BERWYN, Pa., Aug. 4, 2020 /PRNewswire/ -- Triumph Group,
Inc. (NYSE: TGI) ("Triumph" or the "Company")
today reported financial results for its first quarter of fiscal
year 2021, which ended June 30,
2020.
First Quarter Fiscal 2021
- Net sales of $495.1 million
- Operating loss of $252.4 million
with operating margin of (51.0%) and included an impairment charge
of $252.4 million; adjusted operating
income of $15.4 million with adjusted
operating margin of 3.1%
- Net loss of $277.3 million, or
($5.35) per share; adjusted net loss
of $9.5 million, or ($0.19) per share
- Cash flow used in operations of ($197.5)
million, and free cash use of ($205.2) million
Full-Year Fiscal 2021 Net Sales Guidance
- Net sales between $1.8 -
$1.9 billion
"For the first quarter of our fiscal year, organic revenue
decreased by 29% due primarily to expected declines in Aerospace
Structures associated with planned reductions from our portfolio
transformation and the COVID-19 pandemic. Systems &
Support gross margins were in line with the prior year, benefitting
from increased military volumes, improved operational efficiencies
and cost reduction initiatives," stated Daniel J. Crowley, Triumph's president and chief
executive officer. "We
continued executing our plan to exit legacy programs in Aerospace
Structures with the recent announcements of the sales of our G650
wing kitting and engineering services program to Gulfstream and of
our two Composite Structures factories to Arlington Capital
Partners. These transactions will benefit Triumph in fiscal 2021
and beyond."
Mr. Crowley continued, "Our total cash usage for the first
quarter was largely associated with working capital expansion, yet
contained by the actions we implemented early in the quarter to
conserve cash. We expect our cash use to slow in the second
quarter and recover in the second half as we exit the last of our
cash burning programs and begin to generate positive free cash
flow. We are continuing to identify further cost reduction actions
to enhance our liquidity position and ensure financial flexibility
in the current operating environment while supporting the needs of
our customers."
Mr. Crowley concluded, "The steps we took this quarter build on
our momentum and drive improved profitability and cash flow to
become a more predictable and diverse business. As we look
out to the rest of the year, Triumph remains focused on protecting
the health and safety of our people, conserving our cash and
partnering with our customers to ensure we are best positioned for
recovery for the benefit of all our stakeholders."
First Quarter Fiscal Year 2021 Overview
After accounting for the impact of the divestitures, sales for
the first quarter of fiscal 2021 were down 29% organically from the
comparable prior year period. The decline was driven by
planned reductions on sunsetting and transitioned programs, impacts
of the COVID-19 pandemic and resulting production rate decreases
primarily on commercial programs, partially offset by increases in
military programs.
First quarter operating loss of $252.4
million included a $252.4
million impairment charge of the legacy Aerospace Structures
long-lived assets, and $15.4 million
of restructuring costs associated with reductions in work
force. Net loss for the first quarter of fiscal year 2021 was
$277.3 million, or ($5.35) per share. On an adjusted basis,
net loss was $9.5 million, or
$(0.19) per share.
Triumph's results included the following:
($
millions except EPS)
|
|
Pre-tax
|
|
|
After-tax
|
|
|
EPS
|
|
Loss from
Continuing Operations - GAAP
|
|
$
|
(276.5)
|
|
|
$
|
(277.3)
|
|
|
$
|
(5.35)
|
|
Impairment of
long-lived assets
|
|
|
252.4
|
|
|
|
252.4
|
|
|
|
4.87
|
|
Restructuring costs
(cash)
|
|
|
15.4
|
|
|
|
15.4
|
|
|
|
0.30
|
|
Adjusted Loss from
Continuing Operations - non-GAAP *
|
|
$
|
(8.6)
|
|
|
$
|
(9.5)
|
|
|
$
|
(0.19)
|
|
* Differences due to
rounding
|
The number of shares used in computing earnings per share for
the first quarter of 2021 was 51.9 million.
Backlog, which represents the next 24 months of actual purchase
orders with firm delivery dates or contract requirements, was
$2.7 billion, down compared to the
prior year period and on a sequential basis due to sunsetting
programs and recent production rate reductions, but partially
offset by military program increases in Systems &
Support.
For the first quarter of fiscal 2021, cash flow used in
operations was $(197.5) million,
reflecting increasing working capital and liquidation of
approximately $10.0 million in prior
period advances against current period
deliveries.
