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Triumph Group Reports Strong Third Quarter Fiscal 2013 Earnings; Raises Fiscal Year 2013 Guidance

Stocks in this article: TGI

The following table shows our EBITDA reconciled to our income from continuing operations for the indicated periods (in thousands):

               
Three Months Ended Nine Months Ended
December 31, December 31,
2012 2011 2012 2011
Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA):
Income from Continuing Operations $ 75,223 $ 65,903 $ 231,746 $ 175,371
 
Add-back:
Income Tax Expense 42,369 37,194 135,834 97,429
Interest Expense and Other 16,767 14,543 50,667 58,676
Early Retirement Incentives Expense 2,030 - 5,137 -
Amortization of Acquired Contract Liabilities (6,219 ) (4,994 ) (19,774 ) (18,504 )
Depreciation and Amortization   32,332     30,131     96,145     89,064  
 

Earnings before Interest, Taxes, Depreciation and Amortization ("EBITDA")

$ 162,502   $ 142,777   $ 499,755   $ 402,036  
 
Net Sales $ 890,565   $ 825,962   $ 2,716,434   $ 2,461,553  
 
EBITDA Margin   18.2 %   17.3 %   18.4 %   16.3 %
 

 

         
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 December 31, 2012
Segment Data

Total

Aerostructures

Aerospace

Systems

Aftermarket

Services

Corporate /

Eliminations

 
Income from Continuing Operations $ 75,223
 
Add-back:
Income Tax Expense 42,369
Interest Expense and Other   16,767  
 
Operating Income $ 134,359 $ 117,450 $ 20,562 $ 9,856 $ (13,509 )
 
Early Retirement Incentives Expense 2,030 - - - 2,030
Amortization of Acquired Contract Liabilities (6,219 ) (6,219 ) - - -
Depreciation and Amortization   32,332     24,180     4,707     2,283     1,162  
 

Earnings (Losses) before Interest, Taxes, Depreciation and Amortization ("EBITDA")

$ 162,502   $ 135,411   $ 25,269   $ 12,139   $ (10,317 )
 
Net Sales $ 890,565   $ 676,791   $ 141,059   $ 74,587   $ (1,872 )
 
EBITDA Margin   18.2 %   20.0 %   17.9 %   16.3 %   n/a  
 
 
Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA): Nine Months Ended December 31, 2012
Segment Data

Total

Aerostructures

Aerospace

Systems

Aftermarket

Services

Corporate /

Eliminations

 
Income from Continuing Operations $ 231,746
 
Add-back:
Income Tax Expense 135,834
Interest Expense and Other   50,667  
 
Operating Income (Loss) $ 418,247 $ 358,972 $ 69,739 $ 32,430 $ (42,894 )
 
Early Retirement Incentives Expense 5,137 - - - 5,137
Amortization of Acquired Contract Liabilities (19,774 ) (19,774 ) - - -
Depreciation and Amortization   96,145     72,133     13,670     6,897     3,445  
 

Earnings (Losses) before Interest, Taxes, Depreciation and Amortization ("EBITDA")

$ 499,755   $ 411,331   $ 83,409   $ 39,327   $ (34,312 )
 
Net Sales $ 2,716,434   $ 2,060,622   $ 431,710   $ 230,625   $ (6,523 )
 
EBITDA Margin   18.4 %   20.0 %   19.3 %   17.1 %   n/a  
 
         
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 December 31, 2011
Segment Data

Aerospace

Aftermarket

Corporate /

Total

Aerostructures

Systems

Services

Eliminations

 

 
Income from Continuing Operations $ 65,903
 
Add-back:
Income Tax Expense 37,194
Interest Expense and Other   14,543  
 
Operating Income (Loss) $ 117,640 $ 103,947 $ 18,623 $ 6,917 $ (11,847 )
 
Amortization of Acquired Contract Liabilities (4,994 ) (4,994 ) - - -
Depreciation and Amortization   30,131     22,476     4,296     2,431     928  
 

Earnings (Losses) before Interest, Taxes, Depreciation and Amortization ("EBITDA")

$

142,777

  $ 121,429   $ 22,919   $ 9,348   $ (10,919 )
 
Net Sales $ 825,962   $ 626,045   $ 133,291   $ 68,640   $ (2,014 )
 
EBITDA Margin   17.3 %   19.4 %   17.2 %   13.6 %   n/a  
 
 
Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA): Nine Months Ended December 31, 2011
Segment Data

