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Hexcel Raises Guidance on Strong 2012 Third Quarter Results

  Hexcel Raises Guidance on Strong 2012 Third Quarter Results

  *Sales of $391.6 million were 11.3% higher than last year (13.4% in
    constant currency) with constant currency double digit growth in all three
    of our reported markets.
  *Net income was $39.8 million, $0.39 per diluted share, versus $32.2
    million, $0.32 per diluted share ($0.34 per adjusted diluted share) last
    year.
  *Adjusted operating income was $60.0 million, 15.3% of sales, as compared
    to $48.7 million, 13.8% of sales in 2011 (see Table C).
  *FY2012 adjusted diluted EPS guidance increased to a range of $1.54 to
    $1.59 (from $1.45 to $1.55) and sales range narrowed to $1.56 billion to
    $1.59 billion.

Business Wire

STAMFORD, Conn. -- October 22, 2012

RegulatoryNews:

Hexcel Corporation (NYSE:HXL)(Paris:HXL):


                 Quarter Ended                 Nine Months Ended
                                                                  
                 September 30,                 September 30,
(In millions,                        %                                 %
except per       2012    2011   Change    2012      2011     Change
share data)
                                                        
Net Sales        $ 391.6   $ 351.8   11.3%     $ 1,190.9   $ 1,037.1   14.8%
Net sales
change in                            13.4%                             17.0%
constant
currency
Operating          60.0      46.0    30%         194.5       142.6     36%
Income
Net Income         39.8      32.2    24%         127.4       96.0      33%
Diluted net
income per       $ 0.39    $ 0.32    22%       $ 1.25      $ 0.95      32%
common share
                                                                       
Non-GAAP
Measures for
y-o-y
comparisons:
Adjusted
Operating        $ 60.0    $ 48.7    23%       $ 185.0     $ 139.6     33%
Income (table
C)
As a % of          15.3%     13.8%               15.5%       13.5%
sales
Adjusted Net
Income (table      39.8      34.0    17.1%       122.1       91.2      34%
C)
Adjusted
diluted net     $ 0.39   $ 0.34   14.7%    $ 1.20     $ 0.91     32%
income per
share

Hexcel Corporation (NYSE:HXL), today reported results for the third quarter of
2012. Net sales during the quarter were $391.6 million, 11.3% higher than the
$351.8 million reported for the third quarter of 2011. Operating income for
the period was $60.0 million, compared to $46.0 million last year, while net
income for the third quarter of 2012 was $39.8 million, or $0.39 per diluted
share, compared to $32.2 million or $0.32 per diluted share in 2011. Excluding
the impact of items in Table C, adjusted diluted net income for the third
quarter of 2012 was $0.39 per share compared to $0.34 per share in 2011.

Chief Executive Officer Comments

Mr. Berges commented, “Hexcel’s results continue to be strong, as solid
execution and increased sales combined to yield another quarter with excellent
performance. For the quarter, adjusted operating income grew 23% over the same
period last year on 13% constant currency revenue growth, resulting in a 150
basis point improvement in operating margins.”

Looking ahead, Mr. Berges said, “As we expect continued year over year sales
growth and operational performance, we are increasing our 2012 guidance for
adjusted diluted EPS to $1.54 to $1.59 (from $1.45 to $1.55). We are also
narrowing the sales range to $1.56 billion to $1.59 billion (from $1.55
billion to $1.65 billion). Additionally, we have revised our capital spending
plan to incorporate recent yield and productivity improvements, reduced cycle
time to replicate and qualify new lines, and our latest demand model. We are
lowering our 2012 accrued capital expenditure guidance to $230 million to $250
million (from $250 million to $275 million) and expect 2013 to be around $200
million.”

