Exhibit 99.1
NEWS RELEASE
Contact:
Sheila Spagnolo
Vice President
Phone (610) 251-1000
sspagnolo@triumphgroup.com
TRIUMPH GROUP REPORTS
RECORD FOURTH QUARTER
AND FULL FISCAL YEAR 2012 RESULTS
| • | Net sales for fourth quarter fiscal year 2012 increased 3% to $946.4 million |
| • | Income from continuing operations for fourth quarter fiscal year 2012 was $106.3 million, or $2.03 per diluted share, which included integration costs of $2.6 million pre tax ($0.03 per diluted share) and a $40.4 million net curtailment gain ($0.50 per diluted share) resulting from amendments made to the Triumph Aerostructures pension plans. Excluding the integration costs and the net curtailment gain, earnings per share from continuing operations increased 46% to $1.57 per diluted share |
| • | Record full year revenues and earnings per share from continuing operations of $3,407.9 million and $5.43 per diluted share. Excluding integration costs of $6.3 million pre tax ($0.08 per diluted share) and the $40.4 million net curtailment gain, earnings per share from continuing operations was $5.01 per diluted share |
| • | Cash flow from operations for fiscal year 2012 before pension contribution of $121.9 million was $349.1 million |
Berwyn, PA - May 2, 2012- Triumph Group, Inc. (NYSE: TGI) today reported that, for the fourth quarter ended March 31, 2012, net sales were $946.4 million, a three percent increase from last year's fourth quarter net sales of $919.1 million. Organic sales growth for the quarter was three percent.
Income from continuing operations for the fourth quarter of fiscal year 2012 increased ninety-seven percent to $106.3 million, or $2.03 per diluted share, versus $54.0 million, or $1.05 per diluted share, for the fourth quarter of the prior fiscal year. The quarter's results included approximately $2.6 million pre tax ($1.7 million after tax or $0.03 per diluted share) of integration costs related to the acquisition of Vought Aircraft Industries (now Triumph Aerostructures-Vought Aircraft Division). In addition, the fourth quarter results were favorably impacted by a $40.4 million pre tax ($26.1 million after tax or $0.50 per diluted share) net curtailment gain resulting from amendments made to the Triumph Aerostructures pension plans which was reflected on the face of the income statement, and in the segment reporting, was included in Corporate. The prior fiscal year's quarter included approximately $1.3 million pre tax ($0.8 million after tax) of integration costs associated with the Vought acquisition. Excluding integration costs and the net curtailment gain, earnings per share from continuing operations for the quarter was $1.57 per diluted share. The number of shares used in computing diluted earnings per share for the quarter was 52.3 million shares.
Full Fiscal Year Highlights
For the fiscal year ended March 31, 2012, net sales totaled $3,407.9 million, a seventeen percent increase from fiscal year 2011 net sales of $2,905.3 million. Organic sales growth for the fiscal year was seven percent.
Income from continuing operations for fiscal year 2012 increased eighty-five percent to $281.6 million, or $5.43 per diluted share, versus $152.4 million, or $3.21 per diluted share, for fiscal year 2011. The fiscal year's results included approximately $6.3 million pre tax ($4.1 million after tax or $0.08 per diluted share) of integration costs related to the Vought acquisition as well as the net curtailment gain of $40.4 million pre tax ($0.50 per diluted share). The prior fiscal year included approximately $20.9 million pre tax ($15.7 million after tax) of integration costs associated with the Vought acquisition. Excluding these costs and the net curtailment gain, income from continuing operations for fiscal year 2012 was $259.7 million, or $5.01 per diluted share. The number of shares used in computing diluted earnings per share for fiscal year 2012 was 51.9 million shares.
During the fiscal year, the company generated $349.1 million of cash flow from operations before Triumph Aerostructures' pension contributions of $121.9 million; after these contributions, cash flow from operations was $227.2 million.
Richard C. Ill, Triumph's Chairman and Chief Executive Officer, said, “Triumph had a terrific fiscal year 2012 capped by a strong fourth quarter operating performance. Full year and fourth quarter sales, earnings, operating margin and cash flow all were at record levels. We executed across all three of our business segments and delivered significant operating margin expansion. In addition, we continued the successful integration of Triumph Aerostructures, successfully managed our pension obligations, and exceeded our debt reduction goal.”
“We enter fiscal year 2013 with momentum, a strong balance sheet, and a growing backlog. Even as we face the challenges of uncertainty in U.S. defense spending, we are confident that Triumph is well positioned to continue its profitable growth.”