Outlook
Based on anticipated aircraft production rates and MRO demand,
including the impacts of pending program exits and no additional
extended shut-down of operations due to the pandemic, the Company
expects that net sales for fiscal year 2021 will be approximately
$1.8 to $1.9
billion.
The Company anticipates that the trends in cash used in
operations that were experienced in the first quarter of fiscal
2021 to continue, but to a lesser degree in the second quarter, and
expects it to recover somewhat in the second half of the fiscal
year. Therefore, the Company expects cash used in operations
and free cash use to be moderately higher for the full fiscal
year.
The Company's outlook excludes the impact of the recent
announcements of the sales of our G650 program and our Composite
Structures factories and any potential future divestitures.
Conference Call
Triumph will hold a conference call today, August 4th, at 5:30 p.m. (ET) to discuss the first quarter of
fiscal year 2021 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, and
the presentation has been posted on the Company's website
at http://ir.triumphgroup.com/QuarterlyResults. An audio
replay will be available from August 4th to
August 11th by calling (855) 859-2056 (Domestic) or (404)
537-3406 (International), passcode #8498495.
About Triumph
Triumph Group, Inc., headquartered in Berwyn, Pennsylvania, designs, engineers,
manufactures, repairs and overhauls a broad portfolio of aerospace
and defense systems, components and structures. The company serves
the global aviation industry, including original equipment
manufacturers and the full spectrum of military and commercial
aircraft operators.
More information about Triumph can be found on the Company's
website at www.triumphgroup.com.
Forward Looking Statements
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 financial and operational
performance, revenues, earnings per share, cash flow or use, cost
savings and operational efficiencies and organizational
restructurings. 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, 2020.
Widespread health developments, including the recent global
coronavirus (COVID-19), and the responses thereto (such as
voluntary and in some cases, mandatory quarantines as well as shut
downs and other restrictions on travel and commercial, social and
other activities) could adversely and materially affect, among
other things, the economic and financial markets and labor
resources of the countries in which we operate, our manufacturing
and supply chain operations, commercial operations and sales force,
administrative personnel, third-party service providers, business
partners and customers and the demand for our products, which could
result in a material adverse effect on our business, financial
conditions and results of operations.
FINANCIAL DATA (UNAUDITED) ON FOLLOWING
PAGES
FINANCIAL DATA
(UNAUDITED)
|
|
TRIUMPH
GROUP, INC. AND SUBSIDIARIES
|
(in thousands,
except per share data)
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
June
30,
|
|
CONDENSED
STATEMENTS OF OPERATIONS
|
|
|
|
|
|
2020
|
|
|
2019
|
|
Net sales
|
|
|
|
|
|
$
|
495,077
|
|
|
$
|
730,231
|
|
Cost of sales
(excluding depreciation shown below)
|
|
|
|
|
|
|
393,843
|
|
|
|
582,233
|
|
Selling, general
& administrative
|
|
|
|
|
|
|
57,203
|
|
|
|
62,337
|
|
Depreciation &
amortization
|
|
|
|
|
|
|
28,602
|
|
|
|
44,050
|
|
Impairment of
long-lived assets
|
|
|
|
|
|
|
252,382
|
|
|
|
—
|
|
Restructuring
costs
|
|
|
|
|
|
|
15,439
|
|
|
|
2,964
|
|
Loss on sale of
assets and businesses, net
|
|
|
|
|
|
|
—
|
|
|
|
3,136
|
|
Operating (loss)
