-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, E95V5b2WcEUBzBefz+puwgRkPLLJ5evQT8OrmsyEk2Sd00/s7yG8+cH0DRF5eDo4 pZurSh5ZQ3dmbukfSKQpPQ== 0001157523-03-005680.txt : 20031022 0001157523-03-005680.hdr.sgml : 20031022 20031022145158 ACCESSION NUMBER: 0001157523-03-005680 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20031022 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20031022 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HEXCEL CORP /DE/ CENTRAL INDEX KEY: 0000717605 STANDARD INDUSTRIAL CLASSIFICATION: ABRASIVE ASBESTOS & MISC NONMETALLIC MINERAL PRODUCTS [3290] IRS NUMBER: 941109521 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-08472 FILM NUMBER: 03951736 BUSINESS ADDRESS: STREET 1: TWO STAMFORD PLAZA STREET 2: 281 TRESSER BLVD., 16TH FLOOR CITY: STAMFORD STATE: CT ZIP: 06901 BUSINESS PHONE: 203-969-0666 MAIL ADDRESS: STREET 1: TWO STAMFORD PLAZA STREET 2: 281 TRESSER BLVD., 16TH FLOOR CITY: STAMFORD STATE: CT ZIP: 06901 8-K 1 a4499396.txt HEXCEL CORP 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 October 22, 2003 (October 20, 2003) -------------------------------------- Date of report (Date of earliest event reported) Hexcel Corporation ------------------------------------------- (Exact Name of Registrant as Specified in Charter) Delaware 1-8472 94-1109521 -------------------------------------------------------------------- (State of Incorporation) (Commission File No.)(IRS Employer Identification No.) Two Stamford Plaza 281 Tresser Boulevard Stamford, Connecticut 06901-3238 ------------------------------------------------------ (Address of Principal Executive Offices and Zip Code) (203) 969-0666 -------------------------------------------------- (Registrant's telephone number, including area code) N/A ----------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. ------------------------------------------------------------------- (c) Exhibits 99.1 Press Release issued by the Company on October 20, 2003. Item 9. Regulation FD Disclosure. ------------------------ The information contained in Item 12 of this report is incorporated by reference into this Item 9. Item 12. Results of Operations and Financial Condition. --------------------------------------------- On October 20, 2003, Hexcel Corporation, a Delaware corporation (the "Company"), issued a press release in which the Company announced its financial results for its third fiscal quarter and nine months ended September 30, 2003. A copy of this earnings press release is being furnished as Exhibit 99.1 and is incorporated herein by reference. In accordance with General Instructions B.2 and B.6. of Form 8-K and Securities and Exchange Commission Release No. 33-8176, the information disclosed pursuant to Items 9 and 12 is not deemed "filed" for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, is not subject to the liabilities of that section and is not deemed incorporated by reference into any filing with the Securities and Exchange Commission, except as shall be expressly set forth by specific reference in any such filing. 2 Signature --------- Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. HEXCEL CORPORATION October 22, 2003 /s/ William J. Fazio --------------------- William J. Fazio Corporate Controller and Chief Accounting Officer 3 Exhibit Index Exhibit No. Description - ---------- ----------- 99.1 Press Release issued by the Company on October 20, 2003. 4 EX-99 3 a4499396ex991.txt EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 Hexcel Reports 2003 Third Quarter Results STAMFORD, Conn.--(BUSINESS WIRE)--Oct. 20, 2003--Hexcel Corporation (NYSE/PCX:HXL) Highlights: -- Net sales for quarter were $212.8 million, up 5.9% from Q3 last year. -- Net Loss for quarter $3.0 million compared to $3.6 million last year. -- Total debt, net of cash, reduced by $38.5 million to $458.4 million. -- Cash flow used to repurchase $11.7 million of long-term debt and retire $25.6 million of capital lease obligations. Unaudited Unaudited ---------------------------- Quarter Ended Nine Months Ended September September 30, 30, ---------------------------- (In millions, except per share data) 2003 2002 2003 2002 - ---------------------------------------------------------------------- Net sales $212.8 $201.0 $675.5 $644.3 Gross margin % 18.6% 18.6% 19.7% 18.9% Operating