Hexcel Financial Table
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Hexcel Corporation and Subsidiaries
Condensed Consolidated Statements of Operations
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Unaudited
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Quarter Ended December 31, Year Ended December 31,
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Pro Forma
(In millions, except
per share data) 1999 1998 1999 1998 1998
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Net sales $268.6 $303.5 $1,151.5 $1,234.8 $1,089.0
Cost of sales 214.6 231.4 909.0 929.5 817.7
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Gross margin 54.0 72.1 242.5 305.3 271.3
Selling, general
and administrative
expenses 31.3 35.8 128.7 132.8 117.9
Research and
technology expenses 6.2 6.7 24.8 25.3 23.7
Business acquisition
and consolidation
expenses 2.3 12.0 20.1 12.7 12.7
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Operating income 14.2 17.6 68.9 134.5 117.0
Interest expense 18.0 15.5 73.9 64.6 38.7
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Income (loss)
before income taxes (3.8) 2.1 (5.0) 69.9 78.3
Recovery of
(provision for) income
taxes 1.3 (0.7) 1.7 (25.3) (28.4)
Equity in income (loss)
and write-down of an
investment in
affiliated companies 0.2 0.5 (20.0) 4.9 0.5
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Net income (loss) $ (2.7) $ 1.9 $ (23.3) $ 49.5 $ 50.4
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Net income
(loss) per share:
Basic $(0.07) $ 0.05 $ (0.64) $ 1.35 $ 1.38
Diluted (0.07) 0.05 (0.64) 1.22 1.24
Diluted, excluding
goodwill
amortization (0.01) 0.11 (0.40) 1.40 1.34
Weighted average
shares:
Basic 36.5 36.3 36.4 36.7 36.7
Diluted 36.5 36.8 36.4 45.7 45.7
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The Company's convertible subordinated notes, due 2003, and its
convertible subordinated debentures, due 2011, were excluded from the
1999 computations of net loss per diluted share, as they were
antidilutive.
Hexcel Corporation and Subsidiaries
Net Sales to Third-Party Customers by Product Group and Market Segment
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Unaudited
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Commercial Space & Industrial &
(In millions) Aerospace Defense Electronics Recreation Total
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Fourth Quarter
1999 Net Sales
Reinforcement products $ 10.9 $ 3.0 $ 41.3 $ 25.3 $ 80.5
Composite materials 85.6 19.7 - 30.5 135.8
Engineered products 49.5 2.8 - - 52.3
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Total $ 146.0 $ 25.5 $ 41.3 $ 55.8 $ 268.6
55% 9% 15% 21% 100%
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Fourth Quarter
1998 Net Sales
Reinforcement products $ 14.5 $ 4.8 $ 45.2 $ 22.9 $ 87.4
Composite materials 110.3 25.0 - 27.6 162.9
Engineered products 49.7 3.5 - - 53.2
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Total $ 174.5 $ 33.3 $ 45.2 $ 50.5 $ 303.5
57% 11% 15% 17% 100%
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Third Quarter
1999 Net Sales
Reinforcement products $ 12.3 $ 4.2 $ 40.6 $ 24.2 $ 81.3
Composite materials 81.2 25.7 - 27.7 134.6
Engineered products 54.7 3.5 - - 58.2
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Total $ 148.2 $ 33.4 $ 40.6 $ 51.9 $ 274.1
54% 12% 15% 19% 100%
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1999 Net Sales
Reinforcement products $ 52.0 $ 18.2 $ 166.4 $ 94.3 $ 330.9
Composite materials 387.9 101.0 - 117.0 605.9
Engineered products 201.7 13.0 - - 214.7
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Total $ 641.6 $ 132.2 $ 166.4 $ 211.3 $1,151.5
