HEXCEL CORP /DE/ (HXL)
SIC breadcrumb: Manufacturing > Chemicals And Allied Products > SIC 2821 Plastic Materials, Synth Resins & Nonvulcan Elastomers
SEC company page: https://www.sec.gov/edgar/browse/?CIK=717605. Latest filing source: 0001193125-26-046377.
Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
|---|---|---|---|---|
| Revenue | 1,893,900,000 | USD | 2025 | 2026-02-11 |
| Net income | 109,400,000 | USD | 2025 | 2026-02-11 |
| Assets | 2,704,000,000 | USD | 2025 | 2026-02-11 |
Financials
Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-11. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000717605.json. Derived margins are computed from the extracted annual SEC facts.
| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 2,004,300,000 | 1,973,300,000 | 2,189,100,000 | 2,355,700,000 | 1,502,400,000 | 1,324,700,000 | 1,577,700,000 | 1,789,000,000 | 1,903,000,000 | 1,893,900,000 |
| Net income | 105,700,000 | 132,100,000 | 109,400,000 | |||||||
| Operating income | 360,100,000 | 350,600,000 | 371,200,000 | 425,200,000 | 14,100,000 | 51,800,000 | 175,200,000 | 215,300,000 | 186,100,000 | 171,600,000 |
| Gross profit | 564,600,000 | 551,800,000 | 580,800,000 | 640,400,000 | 239,700,000 | 250,100,000 | 357,100,000 | 433,200,000 | 469,800,000 | 434,800,000 |
| Assets | 2,400,600,000 | 2,780,900,000 | 2,824,100,000 | 3,128,600,000 | 2,917,800,000 | 2,819,400,000 | 2,837,300,000 | 2,918,500,000 | 2,725,600,000 | 2,704,000,000 |
| Liabilities | 1,155,700,000 | 1,285,800,000 | 1,502,100,000 | 1,682,500,000 | 1,407,600,000 | 1,333,900,000 | 1,283,100,000 | 1,202,000,000 | 1,197,700,000 | 1,453,300,000 |
| Stockholders' equity | 1,244,900,000 | 1,495,100,000 | 1,322,000,000 | 1,446,100,000 | 1,510,200,000 | 1,485,500,000 | 1,554,200,000 | 1,716,500,000 | 1,527,900,000 | 1,250,700,000 |
| Cash and cash equivalents | 35,200,000 | 60,100,000 | 32,700,000 | 64,400,000 | 103,300,000 | 127,700,000 | 112,000,000 | 227,000,000 | 125,400,000 | 71,000,000 |
| Net margin | 5.91% | 6.94% | 5.78% | |||||||
| Operating margin | 17.97% | 17.77% | 16.96% | 18.05% | 0.94% | 3.91% | 11.10% | 12.03% | 9.78% | 9.06% |
Financial Charts
Quarterly
Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-04-22. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000717605.json.
| Quarter | End Date | Revenue | Net Income | Diluted EPS | Method |
|---|---|---|---|---|---|
| 2012-Q2 | 2012-06-30 | 0.47 | reported discrete quarter | ||
| 2012-Q3 | 2012-09-30 | 0.39 | reported discrete quarter | ||
| 2013-Q1 | 2013-03-31 | 0.43 | reported discrete quarter | ||
| 2013-Q2 | 2013-06-30 | 0.48 | reported discrete quarter | ||
| 2013-Q3 | 2013-09-30 | 0.48 | reported discrete quarter | ||
| 2014-Q1 | 2014-03-31 | 0.50 | reported discrete quarter | ||
| 2014-Q2 | 2014-06-30 | 0.51 | reported discrete quarter | ||
| 2014-Q3 | 2014-09-30 | 0.57 | reported discrete quarter | ||
| 2015-Q1 | 2015-03-31 | 0.70 | reported discrete quarter | ||
| 2015-Q2 | 2015-06-30 | 0.63 | reported discrete quarter | ||
| 2015-Q3 | 2015-09-30 | 0.55 | reported discrete quarter | ||
| 2016-Q1 | 2016-03-31 | 0.59 | reported discrete quarter | ||
| 2020-Q4 | 2020-12-31 | -19,400,000 | derived Q4 = FY annual - nine-month YTD | ||
| 2021-Q1 | 2021-03-31 | -14,000,000 | reported discrete quarter | ||
| 2021-Q4 | 2021-12-31 | 18,900,000 | derived Q4 = FY annual - nine-month YTD | ||
| 2022-Q1 | 2022-03-31 | 17,800,000 | reported discrete quarter | ||
| 2022-Q4 | 2022-12-31 | 37,000,000 | derived Q4 = FY annual - nine-month YTD | ||
| 2023-Q1 | 2023-03-31 | 42,700,000 | reported discrete quarter | ||
| 2023-Q2 | 2023-06-30 | 454,300,000 | reported discrete quarter | ||
| 2023-Q3 | 2023-09-30 | 419,500,000 | reported discrete quarter | ||
| 2023-Q4 | 2023-12-31 | 457,500,000 | -18,200,000 | derived Q4 = FY annual - nine-month YTD | |
| 2024-Q1 | 2024-03-31 | 472,300,000 | 36,500,000 | reported discrete quarter | |
| 2024-Q2 | 2024-06-30 | 500,400,000 | reported discrete quarter | ||
| 2024-Q3 | 2024-09-30 | 456,500,000 | reported discrete quarter | ||
| 2024-Q4 | 2024-12-31 | 473,800,000 | 5,800,000 | derived Q4 = FY annual - nine-month YTD | |
| 2025-Q1 | 2025-03-31 | 456,500,000 | 28,900,000 | reported discrete quarter | |
| 2025-Q2 | 2025-06-30 | 489,900,000 | reported discrete quarter | ||
| 2025-Q3 | 2025-09-30 | 456,200,000 | reported discrete quarter | ||
| 2025-Q4 | 2025-12-31 | 491,300,000 | 46,400,000 | derived Q4 = FY annual - nine-month YTD | |
| 2026-Q1 | 2026-03-31 | 501,500,000 | 37,200,000 | reported discrete quarter |
Quarterly Charts
Macro Cross-References
- CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
- UNRATE - Unemployment Rate
- FEDFUNDS - Federal Funds Effective Rate
- CES0500000003 - Average Hourly Earnings of All Employees, Total Private
- DFEDTARU - Federal Funds Target Range - Upper Limit
- DFEDTARL - Federal Funds Target Range - Lower Limit
- DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
- DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
- DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
- T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
- CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
- CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
- CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
- CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
- PCEPI - Personal Consumption Expenditures: Chain-type Price Index
- PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
- PPIACO - Producer Price Index by Commodity: All Commodities
- T10YIE - 10-Year Breakeven Inflation Rate
- U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
- PAYEMS - All Employees, Total Nonfarm
- CIVPART - Labor Force Participation Rate
- EMRATIO - Employment-Population Ratio
- UNEMPLOY - Unemployed
- CE16OV - Employment Level
- ICSA - Initial Claims
- JTSJOL - Job Openings: Total Nonfarm
- JTSQUR - Quits: Total Nonfarm
- GDPC1 - Real Gross Domestic Product
- A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
- INDPRO - Industrial Production: Total Index
- TCU - Capacity Utilization: Total Index
- HOUST - New Privately-Owned Housing Units Started: Total Units
- PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
- RSAFS - Advance Retail Sales: Retail Trade
- PCE - Personal Consumption Expenditures
