BreezeEastern Corp. Reports Operating Results (10-Q)
Breezeeastern has a market cap of $80.6 million; its shares were traded at around $8.51 with a P/E ratio of 16.1 and P/S ratio of 1.
Highlight of Business Operations:Net income for the three and six month periods ended September 30, 2011, includes stock-based compensation expense of $111 net of tax, or $0.01 per diluted share, and $190 net of tax, or $0.02 per diluted share, respectively. Net income for the three and six month periods ended September 30, 2010, includes stock-based compensation expense of $44 net of tax, or $0.00 per diluted share, and $114 net of tax, or $0.01 per diluted share, respectively. Stock based compensation expense is included in selling, general and administrative expenses.
Senior Credit Facility -The Company has a 60-month, $33,000 senior credit facility consisting of a $10,000 revolving line of credit (the Revolver) and, at the inception of the credit agreement in August 2008, a term loan totaling $23,000 (the Senior Credit Facility). The term loan requires quarterly principal payments of $821 over the life of the loan and $6,571 due at maturity in August 2013. During Fiscal 2011, the Company accelerated term-loan payments by making four quarterly term-loan pre-payments totaling $3,286. During the first quarter of Fiscal 2012, the Company made one $821 term loan repayment by pre-paying the amount due in April 2012. Accordingly, the balance sheet reflects $821 of current maturities due under the term loan of the Senior Credit Facility as of September 30, 2011.
Backlog. Backlog at September 30, 2011 was $124,232 compared with $131,151 at March 31, 2011 and $136,635 at September 30, 2010. The backlog at September 30, 2011, March 31, 2011, and September 30, 2010 includes $71,343, $71,343, and $69,699, respectively, for the Airbus A400M military transport aircraft that was once scheduled to commence shipping in late calendar 2009 and continue through 2020. Airbus now indicates shipments are likely to commence in calendar 2012.
Net Sales. Fiscal 2012 first six months net sales of $36,128 increased by $4,482, or 14.2%, from net sales of $31,646 in the first six months of Fiscal 2011. Fiscal 2012 products sales of $27,366 were $3,493, or 14.6%, above prior year primarily due to increased new equipment volume of $4,563 resulting primarily from U.S. military, partly offset by lower spare parts volume because the prior-year period included large sales to the U.S. military.
Operating Expenses. Total operating expenses were $12,103, or 33.5% of net sales, in the first six months of Fiscal 2012 compared with $9,657 or 30.5% of net sales in the comparable prior year period. Selling, general, and administrative (SG&A) expenses were $7,755 in the Fiscal 2012 first six months compared with $6,591 in the first six months of Fiscal 2011, an increase of $1,164. The increase is primarily due to costs for business strategy development, a Shareholder Rights Plan (discussed in Note 15 of the Notes to Condensed Consolidated Financial Statements contained in Part I, Item 1 of this report), and sales commissions. As a percent of sales, SG&A was 21.5% in the Fiscal 2012 first six months versus 20.8% in the comparable period last year.
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