Triumph (TGI) - 2023 Q1 - Quarterly Report

Part I. Financial Information This section presents the unaudited condensed consolidated financial statements and management's discussion and analysis for the reporting period Item 1. Financial Statements (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 accounting policies, segment information, debt, and other financial disclosures for the period ended June 30, 2022 Condensed Consolidated Balance Sheets This statement provides a snapshot of the company's assets, liabilities, and equity at specific points in time Condensed Consolidated Balance Sheets (in thousands) | Metric (in thousands) | June 30, 2022 | March 31, 2022 | Change | % Change | | :-------------------- | :------------ | :------------- | :----- | :------- | | Cash and cash equivalents | $134,636 | $240,878 | $(106,242) | -44.1% | | Total current assets | $885,001 | $963,068 | $(78,067) | -8.1% | | Total assets | $1,667,461 | $1,761,166 | $(93,705) | -5.3% | | Total current liabilities | $543,530 | $602,143 | $(58,613) | -9.7% | | Long-term debt, less current portion | $1,587,073 | $1,586,222 | $851 | 0.1% | | Total stockholders' deficit | $(805,287) | $(787,423) | $(17,864) | -2.3% | Condensed Consolidated Statements of Operations This statement details the company's revenues, expenses, and net income or loss over a specific period Condensed Consolidated Statements of Operations (in thousands, except per share) | Metric (in thousands, except per share) | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Change | % Change | | :------------------------------------ | :------------------------------- | :------------------------------- | :----- | :------- | | Net sales | $349,384 | $396,646 | $(47,262) | -11.9% | | Operating income | $14,734 | $20,832 | $(6,098) | -29.3% | | Net loss | $(10,342) | $(30,351) | $20,009 | 65.9% | | Loss per share—basic | $(0.16) | $(0.47) | $0.31 | 66.0% | Condensed Consolidated Statements of Comprehensive Loss This statement presents the net loss and other comprehensive income or loss items not included in net income Condensed Consolidated Statements of Comprehensive Loss (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Change | % Change | | :-------------------- | :------------------------------- | :------------------------------- | :----- | :------- | | Net loss | $(10,342) | $(30,351) | $20,009 | 65.9% | | Foreign currency translation adjustment | $(10,382) | $2,749 | $(13,131) | -477.7% | | Total defined benefit pension plans and other postretirement benefits income, net of taxes | $5,323 | $20,629 | $(15,306) | -74.2% | | Net unrealized loss on cash flow hedges, net of tax | $(838) | $(706) | $(132) | -18.7% | | Total other comprehensive (loss) income | $(5,897) | $22,672 | $(28,569) | -126.0% | | Total comprehensive loss | $(16,239) | $(7,679) | $(8,560) | -111.5% | Condensed Consolidated Statements of Stockholders' Deficit This statement outlines changes in the company's equity, including net loss and other comprehensive loss, over a specific period Condensed Consolidated Statements of Stockholders' Deficit (in thousands) | Metric (in thousands) | March 31, 2022 | June 30, 2022 | Change | | :-------------------- | :------------- | :------------ | :----- | | Total Stockholders' Deficit | $(787,423) | $(805,287) | $(17,864) | | Accumulated Deficit | $(1,297,149) | $(1,307,491) | $(10,342) | | Accumulated Other Comprehensive Loss | $(463,354) | $(469,251) | $(5,897) | - The total stockholders' deficit increased by $17,864 thousand from March 31, 2022, to June 30, 2022, primarily due to a net loss of $10,342 thousand and a foreign currency translation adjustment loss of $10,382 thousand, partially offset by pension liability adjustments[15] Condensed Consolidated Statements of Cash Flows This statement categorizes cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Change | % Change | | :-------------------- | :------------------------------- | :------------------------------- | :----- | :------- | | Net cash used in operating activities | $(93,030) | $(149,514) | $56,484 | 37.8% | | Net cash (used in) provided by investing activities | $(5,366) | $156,816 | $(162,182) | -103.4% | | Net cash used in financing activities | $(4,432) | $(360,513) | $356,081 | 98.8% | | Net change in cash and cash equivalents | $(106,242) | $(352,396) | $246,154 | 69.8% | | Cash and cash equivalents at end of period | $134,636 | $237,486 | $(102,850) | -43.3% | Notes to Condensed Consolidated Financial Statements This section provides detailed explanations and disclosures regarding the accounting policies and financial statement line items 1. Background and Basis of Presentation Triumph Group, Inc. designs, engineers, manufactures, and sells products for global aerospace OEMs and provides repair and overhaul services. The Company operates through two reportable segments: Systems & Support and Aerospace Structures - Triumph Group, Inc. is a Delaware corporation that designs, engineers, manufactures, and sells products for global aerospace OEMs and repairs/overhauls aircraft components for commercial, air cargo, and military customers[23] - The Company has two reportable segments: Systems & Support (integrated solutions, proprietary components, MRO services) and Aerospace Structures (large metallic and composite structures, aircraft interior systems)[23][24][25] 2. Summary of Significant Accounting Policies This note outlines the Company's significant accounting policies, including revenue recognition for long-term contracts (cost-to-cost method), concentration of credit risk, fair value measurements, and supplemental cash flow information, notably the recognition of a $5.0 million grant benefit from the AMJP - Revenue from long-term contracts is recognized over time using the cost-to-cost input method, with cumulative catch-up adjustments for changes in estimates[36][38][39] - Sales to The Boeing Company represented 34% of net sales ($118,303 thousand) for the three months ended June 30, 2022, down from 36% ($142,102 thousand) in the prior year period[44] - The Company recognized approximately $5.0 million as a reduction in cost of sales for the final balance of the earned grant benefit under the Aviation Manufacturing Jobs Protection Program (AMJP) during the three months ended June 30, 2022[49] 3. Divested Operations and Assets Held for Sale The Company committed to selling its Stuart, Florida manufacturing operations in January 2022, which closed in July 2022 and is expected to result in a gain. Previous divestitures in fiscal 2022 included composites manufacturing operations in Georgia and Thailand, and large structure manufacturing operations in Texas, which closed in May 2021, resulting in a $6.0 million loss and a $16.0 million pension curtailment charge - The sale of Stuart, Florida manufacturing operations, specializing in large metallic structures, closed in July 2022 and is expected to result in a gain[51][108] - Fiscal 2022 divestitures included composites manufacturing operations in Georgia and Thailand, and large structure manufacturing operations in Red Oak, Texas, which closed in May 2021, yielding $155,000 thousand net proceeds and resulting in a $6,000 thousand loss and a $16,000 thousand pension curtailment charge[52] 4. Revenue Recognition and Contracts with Customers Revenue is disaggregated by satisfaction method (over time or at a point in time) and end market. Contract assets decreased by $4,499 thousand, while contract liabilities decreased significantly by $117,915 thousand, primarily due to the reclassification of customer advance repayment obligations related to the Stuart, Florida divestiture Net Sales by Satisfaction Method and End Market (in thousands) | Segment | Three Months Ended June 30, 2022 (in thousands) | Three Months Ended June 30, 2021 (in thousands) | | :-------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net Sales by Satisfaction Method | | | | Systems & Support (Over time) | $120,718 | $118,981 | | Systems & Support (Point in time) | $133,402 | $138,222 | | Aerospace Structures (Over time) | $89,592 | $129,523 | | Aerospace Structures (Point in time) | $5,149 | $8,706 | | Net Sales by End Market | | | | Systems & Support (OEM Commercial) | $78,020 | $59,239 | | Systems & Support (OEM Military) | $56,936 | $76,695 | | Systems & Support (MRO Commercial) | $60,039 | $55,847 | | Systems & Support (MRO Military) | $50,946 | $59,112 | | Aerospace Structures (OEM Commercial) | $90,519 | $121,692 | | Aerospace Structures (OEM Military) | $28 | $12,651 | Contract Balances (in thousands) | Contract Balances (in thousands) | June 30, 2022 | March 31, 2022 | Change | | :------------------------------- | :------------ | :------------- | :----- | | Contract assets | $97,394 | $101,893 | $(4,499) | | Contract liabilities | $(54,947) | $(172,862) | $117,915 | - The change in contract liabilities is primarily due to revenue recognized in excess of customer advances and the reclassification of $103,803 thousand of customer advance repayment obligations to liabilities related to assets held for sale due to the Stuart, Florida divestiture[62] Unsatisfied Performance Obligations (in thousands) | Unsatisfied Performance Obligations (in thousands) | Total | Less than 1 year | 1-3 years | 4-5 years | More than 5 years | | :----------------------------------------------- | :------------ | :--------------- | :----------- | :----------- | :---------------- | | As of June 30, 2022 | $1,829,569 | $916,200 | $890,235 | $23,134 | $0 | - Approximately $531,000 thousand of the total unsatisfied performance obligations as of June 30, 2022, relate to divestitures occurring subsequent to that date[67] 5. Inventories Inventories are valued at the lower of cost or market, with total inventories increasing from $361,692 thousand at March 31, 2022, to $379,929 thousand at June 30, 2022 Inventory Components (in thousands) | Inventory Component (in thousands) | June 30, 2022 | March 31, 2022 | | :------------------------------- | :------------ | :------------- | | Raw materials | $48,821 | $44,841 | | Work-in-process | $283,245 | $269,368 | | Finished goods | $20,390 | $19,472 | | Rotable assets | $27,473 | $28,011 | | Total inventories | $379,929 | $361,692 | 6. Long-Term Debt The Company's long-term debt primarily consists of senior secured first lien notes due 2024 ($563,171 thousand), senior secured notes due 2024 ($525,000 thousand), and senior notes due 2025 ($500,000 thousand). The receivables securitization facility provides up to $100,000 thousand, with $0 borrowings and $20,970 thousand in letters of credit outstanding as of June 30, 2022 Long-Term Debt (in thousands) | Long-Term Debt (in thousands) | June 30, 2022 | March 31, 2022 | | :---------------------------- | :------------ | :------------- | | Finance leases | $15,528 | $16,492 | | Senior secured first lien notes due 2024 | $563,171 | $563,171 | | Senior secured notes due 2024 | $525,000 | $525,000 | | Senior notes due 2025 | $500,000 | $500,000 | | Less: debt issuance costs | $(13,658) | $(15,173) | | Total long-term debt | $1,590,041 | $1,589,490 | | Less: current portion | $2,968 | $3,268 | | Net long-term debt | $1,587,073 | $1,586,222 | - The receivables securitization facility has a maximum available amount of $100,000 thousand, with $0 borrowings and $20,970 thousand in outstanding letters of credit as of June 30, 2022[72][73] - Interest paid on indebtedness decreased from $46,026 thousand in Q2 2021 (including $7,489 thousand redemption premiums) to $25,869 thousand in Q2 2022[84] 7. Earnings Per Share Basic and diluted loss per share remained at $(0.16) for the three months ended June 30, 2022, compared to $(0.47) for the same period in 2021 Weighted Average Common Shares Outstanding (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | | :-------------------- | :------------------------------- | :------------------------------- | | Weighted average common shares outstanding – basic | 64,820 | 64,299 | | Weighted average common shares outstanding – diluted | 64,820 | 64,299 | - Net loss per share (basic and diluted) was $(0.16) for Q2 2022, an improvement from $(0.47) in Q2 2021[11] 8. Income Taxes The Company maintains a valuation allowance against most of its net deferred tax assets due to insufficient positive evidence for realization. The effective income tax rate for Q2 2022 was (20.4)%, reflecting this limitation, compared to (4.2)% in Q2 2021 - Total unrecognized tax benefits were $12,064 thousand as of June 30, 2022, an increase from $11,800 thousand at March 31, 2022[88] - The Company maintains a valuation allowance against most of its net deferred tax assets, and the effective income tax rate for Q2 2022 was (20.4)%, compared to (4.2)% for Q2 2021, reflecting this limitation[89][90] 9. Pension and Other Postretirement Benefit Plans The Company sponsors defined benefit pension plans and provides certain unfunded healthcare benefits for eligible retirees. Net periodic benefit income from pension plans was $(6,122) thousand for Q2 2022, an