- DSPIC96 - Real Disposable Personal Income
- PSAVERT - Personal Saving Rate
- M2SL - M2
- BOPGSTB - U.S. International Trade in Goods and Services: Balance
- MSPUS - Median Sales Price of Houses Sold for the United States
- HSN1F - New One Family Houses Sold: United States
- RHORUSQ156N - Homeownership Rate in the United States
- TTLCONS - Total Construction Spending: Total Construction in the United States
- RRVRUSQ156N - Rental Vacancy Rate in the United States
- TOTALSL - Total Consumer Credit Owned and Securitized
- REVOLSL - Revolving Consumer Credit Owned and Securitized
- DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
- GDP - Gross Domestic Product
- GPDI - Gross Private Domestic Investment
- GCE - Government Consumption Expenditures and Gross Investment
- PCEC - Personal Consumption Expenditures
- NETEXP - Net Exports of Goods and Services
- GFDEBTN - Federal Debt: Total Public Debt
- GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
- FYFSD - Federal Surplus or Deficit
- FGRECPT - Federal Government Current Receipts
- FGEXPND - Federal Government: Current Expenditures
- MANEMP - All Employees, Manufacturing
- USCONS - All Employees, Construction
- USTRADE - All Employees, Retail Trade
- USFIRE - All Employees, Financial Activities
- USGOVT - All Employees, Government
- AWHAETP - Average Weekly Hours of All Employees, Total Private
- DGORDER - Manufacturers' New Orders: Durable Goods
- NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
- BUSINV - Total Business Inventories
- EXPGS - Exports of Goods and Services
- IMPGS - Imports of Goods and Services
- IR - Import Price Index (End Use): All Commodities
- PPIFIS - Producer Price Index by Commodity: Final Demand
Latest quarter (10-Q)
Latest 10-Q source: 0001193125-26-170597.
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations Business Overview We are a global leader in advanced lightweight composites technology. We propel the future of flight and transportation through excellence in advanced material lightweighting solutions that create a better world for us all. Our broad and unrivaled product range includes carbon fiber, specialty reinforcements, prepregs and other fiber-reinforced matrix materials, honeycomb, resins, engineered core and composite structures for use in commercial aerospace, defense and space, and industrial applications. We serve international markets through manufacturing facilities, sales offices and representatives located in the Americas, Europe, Asia Pacific, India, and Africa. We are a manufacturer of products within a single industry: Advanced Composites. We have two reportable segments: Composite Materials and Engineered Products. The Composite Materials segment is comprised of our carbon fiber, specialty reinforcements, resin systems, prepregs and other fiber-reinforced matrix materials, and honeycomb core product lines and pultruded profiles. The Engineered Products segment is comprised of lightweight high strength composite structures, radio frequency/electromagnetic interference (“RF/EMI”) and microwave absorbing materials, engineered core and specialty machined honeycomb products with added functionality. Recent growth in global air travel and an increase in aircraft build rates has favorably impacted both the Commercial Aerospace market and our business. While our recent performance has benefitted from the positive drivers of air travel demand, we have, in the last several years, been impacted by delays in aircraft production rates, related to, among other factors, global logistics, supply chain destocking and other supply chain constraints. Hexcel has also been negatively impacted by macroeconomic and geopolitical conditions, including inflationary pressures, tariffs, and global conflicts. While these challenges have had and may continue to have further negative impacts on our operations and financial results, we see indicators for a long-term positive outlook in commercial aircraft production and strong demand in the defense and space market as global defense budgets continue to increase as a result of an uncertain geopolitical environment and the development of new platforms. Following the conflict escalation in the Middle East, we are actively monitoring the markets and taking actions to mitigate the near-term impact to our cost base. Currently, we have limited direct exposure, but a prolonged conflict is likely to precipitate cost and logistic pressures as well as inventory challenges. Financial Overview Results of Operations Quarters Ended March 31, (In millions, except per share data) 2026 2025 % Change Net sales $501.5 $456.5 9.9 % Operating income $57.6 $44.2 30.3 % As a percentage of net sales 11.5% 9.7% Net income $37.2 $28.9 28.7 % Diluted net income per common share $0.49 $0.35 40.0 % 16 Net Sales The following table summarizes net sales to third-party customers by segment and end market for the quarters ended March 31, 2026 and 2025: Quarters Ended March 31, (In millions) 2026 2025 % Change Consolidated Net Sales $ 501.5 $ 456.5 9.9 % Commercial Aerospace 332.7 280.1 18.8 % Defense, Space & Other 168.8 176.4 (4.3 )% Composite Materials $ 398.8 $ 365.3 9.2 % Commercial Aerospace 281.2 241.8 16.3 % Defense, Space & Other 117.6 123.5 (4.8 )% Engineered Products $ 102.7 $ 91.2 12.6 % Commercial Aerospace 51.5 38.3 34.5 % Defense, Space & Other 51.2 52.9 (3.2 )% Sales by Segment Composite Materials: Net sales of 398.8million in the first quarter of 2026 increased by $33.5 million or 9.2% from the prior year quarter. Commercial Aerospace sales increased $39.4 million or 16.3% in the first quarter of 2026 and Defense, Space & Other sales decreased $5.9 million or 4.8% as compared to the prior year quarter due in part to the September 30, 2025 divestment of the Austrian-based industrial business which impacted the Other category. Engineered Products: For the first quarter of 2026, net sales of $102.7 million increased $11.5 million or 12.6% as compared to the prior year quarter led by higher Commercial Aerospace sales of $13.2 million. Sales by Market Commercial Aerospace sales of $332.7 million increased 18.8% for the first quarter of 2026 compared to the first quarter of 2025 driven by major programs including the Airbus A350 and A320 and Boeing's 787 and 737 Max. Other Commercial Aerospace sales increased 