-----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, QO2X5aEIS0KyQdSpjY7FZWRz69Xrruj3ZSohsam4M2G1ELWc7j5aNLmy0TfiJYsp Ngb6vNvO0XTX2gkjmEcIWw== 0000861361-96-000012.txt : 19961011 0000861361-96-000012.hdr.sgml : 19961011 ACCESSION NUMBER: 0000861361-96-000012 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960831 FILED AS OF DATE: 19961010 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: BE AEROSPACE INC CENTRAL INDEX KEY: 0000861361 STANDARD INDUSTRIAL CLASSIFICATION: PUBLIC BUILDING AND RELATED FURNITURE [2531] IRS NUMBER: 061209796 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-18348 FILM NUMBER: 96641953 BUSINESS ADDRESS: STREET 1: 1400 CORPORATE CENTER WAY CITY: WELLINGTON STATE: FL ZIP: 33414 BUSINESS PHONE: 4077915000 MAIL ADDRESS: STREET 1: 1300 CORPORATE CENTER WAY STREET 2: 1300 CORPORATE CENTER WAY CITY: WELLINGTON STATE: FL ZIP: 33414 FORMER COMPANY: FORMER CONFORMED NAME: BE AVIONICS INC DATE OF NAME CHANGE: 19920608 10-Q 1 2ND QUARTER 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended August 31, 1996 Commission File No. 0-18348 BE AEROSPACE, INC. (Exact name of registrant as specified in its charter) Delaware 06-1209796 (State of Incorporation) (I.R.S. Employer Identification No.) 1400 Corporate Center Way Wellington, Florida 33414 (Address of principal executive offices) (561)791-5000 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES[X] NO[ ] The registrant has one class of common stock, $ .01 par value, of which 17,048,328 shares were outstanding as of September 20, 1996. BE AEROSPACE, INC. Item 1. Financial Statements
CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except share data) August 31, February 24, 1996 1996 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 14,188 $ 15,376 Receivables - trade, less allowance for doubtful accounts of $4,562 (August 31, 1996) and $4,973 (February 24, 1996) 59,935 54,242 Inventories, net 77,518 72,569 Other current assets 8,138 7,621 -------- --------- Total current assets 159,779 149,808 PROPERTY AND EQUIPMENT, net 86,887 86,357 INTANGIBLES AND OTHER ASSETS, net 196,674 197,421 --------- --------- $ 443,340 $ 433,586 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 41,867 $ 45,102 Accrued expenses 50,171 56,400 Current portion of long-term debt 5,459 6,482 -------- -------- Total current liabilities 97,497 107,984 LONG-TERM DEBT 282,058 273,192 DEFERRED INCOME TAXES 1,923 1,257 OTHER LIABILITIES 9,718 6,996 STOCKHOLDERS' EQUITY: Preferred stock, $.01 par value; 1,000,000 shares authorized; no shares outstanding Common stock, $.01 par value; 30,000,000 shares authorized; 16,877,867 (August 31, 1996) 16,392,994 (February 24, 1996) issued 169 164 Additional paid-in capital 125,730 121,366 Retained deficit (72,699) (75,995) Cumulative foreign exchange translation adjustment (1,056) (1,378) Total stockholders' equity 52,144 44,157 --------- --------- $443,340 $ 433,586 ======== =========
BE AEROSPACE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except per share data) Three Months Ended ------------------ August 31, August 26, 1996 1995 NET SALES $ 103,026 $ 57,451 COST OF SALES 68,587 38,732 ------ ------ GROSS PROFIT 34,439 18,719 OPERATING EXPENSES: Selling, general and administrative 12,669 8,443 Research, development and engineering 9,430 11,471 Amortization expense 2,806 2,358 Total operating expenses 24,905 22,272 ------ ------ OPERATING EARNINGS (LOSS) 9,534 (3,553) INTEREST EXPENSE, net 7,464 3,961 ----- ----- EARNINGS (LOSS) BEFORE INCOME TAXES 2,070 (7,514) INCOME TAXES 207 - NET EARNINGS (LOSS) $ 1,863 $ (7,514) --------- --------- EARNINGS (LOSS) PER COMMON SHARE: NET EARNINGS (LOSS) PER COMMON SHARE $ 0.11 $ (0.47) COMMON AND COMMON EQUIVALENT SHARES 17,598 16,118 --------- ---------
BE AEROSPACE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except per share data) Six Months Ended --------------- August 31, August 26, 1996 1995 NET SALES $ 200,328 $ 113,045 COST OF SALES 133,342 75,925 ------- ------ GROSS PROFIT 66,986 37,120 OPERATING EXPENSES: Selling, general and administrative 24,254 16,743 Research, development and engineering 19,157 24,774 Amortization expense 5,514 4,650 ----- ----- Total operating expenses 48,925 46,167 ------ ------ OPERATING EARNINGS (LOSS) 18,061 (9,047) INTEREST EXPENSE, net 14,399 8,149 ------ ----- EARNINGS (LOSS) BEFORE INCOME TAXES AND CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE 3,662 (17,196) INCOME TAXES 366 - ------ ------- EARNINGS (LOSS) BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE 3,296 (17,196) CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE - 23,332 ----- ------ NET EARNINGS (LOSS) $ 3,296 $ (40,528) --------- --------- EARNINGS (LOSS) PER COMMON SHARE: NET EARNINGS (LOSS) PER COMMON SHARE $ .19 $ (2.52) --------- --------- COMMON AND COMMON EQUIVALENT SHARES 17,446 16,108 --------- ---------
