Exhibit 99.1
Hexcel Reports 2004 Fourth Quarter and Year-End Results
STAMFORD, Conn.--(BUSINESS WIRE)--Jan. 25, 2005--Hexcel
Corporation (NYSE/PCX:HXL):
Fourth Quarter Highlights:
-- Net sales were $276.4 million, up 24.8% from fourth quarter,
2003, 21.8% higher on a constant currency basis.
-- Operating income of $20.6 million was up over 92% versus the
fourth quarter 2003.
-- Net income of $7.6 million was up $17.3 million from the same
quarter last year.
-- Total debt, net of cash decreased by $31.7 million for the
quarter.
Full Year Highlights:
-- Net sales were $1,074.5 million, up 19.8% from 2003, 16.6%
higher on a constant currency basis.
-- Operating income of $88.8 million was up by 48% versus 2003.
-- Net income of $28.8 million was up $39.9 million from last
year.
-- Total debt, net of cash decreased by $67.5 million to $374.2
million, a drop over 15%.
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Unaudited Unaudited
------------------------------
Quarter Ended Year Ended
December 31, December 31,
------------------------------
(In millions, except per share data) 2004 2003 2004 2003
- ----------------------------------------------------------------------
Net sales $276.4 $221.4 $1,074.5 $896.9
Gross margin % 21.0% 18.7% 21.3% 19.5%
Operating income $20.6 $10.7 $88.8 $60.0
Operating income % 7.5% 4.8% 8.3% 6.7%
Non-operating (income) expense, net $1.6 $- $2.2 $2.6
Provision for income taxes (a) $0.3 $7.6 $11.2 $13.5
Equity in earnings (losses) of
affiliated companies $0.3 $(0.3) $1.1 $(1.4)
Net income (loss) $7.6 $(9.7) $28.8 $(11.1)
Deemed preferred dividends and
accretion $(16.0) $(3.0) $(25.4) $(9.6)
Net income (loss) available to common
shareholders $(8.4)$(12.7) $3.4 $(20.7)
Diluted net income (loss) per common
share $(0.20)$(0.33) $0.08 $(0.54)
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(a) The Company's tax provision primarily reflects taxes on foreign
income. Included in the 2003 fourth quarter and year-end results
is the impact of the write-off of a Belgian deferred tax asset of
$4.7 million. The Company will continue to adjust its tax
provision rate through the establishment, or release, of a
non-cash valuation allowance attributable to currently generated
U.S. and Belgian net operating income (losses) until such time as
the U.S. and Belgian operations, respectively, generate income in
future years to utilize the net operating losses in full.
Constant Currency
To assist in the interpretation of the Company's net sales trend, the
value of total net sales and sales by market for the fourth quarter
and full year 2004, as disclosed in this news release, has been
estimated using the same U.S. dollar, British pound and Euro exchange
rates as applied for the respective periods in 2003. Such estimated
net sales are titled "constant currency" in this news release. Actual
sales by market segment are provided in Table A attached.
Hexcel Corporation (NYSE/PCX: HXL) today reported results for the
fourth quarter and full year of 2004. Net sales for the fourth quarter
of 2004 were $276.4 million, up 24.8% as compared to $221.4 million
for the fourth quarter of 2003. In constant currency, revenues for the
fourth quarter of 2004 were 21.8% higher than last year. Gross margin
for the fourth quarter of 2004 was $58.1 million, or 21.0% of sales,
compared with $41.3 million for the same period last year.
Operating income for the fourth quarter of 2004 was $20.6 million
as compared to $10.7 million for the same quarter last year. Included
within operating income (selling, general and administrative expenses)
in the fourth quarter of 2004 are $1.1 million of transaction costs
related to the previously disclosed secondary offering of shares of
the Company's common stock by certain of its stockholders.
Depreciation expense for the quarter of $13.1 million was $1.4 million
lower than the prior year, while business consolidation and
restructuring expenses were $0.9 million compared to $1.6 million in
the fourth quarter of 2003.
