- EPS of $1.03; adjusted EPS of $1.20, up from $1.05 from prior
year
- Segment profit of $290 million, up $31 million from prior
year
Textron Inc. (NYSE: TXT) today reported first quarter 2024 net
income of $1.03 per share, as compared to $0.92 per share in the
first quarter of 2023. Adjusted net income, a non-GAAP measure that
is defined and reconciled to GAAP in an attachment to this release,
was $1.20 per share for the first quarter of 2024, compared to
$1.05 per share in the first quarter of 2023.
“In the quarter, we saw profit growth across our Aviation, Bell,
and Systems businesses,” said Textron Chairman and CEO Scott C.
Donnelly. "At Aviation, we saw continued strong market demand which
contributed to $177M in backlog growth. At Bell, we saw revenue
growth driven by the FLRAA program."
Cash Flow
Net cash used by operating activities of the manufacturing group
for the first quarter was $30 million, compared to $153 million in
cash provided last year. Manufacturing cash flow before pension
contributions, a non-GAAP measure that is defined and reconciled to
GAAP in an attachment to this release, reflected a use of cash of
$81 million for the first quarter, compared to a cash inflow of
$104 million last year.
In the quarter, Textron returned $317 million to shareholders
through share repurchases.
First Quarter Segment Results
Textron Aviation
Textron Aviation’s revenues were $1.2 billion, up $39 million
from last year's first quarter, reflecting higher pricing of $48
million, partially offset by lower volume and mix of $9
million.
Textron Aviation delivered 36 jets in the quarter, up from 35 in
the first quarter of 2023, and 20 commercial turboprops, down from
34 in last year's first quarter.
Segment profit was $143 million in the first quarter, up $18
million from a year ago, primarily reflecting a favorable impact
from pricing, net of inflation, of $14 million.
Textron Aviation backlog at the end of the first quarter was
$7.3 billion.
Bell
Bell revenues were $727 million, up $106 million from the first
quarter of 2023, largely reflecting higher military volume of $95
million, primarily related to the FLRAA program, partially offset
by lower volume on the V-22 and H-1 programs.
Bell delivered 18 commercial helicopters in the quarter, down
from 22 in last year's first quarter.
Segment profit of $80 million was up $20 million from last
year's first quarter, largely due to a favorable impact from
performance of $30 million, which included $13 million of lower
research and development costs.
Bell backlog at the end of the first quarter was $4.5
billion.
Textron Systems
Revenues at Textron Systems were $306 million, flat with last
year's first quarter.
Segment profit of $38 million was up $4 million, compared with
the first quarter of 2023.
Textron Systems’ backlog at the end of the first quarter was
$1.8 billion.
Industrial
Industrial revenues were $892 million, down $40 million from
last year's first quarter, largely due to lower volume and mix of
$51 million, principally in the Specialized Vehicles product line,
partially offset by higher pricing of $16 million in the
segment.
Segment profit of $29 million was down $12 million from the
first quarter of 2023, primarily due to lower volume and mix at
Specialized Vehicles.
Textron eAviation
Textron eAviation segment revenues were $7 million and segment
loss was $18 million in the first quarter of 2024, compared with a
segment loss of $9 million in the first quarter of 2023, primarily
related to higher research and development costs.
Finance
Finance segment revenues were $15 million, and profit was $18
million.
Restructuring
In the first quarter of 2024, we incurred $14 million in special
charges under the 2023 restructuring plan, largely related to
headcount reductions to improve the cost structures of the Textron
Systems and Bell segments in light of the cancellation of the
Shadow and FARA programs in the quarter. Textron expects to incur
additional severance costs in the second quarter of 2024 in the
range of $25 million to $30 million, largely related to headcount
reductions in the Industrial segment. As a result, Textron has
expanded its 2023 restructuring plan from the previously announced
range of $115 million to $135 million in pre-tax special charges to
a range of $165 million to $170 million.
Conference Call Information
Textron will host its conference call today, April 25, 2024 at
8:00 a.m. (Eastern) to discuss its results and outlook. The call
will be available via webcast at www.textron.com or by direct dial
at (844) 867-6169 in the U.S. or (409) 207-6975 outside of the
U.S.; Access Code: 7481533.
