1
Exhibit 99.1
[BFGoodrich LOGO] NEWS
- --------------------------------------------------------------------------------
THE BFGOODRICH COMPANY PR01-045
Four Coliseum Centre CONTACT: Kevin Ramundo
2730 West Tyvola Road PHONE: 704/423-7024
Charlotte, North Carolina 28217-4578
www.goodrich.com INVESTOR RELATIONS CONTACT:
Paul Gifford
PHONE: 704/423/5517
FOR IMMEDIATE RELEASE
GOODRICH REPORTS STRONG FIRST QUARTER RESULTS
- - DILUTED EPS INCREASE 10%, EXCLUDING SPECIAL ITEMS
- - AEROSPACE REPORTS DOUBLE-DIGIT SALES AND OPERATING INCOME GROWTH
- - SALE OF PERFORMANCE MATERIALS COMPLETED
- - POSITIVE 2001 OUTLOOK CONTINUES
CHARLOTTE, N.C., April 26, 2001 - The BFGoodrich Company (NYSE: GR) announced
today that first quarter income from continuing operations, excluding special
items, was $80.0 million, or $.76 per share, compared to $76.4 million, or $.69
per share, in the year-ago quarter. Including income from the discontinued
Performance Materials business, the gain on sale of this business and other
special items, net income in the current quarter was $172.3 million, or $1.62
per share. In the year-ago quarter, net income, including special items, was
$86.1 million, or $.78 per share. Sales for the first quarter 2001 were
approximately $1.2 billion, compared with $1.1 billion in the year-ago quarter.
Commenting on the results, David L. Burner, Goodrich's chairman and chief
executive officer, said, "We are off to a good start for the year. Our Aerospace
segment again achieved double-digit sales and operating income growth,
reflecting the balance and strength of our business portfolio. We continue to
benefit from our strategy of expanding our aerospace businesses internally and
through complementary acquisitions that improve market penetration, add to our
product mix and strengthen our technology base. Results in Engineered Industrial
Products were slightly lower than last year's first quarter due to continuing
softness in industrial markets, but were in line with our expectations. We
continue to expect that 2001 will be a year of significant growth for Goodrich."
Page 1 of 4 PR01-045 BFGoodrich Reports Strong First Quarter Results
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[BFGoodrich LOGO] NEWS
FIRST QUARTER SEGMENT REVIEW
- ----------------------------
In the Aerospace segment, all four operating groups achieved higher sales and
operating income compared to the year-ago quarter. Operating income increased
almost 12 percent to $154.7 million, and sales also increased 12 percent to $1.0
billion, due to the continued strength of the commercial, regional, business and
military aircraft markets as well as the positive impact of complementary
acquisitions made over the last two years. In the Engineered Industrial Products
segment, sales for the quarter declined slightly to $176.2 million from $177.6
million, reflecting continuing general weakness in the markets for the company's
industrial products. Operating income decreased 23 percent to $25.9 million
primarily due to product mix and volume, pricing pressures and the impact of
increased utility costs, which also negatively impacted our aerospace
operations.
FIRST QUARTER HIGHLIGHTS
- ------------------------
During the quarter, Goodrich successfully completed the sale of its Performance
Materials segment to focus on its aerospace and industrial businesses. The $1
billion in net cash proceeds were applied to reduce debt for the near term,
lowering the company's net debt (total debt minus cash on hand) to total
capitalization ratio to 40% from 59% at year-end 2000. With this enhanced
financial capacity, Goodrich is well-positioned to execute a variety of
value-creating strategies.
The company also announced one of the largest contracts in its history when
Airbus selected Goodrich to supply the main and wing landing gear for the new
A380 aircraft. That contract could be worth between $2 to $3 billion in original
equipment and aftermarket product and service revenues over the next 20 years,
depending upon the number of aircraft ordered.
Two complementary acquisitions were completed during the quarter. In Aerospace,
the expansion of the sensor product line continued with the acquisition of
Humphrey Inc., a leading inertial gyroscope producer for unmanned aerial
vehicles and other applications. In Engineered Industrial Products, the
acquisition of Air Science Engineering added enhanced systems capabilities to
the compressor business.
