- Revenue: $926 million for the fourth quarter and $2.8
billion for the year
- Net Earnings: $74 million for the fourth quarter and
$168 million for the year
- Adjusted EBITDA: $131 million for the fourth quarter and
$324 million for the year
- Diluted EPS: $0.28 for the fourth quarter and $0.64 for
the year
- Adjusted Diluted EPS: $0.31 for the fourth quarter and
$0.73 for the year
- Bookings: $1.0 billion for the fourth quarter and $3.5
billion for the year (book-to-bill ratio of 1.2)
- Backlog: A new company record of $7.8 billion, up 82%
from prior year
- Initiates 2024 guidance
- Commences a three-year, approximately $120 million net
capital investment to build a state-of-the-art naval propulsion
manufacturing and test facility near Charleston, South
Carolina
- Confirms March 14, 2024 at Nasdaq MarketSite in New York
City for Investor Day
Leonardo DRS, Inc. (Nasdaq: DRS), a leading provider of advanced
defense technologies, today reported financial results for the
fourth quarter and full year ended December 31, 2023.
CEO Commentary
“We delivered solid 2023 financial results, which continue to
demonstrate the strength of our portfolio and the clear customer
demand for our technologies. I am incredibly proud of the
tremendous effort from the entire team to execute for our
customers, drive innovation and deliver excellent financial
performance for shareholders. In 2024, we are maintaining steadfast
focus on increasing long-term shareholder value by delivering
consistent revenue growth, margin expansion and solid free cash
generation,” said Bill Lynn, Chairman and CEO of Leonardo DRS.
Summary Financial Results
(In millions, except per share
amounts)
Fourth Quarter
Full Year
2023
2022
Change
2023
2022
Change
Revenues
$926
$820
13%
$2,826
$2,693
5%
Net Earnings
$74
$65
14%
$168
$405
(59%)
Diluted WASO
265.700
229.045
264.175
215.133
Diluted Earnings Per Share (EPS)
$0.28
$0.28
—%
$0.64
$1.88
(66%)
Non-GAAP
Financial Measures (1)
Adjusted EBITDA
$131
$120
9%
$324
$318
2%
Adjusted EBITDA Margin
14.1%
14.7%
(60) bps
11.5%
11.8%
(30) bps
Adjusted Net Earnings
$83
$81
2%
$194
$179
8%
Adjusted Diluted EPS
$0.31
$0.35
(11%)
$0.73
$0.83
(12%)
(1) The company reports its financials in
accordance with U.S. generally accepted accounting principles
(“GAAP”). Information about the company’s use of non-GAAP financial
measures, including a reconciliation of the non-GAAP financial
measures to the most comparable financial measures calculated and
presented in accordance with U.S. GAAP, is provided under "Non-GAAP
Financial Measures."
Revenue growth for the fourth quarter was up 13% compared to
2022. Quarterly revenues benefited from strong contribution from
multi-mission advanced sensing as well as naval and ground network
computing programs.
For the full year, total revenue growth was 5% compared to 2022
and reflects a several point net divestiture headwind. Growth
drivers for the year were broad based and included increases on
programs related to electric power and propulsion, multi-mission
advanced sensing, specifically programs utilizing the company’s
capabilities in tactical radars, electronic warfare, tactical
communications and lasers as well as naval network computing.
Higher volume drove year-over-year adjusted EBITDA growth in the
fourth quarter. However, higher volumes were primarily offset by
higher general and administrative expenses from increased public
company costs and investments in research and development resulting
in adjusted EBITDA margin contraction in Q4.
For the full year, higher volume resulted in adjusted EBITDA
growth compared to 2022. However, inflationary impacts and
increased general and administrative expenses (from higher public
company costs and investments in research and development) were
headwinds that factored into the adjusted EBITDA margin decline for
the year.
Strong operating performance translated to net earnings growth
of 14% compared to Q4 2022. The full year decrease in 2023 is
primarily attributable to the $275 million one-time net (after tax)
gain related to the divestitures of the Global Enterprise Solutions
(GES) business and the Advanced Acoustics Concepts Joint Venture
recorded in 2022.
