24 Jan 03. Raytheon Company (NYSE: RTN – News) reported fourth quarter 2002 income from continuing operations of $155m or $0.38 per diluted share, (2001: $64m or $0.17).
The fourth quarter 2002 results included a $175m pretax charge, $0.31 per diluted share, to write-off the Company’s investment in Space Imaging and accrue for a related credit facility guarantee on which the Company expects to make payment in 2003. The fourth quarter results also included a $29m pretax gain, $0.05 per diluted share, on the sale of the Company’s Lexington, Mass. headquarters. Both of these items are included in other expense.
The Company reported a fourth quarter 2002 net loss of $15m or $0.04 per diluted share, (2001: $162m or $0.42). The improvement was principally due to a lower fourth quarter 2002 effective tax rate and fourth quarter 2001 goodwill amortization of $80m or $0.20 per diluted share that was discontinued in accordance with SFAS No. 142.
Net sales for the fourth quarter were $4.7bn, (2001: $4.4bn). The defense businesses delivered strong performance in the quarter with sales increasing by 9 percent. Operating cash flow from continuing operations in the quarter was $998m, significantly ahead of plan and prior year results of $591m. Discontinued operations consumed $391m in cash during the fourth quarter. The Company ended 2002 with net debt of $6.9bn. During the fourth quarter, the Company completed the repurchase of assets from Raytheon Aircraft’s off-balance sheet financing
facility as indicated in the third quarter 2002 disclosures.
“I am delighted with the strong growth and strategic wins in our defense businesses during 2002 which position us well for long-term growth and reflect our tremendous focus on customer satisfaction. I am also pleased with Raytheon Aircraft’s performance in meeting its commitments for the year,” said Daniel P. Burnham, Raytheon chairman and CEO. “This success was clearly reflected in our core operating performance, especially in cash flow and net debt. In the coming year, we expect the same level of outstanding performance from our defense businesses and intend to again intensely manage Raytheon Aircraft in thee face of extremely difficultmarkets.”
For the full year the Company reported income from continuing operations of $755m or a $1.85 per diluted share, (2001: $18m or $0.05). The results include the previously discussed $175m pretax charge related to Space Imaging and a $29m
pretax gain on the sale of the Company’s Lexington, Mass. headquarters. Included in the 2001 results was goodwill amortization that was discontinued effective Jan. 1, 2002 in accordance with SFAS No. 142. For the year 2002, including the impact of discontinued operations and the goodwill impairment charge recorded as of Jan. 1, 2002 with the adoption of SFAS No. 142, the Company reported a 2002 net loss of $1.44 per diluted share compared to a net loss of $2.09 per diluted share in 2001.
Total 2002 sales for the Company were $16.8bn, (2001: $16.0bn), when adjusted for divestitures. Operating cash for 2002 was $1.6bn, significantly ahead of plan and prior year results of $138m. While discontinued operations consumed $1.2bn in cash for the year, the Company generated $424m of total operating cash flow for the year.
Electronic Systems (ES) fourth quarter 2002 sales were $2.5bn, up 13 Percent, (2001: $2.2bn), due to increases in sensor-related and U.S. Navy programs. ES generated operating income of $350m in the quarter, (2001: $324m). Excluding goodwill amortization, ES had operating income of $370m in the 2001 fourth quarter. A decline in pension income accounted for more than all of the decline in operating income, excluding goodwill amortization.
During the quarter the Standard Missile-3 ship-launched missile destroyed a ballistic missile target, demonstrating that sea-based missile defense can defend large regions. This program will be central to the developme