Page 2 of 4 PR01-045 BFGoodrich Reports Strong First Quarter Results
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[BFGoodrich LOGO] NEWS
Goodrich also announced that its MEMS (Micro-ElectroMechanical Systems)
technology development team has entered into a long-term agreement to design and
produce a MEMS-based optical switch for Movaz Networks to be used in its
telecommunications and data/internet communication applications. MEMS is a key
component in true optical switching, and systems using MEMS will be at the core
of rebuilding the Internet for much faster services. Optical switching is
Goodrich's first major non-aerospace application of its MEMS technology and
could be a very high-growth business. MEMS is a one of several promising new
products and technologies reflecting the company's commitment to innovation and
top-line growth.
OUTLOOK
- -------
The company expects that 2001 will be another year of sales and EPS growth
driven by the strength of the Aerospace segment. Higher expected deliveries of
commercial transport aircraft, coupled with the company's increasingly strong
presence in the aftermarket and in regional and business aircraft markets should
generate record Aerospace results again in 2001. Engineered Industrial Products
results should be relatively flat as increased shipments of Fairbanks Morse(R)
engines and Quincy(R) compressors and the introduction of new products are
expected to offset continued weakness in automotive, truck and trailer, and
general industrial markets. Fairbanks Morse is beginning to see more activity in
the markets for its power generation engines, which could potentially add
revenue in future periods.
In light of this outlook, the company expects its second quarter fully diluted
EPS results to reflect at least double-digit growth versus the second quarter
2000 results of $0.73 per share, excluding special items. Assuming that current
commercial transport deliveries and revenue passenger mile volume forecasts are
accurate and that the economic outlook for industrial products does not
deteriorate further in the second half of 2001, the company continues to expect
full-year earnings, excluding special items, to be between $3.40 and $3.50 per
share.
In commenting on the outlook, Mr. Burner said, "We remain dedicated to creating
shareholder value as we continue to invest in profitable growth to strengthen
the enterprise. And we look forward to becoming Goodrich Corporation officially
on June 1, 2001, following the approval by our shareholders at our recent annual
meeting."
Page 3 of 4 PR01-045 BFGoodrich Reports Strong First Quarter Results
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[BFGoodrich LOGO] NEWS
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.
Goodrich is included on Forbes magazine's Platinum List of America's best big
companies and is ranked by Fortune magazine as one of the most admired aerospace
companies. The company has its headquarters in Charlotte, North Carolina, and
employs 24,000 people worldwide. For more information, please visit our website
at www.goodrich.com.
The tables that follow provide more detailed information about BFGoodrich
results for the first quarter.
[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.]
###
Page 4 of 4 PR01-045 BFGoodrich Reports Strong First Quarter Results
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THE BFGOODRICH COMPANY
(Dollars in millions except per share amounts)
Three Months Ended
March 31
--------------------------------------------------------------------------
2001 2001 2000 2000
As Reported As Adjusted(A) As Reported As Adjusted(B)
Sales $ 1,177.3 $ 1,177.3 $ 1,070.6 $ 1,070.6
=========== =========== =========== ===========
Income before Income Taxes
and Trust Distributions 129.6 128.2 120.1 125.5
Income Tax Expense (44.1) (43.6) (42.5) (44.5)
Distributions on Trust Preferred
Securities (4.6) (4.6) (4.6) (4.6)
----------- ----------- ----------- -----------
Income from Continuing Operations 80.9 80.0 73.0 76.4
Income from Discontinued Operations 91.4 -- 13.1 --
----------- ----------- ----------- -----------
Net Income $ 172.3 $ 80.0 $ 86.1 $ 76.4
=========== =========== =========== ===========
Income Per Share:
Basic
Continuing Operations $ 0.79 $ 0.78 $ 0.67 $ 0.70
Discontinued Operations 0.89 -- 0.12 --
----------- ----------- ----------- -----------
Net Income $ 1.68 $ 0.78 $ 0.79 $ 0.70
=========== =========== =========== ===========
Diluted
Continuing Operations $ 0.77 $ 0.76 $ 0.66 $ 0.69
Discontinued Operations 0.85 -- 0.12 --
----------- ----------- ----------- -----------
Net Income $ 1.62 $ 0.76 $ 0.78 $ 0.69
=========== =========== =========== ===========
Weighted - Average Number
of Shares Outstanding
(in millions):
Basic 102.9 102.9 109.5 109.5
=========== =========== =========== ===========
Diluted 107.2 107.2 112.9 112.9
=========== =========== =========== ===========
(A) Results exclude the effect of a $5.8 million charge ($3.8 million
after-tax), or $0.04 a diluted share, related to merger-related and
consolidation costs and a $7.2 million gain ($4.7 million after-tax), or
$0.05 a diluted share from the sale of a portion of the Company's interest
in a business. Results also exclude the after-tax effect of income from
discontinued operations ($91.4 million, or $0.85 a diluted share).
