EPS Forecast
Revenue Forecast
Exhibit 99.1
NEWS RELEASE
|
Media Contact: Michele Long Phone (610) 251-1000 mmlong@triumphgroup.com |
|
|
Investor Relations Contact: Thomas A. Quigley, III Phone (610) 251-1000 tquigley@triumphgroup.com |
TRIUMPH GROUP REPORTS THIRD QUARTER FISCAL 2020 RESULTS
Reports Organic Revenue Growth of 8%
Generates Solid Free Cash Flow
BERWYN, Pa. – February 6, 2020 – Triumph Group, Inc. (NYSE: TGI) (“Triumph” or the “Company”) today reported financial results for its third quarter of fiscal year 2020, which ended December 31, 2019.
Third Quarter Fiscal 2020
|
• |
Net sales of $704.7 million |
|
• |
Operating income of $1.7 million with operating margin of 0.2%; adjusted operating income of $64.0 million with adjusted operating margin of 9.1% |
|
• |
Net loss of ($13.8) million, or ($0.27) per share; adjusted net income of $35.4 million, or $0.69 per diluted share |
|
• |
Cash flow provided by operations of $49.9 million, and free cash flow of $39.6 million |
Outlook for Fiscal 2020
|
• |
Net sales of between $2.8 billion to $2.9 billion |
|
• |
GAAP earnings per diluted share of between $1.28 and $1.48 |
|
• |
Adjusted earnings per diluted share of between $2.35 to $2.55 |
|
• |
Positive free cash flow of between $0 to $50.0 million |
“Triumph Group delivered strong third quarter results, in line with our expectations,” stated Daniel J. Crowley, Triumph’s president and chief executive officer. “Organic revenue was up year-over-year across all three of our business segments, driven by increased volume on Airbus commercial programs and aftermarket demand for military rotorcraft components and engine mounted accessories. Integrated Systems margins were driven by increases in MRO and spares sales, as well as improved operational efficiencies and cost reduction initiatives. Aerospace Structures continued to execute its plan, divesting the Nashville large structures business and exiting legacy programs. We expect these actions to benefit margins in future quarters.”
Mr. Crowley continued, “Free cash flow was positive for the quarter and year to date, and we remain on track to deliver positive free cash flow for fiscal year 2020 as we guided. Triumph is a more predictable business as we de-risk our portfolio and backlog and stabilize our cash flows.”
Mr. Crowley concluded, “We are focused on our core and I remain confident in Triumph’s ability to compete, win and create value over the long term for our stakeholders.”
1
Boeing and Triumph have agreed that advance repayments will be deferred from Triumph’s fiscal fourth quarter and have reached agreement on the rate at which Triumph will continue to manufacture content for the 737 Max program in the near term to protect continuity of supply to Boeing. The parties also agreed to explore balanced solutions to address a number of business considerations between both companies, including certain fiscal 2021 advance repayments.
Third Quarter Fiscal Year 2020 Overview
After accounting for the impact of the divestitures, sales for the third quarter of fiscal 2020 were up 8% organically from the comparable prior year period. Growth was driven by increased volumes on Airbus commercial programs, military rotorcraft components, aftermarket accessory services and legacy structures programs.
Third quarter operating income of $1.7 million included a $1.4 million expense for union OPEB related incentives, $60.0 million for loss on divestitures, ($3.9) million for a legal judgment gain and $4.7 million of restructuring costs. Net loss for the third quarter of fiscal year 2020 was ($13.8) million, or ($0.27) per share. On an adjusted basis, net income was $35.4 million, or $0.69 per diluted share.
Triumph’s results included the following:
|
($ millions except EPS) |
|
Pre-tax |
|
|
After-tax |
|
|
Diluted EPS |
|
|||
|
Loss from Continuing Operations - GAAP |
|
$ |
(17.5 |
) |
|
$ |
(13.8 |
) |
|
$ |
(0.27 |
) |
|
Loss on sale of assets and businesses |
|
|
60.0 |
|
|
|
47.4 |
|
|
|
0.93 |
|
|
Legal judgment gain, net |
|
|
(3.9 |
) |
|
|
(3.0 |
) |
|
|
(0.06 |
) |
|
Union incentives |
|
|
1.4 |
|
|
|
1.1 |
|
|
|
0.02 |
|
|
Transformation related costs: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring costs (cash) |
|
|
4.7 |
|
|
|
3.7 |
|
|
|
0.07 |
|
|
Adjusted Income from Continuing Operations - non-GAAP * |
|
$ |
44.8 |
|
|
$ |
35.4 |
|
|
$ |
0.69 |
|
* Differences due to rounding
The number of shares used in computing diluted earnings per share for the third quarter of 2020 was 51.0 million.
Backlog was $3.34 billion, down compared to the prior year period and on a sequential basis due to divestitures, sunsetting programs and recent production rate reductions, but partially offset by military program increases in Integrated Systems.
For the nine months ended December 31, 2019, cash flow provided by operations was $39.3 million, reflecting continued investment in ramping programs and liquidation of approximately $60.0 million in prior period advances against current period deliveries.
Outlook
As noted previously, the Boeing 737 MAX program historically has contributed a single-digit percentage of annual revenue. The Company now expects the FY20 revenue impact from the reduction in rates from the beginning of the year to be less than 3% of sales with similar impacts to operating income and cash.
