EX-99.1 2 a07-2834_1ex99d1.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
THIRD QUARTER FISCAL 2007 RESULTS

·                  Net sales for the third quarter fiscal 2007 increased 29% to $242.3 million

·                  Operating income for the third quarter fiscal 2007 increased 80% to $23.8 million

·                  Net income for the third quarter fiscal 2007 increased 16% to $10.8 million

·                  Backlog increased 29% over prior year to $1.1 billion

Wayne, PA — January 25, 2007 — Triumph Group, Inc. (NYSE: TGI) today reported that net sales for the third quarter of the fiscal year ending March 31, 2007 totaled $242.3 million, a twenty-nine percent increase from last year’s third quarter net sales of $187.2 million.  Net income for the third quarter of fiscal year 2007 increased sixteen percent to $10.8 million, or $0.66 per diluted common share, versus $9.3 million, or $0.58 per diluted common share for the third quarter of the prior year.  During the quarter, the company generated $15.5 million of cash flow from operations.  Results for the third quarter of fiscal year 2007 included $0.20 per share charge related to the early retirement of debt and $0.03 per share charge related to stock-based compensation.  Also, during the quarter, the company adjusted its effective tax rate to reflect a $0.06 per share benefit from the renewal of the Research and Experimentation tax credit in December.

Net sales for the first nine months of fiscal year 2007 were $691.3 million, a twenty-six percent increase over net sales of $548.6 million last year.  Net income for the first nine months of fiscal year 2007 increased thirty-nine percent to $32.8 million, or $2.01 per diluted common share, compared to net income of $23.6 million, or $1.47 per diluted common share in the prior year period.  During the nine months, the company generated $20.7 million of cash flow from operations.

1



Prior year period segment results have been changed to classify certain revenue and costs from the Aftermarket Services segment to the Aerospace Systems segment for the operation of Triumph Fabrications-Phoenix and Triumph Fabrications-Fort Worth due to the fact that most of their product line has been transitioned to aerospace OEM products.  The transitioning of these business units resulted in the shift of approximately $5.6 million in revenue and $1.7 million in operating loss for the quarter ended December 31, 2005, previously reported in the Aftermarket Services segment, to the Aerospace Systems segment.  Segment results have been adjusted to reflect these changes.

The Aerospace Systems segment reported net sales for the quarter of $190.1 million compared to $147.2 million in the prior year period, an increase of twenty-nine percent.  Operating income for the third quarter of fiscal year 2007 was $25.8 million, compared to $15.8 million for the prior year period, a sixty-four percent increase.  Organic sales growth for the quarter was eighteen percent.

The Aftermarket Services segment reported net sales for the quarter of $52.7 million compared to $40.8 million in the prior year, a twenty-nine percent increase.  Operating income for the third quarter of fiscal year 2007 was $2.7 million, compared to $1.6 million for the prior year period, a seventy percent increase.  Organic sales growth for the quarter was twenty-one percent.  Operating results for the quarter reflected $1.0 million of start up costs associated with the new Thailand maintenance and repair facility.

Richard C. Ill, Triumph’s President and Chief Executive Officer, said, “Triumph had another very strong quarter marked by continued growth in revenue, operating income and earnings.  Based on the strength of our markets and our robust backlog, we are confident that we will continue to generate significant revenue growth and enhanced operating earnings for the balance of fiscal year 2007 and beyond.”

Commenting on the outlook for the year, Mr. Ill stated, “As a result of our strong performance, we expect that fiscal year 2007 sales will be in the range of $950 million to $975 million and earnings per share for the fiscal year will meet or exceed the upper end of the previously announced range of $2.65 to $2.70, which includes the $0.20 per share charge for the early retirement of debt.”

As previously announced, Triumph Group will hold a conference call on January 26th at 8:30 a.m. (ET) to discuss the fiscal year 2007 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 26th until February 2nd by calling (888) 266-2081 (Domestic) or (703) 925-2533 (International), passcode #1026032.

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 commercial, regional, business and military aircraft and aircraft components, as well as commercial and regional airlines and air cargo carriers.

2



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, 2006.

