-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QK2Sjz39Tww5BotPoJ8aacTlhgFZys/uFs5038UJTvTmj4izpKsj9kNQYAFQT6b0 i4epjbln5Q676OgxXXfi3Q== /in/edgar/work/20000814/0000912057-00-036954/0000912057-00-036954.txt : 20000921 0000912057-00-036954.hdr.sgml : 20000921 ACCESSION NUMBER: 0000912057-00-036954 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRIUMPH GROUP INC / CENTRAL INDEX KEY: 0001021162 STANDARD INDUSTRIAL CLASSIFICATION: [3720 ] IRS NUMBER: 510347963 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-12235 FILM NUMBER: 696397 BUSINESS ADDRESS: STREET 1: FOUR GLENHARDIE CORPORATE CENTER STREET 2: 1255 DRUMMERS LANE SUITE 200 CITY: WAYNE STATE: PA ZIP: 19087 BUSINESS PHONE: 6109750420 MAIL ADDRESS: STREET 1: FOUR GLENHARDIE CORPORATE CENTER STREET 2: 1255 DRUMMERS LANE SUITE 200 CITY: WAYNE STATE: PA ZIP: 19087 10-Q 1 a10-q.txt 10-Q United States Securities and Exchange Commission Washington, D.C. 20549 FORM 10-Q [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Period Ended June 30, 2000. or [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Transition Period From _________ to ________ Commission File Number: 1-12235 ------- TRIUMPH GROUP, INC. ------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 51-0347963 - ------------------------------- ---------------------------------- (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 1255 Drummers Lane, Suite 200 Wayne, PA 19087-1565 - ---------------------------------------- --------------- (Address of principal executive offices) (Zip Code) (610) 975-0420 ----------------------------------------------------------------------------- (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes /X/ No / / Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practical date. Common Stock, par value $0.001 per share, 8,326,624 shares and Class D common stock, par value $0.001 per share, 3,348,535 shares, each as of August 1, 2000 TRIUMPH GROUP, INC. INDEX Part I. Financial Information PAGE NUMBER ----------- Item 1. Financial Statements (Unaudited) Consolidated Balance Sheets 1 March 31, 2000 and June 30, 2000 Consolidated Statements of Income 3 Three months ended June 30, 1999 and 2000 Consolidated Statements of Cash Flows 4 Three months ended June 30, 1999 and 2000 Notes to Consolidated Financial Statements 6 June 30, 2000 Item 2. Management's Discussion and Analysis of Financial 10 Condition and Results of Operations Item 3. Quantitative and Qualitative Disclosures About 13 Market Risk Part II. Other Information Item 1. Legal Proceedings 14 Item 2. Changes in Securities 14 Item 3. Defaults upon Senior Securities 14 Item 4. Submission of Matters to a Vote of Security Holders 14 Item 5. Other Information 14 Item 6. Exhibits and Reports on Form 8-K 14 Signature Page 15 Part I. Financial Information Item: 1. Financial Statements Triumph Group, Inc. Consolidated Balance Sheets (dollars in thousands) MARCH 31, JUNE 30, 2000 2000 -------- -------- (unaudited) ASSETS Current assets: Cash $ 6,279 $ 7,529 Accounts receivable, net 78,960 91,801 Inventories 123,750 152,798 Prepaid expenses and other 4,730 6,620 -------- -------- Total current assets 213,719 258,748 Property and equipment, net 122,787 145,535 Excess of cost over net assets acquired, net 144,027 199,724 Intangible assets and other, net 26,398 30,163 -------- -------- Total assets $506,931 $634,170 ======== ======== -1- Triumph Group, Inc. Consolidated Balance Sheets (continued) (dollars in thousands, except per share data)
MARCH 31, JUNE 30, 2000 2000 --------- --------- (unaudited) LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 34,996 $ 37,948 Accrued expenses 45,316 57,619 Income taxes payable 2,899 4,515 Deferred income taxes 1,365 1,508 Current portion of long-term debt 4,856 5,140 --------- --------- Total current liabilities 89,432 106,730 Long-term debt, less current portion 133,952 234,419 Deferred income taxes and other 39,177 40,310 Stockholders' equity: Common stock, $.001 par value, 50,000,000 shares authorized, 8,551,786 shares issued 9 9 Class D common stock convertible, $.001 par value, 6,000,000 shares authorized, 3,348,535 shares issued and outstanding 3 3 Capital in excess of par value 135,418 135,418 Treasury stock, at cost, 229,175 and 225,537 shares (5,580) (5,492) Accumulated other comprehensive loss (684) (694) Retained earnings 115,204 123,467 --------- --------- Total stockholders' equity 244,370 252,711 --------- --------- Total liabilities and stockholders' equity $ 506,931 $ 634,170 ========= =========
