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Triumph Group Reports Strong Second Quarter Fiscal 2012 Earnings; Raises Fiscal Year 2012 Guidance

Dépèche transmise le 31 octobre 2011 par Business Wire

BERWYN, Pa.--(BUSINESS WIRE)--Triumph Group, Inc. (NYSE: TGI) today reported that net sales for the second quarter of fiscal year ending March 31, 2012 totaled $790.5 million, a three percent increase from last year’s second quarter net sales of $768.2 million, all of which was organic. Net sales for the quarter reflected less non-recurring revenue principally related to development of the Boeing 747 as compared to the prior year quarter. In addition, there were two fewer 747 shipments in the current quarter related to Boeing’s previously announced pause in production. Excluding the impact of both of these items, year over year revenue growth would have been in excess of ten percent. Income from continuing operations for the second quarter of fiscal year 2012 increased forty percent to $58.6 million, or $1.13 per diluted share, versus $41.8 million, or $0.84 per diluted share, for the second quarter of the prior fiscal year. The quarter’s results included $1.1 million pretax ($0.7 million after tax or $0.02 per diluted share) of integration expenses related to the acquisition of Vought Aircraft Industries (now Triumph Aerostructures-Vought Aircraft Division). The prior fiscal year’s quarter included $1.3 million pretax ($0.8 million after tax) of integration costs associated with the Vought acquisition. Excluding these costs, income from continuing operations for the quarter was $59.3 million, or $1.15 per diluted share. The number of shares used in computing diluted earnings per share for the second quarter of fiscal year 2012 was 51.6 million shares and reflected the previously announced two-for-one stock split.

Net sales for the first six months of fiscal year 2012 were $1.636 billion, a thirty-nine percent increase from net sales of $1.175 billion last fiscal year. Income from continuing operations for the first six months of fiscal year 2012 increased 105 percent to $109.5 million, or $2.13 per diluted share, versus $53.4 million, or $1.22 per diluted share, in the prior year period. The year to date results included $1.6 million pretax ($1.0 million after tax or $0.02 per diluted share) of integration expenses related to the Vought acquisition. The prior fiscal year period included $18.7 million pretax ($14.0 million after tax) of transaction and integration expenses associated with the Vought acquisition. Excluding these costs, income from continuing operations for the first six months of fiscal year 2012 was $110.5 million, or $2.15 per diluted share. Net income for the first six months of fiscal year 2012 increased 105 percent to $108.7 million, or $2.11 per diluted share, versus $52.9 million, or $1.21 per diluted share, in the prior year period. During the six months ended September 30, 2011, the company generated $122.1 million of cash flow from operations before Triumph Aerostructures’ pension contribution of $61.0 million; after this contribution, cash flow from operations was $61.1 million. The year to date cash flow was negatively impacted by a $51.0 million contractual payment that was due at the end of September but not received until the beginning of October.

Segment Results

Aerostructures

The Aerostructures segment reported net sales for the quarter of $588.0 million compared to $577.7 million in the prior year period, an increase of two percent, all of which was organic. The segment’s revenue for the quarter reflected less non-recurring revenue principally related to development of the Boeing 747 as compared to the prior year quarter. In addition, there were two fewer 747 shipments in the current quarter related to Boeing’s previously announced pause in production. Excluding the impact of both of these items, year over year revenue growth would have been in excess of ten percent. Operating income for the second quarter of fiscal year 2012 was $92.5 million compared to $70.0 million for the prior year period, an increase of thirty-two percent. The segment’s operating margin for the quarter increased to sixteen percent, a 360 basis points improvement over the prior year period.

Aerospace Systems

The Aerospace Systems segment reported net sales for the quarter of $133.8 million, compared to $123.5 million in the prior year period, an increase of eight percent, all of which was organic. Operating income for the second quarter of fiscal year 2012 was $22.6 million compared to $17.1 million for the prior year period, an increase of thirty-two percent. Operating margin for the quarter was seventeen percent, an increase of 300 basis points over the prior year period. The segment’s operating results included $0.5 million of legal expenses associated with the ongoing trade secret litigation.

Aftermarket Services

The Aftermarket Services segment reported net sales for the quarter of $70.5 million, compared to $68.7 million in the prior year period, an increase of three percent, which brings year to date sales growth to ten percent. All of the segment’s sales were organic. Operating income for the second quarter of fiscal year 2012 was $7.0 million compared to $8.2 million (which included a gain of $0.7 million on the sale of certain intellectual property) for the prior year period. Operating margin for the quarter was ten percent.

Outlook

Commenting on the company’s performance and its outlook for fiscal year 2012, Richard C. Ill, Triumph’s Chairman and Chief Executive Officer, said, “This was another strong quarter for Triumph, driven by significant operating income growth and a 250 basis point expansion in year over year operating margin. We are particularly proud of the strong operating margins we generated in our Aerospace Systems segment as well as our Aerostructures segment, both of which were a result of good execution. Our Aerostructures segment margins also benefited from the synergies we realized from the Vought acquisition.”

“Based on our strong year to date performance, current production rates and a weighted average share count of 51.6 million shares, we are reaffirming our revenue guidance for fiscal year 2012 of $3.2 to $3.5 billion and are raising our full year earnings guidance to earnings per share from continuing operations of approximately $4.50 per diluted share excluding integration costs.”

