WICHITA,
Kan., Nov. 1, 2023 /PRNewswire/ --
Third Quarter 2023
- Revenues of $1.4 billion
- EPS of $(1.94); Adjusted EPS* of
$(1.42)
- Cash used in operations of $111
million; Free cash flow* usage of $136 million
Recent Events
- Appointed Pat Shanahan as
interim President and CEO
- Executed a memorandum of agreement with Boeing; impacts to be
reflected in fourth quarter financial results
Spirit AeroSystems Holdings, Inc. (NYSE: SPR) ("Spirit," "Spirit
AeroSystems" or the "Company") reported third quarter 2023
financial results.
Table 1.
Summary Financial Results (unaudited)
|
|
|
|
|
3rd
Quarter
|
|
Nine
Months
|
|
($ in millions,
except per share data)
|
2023
|
2022
|
Change
|
2023
|
2022
|
Change
|
|
|
|
|
|
|
|
Revenues
|
$1,439
|
$1,277
|
13 %
|
$4,235
|
$3,710
|
14 %
|
Operating (Loss)
Income
|
($134)
|
$5
|
**
|
($349)
|
($142)
|
**
|
Operating (Loss)
Income as a % of Revenues
|
(9.3 %)
|
0.4 %
|
(970)
BPS
|
(8.2 %)
|
(3.8 %)
|
(440)
BPS
|
Net
Loss
|
($204)
|
($128)
|
(60 %)
|
($692)
|
($303)
|
**
|
Net Loss as a % of
Revenues
|
(14.2 %)
|
(10.0 %)
|
(420)
BPS
|
(16.3 %)
|
(8.2 %)
|
(810)
BPS
|
Loss Per Share
(Fully Diluted)
|
($1.94)
|
($1.22)
|
(59 %)
|
($6.58)
|
($2.89)
|
**
|
Adjusted Loss Per
Share (Fully Diluted)*
|
($1.42)
|
($0.15)
|
**
|
($4.59)
|
($1.35)
|
**
|
Fully Diluted
Weighted Avg Share Count
|
105.2
|
104.7
|
|
105.1
|
104.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
** Represents an amount in
excess of 100% or not meaningful.
|
"Our priority is to strengthen Spirit financially. The signing
of the memorandum of agreement with Boeing was an important step
forward. In parallel, the Spirit team is focused on meeting our
customer commitments, improving operational performance and
commercial conversations with Airbus," said Pat Shanahan,
President and Chief Executive Officer, Spirit
AeroSystems.
Revenue
Spirit's revenue in the third quarter of 2023 was $1.4 billion, up 13 percent from the same period
of 2022. This increase was primarily due to higher production
deliveries on most Commercial programs as well as higher Defense
and Space and Aftermarket revenue.
Overall deliveries increased to 332 shipsets during the
third quarter of 2023 compared to 316 shipsets in the same period
of 2022. This includes Boeing 737 deliveries of 83 shipsets
compared to 69 shipsets in the same period of the prior year.
Spirit's backlog at the end of the third quarter of 2023 was
approximately $42.2 billion, which
includes work packages on all commercial platforms in the Airbus
and Boeing backlog.
Earnings
Operating loss for the third quarter of 2023 was $133.7 million, compared to operating income of
$4.5 million in the same period of
2022. The change was primarily driven by higher changes in
estimates and excess capacity costs recognized during the third
quarter of 2023.
Changes in estimates in the third quarter of 2023 included net
forward loss charges of $101.1
million and unfavorable cumulative catch-up adjustments for
periods prior to the third quarter of $64.0
million. Forward losses were primarily comprised of
$47.3 million on the Boeing 787
program and $22.7 million on the
Airbus A350 program, and were driven by higher estimates of supply
chain, labor and other costs. Unfavorable cumulative catch-up
adjustments were primarily comprised of $49.3 million on the Boeing 737 program and
$10.6 million on the Airbus A320
program, reflecting increased factory performance costs and, to a
lesser extent, rework costs related to the quality issue on the
Boeing 737 aft pressure. Excess capacity costs during the
third quarter of 2023 were $56.4
million. In comparison, during the third quarter of 2022,
Spirit recognized $49.1 million of
net forward loss charges, $4.9
million of unfavorable cumulative catch-up adjustments and
excess capacity costs of $31.4
million.
