Spirit AeroSystems warns of ability to continue as going concern amid cash crunch

Spirit AeroSystems (NYSE:SPR), Boeing’s (BA) key supplier and acquisition target, has raised substantial doubt about its ability to continue as a going concern amid mounting losses, rapid cash burn and production challenges.

Its debt balance as of September 26 was $4.40B, including $426.2M short-term debt. Cash and cash equivalents were $217.6M and $823.5M as of September 26, and December 31, 2023, respectively.

“The company will require additional liquidity to continue its operations over the next 12 months,” it disclosed in its 10-Q filing, adding that it expects to continue generating operating losses for the “foreseeable future.”

Spirit Aero (SPR) said it has been facing bloated inventory and lower cash flows due to recent changes in the production and delivery process implemented by Boeing (BA).

The supplier’s management has developed a plan to improve liquidity, but this is dependent on active discussions related to repayment of customer advances, certain divestitures, merger with Boeing (BA), achieving B737 delivery targets, and the impact of the Boeing strike that just ended.

Management is also looking into additional customer advances, issuing securities or debt financing and restructuring to increase efficiency and cut costs, which may include layoffs or additional furloughs.