income $11.1 $15.1 $47.1 $47.9 Operating income % 5.2% 7.5% 7.0% 7.4% Other income (expense), net $0.4 $0.5 $(0.4) $10.3 Provision for income taxes (a) $0.7 $3.2 $5.9 $8.8 Equity in losses of and write-down of an investment in affiliated companies $(0.3) $(0.5) $(1.1) $(8.5) Net loss $(3.0) $(3.6) $(1.4) $(7.5) Deemed preferred dividends and accretion $(3.1) $- $(6.6) $- Net loss available to common shareholders $(6.1) $(3.6) $(8.0) $(7.5) Diluted net loss per common share $(0.16)$(0.09)$(0.21)$(0.19) - ---------------------------------------------------------------------- (a) The Company's tax provision primarily reflects taxes on foreign income. 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. net operating income (losses) until such time as the U.S. operations generate income in future years to utilize the net operating losses in full. October 20, 2003 - Hexcel Corporation (NYSE/PCX: HXL) today reported net sales for the third quarter, 2003 of $212.8 million as compared to $201.0 million for the 2002 third quarter. Had the same U.S. dollar, British pound and Euro exchange rates applied in the third quarter of 2003 as in the third quarter of 2002, revenues for the third quarter of 2003 would have been $6.7 million lower at $206.1 million. Gross margin for the third quarter of 2003 was $39.6 million compared with $37.3 million for the same period last year. In both periods, gross margin as a percentage of sales was 18.6%. Operating income for the third quarter of 2003 was $11.1 million as compared to $15.1 million for the same quarter last year. SG&A expenses of $22.9 million for the quarter were $0.9 million lower than the $23.8 million reported in each of the last three quarters, but $4.4 million higher ($3.6 million on a constant currency basis) than the abnormally low third quarter, 2002. Included in SG&A were $0.5 million in incremental expenses related to a work stoppage at our Kent, Washington facility during the quarter. R&T spending was $0.8 million higher in support of new products and new commercial aircraft qualification activities. Business consolidation and restructuring expenses for the quarter were $1.0 million compared to a net reversal of $0.1 million in the third quarter of 2002. Depreciation expense for the quarter at $12.3 million was $0.7 million higher than the third quarter of 2002 expense of $11.6 million, due to the changes in exchange rates and increased depreciation associated with certain of the Company's restructuring actions. During the 2003 third quarter, the Company recognized a $0.4 million gain on a real estate sale. In the third quarter 2002, reported results included a $0.5 million gain on early retirement of debt. These items are reported as other income (see Table D). Excluding these nonrecurring items and business consolidation and restructuring expenses, the Company's pretax loss for the third quarter of 2003 was $1.4 million, compared to a pretax loss of $0.5 million in the comparable 2002 quarter. The provision for income taxes was $0.7 million in the quarter compared to $3.2 million in the third quarter of 2002. Net loss for the quarter was $3.0 million compared to a net loss of $3.6 million for the same quarter of 2002. After reflecting deemed preferred dividends and accretion associated with our issuance in March 2003 of mandatorily redeemable convertible preferred stock, net loss attributable to common shareholders for the third quarter of 2003 was $6.1 million, or $0.16 per diluted common share, compared to a net loss of $3.6 million, or $0.09 per diluted common share, for the third quarter of 2002. Chief Executive Officer Comments Commenting on Hexcel's third quarter results, Mr. David E. Berges, Chairman, President and Chief Executive Officer, said, "In the quarter, we continued our success in generating cash and reducing debt. Total debt, net of cash, is down $38.5 million for the quarter to $458.4 million. We generated cash during the quarter through $25.7 million of asset sales and by delivering $16.8 million from operations. With this cash generated, we were able to retire $37.3 million of our term debt." Mr. Berges continued, "After adjusting for changes in foreign exchange rates, our revenues this quarter were approximately $5 million higher than last year which contributed to a $2.3 million