income
|
|
|
|
|
|
|
(252,392)
|
|
|
|
35,511
|
|
Interest expense and
other, net
|
|
|
|
|
|
|
34,957
|
|
|
|
27,491
|
|
Non-service defined
benefit income
|
|
|
|
|
|
|
(10,888)
|
|
|
|
(14,875)
|
|
Income tax
expense
|
|
|
|
|
|
|
853
|
|
|
|
4,807
|
|
Net (loss)
Income
|
|
|
|
|
|
$
|
(277,314)
|
|
|
$
|
18,088
|
|
(Loss) earnings per
share - basic:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
|
|
|
|
|
$
|
(5.35)
|
|
|
$
|
0.36
|
|
Weighted average
common shares outstanding - basic
|
|
|
|
|
|
|
51,860
|
|
|
|
49,854
|
|
(Loss) earnings per
share - diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
|
|
|
|
|
$
|
(5.35)
|
|
|
$
|
0.36
|
|
Weighted average
common shares outstanding - diluted
|
|
|
|
|
|
|
51,860
|
|
|
|
50,295
|
|
Dividends declared
and paid per common share
|
|
|
|
|
|
$
|
—
|
|
|
$
|
0.04
|
|
(Continued)
|
FINANCIAL DATA
(UNAUDITED)
|
|
TRIUMPH
GROUP, INC. AND SUBSIDIARIES
|
(dollars in
thousands, except share data)
|
|
BALANCE
SHEETS
|
|
Unaudited
June
30,
2020
|
|
|
Audited
March
31,
2020
|
|
Assets
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
30,909
|
|
|
$
|
485,463
|
|
Accounts receivable,
net
|
|
|
256,848
|
|
|
|
359,487
|
|
Contract
assets
|
|
|
203,984
|
|
|
|
244,417
|
|
Inventory,
net
|
|
|
467,105
|
|
|
|
452,976
|
|
Assets held for
sale
|
|
|
195,073
|
|
|
|
—
|
|
Prepaid and other
current assets
|
|
|
18,708
|
|
|
|
19,289
|
|
Current
assets
|
|
|
1,172,627
|
|
|
|
1,561,632
|
|
Property and
equipment, net
|
|
|
370,820
|
|
|
|
418,141
|
|
Goodwill
|
|
|
513,392
|
|
|
|
513,527
|
|
Intangible assets,
net
|
|
|
120,928
|
|
|
|
381,968
|
|
Other, net
|
|
|
88,553
|
|
|
|
105,065
|
|
Total
assets
|
|
$
|
2,266,320
|
|
|
$
|
2,980,333
|
|
Liabilities &
Stockholders' Deficit
|
|
|
|
|
|
|
|
|
Current portion of
long-term debt
|
|
$
|
7,555
|
|
|
$
|
7,336
|
|
Accounts
payable
|
|
|
299,269
|
|
|
|
457,694
|
|
Contract
liabilities
|
|
|
199,463
|
|
|
|
295,320
|
|
Accrued
expenses
|
|
|
199,267
|
|
|
|
227,403
|
|
Liabilities related
to assets held for sale
|
|
|
83,806
|
|
|
|
—
|
|
Current
liabilities
|
|
|
789,360
|
|
|
|
987,753
|
|
Long-term debt, less
current portion
|
|
|
1,557,066
|
|
|
|
1,800,171
|
|
Accrued pension and
post-retirement benefits, noncurrent
|
|
|
643,256
|
|
|
|
660,065
|
|
Deferred income
taxes, noncurrent
|
|
|
7,487
|
|
|
|
7,439
|
|
Other noncurrent
liabilities
|
|
|
316,532
|
|
|
|
306,169
|
|
Stockholders'
Deficit:
|
|
|
|
|
|
|
|
|
Common stock, $.001
par value, 100,000,000 shares authorized,
52,460,920 and
52,460,920 shares issued
|
|
|
52
|
|
|
|
52
|
|
Capital in excess of
par value
|
|
|
796,186
|
|
|
|
804,830
|
|
Treasury stock, at
cost, 458,710 and 602,831 shares
|
|
|
(25,188)
|
|
|
|
(36,217)
|
|
Accumulated other
comprehensive loss
|
|
|
(710,616)
|
|
|
|
(719,428)
|
|
Accumulated
deficit
|
|
|
(1,107,815)
|
|
|
|
(830,501)
|
|
Total stockholders'
deficit
|
|
|
(1,047,381)
|
|
|
|
(781,264)
|
|
Total liabilities and
stockholders' deficit
|
|
$
|
2,266,320
|
|
|
$
|
2,980,333
|
|
(Continued)
|
FINANCIAL DATA
(UNAUDITED)
|
|
TRIUMPH
GROUP, INC. AND SUBSIDIARIES
|
(dollars in
thousands, except share data)
|
|
|
|
Three Months Ended
June 30,
|
|
CASH
FLOWS
|
|
2020
|
|
|
2019
|
|
Operating
Activities
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
|
$
|
(277,314)
|
|
|
$
|
18,088
|
|
Adjustments to
reconcile net (loss) income to net cash (used in) provided
by
operating activities:
|
|
|
|
|
|
|
|
|
Depreciation &
amortization
|
|
|
28,602
|
|
|
|
44,050
|
|
Impairment of
long-lived assets
|
|
|
252,382
|
|
|
|
—
|
|
Amortization of
acquired contract liabilities
