Exhibit 99
For Immediate Release
----------------------
LOCKHEED MARTIN REPORTS FIRST QUARTER FINANCIAL RESULTS
Net Earnings of $0.51 Per Share, Exclusive of Nonrecurring Items;
With Nonrecurring Items, Reports Net Loss of $0.23 Per Share
BETHESDA, Maryland, April 20, 1999 - Lockheed Martin Corporation (NYSE: LMT)
today reported a first quarter loss of $.23 per share on a diluted basis,
compared to first quarter 1998 diluted earnings of $.71 per share. Results for
this quarter were impacted by two nonrecurring and unusual items a $74 million
after-tax gain, or $.19 per diluted share, from the sale of 4.5 million shares
of stock in L-3 Communications in a secondary public offering and a $355 million
after-tax charge, or $.93 per diluted share, related to the cumulative effect of
adopting a new accounting standard* related to costs for start-up activities.
Excluding the effects of these nonrecurring and unusual items, net earnings for
the first quarter of 1999 would have been $194 million, or $.51 per diluted
share.
"Although this quarter's results were on plan, they were not as good as we'd
like them to be, and we remain focused on the operational and performance issues
that create uncertainty for our customers and shareholders," stated Vance
Coffman, Lockheed Martin chairman and chief executive officer. "Achieving our
full-year earnings expectations depends on the timing of aircraft deliveries,
spacecraft launches, ongoing portfolio actions, and certain cost and operational
performance issues," Coffman said.
"Our management team is focused on three basic areas. First, we are going to
continue to be the absolute best at meeting the needs of our core aerospace,
defense and government customers. Second, we are going to deliver real near-
and long-term value for our shareholders, and achieve productivity increases
through our LM21 Best Practices initiative. Third, we are going to capitalize
wherever appropriate on expertise and technologies to generate additional value
for shareholders," Coffman added.
* The Corporation adopted the American Institute of Certified Public
Accountants' Statement of Position No. 98-5, "Reporting on the Costs of Start-Up
Activities," effective January 1, 1999.
The Aeronautics segment delivered seven C-130J aircraft originally scheduled for
delivery in the fourth quarter of 1998, and the Space & Strategic Missiles
segment successfully launched two Proton, one Atlas, and one Athena I rocket
during the first quarter 1999.
First quarter 1999 results in the Space & Strategic Missiles segment, compared
to first quarter 1998 results, were negatively impacted by costs associated with
advanced launch vehicle development and start-up activities, commercial
satellite component supplier issues and the penalties on the THAAD demonstration
flight test program.
The first quarter of 1999 was also impacted by costs associated with ongoing
investments by Lockheed Martin Global Telecommunications. Global
Telecommunications, a wholly-owned subsidiary of the Corporation reported in the
Corporate and Other segment, recorded sales of $16 million and operating losses
of $24 million for the quarter. The Corporation continues to seek the approvals
and legislative changes necessary to proceed with its proposed acquisition of
COMSAT.
Sales for first quarter 1999 were $6.2 billion, comparable with first quarter
1998 sales of $6.2 billion. The Corporation's backlog totaled $45.7 billion at
quarter's end compared with $45.3 billion at year end 1998.
In reporting on the Corporation's financial performance for the quarter, Coffman
highlighted a series of recent contract wins, milestones and business actions in
traditional and new business areas with long-term benefits to Lockheed Martin:
First Quarter 1999 Highlights
. The Robert J. Collier Trophy was awarded to Lockheed Martin for the U-2
aircraft.
. Lockheed Martin, teamed with the USAF depot at Kelly Aircraft Center, San
Antonio, Texas, won a $1.2 billion contract for the repair and overhaul of
aircraft jet engines.
. A total of 7 C-130J and 28 F-16 aircraft were delivered during the quarter.
. Launches of one Atlas, two Proton and one Athena 1 rocket were completed
successfully.
. One External Tank was delivered to NASA in support of the Space Shuttle
program.
. Pre-launch transponder leasing commitments for the LMI-1 satellite, a joint
venture between Global Telecommunications and Intersputnik, reached 75
percent. LMI-1 is scheduled for launch later this year.
. Lockheed Martin Commercial Space Systems was established as a new business
unit to serve global customers in the marketing, sales and production of
commercial satellite systems.