FINANCIAL DATA (UNAUDITED) ON FOLLOWING 7 PAGES

3



FINANCIAL DATA (UNAUDITED)

TRIUMPH GROUP, INC. AND SUBSIDIARIES

(in thousands, except per share data)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

December 31,

 

December 31,

 

 

 

2006

 

2005

 

2006

 

2005

 

CONDENSED STATEMENTS OF INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

$

242,341

 

$

187,221

 

$

691,285

 

$

548,551

 

 

 

 

 

 

 

 

 

 

 

Operating Income

 

23,777

 

13,203

 

65,358

 

40,150

 

 

 

 

 

 

 

 

 

 

 

Interest Expense and Other

 

3,227

 

3,086

 

10,754

 

9,445

 

Charge for Early Extinguishment of Debt

 

5,088

 

0

 

5,088

 

0

 

Income Tax Expense

 

4,661

 

770

 

16,671

 

7,145

 

 

 

 

 

 

 

 

 

 

 

Net Income

 

$

10,801

 

$

9,347

 

$

32,845

 

$

23,560

 

 

 

 

 

 

 

 

 

 

 

Earnings Per Share - Basic:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

 

$

0.66

 

$

0.59

 

$

2.03

 

$

1.48

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding - Basic

 

16,262

 

15,912

 

16,168

 

15,909

 

 

 

 

 

 

 

 

 

 

 

Earnings Per Share - Diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

 

$

0.66

 

$

0.58

 

$

2.01

 

$

1.47

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding - Diluted

 

16,459

 

16,052

 

16,353

 

16,038

 

 

 

 

 

 

 

 

 

 

 

Dividends declared and paid per common share

 

$

0.04

 

$

0.00

 

$

0.08

 

$

0.00

 

 

 

4



 

(Continued)

 

FINANCIAL DATA (UNAUDITED)

TRIUMPH GROUP, INC. AND SUBSIDIARIES

(dollars in thousands, except per share data)

BALANCE SHEET

 

 

 

December 31,

 

March 31,

 

 

 

2006

 

2006

 

Assets

 

 

 

 

 

Cash

 

$

9,349

 

$

5,698

 

Accounts Receivable, net

 

160,989

 

147,780

 

Inventory

 

285,981

 

235,878

 

Deferred Income Taxes

 

6,868

 

6,868

 

Prepaid Expenses and Other

 

6,444

 

4,894

 

Current Assets

 

469,631

 

401,118

 

Property and Equipment, net

 

274,672

 

237,325

 

Goodwill

 

321,290

 

272,737

 

Intangible Assets, net

 

61,827

 

49,424

 

Other

 

19,126

 

14,179

 

Total Assets

 

$

1,146,546

 

$

974,783

 

 

 

 

 

 

 

Liabilities & Stockholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

Accounts Payable

 

$

83,443

 

$

73,995

 

Accrued Expenses

 

69,056

 

68,488

 

Income Taxes Payable

 

5,880

 

5,195

 

Current Portion of Long-Term Debt

 

71

 

8,078

 

Current Liabilities

 

158,450

 

155,756

 

Long-Term Debt, less current portion

 

279,619

 

153,339

 

Deferred Income Taxes and Other

 

98,756

 

101,985

 

 

 

 

 

 

 

Stockholders’ Equity:

 

 

 

 

 

 

 

 

 

 

 

Common Stock, $.001 par value, 50,000,000 shares authorized, 16,387,503 and 16,027,324 shares issued

 

16

 

16

 

Capital in excess of par value

 

273,151

 

260,124

 

Treasury Stock, at cost, 500 and 18,311 shares

 

0

 

(455

)

Accumulated other comprehensive income (loss)

 

832

 

(162

)

Retained earnings

 

335,722

 

304,180

 

Total Stockholders’ Equity

 

609,721

 

563,703

 

Total Liabilities and Stockholders’ Equity

 

$

1,146,546

 

$

974,783

 

 

 

 

5



(Continued)

 

FINANCIAL DATA (UNAUDITED)

TRIUMPH GROUP, INC. AND SUBSIDIARIES
(dollars in thousands)

 

SEGMENT DATA

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

December 31,

 

December 31,

 

 

 

2006

 

2005

 

2006

 

