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Triumph Group Reports Record Fourth Quarter and Full Fiscal Year 2011 Results

Dépèche transmise le 9 mai 2011 par Business Wire

WAYNE, Pa.--(BUSINESS WIRE)--Triumph Group, Inc. (NYSE: TGI) today reported that, for the fiscal year ended March 31, 2011, net sales totaled $2.905 billion, a 124 percent increase from fiscal year 2010 net sales of $1.295 billion. Organic sales growth for the fiscal year was eight percent. Income from continuing operations for fiscal year 2011 increased seventy-nine percent to $152.4 million, or $6.42 per diluted share, versus $85.3 million, or $5.12 per diluted share, for fiscal year 2010. The fiscal year’s results included approximately $20.9 million pre tax ($15.7 million after tax or $0.66 per diluted share) of transaction and integration costs related to the acquisition of Vought Aircraft Industries (now Triumph Aerostructures-Vought Aircraft Division). Excluding these costs, income from continuing operations for fiscal year 2011 was $168.1 million, or $7.08 per diluted share. Net income for fiscal year 2011 increased 121 percent to $149.9 million, or $6.31 per diluted share, versus $67.8 million, or $4.07 per diluted share for the prior fiscal year. The number of shares used in computing diluted earnings per share for fiscal year 2011 was 23.7 million shares. During the fiscal year, the company generated $277.1 million of cash flow from operations before Triumph Aerostructures’ pension contributions of $134.8 million; after these contributions, cash flow from operations was $142.3 million.

For the fourth quarter ended March 31, 2011, net sales were $919.1 million, a 161 percent increase from last year’s fourth quarter net sales of $352.0 million. Organic sales growth for the quarter was eight percent. Income from continuing operations for the fourth quarter of fiscal year 2011 increased 116 percent to $54.0 million, or $2.11 per diluted share, versus $25.0 million, or $1.49 per diluted share, for the fourth quarter of the prior fiscal year. The quarter’s results included approximately $1.3 million pre tax ($0.8 million after tax or $0.03 per diluted share) of integration costs related to the Vought acquisition. Excluding these integration costs, income from continuing operations for the quarter was $54.8 million, or $2.14 per diluted share. Net income for the fourth quarter of fiscal year 2011 increased 112 percent to $52.3 million, or $2.04 per diluted share, versus $24.7 million, or $1.47 per diluted share, for the fourth quarter of the prior fiscal year. The number of shares used in computing diluted earnings per share for the fourth quarter of fiscal year 2011 was 25.6 million shares. During the quarter, the company generated $87.5 million of cash flow from operations before Triumph Aerostructures’ pension contributions of $59.9 million; after these contributions, cash flow from operations was $27.6 million. The fourth quarter results included a charge in discontinued operations associated with the termination of a long term contract which will allow the company to more easily sell the business.

Richard C. Ill, Triumph’s Chairman and Chief Executive Officer, said, “We are very proud of the results we achieved during the fourth quarter and our accomplishments during the year just ended. In particular, we were able to complete the acquisition of Vought Aircraft Industries and exceed our initial projections of earnings accretion and synergy targets. In addition we proactively and effectively managed our pension liability during the year and we ended the year with a meaningful reduction in our net underfunded position. We delivered organic sales growth within all three operating segments, increased operating income and improved our underlying margins on both a year over year and sequential basis. Our Aftermarket Services segment continued its performance of double digit growth in revenue, earnings and operating margins. In addition, we saw our backlog grow during the fourth quarter despite a reduction coming from the most recent 787 production schedule. During the year, we managed our company conservatively, focusing on reducing costs, improving operations and maximizing cash flow. The impact of these efforts was reflected in our fourth quarter results as well as the strong cash flow and shareholder value generated throughout the year.”

Segments

In connection with the Vought acquisition, the company realigned its organizational structure into three reportable business segments, Aerostructures, Aerospace Systems and Aftermarket Services. Prior year period segment results have been adjusted to reflect this change.

