Group 1 - Triumph Group is facing challenges due to ongoing issues at Boeing, which are delaying its recovery [1][4] - The company's shares have decreased by approximately 80% over the last decade, primarily due to unprofitable contracts and supply chain issues [2] - Triumph reported earnings of $0.31 per share on revenue of $358.59 million for the fiscal fourth quarter, exceeding Wall Street estimates [3] Group 2 - The company anticipates additional challenges in fiscal 2025, projecting earnings of $0.42 per share, significantly below the $0.70 per share expected by analysts [3] - Triumph's weak guidance is a direct result of Boeing's reduced aircraft production, leading to conservative sales forecasts [4] - Despite having a solid plan to improve profitability, Triumph's future performance remains uncertain until Boeing's situation stabilizes [4][5]

Core Insights - Triumph Group, Inc. (TGI) reported adjusted earnings of 31 cents per share for Q4 fiscal 2024, exceeding the Zacks Consensus Estimate of 12 cents by 158.3%, although this represents a 3.1% decline from 32 cents in the prior-year quarter [1] - For the full fiscal year 2024, TGI reported an adjusted loss of 6 cents per share compared to earnings of 51 cents in the previous year [2] Financial Performance - TGI's net sales for Q4 fiscal 2024 were $358.6 million, surpassing the Zacks Consensus Estimate of $337 million by 6.4% and reflecting a 10.2% increase from $325.5 million in the same quarter last year [3] - Total revenues for fiscal 2024 reached $1.19 billion, a 5.4% increase from $1.13 billion in fiscal 2023 [4] Operational Highlights - Adjusted operating income for Q4 fiscal 2024 was $55.8 million, up 19.4% from the previous year [5] - Interest expenses decreased to $28.7 million, down 10.3% from the prior-year quarter [5] - TGI's backlog stood at $1.9 billion, a 22% increase from the prior fiscal year-end, primarily driven by commercial OEM platforms [5] Segment Performance - The Interiors segment reported sales of $48.5 million, a 21.6% increase from $39.9 million in the year-ago quarter [6] - The Systems & Support segment's sales improved by 8.6% year over year to $310.1 million [6] Financial Position - As of March 31, 2024, TGI's cash and cash equivalents totaled $392.5 million, up from $227.4 million a year earlier [7] - Long-term debt (excluding the current portion) decreased to $1.07 billion from $1.69 billion as of March 31, 2023 [7] - Net cash provided from operating activities was $9.4 million, compared to a net cash outflow of $52.3 million in the prior year [7] Capital Expenditures - Capital expenditures for TGI were $21.8 million as of March 31, 2024, compared to $20.7 million in the previous year [8] Guidance - TGI has provided financial guidance for fiscal 2025, expecting net sales of nearly $1.2 billion, with the Zacks Consensus Estimate for revenues at $1.26 billion [9] - The company anticipates earnings per share of 42 cents for fiscal 2025 and expects cash flow from operations in the range of $30-$50 million [10]

Investors in Triumph Group, Inc. (TGI) need to pay close attention to the stock based on moves in the options market lately. That is because the Jun 21, 2024 $5 Call had some of the highest implied volatility of all equity options today. What is Implied Volatility? Implied volatility shows how much movement the market is expecting in the future. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other. It could also ...

Triumph Group, Inc. (NYSE:TGI) Q4 2024 Earnings Conference Call May 23, 2024 8:30 AM ET Company Participants Thomas Quigley - Investor Relations Dan Crowley - Chairman, President & Chief Executive Officer Jim McCabe - Senior Vice President & Chief Financial Officer Conference Call Participants Josh Korn - Barclays Noah Poponak - Goldman Sachs Peter J. Arment - Baird Seth Seifman - JPMorgan Cai von Rumohr - TD Cowen Sheila Kahyaoglu - Jefferies Sam Struhsaker - Truist Securities Operator Good day, and welcom ...

