Spirit AeroSystems Holdings, Inc. Reports Third Quarter 2007 Revenue and Earnings Growth; Updates 2007 Guidance; Provides 2008 Guidance



    
    * Third quarter revenues grew 17 percent to $968 million; Operating
    earnings grew to $107 million

    * Earnings Per Share increased 114 percent to $0.60 as net income grew to
    $84 million

    * Selected to join the P-8A Poseidon industry team to build the U.S.
Navy's
    next-generation surveillance and reconnaissance aircraft

    * Delivered 2,400th 737 Next Generation ship set and 1,400th 747 ship set
    to Boeing

    * Grew total backlog 8 percent to $23.5 billion
    

    WICHITA, Kan., Nov. 1 /CNW/ -- Spirit AeroSystems Holdings, Inc. [NYSE:  
SPR] reported increases in its third quarter financial results and updated its
2007 financial guidance and provided 2008 guidance, citing strong global
commercial aerospace markets and improved operational efficiencies.



    Table 1.  Summary Financial Results

    
    ($'s in Millions, except per    3rd Quarter             Nine Months
     share data)                2007   2006  Change     2007    2006  Change
    

    
    Revenues                    $968   $830   17%     $2,880  $2,356    22%
    Operating Income            $107    $78   38%       $313    $184    70%
    Operating Income as a %
     of Revenues               11.0%   9.3%  170 BPS   10.8%    7.8%  300 BPS
    Net Income                   $84    $34   146%      $221     $86    157%
    Net Income as a % of
     Revenues                   8.6%   4.1%  450 BPS    7.7%    3.7%  400 BPS
    Earnings per Share (Fully
     diluted)                  $0.60  $0.28   114%     $1.59   $0.71    124%
    Fully Diluted Weighted
     Avg Share Count
     (Million)                 139.5  121.2            139.2   121.7
    
    Spirit's third quarter net income rose 146 percent to $84 million from
$34 million a year ago, and fully diluted earnings per share rose 114 percent
to $0.60 per share from $0.28 per share last year. (Table 1)  The company
benefited from a lower effective tax rate during the third quarter 2007.  The
lower tax rate contributed $0.09 of diluted earnings per share to the third
quarter results.  Revenue for the quarter increased 17 percent to $968 million
from $830 million, and the company's operating margins rose to 11.0 percent
from 9.3 percent last year.
    "Strong operating performance continues across the company while we
execute our key development programs and pursue new business opportunities,"
said President and Chief Executive Officer Jeff Turner.  "Executing our
backlog of over twenty-three billion dollars remains our top near-term
opportunity to grow profitability and expand operating margins," Turner added.
"The recent delays on the 787 program, while disappointing, represent a short-
term challenge for an enormously successful product that will deliver long-
term value to customers and shareholders," Turner continued.  "Additionally,
we are pleased to be named to Boeing's P-8A Poseidon team this quarter.  The
U.S. Navy's P-8A program is another example of the value the 737 Next
Generation aircraft brings to customers and demonstrates, yet again, the
adaptability of the airframe for both commercial and military applications.
Looking forward, we will continue to invest in key growth programs and
diversification while improving our financial performance."
    Spirit's backlog during the quarter increased from $21.8 billion to $23.5
billion, as combined net orders for 528 aircraft at Boeing and Airbus outpaced
their combined deliveries of 208 aircraft.  Spirit's backlog is calculated
based on contractual prices for products and expected delivery volumes from
the published firm order backlogs of both Boeing and Airbus.
    Spirit updated its contract profitability estimates during the third
quarter of 2007, which resulted in no net changes to contract estimates. Third
quarter 2006 results included a $17 million favorable cumulative catch- up
adjustment.
    Cash flow from operations for the third quarter was $42 million, despite
increases in inventory on the 787 program and other development programs.
Investments in capital expenditures totaled $69 million in the quarter.  Half
of the investment in property, plant and equipment supported the start-up of
the 787 program.
    Cash balances at the end of the quarter were $105 million, down $22
million from the end of the second quarter 2007, reflecting planned investment
in Spirit's core business, primarily for the 787 program.  Debt balances at
the end of the third quarter were $605 million, down slightly from second
quarter levels. (Table 2)



    
    Table 2.  Cash Flow and Liquidity
                                             3rd Quarter      Nine Months
    ($'s in Millions)                       2007    2006     2007     2006
    