SEE ACCOMPANYING NOTES. -2- Triumph Group, Inc. Consolidated Statements of Income (in thousands, except per share data) (unaudited) THREE MONTHS ENDED JUNE 30, 1999 2000 -------- -------- Net sales $104,894 $128,996 Operating costs and expenses: Cost of products sold 71,911 87,642 Selling, general, and administrative 13,435 16,967 Depreciation and amortization 4,726 6,415 -------- -------- 90,072 111,024 Operating income 14,822 17,972 Interest expense and other 1,855 4,843 -------- -------- Income before income taxes 12,967 13,129 Income tax expense 4,732 4,858 -------- -------- Net income $ 8,235 $ 8,271 ======== ======== Earnings Per Common Share - Basic: Net income $ 0.70 $ 0.71 ======== ======== Weighted average common shares outstanding - Basic 11,737 11,672 ======== ======== Earnings Per Common Share - Assuming Dilution: Net income $ 0.66 $ 0.67 ======== ======== Weighted average common shares outstanding - Assuming Dilution 12,455 12,397 ======== ======== SEE ACCOMPANYING NOTES. -3- Triumph Group, Inc. Consolidated Statements of Cash Flows (dollars in thousands) (unaudited)
THREE MONTHS ENDED JUNE 30, --------------------------- 1999 2000 -------- -------- OPERATING ACTIVITIES Net income $ 8,235 $ 8,271 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 4,726 6,415 Provision for deferred income taxes 2,148 1,567 Interest on subordinated and junior subordinated promissory notes paid by issuance of additional notes 218 246 Changes in other current assets and liabilities, net of acquisitions of businesses: Accounts receivable 7,908 (2,944) Inventories (5,623) (10,461) Prepaid expenses and other (290) (619) Accounts payable, accrued expenses, and accrued income taxes payable (9,116) (2,345) Other (29) (3,677) -------- -------- Net cash provided by (used in) operating activities 8,177 (3,547) -------- -------- INVESTING ACTIVITIES Capital expenditures, net (4,507) (5,337) Cash used for businesses acquired (13,031) (54,243) -------- -------- Net cash used in investing activities (17,538) (59,580)
-4- Triumph Group, Inc. Consolidated Statements of Cash Flows (continued) (dollars in thousands) (unaudited)
THREE MONTHS ENDED JUNE 30, 1999 2000 -------- -------- FINANCING ACTIVITIES Net increase in revolving credit facility borrowings $ 16,930 $ 64,791 Repayment of debt and capital lease obligations (1,435) (494) Purchase of treasury stock (2,864) -- Payment of deferred financing costs (963) -- Proceeds from exercise of stock options 27 80 -------- -------- Net cash provided by financing activities 11,695 64,377 -------- -------- Net change in cash 2,334 1,250 Cash at beginning of period 4,953 6,279 -------- -------- Cash at end of period $ 7,287 $ 7,529 ======== ======== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid for income taxes $ 896 $ 1,124 Cash paid for interest 1,556 3,613
SEE ACCOMPANYING NOTES. -5- Triumph Group, Inc. Notes to Consolidated Financial Statements (dollars in thousands, except per share data) (Unaudited) 1. BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended June 30, 2000 are not necessarily indicative of the results that may be expected for the fiscal year ended March 31, 2001. For further information, refer to the consolidated financial statements and footnotes thereto included in Triumph Group, Inc.'s (the "Company") Annual Report on Form 10-K for the year ended March 31, 2000. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ORGANIZATION The Company's Aviation segment designs, engineers, manufactures or repairs and overhauls aircraft components for commercial airlines, air cargo carriers, and original equipment manufacturers on a worldwide basis. The Company's Metals segment manufactures, machines, processes, and distributes metal products to customers in the computer, construction, container and office furniture industries, primarily within North America. USE OF ESTIMATES The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. 