- EPS of $0.88, up $0.18 from adjusted EPS in the first quarter
of 2021
- Aviation backlog $5.1 billion, up $1.0 billion from year-end
2021
- Net cash from operating activities of $225 million, up $118
million from the first quarter of 2021
Textron Inc. (NYSE: TXT) today reported first quarter 2022 net
income of $0.88 per share, compared with $0.75 per share, or $0.70
per share of adjusted net income, a non-GAAP measure that is
defined and reconciled to GAAP in an attachment to this release, in
the first quarter of 2021.
“In the quarter, we saw higher overall revenues, net operating
profit and cash generation as compared to last year's first
quarter,” said Textron Chairman and CEO Scott C. Donnelly. "At
Textron Aviation, we saw continued strong order momentum with
backlog growth of $1 billion and solid execution with segment
profit margin of 11.6%."
Cash Flow
Net cash provided by operating activities of the manufacturing
group for the first quarter was $225 million, compared to $107
million last year. Manufacturing cash flow before pension
contributions, a non-GAAP measure that is defined and reconciled to
GAAP in an attachment to this release, totaled $209 million for the
first quarter, compared to $71 million last year.
In the quarter, Textron returned $157 million to shareholders
through share repurchases.
First Quarter Segment Results
Textron Aviation
Revenues at Textron Aviation of $1.0 billion were up $175
million from the first quarter of 2021, largely due to higher
aircraft and aftermarket volume.
Textron Aviation delivered 39 jets in the quarter, up from 28
last year, and 31 commercial turboprops, up from 14 in last year's
first quarter.
Segment profit was $121 million in the first quarter, up $74
million from a year ago, largely due to the impact from higher
volume and mix of $55 million and favorable pricing, net of
inflation of $16 million.
Textron Aviation backlog at the end of the first quarter was
$5.1 billion.
Bell
Bell revenues were $834 million, down $12 million from last
year, due to lower commercial revenues of $32 million, largely
reflecting the mix of aircraft sold during the periods, partially
offset by higher military revenues of $20 million.
Bell delivered 25 commercial helicopters in the quarter, up from
17 last year.
Segment profit of $98 million was down $7 million, primarily
reflecting lower volume and mix described above, partially offset
by a favorable impact from performance.
Bell backlog at the end of the first quarter was $4.8
billion.
Textron Systems
Revenues at Textron Systems were $273 million, down $55 million
from last year's first quarter due to lower volume of $59 million,
primarily reflecting the impact of the U.S. Army’s withdrawal from
Afghanistan on our fee-for-service and aircraft support
contracts.
Segment profit of $33 million was down $18 million from a year
ago, largely due to the impact of lower volume and mix of $11
million and an unfavorable impact from performance of $9 million,
primarily reflecting lower net favorable program adjustments
related to our fee-for-service contracts.
Textron Systems’ backlog at the end of the first quarter was
$2.1 billion.
Industrial
Industrial revenues were $838 million, up $13 million from last
year, primarily due to a favorable impact of $46 million from
pricing, principally in the Specialized Vehicles product line,
partially offset by lower volume and mix in the Fuel Systems and
Functional Components product line due to the impact of global
supply chain shortages on our auto OEM customers.
Segment profit of $43 million was down $4 million from the first
quarter of 2021, primarily due to the lower volume and mix
described above.
Finance
Finance segment revenues were $16 million, and profit was $9
million.
Conference Call Information
Textron will host its conference call today, April 28, 2022 at
8:00 a.m. (Eastern) to discuss its results and outlook. The call
will be available via webcast at www.textron.com or by direct dial
at (844) 867-6169 in the U.S. or (409) 207-6975 outside of the
U.S.; Access Code: 6069432.
In addition, the call will be recorded and available for
playback beginning at 11:00 a.m. (Eastern) on Thursday, April 28,
2022 by dialing (402) 970-0847; Access Code: 5894411.
A package containing key data that will be covered on today’s
call can be found in the Investor Relations section of the
company’s website at www.textron.com.
About Textron Inc.
Textron Inc. is a multi-industry company that leverages its
global network of aircraft, defense, industrial and finance
businesses to provide customers with innovative solutions and
services. Textron is known around the world for its powerful brands
such as Bell, Cessna, Beechcraft, Hawker, Jacobsen, Kautex,
Lycoming, E-Z-GO, Arctic Cat, and Textron Systems. For more
information visit: www.textron.com.
