BERWYN, Pa.--(BUSINESS WIRE)--
Triumph Group, Inc. (NYSE:TGI) (“Triumph” or the “Company”)
today reported financial results for its fourth quarter and full fiscal
year ended March 31, 2017.
Fourth Quarter and Full Fiscal Year 2017
Highlights
-
Net sales were $919.9 million for fourth quarter fiscal year 2017.
-
Operating income for fourth quarter fiscal year 2017 was $150.8
million, reflecting an operating margin of 16% that excludes a $266.3
million non-cash charge for the impairment of goodwill for Triumph
Aerospace Structures.
-
Net income for fourth quarter fiscal year 2017 was $139.5 million, or
$2.81 per diluted share, excluding the aforementioned impairment
charge.
-
Fourth quarter fiscal year 2017 results also included transformation
related costs of $14.5 million.
-
Cash flow from operations for fourth quarter fiscal year 2017 was
$454.0 million, and free cash flow was $498.3 million, both of which
included an increase in customer advances of approximately $324.0
million.
-
For the full fiscal year 2017, sales were $3.5 billion, adjusted
earnings per diluted share were $6.54 and free cash flow was $315.7
million.
“Our fourth quarter performance and year-end results reflect continued
strength in Integrated Systems and Product Support, improved
profitability in Precision Components, as well as mutually-beneficial
contract amendments in our Aerospace Structures business,” said Daniel
J. Crowley, Triumph’s president and chief executive officer. “Over the
past four quarters, we continued to improve program performance and
rebuild customer confidence, leading to new business opportunities in
both commercial and defense markets. As a result of our One Triumph
transformation strategy, we realized new operational and go-to-market
efficiencies, growing our backlog sequentially as a result of our
enhanced business development efforts. At the same time, we are
addressing the operational and financial challenges in Aerospace
Structures to better position this business unit for the future.”
“Under our transformation plan, we delivered three consecutive quarters
of improved free cash flow and exceeded our fiscal year 2017 cost
reduction goals, realizing $69 million in savings which will benefit
future years. We anticipate an incremental $70 million in cost savings
in fiscal year 2018. Looking ahead, we will continue to enhance
shareholder value from a stronger backlog and improved performance
across the business.”
Fourth Quarter Fiscal Year 2017 Overview
Net sales for the fourth quarter of fiscal year 2017 declined 13% from
the prior year quarter. On an organic basis, excluding the impact of
divestitures, sales were down 13% primarily due to production rate
reductions by customers on the 747-8, C-17 and G450/550 programs,
changes in model mix, decreased volume in military end market and
foreign exchange rates. These factors were partially offset by increased
production rates on the 767/Tanker program and stronger organic sales in
the Product Support segment resulting from key contract wins with
regional and commercial operators for structures and interiors.
Operating income included $14.5 million of restructuring costs and an
impairment charge of $266.3 million. Cumulative catch-up adjustments on
long-term contracts were a net favorable $72.7 million, which included
the benefit of positive adjustments related to the 747-8 program.
Net loss for the fourth quarter of fiscal year 2017 was $126.8 million,
or a loss of $2.57 per share. Triumph’s results included the following:
|
|
|
| |
| |
|
|
| |
| |
|
|
| |
| |
($ millions except EPS) | | | |
|
| Pre-tax | | | |
|
| After-tax | | | |
|
| Diluted EPS |
Loss from Continuing Operations - GAAP | | | | $ | | (140.3 | ) | | | | $ | | (126.8 | ) | | | | $ | | (2.57 | ) |
Triumph Aerospace Structures – Goodwill impairment
| | | | | |
266.3
| | | | | | |
266.3
| | | | | | |
5.38
| |
| | | | | | | | | | | | | | | | | |
|
Income from Continuing Operations ex-goodwill impairment | | | | $ | | 126.0 | | | | | $ | | 139.5 | | | | | $ | | 2.81 | |
| | | | | | | | | | | | | | | | | |
|
Transformation related costs: | | | | | | | | | | | | | | | | | | |
Restructuring costs (non-cash)
| | | | | |
0.5
| | | | | | |
0.5
| | | | | | |
0.01
| |
Restructuring costs (cash)
| | | | | |
14.0
| | | | | | |
12.9
| | | | | | |
0.27
| |
| | | | | | | | | | | | | | | | | |
|
Adjusted Income from Continuing Operations - non-GAAP | | | | $ |
| 140.5 |
| | | | $ |
| 152.8 |
| | | | $ |
| 3.09 |
|
| | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | |
|
Net loss for fiscal year 2017 was $43.0 million or a loss of $0.87 per
share and included the following:
| |
|
|
| |
| |
|
|
| |
| |
|
|
| |
| |
($ millions except EPS) | | | | |
|
| Pre-tax | | | |
|
| After-tax | | | |
|
| Diluted EPS |
Loss from Continuing Operations - GAAP | | | | | $ | | (23.6 | ) | | | | $ | | (43.0 | ) | | | | $ | | (0.87 | ) |
Triumph Aerospace Structures – Goodwill impairment
| | | | | | |
266.3
| | | | | | |
266.3
| | | | | | |
5.39
| |
Loss on divestitures
| | | | | | |
19.1
| | | | | | |
18.0
| | | | | | |
0.36
| |
| | | | | | | | | | | | | | | | | | |
|
Income from Continuing Operations ex-goodwill impairment &
divestitures | | | | $ | | 261.8 | | | | | $ | | 241.3 | | | | | $ | | 4.88 | |
| | | | | | | | | | | | | | | | | | |
|
Transformation related costs: | | | | | | | | | | | | | | | | | | | |
Restructuring costs (non-cash)
| | | | | | |
10.7
| | | | | | |
9.9
| | | | | | |
0.20
| |
Restructuring costs (cash)
| | | | | | |
42.2
| | | | | | |
38.8
| | | | | | |
0.79
| |
| | | | | | | | | | | | | | | | | | |
|
Other previously announced adjustments: | | | | | | | | | | | | | | | | | | | |
Triumph Precision Components – Strike related Costs
| | | | | | |
15.7
| | | | | | |
14.5
| | | | | | |
0.29
| |
Triumph Precision Components – Inventory write-down
| | | | | | |
6.1
| | | | | | |
5.6
| | | | | | |
0.11
| |
Triumph Aerospace Structures – UAS program
| | | | | | |
14.2
| | | | | | |
13.1
| | | | | | |
0.26
| |
| | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | |
|
Adjusted Income from Continuing Operations - non-GAAP | | | | | $ |
| 350.7 |
| | | | $ |
| 323.2 |
| | | | $ |
| 6.54 |
|
| | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | |
|
The number of shares used in computing diluted earnings per share for
the fourth quarter of fiscal year 2017 was 49.4 million.
