Exhibit 99.1
Hexcel Reports Strong Results for Second Quarter 2005
STAMFORD, Conn.--(BUSINESS WIRE)--July 25, 2005--Hexcel
Corporation (NYSE/PCX: HXL):
Second quarter, 2005 compared to second quarter, 2004
-- Net sales up 14.4% to $311.3 million with commercial aerospace
up 25.6%
-- Operating income up 42.5% to $36.9 million or 11.9% of net
sales versus $ 25.9 million or 9.5%
-- Total debt, net of cash, decreases by $22.0 million to $434.8
million
-- Diluted earnings per common share increases by 180% to $0.28
Unaudited Unaudited
--------------- ---------------
Quarter Ended Six Months
Ended
June 30, June 30,
--------------- ---------------
(In millions, except per share data) 2005 2004 2005 2004
- -------------------------------------- ------- ------- ------- -------
Net sales $311.3 $272.2 $601.9 $535.0
Gross margin % 22.7% 22.6% 22.7% 21.7%
Operating income $36.9 $25.9 $69.8 $49.6
Operating income % 11.9% 9.5% 11.6% 9.3%
Non-operating expense, net $0.6 $0.5 $40.9 $0.6
Provision for income taxes (a) $3.6 $5.2 $7.2 $8.6
Equity in earnings of affiliated
companies $0.9 $0.5 $1.4 $0.8
Net income $26.2 $8.8 $3.8 $16.9
Deemed preferred dividends and
accretion $(2.3) $(3.1) $(4.6) $(6.2)
Net income (loss) available to common
shareholders $23.9 $5.7 $(0.8) $10.7
Diluted net income (loss) per common
share $0.28 $0.10 $(0.01) $0.19
- -------------------------------------- ------- ------- ------- -------
(a) The Company's tax provision primarily reflects taxes on the
income of its foreign subsidiaries. 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 pre-tax income (losses) until such time as the U.S.
and Belgian operations, respectively, have evidenced the ability to
consistently generate income such that in future years management can
reasonably expect that the deferred tax assets can be utilized, at
which point some or all of the current valuation allowance would be
reversed.
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 second quarter
and first six months of 2005, 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 period in 2004. 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 strong results
for the second quarter of 2005. Net sales for the second quarter of
2005 were $311.3 million, 14.4% higher than the $272.2 million
reported for the second quarter of 2004. Operating income for the
second quarter of 2005 was $36.9 million compared to $25.9 million for
the same quarter last year, a 42.5% increase. Operating income margin
as a percentage of sales increased to 11.9% from 9.5% in the second
quarter of 2004. Net income for the quarter was $26.2 million compared
to net income of $8.8 million in the second quarter of 2004. The
non-cash expense related to deemed preferred dividends and accretion
was $2.3 million compared to $3.1 million in the second quarter of
2004. Net income available to common shareholders for the quarter was
$23.9 million, or $0.28 per diluted common share, compared to net
income of $5.7 million, or $0.10 per diluted common share, for the
second quarter of 2004.
Included as part of other (income) expense in operating income are
gains on the sale of assets of $1.4 million and $4.0 million in the
second quarter of 2005 and 2004, respectively, and accruals for
certain legal matters of $0.5 million in 2005 and $5.5 million in
2004. In addition, the Company established a $0.6 million bad debt
provision, which was included in selling, general and administrative
expenses during the second quarter of 2005, against the remainder of
its accounts receivable from Second Chance Body Armor, Inc. ("Second
Chance"), a ballistics customer that filed for protection under
Chapter 11 of the U.S. Bankruptcy Code in October 2004. Depreciation
expense for the quarter was $11.8 million compared to $13.2 million in
the second quarter of 2004, while business consolidation and
restructuring expenses for the quarter were $0.4 million compared to
$0.9 million in the second quarter of 2004.
Chief Executive Officer Comments
"This quarter represents Hexcel's strongest financial performance
since 1998. At 11.9% operating margin, it was our sixth consecutive
quarter of year on year growth in both operating income and operating
margin." said Chairman, President and CEO, Mr. David E. Berges.