increase in gross margin. While SG&A expenses and R&T spending are higher than the lows of the third quarter last year, they are in good control after considering the impact of the strengthening Euro, some increased spending in support of growth opportunities, and non-recurring costs associated with the work stoppage at our Kent facility. The Kent operation is now back in full operation with a new three year contract that provides significant productivity improvements. Our headcount as of September 30, 2003 is down to 4,095 employees, 2% lower than June 30, 2003 and 7.9% lower than a year ago helping to offset the cost pressures we have seen all year in such areas as energy, insurance and pension expense." Mr. Berges concluded, "We have now seen a number of quarters of relative stability in our commercial aerospace business and are pleased at the public indications from both Boeing and Airbus that suggest build rates in 2004 will be at a comparable level to this year. Hexcel's focus is now on building our positions on the next generation of commercial and military aircraft while seeking to exploit the growing applications for our products. While the fourth quarter can often reflect a period of customer inventory balancing, we are encouraged by the numerous external indications of an economic recovery, even in the electronics market." Revenue Trends The third quarter showed the usual seasonal reduction in revenues compared to the second quarter due to the European summer vacation period, which makes sequential trend comparisons less informative. Consolidated revenues for the quarter were 5.9% higher than the third quarter of 2002. Commercial aerospace and Industrial revenues were approximately the same as last year at equivalent foreign exchange rates. Space and Defense revenues increased $8.7 million year-on-year, reflecting higher aircraft production as well as non-recurring revenues associated with aircraft in development. Revenues from the Electronics market remained depressed. Debt and Convertible Preferred Stock Total debt, net of cash, decreased in the quarter by $38.5 million to $458.4 million as of September 30, 2003 (see Table E for details of the components of net debt). The cash inflow in the quarter resulted from exercising our previously disclosed option to sell the remaining interest in our Japanese electronics joint venture for $23.0 million, selling real estate for $2.7 million, and delivering $16.8 million from operations. Inventories at the end of the quarter were $5.0 million lower than June 30, 2003 and $5.9 million lower ($14.3 million lower at constant exchange rates) than September 30, 2002. Accounts receivable measured as days sales outstanding as of September 30, 2003 were comparable to the same quarter last year. The cash generated was used to repurchase $10.0 million principal amount of the Company's 9 3/4% Senior Subordinated Notes, due 2009, through open market transactions and $1.7 million principal amount of the Company's 7% Convertible Subordinated Notes, due 2011, meeting an annual sinking fund requirement. In addition, the Company retired a $25.6 million capital lease obligation. No material net gain or loss was recognized from these transactions. The retirement of the capital lease obligation reduces Hexcel's scheduled principal amortization of debt to about $2 million annually until 2008. Interest expense during the quarter was $13.5 million compared to $15.5 million in the third quarter of 2002, reflecting lower debt balances resulting from refinancing the Company's capital structure, asset sales, cash flow from operations and lower interest rates (see Table C for details of the components of interest expense). Deemed preferred dividends and accretion relating to the mandatorily redeemable convertible preferred stock were $3.1 million in the third quarter of 2003. A description of the accounting for these securities can be found in the Company's Form 8-K filed on April 7, 2003. Hexcel will host a conference call at 11:00 A.M. EDT, Tuesday, October 21, 2003 to discuss the third quarter results and respond to questions. The telephone number for the conference call is (913) 981-4900 and the confirmation code is 785559. 