- Q3 2021 GAAP diluted EPS of $0.11 and adjusted diluted EPS
of $0.13, compared to Q3 2020 GAAP diluted EPS of $0.12 and
adjusted diluted EPS of $(0.29).
- Q3 2021 Sales were $334 million, compared to $287 million in
Q3 2020.
- Free Cash Flow YTD of $49 million.
See Table C for reconciliation of GAAP and non-GAAP operating
income (loss), net income (loss), earnings (loss) per share and
operating cash flow to free cash flow. Free cash flow is cash from
operations less capital expenditures.
Hexcel Corporation (NYSE: HXL):
Summary of Results from Operations
Quarters Ended
Nine Months Ended
September 30,
September 30,
(In millions, except per share data)
2021
2020
% Change
2021
2020
% Change
Net Sales
$
333.8
$
286.9
16.3
%
$
964.4
$
1,206.6
(20.1
)%
Net sales change in constant currency
15.9
%
(21.1
)%
Operating Income (Loss)
22.8
(37.6
)
160.6
%
28.8
34.5
(16.5
)%
Net Income (Loss)
9.0
9.7
(7.2
)%
(2.8
)
51.1
(105.5
)%
Diluted net income (loss) per common
share
$
0.11
$
0.12
(8.3
)%
$
(0.03
)
$
0.61
(104.9
)%
Non-GAAP measures for year-over-year
comparison (Table C)
Adjusted Operating Income (Loss)
$
23.6
$
(21.8
)
208.3
%
$
44.8
$
78.1
(42.6
)%
As a % of sales
7.1
%
(7.6
)%
4.6
%
6.5
%
Adjusted Net Income (Loss)
11.0
(24.3
)
145.3
%
9.7
35.9
(73.0
)%
Adjusted diluted net income (loss) per
share
$
0.13
$
(0.29
)
144.8
%
$
0.11
$
0.43
(74.4
)%
Hexcel Corporation (NYSE: HXL) today reported third quarter 2021
results including net sales of $334 million and adjusted diluted
EPS of $0.13 per share.
Chairman, CEO and President Nick Stanage said, "We are pleased
to report another quarter demonstrating steady and continued growth
in sales and earnings which we are confident will extend for many
quarters to come. Sales of $334 million are another positive
step-up sequentially and year over year with supply chain
destocking now largely behind us. Adjusted EPS of 13 cents in the
quarter reflects our on-going commitment to deliver productivity
improvements through Operational Excellence, our relentless focus
on controlling costs following the decisive cost alignment actions
taken early in the pandemic and a positive sales mix. We are well
positioned and ready to support increasing aircraft build rates in
the months and years ahead.”
Mr. Stanage continued, “We are closely monitoring our supply
chain and have our global supply chain team focused on managing the
continued availability of raw materials through these challenging
times. Thanks to our long-term supply contracts and commodity
hedging, we did not experience any noticeable cost inflation during
the third quarter, yet we remain vigilant. Our balance sheet
remains strong as we continue to de-leverage. As a team, we are
excited about the aerospace recovery as we prepare for a
significant step-up in demand in 2022 and continued growth ahead,
supported by the secular adoption of composite lightweighting and
Hexcel’s broad and expanding product portfolio, and deep customer
relationships.”
Markets
Sales in the third quarter of 2021 were $333.8 million compared
to $286.9 million in the third quarter of 2020.
Commercial Aerospace
- Commercial Aerospace sales of $167.2 million increased 29.8%
(also 29.8% in constant currency) for the quarter compared to the
third quarter of 2020 on strengthening narrowbody sales.
- Sales to “Other Commercial Aerospace,” which include regional
and business aircraft, increased 9.4% for the third quarter of 2021
compared to the third quarter of 2020, led by business jet sales
growth.
Space & Defense
- Space & Defense sales of $110.4 million increased 1.5%
(1.4% in constant currency) for the quarter as compared to 2020.
F-35, CH-53K, civil helicopters in Europe and unmanned aerial
vehicles in the U.S. were areas of strength in the third
quarter.
