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Triumph Group Reports Fourth Quarter and Year End Fiscal 2005 Results

WAYNE, Pa.--(BUSINESS WIRE)--May 6, 2005--Triumph Group, Inc. (NYSE:TGI)

  • Fiscal year 2005 net sales increased 13% to $688.5 million

  • Cash flow from operations increased 41% to $64.3 million

  • Year-end backlog increased 17% to $598.0 million

  • Completed divestiture of non-core assets, generating proceeds of $26.8 million

Triumph Group, Inc. (NYSE:TGI) reported today that net sales from continuing operations for the fourth quarter of fiscal 2005 totaled $181.9 million, a three percent increase from last year's fourth quarter net sales of $175.8 million. For the fiscal year 2005, net sales from continuing operations increased to $688.5 million compared to $608.3 million for fiscal 2004, representing a thirteen percent year over year increase. Cash flow from operating activities for the 2005 fiscal year was $64.3 million, compared to $45.6 million realized in fiscal 2004, a forty-one percent increase.

"Overall, the fourth quarter operating results from our core businesses were solid," stated Richard C. Ill, Triumph's President and Chief Executive Officer. "During fiscal 2005, revenue continued to grow across our aerospace businesses. In addition, we executed on our plan to focus on our core aviation companies by completing the divestiture of our Metals Operations and the exit from the Industrial Gas Turbine business. A combination of cash flow from operating activities and proceeds from divestitures reduced debt by $68 million. While the divestiture and restructuring activities had an adverse impact on operating results in the short-term, we are confident that our focused business model and strong balance sheet will position us for long-term growth."

With significant charges and costs associated with the restructuring steps taken to exit the Industrial Gas Turbine ("IGT") business, legal expenses related to the previously announced trade secret litigation and first year, non-recurring Sarbanes-Oxley expenses, the company reported income from continuing operations for the fourth quarter of fiscal 2005 of $4.9 million, or $0.30 per diluted common share, compared to $1.2 million, or $0.08 per diluted common share, for the same period last year. For the fiscal year 2005, the company reported income from continuing operations of $15.8 million, or $0.99 per diluted common share, as compared to $19.4 million, or $1.22 per diluted common share, for fiscal 2004. Net income for fiscal 2005 was $11.4 million, or $0.72 per diluted common share, versus $18.2 million, or $1.14 per diluted common share, for the prior year. The following table quantifies the operating losses of the Other segment and significant charges and costs incurred in the fourth quarter and for the fiscal year 2005.


                                                 March 31, 2005

                                          Quarter Ended   Year Ended
                                          -------------  -------------

                                          ($ in thousands, except per
                                                   share data)

Other segment results, primarily IGT
 related
   Restructuring and impairment costs             $571         $3,069
   Inventory adjustments reported in Cost
    of Goods Sold                                1,751          2,035
   Operating losses, less restructuring,
    impairment & inventory charges               1,878          9,885
                                          -------------  -------------
Other segment operating losses                   4,200         14,989

Trade secret litigation expenses                 1,212          2,820

First year, non-recurring Sarbanes-Oxley
 expenses                                          705          1,800
                                          -------------  -------------

Total, pre-tax                                  $6,117        $19,609
                                          =============  =============

Total, after-tax                                $3,975        $12,746
                                          =============  =============

Per share impact of significant charges
 and costs                                       $0.25          $0.80
                                          =============  =============

In the fourth quarter of fiscal 2005, the Aerospace Systems segment's net sales increased six percent to $132.7 million versus $125.0 million for the prior year period. For the full year, the segment's net sales increased eighteen percent to $495.4 million from $418.6 million for fiscal 2004. Operating income was $14.6 million in the fourth quarter and $54.0 million for the full fiscal year 2005, a three percent increase. The three percent increase in operating income was after $2.8 million of legal expenses associated with the trade secret litigation.

The Aftermarket Services segment reported net sales for the fourth quarter of $45.9 million, an increase of seven percent over fourth quarter fiscal 2004 net sales of $42.9 million. Net sales for the fiscal year increased seventeen percent to $173.0 million from $147.5 million for fiscal 2004. Operating income for the fourth quarter was $1.5 million and $7.6 million for the full fiscal year 2005. Core growth in repair product and overhaul service companies was offset by $3.9 million of operating losses incurred by the aerospace related castings operation during the year.