Markets

Commercial Aerospace

  *Commercial Aerospace sales of $234.1 million increased 12.9% (13.6% in
    constant currency) for the quarter as compared to the third quarter of
    2011. Revenues attributed to new aircraft programs (A380, A350, B787,
    B747-8) increased more than 30% versus the same period last year and
    comprise about 30% of Commercial Aerospace sales. Sales for Airbus and
    Boeing legacy aircraft comprise more than half of commercial aerospace
    sales and were up about 9% compared to the third quarter of 2011.
  *Sales to “Other Commercial Aerospace,” which include regional and business
    aircraft customers, were about the same as the third quarter of 2011,
    though about 10% lower than first half levels.

Space & Defense

  *Space & Defense sales of $90.6 million were 12.0% higher (14.4% in
    constant currency) than the third quarter of 2011. We continue to benefit
    from civil and military rotorcraft growth across all regions.

Industrial

  *Total Industrial sales of $66.9 million for the third quarter of 2012 were
    5.4% higher (11.5% in constant currency) than the third quarter of 2011.
    Sales to wind turbine manufacturers were up significantly from last year’s
    third quarter, but were down almost 20% versus the second quarter of 2012,
    as we begin to see the impact of a U.S. slowdown. Third quarter sales from
    our U.S. wind facility were less than 30% of our global wind sales.

Tax

  *The tax provision was $18.0 million for the third quarter of 2012, an
    effective tax rate of 31.1%, reflecting the reduction in our year to date
    rate to 31.6%. Last year’s third quarter tax provision was $12.0 million,
    an effective tax rate of 27.4%, as last year benefited from a release of
    $1.0 million of reserves for uncertain tax positions and a reduction in
    our estimated tax rate for 2011 to 31%.

Cash and other

  *Free cash flow (defined as cash provided from operating activities less
    cash paid for capital expenditures) for the first nine months of 2012 was
    a use of $58.4 million versus a source of $11.5 million in the first nine
    months of 2011, reflecting increased capital expenditures partially offset
    by $48.6 million increase in adjusted EBITDA (see Table C) for the
    comparable period. Cash paid for capital expenditures was $208.9 million
    in the first nine months of 2012 compared to $99.5 million in the first
    nine months of 2011. Accrued capital expenditures were $174.7 million for
    the first nine months of 2012.
  *Total debt, net of cash as of September 30, 2012 was $253.2 million, a
    decrease of $14.1 million from June 30, 2012.
  *Foreign exchange rates contributed about 30 basis points to the higher
    operating income percentage in the third quarter of 2012 as compared to
    2011.

2012 Outlook

We have updated our 2012 outlook:

  *Sales to be in the range of $1.56 billion to $1.59 billion (previously the
    range was $1.55 billion to $1.65 billion). The strengthening of the dollar
    against the Euro and the GBP results in a reduction of our reported sales.
    At today’s exchange rates, our reported sales for the full year will be
    $35 million to $40 million less than at the rates forecasted at the
    beginning of the year.
  *Adjusted diluted earnings per share to be in the range of $1.54 to $1.59
    (versus prior guidance of $1.45 to $1.55).
  *Accrual basis capital expenditures to be in the range of $230 million to
    $250 million (versus prior guidance of $250 million to $275 million). We
    expect our capital spending to be funded by our cash from operating
    activities and our existing credit facilities. We expect free cash flow
    for the year to be a use of cash in the range of $40 million to $60
    million (improved from a use of $50 million to $75 million in prior
    guidance).

                                    *****

Hexcel will host a conference call at 10:00 A.M. ET, tomorrow, October 23,
2012 to discuss the third quarter results and respond to analyst questions.
The telephone number for the conference call is (719) 325-2144 and the
confirmation code is 5171354. The call will be simultaneously hosted on
Hexcel’s web site at www.hexcel.com/investors/index.html. 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
                             Unaudited
                               Quarter Ended           Nine Months Ended
                                                   
                               September 30,           September 30,
(In millions, except per     2012      2011      2012        2011
share data)
Net sales                    $ 391.6    $ 351.8     $ 1,190.9    $ 1,037.1
Cost of sales                292.4    265.3    879.8      780.6   
                                                                     