3. ACQUISITIONS Effective April 1, 2000, the Company acquired all of the outstanding stock of ACR Industries, Inc. ("ACR"), Chem-Fab Corporation ("Chem-Fab") and Airborne Nacelle Services, Inc. ("Airborne Nacelle"). In May 2000, the Company acquired certain assets from the Anadite California Restoration Trust ("Anadite Assets"), (collectively the "2001 Acquisitions"). ACR, located in Macomb, Michigan, is a leading manufacturer of complex geared assemblies including gas turbine jet engine gear boxes, helicopter transmissions, geared systems for fixed-winged aircraft and other related components. Chem-Fab and Airborne Nacelle, both located in Hot-Spring, Arkansas, together process sheet metal and other structural parts and assemblies for the aerospace industry. The Anadite Assets, which will be relocated to several of the Company's existing operating facilities, will provide anodizing, chemical film coating, phosphate flouride coating, passivation, liquid penetrant inspection, hardness testing, conductivity testing, thermal optical properties testing and painting to the aerospace industry. The combined purchase price for these acquisitions was $101,130. The purchase price includes cash paid at closing, the assumption of debt and certain liabilities, direct costs of the acquisitions and deferred payments. The combined excess of the purchase price over the estimated fair value of the net assets acquired of $57,485 was recorded as excess of cost over net assets acquired and is being amortized over thirty years on a straight-line basis. These acquisitions have been accounted for under the purchase method and, accordingly, are included in the consolidated financial statements from their dates of acquisition. These acquisitions were funded by the Company's long-term borrowings in place at the date of each respective acquisition. -6- Triumph Group, Inc. Notes to Consolidated Financial Statements (continued) (dollars in thousands, except per share data) (Unaudited) 3. ACQUISITIONS (Continued) In fiscal 2000, the Company acquired all of the outstanding stock of Ralee Engineering Company, Construction Brevitees d'Alfortville, and Lee Aerospace, Inc. and also acquired substantially all of the assets of KT Aerofab, now operated by the Company as Triumph Components-San Diego, Inc. (collectively the "2000 Acquisitions"). For more information about the 2000 Acquisitions, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2000. The following unaudited pro forma information has been prepared assuming the 2001 Acquisitions and the 2000 Acquisitions had occurred on April 1, 1999: Net Sales - $132,377; Net Income - $9,413; Earnings per Common Share - Basic - $0.80; and Earnings per Common Share - Diluted - $0.76. The unaudited pro forma information includes adjustments for interest expense that would have been incurred to finance the purchases, additional depreciation based on the estimated fair market value of the property and equipment acquired, and the amortization of the intangible assets and excess of cost over net assets acquired arising from the transactions. The unaudited pro forma financial information is not necessarily indicative of the results of operations as they would have been had the transactions been effected on the assumed dates. 4. INVENTORIES The components of inventories are as follows: MARCH 31, JUNE 30, 2000 2000 -------- -------- Raw materials $ 34,195 $ 43,306 Work-in-process 46,189 67,475 Finished goods 43,366 42,017 -------- -------- Total inventories $123,750 $152,798 ======== ======== 5. LONG-TERM DEBT Long-term debt consists of the following: MARCH 31, JUNE 30, 2000 2000 -------- -------- Revolving credit facility $107,204 $171,995 Subordinated promissory notes 17,686 50,544 Industrial revenue bonds 5,497 5,125 Capital lease obligations 7,661 7,474 Other debt 760 4,421 -------- -------- 138,808 239,559 Less current portion 4,856 5,140 -------- -------- $133,952 $234,419 ======== ======== -7- Triumph Group, Inc. Notes to Consolidated Financial Statements (continued) (dollars in thousands, except per share data) (Unaudited) 5. LONG-TERM DEBT (Continued) Effective April 1, 2000, in connection with the ACR and Chem-Fab acquisitions, the Company assumed approximately $32,626 of seller financing with a 7% interest rate and $3,588 of other debt. In July 2000, the Company retired $30,626 of the assumed seller financing and approximately $3,200 of the assumed other debt. These payments were funded by borrowings under the Credit Facility. 