EX-99.1 2 a06-3880_1ex99d1.htm EXHIBIT 99.1

Exhibit 99.1

 

Triumph Group, Inc.

 

NEWS RELEASE

 

 

 

Contact:

 

 

John Bartholdson

 

 

Senior Vice President,

 

 

Chief Financial Officer

 

 

Phone (610) 251-1000

 

 

jbartholdson@triumphgroup.com

 

TRIUMPH GROUP REPORTS

THIRD QUARTER FISCAL 2006 RESULTS

 

•                  Net sales for third quarter fiscal 2006 increased 9% to $187.2 million

 

•                  Operating income in the third quarter fiscal 2006 increased 50% to $13.2 million

 

•                  Income from continuing operations for the third quarter fiscal 2006 increased 137% to $9.3 million

 

•                  Backlog increased 48% over prior year to $838.8 million

 

Wayne, PA – January 27, 2006 – Triumph Group, Inc. (NYSE: TGI) today reported that net sales from continuing operations for the third quarter of the fiscal year ending March 31, 2006 totaled $187.2 million, a nine percent increase from last year’s third quarter net sales from continuing operations of $171.3 million.  Income from continuing operations for the third quarter of fiscal 2006 increased 137 percent to $9.3 million, or $0.58 per diluted common share, versus $3.9 million, or $0.25 per diluted common share for the third quarter of the prior year.  During the quarter, the company generated $19.2 million of cash flow from operations.  Also, during the quarter, the company adjusted its effective income tax rate at which reversals of temporary differences will be taxed.  The adjustment resulted in a reduction of income tax expense in the quarter of $2.0 million.

 

Net sales from continuing operations for the first nine months of fiscal 2006 were $548.6 million, an eight percent increase over net sales of $506.6 million last year.  Income from continuing operations for the first nine months of fiscal 2006 increased 115 percent to $23.6 million, or $1.47 per diluted common share, compared to income from continuing operations of $10.9 million, or $0.69 per diluted common share in the prior year period.  During the nine months ended December 31, 2005, the company generated $26.3 million of cash flow from operations.

 

The Aerospace Systems segment reported net sales for the quarter of $141.6 million, compared to $121.2 million in the prior year period, an increase of seventeen percent.  Operating income for the third quarter of fiscal 2006 was $17.5 million, compared to $13.5 million for the prior year period,

 

- More -

 


 

a twenty-nine percent increase.  The Aerospace Systems segment increased sales and operating income despite the delay in full production at Boeing Commercial Aircraft division until December.

 

The Aftermarket Services segment reported net sales for the quarter of $46.1 million, compared to $44.9 million in the prior year period, a three percent increase.  Operating income for the third quarter of fiscal 2006 was a loss of $0.1 million, compared to earnings of $2.6 million for the prior year period.  Solid performance by the core maintenance, repair and overhaul operations was offset by costs associated with new aerospace programs in the castings and manufacturing operations of the Aftermarket Services segment.

 

Richard C. Ill, Triumph’s President and Chief Executive Officer, said, “We are pleased to report higher sales and net earnings for the third quarter and the first nine months of fiscal 2006.  During the quarter, we delivered organic sales growth, increased backlog, and continued strength in cash flow performance.  That said, results in our Aftermarket Services segment continue to be negatively impacted as we focus on strategically altering the product mix of the castings and manufacturing operations in this segment.  However, we remain confident with the performance of our businesses and satisfied that the actions taken will improve profitability and position us for continued future growth.”

 

Commenting on the outlook for the year, Mr. Ill stated, “Based upon the strength of our operations and current market conditions, we continue to expect that fiscal 2006 earnings per share will be in the range of $1.75 to $2.00.”

 

As previously announced, Triumph will hold a conference call today at 8:30 a.m. (EST) to discuss the fiscal 2006 third quarter results.  The conference call will be available live and archived on the company’s website at http://www.triumphgroup.com  An audio replay will be available from January 27th until February 3rd by calling (888) 266-2081 (Domestic) or (703) 925-2533 (International), passcode #839492.