For the quarter ended March 31, 2017, cash flow from operations was
$454.0 million, which included approximately $324.0 million of increases
in customer advances. Excluding these increases in customer advances,
cash flow from operations was $130.0 million, a sequential improvement
from a cash use of $41.4 million resulting from strong working capital
management partially offset by continued investment in key development
programs and restructuring efforts. As previously announced, on May 5,
2017, Triumph reached an agreement with its lender group on amendments
to its credit agreement to provide the Company with greater financial
flexibility as it continues executing its transformation plan.
Outlook
Based on anticipated aircraft production rates and divestitures
completed in fiscal year 2017, the Company forecasts revenue for fiscal
year 2018 to be approximately $3.1 to $3.2 billion, and to increase in
fiscal year 2019 as development programs enter into production and sales
from new wins offset sunsetting programs. The Company will provide
additional fiscal year 2018 guidance when it has analyzed the impact of
recently settled contracts and has greater visibility regarding the
timing of ongoing customer negotiations.
Commenting on the outlook, Mr. Crowley said, “During fiscal 2018, we
will demonstrate follow-through on our comprehensive efforts in fiscal
2017 to streamline our structure, reduce costs, resolve contract issues,
and grow our backlog. We remain focused on performing to our commitments
and enhancing our customer relationships which we expect to lead to
improving profitability, stronger free cash flow and, ultimately,
greater value for our shareholders.”
Conference Call
Triumph Group will hold a conference call today, May 24th at
8:30 a.m. (ET) to discuss the fourth quarter fiscal year 2017 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 24th to
May 30th by calling (855) 859-2056 (Domestic) or (404)
537-3406 (International), passcode #20731746.
About Triumph Group
Triumph Group, Inc., headquartered in Berwyn, Pennsylvania, designs,
engineers, manufactures, repairs and overhauls a broad portfolio of
aircraft structures, 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 www.triumphgroup.com.
Forward Looking Statements
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 financial and operational
performance, revenues, earnings per share, cash flow cost savings and
operational efficiencies and organizational restructurings. 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 Group’s reports
filed with the SEC, including our Annual Report on Form 10-K for the
fiscal year ended March 31, 2016.
FINANCIAL DATA (UNAUDITED) ON FOLLOWING 10 PAGES
|
|
FINANCIAL DATA (UNAUDITED) |
| | | | |
|
| |
|
| |
|
| |
|
| |
TRIUMPH GROUP, INC. AND SUBSIDIARIES |
(in thousands, except per share data) |
| | | | | | | | | | | | | | | |
|
| | | | | | | Three Months Ended March 31, | | | Twelve Months Ended March 31, |
| | | | | | | | |
| | | | | | | | | | | | | | | |
|
CONDENSED STATEMENTS OF INCOME | | | | |
| 2017 |
| | |
| 2016 |
| | |
| 2017 |
| | |
| 2016 |
|
| | | | | | | | | | | | | | | |
|
Net sales
| | |
$
|
919,914
| | | |
$
|
1,057,794
| | | |
$
|
3,532,799
| | | |
$
|
3,886,072
| |
| | | | | | | | | | | | | | | |
|
Operating (loss) income
| | | | | |
(115,489
|
)
| | | |
(1,182,769
|
)
| | | |
56,889
| | | | |
(1,091,106
|
)
|
| | | | | | | | | | | | | | | |
|
Interest expense and other
| | | | | |
24,781
| | | | |
18,502
| | | | |
80,501
| | | | |
68,041
| |
Income tax (benefit) expense
| | | | |
|
(13,445
|
)
| | |
|
(117,616
|
)
| | |
|
19,340
|
| | |
|
(111,187
|
)
|
| | | | | | | | | | | | | | | |
|
Net loss
| | | | | |
$
|
(126,825
|
)
| | |
$
|
(1,083,655
|
)
| | |
$
|
(42,952
|
)
| | |
$
|
(1,047,960
|
)
|
| | | | | | | | | | | | | | | |
|
Earnings per share - basic:
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
|
Net loss
| | | | | |
$
|
(2.57
|
)
| | |
$
|
(22.01
|
)
| | |
$
|
(0.87
|
)
| | |
$
|
(21.29
|
)
|
| | | | | | | | | | | | | | | |
|
Weighted average common shares outstanding - basic
| | | |
|
49,350
|
| | |
|
49,239
|
| | |
|
49,303
|
| | |
|
49,218
|
|
| | | | | | | | | | | | | | | |
|
Earnings per share - diluted:
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
|
Net loss
| | | | | |
$
|
(2.57
|
)
| | |
$
|
(22.01
|
)
| | |
$
|
(0.87
|
)
| | |
$
|
(21.29
|
)
|
| | | | | | | | | | | | | | | |
|
Weighted average common shares outstanding - diluted
| | | |
|
49,350
|
| | |
|
49,239
|
| | |
|
49,303
|
| | |
|
49,218
|
|
| | | | | | | | | | | | | | | |
|
Dividends declared and paid per common share
| | | | |
$
|
0.04
|
| | |
$
|
0.04
|
| | |
$
|
0.16
|
| | |
$
|
0.16
|
|
|
|
FINANCIAL DATA (UNAUDITED) |
|
| | | |
| |
|
|
|
|
|
| |
| |
TRIUMPH GROUP, INC. AND SUBSIDIARIES |
(dollars in thousands, except per share data) |
| | | | | | | | | | | | | | |
|
BALANCE SHEET | | | | | | | | | | | Unaudited | | Audited |
