Spirit AeroSystems Holdings, Inc. Reports First Quarter 2009 Financial Results; Revenue and Earnings Impacted By Machinists' Strike at Boeing



    
    - First quarter 2009 Revenues of $887 million; Operating Margins of 11
percent

    
    - First quarter 2009 Fully Diluted EPS of $0.45 per share; Includes
($0.18) per share of strike impact as a result of lower deliveries
    

    - Cash and Cash Equivalents were $116 million

    - Total backlog of approximately $29.6 billion

    
    WICHITA, Kan., April 30 /PRNewswire-FirstCall/ -- Spirit AeroSystems
Holdings, Inc. (NYSE:   SPR) reported first quarter financial results reflecting
solid operating performance as the company returned to full-rate production by
the end of the quarter following the International Association of Machinists
and Aerospace Workers (IAM) strike at The Boeing Company in the third and
fourth quarters of 2008.
    

    
    Spirit's first quarter 2009 revenues were $887 million and operating
income was $98 million, as the impact from the Machinists' strike at Boeing
carried over into the first quarter of 2009, resulting in reduced unit
delivery volumes, revenues, and earnings compared to the first quarter of
2008. (Table 1)
    

    

    
    Table 1. Summary Financial Results
                                                    1st Quarter
                                                   ------------
    ($ in Millions, except per share data)         2009    2008       Change
    ---------------------------------------        ----    ----       ------
    

    
    Revenues                                       $887  $1,036        (14%)
    Operating Income                                $98    $130        (25%)
    Operating Income as a % of Revenues            11.0%   12.6%  (160) BPS
    Net Income                                      $63     $85        (26%)
    Net Income as a % of Revenues                   7.1%    8.2%  (110) BPS
    Earnings per Share (Fully diluted)            $0.45   $0.61        (26%)
    Fully Diluted Weighted Avg Share Count
    (Millions)                                    139.9   139.6

    
    Net income for the first quarter of 2009 was $63 million, or $0.45 per
fully diluted share, compared to $85 million, or $0.61 per fully diluted
share, for the same period in 2008.
    

    
    During the first quarter of 2009, Spirit gradually returned to full-rate
production following a Machinists' strike at The Boeing Company.  Spirit
continued to utilize a reduced work week schedule early in the first quarter
and returned to full work weeks as the quarter progressed.  As a result, first
quarter 2009 ship set deliveries to Boeing were 30 units below pre-strike
delivery levels, resulting in a revenue reduction of $256 million and a
reduction in earnings per share of $0.18.
    

    
    "The first quarter results reflect solid operating performance as we
managed through the residual impact of the Machinists' strike at Boeing," said
President and Chief Executive Officer Jeff Turner.  "Our team has done an
outstanding job of adjusting to the challenges posed by the Machinists'
strike.  Those adjustments included balancing the requirements of our
customers, shareholders, employees, and communities, while staying focused and
maintaining the health of our business through a difficult period."
    

    
    "Looking forward, we are now in a period where the end-market for our
core products is being impacted by the economic challenges facing communities
and countries around the world.  We will continue to manage resources
prudently given these uncertain times, while focusing on meeting our
commitments to our customers.  Maintaining our customer focus and managing
well through the cycle will enable Spirit to realize the long-term plan for
value creation we have established over the past four years," Turner
concluded.
    

    
    Spirit's backlog decreased by approximately 7 percent during the first
quarter of 2009, as deliveries exceeded orders and new business wins for the
first time since the company was formed in June of 2005.  The company
continues to pursue new business opportunities in commercial aerospace and
defense markets.  The company's backlog at the end of the first quarter was
$29.6 billion.  Spirit's backlog is calculated based on contractual prices for
products and volumes from the published firm order backlogs of Boeing and
Airbus, along with firm orders from other customers.
    

    
    Spirit updated its contract profitability estimates during the first
quarter of 2009, resulting in a $3 million unfavorable cumulative catch-up
adjustment.  Spirit recognized a $2 million favorable cumulative catch-up
adjustment during the first quarter of 2008.
    

    
    On April 29, 2009, Textron's Cessna Aircraft division announced the
suspension of the Citation Columbus development program because of difficult
conditions in the business jet market.  Given the program suspension and at
Cessna's direction, Spirit is suspending work immediately on its design and
build efforts in support of the Columbus program.  At the end of the first
quarter of 2009, Spirit had approximately $20 million in inventory net of
customer pre-payments associated with the Columbus development effort.  The
company is assessing the financial implications of the suspension, and expects
to complete its analysis in connection with the preparation of its financial
statements for the second quarter.  Spirit remains confident in the viability
of this program over the long-term and anticipates its restart at the
appropriate time.
    

