MEDIA RELEASE PR36957
Spirit AeroSystems Holdings, Inc. Reports Third Quarter 2009 Financial Results; Reports
Revenues of US$1.054 Billion and 12.4% Operating Margins; Updates 2009 Financial
Guidance
WICHITA, Kan., Nov. 5 /PRNewswire-AsiaNet/ --
- Third quarter 2009 Revenues grew 3 percent to US$1.054 billion
- Operating Income grew 18 percent as Operating Margins expanded to 12.4
percent
- Fully Diluted Earnings Per Share increased 17 percent to US$0.62 per
share
- Cash and Cash Equivalents were US$207 million
- Total backlog of approximately US$28.2 billion
Spirit AeroSystems Holdings, Inc. (NYSE: SPR) reported third quarter 2009
financial results reflecting revenue and earnings growth as ship set
deliveries for large commercial aircraft increased from the same period of
2008.
Spirit's third quarter 2009 revenues increased to US$1.054 billion, up 3
percent from the same period last year. Operating income increased 18 percent
to US$131 million, up from US$111 million in the same period a year ago, as
revenues increased, operating efficiencies improved, and period expense
declined. Net income was US$87 million, or US$0.62 per fully diluted share,
up 18 percent from US$74 million, or US$0.53 per fully diluted share, in the
same period of 2008. (Table 1)
(All amounts in U.S. dollars unless otherwise specified)
Table 1. Summary Financial Results (Unaudited)
($ in Millions, 3rd Quarter Nine Months
except per share ----------- -----------
data) 2009 2008 Change 2009 2008 Change
----------------- ---- ---- ------ ---- ---- ------
Revenues $1,054 $1,027 3% $3,001 $3,126 (4%)
Operating Income $131 $111 18% $218 $378 (42%)
Operating Income
as a % of
Revenues 12.4% 10.8% 160 BPS 7.3% 12.1% (480) BPS
Net Income $87 $74 18% $142 $246 (42%)
Net Income as a
% of Revenues 8.3% 7.2% 110 BPS 4.7% 7.9% (320) BPS
Earnings per
Share (Fully
Diluted) $0.62 $0.53 17% $1.01 $1.76 (43%)
Fully Diluted
Weighted Avg
Share Count
(Millions) 140.2 139.1 140.0 139.2
"We executed well across the company as we delivered solid operating
performance in the third quarter," said President and Chief Executive Officer
Jeff Turner. "Our results reflect improving performance as revenues and
profitability increased and we recovered from the disrupted operations in the
previous three quarters caused by the Machinists' strike at Boeing and the
new ERP system implementation in the first half of 2009," Turner stated. "We
continue to support the 787 program and are preparing for production restart
and ramp-up. In addition, we continue to make good progress on other
development programs as we work to grow and diversify our company," Turner
added.
"While we have seen some stabilization in the global economic outlook, we
remain cautious regarding the outlook of the commercial aerospace market. Our
backlog remains strong and our strategy is on track to achieve long-term
value creation for our customers, shareholders, and employees," Turner
concluded.
Spirit's backlog at the end of the third quarter of 2009 was $28.2
billion, flat from the end of the second quarter of 2009, as Airbus and
Boeing third quarter backlog reductions were offset by a follow-on contract
at Spirit Europe for 777 wing components. Spirit calculates its backlog based
on contractual prices for products and volumes from the published firm order
backlogs of Airbus and Boeing, along with firm orders from other customers.
Spirit updated its contract profitability estimates during the third
quarter of 2009, resulting in a $2 million favorable cumulative catch-up
adjustment, compared to a $13 million unfavorable cumulative catch-up
adjustment for the third quarter of 2008, which was largely the result of the
Machinists' strike at Boeing.
Cash flow from operations was $5 million for the third quarter of 2009,
compared to $68 million for the third quarter of 2008, primarily due to a
decrease in cash advance receipts from customers of $48 million compared to
the same period of 2008. (Table 2)
Table 2. Cash Flow and Liquidity
3rd Quarter Nine Months
----------- -----------
($ in Millions) 2009 2008 2009 2008
--------------- ---- ---- ---- ----
Cash Flow from Operations $5 $68 ($211) $147
Purchases of Property, Plant &
Equipment ($51) ($56) ($158) ($175)
October 1, December 31,
Liquidity 2009 2008
---- ----
Cash $207 $217
Total Debt $884 $588
During the third quarter, Spirit issued $300 million in senior unsecured
notes with a coupon rate of 7.5% and a maturity in 2017. A portion of the
proceeds were used to pay down the outstanding revolver balance of $200
million prior to the close of the third quarter.