Quarterly adjusted net earnings growth was 2%, which reflects a
higher tax burden and increased interest expense compared to Q4
2022. For the year, adjusted net earnings increased 8% due to
strong core operational performance aided by lower taxes which were
offset by higher depreciation.
The increased share count from our all-stock merger with RADA
impacted both diluted EPS and adjusted diluted EPS compares for the
quarter and full year.
Cash Flow and Balance Sheet
Net cash flow generated by operating activities was $515 million
for the fourth quarter and $205 million for the full year.
Consistent with the historical patterns of the business, the
company generated exceptional free cash flow in the fourth quarter
of $494 million and full year free cash flow was $159 million.
At year end, the balance sheet had $467 million of cash and $214
million of outstanding borrowings under the company’s credit
facility, which provides the company with sufficient financial
capacity to deploy capital for growth, while maintaining a healthy
balance sheet.
Bookings and Backlog
(Dollars in millions)
Fourth Quarter
Full Year
2023
2022
2023
2022
Bookings
$1,014
$852
$3,516
$3,156
Book-to-Bill
1.1x
1.0x
1.2x
1.2x
Backlog
$7,751
$4,269
$7,751
$4,269
The company received $1.0 billion in new funded awards during
the fourth quarter and $3.5 billion for the full year. Strong
customer demand for Leonardo DRS solutions in naval and ground
network computing, electric power and propulsion and multi-mission
advanced sensing drove bookings in the fourth quarter and the full
year. Healthy, broad based demand throughout 2023 combined with the
remaining seven boat contract for our Columbia Class electric power
and propulsion system valued at over $3 billion resulted in a
backlog increase of 82% to a record $7.8 billion.
Segment Results
Advanced Sensing and Computing (“ASC”) Segment
(Dollars in millions)
Fourth Quarter
Full Year
2023
2022
Change
2023
2022
Change
Revenues
$605
$485
25
%
$1,831
$1,733
6
%
Adjusted EBITDA
$94
$74
27
%
$215
$199
8
%
Adjusted EBITDA Margin
15.5
%
15.3
%
20 bps
11.7
%
11.5
%
20 bps
Bookings
$614
$402
$2,307
$1,975
Book-to-Bill
1.0x
0.8x
1.3x
1.1x
The increased demand for naval and ground network computing as
well as multi-domain infrared sensing systems drove bookings for
ASC in the fourth quarter and 2023.
ASC revenues were up for the fourth quarter and the full year.
Quarterly and full year revenues were bolstered by growth on
advanced sensing programs related to tactical radars, tactical
communications, lasers and electronic warfare as well naval network
computing.
Adjusted EBITDA and adjusted EBITDA margins increased primarily
due to higher volume and better mix for the fourth quarter and full
year.
Integrated Mission Systems (“IMS”) Segment
(Dollars in millions)
Fourth Quarter
Full Year
2023
2022
Change
2023
2022
Change
Revenues
$329
$349
(6
%)
$1,021
$983
4
%
Adjusted EBITDA
$37
$46
(20
%)
$109
$119
(8
%)
Adjusted EBITDA Margin
11.2
%
13.2
%
(200) bps
10.7
%
12.1
%
(140) bps
Bookings
$400
$450
$1,209
$1,181
Book-to-Bill
1.2x
1.3x
1.2x
1.2x
IMS bookings for the fourth quarter and full year were primarily
driven by strong demand for the company’s electric power and
propulsion technologies.
Program timing on ground systems integration efforts drove the
quarterly revenue decline. For the full year, strong contribution
from electric power and propulsion programs drove growth.
Adjusted EBITDA and adjusted EBITDA margin declined in the
fourth quarter due to lower volume and less favorable mix. For the
full year, adjusted EBITDA was down and adjusted EBITDA margins
contracted due to unfavorable mix and higher general and
administrative costs.