    
    Cash flow from operations was ($149) million for the first quarter of
2009, compared to $71 million for the first quarter 2008. The company
continues to invest in new programs, reflected largely as growth in inventory
balances.  The first quarter of 2009 cash flows were also negatively impacted
by an abnormally large increase in accounts receivable, driven largely by the
residual effects of the Machinists' strike at Boeing. (Table 2)
    


    

    
    Table 2. Cash Flow and Liquidity
                                                    1st Quarter
                                                    -----------
    ($ in Millions)                              2009          2008
    -----------------                            ----          ----
    

    
    Cash Flow from Operations                   ($149)          $71
    Purchases of Property, Plant & Equipment     ($54)         ($66)
    

    
                                               April 2,   December 31,
    Liquidity                                    2009          2008
                                                 ----          ----
    

    
    Cash                                         $116          $217
    Total Debt                                   $663          $588

    
    Cash balances at the end of the first quarter of 2009 were $116 million
and debt balances were $663 million.  During the first quarter of 2009, the
company utilized its credit-line as it continued to manage through the impact
of the Machinists' strike at Boeing while executing new development programs. 
Spirit ended the quarter with $75 million borrowed from its revolving credit
facility, resulting in $575 million remaining unused.  Approximately $17
million of the credit facility is reserved for financial letters of credit.
    

    
    The company's credit ratings remained unchanged with a BB rating at
Standard & Poor's and a Ba3 rating at Moody's.
    

    2009 Outlook
    
    Spirit revenue guidance for the full-year 2009 remains unchanged and is
expected to be between $4.25 and $4.35 billion based on Boeing's 2009 delivery
guidance of 480-485 aircraft; anticipated ramp-up of 787 deliveries; 2009
expected Airbus deliveries of up to 483 aircraft; internal Spirit forecasts
for non-OEM production activity and non-Boeing and Airbus customers; and
foreign exchange rates consistent with year-end 2008 levels.
    

    
    Fully diluted earnings per share for 2009 also remains unchanged and is
expected to be between $2.15 and $2.35, largely reflecting stable production
of large commercial aircraft as compared to 2008, excluding the impact of the
strike at Boeing, and a continued focus on expense management and improved
operating efficiencies.   Financial guidance for 2009 excludes potential
financial impacts associated with the suspension of the Cessna Citation
Columbus program.
    

    
    Cash flow from operations less capital expenditures, net of customer
reimbursements, is expected to be positive in the aggregate for the full-year
2009, with capital expenditures expected to be approximately $250 million.
(Table 3)
    


    

    
    Table 3. Financial Outlook  2008 Actual       2009 Guidance       Change
    --------------------------  -----------       -------------       ------
    

    
    Revenues                   $3.8 billion  $4.25 - $4.35 billion   12% - 14%
    

    
    Earnings Per Share
     (Fully Diluted)                  $1.91          $2.15 - $2.35   13% - 23%
    

    
    Effective Tax Rate
     (% Pre-Tax Earnings)              30.9%                   ~33%
    

    
    Cash Flow From Operations  $211 million*
    

    
    Capital Expenditures       $236 million*
    

    
    Capital Reimbursement      $116 million*
    

    
    *Net positive with ~$250 million of Capital Expenditures.

