Lower Sales, Higher Losses... But Net Income Rises On
Repurchased Debt Securities
And the hits just keep on coming. Hawker Beechcraft reported
Thursday lower net sales and an increased operating loss for the
three months ending March 29, 2009, compared to the same period in
2008, as a result of fewer commercial aircraft deliveries and
charges associated with work force reductions and used aircraft
valuations.
HBC's net income was higher during the first quarter of 2009
compared to the first quarter of 2008... as a result of gains
realized on a previously-disclosed repurchase of the company's debt
securities.
Net sales for the three months ending March 29, 2009, were
$537.6 million, a decrease of $38.9 million compared to the same
period in 2008. Business and general aviation aircraft deliveries
were impacted by the deterioration in the overall economy and
totaled 57 for the quarter, compared to 72 for the first quarter of
2008.
Hawker Beech delivered 15 business jet, 29 turboprop and 13
piston aircraft during the three months ending March 29, 2009.
Operating loss for the three months ending March 29, 2009, was
$41.2 million, compared to a loss of $1.5 million for the same
period in 2008, and was impacted by the reduced business and
general aircraft deliveries, as well as a $13.6 million charge to
reflect the estimated severance costs related to the work force
reductions announced during the quarter. During the first quarter
of 2009, the Company also recorded a $25.3 million charge to reduce
the carrying value of used aircraft inventory to reflect current
market values. The first quarter of 2008 was impacted by an $18.4
million charge related to early production Hawker 4000
units.
Despite the increased operating
loss, HBC recorded net Q1 2009 after-tax income of $66.9 million,
compared to a net after-tax loss of $31.3 million for the same
period in 2008. During the first quarter of 2009, the Company
recorded a $177.0 net gain on the repurchase, at a significant
discount, of $222.0 million of its debt
securities.
As of March 29, 2009, the company had $72.3 million in cash and
cash equivalents and its revolving credit facility was undrawn.
"The Company believes that its cash on hand, anticipated cash from
operations and available liquidity under its revolving credit
facility will be sufficient to meet its cash requirements for the
next 12 months," Hawker Beechcraft noted.