Spirit AeroSystems Holdings, Inc. Reports First Quarter 2013 Financial Results; Reports Revenues of $1.442 billion and EPS of $0.57

WICHITA, Kan., May 2, 2013 /PRNewswire/ — Spirit AeroSystems Holdings, Inc. [NYSE: SPR] reported first quarter 2013 financial results reflecting continued strong demand for large commercial aircraft and strong core program operating performance. Spirit’s first quarter 2013 revenues were $1.442 billion, up 14% from $1.266 billion for the same period of 2012, driven by higher production volumes and model mix.

Operating income was $145 million, up from $122 million for the same period in 2012, driven by increased volume and productivity and efficiency on core programs, partially offset by a net pre-tax ($15) million additional forward-loss on the 787 program related to the wing.

Net income for the quarter was $81 million, or $0.57 per fully diluted share, compared to net income of $74 million, or $0.52 per fully diluted share, in the same period of 2012. The increase in current quarter income was partially offset by the negative impact of foreign currency exchange rates.

“Spirit is an important leader in commercial aerospace, as evidenced by our $36 billion backlog, market-leading products and technologies, and excellent track record on core programs,” said President and Chief Executive Officer Larry Lawson. “I am pleased to have the opportunity to lead Spirit.”

“As the first quarter demonstrates, Spirit’s performance across core programs remains strong with large commercial aircraft deliveries increasing 9 percent and deliveries across all programs increasing 11 percent over the first quarter of 2012,” Lawson continued. “With the strong core business performance, and development programs in early production phases, now is the time to engage in a comprehensive evaluation of the development programs in Tulsa, Wichita, Kinston, and St. Nazaire.”

“Going forward, our goals are to focus on core program growth, including investing in core product innovation, improving costs on development programs, successfully executing the 787 and A350, and creating value from customer diversification as we position Spirit to benefit significantly from the record demand for our products,” Lawson added.

“Led by a competitive and demanding leadership team, we will accomplish these goals through outstanding program execution, a culture of sustained operational excellence, and a focus on long-term profitable growth,” Lawson concluded.

Spirit’s backlog at the end of the first quarter of 2013 was approximately $36 billion. Spirit calculates its backlog based on current contractual prices for products and volumes from the published firm order backlogs of Airbus and Boeing, along with firm orders from other customers.

Spirit updated its contract profitability estimates during the first quarter of 2013, resulting in a net pre-tax $20 million, or $0.10 per share, favorable cumulative catch-up adjustment driven by core program productivity and efficiency.

The company also realized a pre-tax ($15) million, or ($0.07) per share, additional forward-loss on the 787 related to manufacturing cost growth on the wing.

In comparison, the first quarter of 2012 operating income included a pre-tax ($11) million forward-loss on the G280 program and a pre-tax ($3) million forward-loss on the 747-8 wing program.

Cash flow from operations was a $45 million use of cash for the first quarter of 2013, compared to a $12 million source of cash for the first quarter of 2012. The same period of 2012 included customer advance payments of $150 million associated with a customer agreement on the A350 XWB fuselage program.

Adjusting for the customer advance payment of $150 million in the first quarter of 2012, Spirit experienced a $93 million improvement in cash flow from operations in the first quarter of 2013, compared to the same period of 2012 due to the timing of accounts receivable and accounts payable in the first quarter of 2013. (Table 2)

Cash balances at the end of the quarter were $313 million and debt balances were $1,173 million. At the end of the first quarter of 2013, the company’s $650 million credit facility remained undrawn.

The company’s credit rating remained unchanged at the end of the first quarter 2013 with a BB rating, stable outlook by Standard and Poor’s and a Ba2 rating, negative outlook by Moody Investor Services.

Financial Outlook

Spirit most recently issued financial guidance for the full-year 2013 on February 12, 2013. The company’s expectations with respect to its core programs continue to be consistent with that guidance. Coincident with the arrival of Mr. Larry Lawson, Spirit’s newly named Chief Executive Officer, Spirit will not be issuing further financial guidance at this time, pending the completion of a comprehensive strategic and financial review of the company’s development programs in Tulsa, Wichita, Kinston, and St. Nazaire. The company expects to report its progress on these initiatives in the coming quarters.