Spirit AeroSystems Reports Second Quarter 2021 Results
Spirit AeroSystems (NYSE: SPR) reported a significant rebound in Q2 2021, with revenues of $1.0 billion, up 55% year-over-year, driven by increased production on Boeing 737 and Airbus A320 programs. Operating loss improved to ($97.7 million), a 73% reduction compared to the previous year, while net loss decreased 47% to ($135 million). The company recognized a $46 million forward loss on the Boeing 787 program. Despite challenges, Spirit's backlog remains strong at approximately $34 billion. The cash balance stands at $1.3 billion.
- Revenue increased by 55% year-over-year to $1.0 billion.
- Operating loss reduced to ($97.7 million), a 73% improvement.
- Net loss decreased by 47% to ($135 million).
- Strong backlog of approximately $34 billion at the end of Q2 2021.
- Cash balance improved to $1.3 billion.
- Recognized a $46 million loss on the Boeing 787 program.
- Continued operating and free cash flow losses reported.
Spirit AeroSystems Holdings, Inc. (NYSE: SPR) (“Spirit” or the “Company”) reported second quarter 2021 financial results.
| Table 1. Summary Financial Results (unaudited) | ||||||||||||
2nd Quarter |
Six Months |
|||||||||||
| ($ in millions, except per share data) | 2021 |
2020 |
Change |
2021 |
2020 |
Change |
||||||
| Revenues |
|
|
|
|
|
|
||||||
| Operating Loss |
( |
( |
|
( |
( |
|
||||||
| Operating Loss as a % of Revenues |
( |
( |
** |
( |
( |
** | ||||||
| Net Loss |
( |
( |
|
( |
( |
|
||||||
| Net Loss as a % of Revenues |
( |
( |
** |
( |
( |
820 BPS |
||||||
| Loss Per Share (Fully Diluted) |
( |
( |
|
( |
( |
|
||||||
| Adjusted Loss Per Share (Fully Diluted)* |
( |
( |
|
( |
( |
|
||||||
| Fully Diluted Weighted Avg Share Count | 104.2 |
103.9 |
104.2 |
103.8 |
||||||||
| ** Represents an amount equal to or in excess of |
||||||||||||
“With continued improvement in domestic air traffic, we are seeing strong recovery in narrowbody production rates as compared to a year ago, which is leading to improved cash flow performance,” said Tom Gentile, Spirit AeroSystems President and Chief Executive Officer.
“As a result of our ongoing engagement with Boeing on the 787 program, we identified an additional issue in the forward section of the fuselage. We continue to coordinate with Boeing to ensure that we are performing all necessary rework. Primarily driven by this issue, we have recognized a
Revenue
Spirit’s second quarter of 2021 revenue was
Spirit’s backlog at the end of the second quarter of 2021 was approximately
Earnings
Operating loss for the second quarter of 2021 was
Other income for the second quarter 2021 was
Second quarter EPS was
Cash
Cash used in operations in the second quarter of 2021 was
| Table 2. Cash Flow and Liquidity (unaudited) | ||||||||||||
| 2nd Quarter | Six Months | |||||||||||
| ($ in millions) | 2021 |
2020 |
Change |
2021 |
2020 |
Change | ||||||
| Cash used in Operations |
( |
( |
( |
( |
( |
( |
||||||
| Purchases of Property, Plant & Equipment |
( |
( |
|
( |
( |
|
||||||
| Free Cash Flow* |
( |
( |
( |
( |
( |
( |
||||||
July 1, |
December 31, |
|||||||||||
| Liquidity | 2021 |
2020 |
||||||||||
| Cash |
|
|
||||||||||
| Total Debt |
|
|
||||||||||
Financial Outlook and Risk to Future Financial Results – Unchanged August 4, 2021
Full-year 2021 cash used in operations is expected to be between
Please refer to our Cautionary Statement Regarding Forward-Looking Statements below and the section captioned “Risk Factors” in the Company’s Annual Report on Form 10-K and the Company’s Quarterly Reports on Form 10-Q.