| | | | | | | | | | | | | March 31, | | March 31, |
| | | | | | | | | | | | |
| 2017 |
| |
| 2016 |
|
Assets |
|
Cash and cash equivalents
| | | | | | | | | | |
$
|
69,633
| | |
$
|
20,984
| |
|
Accounts receivable, net
| | | | | | | | | | | |
311,792
| | | |
444,208
| |
|
Inventory, net of unliquidated progress payments of $222,485 and
$123,155 | | | | | | | |
1,340,175
| | | |
1,236,190
| |
|
Prepaid and other current assets
| | | | | | | | | | | |
30,064
| | | |
41,259
| |
|
Assets held for sale
| | | | | | | | | | |
|
21,255
|
| |
|
-
|
|
| |
Current assets
| | | | | | | | | | | |
1,772,919
| | | |
1,742,641
| |
| | | | | | | | | | | | | | |
|
|
Property and equipment, net
| | | | | | | | | | | |
805,030
| | | |
889,734
| |
| Goodwill | | | | | | | | | | | |
1,142,605
| | | |
1,444,254
| |
|
Intangible assets, net
| | | | | | | | | | | |
592,364
| | | |
649,612
| |
|
Other, net
| | | | | | | | | | |
|
101,682
|
| |
|
108,852
|
|
| | | | | | | | | | | | | | |
|
|
Total assets
| | | | | | | | | | |
$
|
4,414,600
|
| |
$
|
4,835,093
|
|
| | | | | | | | | | | | | | |
|
Liabilities & Stockholders' Equity |
| | | | | | | | | | | | | | |
|
|
Current portion of long-term debt
| | | | | | | | | | |
$
|
160,630
| | |
$
|
42,441
| |
|
Accounts payable
| | | | | | | | | | | |
481,243
| | | |
410,225
| |
|
Accrued expenses
| | | | | | | | | | | |
674,379
| | | |
683,208
| |
|
Liabilities related to assets held for sale
| | | | | | | | | | |
|
18,008
|
| |
|
-
|
|
| |
Current liabilities
| | | | | | | | | | | |
1,334,260
| | | |
1,135,874
| |
| | | | | | | | | | | | | | |
|
|
Long-term debt, less current portion
| | | | | | | | | | | |
1,035,670
| | | |
1,374,879
| |
|
Accrued pension and post-retirement benefits, noncurrent
| | | | | | | | | |
592,134
| | | |
664,664
| |
|
Deferred income taxes, noncurrent
| | | | | | | | | | | |
68,107
| | | |
62,453
| |
|
Other noncurrent liabilities
| | | | | | | | | | | |
537,956
| | | |
662,279
| |
| | | | | | | | | | | | | | |
|
|
Stockholders' Equity:
| | | | | | | | | | | | | |
| |
Common stock, $.001 par value, 100,000,000 shares
| | | | | | | | | | | |
| |
authorized, 52,460,920 and 52,460,920 shares issued
| | | | | | | | | |
51
| | | |
51
| |
| |
Capital in excess of par value
| | | | | | | | | | | |
846,807
| | | |
851,102
| |
| | Treasury stock, at cost, 2,887,891 and 3,131,921 shares
| | | | | | | | | |
(183,696
|
)
| | |
(199,415
|
)
|
| |
Accumulated other comprehensive loss
| | | | | | | | | | |
(396,178
|
)
| | |
(347,162
|
)
|
| |
Retained earnings
| | | | | | | | | | |
|
579,489
|
| |
|
630,368
|
|
| |
Total stockholders' equity
| | | | | | | | | | |
|
846,473
|
| |
|
934,944
|
|
| | | | | | | | | | | | | | |
|
|
Total liabilities and stockholders' equity
| | | | | | | | | | |
$
|
4,414,600
|
| |
$
|
4,835,093
|
|
| | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | |
|
|
|
FINANCIAL DATA (UNAUDITED) |
| | |
|
|
|
|
| |
|
| |
|
| |
|
| |
TRIUMPH GROUP, INC. AND SUBSIDIARIES |
(dollars in thousands) |
| | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | |
|
SEGMENT DATA | | | | | | Three Months Ended | | | Twelve Months Ended |
| | | | | | | | March 31, | | | March 31, |
| | | | | | | | | | | | | | | | |
|
| | | | | | | |
| 2017 |
| | |
| 2016 |
| | |
| 2017 |
| | |
| 2016 |
|
| | | | | | | | | | | | | | | | |
|
Net sales:
| | | | | | | | | | | | | | | | |
|
Integrated Systems
| | | | | |
$
|
282,002
| | | |
$
|
302,802
| | | |
$
|
1,040,805
| | | |
$
|
1,094,703
| |
|
Aerospace Structures
| | | | | | |
338,751
| | | | |
423,620
| | | | |
1,294,865
| | | | |
1,550,850
| |
|
Precision Components
| | | | | | |
247,565
| | | | |
280,357
| | | | |
987,919
| | | | |
1,061,607
| |
|
Product Support
| | | | | | |
81,008
| | | | |
84,745
| | | | |
338,325
| | | | |
311,394
| |
|
Elimination of inter-segment sales
| | | | | |
|
(29,412
|
)
| | |
|
(33,730
|
)
| | |
|
(129,115
|
)
| | |
|
(132,482
|
)
|
| | | | | | | |
$
|
919,914
|
| | |
$
|
1,057,794
|
| | |
$
|
3,532,799
|
| | |
$
|
3,886,072
|
|
| | | | | | | | | | | | | | | | |
|
Operating income (loss):
| | | | | | | | | | | | | | | |
|
Integrated Systems
| | | | | |
$
|
55,915
| | | |
$
|
66,671
| | | |
$
|
201,294
| | | |
$
|
220,649
| |
|
Aerospace Structures
| | | | | | |
(166,708
|
)
| | | |
(1,222,182
|
)
| | | |
(108,811
|
)
| | | |
(1,354,640
|
)
|
|
Precision Components
| | | | | | |
11,099
| | | | |
1,266
| | | | |
18,322
| | | | |
75,734
| |
|
Product Support
| | | | | | |
12,815
| | | | |
(6,537
|
)
| | | |
55,801
| | | | |
24,977
| |
|
Corporate
| | | | | |
|
(28,610
|
)
| | |
|
(21,987
|
)
| | |
|
(109,717
|
)
| | |
|
(57,826
|
)
|
| | | | | | | |
$
|
(115,489
|
)
| | |
$
|
(1,182,769
|
)
| | |
$
|
56,889
|
| | |
$
|
(1,091,106
|
)
|
| | | | | | | | | | | | | | | | |
|
Operating Margin %
| | | | | | | | | | | | | | | |
|
Integrated Systems
| | | | | | |
19.8
|
%
| | | |
22.0
|
%
| | | |
