Rockwell Collins Reports Second Quarter Fiscal Year 2005 Financial Results; Boosts Full Year Sales and Earnings Per Share Guidance.CEDAR RAPIDS Cedar Rapids, city (1990 pop. 108,751), seat of Linn co., E central Iowa, on the Cedar River; inc. as a city 1856. The second largest city in Iowa, it is named for the surging rapids in the river. , Iowa -- Rockwell Collins Rockwell Collins, Inc. (NYSE: COL) is a large United States-based international company headquartered in Cedar Rapids, Iowa, primarily providing aviation and information technology systems, solutions, and services to governmental agencies and aircraft manufacturers. , Inc. (NYSE NYSESee: New York Stock Exchange :COL): --Quarterly earnings per share improve 33% to 52 cents --Quarterly sales increase 15% to $829 million --Fiscal year 2005 EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. expected in the range of $2.05 to $2.15 --Fiscal year 2005 sales expected in the range of $3.35 billion to $3.40 billion Rockwell Collins, Inc. (NYSE:COL) today reported earnings per share for the second quarter of fiscal year 2005 ended March 31, 2005 of 52 cents, an increase of 13 cents, or 33% from the 39 cents reported last year. Net income was 34% higher at $95 million, an increase of $24 million over last year's second quarter net income. Total segment operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: for the current year second quarter were 18%, a 200 basis point improvement over the 16% reported for the same period a year ago. Sales for the fiscal year 2005 second quarter were $829 million, an increase of $110 million, or 15% from the $719 million reported last year. For the first six months of fiscal year 2005, cash flow from operating activities amounted to $200 million, of which $154 million was generated in the second quarter. This compares to $34 million of cash provided by operating activities for the first six months of fiscal year 2004, which included a $125 million use of cash for voluntary contributions made to the company's qualified pension plans. Clay Jones, Rockwell Collins Chairman, President and Chief Executive Officer said, "Our long-standing commitment to significant investment in new product development, maintaining a sharp focus on the requirements of our customers, and continuous improvement in operational performance have enabled us to once again deliver outstanding across-the-board financial results." Commenting on the company's outlook for the reminder of the current fiscal year, Jones continued, "Industry market conditions remain strong, particularly in the areas in which our diverse portfolio of military and commercial product and service offerings are positioned. Accordingly, we have raised our full year revenue and earnings expectations," concluded Jones, noting that the revised guidance calls for a full year earnings growth rate of 26% on projected revenue growth of 15%, based on the mid points of the new guidance ranges. Following is a discussion of sales and earnings for each business segment. Government Systems Government Systems, which provides aviation electronics, navigation and precision guidance and communications systems In telecommunication, a communications system is a collection of individual communications networks, transmission systems, relay stations, tributary stations, and data terminal equipment (DTE) usually capable of interconnection and interoperation to form an integrated whole. , products and services to the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. government, foreign militaries and manufacturers of military platforms, achieved second quarter sales of $426 million, an increase of $49 million, or 13%, compared to the $377 million reported for the same period last year. Higher sales from programs focused on military modernization modernization Transformation of a society from a rural and agrarian condition to a secular, urban, and industrial one. It is closely linked with industrialization. As societies modernize, the individual becomes increasingly important, gradually replacing the family, contributed to the revenue growth. Sales of defense electronics products and systems increased 21% principally due to higher revenues from electronics systems upgrades for fixed-wing aircraft "Airplane" and "Aeroplane" redirect here. For other uses, see Airplane (disambiguation). A fixed-wing aircraft is a heavier-than-air craft where movement of the wings in relation to the aircraft is not used to generate lift. and U.S. Army, Navy and Special Operations Forces Those Active and Reserve Component forces of the Military Services designated by the Secretary of Defense and specifically organized, trained, and equipped to conduct and support special operations. Also called SOF. helicopters, U. S. Army helicopter simulator programs, Global Positioning System Global Positioning System: see navigation satellite. Global Positioning System (GPS) Precise satellite-based navigation and location system originally developed for U.S. military use. equipment production programs, and 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. systems for maritime production programs. Defense communications sales were unchanged as increased sales of ARC-210 radios were offset by lower revenues related to certain other legacy communications programs Software that manages the transmission of data between computers, typically via modem and the serial port. Such programs were very popular for connecting to BBSs