- Revenue of $10.7 billion, up 8.6%
from year-ago quarter
- Operating earnings of $1 billion,
up 10.4% from year-ago quarter
- Diluted EPS of $2.88, up 9.1%
from year-ago quarter
- Operating margin of 9.7%, a 20 basis-point expansion from
year-ago quarter
RESTON,
Va., April 24, 2024 /PRNewswire/ -- General
Dynamics (NYSE: GD) today reported first-quarter 2024 revenues of
$10.7 billion, up 8.6% from the first
quarter of 2023. Operating earnings of $1
billion were up 10.4% from the year-ago quarter, with
operating margins expanding 20 basis points to 9.7% from the
year-ago quarter. Diluted earnings per share (EPS) were
$2.88, up 9.1% from the year-ago
quarter.
"Our businesses delivered solid operating results in the
quarter, growing revenue and backlog, while expanding margins, even
as we awaited G700 certification," said Phebe N. Novakovic, chairman and chief executive
officer. "In the Aerospace segment, the recent FAA certification of
the Gulfstream G700 has enabled us to begin customer deliveries.
This is a strong start to 2024 and we remain confident in our
outlook."
Cash and Capital Deployment
Net cash used by operating
activities in the quarter was $278
million due to growth of operating working capital in both
the Aerospace and defense segments.
During the quarter, the company invested $159 million in capital expenditures, paid
$361 million in dividends, and used
$105 million to repurchase more than
390,000 shares, ending the quarter with $1
billion in cash and equivalents.
Backlog
The consolidated book-to-bill ratio, defined
as orders divided by revenue, was 1-to-1 for the quarter.
Company-wide backlog of $93.7 billion was up 4.4% from the
year-ago quarter. Estimated potential contract value, representing
management's estimate of additional value in unfunded indefinite
delivery, indefinite quantity (IDIQ) contracts and unexercised
options, was $40.3 billion. Total
estimated contract value, the sum of all backlog components, was
$134 billion, up 4.4% from the
year-ago quarter.
In the Aerospace segment, orders in the quarter
totaled $2.4 billion, growing backlog
to $20.5 billion, up 6.2% from the
year-ago quarter. Aerospace book-to-bill was 1.2-to-1 for the
quarter.
In the defense segments, orders in the quarter totaled
$8.8 billion, with particular
strength in Combat Systems and Technologies, which had book-to-bill
ratios of 1.6-to-1 and 1.2-to-1, respectively.
Significant awards in the defense segments included an IDIQ
contract from the U.S. Army to provide medium-caliber ammunition
cartridges, with a maximum potential value of $3 billion among two awardees; $1.3 billion, with a maximum potential value of
$2 billion, from Austria's ministry of defense to produce
Pandur 6x6 wheeled combat vehicles; four IDIQ contracts from the
Canadian government with a maximum potential value of $1.3 billion to support the Land Command,
Control, Communications, Computers, Intelligence, Surveillance and
Reconnaissance (C4ISR) system for the Canadian army; $505 million, with a maximum potential value of
$995 million, for several key
contracts for classified customers; $325
million from the Canadian government to produce armored
combat support vehicles; and $310
million from the U.S. Navy for maintenance, modernization
and repair work on a Wasp-class amphibious assault ship. A detailed
list of significant awards is provided in Exhibit G.
About General Dynamics
Headquartered in Reston, Virginia, General Dynamics is a global
aerospace and defense company that offers a broad portfolio of
products and services in business aviation; ship construction and
repair; land combat vehicles, weapons systems and munitions; and
technology products and services. General Dynamics employs more
than 100,000 people worldwide and generated $42.3 billion in revenue in 2023. More
information is available at www.gd.com.
WEBCAST INFORMATION: General Dynamics will webcast its
first-quarter 2024 financial results conference call at 9 a.m. EDT
on Wednesday, April 24, 2024. The
webcast will be a listen-only audio event available at
www.gd.com. An on-demand replay of the webcast
will be available by telephone two hours after the end of the call
through May 1, 2024, at 800-770-2030
(international: +1 609-800-9909), conference ID 4299949. Charts
furnished to investors and securities analysts in connection with
General Dynamics' announcement of its financial results are
available at www.gd.com.