 

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 commercial and regional airlines, air cargo carriers, as well as original equipment manufacturers of commercial, regional, business and military aircraft and aircraft components.

 

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 expectations of future performance, profitability, growth and earnings.  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, 2005.

 

FINANCIAL DATA (UNAUDITED) ON FOLLOWING 6 PAGES

 

2


 

FINANCIAL DATA (UNAUDITED)

 

TRIUMPH GROUP, INC. AND SUBSIDIARIES

(in thousands, except per share data)

 

CONDENSED STATEMENTS OF INCOME

 

 

 

Three Months Ended
December 31,

 

Nine Months Ended
December 31,

 

 

 

2005

 

2004

 

2005

 

2004

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

$

187,221

 

$

171,278

 

$

548,551

 

$

506,611

 

 

 

 

 

 

 

 

 

 

 

Operating Income

 

13,203

 

8,814

 

40,150

 

25,141

 

 

 

 

 

 

 

 

 

 

 

Interest Expense and Other

 

3,086

 

3,189

 

9,445

 

9,656

 

Income Tax Expense

 

770

 

1,686

 

7,145

 

4,546

 

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations

 

9,347

 

3,939

 

23,560

 

10,939

 

Income (Loss) from Discontinued Operations

 

0

 

(6,080

)

0

 

(4,549

)

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

 

$

9,347

 

$

(2,141

)

$

23,560

 

$

6,390

 

 

 

 

 

 

 

 

 

 

 

Earnings Per Share - Basic:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations

 

$

0.59

 

$

0.25

 

$

1.48

 

$

0.69

 

Income (Loss) from Discontinued Operations

 

$

0.00

 

$

(0.38

)

$

0.00

 

$

(0.29

)

Net Income (Loss)

 

$

0.59

 

$

(0.13

)

$

1.48

 

$

0.40

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding - Basic

 

15,912

 

15,881

 

15,909

 

15,870

 

 

 

 

 

 

 

 

 

 

 

Earnings Per Share - Diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations

 

$

0.58

 

$

0.25

 

$

1.47

 

$

0.69

 

Income (Loss) from Discontinued Operations

 

$

0.00

 

$

(0.38

)

$

0.00

 

$

(0.29

)

Net Income (Loss)

 

$

0.58

 

$

(0.13

)

$

1.47

 

$

0.40

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding - Diluted

 

16,052

 

15,994

 

16,038

 

15,957

 

 

3


 

FINANCIAL DATA (UNAUDITED)

 

TRIUMPH GROUP, INC. AND SUBSIDIARIES

(dollars in thousands, except per share data)

 

BALANCE SHEET

 

 

 

December 31,
2005

 

March 31,
2005

 

Assets

 

 

 

 

 

Cash

 

$

4,578

 

$

4,844

 

Accounts Receivable, net

 

121,205

 

127,942

 

Inventory

 

234,924

 

217,234

 

Deferred Income Taxes

 

5,422

 

5,422

 

Prepaid Expenses and Other

 

4,521

 

3,887

 

Current Assets

 

370,650

 

359,329

 

 

 

 

 

 

 

Property and Equipment, net

 

232,328

 

234,123

 

Goodwill

 

273,155

 

273,476

 

Intangible Assets, net

 

50,827

 

56,227

 

Other

 

15,244

 

14,560

 

 

 

 

 

 

 

Total Assets

 

$

942,204

 

$

937,715

 

 

 

 

 

 

 

Liabilities & Stockholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

Accounts Payable

 

$

59,214

 

$

65,211

 

Accrued Expenses

 

63,872

 

75,598

 

Income Taxes Payable

 

2,763

 

2,922

 

Current Portion of Long-Term Debt

 

8,081

 

1,740

 

Current Liabilities

 

133,930

 

145,471

 

 

 

 

 

 

 

Long-Term Debt, less current portion

 