(B) Results exclude the effect of a $5.4 million charge ($3.4 million
after-tax), or $0.03 a diluted share, related to merger-related and
consolidation costs. Results also exclude the after-tax effect of income
from discontinued operations ($13.1 million, or $0.12 a diluted share).
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BFGOODRICH SEGMENT REPORTING
(Dollars in millions)
Three Months Ended
March 31
-----------------------------
2001 2000
Sales:
Aerospace:
Aerostructures and Aviation Services $ 359.8 $ 357.6
Landing Systems 289.6 260.1
Engine and Safety Systems 177.3 147.8
Electronic Systems 174.4 127.5
---------- ----------
1,001.1 893.0
---------- ----------
Engineered Industrial Products 176.2 177.6
---------- ----------
Total Sales $ 1,177.3 $ 1,070.6
========== ==========
Operating Income:
Aerospace:
Aerostructures and Aviation Services $ 52.6 $ 48.9
Landing Systems 40.8 37.3
Engine and Safety Systems 29.9 27.3
Electronic Systems 31.4 25.2
---------- ----------
154.7 138.7
---------- ----------
Engineered Industrial Products 25.9 33.6
---------- ----------
Total Segment Operating Income $ 180.6 $ 172.3
Corporate General and Administrative Costs (17.3) (18.7)
Merger-related and Consolidation Costs (5.8) (5.4)
---------- ----------
Total Operating Income $ 157.5 $ 148.2
========== ==========
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GOODRICH SEGMENT RESULTS
FIRST QUARTER 2001 VERSUS FOURTH QUARTER 2000
AEROSPACE SEGMENT
- -----------------
($ millions)
1Q01 4Q00
---- ----
Sales $1,001.1 $954.4
Operating Income 154.7 157.1
In the Aerospace segment, sales increased 5% from $954.4 in fourth quarter 2000
to $1,001.1 in the first quarter 2001. This increase was due to good performance
in Landing Systems, Engine and Safety Systems and Electronic Systems as well as
the positive affect of complimentary acquisitions, offset by decreases in
Aerostructures and Aviation Services partially related to the Super 27 program.
Operating income during the same period decreased $2.4 or 2% from $157.1 in the
fourth quarter to $154.7. The first quarter decreases are due primarily to
higher levels of strategic sales incentives in wheels and brakes as well as the
margins from recent acquisitions, which initially are lower than historical
Aerospace margins.
ENGINEERED INDUSTRIAL PRODUCTS SEGMENT
- --------------------------------------
($ millions)
1Q01 4Q00
---- ----
Sales $176.2 $163.0
Operating Income 25.9 26.9
In Engineered Industrial Products, sales in the first quarter increased 8% from
$163.0 in the fourth quarter to $176.2 in the first quarter of 2001. This
increase is primarily due to seasonal boosts in the sealing, bearings and
polymer product operations, and improvements in engine and compressed air
operations. Operating income decreased 4% from $26.9 in the fourth quarter to
$25.9 in the first quarter of 2001 primarily as a result of sales mix, increased
utility costs and pricing pressures.
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GOODRICH GROUP RESULTS
FIRST QUARTER 2001 VERSUS FIRST QUARTER 2000
GOODRICH AEROSPACE SEGMENT
--------------------------
AEROSTRUCTURES AND AVIATION SERVICES GROUP
- ------------------------------------------
($ millions)
1Q01 1Q00
---- ----
Sales $359.8 $357.6
Operating Income 52.6 48.9
Sales for the quarter increased 1% from $357.6 in the first quarter of 2000 to
$359.8 in the first quarter of 2001. This increase was primarily a result of
strong demand in commercial OE, especially to Airbus, offset by decreased sales
on the X-33 and Super 27 programs. Operating income for the quarter increased
$3.7, or 8%, from $48.9 in the first quarter to $52.6 in the first quarter of
2001. This increase is primarily attributable to the increased OE volume.
LANDING SYSTEMS GROUP
- ---------------------
($ millions)
1Q01 1Q00
---- ----
Sales $289.6 $260.1
Operating Income 40.8 37.3
Sales for the first quarter increased $29.5, or 11%, from $260.1 in the first
quarter of 2000, to $289.6 in the first quarter of 2001. This increase is
attributable to higher volume in almost all businesses, especially landing gear
OE and regional, business and military wheels and brakes. Operating income for
the quarter increased 9% to $40.8. This increase is primarily attributable to
the strength in RBM wheels and brakes, offset by weakness in landing gear
services as well as increases in strategic sales incentives for wheels and
brakes.