This press release contains forward-looking statements (FLS),
including statements about the company's future operational
and financial performance, which are based on management's
expectations, estimates, projections and assumptions. Words such as
"expects," "anticipates," "plans," "believes," "forecasts,"
"scheduled," "outlook," "estimates," "should" and variations of
these words and similar expressions are intended to identify FLS.
In making FLS, we rely on assumptions and analyses based on our
experience and perception of historical trends; current conditions
and expected future developments; and other factors, estimates and
judgments we consider reasonable and appropriate based on
information available to us at the time. FLS are made pursuant to
the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995, as amended. FLS are not guarantees of future
performance and involve factors, risks and uncertainties that are
difficult to predict. Actual future results and trends may differ
materially from what is forecast in the FLS. All FLS speak only as
of the date they were made. We do not undertake any obligation to
update or publicly release revisions to FLS to reflect events,
circumstances or changes in expectations after the date of this
press release. Additional information regarding these factors is
contained in the company's filings with the SEC, and these
factors may be revised or supplemented in future SEC filings. In
addition, this press release contains some financial measures not
prepared in accordance with U.S. generally accepted accounting
principles (GAAP).
While we believe these non-GAAP metrics provide useful
information for investors, there are limitations associated with
their use, and our calculations of these metrics may not be
comparable to similarly titled measures of other companies.
Non-GAAP metrics should not be considered in isolation from, or as
a substitute for, GAAP measures. Reconciliations to comparable
GAAP measures and other information relating to our non-GAAP
measures are included in other filings with the SEC, which are
available at investorrelations.gd.com.
EXHIBIT A
|
|
CONSOLIDATED STATEMENT OF EARNINGS - (UNAUDITED)
DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS
|
|
|
|
|
Three Months
Ended
|
|
Variance
|
|
|
March 31,
2024
|
|
April 2,
2023
|
|
$
|
|
%
|
Revenue
|
$
10,731
|
|
$
9,881
|
|
$
850
|
|
|
8.6 %
|
Operating costs and
expenses
|
(9,695)
|
|
(8,943)
|
|
(752)
|
|
|
|
|
Operating
earnings
|
1,036
|
|
938
|
|
98
|
|
|
10.4 %
|
Other, net
|
14
|
|
33
|
|
(19)
|
|
|
|
|
Interest,
net
|
(82)
|
|
(91)
|
|
9
|
|
|
|
|
Earnings before income
tax
|
968
|
|
880
|
|
88
|
|
|
10.0 %
|
Provision for income
tax, net
|
(169)
|
|
(150)
|
|
(19)
|
|
|
|
|
Net earnings
|
$
799
|
|
$
730
|
|
$
69
|
|
|
9.5 %
|
Earnings per
share—basic
|
$
2.92
|
|
$
2.66
|
|
$
0.26
|
|
|
9.8 %
|
Basic weighted average
shares outstanding
|
273.5
|
|
274.0
|
|
|
|
|
|
|
Earnings per
share—diluted
|
$
2.88
|
|
$
2.64
|
|
$
0.24
|
|
|
9.1 %
|
Diluted weighted
average shares outstanding
|
277.0
|
|
276.6
|
|
|
|
|
|
|
EXHIBIT B
|
|
REVENUE AND OPERATING EARNINGS BY SEGMENT - (UNAUDITED)
