B/E Aerospace, Inc. (the “Company”) (NASDAQ: BEAV), the world’s
leading manufacturer of aircraft cabin interior products, today
announced its full year and fourth quarter 2016 financial
results.
FULL YEAR 2016 CONSOLIDATED
RESULTS
Full year 2016 revenues of $2.9 billion increased 7.4 percent as
compared with the prior year. Full year 2016 bookings were
approximately $3.3 billion and the book-to-bill ratio was 1.1 to
1.
The Company’s 2016 full year and fourth quarter results include
after-tax charges totaling approximately $20.0 million, or $0.20
per share, related to the pending Rockwell Collins merger
transaction and restructuring charges. For more information see
“Reconciliation of Non-GAAP Financial Measures”.
On a GAAP basis, full year 2016 operating earnings of $506.6
million increased 12.0 percent as compared with the prior year. Net
earnings and net earnings per diluted share of $311.1 million and
$3.08 per share increased 8.9 percent and 12.8 percent,
respectively, as compared with the prior year.
Exclusive of the aforementioned costs, operating earnings were
$528.5 million, or 18.0 percent of sales, net earnings and net
earnings per diluted share were $331.1 million and $3.28 per share,
and free cash flow from operations was $277.0 million or 83.7
percent of adjusted net earnings.
As of December 31, 2016, backlog increased by approximately $300
million, as compared with December 31, 2015, to approximately $3.5
billion, while awarded but unbooked backlog was approximately $5.6
billion. Total backlog, both booked, and awarded but unbooked, was
approximately $9.1 billion.
FOURTH QUARTER 2016 CONSOLIDATED
RESULTS
Fourth quarter 2016 revenues of $730.4 million increased 10.8
percent as compared with the prior year period. Bookings during the
fourth quarter of 2016 were approximately $900 million and the
book-to-bill ratio was approximately 1.2 to 1.
On a GAAP basis, operating earnings were $108.6 million, net
earnings were $60.4 million and net earnings per diluted share were
$0.60 per share, all of which were impacted by the pending Rockwell
Collins transaction and restructuring charges.
Exclusive of the aforementioned transaction and restructuring
related costs, operating earnings were $130.5 million and earnings
per diluted share was $0.80.
PENDING ROCKWELL COLLINS
TRANSACTION
In connection with the pending Rockwell Collins / B/E Aerospace
merger transaction, on February 3, 2017, Rockwell Collins filed a
registration statement with the Securities and Exchange Commission
(“SEC”) on Form S-4 that included a joint Rockwell Collins / B/E
Aerospace proxy statement. The registration statement has been
declared effective by the SEC. The B/E Aerospace special meeting of
stockholders has been scheduled for March 9, 2017 at the Hilton
Palm Beach Airport, West Palm Beach, Florida, at 10:00 a.m.
(Eastern time).
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.
Such forward-looking statements involve risks and uncertainties.
The Company’s actual experience and results may differ materially
from the experience and results anticipated in such statements.
Factors that might cause such a difference include those discussed
in the Company’s filings with the SEC, which include its Proxy
Statement, Annual Report on Form 10-K, Quarterly Reports on Form
10-Q and Current Reports on Form 8-K. The declaration and payment
of future dividends, the repurchase of shares of the Company’s
stock and repayment of outstanding debt are at the discretion of
the Board of Directors and will depend on the Company’s future
earnings, capital requirements, financial conditions, operating
conditions, contractual restrictions and such other factors as the
Board of Directors may deem relevant. For more information, see the
section entitled “Cautionary Statement Regarding Forward-Looking
Statements” contained in the Company’s Annual Report on Form 10-K
and in other filings. The forward-looking statements included in
this news release are made only as of the date of this news release
and, except as required by federal securities laws and rules and
regulations of the SEC, the Company undertakes no obligation to
publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise.
No Offer or Solicitation
This communication is for informational purposes only and not
intended to and does not constitute an offer to subscribe for, buy
or sell, the solicitation of an offer to subscribe for, buy or sell
or an invitation to subscribe for, buy or sell any securities or
the solicitation of any vote or approval in any jurisdiction
pursuant to or in connection with the proposed transaction or
otherwise, nor shall there be any sale, issuance or transfer of
securities in any jurisdiction in contravention of applicable law.
