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Triumph Group Reports Strong Third Quarter Fiscal 2012 Results; Raises Fiscal Year 2012 Guidance

Dépèche transmise le 30 janvier 2012 par Business Wire

BERWYN, Pa.--(BUSINESS WIRE)--Triumph Group, Inc. (NYSE: TGI) today reported that net sales for the third quarter of fiscal year ending March 31, 2012 totaled $826.0 million, a two percent increase from last year’s third quarter net sales of $810.9 million. Organic sales growth for the quarter was two percent. Adjusting for declines in both non-recurring revenue and the 787 program, sales would have increased five percent.

“Based on our strong performance year to date, current aircraft production rates, a weighted average share count of 52.0 million shares and revenue between $3.35 and $3.4 billion, we are raising our diluted per share earnings guidance from continuing operations for the full year to approximately $4.70 excluding integration costs.”

Income from continuing operations for the third quarter of fiscal year 2012 increased forty-seven percent to $65.9 million, or $1.27 per diluted share, versus $45.0 million, or $0.88 per diluted share, for the third quarter of the prior year. The quarter’s results included $2.1 million pre tax ($1.3 million after tax or $0.03 per diluted share) of integration costs related to the acquisition of Vought Aircraft Industries (now Triumph Aerostructures-Vought Aircraft Division), of which $1.4 million was primarily non-cash costs related to manufacturing moves. The prior fiscal year’s quarter included $1.0 million pretax ($0.7 million after tax) of integration costs associated with the Vought acquisition. Excluding these costs, income from continuing operations for the third quarter of fiscal year 2012 was $67.2 million, or $1.29 per diluted share.

“Interest expense and other” for the third quarter of fiscal 2012 was favorably impacted by a $2.9 million adjustment due to the revaluation of a contingent earnout liability associated with a prior acquisition. The number of shares used in computing diluted earnings per share for the third quarter of fiscal year 2012 was 52.0 million shares.

Net sales for the first nine months of fiscal year 2012 were $2.462 billion, a twenty-four percent increase from net sales of $1.986 billion last fiscal year. Income from continuing operations for the first nine months of fiscal year 2012 increased seventy-eight percent to $175.4 million, or $3.39 per diluted share, versus $98.4 million, or $2.13 per diluted share, in the prior year period. The year to date results included $3.7 million pretax ($2.4 million after tax or $0.05 per diluted share) of integration expenses related to the Vought acquisition. The prior fiscal year’s period included $19.7 million pretax ($14.5 million after tax) of transaction and integration expenses associated with the Vought acquisition. Excluding these costs, income from continuing operations for the first nine months of fiscal 2012 was $177.7 million, or $3.44 per diluted share.

During the nine months ended December 31, 2011, the company generated $241.2 million of cash flow from operations before Triumph Aerostructures’ pension contribution of $97.7 million; after this contribution, cash flow from operations was $143.5 million.

Segments

Aerostructures

The Aerostructures segment reported net sales for the quarter of $626.0 million compared to $613.5 million in the prior year period, an increase of two percent, all of which was organic. Operating income for the third quarter of fiscal year 2012 increased forty-seven percent to $103.9 million versus $70.6 million for the prior year period and included a net favorable cumulative catch-up adjustment on long-term contracts of $8.4 million. As a result of improved execution, synergy realization and lower pension expense, the segment’s operating margin for the quarter increased to seventeen percent, a 510 basis points improvement over the prior year period.

Aerospace Systems

The Aerospace Systems segment reported net sales for the quarter of $133.3 million compared to $124.7 million in the prior year period, an increase of seven percent, all of which was organic. Operating income for the third quarter of fiscal year 2012 was $18.6 million compared to $17.4 million for the prior year period, an increase of seven percent. Operating margin for the quarter was fourteen percent. The segment’s operating results included $0.8 million of legal expenses associated with the ongoing trade secret litigation.

Aftermarket Services

The Aftermarket Services segment reported net sales for the quarter of $68.6 million compared to an all time quarter record of $74.7 million in the prior year period. The decrease of eight percent was driven primarily by a reduction in military sales. Operating income for the third quarter of fiscal year 2012 was $6.9 million compared to $9.5 million for the prior year period. Operating margin for the quarter was ten percent. The segment’s operating results included $0.7 million of expense associated with the American Airlines bankruptcy.

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, “We continued our strong performance during the third quarter delivering increased revenue, record operating income and substantially higher operating margins in our Aerostructures Group. We continued to execute well, contain costs, and generate very strong cash flow. We expect this momentum to carry on into our fourth quarter and are confident in our ability to deliver long term organic growth and strong profitability.”

“Based on our strong performance year to date, current aircraft production rates, a weighted average share count of 52.0 million shares and revenue between $3.35 and $3.4 billion, we are raising our diluted per share earnings guidance from continuing operations for the full year to approximately $4.70 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 third 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 January 31st to February 7th by calling (888) 266-2081 (Domestic) or (703) 925-2533 (International), passcode #1564054.