|
|
|
(10,987)
|
|
|
|
(16,939)
|
|
Loss on sale of assets
& businesses, net
|
|
|
—
|
|
|
|
3,136
|
|
Other amortization
included in interest expense
|
|
|
2,191
|
|
|
|
1,958
|
|
Provision for credit
losses
|
|
|
3,280
|
|
|
|
671
|
|
Provision for deferred
income taxes
|
|
|
—
|
|
|
|
3,307
|
|
Employee stock-based
compensation
|
|
|
2,786
|
|
|
|
2,426
|
|
Changes in assets and
liabilities, excluding the effects of
acquisitions/divestitures:
|
|
|
|
|
|
|
|
|
Trade and other
receivables
|
|
|
86,004
|
|
|
|
41,247
|
|
Contract
assets
|
|
|
(63,391)
|
|
|
|
2,767
|
|
Inventories
|
|
|
(33,330)
|
|
|
|
(56,623)
|
|
Prepaid expenses and
other current assets
|
|
|
549
|
|
|
|
12,721
|
|
Accounts payable,
accrued expenses, and contract liabilities
|
|
|
(184,114)
|
|
|
|
(35,426)
|
|
Accrued pension and
other postretirement benefits
|
|
|
(3,526)
|
|
|
|
(15,792)
|
|
Other
|
|
|
(665)
|
|
|
|
(573)
|
|
Net cash (used in)
provided by operating activities
|
|
|
(197,533)
|
|
|
|
5,018
|
|
Investing
Activities
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
|
(7,723)
|
|
|
|
(8,090)
|
|
Proceeds from
(payments on) sale of assets and businesses
|
|
|
792
|
|
|
|
(2,570)
|
|
Net cash used in
investing activities
|
|
|
(6,931)
|
|
|
|
(10,660)
|
|
Financing
Activities
|
|
|
|
|
|
|
|
|
Net decrease in
revolving credit facility
|
|
|
(225,000)
|
|
|
|
(30,000)
|
|
Proceeds from
issuance of long-term debt and finance leases
|
|
|
6,300
|
|
|
|
5,600
|
|
Repayment of debt and
finance lease obligations
|
|
|
(27,468)
|
|
|
|
(30,572)
|
|
Payment of deferred
financing costs
|
|
|
(4,277)
|
|
|
|
(104)
|
|
Dividends
paid
|
|
|
—
|
|
|
|
(1,998)
|
|
Repurchase of
restricted shares for minimum tax obligation
|
|
|
(474)
|
|
|
|
(1,043)
|
|
Net cash used in
financing activities
|
|
|
(250,919)
|
|
|
|
(58,117)
|
|
Effect of exchange
rate changes on cash
|
|
|
829
|
|
|
|
(121)
|
|
Net change in
cash
|
|
|
(454,554)
|
|
|
|
(63,880)
|
|
Cash and equivalents
at beginning of period
|
|
|
485,463
|
|
|
|
92,807
|
|
Cash and equivalents
at end of period
|
|
$
|
30,909
|
|
|
$
|
28,927
|
|
(Continued)
|
FINANCIAL DATA
(UNAUDITED)
|
|
TRIUMPH GROUP,
INC. AND SUBSIDIARIES
|
(dollars in
thousands)
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
June
30,
|
|
SEGMENT
DATA
|
|
|
|
|
|
2020
|
|
|
2019
|
|
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
Systems &
Support
|
|
|
|
|
|
$
|
239,887
|
|
|
$
|
313,605
|
|
Aerospace
Structures
|
|
|
|
|
|
|
257,877
|
|
|
|
419,178
|
|
Elimination of
inter-segment sales
|
|
|
|
|
|
|
(2,687)
|
|
|
|
(2,552)
|
|
|
|
|
|
|
|
$
|
495,077
|
|
|
$
|
730,231
|
|
Operating (loss)
income:
|
|
|
|
|
|
|
|
|
|
|
|
|
Systems &
Support
|
|
|
|
|
|
$
|
25,431
|
|
|
$
|
44,048
|
|
Aerospace
Structures
|
|
|
|
|
|
|
(256,120)
|
|
|
|
12,283
|
|
Corporate
|
|
|
|
|
|
|
(18,917)
|
|
|
|
(18,394)
|
|
Share-based
compensation expense
|
|
|
|
|
|
|
(2,786)
|
|
|
|
(2,426)
|
|
|
|
|
|
|
|
$
|
(252,392)
|
|
|
$
|
35,511
|
|
Operating margin
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Systems &
Support
|
|
|
|
|
|
|
10.6
|
%
|
|
|
14.0
|
%
|
Aerospace
Structures
|
|
|
|
|
|
|
(99.3)
|
%
|
|
|
2.9
|
%
|
Consolidated
|
|
|
|
|
|
|
(51.0)
|
%
|
|
|
4.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization^:
|
|
|
|
|
|
|
|
|
|
|
|
|
Systems &
Support
|
|
|
|
|
|
$
|
8,356
|
|
|
$
|
8,157
|
|
Aerospace
Structures
|
|
|
|
|
|
|
271,772
|
|
|
|
35,059
|
|
Corporate
|
|
|
|
|
|
|
856
|
|
|
|
834
|
|
|
|
|
|
|
|
$
|
280,984
|
|
|
$
|
44,050
|
|
Amortization of
acquired contract liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Systems &