"Further, with good overhead control and the benefit of our recent
debt refinancing, we nearly tripled our net income this quarter
compared to a year ago."
Mr. Berges concluded: "We continue to see positive developments in
the commercial aerospace market. Boeing and Airbus continue to report
increased new aircraft orders compared to last year. Reports from the
Paris air show indicated the rapidly growing demand for the Boeing 787
and Airbus A350 aircraft, two aircraft that symbolize the step change
in composite usage within the commercial aerospace market. These
planes will enter into production later in the decade. The
significantly greater composite content on these aircraft offers the
potential that our commercial aerospace sales will continue to grow
even if growth in aircraft deliveries slows down. In the nearer term,
we believe we will continue to see the positive benefits in our
results from the growth in production of the current generation of
commercial aircraft and the introduction of the Airbus A380."
Revenue Trends
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, revenues for the second quarter of
2005 were $307.4 million, or 12.9% higher than the second quarter of
2004.
In constant currency, commercial aerospace segment revenues were
$142.8 million for the second quarter of 2005, an increase of 24.6%
over revenues of $114.6 million reported for the second quarter of
2004, primarily as a result of increased aircraft production by Airbus
and Boeing. With further production increases announced by Boeing and
Airbus in 2006, the Company expects growth in commercial aerospace
sales to continue in the second half of 2005 and into 2006. The push
back by Airbus of some of its initial A380 deliveries is not
anticipated to significantly impact revenue growth.
Industrial market segment revenues in constant currency for the
quarter were $96.3 million, an increase of 4.0% compared to a strong
quarter with revenues of $92.6 million last year. Sales of composites
products to wind energy applications increased significantly this
quarter compared to the second quarter of 2004 and led the overall
growth of the industrial market segment, reflecting the underlying
growth in global wind turbine installations and share gains the
Company made in 2004. The Company continues to anticipate significant
growth from wind energy applications will be sustained for the full
year 2005 compared to 2004, continuing to drive overall industrial
revenue growth. Demand for the Company's reinforcement fabrics used in
ballistic applications remained robust, but were lower than the second
quarter, 2004 when the Company had record ballistic sales. Sales to
Second Chance for the second quarter and year-to-date were
significantly lower compared to 2004, corresponding to lower levels of
business at Second Chance as they try to reorganize under Chapter 11
of the U.S. Bankruptcy Code. As in the first quarter, 2005, aggregate
revenues from all other industrial applications were modestly lower
than in the same quarter last year. The shortage of carbon fiber for
non-aerospace applications as a result of the rapid upturn in
aerospace demand continued to limit industrial growth opportunities in
the quarter.
Space & defense revenues in constant currency of $53.1 million
were up 7.3%, compared to revenues of $49.5 million in the second
quarter of 2004. The Company's revenues from military and space
programs tend to vary from quarter to quarter more than revenues from
programs in other market segments, due to customer ordering patterns
and the timing of manufacturing campaigns.
Electronics market segment revenues for the quarter in constant
currency were $15.2 million, 1.9% lower than the second quarter 2004
revenues of $15.5 million. While the Company remains focused on
high-technology and specialty applications for its electronic
materials and is targeting growth in these applications, future
performance in this segment remains difficult to predict.
Taxes
The Company recorded a tax provision of $3.6 million for the
quarter primarily reflecting taxes on income of its foreign
subsidiaries. The Company continues 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
pre-tax income (losses). This practice will continue until such time
as the U.S. and Belgian operations, respectively, have evidenced the
ability to consistently generate income such that in future years
management can reasonably expect that the deferred tax assets can be
utilized. While the performance of the Company's U.S. operations has
improved significantly in recent quarters, the Company needs to
evidence sustained performance in its reported results before it can
conclude to reverse some or all of its valuation allowance. Until such
time as it reverses the valuation allowance, the Company will continue
to report earnings without a tax provision on its U.S. pre-tax income
(losses). At such time that the Company reverses the valuation
allowance, it will start to record a provision for income taxes on its
U.S. income and as a result its tax provision rate shall increase to
more normalized levels.
