Hexcel(US:HXL)2024-07-18 11:30Financial Performance - Net sales for Q2 2024 were $500.4 million, a 10.1% increase from $454.3 million in Q2 2023, with a 6.7% increase for the first half of 2024 compared to the same period last year[77]. - Operating income for Q2 2024 was $71.8 million, a 17.1% increase from $61.3 million in Q2 2023, with a slight increase to $124.7 million for the first half of 2024 compared to $124.1 million in the same period last year[90]. - GAAP operating income for the quarter ended June 30, 2024, was $71.8 million, compared to $61.3 million in the same quarter of 2023[110]. - Adjusted net income (non-GAAP) for the first six months of 2024 was $87.6 million, compared to $85.7 million in the same period last year[110]. Sales Performance - Commercial Aerospace sales increased by 21.3% to $320.7 million in Q2 2024, and by 13.0% to $620.0 million for the first half of 2024, driven by growth in widebody aircraft[83]. - Engineered Products segment saw a 21.1% increase in Q2 2024 sales to $91.8 million, with a 18.9% increase to $184.6 million for the first six months of 2024, primarily due to higher Commercial Aerospace sales[82]. - The Industrial market experienced a significant decline, with sales down 22.3% to $40.8 million in Q2 2024 and down 24.9% to $74.7 million for the first half of 2024[85]. Margins and Expenses - Gross margin for Q2 2024 was 25.3%, up from 24.4% in Q2 2023, while the first half of 2024 gross margin was 25.2%, down from 26.2% in the prior year[87]. - Research and technology expenses increased by 10.5% to $14.7 million in Q2 2024, driven by higher employee-related costs and development project expenses[89]. - Interest expense decreased by 12.0% to $8.1 million in Q2 2024 and by 21.5% to $14.6 million for the first half of 2024, attributed to lower average debt levels[92]. Cash Flow and Financing - Net cash provided by operating activities for the first six months of 2024 was $37.2 million, an increase from $30.1 million in the same period last year[101]. - Capital expenditures for the first six months of 2024 were $51.6 million, down from $74.8 million in the same period last year[102]. - Net cash used for financing activities was $136.0 million for the first six months of 2024, compared to net cash provided of $34.0 million in the same period in 2023[103]. - Free cash flow (non-GAAP) for the first six months of 2024 was $(14.4) million, an improvement from $(44.7) million in the same period last year[111]. Debt and Liquidity - Cash on hand as of June 30, 2024, was $75.4 million, down from $227.0 million at December 31, 2023, while total debt increased to $795.0 million from $699.5 million[97]. - As of June 30, 2024, total borrowings under the senior unsecured credit facility were $95.0 million, with undrawn availability of $655.0 million[98]. - The next significant scheduled debt maturity will occur in August 2025 when the 4.7% Senior Unsecured Notes are due[104]. Shareholder Returns - The remaining authorization under the share repurchase program as of June 30, 2024, was $285.3 million[100]. - Quarterly dividend declared was $0.15 per share, payable on August 9, 2024[100]. Challenges and Outlook - The company continues to face challenges related to global logistics, supply chains, and inflationary pressures, which may impact future financial results[76].