Financial Performance - FY22 revenue was $1460 million, compared to $1870 million in FY21[26] - FY22 operating income was $104 million, compared to an operating loss of $326 million in FY21[26] - FY22 adjusted operating income was $135 million, compared to $108 million in FY21[26] - Q4 FY22 net sales were $387 million, compared to $467 million in Q4 FY21[19] - Q4 FY22 operating income was $39 million, compared to an operating loss of $46 million in Q4 FY21[20] - Q4 FY22 adjusted operating income was $43 million, compared to $33 million in Q4 FY21[22] - The company generated $29 million in free cash flow in Q4 FY22[9] - The company's net debt was $1364 million in Q4 FY22[46] Business Segment Performance - Systems & Support Q4 FY'22 revenue was $287 million[32] - Aerospace Structures Q4 FY'22 revenue was $100 million[40] Market and Growth - The company's FY22 book-to-bill ratio was 1:16, with $2200 million in new business wins[51] - Commercial OEM accounted for 45% of FY22 sales, Military OEM 21%, MRO 31%, and Non-Aviation 3%[6] - Systems & Support accounted for 85% of adjusted operating income in FY22, and Aerospace Structures 15%[8]

| --- | --- | --- | --- | --- | --- | --- | --- | --- | |--------------------------|-------|-------|---------------------------------------------------|-----------------------------------------------------|-------|-------|-------|-------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Third Quarter FY'22 | | | | | | | | | | | | | | | | ...

Financial Data and Key Metrics Changes - Triumph reported revenue of $319 million, reflecting increased revenue from narrow-body and Biz Jet platforms, offset by 787 rate reductions and military OEM delivery timing [26] - Adjusted operating income was $33 million, representing a 10% operating margin, an increase from 9% a year ago [27] - Free cash flow generated was $7 million, driven by improved operations and reduced working capital [10][31] Business Line Data and Key Metrics Changes - Systems & Support revenue accounted for 74% of total revenue, up from 62% a year ago, with operating income of $41 million and EBITDA of $47 million, marking a 20% margin [26][29] - Structures revenue was $83 million, up 3% organically, with 737 production rate increases contributing to growth [30] Market Data and Key Metrics Changes - Commercial aircraft deliveries are projected to exceed 1,400 in 2022, a 47% increase from 2021 [11] - The freighter market saw wide-body fleets up 36% and narrow-body up 50% since the pandemic began, with utilization up 25% [12] Company Strategy and Development Direction - Triumph is focused on becoming a leading systems and aftermarket company, with a goal to increase sales from new products, platforms, and customers by 25% over the next three years [15] - The company is transitioning away from build-to-print structures, with a focus on IP-based products and aftermarket services [36][39] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery trajectory in aviation, despite short-term order deferrals [10][14] - The company anticipates a ramp-up in 787 shipments and pricing resets to aid top-line and margin expansion [14] Other Important Information - Triumph secured over $2 billion in new orders year-to-date, marking a record since 2016 [15] - The company is addressing supply chain constraints through partnerships with customers to ensure continuity and affordability [10][20] Q&A Session Summary Question: Can you talk about the Structures business now that Stuart is on its way to being finalized? - Management indicated that the Structures business is breakeven and will benefit from tailwinds of 737 and 787 programs, with a focus on the Interiors business moving forward [43] Question: How do you think about the sustainability of Systems margins? - Management aims to increase Systems margins into the 20s by enhancing MRO and spares contributions and renegotiating lower-margin contracts [47][48] Question: What will the contribution of the Stuart divestiture be? - Details of the Stuart transaction will be disclosed upon closure, but management indicated that the size of Structures will be smaller moving forward [45][51] Question: Can you provide insight into the IP and proprietary content? - Management noted that approximately 60% of the Systems & Support business is IP-driven, with plans to expand this further [60][62]

United States Securities and Exchange Commission Washington, D.C. 20549 FORM 10-Q ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarterly Period Ended December 31, 2021 or ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Transition Period From _________ to ________ Commission File Number: 1-12235 Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required ...

