PROVIDENCE, R.I.--(BUSINESS WIRE)--
Textron Inc. (NYSE: TXT) today reported first quarter 2015 income from
continuing operations of $0.46 per share, up 48.4 percent from $0.31 per
share in the first quarter of 2014.
Revenues in the quarter were $3.1 billion, up 7.9 percent compared to
$2.8 billion in the first quarter of 2014. Textron segment profit in the
quarter was $259 million, up $40 million from the first quarter of 2014.
First quarter manufacturing cash flow before pension contributions
reflected a use of cash of $125 million compared to a use of cash of
$111 million during last year’s first quarter.
“Revenues at Textron Aviation and Industrial were up during the quarter,
while revenues at Bell and Textron Systems were down, as we expected,”
said Textron Chairman and CEO
Scott C. Donnelly
. “Operationally, we
achieved significant margin improvements at Textron Aviation and
Industrial, reflecting strong performance in these segments.”
Donnelly continued, “While we expected military deliveries would be down
at Bell this year, the medium segment of the commercial helicopter
market remains soft. As a result, we are adjusting production levels and
taking additional cost actions to allow Bell to perform within its
targeted 2015 segment margin range of 11 to 12 percent.”
The company expects that the net impact of the Bell cost actions and
lower commercial revenues on Textron’s expected 2015 earnings and cash
flow will be offset by stronger results at Textron Aviation and
Industrial.
Outlook
Textron confirmed its 2015 earnings per share from continuing operations
guidance of $2.30 to $2.50 and its expectation for cash flow from
continuing operations of the manufacturing group before pension
contributions of $550 to $650 million with planned pension contributions
of about $80 million.
First Quarter Segment Results
Textron Aviation
Revenues at Textron Aviation were up $266 million, primarily reflecting
the impact of the Beechcraft acquisition. Textron Aviation delivered 33
new jets in the quarter, compared to 35 jets in last year’s first
quarter, and 25 King Air turboprops.
Textron Aviation recorded a segment profit of $67 million in the first
quarter compared to $14 million a year ago. The increase is primarily
due to improved performance, reflecting the impact of the Beechcraft
acquisition, and higher volumes.
Textron Aviation backlog at the end of the first quarter was $1.3
billion, down $99 million from the end of the fourth quarter.
Bell
Bell revenues decreased $60 million, primarily the result of lower V-22
deliveries.
Bell delivered 6 V-22’s and 4 H-1’s in the quarter, compared to 8 V-22’s
and 5 H-1’s in last year’s first quarter and 35 commercial helicopters,
compared to 34 units last year.
Segment profit decreased $20 million primarily due to the lower volumes
and an unfavorable mix of commercial aircraft deliveries.
Bell backlog at the end of the first quarter was $5.3 billion, down $237
million from the end of the fourth quarter.
Textron Systems
Revenues at Textron Systems decreased $48 million, primarily due to
lower Marine and Land Systems volumes.
Segment profit was down $11 million, reflecting the lower volumes.
Textron Systems’ backlog at the end of the first quarter was $3.0
billion, up $168 million from the end of the fourth quarter.
Industrial
Industrial revenues increased $75 million due to higher overall volumes
and the impact of acquisitions, partially offset by a $62 million
unfavorable year-over-year impact from foreign exchange. Segment profit
increased $16 million reflecting the higher volumes.
Finance
Finance segment revenues decreased $7 million and segment profit
increased $2 million.
Conference Call Information
Textron will host its conference call today, April 28, 2015 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) 700-7860 in the U.S. or (612) 332-1210
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 Tuesday, April 28, 2015 by dialing
(320) 365-3844 ; Access Code: 337219 .
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, and Textron Systems. 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 under “RISK FACTORS” in our Annual Report on Form
10-K, 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; cybersecurity threats, including the potential
misappropriation of assets or sensitive information, corruption of data
or operational disruption; difficulty or unanticipated expenses in
connection with integrating acquired businesses; and the risk that
anticipated synergies and opportunities as a result of acquisitions will
not be realized or the risk that acquisitions do not perform as planned,
including, for example, the risk that acquired businesses will not
achieve revenue and profit projections.
|
|
|
|
|
|
|
|
|
|
TEXTRON INC.
