Recorded $3.5 Billion In Net Sales
Hawker Beechcraft Acquisition Company, LLC (HBAC) reported
Thursday net sales of $3.5 billion and operating income of $135.5
million for the 12 months ending December 31, 2008. The planemaker
delivered 441 business and general aviation aircraft in 2008,
consisting of 160 business jets, 178 turboprops and 103 piston
aircraft... an 11-plane increase over its 2007 numbers.
"2008 net sales were significantly impacted by the four-week
strike by the International Association of Machinists (IAM) in
August," the company stated. "The strike disrupted manufacturing
and assembly operations, which significantly reduced aircraft
deliveries for the remainder of the year."
Net bookings for the year were $4.8 billion and year end backlog
was $7.6 billion. "As the general economic environment has
deteriorated, new order activity has declined and order
cancellations have increased," reads a statement from Hawker
Beechcraft. "The Company does not believe 2009 new bookings will
reach recent year levels and anticipates declining backlog in
2009."
Operating cash flow consumed during 2008 was $69.0 million, and
was significantly impacted by an increase in inventory as a result
of the strike and delays in deliveries of the Hawker 4000 (shown
center)... which the company attributed to "certain product
enhancements incorporated in the aircraft type design late in 2008
as well as others to be incorporated in 2009."
The company recorded a net after-tax loss for the year of $139.9
million, due primarily to a non-cash increase in tax expense of
$108.7 million. In addition to the impact of the strike and the
Hawker 4000 charges, Business and General Aviation segment results
were also impacted by a $13.7 million charge recorded in the fourth
quarter of 2008 to reduce the carrying value of used aircraft to
current market value.
Hawker Beech says operating income for the year was also
impacted by the reduced deliveries as a result of the strike. The
strike resulted in lower Business and General Aviation segment
aircraft deliveries and reduced production in the Trainer Aircraft
segment, impacting overall operating income. Also included in 2008
results were charges of $91.1 million associated with increased
costs to conform specific early-production Hawker 4000 units to the
final type design and establish more normal production
processes.
The Business and General Aviation segment recorded sales of
$2,820.6 million and operating income of $24.7 million during 2008.
HBC's Trainer Aircraft segment recorded sales of $338.2 million and
operating income of $28.2 million during 2008, fueled primarily
revenue from the Joint Primary Aircraft Training System (JPATS)
contract. Hawker Beech attributed that lackluster performance to
the machinists' strike, and by a six-month delay on JPATS
deliveries pending resolution of quality issues with a supplier's
component.
At the end of 2008, Hawker Beechcraft had $377.6 million in cash
and cash equivalents. In addition, its available revolving credit
facility was undrawn. "The Company believes that its cash on hand,
anticipated cash from operations and, if required, borrowings under
the revolving credit facility will be sufficient to meet its cash
requirements through 2009," said Hawker Beechcraft.