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BE Aerospace Inc. Reports Operating Results (10-K)
Posted by: gurufocus (IP Logged)
Date: February 24, 2011 11:24PM
BE Aerospace Inc. (BEAV) filed Annual Report for the period ended 2010-12-31. Be Aerospace Inc. has a market cap of $3.59 billion; its shares were traded at around $35.11 with a P/E ratio of 21.8 and P/S ratio of 1.8.Hedge Fund Gurus that owns BEAV: Joel Greenblatt of Gotham Capital, Jim Simons of Renaissance Technologies LLC, Steven Cohen of SAC Capital Advisors. Mutual Fund and Other Gurus that owns BEAV: Arnold Schneider of Schneider Capital Management, John Buckingham of Al Frank Asset Management, Inc., RS Investment Management, Pioneer Investments, Jeremy Grantham of GMO LLC.
Highlight of Business Operations:
The aggregate market value of the registrant's voting stock held by non-affiliates was approximately $2,605.9 million on June 30, 2010 based on the closing sales price of the registrant's common stock as reported on the NASDAQ Global Select Market as of such date, which is the last business day of the registrant's most recently completed second fiscal quarter. Shares of common stock held by executive officers and directors and persons who own 5% or more of outstanding common stock have been excluded since such persons may be deemed affiliates. This determination of affiliate status is not a determination for any other purpose. The number of shares of the registrant's common stock, $.01 par value, outstanding as of February 22, 2011 was 103,103,507 shares.
Since our organization as a corporation in Delaware in 1987, we have substantially expanded the size, scope and nature of our business as a result of a number of acquisitions. Between 1989 and 2008, we completed 24 acquisitions, for an aggregate purchase price of approximately $1.2 billion. We believe these acquisitions enabled us to position ourselves as a preferred global supplier to our customers. During this period we consolidated facilities and product lines, implemented lean manufacturing and continuous improvement programs and invested in our information technology. All of these efforts allowed us to continually improve our productivity and expand our operating margins. For example, during the three-year period ended December 31, 2008 (exclusive of a goodwill and intangible asset impairment charge in 2008), we were able to expand our operating margins by 570 basis points. In 2008, we completed the acquisition of the consumables solutions distribution business (“HCS”) from Honeywell International Inc. (“Honeywell”). The combination of HCS with our existing consumables products business created the world s leading distributor of aerospace fasteners and consumables. Through this acquisition, we have eliminated four facilities and significantly expanded operating margins in our consumables segment. In October 2010, we acquired TSI Group, Inc. (“TSI”) and the aerospace fastener distribution business of Satair A/S (“Satair”) for a purchase price of approximately $310 million and $162 million, respectively. TSI is a market leader in the design, engineering and manufacturing of customized, fully integrated, thermal management and interconnect solutions that address complex power management requirements of a broad range of customers in the aerospace and defense industries. TSI is included as a component of our commercial aircraft segment. Satair is a distributor of consumables to European and Asia Pacific aerospace manufacturers and their suppliers and is included as a component of our consumables management segment.
Based on industry sources and studies, we estimate that during 2010, the commercial and business jet cabin interior products industry, for the principal products of the type which we manufacture, exclusive of service revenues, had annual sales of approximately $2.2 billion and the aerospace fastener and consumables industry had annual sales of approximately $3.9 billion. We estimate that the total worldwide installed base of commercial and general aviation aircraft cabin interior products that are the principal type of products that we manufacture was valued at replacement prices, at approximately $17.3 billion as of December 31, 2010.
Importantly, international traffic was up 8.2% in 2010 as compared with 2009, and premium tickets sold (in first and business classes on long-haul routes) increased by 9.1%. The airline industry increased airline capacity by 4.4% in the face of the 5.5% increase in global traffic. As a result, the airlines are operating at very profitable levels. In fact, airline load factors, yields and profitability are at near record levels for the industry. IATA expects the airline industry to generate approximately $15.1 billion in global airline profits in 2010, a $25.0 billion improvement over the $9.9 billion in losses generated during 2009. In addition, IATA expects the airline industry to report a profit of $9.1 billion in 2011.
Stocks Discussed: BEAV,