B/E Aerospace Reports Financial Results for Third Quarter.Business Editors WELLINGTON Wellington, city (1996 pop. 157,647; urban agglomeration 334,051), capital of New Zealand, extreme S North Island, on Port Nicholson, an inlet of Cook Strait. , Fla.--(BUSINESS WIRE)--Dec. 17, 2002 B/E B/E abbr. 1. bill of entry 2. bill of exchange Aerospace, Inc. (Nasdaq:BEAV BEAV Binary Editor and Viewer ) today announced financial results for its third fiscal quarter ending November November: see month. 23, 2002. HIGHLIGHTS -- sales of approximately $575-$600 million, assuming no significant deterioration in current revenue trends, -- approximately break-even bottom-line results, excluding approximately $8 million of transition costs associated with closure of the fifth facility in the first half of 2003, -- net losses in the first and second quarters, reflecting the transition costs mentioned above, -- improving bottom-line performance in the third and fourth quarters, and -- EBITDA of about $100 million excluding transition costs. "Sales for the third quarter met the reduced revenue expectations we communicated in October October: see month. ," said Mr. Robert Robert, Henry Martyn 1837-1923. American army engineer and parliamentary authority. He designed the defenses for Washington, D.C., during the Civil War and later wrote Robert's Rules of Order (1876). Noun 1. J. Khoury Khoury (occasionally Khouri or Coury; Arabic: خوري) is an Arabic surname that is unique to Arab Christians. The term Khoury means "priest" in Arabic. , President and Chief Executive Officer of B/E Aerospace. "But demand for our cabin interior products remains severely depressed Depressed A description of a market, security, or product that is experiencing weak demand and lowering prices. Notes: A depressed market, security, or product implies that prices and volume are low. There are many reasons for a depressed market, security, or product. by the well-known well-known adj. 1. Widely known; familiar or famous: a well-known performer. 2. Fully known: well-known facts. problems in the airline industry, and as reported in October, the downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. has spread to the business jet sector. "We have worked very hard over the past year to align align (  līn),v to move the teeth into their proper positions to conform to the line of occlusion. our cost structure with the reduced level of demand for our products," he stated. "Much progress has been made, as demonstrated by the profit margin improvements we report today. We expect to complete our cost reduction efforts by mid- mid- pref. Middle: midbrain. 2003, by which time we will have taken about a year and a half to achieve our goal of closing five facilities and eliminating about 1,400 positions. The total projected cost of the consolidation effort is nearly $150 million, of which about $59 million is cash. "With severe financial distress Financial distress Events preceding and including bankruptcy, such as violation of loan contracts. in the airline industry and political turmoil in the Middle East, the outlook is uncertain," he continued. "At this point, it appears that we can reduce costs sufficiently to deliver break-even bottom-line bot·tom-line adj. 1. Concerned exclusively with costs and profits: bottom-line issues. 2. Ruthlessly realistic; pragmatic: a bottom-line political strategy. results on depressed revenues of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $575-$600 million for calendar 2003. This outlook assumes no further deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. in revenue trends. Breakeven breakeven 1. The level of output or sales necessary to cover fixed expenses. Companies in industries that have high fixed costs and, consequently, high breakevens, such as automobile and steel manufacturing, are likely to exhibit large fluctuations financial performance would permit the company to generate EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become (earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
"We are operating in unusually turbulent industry conditions," Mr. Khoury stated. "Under these circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or , there is more than the usual amount of uncertainty associated with the financial outlook we are communicating to investors today." THIRD QUARTER RESULTS For the third fiscal quarter ended November 23, 2002, B/E reported a net loss of ($22.4) million, or ($0.64) per share (diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. ). By comparison, the company had a net loss of ($106.2) million, or ($3.08) per share for the third quarter of the prior year. The net loss reported today includes $17.8 million of charges and other costs associated with B/E's facility and workforce consolidation program. Excluding the consolidation costs, B/E reported a net loss of ($3.6) million, or ($0.10) per share, for the quarter just ended. Results for the third quarter a year ago included $99.9 million of facility and personnel consolidation costs. Excluding those costs and acquisition-related expenses of $6.8 million, B/E reported net earnings of $0.5 million, or $0.01 per share for the third quarter a year ago. "Substantially lower sales, greater interest expense and higher foreign income taxes were the principal reasons for the year-over-year decrease in our third quarter earnings," said Mr. Khoury, comparing the "as adjusted" loss of ($0.10) per share for the quarter just ended to the "as adjusted" earnings of $0.01 for the same period a year ago. Reconciliations of "as adjusted" amounts to amounts reported on a GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). basis are presented at the end of this news release. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight were $145.5 million for the quarter just ended, down 16 percent compared to the same period a year ago. Net sales were down 29 percent compared to pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma figures for the same period two years ago, underscoring the effect of the current industry downturn on B/E's business. Pro forma figures treat companies acquired last year as though acquired at the beginning of the third quarter two years ago, improving comparability with the period just ended. PROFIT MARGINS EXPANDED YEAR-OVER-YEAR "Despite substantially lower sales, we expanded margins on a year-over-year basis, illustrating the success of our cost reduction efforts," Mr. Khoury said. To enhance comparability, the company is furnishing the following figures, which compare "as adjusted" figures for the quarter just ended and "as adjusted" figures for the third quarter a year ago, excluding the aforementioned a·fore·men·tioned adj. Mentioned previously. n. The one or ones mentioned previously. aforementioned Adjective mentioned before Adj. 1. consolidation costs from both periods, and the acquisition-related expenses from the third quarter a year ago: -- Gross profit margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. improved to 37.7 percent, up from 35.9 percent a year ago. -- Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. decreased by $5.6 million, with $4.1 million of the decrease due to lower amortization resulting from new accounting rules. Despite favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. year-over-year margin comparisons, the adjusted net loss of ($0.10) per share did not meet management's expectations for the third quarter. A lower-margin mix of products sold, together with higher foreign income taxes, contributed to the shortfall Shortfall The amount by which the capital required to fulfill a financial obligation exceeds available capital. Notes: Shortfall risk is often combated with an efficient hedging strategy created by a fund, group, institution, or individual. . WORKFORCE AND FACILITY CONSOLIDATION UPDATE In October 2001, B/E announced a series of actions designed to position the company for profitability at lower demand levels. The original cost reduction program called for closing five facilities and reducing headcount head count or head·count n. 1. The act of counting people in a particular group. 2. The number of people counted in this way. Noun 1. by 1,000 positions. Management later expanded the program to encompass 1,400 positions. The downsizing (1) Converting mainframe and mini-based systems to client/server LANs. (2) To reduce equipment and associated costs by switching to a less-expensive system. (jargon) downsizing program has required B/E to record $112 million in charges and $28 million in transition costs since the third quarter of last year. Future transition costs are estimated at about $8 million. The total estimated cost of the consolidation effort is nearly $150 million, of which approximately $59 million is cash. Achievements to date include closing four manufacturing facilities. The fifth plant closure is scheduled for the first half of calendar 2003. Headcount has been reduced by about 1,000 positions. During the quarter just ended, the company recorded the following consolidation costs: -- a $6.0 million charge related to the expansion of the cost reduction program, as announced in October 2002, -- a $7.0 million non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. for obsolete inventory Obsolete Inventory Term that refers to inventory that is at the end of its product life cycle and has not seen any sales or usage for a set period of time usually determined by the industry. This type of inventory has to be written down and can cause large losses for a company. , reflecting the increased number of parked aircraft which will likely not return to service, and -- $4.8 million of transition costs related to facility consolidations. Transition costs are the expenses of operating facilities scheduled for closure and integrating transferred operations into the remaining facilities. Under generally accepted accounting principles, such costs must be treated as normal expenses until plant shutdown shut·down n. A cessation of operations or activity, as at a factory. shutdown Noun the closing of a factory, shop, or other business Verb shut down has been completed. "This consolidation effort amounts to a major reconfiguration of our operations and cost structure," Mr. Khoury stated. "Our workforce consolidations, when complete, will eliminate nearly one out of every three positions in B/E's workforce prior to the September September: see month. 11, 2001 terrorist attacks. Because this downsizing has been so significant in size, the implementation cost has been substantial. "Our consolidation program has been painful for employees and their families," Mr. Khoury said. "Unfortunately, it was necessary to offset the adverse impact of the industry downturn." YEAR-TO-DATE Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. RESULTS For the nine months ended November 23, 2002, B/E reported a net loss of ($30.1) million, or ($0.86) per share (diluted). By comparison, the company had a net loss of ($98.9) million, or ($3.08) per share for the same period last year. For the nine months just ended, B/E recorded consolidation costs totaling $35.3 million. For the same period last year, consolidation costs, acquisition-related expenses and debt extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. costs totaled $116 million. Excluding all the aforementioned items in both periods, B/E earned $5.2 million, or $0.15 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. for the nine months just ended, compared to net earnings of $17.1 million, or $0.53 per share, for the nine-month period a year ago. The decrease in earnings per share was largely due to lower sales and increased interest expense, partly offset by an improved gross profit margin. To enhance comparability, the company is furnishing the following comparison of "as adjusted" figures for the nine months just ended, which exclude the aforementioned consolidation costs, compared to "pro forma" figures for the same period a year ago. The pro forma figures for the nine-month period a year ago treat companies acquired last year as though acquired at the beginning of last year, improving comparability with the period just ended, and also exclude the aforementioned consolidation costs, acquisition-related expenses and debt extinguishment costs. Comparing the "as adjusted" and pro forma amounts: -- Net sales were down $135.0 million, or 23 percent, compared to the nine-month period a year ago. -- Operating expenses decreased by $28.7 million, reflecting cost reduction efforts and a $15.0 million decrease in amortization expense due to new accounting rules. RESULTS BY SEGMENT; BACKLOG Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. Third quarter sales in B/E's largest segment, commercial aircraft products, dropped by 20 percent compared to the same period a year ago. Sales in all segments decreased sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen compared to the immediately preceding quarter.
