Triumph Group Reports Fourth Quarter Fiscal 2020 Results

5/28/20

Triumph Group, Inc. (NYSE: TGI) today reported financial results for its fourth quarter and full fiscal year 2020, which ended March 31, 2020.

Fourth Quarter Fiscal 2020

  • Net sales of $693.1 million
  • Operating loss of $40.3 million with operating margin of (5.8%); adjusted operating income of $39.4 million with adjusted operating margin of 5.7%
  • Net loss of $75.1 million, or ($1.45) per share; adjusted net income of $36.0 million, or $0.69 per diluted share
  • Cash flow provided by operations of $57.4 million, and free cash flow of $44.8 million

Full-Year Fiscal 2020

  • Net sales of $2.9 billion
  • Operating income of $57.9 million with an operating margin of 2.0%; adjusted operating income of $204.1 million with adjusted operating margin of 7.0%
  • Loss per share of $0.56; adjusted earnings per diluted share of $2.71
  • Cash provided by operations of $96.7 million, and free cash flow of $56.8 million

"The fourth quarter of fiscal 2020 completed a strong year for Triumph Group, and we delivered on our commitment to generate positive free cash flow," stated Daniel J. Crowley, Triumph's president and chief executive officer. "Military deliveries helped offset the impacts of the 737 MAX production slow down and effects of the COVID-19 crisis during the quarter. Organic revenue decreased by 6% due to expected declines in Aerospace Structures, and to a lesser extent Systems & Support. Systems & Support margins, excluding impairments and restructuring, were in line with the prior year, benefitting from improved operational efficiencies and cost reduction initiatives. Importantly, we made strong progress executing our plan to exit legacy programs in Aerospace Structures, a key initiative that will benefit Triumph in fiscal 2021 and beyond."

Mr. Crowley continued, "Triumph improved profitability and cash flow year-over-year and entered the commercial downturn with momentum as a more predictable business as a result of the actions we've taken to de-risk our portfolio and backlog and stabilize our cash flows. Beyond these proactive steps, we recently amended our credit facility and implemented cost containment actions by managing our workforce and supply chain to enhance our liquidity position and ensure financial flexibility in the current operating environment while supporting the demands of customers."

Mr. Crowley concluded, "Triumph is focused on protecting the health and safety of our people, conserving our cash and partnering with our customers to ensure we are well-positioned for recovery for the benefit of all our stakeholders."

Fourth Quarter Fiscal Year 2020 Overview

After accounting for the impact of the divestitures, sales for the fourth quarter of fiscal 2020 were down 6% organically from the comparable prior year period. The decline was driven by impacts of the production slow down on 737 MAX and effects of COVID-19.

Fourth quarter operating loss of $40.3 million included a $66.1 million goodwill impairment charge of the legacy Product Support reporting unit due to the effects of the COVID-19 crisis on the overall aviation market; $1.7 million for loss on sale of assets and businesses, and $11.9 million of restructuring costs associated with lease terminations and reductions in force. Net loss for the fourth quarter of fiscal year 2020 was $75.1 million, or ($1.45) per share. On an adjusted basis, net income was $36.0 million, or $0.69 per diluted share.

The number of shares used in computing diluted earnings per share for the fourth quarter of 2020 was 52.0 million.

Backlog, which represents the next 24 months of actual purchase orders with firm delivery dates or contract requirements, was $3.2 billion, down compared to the prior year period and on a sequential basis due to sunsetting programs and recent production rate reductions, but partially offset by military program increases in Systems & Support.

For the fiscal year ended March 31, 2020, cash flow provided by operations was $96.7 million, reflecting continued investment in sunsetting programs and liquidation of approximately $60.0 million in prior period advances against current period deliveries.

Outlook

The Company is not providing financial guidance for its fiscal year ending March 31, 2021 at this time due to the uncertainty around the ultimate impact of COVID-19 on the global market and economic conditions.

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.