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Triumph Group Reports Strong Third Quarter Fiscal 2011 Results

Dépèche transmise le 1 février 2011 par Business Wire

WAYNE, Pa.--(BUSINESS WIRE)--Triumph Group, Inc. (NYSE: TGI) today reported that net sales for the third quarter of the fiscal year ending March 31, 2011 totaled $810.9 million, a 159 percent increase from last year’s third quarter net sales of $313.5 million. Organic sales growth for the quarter was ten percent. Income from continuing operations for the third quarter of fiscal year 2011 increased 149 percent to $45.0 million, or $1.77 per diluted share, versus $18.1 million, or $1.08 per diluted share, for the third quarter of the prior year. The quarter’s results included approximately $1.0 million pre tax ($0.6 million after tax or $0.02 per diluted share) of integration costs related to the acquisition of Vought Aircraft Industries (now Triumph Aerostructures-Vought Aircraft Division). Excluding these integration costs, income from continuing operations for the quarter was $45.6 million, or $1.79 per diluted share. Net income for the third quarter of fiscal year 2011 increased 697 percent to $44.6 million, or $1.75 per diluted share, versus $5.6 million, or $0.34 per diluted share, for the third quarter of the prior year. The tax rate for the quarter was 30.5% and was favorably impacted by the effect of the recently enacted extension of the Research and Development Tax Credit. The tax rate for the remainder of the fiscal year will be approximately 34.5%. The number of shares used in computing diluted earnings per share for the third quarter of fiscal year 2011 increased to 25.5 million shares primarily due to the dilutive effect of the company’s convertible notes. During the quarter, the company used $3.0 million of cash flow from operations.

Net sales for the first nine months of fiscal year 2011 were $1.986 billion, a 111 percent increase from net sales of $942.8 million last fiscal year. Income from continuing operations for the first nine months of fiscal year 2011 increased sixty-three percent to $98.4 million, or $4.26 per diluted share, versus $60.3 million, or $3.62 per diluted share, in the prior year period. The year to date results included approximately $19.7 million pre tax ($14.6 million after tax or $0.63 per diluted share) of transaction and integration expenses related to the Vought acquisition. Excluding the acquisition-related costs, income from continuing operations for the nine months was $113.0 million, or $4.89 per diluted share. Net income for the first nine months of fiscal year 2011 increased 126 percent to $97.6 million, or $4.22 per diluted share, versus $43.1 million, or $2.59 per diluted share, in the prior year period. During the nine months ended December 31, 2010, the company generated $114.7 million of cash flow from operations.

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 the quarter of $613.5 million compared to $152.4 million in the prior year period, an increase of 302 percent. Operating income for the third quarter of fiscal year 2011 was $70.6 million compared to $24.2 million for the prior year period, an increase of 192 percent. Operating margin for the segment’s legacy business improved year over year by fifty basis points to sixteen percent.

Aerospace Systems

The Aerospace Systems segment reported net sales for the quarter of $124.7 million compared to $111.8 million in the prior year period, an increase of twelve percent. Organic sales growth for the quarter was seven percent. Operating income for the third quarter of fiscal year 2011 was $17.4 million compared to $14.9 million for the prior year period, an increase of seventeen percent. The segment’s operating results included $0.7 million of legal expenses associated with the ongoing trade secret litigation.

Aftermarket Services

The Aftermarket Services segment reported net sales for the quarter of $74.7 million compared to $51.4 million in the prior year period, an increase of forty-five percent, all of which was organic. Operating income for the third quarter of fiscal year 2011 was $9.5 million compared to $1.4 million for the prior year period, an increase of 583 percent. Operating margin for the quarter increased to thirteen percent, a 370 percent year over year improvement.

Outlook

Commenting on the company’s performance and its outlook for fiscal year 2011, Richard C. Ill, Triumph’s Chairman and Chief Executive Officer, said, “We continued our strong performance during the third quarter with all three of our business segments delivering year over year organic growth in operating income and operating margin. We are proud of the significant cash flow from operations we have generated through nine months, which has exceeded our net income. In addition, our Aftermarket Services Group continues to show robust revenue growth and, even more importantly, significant margin improvement. The integration of Vought remains on track. Therefore, as our end markets and the great majority of our programs continue to strengthen, we are confident in our ability to deliver revenue growth, strong cash flow and earnings expansion throughout the remainder of our fiscal year and beyond."

“Based on current aircraft production rates, our current view of the purchase accounting impact resulting from the Vought acquisition and an increased weighted average share count of 23.7 million shares, we expect that earnings per share from continuing operations for fiscal year 2011 will be approximately $6.75 per diluted share excluding transaction and integration costs. Based on the progress of the Vought integration to date, we now expect to generate annual recurring synergies in excess of $18 million within the first twelve to eighteen months of the acquisition.”

As previously announced, Triumph Group will hold a conference call tomorrow at 8:30 a.m. (ET) to discuss the fiscal year 2011 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 February 1st until February 8th by calling (888) 266-2081 (Domestic) or (703) 925-2533 (International), passcode #1489044.