15.6% for the first quarter of 2026 compared to the first quarter of 2025 due to higher sales for both regional and business jets. Defense, Space & Other sales of $168.8 million decreased 4.3% for the quarter ended March 31, 2026 as compared to the first quarter of 2025 primarily due to the September 30, 2025 divestment of the Austrian-based industrial business. Within Defense and Space, first quarter 2026 sales increased 2.0% from the prior year period driven by European fighter aircraft as well as U.S. and European military helicopters. Gross Margin Quarters Ended March 31, (In millions) 2026 2025 % Change Gross margin $ 134.7 $ 102.4 31.5 % Percentage of sales 26.9 % 22.4 % Gross margin for the first quarters of 2026 and 2025 was 26.9% and 22.4%, respectively. Higher gross margin for the quarter ended March 31, 2026 reflects the impact of favorable sales leverage and mix. 17 Operating Expenses Quarters Ended March 31, (In millions) 2026 2025 % Change SG&A expense $ 49.4 $ 43.3 14.1 % Percentage of sales 9.9 % 9.5 % R&D expense $ 17.8 $ 13.8 29.0 % Percentage of sales 3.5 % 3.0 % Other operating expense $ 9.9 $ 1.1 800.0 % Percentage of sales 2.0 % 0.2 % Selling, general and administrative expenses were higher for the three months ended March 31, 2026 compared to the same period in 2025 primarily due to higher employee-related costs and professional fees. Research and development expenses for the quarter ended March 31, 2026 increased when compared to the prior year period primarily due to higher employee-related expenses and higher material and supplies costs. Other operating expense for the three months ended March 31, 2026 included restructuring expenses related to the expected shutdown of industrial manufacturing at the Leicester, UK facility and fees for a legal matter. Operating Income Quarters Ended March 31, (In millions) 2026 2025 % Change Consolidated operating income $ 57.6 $ 44.2 30.3 % Operating margin 11.5 % 9.7 % Composite Materials 69.7 54.6 27.7 % Operating margin 16.3 % 14.2 % Engineered Products 15.2 5.2 192.3 % Operating margin 14.6 % 5.7 % Corporate & Other (27.3 ) (15.5 ) (76.1 )% Operating income for the first quarter of 2026 and 2025 was $57.6 million and $44.2 million, respectively. The increase in operating income for the first quarter of 2026 compared to the same period last year was driven by the higher sales and gross margin. Interest Expense, Net Quarters Ended March 31, (In millions) 2026 2025 % Change Interest expense, net $ 11.8 $ 7.8 51.3 % Net interest expense for the first quarter ended March 31, 2026 was higher compared to the first quarter of 2025 due to higher average borrowings under the Facility. Provision for Income Taxes Quarters Ended March 31, (In millions) 2026 2025 Income tax expense $ 8.3 $ 7.1 Effective tax rate 18.3 % 19.6 % The tax expense for the quarter ended March 31, 2026 was $8.3 million compared to $7.1 million for the quarter ended March 31, 2025. Financial Condition Liquidity: Cash on hand at March 31, 2026 was $54.1 million as compared to $71.0 million at December 31, 2025. As of March 31, 2026, total debt was $998.1 million as compared to $993.0 million at December 31, 2025. On March 31, 2026, the Company entered into a new credit agreement (the “Credit Agreement”) to refinance its senior unsecured credit facility (the “Facility”). Under the terms of the Credit Agreement the borrowing capacity will remain at $750 million. The 18 Facility matures March 31, 2031. The prior Facility that was scheduled to mature in 2028 was terminated in March 2026. For further discussion, see Note 5. Debt, to the accompanying condensed consolidated financial statements. Under the Facility, total borrowings at March 31, 2026 were $300.0 million, which approximates fair value. The Credit Agreement permits us to issue letters of credit up to an aggregate amount of $50.0 million. As of March 31, 2026, there were no issued letters of credit under the Facility, resulting in undrawn availability under the Facility of $450.0 million. The weighted average interest rate for the Facility was 5.0% for the three months ended March 31, 2026. Short-term liquidity requirements consist primarily of normal recurring operating expenses and working capital needs, capital expenditures, dividend payments, debt obligations and debt service requirements. We expect to meet our short-term liquidity requirements through net cash from operating activities, cash on hand and the Facility. We do not have any significant required debt repayments until February 2027 when our 3.95% Senior Unsecured Notes are due. For further information regarding debt, including our Facility, see Note 5, Debt, to the accompanying condensed consolidated financial statements of this Form 10-Q. The remaining authorization under the Share Repurchase Program at March 31, 2026 was $380.6 million. On April 22, 2026, our Board of Directors declared a quarterly dividend of $0.18 per share payable to stockholders of record as of May 4, 2026, with a payment date of May 11, 2026. Operating Activities: Net cash provided by operating activities for the first three months of 2026 was $19.0 million compared to a net cash use of $28.5 million for the same period last year. Working capital was a cash use of $63.1 million for the first three months of 2026 compared to a use of $97.7 million in the same period in 2025. The lower working capital use in the current year was primarily driven by lower cash payments for payables and accruals compared to the same period in the prior year. Investing Activities: Net cash used for investing activities was $25.2 million and $27.2 million in the first three months of 2025 and 2025, respectively. Payments on the divestiture of the Hartford, Connecticut business were $1.1 million in the first three months of 2025. Financing Activities: Net cash used for financing activities was $10.3 million for first three months of 2025 compared to net cash provided of $18.2 million in the same period in 2025. Borrowings under the Facilities during the first quarter of 2026 were $315.0 million compared to $90.0 million in borrowings for the same period in 2025. Repayments under the Facilities was $310 million during the first quarter of 2026. Quarterly dividend payments to shareholders were $13.7 million during the first quarter of 2026 compared to $13.8 million in the first quarter of 2025. Share repurchases for the quarter ended March 31, 2025 totaled $50.4 million. During the three months ended March 31, 2026, issuance costs related to our new Facility were $1.9 million and financing fees paid during the first three months of 2025, related to the issuance of the 5.875% Senior Unsecured Notes due in 2035, were $3.9 million. Financial Obligations and Commitments: The next significant scheduled debt maturity will not occur until 2027, when the 3.95% Senior Unsecured Notes mature. Certain sales and administrative offices, data processing equipment, vehicles and manufacturing equipment, and facilities are leased under operating leases. Critical Accounting Estimates Our Condensed Consolidated Financia [Excerpt truncated for page length; source filing is linked above.]