DOLLARS IN MILLIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Variance
|
|
|
March 31,
2024
|
|
April 2,
2023
|
|
$
|
|
%
|
Revenue:
|
|
|
|
|
|
|
|
|
|
Aerospace
|
$
2,084
|
|
$
1,892
|
|
$
192
|
|
|
10.1 %
|
Marine
Systems
|
3,331
|
|
2,992
|
|
339
|
|
|
11.3 %
|
Combat
Systems
|
2,102
|
|
1,756
|
|
346
|
|
|
19.7 %
|
Technologies
|
3,214
|
|
3,241
|
|
(27)
|
|
|
(0.8) %
|
Total
|
$
10,731
|
|
$
9,881
|
|
$
850
|
|
|
8.6 %
|
Operating earnings:
|
|
|
|
|
|
|
|
|
|
Aerospace
|
$
255
|
|
$
229
|
|
$
26
|
|
|
11.4 %
|
Marine
Systems
|
232
|
|
211
|
|
21
|
|
|
10.0 %
|
Combat
Systems
|
282
|
|
245
|
|
37
|
|
|
15.1 %
|
Technologies
|
295
|
|
299
|
|
(4)
|
|
|
(1.3) %
|
Corporate
|
(28)
|
|
(46)
|
|
18
|
|
|
39.1 %
|
Total
|
$
1,036
|
|
$
938
|
|
$
98
|
|
|
10.4 %
|
Operating margin:
|
|
|
|
|
|
|
|
|
|
Aerospace
|
12.2 %
|
|
12.1 %
|
|
|
|
|
|
|
Marine
Systems
|
7.0 %
|
|
7.1 %
|
|
|
|
|
|
|
Combat
Systems
|
13.4 %
|
|
14.0 %
|
|
|
|
|
|
|
Technologies
|
9.2 %
|
|
9.2 %
|
|
|
|
|
|
|
Total
|
9.7 %
|
|
9.5 %
|
|
|
|
|
|
|
EXHIBIT
C
|
CONSOLIDATED BALANCE SHEET
DOLLARS IN MILLIONS
|
|
|
(Unaudited)
|
|
|
March 31, 2024
|
|
December 31,
2023
|
ASSETS
|
|
|
|
Current assets:
|
|
|
|
Cash and
equivalents
|
$
1,036
|
|
$
1,913
|
Accounts
receivable
|
3,119
|
|
3,004
|
Unbilled
receivables
|
8,523
|
|
7,997
|
Inventories
|
9,589
|
|
8,578
|
Other current
assets
|
1,929
|
|
2,123
|
Total current
assets
|
24,196
|
|
23,615
|
Noncurrent assets:
|
|
|
|
Property, plant and
equipment, net
|
6,192
|
|
6,198
|
Intangible assets,
net
|
1,594
|
|
1,656
|
Goodwill
|
20,458
|
|
20,586
|
Other assets
|
2,806
|
|
2,755
|
Total noncurrent
assets
|
31,050
|
|
31,195
|
Total assets
|
$
55,246
|
|
$
54,810
|
LIABILITIES AND SHAREHOLDERS'
EQUITY
|
|
|
|
Current liabilities:
|
|
|
|
Short-term debt and
current portion of long-term debt
|
$
507
|
|
$
507
|
Accounts
payable
|
3,203
|
|
3,095
|
Customer advances and
deposits
|
9,969
|
|
9,564
|
Other current
liabilities
|
3,111
|
|
3,266
|
Total current
liabilities
|
16,790
|
|
16,432
|
Noncurrent liabilities:
|
|
|
|
Long-term
debt
|
8,752
|
|
8,754
|
Other
liabilities
|
8,294
|
|
8,325
|
Total noncurrent
liabilities
|
17,046
|
|
17,079
|
Shareholders' equity:
|
|
|
|
Common stock
|
482
|
|
482
|
Surplus
|
3,820
|
|
3,760
|
Retained
earnings
|
39,678
|
|
39,270
|
Treasury
stock
|
(21,114)
|
|
(21,054)
|
Accumulated other
comprehensive loss
|
(1,456)
|
|
(1,159)
|
Total shareholders'
equity
|
21,410
|
|
21,299
|
Total liabilities and shareholders'
equity
|
$
55,246
|
|
$
54,810
|
EXHIBIT
D
|
CONSOLIDATED STATEMENT OF CASH FLOWS - (UNAUDITED)
DOLLARS IN MILLIONS
|
|
|
Three Months Ended
|
|
March 31, 2024
|
|
April 2,
2023
|
Cash flows from operating activities—continuing
operations:
|
|
|
|
Net
earnings
|
$
799
|
|
$
730
|
Adjustments to
reconcile net earnings to net cash from operating
activities:
|
|
|
|
Depreciation of
property, plant and equipment
|
152
|
|
149
|
Amortization of
intangible and finance lease right-of-use assets
|
59
|
|
77
|
Equity-based
compensation expense
|
34
|
|
38
|
Deferred income tax
benefit
|
(39)
|
|
(91)
|
(Increase) decrease in