Revenues by Segment and Reconciliation of Segment Profit to Net
Income
Three Months Ended April 4, 2015 and March 29, 2014
(Dollars in millions, except per share amounts)
(Unaudited)
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
April 4, 2015
|
|
|
March 29, 2014
|
REVENUES
|
|
|
|
|
|
|
|
|
|
MANUFACTURING:
|
|
|
|
|
|
|
|
|
Textron Aviation
|
|
|
|
|
$
|
1,051
|
|
|
|
$
|
785
|
|
Bell
|
|
|
813
|
|
|
|
|
873
|
|
Textron Systems
|
|
|
|
|
|
315
|
|
|
|
|
363
|
|
Industrial
|
|
|
872
|
|
|
|
|
797
|
|
|
|
|
|
|
|
|
3,051
|
|
|
|
|
2,818
|
|
|
|
|
|
|
|
|
|
|
|
FINANCE
|
|
|
|
|
|
|
22
|
|
|
|
|
29
|
|
Total revenues
|
|
|
|
|
$
|
3,073
|
|
|
|
$
|
2,847
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT PROFIT
|
|
|
|
|
|
|
|
|
MANUFACTURING:
|
|
|
|
|
|
|
|
|
Textron Aviation (a)
|
|
|
|
|
$
|
67
|
|
|
|
$
|
14
|
|
Bell
|
|
|
|
|
|
76
|
|
|
|
|
96
|
|
Textron Systems
|
|
|
|
|
|
28
|
|
|
|
|
39
|
|
Industrial
|
|
|
|
|
|
82
|
|
|
|
|
66
|
|
|
|
|
|
|
|
|
253
|
|
|
|
|
215
|
|
|
|
|
|
|
|
|
|
|
|
FINANCE
|
|
|
|
|
|
|
6
|
|
|
|
|
4
|
|
Segment Profit
|
|
|
|
|
|
259
|
|
|
|
|
219
|
|
|
|
|
|
|
|
|
|
|
|
Corporate expenses and other, net
|
|
|
|
|
(42
|
)
|
|
|
|
(43
|
)
|
Interest expense, net for Manufacturing group
|
|
|
|
(33
|
)
|
|
|
|
(35
|
)
|
Acquisition and restructuring costs (b)
|
|
|
-
|
|
|
|
|
(16
|
)
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations before income taxes
|
|
|
184
|
|
|
|
|
125
|
|
Income tax expense
|
|
|
|
|
|
(56
|
)
|
|
|
|
(38
|
)
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
|
|
|
128
|
|
|
|
|
87
|
|
Discontinued operations, net of income taxes
|
|
|
|
-
|
|
|
|
|
(2
|
)
|
Net income
|
|
$
|
128
|
|
|
|
$
|
85
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
|
|
$
|
0.46
|
|
|
|
$
|
0.31
|
|
Discontinued operations, net of income taxes
|
|
|
|
-
|
|
|
|
|
(0.01
|
)
|
Net income
|
|
|
|
|
|
$
|
0.46
|
|
|
|
$
|
0.30
|
|
|
|
|
|
|
|
|
|
|
|
Diluted average shares outstanding
|
|
|
|
280,077,000
|
|
|
|
|
283,327,000
|
|
|
|
|
|
|
|
|
|
|
|
(a) Textron Aviation's segment profit for the three months ended April
4, 2015 and March 29, 2014 includes $5 million and $12 million,
respectively, related to fair value step-up adjustments of acquired
inventories sold during the periods.
(b) Acquisition and restructuring costs for the three months ended March
29, 2014 include $11 million of transaction costs and $5 million of
restructuring costs incurred related to the acquisition of Beech
Holdings, LLC, the parent of Beechcraft Corporation, which was completed
on March 14, 2014.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Textron Inc.
