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Hawker Beechcraft posts $44 million loss in October

  • The Wichita Eagle
  • Published Tuesday, Nov. 27, 2012, at 4:50 p.m.

Hawker Beechcraft posted a $44.1 million net loss in October and $95 million in negative cash flow, the company reported in a filing with the U.S. Bankruptcy Court, Southern District of New York.

The company, which filed for Chapter 11 bankruptcy restructuring in May, posted $108.6 million in sales in October.

Hawker Beechcraft began October with $127.1 million in cash. It ended the month with $32.1 million in cash and recorded a negative cash flow of $95 million, according to the filing.

Receipts for commercial and government aircraft and customer support totaled $114.2 million. Payroll and benefits, pension, restructuring and other operating disbursements totaled $162.7 million. Disbursements also included $2 million in debtor-in-possession interest and fees and a $27 million principal payment on loans.

“The rescue is costing them a fortune,” said Wayne Plucker, an aerospace and defense industry manager for Frost & Sullivan. “There’s the servicing of major debt there and payments to the lenders. That’s a big impact – along with a still soft market.”

In addition, “I imagine there are folks who are staying away from them simply because they are in bankruptcy,” Plucker said.

Potential customers wonder where they are going to get support for their aircraft if the company is in bankruptcy, he said.

“In reality, that hasn’t traditionally been a problem,” Plucker said. “But that’s always a perceived problem.”

Few airplanes go without support, he said.

With the net loss and negative cash flow, “it sounds like they’re going to have to go back to the well,” Plucker said.

Still, the fourth quarter in a year is typically the biggest quarter for airplane deliveries. And that has traditionally helped the planemakers’ cash flow, Plucker said.

“Traditionally by December 15, one expects a whole bunch of checks for airplanes, because they will have worked real hard to have produced by that date,” Plucker said. “You don’t have to deliver very many airplanes to make a bundle of cash.”

Separately, a hearing before the bankruptcy judge Stuart Bernstein is scheduled for Thursday.

In the hearing, the judge will consider the adequacy of the company’s disclosure statement, a voting record date and voting deadline, procedures for gathering and tabulating votes on the company’s reorganization plan and for filing objections to the plan.

The financially troubled company has lost millions in the months since it filed for reorganization.

Hawker Beechcraft plans to emerge early next year as a stand-alone company called Beechcraft Corp. focusing on its King Air, Beechcraft and military products.

A plan to sell the business, except for the defense business, to Superior Aircraft Beijing in China fell apart in October.

Contact Molly McMillin at 316-269-6708 or mmcmillin@wichitaeagle.com.

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