News Column

Triumph Group Reports First Quarter Fiscal 2015 Earnings; Net sales for first quarter fiscal year 2015 were $896.9 million

July 31, 2014



ENP Newswire - 31 July 2014

Release date- 30072014 - Operating income for first quarter fiscal year 2015 was $240.5 million and included a settlement gain, net of legal fees, of $134.7 million related to the Eaton litigation and $8.7 million of costs related to the Jefferson Street/Red Oak facility transition.

Excluding these items, operating income was $114.6 million, reflecting an operating margin of 13%

Net income for first quarter fiscal year 2015 was $128.2 million, or $2.46 per diluted share, which included non-recurring items totaling $103.3 million pre-tax ($66.1 million after tax or $1.27 per diluted share). Excluding these items, earnings per share were $1.19 per diluted share

Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) for first quarter fiscal year 2015 were $134.4 million, reflecting an Adjusted EBITDA margin of 15%

Cash flow utilization from operations for first quarter fiscal 2015 was $6.8 million prior to pension contributions of $45.2 million

BERWYN, Pa.--(BUSINESS WIRE)--Jul. 30, 2014-- Triumph Group, Inc. (NYSE: TGI) today reported financial results for its first quarter of fiscal year 2015, which ended June 30, 2014.

'Triumph's fiscal year is off to a solid start with adjusted first quarter results coming in slightly above the upper end of our guidance,' said Jeffry D. Frisby, Triumph's President and Chief Executive Officer. 'We had a productive quarter, having successfully completed the acquisition of GE Aviation's hydraulic actuation business and transitioning into the Red Oak facility. In addition, same store backlog grew both sequentially and year over year, demonstrating the strong demand for our products and services from our global customers. The 747-8 program remains on schedule with performance in line with our expectations. We remain focused on execution relative to customer commitments while increasing profitability, expanding margins and generating strong cash flow in order to maximize returns to our shareholders.'

Net sales for the fiscal first quarter of 2015 were $896.9 million, a five percent decrease compared to fiscal first quarter 2014 net sales of $943.7 million. Organic sales for the quarter decreased six percent primarily due to production rate cuts on the 747-8 and V-22 programs, lower revenues on the 767 program and the shifting of several C-17 shipments into the second quarter of fiscal year 2015.

Net income for the first quarter of fiscal year 2015 was $128.2 million, or $2.46 per diluted share, compared to $79.0 million, or $1.50 per diluted share, for the first quarter of the prior fiscal year. Results in the first quarter of fiscal year 2015 included $8.7 million pre-tax ($5.6 million after tax or $0.11 per diluted share) of costs related to the Jefferson Street/Red Oak facility transition and $22.6 million pre-tax ($14.5 million after tax or $0.28 per diluted share) of costs related to the refinancing of the Senior Notes due 2018. Also included in the quarter's results was a gain of $134.7 million pre-tax ($86.2 million after tax or $1.65 per diluted share), net of legal fees, related to the settlement of the Eaton litigation. Excluding these non-recurring items totaling $103.3 million pre-tax ($66.1 million after tax or $1.27 per diluted share), earnings per share for the first quarter of fiscal year 2015 were $1.19 per diluted share. The prior fiscal year's quarter included approximately $3.6 million pre-tax ($2.3 million after tax or $0.04 per diluted share) of non-recurring costs related to the Jefferson Street facility move. Excluding these items, earnings per share for the prior fiscal year's first quarter were $1.54 per diluted share. The number of shares used in computing diluted earnings per share for the quarter was 52.1 million shares.

Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) for the first quarter of fiscal year 2015 were $134.4 million and reflected an Adjusted EBITDA margin of fifteen percent. This compares to Adjusted EBITDA of $168.1 million and an Adjusted EBITDA margin of eighteen percent in the prior fiscal year's first quarter.

For the quarter ended June 30, 2014, cash flow utilization from operations was $6.8 million before pension contributions of $45.2 million; after these contributions, cash flow utilization from operations was $52.1 million. As previously announced, the company enhanced both the strength and flexibility of its balance sheet by refinancing its high yield debt due 2018 and redeeming its 2.625% Convertible Senior Subordinated Notes due 2026, which effectively resulted in the repurchase of an approximate 284,000 shares. This was in addition to the repurchase of 750,000 shares of stock during the quarter under the company's existing 5.5 million share repurchase authorization. As of June 30, 2014, approximately 4.5 million shares remained under the share repurchase authorization.