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 the 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 2003 full year consolidated revenues and the seasonality in quarterly revenues; cost reductions from business consolidation, restructuring and productivity programs together with their associated improvements; and the Company's focus on generating cash and reducing total debt. Actual results may differ materially from the results anticipated in the forward looking statements due to a variety of factors, including but not limited to changing market conditions, increased competition, product mix, inability to achieve planned manufacturing improvements and cost reductions, conditions in the financial markets and changes in currency exchange rates. Additional risk factors are described in the Company's filings with the SEC. The Company does not undertake an obligation to update its forward-looking statements to reflect future events. Hexcel Corporation and Subsidiaries Condensed Consolidated Statements of Operations - ---------------------------------------------------------------------- Unaudited ---------------------------- Nine Quarter Months Ended Ended September September 30, 30, (In millions, except per share data) 2003 2002 2003 2002 - ---------------------------------------------------------------------- Net sales $212.8 $201.0 $675.5 $644.3 Cost of sales 173.2 163.7 542.3 522.6 - ---------------------------------------------------------------------- Gross margin 39.6 37.3 133.2 121.7 Selling, general and administrative expenses 22.9 18.5 70.5 62.1 Research and technology expenses 4.6 3.8 13.2 11.0 Business consolidation and restructuring expenses 1.0 (0.1) 2.4 0.7 - ---------------------------------------------------------------------- Operating income 11.1 15.1 47.1 47.9 Interest expense (13.5) (15.5) (41.1) (48.4) Other income (expense), net 0.4 0.5 (0.4) 10.3 - ---------------------------------------------------------------------- Income (loss) before income taxes (2.0) 0.1 5.6 9.8 Provision for income taxes 0.7 3.2 5.9 8.8 - ---------------------------------------------------------------------- Income (loss) before equity in losses (2.7) (3.1) (0.3) 1.0 Equity in losses of and write-down of an investment in affiliated companies (0.3) (0.5) (1.1) (8.5) - ---------------------------------------------------------------------- Net loss (3.0) (3.6) (1.4) (7.5) Deemed preferred dividends and accretion (3.1) - (6.6) - - ---------------------------------------------------------------------- Net loss available to common shareholders $ (6.1)$ (3.6)$ (8.0)$ (7.5) - ---------------------------------------------------------------------- - ---------------------------------------------------------------------- Net loss per common share: Basic $(0.16)$(0.09)$(0.21)$(0.19) Diluted $(0.16)$(0.09)$(0.21)$(0.19) Weighted-average common shares outstanding(a): Basic 38.7 38.4 38.6 38.4 Diluted 38.7 38.4 38.6 38.4 - ---------------------------------------------------------------------- - ---------------------------------------------------------------------- (a) The Company's convertible subordinated notes, due 2003 and convertible subordinated debentures, due 2011, and all stock options were excluded from the computations of diluted net loss per common share for the quarters and nine months ended September 30, 2003 and 2002, as they were antidilutive. The convertible subordinated notes, due 2003, were repaid in full in March 2003. In addition, the Company's mandatorily redeemable convertible preferred stock issued on March 19, 2003 was excluded from the quarter and nine months ended September 30, 2003 computations of diluted net loss per common share, as it was antidilutive. Hexcel Corporation and Subsidiaries Condensed Consolidated Balance Sheets - ---------------------------------------------------------------------- Unaudited ------------------------- September June December (In millions, except per share data) 30, 30, 31, 2003 2003 2002 - ---------------------------------------------------------------------- Assets Current assets: Cash and cash equivalents $ 28.9 $ 29.9 $ 8.2 Accounts receivable, net 132.4 146.3 117.3 Inventories, net 121.2 126.2 113.6 Prepaid expenses and other assets 13.9 14.2 9.2 - ---------------------------------------------------------------------- Total current assets 296.4 316.6 248.3 Property, plant and equipment 662.7 658.2 642.8 