Segments
Aerostructures
The Aerostructures segment reported record net sales for the fourth quarter of fiscal year 2012 of $714.2 million compared to $703.5 million for the prior fiscal year period, an increase of two percent, all of which was organic. For the fiscal year 2012, net sales increased twenty-one percent to a record $2,571.6 million from $2,126.0 million for the prior fiscal year. Organic sales growth for the fiscal year was six percent. For the fourth quarter of fiscal year 2012, operating income increased thirty-one percent to a record $119.0 million versus $91.1 million for the prior fiscal year quarter and included a net favorable cumulative catch-up adjustment on long-term contracts of $7.8 million. Operating income for fiscal year 2012 was a record $403.4 million, compared to $267.8 million for the prior fiscal year, an increase of fifty-one percent. The segment's operating margin for the quarter was seventeen percent, a 370 basis point improvement over the prior year period.
Aerospace Systems
The Aerospace Systems segment reported record net sales for the fourth quarter of fiscal year 2012 of $151.7 million compared to $147.8 million for the prior fiscal year period, an increase of three percent, all of which was organic. For the fiscal year 2012, net sales increased eight percent to a record $551.8 million from $513.4 million for the prior fiscal year, all of which was organic. Operating income for the fourth quarter of fiscal year 2012 increased eighteen percent to a record $26.4 million versus $22.4 million for the prior fiscal year quarter. Operating margin for the quarter increased to seventeen percent versus fifteen percent in the prior fiscal year period. Operating income for fiscal year 2012 was a record $90.0 million, compared to $75.3 million for the prior fiscal year, an increase of twenty percent. Operating margin for the fiscal year was sixteen percent. The segment's fiscal year 2012 and fourth quarter operating results included approximately $3.2 million and $1.3 million, respectively, of legal expenses associated with the ongoing trade secret litigation.
Aftermarket Services
The Aftermarket Services Systems segment reported record net sales for the fourth quarter of fiscal year 2012 of $83.1 million, compared to $69.5 million for the prior fiscal year period, an increase of twenty percent. Organic sales growth for the quarter was fifteen percent. For the fiscal year 2012, net sales increased seven percent to a record $292.7 million from $272.7 million for the prior fiscal year. Organic sales growth for the fiscal year was six percent. Operating income for the fourth quarter of fiscal year 2012 increased fifty-seven percent to $11.0 million versus $7.0 million for the prior fiscal year quarter. Operating margin for the quarter increased to a record thirteen percent driven primarily by strong market growth and improved operating performance. Operating income for fiscal year 2012 was $31.9 million, compared to $28.8 million for the prior fiscal year, an increase of eleven percent. Operating margin for the fiscal year was eleven percent. The segment's fiscal year 2012 and fourth quarter operating results included expenses associated with the bankruptcies of American Airlines, Pinnacle and Aveos of $1.1 million and $0.5 million, respectively.
Outlook
In commenting on the outlook for fiscal year 2013, Mr. Ill said, “We are entering our new fiscal year with a very strong backlog and a very solid balance sheet. We project sales in the range of $3.5 to $3.7 billion and earnings per share from continuing operations for the fiscal year of $5.45 to $5.55 per diluted share, excluding integration costs. This represents a nine to eleven percent increase over fiscal year 2012 earnings per share from continuing operations, excluding integration costs and the net curtailment gain.” This guidance is based on the following assumptions for fiscal year 2013:
| • | the number of shares used in computing diluted earnings per share is 52.5 million |
| • | $5.0 million of legal expenses associated with the trade secret litigation |
| • | interest expense of $70 million |
| • | tax rate of 36.5% reflecting the expiration of the R&D tax credit |
| • | capital expenditures and investments in major new programs of $130 to $150 million, of which $50.0 million will be reflected in inventory (net of advances) |
| • | pension income of $27 million and cash contributions to the plan of $110 million |
| • | OPEB expense of approximately $15 million and cash expenditures of approximately $37 million |
| • | synergies from the Vought acquisition remain on track for a $50 million annual run rate by June 2013 |
| • | current productions rates - specifically: |
| ◦ | 777 production at 7 per month trending to 8.3 per month in Q4 |
| ◦ | 737 production rates of 35 per month trending to 38 per month in the second half of the fiscal year |
| ◦ | 747 production rates of 2 per month |
| ◦ | the most recent 787 production schedule |
| ◦ | 767 production rates of 2 per month |
| ◦ | A330 production of 9 per month trending to 10 per month near the end of Q4 |
| ◦ | C-17 production of 10 units for Triumph Aerostructures |
| ◦ | other than C-17 mentioned above, production rates for the company's largest military programs (i.e. V-22, UH 60, CH 47, C130) are planned to remain strong; however, the U.S. Government budget process introduces some risk to this assumption |
| ◦ | slightly lower sales of G550 and G450 |
| ◦ | at a minimum, early year weakness in Cessna sales |
| • | the award of the KC-46A tanker to Boeing will create some non-recurring development activities in fiscal year 2013 and will be a positive in the long term |
| • | continued strength in the Aftermarket Services segment of the business |
As previously announced, Triumph Group will hold a conference call tomorrow at 8:30 a.m. (ET) to discuss the fiscal year 2012 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 3rd to May 10th by calling (888) 266-2081 (Domestic) or (703) 925-2533 (International), passcode #1575402.