Subsequent Event
Based on the preliminary assessment of the latest 787 program demand received from Boeing on August 2, 2021, the Company expects to incur an incremental forward loss of approximately
Segment Results
Fuselage Systems
Fuselage Systems segment revenue in the second quarter of 2021 increased 51 percent from the same period last year to
Propulsion Systems
Propulsion Systems segment revenue in the second quarter of 2021 increased 43 percent from the same period last year to
Wing Systems
Wing Systems segment revenue in the second quarter of 2021 increased significantly from
| Table 4. Segment Reporting (unaudited) | ||||||||||||||||||
| 2nd Quarter | Six Months | |||||||||||||||||
| ($ in millions) | 2021 |
|
|
2020 |
|
|
Change |
|
2021 |
|
|
2020 |
|
|
Change |
|||
| Segment Revenues | ||||||||||||||||||
| Fuselage Systems |
|
|
|
|
50.5 |
% |
|
|
|
|
5.8 |
% |
||||||
| Propulsion Systems | 241.9 |
|
169.6 |
|
42.6 |
% |
468.4 |
|
394.8 |
|
18.6 |
% |
||||||
| Wing Systems | 259.3 |
|
122.5 |
|
** | 482.9 |
|
413.9 |
|
16.7 |
% |
|||||||
| All Other | 8.7 |
|
25.4 |
|
(65.7 |
%) |
22.3 |
|
34.6 |
|
(35.5 |
%) |
||||||
| Total Segment Revenues |
|
|
|
|
55.5 |
% |
|
|
|
|
10.5 |
% |
||||||
| Segment (Loss) Earnings from Operations | ||||||||||||||||||
| Fuselage Systems |
( |
) |
( |
) |
87.4 |
% |
( |
) |
( |
) |
72.9 |
% |
||||||
| Propulsion Systems | 28.2 |
|
(17.3 |
) |
** | 44.9 |
|
(22.6 |
) |
** | ||||||||
| Wing Systems | (16.2 |
) |
(42.5 |
) |
61.9 |
% |
(35.1 |
) |
(28.9 |
) |
(21.5 |
%) |
||||||
| All Other | 1.5 |
|
8.0 |
|
(81.3 |
%) |
2.7 |
|
9.8 |
|
(72.4 |
%) |
||||||
| Total Segment Operating (Loss) Earnings |
( |
) |
( |
) |
** |
( |
) |
( |
) |
** | ||||||||
| Unallocated Expense | ||||||||||||||||||
| SG&A |
( |
) |
( |
) |
(36.5 |
%) |
( |
) |
( |
) |
1.5 |
% |
||||||
| Research & Development | (13.3 |
) |
(8.3 |
) |
(60.2 |
%) |
(21.5 |
) |
(20.6 |
) |
(4.4 |
%) |
||||||
| Cost of Sales | 0.8 |
|
(6.4 |
) |
** | 1.5 |
|
(7.9 |
) |
** | ||||||||
| Total (Loss) Earnings from Operations |
( |
) |
( |
) |
73.4 |
% |
( |
) |
( |
) |
58.2 |
% |
||||||
| Segment Operating (Loss) Earnings as % of Revenues | ||||||||||||||||||
| Fuselage Systems | (6.5 |
%) |
(76.9 |
%) |
** | (9.9 |
%) |
(38.5 |
%) |
** | ||||||||
| Propulsion Systems | 11.7 |
% |
(10.2 |
%) |
** | 9.6 |
% |
(5.7 |
%) |
** | ||||||||
| Wing Systems | (6.2 |
%) |
(34.7 |
%) |
** | (7.3 |
%) |
(7.0 |
%) |
(30) BPS | ||||||||
| All Other | ** | ** | ** | ** | ** | ** | ||||||||||||
| Total Segment Operating (Loss) Earnings as % of Revenues | (1.8 |
%) |
(47.1 |
%) |
** | (4.2 |
%) |
(22.0 |
%) |
** | ||||||||
| Total Operating (Loss) Earnings as % of Revenues | (9.7 |
%) |
(56.9 |
%) |
** | (11.8 |
%) |
(31.0 |
%) |
** | ||||||||
| ** Represents an amount equal to or in excess of |
||||||||||||||||||
Cautionary Statement Regarding Forward-Looking Statements
This press release contains “forward-looking statements” that may involve many risks and uncertainties. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “aim,” “anticipate,” “believe,” “could,” “continue,” “estimate,” “expect,” “goal,” “forecast,” “intend,” “may,” “might,” “model,” “objective,” “outlook,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would,” and other similar words, or phrases, or the negative thereof, unless the context requires otherwise. These statements are based on circumstances as of the date on which the statements are made and they reflect management’s current views with respect to future events and are subject to risks and uncertainties, both known and unknown. Our actual results may vary materially from those anticipated in forward-looking statements. We caution investors not to place undue reliance on any forward-looking statements.
