WICHITA, Kan., May 2, 2018 /CNW/
-- Spirit AeroSystems Holdings, Inc. [NYSE: SPR]
reported first quarter 2018 financial results, announced the
acquisition of Asco Industries, highlighted plans to refinance its
debt, outlined plan for ASR and announced a 20 percent increase in
the quarterly cash dividend.
Table 1.
Summary Financial Results (unaudited)
|
|
1st
Quarter
|
|
($ in millions,
except per share data)
|
2018
|
2017
|
Change
|
|
|
|
|
Revenues
|
$1,736
|
$1,694
|
2%
|
Operating
Income
|
$160
|
$204
|
(22%)
|
Operating Income
as a % of Revenues
|
9.2%
|
12.1%
|
(290)
BPS
|
Net
Income
|
$125
|
$142
|
(12%)
|
Net Income as a %
of Revenues
|
7.2%
|
8.4%
|
(120)
BPS
|
Earnings Per Share
(Fully Diluted)
|
$1.10
|
$1.17
|
(6%)
|
Fully Diluted
Weighted Avg Share Count
|
114.1
|
120.7
|
|
|
|
|
|
|
|
|
|
First Quarter Performance
"During the quarter, we worked very hard to enable our customers
to meet their deliveries. We incurred additional costs due to
supplier disruptions, expedited freight and surge resources. To
offset these items, we have put recovery plans in place which our
teams are executing effectively. We are successfully transitioning
into higher rates of production. We expect to be back on schedule
on the 737 program by the middle of this year, at which point we
expect to see overtime decline and a reduction in surge resources,"
remarked Spirit President and CEO Tom
Gentile.
First Quarter Announcements
Spirit announced that on May 1,
2018, it entered into a definitive agreement to acquire
S.R.I.F. N.V., the parent company of Asco Industries N.V. (Asco)
for $650 million in cash, subject to
customary closing adjustments, including foreign currency
adjustments. Asco is a critical supplier to OEMs and Tier-1
manufacturers with an exceptional reputation for innovation,
quality and delivery.
"We are very excited to announce the acquisition of Asco, a
world-class aerospace supplier of wing structures, mechanical
assemblies, and major functional components," Gentile said. "Asco
is a compelling fit for Spirit that aligns extremely well with the
strategic priorities that we have been communicating. Specifically,
it expands our Airbus content on A320 and A350 wings, adds new
defense content on the F-35, and broadens the commercial
capabilities to help grow our fabrication business."
The acquisition is subject to customary closing conditions,
including regulatory approvals and customer consents, and is
expected to close in the second half of 2018. "We expect to realize
attractive cost synergies from the acquisition; the expected return
on investment exceeds our internal threshold and the post-synergy
EBITDA multiple* is under 8x," said Gentile. Financial results will
not include Asco results until the acquisition is closed.
In addition, Spirit plans to refinance some of its existing debt
as part of the deal funding to take advantage of the current
interest rate environment, to lower the average cost of debt,
extend maturities and align leverage to industry averages. "Given
our strong cash flow and solid balance sheet, we are able to invest
heavily in our future, both organically and through strategic and
financially sound acquisitions, and still have excess capital to
return to shareholders in the form of share repurchases and
dividends," remarked Gentile.
Spirit also announced plans to execute a $725 million ASR against the remaining
$925 million share repurchase
authorization. "This ASR will encompass all of the planned share
repurchases for this year plus an incremental amount to take
advantage of our undervalued shares and demonstrate the confidence
we have in our operational outlook," said Gentile. In addition, the
Board of Directors authorized a 20% increase in the quarterly cash
dividend.
"The acquisition of Asco, the refinancing of our debt, the
accelerated share repurchase program of $725
million and the increase in cash dividend reinforces the
confidence we have in our long-term growth and cash flow
generation," Gentile said.
Financial Outlook
"We incurred substantially higher costs in the first quarter
related to supplier disruption, overtime, expedited freight and
surge resources, some of which will carry over into the second
quarter, as we continue to recover to schedule. We are maintaining
guidance as these operational challenges are largely offset by the
ASR," Gentile commented.
|
|
Table 2.
