Goodrich Announces 75 Percent Increase in First Quarter 2011 Net Income per Diluted Share, 12 Percent Increase in Sales and Increases Outlook for Full Year 2011 Net Income per Diluted Share to $5.40 - $5.55

CHARLOTTE, N.C., April 21, 2011 /PRNewswire via COMTEX/ —

First quarter 2011 net income per diluted share of $1.52 increased 75 percent compared to first quarter 2010 net income per diluted share of $0.87.

First quarter 2011 sales grew 12 percent to $1,896 million, compared to first quarter 2010 sales of $1,695 million.

First quarter 2011 commercial aftermarket sales grew 12 percent, compared to first quarter 2010.
Full year 2011 outlook for net income per diluted share increased to $5.40 – $5.55, compared to the prior outlook of $5.30 – $5.45. Sales are now expected to be about $7.8 billion, compared to the prior outlook of $7.7 – $7.8 billion. The outlook for net cash provided by operating activities, minus capital expenditures, is unchanged and is expected to exceed 85 percent of net income.

Goodrich Corporation (NYSE: GR) announced results today for the first quarter 2011, and updated its full year outlook for 2011.

Commenting on the company’s performance and its outlook, Marshall Larsen, Chairman, President and Chief Executive Officer said, "We were very pleased with our first quarter results. We saw excellent growth in all of our major market channels, which we expect will continue through the balance of 2011. Our commercial aftermarket sales growth of 12 percent was significantly greater than the growth in airline capacity and slightly higher than our expectations, and helped solidify our view that 2011 will be a strong growth year for this market channel, despite high oil prices and the tragic events in Japan.

“Our defense and space sales grew organically at a double digit rate. We believe that our presence in attractive, high growth markets such as ISR, helicopters and precision munitions will enable Goodrich to grow our defense and space sales faster than global defense budgets for the next several years.

“As expected, our large commercial airplane OE market also experienced good growth during the first quarter. The production rate increases previously announced by the manufacturers are now beginning to translate to sales for the supply chain. Due to our high-value content and our market share gains on the newest airplanes, we expect our sales for this market channel to grow much faster than total deliveries for many years to come.

“For the full year of 2011, we now expect sales to be about $7.8 billion, a growth rate of about 12 percent compared to 2010, excluding the sales associated with the announced acquisition of Microtecnica.

“Net income per diluted share is expected to grow significantly faster than sales as we continue to demonstrate the success of our continuous improvement initiatives. Our strong performance in sales growth and margins has allowed us to increase our net income per diluted share outlook for 2011. Our revised outlook of $5.40 – $5.55 per diluted share, compared to a prior outlook of $5.30 – $5.45, indicates a growth rate of 20 – 23 percent in net income per diluted share for 2011, compared to 2010.”

First Quarter 2011 Results

Goodrich reported first quarter 2011 net income of $195 million, or $1.52 per diluted share, on sales of $1,896 million. In the first quarter 2010, the company reported net income of $111 million, or $0.87 per diluted share, on sales of $1,695 million.

For the first quarter 2011 compared with the first quarter 2010, Goodrich sales changes by market channel were as follows:

Large commercial airplane original equipment sales increased by 6 percent, Regional, business and general aviation airplane original equipment sales increased by 55 percent, including sales associated with the recent acquisition of DeCrane’s cabin management assets, Large commercial, regional, business and general aviation airplane aftermarket sales increased by 12 percent. Sequentially, commercial aftermarket sales were 9 percent higher than the fourth quarter 2010, and Defense and space sales of both original equipment and aftermarket products and services increased by 10 percent.

The increase in net income is attributable primarily to the impact of sales growth in all of the company’s major market channels, strong operational performance, continued success on cost containment initiatives, a lower effective tax rate and favorable changes in estimates for certain long-term contracts. Several of these factors are noted below:

The Company reported an effective tax rate of 24.4 percent for the first quarter 2011, compared to an effective tax rate of 37.9 percent during the first quarter 2010. The first quarter 2011 tax rate includes a previously announced benefit of approximately $21 million, or $0.17 per diluted share related to a tax settlement. There was no similar benefit during the first quarter 2010. The first quarter 2010 results included additional tax expense of $10 million, or $0.08 per diluted share for the U.S. health care reform legislation. There were no similar expenses in the first quarter 2011.

The first quarter 2011 results included pre-tax expense of $22 million, $14 million after-tax or $0.11 per diluted share, related to world-wide pension plan expense, compared to pre-tax pension expense of $43 million, $27 million after-tax or $0.21 per diluted share, recorded during the first quarter 2010.

The first quarter 2011 results included higher pre-tax income of $5 million, $3 million after-tax or $0.02 per diluted share, related to the changes in estimates for certain long-term contracts primarily in our aerostructures and aircraft wheels and brakes businesses, compared to the first quarter 2010. Total pre-tax changes in estimates for the first quarter 2011 were $21 million. Changes in both periods were primarily related to favorable cost and operational performance, changes in volume expectations and sales pricing improvements and finalization of contract terms on current and/or follow-on contracts.