Net income for the quarter was $7.6 million compared to a net loss
of $9.7 million for the same quarter of 2003. During the fourth
quarter of 2004, the Company recorded a $1.6 million loss on early
retirement of debt in connection with its purchase of $23.0 million of
its senior subordinated notes due 2009. The loss is included in
non-operating income/expense in the Company's statement of operations.
Included in the Company's tax provision for the 2003 fourth quarter is
the write-off of a Belgian deferred tax asset of $4.7 million.
As previously disclosed, during the fourth quarter of 2004, the
Company recorded as part of deemed preferred dividends and accretion a
non-cash charge of $12.9 million related to the conversion of a
portion of its mandatorily redeemable convertible preferred stock into
common shares in connection with a secondary offering of common stock
in December. This charge, together with the ongoing quarterly
amortization of deemed preferred dividends and accretion, totaled
$16.0 million in the fourth quarter of 2004 compared to $3.0 million
in the same quarter of 2003. After reflecting deemed preferred
dividends and accretion, net loss available to common shareholders for
the fourth quarter of 2004 was $8.4 million, or $0.20 per diluted
common share, compared to a net loss of $12.7 million, or $0.33 per
diluted common share, for the fourth quarter of 2003.
For the full year of 2004, net sales were $1,074.5 million as
compared to $896.9 million in 2003, an increase of 19.8% (16.6% on a
constant currency basis). Gross margin increased to $229.1 million
from $174.5 million. Operating income of $88.8 million in 2004 was
$28.8 million higher than the $60.0 million of operating income
achieved in 2003. The improvement this year reflects higher sales
volumes, particularly from commercial aerospace and industrial market
applications. Included in full year 2004 operating income were $2.3
million of bad debt provision related to Second Chance Body Armor,
Inc., a ballistics customer that filed for protection under Chapter 11
of the U.S. Bankruptcy Code, a $7.0 million charge related to a
litigation settlement, a $4.0 million gain on the sale of land and
transaction costs of $1.1 million related to the Company's secondary
offering. Net income was $28.8 million for 2004 compared to a net loss
of $11.1 million in 2003. After reflecting deemed preferred dividends
and accretion, net income available to common shareholders for the
year was $3.4 million, or $0.08 per diluted common share, compared to
a net loss of $20.7 million, or $0.54 per diluted common share, in
2003.
Chief Executive Officer Comments
Commenting on the quarter and full year's results, Mr. David E.
Berges, Chairman, Chief Executive Officer and President, said, "After
almost three years of uncertain markets and painful actions, we are
thrilled with the trends in our markets as well as our resultant
earnings progress in 2004. Revenue growth first came from the
requirements of our body armor and military aircraft customers, and
then, starting mid year, from the decisions of Airbus and Boeing to
start increasing commercial aircraft production. More importantly, the
long term prospects for composites in aerospace advanced dramatically
in recent quarters. We have seen the rollout of the Airbus A380 super
jumbo jet with 22% composite content by weight, more than double the
percentage of all other current commercial aircraft. The next new
Airbus aircraft will see the introduction of carbon fiber wings and
move composite content to over 30%. The new Boeing 7E7 with carbon
fiber wings and fuselage is expected to contain over 50% composite
content. This increasing penetration of composites has the potential
to create an acceleration effect to the aerospace rebound for years to
come."
Mr. Berges continued, "The fundamental driver of our improving
performance is revenue growth and our success in delivering good
leverage through to the net income line. On increased revenues of
$177.6 million in 2004, we generated $54.6 million of gross margin - a
30.7% rate on the incremental sales. Net income for the year increased
by $39.9 million, despite a number of unusual items such as the carbon
fiber litigation settlement, a bad debt provision and Sarbanes-Oxley
costs which hurt our operating income leverage. But continued cash
focus led to lower interest expense and we had improved performance
from our joint ventures which helped us deliver net income in all four
quarters. We continued to generate free cash despite investing in our
growing businesses and we reduced net debt by another $67.5 million or
15.3% from the beginning of the year. The formula for success in 2005
will be the same. Our markets offer the continued potential for annual
double digit revenue growth and our task is to use our operating
leverage to deliver improved profitability as a result."