Industrial
- Total Industrial sales of $56.2 million in the third quarter of
2021 increased 14.0% (11.7% in constant currency) compared to the
third quarter of 2020. The automotive and recreation markets both
grew strongly year-over-year. Additionally, sales growth was
supported by actions to direct carbon fiber capacity to industrial
markets.
- Wind energy sales (the largest submarket in Industrial),
experienced a decline of 31.6% in constant currency compared to the
third quarter of 2020 as wind energy demand remains subdued and
from the cessation of sales in North America.
Consolidated Operations
Gross margin for the third quarter was 19.8% compared to 4.7% in
the prior year period due to a favorable sales mix oriented towards
carbon fiber combined with the benefits of prior cost reduction
actions that reduced the overhead cost base. As a percentage of
sales, selling, general and administrative and R&T expenses for
the third quarter of 2021 were 12.7% compared to 12.3% for the
third quarter of 2020. Other operating expenses included
restructuring costs. Adjusted operating income in the third quarter
of 2021 was $23.6 million or 7.1% of sales, compared to an adjusted
operating loss of $21.8 million, or (7.6%) of sales in 2020. The
impact of exchange rates on operating income as a percent of sales
was favorable by approximately one hundred basis points in the
third quarter of 2021 compared to 2020.
Year-to-Date 2021
Results
Sales of $964.4 million for the nine-month period ended
September 30, 2021 decreased 20.1% (21.1% in constant currency)
compared to the same period in 2020.
Commercial Aerospace (49% of YTD sales)
- Commercial Aerospace sales of $468.5 million decreased 32.6%
(33.0% in constant currency) compared to the first nine months of
2020. Sales were higher in the prior year period as the impact of
production cuts and destocking due to the pandemic did not begin
until the second quarter of 2020.
- Sales to “Other Commercial Aerospace,” which include regional
and business aircraft customers, decreased 28.6% year to date.
Space & Defense (34% of YTD sales)
- Space & Defense sales of $329 million were unchanged (0.8%
lower in constant currency) compared to the first nine months of
2020.
Industrial (17% of YTD sales)
- Total Industrial sales of $166.9 million decreased 8.4% (12.4%
in constant currency) compared to the first nine months of
2020.
- For the first nine months of 2021, wind energy sales decreased
40.3% in constant currency compared to last year reflecting lower
demand and the cessation of sales in North America.
Consolidated Operations
Gross margin for nine months ended September 30, 2021 was 18.8%
compared to 17.3% in the prior year period. Selling, general and
administrative and R&T expenses for the first nine months of
2021 increased approximately 4% compared to the prior year period;
however, were 18.0% lower than the comparable period in 2019. Other
operating expenses for the nine months ended September 30, 2021
were $16.0 million and included expense primarily related to
severance and restructuring. Other operating expenses for the nine
months ended September 30, 2020 were $43.6 million and included
expenses related to severance and the terminated merger with
Woodward, Inc. Adjusted operating income for the first nine months
of 2021 was $44.8 million, or 4.6% of sales, compared to $78.1
million, or 6.5% of sales in 2020. The impact of exchange rates on
operating income as a percent of sales for the first nine months of
2021 was favorable by approximately forty basis points compared to
2020.
Cash, 2021 Guidance Update and
other
- The effective tax rate for the third quarter of 2021 was 38.3%
and included a discrete tax charge of $1.3 million primarily
related to the remeasurement of the net U.S. state deferred tax
liabilities. The tax expense for the nine months ended September
30, 2021 was $1.6 million and included a net discrete tax charge of
$0.8 million primarily resulting from the revaluation of U.S. and
foreign deferred tax liabilities. The tax benefit for the quarter
ended September 30, 2020 was $56.9 million and included a $46.2
million benefit primarily due to the release of a valuation
allowance in a foreign jurisdiction due to a legal entity
rationalization and treasury realignment initiative. The tax
benefit of $48.7 million for the first nine months of 2020 also
included a $2.7 million benefit primarily for the release of
reserves of unrecognized tax benefits as a result of tax audit
settlements. The expected underlying effective tax rate for the
remainder of 2021 continues to be 23%.