154,320

 

156,042

 

Deferred Income Taxes and Other

 

104,109

 

109,539

 

 

 

 

 

 

 

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

 

259,805

 

259,448

 

Treasury Stock, at cost, 114,177 and 123,160 shares

 

(2,834

)

(3,057

)

Accumulated other comprehensive (loss) income

 

(652

)

306

 

Retained earnings

 

293,510

 

269,950

 

Total Stockholders’ Equity

 

549,845

 

526,663

 

 

 

 

 

 

 

Total Liabilities and Stockholders’ Equity

 

$

942,204

 

$

937,715

 

 

4


 

FINANCIAL DATA (UNAUDITED)

 

TRIUMPH GROUP, INC. AND SUBSIDIARIES

(dollars in thousands)

 

SEGMENT DATA

 

 

 

Three Months Ended
December 31,

 

Nine Months Ended
December 31,

 

 

 

2005

 

2004

 

2005

 

2004

 

 

 

 

 

 

 

 

 

 

 

Net Sales:

 

 

 

 

 

 

 

 

 

Aerospace Systems

 

$

141,606

 

$

121,185

 

$

416,130

 

$

362,691

 

Aftermarket Services

 

46,136

 

44,892

 

134,335

 

127,054

 

Other

 

0

 

6,394

 

0

 

21,591

 

Elimination of inter-segment sales

 

(521

)

(1,193

)

(1,914

)

(4,725

)

 

 

$

187,221

 

$

171,278

 

$

548,551

 

$

506,611

 

 

 

 

 

 

 

 

 

 

 

Operating Income (Loss):

 

 

 

 

 

 

 

 

 

Aerospace Systems

 

$

17,505

 

$

13,533

 

$

50,947

 

$

39,442

 

Aftermarket Services

 

(127

)

2,572

 

0

 

6,133

 

Other

 

0

 

(3,856

)

0

 

(10,789

)

Corporate

 

(4,175

)

(3,435

)

(10,797

)

(9,645

)

 

 

$

13,203

 

$

8,814

 

$

40,150

 

$

25,141

 

 

 

 

 

 

 

 

 

 

 

Depreciation and Amortization:

 

 

 

 

 

 

 

 

 

Aerospace Systems

 

$

5,607

 

$

4,892

 

$

16,621

 

$

14,229

 

Aftermarket Services

 

2,482

 

2,131

 

7,317

 

6,294

 

Other

 

0

 

474

 

0

 

1,979

 

Corporate

 

41

 

33

 

105

 

108

 

 

 

$

8,130

 

$

7,530

 

$

24,043

 

$

22,610

 

 

 

 

 

 

 

 

 

 

 

Capital Expenditures:

 

 

 

 

 

 

 

 

 

Aerospace Systems

 

$

3,337

 

$

2,083

 

$

8,491

 

$

9,957

 

Aftermarket Services

 

3,210

 

1,654

 

8,496

 

3,550

 

Other

 

0

 

112

 

0

 

136

 

Corporate

 

268

 

22

 

301

 

56

 

 

 

$

6,815

 

$

3,871

 

$

17,288

 

$

13,699

 

 

5


 

Non-GAAP Financial Measure Disclosures

 

Earnings before Interest, Taxes, Depreciation and Amortization (“EBITDA”) for the three months ended December 31, 2005 was $21.3 million with a margin of 11.4%.  EBITDA for the three months ended December 31, 2004 was $16.3 million with a margin of 9.5%.  EBITDA for the nine months ended December 31, 2005 was $64.2 million with a margin of 11.7%. EBITDA for the nine months ended December 31, 2004 was $47.8 million with a margin of 9.4%.

 

Management believes that EBITDA provides the reader a good measure of cash generated from the operations of the business before any investment in working capital or fixed assets.