    
    Cash Flow from Operations                $42    $113     $107     $326
    Purchases of Property, Plant &
     Equipment                              ($69)   ($53)   ($228)   ($233)
    

    
                                                            As of    As of
                                                           Sept 27,  Dec 31,
    Liquidity                                                2007     2006
    

    
    Cash                                                     $105     $184
    Current Portion of Long-term Debt
     plus Long-term Debt                                     $605     $618
    Financial Outlook
    
    The company's financial guidance for 2007 is updated and 2008 guidance is
provided incorporating the benefit of higher production volumes on large
commercial aircraft programs.  The company is forecasting approximately 18 to
20 percent growth in revenues in 2008 and increasing operating margins from
year-to-year reflecting the company's solid operating performance across
business segments.  Guidance for 2007 reflects a lower effective tax rate
consistent with reported results as of nine months ending September 27, 2007.
Financial guidance for 2007 and 2008 incorporates 787 program schedule changes
resulting from the delay of aircraft certification and entry into service
announced by The Boeing Company on October 10, 2007.  Table 3 summarizes the
company's financial outlook.



    
    Table 3. Financial Outlook
                                              2007 Guidance     2008 Guidance
    

    Revenues                                  $3.9B - $4.0B        ~$4.7B

    Operating Income                          $415M - $425M

    Operating Income as a % of Revenues       10.4% - 10.8%

    Depreciation and Amortization             $115M - $120M

    Earnings Per Share (Fully Diluted)        $2.10 - $2.15     $2.30 - $2.40

    Effective Tax Rate                         + / - 29.5%        33% - 34%

    
    Cash Flow from Operations*                 + / - $250M
    Capital Expenditures                       + / - $300M
    Customer Reimbursement of Capital
     Expenditures                                ~$45M
    

    Average Fully Diluted Shares Outstanding 139.5M - 140.0M

    
    * Includes $40-$50 million of customer advances for capital expenditures
    2007 Outlook
    
    Spirit's 2007 revenue expectations are now expected to be between $3.9
and $4.0 billion, or approximately 23 percent higher than 2006.  The new
guidance is a change from the previous guidance range of between $4.0 and $4.1
billion. The 2007 revenue projection is based on previously issued 2007 Boeing
and Airbus delivery guidance of 440 and 440-450 aircraft, respectively, and
includes fewer initial deliveries of Spirit products to Boeing on the 787
program.
    Spirit's 2007 operating margins are now expected to be in the range of
10.4 to 10.8 percent, and 2007 fully diluted EPS guidance is increased to
between $2.10 and $2.15 per share as benefits from cost reductions,
productivity initiatives and a lower than expected effective tax rate improve
profitability.
    2007 cash flow from operations is now expected to be +/- $250 million
which includes working capital spending for the new 787 program.  Fiscal 2007
capital expenditures are unchanged and are expected to be +/- $300 million.
Approximately 50 percent of the capital expenditures will be utilized for the
installation of production capacity for the new 787 program.  Spirit
anticipates approximately $45 million of customer reimbursement to partially
offset these capital expenditures.
    2007 Depreciation and Amortization expenses are unchanged and forecasted
to be between $115 and $120 million, while 2007 Research and Development
expense is expected to be approximately $55 to $60 million.  SG&A expense for
2007 is now expected to be approximately $195 to $200 million.
    
    2008 Outlook
    
    Spirit's 2008 revenue is expected to be approximately $4.7 billion, or 18
to 20 percent higher than 2007 revenues.  The 2008 revenue projection is based
on previously issued 2008 Boeing delivery guidance of 480-490 aircraft and
includes internal Spirit forecasts for Airbus and other products.  Spirit's
revenue guidance for 2008 assumes delivery of approximately forty-five 787
ship sets from Spirit to Boeing based on aircraft certification and entry into
service occurring during the fourth quarter 2008.  A reduction in Spirit's
2008 787 ship set delivery forecast would likely result in lower than
forecasted revenues and earnings for the year.
    Earnings per share for 2008 is expected to be between $2.30 and $2.40 per
share as increased volumes on large commercial aircraft programs and improved
operating efficiencies increase profitability.
    Cash from Operations and Capital Expenditure guidance will be provided
when the company reports fourth quarter and full-year 2007 results in early
February 2008.
    
