Spirit AeroSystems Holdings, Inc. Reports Fourth Quarter and Full-Year 2010 Financial Results; Reports Revenues of $4.172 Billion and Fully Diluted EPS of $1.55 Per Share; Provides 2011 Financial Guidance

WICHITA, Kan., Feb. 10, 2011 /PRNewswire/ — Spirit AeroSystems Holdings, Inc. (NYSE: SPR) reported fourth quarter and full-year 2010 financial results reflecting solid core operating performance across the company as demand for large commercial aircraft remains strong.

Spirit’s fourth quarter 2010 revenues were $1.071 billion, stable from $1.078 billion for the same period of 2009, as fewer large commercial aircraft deliveries were offset with non-production revenues.  Operating income was $96 million, compared to $85 million for the same period in 2009.  Net income for the quarter was $62 million, or $0.44 per fully diluted share, compared to $50 million, or $0.36 per fully diluted share, in the same period of 2009.

Fourth quarter pre-tax earnings were reduced by approximately ($3) million for the quarter, or ($0.02) per share, related to the award of stock to eligible union employees as part of the new ten-year agreement with the United Automobile, Aerospace, & Agricultural Implement Workers of America (UAW).

Revenue for the full-year reached $4.172 billion.  Operating income for the full-year increased to $357 million, up 18 percent from the full-year in 2009.  Full-year net income increased 14 percent to $219 million, or $1.55 per fully diluted share, compared to $192 million, or $1.37 per fully diluted share in 2009.

“We continued to execute well on our core programs and made good progress on our development programs in 2010,” said President and Chief Executive Officer Jeff Turner.  “The operating engine of the company continues to improve while the global demand for large commercial aircraft remains strong and new products are brought to the market.”

“During the fourth quarter, we delivered over two-hundred forty core products to our customers as well as making our first delivery of the composite CH-53K helicopter fuselage to the customer.  We also reached agreement with the UAW on a new ten-year labor contract in Oklahoma, and established a path forward on the 787 program with Boeing,” Turner added.

“Looking forward, our company is financially strong and in a solid competitive position as our core product volumes increase and our development programs mature.   With a substantial backlog supporting Spirit’s future, we are implementing plans to expand capacity for our core business.  With this growth outlook and our focus on performance, we are positioned to drive long-term value,” Turner concluded.

Spirit’s backlog at the end of the fourth quarter of 2010 was $28.3 billion.  Spirit calculates its backlog based on contractual prices for products and volumes from the published firm order backlogs of Airbus and Boeing, along with firm orders from other customers.

Spirit updated its contract profitability estimates during the fourth quarter of 2010, resulting in a net pre-tax $10 million ($0.05 per share) unfavorable cumulative catch-up adjustment primarily associated with changes in contract profitability estimates on the 787 program.  In comparison, Spirit recognized a $34 million unfavorable cumulative catch-up adjustment for the fourth quarter of 2009.

Cash flow from operations was a $364 million source of cash for the fourth quarter of 2010, compared to a $197 million source of cash for the fourth quarter of 2009.  The current quarter compared to the same period of 2009 reflects relatively stable working capital while performance is largely the result of an increase in deferred revenue, partially offset by current and deferred tax effects.

Cash balances at the end of the year were $482 million, up $113 million from a year ago, largely reflecting the proceeds generated from the issuance of the $300 million senior unsecured notes in November of 2010, and receipt of non-recurring contract payments associated with our development programs, partially offset by continued investment in our new programs.  At the end of the fourth quarter of 2010, the company’s $650 million revolving credit facility remained undrawn.  Approximately $19 million of the credit facility is reserved for financial letters of credit.  Debt balances at the end of the fourth quarter were $1,197 million, up $303 million from the end of 2009, primarily reflecting the associated debt for the unsecured notes, issued in fourth quarter of 2010.

During the quarter, the company’s credit rating was affirmed by Standard & Poor’s with a BB rating while Moody’s upgraded its rating to a Ba2.

Financial Outlook

Spirit revenue guidance for the full-year 2011 is expected to be between $4.5 and $4.7 billion based on Boeing’s 2011 delivery guidance of 485 to 500 aircraft; expected B787 deliveries; expected Airbus deliveries in 2011 of approximately 520 to 530 aircraft; internal Spirit forecasts for non-OEM production activity and other customers; and foreign exchange rates consistent with those in the second half of 2010.

Fully diluted earnings per share guidance for 2011 is expected to be between $1.70 and $1.90 per share, reflecting continued growth in core programs and transitioning new programs to initial production.

Cash flow from operations, less capital expenditures, is expected to be approximately ($250) million use of cash in the aggregate, with capital expenditures of approximately $325 million.

The effective tax rate for 2011 is forecasted to be between 31 and 32 percent. (Table 3)

Risk to our financial guidance includes, among other factors: 787 delivery volumes; higher than forecasted non-recurring and recurring costs on our development programs; mid-range business jet market risks; and our ability to achieve anticipated productivity and cost improvements; and assumes completion of the 787 contract amendment.

SOURCE Spirit AeroSystems Holdings, Inc.