Vought Reports Second Quarter 2006 Financial Results.DALLAS Dallas, city (1990 pop. 1,006,877), seat of Dallas co., N Tex., on the Trinity River near the junction of its three forks; inc. 1871. The second largest Texas city, after Houston, and the eighth largest U.S. -- Vought Vought is the name of several related aerospace firms. These have included, in the past, Lewis and Vought Corporation, Chance Vought, Vought Sikorsky, LTV Aerospace (part of Ling-Temco-Vought), Vought Aircraft Companies, and the current Aircraft Industries, Inc. today reported financial results for its second quarter ending June June: see month. 25, 2006. 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 for the second quarter 2006 were $456.1 million, an increase of 28 percent compared to $357.0 million for the same period last year. The increase in net sales is primarily due to sales resulting from customer settlements finalized See finalization. during the quarter as well as increased delivery rates on military programs. Net income for the second quarter 2006 was $34.5 million, compared to a net loss of $109.1 million for the same period last year. The increase in net income is primarily the result of customer settlements finalized during the second quarter 2006, as well as the absence of one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. facility consolidation and disruption disruption /dis·rup·tion/ (dis-rup´shun) a morphologic defect resulting from the extrinsic breakdown of, or interference with, a developmental process. charges recorded during the second quarter 2005. Adjusted 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 , as defined by our senior secured credit agreement, for the second quarter 2006 was $54.7 million, compared to $42.9 million for the same period last year. For the first six months of 2006, net sales were $778.9 million, an increase of 24 percent compared to $626.8 million for the same period last year. The increase in net sales is primarily due to sales resulting from customer settlements finalized during the second quarter of 2006, as well as increased delivery rates on military programs. Net loss for the first six months of 2006 was $17.0 million, compared to a net loss of $158.9 million for the same period last year. The lower net loss in 2006 resulted primarily from the customer settlements and the absence of one-time facility consolidation and disruption charges recorded in 2005. Adjusted EBITDA for the first half of 2006 was $91.0 million, compared to $91.8 million for the same period last year. "We continue to focus on improving manufacturing operations Manufacturing operations concern the operation of a facility, as opposed to maintenance, supply and distribution, health, and safety, emergency response, human resources, security, information technology and other infrastructural support organizations. , reducing costs, and making tough, but necessary staffing adjustments," said Vought President and Chief Executive Officer Elmer Doty. "While we recognize this quarter's results show significant improvement from last quarter, it is important to note the contribution of one-time events, such as customer settlements. We expect the recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. results from our turnaround Turnaround A situation where a company that has had poor performance for an extended period of time experiences a positive reversal. Notes: A speculator may profit from a turnaround if he or she accurately anticipates the improvement of a poorly performing company. efforts to be more apparent during the remainder of the year and beyond." EBITDA and Adjusted EBITDA as presented in this press release are supplemental measures of performance, and Adjusted EBITDA is a supplemental measure of our ability to satisfy our debt covenants. Neither of these measures is required by, or presented 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 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 in the (United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. ) (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ). EBITDA and Adjusted EBITDA are not measurements of our financial performance under GAAP and should not be considered as alternatives to net income, operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. or any other performance measures derived de·rive v. de·rived, de·riv·ing, de·rives v.tr. 1. To obtain or receive from a source. 2. in accordance with GAAP or as alternatives to cash flow from operating activities as measures of our liquidity. The senior secured credit agreement signed in December December: see month. 2004 contains maintenance ratios and other financial covenants that are based on the calculation of Adjusted EBITDA. The company believes it is necessary to present Adjusted EBITDA to enable investors to assess Vought's compliance with covenants under its credit agreement. Vought Aircraft Industries, Inc. (www.voughtaircraft.com) is one of the world's largest independent suppliers of aerostructures. Headquartered in Dallas, the company designs and manufactures major airframe structures such as wings, fuselage subassemblies, empennages, nacelles and other components for prime manufacturers of aircraft. Vought has annual sales of $1.3 billion and about 6,000 employees in nine U.S. locations. This release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. . These forward-looking statements involve known and unknown risks and uncertainties. Vought's actual financial results could differ materially from those anticipated due to the company's dependence on conditions in the airline industry, the level of new commercial aircraft orders, production rates for commercial and military aircraft, the level of defense spending, competitive pricing pressures, manufacturing inefficiencies, start-up Start-up The earliest stage of a new business venture. costs and possible overruns on new contracts, technology and product development risks and uncertainties, availability of materials and components from suppliers and other factors beyond the company's control.