2024 Guidance
Leonardo DRS is initiating 2024 guidance as specified in the
table below:
Measure
2024
Guidance
2023
Results
Revenue
$2,925 million - $3,025
million
$2,826 million
Adjusted EBITDA
$365 million - $390 million
$324 million
Tax Rate
22.5%
12.5%
Diluted Shares Outstanding
268.0 million
264.2 million
Adjusted Diluted EPS
$0.74 - $0.82
$0.73
Additionally, the company expects the new coastal facility
investment to increase capital expenditures for 2024 and reduce
free cash flow conversion of adjusted net earnings to approximately
80% for the year.
The company does not provide a reconciliation of forward-looking
adjusted EBITDA and adjusted diluted EPS due to the inherent
difficulty in forecasting and quantifying the adjustments that are
necessary to calculate such non-GAAP measures without unreasonable
effort. Material changes to any one of these items could have a
significant effect on future GAAP results.
Conference Call
Leonardo DRS management will host a conference call beginning at
10:00 a.m. ET on February 27, 2024 to discuss the financial results
for its fourth quarter and full year 2023.
A live audio broadcast of the conference call along with a
supplemental presentation will be available to the public through
links on the Leonardo DRS Investor Relations website
(https://investors.leonardodrs.com).
A replay of the conference call will be available on the
Leonardo DRS website approximately 2 hours after the conclusion of
the conference call.
Investor Day Reminder
As previously announced, Leonardo DRS management will host its
investor day on March 14, 2024 beginning at 9:00 a.m. ET to discuss
the company’s differentiated portfolio, strategic priorities,
operations and growth outlook. Participants will have an
opportunity to engage management during a question and answer
session as well as further discuss the company at lunch following
the formal presentation.
If you have not already done so, analysts and institutional
investors interested in attending should contact Steve Vather at
Stephen.Vather@drs.com to preregister. Please note that
preregistration is required for in-person attendance.
The live audio broadcast as well as a replay of the investor day
with corresponding press release and supplemental information will
be available on the company’s investor relations website.
About Leonardo DRS
Headquartered in Arlington, VA, Leonardo DRS, Inc. is an
innovative and agile provider of advanced defense technology to
U.S. national security customers and allies around the world. We
specialize in the design, development and manufacture of advanced
sensing, network computing, force protection, and electric power
and propulsion, and other leading mission-critical technologies.
Our innovative people are leading the way in developing disruptive
technologies for autonomous, dynamic, interconnected, and
multi-domain capabilities to defend against new and emerging
threats. For more information and to learn more about our full
range of capabilities, visit www.LeonardoDRS.com.
Forward-Looking Statements
In this press release, when using the terms the “company”,
“DRS”, “we”, “us” and “our,” unless otherwise indicated or the
context otherwise requires, we are referring to Leonardo DRS, Inc.
This press release contains forward-looking statements and
cautionary statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Some of the forward-looking
statements can be identified by the use of forward-looking terms
such as “believes,” “expects,” “may,” “will,” “shall,” “should,”
“would,” “could,” “seeks,” “aims,” “strives,” “targets,”
“projects,” “guidance,” “intends,” “plans,” “estimates,”
“anticipates” or other comparable terms. Forward-looking statements
include, without limitation, all matters that are not historical
facts. They appear in a number of places throughout this press
release and include, without limitation, statements regarding our
intentions, beliefs, assumptions or current expectations
concerning, among other things, financial goals, financial
position, results of operations, cash flows, prospects, strategies
or expectations, and the impact of prevailing economic
conditions.
Forward-looking statements are subject to known and unknown
risks and uncertainties, many of which may be beyond our control.
We caution you that forward-looking statements are not guarantees
of future performance or outcomes and that actual performance and
outcomes may differ materially from those made in or suggested by
the forward-looking statements contained in this press release. In
addition, even if future performance and outcomes are consistent
with the forward-looking statements contained in this press
release, those results or developments may not be indicative of
results or developments in subsequent periods. New factors emerge
from time to time that may cause our business not to develop as we
expect, and it is not possible for us to predict all of them.
