Exhibit 99.1
Hexcel Reports 2007 Second Quarter Results
STAMFORD, Conn.--(BUSINESS WIRE)--July 23, 2007--Hexcel
Corporation (NYSE: HXL):
Second Quarter 2007 Highlights
-- Sales from continuing operations of $289.8 million up $15.8
million or 5.8% year-on-year (3.0% in constant currency)
-- Commercial Aerospace sales of $154.7 million up 8.9% from the
second quarter 2006 of $142.0 million (7.4% in constant
currency)
-- Net income from continuing operations during the quarter of
$17.5 million, or $0.18 per diluted share
Results have been reclassified to reflect the U.S. electronics,
ballistics and general industrial reinforcement product lines ("EBGI")
as discontinued operations.
Hexcel Corporation (NYSE: HXL) today reported results for the
second quarter of 2007. Net sales from continuing operations in the
quarter were $289.8 million, 5.8% higher than the $274.0 million
reported for the second quarter of 2006. Related operating income for
the second quarter was $34.0 million compared to $33.9 million for the
same period last year. Net income from continuing operations for the
second quarter of 2007 was $17.5 million, or $0.18 per diluted share,
compared to $18.0 million in 2006. Net loss from discontinued
operations was $8.7 million, or $0.09 per diluted share including an
after-tax charge of $9.7 million for previously disclosed legal
matters. Discontinued operations consist of the assets of the U.S.
electronics, ballistics and general industrial reinforcement product
lines ("EBGI"), which we have entered into a definitive agreement to
sell to JPS Industries.
Chief Executive Officer Comments
Mr. Berges commented, "The second quarter saw a continuation of
the first quarter sales pattern for the commercial aerospace market.
Because of the A380 delay, Airbus sales were again down significantly
from a year ago, but strong demand from all other major customers
resulted in the almost 9% overall growth in our commercial aerospace
sales. Start-up, training and qualification efforts combined with some
unplanned maintenance outages put some pressure on our margins but we
still met our guidance targets and expect better year-on-year margin
expansion for the remainder of 2007."
"The ramp up of new B787 and A380 programs layered on top of
increasing aircraft build rates should provide opportunity for good
volume leverage next year. Longer term we are encouraged by the
continued strength in wind turbine and aircraft orders, especially the
new composite intensive A350 XWB. With the divestiture of non-core
assets nearly completed, our sharper focus should allow us to
capitalize on these market trends as well as emerging applications for
advanced composite materials."
Markets
Commercial Aerospace
-- Commercial aerospace sales grew for the quarter by 8.9% (7.4%
in constant currency). The growth was driven by strong sales
to Boeing, to manufacturers of engines and nacelles and to
regional aircraft producers. Sales to these customers were up
over 25% year-on-year for the second quarter in a row.
-- Sales to Airbus were again down double digits for the quarter
due to the A380 delay. Although we currently don't expect A380
demand to begin to recover until 2008, comparisons for the
second half of 2007 to the second half of 2006 become easier
as the A380 delays were evident in those quarters as well.
-- Hexcel remains focused on the product development and
selection requirements related to the new Boeing 787, Boeing
747-8 and Airbus A350 programs. Our efforts are evident in
higher levels of research and technology expenses which are
directly related to on-going qualification efforts for those
new programs.
Industrial
-- Industrial sales were essentially flat for the quarter (down
5.0% in constant currency) against a particularly strong
quarter last year. Q2 2006 sales were over 10% higher than any
other quarter in 2006. Sales of applications for the wind
energy market saw growth in the mid-teens in constant
currency, but were offset by a weak performance in the
recreation and other industrial markets.
-- Wind energy growth was in line with our guidance, however, if
not for component supply issues at our customers the growth
would have been even stronger. Global demand remains strong
and we expect to add capacity in China next year to support
regional growth.
-- Sales for recreation applications were lower than in the
comparable quarter of 2006 principally in the area of winter
recreational products, particularly in Europe due to the warm
winter season. Other industrial sales were lower than last
year as we continue to refine our focus on selected customers
and applications.