Important factors that could cause actual results to differ materially from those reflected in such forward-looking statements and that should be considered in evaluating our outlook include, but are not limited to, the following:
- the impact of the COVID-19 pandemic on our business and operations, including on the demand for our and our customers’ products and services, on trade and transport restrictions, on the global aerospace supply chain, on our ability to retain the skilled work force necessary for production and development, and generally on our ability to effectively manage the impacts of the COVID-19 pandemic on our business operations;
- demand for our products and services and the general effect of economic or geopolitical conditions, or other events, such as pandemics, in the industries and markets in which we operate in the U.S. and globally;
- the timing and conditions surrounding the full worldwide return to service (including receiving the remaining regulatory approvals) of the B737 MAX, future demand for the aircraft, and any residual impacts of the B737 MAX grounding on production rates for the aircraft;
- our reliance on Boeing and Airbus for a significant portion of our revenues;
- the business condition and liquidity of our customers and their ability to satisfy their contractual obligations to the Company;
- the certainty of our backlog, including the ability of customers to cancel or delay orders prior to shipment;
- our ability to accurately estimate and manage performance, cost, margins, and revenue under our contracts, and the potential for additional forward losses on new and maturing programs;
- our accounting estimates for revenue and costs for our contracts and potential changes to those estimates;
- our ability to continue to grow and diversify our business, execute our growth strategy, and secure replacement programs, including our ability to enter into profitable supply arrangements with additional customers;
- the outcome of non-conformance product warranty, defective product, or similar claims and the impact settlement of such claims may have on our accounting assumptions;
- our dependence on our suppliers, as well as the cost and availability of raw materials and purchased components;
- our ability and our suppliers’ ability to meet stringent delivery (including quality and timeliness) standards and accommodate changes in the build rates of aircraft;
- our ability to maintain continuing, uninterrupted production at our manufacturing facilities and our suppliers’ facilities;
- competitive conditions in the markets in which we operate, including in-sourcing by commercial aerospace original equipment manufacturers;
- our ability to successfully negotiate, or re-negotiate, future pricing under our supply agreements with Boeing, Airbus, and other customers;
- our ability to effectively integrate the acquisition of select assets of Bombardier along with other acquisitions that we pursue, and generate synergies and other cost savings therefrom, while avoiding unexpected costs, charges, expenses, and adverse changes to business relationships and business disruptions;
- the possibility that our cash flows may not be adequate for our additional capital needs;
- any reduction in our credit ratings;
- our ability to access the capital markets to fund our liquidity needs, and the costs and terms of any additional financing;
- our ability to avoid or recover from cyber or other security attacks and other operations disruptions;
- legislative or regulatory actions, both domestic and foreign, impacting our operations, including the effect of changes in tax laws and rates and our ability to accurately calculate and estimate the effect of such changes;
- our ability to recruit and retain a critical mass of highly skilled employees;
- our relationships with the unions representing many of our employees, including our ability to avoid labor disputes and work stoppages with respect to our union employees;
- spending by the U.S. and other governments on defense;
- pension plan assumptions and future contributions;
- the effectiveness of our internal control over financial reporting;
- the outcome or impact of ongoing or future litigation, arbitration, claims, and regulatory actions or investigations, including our exposure to potential product liability and warranty claims;
- adequacy of our insurance coverage;
- our ability to continue selling certain receivables through our supplier financing programs;
- and the risks of doing business internationally, including fluctuations in foreign currency exchange rates, impositions of tariffs or embargoes, trade restrictions, compliance with foreign laws, and domestic and foreign government policies.
