Spirit AeroSystems(SPR) - 2024 Q3 - Quarterly Results

Financial Performance - Third quarter 2024 revenues were $1.5 billion, with an operating loss and EPS of $(4.07), compared to $(1.94) in the same period of 2023[1][7] - Net revenues for Q3 2024 were $1,471 million, a 2% increase from $1,439 million in Q3 2023, and a 10% increase year-to-date from $4,235 million to $4,665 million[21] - Operating loss for Q3 2024 was $350 million, representing 23.8% of revenues, compared to an operating loss of $134 million (9.3% of revenues) in Q3 2023[21] - Net loss for Q3 2024 was $477 million, or 32.4% of revenues, compared to a net loss of $204 million (14.2% of revenues) in Q3 2023[21] - Adjusted loss per share for Q3 2024 was $3.03, up from $1.42 in Q3 2023, reflecting a significant increase in losses[21] - For the nine months ended September 26, 2024, the net loss was $1,508.3 million, compared to a net loss of $691.6 million for the same period in 2023, representing an increase in loss of approximately 117.5%[30] - Adjusted diluted loss per share for the nine months ended September 26, 2024, was ($9.69), compared to ($4.59) for the same period in 2023, indicating a deterioration in performance[34] Cash Flow and Liquidity - Free cash flow usage in Q3 2024 was $323 million, a reduction from the previous quarter, with cash used in operations amounting to $276 million[1][2] - Cash used in operations for Q3 2024 was $276 million, a significant increase of 85% compared to $47 million in Q3 2023[23] - Net cash used in operating activities for the nine months ended September 26, 2024, was ($1,257.5) million, compared to ($339.5) million for the same period in 2023, showing a substantial increase in cash usage[30] - Cash and cash equivalents decreased to $217.6 million as of September 26, 2024, down from $823.5 million at the end of the previous year[29] - Cash, cash equivalents, and restricted cash at the end of the period was $246.8 million, down from $396.5 million at the end of the same period in 2023, indicating a decrease of approximately 37.7%[30] - Proceeds from the issuance of debt for the nine months ended September 26, 2024, were $359.2 million, a significant increase from $12.7 million in the same period in 2023[30] Operational Highlights - The company’s backlog at the end of Q3 2024 was approximately $48 billion, including work packages on all commercial platforms in the Airbus and Boeing backlog[5] - Total shipset deliveries for Q3 2024 were 332, unchanged from Q3 2023, with Boeing deliveries at 88 and Airbus deliveries at 178[25] - The Defense & Space segment revenue increased in Q3 2024, driven by higher activity on the Sikorsky CH-53K program[13] - The Commercial segment experienced a slight revenue increase, offset by lower production volume on the Boeing 737 program[12] - The Defense & Space segment reported revenues of $231.3 million in Q3 2024, a 12.4% increase from $205.7 million in Q3 2023[24] Debt and Liabilities - Total debt as of September 26, 2024, was $4,403 million, up from $4,084 million at the end of 2023[23] - Total current liabilities rose significantly to $3,432.3 million as of September 26, 2024, from $2,198.3 million at the end of December 31, 2023, marking an increase of 56.2%[29] - Long-term debt decreased slightly to $3,976.4 million as of September 26, 2024, compared to $4,018.7 million at the end of December 31, 2023[29] Strategic Initiatives - Management is implementing plans to improve liquidity, including potential additional customer advances and incremental debt financing[10] - The company announced a 21-day furlough for approximately 700 employees due to the ongoing Boeing IAM strike, which began on September 13, 2024[3] - The company is facing risks related to the proposed acquisition of Spirit by Boeing, including regulatory approvals and potential termination fees[19] - Future projections remain uncertain, with the company disclaiming any obligation to update forward-looking statements[20] - The acquisition by Boeing is expected to close in mid-2025, pending regulatory approvals and other conditions[11] Inventory and Expenses - Inventory increased to $2,020.7 million as of September 26, 2024, compared to $1,767.3 million at the end of December 31, 2023, indicating a rise of 14.3%[29] - Total operating costs and expenses increased to $1,820.7 million for the three months ended September 26, 2024, from $1,572.6 million in the same period last year, reflecting a rise of 15.7%[27] - The company reported a significant increase in research and development expenses, totaling $10.4 million for the three months ended September 26, 2024, compared to $10.1 million in the same period last year[27] - Employee stock compensation expense increased to $30.8 million for the nine months ended September 26, 2024, compared to $29.3 million for the same period in 2023[30] Forward-Looking Statements - The company reported a forward loss provision of $524.9 million for the nine months ended September 26, 2024, compared to a gain of ($50.7) million in the same period in 2023, indicating a shift in financial outlook[30] - The company has indicated plans for market expansion and new product development, although specific details were not disclosed in the earnings call[27]