Triumph Group Reports First Quarter Fiscal 2020 Results

BERWYN, Pa., July 31, 2019 /PRNewswire/ -- Triumph Group, Inc. (NYSE: TGI) ("Triumph" or the "Company") today reported financial results for its first quarter of fiscal year 2020, which ended June 30, 2019.

First Quarter Fiscal 2020

• Net sales of $730.2 million
• Operating income of $35.5 million with operating margin of 5%; adjusted operating income of $41.6 million with adjusted operating margin of 6%
• Net income of $18.1 million, or $0.36 per share; adjusted net income of $22.9 million, or $0.46 per diluted share
• Cash flow from operations of $5.0 million, and free cash flow use was ($3.1) million

Outlook for Fiscal 2020

• Net sales guidance of between $2.8 to $2.9 billion
• GAAP and adjusted earnings per diluted share of between $2.35 to $2.95
• Free cash flow of between $0 to $50.0 million

"Triumph Group had a strong start to our fiscal 2020," stated Daniel J. Crowley, Triumph's president and chief executive officer. "During our fiscal first quarter, all three of our business segments delivered year-over-year organic growth in net sales, with our Product Support segment posting organic sales growth for the sixth consecutive quarter.  Additionally, Product Support and Aerospace Structures generated strong year-over-year organic improvement in operating margin.  We see significant opportunity for margin expansion in Integrated Systems over the balance of the year."

Mr. Crowley continued, "Our first quarter cash usage represents a significant improvement over the prior year and establishes a solid start to the year.  We expect to be cash flow positive in the second half of the year as the benefits of our Path to Value actions come to fruition.  The Boeing 737 MAX delays are currently forecasted to impact Triumph revenue by less than 2% in the year with offsetting actions in progress.  Given our solid first quarter results coupled with the enhanced level of visibility and stability we've instilled across our operations, we remain confident with our full-year commitments and guidance." 

Mr. Crowley concluded, "Triumph is a healthier and better performing company than it was a year ago.  While we still have work to accomplish, we're confident that we are well positioned to deliver predictable results and increased shareholder value."

First Quarter Fiscal Year 2020 Overview

After accounting for divestitures, sales for the first quarter of fiscal 2020 were up 5.8% organically from the comparable prior year period.  Growth was driven by increased volumes on engine and military rotorcraft components, aftermarket accessory services, and continuing structures programs and new engineering services.

First quarter operating income of $35.5 million included a $3.1 million adjustment for loss on previous divestitures and $3.0 million of restructuring costs.  Net income for the first quarter of fiscal year 2020 was $18.1 million, or $0.36 per share.  On an adjusted basis, net income was $22.9 million, or $0.46 per diluted share.  Triumph's results included the following: 

The number of shares used in computing diluted earnings per share for the first quarter of 2020 was 50.3 million.

Backlog was $3.7 billion and increased 1% organically compared to the prior year period and is flat on a sequential basis.  This reflects growth in Integrated Systems partially offset by sunsetting legacy Aerospace Structures programs. 

For the three-months ended June 30, 2019, cash flow from operations was $5.0 million, reflecting continued investment in ramping programs and liquidation of approximately $20.0 million in prior period advances against current period deliveries.     

Outlook

Based on anticipated aircraft production rates and including the impacts of pending program transfers, the Company continues to expect that net sales for fiscal year 2020 will be approximately $2.8 to $2.9 billion.

The Company expects fiscal year 2020 earnings per share to be $2.35 to $2.95, per diluted share.      

The Company expects fiscal year 2020 cash provided from operations of $50.0 to $110.0 million, and free cash flow of $0 to $50.0 million.

The Company's current outlook reflects adjustments detailed in the attached tables but excludes the impact of any potential future divestitures. 

Conference Call

Triumph Group will hold a conference call today, July 31^st at 8:30 a.m. (ET) to discuss the first quarter fiscal year 2020 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, which presentation has been posted on the Company's website at http://ir.triumphgroup.com/QuarterlyResults. An audio replay will be available from July 31^st to August 8th by calling (855) 859-2056 (Domestic) or (404) 537-3406 (International), passcode #4958108.

About Triumph Group

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.

Forward Looking Statements

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 or use, cost savings and operational 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, 2019.

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