These factors are not exhaustive and it is not possible for us to predict all factors that could cause actual results to differ materially from those reflected in our forward-looking statements. These factors speak only as of the date hereof, and new factors may emerge or changes to the foregoing factors may occur that could impact our business. As with any projection or forecast, these statements are inherently susceptible to uncertainty and changes in circumstances. Except to the extent required by law, we undertake no obligation to, and expressly disclaim any obligation to, publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. You should review carefully the section captioned “Risk Factors” in the Company’s Annual Report on Form 10-K and the Company’s Quarterly Reports on Form 10-Q for a more complete discussion of these and other factors that may affect our business.
| Spirit Shipset Deliveries | |||||||
| (one shipset equals one aircraft) | |||||||
| 2nd Quarter | Six Months | ||||||
2021 |
2020 |
2021 |
2020 |
||||
| B737 | 35 |
19 |
64 |
37 |
|||
| B747 | 2 |
1 |
3 |
3 |
|||
| B767 | 9 |
5 |
19 |
11 |
|||
| B777 | 6 |
7 |
11 |
16 |
|||
| B787 | 11 |
22 |
26 |
62 |
|||
| Total Boeing | 63 |
54 |
123 |
129 |
|||
| A220 | 15 |
8 |
27 |
23 |
|||
| A320 Family | 96 |
69 |
226 |
257 |
|||
| A330 | 4 |
5 |
9 |
13 |
|||
| A350 | 11 |
13 |
23 |
39 |
|||
| Total Airbus | 126 |
95 |
285 |
332 |
|||
| Business/Regional Jet (1) | 54 |
10 |
104 |
22 |
|||
| Total | 243 |
159 |
512 |
483 |
|||
| (1) Beginning in the fourth quarter of 2020, includes Business/Regional Jet deliveries related to the Bombardier acquisition | |||||||
| Spirit AeroSystems Holdings, Inc. | ||||||||||||
| Condensed Consolidated Statements of Operations | ||||||||||||
| (unaudited) | ||||||||||||
| For the Three Months Ended | For the Six Months Ended | |||||||||||
| July 1, 2021 | July 2, 2020 | July 1, 2021 | July 2, 2020 | |||||||||
| ($ in millions, except per share data) | ||||||||||||
| Revenue |
|
|
|
|
|
|
|
|
||||
| Operating costs and expenses: | ||||||||||||
| Cost of sales | 1,014.4 |
|
925.1 |
|
1,973.2 |
|
2,037.6 |
|
||||
| Selling, general and administrative | 66.9 |
|
49.0 |
|
124.5 |
|
126.4 |
|
||||
| Restructuring costs | 5.2 |
|
6.3 |
|
7.3 |
|
48.9 |
|
||||
| Research and development | 13.3 |
|
8.3 |
|
21.5 |
|
20.6 |
|
||||
| Loss on disposal of assets | - |
|
22.9 |
|
- |
|
22.9 |
|
||||
| Total operating costs and expenses | 1,099.8 |
|
1,011.6 |
|
2,126.5 |
|
2,256.4 |
|
||||
| Operating loss | (97.7 |
) |
(367.0 |
) |
(223.6 |
) |
(534.5 |
) |
||||
| Interest expense and financing fee amortization | (59.1 |
) |
(48.6 |
) |
(118.9 |
) |
(80.8 |
) |
||||
| Other income (expense), net | 31.1 |
|
(6.4 |
) |
43.9 |
|
(55.4 |
) |
||||
| Loss before income taxes and equity in net loss of affiliate | (125.7 |
) |
(422.0 |
) |
(298.6 |
) |
(670.7 |
) |
||||
| Income tax (provision) benefit | (9.0 |
) |
167.6 |
|
(7.3 |
) |
254.8 |
|
||||
| Loss before equity in net loss of affiliate | (134.7 |
) |
(254.4 |
) |
(305.9 |
) |
(415.9 |
) |
||||
| Equity in net loss of affiliate | (0.6 |
) |
(1.5 |
) |
(1.0 |
) |
(3.0 |
) |
||||
| Net loss |
( |
) |
( |
) |
( |
) |
( |
) |
||||
| Loss per share | ||||||||||||
| Basic |
( |
) |
( |
) |
( |
) |
( |
) |
||||
| Shares | 104.2 |
|
103.9 |
|
104.2 |
|
103.8 |
|
||||
| Diluted |
( |
) |
( |
) |
( |
) |
( |
) |
||||
| Shares | 104.2 |
|
103.9 |
|
104.2 |
|
103.8 |
|
||||
| Dividends declared per common share |
|
|
|
|
|
|
|
|
||||
| Spirit AeroSystems Holdings, Inc. | ||||||