19.3
|
%
| | | |
20.2
|
%
|
|
Aerospace Structures
| | | | | | |
-49.2
|
%
| | | |
-288.5
|
%
| | | |
-8.4
|
%
| | | |
-87.3
|
%
|
|
Precision Components
| | | | | | |
4.5
|
%
| | | |
0.5
|
%
| | | |
1.9
|
%
| | | |
7.1
|
%
|
|
Product Support
| | | | | | |
15.8
|
%
| | | |
-7.7
|
%
| | | |
16.5
|
%
| | | |
8.0
|
%
|
|
Consolidated
| | | | | | |
-12.6
|
%
| | | |
-111.8
|
%
| | | |
1.6
|
%
| | | |
-28.1
|
%
|
| | | | | | | | | | | | | | | | |
|
Depreciation and amortization:
| | | | | | | | | | | | | | | |
|
Integrated Systems
| | | | | |
$
|
10,104
| | | |
$
|
11,170
| | | |
$
|
40,332
| | | |
$
|
42,486
| |
|
Aerospace Structures
| | | | | | |
284,236
| | | | |
661,032
| | | | |
338,525
| | | | |
937,877
| |
|
Precision Components
| | | | | | |
11,545
| | | | |
19,502
| | | | |
53,889
| | | | |
59,102
| |
|
Product Support
| | | | | | |
1,807
| | | | |
3,657
| | | | |
9,037
| | | | |
11,009
| |
|
Corporate
| | | | | |
|
472
|
| | |
|
418
|
| | |
|
1,461
|
| | |
|
1,642
|
|
| | | | | | | |
$
|
308,164
|
| | |
$
|
695,779
|
| | |
$
|
443,244
|
| | |
$
|
1,052,116
|
|
| | | | | | | | | | | | | | | | |
|
Amortization of acquired contract liabilities:
| | | | | | | | | | | | | | | |
|
Integrated Systems
| | | | | |
$
|
(9,659
|
)
| | |
$
|
(11,269
|
)
| | |
$
|
(36,760
|
)
| | |
$
|
(41,585
|
)
|
|
Aerospace Structures
| | | | | | |
(21,615
|
)
| | | |
(20,485
|
)
| | | |
(81,805
|
)
| | | |
(87,524
|
)
|
|
Precision Components
| | | | | |
|
(699
|
)
| | |
|
(682
|
)
| | |
|
(2,439
|
)
| | |
|
(3,254
|
)
|
| | | | | | | |
$
|
(31,973
|
)
| | |
$
|
(32,436
|
)
| | |
$
|
(121,004
|
)
| | |
$
|
(132,363
|
)
|
| | | | | | | | | | | | | | | | |
|
Capital expenditures:
| | | | | | | | | | | | | | | |
|
Integrated Systems
| | | | | |
$
|
7,901
| | | |
$
|
7,833
| | | |
$
|
16,487
| | | |
$
|
28,142
| |
|
Aerospace Structures
| | | | | | |
4,787
| | | | |
4,102
| | | | |
14,607
| | | | |
27,596
| |
|
Precision Components
| | | | | | |
4,787
| | | | |
3,644
| | | | |
15,827
| | | | |
20,623
| |
|
Product Support
| | | | | | |
610
| | | | |
653
| | | | |
2,630
| | | | |
2,700
| |
|
Corporate
| | | | | |
|
624
|
| | |
|
452
|
| | |
|
2,281
|
| | |
|
986
|
|
| | | | | | | |
$
|
18,709
|
| | |
$
|
16,684
|
| | |
$
|
51,832
|
| | |
$
|
80,047
|
|
| | | | | | | | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | |
|
|
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 Adjusted EBITDA, which is our net income before
interest, income taxes, amortization of acquired contract
liabilities, curtailments, settlements and early retirement
incentives, legal settlements, depreciation and amortization. We
disclose Adjusted 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 Adjusted EBITDA as an operating performance measure and as
such we believe that the GAAP financial measure most directly
comparable to it is net income. In calculating Adjusted EBITDA, we
exclude from net income 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. Adjusted 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 Adjusted 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 Adjusted EBITDA to net income 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 Adjusted EBITDA.
Adjusted 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 net income has included significant charges for
depreciation and amortization. Adjusted 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 Adjusted EBITDA
helps investors meaningfully evaluate and compare our performance
from quarter to quarter and from year to year. We also believe
Adjusted 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
Adjusted 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 net income to
calculate Adjusted EBITDA and the material limitations associated
with using this non-GAAP financial measure as compared to net
income:
|
-
Divestitures may be useful for investors to consider because they
reflect gains or losses from sale of operating units. We do not
believe these earnings necessarily reflect the current and ongoing
cash earnings related to our operations.
-
Legal settlements may be useful to investors to consider because they
reflect gains or losses from disputes with third parties. We do not
believe that these earnings necessarily reflect the current and
ongoing cash earnings related to our operations.
-
Curtailments, settlements and early retirement incentives may be
useful to investors to consider because it represents the current
period impact of the change in defined benefit obligation due to the
reduction in future service costs. We do not believe these charges
(gains) necessarily reflect the current and ongoing cash earnings
related to our 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
acquisitions. We do not believe these earnings necessarily reflect the
current and ongoing cash earnings related to our operations.
-
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.