[Financial Performance Overview](index=1&type=section&id=Financial%20Performance%20Overview) This section provides an overview of Triumph Group's financial performance, including fourth-quarter and full-year fiscal 2024 results, along with fiscal year 2025 guidance [Fourth Quarter Fiscal 2024 Performance](index=1&type=section&id=Fourth%20Quarter%20Fiscal%202024%20Performance) Triumph Group reported strong fourth-quarter results with net sales of $358.6 million, reflecting an 11% organic growth rate, a 12.5% operating margin, and $72.1 million in free cash flow Q4 Fiscal 2024 Key Financial Metrics | Metric | Value | | :--- | :--- | | Net Sales | $358.6 million | | Organic Sales Growth | 11% | | Operating Income | $44.8 million | | Operating Margin | 12.5% | | Adjusted Operating Margin | 15.6% | | Net Income from Continuing Operations | $5.5 million | | EPS from Continuing Operations (Diluted) | $0.07 | | Adjusted Net Income from Continuing Operations | $23.3 million | | Adjusted EPS from Continuing Operations (Diluted) | $0.31 | | Adjusted EBITDAP | $58.3 million | | Adjusted EBITDAP Margin | 16.3% | | Cash Provided by Operations | $77.7 million | | Free Cash Flow | $72.1 million | [Full Year Fiscal 2024 Performance](index=1&type=section&id=Full%20Year%20Fiscal%202024%20Performance) For the full fiscal year 2024, Triumph achieved net sales of $1.19 billion, marking a 13% organic sales growth, a 7.3% operating margin, and a net loss from continuing operations of ($34.5) million Full Year Fiscal 2024 Key Financial Metrics | Metric | Value | | :--- | :--- | | Net Sales | $1.19 billion | | Organic Sales Growth | 13% | | Operating Income | $86.5 million | | Operating Margin | 7.3% | | Adjusted Operating Margin | 9.6% | | Net Loss from Continuing Operations | ($34.5) million | | EPS from Continuing Operations | ($0.46) | | Adjusted Net Loss from Continuing Operations | ($4.4) million | | Adjusted EBITDAP | $144.3 million | | Adjusted EBITDAP Margin | 12.1% | | Cash Provided by Operations | $9.4 million | | Free Cash Use | ($12.4) million | [Fiscal Year 2025 Guidance](index=1&type=section&id=Fiscal%20Year%202025%20Guidance) Triumph anticipates net sales of approximately $1.2 billion for fiscal 2025, with projected operating income of ~$140.0 million (12% margin) and free cash flow between $10.0 million and $25.0 million Fiscal Year 2025 Guidance | Metric | Guidance | | :--- | :--- | | Net Sales | ~$1.2 billion | | Operating Income | ~$140.0 million | | Operating Margin | ~12% | | Adjusted EBITDAP | ~$182.0 million | | Adjusted EBITDAP Margin | ~15% | | Earnings per Diluted Share | ~$0.42 | | Cash Flow from Operations | $30.0 million to $50.0 million | | Free Cash Flow | $10.0 million to $25.0 million | [Management Commentary](index=1&type=section&id=Management%20Commentary) The CEO emphasized key strategic achievements in fiscal 2024, including streamlining the business through divestitures, significantly de-leveraging the balance sheet, and achieving eight consecutive quarters of organic growth - Completed the divestiture of the third-party Product Support MRO business and used the proceeds to retire over **$550.0 million of debt**, accelerating de-leveraging[6](index=6&type=chunk)[7](index=7&type=chunk) - Achieved the **eighth consecutive quarter of year-over-year organic growth**, primarily driven by rapid growth in aftermarket volume[7](index=7&type=chunk) - Accelerated new business with a year-to-date book-to-bill rate of **1.28**, increasing the backlog by **22% year-over-year** to its highest level since March 2020[7](index=7&type=chunk) - The Interiors business profit and cash flow lagged due to external cost drivers, though these headwinds are expected to lessen as narrowbody aircraft rates recover[7](index=7&type=chunk) [Detailed Financial Analysis](index=2&type=section&id=Detailed%20Financial%20Analysis) This section provides an in-depth analysis of Triumph Group's revenue