Based on anticipated aircraft production rates and including the timing of pending program transfers, the Company continues to expect that net sales for fiscal year 2020 will be approximately $2.8 billion to $2.9 billion.
The Company has narrowed its expected GAAP fiscal year 2020 earnings per diluted share from a range of $1.34 to $2.35 to a range of $1.28 to $1.48 and adjusted earning per diluted share from a range of $2.35 to $2.95 to a range of $2.35 to $2.55.
The Company has updated is expected fiscal year 2020 cash provided from operations from a range of $50.0 million to $110.0 million to a range of $40.0 million to $100.0 million. The Company continues to expect positive free cash flow of $0 to $50.0 million in fiscal year 2020.
The Company’s current outlook reflects the divestiture of its Nashville business, planned 737MAX production rates and adjustments detailed in the attached tables but excludes the impact of any potential future divestitures.
2
Conference Call
Triumph will hold a conference call today, February 6th, at 8:30 a.m. (ET) to discuss the third quarter fiscal year 2020 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 February 6th to February 13th by calling (855) 859-2056 (Domestic) or (404) 537-3406 (International), passcode #1487806.
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, 2019.
FINANCIAL DATA (UNAUDITED) ON FOLLOWING PAGES
3
TRIUMPH GROUP, INC. AND SUBSIDIARIES
(in thousands, except per share data)
|
|
|
Three Months Ended December 31, |
|
|
Nine Months Ended December 31, |
|
||||||||||
|
CONDENSED STATEMENTS OF OPERATIONS |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
||||
|
Net sales |
|
$ |
704,666 |
|
|
$ |
807,895 |
|
|
$ |
2,207,007 |
|
|
$ |
2,495,903 |
|
|
Cost of sales (excluding depreciation shown below) |
|
|
546,282 |
|
|
|
713,274 |
|
|
|
1,750,751 |
|
|
|
2,207,962 |
|
|
Selling, general & administrative |
|
|
65,974 |
|
|
|
71,823 |
|
|
|
194,512 |
|
|
|
223,031 |
|
|
Depreciation & amortization |
|
|
29,843 |
|
|
|
37,404 |
|
|
|
104,112 |
|
|
|
114,349 |
|
|
Restructuring costs |
|
|
4,744 |
|
|
|
2,327 |
|
|
|
13,490 |
|
|
|
18,206 |
|
|
Legal judgment gain, net of expenses |
|
|
(3,857 |
) |
|
|
— |
|
|
|
(9,257 |
) |
|
|
— |
|
|
Loss on sale of assets and businesses, net |
|
|
60,019 |
|
|
|
— |
|
|
|
55,190 |
|
|
|
17,837 |
|
|
Operating income (loss) |
|
|
1,661 |
|
|
|
(16,933 |
) |
|
|
98,209 |
|
|
|
(85,482 |
) |
|
Interest expense and other, net |
|
|
33,178 |
|
|
|
29,309 |
|
|
|
96,069 |
|
|
|
83,515 |
|
|
Non-service defined benefit income |
|
|
(13,989 |
) |
|
|
(16,520 |
) |
|
|
(57,280 |
) |
|
|
(49,581 |
) |
|
Income tax (benefit) expense |
|
|
(3,682 |
) |
|
|
1,223 |
|
|
|
12,477 |
|
|
|
2,739 |
|
|
Net (loss) income |
|
$ |
(13,846 |
) |
|
$ |
(30,945 |
) |
|
$ |
46,943 |
|
|
$ |
(122,155 |
) |
|
Earnings per share - basic: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income |
|
$ |
(0.27 |
) |
|
$ |
(0.62 |
) |
|
$ |
0.94 |
|
|
$ |
(2.46 |
) |
|
Weighted average common shares outstanding - basic |
|
|
50,395 |
|
|
|
49,668 |
|
|
|
50,074 |
|
|
|
49,616 |
|
|
Earnings per share - diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income |
|
$ |
(0.27 |
) |
|
$ |
(0.62 |
) |
|
$ |
0.93 |
|
|
$ |
(2.46 |
) |
|
Weighted average common shares outstanding - diluted |
|
|
50,395 |
|
|
|
49,668 |
|
|
|
50,591 |
|
|
|
49,616 |
|
|
Dividends declared and paid per common share |
|
$ |
0.04 |
|
|
$ |
0.04 |
|
|
$ |
0.12 |
|
|
$ |
0.12 |
|
4
FINANCIAL DATA (UNAUDITED)
TRIUMPH GROUP, INC. AND SUBSIDIARIES
(dollars in thousands, except share data)
|
BALANCE SHEETS |
|
Unaudited December 31, 2019 |
|
|
Audited March 31, 2019 |
|
||
|
Assets |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
53,594 |
|
|
$ |
92,807 |
|
|
Accounts receivable, net |
|
|
300,730 |
|
|
|
373,590 |
|
|
Contract assets |
|
|
241,875 |
|
|
|
326,667 |
|
|
Inventory, net |
