Breeze-Eastern Corporation (NYSE Amex:�BZC) today reported that
for the fiscal year ended March 31, 2009, it had net income of $5.8
million versus $9.4 million for fiscal 2008, or net income of $.61
per diluted share for fiscal 2009 compared to $1.00 per diluted
share for fiscal 2008. Excluding the non-recurring items in fiscal
2009 of the charge for refinancing the Company�s debt and the
release of a tax accrual and in fiscal 2008 the gain on the sale of
the Union, New Jersey facility, the net income for fiscal 2009 was
$5.7 million or $.61 per diluted share versus net income for fiscal
2008 of $5.5 million or $.58 per diluted share, a 5% increase.
Operating income for fiscal 2009 decreased to $11.3 million from
$12.9 million for fiscal 2008. Sales for fiscal 2009 decreased 1%
to $75.4 million from $76.0 million for fiscal 2008. Adjusted
EBITDA, as described under �Non-GAAP Financial Measures� in this
press release, for fiscal 2009 decreased 11% to $12.7 million from
$14.3 million for fiscal 2008. New orders received during fiscal
2009 were $82.1 million compared to $81.1 million for fiscal 2008.
The book-to-bill ratio was 1.1 for both fiscal 2009 and 2008.
Net income for the 2009 fiscal fourth quarter was $2.4 million
versus $6.5 million in the prior-year period or $.25 per diluted
share compared to $.69 per diluted share in the prior-year period.
Excluding the release of a tax accrual in fiscal 2009 and the gain
on the sale of the Union, New Jersey facility in fiscal 2008, net
income in the fourth quarter of fiscal 2009 was $2.0 million or
$.22 per diluted share and for 2008 was $2.6 million or $.28 per
diluted share. Operating income for the fourth quarter of fiscal
2009 was $3.6 million compared to $5.2 million for the fourth
quarter of fiscal 2008, a 31% decrease. Sales of $23.4 million in
the fiscal fourth quarter of 2009 decreased from $24.4 million for
the same period in the prior year, a 4% decrease. Adjusted EBITDA,
for the fourth quarter of fiscal 2009 decreased 27% to $4.0 million
versus $5.6 million in the prior-year period. The provision for
income taxes in the fourth quarter of fiscal 2009 includes the
release of $0.4 million for an unrecognized tax benefit from prior
years which was settled in fiscal 2009. New orders received during
the 2009 fiscal fourth quarter were $23.1 million compared to $26.3
million in the prior fiscal year�s fourth quarter. The Company�s
book-to-bill ratio for the fiscal 2009 fourth quarter was 1.0
compared with 1.1 for last year�s fiscal fourth quarter.
Robert L. G. White, President and Chief Executive Officer of the
Company, said, �Considering the impact of the global recession on
the world economy and the meltdown in the financial markets since
last fall, Breeze-Eastern held its own. Excluding the non-recurring
items in fiscal 2009 of the charge for refinancing the Company�s
debt and the release of a tax accrual and in fiscal 2008 the gain
on the sale of the Union, New Jersey facility, net income and
earnings per diluted share were at record levels in fiscal 2009.
Our debt, net of cash on hand at March�31,�2009, was $18.7 million,
down $5.3 million from fiscal 2008 and carried a blended interest
rate of 3.6% at fiscal year end. The backlog of work in the
pipeline is at record levels, our book-to-bill ratio was over 1.0
for the fourth year in a row and we continue to win new programs.
Since April 2007, we have won fifteen of the eighteen programs
targeted.�
Mr. White continued, �With all of that said, our overall
operating performance missed our targets for fiscal 2009. The
decrease in operating income and Adjusted EBITDA for the fourth
quarter and the full fiscal year were attributable to several
factors, principally a decrease in overall sales volume, lower
gross profit in engineering services and an unfavorable shift in
the mix of products sold. For example, costs incurred in fiscal
2009 associated with a contract to develop a new piece of equipment
for a fixed wing aircraft to be used by the U.S. Army for tactical
combat operations accounted for decreases of 2.0% and 1.7% in gross
margin in the fiscal 2009 fourth quarter and full fiscal year,
respectively, compared to fiscal 2008. Customer delays in shipping
schedules also prevented us from achieving our target of a
favorable comparison for the quarter and the year. While
aftermarket sales in overhaul & repair and spares in the fourth
quarter of fiscal 2009 showed favorable comparisons to fiscal 2008,
the margins achieved were lower due to product mix within these
sales categories. Spare parts sales were down in fiscal year 2009
compared to fiscal year 2008. Sales of new production products in
the fourth quarter and full year of fiscal 2009 were below fiscal
2008 while sales of engineering services were up but did not
contribute to gross profit due to the contract mentioned above. The
lower general, administrative and selling expenses for the fourth
quarter and full fiscal year of 2009 were primarily due to lower