Latest 10-K MD&A
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Management’s discussion and analysis of the Company’s financial condition and results of operations for the year ended December 31, 2025, and comparison to the year ended December 31, 2024 should be read in conjunction with the consolidated financial statements and notes of this Annual Report on Form 10-K. For discussion and analysis of financial condition and results of operations for 2024 compared to 2023 refer to Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations in our 2024 Annual Report on Form 10-K, filed with the SEC on February 5, 2025, which is incorporated by reference into this Management’s Discussion and Analysis of Financial Condition and Results of Operations. Business Overview For the Years Ended December 31, (In millions) 2025 2024 Net sales $ 1,893.9 $ 1,903.0 Gross margin % 23.0 % 24.7 % Operating income $ 171.6 $ 186.1 Operating income % 9.1 % 9.8 % Interest expense, net $ 37.7 $ 31.2 Income tax expense $ 25.6 $ 22.8 Net income $ 109.4 $ 132.1 Business Trends Since 2022, the Commercial Aerospace market and our business have seen signs of recovery from the economic impacts of the COVID-19 pandemic, driven by growth in air travel and an increase in aircraft build rates. The post-recovery period, however, has had many challenges across the markets Hexcel operates in, including delays in aircraft production rates, related to, among other impacts, global logistics, supply chain issues, economic conditions, inflationary pressures, tariff impacts, and effects from geopolitical issues and conflicts. While these challenges have had and may continue to have further negative impacts on our operations, supply chain, transportation networks and customers, all of which have and may continue to compress our financial results, we see positive indicators for a sustained recovery in commercial aircraft production and strong demand in the defense and space market as global defense budgets continue to increase as a result of an uncertain geopolitical environment and the development of new platforms. Beginning with the first quarter of 2025, sales are being reported for two markets, Commercial Aerospace, unchanged from past practice, and a new sales category titled Defense, Space & Other, which combines the previous Space & Defense market and the Industrial market. Sales amounts for the year ended December 31, 2024 have been reclassified for comparative purposes. In 2025, our Commercial Aerospace sales decreased 4.0% compared to 2024 primarily due to lower sales for certain Airbus and Boeing programs, partially offset by increased Other Commercial Aerospace sales driven by strength in regional jets. The demand for new commercial aircraft continues to be principally driven by airline passenger traffic (measured by revenue passenger miles) and the replacement rate for existing aircraft. The Commercial Aerospace industry continues to utilize a greater proportion of advanced composite materials with each new generation of aircraft. Defense, Space & Other sales in 2025 increased 5.4% compared to 2024. Year over year growth was led by military helicopters, including the Black Hawk and CH-53-K, as well as other military aircraft structures, launchers and satellites. Results of Operations We have two reportable segments: Composite Materials and Engineered Products. Although these segments provide customers with different products and services, they often overlap within our two end business markets: Commercial Aerospace and Defense, Space & Other. Therefore, we also find it meaningful to evaluate the sales of our segments through these business markets. Further discussion and additional financial information about our segments may be found in Note 18 to the accompanying consolidated financial statements of this Annual Report on Form 10-K. Net Sales: Consolidated net sales of $1,893.9 million for 2025 decreased by less than 1% compared to 2024. The following table summarizes net sales to third-party customers by segment and end market in 2025 and 2024: 34 (In millions) Commercial Aerospace Defense, Space & Other Total 2025 Net Sales Composite Materials $ 980.2 $ 536.0 $ 1,516.2 Engineered Products 166.7 211.0 377.7 Total $ 1,146.9 $ 747.0 $ 1,893.9 61 % 39 % 100 % 2024 Net Sales Composite Materials $ 1,008.2 $ 522.8 $ 1,531.0 Engineered Products 186.0 186.0 372.0 Total $ 1,194.2 $ 708.8 $ 1,903.0 63 % 37 % 100 % Sales by Segment Composite Materials: Net sales of $1,516.2 million for the year ended December 31, 2025 decreased $14.8 million or 1.0% from the prior year. Commercial Aerospace sales decreased 2.8% in 2025 as compared to 2024 primarily driven by lower sales for certain Airbus and Boeing programs. Defense, Space & Other sales for 2025 increased by 2.5% over the prior year primarily driven by higher sales of launchers. Engineered Products: For the year ended December 31, 2025, net sales of $377.7 million increased $5.7 million or 1.5% as compared to the prior year, driven by a 13.4% increase in Defense, Space & Other sales driven by military helicopters and aircraft structures, partially offset by a 10.4% decrease in Commercial Aerospace sales attributable to softness in select Boeing and other commercial aerospace programs. Sales by Market Commercial Aerospace: Net sales of $1,146.9 million decreased 4.0% for the year ended December 31, 2025 as compared to the year ended December 31, 2024 primarily due to lower sales for the Airbus A350, Boeing 787 and 737 MAX, partially offset by increased Airbus A320neo sales. Other Commercial Aerospace sales increased reflecting growth in regional jets. Defense, Space & Other: For the year ended December 31, 2025, net sales of $747.0 million increased 5.4% as compared to the year ended December 31, 2024. The increase was due to strength in domestic and international helicopter programs including the Black Hawk, CH-53K, and a European fighter program as well as growth in launchers and satellites. 