Spirit AeroSystems Holdings, Inc. First Quarter 2008 Performance - - PowerPoint PPT Presentation
Spirit AeroSystems Holdings, Inc. First Quarter 2008 Performance - - PowerPoint PPT Presentation
Spirit AeroSystems Holdings, Inc. First Quarter 2008 Performance Review Jeff Turner President and Chief Executive Officer Rick Schmidt Chief Financial Officer April 29, 2008 First Quarter 2008 Summary Solid first quarter results
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First Quarter 2008 Summary
- Solid first quarter results… Delivered 259 product shipsets
- Increased revenues by 9 percent… Expanded operating profitability and net
income
- Slowing 787 production… Improved operating efficiencies offsetting
absorption impact
- Selected for major structures work on new Cessna Citation Columbus
business jet
- Announced two major new contract awards on Gulfstream G650 business
jet (Integrated Wing, Rolls-Royce BR725 Nacelle package)
- New Aftermarket Initiatives
– Awarded services contract with Cathay Pacific Airways – Announced joint venture with HAECO to provide MRO services to Asia-Pacific region
- Backlog increased to $27.5B
Executing Business Plan
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P-8A Poseidon Roll-Out Ceremony
Fuselage Systems
- Solid operating performance
– Delivered 121 shipsets in first quarter
- Sequential margin improvement
due to lower R&D and absence
- f unfavorable cumulative
catch-up adjustment
- Delivered first P-8A Poseidon
unit
- Won Cessna Citation Columbus
business jet fuselage business
- Delivered first 777 Freighter
sections Delivering on Commitments… Growing the Business
Segment Revenues & Operating Margins
492 462 434 450 445 18.1% 16.1% 18.0% 18.3% 18.6% $0 $175 $350 $525 $700 2007Q1 2007Q2 2007Q3 2007Q4 2008Q1 Revenue (millions) 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% Margin Cessna Citation Columbus
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Propulsion Systems
- Solid operating performance
- Secured Rolls-Royce BR725
contract
- Awarded Cathay Pacific
Airways’ 777 Trent 800 Thrust Reverser repair contract
- Delivered first 747-8 Pylon
- Shipped first P-8A Strut and
Thrust Reverser
- Completed and approved 787
engine pylon static certification document Delivering Solid Profitability… Growing the Business
Segment Revenues & Operating Margins
275 260 259 279 265 16.2% 15.5% 17.0% 16.5% 16.6% $0 $100 $200 $300 $400 $500 2007Q1 2007Q2 2007Q3 2007Q4 2008Q1 Revenue (millions) 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% Margin First 747-8 Pylon First Rolls-Royce 787 Pylon
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Wing Systems
- Improved operating margins…
Sequential decline due to smaller favorable cumulative catch-up adjustment
- Announced contract for design
and production of Gulfstream G650 business jet wing
- European MRO Service Center
scheduled to open mid-2008
- Broke ground on Spirit Malaysia
Facility… Expected opening early 2009 Improving Profitability… Growing the Business
Segment Revenues & Operating Margins
262 241 245 252 247 12.4% 9.6% 11.6% 9.3% 14.6% $0 $100 $200 $300 $400 $500 $600 2007Q1 2007Q2 2007Q3 2007Q4 2008Q1 Revenue (millions) 0.0% 5.0% 10.0% 15.0% 20.0% Margin Spirit Malaysia Facility Gulfstream G650
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787 Update
- Firm order backlog of 892
units announced by Boeing
- Revised payment terms…
Eliminated linkage to aircraft certification
- Adjusting to slower
production and delivery plan
- Redeploying resources
- Reducing near-term capital
investments
- Delivered Line Unit 3 Forward
Fuselage to Boeing
Line Unit 3 - Systems Installation
Customer-Focused Execution Plan
April 29, 2008
Spirit AeroSystems Holdings, Inc. First Quarter 2008 Financial Results
Rick Schmidt
Chief Financial Officer
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- Strong revenue growth
– Q1 Revenues $1.036 billion, up 9% from Q1 2007
- Improving operating profitability company-wide
– Q1 Operating Margins 12.6% – Operating Income up 25% from Q1 2007
- Q1 fully diluted earnings per share of $0.61
- Operating cash flow in Q1 of $70 million
– Revised 787 payment terms
- Increased liquidity… Solid balance sheet
- $203M cash balance
– Net Debt to Total Capital ratio 25.5%, down from 26.7% at 2007 year-end
First Quarter 2008 Financial Summary
Strong Start to 2008
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10.9% 10.6% 11.0% 10.9% 12.6%
0% 5% 10% 15% 2007Q1 2007Q2 2007Q3 2007Q4 2008Q1
$0.50 $0.49 $0.60 $0.54 $0.61
$0.00 $0.20 $0.40 $0.60 2007Q1 2007Q2 2007Q3 2007Q4 2008Q1
First Quarter 2008 Financial Results
Revenues (Millions) Operating Income % of Revenues Earnings Per Share (Fully diluted)
Includes $0.09 contribution from lower tax rate
Consistently Delivering Strong Results
$954 $959 $968 $980 $1,036
$0 $300 $600 $900 $1,200 2007Q1 2007Q2 2007Q3 2007Q4 2008Q1
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$39 $50 $43 $54 $45 $0 $10 $20 $30 $40 $50 $60 $70 $80 2007Q1 2007Q2 2007Q3 2007Q4 2008Q1
First Quarter 2008 Financial Results
SG&A (Millions) Research & Development Expense (Millions)
Right-Sized R&D Investments… Disciplined Expense Management
Includes $9.6M secondary
- ffering expense
Includes $5M acquisition evaluation related expense
$10 $15 $13 $14 $10
$0 $10 $20 $30 $40 $50
2007Q1 2007Q2 2007Q3 2007Q4 2008Q1 1.0% 1.4% 1.4% 1.5% 0.9% % of Sales 4.7% 5.7% 4.4% 5.1% 3.8% % of Sales