Segment Results

Aerostructures

The Aerostructures segment reported net sales of $611.9 million in the first quarter of fiscal year 2015 compared to $651.9 million in the prior year period. Organic sales for the quarter declined 6% primarily due to production rate cuts on the 747-8 program, lower revenues on the 767 program and the shifting of several C-17 shipments into the second quarter of fiscal year 2015, as previously discussed. Operating income for the first quarter of fiscal year 2015 was $70.9 million, compared to $100.4 million for the prior year period, and included a net unfavorable cumulative catch-up adjustment on long-term contracts of $0.7 million. The segment's operating results for the quarter also included $8.7 million of pre-tax charges related to the Jefferson Street/Red Oak facility transition. The segment's operating margin for the quarter was twelve percent. Excluding the Jefferson Street/Red Oak facility transition costs, the segment's operating margin for the quarter was thirteen percent.

Aerospace Systems

The Aerospace Systems segment reported net sales of $219.9 million in the first quarter of fiscal year 2015 compared to $219.5 million in the prior year period. Organic sales for the quarter declined 5% primarily due to production rate cuts on the V-22 program and decreased military sales. Operating income for the first quarter of fiscal year 2015 was $37.4 million compared to $42.6 million for the prior year period. The segment's operating margin for the quarter was seventeen percent.

Aftermarket Services

The Aftermarket Services segment reported net sales in the first quarter of fiscal year 2015 of $67.6 million compared to $74.4 million in the prior year period. Organic sales for the quarter declined 9% due to the timing of completion of certain contracts and continued military weakness. Operating income for the first quarter of fiscal year 2015 was $10.5 million compared to $11.2 million for the prior year period. Operating margin for the quarter was sixteen percent.

Outlook

Mr. Frisby continued, 'We expect to see our performance strengthen as we move through fiscal 2015, particularly in the second half of the year. We remain focused on execution and supporting our vision to expand Triumph's global presence and achieve balance in our segments, end markets and customers. We will continue to leverage our deep customer relationships and pursue strategic growth opportunities to create additional value for shareholders.'

Based on current projected aircraft production rates and a weighted average share count of 51.6 million shares, the company reaffirmed its fiscal year 2015 revenue guidance of $3.8 to $3.9 billion and its full year earnings per share guidance of $5.75 to $5.90 per diluted share, excluding the non-recurring items. The company reaffirmed its Adjusted EBITDA guidance for fiscal year 2015 of $665.0 million to $680.0 million, which excludes the impact of non-recurring items, and expects to generate free cash flow available for debt reduction, acquisitions and share repurchases after pension contributions for the fiscal year of approximately $385.0 million.

Adjusted Earnings Per Share - Non-GAAP $ 5.75 - $5.90



Non-Recurring Costs/(Income):

Jefferson Street/Red Oak Facility Transition Costs $0.31

Refinancing Costs Related to the Senior Notes Due 2018 $0.28

Settlement Gain, Net of Legal Fees, Related to Eaton Litigation $1.67

Earnings Per Share - GAAP $6.83 - $6.98



Conference Call

Triumph Group will hold a conference call tomorrow, July 31 at 8:30 a.m. (ET) to discuss the fiscal year 2015 first quarter 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 July 31st to August 7th by calling (888) 266-2081 (Domestic) or (703) 925-2533 (International), passcode #1640970.

About Triumph Group

Triumph Group, Inc. headquartered in Berwyn, 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 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 statements of expectations of or assumptions about future aerospace market conditions, aircraft production rates, financial and operational performance, revenue and earnings growth, profitability and earnings results for fiscal year 2015. 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, 2014.

FINANCIAL DATA (UNAUDITED)

TRIUMPH GROUP, INC. AND SUBSIDIARIES: See Full Press Release at:

http://ir.triumphgroup.com/phoenix.zhtml?c=61870&p=irol-newsArticle&ID=1953321&highlight=

Source: Triumph Group, Inc.

Triumph Group, Inc.

Sheila G. Spagnolo

Vice President, Tax & Investor Relations

610-251-1000

sspagnolo@triumphgroup.com


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Source: ENP Newswire


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