Gross margin                   99.2        86.5        311.1         256.5
% Gross margin                 25.3  %     24.6  %     26.1    %     24.7    %
                                                                     
Selling, general and           30.3        29.9        99.4          92.5
administrative expenses
Research and technology        8.9         7.9         26.7          24.4
expenses
Other operating (income)     —        2.7      (9.5    )   (3.0    )
expense (a)
                                                                     
Operating income               60.0        46.0        194.5         142.6
                                                                     
Interest expense, net          2.2         2.2         8.2           9.3
Non-operating expense (b)    —        —        1.1        4.9     
                                                                     
Income before income taxes
and equity in earnings         57.8        43.8        185.2         128.4
from affiliated companies
Provision for income taxes   18.0     12.0     58.5       33.5    
(c)
                                                                     
Income before equity in
earnings from affiliated       39.8        31.8        126.7         94.9
companies
Equity in earnings from      —        0.4      0.7        1.1     
affiliated companies
                                                                     
Net income                  $ 39.8    $ 32.2    $ 127.4     $ 96.0    
                                                                     
                                                                     
                                                                     
Basic net income per         $ 0.40     $ 0.33     $ 1.27       $ 0.97    
common share:
                                                                     
Diluted net income per       $ 0.39     $ 0.32     $ 1.25       $ 0.95    
common share:
                                                                     
                                                                     
Weighted-average common
shares:
                                                                     
Basic                          100.3       99.0        100.1         98.6
Diluted                      102.1    101.1    102.0      100.7   

(a) Other operating income for the nine months ended September 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 nine months
ended September 30, 2011 other operating income is a $5.7 million benefit from
the curtailment of a pension plan and a $2.7 million charge for additional
environmental reserves for remediation of a manufacturing facility sold in
1986.

(b) Non-operating expense is the accelerated amortization of deferred
financing costs and expensing of the call premium from redeeming $73.5 million
in June 2012 and $150 million in February 2011 of the Company’s 6.75% senior
subordinated notes.

(c) Provision for income taxes for the nine months ended September 30, 2011
includes a release of $5.5 million of reserves primarily for uncertain tax
positions as a result of an audit settlement.

Hexcel Corporation and Subsidiaries

Condensed Consolidated Balance Sheets
                                  Unaudited
(In millions)                       September 30, 2012   December 31, 2011
Assets                                                  
Current assets:
Cash and cash equivalents           $ 43.2                 $ 49.5
Accounts receivable, net              242.2                  199.3
Inventories, net                      235.7                  215.7
Current deferred tax assets and     63.1                59.8        
other current assets
Total current assets                  584.2                  524.3
                                                             
Property, plant and equipment         1,391.0                1,223.5
Less accumulated depreciation       (532.8       )       (501.4      )
Property, plant and equipment,        858.2                  722.1
net
                                                             
Goodwill and other intangible         57.7                   57.4
assets, net
Investments in affiliated             21.9                   21.7
companies
Deferred tax assets                   28.0                   33.0
Other assets                        16.9                17.6        
Total assets                       $ 1,566.9            $ 1,376.1     
                                                             
Liabilities and Stockholders'
Equity
Current liabilities:
Notes payable and current
maturities of capital lease         $ 17.1                 $ 12.6
obligations
Accounts payable                      104.3                  141.7
Accrued liabilities                 108.1               93.2        
Total current liabilities             229.5                  247.5
                                                             
Long-term notes payable and           279.3                  238.3
capital lease obligations
Other non-current liabilities       109.2               88.1        
Total liabilities                     618.0                  573.9
                                                             
