Breeze-Eastern Corporation (NYSE Amex: BZC) today reported
its Fiscal 2011 financial results.
- Net sales: $78.2 million, a company
record high, versus $69.0 million for Fiscal 2010.
- Net income: $5.0 million, or $0.53 per
diluted share, versus a net loss of ($6.0) million, or ($0.64) per
diluted share, last year.
- Adjusted EBITDA, a “Non-GAAP Financial
Measure” as described below in this press release: $11.9 million,
versus a negative ($4.3) million in Fiscal 2010.
- Net debt: $5.1 million, $9.6 million
lower than a year ago.
- Bookings: $79.2 million, versus $68.2
million in Fiscal 2010. The book-to-bill ratio for Fiscal 2011 was
1.0.
Even after excluding unusual non-recurring costs from Fiscal
2010, Fiscal 2011 profits were significantly better than last year
Fiscal 2010 results included non-cash charges in the fourth quarter
of $12.2 million for inventory obsolescence, environmental
liabilities, and estimated losses on engineering project
commitments, and also included $1.5 million of one-time costs
related to the factory shutdown during the relocation in March,
2010. Excluding these amounts, adjusted Fiscal 2010 net income
would have been $2.3 million, or $0.25 per diluted share, and
Adjusted EBITDA would have been $9.5 million. Fiscal 2011 net
income was more than double the adjusted Fiscal 2010 net income and
Adjusted EBITDA was up more than 25%.
For the Fiscal 2011 fourth quarter, the financial results
follow.
- Net sales: $26.9 million, a company
record high, versus $18.1 million in last year’s Fiscal fourth
quarter.
- Net income: $2.8 million, or $0.30 per
diluted share, versus a loss of ($8.9) million, or ($0.95) per
diluted share, in the Fiscal 2010 fourth quarter.
- Adjusted EBITDA: $5.8 million, versus a
negative ($11.5) million in the Fiscal 2010 fourth quarter.
- Bookings: $25.3 million, versus $21.7
million in the Fiscal 2010 fourth quarter.
Mike Harlan, Chief Executive Officer and President, said, "Our
Fiscal 2011 and fourth quarter sales set new company records. We
are proud of this accomplishment and the extra effort by many of
our employees to achieve these records. Our bookings were much
higher than last year, benefiting from higher spare parts orders
from the U.S. Government. Our overall profitability was clearly
better than the prior year, but was impacted by our relocation and
other factors and still has room for improvement. I regard our
Fiscal 2011 income statement results as a good step toward the
level of performance we expect to deliver.
“Our balance sheet and cash flow continue to be strong. In
addition to a good increase in Adjusted EBITDA, a broad team effort
increased working capital turnover, which resulted in over $11
million in operating cash flow. We used this strong cash flow to
make four debt principal pre-payments, while still funding
significant new product development and completion of our
relocation to Whippany. Our debt net of cash was $5.1 million at
the end of Fiscal 2011 versus $14.7 million a year ago. When our
debt was over $60 million, it was an overriding issue for our
company; but after extensive efforts, our balance sheet is now a
strategic asset. I am also glad to report that after recent
evaluations, we believe our environmental reserves are still
appropriate and we are not making any adjustments.
“Looking ahead to Fiscal 2012, first quarter shipments are doing
well and we are on-track to make significant milestone deliveries
for the C-27J, CH-53K, and A400M programs this summer. We will
continue to invest in new product development, IT improvements, and
improved customer responsiveness during Fiscal 2012, and still
improve our net profitability."
The Company will conduct a conference call at 10:00 a.m. EDT on
Friday, June 3, 2011 with the following numbers: (800) 798-2796 or
(617) 614-6204 and passcode 19374578.
Breeze-Eastern Corporation (http://www.breeze-eastern.com) is
the world’s leading designer and manufacturer of high performance
lifting and pulling devices for military and civilian aircraft,
including rescue hoists, winches and cargo hooks, and
weapons-lifting systems. The Company employs approximately 160
people at its facilities in Whippany, New Jersey.
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 Adjusted EBITDA (earnings
before interest, taxes, depreciation and amortization, other
income/expense, loss on debt extinguishment, and relocation
expense). 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
valuation. 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.
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. A reconciliation of Adjusted EBITDA to
net income, the most directly comparable GAAP measure, for the
three and twelve months ended March 31, 2011 is shown in the tables
below.