    Cautionary Statement Regarding Forward-Looking Statements
    
    This press release includes forward-looking statements that reflect the
plans and expectations of Spirit AeroSystems Holdings, Inc.  To the extent
that statements in this press release do not relate to historical or current
facts, they constitute forward-looking statements. Forward-looking statements
can generally be identified by the use of forward-looking terminology such as
"may," "will," "expect," "intend," "estimate," "anticipate," "believe,"
"project," "continue," or other similar words.  These statements reflect
Spirit AeroSystems Holdings, Inc.'s current view with respect to future events
and are subject to risks and uncertainties, both known and unknown.  Such
risks and uncertainties may cause the actual results of Spirit AeroSystems
Holdings, Inc. to vary materially from those anticipated in forward-looking
statements, and therefore we caution investors not to place undue reliance on
them. Potential risks and uncertainties include, but are not limited to: our
customers' aircraft build rates; the ability to enter into supply arrangements
with additional customers and satisfy performance requirements under existing
contracts; any adverse impact on our customers' production of aircraft; the
success and timely progression of our customers' new programs including, but
not limited to The Boeing Company's 787 aircraft program; future levels of
business in the aerospace and commercial transport industries; competition
from original equipment manufacturers and other aerostructures suppliers; the
effect of governmental laws; the effect of new commercial and business
aircraft development programs; the cost and availability of raw materials; the
ability to recruit and retain highly skilled employees and relationships with
unions; spending by the United States and other governments on defense; the
continuing ability to operate successfully as a stand alone company; the
outcome of ongoing or future litigation and regulatory actions; and exposure
to potential product liability claims. Additional information as to factors
that may cause actual results to differ materially from our forward-looking
statements can be found in Spirit AeroSystems Holdings, Inc.'s filings with
the United States Securities and Exchange Commission.  Spirit AeroSystems
Holdings, Inc. undertakes no obligation and does not intend to update publicly
any forward-looking statements after the date of this press release, except as
required by law.

    Appendix

    
    Segment Results
    Fuselage Systems
    
    Fuselage Systems segment revenue for the third quarter was $434 million,
up 7 percent over the same period last year as deliveries on the 747 and 777
programs increased.  Fuselage Systems posted segment operating margins of 18.0
percent during the third quarter 2007, down from 20.4 percent in the same
period of 2006.  A favorable cumulative catch-up adjustment of $9 million was
recognized in the segment for the third quarter of 2006.
    
    Propulsion Systems
    
    Propulsion Systems segment revenue for the third quarter was $279
million, up 23 percent over the same period last year as deliveries increased
in support of primary customer production volume.  Propulsion Systems posted
segment operating margins of 16.5 percent for the third quarter 2007, down
from 18.2 percent in the same period of 2006.  A favorable cumulative catch-up
adjustment of $7 million was recognized in the segment for the third quarter
of 2006.
    
    Wing Systems
    
    Wing Systems segment revenue for the third quarter was $252 million, up
31 percent over the same period last year as deliveries increased in support
of primary customer production volume.  Wing Systems posted segment operating
margins of 9.3 percent for the third quarter 2007, up from 6.0 percent in the
same period of 2006 as R&D expense on the 787 program declined.  A favorable
cumulative catch-up adjustment of $1 million was recognized in the segment for
the third quarter of 2006.



    
    Table 4.  Segment Reporting
                                3rd Quarter               Nine Months
    ($'s in Millions,
     except margin
     percent)            2007    2006      Change    2007   2006(1)    Change
    

    
    Segment Revenues
       Fuselage Systems $434.3  $405.9       7.0% $1,329.2  $1,174.1    13.2%
       Propulsion
        Systems         $278.9  $227.1      22.8%   $798.5    $668.8    19.4%
       Wing Systems     $251.5  $192.2      30.9%   $738.1    $491.3    50.2%
       All Other          $2.8    $4.5     (37.8%)   $14.6     $21.7   (32.7%)
    Total Segment
     Revenues           $967.5  $829.7      16.6% $2,880.4  $2,355.9    22.3%
    

    
    Segment Earnings from
     Operations
       Fuselage Systems  $78.1   $82.8      (5.7%)  $243.2   $208.3     16.8%
       Propulsion
        Systems          $45.9   $41.3      11.1%   $130.2   $100.4     29.7%
       Wing Systems      $23.5   $11.6     102.6%    $75.1    $30.6    145.4%
       All Other          $0.3    $1.2     (75.0%)    $1.8     $3.3    (45.5%)
    Total Segment
     Operating Earnings $147.8  $136.9       8.0%   $450.3   $342.6     31.4%
    