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ENGINE & SAFETY SYSTEMS GROUP
- -----------------------------
($ millions)
1Q01 1Q00
---- ----
Sales $177.3 $147.8
Operating Income 29.9 27.3
Sales for the first quarter increased $29.5, or 20%, from $147.8 in the first
quarter 2000 to $177.3 in the first quarter of 2001. This increase is a result
of increases in all product lines in the group, as well as positive effects of
the group's acquisition of OEA Aerospace. Operating income for the quarter
increased $2.6, or 10%, to $29.9. This increase is primarily attributable to
stronger volume experienced in the group, especially for industrial gas turbine
products. This increase is partially offset by continued R&D spending in
Passenger Restraint Systems.
ELECTRONIC SYSTEMS GROUP
- ------------------------
($ millions)
1Q01 1Q00
---- ----
Sales $174.4 $127.5
Operating Income 31.4 25.2
Sales for the quarter increased $46.9 or 37%, from $127.5 in the first quarter
2000 to $174.4 in the first quarter of 2001. The increase resulted from strong
performance throughout the business units, as well as positive results from the
group's acquisition of Raytheon Optical Systems. Operating income for the
quarter increased $6.2, or 25%, from $25.2 in the first quarter of 2000 to $31.4
in the first quarter of 2001. This growth is a result of higher volume and mix
at Fuel and Utility Systems, as well as reduced level pure investment at HUMS
due to receipt of incremental Government funding of the program. The OI growth
was somewhat dampened by continuing investment in new products such as
SMARTDECK(TM), TAWS, Skywatch HP and MEMS.
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GOODRICH ENGINEERED INDUSTRIAL PRODUCTS SEGMENT
-----------------------------------------------
($ millions)
1Q01 1Q00
---- ----
Sales $176.2 $177.6
Operating Income 25.9 33.6
Sales for the quarter decreased $1.4, or 1%, from $177.6 in the first quarter
2000 to $176.2 in the first quarter of 2001. The decrease in sales is primarily
attributable to continued softness in the heavy-duty truck and automotive
markets, partially offset by improvements in the engine and compressed air
businesses. Operating income decreased $7.7, or 23%, from $33.6 in the first
quarter to $25.9 in the first quarter of 2001. The decrease in operating income
was primarily due to volume, sales mix, increased utility costs and pricing
pressures.
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Non-Segment Expenses
--------------------
($ millions)
1Q01 1Q00
---- ----
Corporate G&A $17.3 $18.7
Net Interest Expense 27.3 23.6
Distribution on Trust
Preferred Securities 4.6 4.6
Preliminary Balance Sheet and Cash Flow Data
--------------------------------------------
($ millions)
YTD YTD
03/31/2001 03/31/2000
---------- ----------
Cash and Cash Equivalents $ 357.7 $ 76.8
Total Debt $1,497.6 $1,942.0
Net Debt to Capitalization 40.4% 54.5%
Capital Expenditures $ 44.3 $ 32.6
Acquisitions $ 16.4 $ 22.7
Dividends $ 28.1 $ 30.3
Depreciation and Amortization $ 49.9 $ 44.5
- - Depreciation $ 32.8 $ 31.4
- - Amortization $ 17.1 $ 13.1
- Goodwill Amortization $ 7.7 $ 6.4
(included in Amortization, above)
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ACCOUNTS RECEIVABLE
-------------------
($ millions)
2000 2001
Q1 Q2 Q3 Q4 Q1
-----------------------------------------------------------------------------
As Reported $ 617.9 $ 646.8 $ 708.6 $ 771.5 $ 768.1
Less: Corporate Receivables (78.4) (84.3) (102.5) (106.8) (131.8)
Less: Raytheon /OEA Receivables N/A N/A N/A $ (95.5) N/A
-----------------------------------------------------------------------------
Trade Accounts Receivable $ 539.5 $ 562.5 $ 606.1 $ 569.2 $ 636.3
Days sales outstanding (DSO)* 41.3 44.1 46.6 46.6 48.1
*DSO represents the number of preceding days sales
comprising the trade accounts receivable balance.