Stockholders' equity:
Common stock, $0.01 par value,
200.0 shares authorized, 102.2
shares issued at September 30,        1.0                    1.0
2012 and 101.0 shares issued at
December 31, 2011
Additional paid-in capital            612.2                  589.2
Retained earnings                     411.3                  283.9
Accumulated other comprehensive     (36.4        )       (39.8       )
loss
                                      988.1                  834.3
Less – Treasury stock, at cost,
2.5 shares and 2.2 shares at        (39.2        )       (32.1       )
September 30, 2012 and December
31, 2011, respectively
Total stockholders' equity          948.9               802.2       
Total liabilities and              $ 1,566.9            $ 1,376.1     
stockholders' equity

Hexcel Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows
                                                      Unaudited
                                                       Year to Date Ended

                                                       September 30,
(In millions)                                         2012       2011
                                                                  
Cash flows from operating activities
Net income                                             $ 127.4      $ 96.0
                                                                      
Reconciliation to net cash provided by operating
activities:
Depreciation and amortization                            43.0         41.6
Amortization of deferred financing costs and call        2.5          6.4
premium expense
Deferred income taxes                                    21.3         27.4
Equity in earnings from affiliated companies             (0.7   )     (1.1   )
Share-based compensation                                 13.1         11.3
Gain on sale of land                                     (4.9   )
Pension curtailment gain                                 —            (5.7   )
Excess tax benefits on share-based compensation          (5.8   )     (3.7   )
                                                                      
Changes in assets and liabilities:
Increase in accounts receivable                          (45.0  )     (31.8  )
Increase in inventories                                  (20.7  )     (41.8  )
(Increase) decrease in other current assets              1.5          (2.0   )
Increase in accounts payable and accrued liabilities     26.9         18.4
Other – net                                            (8.1   )   (4.0   )
Net cash provided by operating activities (a)          150.5     111.0  
                                                                      
Cash flows from investing activities
Proceeds from sale of land                               5.3          —
Capital expenditures (b)                                 (208.9 )     (99.5  )
Settlement of foreign currency hedge                   —         (5.2   )
Net cash used for investing activities                 (203.6 )   (104.7 )
                                                                      
Cash flows from financing activities
Borrowings from senior secured credit facility           122.0        135.0
Repayments of capital lease obligations and other        1.8          (3.6   )
debt, net
Issuance costs related to senior secured credit          (0.6   )     —
facility
Call premium payment for 6.75% senior subordinated       (0.8   )     (3.4   )
notes
Repayment of senior secured credit facility – term       (5.0   )     (3.8   )
loan
Repayment of 6.75% senior subordinated notes             (73.5  )     (150.0 )
Repayment of senior secured credit facility              —            (61.0  )
Activity under stock plans                             3.0       9.1    
Net cash provided by (used in) financing activities    46.9      (77.7  )
                                                                      
Effect of exchange rate changes on cash and cash       (0.1   )   2.6    
equivalents
Net decrease in cash and cash equivalents                (6.3   )     (68.8  )
Cash and cash equivalents at beginning of period       49.5      117.2  
Cash and cash equivalents at end of period            $ 43.2     $ 48.4   
                                                                      
Supplemental Data:
Free cash flow (a)+(b)                                 $ (58.4  )   $ 11.5
Accrual basis additions to property, plant and         $ 174.7      $ 104.3
equipment

Hexcel Corporation and Subsidiaries
Net Sales to Third-Party Customers by Market Segment
Quarters Ended September 30, 2012 and 2011        (Unaudited)  Table A
(In millions)       As Reported                  Constant Currency (a)
                                                      FX                 B/(W)
Market Segment       2012    2011   B/(W) %             2011  
                                                      Effect             %
                                                      (b)
Commercial          $ 234.1  $ 207.4  12.9     $  (1.4)   $ 206.0  13.6
Aerospace
Space & Defense        90.6      80.9    12.0         (1.7)      79.2    14.4
Industrial           66.9    63.5   5.4        (3.5)    60.0   11.5
Consolidated Total  $ 391.6  $ 351.8  11.3     $  (6.6)   $ 345.2  13.4
Consolidated % of    %       %                        %      
Net Sales
Commercial             59.8      59.0                            59.7
Aerospace
Space & Defense        23.1      23.0                            22.9
Industrial           17.1    18.0                     17.4   
Consolidated Total   100.0   100.0                    100.0  