In addition, the call will be recorded and available for
playback beginning at 11:00 a.m. (Eastern) on Thursday, April 25,
2024 by dialing (402) 970-0847; Access Code: 8546032.
A package containing key data that will be covered on today’s
call can be found in the Investor Relations section of the
company’s website at www.textron.com.
About Textron Inc.
Textron Inc. is a multi-industry company that leverages its
global network of aircraft, defense, industrial and finance
businesses to provide customers with innovative solutions and
services. Textron is known around the world for its powerful brands
such as Bell, Cessna, Beechcraft, Hawker, Pipistrel, Jacobsen,
Kautex, Lycoming, E-Z-GO, Arctic Cat, and Textron Systems. For more
information visit: www.textron.com.
Forward-looking Information
Certain statements in this release and other oral and written
statements made by us from time to time are “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements, which may
describe strategies, goals, outlook or other non-historical
matters, or project revenues, income, returns or other financial
measures, often include words such as “believe,” “expect,”
“anticipate,” “intend,” “plan,” “estimate,” “guidance,” “project,”
“target,” “potential,” “will,” “should,” “could,” “likely” or “may”
and similar expressions intended to identify forward-looking
statements. These statements are only predictions and involve known
and unknown risks, uncertainties, and other factors that may cause
our actual results to differ materially from those expressed or
implied by such forward-looking statements. Given these
uncertainties, you should not place undue reliance on these
forward-looking statements. Forward-looking statements speak only
as of the date on which they are made, and we undertake no
obligation to update or revise any forward-looking statements. In
addition to those factors described in our Annual Report on Form
10-K and our Quarterly Reports on Form 10-Q under “Risk Factors”,
among the factors that could cause actual results to differ
materially from past and projected future results are the
following: Interruptions in the U.S. Government’s ability to fund
its activities and/or pay its obligations; changing priorities or
reductions in the U.S. Government defense budget, including those
related to military operations in foreign countries; our ability to
perform as anticipated and to control costs under contracts with
the U.S. Government; the U.S. Government’s ability to unilaterally
modify or terminate its contracts with us for the U.S. Government’s
convenience or for our failure to perform, to change applicable
procurement and accounting policies, or, under certain
circumstances, to withhold payment or suspend or debar us as a
contractor eligible to receive future contract awards; changes in
foreign military funding priorities or budget constraints and
determinations, or changes in government regulations or policies on
the export and import of military and commercial products;
volatility in the global economy or changes in worldwide political
conditions that adversely impact demand for our products;
volatility in interest rates or foreign exchange rates and
inflationary pressures; risks related to our international
business, including establishing and maintaining facilities in
locations around the world and relying on joint venture partners,
subcontractors, suppliers, representatives, consultants and other
business partners in connection with international business,
including in emerging market countries; our Finance segment’s
ability to maintain portfolio credit quality or to realize full
value of receivables; performance issues with key suppliers or
subcontractors; legislative or regulatory actions, both domestic
and foreign, impacting our operations or demand for our products;
our ability to control costs and successfully implement various
cost-reduction activities; the efficacy of research and development
investments to develop new products or unanticipated expenses in
connection with the launching of significant new products or
programs; the timing of our new product launches or certifications
of our new aircraft products; our ability to keep pace with our
competitors in the introduction of new products and upgrades with
features and technologies desired by our customers; pension plan
assumptions and future contributions; demand softness or volatility
in the markets in which we do business; cybersecurity threats,
including the potential misappropriation of assets or sensitive
information, corruption of data or, operational disruption;
difficulty or unanticipated expenses in connection with integrating
acquired businesses; the risk that acquisitions do not perform as
planned, including, for example, the risk that acquired businesses
will not achieve revenue and profit projections; the impact of
changes in tax legislation; the risk of disruptions to our business
and the business of our suppliers, customers and other business
partners due to unexpected events, such as pandemics, natural
disasters, acts of war, strikes, terrorism, social unrest or other
societal or political conditions; and the ability of our businesses
to hire and retain the highly skilled personnel necessary for our
businesses to succeed.
TEXTRON INC.
