PROVIDENCE, R.I.--(BUSINESS WIRE)--
Textron Inc. (NYSE: TXT) today reported first quarter 2016 income from
continuing operations of $0.55 per share, up 19.6 percent from $0.46 per
share in the first quarter of 2015.
Revenues in the quarter were $3.2 billion, up 4.2 percent from the first
quarter of 2015. Textron segment profit in the quarter was $280 million,
up $21 million from the first quarter of 2015. First quarter
manufacturing cash flow before pension contributions reflected a use of
cash of $222 million compared to a use of cash of $125 million during
last year’s first quarter.
“Increased revenues reflected growth at Industrial, Aviation and
Systems, with relatively flat revenues at Bell, consistent with our
expectations,” said Textron Chairman and CEO Scott C. Donnelly.
“Operationally, we achieved margin improvements at each of our
manufacturing segments.”
Outlook
Textron confirmed its 2016 earnings per share from continuing operations
guidance of $2.60 to $2.80 and its expectation for cash flow from
continuing operations of the manufacturing group before pension
contributions of $600 to $700 million with planned pension contributions
of about $60 million.
Donnelly continued, “Generally, demand in our end markets has been
consistent with what we were expecting. We continue to believe that we
will be able to generate solid overall growth in revenue, earnings and
cash this year.”
First Quarter Segment Results
Textron Aviation
Revenues at Textron Aviation were up $40 million, primarily due to
higher jet volume.
Textron Aviation delivered 34 new jets and 26 King Air turboprops in the
quarter, compared to 33 jets and 25 King Airs in last year’s first
quarter.
Textron Aviation recorded a segment profit of $73 million in the first
quarter compared to $67 million a year ago.
Textron Aviation backlog at the end of the first quarter was $1.0
billion, down $47 million from the end of the fourth quarter.
Bell
Bell revenues were up $1 million, as Bell delivered 6 V-22’s in the
quarter, flat with last year’s first quarter, 10 H-1’s compared to 4
H-1’s last year and 30 commercial helicopters, compared to 35 units last
year.
Segment profit was up $6 million, primarily due to improved performance.
Bell backlog at the end of the first quarter was $5.3 billion, up $60
million from the end of the fourth quarter.
Textron Systems
Revenues at Textron Systems increased $9 million, primarily due to
higher volume in the Unmanned Systems product line, while segment profit
was up $1 million.
Textron Systems’ backlog at the end of the first quarter was $2.5
billion, up $196 million from the end of the fourth quarter.
Industrial
Industrial revenues increased $80 million due to higher volumes and the
impact of acquisitions.
Segment profit increased $9 million reflecting the higher volumes.
Finance
Finance segment revenues decreased $2 million and segment profit
decreased $1 million.
Conference Call Information
Textron will host its conference call today, April 20, 2016 at 8:00 a.m.
(Eastern) to discuss its results and outlook. The call will be available
via webcast at www.textron.com
or by direct dial at (800) 288-8960 in the U.S. or (651) 291-0344
outside of the U.S. (request the Textron Earnings Call).
In addition, the call will be recorded and available for playback
beginning at 10:30 a.m. (Eastern) on Wednesday, April 20, 2016 by
dialing (320) 365-3844 ; Access Code: 373338.
A package containing key data that will be covered on today’s call can
be found in the Investor Relations section of the company’s website at www.textron.com.
About Textron Inc.
Textron Inc. is a multi-industry company that leverages its global
network of aircraft, defense, industrial and finance businesses to
provide customers with innovative solutions and services. Textron is
known around the world for its powerful brands such as Bell Helicopter,
Cessna, Beechcraft, Hawker, Jacobsen, Kautex, Lycoming, E-Z-GO,
Greenlee, Textron Systems, and TRU Simulation + Training. For more
information visit: www.textron.com.
Non-GAAP Measures
Manufacturing cash flow before pension contributions is a non-GAAP
measure that is defined and reconciled to GAAP in an attachment to this
release.
