WICHITA,
Kan., May 7, 2024 /PRNewswire/ --
First Quarter 2024
- Revenues of $1.7 billion
- EPS of $(5.31); Adjusted EPS* of
$(3.93)
- Cash used in operations of $416
million; Free cash flow* usage of $444 million
- Currently engaged in discussions with Boeing on the possible
acquisition of Spirit AeroSystems
Spirit AeroSystems Holdings, Inc. (NYSE: SPR) ("Spirit," "Spirit
AeroSystems" or the "Company") reported first quarter 2024
financial results.
Table 1.
Summary Financial Results (unaudited)
|
|
|
1st
Quarter
|
|
($ in millions,
except per share data)
|
2024
|
2023
|
Change
|
|
|
|
|
Net
Revenues
|
$1,703
|
$1,431
|
19 %
|
Operating
Loss
|
($528)
|
($95)
|
**
|
Operating Loss as a
% of Revenues
|
(31.0 %)
|
(6.6 %)
|
**
|
Net
Loss
|
($617)
|
($281)
|
**
|
Net Loss as a % of
Revenues
|
(36.2 %)
|
(19.6 %)
|
**
|
Loss Per Share
(Fully Diluted)
|
($5.31)
|
($2.68)
|
(98 %)
|
Adjusted Loss Per
Share (Fully Diluted)*
|
($3.93)
|
($1.69)
|
**
|
Fully Diluted
Weighted Avg Share Count
|
116.2
|
104.9
|
|
|
|
|
|
|
|
|
|
** Represents an amount in
excess of 100% or not meaningful.
|
"The first quarter was characterized by several events, one of
great significance was the partnership with Boeing to make
improvements to the safety and quality of our production systems.
We collaborated with Boeing to align 737 fuselage product
inspection as close as possible to where the work is performed at
our factories in Wichita. This is
a significant accomplishment that we believe will enhance quality,
eliminate rework, and benefit the entire production system between
our companies," said Pat Shanahan, President and Chief
Executive Officer, Spirit AeroSystems.
Boeing 737 Update
As of March 1, 2024, Spirit and
Boeing have performed joint product verification to ensure
conformity prior to transportation to Renton final assembly.
Consequently, Spirit's deliveries to Boeing have been delayed and
undelivered units have been built-up in Wichita, Kansas, resulting in higher levels of
inventory and contract assets and lower operational cash
flows.
During late 2023, the Company prepared for expected increases in
production rates which have now been delayed. Spirit's current
Boeing 737 production rate is approximately 31 aircraft per month,
which the Company anticipates remaining at through the end of this
year. Spirit's ability to align factory costs, which include both
internal and supply chain related spending, and to react to sudden
changes in production rates will have a material impact on
results of operations and cash flows throughout 2024.
Revenue
Spirit's revenue in the first quarter of 2024 increased from the
same period of 2023, primarily due to higher production activities
on Commercial programs and higher Defense and Space revenues.
Overall deliveries decreased to 307 shipsets during the first
quarter of 2024 compared to 346 shipsets in the same period of
2023.
Spirit's backlog at the end of the first quarter of 2024 was
approximately $49 billion, which
includes work packages on all commercial platforms in the Airbus
and Boeing backlog.
Earnings
Operating loss for the first quarter of 2024 was higher compared
to the same period of 2023, primarily driven by the higher
unfavorable changes in estimates during the current period.
Additionally, the first quarter of 2024 was negatively impacted by
Boeing's schedule changes in March and the investigation and
quality audits resulting from the Alaska Airlines incident.
Total change in estimates in the first quarter of 2024 included
net forward losses of $495.4 million
and unfavorable cumulative catch-up adjustments for periods prior
to the first quarter of $39.2
million. Net forward losses were primarily driven by the
Airbus A350 and A220 programs of $280.8
million and $167.0 million,
respectively, due to the inability to reach a conclusion to pricing
negotiations with Airbus, additional firm orders, and production
cost growth. The forward losses on the Airbus A350 and A220
programs include net incremental losses for anticipated performance
obligations beyond 2026 of $168.3
million in total. Additionally, the Boeing 787 program drove
$34.1 million of forward losses, due
to supply chain and labor cost growth. Unfavorable cumulative
catch-up adjustments were primarily related to the Boeing 737
program, as discussed above. Excess capacity costs during the first
quarter of 2024 were $26.1 million.