Cash balances at the end of the third quarter of 2009 were $207 million
and debt balances were $884 million. During the third quarter of 2009, the
company utilized its credit-line as it continued to invest in development
programs. All credit-line borrowings were paid down using a portion of the
funds from the issuance of the senior unsecured notes. At the end of the
third quarter of 2009, the company's $729 million revolving credit facility
was undrawn. Approximately $17 million of the credit facility is reserved for
financial letters of credit.
The company's credit ratings remained unchanged at the end of the third
quarter of 2009 with a BB rating at Standard & Poor's and a Ba3 rating at
Moody's.
2009 Outlook
Spirit revenue guidance for the full-year 2009 has been updated to
reflect movement of certain forecasted non-recurring contract settlements out
of 2009. Revenues are now expected to be between $4.1 and $4.2 billion based
on Boeing's 2009 delivery guidance of 480-485 aircraft; anticipated B787
deliveries consistent with our expectations following Boeing's announcement
of the revised B787 schedule on August 27, 2009; 2009 expected Airbus
deliveries of approximately 483 aircraft; internal Spirit forecasts for
non-OEM production activity and non-Boeing and Airbus customers; and foreign
exchange rates consistent with fourth quarter 2008 levels.
Fully diluted earnings per share for 2009 remains unchanged and is
expected to be between $1.45 and $1.55 per share after the increase in
interest expense and fees associated with the recently issued senior
unsecured notes.
Cash flow from operations less capital expenditures, net of customer
reimbursements, is now expected to be no more than a ($150) million use of
cash in the aggregate, with capital expenditures of approximately $225
million.
The effective tax rate is now forecasted to be approximately 30 percent
for 2009.
The guidance assumes the settlement and receipt of certain outstanding
non-recurring contract payments associated with our development programs. To
the extent these forecasted payments are not received during the fourth
quarter of 2009, they will represent a shift in revenues, earnings and cash
flows from 2009 to 2010. (Table 3)
Table 3.
Financial Outlook 2008 Actual 2009 Guidance Change
----------------- ----------- ------------- ------
Revenues $3.8 billion $4.1 - $4.2 billion 8% - 11%
Earnings Per Share
(Fully Diluted) $1.91 $1.45 - $1.55 (24%) - (19%)
Effective Tax Rate
(% Pre-Tax Earnings) 30.9% ~30%
Cash Flow From
Operations $211 million*
Capital Expenditures $236 million*
Customer Reimbursement $116 million*
*($150M) with ~$225 million of Capital Expenditures
Cautionary Statement Regarding Forward-Looking Statements
This press release contains "forward-looking statements." Forward-looking
statements reflect our current expectations or forecasts of future events.
Forward-looking statements generally can be identified by the use of
forward-looking terminology such as "may," "will," "expect," "anticipate,"
"intend," "estimate," "believe," "project," "continue," "plan," "forecast,"
or other similar words. These statements reflect management's current views
with respect to future events and are subject to risks and uncertainties,
both known and unknown. Our actual results may vary materially from those
anticipated in forward-looking statements. We caution investors not to place
undue reliance on any forward-looking statements. Important factors that
could cause actual results to differ materially from forward-looking
statements include, but are not limited to: our ability to continue to grow
our business and execute our growth strategy, including the timing and
execution of new programs; our ability to perform our obligations and manage
cost related to our new commercial and business aircraft development
programs; reduction in the build rates of certain Boeing aircraft including,
but not limited to, the B737 program, the B747 program, the B767 program and
the B777 program, and build rates of the Airbus A320 and A380 programs, which