Financial Outlook Reaffirmed May 2, 2018
|
2018
Guidance
|
|
|
Revenues
|
$7.1 - $7.2
billion
|
|
|
Earnings Per Share
(Fully Diluted)
|
$6.25 -
$6.50
|
|
|
Effective Tax
Rate
|
21% -
22%
|
|
|
Cash from
Operations
|
$850 - $950
million
|
|
|
Free Cash
Flow*
|
$550 - $600
million
|
|
|
Risks applicable to our financial guidance are described more
fully in the Cautionary Statement Regarding Forward-Looking
Statements in this release.
Revenue
Spirit's first quarter 2018 revenue was $1.7 billion, up two percent from the same period
of 2017. This increase was primarily driven by higher revenue
recognized on the Boeing 737 program resulting from the adoption of
ASC 606 in addition to increased recurring and non-recurring
activity, higher production deliveries on the Airbus A320 program
and increased defense-related activity, partially offset by lower
production deliveries on the Boeing 777 program and lower revenue
recognized on the Boeing 787 program as a result of the adoption of
ASC 606. (Table 1)
Spirit's backlog at the end of the first quarter of 2018 was
approximately $47 billion, with work
packages on all commercial platforms in the Boeing and Airbus
backlog.
Earnings
Operating income for the first quarter of 2018 was $160 million, down 22 percent compared to
$204 million in the same period of
2017. This decrease was primarily due to lower margin recognized on
the Boeing 737 program, lower production deliveries on the Boeing
777 program and net forward losses recognized on the Boeing 787
program, partially offset by higher non-recurring activity on the
Boeing 737 program. First quarter EPS was $1.10, down compared to $1.17 in the same period of 2017. (Table 1)
Cash
Cash from operations in the first quarter of 2018 was
$167 million, up compared to
$112 million in the same quarter last
year, primarily due to lower advance repayments and timing in
working capital. Free cash flow* in the first quarter of 2018 was
$118 million, up compared to free
cash flow* of $71 million in the same
quarter last year. (Table 3)
Cash balance at the end of the quarter was $438 million. The company's $650 million revolving credit facility remained
undrawn at the end of the quarter. During the first quarter,
Spirit repurchased 0.9 million shares for $75 million.
Table 3.
Cash Flow and Liquidity (unaudited)
|
|
|
|
1st
Quarter
|
|
($ in
millions)
|
2018
|
2017
|
Change
|
|
|
|
|
Cash from
Operations
|
$167
|
$112
|
49%
|
Purchases of
Property, Plant & Equipment
|
($48)
|
($41)
|
19%
|
Free Cash
Flow*
|
$118
|
$71
|
66%
|
|
|
|
|
|
March
29,
|
December
31,
|
|
Liquidity
|
2018
|
2017
|
|
Cash
|
$438
|
$423
|
|
Total
Debt
|
$1,144
|
$1,151
|
|
|
|
|
|
Segment Results
Fuselage Systems
Fuselage Systems segment revenue in the first quarter of 2018
increased by 5.0 percent from the same period last year to
$962.7 million. This increase was
primarily due to higher revenue recognized on the Boeing 737
program as a result of the adoption of ASC 606, higher production
deliveries on the Airbus A350 program as well as increased defense
work and non-recurring activity on certain Boeing programs,
partially offset by lower production deliveries on the Boeing 777
program and lower revenue recognized on the Boeing 787 program as a
result of the adoption of ASC 606. Operating margin for the first
quarter of 2018 decreased to 12.4 percent, compared to 15.9 percent
during the same period of 2017, primarily due to lower margins
recognized on the Boeing 737 and 777 programs in addition to net
forward loss charges recognized on the Boeing 787 program related
to the pension accounting change. In the first quarter of 2018, the
segment recorded pretax $(4.9)
million of unfavorable cumulative catch-up adjustments and
net forward losses of $(11.6)
million.
Propulsion Systems
Propulsion Systems segment revenue in the first quarter of 2018
decreased 2.9 percent from the same period last year to
$394.5 million, primarily driven by
lower production deliveries on the Boeing 777 program and lower
revenue recognized on the Boeing 787 program as a result of the
adoption of ASC 606, partially offset by higher propulsion
deliveries on the Boeing 737 program. Operating margin for the
first quarter of 2018 decreased to 13.4 percent, compared to 17.7
percent during the same period of 2017, primarily due to lower
margins recognized on the Boeing 737 and 777 programs. In the first
quarter of 2018, the segment recorded pretax $(0.6) million of unfavorable cumulative catch-up
adjustments and net forward losses of $(3.4)
million.
