Triumph Group (TGI) Tops Q4 EPS by 4c, Beats on Revenues; Offers FY19 Guidance

Triumph Group (NYSE: TGI) reported Q4 EPS of $1.01, $0.04 better than the analyst estimate of $0.97. Revenue for the quarter came in at $896.9 million versus the consensus estimate of $828.25 million.

Full Fiscal and Fourth Quarter 2018 Highlights

• For the full fiscal year 2018, sales were $3.2 billion, loss per share was ($8.48), or earnings per diluted share of $2.53 on an adjusted basis, cash used in operations was ($288.9) million and free cash use was ($330.9) million.
• Net sales were $896.9 million for fourth quarter fiscal year 2018.
• Operating loss for fourth quarter fiscal year 2018 was ($280.0) million, reflecting an operating margin of (31.2%), and included a previously disclosed $345.0 million non-cash charge for the impairment of goodwill in Aerospace Structures. On an adjusted basis, operating income was $71.1 million with an adjusted operating margin of 7.9%.
• Net loss for the fourth quarter fiscal year 2018 was ($298.8) million, or ($6.04) per share, and included a $6.91 per share charge related to the aforementioned impairment charge. On an adjusted basis, net income was $50.1 million, or $1.01 per diluted share.
• Cash used in operations for fourth quarter fiscal year 2018 was ($90.6) million, and free cash use was ($100.7) million.
• Management provides guidance for fiscal 2019 for net sales of $3.3 to $3.4 billion and earnings per diluted share of $0.00 to $0.50, or $1.50 to $2.10 on an adjusted basis.

“Triumph Group’s fourth quarter results reflect strategic and operational accomplishments as we continue on our path to predictable profitability. We ended the year within our guidance on all measures while net sales increased on a sequential basis, with all three of our segments delivering top line growth.” stated Daniel J. Crowley, Triumph’s president and chief executive officer. “Product Support generated year-over-year margin improvement while Integrated Systems produced both year-over-year and sequential improvement in margin.”

Mr. Crowley continued, “During the quarter, we continued to strengthen our relationships with our customers as we work towards mutually beneficial arrangements as well as program optimization. Our business development results continue to accelerate with new awards yielding a book-to-bill ratio of greater than one for the fifth consecutive quarter and increasing our backlog to $4.49 billion, up 3% sequentially and 13% year-over-year. As part of the ongoing optimization of our portfolio, we completed the divestiture of another non-core business during the fiscal fourth quarter, which we expect to contribute incrementally to our cash flow in fiscal 2019.”

Mr. Crowley concluded, “We are well positioned in FY19 to return to top-line growth as development programs enter production and we expect our cost reduction progress to lead to more consistent profitability. As demonstrated between fiscal 2017 and fiscal 2018, we expect cash flow to improve year over year in fiscal 2019. We are refining our outlook for fiscal 2019 cash guidance to account for potential contract settlements under discussion now, divestitures and working capital needs. We will provide our cash flow outlook, in addition to updates on our progress towards our other guidance targets, in future quarters.”

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

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