News Releases

Triumph Group Reports Second Quarter Fiscal 2017 Results

November 3, 2016 at 6:00 AM EDT

Reaffirms Fiscal Year 2017 EPS and Cash Guidance

BERWYN, Pa.--(BUSINESS WIRE)--Nov. 3, 2016-- Triumph Group, Inc. (NYSE:TGI) (“Triumph” or the “Company”) today reported financial results for its second quarter of fiscal year 2017, which ended September 30, 2016.

Second Quarter Fiscal 2017 Results

  • Net sales were $874.8 million.
  • Operating income was $70.5 million; excluding adjustments of $19.0 million, operating income was $89.5 million, reflecting an operating margin of 10.2%.
  • Net income was $34.8 million, or $0.70 per diluted share; excluding the aforementioned adjustments, net income was $49.4 million, or $1.00 per diluted share.
  • Cash used in operations was $47.2 million, an improvement from $84.0 million in the first quarter of fiscal 2017.
  • Free cash flow use was $49.3 million, an improvement from $95.9 million in the first quarter of fiscal 2017.
  • Updates fiscal 2017 revenue guidance to $3.5 to $3.6 billion from $3.6 to $3.7 billion.
  • Reaffirms earnings per diluted share guidance of $3.15 to $3.45 and cash use guidance of $100.0 million to $120.0 million.

“Triumph Group’s adjusted second quarter results were in line with our expectations and reflected improved sequential cash performance and continued strong operating margins in Integrated Systems and Product Support,” stated Daniel J. Crowley, Triumph’s president and chief executive officer. “During the quarter, our pipeline and backlog grew, and we continued to strengthen our business development efforts to drive organic growth.”

“We made significant progress on our One Triumph transformation strategy initiatives during the quarter. We have achieved $22.0 million savings year-to-date towards our total year target of $44.0 million. Additionally, we initiated all five of the planned fiscal year 2017 plant consolidations to reduce support costs and decreased our facility footprint by approximately 400,000 square feet. We are right-sizing our workforce to be in line with both the business base and our productivity gains, and are on track to our target of 1,200 headcount reductions for the fiscal year. These are difficult steps to take, but we believe that they are ultimately in the best interest of our Company and our shareholders. Finally, we successfully divested one business in the second quarter and are on track for our portfolio optimization actions.”

“We continue to stabilize our performance towards our imperative of becoming predictably profitable. We are confident in the strategy we’ve laid out and our entire organization is focused on its execution to deliver value to our shareholders.”

Second Quarter Fiscal 2017 Overview

Net sales for the fiscal second quarter of 2017 declined 8.4% from the prior year quarter, including $9.5 million of incremental sales from the October 2015 acquisition of Fairchild Controls. On an organic basis, sales were down 9.4% primarily due to production rate reductions by customers on the 747-8, G450/550 and C-17 programs, price reductions due to change in model mix, decreased demand in commercial rotorcraft and spares aftermarket and fluctuations in foreign currency exchange rates. These factors were partially offset by increased production rates on the A350 program and stronger sales in the Product Support segment resulting from increased demand from regional jet and cargo customers.

Operating income included $14.2 million of restructuring costs and a $4.8 million loss on divestiture. Cumulative catch-up adjustments on long term contracts were balanced between positive and negative variances compared to a net unfavorable cumulative catch-up adjustment of $28.0 million in the first quarter of fiscal year 2017.

Net income for the second quarter of fiscal year 2017 was $34.8 million, or $0.70 per diluted share. Triumph’s results included the following:

             
($ million except EPS) Pre-Tax After Tax Diluted EPS
Income from Operations (GAAP) $ 52.6 $ 34.8 $ 0.70
Adjustments:
Loss on Divestiture 4.8 4.8 0.10
Restructuring Costs (non-cash) 3.7 2.6 0.05
Restructuring Costs (cash) 10.5 7.2 0.15
 
Adjusted Income from Operations (Non GAAP) $ 71.6 $ 49.4 $ 1.00
 

The number of shares used in computing diluted earnings per share for the second quarter of fiscal year 2017 was 49.4 million.

