Triumph Group Provides Update On Steps To Mitigate COVID-19 Impact
Mar 24, 2020, 09:25 ET
BERWYN, Pa., March 24, 2020 /PRNewswire/ -- Triumph Group, Inc. (NYSE: TGI) ("Triumph" or the "Company") today provided an update on the current impact of the coronavirus (COVID-19) on the business and the steps the Company is taking to mitigate it.
- The Company is expanding its actions to limit the spread of COVID-19 consistent with U.S. and international government safeguards.
- Although the situation remains fluid, all factories remain operational. Triumph is complying with all mandates for closure of non-essential operations. Triumph will adjust its plans as government decisions and Company policies evolve.
- Given Boeing's plans to close their Washington state factories for 14 days, Triumph will evaluate the need to furlough employees at a subset of Triumph plants where capacity is largely dedicated to Boeing Commercial Aircraft programs.
Regarding the Company's plans to respond to the COVID-19 crisis, and to conserve cash and maintain long-term competitiveness, the following actions are underway:
- Approximately 250 full-time salaried employee and 250 contractor positions will be eliminated. Severance will be paid to impacted employees consistent with existing policies. These reductions are expected to be completed by May 1, 2020.
- The Company will implement furloughs for certain salaried employees of two weeks over fiscal 2021 to minimize reductions in force. Additional furloughs may be required based on site closures or reductions in customer demand for Triumph's products and services. Base salaries and wages for hourly and most salaried employees will be maintained. Medical benefits will continue during furloughs.
- Triumph will suspend merit pay increases for all team members until the crisis has passed while forgoing management increases for one year.
- Senior executives, including the CEO and direct reports, will forgo 10 percent of their base salaries starting April 1, 2020 during the crisis.
- Triumph's Board of Directors has elected to reduce their cash compensation during the crisis by 25 percent. The Board will continue to adjust executive and Director compensation as the situation warrants.
Triumph disclosed on March 20, 2020 via Form 8-K filed with the SEC that it would suspend payment of a dividend for the foreseeable future to conserve cash for operational use. As a result of Triumph's decision to draw down its revolving credit facility as disclosed on March 19, 2020, the Company has cash of approximately $400 million and over $100 million of availability to support its working capital requirements.
Daniel J. Crowley, President and CEO of Triumph Group, communicated to Triumph's employees last week that "The safety and economic well-being of our employees and the communities we serve remain top priorities for the Company. Given the dramatic and sudden impact of the virus on the world and on the aviation industry we support, we must take immediate and painful actions to protect our people and preserve our Company so that we can survive and be well positioned for the recovery. I want to thank the 10,000 men and women of Triumph Group for their efforts to limit the spread of the virus and to keep our plants running so that our customers' critical missions are sustained for the benefit of all."
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.
SOURCE Triumph Group