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First Quarter 2008 Income Statement
Strong Operating Performance
1Q08 1Q07 % Change
(Dollars in Millions, Except Per Share Data)
Net Revenues 1,036 $ 954 $ 9% Cost of sales 857 795 8% Selling, general and administrative 39 45 (13%) Research and development 10 10 (6%) Operating Income 130 104 25% Operating Income % of Revenues 12.6% 10.9% 170 BPS Net Income 85 $ 70 $ 22% Fully Diluted Weighted Avg Shares 139.6 139.0 < 1% EPS (Fully diluted) 0.61 $ 0.50 $ 22% SPIRIT AEROSYSTEMS HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME/(LOSS) (Unaudited)
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Q1 Liquidity Enhancements
Increased revolver by $250M from $400M to $650M Interest rates and maturity unchanged Modest fees amortized over remaining life Revolver Amendment Renegotiated payment terms for 787 deliveries resulting in additional advance payments Eliminated link to 787 certification $124M received in Q1 2008 2008 payments accelerated from 2009 and early 2010 787 Payments Funds remaining 787 working capital build Stabilizes 2008 cash flow Financing for new programs Rating Agency recognition Enhanced Liquidity for Spirit
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Cash and Debt Balances
Millions Millions
Credit Ratings S&P: BB Moody’s: Ba3
Solid Balance Sheet and Liquidity
Cash
$105 $133 $203 $157 $127 $0 $50 $100 $150 $200 $250 $300 3/29/07 6/28/07 9/27/07 12/31/07 3/27/08
Total Debt
$615 $609 $605 $595 $667 $0 $200 $400 $600 $800 3/29/07 6/28/07 9/27/07 12/31/07 3/27/08
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Cash Flow
- Revised 787 payment terms
increased Q1 customer advances
- Working capital increase
largely related to 787
- Capital expenditures slowed
Positive Operating Cash Flow… Declining Capital Expenditures
$ Millions 2008 Q1 2007 Q1 Net Earnings 85 $ 70 $ Depreciation & Amortization 30 $ 23 $ Other Non-Cash Items (9) $ 1 $ Working Capital/Accrued Liabilities (163) $ (128) $ Customer Advances 89 $ 29 $ Other 38 $ 55 $ Operating Cash Flow 70 $ 50 $ Capital Expenditures (66) $ (88) $
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2008 Financial Guidance
* Effective tax rate guidance among other factors, assumes the benefit of an extension to the U.S. research tax credit
Guidance Reduced Due to 787 Schedule Changes
2008 Guidance Revenues ~ $4.4B Earnings Per Share (Fully Diluted) $2.25 - $2.35 Effective Tax Rate ~33% * Cash Flow From Operations ~ $400M Capital Expenditures ~ $275M Capital Reimbursement ~ $116M
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Long-Term Value Creation
Closing Comments
Executing our strategy… Delivering on commitments to our customers Growing the business profitably Continuous focus on productivity Expanding our customer base Investing in next generation technologies Building financial strength
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Forward-Looking Information
Cautionary Statement Regarding Forward-Looking Statements:
This presentation includes forward-looking statements that reflect the plans and expectations of Spirit AeroSystems Holdings, Inc. To the extent that statements in this presentation do not relate to historical or current facts, they may constitute forward-looking statements. Forward-looking statements can generally be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “intend”, “estimate”, “plan”, “forecast”, “anticipate”, “believe”, “project”, “continue”,
- r other similar words. These statements reflect Spirit AeroSystems Holdings, Inc.’s current view with
respect to future events and are subject to risks and uncertainties, both known and unknown. Such risks and uncertainties may cause the actual results of Spirit AeroSystems Holdings, Inc. to vary materially from those anticipated in forward-looking statements, and therefore we caution investors not to place undue reliance on them. Potential risks and uncertainties include, but are not limited to:
- ur customers’ aircraft build rates; the ability to enter into supply arrangements with additional
customers and satisfy performance requirements under existing contracts; any adverse impact on our customers’ production of aircraft; the success and timely progression of our customers’ new programs including, but not limited to The Boeing Company’s 787 aircraft program; future levels of business in the aerospace and commercial transport industries; competition from original equipment manufacturers and other aerostructures suppliers; the effect of governmental laws; the effect of new commercial and business aircraft development programs; the cost and availability of raw materials; the ability to recruit and retain highly skilled employees and relationships with unions; spending by the United States and other governments on defense; our continuing ability to operate successfully as a stand-alone company; the outcome of ongoing or future litigation and regulatory actions; and our exposure to potential product liability claims. Additional information as to factors that may cause actual results to differ materially from our forward-looking statements can be found in Spirit AeroSystems Holdings, Inc.’s filings with the United States Securities and Exchange Commission. Spirit AeroSystems Holdings, Inc. undertakes no obligation and does not intend to update publicly any forward-looking statements after the date of this presentation, except as required by law.