Breeze-Eastern Reports Fiscal 2008 First Quarter Results
August 01 2007 - 9:23AM
Business Wire
Breeze-Eastern Corporation (AMEX: BZC) today reported that net
income for the 2008 fiscal first quarter increased to $641 thousand
from $18 thousand in the prior-year period or income of $.07 per
diluted share in the 2008 fiscal first quarter compared to $.00 per
diluted share in the prior-year period which had included a pretax
charge of $1.3 million related to the refinancing of the Company�s
debt. Operating income for the first quarter of fiscal 2008 was
$2.0 million compared to $2.7 million for the first quarter of
fiscal 2007. Sales of $16.3 million in the fiscal first quarter of
2008 were essentially the same as the prior-year period. Adjusted
EBITDA, as described under �Non-GAAP Financial Measures� in this
press release, for the first quarter of fiscal 2008 was $2.3
million versus last year�s $3.0 million. New orders received during
the 2008 fiscal first quarter were $8.1 million compared to $47.6
million in the prior fiscal year�s first quarter. The Company�s
book-to-bill ratio for the 2008 first quarter was 0.5, compared
with 2.9 in last year�s first quarter and 1.4 for the full fiscal
year 2007. New orders received in the first quarter of fiscal 2007
included a $21.5 million order related to the Airbus A400M Military
Transport Aircraft program which is expected to commence shipping
in calendar year 2009 and continue through 2020. Robert L. G.
White, President and Chief Executive Officer of the Company, said,
�While overall sales in the first quarter of fiscal 2008 were equal
to last year, the strong demand we had seen for spare parts
softened which resulted in a significant shift in the mix of
product sold. As a consequence, new equipment represented 53% of
the product sold in the fiscal first quarter 2008 versus 42% for
the same period last year. In addition, the fiscal first quarter of
2007 included shipments of certain new equipment that carried
higher margins than normal. The gross margin of 40% in the fiscal
first quarter of 2008 versus 46% for the same period last year
reflects this shift as our sales of aftermarket products have
substantially higher margins than our sales of new equipment.
However, we expect the shipment pattern to shift back to more
historical trends provided there is not a recurrence of the delays
associated with the approval of the 2007 Federal government defense
budget. We believe that this temporary situation has resulted in at
least some of our order rate slowdown. The decrease in general,
administrative and selling expenses is due to generally lower
expenses in most of the major cost centers. Our debt, net of cash
on hand, at the end of the first quarter of fiscal 2008 was $36.9
million, a decrease of $2.1 million from March 31, 2007.� Outlook
for Fiscal 2008 Unchanged Mr. White concluded, �We continue to
remain bullish on the remainder of the fiscal year. We have
initiated certain cost cutting measures in the second quarter that
we believe will help our bottom line. In addition, heightened
prudence will be exercised regarding discretionary spending until
the shift in order patterns I mentioned earlier materializes. We
remain committed to meeting our previously stated targets for
fiscal 2008 of $77.0 million in sales, and Adjusted EBITDA of
approximately $15.9 million.� Breeze-Eastern Corporation
(http://www.breeze-eastern.com) is the world�s leading designer and
manufacturer of sophisticated lifting devices for military and
civilian aircraft, including rescue hoists, cargo hooks, and
weapons-lifting systems. The Company, formerly known as
TransTechnology Corporation, which employs approximately 180 people
at its facility in Union, New Jersey, reported sales of $73.3
million in the fiscal year ended March 31, 2007. Non�GAAP Financial
Measures In addition to disclosing financial results that are
determined in accordance with Generally Accepted Accounting
Principles (�GAAP�), the Company also discloses operating income
(gross profit less general, administrative and selling expenses)
and Adjusted EBITDA (earnings before interest, taxes, depreciation
and amortization, interest and other income/expense and loss on
extinguishment of debt). These are presented as supplemental
measures of performance. The Company presents Adjusted EBITDA
because it considers it an important supplemental measure of
performance. Measures similar to Adjusted EBITDA are widely used by
the Company and by others in the Company's industry to evaluate
performance and price potential acquisition candidates. The Company
believes Adjusted EBITDA facilitates operating performance
comparisons from period to period and company to company by backing
out potential differences caused by variations in capital structure
(affecting relative interest expense), tax positions (such as the
impact on periods or companies of changes in effective tax rates or
net operating losses) and the age and book depreciation of
facilities and equipment (affecting relative depreciation expense).