Debt and Interest Expense
Total debt, net of cash decreased in the quarter by $22.0 million
to $434.8 million as of June 30, 2005 (see Table G for the components
of net debt).
Interest expense during the quarter was $7.4 million compared to
$11.9 million in both the first quarter of 2005 and the second quarter
of 2004. The reduction in interest expense reflects the benefits of
lower interest rates as a result of the Company's debt refinancing
which occurred during the first quarter of 2005 (see Table C for the
components of interest expense).
Hexcel will host a conference call at 12:00 P.M. EDT, tomorrow,
July 26, 2005 to discuss the second quarter results and respond to
questions. The telephone number for the conference call is (913)
981-5520 and the confirmation code is 4444169. 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 (including increases in production of
commercial aircraft, increased composite penetration of commercial
aircraft and the growth in revenues from wind energy applications),
quarterly interest expense, and the Company's focus on generating
cash. 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
- ----------------------------------------------------------------------
Unaudited
-----------------------------
Quarter Ended Six Months
June 30, Ended June 30,
(In millions, except per share data) 2005 2004 2005 2004
- ----------------------------------------------------------------------
Net sales $311.3 $272.2 $601.9 $535.0
Cost of sales 240.7 210.7 465.5 418.9
- ----------------------------------------------------------------------
Gross margin 70.6 61.5 136.4 116.1
Selling, general and administrative
expenses 28.2 28.2 54.8 53.7
Research and technology expenses 6.0 5.0 11.7 9.9
Business consolidation and restructuring
expenses 0.4 0.9 0.8 1.4
Other (income) expense, net (0.9) 1.5 (0.7) 1.5
- ----------------------------------------------------------------------
Operating income 36.9 25.9 69.8 49.6
Interest expense 7.4 11.9 19.3 24.3
Non-operating expense, net 0.6 0.5 40.9 0.6
- ----------------------------------------------------------------------
Income before income taxes 28.9 13.5 9.6 24.7
Provision for income taxes 3.6 5.2 7.2 8.6
- ----------------------------------------------------------------------
Income before equity in earnings 25.3 8.3 2.4 16.1
Equity in earnings of affiliated
companies 0.9 0.5 1.4 0.8
- ----------------------------------------------------------------------
Net income 26.2 8.8 3.8 16.9
Deemed preferred dividends and accretion (2.3) (3.1) (4.6) (6.2)
- ----------------------------------------------------------------------
Net income (loss) available to common
shareholders $ 23.9 $ 5.7 $ (0.8)$ 10.7
- ----------------------------------------------------------------------
Net income (loss) per common share (a):
Basic $ 0.44 $ 0.14 $(0.01)$ 0.27
Diluted $ 0.28 $ 0.10 $(0.01)$ 0.19
Weighted-average common shares (a):
Basic 54.5 39.2 54.2 39.0
Diluted 94.9 91.3 54.2 91.2
- ----------------------------------------------------------------------
(a) Refer to Table F 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
- ----------------------------------------------------------------------
Unaudited
-----------------------------
(In millions, except per share data) June 30, March 31, December 31,
2005 2005 2004
- ----------------------------------------------------------------------
Assets
Current assets:
Cash and cash equivalents $ 18.5 $ 26.2 $ 57.2
Accounts receivable, net 176.4 169.8 153.5
Inventories, net 154.6 160.1 144.2
Prepaid expenses and other current
assets 13.7 12.8 18.4
- ----------------------------------------------------------------------
Total current assets 363.2 368.9 373.3
Property, plant and equipment 705.8 715.4 734.0
Less accumulated depreciation (441.7) (442.4) (447.4)
- ----------------------------------------------------------------------
Net property, plant and equipment 264.1 273.0 286.6
Goodwill 75.7 76.6 78.3
Investments in affiliated companies 14.0 14.1 5.5
Other assets 36.3 33.7 33.1
- ----------------------------------------------------------------------