For the quarter ended September 30, 2016, cash used in operations was $47.2 million, which reflected continued investment in key development programs and restructuring efforts.

Outlook

Based on current aircraft production rates, Triumph is adjusting its fiscal year 2017 revenue guidance to a range of $3.5 to $3.6 billion from $3.6 to $3.7 billion.

The Company reaffirmed its full year earnings per diluted share guidance of $3.15 to $3.45, which reflects an effective tax rate of 18%. Triumph also continues to expect free cash use of approximately $100.0 million to $120.0 million. This guidance includes restructuring costs and benefits but does not take into account any future divestitures.

Conference Call

Triumph Group will hold a conference call today, November 3rd at 8:30 a.m. (ET) to discuss the second 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 November 3rd to November 10th by calling (888) 266-2081 (Domestic) or (703) 925-2533 (International), passcode #1677301.

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 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 Six Months Ended
September 30, September 30,
 
CONDENSED STATEMENTS OF INCOME 2016 2015 2016 2015
 
 
Net sales $ 874,769 $ 954,774 $ 1,768,022 $ 1,914,412
 
Operating income 70,486 110,047 117,212 217,913
 
Interest expense and other 17,896 15,631 36,023 33,747
Income tax expense   17,783   32,804   26,648   59,823
 
Net income $ 34,807 $ 61,612 $ 54,541 $ 124,343
 
Earnings per share - basic:
 
Net income $ 0.71 $ 1.25 $ 1.11 $ 2.53
 
Weighted average common shares outstanding - basic   49,304   49,219   49,281   49,208
 
Earnings per share - diluted:
 
Net income $ 0.70 $ 1.25 $ 1.10 $ 2.52
 
Weighted average common shares outstanding - diluted   49,432   49,308   49,429   49,311
 
Dividends declared and paid per common share $ 0.04 $ 0.04 $ 0.08 $ 0.08
 
 
FINANCIAL DATA (UNAUDITED)
TRIUMPH GROUP, INC. AND SUBSIDIARIES
(dollars in thousands, except per share data)
         
 
BALANCE SHEET Unaudited Audited
September 30, March 31,
2016 2016
Assets
Cash and cash equivalents $ 36,215 $ 20,984
Accounts receivable, net 329,678 444,208
Inventory, net of unliquidated progress payments of $94,514 and $123,155 1,446,821 1,236,190
Prepaid and other current assets   26,609     41,259  
Current assets 1,839,323 1,742,641
 
Property and equipment, net 857,621 889,734
Goodwill 1,426,445 1,444,254
Intangible assets, net 620,445 649,612
Other, net   108,435     108,852  
 
Total assets $ 4,852,269   $ 4,835,093  
 
Liabilities & Stockholders' Equity
 
Current portion of long-term debt $ 47,374 $ 42,441
Accounts payable 415,230 410,225
Accrued expenses   550,961     683,208  
Current liabilities 1,013,565 1,135,874
 
Long-term debt, less current portion 1,568,315 1,374,879
Accrued pension and post-retirement benefits, noncurrent 620,597 664,664
Deferred income taxes, noncurrent 86,045 62,453
Other noncurrent liabilities 598,001 662,279
 
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 842,882 851,102
Treasury stock, at cost, 2,932,863 and 3,131,921 shares (186,571 ) (199,415 )
Accumulated other comprehensive loss (371,563 ) (347,162 )
Retained earnings   680,947     630,368  
Total stockholders' equity   965,746     934,944  
 
Total liabilities and stockholders' equity $ 4,852,269   $ 4,835,093  
 
 
FINANCIAL DATA (UNAUDITED)
TRIUMPH GROUP, INC. AND SUBSIDIARIES
(dollars in thousands)
                   
 
SEGMENT DATA Three Months Ended Six Months Ended
September 30, September 30,
2016 2015 2016 2015
 