    
    Unallocated
     Corporate
     SG&A Expense       ($39.9) ($57.9)     31.1%  ($134.3) ($154.6)    13.1%
    Unallocated
     Research &
     Development Expense ($1.3)  ($1.5)     13.3%    ($3.5)   ($3.9)    10.3%
    Total Earnings from
     Operations         $106.6   $77.5      37.5%   $312.5   $184.1     69.7%
    

    
    Segment Operating
     Earnings as % of
     Revenues
       Fuselage Systems  18.0%   20.4%  (240) BPS    18.3%    17.7%    60 BPS
       Propulsion
        Systems          16.5%   18.2%  (170) BPS    16.3%    15.0%   130 BPS
       Wing Systems       9.3%    6.0%    330 BPS    10.2%     6.2%   390 BPS
       All Other         10.7%   26.7% (1600) BPS    12.3%    15.2% (290) BPS
    Total Segment
     Operating Earnings
      as % of Revenues   15.3%   16.5%  (120) BPS    15.6%    14.5%   110 BPS
    

    
    Total Operating
     Earnings as % of
     Revenues            11.0%    9.3%    170 BPS    10.8%     7.8%   300 BPS
    


    (1) Includes Spirit Europe since acquisition on April 1, 2006



    
                          Spirit Ship Set Deliveries
                        (BASED ON FUSELAGE DELIVERIES)
    

    2006 Spirit AeroSystems Deliveries


    
                          1st Qtr   2nd Qtr   3rd Qtr   4th Qtr   Total 06
               B737         64        77        84        77         302
               B747          3         3         3         4          13
               B767          3         3         3         3          12
               B777         14        16        16        19          65
              Total         84        99       106       103         392
    

    
               A320          0        81        74        86         241
           A330/340          0        33        17        23          73
               A380          0         4         0         0           4
           Total(1)          0       118        91       109         318
    

    Hawker 850XP(1)          0        12        15        24          51

    Total Spirit         84       229       212       236         761

    
    (1) Deliveries associated with Airbus and Hawker products were acquired
        with Spirit Europe on April 1, 2006.
    



    2007 Spirit AeroSystems Deliveries

    
                         1st Qtr       2nd Qtr       3rd Qtr
            B737           83            85            84
            B747            5             4             5
            B767            3             4             3
            B777           21            21            21
            B787            0             1             0
           Total          112           115           113
    

    
            A320           93            84            91
        A330/340           22            21            22
            A380            0             0             2
           Total          115           105           115
    

    Hawker 850XP           16            15            17

    Total Spirit          243           235           245



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

    
                                      For the Three          For the Nine
                                      Months Ended           Months Ended
                                  September  September   September   September
                                     27,        28,         27,         28,
                                    2007       2006        2007        2006
                                     ($ in millions, except per share data)
    

    
    Net Revenues                   $967.5     $829.7    $2,880.4    $2,355.9
      Operating costs and
       expenses:
      Cost of sales                 804.7      677.7     2,388.2     1,926.7
      Selling, general and
       administrative                42.9       59.9       142.3       160.0
      Research and development       13.3       14.6        37.4        85.1
        Total Costs and Expenses    860.9      752.2     2,567.9     2,171.8
        Operating Income            106.6       77.5       312.5       184.1
    Interest expense and financing
     fee amortization                (9.7)     (11.9)      (28.1)      (34.8)
    Interest income                   8.0        6.9        22.8        20.9
    Other income, net                 1.3        0.7         5.1         3.6
        Income From Continuing
         Operations Before Income
         Taxes                      106.2       73.2       312.3       173.8
    Income tax provision            (22.6)     (39.2)      (90.9)      (87.6)
        Net Income                  $83.6      $34.0      $221.4       $86.2
    

    
    Earnings per share
    Basic                           $0.61      $0.30       $1.65       $0.76
    Shares                          136.7      114.0       133.8       113.9
    

    
    Diluted                         $0.60      $0.28       $1.59       $0.71
    Shares                          139.5      121.2       139.2       121.7
    