Net Sales, Quarters Ended:
$ millions: NOV. 23, AUG 24, NOV. 24,
2002 2002 2001
-------------------------------------------------------------
Commercial aircraft products $102.0 $110.5 $128.2
Business jet products 20.6 21.1 21.5
Fastener distribution 22.9 23.2 23.1(1)
-------------------------------------------------------------
TOTAL $145.5 $154.8 $172.8
(1) B/E acquired fastener distribution business in mid-September 2001
Backlog decreased during the third quarter. The decrease reflects depressed demand from airlines and business jet customers. Difficult operating conditions in both sectors have caused several customers to cancel (character) Cancel - (CAN, Control-X) ASCII character 24. or defer de·fer 1 v. de·ferred, de·fer·ring, de·fers v.tr. 1. To put off; postpone. 2. To postpone the induction of (one eligible for the military draft). v.intr. orders. B/E's backlog stood at about $460 as of the end of November, down from approximately $500 million at the end of August 2002 and $520 million at the end of November 2001. OUTLOOK: NEXT YEAR "We are managing through unprecedented industry conditions," Mr. Khoury said. "The U.S. airline industry lost $7 billion last year, and is likely to lose a similar amount this year. The double-barreled Double-barreled Describes backing of the principal and interest of a smaller municipal revenue bond by a larger municipal entity. impact of weak air travel and low ticket prices continues to ravage domestic carriers' financial condition. To cut costs, airlines worldwide have reduced their fleet sizes, idling nearly 2,200 aircraft. With conditions like these, this industry downturn shows no signs of improving any time soon. "Under these circumstances, there is more than the usual amount of uncertainty associated with any forecast of financial performance, including the outlook we are communicating to investors today," said Mr. Khoury. For next year, calendar 2003, management expects: -- sales of approximately $575-$600 million, assuming no significant deterioration in current revenue trends, -- approximately break-even bottom-line results, excluding approximately $8 million of transition costs associated with closure of the fifth facility in the first half of 2003, -- net losses in the first and second quarters, reflecting the transition costs mentioned above, -- improving bottom-line performance in the third and fourth quarters, and -- EBITDA of about $100 million excluding transition costs. "We believe we have the cash flow and financial flexibility to manage through these demanding conditions," Mr. Khoury said. "With over $130 million of cash on hand, liquidity is more than adequate to meet operating needs and service our debt obligations. Our bank credit facility requires no principal payments until 2006. Our publicly traded notes require no principal payments until 2008-2011. The non-amortizing nature of this debt gives us substantial financial flexibility. "We are not dependent solely on U.S. airlines," he continued. "Our market presence is truly global. Over 40 percent of last year's sales came from outside the U.S. Our competitive position is very strong, with dominant worldwide market shares in many product lines. "Our distinctive business model should enable us to ride out this downturn and prosper when conditions improve," Mr. Khoury stated. "More than 60 percent of our sales come from the aftermarket Aftermarket See: Secondary market. aftermarket See secondary market. , which we expect to rebound rebound (rē´bownd), n/v 1. a recovery from illness. n 2. an outbreak of fresh reflex activity after withdrawal of a stimulus rebound adjective well before new aircraft deliveries. The cost reductions we are now realizing will provide substantial operating leverage Operating Leverage A measurement of the degree to which a firm or project relies on fixed rather than variable costs. Notes: The higher the degree of operating leverage, the greater the potential danger from forecasting risk. and enhanced earnings power when demand stabilizes. In the meantime Adv. 1. in the meantime - during the intervening time; "meanwhile I will not think about the problem"; "meantime he was attentive to his other interests"; "in the meantime the police were notified" meantime, meanwhile , we have a seasoned executive team which has managed through prior downturns." BANK CREDIT UPDATE; CHANGE IN FISCAL YEAR "We are currently in compliance with the financial covenants of our bank credit agreement," Mr. Khoury said. "However, it will be necessary to begin the process of amending those covenants, which are scheduled to ramp up Ramp Up To increase a company's operations in anticipation of increased demand. Notes: A company might 'ramp up' operations if they just signed a contract creating substantially more demand for their product. See also: Demand, Economies of Scale in the first quarter of next year. We hope to complete this effort in the near term." As previously announced, B/E plans to change its fiscal year to a calendar year, effective December December: see month. 