Factors that could cause actual results and outcomes to differ from
those reflected in forward-looking statements include, without
limitation: disruptions or deteriorations in our relationship with
the relevant agencies of the U.S. government, as well as any
failure to pass routine audits or otherwise comply with
governmental requirements including those related to security
clearance or procurement rules, including the False Claims Act;
significant delays or reductions in appropriations for our programs
and changes in U.S. government priorities and spending levels more
broadly; any failure to comply with the proxy agreement with the
U.S. Department of Defense; our relationships with other industry
participants, including any contractual disputes or the inability
of our key suppliers to timely deliver our components, parts or
services; failure to properly contain a global pandemic in a timely
manner could materially affect how we and our business partners
operate; the effect of inflation on our supply chain and/or our
labor costs; our mix of fixed-price, cost-plus and
time-and-material type contracts and any resulting impact on our
cash flows due to cost overruns; failure to properly comply with
various covenants of the agreements governing our debt could
negatively impact our business; our dependence on U.S. government
contracts, which often are only partially funded and are subject to
immediate termination, some of which are classified, and the
concentration of our customer base in the U.S. defense industry;
our use of estimates in pricing and accounting for many of our
programs that are inherently uncertain and which may not prove to
be accurate; our ability to realize the full value of our backlog;
our ability to predict future capital needs or to obtain additional
financing if we need it; our ability to respond to the rapid
technological changes in the markets in which we compete; the
effect of global and regional economic downturns and rising
interest rates; our ability to meet the requirements of being a
public company; our ability to maintain an effective system of
internal control over financial reporting; our inability to
appropriately manage our inventory; our inability to fully realize
the value of our total estimated contract value or bookings; our
ability to compete efficiently, including due to U.S. government
organizational conflict of interest rules which may limit new
contract opportunities or require us to wind down existing
contracts; our relationships with other industry participants,
including any contractual disputes or the inability of our key
suppliers to timely deliver our components, parts or services;
preferences for set-asides for minority-owned, small and small
disadvantaged businesses could impact our ability to be a prime
contractor; any failure to meet our contractual obligations
including due to potential impacts to our business from supply
chain risks, such as longer lead times and shortages of electronics
and other components; any security breach, including any
cyber-attack, cyber intrusion, insider threat, or other significant
disruption of our IT networks and related systems, or those of our
customers, suppliers, vendors, subcontractors, partners, or other
third parties, as well as any act of terrorism or other threat to
our physical security and personnel; our ability to fully exploit
or obtain patents or other intellectual property protections
necessary to secure our proprietary technology, including our
ability to avoid infringing upon the intellectual property of third
parties or prevent third parties from infringing upon our own
intellectual property; the conduct of our employees, agents,
affiliates, subcontractors, suppliers, business partners or joint
ventures in which we participate which may impact our reputation
and ability to do business; our compliance with environmental laws
and regulations, and any environmental liabilities that may affect
our reputation or financial position; the outcome of litigation,
arbitration, investigations, claims, disputes, enforcement actions
and other legal proceedings in which we are involved; various
geopolitical and economic factors, laws and regulations including
the Foreign Corrupt Practices Act, the Export Control Act, the
International Traffic in Arms Regulations, the Export
Administration Regulations, and those that we are exposed to as a
result of our international business, including their impact on our
ability to access certain raw materials; geopolitical conflicts,