    Cautionary Statement Regarding Forward-Looking Statements

    
    This press release contains "forward-looking statements." 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 "may," "will," "expect," "anticipate,"
"intend," "estimate," "believe," "project," "continue," "plan," "forecast," or
other similar words. These statements reflect management's current views with
respect to future events and are subject to risks and uncertainties, both
known and unknown. 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 forward-looking
statements include, but are not limited to: our ability to continue to grow
our business and execute our growth strategy, including the timing and
execution of new programs; the build rates of certain Boeing aircraft
including, but not limited to, the B737 program, the B747 program, the B767
program and the B777 program, and build rates of the Airbus A320 and A380
programs, which could be affected by the impact of a deep recession on
business and consumer confidence and the impact of continuing turmoil in the
global financial and credit markets; declining business jet manufacturing
rates and increasing customer cancellations as a result of the weak economy,
scarcity of aircraft financing and high levels of used business jet
inventories; the success and timely execution of key milestones such as first
flight and first delivery progression of Boeing's new B787 and Airbus' new
A350 aircraft programs, including receipt of necessary regulatory approvals;
our ability to balance the needs of customers and suppliers as we adjust to
Boeing's strike-impacted delivery schedule; our ability to enter into supply
arrangements with additional customers and the ability of all parties to
satisfy their performance requirements under existing supply contracts with
Boeing, Airbus, and other customers; any adverse impact on Boeing's and
Airbus' production of aircraft resulting from cancellations, deferrals or
reduced orders by their customers; returns on pension plan assets and impact
of future discount rate changes on pension obligations; our ability to borrow
additional funds, extend or renew our revolving credit facility, or refinance
debt; competition from original equipment manufacturers and other
aerostructures suppliers; the effect of governmental laws, such as U.S. export
control laws, the Foreign Corrupt Practices Act, environmental laws and agency
regulations, both in the U.S. and abroad; the effect of new commercial and
business aircraft development programs, and the resulting timing and resource
requirements that may be placed on us; the cost and availability of raw
materials and purchased components; our ability to recruit and retain highly
skilled employees and our relationships with the unions representing many of
our employees; spending by the U.S. and other governments on defense; the
outcome or impact of ongoing or future litigation and regulatory actions; and
our exposure to potential product liability claims. These factors are not
exhaustive, and new factors may emerge or changes to the foregoing factors may
occur that could impact our business. Except to the extent required by law, we
undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise.
    

    Appendix

    Segment Results

    Fuselage Systems

    
    Fuselage Systems segment revenues for the first quarter of 2009 were
$430.5 million, down 12.5 percent over the same period last year largely due
to fewer unit deliveries as a result of the Machinists' strike at Boeing,
partially offset by higher 787 and new non-Boeing program revenues.  Operating
margin for the first quarter of 2009 was 17.4 percent, down from 18.1 percent
in the first quarter of 2008, as an unfavorable cumulative catch-up of $2
million was realized during the first quarter of 2009, versus an immaterial
amount in the first quarter of 2008.  Higher segment Research & Development
and administrative expense as a percent of sales driven by the strike related
volume decline also contributed to lower segment margins.
    

    Propulsion Systems

    
    Propulsion Systems segment revenues for the first quarter of 2009 were
$227.4 million, down 17.2 percent over the same period last year largely due
to fewer unit deliveries as a result of the Machinists' strike at Boeing
offset by increasing Aftermarket sales.  Operating margin for the first
quarter of 2009 was 17.0 percent, up from 16.2 percent in the first quarter of
2008, as a favorable cumulative catch-up of $3 million was realized during the
first quarter of 2009, versus an immaterial amount in the first quarter of
2008.
    

    Wing Systems

    
    Wing Systems segment revenues for the first quarter of 2009 were $220.9
million, down 15.8 percent over the same period last year, due to a
strengthening U.S. dollar which caused Spirit Europe revenues to be $40
million below the prior year period when calculated using consistent exchange
rates and fewer unit deliveries as a result of the Machinists' strike at
Boeing.  Operating margin for the first quarter of 2009 was 8.8 percent, down
from 12.4 percent in the first quarter of 2008, as an unfavorable cumulative
catch-up of $4 million was realized during the first quarter of 2009,
primarily due to Spirit Europe's recognition of a forward-loss on a supply
contract with Hawker Beechcraft. During the first quarter of 2008, the segment
realized a favorable $2 million cumulative catch-up adjustment.  Higher
segment Research & Development expense for new programs also contributed to
the quarter over quarter segment margin decline.
    

    

    
    Table 4. Segment Reporting                     (Unaudited)
                                                   1st Quarter
    ($ in Millions, except                        -----------
     margin percent)                       2009      2008       Change
    ------------------------               ----      ----       ------
    

    
    Segment Revenues
       Fuselage Systems                   $430.5    $492.0      (12.5%)
       Propulsion Systems                 $227.4    $274.7      (17.2%)
       Wing Systems                       $220.9    $262.3      (15.8%)
       All Other                            $8.6      $7.4       16.2%
                                            ----      ----       ----
    Total Segment Revenues                $887.4  $1,036.4      (14.4%)
    

    
    Segment Earnings from Operations
       Fuselage Systems                    $74.9     $89.1      (15.9%)
       Propulsion Systems                  $38.7     $44.5      (13.0%)
       Wing Systems                        $19.5     $32.5      (40.0%)
       All Other                            $0.4      $0.4        0.0%
                                            ----      ----        ---
    Total Segment Operating Earnings      $133.5    $166.5      (19.8%)
    