Vought Aircraft Industries, Inc.
Consolidated Statements of Operations
($ in millions)
(Unaudited)
For the Three Months For the Six Months
Ended Ended
-------------------- ------------------
June 25, June 26, June 25, June 26,
2006 2005 2006 2005
---------- --------- --------- --------
Net sales $ 456.1 $ 357.0 $ 778.9 $ 626.8
Costs and expenses
Cost of sales 330.3 369.8 614.8 610.4
Selling, general and
administrative expenses 65.2 77.8 138.6 145.3
Impairment charge 8.5 5.9 8.5 5.9
---------- --------- --------- --------
Total costs and expenses 404.0 453.5 761.9 761.6
---------- --------- --------- --------
Operating income (loss) 52.1 (96.5) 17.0 (134.8)
Other income (expense)
Other income (loss) (0.1) (0.1) (0.1) (0.1)
Equity in earnings (loss) of
joint venture (1.5) (0.7) (3.2) (0.8)
Interest income 0.2 0.9 0.5 1.6
Interest expense (16.2) (12.7) (31.2) (24.8)
---------- --------- --------- --------
Loss before income taxes 34.5 (109.1) (17.0) (158.9)
Income taxes - - - -
---------- --------- --------- --------
Net income (loss) $ 34.5 $ (109.1) $ (17.0) $(158.9)
========== ========= ========= ========
Vought Aircraft Industries, Inc.
Condensed Consolidated Statements of Adjusted EBITDA
($ in Millions)
(Unaudited)
Three Months Ended Six Months Ended
------------------ -----------------
June 25, June 26, June 25, June 26,
2006 2005 2006 2005
--------- -------- -------- --------
Net Income (loss) 34.5 (109.1) (17.0) (158.9)
Plus:
Interest, net 16.0 11.8 30.7 23.2
Depreciation and amortization 14.2 17.5 27.7 35.2
--------- -------- -------- --------
EBITDA 64.7 (79.8) 41.4 (100.5)
--------- -------- -------- --------
Adjusted EBITDA
Plus:
Unusual charges - Plant
consolidation and other
merger & integration expenses 0.2 80.5 5.1 123.1
Impairment charge 8.5 5.9 8.5 5.9
Loss on disposal of property,
plant and equipment 0.2 3.8 0.3 4.3
Pension & OPEB curtailment (9.2) 0.7 (9.2) 1.7
Non-recurring investment in
Boeing 787 17.7 16.2 38.8 26.1
Non-recurring program costs
and settlements (31.6) - (6.7) -
Non-cash expense related to
FAS 87 & FAS 106 3.7 15.0 11.7 30.0
Management fees & expenses 0.5 0.5 1.0 1.0
Amortization of stepped up
inventory - 0.1 0.1 0.2
--------- -------- -------- --------
Total Adjusted EBITDA $54.7 $42.9 $91.0 $91.8
========= ======== ======== ========
Vought Aircraft Industries, Inc.