57% 11% 14% 18% 100%
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1998 Pro Forma Net Sales
Reinforcement products $ 61.6 $ 26.4 $ 179.3 $ 103.3 $ 370.6
Composite materials 450.6 104.0 - 103.4 658.0
Engineered products 195.0 11.2 - - 206.2
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Total $ 707.2 $ 141.6 $ 179.3 $ 206.7 $1,234.8
57% 11% 15% 17% 100%
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Hexcel Corporation and Subsidiaries
Segment Data
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Unaudited
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Reinforcement Composite Engineered Corporate
(In millions) Products Materials Products & Other(a) Total
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Fourth Quarter 1999
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Net sales to
external customers $ 80.5 $ 135.8 $ 52.3 $ - $ 268.6
Intersegment sales 23.3 2.3 - - 25.6
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Total sales 103.8 138.1 52.3 - 294.2
Adjusted EBIT(b) 6.0 12.1 6.9 (8.5) 16.5
Depreciation
and amortization 7.8 4.9 0.8 0.7 14.2
BA&C expenses 0.4 1.5 - 0.4 2.3
Capital expenditures 3.6 4.3 0.7 0.3 8.9
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Fourth Quarter 1998
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Net sales to
external customers $ 87.4 $ 162.9 $ 53.2 $ - $ 303.5
Intersegment sales 29.6 2.5 - - 32.1
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Total sales 117.0 165.4 53.2 - 335.6
Adjusted EBIT 14.7 18.5 4.8 (8.5) 29.5
Depreciation and
amortization 10.6 4.2 1.0 0.8 16.6
BA&C expenses 1.7 3.1 5.5 1.7 12.0
Capital expenditures 9.9 9.9 4.7 0.4 24.9
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Third Quarter 1999
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Net sales to
external customers $ 81.3 $ 134.6 $ 58.2 $ - $ 274.1
Intersegment sales 24.9 2.1 - - 27.0
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Total sales 106.2 136.7 58.2 - 301.1
Adjusted EBIT 6.3 12.0 6.4 (8.4) 16.3
Depreciation and
amortization 8.9 5.1 0.9 0.8 15.7
BA&C expenses 3.5 8.2 1.3 0.6 13.6
Write-down of an
investment in an
affiliated company 20.0 - - - 20.0
Capital expenditures 3.0 4.2 1.5 - 8.7
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1999
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Net sales to
external customers $330.9 $ 605.9 $ 214.7 $ - $ 1,151.5
Intersegment sales 111.0 9.0 - - 120.0
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Total sales 441.9 614.9 214.7 - 1,271.5
Adjusted EBIT 33.7 68.0 22.4 (35.0) 89.1
Depreciation and
amortization 34.4 20.3 3.5 3.1 61.3
BA&C expenses 6.7 9.7 1.6 2.1 20.1
Write-down of an
investment in an
affiliated company 20.0 - - - 20.0
Capital expenditures 14.0 16.1 5.0 0.5 35.6
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Pro Forma 1998
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Net sales to
external customers $370.6 $ 658.0 $ 206.2 $ - $ 1,234.8
Intersegment sales 130.3 11.8 - - 142.1
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Total sales 500.9 669.8 206.2 - 1,376.9
Adjusted EBIT 74.9 82.7 20.5 (30.9) 147.2
Depreciation
and amortization 37.3 17.5 3.3 3.1 61.2
BA&C expenses 1.6 3.2 5.5 2.4 12.7
Capital expenditures 24.7 33.3 9.2 2.9 70.1
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(a) The company does not allocate corporate expenses to its business
segments.
(b) Consists of earnings before interest, taxes, business acquisition
and consolidation ("BA&C") expenses, and equity in income (loss)
and write-down of an investment in affiliated companies.
