EX-99.1 2 a06-4034_1ex99d1.htm EX-99

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 FOURTH QUARTER

AND YEAR END FISCAL 2006 RESULTS

 

•                  Net sales for fiscal year 2006 increased 10% to $760.4 million

 

•                  Operating income in fiscal year 2006 increased 68% to $56.1 million

 

•                  Income from continuing operations for fiscal year 2006 increased 118% to $34.5 million

 

•                  Year end backlog reached a new record high of $887.8 million, up 48% over prior year

 

Wayne, PA – May 5, 2006 – Triumph Group, Inc. (NYSE: TGI) today reported that, for the fiscal year 2006, net sales totaled $760.4 million, a ten percent increase from fiscal year 2005 net sales of $688.5 million. Income from continuing operations for fiscal year 2006 increased 118 percent to $34.5 million, or $2.15 per diluted common share, versus $15.8 million, or $0.99 per diluted common share, for fiscal year 2005. During this fiscal year, the company generated $40.4 million of cash flow from operations.

 

Net sales for the fourth quarter ended March 31, 2006 were $211.9 million, a sixteen percent increase from last fiscal year’s fourth quarter net sales of $181.9 million. Income from continuing operations for the fourth quarter of fiscal year 2006 increased 125 percent to $11.0 million, or $0.68 per diluted common share, versus $4.9 million, or $0.30 per diluted common share, for the fourth quarter of the prior fiscal year. The quarterly results also include a tax benefit of $2.2 million associated with changes in tax reserves resulting from completed audits. During the quarter, the company generated $14.1 million of cash flow from operations.

 

The Aerospace Systems segment reported net sales for fiscal year 2006 of $578.3 million, compared to $495.4 million for the prior fiscal year, an increase of seventeen percent. For the fourth quarter of fiscal year 2006, the segment’s net sales increased twenty-two percent to $162.2 million from $132.7 million for the prior fiscal year period. Operating income for fiscal year 2006 was $72.8 million, compared to $54.0 million for the prior fiscal year, an increase of thirty-five

 

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percent. For the quarter, operating income increased forty-nine percent to $21.8 million versus $14.6 million for the prior fiscal year quarter. Operating income for the fiscal year 2006 included $3.6 million of legal expenses associated with the trade secret litigation versus $2.8 million of legal expenses included in the operating income for the fiscal year 2005.

 

The Aftermarket Services segment reported net sales for fiscal year 2006 of $185.0 million, compared to $173.0 million for the prior fiscal year, an increase of seven percent. For the fourth quarter of fiscal year 2006, the segment’s net sales increased ten percent to $50.6 million from $45.9 million for the prior fiscal year period. The operating loss for the fourth quarter was $2.2 million. For the fiscal year 2006, the segment’s operating loss was also $2.2 million, which included $10.8 million of costs associated with the transition of castings and sheet metal products to new aerospace programs and startup costs associated with our new Thailand maintenance and repair facility. “We remain optimistic as to the results of the Aftermarket Services segment in fiscal year 2007 despite the effect of these costs on fiscal year 2006,” said Richard C. Ill, Triumph’s President and Chief Executive Officer.

 

Mr. Ill continued, “Triumph had an excellent fiscal year 2006 driven by strong organic growth in revenue, operating income and earnings across our core businesses. Our record level of backlog demonstrates that our products and services are in strong demand from our global customers. As we look ahead to fiscal year 2007 and beyond, we are confident that our commitment to develop new systems, products and services and our strong financial position will provide the foundation for continued revenue and earnings growth throughout the current upswing in the aerospace market.”

 

In commenting on the outlook for fiscal year 2007, Mr. Ill said, “We see continued momentum across our operations in fiscal year 2007. We project sales in the range of $875 million to $925 million and earnings per share for the fiscal year of $2.40 to $2.70.”

