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Triumph Group Reports Third Quarter Fiscal 2004 Results

WAYNE, Pa.--(BUSINESS WIRE)--Jan. 29, 2004--Triumph Group, Inc. (NYSE:TGI) today reported net sales from continuing operations for the third quarter of fiscal 2004 totaled $146.8 million, an eleven percent increase from last year's third quarter net sales of $132.6 million. Income from continuing operations was $2.6 million, or $0.17 per diluted common share, compared to $8.5 million, or $0.54 per diluted common share for the same period last year. Net income was $2.7 million, or $0.17 per diluted common share, compared to net income of $7.9 million, or $0.50 per diluted common share last year. During the quarter, the Company generated $7.5 million of cash flow from operating activities.

Sales from continuing operations in the first nine months of fiscal 2004 were $432.6 million, a five percent increase over the $413.7 million last year. Income from continuing operations in the first nine months of fiscal 2004 was $18.2 million, or $1.14 per diluted common share, compared to $28.0 million, or $1.76 per diluted common share for the same period in fiscal 2003. Net income was $17.0 million, or $1.07 per diluted common share, compared to net income of $28.0 million, or $1.76 per diluted common share in the prior year period.

Commenting on the Company's performance, Richard C. Ill, Triumph's President and Chief Executive Officer, said, "Our performance in the aerospace OEM and aftermarket business met our expectations. Revenue in the third quarter continued to increase sequentially, primarily due to the successive improvement in aftermarket sales from $42.9 million in the first quarter 2004, $45.0 million in the second quarter, and $46.4 million in the third quarter. The commercial aerospace OEM business was flat, reflecting what we believe to be a stabilized environment for demand."

The Company's revenue from the industrial gas turbine operations fell significantly from approximately $8.0 million in each of the first and second quarters to $4.8 million in the third quarter. In addition, sales to the largest OEM customer, which totaled approximately $35.1 million of the $50.1 million of IGT sales in fiscal year 2003, declined to a current run rate of less than $5.0 million with no expectation of any significant increase in the near term. As a result of the IGT revenue shortfall, earnings were negatively impacted in the quarter. This unanticipated decline in sales resulted in IGT costs exceeding revenue by approximately $5.0 million in the quarter.

As opposed to the decline in IGT OEM sales, IGT aftermarket sales grew from $1.5 million in the first quarter 2004 to $2.1 million in the third quarter. As a result of the Company's decision to accelerate the program to design and engineer replacement hot section parts for the IGT aftermarket, approximately $2.0 million of non-recurring research and development expenses were incurred at the new casting facility which further negatively impacted the results for the quarter.

"While we are disappointed by the impact of the changed IGT market conditions on the quarter, we continue to see an opportunity in being an alternate supplier to the OEMs for high value, hot section IGT replacement parts. In light of the current market, we will be reviewing our business model in order to make any appropriate changes," Mr. Ill stated. "In the meantime, we have reduced our expectations for near term revenue and earnings for our IGT business while continuing to project stable OEM and improving aftermarket demand from our aerospace business. As a result, we would expect earnings from continuing operations to be between $0.40 to $0.45 for the fourth quarter, prior to any possible costs associated with reevaluating our IGT business," Mr. Ill concluded.

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 future demand for the Company's commercial aviation products, revenue and earnings expectations for the Company's IGT business and aerospace OEM and aftermarket businesses and the ability to 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)

                 TRIUMPH GROUP, INC. AND SUBSIDIARIES
                (in thousands, except per share data)

                               Three Months Ended   Nine Months Ended
                                  December 31,        December 31,
                               ------------------- -------------------

CONDENSED STATEMENTS OF INCOME   2003       2002     2003       2002
                               --------- --------- --------- ---------

Net Sales                      $146,815  $132,574  $432,560  $413,691

Operating Income                  6,870    16,170    33,646    53,044

Interest Expense and Other        3,168     2,931     8,943     9,573
Income Tax Expense                1,065     4,700     6,513    15,433
                               --------- --------- --------- ---------

Income from Continuing
 Operations                       2,637     8,539    18,190    28,038
(Loss) Income from Discontinued
 Operations                          19      (633)   (1,165)      (31)
                               --------- --------- --------- ---------

Net Income                       $2,656    $7,906   $17,025   $28,007
                               ========= ========= ========= =========

Earnings Per Share - Basic:

Income from Continuing
 Operations                       $0.17     $0.54     $1.15     $1.77
(Loss) Income from Discontinued
 Operations                       $0.00    ($0.04)   ($0.07)    $0.00
                               --------- --------- --------- ---------
Net Income                        $0.17     $0.50     $1.08     $1.77
                               ========= ========= ========= =========

