Hexcel Corporation (NYSE:HXL) today reported third quarter results with diluted EPS of $0.72 on net sales of $500.5 million.
Chairman, CEO and President Nick Stanage commented, “This was another strong quarter for Hexcel, with solid execution leading to excellent results. For the quarter, our adjusted diluted EPS of $0.65 was 18% above last year’s $0.55, on a constant currency sales increase of nearly 12%. We delivered a solid gross margin of 28.2% and operating income margin of 18.0% in the first nine months of 2016, and we are particularly pleased with our working capital performance and the resulting impact on our free cash flow. Our free cash flow for the first nine months of 2016 of $55 million is a $140 million improvement over last year.”
Commercial Aerospace sales, which account for 72% of total sales, drove the quarter’s results. Sales, led by the A350 XWB, were 15.1% higher in constant currency than the third quarter of 2015. Space & Defense sales were 5.4% higher in constant currency than last year. Industrial sales were 3.2% higher in constant currency than last year.
Looking ahead, Mr. Stanage said, “We expect 2016 to be another record year. We have increased our guidance for adjusted diluted EPS to a range of $2.52 to $2.58 (previously was $2.48 to $2.56) on sales of $2.00 to $2.03 billion (previously was $1.99 to $2.05 billion), as we do not expect our fourth quarter to be quite as strong as the third quarter. Our focus remains on superior execution to prepare for the substantial production ramp up of new programs, led by Commercial Aerospace. We continue to be well aligned with our customers’ needs and are fully prepared to meet the increasing demands for innovative composite products and solutions to support their growth.”
Markets
Commercial Aerospace
Space & Defense
Industrial
Operations
Cash and other
2016 Outlook
*****
Hexcel will host a conference call at 10:00 a.m. ET, tomorrow, October 20, 2016 to discuss the third quarter results and respond to analyst questions. The telephone number for the conference call is (719) 785-1752 and the confirmation code is 2707579. The call will be simultaneously hosted on Hexcel’s web site at http://phx.corporate-ir.net/phoenix.zhtml?c=75598&p=irol-investors. Replays of the call will be available on the web site for approximately three days.
*****
Hexcel Corporation is a leading advanced composites company. It develops, manufactures and markets lightweight, high-performance structural materials, including carbon fibers, reinforcements, prepregs, honeycomb, matrix systems, adhesives and composite structures, used in commercial aerospace, space and defense and industrial applications such as wind turbine blades.
*****
Disclaimer on Forward Looking Statements
This press release contains statements that are forward looking, including statements relating to anticipated trends in constant currency for the markets we serve (including changes in commercial aerospace revenues, the estimates and expectations based on aircraft production rates provided or publicly available by Airbus, Boeing and others, the revenues we may generate from an aircraft model or program, the impact of delays in the startup or ramp-ups of new aircraft programs, the outlook for space & defense revenues and the trend in wind energy and other industrial applications, including whether certain programs might be curtailed or discontinued or customers’ inventory levels reduced); our ability to maintain and improve margins in light of the current economic environment; the success of particular applications as well as the general overall economy; our ability to manage cash from operating activities and capital spending in relation to future sales levels such that the Company funds its capital spending plans from cash flows from operating activities, but, if necessary, maintains adequate borrowings under its credit facilities to cover any shortfalls; and the impact of the above factors on our expectations of all financial results for 2016 and beyond. The loss of, or significant reduction in purchases by Airbus, Boeing, Vestas, or any of our other significant customers could materially impair our business, operating results, prospects and financial condition. 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 changes in currency exchange rates, changing market conditions, increased competition, inability to install, staff and qualify necessary capacity or achievement of planned manufacturing improvements, conditions in the financial markets, product mix, achieving expected pricing and manufacturing costs, availability and cost of raw materials, supply chain disruptions, work stoppages or other labor disruptions, uncertainty regarding the likely exit of the U.K. from the European Union, unforeseen vulnerability of our network and systems to interruptions or failures and changes in or unexpected issues related to environmental regulations, legal matters, interest rates and tax codes. Additional risk factors are described in our filings with the SEC. We do not undertake an obligation to update our forward-looking statements to reflect future events.