Forward-looking Information
Certain statements in this release and other oral and written
statements made by us from time to time are “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements, which may
describe strategies, goals, outlook or other non-historical
matters, or project revenues, income, returns or other financial
measures, often include words such as “believe,” “expect,”
“anticipate,” “intend,” “plan,” “estimate,” “guidance,” “project,”
“target,” “potential,” “will,” “should,” “could,” “likely” or “may”
and similar expressions intended to identify forward-looking
statements. These statements are only predictions and involve known
and unknown risks, uncertainties, and other factors that may cause
our actual results to differ materially from those expressed or
implied by such forward-looking statements. Given these
uncertainties, you should not place undue reliance on these
forward-looking statements. Forward-looking statements speak only
as of the date on which they are made, and we undertake no
obligation to update or revise any forward-looking statements. In
addition to those factors described in our Annual Report on Form
10-K and our Quarterly Reports on Form 10-Q under “Risk Factors”,
among the factors that could cause actual results to differ
materially from past and projected future results are the
following: Interruptions in the U.S. Government’s ability to fund
its activities and/or pay its obligations; changing priorities or
reductions in the U.S. Government defense budget, including those
related to military operations in foreign countries; our ability to
perform as anticipated and to control costs under contracts with
the U.S. Government; the U.S. Government’s ability to unilaterally
modify or terminate its contracts with us for the U.S. Government’s
convenience or for our failure to perform, to change applicable
procurement and accounting policies, or, under certain
circumstances, to withhold payment or suspend or debar us as a
contractor eligible to receive future contract awards; changes in
foreign military funding priorities or budget constraints and
determinations, or changes in government regulations or policies on
the export and import of military and commercial products;
volatility in the global economy or changes in worldwide political
conditions that adversely impact demand for our products;
volatility in interest rates or foreign exchange rates and
inflationary pressures; risks related to our international
business, including establishing and maintaining facilities in
locations around the world and relying on joint venture partners,
subcontractors, suppliers, representatives, consultants and other
business partners in connection with international business,
including in emerging market countries; our Finance segment’s
ability to maintain portfolio credit quality or to realize full
value of receivables; performance issues with key suppliers or
subcontractors; legislative or regulatory actions, both domestic
and foreign, impacting our operations or demand for our products;
our ability to control costs and successfully implement various
cost-reduction activities; the efficacy of research and development
investments to develop new products or unanticipated expenses in
connection with the launching of significant new products or
programs; the timing of our new product launches or certifications
of our new aircraft products; our ability to keep pace with our
competitors in the introduction of new products and upgrades with
features and technologies desired by our customers; pension plan
assumptions and future contributions; demand softness or volatility
in the markets in which we do business; cybersecurity threats,
including the potential misappropriation of assets or sensitive
information, corruption of data or, operational disruption;
difficulty or unanticipated expenses in connection with integrating
acquired businesses; the risk that acquisitions do not perform as
planned, including, for example, the risk that acquired businesses
will not achieve revenue and profit projections; the impact of
changes in tax legislation; risks and uncertainties related to the
ongoing impact of the COVID-19 pandemic and the potential impact of
Russia’s invasion of, and continued military attacks on, Ukraine,
on our business and operations; and the ability of our businesses
to hire and retain the highly skilled personnel necessary for our
businesses to succeed.
TEXTRON INC.
Revenues by Segment and
Reconciliation of Segment Profit to Net Income
(Dollars in millions, except per
share amounts)
(Unaudited)
Three Months Ended
April 2, 2022
April 3, 2021
REVENUES
MANUFACTURING:
Textron Aviation
$
1,040
$
865
Bell
834
846
Textron Systems
273
328
Industrial
838
825
2,985
2,864
FINANCE
16
15
Total revenues
$
3,001
$
2,879
SEGMENT
PROFIT
MANUFACTURING:
Textron Aviation
$
121
$
47
Bell
98
105
Textron Systems
33
51
Industrial
43
47
295
250
FINANCE
9
6
Segment profit
304
256
Corporate expenses and other, net
(44
)
(40
)
Interest expense, net for Manufacturing
group
(28
)
(35
)
Special charges (a)
—
(6
)
Gain on business disposition (b)
—
15
Income before income taxes
232
190
Income tax expense
(39
)
(19
)
Net income
$
193
$
171
Diluted earnings per share
$
0.88
$
0.75
Diluted average shares outstanding
219,607,000
228,284,000
Net income and Diluted earnings per
share (EPS) GAAP to Non-GAAP reconciliation for the three months
ended April 3, 2021:
April 3, 2021
Net income - GAAP
$
171
Add: Special charges, net of tax (a)
4
Less: Gain on business disposition, net of
tax (b)
(15
)
Adjusted net income - Non-GAAP
(c)
$
160
Earnings Per Share:
Net income - GAAP
$
0.75
Add: Special charges, net of tax (a)
0.02
Less: Gain on business disposition, net of
tax (b)
(0.07
)
Adjusted net income - Non-GAAP
(c)
$
0.70
(a) In connection with a restructuring plan initiated in the second
quarter of 2020, we incurred special charges of $6 million for the
three months ended April 3, 2021. (b) In January 2021, we completed
the sale of TRU Simulation + Training Canada Inc. which resulted in
an after-tax gain of $15 million. (c) Adjusted net income and
adjusted diluted earnings per share are non-GAAP financial measures
as defined in "Non-GAAP Financial Measures" attached to this
release.