Financial Performance - Net sales decreased from $482 million to $357 million in Q2 FY'22 [15] - Operating income increased from $7 million to $16 million in Q2 FY'22 [16] - Adjusted operating income increased from $21 million to $28 million in Q2 FY'22 [18] - Adjusted operating margin improved from 4% to 8% year-over-year [19] - Systems & Support revenue decreased from $254 million to $249 million [22, 23] - Aerospace Structures revenue decreased from $229 million to $109 million [27] MRO Services - MRO Services increased 20% year-over-year in Systems & Support [23, 5] Backlog and New Business - The company has a backlog of $194 billion as of September 30, 2021 [5] - New business wins totaled $125 billion for the quarter [9] Guidance - The company expects revenue between $15 billion and $16 billion for FY'22 [56] - The company expects free cash flow to be between $(135) million and $(150) million for FY'22 [56]

Financial Data and Key Metrics Changes - Triumph Group reported a 20% increase in MRO services, indicating strong recovery in the commercial market [10] - Adjusted operating income for Q2 was $28 million, with an adjusted operating margin of 8%, up 339 basis points from the prior year [37] - Net debt was approximately $1.4 billion, with a net debt-to-EBITDAP leverage ratio improving by 10% year-to-date [45] Business Line Data and Key Metrics Changes - The Systems & Support segment saw a 20% increase in third-party MRO sales, benefiting from improving commercial narrow-body build rates [38] - Aerospace Structures segment net sales decreased by 2%, primarily due to the production pause on the 787, but the adjusted operating margin improved to 7% from 4% in the prior year [41] - The company recorded 67 new wins valued at $1.25 billion, including significant contracts with Boeing [25] Market Data and Key Metrics Changes - Global capacity in commercial aviation is now running just 30% off 2019 levels, with 86% of single-aisle and 64% of twin-aisle aircraft in active service [16] - Cargo demand has exceeded 2019 levels in all regions except South America, with Triumph's cargo-related revenue up 41% year-over-year [18] - The defense budget for FY 2022 is expected to be around $778 billion, an increase of approximately $37 billion from FY 2021 [19] Company Strategy and Development Direction - Triumph is focusing on organic growth and improving its core business while managing supply chain pressures [11] - The company is transitioning from restructuring to growth, with plans to double profitability over its planning horizon [32][120] - A new joint venture with Air France/KLM aims to service new fleets, enhancing Triumph's market position [28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that the worst of the pandemic is behind, with expectations for a strong second half of the year driven by MRO services and higher OEM production rates [52] - The company is proactively managing supply chain pressures and is optimistic about the recovery in international travel [17][29] - Management noted that labor constraints are being addressed through new engagement programs and investments in capital equipment [100] Other Important Information - Triumph's cash flow outlook is improving, with expectations for breakeven free cash flow in Q3 and solidly positive cash flow in Q4 [48] - The company is implementing contractual protections against material cost increases as it renews contracts [30] Q&A Session Summary Question: Clarification on EPS guidance and risk retirements - Management indicated that risk retirements from long-running programs are contributing to improved EPS guidance, with a focus on higher-margin demand [57][59] Question: Update on the Stuart facility divestiture - Management confirmed ongoing discussions with strategic parties regarding the Stuart facility, emphasizing the transformation of the company towards a more profitable core business [63] Question: Free cash flow outlook for the second half - Management highlighted that higher sales in the second half, improved working capital initiatives, and reduced restructuring costs are expected to drive positive free cash flow [68][70] Question: Profitability in the structures business - Management stated that the core structures business is currently breakeven, with expectations for profitability to improve as demand increases [82][85] Question: Supply chain challenges - Management noted ongoing challenges with raw materials and labor, but emphasized proactive measures to mitigate these issues [86][100]

[Part I. Financial Information](index=3&type=section&id=Part%20I.%20Financial%20Information) This section presents the unaudited condensed consolidated financial statements and management's discussion and analysis for Triumph Group, Inc [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements for Triumph Group, Inc., including balance sheets, statements of operations, comprehensive loss, stockholders' deficit, and cash flows, along with detailed notes explaining significant accounting policies, divestitures, revenue recognition, debt, and segment information for the periods ended September 30, 2021 and 2020 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's financial position, detailing assets, liabilities, and stockholders' deficit at specific reporting dates | Metric | September 30, 2021 (in thousands) | March 31, 2021 (in thousands) | | :--------------------------------- | :-------------------------------- | :------------------------------ | | Cash and cash equivalents | $194,122 | $589,882 | | Total current assets | $968,380 | $1,554,434 | | Total assets | $1,800,717 | $2,450,935 | | Total current liabilities | $549,010 | $718,367 | | Long-term debt, less current portion | $1,606,052 | $1,952,296 | | Total stockholders' deficit | $(828,869) | $(818,853) | - Cash and cash equivalents decreased significantly from **$589.9 million** at March 31, 2021, to **$194.1 million** at September 30, 2021[8](index=8&type=chunk) - Total assets decreased from **$2.45 billion** to **$1.80 billion**, while total stockholders' deficit increased from **$(818.9) million** to **$(828.9) million**[8](index=8&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section presents the company's revenues, expenses, and net loss