by market segment, profitability, earnings, backlog, and cash flow performance [Revenue Analysis](index=2&type=section&id=Revenue%20Analysis) In Q4 FY2024, total net sales grew to $358.6 million from $325.5 million year-over-year, propelled by a strong recovery in the aftermarket that offset modest declines in OEM segments Net Sales by Market (in millions) | Segment | Q4 2024 | Q4 2023 | FY 2024 | FY 2023 | | :--- | :--- | :--- | :--- | :--- | | Commercial OEM | $139.6 | $144.3 | $530.3 | $541.5 | | Military OEM | $71.2 | $80.2 | $261.9 | $261.1 | | **Total OEM Revenue** | **$210.8** | **$224.4** | **$792.2** | **$802.5** | | Commercial Aftermarket | $56.4 | $38.4 | $164.0 | $126.1 | | Military Aftermarket | $65.3 | $54.1 | $183.1 | $165.8 | | **Total Aftermarket Revenue** | **$121.6** | **$92.5** | **$347.1** | **$292.0** | | **Total Net Sales** | **$358.6** | **$325.5** | **$1,192.0** | **$1,130.6** | [Commercial OEM](index=2&type=section&id=Commercial%20OEM) Commercial OEM sales decreased by 3.3% in Q4, primarily due to a non-aviation revenue adjustment, partially offset by higher production volumes on the Boeing 787 program - Excluding divestitures and exited programs, Commercial OEM sales decreased by **$1.5 million (1.1%)** in Q4[9](index=9&type=chunk) [Military OEM](index=2&type=section&id=Military%20OEM) Military OEM sales fell 11.2% in the quarter, primarily due to reduced sales on military rotorcraft programs like the V-22, partly offset by increased volumes on other military programs - Military OEM sales decreased by **$9.0 million (11.2%)** in Q4, driven by lower sales on military rotorcraft like the V-22[11](index=11&type=chunk) [Commercial Aftermarket](index=2&type=section&id=Commercial%20Aftermarket) Commercial Aftermarket sales experienced robust growth of 47.1% in Q4, driven by the ongoing recovery in global air travel, which boosted demand for spare parts and repair and overhaul services - Commercial Aftermarket sales increased by **$18.0 million (47.1%)** in Q4, driven by the continued improvement in air travel metrics[10](index=10&type=chunk) [Military Aftermarket](index=2&type=section&id=Military%20Aftermarket) Military Aftermarket sales grew by a strong 20.7% in the quarter, primarily due to increased demand for spares and repairs related to military rotorcraft programs - Military Aftermarket sales increased by **$11.2 million (20.7%)** in Q4, mainly from increased spares and repairs for military rotorcraft[11](index=11&type=chunk) [Profitability and Earnings](index=2&type=section&id=Profitability%20and%20Earnings) In Q4 FY2024, GAAP operating income was $44.8 million, with net income from continuing operations at $5.5 million ($0.07 per share), adjusted to $23.3 million ($0.31 per share) due to one-time items Q4 FY2024 GAAP to Non-GAAP Reconciliation (in millions, except EPS) | Item | Pre-tax | After-tax | Diluted EPS | | :--- | :--- | :--- | :--- | | **Income from Continuing Operations - GAAP** | **$9.2** | **$5.5** | **$0.07** | | Adjustments: | | | | | Legal contingencies loss | $6.0 | $6.0 | $0.08 | | Restructuring costs | $5.0 | $5.0 | $0.06 | | Debt extinguishment loss | $6.8 | $6.8 | $0.09 | | **Adjusted income from continuing operations - non-GAAP** | **$27.0** | **$23.3** | **$0.31** | - Fourth quarter operating income of **$44.8 million** includes **$5.0 million** of restructuring costs and **$6.0 million** in legal contingencies loss[13](index=13&type=chunk) [Backlog and Cash Flow](index=4&type=section&id=Backlog%20and%20Cash%20Flow) The company's financial health improved, with the backlog growing 22% year-over-year to $1.9 billion, driven by commercial OEM platforms, and generating strong cash flow of $77.7 million from operations in the fourth quarter - Backlog, representing the next 24 months of firm orders, increased **22%** from the prior fiscal year-end to **$1.9 billion**, primarily on commercial OEM platforms[14](index=14&type=chunk) - For