WICHITA, Kan., May 6, 2020 /PRNewswire/ --
First Quarter 2020 Results Driven by 737 MAX
Production Suspension & COVID-19
- Delivered 324 shipsets compared to 453 shipsets in the first
quarter of 2019
- Revenue of $1.1 billion
- Earnings per share (EPS) of $(1.57); Adjusted EPS* of $(0.79)
- Cash from operations of $(331)
million; Free cash flow* of $(362)
million
Recent Events
- Took actions to preserve the health and safety of workforce
including processes aligned with CDC guidelines to work with any
exposed individual on the necessary quarantine period and the
process to return to work
- Acted to preserve liquidity:
-
- Reduced cash dividend to a penny per share
- Continued suspension of the share repurchase program
- Received $225 million advance
from Boeing; deferred repayment of $123
million advance from Boeing to 2022
- Deferred over $120 million of
capital expenditures
- Amended credit agreement to allow for bond issuance and to
provide additional flexibility in light of market conditions
- Raised $1.2 billion in senior
secured second lien notes on April
17
- Paid down in full the $800
million revolver on April
30
- Implemented cost reduction actions:
-
- Reduced 2,800 employees in Wichita,
Kansas and 400 employees in Oklahoma in January; eliminated 200 contractor
positions
- Announced further reduction of 1,450 employees in Wichita, Kansas; additional reductions at
other Spirit locations to align to lower production levels
- Initiated a voluntary retirement program for 850 hourly and
salaried workers
- Extended IAM and IBEW union contracts for three years
- Reduced pay for all U.S.-based executives by 20 percent until
further notice
- Initiated a 21 calendar-day furlough of production workers and
managers supporting Boeing programs in Wichita, Kansas and Oklahoma
- Implemented a four-day work week for salaried workforce at
Wichita, Kansas facility until
further notice
- Reached agreement with Boeing on 737 MAX production of 125
units in 2020
- Announced temporary production partnership with Vyaire to
produce ventilators
Spirit AeroSystems Holdings, Inc. [NYSE: SPR] reported first
quarter 2020 financial results.
Table 1.
Summary Financial Results (unaudited)
|
|
|
1st
Quarter
|
|
($ in millions,
except per share data)
|
2020
|
2019
|
Change
|
|
|
|
|
Revenues
|
$1,077
|
$1,968
|
(45%)
|
Operating (Loss)
Income
|
($168)
|
$233
|
**
|
Operating (Loss)
Income as a % of Revenues
|
(15.5%)
|
11.8%
|
**
|
Net (Loss)
Income
|
($163)
|
$163
|
**
|
Net (Loss) Income
as a % of Revenues
|
(15.1%)
|
8.3%
|
**
|
(Loss) Earnings
Per Share (Fully Diluted)
|
($1.57)
|
$1.55
|
**
|
Adjusted (Loss)
Earnings Per Share (Fully Diluted)*
|
($0.79)
|
$1.68
|
**
|
Fully Diluted
Weighted Avg Share Count
|
103.7
|
105.3
|
|
|
|
|
|
** Represents an amount
equal to or in excess of 100% or not meaningful.
|
"The aerospace industry and Spirit are facing unprecedented
disruption and uncertainty from the continued 737 MAX grounding and
COVID-19 pandemic. We have taken appropriate steps to improve the
safety of our team in our manufacturing facilities. We have
also executed a number of cost reduction activities to align our
cost structure to the lowered rates of production. In addition, we
have taken several actions to preserve liquidity. Our recent bond
offering provides additional liquidity to help Spirit manage
through these challenging times," said Spirit AeroSystems President
and Chief Executive Officer Tom
Gentile.
Revenue
Spirit's first quarter of 2020 revenue was $1.1 billion, down from the same period of 2019,
primarily due to the 737 MAX production suspension directed by
Boeing that began on January 1, 2020.
Deliveries decreased to 324 shipsets during the first quarter of
2020 compared to 453 shipsets in the same period of 2019, including
Boeing 737 MAX deliveries of 18 shipsets compared to 152 shipsets
in the same period of the prior year. (Table 1)
Spirit's backlog at the end of the first quarter of 2020 was
approximately $42 billion, down
$1 billion from the previous quarter,
with work packages on all commercial platforms in the Boeing and
Airbus backlog.
