WICHITA, Kan., May 7, 2024 /PRNewswire/ --  First Quarter 2024 Revenues of $1.7 billion EPS of $(5.31); Adjusted EPS* of $(3.93) Cash used in operations of $416 million; Free cash flow* usage of $444 million Currently engaged in discussions with Boeing on the possible acquisition of Spirit AeroSystems Spirit AeroSystems Holdings, Inc. (NYSE:SPR) ("Spirit," "Spirit AeroSystems" or the "Company") reported first quarter 2024 financial results. Table 1.  Summary Financial Results (unaudited) 1st Quarter ($ in millions, except per share data) 2024 2023 Change Net Revenues $1,703 $1,431 19 % Operating Loss ($528) ($95)  **  Operating Loss as a % of Revenues (31.0 %) (6.6 %)  **  Net Loss ($617) ($281)  **  Net Loss as a % of Revenues (36.2 %) (19.6 %)  **  Loss Per Share (Fully Diluted) ($5.31) ($2.68) (98 %) Adjusted Loss Per Share (Fully Diluted)* ($3.93) ($1.69)  **  Fully Diluted Weighted Avg Share Count 116.2 104.9 **     Represents an amount in excess of 100% or not meaningful. "The first quarter was characterized by several events, one of great significance was the partnership with Boeing to make improvements to the safety and quality of our production systems. We collaborated with Boeing to align 737 fuselage product inspection as close as possible to where the work is performed at our factories in Wichita. This is a significant accomplishment that we believe will enhance quality, eliminate rework, and benefit the entire production system between our companies," said Pat Shanahan, President and Chief Executive Officer, Spirit AeroSystems. Boeing 737 Update As of March 1, 2024, Spirit and Boeing have performed joint product verification to ensure conformity prior to transportation to Renton final assembly. Consequently, Spirit's deliveries to Boeing have been delayed and undelivered units have been built-up in Wichita, Kansas, resulting in higher levels of inventory and contract assets and lower operational cash flows.  During late 2023, the Company prepared for expected increases in production rates which have now been delayed. Spirit's current Boeing 737 production rate is approximately 31 aircraft per month, which the Company anticipates remaining at through the end of this year. Spirit's ability to align factory costs, which include both internal and supply chain related spending, and to react to sudden changes in production rates will have a material impact on results of operations and cash flows throughout 2024. Revenue Spirit's revenue in the first quarter of 2024 increased from the same period of 2023, primarily due to higher production activities on Commercial programs and higher Defense and Space revenues. Overall deliveries decreased to 307 shipsets during the first quarter of 2024 compared to 346 shipsets in the same period of 2023. Spirit's backlog at the end of the first quarter of 2024 was approximately $49 billion, which includes work packages on all commercial platforms in the Airbus and Boeing backlog.   Earnings Operating loss for the first quarter of 2024 was higher compared to the same period of 2023, primarily driven by the higher unfavorable changes in estimates during the current period. Additionally, the first quarter of 2024 was negatively impacted by Boeing's schedule changes in March and the investigation and quality audits resulting from the Alaska Airlines incident. Total change in estimates in the first quarter of 2024 included net forward losses of $495.4 million and unfavorable cumulative catch-up adjustments for periods prior to the first quarter of $39.2 million. Net forward losses were primarily driven by the Airbus A350 and A220 programs of $280.8 million and $167.0 million, respectively, due to the inability to reach a conclusion to pricing negotiations with Airbus, additional firm orders, and production cost growth. The forward losses on the Airbus A350 and A220 programs include net incremental losses for anticipated performance obligations beyond 2026 of $168.3 million in total. Additionally, the Boeing 787 program drove $34.1 million of forward losses, due to supply chain and labor cost growth. Unfavorable cumulative catch-up adjustments were primarily related to the Boeing 737 program, as discussed above. Excess capacity costs during the first quarter of 2024 were $26.1 million. In comparison, during the first quarter of 2023, Spirit recognized $110.0 million of net forward loss charges, $11.9 million of unfavorable cumulative catch-up adjustments and excess capacity costs of $43.3 million. First quarter 2024 EPS was $(5.31) compared to $(2.68) in the same period of 2023. First quarter 2024 adjusted EPS* was $(3.93), which excludes the incremental deferred tax asset valuation allowance. In the same period of 2023, adjusted EPS* was $(1.69), which excluded the incremental deferred tax asset valuation allowance and pension termination charges. (Table 1)   Cash Cash from operations and free cash flow* during the first quarter of 2024 were negatively impacted by the disruption to Boeing 737 production and delivery delays. Cash from operations and free cash flow* during the first quarter of 2023 reflects a $180 million surplus cash payment received related to the termination of Pension Value Plan A. The cash balance at the end of the first quarter of 2024 was $352 million. (Table 2)    Events in the first quarter of 2024 have resulted in significant reductions in projected revenue and cash flows this year. These recent events include the production and delivery process changes implemented by Boeing and lower than planned 737 production rates following the in-flight Alaska Airlines incident and the inability to reach a conclusion to pricing negotiations with Airbus. Management has developed plans to pursue various options to improve liquidity as needed and expects these plans will sufficiently improve the Company's liquidity needs. Table 2.  