Condensed Consolidated Balance Sheets
(In
millions)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April 4,
2015
|
|
|
|
|
January 3,
2015
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
Cash and equivalents
|
|
|
|
$
|
561
|
|
|
|
$
|
731
|
Accounts receivable, net
|
|
|
|
|
1,133
|
|
|
|
|
1,035
|
Inventories
|
|
|
|
|
4,236
|
|
|
|
|
3,928
|
Other current assets
|
|
|
|
|
563
|
|
|
|
|
579
|
Net property, plant and equipment
|
|
|
|
|
2,460
|
|
|
|
|
2,497
|
Goodwill
|
|
|
|
|
2,013
|
|
|
|
|
2,027
|
Other assets
|
|
|
|
|
2,268
|
|
|
|
|
2,279
|
Finance group assets
|
|
|
|
|
1,504
|
|
|
|
|
1,529
|
Total Assets
|
|
|
|
$
|
14,738
|
|
|
|
$
|
14,605
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity
|
|
|
|
|
|
|
|
|
|
|
Short-term debt and current portion of long-term debt
|
|
|
|
$
|
34
|
|
|
|
$
|
8
|
Other current liabilities
|
|
|
|
|
3,700
|
|
|
|
|
3,630
|
Other liabilities
|
|
|
|
|
2,548
|
|
|
|
|
2,587
|
Long-term debt
|
|
|
|
|
2,790
|
|
|
|
|
2,803
|
Finance group liabilities
|
|
|
|
|
1,276
|
|
|
|
|
1,305
|
Total Liabilities
|
|
|
|
|
10,348
|
|
|
|
|
10,333
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Shareholders' Equity
|
|
|
|
|
4,390
|
|
|
|
|
4,272
|
Total Liabilities and Shareholders' Equity
|
|
|
|
$
|
14,738
|
|
|
|
$
|
14,605
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TEXTRON INC.
MANUFACTURING GROUP
Condensed
Schedule of Cash Flows and Manufacturing Cash Flow GAAP to Non-GAAP
Reconciliations
(In millions)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
April 4,
|
|
|
March 29,
|
|
|
|
|
|
2015
|
|
|
|
|
2014
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
|
|
$
|
124
|
|
|
|
|
$
|
84
|
|
Depreciation and amortization
|
|
|
|
|
108
|
|
|
|
|
|
95
|
|
Changes in working capital
|
|
|
|
|
(305
|
)
|
|
|
|
|
(263
|
)
|
Changes in other assets and liabilities and non-cash items
|
|
|
|
|
6
|
|
|
|
|
|
20
|
|
Net cash from operating activities of continuing operations
|
|
|
|
|
(67
|
)
|
|
|
|
|
(64
|
)
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
|
|
(79
|
)
|
|
|
|
|
(66
|
)
|
Net cash used in acquisitions
|
|
|
|
|
(32
|
)
|
|
|
|
|
(1,489
|
)
|
Proceeds from the sale of property, plant and equipment
|
|
|
|
|
1
|
|
|
|
|
|
2
|
|
Other investing activities, net
|
|
|
|
|
(7
|
)
|
|
|
|
|
(3
|
)
|
Net cash from investing activities
|
|
|
|
|
(117
|
)
|
|
|
|
|
(1,556
|
)
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
Increase in short-term debt
|
|
|
|
|
25
|
|
|
|
|
|
184
|
|
Proceeds from long-term debt
|
|
|
|
|
-
|
|
|
|
|
|
1,093
|
|
Purchases of Textron common stock
|
|
|
|
|
-
|
|
|
|
|
|
(150
|
)
|
Other financing activities, net
|
|
|
|
|
(4
|
)
|
|
|
|
|
13
|
|
Net cash from financing activities
|
|
|
|
|
21
|
|
|
|
|
|
1,140
|
|
Total cash flows from continuing operations
|
|
|
|
|
(163
|
)
|
|
|
|
|
(480
|
)
|
Total cash flows from discontinued operations
|
|
|
|
|
(2
|
)
|
|
|
|
|
(1
|
)
|
Effect of exchange rate changes on cash and equivalents
|
|
|
|
|
(5
|
)
|
|
|
|
|
-
|
|
Net change in cash and equivalents
|
|
|
|
|
(170
|
)
|
|
|
|
|
(481