. A Patriot Advanced Capability-3 (PAC-3) missile successfully intercepted and
destroyed an incoming tactical ballistic missile target on its first
opportunity to achieve an intercept. Separately, Vought Systems and
DaimlerChrysler Aerospace (Dasa) established a joint venture for PAC-3 missile
production in Germany.
. Electronics Sector businesses continued to strengthen their position in
international markets, winning contracts with a combined value in excess of
$200 million.
. The United Kingdom's Ministry of Defence awarded Lockheed Martin Missiles &
Space a $49 million, 20-month contract to study the development of SKYNET 5,
the United Kingdom's next-generation space-based communications system.
. Nike, Inc. signed a five-year agreement with Lockheed Martin to outsource its
data center, desktop support, network management and technical asset
management operations.
. Lockheed Martin Postal Systems completed delivery of 300,000 hand-held Mobile
Data Collection Devices (MDCDs) to the U.S. Postal Service under a $250
million contract, enabling the Postal Service to provide same-day delivery
confirmation for Express Mail, Priority Mail, and other accountable mail.
. Postal Systems and GATX Logistics, Inc. formed a new joint venture company,
Paxis LLC, to offer comprehensive parcel consolidation and distribution
services, using the U.S. Postal Service delivery system.
. The British government selected Lockheed Martin to develop the data capture
imaging systems and to provide other services in support of the United
Kingdom's 2001 census. The contract is initially valued at $80 million.
. The U.S. Air Force awarded Lockheed Martin a $415 million contract to
modernize C-5 instrument displays, communications/navigation systems, and the
automatic flight control system on all 126 C-5 aircraft.
. The Corporation received U.S. Navy contracts valued at approximately $283
million for continued production of AEGIS shipboard combat systems and
Vertical Launching Systems.
. Following successful performance of LANTIRN pods aboard U.S. Navy F-14s in
Operation Desert Fox, the Navy exercised an option valued at $53 million for
26 additional LANTIRN pods.
. Lockheed Martin Undersea Systems was assessed as a Level 5 organization as
defined by the Carnegie Mellon Software Engineering Institute (SEI) Capability
Maturity Model. Undersea Systems became the Electronics Sector's second
company to earn the SEI Level 5 designation, held by only 1% of the companies
assessed worldwide.
. The Mars Surveyor Program's '98 Mars Polar Lander was launched on Jan. 3,
1999, and is scheduled to land on Mars on December 3, 1999. Stardust --another
interplanetary spacecraft Lockheed Martin built for NASA -- was launched on
February 7, 1999. Stardust 's mission is to capture comet particles and
interstellar dust and return them to Earth for detailed laboratory analysis.
Headquartered in Bethesda, Maryland, Lockheed Martin is a highly diversified
global enterprise principally engaged in the research, design, development,
manufacture and integration of advanced-technology systems, products and
services. The Corporation's core businesses span space, electronics,
aeronautics, information and services, telecommunications, energy and systems
integration. Employing more than 165,000 people worldwide, Lockheed Martin had
1998 sales surpassing $26 billion.
###
NEWS MEDIA CONTACT: James Fetig 301/897-6352
INVESTOR RELATIONS CONTACT: James Ryan, 301/897-6584or
Randa Middleton, 301/8976455
Web site: www.lmco.com
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NOTE: Statements which are not historical facts are forward-looking statements
made pursuant to the safe harbor provision of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements may use
terminology such as "anticipated," "expected," "believe," "should,"
"scheduled," and "estimated." The undertakings contained in these
statements involve risks and uncertainties that could cause actual
results to differ materially from anticipated results. These risks
include the availability of government funding and customer requirements,
economic conditions, competitive environment, timing of awards and
contracts; timing of product delivery and launches, customer acceptance
and the outcome of contingencies including completion of acquisitions and
divestitures, litigation and environmental remediation, and program
performance in addition to other factors not listed. See in this regard
the Corporation's filings with the Securities and Exchange Commission.
The Corporation does not undertake any obligation to publicly release any
revisions to forward looking statements to reflect events or
circumstances or changes in expectations after the date of this press
release or the occurrence of anticipated events.