Earnings
Operating loss for the first quarter of 2020 was $(167.5) million, down compared to operating
income of $233 million in the same
period of 2019. As a result of Boeing's 737 MAX production
suspension that began on January 1,
2020, Spirit recognized lower margin driven by significantly
less deliveries, excess capacity costs of $73.4 million, and restructuring expenses of
$42.6 million for cost-alignment and
headcount reductions. In addition, Spirit recognized abnormal costs
of $25.4 million resulting from the
COVID-19 Boeing production suspension that began in March 2020. Further, Spirit recognized a non-cash
expense of $69.2 million resulting
from the voluntary retirement program (VRP) offered during the
first quarter of 2020. In addition to the expenses described above,
Spirit recognized forward loss charges of $19.7 million in the first quarter of 2020
related to the Boeing 747, 787, Airbus A350, and BR725
programs.
First quarter EPS was $(1.57),
compared to $1.55 in the same period
of 2019. First quarter 2020 adjusted EPS* was $(0.79), excluding the impacts of planned
acquisitions, restructuring costs and the VRP offered during the
first quarter of 2020, compared to $1.68 in the same period of 2019, adjusted to
exclude the impact of the planned Asco acquisition. (Table 1)
Cash
Cash from operations in the first quarter of 2020 was
$(331) million, down from
$242 million in the same quarter last
year, primarily due to negative impacts of working capital
requirements largely driven by supplier payments made following the
737 MAX production suspension, partially offset by $215 million received related to the February 2020 memorandum of agreement with
Boeing. Free cash flow* in the first quarter of 2020 was
$(362) million, down compared to
$201 million in the same period of
2019. The Company's $800 million
revolver remained drawn at the end of the quarter. Cash balance at
the end of the quarter was $1.8
billion. (Table 2)
On April 13, 2020, Spirit entered
into an amendment to its Second Amended and Restated Credit
Agreement. The primary purpose of this amendment was to permit
Spirit to raise second priority secured indebtedness and provide
flexibility to account for market conditions.
On April 17, 2020, Spirit raised
$1.2 billion aggregate principal
amount of 7.5% senior secured second lien notes due 2025 in a
private offering. Spirit used the proceeds to pay its full revolver
of $800 million on April 30, 2020, and will use the remaining
$400 million for general corporate
purposes.
In connection with the closing of the notes offering, the
commitments under Spirit's senior unsecured $375 million short-term delayed draw term loan
facility, dated as of February 24,
2020, were canceled in full and the facility was
terminated.
* Non-GAAP financial measure, see Appendix for
reconciliation
Table 2.
Cash Flow and Liquidity (unaudited)
|
|
|
|
1st
Quarter
|
|
($ in
millions)
|
2020
|
2019
|
Change
|
|
|
|
|
Cash from
Operations
|
($331)
|
$242
|
**
|
Purchases of
Property, Plant & Equipment
|
($31)
|
($41)
|
(24%)
|
Free Cash
Flow*
|
($362)
|
$201
|
**
|
|
|
|
|
|
April
2,
|
December
31,
|
|
Liquidity
|
2020
|
2019
|
|
Cash
|
$1,834
|
$2,351
|
|
Total
Debt
|
$3,031
|
$3,034
|
|
|
|
|
|
**
Represents an amount equal to or in excess of 100% or not
meaningful.
|
Subsequent Events
The first quarter 2020 financial results do not contemplate the
impacts of the recently announced lower production rates by Boeing
and Airbus. The Company is currently evaluating the potential
impacts to the Boeing 787 and Airbus A350 programs. Based on
preliminary assessments, the Company expects to recognize
incremental forward losses in the second quarter of 2020 of
approximately $70 million to
$90 million on the Boeing 787
program, and $15 million to
$20 million on the Airbus A350
program. As a result of the uncertainty that exists regarding
customers' specific production rates and duration for such rates,
and the Company's actions it may take to recalibrate its cost
structure in response to decisions our customers make, the amount
of forward losses the Company will recognize in the second quarter
of 2020 may be materially different than the ranges indicated
above.
2020 Outlook
Given the continued uncertainty surrounding the impacts of the
Boeing 737 MAX grounding and COVID-19 pandemic, Spirit will not be
providing guidance at this time.