Revenues by Segment and
Reconciliation of Segment Profit to Net Income
(Dollars in millions, except per
share amounts)
(Unaudited)
Three Months Ended
March 30, 2024
April 1, 2023
REVENUES
MANUFACTURING:
Textron Aviation
$
1,188
$
1,149
Bell
727
621
Textron Systems
306
306
Industrial
892
932
Textron eAviation
7
4
3,120
3,012
FINANCE
15
12
Total revenues
$
3,135
$
3,024
SEGMENT
PROFIT
MANUFACTURING:
Textron Aviation
$
143
$
125
Bell
80
60
Textron Systems
38
34
Industrial
29
41
Textron eAviation
(18
)
(9
)
272
251
FINANCE
18
8
Segment profit (a)
290
259
Corporate expenses and other, net
(62
)
(39
)
Interest expense, net for Manufacturing
group
(15
)
(17
)
LIFO inventory provision
(20
)
(25
)
Intangible asset amortization
(8
)
(10
)
Special charges (b)
(14
)
—
Non-service components of pension and
postretirement income, net
66
59
Income before income taxes
237
227
Income tax expense
(36
)
(36
)
Net income
$
201
$
191
Earnings per share
$
1.03
$
0.92
Diluted average shares outstanding
194,860,000
207,011,000
Net income and Diluted earnings per
share (EPS) GAAP to Non-GAAP reconciliation:
March 30, 2024
April 1, 2023
Net income - GAAP
$
201
$
191
Add: LIFO inventory provision, net of
tax
15
19
Intangible asset amortization, net of
tax
6
8
Special charges, net of tax
11
—
Adjusted net income - Non-GAAP
(a)
$
233
$
218
Earnings Per Share:
Net income - GAAP
$
1.03
$
0.92
Add: LIFO inventory provision, net of
tax
0.08
0.09
Intangible asset amortization, net of
tax
0.03
0.04
Special charges, net of tax
0.06
—
Adjusted net income - Non-GAAP
(a)
$
1.20
$
1.05
(a)
Segment profit, adjusted net income and
adjusted diluted earnings per share are non-GAAP financial measures
as defined in "Non-GAAP Financial Measures and Outlook" attached to
this release.
(b)
In the first quarter of 2024, we recorded
special charges of $14 million in connection with the restructuring
plan announced at the end of 2023. These charges were largely
related to headcount reductions in the Textron Systems and Bell
segments.
TEXTRON INC.
Condensed Consolidated Balance
Sheets
(In millions)
(Unaudited)
March 30, 2024
December 30,
2023
Assets
Cash and equivalents
$
1,388
$
2,121
Accounts receivable, net
894
868
Inventories
4,267
3,914
Other current assets
755
857
Net property, plant and equipment
2,451
2,477
Goodwill
2,288
2,295
Other assets
3,692
3,663
Finance group assets
679
661
Total Assets
$
16,414
$
16,856
Liabilities and Shareholders'
Equity
Current portion of long-term debt
$
357
$
357
Accounts payable
1,136
1,023
Other current liabilities
2,902
2,998
Other liabilities
1,850
1,904
Long-term debt
2,818
3,169
Finance group liabilities
420
418
Total Liabilities
9,483
9,869
Total Shareholders' Equity
6,931
6,987
Total Liabilities and Shareholders'
Equity
$
16,414
$
16,856
TEXTRON INC.