Fourth Quarter Revenue Trends
As in recent quarters, the year-over-year shift in foreign
exchange rates has continued to increase revenues compared to prior
period actual results. To provide a better understanding of the real
underlying trends, we have again provided constant currency revenues
in our discussion of revenue trends by market. Actual sales by market
segment are provided in Table A.
In constant currency, commercial aerospace revenues were $119.0
million for the fourth quarter of 2004, an increase of $28.0 million,
or 30.8%, over revenues in the same quarter of 2003. The year-on-year
increase reflects the increase in commercial aircraft build rates as
well as the ramp up of Airbus A380 production.
Industrial market revenues for the quarter in constant currency of
$87.9 million were up $15.1 million, or 20.7%, compared to revenues of
$72.8 million in the fourth quarter of 2003. The continued strength in
industrial market sales reflects higher demand for reinforcement
fabrics used in military body armor applications and increasing sales
of products used in wind energy applications.
Space and defense revenues in constant currency of $49.2 million
were up $4.0 million or 8.8% compared to the fourth quarter of 2003
reflecting continued growth in helicopter blade replacement programs
and higher military aircraft production offset by the cancellation of
the Comanche Program, which contributed $4.1 million of revenue to the
same quarter last year. Revenues from the electronics market were
$13.6 million in constant currency, up 9.7% compared to last year's
quarter.
2004 Full Year Revenue Trends and 2005 Outlook
Consolidated revenues in constant currency of $1,046.1 million for
2004 were 16.6% higher than 2003. In constant currency, commercial
aerospace revenues were $453.8 million for 2004, an increase of $63.9
million, or 16.4%, over the revenues in 2003. The year-on-year
increase reflects the benefit of higher aircraft build rates in 2005,
a favorable change in mix of aircraft being produced, and the benefit
of the new Airbus A380 program. We expect 2005 to show a continuation
of these trends.
Industrial market revenues for the year in constant currency were
$344.2 million, an increase of $69.3 million, or 25.2%, compared to
revenues of $274.9 million in 2003. The largest portion of this
revenue increase came from sales of reinforcement fabrics used in
military body armor applications. Sales to wind energy applications
also increased at a double digit rate year-on-year. In 2005, we expect
ballistic sales to remain at current levels but growth in wind
applications to accelerate and drive continued growth in this market.
Space & Defense revenues in constant currency of $187.8 million
were up $8.5 million, or 4.7%, from 2003, despite the termination of
the Comanche program which contributed $13.5 million of revenue last
year compared to $4.4 million this year. The Company provides
materials to a wide range of military programs. Over time, the
revenues the Company obtains from these programs tend to vary based on
customer ordering patterns and the timing and extent of program
funding.
Electronics revenues for the year in constant currency were $60.3
million compared to 2003 revenues of $52.8 million. The Company
continues to focus on higher-end electronics applications, and this
focus on advanced technology materials and specialty applications,
together with some recovery in industry demand, is contributing to
enhanced performance in our electronics business.
Debt
Total debt, net of cash, declined in the quarter by $31.7 million
to $374.2 million as of December 31, 2004. During 2004, total debt,
net of cash declined $67.5 million (see Table E for details of the
components of net debt). Inventories at December 31, 2004 were
slightly lower than September 30, 2004 and $23.7 million higher ($17.5
million higher in constant currency) than December 31, 2003. Accounts
receivable measured as days sales outstanding as of December 31, 2004
were comparable to the same quarter last year.
The Company anticipates that net debt will increase in the first
quarter of 2005 reflecting the usual seasonality in its cash flows. In
the first quarter of each year, working capital increases and there
are a number of annual cash payments. In the first quarter of 2005,
the Company will also make a $7.5 million investment in its existing
Chinese joint venture.
Interest expense during the fourth quarter and full year of 2004
was $11.4 million and $47.7 million, respectively, and compares to
interest expense of $12.5 million and $53.6 million in the respective
periods of 2003. The decline in interest expense during 2004 reflects
the Company's on-going efforts to reduce its total debt through open
market purchases (see Table C for details of the components of
interest expense).
