-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, G6NuSeWr+bWlTqK3+d88h3cCsXTe/BjcxRqpgkqaIv1nboLnNgw5zP6Zm7e1onN3 P9M5X81N+no2QCoPa4r2ig== 0000950123-04-009579.txt : 20040811 0000950123-04-009579.hdr.sgml : 20040811 20040811125743 ACCESSION NUMBER: 0000950123-04-009579 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040811 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040811 FILER: COMPANY DATA: COMPANY CONFORMED NAME: K&F INDUSTRIES INC CENTRAL INDEX KEY: 0000851797 STANDARD INDUSTRIAL CLASSIFICATION: AIRCRAFT PART & AUXILIARY EQUIPMENT, NEC [3728] IRS NUMBER: 341614845 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 333-40977 FILM NUMBER: 04966434 BUSINESS ADDRESS: STREET 1: 600 THIRD AVE CITY: NEW YORK STATE: NY ZIP: 10016 BUSINESS PHONE: 2122970900 MAIL ADDRESS: STREET 1: 600 THIRD AVE CITY: NEW YORK STATE: NY ZIP: 10016 8-K 1 y00258e8vk.txt K&F INDUSTRIES, INC. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------- FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): August 11, 2004 K&F INDUSTRIES, INC. ------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware 33-29035 34-1614845 --------------- ---------------- ------------- (State or other (Commission File (IRS Employer jurisdiction of Number) Identification No.) incorporation) 600 Third Avenue, New York, New York 10016 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (212) 297-0900 -------------- (Registrant's telephone number, including area code) Item 7. Financial Statement and Exhibits. -------------------------------- (c) Exhibits: The following exhibit is filed herewith: 99.1 Press Release dated August 11, 2004 regarding the second quarter 2004 earnings of K&F Industries, Inc. Item 12. Results of Operations and Financial Condition. --------------------------------------------- On August 11, 2004, K&F Industries, Inc. (the "Company") reported second quarter 2004 earnings. For additional information regarding the Company's second quarter 2004 earnings, please refer to the press release attached to this report as Exhibit 99.1 (the "Press Release"), which Press Release is incorporated by reference herein. At 11:00 a.m. EDT on August 11, 2004, executives of the Company will host a conference call to speak to the public, as well as various members of the financial and investment community, regarding the Company's second quarter 2004 results. The information in the Press Release is being furnished, not filed, pursuant to this Item 12. Accordingly, the information in the Press Release will not be incorporated by reference into any registration statement filed by the Company under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference. The furnishing of the information in this Report is not intended to, and does not, constitute a determination or admission by the Company that the information in this Report is material or complete, or that investors should consider this information before making an investment decision with respect to any security of the Company. The Company provides certain non-GAAP financial measures as additional information relating to its operating results. Management of the Company believes that the presentation of these measures provides additional information with respect to the ability of the Company to meet its future debt service, capital expenditures and working capital requirements. In addition, management of the Company believes that investors find these non-GAAP financial measures to be a useful tool for measuring the Company's ability to service debt. Management also uses these or similar non-GAAP financial measures (i) in its strategic planning for the Company and (ii) in evaluating the Company's results of operations. The current calculation of non-GAAP earnings before interest, taxes, depreciation and amortization (EBITDA) is operating income plus depreciation and amortization. A reconciliation of net income to non-GAAP EBITDA is included in a schedule to the press release filed with this report. -2- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized. K&F INDUSTRIES, INC. By: /s/ DIRKSON R. CHARLES ----------------------- Name: Dirkson R. Charles Title: Chief Financial Officer Date: August 11, 2004 -3- EXHIBIT INDEX Exhibit Description - ------- ----------- 99.1 Press Release issued August 11, 2004 regarding the Company's second quarter 2004 earnings. -4- EX-99.1 2 y00258exv99w1.txt PRESS RELEASE Exhibit 99.1 K & F INDUSTRIES Contact: Kenneth M. Schwartz K & F Industries, Inc. (212) 297-0900 K & F INDUSTRIES, INC. REPORTS RESULTS FOR THE SECOND QUARTER AND THE SIX MONTHS ENDED JUNE 30, 2004 NEW YORK - August 11, 2004 - K & F Industries, Inc. today reported its results for the second quarter and six months ended June 30, 2004. Compared to last year, net income for the quarter doubled to $8 million, a result of strong sales to the commercial airline and general aviation market sectors, and reduced interest expense. On the same basis, sales rose 7 percent in the quarter, and operating income and EBITDA (earnings before interest, taxes, depreciation and amortization) were up 31 percent and 26 percent, respectively, driven by a favorable mix of higher margin products sold, combined with lower operating costs. "Both Aircraft Braking Systems Corporation and Engineered Fabrics Corporation have turned in two consecutive quarters of strong financial performance for 2004," stated Kenneth M. Schwartz, president and chief operating officer of K & F Industries, Inc. "The economy continues to improve, creating increased demand for our commercial and general aviation products. We are well on our way to achieving our plan for 2004," continued Mr. Schwartz. Comparing the quarter ended June 30, 2004 