Hexcel Corporation Two Stamford Plaza| 281 Tresser Blvd., 16thFloor Stamford, CT 06901 USA www.hexcel.com |
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Exhibit 99.1
HEXCEL REPORTS 2022 FOURTH QUARTER AND FULL YEAR RESULTS
• Q4 2022 GAAP diluted EPS of $0.43 and adjusted diluted EPS of $0.40, compared to Q4 2021 GAAP diluted EPS of $0.22 and adjusted diluted EPS of $0.16. • Q4 2022 Sales were $429 million, compared to $360 million in Q4 2021. • FY 2022 GAAP diluted EPS of $1.49 and adjusted diluted EPS of $1.28, compared to FY 2021 GAAP diluted EPS of $0.19 and adjusted diluted EPS of $0.27. • FY 2022 sales were $1,578 million, compared to $1,325 million for FY 2021. • Free Cash Flow of $97 million in FY 2022. • Quarterly dividend increased 25% to $0.125 from $0.10. |
See Table C for reconciliation of GAAP and non-GAAP operating income, net income, earnings per share and operating cash flow to free cash flow. Free cash flow is cash from operations less capital expenditures.
Summary of Results from Operations |
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Quarters Ended |
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Years Ended |
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December 31, |
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December 31, |
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(In millions, except per share data) |
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2022 |
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2021 |
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% Change |
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2022 |
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2021 |
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% Change |
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Net Sales |
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$ |
429.4 |
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$ |
360.3 |
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19.2 % |
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$ |
1,577.7 |
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$ |
1,324.7 |
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19.1 % |
Net sales change in constant currency |
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21.7 % |
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21.7 % |
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Operating Income |
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40.5 |
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23.0 |
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76.1 % |
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175.2 |
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51.8 |
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238.2 % |
Net Income |
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37.0 |
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18.9 |
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95.8 % |
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126.3 |
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16.1 |
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684.5 % |
Diluted net income per common share |
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$ |
0.43 |
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$ |
0.22 |
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95.5 % |
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$ |
1.49 |
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$ |
0.19 |
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684.2 % |
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Non-GAAP measures for year-over-year comparison (Table C) |
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Adjusted Operating Income |
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$ |
46.3 |
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$ |
25.2 |
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83.7 % |
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$ |
163.3 |
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$ |
70.0 |
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133.3 % |
As a % of sales |
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10.8 |
% |
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7.0 |
% |
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10.4 |
% |
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5.3 |
% |
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Adjusted Net Income |
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33.7 |
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13.5 |
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149.6 % |
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108.8 |
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23.2 |
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369.0 % |
Adjusted diluted net income per share |
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$ |
0.40 |
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$ |
0.16 |
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150.0 % |
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$ |
1.28 |
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$ |
0.27 |
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374.1 % |
STAMFORD, Conn. January 25, 2023 – Hexcel Corporation (NYSE: HXL) today reported fourth quarter 2022 results including net sales of $429 million and adjusted diluted EPS of $0.40 per share.
Chairman, CEO and President Nick Stanage said, "We delivered the strongest sales quarter of the year as we managed to drive higher production levels to support the continuing robust recovery in the commercial aerospace market and as our business benefits from broad global strength in our space and defense markets. We delivered double-digit adjusted operating margins for the fourth quarter and for fiscal year 2022 as we focus on throughput and operational efficiencies. Based on our growth outlook, we have re-commenced construction to complete a new carbon fiber line at our Decatur, Alabama facility, which we paused at the beginning of 2020. The new line should be aerospace qualified in 2025 and will provide needed capacity based on forecasted growth."
Mr. Stanage continued, “Our markets are recovering strongly, and we are gaining new business as demand grows for lightweight composites that support enhanced performance while improving fuel efficiency and reducing emissions. Our 2023 financial guidance forecasts double-digit growth in both sales and adjusted earnings per share. Our cash generation profile remains compelling, and we are forecasting free cash flow above $140 million in 2023. Across our global footprint, the Hexcel team is focused on innovation and operational excellence to continue to drive shareholder value.”
Markets
Sales in the fourth quarter of 2022 were $429.4 million compared to $360.3 million in the fourth quarter of 2022.
