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8-K - FORM 8-K - BREEZE-EASTERN CORP | y89429e8vk.htm |
Exhibit 99.1
PRESS RELEASE
FOR IMMEDIATE DISTRIBUTION
Contact:
|
Mike Harlan President and CEO Phone: 973-602-1001 |
BREEZE-EASTERN REPORTS FISCAL 2011 THIRD QUARTER
AND YEAR TO DATE RESULTS
AND YEAR TO DATE RESULTS
Whippany, New Jersey February 3, 2011 Breeze-Eastern Corporation (NYSE Amex: BZC) today
reported its Fiscal 2011 third quarter financial results.
| Net sales: $19.6 million, versus $21.2 million for the Fiscal 2010 third quarter. |
| Net income: $1.0 million or $0.10 per diluted share, versus $1.9 million, or $0.20 per diluted share, in the Fiscal 2010 third quarter. |
| Adjusted EBITDA, a Non-GAAP Financial Measure described in this press release: $2.3 million, versus $3.9 million in the Fiscal 2010thirdquarter. |
| Total debt: $13.1 million, $2.5 million lower than three months ago, and $8.4 million lower than a year ago. |
| Bookings: $15.8 million, versus $11.9 million in the Fiscal 2010 third quarter. The book-to-bill ratio for the Fiscal 2011 third quarter was 0.8. |
For the Fiscal first nine months, the financial results follow.
| Net sales: $51.3 million, versus $50.9 million for the Fiscal 2010 first nine months. |
| Net income: $2.2 million, or $0.23 per diluted share, versus $2.9 million, or $0.31 per diluted share, in the Fiscal 2010 first nine months. |
| Adjusted EBITDA, a Non-GAAP Financial Measure described in this press release: $6.2 million, versus $7.1 million in the Fiscal 2010 first nine months. |
| Bookings: $53.9 million, versus $46.5 million in the Fiscal 2010 first nine months. The book-to-bill ratio for the Fiscal 2011 first nine months was 1.1. |
Mike Harlan, President and Chief Executive Officer, said, Our fiscal third quarter financial
performance was impacted by a combination of factors. While our backlog has continued to be
strong, our third quarter shipments were reduced by complications in implementing an information
technology project and by supply chain quality issues. During this quarter, we also had higher
legal costs due to the extended labor negotiations and transition costs from ongoing information
technology projects; the combination of lower sales and higher SG&A costs resulted in lower
earnings per share and Adjusted EBITDA for our third quarter compared with the same quarter last
year. These third quarter results also made our nine month cumulative net income and Adjusted
EBITDA lower than the same period last fiscal year. After comparatively good first half earnings
and Adjusted EBITDA, we are disappointed to have to report these results.
35 Melanie Lane Whippany New Jersey 07981
Tel: (973) 602-1001 Fax: (973) 739-9333 www.breeze-eastern.com
Tel: (973) 602-1001 Fax: (973) 739-9333 www.breeze-eastern.com
Breeze-Eastern Corporation February 3, 2011
Fiscal 2011 Third Quarter Earnings Release |
Page 2 of 5 |
Mr. Harlan continued, On the other hand, our bookings continue to be higher than last year,
benefiting from higher U.S. Government spare parts orders, and our balance sheet and cash flow
continue to be strong. Inventory of $18.1 million is$7.6 million lower than last year, and total
debt of $13.1 million is $8.4 million lower than a year ago. Our debt net of cash is now less than
$10 million, down substantially from previously being over $60 million. Our significantly-reduced
debt reflects our strong cash flow as we made three debt principal pre-payments in the quarter.
Mr. Harlan continued, Looking ahead, we expect strong shipments over the final quarter of our
Fiscal 2011 and continued year/year sales growth in our Fiscal 2012, with some initial production
revenues from our new product development programs. While we will continue to invest heavily in
engineering in Fiscal 2012, we are making significant progress on our new product development
programs in Fiscal 2011 and will complete several of these programs in Fiscal 2012. Over the next
several years, we expect these programs to grow to more than $20 million of additional sales per
year. Over time, we expect our engineering costs to return to more traditional levels and we
expect the combination of top line growth and SG&A reduction to support strong Adjusted EBITDA
growth in the future.
* * *
The Company will conduct a conference call at 11:00 a.m. EDT on Thursday, February 3, 2011 with the
following numbers: (866) 730-5764 or (857) 350-1588 and passcode 10200667.