the fourth quarter of fiscal 2024, cash flow provided by operations was **$77.7 million**[14](index=14&type=chunk) [Unaudited Financial Statements](index=5&type=section&id=Unaudited%20Financial%20Statements) This section presents Triumph Group's unaudited condensed statements of operations, balance sheets, and cash flows for fiscal year 2024 [Condensed Statements of Operations](index=5&type=section&id=Condensed%20Statements%20of%20Operations) For fiscal year 2024, Triumph reported net sales of $1.19 billion and operating income of $86.5 million, with a final net income of $512.4 million primarily due to income from discontinued operations FY 2024 vs FY 2023 Statement of Operations (in thousands) | Line Item | Year Ended March 31, 2024 | Year Ended March 31, 2023 | | :--- | :--- | :--- | | Net sales | $1,192,043 | $1,130,562 | | Operating income | $86,454 | $195,685 | | Income (loss) from continuing operations | ($34,467) | $72,417 | | Income from discontinued operations, net of tax | $546,851 | $17,176 | | **Net income (loss)** | **$512,384** | **$89,593** | | Diluted EPS - continuing operations | ($0.46) | $0.96 | | Diluted EPS - discontinued operations | $7.38 | $0.24 | | **Diluted EPS - total** | **$6.92** | **$1.20** | [Balance Sheets](index=6&type=section&id=Balance%20Sheets) As of March 31, 2024, Triumph's balance sheet reflects significant de-leveraging, with long-term debt reduced to $1.07 billion, cash increasing to $392.5 million, and stockholders' deficit improving dramatically Balance Sheet Highlights (in thousands) | Line Item | March 31, 2024 | March 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $392,511 | $227,403 | | Total assets | $1,686,270 | $1,714,844 | | Long-term debt, less current portion | $1,074,999 | $1,688,620 | | Total liabilities | $1,790,684 | $2,512,240 | | Total stockholders' deficit | ($104,414) | ($797,396) | [Statements of Cash Flows](index=7&type=section&id=Statements%20of%20Cash%20Flows) For fiscal year 2024, Triumph generated $9.4 million in cash from operating activities, with investing activities providing $689.9 million from asset sales, and financing activities using $534.3 million for debt retirement Cash Flow Summary (in thousands) | Line Item | Fiscal Year Ended March 31, 2024 | Fiscal Year Ended March 31, 2023 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $9,443 | ($52,251) | | Net cash provided by (used in) investing activities | $689,925 | ($27,168) | | Net cash (used in) provided by financing activities | ($534,337) | $65,788 | | **Net change in cash and cash equivalents** | **$165,108** | **($13,475)** | [Segment Performance](index=8&type=section&id=Segment%20Performance) This section analyzes the financial performance and key metrics for Triumph Group's Systems & Support and Interiors segments [Systems & Support](index=8&type=section&id=Systems%20%26%20Support) The Systems & Support segment demonstrated strong performance in fiscal 2024, with external sales rising to $1.03 billion, EBITDAP growing to $200.1 million, and the EBITDAP margin expanding to 19.5% Systems & Support Performance (in thousands) | Metric | Q4 2024 | Q4 2023 | FY 2024 | FY 2023 | | :--- | :--- | :--- | :--- | :--- | | Net sales to external customer | $310,116 | $285,583 | $1,027,630 | $918,960 | | Segment EBITDAP | $71,336 | $64,134 | $200,074 | $172,415 | | Segment EBITDAP Margin | 23.1% | 22.5% | 19.5% | 18.8% | [Interiors](index=8&type=section&id=Interiors) The Interiors segment faced significant challenges in fiscal 2024, with external sales declining to $164.4 million, resulting in an EBITDAP loss of ($5.0) million and a negative 3.0% margin Interiors Performance (in thousands) | Metric | Q4 2024 | Q4 2023 | FY 2024 | FY 2023 | | :--- | :--- | :--- | :--- | :--- | | Net sales to external customer | $48,471 | $39,875 | $164,413 | $211,602 | | Segment EBITDAP | $1,137 | $3,047 | ($5,000) | $31,937 | | Segment EBITDAP Margin | 