Support
|
|
|
|
|
|
$
|
(3,719)
|
|
|
$
|
(8,125)
|
|
Aerospace
Structures
|
|
|
|
|
|
|
(7,268)
|
|
|
|
(8,814)
|
|
|
|
|
|
|
|
$
|
(10,987)
|
|
|
$
|
(16,939)
|
|
Capital
expenditures:
|
|
|
|
|
|
|
|
|
|
|
|
|
Systems &
Support
|
|
|
|
|
|
$
|
6,283
|
|
|
$
|
3,884
|
|
Aerospace
Structures
|
|
|
|
|
|
|
1,029
|
|
|
|
3,973
|
|
Corporate
|
|
|
|
|
|
|
411
|
|
|
|
233
|
|
|
|
|
|
|
|
$
|
7,723
|
|
|
$
|
8,090
|
|
^ includes long-lived
asset impairment charge
|
|
|
|
|
|
|
|
|
|
|
|
|
(Continued)
FINANCIAL DATA (UNAUDITED)
TRIUMPH GROUP, INC. AND
SUBSIDIARIES
(dollars in thousands)
Non-GAAP Financial Measure Disclosures
We prepare and publicly release quarterly unaudited financial
statements prepared in accordance with GAAP. In accordance with
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
Adjusted EBITDA and Adjusted EBITDAP, which is our net income
before interest, income taxes, amortization of acquired contract
liabilities, curtailments, settlements and special termination
benefits, legal settlements, depreciation and amortization and
Adjusted EBITDA, less pension & other postretirement benefits.
We disclose Adjusted EBITDA and Adjusted EBITDAP on a consolidated
and Adjusted EBITDAP 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 Adjusted EBITDA and Adjusted EBITDAP as operating
performance measure and as such we believe that the GAAP financial
measure most directly comparable to it is net income. In
calculating Adjusted EBITDA and Adjusted EBITDAP, we exclude from
net income 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. Adjusted EBITDA and
Adjusted EBITDAP are not measurements 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 Adjusted EBITDA or
Adjusted EBITDAP as substitutes 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 Adjusted
EBITDA and Adjusted EBITDAP to net income 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
Adjusted EBITDA and Adjusted EBITDAP.
Adjusted EBITDA and Adjusted EBITDAP 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 20
years expanding our product and service capabilities partially
through acquisitions of complementary businesses. Due to the
expansion of our operations, which included acquisitions, our net
income has included significant charges for depreciation and
amortization. Adjusted EBITDA and Adjusted EBITDAP exclude
these charges and provide meaningful information about the
operating performance of our business, apart from charges for
depreciation and amortization. We believe the disclosure of
Adjusted EBITDA and Adjusted EBITDAP helps investors meaningfully
evaluate and compare our performance from quarter to quarter and
from year to year. We also believe Adjusted EBITDA and Adjusted
EBITDAP is a measure of our ongoing operating performance because
the isolation of non-cash income and expenses, such as amortization
of acquired contract liabilities, 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 Adjusted
EBITDA and Adjusted EBITDAP to provide a financial measure by which
to compare our operating performance against that of other
companies in our industry.
Set forth below are descriptions of the financial items that
have been excluded from our net income to calculate Adjusted EBITDA
and Adjusted EBITDAP and the material limitations associated with
using this non-GAAP financial measure as compared to net
income:
- Divestitures may be useful for investors to consider because
they reflect gains or losses from sale of operating units. We do
not believe these earnings necessarily reflect the current and
ongoing cash earnings related to our operations.