Other income for the third quarter of 2023 was $7.3 million, compared to other expense of
$42.1 million in the same period of
2022. The variance was primarily due to non-cash pre-tax charges of
$72.6 million recorded in the third
quarter of 2022 resulting from the termination of the Pension Value
Plan A, as well as lower pension income during the third quarter of
2023.
Third quarter 2023 EPS was $(1.94), compared to $(1.22) in the same period of 2022. Third quarter
2023 adjusted EPS* was $(1.42), which
excludes the incremental deferred tax asset valuation allowance. In
the same period of 2022, adjusted EPS* was $(0.15), which excluded the incremental deferred
tax asset valuation allowance and pension termination charges.
(Table 1)
Cash
Cash used in operations in the third quarter of 2023 was
$111 million, compared to cash used
in operations of $36 million in the
same quarter of 2022. Cash used in operations during the third
quarter of 2023 reflects higher negative impacts to working
capital, partially offset by the previously disclosed $50 million customer cash advance received during
the period.
Free cash flow* in the third quarter of 2023 was a usage of
$136 million, as compared to a usage
of $73 million in the same period of
2022.
The cash balance at the end of the third quarter of 2023 was
$374 million. (Table 2)
Table 2. Cash
Flow, Cash and Total Debt (unaudited)
|
|
|
|
|
|
3rd
Quarter
|
|
Nine
Months
|
|
($ in
millions)
|
2023
|
2022
|
Change
|
2023
|
2022
|
Change
|
|
|
|
|
|
|
|
Cash used in
Operations
|
($111)
|
($36)
|
**
|
($340)
|
($367)
|
8 %
|
Purchases of
Property, Plant & Equipment
|
($25)
|
($38)
|
33 %
|
($77)
|
($83)
|
7 %
|
Free Cash
Flow*
|
($136)
|
($73)
|
(85 %)
|
($416)
|
($450)
|
8 %
|
|
|
|
|
|
|
|
|
|
|
|
September
28,
|
December
31,
|
|
Cash and Total
Debt
|
|
|
|
2023
|
2022
|
|
Cash
|
|
|
|
$374
|
$659
|
|
Total
Debt
|
|
|
|
$3,875
|
$3,869
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
** Represents
an amount in excess of 100% or not meaningful.
|
Financial Outlook
Full-year 2023 cash used in operations is expected to be between
$150 and $200
million; full-year 2023 free cash flow* is expected to be a
usage between $275 and $325 million. This outlook reflects lower
projected Boeing 737 deliveries of 345 to 360 units for the year.
Additionally, the impacts of the memorandum of agreement detailed
in the 'Subsequent Event' section below are incorporated into this
outlook.
Please refer to our Cautionary Statement Regarding
Forward-Looking Statements below and 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.
Subsequent Event
On October 12, 2023, Spirit
AeroSystems, Inc. and Boeing executed a Memorandum of Agreement
(the "MOA"). As a result of the MOA, the Company expects to reverse
liabilities, including previously recorded forward losses and
material right obligation on the Boeing 787 program of
approximately $350 to $370 million in the fourth quarter of 2023. The
MOA amended the repayment dates for the $180
million of advances received as customer financing in the
second quarter ended June 29, 2023.
The amended repayment dates require repayment of $90 million in December
2025 and equal payments of $45
million in December 2026 and
2027. Additionally, related to the release of claims, Spirit will
reverse liabilities for certain claims received and other
anticipated claims on the balance sheet in the fourth quarter of
2023, including the $23 million of
anticipated claims related to the Boeing 737 Vertical Fin Attach
Fittings issue previously disclosed. Further, per the terms of the
MOA, Boeing will provide funding for tooling and capital through
2025 for certain planned and potential Boeing 737 and 787 program
rate increases, a portion of which, in the amount of approximately
$100 million, was received during the
fourth quarter of 2023.
Segment Results
Commercial
Commercial segment revenue in the third quarter of 2023
increased 10 percent from the same period of the prior year to
$1.1 billion, primarily due to higher
production across most programs. Operating margin for the third
quarter of 2023 decreased to negative 7 percent compared to 4
percent the same period of 2022, primarily due to higher changes in
estimates and excess capacity costs recorded in the current period.
