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Triumph Group Reports Second Quarter Fiscal 2007 Results
  • Net sales for the second quarter fiscal 2007 increased 23% to $226.1 million
  • Operating income for the second quarter fiscal 2007 increased 76% to $23.3 million
  • Net income for the second quarter fiscal 2007 increased 79% to $12.6 million
  • Backlog increased 39% over prior year to $1.1 billion Business Editors

WAYNE, Pa.--(BUSINESS WIRE)--Oct. 25, 2006--Triumph Group, Inc. (NYSE:TGI) today reported that net sales for the second quarter of the fiscal year ending March 31, 2007 totaled $226.1 million, a twenty-three percent increase from last year's second quarter net sales of $183.6 million. Net income for the second quarter of fiscal year 2007 increased seventy-nine percent to $12.6 million, or $0.77 per diluted common share, versus $7.0 million, or $0.44 per diluted common share for the second quarter of the prior year. During the quarter, the company generated $4.6 million of cash flow from operations. Results for the second quarter of fiscal year 2007 also reflected $0.02 per share charge related to stock-based compensation.

Net sales for the first six months of fiscal year 2007 were $448.9 million, a twenty-four percent increase over net sales of $361.3 million last year. Net income for the first six months of fiscal year 2007 increased fifty-five percent to $22.0 million, or $1.35 per diluted common share, compared to net income of $14.2 million, or $0.89 per diluted common share in the prior year period. During the six months, the company generated $5.2 million of cash flow from operations.

Prior year period segment results have been changed to classify certain revenue and costs from the Aftermarket Services segment to the Aerospace Systems segment for the operations of Triumph Fabrications-Phoenix and Triumph Fabrications-Fort Worth due to the fact that most of their product line has been transitioned to aerospace OEM products. The transitioning of these business units resulted in the shift of approximately $5.0 million in revenue and $1.7 million in operating loss for the quarter ended September 30, 2005, previously reported in the Aftermarket Services segment, to the Aerospace Systems segment. Segment results have been adjusted to reflect these changes.

The Aerospace Systems segment reported net sales for the quarter of $179.7 million compared to $145.4 million in the prior year period, an increase of twenty-four percent. Operating income for the second quarter of fiscal year 2007 was $25.3 million, compared to $15.5 million for the prior year period, a sixty-four percent increase. Organic sales growth for the quarter was seventeen percent.

The Aftermarket Services segment reported net sales for the quarter of $47.0 million, compared to $39.4 million in the prior year period, a nineteen percent increase. Operating income for the second quarter of fiscal year 2007 was $1.9 million, compared to $0.5 million for the prior year period, a 264 percent increase. Organic sales growth for the quarter was twelve percent. Operating results for the quarter reflected $0.8 million of start up costs associated with the new Thailand maintenance and repair facility.

Richard C. Ill, Triumph's President and Chief Executive Officer, said, "Our company continued its strong performance during the second quarter driven primarily by excellent growth in revenue, operating income and earnings. The size and quality of our backlog further bolsters our confidence in the outlook for the second half of fiscal year 2007 and beyond."

On September 18, 2006, the company issued and sold $201.3 million in convertible senior subordinated notes in order to prepay its outstanding Senior Notes, including the make-whole premium, fees and expenses in connection with the prepayment, and to repay a portion of the outstanding indebtedness under the company's credit facility. The company will expense the debt prepayment costs of approximately $0.17 per diluted common share as well as the unamortized debt issuance costs related to the Senior Notes of approximately $0.03 per diluted common share in the third quarter of fiscal year 2007. The company prepaid the Senior Notes on October 4, 2006.

Commenting on the outlook for the year, Mr. Ill stated, "Given the strong results in the quarter and year-to-date and our confidence in the remainder of the year, we now expect our full-year earnings per share to be in the range of $2.65 to $2.70, which includes the after-tax impact of the debt prepayment and unamortized debt issuance costs of approximately $0.20 per diluted share."

As previously announced, Triumph Group will hold a conference call on October 26th at 8:00 a.m. (ET) to discuss the fiscal year 2007 second quarter results. The conference call will be available live and archived on the company's website at http://www.triumphgroup.com. An audio replay will be available from October 26th until November 2nd by calling (888) 266-2081 (Domestic) or (703) 925-2533 (International), passcode #975243.

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 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 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 expectations of future performance, profitability, growth and earnings. 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, 2006.



