Delaware | 1-12235 | 51-0347963 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||
899 Cassatt Road, Suite 210 | 19312 | |||
Berwyn, Pennsylvania | (Zip Code) | |||
(Address of principal executive offices) |
Item 2.02 | Results of Operations and Financial Condition. |
• | For the fiscal quarter ended September 30, 2013, sales mix was as follows: commercial was 58% (compared to 56% in the prior fiscal quarter), military was 28% (same as in the prior fiscal quarter), business jets were 11% (compared to 13% in the prior fiscal quarter), regional jets were 1% (same as the prior fiscal quarter) and non-aviation was 2% (same as the prior fiscal quarter). |
• | The top ten programs represented in the backlog were the 747, 777, C-17, G450/G550, C-17, A330, 787, V-22, UH-60 and 767 programs, respectively. |
• | For the fiscal quarter ended September 30, 2013, The Boeing Company (commercial, military and space) accounted for 47% of net sales. |
• | Same store sales for the fiscal quarter ended September 30, 2013 decreased 4% over the prior year period. Aerostructures same store sales for the fiscal quarter ended September 30, 2013 were $674.9 million, a decrease of 5% over the prior year period. Aerospace Systems same store sales for the fiscal quarter ended September 30, 2013 were $145.6 million, a decrease of 3% over the prior year period. Aftermarket Services same store sales for the fiscal quarter ended September 30, 2013 were $73.0 million, an increase of 5% over the prior year period. |
• | For the fiscal quarter ended September 30, 2013, OEM sales represented 85% of net sales (compared to 86% in the prior fiscal quarter), Aftermarket sales represented 13% of net sales (compared to 12% in the prior fiscal quarter), and Other represented 2% of net sales (same as the prior fiscal quarter). |
• | Export sales for the fiscal quarter ended September 30, 2013 were $151.1 million, an increase of 33% over the comparable quarter in the prior fiscal quarter. |
Item 9.01 | Financial Statements and Exhibits. | |
(d) | Exhibits. |
Exhibit No. | Description | |
99.1 | Press release dated October 29, 2013 |
Date: | October 30, 2013 | TRIUMPH GROUP, INC. | |
By: | /s/ John B. Wright, II | ||
John B. Wright, II | |||
Vice President, General Counsel and Secretary |
Exhibit No. | Description | |
99.1 | Press release dated October 29, 2013 |
• | Net sales for second quarter fiscal year 2014 increased 3% to $967.3 million |
• | Operating income for second quarter fiscal year 2014 was $93.0 million, reflecting an operating margin of 10% |
• | Net income for second quarter fiscal year 2014 was $49.5 million, or $0.94 per diluted share, which included $5.8 million pre-tax ($0.07 per diluted share) of costs related to the Jefferson Street facility move. Excluding these costs, earnings per share was $1.01 per diluted share |
• | Year to date cash flow from operations before pension contributions of $45.8 million was $89.4 million |
Three Months Ended | Six Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
CONDENSED STATEMENTS OF INCOME | 2013 | 2012 | 2013 | 2012 | ||||||||||||
Net sales | $ | 967,345 | $ | 938,181 | $ | 1,911,028 | $ | 1,825,869 | ||||||||
Operating income | 92,971 | 142,947 | 234,317 | 283,889 | ||||||||||||
Interest expense and other | 20,321 | 16,668 | 40,031 | 33,900 | ||||||||||||
Income tax expense | 23,134 | 46,088 | 65,727 | 93,466 | ||||||||||||
Income from continuing operations | $ | 49,516 | $ | 80,191 | $ | 128,559 | $ | 156,523 | ||||||||
Earnings per share - basic: | ||||||||||||||||