- Net cash generated from operating activities for the nine
months ended September 30, 2021 was $64.2 million, compared to
$157.0 million for the comparable period in 2020. Capital
expenditures on a cash basis were $15.0 million for the first nine
months of 2021 compared to $47.8 million for the first nine months
of 2020. Free cash flow was $49.2 million for the first nine months
of 2021 compared to $109.2 million for the first nine months of
2020. Working capital was a cash use of $46.0 million for the first
nine months of 2021 compared to a source of $28.7 million for the
first nine months of 2020. Free cash flow is defined as cash
generated from operating activities less cash paid for capital
expenditures.
- Share repurchases are restricted per the second amendment to
the Revolver facility that was executed in January 2021. The
remaining authorization under the share repurchase program at
September 30, 2021 was $217 million. The quarterly dividend remains
temporarily suspended. The Board of Directors will continue to
evaluate capital allocation strategies on at least a quarterly
basis.
- The Company continues to withhold financial guidance due to
continuing market uncertainties arising from the global
pandemic.
Hexcel will host a conference call at 10:00 a.m. ET, on October
19, 2021 to discuss third quarter 2021 results. The event will be
webcast via the Investor Relations webpage at www.Hexcel.com. The
event can also be accessed by dialing +1 (646) 960-0452. The
conference ID is 3428143. Replays of the call will be available on
the website.
Hexcel Corporation is a leading advanced composites company. It
develops, manufactures and markets lightweight, high-performance
structural materials, including carbon fibers, specialty
reinforcements, prepregs and other fiber-reinforced matrix
materials, honeycomb, adhesives, engineered core and composite
structures, used in commercial aerospace, space and defense and
industrial applications. Learn more at www.Hexcel.com.
Disclaimer on Forward Looking Statements
This news release contains statements that are forward looking
within the meaning of the Private Securities Litigation Reform Act
of 1995, including statements relating to the estimates and
expectations based on aircraft production rates provided by Airbus,
Boeing and others; the revenues we may generate from an aircraft
model or program; the impact of the possible push-out in deliveries
of the Airbus and Boeing backlog and the impact of delays in the
startup or ramp-up of new aircraft programs or the final Hexcel
composite material content once the design and material selection
have been completed; expectations with regard to the build rate of
the Boeing 737 MAX following its return to service and the related
impact on our revenues; expectations with regard to the timing of
inventory destocking resulting from the pandemic-related decrease
in customer demand; expectations with regard to raw material cost
and availability; expectations of composite content on new
commercial aircraft programs and our share of those requirements;
expectations regarding revenues from space and defense
applications, including whether certain programs might be curtailed
or discontinued; expectations regarding sales for wind energy,
recreation, automotive and other industrial applications;
expectations regarding working capital trends and expenditures and
inventory levels; expectations as to the level of capital
expenditures and completion of capacity expansions and
qualification of new products; expectations regarding our ability
to maintain and improve margins; projections regarding our tax
rate; expectations with regard to the continued impact of the
COVID-19 pandemic on worldwide air travel and aircraft programs, as
well as on our customers and suppliers and, in turn, on our
operations and financial results; and the anticipated impact of the
above factors and various market risks on our expectations of
financial results for 2021 and beyond. Actual results may differ
materially from the results anticipated in the forward looking
statements due to a variety of factors, including but not limited
to the impact of the COVID-19 pandemic, including continued
disruption in global financial markets, ongoing restrictions on
movement and travel, employee absenteeism and reduced demand for
air travel, on the operations, business and financial condition of
Hexcel and its customers and suppliers; reductions in sales to any
significant customers, particularly Airbus or Boeing, including
reduction in revenue related to the timing of ramp-up of production
of the Boeing 737 MAX, as well as due to the impact of the COVID-19
pandemic; inability to effectively adjust production and inventory
levels to align with customer demand; inability to effectively
motivate, retain and hire the necessary workforce; inability to
successfully implement or realize our business strategies, plans
and objectives of management, including any restructuring or
alignment activities in which we may engage; the impact of any
government mandated COVID-19 precautions, including mandatory
vaccination; timing of inventory destocking caused by the COVID-19
pandemic; changes in sales mix; changes in current pricing and cost
levels; changes in aerospace delivery rates; changes in government
defense procurement budgets; changes in military aerospace program
technology; timely new product development or introduction;
industry capacity; increased competition; availability and cost of
raw materials; supply chain disruptions; inability to install,
staff and qualify necessary capacity or complete capacity
expansions to meet customer demand; cybersecurity breaches or
intrusions; currency exchange rate fluctuations; changes in
political, social and economic conditions, including, but not
limited to, the effect of change in global trade policies and the
impact of the exit of the U.K. from the European Union; work
stoppages or other labor disruptions; unexpected outcome of legal
matters or impact of changes in laws or regulations. Additional
risk factors are described in our filings with the Securities and
Exchange Commission. We do not undertake an obligation to update
our forward-looking statements to reflect future events.
