Hawker Beechcraft says NetJets cancellation not expected to affect liquidity, profitability

By Jennifer Lanning Drey

Portland, Ore., Dec. 16 - Hawker Beechcraft Acquisition Co.'s recent announcement that NetJets Inc. has canceled orders for a significant number of previously contracted aircraft is not expected to have a material effect on the company's liquidity or profitability going forward, W.W. "Bill" Boisture Jr., chief executive officer of Hawker Beechcraft, said Wednesday during a company conference call.

More specifically, the canceled orders will have no impact on the company's 2009 or 2010 deliveries, revenue or EBITDA and only a minor impact on expected revenue in 2011, he said during the call, which was held to discuss the announcement.

The canceled orders were scheduled for delivery between 2011 and 2020.

The cancellation resulted in a $2.6 billion reduction in the company's reported backlog; however, only about 20% of the canceled backlog was scheduled to be delivered in the next five years, he said.

Hawker Beechcraft's internal forecasts show that the cancellations will impact less than 5% of its projected revenue over the next five years.

"The company does not view this impact as material," Boisture said.

Hawker Beechcraft will return $12.8 million of deposits to NetJets later this week, he noted.

During the question-and-answer portion of the call, Hawker Beechcraft's chief financial officer, Sidney Anderson, said the company remains confident in its ability to maintain liquidity above the minimum amount required by its credit agreement.

The CFO also said despite having had a challenging year, he is pleased with Hawker Beechcraft's cash performance and ability to produce cash during 2009.

Hawker Beechcraft is a Wichita, Kan., manufacturer of business, special-mission and trainer aircraft.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.