 

As previously announced, Triumph will hold a conference call today at 8:30 a.m. (EDT) to discuss the fiscal year 2006 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. An audio replay will be available from May 5th until May 12th by calling (888) 266-2081 (Domestic) or (703) 925-2533 (International), passcode #889458.

 

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 product and service development, the aerospace market conditions, financial performance, revenue and earnings growth and sales and earnings results for fiscal 2007. 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

 

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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

 

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FINANCIAL DATA  (UNAUDITED)

 

TRIUMPH GROUP, INC. AND SUBSIDIARIES

(in thousands, except per share data)

 

CONDENSED STATEMENTS OF INCOME

 

 

 

Three Months Ended
March 31,

 

Twelve Months Ended
March 31,

 

 

 

2006

 

2005

 

2006

 

2005

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

$

211,870

 

$

181,874

 

$

760,421

 

$

688,485

 

 

 

 

 

 

 

 

 

 

 

Operating Income

 

15,937

 

8,289

 

56,087

 

33,430

 

 

 

 

 

 

 

 

 

 

 

Interest Expense and Other

 

3,074

 

3,369

 

12,519

 

13,025

 

Income Tax Expense

 

1,908

 

50

 

9,053

 

4,596

 

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations

 

10,955

 

4,870

 

34,515

 

15,809

 

Income (Loss) from Discontinued Operations

 

0

 

168

 

0

 

(4,381

)

 

 

 

 

 

 

 

 

 

 

Net Income

 

$

10,955

 

$

5,038

 

$

34,515

 

$

11,428

 

 

 

 

 

 

 

 

 

 

 

Earnings Per Share - Basic:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations

 

$

0.69

 

$

0.31

 

$

2.17

 

$

1.00

 

Income (Loss) from Discontinued Operations

 

$

0.00

 

$

0.01

 

$

0.00

 

$

(0.28

)

Net Income

 

$

0.69

 

$

0.32

 

$

2.17

 

$

0.72

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding - Basic

 

15,952

 

15,898

 

15,920

 

15,877

 

 

 

 

 

 

 

 

 

 

 

Earnings Per Share - Diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations

 

$

0.68

 

$

0.30

 

$

2.15

 

$

0.99

 

Income (Loss) from Discontinued Operations

 

$

0.00

 

$

0.01

 

$

0.00

 

$

(0.27

)

Net Income

 

$

0.68

 

$

0.31

 

$

2.15

 

$

0.72

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding - Diluted

 

16,126

 

16,016

 

16,060

 

15,971

 

 

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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,

 

 

 

2006

 

2005

 

Assets

 

 

 

 

 

Cash

 

$

5,698

 

$

4,844

 

Accounts Receivable, net

 

147,780

 

127,942

 

Inventory

 

235,878

 

217,234

 

Deferred Income Taxes

 

6,868

 

5,422

 

Prepaid Expenses and Other

 

4,894

 

3,887

 

Current Assets

 

401,118

 

359,329

 

 

 

 

 

 

 

Property and Equipment, net

 

237,325

 

234,123

 

Goodwill

 

272,737

 

273,476

 

Intangible Assets, net

 

49,424

 

56,227

 

Other

 

14,183

 

14,560

 

 

 

 

 

 

 

Total Assets

 

$

974,787

 

$

937,715

 

 

 

 

 

 

 

Liabilities & Stockholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

Accounts Payable

 

$

73,995

 

$

65,211

 

Accrued Expenses

 

68,488

 

75,598

 

Income Taxes Payable

 

5,195

 

2,922

 

Current Portion of Long-Term Debt

 

8,078

 

1,740

 

Current Liabilities

 

155,756

 

145,471

 

 

 

 

 

 

 

Long-Term Debt, less current portion

 

153,339

 

156,042

 

Deferred Income Taxes and Other

 

101,986

 

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

 

260,124

 

259,448

 

Treasury Stock, at cost, 18,311 and 123,160 shares

 

(455

)

(3,057

)

Accumulated other comprehensive (loss) income

 