Hexcel Corporation and
Subsidiaries
Condensed Consolidated Statements of
Operations
Unaudited
Quarters Ended
Nine Months Ended
September 30,
September 30,
(In millions, except per share data)
2021
2020
2021
2020
Net sales
$
333.8
$
286.9
$
964.4
$
1,206.6
Cost of sales
267.8
273.4
783.4
997.3
Gross margin
66.0
13.5
181.0
209.3
% Gross Margin
19.8
%
4.7
%
18.8
%
17.3
%
Selling, general and administrative
expenses
32.0
24.6
102.7
95.2
Research and technology expenses
10.4
10.7
33.5
36.0
Other operating expense
0.8
15.8
16.0
43.6
Operating income
22.8
(37.6
)
28.8
34.5
Interest expense, net
9.5
9.7
29.1
32.4
Income (loss) before income taxes, and
equity in earnings of affiliated companies
13.3
(47.3
)
(0.3
)
2.1
Income tax expense (benefit)
5.1
(56.9
)
1.6
(48.7
)
Income (loss) before equity in earnings of
affiliated companies
8.2
9.6
(1.9
)
50.8
Equity in earnings (losses) from
affiliated companies
0.8
0.1
(0.9
)
0.3
Net income (loss)
$
9.0
$
9.7
$
(2.8
)
$
51.1
Basic net income (loss) per common
share:
$
0.11
$
0.12
$
(0.03
)
$
0.61
Diluted net income (loss) per common
share:
$
0.11
$
0.12
$
(0.03
)
$
0.61
Weighted-average common shares:
Basic
84.1
83.8
84.1
83.7
Diluted
84.7
84.0
84.1
84.0
Hexcel Corporation and
Subsidiaries
Condensed Consolidated Balance
Sheets
Unaudited
September 30,
December 31,
(In millions)
2021
2020
Assets
Cash and cash equivalents
$
105.8
$
103.3
Accounts receivable, net
176.6
125.4
Inventories, net
244.5
213.5
Contract assets
38.4
43.1
Prepaid expenses and other current
assets
42.0
38.0
Assets held for sale
12.6
12.6
Total current assets
619.9
535.9
Property, plant and equipment
3,104.9
3,139.7
Less accumulated depreciation
(1,344.1
)
(1,265.5
)
Net property, plant and equipment
1,760.8
1,874.2
Goodwill and other intangible assets,
net
269.9
277.8
Investments in affiliated companies
43.0
44.7
Other assets
179.0
185.2
Total assets
$
2,872.6
$
2,917.8
Liabilities and Stockholders'
Equity
Liabilities:
Short-term borrowings
$
0.9
$
0.9
Accounts payable
90.1
70.0
Accrued compensation and benefits
64.7
43.2
Accrued liabilities
69.2
69.0
Total current liabilities
224.9
183.1
Long-term debt
876.4
925.5
Retirement obligations
53.2
53.9
Other non-current liabilities
223.8
245.1
Total liabilities
$
1,378.3
$
1,407.6
Stockholders' equity:
Common stock, $0.01 par value, 200.0
shares authorized, 110.0 shares issued at September 30, 2021 and
109.7 shares issued at December 31, 2020
$
1.1
$
1.1
Additional paid-in capital
873.4
849.7
Retained earnings
1,993.6
1,996.4
Accumulated other comprehensive loss
(93.8
)
(59.6
)
2,774.3
2,787.6
Less – Treasury stock, at cost, 26.1
shares at both September 30, 2021 and December 31, 2020
(1,280.0
)
(1,277.4
)
Total stockholders' equity
1,494.3
1,510.2
Total liabilities and stockholders'
equity
$
2,872.6
$
2,917.8
Hexcel Corporation and
Subsidiaries
Condensed Consolidated Statements of
Cash Flows
Unaudited
Nine Months Ended
September 30,
(In millions)
2021
2020
Cash flows from operating
activities
Net (loss) income
$
(2.8
)
$
51.1
Reconciliation to net cash provided by
operating activities:
Depreciation and amortization
102.4
106.0
Amortization related to financing
2.7
0.7
Deferred income taxes
(3.2
)
(46.0
)
Equity in earnings from affiliated
companies
0.9
(0.3
)
Stock-based compensation
16.2
13.0
Merger and restructuring expenses, net of
payments
(4.4
)
13.3
Changes in assets and liabilities:
(Increase) decrease in accounts
receivable
(55.6
)
81.0
(Increase) decrease in inventories
(37.3
)
74.2
Decrease in prepaid expenses and other
current assets
3.6
1.5
Increase (decrease) in accounts
payable/accrued liabilities
43.3
(128.0
)
Other - net
(1.6
)
(9.5
)
Net cash provided by operating activities
(a)
64.2
157.0
Cash flows from investing
activities
Capital expenditures (b)
(15.0
)
(47.8
)
Net cash used for investing activities
(15.0
)
(47.8
)
Cash flows from financing
activities
Net (repayments) borrowing from senior
unsecured credit facilities
(49.0
)
(11.0
)
Repayments of Euro term loan
-
(49.9
)
Repayment of finance lease obligation and
other debt, net
(0.7
)
(0.4
)
Issuance costs related to senior credit
facility
(1.3
)
Dividends paid
-
(14.2
)
Repurchase of stock
-
(24.6
)
Activity under stock plans
4.9
(5.5
)
Net cash (used for) provided by financing
activities
(44.8
)
(106.9
)
Effect of exchange rate changes on cash
and cash equivalents
(1.9
)
1.3
Net increase in cash and cash
equivalents
2.5
3.6
Cash and cash equivalents at beginning of
period
103.3
64.4
Cash and cash equivalents at end of
period
$
105.8
$
68.0
Supplemental data:
Free Cash Flow (a)+(b)
$
49.2
$
109.2
Accrual basis additions to property, plant
and equipment
$
14.3
$
39.4
Hexcel Corporation and
Subsidiaries
Net Sales to Third-Party Customers by
Market
Quarters Ended September 30, 2021 and
2020
Unaudited
Table A
(In millions)
As Reported
Constant Currency (a)
B/(W)
FX
B/(W)
Market
2021
2020
%
Effect (b)
2020
%
Commercial Aerospace
$
167.2
$
128.8
29.8
$
-
$
128.8
29.8
Space & Defense
110.4
108.8
1.5
0.1
108.9
1.4
Industrial
56.2
49.3
14.0
1.0
50.3
11.7
Consolidated Total
$
333.8
$
286.9
16.3
$
1.1
$
288.0
15.9
Consolidated % of Net Sales
%
%
%
Commercial Aerospace
50.1
44.9
44.7
Space & Defense
33.1
37.9
37.8
Industrial
16.8
17.2
17.5
Consolidated Total
100.0
100.0
100.0
Nine Months Ended September 30, 2021
and 2020
Unaudited
(In millions)
As Reported
Constant Currency (a)
B/(W)
FX
B/(W)
Market
2021
2020
%
Effect (b)
2020
%
Commercial Aerospace
$
468.5
$
695.6
(32.6
)
$
4.1
$
699.7
(33.0
)
Space & Defense
329.0
328.8
0.1
2.8
331.6
(0.8
)
Industrial
166.9
182.2
(8.4
)
8.4
190.6
(12.4
)
Consolidated Total
$
964.4
$
1,206.6
(20.1
)
$
15.3
$
1,221.9
(21.1
)
Consolidated % of Net Sales
%
%
%
Commercial Aerospace
48.6
57.6
57.3
Space & Defense
34.1
27.3
27.1
Industrial
17.3
15.1
15.6
Consolidated Total
100.0
100.0
100.0
(a)
To assist in the analysis of the
Company’s net sales trend, total net sales and sales by market for
the quarter and nine months ended September 30, 2020 have been
estimated using the same U.S. dollar, British pound and Euro
exchange rates as applied for the respective period in 2021 and are
referred to as “constant currency” sales.
