##### Table of Contents



FORM 10-Q
 
 SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended December 27, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number 1-7872
 
 BREEZE-EASTERN CORPORATION
  Delaware(State or other jurisdiction of
    
    95-4062211incorporation or organization)
    
    (I.R.S. employer700 Liberty Avenue
    
    identification no.)Union, New Jersey
    
    07083(Address of principal executive offices)
    
    (Zip Code)
  þ o
 o þ
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer   o
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
 o þ




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##### 



INDEX
 PageNo.PART 1 Financial InformationItem 1. Condensed Financial Statements (Unaudited)
    
    
    3Condensed Consolidated Balance Sheets
December 27, 2009 (Unaudited) and March 31, 2009
    
    
    4Condensed Statements of Consolidated Operations Three and Nine Month
Periods Ended December 27, 2009 and December 28, 2008
(Unaudited)
    
    
    5Condensed Statements of Consolidated Cash Flows Nine Month Periods Ended
December 27, 2009 and December 28, 2008 (Unaudited)
    
    
    6Notes to Condensed Consolidated Financial Statements (Unaudited)
    
    
    7Item 2. Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    
    20Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    29Item 4. Controls and Procedures
    
    
    29PART II. Other InformationItem 1. Legal Proceedings
    
    
    30Item 1A. Risk Factors
    
    
    30Item 2. Unregistered Sale of Equity Securities and Use of Proceeds
    
    
    30Item 3. Defaults Upon Senior Securities
    
    
    30Item 4. Submission of Matters to a Vote of Security Holders
    
    
    30Item 5. Other Information
    
    
    30Item 6. Exhibits
    
    
    30SIGNATURES
    
    
    31EX-31.1EX-31.2EX-32
  2




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PART I. FINANCIAL INFORMATION
 
 Item 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
  st
  3




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BREEZE-EASTERN CORPORATION
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
  (Unaudited)
    
    (Audited)December 27, 2009
    
    March 31, 2009ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    2,528
    
    
    $
    2,667Accounts receivable (net of allowance for doubtful accounts
of $151 at December 27, 2009 and $30 at March 31, 2009)
    
    
    14,637
    
    
    
    20,238Inventories
    
    
    25,739
    
    
    
    19,635Prepaid expenses and other current assets
    
    
    886
    
    
    
    377Deferred income taxes
    
    
    6,539
    
    
    
    6,988Total current assets
    
    
    50,329
    
    
    
    49,905PROPERTY:Property and equipment
    
    
    18,584
    
    
    
    13,230Less accumulated depreciation and amortization
    
    
    10,332
    
    
    
    9,371Property  net
    
    
    8,252
    
    
    
    3,859OTHER ASSETS:Deferred income taxes
    
    
    9,880
    
    
    
    11,114Goodwill
    
    
    402
    
    
    
    402Real estate held for sale
    
    
    4,000
    
    
    
    4,000Other
    
    
    7,762
    
    
    
    7,425Total other assets
    
    
    22,044
    
    
    
    22,941TOTAL ASSETS
    
    $
    80,625
    
    
    $
    76,705LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITES:Revolving credit facility
    
    $
    2,700
    
    
    $
    Current portion of long-term debt
    
    
    3,286
    
    
    
    3,286Accounts payable  trade
    
    
    6,557
    
    
    
    6,311Accrued compensation
    
    
    2,276
    
    
    
    2,144Accrued income taxes
    
    
    415
    
    
    
    253Other current liabilities
    
    
    4,085
    
    
    
    5,589Total current liabilities
    
    
    19,319
    
    
    
    17,583LONG-TERM DEBT, NET OF CURRENT PORTION
    
    
    15,607
    
    
    
    18,071OTHER LONG-TERM LIABILITIES
    
    
    9,113
    
    
    
    7,724COMMITMENTS AND CONTINGENCIES (Note 12)
    
    
    
    
    
    
    TOTAL LIABILITIES
    
    
    44,039
    
    
    
    43,378STOCKHOLDERS EQUITYPreferred stock  authorized, 300,000 shares; none issued
    
    
    
    
    
    
    Common stock  authorized, 14,700,000 shares of $.01 par
value; issued, 9,813,097 at December 27, 2009 and
9,778,097 at March 31, 2009
    
    
    98
    
    
    
    98Additional paid-in capital
    
    
    94,310
    
    
    