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 future aerospace market conditions, aircraft production rates, financial and operational performance, revenue and earnings growth, and earnings results for fiscal 2011. 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 Nine Months Ended
December 31, December 31,
 
CONDENSED STATEMENTS OF INCOME 2010 2009 2010 2009
 
 
Net sales $810,853 $313,530 $1,986,262 $942,799
 
Operating income 86,659 * 32,938 205,626 * * 107,936
 
Interest expense and other 21,869 7,768 57,119 18,595
Gain on early extinguishment of debt 0 0 (39 )
Income tax expense 19,810   7,117   50,126   29,088  
 
Income from continuing operations 44,980 18,053 98,381 60,292
Loss from discontinued operations, net of tax (336 ) (12,453 ) (825 ) (17,202 )
 
Net income $44,644   $5,600   $97,556   $43,090  
 
Earnings per share - basic:
 
Income from continuing operations $1.87 $1.10 $4.48 $3.66
Loss from discontinued operations ($0.01 ) ($0.76 ) ($0.04 ) ($1.05 )
Net income $1.85   ^ $0.34   $4.44   $2.62   ^
 
Weighted average common shares outstanding - basic 24,078   16,467   21,978   16,454  
 
Earnings per share - diluted:
 
Income from continuing operations $1.77 $1.08 $4.26 $3.62
Loss from discontinued operations ($0.01 ) ($0.75 ) ($0.04 ) ($1.03 )
Net income $1.75   ^ $0.34   ^ $4.22   $2.59  
 
Weighted average common shares outstanding - diluted 25,475   16,688   23,106   16,641  
 
Dividends declared and paid per common share $0.04   $0.04   $0.12   $0.12  
 
* Includes $1,000 of acquisition-related expenses associated with the acquisition of Vought.
* * Includes $19,650 of acquisition-related expenses associated with the acquisition of Vought.
 
^ Difference due to rounding.
 
         
FINANCIAL DATA (UNAUDITED)
   
TRIUMPH GROUP, INC. AND SUBSIDIARIES
(dollars in thousands, except per share data)
 
BALANCE SHEET Unaudited Audited
December 31, March 31,
2010 2010
Assets
Cash and cash equivalents $33,263 $157,218
Accounts receivable, net 275,719 214,497
Inventory, net of unliquidated progress payments of $179,592 and $12,701 805,755 351,224
Rotable assets 26,788 25,587
Prepaid and other current assets 22,429 18,455
Assets held for sale 4,828   5,051  
Current assets 1,168,782 772,032
 
Property and equipment, net 732,562 327,634
Goodwill 1,480,302 502,074
Intangible assets, net 960,442 79,844
Other, net 91,888   18,392  
 
Total assets $4,433,976   $1,699,976  
 
Liabilities & Stockholders' Equity
 
Current portion of long-term debt $270,554 $91,929
Accounts payable 205,789 92,859
Accrued expenses 305,121 98,565
Deferred income taxes, current 9,811 -
Liabilities related to assets held for sale 839   899  
Current liabilities 792,114 284,252
 
Long-term debt, less current portion 1,035,209 413,851
Accrued pension and post-retirement benefits, noncurrent 954,331 1,397
Deferred income taxes, noncurrent - 113,640
Other noncurrent liabilities 207,323 26,150
 
Stockholders' Equity:

Common stock, $.001 par value, 100,000,000 shares authorized, 24,347,951 and 16,817,931 shares issued

24 17
Capital in excess of par value 821,986 314,870
Treasury stock, at cost, 116,987 and 144,677 shares (6,715 ) (7,921 )
Accumulated other comprehensive (loss) income (17,064 ) 705
Retained earnings 646,768   553,015  
Total stockholders' equity 1,444,999   860,686  
 
Total liabilities and stockholders' equity $4,433,976   $1,699,976  
 
       
FINANCIAL DATA (UNAUDITED)
   
TRIUMPH GROUP, INC. AND SUBSIDIARIES
(dollars in thousands)
 
 
 
SEGMENT DATA Three Months Ended Nine Months Ended
December 31, December 31,
 
2010 2009 2010 2009
 
Net sales:
Aerostructures $613,544 $152,440 $1,422,580 $434,440
Aerospace Systems 124,693 111,769 365,626 348,771
Aftermarket Services 74,709 51,409 203,191 166,506
Elimination of inter-segment sales (2,093 ) (2,088 ) (5,135 ) (6,918 )
$810,853   $313,530   $1,986,262   $942,799  
 
Operating income (loss):
Aerostructures $70,606 $24,201 $176,637 $67,969
Aerospace Systems 17,436 14,889 52,933 52,052
Aftermarket Services 9,494 1,390 21,778 7,294
Corporate (10,877 ) (7,542 ) (45,722 ) (19,379 )
$86,659   * $32,938   $205,626   * * $107,936  
 
Depreciation and amortization:
Aerostructures $18,071 $5,286 $44,889 $18,171
Aerospace Systems 4,336 3,798 12,738 12,503
Aftermarket Services 2,400 3,211 8,486 9,650
Corporate 845   190  

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