No offer of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the Securities
Act of 1933, as amended, and otherwise in accordance with
applicable law.
Additional Information and Where to Find It
The proposed transaction involving Rockwell Collins and B/E
Aerospace is being submitted to the respective stockholders of
Rockwell Collins and B/E Aerospace for their consideration. In
connection with the proposed transaction, Rockwell Collins filed a
registration statement on Form S-4 that included a joint proxy
statement/prospectus for the stockholders of Rockwell Collins and
B/E Aerospace with the SEC. The registration statement was declared
effective by the SEC on February 3, 2017, and a definitive joint
proxy statement/prospectus has been filed with the SEC on February
3, 2017. Each of Rockwell Collins and B/E Aerospace are mailing the
definitive joint proxy statement/prospectus to their respective
stockholders and, may file other documents regarding the
transaction with the SEC. INVESTORS AND SECURITY HOLDERS ARE URGED
TO READ CAREFULLY AND IN THEIR ENTIRETY THE DEFINITIVE JOINT PROXY
STATEMENT/PROSPECTUS, ANY AMENDMENTS OR SUPPLEMENTS TO THE
DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS, AND OTHER DOCUMENTS
FILED BY ROCKWELL COLLINS OR B/E AEROSPACE WITH THE SEC IN
CONNECTION WITH THE PROPOSED TRANSACTION, BECAUSE THESE DOCUMENTS
CONTAIN IMPORTANT INFORMATION. Investors and security holders are
able to obtain free copies of the definitive joint proxy
statement/prospectus and other documents filed with the SEC by
Rockwell Collins and/or B/E Aerospace through the website
maintained by the SEC at www.sec.gov. Investors and security
holders are also able to obtain free copies of the documents filed
by Rockwell Collins with the SEC on Rockwell Collins’ internet
website at http://www.rockwellcollins.com or by contacting Rockwell
Collins’ Investor Relations at Rockwell Collins, 400 Collins Rd.
NE, Cedar Rapids, IA 52498 or by calling (319) 295-7575. Investors
and security holders are also able to obtain free copies of the
documents filed by B/E Aerospace with the SEC on B/E Aerospace’s
internet website at http://www.beaerospace.com or by contacting B/E
Aerospace’s Investor Relations at B/E Aerospace, Inc., 1400
Corporate Center Way, Wellington, FL or by calling (561)
791-5000.
Participants in the Solicitation
Rockwell Collins, B/E Aerospace and their respective directors
and executive officers may be deemed to be participants in the
solicitation of proxies in connection with the proposed
transaction. Information regarding the persons who may, under the
rules of the SEC, be deemed participants in the solicitation of
proxies in connection with the proposed transaction, including a
description of their direct or indirect interests, by security
holdings or otherwise, is set forth in the definitive joint proxy
statement/prospectus filed with the SEC.
About B/E Aerospace, Inc.
B/E Aerospace is the world’s leading manufacturer of aircraft
cabin interior products. B/E Aerospace designs, develops and
manufactures a broad range of products for both commercial aircraft
and business jets. B/E Aerospace manufactured products include
aircraft cabin seating, lighting systems, oxygen systems, food and
beverage preparation and storage equipment, galley systems, and
modular lavatory systems. B/E Aerospace also provides cabin
interior reconfiguration, program management and certification
services. B/E Aerospace sells and supports its products through its
own global direct sales and product support organization. For more
information, visit the B/E Aerospace website at
www.beaerospace.com.