Segment Results
Fuselage Systems
Fuselage Systems segment revenue in the first quarter of 2020
decreased 48 percent from the same period last year to $552 million, primarily due to lower production
volumes on the Boeing 737 program resulting from the production
suspension directed by Boeing that began on January 1, 2020. Operating margin for the first
quarter of 2020 decreased to (15.7) percent, compared to 13.0
percent during the same period of 2019, primarily due to lower
profit recognized on the Boeing 737 program due to excess capacity
costs of $51.2 million with
significantly less deliveries, restructuring expenses of
$30.1 million for cost-alignment and
headcount reductions, and abnormal costs of $15.3 million resulting from the COVID-19 Boeing
production suspension that began in March
2020. In the first quarter of 2020, the segment recorded
pretax $(4.0) million of unfavorable
cumulative catch-up adjustments and $(13.2)
million of net forward losses.
Propulsion Systems
Propulsion Systems segment revenue in the first quarter of 2020
decreased 54 percent from the same period last year to $225 million, primarily due to lower production
volumes on the Boeing 737 program resulting from the production
suspension directed by Boeing that began on January 1, 2020. Operating margin for the first
quarter of 2020 decreased to (2.4) percent, compared to 19.7
percent during the same period of 2019, primarily due to lower
margin recognized on the Boeing 737 program due to excess capacity
costs of $15.8 million with
significantly less deliveries, restructuring expenses of
$8.8 million for cost-alignment and
headcount reductions, and abnormal costs of $6.2 million resulting from the COVID-19 Boeing
production suspension that began in March
2020. In the first quarter of 2020, the segment recorded
pretax $(1.5) million of unfavorable
cumulative catch-up adjustments and $(3.1)
million of net forward losses.
Wing Systems
Wing Systems segment revenue in the first quarter of 2020
decreased 29 percent from the same period last year to $291 million, primarily due to lower production
volumes on the Boeing 737 program resulting from the production
suspension directed by Boeing that began on January 1, 2020 as well as lower revenue
recognized on the Airbus A350 program as a result of pricing terms.
Operating margin for the first quarter of 2020 decreased to 4.7
percent, compared to 16.1 percent during the same period of 2019,
primarily due to lower margin recognized on the Boeing 737 program
due to excess capacity costs of $6.4
million with significantly less deliveries, restructuring
expenses of $3.7 million for
cost-alignment and headcount reductions, abnormal costs of
$3.9 million resulting from the
COVID-19 Boeing production suspension that began in March 2020, and pricing terms on the Airbus A350
program. In the first quarter of 2020, the segment recorded pretax
$(2.7) million of unfavorable
cumulative catch-up adjustments and $(3.4)
million of net forward losses.
Table 4.
Segment Reporting (unaudited)
|
|
|
1st
Quarter
|
($ in
millions)
|
2020
|
2019
|
Change
|
|
|
|
|
Segment
Revenues
|
|
|
|
Fuselage
Systems
|
$551.5
|
$1,069.6
|
(48.4%)
|
Propulsion Systems
|
225.2
|
485.7
|
(53.6%)
|
Wing
Systems
|
291.4
|
407.9
|
(28.6%)
|
All
Other
|
9.2
|
4.6
|
**
|
Total Segment
Revenues
|
$1,077.3
|
$1,967.8
|
(45.3%)
|
|
|
|
|
Segment (Loss)
Earnings from Operations
|
|
|
|
Fuselage
Systems
|
($86.4)
|
$138.9
|
**
|
Propulsion Systems
|
(5.3)
|
95.5
|
**
|
Wing
Systems
|
13.6
|
65.8
|
(79.3%)
|
All
Other
|
1.8
|
1.2
|
50.0%
|
Total Segment
Operating (Loss) Earnings
|
($76.3)
|
$301.4
|
(125.3%)
|
|
|
|
|
Unallocated
Expense
|
|
|
|
SG&A
|
($77.4)
|
($63.6)
|
(21.7%)
|
Research &
Development
|
(12.3)
|
(12.9)
|
4.7%
|
Cost of
Sales
|
(1.5)
|
8.1
|
**
|
Total (Loss)
Earnings from Operations
|
($167.5)
|
$233.0
|
**
|
|
|
|
|
Segment Operating
(Loss) Earnings as % of Revenues
|
|
|
|
Fuselage
Systems
|
(15.7%)
|
13.0%
|
**
|
Propulsion Systems
|
(2.4%)
|
19.7%
|
**
|
Wing
Systems
|
4.7%
|
16.1%
|
**
|
All
Other
|
19.6%
|
26.1%
|
(650)
BPS
|
Total Segment
Operating (Loss) Earnings as % of Revenues
|
(7.1%)
|
15.3%
|
**
|
|
|
|
|
Total Operating
(Loss) Earnings as % of Revenues
|
(15.5%)
|
11.8%
|
**
|
|
|
|
|
** Represents an amount
equal to or in excess of 100% or not meaningful.