over specific reporting periods, highlighting operational performance | Metric (in thousands) | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Six Months Ended Sep 30, 2021 | Six Months Ended Sep 30, 2020 | | :-------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Net sales | $357,396 | $481,815 | $754,042 | $976,892 | | Operating income (loss) | $16,451 | $7,422 | $37,283 | $(244,970) | | Net loss | $(9,070) | $(33,489) | $(39,421) | $(309,275) | | Loss per share—basic | $(0.14) | $(0.64) | $(0.61) | $(5.95) | - Net sales decreased significantly year-over-year for both the three-month and six-month periods, with a **25.8% decrease** for the quarter and a **22.8% decrease** for the six months[10](index=10&type=chunk) - Operating income improved substantially, turning from a loss of **$(244.97) million** in the six months ended September 30, 2020, to an income of **$37.28 million** in the same period of 2021[10](index=10&type=chunk) [Condensed Consolidated Statements of Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) This section details the total comprehensive loss, including net loss and other comprehensive income or loss components | Metric (in thousands) | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Six Months Ended Sep 30, 2021 | Six Months Ended Sep 30, 2020 | | :-------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Net loss | $(9,070) | $(33,489) | $(39,421) | $(309,275) | | Total other comprehensive income | $4,315 | $13,778 | $26,987 | $21,062 | | Total comprehensive loss | $(4,755) | $(19,711) | $(12,434) | $(288,213) | - Total comprehensive loss significantly decreased from **$(288.2) million** in the six months ended September 30, 2020, to **$(12.4) million** in the same period of 2021, driven by a reduction in net loss[13](index=13&type=chunk) [Condensed Consolidated Statements of Stockholders' Deficit](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Deficit) This section outlines changes in the stockholders' deficit, reflecting net losses, comprehensive income, and other equity adjustments | Metric (in thousands) | March 31, 2021 | September 30, 2021 | | :-------------------- | :------------- | :----------------- | | Total Stockholders' Deficit | $(818,853) | $(828,869) | | Accumulated Deficit | $(1,254,391) | $(1,293,812) | | Capital in Excess of Par Value | $978,272 | $968,090 | - The total stockholders' deficit increased from **$(818.9) million** at March 31, 2021, to **$(828.9) million** at September 30, 2021, primarily due to net losses[15](index=15&type=chunk) - Accumulated other comprehensive loss improved from **$(530.2) million** to **$(503.2) million**, partially offsetting the increase in accumulated deficit[15](index=15&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section details the cash inflows and outflows from operating, investing, and financing activities over specific periods | Metric (in thousands) | Six Months Ended Sep 30, 2021 | Six Months Ended Sep 30, 2020 | | :-------------------- | :---------------------------- | :---------------------------- | | Net cash used in operating activities | $(185,526) | $(239,723) | | Net cash provided by (used in) investing activities | $154,490 | $(11,283) | | Net cash (used in) provided by financing activities | $(364,120) | $203,220 | | Net change in cash and cash equivalents | $(395,760) | $(45,252) | | Cash and cash equivalents at end of period | $194,122 | $440,211 | - Net cash used in operating activities improved by **$54.2 million**, from **$(239.7) million** in 2020 to **$(185.5) million** in 2021[20](index=20&type=chunk) - Investing activities shifted from a net cash outflow of **$(11.3) million** in 2020 to a net cash inflow of **$154.5 million** in 2021, primarily due to proceeds from asset sales[20](index=20&type=chunk) - Financing activities saw a significant shift from a net cash inflow of **$203.2 million** in 2020 to a net cash outflow of **$(364.1) million** in 2021, largely due to debt redemptions[20](index=20&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and additional information supporting the condensed consolidated financial statements [1. Background and Basis of Presentation](index=12&type=section&id=1.%20BACKGROUND%20AND%20BASIS%20OF%20PRESENTATION) This note describes the company's business operations and the foundational principles used in preparing the financial statements - Triumph Group, Inc. designs, engineers, manufactures, and sells products for global aerospace OEMs and provides repair and overhaul services for commercial, air cargo, and military customers[23](index=23&type=chunk) - The Company operates through two reportable segments: Systems & Support and Aerospace Structures[23](index=23&type=chunk) [2. Summary of Significant Accounting Policies](index=12&type=section&id=2.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines the key accounting principles and methods applied in the preparation of the financial statements - Revenue is primarily from long-term contracts for design, development, manufacturing, and support services, recognized over time using the cost-to-cost input method[28](index=28&type=chunk)[36](index=36&type=chunk)[38](index=38&type=chunk) - Cumulative catch-up adjustments from changes in contract estimates increased net sales by **$3.07 million** and **$6.38 million** for the three and six months ended September 30, 2021, respectively, positively impacting net loss[40](index=40&type=chunk)[41](index=41&type=chunk) Trade Accounts Receivable Concentration | Customer | September 30, 2021 | March 31, 2021 | | :------- | :----------------- | :------------- | | Boeing | 15% | 23% | | Qarbon Aerospace Inc. | 12% | 0% | Sales to Boeing | Period | Sales to Boeing (in thousands) | % of Net Sales | | :----- | :----------------------------- | :------------- | | Six months ended Sep 30, 2021 | $273,426 | 36% | | Six months ended Sep 30, 2020 | $361,770 | 37% | [3. Divested Operations and Assets Held for Sale](index=19&type=section&id=3.