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4-Traders Homepage  >  Equities  >  Nyse  >  Northrop Grumman Corporation    NOC

Delayed Quote. Delayed  - 07/29 10:03:08 pm
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02:44p Triumph Reports First Quarter Fiscal 2017 Results
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Triumph Reports First Quarter Fiscal 2017 Results

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07/29/2016 | 02:44pm CEST

Release date- 28072016 - riumph Reports First Quarter Fiscal 2017 Results.

First Quarter Fiscal 2017 Results

Net sales of $893.3 million for first quarter fiscal year 2017 reflecting the impact of new wins in Product Support and improving deliveries in Aerospace Structures

Operating income for first quarter fiscal year 2017 was $46.7 million, impacted by charges of $46.1 million ($0.64 per diluted share) detailed below

Net income for first quarter fiscal year 2017 was $19.7 million, or $0.40 per diluted share, and included the above noted charges. Excluding these charges, net income was $51.6 million, or $1.04 per diluted share

Cash flow utilization from operations for first quarter fiscal year 2017 was $84.0 million

Selected by Lockheed Martin to supply engine and structures components for F-35 Lightning II aircraft

Signed memorandum of understanding (MOU) with Northrop Grumman to advance high altitude long endurance unmanned aircraft system (UAS) production

Partnered with Spirit AeroSystems to close final issues associated with the G650 and G280 wing transaction. In addition, extended several additional contracts worth $240 million related to content on other platforms

Key Developments from 'One Triumph' Transformation Strategy

Fully staffed and launched Transformation Delivery Office (TDO) to oversee and drive our restructure and transformation efforts

Appointed James McCabe as Senior Vice President and Chief Financial Officer (CFO), a proven public company CFO with over 25 years of operating and finance experience that has served in diversified industrial companies, effective August 8, 2016

MaryLou Thomas named executive vice president of the Aerospace Structures business unit and Michael Holtz named Vice President, Performance Excellence

Announced two facility consolidations totaling approximately 200,000 square feet; remain on track to complete five consolidations by end of fiscal year 2017

Initiated divestitures of non-core operating companies to focus our portfolio and generate cash for debt reduction and investment

Completed all debt restructuring activities providing flexibility to execute transformation and growth initiatives

Continued focus on key imperatives: delivering on customer commitments, becoming predictably profitable and driving organic growth

BERWYN, Pa. -- Triumph Group, Inc. (NYSE: TGI) today reported financial results for its first quarter of fiscal year 2017, which ended June 30, 2016.

'Triumph's first quarter results reflected our new four business unit structure, improved cash performance, expanded revenues in Aerospace Structures due to improved deliveries and continued strong operating margins in Integrated Systems and Product Support,' said Daniel J. Crowley, Triumph's president and chief executive officer. 'While the overall earnings were below our expectations as a result of non-recurring charges taken on the strike at our Spokane facility, which has now been resolved without impacting our customers, and program execution challenges, we are retiring execution risks and incorporating the lessons learned as we move ahead on our transformation program. We are confident that the changes we are making will help achieve predictable financial performance and sustainable value creation in the future.'

Mr. Crowley continued, 'We are encouraged by our customers' response to our One Company transformation efforts. Our growing partnership with Lockheed Martin, Northrop Grumman and Spirit AeroSystems, three key Tier 1 customers, demonstrates positive momentum entering fiscal 2017 as we focus on reducing costs, integrating our supply chain and improving on-time delivery and quality. During the first quarter, we strengthened our senior leadership team, announced two facility consolidations, initiated divestiture actions and developed a detailed operational excellence plan. We expect these actions to improve Triumph's performance in the areas of execution, organic growth and delivering predictable profitability as part of our commitment to our shareholders, customers and employees.'

'One Triumph' Transformation Strategy

Following are key accomplishments and developments from the first quarter fiscal year 2017 to drive Triumph's transformation:

The Transformation Delivery Office (TDO), which will be instrumental in executing the restructure and transformation process and instilling a high performance oriented culture, has now been launched and fully staffed in critical senior positions. Michael Holtz was appointed Vice President, Performance Excellence and will lead the development and implementation of initiatives and capabilities that advance performance in program management, engineering, quality and operations across the four business units.