Hexcel Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
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Unaudited
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December 31, December 31,
(In millions, except per share data) 1999 1998
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Assets
Current assets:
Cash and cash equivalents $ 0.2 $ 7.5
Accounts receivable 158.6 188.4
Inventories 153.7 213.2
Prepaid expenses and other assets 5.1 10.1
Deferred tax asset 10.2 19.8
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Total current assets 327.8 439.0
Property, plant and equipment 614.5 628.5
Less accumulated depreciation (222.4) (195.9)
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Net property, plant and equipment 392.1 432.6
Goodwill and other purchased
intangibles, net of accumulated
amortization of $24.9 in 1999
and $11.7 in 1998 411.2 425.4
Investment in affiliated
companies and other assets 130.8 107.2
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Total assets $ 1,261.9 $ 1,404.2
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Liabilities and Stockholders' Equity
Current liabilities:
Notes payable and current
maturities of capital
lease obligations $ 34.3 $ 26.9
Accounts payable 80.3 81.8
Accrued liabilities 95.9 110.7
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Total current liabilities 210.5 219.4
Long-term notes payable
and capital lease obligations 712.5 802.4
Indebtedness to related parties 24.1 35.7
Other non-current liabilities 44.7 44.3
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Total liabilities 991.8 1,101.8
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Stockholders' equity:
Preferred stock, no par
value, 20.0 stock authorized,
no stock issued or outstanding
in 1999 and 1998 - -
Common stock, $0.01 par
value, 100.0 stock authorized,
stock issued and outstanding
of 37.4 in 1999 and 37.2 in 1998 0.4 0.4
Additional paid-in capital 273.6 271.5
Retained earnings 11.6 34.9
Accumulated other
comprehensive income (loss) (4.8) 6.3
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280.8 313.1
Less- treasury stock,
at cost, 0.8 stock
in 1999 and 1998 (10.7) (10.7)
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Total stockholders' equity 270.1 302.4
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Total liabilities and
stockholders' equity $ 1,261.9 $ 1,404.2
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Total debt, net of cash $ 770.7 $ 857.5
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Hexcel Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows
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Unaudited
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Quarter Ended December 31, Year Ended December 31,
(In millions) 1999 1998 1998 1999
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Cash flows from
operating activities
Net income (loss) $ (2.7) $ 1.9 $ (23.3) $ 50.4
Reconciliation to net
cash provided by operating
activities:
Depreciation and
amortization 14.2 16.6 61.3 47.5
Deferred income taxes (5.0) (0.6) (15.8) 6.9
Business acquisition and
consolidation expenses 2.3 12.0 20.1 12.7
Business acquisition and
consolidation payments (1.7) (1.7) (9.5) (8.7)
Equity in income and
write-down of an
investment in
affiliated companies 0.2 - 20.0 (0.5)
Working capital
changes and other 37.3 16.9 80.9 (14.5)
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Net cash provided
by operating activities 44.6 45.1 133.7 93.8
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Cash flows from
investing activities
Capital expenditures (8.9) (24.9) (35.6) (66.5)
Cash paid for the
Clark-Schwebel Business,
net of $5.0 of
acquired cash - (19.0) - (472.8)
Advances to affiliated
companies (2.7) - (4.7) (1.3)
Dividends received from
affiliated companies - 1.4 - 1.4
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Net cash used by
investing activities (11.6) (42.5) (40.3) (539.2)
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Cash flows from
financing activities
Proceeds (repayments) of
credit facilities, net (38.7) 5.1 (312.1) 459.7
Proceeds (repayments ) of
long-term debt and
capital lease
obligations, net (1.4) (2.1) 222.2 (1.5)
Debt issuance costs (0.2) - (11.0) (10.3)
Purchase of
treasury stock - - - (10.0)
Activity under
stock plans 0.1 0.6 1.4 2.8
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Net cash provided
(used) by financing
activities (40.2) 3.6 (99.5) 440.7
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Effect of exchange rate
changes on cash and
cash equivalents (0.4) (2.6) (1.2) 3.2
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Net increase (decrease)
in cash and cash equivalents (7.6) 3.6 (7.3) (1.5)
Cash and cash equivalents
at beginning of period 7.8 3.9 7.5 9.0
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Cash and cash
equivalents at end of year $ 0.2 $ 7.5 $ 0.2 $ 7.5
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Cash paid for:
Interest $ 7.6 $ 6.9 $ 59.1 $ 28.8
Taxes 10.0 6.7 17.7 26.4
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