Hawker Beechcraft makes loss after $726 million write-down
Sales at Hawker Beechcraft Acquisition Company fell in 2008 but cash flow improved and deliveries beat forecast.
Hawker Beechcraft lost $712 million in 2009 after booking cash impairment and other charges of $726.4 million. Sales, however, only fell slightly and the manufacturer delivered more aircraft than it originally forecast.
The company’s sales fell to $3.2 billion, in 2009, from $3.5 billion in 2008 where it made a $140 million profit.
Hawker Beechcraft sold business and general aviation aircraft worth $2.3 billion compared to $2.8 billion in 2008. It delivered 309 business and general aviation aircraft in 2009 – 98 jets, 155 turboprops and 56 piston aircraft – compared to 441 deliveries in 2008.
The services group was hit by a fall in business and general aviation flights with sales falling from $523 million in 2008 to $438 million in 2009. Some of this drop is because Hawker Beechcraft sold its fuel and line operations businesses during 2008. These divisions generated $48.5 million of sales in 2008.
Trainer aircraft sales rose $193 million to $531 million for 2009, compared to $338 million in 2008. Sales of trainer aircraft were hit in June 2008 when the company stopped delivering aircraft because of quality issues with a supplier. Trainer aircraft deliveries re-started in January 2009.
Cash flow from operations for 2009 was $177 million. The company consumed $69 million of cash in 2008. The improvement was down to cutting costs and inventory. Hawker Beechcraft held $568 million in cash on December 31, 2009. It has used some of this to repay a $230 million revolving loan although this is still available if needed.
The company continued to invest in research and development spending $107 million in 2009 down just $3 million from 2008.
Hawker Beechcraft’s biggest concern is the fall in its order book. Its backlog on December 31, 2009, was $3.4 billion, compared to $6.6 billion on September 27, 2009, and $7.6 billion at the end of 2008. The drop is largely because of fractional jet company NetJet’s decision to cancel an order for aircraft worth $2.6 billion at the end of 2009.