2025 Consolidated Results Compared to 2024 Gross Margin: Gross margin for 2025 was $434.8 million or 23.0% of net sales as compared to $469.8 million or 24.7% of net sales in 2024. Lower margins for 2025 as compared to the prior year were due to sales mix, tariffs, and inventory reduction actions which drove unfavorable cost leverage. Selling, General and Administrative (“SG&A”) Expenses: SG&A expenses for 2025 were $169.0 million or 8.9% of net sales as compared to $176.6 million or 9.3% of net sales for 2024. The $7.6 million decrease in SG&A expenses in 2025 compared to 2024 was primarily due to lower employee-related costs partially offset by higher professional fees. Research and Technology (“R&T”) Expenses: R&T expenses for 2025 were $56.4 million or 3.0% of net sales and in 2024 were $57.1 million or 3.0% of net sales. The year-over-year decrease of $0.7 million was primarily attributable to lower material and supplies costs. Other operating expense: For the year ended December 31, 2025, other operating expense was $37.8 million which included charges of $28.2 million related to the closure of the Belgium facility, $4.5 million for the divestitures of the Austria and Hartford, Connecticut businesses and a $3.9 million non-income tax charge related to the net value of a foreign entity. Other operating expense for the year ended December 31, 2024 of $50.0 million included $47.7 million of asset impairments and other charges primarily associated with the divestiture of the Austria business and $2.3 million of restructuring costs. 35 Operating income: Operating income for the year ended December 31, 2025 was $171.6 million as compared to $186.1 million for the year ended December 31, 2024. Operating income as a percent of sales was 9.1% and 9.8% in 2025 and 2024, respectively. The decrease in operating income in 2025 compared to 2024 was driven by lower margins, partially offset by lower SG&A expenses and Other operating expense as mentioned above. Depreciation and amortization expense of $122.3 million for the year ended December 31, 2025 decreased $1.7 million from the year ended December 31, 2024. Other income: Other non-operating income for the year ended December 31, 2025 of $1.1 million included settlement and curtailment gains related to our U.S. and Belgium retirement plans, partially offset by debt extinguishment costs. We did not incur other non-operating income in 2024. Interest expense: Interest expense was $37.7 million and $31.2 million for the years ended December 31, 2025 and 2024, respectively, with the year over year increase due to higher average debt levels. Income tax expense: For the years ended December 31, 2025 and 2024, we had a tax provision of $25.6 million and $22.8 million, respectively. Net income: Net income was $109.4 million or $1.37 per diluted share for the year ended December 31, 2025 compared to net income of $132.1 million or $1.59 per diluted share for the year ended December 31, 2024. The decrease in 2025 was driven by lower margins. Financial Condition In 2025, we ended the year with total debt, net of cash, of $922.0 million and generated $230.5 million of operating cash resulting in $157.2 million of free cash flow (cash provided by operating activities less cash paid for capital expenditures). We expect our cash flow needs for fiscal year 2026 will be funded by cash generated from our operations as well as available borrowings under our Senior Unsecured Revolving Credit Facility (the “Facility”) as needed. We have a portfolio of derivatives related to currencies, interest rates and commodities. We monitor our counterparties, and we only use those rated investment grade. Liquidity Our cash on hand at December 31, 2025 was $71.0 million, as compared to $125.4 million at December 31, 2024. Of the total cash on hand at December 31, 2025, $39.9 million was held by our foreign locations. As of December 31, 2025 total debt was $993.0 million, as compared to $700.7 million at December 31, 2024. As of December 31, 2025, we were in compliance with all debt covenants. As of December 31, 2025, total outstanding borrowings under the Facility were $295.0 million. The credit agreement for the Facility permits us to issue letters of credit up to an aggregate amount of $50 million. Outstanding letters of credit reduce the amount available for borrowing under the Facility. As of December 31, 2025, there were no issued letters of credit under the Facility, resulting in undrawn availability under the Facility of $455.0 million. Short-term liquidity requirements consist primarily of normal recurring operating expenses and working capital needs, capital expenditures, dividend payments, debt obligations and debt service requirements. We expect to meet our short-term liquidity requirements through net cash from operating activities, cash on hand and the Facility. As of December 31, 2025, long-term liquidity requirements consist primarily of obligations under our long-term debt obligations. We do not have any significant required debt repayments until February 2027 when our 3.95% Senior Unsecured Notes are due. For more information regarding debt, including the Facility, see Note 6, Debt, to the accompanying consolidated financial statements of this Annual Report on Form 10-K. On October 22, 2025, the Board approved an additional $600 million share repurchase plan (the "2025 Share Repurchase Plan"). Also on October 22, 2025, as part of the 2025 Share Repurchase Plan, the Company entered into accelerated share repurchase agreements (the "ASR") to purchase an aggregate of $350 million of the Company's common stock . In connection with the ASR, on October 21, 2025, the Company provided notice to the lenders pursuant to the Credit Agreement to borrow $350.0 million under