In comparison, during the first quarter of 2023, Spirit recognized
$110.0 million of net forward loss
charges, $11.9 million of unfavorable
cumulative catch-up adjustments and excess capacity costs of
$43.3 million.
First quarter 2024 EPS was $(5.31)
compared to $(2.68) in the same
period of 2023. First quarter 2024 adjusted EPS* was $(3.93), which excludes the incremental deferred
tax asset valuation allowance. In the same period of 2023, adjusted
EPS* was $(1.69), which excluded the
incremental deferred tax asset valuation allowance and pension
termination charges. (Table 1)
Cash
Cash from operations and free cash flow* during the first
quarter of 2024 were negatively impacted by the disruption to
Boeing 737 production and delivery delays. Cash from operations and
free cash flow* during the first quarter of 2023 reflects a
$180 million surplus cash payment
received related to the termination of Pension Value Plan A. The
cash balance at the end of the first quarter of 2024 was
$352 million. (Table 2)
Events in the first quarter of 2024 have resulted in significant
reductions in projected revenue and cash flows this year. These
recent events include the production and delivery process changes
implemented by Boeing and lower than planned 737 production rates
following the in-flight Alaska Airlines incident and the inability
to reach a conclusion to pricing negotiations with Airbus.
Management has developed plans to pursue various options to improve
liquidity as needed and expects these plans will sufficiently
improve the Company's liquidity needs.
Table 2. Cash
Flow, Cash and Total Debt (unaudited)
|
|
|
1st
Quarter
|
|
($ in
millions)
|
2024
|
2023
|
Change
|
|
|
|
|
Cash used in
Operations
|
($416)
|
($46)
|
**
|
Purchases of
Property, Plant & Equipment
|
($29)
|
($23)
|
(25 %)
|
Free Cash
Flow*
|
($444)
|
($69)
|
**
|
|
|
|
|
|
March
28,
|
December
31,
|
|
Cash and Total
Debt
|
2024
|
2023
|
|
Cash
|
$352
|
$824
|
|
Total
Debt
|
$4,072
|
$4,084
|
|
|
|
|
|
|
|
|
|
** Represents
an amount in excess of 100% or not meaningful.
|
2024 Financial Outlook
Spirit will not be providing guidance until there is further
clarity on the acquisition discussions with Boeing, 737 MAX
delivery and production timing, as well as ongoing commercial
negotiations with Airbus.
Subsequent Events
As described in the Form 8-K filed by the Company on
April 23, 2024, on April 18, 2024, the Company entered into a
Memorandum of Agreement with Boeing to provide $425.0 million of cash advances, based upon the
Company maintaining a production rate that supports Boeing's
production demand in accordance with certain long-term supply
agreements, which Spirit expects to receive in the second quarter
of 2024.
Additionally, subsequent to the end of the first quarter, Spirit
received indications that Boeing expects a slower increase in
production and deliveries on the Boeing 787 program. While the
Company has not received a formal schedule change, Spirit has
completed a preliminary assessment relevant to the anticipated
impact of this expected schedule change. As a result of this
preliminary assessment, the Company expects to incur an incremental
forward loss of approximately $50 to
$60 million in the second quarter of
2024 due to reduced production volumes and the inability to reduce
variable costs in a timely manner and the corresponding amount of
fixed overhead absorption applied to lower deliveries. This
preliminary assessment is subject to change if Boeing further
revises its production and delivery plans.
Segment Results
Commercial
Commercial segment revenue in the first quarter of 2024
increased from the same period of the prior year, primarily due to
higher production across most programs. Operating margin for the
first quarter of 2024 decreased compared to the same period of
2023, primarily driven by higher changes in estimates as well as
the results of the changes implemented on the product verification
process in March. In the first quarter of 2024, change in estimates
for the segment included $493.8
million of net forward losses and $38.9 million of unfavorable cumulative catch-up
adjustments. Additionally, during the first quarter of 2024, the
Commercial segment included excess capacity costs of $24.9 million. In comparison, during the first
quarter of 2023, the segment recognized $109.9 million of net forward losses,
$11.0 million of unfavorable
cumulative catch-up adjustments and excess capacity costs of
$40.9 million.
Defense & Space
Defense & Space segment revenue in the first quarter of 2024
increased from the same period of the prior year, primarily due to
higher activity on development and classified programs as well as
the Sikorsky CH-53K and FLRAA programs in the current period.
Operating margin for the first quarter of 2024 increased compared
to the same period of 2023, primarily due to higher activities on
classified programs.
