EX-99.1 2 a05-9068_2ex99d1.htm EX-99.1

Exhibit 99.1

 

 

 

NEWS RELEASE

 

 

Contact:

 

John Bartholdson

 

Senior Vice President,

 

Chief Financial Officer

 

Phone (610) 251-1000

 

jbartholdson@triumphgroup.com

 

 

TRIUMPH GROUP REPORTS FOURTH

QUARTER AND YEAR END FISCAL 2005 RESULTS

 

•                  Fiscal year 2005 net sales increased 13% to $688.5 million

 

•                  Cash flow from operations increased 41% to $64.3 million

 

•                  Year-end backlog increased 17% to $598.0 million

 

•                  Completed divestiture of non-core assets, generating proceeds of $26.8 million

 

Wayne, PA – May 6, 2005 – Triumph Group, Inc. (NYSE: TGI) reported today that net sales from continuing operations for the fourth quarter of fiscal 2005 totaled $181.9 million, a three percent increase from last year’s fourth quarter net sales of $175.8 million.  For the fiscal year 2005, net sales from continuing operations increased to $688.5 million compared to $608.3 million for fiscal 2004, representing a thirteen percent year over year increase.  Cash flow from operating activities for the 2005 fiscal year was $64.3 million, compared to $45.6 million realized in fiscal 2004, a forty-one percent increase.

 

“Overall, the fourth quarter operating results from our core businesses were solid,” stated Richard C. Ill, Triumph’s President and Chief Executive Officer.  “During fiscal 2005, revenue continued to grow across our aerospace businesses.  In addition, we executed on our plan to focus on our core aviation companies by completing the divestiture of our Metals Operations and the exit from the Industrial Gas Turbine business.  A combination of cash flow from operating activities and proceeds from divestitures reduced debt by $68 million.  While the divestiture and restructuring activities had an adverse impact on operating results in the short-term, we are confident that our focused business model and strong balance sheet will position us for long-term growth.”

 

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With significant charges and costs associated with the restructuring steps taken to exit the Industrial Gas Turbine (“IGT”) business, legal expenses related to the previously announced trade secret litigation and first year, non-recurring Sarbanes-Oxley expenses, the company reported income from continuing operations for the fourth quarter of fiscal 2005 of $4.9 million, or $0.30 per diluted common share, compared to $1.2 million, or $0.08 per diluted common share, for the same period last year.  For the fiscal year 2005, the company reported income from continuing operations of $15.8 million, or $0.99 per diluted common share, as compared to $19.4 million, or $1.22 per diluted common share, for fiscal 2004.  Net income for fiscal 2005 was $11.4 million, or $0.72 per diluted common share, versus $18.2 million, or $1.14 per diluted common share, for the prior year. The following table quantifies the operating losses of the Other segment and significant charges and costs incurred in the fourth quarter and for the fiscal year 2005.

 

 

 

March 31, 2005

 

 

 

Quarter Ended

 

Year Ended

 

 

 

($ in thousands, except per share data)

 

Other segment results, primarily IGT related

 

 

 

 

 

Restructuring and impairment costs

 

$

571

 

$

3,069

 

Inventory adjustments reported in Cost of Goods Sold

 

1,751

 

2,035

 

Operating losses, less restructuring, impairment & inventory charges

 

1,878

 

9,885

 

Other segment operating losses

 

4,200

 

14,989

 

 

 

 

 

 

 

Trade secret litigation expenses

 

1,212

 

2,820

 

 

 

 

 

 

 

First year, non-recurring Sarbanes-Oxley expenses

 

705

 

1,800

 

 

 

 

 

 

 

Total, pre-tax

 

$

6,117

 

$

19,609

 

 

 

 

 

 

 

Total, after-tax

 

$

3,975

 

$

12,746

 

 

 

 

 

 

 

Per share impact of significant charges and costs

 

$

0.25

 

$

0.80

 

 

In the fourth quarter of fiscal 2005, the Aerospace Systems segment’s net sales increased six percent to $132.7 million versus $125.0 million for the prior year period.  For the full year, the segment’s net sales increased eighteen percent to $495.4 million from $418.6 million for fiscal 2004.  Operating income was $14.6 million in the fourth quarter and $54.0 million for the full fiscal year 2005, a three percent increase.  The three percent increase in operating income was after $2.8 million of legal expenses associated with the trade secret litigation.