|
FINANCIAL DATA (UNAUDITED) |
|
|
TRIUMPH GROUP, INC. AND SUBSIDIARIES |
(dollars in thousands) |
|
|
Non-GAAP Financial Measure Disclosures (continued) |
|
|
• |
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 Adjusted EBITDA reconciled to our net
income for the indicated periods (in thousands):
|
|
|
| | |
|
|
| |
|
| |
|
| |
|
| |
| | | | | | | Three Months Ended | | | Twelve Months Ended |
| | | | | | | March 31, | | | March 31, |
| | | | | | |
| 2017 |
| | |
| 2016 |
| | |
| 2017 |
| | |
| 2016 |
|
Adjusted Earnings before Interest, Taxes, Depreciation
and Amortization (EBITDA): | | | | | | | | | |
|
Net Loss
| | | | |
$
|
(126,825
|
)
| | |
$
|
(1,083,655
|
)
| | |
$
|
(42,952
|
)
| | |
$
|
(1,047,960
|
)
|
| | | | | | | | | | | | | | | |
|
|
Add-back:
| | | | | | | | | | | | | | |
|
Income Tax (Benefit) Expense
| | | | | |
(13,445
|
)
| | | |
(117,616
|
)
| | | |
19,340
| | | | |
(111,187
|
)
|
|
Interest Expense and Other
| | | | | |
24,781
| | | | |
18,502
| | | | |
80,501
| | | | |
68,041
| |
|
Curtailment Gain
| | | | | |
-
| | | | |
(4,107
|
)
| | | |
-
| | | | |
(1,244
|
)
|
|
Loss on divestitures
| | | | | |
-
| | | | |
-
| | | | |
19,124
| | | | |
-
| |
|
Legal Settlement (Gain) Charge, net
| | | | | |
-
| | | | |
(6,924
|
)
| | | |
-
| | | | |
5,476
| |
|
Amortization of Acquired Contract Liabilities
| | | | |
(31,973
|
)
| | | |
(32,436
|
)
| | | |
(121,004
|
)
| | | |
(132,363
|
)
|
|
Depreciation and Amortization
| | | | |
|
308,164
|
| | |
|
695,779
|
| | |
|
443,244
|
| | |
|
1,052,116
|
|
| | | | | | | | | | | | | | | |
|
|
Adjusted Earnings (Losses) before Interest, Taxes,
| | | | | | | | | | | | | |
|
Depreciation and Amortization ("Adjusted EBITDA")
| | | |
$
|
160,702
|
| | |
$
|
(530,457
|
)
| | |
$
|
398,253
|
| | |
$
|
(167,121
|
)
|
| | | | | | | | | | | | | | | |
|
| Net Sales | | | | |
$
|
919,914
|
| | |
$
|
1,057,794
|
| | |
$
|
3,532,799
|
| | |
$
|
3,886,072
|
|
| | | | | | | | | | | | | | | |
|
|
Adjusted EBITDA Margin
| | | | |
|
18.1
|
%
| | |
|
-51.7
|
%
| | |
|
11.7
|
%
| | |
|
-4.5
|
%
|
| | | | | | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | |
|
|
|
FINANCIAL DATA (UNAUDITED) |
| | |
| |
|
| | | | | | | | | |
TRIUMPH GROUP, INC. AND SUBSIDIARIES |
(dollars in thousands) |
| | | | | | | | | | | | | | |
|
Non-GAAP Financial Measure Disclosures (continued) | | | | | | | | | | | |
| | | | | | | | | | | | | | |
|
Adjusted Earnings before Interest, Taxes, Depreciation
and Amortization (EBITDA): | | | Three Months Ended March 31, 2017 |
| | | | | | | Segment Data |
| | | | Total | | | Integrated Systems | Aerospace Structures | Precision Components | Product Support | Corporate / Eliminations |
| | | | | | | | | | | | | | |
|
Net Loss
| | |
$
|
(126,825
|
)
| | | | | | | | | | | |
| | | | | | | | | | | | | | |
|
Add-back:
| | | | | | | | | | | | | | |
Income Tax Benefit
| | |
(13,445
|
)
| | | | | | | | | | | |
Interest Expense and Other
| | | 24,781 | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
|
Operating (Loss) Income
| |
$
|
(115,489
|
)
| | |
$
|
55,915
| | |
$
|
(166,708
|
)
| |
$
|
11,099
| | |
$
|
12,815
| | |
$
|
(28,610
|
)
|
| | | | | | | | | | | | | | |
|
Amortization of Acquired Contract Liabilities
| | |
(31,973
|
)
| | | |
(9,659
|
)
| | |
(21,615
|
)
| | |
(699
|
)
| | |
-
| | | |
-
| |
Depreciation and Amortization
| | | 308,164 | | | | | 10,104 | | | | 284,236 | | | | 11,545 | | | | 1,807 | | | | 472 | |
| | | | | | | | | | | | | | |
|
Adjusted Earnings (Losses) before Interest, Taxes,
| | | | | | | | | | | |
Depreciation and Amortization ("Adjusted EBITDA")
| | $ | 160,702 |
| | | $ | 56,360 |
| | $ | 95,913 |
| | $ | 21,945 |
| | $ | 14,622 |
| | $ | (28,138 | ) |
| | | | | | | | | | | | | | |
|
Net Sales | | | $ | 919,914 |
| | | $ | 282,002 |
| | $ | 338,751 |
| | $ | 247,565 |
| | $ | 81,008 |
| | $ | (29,412 | ) |
| | | | | | | | | | | | | | |
|
Adjusted EBITDA Margin
| | | 18.1 | % | | | | 20.7 | % | | | 30.2 | % | | | 8.9 | % | | | 18.1 | % | | | n/a | |
| | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | |
|
Adjusted Earnings before Interest, Taxes, Depreciation
and Amortization (EBITDA): | | | Twelve Months Ended March 31, 2017 |
| | | | | | | Segment Data |
| | | | Total | | | Integrated Systems | Aerospace Structures | Precision Components | Product Support | Corporate / Eliminations |
| | | | | | | | | | | | | | |
|
Net Loss
| | |
$
|
(42,952
|
)
| | | | | | | | | | | |
| | | | | | | | | | | | | | |
|
Add-back:
| | | | | | | | | | | | | | |
Income Tax Expense
| | |
19,340
| | | | | | | | | | | | |
Interest Expense and Other
| |
| 80,501 |
| | | | | | | | | | | |
| | | | | | | | | | | | | | |
|
Operating Income (Loss)
| |
$
|
56,889
| | | |
$
|
201,294
| | |
$
|
(108,811
|
)
| |
$
|
18,322
| | |
$
|
55,801
| | |
$
|
(109,717
|
)
|
| | | | | | | | | | | | | | |
|
Loss on divestitures
| | |
19,124
| | | | |
-
| | | |
-
| | | |
-
| | | |
-
| | | |
19,124
| |
Amortization of Acquired Contract Liabilities
| | |
(121,004
|
)
| | | |
(36,760
|
)
| | |
(81,805
|
)
| | |
(2,439
|
)
| | |
-
| | | |
-
| |
Depreciation and Amortization
| |
