February 10, 2010
Hawker Beechcraft Corp. (HBC) has published its 2009 financial results, and the news isn’t good. HBC reported 2009 sales of $3.2 billion and an operating loss of $712 million for the 12 months ending Dec. 31, 2009. Compare that to 2008’s financials, when HBC made sales of $3.5 billion and had an operating income of $140.3 million.
The poor sales were affected by the lower volume of transactions in the company’s business and general aviation (B&GA) segment, a statement said. B&GA sales for 2009 were $2.3 billion, compared to $2.8 billion in 2008. HBC delivered 309 GA airplanes in 2009. These deliveries consisted of 98 business jets, 155 turboprops, and 56 piston-powered airplanes. In 2008, 441 GA airplanes were delivered.
The news comes as no surprise, as HBC has suffered through a series of massive layoffs and production cutbacks in 2009. In December 2009, fractional operator NetJets canceled an order for “more than 20” business jets, according to HBC. That order consisted, in part, of some 11 of HBC’s flagship—the large-cabin Hawker 4000—and an unspecified number of Hawker 900s. The cancellation reduced HBC’s backlog by about $2.6 billion, but HBC Chairman and CEO Bill Boisture said that it “will have minimal effect on out liquidity, earnings, and deliveries in 2009 and 2010.” In a December 2009 press conference, Boisture said he expected to post losses of between $725 million and $740 million for 2009. That turned out to be overly pessimistic in view of the $712 million loss announced in the official 2009 results.
On the brighter side, HBC’s trainer aircraft segment turned in 2009 sales of $531.3 million, up from 2008’s $338.2 million. This segment includes the popular Beechcraft T-6B Texan II single-engine turboprop trainer.
The company’s customer support segment reported a drop in sales—from 2008’s $522.8 million to 2009’s $483.3 million. HBC said that this drop in income can be explained by lower GA aircraft usage as a result of the recession.
In another round of bad news, “The Wall Street Journal” reported in a Feb. 9 article that the Goldman Sachs Group has written down HBC’s value by 85 percent, according to a letter to investors. Goldman Sachs, along with Onex Partners, bought HBC in 2007 for $3.3 billion. At the time, Goldman Sachs and Onex felt HBC was “fertile for growth,” according to a Goldman Sachs executive.
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