 

The Aftermarket Services segment reported net sales for the fourth quarter of $45.9 million, an increase of seven percent over fourth quarter fiscal 2004 net sales of $42.9 million.  Net sales for the fiscal year increased seventeen percent to $173.0 million from $147.5 million for fiscal 2004.  Operating income for the fourth quarter was $1.5 million

 

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and $7.6 million for the full fiscal year 2005.  Core growth in repair product and overhaul service companies was offset by $3.9 million of operating losses incurred by the aerospace related castings operation during the year.

 

In the Other segment, which primarily consisted of activities related to the IGT markets, net sales decreased to $26.6 million for the year as the company completed its divestiture of its IGT assets.  The segment incurred an operating loss of $4.2 million in the fourth quarter of fiscal 2005 and an operating loss of $15.0 million for the full year.

 

Commenting on the outlook for fiscal 2006, Mr. Ill said, “As we enter fiscal year 2006, we are better positioned for opportunities created by the continuing recovery of our aviation markets and are optimistic about our future growth.  For fiscal year 2006, we continue to project sales in the range of $700 to $750 million and earnings per share for the year of $1.75 to $2.00, with quarterly results improving sequentially.”

 

As previously announced, Triumph will hold a conference call today at 10:00 a.m. (EDT) to discuss the fiscal 2005 fourth quarter and year-end 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 May 6th until May 13th by calling (888) 266-2081 (Domestic) or (703) 925-2533 (International), passcode # 692774.

 

Triumph Group, Inc., headquartered in Wayne, Pennsylvania, designs, engineers, manufactures, repairs and overhauls aircraft components and accessories.  The company serves a broad, worldwide spectrum of the aviation industry, including original equipment manufacturers of aircraft and aircraft components as well as commercial, military and air cargo customers.

 

More information about Triumph can be found on the Internet 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, but not limited to, statements relating to the company’s positioning for growth, expectations of continued recovery in the aviation markets, and projections of sales, earnings per share and sequential earnings per share growth. 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 year ended March 31, 2004.

 

 

FINANCIAL DATA (UNAUDITED) ON FOLLOWING 4 PAGES

 


 

FINANCIAL DATA (UNAUDITED)

 

TRIUMPH GROUP, INC. AND SUBSIDIARIES

(in thousands, except per share data)

 

CONDENSED STATEMENTS OF INCOME

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

 

March 31,

 

March 31,

 

 

 

2005

 

2004

 

2005

 

2004

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

$

181,874

 

$

175,755

 

$

688,485

 

$

608,315

 

 

 

 

 

 

 

 

 

 

 

Operating Income

 

8,289

 

2,967

 

33,430

 

36,613

 

 

 

 

 

 

 

 

 

 

 

Interest Expense and Other

 

3,369

 

3,269

 

13,025

 

12,212

 

Income Tax Expense (Benefit)

 

50

 

(1,522

)

4,596

 

4,991

 

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations

 

4,870

 

1,220

 

15,809

 

19,410

 

Income (Loss) from Discontinued Operations

 

168

 

(23

)

(4,381

)

(1,188

)

 

 

 

 

 

 

 

 

 

 

Net Income

 

$

5,038

 

$

1,197

 

$

11,428

 

$

18,222

 

 

 

 

 

 

 

 

 

 

 

Earnings Per Share - Basic:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations

 

$

0.31

 

$

0.08

 

$

1.00

 

$

1.23

 

Income (Loss) from Discontinued Operations

 

$

0.01

 