The Company is exploring refinancing some or all of its debt to
reduce its interest expense. Consideration is being given to the
possible replacement, repurchase, refinancing, redemption, tender and/
or defeasance of its existing senior secured credit facility, 9.875%
Senior Secured Notes due 2008, 9.75% Senior Subordinated Notes due
2009 and 7% Convertible Debentures due 2011. The consummation of any
potential future refinancing transaction(s) will depend on various
factors, including market and economic conditions. There can be no
assurance that any potential refinancing will be consummated or, if
consummated, as to the terms thereof.
Capital expenditures for the quarter and year were $17.8 million
and $38.1 million respectively. We expect 2005 capital expenditures to
be more in line with our annual depreciation rate.
Independent Registered Public Accounting Firm's 2004 Report
Due to the requirements of Section 404 of the Sarbanes-Oxley Act,
the independent registered public accounting firm's audit report date
on the financial statements will be deferred until the Company files
its 2004 Annual Report on Form 10-K. This is a change from prior years
practice when the independent registered public accounting firm's
audit report date was typically rendered at the time of the Company's
earnings release.
Hexcel will host a conference call at 11:00 A.M. EST, on January
26, 2005 to discuss the fourth quarter and year-end results, and
respond to questions. The telephone number for the conference call is
(719) 457-2666 and the confirmation code is 0215492. The call will be
simultaneously hosted on Hexcel's web site at
www.hexcel.com/investors/index.html. Replays of the call will be
available on the web site for approximately three days.
Hexcel Corporation is a leading advanced structural materials
company. It develops, manufactures and markets lightweight,
high-performance reinforcement products, composite materials and
composite structures for use in commercial aerospace, space and
defense, electronics, and industrial applications.
Disclaimer on Forward-Looking Statements
This press release contains statements that are forward-looking,
including statements relating to anticipated trends in the market
segments the Company serves, 2005 full year consolidated revenues and
capital expenditures; and the Company's focus on generating cash and
reducing total debt. Actual results may differ materially from the
results anticipated in the forward-looking statements due to a variety
of factors, including but not limited to changing market conditions,
increased competition, product mix, inability to achieve planned
manufacturing improvements and cost reductions, conditions in the
financial markets and changes in currency exchange rates. Additional
risk factors are described in the Company's filings with the SEC. The
Company does not undertake an obligation to update its forward-looking
statements to reflect future events.
Hexcel Corporation and Subsidiaries
Condensed Consolidated Statements of Operations
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Unaudited
------------------------------
Quarter Ended Year Ended
December 31, December 31,
(In millions, except per share data) 2004 2003 2004 2003
- ----------------------------------------------------------------------
Net sales $276.4 $221.4 $1,074.5 $896.9
Cost of sales 218.3 180.1 845.4 722.4
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Gross margin 58.1 41.3 229.1 174.5
Selling, general and administrative
expenses 30.5 24.5 113.1 95.0
Research and technology expenses 6.1 4.5 21.3 17.7
Business consolidation and restructuring
expenses 0.9 1.6 2.9 4.0
Other (income) expense, net - - 3.0 (2.2)
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Operating income 20.6 10.7 88.8 60.0
Interest expense 11.4 12.5 47.7 53.6
Non-operating (income) expense, net 1.6 - 2.2 2.6
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Income (loss) before income taxes 7.6 (1.8) 38.9 3.8
Provision for income taxes 0.3 7.6 11.2 13.5
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Income (loss) before equity in earnings
(losses) 7.3 (9.4) 27.7 (9.7)
Equity in earnings (losses) of
affiliated companies 0.3 (0.3) 1.1 (1.4)
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Net income (loss) 7.6 (9.7) 28.8 (11.1)
Deemed preferred dividends and accretion (16.0) (3.0) (25.4) (9.6)
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Net income (loss) available to common
shareholders $ (8.4)$(12.7) $3.4 $(20.7)
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Net loss per common share (a):
Basic $(0.20)$(0.33) $0.09 $(0.54)
Diluted $(0.20)$(0.33) $0.08 $(0.54)
Weighted-average common shares
outstanding (a):
Basic 41.6 38.7 39.3 38.6
Diluted 41.6 38.7 42.1 38.6
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(a) Refer to Table D for further information relating to the
computations of basic and diluted net income (loss) per common
share.
