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Triumph Group Inc. Reports Operating Results (10-Q)

February 04, 2011 | About:
10qk

10qk

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Triumph Group Inc. (TGI) filed Quarterly Report for the period ended 2010-12-31.

Triumph Grp Inc has a market cap of $2.23 billion; its shares were traded at around $91.99 with a P/E ratio of 16.2 and P/S ratio of 1.7. The dividend yield of Triumph Grp Inc stocks is 0.2%. Triumph Grp Inc had an annual average earning growth of 7.3% over the past 10 years.Hedge Fund Gurus that owns TGI: Private Capital of Private Capital Management, Kenneth Fisher of Fisher Asset Management, LLC, Paul Tudor Jones of The Tudor Group. Mutual Fund and Other Gurus that owns TGI: Arnold Schneider of Schneider Capital Management, Chuck Royce of Royce& Associates.

Highlight of Business Operations:

Net sales increased by $497.3 million, or 158.6%, to $810.9 million for the quarter ended December 31, 2010 from $313.5 million for the quarter ended December 31, 2009. The acquisition of Vought, along with

Cost of sales increased by $401.6 million, or 175.4%, to $630.6 million for the quarter ended December 31, 2010 from $229.0 million for the quarter ended December 31, 2009. This increase includes the impact of the acquisition of Vought and the fiscal 2010 acquisitions noted above, which contributed $391.6 million. Gross margin for the quarter ended December 31, 2010 was 22.2%, as compared to 27.0% for the prior year period. Excluding the effects of these acquisitions, gross margin was 28.8% for the quarter ended December 31, 2010, compared with 27.0% for the quarter ended December 31, 2009. The prior year period organic gross margin excluded the impact of certain favorable settlements of retroactive price agreements that have occurred since December 2009. In addition, the current year gross margins on sales in the Aftermarket Services Group have continued to improve with increased revenues.

Segment operating income increased by $57.0 million, or 140.9%, to $97.5 million for the quarter ended December 31, 2010 from $40.5 million for the quarter ended December 31, 2009. The segment operating income increase was a direct result of contributions from the acquisition of Vought and the fiscal 2010 acquisitions ($48.0 million), as well as improvement in organic gross margin ($5.9 million) and organic revenue growth. In addition, the prior year period was negatively impacted by the events described above.

Corporate expenses increased by $3.3 million, or 44.2%, to $10.9 million for the quarter ended December 31, 2010 from $7.6 million for the quarter ended December 31, 2009. The corporate expense increase was impacted by integration costs associated with the acquisition of Vought ($1.0 million), increased compensation and benefits ($1.1 million) due to increased corporate head count as compared to the prior year period, and an increase of $2.5 million of start up costs related to the Mexican facility compared to the prior year period, partially offset by decreases in legal and consulting expenses ($1.2 million).

Interest expense and other increased by $14.1 million, or 181.5%, to $21.9 million for the quarter ended December 31, 2010 compared to $7.8 million for the prior year period. This increase was due to higher average debt outstanding during the quarter ended December 31, 2010 mostly due to the acquisition of Vought as compared to the quarter ended December 31, 2009, including the Senior Subordinated Notes due 2017 (the 2017 Notes), the Senior Notes due 2018 (the 2018 Notes) and the Term Loan, along with higher interest rates on our revolving credit facility.

Loss from discontinued operations before income taxes was $0.5 million for the quarter ended December 31, 2010 compared with a loss from discontinued operations before income taxes of $19.1 million, for the quarter ended December 31, 2009. Due to failed negotiations with certain potential buyers of the business in the quarter ended December 31, 2009, the Company reassessed its estimated fair value of the business based on current viable offers to purchase the business, recent performance results and overall market conditions. This reassessment resulted in a write-down, which was applied to accounts receivable, inventory and property, plant and equipment. The Company recognized a pre-tax loss of $17.4 million in the third quarter of fiscal 2010, based on the write-down of the carrying value of the business to estimated fair value less cost to sell. The benefit for income taxes was $0.2 million for the quarter ended December 31, 2010 compared to a benefit of $6.6 million in the prior year period.

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