B/E Aerospace Record Fourth Quarter and Full Year 2007 Results Exceed Expectations; 2008 Guidance Increased

Business Wire, Feb 4, 2008

WELLINGTON, Fla. -- B/E Aerospace, Inc. (Nasdaq:BEAV), the world's leading manufacturer of aircraft cabin interior products and the leading aftermarket distributor of aerospace fasteners, today announced financial results for the fourth quarter and full year 2007.

Highlights

* Record fourth quarter revenues of $463.5 million reflect 44.1 percent year-over-year organic growth.

* Record fourth quarter operating earnings of $67.9 million were 57.9 percent higher than the fourth quarter of the prior year. Fourth quarter operating margin of 14.6 percent expanded by 120 basis points versus the fourth quarter of the prior year.

* Fourth quarter net earnings of $42.3 million were $20.6 million, or 94.9 percent, greater than net earnings of $21.7 million in the fourth quarter of the prior year. Fourth quarter net earnings per diluted share of $0.46 increased 64.3 percent, or $0.18 per diluted share, as compared with the same period in the prior year, despite the 380 basis point increase in the effective tax rate and the 17 percent increase in weighted average shares outstanding in the 2007 period as compared to the same period in the prior year.

* Fourth quarter earnings per diluted share of $0.46 were $0.05 per share higher than company guidance provided in October 2007 and $0.02 per share higher than consensus estimates.

* Bookings for the quarter totaled approximately $600 million, representing a record for any quarter, and represent a book-to-bill ratio of approximately 1.3:1. Backlog as of December 31, 2007 was a record at approximately $2.2 billion and is up approximately 30 percent versus the prior year.

* Record full year 2007 revenues of $1.68 billion were 48.7 percent higher than the prior year. Record full year 2007 net earnings of $147.3 million increased by $61.7 million or 72.1 percent.

* Record full year 2007 net earnings per diluted share of $1.66 increased $0.56 per diluted share, or 50.9 percent, reflecting a 31.5 percent effective tax rate in 2007 versus a 4.9 percent effective tax rate in 2006, and a 14 percent increase in weighted average shares outstanding. Adjusted full year 2007 earnings per diluted share, exclusive of debt prepayment costs of approximately $0.08 per share, were $1.74 per share.

* Full year 2008 financial guidance is increased to approximately $2.29 per diluted share.

Fourth Quarter Performance

The 57.9 percent growth in operating earnings as compared to the fourth quarter of last year was driven by a 44.1 percent increase in revenues and a 120 basis point expansion in operating margin. Revenue growth was driven by robust market conditions, market share gains, and particularly strong aftermarket retrofit program revenues from major international airlines. The 14.6 percent operating margin was 120 basis points higher than the same period last year reflecting the high in quality backlog and operating leverage at the higher revenue level despite start up and learning curve costs on new programs, primarily in the seating and engineering services segments.

Net earnings for the fourth quarter were $42.3 million, or $0.46 per diluted share, as compared with net earnings of $21.7 million, or $0.28 per diluted share, in the fourth quarter of 2006. Net earnings increased by $20.6 million, or 94.9 percent, as compared with the fourth quarter of the prior year. Fourth quarter 2007 earnings per diluted share increased by 64.3 percent, or $0.18 per diluted share, as compared with the same period in the prior year, reflecting the 94.9 percent increase in net earnings, a 380 basis point increase in the effective tax rate and a 17 percent increase in weighted average shares outstanding in the 2007 period.

Fourth Quarter Segment Discussion

Net sales by segment were as follows:

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The 68.8 percent increase in seating segment revenue reflects significant market share gains and was driven by a substantially higher level of aftermarket, retrofit and refurbishment activity, as well as demand created by new aircraft deliveries. The interior systems segment revenue growth rate of 12.1 percent reflects both higher aftermarket demand as well as a higher level of new aircraft deliveries. The interior systems segment fourth quarter revenue growth rate was negatively impacted by an unusually high level of deliveries of military oxygen products in the 2006 period.

The distribution segment revenue growth rate of 27.4 percent reflects a significant expansion in product line, a broad-based increase in aftermarket demand for aerospace fasteners and continued market share gains.

Business jet segment revenue increased by $18.2 million, or 47.2 percent, while engineering services segment revenue growth was $19.7 million, or 113.9 percent.

The following is a summary of operating earnings by segment:

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Seating segment operating earnings of $20.5 million in the fourth quarter of 2007 increased by $9.7 million, or 89.8 percent, as compared with the same period in the prior year. The seating segment operating margin of 11.5 percent expanded by 130 basis points as compared with the same period in the prior year reflecting the high in quality backlog and operating leverage at the higher revenue level, despite start up and learning curve costs on new programs. The seating segment operating margin, which expanded by 180 basis points during 2007, is expected to deliver further significant margin expansion beginning in the second quarter of 2008 as a result of the segment's high in quality backlog, operational efficiency initiatives and operating leverage.