    93,778Accumulated deficit
    
    
    (50,951
    )
    
    
    (53,820
    )Accumulated other comprehensive loss
    
    
    (166
    )
    
    
    (25
    )43,291
    
    
    
    40,031Less treasury stock, at cost  412,853 at December 27, 2009
and 412,731 at March 31, 2009
    
    
    (6,705
    )
    
    
    (6,704
    )Total stockholders equity
    
    
    36,586
    
    
    
    33,327TOTAL LIABILITIES & STOCKHOLDERS EQUITY
    
    $
    80,625
    
    
    $
    76,705
  4




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BREEZE-EASTERN CORPORATION
 
 CONDENSED STATEMENTS OF CONSOLIDATED OPERATIONS
 (UNAUDITED)
  Three Months Ended
    
    Nine Months EndedDecember 27,
    
    December 28,
    
    December 27,
    
    December 28,2009
    
    2008
    
    2009
    
    2008Net sales
    
    $
    21,168
    
    
    $
    23,527
    
    
    $
    50,938
    
    
    $
    52,002Cost of sales
    
    
    13,159
    
    
    
    14,175
    
    
    
    31,732
    
    
    
    30,758Gross profit
    
    
    8,009
    
    
    
    9,352
    
    
    
    19,206
    
    
    
    21,244Selling, general, and administrative expenses
    
    
    4,549
    
    
    
    4,744
    
    
    
    13,275
    
    
    
    13,607Relocation expense
    
    
    14
    
    
    
    
    
    
    
    203
    
    
    
    Operating income
    
    
    3,446
    
    
    
    4,608
    
    
    
    5,728
    
    
    
    7,637Interest expense
    
    
    186
    
    
    
    305
    
    
    
    595
    
    
    
    1,129Other expense  net
    
    
    58
    
    
    
    45
    
    
    
    186
    
    
    
    133Loss on debt extinguishment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    551Income before incomes taxes
    
    
    3,202
    
    
    
    4,258
    
    
    
    4,947
    
    
    
    5,824Income tax provision
    
    
    1,345
    
    
    
    1,788
    
    
    
    2,078
    
    
    
    2,446Net income
    
    $
    1,857
    
    
    $
    2,470
    
    
    $
    2,869
    
    
    $
    3,378Earnings per common share:Basic net income per share:
    
    $
    0.20
    
    
    $
    0.26
    
    
    $
    0.31
    
    
    $
    0.36Diluted net income per share:
    
    
    0.20
    
    
    
    0.26
    
    
    
    0.31
    
    
    
    0.36Weighted-average basic shares outstanding
    
    
    9,400,000
    
    
    
    9,365,000
    
    
    
    9,385,000
    
    
    
    9,351,000Weighted-average diluted shares outstanding
    
    
    9,404,000
    
    
    
    9,398,000
    
    
    
    9,393,000
    
    
    
    9,407,000
  5




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BREEZE-EASTERN CORPORATION
 
 CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS
 (UNAUDITED)
  Nine Months EndedDecember 27, 2009
    
    December 28, 2008Cash flows from operating activities:Net income
    
    $
    2,869
    
    
    $
    3,378Adjustments to reconcile net income to net cash
provided by operating activities:Write-off unamortized loan fees
    
    
    
    
    
    
    223Depreciation and amortization
    
    
    1,206
    
    
    
    1,038Non-cash interest expense, net
    
    
    17
    
    
    
    63Stock based compensation
    
    
    532
    
    
    
    500Provision for losses on accounts receivable
    
    
    121
    
    
    
    4Deferred taxes-net
    
    
    1,786
    
    
    
    2,051Changes in assets and liabilities:Decrease in accounts receivable and other receivables
    
    
    5,480
    
    
    
    1,162(Increase) decrease in inventories
    
    
    (6,104
    )
    
    
    (4,387
    )(Increase) decrease in other assets
    
    
    (738
    )
    
    
    (74
    )(Decrease) increase in accounts payable
    
    
    (987
    )
    
    
    2,347Increase (decrease) in accrued compensation
    
    
    132
    
    
    
    (466
    )Increase (decrease) in accrued income taxes
    
    
    162
    
    
    
    (37
    )(Decrease) increase in other liabilities
    
    
    (380
    )
    
    
    (1,482
    )Net cash provided by (used in)operating activities
    
    $
    4,096
    
    
    $
    4,320Cash flows from investing activities:Capital expenditures
    
    $
    (3,625
    )
    
