 split.NEW YORK--(BUSINESS WIRE)--Oct. 19, 1995--Loral Corporation (NYSE NYSE See: New York Stock Exchange :LOR LOR Letter Of Reprimand (military) LoR Lord of the Rings (J.R.R. Tolkien) LOR Learning Object Repository LOR Linux.Org. ) today reported that earnings for the second quarter ended September 30, 1995, rose 24 percent to a record $82.1 million, compared with $66.3 million earned in the same period last year. Earnings per share for the quarter increased 21 percent to 47 cents, compared with 39 cents in the comparable period last year. Net income increased 38 percent, and earnings per share rose 34 percent over the prior year, excluding a non-recurring gain of $6.9 million, or 4 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. . Operating margins reached 10.7 percent, compared with 9.1 percent for the prior year's quarter, reinforcing the expected increase in margins to over 11 percent for the year. Results for the quarter reflect a $4.6 million after-tax expense, or 3 cents per share, for Loral's investment in the development of the Globalstar satellite telecommunications system, compared with $2.7 million, or 2 cents per share, for the prior year. Per share results for all periods reflect the two-for-one stock split distributed on September 29, 1995, and were based on 175.2 million weighted average shares outstanding, compared with 170.3 million shares for the prior-year quarter. Sales for this year's second quarter were $1.60 billion, compared with $1.35 billion in the second quarter last year. Bookings were $1.40 billion, compared with $1.21 billion in the same period a year ago. Backlog at September 30, 1995, was $7.01 billion, compared with $6.27 billion at September 30, 1994. Free cash flow after capital expenditures and before dividends was $143 million for the second quarter of fiscal 1996 and $305 million for the first half. 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. at the end of the period was $1.86 billion and cash totaled $111 million. Debt net of cash, as of September 30, 1995, was $1.72 billion, a reduction of $119 million during the quarter. Net income for the six months ended September 30, 1995, increased 25 percent to $151.3 million, or 87 cents per share, compared with $121.2 million, or 71 cents per share, for the comparable period last year. Excluding the non-recurring gain in the prior year, earnings and earnings per share increased by 32 percent and 30 percent, respectively. Sales for the six months ended September 30, 1995, were $3.11 billion, compared with $2.69 billion in the first half of fiscal year 1995. Bookings were $2.76 billion, compared with $2.41 billion for the prior year's first half. The contribution of Unisys to this year's sales was $398 million, $468 million in bookings and 4 cents to earnings per share. "Loral had a super quarter," said Bernard L. Schwartz Bernard Leon Schwartz (born December 12,1926, Brooklyn, New York) was the Chairman of the Board and CEO of Loral Space & Communications, Chairman and CEO of K&F Industries, Inc., Chairman and CEO of Loral Corp., and president and CEO of Globalstar. , chairman and chief executive officer. "Once again we exceeded our earnings target, and our margin performance was particularly satisfying. We expect the full year to be another outstanding one for Loral, with earnings rising about 20 percent, without the benefits of any further acquisitions." Strong Bookings and New Program Wins in C3I/Space Among important developments in the quarter, Loral extended its position as the original developer of the Global Positioning System's (GPS) operational control segment with a $2.5 million initial booking for a five-year contract valued at up to $400 million to upgrade the U.S. Air Force's GPS command and control system. Loral will replace mainframe processors with powerful workstations and open system design. Also in the space area of command, control, communications and intelligence (C3I C3I Command, Control, Communications & Intelligence (US DoD) C3I Computer Controlled Coil Ignition C3I Command, Control, and Communications Interoperability C3I Command Control Communications and Intelligence ), Loral booked the first $8 million of a program with $150 million potential to provide software and engineering support services support services Psychology Non-health care-related ancillary services–eg, transportation, financial aid, support groups, homemaker services, respite services, and other services to the fixed and mobile ground systems that process early warning data from surveillance satellites. The Defense Support Program (DSP (1) (Digital Signal Processor) A special-purpose CPU used for digital signal processing applications (see definition #2 below). It provides ultra-fast instruction sequences, such as shift and add, and multiply and add, which are commonly used in math-intensive ) Software Engineering Support (DSES