DRS REPORTS HIGHER REVENUES, OPERATING INC0ME AND NET EARNINGS
09 Nov 07. DRS Technologies, Inc. (NYSE: DRS) today reported record financial results for the second quarter of fiscal 2008, which ended September 30, 2007. Results for the period included higher revenues, operating income, net earnings and earnings per share than the same quarter a year ago. The company secured a quarterly record in new orders, pushing funded backlog at the end of the period to a new high.
“The company generated strong sales and profitability for the second quarter of fiscal 2008, reflecting solid organic revenue growth and higher operating margins,” said Mark S. Newman, DRS Technologies’ chairman, president and chief executive officer. “A quarterly record in new orders for products and services was achieved, driving funded backlog at the end of the period to $3.6 billion, the highest level reported by the company to date.”
He continued, “I also am pleased to announce that toward the end of the second quarter the company resumed product deliveries on the U.S. Army’s Thermal Weapon Sights II (TWS II) program.”
Fiscal 2008 Second Quarter Results
Consolidated revenues of $783.8m for the second quarter of fiscal 2008 were 10 percent higher than revenues of $711.5m for the same quarter last fiscal year. The increase was attributable entirely to organic growth.
Fiscal 2008 second quarter operating income of $92.1m was 28 percent above the $71.9m reported for the same quarter in the previous fiscal year. The increase in the fiscal 2008 second quarter was due primarily to higher aggregate revenues and the positive impact of a pre-tax $11.7m curtailment gain related to one of the company’s benefit plans. The operating margin (operating income as a percentage of revenues) for the fiscal 2008 three-month period was 11.8 percent, compared with 10.1 percent for the same period last year. Excluding the pension gain, fiscal 2008 second quarter operating income was $80.4m, 12 percent higher than a year ago, and represented a 10.3 percent operating margin.
Earnings before interest, taxes, depreciation and amortization (EBITDA) were $110.2m for the fiscal 2008 second quarter, (Fiscal 2007: 22 percent higher, $90.6m. EBITDA as a percentage of revenues was 14.1 percent, compared with 12.7 percent in the year-earlier period. Interest and related expenses for the second quarter of fiscal 2008 decreased to $28.1m, (Fiscal 2007: $30.6 m). The decrease was due to lower average borrowings outstanding.
The effective income tax rate for the second quarter of fiscal 2008 was approximately 32 percent, compared with approximately 39 percent for the same period last fiscal year. The lower effective income tax rate in the fiscal 2008 period was due to the recording of approximately $3.1m in discrete cumulative tax benefits. The tax rate for the fiscal 2007 second quarter included $0.8m in discrete cumulative tax benefits.
Net earnings of $43.0m for the fiscal 2008 three-month period;(Fiscal 2007: 71 percent higher than net earnings of $25.2m) and included approximately $10.4m in combined after-tax benefits as a result of the curtailment gain and discrete cumulative tax benefits discussed above. Excluding the gain in the fiscal 2008 three-month period and the tax benefits from the second quarter in both years, the company would have reported net earnings of $32.6m in the fiscal 2008 second quarter, 34 percent above the same quarter last year.
Diluted earnings per share (EPS) of $1.04 for the fiscal 2008 second quarter were 68 percent above the $0.62 posted for last year’s second quarter and were based on 41.4 million weighted average diluted shares outstanding, compared with 40.5 shares for the same period a year earlier. Fiscal 2008 second quarter diluted EPS included $0.25 per share in combined tax benefits, as discussed above: $0.18 per shar