the Facility to fund the initial settlement of the ASR. 36 The remaining authorization under the 2025 Share Repurchase Plan at December 31, 2025 was $380.6 million. On January 28, 2026, our Board of Directors declared a quarterly dividend of $0.18 per share payable to stockholders of record as of February 9, 2026, with a payment date of February 17, 2026. Operating Activities: We generated $230.5 million in cash from operating activities during 2025, a decrease of $59.4 million from 2024. The decrease in the current year was primarily due to lower net income and use of cash for long term assets and liabilities including amounts related to retirement plans. Working capital was of slight use of cash for both 2025 and 2024. Working capital for the year ended December 31, 2025 reflects higher accounts receivable and lower accruals, offset by lower inventories. Investing Activities: Net cash used for investing activities was $76.0 million in 2025 compared to $87.0 million in 2024. Capital expenditures for 2025 were $73.3 million compared to $87.0 million in 2024. Payments related to the divestiture of the Austria and Hartford businesses were $2.7 million in 2025. Financing Activities: Net cash used for financing activities was $212.3 million in 2025 as compared to $301.7 million in 2024. In 2025, borrowings were $480.0 million, while repayments were $185.0 million. During 2025, the Company issued $300.0 million in aggregate principal amount of 5.875% Senior Unsecured Notes due in 2035 and in conjunction with this issuance, the Company redeemed the $300.0 million in aggregate principal amount of 4.7% Senior Unsecured Notes that were due in August 2025. In 2024, borrowings and repayments were both $160.0 million. Dividend payments to shareholders were $53.9 million and $49.3 million in the years ended December 31, 2025 and 2024, respectively. Repurchases of common stock totaled $454.3 million and $252.2 million in the years ended December 31, 2025 and 2024, respectively. Financial Obligations and Commitments: The next significant scheduled debt maturity will not occur until February 2027 when our 3.95% Senior Unsecured Notes are due. In addition, certain sales and administrative offices, data processing equipment, vehicles and manufacturing equipment, land and facilities are leased under operating leases. The following table summarizes the scheduled maturities as of December 31, 2025 of financial obligations and expiration dates of commitments for the years ended 2026 through 2030 and thereafter. (In millions) 2026 2027 2028 2029 2030 Thereafter Total Senior unsecured credit facility due 2028 $ — $ — $ 295.0 $ — $ — $ — $ 295.0 5.875% senior notes due 2035 — — — — — 300.0 300.0 3.95% senior notes due 2027 — 400.0 — — — — 400.0 Purchase obligations 18.4 14.2 6.3 5.7 5.6 38.1 88.3 Subtotal $ 18 $ 414.2 $ 301.3 $ 5.7 $ 6 $ 338 $ 1,083.3 Operating leases 7.8 6.8 6.0 4.2 1.3 2.1 28.2 Total financial obligations $ 26.2 $ 421.0 $ 307.3 $ 9.9 $ 6.9 $ 340.2 $ 1,111.5 Interest payments 50.9 36.2 23.1 17.6 17.6 82.3 227.7 Estimated benefit plan contributions 3.3 1.8 2.6 1.6 1.1 8.5 18.9 Total commitments $ 80.4 $ 459.0 $ 333.0 $ 29.1 $ 25.6 $ 431.0 $ 1,358.1 As of December 31, 2025, we had $1.4 million of unrecognized tax benefits. This represents tax benefits associated with various tax positions taken, or expected to be taken, on domestic tax returns that have not been recognized in our financial statements due to uncertainty regarding their resolution. The resolution or settlement of these tax positions with the taxing authorities is at various stages. For further information regarding our financial obligations and commitments, see Notes 6, 7, 8 and 16 to the accompanying consolidated financial statements of this Annual Report on Form 10-K. Non-GAAP Financial Measures The Company uses non-GAAP financial measures, including sales and expenses measured in constant dollars (prior year sales and expenses measured at current year exchange rates); operating income, net income and diluted earnings per share adjusted for items included in operating expense and non-operating expenses; and free cash flow. Management believes these non-GAAP measures are meaningful to investors because they provide a view of Hexcel with respect to ongoing operating results and comparisons to prior periods. These adjustments can represent significant charges or credits that we believe are important to an understanding of Hexcel’s overall operating results in the periods presented. Such non-GAAP measures are not determined in accordance with generally accepted accounting principles and should not be viewed in isolation or as an alternative to or substitutes for GAAP measures of performance. 37 Our calculation of these measures may not be comparable to similarly titled measures used by other companies, and the measures exclude financial information that some may consider important in evaluating our performance. Reconciliations to adjusted operating income, adjusted net income, adjusted diluted net income per share and free cash flow are provided below. Year Ended December 31, (In millions) 2025 2024 GAAP operating income $ 171.6 $ 186.1 Other operating expense (1) 37.8 50.0 Adjusted operating income (Non-GAAP) $ 209.4 $ 236.1 Year Ended December 31, 2025 2024 (In millions, except per diluted share data) Net Income EPS Net Income EPS GAAP net income $ 109.4 $ 1.37 $ 132.1 $ 1.59 Other operating expense, net of tax (1) 30.3 0.38 40.5 0.49 Other income, net of tax (2) (1.0 ) (0.01 ) — — Tax expense (benefit) (3) 2.1 0.02 (4.1 ) (0.05 ) Adjusted net income (Non-GAAP) $ 140.8 $ 1.76 $ 168.5 $ 2.03 Year Ended December 31, (In millions) 2025 2024 Net cash provided by operating activities $ 230.5 $ 289.9 Less: Capital expenditures (73.3 ) (87.0 ) Free cash flow (Non-GAAP) $ 157.2 $ 202.9 (1) The year ended December 31, 2025 included charges related to the closure of the Welkenraedt, Belgium facility, the divestitures of our Neumarkt, Austria and Hartford, Connecticut businesses and a non-income tax charge related to the net value of a foreign entity. The year ended December 31, 2024 included asset impairments, charges primarily associated with the divestiture of our Neumarkt, Austria business and restructuring costs. (2) The year ended December 31, 2025 included curtailment