Exhibit 99.1
NEWS RELEASE
Contact:
John Bartholdson
Senior Vice President,
Chief Financial Officer
Phone (610) 251-1000
jbartholdson@triumphgroup.com
TRIUMPH GROUP REPORTS SECOND QUARTER FISCAL 2004 RESULTS
Wayne, PA – October 30, 2003 – For the second quarter of fiscal 2004, Triumph Group, Inc. (NYSE:TGI) delivered solid results despite difficult market conditions.
Sales from continuing operations for the second quarter of fiscal 2004 totaled $145.1 million, a three percent increase from last year’s second quarter sales of $141.3 million. Income from continuing operations was $7.9 million, or $0.50 per diluted common share compared to $9.8 million, or $0.62 per diluted common share for the same period last year. Net income was $7.3 million, or $0.46 per diluted common share, compared to net income of $10.1 million, or $0.63 per diluted common share last year. During the quarter, the Company generated $16.4 million of cash flow from operating activities.
Sales from continuing operations in the first six months of fiscal 2004 were $285.7 million, a two percent increase compared to $281.1 million last year. Income from continuing operations in the first six months of fiscal 2004 was $15.6 million, or $0.98 per diluted common share, compared to $19.5 million, or $1.22 per diluted common share for the same period in fiscal 2003. Net income was $14.4 million, or $0.90 per diluted common share, compared to net income of $20.1 million, or $1.26 per diluted common share in the prior year period.
Richard C. Ill, Triumph’s President and Chief Executive Officer, said, “While we continue to be impacted by weak demand and pricing pressures in the aerospace and power generation markets, the results from continuing operations for the second quarter represent a solid performance with increased sales and positive cash flow. Our strong military OEM and aftermarket sales and our ability to maintain market share in the commercial OEM, business and regional jet businesses serve to mitigate the prevailing weakness in the commercial aviation industry.”
Mr. Ill further stated, “The current quarter’s results include approximately $2.0 million of favorable tax adjustments resulting from the completion of income tax audits through our fiscal year 2000.”
“While we continue to operate in a demanding market environment, we remain focused on continuing to improve operational efficiency and reduce costs, expand the products and capabilities we offer to our customers and sustain our strong cash flow to invest in future organic growth.” Mr. Ill continued. “As a result of the above-mentioned earnings and our outlook for the balance of the year, we expect fully diluted earnings from continuing operations to be between $2.00 and $2.25 per common share.”
Triumph Group, Inc., headquartered in Wayne, Pennsylvania, designs, engineers, manufactures, repairs and overhauls aircraft components and industrial gas turbine components and accessories. The Company serves a broad, worldwide spectrum of the aviation industry, including commercial airlines and air cargo carriers, as well as original equipment manufacturers of aircraft and aircraft components and power generation equipment.
More information about Triumph can be found on the Internet at http://www.triumphgroup.com.
Statements which are not historical facts, including statements regarding the Company’s ability to maintain market share, improve efficiencies, reduce costs, expand products and capabilities, sustain cash flow, and achieve earnings within any particular range, are forward-looking statements under the provision of the Private Securities Litigation Reform Act of 1995. All forward-looking statements involve risks and uncertainties including statements regarding the outlook for continued opportunities for future growth. The Company wishes to caution readers that several important factors 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 Form 10-K for the year ended March 31, 2003.
FINANCIAL DATA (UNAUDITED) ON FOLLOWING 3 PAGES
FINANCIAL DATA (UNAUDITED)
TRIUMPH GROUP, INC. AND SUBSIDIARIES
(in thousands, except per share data)
CONDENSED STATEMENTS OF INCOME
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| Three Months Ended |
| Six Months Ended |
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| 2003 |
| 2002 |
| 2003 |
| 2002 |
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Net Sales |
| $ | 145,116 |
| $ | 141,328 |
| $ | 285,745 |
| $ | 281,117 |
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Operating Income |
| 12,103 |
| 18,623 |
| 26,776 |
| 36,874 |
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Interest Expense and Other |
| 2,942 |
| 3,360 |
| 5,775 |
| 6,642 |
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Income Tax Expense |
| 1,245 |
| 5,419 |
| 5,448 |
| 10,733 |
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Income from Continuing Operations |
| 7,916 |
| 9,844 |
| 15,553 |
| 19,499 |
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(Loss) Income from Discontinued Operations |
| (627 | ) | 211 |
| (1,184 | ) | 602 |
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Net Income |
| $ | 7,289 |
| $ | 10,055 |
| $ | 14,369 |
| $ | 20,101 |
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Earnings Per Share - Basic: |
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Income from Continuing Operations |
| $ | 0.50 |
| $ | 0.62 |
| $ | 0.98 |
| $ | 1.23 |
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(Loss) Income from Discontinued Operations |
| $ | (0.04 | ) | $ | 0.01 |
| $ | (0.07 | ) | $ | 0.04 |
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Net Income |
| $ | 0.46 |
| $ | 0.63 |
| $ | 0.91 |
| $ | 1.27 |
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Weighted average common shares outstanding - Basic |
| 15,836 |
| 15,836 |
| 15,836 |
| 15,827 |
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Earnings Per Share - Diluted: |
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Income from Continuing Operations |
| $ | 0.50 |
| $ | 0.62 |
| $ | 0.98 |
| $ | 1.22 |
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(Loss) Income from Discontinued Operations |