| Condensed Consolidated Balance Sheets | ||||||
| (unaudited) | ||||||
| July 1, 2021 | December 31, 2020 | |||||
| ($ in millions) | ||||||
| Assets | ||||||
| Cash and cash equivalents |
|
|
|
|
||
| Restricted cash | 0.3 |
|
0.3 |
|
||
| Accounts receivable, net | 516.3 |
|
484.4 |
|
||
| Contract assets, short-term | 358.7 |
|
368.4 |
|
||
| Inventory, net | 1,305.4 |
|
1,422.3 |
|
||
| Other current assets | 341.9 |
|
336.3 |
|
||
| Total current assets | 3,791.9 |
|
4,485.0 |
|
||
| Property, plant and equipment, net | 2,445.8 |
|
2,503.8 |
|
||
| Intangible assets, net | 214.9 |
|
215.2 |
|
||
| Goodwill | 619.0 |
|
565.3 |
|
||
| Right of use assets | 84.5 |
|
70.6 |
|
||
| Contract assets, long-term | - |
|
4.4 |
|
||
| Pension assets | 477.2 |
|
455.9 |
|
||
| Deferred income taxes | 1.2 |
|
0.1 |
|
||
| Other assets | 106.6 |
|
83.6 |
|
||
| Total assets |
|
|
|
|
||
| Liabilities | ||||||
| Accounts payable |
|
|
|
|
||
| Accrued expenses | 333.6 |
|
365.6 |
|
||
| Profit sharing | 28.4 |
|
57.0 |
|
||
| Current portion of long-term debt | 47.9 |
|
340.7 |
|
||
| Operating lease liabilities, short-term | 7.7 |
|
5.5 |
|
||
| Advance payments, short-term | 85.0 |
|
18.9 |
|
||
| Contract liabilities, short-term | 87.1 |
|
97.6 |
|
||
| Forward loss provision, short-term | 231.4 |
|
184.6 |
|
||
| Deferred revenue and other deferred credits, short-term | 18.1 |
|
22.2 |
|
||
| Other current liabilities | 85.1 |
|
58.4 |
|
||
| Total current liabilities | 1,531.4 |
|
1,709.4 |
|
||
| Long-term debt | 3,552.7 |
|
3,532.9 |
|
||
| Operating lease liabilities, long-term | 78.8 |
|
66.6 |
|
||
| Advance payments, long-term | 255.1 |
|
327.4 |
|
||
| Pension/OPEB obligation | 415.2 |
|
440.2 |
|
||
| Contract liabilities, long-term | 300.3 |
|
372.0 |
|
||
| Forward loss provision, long-term | 507.4 |
|
561.4 |
|
||
| Deferred revenue and other deferred credits, long-term | 36.0 |
|
38.9 |
|
||
| Deferred grant income liability - non-current | 27.5 |
|
28.1 |
|
||
| Deferred income taxes | 26.9 |
|
13.0 |
|
||
| Other non-current liabilities | 449.5 |
|
437.0 |
|
||
| Stockholders' Equity | ||||||
| Common stock, Class A par value |
1.1 |
|
1.1 |
|
||
| Additional paid-in capital | 1,150.1 |
|
1,139.8 |
|
||
| Accumulated other comprehensive loss | (152.1 |
) |
(154.1 |
) |
||
| Retained earnings | 2,017.4 |
|
2,326.4 |
|
||
| Treasury stock, at cost (41,523,470 shares each period, respectively) | (2,456.7 |
) |
(2,456.7 |
) |
||
| Total stockholders’ equity | 559.8 |
|
856.5 |
|
||
| Noncontrolling interest | 0.5 |
|
0.5 |
|
||
| Total equity | 560.3 |
|
857.0 |
|
||
| Total liabilities and equity |
|
|
|
|
||
| Spirit AeroSystems Holdings, Inc. | ||||||
| Condensed Consolidated Statements of Cash Flows | ||||||
| (unaudited) | ||||||
| For the Six Months Ended | ||||||
| July 1, 2021 | July 2, 2020 | |||||
| ($ in millions) | ||||||
| Operating activities | ||||||
| Net loss |
( |
) |
( |
) |
||
| Adjustments to reconcile net loss to net cash used in operating activities | ||||||
| Depreciation and amortization expense | 160.3 |
|
135.4 |
|
||
| Amortization of deferred financing fees | 4.3 |
|
5.5 |
|
||
| Accretion of customer supply agreement | 1.1 |
|
1.2 |
|
||
| Employee stock compensation expense | 13.4 |
|
10.8 |
|
||
| (Gain) loss from derivative instruments | (0.1 |
) |
0.1 |
|
||
| Loss (gain) from foreign currency transactions | 4.9 |
|
(3.1 |
) |
||
| Loss on disposition of assets | 1.4 |
|
23.6 |
|
||
| Deferred taxes | 12.5 |
|
(51.3 |
) |
||
| Pension and other post-retirement benefits, net | (30.5 |