Commercial Aerospace
Space & Defense
Industrial
Consolidated Operations
Gross margin for the fourth quarter of 2022 was 23.1% compared to 19.2% in the fourth quarter of 2021 as higher sales volume drove favorable operating leverage. As a percentage of sales, selling, general and administrative and R&T expenses for the fourth quarter of 2022 were 12.3% compared to 12.2% for the fourth quarter of 2021. Adjusted operating income in the fourth quarter of 2022 was $46.3 million or 10.8% of sales, compared to $25.2 million, or 7.0% of sales in 2021. Other operating expense for both the fourth quarter of 2022 and 2021 included restructuring costs. The impact of exchange rates on operating income as a percent of sales was favorable by approximately 40 basis points in the fourth quarter of 2022 compared to the fourth quarter of 2021.
FY 2022 Results
Sales for the full year of 2022 were $1,577.7 million compared to $1,324.7 million for 2021.
Commercial Aerospace (58% of sales)
Space & Defense (29% of sales)
2
Industrial (13% of sales)
Consolidated Operations
Gross margin for 2022 was 22.6% compared to 18.9% in the prior year strengthening on improved cost absorption from higher sales volume, partially offset by inflationary cost impacts. As a percentage of sales, selling, general and administrative and R&T expenses for 2022 were 12.3% compared to 13.6% for 2021. Adjusted operating income for 2022 was $163.3 million or 10.4% of sales, compared to $70.0 million, or 5.3% of sales in 2021. Other operating income for 2022 included a pre-tax net gain of $19.4 million from the previously announced sale of a facility in Dublin, California, partially offset by restructuring costs. Other operating expenses for 2021 included expenses primarily related to severance and restructuring. The impact of exchange rates on operating income as a percent of sales was favorable by approximately 30 basis points for 2022 compared to 2021.
Cash and other
3
2023 Guidance
*****
Hexcel will host a conference call at 10:00 a.m. ET, on January 26, 2023 to discuss fourth quarter and full-year 2022 results. The event will be webcast via the Investor Relations webpage at www.Hexcel.com. The event can also be accessed by dialing +1 (646) 960-0452. The conference ID is 3428143. Replays of the call will be available on the website.
*****
About Hexcel
Hexcel Corporation is a global leader in advanced lightweight composites technology. We propel the future of flight, energy generation, transportation, and recreation through excellence in providing innovative high-performance material solutions that are lighter, stronger and tougher, helping to create a better world for us all. Our broad and unrivaled product range includes carbon fiber, specialty reinforcements, prepregs and other fiber-reinforced matrix materials, honeycomb, resins, engineered core and composite structures for use in commercial aerospace, space and defense, and industrial applications.
*****
Disclaimer on Forward Looking Statements
This news release contains statements that are forward looking within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to the estimates and expectations based on aircraft production rates provided by Airbus, Boeing and others; the revenues we may generate from an aircraft model or program; the impact of the push-out in deliveries of the Airbus and Boeing backlog and the impact of delays in the startup or ramp-up of new aircraft programs or the final Hexcel composite material content once the design and material selection have been completed; expectations with regard to regulatory clearances or the build rate of the Boeing 737 MAX or Boeing 787 and the related impact on our revenues; expectations with regard to raw material cost and availability; expectations of composite content on new commercial aircraft programs and our share of those requirements; expectations regarding revenues from space and defense applications, including whether certain programs might be curtailed or discontinued; expectations regarding sales for wind energy, recreation, automotive and other industrial applications; expectations regarding working capital trends and expenditures and inventory levels; expectations as to the level of capital expenditures and timing of completion of capacity expansions and qualification of new products; expectations regarding our ability to improve and maintain margins; expectations regarding the sale of certain of our assets; projections regarding our tax rate; expectations with regard to the continued impact of the COVID-19 pandemic and the impact of the conflict between Russia and Ukraine on worldwide air travel and aircraft programs, as well as on our customers and suppliers and, in turn, on our operations and financial results; expectations regarding our strategic initiatives and other goals, including, but not limited to, our sustainability goals; expectations regarding the outcome of legal matters or the impact of changes in laws or regulations or government policies; expectations with regard to cybersecurity measures taken to protect confidential and proprietary information and the anticipated impact of the above factors and various market risks on our expectations of financial results for 2023 and beyond. 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 the extent of the impact of the COVID-19 pandemic and the conflict between