Net income | $ | 0.96 | $ | 1.61 | $ | 2.51 | $ | 3.16 | ||||||||
Weighted average common shares outstanding - basic | 51,807 | 49,657 | 51,311 | 49,536 | ||||||||||||
Earnings per share - diluted: | ||||||||||||||||
Net income | $ | 0.94 | $ | 1.53 | $ | 2.43 | $ | 2.99 | ||||||||
Weighted average common shares outstanding - diluted | 52,820 | 52,288 | 52,813 | 52,280 | ||||||||||||
Dividends declared and paid per common share | $ | 0.04 | $ | 0.04 | $ | 0.08 | $ | 0.08 |
BALANCE SHEET | Unaudited | Audited | ||||||
September 30, | March 31, | |||||||
2013 | 2013 | |||||||
Assets | ||||||||
Cash and cash equivalents | $ | 22,443 | $ | 32,037 | ||||
Accounts receivable, net | 434,860 | 433,984 | ||||||
Inventory, net of unliquidated progress payments of $140,623 and $124,128 | 1,095,502 | 987,899 | ||||||
Rotable assets | 38,172 | 34,853 | ||||||
Deferred income taxes | 51,140 | 99,546 | ||||||
Prepaid and other current assets | 20,072 | 23,593 | ||||||
Assets held for sale | — | 14,747 | ||||||
Current assets | 1,662,189 | 1,626,659 | ||||||
Property and equipment, net | 898,631 | 815,084 | ||||||
Goodwill | 1,740,155 | 1,717,400 | ||||||
Intangible assets, net | 943,032 | 958,359 | ||||||
Other, net | 68,267 | 66,792 | ||||||
Total assets | $ | 5,312,274 | $ | 5,184,294 | ||||
Liabilities & Stockholders' Equity | ||||||||
Current portion of long-term debt | $ | 48,894 | $ | 133,930 | ||||
Accounts payable | 290,188 | 327,426 | ||||||
Accrued expenses | 264,546 | 276,668 | ||||||
Liabilities related to assets held for sale | — | 2,621 | ||||||
603,628 | 740,645 | |||||||
Long-term debt, less current portion | 1,399,398 | 1,195,933 | ||||||
Accrued pension and post-retirement benefits, noncurrent | 597,709 | 671,175 | ||||||
Deferred income taxes, noncurrent | 339,597 | 330,128 | ||||||
Other noncurrent liabilities | 184,827 | 201,255 | ||||||
Stockholders' Equity: | ||||||||
Common stock, $.001 par value, 100,000,000 shares authorized, 52,013,057 and 50,123,035 shares issued | 52 | 50 | ||||||
Capital in excess of par value | 861,274 | 848,372 | ||||||
Accumulated other comprehensive income | (56,329 | ) | (60,972 | ) | ||||
Retained earnings | 1,382,118 | 1,257,708 | ||||||
Total stockholders' equity | 2,187,115 | 2,045,158 | ||||||
Total liabilities and stockholders' equity | $ | 5,312,274 | $ | 5,184,294 |
SEGMENT DATA | Three Months Ended | Six Months Ended | ||||||||||||||
September 30, | September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Net Sales: | ||||||||||||||||
Aerostructures | $ | 690,748 | $ | 713,978 | $ | 1,342,636 | $ | 1,383,831 | ||||||||
Aerospace Systems | 205,483 | 150,139 | 425,009 | 290,651 | ||||||||||||
Aftermarket Services | 72,971 | 76,061 | 147,324 | 156,038 | ||||||||||||
Elimination of inter-segment sales | (1,857 | ) | (1,997 | ) | (3,941 | ) | (4,651 | ) | ||||||||
$ | 967,345 | $ | 938,181 | $ | 1,911,028 | $ | 1,825,869 | |||||||||
Operating Income (Loss): | ||||||||||||||||
Aerostructures | $ | 64,425 | $ | 121,385 | $ | 164,812 | $ | 241,523 | ||||||||
Aerospace Systems | 31,740 | 25,712 | 74,383 | 49,177 | ||||||||||||
Aftermarket Services | 10,102 | 10,767 | 21,381 | 22,574 | ||||||||||||
Corporate | (13,296 | ) | (14,917 | ) | (26,259 | ) | (29,385 | ) | ||||||||
$ | 92,971 | $ | 142,947 | $ | 234,317 | $ | 283,889 | |||||||||
Depreciation and Amortization: | ||||||||||||||||
Aerostructures | $ | 26,483 | $ | 24,049 | $ | 52,796 | $ | 47,953 | ||||||||
Aerospace Systems | 8,549 | 4,489 | 17,088 | 8,963 | ||||||||||||
Aftermarket Services | 1,864 | 2,288 | 3,741 | 4,614 | ||||||||||||