LOCKHEED MARTIN CORPORATION
Consolidated Results
(In millions, except per share data)
QUARTER ENDED MARCH 31,
---------------------------------------------------------
1999 1998 % Change
------ ------ --------
Net Sales $6,188 $6,217 0%
Earnings before Interest and Taxes $616 $647 -5%
Interest Expense $192 $213 -10%
Pre-tax Earnings $424 $434 -2%
Income Taxes $156 $165 -5%
Effective Tax Rate 37% 38% N/M
Earnings before Cumulative Effect of
Change in Accounting $268 $269 0%
Cumulative Effect of Change in Accounting* ($355) - N/M
Net (Loss) Earnings ($87) $269 -132%
Basic Earnings (Loss) Per Share:
Earnings before Cumulative Effect of
Change in Accounting $0.70 $0.72 -3%
Cumulative Effect of Change in Accounting* ($0.93) - N/M
------ ------
Earnings (Loss) Per Share ($0.23) $0.72 -132%
Average Basic Shares Outstanding 380.3 373.9
Diluted Earnings (Loss) Per Share:
Earnings before Cumulative Effect of
Change in Accounting $0.70 $0.71 -1%
Cumulative Effect of Change in Accounting* ($0.93) - N/M
------ ------
Earnings (Loss) Per Share ($0.23) $0.71 -132%
Average Diluted Shares Outstanding 382.6 379.4
* The Corporation adopted the American Institute of Certified Public
Accountants' Statement of Position (SOP) No. 98-5, "Reporting on the Costs of
Start-Up Activities" effective January 1, 1999.
LOCKHEED MARTIN CORPORATION
Segment Results Excluding Nonrecurring and Unusual Items
(In millions, except for percentages)
QUARTER ENDED MARCH 31,
---------------------------------------------------------
1999 1998 % Change
------ ------ --------
Space & Strategic Missiles
- --------------------------
Net Sales $1,626 $1,907 -15%
Segment EBIT $125 $267 -53%
Margins 7.7% 14.0%
Amortization of Goodwill and Contract Intangibles $7 $7 0%
Electronics*
- ------------
Net Sales $1,750 $1,698 3%
Segment EBIT $152 $141 8%
Margins 8.7% 8.3%
Amortization of Goodwill and Contract Intangibles $57 $57 0%
Aeronautics
Net Sales $1,536 $1,351 14%
Segment EBIT $169 $151 12%
Margins 11.0% 11.2%
Amortization of Goodwill and Contract Intangibles $20 $20 0%
Information & Services**
- ------------------------
Net Sales $1,201 $1,212 -1%
Segment EBIT $61 $55 11%
Margins 5.1% 4.5%
Amortization of Goodwill and Contract Intangibles $24 $26 -8%
Corporate and Other***
- ----------------------
Net Sales $75 $49 53%
Segment EBIT ($5) $33 -115%
Margins N/M N/M
* 1998 results include the operations of LM Commercial Electronics divested
effective February 22, 1998.
** 1998 results include the operations of CalComp Technology, Inc., which is
currently executing a timely non-bankruptcy shutdown of its operations.
*** 1999 results include the operations of LM Global Telecommunications, Inc.
LOCKHEED MARTIN CORPORATION
Other Financial Information
(In millions, except for per share amounts and percentages)
RECONCILIATION OF EARNINGS EXCLUDING NONRECURRING AND UNUSUAL ITEMS
QUARTER ENDED MARCH 31,
-------------------------------
1999 1998
------ ------
Net (Loss) Earnings - As Reported ($87) $269
After Tax Gain on L3 Disposition ($74) -
Cumulative Effect of Change in Accounting $355 -
---------- ----------
Pro Forma Net Earnings $194 $269
Diluted (Loss) Earnings Per Share - As Reported ($0.23) $0.71
After Tax Gain on L3 Disposition ($0.19) -
Cumulative Effect of Change in Accounting $0.93 -
---------- ----------
Pro Forma Diluted Earnings Per Share $0.51 $0.71
OTHER FINANCIAL INFORMATION
QUARTER ENDED MARCH 31,
-------------------------------
1999 1998
------ ------
EBIT to Sales Margin 10.0% 10.4%
Amortization of Goodwill and Contract Intangibles
Resulting from Prior Acquisitions (pretax) $108 $110
Depreciation and Amortization $122 $143
EBITDA $846 $900
03/31/99 12/31/98
-------- --------
Backlog $45,682 * $45,345
Total Debt $10,835 * $10,886
Long-term (including current maturities) $ 9,672 * $ 9,843
Short-term $ 1,163 * $ 1,043
Cash and Cash Equivalents $ 43 * $ 285
Stockholders' Equity $ 6,053 * $ 6,137
Total Debt-to-Capital 64%* 64%
* Preliminary data