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Triumph Group Reports Strong First Quarter Fiscal 2012 Earnings; Raises Fiscal Year 2012 Guidance
Dépèche transmise le 28 juillet 2011 par Business Wire
BERWYN, Pa.--(BUSINESS WIRE)--Triumph Group, Inc. (NYSE: TGI) today reported that net sales for the first quarter of fiscal year ending March 31, 2012 totaled $845.1 million, a 108 percent increase from last year’s first quarter net sales of $407.2 million. Organic sales growth for the quarter was thirteen percent. Income from continuing operations for the first quarter of fiscal year 2012 was $50.9 million, or $0.99 per diluted share, versus $11.6 million, or $0.31 per diluted share, for the first quarter of the prior fiscal year. The quarter’s results included $0.5 million pre tax ($0.3 million after tax or $0.01 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 $17.4 million pre tax ($13.2 million after tax) of transaction and integration expenses associated with the Vought acquisition. Excluding these costs, income from continuing operations for the quarter was $51.2 million, or $1.00 per diluted share. Net income for the first quarter of fiscal year 2012 increased 342 percent to $50.2 million, or $0.98 per diluted share, versus $11.4 million, or $0.30 per diluted share for the prior fiscal year. The results for first quarter of fiscal year 2012 included approximately $7.7 million of costs related to the retirement of the $350 million Term Loan B. In addition, the results for the quarter reflected the sale of the discontinued operation which was completed in early July. The number of shares used in computing diluted earnings per share for the first quarter of fiscal year 2012 was 51.3 million shares and reflected the previously announced two-for-one stock split. During the quarter, the company generated $116.3 million of cash flow from operations before Triumph Aerostructures’ pension contribution of $25.0 million; after this contribution, cash flow from operations was $91.3 million.
Segment Results
Aerostructures
The Aerostructures segment reported net sales for the quarter of $643.3 million compared to $231.3 million in the prior year period, an increase of 178 percent. Organic sales growth for the quarter was ten percent. Operating income for the first quarter of fiscal year 2012 was $88.0 million compared to $36.1 million for the prior year period, an increase of 144 percent. The segment’s operating margin for the quarter improved sequentially to fourteen percent. The operating margin for the segment’s heritage business was eighteen percent.
Aerospace Systems
The Aerospace Systems segment reported net sales for the quarter of $133.0 million, compared to $117.4 million in the prior year period, an increase of thirteen percent, all of which was organic. Operating income for the first quarter of fiscal year 2012 was $22.4 million compared to $18.3 million for the prior year period, an increase of twenty-two percent. Operating margin for the quarter increased to seventeen percent, an increase of 130 basis points over the prior year period. The segment’s operating results included $0.6 million of legal expenses associated with the ongoing trade secret litigation.
Aftermarket Services
The Aftermarket Services segment reported net sales for the quarter of $70.4 million, compared to $59.8 million in the prior year period, an increase of eighteen percent, all of which was organic. Operating income for the first quarter of fiscal year 2012 was $7.0 million compared to $4.1 million for the prior year period, an increase of sixty-nine percent. Operating margin for the quarter was ten percent, compared to seven percent in the prior year period.
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 delivered strong results during this quarter marked by increased revenues, meaningful operating income growth and year over year operating margin expansion across all three of our business segments. We generated significant cash flow during the quarter and our balance sheet and backlog remain strong. Strategically, we were proud to have won the design and build contract for the wing on the new Bombardier Global 7000 and Global 8000 business jet. In addition, we announced a two-for-one stock split and doubled our quarterly dividend reflecting our confidence in the company’s business performance and our continued commitment to provide increased value to our stockholders.”
“As a result of our strong first quarter, a favorable outlook for our major markets, current production rates and a weighted average share count of 51.6 million shares, we now expect that earnings per share from continuing operations for fiscal year 2012 will be approximately $4.35 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 first 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 July 29th until August 5th by calling (888) 266-2081 (Domestic) or (703) 925-2533 (International), passcode #1541083.