|
Cautionary Statement Regarding Forward-Looking
Statements
This press release contains "forward-looking statements" that
may involve many risks and uncertainties. Forward-looking
statements generally can be identified by the use of
forward-looking terminology such as "aim," "anticipate," "believe,"
"could," "continue," "estimate," "expect," "goal," "forecast,"
"intend," "may," "might," "objective," "outlook," "plan,"
"predict," "project," "should," "target," "will," "would," and
other similar words, or phrases, or the negative thereof, unless
the context requires otherwise. 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 those reflected in such forward-looking statements
and that should be considered in evaluating our outlook include,
but are not limited to, the following:
1)
|
the timing and
conditions surrounding the return to service of the B737 MAX,
future demand for the aircraft, and any residual impacts of the
grounding on production rates for the aircraft;
|
2)
|
our reliance on
Boeing for a significant portion of our revenues;
|
3)
|
our ability to
continue to grow our business and execute our growth strategy
including our ability to enter into profitable supply arrangements
with additional customers;
|
4)
|
the business
condition and liquidity of Boeing and Airbus and their ability to
satisfy their contractual obligations to the Company;
|
5)
|
demand for our
products and services and the effect of economic or geopolitical
conditions, or other events, such as pandemics, in the industries
and markets in which we operate in the U.S. and
globally;
|
6)
|
the impact of the
COVID-19 pandemic on our business and operations, including on the
demand for our and our customers' products and services, on trade
and transport restrictions, on the global aerospace supply chain,
on our ability to retain the skilled work force necessary for
production and development and generally on our ability to
effectively manage the impacts of the COVID-19 pandemic on our
business operations;
|
7)
|
the certainty of our
backlog, including the ability of customers to cancel or delay
orders prior to shipment;
|
8)
|
our ability to
accurately estimate and manage performance, cost, margins, and
revenue under our contracts, and the potential for additional
forward losses on new and maturing programs;
|
9)
|
our ability and our
suppliers' ability to accommodate, and the cost of accommodating,
announced increases in the build rates of certain
aircraft;
|
10)
|
competitive
conditions in the markets in which we operate, including
in-sourcing by commercial aerospace original equipment
manufacturers;
|
11)
|
our ability to
successfully negotiate, or re-negotiate, future pricing under our
supply agreements with Boeing, Airbus and other
customers;
|
12)
|
the success and
timely execution of key milestones, such as the receipt of
necessary regulatory approvals and satisfaction of closing
conditions, in our announced acquisitions of Asco and select
Bombardier assets, and our ability to effectively assess, manage,
close, and integrate such acquisitions along with others that we
pursue, and generate synergies and other cost savings therefrom,
while avoiding unexpected costs, charges, expenses, and adverse
changes to business relationships and business
disruptions;
|
13)
|
the possibility that
our cash flows may not be adequate for our additional capital
needs;
|
14)
|
our ability to avoid
or recover from cyber-based or other security attacks and other
operations disruptions;
|
15)
|
legislative or
regulatory actions, both domestic and foreign, impacting our
operations;
|
16)
|
the effect of changes
in tax laws and the Company's ability to accurately calculate and
estimate the effect of such changes;
|
17)
|
any reduction in our
credit ratings;
|
18)
|
our dependence on our
suppliers, as well as the cost and availability of raw materials
and purchased components;
|
19)
|
our ability to
recruit and retain a critical mass of highly skilled
employees;
|
20)
|
our relationships
with the unions representing many of our employees, including our
ability to avoid labor disputes and work stoppages with respect to
our union employees;
|
21)
|
spending by the U.S.