TEXTRON INC.
Condensed Consolidated Balance
Sheets
(In millions)
(Unaudited)
April 2, 2022
January 1, 2022
Assets
Cash and equivalents
$
1,978
$
1,922
Accounts receivable, net
800
838
Inventories
3,663
3,468
Other current assets
1,055
1,018
Net property, plant and equipment
2,488
2,538
Goodwill
2,147
2,149
Other assets
3,025
3,027
Finance group assets
755
867
Total Assets
$
15,911
$
15,827
Liabilities and Shareholders'
Equity
Current portion of long-term debt
$
7
$
6
Accounts payable
823
786
Other current liabilities
2,507
2,344
Other liabilities
1,912
2,005
Long-term debt
3,178
3,179
Finance group liabilities
567
692
Total Liabilities
8,994
9,012
Total Shareholders' Equity
6,917
6,815
Total Liabilities and Shareholders'
Equity
$
15,911
$
15,827
TEXTRON INC.
MANUFACTURING GROUP
Condensed Schedule of Cash
Flows
(In millions)
(Unaudited)
Three Months Ended
April 2, 2022
April 3, 2021
Cash Flows from Operating
Activities:
Net income
$
185
$
177
Depreciation and amortization
93
88
Deferred income taxes and income taxes
receivable/payable
17
(12
)
Pension, net
(41
)
(23
)
Gain on business disposition
—
(15
)
Changes in assets and liabilities:
Accounts receivable, net
37
(103
)
Inventories
(176
)
(178
)
Accounts payable
38
259
Other, net
72
(86
)
Net cash from operating
activities
225
107
Cash Flows from Investing
Activities:
Capital expenditures
(48
)
(53
)
Proceeds from sale of property, plant and
equipment
18
—
Net proceeds from business disposition
—
39
Other investing activities, net
2
—
Net cash from investing
activities
(28
)
(14
)
Cash Flows from Financing
Activities:
Principal payments on long-term debt and
nonrecourse debt
(2
)
(267
)
Purchases of Textron common stock
(157
)
(91
)
Dividends paid
(5
)
(5
)
Other financing activities, net
25
24
Net cash from financing
activities
(139
)
(339
)
Total cash flows from continuing
operations
58
(246
)
Effect of exchange rate changes on cash
and equivalents
(2
)
(3
)
Net change in cash and
equivalents
56
(249
)
Cash and equivalents at beginning of
period
1,922
2,146
Cash and equivalents at end of
period
$
1,978
$
1,897
Manufacturing cash flow GAAP to
Non-GAAP reconciliation:
Three Months Ended
April 2, 2022
April 3, 2021
Net cash from operating activities -
GAAP
$
225
$
107
Less: Capital expenditures
(48
)
(53
)
Add: Total pension contributions
14
17
Proceeds from sale of property, plant and
equipment
18
—
Manufacturing cash flow before pension
contributions - Non-GAAP (a)
$
209
$
71
(a) Manufacturing cash flow before pension contributions is a
non-GAAP financial measure as defined in "Non-GAAP Financial
Measures" attached to this release.
TEXTRON INC.
