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

February 03, 2012 | About:

10qk

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Triumph Group Inc. (TGI) filed Quarterly Report for the period ended 2011-12-31.

Triumph Group Inc. has a market cap of $3.11 billion; its shares were traded at around $63.37 with a P/E ratio of 15.9 and P/S ratio of 1. The dividend yield of Triumph Group Inc. stocks is 0.3%. Triumph Group Inc. had an annual average earning growth of 14.1% over the past 10 years.

Highlight of Business Operations:

Cost of sales increased $336.1 million, or 22.1%, to $1.86 billion for the nine months ended December 31, 2011 from $1.52 billion for the nine months ended December 31, 2010. This increase includes the impact of the acquisition of Vought noted above, which contributed $283.0 million. Gross margin for the nine months ended December 31, 2011 was 24.5%, as compared to 23.3% for the prior year period. Excluding the effects of the acquisition of Vought, gross margin was 29.1% for the nine months ended December 31, 2011, compared with 29.2% for the nine months ended December 31, 2010.

Segment operating income increased by $117.6 million, or 46.8%, to $369.0 million for the nine months ended December 31, 2011 from $251.3 million for the nine months ended December 31, 2010. The operating income increase was due to the contribution from the acquisition of Vought ($101.3 million) and increased organic sales ($11.6 million). The contribution of Vought included cumulative catch-up adjustments to operating income with gross favorable adjustments of $26.2 million and gross unfavorable adjustments of $10.5 million, as well as lower pension and other postretirement benefit expenses ($23.5 million). The cumulative catch-up adjustments for the nine months ended December 31, 2011 were due to improvements in overhead allocations, revisions in our mix of various material and labor costs related to our efforts to gain efficiencies through expansion of our in-sourcing capabilities and the reduction in provisions for technical problems on production lots at or near completion, net of ERP system implementation expenses.

Aerostructures: The Aerostructures segment net sales increased by $434.7 million, or 30.6%, to $1.86 billion for the nine months ended December 31, 2011 from $1.42 billion for the nine months ended December 31, 2010. The increase was primarily due to the acquisition of Vought ($402.1 million), in addition to an increase in organic sales of $32.6 million. The current year period was negatively impacted by Boeing's delay with the 747. Net sales in the prior year period included an additional $38.7 million in non-recurring revenue on the 747 program and an additional $10.9 million in 787 production revenue versus the current year period. The prior year period was negatively impacted by the decreased demand for business jets and regional jets as well as commercial rate reductions (particularly in the 777 program).

Aerostructures segment operating income increased by $107.8 million, or 61.0%, to $284.4 million for the nine months ended December 31, 2011 from $176.6 million for the nine months ended December 31, 2010. Operating income increased due in part to the increase in organic sales, contributions from the acquisition of Vought ($98.7 million) and improved gross margins on organic sales ($0.3 million). The contribution of Vought included cumulative catch-up adjustments to operating income with gross favorable adjustments of $26.2 million and gross unfavorable adjustments of $10.5 million, as well as lower pension and other postretirement benefit expenses ($23.5 million). The contribution of Vought also included improvements due to decreases in overall head count resulting in lower compensation and benefits primarily as a result of the continued integration ($11.1 million).

Aerospace Systems segment operating income increased by $10.8 million, or 20.3%, to $63.7 million for the nine months ended December 31, 2011 from $52.9 million for the nine months ended December 31, 2010. Operating income increased due to increases in gross margin ($5.1 million) due to sales mix and increased efficiencies in production associated with higher volume of work and increased sales ($10.8 million), offset by increased legal fees ($2.0 million) due to the prior year period including the net recovery of $0.8 million of prior legal costs and increased development costs ($2.2 million). These same factors contributed to the increase in EBITDA year over year.

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