    $
    (1,416
    )Capitalized project costs
    
    
    (846
    )
    
    
    (823
    )Net cash provided by (used in) investing activities
    
    $
    (4,471
    )
    
    $
    (2,239
    )Cash flows from financing activities:Payments on long-term debt
    
    $
    (2,464
    )
    
    $
    (23,727
    )Proceeds from long-term debt and borrowings
    
    
    
    
    
    
    23,000Net borrowings (repayments) of other debt
    
    
    2,700
    
    
    
    (520
    )Payment of debt issue costs
    
    
    
    
    
    
    (513
    )Exercise of stock options
    
    
    
    
    
    
    7Net cash provided by (used in) financing activities
    
    $
    236
    
    
    $
    (1,753
    )(Decrease) increase in cash
    
    $
    (139
    )
    
    $
    328Cash at beginning of period
    
    
    2,667
    
    
    
    1,876Cash at end of period
    
    $
    2,528
    
    
    $
    2,204Supplemental information:Interest payments
    
    $
    585
    
    
    $
    1,025Income tax payments
    
    
    127
    
    
    
    438
  6




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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 ($ In Thousands Except Share Amounts)
  Financial Presentation
  Earnings Per Share
   Three Months Ended
    
    Nine Months EndedDecember 27,
    
    December 28,
    
    December 27,
    
    December 28,2009
    
    2008
    
    2009
    
    2008Basic Earnings per Common Share:Weighted-average common stock
outstanding for basic earnings
per share calculation
    
    
    9,400,000
    
    
    
    9,365,000
    
    
    
    9,385,000
    
    
    
    9,351,000Diluted Earnings per Common
Share:Weighted-average common shares
outstanding
    
    
    9,400,000
    
    
    
    9,365,000
    
    
    
    9,385,000
    
    
    
    9,351,000Stock options (a)
    
    
    4,000
    
    
    
    33,000
    
    
    
    8,000
    
    
    
    56,000Weighted-average common stock
outstanding for diluted
earnings per share calculation
    
    
    9,404,000
    
    
    
    9,398,000
    
    
    
    9,393,000
    
    
    
    9,407,000
 
 (a)
    
    During the three and nine month periods ended December 27, 2009, options to purchase 493,000
and 456,000 shares of common stock, respectively, and during the three and nine month periods
ended December 28, 2008, options to purchase 311,000 and 213,000 shares of common stock,
respectively, were not included in the computation of diluted earnings per share because the
exercise prices of these options were greater than the average market price of the common
share. Stock-Based Compensation
   7




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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  ($ In Thousands Except Share Amounts)
      August 17, 2009
    
    June 22, 2009
    
    July 21, 2009Dividend yield
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %Volatility
    
    
    34.0
    %
    
    
    34.0
    %
    
    
    33.5
    %Risk-free interest rate
    
    
    3.2
    %
    
    
    3.4
    %
    
    
    3.6
    %Expected option term
(years)
    
    
    7.0
    
    
    
    7.0
    
    
    
    7.0
 8




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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  ($ In Thousands Except Share Amounts)
  Aggregate
    
    Approximate
    
    Weighted-Intrinsic
    
    Remaining
    
    AverageNumber
    
    Value
    
    Contractual
    
    Exerciseof Shares
    
    (in thousands)
    
    Term (Years)
    
    PriceOutstanding at March 31, 2009
    
    
    454,911
    
    
    $
    28
    
    
    
    6
    
    
    $
    10.00Granted
    
    
    186,000
    
    
    
    
    
    
    
    
    
    
    
    6.12Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Canceled or expired
    
    
    (26,000
    )
    
    
    
    
    
    
    
    
    
    
    19.38Outstanding at December 27, 2009
    
    
    614,911
    
    
    
    11
    
    
    
    7
    
    
    
    8.43Options exercisable at December 27,
2009
    
    
    350,577
    
    
    
    11
    
    
    
    5
    
    
    
    9.08Unvested options expected to become
exercisable after December 27, 2009
    
    
    264,334
    
    
    
    
    
    
    
    9
    
    
    
    7.58Shares available for future option
grants at
December 27, 2009 (a)
    
    
    200,214
 
 (a)
    
    May be decreased by restricted stock grants.    9




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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  ($ In Thousands Except Share Amounts)
  Weighted Average GrantNumber of
    