including the war in Israel have the potential to evolve quickly
creating uncertainty in the world and broader Middle East region
specifically, along with the potential for disruptions to our
Israeli operations including but not limited to workforce calls for
duty, transportation and other logistical impacts and reduced
customer confidence; our ability to obtain export licenses
necessary to conduct certain operations abroad, including any
attempts by Congress to prevent proposed sales to certain foreign
governments; our ability to attract and retain technical and other
key personnel; the occurrence of prolonged work stoppages; the
unavailability or inadequacy of our insurance coverage, customer
indemnifications or other liability protections to cover all of our
significant risks or to pay for material losses we incur; future
changes in U.S. tax laws and regulations or interpretations
thereof; certain limitations on our ability to use our net
operating losses to offset future taxable income; termination of
our leases or our inability to renew our leases on acceptable
terms; changes in estimates used in accounting for our pension
plans, including in respect of the funding status thereof; changes
in future business or other market conditions that could cause
business investments and/or recorded goodwill or other long-term
assets to become impaired; adverse consequences from any
acquisitions such as operating difficulties, dilution and other
harmful consequences or any modification, delay or prevention of
any future acquisition or investment activity by the Committee on
Foreign Investment in the United States; natural disasters or other
significant disruptions; or any conflict of interest that may arise
because Leonardo US Holding, LLC, our majority stockholder, or
Leonardo S.p.A., our ultimate majority stockholder, may have
interests that are different from, or conflict with, those of our
other stockholders, including as a result of any ongoing business
relationships Leonardo S.p.A. may have with us, and their
significant ownership in us may discourage change of control
transactions (our amended and restated certificate of incorporation
provides that we waive any interest or expectancy in corporate
opportunities presented to Leonardo S.p.A); or our obligations to
provide certain services to Leonardo S.p.A., which may divert human
and financial resources from our business.
You should read this press release completely and with the
understanding that actual future results may be materially
different from expectations. All forward-looking statements made in
this press release are qualified by these cautionary statements.
These forward-looking statements are made only as of the date of
this filing, and we do not undertake any obligation, other than as
may be required by law, to update or revise any forward-looking or
cautionary statements to reflect changes in assumptions, the
occurrence of events, unanticipated or otherwise, and changes in
future operating results over time or otherwise.
Other risks, uncertainties and factors, including those
discussed in our latest SEC filings under “Risk Factors” of our
latest Annual Report on Form 10-K and Quarterly Reports on Form
10-Q, all of which may be viewed or obtained through the investor
relations section of our website https://www.leonardodrs.com, could
cause our actual results to differ materially from those projected
in any forward-looking statements we make. Readers should read the
discussion of these factors carefully to better understand the
risks and uncertainties inherent in our business and underlying any
forward-looking statements.
Consolidated Statements of
Earnings (Unaudited)
(Dollars in millions, except per share
amounts)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2023
2022
2023
2022
Revenues:
Products
$870
$773
$2,631
$2,443
Services
56
47
195
250
Total revenues
926
820
2,826
2,693
Cost of revenues:
Products
(679
)
(600
)
(2,044
)
(1,928
)
Services
(37
)
(36
)
(134
)
(190
)
Total cost of revenues
(716
)
(636
)
(2,178
)
(2,118
)
Gross profit
210
184
648
575
General and administrative expenses
(98
)
(96
)
(384
)
(357
)
Amortization of intangibles
(6
)
(3
)
(22
)
(10
)
Other operating (expenses) income, net
(1
)
2
(11
)
353
Operating earnings
105
87
231
561
Interest expense
(9
)
(7
)
(36
)
(34
)
Other, net
(1
)
(2
)
(3
)
(2
)
Earnings before taxes
95
78
192
525
Income tax provision
21
13
24
120
Net earnings
$74
$65
$168
$405
Net earnings per share from common
stock:
Basic earnings per share
$0.28
$0.28
$0.64
$1.88
Diluted earnings per share