Continued to strengthen the leadership team with the announcement of James McCabe as CFO and MaryLou Thomas as executive vice president of the Aerospace Structures business unit.

Triumph announced the closure of two facilities totaling approximately 200,000 square feet. These consolidations will reduce the headcount by approximately 150 employees. The company remains on track to achieve its target of consolidating five total facilities in fiscal year 2017 totaling over 500,000 square feet.

Cost Reduction Initiatives in support of the multi-year $300 million goal were launched and continue to gain momentum impacting all operating costs elements. In connection with its emphasis on cash management and cost reductions, the company initiated a company-wide education and metrics program to drive needed improvements. The first round of Value Stream Mapping events across an initial eighteen sites are underway to support our FY17 objectives and will expand across the enterprise.

As part of the Triumph Operating System (TOS), the company developed an operational excellence plan that includes Continuous Improvement roadmaps for specific facilities. The roadmaps are designed to achieve fiscal year 2017 cost improvement targets and instill a culture of continuous improvement for future years.

First Quarter Fiscal 2017 Results

For the fiscal first quarter of 2017, net sales were $893.3 million and reflected organic growth driven by new wins in Product Support and improving deliveries in Aerospace Structures. Organic sales for the quarter decreased eight percent compared to the fiscal first quarter 2016 primarily due to production rate reductions on key Aerospace Structures' programs.

Net income for the first quarter of fiscal year 2017 was $19.7 million, or $0.40 per diluted share, compared to $62.7 million, or $1.27 per diluted share, for the first quarter of the prior fiscal year. Triumph recorded pre-tax charges of $46.1 million ($0.64 per diluted share) during the fiscal first quarter of 2017. These included:

$15.7 million of strike costs related to the recently ratified IAM collective bargaining agreement in Spokane

$14.2 million related to the memorandum of understanding (MOU) with Northrop Grumman to advance UAS production

$10.1 million of restructuring charges as detailed in the Q4 FY 2016 press release, of which $3.5 million were non-cash

$6.1 million inventory write-down associated with excess start-up costs

The prior fiscal year's quarter included a one-time pension curtailment charge of $2.9 million pre-tax ($0.04 per diluted share). The number of shares used in computing diluted earnings per share for the first quarter of fiscal year 2017 was 49.5 million.

For the quarter ended June 30, 2016, cash flow utilization from operations was $84.0 million, which reflected continued spending on key development programs and the impact of the IAM strike and restructuring efforts.

Segment Results

As previously announced, Triumph has changed its financial reporting to more closely align with how the company manages its operations in four key business units: Integrated Systems, Aerospace Structures, Precision Components and Product Support.

Integrated Systems

Integrated Systems reported net sales of $257.4 million in the first quarter of fiscal year 2017 compared to $258.6 million in the prior year period. Organic sales for the quarter declined five percent primarily due to the timing of deliveries on key military programs and customer deferrals on commercial rotorcraft. Operating income for the first quarter of fiscal year 2017 was $48.0 million compared to $50.6 million for the prior year period, a decrease of five percent, reflecting an operating margin of nineteen percent.

Integrated Systems provides integrated solutions including design, development and support of proprietary components, subsystems and systems, as well as production of complex assemblies using external designs.

Aerospace Structures

Aerospace Structures reported net sales of $331.6 million in the first quarter of fiscal year 2017 compared to $395.1 million in the prior fiscal year period, reflecting the impact of improving deliveries. The year over year decline in sales for the quarter was sixteen percent and was primarily due to decreased production on the 747-8, G450/G550 and A330 programs. Operating income for the first quarter of fiscal year 2017 was $9.2 million, compared to $41.8 million for the prior year period and included restructuring charges of $3.1 million. The segment's operating results for the quarter included a net unfavorable cumulative catch-up adjustment on long-term contracts of $28.0 million, which was primarily related to the UAS and A350 programs. The segment's operating margin for the quarter was three percent. Excluding the charges related to the MOU with Northrop Grumman and restructuring efforts, operating margin for the first quarter of fiscal 2017 was eight percent.