Hexcel Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
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Unaudited
---------------------------
(In millions, except per share data) December September December
31, 2004 30, 2004 31, 2003
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Assets
Current assets:
Cash and cash equivalents $ 57.2 $ 51.5 $ 41.7
Accounts receivable, net 153.5 146.1 126.2
Inventories, net 144.2 144.9 120.5
Prepaid expenses and other assets 18.4 18.0 16.2
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Total current assets 373.3 360.5 304.6
Property, plant and equipment 734.0 697.7 688.0
Less accumulated depreciation (447.4) (425.7) (394.1)
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Net property, plant and equipment 286.6 272.0 293.9
Goodwill, net 78.3 76.7 76.9
Investments in affiliated companies 5.5 6.7 7.4
Other assets 33.1 34.7 39.9
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Total assets $ 776.8 $ 750.6 $ 722.7
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Liabilities and Stockholders' Equity
(Deficit)
Current liabilities:
Notes payable and current maturities of
capital lease obligations $ 1.0 $ 3.8 $ 2.1
Accounts payable 94.8 81.2 64.1
Accrued liabilities 120.2 115.1 97.7
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Total current liabilities 216.0 200.1 163.9
Long-term notes payable and capital lease
obligations 430.4 453.6 481.3
Other non-current liabilities 64.3 64.6 64.9
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Total liabilities 710.7 718.3 710.1
Mandatorily redeemable convertible
preferred stock, 0.125 shares of series A
and 0.125 shares of series B authorized;
0.101 shares of series A and 0.047 shares
of series B issued and outstanding at
December 31, 2004, and 0.125 shares of
series A and 0.125 shares of series B
issued and outstanding at September 30,
2004 and December 31, 2003 90.5 115.4 106.0
Stockholders' equity (deficit):
Preferred stock, no par value, 20.0 shares
of stock authorized, no shares issued or
outstanding - - -
Common stock, $0.01 par value, 200.0 shares
of stock authorized; 55.0 shares issued at
December 31, 2004, 41.0 shares issued at
September 30, 2004 and 40.0 shares issued
at December 31, 2003 0.5 0.4 0.4
Additional paid-in capital 334.5 299.9 303.5
Accumulated deficit (363.8) (371.4) (392.6)
Accumulated other comprehensive income
(loss) 18.4 2.0 8.8
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(10.4) (69.1) (79.9)
Less - Treasury stock, at cost, 1.4 shares
at December 31, 2004 and September 30,
2004, and 1.3 shares at December 31, 2003 (14.0) (14.0) (13.5)
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Total stockholders' equity (deficit) (24.4) (83.1) (93.4)
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Total liabilities and stockholders' equity
(deficit) $ 776.8 $ 750.6 $ 722.7
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Total debt, net of cash $ 374.2 $ 405.9 $ 441.7
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Hexcel Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows
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Unaudited
-----------------------------
Quarter Ended Year Ended
December 31, December 31,
(In millions) 2004 2003 2004 2003
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Cash flows from operating activities
Net income (loss) $ 7.6 $(9.7) $ 28.8 $ (11.1)
Reconciliation to net cash provided by
operating activities:
Depreciation 13.1 14.5 52.0 52.2
Amortization of debt discount and
deferred financing costs 0.7 0.9 3.3 3.5
Deferred income taxes (benefit) (0.6) 5.3 (1.1) 4.8
Business consolidation and
restructuring expenses 0.9 1.6 2.9 4.0
Business consolidation and
restructuring payments (0.9) (1.8) (4.7) (9.1)
Equity in (earnings) losses of
affiliated companies (0.3) 0.3 (1.1) 1.4
Working capital changes and other 19.9 8.6 5.8 1.2
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Net cash provided by operating
activities 40.4 19.7 85.9 46.9
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Cash flows from investing activities
Capital expenditures (17.8) (9.1) (38.1) (21.6)
Proceeds from sale of an ownership
