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Falls Church, Virginia 22042-4513
Contact: Rob Doolittle
Tel: (703) 876 - 3199
General Dynamics Reports Strong Performance for Fourth Quarter 2010
FALLS CHURCH, Va. –
General Dynamics (NYSE: GD) today reported 2010 fourth-quarter earnings from continuing operations of $729 million, or $1.91 per share on a fully diluted basis, compared to 2009 fourth-quarter earnings from continuing operations of $618 million, or $1.58 per share fully diluted. Full-year 2010 earnings from continuing operations were $2.63 billion, or $6.82 per share on a fully diluted basis, compared to $2.41 billion and $6.20 per share, respectively, for 2009. Revenue was $8.6 billion in the fourth quarter and $32.5 billion for the full year.
Company-wide operating margins increased to 12.5 percent for the fourth quarter, led by a 250-basis-point improvement in the company’s Aerospace sector. Margins also increased in the Marine Systems and Information Systems and Technology businesses and remained steady in Combat Systems.
Net cash provided by operating activities totaled $1.42 billion in the fourth quarter and $2.99 billion for the full year. Free cash flow from operations, defined as net cash provided by operating activities less capital expenditures, was $1.27 billion in the quarter and $2.62 billion for the year. Free cash flow significantly exceeded earnings from continuing operations in the fourth quarter and was equal to earnings from continuing operations for the year.
The company’s total backlog was $59.6 billion at the end of the year. The Aerospace group booked its largest order intake of the year, resulting in a $244 million increase in backlog over the third quarter. Significant domestic and international orders for vehicle production and improvements, ongoing ship design and development efforts, and combat mission-system integration work underscored the ongoing demand for many of the company’s key product and service offerings.
Estimated potential contract value, representing management’s estimate of the value of unfunded indefinite delivery, indefinite quantity (IDIQ) contracts and unexercised contract options, increased to $21.8 billion at year-end 2010. Total potential contract value, the sum of all backlog components, was $81.3 billion at the end of the year.
“2010 was a good year for General Dynamics, marked by outstanding earnings growth, efficient cash conversion and focused execution across the company,” said Jay L. Johnson, chairman and chief executive officer. “Our businesses are well-positioned as we continue to provide mission-essential capabilities to our defense customers and capitalize on accelerating global business-jet demand.”
“Looking ahead, we expect 2011 earnings to be in the range of $7.00 to $7.10 per share, fully diluted,” Johnson said.
General Dynamics, headquartered in Falls Church, Virginia, employs approximately 90,000 people worldwide. The company is a market leader in business aviation; land and expeditionary combat systems, armaments and munitions; shipbuilding and marine systems; and information systems and technologies. More information about the company is available on the Internet at www.generaldynamics.com.
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. 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 are 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 fourth-quarter securities-analyst conference call at 11:30 a.m. Eastern Time on Wednesday, January 26, 2011.
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 2:30 p.m. January 26 and will continue for 12 months.
To hear a recording of the conference call by telephone, please call 888-286-8010 (international: 617-801-6888); passcode 82244490. The phone replay will be available from 2:30 p.m. January 26, until midnight February 2, 2011.
DOLLARS IN MILLIONS
We received the following significant contract orders during the fourth quarter of 2010:Combat Systems
•Approximately $350 from the U.S. Marine Corps under the mine-resistant, ambush-protected (MRAP) vehicle program for upgrade kits for previously delivered vehicles.
•Approximately $140 from the Army under the Foreign Military Sales program to produce Light Armored Vehicles (LAVs) for an international customer.
•Approximately $65 from the U.S. Navy for engineering and design services for the Ohio Replacement Program (ORP).
•Approximately $60 from the Navy to operate and maintain large, medium-speed, roll-on/roll-off (LMSR) vessels.
•Approximately $60 from the Navy for engineering, design and technical services for the DDG-1000 destroyer program.
•Approximately $35 from the Navy for the development of advanced submarine technologies. The contract has a maximum potential value of over $710 over five years.
Information Systems and Technology
•Approximately $150 from Austal USA for design, integration and testing of combat and seaframe control systems for one Littoral Combat Ship (LCS) along with options for nine additional ships, which are expected to be exercised over the next five years.
•Approximately $80 from the Army for information technology (IT) infrastructure support for the Walter Reed National Military Medical Center.
•Approximately $60 under the Warfighter Field Operations Customer Support (FOCUS) program to provide life-cycle contractor support services.
•Approximately $55 in orders for networking communications products and support under the Network-Centric Solutions (NETCENTS) program, bringing the total value in backlog to approximately $235.
•An IDIQ contract from the Army under the Warfighter Information Network-Tactical (WIN-T) program for low-rate initial production of Increment 2 equipment. The group expects to receive orders under the contract beginning in the first quarter of 2011.
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