$0.28
$0.28
$0.64
$1.88
Consolidated Balance Sheets
(Unaudited)
(Dollars in millions, except per share
amounts)
December 31,
2023
2022
ASSETS
Current assets:
Cash and cash equivalents
$467
$306
Accounts receivable, net
151
166
Contract assets
908
872
Inventories
329
319
Prepaid expenses
21
20
Other current assets
42
24
Total current assets
1,918
1,707
Noncurrent assets:
Property, plant and equipment, net
402
404
Intangible assets, net
151
172
Goodwill
1,238
1,236
Deferred tax assets
123
66
Other noncurrent assets
89
92
Total noncurrent assets
2,003
1,970
Total assets
$3,921
$3,677
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Short-term borrowings and current portion
of long-term debt
$57
$29
Accounts payable
398
457
Contract liabilities
335
233
Other current liabilities
288
323
Total current liabilities
1,078
1,042
Noncurrent liabilities:
Long-term debt
349
365
Pension and other postretirement benefit
plan liabilities
36
45
Deferred tax liabilities
4
—
Other noncurrent liabilities
129
98
Total noncurrent liabilities
$518
$508
Shareholders' equity:
Preferred stock, $0.01 par value:
10,000,000 shares authorized; none issued
$—
$—
Common stock, $0.01 par value: 350,000,000
shares authorized; 262,525,390 and 260,234,033 shares issued and
outstanding as of December 31, 2023 and 2022, respectively
3
3
Additional paid-in capital
5,175
5,147
Accumulated deficit
(2,806
)
(2,974
)
Accumulated other comprehensive loss
(47
)
(49
)
Total shareholders' equity
2,325
2,127
Total liabilities and shareholders'
equity
$3,921
$3,677
Consolidated Statements of
Cash Flows (Unaudited)
(Dollars in millions)
Year Ended
December 31,
2023
2022
Operating activities
Net earnings
$168
$405
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization
85
65
Deferred income taxes
(52
)
(6
)
Gain from sale of business
—
(354
)
Share-based compensation expense
17
5
Other
1
—
Changes in assets and liabilities:
Accounts receivable
15
(1
)
Contract assets
(36
)
(134
)
Inventories
(10
)
(33
)
Prepaid expenses
(1
)
(1
)
Other current assets
(18
)
3
Other noncurrent assets
19
24
Defined benefit obligations
(8
)
(4
)
Other current liabilities
(26
)
14
Other noncurrent liabilities
8
(8
)
Accounts payable
(59
)
(14
)
Contract liabilities
102
72
Net cash provided by operating
activities
205
33
Investing activities
Capital expenditures
(60
)
(65
)
Business acquisitions, net of cash
acquired
—
19
Proceeds from sales of assets
1
—
Proceeds from sales of businesses
—
482
Net cash (used in) provided by investing
activities
(59
)
436
Financing activities
Net increase (decrease) in third party
borrowings (maturities of 90 days or less)
20
(8
)
Repayment of third party debt
(727
)
—
Borrowings of third party debt
715
223
Repayment of related party debt
—
(992
)
Borrowings from related parties
—
775
Dividend to US Holding
—
(396
)
Dividend from investment
—
3
Proceeds from stock issuance
12
—
Cash outlay to reacquire equity
instruments
(1
)
—
Other
(4
)
(8
)
Net cash provided by (used in) financing
activities
15
(403
)
Effect of exchange rate changes on cash
and cash equivalents
—
—
Net increase in cash and cash
equivalents
161
66
Cash and cash equivalents at beginning of
year
306
240
Cash and cash equivalents at end of
year
$467
$306
Non-GAAP Financial Measures (Unaudited)
In addition to the results reported in accordance with U.S. GAAP
included throughout this document, the company has provided
information regarding “Adjusted EBITDA,” “Adjusted EBITDA Margin,”
“Adjusted Net Earnings,” “Adjusted Diluted Earnings Per Share” and
“Free Cash Flow” (each, a non-GAAP financial measure).
We believe the non-GAAP financial measures presented in this
document will help investors understand our financial condition and
operating results and assess our future prospects. We believe these
non-GAAP financial measures, each of which is discussed in greater
detail below, are important supplemental measures because they
exclude unusual or non-recurring items as well as non-cash items
that are unrelated to or may not be indicative of our ongoing
operating results. Further, when read in conjunction with our GAAP
results, these non-GAAP financial measures provide a baseline for
analyzing trends in our underlying businesses and can be used by
management as a tool to help make financial, operational and
planning decisions. Finally, these measures are often used by
analysts and other interested parties to evaluate companies in our
industry by providing more comparable measures that are less
affected by factors such as capital structure.