 

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
December 31,

 

Nine Months Ended
December 31,

 

 

 

2005

 

2004

 

2005

 

2004

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations

 

$

9,347

 

$

3,939

 

$

23,560

 

$

10,939

 

 

 

 

 

 

 

 

 

 

 

Add-back:

 

 

 

 

 

 

 

 

 

Income Tax Expense

 

770

 

1,686

 

7,145

 

4,546

 

Interest Expense and Other

 

3,086

 

3,189

 

9,445

 

9,656

 

Depreciation and Amortization

 

8,130

 

7,530

 

24,043

 

22,610

 

 

 

 

 

 

 

 

 

 

 

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

 

$

21,333

 

$

16,344

 

$

64,193

 

$

47,751

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

$

187,221

 

$

171,278

 

$

548,551

 

$

506,611

 

 

 

 

 

 

 

 

 

 

 

EBITDA Margin

 

11.4

%

9.5

%

11.7

%

9.4

%

 

6


 

 

 

Three Months Ended December 31, 2005

 

 

 

Total

 

Segment Data

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations

 

$

9,347

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Add-back:

 

 

 

 

 

 

 

 

 

Income Tax Expense

 

770

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Expense and Other

 

3,086

 

 

 

 

 

 

 

 

 

 

 

 

Aerospace
Systems

 

Aftermarket
Services

 

Corporate /
Eliminations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income (Expense)

 

$

13,203

 

$

17,505

 

$

(127

)

$

(4,175

)

 

 

 

 

 

 

 

 

 

 

Depreciation and Amortization

 

8,130

 

5,607

 

2,482

 

41

 

 

 

 

 

 

 

 

 

 

 

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

 

$

21,333

 

$

23,112

 

$

2,355

 

$

(4,134

)

 

 

 

 

 

 

 

 

 

 

Net Sales

 

$

187,221

 

$

141,606

 

$

46,136

 

$

(521

)

 

 

 

 

 

 

 

 

 

 

EBITDA Margin

 

11.4

%

16.3

%

5.1

%

n/a

 

 

 

 

Nine Months Ended December 31, 2005

 

 

 

Total

 

Segment Data

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations

 

$

23,560

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Add-back:

 

 

 

 

 

 

 

 

 

Income Tax Expense

 

7,145

 

 

 

 

 

 

 

Interest Expense and Other

 

9,445

 

 

 

 

 

 

 

 

 

 

 

 

Aerospace
Systems

 

Aftermarket
Services

 

Corporate /
Eliminations

 

 

 

 

 

 

 

 

 

 

 

Operating Income (Expense)

 

$

40,150

 

$

50,947

 

$

0

 

$

(10,797

)

 

 

 

 

 

 

 

 

 

 

Depreciation and Amortization

 

24,043

 

16,621

 

7,317

 

105

 

 

 

 

 

 

 

 

 

 

 

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

 

$

64,193

 

$

67,568

 

$

7,317

 

$

(10,692

)

 

 

 

 

 

 

 

 

 

 

Net Sales

 

$

548,551

 

$

416,130

 

$

134,335

 

$

(1,914

)

 

 

 

 

 

 

 

 

 

 

EBITDA Margin

 

11.7

%

16.2

%

5.4

%

n/a

 

 

7


 

 

 

Dec-05

 

Mar-05

 

 

 

 

 

 

 

Net Debt to Capital:

 

 

 

 

 

 

 

 

 

 

 

Calculation of Net Debt

 

 

 

 

 

Current Portion

 

$

8,081

 

$

1,740

 

Long term debt

 

154,320

 

156,042

 

Total Debt

 

162,401

 

157,782

 

Less: Cash and cash equivalents

 

4,578

 

4,844

 

Net Debt

 

157,823

 

152,938

 

 

 

 

 

 

 

Calculation of Capital

 

 

 

 

 

Net Debt

 

157,823

 

152,938

 

Stockholders’ equity

 

549,845

 

526,663

 

Total Capital

 

$

707,668

 

$

679,601

 

 

 

 

 

 

 

Percent of net debt to capital

 

22.3

%

22.5

%

 

######

 

8