BERWYN, PA — Triumph Group, Inc. (NYSE: TGI) provided an update on its assessment of the impacts of the coronavirus (COVID-19). While the safety and well-being of its employees and the community it serves remain top priorities for the company, the Company announced certain cost reduction initiatives to align capacity with expected demand and meet our commitments to all stakeholders.
To date, there has been no material impact on Triumph’s backlog or revenue as a result of COVID-19 and the Company currently anticipates no material impact to results for fiscal year 2020 which ends March 31, 2020.
Triumph’s diversified product and service offerings across defense, commercial, and international markets lessen the impact of disruptions on any one program or market segment.
As of this time, all of Triumph’s factories and key suppliers remain operational. While the Company is not aware of any employees who have been confirmed as infected with the COVID-19 virus, Triumph implemented safe work practices and visitor and work from home policies consistent with CDC guidance to reduce the risks of exposure to the virus while supporting our customers.
The Company has business continuity plans at all sites to sustain operations.
In anticipation of ongoing market headwinds, the Company is implementing cost reduction actions to maintain our financial health, align capacity with expected demand, and ensure our long-term competitiveness.
This will result in the reduction of overhead and indirect staff and temporary workers.
Furthermore, furloughs will be selectively implemented to reduce costs while delivering on customer commitments.
When combined with reductions in travel, corporate events, and other expenses, Triumph expects annual savings of approximately $75 million beginning in fiscal 2021.
Costs associated with these reduction actions will be accrued in fiscal 2020 as a restructuring charge. Additional cost reductions may be taken if required based on market conditions.
As a result of our program and operating company portfolio management and focus on operational execution over the last four years, Triumph has improved its liquidity with over $500 million in cash and availability.
In addition to the actions above, Triumph is supporting OEM and airline discussions with the U.S. Government regarding support to the aviation industry, our workforce, and our suppliers.
Taken together, these actions position the Company to navigate the current uncertainty in the global markets and continue to execute its Path to Value, while optimizing our use of cash during this challenging period.
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