Wing Systems
Wing Systems segment revenue in the first quarter of 2018
increased by 2.2 percent from the same period last year to
$377.0 million. This increase was
primarily due to higher wing deliveries on the Boeing 737 and
Airbus A320 programs, partially offset by lower production
deliveries on the Boeing 777 program and lower revenue recognized
on the Boeing 787 program as a result of the adoption of ASC 606.
Operating margin for the first quarter of 2018 decreased to 13.5
percent, compared to 15.4 percent during the same period of 2017
primarily driven by favorable changes in estimates recorded during
the first quarter of 2017. In the first quarter of 2018, the
segment recorded pretax $1.4 million
of favorable cumulative catch-up adjustments and net forward losses
of $(3.5) million.
Table 4.
Segment Reporting (unaudited)
|
|
|
1st
Quarter
|
($ in
millions)
|
2018
|
2017
(1)
|
Change
|
|
|
|
|
Segment
Revenues
|
|
|
|
Fuselage
Systems
|
$962.7
|
$916.9
|
5.0%
|
Propulsion Systems
|
394.5
|
406.3
|
(2.9%)
|
Wing
Systems
|
377.0
|
369.0
|
2.2%
|
All
Other
|
1.9
|
1.9
|
-
|
Total Segment
Revenues
|
$1,736.1
|
$1,694.1
|
2.5%
|
|
|
|
|
Segment Earnings
from Operations
|
|
|
|
Fuselage
Systems
|
$119.7
|
$145.9
|
(18.0%)
|
Propulsion Systems
|
52.9
|
71.8
|
(26.3%)
|
Wing
Systems
|
50.8
|
56.7
|
(10.4%)
|
All
Other
|
(1.0)
|
(0.1)
|
**
|
Total Segment
Operating Earnings
|
$222.4
|
$274.3
|
(18.9%)
|
|
|
|
|
Unallocated
Expense
|
|
|
|
SG&A
|
($56.2)
|
($52.9)
|
(6.2%)
|
Impact of Severe
Weather Event
|
-
|
(10.8)
|
**
|
Research &
Development
|
(9.4)
|
(5.0)
|
(88.0%)
|
Cost of
Sales
|
2.7
|
(1.2)
|
**
|
Total Earnings
from Operations
|
$159.5
|
$204.4
|
(22.0%)
|
|
|
|
|
Segment Operating
Earnings as % of Revenues
|
|
|
|
Fuselage
Systems
|
12.4%
|
15.9%
|
(350)
BPS
|
Propulsion Systems
|
13.4%
|
17.7%
|
(430)
BPS
|
Wing
Systems
|
13.5%
|
15.4%
|
(190)
BPS
|
All
Other
|
**
|
**
|
|
Total Segment
Operating Earnings as % of Revenues
|
12.8%
|
16.2%
|
(340)
BPS
|
|
|
|
|
Total Operating
Earnings as % of Revenues
|
9.2%
|
12.1%
|
(290)
BPS
|
|
|
|
|
** Represents an amount
equal to or in excess of 100% or not meaningful.
