Triumph Group has 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 of two weeks for certain salaried employees 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%. 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 US$400 million and over US$100 million of availability to support its working capital requirements.