2005

 

Net Sales:

 

 

 

 

 

 

 

 

 

Aerospace Systems

 

$

190,100

 

$

147,215

 

$

544,002

 

$

431,148

 

Aftermarket Services

 

52,650

 

40,837

 

149,134

 

120,005

 

Elimination of inter-segment sales

 

(409

)

(831

)

(1,851

)

(2,602

)

 

 

$

242,341

 

$

187,221

 

$

691,285

 

$

548,551

 

 

 

 

 

 

 

 

 

 

 

Operating Income (Loss):

 

 

 

 

 

 

 

 

 

Aerospace Systems

 

$

25,809

 

$

15,762

 

$

71,455

 

$

46,644

 

Aftermarket Services

 

2,748

 

1,616

 

6,741

 

4,303

 

Corporate

 

(4,780

)

(4,175

)

(12,838

)

(10,797

)

 

 

$

23,777

 

$

13,203

 

$

65,358

 

$

40,150

 

 

 

 

 

 

 

 

 

 

 

Depreciation and Amortization:

 

 

 

 

 

 

 

 

 

Aerospace Systems

 

$

6,567

 

$

6,001

 

$

19,323

 

$

17,764

 

Aftermarket Services

 

2,610

 

2,088

 

7,320

 

6,174

 

Corporate

 

57

 

41

 

168

 

105

 

 

 

$

9,234

 

$

8,130

 

$

26,811

 

$

24,043

 

 

 

 

 

 

 

 

 

 

 

Capital Expenditures:

 

 

 

 

 

 

 

 

 

Aerospace Systems

 

$

10,482

 

$

3,437

 

$

25,354

 

$

9,701

 

Aftermarket Services

 

3,439

 

3,110

 

14,597

 

7,286

 

Corporate

 

43

 

268

 

188

 

301

 

 

 

$

13,964

 

$

6,815

 

$

40,139

 

$

17,288

 

6



(Continued)

 

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 December 31, 2006 was $33.0 million with a margin of 13.6%. EBITDA for the three months ended December 31, 2005 was $21.3 million with a margin of 11.4%. EBITDA for the nine months ended December 31, 2006 was $92.2 million with a margin of 13.3%. EBITDA for the nine months ended December 31, 2005 was $64.2 million with a margin of 11.7%.

 

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

 

Nine Months Ended

 

 

 

December 31,

 

December 31,

 

 

 

2006

 

2005

 

2006

 

2005

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

 

$

10,801

 

$

9,347

 

$

32,845

 

$

23,560

 

 

 

 

 

 

 

 

 

 

 

Add-back:

 

 

 

 

 

 

 

 

 

Income Tax Expense

 

4,661

 

770

 

16,671

 

7,145

 

Charge for Early Extinguishment of Debt

 

5,088

 

0

 

5,088

 

0

 

Interest Expense and Other

 

3,227

 

3,086

 

10,754

 

9,445

 

Depreciation and Amortization

 

9,234

 

8,130

 

26,811

 

24,043

 

 

 

 

 

 

 

 

 

 

 

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

 

$

33,011

 

$

21,333

 

$

92,169

 

$

64,193

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

$

242,341

 

$

187,221

 

$

691,285

 

$

548,551

 

 

 

 

 

 

 

 

 

 

 

EBITDA Margin

 

13.6

%

11.4

%

13.3

%

11.7

%

 

7



(Continued)

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 December 31, 2006

 

 

 

 

 

Segment Data

 

 

 

Total

 

Aerospace
Systems

 

Aftermarket
Services

 

Corporate /
Eliminations

 

Net Income

 

$

10,801

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Add-back:

 

 

 

 

 

 

 

 

 

Income Tax Expense

 

4,661

 

 

 

 

 

 

 

Charge for Early Extinguishment of Debt

 

5,088

 

 

 

 

 

 

 

Interest Expense and Other

 

3,227

 

 

 

 

 

 

 

Operating Income (Expense)

 

$

23,777

 

$

25,809

 

$

2,748

 

$

(4,780

)

 

 

 

 

 

 

 

 

 

 

Depreciation and Amortization

 

9,234

 

6,567

 

2,610

 

57

 

 

 