Aftermarket
Aftermarket segment revenue in the first quarter of 2024
increased slightly from the same period of the prior year,
primarily due to higher spare part sales, partially offset by
decreased maintenance, repair and overhaul (MRO) activity.
Operating margin in the first quarter of 2024 decreased compared to
the first quarter of 2023, primarily due to lower MRO activity
during the current period.
Table 3.
Segment Reporting (unaudited)
|
|
|
1st
Quarter
|
($ in
millions)
|
2024
|
2023
|
Change
|
|
|
|
|
Segment
Revenues
|
|
|
|
Commercial
|
$1,356.1
|
$1,148.5
|
18.1 %
|
Defense
& Space
|
250.8
|
188.4
|
33.1 %
|
Aftermarket
|
95.9
|
94.5
|
1.5 %
|
Total Segment
Revenues
|
$1,702.8
|
$1,431.4
|
19.0 %
|
|
|
|
|
Segment (Loss)
Earnings from Operations
|
|
|
|
Commercial
|
($484.9)
|
($45.5)
|
**
|
Defense
& Space
|
32.2
|
19.2
|
67.7 %
|
Aftermarket
|
17.2
|
19.2
|
(10.4 %)
|
Total Segment
Operating (Loss) Earnings
|
($435.5)
|
($7.1)
|
**
|
|
|
|
|
Segment Operating
(Loss) Earnings as % of Revenues
|
|
|
|
Commercial
|
(35.8 %)
|
(4.0 %)
|
**
|
Defense
& Space
|
12.8 %
|
10.2 %
|
260
BPS
|
Aftermarket
|
17.9 %
|
20.3 %
|
(240)
BPS
|
Total Segment
Operating (Loss) Earnings as % of Revenues
|
(25.6 %)
|
(0.5 %)
|
**
|
|
|
|
|
Unallocated
Expense
|
|
|
|
SG&A
|
($81.5)
|
($77.4)
|
(5.3 %)
|
Research &
Development
|
(10.6)
|
(10.6)
|
**
|
Total Loss from
Operations
|
($527.6)
|
($95.1)
|
**
|
|
|
|
|
Total Operating Loss
as % of Revenues
|
(31.0 %)
|
(6.6 %)
|
**
|
|
|
|
|
** Represents an amount in
excess of 100% or not meaningful.
|
Cautionary Statement Regarding Forward-Looking
Statements
You should read the discussion of our financial condition and
results of operations in conjunction with the unaudited condensed
consolidated financial statements and the notes to the unaudited
condensed consolidated financial statements appearing in the
Company's Annual Report on Form 10-K and the Company's Quarterly
Reports on Form 10-Q. The press release may include
"forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. 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 "aim," "anticipate," "believe,"
"could," "continue," "estimate," "expect," "forecast," "goal,"
"intend," "may," "might," "model," "objective," "outlook," "plan,"
"potential," "predict," "project," "seek," "should," "target,"
"will," "would," and other similar words, or phrases, 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, including, but not limited to, those described
in the "Risk Factors" section of the 2023 Form 10-K. 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:
- the continued fragility of the global aerospace supply chain
including our dependence on our suppliers, as well as the cost and
availability of raw materials and purchased components, including
increases in energy, freight, and other raw material costs as a
result of inflation or continued global inflationary
pressures;
- our ability and our suppliers' ability and willingness to meet
stringent delivery (including quality and timeliness) standards and
accommodate changes in the build rates or model mix of aircraft
under existing contractual commitments, including the ability or
willingness to staff appropriately or expend capital for current
production volumes and anticipated production volume
increases;
- our ability to maintain continuing, uninterrupted production at
our manufacturing facilities and our suppliers' facilities;
- our ability, and our suppliers' ability, to attract and retain
the skilled work force necessary for production and development in
an extremely competitive market;
- the effect of economic conditions, including increases in
interest rates and inflation, on the demand for our and our
customers' products and services, on the industries and markets in
which we operate in the U.S. and globally, and on the global
aerospace supply chain;
- the general effect of geopolitical conditions, including
Russia's invasion of Ukraine and the resultant sanctions being
imposed in response to the conflict, including any trade and
transport restrictions;
- the recent outbreak of war in Israel and the Gaza
Strip and the potential for expansion of the conflict in the
surrounding region, which may impact certain suppliers' ability to
continue production or make timely deliveries of supplies required
to produce and timely deliver our products, and may result in
sanctions being imposed in response to the conflict, including
trade and transport restrictions;
- our relationships with the unions representing many of our
