- Net sales for second quarter fiscal 2010 were $313.1 million
- Income from continuing operations for second quarter fiscal 2010 was $20.7 million, or $1.25 per diluted share
- Net income for second quarter fiscal 2010 was $19.5 million, or $1.17 per diluted share
- Cash flow from operations for second quarter fiscal 2010 increased 25% to $40.8 million
Triumph Group, Inc. (NYSE:TGI) today reported that net sales for the second quarter of the fiscal year ending March 31, 2010 totaled $313.1 million, a three percent decrease from last year''s second quarter net sales of $323.4 million. Income from continuing operations for the second quarter of fiscal year 2010 was $20.7 million, or $1.25 per diluted share, versus $25.1 million, or $1.51 per diluted share, for the second quarter of the prior year. Net income for the second quarter of fiscal year 2010 was $19.5 million, or $1.17 per diluted share, versus $24.0 million, or $1.44 per diluted share, for the second quarter of the prior year. The number of shares used in computing diluted earnings per share for the second quarter of fiscal year 2010 was 16.6 million shares. During the quarter, the company generated $40.8 million of cash flow from operations. The results for the quarter included $1.5 million of incremental non-cash interest expense associated with the adoption of APB 14-1, which required a change in the accounting for convertible debt interest, and approximately $1.0 million of start up costs related to the Mexican facility. Prior year period results were also restated to reflect the adoption of APB 14-1, resulting in an incremental $1.6 million of interest expense over the previously reported amount.
Net sales for the first six months of fiscal year 2010 were $629.3 million, a two percent decrease from net sales of $643.9 million last fiscal year. Income from continuing operations for the first six months of fiscal year 2010 was $42.2 million, or $2.54 per diluted share. Net income for the first six months of fiscal 2010 was $37.5 million, or $2.26 per diluted share. During the six months ended September 30, 2009, the company generated $73.3 million of cash flow from operations.
Aerospace Systems
The Aerospace Systems segment reported net sales for the quarter of $256.4 million compared to $257.6 million in the prior year period. Organic sales decreased ten percent over the prior year due to the continued decline in the business jet market, program delays particularly on the Boeing 787 aircraft and the softening of the regional jet market. Operating income for the second quarter of fiscal year 2010 was $39.1 million, compared to $46.5 million for the prior year period. Operating income for the quarter included $1.2 million of legal expenses associated with the ongoing trade secret litigation.
Aftermarket Services
The Aftermarket Services segment reported net sales for the quarter of $57.3 million compared to $66.5 million in the prior year, a decrease of fourteen percent primarily due to lower passenger and freight traffic and the continued effects of airline inventory de-stocking. Operating income for the second quarter of fiscal year 2010 was $3.5 million, compared to $2.9 million for the prior year period, a twenty percent increase. Operating performance at the Phoenix APU businesses improved to a small profit for the quarter.
Outlook
Commenting on the company''s performance and its outlook, Richard C. Ill, Triumph''s Chairman and Chief Executive Officer, said, “In light of current market conditions, we are pleased with our performance in our second quarter. We continue to control costs and strengthen our balance sheet with strong cash generation and working capital management.Despite the uncertain and inconsistent operating environment, we continue to see opportunities for our company to grow and improve, such as the recently announced development award on the Sikorsky CH-53K aircraft.”
“Based on current projected aircraft production rates and our existing share count, we are maintaining our prior guidance that earnings per share from continuing operations for the current fiscal year will be approximately $5.00 per diluted share.”
As previously announced, Triumph Group will hold a conference call tomorrow at 8:30 a.m. (ET) to discuss the fiscal year 2010 second quarter 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 October 27th until November 3rd by calling (888) 266-2081 (Domestic) or (703) 925-2533 (International), passcode #1404070.
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.
