B/E REPORTS 31% INCREASE IN Q1 EARNINGS PER SHARE
Business Wire
June 24, 1999, 4:52 a.m. PT
Business Editors
WELLINGTON, Fla.--(BUSINESS WIRE)--June 24, 1999--
Operating Margin Expands by 200 Basis Points
EPS of 46 Cents vs. 35 Cents in Prior Year
B/E Aerospace, Inc. (Nasdaq/NMS:BEAV) today reported financial
results for the first quarter of fiscal 2000 ended May 29, 1999.
Net sales were $185.0 million for the first quarter, a 32 percent
increase compared to the first quarter of fiscal 1999. For
comparability purposes, the Company is providing pro forma financial
information for the first quarter of fiscal 1999 ended May 30, 1998,
giving effect to each of the acquisitions and dispositions as if they
had occurred at the beginning of the prior year, and excluding the
effect of transaction related costs. On a pro forma basis, year over
year revenue growth was 14.0 percent. Gross profit for the current
quarter was $66.6 million, an increase of 28 percent over the prior
year. B/E's gross margin during the first quarter of fiscal 2000 was
36.0 percent as compared to 37.1 percent in the prior period.
Operating earnings were $27.6 million for the first quarter of
fiscal 2000, an increase of 54 percent, or $9.7 million, over the
prior year's operating earnings before acquisition related expenses.
Operating earnings increased by $5.5 million in the first quarter of
fiscal 2000, representing a 24.6 percent increase as compared to pro
forma operating earnings in the prior year. B/E's operating margin
improved to 14.9 percent of sales for the first quarter of fiscal 2000
as compared to 13.7 percent of pro forma sales in the first quarter a
year ago.
Net earnings for the first quarter of fiscal 2000 were $11.4
million and earnings per share were 46 cents (diluted), as compared to
a net loss and net loss per share of ($23.9) million and ($1.03) per
share, respectively, in the prior year. Net earnings and earnings per
share for the first quarter increased 36 percent and 31 percent,
respectively, over earnings of $8.4 million and earnings per share of
35 cents (before acquisition related expenses) in the first quarter of
fiscal 1999. Net earnings and earnings per share (diluted) for the
quarter were 35 percent greater than pro forma results for the first
quarter of fiscal 1999. Details of the Company's reported results for
the first quarter are shown in the financial table accompanying this
release.
Gross Margins, Earnings Outlook
Vice Chairman and Chief Executive Officer Robert J. Khoury
stated, "Our acquisitions in fiscal year 1999 made a significant
contribution to B/E's strong sales and earnings growth in the first
quarter. On a pro forma basis, sales were up 14 percent in the first
quarter of fiscal 2000 as compared to the first quarter a year ago
adjusted for acquisitions and dispositions.
"Last year's acquisitions substantially strengthened the Company
by improving our already solid competitive position, expanding our
product offerings and adding new platforms for growth. As announced
previously, we are completing the integration of these new businesses
by consolidating facilities, rationalizing our workforce, and
implementing new information technology tools. As we also previously
announced, we experienced some pressure on our gross margin during the
first quarter as a result of the learning curve inefficiencies
associated with the large number of new products we are introducing
for the first time and the implementation of our new integrated
information technology system. We expect the Company's margins to
begin to expand as we achieve planned efficiencies for our new product
introductions, become more proficient on our new management
information system and rationalize our facilities and personnel.
"Looking ahead, we are confident in B/E's ability to generate
double-digit annual earnings growth. We believe that this growth in
earnings will be driven by the strength of the aftermarket for
aircraft cabin interiors and by the expansion of profit margins, which
we expect from our restructuring activities."