Condensed Consolidated
Schedule of Cash Flows
(In millions)
(Unaudited)
Three Months Ended
April 2, 2022
April 3, 2021
Cash Flows from Operating
Activities:
Net income
$
193
$
171
Depreciation and amortization
93
90
Deferred income taxes and income taxes
receivable/payable
19
—
Pension, net
(41
)
(23
)
Gain on business disposition
—
(15
)
Changes in assets and liabilities:
Accounts receivable, net
37
(103
)
Inventories
(176
)
(178
)
Accounts payable
38
259
Captive finance receivables, net
18
69
Other, net
60
(89
)
Net cash from operating
activities
241
181
Cash Flows from Investing
Activities:
Capital expenditures
(48
)
(53
)
Proceeds from sale of property, plant and
equipment
18
—
Net proceeds from business disposition
—
39
Finance receivables repaid
13
13
Other investing activities, net
45
6
Net cash from investing
activities
28
5
Cash Flows from Financing
Activities:
Principal payments on long-term debt and
nonrecourse debt
(121
)
(287
)
Purchases of Textron common stock
(157
)
(91
)
Dividends paid
(5
)
(5
)
Other financing activities, net
25
24
Net cash from financing
activities
(258
)
(359
)
Total cash flows from continuing
operations
11
(173
)
Total cash flows from discontinued
operations
—
—
Effect of exchange rate changes on cash
and equivalents
(2
)
(3
)
Net change in cash and
equivalents
9
(176
)
Cash and equivalents at beginning of
period
2,117
2,254
Cash and equivalents at end of
period
$
2,126
$
2,078
TEXTRON INC. Non-GAAP Financial Measures
(Dollars in millions, except per share amounts)
We supplement the reporting of our financial information
determined under U.S. generally accepted accounting principles
(GAAP) with certain non-GAAP financial measures. These non-GAAP
financial measures exclude certain significant items that may not
be indicative of, or are unrelated to, results from our ongoing
business operations. We believe that these non-GAAP measures may be
useful for period-over-period comparisons of underlying business
trends and our ongoing business performance, however, they should
be used in conjunction with GAAP measures. Our non-GAAP measures
should not be considered in isolation or as a substitute for the
related GAAP measures, and other companies may define similarly
named measures differently. We encourage investors to review our
financial statements and publicly-filed reports in their entirety
and not to rely on any single financial measure. We utilize the
following definitions for the non-GAAP financial measures included
in this release and have provided a reconciliation of the GAAP to
non-GAAP amounts for each measure:
Adjusted Net Income and Adjusted
Diluted Earnings Per Share
Adjusted net income and adjusted diluted earnings per share
exclude special charges, net of tax. We consider items recorded in
special charges, such as enterprise-wide restructuring, certain
asset impairment charges, and acquisition-related restructuring,
integration and transaction costs, to be of a non-recurring nature
that is not indicative of ongoing operations. The gain on
disposition, net of tax is also excluded as it relates to a
disposition in connection with our enterprise-wide restructuring
plan, which resulted in the sale of the TRU Simulation + Training
Canada Inc. business.
Three Months Ended April 3,
2021
Diluted EPS
Net income - GAAP
$
171
$
0.75
Add: Special charges, net of tax
4
0.02
Less: Gain on business disposition, net of
tax
(15
)
(0.07
)
Adjusted net income - Non-GAAP
$
160
$
0.70
Manufacturing Cash Flow Before Pension
Contributions
Manufacturing cash flow before pension contributions adjusts net
cash from operating activities (GAAP) for the following:
- Deducts capital expenditures and includes proceeds from
insurance recoveries and the sale of property, plant and equipment
to arrive at the net capital investment required to support ongoing
manufacturing operations;
- Excludes dividends received from Textron Financial Corporation
(TFC) and capital contributions to TFC provided under the Support
Agreement and debt agreements as these cash flows are not
representative of manufacturing operations;
- Adds back pension contributions as we consider our pension
obligations to be debt-like liabilities. Additionally, these
contributions can fluctuate significantly from period to period and
we believe that they are not representative of cash used by our
manufacturing operations during the period.
While we believe this measure provides a focus on cash generated
from manufacturing operations, before pension contributions, and
may be used as an additional relevant measure of liquidity, it does
not necessarily provide the amount available for discretionary
expenditures since we have certain non-discretionary obligations
that are not deducted from the measure.
Three Months Ended
April 2, 2022
April 3, 2021
Net cash from operating activities -
GAAP
$
225
$
107
Less: Capital expenditures
(48
)
(53
)
Plus: Total pension contributions
14
17
Proceeds from sale of property, plant and
equipment
18
—
Manufacturing cash flow before pension
contributions - Non-GAAP
$
209
$
71
2022 Outlook
Net cash from operating activities -
GAAP
$
1,057
—
$
1,157
Less: Capital expenditures
(425)
Add: Total pension contributions
50
Proceeds from sale of property, plant and
equipment
18
Manufacturing cash flow before pension
contributions - Non-GAAP
$
700
—
$
800
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220428005041/en/
Investor Contacts: Eric Salander – 401-457-2288 Cameron
Vollmuth – 401-457-2288 Media Contact: Mike Maynard –
401-457-2362
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