-----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, WEoQq+RmPiR0Zlg5TeBbREOdHPDajkoEBw9iT7nIF9RADeWKWEOhTmXo87Df8lyq CzVJpLiajWYKlk5ADFgT5A== 0000861361-97-000007.txt : 19970701 0000861361-97-000007.hdr.sgml : 19970701 ACCESSION NUMBER: 0000861361-97-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970630 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: 0222 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-18348 FILM NUMBER: 97633094 BUSINESS ADDRESS: STREET 1: 1400 CORPORATE CTR WY 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 1ST 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 May 31, 1997 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 22,073,022 shares were outstanding as of June 20, 1997. B/E AEROSPACE, INC. Item 1. Financial Statements CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except share data)
May 31, February 22, 1997 1997 ---- ---- ASSETS CURRENT ASSETS: Cash and cash equivalents .................................... $ 44,223 $ 44,149 Accounts receivable - trade, less allowance for doubtful accounts of $3,877 (May 31,1997) and $4,864 (February 22, 1997) .......................... 67,074 73,489 Inventories, net ............................................. 98,171 92,900 Other current assets ......................................... 5,001 2,781 -------- -------- Total current assets ..................................... 214,469 213,319 PROPERTY AND EQUIPMENT, net ....................................... 90,246 87,888 INTANGIBLES AND OTHER ASSETS, net ................................. 187,078 189,882 --------- --------- $ 491,793 $ 491,089 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable ............................................. $ 39,606 $ 42,889 Accrued expenses ............................................. 39,791 43,837 Current portion of long-term debt ............................ 4,072 4,419 --------- --------- Total current liabilities ............................... 83,469 91,145 --------- --------- LONG-TERM DEBT .................................................... 225,641 225,402 DEFERRED INCOME TAXES ............................................. 1,411 1,667 OTHER LIABILITIES ................................................. 7,086 7,114 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; 22,070,772 (May 31, 1997) 21,893,392 (February 22, 1997) issued and outstanding 220 219 Additional paid-in capital ................................... 230,559 228,710 Accumulated deficit .......................................... (55,343) (62,286) Cumulative foreign exchange translation adjustment ........... (1,250) (882) --------- --------- Total stockholders' equity .............................. 174,186 165,761 --------- --------- $ 491,793 $ 491,089 ========= =========
B/E AEROSPACE, INC. CONSOLIDATED STATEMENTS OF EARNINGS (Dollars in thousands, except per share data)
Three Months Ended ---------------------- May 31, May 25, 1997 1996 NET SALES ................................ $113,846 $ 97,302 COST OF SALES ............................ 72,783 64,755 -------- -------- GROSS PROFIT ............................. 41,063 32,547 OPERATING EXPENSES: Selling, general and administrative . 12,903 11,585 Research, development and engineering 11,008 9,727 Amortization of intangible assets ... 2,853 2,708 -------- -------- Total operating expenses ....... 26,764 24,020 -------- -------- OPERATING EARNINGS ....................... 14,299 8,527 INTEREST EXPENSE, net .................... 6,130 6,935 -------- -------- EARNINGS BEFORE INCOME TAXES ............. 8,169 1,592 INCOME TAXES ............................. 1,226 159 -------- -------- NET EARNINGS ............................. $ 6,943 $ 1,433 ======== ======== NET EARNINGS PER COMMON SHARE ............ $ .30 $ .08 ======== ======== COMMON AND COMMON EQUIVALENT SHARES ...... 23,057 17,241 ======== ========
B/E AEROSPACE, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands)
Three Months Ended ---------------------------- May 31, May 25, 1997 1996 ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings ............................................ $ 6,943 $ 1,433 Adjustments to reconcile net earnings to net cash flows provided by (used in) operating activities: Depreciation and amortization .................. 6,381 5,350 Deferred income taxes .......................... (275) 534 Non cash employee benefit plan contributions ... 447 83 Changes in operating assets and liabilities: Accounts receivable ....................... 