could be affected by the impact of a deep recession on business and consumer
confidence and the impact of continuing turmoil in the global financial and
credit markets; declining business jet manufacturing rates and customer
cancellations or deferrals as a result of the weakened global economy; the
success and timely execution of key milestones such as first flight and
delivery of Boeing's new B787 and Airbus' new A350 aircraft programs,
including receipt of necessary regulatory approvals and customer adherence to
their announced schedules; our ability to enter into supply arrangements with
additional customers and the ability of all parties to satisfy their
performance requirements under existing supply contracts with Boeing, Airbus,
and other customers and the risk of nonpayment by such customers; any adverse
impact on Boeing's and Airbus' production of aircraft resulting from
cancellations, deferrals or reduced orders by their customers or labor
disputes; any adverse impact on the demand for air travel or our operations
from the outbreak of diseases such as the influenza outbreak caused by the
H1N1 virus, avian influenza, severe acute respiratory syndrome or other
epidemic or pandemic outbreaks; returns on pension plan assets and impact of
future discount rate changes on pension obligations; our ability to borrow
additional funds, or refinance debt; competition from original equipment
manufacturers and other aerostructures suppliers; the effect of governmental
laws, such as U.S. export control laws, the Foreign Corrupt Practices Act,
environmental laws and agency regulations, both in the U.S. and abroad; the
cost and availability of raw materials and purchased components; our ability
to successfully extend or renegotiate our primary collective bargaining
contracts with our labor unions; our ability to recruit and retain highly
skilled employees and our relationships with the unions representing many of
our employees; spending by the U.S. and other governments on defense; the
possibility that our cash flows and borrowing facilities may not be adequate
for our additional capital needs or for payment of interest on and principal
of our indebtedness; our exposure under our revolving credit facility to
higher interest payments should interest rates increase substantially; the
outcome or impact of ongoing or future litigation and regulatory actions; and
our exposure to potential product liability claims. These factors are not
exhaustive, and new factors may emerge or changes to the foregoing factors
may occur that could impact our business. Except to the extent required by
law, we undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.
Appendix
Segment Results
Fuselage Systems
Fuselage Systems segment revenues for the third quarter of 2009 were $526
million, up 9 percent over the same period last year, as deliveries in the
prior year quarter were impacted by the Machinists' strike at Boeing.
Operating margin for the third quarter of 2009 was 18.1 percent, up from 15.2
percent in the third quarter of 2008, as a favorable cumulative catch-up of
$4 million was realized during the quarter. During the third quarter of 2008,
the segment realized an unfavorable $11 million cumulative catch-up
adjustment.
Propulsion Systems
Propulsion Systems segment revenues for the third quarter of 2009 were
$266 million, down 9 percent over the same period last year due to fewer 747
deliveries and lower aftermarket sales. Operating margin for the third
quarter of 2009 was 13.3 percent, down from 16.2 percent in the third quarter
of 2008, primarily due to lower spares volumes. During the quarter, an
unfavorable cumulative catch-up of $1 million was realized.
Wing Systems
Wing Systems segment revenues for the third quarter of 2009 were $257
million, up 4 percent over the same period last year as increased deliveries
to Airbus and Boeing more than offset fewer Hawker 850XP deliveries.
Operating margin for the third quarter of 2009 was 10.3 percent, down from
10.9 percent in the third quarter of 2008, as an unfavorable cumulative
catch-up of $1 million was realized during the quarter. During the third