(b)
FX effect is the estimated impact
on “as reported” net sales due to changes in foreign currency
exchange rates.
Hexcel Corporation and
Subsidiaries
Segment Information
Unaudited
Table B
(In millions)
Composite Materials
Engineered Products
Corporate & Other
(a)
Total
Third Quarter 2021
Net sales to external customers
$
254.1
$
79.7
$
-
$
333.8
Intersegment sales
15.0
0.4
(15.4
)
-
Total sales
269.1
80.1
(15.4
)
333.8
Other operating expense
0.8
-
-
0.8
Operating income (loss)
30.0
6.5
(13.7
)
22.8
% Operating margin
11.1
%
8.1
%
6.8
%
Depreciation and amortization
30.1
3.6
-
33.7
Stock-based compensation expense
0.7
0.1
2.1
2.9
Accrual based additions to capital
expenditures
3.7
2.8
-
6.5
Third Quarter 2020
Net sales to external customers
$
215.7
$
71.2
$
-
$
286.9
Intersegment sales
7.8
0.7
(8.5
)
-
Total sales
223.5
71.9
(8.5
)
286.9
Other operating expense
16.4
-
(0.6
)
15.8
Operating income (loss)
(36.6
)
(2.7
)
1.7
(37.6
)
% Operating margin
(16.4
)%
(3.8
)%
(13.1
)%
Depreciation and amortization
31.7
3.9
-
35.6
Stock-based compensation expense
1.5
0.5
(1.7
)
0.3
Accrual based additions to capital
expenditures
4.7
1.3
-
6.0
First Nine Months 2021
Net sales to external customers
$
732.2
$
232.2
$
-
$
964.4
Intersegment sales
42.8
1.8
(44.6
)
-
Total sales
775.0
234.0
(44.6
)
964.4
Other operating expense
16.3
(0.5
)
0.2
16.0
Operating income (loss)
61.9
17.1
(50.2
)
28.8
% Operating margin
8.0
%
7.3
%
3.0
%
Depreciation and amortization
91.4
10.9
0.1
102.4
Stock-based compensation expense
2.1
0.4
13.7
16.2
Accrual based additions to capital
expenditures
10.7
3.6
-
14.3
First Nine Months 2020
Net sales to external customers
$
960.4
$
246.2
$
-
$
1,206.6
Intersegment sales
48.0
1.6
(49.6
)
-
Total sales
1,008.4
247.8
(49.6
)
1,206.6
Other operating expense
25.5
2.7
15.4
43.6
Operating income (loss)
75.0
3.3
(43.8
)
34.5
% Operating margin
7.4
%
1.3
%
2.9
%
Depreciation and amortization
94.3
11.6
0.1
106.0
Stock-based compensation expense
5.9
1.6
5.5
13.0
Accrual based additions to capital
expenditures
35.4
4.0
-
39.4
(a) Hexcel does not allocate corporate expenses to the operating
segments.
