Operating Cash Flow Up Year-over-year and Better Than Plan
LEXINGTON, Mass., April 19 /PRNewswire/ -- Raytheon Company
(NYSE: RTNA, RTNB) today reported first quarter 2000 sales from continuing
operations of $4.2 billion, off slightly from $4.3 billion in the first
quarter 1999 due to divestitures. The company had income from continuing
operations of $80 million, or $0.24 per diluted share, versus $240 million, or
$0.71 per diluted share, in the first quarter 1999.
Raytheon Engineers & Constructors (RE&C) contributed a $70 million loss
from operations in the quarter, primarily due to additional losses on one
large fixed-price international program. Additionally, Raytheon
recorded a loss on the sale of RE&C to Morrison Knudsen Corporation of $191
million. The total loss from RE&C as a discontinued operation in the first
quarter was $0.77 per diluted share. Including the impact of
discontinued operations the company recorded a net loss of $181 million for
the quarter, compared with net income of $205 million in the first quarter
1999.
Reporting RE&C as discontinued represents a $0.20 per share adjustment in
Raytheon's full-year earnings projections for continuing operations.
Accordingly, the company now projects full-year diluted earnings per
share of $1.40-$1.55.
Raytheon's total backlog in continuing operations at the end of the quarter
was $24.6 billion, compared with $20.1 billion at the end of the 1999 first
quarter. New bookings for continuing operations during the quarter
totaled $4.3 billion.
Cash outflow from operations was $518 million for the quarter, a smaller
outflow than planned and an improvement of $478 million over the same period
last year. Net debt at the end of the 2000 first quarter was
$10.0 billion, compared with $9.8 billion at the end of the first quarter
1999.
"On balance, earnings from continuing operations met expectations," said
Daniel P. Burnham, Raytheon chairman and chief executive officer. "This was an
important first step in repositioning the company for 2001 and beyond."
Electronic Systems
Electronic Systems, formerly Defense Systems and Sensors and Electronic
Systems, reported sales of $1.9 billion in the first quarter 2000, compared
with $2.0 billion in the 1999 first quarter. Volume was down for missiles and
missile defense systems, as expected. The business had operating income of
$183 million in the quarter versus $346 million a year ago. Contributors to
the decline in operating income included lower volume, adverse mix and certain
positive non-recurring items in 1999.
Electronic Systems had backlog of $11.0 billion at the end of the first
quarter 2000, compared with $9.4 billion at the end of the first quarter 1999.
Command, Control, Communication and Information Systems
Command, Control, Communication and Information Systems (C3I) had sales of
$846 million in the first quarter, compared with $962 million in sales last
year. Sales were lower in the quarter, but are expected to be up overall for
the year. Operating income for the unit was $69 million compared with $121
million in the first quarter of 1999. Operating income was down primarily due
to lower volume, higher business development expenses and certain prior year,
positive non-recurring items.
C3I had backlog of $4.8 billion at the end of the quarter, versus $5.1
billion at the end of the first quarter of
1999.
Technical Services
Technical Services (TS), formerly Training & Services, recorded first
quarter sales of $421 million, versus $449 million in the first quarter of
1999. Operating income for the unit was $27 million for the period, compared
with $29 million in the first quarter of 1999. The sale of the flight
simulator business had an unfavorable impact on both sales and operating
income compared with the prior year first quarter.
TS had backlog at the end of the first quarter totaling $1.9 billion,
compared with $1.6 billion a year ago.
Aircraft Integration Systems
Aircraft Integration Systems (AIS) reported sales of $298 million for the
first quarter of 2000, compared with sales of $295 million for the first
quarter of 1999. AIS had first quarter 2000 operating income of $15 million,
compared with $42 million in the 1999 first quarter. Operating income was down
due to contract settlements and termination payments in 1999, as well as other
positive non-recurring items.
AIS had backlog of $2.3 billion at the end of the first quarter 2000,
compared with $1.1 billion at the end of the 1999 first quarter, reflecting
the Airborne Standoff Radar (ASTOR) contract, which was finalized in the
fourth quarter of 1999.
Commercial Electronics
Raytheon's Commercial Electronics businesses (CE) had sales of $174
million in the first quarter, compared with first quarter 1999 sales of $220
million. The decrease in sales was due to the divestiture of Cedarapids
Inc. in the third quarter of 1999. CE had operating income of $20 million in
the first quarter, compared with $11 million for the same period last year.
Operating income was bolstered by a favorable settlement on a
commercial training contract, consistent with the plan for the quarter.