Reconciliation of Adjusted EBITDA to Net Cash Provided
by (Used in) Operating Activities
($ in Millions)
(Unaudited)
Three Months Ended Six Months Ended
------------------ ------------------
June 25, June 26, June 25, June 26,
2006 2005(a) 2006 2005(a)
--------- -------- --------- --------
Adjusted EBITDA (unaudited) $ 54.7 $ 42.9 $ 91.0 $ 91.8
Less:
Unusual items 0.7 81.0 6.1 124.1
Non-cash expense 3.2 25.5 11.4 42.1
Non-recurring investment in
Boeing 787 17.7 16.2 38.8 26.1
Non-recurring program and
settlement costs (31.6) - (6.7) -
--------- -------- --------- --------
EBITDA (unaudited) 64.7 (79.8) 41.4 (100.5)
Less:
Interest expense and other,
net 16.0 11.8 30.7 23.2
Depreciation and amortization 14.2 17.5 27.7 35.2
--------- -------- --------- --------
Net income (loss) $ 34.5 $(109.1) $ (17.0) $(158.9)
Plus:
Depreciation and amortization 14.2 17.5 27.7 35.2
Impairment charge 8.5 5.9 8.5 5.9
Equity in earnings (loss) of
joint venture 1.5 0.7 3.2 0.8
Amortization of debt issuance
costs and other 0.7 0.7 1.5 1.6
Loss from asset sale 0.2 3.8 0.3 4.3
Change in operating assets and
liabilities:
Accounts receivable (22.4) (16.3) (36.4) (9.5)
Inventories (8.0) 17.8 (34.6) (32.7)
Other current assets 1.8 1.7 (1.2) 1.3
Accounts payable 17.4 16.3 27.2 (5.0)
Accrued payroll and employee
benefits (2.4) (0.7) (3.1) (4.6)
Accrued & other liabilities 19.2 8.5 18.2 (0.6)
Accrued contract liabilities 19.0 (7.3) 113.2 98.0
Other assets and liabilities
- long term (13.6) 7.2 (8.0) 27.1
--------- -------- --------- --------
Net cash provided by (used in)
operating activities $ 70.6 $ (53.3) $ 99.5 $ (37.1)
========= ======== ========= ========
Net cash used in investing
activities $ (33.9) $ (42.9) $ (74.7) $ (49.2)
========= ======== ========= ========
Net cash provided by (used in)
financing activities $ (1.2) $ 13.7 $ 15.0 $ 14.1
========= ======== ========= ========
(a) Certain reclassifications have been made to the financial
statements for the prior year to conform to the 2006 presentation.
Vought Aircraft Industries, Inc.
Consolidated Balance Sheets
($ in millions)
June 25, December 31,
2006 2005
(unaudited)
------------ -----------
Assets
Current assets:
Cash and cash equivalents $ 49.9 $ 10.1
Accounts receivable 127.2 90.8
Inventories 374.7 340.1
Other current assets 10.0 7.4
------------ ------------
Total current assets 561.8 448.4
Property, plant and equipment, net 528.8 485.1
Goodwill, net 527.7 527.7
Identifiable intangible assets, net 73.7 79.1
Debt origination costs, net and other
assets 16.5 21.5
------------ ------------
Total assets $ 1,708.5 $ 1,561.8
============ ============
Liabilities and stockholders' equity
(deficit)
Current liabilities:
Accounts payable, trade $ 149.1 $ 121.9
Accrued and other liabilities 68.9 69.0
Accrued payroll and employee benefits 32.4 35.5
Accrued post-retirement benefits-current 54.6 53.4
Accrued pension-current 55.6 36.8
Current portion of long-term debt 4.0 4.0
Capital lease obligation 0.9 0.8
Accrued contract liabilities 329.2 216.0
------------ ------------
Total current liabilities 694.7 537.4
Long-term liabilities:
Accrued post retirement benefits 485.3 496.5
Accrued pension 440.0 441.2
Long-term bank debt 416.0 417.0
Long-term bond debt 270.0 270.0
Long-term capital lease obligation 0.6 1.2
Other non-current liabilities 191.5 171.5
------------ ------------
Total liabilities 2,498.1 2,334.8
Stockholders' equity (deficit):
Common stock, par value $.01; 50,000,000
shares authorized, 24,738,665 and
24,711,373 issued and outstanding in 2006
and 2005 0.3 0.3
Additional paid-in capital 411.7 411.4
Shares held in rabbi trust (1.6) (1.6)
Stockholders' loans (1.0) (1.1)
Accumulated deficit (621.6) (604.6)
Accumulated other comprehensive loss (577.4) (577.4)
------------ ------------
Total stockholders' equity (deficit) $ (789.6) $ (773.0)
------------ ------------
Total liabilities and stockholders' equity
(deficit) $ 1,708.5 $ 1,561.8
============ ============
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