                      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   2006      2005      2006      2005
                               --------- --------- --------- ---------


Net Sales                      $226,122  $183,633  $448,944  $361,330

Operating Income                 23,278    13,218    41,581    26,947

Interest Expense and Other        3,795     3,172     7,527     6,359
Income Tax Expense                6,872     3,002    12,010     6,375
                               --------- --------- --------- ---------

Net Income                      $12,611    $7,044   $22,044   $14,213
                               ========= ========= ========= =========

Earnings Per Share - Basic:

Net Income                        $0.78     $0.44     $1.37     $0.89
                               ========= ========= ========= =========

Weighted average common shares
 outstanding - Basic             16,166    15,910    16,121    15,908
                               ========= ========= ========= =========

Earnings Per Share - Diluted:

Net Income                        $0.77     $0.44     $1.35     $0.89
                               ========= ========= ========= =========

Weighted average common shares
 outstanding - Diluted           16,314    16,056    16,299    16,031
                               ========= ========= ========= =========

Dividends declared and paid
 per common share                 $0.04     $0.00     $0.04     $0.00
                               ========= ========= ========= =========


                      FINANCIAL DATA (UNAUDITED)

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

BALANCE SHEET
                                           September 30,   March 31,
                                               2006          2006
                                           ------------- -------------
                  Assets
  Cash                                         $106,567        $5,698
  Accounts Receivable, net                      157,564       147,780
  Inventory                                     273,591       235,878
  Deferred Income Taxes                           6,868         6,868
  Prepaid Expenses and Other                      6,744         4,894
                                           ------------- -------------
    Current Assets                              551,334       401,118

  Property and Equipment, net                   263,950       237,325
  Goodwill                                      297,301       272,737
  Intangible Assets, net                         48,950        49,424
  Other                                          19,577        14,179
                                           ------------- -------------

  Total Assets                               $1,181,112      $974,783
                                           ============= =============

    Liabilities & Stockholders' Equity

  Accounts Payable                              $84,288       $73,995
  Accrued Expenses                               64,545        68,488
  Income Taxes Payable                            4,232         5,195
  Current Portion of Long-Term Debt              86,496         8,078
                                           ------------- -------------
    Current Liabilities                         239,561       155,756

  Long-Term Debt, less current portion          250,301       153,339
  Deferred Income Taxes and Other                98,378       101,985

  Stockholders' Equity:
    Common Stock, $.001 par value,
     50,000,000 shares authorized,
     16,243,219 and 16,027,324 shares
     issued                                          16            16
    Capital in excess of par value              266,961       260,124
    Treasury Stock, at cost, 1,650 and
     18,311 shares                                    0          (455)
    Accumulated other comprehensive income
     (loss)                                         320          (162)
    Retained earnings                           325,575       304,180
                                           ------------- -------------
      Total Stockholders' Equity                592,872       563,703
                                           ------------- -------------

Total Liabilities and Stockholders' Equity   $1,181,112      $974,783
                                           ============= =============


                      FINANCIAL DATA (UNAUDITED)

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



SEGMENT DATA                   Three Months Ended   Six Months Ended
                                  September 30,       September 30,
                               ------------------- -------------------

                                 2006      2005      2006      2005
                               --------- --------- --------- ---------

Net Sales:
  Aerospace Systems            $179,709  $145,357  $353,902  $283,933
  Aftermarket Services           47,017    39,358    96,484    79,168
  Elimination of inter-segment
   sales                           (604)   (1,082)   (1,442)   (1,771)
                               --------- --------- --------- ---------
                               $226,122  $183,633  $448,944  $361,330
                               ========= ========= ========= =========

Operating Income (Loss):
  Aerospace Systems             $25,348   $15,482   $45,646   $30,882
  Aftermarket Services            1,876       515     3,993     2,687
  Corporate                      (3,946)   (2,779)   (8,058)   (6,622)
                               --------- --------- --------- ---------
                                $23,278   $13,218   $41,581   $26,947
                               ========= ========= ========= =========

Depreciation and Amortization:
  Aerospace Systems              $6,353    $5,864   $12,756   $11,763
  Aftermarket Services            2,407     2,086     4,710     4,086
  Corporate                          67        32       111        64
                               --------- --------- --------- ---------
                                 $8,827    $7,982   $17,577   $15,913
                               ========= ========= ========= =========


Capital Expenditures:
  Aerospace Systems              $8,138    $3,864   $14,872    $6,264
  Aftermarket Services            4,886     1,594    11,158     4,176
  Corporate                          20        19       145        33
                               --------- --------- --------- ---------
                                $13,044    $5,477   $26,175   $10,473
                               ========= ========= ========= =========


                      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 September 30, 2006 was $32.1
 million with a margin of 14.2%. EBITDA for the three months ended
 September 30, 2005 was $21.2 million with a margin of 11.5%. EBITDA
 for the six months ended September 30, 2006 was $59.2 million with a
 margin of 13.2%. EBITDA for the six months ended September 30, 2005
 was $42.9 million with a margin of 11.9%.