Space & Defense
-- Space & Defense sales for the quarter were up 5.3% over last
year (3.0% in constant currency), which combined with an
exceptionally strong first quarter bring the year to date
growth to 10.9%, in line with our guidance. Demand from
military fixed wing and rotor craft applications remains
solid, but the timing of orders in this market remains
difficult to predict.
Operations
-- Aerospace qualification processes are underway in a number of
locations including our new carbon fiber precursor line in
Decatur, AL; a new prepreg facility in Stade, Germany; the new
carbon fiber line in Salt Lake City, UT; and for prepreg
products transferred as part of the Livermore, CA closure. We
have also begun the training of newly hired Spanish employees
in Salt Lake City to assure a timely start-up of our new fiber
line in the Madrid area early next year.
-- Gross margins declined slightly to 24.3% in the quarter
compared to 24.6% in the second quarter of 2006. Unplanned
equipment outages resulted in higher maintenance, labor and
freight costs.
-- SG&A expenditures in the quarter of $27.4 million were $1.5
million higher than the second quarter of 2006. Significant
contributors to this increase include the impact of exchange
rates and costs incurred related to personnel transitions.
-- R&T spending increased $1.1 million in the quarter compared to
the second quarter of 2006 reflecting expenditures related to
new product development and qualification efforts for new
aircraft programs. Most of the increase was within our
Engineered Products operating segment as a result of
certification testing on Boeing 787 components made from our
new HexMC(R) system.
-- Operating income for the quarter, excluding business
consolidation and restructuring expense, was $34.5 million or
11.9% of sales, in line with our guidance for the year. (see
Table F).
-- Reclassified results from continuing operations for 2006 by
quarter have been posted to the investor news section of
Hexcel's web site.
Discontinued Operations
-- As previously disclosed, during the second quarter Hexcel
entered into a definitive agreement to sell EBGI to JPS
Industries for $62.5 million plus up to $12.5 million of
additional payments dependent upon future sales of the
Ballistics product line. The additional payments will be
recorded as income when earned.
-- The transaction is anticipated to close in the third quarter,
at which time we expect to record an after-tax loss of
approximately $2 - $3 million. We have concluded that the
transaction satisfies the accounting considerations necessary
for EBGI to be classified as "assets held for sale" and have
reported EBGI as "discontinued operations" in our financial
statements.
-- Sales for EBGI during the quarter were $45.7 million, or 28.4%
higher than the second quarter of 2006. The growth was driven
by a 60% increase in ballistic sales.
-- During the quarter, Hexcel established an after-tax reserve of
$9.7 million in connection with the anticipated settlement of
claims relating to the previously disclosed investigation by
the U.S. Department of Justice into the use of allegedly
defective Zylon fiber in ballistic vests purchased under U.S.
government funded programs. While Hexcel admits no wrongdoing,
we believe it serves us best to settle the U.S. claims to
avoid the distraction, costs and uncertainties of potential
litigation. The charge is included in the loss from
discontinued operations.
Income Taxes
-- The Company's effective income tax rate for the second quarter
2007 was 42.5%, as compared to 39.2% for the second quarter of
2006. The increase was primarily due to tax reserves for
exposures which have been accounted for in accordance with FIN
48. It is expected that FIN 48 will increase the volatility of
the effective tax rate.
Total Debt, Net of Cash
-- Total debt, net of cash of $367.9 million as of June 30, 2007
decreased by $20.2 million from $388.1 million as of March 31,
2007.
-- Inventories as of June 30, 2007 were substantially unchanged
compared to March 31, 2007, while cash used for the increase
in inventories since December 31, 2006 is about $14 million.
The growth in inventories since year end has been driven by a
number of factors, including tooling to mold finished parts
using the new HexMC(R) materials for the Boeing 787, increases
in aircraft production and normal seasonality. Despite these
requirements for additional inventory, Hexcel continues to
seek opportunities to improve its inventory turnover.
Guidance
-- Our prior guidance for 2007 was issued in December 2006 and
included the EBGI business. As a result of the expected
divestiture of the business in the third quarter, we have
updated our guidance for the year.
-- We had expected total sales to increase 5 - 10% for the year
assuming comparable exchange rates to 2006. We now expect we
will be in the upper end of that range as stronger than
expected commercial aerospace growth will be partially offset
by lower than expected growth in recreation and other
industrial sales.