6. EARNINGS PER SHARE The following is a reconciliation between the weighted average outstanding shares used in the calculation of basic and diluted earnings per share: THREE MONTHS ENDED JUNE 30, -------------------- (in thousands) 1999 2000 ------ ------ Weighted average common shares outstanding 11,737 11,672 Net effect of dilutive stock options 68 75 Net effect of dilutive warrant 650 650 ------ ------ Weighted average common shares outstanding - assuming dilution 12,455 12,397 ====== ====== Options to purchase 171,817 shares of common stock, at prices ranging from $32.19 per share to $45.38 per share, were outstanding during the first quarter of fiscal 2001. These options were not included in the computation of diluted earnings per share because the exercise price was greater than the average market price of the common stock during the three months ended June 30, 2000 and, therefore, the effect would be antidilutive. -8- Triumph Group, Inc. Notes to Consolidated Financial Statements (continued) (dollars in thousands, except per share data) (Unaudited) 7. SEGMENT REPORTING Selected financial information for each reportable segment is as follows: THREE MONTHS ENDED JUNE 30, ------------------------- 1999 2000 --------- --------- Net Sales: Aviation $ 86,055 $ 112,840 Metals 18,839 16,156 --------- --------- $ 104,894 $ 128,996 ========= ========= Income before income taxes: Operating income (expense): Aviation $ 14,669 $ 18,104 Metals 930 924 Corporate (777) (1,056) --------- --------- 14,822 17,972 Interest expense and other 1,855 4,843 --------- --------- $ 12,967 $ 13,129 ========= ========= Capital expenditures: Aviation $ 4,135 $ 4,529 Metals 372 799 Corporate -- 9 --------- --------- $ 4,507 $ 5,337 ========= ========= Depreciation and amortization: Aviation $ 4,419 $ 6,103 Metals 295 294 Corporate 12 18 --------- --------- $ 4,726 $ 6,415 ========= ========= MARCH 31, 2000 JUNE 30, 2000 -------------- ------------- Assets: Aviation $ 477,374 $ 598,007 Metals 27,410 31,265 Corporate 2,147 4,898 --------- --------- $ 506,931 $ 634,170 ========= ========= During the three months ended June 30, 1999 and 2000, the Company had foreign sales of $11,677 and $22,271, respectively. -9- Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (The following discussion should be read in conjunction with the Consolidated Financial Statements contained elsewhere herein.) THREE MONTHS ENDED JUNE 30, 2000 COMPARED TO THREE MONTHS ENDED JUNE 30, 1999 AVIATION SEGMENT NET SALES. Net sales for the Aviation segment increased by $26.8 million, or 31.1%, to $112.8 million for the first quarter of fiscal 2001 from $86.1 million for the first quarter of fiscal 2000. This increase was due to the inclusion of an aggregate of $31.8 million and $5.8 million in net sales in the first quarter of fiscal 2001 and fiscal 2000, respectively, for Ralee Engineering Company ("Ralee"), Lee Aerospace, Inc. ("Lee"), Triumph Components-San Diego, Inc. ("Triumph Components"), and Construction Brevitees d'Alfortville ("CBA") (collectively the "2000 Acquisitions") and ACR Industries, Inc. ("ACR"), Chem-Fab Corporation ("Chem-Fab") and Airborne Nacelle Services, Inc. ("Airborne Nacelle"), (collectively the "2001 Acquisitions"). Net sales for the other operating divisions and subsidiaries in the Aviation segment experienced a 1.0% increase, totaling $0.8 million from the prior year period. The increase in sales was due to an increase in volume associated with certain Boeing commercial airplane programs, specifically increases in the 737 Next Generation, 747, 767 and 777, as well as the