| 443,244 |
| | |
| 40,332 |
| |
| 338,525 |
| |
| 53,889 |
| |
| 9,037 |
| |
| 1,461 |
|
| | | | | | | | | | | | | | |
|
Adjusted Earnings (Losses) before Interest, Taxes,
| | | | | | | | | | | |
Depreciation and Amortization ("Adjusted EBITDA")
| | $ | 398,253 |
| | | $ | 204,866 |
| | $ | 147,909 |
| | $ | 69,772 |
| | $ | 64,838 |
| | $ | (89,132 | ) |
| | | | | | | | | | | | | | |
|
Net Sales | | | $ | 3,532,799 |
| | | $ | 1,040,805 |
| | $ | 1,294,865 |
| | $ | 987,919 |
| | $ | 338,325 |
| | $ | (129,115 | ) |
| | | | | | | | | | | | | | |
|
Adjusted EBITDA Margin
| | | 11.7 | % | | | | 20.4 | % | | | 12.2 | % | | | 7.1 | % | | | 19.2 | % | | | n/a | |
| | | | | | | | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | |
|
|
| | | | | | | | | | |
| | | | | | | | | | |
|
FINANCIAL DATA (UNAUDITED) |
| | | | | | | | | | | | | |
TRIUMPH GROUP, INC. AND SUBSIDIARIES |
(dollars in thousands) |
| | | | | | | | | | | | |
|
Non-GAAP Financial Measure Disclosures (continued) | | | | | | | | | |
Adjusted Earnings before Interest, Taxes, Depreciation
and Amortization (EBITDA): | | Three Months Ended March 31, 2016 |
| | | | | Segment Data |
| | | | Total | Integrated Systems | Aerospace Structures | Precision Components | Product Support | Corporate / Eliminations |
| | | | | | | | | | | | |
|
Net Loss
| | |
$
|
(1,083,655
|
)
| | | | | | | | | |
| | | | | | | | | | | | |
|
Add-back:
| | | | | | | | | | | | |
Income Tax Benefit
| | |
(117,616
|
)
| | | | | | | | | |
Interest Expense and Other
| |
| 18,502 |
| | | | | | | | | |
| | | | | | | | | | | | |
|
Operating (Loss) Income
| |
$
|
(1,182,769
|
)
|
$
|
66,671
| | |
$
|
(1,222,182
|
)
| |
$
|
1,266
| | |
$
|
(6,537
|
)
| |
$
|
(21,987
|
)
|
| | | | | | | | | | | | |
|
Curtailment gain
| | |
(4,107
|
)
| |
-
| | | |
-
| | | |
-
| | | |
-
| | | |
(4,107
|
)
|
Legal settlement (gain) charge, net
| | |
(6,924
|
)
| |
(8,494
|
)
| | |
-
| | | |
1,570
| | | |
-
| | | |
-
| |
Amortization of Acquired Contract Liabilities
| | |
(32,436
|
)
| |
(11,269
|
)
| | |
(20,485
|
)
| | |
(682
|
)
| | |
-
| | | |
-
| |
Depreciation and Amortization
| |
| 695,779 |
|
| 11,170 |
| |
| 661,032 |
| |
| 19,502 |
| |
| 3,657 |
| |
| 418 |
|
| | | | | | | | | | | | |
|
Adjusted (Losses) Earnings before Interest, Taxes,
| | | | | | | | | |
Depreciation and Amortization ("Adjusted EBITDA")
| | $ | (530,457 | ) | $ | 58,078 |
| | $ | (581,635 | ) | | $ | 21,656 |
| | $ | (2,880 | ) | | $ | (25,676 | ) |
| | | | | | | | | | | | |
|
Net Sales | | | $ | 1,057,794 |
| $ | 302,802 |
| | $ | 423,620 |
| | $ | 280,357 |
| | $ | 84,745 |
| | $ | (33,730 | ) |
| | | | | | | | | | | | |
|
Adjusted EBITDA Margin
| |
| -51.7 | % |
| 19.9 | % | |
| -144.3 | % | |
| 7.7 | % | |
| -3.4 | % | |
| n/a |
|
| | | | | | | | | | | | |
|
| | | | | | | | | | | | |
|
Adjusted Earnings before Interest, Taxes, Depreciation
and Amortization (EBITDA): | | Twelve Months Ended March 31, 2016 |
| | | | | Segment Data |
| | | | Total | Integrated Systems | Aerospace Structures | Precision Components | Product Support | Corporate / Eliminations |
| | | | | | | | | | | | |
|
Net Loss
| | |
$
|
(1,047,960
|
)
| | | | | | | | | |
| | | | | | | | | | | | |
|
Add-back:
| | | | | | | | | | | | |
Income Tax Benefit
| | |
(111,187
|
)
| | | | | | | | | |
Interest Expense and Other
| |
| 68,041 |
| | | | | | | | | |
| | | | | | | | | | | | |
|
Operating (Loss) Income
| |
$
|
(1,091,106
|
)
|
$
|
220,649
| | |
$
|
(1,354,640
|
)
| |
$
|
75,734
| | |
$
|
24,977
| | |
$
|
(57,826
|
)
|
| | | | | | | | | | | | |
|
Curtailment charge, net
| | |
(1,244
|
)
| |
-
| | | |
-
| | | |
-
| | | |
-
| | | |
(1,244
|
)
|
Legal settlement charge (gain), net
| | |
5,476
| | |
(8,494
|
)
| | |
10,500
| | | |
1,570
| | | |
1,900
| | | |
-
| |
Amortization of Acquired Contract Liabilities
| | |
(132,363
|
)
| |
(41,585
|
)
| | |
(87,524
|
)
| | |
(3,254
|
)
| | |
-
| | | |
-
| |
Depreciation and Amortization
| |
| 1,052,116 |
|
| 42,486 |
| |
| 937,877 |
| |
| 59,102 |
| |
| 11,009 |
| |
| 1,642 |
|
| | | | | | | | | | | | |
|
Adjusted (Losses) Earnings before Interest, Taxes,
| | | | | | | | | |
Depreciation and Amortization ("Adjusted EBITDA")
| | $ | (167,121 | ) | $ | 213,056 |
| | $ | (493,787 | ) | | $ | 133,152 |
| | $ | 37,886 |
| | $ | (57,428 | ) |
| | | | | | | | | | | | |
|
Net Sales | | | $ | 3,886,072 |
| $ | 1,094,703 |
| | $ | 1,550,850 |
| | $ | 1,061,607 |
| | $ | 311,394 |
| | $ | (132,482 | ) |
| | | | | | | | | | | | |
|
Adjusted EBITDA Margin
| | | -4.5 | % | | 20.2 | % | | | -33.7 | % | | | 12.6 | % | | | 12.2 | % | | | n/a | |
| | | | | | | | | | |
|
| | | | | | | | | | |
|
|
|
FINANCIAL DATA (UNAUDITED) |
|
| | | |
| |
| | |
TRIUMPH GROUP, INC. AND SUBSIDIARIES |
(dollars in thousands) |
| | | | | | | | |
|
Non-GAAP Financial Measure Disclosures (continued) | | | | | | |
| | | | | | | | |
|
Adjusted income from continuing operations before income taxes,
adjusted income from continuing operations and adjusted
|
income from continuing operations diluted per share, before
non-recurring costs has been provided for consistency and
comparability.