Cash Flow, Cash and Total Debt (unaudited) 1st Quarter ($ in millions) 2024 2023 Change Cash used in Operations ($416) ($46) ** Purchases of Property, Plant & Equipment ($29) ($23) (25 %) Free Cash Flow* ($444) ($69) ** March 28, December 31, Cash and Total Debt 2024 2023 Cash $352 $824 Total Debt $4,072 $4,084 **  Represents an amount in excess of 100% or not meaningful. 2024 Financial Outlook Spirit will not be providing guidance until there is further clarity on the acquisition discussions with Boeing, 737 MAX delivery and production timing, as well as ongoing commercial negotiations with Airbus. Subsequent Events As described in the Form 8-K filed by the Company on April 23, 2024, on April 18, 2024, the Company entered into a Memorandum of Agreement with Boeing to provide $425.0 million of cash advances, based upon the Company maintaining a production rate that supports Boeing's production demand in accordance with certain long-term supply agreements, which Spirit expects to receive in the second quarter of 2024. Additionally, subsequent to the end of the first quarter, Spirit received indications that Boeing expects a slower increase in production and deliveries on the Boeing 787 program. While the Company has not received a formal schedule change, Spirit has completed a preliminary assessment relevant to the anticipated impact of this expected schedule change. As a result of this preliminary assessment, the Company expects to incur an incremental forward loss of approximately $50 to $60 million in the second quarter of 2024 due to reduced production volumes and the inability to reduce variable costs in a timely manner and the corresponding amount of fixed overhead absorption applied to lower deliveries. This preliminary assessment is subject to change if Boeing further revises its production and delivery plans. Segment Results Commercial Commercial segment revenue in the first quarter of 2024 increased from the same period of the prior year, primarily due to higher production across most programs. Operating margin for the first quarter of 2024 decreased compared to the same period of 2023, primarily driven by higher changes in estimates as well as the results of the changes implemented on the product verification process in March. In the first quarter of 2024, change in estimates for the segment included $493.8 million of net forward losses and $38.9 million of unfavorable cumulative catch-up adjustments. Additionally, during the first quarter of 2024, the Commercial segment included excess capacity costs of $24.9 million. In comparison, during the first quarter of 2023, the segment recognized $109.9 million of net forward losses, $11.0 million of unfavorable cumulative catch-up adjustments and excess capacity costs of $40.9 million. Defense & Space Defense & Space segment revenue in the first quarter of 2024 increased from the same period of the prior year, primarily due to higher activity on development and classified programs as well as the Sikorsky CH-53K and FLRAA programs in the current period. Operating margin for the first quarter of 2024 increased compared to the same period of 2023, primarily due to higher activities on classified programs. Aftermarket Aftermarket segment revenue in the first quarter of 2024 increased slightly from the same period of the prior year, primarily due to higher spare part sales, partially offset by decreased maintenance, repair and overhaul (MRO) activity. Operating margin in the first quarter of 2024 decreased compared to the first quarter of 2023, primarily due to lower MRO activity during the current period. Table 3.  Segment Reporting (unaudited) 1st Quarter ($ in millions) 2024 2023 Change Segment Revenues    Commercial $1,356.1 $1,148.5 18.1 %    Defense & Space 250.8 188.4 33.1 %    Aftermarket 95.9 94.5 1.5 % Total Segment Revenues $1,702.8 $1,431.4 19.0 % Segment (Loss) Earnings from Operations    Commercial ($484.9) ($45.5) **    Defense & Space 32.2 19.2 67.7 %    Aftermarket 17.2 19.2 (10.4 %) Total Segment Operating (Loss) Earnings  ($435.5) ($7.1) ** Segment Operating (Loss) Earnings as % of Revenues    Commercial (35.8 %) (4.0 %)  **     Defense & Space 12.8 % 10.2 %   260  BPS     Aftermarket 17.9 % 20.3 %   (240) BPS  Total Segment Operating (Loss) Earnings as % of Revenues (25.6 %) (0.5 %)  **  Unallocated Expense SG&A ($81.5) ($77.4) (5.3 %) Research & Development (10.6) (10.6) ** Total Loss from Operations ($527.6) ($95.1) ** Total Operating Loss as % of Revenues (31.0 %) (6.6 %)  **  **     Represents an amount in excess of 100% or not meaningful. Cautionary Statement Regarding Forward-Looking Statements  You should read the discussion of our financial condition and results of operations in conjunction with the unaudited condensed consolidated financial statements and the notes to the unaudited condensed consolidated financial statements appearing in the Company's Annual Report on Form 10-K and the Company's Quarterly Reports on Form 10-Q. The press release may include "forward-looking statements" within the meaning of Section 27A of the ...