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Hexcel Declares 2019 Second Quarter Results July 29 2019

2019 Lucintel Composites Market Insights, July 29, 2019

Hexcel Corporation reported second quarter 2019 results including net sales of $609.0 million and diluted EPS of $0.94.

Nick Stanage, Chairman, CEO and President said: “Hexcel delivered a robust second quarter with sales 11% higher and EPS 25% higher than the same period in 2018. These results reflect strength in our markets combined with strong operational performance. It was another solid quarter for sales, despite softer demand related to 737 MAX production. With the previously disclosed 2018 headwinds now largely behind us, margins have stepped up as we forecasted. Hexcel is continuing to generate strong Cash from Operations, which is now $157 million YTD. Capital expenditures YTD are $99 million resulting in Free Cash Flow of $58 million for the first half of 2019 compared to $55 million in the first six months of 2018. Recognizing our strong EPS performance year to date we are raising our EPS guidance to $3.43-$3.53. Revenue, Free Cash Flow and Capital Expenditure guidance remains unchanged. We are confident that, with current market conditions, our focus on operational excellence and continued investments in innovation, we are positioned to deliver on our commitments and drive shareholder value.”

Sales for the second quarter of 2019 were $609 million, an increase of 11.2% (12.1% in constant currency) compared to the second quarter of 2018.

Commercial Aerospace sales of $416.5 million increased 8.5% (8.6% in constant currency) for the second quarter of 2019 as compared to the prior year period.

Space & Defense sales of $111.8 million increased 21.9% (23.4% in constant currency) for the quarter as compared to the second quarter of 2018.

Total Industrial sales of $80.7 million for the second quarter of 2019 increased 12.1% (17.3% in constant currency) as compared to the second quarter of 2018. Wind energy sales (the largest sub-market in Industrial) increased 44.3% in constant currency compared to Q2 2018.

Gross margin for the second quarter of 2019 was 27.7% compared to 26.4% in the second quarter of 2018.

Selling, General and Administrative expenses increased 14.5% in constant currency, and Research & Technology expenses increased 12.2% in constant currency.

Operating income in the second quarter of 2019 was $115.1 million, or 18.9% of sales, compared to $96.5 million, or 17.6% of sales, in 2018.