In the Other segment, which primarily consisted of activities related to the IGT markets, net sales decreased to $26.6 million for the year as the company completed its divestiture of its IGT assets. The segment incurred an operating loss of $4.2 million in the fourth quarter of fiscal 2005 and an operating loss of $15.0 million for the full year.

Commenting on the outlook for fiscal 2006, Mr. Ill said, "As we enter fiscal year 2006, we are better positioned for opportunities created by the continuing recovery of our aviation markets and are optimistic about our future growth. For fiscal year 2006, we continue to project sales in the range of $700 to $750 million and earnings per share for the year of $1.75 to $2.00, with quarterly results improving sequentially."

As previously announced, Triumph will hold a conference call today at 10:00 a.m. (EDT) to discuss the fiscal 2005 fourth quarter and year-end 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 6th until May 13th by calling (888) 266-2081 (Domestic) or (703) 925-2533 (International), passcode # 692774.

Triumph Group, Inc., headquartered in Wayne, Pennsylvania, designs, engineers, manufactures, repairs and overhauls aircraft components and accessories. The company serves a broad, worldwide spectrum of the aviation industry, including original equipment manufacturers of aircraft and aircraft components as well as commercial, military and air cargo customers.

More information about Triumph can be found on the Internet at http://www.triumphgroup.com.

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, but not limited to, statements relating to the company's positioning for growth, expectations of continued recovery in the aviation markets, and projections of sales, earnings per share and sequential earnings per share growth. 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 year ended March 31, 2004.


                     FINANCIAL DATA  (UNAUDITED)

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


                            Three Months Ended  Twelve Months Ended
                                 March 31,           March 31,
                            ------------------- -------------------

CONDENSED STATEMENTS OF
 INCOME                       2005      2004      2005      2004
                            --------- --------- --------- ---------

Net Sales                   $181,874  $175,755  $688,485  $608,315

Operating Income               8,289     2,967    33,430    36,613

Interest Expense and Other     3,369     3,269    13,025    12,212
Income Tax Expense
 (Benefit)                        50    (1,522)    4,596     4,991
                            --------- --------- --------- ---------

Income from Continuing
 Operations                    4,870     1,220    15,809    19,410
Income (Loss) from
 Discontinued Operations         168       (23)   (4,381)   (1,188)
                            --------- --------- --------- ---------

Net Income                    $5,038    $1,197   $11,428   $18,222
                            ========= ========= ========= =========

Earnings Per Share - Basic:

Income from Continuing
 Operations                    $0.31     $0.08     $1.00     $1.23
Income (Loss) from
 Discontinued Operations       $0.01    ($0.00)   ($0.28)   ($0.07)
                            --------- --------- --------- ---------
Net Income                     $0.32     $0.08     $0.72     $1.15 (1)
                            ========= ========= ========= =========

Weighted average common
 shares outstanding - Basic   15,898    15,858    15,877    15,842
                            ========= ========= ========= =========

Earnings Per Share -
 Diluted:

Income from Continuing
 Operations                    $0.30     $0.08     $0.99     $1.22
Income (Loss) from
 Discontinued Operations       $0.01    ($0.00)   ($0.27)   ($0.07)
                            --------- --------- --------- ---------
Net Income                     $0.31     $0.08     $0.72     $1.14 (1)
                            ========= ========= ========= =========

Weighted average common
 shares outstanding -
 Diluted                      16,016    15,955    15,971    15,918
                            ========= ========= ========= =========


(1) Difference due to rounding.


                      FINANCIAL DATA (UNAUDITED)

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


BALANCE SHEET
                                            March 31,      March 31,
                                              2005           2004
                                          -------------  -------------
                                Assets
Cash                                            $4,844         $6,766
Accounts Receivable, net                       127,942        122,273
Inventory                                      217,234        203,593
Assets held for sale                                 0         33,579
Income Tax Refund Receivable                         0          8,829
Deferred Income Taxes                            5,422              0
Prepaid Expenses and Other                       3,887          3,801
                                          -------------  -------------
   Current Assets                              359,329        378,841

Property and Equipment, net                    234,123        246,501
Goodwill                                       273,476        267,621
Intangible Assets, net                          56,227         27,514
Other                                           14,560         14,078
                                          -------------  -------------

Total Assets                                  $937,715       $934,555
                                          =============  =============

                  Liabilities & Stockholders' Equity

Accounts Payable                               $65,211        $55,259
Accrued Expenses                                74,917         49,771
Liabilities related to assets held for
 sale                                                0          8,809
Income Taxes Payable                             2,922          1,533
Deferred Income Taxes                                0          1,444
Current Portion of Long-Term Debt                1,740          4,884
                                          -------------  -------------
   Current Liabilities                         144,790        121,700