Triumph Group, Inc., headquartered in Berwyn, Pennsylvania, designs, engineers, manufactures, repairs and overhauls a broad portfolio of aerostructures, aircraft components, accessories, subassemblies and systems. 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 statements of expectations of or assumptions about future aerospace market conditions, aircraft production rates, financial and operational performance, revenue and earnings growth, and earnings results for fiscal 2012. 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, 2011.
FINANCIAL DATA (UNAUDITED) ON FOLLOWING PAGES
FINANCIAL DATA (UNAUDITED)
TRIUMPH GROUP, INC. AND SUBSIDIARIES
(in thousands, except per share data)
| Three Months Ended | Twelve Months Ended | ||||||||||||||||
| March 31, | March 31, | ||||||||||||||||
| CONDENSED STATEMENTS OF INCOME | 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Net sales | $ | 946,376 | $ | 919,086 | $ | 3,407,929 | $ | 2,905,348 | |||||||||
| Operating income, before acquisition and integration costs and curtailment gain | 145,483 | 109,662 | 480,657 | 334,938 | |||||||||||||
| Acquisition and integration costs | 2,644 | 1,252 | 6,342 | 20,902 | |||||||||||||
| Curtailment gain | (40,400 | ) | — | (40,400 | ) | — | |||||||||||
| Operating income | 183,239 | 108,410 | 514,715 | 314,036 | |||||||||||||
| Interest expense and other | 18,462 | 22,440 | 77,138 | 79,559 | |||||||||||||
| Income tax expense | 58,526 | 31,940 | 155,955 | 82,066 | |||||||||||||
| Income from continuing operations | 106,251 | 54,030 | 281,622 | 152,411 | |||||||||||||
| Loss from discontinued operations, net of tax | — | (1,687 | ) | (765 | ) | (2,512 | ) | ||||||||||
| Net income | $ | 106,251 | $ | 52,343 | $ | 280,857 | $ | 149,899 | |||||||||
| Earnings per share - basic: | |||||||||||||||||
| Income from continuing operations | $ | 2.16 | $ | 1.12 | $ | 5.77 | $ | 3.39 | |||||||||
| Loss from discontinued operations | — | (0.03 | ) | (0.02 | ) | (0.06 | ) | ||||||||||
| Net income | $ | 2.16 | $ | 1.09 | $ | 5.75 | $ | 3.33 | |||||||||
| Weighted average common shares outstanding - basic | 49,174 | 48,214 | 48,821 | 45,006 | |||||||||||||
| Earnings per share - diluted: | |||||||||||||||||
| Income from continuing operations | $ | 2.03 | $ | 1.05 | $ | 5.43 | $ | 3.21 | |||||||||
| Loss from discontinued operations | — | (0.03 | ) | (0.01 | ) | (0.05 | ) | ||||||||||
| Net income | $ | 2.03 | $ | 1.02 | $ | 5.41 | * | $ | 3.16 | ||||||||
| Weighted average common shares outstanding - diluted | 52,311 | 51,269 | 51,873 | 47,488 | |||||||||||||
| Dividends declared and paid per common share | $ | 0.04 | $ | 0.02 | $ | 0.14 | $ | 0.08 | |||||||||
| * | 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 | Unaudited | Audited | ||||||
| March 31, | �� | March 31, | ||||||
| 2012 | 2011 | |||||||
| Assets | ||||||||
| Cash and cash equivalents | $ | 29,662 | $ | 39,328 | ||||
| Accounts receivable, net | 440,608 | 374,491 | ||||||
| Inventory, net of unliquidated progress payments of $164,450 and $138,206 | 817,956 | 770,212 | ||||||
| Rotable assets | 34,554 | 26,607 | ||||||
| Prepaid and other current assets | 24,630 | 18,141 | ||||||
| Assets held for sale | — | 4,574 | ||||||
| Current assets | 1,347,410 | 1,233,353 | ||||||
| Property and equipment, net | 733,380 | 734,879 | ||||||
| Goodwill | 1,542,008 | 1,537,711 | ||||||
| Intangible assets, net | 829,675 | 859,620 | ||||||
| Other, net | 53,094 | 97,674 | ||||||
| Total assets | $ | 4,505,567 | $ | 4,463,237 | ||||
| Liabilities & Stockholders' Equity | ||||||||
| Current portion of long-term debt | $ | 142,237 | $ | 300,252 | ||||
| Accounts payable | 266,124 | 262,716 | ||||||
| Accrued expenses | 307,730 | 313,354 | ||||||
| Deferred income taxes | 99,809 | 78,793 | ||||||
| Liabilities related to assets held for sale | — | 431 | ||||||
| 815,900 | 955,546 | |||||||
| Long-term debt, less current portion | 1,016,625 | 1,011,752 | ||||||