2.3% | 7.6% | -3.0% | 14.0% | [Non-GAAP Financial Measures](index=9&type=section&id=Non-GAAP%20Financial%20Measures) This section provides reconciliations of Triumph Group's key non-GAAP financial measures, including Adjusted EBITDAP, Adjusted Income from Continuing Operations, Adjusted Operating Income, and Free Cash Flow [Reconciliation of Adjusted EBITDAP](index=11&type=section&id=Reconciliation%20of%20Adjusted%20EBITDAP) Triumph reconciles its GAAP income from continuing operations to Adjusted EBITDAP, which was $58.3 million (16.3% margin) for Q4 FY2024 and $144.3 million (12.1% margin) for the full fiscal year Reconciliation to Adjusted EBITDAP (in thousands) | Line Item | Q4 2024 | Q4 2023 | FY 2024 | FY 2023 | | :--- | :--- | :--- | :--- | :--- | | Income (loss) from continuing operations | $5,461 | ($24,166) | ($34,467) | $72,417 | | Adjustments (Net) | $52,725 | $72,348 | $178,719 | $77,602 | | **Adjusted EBITDAP** | **$58,274** | **$54,243** | **$144,254** | **$150,019** | | Net Sales | $358,587 | $325,458 | $1,192,043 | $1,130,562 | | **Adjusted EBITDAP Margin** | **16.3%** | **16.7%** | **12.1%** | **13.1%** | [Reconciliation of Adjusted Income from Continuing Operations](index=12&type=section&id=Reconciliation%20of%20Adjusted%20Income%20from%20Continuing%20Operations) The company provides a reconciliation from GAAP to non-GAAP adjusted income from continuing operations, with Q4 FY2024 adjusted income at $23.3 million ($0.31/share) and FY2024 adjusted loss at ($4.4) million (($0.06)/share) FY 2024 GAAP to Non-GAAP Income Reconciliation (in thousands, except EPS) | Period | GAAP Loss from Cont. Ops | Adjustments (Net) | Adjusted Income (Loss) | Adjusted EPS | | :--- | :--- | :--- | :--- | :--- | | **Q4 2024** | $5,461 | $17,804 | $23,265 | $0.31 | | **FY 2024** | ($34,467) | $30,115 | ($4,352) | ($0.06) | [Reconciliation of Adjusted Operating Income](index=13&type=section&id=Reconciliation%20of%20Adjusted%20Operating%20Income) Triumph reconciles GAAP operating income to an adjusted non-GAAP figure by excluding transformation-related expenses, resulting in Q4 FY2024 adjusted operating income of $55.8 million (15.6% margin) and FY2024 of $114.9 million (9.6% margin) Reconciliation to Adjusted Operating Income (in thousands) | Line Item | Q4 2024 | Q4 2023 | FY 2024 | FY 2023 | | :--- | :--- | :--- | :--- | :--- | | Operating income - GAAP | $44,810 | $42,992 | $86,454 | $195,685 | | Adjustments (Net) | $10,985 | $3,738 | $28,421 | ($81,166) | | **Adjusted operating income - non-GAAP** | **$55,795** | **$46,730** | **$114,875** | **$114,519** | | **Adjusted operating margin - non-GAAP** | **15.6%** | **14.4%** | **9.6%** | **10.0%** | [Reconciliation of Free Cash Flow](index=14&type=section&id=Reconciliation%20of%20Free%20Cash%20Flow) Free cash flow is derived by subtracting capital expenditures from cash provided by operating activities, with Q4 FY2024 generating $72.1 million, FY2024 showing a ($12.4) million use, and FY2025 guidance projecting positive free cash flow Free Cash Flow Reconciliation (in millions) | Period | Cash from Ops | Capital Expenditures | Free Cash Flow (Use) | | :--- | :--- | :--- | :--- | | **Q4 2024** | $77.7 | ($5.6) | $72.1 | | **Q4 2023** | $60.0 | ($8.3) | $51.8 | | **FY 2024** | $9.4 | ($21.8) | ($12.4) | | **FY 2023** | ($52.3) | ($20.7) | ($72.9) | | **FY 2025 Guidance** | $30.0 - $50.0 | ($20.0) - ($25.0) | $10.0 - $25.0 |

Complete thermal system including cabin and avionics bay cooling (27 LRU's), loose gears, gun actuation, T700 electronic engine controls $560K CH-47 Complete landing gear hydraulic system including all actuation, nose wheel steering, ground service panel, cargo door actuation system, Trent 1000 engine gears, GEnx heat exchangers, insulation system, ECS ducting TRIUMPH / Q4 FY'24 / May 23, 2024 | 22 OPEB Expense (Income) ^ ≈ ($9) ≈ ($9) Fiscal 2026 $41 < $1 Thereafter $21 < $1 We view Adjusted EBITDA and Adj ...