quarter of 2008, the segment realized an unfavorable $2 million cumulative
catch-up adjustment.
Table 4. Segment Reporting
(Unaudited) (Unaudited)
($ in Millions, 3rd Quarter Nine Months
except margin ----------- -----------
percent) 2009 2008 Change 2009 2008 Change
-------------- ---- ---- ------ ---- ---- ------
Segment Revenues
Fuselage
Systems $525.9 $484.8 8.5% $1,497.6 $1,470.2 1.9%
Propulsion
Systems $266.2 $291.5 (8.7%) $772.1 $863.1 (10.5%)
Wing
Systems $257.3 $246.8 4.3% $712.9 $773.5 (7.8%)
All Other $4.4 $4.1 7.3% $18.2 $18.9 (3.7%)
---- ---- --- ----- ----- ----
Total Segment
Revenues $1,053.8 $1,027.2 2.6% $3,000.8 $3,125.7 (4.0%)
Segment Earnings
from Operations
Fuselage
Systems $95.2 $73.5 29.5% $229.4 $255.0 (10.0%)
Propulsion
Systems $35.3 $47.1 (25.1%) $97.2 $140.9 (31.0%)
Wing
Systems $26.6 $26.9 (1.1%) ($12.7) $92.3 (113.8%)
All Other $1.0 $0.0 NA ($1.0) $0.1 (1,100.0%)
---- ---- --- ----- ---- --------
Total Segment
Operating
Earnings $158.1 $147.5 7.2% $312.9 $488.3 (35.9%)
Unallocated
Corporate
SG&A Expense ($26.7) ($35.6) (25.0%) ($92.9) ($109.7) (15.3%)
Unallocated
Research &
Development
Expense ($0.4) ($0.7) (42.9%) ($1.6) ($1.1) 45.5%
----- ----- ----- ----- ----- ----
Total Earnings
from Operations $131.0 $111.2 17.8% $218.4 $377.5 (42.1%)
Segment Operating
Earnings as
% of Revenues
Fuselage
Systems 18.1% 15.2% 290 BPS 15.3% 17.3% (200)BPS
Propulsion
Systems 13.3% 16.2% (290)BPS 12.6% 16.3% (370)BPS
Wing
Systems 10.3% 10.9% (60)BPS (1.8%) 11.9% (1,370)BPS
All Other 22.7% 0.0% 2,270 BPS (5.5%) 0.5% (600)BPS
---- --- --------- ---- --- --------
Total Segment
Operating
Earnings as %
of Revenues 15.0% 14.4% 60 BPS 10.4% 15.6% (520)BPS
Total Operating
Earnings as %
of Revenues 12.4% 10.8% 160 BPS 7.3% 12.1% (480)BPS
Spirit Ship Set Deliveries
(One Ship Set equals One Aircraft)
2008 Spirit AeroSystems Deliveries
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Total 2008
------- ------- ------- ------- ----------
B737 93 95 87 42 317
B747 4 7 4 1 16
B767 3 3 3 1 10
B777 20 22 18 8 68
B787 1 1 1 0 3
--- --- --- --- ---
Total 121 128 113 52 414
A320 Family 95 95 90 87 367
A330/340 24 21 23 22 90
A380 4 2 4 6 16
--- --- --- --- ---
Total 123 118 117 115 473
Hawker 850XP 15 24 24 28 91
--- --- --- --- ---
Total Spirit 259 270 254 195 978
=== === === === ===
2009 Spirit AeroSystems Deliveries
1st Qtr 2nd Qtr 3rd Qtr YTD 2009
------- ------- ------- --------
B737 74 96 93 263
B747 3 1 3 7
B767 3 3 3 9
B777 21 21 21 63
B787 2 2 2 6
--- --- --- ---
Total 103 123 122 348
A320 Family 105 101 94 300
A330/340 26 23 28 77
A380 0 2 5 7
--- --- --- ---
Total 131 126 127 384
Hawker 850XP 18 13 6 37
--- --- --- ---
Total Spirit 252 262 255 769
=== === === ===
Spirit AeroSystems Holdings, Inc.
Condensed Consolidated Statements of Operations
(unaudited)
For the For the For the For the
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
October 1, September 25, October 1, September 25,
2009 2008 2009 2008
---------- ----------- ---------- -----------
($ in millions, except per share data)
Net Revenues $1,053.8 $1,027.2 $3,000.8 $3,125.7
Operating costs and
expenses:
Cost of sales 878.3 864.3 2,637.2 2,596.1
Selling, general
and administrative 30.5 39.0 103.6 119.0
Research and
development 14.0 12.7 41.6 33.1
---- ---- ---- ----
Total Operating
Costs and Expenses 922.8 916.0 2,782.4 2,748.2
Operating Income 131.0 111.2 218.4 377.5
Interest expense and
financing fee
amortization (10.2) (9.9) (29.1) (29.5)
Interest income 1.6 4.4 6.2 15.1
Other income, net (0.5) (0.7) 5.2 0.9
---- ---- --- ---
Income Before
Income Taxes 121.9 105.0 200.7 364.0
Income tax provision (34.4) (31.0) (58.8) (118.4)
----- ----- ----- ------
Income Before
Equity in Net Loss
of Affiliate 87.5 74.0 141.9 245.6
Equity in net loss of
affiliate (0.2) - (0.2) -
---- --- ---- ---
Net Income $87.3 $74.0 $141.7 $245.6
===== ===== ====== ======
Earnings per share
Basic $0.63 $0.54 $1.03 $1.79
Shares 138.6 137.0 138.2 136.9
Diluted $0.62 $0.53 $1.01 $1.76
Shares 140.2 139.1 140.0 139.2
Spirit AeroSystems Holdings, Inc.