We recognize that these non-GAAP financial measures have
limitations, including that they may be calculated differently by
other companies or may be used under different circumstances or for
different purposes, thereby affecting their comparability from
company to company. In order to compensate for these and the other
limitations discussed below, management does not consider these
measures in isolation from or as alternatives to the comparable
financial measures determined in accordance with U.S. GAAP. Readers
should review the reconciliations below and should not rely on any
single financial measure to evaluate our business.
We define these non-GAAP financial measures as:
Adjusted EBITDA and Adjusted EBITDA Margin are
defined as net earnings before income taxes, interest expense,
amortization of acquired intangible assets, depreciation,
deal-related transaction costs, restructuring costs and other
one-time non-operational events (which include non-service pension
expense, legal liability accrual reversals and foreign exchange
impacts) and gain on sale of dispositions, then in the case of
adjusted EBITDA margin dividing adjusted EBITDA by revenues.
(Dollars in millions)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2023
2022
2023
2022
Net earnings
$74
$65
$168
$405
Income tax provision
21
13
24
120
Interest expense
9
7
36
34
Amortization of intangibles
6
3
22
10
Depreciation
16
14
63
55
Deal-related transaction costs
3
17
7
43
Restructuring costs
1
3
11
3
Other one-time non-operational events
1
2
(7
)
2
Gain on sale of dispositions
—
(4
)
—
(354
)
Adjusted EBITDA
$131
$120
$324
$318
Adjusted EBITDA Margin
14.1
%
14.7
%
11.5
%
11.8
%
Adjusted Net Earnings and Adjusted Diluted EPS are
defined as net earnings excluding amortization of acquired
intangible assets, deal-related transaction costs, restructuring
costs, other one-time non-operational events (which include
non-service pension expense, legal liability accrual reversals and
foreign exchange impacts), gain on sale of dispositions (net of
taxes) and the related tax impact from net earnings, then in the
case of adjusted diluted EPS dividing adjusted net earnings by the
diluted weighted average shares outstanding.
(In millions, except per share
amounts)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2023
2022
2023
2022
Net earnings
$74
$65
$168
$405
Amortization of intangibles
6
3
22
10
Deal-related transaction costs
3
17
7
43
Restructuring costs
1
3
11
3
Other one-time non-operational events
1
2
(7
)
2
Gain on sale of dispositions, net of
taxes
—
(5
)
—
(275
)
Tax effect of adjustments (1)
(2
)
(4
)
(7
)
(9
)
Adjusted Net Earnings
$83
$81
$194
$179
Per share information
Diluted weighted average common shares
265.700
229.045
264.175
215.133
Diluted earnings per share
$0.28
$0.28
$0.64
$1.88
Adjusted Diluted EPS
$0.31
$0.35
$0.73
$0.83
(1) Calculation uses an estimated
statutory tax rate on non-GAAP adjustments.
Free Cash Flow is defined as the sum of the cash flows
provided by (used in) operating activities, transaction-related
expenditures (net of tax), tax payments on disposals, capital
expenditures, proceeds from sale of assets and dividends from
investments.
(Dollars in millions)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2023
2022
2023
2022
Net cash provided by operating
activities
$515
$279
$205
$33
Transaction-related expenditures, net of
tax
(4
)
6
13
25
Tax payments on disposals
—
78
—
78
Capital expenditures
(18
)
(30
)
(60
)
(65
)
Proceeds from sales of assets
1
—
1
—
Dividends from investments
—
3
—
3
Free Cash Flow
$494
$336
$159
$74
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240227804099/en/
Investors Steve Vather VP,
Investor Relations & Corporate Finance +1 703 409 2906
stephen.vather@drs.com
Media Michael Mount VP,
Communications & Public Affairs +1 571 447 4624
mmount@drs.com
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