$

(0.00

)

$

(0.28

)

$

(0.07

)

Net Income

 

$

0.32

 

$

0.08

 

$

0.72

 

$

1.15

*

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding - Basic

 

15,898

 

15,858

 

15,877

 

15,842

 

 

 

 

 

 

 

 

 

 

 

Earnings Per Share - Diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations

 

$

0.30

 

$

0.08

 

$

0.99

 

$

1.22

 

Income (Loss) from Discontinued Operations

 

$

0.01

 

$

(0.00

)

$

(0.27

)

$

(0.07

)

Net Income

 

$

0.31

 

$

0.08

 

$

0.72

 

$

1.14

*

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding - Diluted

 

16,016

 

15,955

 

15,971

 

15,918

 

 

*  Difference due to rounding.

 

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FINANCIAL DATA (UNAUDITED)

 

TRIUMPH GROUP, INC. AND SUBSIDIARIES

(dollars in thousands, except per share data)

 

BALANCE SHEET

 

 

 

March 31,

 

March 31,

 

 

 

2005

 

2004

 

Assets

 

 

 

 

 

Cash

 

$

4,844

 

$

6,766

 

Accounts Receivable, net

 

127,942

 

122,273

 

Inventory

 

217,234

 

203,593

 

Assets held for sale

 

0

 

33,579

 

Income Tax Refund Receivable

 

0

 

8,829

 

Deferred Income Taxes

 

5,422

 

0

 

Prepaid Expenses and Other

 

3,887

 

3,801

 

Current Assets

 

359,329

 

378,841

 

 

 

 

 

 

 

Property and Equipment, net

 

234,123

 

246,501

 

Goodwill

 

273,476

 

267,621

 

Intangible Assets, net

 

56,227

 

27,514

 

Other

 

14,560

 

14,078

 

 

 

 

 

 

 

Total Assets

 

$

937,715

 

$

934,555

 

 

 

 

 

 

 

Liabilities & Stockholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

Accounts Payable

 

$

65,211

 

$

55,259

 

Accrued Expenses

 

74,917

 

49,771

 

Liabilities related to assets held for sale

 

0

 

8,809

 

Income Taxes Payable

 

2,922

 

1,533

 

Deferred Income Taxes

 

0

 

1,444

 

Current Portion of Long-Term Debt

 

1,740

 

4,884

 

Current Liabilities

 

144,790

 

121,700

 

 

 

 

 

 

 

Long-Term Debt, less current portion

 

156,042

 

220,963

 

Deferred Income Taxes and Other

 

110,220

 

77,578

 

 

 

 

 

 

 

Stockholders’ Equity:

 

 

 

 

 

Common Stock, $.001 par value, 50,000,000 shares authorized, 16,027,324 shares issued

 

16

 

16

 

Capital in excess of par value

 

259,448

 

259,322

 

Treasury Stock, at cost, 123,160 and 167,260 shares

 

(3,057

)

(4,152

)

Accumulated other comprehensive income

 

306

 

606

 

Retained earnings

 

269,950

 

258,522

 

Total Stockholders’ Equity

 

526,663

 

514,314

 

 

 

 

 

 

 

Total Liabilities and Stockholders’ Equity

 

$

937,715

 

$

934,555

 

 

-More-

 


 

FINANCIAL DATA (UNAUDITED)

 

TRIUMPH GROUP, INC. AND SUBSIDIARIES

(dollars in thousands)

 

SEGMENT DATA

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

 

March 31,

 

March 31,

 

 

 

2005

 

2004

 

2005

 

2004

 

 

 

 

 

 

 

 

 

 

 

Net Sales:

 

 

 

 

 

 

 

 

 

Aerospace Systems

 

$

132,734

 

$

124,967

 

$

495,425

 

$

418,587

 

Aftermarket Services

 

45,904

 

42,857

 

172,958

 

147,531

 

Other

 

4,969

 

9,056

 

26,560

 