assets, net of effects of business acquisitions:
|
|
|
|
Accounts
receivable
|
(115)
|
|
72
|
Unbilled
receivables
|
(519)
|
|
653
|
Inventories
|
(1,011)
|
|
(628)
|
Increase (decrease) in
liabilities, net of effects of business acquisitions:
|
|
|
|
Accounts
payable
|
100
|
|
(150)
|
Customer advances and
deposits
|
384
|
|
553
|
Other, net
|
(122)
|
|
59
|
Net cash (used)
provided by operating activities
|
(278)
|
|
1,462
|
Cash flows from investing
activities:
|
|
|
|
Capital
expenditures
|
(159)
|
|
(161)
|
Other, net
|
(23)
|
|
(29)
|
Net cash used by
investing activities
|
(182)
|
|
(190)
|
Cash flows from financing
activities:
|
|
|
|
Dividends
paid
|
(361)
|
|
(345)
|
Purchases of common
stock
|
(105)
|
|
(90)
|
Other, net
|
50
|
|
(40)
|
Net cash used by
financing activities
|
(416)
|
|
(475)
|
Net cash used by
discontinued operations
|
(1)
|
|
(1)
|
Net (decrease) increase in cash and
equivalents
|
(877)
|
|
796
|
Cash and equivalents at beginning of
period
|
1,913
|
|
1,242
|
Cash and equivalents at end of
period
|
$
1,036
|
|
$
2,038
|
EXHIBIT E
ADDITIONAL FINANCIAL INFORMATION -
(UNAUDITED)
DOLLARS IN MILLIONS, EXCEPT PER SHARE
AMOUNTS
|
|
Other Financial Information:
|
|
|
|
|
|
|
|
|
|
|
March 31, 2024
|
|
December 31,
2023
|
Debt-to-equity
(a)
|
|
|
|
43.2 %
|
|
43.5 %
|
Book value per share
(b)
|
|
|
|
$
78.03
|
|
$
77.85
|
Shares
outstanding
|
|
|
|
274,364,084
|
|
273,599,948
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter
|
|
|
|
|
2024
|
|
2023
|
Income tax payments,
net
|
|
|
|
$
33
|
|
$
58
|
Company-sponsored
research and
development
(c)
|
|
|
|
$
137
|
|
$
110
|
Return on sales
(d)
|
|
|
|
7.4 %
|
|
7.4 %
|
|
|
|
|
|
|
|
Non-GAAP Financial Measures:
|
|
|
|
|
|
|
|
|
|
|
First Quarter
|
|
|
|
|
2024
|
|
2023
|
Free cash flow:
|
|
|
|
|
|
|
Net cash (used)
provided by operating
activities
|
|
|
|
$
(278)
|
|
$
1,462
|
Capital
expenditures
|
|
|
|
(159)
|
|
(161)
|
Free cash flow (e)
|
|
|
|
$
(437)
|
|
$
1,301
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2024
|
|
December 31,
2023
|
Net debt:
|
|
|
|
|
|
|
Total debt
|
|
|
|
$
9,259
|
|
$
9,261
|
Less cash and
equivalents
|
|
|
|
1,036
|
|
1,913
|
Net
debt (f)
|
|
|
|
$
8,223
|
|
$
7,348
|
|
|
(a)
|
Debt-to-equity ratio is
calculated as total debt divided by total equity as of the end of
the period.
|
(b)
|
Book value per share is
calculated as total equity divided by total outstanding shares as
of the end of the period.
|
(c)
|
Includes independent
research and development and Aerospace product-development
costs.
|
(d)
|
Return on sales is
calculated as net earnings divided by revenue.
|
(e)
|
We define free cash
flow as net cash from operating activities less capital
expenditures. We believe free cash flow is a useful
measure for investors because it portrays our ability to generate
cash from our businesses for purposes such as repaying debt,
funding business acquisitions, repurchasing our common stock and
paying dividends. We use free cash flow to assess the quality
of our earnings and as a key performance measure in evaluating
management.
|
(f)
|
We define net debt as
short- and long-term debt (total debt) less cash and equivalents.