- Legal settlements may be useful to investors to consider
because they reflect gains or losses from disputes with third
parties. We do not believe that these earnings necessarily reflect
the current and ongoing cash earnings related to our
operations.
- Non-service defined benefit income (inclusive of the adoption
of ASU 2017-07 and certain pension related transactions such as
curtailments, settlements, early retirement or other incentives)
may be useful to investors to consider because they represent the
cost of post-retirement benefits to plan participants, net of the
assumption of returns on the plan's assets and are not indicative
of the cash paid for such benefits. We do not believe these
earnings (expenses) necessarily reflect the current and ongoing
cash earnings related to our operations.
- Amortization of acquired contract liabilities may be useful for
investors to consider because it represents the non-cash earnings
on the fair value of below market contracts acquired through
acquisitions. We do not believe these earnings necessarily reflect
the current and ongoing cash earnings related to our
operations.
- Amortization expenses (including goodwill and intangible asset
impairments) may be useful for investors to consider because it
represents the estimated attrition of our acquired customer base
and the diminishing value of product rights and licenses. We do not
believe these charges necessarily reflect the current and ongoing
cash charges related to our operating cost structure.
- Depreciation may be useful for investors to consider because
they generally represent the wear and tear on our property and
equipment used in our operations. We do not believe these charges
necessarily reflect the current and ongoing cash charges related to
our operating cost structure.
- The amount of interest expense and other we incur may be useful
for investors to consider and may result in current cash inflows or
outflows. However, we do not consider the amount of interest
expense and other to be a representative component of the
day-to-day operating performance of our business.
- Income tax expense may be useful for investors to consider
because it generally represents the taxes which may be payable for
the period and the change in deferred income taxes during the
period and may reduce the amount of funds otherwise available for
use in our business. However, we do not consider the amount of
income tax expense to be a representative component of the
day-to-day operating performance of our business.
Management compensates for the above-described limitations of
using non-GAAP measures by using a non-GAAP measure only to
supplement our GAAP results and to provide additional information
that is useful to gain an understanding of the factors and trends
affecting our business.
(Continued)
|
FINANCIAL DATA
(UNAUDITED)
|
|
TRIUMPH GROUP,
INC. AND SUBSIDIARIES
|
(dollars in
thousands)
|
|
The following table
shows our Adjusted EBITDA and Adjusted EBITDAP reconciled to our
net income for the
indicated periods (in thousands):
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
June
30,
|
|
Adjusted Earnings
before Interest, Taxes, Depreciation,
Amortization, and
Pension (Adjusted EBITDAP):
|
|
|
|
|
|
2020
|
|
|
2019
|
|
Net (loss)
income
|
|
|
|
|
|
$
|
(277,314)
|
|
|
$
|
18,088
|
|
Add-back:
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
|
|
|
|
|
853
|
|
|
|
4,807
|
|
Interest expense and
other, net
|
|
|
|
|
|
|
34,957
|
|
|
|
27,491
|
|
Loss on sales of
assets and businesses, net
|
|
|
|
|
|
|
—
|
|
|
|
3,136
|
|
Amortization of
acquired contract liabilities
|
|
|
|
|
|
|
(10,987)
|
|
|
|
(16,939)
|
|
Depreciation and
amortization^
|
|
|
|
|
|
|
280,984
|
|
|
|
44,050
|
|
Adjusted Earnings
before Interest, Taxes, Depreciation
and
Amortization ("Adjusted EBITDA")
|
|
|
|
|
|
$
|
28,493
|
|
|
$
|
80,633
|
|
Non-service defined
benefit income (excluding settlements)
|
|
|
|
|
|
|
(10,888)
|
|
|
|
(14,875)
|
|
Adjusted Earnings
before Interest, Taxes, Depreciation
and
Amortization, and Pension ("Adjusted EBITDAP")
|
|
|
|
|