Less accumulated depreciation (370.8) (359.6) (333.4) - ---------------------------------------------------------------------- Net property, plant and equipment 291.9 298.6 309.4 Goodwill, net 75.5 75.4 74.4 Investments in affiliated companies 8.7 32.0 34.0 Other assets 43.3 45.1 42.0 - ---------------------------------------------------------------------- Total assets $ 715.8 $ 767.7 $ 708.1 - ---------------------------------------------------------------------- - ---------------------------------------------------------------------- Liabilities and Stockholders' Equity (Deficit) Current liabilities: Notes payable and current maturities of capital lease obligations $ 2.7 $ 9.0 $ 621.7 Accounts payable 65.7 72.6 54.9 Accrued liabilities 96.0 100.0 102.5 - ---------------------------------------------------------------------- Total current liabilities 164.4 181.6 779.1 Long-term notes payable and capital lease obligations 484.6 517.8 - Other non-current liabilities 59.2 59.8 56.4 - ---------------------------------------------------------------------- Total liabilities 708.2 759.2 835.5 Mandatorily redeemable convertible preferred stock, 0.125 shares of series A and 0.125 shares of series B authorized, issued and outstanding at September 30, 2003 and June 30, 2003 103.0 99.9 - Stockholders' equity (deficit): Preferred stock, no par value, 20.0 shares of stock authorized, no shares issued or outstanding - - - Common stock, $0.01 par value, 200.0 shares of stock authorized, and 40.0 shares issued and outstanding at September 30, 2003 and 39.9 share issued and outstanding at June 30, 2003; and 100.0 shares of stock authorized, and 39.8 shares issued and outstanding at December 31, 2002 0.4 0.4 0.4 Additional paid-in capital 306.3 309.0 288.2 Accumulated deficit (382.9) (379.9) (381.5) Accumulated other comprehensive loss (5.7) (7.4) (21.2) - ---------------------------------------------------------------------- (81.9) (77.9) (114.1) Less - Treasury stock, at cost, 1.3 shares at September 30, 2003 and at December 31, 2002 (13.5) (13.5) (13.3) - ---------------------------------------------------------------------- Total stockholders' equity (deficit) (95.4) (91.4) (127.4) - ---------------------------------------------------------------------- Total liabilities and stockholders' equity (deficit) $ 715.8 $ 767.7 $ 708.1 - ---------------------------------------------------------------------- - ---------------------------------------------------------------------- Total debt, net of cash $ 458.4 $ 496.9 $ 613.5 - ---------------------------------------------------------------------- - ---------------------------------------------------------------------- Hexcel Corporation and Subsidiaries Condensed Consolidated Statements of Cash Flows - ---------------------------------------------------------------------- Unaudited ------------------------------- Nine Months Quarter Ended Ended September 30, September 30, (In millions) 2003 2002 2003 2002 - ---------------------------------------------------------------------- Cash flows from operating activities Net loss $ (3.0)$ (3.6) $ (1.4)$ (7.5) Reconciliation to net cash provided by operating activities: Depreciation 12.3 11.6 37.7 35.1 Amortization of debt discount and deferred financing costs 0.8 0.9 2.6 2.9 Deferred income taxes (1.7) 1.2 (0.5) 1.3 Business consolidation and restructuring expenses 1.0 (0.1) 2.4 0.7 Business consolidation and restructuring payments (1.8) (4.7) (7.3) (19.5) Equity in losses of and write-down of an investment in affiliated companies 0.3 0.5 1.1 8.5 Working capital changes and other 8.9 3.9 (7.4) 13.9 - ---------------------------------------------------------------------- Net cash provided by operating activities 16.8 9.7 27.2 35.4 - ---------------------------------------------------------------------- Cash flows from investing activities Capital expenditures (5.5) (3.3) (12.5) (8.5) Proceeds from sale of an ownership interest in an affiliated company 23.0 10.0 23.0 10.0 Proceeds from sale of other assets 2.7 0.3 5.7 1.2 Dividends from affiliated companies - 0.4 1.0 0.8 Other - - - (0.5) - ---------------------------------------------------------------------- Net cash provided by investing activities 20.2 7.4 17.2 3.0 - ---------------------------------------------------------------------- Cash