Corporate | 1,348 | 1,172 | 2,553 | 2,283 | ||||||||||||
$ | 38,244 | $ | 31,998 | $ | 76,178 | $ | 63,813 | |||||||||
Amortization of Acquired Contract Liabilities: | ||||||||||||||||
Aerostructures | $ | (5,614 | ) | $ | (6,563 | ) | $ | (11,755 | ) | $ | (13,555 | ) | ||||
Aerospace Systems | (3,351 | ) | — | (8,360 | ) | — | ||||||||||
$ | (8,965 | ) | $ | (6,563 | ) | $ | (20,115 | ) | $ | (13,555 | ) | |||||
Capital Expenditures: | ||||||||||||||||
Aerostructures | $ | 52,598 | $ | 16,413 | $ | 98,543 | $ | 46,425 | ||||||||
Aerospace Systems | 5,843 | 3,810 | 10,275 | 6,599 | ||||||||||||
Aftermarket Services | 3,915 | 3,378 | 8,067 | 7,475 | ||||||||||||
Corporate | 680 | 487 | 2,380 | 694 | ||||||||||||
$ | 63,036 | $ | 24,088 | $ | 119,265 | $ | 61,193 |
• | Curtailments and early retirement incentives may be useful to investors to consider because it represents the current period impact of the change in defined benefit obligation due to the reduction in future service costs. We do not believe these charges (gains) necessarily reflect the current and ongoing cash earnings related to our 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. |
• | 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. |
Three Months Ended | Six Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA): | ||||||||||||||||
Net income | $ | 49,516 | $ | 80,191 | $ | 128,559 | $ | 156,523 | ||||||||
Add-back: | ||||||||||||||||
Income tax expense | 23,134 | 46,088 | 65,727 | 93,466 | ||||||||||||
Interest expense and other | 20,321 | 16,668 | 40,031 | 33,900 | ||||||||||||
Curtailments and early retirement incentives | — | 1,957 | — | 3,107 | ||||||||||||
Amortization of acquired contract liabilities | (8,965 | ) | (6,563 | ) | (20,115 | ) | (13,555 | ) | ||||||||
Depreciation and amortization | 38,244 | 31,998 | 76,178 | 63,813 | ||||||||||||
Adjusted Earnings before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA") | $ | 122,250 | $ | 170,339 | $ | 290,380 | $ | 337,254 | ||||||||
Net sales | $ | 967,345 | $ | 938,181 | $ | 1,911,028 | $ | 1,825,869 | ||||||||
Adjusted EBITDA Margin | 12.6 | % | 18.2 | % | 15.2 | % | 18.5 | % |
Three Months Ended September 30, 2013 | |||||||||||||||||||||
Segment Data | |||||||||||||||||||||
Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA): | Total | Aerostructures | Aerospace Systems | Aftermarket Services | Corporate/Eliminations | ||||||||||||||||
Net Income | $ | 49,516 | |||||||||||||||||||
Add-back: | |||||||||||||||||||||
Income tax expense | 23,134 | ||||||||||||||||||||
Interest expense and other | 20,321 | ||||||||||||||||||||
Operating income (loss) | $ | 92,971 | $ | 64,425 | $ | 31,740 | $ | 10,102 | $ | (13,296 | ) | ||||||||||
Amortization of acquired contract liabilities | (8,965 | ) | (5,614 | ) | (3,351 | ) | — | — | |||||||||||||
Depreciation and amortization | 38,244 | 26,483 | 8,549 | 1,864 | 1,348 | ||||||||||||||||
Adjusted Earnings (Losses) before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA") | $ | 122,250 | $ | 85,294 | $ | 36,938 | $ | 11,966 | $ | (11,948 | ) | ||||||||||
Net sales | $ | 967,345 | $ | 690,748 | $ | 205,483 | $ | 72,971 | $ | (1,857 | ) | ||||||||||
Adjusted EBITDA Margin | 12.6% | 12.3% | 18.0% | 16.4% | n/a |
Six Months Ended September 30, 2013 | |||||||||||||||||||||
Segment Data | |||||||||||||||||||||
Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA): | Total | Aerostructures | Aerospace Systems | Aftermarket Services | Corporate/Eliminations | ||||||||||||||||