| Accrued pension and post-retirement benefits, noncurrent | 700,127 | 690,218 | ||||||
| Deferred income taxes, noncurrent | 43,375 | 20 | ||||||
| Other noncurrent liabilities | 136,171 | 170,978 | ||||||
| Temporary equity | — | 2,506 | ||||||
| Stockholders' Equity: | ||||||||
| Common stock, $.001 par value, 100,000,000 shares authorized, 49,590,273 and 48,690,606 shares issued | 50 | 49 | ||||||
| Capital in excess of par value | 833,935 | 819,197 | ||||||
| Treasury stock, at cost, 58,533 and 177,184 shares | (1,716 | ) | (5,085 | ) | ||||
| Accumulated other comprehensive income | (9,306 | ) | 120,471 | |||||
| Retained earnings | 970,406 | 697,585 | ||||||
| Total stockholders' equity | 1,793,369 | 1,632,217 | ||||||
| Total liabilities and stockholders' equity | $ | 4,505,567 | $ | 4,463,237 | ||||
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FINANCIAL DATA (UNAUDITED)
TRIUMPH GROUP, INC. AND SUBSIDIARIES
(dollars in thousands)
| SEGMENT DATA | Three Months Ended | Twelve Months Ended | |||||||||||||||
| March 31, | March 31, | ||||||||||||||||
| 2012 | 2011 | 2012 | 2011 | ||||||||||||||
| Net Sales: | |||||||||||||||||
| Aerostructures | $ | 714,247 | $ | 703,461 | $ | 2,571,576 | $ | 2,126,040 | |||||||||
| Aerospace Systems | 151,724 | 147,809 | 551,800 | 513,435 | |||||||||||||
| Aftermarket Services | 83,120 | 69,536 | 292,674 | 272,728 | |||||||||||||
| Elimination of inter-segment sales | (2,715 | ) | (1,720 | ) | (8,121 | ) | (6,855 | ) | |||||||||
| $ | 946,376 | $ | 919,086 | $ | 3,407,929 | $ | 2,905,348 | ||||||||||
| Operating Income (Loss): | |||||||||||||||||
| Aerostructures | $ | 119,004 | $ | 91,146 | $ | 403,414 | $ | 267,783 | |||||||||
| Aerospace Systems | 26,351 | 22,359 | 90,035 | 75,292 | |||||||||||||
| Aftermarket Services | 10,966 | 6,996 | 31,859 | 28,774 | |||||||||||||
| Corporate | 26,918 | 2 | (12,091 | ) | (10,593 | ) | 2 | (57,813 | ) | ||||||||
| $ | 183,239 | 1 | $ | 108,410 | 3 | $ | 514,715 | 1 | $ | 314,036 | 3 | ||||||
| Depreciation and Amortization: | |||||||||||||||||
| Aerostructures | $ | 22,855 | $ | 24,562 | $ | 89,113 | $ | 69,451 | |||||||||
| Aerospace Systems | 4,400 | 4,445 | 17,363 | 17,183 | |||||||||||||
| Aftermarket Services | 2,285 | 2,615 | 9,487 | 11,101 | |||||||||||||
| Corporate | 1,120 | 506 | 3,761 | 1,922 | |||||||||||||
| $ | 30,660 | $ | 32,128 | $ | 119,724 | $ | 99,657 | ||||||||||
| Amortization of Acquired Contract Liabilities: | |||||||||||||||||
| Aerostructures | $ | (8,180 | ) | $ | (10,389 | ) | $ | (26,684 | ) | $ | (29,214 | ) | |||||
| Capital Expenditures: | |||||||||||||||||
| Aerostructures | $ | 26,114 | $ | 14,810 | $ | 64,633 | $ | 57,390 | |||||||||
| Aerospace Systems | 4,224 | 2,909 | 14,747 | 11,534 | |||||||||||||
| Aftermarket Services | 3,078 | 1,454 | 8,682 | 4,656 | |||||||||||||
| Corporate | 1,871 | 2,161 | 5,907 | 16,445 | |||||||||||||
| $ | 35,287 | $ | 21,334 | $ | 93,969 | $ | 90,025 | ||||||||||
| 1 | Includes $2,644 and $6,342 of acquisition and integration expenses primarily associated with the acquisition of Vought, for the three and twelve months ended March 31, 2012, respectively. | |||
| 2 | Includes $40,400 of net curtailment gain due to defined benefit plan amendments for the three and twelve months ended March 31, 2012. | |||
| 3 | Includes $1,252 and $20,902 of acquisition and integration expenses associated with the acquisition of Vought for the three and twelve months ended March 31, 2011, respectively. | |||
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FINANCIAL DATA (UNAUDITED)
TRIUMPH GROUP, INC. AND SUBSIDIARIES
(dollars in thousands)
Non-GAAP Financial Measure Disclosures
