“Both AEC and MC again performed well. AEC sales grew by 21 percent compared to Q1 2012, and although EBITDA declined because of write-offs and losses associated with a legacy program in Boerne, the business remains on track for profitable growth. Construction of both LEAP plants and production of parts for testing are on schedule; maturation and industrialization of our production process, systems, and organization continue to advance; and development work on new advanced composite parts for both engine and airframe applications are also proceeding as planned.
“MC performance in the Americas was once again exceptional across the board. In Europe, sales and orders were stable, suggesting once again that the sharp declines that we experienced last year have given way to the more gradual erosion consistent with long-term trends. Only Asia did not perform to expectations; while our share appears to be holding, or even improving incrementally, softness in paper markets in China and Japan contributed to lower sales compared to Q1 of last year.
“Our 2013 outlook for both businesses remains unchanged. As we have stated many times, we view MC as a business with the potential to generate steady year-over-year Adjusted EBITDA. So even though Q1 Adjusted EBITDA was sharply higher than the comparable period a year ago, we continue to expect Adjusted EBITDA for the full-year 2013 to be comparable to 2012. We view the macro-economy as the primary source of short-term risk to this outlook -- both upside risk and down.
“In AEC, the revenue outlook for the foreseeable future will continue to be driven by growth in the LEAP program. For the balance of 2013, the focus in LEAP will remain on development engineering and production of test parts. We expect AEC’s revenue run-rate of the past two quarters to continue through the balance of the year and then to grow steadily for the next several years as our two LEAP plants enter into production.
“In short, performance in Q1 by both businesses was largely consistent with our expectations, and based on that performance, our outlook for the balance of the year and beyond remains unchanged.”