6 Nov 02. DRS Technologies, Inc. (NYSE:DRS – News) today reported record financial results for the second quarter and first six months of fiscal 2003. Results for both periods included significant increases in revenues, operating income and net earnings.
Funded backlog at the end of the period was at the highest level in the company’s history. For the second quarter ended September 30, 2002, revenues were $161.2m , a 39 percent increase over revenues of $116.2m for the same period last year.
Fiscal 2003 second quarter operating income of $16.7m was 56 percent higher than the $10.7m reported for the same three-month period in fiscal 2002. Operating income as a percentage of sales was 10.4 percent, versus 9.2 percent for the previous year.
Earnings before interest, taxes, depreciation and amortization (EBITDA) were $20.9m for the second quarter of fiscal 2003, 56 percent higher than EBITDA of $13.4m for the comparable period a year earlier. EBITDA as a percentage of sales was 13.0 percent, versus 11.5 percent for last year’s second quarter.
Net earnings for the three-month period were 71 percent higher than a year ago at $7.7m, or $0.44 per diluted share, on 17.6 million diluted shares outstanding. Last year, second quarter net earnings were $4.5m, or $0.34 per diluted share, on 13.2 million diluted shares outstanding. The 33 percent increase in diluted shares outstanding for the second quarter of fiscal 2003 was principally due to the equity offering completed by the company in the third quarter of fiscal 2002, which placed approximately 3.8 million additional shares in the marketplace.
“DRS completed the second quarter of fiscal 2003 with excellent results, achieving new records for the period in revenues, operating income, earnings, bookings and backlog,” said Mark S. Newman, chairman, president and chief executive officer of DRS Technologies. “Performance in our electronic systems and electro-optical systems segments was enhanced by the contributions of acquired operations and our ability to successfully integrate them. Higher sales and operating margins in our Flight Safety and Communications Group also contributed to strong results.”
Record revenues for the second quarter were primarily attributable to the addition of sales from acquired operations, including the Navy Controls Division of Eaton Corporation (NYSE: ETN – News) on July 15, 2002 and The Boeing Company’s (NYSE: BA – News) Sensors and Electronic Systems business at the end of the second quarter of fiscal 2002. Also contributing to record revenues were increased sales from the company’s flight safety and communications segment, partially offset by lower shipments in the company’s electronic systems segment and the sale of the company’s DRS Ahead Technology unit in the first quarter.
Second quarter record operating income was due to higher sales volume overall, and strong program performance in the company’s electro-optical systems and flight safety and communications segments, partially offset by lower profitability in the electronic systems segment.
Mr. Newman continued, “During this fiscal year, we have remained active in implementing our ongoing acquisition program. On July 15th, we completed the acquisition of the Navy Controls Division of Eaton Corporation (NYSE: ETN – News), located in Milwaukee, Wisconsin and Danbury, Connecticut. With a focus on ship power conversion, distribution and control systems, motor products, networking and ship automation, this new unit is strategically significant to DRS’s long-term goals for growth as a leading U.S. Navy electronic systems supplier. Renamed DRS Power & Control Technologies, this unit has a major installed base of equipment in the fleet and is expected to benefit from the Navy’s backfit, transformational conversion and modernization initiatives, as well as from new ship installation. It has captured key positions on