-- We still expect gross margins for the year of 23 - 24% and
operating margin before restructuring expense of 11 - 12%
despite increased spending for new program development and
qualifications, as well as start up costs for new production
capacity.
Hexcel will host a conference call at 10:00 a.m. ET, tomorrow,
July 24, 2007 to discuss the second quarter results and respond to
questions. The telephone number for the conference call is (913)
981-4910 and the confirmation code is 3041582. 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 structural materials, including carbon fibers,
reinforcements, prepregs, honeycomb, matrix systems, adhesives and
composite structures, used in commercial aerospace, space and defense
and industrial applications.
Disclaimer on Forward Looking Statements
This press release contains statements that are forward looking,
including statements relating to anticipated trends in constant
currency for the market segments we serve (including growth in
commercial aerospace revenues, the estimates and expectations based on
aircraft production rates made publicly available by Boeing and
Airbus, the revenues we may generate from a aircraft model or program,
the impact of delays in new aircraft programs, the outlook for space &
defense revenues including rotorcraft applications and the trend in
wind, recreation and other industrial applications), our focus on
maintaining and improving margins and the scope and timing of
potential divestitures and implementing a final settlement with the
DOJ in the Zylon matter. 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 our filings with the SEC. We do not
undertake an obligation to update our forward-looking statements to
reflect future events.
Hexcel Corporation and Subsidiaries
Condensed Consolidated Statements of Operations
- ----------------------------------------------------------------------
Unaudited
-----------------------------------
Quarter Ended Six Months Ended
June 30, June 30,
(In millions, except per share
data) 2007 2006 2007 2006
- ----------------------------------------------------------------------
Net sales $ 289.8 $ 274.0 $ 572.4 $ 534.3
Cost of sales 219.4 206.5 430.5 402.2
- ----------------------------------------------------------------------
Gross margin 70.4 67.5 141.9 132.1
% Gross margin 24.3% 24.6% 24.8% 24.7%
Selling, general and administrative
expenses 27.4 25.9 58.4 54.0
Research and technology expenses 8.5 7.4 18.0 14.9
Business consolidation and
restructuring expenses 0.5 0.3 1.6 1.2
- ----------------------------------------------------------------------
Operating income 34.0 33.9 63.9 62.0
Interest expense, net 6.0 6.1 11.7 12.8
Non-operating expense (a) -- -- 0.4 --
- ----------------------------------------------------------------------
Income from continuing operations
before income taxes, equity in
earnings and discontinued
operations 28.0 27.8 51.8 49.2
Provision for income taxes 11.9 10.9 21.9 19.4
- ----------------------------------------------------------------------
Income from continuing operations
before equity in earnings and
discontinued operations 16.1 16.9 29.9 29.8
Equity in earnings of affiliated
companies 1.4 1.1 2.4 2.2
- ----------------------------------------------------------------------
Net income from continuing
operations 17.5 18.0 32.3 32.0
(Loss) income from discontinued
operations, net of tax (b) (8.7) (0.4) (6.8) 0.1
Gain on sale of discontinued
operations, net of tax -- -- 6.8 --
- ----------------------------------------------------------------------
Net income $ 8.8 $ 17.6 $ 32.3 $ 32.1
- ----------------------------------------------------------------------
Basic net income (loss) per common
share:
Continuing operations $ 0.18 $ 0.19 $ 0.34 $ 0.34
Discontinued operations (0.09) -- -- --
-------- -------- ------- -------
Net income per common share $ 0.09 $ 0.19 $ 0.34 $ 0.34
Diluted net income (loss) per
common share:
Continuing operations $ 0.18 $ 0.19 $ 0.33 $ 0.34
Discontinued operations (0.09) -- -- --
-------- -------- ------- -------
Net income per common share $ 0.09 $ 0.19 $ 0.33 $ 0.34
Weighted-average common shares:
Basic 94.4 93.4 94.4 93.2
Diluted 96.3 95.5 96.3 95.4
- ----------------------------------------------------------------------
(a) Non-operating expense is the accelerated amortization of deferred
financing costs as a result of prepayments of the Company's bank term
loan with the net proceeds from asset sales.