Aerospace

Aftermarket

Corporate /

Total

Aerostructures

Systems

Services

Eliminations

 

 

 

 

 

 
Income from Continuing Operations $ 175,371
 
Add-back:
Income Tax Expense 97,429
Interest Expense and Other   58,676  
 
Operating Income (Loss) $ 331,476 $ 284,410 $ 63,684 $ 20,893 $ (37,511 )
 
Amortization of Acquired Contract Liabilities (18,504 ) (18,504 ) - - -
Depreciation and Amortization   89,064     66,258     12,963     7,202     2,641  
 

Earnings (Losses) before Interest, Taxes, Depreciation and Amortization ("EBITDA")

$ 402,036   $ 332,164   $ 76,647   $ 28,095   $ (34,870 )
 
Net Sales $ 2,461,553   $ 1,857,328   $ 400,076   $ 209,555   $ (5,406 )
 
EBITDA Margin 16.3 % 17.9 % 19.2 % 13.4 % n/a
 
     
FINANCIAL DATA (UNAUDITED)
   
TRIUMPH GROUP, INC. AND SUBSIDIARIES
(dollars in thousands)
 

Non-GAAP Financial Measure Disclosures (continued)

 

Operating income, income from continuing operations and income from continuing operations diluted per share, before integration costs and early retirement incentives has been provided for consistency and comparability. These measures should not be considered in isolation or as alternatives to operating income, income from continuing operations and income from continuing operations per diluted share presented in accordance with GAAP. The following table reconciles operating income, income from continuing operations and income from continuing operations per diluted share, before integration costs and early retirement incentives to the operating income, income from continuing operations and income from continuing operations per diluted share, respectively.

 
  Three Months Ended Nine Months Ended
December 31, December 31,
2012 2011 2012   2011

Operating income, before integration costs and early retirement incentives

$ 136,639 $ 119,735 $ 425,611 $ 335,175
Integration costs 250 2,095 2,227 3,699
Early retirement incentives expense   2,030     -     5,137     -  
Operating income $ 134,359 $ 117,640 $ 418,247 $ 331,476
 

Income from continuing operations, before integration costs and early retirement incentives

$ 76,671 $ 67,254 $ 236,422 $ 177,757
Integration costs, net of tax 159 1,351 1,414 2,386
Early retirement incentives expense, net of tax   1,289     -     3,262     -  
Income from continuing operations $ 75,223 $ 65,903 $ 231,746 $ 175,371
 

Income from continuing operations, before integration costs and early retirement incentives per diluted share

$ 1.46 $ 1.29 $ 4.52 $ 3.44
Integration costs per diluted share (0.00 ) (0.03 ) (0.03 ) (0.05 )
Early retirement incentives expense per diluted share   (0.02 )   -     (0.06 )   -  
Income from continuing operations per diluted share $ 1.43   * $ 1.27   * $ 4.43   $ 3.39  
 
 
*Difference due to rounding.
 
     
FINANCIAL DATA (UNAUDITED)
   
TRIUMPH GROUP, INC. AND SUBSIDIARIES
(dollars in thousands)
 
Non-GAAP Financial Measure Disclosures (continued)
 

Cash provided by operations, before pension contributions has been provided for consistency and comparability. We also use free cash flow available for debt reduction as a key factor in planning for and consideration of strategic acquisitions, stock repurchases 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, before pension contributions to cash provided by operations, as well as cash provided by operations to free cash flow available for debt reduction.

 
 
Nine Months Ended
December 31,
2012   2011
 
Cash provided by operations, before pension contributions $ 334,431 $ 241,545
Pension contributions   103,805     97,730  
Cash provided by operations 230,626 143,815
Less:
Capital expenditures 89,656 58,911
Dividends   6,001     4,920  
Free cash flow available for debt reduction $ 134,969 $ 79,984
 
We use "Net Debt to Capital" as a measure of financial leverage. The following table sets forth the computation of Net Debt to Capital:
 
December 31, March 31,
2012 2012
 

Calculation of Net Debt

Current portion $ 133,951 $ 142,237
Long-term debt   1,040,954     1,016,625  
Total debt 1,174,905 1,158,862
Less: Cash   33,452     29,662  
Net debt $ 1,141,453   $ 1,129,200  

 

Calculation of Capital

Net debt $ 1,141,453 $ 1,129,200
Stockholders' equity   2,028,086     1,793,369  
Total capital $ 3,169,539   $ 2,922,569  
 
Percent of net debt to capital 36.0 % 38.6 %
 




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