DSES Deployable Sensor Entity Server (ITT) DSES Draft Supplemental Environmental Statement ) contract consolidates seven original U.S. Air Force contracts, of which Loral had four. Loral booked about $60 million on various programs of continuing support to NASA NASA: see National Aeronautics and Space Administration. NASA in full National Aeronautics and Space Administration Independent U.S. , including activities for the Space Shuttle and Space Station programs, Systems Engineering and Analysis Support (SEAS) at Goddard Space Flight Center The Goddard Space Flight Center (GSFC) is a major NASA space research laboratory established on May 1, 1959 as NASA's first space flight center. GSFC employs approximately 10,000 civil servants and contractors, and is located approximately 6.5 miles northeast of Washington, D.C. , and NASA's new Mission Control Center (MCC (The Microelectronics and Computer Technology Corporation, Austin, TX) The first high-tech research and development consortium in the U.S., created in 1982 by leading companies within the electronics industry. ) at Johnson Space Center. The new Loral-developed MCC, which went on-line with the July 13, 1995, Space Shuttle flight, replaces one that has been in service since the Gemini era in the mid-1960s. Anti-Armor Application for Loral's Deep-Strike ATACMS ATACMS Army Tactical Missile System ATACMS Army Tactical Cruise Missile System ATACMS Army Tactical Advanced Conventional Munitions System (US Army) In tactical weapons, Loral received an initial award on a potentially significant contract to modify the Army Tactical Missile System (ATACMS) to carry the Brilliant Anti-Armor Technology (BAT) submunition Any munition that, to perform its task, separates from a parent munition. . BATs use acoustic and IR sensors to detect and destroy enemy armored vehicles. ATACMS BAT is one example of how Loral is applying advanced technology to improve the precision and effectiveness of the military's current tactical weapons. Another development, occurring after the close of the quarter, will employ Loral's advanced processors to upgrade general-purpose 1,000- and 2,000- pound bombs into precision weapons. The Joint Direct Attack Munition Noun 1. Joint Direct Attack Munition - a pinpoint bomb guidance device that can be strapped to a gravity bomb thus converting dumb bombs into smart bombs JDAM (JDAM Noun 1. JDAM - a pinpoint bomb guidance device that can be strapped to a gravity bomb thus converting dumb bombs into smart bombs Joint Direct Attack Munition ) program, recently awarded competitively to McDonnell Douglas Aerospace, has Loral as a principal subcontractor, responsible for the JDAM mission computer and for the major airborne test telemetry systems. The Air Force and Navy plan to purchase up to 74,000 of the tailfin conversion kits, representing a program potential of more than $160 million to Loral, with foreign sales opportunities adding even more upside potential Upside potential The amount by which analysts or investors expect the price of a security may increase. upside potential The potential price or gain that may be expected in a security or in a security average, generally stated as the dollar . Loral's Multiple Launch Rocket System (MLRS MLRS Multiple Launch Rocket System (US DoD) MLRS Multiple Launcher Rocket System MLRS Marine Corps Long-Range Study (US DoD) ) received $53 million of a $103 million FMS FMS - Flexible Manufacturing System (factory automation). contract award to produce 42 MLRS launchers and more than 1,500 tactical rockets for Israel. This is further indication of the high foreign sales potential of MLRS. In electronic combat, a government fiscal 1996 production award totaling $70 million for 31 NITE nite n. Informal Night. Hawk FLIR FLIR Forward-Looking Infrared (Radar) FLIR Forward Looking Infrared Radiometer FLIR Forward Looking Infrared Radar FLIR Forward Looking Infra Red targeting pods was awarded to Loral for the newest configuration F/A-18 targeting FLIRs. Another production contract, this one from Canada, calls for Loral to equip that country's CC-130 tactical transport planes with the ALR-56M radar warning receiver “RWR” redirects here. For other uses, see RWR (disambiguation). Typically fitted to military aircraft, radar warning receivers (RWR) detect the radio emissions of radar systems, whether ground-based or on-board other aircraft. , the first installation in a transport aircraft and the first direct commercial sale of the ALR-56M. In simulation and training, Loral replenished its training and technical services program base during the quarter with contracts for five programs with a combined value of approximately $135 million. Included are training range support and maintenance programs, advanced aviation flight simulator training and technical support services. A significant win with a high potential, after the close of the