Nine Months Ended September 30, 2012 and 2011   (Unaudited)  
(In millions)   As Reported                    Constant Currency (a)
                                                   FX                    B/(W)
Market Segment   2012      2011     B/(W)             2011    
                                         %         Effect                %
                                                   (b)
Commercial      $ 709.9    $ 612.8    15.8   $ (6.5)    $ 606.3    17.1
Aerospace
Space &            263.6       242.3     8.8       (4.2)       238.1     10.7
Defense
Industrial       217.4     182.0    19.5    (8.4)     173.6    25.2
Consolidated    $ 1,190.9  $ 1,037.1  14.8   $ (19.1)   $ 1,018.0  17.0
Total
Consolidated %   %         %                        %        
of Net Sales
Commercial         59.6        59.1                            59.6
Aerospace
Space &            22.1        23.4                            23.4
Defense
Industrial       18.3      17.5                     17.0     
Consolidated     100.0     100.0                    100.0    
Total

(a) To assist in the analysis of our net sales trend, total net sales and
sales by market for the quarter and nine months ended September 30, 2011 have
been estimated using the same U.S. dollar, British pound and Euro exchange
rates as applied for the respective period in 2012 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
                        Composite     Engineered     Corporate &
(In millions)         Materials   Products     Other         Total
                        (b)                          (a)(b)
Third Quarter 2012                                        
Net sales to         $ 299.9      $ 91.7        $ —            $ 391.6
external customers
Intersegment sales    14.0       0.9         (14.9   )     —       
Total sales             313.9         92.6           (14.9   )       391.6
Operating income        57.0          14.9           (11.9   )       60.0
(loss)
% Operating margin      18.2   %      16.1    %                      15.3    %
                                                                     
Depreciation and        13.4          1.2            0.1             14.7
amortization
Stock-based
compensation            0.7           0.2            1.7             2.6
expense
Accrual based
additions to          55.6       4.6         —            60.2    
capital
expenditures
Third Quarter 2011                                           
Net sales to          $ 262.4       $ 89.4         $ —             $ 351.8
external customers
Intersegment sales    14.6       0.3         (14.9   )     —       
Total sales             277.0         89.7           (14.9   )       351.8
Operating income        45.1          16.2           (15.3   )       46.0
(loss) (b)
% Operating margin      16.3   %      18.1    %                      13.1    %
                                                                     
Other operating
(income) expense        —             —              2.7             2.7
(b)
Depreciation and        12.5          1.1            0.1             13.7
amortization
Stock-based
compensation            0.9           0.5            1.1             2.5
expense
Accrual based
additions to          46.5       2.2         0.5          49.2    
capital
expenditures
First Nine Months                                         
2012
Net sales to          $ 932.8       $ 258.1        $ —             $ 1,190.9
external customers
Intersegment sales    44.8       1.2         (46.0   )     —       
Total sales             977.6         259.3          (46.0   )       1,190.9
Operating income        203.7         38.4           (47.6   )       194.5
(loss)
% Operating margin      20.8   %      14.8    %                      16.3    %
                                                                     
Other operating
(income) expense        (14.5  )      —              5.0             (9.5    )
(b)
Depreciation and        39.6          3.3            0.1             43.0
amortization
Stock-based
compensation            3.7           0.7            8.7             13.1
expense
Accrual based
additions to          166.2      8.3         0.2          174.7   
capital
expenditures
First Nine Months                                            
2011
Net sales to          $ 795.5       $ 241.6        $ —             $ 1,037.1
external customers
Intersegment sales    42.4       0.8         (43.2   )     —       
Total sales             837.9         242.4          (43.2   )       1,037.1
Operating income        143.4         40.6           (41.4   )       142.6
(loss)
% Operating margin      17.1   %      16.7    %                      13.7    %
                                                                     
Other operating
(income) expense        (5.7   )      —              2.7             (3.0    )
(b)
Depreciation and        38.2          3.2            0.2             41.6
amortization
Stock-based
compensation            3.4           0.9            7.0             11.3
expense
Accrual based
additions to          99.2       4.6         0.5          104.3   
capital
expenditures

(a) We do not allocate corporate expenses to the operating segments.

