Spirit AeroSystems reports USD 1.1bn in Q1 2020 revenue

Spirit AeroSystems Holdings, Inc. [NYSE: SPR] has reported USD 1.1 billion in first quarter of 2020, down from the same period of 2019, primarily due to the 737 MAX production suspension directed by Boeing that began on January 1, 2020, the company said.

Deliveries decreased to 324 shipsets during the first quarter of 2020 compared to 453 shipsets in the same period of 2019, including Boeing 737 MAX deliveries of 18 shipsets compared to 152 shipsets in the same period of the prior year. (Table 1)

Spirit´s backlog at the end of the first quarter of 2020 was approximately USD 42 billion, down USD 1 billion from the previous quarter, with work packages on all commercial platforms in the Boeing and Airbus backlog.

Operating loss for the first quarter of 2020 was USD (167.5) million, down compared to operating income of USD 233 million in the same period of 2019.

Spirit recognized abnormal costs of USD 25.4 million resulting from the COVID-19 Boeing production suspension that began in March 2020. Further, Spirit recognized a non-cash expense of USD 69.2 million resulting from the voluntary retirement program (VRP) offered during the first quarter of 2020. In addition to the expenses described above, Spirit recognized forward loss charges of USD 19.7 million in the first quarter of 2020 related to the Boeing 747, 787, Airbus A350, and BR725 programs.

First quarter EPS was USD (1.57), compared to USD 1.55 in the same period of 2019. First quarter 2020 adjusted EPS was USD (0.79), excluding the impacts of planned acquisitions, restructuring costs and the VRP offered during the first quarter of 2020, compared to USD 1.68 in the same period of 2019, adjusted to exclude the impact of the planned Asco acquisition.

Cash from operations in the first quarter of 2020 was USD (331) million, down from USD 242 million in the same quarter last year, primarily due to negative impacts of working capital requirements largely driven by supplier payments made following the 737 MAX production suspension, partially offset by USD 215 million received related to the February 2020 memorandum of agreement with Boeing.

On April 13, 2020, Spirit entered into an amendment to its Second Amended and Restated Credit Agreement. The primary purpose of this amendment was to permit Spirit to raise second priority secured indebtedness and provide flexibility to account for market conditions.

On April 17, 2020, Spirit raised USD 1.2 billion aggregate principal amount of 7.5% senior secured second lien notes due 2025 in a private offering. Spirit used the proceeds to pay its full revolver of USD 800 million on April 30, 2020, and will use the remaining USD 400 million for general corporate purposes.

In connection with the closing of the notes offering, the commitments under Spirit´s senior unsecured USD 375 million short-term delayed draw term loan facility, dated as of February 24, 2020, were canceled in full and the facility was terminated.