Net Income | $ | 128,559 | |||||||||||||||||||
Add-back: | |||||||||||||||||||||
Income tax expense | 65,727 | ||||||||||||||||||||
Interest expense and other | 40,031 | ||||||||||||||||||||
Operating income (loss) | $ | 234,317 | $ | 164,812 | $ | 74,383 | $ | 21,381 | $ | (26,259 | ) | ||||||||||
Amortization of acquired contract liabilities | (20,115 | ) | (11,755 | ) | (8,360 | ) | — | — | |||||||||||||
Depreciation and amortization | 76,178 | 52,796 | 17,088 | 3,741 | 2,553 | ||||||||||||||||
Adjusted Earnings (Losses) before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA") | $ | 290,380 | $ | 205,853 | $ | 83,111 | $ | 25,122 | $ | (23,706 | ) | ||||||||||
Net sales | $ | 1,911,028 | $ | 1,342,636 | $ | 425,009 | $ | 147,324 | $ | (3,941 | ) | ||||||||||
Adjusted EBITDA Margin | 15.2% | 15.3% | 19.6% | 17.1% | n/a |
Three Months Ended September 30, 2012 | |||||||||||||||||||||
Segment Data | |||||||||||||||||||||
Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA): | Total | Aerostructures | Aerospace Systems | Aftermarket Services | Corporate / Eliminations | ||||||||||||||||
Net Income | $ | 80,191 | |||||||||||||||||||
Add-back: | |||||||||||||||||||||
Income tax expense | 46,088 | ||||||||||||||||||||
Interest expense and other | 16,668 | ||||||||||||||||||||
Operating income (loss) | $ | 142,947 | $ | 121,385 | $ | 25,712 | $ | 10,767 | $ | (14,917 | ) | ||||||||||
Curtailments and early retirement incentives | 1,957 | — | — | — | 1,957 | ||||||||||||||||
Amortization of acquired contract liabilities | (6,563 | ) | (6,563 | ) | — | — | — | ||||||||||||||
Depreciation and amortization | 31,998 | 24,049 | 4,489 | 2,288 | 1,172 | ||||||||||||||||
Adjusted Earnings (Losses) before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA") | $ | 170,339 | $ | 138,871 | $ | 30,201 | $ | 13,055 | $ | (11,788 | ) | ||||||||||
Net sales | $ | 938,181 | $ | 713,978 | $ | 150,139 | $ | 76,061 | $ | (1,997 | ) | ||||||||||
Adjusted EBITDA Margin | 18.2% | 19.5% | 20.1% | 17.2% | n/a |
Six Months Ended September 30, 2012 | |||||||||||||||||||||
Segment Data | |||||||||||||||||||||
Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA): | Total | Aerostructures | Aerospace Systems | Aftermarket Services | Corporate / Eliminations | ||||||||||||||||
Net Income | $ | 156,523 | |||||||||||||||||||
Add-back: | |||||||||||||||||||||
Income tax expense | 93,466 | ||||||||||||||||||||
Interest expense and other | 33,900 | ||||||||||||||||||||
Operating income (loss) | $ | 283,889 | $ | 241,523 | $ | 49,177 | $ | 22,574 | $ | (29,385 | ) | ||||||||||
Curtailments and early retirement incentives | 3,107 | — | — | — | 3,107 | ||||||||||||||||
Amortization of acquired contract liabilities | (13,555 | ) | (13,555 | ) | — | — | — | ||||||||||||||
Depreciation and amortization | 63,813 | 47,953 | 8,963 | 4,614 | 2,283 | ||||||||||||||||
Adjusted Earnings (Losses) before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA") | $ | 337,254 | $ | 275,921 | $ | 58,140 | $ | 27,188 | $ | (23,995 | ) | ||||||||||
Net sales | $ | 1,825,869 | $ | 1,383,831 | $ | 290,651 | $ | 156,038 | $ | (4,651 | ) | ||||||||||
Adjusted EBITDA Margin | 18.5% | 19.9% | 20.0% | 17.4% | n/a |
Three Months Ended | ||||||||||||||
September 30, 2013 | Location on | |||||||||||||
Pre-Tax | After-Tax | Diluted EPS | Financial Statements | |||||||||||
Income from Continuing Operations - GAAP | $ | 72,650 | $ | 49,516 | $ | 0.94 | ||||||||
Non-Recurring Costs: | ||||||||||||||
Relocation Costs (including interest) | 1,450 | 934 | 0.02 | Aerostructures (Primarily) | ||||||||||