Aerostructures

The Aerostructures segment reported net sales for fiscal year 2011 of $2.126 billion, compared to $0.605 billion for the prior fiscal year, an increase of 251 percent. Organic sales growth for the fiscal year was five percent. For the fourth quarter of fiscal year 2011, net sales increased 311 percent to $703.5 million from $171.0 million for the prior fiscal year period. Operating income for fiscal year 2011 was $267.8 million, compared to $102.3 million for the prior fiscal year period, an increase of 162 percent. For the fourth quarter of fiscal year 2011, operating income increased 166 percent to $91.1 million versus $34.3 million for the prior fiscal year quarter. Operating margin for the quarter improved to thirteen percent.

Aerospace Systems

The Aerospace Systems segment reported net sales for fiscal year 2011 of $513.4 million, compared to $473.4 million for the prior fiscal year, an increase of eight percent. Organic sales growth for the fiscal year was five percent. For the fourth quarter of fiscal year 2011, net sales increased nineteen percent to $147.8 million from $124.6 million for the prior fiscal year period. Organic sales growth for the quarter was fourteen percent. Operating income for fiscal year 2011 was $75.3 million, compared to $68.1 million for the prior fiscal year period, an increase of eleven percent. Operating margin for the fiscal year was fifteen percent. For the fourth quarter of fiscal year 2011, operating income increased forty percent to $22.4 million versus $16.0 million for the prior fiscal year quarter. Operating margin for the quarter improved to fifteen percent versus thirteen percent in the prior fiscal year period.

Aftermarket Services

The Aftermarket Services segment reported net sales for fiscal year 2011 of $272.7 million, compared to $224.7 million for the prior fiscal year, an increase of twenty-one percent, all of which was organic. For the fourth quarter of fiscal year 2011, net sales were $69.5 million compared to $58.2 million in the prior fiscal year period, an increase of twenty percent, all of which was organic. Operating income for fiscal year 2011 was $28.8 million, compared to $11.2 million for the prior fiscal year period, an increase of 156 percent. Operating margin for the fiscal year was eleven percent. For the fourth quarter of fiscal year 2011, operating income increased seventy-eight percent to $7.0 million versus $3.9 million for the prior fiscal year quarter. Operating margin for the quarter improved to ten percent driven primarily by continued strong market growth and improved operating performance.

Outlook

In commenting on the outlook for fiscal year 2012, Mr. Ill said, “We are entering our new fiscal year with a very strong backlog and a very solid balance sheet. We project sales in the range of $3.2 to $3.5 billion and earnings per share from continuing operations for the fiscal year of $8.35 to 8.45 per diluted share, excluding integration costs related to the acquisition of Vought Aircraft Industries, Inc.” This guidance is based on the following assumptions for fiscal year 2012:

  • the number of shares used in computing diluted earnings per share is 25.7 million
  • approximately $5.0 million of legal expenses associated with the trade secret litigation
  • approximately break-even results related to the previously disclosed Zacatecas, Mexico investment
  • costs and benefits of our recent upsizing of the revolving credit facility and retirement of the $350 million Term Loan B
  • tax rate of 35.5% reflecting three quarters of an R&D tax credit
  • capital expenditures and investments in major new programs of $130 to $145 million
  • pension income of $14 million and cash contributions to the plan of $118 million
  • OPEB expense of approximately $17 million and cash expenditures of approximately $36 million
  • synergies from the Vought acquisition of approximately $18 million
  • current productions rates – specifically:

    • close to a full year of 777 production at 7 per month
    • an increase in 737 production rates to 35 per month in the middle of the company’s third fiscal year quarter
    • an increase in 747 production rates to 2 in the company’s third fiscal year quarter
    • the most recently revised 787 production schedule
    • 767 production rates increasing to 2 in the company’s second fiscal year quarter
    • C-17 production of 12 units for Triumph Aerostructures
    • other than C-17 mentioned above, production rates for the company’s largest military programs (i.e. V-22, UH 60, CH 47, C130) are expected to remain at current strong levels
    • consistent sales of G550 and G450
    • at a minimum, early year weakness in Cessna sales
  • the award of the KC-46A tanker to Boeing will have a minimal impact in fiscal year 2012 but will be a positive in the long term
  • continued strength in the Aftermarket Services segment of the business

