AOPA Pilot Blog: Reporting Points

As anticipated, Hawker Beechcraft has released its Form 10-K to the Securities and Exchange Commission reporting an operating loss of $481.8 million and a net loss of $632.8 million on sales of $2.44 billion for 2011. (Net losses were $451.6 million in 2009 and $304.9 million in 2010.) The company is $2.33 billion in debt. At the bottom of this paragraph is a link to the actual report, and you can read about the loss figures on page 47. On page 50 is the previously expected comment that there is doubt the company can continue. That said, Hawker Beechcraft will continue, possibly through sales of assets alone, but the more likely scenario is a Chapter 11 bankruptcy that allows it to reorganize. The company has completed agreements with several lenders using aircraft as collateral to pave the way. The publication Corporate Jet Investor reports a restructuring plan could be announced April 30, or if all lenders agree, it could be delayed to May 15.  Here is the actual filing.

Here from the report is what Hawker Beechcraft is required to say by company-hired accountants in the just-released report: “As of December 31, 2011, Management has concluded that there is substantial doubt about the Company’s ability to continue as a going concern. This conclusion was reached based on a variety of factors, including those described below. We determined not to pay our interest obligations under the Notes on April 2, 2012 and anticipate an inability to pay interest on the Notes on future interest payment dates. Furthermore, we will be required to repay or refinance our Senior Secured Credit Facilities and the Senior Tranche Advance prior to the repayment of the Notes and we will be required to repay or refinance the Senior Notes prior to the repayment of the Senior Subordinated Notes. The Company has suffered recurring operating losses resulting in a significant net shareholder’s deficit that raises substantial doubt about its ability to continue as a going concern. The Company is operating under a forbearance agreement with its lenders which defers interest payment obligations and provides relief from loan covenants through June 29, 2012. Due to the fact that we have recurring negative cash flows from operations and recurring losses from operations, we will need to seek additional financing. There is substantial doubt that we will be able to obtain additional equity or debt financing on favorable terms, or at all, in order to have sufficient liquidity to meet our cash requirements for the next twelve months.”

Here’s some analysis of what is going on from Morgan Stanley manager Heidi Wood, as reported by AOPA Editor at Large Tom Horne.

Tags: business aircraft, Form 10K, general aviation sales, Hawker Beechcraft

This entry was posted on Friday, April 13th, 2012 at 4:44 pm and is filed under Al Marsh, Editors. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.