|
|
(1) Adjusted for ASU
2017-07 (Pension) as follows:
|
|
Fuselage
Systems
|
$
(4.5)
|
|
|
Propulsion
Systems
|
(1.9)
|
|
|
Wing
Systems
|
(1.8)
|
|
|
All
Other
|
-
|
|
|
Total Segment
Impact
|
$
(8.2)
|
|
|
|
|
|
|
SG&A
|
(1.0)
|
|
|
|
|
|
|
Total Operating
Earnings Impact
|
$
(9.2)
|
|
|
Cautionary Statement Regarding Forward-Looking
Statements
This press release contains "forward-looking statements" that
may involve many risks and uncertainties. Forward-looking
statements reflect our current expectations or forecasts of future
events. 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) our ability to continue to grow our business
and execute our growth strategy, including the timing, execution,
and profitability of new and maturing programs; 2) our ability to
perform our obligations under our new and maturing commercial,
business aircraft, and military development programs, and the
related recurring production; 3) our ability to accurately estimate
and manage performance, cost, and revenue under our contracts,
including our ability to achieve certain cost reductions with
respect to the B787 program; 4) margin pressures and the potential
for additional forward losses on new and maturing programs; 5) our
ability to accommodate, and the cost of accommodating, announced
increases in the build rates of certain aircraft; 6) the effect on
aircraft demand and build rates of changing customer preferences
for business aircraft, including the effect of global economic
conditions on the business aircraft market and expanding conflicts
or political unrest in the Middle
East or Asia; 7) customer
cancellations or deferrals as a result of global economic
uncertainty or otherwise; 8) the effect of economic conditions in
the industries and markets in which we operate in the U.S. and
globally and any changes therein, including fluctuations in foreign
currency exchange rates; 9) the success and timely execution of key
milestones such as the receipt of necessary regulatory approvals,
including our ability to obtain in a timely fashion any required
regulatory or other third party approvals for the consummation of
our announced acquisition of Asco, and customer adherence to their
announced schedules; 10) our ability to successfully negotiate, or
re-negotiate, future pricing under our supply agreements with
Boeing and our other customers; 11) our ability to enter into
profitable supply arrangements with additional customers; 12) the
ability of all parties to satisfy their performance requirements
under existing supply contracts with our two major customers,
Boeing and Airbus, and other customers, and the risk of nonpayment
by such customers; 13) any adverse impact on Boeing's and Airbus'
production of aircraft resulting from cancellations, deferrals, or
reduced orders by their customers or from labor disputes, domestic
or international hostilities, or acts of terrorism; 14) any adverse
impact on the demand for air travel or our operations from the
outbreak of diseases or epidemic or pandemic outbreaks; 15) our
ability to avoid or recover from cyber-based or other security
attacks, information technology failures, or other disruptions; 16)
returns on pension plan assets and the impact of future discount
rate changes on pension obligations; 17) our ability to borrow
additional funds or refinance debt, including our ability to obtain
the debt to finance the purchase price for our announced
acquisition of Asco on favorable terms or at all; 18) competition
from commercial aerospace original equipment manufacturers and
other aerostructures suppliers; 19) the effect of governmental
laws, such as U.S. export control laws and U.S. and foreign
anti-bribery laws such as the Foreign Corrupt Practices Act and the
United Kingdom Bribery Act, and environmental laws and agency
regulations, both in the U.S. and abroad; 20) the effect of changes
in tax law, such as the effect of The Tax Cuts and Jobs Act (the
"TCJA") that was enacted on December 22,
2017, and changes to the interpretations of or guidance
related thereto, and the Company's ability to accurately calculate
and estimate the effect of such changes; 21) any reduction in our
credit ratings; 22) our dependence on our suppliers, as well as the
cost and availability of raw materials and purchased components;
23) our ability to recruit and retain a critical mass of
highly-skilled employees and our relationships with the unions
representing many of our employees; 24) spending by the U.S. and
other governments on defense; 25) the possibility that our cash
flows and our credit facility may not be adequate for our
additional capital needs or for payment of interest on, and
principal of, our indebtedness; 26) our exposure under our
revolving credit facility to higher interest payments should
interest rates increase substantially; 27) the effectiveness of any
interest rate hedging programs; 28) the effectiveness of our
internal control over financial reporting; 29) the outcome or
impact of ongoing or future litigation, claims, and regulatory
actions; 30) exposure to potential product liability and warranty
claims; 31) our ability to effectively assess, manage and integrate
acquisitions that we pursue, including our ability to successfully
integrate the Asco business and generate synergies and other cost
savings; 32) our ability to consummate our announced acquisition of
Asco in a timely matter while avoiding any unexpected costs,
charges, expenses, adverse changes to business relationships and
other business disruptions for ourselves and Asco as a result of
the acquisition; 33) our ability to continue selling certain
receivables through our supplier financing program; 34) the risks
of doing business internationally, including fluctuations in
foreign current exchange rates, impositions of tariffs or
embargoes, compliance with foreign laws, and domestic and foreign
government policies; and 35) our ability to complete the proposed
accelerated stock repurchase plan, among other things. 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.