In the third quarter of 2023, changes in estimates for the segment
included $86.5 million of net forward
losses and $59.1 million of
unfavorable cumulative catch-up adjustments. Additionally, during
the third quarter of 2023, the Commercial segment included excess
capacity costs of $54.3 million. In
comparison, during the third quarter of 2022, the segment
recognized $47.4 million of net
forward losses, $6.9 million of
unfavorable cumulative catch-up adjustments and excess capacity
costs of $29.9 million.
Defense & Space
Defense & Space segment revenue in the third quarter of 2023
increased 27 percent from the same period of the prior year to
$205.7 million, primarily due to
increased activity on development programs and higher production on
the KC-46 Tanker program in the current period. Operating margin
for the third quarter of 2023 decreased to 5 percent, compared to
11 percent during the same period of 2022, primarily due to higher
changes in estimates recorded in the current period. The segment
recorded net forward losses of $14.6
million, unfavorable cumulative catch-up adjustments of
$4.9 million, and excess capacity
costs of $2.1 million in the third
quarter of 2023. The forward losses were primarily driven by higher
production cost estimates on the Sikorsky CH-53K program and the
unfavorable cumulative catch-up adjustment was primarily driven by
the Boeing P-8 program. In comparison, during the third quarter of
2022, the segment recognized net forward losses of $1.7 million, favorable cumulative catch-up
adjustments of $2.0 million and
excess capacity costs of $1.5
million.
Aftermarket
Aftermarket segment revenue in the third quarter of 2023
increased by 21 percent compared to the same period of 2022 to
$96.8 million, primarily due to
higher spare part sales. Operating margin for the third quarter of
2023 decreased to 19 percent, compared to 24 percent during the
same period of 2022.
Table 4.
Segment Reporting (unaudited)
|
|
|
|
3rd
Quarter
|
Nine
Months
|
($ in
millions)
|
2023
|
2022
|
Change
|
2023
|
2022
|
Change
|
|
|
|
|
|
|
|
Segment
Revenues
|
|
|
|
|
|
|
Commercial
|
$1,136.4
|
$1,034.9
|
9.8 %
|
$3,367.9
|
$3,004.4
|
12.1 %
|
Defense
& Space
|
205.7
|
161.7
|
27.2 %
|
583.7
|
466.6
|
25.1 %
|
Aftermarket
|
96.8
|
80.3
|
20.5 %
|
283.4
|
238.5
|
18.8 %
|
Total Segment
Revenues
|
$1,438.9
|
$1,276.9
|
12.7 %
|
$4,235.0
|
$3,709.5
|
14.2 %
|
|
|
|
|
|
|
|
Segment (Loss)
Earnings from Operations
|
|
|
|
|
|
|
Commercial
|
($82.1)
|
$45.0
|
**
|
($200.5)
|
($3.5)
|
**
|
Defense
& Space
|
9.8
|
18.4
|
(46.7 %)
|
41.0
|
52.1
|
(21.3 %)
|
Aftermarket
|
17.9
|
19.5
|
(8.2 %)
|
61.4
|
49.3
|
24.5 %
|
Total Segment
Operating (Loss) Earnings
|
($54.4)
|
$82.9
|
**
|
($98.1)
|
$97.9
|
**
|
|
|
|
|
|
|
|
Segment Operating
(Loss) Earnings as % of Revenues
|
|
|
|
|
|
|
Commercial
|
(7.2 %)
|
4.3 %
|
**
|
(6.0 %)
|
(0.1 %)
|
(590)
BPS
|
Defense
& Space
|
4.8 %
|
11.4 %
|
(660)
BPS
|
7.0 %
|
11.2 %
|
(420)
BPS
|
Aftermarket
|
18.5 %
|
24.3 %
|
(580)
BPS
|
21.7 %
|
20.7 %
|
100
BPS
|
Total Segment
Operating (Loss) Earnings as % of Revenues
|
(3.8 %)
|
6.5 %
|
**
|
(2.3 %)
|
2.6 %
|
(490)
BPS
|
|
|
|
|
|
|
|
Unallocated
Expense
|
|
|
|
|
|
|
SG&A
|
($69.2)
|
($69.1)
|
(0.1 %)
|
($217.2)
|
($203.8)
|
(6.6 %)
|
Research &
Development
|
(10.1)
|
(9.3)
|
(8.6 %)
|
(33.9)
|
(36.5)
|
7.1 %
|
Total (Loss)
Earnings from Operations
|
($133.7)
|
$4.5
|
**
|
($349.2)
|
($142.4)
|
**
|
|
|
|
|
|
|
|
Total Operating
(Loss) Earnings as % of Revenues
|
(9.3 %)
|
0.4 %
|
(970)
BPS
|
(8.2 %)
|
(3.8 %)
|
(440)
BPS
|
|
|
|
|
|
|
|
|
** Represents an amount in
excess of 100% or not meaningful.
