Triumph Group (NYSE: TGI) reported Q2 EPS of ($0.08), $0.21 better than the analyst estimate of ($0.29). Revenue for the quarter came in at $481.8 million versus the consensus estimate of $470.24 million.

Second Quarter Fiscal 2021

• Net sales of $481.8 million
• Operating income of $7.4 million with operating margin of 2%; adjusted operating income of $21.4 million with adjusted operating margin of 4%
• Net loss of $33.5 million, or ($0.64) per share; adjusted net loss of $4.3 million, or ($0.08) per share
• Cash flow used in operations of ($42.2) million, and free cash use of ($47.3) million

Full-Year Fiscal 2021 Net Sales Guidance

• Net sales between $1.8 - $1.9 billion

"For the second quarter of our fiscal year, Systems & Support revenues increased as compared to the first quarter driven by increased 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 president and chief executive officer. "We continued executing our plan to exit legacy programs in Aerospace Structures with the completion of the sale of our G650 wing kitting and engineering services program to Gulfstream. Furthermore, the sale of our two Composite Structures factories remains on track for later this year."

Mr. Crowley continued, "Our cash usage for the second quarter improved over our first quarter in line with our expectations as a result of tight working capital management and the benefits of earlier cash-conserving actions. We expect to continue to use cash in the third quarter and be cash positive in the fourth quarter. We have the financial flexibility to support the needs of our customers through this challenging environment. 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 billion, versus the consensus of $1.85 billion.

Based on anticipated aircraft production rates and MRO demand, including the impacts of pending program exits and no additional 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 anticipates that the trends in cash used in operations that were experienced in the first half of fiscal 2021 to continue, but to a lesser degree in the third quarter, and expects cash flow to be 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 moderately higher than the first half.

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

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