%20DIVESTED%20OPERATIONS%20AND%20ASSETS%20HELD%20FOR%20SALE) This note details the company's divestiture activities and assets classified as held for sale, including their financial impact - In May 2021, the Company completed the sale of its composites manufacturing operations in Georgia and Thailand, and large structure manufacturing operations in Red Oak, Texas, for approximately **$155 million** net proceeds, recognizing an additional loss of **$6 million**[54](index=54&type=chunk)[55](index=55&type=chunk) - The Company is in the process of exiting its Spokane, Washington, composites manufacturing operations, with asset sales totaling approximately **$11 million**, of which **$6 million** has been received[56](index=56&type=chunk) - In August 2021, the Board committed to sell and license certain legacy product lines of its Staverton, UK operations, which closed in October 2021 for approximately **$34 million** net proceeds[57](index=57&type=chunk) [4. Revenue Recognition and Contracts with Customers](index=19&type=section&id=4.%20REVENUE%20RECOGNITION%20AND%20CONTRACTS%20WITH%20CUSTOMERS) This note provides a detailed breakdown of revenue recognition policies and contract balances with customers Disaggregated Net Sales by Satisfaction Method (in thousands) | Segment | Period | Satisfied over time | Satisfied at a point in time | Total Revenue | | :-------- | :----- | :------------------ | :--------------------------- | :------------ | | Systems & Support | 3M Sep 2021 | $114,683 | $132,582 | $248,758 | | Systems & Support | 3M Sep 2020 | $102,807 | $147,286 | $253,637 | | Aerospace Structures | 3M Sep 2021 | $97,633 | $11,005 | $108,638 | | Aerospace Structures | 3M Sep 2020 | $204,180 | $10,379 | $228,178 | | Total | 3M Sep 2021 | $212,316 | $143,587 | $357,396 | | Total | 3M Sep 2020 | $306,987 | $157,665 | $481,815 | Disaggregated Net Sales by End Market (in thousands) | Segment | Period | Commercial aerospace | Military | Business jets | Regional | Non-aviation | Total Revenue | | :-------- | :----- | :------------------- | :------- | :------------ | :------- | :----------- | :------------ | | Systems & Support | 3M Sep 2021 | $93,129 | $126,521 | $10,521 | $5,315 | $11,779 | $248,758 | | Systems & Support | 3M Sep 2020 | $95,393 | $131,120 | $8,708 | $7,112 | $7,760 | $253,637 | | Aerospace Structures | 3M Sep 2021 | $99,868 | $1,210 | $6,297 | $1,263 | $0 | $108,638 | | Aerospace Structures | 3M Sep 2020 | $121,550 | $35,438 | $54,150 | $3,414 | $7 | $228,178 | | Total | 3M Sep 2021 | $192,997 | $127,731 | $16,818 | $6,578 | $11,779 | $357,396 | | Total | 3M Sep 2020 | $216,943 | $166,558 | $62,858 | $10,526 | $7,767 | $481,815 | Contract Assets and Liabilities (in thousands) | Metric | September 30, 2021 | March 31, 2021 | Change (in thousands) | | :------------------ | :----------------- | :------------- | :-------------------- | | Contract assets | $158,425 | $139,937 | $18,488 | | Contract liabilities | $(214,729) | $(305,116) | $90,387 | | Net contract liability | $(56,304) | $(165,179) | $108,875 | - Unsatisfied performance obligations totaled **$1.91 billion** as of September 30, 2021, with **$1.06 billion** expected to be recognized within one year[72](index=72&type=chunk) [5. Inventories](index=23&type=section&id=5.%20INVENTORIES) This note details the composition and valuation of the company's inventory, including raw materials, work-in-process, and finished goods | Inventory Component (in thousands) | September 30, 2021 | March 31, 2021 | | :--------------------------------- | :----------------- | :------------- | | Raw materials | $49,802 | $45,211 | | Work-in-process | $298,251 | $277,729 | | Finished goods | $10,822 | $51,221 | | Rotable assets | $29,031 | $26,205 | | Total inventories | $387,906 | $400,366 | - Total inventories decreased from **$400.4 million** at March 31, 2021, to **$387.9 million** at September 30, 2021, primarily due to a reduction in finished goods[74](index=74&type=chunk) [6. Long-Term Debt](index=23&type=section&id=6.%20LONG-TERM%20DEBT) This note provides a breakdown of the company's long-term debt obligations, including various notes and finance leases | Debt Type (in thousands) | September 30, 2021 | March 31, 2021 | | :----------------------- | :----------------- | :------------- | | Finance leases | $15,728 | $20,125 | | Senior secured first lien notes due 2024 | $587,489 | $700,000 | | Senior secured notes due 2024 | $525,000 | $525,000 | | Senior notes due 2022 | $0 | $236,471 | | Senior notes due 2025 | $500,000 | $500,000 | | Total long-term debt (net of current portion) | $1,606,052 | $1,952,296 | - Total long-term debt decreased from **$1.95 billion** at March 31, 2021, to **$1.61 billion** at September 30, 2021, primarily due to the redemption of the 2022 Notes and a portion of the First Lien Notes[75](index=75&type=chunk)[87](index=87&type=chunk)[85](index=85&type=chunk) - The Company's receivables securitization facility had **$0 borrowings** and **$24.77 million** in outstanding letters of credit as of September 30, 2021, with a maximum available amount of **$75 million**[78](index=78&type=chunk)[79](index=79&type=chunk) - Interest paid on indebtedness for the six months ended September 30, 2021, was **$82.57 million**, including a **$7.49 million** redemption premium on the First Lien Notes[91](index=91&type=chunk) [7. Earnings Per Share](index=26&type=section&id=7.%20EARNINGS%20PER%20SHARE) This note presents the calculation of basic and diluted earnings per share, reflecting changes in weighted average common shares outstanding | Metric (in thousands) | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Six Months Ended Sep 30, 2021 | Six Months Ended Sep 30, 2020 | | :-------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Weighted average common shares outstanding – basic | 64,545 | 52,011 | 64,427 | 51,941 | | Weighted average common shares outstanding – diluted | 64,545 | 52,011 | 64,427 | 51,941 | - Weighted average common shares outstanding (basic and diluted) increased significantly from approximately **52 million shares** in 2020 to **64.5 million shares** in 2021 for both the three and six-month periods[92](index=92&type=chunk) [8. Income Taxes](index=26&type=section&id=8.