before the Internet took off. , and Joint Tactical Radio System development program revenues were flat. Government Systems' second quarter operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before increased to $76 million from the $69 million reported for the same period a year ago due to the higher sales. The current year second quarter operating margin of 17.8% was slightly lower than last year's 18.3% due to higher incentive compensation costs. Commercial Systems Commercial Systems, which provides aviation electronics systems, products and services to air transport, business and regional aircraft manufacturers and airlines worldwide, achieved second quarter sales of $403 million, an increase of $61 million, or 18%, compared to sales of $342 million reported for the same period last year. Continued strong aftermarket Aftermarket See: Secondary market. aftermarket See secondary market. activity and increasing demand for new business jet and air transport aircraft fueled the revenue growth. Air transport aviation electronics sales increased 11% due to higher retrofit ret·ro·fit v. ret·ro·fit·ted or ret·ro·fit, ret·ro·fit·ting, ret·ro·fits v.tr. 1. To provide (a jet, automobile, computer, or factory, for example) with parts, devices, or equipment not in and service and support activity coupled with increased sales to airlines and original equipment manufacturers (OEMs) in support of higher air transport aircraft production rates. Business and regional aviation electronics sales increased 27% as significantly higher business jet OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and sales and aftermarket revenues, particularly related to retrofit and modification program activities, more than outweighed the impact of anticipated lower sales to regional jet OEMs. Commercial Systems' second quarter operating earnings increased 59% to $73 million, or an operating margin of 18.1%, compared to $46 million, or an operating margin of 13.5% for the same period last year. The combination of the increased sales volume, including higher margin aftermarket revenues, and the continuing impact of cost containment cost containment, n the features of a dental benefits program or of the administration of the program designed to reduce or eliminate certain charges to the plan. and operational efficiency initiatives more than offset higher research and development and incentive compensation costs. Financial Highlights: During the second quarter of fiscal year 2005, the company repurchased 1.7 million shares of its common stock at a total cost of $79 million. On April 15, 2005 the company's Board of Directors authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: the repurchase of $400 million of company common stock; raising the total amount of share repurchases Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. authorized by the company's Board since the inception of the program in December 2001 to $1 billion. The strength of the company's balance sheet and operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. allows the company to utilize this flexible method of providing additional value to shareowners while continuing to execute on its growth strategies. Including this additional authorization, total authorized share repurchases remaining available beyond the end of the second quarter stand at $458 million. Fiscal Year 2005 Outlook Considering the company's strong fiscal year 2005 first half performance, the prevailing strength of our core government and commercial markets, and the acquisition of TELDIX GmbH, the company now anticipates fiscal year 2005 sales to be in the range of $3.35 billion to $3.40 billion; an increase of $75 million to $100 million from our previous sales guidance range. The company also raised its earnings per share guidance range by 5 cents and is now anticipating earnings per share will be in the range of $2.05 to $2.15. Cash provided from operating activities is expected to be between $450 million and $500 million, unchanged from the company's previous guidance. Government Systems revenues are now expected to grow in the range of 15% to 17% (previously 10% to 12%) from fiscal year 2004 and represent approximately 53% of total company sales. Revenues from TELDIX are expected to contribute approximately $45 million, or 3% of the Government Systems revenue growth. Commercial Systems revenues are now anticipated to increase in the range of 13% to 15% (previously 11% to 13%) from fiscal year 2004 and represent about 47% of the total. Government Systems segment operating margin is still projected to approximate 18% for the full 2005 fiscal year, despite the impact of initially lower margin revenues from TELDIX. Commercial Systems segment operating margin is also projected to be approximately 18% for the full year. Business Highlights: Rockwell Collins completes TELDIX acquisition: At the end of the second quarter, Rockwell Collins broadened its European presence by completing the acquisition of Heidelberg, Germany based TELDIX GmbH. With more than 40 years of engineering and manufacturing experience, TELDIX supplies a broad portfolio of complex military aircraft computer products, advanced mechanical space mechanisms and related 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 major prime contractors throughout Europe. TELDIX has leading positions on major European programs such as the Eurofighter Typhoon This article is about a fighter aircraft. For the computer