4
Russia and Ukraine, including continued disruption in global financial markets and supply chains, ongoing restrictions on movement and travel, employee absenteeism and labor shortages, and reduced demand for air travel, on the operations, business and financial condition of Hexcel and its customers and suppliers; reductions in sales to any significant customers, particularly Airbus or Boeing, including related to the timing of pending regulatory clearances for the Boeing 737 MAX and the Boeing 787, as well as due to the impact of the COVID-19 pandemic or other geopolitical events or conditions; our ability to effectively adjust production and inventory levels to align with customer demand; our ability to effectively motivate, retain and hire the necessary workforce; availability and cost of raw materials, including the impact of supply shortages and inflation; supply chain disruptions, which may be exacerbated by the conflict between Russia and Ukraine; our ability to successfully implement or realize our business strategies, plans, goals and objectives of management, including our sustainability goals and any restructuring or alignment activities in which we may engage; changes in sales mix; changes in current pricing and cost levels, including cost inflation, as well as increasing energy prices resulting from the conflict between Russia and Ukraine; changes in aerospace delivery rates; changes in government defense procurement budgets; changes in military aerospace program technology; timely new product development or introduction; industry capacity; increased competition; inability to install, staff and qualify necessary capacity or complete capacity expansions to meet customer demand; cybersecurity-related risks including the potential impact of breaches or intrusions; currency exchange rate fluctuations; changes in political, social and economic conditions, including, but not limited to, the effect of change in global trade policies, such as sanctions imposed as a result of the conflict between Russia and Ukraine; work stoppages or other labor disruptions; our ability to successfully complete any strategic acquisitions, investments or dispositions; compliance with environmental, health, safety and other related laws and regulations, including those related to climate change; the effects of natural disasters or other severe weather events, which may be worsened by the impact of climate change, and other severe catastrophic events, including any public health crisis; the potential impact of environmental, social and governance matters; and the unexpected outcome of legal matters or impact of changes in laws or regulations. Additional risk factors are described in our filings with the Securities and Exchange Commission. We do not undertake an obligation to update our forward-looking statements to reflect future events.
Contact
Kurt Goddard | Vice President Investor Relations | Kurt.Goddard@Hexcel.com | +1 (203) 352-6826
*****
5
Hexcel Corporation and Subsidiaries |
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Condensed Consolidated Statements of Operations |
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Unaudited |
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Quarters Ended |
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Years Ended |
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December 31, |
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December 31, |
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(In millions, except per share data) |
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2022 |
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2021 |
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2022 |
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2021 |
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Net sales |
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$ |
429.4 |
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$ |
360.3 |
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$ |
1,577.7 |
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$ |
1,324.7 |
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Cost of sales |
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330.3 |
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291.2 |
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1,220.6 |
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1,074.6 |
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Gross margin |
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99.1 |
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69.1 |
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357.1 |
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250.1 |
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% Gross Margin |