%20INCOME%20TAXES) This note details the company's income tax expense, effective tax rates, and deferred tax assets and liabilities | Metric | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Six Months Ended Sep 30, 2021 | Six Months Ended Sep 30, 2020 | | :-------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Effective income tax rate | (24.5)% | (2.5)% | (8.2)% | (0.5)% | - The effective income tax rate for the three and six months ended September 30, 2021, was negative, reflecting a limitation on the recognition of tax benefits due to a full valuation allowance against net deferred tax assets[96](index=96&type=chunk)[99](index=99&type=chunk) - Total unrecognized tax benefits were **$11.68 million** as of September 30, 2021, with no anticipated reduction in the next 12 months[95](index=95&type=chunk) [9. Pension and Other Postretirement Benefit Plans](index=28&type=section&id=9.%20PENSION%20AND%20OTHER%20POSTRETIREMENT%20BENEFIT%20PLANS) This note provides information on the company's pension and other postretirement benefit plans, including net periodic benefit income and related charges Net Periodic Benefit Income (Pension Benefits, in thousands) | Component | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Six Months Ended Sep 30, 2021 | Six Months Ended Sep 30, 2020 | | :-------------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Service cost | $186 | $383 | $378 | $760 | | Interest cost | $11,698 | $16,100 | $23,521 | $32,186 | | Expected return on plan assets | $(33,377) | $(34,136) | $(66,832) | $(68,241) | | Amortization of net loss | $9,614 | $7,807 | $19,198 | $15,605 | | Curtailment loss | $0 | $0 | $16,024 | $0 | | Settlement loss | $3,826 | $0 | $3,826 | $0 | | Net periodic benefit income | $(7,885) | $(9,603) | $(3,621) | $(19,205) | - The Company recognized a one-time pension curtailment charge of **$16.02 million** and a settlement loss of **$3.83 million** for the six months ended September 30, 2021, related to divestitures and pension obligation settlements[107](index=107&type=chunk) [10. Stockholders' Deficit](index=30&type=section&id=10.%20STOCKHOLDERS'%20DEFICIT) This note details the components of stockholders' deficit, including accumulated other comprehensive loss and its changes Changes in Accumulated Other Comprehensive Loss (AOCI, in thousands) | Component | June 30, 2021 | September 30, 2021 | | :-------------------------- | :------------ | :----------------- | | Currency Translation Adjustment | $(39,412) | $(45,104) | | Unrealized Gains and Losses on Derivative Instruments | $309 | $(890) | | Defined Benefit Pension Plans and Other Postretirement Benefits | $(468,417) | $(457,211) | | Total AOCI | $(507,520) | $(503,205) | - AOCI improved from **$(507.5) million** at June 30, 2021, to **$(503.2) million** at September 30, 2021, primarily due to positive changes in defined benefit pension plans[108](index=108&type=chunk) [11. Segments](index=32&type=section&id=11.%20SEGMENTS) This note provides financial information disaggregated by the company's two reportable segments: Systems & Support and Aerospace Structures Segment Net Sales to External Customers (in thousands) | Segment | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Six Months Ended Sep 30, 2021 | Six Months Ended Sep 30, 2020 | | :-------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Systems & Support | $248,758 | $253,637 | $507,163 | $491,652 | | Aerospace Structures | $108,638 | $228,178 | $246,879 | $485,240 | | Total Net Sales | $357,396 | $481,815 | $754,042 | $976,892 | Segment Adjusted EBITDAP (in thousands) | Segment | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Six Months Ended Sep 30, 2021 | Six Months Ended Sep 30, 2020 | | :-------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Systems & Support | $45,047 | $34,169 | $87,895 | $64,237 | | Aerospace Structures | $7,019 | $(2,961) | $24,389 | $5,423 | | Total Adjusted EBITDAP | $35,563 | $13,104 | $76,581 | $30,709 | - Systems & Support net sales decreased slightly for the quarter but increased for the six-month period, while Aerospace Structures net sales significantly decreased due to divestitures and sunsetting programs[114](index=114&type=chunk)[116](index=116&type=chunk) - Both segments showed improved Adjusted EBITDAP, with Aerospace Structures turning from a loss to a profit for the three-month period[114](index=114&type=chunk)[116](index=116&type=chunk) [12. Commitments and Contingencies](index=34&type=section&id=12.%20COMMITMENTS%20AND%20CONTINGENCIES) This note outlines the company's various legal disputes, lawsuits, and potential liabilities, including pension withdrawal risks - The Company is involved in various disputes and lawsuits, but does not believe any pending matter will have a material effect on its financial position or results of operations[119](index=119&type=chunk) - The exit of Spokane, Washington, composites manufacturing operations could trigger a multiemployer pension plan withdrawal liability, the amount of which is uncertain and dependent on market conditions and actuarial assumptions[120](index=120&type=chunk) [13. Restructuring](index=34&type=section&id=13.%20RESTRUCTURING) This note details the restructuring activities and associated costs incurred by the company during the reporting periods Restructuring Costs (in thousands) | Period | Total Restructuring Costs | | :----- | :------------------------ | | Six months ended Sep 30, 2021 | $8,382 | | Six months ended Sep 30, 2020 | $28,676 | - Restructuring costs decreased significantly from **$28.68 million** in the six months ended September 30, 2020, to **$8.38 million** in the same period of 2021[124](index=124&type=chunk) - The Company estimates total restructuring costs of approximately **$15 million** for the fiscal year ended March 31, 2022, primarily for Aerospace Structures facility closures[124](index=124&type=chunk) [14. Subsequent Events](index=36&type=section&id=14.