(Source: Business Wire)
Breeze-Eastern Corporation (NYSE Amex:BZC) today reported that for the fiscal year ended March 31, 2009, it had net income of $5.8 million versus $9.4 million for fiscal 2008, or net income of $.61 per diluted share for fiscal 2009 compared to $1.00 per diluted share for fiscal 2008. Excluding the non-recurring items in fiscal 2009 of the charge for refinancing the Company's debt and the release of a tax accrual and in fiscal 2008 the gain on the sale of the Union, New Jersey facility, the net income for fiscal 2009 was $5.7 million or $.61 per diluted share versus net income for fiscal 2008 of $5.5 million or $.58 per diluted share, a 5% increase. Operating income for fiscal 2009 decreased to $11.3 million from $12.9 million for fiscal 2008. Sales for fiscal 2009 decreased 1% to $75.4 million from $76.0 million for fiscal 2008. Adjusted EBITDA, as described under "Non-GAAP Financial Measures" in this press release, for fiscal 2009 decreased 11% to $12.7 million from $14.3 million for fiscal 2008. New orders received during fiscal 2009 were $82.1 million compared to $81.1 million for fiscal 2008. The book-to-bill ratio was 1.1 for both fiscal 2009 and 2008.
Net income for the 2009 fiscal fourth quarter was $2.4 million versus $6.5 million in the prior-year period or $.25 per diluted share compared to $.69 per diluted share in the prior-year period. Excluding the release of a tax accrual in fiscal 2009 and the gain on the sale of the Union, New Jersey facility in fiscal 2008, net income in the fourth quarter of fiscal 2009 was $2.0 million or $.22 per diluted share and for 2008 was $2.6 million or $.28 per diluted share. Operating income for the fourth quarter of fiscal 2009 was $3.6 million compared to $5.2 million for the fourth quarter of fiscal 2008, a 31% decrease. Sales of $23.4 million in the fiscal fourth quarter of 2009 decreased from $24.4 million for the same period in the prior year, a 4% decrease. Adjusted EBITDA, for the fourth quarter of fiscal 2009 decreased 27% to $4.0 million versus $5.6 million in the prior-year period. The provision for income taxes in the fourth quarter of fiscal 2009 includes the release of $0.4 million for an unrecognized tax benefit from prior years which was settled in fiscal 2009. New orders received during the 2009 fiscal fourth quarter were $23.1 million compared to $26.3 million in the prior fiscal year's fourth quarter. The Company's book-to-bill ratio for the fiscal 2009 fourth quarter was 1.0 compared with 1.1 for last year's fiscal fourth quarter.
Robert L. G. White, President and Chief Executive Officer of the Company, said, "Considering the impact of the global recession on the world economy and the meltdown in the financial markets since last fall, Breeze-Eastern held its own. Excluding the non-recurring items in fiscal 2009 of the charge for refinancing the Company's debt and the release of a tax accrual and in fiscal 2008 the gain on the sale of the Union, New Jersey facility, net income and earnings per diluted share were at record levels in fiscal 2009. Our debt, net of cash on hand at March31,2009, was $18.7 million, down $5.3 million from fiscal 2008 and carried a blended interest rate of 3.6% at fiscal year end. The backlog of work in the pipeline is at record levels, our book-to-bill ratio was over 1.0 for the fourth year in a row and we continue to win new programs. Since April 2007, we have won fifteen of the eighteen programs targeted."
Mr. White continued, "With all of that said, our overall operating performance missed our targets for fiscal 2009. The decrease in operating income and Adjusted EBITDA for the fourth quarter and the full fiscal year were attributable to several factors, principally a decrease in overall sales volume, lower gross profit in engineering services and an unfavorable shift in the mix of products sold. For example, costs incurred in fiscal 2009 associated with a contract to develop a new piece of equipment for a fixed wing aircraft to be used by the U.S. Army for tactical combat operations accounted for decreases of 2.0% and 1.7% in gross margin in the fiscal 2009 fourth quarter and full fiscal year, respectively, compared to fiscal 2008. Customer delays in shipping schedules also prevented us from achieving our target of a favorable comparison for the quarter and the year. While aftermarket sales in overhaul & repair and spares in the fourth quarter of fiscal 2009 showed favorable comparisons to fiscal 2008, the margins achieved were lower due to product mix within these sales categories. Spare parts sales were down in fiscal year 2009 compared to fiscal year 2008. Sales of new production products in the fourth quarter and full year of fiscal 2009 were below fiscal 2008 while sales of engineering services were up but did not contribute to gross profit due to the contract mentioned above. The lower general, administrative and selling expenses for the fourth quarter and full fiscal year of 2009 were primarily due to lower marketing expenses and no incentive bonuses, as the operating targets were not met in fiscal 2009 offset somewhat by higher internal research and development costs related to new product development. The backlog as of March 31, 2009 was $131.0 million compared to $124.3 million at March 31, 2008, representing a 5% increase."
Outlook
Mr. White concluded, "Late in the fourth quarter of fiscal 2009 we saw, for the first time, some indications that the global economic slowdown was beginning to affect our markets as certain customers have started to request extensions of delivery dates for products and have also asked for extended payment terms. We have not, however, seen outright cancellation of orders.