See Table C for reconciliation of GAAP and non-GAAP operating income, net income and earnings per share
| ||||||||||||||||||||||
| Quarter Ended September 30, | | Nine Months Ended September 30, | | ||||||||||||||||||
(In millions, except per share data, Unaudited) | | 2016 | 2015 | % Change | 2016 | 2015 | % Change | |||||||||||||||
| ||||||||||||||||||||||
Net Sales | $ | 500.5 | $ | 448.8 | 11.5 | % | $ | 1,520.8 | $ | 1,396.3 | 8.9 | % | ||||||||||
Net sales change in constant currency | | | 11.9 | % | | | | 9.0 | % | |||||||||||||
Operating Income | | 89.1 | 78.0 | 14.2 | % | | 273.1 | 251.2 | 8.7 | % | ||||||||||||
Net Income | | 68.2 | 53.5 | 27.5 | % | | 190.3 | 183.3 | 3.8 | % | ||||||||||||
Diluted net income per common share | $ | 0.72 | $ | 0.55 | 30.9 | % | $ | 2.01 | $ | 1.88 | 6.9 | % | ||||||||||
| | | | |||||||||||||||||||
Non-GAAP Measures for y-o-y comparisons: | | | | | ||||||||||||||||||
Adjusted Operating Income (Table C) | $ | 89.1 | $ | 78.0 | 14.2 | % | $ | 273.1 | $ | 251.2 | 8.7 | % | ||||||||||
As a % of sales | | 17.8 | % | | 17.4 | % | | | 18.0 | % | | 18.0 | % | |||||||||
Adjusted Net Income (Table C) | | 61.6 | 53.5 | 15.1 | % | | 184.0 | 171.7 | 7.2 | % | ||||||||||||
Adjusted diluted net income per share | $ | 0.65 | $ | 0.55 | 18.2 | % | $ | 1.94 | $ | 1.76 | 10.2 | % |
Hexcel Corporation and Subsidiaries | | | | | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Condensed Consolidated Statements of Operations | |||||||||||||||||||||||
Unaudited | |||||||||||||||||||||||
Quarter Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
(In millions, except per share data) | | 2016 | 2015 | | 2016 | 2015 | |||||||||||||||||
Net sales | $ | 500.5 | $ | 448.8 | $ | 1,520.8 | $ | 1,396.3 | |||||||||||||||
Cost of sales | | 364.8 | 324.7 | | 1,091.8 | 991.3 | |||||||||||||||||
| | | | ||||||||||||||||||||
Gross margin | | 135.7 | 124.1 | | 429.0 | 405.0 | |||||||||||||||||
% Gross margin | | 27.1 | % | | 27.7 | % | | 28.2 | % | | 29.0 | % | |||||||||||
| | | | ||||||||||||||||||||
Selling, general and administrative expenses | | 35.1 | 35.5 | | 121.1 | 120.3 | |||||||||||||||||
Research and technology expenses | | 11.5 | 10.6 | | 34.8 | 33.5 | |||||||||||||||||
| | | | ||||||||||||||||||||
Operating income | | 89.1 | 78.0 | | 273.1 | 251.2 | |||||||||||||||||
| | | | ||||||||||||||||||||
Interest expense, net | | 5.5 | 4.6 | | 16.8 | 9.0 | |||||||||||||||||
Non-operating expense (a) | | — | — | | 0.4 | — | |||||||||||||||||
| | | | ||||||||||||||||||||
Income before income taxes and equity in earnings from affiliated companies | | 83.6 | 73.4 | | 255.9 | 242.2 | |||||||||||||||||
Provision for income taxes | | 16.1 | 20.7 | | 67.5 | 60.6 | |||||||||||||||||
| | | | ||||||||||||||||||||
Income before equity in earnings from affiliated companies | | 67.5 | 52.7 | | 188.4 | 181.6 | |||||||||||||||||
Equity in earnings from affiliated companies | | 0.7 | 0.8 | | 1.9 | 1.7 | |||||||||||||||||
| | | | ||||||||||||||||||||
Net income | $ | 68.2 | $ | 53.5 | $ | 190.3 | $ | 183.3 | |||||||||||||||
| | | | ||||||||||||||||||||
| | | | ||||||||||||||||||||
| | | | ||||||||||||||||||||
Basic net income per common share: | $ | 0.74 | $ | 0.56 | $ | 2.04 | $ | 1.91 | |||||||||||||||
| | | | ||||||||||||||||||||
Diluted net income per common share: | $ | 0.72 | $ | 0.55 | $ | 2.01 | $ | 1.88 | |||||||||||||||
| | | | ||||||||||||||||||||
| | | | ||||||||||||||||||||
Weighted-average common shares: | | | | | |||||||||||||||||||
| | | | ||||||||||||||||||||
Basic | | 92.7 | 95.8 | | 93.1 | 96.2 | |||||||||||||||||
Diluted | | 94.1 | 97.3 | | 94.6 | 97.7 |
(a) Non-operating expense is the accelerated amortization of deferred financing costs related to refinancing our credit facility in June 2016.