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 Nine Months Ended
December 31, December 31,
 
CONDENSED STATEMENTS OF INCOME 2011 2010 2011 2010
 
 
Net sales $ 825,962 $ 810,853 $ 2,461,553 $ 1,986,262
 
Operating income 117,640 * 86,659 * * 331,476 * 205,626 * *
 
Interest expense and other 14,543 21,869 58,676 57,119
Income tax expense   37,194   19,810     97,429     50,126  
 
Income from continuing operations 65,903 44,980 175,371 98,381
Loss from discontinued operations, net of tax   0   (336 )   (765 )   (825 )
 
Net income $ 65,903 $ 44,644   $ 174,606   $ 97,556  
 
Earnings per share - basic:
 
Income from continuing operations $ 1.35 $ 0.93 $ 3.60 $ 2.24
Loss from discontinued operations   -   (0.01 )   (0.02 )   (0.02 )
Net income $ 1.35 $ 0.93   ^ $ 3.59   ^ $ 2.22  
 
Weighted average common shares outstanding - basic   48,912   48,155     48,692     43,956  
 
Earnings per share - diluted:
 
Income from continuing operations $ 1.27 $ 0.88 $ 3.39 $ 2.13
Loss from discontinued operations   -   (0.01 )   (0.01 )   (0.02 )
Net income $ 1.27 $ 0.88   ^ $ 3.38   $ 2.11  
 
Weighted average common shares outstanding - diluted   51,968   50,950     51,689     46,213  
 
Dividends declared and paid per common share $ 0.04 $ 0.02   $ 0.10   $ 0.06  
 
^   Difference due to rounding.
*

Includes $2,095 and $3,699, respectively, of acquisition and integration expenses primarily associated with the acquisition of Vought for the three and nine months ended December 31, 2011.

* * Includes $1,000 and $19,650, respectively, of acquisition and integration expenses associated with the acquisition of Vought for the three and nine months ended December 31, 2010.
 
FINANCIAL DATA (UNAUDITED)
           
TRIUMPH GROUP, INC. AND SUBSIDIARIES
(dollars in thousands, except per share data)
 
BALANCE SHEET Unaudited Audited
December 31, March 31,
2011 2011
Assets
Cash and cash equivalents $ 32,682 $ 39,328
Accounts receivable, net 345,627 374,491
Inventory, net of unliquidated progress payments of $148,351 and $138,206 848,555 781,714
Rotable assets 33,024 26,607
Prepaid and other current assets 47,908 18,141
Assets held for sale   0     4,574  
Current assets 1,307,796 1,244,855
 
Property and equipment, net 722,332 734,879
Goodwill 1,533,102 1,530,580
Intangible assets, net 837,641 859,620
Other, net   32,702     93,303  
 
Total assets $ 4,433,573   $ 4,463,237  
 
Liabilities & Stockholders' Equity
 
Current portion of long-term debt $ 141,535 $ 300,252
Accounts payable 236,134 262,716
Accrued expenses 320,722 313,354
Deferred income taxes 49,871 78,793
Liabilities related to assets held for sale   0     431  
Current liabilities 748,262 955,546
 
Long-term debt, less current portion 1,070,520 1,011,752
Accrued pension and post-retirement benefits, noncurrent 558,470 680,754
Other noncurrent liabilities 250,045 180,462
 
Temporary equity - 2,506
 
Stockholders' Equity:

Common stock, $.001 par value, 100,000,000 shares authorized, 49,598,323 and 48,690,606 shares issued

50 49
Capital in excess of par value 833,221 819,197
Treasury stock, at cost, 137,911 and 177,184 shares (4,044 ) (5,085 )
Accumulated other comprehensive income 110,360 120,471
Retained earnings   866,689     697,585  
Total stockholders' equity   1,806,276     1,632,217  
 
Total liabilities and stockholders' equity $ 4,433,573   $ 4,463,237  
 

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FINANCIAL DATA (UNAUDITED)
   
TRIUMPH GROUP, INC. AND SUBSIDIARIES
(dollars in thousands)
 
 
 
SEGMENT DATA Three Months Ended Nine Months Ended
December 31, December 31,
 
2011 2010 2011 2010
 
Net sales:
Aerostructures $ 626,045 $ 613,544 $ 1,857,328 $ 1,422,580
Aerospace Systems 133,291 124,693 400,076 365,626
Aftermarket Services 68,640 74,709 209,555 203,191
Elimination of inter-segment sales   (2,014 )   (2,093 )   (5,406 )   (5,135 )
$ 825,962   $ 810,853   $ 2,461,553   $ 1,986,262  
 
Operating income (loss):
Aerostructures $ 103,947 $ 70,606 $ 284,410 $ 176,637
Aerospace Systems 18,623 17,436 63,684 52,933
Aftermarket Services 6,917 9,494 20,893 21,778
Corporate   (11,847 )   (10,877 )   (37,511 )   (45,722 )
$ 117,640   * $ 86,659   * * $ 331,476   * $ 205,626   * *
 
Depreciation and amortization:
Aerostructures $ 22,476 $ 18,071 $ 66,258 $ 44,889
Aerospace Systems 4,296 4,336 12,963 12,738
Aftermarket Services 2,431 2,400 7,202 8,486