Long-Term Debt, less current portion           156,042        220,963
Deferred Income Taxes and Other                110,220         77,578

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                 259,448        259,322
Treasury Stock, at cost, 123,160 and
 167,260 shares                                 (3,057)        (4,152)
Accumulated other comprehensive income             306            606
Retained earnings                              269,950        258,522
                                          -------------  -------------
   Total Stockholders' Equity                  526,663        514,314
                                          -------------  -------------

Total Liabilities and Stockholders'
 Equity                                       $937,715       $934,555
                                          =============  =============


                      FINANCIAL DATA (UNAUDITED)

                 TRIUMPH GROUP, INC. AND SUBSIDIARIES
                        (dollars in thousands)


SEGMENT DATA                   Three Months Ended  Twelve Months Ended
                                    March 31,           March 31,
                               ------------------- -------------------

                                 2005      2004      2005      2004
                               --------- --------- --------- ---------

Net Sales:
   Aerospace Systems           $132,734  $124,967  $495,425  $418,587
   Aftermarket Services          45,904    42,857   172,958   147,531
   Other                          4,969     9,056    26,560    46,388
   Elimination of inter-
    segment sales                (1,733)   (1,125)   (6,458)   (4,191)
                               --------- --------- --------- ---------
                               $181,874  $175,755  $688,485  $608,315
                               ========= ========= ========= =========

Operating Income (Loss):
   Aerospace Systems            $14,604   $17,464   $54,046   $52,602
   Aftermarket Services           1,494     1,453     7,627    12,735
   Other                         (4,200)  (13,715)  (14,989)  (19,099)
   Corporate                     (3,609)   (2,235)  (13,254)   (9,625)
                               --------- --------- --------- ---------
                                 $8,289    $2,967   $33,430   $36,613
                               ========= ========= ========= =========

Depreciation and Amortization:
   Aerospace Systems             $5,452    $5,131   $19,681   $16,433
   Aftermarket Services           2,132     1,768     8,426     7,433
   Other                            297     1,106     2,276     4,249
   Corporate                         37        18       145       122
                               --------- --------- --------- ---------
                                 $7,918    $8,023   $30,528   $28,237
                               ========= ========= ========= =========

Capital Expenditures:
   Aerospace Systems             $2,103    $2,836   $12,060   $16,183
   Aftermarket Services           2,632     1,943     6,182     5,741
   Other                            326       481       462     3,206
   Corporate                          6        12        62       316
                               --------- --------- --------- ---------
                                 $5,067    $5,272   $18,766   $25,446
                               ========= ========= ========= =========


                     FINANCIAL DATA  (UNAUDITED)

                 TRIUMPH GROUP, INC. AND SUBSIDIARIES
                        (dollars in thousands)

Non-GAAP Financial Measure Disclosures


Earnings before Interest, Taxes, Depreciation and Amortization
("EBITDA") for the three months ended March 31, 2005 was $16.2 million
with a margin of 8.9%. EBITDA for the three months ended March 31,
2004 was $11.0 million with a margin of 6.3%. EBITDA for the twelve
months ended March 31, 2005 was $64.0 million with a margin of 9.3%.
EBITDA for the twelve months ended March 31, 2004 was $64.9 million
with a margin of 10.7%.

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  Twelve Months Ended
                                    March 31,           March 31,
                               ------------------- -------------------
                                 2005      2004      2005      2004
                               --------- --------- --------- ---------
Earnings before Interest,
 Taxes, Depreciation and
 Amortization (EBITDA):

Income from Continuing
 Operations                      $4,870    $1,220   $15,809   $19,410

Add-back:
   Income Tax Expense
    (Benefit)                        50    (1,522)    4,596     4,991
   Interest Expense and Other     3,369     3,269    13,025    12,212
   Depreciation and
    Amortization                  7,918     8,023    30,528    28,237
                               --------- --------- --------- ---------

Earnings before Interest,
 Taxes, Depreciation and
 Amortization ("EBITDA")        $16,207   $10,990   $63,958   $64,850
                               --------- --------- --------- ---------

Net Sales                      $181,874  $175,755  $688,485  $608,315
                               --------- --------- --------- ---------

EBITDA Margin                       8.9%      6.3%      9.3%     10.7%
                               ========= ========= ========= =========

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

SOURCE: Triumph Group, Inc.

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