Revenue Growth from Expanding Installed Base
Mr. Khoury continued, "We expect our revenues to continue to grow
due to the strong demand for aircraft cabin interior refurbishment,
upgrade and reconfiguration programs, and the expansion of the
commercial and business jet fleets. Industry sources indicate that
there are roughly 11,000 aircraft in the commercial fleet. The
worldwide fleet is refurbished at the rate of about 1,500 aircraft per
year, as compared to average annual new aircraft deliveries of about
700 aircraft. As the worldwide fleet grows each year, the number of
aircraft that must be refurbished each year increases as well."
"The aftermarket is expected to provide about 60 percent of B/E's
revenues during our current fiscal year, up from 53 percent in fiscal
1994," Mr. Khoury concluded. "Recent industry forecasts indicate that
the worldwide jet fleet will expand by about 6,000 passenger aircraft,
or 55 percent, within ten years. Based on such growth in the fleet, we
expect that the growth in our installed base of products, valued at
approximately $5.4 billion, based on current prices, will increase to
well over $9 billion. At this level, we expect that our aftermarket
revenues will exceed 70 percent of our total revenues."
B/E Aerospace, Inc. is the world's leading manufacturer of cabin
interior products, serving virtually all the world's airlines and
aircraft manufacturers. B/E designs, develops, manufactures, sells and
services a broad line of passenger cabin interior products for both
commercial and general aviation aircraft and provides interior design,
reconfiguration and conversion services to its customers throughout
the world. Information on B/E is available on the World Wide Web at
www.beaerospace.com.
This press release contains forward-looking statements which
involve risks and uncertainties. The Company's actual experience may
differ materially from that anticipated in such statements. Factors
that might cause such a difference include, but are not limited to,
those discussed in the Company's filings with the Securities and
Exchange Commission, including its most recent proxy statement and
Form 10-K, and in "Risk Factors" in both its amended Form S-3 filed on
December 28, 1998, relating to the registration of the Company's
common stock, and S-4 filed January 13, 1999, relating to the
registration of the Company's senior subordinated notes, as well as
future events that may have the effect of reducing the Company's
available operating income and available cash balances, such as
unexpected operating losses or delays in the integration of the
Company's acquired businesses, conditions in the airline industry,
customer delivery requirements, new or expected refurbishments, cash
expenditures related to possible future acquisitions, delays in the
implementation of the Company's integrated information management
system, labor disputes involving the Company, its significant
customers or airframe manufacturers, delays or inefficiencies in the
introduction of new products or fluctuations in currency exchange
rates.
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*T
B/E Aerospace, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
Three Months Ended
May 29, May 30, May 30,
1999 1998 1998
(Pro forma)
----------- ----------- -----------
Net sales $ 185,032 $ 139,991 $ 162,360
Cost of sales 118,445 88,111 102,234
----------- ----------- -----------
Gross profit 66,587 51,880 60,126
Percent 36.0% 37.1% 37.0%
OPERATING EXPENSES
Selling, general
and administrative 22,028 17,999 21,923
Research, development
and engineering 11,245 11,972 10,347
Amortization 5,696 4,033 5,696
Acquisition related
expenses -- 32,253 --
----------- ----------- -----------
Total Operating
Expenses 38,969 66,257 37,966
----------- ----------- -----------
Operating earnings
(loss) 27,618 (14,377) 22,160
Percent 14.9% nm 13.7%
Equity in losses of
unconsolidated
subsidiary 727 -- 505
Interest expense 12,622 7,782 11,462
----------- ----------- -----------
Earnings (loss)
before income
taxes 14,269 (22,159) 10,193
Income taxes 2,854 1,716 1,733
=========== =========== ===========
Net earnings
(loss) $ 11,415 ($ 23,875) $ 8,460
Basic earnings
(loss) per share $ .46 ($1.03) $ .35
=========== =========== ===========
Weighted average
common shares 24,631 23,070 24,038
=========== =========== ===========
Diluted net
earnings (loss)
per share $ .46 ($1.03) $ .34
=========== =========== ===========
Weighted average
common and
potentially
dilutive common
shares 24,900 23,070 25,008
=========== =========== =========== |
