Monday, November 07, 2011

Piper's year-to-year sales numbers continue to improve

INDIAN RIVER COUNTY — Piper Aircraft Inc. continued to see improvement in its year-to-year sales numbers in the third quarter, with revenue up more than 25 percent from the same period last year.

Third-quarter numbers released Monday showed that Piper delivered 34 aircraft and took in $35.3 million in revenue. During that same period last year, the company delivered 32 aircraft for $28.1 million in revenue.

Deliveries of the company’s most expensive planes, the Meridian, Mirage and Matrix, were up overall from 17 to 21 planes in the third quarter this year.

“Operational efficiencies, along with matching new aircraft deliveries to a solid understanding of the evolving market, continue to contribute to the company’s performance, which exceeds industry trends for turboprop and piston aircraft,” said Piper President and Chief Executive Officer Simon Caldecott in a prepared statement accompanying the results.

In other words, the company’s performance is ahead of what is being seen in the general aviation market as a whole.

The General Aviation Manufacturers Association reported Monday that overall deliveries of general aviation airplanes in the first nine months of 2011 dropped 9.8 percent compared with the same period last year, to a total of 1,227 planes. Industry billings, or revenue, fell 10.2 percent, from $13.5 billion to $12.1 billion.

In comparison, Piper’s revenue for the first nine months of the year was $92.5 million, almost 20 percent ahead of where it was the first three quarters of 2010.

The difference is likely to narrow somewhat when year end numbers come out. Last year, Piper saw revenue increase by about 50 percent between the third quarter and fourth quarter. That’s not expected to happen this year.

While traditionally fourth-quarter sales numbers are higher than those in the third quarter, Caldecott doesn’t anticipate a large difference between the two quarters this year. Keeping the numbers fairly stable through the year is in line with the company’s current philosophy of trying to have production more closely match sales, according to Caldecott.

Company officials have said they hope to avoid large swings in employment by not producing more planes than they have orders for.

Instead, the company currently has a backlog of orders that it needs to fill. In fact, Caldecott said the backlog is the strongest it has been in four years.

“We’re looking a lot better going into 2012 than going into 2011,” he said.

While filling these orders will keep employees busy, Caldecott doesn’t anticipate any big turnaround in the industry next year. He anticipates sales next year will be relatively the same as this year.

The company, which at the end of October announced it would be laying off 150 employees and releasing 55 contract workers with the suspension of the Piper Altaire light jet program, does not anticipate hiring or laying off any additional workers at this time. Caldecott did say he expects to announce some organizational changes in the next week or so, but those would be in upper management.

The organizational changes follow the departure last month of former President and Chief Executive Officer Geoff Berger and Executive Vice President Randy Groom. Caldecott, formerly vice president of operations, was selected to take over Berger’s post.

Although it discontinued its light business jet program, the company in early October announced a number of upgrades it hoped would attract more buyers to the latest versions of its core airplanes.

“In the latter half of next year I want to be in the position where we can announce another upgrade,” said Caldecott.

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