Mr. Ill continued, “On a quarterly basis, the first quarter of fiscal year 2012 will include a $7.7 million pre tax charge ($5.0 million after tax or $0.19 per diluted share) associated with the retirement of the Term Loan B while most of the production increases and realization of synergies will be weighted toward the second half of the fiscal year. We will continue to build from a position of strength and will remain focused on cost control, continued improvement in our execution and improved cash flow.”

As previously announced, Triumph Group will hold a conference call tomorrow at 8:30 a.m. (ET) to discuss the fiscal year 2011 fourth quarter and year-end results. The conference call will be available live and archived on the company’s website at http://www.triumphgroup.com. A slide presentation will be included with the audio portion of the webcast. An audio replay will be available from May 10th until May 17th by calling (888) 266-2081 (Domestic) or (703) 925-2533 (International), passcode #1525286.

Triumph Group, Inc., headquartered in Wayne, Pennsylvania, designs, engineers, manufactures, repairs and overhauls a broad portfolio of aerostructures, aircraft components, accessories, subassemblies and systems. The company serves a broad, worldwide spectrum of the aviation industry, including original equipment manufacturers of commercial, regional, business and military aircraft and aircraft components, as well as commercial and regional airlines and air cargo carriers.

More information about Triumph can be found on the company’s website at http://www.triumphgroup.com.

Statements in this release which are not historical facts are forward-looking statements under the provisions of the Private Securities Litigation Reform Act of 1995, including statements of expectations of or assumptions about future aerospace market conditions, aircraft production rates, financial and operational performance, revenue and earnings growth, capital expenditures, tax rates, pension income and investment performance, OPEB expense, synergies from the Vought acquisition and earnings results for fiscal 2012. All forward-looking statements involve risks and uncertainties which could affect the company’s actual results and could cause its actual results to differ materially from those expressed in any forward looking statements made by, or on behalf of, the company.

Further information regarding the important factors that could cause actual results to differ from projected results can be found in Triumph’s reports filed with the SEC, including our Annual Report on Form 10-K for the fiscal year ended March 31, 2010.

   
FINANCIAL DATA (UNAUDITED)
 
TRIUMPH GROUP, INC. AND SUBSIDIARIES
(in thousands, except per share data)
 
 
Three Months Ended Twelve Months Ended
March 31, March 31,
 
CONDENSED STATEMENTS OF INCOME 2011 2010 2011 2010
 
 
Net sales $ 919,086 $ 351,981 $ 2,905,348 $ 1,294,780
 
Operating income 108,410 * 47,345 314,036 * * 155,281
 
Interest expense and other 22,440 10,270 79,559 28,865
Gain on early extinguishment of debt 0 0 0 (39 )
Income tax expense   31,940     12,079     82,066     41,167  
 
Income from continuing operations 54,030 24,996 152,411 85,288
Loss from discontinued operations, net of tax   (1,687 )   (324 )   (2,512 )   (17,526 )
 
Net income $ 52,343   $ 24,672   $ 149,899   $ 67,762  
 
Earnings per share - basic:
 
Income from continuing operations $ 2.24 $ 1.52 $ 6.77 $ 5.18
Loss from discontinued operations $ (0.07 ) $ (0.02 ) $ (0.11 ) $ (1.06 )
Net income $ 2.17   $ 1.50   $ 6.66   $ 4.12  
 
Weighted average common shares outstanding - basic   24,107     16,474     22,503     16,459  
 
Earnings per share - diluted:
 
Income from continuing operations $ 2.11 $ 1.49 $ 6.42 $ 5.12
Loss from discontinued operations $ (0.07 ) $ (0.02 ) $ (0.11 ) $ (1.05 )
Net income $ 2.04   $ 1.47   $ 6.31   $ 4.07  
 
Weighted average common shares outstanding - diluted   25,634     16,792     23,744     16,666  
 
Dividends declared and paid per common share $ 0.04   $ 0.04   $ 0.16   $ 0.16  
 
        *   Includes $1,252 of acquisition and integration expenses associated with the acquisition of Vought.
* * Includes $20,902 of acquisition and integration expenses associated with the acquisition of Vought.
 