Core Insights - Triumph Group (TGI) reported quarterly earnings of $0.31 per share, exceeding the Zacks Consensus Estimate of $0.12 per share, but down from $0.39 per share a year ago, indicating an earnings surprise of 158.33% [1] - The company generated revenues of $358.59 million for the quarter ended March 2024, surpassing the Zacks Consensus Estimate by 6.37%, but down from $393.29 million year-over-year [2] - The stock has underperformed the market, losing about 9.5% since the beginning of the year compared to the S&P 500's gain of 11.3% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.08 on revenues of $285.02 million, and for the current fiscal year, it is $0.63 on revenues of $1.26 billion [7] - The estimate revisions trend for Triumph Group is currently unfavorable, resulting in a Zacks Rank 5 (Strong Sell) for the stock, indicating expected underperformance in the near future [6] Industry Context - The Aerospace - Defense Equipment industry, to which Triumph Group belongs, is currently in the top 34% of over 250 Zacks industries, suggesting a favorable industry outlook [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

PROVIDES FISCAL YEAR 2025 GUIDANCE RADNOR, Pa., May 23, 2024 /PRNewswire/ -- Triumph Group, Inc. (NYSE: TGI) ("TRIUMPH" or the "Company") today reported financial results for its fourth quarter and fiscal 2024, which ended March 31, 2024. Fourth Quarter Fiscal 2024 Fiscal 2024 Fiscal 2025 Guidance "TRIUMPH took important strategic actions during fiscal 2024 to create a more streamlined, value-added and IP-based business with a much stronger balance sheet," said Dan Crowley, TRIUMPH's chairman, president and ...

Part I. Financial Information This part covers the unaudited financial statements, management's discussion, market risk, and controls for the reporting period [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The unaudited financial statements for the period ended December 31, 2023, reflect a net loss, improved stockholders' deficit, and negative but improving operating cash flow [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents the company's financial position, detailing assets, liabilities, and stockholders' deficit as of December 31, 2023 Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 31, 2023 | Mar 31, 2023 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $162,899 | $227,403 | | Total current assets | $929,207 | $933,512 | | Assets held for sale - current | $180,642 | $140,096 | | Total assets | $1,676,582 | $1,714,844 | | **Liabilities & Stockholders' Deficit** | | | | Total current liabilities | $349,382 | $396,924 | | Long-term debt, less current portion | $1,627,810 | $1,688,620 | | Total liabilities | $2,346,862 | $2,512,240 | | Total stockholders' deficit | $(670,280) | $(797,396) | - Assets held for sale increased significantly to **$180.6 million** as of December 31, 2023, reflecting the classification of the Product Support business as a disposal group[9](index=9&type=chunk)[56](index=56&type=chunk) - Total stockholders' deficit improved from **$(797.4) million** at March 31, 2023, to **$(670.3) million** at December 31, 2023, partly due to an increase in capital in excess of par value from share issuances and warrant exercises[9](index=9&type=chunk)[16](index=16&type=chunk) [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section details the company's financial performance, including net sales, operating income, and net loss for the three and nine-month periods Statement of Operations Summary (in thousands, except per share data) | Metric | Q3 FY2024 (ended Dec 31, 2023) | Q3 FY2023 (ended Dec 31, 2022) | 9M FY2024 (ended Dec 31, 2023) | 9M FY2023 (ended Dec 31, 2022) | | :--- | :--- | :--- | :--- | :--- | | Net sales | $284,955 | $261,662 | $833,456 | $805,104 | | Operating income | $19,711 | $23,633 | $41,642 | $152,692 | | (Loss) income from continuing operations | $(11,911) | $5,512 | $(39,930) | $96,582 | | Net (loss) income | $(15,902) | $10,952 | $(35,361) | $107,136 | | (Loss) earnings per share—diluted | $(0.20) | $0.08 | $(0.49) | $1.53 | - The significant decrease in operating income for the nine-month period is primarily due to a **$103.2 million** gain on the sale of assets and businesses recognized in the prior-year period, compared to a **$12.2 million** loss in the current period[11](index=11&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section outlines the company's cash inflows and outflows from operating, investing, and financing activities for the nine months ended December 31 Cash Flow Summary - Nine Months Ended Dec 31 (in thousands) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | $(68,275) | $(112,291) | | Net cash used in investing activities | $(24,756) | $(18,434) | | Net cash provided by (used in) financing activities | $28,361 | $(5,299) | | **Net