MANUFACTURING GROUP
Condensed Schedule of Cash
Flows
(In millions)
(Unaudited)
Three Months Ended
March 30, 2024
April 1, 2023
Cash Flows from Operating
Activities:
Net income
$
187
$
185
Depreciation and amortization
88
92
Deferred income taxes and income taxes
receivable/payable
19
16
Pension, net
(56
)
(51
)
Changes in assets and liabilities:
Accounts receivable, net
(34
)
(69
)
Inventories
(350
)
(380
)
Accounts payable
121
261
Other, net
(5
)
99
Net cash from operating
activities
(30
)
153
Cash Flows from Investing
Activities:
Capital expenditures
(66
)
(62
)
Net proceeds from corporate-owned life
insurance policies
3
20
Proceeds from sale of property, plant and
equipment
3
—
Net cash from investing
activities
(60
)
(42
)
Cash Flows from Financing
Activities:
Principal payments on long-term debt and
nonrecourse debt
(352
)
(2
)
Purchases of Textron common stock
(317
)
(377
)
Dividends paid
(4
)
(4
)
Other financing activities, net
38
22
Net cash from financing
activities
(635
)
(361
)
Total cash flows
(725
)
(250
)
Effect of exchange rate changes on cash
and equivalents
(8
)
6
Net change in cash and
equivalents
(733
)
(244
)
Cash and equivalents at beginning of
period
2,121
1,963
Cash and equivalents at end of
period
$
1,388
$
1,719
Manufacturing cash flow GAAP to
Non-GAAP reconciliation:
Three Months Ended
March 30, 2024
April 1, 2023
Net cash from operating activities -
GAAP
$
(30
)
$
153
Less: Capital expenditures
(66
)
(62
)
Add: Total pension contributions
12
13
Proceeds from sale of property, plant and
equipment
3
—
Manufacturing cash flow before pension
contributions - Non-GAAP (a)
$
(81
)
$
104
(a)
Manufacturing cash flow before pension
contributions is a non-GAAP financial measure as defined in
"Non-GAAP Financial Measures and Outlook" attached to this
release.
TEXTRON INC.
Condensed Consolidated
Schedule of Cash Flows
(In millions)
(Unaudited)
Three Months Ended
March 30, 2024
April 1, 2023
Cash Flows from Operating
Activities:
Net income
$
201
$
191
Depreciation and amortization
88
92
Deferred income taxes and income taxes
receivable/payable
23
18
Pension, net
(56
)
(51
)
Changes in assets and liabilities:
Accounts receivable, net
(34
)
(69
)
Inventories
(350
)
(380
)
Accounts payable
121
261
Captive finance receivables, net
22
6
Other, net
(22
)
95
Net cash from operating
activities
(7
)
163
Cash Flows from Investing
Activities:
Capital expenditures
(66
)
(62
)
Net proceeds from corporate-owned life
insurance policies
3
20
Proceeds from sale of property, plant and
equipment
3
—
Finance receivables repaid
8
12
Finance receivables originated
(11
)
—
Other investing activities, net
—
1
Net cash from investing
activities
(63
)
(29
)
Cash Flows from Financing
Activities:
Principal payments on long-term debt and
nonrecourse debt
(365
)
(17
)
Purchases of Textron common stock
(317
)
(377
)
Dividends paid
(4
)
(4
)
Other financing activities, net
49
22
Net cash from financing
activities
(637
)
(376
)
Total cash flows
(707
)
(242
)
Effect of exchange rate changes on cash
and equivalents
(8
)
6
Net change in cash and
equivalents
(715
)
(236
)
Cash and equivalents at beginning of
period
2,181
2,035
Cash and equivalents at end of
period
$
1,466
$
1,799
TEXTRON INC. Non-GAAP Financial
Measures and Outlook (Dollars in millions, except per share
amounts)
We supplement the reporting of our financial information
determined under U.S. generally accepted accounting principles
(GAAP) with certain non-GAAP financial measures. These non-GAAP
financial measures exclude certain significant items that may not
be indicative of, or are unrelated to, results from our ongoing
business operations. We believe that these non-GAAP measures may be
useful for period-over-period comparisons of underlying business
trends and our ongoing business performance, however, they should
be used in conjunction with GAAP measures. Our non-GAAP measures
should not be considered in isolation or as a substitute for the
related GAAP measures, and other companies may define similarly
named measures differently. We encourage investors to review our
financial statements and publicly filed reports in their entirety
and not to rely on any single financial measure. We utilize the
following definitions for the non-GAAP financial measures included
in this release and have provided a reconciliation of the GAAP to
non-GAAP amounts for each measure:
Segment Profit Segment
profit is an important measure used by our chief operating decision
maker for evaluating performance and for decision-making purposes.
Segment profit for the manufacturing segments excludes the
non-service components of pension and postretirement income, net;
LIFO inventory provision; intangible asset amortization; interest
expense, net for Manufacturing group; certain corporate expenses;
gains/losses on major business dispositions; and special charges.