Additional information concerning these and other factors can be
found in our filings with the Securities and Exchange Commission,
including our most recent Annual Report on Form 10-K and Quarterly
Reports on Form 10-Q.
Spirit Shipset
Deliveries
|
(one shipset
equals one aircraft)
|
|
|
|
|
|
|
|
|
|
|
1st
Quarter
|
|
|
2018
|
2017
|
B737
|
|
128
|
126
|
B747
|
|
1
|
1
|
B767
|
|
8
|
6
|
B777
|
|
9
|
21
|
B787
|
|
37
|
32
|
Total
Boeing
|
|
183
|
186
|
|
|
|
|
A320
Family
|
|
162
|
154
|
A330/340
|
|
16
|
20
|
A350
|
|
28
|
24
|
A380
|
|
2
|
4
|
Total
Airbus
|
|
208
|
202
|
|
|
|
|
Business/Regional
Jets
|
|
20
|
22
|
|
|
|
|
Total
|
|
411
|
410
|
Spirit AeroSystems
Holdings, Inc.
|
Condensed
Consolidated Statements of Operations
|
(unaudited)
|
|
|
|
|
|
For the Three
Months Ended
|
|
|
March 29,
2018
|
|
March 30, 2017
(1)
|
|
|
($ in millions,
except per share data)
|
|
|
|
|
|
Revenue
|
$1,736.1
|
|
$1,694.1
|
Operating costs
and expenses:
|
|
|
|
Cost of
sales
|
1,511.0
|
|
1,421.0
|
Selling, general and
administrative
|
56.2
|
|
52.9
|
Impact of severe
weather event
|
-
|
|
10.8
|
Research and
development
|
9.4
|
|
5.0
|
|
Total operating
costs and expenses
|
1,576.6
|
|
1,489.7
|
|
Operating
income
|
159.5
|
|
204.4
|
Interest expense and
financing fee amortization
|
(11.3)
|
|
(9.5)
|
Other income,
net
|
4.1
|
|
10.7
|
|
Income before
income taxes and equity in net income of affiliate
|
152.3
|
|
205.6
|
Income tax
provision
|
(27.5)
|
|
(64.0)
|
|
Income before
equity in net income of affiliate
|
124.8
|
|
141.6
|
Equity in net income
of affiliate
|
0.6
|
|
0.1
|
|
Net
income
|
$125.4
|
|
$141.7
|
|
|
|
|
|
Earnings per
share
|
|
|
|
Basic
|
$1.11
|
|
$1.19
|
Shares
|
113.0
|
|
119.5
|
|
|
|
|
|
Diluted
|
$1.10
|
|
$1.17
|
Shares
|
114.1
|
|
120.7
|
|
|
.
|
|
|
Dividends declared
per common share
|
$0.10
|
|
$0.10
|
|
|
|
|
|
|
|
|
|
|
(1) Adjusted for ASU
2017-07 (Pension) as follows:
|
|
|
|
|
|
|
Cost of
sales
|
$
8.2
|
|
|
|
Selling, general and
administrative
|
$
1.0
|
|
|
|
Other income,
net
|
$
9.2
|
|
|
Spirit AeroSystems
Holdings, Inc.