31, 2002. Results for periods ended December 31, 2002 are scheduled for release in early calendar 2003. Thereafter, B/E will begin reporting on a calendar year basis. The company will post condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. financial data for calendar years 2001 and 2002 on its website in the near future. As previously announced, B/E will hold a conference call to discuss its financial results on Tuesday Tuesday: see week. , December 17 at 9:00 a.m. Eastern time. To listen to the conference call live via the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the , visit the Investors section of B/E's website at http://www.beaerospace.com and follow the Webcasts link. This news release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements involve risks and uncertainties. B/E's actual experience may differ materially from that anticipated in such statements. Factors that might cause such a difference include those discussed in B/E's filings with the Securities and Exchange Commission, including but not limited to its most recent proxy statement Proxy Statement A document containing the information that a company is required by the SEC to provide to shareholders so they can make informed decisions about matters that will be brought up at an annual stockholder meeting. , Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and Form 10-Q Form 10-Q See 10-Q. . For more information, see the section entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: "Forward-Looking Statements" contained in B/E's Form 10-K and in other filings. This news release presents certain financial information on an "as adjusted" basis to give effect to the exclusion exclusion /ex·clu·sion/ (eks-kloo´zhun) 1. a shutting out or elimination. 2. surgical isolation of a part, as of a segment of intestine, without removal from the body. of unusual costs and expenses. We present the "as adjusted" data because we believe it is necessary to gain a full understanding of our operating results by emphasizing the results of core operations. We also present operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before and EBITDA as additional measures of our operating performance. Neither EBITDA nor the "as adjusted" information included in this news release are determined using generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting . Therefore, such information is not necessarily comparable to other companies. Neither operating earnings nor "as adjusted" financial data should be viewed as a substitute for or superior to net income or other data prepared in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with generally accepted accounting principles as measures of our profitability or liquidity. B/E Aerospace, Inc. is the world's leading manufacturer of aircraft cabin An aircraft cabin is the section of an aircraft in which passengers travel, often just called the cabin. At cruising altitudes, the surrounding atmosphere is too thin to breathe without an oxygen mask, so cabin pressurization adapts the cabin to atmospheric pressures. interior products, and a leading aftermarket distributor of aircraft component parts. With a global organization selling directly to the world's airlines, B/E designs, develops and manufactures a broad product line for both commercial aircraft and business jets and provides cabin interior design, reconfiguration and conversion services. Products for the existing aircraft fleet -- the aftermarket -- provide almost two-thirds of sales. For more information, visit B/E's website at http://www.beaerospace.com.
B/E Aerospace, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
THREE MONTHS ENDED
---------------------------------------------
EXCLUDING AS
AS ITEMS NOTED BELOW REPORTED
REPORTED November November
November 23, 2002 24, 2001
(In millions, except 23, 2002 (1) (2)
per share data)
---------------------------------------------------------------------
Net sales $ 145.5 $ 145.5 $ 172.8
Cost of sales 108.5 90.7 217.5
-------- -------- --------
Gross profit 37.0 54.8 (44.7)
Gross margin 25.4% 37.7% --%
Operating expenses:
Selling, general and
administrative 28.9 28.9 35.0
Research, development
and engineering 11.0 11.0 10.5
-------- -------- --------
Total operating expenses 39.9 39.9 45.5
-------- -------- --------
Operating (loss) earnings (2.9) 14.9 (90.2)
Operating margin --% 10.2% --%
Interest expense, net 16.8 16.8 16.0
-------- -------- --------
Loss before income taxes (19.7) (1.9) (106.2)
Income taxes 2.7 1.7 --
-------- -------- ------
NET LOSS $ (22.4) $ (3.6) $ (106.2)
========= ========= =========
DILUTED NET LOSS PER
COMMON SHARE $ (0.64) $ (0.10) $ (3.08)
Common shares:
Weighted average 35.0 35.0 34.5
End of period 35.1 35.1 35.2
(1) Cost of sales excludes the following consolidation costs: $6.0
charge related to October 2002 expansion of cost reduction
program, inventory impairment charge of $7.0 and transition costs
totaling $4.8.