%20SUBSEQUENT%20EVENTS) This note reports significant events that occurred after the balance sheet date but before the financial statements were issued - Subsequent to September 30, 2021, the Company completed the sale and licensing of certain Staverton, UK product lines for approximately **$34 million** net proceeds[125](index=125&type=chunk) - In October 2021, **$26 million** of the proceeds were used to redeem **$24.3 million** of First Lien Notes, as required by their terms, leaving **$563.2 million** outstanding[125](index=125&type=chunk) - In November 2021, the Securitization Facility was amended, increasing the purchase limit from **$75 million** to **$100 million** and extending the term through November 2024[126](index=126&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial condition and results of operations, highlighting key business developments, the impact of divestitures, the ongoing effects of the COVID-19 pandemic, and performance across its two reportable segments. It also includes a reconciliation of non-GAAP financial measures [Overview](index=37&type=section&id=OVERVIEW) This section provides a high-level summary of the company's business, recent strategic actions, and key financial highlights - Triumph Group is a major aerospace industry supplier with two segments: Systems & Support (integrated solutions, proprietary components, MRO) and Aerospace Structures (large metallic and composite structures, interior systems)[128](index=128&type=chunk) - Divestitures of composites and large structure manufacturing operations in May 2021 resulted in a **$6.0 million** additional loss, following a **$102.5 million** loss in fiscal 2021[130](index=130&type=chunk) Summary of Significant Financial Results (Three Months Ended September 30) | Metric | 2021 (in millions) | 2020 (in millions) | | :-------------------- | :----------------- | :----------------- | | Net sales | $357.4 | $481.8 | | Operating income | $16.5 | $7.4 | | Net loss | $(9.1) | $(33.5) | | Loss per common share | $(0.14) | $(0.64) | | Cash used in operating activities (Six Months) | $(185.5) | $(239.7) | - Backlog as of September 30, 2021, was **$1.94 billion**, with approximately **$865.6 million** expected to be shipped beyond September 30, 2022[133](index=133&type=chunk) - The Company is implementing the Biden Administration's Executive Order 14042, requiring full vaccination for U.S. employees on covered government contracts, with potential workforce attrition risks[136](index=136&type=chunk) - Boeing 787 production rates were temporarily reduced to two per month due to rework requirements, impacting revenue (**6% of FY21 revenue**); the 767 program accounts for **24% of the current backlog**[138](index=138&type=chunk)[139](index=139&type=chunk) [Results of Operations](index=39&type=section&id=RESULTS%20OF%20OPERATIONS) This section analyzes the company's financial performance, including net sales, operating income, and net loss, across different periods and segments [Non-GAAP Financial Measures](index=39&type=section&id=Non-GAAP%20Financial%20Measures) This section defines and reconciles non-GAAP financial measures, such as Adjusted EBITDA and Adjusted EBITDAP, used to assess operational performance - The Company uses Adjusted EBITDA (net loss before interest, income taxes, amortization of acquired contract liabilities, legal settlements, loss on divestitures, depreciation and amortization) and Adjusted EBITDAP (Adjusted EBITDA before pension expense or benefit) as non-GAAP measures to evaluate operating performance[143](index=143&type=chunk) Adjusted EBITDA and Adjusted EBITDAP Reconciliation (in thousands) | Metric | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Six Months Ended Sep 30, 2021 | Six Months Ended Sep 30, 2020 | | :-------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Net loss (U.S. GAAP) | $(9,070) | $(33,489) | $(39,421) | $(309,275) | | Adjusted EBITDA | $49,980 | $25,531 | $105,354 | $55,552 | | Adjusted EBITDAP | $35,563 | $13,104 | $76,581 | $30,709 | - Adjusted EBITDAP significantly increased by **171.4%** for the three months and **149.4%** for the six months ended September 30, 2021, compared to the prior year periods[150](index=150&type=chunk) [Three months ended September 30, 2021, compared with three months ended September 30, 2020](index=44&type=section&id=Three%20months%20ended%20September%2030,%202021,%20compared%20with%20three%20months%20ended%20September%2030,%202020) This section analyzes the company's consolidated and segment financial performance for the three-month period ended September 30, 2021, compared to the prior year Consolidated Financial Performance (Three Months Ended September 30, in thousands) | Metric | 2021 | 2020 | | :-------------------- | :----- | :----- | | Net sales | $357,396 | $481,815 | | Total operating income | $16,451 | $7,422 | | Net loss | $(9,070) | $(33,489) | - Net sales decreased by **$124.4 million (25.8%)** due to divestitures (**$83.6 million**), sunsetting programs (**$34.2 million**), and decreased 787 volume, partially offset by increased repair & overhaul services[153](index=153&type=chunk) - Gross margin improved from **21.6%** to **25.7%**, primarily due to a **$13.9 million** reduction in acquired contract reserves[154](index=154&type=chunk) - Operating income increased by **$9.0 million (121.7%)**, driven by improved margins, decreased depreciation, rent, R&D, and IT costs, despite a **$6.9 million** increase in loss on sale of assets[157](index=157&type=chunk)[158](index=158&type=chunk) - Net loss decreased from **$(33.5) million** to **$(9.1) million**, reflecting improved operating performance[152](index=152&type=chunk) Segment Net Sales and Operating Income (Three Months Ended September 30, in thousands) | Segment | Net Sales 2021 | Net Sales 2020 | Operating Income 2021 | Operating Income 2020 | | :-------------------- | :------------- | :------------- | :-------------------- | :-------------------- | | Systems & Support | $248,781 | $254,171 | $38,100 | $29,592 | | Aerospace Structures | $108,643 | $228,778 | $3,605 | $(2,512) | - Systems & Support net sales decreased by **2.1%**, but operating income increased by **28.8%** due to reduced acquired contract reserves and increased gross margin (**32.2% vs 26.4%**)[166](index=166&type=chunk)[167](index=167&type=chunk)[169](index=169&type=chunk)[170](index=170&type=chunk)[171](index=171&type=chunk) - Aerospace Structures net sales decreased by **52.5%** due to divestitures and sunsetting programs, but operating income turned positive from **$(2.5) million** to **$3.6 million**, driven by decreased expenses[166](index=166&type=chunk)[167](index=167&type=chunk)[173](index=173&type=chunk)[175](index=175&type=chunk) [Six months ended September 30, 2021, compared with six months ended September 30, 2020](index=48&type=section&id=Six%20months%20ended%20September%2030,%202021,%20compared%20with%20six%20months%20ended%20September%2030,%202020) This