B/E AEROSPACE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
EARNINGS (UNAUDITED)
(In Millions, Except Per Share
Data)
THREE MONTHS ENDED YEAR ENDED December
31, December 31, 2016 2015 2016
2015 Revenues $ 730.4 $ 659.2 $ 2,932.9 $ 2,729.6
Cost of sales 457.6 396.4 1,799.5 1,642.5 Selling, general and
administrative 90.7 80.7 336.1 360.4 Research, development and
engineering 73.5 58.0 290.7
274.4 Operating earnings 108.6 124.1
506.6 452.3 Operating earnings, as a percentage of revenues
14.9 % 18.8 % 17.3 % 16.6 % Interest expense, net
22.9 23.3 91.1 95.7
Earnings before income taxes 85.7 100.8 415.5 356.6
Income tax expense 25.3 17.4
104.4 70.9 Net earnings $ 60.4
$ 83.4 $ 311.1 $ 285.7 Net
earnings per common share: Basic $ 0.60 $ 0.81 $ 3.10
$ 2.75 Diluted $ 0.60 $ 0.81 $ 3.08
$ 2.73 Weighted average common shares: Basic
100.3 102.7 100.4 104.0 Diluted 101.0 103.2 100.9 104.5
B/E AEROSPACE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In Millions)
December 31, December 31, 2016
2015 ASSETS Current assets: Cash and cash
equivalents $ 202.0 $ 154.1 Accounts receivable 353.5 354.6
Inventories 1,258.9 1,091.9 Other current assets 54.2
57.8 Total current assets 1,868.6 1,658.4 Long-term assets
1,501.5 1,482.5 $ 3,370.1 $ 3,140.9
LIABILITIES
AND STOCKHOLDERS’ EQUITY Total current liabilities $
857.1 $ 822.2 Total long-term liabilities 2,296.5 2,263.2 Total
stockholders' equity 216.5 55.5 $ 3,370.1 $ 3,140.9
B/E AEROSPACE, INC.
CONDENSED CONSOLIDATED STATEMENT OF
CASH FLOWS (UNAUDITED)
(In Millions)
Year Ended December 31, 2016 2015
CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings $ 311.1 $
285.7 Adjustments to reconcile net earnings to net cash flows
provided by operating activities, net of effects from acquisitions:
Depreciation and amortization 83.6 85.3 Deferred income taxes 34.4
(4.1) Non-cash compensation 35.2 30.2 Provision for doubtful
accounts 0.8 7.2 Tax benefits realized from prior exercises of
restricted stock (1.9) (5.0) Loss on disposal of property and
equipment 3.0 9.2 Debt prepayment costs - 0.9 Changes in operating
assets and liabilities: Accounts receivable (16.1) (84.7)
Inventories (194.7) (184.6) Other current and non-current assets
(30.1) 67.7 Accounts payable and accrued liabilities 81.5
103.0 Net cash flows provided by operating activities
306.8 310.8
CASH FLOWS FROM INVESTING
ACTIVITIES: Capital expenditures (80.8) (80.5) Acquisitions,
net of cash acquired - 3.9 Other (2.6) (6.4) Net cash
flows used in investing activities (83.4) (83.0)
CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from
common stock issued 5.2 5.8 Purchase of treasury stock, including
share repurchases (86.7) (155.3) Tax benefits realized from prior
exercises of restricted stock 1.9 5.0 Principal payments on
long-term debt - (136.0) Borrowings on line of credit 225.0 -
Repayments on line of credit (225.0) - Dividends (85.0)
(79.3) Net cash used in financing activities (164.6)
(359.8) Effect of foreign exchange rate changes on
cash and cash equivalents (10.9) (6.4)
Net
increase (decrease) in cash and cash equivalents 47.9 (138.4)
Cash and cash equivalents, beginning of year 154.1
292.5
Cash and cash equivalents, end of year $ 202.0
$ 154.1
B/E AEROSPACE, INC.RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES
This news release includes 2016 and 2015 net earnings, net
earnings per diluted share and consolidated operating earnings, on
an adjusted basis which exclude the 2016 fourth quarter charges
associated with the pending Rockwell Collins transaction and
restructuring, and the 2015 third quarter charge associated with
the Company’s cost reduction program and present the 2015 fourth
quarter income tax expense based on the full year 2015 effective
tax rate. Each of these adjusted measures are “non-GAAP financial
measures” as defined in Regulation G of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”).
The Company uses the above described adjusted measures to
evaluate and assess the operational strength and performance of the
business in addition to the GAAP financial measures. The Company
believes these 2016 and 2015 adjusted financial measures are
relevant and useful for investors because they allow investors to
have a better understanding of changes in the Company’s performance
excluding the 2016 charges associated with the pending Rockwell
Collins transaction and restructuring, and 2015 charge associated
with the Company’s cost reduction program. These 2016 and 2015
adjusted financial measures should not be viewed as a substitute
for, or superior to, operating earnings, or net earnings from
operations (each as defined under GAAP), the most directly adjusted
GAAP measures, as a measure of the Company’s operating performance
for 2016 and 2015.
This news release includes the Company’s “adjusted free cash
flow” and “free cash flow conversion ratio”, which are “non-GAAP
financial measures” as defined in Regulation G of the Exchange Act.