Hexcel Corporation and Subsidiaries Condensed Consolidated Balance Sheets | | | | | | |||||
| Unaudited | |||||||||
(In millions) | | | September 30, 2016 | December 31, 2015 | ||||||
Assets | | | | |||||||
Current assets: | | | | |||||||
Cash and cash equivalents | | | $ | 45.7 | $ | 51.8 | ||||
Accounts receivable, net | | | 254.4 | 234.0 | ||||||
Inventories | | | 315.1 | 307.2 | ||||||
Prepaid expenses and other current assets | | | 25.9 | 40.8 | ||||||
Total current assets | | | 641.1 | 633.8 | ||||||
| | | ||||||||
Property, plant and equipment | | | 2,341.2 | 2,099.4 | ||||||
Less accumulated depreciation | | | (751.5 | ) | (673.8 | ) | ||||
Property, plant and equipment, net | | | 1,589.7 | 1,425.6 | ||||||
| | | ||||||||
Goodwill and other intangible assets, net | | | 73.9 | 58.9 | ||||||
Investments in affiliated companies | | | 48.3 | 30.4 | ||||||
Other assets | | | 37.6 | 38.7 | ||||||
Total assets | | | $ | 2,390.6 | $ | 2,187.4 | ||||
| | | ||||||||
Liabilities and Stockholders' Equity | | | ||||||||
Current liabilities: | | | ||||||||
Current portion of debt | | | $ | 4.7 | $ | — | ||||
Accounts payable | | | 149.3 | 148.9 | ||||||
Accrued liabilities | | | 122.6 | 143.7 | ||||||
Total current liabilities | | | 276.6 | 292.6 | ||||||
| | | ||||||||
Long-term debt | | | 670.2 | 576.5 | ||||||
Other non-current liabilities | | | 184.4 | 138.7 | ||||||
Total liabilities | | | 1,131.2 | 1,007.8 | ||||||
| | | ||||||||
Stockholders' equity: | | | | |||||||
Common stock, $0.01 par value, 200.0 shares authorized, 106.6 shares issued at September 30, 2016 and 106.0 shares issued at December 31, 2015 | | 1.1 | 1.1 | |||||||
Additional paid-in capital | | | 735.0 | 715.8 | ||||||
Retained earnings | | | 1,205.2 | 1,044.4 | ||||||
Accumulated other comprehensive income | | | (132.8 | ) | (123.9 | ) | ||||
| | 1,808.5 | 1,637.4 | |||||||
Less – Treasury stock, at cost, 14.7 and 12.5 shares at September 30, 2016 and December 31, 2015, respectively. | | | (549.1 | ) | (457.8 | ) | ||||
Total stockholders' equity | | | 1,259.4 | 1,179.6 | ||||||
Total liabilities and stockholders' equity | | | $ | 2,390.6 | $ | 2,187.4 |
Hexcel Corporation and Subsidiaries | ||||||||
---|---|---|---|---|---|---|---|---|
Condensed Consolidated Statements of Cash Flows | ||||||||
Unaudited | ||||||||
| Year to Date Ended September 30, | |||||||
(In millions) | 2016 | 2015 | ||||||
| | |||||||
Cash flows from operating activities | | |||||||
Net income | $ | 190.3 | $ | 183.3 | ||||
| ||||||||
Reconciliation to net cash provided by operating activities: | | |||||||
Depreciation and amortization | 69.0 | 56.5 | ||||||
Amortization of deferred financing costs | 1.4 | 0.8 | ||||||
Deferred income taxes | 50.5 | 39.3 | ||||||
Equity in earnings from affiliated companies | (1.9 | ) | (1.7 | ) | ||||
Stock-based compensation expense | 13.6 | 15.2 | ||||||
Excess tax benefits on stock-based compensation | — | (9.2 | ) | |||||
| ||||||||
Changes in assets and liabilities: | | |||||||
Increase in accounts receivable | (16.8 | ) | (38.9 | ) | ||||
Increase in inventories | (5.0 | ) | (46.2 | ) | ||||
Increase in prepaid expenses and other current assets | (7.3 | ) | (6.0 | ) | ||||
Decrease in accounts payable/accrued liabilities | (9.1 | ) | (26.0 | ) | ||||
Other – net | 2.1 | (2.8 | ) | |||||
Net cash provided by operating activities (a) | 286.8 | 164.3 | ||||||
| | |||||||
Cash flows from investing activities | | |||||||
Capital expenditures (b) | (231.8 | ) | (249.3 | ) | ||||
Acquisition of business and investments and advances to affiliates | (33.6 | ) | — | |||||
