activities ($42) $93 ------------------------------------------------- -------- ------- Effect of exchange rate changes on cash and cash equivalents -- -- ------------------------------------------------ -------- ------- Net decrease in cash and cash equivalents ($269) ($259) Cash and cash equivalents at beginning of year 467 306 ------------------------------------------------- -------- ------- Cash and cash equivalents at end of period $198 $47 ================================================= ======== =======
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), then in the case of adjusted EBITDA margin dividing adjusted EBITDA by revenues.
(Dollars in millions) Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- --------------------
2024 2023 2024 2023
---- ---- ---- ----
Net earnings $ 57 $ 47 $ 124 $ 94
Income tax provision 12 1 29 3
Interest expense 5 10 17 27
Amortization of
intangibles 6 5 17 16
Depreciation 17 16 51 47
Deal-related
transaction costs 1 1 5 4
Restructuring costs -- 2 5 10
Other one-time
non-operational
events 2 -- 4 (8)
----------------------- ---- ---- ---- ----
Adjusted EBITDA $ 100 $ 82 $ 252 $ 193
Adjusted EBITDA Margin 12.3% 11.7% 11.2% 10.2%
Adjusted Net Earnings and Adjusted Diluted EPS are defined as net earnings excluding amortization of acquired intangible assets, 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 the related tax impacts, then in the case of adjusted diluted EPS dividing adjusted net earnings by the diluted weighted average number of shares outstanding (WASO).
(In millions,
except per share
amounts) Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- ----------------------
2024 2023 2024 2023
------- ------- ------- -------
Net earnings $ 57 $ 47 $ 124 $ 94
Amortization of
intangibles 6 5 17 16
Deal-related
transaction
costs 1 1 5 4
Restructuring
costs -- 2 5 10
Other one-time
non-operational
events 2 -- 4 (8)
Tax effect of
adjustments
(1) (2) (2) (6) (5)
----------------- ------- ------- ------- -------
Adjusted Net
Earnings $ 64 $ 53 $ 149 $ 111
================= ======= ======= ======= =======
Per share
information
-----------------
Diluted WASO 268.299 265.000 267.357 263.675
Diluted EPS $ 0.21 $ 0.18 $ 0.46 $ 0.36
Adjusted Diluted
EPS $ 0.24 $ 0.20 $ 0.56 $ 0.42
(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), capital expenditures and proceeds from sale of assets.
(Dollars in millions) Three Months Ended Nine Months Ended
September 30, September 30,
------------------------ -------------------
2024 2023 2024 2023
------------ ---------- ------- ----------
Net cash provided by
(used in) operating
activities $59 $36 ($172) ($310)
Transaction-related
expenditures, net of
tax -- 1 1 17
Capital expenditures (12) (15) (56) (42)
Proceeds from sales of
assets 1 (1) 1 --
----------------------- ------- --- ------ ------ -------
Free Cash Flow $48 $21 ($226) ($335)
======================= ======= === ====== ====== =======
View source version on businesswire.com: https://www.businesswire.com/news/home/20241030657738/en/
CONTACT: Investors
Steve Vather
SVP, 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
(END) Dow Jones Newswires
October 30, 2024 07:30 ET (11:30 GMT)
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