improvement from an expense of $4,263 thousand in Q2 2021 Net Periodic Benefit Income Components (in thousands) | Component of Net Periodic Benefit Income (in thousands) | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | | :------------------------------------------------------ | :------------------------------- | :------------------------------- | | Service cost | $179 | $192 | | Interest cost | $16,278 | $11,823 | | Expected return on plan assets | $(30,324) | $(33,455) | | Amortization of net loss | $7,719 | $9,583 | | Curtailment loss | $0 | $16,024 | | Net periodic benefit (income) expense | $(6,122) | $4,263 | - The Company recognized net periodic benefit income from its other postretirement benefits plan of approximately $2,291 thousand for Q2 2022, compared to $2,349 thousand for Q2 2021[95] 10. Stockholders' Deficit Accumulated Other Comprehensive Loss (AOCI) increased from $(463,354) thousand at March 31, 2022, to $(469,251) thousand at June 30, 2022, primarily due to foreign currency translation adjustments and net unrealized losses on cash flow hedges Accumulated Other Comprehensive Loss Components (in thousands) | AOCI Component (in thousands) | March 31, 2022 | June 30, 2022 | | :---------------------------- | :------------- | :------------ | | Currency Translation Adjustment | $(47,933) | $(58,315) | | Unrealized Gains and Losses on Derivative Instruments | $(270) | $(1,108) | | Defined Benefit Pension Plans and Other Postretirement Benefits | $(415,151) | $(409,828) | | Total AOCI | $(463,354) | $(469,251) | - Net current period Other Comprehensive Loss (OCI) was $(5,897) thousand for Q2 2022, a significant decrease from income of $22,672 thousand in Q2 2021, driven by foreign currency translation adjustments[97] 11. Segments The Company reports financial performance based on two segments: Systems & Support and Aerospace Structures. Adjusted EBITDAP is used as a primary measure of segment profitability. For Q2 2022, Systems & Support generated $254,643 thousand in net sales and $40,149 thousand in Adjusted EBITDAP, while Aerospace Structures generated $94,741 thousand in net sales and $16,580 thousand in Adjusted EBITDAP Segment Performance (in thousands) | Segment (in thousands) | Net Sales to External Customers (Q2 2022) | Adjusted EBITDAP (Q2 2022) | Net Sales to External Customers (Q2 2021) | Adjusted EBITDAP (Q2 2021) | | :--------------------- | :---------------------------------------- | :------------------------- | :---------------------------------------- | :------------------------- | | Systems & Support | $254,643 | $40,149 | $258,405 | $42,848 | | Aerospace Structures | $94,741 | $16,580 | $138,241 | $17,370 | | Total | $349,384 | $56,729 | $396,646 | $60,218 | - Systems & Support net sales decreased by 1.5% YoY, while Aerospace Structures net sales decreased by 31.5% YoY[141] - Systems & Support Adjusted EBITDAP decreased by 6.3% YoY, and Aerospace Structures Adjusted EBITDAP decreased by 4.6% YoY[141] 12. Commitments and Contingencies The Company is involved in various disputes and lawsuits deemed immaterial, but acknowledges potential exposure to additional costs from facility disposals, such as environmental remediation or multiemployer pension plan withdrawal liabilities, which could have a material effect - The Company is involved in immaterial disputes, claims, and lawsuits in the ordinary course of business[104] - Disposal of certain facilities, like the Spokane, Washington, composites manufacturing operations, could trigger a multiemployer pension plan withdrawal liability, payable over at least ten years[105][107] 13. Subsequent Events Subsequent to June 30, 2022, the Company completed the sale of its Stuart, Florida manufacturing operations, which resulted in a reduction in revenue of approximately $17,000 thousand related to consideration payable to a customer. The buyer assumed $104,000 thousand in customer advance liquidation liabilities and $26,000 thousand in other customer-related liabilities, with an expected gain to be recognized in Q2 fiscal 2023 - The sale of Stuart, Florida manufacturing operations was completed after June 30, 2022, leading to a $17,000 thousand revenue reduction and the buyer assuming $104,000 thousand in customer advance liquidation liabilities and $26,000 thousand in other customer liabilities[108] - A gain from the Stuart