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Actionable news in GD: GENERAL DYNAMICS CORPORATION,

General Dynamics: 2941 Fairview Park Drive

The following excerpt is from the company's SEC filing.

Suite 100

Falls Church, VA 22042-4513

www.generaldynamics.com

April 27, 2016

Contact: Lucy Ryan

Tel: 703 876 3631

lryan@generaldynamics.com

General Dynamics Reports First-Quarter 2016 Results

Diluted earnings per share from continuing operations up 9.3% to $2.34

Operating margin of 13.6%, a 40 basis-point improvement

Operating earnings up 2.5% to $1.05 billion

Earnings from continuing operations up 2% to $730 million

FALLS CHURCH, Va.

- General Dynamics (NYSE: GD) today reported first-quarter 2016 earnings from continuing op erations of $730 million, a 2 percent increase over first-quarter 2015, on revenue of $7.7 billion. Diluted earnings per share from continuing operations were $2.34 compared to $2.14 in the year-ago quarter, a 9.3 percent increase.

“General Dynamics delivered a strong first quarter, with all four groups contributing to our outstanding operating performance,” said Phebe N. Novakovic, chairman and chief executive officer of General Dynamics. “We generated positive operating leverage and achieved the sixth straight quarter with operating earnings of more than one billion dollars.”

Margin

Company-wide operating margin for the first quarter of 2016 was 13.6 percent, a 40 basis-point increase when compared to 13.2 percent in first-quarter 2015. Three of the company's four business groups expanded margins over the year-ago period.

Net cash provided by operating activities in the quarter totaled $439 million. Free cash flow from operations, defined as net cash provided by operating activities less capital expenditures, was $374 million.

Capital Deployment

The company repurchased 7.8 million of its outstanding shares in the first quarter. In addition, in March, the board of directors increased the company’s quarterly dividend by 10.1 percent to $0.76 per share, representing the company’s 19th consecutive annual dividend increase.

- more -

Backlog

General Dynamics’ total backlog at the end of first-quarter 2016 was $64.7 billion. There was order activity across the Gulfstream product portfolio and strong demand for defense products, which resulted in a book-to-bill ratio (orders divided by revenue) of one-to-one in the Combat Systems group and greater than one-to-one in the Information Systems and Technology group. The estimated potential contract value, representing management’s estimate of value in unfunded indefinite delivery, indefinite quantity (IDIQ) contracts and unexercised options, was $24.5 billion. Total potential contract value, the sum of all backlog components, was $89.2 billion at the end of the quarter.

About General Dynamics

Headquartered in Falls Church, Virginia, General Dynamics is a global aerospace and defense company that offers a broad portfolio of products and services in business aviation; combat vehicles, weapons systems and munitions; C4ISR and IT solutions; and shipbuilding. The company’s revenues in 2015 were $31.5 billion. More information is available at

Certain statements made in this press release, including any statements as to future results of operations and financial projections, may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements are based on management’s expectations, estimates, projections and assumptions. These statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Therefore, actual future results and trends may differ materially from what is forecast in forward-looking statements due to a variety of factors. Additional information regarding these factors is contained in the company’s filings with the Securities and Exchange Commission, including, without limitation, its Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q.

All forward-looking statements speak only as of the date they were made. The company does not undertake any obligation to update or publicly release any revisions to any forward-looking statements to reflect events, circumstances or changes in expectations after the date of this press release.

WEBCAST INFORMATION:

General Dynamics will webcast its first-quarter securities analyst conference call at 9 a.m. EDT on Wednesday, April 27, 2016. The webcast will be a listen-only audio event, available at www.generaldynamics.com.

An on-demand replay of the webcast will be available by 12 p.m. on April 27 and will continue for 12 months. To hear a recording of the conference call by telephone, please call 855-859-2056 (international: 404-537-3406); passcode 89290991. The phone replay will be available from 3 p.m. April 27 through May 3, 2016.

EXHIBIT A

CONSOLIDATED STATEMENTS OF EARNINGS - (UNAUDITED)

DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS

First Quarter

Variance

Revenue

Operating costs and expenses

Interest, net

Other, net

Earnings from continuing operations before income tax

Provision for income tax, net

Discontinued operations

Net earnings

Earnings per share—basic

Continuing operations

Basic weighted average shares outstanding

Earnings per share—diluted

Diluted weighted average shares outstanding

In the first quarter of 2016, we recognized a final adjustment to the loss on the sale of our axle business in the Combat Systems group. The business was sold in 2015.

EXHIBIT B

REVENUE AND OPERATING EARNINGS BY SEGMENT - (UNAUDITED)

Revenue:

Aerospace

Marine Systems

Operating earnings:

Corporate

Operating margin:

EXHIBIT C

CONSOLIDATED BALANCE SHEETS

(Unaudited)

December 31, 2015

ASSETS

Current assets:

Cash and equivalents

Accounts receivable

Contracts in process

Inventories

Other current assets

Total current assets

14,188

14,571

Noncurrent assets:

Property, plant and equipment, net

Intangible assets, net

Goodwill

11,595

11,443

Other assets

Total noncurrent assets

17,514

17,426

Total assets

31,702

31,997

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Short-term debt and current portion of long-term debt

Accounts payable

Customer advances and deposits

Other current liabilities

Total current liabilities

12,423

12,445

Noncurrent liabilities:

Long-term debt

Other liabilities

Total noncurrent liabilities

Shareholders' equity:

