Amid the doom and gloom which has become revenue reporting season, it is refreshing to note that L-3 Communications reports that first quarter of 2002, sales were $696.8 million, an increase of 50.9% over sales of $461.9 million in the first quarter of 2001. First quarter 2002 operating income was $71.3 million, compared with operating income as reported in the year ago period of $46.9 million, an increase of
52.0%. As a percentage of sales, operating income in the 2002 first quarter was 10.2%, compared with 10.1% in the first quarter of 2001.
Net income for the 2002 first quarter was $29.3 million, an increase of 106.3% over net income of $14.2 million as reported in the first quarter of 2001. Diluted earnings per share in the first quarter of 2002 was $0.71 per diluted share, compared with $0.40 per diluted share in the same period last year as reported, an
increase of 77.5%. In the 2002 first quarter, diluted shares outstanding increased approximately 15.1% to 41.2 million from 35.8 million in the first quarter of 2001, principally reflecting the company's sale of common stock, completed in May of 2001.
The company continued to see strong bookings growth in the first quarter of 2002, with funded orders reaching $792.5 million, an increase of 55.9% versus bookings of $508.4 million in the same period last year. Funded backlog at March 31, 2002 was $2,616.8 million, an increase of 86.8% over funded backlog of $1,400.5 million at March 31, 2001.
"The first quarter of 2002 was very good for L-3," said Frank C. Lanza, chairman and CEO of L-3 Communications. "The company had strong performance in secure communications, simulation and training, ocean products, military avionics, guidance products and fuzing products. In addition, L-3 completed the acquisition of Raytheon's Aircraft Integration Systems business (renamed L-3 Communications Integrated
Systems (IS)). L-3 Communications IS and other recent acquisitions, including SY Technology, BT Fuze Products, Spar Aerospace and the Government Services Group of Emergent (renamed L-3 Analytics), are in the process of being integrated into L-3, and are also doing very well."
"Another milestone for the company," continued Mr. Lanza, "was the agreement by the Transportation Security Administration (TSA) to order 100 L-3 eXaminer 3DX 6000 explosive detection systems (EDS)." Also included in this award was long-lead funding for 200 units and ramp-up production funding for an
additional 200 or more units.
"The outlook for L-3 remains positive for the rest of the year," said Mr. Lanza. "While there continues to be softness in the commercial aircraft market due to the slowdown in air travel and the space market remains flat, the solid performance of L-3's defense businesses more than offsets those trends. In addition, we are very confident that the 2002 defense budget and proposed budget for 2003 will provide good growth opportunities in a number of areas that benefit L-3." Mr. Lanza said that areas that will receive focus would be ISRC, an expanded role and mission for UAVs, missile defense and precise weaponry. On the domestic front, Mr. Lanza said that national, state and local efforts to improve homeland security preparedness are creating opportunities for L-3's products and services.