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BE Aerospace Inc. Reports Operating Results (10-K)

February 24, 2012 | About:
10qk

10qk

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BE Aerospace Inc. (BEAV) filed Annual Report for the period ended 2011-12-31.

Be Aerospace has a market cap of $4.75 billion; its shares were traded at around $46.35 with a P/E ratio of 20.9 and P/S ratio of 1.9.

Highlight of Business Operations:

We work closely with commercial airlines, business jet and aerospace manufacturers and global leasing companies to improve existing products and identify customers' emerging needs. Our expenditures in research, development and engineering totaled $158.6 million, $112.8 million and $102.6 million for the years ended December 31, 2011, 2010 and 2009, respectively, representing 6.3%, 5.7% and 5.3% of revenues, respectively, for each of those years. We employed 1,198 professionals in engineering, research and development and program management as of December 31, 2011. We believe, based on our experience in the industry, that we have the largest engineering organization in the cabin interior products industry, with mechanical, electrical, electronic and software design skills, as well as substantial expertise in program management, materials composition and custom cabin interior layout design and certification.

As of December 31, 2011, our direct sales, marketing and product support organizations consisted of 756 employees. In addition, we currently retain 69 independent sales representatives. Our sales to non-U.S. customers were approximately $1.2 billion and $1.0 billion during the years ended December 31, 2011 and 2010, respectively which represents approximately 48% and 49% of revenues, respectively. Approximately 68% of our total revenues were derived from airlines, aircraft leasing companies, MROs, and other commercial aircraft operators during each of the two years ended December 31, 2011. Approximately 49% and 55% of our revenues during the years ended December 31, 2011 and 2010, respectively, were from the aftermarket.

For the year ended December 31, 2010, CAS revenues of $997.5 increased 9.5% as compared with 2009. 2010 operating earnings and operating margin were $148.7 and 14.9%, respectively, and increased by $27.7, or 22.9%, as compared with 2009. The increase in 2010 operating earnings was primarily due to the higher sales level, an improved mix of products, including a double digit increase in spares revenue and global sourcing initiatives of approximately $18.0. CAS 2010 operating results include $4.8 of acquisition and severance related costs. The TSI acquisition was completed on October 26, 2010.

CMS 2010 revenues of $772.9 declined 3.2% as compared with the prior year, primarily as a result of a 14.1% decrease in new business jet deliveries, deferred maintenance and inventory destocking by the airlines, and in particular, lower revenues in the first quarter of 2010 as compared with the first quarter of 2009. CMS operating earnings and operating margin of $153.2 and 19.8%, respectively, increased by 1.5% and 90 basis points, respectively, as compared with 2009. CMS 2010 operating results include $4.4 of acquisition and severance related costs. The Satair acquisition was completed on October 27, 2010.

As of December 31, 2011, cash and cash equivalents were $303.5 as compared to $78.7 at December 31, 2010. Cash provided by operating activities was $316.9 for the year ended December 31, 2011 as compared to $295.8 for the year ended December 31, 2010. The primary sources of cash provided by operating activities during 2011 were net earnings of $227.8, adjusted by depreciation and amortization of $62.1, non-cash compensation of $26.0, and a deferred income tax provision of $58.4. The primary use of cash in operating activities during the year ended December 31, 2011 was related to a $116.3 net increase in inventories, a $49.4 increase in accounts receivable and $30.8 of tax benefits realized from the prior exercises of employee stock options. The primary sources of cash provided by operating activities during 2010 were net earnings of $143.3, adjusted by depreciation and amortization of $52.4, non-cash compensation of $30.6, debt prepayment costs of $12.4, and a deferred income tax provision of $45.3. The primary use of cash in operating activities during the year ended December 31, 2010 was related to a $35.7 net increase in inventories, a $34.2 increase in accounts receivable and $10.4 of tax benefits realized from the prior exercises of employee stock options.

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