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BreezeEastern Corp. Reports Operating Results (10-Q)

October 29, 2009 | About:
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10qk

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BreezeEastern Corp. (BZC) filed Quarterly Report for the period ended 2009-09-27.

Breeze-Eastern Corporation is the world's leading designer and manufacturer of sophisticated lifting devices for military and civilian aircraft including rescue hoists cargo hooks and weapons-lifting systems. Breeze-Eastern is the worldwide supplier of electric and hydraulic Rescue Hoist Systems for helicopters. On many customer programs companies products are supplied on a sole source basis and are utilized throughout the long life-cycle of these products. There position principally as a sole source supplier continues as they support there customers with the sales of spare parts and product upgrades. Breeze-Eastern Corporation aggressively updates its existing products in keeping with changing mission and customer requirements to maintain and increase market share for systems products and spare parts. These qualified and proprietary products support our long-term growth objectives. Breezeeastern Corp. has a market cap of $56.2 million; its shares were traded at around $6 with a P/E ratio of 11.1 and P/S ratio of 0.7.

Highlight of Business Operations:

Net Sales. Our net sales increased to $16.4 million in the second quarter of fiscal 2010, an increase of $1.9 million from net sales of $14.5 million in the second quarter of fiscal 2009. The $1.7 million increase in sales of new equipment for the second quarter of fiscal 2010 as compared to the same period last year was driven primarily by $2.2 million higher shipments in the hoist and winch operating segment and $0.8 million in the cargo hook operating segment. These increases were partially offset by having no sales of new equipment in the weapons handling operating segment during the second quarter of fiscal 2010 as compared to $1.4 million in shipments during the second quarter of fiscal 2009 for the High Mobility Artillery Rocket System (HIMARS).

Loss on Extinguishment of Debt. In the second quarter of fiscal 2009, we refinanced and paid in full the Former Senior Credit Facility with a new 60 month, $33.0 million Senior Credit Facility consisting of a $10.0 million revolving credit facility, and term loans totaling $23.0 million. As a result of this refinancing, in the second quarter of fiscal 2009, we recorded a pre-tax charge of $0.6 million consisting of $0.2 million for the write-off of unamortized debt issue costs and $0.4 million for the payment of a pre-payment premium associated with the payoff of the Former Senior Credit Facility.

New orders. New orders received during the second quarter of fiscal 2010 totaled $19.0 million, as compared with $18.4 million in the second quarter of fiscal 2009. Orders for new equipment in the hoist and winch operating segment increased $6.0 million in the second quarter of fiscal 2010 as compared with the second quarter of fiscal 2009. The increase in orders for new equipment in the hoist and winch operating segment is attributable to a $2.2 million order relating to the Airbus A400M military transport aircraft, a $2.0 million order for the manufacture of the electric rescue hoist system for the UH-60 Black Hawk MEDEVAC helicopter and $1.9 million in orders for the A109, A119 and AW139 Programs. Orders for new equipment in the cargo hook operating segment decreased $6.1 million for the second quarter of fiscal 2010 as compared to the same prior year period. The larger amount of new equipment orders in that operating segment in the prior period is mainly attributable to the order received in the second quarter of fiscal 2009 for the manufacture of the cargo hook for the CH-47F Chinook helicopter.

Net Sales. Our net sales of $29.8 million for the first six months of fiscal 2010 increased $1.3 million from sales of $28.5 million in the first six months of fiscal 2009. The $0.9 million increase in sales of new equipment for the first six months of fiscal 2009 as compared to the same period last year was driven by higher shipments of $2.0 million in the hoist and winch operating segment and $0.4 million in the cargo hook operating segment. These increases were minimized by having no sales of new equipment in the weapons handling operating segment during the first six months of fiscal 2010 as compared to $1.4 million in shipments during the first six months of fiscal 2009 for the High Mobility Artillery Rocket System (HIMARS).

New orders. New orders received during the first six months of fiscal 2010 decreased $6.8 million to $34.6 million, as compared with $41.4 million in the first six months of fiscal 2009. Orders for new equipment in the cargo hook operating segment decreased $10.2 million. The higher orders for new equipment in such operating segment during the prior period was partially the result of a $4.9 million order for the manufacture of the cargo hook for the CH-47F Chinook helicopter received in the first six months of fiscal 2009. Orders for new equipment in the hoist and winch operating segment increased $2.3 million in the first six months of fiscal 2010 as compared to the same period in the prior year. Orders received in the first six months of fiscal 2010 for new equipment in the hoist and winch operating segment include $2.9 million for the system design and development of a recovery winch for a fixed wing aircraft being developed for the U.S. Army and Air Force under the Joint Cargo Aircraft Program, a $2.2 million order relating to the Airbus A400M military transport aircraft and $4.6 million in orders for the A109, A119 and AW139 Programs.

During the second quarter of fiscal 2009, we refinanced and paid in full the Former Senior Credit Facility with a new 60 month, $33.0 million Senior Credit Facility consisting of a $10.0 million revolving line of credit and term loans totaling $23.0 million. At September 27, 2009, there were $2.4 million in outstanding borrowings, $1.0 million in outstanding (standby) letters of credit, and $6.6 million in availability under the revolving portion of the Senior Credit Facility. At September 27, 2009, we were in compliance with the provisions of the Senior Credit Facility.

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