(2) Cost of sales includes $99.9 of consolidation costs and $6.8
of acquisition-related expenses.
B/E Aerospace, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
NINE MONTHS ENDED
----------------------------------------------------------------------
EXCLUDING
ITEMS AS
AS NOTED REPORTED PRO FORMA
REPORTED BELOW November November
(In millions, except per share November November 24, 2001 24, 2001
data) 23, 2002 23, 2002 (2) (2)(3)
(1)
-------------------------------- --------- ----------------- ---------
Net sales $454.6 $454.6 $528.7 $589.6
Cost of sales 315.6 280.3 438.5 475.5
--------- ----------------- ---------
Gross profit 139.0 174.3 90.2 114.1
Gross margin 30.6% 38.3% 17.1% 19.4%
Operating expenses:
Selling, general and
administrative 86.3 86.3 100.6 111.1
Research, development and
engineering 29.7 29.7 33.6 33.6
--------- ----------------- ---------
Total operating expenses 116.0 116.0 134.2 144.7
--------- ----------------- ---------
Operating earnings (loss) 23.0 58.3 (44.0) (30.6)
Operating margin 5.1% 12.8% --% --%
Interest expense, net 50.4 50.4 43.7 48.4
--------- ----------------- ---------
(Loss) earnings before income
taxes (27.4) 7.9 (87.7) (79.0)
Income taxes 2.7 2.7 1.9 2.8
--------- ----------------- ---------
(Loss) earnings before
extraordinary item (30.1) 5.2 (89.6) (81.8)
Extraordinary item(4) -- -- 9.3 9.3
--------- ----------------- ---------
NET (LOSS) EARNINGS $(30.1) $5.2 $(98.9) $(91.1)
========= ================= =========
DILUTED NET (LOSS) EARNINGS PER
COMMON SHARE:
Before extraordinary item $(0.86) $0.15 $(2.79) $(2.55)
Net (loss) earnings $(0.86) $0.15 $(3.08) $(2.84)
Common shares:
Weighted average and
potentially dilutive 34.8 35.7 32.1 32.1
End of period 35.1 35.1 35.2 35.2
(1) Cost of sales excludes the following consolidation costs:
transition costs totaling $22.3, $6.0 charge related to October 2002
expansion of cost reduction program and inventory impairment charge of
$7.0.
(2) Cost of sales includes consolidation costs of $99.9 and
acquisition-related expenses of $6.8.
(3) Pro forma figures treat companies acquired during fiscal 2002
as though acquired at the beginning of fiscal 2002. The pro forma
results are presented for informational purposes only in order to
enhance comparability and are not necessarily indicative of the
operating results that would have occurred had the transactions
actually occurred at the beginning of fiscal 2002, nor are they
necessarily indicative of future operating results.
(4) Expenses related to early extinguishment of 9.875% Senior
Subordinated Notes and bank credit facility.