* * *
Breeze-Eastern Corporation (http://www.breeze-eastern.com) is the worlds leading designer and
manufacturer of high performance lifting and pulling devices for military and civilian aircraft,
including rescue hoists, winches and cargo hooks, and weapons-lifting systems. The Company, which
employs approximately 170 people at its facilities in Whippany, New Jersey, reported sales of $69.0
million for the Fiscal year ended March 31, 2010.
NonGAAP Financial Measures
In addition to disclosing financial results that are determined in accordance with Generally
Accepted Accounting Principles (GAAP), the Company also discloses Adjusted EBITDA (earnings
before interest, taxes, depreciation and amortization, other income/expense, loss on debt
extinguishment, and relocation expense). The Company presents Adjusted EBITDA because it considers
it an important supplemental measure of performance. Measures similar to Adjusted EBITDA are
widely used by the Company and by others in the Companys industry to evaluate performance and
valuation. The Company believes Adjusted EBITDA facilitates operating performance comparisons from
period to period and company to company by backing out potential differences caused by variations
in capital structure (affecting relative interest expense), tax positions (such as the impact on
periods or companies of changes in effective tax rates or net operating losses) and the age and
book depreciation of facilities and equipment (affecting relative depreciation expense). The
Company also presents Adjusted EBITDA because it believes it is frequently used by investors and
other interested parties as a basis for evaluating performance.
Breeze-Eastern Corporation February 3, 2011 Fiscal 2011 Third Quarter Earnings Release |
Page 3 of 5 |
Adjusted EBITDA has limitations as an analytical tool, and should not be considered in isolation or
as a substitute for analysis of the Companys results as reported under GAAP. Some of the
limitations of Adjusted EBITDA are that (i) it does not reflect the Companys cash expenditures for
capital assets, (ii) it does not reflect the significant interest expense or cash requirements
necessary to service interest or principal payments on the Companys debt, and (iii) it does not
reflect changes in, or cash requirements for, the Companys working capital. Furthermore, other
companies in the aerospace and defense industry may calculate these measures differently than the
manner presented above. Accordingly, the Company focuses primarily on its GAAP results and uses
Adjusted EBITDA only supplementally. A reconciliation of Adjusted EBITDA to net income, the most
directly comparable GAAP measure, for the three and nine months ended December 31, 2010 is shown in
the tables below.
INFORMATION ABOUT FORWARD-LOOKING STATEMENTS
This news release contains forward-looking statements within the meaning of Section 27A of the
Securities
Act of 1933 as amended, and Section 21E of the Securities Exchange Act of 1934, as amended,
regarding our future operating performance, financial results, events, trends and plans. All
statements in this news release other than statements of historical facts are forward-looking
statements. Forward-looking statements involve numerous risks and uncertainties. We have attempted
to identify any forward-looking statements by using words such as anticipates, believes,
could, expects, intends, may, should and other similar expressions. Although we believe
that the expectations reflected in all of our forward-looking statements are reasonable, we can
give no assurance that such expectations will prove to be correct. Such statements are not
guarantees of future performance or events and are subject to known and unknown risks and
uncertainties that could cause our actual results, events or financial positions to differ
materially from those included within the forward-looking statements. Such factors include, but are
not limited to competition from other companies; changes in applicable laws, rules, and regulations
affecting the Company in the locations in which it conducts its business; interest rate trends; a
decrease in the United States government defense spending, changes in spending allocation or the
termination, postponement, or failure to fund one or more significant contracts by the United
States government or other customers; changes in our sales strategy and product development plans;
changes in the marketplace; developments in environmental proceedings that we are involved in;
continued services of our executive management team; status of labor relations; competitive pricing
pressures; market acceptance of our products under development; delays in the development of
products; determination by us to dispose of or acquire additional assets; general industry and
economic conditions; events impacting the U.S. and world financial markets and economies; and those
specific risks disclosed in our Annual Report on Form 10-K for the fiscal year ended March 31,
2010, and other filings with the Securities and Exchange Commission. We undertake no obligation to
update publicly any forward-looking statements, whether as a result of new information or future
events.