The Company defines “free cash flow” as net cash flows provided by
operating activities less capital expenditures and “adjusted free
cash flow” as free cash flow excluding cash expenditures related to
the pending Rockwell Collins transaction and restructuring. For a
reconciliation of free cash flow to cash flows provided by
operating activities, please see further below. The Company uses
adjusted free cash flow to provide investors with an additional
perspective on the Company’s cash flow provided by operating
activities after taking into account reinvestments and the
expenditures related to the pending Rockwell Collins transaction.
Free cash flow does not take into account debt service requirements
and therefore does not reflect an amount available for
discretionary purposes. The Company defines “free cash flow
conversion ratio” as adjusted free cash flow expressed as a
percentage of the Company’s adjusted net earnings. The Company uses
adjusted free cash flow conversion ratio to provide investors with
a measurement of its ability to convert earnings into free cash
flow. These financial measures should not be viewed as a substitute
for, or superior to, net cash flows provided by operating
activities, the most directly adjusted GAAP measure, as a measure
of the Company’s liquidity or operating performance.
Pursuant to the requirements of Regulation G of the Exchange
Act, we are providing the following tables that reconcile the above
mentioned non-GAAP financial measures to the most directly adjusted
GAAP financial measures:
B/E AEROSPACE, INC.
RECONCILIATION OF NET EARNINGS PER DILUTED SHARE TO
ADJUSTED NET EARNINGS PER DILUTED SHARE (In Millions, Except
Per Share Data) Three Months Ended Year
Ended December 31, December 31, 2016*
2015** 2016* 2015 Net earnings $ 60.4 $ 83.4 $
311.1 $ 285.7 Other costs* 21.9 - 21.9 49.0 Adjustment to income
taxes (1.9 ) (4.8 ) (1.9 ) (18.3 )
Adjusted net earnings $ 80.4 $ 78.6 $ 331.1 $
316.4 Adjusted net earnings per diluted share $ 0.80
$ 0.76 $ 3.28 $ 3.03
Diluted weighted average common shares 101.0 103.2 100.9 104.5
* Q4 2016 and full year 2016 other pre-tax costs of $21.9
million are associated with the pending Rockwell Collins
transaction and restructuring costs. 2015 other pre-tax costs of
$49.0 million are associated with the third quarter facilities
consolidation, product rationalization, workforce reductions and
program discontinuance. ** For comparability purposes, fourth
quarter 2015 income tax is presented based on 2015 full year
adjusted effective tax rate of ~22% to eliminate the one-time
benefit from the R&D tax credit realized in the fourth quarter
of 2015.
B/E AEROSPACE, INC. RECONCILIATION OF OPERATING
EARNINGS TO ADJUSTED OPERATING EARNINGS (In
Millions) Three Months Ended Year Ended
December 31, December 31, 2016 2015
2016 2015 Operating earnings $ 108.6 $ 124.1 $ 506.6
$ 452.3 Other costs* 21.9 - 21.9
49.0 Adjusted operating earnings $ 130.5
$ 124.1 $ 528.5 $ 501.3 * Q4
2016 and full year 2016 other pre-tax costs of $21.9 million are
associated with the pending Rockwell Collins transaction and
restructuring costs. 2015 other pre-tax costs of $49.0 million are
associated with the third quarter facilities consolidation, product
rationalization, workforce reductions and program discontinuance.
B/E AEROSPACE, INC. RECONCILIATION OF NET
CASH FLOW PROVIDED BY OPERATING ACTIVITIES TO ADJUSTED FREE
CASH FLOW (In Millions) Year Ended
December 31, 2016 Net cash flow provided by operating
activities $ 306.8 Capital expenditures (80.8 ) Free cash
flow 226.0 Cash adjustments related to: Transaction expenditures
15.9 Restructuring expenditures 3.0 Accelerated payment of
compensation* 32.1 Adjusted free cash flow $ 277.0
*As part of the merger transaction with Rockwell
Collins,
the 2016 annual incentive was paid in
December 2016,
rather than in the first quarter of 2017.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170210005124/en/
B/E Aerospace, Inc.Greg Powell, 561-791-5000 ext. 1450Vice
President, Investor Relations
B/E Aerospace, Inc. (NASDAQ:BEAV)
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