Forward-looking Information
Certain statements in this release and other oral and written statements
made by us from time to time are “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements, which may describe strategies, goals,
outlook or other non-historical matters, or project revenues, income,
returns or other financial measures, often include words such as
“believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,”
“guidance,” “project,” “target,” “potential,” “will,” “should,” “could,”
“likely” or “may” and similar expressions intended to identify
forward-looking statements. These statements are only predictions and
involve known and unknown risks, uncertainties, and other factors that
may cause our actual results to differ materially from those expressed
or implied by such forward-looking statements. Given these
uncertainties, you should not place undue reliance on these
forward-looking statements. Forward-looking statements speak only as of
the date on which they are made, and we undertake no obligation to
update or revise any forward-looking statements. In addition to those
factors described in our Annual Report on Form 10-K and our Quarterly
Reports on Form 10-Q under “Risk Factors”, among the factors that could
cause actual results to differ materially from past and projected future
results are the following: Interruptions in the U.S. Government’s
ability to fund its activities and/or pay its obligations; changing
priorities or reductions in the U.S. Government defense budget,
including those related to military operations in foreign countries; our
ability to perform as anticipated and to control costs under contracts
with the U.S. Government; the U.S. Government’s ability to unilaterally
modify or terminate its contracts with us for the U.S. Government’s
convenience or for our failure to perform, to change applicable
procurement and accounting policies, or, under certain circumstances, to
withhold payment or suspend or debar us as a contractor eligible to
receive future contract awards; changes in foreign military funding
priorities or budget constraints and determinations, or changes in
government regulations or policies on the export and import of military
and commercial products; volatility in the global economy or changes in
worldwide political conditions that adversely impact demand for our
products; volatility in interest rates or foreign exchange rates; risks
related to our international business, including establishing and
maintaining facilities in locations around the world and relying on
joint venture partners, subcontractors, suppliers, representatives,
consultants and other business partners in connection with international
business, including in emerging market countries; our Finance segment’s
ability to maintain portfolio credit quality or to realize full value of
receivables; performance issues with key suppliers or subcontractors;
legislative or regulatory actions, both domestic and foreign, impacting
our operations or demand for our products; our ability to control costs
and successfully implement various cost-reduction activities; the
efficacy of research and development investments to develop new products
or unanticipated expenses in connection with the launching of
significant new products or programs; the timing of our new product
launches or certifications of our new aircraft products; our ability to
keep pace with our competitors in the introduction of new products and
upgrades with features and technologies desired by our customers;
pension plan assumptions and future contributions; demand softness or
volatility in the markets in which we do business; and cybersecurity
threats, including the potential misappropriation of assets or sensitive
information, corruption of data or operational disruption.
|
TEXTRON INC.
Revenues by Segment and Reconciliation of Segment Profit to Net
Income
Three Months Ended April 2, 2016 and April 4, 2015
(Dollars in millions, except per share amounts)
(Unaudited)
|
|
|
|
|
Three Months Ended
|
|
|
|
April 2, 2016
|
|
April 4, 2015
|
REVENUES
|
|
|
|
|
|
MANUFACTURING:
|
|
|
|
|
|
Textron Aviation
|
|
|
$
|
1,091
|
|
|
$
|
1,051
|
|
Bell
|
|
|
|
814
|
|
|
|
813
|
|
Textron Systems
|
|
|
|
324
|
|
|
|
315
|
|
Industrial
|
|
|
|
952
|
|
|
|
872
|
|
|
|
|
|
3,181
|
|
|
|
3,051
|
|
|
|
|
|
|
|
FINANCE
|
|
|
|
20
|
|
|
|
22
|
|
Total revenues
|
|
|
$
|
3,201
|
|
|
$
|
3,073
|
|
|
|
|
|
|
|
SEGMENT PROFIT
|
|
|
|
|
|
MANUFACTURING:
|
|
|
|
|
|
Textron Aviation
|
|
|
$
|
73
|
|
|
$
|
67
|
|
Bell
|
|
|
|
82
|
|
|
|
76
|
|
Textron Systems
|
|
|
|
29
|
|
|
|
28
|
|
Industrial
|
|
|
|
91
|
|
|
|
82
|
|
|
|
|
|
275
|
|
|
|
253
|
|
|
|
|
|
|
|
FINANCE
|
|
|
|
5
|
|
|
|
6
|
|
Segment Profit
|
|
|
|
280
|
|
|
|
259
|
|
|
|
|
|
|
|
Corporate expenses and other, net
|
|
|
|
(32
|
)
|
|
|
(42
|
)
|
Interest expense, net for Manufacturing group
|
|
|
|
(33
|
)
|
|
|
(33
|
)
|
|
|
|
|
|
|
Income from continuing operations before income taxes
|
|
|
|
215
|
|
|
|
184
|
|
Income tax expense
|
|
|
|
(64
|
)
|
|
|
(56
|
)
|
|
|
|
|
|
|
Income from continuing operations
|
|
|
|
151
|
|
|
|
128
|
|
Discontinued operations, net of income taxes
|
|
|
|
(1
|
)
|
|
|
-
|
|
Net income
|
|
|
$
|
150
|
|
|
$
|
128
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
Income from continuing operations
|
|
|
$
|
0.55
|
|
|
$
|
0.46
|
|
Discontinued operations, net of income taxes
|
|
|
|
-
|
|
|
|
-
|
|
Net income
|
|
|
$
|
0.55
|
|
|
$
|
0.46
|
|
|
|
|
|
|
|
Diluted average shares outstanding
|
|
|
|
273,022,000
|
|
|
|
280,077,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Textron Inc. Condensed Consolidated Balance Sheets (In
millions) (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April 2, 2016
|
|
January 2, 2016
|
Assets
|
|
|
|
|
|
Cash and equivalents
|
|
|
$
|
723
|
|
$
|
946
|
Accounts receivable, net
|
|
|
|
1,209
|
|
|
1,047
|
Inventories
|
|
|
|
4,477
|
|
|
4,144
|
Other current assets
|
|
|
|
328
|
|
|
341
|
Net property, plant and equipment
|
|
|
|
2,560
|
|
|
2,492
|
Goodwill
|
|
|
|
2,114
|
|
|
2,023
|
Other assets
|
|
|
|
2,397
|
|
|
2,399
|
Finance group assets
|
|
|
|
1,291
|
|
|
1,316
|
Total Assets
|
|
|
$
|
15,099
|
|
$
|
14,708
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity
|
|
|
|
|
|
Short-term debt and current portion of long-term debt
|
|
|
$
|
309
|
|
$
|
262
|
Other current liabilities
|
|
|
|
3,568
|
|
|
3,530
|
Other liabilities
|
|
|
|
2,320
|
|
|
2,376
|
Long-term debt
|
|
|
|
2,800
|
|
|
2,435
|
Finance group liabilities
|
|
|
|
1,113
|
|
|
1,141
|
Total Liabilities
|
|
|
|
10,110
|
|
|
9,744
|
|
|
|
|
|
|
Total Shareholders' Equity
|
|
|
|
4,989
|
|
|
4,964
|
Total Liabilities and Shareholders' Equity
|
|
|
$
|
15,099
|
|
$
|
14,708
|
|
|
|
|
|
|
|
|
|
|
|
|
TEXTRON INC. MANUFACTURING GROUP Condensed
Schedule of Cash Flows and Manufacturing Cash Flow GAAP to Non-GAAP
Reconciliations Three Months Ended April 2, 2016 and
April 4, 2015 (In millions) (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
April 2, 2016
|
|
April 4, 2015
|
Cash flows from operating activities:
|
|
|
|
|
|
Income from continuing operations
|
|
|
$
|
148
|
|
|
$
|
124
|
|
Depreciation and amortization
|
|
|
|
106
|
|
|
|
108
|
|
Changes in working capital
|
|
|
|
(390
|
)
|
|
|
(305
|
)
|
Changes in other assets and liabilities and non-cash items
|
|
|
|
(12
|
)
|
|
|
6
|
|
Net cash from operating activities of continuing operations
|
|
|
|
(148
|
)
|
|
|
(67
|
)
|
Cash flows from investing activities:
|
|
|
|
|
|
Net cash used in acquisitions
|
|
|
|
(164
|
)
|
|
|
(32
|
)
|
Capital expenditures
|
|
|
|
(88
|
)
|
|
|
(79
|
)
|
Proceeds from the sale of property, plant and equipment
|
|
|
|
2
|
|
|
|
1
|
|
Other investing activities, net
|
|
|
|
(2
|
)
|
|
|
(7
|
)
|
Net cash from investing activities
|
|
|
|
(252
|
)
|
|
|
(117
|
)
|
Cash flows from financing activities:
|
|
|
|
|
|
Proceeds from long-term debt
|
|
|
|
345
|
|
|
|
-
|
|
Increase in short-term debt
|
|
|
|
42
|
|
|
|
25
|
|
Purchases of Textron common stock
|
|
|
|
(215
|
)
|
|
|
-
|
|
Other financing activities, net
|
|
|
|
1
|
|
|
|
(4
|
)
|
Net cash from financing activities
|
|
|
|
173
|
|
|
|
21
|
|
Total cash flows from continuing operations