CE had backlog of $0.6 billion at the end of the first quarter, versus
$0.5 billion at the end of the 1999 first quarter.
Raytheon Aircraft Company
Raytheon Aircraft Company (RAC) recorded first quarter 2000 sales of $815
million, up 30 percent from the 1999 period. Operating income for RAC fell 47
percent to $30 million in the first quarter 2000. Aircraft shipments in the
quarter were up 44 units year-over-year, including recovery of 16 of the 19
planes that slipped in the fourth quarter of 1999. RAC's results were affected
by higher production costs, startup costs associated with the launch of SAP,
higher fuel costs at Raytheon Travel Air and narrower spreads on customer
financing due to higher interest rates.
RAC had backlog of $4.1 billion at the end of the first quarter, compared
with $2.5 billion at the end of the first quarter of 1999.
Raytheon Company is a global technology leader that provides products and
services in the areas of commercial and defense electronics and business and
special mission aircraft. Raytheon has operations throughout the United States
and serves customers in 80 countries.
This news release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act concerning the company's
financial results, future plans, objectives, expected performance and
potential new business awards. Specifically, statements in this release that
are not historical facts, including statements accompanied by words such as
"believe," "expect," "anticipate," "estimate," "intend, or "plan" are intended
to identify forward-looking statements and convey the uncertainty of future
events or outcomes.
The company cautions readers that any such forward-looking statements are
based on assumptions that the company believes are reasonable, but are subject
to a wide-range of risks, and, actual results may differ materially. Important
factors that could cause actual results to differ include but are not limited
to: differences in anticipated and actual program results; risks inherent with
large long-term fixed price contracts; the ability to realize anticipated cost
efficiencies; the ability to contain cost growth, particularly at RAC; the
ability to finance ongoing operations at attractive rates; the effect of
market conditions; and the impact of competitive products and pricing, among
other things. Further information regarding the factors that could cause
actual results to differ materially from projected results can be found in the
company's reports filed with the SEC, including "Item 1 - Business" in
Raytheon's most recent Form 10-K, and this press release should be read in
conjunction with cautionary statements contained therein.
Raytheon Company
Financial Information
First Quarter 2000
Three Months Ended
(In millions, except per share amounts) 02-Apr-00 04-Apr-99
Net sales $ 4,231 $ 4,336
Cost of sales 3,451 3,341
Administrative and selling expenses 341 305
Research and development expenses 123 111
Total operating expenses 3,915 3,757
Operating income 316 579
Interest expense, net 180 175
Other (income) expense, net (5) 9
Non-operating expense, net 175 184
Income from continuing operations before taxes 141 395
Federal and foreign income taxes 61 155
Income from continuing operations 80 240
Discontinued operations
Income (loss) from discontinued
operations, net of tax (70) 18
Loss on disposal of discontinued
operations, net of tax (191) --
(261) 18
Income (loss) before accounting change (181) 258
Cumulative effect of change in accounting
principle, net of tax -- 53
Net income (loss) $ (181) $ 205
Earnings per share from continuing operations
Basic $ 0.24 $ 0.71
Diluted $ 0.24 $ 0.71
Earnings (loss) per share from
discontinued operations
Basic $ (0.77) $ 0.05
Diluted $ (0.77) $ 0.05
Earnings (loss) per share before
accounting change
Basic $ (0.54) $ 0.77
Diluted $ (0.54) $ 0.76
Earnings (loss) per share
Basic $ (0.54) $ 0.61
Diluted $ (0.54) $ 0.60
Average shares outstanding
Basic 338.3 336.4
Diluted 338.7 340.2
Attachment B
Raytheon Company
Segment Information
First Quarter 2000
Operating Income
Operating As a Percent
Net Sales Income of Sales
(In millions) Three Months Three Months Three Months
Ended Ended Ended
02-Apr 04-Apr 02-Apr 04-Apr 02-Apr 04-Apr
2000 1999 2000 1999 2000 1999
Electronic Systems $ 1,878 $ 2,010 $ 183 $ 346 9.7% 17.2%
Command, Control,
Communication and
Information Systems 846 962 69 121 8.2% 12.6%
Technical Services 421 449 27 29 6.4% 6.5%
Aircraft Integration
Systems 298 295 15 42 5.0% 14.2%
Commercial Electronics 174 220 20 11 11.5% 5.0%
Aircraft 815 626 30 57 3.7% 9.1%
Corporate and
Eliminations (201) (226) (28) (27)
Total $ 4,231 $ 4,336 $ 316 $ 579 7.5% 13.4%
Note: Certain prior year amounts were reclassified to conform to
the current year presentation including the combination of the Defense
Systems and Sensors and Electronic Systems segments into Electronic
Systems, the break-out of previously aggregated segments, and the
addition of Corporate and Eliminations. Corporate and Eliminations
includes certain company-wide activities that have not been attributed
to a particular segment and intercompany eliminations. In addition,
the Engineering and Construction segment was discontinued.
