SPR Spirit Aerosystems Holdings Inc

WICHITA, Kan., April 29, 2015 /CNW/ -- 

First Quarter 2015 Consolidated Results

• Total Revenues of $1.7 billion
• Reports fully diluted EPS of $1.30, adjusted EPS of $1.00* excluding the impact for the partial release of the deferred tax valuation allowance
• Free Cash Flow of $384 million*

Spirit AeroSystems Holdings, Inc. (NYSE: SPR) reported first quarter financial results driven by positive operating performance of mature programs. Spirit's first quarter 2015 revenues were $1.7 billion up one percent compared to the same period of 2014.

Operating income was $235 million, up from $194 million for the same period in 2014. Net income for the quarter was $182 million, or $1.30 per fully diluted share, compared to net income of $154 million, or $1.07 per fully diluted share, in the same period of 2014. The current quarter includes $0.30 earnings per share for the partial release of the deferred tax valuation allowance as compared to $0.22 for same period of 2014. (Table 1)

"We are making good progress on our operational delivery, quality and productivity.  We are aligning and strengthening what we do best to ensure we're fully maximizing our value proposition," said President and Chief Executive Officer Larry Lawson. 

"We continue to drive the enterprise to find the most efficient and productive approaches for the rate increases on 737, A320, 787, and A350. In addition to investments to support rate, we are investing in automation projects of over $100 million. These automation projects will return our investment in three to four years and continue to differentiate our manufacturing capability," Lawson concluded.

Spirit's backlog at the end of the first quarter was $46 billion driven by strong commercial aerospace demand.

Free cash flow was a $384 million* source of cash for the first quarter of 2015, compared to a ($8) million* use of cash in the first quarter of 2014 due to tax refunds associated with the Gulfstream divestiture and reduction in accounts receivable. (Table 2)

Cash balances at the end of the first quarter were $750 million and debt balances were $1.1 billion. The company's $650 million revolving credit facility was undrawn at the end of the first quarter.

During the first quarter the company's credit rating was upgraded to Ba1 from Ba2 by Moody's Investor Services and upgraded to BB positive outlook from BB- by Standard and Poor's.

On March 18, 2015, Spirit entered into an amendment to its senior secured credit agreement that provided for a new $535 million senior secured term loan A with a maturity date of March 18, 2020, which replaced the term loan B with an outstanding amount of $535 million.

Financial Outlook and Risk to Future Financial Results

Spirit revenue for the full-year 2015 remains unchanged and is expected to be between $6.6 billion and $6.7 billion. Fully diluted earnings per share for 2015 remains unchanged and is expected to be between $3.60 and $3.80 per share, which does not include the year-to-date impact or potential future adjustments to the deferred tax asset valuation allowance.  Free cash flow for 2015 remains unchanged and is expected to be between $600 million and $700 million*, which includes higher capital expenditures of $325 million to $375 million as compared to 2014.  The effective tax rate for 2015 is forecasted to be between 32.0 percent and 33.0 percent, including the expected benefit of the U.S. Research Tax Credit for 2015, and excluding any potential adjustment to the valuation allowance against U.S. net deferred tax assets. (Table 3)

Risks to our financial guidance are described more fully in the Cautionary Statement Regarding Forward-Looking Statements in this release and in the "Risk Factors" section of our filings with the Securities and Exchange Commission.

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 "anticipate," "believe," "continue," "estimate," "expect," "forecast," "intend," "may," "plan," "project," "should," "will," or other similar words, 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 and manage costs related to our new and maturing commercial, business aircraft and military development programs and the related recurring production; 3) margin pressures and the potential for additional forward losses on new and maturing programs; 4) our ability to accommodate, and the cost of accommodating, announced increases in the build rates of certain aircraft; 5) the effect on business and commercial aircraft demand and build rates of the following factors: 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; 6) customer cancellations or deferrals as a result of global economic uncertainty; 7) 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; 8) the success and timely execution of key milestones such as receipt of necessary regulatory approvals and customer adherence to their announced schedules; 9) our ability to successfully negotiate future pricing under our supply agreements with Boeing, Airbus and our other customers; 10) our ability to enter into profitable supply arrangements with additional customers; 11) the ability of all parties to satisfy their performance requirements under existing supply contracts with Boeing and Airbus, our two major customers, and other customers and the risk of nonpayment by such customers; 12) 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 or acts of terrorism; 13) any adverse impact on the demand for air travel or our operations from the outbreak of diseases or epidemic or pandemic outbreaks; 14) our ability to avoid or recover from cyber-based or other security attacks, information technology failures or other disruptions; 15) returns on pension plan assets and the impact of future discount rate changes on pension obligations; 16) our ability to borrow additional funds or refinance debt; 17) competition from commercial aerospace original equipment manufacturers and other aerostructures suppliers; 18) 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; 19) any reduction in our credit ratings; 20) our dependence on our suppliers, as well as the cost and availability of raw materials and purchased components; 21) our ability to recruit and retain highly-skilled employees and our relationships with the unions representing many of our employees; 22) spending by the U.S. and other governments on defense; 23) the possibility that our cash flows and borrowing facilities may not be adequate for our additional capital needs or for payment of interest on and principal of our indebtedness; 24) our exposure under our existing senior secured revolving credit facility to higher interest payments should interest rates increase substantially; 25) the effectiveness of any interest rate hedging programs; 26) the effectiveness of our internal control over financial reporting; 27) the outcome or impact of ongoing or future litigation, claims and regulatory actions; and 28) exposure to potential product liability and warranty claims. 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.

Segment Results

Fuselage Systems
Fuselage Systems segment revenues in the first quarter of 2015 were $917 million, up from $858 million for the same period last year due to higher deliveries.  Operating margin for the first quarter of 2015 was 17.9 percent as compared to 16.5 percent during the same period of 2014. In the first quarter of 2015, the segment recorded pretax $3 million favorable cumulative catch-up adjustments on mature programs and a $3 million favorable change in estimate on the 747-8 program which is in a loss position. In comparison, the segment recorded pretax $9 million favorable cumulative catch-up adjustments in the first quarter of 2014. 

Propulsion Systems
Propulsion Systems segment revenues in the first quarter of 2015 were $446 million compared to $450 million for the same period last year driven by lower non-recurring engineering design revenues. Operating margin for the first quarter of 2015 was 21.5 percent as compared to 17.8 percent in the first quarter of 2014. In the first quarter of 2015, the segment realized pretax $9 million favorable cumulative catch-up adjustments on mature programs.  In comparison, the segment recorded pretax $5 million favorable cumulative catch-up adjustments in the first quarter of 2014.

Wing Systems
Wing Systems segment revenues in the first quarter of 2015 were $377 million, down from $414 million for the same period last year due to the Gulfstream wing divestiture.  Operating margin for the first quarter of 2015 was 12.0 percent as compared to 12.1 percent during the same period of 2014. The segment recorded pretax $3 million favorable cumulative catch-up adjustments in the first quarter of 2014.

On the web: http://www.spiritaero.com

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SOURCE Spirit AeroSystems Holdings, Inc.