BERWYN, Pa., May 27, 2020 /PRNewswire/ -- Triumph Group, Inc.
(NYSE: TGI) ("Triumph" or the "Company") today provided an update
on its strategic review of its Aerospace Structures subsidiary.
In April 2019, Triumph announced
it was undertaking a comprehensive review of its structures
business as it focuses on its core systems and product support
markets and capabilities. The Company has divested its 10
build-to-print machine shops, five fabrication shops, two metal
finishing facilities, and its two million square foot Nashville large structures plant.
Furthermore, the transition of the Bombardier Global 7500
wing program, G-650 wing box assembly operation, and Embraer E2
fuselage contract have all been completed to their new owners.
Earlier this year, Triumph completed its final B747 fuselage
panels in its Hawthorne California
factory which is planned to be closed later this calendar
year. The transition of its B767 structural assembly work out
of its Grand Prairie Texas plant
is nearing completion in anticipation of concluding all production
activities in early calendar year 2021. Over 1,000,000 annual
hours of structures work has been outsourced as part of the
Company's actions to improve its profitability and cash
flow.
In recent weeks, the Company also entered into the following
agreements which will further reduce debt and move the company
towards its future state as a leading provider of systems and
aftermarket services:
- Reached agreement in principle to sell its G650/G700 wing
business to Gulfstream which will conclude its obligations on the
program. Triumph also resolved open commercial issues and secured
price increases on work it retains. The transaction is expected to
close in early fiscal year 2021 and will help to reduce the
Company's debt and inventory levels.
- Secured purchase orders from Boeing Commercial Airplanes across
multiple programs to maintain economical production levels and
provide support to its lower-tier supply chain. Triumph and Boeing
also resolved open claims and deferred a majority of its advance
repayments out of fiscal year 2021.
- Reached agreement with Israel Aviation Industries to accelerate
transfer of the G280 wing program to IAI and Korean Aerospace
Industries by July 2020. Only two
completed wings remain to be delivered from Triumph's Tulsa Oklahoma plant after which it will be
closed. All design support and scheduled warranty obligations will
be transferred to IAI.
Taken together, the Company's comprehensive de-risking actions
will reduce the number of Aerospace Structures sites from 34 to 9,
reduce occupied space by 4.4 million square feet, and reduce
staffing levels by over 4,000 employees. Structures related
revenue declined by $600 million,
from $2,200 million in fiscal year
2019 to $1,600 million in fiscal year
2020, while improving Company EBITDAP margins by 3%. Its
Aerospace Structures subsidiary also improved from significant cash
use over the same period to generating positive cash from
operations.
As part of its strategic review, the Company is advancing the
sale of additional non-core Structures sites through investment
banker Lazard in the calendar year 2020 timeframe. These
transactions will be announced as they occur.
Aerospace Structures, while down-sizing, continues to win new
business to enhance its value. New awards for composite parts
including engine nacelle components were received over the last two
years from defense and commercial customers with life of contract
value of over $1 billion.
Daniel J. Crowley, President and
CEO of Triumph Group, stated, "Our Aerospace Structures team has
executed with discipline, stabilizing the business while delivering
on customer commitments, and exiting loss-making and non-strategic
programs. Their demonstrated ability to divest non-core
operations while developing next-generation composites and
thermoplastic process capabilities reflects Triumph's
value-creation drive. Despite recent market headwinds, we
have been able to reposition programs and factories with strategic
buyers who are committed to the structures market and want to
invest in these businesses for the benefit of all
stakeholders. We look forward to completing our review in
calendar year 2020."
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.
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 our financial results for
fiscal year 2020, and our ability to achieve cost savings and the
benefits of our operational efficiency initiatives. 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. The Company
undertakes no obligation to update any such forward-looking
statement.
Widespread health developments, including the recent global
coronavirus (COVID-19), and the responses thereto (such as
voluntary and in some cases, mandatory quarantines as well as shut
downs and other restrictions on travel and commercial, social and
other activities) could adversely and materially affect, among
other things, the economic and financial markets and labor
resources of the countries in which we operate, our manufacturing
and supply chain operations, commercial operations and sales force,
administrative personnel, third-party service providers, business
partners and customers and the demand for our products, which could
result in a material adverse effect on our business, financial
conditions and results of operations.
View original
content:http://www.prnewswire.com/news-releases/triumph-group-reports-progress-on-aerospace-structures-strategic-review-301066115.html
SOURCE Triumph Group