game, see Eurofighter Typhoon (computer game). “EF2000” redirects here. For the computer game, see EF2000 (computer game). , the multi-role combat fighter Tornado tornado, dark, funnel-shaped cloud containing violently rotating air that develops below a heavy cumulonimbus cloud mass and extends toward the earth. The funnel twists about, rises and falls, and where it reaches the earth causes great destruction. , and the NH90 and Tiger helicopters. Data Link Solutions (DLS DLS abbr. Doctor of Library Science ) awarded contract for MIDS MIDS Multifunctional Information Distribution System MIDS Matrix Information and Directory Services (USA) MIDS Multifunction Information Distribution System MIDS Municipal Infrastructure Data Standard JTRS JTRS Joint Tactical Radio System JtRS Just The Right Shoe JTRS Just the Right Size JTRS Johnson Technical Reports Server JTRS Joint Tenancy with Right of Survivorship JTRS Jefferson Township Rescue Squad : DLS, a joint venture company owned by Rockwell Collins and BAE SYSTEMS BAE Systems British manufacturer of aircraft, missiles, avionics, naval vessels, and other aerospace and defense products. BAE Systems was formed (1999) from the merger of British Aerospace (BAe) with Marconi Electronic Systems. , received an $82 million not-to-exceed contract for a product improvement program for the migration of the Multifunctional Information Distribution System (MIDS) to a Joint Tactical Radio System (JTRS) software communications compliant architecture. The improved product, called MIDS JTRS, is scheduled to be completed within 29 months and will represent the next generation of MIDS products. By using software applications for expanded capability, the MIDS JTRS terminal enables enhanced operational effectiveness without consuming additional space, weight or power. Northrop Grumman Northrop Grumman Corporation (NYSE: NOC) is an aerospace and defense conglomerate that is the result of the 1994 purchase of Grumman by Northrop. The company is the third largest defense contractor for the U.S. selects Rockwell Collins for E-8C aircraft avionics upgrade: Rockwell Collins was awarded a $50 million contract to provide avionics upgrades for 18 E-8C Joint STARS aircraft. The upgrades will enable the aircraft to meet Communication, Navigation, Surveillance/Air Traffic Management (CNS/ATM CNS/ATM Communication Navigation Surveillance/Air Traffic Management ) requirements and provides an open system avionics architecture, including Rockwell Collins' new Flight Information Management System implementing electronic flight bag Electronic Flight Bag (EFB) is an electronic information management device that helps flight crews perform flight management tasks more easily and efficiently with less paper. technologies. This new system will provide pilots with maintenance data recorder A data recorder is a piece of equipment which records data, and may also be called a data logger. Examples of data recorders are:
Airlines continue selection of Rockwell Collins avionics equipment: Rockwell Collins was selected by Air Asia, Air Berlin, Air China Cargo Air China Cargo is a cargo airline based in Beijing, China. It is an all-cargo subsidiary of Air China and operates services to 36 cities in 27 countries around the world. Its main base is Beijing Capital International Airport[1]. , Air Sahara, and Hainan Airlines "CHH" redirects here. For the form of dwarfism known as CHH, see cartilage-hair hypoplasia. Hainan Airlines (Chinese: 海南航空公司; Pinyin: Hǎinán Hángkōng Gōngsī to provide avionics equipment on a total of 129 Airbus and Boeing aircraft, with options for provisioning equipment on 95 additional aircraft. Deliveries of equipment are expected to commence this year for each of these airlines. Equipment selections included the company's advanced GLU-920 Multi-Mode Receiver and the fully automatic WRX-2100 MultiScan Weather Radar. These products provide the airlines with enhanced operational efficiency, safety and passenger comfort through reducing pilot work load and increasing pilot situational awareness Situation awareness or situational awareness [1] (SA) is the mental representation and understanding of objects, events, people, system states, interactions, environmental conditions, and other situation-specific factors affecting human performance in . Rockwell Collins' Flight Dynamics Head-Up Guidance System (HGS HGS Human Genome Sciences, Inc. (Rockville, Maryland) HGS Heads Up Guidance System HGS Halifax Grammar School (Halifax, Canada) HGS Hangars HGS Heckmondwike Grammar School (UK) (R)) 4000 selected by All Nippon Airways airways Anatomy The 'pipes'–trachea, bronchi, bronchioles–through which air passes to and from the alveoli. See Small airways. and Southwest Airlines This article is about the American airline. For the former Japanese airline, see Japan Transocean Air. For the British airline, see Air Southwest. Southwest Airlines Co. : The Flight Dynamics HGS(R)-4000 was selected by All Nippon Airways for installation on its fleet of 45 new Boeing 737-700 aircraft with deliveries beginning in late 2005 and by Southwest Airlines for installation on all future deliveries of Boeing 737-700 aircraft. HGS presents critical flight information in the pilot's forward field of view enhancing situational awareness, improving energy management and increasing touchdown precision. New features of the HGS(R)-4000 include runway remaining, tailstrike avoidance and unusual attitude recovery as well as providing