and other governments on defense;
|
22)
|
pension plan
assumptions and future contributions;
|
23)
|
the effectiveness of
our internal control over financial reporting; and any difficulties
or delays that could affect the Company's ability to effectively
implement the remediation plan, in whole or in part, to address the
material weakness identified in the Company's internal control over
financial reporting, as described in Item 9A. "Controls and
Procedures" of the Annual Report on Form 10-K for 2019;
|
24)
|
the outcome or impact
of ongoing or future litigation, claims, and regulatory actions,
including our exposure to potential product liability and warranty
claims;
|
25)
|
our ability to
continue selling certain receivables through our supplier financing
programs;
|
26)
|
our ability to access
the capital markets to fund our liquidity needs, and the costs and
terms of any additional financing;
|
27)
|
any regulatory or
legal action arising from the review of our accounting processes;
and
|
28)
|
the risks of doing
business internationally, including fluctuations in foreign
currency exchange rates, impositions of tariffs or embargoes, trade
restrictions, compliance with foreign laws, and domestic and
foreign government policies.
|
These factors are not exhaustive and it is not possible for us
to predict all factors that could cause actual results to differ
materially from those reflected in our forward-looking statements.
These factors speak only as of the date hereof, and new factors may
emerge or changes to the foregoing factors may occur that could
impact our business. As with any projection or forecast, these
statements are inherently susceptible to uncertainty and changes in
circumstances. Except to the extent required by law, we undertake
no obligation to, and expressly disclaim any obligation to,
publicly update or revise any forward-looking statements, whether
as a result of new information, future events, or otherwise. You
should review carefully the section captioned "Risk Factors" in the
Company's Annual Report on Form 10-K and the Company's Quarterly
Reports on Form 10-Q for a more complete discussion of these and
other factors that may affect our business.
Spirit Shipset
Deliveries
|
(one shipset
equals one aircraft)
|
|
|
|
|
|
|
|
|
|
|
|
|
1st
Quarter
|
|
|
|
2020
|
2019
|
|
B737
|
|
18
|
152
|
|
B747
|
|
2
|
1
|
|
B767
|
|
6
|
8
|
|
B777
|
|
9
|
13
|
|
B787
|
|
40
|
42
|
|
Total
Boeing
|
|
75
|
216
|
|
|
|
|
|
|
A220
|
|
15
|
8
|
|
A320
Family
|
|
188
|
178
|
|
A330
|
|
8
|
9
|
|
A350
|
|
26
|
28
|
|
A380
|
|
-
|
1
|
|
Total
Airbus
|
|
237
|
224
|
|
|
|
|
|
|
Business/Regional
Jet
|
|
12
|
13
|
|
|
|
|
|
|
Total
|
|
324
|
453
|
|
|
|
|
|
|
Spirit AeroSystems
Holdings, Inc.
|
Condensed
Consolidated Statements of Operations
|
(unaudited)
|
|
|
|
|
|
|
|
|
For the Three
Months Ended
|
|
|
|
|
April 2,
2020
|
|
March 28,
2019
|
|
|
|
($ in millions,
except per share data)
|
|
|
|
|
|
|
|
Revenue
|
|
$1,077.3
|
|
$1,967.8
|
|
Operating costs
and expenses:
|
|
|
|
|
|
Cost of
sales
|
|
1,112.5
|
|
1,658.3
|
|
Selling, general and
administrative
|
|
77.4
|
|
63.6
|
|
Restructuring
costs
|
|
42.6
|
|
-
|
|
Research and
development
|
|
12.3
|
|
12.9
|
|
|
Total operating
costs and expenses
|
|
1,244.8
|
|
1,734.8
|
|
|
Operating (loss)
income
|
|
(167.5)
|
|
233.0
|
|
Interest expense and
financing fee amortization
|
|
(32.2)
|
|
(18.8)
|
|
Other expense,
net
|
|
(49.0)
|
|
(11.0)
|
|
|
(Loss) income
before income taxes and equity in net (loss) income of
affiliate
|
|
(248.7)
|
|
203.2
|
|
Income tax benefit
(provision)
|
|
87.2
|
|
(40.1)
|
|
|
(Loss) income
before equity in net (loss) income of affiliate
|
|
(161.5)
|
|
163.1
|
|
Equity in net loss of
affiliate
|
|
(1.5)
|
|
-
|
|
|
Net (loss)
income
|
|
($163.0)
|
|
$163.1
|
|
|
|
|
|
|
|
|
(Loss) Earnings per
share
|
|
|
|
|
|
Basic
|
|
($1.57)
|
|
$1.57
|
|
Shares
|
|
103.7
|
|
104.0
|
|
|
|
|
|
|
|
|
Diluted
|
|
($1.57)
|
|
$1.55
|
|
Shares
|
|
103.7
|
|
105.3
|
|
|
|
|
|
|
|
|
Dividends declared
per common share
|
|
$0.01
|
|
$0.12
|
|
Spirit AeroSystems
Holdings, Inc.