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23.1 |
% |
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19.2 |
% |
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22.6 |
% |
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18.9 |
% |
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Selling, general and administrative expenses |
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40.8 |
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32.3 |
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148.0 |
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135.0 |
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Research and technology expenses |
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12.0 |
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11.6 |
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45.8 |
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45.1 |
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Other operating expense (income) |
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5.8 |
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2.2 |
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(11.9 |
) |
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18.2 |
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Operating income |
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40.5 |
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23.0 |
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175.2 |
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51.8 |
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Interest expense, net |
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9.2 |
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9.2 |
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36.2 |
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38.3 |
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Other income |
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(10.5 |
) |
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(8.5 |
) |
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(10.8 |
) |
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(8.5 |
) |
Income before income taxes, and equity in earnings of affiliated companies |
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41.8 |
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22.3 |
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149.8 |
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22.0 |
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Income tax expense |
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7.4 |
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4.3 |
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31.6 |
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5.9 |
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Income before equity in earnings of affiliated companies |
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34.4 |
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18.0 |
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118.2 |
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16.1 |
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Equity in earnings from affiliated companies |
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2.6 |
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0.9 |
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8.1 |
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- |
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Net income |
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$ |
37.0 |
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$ |
18.9 |
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$ |
126.3 |
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$ |
16.1 |
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Basic net income per common share: |
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$ |
0.44 |
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$ |
0.22 |
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$ |
1.50 |
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$ |
0.19 |
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Diluted net income per common share: |
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$ |
0.43 |
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$ |
0.22 |
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$ |
1.49 |
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$ |
0.19 |
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Weighted-average common shares: |
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Basic |
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84.5 |
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84.2 |
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84.4 |
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|
84.1 |
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Diluted |
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|
85.2 |
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84.8 |