|
|
473,863 |
|
|
|
413,560 |
|
|
Prepaid and other current assets |
|
|
26,133 |
|
|
|
34,446 |
|
|
Current assets |
|
|
1,096,195 |
|
|
|
1,241,070 |
|
|
Property and equipment, net |
|
|
433,475 |
|
|
|
543,710 |
|
|
Goodwill |
|
|
583,699 |
|
|
|
583,225 |
|
|
Intangible assets, net |
|
|
394,782 |
|
|
|
430,954 |
|
|
Other, net |
|
|
117,235 |
|
|
|
55,615 |
|
|
Total assets |
|
$ |
2,625,386 |
|
|
$ |
2,854,574 |
|
|
Liabilities & Stockholders' Deficit |
|
|
|
|
|
|
|
|
|
Current portion of long-term debt |
|
$ |
7,795 |
|
|
$ |
8,201 |
|
|
Accounts payable |
|
|
379,989 |
|
|
|
433,783 |
|
|
Contract liabilities |
|
|
264,463 |
|
|
|
293,719 |
|
|
Accrued expenses |
|
|
231,065 |
|
|
|
239,572 |
|
|
Current liabilities |
|
|
883,312 |
|
|
|
975,275 |
|
|
Long-term debt, less current portion |
|
|
1,400,893 |
|
|
|
1,480,620 |
|
|
Accrued pension and post-retirement benefits, noncurrent |
|
|
496,284 |
|
|
|
540,479 |
|
|
Deferred income taxes, noncurrent |
|
|
16,709 |
|
|
|
6,964 |
|
|
Other noncurrent liabilities |
|
|
361,085 |
|
|
|
424,549 |
|
|
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 |
|
|
804,133 |
|
|
|
867,545 |
|
|
Treasury stock, at cost, 631,146 and 2,573,652 shares |
|
|
(38,424 |
) |
|
|
(159,154 |
) |
|
Accumulated other comprehensive loss |
|
|
(545,299 |
) |
|
|
(487,684 |
) |
|
Accumulated deficit |
|
|
(753,359 |
) |
|
|
(794,072 |
) |
|
Total stockholders' deficit |
|
|
(532,897 |
) |
|
|
(573,313 |
) |
|
Total liabilities and stockholders' deficit |
|
$ |
2,625,386 |
|
|
$ |
2,854,574 |
|
5
FINANCIAL DATA (UNAUDITED)
TRIUMPH GROUP, INC. AND SUBSIDIARIES
(dollars in thousands, except share data)
|
|
|
Nine Months Ended December 31, |
|
|||||
|
CASH FLOWS |
|
2019 |
|
|
2018 |
|
||
|
Operating Activities |
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
46,943 |
|
|
$ |
(122,155 |
) |
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
|
|
|
Depreciation & amortization |
|
|
104,112 |
|
|
|
114,349 |
|
|
Amortization of acquired contract liabilities |
|
|
(56,153 |
) |
|
|
(48,769 |
) |
|
Loss on sale of assets & businesses, net |
|
|
55,190 |
|
|
|
17,837 |
|
|
Curtailment and special termination benefit gain, net |
|
|
(14,373 |
) |
|
|
— |
|
|
Other amortization included in interest expense |
|
|
9,114 |
|
|
|
6,811 |
|
|
Provision for doubtful accounts receivable |
|
|
632 |
|
|
|
622 |
|
|
Provision for deferred income taxes |
|
|
8,108 |
|
|
|
— |
|
|
Employee stock-based compensation |
|
|
8,245 |
|
|
|
8,509 |
|
|
Changes in assets and liabilities, excluding the effects of acquisitions/divestitures: |
|
|
|
|
|
|
|
|
|
Trade and other receivables |
|
|
72,278 |
|
|
|
8,669 |
|
|
Contract assets |
|
|
53,047 |
|
|
|
6,240 |
|
|
Inventories |
|
|
(67,764 |
) |
|
|
(61,563 |
) |
|
Prepaid expenses and other current assets |
|
|
11,315 |
|
|
|
1,615 |
|
|
Accounts payable, accrued expenses and contract liabilities |
|
|
(143,718 |
) |
|
|
(72,639 |
) |
|
Accrued pension and other postretirement benefits |
|
|
(46,693 |
) |
|
|
(55,150 |
) |
|
Other |
|
|
(995 |
) |
|
|
2,508 |
|
|
Net cash provided by (used in) operating activities |
|
|
39,288 |
|
|
|
(193,116 |
) |
|
Investing Activities |
|
|
|
|
|
|
|
|
|
Capital expenditures |
|
|
(27,250 |
) |
|
|
(34,824 |
) |
|
Proceeds from sale of assets |
|
|
49,956 |
|
|
|
41,417 |
|
|
Net cash provided by investing activities |
|
|
22,706 |
|
|
|
6,593 |
|
|
Financing Activities |
|
|
|
|
|
|
|
|
|
Net (decrease) increase in revolving credit facility |
|
|
(215,000 |
) |
|
|
218,066 |
|
|
Proceeds from issuance of long-term debt and finance leases |
|
|
570,980 |
|
|
|
45,000 |
|
|
Repayment of debt and finance lease obligations |
|
|
(433,197 |
) |
|
|
(73,011 |
) |
|
Payment of deferred financing costs |
|
|
(17,545 |
) |
|
|
(1,941 |
) |
|
Dividends paid |
|
|
(6,005 |
) |
|
|
(5,975 |
) |
|
Repurchase of restricted shares for minimum tax obligation |