The Company also presents Adjusted EBITDA because it believes it is
frequently used by investors and other interested parties as a
basis for evaluating performance to formulate investment decisions.
Adjusted EBITDA has limitations as an analytical tool, and should
not be considered in isolation or as a substitute for analysis of
the Company's results as reported under GAAP. Some of the
limitations of Adjusted EBITDA are that (i) it does not reflect the
Company's cash expenditures for capital assets, (ii) it does not
reflect the significant interest expense or cash requirements
necessary to service interest or principal payments on the
Company's debt, and (iii) it does not reflect changes in, or cash
requirements for, the Company's working capital. Furthermore, other
companies in the aerospace and defense industry may calculate these
measures differently than the manner presented above. Accordingly,
the Company focuses primarily on its GAAP results and uses Adjusted
EBITDA only supplementally. INFORMATION ABOUT FORWARD-LOOKING
STATEMENTS Certain statements in this press release constitute
�forward-looking statements� within the meaning of the Securities
Act of 1933, as amended, and the Securities Exchange Act of 1934,
as amended (the "Acts"). Any statements contained herein that are
not statements of historical fact are deemed to be forward-looking
statements. The forward-looking statements in this press release
are based on current beliefs, estimates and assumptions concerning
the operations, future results, and prospects of the Company. As
actual operations and results may materially differ from those
assumed in forward-looking statements, there is no assurance that
forward-looking statements will prove to be accurate.
Forward-looking statements are subject to the safe harbors created
in the Acts. Any number of factors could affect future operations
and results, including, without limitation competition from other
companies; changes in applicable laws, rules and regulations
affecting the Company in the locations in which it conducts its
business; the availability of equity and/or debt financing in the
amounts and on the terms necessary to support the Company�s future
business; interest rate trends; determination by the Company to
dispose of or acquire additional assets; general industry and
economic conditions; events impacting the U.S. and world financial
markets and economies; and those specific risks that are discussed
in the Company�s previously filed Annual Report on Form 10-K for
the fiscal year ended March 31, 2007. The Company undertakes no
obligation to update publicly any forward-looking statements,
whether as a result of new information or future events.
BREEZE-EASTERN CORPORATION STATEMENTS OF CONSOLIDATED OPERATIONS
(In Thousands of Dollars Except Share Data) � Three Months Ended
7/1/07 7/2/06 � Net sales $ 16,255 $ 16,242 Cost of sales � 9,838 �
8,817 Gross profit 6,417 7,425 � General, administrative and
selling expenses 4,402 4,746 Interest expense 932 1,269 Other
expense-net 14 49 Loss on extinguishment of debt � - � 1,331 Income
before income taxes 1,069 30 Provision for income taxes � 428 � 12
� Net income $ 641 $ 18 � Basic earnings per share: Net income $
0.07 $ 0.00 Diluted earnings per share: Net income $ 0.07 $ 0.00 �
Weighted average basic shares 9,286,000 9,230,000 Weighted average
diluted shares 9,376,000 9,314,000 BALANCE SHEET INFORMATION �
7/1/07 3/31/07 � Current assets $ 42,760 $ 44,955 Property, plant
and equipment � net 4,600 4,779 Other assets � 30,327 � 30,737
Total assets $ 77,687 $ 80,471 � Current portion of long-term debt
�and short term borrowings $ 6,165 $ 8,346 Other current
liabilities � 13,193 � 13,469 Total current liabilities 19,358
21,815 Long-term debt 31,695 32,750 Other non-current liabilities
9,129 9,007 Stockholders' equity � 17,505 � 16,899 Total
liabilities and stockholders' equity $ 77,687 $ 80,471
Reconciliation of Reported Income to Adjusted EBITDA � � Three
Months Ended 7/1/07 7/2/06 � Net sales $ 16,255 $ 16,242 Cost of
sales � 9,838 � 8,817 Gross Profit 6,417 7,425 � General,
administrative and selling expenses � 4,402 � 4,746 � Operating
income 2,015 2,679 � Add back: depreciation and amortization � 292
� 345 � Adjusted EBITDA $ 2,307 $ 3,024 � Net income $ 641 $ 18
Provision for income taxes 428 12 Depreciation and amortization 292
345 Interest expense 932 1,269 Other expense-net 14 49 Loss on
extinguishment of debt � - � 1,331 Adjusted EBITDA $ 2,307 $ 3,024
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