change in cash and cash equivalents** | **$(64,504)** | **$(141,449)** | - Cash used in operating activities improved by **$44.0 million** year-over-year, from **$(112.3) million** to **$(68.3) million**[20](index=20&type=chunk)[217](index=217&type=chunk) - Financing activities provided **$28.4 million** in cash, primarily driven by **$80.0 million** in net proceeds from the issuance of common stock related to warrant exercises, partially offset by **$50.6 million** in debt retirement[20](index=20&type=chunk)[221](index=221&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes provide critical details on accounting policies, the Product Support business divestiture, revenue recognition, debt structure, segment performance, and ongoing legal contingencies - The company has two reportable segments: **Systems & Support** and **Interiors** (formerly Aerospace Structures)[23](index=23&type=chunk) - In December 2023, Triumph entered a definitive agreement to sell its Product Support business to AAR Corp. for **$725 million**, with results now classified as discontinued operations and assets/liabilities held for sale[24](index=24&type=chunk)[54](index=54&type=chunk)[56](index=56&type=chunk) - As of December 31, 2023, the company had **$1.6 billion** in unsatisfied performance obligations (backlog), with approximately **$979.5 million** expected to be recognized as revenue within one year[74](index=74&type=chunk)[75](index=75&type=chunk) - The company is involved in litigation seeking approximately **$130 million** in damages for alleged breach of contract and fraudulent inducement related to a former Stuart facility, which the company disputes[135](index=135&type=chunk)[137](index=137&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the Product Support business divestiture for **$725 million** to reduce debt, Q3 FY2024 sales growth driven by Commercial OEM, a loss from continuing operations, and a **$1.87 billion** backlog [Overview](index=34&type=section&id=Overview) This overview highlights the definitive agreement to sell the Product Support MRO operations and key financial performance metrics for Q3 FY2024 - The company entered into a definitive agreement in December 2023 to sell its Product Support MRO operations to AAR Corp. These operations are now classified as discontinued[142](index=142&type=chunk) Q3 FY2024 Financial Highlights vs. Q3 FY2023 | Metric | Q3 FY2024 | Q3 FY2023 | | :--- | :--- | :--- | | Net Sales | $285.0M | $261.7M | | Operating Income | $19.7M | $23.6M | | Loss from Continuing Operations | $(11.9)M | $5.5M (Income) | | Diluted EPS from Continuing Ops | $(0.15) | $0.09 | - Company backlog as of December 31, 2023, was **$1.87 billion**[150](index=150&type=chunk) [Results of Operations](index=36&type=section&id=Results%20of%20Operations) This section analyzes net sales by end market, gross profit margin changes, and the factors influencing operating income for the reporting periods Net Sales by End Market - Q3 FY2024 vs Q3 FY2023 (in thousands) | End Market | Q3 2023 | Q3 2022 | | :--- | :--- | :--- | | Commercial OEM | $142,256 | $119,967 | | Military OEM | $61,149 | $61,705 | | Commercial Aftermarket | $35,089 | $30,922 | | Military Aftermarket | $38,328 | $39,093 | | **Total Net Sales** | **$284,955** | **$261,662** | - For Q3 FY2024, organic Commercial OEM sales increased by **$30.7 million (27.5%)**, primarily from Boeing 737 and 787 programs, while Commercial Aftermarket sales grew by **$4.2 million (13.5%)**[165](index=165&type=chunk)[168](index=168&type=chunk) - Consolidated gross profit margin for Q3 FY2024 decreased to **24.6%** from **27.4%** in the prior year, due to inflation, unfavorable foreign exchange rates, and changes in sales mix[172](index=172&type=chunk) - For the nine months ended Dec 31, 2023, total operating income fell to **$41.6 million** from **$152.7 million** year-over-year, largely because the prior period included a significant gain on the sale of the Stuart manufacturing operations[198](index=198&type=chunk)[201](index=201&type=chunk) [Business Segment Performance](index=42&type=section&id=Business%20Segment%20Performance) This section details the net sales and operating income performance of the Systems & Support and Interiors segments for Q3 FY2024 Segment Performance - Q3 FY2024 vs Q3 FY2023 (in thousands) | Segment | Net Sales (Q3'24) | Net Sales (Q3'23) | % Change | Operating Income (Q3'24) | Operating Income (Q3'23) | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Systems & Support | $241,109 | $218,196 | 10.5% | $33,846 | $31,586 | 7.2% | | Interiors | $44,080 | $43,606 | 1.1% | $(2,124) | $5,022 | (142.3)% | - **Systems & Support** Q3 sales grew **10.5%** organically, driven by commercial OEM and aftermarket recovery, with operating income increasing **7.2%** to **$33.8 