Attachment C
Raytheon Company
Other Information
First Quarter 2000
(In millions, except total employees and aircraft shipments)
Backlog
02-Apr-00 04-Apr-99
Electronic Systems $10,953 $ 9,361
Command, Control, Communication
and Information Systems 4,764 5,058
Technical Services 1,913 1,634
Aircraft Integration Systems 2,262 1,119
Commercial Electronics 603 469
Aircraft 4,143 2,450
$24,638 $20,091
U.S. government backlog included above $15,512 $12,464
Total Employees
02-Apr-00 04-Apr-99
Total employees 94,200 98,600
Aircraft Shipments (Units)
Three Months Ended
02-Apr-00 04-Apr-99
Hawker 15 13
Beechjet (Commercial) 13 11
King Air 50 28
1900D Commuter 12 9
Pistons 40 32
T-6A 7 --
Total aircraft shipments 137 93
Attachment D
Raytheon Company
Preliminary Financial Information
First Quarter 2000
(In millions)
Balance sheets
02-Apr-00 31-Dec-99 04-Apr-99
Assets
Cash and cash equivalents $ 153 $ 230 $ 58
Accounts receivable 862 819 836
Contracts in process 4,448 4,348 4,267
Inventories 1,935 1,950 2,017
Deferred federal and foreign income taxes 430 490 778
Prepaid expenses and other current assets 232 192 252
Net assets from discontinued operations 127 551 500
Total current assets 8,187 8,580 8,708
Property, plant and equipment, net 2,451 2,387 2,222
Goodwill, net 13,562 13,596 13,851
Other assets, net 2,802 2,704 2,756
Total assets $27,002 $27,267 $27,537
Liabilities and Stockholders' Equity
Notes payable and current
portion of long-term debt $ 1,109 $ 2,471 $ 1,669
Advance payments, less
contracts in process 993 1,245 816
Accounts payable 1,114 1,182 1,340
Accrued salaries and wages 575 497 547
Other accrued expenses 1,582 1,716 1,908
Total current liabilities 5,373 7,111 6,280
Accrued retiree benefits and
other long-term liabilities 1,348 1,411 1,676
Deferred federal and foreign
income taxes 507 488 525
Long-term debt 9,042 7,298 8,161
Stockholders' equity 10,732 10,959 10,895
Total liabilities and
stockholders' equity $27,002 $27,267 $27,537
Debt-to-capital ratio
02-Apr-00 31-Dec-99 04-Apr-99
Debt $10,151 $ 9,769 $ 9,830
Capital 20,883 20,728 20,725
Debt-to-capital ratio 48.6% 47.1% 47.4%
Attachment E
Raytheon Company
Preliminary Cash Flow Information
First Quarter 2000
(In millions)
Cash flow information
Three Months Ended
02-Apr-00 04-Apr-99
Income from continuing operations $ 80 $ 187
Depreciation 67 72
Amortization 104 100
Working capital (719) (1,221)
Capital spending (140) (81)
Discontinued operations 164 (57)
Other (74) 4
Subtotal - operating cash flow (518) (996)
Net activity in financing receivables 4 (57)
Divestitures 160 --
Dividends (68) (67)
Share repurchase -- (82)
Other (37) (3)
Change in net debt $ (459) $(1,205)
Restructuring amounts included in operating
cash flow above $ 88 $ 105
Segment operating cash flow information
Three Months Ended
02-Apr-00 04-Apr-99
Electronic Systems $ (44) $(283)
Command, Control, Communication
and Information Systems (178) (139)
Technical Services (37) (34)
Aircraft Integration Systems 15 (77)
Commercial Electronics 56 (12)
Aircraft (341) (304)
Discontinued operations 164 (57)
Other (153) (90)
$(518) $(996)
David Polk of Raytheon Company, 781/860-2386
SOURCE Raytheon Company
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Related links:
http://www.raytheon.com
CONTACT:
David Polk of Raytheon Company, 781-860-2386
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