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Exhibit 99.1
BFGOODRICH NEWS
THE BFGOODRICH COMPANY PRO1-025
Four Coliseum Centre MEDIA CONTACT: Kevin Ramundo
2730 West Tyvola Road PHONE: 704/423-7024
Charlotte, North Carolina 28217-4578
www.bfgoodrich.com INVESTOR CONTACT: Paul Gifford
PHONE: 704/423-5517
BFGOODRICH COMPLETES PERFORMANCE MATERIALS SALE
o Net cash proceeds of $1 billion targeted for debt reduction in the near term
o Outlook of 14-18 percent growth in per-share earnings in 2001 affirmed
o Free cash flow before dividends of $210-$235 million estimated for 2001
CHARLOTTE, NC, February 28, 2001 -- The BFGoodrich Company announced today that
it has completed the sale of its Performance Materials segment to an investor
group led by AEA Investors Inc. for approximately $1.4 billion. Total net
proceeds, after anticipated tax payments and transaction costs, include
approximately $1 billion in cash and $172 million in debt securities issued by
the new company. Affiliates of DLJ Merchant Banking Partners and DB Capital
Partners, Inc. are included in the investor group.
BFGoodrich currently expects to use the proceeds to reduce debt, including the
immediate retirement of approximately $800 million in short-term debt and $175
million in longer term debt maturing in July 2001. These actions will reduce the
company's debt-to-total capital ratio (net of cash on hand) from approximately
59% at year-end 2000 to approximately 45% in the first quarter, providing the
financing capacity to further enhance shareholder value through strategic
investments in continuing operations. These investments could include
complementary and strategic acquisitions such as the recently announced
purchases of Humphrey, Inc. and Raytheon Optical Systems, new product and
technology development, and new original equipment platform initiatives in
Aerospace and Engineered Industrial Products. Share repurchases, which require
the approval of the Board of Directors, will also be considered.
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In commenting on today's announcement, David L. Burner, BFGoodrich's Chairman
and CEO, said, "We are pleased to complete the Performance Materials sale on
schedule and on terms consistent with the original announcement. The sale
completes our company's transformation into an aerospace and industrial products
company with significant opportunities to continue to deliver long-term
profitable growth and shareholder value." Regarding the use of proceeds, Burner
said "We carefully considered all available alternatives before deciding that
debt repayment made the most sense short-term and would provide the most
flexibility for building our company on behalf of shareholders, customers and
employees."
The company continues to anticipate it will earn between $3.40 and $3.50 in
diluted earnings per share in 2001, excluding special items, a range that is
14-18 percent above the company's comparable 2000 results of $2.97 from
continuing operations. Results in the first quarter are likely to be the lowest
in 2001, due to continued softness in the markets for Engineered Industrial
Products and the timing of the Performance Materials closing, which prevents the
redeployment of the sale proceeds for the full quarter. Excluding the cumulative
impact of the change in the company's effective tax rate, reported results in
the fourth quarter 2000 were $0.75 per fully diluted share, excluding special
items. BFGoodrich expects first quarter 2001 results to be around that level,
excluding special items.
Free cash flow for 2001, and all future periods, will be defined as operating
cash flow adjusted for cash payments related to special items less capital
expenditures. Thus, free cash flow will be portrayed prior to payment of
dividends. Using this definition, 2000 free cash flow was $279 million,
representing the $161 million previously reported plus dividends paid in 2000 of
$118 million. For 2001, free cash flow is expected to be in the range of $210
million to $235 million. When compared to the 2000 results, this forecast
reflects the investment required to support future revenue and earnings growth.
The primary items that affect the comparison to 2000 free cash flow are:
o Capital expenditures are projected to be in a range of $220 to $240
million, approximately 50% to 60% above 2000 levels. The increase is
due to investments in a new ERP system at Aerostructures, plant
expansions to meet increasing product demand, including carbon brakes,
and modest capital expenditures associated with products for new
aircraft platforms.
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o Non-recurring expenditures associated with product development for new
aircraft platforms and sales incentives.
o Higher projected net income and improved operational working capital
in 2001 are projected to offset a portion of the increased investments
noted above.
With 2000 sales of $4.4 billion, The BFGoodrich Company (NYSE: GR) is a leading
worldwide supplier of aerospace components, systems and services, as well as
sealing and compressor systems and other engineered industrial products.
BFGoodrich is ranked by Fortune magazine as one of the most admired aerospace
companies and is included on Forbes magazine's Platinum List of America's best
big companies. The company has its headquarters in Charlotte, North Carolina,
and employs 23,000 people worldwide. For more information, please visit our
website at www.bfgoodrich.com.
AEA Investors Inc. is one of the most experienced international private equity
investment firms with investors that include former and current CEOs of major
multinational corporations, family groups, endowment funds and institutions from
around the world. AEA targets traditional management buyouts as well as growth
equity investments. With offices in New York and London, AEA focuses on
investments in several business areas, which include specialty chemicals,
communications, media and information, consumer and industrial products, and
precision instruments and life sciences.
DLJ Merchant Banking Partners is part of the CSFB Private Equity Group. CSFB
Private Equity, the global equity arm of Credit Suisse Group, is one of the
largest managers of alternative assets in the world, with over $30 billion in
funds under management. CSFB Private Equity is comprised of investment funds
that focus on domestic and international leveraged buyouts and other private
equity investments, mezzanine investments, real estate investments, venture
capital investments, investments in distressed debt securities and investments
in other funds. CSFB Private Equity maintains offices in New York, London,
Buenos Aires, Hong Kong, Los Angeles, Moscow and Sao Paulo.
DB Capital Partners is a merchant banking affiliate of Deutsche Bank AG. With
operations in North America, Europe, Asia and Latin America, DB Capital Partners
and its affiliates draw on the substantial global resources of its parent
company and its affiliates including Deutsche Bank Securities Inc., and DB Alex,
Brown LLC. DB Capital Partners invests over $1.0 billion annually in all manner
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of financial transactions including growth financings, recapitalizations, and
leveraged buyouts, with a particular emphasis on industry sectors where DB
Capital Partners or its affiliates have significant expertise.
(Part of this announcement contains forward-looking statements that involve
risks and uncertainties, and actual results could differ materially from those
projected in the forward-looking statements. The risks and uncertainties are
detailed from time to time in reports filed with the Securities and Exchange
Commission, including but not limited to the last section of the Management's
Discussion and Analysis entitled "Forward-Looking Information is Subject to Risk
and Uncertainty" contained in the company's Annual Report on Form 10-K, and in
other filings.)
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