|
|
(1,179 |
) |
|
|
(645 |
) |
|
Net cash (used in) provided by financing activities |
|
|
(101,946 |
) |
|
|
181,494 |
|
|
Effect of exchange rate changes on cash |
|
|
739 |
|
|
|
(2,126 |
) |
|
Net change in cash |
|
|
(39,213 |
) |
|
|
(7,155 |
) |
|
Cash and equivalents at beginning of period |
|
|
92,807 |
|
|
|
35,819 |
|
|
Cash and equivalents at end of period |
|
$ |
53,594 |
|
|
$ |
28,664 |
|
6
FINANCIAL DATA (UNAUDITED)
TRIUMPH GROUP, INC. AND SUBSIDIARIES
(dollars in thousands)
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
|
December 31, |
|
|
December 31, |
|
||||||||||
|
SEGMENT DATA |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
||||
|
Net sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Integrated Systems |
|
$ |
275,248 |
|
|
$ |
252,437 |
|
|
$ |
813,454 |
|
|
$ |
754,193 |
|
|
Aerospace Structures |
|
|
368,972 |
|
|
|
490,337 |
|
|
|
1,210,729 |
|
|
|
1,551,090 |
|
|
Product Support |
|
|
63,978 |
|
|
|
71,446 |
|
|
|
193,127 |
|
|
|
209,860 |
|
|
Elimination of inter-segment sales |
|
|
(3,532 |
) |
|
|
(6,325 |
) |
|
|
(10,303 |
) |
|
|
(19,240 |
) |
|
|
|
$ |
704,666 |
|
|
$ |
807,895 |
|
|
$ |
2,207,007 |
|
|
$ |
2,495,903 |
|
|
Operating income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Integrated Systems |
|
$ |
47,896 |
|
|
$ |
39,947 |
|
|
$ |
134,140 |
|
|
$ |
115,221 |
|
|
Aerospace Structures |
|
|
18,039 |
|
|
|
(49,813 |
) |
|
|
43,930 |
|
|
|
(152,143 |
) |
|
Product Support |
|
|
9,538 |
|
|
|
11,421 |
|
|
|
29,680 |
|
|
|
30,604 |
|
|
Corporate |
|
|
(70,857 |
) |
|
|
(15,222 |
) |
|
|
(101,296 |
) |
|
|
(70,655 |
) |
|
Share-based compensation expense |
|
|
(2,955 |
) |
|
|
(3,266 |
) |
|
|
(8,245 |
) |
|
|
(8,509 |
) |
|
|
|
$ |
1,661 |
|
|
$ |
(16,933 |
) |
|
$ |
98,209 |
|
|
$ |
(85,482 |
) |
|
Operating margin % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Integrated Systems |
|
|
17.4 |
% |
|
|
15.8 |
% |
|
|
16.5 |
% |
|
|
15.3 |
% |
|
Aerospace Structures |
|
|
4.9 |
% |
|
|
(10.2 |
%) |
|
|
3.6 |
% |
|
|
(9.8 |
%) |
|
Product Support |
|
|
14.9 |
% |
|
|
16.0 |
% |
|
|
15.4 |
% |
|
|
14.6 |
% |
|
Consolidated |
|
|
0.2 |
% |
|
|
(2.1 |
%) |
|
|
4.4 |
% |
|
|
(3.4 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Integrated Systems |
|
$ |
6,992 |
|
|
$ |
7,376 |
|
|
$ |
21,042 |
|
|
$ |
22,316 |
|
|
Aerospace Structures |
|
|
20,921 |
|
|
|
27,673 |
|
|
|
77,265 |
|
|
|
84,888 |
|
|
Product Support |
|
|
1,083 |
|
|
|
1,611 |
|
|
|
3,272 |
|
|
|
4,944 |
|
|
Corporate |
|
|
847 |
|
|
|
744 |
|
|
|
2,533 |
|
|
|
2,201 |
|
|
|
|
$ |
29,843 |
|
|
$ |
37,404 |
|
|
$ |
104,112 |
|
|
$ |
114,349 |
|
|
Amortization of acquired contract liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Integrated Systems |
|
$ |
(8,377 |
) |
|
$ |
(8,172 |
) |
|
$ |
(26,126 |
) |
|
$ |
(25,789 |
) |
|
Aerospace Structures |
|
|
(8,220 |
) |
|
|
(6,559 |
) |
|
|
(30,027 |
) |
|
|
(22,980 |
) |
|
|
|
$ |
(16,597 |
) |
|
$ |
(14,731 |
) |
|
$ |
(56,153 |
) |
|
$ |
(48,769 |
) |
|
Capital expenditures: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Integrated Systems |
|
$ |
2,974 |
|
|
$ |
3,951 |
|
|
$ |
9,734 |
|
|
$ |
9,388 |
|
|
Aerospace Structures |
|
|
5,910 |
|
|
|
5,722 |
|
|
|
13,915 |
|
|
|
22,937 |
|
|
Product Support |
|
|
955 |
|
|
|
852 |
|
|
|
2,621 |
|
|
|
1,871 |
|
|
Corporate |
|
|
416 |
|
|
|
45 |
|
|
|
980 |
|
|
|
628 |
|
|
|
|
$ |
10,255 |
|
|
$ |
10,570 |
|
|
$ |
27,250 |
|
|
$ |
34,824 |
|
7
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 early retirement incentives, 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. |
8
FINANCIAL DATA (UNAUDITED)
TRIUMPH GROUP, INC. AND SUBSIDIARIES
(dollars in thousands)
Non-GAAP Financial Measure Disclosures (continued)
|
• |
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) 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 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.