|
$
|
17,605
|
|
|
$
|
65,758
|
|
Net sales
|
|
|
|
|
|
$
|
495,077
|
|
|
$
|
730,231
|
|
Net (loss) income
margin
|
|
|
|
|
|
|
(56.0)
|
%
|
|
|
2.5
|
%
|
Adjusted EBITDAP
margin
|
|
|
|
|
|
|
3.6
|
%
|
|
|
9.2
|
%
|
^ includes long-lived
asset impairment charge
|
|
|
|
|
|
|
|
|
|
|
|
|
(Continued)
|
FINANCIAL DATA
(UNAUDITED)
|
|
TRIUMPH GROUP,
INC. AND SUBSIDIARIES
|
(dollars in
thousands)
|
|
Non-GAAP Financial
Measure Disclosures (continued)
|
|
|
|
Three Months Ended
June 30, 2020
|
|
|
|
|
|
|
|
Segment
Data
|
|
Adjusted Earnings
before Interest, Taxes, Depreciation,
Amortization, and
Pension (EBITDAP):
|
|
Total
|
|
|
Systems
&
Support
|
|
|
Aerospace
Structures
|
|
|
Corporate/
Eliminations*
|
|
Net loss
|
|
$
|
(277,314)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add-back:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-service defined
benefit income
|
|
|
(10,888)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
|
853
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense and
other, net
|
|
|
34,957
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
$
|
(252,392)
|
|
|
$
|
25,431
|
|
|
$
|
(256,120)
|
|
|
$
|
(21,703)
|
|
Amortization of
acquired contract liabilities
|
|
|
(10,987)
|
|
|
|
(3,719)
|
|
|
|
(7,268)
|
|
|
|
—
|
|
Depreciation and
amortization
|
|
|
280,984
|
|
|
|
8,356
|
|
|
|
271,772
|
|
|
|
856
|
|
Adjusted Earnings
(Losses) before Interest, Taxes,
Depreciation and Amortization, and Pension
("Adjusted EBITDAP")
|
|
$
|
17,605
|
|
|
$
|
30,068
|
|
|
$
|
8,384
|
|
|
$
|
(20,847)
|
|
Net sales
|
|
$
|
495,077
|
|
|
$
|
239,887
|
|
|
$
|
257,877
|
|
|
$
|
(2,687)
|
|
Adjusted EBITDAP
margin
|
|
|
3.6
|
%
|
|
|
12.7
|
%
|
|
|
3.3
|
%
|
|
n/a
|
|
|
|
Three Months Ended
June 30, 2019
|
|
|
|
|
|
|
|
Segment
Data
|
|
Adjusted Earnings before Interest, Taxes,
Depreciation,
Amortization, and
Pension (EBITDAP):
|
|
Total
|
|
|
Systems
&
Support
|
|
|
Aerospace
Structures
|
|
|
Corporate/
Eliminations*
|
|
Net income
|
|
$
|
18,088
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add-back:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-service defined
benefit income
|
|
|
(14,875)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
|
4,807
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense and
other, net
|
|
|
27,491
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss)
income
|
|
$
|
35,511
|
|
|
$
|
44,048
|
|
|
$
|
12,283
|
|
|
$
|
(20,820)
|
|
Loss on sales of
assets & businesses, net
|
|
|
3,136
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3,136
|
|
Amortization of
acquired contract liabilities
|
|
|
(16,939)
|
|
|
|
(8,125)
|
|
|
|
(8,814)
|
|
|
|
—
|
|
Depreciation and
amortization
|
|
|
44,050
|
|
|
|
8,157
|
|
|
|
35,059
|
|
|
|
834
|
|
Adjusted Earnings
(Losses) before Interest,
Taxes,
Depreciation and Amortization,
and
Pension ("Adjusted EBITDAP")
|
|
$
|
65,758
|
|
|
$
|
44,080
|
|
|
$
|
38,528
|
|
|
$
|
(16,850)
|
|
Net sales
|
|
$
|
730,231
|
|
|
$
|
313,606
|
|
|
$
|
419,178
|
|
|
$
|
(2,553)
|
|
Adjusted EBITDAP
margin
|
|
|
9.2
|
%
|
|
|
14.4
|
%
|
|
|
9.4
|
%
|
|
n/a
|
|
*
Operating loss at Corporate includes share-based compensation
expense.
|
(Continued)
|
FINANCIAL DATA
(UNAUDITED)
|
|
TRIUMPH GROUP,
INC. AND SUBSIDIARIES
|
(dollars in
thousands, except per share data)
|
|
Non-GAAP Financial
Measure Disclosures (continued)
|
|
Adjusted income from
continuing operations, before income taxes, adjusted income from
continuing operations and adjusted income from continuing
operations per diluted share, before non-recurring costs have been
provided for consistency and comparability. These measures should
not be considered in isolation or as alternatives to income from
continuing operations before income taxes, income from continuing
operations and income from continuing operations per diluted share
presented in accordance with GAAP. The following tables
reconcile income from continuing operations before income taxes,
income from continuing operations, and income from continuing
operations per diluted share, before non-recurring
costs.