|
* Non-GAAP financial measure, see Appendix for definition and
reconciliation
Cautionary Statement Regarding Forward-Looking
Statements
This press release contains "forward-looking statements" that
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," "forecast," "goal,"
"intend," "may," "might," "objective," "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, including, but not limited
to, those described in the "Risk Factors" section of the 2022 Form
10-K. 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:
- the continued fragility of the global aerospace supply chain
including our dependence on our suppliers, as well as the cost and
availability of raw materials and purchased components, including
increases in energy, freight, and other raw material costs as a
result of inflation or continued global inflationary
pressures;
- our ability and our suppliers' ability to meet stringent
delivery (including quality and timeliness) standards and
accommodate changes in the build rates or model mix of aircraft,
including the ability to staff appropriately for current production
volumes and anticipated production volume increases;
- the ability to maintain continuing, uninterrupted production at
our manufacturing facilities and our suppliers' facilities;
- our ability, and our suppliers' ability, to attract and retain
the skilled work force necessary for production and development in
an extremely competitive market;
- the effect of economic conditions, including increases in
interest rates and inflation, on the demand for our and our
customers' products and services, on the industries and markets in
which we operate in the U.S. and globally, and on the global
aerospace supply chain;
- the general effect of geopolitical conditions, including
Russia's invasion of Ukraine and the resultant sanctions being
imposed in response to the conflict, including any trade and
transport restrictions;
- the recent outbreak of war in Israel and the Gaza
Strip and the potential for expansion of the conflict in the
surrounding region, which may impact certain suppliers' ability to
continue production or make timely deliveries of supplies required
to produce our products, and may result in sanctions being imposed
in response to the conflict, including any trade and transport
restrictions;
- our relationships with the unions representing many of our
employees, including our ability to successfully negotiate new
agreements, and avoid labor disputes and work stoppages with
respect to our union employees;
- the impact of significant health events, such as pandemics,
contagions or other public health emergencies (including the
COVID-19 pandemic) or fear of such events, on the demand for our
and our customers' products and services, the industries and
markets in which we operate in the U.S. and globally;
- the timing and conditions surrounding the full worldwide return
to service (including receiving the remaining regulatory approvals)
of the B737 MAX, future demand for the aircraft, and any residual
impacts of the B737 MAX grounding on production rates for the
aircraft;
- our reliance on The Boeing Company ("Boeing") and Airbus Group
SE and its affiliates (collectively, "Airbus") for a significant
portion of our revenues;
- the business condition and liquidity of our customers and their
ability to satisfy their contractual obligations to the
Company;
- the certainty of our backlog, including the ability of
customers to cancel or delay orders prior to shipment on short
notice, and the potential impact of regulatory approvals of
existing and derivative models;
- 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;
- our accounting estimates for revenue and costs for our
contracts and potential changes to those estimates;
- our ability to continue to grow and diversify our business,
execute our growth strategy, and secure replacement programs,
including our ability to enter into profitable supply arrangements
with additional customers;
- the outcome of product warranty or defective product claims and
the impact settlement of such claims may have on our accounting
assumptions;
- competitive conditions in the markets in which we operate,
including in-sourcing by commercial aerospace original equipment