(b) Other operating income for the nine months ended September 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. The third quarter of
2011 includes $2.7 million of charges to the environmental reserves primarily
for remediation at a manufacturing facility sold in 1986. For the nine months
ended September 30, 2011 other operating income is a $5.7 million benefit from
the curtailment of a pension plan.

Hexcel Corporation and Subsidiaries
Reconciliation of GAAP and Non-GAAP Operating      Table C
Income and Net Income
                               Unaudited
                                Quarter Ended            Nine Months Ended
                                                       
                                September 30,            September 30,
(In millions)                    2012       2011      2012      2011
                                                                  
GAAP operating income           $  60.0        46.0      $ 194.5     $ 142.6
- Other operating (income)       —         2.7      (9.5  )   (3.0  )
expense (a)
Adjusted Operating Income       $  60.0        48.7      $ 185.0     $ 139.6
% of Net Sales                     15.3  %     13.8  %     15.5  %     13.5  %
- Stock Compensation            $  2.6         2.5       $ 13.1      $ 11.3
Expense
- Depreciation and               14.7      13.7     43.0     41.6  
Amortization
Adjusted EBITDA                $  77.3      64.9    $ 241.1   $ 192.5 

                             
                              Unaudited
                               Quarter Ended September 30,
                               2012                    2011
(In millions, except per      As Reported  EPS       As Reported  EPS
diluted share data)
                                                                  
GAAP net income                $  39.8       $ 0.39     $  32.2       $ 0.32
- Other operating (income)      —        —          1.8      0.02   
expense (net of tax) (a)
Adjusted net income           $  39.8     $ 0.39   $  34.0     $ 0.34 
                               Unaudited
                               Nine Months Ended September 30,
                               2012                    2011
(In millions, except per      As Reported  EPS       As Reported  EPS
diluted share data)
                                                                      
GAAP net income                $  127.4      $ 1.25     $  96.0       $ 0.95
- Other operating (income)        (6.0   )   (0.06  )      (2.3  )    (0.02  )
expense (net of tax) (a)
- Non-operating expense (net      0.7        0.01          3.0        0.03
of tax) (b)
- Benefit from tax audit        —        —          (5.5  )   (0.05  )
settlement (c)
Adjusted net income           $  122.1    $ 1.20   $  91.2     $ 0.91 

(a) Other operating income for nine months ended September 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. The third quarter of 2011 includes
$2.7 million of charges to the environmental reserves primarily for
remediation at a manufacturing facility sold in 1986. For the nine months
ended September 30, 2011 other operating income is a $5.7 million benefit from
the curtailment of a pension plan.

(b) Non-operating expense is the accelerated amortization of deferred
financing costs and expensing of the call premium from redeeming $73.5 million
in June 2012 and $150 million in February 2011 of the Company’s 6.75% senior
subordinated notes.

(c) Tax benefit from the release of $5.5 million of reserves primarily for
uncertain tax positions as a result of an audit settlement.

Management believes that adjusted operating income, adjusted EBITDA, adjusted
net income 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)                        2012           2012       2011
                                                                     
Notes payable and current
maturities of capital lease           $   17.1        $ 19.2      $  12.6
obligations
Long-term notes payable and capital     279.3      280.7     238.3  
lease obligations
Total Debt                                296.4         299.9        250.9
Less: Cash and cash equivalents         (43.2  )    (32.6 )    (49.5  )
Total debt, net of cash              $   253.2     $ 267.3   $  201.4  

Contact:

Hexcel Corporation
Michael Bacal, 203-352-6826
michael.bacal@hexcel.com
 
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