We believe net debt is a useful measure
for investors because it reflects the borrowings that support our
operations and capital deployment strategy. We use net debt as
an
important indicator of liquidity and financial position.
|
EXHIBIT
F
BACKLOG - (UNAUDITED)
DOLLARS IN MILLIONS
|
|
|
|
Funded
|
|
Unfunded
|
|
Total Backlog
|
|
Estimated Potential Contract Value*
|
|
Total Estimated Contract Value
|
First Quarter 2024:
|
|
|
|
|
|
|
|
|
|
|
Aerospace
|
|
$
19,564
|
|
$
981
|
|
$
20,545
|
|
$
305
|
|
$
20,850
|
Marine
Systems
|
|
29,711
|
|
14,415
|
|
44,126
|
|
3,749
|
|
47,875
|
Combat
Systems
|
|
14,923
|
|
686
|
|
15,609
|
|
7,002
|
|
22,611
|
Technologies
|
|
8,976
|
|
4,478
|
|
13,454
|
|
29,206
|
|
42,660
|
Total
|
|
$
73,174
|
|
$
20,560
|
|
$
93,734
|
|
$
40,262
|
|
$
133,996
|
Fourth Quarter 2023:
|
|
|
|
|
|
|
|
|
|
|
Aerospace
|
|
$
19,557
|
|
$
897
|
|
$
20,454
|
|
$
451
|
|
$
20,905
|
Marine
Systems
|
|
30,141
|
|
15,755
|
|
45,896
|
|
3,647
|
|
49,543
|
Combat
Systems
|
|
13,816
|
|
721
|
|
14,537
|
|
6,236
|
|
20,773
|
Technologies
|
|
8,961
|
|
3,779
|
|
12,740
|
|
28,011
|
|
40,751
|
Total
|
|
$
72,475
|
|
$
21,152
|
|
$
93,627
|
|
$
38,345
|
|
$
131,972
|
First Quarter 2023:
|
|
|
|
|
|
|
|
|
|
|
Aerospace
|
|
$
18,853
|
|
$
484
|
|
$
19,337
|
|
$
804
|
|
$
20,141
|
Marine
Systems
|
|
30,722
|
|
12,885
|
|
43,607
|
|
3,499
|
|
47,106
|
Combat
Systems
|
|
13,953
|
|
143
|
|
14,096
|
|
5,599
|
|
19,695
|
Technologies
|
|
9,465
|
|
3,320
|
|
12,785
|
|
28,637
|
|
41,422
|
Total
|
|
$
72,993
|
|
$
16,832
|
|
$
89,825
|
|
$
38,539
|
|
$
128,364
|
|
*
|
The estimated potential
contract value includes work awarded on unfunded indefinite
delivery, indefinite quantity (IDIQ) contracts and unexercised
options associated with existing firm contracts, including options
and other agreements with existing customers to purchase new
aircraft and aircraft services. We recognize options in backlog
when the customer exercises the option and establishes a firm
order. For IDIQ contracts, we evaluate the amount of funding
we expect to receive and include this amount in our estimated
potential contract value. The actual amount of funding received in
the future may be higher or lower than our estimate of
potential contract value.
|
EXHIBIT
F-1
BACKLOG - (UNAUDITED)
DOLLARS IN MILLIONS
|
https://mma.prnewswire.com/media/2394850/Exhibit_F_1.jpg
EXHIBIT
F-2
BACKLOG BY SEGMENT - (UNAUDITED)
DOLLARS IN MILLIONS
|
https://mma.prnewswire.com/media/2394851/Exhibit_F_2.jpg
EXHIBIT
G
FIRST QUARTER 2024 SIGNIFICANT ORDERS - (UNAUDITED)
DOLLARS IN MILLIONS
|
We received the following significant contract awards during the
first quarter of 2024:
Marine Systems:
- $310 from the U.S. Navy for
maintenance, modernization and repair work on the USS Bataan, a
Wasp-class amphibious assault ship.