E-2C, Canadair's RJ programs and the Airbus A320. However, offsetting the increase in volume were pricing pressures experienced during the first quarter of fiscal 2001. COSTS OF PRODUCTS SOLD. Costs of products sold for the Aviation segment increased by $18.4 million, or 32.3%, to $75.4 million for the first quarter of fiscal 2001 from $57.0 million for the first quarter fiscal 2000. This increase was due to the inclusion of $20.5 million and $3.3 million in the first quarter of fiscal 2001 and fiscal 2000, respectively, of costs of products sold associated with net sales generated by the 2000 Acquisitions and the 2001 Acquisitions. Costs of products sold for the other operating divisions and subsidiaries in the Aviation segment increased by $1.1 million, or 2.1%, due to the increase in shipments for the programs discussed above. GROSS PROFIT. Gross profit for the Aviation segment increased by $8.4 million, or 28.9%, to $37.4 million for the first quarter of fiscal 2001 from $29.0 million for the first quarter of fiscal 2000. This increase was due to the inclusion of $11.3 million and $2.5 million in the first quarter of fiscal 2001 and fiscal 2000, respectively, of gross profit on the net sales generated by the 2000 Acquisitions and the 2001 Acquisitions. As a percentage of net sales, gross profit for the Aviation segment was 33.2% and 33.7% for the first quarter of fiscal 2001 and 2000, respectively. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and administrative expenses for the Aviation segment increased by $3.3 million, or 32.9%, to $13.2 million for the first quarter of fiscal 2001 from $9.9 million for the first quarter of fiscal 2000, due to the 2000 Acquisitions and the 2001 Acquisitions and the higher volume discussed above. DEPRECIATION AND AMORTIZATION. Depreciation and amortization for the Aviation segment increased by $1.7 million, or 38.1%, to $6.1 million for the first quarter of fiscal 2001 from $4.4 million for the first quarter of fiscal 2000. The increase was due to the assets acquired in connection with the 2000 Acquisitions and the 2001 Acquisitions as well as an increase in depreciation at certain operating units due to capital expenditures. OPERATING INCOME. Operating income for the Aviation segment increased by $3.4 million, or 23.4%, to $18.1 million for the first quarter of fiscal 2001 from $14.7 million for the first quarter of fiscal 2000. This increase was primarily due to the addition of net sales and profits generated by the 2000 Acquisitions and the 2001 Acquisitions. All other operating divisions and subsidiaries in the Aviation segment experienced a 7.9% decline in operating income from the prior year. As a percentage of net sales, operating income for the Aviation segment was 16.0% for the first quarter of fiscal 2001 and 17.0% for the first quarter of fiscal 2000. -10- Management's Discussion And Analysis of Financial Condition and Results of Operations (continued) METALS SEGMENT NET SALES. Net sales for the Metals segment decreased by $2.7 million, or 14.2%, to $16.2 million for the first quarter of fiscal 2001 from $18.8 million for the first quarter of fiscal 2000. This decrease was mainly due to a decrease in activity at the Company's structural steel erection operation. COSTS OF PRODUCTS SOLD. Costs of products sold for the Metals segment decreased by $2.7 million, or 17.9%, to $12.2 million for the first quarter of fiscal 2001 from $14.9 million for the first quarter of fiscal 2000. This decrease mainly was due to the decrease in activity at the Company's structural steel erection operation. GROSS PROFIT. Gross profit for the Metals segment decreased to $3.9 million for fiscal 2001 from $4.0 million for the prior year period. As a percentage of net sales, gross profit for the Metals segment was 24.4% and 21.0% for the first quarter of fiscal 2001 and fiscal 2000, respectively. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and administrative expenses for the Metals segment remained at $2.7 million for the first quarter of fiscal 2001 unchanged from the first quarter of fiscal 2000. DEPRECIATION AND AMORTIZATION. Depreciation and amortization for the Metals segment remained unchanged at $0.3 million for the first quarter of fiscal 2001 from the first quarter of fiscal 2000. OPERATING INCOME. Operating income for the Metals segment remained unchanged at $0.9 million for the first quarter of fiscal 2001 from the first quarter of fiscal 2000. As a percentage of net sales, operating income for the Metals segment was 5.7% and 4.9% for the first quarter of fiscal 2001 and 2000, respectively. OVERALL RESULTS CORPORATE EXPENSES. Corporate expenses increased by $0.3 million, or 35.9%, to $1.1 million for the first quarter of fiscal 2001 from $0.8 million for the first quarter of fiscal 2000. INTEREST EXPENSE AND OTHER. Interest expense and other increased by $3.0 million, or 161.1%, to $4.8 million for the first quarter of fiscal 2001 from $1.9 million for the first quarter of fiscal 2000. This increase was primarily due to increased debt levels associated with the 2000 Acquisitions and the 2001 Acquisitions, the cash portions of which were financed by borrowings under the Company's Credit Facility. INCOME TAX EXPENSE. The effective tax rate was 37.0% for the first quarter of fiscal 2001 and 36.5% for the first quarter of fiscal 2000. NET INCOME. Net income increased to $8.3 million for the first quarter of fiscal 2001 from $8.2 million for the prior year period. The increase in net income in first quarter 2001 was primarily attributable to the 2000 Acquisitions and the 2001 Acquisitions, partially offset by the reduced earnings of the remaining Aviation segment operating units and the increased interest expense due to the increased debt levels associated with the 2000 Acquisitions and the 2001 Acquisitions. -11- Management's Discussion And Analysis of Financial Condition and Results of Operations (continued) LIQUIDITY AND CAPITAL RESOURCES The Company's working capital needs are generally funded through cash flows from operations and borrowings under its credit arrangements. The Company used approximately $3.5 million of cash flows for operating activities for the three months ended June 30, 2000. The Company used approximately $59.6 million in investing activities and raised $64.4 million in financing activities for the three months ended June 30, 2000. As of June 30, 2000, $76.7 million was available under the Credit Facility. On June 30, 2000, an aggregate amount of approximately $172.0 million was outstanding under the Credit Facility, $165.0 million of which was accruing interest at LIBOR plus applicable basis points totaling 7.89% per annum, and $7.0 million of which was accruing interest at the prime rate of 9.5% per annum. Amounts repaid under the Credit Facility may be reborrowed. Effective April 1, 2000, the Company acquired all of the outstanding stock of ACR Industries, Inc., Chem-Fab Corporation and Airborne Nacelle Services, Inc. In May 2000, the Company acquired certain assets from the Anadite California Restoration Trust. The combined cash portion of the purchase prices paid at closing for these acquisitions of approximately $54.2 million was funded by borrowings under the Company's Credit Facility. In connection with these acquisitions, the Company assumed $32.6 million of seller financing, which accrued interest at 7%, and $3.6 million of other debt. In July 2000, the Company retired $30.6 million of the assumed seller financing and approximately $3.2 million of the assumed other debt. These payments were funded by borrowings under the Credit Facility. Capital expenditures were approximately $5.3 million for the three months ended June 30, 2000 primarily for manufacturing machinery and equipment for the Aviation segment. The Company funded these expenditures through borrowings under its Credit Facility. The Company expects capital expenditures to be approximately $20.0 million for its fiscal year ending March 31, 2001. The expenditures are expected to be used mainly to expand capacity at several facilities. The Company believes that cash generated by operations and borrowings under the Credit Facility will be sufficient to meet anticipated cash requirements for its current operations. However, the Company