|
Condensed
Consolidated Balance Sheets
|
(unaudited)
|
|
March 29,
2018
|
|
December 31,
2017
|
|
($ in
millions)
|
Assets
|
|
|
|
Cash and cash
equivalents
|
$437.9
|
|
$423.3
|
Restricted
cash
|
0.4
|
|
2.2
|
Accounts receivable,
net
|
672.1
|
|
722.2
|
Contract
assets
|
533.8
|
|
-
|
Inventory,
net
|
929.5
|
|
1,449.9
|
Other current
assets
|
30.0
|
|
53.5
|
Total current assets
|
2,603.7
|
|
2,651.1
|
Property, plant and
equipment, net
|
2,105.4
|
|
2,105.3
|
Contract assets,
long-term
|
55.6
|
|
-
|
Pension
assets
|
356.4
|
|
347.1
|
Other
assets
|
249.2
|
|
164.3
|
Total assets
|
$5,370.3
|
|
$5,267.8
|
Liabilities
|
|
|
|
Accounts
payable
|
$819.6
|
|
$693.1
|
Accrued
expenses
|
330.4
|
|
269.3
|
Profit
sharing
|
16.6
|
|
109.5
|
Current portion of
long-term debt
|
31.2
|
|
31.1
|
Advance payments,
short-term
|
103.3
|
|
100.0
|
Contract liabilities,
short-term
|
93.5
|
|
-
|
Forward loss
provision, short-term
|
165.7
|
|
-
|
Deferred revenue and
other deferred credits, short-term
|
7.4
|
|
64.6
|
Deferred grant income
liability - current
|
22.2
|
|
21.6
|
Other current
liabilities
|
112.0
|
|
331.8
|
Total current liabilities
|
1,701.9
|
|
1,621.0
|
Long-term
debt
|
1,112.6
|
|
1,119.9
|
Advance payments,
long-term
|
203.1
|
|
231.7
|
Pension/OPEB
obligation
|
40.0
|
|
40.8
|
Contract liabilities,
long-term
|
302.9
|
|
-
|
Forward loss
provision, long-term
|
151.3
|
|
-
|
Deferred revenue and
other deferred credits
|
31.7
|
|
161.0
|
Deferred grant income
liability - non-current
|
34.4
|
|
39.3
|
Other
liabilities
|
219.4
|
|
252.6
|
Stockholders'
Equity
|
|
|
|
Preferred stock, par
value $0.01, 10,000,000 shares authorized, no shares
issued
|
-
|
|
-
|
Common stock,
Class A par value $0.01, 200,000,000 shares authorized,
113,803,566 and 114,447,605 shares issued and outstanding,
respectively
|
1.1
|
|
1.1
|
Additional paid-in
capital
|
1,081.3
|
|
1,086.9
|
Accumulated other
comprehensive loss
|
(113.9)
|
|
(128.5)
|
Retained
earnings
|
2,260.0
|
|
2,422.4
|
Treasury stock, at
cost (32,333,822 and 31,467,709 shares, respectively)
|
(1,656.0)
|
|
(1,580.9)
|
Total Stockholders' Equity
|
1,572.5
|
|
1,801.0
|
Noncontrolling
interest
|
0.5
|
|
0.5
|
Total equity
|
1,573.0
|
|
1,801.5
|
Total liabilities and equity
|
$5,370.3
|
|
$5,267.8
|
Spirit AeroSystems
Holdings, Inc.
|
Condensed
Consolidated Statements of Cash Flows
|
(unaudited)
|
|
|
|
|
|
For the Three
Months Ended
|
|
March 29,
2018
|
|
March 30,
2017
|
|
($ in
millions)
|
Operating
activities
|
|
|
|
Net income
|
$125.4
|
|
$141.7
|
Adjustments to
reconcile net income to net cash provided by operating
activities
|
|
|
|
Depreciation
expense
|
56.8
|
|
52.5
|
Amortization of deferred
financing fees
|
0.8
|
|
0.8
|
Accretion of customer supply
agreement
|
1.2
|
|
2.9
|
Employee stock compensation
expense
|
7.1
|
|
8.0
|
Gain from interest rate
swaps
|
(1.7)
|
|
-
|
(Gain) loss from foreign
currency transactions
|
(1.6)
|
|
0.5
|
Gain on disposition of
assets
|
(0.2)
|
|
-
|
Deferred
taxes
|
(1.2)
|
|
24.5
|
Pension and other
post-retirement benefits, net
|
(8.7)
|
|
(8.7)
|
Grant liability
amortization
|
(5.1)
|
|
(4.1)
|
Equity in net income of
affiliate
|
(0.6)
|
|
(0.1)
|
Forward loss
provision
|
(36.9)
|
|
-
|
Changes in assets and
liabilities
|
|
|
|
Accounts receivable,
net
|
(96.6)
|
|
(158.1)
|
Inventory, net
|
45.3
|
|
46.1
|
Contract assets
|
(70.0)
|
|
-
|
Accounts payable and accrued
liabilities
|
177.8
|
|
113.2
|
Profit sharing/deferred
compensation
|
(93.1)
|
|
(80.5)
|
Advance payments
|
(25.3)
|
|
(52.5)
|
Income taxes
receivable/payable
|
25.9
|
|
39.4
|
Contract
liabilities
|
77.1
|
|
-
|