As previously announced, Triumph Group will hold a conference call tomorrow at 8:30 a.m. (ET) to discuss the fiscal year 2012 second quarter 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 November 1st until November 7th by calling (888) 266-2081 (Domestic) or (703) 925-2533 (International), passcode #1554799.

Triumph Group, Inc., headquartered in Berwyn, 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, 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, 2011.

FINANCIAL DATA (UNAUDITED)
   
TRIUMPH GROUP, INC. AND SUBSIDIARIES
(in thousands, except per share data)
 
 
Three Months Ended Six Months Ended
September 30, September 30,
 
CONDENSED STATEMENTS OF INCOME 2011 2010 2011 2010
 
 
Net sales $ 790,528 $ 768,200 $ 1,635,591 $ 1,175,409
 
Operating income 108,456 * 86,117 * * 213,836 * 118,967 * *
 
Interest expense and other 17,671 23,459 44,133 35,250
Income tax expense   32,221     20,837     60,235     30,316  
 
Income from continuing operations 58,564 41,821 109,468 53,401
Loss from discontinued operations, net of tax   (76 )   (281 )   (765 )   (489 )
 
Net income $ 58,488   $ 41,540   $ 108,703   $ 52,912  
 
Earnings per share - basic:
 
Income from continuing operations $ 1.20 $ 0.87 $ 2.25 $ 1.28
Loss from discontinued operations   (0.00 )   (0.01 )   (0.02 )   (0.01 )
Net income $ 1.20   $ 0.86   $ 2.24   ^ $ 1.26   ^
 
Weighted average common shares outstanding - basic   48,697     48,115     48,562     41,845  
 
Earnings per share - diluted:
 
Income from continuing operations $ 1.13 $ 0.84 $ 2.13 $ 1.22
Loss from discontinued operations   (0.00 )   (0.01 )   (0.01 )   (0.01 )
Net income $ 1.13   $ 0.83   $ 2.11   ^ $ 1.21  
 
Weighted average common shares outstanding - diluted   51,646     50,036     51,478     43,782  
 
Dividends declared and paid per common share $ 0.04   $ 0.02   $ 0.06   $ 0.04  
 
^   Difference due to rounding.
*

Includes $1,144 and $1,604, respectively, of integration expenses associated with the acquisition of Vought for the three and six months ended September 30, 2011.

* *

Includes $1,283 and $18,650, respectively, of acquisition and integration expenses associated with the acquisition of Vought for the three and six months ended September 30, 2010.

 

FINANCIAL DATA (UNAUDITED)
         
TRIUMPH GROUP, INC. AND SUBSIDIARIES
(dollars in thousands, except per share data)
 
BALANCE SHEET Unaudited Audited
September 30, March 31,
2011 2011
Assets
Cash and cash equivalents $ 34,750 $ 39,328
Accounts receivable, net 364,590 374,491
Inventory, net of unliquidated progress payments of $121,389 and $138,206 818,126 781,714
Rotable assets 32,221 26,607
Prepaid and other current assets 24,958 18,141
Assets held for sale   0     4,574  
Current assets 1,274,645 1,244,855
 
Property and equipment, net 719,949 734,879
Goodwill 1,531,106 1,530,580
Intangible assets, net 842,502 859,620
Other, net   52,717     93,303  
 
Total assets $ 4,420,919   $ 4,463,237  
 
Liabilities & Stockholders' Equity
 
Current portion of long-term debt $ 165,451 $ 300,252
Accounts payable 264,762 262,716
Accrued expenses 284,002 313,354
Deferred income taxes 99,809 78,793
Liabilities related to assets held for sale   0     431  
Current liabilities 814,024 955,546
 
Long-term debt, less current portion 1,099,091 1,011,752
Accrued pension and post-retirement benefits, noncurrent 601,964 680,754
Other noncurrent liabilities 165,041 180,462
 
Temporary equity - 2,506
 
Stockholders' Equity:

Common stock, $.001 par value, 100,000,000 shares authorized, 49,205,763 and 48,690,606 shares issued

49 49
Capital in excess of par value 827,999 819,197
Treasury stock, at cost, 156,903 and 177,184 shares (4,711 ) (5,085 )
Accumulated other comprehensive income 114,439 120,471
Retained earnings   803,023     697,585  
Total stockholders' equity   1,740,799     1,632,217  
 
Total liabilities and stockholders' equity $ 4,420,919   $ 4,463,237  
 

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FINANCIAL DATA (UNAUDITED)
   
TRIUMPH GROUP, INC. AND SUBSIDIARIES
(dollars in thousands)
 
 
 
SEGMENT DATA Three Months Ended Six Months Ended
September 30, September 30,
 
2011 2010 2011 2010
 
Net sales:
Aerostructures $ 587,977 $ 577,700 $ 1,231,283 $ 809,035
Aerospace Systems 133,775 123,500 266,785 240,933
Aftermarket Services 70,547 68,686 140,915 128,483
Elimination of inter-segment sales   (1,771 )   (1,686 )   (3,392 )   (3,042 )
$ 790,528   $ 768,200   $ 1,635,591   $ 1,175,409  
 
Operating income (loss):
Aerostructures $ 92,489 $ 69,964 $ 180,463 $ 106,030
Aerospace Systems 22,644 17,149 45,061 35,497
Aftermarket Services 7,015 8,163 13,976 12,284
Corporate   (13,692 )   (9,159 )   (25,664 )   (34,844 )
$ 108,456