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Rockwell Collins Increases EPS and Free Cash Flow Guidance for FY 2002; Company Provides Expectations for FY 2003
CEDAR RAPIDS, Iowa (September 18, 2002) - Rockwell Collins, Inc. (NYSE: COL) today updated its previous guidance for fiscal year 2002 that ends September 30, 2002.
The company now anticipates earnings per share for fiscal year 2002 to be in the range of $1.26 to $1.28. The earnings per
share guidance includes a net increase of $.03 related to the estimated outcome of certain legal matters. In addition, due
to continued strong management of working capital, the Company has increased its estimate of free cash flow for the year to
a range of $275 to $300 million from its previous guidance of $250 to $275 million. Sales for fiscal year 2002 are estimated
to be approximately $2.5 billion.
For fiscal year 2003, the Company anticipates revenues of approximately $2.6 billion with earnings per share between $1.33
and $1.38. Free cash flow generation for fiscal year 2003 is expected to be approximately $225 to $275 million.
Clay Jones, Chairman, President and CEO of Rockwell Collins commented on the announcement, "At the end of fiscal year 2001,
we moved quickly and decisively to realign the Company's operations in anticipation of the sharp and sudden decline in commercial
market revenues. We continue to streamline processes and eliminate waste throughout our organization, which will allow us
to increase margin expectations in the Commercial Systems business to a range of 14% to 15% for fiscal year 2003. In addition,
we anticipate continued strong margin performance in the range of 16% to 17% for our Government Systems business over the
same period."
The Company's fiscal year 2003 revenues and earnings per share estimates are primarily based on the following assumptions:
- Commercial Systems is expecting to see a revenue decline of approximately 2%.
- The Company expects Boeing and Airbus new aircraft production to be approximately 550 in the aggregate. Aftermarket revenues
in the Company's air transport avionics product line are anticipated to increase approximately 10% due to strengthening service
and support activity. Continued weakness in the in-flight entertainment (IFE) market will result in an approximate 25% decline
in IFE revenues in fiscal year 2003. Revenues from the air transport market for both avionics and IFE equipment for fiscal
year 2003 will be approximately 29% of total Company revenues.
- For the business and regional jet original equipment manufacturers market, Rockwell Collins anticipates a 10% increase in
revenues as higher regional jet build rates and revenues from the recent Airshow acquisition more than offset the anticipated
decline in business jet build rates. Aftermarket revenues are also expected to increase approximately 10% as a result of the
Airshow acquisition and higher service and support activity. Revenues from the business and regional jet market for fiscal
year 2003 will be approximately 22% of the Company total.
- Government Systems is expecting a 13% increase in revenue and will represent approximately 49% of total Company revenues for
fiscal year 2003. The Company anticipates significant growth in its integrated applications product line sales as the KC-135
aircraft retrofit program enters initial production along with continued growth in the communication, navigation and display
product lines.
"Despite the challenging commercial aerospace market, we remain committed to our research and development efforts that will
position Rockwell Collins for future growth," said Clay Jones. Total research and development which includes both Company
funded and customer funded will represent approximately 21% of total sales for fiscal year 2003.
Clay Jones will be making a presentation at the Morgan Stanley Aerospace & Defense and Multi-Industry Conference at 8:00 a.m.
Eastern Standard Time (EST) on September 19, 2002 and will be taking questions from the audience. The presentation will be
simultaneously broadcast over the Internet. Individuals may listen to the presentation on the Internet at www.rockwellcollins.com . Listeners are encouraged to go to the Investor Relations portion of the web site at least 15 minutes prior to the call
to download and install any necessary software. The presentation will be available for replay on the Internet at www.rockwellcollins.com through October 18, 2002.
This press release contains statements (including certain projections and business trends) that are forward-looking statements
as defined in the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those projected
as a result of certain risks and uncertainties, including, but not limited to, the impact of terrorist attacks and their aftermath;
the timing related to restoring consumer confidence in air travel; the health of the commercial aerospace industry and the
general economy; financial health of our customers; domestic and foreign government spending, budgetary and trade policies;
economic and political changes in international markets where the Company competes, such as changes in currency exchange rates,
inflation rates, recession, foreign ownership restrictions and other external factors over which the Company has no control;
demand for and market acceptance of new and existing products, including potential cancellation of orders by commercial customers;
successful development of advanced technologies; competitive product and pricing pressures; the Company's ability to successfully
execute its annual operating and strategic plans; and the uncertainities of litigation, as well as other risks and uncertainties,
including but not limited to those detailed from time to time in the Company's Securities and Exchange Commission filings.
These forward-looking statements are made only as of the date hereof.
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530-NR-64
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