B/E Aerospace Inc. heads into 2012 flush with optimism, buoyed by a record 2011 and an $800 million order from Boeing for aircraft lavatory systems.
The Wellington, Fla.-based manufacturer of aircraft-cabin-interior products reported full-year revenue of $2.5 billion, a 26% increase over 2010.
Net earnings shot up 59% to $227.8 million, or $2.24 per diluted share (a 57.7% increase), the company reported.
"I am pleased to report that our 2011 results were the best in the company's history," B/E Aerospace Chairman and CEO Amin Khoury declared in a news release.
"Sales, earnings, cash flow, bookings and backlog were all records."
Full-year operating earnings jumped 35.4% to $428 million, while operating margin expanded 120 basis points to 17.1% (17.3% adjusted).
"The substantial margin expansion was driven by our commercial-aircraft and business-jet segments, which more than offset the margin drag from the consumables-management-segment acquisitions that we have now begun to integrate," Khoury added.
Khoury also noted that B/E Aerospace in 2011 secured "what might well have been our most important award ever" -- Boeing Co.'s selection of B/E Aerospace as its exclusive manufacturer of modular lavatory systems for the Boeing 737 NG (Next-Generation) family and 737 MAX.
The order is estimated at $800 million, not including retrofit orders, which B/E Aerospace expects to be "substantial."
With the lavatory-system order, B/E Aerospace now has secured $4.4 billion in supplier-furnished-equipment orders, according to the company
'Major New Opportunities'
In Wednesday's earnings conference call, Khoury explained that the lavatory order is significant because it positions B/E Aerospace as a Tier 1 supplier to Boeing.
Plus, the lavatory technology "has applicability in other aircraft types" and offers "the potential for pretty significant retrofit programs," he said.
"And so having gotten the imprimatur of quality and reliability from Boeing on the 737 lav, we think that this sort of opens up major new opportunities for the company," Khoury told analysts.
B/E Aerospace will be busy building the lavatory systems this year, Khoury noted, and likely will ship its first systems to Boeing in third-quarter 2013.
Strong Fourth Quarter
B/E Aerospace closed 2011 on a high note, posting revenue of $654.7 million, a 20.8% year-over-year increase.
Fourth-quarter earnings made a huge leap over fourth-quarter 2010. Fourth-quarter net earnings were $57.3 million, an 83.7% increase, and earnings per diluted share were 56 cents per share, an 80.6% increase.
The company projects continued earnings growth in 2012.
"Based on our record backlog -- both booked and awarded but unbooked -- of almost $7.9 billion, our expectation for continued growth in global passenger travel, and attendant increases in capacity, and our expectation of significantly higher levels of wide-body aircraft deliveries, we are confirming our recently raised 2012 earnings guidance of $2.75 per diluted share, representing an increase of approximately 23% as compared to 2011," Khoury said in a news release.
In other B/E Aerospace news, the company on Jan. 30 acquired UFC Aerospace Corp. -- a provider of supply chain management and inventory logistics solutions -- in a $400 million all-cash deal.