BE AEROSPACE, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) Six Months Ended ---------------- August 31, August 26, 1996 1995 CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings (loss) $ 3,296 $(40,528) Adjustments to reconcile net loss to net cash flows provided by operating activities: Depreciation and amortization 11,840 8,413 Cumulative effect of change in accounting principle -- 23,332 Deferred income taxes 524 (948) Non cash employee benefit plan contributions 442 683 Changes in operating assets and liabilities: Accounts receivable (5,596) 4,306 Inventories (4,693) (3,813) Other current assets (512) 120 Accounts payable (3,724) 3,555 Other liabilities (5,599) (5,312) ------ ------ Net cash flows used in operating activities (4,022) (8,296) ------ ------ CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (7,065) (8,168) Change in intangibles and other assets - net (4,591) (2,095) ------ ------ Net cash flows used in investing activities (11,656) (10,263) ------- ------- CASH FLOWS FROM FINANCING ACTIVITIES: Net borrowings under revolving lines of credit 10,576 17,665 Proceeds from issuances of stock 3,927 153 ----- ------ Net cash flows provided by financing activities 14,503 17,818 ------ ------ Effect of exchange rate changes on cash flows (13) (88) Net decrease in cash and cash equivalents (1,188) (829) Cash and cash equivalents, beginning of period 15,376 8,319 Cash and cash equivalents, end of period $ 14,188 $ 7,490 -------- -------- Supplemental disclosures of cash flow information: Cash paid during period for interest $ 13,336 $ 8,510 Cash paid during period for income taxes, net $ 309 -
BE AEROSPACE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED AUGUST 31, 1996 AND AUGUST 26, 1995 Note 1. Basis of Presentation: The information set forth in these consolidated financial statements as of August 31, 1996 and for the six and three month periods ended August 31, 1996 and August 26, 1995 is unaudited and may be subject to normal year-end adjustments. In the opinion of management, the unaudited consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments necessary to present fairly the financial position of BE Aerospace, Inc. (the "Company" or "BEA") for the periods indicated. Results of operations for the interim periods ended August 31, 1996 and August 26, 1995 are not necessarily indicative of the results of operations for the full fiscal year. For further information, including information with regard to conditions in the airline industry and their possible impact on the Company, please refer to the Company's annual report on Form 10-K for the fiscal year ended February 24, 1996. The accompanying consolidated financial statements consolidate all of the Company's subsidiaries. Certain information normally included in footnote disclosures to the annual financial statements has been condensed or omitted in accordance with the rules and regulations of the Securities and Exchange Commission. [Remainder of page intentionally left blank] BE AEROSPACE, INC. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. (Dollars in thousands, except per share data) The following discussion and analysis addresses the results of the Company's operations for the three months ended August 31, 1996, as compared to the Company's results of operations for the three months ended August 26, 1995. The discussion and analysis then addresses the results of the Company's operations for the six months ended August 31, 1996 as compared to the Company's results of operations for the six months ended August 26, 1995. The discussion and analysis then addresses the liquidity and financial condition of the Company. THREE MONTHS ENDED AUGUST 31, 1996, AS COMPARED TO THE THREE MONTHS ENDED AUGUST 26, 1995. Sales for the three months ended August 31, 1996 were $103,026 or 79% higher than sales of $57,451 for the comparable period in the prior year. The increase in sales is attributable to substantially higher unit volume shipments of all the Company's products as a result of improving industry conditions. Of the $45,575 increase in sales for the three month period, $29,429 was due to increased seating revenues directly related to the acquisition of Burns. Excluding the effect of the Burn's acquisition, sales were up 28% from the comparable period in the prior year. At August 31, 1996, the Company's backlog stood at $480,000, up from $450,000 at February 24, 1996. New order bookings in the three months ended August 31, 1996 of approximately $109,000 were approximately $59,000 greater than new orders bookings of approximately $50,000 for the comparable period in the prior year. Management estimates that approximately 36% of its backlog is deliverable during the balance of fiscal 1997. Gross profit was $34,439, or 33.4% of sales, for the three months ended August 31, 1996 and was $15,720 higher than gross profit for the comparable period in the prior year of $18,719, which represented 32.6% of sales. The increase in gross profit is primarily the result of the higher sales volumes. Selling, general and administrative expenses were $12,669 or 12.3% of sales for the three months ended August 31, 1996. This was $4,226 higher than selling, general and administrative expenses for the comparable period in the prior year of $8,443, or 