B/E Aerospace to Record Non-Cash Goodwill Impairment Charge.* CHARGE DUE TO DECLINE IN MARKET MULTIPLES; DOES NOT IMPACT OPERATIONS * EXCLUSIVE OF CHARGE, EXPECTS RECORD 2008 SALES AND EARNINGS; EXPECTS Q4 SALES UP 14%, EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. OF $0.47, WHICH INCLUDES ACQUISITION, INTEGRATION, TRANSITION, AND SEVERANCE COSTS OF $0.06 PER SHARE; Q4 EPS OF $0.53 EXCLUDING SUCH COSTS * Q4 FREE CASH FLOW APPROXIMATELY $58 MILLION * FOURTH QUARTER AND 2008 FINANCIAL RESULTS TO BE ISSUED FEBRUARY 2, 2009 WELLINGTON, Fla. -- B/E Aerospace, Inc. (Nasdaq: BEAV BEAV Binary Editor and Viewer ), 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 the world's leading distributor of aerospace fasteners fasteners In construction, connectors between structural members. Bolted connections are used when it is necessary to fasten two elements tightly together, especially to resist shear and bending, as in column and beam connections. and consumables, announced today that it expects to record a fourth quarter non-cash, after-tax charge of approximately $300 million for impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. of goodwill, in accordance with Statement of Financial Accounting Standards 142 "Goodwill and Other Intangible Assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. ." The estimated impairment charge is primarily driven by adverse equity market conditions that caused a decrease in current market multiples and the company's stock price as of December 31, 2008. The charge is not expected to change the tax deductibility of the goodwill. The fourth quarter and full year 2008 commentary in this release excludes the impact of the non-cash goodwill impairment charge. The company expects record 2008 revenues and 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 to increase in excess of 25 percent and 43 percent, respectively, to approximately $2.1 billion and $354 million, respectively, as compared with 2007. Exclusive of the effects of the non-cash goodwill impairment charge, the company expects 2008 earnings per diluted share of approximately $2.12, an increase of more than 27 percent as compared to the prior year. These aforementioned expected results include acquisition, integration and transition (AIT) costs, severance costs and debt prepayment Prepayment 1. The payment of a debt obligation prior to its due date. 2. The excess payment over a scheduled debt repayment amount. Notes: 1. Examples include deferred expenses such as rent and early loan repayments. 2. costs of approximately $15 million or $0.10 per diluted share. The company expects fourth quarter 2008 revenues and operating earnings to increase by approximately 14 percent and 34 percent, respectively, to approximately $527 million and $91 million, respectively, as compared with 2007. Exclusive of the effects of the non-cash goodwill impairment charge, the company expects fourth quarter 2008 earnings per diluted share of approximately $0.47. These aforementioned expected results include AIT and severance costs of approximately $8 million or $0.06 per diluted share. Exclusive of the AIT and severance costs, adjusted net earnings per diluted share are expected to be $0.53, an increase of more than 15 percent from 2007. The results reported in this release are subject to the finalization Writing the table of contents (TOC) on a recordable CD or DVD disc. The finalization process ensures that the disc can be played back on most CD and DVD players. See disc-at-once. of the goodwill impairment charge that the company expects to complete in connection with the filing of its Annual Report on 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. for the year ended December 31, 2008. The company plans to issue its fourth quarter and 2008 full year financial results on Monday, February 2, 2009 and will webcast its earnings conference call at 9:00 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy Monday, February 2, 2009. A live audio broadcast of the conference call, along with a supplemental presentation, will be available on the investor relations Investor relations The process by which the corporation communicates with its investors. page of the company's website at www.beaerospace.com. Earnings per diluted share exclusive of the estimated goodwill impairment charge and other costs, and free cash flow are non-GAAP financial measures. See "Reconciliation of Non-GAAP Financial Measures" in this press release for the information required by Regulation G under the Securities Exchange Act of 1934. 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 Aerospace's actual experience and results may differ materially from the experience and results anticipated in such statements. Factors that might cause such a difference include those related to the expected benefits from the HCS HCS - Heterogeneous Computer System A distributed system project. acquisition, changes in market and industry conditions and those discussed in B/E Aerospace's filings with the Securities and Exchange Commission, which include its 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. , Annual Report on Form 10-K, Quarterly Reports on Form 10-Q Form 10-Q See 10-Q. and Current Reports on Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. . 