9
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 |
|
|
Nine Months Ended |
|
||||||||||
|
|
|
December 31, |
|
|
December 31, |
|
||||||||||
|
Adjusted Earnings before Interest, Taxes, Depreciation, Amortization, and Pension (Adjusted EBITDAP): |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
||||
|
Net (loss) income |
|
$ |
(13,846 |
) |
|
$ |
(30,945 |
) |
|
$ |
46,943 |
|
|
$ |
(122,155 |
) |
|
Add-back: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax (benefit) expense |
|
|
(3,682 |
) |
|
|
1,223 |
|
|
|
12,477 |
|
|
|
2,739 |
|
|
Interest expense and other, net |
|
|
33,178 |
|
|
|
29,309 |
|
|
|
96,069 |
|
|
|
83,515 |
|
|
Curtailment gain & special termination, net |
|
|
— |
|
|
|
— |
|
|
|
(14,373 |
) |
|
|
— |
|
|
Union incentives |
|
|
1,400 |
|
|
|
— |
|
|
|
7,071 |
|
|
|
— |
|
|
Loss on sales of assets and businesses, net |
|
|
60,019 |
|
|
|
— |
|
|
|
55,190 |
|
|
|
17,837 |
|
|
Legal judgment gain, net of expenses |
|
|
(3,857 |
) |
|
|
— |
|
|
|
(9,257 |
) |
|
|
— |
|
|
Adoption of ASU 2017-07 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
87,241 |
|
|
Amortization of acquired contract liabilities |
|
|
(16,597 |
) |
|
|
(14,731 |
) |
|
|
(56,153 |
) |
|
|
(48,769 |
) |
|
Depreciation and amortization |
|
|
29,843 |
|
|
|
37,404 |
|
|
|
104,112 |
|
|
|
114,349 |
|
|
Adjusted Earnings before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA") |
|
$ |
86,458 |
|
|
$ |
22,260 |
|
|
$ |
242,079 |
|
|
$ |
134,757 |
|
|
Non-service defined benefit income (excluding settlements) |
|
|
(13,989 |
) |
|
|
(16,520 |
) |
|
|
(42,907 |
) |
|
|
(49,581 |
) |
|
Adjusted Earnings before Interest, Taxes, Depreciation and Amortization, and Pension ("Adjusted EBITDAP") |
|
$ |
72,469 |
|
|
$ |
5,740 |
|
|
$ |
199,172 |
|
|
$ |
85,176 |
|
|
Net sales |
|
$ |
704,666 |
|
|
$ |
807,895 |
|
|
$ |
2,207,007 |
|
|
$ |
2,495,903 |
|
|
Net (loss) income margin |
|
|
(2.0 |
%) |
|
|
(3.8 |
%) |
|
|
2.1 |
% |
|
|
(4.9 |
%) |
|
Adjusted EBITDAP margin |
|
|
10.5 |
% |
|
|
0.7 |
% |
|
|
9.3 |
% |
|
|
3.5 |
% |
10
FINANCIAL DATA (UNAUDITED)
TRIUMPH GROUP, INC. AND SUBSIDIARIES
(dollars in thousands)
Non-GAAP Financial Measure Disclosures (continued)
|
|
|
Three Months Ended December 31, 2019 |
|
|||||||||||||||||
|
|
|
|
|
|
|
Segment Data |
|
|||||||||||||
|
Adjusted Earnings before Interest, Taxes, Depreciation, Amortization, and Pension (EBITDAP): |
|
Total |
|
|
Integrated Systems |
|
|
Aerospace Structures |
|
|
Product Support |
|
|
Corporate/ Eliminations* |
|
|||||
|
Net loss |
|
$ |
(13,846 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add-back: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-service defined benefit income |
|
|
(13,989 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
|
(3,682 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense and other, net |
|
|
33,178 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss) |
|
$ |
1,661 |
|
|
$ |
47,896 |
|
|
$ |
18,039 |
|
|
$ |
9,538 |
|
|
$ |
(73,812 |
) |
|
Loss on sales of assets & businesses, net |
|
|
60,019 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
60,019 |
|
|
Legal settlement gain, net of expenses |
|
|
(3,857 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(3,857 |
) |
|
Union represented employee incentives |
|
|
1,400 |
|
|
|
— |
|
|
|
1,400 |
|
|
|
— |
|
|
|
— |
|
|
Amortization of acquired contract liabilities |
|
|
(16,597 |
) |
|
|
(8,377 |
) |
|
|
(8,220 |
) |
|
|
— |
|
|
|
— |
|
|
Depreciation and amortization |
|
|
29,843 |
|
|
|
6,992 |
|
|
|
20,921 |
|
|
|
1,083 |
|
|
|
847 |
|
|
Adjusted Earnings (Losses) before Interest, Taxes, Depreciation and Amortization, and Pension ("Adjusted EBITDAP") |
|
$ |
72,469 |
|
|
$ |
46,511 |
|
|
$ |
32,140 |
|
|
$ |
10,621 |
|
|
$ |
(16,803 |
) |