Common stock

Surplus

Retained earnings

23,687

23,204

Treasury stock

(13,386

(12,392

Accumulated other comprehensive loss

(2,941

(3,286

Total shareholders' equity

10,582

10,738

Total liabilities and shareholders' equity

EXHIBIT D

CONSOLIDATED STATEMENTS OF CASH FLOWS - (UNAUDITED)

Three Months Ended

April 5, 2015

Cash flows from operating activities—continuing operations:

Adjustments to reconcile net earnings to net cash provided by operating activities:

Depreciation of property, plant and equipment

Amortization of intangible assets

Equity-based compensation expense

Excess tax benefit from equity-based compensation

Deferred income tax provision

(Increase) decrease in assets, net of effects of business acquisitions:

Increase (decrease) in liabilities, net of effects of business acquisitions:

Income taxes payable

Cash flows from investing activities:

Capital expenditures

Maturities of held-to-maturity securities

Net cash (used) provided by investing activities

Cash flows from financing activities:

Purchases of common stock

(1,026

Dividends paid

Proceeds from stock option exercises

Repayment of fixed-rate notes

Net cash used by financing activities

(1,193

(1,209

Net cash used by discontinued operations

Net (decrease) increase in cash and equivalents

Cash and equivalents at beginning of period

Cash and equivalents at end of period

EXHIBIT E

PRELIMINARY FINANCIAL INFORMATION - (UNAUDITED)

DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS

First Quarter 2016

First Quarter 2015

Other Financial Information (a):

Debt-to-equity (b)

Debt-to-capital (c)

Book value per share (d)

Total taxes paid

Company-sponsored research and development (e)

Shares outstanding

305,646,967

328,732,777

Non-GAAP Financial Measures:

Free cash flow from operations:

Free cash flow from operations (f)

Prior period information has been restated to reflect the reclassification of debt issuance costs from other assets to debt in accordance with ASU 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs, which we adopted in the fourth quarter of 2015.

Debt-to-equity ratio is calculated as total debt divided by total equity as of the end of the period.

Debt-to-capital ratio is calculated as total debt divided by the sum of total debt plus total equity as of the end of the period.

Book value per share is calculated as total equity divided by total outstanding shares as of the end of the period.

Includes independent research and development and Aerospace product-development costs.

We believe free cash flow from operations is a useful measure for investors because it portrays our ability to generate cash from our businesses for purposes such as repaying maturing debt, funding business acquisitions, repurchasing our common stock and paying dividends. We use free cash flow from operations to assess the quality of our earnings and as a performance measure in evaluating management. The most directly comparable GAAP measure to free cash flow from operations is net cash provided by operating activities.

EXHIBIT F

BACKLOG - (UNAUDITED)

Funded

Unfunded

Estimated

Potential

Contract Value*

Total Potential

12,465

12,612

14,980

18,260

18,825

23,784

15,146

24,579

16,547

23,864

25,863

54,714

10,020

64,734

24,472

89,206

Fourth Quarter 2015

13,292

13,398

15,835

18,398

18,995

24,054

14,702

23,284

13,266

11,879

25,145

27,408

51,783

14,337

66,120

24,461

90,581

12,947

13,094

15,793

18,942

19,404

24,863

15,296

23,953

17,248

12,138

29,386

31,529

55,979

14,562

70,541

25,597

96,138

The estimated potential contract value represents management's estimate of our future contract value under unfunded indefinite delivery, indefinite quantity (IDIQ) contracts and unexercised options associated with existing firm contracts, including options to purchase new aircraft and long-term agreements with fleet customers, as applicable. Because the value in the unfunded IDIQ arrangements is subject to the customer's future exercise of an indeterminate quantity of orders, we recognize these contracts in backlog only when they are funded. Unexercised options are recognized in backlog when the customer exercises the option and establishes a firm order.

EXHIBIT G

QUARTER 2016 SIGNIFICANT ORDERS (UNAUDITED)

We received the following significant orders during the

quarter of 2016:

$405 from the Swiss government to upgrade Duro tactical vehicles through 2022.

$180 from the U.S. Army for spare parts and inventory management and support services for the Stryker family of vehicles.

$60 from the Army to design, develop and produce eight prototype Stryker vehicles with an integrated 30-millimeter gun system.

$310 for several space payloads.

$170 for new hardware, software and equipment to upgrade the United Kingdom Ministry of Defence's Bowman tactical communication system.

$160 from the Army for additional equipment for the Warfighter Information Network-Tactical (WIN-T) Increment 2 program.

$155 from the National Geospatial-Intelligence Agency (NGA) to consolidate NGA's operations from six locations to one stand-alone location at New Campus East (NCE).

$140 from the Army for ruggedized computing equipment under the CHS-4 program.

$95 for combat and seaframe control systems on an Independence-variant Littoral Combat Ship (LCS) for the U.S. Navy.

$155 from the Navy for the planning and execution of depot-level maintenance, alterations and modifications to the USS Essex (LHD-2).

$140 from the Navy for lead yard and design services for the Virginia-class submarine program.

$80 from the Navy for Advanced Nuclear Plant Studies (ANPS) in support of the Ohio-class submarine replacement program.

EXHIBIT H

AEROSPACE SUPPLEMENTAL DATA - (UNAUDITED)

Gulfstream Green Deliveries (units):

Large-cabin aircraft

Mid-cabin aircraft

Gulfstream Outfitted Deliveries (units):

Pre-owned Deliveries (units):

The above information was disclosed in a filing to the SEC. To see the filing, click here.

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