Spirit Aerosystems (SPR.US), a Boeing supplier, warns of "significant doubts" about continuing operations

Boeing's (BA.US) major supplier and acquisition target Spirit Aerosystems (SPR.US) warned on Tuesday that there were "significant doubts" about its ability to continue operating as it faces mounting losses, rapid cash burn and production challenges.

As of September 26, the company had $4.4 billion in debt, including $426.2 million in short-term debt. It had $217.6 million in cash and cash equivalents as of September 26 and $823.5 million as of December 31, 2023.

Spirit Aerosystems said in its 10-Q filing: "The Company will need additional liquidity to fund its operations for the next 12 months." It also said it expects to continue to incur operating losses "for the foreseeable future."

Spirit Aerosystems said it has been facing inventory buildup and reduced cash flow due to Boeing's recent adjustments to its production and delivery processes.

The supplier's management has developed a plan to improve liquidity, but it depends on positive discussions regarding repayment of customer deposits, divestiture of certain assets, a merger with Boeing, achieving B737 delivery targets, and the impact of the recently ended Boeing strike.

Management is also considering increasing customer deposits, issuing securities or debt financing, and restructuring to improve efficiency and cut costs, which may include layoffs or increased furloughs.

As of writing, Spirit Aerosystems was down 0.21% premarket to $32.66. The stock has risen 3% year-to-date, lagging the S&P 500.