manufacturers;
- our ability to successfully negotiate, or re-negotiate, future
pricing under our supply agreements with Boeing, Airbus and other
customers;
- the possibility that our cash flows may not be adequate for our
additional capital needs;
- any reduction in our credit ratings;
- our ability to access the capital or credit markets to fund our
liquidity needs, and the costs and terms of any additional
financing;
- our ability to avoid or recover from cyber or other security
attacks and other operations disruptions;
- legislative or regulatory actions, both domestic and foreign,
impacting our operations, including the effect of changes in tax
laws and rates and our ability to accurately calculate and estimate
the effect of such changes;
- spending by the U.S. and other governments on defense;
- pension plan assumptions and future contributions;
- the effectiveness of our internal control over financial
reporting;
- the outcome or impact of ongoing or future litigation,
arbitration, claims, and regulatory actions or investigations,
including our exposure to potential product liability and warranty
claims;
- adequacy of our insurance coverage;
- our ability to continue selling certain receivables through
supplier financing programs; and
- our ability to effectively integrate recent acquisitions, along
with other acquisitions 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;
- 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)
|
|
|
|
|
|
|
|
|
|
|
3rd Quarter
|
|
Nine Months
|
|
|
2023
|
2022
|
|
2023
|
|
2022
|
B737
|
|
83
|
69
|
|
252
|
|
200
|
B747
|
|
-
|
-
|
|
-
|
|
1
|
B767
|
|
7
|
7
|
|
24
|
|
23
|
B777
|
|
9
|
8
|
|
23
|
|
19
|
B787
|
|
9
|
6
|
|
25
|
|
13
|
Total Boeing
|
|
108
|
90
|
|
324
|
|
256
|
|
|
|
|
|
|
|
|
A220
|
|
16
|
12
|
|
43
|
|
46
|
A320 Family
|
|
129
|
145
|
|
423
|
|
447
|
A330
|
|
8
|
8
|
|
26
|
|
20
|
A350
|
|
12
|
11
|
|
37
|
|
37
|
Total Airbus
|
|
165
|
176
|
|
529
|
|
550
|
|
|
|
|
|
|
|
|
Business/Regional
Jet
|
|
59
|
50
|
|
167
|
|
149
|
|
|
|
|
|
|
|
|
Total
|
|
332
|
316
|
|
1,020
|
|
955
|
|
|
|
|
|
|
|
|
|
|
Spirit AeroSystems
Holdings, Inc.
|
Condensed
Consolidated Statements of Operations
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended
|
|
For the Nine Months
Ended
|
|
|
|
September 28,
2023
|
|
September 29,
2022
|
|
September 28,
2023
|
|
September 29,
2022
|
|
|
($ in millions,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
Net revenues
|
|
$1,438.9
|
|
$1,276.9
|
|
$4,235.0
|
|
$3,709.5
|
Operating costs and
expenses:
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
1,492.5
|
|
1,194.0
|
|
4,320.2
|
|
3,611.4
|
Selling, general and
administrative
|
|
69.2
|
|
69.1
|
|
217.2
|
|
203.8
|
Restructuring
costs
|
|
-
|
|
-
|
|
7.2
|
|
0.2
|
Research and
development
|
|
10.1
|
|
9.3
|
|
33.9
|
|
36.5
|
Other operating
expense
|
|
0.8
|
|
-
|
|
5.7
|
|
-
|
|
Total operating
costs and expenses
|
|
1,572.6
|
|
1,272.4
|
|
4,584.2
|
|
3,851.9
|
|
Operating (loss)
income
|
|
(133.7)
|
|
4.5
|
|
(349.2)
|
|
(142.4)
|
Interest expense and
financing fee amortization
|
|
(75.1)
|
|
(56.8)
|
|
(221.1)
|
|
(170.8)
|
Other income (expense),
net
|
|
7.3
|
|
(42.1)
|
|
(120.0)
|
|
30.2
|
|
Loss before income
taxes and equity in net loss of affiliates
|
|
(201.5)
|
|
(94.4)
|
|
(690.3)
|
|
(283.0)
|
Income tax
provision
|
|
(2.4)
|
|
(32.9)
|
|
(1.1)
|
|
(18.4)
|
|
Loss before equity
in net loss of affiliates
|
|
(203.9)
|
|
(127.3)
|
|
(691.4)
|
|
(301.4)
|
Equity in net loss of
affiliates
|
|
-
|
|
(0.3)
|
|
(0.2)
|
|
(1.2)
|
|
Net
loss
|
|
(203.9)
|
|
(127.6)
|
|
(691.6)
|
|
(302.6)
|
Less noncontrolling
interest in earnings of subsidiary
|
|
(0.2)
|
|
-
|
|
-
|
|
-
|
|
Net loss
attributable to common shareholders
|
|
($204.1)
|
|
($127.6)
|
|
($691.6)
|
|
($302.6)
|
|
|
|
|
|
|
|
|
|
|
Loss per
share
|
|
|
|
|
|
|
|
|
Basic
|
|
$
(1.94)
|
|
($1.22)
|
|
$
(6.58)
|
|
($2.89)
|
Shares
|
|
105.2
|
|
104.7
|
|
105.1
|
|
104.6
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
$
(1.94)
|
|
($1.22)
|
|
$
(6.58)
|
|
($2.89)
|
Shares
|
|
105.2
|
|
104.7
|
|
105.1
|
|
104.6
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per
common share
|
|
$0.00
|
|
$0.01
|
|
$0.00
|
|
$0.03
|
Spirit AeroSystems
Holdings, Inc.