- $255 for future technology
development on the next-generation attack submarine, SSN(X),
program for the Navy.
- $150 from the Navy for long-lead
materials for Block VI Virginia-class submarines.
- $150 for design and engineering
efforts for Virginia-class submarines for the Navy.
- $125 from the Navy to provide
engineering, technical, design and planning yard support services
for operational strategic and attack submarines.
Combat Systems:
- An indefinite delivery, indefinite quantity (IDIQ) contract to
provide medium-caliber ammunition cartridges for the U.S. Army. The
contract has a maximum potential value of $3
billion among two awardees.
- $1.3 billion for the production
of Pandur 6x6 wheeled combat vehicles from the Austrian Federal
Ministry of Defense. The contract including options has a maximum
potential value of $2 billion.
- $325 from the Canadian government
to produce armored combat support vehicles (ACSVs).
- $285 to produce Abrams main
battle tanks in the system enhancement package version 3 (SEPv3)
configuration for Romania.
- $205 from the Army for inventory
management for the Stryker wheeled combat-vehicle fleet.
Technologies:
- Four IDIQ contracts from the Canadian government to support the
Land Command, Control, Communications, Computers, Intelligence,
Surveillance and Reconnaissance (C4ISR) system for the Canadian
army. These contracts have a maximum potential value of
$1.3 billion.
- $505 for several key contracts
for classified customers. These contracts have a maximum potential
value of $995.
- $125 to modernize the U.S.
Central Command's (CENTCOM) enterprise information technology (IT)
infrastructure. The contract including options has a maximum
potential value of $920.
- $340 from the Navy to provide
full life cycle and operational support for the Trident II Fire
Control System (FCS) onboard Ohio-class submarines and continue the
development, production and installation of FCS for all new
Columbia-class submarines. The contract including options has a
maximum potential value of $620.
- $140 from the U.S. Air Force for
the Battlefield Information Collection and Exploitation System -
Extended (BICES-X) program to provide intelligence information
sharing capabilities. The contract has a maximum potential value of
$320.
- A contract to provide technical expertise to develop and
deliver high-performance computing systems and software for a
classified customer. The contract including options has a maximum
potential value of $290.
- $35 from the Air Force to provide
goods and engineering services to support the Federated Trust
Network Environment Infrastructure (FTI) portion of the BICES
program. The contract has a maximum potential value of $240.
- $230 from the National
Geospatial-Intelligence Agency (NGA) to provide hybrid cloud
services and IT design, engineering, and operations and sustainment
services.
- $35 from the Navy for
maintenance, training and sustainment of the Integrated Nuclear
Weapons Security and Integrated Electronic Security Systems. The
contract including options has a maximum potential value of
$190.
EXHIBIT
H
AEROSPACE SUPPLEMENTAL DATA - (UNAUDITED)
DOLLARS IN MILLIONS
|
|
|
|
|
|
First Quarter
|
|
|
|
|
|
2024
|
|
2023
|
Gulfstream Aircraft Deliveries
(units):
|
|
|
|
|
|
|
|
Large-cabin
aircraft
|
|
|
|
|
21
|
|
17
|
Mid-cabin
aircraft
|
|
|
|
|
3
|
|
4
|
Total
|
|
|
|
|
24
|
|
21
|
|
|
|
|
|
|
|
|
Aerospace Book-to-Bill:
|
|
|
|
|
|
|
|
Orders*
|
|
|
|
|
$
2,426
|
|
$
1,727
|
Revenue
|
|
|
|
|
2,084
|
|
1,892
|
Book-to-Bill Ratio
|
|
|
|
|
1.2x
|
|
0.9x
|
|
* Does
not include customer defaults, liquidated damages, cancellations,
foreign exchange fluctuations and other backlog
adjustments.
|
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SOURCE General Dynamics