|
Condensed
Consolidated Balance Sheets
|
(unaudited)
|
|
|
April 2,
2020
|
|
December 31,
2019
|
|
|
($ in
millions)
|
Assets
|
|
|
|
|
Cash and cash
equivalents
|
|
$1,833.6
|
|
$2,350.5
|
Restricted
cash
|
|
0.3
|
|
0.3
|
Accounts receivable,
net
|
|
508.6
|
|
546.4
|
Contract assets,
short-term
|
|
380.9
|
|
528.3
|
Inventory,
net
|
|
1,168.7
|
|
1,118.8
|
Other current
assets
|
|
134.0
|
|
98.7
|
Total current assets
|
|
4,026.1
|
|
4,643.0
|
Property, plant and
equipment, net
|
|
2,253.2
|
|
2,271.7
|
Intangible assets,
net
|
|
30.6
|
|
1.2
|
Goodwill
|
|
78.5
|
|
2.4
|
Right of use
assets
|
|
47.5
|
|
48.9
|
Contract assets,
long-term
|
|
10.4
|
|
6.4
|
Pension
assets
|
|
282.6
|
|
449.1
|
Deferred income
taxes
|
|
192.6
|
|
106.5
|
Other
assets
|
|
79.6
|
|
76.8
|
Total assets
|
|
$7,001.1
|
|
$7,606.0
|
Liabilities
|
|
|
|
|
Accounts
payable
|
|
$740.7
|
|
$1,058.3
|
Accrued
expenses
|
|
286.1
|
|
240.2
|
Profit
sharing
|
|
17.6
|
|
84.5
|
Current portion of
long-term debt
|
|
52.7
|
|
50.2
|
Operating lease
liabilities, short-term
|
|
5.9
|
|
6.0
|
Advance payments,
short-term
|
|
17.8
|
|
21.6
|
Contract liabilities,
short-term
|
|
166.9
|
|
158.3
|
Forward loss
provision, short-term
|
|
91.5
|
|
83.9
|
Deferred revenue and
other deferred credits, short-term
|
|
17.9
|
|
14.8
|
Other current
liabilities
|
|
37.0
|
|
42.9
|
Total current liabilities
|
|
1,434.1
|
|
1,760.7
|
Long-term
debt
|
|
2,978.2
|
|
2,984.1
|
Operating lease
liabilities, long-term
|
|
41.7
|
|
43.0
|
Advance payments,
long-term
|
|
327.3
|
|
333.3
|
Pension/OPEB
obligation
|
|
50.9
|
|
35.7
|
Contract liabilities,
long-term
|
|
388.9
|
|
356.3
|
Forward loss
provision, long-term
|
|
146.9
|
|
163.5
|
Deferred revenue and
other deferred credits, long-term
|
|
36.8
|
|
34.4
|
Deferred grant income
liability - non-current
|
|
27.4
|
|
29.0
|
Deferred income
taxes
|
|
8.2
|
|
8.3
|
Other non-current
liabilities
|
|
104.3
|
|
95.8
|
Stockholders'
Equity
|
|
|
|
|
Common stock,
Class A par value $0.01, 200,000,000 shares authorized,
105,399,855 and 104,882,379 shares issued and outstanding,
respectively
|
|
1.1
|
|
1.1
|
Additional paid-in
capital
|
|
1,125.6
|
|
1,125.0
|
Accumulated other
comprehensive loss
|
|
(250.9)
|
|
(109.2)
|
Retained
earnings
|
|
3,036.9
|
|
3,201.3
|
Treasury stock, at
cost (41,523,470 shares each period, respectively)
|
|
(2,456.8)
|
|
(2,456.8)
|
Total stockholders' equity
|
|
1,455.9
|
|
1,761.4
|
Noncontrolling
interest
|
|
0.5
|
|
0.5
|
Total equity
|
|
1,456.4
|
|
1,761.9
|
Total liabilities and equity
|
|
$7,001.1
|
|
$7,606.0
|
Spirit AeroSystems
Holdings, Inc.
