Hexcel have reported results for the third quarter of 2005 with net sales for the quarter $276.6 million, 5.1 percent higher than the same period last year.
Quarterly operating income was $8.7 million, after reflecting a litigation settlement expense of $15.8 million, $1.9 million in related legal costs and $1.0 million in transaction costs related to the secondary offering of common shares.
Other third Quarter Highlights are:
Net sales up 5.1% to $276.6 million compared to the third quarter of 2004 with commercial aerospace up 7.1%
Gross Margin of 21.1% compared to 20.9% in third quarter of 2004
Operating income up 22.3% to $27.4 million or 9.9% of net sales before reflecting $15.8 million in litigation settlement expense, $1.9 million in related legal costs and $1.0 million in secondary offering transaction costs. Operating income in third quarter of 2004 was $22.4 million or 8.5% of net sales (before special items)
Total debt, net of cash, decreased by $20.8 million to $414.0 million
“Despite a Boeing strike and the push-out in the A380 production schedule, we managed to deliver top line growth over the prior year for the 11th quarter in a row. With the strike resolved, A380 production soon to pick up and the official launch of the new Airbus A350, we expect our growth trend to continue well into the future.” said Chairman, President and CEO, Mr. David E. Berges.
Adding that “despite high oil and energy prices, this was the best third quarter gross margin in 7 years as we solved many of our second quarter ramp-up problems by September. The quarter did have two significant special items. First, with rising legal costs, we decided to settle two previously disclosed carbon fibre litigation matters during the quarter, subject to final review and approval by the Department of Justice (Civil Division) and the U.S. District Court. Second, the Company incurred expenses related to the secondary offering and conversion of the mandatorily convertible preferred stock. Excluding these special items, we again delivered great leverage to the bottom line as the Company would have reported net income of $19.8 million for the quarter, up $11.7 million on $13.5 million of incremental sales.”
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