    DateShares
    
    Fair ValueNon-vested at March 31, 2009
    
    
    31,904
    
    
    $
    10.80Granted
    
    
    35,000
    
    
    
    6.00Vested
    
    
    (25,624
    )
    
    
    10.65Cancelled
    
    
    (
    )
    
    
    Non-vested at December 27, 2009
    
    
    41,280
    
    
    
    6.82
    Inventories
  $ Thousands
    
    December 27, 2009
    
    
    March 31, 2009Finished goods
    
    $
    1,259
    
    
    $
    Work in process
    
    
    8,794
    
    
    
    4,742Purchased and manufactured parts
    
    
    15,686
    
    
    
    14,893Total
    
    $
    25,739
    
    
    $
    19,635
 Property, Equipment, and Related Depreciation
  10




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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  ($ In Thousands Except Share Amounts)
   Machinery and equipment
    
    3 to 10 yearsFurniture and fixtures
    
    3 to 10 yearsComputer hardware and software
    
    3 to 5 years
 Product Warranty Costs
  $ ThousandsBalance at March 31, 2009
    
    $
    238Warranty costs incurred
    
    
    (90
    )Change in estimates to pre-existing warranties
    
    
    5Product warranty accrual
    
    
    33Balance at December 27, 2009
    
    $
    186
 Income Taxes
     11




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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  ($ In Thousands Except Share Amounts)
   Long-Term Debt
  $ Thousands
    
    December 27, 2009
    
    
    March 31, 2009Senior Credit Facility
    
    $
    18,893
    
    
    $
    21,357Less current maturities
    
    
    3,286
    
    
    
    3,286Total long-term debt
    
    $
    15,607
    
    
    $
    18,071
 Senior Credit Facility -
   12




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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  ($ In Thousands Except Share Amounts)
  Interest Rate Swap
 Former Senior Credit Facility -
 Fair Value Measurements+
  
    
    Level 1- Unadjusted quoted prices for identical assets or liabilities in active markets;
    
    Level 2-Inputs other than quoted prices in active markets for identical assets or
liabilities that are observable wither directly or indirectly for substantially the full
term of the asset or liability; and
    
    Level 3-Unobservable inputs for the asset or liability, which include managements own
assumption about the assumptions market participants would use in pricing the asset or
liability, including assumptions about risk.
  13




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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  ($ In Thousands Except Share Amounts)
  $ Thousands
    
    Carrying Amount
    
    Fair ValueLong-term debt
    
    $
    18,893
    
    
    $
    18,893Interest rate swap
liability included in
other long
term liabilities
(Level 2)
    
    
    245
    
    
    
    245
 Employee Benefit Plans
     Postretirement BenefitsThree Months Ended
    
    
    Nine Months Ended$Thousands
    
    December 27, 2009
    
    
    December 28, 2008
    
    
    December 27, 2009
    
    
    December 28, 2008Components of net
periodic benefit
costs:Interest Cost
    
    $
    9
    
    
    $
    11
    
    
    $
    27
    
    
    $
    34Amortization of net
(gain) loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net periodic
benefit cost
    
    $
    9
    
    
    $
    11
    
    
    $
    27
    
    
    $
    34
 14




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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  ($ In Thousands Except Share Amounts)
 Pension PlanThree Months Ended
    
    
    Nine Months EndedDecember 27, 2009
    
    
    December 28, 2008
    
    
    December 27, 2009
    
    
    December 28, 2008Components of net
periodic benefit
costs:Interest Cost
    
    $
    101
    
    
    $
    98
    
    
    $
    197
    
    
    $
    206Amortization of net
(gain) loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net periodic
benefit cost
    
    $
    101
    
    
    $
    98
    
    
    $
    197
    
    
    $
    206
 New Accounting Standards
    15




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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  ($ In Thousands Except Share Amounts)
     Contingencies
 Environmental Matters .
  16




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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  ($ In Thousands Except Share Amounts)
     Litigation .
 17




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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  ($ In Thousands Except Share Amounts)
  Segment, Geographic Location and Customer Information
   Three Months Ended
    
    
    Nine Months Ended$ Thousands
    
    December 27, 2009
    
    
    December 28, 2008
    
    
    December 27, 2009
    
    
    December 28, 2008Hoist and Winch
    
    $
    14,463
    
    
    $
    14,369
    
    
    $
    35,793
    
    
    $
    32,065Cargo Hooks
    
    
    2,168
    
    
    
