Triumph Group Stock Plunges 10% As FY22 Outlook Lags Expectations, Q1 Revenue Decline

Triumph Group Stock Plunges 10% As FY22 Outlook Lags Expectations, Q1 Revenue Decline
  • Triumph Group Inc TGI reported a first-quarter sales decline of 19.9% year-over-year to $396.65 million, +11% Y/Y on an organic basis, which missed the consensus of $397.31 million.
  • Sales by segments: Systems & Support $258.41 million (+7.7% Y/Y) and Aerospace Structures $138.25 million (-43.4% Y/Y).
  • Adjusted EPS improved to $0.09 from $(0.15) in 1Q21, beating the consensus of $0.04.
  • The operating income increased to $20.83 million compared to the loss of $252.39 million a year ago, and the margin recovered to 5.3% from -51%. Adjusted operating margin expanded by 477 bps to 7.9%.
  • Triumph burned cash in operating activities of 149.51 million, compared to $197.53 million a year ago. Free cash flow used was $151.63 million.
  • Adjusted EBITDA increased to $41.02 million, compared to $17.61 million in 1Q21, and the margin expanded by 680 bps to 10.4%.
  • Triumph’s backlog at Q1 was at $1.9 billion.
  • The company, during the quarter, retired several non-recurring cash uses and is on track to complete the 747 productions later this month. They strengthened their balance sheet by reducing debt and have no substantive repayments until 2024.
  • FY21 Outlook: Triumph expects net sales of $1.5 billion - $1.6 billion vs. consensus estimate of $1.61 billion, GAAP EPS of ($0.15) - $0.05, and Adjusted EPS of $0.41-$0.61 vs. consensus of $0.61.
  • It expects cash flow used in operations of $110 million - $125 million and free cash use of $135 million - $150 million.
  • Price action: TGI shares plunge 10.6% at $17.62 on the last check Wednesday.

Posted In: BriefsEarningsNewsGuidanceShort IdeasSmall CapMoversTrading Ideas