(159

)

306

 

Retained earnings

 

304,180

 

269,950

 

Total Stockholders’ Equity

 

563,706

 

526,663

 

 

 

 

 

 

 

Total Liabilities and Stockholders’ Equity

 

$

974,787

 

$

937,715

 

 

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FINANCIAL DATA (UNAUDITED)

 

TRIUMPH GROUP, INC. AND SUBSIDIARIES

(dollars in thousands)

 

SEGMENT DATA

 

 

 

Three Months Ended
March 31,

 

Twelve Months Ended
March 31,

 

 

 

2006

 

2005

 

2006

 

2005

 

 

 

 

 

 

 

 

 

 

 

Net Sales:

 

 

 

 

 

 

 

 

 

Aerospace Systems

 

$

162,194

 

$

132,734

 

$

578,324

 

$

495,425

 

Aftermarket Services

 

50,643

 

45,904

 

184,978

 

172,958

 

Other

 

0

 

4,969

 

0

 

26,560

 

Elimination of inter-segment sales

 

(967

)

(1,733

)

(2,881

)

(6,458

)

 

 

$

211,870

 

$

181,874

 

$

760,421

 

$

688,485

 

 

 

 

 

 

 

 

 

 

 

Operating Income (Loss):

 

 

 

 

 

 

 

 

 

Aerospace Systems

 

$

21,819

 

$

14,604

 

$

72,766

 

$

54,046

 

Aftermarket Services

 

(2,172

)

1,494

 

(2,172

)

7,627

 

Other

 

0

 

(4,200

)

0

 

(14,989

)

Corporate

 

(3,710

)

(3,609

)

(14,507

)

(13,254

)

 

 

$

15,937

 

$

8,289

 

$

56,087

 

$

33,430

 

 

 

 

 

 

 

 

 

 

 

Depreciation and Amortization:

 

 

 

 

 

 

 

 

 

Aerospace Systems

 

$

5,360

 

$

5,452

 

$

21,981

 

$

19,681

 

Aftermarket Services

 

2,587

 

2,132

 

9,904

 

8,426

 

Other

 

0

 

297

 

0

 

2,276

 

Corporate

 

48

 

37

 

153

 

145

 

 

 

$

7,995

 

$

7,918

 

$

32,038

 

$

30,528

 

 

 

 

 

 

 

 

 

 

 

Capital Expenditures:

 

 

 

 

 

 

 

 

 

Aerospace Systems

 

$

7,665

 

$

2,103

 

$

16,156

 

$

12,060

 

Aftermarket Services

 

3,752

 

2,468

 

12,248

 

6,018

 

Other

 

0

 

326

 

0

 

462

 

Corporate

 

72

 

6

 

373

 

62

 

 

 

$

11,489

 

$

4,903

 

$

28,777

 

$

18,602

 

 

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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, 2006 was $23.9 million with a margin of 11.3%. EBITDA for the three months ended March 31, 2005 was $16.2 million with a margin of 8.9%. EBITDA for the twelve months ended March 31, 2006 was $88.1 million with a margin of 11.6%. EBITDA for the twelve months ended March 31, 2005 was $64.0 million with a margin of 9.3%.

 

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
March 31,

 

Twelve Months Ended
March 31,

 

 

 

2006

 

2005

 

2006

 

2005

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations

 

$

10,955

 

$

4,870

 

$

34,515

 

$

15,809

 

 

 

 

 

 

 

 

 

 

 

Add-back:

 

 

 

 

 

 

 

 

 

Income Tax Expense

 

1,908

 

50

 

9,053

 

4,596

 

Interest Expense and Other

 

3,074

 

3,369

 

12,519

 

13,025

 

Depreciation and Amortization

 

7,995

 

7,918

 

32,038

 

30,528

 

 

 

 

 

 

 

 

 

 

 

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

 

$

23,932

 

$

16,207

 

$

88,125

 

$

63,958

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

$

211,870

 