    4,873
    
    
    
    8,140
    
    
    
    10,529Weapons Handling
    
    
    3,816
    
    
    
    3,115
    
    
    
    4,622
    
    
    
    5,924Other Sales
    
    
    721
    
    
    
    1,170
    
    
    
    2,383
    
    
    
    3,484Total
    
    $
    21,168
    
    
    $
    23,527
    
    
    $
    50,938
    
    
    $
    52,002
    18




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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  ($ In Thousands Except Share Amounts)
  Three Months Ended
    
    
    Nine Months EndedDecember 27,
    
    
    December 28,
    
    
    December 27,
    
    
    December 28,$ Thousands
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008Location:United States
    
    $
    14,204
    
    
    $
    14,083
    
    
    $
    30,179
    
    
    $
    32,336England
    
    
    1,282
    
    
    
    872
    
    
    
    1,893
    
    
    
    1,693Italy
    
    
    1,760
    
    
    
    1,465
    
    
    
    7,019
    
    
    
    4,038Other European Countries
    
    
    772
    
    
    
    3,193
    
    
    
    2,804
    
    
    
    5,407Pacific and Far East
    
    
    1,113
    
    
    
    1,840
    
    
    
    3,407
    
    
    
    3,447Other non-United States
    
    
    2,037
    
    
    
    2,074
    
    
    
    5,636
    
    
    
    5,081Total
    
    $
    21,168
    
    
    $
    23,527
    
    
    $
    50,938
    
    
    $
    52,002
 Subsequent Events
    19




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Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995 and Section 21E of
the Securities Exchange Act of 1934:
  Forward Looking Statements
    General
  20




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Results of Operations
 Three Months Ended December 27, 2009 Compared with Three Months Ended December 28, 2008
 Three Months Ended
    
    
    Increase (decrease)$ Thousands
    
    December 27, 2009
    
    
    December 28, 2008
    
    
    $
    
    
    %New equipment
    
    $
    12,425
    
    
    $
    12,695
    
    
    $
    (   270
    )
    
    
    (2.1
    )Spare parts
    
    
    3,005
    
    
    
    4,664
    
    
    
    ( 1,659
    )
    
    
    (35.6
    )Overhaul and repair
    
    
    5,017
    
    
    
    5,159
    
    
    
    (142
    )
    
    
    (2.8
    )Engineering services
    
    
    721
    
    
    
    1,009
    
    
    
    (   288
    )
    
    
    (28.5
    )Net sales
    
    
    21,168
    
    
    
    23,527
    
    
    
    ( 2,359
    )
    
    
    (10.0
    )Cost of sales
    
    
    13,159
    
    
    
    14,175
    
    
    
    (  1,016
    )
    
    
    (  7.2
    )Gross profit
    
    
    8,009
    
    
    
    9,352
    
    
    
    ( 1,343
    )
    
    
    (14.4
    )Selling, general,
and administrative
expenses
    
    
    4,549
    
    
    
    4,744
    
    
    
    (   195
    )
    
    
    (4.1
    )Relocation expense
    
    
    14
    
    
    
    
    
    
    
    14
    
    
    
    N/AOperating income
    
    
    3,446
    
    
    
    4,608
    
    
    
    (1,162
    )
    
    
    (25.2
    )Interest expense
    
    
    186
    
    
    
    305
    
    
    
    (   119
    )
    
    
    (  39.0
    )Net income
    
    $
    1,857
    
    
    $
    2,470
    
    
    $
    (    613
    )
    
    
    (24.8
    )
 Net Sales .
  Gross Profit .
  21




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##### Table of Contents



Selling, general and administrative expenses .
 Relocation expense
 Operating income.
 Interest expense .
 Net Income .
 New orders .
     22




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##### Table of Contents



Backlog .
  Nine Months Ended December 27, 2009 Compared with Nine Months Ended December 28, 2008
 IncreaseNine Months Ended
    
    
    (decrease)$ Thousands
    
    December 27, 2009
    
    
    December 28, 2008
    
    
    $
    
    
    %New equipment
    
    $
    27,090
    
    
    $
    26,441
    
    
    $
    649
    
    
    
    2.5Spare parts
    
    
    8,253
    
    
    
    10,351
    
    
    
    (2,098
    )
    
    
    (20.3
    )Overhaul and repair
    
    
    13,212
    
    
    