|
Condensed
Consolidated Statements of Cash Flows
|
(unaudited)
|
|
|
|
|
|
|
|
For the Three
Months Ended
|
|
|
April 2,
2020
|
|
March 28,
2019
|
|
|
($ in
millions)
|
Operating
activities
|
|
|
|
|
Net (loss)
income
|
|
($163.0)
|
|
$163.1
|
Adjustments to
reconcile net (loss) income to net cash (used in) provided by
operating activities
|
|
|
|
|
Depreciation
expense
|
|
66.8
|
|
60.5
|
Amortization
expense
|
|
0.5
|
|
-
|
Amortization of deferred
financing fees
|
|
1.9
|
|
0.8
|
Accretion of customer supply
agreement
|
|
1.1
|
|
1.1
|
Employee stock compensation
expense
|
|
9.8
|
|
7.7
|
Loss from derivative
instruments
|
|
-
|
|
9.6
|
Gain from foreign currency
transactions
|
|
(6.5)
|
|
(0.1)
|
Loss (gain) on impairment
and disposition of assets
|
|
0.2
|
|
(0.1)
|
Deferred
taxes
|
|
(61.5)
|
|
8.1
|
Pension and other
post-retirement benefits, net
|
|
59.9
|
|
(6.4)
|
Grant liability
amortization
|
|
(2.4)
|
|
(5.7)
|
Forward loss
provision
|
|
(9.0)
|
|
(11.3)
|
Changes in assets and
liabilities
|
|
|
|
|
Accounts receivable,
net
|
|
36.1
|
|
(68.8)
|
Contract assets
|
|
144.5
|
|
(57.6)
|
Inventory, net
|
|
(59.4)
|
|
23.5
|
Accounts payable and accrued
liabilities
|
|
(278.6)
|
|
129.9
|
Profit sharing/deferred
compensation
|
|
(66.7)
|
|
(48.0)
|
Advance payments
|
|
(19.8)
|
|
(2.2)
|
Income taxes
receivable/payable
|
|
(32.8)
|
|
29.4
|
Contract
liabilities
|
|
39.1
|
|
4.9
|
Deferred revenue and other
deferred credits
|
|
6.3
|
|
11.6
|
Other
|
|
2.2
|
|
(7.8)
|
Net
cash (used in) provided by operating activities
|
|
($331.3)
|
|
$242.2
|
Investing
activities
|
|
|
|
|
Purchase of property, plant
and equipment
|
|
(31.0)
|
|
(40.8)
|
Equity in assets of
affiliates
|
|
1.5
|
|
-
|
Other
|
|
0.3
|
|
0.1
|
Acquisition, net of cash
acquired
|
|
(118.1)
|
|
-
|
Net
cash used in investing activities
|
|
($147.3)
|
|
($40.7)
|
Financing
activities
|
|
|
|
|
Proceeds from issuance of
debt
|
|
-
|
|
250.0
|
Proceeds from revolving
credit facility
|
|
-
|
|
100.0
|
Customer
financing
|
|
10.0
|
|
-
|
Principal payments of
debt
|
|
(7.3)
|
|
(2.6)
|
Payments on term
loan
|
|
(5.7)
|
|
-
|
Taxes paid related to net
share settlement awards
|
|
(13.1)
|
|
(10.0)
|
Proceeds from issuance of
ESPP stock
|
|
1.3
|
|
-
|
Debt issuance and financing
costs
|
|
(4.8)
|
|
-
|
Purchase of treasury
stock
|
|
-
|
|
(75.0)
|
Dividends paid
|
|
(12.4)
|
|
(12.7)
|
Net
cash (used in) provided by financing activities
|
|
($32.0)
|
|
$249.7
|
Effect of exchange
rate changes on cash, cash equivalents, and restricted
cash
|
|
(6.2)
|
|
(0.3)
|
Net
(decrease) increase in cash, cash equivalents, and restricted
cash
|
|
($516.8)
|
|
$450.9
|
Cash, cash
equivalents, and restricted cash, beginning of the
period
|
|
2,367.2
|
|
794.1
|
Cash, cash
equivalents, and restricted cash, end of the period
|
|
$1,850.4
|
|
$1,245.0
|
|
|
|
|
|
Reconciliation of
Cash and Cash Equivalents and Restricted Cash:
|
|
April 2,
2020
|
|
March 28,
2019
|
Cash and cash
equivalents, beginning of the period
|
|
$2,350.5
|
|
$773.6
|
Restricted cash,
short-term, beginning of the period
|
|
0.3
|
|
0.3
|
Restricted cash,
long-term, beginning of the period
|
|
16.4
|
|
20.2
|
Cash, cash
equivalents, and restricted cash, beginning of the
period
|
|
$2,367.2
|
|
$794.1
|
|
|
|
|
|
Cash and cash
equivalents, end of the period
|
|
$1,833.6
|
|
$1,228.4
|
Restricted cash,
short-term, end of the period
|
|
0.3
|
|
0.3
|
Restricted cash,
long-term, end of the period
|
|
16.5
|
|
16.3
|
Cash, cash
equivalents, and restricted cash, end of the period
|
|
$1,850.4
|
|
$1,245.0
|
Appendix
In addition to reporting our financial information using U.S.
