Michael D Brown News

The House Committee on Transportation and Infrastructure will meet on March 18 where the Subcommittee on Economic Development, Public Buildings, and Emergency Management will conduct an oversight hearing into homeland security emergency preparedness program budgets. Among other things, the Subcommittee will examine the proposed transfer of the port security grant program from the Transportation Security Administration to the newly-created Office of State and Local Government Coordination and Preparedness and the proposed reduction of port security grant funding from $124.5 million in FY2004 to only $46 million in FY2005. The witness will be the Honorable Michael D. Brown, Under Secretary for Emergency Preparedness and Response, Department of Homeland Security. (Source: HK Law)

Litton Industries, after seeing its shares drop more than 60 percent over the past 12 months (see chart, page 2), caught in a bearish defense industry down draft, reported great third quarter results last week. Litton Industries reported that diluted earnings per share rose 23% to $1.35 for the third quarter, compared with diluted earnings per share of $1.10 for the third quarter of fiscal 1999. Excluding a one-time gain on sale of businesses, third quarter diluted earnings per share increased 21% to $1.33. Net earnings for the third quarter were $61.8 million versus $50.9 million for the same period last year. Revenue for the third quarter increased 11% to $1.4 billion, compared with $1.26 billion for the comparable period of the prior year.

Litton Industries, Inc. recently reported results for the third fiscal quarter ended April 30, 2000. Diluted earnings per share rose 23% to $1.35 for the third quarter, compared with diluted earnings per share of $1.10 for the third quarter of fiscal 1999. Excluding a one-time gain on sale of businesses, third quarter diluted earnings per share increased 21% to $1.33. Net earnings for the third quarter were $61.8 million versus $50.9 million for the same period last year. Revenue for the third quarter increased 11% to $1.4 billion, compared with $1.26 billion for the comparable period of the prior year. Revenue for the first nine months of fiscal 2000 was $4.1 billion, a 15% increase over the first nine months of fiscal 1999.

In a move which effectively creates a defense and marine naval construction giant, Northrop Grumman Corp. and Litton Industries jointly announced late last month that they have signed a definitive agreement under which Northrop Grumman will acquire for cash all of the outstanding shares of Litton for $80 per common share and $35 per Series B Preferred share. The transaction is valued at approximately $5.1 billion, which includes the assumption of Litton's $1.3 billion in net debt. Litton is a leading supplier of advanced electronics and information systems to the U.S. government and international customers and is the premier designer and builder of non-nuclear surface combatant ships for U.S. and foreign navies.

Northrop Grumman Corp. and Litton Industries have jointly announced that they have signed a definitive agreement under which Northrop Grumman will acquire for cash all of the outstanding shares of Litton for $80 per common share and $35 per Series B Preferred share. The transaction is valued at approximately $5.1 billion, which includes the assumption of Litton's $1.3 billion in net debt. Northrop Grumman's and Litton's boards of directors have unanimously approved the transaction. Following the close of the transaction, it is Northrop Grumman's intention to raise additional capital through a stock offering. earnings per share in 2001. Northrop Grumman said it expects the acquisition to be double-digit accretive to both economic and GAAP earnings per share in 2002 and beyond.

Litton Industries, Inc. announced the completion of its acquisition of Avondale Industries, Inc. for $39.50 per share in an all cash transaction valued at approximately $529 million in the aggregate. Avondale, based in New Orleans, designs, builds and overhauls ships for the U.S. Navy, the USCG and commercial customers. Avondale had revenues of approximately $750 million for the year ended December 31, 1998, and employs almost 6,000 people. "We are delighted to welcome Avondale and its employees to Litton," said Michael R. Brown, Litton chairman, president and CEO. "The merger with Avondale significantly broadens Litton's market coverage in both military surface combatants and commercial ships.

The consolidation of marine industry assets in the United States has taken a rather unique twist, as Litton Industrys – with a strategy of becoming the marine industry's full-service leader – announced the formation of a new company, the Litton Ship Systems Full Service Center (LSS FSC). Litton, which for years has been amassing an impressive arsenal of marine equipment builders and suppliers from around the globe, formed LSS FSC to operate as a stand-alone business within the existing Litton Ship Systems (LSS) organization, with headquarters in Pascagoula, Miss. LSS FSC will provide its customers a full range of research and development, design analysis and life cycle support services.

The consolidation of marine industry assets in the U.S. has taken a rather unique twist, as Litton Industries — with a strategy of becoming the marine industry's full-service leader — announced the formation of a new company, the Litton Ship Systems Full Service Center (LSS FSC). Litton, which for years has been amassing an impressive arsenal of marine equipment builders and suppliers from around the globe, formed LSS FSC to operate as a stand-alone business within the existing Litton Ship Systems (LSS) organization, with headquarters in Pascagoula, Miss. LSS FSC will provide its customers a full range of research and development, design analysis and life cycle support services.

WASHINGTON – Along with thousands of active-duty and National Guard troops, several commercial passenger ships are also reporting to duty to support hurricane-relief efforts along the Gulf Coast, U.S. Northern Command officials announced. The ships, contracted by the Navy's Military Sealift Command, are part of the Federal Emergency Management Agency's massive response to provide relief for displaced victims, officials said. The command awarded contracts for four ships to provide interim housing to those displaced by the hurricane and possibly relief workers, as well. Three of the ships, Sensation, Holiday and Ecstasy, belong to Carnival Cruise Lines and the fourth, MV Scotia Prince, to Scotia Prince Cruises, officials said. FEMA Director Michael D.