We prepare and publicly release quarterly unaudited financial statements prepared in accordance with GAAP. In accordance with Securities and Exchange Commission (the "SEC") guidance on Compliance and Disclosure Interpretations, we also disclose and discuss certain non-GAAP financial measures in our public releases. Currently, the non-GAAP financial measure that we disclose is EBITDA, which is our income from continuing operations before interest, income taxes, amortization of acquired contract liabilities, depreciation and amortization. We disclose EBITDA on a consolidated and an operating segment basis in our earnings releases, investor conference calls and filings with the SEC. The non-GAAP financial measures that we use may not be comparable to similarly titled measures reported by other companies. Also, in the future, we may disclose different non-GAAP financial measures in order to help our investors more meaningfully evaluate and compare our future results of operations to our previously reported results of operations.
We view EBITDA as an operating performance measure and, as such, we believe that the GAAP financial measure most directly comparable to it is income from continuing operations. In calculating EBITDA, we exclude from income from continuing operations the financial items that we believe should be separately identified to provide additional analysis of the financial components of the day-to-day operation of our business. We have outlined below the type and scope of these exclusions and the material limitations on the use of these non-GAAP financial measures as a result of these exclusions. EBITDA is not a measurement of financial performance under GAAP and should not be considered as a measure of liquidity, as an alternative to net income (loss), income from continuing operations, or as an indicator of any other measure of performance derived in accordance with GAAP. Investors and potential investors in our securities should not rely on EBITDA as a substitute for any GAAP financial measure, including net income (loss) or income from continuing operations. In addition, we urge investors and potential investors in our securities to carefully review the reconciliation of EBITDA to income from continuing operations set forth below, in our earnings releases and in other filings with the SEC and to carefully review the GAAP financial information included as part of our Quarterly Reports on Form 10-Q and our Annual Reports on Form 10-K that are filed with the SEC, as well as our quarterly earnings releases, and compare the GAAP financial information with our EBITDA.
EBITDA is used by management to internally measure our operating and management performance and by investors as a supplemental financial measure to evaluate the performance of our business that, when viewed with our GAAP results and the accompanying reconciliation, we believe provides additional information that is useful to gain an understanding of the factors and trends affecting our business. We have spent more than 15 years expanding our product and service capabilities partially through acquisitions of complementary businesses. Due to the expansion of our operations, which included acquisitions, our income from continuing operations has included significant charges for depreciation and amortization. EBITDA excludes these charges and provides meaningful information about the operating performance of our business, apart from charges for depreciation and amortization. We believe the disclosure of EBITDA helps investors meaningfully evaluate and compare our performance from quarter to quarter and from year to year. We also believe EBITDA is a measure of our ongoing operating performance because the isolation of non-cash income and expenses, such as amortization of acquired contract liabilities, depreciation and amortization, and non-operating items, such as interest and income taxes, provides additional information about our cost structure, and, over time, helps track our operating progress. In addition, investors, securities analysts and others have regularly relied on EBITDA to provide a financial measure by which to compare our operating performance against that of other companies in our industry.
