Triumph Group Sees FY17 Results Below View; Plans To Cut Jobs

(RTTNews) - Triumph Group Inc. (TGI) said that it expects revenue for fiscal year 2017 to be about $3.6 billion to $3.7 billion. Earnings per share for fiscal year 2017 is projected to be between $4.90 to $5.10 and includes approximately $0.68 per share of projected restructuring charges, approximately $0.15 per share of financing activity charges and approximately $0.12 per share of trade name amortization. Analysts polled by Thomson Reuters expect the company to report earnings of $5.44 per share and revenues of $3.81 billion for fiscal year 2017. Analysts' estimates typically exclude special items.

The company expects to generate sufficient free cash flow to fund restructuring efforts during fiscal year 2017.

Commenting on the outlook, Daniel Crowley, Triumph's President and Chief Executive Officer said, "In fiscal year 2017, we are primarily focused on driving free cash flow and operating margins, funding and implementing our strategic plan and prudently managing the balance sheet to ensure that Triumph is well positioned to drive significant value in the future."

As part of its transformation strategy, Triumph has taken the initial actions necessary to enable the company to operate as One Triumph Team and leverage its scale in support of delivering predictable profitability.

Triumph plans to reduce its overall footprint by approximately 3.5 million square feet, or 24% percent of total square footage. Although the consolidations benefit all business segments, the majority will occur in the Aerostructures segment. The facility consolidations are expected to result in workforce reductions of approximately eight percent over the next year.

The company noted that individual consolidations will be announced and implemented on a time-phased basis and, once completed, will generate approximately $55.0 million in annualized pre-tax cost savings.

In connection with the facility consolidation efforts and other fourth quarter activities, Triumph incurred approximately $75.6 million in pre-tax restructuring charges during the fourth quarter fiscal year 2016 of which approximately $21.2 million was non-cash. The company expects to incur an additional $77.3 million of restructuring charges in fiscal year 2017 and fiscal year 2018, of which $15.6 million are estimated to be non-cash.