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85.0 |
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|
|
84.6 |
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6
Hexcel Corporation and Subsidiaries |
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Condensed Consolidated Balance Sheets |
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Unaudited |
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December 31, |
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December 31, |
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(In millions) |
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2022 |
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2021 |
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Assets |
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Cash and cash equivalents |
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$ |
112.0 |
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$ |
127.7 |
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Accounts receivable, net |
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222.7 |
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|
160.3 |
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Inventories, net |
|
|
319.3 |
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|
|
245.7 |
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Contract assets |
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|
32.0 |
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30.5 |
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Prepaid expenses and other current assets |
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38.9 |
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39.5 |
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Assets held for sale |
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9.5 |
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12.6 |
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Total current assets |
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734.4 |
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616.3 |
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Property, plant and equipment |
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3,087.9 |
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3,110.0 |
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Less accumulated depreciation |
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(1,430.1 |
) |
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(1,363.9 |
) |
Net property, plant and equipment |
|
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1,657.8 |
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|
1,746.1 |
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Goodwill and other intangible assets, net |
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256.0 |
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267.5 |
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Investments in affiliated companies |
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47.6 |
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44.6 |
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Other assets |
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|
141.5 |
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|
144.9 |
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Total assets |
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$ |
2,837.3 |
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$ |
2,819.4 |
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Liabilities and Stockholders' Equity |
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Liabilities: |
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Short-term borrowings |
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$ |
0.2 |
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$ |
0.9 |
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Accounts payable |
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155.5 |
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|
113.2 |
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Accrued compensation and benefits |
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|
69.6 |
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|
|
54.4 |
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Accrued liabilities |
|
|
104.5 |
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|
79.1 |
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Total current liabilities |
|
|
329.8 |
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|
247.6 |
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Long-term debt |
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|
723.3 |
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|
822.4 |
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Retirement obligations |
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|
42.7 |
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|
|
52.6 |
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Other non-current liabilities |