a platform for new technologies, such as enhanced vision and surface guidance, which will further improve safety of operations. Rockwell Collins delivers eFlight information management solution to easyJet: Rockwell Collins and easyJet signed an agreement to develop a fleet-wide electronic flight bag (EFB EFB Electronic Flight Bag (aircraft/crew computing device) EFB European Federation of Biotechnology EFB English for Business EFB Esbjerg Forenede Boldklubber (Esbjerg, Denmark soccer club) ) and supporting software solution for easyJet's fleet of 54 Boeing 737 aircraft, using Rockwell Collins eFlight(TM) information management program. Rockwell Collins will supply Civil Aviation Authority Civil Aviation Authority civil (Brit) n → Behörde f für Zivilluftfahrt Class 2 EFB functionality for easyJet's aircraft as well as a ground-based server and integration. This EFB solution moves easyJet towards a paperless cockpit and is designed to increase the airline's operational efficiency. Conference Call and Webcast Details Rockwell Collins Chairman, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Clay Jones and Senior Vice President and CFO See Chief Financial Officer. Patrick Allen For other persons named Patrick Allen, see Patrick Allen (disambiguation). John Keith Patrick Allen (March 17 1927 - July 28 2006) was a British actor and voice actor. Allen was born in Nyasaland (now Malawi), where his father was a tobacco farmer. will conduct an earnings conference call at 9:00 a.m. Eastern Time on April 27, 2005. Individuals may listen to the call on the Internet at www.rockwellcollins.com. Listeners are encouraged to go to the Investor Relations Investor relations The process by which the corporation communicates with its investors. portion of the web site at least 15 minutes prior to the call to download and install any necessary software. The call will be available for replay on the Internet at www.rockwellcollins.com through May 25, 2005. Rockwell Collins is a leader in the design, production and support of communications and aviation electronics solutions for commercial and government customers worldwide. Additional information is available at www.rockwellcollins.com. This press release contains 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. , including certain projections and assumptions, that Rockwell Collins believes to be within the definition of forward-looking statements as defined in 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. Statements in the future tense future tense n. A verb tense expressing future time. Noun 1. future tense - a verb tense that expresses actions or states in the future future and all statements accompanied by terms such as "believe", "project", "will", "expect", "anticipate", and variations thereof are intended to be qualified by this cautionary statement and to be subject to the 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. protection of the federal securities laws. Actual results may differ materially from those projected as a result of certain risks and uncertainties, including but not limited to the health of the global economy, the continued recovery of the commercial aerospace industry and the continued strength of the military communications Military communications, or Signals, is a field of military activities, tactics and equipment dealing with communications. First of all, military communications are battlefield (combat) communications, including intercommunication with a higher command or country's and electronics industry; domestic and foreign government spending Government spending or government expenditure consists of government purchases, which can be financed by seigniorage, taxes, or government borrowing. It is considered to be one of the major components of gross domestic product. , budgetary and trade policies; market acceptance of new and existing products and services; performance of our products and services; potential cancellation or termination of contracts, delay of orders or changes in procurement practices or program priorities by our customers; customer bankruptcies and profitability; recruitment and retention of qualified personnel; performance of our suppliers and subcontractors; risks inherent in fixed price contracts, particularly the risk of cost overruns Noun 1. cost overrun - excess of cost over budget; "the cost overrun necessitated an additional allocation of funds in the budget" cost - the total spent for goods or services including money and time and labor ; risk of significant and prolonged disruption to air travel; our ability to execute to our internal performance plans such as our productivity improvement and cost reduction initiatives; achievement of our acquisition and related integration plans; continuing to maintain our planned effective tax rates; favorable outcomes of certain customer procurements, congressional approvals and regulatory mandates; and the uncertainties of the outcome of litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. , as well as other risks and uncertainties, including but not limited to those detailed herein and from time to time in our Securities and Exchange Commission filings. These forward-looking statements are made only as of the date hereof and the company expressly disclaims any duty to update any forward-looking statement contained in this press release even if new data becomes available or estimates change after the date of this release.
ROCKWELL COLLINS, INC.