Total assets $ 753.3 $ 766.3 $ 776.8
- ----------------------------------------------------------------------
Liabilities and Stockholders' Equity
(Deficit)
Current liabilities:
Notes payable and current maturities of
capital lease obligations $ 5.4 $ 4.6 $ 1.0
Accounts payable 90.8 97.7 94.8
Accrued liabilities 92.6 91.1 120.2
- ----------------------------------------------------------------------
Total current liabilities 188.8 193.4 216.0
Long-term notes payable and capital lease
obligations 447.9 478.4 430.4
Other non-current liabilities 65.8 62.0 64.3
- ----------------------------------------------------------------------
Total liabilities 702.5 733.8 710.7
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 95.0 92.8 90.5
Stockholders' equity (deficit):
Preferred stock, no par value, 20.0
shares authorized, no shares
issued or outstanding - - -
Common stock, $0.01 par value, 200.0
shares authorized,
and 56.3 shares issued at June 30,
2005, 55.8 shares issued at
March 31, 2005 and 55.0 shares issued
at December 31, 2004 0.6 0.6 0.5
Additional paid-in capital 338.3 336.3 334.5
Accumulated deficit (360.0) (386.2) (363.8)
Accumulated other comprehensive income
(loss) (7.7) 4.4 18.4
- ----------------------------------------------------------------------
(28.8) (44.9) (10.4)
Less - Treasury stock, at cost, 1.5
shares at June 30, 2005 and
March 31, 2005 and 1.4 shares at
December 31, 2004 (15.4) (15.4) (14.0)
- ----------------------------------------------------------------------
Total stockholders' equity (deficit) (44.2) (60.3) (24.4)
- ----------------------------------------------------------------------
Total liabilities and stockholders'
equity (deficit) $ 753.3 $ 766.3 $ 776.8
- ----------------------------------------------------------------------
Total debt, net of cash $ 434.8 $ 456.8 $ 374.2
- ----------------------------------------------------------------------
Hexcel Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows
- ----------------------------------------------------------------------
Unaudited
------------------------------
Quarter Ended Six Months
June 30, Ended June 30,
(In millions) 2005 2004 2005 2004
- ----------------------------------------------------------------------
Cash flows from operating activities
Net income $ 26.2 $ 8.8 $ 3.8 $ 16.9
Reconciliation to net cash provided by
(used for) operating
activities:
Depreciation 11.8 13.2 24.1 26.5
Amortization of debt discount and
deferred financing costs 0.4 0.8 1.2 1.7
Deferred income taxes (benefit) 0.3 0.1 0.3 (0.1)
Business consolidation and
restructuring expenses 0.4 0.9 0.8 1.4
Business consolidation and
restructuring payments (0.3) (1.3) (1.1) (2.8)
Equity in earnings of affiliated
companies (0.9) (0.5) (1.4) (0.8)
Working capital changes and other (15.1) (3.8) (31.2) (21.9)
- ----------------------------------------------------------------------
Net cash provided by (used for)
operating activities 22.8 18.2 (3.5) 20.9
- ----------------------------------------------------------------------
Cash flows from investing activities
Capital expenditures (9.1) (7.3) (16.6) (11.8)
Proceeds from the sale of assets 1.4 6.5 1.4 6.5
Dividends from affiliated companies 1.1 1.5 1.1 1.5
Investment in affiliated companies - - (7.5) -
- ----------------------------------------------------------------------
Net cash provided by (used for)
investing activities (6.6) 0.7 (21.6) (3.8)
- ----------------------------------------------------------------------
Cash flows from financing activities
Proceeds from 6.75% senior subordinated
notes - - 225.0 -
Proceeds from (repayments of) senior
secured credit
facilities, net (32.0) 11.2 220.0 7.8
Repayments of 9.75% senior subordinated
notes - (12.4) (285.3) (22.9)
Redemption of 7.0% convertible
subordinated debentures - - (19.2) -
Redemption of 9.875% senior secured
notes - - (125.0) -
Proceeds from (repayments of) capital
lease obligations
and other debt, net 2.7 0.6 4.1 (1.2)
Issuance costs related to debt
offerings (0.4) - (12.2) -
Debt retirement costs - - (30.0) -