flows from financing activities Proceeds from (repayments of) senior secured credit facilities, net (1.1) - 7.1 - Repayments of capital lease obligations and other debt, net (38.1) (2.4) (38.5) (6.8) Proceeds from issuance of 9-7/8% senior secured notes, net of discount - - 123.7 - Repayments of senior credit facility, net - (2.6) (179.7) (28.6) Redemption of 7% convertible subordinated notes - - (46.9) - Proceeds from issuance of mandatorily redeemable convertible preferred stock - - 125.0 - Issuance costs related to debt and equity offerings - - (14.1) - Activity under stock plans 0.1 0.1 0.2 0.2 - ---------------------------------------------------------------------- Net cash used for financing activities (39.1) (4.9) (23.2) (35.2) ------------------------------- Effect of exchange rate changes on cash and cash equivalents 1.1 0.1 (0.5) 1.4 - ---------------------------------------------------------------------- Net increase (decrease) in cash and cash equivalents (1.0) 12.3 20.7 4.6 Cash and cash equivalents at beginning of period 29.9 3.9 8.2 11.6 - ---------------------------------------------------------------------- Cash and cash equivalents at end of period $ 28.9 $ 16.2 $ 28.9 $ 16.2 - ---------------------------------------------------------------------- - ---------------------------------------------------------------------- Supplemental Data: Cash interest paid $ 18.6 $ 24.4 $ 44.4 $ 54.9 Cash taxes paid, net of refunds $ 2.7 $ 3.8 $ 8.3 $ 3.3 - ---------------------------------------------------------------------- - ---------------------------------------------------------------------- Hexcel Corporation and Subsidiaries Table A Net Sales to Third-Party Customers by Product Group and Market Segment - ---------------------------------------------------------------------- Unaudited -------------------------------------------- Commercial Space & (In millions) Aerospace Industrial Defense Electronics Total - ---------------------------------------------------------------------- Third Quarter 2003 Net Sales Reinforcements $ 11.8 $29.5 $ - $12.3 $ 53.6 Composites 63.1 34.4 42.0 - 139.5 Structures 16.7 - 3.0 - 19.7 - ---------------------------------------------------------------------- Total $ 91.6 $63.9 $45.0 $12.3 $212.8 43% 30% 21% 6% 100% - ---------------------------------------------------------------------- Second Quarter 2003 Net Sales Reinforcements $ 13.3 $34.4 $ - $13.5 $ 61.2 Composites 72.3 37.0 44.9 - 154.2 Structures 15.8 - 2.9 - 18.7 - ---------------------------------------------------------------------- Total $101.4 $71.4 $47.8 $13.5 $234.1 43% 31% 20% 6% 100% - ---------------------------------------------------------------------- Third Quarter 2002 Net Sales Reinforcements $ 11.5 $23.8 $ - $14.2 $ 49.5 Composites 58.5 37.7 32.3 - 128.5 Structures 19.0 - 4.0 - 23.0 - ---------------------------------------------------------------------- Total $ 89.0 $61.5 $36.3 $14.2 $201.0 44% 31% 18% 7% 100% - ---------------------------------------------------------------------- - ---------------------------------------------------------------------- Hexcel Corporation and Subsidiaries Table B Segment Data - ---------------------------------------------------------------------- Unaudited ------------------------------------------------ Corporate (In millions) Reinforcements Composites Structures & Other Total (a) - ---------------------------------------------------------------------- Third Quarter 2003 - ---------------------------------------------------------------------- Net sales to external customers $ 53.6 $139.5 $19.7 $ - $212.8 Intersegment sales 19.2 2.3 - - 21.5 - ---------------------------------------------------------------------- Total sales 72.8 141.8 19.7 - 234.3 Operating income (loss) 2.6 14.0 0.4 (5.9) 11.1 Depreciation 3.6 8.2 0.5 - 12.3 Business consolidation and restructuring expenses 0.8 0.2 - - 1.0 Capital expenditures 1.7 3.8 - - 5.5 - ---------------------------------------------------------------------- Second Quarter 2003 - ---------------------------------------------------------------------- Net sales to external customers $ 61.2 $154.2 $18.7 $ - $234.1 Intersegment sales 21.2 4.0 - - 25.2 - ---------------------------------------------------------------------- Total sales 82.4 158.2 18.7 - 259.3 Operating