Hexcel Corporation and
Subsidiaries
Reconciliation of GAAP to Non-GAAP
Operating Income (Loss), Net Income (Loss), EPS and Operating Cash
Flow to Free Cash Flow
Table C
Unaudited
Quarters Ended
Nine Months Ended
September 30,
September 30,
(In millions)
2021
2020
2021
2020
GAAP operating income (loss)
$
22.8
$
(37.6
)
$
28.8
$
34.5
Other operating expense (a)
0.8
15.8
16.0
43.6
Non-GAAP operating income (loss)
$
23.6
$
(21.8
)
$
44.8
$
78.1
Unaudited
Quarters Ended September 30,
2021
2020
(In millions, except per diluted share
data)
Net Income
EPS
Net (Loss) Income
EPS
GAAP
$
9.0
$
0.11
$
9.7
$
0.12
Other operating expense (a)
0.7
-
12.2
0.14
Tax expense (benefit) (b)
1.3
0.02
(46.2
)
(0.55
)
Non-GAAP
$
11.0
$
0.13
$
(24.3
)
$
(0.29
)
Unaudited
Nine Months Ended September
30,
2021
2020
(In millions, except per diluted share
data)
Net Loss
EPS
Net Income
EPS
GAAP
$
(2.8
)
$
(0.03
)
$
51.1
$
0.61
Other operating expense (a)
11.7
0.14
33.7
0.40
Tax benefit (b)
0.8
-
(48.9
)
(0.58
)
Non-GAAP
$
9.7
$
0.11
$
35.9
$
0.43
Unaudited
Nine Months Ended September
30,
(In millions)
2021
2020
Net cash provided by operating
activities
$
64.2
$
157.0
Less: Capital expenditures
(15.0
)
(47.8
)
Free cash flow (non-GAAP)
$
49.2
$
109.2
(a)
The quarter and nine months ended
September 30, 2021 included restructuring costs primarily related
to severance. The nine months ended September 30, 2021 also
included a benefit related to the reduction of a contingent
liability. The quarter and nine months ended September 30, 2020
included restructuring costs. The nine months ended September 30,
2020 also included costs related to the terminated merger with
Woodward, Inc.
(b)
The quarter ended September 30, 2021
included a $1.3 million discrete tax charge related to the
remeasurement of net U.S. state deferred tax liabilities. The nine
months ended September 30, 2021 included a discrete tax benefit of
$3.2 million from the revaluation of deferred tax liabilities
related to a favorable U.S. state tax law change and a $2.7 million
discrete tax charge related to the remeasurement of the deferred
tax liability in a foreign jurisdiction. The tax benefit for the
third quarter of 2020 reflects a discrete tax benefit of $46.2
million due to the release of a valuation allowance in a foreign
jurisdiction as a result of a legal entity rationalization and
treasury realignment initiative. The tax benefit for the nine
months ended September 30, 2020 also included a $2.7 million
benefit, primarily for the release of reserves of unrecognized tax
benefits, as a result of tax audit settlements in the second
quarter of 2020.
NOTE: Management believes that adjusted operating income,
adjusted net income (loss), adjusted diluted net income (loss) per
share, the adjusted tax rate, and free cash flow, which are
non-GAAP measures, are meaningful to investors because they provide
a view of Hexcel with respect to the underlying operating results
excluding special items. Special items represent significant
charges or credits that are important to an understanding of
Hexcel’s overall operating results in the periods presented.
Non-GAAP measurements are not recognized in accordance with
generally accepted accounting principles and should not be viewed
as an alternative to GAAP measures of performance.
Hexcel Corporation and
Subsidiaries
Schedule of Total Debt, Net of
Cash
Table D
Unaudited
September 30,
December 31,
September 30,
(In millions)
2021
2020
2020
Current portion finance lease
$
0.9
$
0.9
$
0.5
Total current debt
0.9
0.9
0.5
Senior unsecured credit facility
179.0
228.0
302.0
4.7% senior notes due 2025
300.0
300.0
300.0
3.95% senior notes due 2027
400.0
400.0
400.0
Senior notes original issue discounts
(1.3
)
(1.5
)
(1.5
)
Senior notes deferred financing costs
(3.0
)
(3.5
)
(3.7
)
Other debt
1.7
2.5
1.9
Total long-term debt
876.4
925.5
998.7
Total Debt
877.3
926.4
999.2
Less: Cash and cash equivalents
(105.8
)
(103.3
)
(68.0
)
Total debt, net of cash
$
771.5
$
823.1
$
931.2
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211018005956/en/
Kurt Goddard, Vice President – Investor Relations (203) 352-6826
Kurt.Goddard@Hexcel.com
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