More information about Triumph can be found on the company''s website 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 aerospace market conditions, the impact of new contracts, aircraft production rates, financial and operational performance, revenue and earnings growth, and earnings results for fiscal 2010. 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 fiscal year ended March 31, 2009.
| FINANCIAL DATA (UNAUDITED) | ||||||||||||
| TRIUMPH GROUP, INC. AND SUBSIDIARIES | ||||||||||||
| (in thousands, except per share data) | ||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||
| September 30, | September 30, | |||||||||||
| CONDENSED STATEMENTS OF INCOME | 2009 | 2008 | 2009 | 2008 | ||||||||
| Net sales | $313,139 | $323,391 | $629,269 | $643,947 | ||||||||
| Operating income | 37,128 | 42,714 | 74,998 | 86,042 | ||||||||
| Interest expense and other | 5,501 | 4,611 | 10,827 | 9,579 | ||||||||
| Gain on early extinguishment of debt | (39 | ) | 0 | (39 | ) | 0 | ||||||
| Income tax expense | 10,948 | 13,027 | 21,971 | 26,352 | ||||||||
| Income from continuing operations | 20,718 | 25,076 | 42,239 | 50,111 | ||||||||
| Loss from discontinued operations, net of tax | (1,267 | ) | (1,093 | ) | (4,749 | ) | (2,296 | ) | ||||
| Net income | $19,451 | $23,983 | $37,490 | $47,815 | ||||||||
| Earnings per share - basic: | ||||||||||||
| Income from continuing operations | $1.26 | $1.53 | $2.57 | $3.06 | ||||||||
| Loss from discontinued operations | ($0.08 | ) | ($0.07 | ) | ($0.29 | ) | ($0.14 | ) | ||||
| Net income | $1.18 | $1.46 | $2.28 | $2.92 | ||||||||
| Weighted average common shares outstanding - basic | 16,464 | 16,386 | 16,448 | 16,379 | ||||||||
| Earnings per share - diluted: | ||||||||||||
| Income from continuing operations | $1.25 | $1.51 | $2.54 | $3.02 | ||||||||
| Loss from discontinued operations | ($0.08 | ) | ($0.07 | ) | ($0.29 | ) | ($0.14 | ) | ||||
| Net income | $1.17 | $1.44 | $2.26 | * | $2.88 | |||||||
| Weighted average common shares outstanding - diluted | 16,637 | 16,607 | 16,618 | 16,619 | ||||||||
| Dividends declared and paid per common share | $0.04 | $0.04 | $0.08 | $0.08 | ||||||||
| * Difference due to rounding. | ||||||||||||
| FINANCIAL DATA (UNAUDITED) | ||||||
| TRIUMPH GROUP, INC. AND SUBSIDIARIES | ||||||
| (dollars in thousands, except per share data) | ||||||
| BALANCE SHEET | ||||||
| September 30, | March 31, | |||||
| 2009 | 2009 | |||||
| Assets | ||||||
| Cash | $26,973 | $14,478 | ||||
| Accounts receivable, net | 182,011 | 209,463 | ||||
| Inventory | 394,089 | 389,348 | ||||
| Rotable assets | 26,393 | 25,652 | ||||
| Deferred income taxes | 1,628 | 1,727 | ||||
| Assets held for sale | 23,436 | 27,695 | ||||
| Prepaid income taxes | 2,650 | 4,434 | ||||
| Prepaid expenses and other | 8,852 | 6,021 | ||||
| Current assets | 666,032 | 678,818 | ||||
| Property and equipment, net | 326,320 | 332,467 | ||||
| Goodwill | 465,211 | 459,541 | ||||
| Intangible assets, net | 101,877 | 108,350 | ||||
| Other | 15,118 | 12,031 | ||||
| Total assets | $1,574,558 | $1,591,207 | ||||
| Liabilities & Stockholders'' Equity | ||||||
| Accounts payable | $89,632 | $103,711 | ||||
| Accrued expenses | 96,174 | 109,580 | ||||
| Liabilities related to assets held for sale | 2,758 | 4,283 | ||||
