Previous Statements by LLL
» L-3 Communications Holdings Inc. Q1 2010 Earnings Conference Call
» L-3 Communications Holdings Q4 2009 Earnings Call Transcript
» L-3 Communications Holdings, Inc. Q3 Earnings Call Transcript
I will now turn the call over to Mike Strianese. Mike, please go ahead.Michael Strianese Thanks, Eric, and good morning, everyone. Thanks for joining us for our second quarter earnings call. Overall, we had a good second quarter underscored by orders of approximately $4.1 billion. That's up 22% over the 2009 second quarter resulting in a book-to-bill ratio of 1.03, and our backlog grew to over $11 billion at the end of the quarter, about $11.1 billion. Our earnings per share were $1.95. That's up 7% compared to the 2009 second quarter, when you exclude the $0.09 per share charge we took for our successful debt refinancing, which we did back in May. Operating margins and cash flow, we were particularly happy with, which were very strong. Overall, sales were up about 1% to $4 billion, with C3ISR continuing to do very well with significant growth. JCA [Joint Cargo Aircraft] sales also grew. And together, these items increased -- sales increases rather, offset some of the declines we had in other areas of the business. Some of the more significant awards in the second quarter, several of which were competitive included the U.S. Army's C-12 logistics support contract, the space mission data module and the Apache data link. Also, we had numerous follow-on orders on several important legacy programs, including the JCA, UAV Communications Systems, a very strong growth in the EO/IR turrets, Rover ManPacks, our Compass Call program, Afghan training, law enforcement professionals, the Whole Body Imaging systems for airport security, Contract Field Teams, Rivet Joint, the P-3s, Flight School XXI and continuing upticks in our helicopter cabin assemblies. In terms of major recompetes, we currently have no bids outstanding for major recompetes that will affect 2010 sales. On significant programs, on June 3, we received the fiscal '10 order for eight additional JCA aircrafts bringing the orders to date to 21 aircraft. That order was about $230 million. We expect another eight in fiscal '11. Total U.S. Air Force buy is expected to be 38 aircraft, with the final nine coming in fiscal '12. We expect to deliver four JCAs in 2010, of which two have already been made, bringing the total deliveries now to six airplanes.
We see continued interest, the National Guard is still projecting the need for additional aircraft, so there is a potential for plus ups in fiscal '12. We also feel strongly that if the JCA finds his way over to Afghanistan and gets put into the theater, that there will be continued interest once it gets to perform in the line of duty. There are also several foreign military sales opportunities for JCA, some of which are slipping out a little bit due to government fiscal pressures. But again, the program still has a lot of interest.For Project Liberty, as you recall, we're modifying 37 MC-12W aircraft for the U.S. Air Force. We have delivered 35 aircraft to date on time, on budget and our deliveries are surpassing the contractual schedule. We expect to deliver the final two aircrafts by October. We look forward to continuing to apply L-3's experience to other small aircraft ISR [Intelligence, Surveillance and Reconnaissance] applications, both within the U.S. DoD and with our international customers. For example, we are currently expecting the Air Force to expand the Liberty fleet by five aircraft sometime later this year for the fiscal '10 OCO [overseas contingency operations] request. We're also currently competing as a prime for the U.S. Army's EMARSS program. With regard to the 35 aircraft delivered, they're performing very well. We're told with over 98% mission availability, not one has been lost and we're very proud of that accomplishment, as are the Air Force folks that we're involved with this procurement, so it's been a very successful program. I mentioned EMARSS, and as you know, the Army is currently proceeding with a competitive procurement for the Enhanced Medium-Altitude Reconnaissance and Surveillance System to focus on a regular warfare missions, which includes SIGINT, COMINT, electro-optical, infrared sensors and communications equipment. EMARSS is the replacement for the canceled ACS, Aerial Common Sensor program, and the possible replacement for the aging Guardrail fleet. EMARSS is expected to be a $1.5 billion five-year program of record. Read the rest of this transcript for free on seekingalpha.com