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|Triumph Group Reports First Quarter Fiscal 2011 Earnings; Raises Fiscal Year 2011 Guidance|
WAYNE, Pa., Jul 28, 2010 (BUSINESS WIRE) --Triumph Group, Inc. (NYSE: TGI) today reported that net sales for the first quarter of the fiscal year ending March 31, 2011 totaled $406.4 million, a twenty-nine percent increase from last year's first quarter net sales of $316.1 million. Organic sales growth for the quarter was two percent. Income from continuing operations for the first quarter of fiscal year 2011 was $11.6 million, or $0.62 per diluted share, versus $21.5 million, or $1.30 per diluted share, for the first quarter of the prior year. The quarter's results included $17.4 million pre tax ($13.2 million after tax or $0.71 per diluted share) of transaction and integration expenses related to the recent acquisition of Vought Aircraft Industries. Excluding these acquisition-related costs, income from continuing operations for the quarter was $24.8 million, or $1.33 per diluted share. Net income for the first quarter of fiscal year 2011 was $11.4 million, or $0.61 per diluted share, versus $18.0 million, or $1.09 per diluted share, for the first quarter of the prior year. Net income for the quarter excluding transaction and integration costs was $24.6 million, or $1.32 per diluted share. The tax rate for the quarter was 45.2% reflecting the non-deductibility of certain acquisition-related expenses in the quarter as well as the absence of the Research and Development tax credit, which expired December 31, 2009. The tax rate for the remainder of the fiscal year will be approximately 36%. The number of shares used in computing diluted earnings per share for the first quarter of fiscal year 2011 was 18.7 million shares. During the quarter, the company generated $22.7 million of cash flow from operations, which included approximately $12.4 million of interest paid at closing on Vought's debt and approximately $12.8 million of acquisition-related costs.
Richard C. Ill, Triumph's Chairman and Chief Executive Officer, said, "We are very proud of how well our businesses performed this quarter. Both business segments recorded year over year organic growth in revenue and operating income. Our end markets and the great majority of our programs continue to strengthen."
Mr. Ill continued, "The integration of Vought is on track and the acquisition was accretive to earnings per share this quarter. We continue to be excited about the opportunities that this acquisition brings and remain confident in our ability to deliver continued revenue growth, strong cash flow and earnings expansion throughout the remainder of the fiscal year."
The Aerospace Systems segment reported net sales for the quarter of $346.9 million compared to $260.0 million in the prior year period, an increase of thirty-three percent. Organic sales growth for the quarter was one percent. Operating income for the first quarter of fiscal year 2011 was $54.4 million compared to $41.8 million for the prior year period, an increase of thirty percent. The segment's operating results included a net recovery of $0.8 million of legal costs associated with the ongoing trade secret litigation which was offset by costs related to the signing of a collective bargaining agreement and a favorable settlement of a retroactive pricing agreement.
The Aftermarket Services segment reported net sales for the quarter of $59.8 million compared to $57.8 million in the prior year period, an increase of four percent, all of which was organic. Operating income for the first quarter of fiscal year 2011 was $4.1 million, compared to $2.4 million for the prior year period. Operating margin for the quarter increased to seven percent, a sixty-four percent year over year improvement.
In commenting on the outlook for fiscal year 2011, Mr. Ill said, "Based on current aircraft production rates and including Vought for the remainder of the year, we now expect that earnings per share from continuing operations will be in excess of $6.00 per diluted share excluding transaction and integration costs and based on a weighted average share count of 23.9 million shares. Based on the progress of the integration to date, we now expect to generate annual recurring synergies of approximately $15 million within the first twelve to eighteen months of the acquisition."
As previously announced, Triumph Group will hold a conference call tomorrow at 8:30 a.m. (ET) to discuss the fiscal year 2011 first quarter results. The conference call will be available live and archived on the company's website at http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.triumphgroup.com&esheet=6377591&lan=en-US&anchor=http%3A%2F%2Fwww.triumphgroup.com&index=1&md5=a80d181224e266e8d023f3816abd4858. A slide presentation will be included with the audio portion of the webcast. An audio replay will be available from July 29th until August 6th by calling (888) 266-2081 (Domestic) or (703) 925-2533 (International), passcode #1470279.
Triumph Group, Inc., headquartered in Wayne, 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://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.triumphgroup.com&esheet=6377591&lan=en-US&anchor=http%3A%2F%2Fwww.triumphgroup.com&index=2&md5=74d4ae6a7eca3a235962c4f1d6d4526a.
Statements in this release which are not historical facts are forward-looking statements under the provisions of the Private Securities Litigation Reform Act of 1995, including expectations of future aerospace market conditions, aircraft production rates, financial and operational performance, revenue and earnings growth, and earnings results for fiscal 2011. 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, 2010.
Non-GAAP Financial Measure Disclosures
We prepare and publicly release quarterly unaudited financial statements prepared in accordance with GAAP. In accordance with recent 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, 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 charges, such as 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.
SOURCE: Triumph Group, Inc.
Triumph Group, Inc.