Providence, Rhode Island-based Textron Inc. (NYSE: TXT) today reported fourth quarter 2016 income from continuing operations of $0.78 per share compared to $0.81 per share in the fourth quarter of 2015. During this year’s fourth quarter, the company recorded an $8 million pre-tax restructuring charge ($0.02 per share, after-tax). Excluding this item, adjusted income from continuing operations, a non-GAAP measure that is defined and reconciled to GAAP in an attachment to this release, was $0.80 per share for the fourth quarter of 2016.
Revenues in the quarter were $3.8 billion, down 2.5 percent from the fourth quarter of 2015. Textron segment profit in the quarter was $391 million, up $13 million from the fourth quarter of 2015.
“Overall, revenues were down in the quarter but we were encouraged by increasing demand at Industrial and strong operating performance at Bell,” said Textron Chairman and CEO Scott C. Donnelly. “We also completed the first flight of our production Scorpion jet as we continued to ramp investment in this program to position us to compete for opportunities in 2017.”
Full-year income from continuing operations was $3.09 per share compared to $2.50 per share last year. Full-year adjusted income from continuing operations, a non-GAAP measure that is defined and reconciled to GAAP in an attachment to this release, was $2.62 per share, compared to $2.50 in 2015.
Net cash provided by operating activities of continuing operations of the manufacturing group for the full year was $988 million, compared to $1,038 million 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, was $573 million compared to $631 million last year.
Today, Textron announced that it has reached a definitive agreement to acquire Arctic Cat Inc. (NASDAQ: ACAT) in a cash transaction valued at approximately $247 million, plus the assumption of existing debt. Arctic Cat is a leader in the recreational vehicle industry. The company manufactures and markets all-terrain vehicles (ATVs), side-by-sides and snowmobiles, in addition to related parts, garments and accessories under the Arctic Cat® and Motorfist® brand names.
“Arctic Cat is a superb strategic fit for Textron,” said Donnelly. “With our recent product introductions in the outdoor recreational vehicle market under the Stampede name, we believe Arctic Cat, one of the most recognized brands in the industry, provides an excellent platform to expand our portfolio, increase our distribution and create growth within our Specialized Vehicles business.”
Textron has agreed to make a cash tender offer for all outstanding shares of Arctic Cat common stock at a price of $18.50 per share. The tender offer is expected to commence no later than February 7, 2017. The completion of the acquisition is subject to customary conditions and regulatory approvals.
Share Repurchase Plan
On January 24, 2017, Textron’s Board of Directors approved a new authorization for the repurchase of up to 25 million shares, under which the company intends to purchase shares to offset the impact of dilution from stock-based compensation and benefit plans and for opportunistic capital management purposes.
Textron is forecasting 2017 revenues of approximately $14.3 billion, up four percent. Textron expects full-year 2017 GAAP earnings per share from continuing operations will be in the range of $2.40 to $2.65, or $2.50 to $2.70 on an adjusted basis (non-GAAP), which is reconciled to GAAP in an attachment to this release. The company is estimating net cash provided by operating activities of continuing operations of the manufacturing group will be between $1,035 million and $1,135 million and manufacturing cash flow before pension contributions (the non-GAAP measure) will be between $650 and $750 million with planned pension contributions of about $55 million. Textron intends to update its 2017 outlook to include Arctic Cat following the completion of the transaction.
Donnelly continued, “Our outlook reflects the continuation of our strategy around organic growth through new product investments amid challenging end markets. As we transition our product portfolios to comprise a greater percentage of these new offerings, we’ll expect improvement in our growth rate and margins over the longer term.”
Fourth Quarter Segment Results
Revenues at Textron Aviation were down $52 million, primarily due to lower defense and turboprop volumes partially offset by higher pre-owned volume.
Textron Aviation delivered 58 new Citation jets and 28 King Air turboprops in the quarter, compared to 60 jets and 33 King Airs in last year’s fourth quarter.
Textron Aviation recorded a segment profit of $135 million in the fourth quarter compared to $138 million a year ago.
Textron Aviation backlog at the end of the fourth quarter was $1.0 billion, down $73 million from the end of the third quarter.
Bell revenues were down $148 million, as Bell delivered 35 commercial helicopters, compared to 56 units last year, 4 V-22’s in the quarter, down from 8 V-22’s in last year’s fourth quarter and, 8 H-1’s compared to 9 H-1’s last year.
Segment profit was up $2 million despite the decline in revenues, primarily due to favorable performance.
Bell backlog at the end of the fourth quarter was $5.4 billion, up $416 million from the end of the third quarter.
Revenues at Textron Systems increased $69 million, primarily due to higher volume at Marine and Land Systems.
Segment profit was up $12 million, reflecting improved performance.
Textron Systems’ backlog at the end of the fourth quarter was $1.8 billion, down $367 million from the end of the third quarter.
Industrial revenues increased $35 million due to higher volumes at Kautex and Specialized Vehicles.
Segment profit was essentially flat from the fourth quarter of 2015.
Finance segment revenues decreased $2 million and segment profit increased $2 million.
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 Helicopter, Cessna, Beechcraft, Hawker, Jacobsen, Kautex, Lycoming, E-Z-GO, Greenlee, Textron Systems, and TRU Simulation + Training. For more information, visit: www.textron.com.Click here for reuse options!
Copyright 2017 Powersports Business