Net sales:
Integrated Systems $ 245,367 $ 261,481 $ 502,723 $ 520,052
Aerospace Structures 320,283 385,471 651,879 780,591
Precision Components 259,458 265,825 514,060 530,966
Product Support 85,826 73,777 170,025 148,522
Elimination of inter-segment sales   (36,165 )   (31,780 )   (70,665 )   (65,719 )
$ 874,769   $ 954,774   $ 1,768,022   $ 1,914,412  
 
Operating income (loss):
Integrated Systems $ 45,797 $ 51,100 $ 93,783 $ 101,657
Aerospace Structures 24,867 36,682 34,031 78,480
Precision Components 12,063 25,457 4,281 50,362
Product Support 14,265 9,125 28,324 19,112
Corporate   (26,506 )   (12,317 )   (43,207 )   (31,698 )
$ 70,486   $ 110,047   $ 117,212   $ 217,913  
 
Operating Margin %
Integrated Systems 18.7 % 19.5 % 18.7 % 19.5 %
Aerospace Structures 7.8 % 9.5 % 5.2 % 10.1 %
Precision Components 4.6 % 9.6 % 0.8 % 9.5 %
Product Support 16.6 % 12.4 % 16.7 % 12.9 %
Consolidated 8.1 % 11.5 % 6.6 % 11.4 %
 
Depreciation and amortization:
Integrated Systems $ 10,157 $ 10,139 $ 20,461 $ 20,657
Aerospace Structures 18,385 15,646 36,347 31,579
Precision Components 14,016 13,972 28,345 28,193
Product Support 2,452 2,428 4,936 4,890
Corporate   276     390     659     790  
$ 45,286   $ 42,575   $ 90,748   $ 86,109  
 
Amortization of acquired contract liabilities:
Integrated Systems $ (9,136 ) $ (10,011 ) $ (19,473 ) $ (20,512 )
Aerospace Structures (20,647 ) (19,430 ) (39,085 ) (43,208 )
Precision Components   (694 )   (963 )   (1,267 )   (1,782 )
$ (30,477 ) $ (30,404 ) $ (59,825 ) $ (65,502 )
 
Capital expenditures:
Integrated Systems $ 2,595 $ 6,012 $ 5,823 $ 9,865
Aerospace Structures 3,759 8,895 7,592 15,466
Precision Components 3,503 4,413 8,405 11,126
Product Support 703 711 1,333 1,333
Corporate   684     81     814     338  
$ 11,244   $ 20,112   $ 23,967   $ 38,128  
 
 
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.
  • 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 Six Months Ended
September 30, September 30,
2016   2015 2016   2015
Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA):
Net Income $ 34,807 $ 61,612 $ 54,541 $ 124,343
 
Add-back:
Income Tax Expense 17,783 32,804 26,648 59,823
Interest Expense and Other 17,896 15,631 36,023 33,747
Curtailment charge - - - 2,863
Loss on divestiture 4,774 - 4,774 -
Amortization of Acquired Contract Liabilities (30,477 ) (30,404 ) (59,825 ) (65,502 )
Depreciation and Amortization   45,286     42,575     90,748     86,109  
 
Adjusted Earnings before Interest, Taxes,
Depreciation and Amortization ("Adjusted EBITDA") $ 90,069   $ 122,218   $ 152,909   $ 241,383  
 
Net Sales $ 874,769   $ 954,774   $ 1,768,022   $ 1,914,412  
 
Adjusted EBITDA Margin   10.7 %   13.2 %   9.0 %   13.1 %
 
           
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 September 30, 2016

 

Segment Data

Total

Integrated
Systems

Aerospace
Structures

Precision
Components

Product
Support

Corporate /
Eliminations

 
Net Income $ 34,807
 
Add-back:
Income Tax Expense 17,783
Interest Expense and Other   17,896  
 
Operating Income (Loss) $ 70,486 $ 45,797 $ 24,867 $ 12,063 $ 14,265 $ (26,506 )
 
Loss on divestiture 4,774 - - - - 4,774
Amortization of Acquired Contract Liabilities (30,477 ) (9,136 ) (20,647 ) (694 ) - -
Depreciation and Amortization   45,286     10,157     18,385     14,016     2,452     276  
 