| $ | (0.04 | ) | $ | 0.01 |
| $ | (0.07 | ) | $ | 0.04 |
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Net Income |
| $ | 0.46 |
| $ | 0.63 |
| $ | 0.90 | * | $ | 1.26 |
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Weighted average common shares outstanding - Diluted |
| 15,904 |
| 15,940 |
| 15,894 |
| 15,965 |
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* difference due to rounding. |
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OTHER SELECTED INFORMATION |
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Continuing Operations: |
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Depreciation and Amortization |
| $ | 6,632 |
| $ | 5,824 |
| $ | 13,111 |
| $ | 11,816 |
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Capital Expenditures |
| $ | 7,006 |
| $ | 8,791 |
| $ | 14,217 |
| $ | 13,944 |
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(in thousands)
BALANCE SHEET
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| September 30, |
| March 31, |
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Assets |
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Cash |
| $ | 7,174 |
| $ | 8,583 |
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Accounts Receivable, net |
| 106,707 |
| 106,841 |
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Inventory |
| 205,599 |
| 196,343 |
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Assets held for sale |
| 26,202 |
| 27,883 |
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Prepaids and Other |
| 6,476 |
| 3,549 |
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Current Assets |
| 352,158 |
| 343,199 |
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Fixed Assets, net |
| 222,455 |
| 215,832 |
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Goodwill |
| 271,026 |
| 260,467 |
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Intangible Assets, net |
| 28,916 |
| 31,055 |
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Other |
| 15,432 |
| 13,615 |
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Total Assets |
| $ | 889,987 |
| $ | 864,168 |
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Liabilities & Stockholders’ Equity |
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Accounts Payable |
| $ | 48,588 |
| $ | 47,466 |
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Accrued Expenses and Other |
| 42,535 |
| 44,808 |
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Liabilities related to assets held for sale |
| 5,883 |
| 6,361 |
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Income Taxes Payable |
| 4,716 |
| 3,231 |
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Deferred Income Taxes |
| 1,585 |
| 1,585 |
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Current Portion of Long-Term Debt |
| 2,298 |
| 7,831 |
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Current Liabilities |
| 105,605 |
| 111,282 |
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Long-Term Debt, less current portion |
| 212,366 |
| 191,692 |
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Deferred Income Taxes and Other |
| 61,542 |
| 66,209 |
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Stockholders’ Equity: |
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Common Stock, $.001 par value, 50,000,000 shares authorized, 16,027,324 shares issued |
| 16 |
| 16 |
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Capital in excess of par value |
| 259,299 |
| 258,675 |
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Treasury Stock, at cost, 180,860 and 183,260 shares |
| (4,490 | ) | (4,549 | ) | ||
Accumulated other comprehensive income |
| 980 |
| 543 |
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Retained earnings |
| 254,669 |
| 240,300 |
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Total Stockholders’ Equity |
| 510,474 |
| 494,985 |
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Total Liabilities and Stockholders’ Equity |
| $ | 889,987 |
| $ | 864,168 |
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(in thousands, except per share data)
Non-GAAP Financial Measure Disclosures
Earnings before Interest, Taxes, Depreciation and Amortization (“EBITDA”) for the three months ended September 30, 2003 was $18.7 million with a margin of 12.9%. EBITDA for the three months ended September 30, 2002 was $24.4 million with a margin of 17.3%. EBITDA for the six months ended September 30, 2003 was $39.9 million with a margin of 14.0%. EBITDA for the six months ended September 30, 2002 was $48.7 million with a margin of 17.3%.
Management believes that EBITDA provides investors with an important perspective on the current underlying performance of the business by identifying non-cash expenses, interest and taxes included in income from continuing operations.
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.
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| Three Months Ended |
| Six Months Ended |
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| 2003 |
| 2002 |
| 2003 |
| 2002 |
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Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA): |
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Income from Continuing Operations |
| 7,916 |
| 9,844 |
| 15,553 |
| 19,499 |
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Add-back: |
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Income Tax Expense |
| 1,245 |
| 5,419 |
| 5,448 |
| 10,733 |
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Interest Expense and Other |
| 2,942 |
| 3,360 |
| 5,775 |
| 6,642 |
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Depreciation and Amortization |
| 6,632 |
| 5,824 |
| 13,111 |
| 11,816 |
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Earnings before Interest, Taxes, Depreciation and Amortization (“EBITDA”) |
| 18,735 |
| 24,447 |
| 39,887 |
| 48,690 |
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Net Sales |
| 145,116 |
| 141,328 |
| 285,745 |
| 281,117 |
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EBITDA Margin |
| 12.9 | % | 17.3 | % | 14.0 | % | 17.3 | % |
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