   
FINANCIAL DATA (UNAUDITED)
 
TRIUMPH GROUP, INC. AND SUBSIDIARIES
(dollars in thousands, except per share data)
 
BALANCE SHEET Unaudited Audited
March 31, March 31,
2011 2010
Assets
Cash and cash equivalents $ 39,328 $ 157,218
Accounts receivable, net 369,491 214,497

Inventory, net of unliquidated progress payments of $138,206 and $12,701

781,714

350,865
Rotable assets 26,607 25,587
Prepaid and other current assets 18,141 18,455
Assets held for sale   4,574     5,051  
Current assets 1,239,855 771,673
 
Property and equipment, net 734,879 328,694
Goodwill 1,545,541 490,654
Intangible assets, net 859,620 83,165
Other, net   90,342     18,392  
 
Total assets $ 4,470,237   $ 1,692,578  
 
Liabilities & Stockholders' Equity
 
Current portion of long-term debt $ 300,252 $ 91,929
Accounts payable 262,716 92,852
Accrued expenses 320,354 98,582
Deferred income taxes 78,793 -
Liabilities related to assets held for sale   431     899  
Current liabilities 962,546 284,262
 
Long-term debt, less current portion 1,011,752 413,851
Accrued pension and post-retirement benefits, noncurrent 680,754 1,397
Deferred income taxes, noncurrent 20 114,187
Other noncurrent liabilities 180,442 18,195
 
Temporary equity 2,506 -
 
Stockholders' Equity:

Common stock, $.001 par value, 100,000,000 shares authorized, 24,345,303 and 16,817,931 shares issued

24 17
Capital in excess of par value 819,222 314,870
Treasury stock, at cost, 116,987 and 144,677 shares (5,085 ) (7,921 )
Accumulated other comprehensive income 120,471 705
Retained earnings   697,585     553,015  
Total stockholders' equity   1,632,217     860,686  
 
Total liabilities and stockholders' equity $ 4,470,237   $ 1,692,578  
 
   
FINANCIAL DATA (UNAUDITED)
 
TRIUMPH GROUP, INC. AND SUBSIDIARIES
(dollars in thousands)
 
 
 
SEGMENT DATA Three Months Ended Twelve Months Ended
March 31, March 31,
 
2011 2010 2011 2010
 
Net sales:
Aerostructures $ 703,461 $ 170,983 $ 2,126,040 $ 605,423
Aerospace Systems 147,809 124,637 513,435 473,409
Aftermarket Services 69,536 58,157 272,728 224,663
Elimination of inter-segment sales   (1,720 )   (1,796 )   (6,855 )   (8,715 )
$ 919,086   $ 351,981   $ 2,905,348   $ 1,294,780  
 
Operating income (loss):
Aerostructures $ 91,146 $ 34,302 $ 267,783 $ 102,271
Aerospace Systems 22,359 16,017 75,292 68,069
Aftermarket Services 6,996 3,932 28,774 11,226
Corporate   (12,091 )   (6,906 )   (57,813 )   (26,285 )
$ 108,410   * $ 47,345   $ 314,036   * * $ 155,281  
 
Depreciation and amortization:
Aerostructures $ 24,562 $ 5,854 $ 69,451 $ 24,025
Aerospace Systems 4,445 4,301 17,183 16,804
Aftermarket Services 2,615 3,205 11,101 12,855
Corporate   506     200     1,922     734  
$ 32,128   $ 13,560   $ 99,657   $ 54,418  
 
 
Capital expenditures:
Aerostructures $ 14,810 $ 1,872 $ 57,390 $ 9,107
Aerospace Systems 2,909 2,250 11,534 11,136
Aftermarket Services 1,454 661 <

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