INFORMATION ABOUT FORWARD-LOOKING
STATEMENTS
This news release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, regarding our future operating performance, financial
results, events, trends and plans. All statements in this news
release other than statements of historical facts are
forward-looking statements. Forward-looking statements involve
numerous risks and uncertainties. We have attempted to identify any
forward-looking statements by using words such as “anticipates,”
“believes,” “could,” “expects,” “intends,” “may,” “should” and
other similar expressions. Although we believe that the
expectations reflected in all of our forward-looking statements are
reasonable, we can give no assurance that such expectations will
prove to be correct. Such statements are not guarantees of future
performance or events and are subject to known and unknown risks
and uncertainties that could cause our actual results, events or
financial positions to differ materially from those included within
the forward-looking statements. Such factors include, but are not
limited to 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; changes in our sales strategy and
product development plans; changes in the marketplace; developments
in environmental proceedings that we are involved in; continued
services of our executive management team; status of labor
relations; competitive pricing pressures; market acceptance of our
products under development; delays in the development of products;
determination by us 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
disclosed in our Annual Report on Form 10-K for the fiscal year
ended March 31, 2011, and other filings with the Securities and
Exchange Commission. We undertake 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
3/31/11
3/31/10
3/31/11
3/31/10
Net sales $ 26,940 $ 18,089 $ 78,200 $ 69,027 Cost of sales
15,572 16,644 47,248
48,376 Gross profit 11,368 1,445 30,952 20,651
Selling, general, and administrative expenses 3,799 11,730
14,361 20,554 Engineering expense 2,606 1,633 6,923 6,003
Relocation expense - 614
211 817 Operating income (loss) 4,963 (12,532
) 9,457 (6,723 ) Interest expense 143 215 694 891 Other
expense-net 37 272 213
458 Income before income taxes 4,783 (13,019 )
8,550 (8,072 ) Provision (benefit) for income taxes
1,942 (4,107 ) 3,524
(2,029 ) Net income (loss) $ 2,841 $ (8,912 ) $ 5,026
$ (6,043 ) Basic earnings (loss) per share: $ 0.30
$ ( 0.95 ) $ 0.53 $ (0.64 ) Diluted earnings
(loss) per share: $ 0.30 $ ( 0.95 ) $ 0.53 $
(0.64 ) Weighted average basic shares 9,429,000
9,398,000 9,414,000 9,388,000 Weighted average diluted shares
9,484,000 9,398,000 9,443,000 9,388,000
BALANCE SHEET INFORMATION
(In Thousands of Dollars)
3/31/11
3/31/10
Current assets $ 47,756 $ 39,851 Fixed assets – net 8,351
9,575 Other assets 22,041 26,682 Total assets
$ 78,148 $ 76,108 Current portion of long-term debt
and short term borrowings
$ - $ 3,286 Other current liabilities 15,380
11,377 Total current liabilities 15,380 14,663 Long-term debt
11,500 14,786 Other non-current liabilities 17,835 18,839
Stockholders' equity 33,433 27,820 Total
liabilities and stockholders' equity $ 78,148 $ 76,108
Reconciliation of Reported Income
(Loss) to Adjusted EBITDA
(In Thousands of Dollars)
Three Months Ended Twelve Months Ended 3/31/11
3/31/10 3/31/11 3/31/10 Net
sales $ 26,940 $ 18,089 $ 78,200 $ 69,027 Cost of sales
15,572 16,644 47,248
48,376 Gross Profit 11,368 1,445 30,952 20,651
Selling, general and administrative expenses 3,799 11,730 14,361
20,554 Engineering expense 2,606 1,633 6,923 6,003 Relocation
expense
-
614 211 817
Operating income (loss) 4,963 (12,532 ) 9,457 (6,723 ) Add
back: Depreciation and amortization 801 462 2,271 1,587
Relocation expense
-
614 211 817
Adjusted EBITDA $ 5,764 $ (11,456 ) $ 11,939 $
(4,319 )
Net income (loss) $ 2,841 $ (8,912 ) $ 5,026 $ (6,043 ) Provision
(benefit) for income taxes 1,942 (4,107 ) 3,524 (2,029 )
Depreciation and amortization 801 462 2,271 1,587 Relocation
expense
-
614 211 817 Interest expense 143 215 694 891 Other expense-net
37 272 213
458 Adjusted EBITDA $ 5,764 $ (11,456 ) $
11,939 $ (4,319 )
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