Triumph Group, Inc. (NYSE:TGI) Q1 2021 Earnings Conference Call - Final Transcript
Aug 04, 2020 • 05:30 pm ET
Ladies and gentlemen, thank you for standing by. Welcome to the Triumph Group conference call to discuss our first quarter fiscal year 2021 results.
On behalf of the company, I would like to read the following statement. Certain statements on this call constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause Triumph's actual results, performance or achievements to be materially different from any expected future results, performance or achievements expressed or implied in the forward-looking statements.
Please note that the company's reconciliation of non-GAAP financial measures to comparable GAAP measures is included in the press release, which can be found on their website at www.triumphgroup.com. In addition, please note this call is property of Triumph Group, Inc. and may not be recorded, transcribed or rebroadcast without explicit written approval.
At this time, I would like to introduce Daniel J. Crowley, the company's President and Chief Executive Officer, James F. McCabe, Jr., Senior Vice President and Chief Financial Officer of Triumph Group, Inc., and William C. Kircher, Executive Vice President, Triumph System and Support. Go ahead, Mr. Crowley.
Daniel J. Crowley
Okay. Thank you, Kevin, and welcome, everyone, to our Q1 earnings call.
To all those joining us this afternoon, I hope that everyone is staying healthy and safe. While we're seeing global economies begin to reopen and commercial aviation is starting to recover, especially in Asia and Europe, our commitment to operating safely amid the ongoing pandemic remains our top priority.
Earlier today, we reported our first quarter results for fiscal year 2021. No doubt, the pandemic has been hugely impactful for our industry and for our company in Q1, which we view as a trough quarter operationally and financially. But we are seeing stability in OEM rates and in MRO demand month-over-month, which provides more confidence going forward. After a strong end to fiscal year 2020, Q1 results were down substantially as expected and reflected the heavy cash use associated with COVID-19 impacts, sunsetting programs and seasonality, partially offset by favorable trends in cargo and military demand.
Our first quarter results are summarized as takeaways on Slide 3. We are taking the actions required to keep our people and company safe. Second, our Q1 results, while down from prior year, are either in line with or above our expectations. Third, the diversity of our platforms and products reduces our exposure to any one program or customer and provides stability. Fourth, our restructuring put us years ahead on the curve on the pandemic, and we continue to rightsize Triumph to reflect commercial market realities and to maintain gross margins. Fifth, the recently announced Structures divestitures provide evidence of our commitment to refocus on our core. We remain on track to finish these asset sales in fiscal year '21. And last, we have more clarity on near-term OEM and MRO demands as markets stabilize, and we see lift from military and cargo