quarter, was a program to integrate the Tomahawk tomahawk [from an Algonquian dialect of Virginia], hatchet generally used by Native North Americans as a hand weapon and as a missile. The earliest tomahawks were made of stone, with one edge or two edges sharpened (sometimes the stone was globe shaped). cruise missile onto the U.K. Royal Navy's submarines. New Developments in Systems Integration The company's non-DOD systems integration business turned in a strong bookings performance of more than $248 million in the second quarter, with air traffic control contributing in excess of $100 million of that total. Extending the original contract task for the FAA, Loral booked $28 million for the Automated Radar Terminal Systems (ARTS) and booked $10 million on a program to replace the aging hardware at five enroute centers. In September 1995, Loral established an important new relationship by inaugurating a new joint venture with China National Huayun Technology Development Corporation. The new company will develop and produce the China Next-Generation Weather Radar (CINRAD), an advanced Doppler weather radar system with equivalent performance to the U.S. NEXRAD NEXRAD Next Generation Weather Radar . The company also booked $32 million for its Sustaining Base Information Services See Information Systems. (SBIS SBIS Sociedade Brasileira de Informática em Saúde SBIS Sustainable Building Information System SBIS Sustaining-Base Information Services SBIS Sustaining Base Information System SBIS Swath Bathymetric and Imaging System ) program to revamp the U.S. Army's information systems infrastructure. Space Systems/Loral Space Systems/Loral (SS/L SS/L Space Systems/Loral (Palo Alto, CA) SS/L Space Station/Loral ), whose results are not consolidated with those of Loral, had bookings of $160 million during the second quarter, compared with $225 million in the prior year. SS/L reported second quarter sales of $318 million, compared with $147 million in the earlier year. For the six months ended September 30, 1995, SS/L had $463 million in bookings, compared with $350 million in bookings in the prior six-month period, and $489 million in sales, compared with $304 million in sales in the prior year's first half. Backlog as of September 30, 1995, was $1.14 billion, compared with $807 million as of September 30, 1994. Opportunities in the satellite market are continuing to expand and, accordingly, we expect that bookings for the year will again exceed $1 billion. One example is the recent order to provide a communications payload and other electronic equipment for two Russian-built Yamal communication satellites that will be launched in early 1997. This is believed to be the first commercial procurement of Western satellite equipment by a Russian company and is the first sale of operational flight equipment by SS/L to Russia. In addition, the two companies jointly plan to offer a similar product for export markets. Loral Corporation, 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. , is a high- technology company that primarily concentrates in defense electronics, communications, space and systems integration. -0-
LORAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share amounts)
(Unaudited)
Three Months Six Months
Ended Ended
September 30, September 30,
1995 1994(A) 1995 1994(A)
Sales $1,605.0 $1,345.3 $3,109.1 $2,690.1 Costs and Expenses 1,433.0 1,222.2 2,790.4 2,453.4 Operating Income 172.0 123.1 318.7 236.7 Interest Expense, Net 34.2 14.5 65.2 37.4 Income Before Income Taxes and Equity in Net Loss of 137.8 108.6 253.5 199.3 Affiliates Income Taxes 52.3 41.3 96.3 75.7 Income Before Equity in Net Loss of Affiliates 85.5 67.3 157.2 123.6 Equity in Net Loss of (3.4) (1.0) (5.9) (2.4) Affiliates Net Income $ 82.1 $ 66.3 $ 151.3 $ 121.2 Earnings Per Share (Primary)(1) $ 0.47 $ 0.39 $ 0.87 $ 0.71 Weighted Average Number of Common Shares Outstanding 175.2 170.3 174.5 169.9 (Primary)(1) (1) Reflects 2-for-1 stock split distributed on September 29, 1995. (A) Prior period results include an after-tax, non-recurring gain of $6.9 million, or $.04 per share on a post-split basis. -0-
LORAL CORPORATION AND SUBSIDIARIES
SELECTED FINANCIAL DATA
(In millions)
(Unaudited)
Three Months Six Months
Ended Ended
September 30, September 30,
1995 1994 1995 1994
Free Cash Flow (After Capital $142.8 $119.0 $304.6 $275.0 Expenditures, Before Dividends) Bookings $1,402.1 $1,211.5 $2,761.8 $2,414.0 Backlog at September 30, $7,013.5 $6,271.7 Cash and Cash Equivalents $ 111.1 $ 189.9 Total Debt $1,833.3 $1,559.0 Reduction (Increase) in Net Debt $119.1 $ 99.9 $ (531.3) $ 190.3 Shareholders' Equity $1,859.4 $1,502.8 Space Systems/Loral: Sales $317.8 $ 147.2 $ 489.2 $ 304.2 Bookings $160.1 $ 225.4 $ 462.6 $ 350.0 Backlog at September 30, $1,137.4 $ 806.6 CONTACT: Loral Corp., New York Joanne M. Hvala, 212/697-1105 |
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