    
    Unallocated Corporate SG&A Expense    ($35.5)   ($36.1)      (1.7%)
    Unallocated Research &
     Development Expense                   ($0.2)    ($0.2)       0.0%
                                           -----     -----        ---
    Total Earnings from Operations         $97.8    $130.2      (24.9%)
    

    
    Segment Operating Earnings as %
     of Revenues
       Fuselage Systems                     17.4%     18.1%   (70) BPS
       Propulsion Systems                   17.0%     16.2%    80  BPS
       Wing Systems                          8.8%     12.4%  (360) BPS
       All Other                             4.7%      5.4%   (70) BPS
                                             ---       ---    --------
    Total Segment Operating Earnings as %
     of Revenues                            15.0%     16.1%  (110) BPS
    

    
    Total Operating Earnings as %
     of Revenues                            11.0%     12.6%  (160) BPS
    


    
                   Spirit Ship Set Deliveries
               (One Ship Set equals One Aircraft)
    

    
              2008 Spirit AeroSystems Deliveries
    

    
                   1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Total 2008
                   ------- ------- ------- ------- ----------
            B737      93      95      87      42        317
            B747       4       7       4       1         16
            B767       3       3       3       1         10
            B777      20      22      18       8         68
            B787       1       1       1       0          3
                     ---     ---     ---     ---        ---
           Total     121     128     113      52        414
    

    
     A320 Family      95      95      90      87        367
        A330/340      24      21      23      22         90
            A380       4       2       4       6         16
                     ---     ---     ---     ---        ---
           Total     123     118     117     115        473
    

    
    Hawker 850XP      15      24      24      28         91
                     ---     ---     ---     ---        ---
    

    
    Total Spirit     259     270     254     195        978
                     ===     ===     ===     ===        ===
    



    
              2009 Spirit AeroSystems Deliveries
    

    
                   1st Qtr
                   -------
            B737      74
            B747       3
            B767       3
            B777      21
            B787       2
                     ---
           Total     103
    

    
     A320 Family     105
        A330/340      26
            A380       0
                     ---
           Total     131
    

    
    Hawker 850XP      18
                     ---
    

    
    Total Spirit     252
                     ===
    



    
                         Spirit AeroSystems Holdings, Inc.
                  Condensed Consolidated Statements of Operations
                                    (unaudited)
                                                For the Three  For the Three
                                                Months Ended   Months Ended
                                                April 2, 2009  March 27, 2008
                                                -------------  --------------
                                                  ($ in millions, except per
                                                          share data)
    

    
    Net Revenues                                       $887.4        $1,036.4
      Operating costs and expenses:
      Cost of sales                                     737.3           857.3
      Selling, general and administrative                38.4            39.1
      Research and development                           13.9             9.8
                                                         ----             ---
        Total Operating Costs and Expenses              789.6           906.2
        Operating Income                                 97.8           130.2
    Interest expense and financing fee amortization      (9.1)           (9.1)
    Interest income                                       2.6             5.7
    Other income                                          1.5             1.4
                                                          ---             ---
        Income Before Income Taxes                       92.8           128.2
    Income tax provision                                (30.2)          (43.0)
                                                        -----           -----
        Income Before Equity in Net Income of
         Affiliate                                       62.6            85.2
    Equity in net income of affiliate                     0.1               -
                                                          ---             ---
        Net Income                                      $62.7           $85.2
                                                        =====           =====
    

    
    Earnings per share
    Basic                                               $0.46           $0.62
    Shares                                              137.1           136.8
    

    
    Diluted                                             $0.45           $0.61
    Shares                                              139.9           139.6
    



    
                        Spirit AeroSystems Holdings, Inc.
                      Condensed Consolidated Balance Sheets
                                   (unaudited)
    