and settlement gains related to the U.S. and Belgium retirement plans as well as debt extinguishment costs. (3) The year ended December 31, 2025 included a tax charge for a valuation allowance related to the closure of the Welkenraedt, Belgium facility, the release of FIN 48 reserves and provision adjustments related to the finalization of prior year tax returns. Tax benefit for the year ended December 31, 2024 included a provision adjustment to finalize prior year tax returns and benefits associated with our R&T expenditures. Critical Accounting Policies and Estimates Our consolidated financial statements are prepared based upon the selection and application of accounting principles generally accepted in the United States of America, which require us to make estimates and assumptions about future events that affect amounts reported in our financial statements and accompanying notes. Future events and their effects cannot be determined with absolute certainty. Therefore, the determination of estimates requires the exercise of judgment. Actual results could differ from those estimates, and any such differences may be significant to the financial statements. The accounting policies below are those we believe are the most critical to the preparation of our financial statements and require the most difficult, subjective, and complex judgments. Our other accounting policies are described in the accompanying Notes to the consolidated financial statements of this Annual Report on Form 10-K. Income Taxes We have operations in several countries throughout the world where we are subject to income and similar taxes. The estimation of income tax amounts often involves the interpretation of complex regulations and tax laws. In addition, estimations also must consider the impact foreign taxes may have on domestic taxes, as well as the analysis of the realizability of deferred tax assets, tax audit 38 findings and uncertain tax positions. Although we believe our tax accruals are adequate, differences may occur in the future, depending on the resolution of pending and new tax matters. Deferred tax assets and liabilities are determined based on temporary differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided against a deferred tax asset when it is more likely than not that all or some portion of the deferred tax asset will not be realized. The determination of the required valuation allowance and the amount, if any, of deferred tax assets to be recognized involves significant estimates regarding the timing and amount of reversal of taxable temporary differences, future taxable income, and the implementation of tax planning strategies. In particular, ASC 740, Income Taxes, requires that all available positive and negative evidence be weighed to determine whether a valuation allowance should be recorded. We are subject to taxation in the U.S. and various states and foreign jurisdictions. The amount of income taxes we pay are subject to ongoing audits by federal, state and foreign tax authorities, which may result in proposed assessments. Our estimate for the potential outcome for any uncertain tax issue is judgmental. We assess our income tax positions, and record tax benefits for all years subject to examination based upon our evaluation of the facts, circumstances and information available at the reporting date. We recognize interest accrued related to unrecognized tax benefits as a component of interest expense and penalties as a component of income tax expense in the consolidated statements of operations. If we do not believe that it is more likely than not that a tax benefit will be sustained, no tax benefit is recognized. As of December 31, 2025, we had uncertain tax positions for which it is reasonably possible that amounts of unrecognized tax benefits could significantly change over the next year. These uncertain tax positions relate to our tax returns from 2022 onward. For further discussion, see Note 9, Income taxes, to the accompanying consolidated financial statements of this Annual Report on Form 10-K. Commitments and Contingencies We are involved in litigation, investigations and claims arising out of the normal conduct of our business, including those relating to commercial transactions, environmental, employment and health and safety matters. We estimate and accrue our liabilities resulting from such matters based upon a variety of factors, including the stage of the proceeding; potential settlement value; assessments by internal and external counsel; and assessments by environmental engineers and consultants of potential environmental liabilities and remediation costs. We believe we have adequately accrued for these potential liabilities; however, facts and circumstances may change, such as new developments, or a change in approach, including a change in settlement strategy or in an environmental remediation plan, or in our existing insurance coverage, that could cause the actual liability to exceed the estimates, or may require adjustments to the recorded liability balances in the future. For further discussion, see Note 16, Commitments and Contingencies, to the accompanying consolidated financial statements of this Annual Report on Form 10-K. Market Risks As a result of our global operating and financing activities, we are exposed to various market risks that may affect our consolidated results of operations and financial position. These market risks include, but are not limited to, fluctuations in currency exchange rates, which impact the U.S. dollar value of transactions, assets and liabilities denominated in foreign currencies and fluctuations in interest rates, which impact the amount of interest we must pay on certain debt instruments. Our primary currency exposures are in Europe, where we have significant business activities. To a lesser extent, we are also exposed to fluctuations in the prices of certain commodities, such as electricity, natural gas, acrylonitrile, aluminum, and certain chemicals. In addition, we have several contracts with both suppliers and customers that contain pricing adjustments based on the price of oil outside of a specified band. We attempt to net individual exposures, when feasible, taking advantage of natural offsets. In addition, we employ or may employ interest rate, commodity