SEGMENT SALES AND EARNINGS INFORMATION
(Unaudited)
(in millions, except per share amounts)
Three Months Ended Six Months Ended
March 31 March 31
------------------ ----------------
2005 2004 2005 2004
--------- -------- ------- --------
Sales
Government Systems................ $426 $377 $816 $688
Commercial Systems................ 403 342 776 659
--------- -------- ------- --------
Total sales.................. $829 $719 $1,592 $1,347
========= ======== ======= ========
Segment operating earnings
Government Systems................ $76 $69 $146 $132
Commercial Systems................ 73 46 145 88
--------- -------- ------- --------
Total segment operating
earnings.................... 149 115 291 220
Interest expense.................. (2) (2) (5) (4)
Earnings (loss) from corporate-
level equity affiliate........... (1) 1 - 1
General corporate, net (1)........ (13) (12) (24) (18)
--------- -------- ------- --------
Income before income taxes........ 133 102 262 199
Income tax provision.............. (38) (31) (77) (60)
--------- -------- ------- --------
Net income........................ $95 $71 $185 $139
========= ======== ======= ========
Diluted earnings per share........ $0.52 $0.39 $1.02 $0.77
Average diluted shares outstanding 182.0 181.1 181.3 180.2
(1) General corporate, net for the six months ended March 31, 2004
includes a gain of $5 million ($3 million after tax) related to
favorable settlements of insurance matters.
The following table summarizes sales by product category for the three
and six months ended March 31, 2005 and 2004 (unaudited, in millions):
Three Months Ended Six Months Ended
March 31 March 31
------------------ ----------------
2005 2004 2005 2004
--------- -------- ------- --------
Defense electronics................ $287 $238 $553 $431
Defense communications............. 139 139 263 257
Air transport aviation electronics 222 200 424 384
Business and regional aviation
electronics....................... 181 142 352 275
--------- -------- ------- --------
Total.............................. $829 $719 $1,592 $1,347
========= ======== ======= ========
ROCKWELL COLLINS, INC.
SUMMARY BALANCE SHEET
(Unaudited)
(in millions)
March 31, September 30,
2005 2004
--------- -------------
Assets
Cash.......................................... $256 $196
Receivables................................... 662 616
Inventories................................... 693 650
Current deferred income taxes................. 165 165
Income taxes receivable....................... 10 10
Other current assets.......................... 41 26
--------- -------------
Total current assets..................... 1,827 1,663
Property...................................... 440 418
Goodwill and intangible assets................ 593 550
Other assets.................................. 242 243
--------- -------------
Total assets............................. $3,102 $2,874
========= =============
Liabilities and shareowners' equity
Accounts payable.............................. $234 $240
Compensation and benefits..................... 224 235
Income taxes payable.......................... 24 18
Product warranty costs........................ 161 154
Other current liabilities..................... 352 317
--------- -------------
Total current liabilities................ 995 964
Long-term debt................................ 199 201
Retirement benefits........................... 552 521
Other liabilities............................. 54 55
Shareowners' equity........................... 1,302 1,133
--------- -------------
Total liabilities and shareowners' equity $3,102 $2,874
========= =============
ROCKWELL COLLINS, INC.
CONDENSED CASH FLOW INFORMATION
(Unaudited)
(in millions)
Six Months Ended
March 31
----------------
2005 2004
-------- -------
Operating Activities
Net income........................................... $185 $139
Adjustments to arrive at cash provided by operating
activities:
Depreciation....................................... 43 46
Amortization of intangible assets.................. 9 9
Pension plan contributions......................... (4) (128)
Compensation and benefits paid in common stock..... 31 27
Deferred income taxes.............................. 8 22
Tax benefit from the exercise of stock options..... 25 5
Changes in assets and liabilities, excluding
effects of acquisitions and foreign currency
adjustments:
Receivables..................................... (31) 2
Inventories..................................... (16) (54)
Accounts payable................................ (2) (18)
Income taxes.................................... 4 29
Compensation and benefits....................... (19) (15)
Other assets and liabilities.................... (33) (30)
-------- -------
Cash Provided by Operating Activities....... 200 34
-------- -------
Investing Activities
Acquisition of businesses, net of cash acquired...... (18) (126)
Property additions................................... (42) (32)
Proceeds from the disposition of property............ 2 1
Acquisition of intangible assets..................... (7) (11)
-------- -------
Cash Used for Investing Activities.......... (65) (168)
-------- -------
Financing Activities
Net proceeds from issuance of long-term debt......... - 198
Net increase in short-term borrowings................ - 24
Purchases of treasury stock.......................... (106) (73)
Cash dividends....................................... (43) (32)
Proceeds from exercise of stock options.............. 71 22
-------- -------
Cash (Used for) Provided by Financing
Activities................................. (78) 139
-------- -------
Effect of exchange rate changes on cash.............. 3 (4)
-------- -------
Net Change in Cash................................... 60 1
Cash at Beginning of Period.......................... 196 66
-------- -------
Cash at End of Period................................ $256 $67
======== =======
Certain prior year amounts have been reclassified to conform to the
current year presentation.
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