    
                        Spirit AeroSystems Holdings, Inc.
                     Condensed Consolidated Balance Sheets
    


    
                                                 September 27,    December 31,
                                                     2007             2006
                                                 (unaudited)
                                                        ($ in millions)
    Current assets
    Cash and cash equivalents                       $105.4            $184.3
    Accounts receivable, net                         247.2             200.2
    Other receivable                                  92.3              43.0
    Inventory, net                                 1,198.4             882.2
    Prepaid expenses                                  14.8              20.8
    Income tax receivable                              -                21.7
    Other current assets                              59.6              68.3
         Total current assets                      1,717.7           1,420.5
    Property, plant and equipment, net               937.7             773.8
    Long-term receivable                             141.0             191.5
    Pension assets                                   231.5             207.3
    Other assets                                     138.1             129.1
         Total assets                             $3,166.0          $2,722.2
    

    
    Current liabilities
    Accounts payable                                $374.9            $339.1
    Accrued expenses                                 229.2             198.5
    Current portion of long-term debt                 22.8              23.9
    Other current liabilities                         19.8               8.2
         Total current liabilities                   646.7             569.7
    Long-term debt                                   582.5             594.3
    Advance payments                                 638.5             587.4
    Pension obligation                                56.6              53.7
    Other liabilities                                101.7              58.1
    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, 102,563,955
     and 63,345,834 issued and outstanding,
     respectively                                      1.0               0.6
    Common stock, Class B par value $0.01,
     150,000,000 shares authorized, 36,890,084
     and 71,351,347 shares issued and
     outstanding, respectively                         0.4               0.7
    Additional paid-in capital                       917.2             858.7
    Accumulated other comprehensive income            74.0              72.5
    Retained earnings / (deficit)                    147.4             (73.5)
         Total shareholders' equity                1,140.0             859.0
         Total liabilities and
          shareholders' equity                    $3,166.0          $2,722.2
    



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

    
                                              For the Nine       For the Nine
                                              Months Ended       Months Ended
                                              September 27,      September 28,
                                                  2007               2006
                                                      ($ in millions)
    Operating activities
    Net income                                   $221.4             $86.2
    Adjustments to reconcile net income
     to net cash provided by operating
     activities
         Depreciation expense                      67.1              30.3
         Amortization expense                       5.7               6.2
         Accretion of long-term receivable        (16.0)            (15.3)
         Employee stock compensation expense       26.8              40.8
         Excess tax benefits from share-
          based payment arrangements              (32.9)               -
         Loss on disposition of assets              0.4                -
         Deferred taxes                             3.8                -
    

    
    Changes in assets and liabilities,
     net of acquisition
         Accounts receivable                      (48.0)            (63.2)
         Inventory, net                          (312.6)           (171.5)
         Other current assets                       6.1              (6.1)
         Accounts payable and accrued
          liabilities                              18.7             142.0
         Customer advances                         93.6             300.0
         Deferred revenue and other
          deferred credits                         36.4                -
         Other                                     36.1             (23.7)
            Net cash provided by
             operating activities                 106.6             325.7
    

    
    Investing Activities
    Purchase of property, plant and equipment    (228.0)           (233.4)
    Proceeds from sale of assets                    0.2               -
    Acquisition of business, net of cash
     required                                        -             (135.4)
    Long-term receivable                           22.8               -
    Financial derivatives                           3.1               3.1
    Other                                          (1.3)              -
            Net cash (used in) investing
             activities                          (203.2)           (365.7)
    

    
    Financing Activities
    Principal payments of debt                    (14.4)            (10.2)
    Excess tax benefits from share-based
     payment arrangements                          32.9                -
    Equity issuance costs                            -               (3.4)
    Executive stock
     investments/(repurchases)                     (1.0)              1.1
            Net cash provided by (used
             in) financing activities              17.5             (12.5)
    Effect of exchange rate changes on
     cash and cash equivalents                      0.2               0.2
            Net (decrease) in cash and
             cash equivalents for the
             period                               (78.9)            (52.3)
    Cash and cash equivalents, beginning
     of the period                                184.3             241.3
    Cash and cash equivalents, end of the
     period                                      $105.4            $189.0
    




For further information:

For further information: Investor Relations, Phil Anderson, 
+1-316-523-1797, or Media, Debbie Gann, +1-316-519-7340, both of Spirit 
AeroSystems Holdings, Inc.


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