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 | |||||||||
| June 30, | |||||||||
| CONDENSED STATEMENTS OF INCOME | 2011 | 2010 | |||||||
| Net sales | $ | 845,063 | $ | 407,209 | |||||
| Operating income | 105,380 | * | 32,850 | * * | |||||
| Interest expense and other | 26,462 | 11,791 | |||||||
| Income tax expense | 28,014 | 9,479 | |||||||
| Income from continuing operations | 50,904 | 11,580 | |||||||
| Loss from discontinued operations, net of tax | (689 | ) | (208 | ) | |||||
| Net income | $ | 50,215 | $ | 11,372 | |||||
| Earnings per share - basic: | |||||||||
| Income from continuing operations | $ | 1.05 | $ | 0.33 | |||||
| Loss from discontinued operations | $ | (0.01 | ) | $ | (0.01 | ) | |||
| Net income | $ | 1.04 | $ | 0.32 | |||||
| Weighted average common shares outstanding - basic | 48,466 | 35,507 | |||||||
| Earnings per share - diluted: | |||||||||
| Income from continuing operations | $ | 0.99 | $ | 0.31 | |||||
| Loss from discontinued operations | $ | (0.01 | ) | $ | (0.01 | ) | |||
| Net income | $ | 0.98 | $ | 0.30 | |||||
| Weighted average common shares outstanding - diluted | 51,299 | 37,463 | |||||||
| Dividends declared and paid per common share | $ | 0.02 | $ | 0.02 | |||||
| * | Includes $460 of integration expenses associated with the acquisition of Vought. | |
| * * | Includes $17,376 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 | ||||||
| June 30, | March 31, | |||||||
| 2011 | 2011 | |||||||
| Assets | ||||||||
| Cash and cash equivalents | $ | 36,425 | $ | 39,328 | ||||
| Accounts receivable, net | 386,613 | 374,491 | ||||||
| Inventory, net of unliquidated progress payments of $159,214 and $138,206 | 742,390 | 781,714 | ||||||
| Rotable assets | 31,299 | 26,607 | ||||||
| Prepaid and other current assets | 18,106 | 18,141 | ||||||
| Assets held for sale | 4,439 | 4,574 | ||||||
| Current assets | 1,219,272 | 1,244,855 | ||||||
| Property and equipment, net | 727,935 | 734,879 | ||||||
| Goodwill | 1,532,663 | 1,530,580 | ||||||
| Intangible assets, net | 851,260 | 859,620 | ||||||
| Other, net | 91,176 | 93,303 | ||||||
| Total assets | $ | 4,422,306 | $ | 4,463,237 | ||||
| Liabilities & Stockholders' Equity | ||||||||
| Current portion of long-term debt | $ | 170,135 | $ | 300,252 | ||||
| Accounts payable | 270,482 | 262,716 | ||||||
| Accrued expenses | 295,701 | 313,354 | ||||||
| Deferred income taxes | 105,799 | 78,793 | ||||||
| Liabilities related to assets held for sale | 856 | 431 | ||||||
| Current liabilities | 842,973 | 955,546 | ||||||
| Long-term debt, less current portion | 1,068,459 | 1,011,752 | ||||||
| Accrued pension and post-retirement benefits, noncurrent | 647,381 | 680,754 | ||||||
| Other noncurrent liabilities | 172,340 | 180,462 | ||||||
| Temporary equity | 1,079 | 2,506 | ||||||
| Stockholders' Equity: | ||||||||
|
Common stock, $.001 par value, 100,000,000 shares authorized, 49,193,880 and 48,690,606 shares issued |
49 | 49 | ||||||
| Capital in excess of par value | 826,115 | 819,197 | ||||||
| Treasury stock, at cost, 158,256 and 177,184 shares | (4,614 | ) | (5,085 | ) | ||||
| Accumulated other comprehensive income | 122,014 | 120,471 | ||||||
| Retained earnings | 746,510 | 697,585 | ||||||
| Total stockholders' equity | 1,690,074 | 1,632,217 | ||||||
| Total liabilities and stockholders' equity | $ | 4,422,306 | $ | 4,463,237 | ||||
| FINANCIAL DATA (UNAUDITED) | |||||||||
| TRIUMPH GROUP, INC. AND SUBSIDIARIES | |||||||||
| (dollars in thousands) | |||||||||
| SEGMENT DATA | Three Months Ended | ||||||||
| June 30, | |||||||||
| 2011 | 2010 | ||||||||
| Net sales: | |||||||||
| Aerostructures | $ | 643,306 | $ | 231,335 | |||||
| Aerospace Systems | 133,010 | 117,433 | |||||||
| Aftermarket Services | 70,368 | 59,797 | |||||||
| Elimination of inter-segment sales | (1,621 | ) | (1,356 | ) | |||||