interest in an affiliated company - - - 23.0
Proceeds from the sale of assets - - 6.5 5.7
Dividends from an affiliated company 1.5 1.0 3.0 2.0
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Net cash provided by (used for)
investing activities (16.3) (8.1) (28.6) 9.1
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Cash flows from financing activities
Proceeds from (repayments of) senior
secured credit facilities, net - (3.1) (4.1) 4.0
Proceeds from issuance of 9.875% senior
secured notes, net of discount - - - 123.7
Repayments of senior credit facility,
net - - - (179.7)
Redemption of 7% convertible
subordinated notes (1.7) - (1.7) (46.9)
Redemption of 9.75% senior subordinated
notes (24.1) - (47.0) -
Proceeds from (repayments of) capital
lease obligations and other debt, net (1.3) (0.7) (1.6) (39.2)
Proceeds from issuance of mandatorily
redeemable convertible preferred stock - - - 125.0
Issuance costs related to debt and
equity offerings - - - (14.1)
Activity under stock plans 9.2 0.1 12.8 0.3
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Net cash used for financing activities (17.9) (3.7) (41.6) (26.9)
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Effect of exchange rate changes on cash
and cash equivalents (0.5) 4.9 (0.2) 4.4
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Net increase (decrease) in cash and cash
equivalents 5.7 12.8 15.5 33.5
Cash and cash equivalents at beginning of
period 51.5 28.9 41.7 8.2
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Cash and cash equivalents at end of
period $ 57.2 $41.7 $ 57.2 $ 41.7
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Supplemental Data:
Cash interest paid $ 7.4 $ 7.3 $ 47.1 $ 51.7
Cash taxes paid, net of refunds $ 2.6 $ 1.1 $ 10.4 $ 9.4
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Hexcel Corporation and Subsidiaries Table A
Net Sales to Third-Party Customers by Product Group and Market Segment
- ----------------------------------------------------------------------
Unaudited
--------------------------------------------------
(In millions) Commercial Space &
Aerospace Industrial Defense Electronics Total
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Fourth Quarter 2004
Net Sales
Reinforcements $ 16.9 $ 45.2 $ - $13.9 $76.0
Composites 88.7 46.1 47.1 - 181.9
Structures 15.3 - 3.2 - 18.5
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Total $120.9 $91.3 $50.3 $13.9 $276.4
44% 33% 18% 5% 100%
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Third Quarter 2004
Net Sales
Reinforcements $ 16.9 $ 50.9 $ - $16.6 $84.4
Composites 84.8 37.4 39.0 - 161.2
Structures 14.8 - 2.7 - 17.5
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Total $116.5 $88.3 $41.7 $16.6 $263.1
44% 34% 16% 6% 100%
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Fourth Quarter 2003
Net Sales
Reinforcements $ 12.5 $ 35.2 $ - $12.4 $60.1
Composites 64.0 37.6 42.0 - 143.6
Structures 14.5 - 3.2 - 17.7
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Total $91.0 $72.8 $45.2 $12.4 $221.4
41% 33% 20% 6% 100%
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2004 Net Sales
Reinforcements $ 64.6 $193.0 $ - $61.8 $319.4
Composites 337.6 164.1 182.2 - 683.9
Structures 60.3 - 10.9 - 71.2
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Total $462.5 $357.1 $193.1 $61.8 $1,074.5
43% 33% 18% 6% 100%
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2003 Net Sales
Reinforcements $ 51.1 $128.9 $ - $52.8 $232.8
Composites 273.6 146.0 165.2 - 584.8
Structures 65.2 - 14.1 - 79.3
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Total $389.9 $274.9 $179.3 $52.8 $896.9
43% 31% 20% 6% 100%
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Hexcel Corporation and Subsidiaries Table B
Segment Data
- ----------------------------------------------------------------------
Unaudited
----------------------------------------------------
(In millions) Reinforcements Composites Structures Corporate Total
& Other
(a)
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Fourth Quarter 2004
- ----------------------------------------------------------------------
Net sales to
external