) |
65.9 |
|
||
| Grant liability amortization | (0.8 |
) |
(2.8 |
) |
||
| Equity in net loss of affiliates | 1.0 |
|
3.0 |
|
||
| Forward loss provision | (28.1 |
) |
149.0 |
|
||
| Changes in assets and liabilities | ||||||
| Accounts receivable, net | (11.2 |
) |
244.4 |
|
||
| Contract assets | 14.4 |
|
209.7 |
|
||
| Inventory, net | 111.8 |
|
(115.4 |
) |
||
| Accounts payable and accrued liabilities | (11.3 |
) |
(551.8 |
) |
||
| Profit sharing/deferred compensation | (29.2 |
) |
(60.1 |
) |
||
| Advance payments | (1.3 |
) |
(19.8 |
) |
||
| Income taxes receivable/payable | 8.3 |
|
(211.8 |
) |
||
| Contract liabilities | (82.1 |
) |
(5.5 |
) |
||
| Other | (29.6 |
) |
32.2 |
|
||
| Net cash used in operating activities |
( |
) |
( |
) |
||
| Investing activities | ||||||
| Purchase of property, plant and equipment | (53.3 |
) |
(51.2 |
) |
||
| Acquisition, net of cash acquired | (21.1 |
) |
(117.9 |
) |
||
| Other | 2.2 |
|
2.7 |
|
||
| Net cash used in investing activities |
( |
) |
( |
) |
||
| Financing activities | ||||||
| Proceeds from issuance of debt | - |
|
1,200.0 |
|
||
| Payment on revolving credit facility | - |
|
(800.0 |
) |
||
| Customer financing | (5.0 |
) |
10.0 |
|
||
| Principal payments of debt | (19.9 |
) |
(14.8 |
) |
||
| Payments on term loan | (2.0 |
) |
(11.4 |
) |
||
| Payments on floating rate notes | (300.0 |
) |
- |
|
||
| Taxes paid related to net share settlement awards | (4.4 |
) |
(13.8 |
) |
||
| Proceeds from issuance of ESPP stock | 1.4 |
|
1.3 |
|
||
| Debt issuance and financing costs | - |
|
(24.5 |
) |
||
| Purchase of treasury stock | - |
|
0.1 |
|
||
| Dividends paid | (2.2 |
) |
(13.4 |
) |
||
| Other | 0.1 |
|
- |
|
||
| Net cash (used in) provided by financing activities |
( |
) |
|
|
||
| Effect of exchange rate changes on cash and cash equivalents | (2.1 |
) |
(7.7 |
) |
||
| Net decrease in cash, cash equivalents and restricted cash for the period |
( |
) |
( |
) |
||
| Cash, cash equivalents, and restricted cash, beginning of the period | 1,893.1 |
|
2,367.2 |
|
||
| Cash, cash equivalents, and restricted cash, end of the period |
|
|
|
|
||
| Reconciliation of Cash and Cash Equivalents and Restricted Cash: | July 1, 2021 | July 2, 2020 | ||||
| Cash and cash equivalents, beginning of the period |
|
|
|
|
||
| Restricted cash, short-term, beginning of the period | 0.3 |
|
0.3 |
|
||
| Restricted cash, long-term, beginning of the period | 19.5 |
|
16.4 |
|
||
| Cash, cash equivalents, and restricted cash, beginning of the period |
|
|
|
|
||
| Cash and cash equivalents, end of the period |
|
|
|
|
||
| Restricted cash, short-term, end of the period |
|
|
|
|
||
| Restricted cash, long-term, end of the period | 19.5 |
|
19.5 |
|
||
| Cash, cash equivalents, and restricted cash, end of the period |
|
|
|
|
||
Appendix
In addition to reporting our financial information using U.S. Generally Accepted Accounting Principles (GAAP), management believes that certain non-GAAP measures (which are indicated by * in this report) provide investors with important perspectives into the company’s ongoing business performance. The non-GAAP measures we use in this report are (i) adjusted diluted earnings per share and (ii) free cash flow, which are described further below. The company does not intend for the information to be considered in isolation or as a substitute for the related GAAP measures. Other companies may define and calculate the measures differently than we do, limiting the usefulness of the measures for comparison with other companies.