employees, including our ability to successfully negotiate new
agreements, and avoid labor disputes and work stoppages with
respect to our union employees;
- the impact of significant health events, such as pandemics,
contagions or other public health emergencies (including the
COVID-19 pandemic) or fear of such events, on the demand for our
and our customers' products and services, the industries and the
markets in which we operate in the U.S. and globally;
- the timing and conditions surrounding the full worldwide return
to service (including receiving the remaining regulatory approvals)
of the B737 MAX, future demand for the aircraft, and any residual
impacts of the B737 MAX grounding on production rates for the
aircraft;
- our reliance on The Boeing Company ("Boeing") and Airbus Group
SE and its affiliates (collectively, "Airbus") for a significant
portion of our revenues;
- the business condition and liquidity of our customers and their
ability to satisfy their contractual obligations to the
Company;
- the certainty of our backlog, including the ability of
customers to cancel or delay orders prior to shipment on short
notice, and the potential impact of regulatory approvals of
existing and derivative models;
- our ability to accurately estimate and manage performance,
cost, margins, and revenue under our contracts, and the potential
for additional forward losses on new and maturing programs;
- our accounting estimates for revenue and costs for our
contracts and potential changes to those estimates;
- our ability to continue to grow and diversify our business,
execute our growth strategy, and secure replacement programs,
including our ability to enter into profitable supply arrangements
with additional customers;
- the outcome of product warranty or defective product claims and
the impact settlement of such claims may have on our accounting
assumptions;
- competitive conditions in the markets in which we operate,
including in-sourcing by commercial aerospace original equipment
manufacturers;
- our ability to successfully negotiate, or re-negotiate, future
pricing under our supply agreements with Boeing, Airbus and other
customers;
- the possibility that our cash flows may not be adequate for our
additional capital needs;
- any reduction in our credit ratings;
- our ability to access the capital or credit markets to fund our
liquidity needs, and the costs and terms of any additional
financing;
- our ability to avoid or recover from cyber or other security
attacks and other operations disruptions;
- legislative or regulatory actions, both domestic and foreign,
impacting our operations, including the effect of changes in tax
laws and rates and our ability to accurately calculate and estimate
the effect of such changes;
- spending by the U.S. and other governments on defense;
- pension plan assumptions and future contributions;
- the effectiveness of our internal control over financial
reporting;
- the outcome or impact of ongoing or future litigation,
arbitration, claims, and regulatory actions or investigations,
including our exposure to potential product liability and warranty
claims;
- adequacy of our insurance coverage;
- our ability to continue selling certain receivables through the
receivables financing programs;
- our ability to effectively integrate recent acquisitions, along
with other acquisitions we pursue, and generate synergies and other
cost savings therefrom, while avoiding unexpected costs, charges,
expenses, and adverse changes to business relationships and
business disruptions; and
- the risks of doing business internationally, including
fluctuations in foreign currency exchange rates, impositions of
tariffs or embargoes, trade restrictions, compliance with foreign
laws, and domestic and foreign government policies.
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. You
should review carefully the section captioned "Risk Factors" in the
2023 Form 10-K and the Company's subsequent Quarterly Reports on
Form 10-Q for a more complete discussion of these and other factors
that may affect our business.
Spirit Shipset
Deliveries
|
(one shipset equals
one aircraft)
|
|
|
|
|
|
|
|
|
|
|
|
|
1st Quarter
|
|
|
|
2024
|
2023
|
|
B737
|
|
44
|
95
|
|
B767
|
|
5
|
8
|
|
B777
|
|
8
|
7
|
|
B787
|
|
13
|
6
|
|
Total Boeing
|
|
70
|
116
|
|
|
|
|
|
|
A220
|
|
15
|
13
|
|
A320 Family
|
|
153
|
142
|
|
A330
|
|
7
|
9
|
|
A350
|
|
16
|
12
|
|
Total Airbus
|
|
191
|
176
|
|
|
|
|
|
|
Business/Regional
Jet
|
|
46
|
54
|
|
|
|
|
|
|
Total
|
|
307
|
346
|
|
Spirit AeroSystems
Holdings, Inc.