customers $ 76.0 $ 181.9 $ 18.5 $ - $276.4
Intersegment
sales 24.8 5.1 - - 29.9
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Total sales 100.8 187.0 18.5 - 306.3
Operating income
(loss) 9.2 20.2 1.5 (10.3) 20.6
Depreciation 4.2 8.4 0.4 0.1 13.1
Business
consolidation
and
restructuring
expenses 0.1 0.8 - - 0.9
Capital
expenditures 4.9 12.6 0.3 - 17.8
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Third Quarter 2004
- ----------------------------------------------------------------------
Net sales to
external
customers $ 84.4 $ 161.2 $ 17.5 $ - $263.1
Intersegment
sales 25.2 4.9 - - 30.1
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Total sales 109.6 166.1 17.5 - 293.2
Operating income
(loss) 9.9 19.1 1.0 (11.4) 18.6
Depreciation 3.9 8.0 0.5 - 12.4
Business
consolidation
and
restructuring
expenses 0.1 0.5 - - 0.6
Capital
expenditures 1.8 6.6 - 0.1 8.5
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Fourth Quarter 2003
- ----------------------------------------------------------------------
Net sales to
external
customers $ 60.1 $ 143.6 $ 17.7 $ - $221.4
Intersegment
sales 20.3 4.0 - - 24.3
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Total sales 80.4 147.6 17.7 - 245.7
Operating income
(loss) 4.0 13.8 0.6 (7.7) 10.7
Depreciation 5.3 8.6 0.5 0.1 14.5
Business
consolidation
and
restructuring
expenses 0.8 0.5 0.1 0.2 1.6
Capital
expenditures 2.5 6.4 0.2 - 9.1
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Full Year 2004
- ----------------------------------------------------------------------
Net sales to
external
customers $319.4 $ 683.9 $ 71.2 $ - $1,074.5
Intersegment
sales 103.3 19.0 - - 122.3
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Total sales 422.7 702.9 71.2 - 1,196.8
Operating income
(loss) 39.7 89.1 3.8 (43.8) 88.8
Depreciation 16.5 33.5 1.9 0.1 52.0
Business
consolidation
and
restructuring
expenses 0.7 2.3 - (0.1) 2.9
Capital
expenditures 10.3 26.4 0.4 1.0 38.1
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Full Year 2003
- ----------------------------------------------------------------------
Net sales to
external
customers $232.8 $ 584.8 $ 79.3 $ - $896.9
Intersegment
sales 83.7 15.6 - - 99.3
- ----------------------------------------------------------------------
Total sales 316.5 600.4 79.3 - 996.2
Operating income
(loss) 16.2 66.8 4.2 (27.2) 60.0
Depreciation 17.3 32.7 2.1 0.1 52.2
Business
consolidation
and
restructuring
expenses 1.8 1.8 0.2 0.2 4.0
Capital
expenditures 6.9 14.4 0.3 - 21.6
- ----------------------------------------------------------------------
(a) The Company does not allocate corporate expenses to its business
segments.
Hexcel Corporation and Subsidiaries Table C
Schedule of Interest Expense
- ----------------------------------------------------------------------
Unaudited
-----------------------------
Quarter Ended Year Ended
December 31, December 31,
(In millions) 2004 2003 2004 2003
- ----------------------------------------------------------------------
Interest on debt instruments $ 10.3 $ 11.2 $ 43.0 $48.4
Banking, commitment and other fees 0.3 0.4 1.4 1.7
Amortization of financing costs and
discounts (non-cash) 0.8 0.9 3.3 3.5
- ----------------------------------------------------------------------
Interest Expense $ 11.4 $ 12.5 $ 47.7 $53.6
- ----------------------------------------------------------------------
Hexcel Corporation and Subsidiaries Table D
Schedule of Net Income (Loss) Per Common Share (a)
- ----------------------------------------------------------------------
Unaudited
-----------------------------
Quarter Ended Year Ended
December 31, December 31,
(In millions, except per share data) 2004 2003 2004 2003
- ----------------------------------------------------------------------
Basic net income (loss) per common
share:
Net income (loss) $ 7.6 $ (9.7) $28.8 $(11.1)
Deemed preferred dividends and
accretion (16.0) (3.0) (25.4) (9.6)
- ----------------------------------------------------------------------
Net (loss) income available to
common shareholders $ (8.4) $(12.7) $ 3.4 $(20.7)
- ----------------------------------------------------------------------
Weighted average common shares