Generally Accepted Accounting Principles (GAAP), management
believes that certain non-GAAP measures (which are indicated by *
in this report) provide investors with important perspectives into
the company's ongoing business performance. The non-GAAP measures
we use in this report are (i) adjusted diluted earnings per share
and (ii) free cash flow, which are described further below. The
company does not intend for the information to be considered in
isolation or as a substitute for the related GAAP measures. Other
companies may define and calculate the measures differently than we
do, limiting the usefulness of the measures for comparison with
other companies.
Adjusted Diluted Earnings Per Share. To provide additional
transparency, we have disclosed non-GAAP adjusted diluted earnings
per share (Adjusted EPS). This metric excludes various items that
are not considered to be directly related to our operating
performance. Management uses Adjusted EPS as a measure of business
performance and we believe this information is useful in providing
period-to-period comparisons of our results. The most comparable
GAAP measure is diluted earnings per share.
Free Cash Flow. Free Cash Flow is defined as GAAP cash from
operating activities (generally referred to herein as "cash from
operations"), less capital expenditures for property, plant and
equipment. Management believes Free Cash Flow provides investors
with an important perspective on the cash available for
stockholders, debt repayments including capital leases, and
acquisitions after making the capital investments required to
support ongoing business operations and long term value creation.
Free Cash Flow does not represent the residual cash flow available
for discretionary expenditures as it excludes certain mandatory
expenditures. The most comparable GAAP measure is cash provided by
operating activities. Management uses Free Cash Flow as a measure
to assess both business performance and overall liquidity.
The tables below provide reconciliations between the GAAP and
non-GAAP measures.
Adjusted
EPS
|
|
|
|
|
|
|
|
|
1st
Quarter
|
|
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Diluted (Loss)
Earnings Per Share
|
|
($1.57)
|
|
$1.55
|
|
Costs Related to
Planned Acquisitions
|
|
0.08
|
a
|
0.13
|
b
|
Restructuring
Costs
|
|
0.27
|
c
|
-
|
|
Voluntary Retirement
Program
|
|
0.43
|
d
|
-
|
|
Adjusted Diluted
(Loss) Earnings Per Share
|
|
($0.79)
|
|
$1.68
|
|
|
|
|
|
|
|
Diluted Shares (in
millions)
|
|
103.7
|
|
105.3
|
|
|
|
a
|
Represents the three
months ended Q1 2020 transaction costs (included in
SG&A)
|
|
|
b
|
Represents the three
months ended Q1 2019 Asco acquisition impact of $0.13 per
share:
|
|
|
- Loss related to
foreign currency forward contract of $0.11 (included in Other
expense)
|
|
|
- Transaction costs
of $0.02 (included in SG&A)
|
|
|
c
|
Represents the three
months ended Q1 2020 restructuring expenses for cost-alignment and
headcount reductions (included in Restructuring costs)
|
|
|
d
|
Represents the three
months ended Q1 2020 retirement incentive expenses resulting from
the VRP offered during the first quarter of 2020 (included in Other
expense)
|
Free Cash
Flow
|
($ in
millions)
|
|
|
|
|
|
|
1st
Quarter
|
|
|
2020
|
|
2019
|
|
|
|
|
|
|
Cash from
Operations
|
($331)
|
|
$242
|
|
Capital
Expenditures
|
(31)
|
|
(41)
|
|
Free Cash
Flow
|
($362)
|
|
$201
|
|
View original
content:http://www.prnewswire.com/news-releases/spirit-aerosystems-reports-first-quarter-2020-results-301053836.html
SOURCE Spirit AeroSystems Holdings, Inc.