BEAV

B/E Aerospace, Inc. (BEAV)

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Exchange: NASDAQ
Industry: Consumer Durables
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BE Aerospace, Inc. (BEAV)

February 25, 2013 8:30 am ET

Executives

Greg Powell - Vice President of Investor Relations

Amin J. Khoury - Co-Founder, Executive Chairman and Chief Executive Officer

Werner Lieberherr - President and Chief Operating Officer

T. P. McCaffrey - Chief Financial Officer, Principal Accounting Officer and Senior Vice President

Analysts

Amit Mehrotra - Deutsche Bank AG, Research Division

Howard A. Rubel - Jefferies & Company, Inc., Research Division

Presentation

Greg Powell

Okay. Gentlemen, if you'd like to sit down, we're going to get started here.

Okay. Welcome to our B/E Aerospace Investor Day. I'm glad that you all could make it. It looks like we've got a pretty good turnout. The weather is better obviously, in Miami than New York or Boston or Chicago. So I'm glad that everybody came down. I see a few sunburnt faces out there, so it's like some people had a good weekend as well.

So I'll just -- a quick introduction. I think, that really, we don't need any introduction. I think, most of you know who we are, but I will just run through it again. Amin Khoury is our Chairman, CEO and founder of B/E Aerospace; and to his left is Werner Lieberherr. He's our the President and COO. And to Werner's left is Tom McCaffrey, our Senior Vice President and CFO; and I'm Greg Powell, Vice President, Investor Relations.

One thing I should mention before we get started today is that we rely upon the -- as always, the Safe Harbor exemptions that are outlined and detailed in our SEC filings.

So just to give you a quick overview of our agenda today. I think, most of you might have picked it up, but we are on a very tight schedule. We do want to go visit our facility -- our consumables facility, and so we'll have a bus tour. Our bus will take us over there. But first we'll have a company overview, talk about 2012 and the year that we had and an overview of our outlook and so forth.

We'll break about 9:45 or 9:50. Please just make it a very quick break. Use the restrooms, and then please head straight downstairs to the lobby. We're on the fifth floor, obviously. So if you could just go straight down to the lobby and then go out into the front, we'll have a bus there. And we would like to leave at 10:00, so hopefully everybody is there. And like, if somebody's not, Joann [ph] will be out here trying to direct everybody to make sure that you get -- you do get down to the bus on time. But if there's any issues, please let her know and she can call down to the -- down there and let us know. But please, do try to be prompt down there.

We will -- it'll be about a 25-minute ride over there. We will tour our consumables facility. I think, some of you have been there in the past, but it's been a number of years. So you will see a lot of changes, and I think you'll be very impressed with what they're doing over there and the amount of work that they're doing. And then we'll have a bus to bring us back here, and we'll leave a very informal lunch that you're welcome to join us if you can. I know some people have flights and so forth, but without any further ado, I will turn it over to Amin Khoury.

Amin J. Khoury

Thank you, Greg, and good morning to everyone. We're blown away by the turn out, so thanks for coming down and participating in today's event.

I told Greg that there really ought to be 2 buses, one to the facility and one to the beach. We didn't work that out this year, but maybe next year. So one of the conversations that I was having with Werner this morning. He said, "You know, we've done this meeting here for the last couple of years in February, and the investors have, for most part, seen our CM facility. And while we do invest in it, improve it every year and so on and so forth, you think they might like to make to points in sale in North Carolina where we have our seating facility, and we're really proud of it and it's outstanding, and so on and so forth, and we won all these awards." And I said, "I don't know, Werner. We're about to turn out and win some sales in February."

So I -- as Greg has mentioned, I'm glad to see so many sun-tanned faces, and we welcome you.

So I'll talk a little bit about the company this morning. We'll spend just a couple of minutes talking about history. So since 2005, it's been a pretty steady improvement in operating earnings and margin, and it's been pretty much onward and upward. And we are proud of that performance.

We obviously, went through the financial crisis in 2008 and '09 time period, but the business held up reasonably well. And for the last 2 years, we've delivered records and revenues and earnings and earnings per share and bookings and the whole shooting match.

So a quick review of last year's results. So last year was a very good year. It was the second year in a row where we've had record revenues and record operating earnings and margins have improved and bookings and backlog and earnings per share and so on and so forth. So we're very pleased and happy about the performance that we were able to turn in. And our expectation is that the performances over the next several years look to be kind of a repeat of the last couple of years in terms of the continued growth in earnings and improvement in margins.

So last year sales were up 23% and operating earnings were up 26%, as were earnings per share. And our margin expanded by about 40 basis points to about 17.5%, and it was, all in all, a pretty good year.

We had a very good bookings here last year. Our backlog improved to $3.75 billion. That's our booked backlog and our SFE backlog, or unbooked backlog, improved to 4.2 -- $4.5 billion. So our total backlog was about $8.25 billion. It is well dispersed geographically, North America, Europe and then the emerging markets, Pac [ph] and Asia, Middle East, and we had record bookings again last year. Our total bookings, including SFE bookings, were $3.3 billion. So it was a strong year and our booked backlog was up around 7%.

SFE programs. We've got about $4.5 billion now in unbooked backlog. And our revenues, which last year were about $150 million from our SFE programs, up from about $100 million the prior year. We still feel pretty confident that, that number is likely to be in the $400 million range by 2015. So this is an important growing part of our business.

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