Set forth below are descriptions of the financial items that have been excluded from our income from continuing operations to calculate EBITDA and the material limitations associated with using this non-GAAP financial measure as compared to income from continuing operations:
| • | Amortization of acquired contract liabilities may be useful for investors to consider because it represents the non-cash earnings on the fair value of below market contracts acquired through the acquisition of Vought. We do not believe these earnings necessarily reflect the current and ongoing cash earnings related to our operations. |
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FINANCIAL DATA (UNAUDITED)
TRIUMPH GROUP, INC. AND SUBSIDIARIES
(dollars in thousands)
Non-GAAP Financial Measure Disclosures (continued)
| • | Amortization expenses may be useful for investors to consider because it represents the estimated attrition of our acquired customer base and the diminishing value of product rights and licenses. We do not believe these charges necessarily reflect the current and ongoing cash charges related to our operating cost structure. |
| • | Depreciation may be useful for investors to consider because they generally represent the wear and tear on our property and equipment used in our operations. We do not believe these charges necessarily reflect the current and ongoing cash charges related to our operating cost structure. |
| • | The amount of interest expense and other we incur may be useful for investors to consider and may result in current cash inflows or outflows. However, we do not consider the amount of interest expense and other to be a representative component of the day-to-day operating performance of our business. |
| • | Income tax expense may be useful for investors to consider because it generally represents the taxes which may be payable for the period and the change in deferred income taxes during the period and may reduce the amount of funds otherwise available for use in our business. However, we do not consider the amount of income tax expense to be a representative component of the day-to-day operating performance of our business. |
Management compensates for the above-described limitations of using non-GAAP measures by using a non-GAAP measure only to supplement our GAAP results and to provide additional information that is useful to gain an understanding of the factors and trends affecting our business.
The following table shows our EBITDA reconciled to our income from continuing operations for the indicated periods:
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| March 31, | March 31, | |||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA): | ||||||||||||||||
| Income from continuing operations | $ | 106,251 | $ | 54,030 | $ | 281,622 | $ | 152,411 | ||||||||
| Add-back: | ||||||||||||||||
| Income tax expense | 58,526 | 31,940 | 155,955 | 82,066 | ||||||||||||
| Interest expense and other | 18,462 | 22,440 | 77,138 | 79,559 | ||||||||||||
| Curtailment gain, net | (40,400 | ) | — | (40,400 | ) | — | ||||||||||
| Amortization of acquired contract liabilities | (8,180 | ) | (10,389 | ) | (26,684 | ) | (29,214 | ) | ||||||||
| Depreciation and amortization | 30,660 | 32,128 | 119,724 | 99,657 | ||||||||||||
| Earnings before Interest, Taxes, Depreciation and Amortization ("EBITDA") | $ | 165,319 | $ | 130,149 | $ | 567,355 | $ | 384,479 | ||||||||
| Net sales | $ | 946,376 | $ | 919,086 | $ | 3,407,929 | $ | 2,905,348 | ||||||||
| EBITDA Margin | 17.5 | % | 14.2 | % | 16.6 | % | 13.2 | % | ||||||||
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FINANCIAL DATA (UNAUDITED)
TRIUMPH GROUP, INC. AND SUBSIDIARIES
(dollars in thousands)
Non-GAAP Financial Measure Disclosures (continued)
| Three Months Ended March 31, 2012 | |||||||||||||||||||||
| Segment Data | |||||||||||||||||||||
| Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA): | Total | Aerostructures | Aerospace Systems | Aftermarket Services | Corporate/Eliminations | ||||||||||||||||
| Income from continuing operations | $ | 106,251 | |||||||||||||||||||
| Add-back: | |||||||||||||||||||||
| Income tax expense | 58,526 | ||||||||||||||||||||
| Interest expense and other | 18,462 | ||||||||||||||||||||
| Operating income | $ | 183,239 | $ | 119,004 | $ | 26,351 | $ | 10,966 | $ | 26,918 | |||||||||||
| Curtailment gain, net | (40,400 | ) | — | — | — | (40,400 | ) | ||||||||||||||
| Amortization of acquired contract liabilities | (8,180 | ) | (8,180 | ) | — | — | — | ||||||||||||||
| Depreciation and amortization | 30,660 | 22,855 | 4,400 | 2,285 | 1,120 | ||||||||||||||||
| Earnings (Losses) before Interest, Taxes, Depreciation and Amortization (EBITDA): | $ | 165,319 | $ | 133,679 | $ | 30,751 | $ | 13,251 | $ | (12,362 | ) | * | |||||||||
| Net sales | $ | 946,376 | $ | 714,247 | $ | 151,724 | $ | 83,120 | $ | (2,715 | ) | ||||||||||
| EBITDA Margin | 17.5% | 18.7% | 20.3% | 15.9% | n/a | ||||||||||||||||