$

181,874

 

$

760,421

 

$

688,485

 

 

 

 

 

 

 

 

 

 

 

EBITDA Margin

 

11.3

%

8.9

%

11.6

%

9.3

%

 

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FINANCIAL DATA (UNAUDITED)

 

TRIUMPH GROUP, INC. AND SUBSIDIARIES

(dollars in thousands)

 

Non-GAAP Financial Measure Disclosures (Continued)

 

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

 

 

 

Three Months Ended March 31, 2006

 

 

 

 

 

Segment Data

 

 

 

 

 

Aerospace

 

Aftermarket

 

Corporate /

 

 

 

Total

 

Systems

 

Services

 

Eliminations

 

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations

 

$

10,955

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Add-back:

 

 

 

 

 

 

 

 

 

Income Tax Expense

 

1,908

 

 

 

 

 

 

 

Interest Expense and Other

 

3,074

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income (Expense)

 

$

15,937

 

$

21,819

 

$

(2,172

)

$

(3,710

)

 

 

 

 

 

 

 

 

 

 

Depreciation and Amortization

 

7,995

 

5,360

 

2,587

 

48

 

 

 

 

 

 

 

 

 

 

 

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

 

$

23,932

 

$

27,179

 

$

415

 

$

(3,662

)

 

 

 

 

 

 

 

 

 

 

Net Sales

 

$

211,870

 

$

162,194

 

$

50,643

 

$

(967

)

 

 

 

 

 

 

 

 

 

 

EBITDA Margin

 

11.3

%

16.8

%

0.8

%

n/a

 

 

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

 

 

 

Twelve Months Ended March 31, 2006

 

 

 

 

 

Segment Data

 

 

 

 

 

Aerospace

 

Aftermarket

 

Corporate /

 

 

 

Total

 

Systems

 

Services

 

Eliminations

 

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations

 

$

34,515

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Add-back:

 

 

 

 

 

 

 

 

 

Income Tax Expense

 

9,053

 

 

 

 

 

 

 

Interest Expense and Other

 

12,519

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income (Expense)

 

$

56,087

 

$

72,766

 

$

(2,172

)

$

(14,507

)

 

 

 

 

 

 

 

 

 

 

Depreciation and Amortization

 

32,038

 

21,981

 

9,904

 

153

 

 

 

 

 

 

 

 

 

 

 

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

 

$

88,125

 

$

94,747

 

$

7,732

 

$

(14,354

)

 

 

 

 

 

 

 

 

 

 

Net Sales

 

$

760,421

 

$

578,324

 

$

184,978

 

$

(2,881

)

 

 

 

 

 

 

 

 

 

 

EBITDA Margin

 

11.6

%

16.4

%

4.2

%

n/a

 

 

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FINANCIAL DATA (UNAUDITED)

 

TRIUMPH GROUP, INC. AND SUBSIDIARIES

(dollars in thousands)

 

Non-GAAP Financial Measure Disclosures (Continued)

 

We use “Net Debt to Capital” as a measure of financial leverage. The following table sets forth the computation of Net Debt to Capital:

 

 

 

March 31,

 

March 31,

 

 

 

2006

 

2005

 

 

 

 

 

 

 

Calculation of Net Debt

 

 

 

 

 

Current Portion

 

$

8,078

 

$

1,740

 

Long-Term Debt

 

153,339

 

156,042

 

Total Debt

 

161,417

 

157,782

 

Less: Cash and Cash Equivalents

 

5,698

 

4,844

 

Net Debt

 

$

155,719

 

$

152,938

 

 

 

 

 

 

 

Calculation of Capital

 

 

 

 

 

Net Debt

 

$

155,719

 

$

152,938

 

Stockholders’ Equity

 

563,706

 

526,663

 

Total Capital

 

$

719,425

 

$

679,601

 

 

 

 

 

 

 

Percent of Net Debt to Capital

 

21.6

%

22.5

%

 

######