|
These measures should not be considered in isolation or as
alternatives to income from continuing operations before income
taxes,
|
income from continuing operations and income from continuing
operations per diluted share presented in accordance with GAAP.
|
The following table reconciles income from continuing operations
before income taxes, income from continuing operations and
|
income from continuing operations per diluted share, before
non-recurring costs.
| | | |
| | | | | | | | |
|
| | | | Three Months Ended |
| | | | March 31, 2017 |
| | | | Pre-tax | | After-tax | | Diluted EPS | |
| | | | | | | | |
|
Loss from Continuing Operations- GAAP
| |
$
|
(140,270
|
)
| |
$
|
(126,825
|
)
| |
$
|
(2.57
|
)
| |
Triumph Aerospace Structures - Goodwill impairment
|
|
266,298
|
| |
|
266,298
|
| |
|
5.38
|
| |
Income from Continuing Operations ex-goodwill impairment
| |
126,028
| | | |
139,473
| | | |
2.81
| | |
| | | | | | | | |
|
Transformation related costs: | | | | | | | |
Restructuring costs (non-cash)
| | |
501
| | | |
461
| | | |
0.01
| | |
Restructuring costs (cash)
| |
|
13,997
|
| |
|
12,882
|
| |
|
0.26
|
| |
| | | | | | | | |
|
Adjusted Income from Continuing Operations- non-GAAP
|
$
|
140,526
|
| |
$
|
152,816
|
| |
$
|
3.09
|
|
*
|
| | | | | | | | |
|
| | | | | | | | |
|
| | | | Twelve Months Ended |
| | | | March 31, 2017 |
| | | | Pre-tax | | After-tax | | Diluted EPS | |
| | | | | | | | |
|
Loss from Continuing Operations- GAAP
| |
$
|
(23,612
|
)
| |
$
|
(42,952
|
)
| |
$
|
(0.87
|
)
| |
Triumph Aerospace Structures - Goodwill impairment
| |
266,298
| | | |
266,298
| | | |
5.39
| | |
Loss on divestitures
| |
|
19,124
|
| |
|
17,980
|
| |
|
0.36
|
| |
Income from Continuing Operations ex-goodwill impairment &
divestitures
| |
261,810
| | | |
241,326
| | | |
4.88
| | |
| | | | | | | | |
|
Transformation related costs: | | | | | | | |
Restructuring costs (non-cash)
| | |
10,797
| | | |
9,937
| | | |
0.20
| | |
Restructuring costs (cash)
| | |
42,177
| | | |
38,816
| | | |
0.79
| | |
Other adjustments: | | | | | | | |
Triumph Precision Components - Strike related costs
| |
15,701
| | | |
14,450
| | | |
0.29
| | |
Triumph Precision Components - Inventory write-down
| |
6,089
| | | |
5,604
| | | |
0.11
| | |
Triumph Aerospace Structures - UAS program
| |
|
14,200
|
| |
|
13,068
|
| |
|
0.26
|
| |
| | | | | | | | |
|
Adjusted Income from Continuing Operations- non-GAAP
|
$
|
350,774
|
| |
$
|
323,201
|
| |
$
|
6.54
|
|
*
|
|
* Difference due to rounding
| | | | | | | |
| | | | | | | |
|
| | | | | | | |
|
|
|
FINANCIAL DATA (UNAUDITED) |
| | | |
| |
| | |
| | |
| | |
| |
TRIUMPH GROUP, INC. AND SUBSIDIARIES |
(dollars in thousands) |
| | | | | | | | | | | | | | | |
|
Non-GAAP Financial Measure Disclosures (continued) | | | | | | | | | | | | | |
| | | | | Three Months Ended | | | | | |
| | | | | March 31, 2016 | | | | | |
| | | | | Pre-tax | | After-tax | | | Diluted EPS | | | | | | |
| | | | | | | | | | | | | | | |
|
Loss from Continuing Operations- GAAP
| | |
$
|
(1,201,271
|
)
| |
$
|
(1,083,655
|
)
| | |
$
|
(22.01
|
)
| | | | | | |
Adjustments: | | | | | | | | | | | | | | |
Triumph Aerospace Structures - Goodwill/Tradename impairment
| | |
645,161
| | | |
596,054
| | | | |
12.08
| | | | | | | |
Triumph Aerospace Structures - Bombardier impairment
| | |
399,758
| | | |
246,428
| | | | |
5.00
| | | | | | | |
Triumph Aerospace Structures - 747-8 forward loss ^
| | |
161,400
| | | |
99,494
| | | | |
2.02
| | | | | | | |
Restructuring charges
| | | |
75,596
| | | |
46,601
| | | | |
0.94
| | | | | | | |
Other inventory impairments
| | | |
34,353
| | | |
21,177
| | | | |
0.43
| | | | | | | |
Legal settlements, net
| | | |
(6,924
|
)
| | |
(4,268
|
)
| | | |
(0.09
|
)
| | | | | | |
Curtailment gain
| | | |
(4,107
|
)
| | |
(2,532
|
)
| | | |
(0.05
|
)
| | | | | | |
Valuation allowance
| | |
| |
|
146,045
|
| | |
|
2.96
|
| | | | | | |
| | | | | | | | | | | | | | | |
|
Adjusted Income from Continuing Operations- non-GAAP
| |
$
|
103,966
|
| |
$
|
65,344
|
| | |
$
|
1.32
|
|
*
| | | | | |
| | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | |
|
| | | | | Twelve Months Ended | | | | | |
| | | | | March 31, 2016 | | | | | |
| | | | | Pre-tax | | After-tax | | | Diluted EPS | | | | | | |
| | | | | | | | | | | | | | | |
|
Loss from Continuing Operations- GAAP
| | |
$
|
(1,159,147
|
)
| |
$
|
(1,047,960
|
)
| | |
$
|
(21.29
|
)
| | | | | | |
Adjustments: | | | | | | | | | | | | | | |
Triumph Aerospace Structures - Goodwill/Tradename impairment
| | |
874,361
| | | |
745,584
| | | | |
15.12
| | | | | | | |
Triumph Aerospace Structures - Bombardier impairment
| | |
399,758
| | | |
246,428
| | | | |
5.00
| | | | | | | |
Triumph Aerospace Structures - 747-8 forward loss ^
| | |
161,400
| | | |
99,494
| | | | |
2.02
| | | | | | | |
Restructuring charges
| | | |
80,956
| | | |
49,905
| | | | |
1.01
| | | | | | | |
Other inventory impairments
| | | |
34,353
| | | |
21,177
| | | | |
0.43
| | | | | | | |
Legal settlements, net
| | | |
5,476
| | | |
3,376
| | | | |
0.07
| | | | | | | |
Curtailment (gain) loss
| | | |
(1,244
|
)
| | |
767
| | | | |
0.02
| | | | | | | |
Valuation allowance
| | |
| |
|
146,045
|
| | |
|
2.96
|
| | | | | | |
| | | | | | | | | | | | | | | |
|
Adjusted Income from Continuing Operations- non-GAAP
| |
$
|
395,913
|
| |
$
|
264,816
|
| | |
$
|
5.37
|
|
*
| | | | | |
|
*
|
Difference due to rounding.
