Triumph Group (TGI) Tops Q3 EPS by 15c, Revenues Miss; Offers FY21 Revenue Mid-Point Guidance Below Consensus

Triumph Group (NYSE: TGI) reported Q3 EPS of $0.09, $0.15 better than the analyst estimate of ($0.06). Revenue for the quarter came in at $426 million versus the consensus estimate of $447.97 million.

Third Quarter Fiscal 2021

• Net sales of $426.0 million
• Operating loss of $35.0 million with operating margin of (8%); adjusted operating income of $38.1 million with adjusted operating margin of 9%
• Net loss of $68.1 million, or ($1.30) per share; adjusted net income of $4.9 million, or $0.09 per diluted share
• Cash flow provided by operations of $43.9 million; free cash flow of $37.7 million

"Revenues in Systems & Support increased for the second consecutive quarter driven by higher military volumes and partial rate recovery on Airbus programs. Organic revenue decreased compared to the prior year period due primarily to expected declines in Aerospace Structures associated with planned reductions from our portfolio transformation and the ongoing COVID-19 pandemic," stated Daniel J. Crowley, Triumph's chairman, president and chief executive officer. "We continued executing our plan to exit legacy programs in Aerospace Structures with only the 747-8 remaining to close out later this calendar year. Revenue from our Systems business now exceeds Structures sales volume."

Mr. Crowley continued, "Our cash generation in the third quarter demonstrated strong working capital management, the benefits of robust cost reduction actions and lower expenses on 747-8 close-out. Profitability on an adjusted basis improved sequentially in the quarter, demonstrating measurable recovery towards pre-COVID levels across both business units. Triumph remains focused on protecting the health and safety of our people, conserving cash and partnering with our customers to ensure we are best positioned for recovery for the benefit of all our stakeholders."

GUIDANCE:

Triumph Group sees FY2021 revenue of $1.8-1.9 million, versus the consensus of $1.86 million.

Based on anticipated aircraft production rates and MRO demand, including the impacts of pending program exits and no extended shut-down of operations due to the pandemic, the Company continues to expect that net sales for fiscal year 2021 will be approximately $1.8 to $1.9 billion.

The Company expects cash flow to be break even to positive in the fourth quarter of the fiscal year. Therefore, the Company expects cash used in operations and free cash use for the full fiscal year to be on par or moderately lower than the first nine months.

The Company's outlook excludes the impact of the pending sale of our Composite businesses and any potential future divestitures.

For earnings history and earnings-related data on Triumph Group (TGI) click here.

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