46,388

 

Elimination of inter-segment sales

 

(1,733

)

(1,125

)

(6,458

)

(4,191

)

 

 

$

181,874

 

$

175,755

 

$

688,485

 

$

608,315

 

 

 

 

 

 

 

 

 

 

 

Operating Income (Loss):

 

 

 

 

 

 

 

 

 

Aerospace Systems

 

$

14,604

 

$

17,464

 

$

54,046

 

$

52,602

 

Aftermarket Services

 

1,494

 

1,453

 

7,627

 

12,735

 

Other

 

(4,200

)

(13,715

)

(14,989

)

(19,099

)

Corporate

 

(3,609

)

(2,235

)

(13,254

)

(9,625

)

 

 

$

8,289

 

$

2,967

 

$

33,430

 

$

36,613

 

 

 

 

 

 

 

 

 

 

 

Depreciation and Amortization:

 

 

 

 

 

 

 

 

 

Aerospace Systems

 

$

5,452

 

$

5,131

 

$

19,681

 

$

16,433

 

Aftermarket Services

 

2,132

 

1,768

 

8,426

 

7,433

 

Other

 

297

 

1,106

 

2,276

 

4,249

 

Corporate

 

37

 

18

 

145

 

122

 

 

 

$

7,918

 

$

8,023

 

$

30,528

 

$

28,237

 

 

 

 

 

 

 

 

 

 

 

Capital Expenditures:

 

 

 

 

 

 

 

 

 

Aerospace Systems

 

$

2,103

 

$

2,836

 

$

12,060

 

$

16,183

 

Aftermarket Services

 

2,632

 

1,943

 

6,182

 

5,741

 

Other

 

326

 

481

 

462

 

3,206

 

Corporate

 

6

 

12

 

62

 

316

 

 

 

$

5,067

 

$

5,272

 

$

18,766

 

$

25,446

 

 

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FINANCIAL DATA (UNAUDITED)

 

TRIUMPH GROUP, INC. AND SUBSIDIARIES

(dollars in thousands)

 

Non-GAAP Financial Measure Disclosures

 

Earnings before Interest, Taxes, Depreciation and Amortization (“EBITDA”) for the three months ended March 31, 2005 was $16.2 million with a margin of 8.9%.  EBITDA for the three months ended March 31, 2004 was $11.0 million with a margin of 6.3%.  EBITDA for the twelve months ended March 31, 2005 was $64.0 million with a margin of 9.3%. EBITDA for the twelve months ended March 31, 2004 was $64.9 million with a margin of 10.7%.

 

Management believes that EBITDA provides investors with an important perspective on the current underlying performance of the business by identifying non-cash expenses, interest and taxes included in income from continuing operations.

 

The following definition is provided for the non-GAAP financial measure identified above, together with a reconciliation of such non-GAAP financial measure to the most directly comparable financial measure calculated and presented in accordance with GAAP.

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

 

March 31,

 

March 31,

 

 

 

2005

 

2004

 

2005

 

2004

 

Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations

 

$

4,870

 

$

1,220

 

$

15,809

 

$

19,410

 

 

 

 

 

 

 

 

 

 

 

Add-back:

 

 

 

 

 

 

 

 

 

Income Tax Expense (Benefit)

 

50

 

(1,522

)

4,596

 

4,991

 

Interest Expense and Other

 

3,369

 

3,269

 

13,025

 

12,212

 

Depreciation and Amortization

 

7,918

 

8,023

 

30,528

 

28,237

 

 

 

 

 

 

 

 

 

 

 

Earnings before Interest, Taxes, Depreciation and Amortization (“EBITDA”)

 

$

16,207

 

$

10,990

 

$

63,958

 

$

64,850

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

$

181,874

 

$

175,755

 

$

688,485

 

$

608,315

 

 

 

 

 

 

 

 

 

 

 

EBITDA Margin

 

8.9

%

6.3

%

9.3

%

10.7

%

 

######