Deferred revenue and other
deferred credits
|
2.6
|
|
(6.3)
|
Other
|
(12.4)
|
|
(7.6)
|
Net
cash provided by operating activities
|
$166.6
|
|
$111.7
|
Investing
activities
|
|
|
|
Purchase of property, plant
and equipment
|
(48.2)
|
|
(40.6)
|
Other
|
0.2
|
|
-
|
Net
cash used in investing activities
|
($48.0)
|
|
($40.6)
|
Financing
activities
|
|
|
|
Principal payments of
debt
|
(1.7)
|
|
(0.8)
|
Payments on term
loan
|
(6.2)
|
|
-
|
Taxes paid related to net
share settlement awards
|
(12.7)
|
|
(4.1)
|
Debt issuance and financing
costs
|
-
|
|
(1.0)
|
Net proceeds from financing
under the New Markets Tax Credit Program
|
-
|
|
7.6
|
Purchase of treasury
stock
|
(73.8)
|
|
(81.5)
|
Dividends paid
|
(11.5)
|
|
(12.0)
|
Net
cash used in financing activities
|
($105.9)
|
|
($91.8)
|
Effect of exchange
rate changes on cash and cash equivalents
|
-
|
|
0.7
|
Net
increase (decrease) in cash, cash equivalents, and restricted
cash
|
$12.7
|
|
($20.0)
|
Cash, cash
equivalents, and restricted cash, beginning of the
period
|
445.5
|
|
717.6
|
Cash, cash
equivalents, and restricted cash, end of the period
|
$458.2
|
|
$697.6
|
|
|
|
|
Reconciliation of
Cash and Cash Equivalents and Restricted Cash:
|
March 29,
2018
|
|
March 30,
2017
|
Cash and cash
equivalents, beginning of the period
|
$423.3
|
|
$697.7
|
Restricted cash,
short-term, beginning of the period
|
2.2
|
|
-
|
Restricted cash,
long-term, beginning of the period
|
20.0
|
|
19.9
|
Cash, cash
equivalents, and restricted cash, beginning of the
period
|
$445.5
|
|
$717.6
|
|
|
|
|
Cash and cash
equivalents, end of the period
|
$437.9
|
|
$672.2
|
Restricted cash,
short-term, end of the period
|
0.4
|
|
5.5
|
Restricted cash,
long-term, end of the period
|
19.9
|
|
19.9
|
Cash, cash
equivalents, and restricted cash, end of the period
|
$458.2
|
|
$697.6
|
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 EBITDA multiple and free cash flow.
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 measure differently than we
do, limiting the usefulness of the measures for comparison with
other companies.
EBITDA is a non-GAAP measure defined as earnings before
interest, taxes, depreciation and amortization. The Company has
chosen to present an estimated post-synergy EBITDA multiple related
to the purchase price of Asco in order to provide investors with
additional useful information. The Company considers EBITDA to be
an important measure used to evaluate operating performance, and
the measure is frequently used by securities analysts, investors
and other interested parties in the evaluation of companies in the
industry, but this figure should not be considered in
isolation.
Free cash flow is defined as GAAP 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 shareholders, debt repayment,
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. Management uses free cash flow as a measure to assess
both business performance and overall liquidity.
The table below provides a reconciliation between the GAAP (Cash
from Operations) and non-GAAP (Free Cash Flow) measures.
Free Cash
Flow
|
($ in
millions)
|
|
|
|
|
|
|
1st
Quarter
|
|
Guidance
|
|
2018
|
2017
|
|
2018
|
|
|
|
|
|
Cash from
Operations
|
$167
|
$112
|
|
$850 -
$950
|
Capital
Expenditures
|
(48)
|
(41)
|
|
(300 -
350)
|
Free Cash
Flow
|
$118
|
$71
|
|
$550 -
$600
|
View original
content:http://www.prnewswire.com/news-releases/spirit-aerosystems-reports-q1-2018-financial-results-announces-acquisition-of-asco-industries-plans-debt-refinancing-announces-725-million-accelerated-share-repurchase-plan-increased-dividend-by-20-300640722.html
SOURCE Spirit AeroSystems Holdings, Inc.