DRS REPORTS RECORD RESULTS
29 May 08. Fully justifying the price paid offered by Finmeccanica to purchase the Company, DRS Technologies, Inc. (NYSE: DRS) reported record financial results for the fiscal 2008 fourth quarter and year, which ended March 31, 2008. Results for both periods included higher revenues, operating income, net earnings and earnings per share than the same periods a year earlier. For fiscal 2008, the company secured a record $3.86bn in new contract awards and ended the period with funded backlog of $3.61bn.
“DRS completed fiscal 2008 with record financial results across the board for the fourth quarter, including a new high for a fourth quarter in organic revenue growth and robust bookings,” said Mark S. Newman, chairman, president and chief executive officer of DRS Technologies. “Record new orders during the period reflected the continued strong demand for DRS’s products and services. The company’s performance for the fiscal year was excellent, advancing significantly year over year and positioning the company well, as we entered the first quarter of fiscal 2009.”
Fiscal 2008 Fourth Quarter Results
Fiscal 2008 fourth quarter net earnings of $54.9m were significantly higher than net earnings of $22.0m reported for the fourth quarter of fiscal 2007, as restated. (For information on the fiscal 2007 fourth quarter restatement, see the section entitled “Fiscal 2007 Adjustment” later in this news release.)
Diluted earnings per share (EPS) of $1.32 for the fiscal 2008 fourth quarter were more than double diluted EPS of $0.54 posted for last year’s fourth quarter and were based on 41.6 million weighted average diluted shares outstanding, compared with 41.1 shares for the same period a year earlier.
Consolidated revenues for the fourth quarter of fiscal 2008 were $939.4m, 18 percent above revenues of $798.9m for the same period last year. Record fourth quarter revenues were attributable entirely to organic growth.
Operating income of $108.3m for the last three months of fiscal 2008 was 89 percent above $57.2m for the same quarter in the previous fiscal year. Contributing to the fiscal 2008 fourth quarter increase was higher overall revenue generation, with profitability rising in each of the company’s operating segments.
The company’s operating margin (operating income as a percentage of revenues) for the fiscal 2008 fourth quarter was a strong 11.5 percent, compared with 7.2 percent for fiscal 2007. Earnings before interest, taxes, depreciation and amortization (EBITDA) of $128.1m for the fiscal 2008 fourth quarter were 68 percent higher than EBITDA of $76.1m for the last quarter of fiscal 2007. EBITDA as a percentage of revenues was 13.6 percent, compared with 9.5 percent for last year’s fourth quarter.
Interest and related expenses for the fourth quarter of fiscal 2008 were $26.2m, 10 percent lower than $29.1m for the same period a year earlier. The decrease was due primarily to lower average borrowings outstanding, reflecting the company’s focus on reducing debt, which was $1.63bn at the end of the fiscal year, 9 percent lower than a year earlier.
The effective income tax rate for the fourth quarter of fiscal 2008 was approximately 33 percent, compared with approximately 21 percent for the same period last fiscal year. The effective income tax rates for the fourth quarter of fiscal 2008 and fiscal 2007 were positively impacted by the recording of $2.5m and $5.0m, respectively, in discrete cumulative tax benefits, primarily related to the reversal of a valuation allowance on previously unrecognized losses at the company’s U.K. operation in the fourth quarter of fiscal 2008 and to export sales under the Extraterritorial Income (ETI) exclusion in the fourth quarter of fiscal 2007.
Net cash provided by operating activities for the fourth quarter of fiscal 2008 was