Aerospace Structures supplies commercial, business and military manufacturers with large metallic and composite structures.

Precision Components

Precision Components reported net sales of $254.6 million in the first quarter of fiscal year 2017 compared to $265.1 million in the prior year period, a decrease of four percent, all of which were organic. Operating loss for the first quarter of fiscal year 2017 was ($7.8) million compared to operating income of $24.9 million for the prior year period, and included pre-tax charges totaling $26.8 million related to the IAM strike, restructuring charges and inventory write-down. Excluding these charges, operating margin for the first quarter of fiscal 2017 was seven percent.

Precision Components produces close-tolerance parts to customer designs and model-based definition, including a wide range of aluminum, hard metal and composite structure capabilities. Capabilities include complex machining, gear manufacturing, sheet metal fabrication, forming, advanced composite, interior structures and joining processes.

Product Support

Product Support reported net sales in the first quarter of fiscal year 2017 of $84.2 million compared to $74.7 million in the prior year period, all of which were organic. Sales for the quarter were thirteen percent higher than the prior year due to recent wins from existing and targeted customers resulting from the new business development organization's efforts. Operating income for the first quarter of fiscal year 2017 was $14.1 million compared to $10.0 million for the prior year period, reflecting an operating margin of seventeen percent.

Product Support provides full life cycle solutions for commercial, regional and military aircraft. Triumph's extensive product and service offerings include full post-delivery value chain services that simplify the MRO supply chain.

Outlook

The company updated its full year expectations, reflecting current aircraft production rates, first quarter performance and an updated assessment of program risks. Additionally, the guidance takes into consideration estimated costs associated with risk retirement initiatives on development and key programs. The company reaffirms its fiscal year 2017 revenue guidance of $3.6 to $3.7 billion and now expects its full year earnings per share to be in the range of $3.15 to $3.45 per diluted share. The company expects free cash flow utilization of approximately $100.0 million to $120.0 million and anticipates having sufficient financial flexibility to fund restructuring efforts during fiscal year 2017. This guidance does not take into account any potential divestitures that would be executed during fiscal year 2017.

Conference Call

Triumph Group will hold a conference call today, July 28th at 8:30 a.m. (ET) to discuss the first quarter fiscal year 2017 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. An audio replay will be available from July 28th to August 4th by calling (888) 266-2081 (Domestic) or (703) 925-2533 (International), passcode #1674396.

About Triumph Group

Triumph Group, Inc., headquartered in Berwyn, Pennsylvania, designs, engineers, manufactures, repairs and overhauls a broad portfolio of aerostructures, aircraft components, accessories, subassemblies and systems. The company serves a broad, worldwide spectrum of the aviation industry, including original equipment manufacturers of commercial, regional, business and military aircraft and aircraft components, as well as commercial and regional airlines and air cargo carriers.

More information about Triumph can be found on the company's website at www.triumphgroup.com.

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, cost savings and 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, 2016.

FINANCIAL DATA (UNAUDITED) ON FOLLOWING 8 PAGES

TRIUMPH GROUP, INC. AND SUBSIDIARIES

Please read full release at :

http://ir.triumphgroup.com/phoenix.zhtml?c=61870&p=irol-newsArticle&ID=2189304

(c) 2016 Electronic News Publishing -, source ENP Newswire

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Sales 2016 23 834 M
EBIT 2016 2 925 M
Net income 2016 1 950 M
Debt 2016 4 667 M
Yield 2016 1,57%
P/E ratio 2016 20,15
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EV / Sales 2016 1,82x
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Mean consensus OUTPERFORM
Number of Analysts 17
Average target price 225 $
Spread / Average Target 3,5%
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NameTitle
Wesley G. Bush Chairman, President & Chief Executive Officer
Gloria A. Flach Chief Operating Officer
Kenneth L. Bedingfield Chief Financial Officer & Corporate Vice President
Patrick M. Antkowiak CTO & Corporate Vice President
Donald E. Felsinger Lead Independent Director
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