Spirit AeroSystems(US:SPR)2023-02-17 21:38Revenue and Sales Performance - For the year ended December 31, 2022, approximately 45% of the company's net revenues were generated from sales of components to Boeing for the B737 aircraft, compared to 35% in 2021 and 19% in 2020[243]. - Net revenues for the twelve months ended December 31, 2022, were $5,029.6 million, an increase of 27.2% from $3,953.0 million in 2021[268]. - Boeing accounted for $3,008.9 million in net revenues in 2022, representing a 36.3% increase from $2,206.0 million in 2021[273]. - Airbus net revenues increased to $1,098.2 million in 2022, up 16.1% from $945.6 million in 2021[273]. - Commercial segment net revenues for the twelve months ended December 31, 2022 were $4,068.4 million, an increase of $940.3 million, or 30.1% compared to the prior year[291]. - Defense & Space segment net revenues for the twelve months ended December 31, 2022 were $649.8 million, an increase of $64.8 million, or 11.1% compared to the prior year[292]. - Aftermarket segment net revenues for the twelve months ended December 31, 2022 were $311.4 million, an increase of $71.5 million, or 29.8% compared to the prior year[293]. - The Commercial segment represented approximately 81% of net revenues for the twelve months ended December 31, 2022, compared to 79% in the prior year[290]. - For the twelve months ended December 31, 2022, net revenues from direct sales to non-U.S. customers were $1,215.1 million, representing 24% of total net revenues, down from 29% in 2021[372]. Financial Losses and Challenges - The company recorded a pre-tax loss of $29.1 million related to adjustments of certain assets and liabilities associated with sanctioned Russian business activities for the twelve months ended December 31, 2022[240]. - The total net loss attributable to common shareholders for 2022 was $545.7 million, slightly higher than the loss of $540.8 million in 2021[268]. - The company recognized unfavorable change in estimates of $278 million for the twelve months ended December 31, 2022, primarily driven by forward loss charges of $250.3 million[274]. - The net loss for the twelve months ended December 31, 2022, was $546.2 million, compared to a net loss of $540.8 million in 2021 and $870.3 million in 2020[416]. - The company reported a net loss of $463.1 million for the same period, indicating a significant financial challenge[377]. - The company reported a net loss of $545.7 million for the year ended December 31, 2022, compared to a net loss of $545.7 million in 2021[414]. Operating Performance - Gross profit for 2022 was $48.6 million, compared to a gross loss of $117.8 million in 2021[268]. - The operating loss for 2022 was $281.2 million, an improvement from a loss of $459.2 million in 2021[268]. - Commercial segment operating margins improved to (2%) for the twelve months ended December 31, 2022, compared to (7%) for the same period in the prior year[291]. - Defense & Space segment operating margins increased to 11% for the twelve months ended December 31, 2022, compared to 8% for the same period in the prior year[292]. - Aftermarket segment operating margins were 19% for the twelve months ended December 31, 2022, compared to 21% for the same period in the prior year[294]. Production and Deliveries - Total shipset deliveries for 2022 reached 1,297, a 27% increase from 1,022 in 2021[270]. - The company delivered 281 B737 models in 2022, a significant increase from 162 in 2021[270]. - Deliveries to Boeing increased by 97 shipsets to 359 shipsets during the twelve months ended December 31, 2022, compared to 262 shipsets in the prior year[278]. - Deliveries to Airbus increased to 726 shipsets during the twelve months ended December 31, 2022, compared to 579 shipsets in the prior year, driven by 124 more deliveries on the A320 program[278]. Debt and Liquidity - As of December 31, 2022, the company's debt balance was $3,868.6 million, with $658.6 million in cash and cash equivalents, reflecting a decrease of $820.0 million from the previous year[308]. - The company expects adverse impacts on operating cash flows to continue for 2023 and beyond due to various factors including supply chain disruptions and labor shortages[308]. - The company entered into a $400.0 million senior secured term loan credit facility on October 5, 2020, and subsequently refinanced it with lower interest rates[312][313]. - On November 23, 2022, the company issued $900 million aggregate principal amount of its 9.375% Senior Secured First Lien Notes due 2029[317][320]. - The First Lien 2029 Notes bear interest at a rate of 9.375% per year, with the first interest payment due on May 30, 2023[318]. - The company recorded a loss on extinguishment of $7.2 million for the twelve months ended December 31, 2022, related to the modification of its prior credit agreement[316]. - The company anticipates sufficient liquidity to meet operating and financing needs for at least the next 12 months[422]. Cash Flow and Investments - The net cash used in operating activities for the twelve months ended December 31, 2022, was $394.6 million, an increase of $331.4 million compared to the prior year[355]. - The net cash outflow from investing activities for the twelve months ended December 31, 2022, was $155.5 million, a decrease from $163.8 million in the prior year[356]. - The net cash outflow from financing activities for the twelve months ended December 31, 2022, was $261.0 million, an increase of $97.5 million compared to the same period in the prior year[357]. - The company reported a cash balance of $658.6 million at the end of 2022, down from $1,478.6 million at the end of 2021[417]. - The company experienced a net decrease in cash, cash equivalents, and restricted cash of $820.0 million for the period[416]. Asset and Liability Management - Total assets decreased from $7,737.3 million in 2021 to $6,666.2 million in 2022, a decline of approximately 13.8%[412]. - Total liabilities increased to $6,211.5 million as of December 31, 2022, compared to $6,272.4 million in 2021[378]. - Spirit's total non-current liabilities were $4,717.2 million as of December 31, 2022, a slight decrease from $4,859.5 million in 2021[378]. - The outstanding balance of the Second Lien 2025 Notes was $1,200.0 million, with a carrying value of $1,191.0 million as of December 31, 2022[334]. Research and Development - Research and development expense for the twelve months ended December 31, 2022, was $2.9 million lower compared to the same period in the prior year[280]. - Research and development expenses decreased to $50.4 million in 2022 from $53.3 million in 2021, reflecting a focus on cost management[408]. Warranty and Provisions - Warranties are typically provided on all products and services, and costs related to warranties are accrued at the time of sale[433]. - Provisions for warranty expenses are estimated using historical information and industry peer experience[433]. - The Company considers warranty experience of other entities and management judgment for new products or customers[435].