| $ | 845,063 | $ | 407,209 | ||||||
| Operating income (loss): | |||||||||
| Aerostructures | $ | 87,974 | $ | 36,067 | |||||
| Aerospace Systems | 22,417 | 18,348 | |||||||
| Aftermarket Services | 6,961 | 4,121 | |||||||
| Corporate | (11,972 | ) | (25,686 | ) | |||||
| $ | 105,380 | * | $ | 32,850 | * * | ||||
| Depreciation and amortization: | |||||||||
| Aerostructures | $ | 21,845 | $ | 8,044 | |||||
| Aerospace Systems | 4,345 | 4,189 | |||||||
| Aftermarket Services | 2,430 | 3,043 | |||||||
| Corporate | 847 | 380 | |||||||
| $ | 29,467 | $ | 15,656 | ||||||
| Amortization of acquired contract liabilities: | |||||||||
| Aerostructures | $ | 7,740 | $ | 859 | |||||
| Capital expenditures: | |||||||||
| Aerostructures | $ | 9,134 | $ | 5,297 | |||||
| Aerospace Systems | 3,505 | 2,504 | |||||||
| Aftermarket Services | 1,762 | 894 | |||||||
| Corporate | 1,263 | 8,245 | |||||||
| $ | 15,664 | $ | 16,940 | ||||||
| * | Includes $460 of integration expenses associated with the acquisition of Vought. | |
| * * | Includes $17,376 of acquisition and integration expenses associated with the acquisition of Vought. | |
FINANCIAL DATA (UNAUDITED)
TRIUMPH GROUP, INC. AND SUBSIDIARIES
(dollars in
thousands)
Non-GAAP Financial Measure Disclosures
We prepare and publicly release quarterly unaudited financial statements prepared in accordance with GAAP. In accordance with Securities and Exchange Commission (the “SEC”) guidance on Compliance and Disclosure Interpretations, we also disclose and discuss certain non-GAAP financial measures in our public releases. Currently, the non-GAAP financial measure that we disclose is EBITDA, which is our income from continuing operations before interest, income taxes, amortization of acquired contract liabilities, depreciation and amortization. We disclose EBITDA on a consolidated and an operating segment basis in our earnings releases, investor conference calls and filings with the SEC. The non-GAAP financial measures that we use may not be comparable to similarly titled measures reported by other companies. Also, in the future, we may disclose different non-GAAP financial measures in order to help our investors more meaningfully evaluate and compare our future results of operations to our previously reported results of operations.
We view EBITDA as an operating performance measure and as such we believe that the GAAP financial measure most directly comparable to it is income from continuing operations. In calculating EBITDA, we exclude from income from continuing operations the financial items that we believe should be separately identified to provide additional analysis of the financial components of the day-to-day operation of our business. We have outlined below the type and scope of these exclusions and the material limitations on the use of these non-GAAP financial measures as a result of these exclusions. EBITDA is not a measurement of financial performance under GAAP and should not be considered as a measure of liquidity, as an alternative to net income (loss), income from continuing operations, or as an indicator of any other measure of performance derived in accordance with GAAP. Investors and potential investors in our securities should not rely on EBITDA as a substitute for any GAAP financial measure, including net income (loss) or income from continuing operations. In addition, we urge investors and potential investors in our securities to carefully review the reconciliation of EBITDA to income from continuing operations set forth below, in our earnings releases and in other filings with the SEC and to carefully review the GAAP financial information included as part of our Quarterly Reports on Form 10-Q and our Annual Reports on Form 10-K that are filed with the SEC, as well as our quarterly earnings releases, and compare the GAAP financial information with our EBITDA.