14.7% of sales, principally due to the substantial increase in revenues and the acquisition of Burns. Research, development and engineering expenses were $9,430 or 9.2% of sales, for the three months ended August 31, 1996. For the comparable period in the prior year, research and development expense was $11,471 or 20.0% of sales. The decrease in expenses during the current year is the result of a decrease in the level of activity associated with MDDS, offset somewhat by an increase in product development activity in the Seating Products Division. Amortization expense for the quarter ended August 31, 1996 of $2,806 was $448 more than the amount recorded in the first half of fiscal 1996 as a result of the Burns acquisition. Net interest expense was $7,464 for the three months ended August 31, 1996, or $3,503 higher than the net interest expense of $3,961 recorded for the comparable period in the prior year, and is due to the increase in the Company's long-term debt outstanding as a result of the Burns acquisition. BE AEROSPACE, INC. THREE MONTHS ENDED AUGUST 31, 1996, AS COMPARED TO THE THREE MONTHS ENDED AUGUST 26, 1995. (CONTINUED) Earnings before income taxes of $2,070 for the three months ended August 31, 1996 was $9,584 greater than the loss before taxes of $(7,514) in the prior year. Income taxes for the three months ended August 31, 1996 were $207 or 10% of earnings before income taxes as compared to no tax provision in the first half of fiscal 1996. Net earnings were $1,863 or $.11 per share for the three months ended August 31, 1996, as compared to a net loss of $(7,514) or $(.47) per share for the comparable period in the prior year. SIX MONTHS ENDED AUGUST 31, 1996, AS COMPARED TO THE SIX MONTHS ENDED AUGUST 26, 1996. Sales for the six months ended August 31, 1996 were $200,328 or 77% higher than sales of $113,045 for the comparable period in the prior year. The increase in sales is attributable to substantially higher unit volume shipments of all the Company's products as a result of improving industry conditions. Of the $87,283 increase in sales for the six month period, $56,129 was due to increased seating revenues directly related to the acquisition of Burns. Excluding the effect of the Burns acquisition, revenues were up 28% from the comparable period in the prior year. At August 31, 1996, the Company's backlog stood at approximately $480,000, up from approximately $450,000 at February 24, 1996. New order bookings in the six months ended August 31, 1996 of approximately $230,000 were $113,000 greater than new orders bookings of approximately $118,000 for the comparable period in the prior year. Management estimates that approximately 36% of its backlog is deliverable during the balance of fiscal 1997. Gross profit was $66,986 or 33.4% of sales for the six months ended August 31, 1996 and was $29,866 higher than gross profit for the comparable period in the prior year of $37,120, which represented 32.8% of sales. The increase in gross profit is the result of the higher sales volume. Selling, general and administrative expenses were $24,254 or 12.1% of sales for the six months ended August 31, 1996. This was $7,511 higher than selling, general and administrative expenses for the comparable period in the prior year of $16,743, or 14.8% of sales, principally due to the substantial increases in revenues and the acquisition of Burns. Amortization expense for the six months ended August 31, 1996 of $5,514 was $864 more than the amount recorded in the first half of fiscal 1996 as a result of the Burns acquisition. Net interest expense was $14,399 for the six months ended August 31, 1996, or $6,250 higher than the net interest expense of $8,149 recorded for the comparable period in the prior year, and is due to the increase in the Company's long-term outstanding debt as a result of the Burns acquisition. BE AEROSPACE, INC. Earnings before income taxes of $3,662 for the six months ended August 31, 1996 was $20,858 more than the loss before income taxes of $(17,196) in the prior year. Income taxes for the six months ended August 31, 1996 were $366 or 10% of earnings before income taxes, as compared to no tax provision in the first half of fiscal 1996. Net earnings were $3,296 or $.19 per share for the six months ended August 31, 1996 as compared to a net loss of $(40,528) or $(2.52) per share for the comparable period in the prior year, which includes the cumulative effect of the accounting change of $23,332. LIQUIDITY AND CAPITAL RESOURCES BEA's primary requirements for working capital have been directly related to its accounts receivable and inventory levels, costs associated with the design and development of the MDDS and other products and scheduled interest payments on its indebtedness. BEA's working capital was $62,282, as of August 31, 1996, compared to $41,824 as of February 24, 1996. In January 1996 the Company amended its existing credit facilities by increasing the aggregate principal amount that may be borrowed thereunder to $100,000 (the "Bank Credit Facility"). The Bank Credit Facility