|
Condensed
Consolidated Balance Sheets
|
(unaudited)
|
|
|
September 28,
2023
|
|
December 31,
2022
|
|
|
($ in
millions)
|
Assets
|
|
|
|
|
Cash and cash
equivalents
|
|
$374.1
|
|
$658.6
|
Restricted
cash
|
|
0.2
|
|
0.2
|
Accounts receivable,
net
|
|
610.3
|
|
489.5
|
Contract assets,
short-term
|
|
596.0
|
|
501.0
|
Inventory,
net
|
|
1,690.0
|
|
1,470.7
|
Other current
assets
|
|
50.6
|
|
38.3
|
Total current assets
|
|
3,321.2
|
|
3,158.3
|
Property, plant and
equipment, net
|
|
2,084.1
|
|
2,205.9
|
Intangible assets,
net
|
|
200.0
|
|
211.4
|
Goodwill
|
|
631.1
|
|
630.5
|
Right of use
assets
|
|
93.5
|
|
94.3
|
Contract assets,
long-term
|
|
20.9
|
|
1.2
|
Pension
assets
|
|
28.3
|
|
196.9
|
Restricted plan
assets
|
|
61.4
|
|
71.1
|
Deferred income
taxes
|
|
0.1
|
|
4.8
|
Other assets
|
|
97.5
|
|
91.8
|
Total assets
|
|
$6,538.1
|
|
$6,666.2
|
Liabilities
|
|
|
|
|
Accounts
payable
|
|
$1,030.3
|
|
$919.8
|
Accrued
expenses
|
|
479.5
|
|
411.7
|
Profit
sharing
|
|
18.1
|
|
40.5
|
Current portion of
long-term debt
|
|
64.2
|
|
53.7
|
Operating lease
liabilities, short-term
|
|
8.4
|
|
8.3
|
Advance payments,
short-term
|
|
36.5
|
|
24.9
|
Contract liabilities,
short-term
|
|
157.2
|
|
111.1
|
Forward loss provision,
short-term
|
|
335.3
|
|
305.9
|
Deferred revenue and
other deferred credits, short-term
|
|
48.4
|
|
21.7
|
Other current
liabilities
|
|
172.1
|
|
54.9
|
Total current liabilities
|
|
2,350.0
|
|
1,952.5
|
Long-term
debt
|
|
3,811.0
|
|
3,814.9
|
Operating lease
liabilities, long-term
|
|
84.9
|
|
85.4
|
Advance payments,
long-term
|
|
276.9
|
|
199.9
|
Pension/OPEB
obligation
|
|
22.2
|
|
25.2
|
Contract liabilities,
long-term
|
|
195.6
|
|
245.3
|
Forward loss provision,
long-term
|
|
289.4
|
|
369.2
|
Deferred revenue and
other deferred credits, long-term
|
|
87.2
|
|
49.0
|
Deferred grant income
liability - non-current
|
|
25.4
|
|
25.7
|
Deferred income
taxes
|
|
8.2
|
|
1.3
|
Other non-current
liabilities
|
|
243.0
|
|
141.6
|
Stockholders'
Equity
|
|
|
|
|
Common stock,
Class A par value $0.01, 200,000,000 shares authorized,
105,304,482 and 105,252,421 shares issued and outstanding,
respectively
|
|
1.1
|
|
1.1
|
Additional paid-in
capital
|
|
1,205.3
|
|
1,179.5
|
Accumulated other
comprehensive loss
|
|
(150.0)
|
|
(203.9)
|
Retained
earnings
|
|
540.9
|
|
1,232.5
|
Treasury stock, at cost
(41,587,480 shares each period)
|
|
(2,456.7)
|
|
(2,456.7)
|
Total stockholders' equity
|
|
(859.4)
|
|
(247.5)
|
Noncontrolling
interest
|
|
3.7
|
|
3.7
|
Total equity
|
|
(855.7)
|
|
(243.8)
|
Total liabilities and equity
|
|
$6,538.1
|
|
$6,666.2
|
|
|
|
|
|
Spirit AeroSystems
Holdings, Inc.