Management believes that EBITDA provides the reader a good measure of
 cash generated from the operations of the business before any
 investment in working capital or fixed assets.

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   Six Months Ended
                                  September 30,       September 30,
                               ------------------- -------------------
                                 2006      2005      2006      2005
                               --------- --------- --------- ---------
Earnings before Interest,
 Taxes, Depreciation and
 Amortization (EBITDA):

  Net Income                    $12,611    $7,044   $22,044   $14,213

  Add-back:
    Income Tax Expense            6,872     3,002    12,010     6,375
    Interest Expense and Other    3,795     3,172     7,527     6,359
    Depreciation and
     Amortization                 8,827     7,982    17,577    15,913
                               --------- --------- --------- ---------

  Earnings before Interest,
   Taxes, Depreciation and
   Amortization ("EBITDA")      $32,105   $21,200   $59,158   $42,860

  Net Sales                    $226,122  $183,633  $448,944  $361,330
                               --------- --------- --------- ---------

  EBITDA Margin                    14.2%     11.5%     13.2%     11.9%
                               ========= ========= ========= =========


                      FINANCIAL DATA (UNAUDITED)

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

Non-GAAP Financial
 Measure Disclosures
 (continued)

  Earnings before
  Interest, Taxes,
  Depreciation and
    Amortization
      (EBITDA):            Three Months Ended September 30, 2006
                     -------------------------------------------------
                                              Segment Data
                                   -----------------------------------
                                   Aerospace Aftermarket Corporate /
                         Total      Systems    Services   Eliminations
                     ------------- --------- ----------- -------------

  Net Income              $12,611

  Add-back:
    Income Tax
     Expense                6,872
    Interest Expense
     and Other              3,795
                     -------------

  Operating Income
   (Expense)              $23,278   $25,348      $1,876       ($3,946)

    Depreciation and
     Amortization           8,827     6,353       2,407            67
                     ------------- --------- ----------- -------------

  Earnings (Losses)
   before Interest,
   Taxes,
   Depreciation and
   Amortization
   ("EBITDA")             $32,105   $31,701      $4,283       ($3,879)

  Net Sales              $226,122  $179,709     $47,017         ($604)
                     ============= ========= =========== =============

  EBITDA Margin              14.2%     17.6%        9.1%          n/a
                     ============= ========= =========== =============


  Earnings before
  Interest, Taxes,
  Depreciation and
    Amortization
      (EBITDA):             Six Months Ended September 30, 2006
                     -------------------------------------------------
                                              Segment Data
                                   -----------------------------------
                                   Aerospace Aftermarket Corporate /
                         Total      Systems    Services   Eliminations
                     ------------- --------- ----------- -------------

  Net Income              $22,044

  Add-back:
    Income Tax
     Expense               12,010
    Interest Expense
     and Other              7,527
                     -------------

  Operating Income
   (Expense)              $41,581   $45,646      $3,993       ($8,058)

    Depreciation and
     Amortization          17,577    12,756       4,710           111
                     ------------- --------- ----------- -------------

  Earnings (Losses)
   before Interest,
   Taxes,
   Depreciation and
   Amortization
   ("EBITDA")             $59,158   $58,402      $8,703       ($7,947)

  Net Sales              $448,944  $353,902     $96,484       ($1,442)
                     ============= ========= =========== =============

  EBITDA Margin              13.2%     16.5%        9.0%          n/a
                     ============= ========= =========== =============


                      FINANCIAL DATA (UNAUDITED)

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

Non-GAAP Financial Measure Disclosures (continued)

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,
                                               2006          2006
                                           ------------- -------------

  Calculation of Net Debt
------------------------------------------
  Current Portion                               $86,496        $8,078
  Long-term debt                                250,301       153,339
                                           ------------- -------------
  Total Debt                                    336,797       161,417
  Less: Cash                                    106,567         5,698
                                           ------------- -------------
  Net Debt                                     $230,230      $155,719
                                           ============= =============

  Calculation of Capital
------------------------------------------
  Net Debt                                     $230,230      $155,719
  Stockholders' equity                          592,872       563,703
                                           ------------- -------------
  Total Capital                                $823,102      $719,422
                                           ============= =============

  Percent of Net Debt to Capital                   28.0%         21.6%

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

SOURCE: Triumph Group, Inc.