The measurement for the Finance segment includes interest income
and expense along with intercompany interest income and
expense.
Adjusted Net Income and Adjusted
Diluted Earnings Per Share Adjusted net income and
adjusted diluted earnings per share exclude LIFO inventory
provision, net of tax; intangible asset amortization, net of tax;
special charges, net of tax; and gains/losses on major business
dispositions, net of tax. LIFO inventory provision is excluded to
improve comparability with other companies in our industry who have
not elected to use the LIFO inventory costing method. Intangible
asset amortization is excluded to improve comparability as the
impact of such amortization can vary substantially from company to
company depending upon the nature and extent of acquisitions and
exclusion of this expense is consistent with the presentation of
non-GAAP measures provided by other companies within our industry.
Management believes that it is important for investors to
understand that these intangible assets were recorded as part of
purchase accounting and contribute to revenue generation. We
consider items recorded in special charges, such as enterprise-wide
restructuring, certain asset impairment charges, and
acquisition-related restructuring, integration and transaction
costs, to be of a non-recurring nature that is not indicative of
ongoing operations.
March 30, 2024
April 1, 2023
Net income - GAAP
$
201
$
191
Add: LIFO inventory provision, net of
tax
15
19
Intangible asset amortization, net of
tax
6
8
Special charges, net of tax
11
—
Adjusted net income - Non-GAAP
$
233
$
218
Earnings Per Share:
Net income - GAAP
$
1.03
$
0.92
Add: LIFO inventory provision, net of
tax
0.08
0.09
Intangible asset amortization, net of
tax
0.03
0.04
Special charges, net of tax
0.06
—
Adjusted net income - Non-GAAP
$
1.20
$
1.05
2024 Outlook
Diluted EPS
Net income - GAAP
$
1,040
$
1,078
$
5.44
$
5.66
Add: LIFO inventory provision, net of
tax
85
0.44
Intangible asset amortization, net of
tax
27
0.14
Special charges, net of tax
33
—
30
0.18
—
0.16
Net income - Non-GAAP
$
1,185
—
$
1,220
$
6.20
—
$
6.40
TEXTRON INC. Non-GAAP Financial
Measures and Outlook (Continued) (Dollars in millions, except
per share amounts)
Manufacturing Cash Flow Before Pension
Contributions Manufacturing cash flow before pension
contributions adjusts net cash from operating activities (GAAP) for
the following:
- Deducts capital expenditures and includes proceeds from
insurance recoveries and the sale of property, plant and equipment
to arrive at the net capital investment required to support ongoing
manufacturing operations;
- Excludes dividends received from Textron Financial Corporation
(TFC) and capital contributions to TFC provided under the Support
Agreement and debt agreements as these cash flows are not
representative of manufacturing operations;
- Adds back pension contributions as we consider our pension
obligations to be debt-like liabilities. Additionally, these
contributions can fluctuate significantly from period to period and
we believe that they are not representative of cash used by our
manufacturing operations during the period.
While we believe this measure provides a focus on cash generated
from manufacturing operations, before pension contributions, and
may be used as an additional relevant measure of liquidity, it does
not necessarily provide the amount available for discretionary
expenditures since we have certain non-discretionary obligations
that are not deducted from the measure.
Three Months Ended
March 30, 2024
April 1, 2023
Net cash from operating activities -
GAAP
$
(30
)
$
153
Less: Capital expenditures
(66
)
(62
)
Add: Total pension contributions
12
13
Proceeds from sale of property, plant and
equipment
3
—
Manufacturing cash flow before pension
contributions - Non-GAAP
$
(81
)
$
104
2024 Outlook
Net cash from operating activities -
GAAP
$
1,272
—
$
1,372
Less: Capital expenditures
(425)
Add: Total pension contributions
50
Proceeds from sale of property, plant and
equipment
3
Manufacturing cash flow before pension
contributions - Non-GAAP
$
900
—
$
1,000
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240425144051/en/
Investor Contacts: David Rosenberg – 401-457-2288 Kyle
Williams – 401-457-2288
Media Contact: Mike Maynard – 401-457-2362
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