BERWYN, Pa.--(EON: Enhanced Online News)--Triumph Group, Inc. (NYSE: TGI) today announced that it expects to record pre-tax additional program costs during fiscal year 2014 totaling approximately $68.0 million, or $0.83 per diluted share, primarily associated with the 747-8 program. Of the total incremental costs, approximately $44.0 million, or $0.53 per diluted share, will be included in the company’s second quarter fiscal year 2014 financial results. The company expects that approximately $11.0 million, or $0.14 per diluted share, will be reflected in third quarter fiscal year 2014 and the remaining $13.0 million, or $0.16 per diluted share, will be included in the fourth quarter fiscal year 2014 financial results. The number of shares used in computing diluted earnings per share was approximately 53.0 million shares.
These amounts have resulted from reductions to the profitability estimates of the company’s current 747-8 production lot, which will be approximately 80% completed by the end of the company’s second quarter fiscal year 2014 and is expected to be nearly 100% completed by the end of the third quarter fiscal year 2014. As a result of the current cost levels, the expected profitability on the next production lot, which will begin delivery in the fourth quarter of fiscal year 2014, was also decreased. Both current and future production lots are expected to be profitable and not result in loss reserves.
Jeffry D. Frisby, Triumph’s President and Chief Executive Officer, said, “We are disappointed in our recent execution on the 747 program. In addition to a new leadership team, we have already taken several actions, including the development of a detailed game plan to reduce cost and improve quality and on-time delivery in a sustainable way. As we move forward, we are confident that we will be able to return the 747-8 program to our expected level of execution and profitability and we remain confident that our business model will provide for sustainable long-term growth for Triumph Group as a whole.”
The company will update its fiscal year 2014 guidance when it reports its second quarter fiscal year 2014 results.
Triumph’s President and Chief Executive Officer, Jeffry D. Frisby, and Executive Vice President and Chief Financial Officer, David Kornblatt, will participate in a conference call presentation to security analysts to review this announcement today at 11:00 am ET. To participate in the call, please dial (866) 206-7202 (Domestic) or (703) 639-1112 (International). A slide presentation will be included with the audio portion of the webcast. An audio replay will be available from September 18th until September 25th by calling (888) 266-2081 (Domestic) or (703) 925-2533 (International), passcode #1623549.
Triumph Group, Inc. headquartered in Berwyn, Pennsylvania, designs, engineers, manufactures, repairs and overhauls a broad portfolio of aerostructures, aircraft components, accessories, subassemblies and systems. The company serves a broad, worldwide spectrum of the aviation industry, including original equipment manufacturers of commercial, regional, business and military aircraft and aircraft components, as well as commercial and regional airlines and air cargo carriers.
More information about Triumph can be found on the company’s website at http://www.triumphgroup.com.
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 financial and operational performance, cost reductions and profitability and earnings results for fiscal 2014. 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’s reports filed with the SEC, including our Annual Report on Form 10-K for the fiscal year ended March 31, 2013.