|
|
187.3 |
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|
211.3 |
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Total liabilities |
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$ |
1,283.1 |
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|
$ |
1,333.9 |
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Stockholders' equity: |
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Common stock, $0.01 par value, 200.0 shares authorized, |
|
$ |
1.1 |
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|
$ |
1.1 |
|
Additional paid-in capital |
|
|
905.0 |
|
|
|
878.6 |
|
Retained earnings |
|
|
2,104.9 |
|
|
|
2,012.5 |
|
Accumulated other comprehensive loss |
|
|
(174.4 |
) |
|
|
(126.5 |
) |
|
|
|
2,836.6 |
|
|
|
2,765.7 |
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|
|
|
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Less – Treasury stock, at cost, 26.2 shares at December 31, 2022 and 26.1 shares at December 31, 2021 |
|
|
(1,282.4 |
) |
|
|
(1,280.2 |
) |
Total stockholders' equity |
|
|
1,554.2 |
|
|
|
1,485.5 |
|
Total liabilities and stockholders' equity |
|
$ |
2,837.3 |
|
|
$ |
2,819.4 |
|
7
Hexcel Corporation and Subsidiaries |
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Condensed Consolidated Statements of Cash Flows |
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Unaudited |
|
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|
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Years Ended |
|
|||||
|
|
December 31, |
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|||||
(In millions) |
|
2022 |
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|
2021 |
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||
|
|
|
|
|
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|
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Cash flows from operating activities |
|
|
|
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|
||
Net income |
|
$ |
126.3 |
|
|
$ |
16.1 |
|
Reconciliation to net cash used for operating activities: |
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|
|
|
|
|
||
Depreciation and amortization |
|
|
126.2 |
|
|
|
138.0 |
|
Amortization related to financing |
|
|
0.7 |
|
|
|
3.1 |
|
Deferred income taxes |
|
|
(3.1 |
) |
|
|
(2.6 |
) |
Equity in earnings from affiliated companies |
|
|
(8.1 |
) |
|
|
- |
|
Stock-based compensation |
|
|
20.0 |
|
|
|
19.0 |
|
Merger and restructuring expenses, net of payments |
|
|
(0.7 |
) |
|
|
(5.6 |
) |
Gain on sale of assets |
|
|
(19.4 |
) |
|
|
- |
|
Impairment of assets |
|
|
1.6 |
|
|
|
- |
|
Gain on sale of investments |
|
|
(0.3 |
) |
|
|
- |
|
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Changes in assets and liabilities: |
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||
Increase in accounts receivable |
|
|
(62.8 |
) |
|
|
(40.7 |
) |
Increase in inventories |
|
|
(82.4 |
) |
|
|
(40.4 |
) |
(Increase) decrease in prepaid expenses and other current assets |
|
|
(8.3 |
) |
|
|
13.0 |
|
Increase in accounts payable/accrued liabilities |
|
|
80.8 |
|
|
|
49.8 |
|
Other - net |
|
|
2.6 |
|
|
|
2.0 |
|
Net cash provided by operating activities (a) |
|
|
173.1 |
|
|
|
151.7 |
|
|
|
|
|
|
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Cash flows from investing activities |
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|
|
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|
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Capital expenditures (b) |
|
|
(76.3 |
) |
|
|
(27.9 |
) |
Proceeds from sale of assets |
|
|
21.2 |
|
|
|
- |
|
Proceeds from sale of investments |
|
|
0.5 |
|
|
|
- |
|
Net cash used for investing activities |
|
|
(54.6 |
) |
|
|
(27.9 |
) |
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|
||
Cash flows from financing activities |
|
|
|
|
|
|
||
Borrowings from senior unsecured credit facilities |
|
|
50.0 |
|
|
|
- |
|
Repayments of senior unsecured credit facilities |
|
|
(150.0 |
) |
|
|
(103.0 |
) |
Repayment of finance lease obligation and other debt, net |
|
|
(0.6 |
) |
|
|
(0.9 |
) |
Dividends paid |
|
|
(33.7 |
) |
|
|
- |
|
Activity under stock plans |
|
|
4.3 |
|
|
|
7.1 |
|
Net cash used for financing activities |
|
|
(130.0 |
) |
|
|
(96.8 |
) |
Effect of exchange rate changes on cash and cash equivalents |
|
|
(4.2 |
) |
|
|
(2.6 |
) |
Net (decrease) increase in cash and cash equivalents |
|
|
(15.7 |
) |
|
|
24.4 |
|
Cash and cash equivalents at beginning of period |
|
|
127.7 |
|
|
|
103.3 |
|
Cash and cash equivalents at end of period |
|
$ |
112.0 |
|
|
$ |
127.7 |
|
|
|
|
|
|
|
|
||
Supplemental data: |
|
|
|
|
|
|
||
Free Cash Flow (a)+(b) |
|
|
96.8 |
|
|
|
123.8 |
|
Accrual basis additions to property, plant and equipment |
|
|
69.8 |
|
|
|
41.4 |
|
8
Hexcel Corporation and Subsidiaries |
|
|||||||||||||||||||||||
Net Sales to Third-Party Customers by Market |
|
|||||||||||||||||||||||
Quarters Ended December 31, 2022 and 2021 |
Unaudited |
|
|
|
|
|
Table A |
|
||||||||||||||||
(In millions) |
|
As Reported |
|
|
Constant Currency (a) |