|
Condensed
Consolidated Statements of Operations
|
(unaudited)
|
|
|
|
For the Three Months
Ended
|
|
March 28,
2024
|
|
March 30,
2023
|
|
($ in millions,
except per share data)
|
|
|
|
|
Net Revenues
|
$
1,702.8
|
|
$
1,431.4
|
Operating costs and
expenses
|
|
|
|
Cost of
sales
|
2,138.3
|
|
1,432.2
|
Selling, general and
administrative
|
81.5
|
|
77.4
|
Restructuring
costs
|
-
|
|
6.3
|
Research and
development
|
10.6
|
|
10.6
|
Total operating
costs and expenses
|
2,230.4
|
|
1,526.5
|
Operating
loss
|
(527.6)
|
|
(95.1)
|
Interest expense and
financing fee amortization
|
(80.2)
|
|
(72.4)
|
Other income (expense),
net
|
2.3
|
|
(117.4)
|
Loss before income
taxes and equity in net loss of affiliates
|
(605.5)
|
|
(284.9)
|
Income tax (provision)
benefit
|
(11.0)
|
|
4.3
|
Loss before equity
in net loss of affiliates
|
(616.5)
|
|
(280.6)
|
Equity in net loss of
affiliates
|
(0.1)
|
|
(0.7)
|
Net
loss
|
(616.6)
|
|
(281.3)
|
Less noncontrolling
interest in earnings of subsidiary
|
(0.1)
|
|
0.1
|
Net loss
attributable to common shareholders
|
$
(616.7)
|
|
$
(281.2)
|
Loss per
share
|
|
|
|
Basic
|
$
(5.31)
|
|
$
(2.68)
|
Diluted
|
$
(5.31)
|
|
$
(2.68)
|
Spirit AeroSystems
Holdings, Inc.
|
Condensed
Consolidated Balance Sheets
|
(unaudited)
|
|
March 28,
2024
|
|
December 31,
2023
|
|
($ in
millions)
|
Assets
|
|
|
|
Cash and cash
equivalents
|
$
352.0
|
|
$
823.5
|
Restricted
cash
|
0.1
|
|
0.1
|
Accounts receivable,
net
|
577.5
|
|
585.5
|
Contract assets,
short-term
|
824.2
|
|
522.9
|
Inventory,
net
|
1,797.5
|
|
1,767.3
|
Other current
assets
|
56.9
|
|
52.5
|
Total current
assets
|
3,608.2
|
|
3,751.8
|
Property, plant and
equipment
|
2,040.1
|
|
2,084.2
|
Right of use
assets
|
90.9
|
|
92.1
|
Contract assets,
long-term
|
8.1
|
|
-
|
Pension
assets
|
37.2
|
|
33.5
|
Restricted plan
assets
|
50.0
|
|
61.1
|
Deferred income
taxes
|
0.1
|
|
0.1
|
Goodwill
|
631.2
|
|
631.2
|
Intangible assets,
net
|
192.4
|
|
196.2
|
Other assets
|
106.3
|
|
99.9
|
Total assets
|
$
6,764.5
|
|
$
6,950.1
|
Liabilities
|
|
|
|
Accounts
payable
|
$
1,138.3
|
|
$
1,106.8
|
Accrued
expenses
|
483.9
|
|
420.1
|
Profit
sharing
|
22.4
|
|
15.7
|
Current portion of
long-term debt
|
81.0
|
|
64.8
|
Operating lease
liabilities, short-term
|
9.4
|
|
9.1
|
Advance payments,
short-term
|
67.8
|
|
38.3
|
Contract liabilities,
short-term
|
152.3
|
|
192.6
|
Forward loss provision,
short-term
|
313.2
|
|
256.6
|
Deferred revenue and
other deferred credits, short-term
|
57.0
|
|
49.6
|
Other current
liabilities
|
42.4
|
|
44.7
|
Total current
liabilities
|
2,367.7
|
|
2,198.3
|
Long-term
debt
|
3,991.2
|
|
4,018.7
|
Operating lease
liabilities, long-term
|
83.5
|
|
84.3
|
Advance payments,
long-term
|
283.6
|
|
301.9
|
Pension/OPEB
obligation
|
29.4
|
|
30.3
|
Contract liabilities,
long-term
|
153.5
|
|
161.3
|
Forward loss provision,
long-term
|
545.2
|
|
224.1
|
Deferred revenue and
other deferred credits, long-term
|
66.3
|
|
76.7
|
Deferred grant income
liability - non-current
|
27.1
|
|
25.8
|
Deferred income
taxes
|
16.5
|
|
9.1
|
Other non-current
liabilities
|
314.3
|
|
315.5
|
Stockholders'
Equity
|
|
|
|
Common stock, Class A
par value $0.01, 200,000,000 shares authorized,
116,276,706 and 116,054,291 shares issued and outstanding,
respectively
|
1.2
|
|
1.2
|
Additional paid-in
capital
|
1,435.4
|
|
1,429.1
|
Accumulated other
comprehensive loss
|
(97.2)
|
|
(89.6)
|
Retained
earnings
|
(0.4)
|
|
616.3
|
Treasury stock, at cost
(41,587,480 shares each period, respectively)
|
(2,456.7)
|
|
(2,456.7)
|
Total stockholders'
equity
|
(1,117.7)
|
|
(499.7)
|
Noncontrolling
interest
|
3.9
|
|
3.8
|
Total equity
|
(1,113.8)
|
|
(495.9)
|
Total liabilities and
equity
|
$
6,764.5
|
|
$
6,950.1
|
Spirit AeroSystems
Holdings, Inc.