 

 

 

 

 

 

 

 

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

 

$

33,011

 

$

32,376

 

$

5,358

 

$

(4,723

)

 

 

 

 

 

 

 

 

 

 

Net Sales

 

$

242,341

 

$

190,100

 

$

52,650

 

$

(409

)

 

 

 

 

 

 

 

 

 

 

EBITDA Margin

 

13.6

%

17.0

%

10.2

%

n/a

 

 

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

 

 

Nine Months Ended December 31, 2006

 

 

 

 

 

Segment Data

 

 

 

Total

 

Aerospace
Systems

 

Aftermarket
Services

 

Corporate /
Eliminations

 

Net Income

 

$

32,845

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Add-back:

 

 

 

 

 

 

 

 

 

Income Tax Expense

 

16,671

 

 

 

 

 

 

 

Charge for Early Extinguishment of Debt

 

5,088

 

 

 

 

 

 

 

Interest Expense and Other

 

10,754

 

 

 

 

 

 

 

Operating Income (Expense)

 

$

65,358

 

$

71,455

 

$

6,741

 

$

(12,838

)

 

 

 

 

 

 

 

 

 

 

Depreciation and Amortization

 

26,811

 

19,323

 

7,320

 

168

 

 

 

 

 

 

 

 

 

 

 

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

 

$

92,169

 

$

90,778

 

$

14,061

 

$

(12,670

)

 

 

 

 

 

 

 

 

 

 

Net Sales

 

$

691,285

 

$

544,002

 

$

149,134

 

$

(1,851

)

 

 

 

 

 

 

 

 

 

 

EBITDA Margin

 

13.3

%

16.7

%

9.4

%

n/a

 

 

8



(Continued)

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:

 

December 31,

 

March 31,

 

 

 

2006

 

2006

 

Calculation of Net Debt

 

 

 

 

 

Current Portion

 

$

71

 

$

8,078

 

Long-term debt

 

279,619

 

153,339

 

Total Debt

 

279,690

 

161,417

 

Less: Cash

 

9,349

 

5,698

 

Net Debt

 

$

270,341

 

$

155,719

 

 

 

 

 

 

 

Calculation of Capital

 

 

 

 

 

Net Debt

 

$

270,341

 

$

155,719

 

Stockholders’ equity

 

609,721

 

563,703

 

Total Capital

 

$

880,062

 

$

719,422

 

 

 

 

 

 

 

Percent of Net Debt to Capital

 

30.7

%

21.6

%

 

9



(Continued)

FINANCIAL DATA (UNAUDITED)

TRIUMPH GROUP, INC. AND SUBSIDIARIES

Reconciliation of Non-GAAP Financial Measure Disclosures

The Company believes its earnings excluding the third quarter charge for the early extinguishment of debt provides financial statement users with meaningful insight into operating trends.

Reconciliation of Non-GAAP EPS to GAAP EPS:

 

 

Three Months Ended
December 31,

 

Nine Months Ended
December 31,

 

 

 

2006

 

2005

 

2006

 

2005

 

Earnings Per Share - Basic:

 

$

0.66

 

$

0.59

 

$

2.03

 

$

1.48

 

 

 

 

 

 

 

 

 

 

 

Third Quarter Charge for Early Extinguishment of Debt

 

$

0.20

 

$

0.00

 

$

0.20

 

$

0.00

 

 

 

 

 

 

 

 

 

 

 

Earnings Per Share-Basic, Excluding Charge for Early Extinguishment of Debt

 

$

0.86

 

$

0.59

 

$

2.23

 

$

1.48

 

 

 

 

 

 

 

 

 

 

 

Earnings Per Share - Diluted:

 

$

0.66

 

$

0.58

 

$

2.01

 

$

1.47

 

 

 

 

 

 

 

 

 

 

 

Third Quarter Charge for Early Extinguishment of Debt

 

$

0.20

 

$

0.00

 

$

0.20

 

$

0.00

 

 

 

 

 

 

 

 

 

 

 

Earnings Per Share-Diluted, Excluding Charge for Early Extinguishment of Debt

 

$

0.86

 

$

0.58

 

$

2.21

 

$

1.47

 

 

######

10