Adjusted Earnings (Losses) before Interest, Taxes,
Depreciation and Amortization ("Adjusted EBITDA") $ 90,069   $ 46,818   $ 22,605   $ 25,385   $ 16,717   $ (21,456 )
 
Net Sales $ 874,769   $ 245,367   $ 320,283   $ 259,458   $ 85,826   $ (36,165 )
 
Adjusted EBITDA Margin   10.7 %   19.8 %   7.5 %   9.8 %   19.5 %   n/a  
 
 

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

Six Months Ended September 30, 2016

 

Segment Data

Total

Integrated
Systems

Aerospace
Structures

Precision
Components

Product
Support

Corporate /
Eliminations

 
Net Income $ 54,541
 
Add-back:
Income Tax Expense 26,648
Interest Expense and Other   36,023  
 
Operating Income (Loss) $ 117,212 $ 93,783 $ 34,031 $ 4,281 $ 28,324 $ (43,207 )
 
Loss on divestiture 4,774 - - - - 4,774
Amortization of Acquired Contract Liabilities (59,825 ) (19,473 ) (39,085 ) (1,267 ) - -
Depreciation and Amortization   90,748     20,461     36,347     28,345     4,936     659  
 
Adjusted Earnings (Losses) before Interest, Taxes,
Depreciation and Amortization ("Adjusted EBITDA") $ 152,909   $ 94,771   $ 31,293   $ 31,359   $ 33,260   $ (37,774 )
 
Net Sales $ 1,768,022   $ 502,723   $ 651,879   $ 514,060   $ 170,025   $ (70,665 )
 
Adjusted EBITDA Margin   9.0 %   19.6 %   5.1 %   6.1 %   19.6 %   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 September 30, 2015
Segment Data

Total

Integrated
Systems

Aerospace
Structures

Precision
Components

Product
Support

Corporate /
Eliminations

 
Net Income $ 61,612
 
Add-back:
Income Tax Expense 32,804
Interest Expense and Other   15,631  
 
Operating Income (Loss) $ 110,047 $ 51,100 $ 36,682 $ 25,457 $ 9,125 $ (12,317 )
 
Amortization of Acquired Contract Liabilities (30,404 ) (10,011 ) (19,430 ) (963 ) - -
Depreciation and Amortization   42,575     10,139     15,646     13,972     2,428     390  
 
Adjusted Earnings (Losses) before Interest, Taxes,
Depreciation and Amortization ("Adjusted EBITDA") $ 122,218   $ 51,228   $ 32,898   $ 38,466   $ 11,553   $ (11,927 )
 
Net Sales $ 954,774   $ 261,481   $ 385,471   $ 265,825   $ 73,777   $ (31,780 )
 
Adjusted EBITDA Margin   13.2 %   20.4 %   9.0 %   14.5 %   15.7 %   n/a  
 
 

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

Six Months Ended September 30, 2015
Segment Data

Total

Integrated
Systems

Aerospace
Structures

Precision
Components

Product
Support

Corporate /
Eliminations

 
Net Income $ 124,343
 
Add-back:
Income Tax Expense 59,823
Interest Expense and Other   33,747  
 
Operating Income (Loss) $ 217,913 $ 101,657 $ 78,480 $ 50,362 $ 19,112 $ (31,698 )
 
Curtailment charge 2,863 - - - - 2,863
Amortization of Acquired Contract Liabilities (65,502 ) (20,512 ) (43,208 ) (1,782 ) - -
Depreciation and Amortization   86,109     20,657     31,579     28,193     4,890     790  
 
Adjusted Earnings (Losses) before Interest, Taxes,
Depreciation and Amortization ("Adjusted EBITDA") $ 241,383   $ 101,802   $ 66,851   $ 76,773   $ 24,002   $ (28,045 )
 
Net Sales $ 1,914,412   $ 520,052   $ 780,591   $ 530,966   $ 148,522   $ (65,719 )
 
Adjusted EBITDA Margin   13.1 %   20.4 %   9.1 %   14.5 %   16.2 %   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

September 30, 2016

Pre-tax

   