Condensed Consolidated Balance Sheets
(unaudited)
October 1, December 31,
2009 2008
---------- -----------
($ in millions)
Current assets
Cash and cash equivalents $206.7 $216.5
Accounts receivable, net 235.8 149.3
Current portion of long-term receivable 28.2 108.9
Inventory, net 2,204.6 1,882.0
Other current assets 85.8 76.6
---- ----
Total current assets 2,761.1 2,433.3
Property, plant and equipment, net 1,224.0 1,068.3
Pension assets 60.0 60.1
Other assets 238.6 198.6
----- -----
Total assets $4,283.7 $3,760.3
======== ========
Current liabilities
Accounts payable $421.2 $316.9
Accrued expenses 164.1 161.8
Current portion of long-term debt 6.7 7.1
Advance payments, short-term 194.3 138.9
Deferred revenue, short-term 59.3 110.5
Other current liabilities 25.8 8.1
---- ---
Total current liabilities 871.4 743.3
Long-term debt 583.5 580.9
Bonds payable, long-term 293.4 -
Advance payments, long-term 806.5 923.5
Deferred revenue and other deferred credits 54.3 58.6
Pension/OPEB obligation 49.1 47.3
Other liabilities 169.6 109.2
Shareholders' equity
Preferred stock, par value $0.01, 10,000,000
shares authorized, no shares issued and
outstanding - -
Common stock, Class A par value $0.01,
200,000,000 shares authorized, 104,819,957
and 103,209,466 issued and outstanding,
respectively 1.0 1.0
Common stock, Class B par value $0.01,
150,000,000 shares authorized, 36,216,211
and 36,679,760 shares issued and
outstanding, respectively 0.4 0.4
Additional paid-in capital 946.3 939.7
Minority interest 0.5 0.5
Accumulated other comprehensive loss (124.1) (134.2)
Retained earnings 631.8 490.1
----- -----
Total shareholders' equity 1,455.9 1,297.5
------- -------
Total liabilities and shareholders'
equity $4,283.7 $3,760.3
======== ========
Spirit AeroSystems Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited)
For the For the
Nine Months Nine Months
Ended Ended
October 1, September 25,
2009 2008
---------- -------------
($ in millions)
Operating activities
Net Income $141.7 $245.6
Adjustments to reconcile net income to net
cash provided by (used in) operating activities
Depreciation expense 91.9 90.8
Amortization expense 7.7 7.1
Accretion of long-term receivable (5.8) (13.0)
Employee stock compensation expense 6.7 11.6
Loss from the ineffectiveness of hedge
contracts - 0.4
(Gain) loss from foreign currency transactions (3.9) 0.3
Gain on disposition of assets - (0.2)
Deferred taxes (20.5) 0.9
Pension and other post-retirement
benefits, net 1.6 (21.5)
Grant income (1.4) -
Equity in net income of affiliate 0.2 -
Changes in assets and liabilities
Accounts receivable (84.6) (28.4)
Inventory, net (319.5) (432.9)
Accounts payable and accrued liabilities 104.9 30.5
Advance payments (61.6) 230.4
Deferred revenue and other deferred credits (54.9) 16.9
Other (13.8) 8.1
----- ---
Net cash provided by (used in) operating
activities (211.3) 146.6
------ -----
Investing Activities
Purchase of property, plant and equipment (158.0) (175.2)
Long-term receivable 86.5 87.1
Other 0.2 (0.7)
--- ----
Net cash (used in) investing activities (71.3) (88.8)
----- -----
Financing Activities
Proceeds from revolving credit facility 300.0 75.0
Payments on revolving credit facility (300.0) (75.0)
Proceeds from issuance of debt - 8.8
Proceeds from issuance of bonds 293.4 -
Proceeds from government grants 0.7 1.6
Principal payments of debt (5.8) (11.9)
Debt issuance and financing costs (17.2) (6.8)
----- ----
Net cash provided by (used in) financing
activities 271.1 (8.3)
----- ----
Effect of exchange rate changes on cash
and cash equivalents 1.7 (5.2)
--- ----
Net increase (decrease) in cash and cash
equivalents for the period (9.8) 44.3
Cash and cash equivalents, beginning of
the period 216.5 133.4
----- -----
Cash and cash equivalents, end of the period $206.7 $177.7
====== ======
SOURCE: Spirit AeroSystems
CONTACT: Investor Relations,
Alan Hermanson,
+1-316-523-7040, or
Media,
Debbie Gann,
+1-316-526-3910, both of Spirit AeroSystems
Translations:
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