|
Condensed
Consolidated Statements of Cash Flows
|
(unaudited)
|
|
|
|
|
|
|
|
For the Three Months
Ended
|
|
|
March 28,
2024
|
|
March 30,
2023
|
Operating
activities
|
|
($ in
millions)
|
Net loss
|
|
$
(616.6)
|
|
$
(281.3)
|
Adjustments to
reconcile net loss to net cash used in operating
activities
|
|
|
|
|
Depreciation and
amortization expense
|
|
77.9
|
|
79.9
|
Amortization of
deferred financing fees
|
|
1.7
|
|
1.7
|
Accretion of customer
supply agreement
|
|
0.8
|
|
0.6
|
Employee stock
compensation expense
|
|
10.8
|
|
9.0
|
(Gain) loss from
derivative instruments
|
|
(1.2)
|
|
3.4
|
(Gain) loss from
foreign currency transactions
|
|
(5.9)
|
|
4.0
|
Loss on disposition of
assets
|
|
0.7
|
|
0.1
|
Deferred
taxes
|
|
9.0
|
|
(16.4)
|
Pension and other
post-retirement plans (income) expense
|
|
(2.8)
|
|
63.6
|
Grant liability
amortization
|
|
(0.3)
|
|
(0.3)
|
Equity in net loss of
affiliates
|
|
0.1
|
|
0.7
|
Forward loss
provision
|
|
378.1
|
|
6.9
|
Gain on settlement of
financial instrument
|
|
(0.5)
|
|
(0.5)
|
Changes in assets and
liabilities
|
|
|
|
|
Accounts receivable,
net
|
|
7.4
|
|
(116.6)
|
Inventory,
net
|
|
(34.8)
|
|
(75.8)
|
Contract
assets
|
|
(309.8)
|
|
(22.0)
|
Accounts payable and
accrued liabilities
|
|
99.7
|
|
152.9
|
Profit sharing/deferred
compensation
|
|
6.7
|
|
(18.4)
|
Advance
payments
|
|
12.2
|
|
(3.3)
|
Income taxes
receivable/payable
|
|
2.7
|
|
11.8
|
Contract
liabilities
|
|
(48.0)
|
|
(13.8)
|
Pension plans employer
contributions
|
|
(0.7)
|
|
179.0
|
Deferred revenue and
other deferred credits
|
|
(0.5)
|
|
(3.0)
|
Other
|
|
(2.3)
|
|
(8.4)
|
Net cash used in
operating activities
|
|
(415.6)
|
|
(46.2)
|
Investing
activities
|
|
|
|
|
Purchase of property,
plant and equipment
|
|
(28.7)
|
|
(22.9)
|
Net cash used in
investing activities
|
|
(28.7)
|
|
(22.9)
|
Financing
activities
|
|
|
|
|
Borrowings under
revolving credit facility
|
|
-
|
|
0.7
|
Principal payments of
debt
|
|
(16.5)
|
|
(15.5)
|
Taxes paid related to
net share settlement awards
|
|
(4.5)
|
|
(4.8)
|
Debt issuance and
financing costs
|
|
(0.5)
|
|
(0.5)
|
Net cash used in
financing activities
|
|
(21.5)
|
|
(20.1)
|
Effect of exchange rate
changes on cash and cash equivalents
|
|
(0.3)
|
|
0.9
|
Net decrease in cash,
cash equivalents, and restricted cash for the period
|
|
(466.1)
|
|
(88.3)
|
Cash, cash equivalents,
and restricted cash, beginning of period
|
|
845.9
|
|
678.4
|
Cash, cash equivalents,
and restricted cash, end of period
|
|
$
379.8
|
|
$
590.1
|
|
|
|
|
|
Reconciliation of
Cash, Cash Equivalents, and Restricted Cash:
|
|
|
|
|
|
|
For the Three Months
Ended
|
|
|
March 28,
2024
|
|
March 30,
2023
|
Cash and cash
equivalents, beginning of the period
|
|
$
823.5
|
|
$
658.6
|
Restricted cash,
short-term, beginning of the period
|
|
0.1
|
|
0.2
|
Restricted cash,
long-term, beginning of the period
|
|
22.3
|
|
19.6
|
Cash, cash equivalents,
and restricted cash, beginning of the period
|
|
$
845.9
|
|
$
678.4
|
|
|
|
|
|
Cash and cash
equivalents, end of the period
|
|
$
352.0
|
|
$
567.8
|
Restricted cash,
short-term, end of the period
|
|
0.1
|
|
0.2
|
Restricted cash,
long-term, end of the period
|
|
27.7
|
|
22.1
|
Cash, cash equivalents,