Net cash used in investing activities | (265.4 | ) | (249.3 | ) | ||||
| | |||||||
Cash flows from financing activities | | |||||||
Borrowings from senior unsecured credit facility | 63.0 | — | ||||||
Borrowings from Euro term loan | 27.4 | — | ||||||
Issuance of senior notes | — | 300.0 | ||||||
Repayment of senior unsecured credit facility | — | (115.0 | ) | |||||
Repayments of other debt, net | (0.4 | ) | (1.2 | ) | ||||
Issuance costs related to credit facilities | (1.7 | ) | — | |||||
Deferred financing costs and discount related to long-term debt | — | (3.6 | ) | |||||
Dividends paid on common stock | (29.7 | ) | (28.9 | ) | ||||
Stock repurchases | (84.9 | ) | (100.0 | ) | ||||
Activity under stock plans | (1.0 | ) | 13.2 | |||||
Net cash (used for) provided by financing activities | (27.3 | ) | 64.5 | |||||
| ||||||||
Effect of exchange rate changes on cash and cash equivalents | (0.2 | ) | (7.2 | ) | ||||
Net (decrease) in cash and cash equivalents | (6.1 | ) | (27.7 | ) | ||||
Cash and cash equivalents at beginning of period | 51.8 | 70.9 | ||||||
Cash and cash equivalents at end of period | $ | 45.7 | $ | 43.2 | ||||
| | |||||||
Supplemental Data: | | | ||||||
Free cash flow (a)+(b) | $ | 55.0 | $ | (85.0 | ) | |||
Accrual basis additions to property, plant and equipment | $ | 232.6 | $ | 227.8 | ||||
Hexcel Corporation and Subsidiaries | | | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Net Sales to Third-Party Customers by Market | | | |||||||||||
Quarters Ended September 30, 2016 and 2015 | (Unaudited) | Table A | |||||||||||
(In millions) | As Reported | Constant Currency (a) | |||||||||||
Market | | 2016 | 2015 | B/(W) % | FX Effect (b) | | 2015 | B/(W) % | |||||
Commercial Aerospace | $ | 360.6 | $ | 314.5 | 14.7 | $ | (1.3 | ) | $ | 313.2 | 15.1 | ||
Space & Defense | | 81.5 | 77.3 | 5.4 | — | | 77.3 | 5.4 | |||||
Industrial | | 58.4 | 57.0 | 2.5 | (0.4 | ) | | 56.6 | 3.2 | ||||
Consolidated Total | $ | 500.5 | $ | 448.8 | 11.5 | $ | (1.7 | ) | $ | 447.1 | 11.9 | ||
Consolidated % of Net Sales | | % | % | | | % | | ||||||
Commercial Aerospace | | 72.0 | 70.1 | | 70.0 | | |||||||
Space & Defense | | 16.3 | 17.2 | | 17.3 | | |||||||
Industrial | | 11.7 | 12.7 | | 12.7 | | |||||||
Consolidated Total | | 100.0 | 100.0 | | | 100.0 | |
Nine Months Ended September 30, 2016 and 2015 | (Unaudited) | | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(In millions) | As Reported | Constant Currency (a) | |||||||||||||||
Market | | 2016 | 2015 | B/(W) % | FX Effect (b) | | 2015 | B/(W) % | |||||||||
Commercial Aerospace | $ | 1,079.4 | $ | 959.5 | 12.5 | $ | (0.7 | ) | $ | 958.8 | 12.6 | ||||||
Space & Defense | | 242.6 | 254.2 | (4.6 | ) | 0.4 | | 254.6 | (4.7 | ) | |||||||
Industrial | | 198.8 | 182.6 | 8.9 | (1.2 | ) | | 181.4 | 9.6 | ||||||||
Consolidated Total | $ | 1,520.8 | $ | 1,396.3 | 8.9 | $ | (1.5 | ) | $ | 1,394.8 | 9.0 | ||||||
Consolidated % of Net Sales | | % | % | | | % | | ||||||||||
Commercial Aerospace | | 71.0 | 68.7 | | 68.7 | | |||||||||||
Space & Defense | | 16.0 | 18.2 | | 18.3 | | |||||||||||
Industrial | | 13.0 | 13.1 | | 13.0 | | |||||||||||
Consolidated Total | | 100.0 | 100.0 | | | 100.0 | |
(a) To assist in the analysis of our net sales trend, we present constant currency sales, which is a non-GAAP measure. Constant currency sales for the quarter and nine months ended June 30, 2015 have been estimated using the same U.S. dollar, British pound and Euro exchange rates as applied for the respective period in 2016 and are referred to as “constant currency” sales.