6,516 (9,402) Inventories ............................... (5,023) (209) Other current assets ...................... (2,206) (460) Accounts payable .......................... (2,263) 1,408 Other liabilities .......................... (5,226) (6,549) -------- ------- Net cash flows provided by (used in) operating activities 5,294 (7,812) -------- ------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ................................... (6,159) (1,218) Change in other assets - net ........................... (347) 43 ------- ------- Net cash flows used in investing activities ............ (6,506) (1,175) ------- ------- CASH FLOWS FROM FINANCING ACTIVITIES: Repayments of long-term debt ............................ (174) (1,364) Proceeds from issuances of stock ........................ 1,403 1,165 ------- ------- Net cash flows provided by (used in) financing activities 1,229 (199) ------- ------- Effect of exchange rate changes on cash flows ................ 57 (39) ------- ------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ......... 74 (9,225) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD ............... $ 44,149 $ 15,376 ======== ======== CASH AND CASH EQUIVALENTS, END OF PERIOD ..................... $ 44,223 $ 6,151 ======== ======== SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during period for interest .................... $ 6,327 $ 6,734 ======== ======== Cash paid during period for income taxes ................ $ 179 ========
B/E AEROSPACE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS THREE MONTHS ENDED MAY 31, 1997 AND MAY 25, 1996 Note 1. Basis of Presentation: The information set forth in these consolidated financial statements as of May 31, 1997 and for the three months ended May 31, 1997 and May 25, 1996 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 B/E Aerospace, Inc. (the "Company" or "B/E") for the periods indicated. Results of operations for the interim periods ended May 31, 1997 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 22, 1997. The accompanying consolidated financial statements consolidate all of the Company's subsidiaries. All significant intercompany transactions have been eliminated. Certain amounts in the prior years' Consolidated Financial Statements have been reclassified to conform to the current fiscal year's presentation. 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. Note 2. Earnings Per Share In February 1997, the FASB issued SFAS No. 128, Earnings Per Share which is effective for financial statements issued for periods ending after December 15, 1997. SFAS No. 128 requires the disclosure of basic and diluted earnings per share. Earnings per share, as reported and as would be reportable under SFAS No. 128 for the three months ended May 31, 1997 and May 25, 1996 are as follows:
As Reported ---------------- May 31, May 25, 1997 1996 ---- ---- Primary earnings per share $.30 $.08 Pro Forma --------------- May 31, May 25, 1997 1996 ---- ---- Basic earnings per share $.32 $.09 Diluted earnings per share $.30 $.08
B/E 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 May 31, 1997, as compared to the Company's results of operations for the three months ended May 25, 1996. The discussion and analysis then addresses the liquidity and financial condition of the Company. THREE MONTHS ENDED MAY 27, 1997, AS COMPARED TO THE RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MAY 25, 1996. Net sales for the fiscal 1998 three-month period were $113,846, up 17 percent versus fiscal 1997 first quarter sales of $97,302, reflecting a 25-percent increase in product sales offset by a $5 million decline in service revenues. At May 31, 1997 the Company's backlog stood at approximately $580,000 up from approximately $475,000 at May 25, 1996. Gross profit was $41,063 (36.1% of sales) for the three months ended May 31, 1997 and was $8,516 or 26% greater than the comparable period in the prior year of $32,547 which represented 33.4% of sales. The increase in gross profit is the result of the higher sales volume and the mix of products and services sold. Selling, general and administrative expenses were $12,903 (11.3% of sales) for the three months ended May 31, 1997. This was $1,318 or 11.3% higher than the comparable period in the prior year of $11,585 (11.9% of sales) and is primarily due to higher levels of sales and quotation activity, and major new initiatives in customer service, program management, product support and information technology. Research, development and engineering expense was $11,008 or 9.7% of sales for the three months ended May 31, 1997. For the comparable period in the prior year, research, development and engineering expense was $9,727 or 10.0% of sales. Amortization expense for the quarter ended May 31, 1997 of $2,853 was $145 greater