(b) Included in the three- and six-month periods ended June 30, 2007
is an after-tax charge of $9.7 million related to the establishment
of a reserve for previously disclosed litigation.
Hexcel Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
- ----------------------------------------------------------------------
Unaudited
-----------------------------
(In millions, except per share data) June March December
30, 31, 31,
2007 2007 2006
- ----------------------------------------------------------------------
Assets
Current assets:
Cash and cash equivalents $ 36.0 $ 33.5 $ 25.7
Accounts receivable, net 192.0 188.4 169.8
Inventories, net 166.7 166.0 150.8
Prepaid expenses and other current assets 32.1 29.1 36.1
Assets of discontinued operations 35.7 37.8 43.4
- ----------------------------------------------------------------------
Total current assets 462.5 454.8 425.8
Property, plant and equipment 783.7 748.9 750.3
Less accumulated depreciation (404.9) (394.9) (403.8)
- ----------------------------------------------------------------------
Net property, plant and equipment 378.8 354.0 346.5
Goodwill and other intangible assets, net 58.9 58.5 58.5
Investments in affiliated companies 15.7 14.2 11.1
Deferred tax assets 96.4 103.1 101.5
Other assets 17.1 20.8 22.3
Assets of discontinued operations 38.2 40.3 47.2
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Total assets $1,067.6 $1,045.7 $1,012.9
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Liabilities and Stockholders' Equity
Current liabilities:
Notes payable and current maturities of
capital lease obligations $ 2.0 $ 2.2 $ 2.5
Accounts payable 100.6 86.6 96.0
Accrued liabilities 121.8 109.4 105.6
Liabilities of discontinued operations 8.4 13.1 15.2
- ----------------------------------------------------------------------
Total current liabilities 232.8 211.3 219.3
Long-term notes payable and capital lease
obligations 401.9 419.4 409.8
Other non-current liabilities 82.4 82.0 80.8
Liabilities of discontinued operations -- -- 1.4
- ----------------------------------------------------------------------
Total liabilities 717.1 712.7 711.3
Stockholders' equity:
Preferred stock, no par value, 20.0
shares authorized, no shares issued or
outstanding -- -- --
Common stock, $0.01 par value, 200.0
shares authorized, 96.4 shares issued at
June 30, 2007, 96.0 shares issued at
March 31, 2007 and 95.4 shares issued at
December 31, 2006 1.0 1.0 1.0
Additional paid-in capital 495.8 489.3 479.3
Accumulated deficit (126.5) (135.2) (157.1)
Accumulated other comprehensive income
(loss) 1.8 (0.6) (1.8)
- ----------------------------------------------------------------------
372.1 354.5 321.4
Less - Treasury stock, at cost, 1.8
shares at June 30, 2007, 1.8 at March
31, 2007 and 1.7 shares at December 31,
2006 (21.6) (21.5) (19.8)
- ----------------------------------------------------------------------
Total stockholders' equity 350.5 333.0 301.6
- ----------------------------------------------------------------------
Total liabilities and stockholders'
equity $1,067.6 $1,045.7 $1,012.9
- ----------------------------------------------------------------------
Hexcel Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows
- ----------------------------------------------------------------------
Unaudited
-----------------
Year to Date
Ended
June 30,
(In millions) 2007 2006
- ----------------------------------------------------------------------
Cash flows from operating activities
Net income $ 32.3 $ 32.1
Loss (income) from discontinued operations, net of
tax -- (0.1)
-------- -------
Net income from continuing operations 32.3 32.0
Reconciliation to net cash provided by (used for)
operating activities:
Depreciation and amortization 19.6 18.5
Amortization of debt discount and deferred
financing costs 0.9 0.9
Deferred income taxes 14.6 11.5
Business consolidation and restructuring expenses 1.6 1.2
Business consolidation and restructuring payments (8.6) (1.5)
Equity in earnings of affiliated companies (2.4) (2.2)
Dividends from affiliated companies -- 1.3
Share-based compensation 6.7 5.3
Loss on early retirement of debt 0.4 --
Changes in assets and liabilities:
Increase in accounts receivable (19.6) (31.0)
Increase in inventories (14.2) (4.6)
Decrease in prepaid expenses and other current
assets 0.3 0.5
Increase in accounts payable/accrued liabilities (0.8) (1.6)
Changes in other non-current assets and long-term
