Triumph Group’s Q3 included new production, rate cut; debt totaled $1.4 billion

By Lisa Kerner

Charlotte, N.C., Jan. 29 – Triumph Group, Inc.’s third quarter was “indelibly marked” by two significant events that happened on Dec. 9, said president and chief executive officer Jeffry Frisby during the company’s earnings call on Thursday.

The first event was assuming production of the Gulfstream G650 and G280 wing programs, and the second was Boeing’s 747-8 rate cut announcement.

Frisby said he is pleased with the Gulfstream transition to date. However, following Boeing’s announcement, the company conducted a review of assumptions for the program through the end of the contract and recorded a one-time charge in the fiscal third quarter to account for forward losses.

Triumph plans to continue to take actions to reduce costs and enhance performance on the 747-8 program, said Frisby.

Cash and debt

Triumph ended its third quarter on Dec. 31 with net debt of $1.4 billion and cash of about $34 million.

The company’s debt includes a $573 million revolver and term loan, about $187 million of securitized debt, $375 million of senior notes due 2021, $300 million of senior notes due 2022 and other debt totaling $8 million, according to the earnings presentation.

Net debt-to-capitalization was 38.3%, and total debt to trailing 12-month adjusted EBITDA was 3.48 times at quarter-end.

The company generated about $366 million of cash flow from operations before pension contributions of $56 million during the nine months ended Dec. 31.

During the third quarter, Triumph executed a 336,271-share buyback for roughly $21.6 million. Triumph is able to repurchase about 3.5 million shares under the existing stock repurchase program.

Berwyn, Pa.-based Triumph Group designs, engineers, manufactures, repairs and overhauls aerostructures, aircraft components, accessories, subassemblies and systems.

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