(b) FX effect is the estimated impact on “as reported” net sales due to changes in foreign currency exchange rates.
Hexcel Corporation and Subsidiaries | | | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Segment Information | (Unaudited) | Table B | ||||||||||||||
(In millions) | | Composite Materials | | Engineered Products | | Corporate & Other (a) | | Total | ||||||||
Third Quarter 2016 | | | | | | | | | ||||||||
Net sales to external customers | $ | 398.2 | $ | 102.3 | $ | — | $ | 500.5 | ||||||||
Intersegment sales | | 16.2 | | — | | (16.2 | ) | | — | |||||||
Total sales | | 414.4 | | 102.3 | | (16.2 | ) | | 500.5 | |||||||
Operating income (loss) | | 88.8 | | 12.9 | | (12.6 | ) | | 89.1 | |||||||
% Operating margin | | 21.4 | % | | 12.6 | % | | | | 17.8 | % | |||||
| | | | | | | | |||||||||
Depreciation and amortization | | 21.7 | | 1.8 | | — | | 23.5 | ||||||||
Stock-based compensation expense | | 0.7 | | 0.1 | | — | | 0.8 | ||||||||
Accrual based additions to capital expenditures | | 84.4 | | 5.9 | | 0.1 | | 90.4 | ||||||||
| | | | | | |||||||||||
Third Quarter 2015 | | | | | | | ||||||||||
Net sales to external customers | $ | 374.4 | $ | 101.4 | $ | — | $ | 448.8 | ||||||||
Intersegment sales | 15.9 | — | (15.9 | ) | — | |||||||||||
Total sales | 363.3 | 101.4 | (15.9 | ) | 448.8 | |||||||||||
Operating income (loss) | 74.1 | 14.2 | (10.3 | ) | 78.0 | |||||||||||
% Operating margin | 20.4 | % | 14.0 | % | 17.4 | % | ||||||||||
| | |||||||||||||||
Depreciation and amortization | 17.7 | 1.5 | 0.1 | 19.3 | ||||||||||||
Stock-based compensation expense | 0.7 | 0.1 | — | 0.8 | ||||||||||||
Accrual based additions to capital expenditures | 83.1 | 3.2 | — | 86.3 | ||||||||||||
First Nine Months 2016 | | | | | | | | | ||||||||
Net sales to external customers | $ | 1,219.3 | $ | 301.5 | $ | — | $ | 1,520.8 | ||||||||
Intersegment sales | | 53.2 | | — | | (53.2 | ) | | — | |||||||
Total sales | | 1,272.5 | | 301.5 | | (53.2 | ) | | 1,520.8 | |||||||
Operating income (loss) | | 281.2 | | 36.8 | | (44.9 | ) | | 273.1 | |||||||
% Operating margin | | 22.1 | % | | 12.2 | % | | | | 18.0 | % | |||||
| | | | | | | | |||||||||
Depreciation and amortization | | 63.5 | | 5.4 | | 0.1 | | 69.0 | ||||||||
Stock-based compensation expense | | 4.9 | | 0.9 | | 7.8 | | 13.6 | ||||||||
Accrual based additions to capital expenditures | | 221.6 | | 10.9 | | 0.1 | | 232.6 | ||||||||
| | | | | | |||||||||||
First Nine Months 2015 | | | | | | | ||||||||||
Net sales to external customers | $ | 1,088.3 | $ | 308.0 | $ | — | $ | 1,396.3 | ||||||||
Intersegment sales | 56.2 | 0.1 | (56.3 | ) | — | |||||||||||
Total sales | 1,144.5 | 308.1 | (56.3 | ) | 1,396.3 | |||||||||||
Operating income (loss) | 254.5 | 43.3 | (46.6 | ) | 251.2 | |||||||||||
% Operating margin | 22.2 | % | 14.1 | % | 18.0 | % | ||||||||||
| | | | |||||||||||||
Depreciation and amortization | 51.7 | 4.5 | 0.3 | 56.5 | ||||||||||||
Stock-based compensation expense | 5.4 | 0.8 | 9.0 | 15.2 | ||||||||||||
Accrual based additions to capital expenditures | 216.8 | 11.0 | — | 227.8 |
(a) We do not allocate corporate expenses to the operating segments.
