K & F Industries, Inc. Reports Record Results For 1999
22 March 2000
K & F Industries, Inc. Reports Record Results For 1999
NEW YORK--March 22, 2000--K & F Industries, Inc. today reported its results for the quarter and year ended December 31, 1999.Sales, operating income, EBITDA (earnings before interest, taxes, depreciation and amortization) and net income were the highest in the Company's history, reflecting the continued build-out of K & F-equipped customer fleets, new program awards and significantly increased airline industry traffic.
For the year ended December 31, 1999, net income reached $74 million, a 90% increase from $39 million in the prior year, while sales rose 3% to $356 million from $345 million a year ago. Operating income increased 14% to $102 million from $90 million and EBITDA increased 9% to $119 million from $110 million. Operating cash flow before interest paid increased 5% to $100 million from $95 million. Total debt was reduced by $52 million, versus $36 million last year, to close 1999 at $434 million. Bookings and backlog declined, due primarily to the timing of customer orders.
"K & F's 1999 results follow upon last year's record performance, underscoring again the fundamental strength of our business and reflecting growth in all the market sectors we address," said Bernard L. Schwartz, Chairman and Chief Executive Officer.
Strong Sales Growth and Demonstrated Technical Leadership Drive ABSC and EFC Results
During 1999, Aircraft Braking Systems Corporation (ABSC) continued to concentrate on the high- cycle, narrow-body commercial transport aircraft market and recorded an increase in the number of A-321, MD-80, MD-90, SAAB 340 and Canadair Regional Jets equipped with K & F products. In addition, the Company won competitions in 1999 for the future supply of wheels and brakes on the Canadair 70- and 90- passenger regional jets, the Embraer 70- and 90- passenger regional jets and total braking systems on the Fairchild Dornier 428 jet aircraft. "With over 70 years of performance behind it, ABSC delivers total braking systems for its customers. Our skill and experience have produced a 50% increase in sales since 1995 and we enjoy a major share of the total market for wheels, brakes and brake control systems. ABSC is a world leader in both carbon brakes and steel brake equipment. One out of every two commercial transport regional jets and two out of every three business jets in service today are equipped with ABSC products. We are the number one supplier of steel brake applications for the military and the market share leader in supplying helicopters. And we continue to allocate resources to advance the state of the art and to remain ahead of the competition," said Mr. Schwartz.
The Company spent almost $163 million over the last three years, including $51 million in 1999, for capital equipment, research and development, and program investments. This has helped to reduce manufacturing costs, improve operating margins and position the Company for increased future sales.
K & F's other subsidiary, Engineered Fabrics Corporation (EFC), also posted increases in its sales of fuel tanks and coated fabrics. "We have seen revenues grow by 50% in the last three years at EFC, where we are the leading aircraft fuel tank manufacturer, serving approximately 90% of the worldwide general aviation and commercial transport market and over half of the domestic military market," said Mr. Schwartz. Besides fuel tanks, EFC has an expanding line of products based on the application of proprietary composite materials. Applications include iceguards for deicing sections of aircraft, oil containment booms, towable storage bladders, heavy lift bags and pillow tanks. New products include a line of coatings to arrest fuel leaks and composite materials for finishing the aircraft interiors of a major airframer.
K & F Industries, Inc., through its Aircraft Braking Systems Corporation subsidiary, is a leading manufacturer of wheels, brakes and brake control systems for commercial transport, general aviation and military aircraft. K & F's other subsidiary, Engineered Fabrics Corporation, is a major producer of aircraft fuel tanks and de-icing equipment and specialty coated fabrics used for storage, shipping, environmental and rescue applications for commercial and military uses.
Notice to Recipients
Any market analysis or financial projection presented herein represents the subjective view of the Company. While estimates for future performance are based on assumptions which management believes are reasonable, no representation is made as to their accuracy. There can be no assurance that management's views are accurate or that management's projections will be realized.
Some statements and information contained herein are not historical facts, but are "forward-looking statements,' as that term is defined in the Private Securities Litigation Reform Act of 1995. In addition, the Company or its representatives have made any may continue to make forward-looking statements, orally or in writing, in other contexts, such as in reports filed with the SEC or press releases. These forward-looking statements may be identified by the use of forward-looking terminology, such as "believes," "expects," "may," "should" or the like, the negative of these words or other variations of these words or comparable words, or discussion of strategy that involves risk and uncertainties. We caution you that these forward-looking statements are only predictions, and actual events or results may differ materially as a result of a wide variety of factors and conditions, many of which are beyond our control. Some of these factors and conditions include: (i) government or regulatory changes, (ii) dependence on our subsidiary, Aircraft Braking Systems Corporation, for operating income, (iii) competition in the market for our products, and (iv) our substantial indebtedness.