Weighted average common shares
 outstanding - Basic             15,839    15,836    15,837    15,830
                               ========= ========= ========= =========

Earnings Per Share - Diluted:

Income from Continuing
 Operations                       $0.17     $0.54     $1.14     $1.76
(Loss) Income from Discontinued
 Operations                       $0.00    ($0.04)   ($0.07)    $0.00
                               --------- --------- --------- ---------
Net Income                        $0.17     $0.50     $1.07     $1.76
                               ========= ========= ========= =========

Weighted average common shares
 outstanding - Diluted           15,930    15,887    15,906    15,939
                               ========= ========= ========= =========

OTHER SELECTED INFORMATION

Continuing Operations:

Depreciation and Amortization    $7,103    $6,222   $20,214   $18,038
                               ========= ========= ========= =========

Capital Expenditures             $5,957    $8,206   $20,174   $22,150
                               ========= ========= ========= =========


                      FINANCIAL DATA (UNAUDITED)

                 TRIUMPH GROUP, INC. AND SUBSIDIARIES
                            (in thousands)

BALANCE SHEET
                                             December 31,   March 31,
                                                 2003         2003
                                             ------------ ------------
                      Assets
Cash                                              $6,066       $8,583
Accounts Receivable, net                         102,063      106,841
Inventory                                        205,992      196,343
Assets held for sale                              26,889       27,883
Prepaids and Other                                 5,080        3,549
Income tax refund receivable                       4,382            0
                                             ------------ ------------
     Current Assets                              350,472      343,199

Fixed Assets, net                                221,768      215,832
Goodwill                                         268,087      260,467
Intangible Assets, net                            27,912       31,055
Other                                             14,856       13,615
                                             ------------ ------------

Total Assets                                    $883,095     $864,168
                                             ============ ============

        Liabilities & Stockholders' Equity

Accounts Payable                                 $40,823      $47,466
Accrued Expenses and Other                        37,393       44,808
Liabilities related to assets held for sale        7,525        6,361
Income Taxes Payable                               3,112        3,231
Deferred Income Taxes                              1,585        1,585
Current Portion of Long-Term Debt                  5,331        7,831
                                             ------------ ------------
     Current Liabilities                          95,769      111,282

Long-Term Debt, less current portion             205,491      191,692
Deferred Income Taxes and Other                   67,870       66,209

Stockholders' Equity:
     Common Stock, $.001 par value,
      50,000,000 shares authorized,
      16,027,324 shares issued                        16           16
Capital in excess of par value                   259,316      258,675
Treasury Stock, at cost, 172,360 and 183,260
 shares                                           (4,279)      (4,549)
Accumulated other comprehensive income             1,587          543
Retained earnings                                257,325      240,300
                                             ------------ ------------
     Total Stockholders' Equity                  513,965      494,985
                                             ------------ ------------

Total Liabilities and Stockholders' Equity      $883,095     $864,168
                                             ============ ============


                     FINANCIAL DATA  (UNAUDITED)

                 TRIUMPH GROUP, INC. AND SUBSIDIARIES
                (in thousands, except per share data)

Non-GAAP Financial Measure Disclosures

Earnings before Interest, Taxes, Depreciation and Amortization
("EBITDA") for the three months ended December 31, 2003 was $14.0
million with a margin of 9.5%. EBITDA for the three months ended
December 31, 2002 was $22.4 million with a margin of 16.9%. EBITDA for
the nine months ended December 31, 2003 was $53.9 million with a
margin of 12.5%. EBITDA for the nine months ended December 31, 2002
was $71.1 million with a margin of 17.2%.

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.


                               Three Months Ended   Nine Months Ended
                                  December 31,        December 31,
                               ------------------- -------------------

                                 2003       2002     2003       2002
                               --------- --------- --------- ---------
Earnings before Interest,
 Taxes, Depreciation and
 Amortization ("EBITDA"):

   Income from Continuing
    Operations                    2,637     8,539    18,190    28,038

   Add-back:
        Income Tax Expense        1,065     4,700     6,513    15,433
        Interest Expense and
         Other                    3,168     2,931     8,943     9,573
        Depreciation and
         Amortization             7,103     6,222    20,214    18,038
                               --------- --------- --------- ---------

   Earnings before Interest,
    Taxes, Depreciation and
    Amortization ("EBITDA")      13,973    22,392    53,860    71,082
                               --------- --------- --------- ---------


   Net Sales                    146,815   132,574   432,560   413,691
                               --------- --------- --------- ---------

   EBITDA Margin                    9.5%     16.9%     12.5%     17.2%
                               ========= ========= ========= =========

CONTACT: Triumph Group, Inc., Wayne
John Bartholdson, 610-251-1000
jbartholdson@triumphgroup.com

SOURCE: Triumph Group, Inc.
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