| Current portion of long-term debt | 92,504 | 89,085 | ||||
| Current liabilities | 281,068 | 306,659 | ||||
| Long-term debt, less current portion | 330,094 | 370,311 | ||||
| Income taxes payable, non-current | 2,962 | 2,917 | ||||
| Deferred income taxes and other | 126,277 | 121,935 | ||||
| Stockholders'' Equity: | ||||||
Common stock, $.001 par value, 100,000,000 shares authorized, 16,824,737 and 16,763,984 shares issued | 16 | 16 | ||||
| Capital in excess of par value | 314,059 | 312,256 | ||||
| Treasury stock, at cost, 159,038 and 174,417 shares | (8,727 | ) | (9,785 | ) | ||
| Accumulated other comprehensive loss | 4,425 | (2,233 | ) | |||
| Retained earnings | 524,384 | 489,131 | ||||
| Total stockholders'' equity | 834,157 | 789,385 | ||||
| Total liabilities and stockholders'' equity | $1,574,558 | $1,591,207 | ||||
| FINANCIAL DATA (UNAUDITED) | ||||||||||||
| TRIUMPH GROUP, INC. AND SUBSIDIARIES | ||||||||||||
| (dollars in thousands) | ||||||||||||
| SEGMENT DATA | Three Months Ended | Six Months Ended | ||||||||||
| September 30, | September 30, | |||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||
| Net sales: | ||||||||||||
| Aerospace Systems | $256,421 | $257,569 | $516,394 | $515,801 | ||||||||
| Aftermarket Services | 57,313 | 66,481 | 115,097 | 129,449 | ||||||||
| Elimination of inter-segment sales | (595 | ) | (659 | ) | (2,222 | ) | (1,303 | ) | ||||
| $313,139 | $323,391 | $629,269 | $643,947 | |||||||||
| Operating income (loss): | ||||||||||||
| Aerospace Systems | $39,086 | $46,515 | $80,931 | $92,585 | ||||||||
| Aftermarket Services | 3,481 | 2,896 | 5,904 | 6,783 | ||||||||
| Corporate | (5,439 | ) | (6,697 | ) | (11,837 | ) | (13,326 | ) | ||||
| $37,128 | $42,714 | $74,998 | $86,042 | |||||||||
| Depreciation and amortization: | ||||||||||||
| Aerospace Systems | $10,888 | $8,787 | $21,590 | $17,390 | ||||||||
| Aftermarket Services | 3,182 | 3,532 | 6,439 | 7,035 | ||||||||
| Corporate | 227 | 66 | 344 | 133 | ||||||||
| $14,297 | $12,385 | $28,373 | $24,558 | |||||||||
| Capital expenditures: | ||||||||||||
| Aerospace Systems | $5,959 | $8,757 | $11,471 | $17,911 | ||||||||
| Aftermarket Services | 730 | 827 | 1,760 | 2,974 | ||||||||
| Corporate | 283 | 425 | 814 | 487 | ||||||||
| $6,972 | $10,009 | $14,045 | $21,372 | |||||||||
| FINANCIAL DATA (UNAUDITED) | |||
| TRIUMPH GROUP, INC. AND SUBSIDIARIES | |||
| (dollars in thousands) | |||
| Non-GAAP Financial Measure Disclosures | |||
We use "Net Debt to Capital" as a measure of financial leverage. The following table sets forth the computation of Net Debt to Capital: | |||
| September 30, | March 31, | |||||||||
| 2009 | 2009 | |||||||||
Calculation of Net Debt | ||||||||||
| Current portion | $ | 92,504 | $ | 89,085 | ||||||
| Long-term debt | 330,094 | 370,311 | ||||||||
| Total debt | 422,598 | 459,396 | ||||||||
| Less: Cash | 26,973 | 14,478 | ||||||||
| Net debt | $ | 395,625 | $ | 444,918 | ||||||
Calculation of Capital | ||||||||||
| Net debt | $ | 395,625 | $ | 444,918 | ||||||
| Stockholders'' equity | 834,157 | 789,385 | ||||||||
| Total capital | $ | 1,229,782 | $ | 1,234,303 | ||||||
| Percent of net debt to capital | 32.2% | 36.0% | ||||||||
Contacts:
Triumph Group, Inc.
Sheila Spagnolo
Vice President
610-251-1000
sspagnolo@triumphgroup.com