|
||||||||||||||||||
|
|
|
|
|
|
|
|
B/(W) |
|
|
FX |
|
|
|
|
|
B/(W) |
|
||||||
Market |
|
2022 |
|
|
2021 |
|
|
% |
|
|
Effect (b) |
|
|
2021 |
|
|
% |
|
||||||
Commercial Aerospace |
|
$ |
256.2 |
|
|
$ |
199.7 |
|
|
|
28.3 |
|
|
$ |
(0.9 |
) |
|
$ |
198.8 |
|
|
|
28.9 |
|
Space & Defense |
|
|
126.5 |
|
|
|
105.9 |
|
|
|
19.5 |
|
|
|
(2.2 |
) |
|
|
103.7 |
|
|
|
22.0 |
|
Industrial |
|
|
46.7 |
|
|
|
54.7 |
|
|
|
(14.6 |
) |
|
|
(4.5 |
) |
|
|
50.2 |
|
|
|
(7.0 |
) |
Consolidated Total |
|
$ |
429.4 |
|
|
$ |
360.3 |
|
|
|
19.2 |
|
|
$ |
(7.6 |
) |
|
$ |
352.7 |
|
|
|
21.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Consolidated % of Net Sales |
|
% |
|
|
% |
|
|
|
|
|
|
|
|
% |
|
|
|
|
||||||
Commercial Aerospace |
|
|
59.7 |
|
|
|
55.4 |
|
|
|
|
|
|
|
|
|
56.4 |
|
|
|
|
|||
Space & Defense |
|
|
29.4 |
|
|
|
29.4 |
|
|
|
|
|
|
|
|
|
29.4 |
|
|
|
|
|||
Industrial |
|
|
10.9 |
|
|
|
15.2 |
|
|
|
|
|
|
|
|
|
14.2 |
|
|
|
|
|||
Consolidated Total |
|
|
100.0 |
|
|
|
100.0 |
|
|
|
|
|
|
|
|
|
100.0 |
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Years Ended December 31, 2022 and 2021 |
Unaudited |
|
|
|
|
|
|
|
||||||||||||||||
(In millions) |
|
As Reported |
|
|
Constant Currency (a) |
|
||||||||||||||||||
|
|
|
|
|
|
|
|
B/(W) |
|
|
FX |
|
|
|
|
|
B/(W) |
|
||||||
Market |
|
2022 |
|
|
2021 |
|
|
% |
|
|
Effect (b) |
|
|
2021 |
|
|
% |
|
||||||
Commercial Aerospace |
|
$ |
911.8 |
|
|
$ |
668.2 |
|
|
|
36.5 |
|
|
$ |
(4.8 |
) |
|
$ |
663.4 |
|
|
|
37.4 |
|
Space & Defense |
|
|
465.2 |
|
|
|
434.9 |
|
|
|
7.0 |
|
|
|
(7.7 |
) |
|
|
427.2 |
|
|
|
8.9 |
|
Industrial |
|
|
200.7 |
|
|
|
221.6 |
|
|
|
(9.4 |
) |
|
|
(15.8 |
) |
|
|
205.8 |
|
|
|
(2.5 |
) |
Consolidated Total |
|
$ |
1,577.7 |
|
|
$ |
1,324.7 |
|
|
|
19.1 |
|
|
$ |
(28.3 |
) |
|
$ |
1,296.4 |
|
|
|
21.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Consolidated % of Net Sales |
|
% |
|
|
% |
|
|
|
|
|
|
|
|
% |
|
|
|
|
||||||
Commercial Aerospace |
|
|
57.8 |
|
|
|
50.5 |
|
|
|
|
|
|
|
|
|
51.2 |
|
|
|
|
|||
Space & Defense |
|
|
29.5 |
|
|
|
32.8 |
|
|
|
|
|
|
|
|
|
32.9 |
|
|
|
|
|||
Industrial |
|
|
12.7 |
|
|
|
16.7 |
|
|
|
|
|
|
|
|
|
15.9 |
|
|
|
|
|||
Consolidated Total |
|
|
100.0 |
|
|
|
100.0 |
|
|
|
|
|
|
|
|
|
100.0 |
|
|
|
|
|||
9
Hexcel Corporation and Subsidiaries |
|
|||||||||||||||
Segment Information |
|
Unaudited |
|
|
Table B |
|
||||||||||
(In millions) |
|
Composite Materials |
|
|
Engineered Products |
|
|
Corporate |
|
|
Total |
|
||||
Fourth Quarter 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net sales to external customers |
|
$ |
354.3 |
|
|
$ |
75.1 |
|
|
$ |
- |
|
|
$ |
429.4 |
|
Intersegment sales |
|
|
15.9 |
|
|
|
0.8 |
|
|
|
(16.7 |
) |
|
|
- |
|
Total sales |
|
|
370.2 |
|
|
|
75.9 |
|
|
|
(16.7 |
) |
|
|
429.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other operating expense (income) |
|
|
5.9 |
|
|
|
(0.1 |
) |
|
|
- |
|
|
|
5.8 |
|
Operating income (loss) |
|
|
47.0 |
|
|
|
10.9 |
|
|
|
(17.4 |
) |
|
|
40.5 |
|
% Operating margin |
|
|
12.7 |
% |
|
|
14.4 |
% |
|
|
|
|
|
9.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization |
|
|
27.8 |
|
|
|
3.5 |
|
|
|
- |
|
|
|
31.3 |
|
Stock-based compensation expense |
|
|
1.3 |
|
|
|
0.3 |
|
|
|
3.2 |
|
|
|
4.8 |
|
Accrual based additions to capital expenditures |
|
|
15.8 |
|
|
|
4.9 |
|
|
|
- |
|
|
|
20.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fourth Quarter 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net sales to external customers |
|
$ |
287.2 |
|
|
$ |
73.1 |
|
|
$ |
- |
|
|
$ |
360.3 |
|
Intersegment sales |
|
|
13.9 |
|
|
|
0.6 |
|
|
|
(14.5 |
) |
|
|
- |
|
Total sales |
|
|
301.1 |
|
|
|
73.7 |
|
|
|
(14.5 |
) |
|
|
360.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other operating expense |
|
|
1.5 |
|
|
|
0.6 |
|
|
|
0.1 |
|
|
|
2.2 |
|
Operating income (loss) |
|
|
26.2 |
|
|
|
3.1 |
|
|
|
(6.3 |
) |
|
|
23.0 |
|
% Operating margin |
|
|
8.7 |
% |
|
|
4.2 |
% |
|
|
|
|
|
6.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization |
|
|
32.0 |
|
|
|
3.6 |
|
|
|
- |
|
|
|
35.6 |
|
Stock-based compensation expense |
|
|
4.8 |
|
|
|
1.1 |
|
|
|
(3.1 |
) |
|
|
2.8 |
|
Accrual based additions to capital expenditures |
|
|
25.0 |
|
|
|
2.1 |
|
|
|
- |
|
|
|
27.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Year Ended December 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net sales to external customers |
|
$ |
1,279.7 |
|
|
$ |
298.0 |
|
|
$ |
- |
|
|
$ |
1,577.7 |
|
Intersegment sales |
|
|
66.3 |
|
|
|
2.8 |
|
|
|
(69.1 |
) |
|
|
- |
|
Total sales |
|
|
1,346.0 |
|
|
|
300.8 |
|
|
|
(69.1 |
) |
|
|
1,577.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other operating expense (income) |
|
|
7.5 |
|
|
|
- |
|
|
|
(19.4 |
) |
|
|
(11.9 |
) |
Operating income (loss) |
|
|
178.2 |
|
|
|
36.6 |
|
|
|
(39.6 |
) |
|
|
175.2 |
|
% Operating margin |
|
|
13.2 |
% |
|
|
12.2 |
% |
|
|
|
|
|
11.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization |
|
|
112.0 |
|
|
|
14.1 |
|
|
|
0.1 |
|
|
|
126.2 |
|
Stock-based compensation expense |
|
|
5.8 |
|
|
|
1.6 |
|
|
|
12.6 |
|
|