|
|
|
|
Three Months
Ended
June 30,
2020
|
|
|
|
Pre-Tax
|
|
|
After-Tax
|
|
|
EPS
|
|
Loss from continuing
operations - GAAP
|
|
$
|
(276,461)
|
|
|
$
|
(277,314)
|
|
|
$
|
(5.35)
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment of
long-lived assets
|
|
|
252,382
|
|
|
|
252,382
|
|
|
|
4.87
|
|
Restructuring
costs
|
|
|
15,439
|
|
|
|
15,439
|
|
|
|
0.30
|
|
Adjusted loss from
continuing operations - non-GAAP*
|
|
$
|
(8,640)
|
|
|
$
|
(9,493)
|
|
|
$
|
(0.19)
|
|
* Differences
due to rounding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June 30,
2019
|
|
|
|
Pre-Tax
|
|
|
After-Tax
|
|
|
Diluted
EPS
|
|
Income from
continuing operations - GAAP
|
|
$
|
22,895
|
|
|
$
|
18,088
|
|
|
$
|
0.36
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on sale of
assets and businesses, net
|
|
|
3,136
|
|
|
|
2,477
|
|
|
|
0.05
|
|
Restructuring
costs
|
|
|
2,964
|
|
|
|
2,342
|
|
|
|
0.05
|
|
Adjusted income from
continuing operations - non-GAAP*
|
|
$
|
28,995
|
|
|
$
|
22,907
|
|
|
$
|
0.46
|
|
* Differences
due to rounding
|
|
|
|
|
|
|
|
|
|
|
|
|
(Continued)
|
FINANCIAL DATA
(UNAUDITED)
|
|
TRIUMPH GROUP,
INC. AND SUBSIDIARIES
|
(dollars in
thousands, except per share data)
|
|
Non-GAAP Financial
Measure Disclosures (continued)
|
|
Adjusted Operating
Income is defined as GAAP Operating Income, less expenses/gains
associated with the Company's transformation, such as restructuring
expenses, gains/losses on divestitures, defined benefit plan
gains/losses from curtailments, settlements, etc; impairments of
goodwill and other assets. Management believes that this is useful
in evaluating operating performance, but this measure should not be
used in isolation. The following table reconciles our Operating
income to Adjusted Operating income as noted above.
|
|
|
|
|
|
Three Months
Ended
June
30,
|
|
|
|
|
|
|
|
2020
|
|
|
2019
|
|
Operating (loss)
income - GAAP
|
|
|
|
|
|
$
|
(252,392)
|
|
|
$
|
35,511
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on sale of
assets and businesses, net
|
|
|
|
|
|
|
—
|
|
|
|
3,136
|
|
Impairment of
long-lived assets
|
|
|
|
|
|
|
252,382
|
|
|
|
—
|
|
Restructuring
costs
|
|
|
|
|
|
|
15,439
|
|
|
|
2,964
|
|
Adjusted operating
income - non-GAAP
|
|
|
|
|
|
$
|
15,429
|
|
|
$
|
41,611
|
|
Adjusted operating
margin
|
|
|
|
|
|
|
3.1
|
%
|
|
|
5.7
|
%
|
Cash provided by
operations, is provided for consistency and comparability. We also
use free cash flow as a key factor in planning for and
consideration of strategic acquisitions and the repayment of debt.
This measure should not be considered in isolation, as a measure of
residual cash flow available for discretionary purposes, or as an
alternative to operating results presented in accordance with GAAP.
The following table reconciles cash provided by operations to free
cash flow.
|
|
|
|
|
|
Three Months
Ended
June
30,
|
|
|
|
|
|
|
|
2020
|
|
|
2019
|
|
Cash flow provided by
(used in) operations
|
|
|
|
|
|
$
|
(197,533)
|
|
|
$
|
5,018
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
|
|
|
|
|
(7,723)
|
|
|
|
(8,090)
|
|
Free cash flow
(use)
|
|
|
|
|
|
$
|
(205,256)
|
|
|
$
|
(3,072)
|
|
View original
content:http://www.prnewswire.com/news-releases/triumph-group-reports-first-quarter-fiscal-2021-results-301106055.html
SOURCE Triumph Group