outstanding 41.6 38.7 39.3 38.6
Basic net income (loss) per common
share $(0.20) $(0.33) $0.09 $(0.54)
- ----------------------------------------------------------------------
Diluted net income (loss) per common
share:
Net income (loss) $ 7.6 $ (9.7) $28.8 $(11.1)
Deemed preferred dividends and
accretion (16.0) (3.0) (25.4) (9.6)
- ----------------------------------------------------------------------
Net (loss) income available to common
shareholders $ (8.4) $(12.7) $ 3.4 $(20.7)
Plus: Deemed preferred dividends and
accretion - - - -
- ----------------------------------------------------------------------
Net income (loss) available to common
shareholders plus assumed
conversions $ (8.4) $(12.7) $ 3.4 $(20.7)
- ----------------------------------------------------------------------
Weighted average common shares
outstanding - Basic 41.6 38.7 39.3 38.6
Plus incremental shares from assumed
conversions:
Restricted stock units - - 0.5 -
Stock options - - 2.3 -
Mandatorily redeemable convertible
preferred stock - - - -
- ----------------------------------------------------------------------
Weighted average common shares
outstanding - Diluted 41.6 38.7 42.1 38.6
- ----------------------------------------------------------------------
Diluted net income (loss) per common
share $(0.20) $(0.33) $0.08 $(0.54)
- ----------------------------------------------------------------------
(a) The Company's convertible subordinated debentures, due 2011, and
the mandatorily redeemable convertible preferred stock were
excluded from the computations of diluted net income (loss) per
common share for the quarters and the year ended December 31, 2004
and 2003, as they were antidilutive. In addition, the Company's
convertible subordinated notes, due 2003, were excluded from the
computation of diluted net income (loss) per common share for the
year ended December 31, 2003, as they were antidilutive. The
convertible subordinated notes, due 2003, were repaid in full on
March 19, 2003. Had earnings not been antidilutive, the diluted
share count for the quarter would have been 94.0 million and for
the year 91.5 million.
Hexcel Corporation and Subsidiaries Table E
Schedule of Net Debt
- ----------------------------------------------------------------------
Unaudited
----------------------------
December September December
31, 30, 31,
(In millions) 2004 2004 2003
- ----------------------------------------------------------------------
Senior Secured Credit Facility, due 2008 $ - $ - $ 4.0
European credit and overdraft facilities 0.7 1.7 1.9
9.875% Senior secured notes, due 2008,
net of unamortized discount of $0.9 as
of December 31, 2004 and as of September
30, 2004 and $1.1 as of December 31,
2003 124.1 124.1 123.9
9.75% Senior subordinated notes, due 2009,
net of unamortized discount of $0.6 as
of December 31, 2004, $0.7 as of
September 30, 2004, and $1.0 as of
December 31, 2003 (a) 283.3 306.7 328.5
7.0% Convertible subordinated debentures,
due 2011 19.2 21.0 21.0
- ----------------------------------------------------------------------
Total notes payable 427.3 453.5 479.3
Capital lease obligations 4.1 3.9 4.1
- ----------------------------------------------------------------------
Total notes payable and capital lease
obligations $431.4 $457.4 $483.4
- ----------------------------------------------------------------------
Cash and cash equivalents 57.2 51.5 41.7
- ----------------------------------------------------------------------
Net Debt $374.2 $405.9 $441.7
- ----------------------------------------------------------------------
(a) Includes a decrease of $1.4 million at December 31, 2004, $0.8
million at September 30, 2004; and a decrease of $0.5 million at
December 31, 2003 for derivative contracts under SFAS No. 133.
During the fourth quarter of 2003, the Company entered into
interest rate swap agreements for an aggregate notional amount of
$100.0 million, effectively converting the fixed interest rate of
9.75% into variable interest rates.
CONTACT: Hexcel Corporation
Investors:
Stephen C. Forsyth, 203-969-0666 ext. 425
stephen.forsyth@hexcel.com
OR
Media:
Michael Bacal, 203-969-0666 ext. 426
michael.bacal@hexcel.com