Hexcel Corporation and Subsidiaries | | | | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Reconciliation of GAAP and Non-GAAP Operating Income and Net Income | Table C | ||||||||||||||
| Unaudited | ||||||||||||||
| Quarter Ended September 30, | Nine Months Ended September 30, | |||||||||||||
(In millions) | | 2016 | | 2015 | 2016 | | 2015 | ||||||||
| |||||||||||||||
GAAP operating income | $ | 89.1 | $ | 78.0 | $ | 273.1 | $ | 251.2 | |||||||
- Stock-based compensation expense | | 0.8 | 0.8 | | 13.6 | 15.2 | |||||||||
- Depreciation and amortization | 23.5 | 19.3 | 69.0 | 56.5 | |||||||||||
Non-GAAP EBITDA | $ | 113.4 | $ | 98.1 | $ | 355.7 | $ | 322.9 |
Unaudited | ||||||||||||||
Quarter Ended September 30, | ||||||||||||||
2016 | 2015 | |||||||||||||
(In millions, except per diluted share data) | As Reported | EPS | As Reported | EPS | ||||||||||
| ||||||||||||||
GAAP net income | $ | 68.2 | $ | 0.72 | $ | 53.5 | $ | 0.55 | ||||||
- Discrete Tax Benefits (a) | (6.6 | ) | (0.07 | ) | — | — | ||||||||
Adjusted net income | $ | 61.6 | $ | 0.65 | $ | 53.5 | $ | 0.55 | ||||||
Unaudited | ||||||||||||||
Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | |||||||||||||
(In millions, except per diluted share data) | As Reported | EPS | As Reported | EPS | ||||||||||
| ||||||||||||||
GAAP net income | $ | 190.3 | $ | 2.01 | $ | 183.3 | $ | 1.88 | ||||||
- Non-operating expense (net of tax) (b) | 0.3 | — | — | — | ||||||||||
- Discrete Tax Benefits (a) | | (6.6 | ) | (0.07 | ) | (11.6 | ) | (0.12 | ) | |||||
Adjusted net income | $ | 184.0 | $ | 1.94 | $ | 171.7 | $ | 1.76 |
(a) The 2016 three and nine-month periods and the 2015 nine-month period includes benefits of $6.6 million and $11.6 million, respectively, primarily related to the release of reserves for uncertain tax positions.
(b) Non-operating expense is the accelerated amortization of deferred financing costs related to refinancing our credit facility in June 2016.
Management believes that EBITDA, adjusted net income, adjusted diluted net income per share and free cash flow (defined as cash provided by operating activities less cash payments for capital expenditures), which are non-GAAP measurements, are meaningful to investors because they provide a view of Hexcel with respect to ongoing 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. In addition, management believes that total debt, net of cash, which is also a non-GAAP measure, is an important measure of Hexcel’s liquidity. Such 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 | |||||||||||||||
September 30, | June 30, | December 31, | |||||||||||||
(In millions) | 2016 | 2016 | 2015 | ||||||||||||
Current portion of capital lease | $ | 0.8 | $ | 0.8 | $ | — | |||||||||
Euro term loan | | 3.9 | | — | | — | |||||||||
Total current debt | 4.7 | 0.8 | 0.0 | ||||||||||||
Non-current portion of capital lease | — | 0.2 | — | ||||||||||||
Long-term credit facility | 350.0 | 410.0 | 280.0 | ||||||||||||
Euro term loan | 23.5 | — | — | ||||||||||||
Unsecured bonds, net | 296.7 | 296.6 | 296.5 | ||||||||||||
Total long-term debt | 670.2 | 706.8 | 576.5 | ||||||||||||
Total debt | 674.9 | 707.6 | 576.5 | ||||||||||||
Less: Cash and cash equivalents | (45.7 | ) | (38.9 | ) | (51.8 | ) | |||||||||
Total debt, net of cash | $ | 629.2 | $ | 668.7 | $ | 524.7 |
Contact Information Michael Bacal (203) 352-6826 michael.bacal@hexcel.com
Retrieved from "http://globenewswire.com/news-release/2016/10/19/880905/0/en/Hexcel-Reports-Strong-2016-Third-Quarter-Results.html"