Net cash provided by operating activities, minus capital expenditures, for the first quarter 2011 was $61 million, an increase of $52 million from the same period in 2010. The higher cash flow was due primarily to lower pension contributions and tax refunds received in the first quarter 2011, partially offset by increased working capital. During the first quarter 2011, Goodrich contributed $69 million to its worldwide pension plans, compared to contributions of $105 million during the first quarter 2010. Capital expenditures were $36 million in the first quarter 2011, compared with capital expenditures of $21 million in the first quarter 2010.

Business Highlights

On April 1, 2011, Goodrich announced that it had signed an agreement to acquire Microtecnica, a leading provider of flight control actuation systems for helicopter, regional and business aircraft, missile actuation, and aircraft thermal and environmental control systems. The transaction is expected to close during the second quarter of 2011. The acquisition complements the existing flight control actuation business and strengthens Goodrich’s position in the helicopter market. The acquisition is expected to be slightly accretive in 2011 and solidly accretive thereafter. Because the acquisition has not been completed, the current sales outlook for 2011 does not yet include the expected impact of this acquisition.

On March 29, 2011, Goodrich announced that it was awarded a contract to deliver two upgraded Senior Year Electro-Optical Reconnaissance Sensors (SYERS) to the United States Air Force for use on the U-2 platform. These upgrades, known as SYERS-2A, will enhance the U-2 functionality by adding extra multi-spectral imaging capability to the platform, providing significantly more utility in discerning imagery.

On March 9, 2011, Goodrich announced that it was selected by Airbus to provide the nacelle system for the Pratt & Whitney PurePower® 1100G engine, one of the engine options on the Airbus A320neo (new engine option) airplane. Under the agreement, Goodrich will design the nacelle and thrust reversers and will perform engine build up for the PurePower propulsion system. The new Pratt & Whitney PurePower 1100G engine is expected to provide greater fuel efficiency, burning about 15 percent less fuel than current engines. In addition, the Goodrich nacelle will include a variable area nozzle (VAN) for the PurePower engine. Goodrich’s VAN is a variable duct that manipulates the flow of fan air from the nacelle and will contribute to overall improvements in fuel efficiency.

On March 3, 2011, Goodrich announced that it had completed the certification process for the Boeing 787 electric braking system. The achievement followed a comprehensive development and qualification program involving multiple Goodrich business units and close collaboration with Boeing. The braking system incorporates the latest iteration of Goodrich’s proprietary DURACARB carbon heat sink material which provides exceptional brake performance and up to 35% better brake life than competing carbon friction materials.

On February 7, 2011, Goodrich announced that it received a follow-on contract from Defense Logistics Agency Aviation to supply over 1,600 carbon brakes and over 1,400 boltless wheels for the U.S. Air Force C-130 aircraft fleet. Deliveries are expected to begin in October 2011. Goodrich’s C-130 wheel and brake retrofit features DURACARB carbon brakes which provide lighter weight, longer life, higher performance and lower cost of ownership compared to steel braking systems.
2011 Outlook

The company’s 2011 sales outlook is based on market assumptions for each of its major market channels. The current market assumptions for the full year 2011, compared with the full year 2010 results, include:

Large commercial airplane original equipment sales are expected to increase by about 15 percent. This outlook assumes all announced production rate increases are implemented, and Boeing 787 and 747-8 deliveries are consistent with the latest schedule announced by Boeing, Regional, business and general aviation airplane original equipment sales are expected to grow by about 30 – 35 percent, including incremental sales associated with the DeCrane acquisition, Large commercial, regional, business and general aviation airplane aftermarket sales are expected to increase by about 7 – 9 percent, and
Defense and space sales of both original equipment and aftermarket products and services are expected to increase by about 8 – 10 percent.

The Company’s full year 2011 sales expectations are now approximately $7.8 billion, representing growth of about 12 percent from the full year 2010 results. Organic growth is expected to be approximately 10 percent. The outlook for 2011 net income per diluted share has been increased to a range of $5.40 – $5.55, an increase of 20 – 23 percent compared to 2010 net income per diluted share. The prior outlook for net income per diluted share was $5.30 – $5.45.

The sales and net income per diluted share outlook for 2011 does not include the impact of the Microtecnica acquisition, or any other potential acquisitions or divestitures. Potential restructuring activities that have not yet been approved are not included in the current outlook for net income per diluted share. The 2011 outlook includes, among other factors:

Lower worldwide pre-tax pension expense of approximately $74 million, $46 million after-tax or $0.37 per diluted share. For 2011, the company expects total worldwide pre-tax pension expense of approximately $88 million, compared to $162 million in 2010.

A full-year effective tax rate of approximately 30 percent for 2011, which is unchanged from our previous outlook. On average, Goodrich expects an effective tax rate of approximately 32 percent for the remaining three quarters of 2011.

For 2011, Goodrich continues to expect net cash provided by operating activities, minus capital expenditures, to exceed 85 percent of net income. This outlook reflects ongoing investments to support the current schedule for the Boeing 787 and Airbus A350 XWB airplane programs, fixed assets and working capital to support announced production rate increases associated with the Boeing 737 and Airbus A320 airplanes, and competitive cost country manufacturing and productivity initiatives that are expected to enhance margins over the near and long term. The company expects capital expenditures for 2011 to be in a range of $300 – $350 million. Pre-tax worldwide pension plan contributions are expected to be approximately $100 million.