|
20.0 |
|
Accrual based additions to capital expenditures |
|
|
58.3 |
|
|
|
11.4 |
|
|
|
0.1 |
|
|
|
69.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Year Ended December 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net sales to external customers |
|
$ |
1,019.4 |
|
|
$ |
305.3 |
|
|
$ |
- |
|
|
$ |
1,324.7 |
|
Intersegment sales |
|
|
56.7 |
|
|
|
2.4 |
|
|
|
(59.1 |
) |
|
|
- |
|
Total sales |
|
|
1,076.1 |
|
|
|
307.7 |
|
|
|
(59.1 |
) |
|
|
1,324.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other operating expense |
|
|
17.8 |
|
|
|
0.1 |
|
|
|
0.3 |
|
|
|
18.2 |
|
Operating income (loss) |
|
|
88.1 |
|
|
|
20.2 |
|
|
|
(56.5 |
) |
|
|
51.8 |
|
% Operating margin |
|
|
8.2 |
% |
|
|
6.6 |
% |
|
|
|
|
|
3.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization |
|
|
123.4 |
|
|
|
14.5 |
|
|
|
0.1 |
|
|
|
138.0 |
|
Stock-based compensation expense |
|
|
6.9 |
|
|
|
1.5 |
|
|
|
10.6 |
|
|
|
19.0 |
|
Accrual based additions to capital expenditures |
|
|
35.7 |
|
|
|
5.7 |
|
|
|
- |
|
|
|
41.4 |
|
(a) Hexcel does not allocate corporate expenses to the operating segments.
10
Hexcel Corporation and Subsidiaries |
|
|
|
|
|
|
|
|
|||||||||
Reconciliation of GAAP to Non-GAAP Operating Income, Net Income, EPS and Operating Cash Flow to Free Cash Flow |
|
|
|
|
|
Table C |
|
|
|||||||||
|
|
Unaudited |
|||||||||||||||
|
|
Quarters Ended |
|
|
Years Ended |
|
|
||||||||||
|
|
December 31, |
|
|
December 31, |
|
|
||||||||||
(In millions) |
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
||||
GAAP operating income |
|
$ |
40.5 |
|
|
$ |
23.0 |
|
|
$ |
175.2 |
|
|
$ |
51.8 |
|
|
Other operating expense (income) (a) |
|
|
5.8 |
|
|
|
2.2 |
|
|
|
(11.9 |
) |
|
|
18.2 |
|
|
Non-GAAP operating income |
|
$ |
46.3 |
|
|
$ |
25.2 |
|
|
$ |
163.3 |
|
|
$ |
70.0 |
|
|
|
|
Unaudited |
|
|||||||||||||
|
|
Quarters Ended December 31, |
|
|||||||||||||
|
|
2022 |
|
|
2021 |
|
||||||||||
(In millions, except per diluted share data) |
|
Net Income |
|
|
EPS |
|
|
Net Income |
|
|
EPS |
|
||||
GAAP |
|
$ |
37.0 |
|
|
$ |
0.43 |
|
|
$ |
18.9 |
|
|
$ |
0.22 |
|
Other operating expense, net of tax (a) |
|
|
5.1 |
|
|
|
0.06 |
|
|
|
1.7 |
|
|
|
0.02 |
|
Other income (b) |
|
|
(8.1 |
) |
|
|
(0.09 |
) |
|
|
(6.6 |
) |
|
|
(0.08 |
) |
Tax benefit (c) |
|
|
(0.3 |
) |
|
|
- |
|
|
|
(0.5 |
) |
|
|
- |
|
Non-GAAP |
|
$ |
33.7 |
|
|
$ |
0.40 |
|
|
$ |
13.5 |
|
|
$ |
0.16 |
|
|
|
Unaudited |
|
|||||||||||||
|
|
Years Ended December 31, |
|
|||||||||||||
|
|
2022 |
|
|
2021 |
|
||||||||||
(In millions, except per diluted share data) |
|
Net Income |
|
|
EPS |
|
|
Net Income |
|
|
EPS |
|
||||
GAAP |
|
$ |
126.3 |
|
|
$ |
1.49 |
|
|
$ |
16.1 |
|
|
$ |
0.19 |
|
Other operating (income) expense, net of tax (a) |
|
|
(10.1 |
) |
|
|
(0.12 |
) |
|
|
13.4 |
|
|
|
0.16 |
|
Other income (b) |
|
|
(8.4 |
) |
|
|
(0.10 |
) |
|
|
(6.6 |
) |
|
|
(0.08 |
) |
Tax expense (c) |
|
|
1.0 |
|
|
|
0.01 |
|
|
|
0.3 |
|
|
|
- |
|
Non-GAAP |
|
$ |
108.8 |
|
|
$ |
1.28 |
|
|
$ |
23.2 |
|
|
$ |
0.27 |
|
|
|
Unaudited |
|
|||||
|
|
Years Ended December 31, |
|
|||||
(In millions) |
|
2022 |
|
|
2021 |
|
||
Net cash provided by operating activities |
|
$ |
173.1 |
|
|
$ |
151.7 |
|
Less: Capital expenditures |
|
|
(76.3 |
) |
|
|
(27.9 |
) |
Free cash flow (non-GAAP) |
|
$ |
96.8 |
|
|
$ |
123.8 |
|
11
NOTE: Management believes that adjusted operating income, adjusted net income, adjusted diluted net income per share, the adjusted tax rate, and free cash flow, which are non-GAAP measures, are meaningful to investors because they provide a view of Hexcel with respect to the underlying operating results excluding special items. Special items represent
significant charges or credits that are important to an understanding of Hexcel’s overall operating results in the periods presented. 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 and Subsidiaries |
|
|||||||||||
Schedule of Total Debt, Net of Cash |
Table D |
|
||||||||||
|
|
Unaudited |
|
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|
December 31, |
|
|
December 31, |
|
|
December 31, |
|
|||
(In millions) |
|
2022 |
|
|
2021 |
|
|
2020 |
|
|||
|
|
|
|
|
|
|
|
|
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Current portion finance lease |
|
$ |
0.2 |
|
|
$ |
0.9 |
|
|
$ |
0.9 |
|
Total current debt |
|
|
0.2 |
|
|
|
0.9 |
|
|
|
0.9 |
|
|
|
|
|
|
|
|
|
|
|
|||
Senior unsecured credit facility |
|
|
25.0 |
|
|
|
125.0 |
|
|
|
228.0 |
|
4.7% senior notes due 2025 |
|
|
300.0 |
|
|
|
300.0 |
|
|
|
300.0 |
|
3.95% senior notes due 2027 |
|
|
400.0 |
|
|
|
400.0 |
|
|
|
400.0 |
|
Senior notes original issue discounts |
|
|
(0.9 |
) |
|
|
(1.2 |
) |
|
|
(1.5 |
) |
Senior notes deferred financing costs |
|
|
(2.2 |
) |
|
|
(2.9 |
) |
|
|
(3.5 |
) |
Other debt |
|
|
1.4 |
|
|
|
1.5 |
|
|
|
2.5 |
|
Total long-term debt |
|
|
723.3 |
|
|
|
822.4 |
|
|
|
925.5 |
|
Total Debt |
|
|
723.5 |
|
|
|
823.3 |
|
|
|
926.4 |
|
Less: Cash and cash equivalents |
|
|
(112.0 |
) |
|
|
(127.7 |
) |
|
|
(103.3 |
) |
Total debt, net of cash |
|
$ |
611.5 |
|
|
$ |
695.6 |
|
|
$ |
823.1 |
|
12