|
Condensed
Consolidated Statements of Cash Flows
|
(unaudited)
|
|
|
|
|
|
|
|
For the Nine Months
Ended
|
|
|
September 28,
2023
|
|
September 29,
2022
|
|
|
($ in
millions)
|
Operating
activities
|
|
|
|
|
Net loss
|
|
($691.6)
|
|
($302.6)
|
Adjustments to
reconcile net loss to net cash used in operating
activities
|
|
|
|
|
Depreciation and
amortization expense
|
|
236.9
|
|
253.2
|
Amortization of deferred
financing fees
|
|
5.2
|
|
5.6
|
Accretion of customer supply
agreement
|
|
1.8
|
|
1.6
|
Employee stock compensation
expense
|
|
29.3
|
|
28.7
|
(Gain) loss from derivative
instruments
|
|
(1.7)
|
|
10.5
|
Gain from foreign currency
transactions
|
|
(4.0)
|
|
(36.9)
|
Loss on disposition of
assets
|
|
0.9
|
|
0.8
|
Deferred
taxes
|
|
(3.8)
|
|
15.7
|
Pension and other
post-retirement plans expense
|
|
61.8
|
|
17.2
|
Grant liability
amortization
|
|
(0.9)
|
|
(1.1)
|
Equity in net loss of
affiliates
|
|
0.2
|
|
1.2
|
Forward loss
provision
|
|
(50.7)
|
|
(115.3)
|
Gain on settlement of
financial instrument
|
|
(1.4)
|
|
(21.4)
|
Change in fair value of
acquisition consideration and settlement
|
|
(2.4)
|
|
-
|
Changes in assets and
liabilities
|
|
|
|
|
Accounts receivable,
net
|
|
(127.0)
|
|
(89.0)
|
Contract assets
|
|
(114.5)
|
|
(112.5)
|
Inventory, net
|
|
(227.0)
|
|
(47.9)
|
Accounts payable and accrued
liabilities
|
|
222.2
|
|
210.6
|
Profit sharing/deferred
compensation
|
|
(22.5)
|
|
(47.6)
|
Advance payments
|
|
87.4
|
|
(99.3)
|
Income taxes
receivable/payable
|
|
1.1
|
|
17.8
|
Contract
liabilities
|
|
(3.9)
|
|
(25.1)
|
Pension plans employer
contributions
|
|
178.0
|
|
19.1
|
Deferred revenue and other
deferred credits
|
|
67.4
|
|
(44.4)
|
Other
|
|
19.7
|
|
(6.3)
|
Net
cash used in operating activities
|
|
($339.5)
|
|
($367.4)
|
Investing
activities
|
|
|
|
|
Purchase of property, plant
and equipment
|
|
(76.5)
|
|
(82.7)
|
Other
|
|
-
|
|
(6.1)
|
Net
cash used in investing activities
|
|
($76.5)
|
|
($88.8)
|
Financing
activities
|
|
|
|
|
Proceeds from issuance of
debt
|
|
12.7
|
|
-
|
Borrowings under revolving
credit facility
|
|
1.6
|
|
-
|
Payment of principal -
settlement of financial instrument
|
|
-
|
|
(289.5)
|
Customer
financing
|
|
180.0
|
|
-
|
Principal payments of
debt
|
|
(47.2)
|
|
(33.7)
|
Payments on term
loan
|
|
(3.0)
|
|
(3.0)
|
Payment of acquisition
consideration
|
|
(6.0)
|
|
-
|
Taxes paid related to net
share settlement awards
|
|
(6.1)
|
|
(7.0)
|
Proceeds from issuance of
ESPP stock
|
|
2.6
|
|
1.9
|
Debt issuance and financing
costs
|
|
(0.5)
|
|
-
|
Dividends paid
|
|
-
|
|
(3.2)
|
Net
cash provided by (used in) financing activities
|
|
$134.1
|
|
($334.5)
|
Effect of exchange rate
changes on cash and cash equivalents
|
|
-
|
|
(17.5)
|
Net
decrease in cash, cash equivalents and restricted cash for the
period
|
|
($281.9)
|
|
($808.2)
|
Cash, cash equivalents,
and restricted cash, beginning of the period
|
|
678.4
|
|
1,498.4
|
Cash, cash equivalents,
and restricted cash, end of the period
|
|
$396.5
|
|
$690.2
|
|
|
|
|
|
Reconciliation of
Cash and Cash Equivalents and Restricted Cash:
|
|
September 28,
2023
|
|
September 29,
2022
|
Cash and cash
equivalents, beginning of the period
|
|
$658.6
|
|
$1,478.6
|
Restricted cash,