marketing expenses and no incentive bonuses, as the operating
targets were not met in fiscal 2009 offset somewhat by higher
internal research and development costs related to new product
development. The backlog as of March 31, 2009 was $131.0 million
compared to $124.3 million at March 31, 2008, representing a 5%
increase.�
Outlook
Mr. White concluded, �Late in the fourth quarter of fiscal 2009
we saw, for the first time, some indications that the global
economic slowdown was beginning to affect our markets as certain
customers have started to request extensions of delivery dates for
products and have also asked for extended payment terms. We have
not, however, seen outright cancellation of orders. Notwithstanding
this, we have recently implemented a cost reduction program whereby
the services of the contract engineers we had been using for
various projects has been significantly reduced and the number of
our full time employees has been reduced by more than 7% during
fiscal 2010. These actions were taken to position the Company to
address any further indications of a slowdown while still
maintaining a staffing level necessary to handle the work load. We
expect sales levels in fiscal 2010 to be slightly higher than
fiscal 2009 with an attendant slight increase in profitability. In
recent fiscal years, including 2009, our revenues in the second
half of the fiscal year have generally exceeded revenues in the
first half. We anticipate that this trend will continue in fiscal
2010. We will be relocating to another facility in fiscal 2010 that
is better suited to our current and expected needs. While the
relocation will require a cash outlay of approximately $5 million
to fit out the new facility, we expect to continue our debt
reduction program with a targeted principal reduction in the area
of $5 million to $6 million in fiscal 2010.�
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, which employs approximately 180 people at its facility in
Union, New Jersey, reported sales of $75.4 million in the fiscal
year ended March 31, 2009.
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, gain on sale of
facility 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; interest rate trends; a decrease in the United States
government defense spending, changes in spending allocation or the
termination, postponement, or failure to fund one or more
significant contracts by the United States government or other
customers; 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, 2008 and Quarterly Report on Form 10-Q for the period
ended December 28, 2008.
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 Twelve Months Ended 3/31/09 � 3/31/08
3/31/09 � 3/31/08 � Net sales $ 23,425 $ 24,418 $ 75,427 $ 75,974
Cost of sales �
14,579 �
13,694 � �
45,337 �
43,457 � Gross profit 8,846
10,724 30,090 32,517 �
General, administrative and
selling expenses
5,225 5,505 18,832 19,574 Interest expense 238 641 1,367 3,311
Other expense-net 98 58 231 165 Loss on extinguishment of debt - -
551 - Gain on sale of facility �
- �
(6,811 ) �
- �
(6,811 ) Income before income taxes 3,285
11,331 9,109 16,278 Provision for income taxes �
903 �
4,857 � �
�
3,349
�
�
6,836
� � Net income
$ 2,382 $
6,474 �
$ 5,760
$ 9,442 � � Basic earnings per share:
Net income
$ 0.25 $ 0.69 �
$ 0.62 $ 1.01 �
Diluted earnings per share: Net income
$
0.25 $ 0.69 �
$
0.61 $ 1.00 � � Weighted
average basic shares 9,365,000 9,332,000 9,355,000 9,314,000
Weighted average diluted shares 9,379,000 9,400,000 9,400,000
9,396,000
BALANCE SHEET
INFORMATION
� � 3/31/09
3/31/08
� Current assets $ 49,905 $ 47,791 Property � net 3,859 3,833 Other
assets �
22,941 �
24,566 Total assets
$ 76,705 $
76,190 �
Current portion of long-term
debt
and short term borrowings
$ 3,286
$
5,977
Other current liabilities �
14,297 �
13,270 Total current liabilities 17,583 19,247
Long-term debt 18,071 19,849 Other non-current liabilities 7,724
10,202 Stockholders' equity �
33,327 �
26,892 Total liabilities and stockholders' equity
$ 76,705 $
76,190
Reconciliation of Reported
Income to Adjusted EBITDA
� � Three Months Ended Twelve Months Ended 3/31/09 � 3/31/08
3/31/09 � 3/31/08 � Net sales $ 23,425 $ 24,418 $ 75,427 $ 75,974
Cost of sales �
14,579 �
13,694 � �
45,337 �
43,457 � Gross profit 8,846
10,724 30,090 32,517 � General, administrative and selling expenses
�
5,225 �
5,505 � �
18,832 �
19,574 � � Operating income 3,621 5,219 11,258 12,943
� Add back: depreciation and amortization �
416 �
332 � �
1,454 �
1,319 � �
Adjusted EBITDA
$ 4,037 $
5,551 �
$ 12,712
$ 14,262 � � Net income $ 2,382 $ 6,474 $
5,760 $ 9,442 Provision for income taxes 903 4,857 3,349 6,836
Depreciation and amortization 416 332 1,454 1,319 Interest expense
238 641 1,367 3,311 Other expense-net 98 58 231 165 Loss on
extinguishment of debt - - 551 - Gain on sale of facility �
- �
(6,811 ) �
- �
(6,811 ) Adjusted EBITDA
$ 4,037 $ 5,551
�
$ 12,712 $
14,262 �
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