|
Net sales |
|
$ |
704,666 |
|
|
$ |
275,248 |
|
|
$ |
368,972 |
|
|
$ |
63,978 |
|
|
$ |
(3,532 |
) |
|
Adjusted EBITDAP margin |
|
|
10.5 |
% |
|
|
17.4 |
% |
|
|
8.9 |
% |
|
|
16.6 |
% |
|
n/a |
|
|
|
|
|
Nine Months Ended December 31, 2019 |
|
|||||||||||||||||
|
|
|
|
|
|
|
Segment Data |
|
|||||||||||||
|
Adjusted Earnings before Interest, Taxes, Depreciation, Amortization, and Pension (EBITDAP): |
|
Total |
|
|
Integrated Systems |
|
|
Aerospace Structures |
|
|
Product Support |
|
|
Corporate/ Eliminations* |
|
|||||
|
Net income |
|
$ |
46,943 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add-back: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-service defined benefit income |
|
|
(57,280 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
|
12,477 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense and other, net |
|
|
96,069 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss) |
|
$ |
98,209 |
|
|
$ |
134,140 |
|
|
$ |
43,930 |
|
|
$ |
29,680 |
|
|
$ |
(109,541 |
) |
|
Loss (gain) on sales of assets & businesses, net |
|
|
55,190 |
|
|
|
— |
|
|
|
(10,121 |
) |
|
|
— |
|
|
|
65,311 |
|
|
Legal judgment gain, net of expenses |
|
|
(9,257 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(9,257 |
) |
|
Union represented employee incentives |
|
|
7,071 |
|
|
|
— |
|
|
|
7,071 |
|
|
|
— |
|
|
|
— |
|
|
Amortization of acquired contract liabilities |
|
|
(56,153 |
) |
|
|
(26,126 |
) |
|
|
(30,027 |
) |
|
|
— |
|
|
|
— |
|
|
Depreciation and amortization |
|
|
104,112 |
|
|
|
21,042 |
|
|
|
77,265 |
|
|
|
3,272 |
|
|
|
2,533 |
|
|
Adjusted Earnings (Losses) before Interest, Taxes, Depreciation and Amortization, and Pension ("Adjusted EBITDAP") |
|
$ |
199,172 |
|
|
$ |
129,056 |
|
|
$ |
88,118 |
|
|
$ |
32,952 |
|
|
$ |
(50,954 |
) |
|
Net sales |
|
$ |
2,207,007 |
|
|
$ |
813,454 |
|
|
$ |
1,210,729 |
|
|
$ |
193,127 |
|
|
$ |
(10,303 |
) |
|
Adjusted EBITDAP margin |
|
|
9.3 |
% |
|
|
16.4 |
% |
|
|
7.5 |
% |
|
|
17.1 |
% |
|
n/a |
|
|
11
FINANCIAL DATA (UNAUDITED)
TRIUMPH GROUP, INC. AND SUBSIDIARIES
(dollars in thousands)
Non-GAAP Financial Measure Disclosures (continued)
|
|
|
Three Months Ended December 31, 2018 |
|
|||||||||||||||||
|
|
|
|
|
|
|
Segment Data |
|
|||||||||||||
|
Adjusted Earnings before Interest, Taxes, Depreciation, Amortization, and Pension (EBITDAP): |
|
Total |
|
|
Integrated Systems |
|
|
Aerospace Structures |
|
|
Product Support |
|
|
Corporate/ Eliminations* |
|
|||||
|
Net loss |
|
$ |
(30,945 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add-back: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-service defined benefit income |
|
|
(16,520 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
|
1,223 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense and other, net |
|
|
29,309 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss) income |
|
$ |
(16,933 |
) |
|
$ |
39,947 |
|
|
$ |
(49,813 |
) |
|
$ |
11,421 |
|
|
$ |
(18,488 |
) |
|
Amortization of acquired contract liabilities |
|
|
(14,731 |
) |
|
|
(8,172 |
) |
|
|
(6,559 |
) |
|
|
— |
|
|
|
— |
|
|
Depreciation and amortization |
|
|
37,404 |
|
|
|
7,376 |
|
|
|
27,673 |
|
|
|
1,611 |
|
|
|
744 |
|
|
Adjusted Earnings (Losses) before Interest, Taxes, Depreciation and Amortization, and Pension ("Adjusted EBITDAP") |
|
$ |
5,740 |
|
|
$ |
39,151 |
|
|
$ |
(28,699 |
) |
|
$ |
13,032 |
|
|
$ |
(17,744 |
) |
|
Net sales |
|
$ |
807,895 |
|
|
$ |
252,437 |
|
|
$ |
490,337 |
|
|
$ |
71,446 |
|
|
$ |
(6,325 |
) |
|
Adjusted EBITDAP margin |
|
|
0.7 |
% |
|
|
16.0 |
% |
|
|
(5.9 |
%) |
|
|
18.2 |
% |
|
n/a |
|
|
|
|
|
Nine Months Ended December 31, 2018 |
|
|||||||||||||||||
|
|
|
|
|
|
|
Segment Data |
|
|||||||||||||
|
Adjusted Earnings before Interest, Taxes, Depreciation, Amortization, and Pension (EBITDAP): |
