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14 May 03. DRS Technologies, Inc. (NYSE: DRS – News) today reported record financial results for the fourth quarter and fiscal year ended March 31, 2003. Results for both periods included significant gains in revenues, operating income, net earnings and cash flow. Strong new orders for products and services, combined with acquisition-related backlog, increased funded backlog at year-end to the highest level in the company’s history.

Fiscal 2003 Results

Fiscal 2003 revenues were $675.8m, a 31 percent increase over revenues of $517.2m for last year. Record operating income of $67.7m was 36 percent higher than the $49.8m reported for fiscal 2002. Operating income as a percentage of sales improved to 10.0 percent, compared with 9.6 percent for the previous year.

Earnings before interest, taxes, depreciation and amortization (EBITDA) were $81.9m for fiscal 2003, 32 percent higher than EBITDA of $62.0m from a year earlier.

Net earnings for the twelve-month period were 48 percent higher than a year ago at $30.2m, or $1.58 per diluted share, on 19.1 million diluted shares outstanding. Last year’s net earnings were $20.3m, or $1.41 per diluted share, on 14.5 million diluted shares outstanding. The 32 percent increase in diluted shares outstanding was principally due to the company’s equity offering completed in December 2002, which placed approximately 5.5 million additional shares in the marketplace.

Strong free cash flow (cash flow from operations less capital expenditures) for the fiscal year of $30.5 million was significantly higher than free cash flow of $14.3 million for fiscal 2002.

“Fiscal 2003 was a great year for DRS and a very active one,” said Mark S. Newman, chairman, president and chief executive officer of DRS Technologies. “In our first year as a New York Stock Exchange-listed company, we achieved record financial results, turning in strong top- and bottom-line growth; we booked more business than in any other year, resulting in a funded backlog of $867m; and, we completed six acquisitions that strengthened our competitive position and critical technology base, and entered the growing Naval power systems and UAV (Unmanned Aerial Vehicles) businesses. We also completed an equity offering that provided $145.3 million in net proceeds and expanded our credit facility at favorable rates to enhance our cash position and fuel our strategic plans for long-term growth. These successes, coupled with a defense spending outlook projected to increase over the next several years, should help us achieve our stated goals of double-digit annual revenue and operating margin growth, well positioning the company for the future.”

Record fiscal 2003 revenues were primarily attributable to the addition of sales from the acquisition of the Navy Controls Division of Eaton Corporation (NYSE: ETN – News) on July 15, 2002, and the acquisition of Paravant Inc., completed on December 2, 2002, as well as the benefit of a full year of sales associated with DRS’s acquisition of the Sensors and Electronic Systems business of The Boeing Company (NYSE: BA – News) completed at the end of the second quarter of fiscal 2002. Higher organic sales associated with the company’s electro-optical systems and flight safety and communications segments also contributed to the increase. Internal revenue growth accounted for approximately 6 percent of the increase for fiscal 2003. Revenues for last fiscal year included a total of $25.1m from the company’s DRS Ahead Technology and DRS Advanced Programs units, which were sold during the first and third quarters of fiscal 2003, respectively. Record operating income for the year was due primarily to higher sales volume overall, notably improved profitability in the company’s flight safety and communications segment and continued robust operating performance in the electro-optical systems segment. Strong margins from acquisition-related operations in the

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