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Hexcel Reports 2012 Second Quarter Results

Stocks in this article: HXL

Hexcel will host a conference call at 10:00 A.M. ET, tomorrow, July 24, 2012 to discuss the second quarter results and respond to analyst questions. The telephone number for the conference call is (719) 325-2115 and the confirmation code is 6084663. The call will be simultaneously hosted on Hexcel’s web site at 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 market segments we serve (including changes in commercial aerospace revenues, the estimates and expectations based on aircraft production rates made publicly available by Airbus and Boeing, the revenues we may generate from an aircraft model or program, the impact of delays in new aircraft programs, the outlook for space & defense revenues and the trend in wind energy, recreation and other industrial applications); our ability to maintain and improve margins in light of the changes in product mix, efficiency improvements, continued cost reduction efforts and the current economic environment; outcome of legal matters; the magnitude and timing of capital expenditures in relation to market demand; and the impact of the above factors on our expectations of 2012 financial results. 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 changing market conditions, increased raw material costs, competition, product mix, inability to achieve planned manufacturing improvements and cost reductions, supply chain disruptions, conditions in the financial markets and changes in currency exchange rates, interest rates, governmental and environmental regulations 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.

Hexcel Corporation and Subsidiaries
Condensed Consolidated Statements of Operations
Quarter Ended

June 30,

  Six Months Ended

June 30,

(In millions, except per share data)   2012   2011   2012   2011
Net sales $ 399.2   $ 353.7 $ 799.3   $ 685.3
Cost of sales     293.7     266.7     587.4     515.3
Gross margin 105.5 87.0 211.9 170.0
% Gross margin 26.4% 24.6% 26.5% 24.8%
Selling, general and administrative expenses 32.5 29.7 69.1 62.6
Research and technology expenses 8.6 7.9 17.8 16.5
Other operating (income) expense (a)     (9.5)         (9.5)     (5.7)
Operating income 73.9 49.4 134.5 96.6
Interest expense, net 3.0 2.9 6.0 7.1
Non-operating expense (b)     1.1         1.1     4.9
Income before income taxes and equity in earnings from affiliated companies 69.8 46.5 127.4 84.6
Provision for income taxes (c)     22.1     9.3     40.5     21.5
Income before equity in earnings from affiliated companies 47.7 37.2 86.9 63.1
Equity in earnings from affiliated companies     0.3     0.2     0.7     0.7
Net income   $ 48.0   $ 37.4   $ 87.6   $ 63.8
Basic net income per common share: $ 0.48 $ 0.38 $ 0.88 $ 0.65
Diluted net income per common share: $ 0.47 $ 0.37 $ 0.86 $ 0.63
Weighted-average common shares:
Basic 100.2 98.6 100.0 98.4
Diluted     102.0     100.7     101.9     100.5

(a) Other operating income for the three and six months ended June 30, 2012 includes income from a $9.6 million business interruption insurance settlement related to a prior year claim, a $4.9 million gain on the sale of land and a $5.0 million charge for additional environmental reserves primarily for remediation of a manufacturing facility sold in 1986. For the six months ended June 30, 2011 other operating income is a $5.7 million benefit from the curtailment of a pension plan.

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