short-term, beginning of the period
|
|
0.2
|
|
0.3
|
Restricted cash,
long-term, beginning of the period
|
|
19.6
|
|
19.5
|
Cash, cash equivalents,
and restricted cash, beginning of the period
|
|
$678.4
|
|
$1,498.4
|
|
|
|
|
|
Cash and cash
equivalents, end of the period
|
|
$374.1
|
|
$670.5
|
Restricted cash,
short-term, end of the period
|
|
0.2
|
|
0.2
|
Restricted cash,
long-term, end of the period
|
|
22.2
|
|
19.5
|
Cash, cash equivalents,
and restricted cash, end of the period
|
|
$396.5
|
|
$690.2
|
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 (loss) 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 (Loss) Earnings Per Share. To provide
additional transparency, we have disclosed non-GAAP adjusted
diluted (loss) 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
(loss) per share.
Free Cash Flow. Free Cash Flow is defined as GAAP cash provided
by (used in) operating activities (also 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
(used in) 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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Nine months
ended
|
|
|
|
September 28,
2023
|
|
September 29,
2022
|
|
September 28,
2023
|
|
September 29,
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Diluted Loss Per
Share
|
|
($1.94)
|
|
($1.22)
|
|
($6.58)
|
|
($2.89)
|
|
Deferred Tax Asset
Valuation Allowance
|
|
0.52
|
a
|
0.58
|
a
|
1.52
|
a
|
1.01
|
a
|
Investment Agreement
Settlement Gain
|
|
-
|
|
-
|
|
-
|
|
(0.14)
|
b
|
Losses related to
Russia Sanctions
|
|
-
|
|
-
|
|
-
|
|
0.19
|
c
|
Pension Termination
Charges
|
|
-
|
|
0.49
|
d
|
0.47
|
d
|
0.48
|
d
|
Adjusted Diluted Loss
Per Share
|
|
($1.42)
|
|
($0.15)
|
|
($4.59)
|
|
($1.35)
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Shares (in
millions)
|
|
105.2
|
|
104.7
|
|
105.1
|
|
104.6
|
|
|
|
a
|
Represents the deferred
tax asset valuation allowance (included in Income tax
provision)
|
|
|
b
|
Represents the
settlement gain resulting from the settlement of the repayable
investment agreement with the U.K. Department of Business,
Energy and Industrial Strategy (included in Other
income)
|
|
|
c
|
Represents the
impairment charges and reserve adjustments related to the
suspension of all sales and service activities relating to
sanctioned Russian business activities. These losses are directly
attributable to the sanctions, incremental to similar costs (or
income) incurred for reasons other than the sanctions and are
not expected to recur, and therefore, are not indicative of
Spirit's ongoing operational performance (primarily included
in Cost of Sales)
|
|
d
|
Represents the non-cash
charges related to the termination of the U.S. Pension Value Plan A
(included in Other income)
|
Free Cash
Flow
|
($ in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Nine months
ended
|
|
Outlook
|
|
September 28,
2023
|
|
September 29,
2022
|
|
September 28,
2023
|
|
September 29,
2022
|
|
Full-Year
2023
|
|
|
|
|
|
|
|
|
|
|
Cash Used in
Operations
|
($111)
|
|
($36)
|
|
($340)
|
|
($367)
|
|
($150) -
($200)
|
Capital
Expenditures
|
(25)
|
|
(38)
|
|
(77)
|
|
(83)
|
|
~(125)
|
Free Cash
Flow
|
($136)
|
|
($73)
|
|
($416)
|
|
($450)
|
|
($275) -
($325)
|
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SOURCE Spirit Aerosystems