Activity under stock plans 3.5 2.3 5.8 1.9
- ----------------------------------------------------------------------
Net cash provided by (used for)
financing activities (26.2) 1.7 (16.8) (14.4)
------------------------------
Effect of exchange rate changes on cash
and cash equivalents 2.3 0.5 3.2 0.7
- ----------------------------------------------------------------------
Net increase (decrease) in cash and cash
equivalents (7.7) 21.1 (38.7) 3.4
Cash and cash equivalents at beginning
of period 26.2 24.0 57.2 41.7
- ----------------------------------------------------------------------
Cash and cash equivalents at end of
period $ 18.5 $ 45.1 $ 18.5 $ 45.1
- ----------------------------------------------------------------------
Supplemental Data:
Cash interest paid $ 2.1 $ 7.2 $ 26.4 $ 24.4
Cash taxes paid $ 4.3 $ 2.0 $ 6.9 $ 5.4
- ----------------------------------------------------------------------
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
- ------------------------------- ---------- ------- ----------- -----
Second Quarter 2005 Net
Sales
Reinforcements $ 18.5 $ 43.3 $ - $15.4 $ 77.2
Composites 108.2 54.9 50.4 - 213.5
Structures 17.2 - 3.4 - 20.6
- ----------------------------------------------------------------------
Total 143.9 98.2 53.8 15.4 311.3
46% 32% 17% 5% 100%
- ----------------------------------------------------------------------
First Quarter 2005 Net Sales
Reinforcements $ 17.3 $ 42.8 $ - $16.8 $ 76.9
Composites 98.3 50.6 46.8 - 195.7
Structures 15.6 - 2.4 - 18.0
- ----------------------------------------------------------------------
Total 131.2 93.4 49.2 16.8 290.6
45% 32% 17% 6% 100%
- ----------------------------------------------------------------------
Second Quarter 2004 Net
Sales
Reinforcements $ 15.9 $ 53.5 $ - $15.5 $ 84.9
Composites 83.6 39.1 47.0 - 169.7
Structures 15.1 - 2.5 - 17.6
- ----------------------------------------------------------------------
Total 114.6 92.6 49.5 15.5 272.2
42% 34% 18% 6% 100%
- ----------------------------------------------------------------------
First Six Months 2005
Net Sales
Reinforcements $ 35.8 $ 86.1 $ - $32.2 $154.1
Composites 206.5 105.5 97.2 - 409.2
Structures 32.8 - 5.8 - 38.6
- ----------------------------------------------------------------------
Total 275.1 191.6 103.0 32.2 601.9
46% 32% 17% 5% 100%
- ----------------------------------------------------------------------
First Six Months 2004
Net Sales
Reinforcements $ 30.8 $ 96.9 $ - $31.3 $159.0
Composites 164.1 80.6 96.1 - 340.8
Structures 30.2 - 5.0 - 35.2
- ----------------------------------------------------------------------
Total 225.1 177.5 101.1 31.3 535.0
42% 33% 19% 6% 100%
- ----------------------------------------------------------------------
Hexcel Corporation and Subsidiaries Table B
Segment Data
- ----------------------------------------------------------------------
Unaudited
-----------------------------------------------------
(In millions)
Corporate
Reinforcements Composites Structures & Other Total
(a)
- ------------------------------- ---------- ---------- --------- -----
Second Quarter 2005
- --------------------------------- ------------------------------------
Net sales to
external
customers $ 77.2 $ 213.5 $ 20.6 $ - $311.3
Intersegment
sales 33.1 6.0 - - 39.1
- ----------------------------------------------------------------------
Total sales 110.3 219.5 20.6 - 350.4
Operating income
(loss) 11.6 31.4 2.2 (8.3) 36.9
Depreciation 3.5 7.9 0.4 - 11.8
Business
consolidation and
restructuring
expenses - 0.4 - - 0.4
Capital
expenditures 1.8 7.2 - 0.1 9.1
- --------------------------------- ------------------------------------
First Quarter 2005
- --------------------------------- ------------------------------------
Net sales to
external
customers $ 76.9 $ 195.7 $ 18.0 $ - $290.6
Intersegment
sales 36.4 6.5 - - 42.9
- --------------------------------- ------------------------------------
Total sales 113.3 202.2 18.0 - 333.5
Operating income
(loss) 12.1 28.1 1.1 (8.4) 32.9
Depreciation 3.7 8.1 0.5 - 12.3
Business
consolidation and
restructuring