|
)
|
Cash and equivalents at beginning of period
|
|
|
|
|
731
|
|
|
|
|
|
1,163
|
|
Cash and equivalents at end of period
|
|
|
|
$
|
561
|
|
|
|
|
$
|
682
|
|
|
|
|
|
|
|
|
|
|
Manufacturing Cash Flow GAAP to Non-GAAP Reconciliations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash from operating activities of continuing operations - GAAP
|
|
|
|
$
|
(67
|
)
|
|
|
|
$
|
(64
|
)
|
Less: Capital expenditures
|
|
|
|
|
(79
|
)
|
|
|
|
|
(66
|
)
|
Plus: Total pension contributions
|
|
|
|
|
20
|
|
|
|
|
|
17
|
|
Proceeds from the sale of property, plant and equipment
|
|
|
|
|
1
|
|
|
|
|
|
2
|
|
Manufacturing cash flow before pension contributions- Non-GAAP
|
|
|
|
$
|
(125
|
)
|
|
|
|
$
|
(111
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015 Outlook
|
Net cash from operating activities of continuing operations - GAAP
|
|
|
|
$
|
944 - $ 1,044
|
Less: Capital expenditures
|
|
|
|
|
(475)
|
Plus: Total pension contributions
|
|
|
|
|
80
|
Proceeds from the sale of property, plant and equipment
|
|
|
|
|
1
|
Manufacturing cash flow before pension contributions- Non-GAAP
|
|
|
|
$
|
550 - $ 650
|
|
|
|
|
|
|
|
|
|
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
(In millions)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
April 4,
|
|
|
March 29,
|
|
|
|
|
2015
|
|
|
2014
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
|
|
$
|
128
|
|
|
|
|
$
|
87
|
|
Depreciation and amortization
|
|
|
|
|
110
|
|
|
|
|
|
98
|
|
Changes in working capital
|
|
|
|
|
(269
|
)
|
|
|
|
|
(233
|
)
|
Changes in other assets and liabilities and non-cash items
|
|
|
|
|
12
|
|
|
|
|
|
22
|
|
Net cash from operating activities of continuing operations
|
|
|
|
|
(19
|
)
|
|
|
|
|
(26
|
)
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
|
|
(79
|
)
|
|
|
|
|
(66
|
)
|
Net cash used in acquisitions
|
|
|
|
|
(32
|
)
|
|
|
|
|
(1,489
|
)
|
Finance receivables repaid
|
|
|
|
|
31
|
|
|
|
|
|
33
|
|
Other investing activities, net
|
|
|
|
|
23
|
|
|
|
|
|
2
|
|
Net cash from investing activities
|
|
|
|
|
(57
|
)
|
|
|
|
|
(1,520
|
)
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
Principal payments on long-term and nonrecourse debt
|
|
|
|
|
(70
|
)
|
|
|
|
|
(62
|
)
|
Increase in short-term debt
|
|
|
|
|
25
|
|
|
|
|
|
184
|
|
Proceeds from long-term debt
|
|
|
|
|
9
|
|
|
|
|
|
1,131
|
|
Purchases of Textron common stock
|
|
|
|
|
-
|
|
|
|
|
|
(150
|
)
|
Other financing activities, net
|
|
|
|
|
5
|
|
|
|
|
|
13
|
|
Net cash from financing activities
|
|
|
|
|
(31
|
)
|
|
|
|
|
1,116
|
|
Total cash flows from continuing operations
|
|
|
|
|
(107
|
)
|
|
|
|
|
(430
|
)
|
Total cash flows from discontinued operations
|
|
|
|
|
(2
|
)
|
|
|
|
|
(1
|
)
|
Effect of exchange rate changes on cash and equivalents
|
|
|
|
|
(5
|
)
|
|
|
|
|
-
|
|
Net change in cash and equivalents
|
|
|
|
|
(114
|
)
|
|
|
|
|
(431
|
)
|
Cash and equivalents at beginning of period
|
|
|
|
|
822
|
|
|
|
|
|
1,211
|
|
Cash and equivalents at end of period
|
|
|
|
$
|
708
|
|
|
|
|
$
|
780
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|

Source: Textron