Breeze-Eastern Corporation February 3, 2011 | ||
Fiscal 2011 Third Quarter Earnings Release | Page 4 of 5 |
BREEZE-EASTERN CORPORATION
STATEMENTS OF CONSOLIDATED OPERATIONS
(In Thousands of Dollars Except Share Data)
STATEMENTS OF CONSOLIDATED OPERATIONS
(In Thousands of Dollars Except Share Data)
Three Months Ended | Nine Months Ended | |||||||||||||||
12/31/10 | 12/27/09 | 12/31/10 | 12/27/09 | |||||||||||||
Net sales |
$ | 19,614 | $ | 21,168 | $ | 51,260 | $ | 50,938 | ||||||||
Cost of sales |
12,339 | 13,159 | 31,676 | 31,732 | ||||||||||||
Gross profit |
7,275 | 8,009 | 19,584 | 19,206 | ||||||||||||
Selling, general, and administrative expenses |
5,434 | 4,522 | 14,880 | 13,194 | ||||||||||||
Relocation expense |
| 14 | 211 | 203 | ||||||||||||
Operating income |
1,841 | 3,473 | 4,493 | 5,809 | ||||||||||||
Interest expense |
167 | 213 | 550 | 676 | ||||||||||||
Other expense-net |
31 | 58 | 176 | 186 | ||||||||||||
Income before income taxes |
1,643 | 3,202 | 3,767 | 4,947 | ||||||||||||
Provision for income taxes |
690 | 1,345 | 1,582 | 2,078 | ||||||||||||
Net income |
$ | 953 | $ | 1,857 | $ | 2,185 | $ | 2,869 | ||||||||
Basic earnings per share: |
$ | 0.10 | $ | 0.20 | $ | 0.23 | $ | 0.31 | ||||||||
Diluted earnings per share: |
$ | 0.10 | $ | 0.20 | $ | 0.23 | $ | 0.31 | ||||||||
Weighted average basic shares |
9,429,000 | 9,400,000 | 9,409,000 | 9,385,000 | ||||||||||||
Weighted average diluted shares |
9,464,000 | 9,404,000 | 9,430,000 | 9,393,000 |
BALANCE SHEET INFORMATION
(In Thousands of Dollars)
(In Thousands of Dollars)
12/31/10 | 3/31/10 | |||||||
Current assets |
$ | 42,400 | $ | 39,851 | ||||
Fixed assets net |
8,410 | 9,575 | ||||||
Other assets |
26,087 | 26,682 | ||||||
Total assets |
$ | 76,897 | $ | 76,108 | ||||
Current portion of long-term debt
and short term borrowings |
$ | 822 | $ | 3,286 | ||||
Other current liabilities |
14,413 | 11,377 | ||||||
Total current liabilities |
15,235 | 14,663 | ||||||
Long-term debt |
12,321 | 14,786 | ||||||
Other non-current liabilities |
18,946 | 18,839 | ||||||
Stockholders equity |
30,395 | 27,820 | ||||||
Total liabilities and stockholders equity |
$ | 76,897 | $ | 76,108 | ||||
Breeze-Eastern Corporation February 3, 2011 Fiscal 2011 Third Quarter Earnings Release |
Page 5 of 5 |
Reconciliation of Reported Income to Adjusted EBITDA
(In Thousands of Dollars)
(In Thousands of Dollars)
Three Months Ended | Nine Months Ended | |||||||||||||||
12/31/10 | 12/27/09 | 12/31/10 | 12/27/09 | |||||||||||||
Net sales |
$ | 19,614 | $ | 21,168 | $ | 51,260 | $ | 50,938 | ||||||||
Cost of sales |
12,339 | 13,159 | 31,676 | 31,732 | ||||||||||||
Gross Profit |
7,275 | 8,009 | 19,584 | 19,206 | ||||||||||||
Selling, general and administrative expenses |
5,434 | 4,522 | 14,880 | 13,194 | ||||||||||||
Relocation expense |
| 14 | 211 | 203 | ||||||||||||
Operating income |
1,841 | 3,473 | 4,493 | 5,809 | ||||||||||||
Add back: Depreciation and amortization |
472 | 385 | 1,470 | 1,125 | ||||||||||||
Relocation expense |
| 14 | 211 | 203 | ||||||||||||
Adjusted EBITDA |
$ | 2,313 | $ | 3,872 | $ | 6,174 | $ | 7,137 | ||||||||
Net income |
$ | 953 | $ | 1,857 | $ | 2,185 | $ | 2,869 | ||||||||
Provision for income taxes |
690 | 1,345 | 1,582 | 2,078 | ||||||||||||
Depreciation and amortization |
472 | 385 | 1,470 | 1,125 | ||||||||||||
Relocation expense |
| 14 | 211 | 203 | ||||||||||||
Interest expense |
167 | 213 | 550 | 676 | ||||||||||||
Other expense-net |
31 | 58 | 176 | 186 | ||||||||||||
Adjusted EBITDA |
$ | 2,313 | $ | 3,872 | $ | 6,174 | $ | 7,137 | ||||||||
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