expenses - 0.4 - 0.1 0.4
Capital
expenditures 0.5 6.9 - - 7.5
- --------------------------------- ------------------------------------
Second Quarter 2004
- --------------------------------- ------------------------------------
Net sales to
external
customers $ 84.9 $ 169.7 $ 17.6 $ - $272.2
Intersegment
sales 26.9 4.4 - - 31.3
- --------------------------------- ------------------------------------
Total sales 111.8 174.1 17.6 - 303.5
Operating income
(loss) 13.0 27.2 0.8 (15.1) 25.9
Depreciation 4.2 8.5 0.5 - 13.2
Business
consolidation and
restructuring
expenses 0.3 0.6 - - 0.9
Capital
expenditures 2.1 4.2 0.1 0.9 7.3
- --------------------------------- ------------------------------------
First Six Months
2005
- --------------------------------- ------------------------------------
Net sales to
external
customers $ 154.1 $ 409.2 $ 38.6 $ - $601.9
Intersegment
sales 69.5 12.5 - - 82.0
- ----------------------------------------------------------------------
Total sales 223.6 421.7 38.6 - 683.9
Operating income
(loss) 23.7 59.5 3.3 (16.7) 69.8
Depreciation 7.2 16.0 0.9 - 24.1
Business
consolidation and
restructuring
expenses - 0.8 - - 0.8
Capital
expenditures 2.3 14.1 - 0.2 16.6
- ----------------------------------------------------------------------
First Six Months
2004
- --------------------------------- ------------------------------------
Net sales to
external
customers $ 159.0 $ 340.8 $ 35.2 $ - $535.0
Intersegment
sales 53.3 9.0 - - 62.3
- ----------------------------------------------------------------------
Total sales 212.3 349.8 35.2 - 597.3
Operating income
(loss) 20.6 49.8 1.3 (22.1) 49.6
Depreciation 8.4 17.1 1.0 - 26.5
Business
consolidation and
restructuring
expenses 0.5 1.0 - (0.1) 1.4
Capital
expenditures 3.6 7.2 0.1 0.9 11.8
- ----------------------------------------------------------------------
(a) The Company does not allocate corporate expenses to its business
segments.
Hexcel Corporation and Subsidiaries Table C
Schedule of Interest Expense
- ----------------------------------------------------------------------
Unaudited
---------------------------
Quarter Six Months
Ended Ended
June 30, June 30,
(In millions) 2005 2004 2005 2004
- ----------------------------------------------------------------------
Interest on debt instruments $ 6.8 $10.8 $17.4 $21.9
Banking, commitment and other fees 0.2 0.3 0.7 0.7
Amortization of financing costs and
discounts (non-cash) 0.4 0.8 1.2 1.7
- ----------------------------------------------------------------------
Interest Expense $ 7.4 $11.9 $19.3 $24.3
- ----------------------------------------------------------------------
Hexcel Corporation and Subsidiaries Table D
Schedule of Other (Income) Expense, Net
- ----------------------------------------------------------------------
Unaudited
---------------------------
Quarter Six Months
Ended Ended
June 30, June 30,
(In millions) 2005 2004 2005 2004
- ----------------------------------------------------------------------
Gain on sale of assets $(1.4) $(4.0) $(1.4) $(4.0)
Accrual for certain legal matters 0.5 5.5 0.7 5.5
- ----------------------------------------------------------------------
Other (Income) Expense, Net $(0.9) $ 1.5 $(0.7) $ 1.5
- ----------------------------------------------------------------------
Hexcel Corporation and Subsidiaries Table E
Schedule of Non-Operating Expense, Net
- ----------------------------------------------------------------------
Unaudited
---------------------------
Quarter Six Months
Ended Ended
June 30, June 30,
(In millions) 2005 2004 2005 2004
- ----------------------------------------------------------------------
(Gain) from the de-mutualization of an
insurance company $ - $(0.4) $ - $(1.0)
Loss on early retirement of debt, net 0.6 0.9 40.9 1.6
- ----------------------------------------------------------------------
Non-Operating Expense, Net $0.6 $ 0.5 $40.9 $ 0.6
- ----------------------------------------------------------------------
Hexcel Corporation and Subsidiaries Table F
Schedule of Net Income (Loss) Per Common Share
- ----------------------------------------------------------------------