B/E Aerospace, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited; dollars in millions)
November 23, February 23,
2002 2002
-------------- -------------
ASSETS
Current assets:
Cash and cash equivalents $ 130.4 $ 159.5
Accounts receivable - trade,
less allowance for doubtful
accounts of $4.1
(November 23, 2002)
and $4.9
(February 23, 2002) 92.8 93.3
Inventories, net 167.5 157.0
Other current assets 52.6 46.6
----------- ---------
Total current assets 443.3 456.4
Long-term assets 656.5 671.9
----------- ---------
$ 1,099.8 $ 1,128.3
=========== =========
LIABILITIES AND STOCKHOLDERS'
EQUITY
Total current liabilities $ 133.3 $ 151.6
Long-term liabilities 859.3 855.6
----------- ---------
992.6 1,007.2
Total stockholders' equity 107.2 121.1
----------- ---------
$ 1,099.8 $ 1,128.3
=========== =========
B/E Aerospace, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in millions)
NINE MONTHS ENDED
-------------------------
November 23, November 24,
2002 2001
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(30.1) $(98.9)
Adjustments to reconcile net loss to
net cash flows provided by operating
activities:
Extraordinary item -- 9.3
Depreciation and amortization 22.1 35.8
Non-cash employee benefit plan
contributions 1.7 1.9
Loss on disposal of property
and equipment 1.4 --
Impairment of property and
equipment, inventories,
intangibles and other
assets 7.0 83.3
Changes in operating assets
and liabilities, net of
acquisitions (37.0) 9.6
------------ ------------
Net cash flows (used in) provided by
operating activities (34.9) 41.0
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions, net of cash acquired (6.5) (265.2)
Capital expenditures (16.2) (11.0)
Proceeds from real estate sales 28.7 --
Change in intangible and other assets (3.9) (19.7)
------------ ------------
Net cash flows provided by (used in)
investing activities 2.1 (295.9)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES 1.1 331.2
Effect of exchange rate changes on cash
flows 2.6 (0.9)
------------ ------------
Net (decrease) increase in cash and cash
equivalents $(29.1) $75.4
============ ============
B/E Aerospace, Inc. RECONCILIATION OF "AS REPORTED" TO "AS ADJUSTED" FINANCIAL INFORMATION This news release presents certain financial information on an "as adjusted" basis to give effect to the exclusion of unusual costs and expenses. We present the "as adjusted" data because we believe it is necessary to gain a full understanding of our operating results by emphasizing the results of core operations. In addition, we present operating earnings as an additional measure of our operating performance. We also present EBITDA (earnings before interest, taxes, depreciation and amortization) as set forth below because we believe it is an appropriate supplemental measure of our ability to service our debt. Neither EBITDA nor the "as adjusted" information included in this news release are determined using generally accepted accounting principles. Therefore, such information is not necessarily comparable to other companies. Neither EBITDA nor "as adjusted" financial data should be viewed as a substitute for or superior to net income or other data prepared in accordance with generally accepted accounting principles as measures of our profitability or liquidity.
IMPACT OF
AS CONSOLIDATION AS
(In millions, except per share data) REPORTED COSTS ADJUSTED
----------------------------------------------------------------------
----------------------------------------------------------------------
Three Months Ended
November 23, 2002:
Net sales $145.5 $ -- $145.5
Gross profit 37.0 17.8 54.8
Operating (loss) earnings (2.9) 17.8 14.9
Net (loss) earnings (22.4) 18.8 (3.6)
Net (loss) earnings per share (0.64) 0.54 (0.10)
EBITDA 4.7 17.8 22.5
----------------------------------------------------------------------
Nine Months Ended
November 23, 2002:
Net sales $454.6 $ -- $454.6
Gross profit 139.0 35.3 174.3
Operating earnings 23.0 35.3 58.3
Net (loss) earnings (30.1) 35.3 5.2
Net (loss) earnings per share (0.86) 1.01 0.15
EBITDA 45.1 35.3 80.4
B/E Aerospace, Inc.
RECONCILIATION OF
"AS REPORTED" TO "AS ADJUSTED" FINANCIAL INFORMATION
(continued)
IMPACT OF
CONSOLIDATION
COSTS AND
(In millions, except AS ACQUISITION- AS
per share data) REPORTED RELATED COSTS ADJUSTED
---------------------------------------------- ----------------------
Three Months Ended
November 24, 2001:
Net sales $ 172.8 $ -- $ 172.8
Gross profit (44.7) 106.7 62.0
Operating (loss) earnings (90.2) 106.7 16.5
Net (loss) earnings (106.2) 106.7 0.5
Net (loss) earnings per share (3.08) 3.09 0.01
EBITDA (78.4) 106.7 28.3
IMPACT OF
CONSOLIDATION
COSTS AND IMPACT OF
AS ACQUISITION- DEBT AS
REPORTED RELATED COSTS EXTINGUISHMENT ADJUSTED
----------------------------------------------------------------------
Nine Months Ended
November 24, 2001:
Net sales $ 528.7 $ -- $ -- $ 528.7
Gross profit 90.2 106.7 -- 196.9
Operating (loss)
earnings (44.0) 106.7 -- 62.7
Net (loss) earnings (98.9) 106.7 9.3 17.1
Net (loss) earnings
per share (3.08) 3.32 0.29 0.53
EBITDA (17.5) 106.7 9.3 98.5
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