liabilities (3.7) (10.9)
- ----------------------------------------------------------------------
Net cash provided by operating activities 27.1 19.4
- ----------------------------------------------------------------------
Cash flows from investing activities
Capital expenditures and deposits for property
purchases (46.1) (50.4)
Proceeds from sale of discontinued operations 25.0 --
Investment in affiliated companies (2.1) --
- ----------------------------------------------------------------------
Net cash used for investing activities (23.2) (50.4)
- ----------------------------------------------------------------------
Cash flows from financing activities
Proceeds from senior secured credit facility -
revolver, net 28.0 6.6
Repayments of senior secured credit facility - term
B loan (36.2) (0.5)
Proceeds from (repayments of) capital lease
obligations and other debt, net (0.2) 1.3
Activity under stock plans 7.6 10.4
- ----------------------------------------------------------------------
Net cash provided by (used for) financing activities (0.8) 17.8
- ----------------------------------------------------------------------
Net cash provided by operating activities,
discontinued operations 7.9 2.0
Net cash used for investing activities, discontinued
operations (1.6) (0.2)
Effect of exchange rate changes on cash and cash
equivalents 0.9 (0.8)
- ----------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents 10.3 (12.2)
Cash and cash equivalents at beginning of period 25.7 21.0
- ----------------------------------------------------------------------
Cash and cash equivalents at end of period $ 36.0 $ 8.8
- ----------------------------------------------------------------------
Supplemental Data:
Cash interest paid $ 13.7 $ 13.6
Cash taxes paid $ 9.1 $ 4.7
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Hexcel Corporation and Subsidiaries
Net Sales to Third-Party Customers by Market Segment
Table
Quarters Ended June 30, 2007 and 2006 (Unaudited) A
- ----------------------------------------------------------------------
(In millions) As Reported Constant Currency (a)
- ----------------------------------------------------------------------
FX
B/(W) Effect B/(W)
Market Segment 2007 2006 % (b) 2006 %
- ----------------------------------------------------------------------
Commercial Aerospace $ 154.7 $ 142.0 8.9 $ 2.0 $ 144.0 7.4
Industrial 75.9 75.8 0.1 4.1 79.9 (5.0)
Space & Defense 59.2 56.2 5.3 1.3 57.5 3.0
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Consolidated Total $ 289.8 $ 274.0 5.8 $ 7.4 $ 281.4 3.0
- ----------------------------------------------------------------------
Consolidated % of Net
Sales % % %
- ----------------------------------------------------------------------
Commercial Aerospace 53.4 51.8 51.2
Industrial 26.2 27.7 28.4
Space & Defense 20.4 20.5 20.4
- ----------------------------------------------------------------------
Consolidated Total 100.0 100.0 100.0
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Table
Six Months Ended June 30, 2007 and 2006 (Unaudited) B
- ----------------------------------------------------------------------
(In millions) As Reported Constant Currency (a)
- ----------------------------------------------------------------------
FX
B/(W) Effect B/(W)
Market Segment 2007 2006 % (b) 2006 %
- ----------------------------------------------------------------------
Commercial Aerospace $298.7 $ 278.5 7.3 $ 4.9 $283.4 5.4
Industrial 150.0 144.3 4.0 8.6 152.9 (1.9)
Space & Defense 123.7 111.5 10.9 2.2 113.7 8.8
- ----------------------------------------------------------------------
Consolidated Total $572.4 $ 534.3 7.1 $ 15.7 $550.0 4.1
- ----------------------------------------------------------------------
Consolidated % of Net
Sales % % %
- ----------------------------------------------------------------------
Commercial Aerospace 52.2 52.1 51.5
Industrial 26.2 27.0 27.8
Space & Defense 21.6 20.9 20.7
- ----------------------------------------------------------------------
Consolidated Total 100.0 100.0 100.0
- ----------------------------------------------------------------------
(a) To assist in the interpretation of our net sales trend, total net
sales and sales by market for the quarter ended June 30, 2006 have
been estimated using the same U.S. dollar, British pound and Euro
exchange rates as applied for the respective period in 2007 and are
referred to as "constant currency" sales.