Unaudited
----------------------------
Quarter Six Months
Ended Ended
June 30, June 30,
(In millions, except per share data) 2005 2004 2005 2004
- ----------------------------------------------------------------------
Basic net income (loss) per common share:
Net income $26.2 $ 8.8 $ 3.8 $16.9
Deemed preferred dividends and accretion (2.3) (3.1) (4.6) (6.2)
- ----------------------------------------------------------------------
Net income (loss) available to common
shareholders $23.9 $ 5.7 $ (0.8) $10.7
- ----------------------------------------------------------------------
Weighted average common shares
outstanding 54.5 39.2 54.2 39.0
Basic net income (loss) per common share $0.44 $0.14 $(0.01) $0.27
- ----------------------------------------------------------------------
Diluted net income (loss) per common share:
Net income $26.2 $ 8.8 $ 3.8 $16.9
Deemed preferred dividends and accretion (2.3) (3.1) (4.6) (6.2)
- ----------------------------------------------------------------------
Net income (loss) available to common
shareholders $23.9 $ 5.7 $ (0.8) $10.7
Plus: Deemed preferred dividends and
accretion 2.3 3.1 - 6.2
- ----------------------------------------------------------------------
Net income (loss) available to common
shareholders plus assumed conversions $26.2 $ 8.8 $ (0.8) $16.9
- ----------------------------------------------------------------------
Weighted average common shares
outstanding - Basic 54.5 39.2 54.2 39.0
Plus incremental shares from assumed
conversions:
Restricted stock units 0.5 0.4 - 0.4
Stock options 3.1 1.9 - 2.0
Convertible preferred stock 36.8 49.8 - 49.8
- ----------------------------------------------------------------------
Weighted average common shares outstanding
- Dilutive (a) 94.9 91.3 54.2 91.2
- ----------------------------------------------------------------------
Diluted net income (loss)
per common share $0.28 $0.10 $(0.01) $0.19
- ----------------------------------------------------------------------
(a) Due to the refinancing expense, the assumed conversion of the
mandatorily redeemable convertible preferred stock, restricted
stock units and stock options into shares of common stock in
the computation of diluted earnings per share were
anti-dilutive for the six month period ended June 30, 2005
and, as such, the basic weighted average common share count of
54.2 million was used in the diluted earnings per share
computation. Had we not incurred the $40.3 million charge
during the first quarter of 2005, the Company would have
calculated diluted earnings per share based on a diluted
weighted average share count of 94.5 million.
Hexcel Corporation and Subsidiaries Table G
Schedule of Net Debt
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Unaudited
----------------------
(In millions) June March December
30, 31, 31,
2005 2005 2004
- ----------------------------------------------------------------------
Senior Secured Credit Facility - Revolver, due
2010 $ 35.0 $ 27.0 $ -
Senior Secured Credit Facility - Term B Loan,
due 2012 185.0 225.0 -
European credit and overdraft facilities 4.6 2.1 0.7
6.75% Senior Subordinated Notes, due 2015 225.0 225.0 -
9.875% Senior secured notes, due 2008, net of
unamortized discount of $0.9 at
December 31, 2004 - - 124.1
9.75% Senior subordinated notes, due 2009, net
of unamortized discount of $0.6 at
December 31, 2004 (a) - - 283.3
7.0% Convertible subordinated debentures,
due 2011 - - 19.2
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Total notes payable 449.6 479.1 427.3
Capital lease obligations 3.7 3.9 4.1
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Total notes payable and capital lease
obligations $453.3 $483.0 $431.4
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Cash and cash equivalents 18.5 26.2 57.2
- ----------------------------------------------------------------------
Net Debt $434.8 $456.8 $374.2
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(a) Includes a decrease of $1.4 million at December 31, 2004 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