and foreign currency financial instruments for the purpose of hedging certain specifically identified interest rate, commodity, and currency exposures. The use of these financial instruments is intended to mitigate some of the risks associated with fluctuations in interest rates, commodities and currency exchange rates but does not eliminate such risks. We do not use financial instruments for trading or speculative purposes. Interest Rate Risks Outstanding balances that exist under our Facility are included in our long-term debt bear interest at variable rates. From time to time we have entered into interest rate swap agreements to change the underlying mix of variable and fixed interest rate debt. These interest rate swap agreements have modified the percentage of total debt that is exposed to changes in market interest rates. Assuming a 10% favorable and a 10% unfavorable change in the underlying weighted average interest rates of our variable rate debt and swap agreements, interest expense for 2025 of $37.7 million would not be materially impacted. 39 Foreign Currency Exchange Risks As of December 31, 2025, we operated ten manufacturing facilities in Europe and Africa which generated approximately 47% of our 2025 consolidated net sales. Our European business activities primarily involve three major currencies — the U.S. dollar, the British pound sterling, and the Euro. We also conduct business and sell products to customers throughout the world. Most of the sales in these countries are denominated in U.S. dollars and they have local currency expenses. Currency risk for the Africa location is not considered material. In 2025, our European subsidiaries had third-party sales of $0.9 billion of which approximately 68% were denominated in U.S. dollars, 31% were denominated in Euros and 1% were denominated in British pounds sterling. While we seek to reduce the exposure of our European subsidiaries to their sales in non-functional currencies through the purchase of raw materials in the same currency as that of the product sale, the net contribution of these sales to cover the costs of the subsidiary in its functional currency will vary with changes in foreign exchange rates, and as a result, so will vary the European subsidiaries’ percentage margins and profitability. For revenues denominated in the functional currency of the subsidiary, changes in foreign currency exchange rates increase or decrease the value of these revenues in U.S. dollars, but do not affect the profitability of the subsidiary in its functional currency. The value of our investments in these countries could be impacted by changes in currency exchange rates over time and could impact our ability to profitably compete in international markets. We attempt to net individual functional currency positions of our various European subsidiaries, to take advantage of natural offsets and reduce the need to employ foreign currency forward exchange contracts. We attempt to hedge some, but not necessarily all, of the net exposures of our European subsidiaries resulting from sales they make in non-functional currencies. The benefit of such hedges varies with time and the foreign exchange rates at which the hedges are set. For example, when the Euro strengthened against the U.S. dollar, the benefit of new hedges placed was much less than the value of hedges they replaced that were entered into when the U.S. dollar was stronger. We may place additional foreign currency hedges when the dollar strengthens against the Euro or British pound. We do not seek to hedge the value of our European subsidiaries’ functional currency sales and profitability in U.S. dollars. We also enter into short-term foreign currency forward exchange contracts, usually with a term of ninety days or less, to hedge net currency exposures. Any unrealized gain or loss on these foreign currency forward exchange contracts would be offset by corresponding decreases or increases, respectively, of the underlying transaction being hedged. We have performed a sensitivity analysis as of December 31, 2025 using a modeling technique that measures the changes in the fair values arising from a hypothetical 10% adverse movement in the levels of foreign currency exchange rates relative to the U.S. dollar with all other variables held constant. The analysis includes all of our foreign currency hedge contracts. The sensitivity analysis indicated that a hypothetical 10% adverse movement in foreign currency exchange rates would have an approximately $0.4 million impact on our 2025 operating income. However, it should be noted that over time as the adverse movement (in our case a weaker dollar as compared to the Euro or the British pound sterling) continues and new hedges are layered in at the adverse rate, the impact would be more significant. For example, had we not had any hedges in place for 2025, a 10% adverse movement would have reduced our operating income by approximately $29.8 million. Foreign Currency Forward Exchange Contracts A number of our European subsidiaries are exposed to the impact of exchange rate volatility between the U.S. dollar and the subsidiaries’ functional currencies, being either the Euro or the British pound sterling. We entered into contracts to exchange U.S. dollars for Euros and British pound sterling through June 2028. The aggregate notional amount of these contracts was $403.4 million at December 31, 2025. The purpose of these contracts is to hedge a portion of the forecasted transactions of European subsidiaries under long-term sales contracts with certain customers. These contracts are expected to provide us with a more balanced matching of future cash receipts and expenditures by currency, thereby reducing our exposure to fluctuations in currency exchange rates. For the three years ended December 31, 2025, hedge ineffectiveness was immaterial. Cash flows associated with these contracts are classified within net cash provided by operating activities of continuing operations. For further discussion, see Note 15, Derivative Financial Instruments, to the accompanying consolidated financial statements of this Annual Report on Form 10-K. 40 Consolidated Financial Statements and Supplementary Data Description Page Management’s Responsibility for Consolidated Financial Statements