| | | | | | | | | | | | | | |
|
^
|
FY 16 747-8 forward loss was driven by customer imposed production
rate reductions; operational and contractual improvements
|
| |
in FY 17 resulted in partial reversals of this reserve and have not
been removed from adjusted earnings in FY 17.
|
The following table reconciles our Operating income to Adjusted
Operating income as noted above.
| | | | | | |
| | | | | | | | | | | | | | | |
|
| | | | | | | Three Months Ended | | | Twelve Months Ended |
| | | | | | | March 31, 2017 | | March 31, 2016 | | March 31, 2017 | | March 31, 2016 |
Operating (Loss) Income - GAAP
| | | | |
$
|
(115,489
|
)
| | |
$
|
(1,182,769
|
)
| | |
$
|
56,889
| | |
$
|
(1,091,106
|
)
|
Adjustments: | | | | | | | | | | | | | | |
Goodwill & tradename impairments
| | | | | |
266,298
| | | | |
645,161
| | | | |
266,298
| | | |
874,361
| |
Triumph Aerospace Structures - Bombardier impairment
| | | | |
-
| | | | |
399,758
| | | | |
-
| | | |
399,758
| |
Triumph Aerospace Structures - 747-8 forward loss
| | | | |
-
| | | | |
161,400
| | | | |
-
| | | |
161,400
| |
Restructuring costs (non-cash)
| | | | | |
501
| | | | |
21,224
| | | | |
10,797
| | | |
23,724
| |
Restructuring costs (cash)
| | | | | |
13,997
| | | | |
54,372
| | | | |
42,177
| | | |
57,232
| |
Loss on divestitures
| | | | | |
-
| | | | |
-
| | | | |
19,124
| | | |
-
| |
Triumph Precision Components - Strike related costs
| | | | |
-
| | | | |
-
| | | | |
15,701
| | | |
-
| |
Other inventory impairments
| | | | | |
-
| | | | |
34,353
| | | | |
20,289
| | | |
34,353
| |
Legal settlements, net
| | | | | |
-
| | | | |
(6,924
|
)
| | | |
-
| | | |
5,476
| |
Curtailment gain
| | | | |
|
-
|
| | |
|
(4,107
|
)
| | |
|
-
| | |
|
(1,244
|
)
|
Adjusted Operating Income-non-GAAP
| | | | |
$
|
165,307
|
| | |
$
|
122,468
|
| | |
$
|
431,275
| | |
$
|
463,954
|
|
| | | | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | |
|
| |
|
| |
| |
| | | | | |
|
FINANCIAL DATA (UNAUDITED) |
|
| | | | | | | |
TRIUMPH GROUP, INC. AND SUBSIDIARIES |
(dollars in thousands) |
| | | | | | | |
|
Non-GAAP Financial Measure Disclosures (continued) | | | | | |
| | | | | | | |
|
Cash provided by operations, is provided for consistency and
comparability. We also use free cash flow as a key factor in
|
planning for and consideration of strategic acquisitions 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 to free cash flow.
|
| | | | | | | |
|
| | | | | | Twelve Months Ended |
| | | | | | March 31, |
| | | | | |
| 2017 |
| |
| 2016 |
|
| | | | | | | |
|
|
Cash flow from operations
| | | |
$
|
281,319
| | |
$
|
83,863
| |
| Less: | | | | | | |
|
Capital expenditures
| | | | |
(51,832
|
)
| | |
(80,047
|
)
|
|
Sale of assets
| | | | |
16,823
| | | |
-
| |
|
Sale of businesses
| | | |
|
69,364
|
| |
|
-
|
|
|
Free cash flow
| | | | | | |
| | | | | |
$
|
315,674
|
| |
$
|
3,816
|
|
| | | | | | | |
|
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, |
| | | | | |
| 2017 |
| | 2016 |
| | | | | | | |
|
| | Calculation of Net Debt | | | | | | |
| |
Current portion
| | | |
$
|
160,630
| | |
$
|
42,441
| |
| |
Long-term debt
| | | |
|
1,035,670
|
| |
|
1,374,879
|
|
| |
Total debt
| | | | |
1,196,300
| | | |
1,417,320
| |
| |
Plus: Deferred debt issuance costs
| | | | |
11,752
| | | |
8,971
| |
| |
Less: Cash
| | | |
|
(69,633
|
)
| |
|
(20,984
|
)
|
| |
Net debt
| | | |
$
|
1,138,419
|
| |
$
|
1,405,307
|
|
| | | | | | | |
|
| | Calculation of Capital | | | | | | |
| |
Net debt
| | | |
$
|
1,138,419
| | |
$
|
1,405,307
| |
| |
Stockholders' equity
| | | |
|
846,473
|
| |
|
934,944
|
|
| |
Total capital
| | | |
$
|
1,984,892
|
| |
$
|
2,340,251
|
|
| | | | | | | |
|
| |
Percent of net debt to capital
| | | | |
57.4
|
%
| | |
60.0
|
%
|
| | | | | | | |
|
| | | | | | | |
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20170524005480/en/
Triumph Group, Inc.
Media:
Michele
Long, 610-251-1000
[email protected]
or
Investor
Relations:
Sheila G. Spagnolo, 610-251-1000
[email protected]
Source: Triumph Group, Inc.