    
                                             April 2, 2009   December 31, 2008
                                             -------------   -----------------
                                                      ($ in millions)
    Current assets
    Cash and cash equivalents                      $115.6             $216.5
    Accounts receivable, net                        268.6              149.3
    Current portion of long-term receivable          82.6              108.9
    Inventory, net                                2,118.4            1,882.0
    Other current assets                             76.1               76.6
                                                     ----               ----
        Total current assets                      2,661.3            2,433.3
    Property, plant and equipment, net            1,107.0            1,068.3
    Pension assets                                   59.9               60.1
    Other assets                                    194.4              198.6
                                                    -----              -----
        Total assets                             $4,022.6           $3,760.3
                                                 ========           ========
    Current liabilities
    Accounts payable                               $435.9             $316.9
    Accrued expenses                                175.3              161.8
    Current portion of long-term debt                 6.7                7.1
    Advance payments, short-term                    174.7              138.9
    Deferred revenue, short-term                     75.8              110.5
    Other current  liabilities                       37.9                8.1
                                                     ----                ---
        Total current liabilities                   906.3              743.3
    Long-term debt                                  655.9              580.9
    Advance payments, long-term                     863.6              923.5
    Deferred revenue and other deferred credits      64.6               58.6
    Pension/OPEB obligation                          47.8               47.3
    Other liabilities                               121.3              109.2
    Shareholders' equity
    Preferred stock, par value $0.01,
     10,000,000 shares authorized, no
     shares issued and outstanding                      -                  -
    Common stock, Class A par value
     $0.01, 200,000,000 shares authorized,
     103,546,281 and 103,209,466
     issued and outstanding, respectively             1.0                1.0
    Common stock, Class B par value $0.01,
     150,000,000 shares authorized,
     36,624,147 and 36,679,760 shares
     issued and outstanding, respectively             0.4                0.4
    Additional paid-in capital                      941.5              939.7
    Minority Interest                                 0.5                0.5
    Accumulated other comprehensive income         (133.1)            (134.2)
    Retained earnings                               552.8              490.1
                                                    -----              -----
        Total shareholders' equity                1,363.1            1,297.5
                                                  -------            -------
        Total liabilities and shareholders'
          equity                                 $4,022.6           $3,760.3
                                                 ========           ========
    



    
                        Spirit AeroSystems Holdings, Inc.
                 Condensed Consolidated Statements of Cash Flows
                                   (unaudited)
    

    
                                               For the Three   For the Three
                                               Months Ended    Months Ended
                                               April 2, 2009   March 27, 2008
                                               --------------  ---------------
                                                       ($ in millions)
    Operating activities
    Net Income                                        $62.7            $85.2
    Adjustments to reconcile net income to
     net cash provided by operating activities
         Depreciation expense                          30.7             28.0
         Amortization expense                           2.2              2.1
         Accretion of long-term receivable             (2.5)            (4.9)
         Employee stock compensation expense            2.8              3.7
         Loss from the ineffectiveness of
          hedge contracts                                 -              0.3
         Gain from foreign currency transactions       (0.7)               -
         Loss on disposition of assets                  0.2              0.7
         Deferred taxes                               (2.2)            (2.1)
         Pension and other post-retirement
          benefits, net                                 0.4             (7.2)
         Grant income                                  (0.2)               -
         Equity in net income of affiliate             (0.1)               -
    Changes in assets and liabilities
         Accounts receivable                         (121.6)           (66.4)
         Inventory, net                              (235.4)          (155.8)
         Accounts payable and accrued liabilities     134.2             60.8
         Advance payments                             (24.1)            89.1
         Deferred revenue and other deferred credits  (27.6)            (8.5)
         Other                                         32.1             46.3
                                                       ----             ----
            Net cash provided by (used in)
              operating activities                   (149.1)            71.3
                                                     ------             ----
    Investing Activities
    Purchase of property, plant and equipment         (54.4)           (65.7)
    Long-term receivable                               28.8                -
    Other                                               0.3             (0.1)
                                                        ---             ----
            Net cash (used in) investing activities   (25.3)           (65.8)
                                                      -----            -----
    Financing Activities
    Proceeds from revolving credit facility           100.0             75.0
    Payments on revolving credit facility             (25.0)               -
    Proceeds from government grants                     0.5                -
    Principal payments of debt                         (1.9)            (3.2)
    Debt issuance costs                                   -             (6.8)
                                                       ----             ----
            Net cash provided by financing activities  73.6             65.0
                                                       ----             ----
    Effect of exchange rate changes
     on cash and cash equivalents                      (0.1)            (0.5)
                                                       ----             ----
            Net increase (decrease) in cash and cash
             equivalents for the period              (100.9)            70.0
    Cash and cash equivalents, beginning of the
     period                                           216.5            133.4
                                                      -----            -----
    Cash and cash equivalents, end of the period     $115.6           $203.4
                                                     ======           ======




    




For further information:

For further information: Investor Relations, Phil Anderson,
+1-316-523-1797, or Media, Debbie Gann, +1-316-526-3910, both of Spirit
AeroSystems Holdings, Inc. Web Site: http://www.spiritaero.com


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