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Hexcel Reports 2000 Second Quarter Results

  • Tuesday, 25th July 2000
  • Reading time: about 3 minutes

On Wednesday Hexcel Corporation reported net income for the 2000 second quarter of $50.4 million, including a net after-tax gain from the sale of the Bellingham aircraft interiors business of approximately $44 million. This compares with net income of $4.3 million for the second quarter of 1999, and net income of $2.6 million for the first quarter of 2000. Excluding business consolidation expenses and the gain from the sale of the Bellingham business, adjusted net income was $6.5 million for the second quarter of 2000. This represents a 25% increase compared with adjusted net income for the 1999 second quarter of $5.2 million and a 91% increase compared with the 2000 first quarter of $3.4 million. Adjusted net income for the 2000 second quarter reflects a portion of the interest expense reduction that will result from the use of the Bellingham transaction proceeds to pay down debt. In addition, Hexcel benefited from an increase in its equity share of the earnings of affiliated companies, primarily as a result of the improved operating results of the Company’s electronic fabrics venture in Asia. The year-on-year decline in commercial aerospace revenues primarily reflects the impact of The Boeing Company’s reductions in aircraft production rates during the second half of 1999. Recently, Boeing has publicly indicated that it may be able to sustain aircraft production at the current rate of about 490 per year, and Hexcel’s sales to Boeing and related subcontractors appear to have stabilized. According to industry analysts, Airbus Industrie plans to increase aircraft deliveries to about 320 in 2000 and to more than 350 in 2001. The benefit the Company obtains from any increases in build rates in 2001 will depend upon the mix of aircraft that are produced, the continuing impact on the aerospace supply chain of the pressure to reduce the cost of commercial aircraft, and the results of productivity improvement. Commenting on Hexcel’s second quarter 2000 results, John J. Lee, chairman and CEO, said, “The second quarter benefited from a continuation of the positive trends that began to emerge in the first quarter. Airbus and Boeing appear to be on track to deliver a combined total of more than 800 aircraft in 2000, and there are strong indications that they expect to do the same or better in 2001. The Company is also beginning to reap additional benefits from its emphasis on high-growth market segments. Sales of lightweight glass and aramid fabrics to electronics, architectural and ballistics markets continued to rise, while use of the Company’s advanced composites for wind energy, automotive and other industrial applications continued to climb. Further, as we enter 2001, the ramp up of production on a number of new military aircraft will start to contribute to Hexcel’s growth.”

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