RECORD RESULTS FROM DRS
08 Aug 08. DRS Technologies, Inc. (NYSE: DRS) today reported record financial results for the first quarter of fiscal 2009, which ended June 30, 2008. Results included higher revenues, operating income, net earnings and earnings per share than the same period a year earlier. For the first three months of fiscal 2009, the company secured a first quarter record $1.07bn in new contract awards and ended the period with a new high in funded backlog of $3.72bn.
“DRS’s first quarter financial results included a 40 percent increase in net earnings, a new quarterly high in organic revenue growth of 29 percent and a strong book-to-bill ratio of 1.1 to 1, reflecting continued demand for DRS’s products and services,” said Mark S. Newman, chairman, president and chief executive officer of DRS Technologies. “Our record funded order backlog at the end of the quarter provides a solid foundation for business growth in the new fiscal year and beyond.”
Fiscal 2009 First Quarter Results
Consolidated revenues for the first three months of fiscal 2009 were $951.9m, 29 percent above revenues of $735.6m for the same period last year. Record first quarter revenues were attributable entirely to organic growth. Operating income of $76.1m for the fiscal 2009 first quarter was 12 percent above $68.2m for the same quarter in the previous fiscal year*, due to higher overall revenue generation at each of the company’s operating segments. Operating income for the fiscal 2009 three-month period included the impact of $11.5m in costs related to the acquisition of DRS by Finmeccanica S.p.A. (FNC.MI), which is expected to close in the fourth quarter of the calendar 2008 year. The company’s operating margin (operating income as a percentage of revenues) for the fiscal 2009 first quarter was 8.0 percent. Excluding the $11.5m in acquisition-related costs, the company reported fiscal 2009 first quarter adjusted operating income of $87.7m, 29 percent higher than the same period last year, and an adjusted operating margin of 9.2 percent, compared with 9.3 percent for the same period in fiscal 2008. Earnings before interest, taxes, depreciation and amortization (EBITDA) of $95.2m for the fiscal 2009 first quarter were 11 percent higher than EBITDA of $86.1M for the same quarter of fiscal 2008. EBITDA as a percentage of revenues was 10.0 percent. Interest and related expenses for the first quarter of fiscal 2009 were $23.5m, 18 percent lower than $28.7m for the same period a year earlier. The decrease was due primarily to lower average borrowings outstanding and a $1.6m interest credit related to discrete cumulative tax benefits. The effective income tax rate for the first quarter of fiscal 2009 was approximately 32 percent, compared with approximately 36 percent for the same period last fiscal year. The lower tax rate reflected the positive impact of $2.8m in discrete cumulative tax benefits, primarily related to the completion of federal income tax audits for the company’s fiscal years 2002 through fiscal 2004.
Fiscal 2009 first quarter net earnings of $35.4m were 40 percent higher than net earnings of $25.2m reported for the first quarter of fiscal 2008*. Excluding the effect of the acquisition-related costs, which were approximately $7.8m after taxes, and $2.8m in discrete cumulative tax benefits, as discussed above, the company reported adjusted net earnings of $40.4m for the first quarter of fiscal 2009, 60 percent above the same period last year.
Diluted earnings per share (EPS) of $0.83 for the fiscal 2009 first quarter were 36 percent above diluted EPS of $0.61 posted for the same period last year and were based on 42.7m weighted average diluted shares outstanding, compared with 41.3m shares for the same period a year earlier. Without consideration for $0.18 per share in acquisition-related costs and $0.07 per share in discrete cumulative tax benefits, as referen