million**[183](index=183&type=chunk)[184](index=184&type=chunk) - **Interiors** Q3 organic sales increased **25.6%**, but the segment reported an operating loss of **$2.1 million**, a significant decrease from a **$5.0 million** income in the prior year, due to environmental remediation costs, inflation, and unfavorable foreign exchange effects[188](index=188&type=chunk)[189](index=189&type=chunk) [Liquidity and Capital Resources](index=47&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's plans to use divestiture proceeds for debt reduction, cash flow from operating activities, and available liquidity - The company plans to use proceeds from the Product Support sale to redeem debt, including up to all outstanding 2025 Notes and approximately **$120 million** of 2028 First Lien Notes, projected to reduce annual interest expense by about **$56 million** in fiscal 2025[57](index=57&type=chunk)[216](index=216&type=chunk) - Net cash outflow from operating activities was **$68.3 million** for the nine months ended Dec 31, 2023, an improvement from a **$112.3 million** outflow in the prior-year period[217](index=217&type=chunk) - As of December 31, 2023, the company had **$162.9 million** of cash on hand and **$55.4 million** available under its Securitization Facility[221](index=221&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=52&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states there has been no material change in its exposure to market risks since its Annual Report on Form 10-K for the fiscal year ended March 31, 2023 - There has been no material change in the company's market risk information during the period covered by this report[238](index=238&type=chunk) [Item 4. Controls and Procedures](index=52&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of December 31, 2023. No material changes to internal control over financial reporting occurred during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective at the reasonable assurance level as of December 31, 2023[240](index=240&type=chunk) - There were no changes during the fiscal quarter that materially affected, or are reasonably likely to materially affect, the company's internal controls over financial reporting[241](index=241&type=chunk) Part II. Other Information This part covers legal proceedings, risk factors, equity security sales, and a list of exhibits filed with the report [Item 1. Legal Proceedings](index=53&type=section&id=Item%201.%20Legal%20Proceedings) A complaint was filed against the company on December 12, 2023, by the buyer of the Stuart facility. The buyer alleges breach of contract and fraudulent inducement, seeking damages of approximately $130 million. The company disputes the claims and intends to defend itself vigorously - On December 12, 2023, the buyer of the Stuart facility filed a complaint against Triumph Aerostructures, LLC (TAS) and the company, alleging breach of contract and fraudulent inducement[242](index=242&type=chunk) - The complaint seeks damages of approximately **$130 million** related to alleged undisclosed paint, supplier, and production issues, which the company disputes[242](index=242&type=chunk)[243](index=243&type=chunk) [Item 1A. Risk Factors](index=53&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the company's risk factors from those disclosed in its Annual Report on Form 10-K for the fiscal year ended March 31, 2023 - No material changes in risk factors were reported compared to the Annual Report on Form 10-K for the fiscal year ended March 31, 2023[244](index=244&type=chunk) [Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities](index=53&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities,%20Use%20of%20Proceeds,%20and%20Issuer%20Purchases%20of%20Equity%20Securities) This item is not applicable for the reporting period - Not applicable[245](index=245&type=chunk) [Item 6. Exhibits](index=53&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including the Securities and Asset Purchase Agreement for the sale of the Product Support business, amendments to credit facilities, and various officer certifications - Key exhibits filed include the Securities and Asset Purchase Agreement related to the sale of the Product Support business to AAR CORP, and amendments to the company's Receivables Purchase Agreement[249](index=249&type=chunk)

Triumph Group, Inc. (NYSE:TGI) Q3 2024 Earnings Conference Call February 7, 2024 8:30 AM ET Company Participants Thomas Quigley - VP, IR, Mergers & Acquisitions and Treasurer Daniel Crowley - Chairman, President & CEO James McCabe - SVP & CFO Conference Call Participants Seth Seifman - JPMorgan Sheila Kahyaoglu - Jefferies Peter Arment - Baird Myles Walton - Wolfe Research Michael Ciarmoli - Truist Securities Cai von Rumohr - TD Cowen David Strauss - Barclays Ronald Epstein - Bank of America Operator Welcom ...