Triumph Group, Inc. 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.”