After-tax

Diluted EPS

 
Income from Continuing Operations- GAAP $ 52,590 $ 34,807 $ 0.70
Adjustments:
Loss on divestiture 4,774 4,774 0.10
Restructuring costs (non-cash) 3,740 2,581 0.05
Restructuring costs (cash)   10,462   7,219   0.15
 
Adjusted Income from Continuing Operations- non-GAAP $ 71,566 $ 49,381 $ 1.00
 
 

Six Months Ended

September 30, 2016

Pre-tax

After-tax

Diluted EPS

 
Income from Continuing Operations- GAAP $ 81,189 $ 54,541 $ 1.10
Adjustments:
Triumph Precision Components - Strike related costs 15,701 10,834 0.22
Triumph Precision Components - Inventory write-down 6,089 4,201 0.08
Triumph Aerospace Structures - UAS program 14,200 9,798 0.20
Loss on divestiture 4,774 4,774 0.10
Restructuring costs (non-cash) 7,231 4,989 0.10
Restructuring costs (cash)   17,113   11,808   0.24
 
Adjusted Income from Continuing Operations- non-GAAP $ 146,297 $ 100,945 $ 2.04
 
 
FINANCIAL DATA (UNAUDITED)
TRIUMPH GROUP, INC. AND SUBSIDIARIES
(dollars in thousands)
           
 
Non-GAAP Financial Measure Disclosures (continued)

Three Months Ended

September 30, 2015

Pre-tax

After-tax

Diluted EPS

 
Income from Continuing Operations- GAAP $ 94,416 $ 61,612 $ 1.25
Adjustments:
Facility consolidation costs 5,360 3,484 0.07
     
 
Adjusted Income from Continuing Operations- non-GAAP $ 99,776 $ 65,096 $ 1.32
 
 

Six Months Ended

September 30, 2015

Pre-tax

After-tax

Diluted EPS

 
Income from Continuing Operations- GAAP $ 184,166 $ 124,343 $ 2.52
Adjustments:
Facility consolidation costs 5,360 3,484 0.07
Curtailment charge 2,863 1,861 0.04
     
 
Adjusted Income from Continuing Operations- non-GAAP $ 192,389 $ 129,688 $ 2.63
*Difference due to rounding.
 

The following table reconciles our Operating income to Adjusted Operating income as noted above.

     

Three Months Ended

September 30, 2016

Operating income - GAAP $ 70,486
Adjustments:
Loss on divestiture 4,774
Restructuring costs (non-cash) 3,740
Restructuring costs (cash)   10,462
$ 89,462
 
 
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.

       
Three Months Ended Six Months Ended

     June 30,     

  September 30, September 30,
2016 2016 2016
 
Cash flow from operations $ (84,034 ) $ (47,202 ) $ (131,236 )
Less:
Capital expenditures (12,723 ) (11,244 ) (23,967 )
Sale of assets   948     9,096     10,044  
Free cash flow available for debt reduction, acquisitions
and share repurchases $ (95,809 ) $ (49,350 ) $ (145,159 )
 

We use "Net Debt to Capital" as a measure of financial leverage. The following table sets forth the computation of Net Debt to Capital:

     
September 30, March 31,
2016 2016
 

Calculation of Net Debt

Current portion $ 47,374 $ 42,441
Long-term debt   1,568,315     1,374,879  
Total debt 1,615,689 1,417,320
Plus: Deferred debt issuance costs 13,234 8,971
Less: Cash   (36,215 )   (20,984 )
Net debt $ 1,592,708   $ 1,405,307  
 

Calculation of Capital

Net debt $ 1,592,708 $ 1,405,307
Stockholders' equity   965,746     934,944  
Total capital $ 2,558,454   $ 2,340,251  
 
Percent of net debt to capital 62.3 % 60.0 %
 

Source: Triumph Group, Inc.

Triumph Group, Inc.
Media:
Michele Long, 610-251-1000
mmlong@triumphgroup.com
or
Investor Relations:
Sheila G. Spagnolo, 610-251-1000
sspagnolo@triumphgroup.com