Jefferson Street Move: | ||||||||||||||
Accelerated Depreciation | 2,191 | 1,411 | 0.03 | Aerostructures (EAC)** | ||||||||||
Disruption | 2,138 | 1,377 | 0.03 | Aerostructures (EAC)** | ||||||||||
Income from continuing operations - non-GAAP | $ | 78,429 | $ | 53,238 | $ | 1.01 | * | |||||||
* Difference due to rounding. | ||||||||||||||
** EAC - estimated costs at completion with respect to contracts within the scope of Accounting Standards Codification 605-35, "Revenue-Construction-Type and Production-Type Contracts" |
Six Months Ended | ||||||||||||||
September 30, 2013 | Location on | |||||||||||||
Pre-Tax | After-Tax | Diluted EPS | Financial Statements | |||||||||||
Income from Continuing Operations - GAAP | $ | 194,286 | $ | 128,559 | $ | 2.43 | ||||||||
Non-Recurring Costs: | ||||||||||||||
Relocation Costs (including interest) | 2,771 | 1,785 | 0.03 | Aerostructures (Primarily) | ||||||||||
Jefferson Street Move: | ||||||||||||||
Accelerated Depreciation | 3,689 | 2,376 | 0.04 | Aerostructures (EAC)** | ||||||||||
Disruption | 2,949 | 1,899 | 0.04 | Aerostructures (EAC)** | ||||||||||
Income from continuing operations - non-GAAP | $ | 203,695 | $ | 134,619 | $ | 2.55 | * | |||||||
* Difference due to rounding. | ||||||||||||||
** EAC - estimated costs at completion with respect to contracts within the scope of Accounting Standards Codification 605-35, "Revenue-Construction-Type and Production-Type Contracts" |
Three Months Ended | ||||||||||||||
September 30, 2012 | Location on | |||||||||||||
Pre-Tax | After-Tax | Diluted EPS | Financial Statements | |||||||||||
Income from Continuing Operations - GAAP | $ | 126,279 | $ | 80,191 | $ | 1.53 | ||||||||
Non-Recurring Costs: | ||||||||||||||
Curtailments | 1,957 | 1,243 | 0.02 | Corporate | ||||||||||
Integration | 1,432 | 909 | 0.02 | Aerostructures (Primarily) | ||||||||||
Income from continuing operations - non-GAAP | $ | 129,668 | $ | 82,343 | $ | 1.48 | ||||||||
Six Months Ended | ||||||||||||||
September 30, 2012 | Location on | |||||||||||||
Pre-Tax | After-Tax | Diluted EPS | Financial Statements | |||||||||||
Income from Continuing Operations - GAAP | $ | 249,989 | $ | 156,523 | $ | 2.99 | ||||||||
Non-Recurring Costs: | ||||||||||||||
Early retirement incentives | 3,107 | 1,973 | 0.04 | Corporate | ||||||||||
Integration | 1,977 | 1,255 | 0.02 | Aerostructures (Primarily) | ||||||||||
Income from continuing operations - non-GAAP | $ | 255,073 | $ | 159,751 | $ | 3.06 | * | |||||||
* Difference due to rounding. |
Six Months Ended | ||||||||
September 30, | ||||||||
2013 | 2012 | |||||||
Cash provided by operations, before pension contributions | $ | 89,422 | $ | 188,943 | ||||
Pension contributions | 45,800 | 56,028 | ||||||
Cash provided by operations | 43,622 | 132,915 | ||||||
Less: | ||||||||
Capital expenditures | 119,265 | 61,193 | ||||||
Dividends | 4,149 | 3,997 | ||||||
Free cash flow available for debt reduction | $ | (79,792 | ) | $ | 67,725 |
September 30, | March 31, | |||||||
2013 | 2013 | |||||||
Calculation of Net Debt | ||||||||
Current portion | $ | 48,894 | $ | 133,930 | ||||
Long-term debt | 1,399,398 | 1,195,933 | ||||||
Total debt | 1,448,292 | 1,329,863 | ||||||
Less: Cash | 22,443 | 32,037 | ||||||
Net debt | $ | 1,425,849 | $ | 1,297,826 | ||||
Calculation of Capital | ||||||||
Net debt | $ | 1,425,849 | $ | 1,297,826 | ||||
Stockholders' equity | 2,187,115 | 2,045,158 | ||||||
Total capital | $ | 3,612,964 | $ | 3,342,984 | ||||
Percent of net debt to capital | 39.5 | % | 38.8 | % |