|
|
|
|
(227
|
)
|
|
|
(163
|
)
|
Total cash flows from discontinued operations
|
|
|
|
-
|
|
|
|
(2
|
)
|
Effect of exchange rate changes on cash and equivalents
|
|
|
|
4
|
|
|
|
(5
|
)
|
Net change in cash and equivalents
|
|
|
|
(223
|
)
|
|
|
(170
|
)
|
Cash and equivalents at beginning of period
|
|
|
|
946
|
|
|
|
731
|
|
Cash and equivalents at end of period
|
|
|
$
|
723
|
|
|
$
|
561
|
|
|
|
|
|
|
|
Manufacturing Cash Flow GAAP to Non-GAAP Reconciliations:
|
|
|
|
|
|
|
|
|
|
|
|
Net cash from operating activities of continuing operations - GAAP
|
|
|
$
|
(148
|
)
|
|
$
|
(67
|
)
|
Less: Capital expenditures
|
|
|
|
(88
|
)
|
|
|
(79
|
)
|
Plus: Total pension contributions
|
|
|
|
12
|
|
|
|
20
|
|
Proceeds from the sale of property, plant and equipment
|
|
|
|
2
|
|
|
|
1
|
|
Manufacturing cash flow before pension contributions- Non-GAAP
|
|
|
$
|
(222
|
)
|
|
$
|
(125
|
)
|
|
|
|
|
|
|
|
|
|
2016 Outlook
|
Net cash from operating activities of continuing operations - GAAP
|
|
|
$ 1,015 - $ 1,115
|
Less: Capital expenditures
|
|
|
(475)
|
Plus: Total pension contributions
|
|
|
60
|
Manufacturing cash flow before pension contributions- Non-GAAP
|
|
|
$ 600 - $ 700
|
|
|
|
|
|
|
Free cash flow is a measure generally used by investors, analysts and
management to gauge a company’s ability to generate cash from operations
in excess of that necessary to be reinvested to sustain and grow the
business and fund its obligations. Our definition of Manufacturing free
cash flow adjusts net cash from operating activities of continuing
operations for dividends received from TFC, capital contributions
provided under the Support Agreement and debt agreements, capital
expenditures, proceeds from the sale of property, plant and equipment
and contributions to our pension plans. We believe that our calculation
provides a relevant measure of liquidity and is a useful basis for
assessing our ability to fund operations and obligations. This measure
is not a financial measure under GAAP and should be used in conjunction
with GAAP cash measures provided in our Consolidated Statements of Cash
Flows.
|
|
|
|
|
|
TEXTRON INC. Condensed Consolidated Schedule of Cash
Flows Three Months Ended April 2, 2016 and April 4, 2015 (In
millions) (Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
April 2, 2016
|
|
April 4, 2015
|
Cash flows from operating activities:
|
|
|
|
|
|
Income from continuing operations
|
|
|
$
|
151
|
|
|
$
|
128
|
|
Depreciation and amortization
|
|
|
|
109
|
|
|
|
110
|
|
Changes in working capital
|
|
|
|
(400
|
)
|
|
|
(269
|
)
|
Changes in other assets and liabilities and non-cash items
|
|
|
|
(10
|
)
|
|
|
12
|
|
Net cash from operating activities of continuing operations
|
|
|
|
(150
|
)
|
|
|
(19
|
)
|
Cash flows from investing activities:
|
|
|
|
|
|
Net cash used in acquisitions
|
|
|
|
(164
|
)
|
|
|
(32
|
)
|
Capital expenditures
|
|
|
|
(88
|
)
|
|
|
(79
|
)
|
Finance receivables repaid
|
|
|
|
17
|
|
|
|
31
|
|
Other investing activities, net
|
|
|
|
10
|
|
|
|
23
|
|
Net cash from investing activities
|
|
|
|
(225
|
)
|
|
|
(57
|
)
|
Cash flows from financing activities:
|
|
|
|
|
|
Proceeds from long-term debt
|
|
|
|
362
|
|
|
|
9
|
|
Increase in short-term debt
|
|
|
|
42
|
|
|
|
25
|
|
Principal payments on long-term debt and nonrecourse debt
|
|
|
|
(46
|
)
|
|
|
(70
|
)
|
Purchases of Textron common stock
|
|
|
|
(215
|
)
|
|
|
-
|
|
Other financing activities, net
|
|
|
|
1
|
|
|
|
5
|
|
Net cash from financing activities
|
|
|
|
144
|
|
|
|
(31
|
)
|
Total cash flows from continuing operations
|
|
|
|
(231
|
)
|
|
|
(107
|
)
|
Total cash flows from discontinued operations
|
|
|
|
-
|
|
|
|
(2
|
)
|
Effect of exchange rate changes on cash and equivalents
|
|
|
|
4
|
|
|
|
(5
|
)
|
Net change in cash and equivalents
|
|
|
|
(227
|
)
|
|
|
(114
|
)
|
Cash and equivalents at beginning of period
|
|
|
|
1,005
|
|
|
|
822
|
|
Cash and equivalents at end of period
|
|
|
$
|
778
|
|
|
$
|
708
|
|
|
|
|
|
|
|
|
|
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20160420005164/en/
Source: Textron