section analyzes the company's consolidated and segment financial performance for the six-month period ended September 30, 2021, compared to the prior year Consolidated Financial Performance (Six Months Ended September 30, in thousands) | Metric | 2021 | 2020 | | :-------------------- | :----- | :----- | | Net sales | $754,042 | $976,892 | | Total operating income (loss) | $37,283 | $(244,970) | | Net loss | $(39,421) | $(309,275) | - Net sales decreased by **$222.85 million (22.8%)** due to divestitures (**$175.5 million**) and sunsetting programs (**$76.1 million**), partially offset by organic growth in repair & overhaul services[180](index=180&type=chunk) - Gross margin improved from **23.0%** to **25.9%**, primarily due to a **$19.2 million** reduction in acquired contract reserves[181](index=181&type=chunk) - Operating income significantly improved from a loss of **$(244.97) million** to an income of **$37.28 million**, largely due to the absence of **$252.4 million** in long-lived asset impairment charges from the prior year[183](index=183&type=chunk) - Net loss decreased substantially from **$(309.28) million** to **$(39.42) million**[179](index=179&type=chunk) Segment Net Sales and Operating Income (Six Months Ended September 30, in thousands) | Segment | Net Sales 2021 | Net Sales 2020 | Operating Income 2021 | Operating Income 2020 | | :-------------------- | :------------- | :------------- | :-------------------- | :-------------------- | | Systems & Support | $507,194 | $494,058 | $73,646 | $55,023 | | Aerospace Structures | $246,895 | $486,655 | $14,828 | $(258,632) | - Systems & Support net sales increased by **2.7%**, and operating income increased by **33.9%** due to increased sales, improved margins (**30.9% vs 27.5%**), and reduced consulting/credit losses[188](index=188&type=chunk)[189](index=189&type=chunk)[190](index=190&type=chunk)[191](index=191&type=chunk) - Aerospace Structures net sales decreased by **49.3%**, but operating income dramatically improved from a loss of **$(258.63) million** to a profit of **$14.83 million**, primarily due to the absence of prior year impairment charges and decreased expenses[188](index=188&type=chunk)[193](index=193&type=chunk)[195](index=195&type=chunk) [Liquidity and Capital Resources](index=52&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash flows, available liquidity, and capital management strategies - Net cash outflow from operating activities improved by **$54.2 million**, from **$(239.7) million** in 2020 to **$(185.5) million** in 2021, despite increased supplier disbursements[197](index=197&type=chunk) - Investing activities provided **$154.5 million** in cash for the six months ended September 30, 2021, a **$165.8 million** increase from the prior year, driven by **$185.6 million** from asset sales[199](index=199&type=chunk) - Financing activities used **$364.1 million** in cash, primarily for the redemption of **$236.5 million** in 2022 Notes and **$112.5 million** of First Lien Notes (plus a **$7.5 million** premium)[200](index=200&type=chunk)[205](index=205&type=chunk) - As of September 30, 2021, the Company had **$194.1 million** in cash and **$50.2 million** available under its Securitization Facility[200](index=200&type=chunk) - The Company deferred approximately **$18.0 million** in social security tax payments under the CARES Act, with **50%** due by December 31, 2021, and the remainder by December 31, 2022[203](index=203&type=chunk) - In November 2021, the Securitization Facility was amended to increase the purchase limit to **$100 million** and extend the term through November 2024[209](index=209&type=chunk) [Critical Accounting Policies](index=55&type=section&id=Critical%20Accounting%20Policies) This section highlights accounting policies that require significant judgment and estimates, which could materially impact financial results - No material changes to critical accounting policies or estimates were reported since the fiscal year ended March 31, 2021, Form 10-K filing[213](index=213&type=chunk)[214](index=214&type=chunk) [Forward-Looking Statements](index=57&type=section&id=Forward-Looking%20Statements) This section cautions readers that the report contains statements about future events and financial performance, subject to various risks and uncertainties - The report contains forward-looking statements regarding future operations and prospects, subject to uncertainties such as restructuring plans, business integrations, divestitures, economic conditions, and competitive factors in the aviation industry[215](index=215&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=57&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section refers to the Company's Annual Report on Form 10-K for detailed information on market risk, stating that no material changes have occurred during the current reporting period - No material changes in market risk disclosures were reported during the period covered by this report, referring to the Annual Report on Form 10-K for detailed information[216](index=216&type=chunk) [Item 4. Controls and Procedures](index=57&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the effectiveness of disclosure controls and procedures as of September 30, 2021, concluding they were effective at a reasonable assurance level. No material changes in internal control over financial reporting occurred during the quarter - Disclosure controls and procedures were evaluated and deemed effective at the reasonable assurance level as of September 30, 2021[218](index=218&type=chunk) - No material changes in internal control over financial reporting occurred during the fiscal quarter[219](index=219&type=chunk) [Part II. Other Information](index=58&type=section&id=Part%20II.%20Other%20Information) This section includes disclosures on legal proceedings, risk factors, equity sales, defaults, mine safety, and other relevant information [Item 1. Legal Proceedings](index=58&type=section&id=Item%201.%20Legal%20Proceedings) This section states that there are no applicable legal proceedings to report - Not applicable[220](index=220&type=chunk) [Item 1A. Risk Factors](index=58&type=section&id=Item%201A.