(b) FX effect is the estimated impact on "as reported" net sales due
to changes in foreign currency exchange rates.
Hexcel Corporation and Subsidiaries
Segment Information (Unaudited) Table C
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Second Quarter 2007
- ----------------------------------------------------------------------
Composite Engineered Corporate &
(In millions) Materials Products Other (a) Total
- ----------------------------------------------------------------------
Net sales to external
customers $ 231.9 $ 57.9 $ -- $ 289.8
Intersegment sales 8.4 0.9 (9.3) --
- ----------------------------------------------------------------------
Total sales 240.3 58.8 (9.3) 289.8
Operating income
(loss) 38.2 5.1 (9.3) 34.0
% Operating margin 15.9% 8.6% 11.7%
Depreciation and
amortization 8.9 1.0 -- 9.9
Business consolidation
and restructuring
expenses (0.2) 0.7 -- 0.5
Stock-based
compensation expense 0.9 0.2 0.8 1.9
Capital expenditures
and deposits (b) 29.0 0.8 0.7 30.5
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Second Quarter 2006
- ----------------------------------------------------------------------
Net sales to external
customers $ 227.2 $ 46.8 $ -- $ 274.0
Intersegment sales 7.3 0.3 (7.6) --
- ----------------------------------------------------------------------
Total sales 234.5 47.1 (7.6) 274.0
Operating income
(loss) 36.4 6.1 (8.6) 33.9
% Operating margin 15.5% 13.0% 12.4%
Depreciation and
amortization 8.4 0.8 0.1 9.3
Business consolidation
and restructuring
expenses 0.2 0.1 -- 0.3
Stock-based
compensation expense 0.6 0.1 1.6 2.3
Capital expenditures
and deposits (b) 24.7 0.9 0.6 26.2
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First Six Months 2007
- ----------------------------------------------------------------------
Net sales to external
customers $ 462.1 $ 110.3 $ -- $ 572.4
Intersegment sales 18.3 1.7 (20.0) --
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Total sales 480.4 112.0 (20.0) 572.4
Operating income
(loss) 75.1 10.0 (21.2) 63.9
% Operating margin 15.6% 8.9% 11.2%
Depreciation and
amortization 17.6 1.9 0.1 19.6
Business consolidation
and restructuring
expenses 1.2 0.4 -- 1.6
Stock-based
compensation expense 2.5 0.5 3.7 6.7
Capital expenditures
and deposits (b) 43.3 1.3 1.5 46.1
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First Six Months 2006
- ----------------------------------------------------------------------
Net sales to external
customers $ 440.8 $ 93.5 $ -- $ 534.3
Intersegment sales 14.4 0.2 (14.6) --
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Total sales 455.2 93.7 (14.6) 534.3
Operating income
(loss) 69.4 11.6 (19.0) 62.0
% Operating margin 15.2% 12.4% 11.6%
Depreciation and
amortization 16.7 1.7 0.1 18.5
Business consolidation
and restructuring
expenses 1.2 0.1 (0.1) 1.2
Stock-based
compensation expense 1.7 0.3 3.3 5.3
Capital expenditures
and deposits (b) 47.5 1.1 1.8 50.4
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(a) We do not allocate corporate expenses to the operating segments.
(b) Includes deposits for capital purchases.