|
Total |
|
|
Integrated Systems |
|
|
Aerospace Structures |
|
|
Product Support |
|
|
Corporate/ Eliminations* |
|
|||||
|
Net loss |
|
$ |
(122,155 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add-back: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-service defined benefit income |
|
|
(49,581 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
|
2,739 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense and other, net |
|
|
83,515 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss) income |
|
$ |
(85,482 |
) |
|
$ |
115,221 |
|
|
$ |
(152,143 |
) |
|
$ |
30,604 |
|
|
$ |
(79,164 |
) |
|
Loss on sales of assets & businesses, net |
|
|
17,837 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
17,837 |
|
|
Adoption of ASU 2017-07 |
|
|
87,241 |
|
|
|
— |
|
|
|
87,241 |
|
|
|
— |
|
|
|
— |
|
|
Amortization of acquired contract liabilities |
|
|
(48,769 |
) |
|
|
(25,789 |
) |
|
|
(22,980 |
) |
|
|
— |
|
|
|
— |
|
|
Depreciation and amortization |
|
|
114,349 |
|
|
|
22,316 |
|
|
|
84,888 |
|
|
|
4,944 |
|
|
|
2,201 |
|
|
Adjusted Earnings (Losses) before Interest, Taxes, Depreciation and Amortization, and Pension ("Adjusted EBITDAP") |
|
$ |
85,176 |
|
|
$ |
111,748 |
|
|
$ |
(2,994 |
) |
|
$ |
35,548 |
|
|
$ |
(59,126 |
) |
|
Net sales |
|
$ |
2,495,903 |
|
|
$ |
754,193 |
|
|
$ |
1,551,090 |
|
|
$ |
209,860 |
|
|
$ |
(19,240 |
) |
|
Adjusted EBITDAP margin |
|
|
3.5 |
% |
|
|
15.3 |
% |
|
|
(0.2 |
)% |
|
|
16.9 |
% |
|
n/a |
|
|
*Operating loss at Corporate includes share-based compensation expense.
12
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 December 31, 2019 |
|
|||||||||
|
|
|
Pre-Tax |
|
|
After-Tax |
|
|
Diluted EPS |
|
|||
|
Loss from continuing operations - GAAP |
|
$ |
(17,528 |
) |
|
$ |
(13,846 |
) |
|
$ |
(0.27 |
) |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on sale of assets and businesses, net |
|
|
60,019 |
|
|
|
47,415 |
|
|
|
0.93 |
|
|
Legal judgment gain, net of expenses |
|
|
(3,857 |
) |
|
|
(3,047 |
) |
|
|
(0.06 |
) |
|
Union incentives |
|
|
1,400 |
|
|
|
1,106 |
|
|
|
0.02 |
|
|
Restructuring costs |
|
|
4,744 |
|
|
|
3,748 |
|
|
|
0.07 |
|
|
Adjusted income from continuing operations - non-GAAP |
|
$ |
44,778 |
|
|
$ |
35,376 |
|
|
$ |
0.69 |
|
|
|
|
Nine Months Ended December 31, 2019 |
|
|||||||||||||
|
|
|
Pre-Tax |
|
|
After-Tax |
|
|
Diluted EPS |
|
|
FY20 EPS Guidance Range |
|
||||
|
Income from continuing operations - GAAP |
|
$ |
59,420 |
|
|
$ |
46,943 |
|
|
$ |
0.93 |
|
|
$1.28 - $1.48 |
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on sale of assets and businesses, net |
|
|
55,190 |
|
|
|
43,600 |
|
|
|
0.86 |
|
|
|
1.07 |
|
|
Curtailment gain & special termination gain, net |
|
|
(14,373 |
) |
|
|
(11,355 |
) |
|
|
(0.22 |
) |
|
|
(0.28 |
) |
|
Legal settlement gain, net of expenses |
|
|
(9,257 |
) |
|
|
(7,313 |
) |
|
|
(0.14 |
) |
|
|
(0.18 |
) |
|
Union incentives |
|
|
7,071 |
|
|
|
5,586 |
|
|
|
0.11 |
|
|
|
0.14 |
|
|
Restructuring costs |
|
|
13,490 |
|
|
|
10,657 |
|
|
|
0.21 |
|
|
|
0.26 |
|
|
Refinancing cost |
|
|
3,030 |
|
|
|
2,394 |
|
|
|
0.05 |
|
|
|
0.06 |
|
|
Adjusted income from continuing operations - non-GAAP* |
|
$ |
114,571 |
|
|
$ |
90,512 |
|
|
$ |
1.79 |
|
|
$2.35 - $2.55 |
|
|
* Differences due to rounding
|
|
|
Three Months Ended December 31, 2018 |
|
|||||||||
|
|
|
Pre-Tax |
|
|
After-Tax |
|
|
Diluted EPS |
|
|||
|
Loss from continuing operations - GAAP |
|
$ |
(29,722 |
) |
|
$ |
(30,945 |
) |
|
$ |
(0.62 |
) |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Global 7500 forward loss charge |
|
|
40,498 |
|
|
|
40,498 |
|
|
|
0.81 |
|
|
E2 Jet program forward loss charge |
|
|
9,162 |
|
|
|
7,604 |
|
|
|
0.15 |
|
|
G280 program forward loss charge |
|
|
2,516 |