| Twelve Months Ended March 31, 2012 | |||||||||||||||||||||
| Segment Data | |||||||||||||||||||||
| Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA): | Total | Aerostructures | Aerospace Systems | Aftermarket Services | Corporate/Eliminations | ||||||||||||||||
| Income from continuing operations | $ | 281,622 | |||||||||||||||||||
| Add-back: | |||||||||||||||||||||
| Income tax expense | 155,955 | ||||||||||||||||||||
| Interest expense and other | 77,138 | ||||||||||||||||||||
| Operating income (loss) | $ | 514,715 | $ | 403,414 | $ | 90,035 | $ | 31,859 | $ | (10,593 | ) | ||||||||||
| Curtailment gain, net | (40,400 | ) | — | — | — | (40,400 | ) | ||||||||||||||
| Amortization of acquired contract liabilities | (26,684 | ) | (26,684 | ) | — | — | — | ||||||||||||||
| Depreciation and amortization | 119,724 | 89,113 | 17,363 | 9,487 | 3,761 | ||||||||||||||||
| Earnings (Losses) before Interest, Taxes, Depreciation and Amortization ("EBITDA") | $ | 567,355 | $ | 465,843 | $ | 107,398 | $ | 41,346 | $ | (47,232 | ) | ** | |||||||||
| Net sales | $ | 3,407,929 | $ | 2,571,576 | $ | 551,800 | $ | 292,674 | $ | (8,121 | ) | ||||||||||
| EBITDA Margin | 16.6% | 18.1% | 19.5% | 14.1% | n/a | ||||||||||||||||
| * | Includes $2,644 of acquisition and integration expenses primarily associated with the acquisition of Vought. | |||
| * * | Includes $6,342 of acquisition and integration expenses primarily associated with the acquisition of Vought. | |||
-More-
(Continued)
FINANCIAL DATA (UNAUDITED)
TRIUMPH GROUP, INC. AND SUBSIDIARIES
(dollars in thousands)
Non-GAAP Financial Measure Disclosures (continued)
| Three Months Ended March 31, 2011 | |||||||||||||||||||||
| Segment Data | |||||||||||||||||||||
| Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA): | Total | Aerostructures | Aerospace Systems | Aftermarket Services | Corporate/Eliminations | ||||||||||||||||
| Income from continuing operations | $ | 54,030 | |||||||||||||||||||
| Add-back: | |||||||||||||||||||||
| Income tax expense | 31,940 | ||||||||||||||||||||
| Interest expense and other | 22,440 | ||||||||||||||||||||
| Operating income (loss) | $ | 108,410 | $ | 91,146 | $ | 22,359 | $ | 6,996 | $ | (12,091 | ) | ||||||||||
| Amortization of acquired contract liabilities | (10,389 | ) | (10,389 | ) | — | — | — | ||||||||||||||
| Depreciation and amortization | 32,128 | 24,562 | 4,445 | 2,615 | 506 | ||||||||||||||||
| Earnings (Losses) before Interest, Taxes, Depreciation and Amortization ("EBITDA") | $ | 130,149 | $ | 105,319 | $ | 26,804 | $ | 9,611 | $ | (11,585 | ) | * | |||||||||
| Net sales | $ | 919,086 | $ | 703,461 | $ | 147,809 | $ | 69,536 | $ | (1,720 | ) | ||||||||||
| EBITDA Margin | 14.2% | 15.0% | 18.1% | 13.8% | n/a | ||||||||||||||||
| Twelve Months Ended March 31, 2011 | |||||||||||||||||||||
| Segment Data | |||||||||||||||||||||
| Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA): | Total | Aerostructures | Aerospace Systems | Aftermarket Services | Corporate / Eliminations | ||||||||||||||||
| Income from continuing operations | $ | 152,411 | |||||||||||||||||||
| Add-back: | |||||||||||||||||||||
| Income tax expense | 82,066 | ||||||||||||||||||||
| Interest expense and other | 79,559 | ||||||||||||||||||||
| Operating income (loss) | $ | 314,036 | $ | 267,783 | $ | 75,292 | $ | 28,774 | $ | (57,813 | ) | ||||||||||
| Amortization of acquired contract liabilities | (29,214 | ) | (29,214 | ) | — | — | — | ||||||||||||||
| Depreciation and amortization | 99,657 | 69,451 | 17,183 | 11,101 | 1,922 | ||||||||||||||||
| Earnings (Losses) before Interest, Taxes, Depreciation and Amortization ("EBITDA") | $ | 384,479 | $ | 308,020 | $ | 92,475 | $ | 39,875 | $ | (55,891 | ) | * * | |||||||||
| Net sales | $ | 2,905,348 | $ | 2,126,040 | $ | 513,435 | $ | 272,728 | $ | (6,855 | ) | ||||||||||
| EBITDA Margin | 13.2% | 14.5% | 18.0% | 14.6% | n/a | ||||||||||||||||
| * | Includes $1,252 of integration expenses associated with the acquisition of Vought. | |||
| * * | Includes $20,902 of acquisition and integration expenses associated with the acquisition of Vought. | |||
(Continued)
FINANCIAL DATA (UNAUDITED)
TRIUMPH GROUP, INC. AND SUBSIDIARIES
(dollars in thousands)
Non-GAAP Financial Measure Disclosures (continued)
Operating income, income form continuing operations and income from continuing operations diluted per share, before acquisition and integration costs and curtailment gain has been provided for consistency and comparability. These measures should not be considered in isolation or as alternatives to operating income, income from continuing operations and income from continuing operations per diluted share presented in accordance with GAAP. The following table reconciles operating income, income from continuing operations and income from continuing operations per diluted share, before curtailment gain to the operating income, income from continuing operations and income from continuing operations per diluted share, respectively.