Adjusted Diluted (Loss) Earnings Per Share. To provide additional transparency, we have disclosed non-GAAP adjusted diluted (loss) earnings per share (Adjusted EPS). This metric excludes various items that are not considered to be directly related to our operating performance. Management uses Adjusted EPS as a measure of business performance and we believe this information is useful in providing period-to-period comparisons of our results. The most comparable GAAP measure is diluted earnings per share.
Free Cash Flow. Free Cash Flow is defined as GAAP cash from operating activities (generally referred to herein as “cash used in operations”), less capital expenditures for property, plant and equipment. Management believes Free Cash Flow provides investors with an important perspective on the cash available for stockholders, debt repayments including capital leases, and acquisitions after making the capital investments required to support ongoing business operations and long term value creation. Free Cash Flow does not represent the residual cash flow available for discretionary expenditures as it excludes certain mandatory expenditures. The most comparable GAAP measure is cash provided by operating activities. Management uses Free Cash Flow as a measure to assess both business performance and overall liquidity.
The tables below provide reconciliations between the GAAP and non-GAAP measures.
| Adjusted EPS | |||||||||
| Three months ended | Six month ended | ||||||||
| July 1, 2021 | July 2, 2020 | July 1, 2021 | July 2, 2020 | ||||||
| GAAP Diluted Loss Per Share |
( |
|
( |
|
( |
|
( |
|
|
| Costs Related to Acquisitions | - |
a |
0.06 |
b |
0.01 |
a |
0.13 |
b |
|
| Restructuring Costs | 0.01 |
c |
0.04 |
d |
0.04 |
c |
0.29 |
d |
|
| Voluntary Retirement Program | - |
|
0.08 |
e |
- |
|
0.50 |
e |
|
| Deferred Tax Asset Valuation Allowance | 0.98 |
f |
- |
|
1.39 |
f |
- |
|
|
| Adjusted Diluted Loss Per Share |
( |
|
( |
|
( |
|
( |
|
|
|
|
|
|
|
|
|
|
||
| Diluted Shares (in millions) | 104.2 |
|
103.9 |
|
104.2 |
|
103.8 |
|
|
a |
Represents the three and six months ended Q2 2021 transaction costs (included in SG&A) | |
b |
Represents the three and six months ended Q2 2020 transaction costs (included in SG&A) | |
c |
Represents the three and six months ended Q2 2021 restructuring expenses for cost-alignment and headcount reductions (included in Restructuring costs) | |
d |
Represents the three and six months ended Q2 2020 restructuring expenses for cost-alignment and headcount reductions (included in Restructuring costs) | |
e |
Represents the three and six months ended Q2 2020 retirement incentive expenses resulting from the VRP offered during the first quarter of 2020 (included in Other expense) | |
f |
Represents the three and six months ended Q2 2021 deferred tax asset valuation allowance (included in Income tax provision) |
| Free Cash Flow | ||||||||||
| ($ in millions) | ||||||||||
| Three months ended | Six months ended | Guidance | ||||||||
| July 1, 2021 | July 2, 2020 | July 1, 2021 | July 2, 2020 | Full-Year 2021 | ||||||
| Cash used in Operations |
( |
|
( |
|
( |
|
( |
|
( |
|
| Capital Expenditures | (26) |
|
(20) |
|
(53) |
|
(51) |
|
(150) |
|
| Free Cash Flow |
( |
|
( |
|
( |
|
( |
|
( |
|
* Non-GAAP financial measure, see Appendix for reconciliation
View source version on businesswire.com: https://www.businesswire.com/news/home/20210804005415/en/
FAQ
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