EBITDA is used by management to internally measure our operating and management performance and by investors as a supplemental financial measure to evaluate the performance of our business that, when viewed with our GAAP results and the accompanying reconciliation, we believe provides additional information that is useful to gain an understanding of the factors and trends affecting our business. We have spent more than 15 years expanding our product and service capabilities partially through acquisitions of complementary businesses. Due to the expansion of our operations, which included acquisitions, our income from continuing operations has included significant charges for depreciation and amortization. EBITDA excludes these charges and provides meaningful information about the operating performance of our business, apart from charges for depreciation and amortization. We believe the disclosure of EBITDA helps investors meaningfully evaluate and compare our performance from quarter to quarter and from year to year. We also believe EBITDA is a measure of our ongoing operating performance because the isolation of non-cash income and expenses, such as amortization of acquired contract liabilities, depreciation and amortization, and non-operating items, such as interest and income taxes, provides additional information about our cost structure, and, over time, helps track our operating progress. In addition, investors, securities analysts and others have regularly relied on EBITDA to provide a financial measure by which to compare our operating performance against that of other companies in our industry.
Set forth below are descriptions of the financial items that have been excluded from our income from continuing operations to calculate EBITDA and the material limitations associated with using this non-GAAP financial measure as compared to income from continuing operations:
- Amortization of acquired contract liabilities may be useful for investors to consider because it represents the non-cash earnings on the fair value of below market contracts acquired through the acquisition of Vought. We do not believe these earnings necessarily reflect the current and ongoing cash earnings related to our operations.
- Amortization expenses may be useful for investors to consider because it represents the estimated attrition of our acquired customer base and the diminishing value of product rights and licenses. We do not believe these charges necessarily reflect the current and ongoing cash charges related to our operating cost structure.
- Depreciation may be useful for investors to consider because they generally represent the wear and tear on our property and equipment used in our operations. We do not believe these charges necessarily reflect the current and ongoing cash charges related to our operating cost structure.
- The amount of interest expense and other we incur may be useful for investors to consider and may result in current cash inflows or outflows. However, we do not consider the amount of interest expense and other to be a representative component of the day-to-day operating performance of our business.
| FINANCIAL DATA (UNAUDITED) | ||
| TRIUMPH GROUP, INC. AND SUBSIDIARIES | ||
| (dollars in thousands) | ||
| Non-GAAP Financial Measure Disclosures (continued) | ||
|
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Income tax expense may be useful for investors to consider because it generally represents the taxes which may be payable for the period and the change in deferred income taxes during the period and may reduce the amount of funds otherwise available for use in our business. However, we do not consider the amount of income tax expense to be a representative component of the day-to-day operating performance of our business. |
|
| Management compensates for the above-described limitations of using non-GAAP measures by using a non-GAAP measure only to supplement our GAAP results and to provide additional information that is useful to gain an understanding of the factors and trends affecting our business. | ||
| The following table shows our EBITDA reconciled to our income from continuing operations for the indicated periods (in thousands): | ||
| Three Months Ended | ||||||||
| June 30, | ||||||||
| 2011 | 2010 | |||||||
| Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA): | ||||||||
| Income from continuing operations | $ | 50,904 | $ | 11,580 | ||||
| Add-back: | ||||||||
| Income tax expense | 28,014 | 9,479 | ||||||
| Interest expense and other | 26,462 | 11,791 | ||||||
| Amortization of acquired contract liabilities | (7,740 | ) | (859 | ) | ||||
| Depreciation and amortization | 29,467 | 15,656 | ||||||
|
|
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|
Earnings before Interest, Taxes, Depreciation and Amortization ("EBITDA") |
$ | 127,107 | $ | 47,647 | ||||
| Net sales | $ | 845,063 | $ | 407,209 | ||||
| EBITDA Margin | 15.0 | % | 11.7 | % | ||||
