DRS Technologies [DRS] late last Thursday posted higher fourth quarter earnings and sales although it benefited in good measure from a restatement of a hefty charge from the first quarter of fiscal year 2008 to the company’s fourth quarter of 2007.
An 18 percent increase in sales to $939.4 million from $798.9 million was driven by strong organic growth in three of its four reporting segments, led by the Reconnaissance, Surveillance and Target Acquisition business area. Sales were down in the Technical Services segment due to decreases in engineering and logistics and asset protection services.
Net income more than doubled to $54.9 million, $1.32 earnings per share (EPS), from $22 million (54 cents EPS) a year ago. The restatement of a charge on the Thermal Weapon Sight II program to the fourth quarter amounted to $23.2 million (56 cents EPS). The restatement was taken based on discussions with the Securities and Exchange Commission and to company’s own reviews related to the program.
Excluding the impact of the charge, operating earnings were driven by double-digit gains at the Technical Services, Sustainment Systems, and C4I segments.
DRS, which is in the process of being acquired by Italy’s Finmeccanica, has a funded backlog of $3.6 billion. In fiscal 2008 DRS had a record $3.9 billion in new contract awards. Free cash flow in the fourth quarter was $70.4 million.