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 Aerospace's Annual Report on Form 10-K and in other filings. The forward-looking statements included in this news release are made only as of the date of this news release and, except as required by federal securities laws, we do not intend to publicly update or revise any forward-looking statements to reflect subsequent events or circumstances. About B/E Aerospace, Inc. B/E Aerospace, Inc. is the world's leading manufacturer of aircraft cabin interior products and the world's leading distributor of aerospace fasteners and consumables. B/E Aerospace designs, develops and manufactures a broad range of products for both commercial aircraft and business jets. B/E Aerospace manufactured products include aircraft cabin seating, lighting, oxygen, and food and beverage F&B is a common abbreviation in the United States and Commonwealth countries, including Hong Kong. F&B is typically the widely accepted abbreviation for "Food and Beverage," which is the sector/industry that specializes in the conceptualization, the making of, and delivery of foods. preparation and storage equipment. The Company also provides cabin interior design, reconfiguration and passenger-to-freighter conversion services. Products for the existing aircraft fleet - the aftermarket Aftermarket See: Secondary market. aftermarket See secondary market. - generate about 60 percent of sales. B/E Aerospace sells and supports its products through its own global direct sales and product support organization. B/E Aerospace, Inc. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES This release includes the financial measures "adjusted net earnings" and "adjusted net earnings per diluted share," which are "non-GAAP financial measures" as defined in Regulation G of the Securities and Exchange Act of 1934. We define "adjusted net earnings" and "adjusted net earnings per diluted share" as estimated net earnings and estimated net earnings per diluted share reported under GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). less the estimated goodwill impairment charge, acquisition, integration, and transition costs, severance costs, and debt prepayment costs (on an after tax basis). The company uses adjusted net earnings and adjusted net earnings per diluted share to evaluate and assess the operational strength and performance of its business. The company believes these financial measures are relevant and useful for investors because it allows investors to have a better understanding of the company's operating performance that were not affected by the estimated goodwill impairment charge, debt prepayment costs, acquisition, integration and transition costs and severance costs. These financial measures should not be viewed as a substitute for or superior to estimated net earnings or estimated net earnings per diluted share, the most comparable GAAP measures, as a measure of the company's operating performance. Estimated Goodwill Impairment Charge. The company expects to record a fourth-quarter non-cash after-tax charge of approximately $300.0 million for impairment of goodwill. Acquisition, Integration and Transition Costs. For the fourth quarter of 2008 and for the full year 2008, the company incurred $6.1 million and $9.7 million, respectively, of acquisition, integration and transition costs resulting from the integration of the HCS business with our existing distribution business. Severance costs associated with cost reduction actions. The company incurred $2.0 million of severance costs associated with cost reductions actions implemented during the fourth quarter of 2008. Debt Prepayment Costs. In the third quarter of 2008, the company incurred $3.6 million of debt prepayment costs resulting from the prepayment of $150 million of bank term debt. Pursuant to the requirements of Regulation G, the company is providing the following tables which reconcile estimated net earnings and net earnings per diluted share, the most directly comparable GAAP measures, to adjusted estimated net earnings and adjusted estimated net earnings per fully diluted share. In addition, this release includes the financial measure "free cash flow," which is also a non-GAAP financial measure. We define "free cash flow" as estimated net cash flows provided by operating activities less capital expenditures. The company uses free cash flow to provide investors with an additional perspective on the company's cash flows provided by operating activities after taking into account reinvestments. Free cash flow does not take into account debt service requirements and therefore does reflect an amount available for discretionary purposes. [TABLE OMITTED] |
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