consists of a $25,000 reducing revolver and a $75,000 revolving facility. The amount of the reducing revolver will be reduced automatically by 12.5% on April 19, 1999 and on each of the seven succeeding quarterly anniversaries of such date. The Reducing Revolver is collateralized by all of the issued and outstanding capital stock of Acurex (a wholly owned subsidiary) and has a five year maturity, with the commitments of the lenders thereunder reducing during such five year period, and the revolving facility is collateralized by all of the Company's accounts receivable, all of its inventory and substantially all of its other personal property and has a five year maturity. The Bank Credit Facility contains customary affirmative covenants, negative covenants and conditions of borrowing. At August 31, 1996 indebtedness in an aggregate principal amount of approximately $47,000, plus letters of credit amounting to approximately $6,000 were outstanding under the Bank Credit Facility. The Company's liquidity requirements consist primarily of working capital needs and scheduled payments of interest on its indebtedness and costs associated with integrating Burns. As a result of the Burns acquisition, the Company will have significantly increased cash requirements for the payment of interest on its outstanding borrowings. No principal payments are required for any of the borrowings under the Bank Credit Facility until February, 2001 at which time any unpaid principal under the Bank Credit Facility will be due and payable. At August 31, 1996, the Company's cash and cash equivalents were $14,188 as compared to $15,376 at February 24, 1996. Cash used in operating activities during the six months ended August 31, 1996 was $(4,022), and cash used in operating activities in fiscal 1996 was $(8,296). The primary source of cash during the six months ended August 31, 1996 was net earnings of $3,296 and non-cash charges for depreciation and amortization of $11,840 and approximately $3.9 million from issuance of common stock which was offset by a use of cash of $19,158, principally due to increases in receivables and inventories, as well as decreases in current liabilities. BE AEROSPACE, INC. The Company's capital expenditures were $7,065 and $8,168 during the six months ended August 31, 1996 and August 26, 1995 respectively. The Company expects that its capital expenditures for the remainder of fiscal 1997 will be approximately $7,000. These capital expenditures will relate principally to maintenance of operations. The Company believes that cash flow from operations and availability under the Bank Credit Facility provide adequate funds for its working capital needs, planned capital expenditures and debt service obligations through the term of the Bank Credit Facility. The Company believes that it will be able to refinance the Bank Credit Facility prior to its termination, although there can be no assurance that it will be able to do so. The Company's ability to fund its operations and make planned capital expenditures, to make scheduled payments and to refinance its indebtedness depends on its future operating performance and cash flow, which, in turn, are subject to prevailing economic conditions and to financial, business and other factors, some of which are beyond its control. This report includes forward-looking statements which involve risks and uncertainties. The Company's actual experience may differ materially from that discussed above. Factors that might cause such a difference include, but are not limited to, those discussed in "Risk Factors" in the Company's Registration Statement on Form S-4 dated April 3, 1996, the Company's Form 10-K for the year ended February 24, 1996, as well as future events that have the effect of reducing the Company's available cash balances, such as unexpected operating losses or delays in the integration of the Company's seating business or the delivery of the MDDS interactive video system or capital expenditures or cash expenditures related to possible future acquisitions. BE AEROSPACE, INC. PART II -- OTHER INFORMATION Item 1. Legal Proceedings. Not applicable. Item 2. Changes in Securities. Not applicable. Item 3. Defaults Upon Senior Securities. Not applicable. Item 4. Submission of Matters to a Vote of Security Holders. Not applicable. Item 5. Other Information. None. Item 6. Exhibits and Reports on Form 8-K. a. Exhibits. None. BE AEROSPACE, INC. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. BE AEROSPACE, INC. Date: October 4, 1996 By:/s/ Robert J. Khoury ------------------------- Robert J. Khoury Vice Chairman and Chief Executive Officer Date: October 4, 1996 By: /s/ Thomas P. McCaffrey ---------------------------- Thomas P. McCaffrey Vice President & Chief Financial Officer EX-27 2 ARTICLE 5 FDS FOR 2ND QUARTER
5 6-MOS FEB-22-1997 AUG-31-1996 14,188 0 64,497 (4,562) 77,518 159,779 120,403 (33,516) 443,340 97,497 282,058 0 0 169 51,975 443,340 200,328 200,328 133,342 182,267 0 0 14,399 3,662 366 3,296 0 0 0 3,296 .19 .19
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