has a stated policy to grow through acquisition and is continuously evaluating various acquisition opportunities. As a result, the Company currently is pursuing the potential purchase of a number of candidates. In the event that more than one of these transactions are successfully consummated, the availability under the Credit Facility might be fully utilized and additional funding sources may be needed. There can be no assurance that such funding sources will be available to the Company on terms favorable to the Company, if at all. -12- Management's Discussion And Analysis of Financial Condition and Results of Operations (continued) FORWARD LOOKING STATEMENTS This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 relating to the Company's future operations and prospects, including statements that are based on current projections and expectations about the markets in which the Company operates, and management's beliefs concerning future performance and capital requirements based upon current available information. Such statements are based on management's beliefs as well as assumptions made by and information currently available to management. When used in this document, words like "may", "might", "will", "expect", "anticipate", "believe", "potential", and similar expressions are intended to identify forward looking statements. Actual results could differ materially from management's current expectations and there can be no assurance that these expectations will be realized. Among other factors that could cause actual results to differ materially from expectations are competitive factors relating to the aviation and metals industries, dependence of certain of the Company's businesses on certain key customers, need for additional financing for acquisitions and capital expenditures on terms acceptable to the Company, cancellations, reductions or delays in customer orders, product liabilities in excess of the Company's insurance and general economic conditions affecting the Company's two business segments. For a more detailed discussion of these and other factors affecting the Company, see risk factors described in the Company's Annual Report on Form 10-K, for the year ended March 31, 2000, filed with the SEC in June 2000. Item 3. Quantitative and Qualitative Disclosures About Market Risk For information regarding the Company's exposure to certain market risks, see Item 7A. Quantitative and Qualitative Disclosures About Market Risk in the Company's Annual Report on Form 10-K for the year ended March 31, 2000. There has been no material change in this information. -13- TRIUMPH GROUP, INC. Part II. Other Information Item 1. Legal Proceedings Not applicable Item 2. Changes in Securities Not applicable Item 3. Defaults upon Senior Securities Not applicable Item 4. Submission of Matters to a Vote of Security Holders Not applicable Item 5. Other Information Not applicable Item 6. Exhibits and Reports on Form 8-K A. Exhibits (27) Financial Data Schedule B. Reports on Form 8-K The Company did not file any reports on Form 8-K during the three months ended June 30, 2000 -14- Signatures Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Triumph Group, Inc. ------------------------------------------------ (Registrant) /s/ Richard C. Ill ------------------------------------------------ Richard C. Ill, President & CEO /s/ John R. Bartholdson ------------------------------------------------ John R. Bartholdson, Senior Vice President & CFO (Principal Financial Officer) /s/ Kevin E. Kindig ------------------------------------------------ Kevin E. Kindig, Vice President & Controller (Principal Accounting Officer) Dated: August 14, 2000 -15- EX-27 2 ex-27.txt EX-27
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS OF TRIUMPH GROUP, INC. FOR THE THREE MONTHS ENDED JUNE 30, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS MAR-31-2001 APR-01-2000 JUN-30-2000 7,529 0 94,456 2,655 152,798 258,748 187,434 41,899 634,170 106,730 234,419 0 0 12 252,699 634,170 128,996 128,996 87,642 111,024 77 59 4,766 13,129 4,858 8,271 0 0 0 8,271 0.71 0.67
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