income (loss) 5.7 20.2 (0.2) (6.9) 18.8 Depreciation 4.1 8.3 0.5 - 12.9 Business consolidation and restructuring expenses 0.1 0.5 0.1 - 0.7 Capital expenditures 1.4 3.2 0.1 - 4.7 - ---------------------------------------------------------------------- Third Quarter 2002 - ---------------------------------------------------------------------- Net sales to external customers $ 49.5 $128.5 $23.0 $ - $201.0 Intersegment sales 16.6 4.2 - - 20.8 - ---------------------------------------------------------------------- Total sales 66.1 132.7 23.0 - 221.8 Operating income (loss) 5.1 16.0 (0.8) (5.2) 15.1 Depreciation 3.7 7.2 0.6 0.1 11.6 Business consolidation and restructuring expenses (0.5) 0.2 0.2 - (0.1) Capital expenditures 0.8 2.4 0.1 - 3.3 - ---------------------------------------------------------------------- - ---------------------------------------------------------------------- (a) The Company does not allocate corporate expenses to its business segments. Hexcel Corporation and Subsidiaries Table C Schedule of Interest Expense - ---------------------------------------------------------------------- Unaudited ------------------------- Nine Months Quarter Ended Ended September September 30, 30, (In millions) 2003 2002 2003 2002 - ---------------------------------------------------------------------- Interest on debt instruments $12.3 $14.0 $37.2 $42.2 Banking, commitment and other fees 0.4 0.5 1.3 3.2 Amortization of financing costs and discounts (non-cash) 0.8 1.0 2.6 3.0 - ---------------------------------------------------------------------- Interest Expense $13.5 $15.5 $41.1 $48.4 - ---------------------------------------------------------------------- - ---------------------------------------------------------------------- Hexcel Corporation and Subsidiaries Table D Schedule of Other Income (Expense) - ---------------------------------------------------------------------- Unaudited ----------------------- Quarter Nine Months Ended Ended September September 30, 30, (In millions) 2003 2002 2003 2002 - ---------------------------------------------------------------------- Gain on sale of assets $0.4 $ - $ 2.2 $ - Gain on expiration of contingent liability - - 1.4 - Gain (loss) on early retirement of debt, net - 0.5 (4.0) 0.5 Litigation gain - - - 9.8 - ---------------------------------------------------------------------- Other Income (Expense), net $0.4 $0.5 $(0.4)$10.3 - ---------------------------------------------------------------------- - ---------------------------------------------------------------------- Hexcel Corporation and Subsidiaries Table E Schedule of Net Debt - ---------------------------------------------------------------------- Unaudited ------------------------- September June December (In millions) 30, 30, 31, 2003 2003 2002 - ---------------------------------------------------------------------- Senior Secured Credit Facility, due 2008 $ 7.1 $ 8.2 $ - Senior Credit Facility, due 2005 - - 179.7 European credit and overdraft facilities 2.4 2.6 0.2 9.875% Senior secured notes, due 2008, net of unamortized discount of $1.2 as of September 30, and June 30, 2003 123.8 123.8 - 9.75% Senior subordinated notes, due 2009, net of unamortized discount of $1.0 as of September 30, 2003, $1.1 as of June 30, 2003, and $1.2 as of December 31, 2002 329.0 338.9 338.8 7.0% Convertible subordinated notes, due 2003 - - 46.9 7.0% Convertible subordinated debentures, due 2011 21.0 22.7 22.7 - ---------------------------------------------------------------------- Total notes payable 483.3 496.2 588.3 Capital lease obligations 4.0 30.6 33.4 - ---------------------------------------------------------------------- Total notes payable and capital lease obligations $ 487.3 $ 526.8 $ 621.7 - ---------------------------------------------------------------------- Cash and cash equivalents 28.9 29.9 8.2 - ---------------------------------------------------------------------- Net Debt $ 458.4 $ 496.9 $ 613.5 - ---------------------------------------------------------------------- - ---------------------------------------------------------------------- CONTACT: Hexcel Corporation Investors: Stephen C. Forsyth, 203-969-0666 ext. 425 stephen.forsyth@hexcel.com Media: Michael Bacal, 203-969-0666 ext. 426 michael.bacal@hexcel.com -----END PRIVACY-ENHANCED MESSAGE-----