%20Risk%20Factors) This section indicates that there have been no material changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K - No material changes in risk factors from those disclosed in the Annual Report on Form 10-K for the fiscal year ended March 31, 2021[221](index=221&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=58&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section states that there are no applicable unregistered sales of equity securities or use of proceeds to report - Not applicable[222](index=222&type=chunk) [Item 3. Defaults Upon Senior Securities](index=58&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section states that there are no applicable defaults upon senior securities to report - Not applicable[223](index=223&type=chunk) [Item 4. Mine Safety Disclosures](index=58&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that there are no applicable mine safety disclosures to report - Not applicable[224](index=224&type=chunk) [Item 5. Other Information](index=58&type=section&id=Item%205.%20Other%20Information) This section states that there is no other information to report - Not applicable[225](index=225&type=chunk) [Item 6. Exhibits](index=58&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including certifications, subsidiary guarantors, and financial information formatted in iXBRL - Includes certifications by the President and CEO, and Senior Vice President and CFO (Exhibits 31.1, 31.2, 32.1, 32.2)[226](index=226&type=chunk) - Financial information from the Quarterly Report is formatted in iXBRL (Exhibit 101 and 104)[226](index=226&type=chunk) [Signatures](index=59&type=section&id=Signatures) This section lists the authorized signatories of the report, confirming its accuracy and completeness - The report was signed on November 8, 2021, by Daniel J. Crowley (President and Chief Executive Officer), James F. McCabe, Jr. (Senior Vice President and Chief Financial Officer), and Thomas A. Quigley, III (Vice President, Investor Relations and Controller)[229](index=229&type=chunk)

United States Securities and Exchange Commission Washington, D.C. 20549 FORM 10-Q ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarterly Period Ended June 30, 2021 or ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Transition Period From _________ to ________ Commission File Number: 1-12235 TRIUMPH GROUP, INC. (Exact name of registrant as specified in its charter) Delaware 51-0347963 (State or other juris ...

Financial Data and Key Metrics Changes - Triumph Group reported an 11% organic growth in Q1, with adjusted operating income of $31 million and an adjusted operating margin of 8%, up 477 basis points year-over-year [42][39] - The company repaid the remaining balance of its 2022 bonds while preserving strong liquidity, with net debt at approximately $1.4 billion and combined cash and availability of about $263 million [48][18] Business Line Data and Key Metrics Changes - Systems & Support revenues increased by 8%, benefiting from recovery in the aftermarket, with military sales comprising 53% of sales in this segment, up from 51% in the prior year [43][22] - Structures segment net sales increased by 15%, largely due to prior year's pandemic impacts, with an adjusted operating margin of 10%, compared to 1% in the prior year [44][42] Market Data and Key Metrics Changes - MRO job inductions increased by 37% for the quarter, with aftermarket spares and repairs sales up over 70% [8][17] - Airline travel bookings improved from 46% to 69%, with corporate bookings rising from 18% to 40%, indicating a steady recovery in the aviation industry [26][10] Company Strategy and Development Direction - Triumph is focusing on becoming a largely pure-play Systems & Support provider, leveraging installed capacity and intellectual property to secure price increases [25][12] - The company is investing in energy efficiency projects and adopting additive manufacturing to enhance aircraft fuel efficiency and reduce production costs [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery trajectory, noting that the worst of the pandemic is behind and macro trends remain positive [19][30] - The company anticipates a bow wave of MRO repairs as deferred maintenance returns, with expectations of positive cash flow over the balance of the year [22][51] Other Important Information - Triumph is actively engaged in environmental, social, and governance initiatives, with significant investments in sustainable practices [14][15] - The company is on track to complete its final 747 production components, marking the end of a long period of losses [18][24] Q&A Session Summary Question: Update on long-term agreements with OEMs - Triumph has successfully negotiated long-term agreements with OEMs, ensuring continuity of supply and affordability, with no loss of customers during negotiations [58][60] Question: Expectations on the timeline for the Stuart facility - The company expects to enter the signing phase for the sale of the Stuart facility in the next quarter, with proceeds aimed at reducing first lien debt [63][65] Question: Cash flow trends and Boeing advances - Triumph used $150 million in cash in Q1, with expectations of becoming cash positive for the remainder of the year, while managing non-recurring cash uses [70][74] Question: Doubling profitability over the planning horizon - Management indicated that the goal of doubling profitability is based on cumulative effects of cost reductions, volume increases, and improved pricing strategies [78][82] Question: Systems & Support margins - The current margin of 14% is seen as a journey towards improvement, with expectations of better margins as contract renegotiations and volume increases take effect [88][90] Question: Military business outlook - Triumph has not seen any significant changes in military business, with strong support for defense programs expected to continue [110][112]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION For the fiscal year ended March 31, 2021 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 1-12235 Triumph Group, Inc. Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 or (Exact name of registrant as specified in its charter) | Delaware | 51-0347963 | | --- | --- | | (State or other ju ...