Hexcel Corporation and Subsidiaries Table D
Schedule of Net Income from Continuing Operations Per Common Share
- ----------------------------------------------------------------------
Unaudited
-------------------------------
Quarter Ended Six Months Ended
June 30, June 30,
(In millions, except per share data) 2007 2006 2007 2006
- ----------------------------------------------------------------------
Basic net income from continuing
operations per common share:
Net income from continuing operations $ 17.5 $ 18.0 $ 32.3 $ 32.0
Weighted average common shares
outstanding 94.4 93.4 94.4 93.2
Basic net income from continuing
operations per common share (a) $ 0.18 $ 0.19 $ 0.34 $ 0.34
- ----------------------------------------------------------------------
Diluted net income from continuing
operations per common share:
Net income from continuing operations $ 17.5 $ 18.0 $ 32.3 $ 32.0
Weighted average common shares
outstanding - Basic 94.4 93.4 94.4 93.2
Plus incremental shares from assumed
conversions:
Restricted stock units 0.3 0.3 0.4 0.3
Stock Options 1.6 1.8 1.5 1.9
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Weighted average common shares
outstanding-Dilutive 96.3 95.5 96.3 95.4
- ----------------------------------------------------------------------
Diluted net income from continuing
operations per common share (b) $ 0.18 $ 0.19 $ 0.33 $ 0.34
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(a) Excludes basic net loss per common share from discontinued
operations of $(0.09) and $0.00 for the three- and six-month periods
ended June 30, 2007, respectively.
(b) Excludes diluted net loss per common share from discontinued
operations of $(0.09) and $0.00 for the three- and six-month periods
ended June 30, 2007, respectively.
Hexcel Corporation and Table E
Subsidiaries
Schedule of Interest Expense
- ----------------------------------------------------------------------
Unaudited
--------------------------------------
Quarter Ended Six Months Ended
June 30, June 30,
(In millions) 2007 2006 2007 2006
- ----------------------------------------------------------------------
Interest on debt instruments $ 5.5 $ 6.1 $ 11.0 $ 12.5
Capitalized interest (a) (0.4) (0.7) (1.1) (1.2)
Banking, commitment and other
fees (b) 0.4 0.2 0.9 0.6
Amortization of financing costs
and discounts (non-cash) 0.5 0.5 0.9 0.9
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Interest Expense $ 6.0 $ 6.1 $ 11.7 $ 12.8
- ----------------------------------------------------------------------
(a) Interest expense capitalized in connection with our carbon fiber
expansion program.
(b) Includes interest expense of $0.3 million and $0.5 million related
to uncertain tax positions for the three- and six-month periods ended
June 30, 2007, respectively.
Hexcel Corporation and Subsidiaries
Reconciliation of GAAP and Non-GAAP Measures Table F
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Unaudited
-------------------------------
Quarter Ended Six Months Ended
June 30, June 30,
(In millions) 2007 2006 2007 2006
- ----------------------------------------------------------------------
GAAP operating income $ 34.0 $ 33.9 $ 63.9 $ 62.0
- - Business Consolidation &
Restructuring Expense 0.5 0.3 1.6 1.2
- - Secondary offering transaction costs -- -- -- 1.2
- ----------------------------------------------------------------------
Non-GAAP Operating Income $ 34.5 $ 34.2 $ 65.5 $ 64.4
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Includes:
- - Stock Compensation Expense $ 1.9 $ 2.3 $ 6.7 $ 5.3
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Management believes that operating income and net income before
special items, which are non-GAAP measurements, are meaningful to
investors because they provide a view of Hexcel with respect to
ongoing operating results. Special items represent significant charges
or credits that are important to an understanding of Hexcel's overall
operating results in the periods presented. In addition, management
believes that total debt, net of cash, which is also a non-GAAP
measure, is an important measure of Hexcel's liquidity. Such non-GAAP
measurements are not recognized in accordance with generally accepted
accounting principles and should not be viewed as an alternative to
GAAP measures of performance.
Hexcel Corporation
Schedule of Total Debt, Net of Cash Table G
- ----------------------------------------------------------------------
Unaudited
-------------------------
June March December
30, 31, 31,
(In millions) 2007 2007 2006
- ----------------------------------------------------------------------
Notes payable and current maturities of
capital lease obligations $ 2.0 $ 2.2 $ 2.5
Long-term notes payable and capital lease
obligations 401.9 419.4 409.8
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Total Debt 403.9 421.6 412.3
Less: Cash and cash equivalents (36.0) (33.5) (25.7)
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Total debt, net of cash $ 367.9 $ 388.1 $ 386.6
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CONTACT: Hexcel Corporation
Investors:
Wayne Pensky, 203-969-0666 ext. 439
wayne.pensky@hexcel.com
or
Media:
Michael Bacal, 203-969-0666 ext. 426
michael.bacal@hexcel.com