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| March 31, | March 31, | |||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Operating income, before acquisition and integration costs and curtailment gain | $ | 145,483 | $ | 109,662 | $ | 480,657 | $ | 334,938 | ||||||||
| Acquisition and integration costs | 2,644 | 1,252 | 6,342 | 20,902 | ||||||||||||
| Curtailment gain | (40,400 | ) | — | (40,400 | ) | — | ||||||||||
| Operating income | 183,239 | 108,410 | 514,715 | 314,036 | ||||||||||||
| Income from continuing operations, before acquisition and integration costs and curtailment gain | 81,898 | 54,816 | 259,648 | 168,090 | ||||||||||||
| Acquisition and integration costs, net of tax | 1,705 | 786 | 4,084 | 15,679 | ||||||||||||
| Curtailment gain, net of tax | (26,058 | ) | — | (26,058 | ) | — | ||||||||||
| Income from continuing operations | $ | 106,251 | $ | 54,030 | $ | 281,622 | $ | 152,411 | ||||||||
| Income from continuing operations, before acquisition & integration costs and curtailment gain per diluted share | $ | 1.57 | $ | 1.07 | $ | 5.01 | $ | 3.54 | ||||||||
| Acquisition and integration costs per diluted share | (0.03 | ) | (0.02 | ) | (0.08 | ) | (0.33 | ) | ||||||||
| Curtailment gain per diluted share | 0.50 | — | 0.50 | — | ||||||||||||
| Income from continuing operations per diluted share | $ | 2.03 | $ | 1.05 | $ | 5.43 | $ | 3.21 | ||||||||
| ^ Difference due to rounding. | ||||||||||||||||
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(Continued)
FINANCIAL DATA (UNAUDITED)
TRIUMPH GROUP, INC. AND SUBSIDIARIES
(dollars in thousands)
Non-GAAP Financial Measure Disclosures (continued)
Cash provided by operations, before pension contributions has been provided for consistency and comparability. We also use free cash flow available for debt reduction as a key factor in planning for and consideration of strategic acquisitions, stock repurchases and the repayment of debt. This measure should not be considered in isolation, as a measure of residual cash flow available for discretionary purposes, or as an alternative to operating results presented in accordance with GAAP. The following table reconciles cash provided by operations, before pension contributions to cash provided by operations, as well as cash provided by operations to free cash flow available for debt reduction.
| Twelve Months Ended | ||||||||
| March 31, | ||||||||
| 2012 | 2011 | |||||||
| Cash provided by operations, before pension contributions | $ | 349,112 | $ | 277,106 | ||||
| Pension contributions | 121,907 | 134,802 | ||||||
| Cash provided by operations | 227,205 | 142,304 | ||||||
| Less: | ||||||||
| Capital expenditures | 93,969 | 90,025 | ||||||
| Dividends | 6,899 | 3,574 | ||||||
| Free cash flow available for debt reduction | $ | 126,337 | $ | 48,705 | ||||
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, | |||||||
| 2012 | 2011 | |||||||
| Calculation of Net Debt | ||||||||
| Current portion | $ | 142,237 | $ | 300,252 | ||||
| Long-term debt | 1,016,625 | 1,011,752 | ||||||
| Total debt | 1,158,862 | 1,312,004 | ||||||
| Less: Cash | 29,662 | 39,328 | ||||||
| Net debt | $ | 1,129,200 | $ | 1,272,676 | ||||
| Calculation of Capital | ||||||||
| Net debt | $ | 1,129,200 | $ | 1,272,676 | ||||
| Stockholders' equity | 1,793,369 | 1,632,217 | ||||||
| Total capital | $ | 2,922,569 | $ | 2,904,893 | ||||
| Percent of net debt to capital | 38.6 | % | 43.8 | % | ||||
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