than the amount recorded in the first quarter of fiscal 1997. The increase in gross profit, offset by somewhat higher operating expenses, resulted in operating earnings of $14,299 (12.6% of sales), an increase of $5,772 or 67.7% over the comparable period in the prior year of $8,527 (8.8% of sales). Interest expense, net was $6,130 for the three months ended May 31, 1997, or $805 lower than interest expense of $6,935 recorded for the comparable period in the prior year, and is due to the decrease in the Company's long-term debt as compared to FY 97. B/E AEROSPACE, INC. THREE MONTHS ENDED MAY 31, 1997 AS COMPARED TO THE RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MAY 25, 1996. (CONTINUED) Earnings before income taxes of $8,169 for the quarter ended May 31, 1997 was $6,577 or 413% greater than the earnings before taxes in the prior year. Income tax expense for the quarter ended May 31, 1997 was $1,226 or 15% of earnings before income taxes, as compared to $159, or 10% of earnings before income taxes in the prior year. Net earnings were $6,943 or $.30 per share for the three months ended May 31, 1997, as compared to net earnings of $1,433 or $.08 per share for the comparable period in the prior year. LIQUIDITY AND CAPITAL RESOURCES The Company's liquidity requirements consist primarily of working capital needs and scheduled payments of interest on its indebtedness. B/E's primary requirements for working capital have been directly related to increased inventory levels as a result of growth in revenues. B/E's working capital was $131,000 as of May 31, 1997, compared to $122,174 as of February 22, 1997. In May 1997, the Company amended its existing credit facilities with The Chase Manhattan Bank by increasing the aggregate principal amount that may be borrowed thereunder to $125,000 (the "Bank Credit Facility"). The Bank Credit Facility consists of a $25,000 Reducing Revolver and a $100,000 Revolving Facility. The amount of the Reducing Revolver will be reduced automatically by 12.5% on August 26, 2000 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 a wholly owned subsidiary and has a five-year maturity. 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 May 31, 1997 indebtedness under the Bank Credit Facility were letters of credit amounting to approximately $5,100. The Company had approximately $119,900 available for subsequent borrowings under its bank credit facility. The Company's 9 3/4% Senior Notes and 9 7/8% Senior Subordinated Notes are due March 1, 2003 and February 1, 2006, respectively. At May 31, 1997, the Company's cash and cash equivalents were $44,223 as compared to $44,149 at February 22, 1997. Cash provided from operating activities during the three months ended May 31, 1997 was $5,294 and cash used in operating activities in the first quarter of fiscal 1997 was $7,812. The primary source of cash during the three months ended May 31, 1997 was net earnings of $6,943, non-cash charges for depreciation and amortization of $6,381 and decreases in receivables of $6,516 offset by a use of cash of $5,023 related to increases in inventories and $9,695 related to decreases in other assets and liabilities. The Company's capital expenditures were $6,159 and $1,218 during the three months ended May 31, 1997 and May 25, 1996, respectively. The Company anticipates ongoing capital expenditures of approximately $20 million per year for the next several years. B/E AEROSPACE, INC. The Company believes that cash flow from operations and availability under the Bank Credit Facility will 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 on 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 in such statements. 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-3 dated December 12, 1996, Exhibit 99 to the Company's Form 10-K for the year ended February 22, 1997, 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. B/E 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 b. Form 8-K reports None B/E 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. B/E AEROSPACE, INC. Date: June 30, 1997 By: /s/ Robert J. Khoury ------------------------- Robert J. Khoury Vice Chairman and Chief Executive Officer Date: June 30, 1997 By: /s/ Thomas P. McCaffrey ---------------------------- Thomas P. McCaffrey Corporate Senior Vice President of Administration & Chief Financial Officer EX-27 2 ARTICLE 5 FDS FOR 1ST QUARTER
5 3-MOS FEB-28-1998 MAY-31-1997 44,223 0 70,951 (3,877) 98,171 5,001 129,561 (39,315) 491,793 83,469 225,641 0 0 220 (56,593) 491,793 113,846 113,846 72,783 99,547 0 0 6,130 8,169 1,226 6,943 0 0 0 6,943 .30 .30
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