Diluted EPS of $1.71 increases 5.6 percent over first-quarter 2013
Operating earnings up 2.8 percent
Total backlog increased by more than 20 percent from year-end 2013
Margins
Company-wide operating margins for the first quarter of 2014 were 11.9 percent, a 50 basis points improvement when compared to 11.4 percent in first-quarter 2013.
Cash
Net cash provided by operating activities in the quarter totaled $428 million. Free cash flow from operations, defined as net cash provided by operating activities less capital expenditures, was $341 million in first-quarter 2014. In comparison, for the first quarter of 2013, net cash provided by operating activities was $504 million, and free cash flow from operations was $429 million.
Capital Deployment
The company repurchased 14.4 million of its outstanding shares in the first quarter. In addition, in March, the board of directors increased the company’s quarterly dividend by 10.7 percent to $0.62 per share, representing the company’s 17th consecutive annual dividend increase.
Backlog
Funded backlog at the end of first-quarter 2014 was $48.3 billion, and total backlog was $56 billion, a more than 20 percent increase from year-end 2013. The company received a $10 billion 14-year contract from the Government of Canada’s Canadian Commercial Corporation to provide military and commercial vehicles, training, and support services to an international customer, with $3 billion in options. Additional significant awards received in the quarter include $645 million for an additional Arleigh Burke-class destroyer, $520 million for long-lead material for Virginia-class Block IV submarines, $210 million for continued support of the U.K.
’s Bowman tactical communication system, and $165 million for combat and seaframe control systems on the Navy’s Independence-variant Littoral Combat Ship.
In addition to total backlog, estimated potential contract value, representing management’s estimate of value in unfunded indefinite delivery, indefinite quantity (IDIQ) contracts and unexercised options, was $28.7 billion. Total potential contract value, the sum of all backlog components, was $84.7 billion at the end of the quarter.
“General Dynamics’ first quarter operating performance was strong, demonstrated by 11.9 percent operating margins,” said Phebe N. Novakovic, chairman and chief executive officer. “2014 is off to a solid start as we remain committed to robust operating performance, engaging in wise capital deployment and driving excellence throughout the company.”
General Dynamics, headquartered in Falls Church, Virginia, employs approximately 94,400 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 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. Therefore, 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 were 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 first-quarter securities analyst conference call, scheduled for 9 a.m. EDT on Wednesday, April 23, 2014. 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 12 p.m. EDT on April 23 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 91025939. The phone replay will be available from 12 p.m. April 23 through April 30, 2014.