with the quarter ended June 30, 2003: o Sales totaled $84 million, up 7 percent from $78 million. o Commercial revenues grew $5 million to $47 million. o General aviation sales were $16 million, up 25 percent from $13 million. o Military sales declined $2 million to $21 million. o Bookings were $75 million versus $73 million. o Operating income was $22 million, up 31 percent from $17 million. o EBITDA was $25 million, up $5 million from $20 million. o EBITDA margins increased to 29.6 percent from 25.1 percent. o Cash on hand at June 30, 2004 was $44 million. Comparing the six months ended June 30, 2004 with the six months ended June 30, 2003: o Sales totaled $167 million, versus $160 million. o Commercial revenues were $91 million up slightly from $89 million. o General aviation sales were $31 million, up 24 percent from $25 million. o Military sales were flat at $45 million versus $46 million. o Bookings rose 11 percent to $165 million from $148 million. o Operating income was $44 million versus $38 million. o EBITDA increased 15 percent to $50 million from $44 million. o EBITDA margins rose to 30.2 percent from 27.3 percent. -5- EBITDA includes a charge for shipments of original equipment to airplane manufacturers (program investments, which are sold at a discount to cost and expensed when shipped) of $16 million and $13 million for the first six months of 2004 and 2003, respectively. Segment Results for the Periods Ended June 30, 2004 --------------------------------------------------- o Revenues for Aircraft Braking Systems Corporation were $69 million and $138 million, for the second quarter and first half respectively, compared to $64 million and $135 million last year. o Revenues for Engineered Fabrics Corporation were $14 million for the second quarter, flat with the prior year's second quarter, and up 13 percent to $29 million for the first half. Two New Program Awards in 2004 ------------------------------ In the second quarter, ABSC was selected by Gulfstream Aerospace Corporation to supply wheels, carbon brakes and a combined digital antiskid and brake temperature monitoring system for its new G-350 aircraft. As Gulfstream's primary wheel and brake supplier, ABSC provides original equipment for five of the seven aircraft models currently offered by Gulfstream, including the G-100, G-150, G-200, G-350 and G-450. In July 2004, ABSC was selected by Dassault Aviation to supply wheels, carbon brakes, and a digital brake-by-wire brake control system for the new transatlantic Falcon 900DX. This award follows the certification and entry into service with ABSC equipment of the Falcon 900EX-EASy in December 2003. In 2002, Dassault also selected ABSC as their braking system supplier for their all new top-of-the-line business jet, the Falcon 7X. Financial Guidance Reaffirmed ----------------------------- K & F reaffirms its previously reported guidance for 2004. Compared to 2003, sales are expected to improve slightly and EBITDA and net income should be flat, reflecting an increased level of expensed program investments in 2004. K & F Industries Inc., through its Aircraft Braking Systems Corporation subsidiary, is a worldwide leader in the manufacture 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, de-icing equipment and specialty coated fabrics used for storage, shipping, environmental and rescue applications for commercial and military use. # # # -6- Notice to Recipients Any market analysis or financial projection presented here 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 here 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 and may continue to make forward-looking statements, orally, in writing or 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. This press release should be read in conjunction with our periodic reports filed with the SEC. -7- K & F INDUSTRIES, INC. CONSOLIDATED STATEMENTS OF INCOME (In thousands) Three Months Six Months Ended Ended June 30, June 30, -------------------- -------------------- 2004 2003 2004 2003 -------- -------- -------- -------- Sales $ 83,591 $ 77,946 $166,740 $160,021 Costs and Expenses 61,887 61,421 122,335 122,349 -------- -------- -------- -------- Operating Income 21,704 16,525 44,405 37,672 Interest Expense, net 9,742 10,709 19,504 21,707 -------- -------- -------- -------- Income Before Income Taxes 11,962 5,816 24,901 15,965 Income Tax Provision 3,926 1,883 8,276 4,616 -------- -------- -------- -------- Net Income $ 8,036 $ 3,933 $ 16,625 $ 11,349 ======== ======== ======== ======== -8- K & F INDUSTRIES, INC. SELECTED FINANCIAL DATA (In thousands) Three Months Six Months Ended Ended June 30, June 30, -------------------- -------------------- 2004 2003 2004 2003 -------- -------- -------- -------- Capital Expenditures $ 593 $ 751 $ 1,240 $ 1,037 Bookings $ 75,370 $ 72,608 $165,014 $148,058 Backlog $128,844 $130,525 Cash and Cash Equivalents $ 44,241 $ 28,248 Total Debt $395,000 $435,000 Shareholders' Deficiency $170,284 $216,176 -9- K & F INDUSTRIES, INC. RECONCILIATION OF NET INCOME TO NON-GAAP EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (EBITDA) (In thousands) Three Months Six Months Ended Ended June 30, June 30, ------------------- ------------------- 2004 2003 2004 2003 ------- ------- ------- ------- Net Income $ 8,036 $ 3,933 $16,625 $11,349 Plus: Income Tax Provision 3,926 1,883 8,276 4,616 Interest Expense, net 9,742 10,709 19,504 21,707 ------- ------- ------- ------- Operating Income 21,704 16,525 44,405 37,672 Plus: Depreciation 1,812 1,969 3,542 3,939 Amortization 1,194 1,059 2,340 2,099 ------- ------- ------- ------- EBITDA $24,710 $19,553 $50,287 $43,710 ======= ======= ======= ======= -10- -----END PRIVACY-ENHANCED MESSAGE-----