and restricted cash, end of the period
|
|
$
379.8
|
|
$
590.1
|
Appendix
In addition to reporting our financial
information using U.S. Generally Accepted Accounting Principles
(GAAP), management believes that certain non-GAAP measures (which
are indicated by * in this press release) provide investors with
important perspectives into the company's ongoing business
performance. The non-GAAP measures we use in this press release are
(i) adjusted diluted earnings (loss) per share and (ii) free cash
flow, which are described further below. The Company does not
intend for the information to be considered in isolation or as a
substitute for the related GAAP measures. Other companies may
define and calculate the measures differently than we do, limiting
the usefulness of the measures for comparison with other
companies.
Adjusted Diluted Earnings (Loss) Per Share. To provide
additional transparency, we have disclosed non-GAAP adjusted
diluted earnings (loss) per share (Adjusted EPS). This metric
excludes various items that are not considered to be directly
related to our operating performance. Management uses Adjusted EPS
as a measure of business performance, and we believe this
information is useful in providing period-to-period comparisons of
our results. The most comparable GAAP measure is diluted earnings
(loss) per share.
Free Cash Flow. Free Cash Flow is defined as GAAP cash provided
by (used in) operating activities (also referred to herein as "cash
from operations"), less capital expenditures for property, plant
and equipment. Management believes Free Cash Flow provides
investors with an important perspective on the cash available for
stockholders, debt repayments including capital leases, and
acquisitions after making the capital investments required to
support ongoing business operations and long-term value creation.
Free Cash Flow does not represent the residual cash flow available
for discretionary expenditures as it excludes certain mandatory
expenditures. The most comparable GAAP measure is cash provided by
(used in) operating activities. Management uses Free Cash Flow as a
measure to assess both business performance and overall
liquidity.
The tables below provide reconciliations between the GAAP and
non-GAAP measures.
Adjusted
EPS
|
|
|
|
|
|
|
|
|
|
1st
Quarter
|
|
|
|
2024
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Diluted Loss
Per Share
|
|
($5.31)
|
|
($2.68)
|
|
Deferred Tax Asset Valuation Allowance (a)
|
|
1.38
|
|
0.50
|
|
Pension Termination Charges (b)
|
|
-
|
|
0.49
|
|
Adjusted Diluted
Loss Per Share
|
|
($3.93)
|
|
($1.69)
|
|
|
|
|
|
|
|
Diluted Shares (in
millions)
|
|
116.2
|
|
104.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Represents the deferred tax asset valuation
allowance (included in Income tax provision)
|
|
|
(b) Represents the net non-cash charges related to
the termination of the U.S. Pension
Value Plan A (included in Other
income)
|
|
|
|
|
|
|
Free Cash
Flow
|
|
|
|
|
|
|
1st
Quarter
|
|
($ in
millions)
|
2024
|
|
2023
|
|
|
|
|
|
|
Cash from
Operations
|
($416)
|
|
($46)
|
|
Capital
Expenditures
|
(29)
|
|
(23)
|
|
Free Cash
Flow
|
($444)
|
|
($69)
|
|
|
|
|
|
|
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SOURCE Spirit AeroSystems Holdings, Inc.