    12,095
    
    
    
    1,117
    
    
    
    9.2Engineering services
    
    
    2,383
    
    
    
    3,115
    
    
    
    (732
    )
    
    
    (23.5
    )Net sales
    
    
    50,938
    
    
    
    52,002
    
    
    
    (1,064
    )
    
    
    (2.1
    )Cost of sales
    
    
    31,732
    
    
    
    30,758
    
    
    
    974
    
    
    
    3.2Gross profit
    
    
    19,206
    
    
    
    21,244
    
    
    
    (2,038
    )
    
    
    (9.6
    )Selling, general,
and administrative
expenses
    
    
    13,275
    
    
    
    13,607
    
    
    
    (332
    )
    
    
    (2.4
    )Relocation expense
    
    
    203
    
    
    
    
    
    
    
    203
    
    
    
    N/AOperating income
    
    
    5,728
    
    
    
    7,637
    
    
    
    (1,909
    )
    
    
    (25.0
    )Interest expense
    
    
    595
    
    
    
    1,129
    
    
    
    (534
    )
    
    
    (47.3
    )Loss on debt
extinguishment
    
    
    
    
    
    
    551
    
    
    
    (551
    )
    
    
    (100.0
    )Net income
    
    $
    2,869
    
    
    $
    3,378
    
    
    $
    (509
    )
    
    
    (15.1
    )
 Net Sales .
  23




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##### Table of Contents



Gross Profit .
    Selling, general and administrative expenses .
 Relocation expense
 Operating income.
 Interest expense .
 24




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##### Table of Contents



Loss on Debt Extinguishment.
 Net Income .
 New orders .
    Backlog
  Liquidity and Capital Resources
  25




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##### Table of Contents



Headquarters and Manufacturing Relocation .
   Working Capital
    26




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##### Table of Contents



Capital Expenditures
   Senior Credit Facility
  Interest Rate Swap
  Former Senior Credit Facility
  Tax Benefits from Net Operating Losses
  27




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##### Table of Contents



Summary Disclosure About Contractual Obligations and Commercial Commitments
  Payments Due By PeriodLess Than
    
    
    
    
    
    
    
    
    
    
    More Than$ Thousands
    
    Total
    
    
    1 Year
    
    
    1-3 Years
    
    
    3-5 Years
    
    
    5 YearsDebt principal
repayments (a)
    
    $
    18,893
    
    
    $
    3,286
    
    
    $
    6,572
    
    
    $
    9,035
    
    
    $
    Estimated interest
payments on
long-term debt (b)
    
    
    1,517
    
    
    
    560
    
    
    
    793
    
    
    
    164
    
    
    
    Operating leases (c)
    
    
    8,802
    
    
    
    914
    
    
    
    1,652
    
    
    
    1,616
    
    
    
    4,620Purchase
Obligations (d)
    
    
    4,256
    
    
    
    4,256
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    33,468
    
    
    $
    9,016
    
    
    $
    9,017
    
    
    $
    10,815
    
    
    $
    4,620
 
 (a)
    
    Obligations for long-term debt reflect the requirements of the term loan under the Senior
Credit Facility. See Note 8 of Notes to Unaudited Consolidated Financial Statements.(b)
    
    Estimated interest payments on long-term debt reflect the scheduled principal payments of
the term loan under the Senior Credit Facility and assume an effective weighted average interest
rate of 3.3%, the Companys blended interest rate at December 27, 2009.(c)
    
    Included is an $8,660 lease obligation for the new facility in Whippany, New Jersey. See
Liquidity and Capital Resources.(d)
    
    Obligations for capital equipment and build-out of the Companys new facility in Whippany,
New Jersey.  Inflation
  Environmental Matters
  Litigation
  Recently Issued Accounting Standards
  28




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##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures about Market Risk
 ($ in thousands except per share amounts)
    
 Item 4. Controls and Procedures
    29




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##### Table of Contents



PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
  
 Item 6. Exhibits
 31.1
    
    Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32
    
    Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 30




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##### Table of Contents



SIGNATURES
  BREEZE-EASTERN CORPORATION
          
            (Registrant)Dated:  February 5, 2010
    By:
    /s/  Mark D. MishlerMark D. Mishler, Senior Vice President,Chief Financial Officer and Treasurer * 
 *
    
    On behalf of the Registrant and as Principal Financial and Accounting
Officer. 31