|
|
|
2,088 |
|
|
|
0.04 |
|
|
Restructuring costs |
|
|
2,327 |
|
|
|
1,891 |
|
|
|
0.04 |
|
|
Adjusted income from continuing operations - non-GAAP |
|
$ |
24,781 |
|
|
$ |
21,136 |
|
|
$ |
0.42 |
|
13
FINANCIAL DATA (UNAUDITED)
TRIUMPH GROUP, INC. AND SUBSIDIARIES
(dollars in thousands, except per share data)
Non-GAAP Financial Measure Disclosures (continued)
|
|
|
Nine Months Ended December 31, 2018 |
|
|||||||||
|
|
|
Pre-Tax |
|
|
After-Tax |
|
|
Diluted EPS |
|
|||
|
Loss from continuing operations - GAAP |
|
$ |
(119,416 |
) |
|
$ |
(122,155 |
) |
|
$ |
(2.46 |
) |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adoption of ASU 2017-07 |
|
|
87,241 |
|
|
|
85,474 |
|
|
|
1.71 |
|
|
Loss on sale of assets and businesses, net |
|
|
17,837 |
|
|
|
17,837 |
|
|
|
0.36 |
|
|
Global 7500 forward loss charge |
|
|
60,424 |
|
|
|
57,664 |
|
|
|
1.16 |
|
|
E2 Jet program forward loss charge |
|
|
9,162 |
|
|
|
7,604 |
|
|
|
0.15 |
|
|
G280 program forward loss charge |
|
|
2,516 |
|
|
|
2,088 |
|
|
|
0.04 |
|
|
Reduction of prior Gulfstream forward loss |
|
|
(7,624 |
) |
|
|
(6,328 |
) |
|
|
(0.13 |
) |
|
Restructuring costs |
|
|
18,206 |
|
|
|
15,111 |
|
|
|
0.30 |
|
|
Refinancing costs |
|
|
1,281 |
|
|
|
1,063 |
|
|
|
0.02 |
|
|
Adjusted income from continuing operations - non-GAAP* |
|
$ |
69,627 |
|
|
$ |
58,358 |
|
|
$ |
1.17 |
|
* Differences due to rounding
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 |
|
|
Nine Months Ended |
|
||||||||||
|
|
|
December 31, 2019 |
|
|
December 31, 2018 |
|
|
December 31, 2019 |
|
|
December 31, 2018 |
|
||||
|
Operating income (loss) - GAAP |
|
$ |
1,661 |
|
|
$ |
(16,933 |
) |
|
$ |
98,209 |
|
|
$ |
(85,482 |
) |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adoption of ASU 2017-07 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
87,241 |
|
|
Loss on sale of assets and businesses, net |
|
|
60,019 |
|
|
|
— |
|
|
|
55,190 |
|
|
|
17,837 |
|
|
Global 7500 forward loss charge |
|
|
— |
|
|
|
40,498 |
|
|
|
— |
|
|
|
60,424 |
|
|
E2 Jet program forward loss charge |
|
|
— |
|
|
|
9,162 |
|
|
|
— |
|
|
|
9,162 |
|
|
G280 program forward loss charge |
|
|
— |
|
|
|
2,516 |
|
|
|
— |
|
|
|
2,516 |
|
|
Reduction of prior Gulfstream forward loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(7,624 |
) |
|
Restructuring costs |
|
|
4,744 |
|
|
|
2,327 |
|
|
|
13,490 |
|
|
|
18,206 |
|
|
Legal judgment gain, net of expenses |
|
|
(3,857 |
) |
|
|
— |
|
|
|
(9,257 |
) |
|
|
— |
|
|
Union incentives |
|
|
1,400 |
|
|
|
— |
|
|
|
7,071 |
|
|
|
— |
|
|
Adjusted operating income - non-GAAP |
|
$ |
63,967 |
|
|
$ |
37,570 |
|
|
$ |
164,703 |
|
|
$ |
102,280 |
|
14
FINANCIAL DATA (UNAUDITED)
TRIUMPH GROUP, INC. AND SUBSIDIARIES
(dollars in thousands, except per share data)
Non-GAAP Financial Measure Disclosures (continued)
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 December 31, |
|
|
Nine Months Ended December 31, |
|
||||||||||
|
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
||||
|
Cash flow (provided by) used in operations |
|
$ |
49,881 |
|
|
$ |
4,063 |
|
|
$ |
39,288 |
|
|
$ |
(193,116 |
) |
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures |
|
|
(10,255 |
) |
|
|
(10,570 |
) |
|
|
(27,250 |
) |
|
|
(34,824 |
) |
|
Free cash flow (use) |
|
$ |
39,626 |
|
|
$ |
(6,507 |
) |
|
$ |
12,038 |
|
|
$ |
(227,940 |
) |
The Company provides cash flow guidance on non-GAAP basis adjusting capital expenditures from cash from operations to arrive at free cash flow. The following table reconciles cash from operations on a GAAP basis to free cash flow guidance.
|
|
|
FY20 Cash Flow Guidance Range |
|
Cash flow from operations |
|
$40,000 - $100,000 |
|
Less: |
|
|
|
Capital expenditures |
|
$40,000 - $50,000 |
|
Free cash flow |
|
$0 - $50,000 |
15