DSO, calculated using trade accounts receivable, was 48 days in the first
quarter of 2001, as compared to 47 days in the fourth quarter of 2000 and 41
days in the first quarter of 2000. Excluded from the first quarter 2001 DSO
calculation are receivables and sales at Raytheon Optical Systems, where amounts
outstanding do not correlate to current period revenues. Corporate receivables
are also excluded as these amounts, primarily receivables from insurance
carriers for asbestos claim settlements, are not correlated with revenue and
therefore distort the DSO calculation. A portion of corporate receivables was
reclassified from short-term to long-term, and as such, prior periods have been
reclassified to conform to current presentation. Fourth quarter 2000 has
Raytheon and OEA excluded because they were acquired at the end of the year and
there were no revenues associated with the receivables.
INVENTORY
---------
($ millions)
2000 2001
Q1 Q2 Q3 Q4 Q1
-----------------------------------------------------------------------------
Inventory* $ 831.0 $ 854.9 $ 880.2 $ 865.3 926.8
717-200 pre-production/
excess over average (140.5) (140.8) (136.3) $ (133.2) (128.5)
Raytheon & OEA Inventory N/A N/A N/A $ (27.9) N/A
-----------------------------------------------------------------------------
Adjusted inventory $ 690.5 $ 714.1 $ 743.9 $ 704.2 $ 798.3
Days sales in inventory (DSI) 53.8 56.6 58.6 57.9 58.6
*DSI represents the number of preceding days sales
comprising the inventory balance.
DSI, excluding pre-production and excess over average costs on the 717-200
program, was 59 days in the first quarter of 2001, as compared to 58 days in the
fourth quarter of 2000 and 54 days in the first quarter of 2000. This slight
increase is due to inventory build at Aerospace in anticipation of its normal
seasonal demand profile. Pre-production and excess over average costs on the
717-200 program are excluded as these amounts are not correlated with current
revenues and therefore distort the DSI calculation. Fourth quarter 2000 has
Raytheon and OEA excluded because they were acquired at the end of the year and
there were no revenues associated with the inventories.
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THE BFGOODRICH COMPANY
($ MILLIONS)
----------------------------------------------------------
2000 2001
------------------------------------======================
Q1 Q2 Q3 Q4 2000 Q1
------------------------------------======================
AEROSPACE
SALES Aerostructures & Aviation 357.6 348.4 375.4 374.1 1,455.5 359.8
Services
Landing Systems 260.1 259.0 265.9 272.7 1,057.7 289.6
Engine & Safety Systems 147.8 153.5 152.3 163.9 617.5 177.3
Electronic Systems 127.5 139.3 132.4 143.7 542.9 174.4
Total Trade Sales 893.0 900.2 926.0 954.4 3,673.6 1,001.1
OPERATING
INCOME Aerostructures & Aviation
Services 48.9 49.0 57.3 53.8 209.0 52.6
Landing Systems 37.3 35.1 35.7 40.9 149.0 40.8
Engine & Safety Systems 27.3 30.2 28.0 30.2 115.7 29.9
Electronic Systems 25.2 27.6 33.1 32.2 118.1 31.4
Total Operating Income 138.7 141.9 154.1 157.1 591.8 154.7
MARGIN Aerostructures & Aviation 13.7% 14.1% 15.3% 14.4% 14.4% 14.6%
Services
Landing Systems 14.3% 13.6% 13.4% 15.0% 14.1% 14.1%
Engine & Safety Systems 18.5% 19.7% 18.4% 18.4% 18.7% 16.9%
Electronic Systems 19.8% 19.8% 25.0% 22.4% 21.8% 18.0%
Total Operating Margin 15.5% 15.8% 16.6% 16.5% 16.1% 15.5%
------------------------------------======================
ENGINEERED INDUSTRIAL PRODUCTS
------------------------------------======================
SALES 177.6 182.2 167.4 163.0 690.2 176.2
OPERATING INCOME 33.6 32.6 29.0 26.9 122.1 25.9
MARGIN 18.9% 17.9% 17.3% 16.5% 17.7% 14.7%
======================
-------------------------------------------------------------------======================
TOTAL SALES 1,070.6 1,082.4 1,093.4 1,117.4 4,363.8 1,177.3
SEGMENT OPERATING INCOME 172.3 174.5 183.1 184.0 713.9 180.6
MARGIN 16.1% 16.1% 16.7% 16.5% 16.4% 15.3%
-------------------------------------------------------------------======================
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