operations sale and a pension curtailment charge of approximately $2,000 thousand are expected to be recognized in the second quarter of fiscal 2023[108][109] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the Company's financial condition and results of operations for the three months ended June 30, 2022, compared to the prior year. It covers business overview, recent divestitures, key financial highlights, program developments, and a detailed analysis of consolidated and segment performance, including non-GAAP measures, liquidity, and capital resources Overview Triumph Group, Inc. is a major aerospace supplier with two segments: Systems & Support and Aerospace Structures. The Company completed several divestitures, including the Stuart, Florida operations post-period, which reshaped its portfolio to focus on systems and aftermarket services. Key financial results for Q2 2023 included a net loss of $10.3 million and a backlog of $1.53 billion - The Company has exited its structures business and reshaped its portfolio to primarily consist of businesses providing systems and aftermarket services following the sale of its Stuart, Florida manufacturing operations[113] - The Company recognized approximately $5.0 million of grant benefit from the Aviation Manufacturing Jobs Protection Program (AMJP) as a reduction in cost of sales during Q2 2022[114] Key Financial Highlights (in millions, except per share) | Metric (in millions, except per share) | Q2 2022 | Q2 2021 | | :----------------------------------- | :------ | :------ | | Net sales | $349.4 | $396.6 | | Operating income | $14.7 | $20.8 | | Net loss | $10.3 | $30.4 | | Loss per diluted common share | $(0.16) | $(0.47) | | Backlog (as of June 30, 2022) | $1,530 | N/A | | Cash used in operating activities | $93.0 | $149.5 | Results of Operations This section discusses the Company's consolidated and business segment results, emphasizing the use of non-GAAP financial measures like Adjusted EBITDA and Adjusted EBITDAP to evaluate performance. These measures exclude items such as interest, taxes, depreciation, amortization, and pension expenses to provide a clearer view of day-to-day operations - The Company uses non-GAAP financial measures, Adjusted EBITDA and Adjusted EBITDAP, to internally measure operating and management performance and to provide additional analysis for investors[121][123] Adjusted EBITDA and Adjusted EBITDAP Reconciliation (in thousands) | Reconciliation Item (in thousands) | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | | :--------------------------------- | :------------------------------- | :------------------------------- | | Net loss (U.S. GAAP measure) | $(10,342) | $(30,351) | | Income tax expense | $1,750 | $1,214 | | Interest expense and other | $31,912 | $38,558 | | Debt extinguishment loss | $0 | $9,689 | | Pension settlement, curtailment, and special termination benefit charges | $0 | $16,078 | | Consideration payable to customer related to divestiture | $17,185 | $0 | | Loss on sale of assets and businesses, net | $0 | $5,969 | | Share-based compensation | $1,578 | $2,247 | | Amortization of acquired contract liabilities | $(523) | $(1,214) | | Depreciation and amortization | $9,806 | $15,431 | | Adjusted EBITDA (non-GAAP measure) | $51,366 | $57,621 | | Non-service defined benefit income (excluding curtailments and special termination benefits) | $(8,586) | $(14,356) | | Adjusted EBITDAP (non-GAAP measure) | $42,780 | $43,265 | Consolidated Results Comparison (Q2 2022 vs Q2 2021) Consolidated net sales decreased by 11.9% to $349,384 thousand, primarily due to divestitures and sunsetting programs, partially offset by organic growth. Operating income decreased by 29.3% to $14,734 thousand, impacted by consideration payable to a customer related to divestiture, but organic gross margin improved due to AMJP grant benefits and sales mix Consolidated Results Comparison (in thousands) | Metric (in thousands) | Q2 2022 | Q2 2021 | Change | % Change | | :-------------------- | :----------- | :----------- | :----------- | :------- | | Net sales | $349,384 | $396,646 | $(47,262) | -11.9% | | Segment operating income | $30,850 | $46,769 | $(15,919) | -34.0% | | Corporate expense | $(16,116) | $(25,937) | $9,821 | 37.9% | | Total operating income | $14,734 | $20,832 | $(6,098) | -29.3% | | Net loss | $(10,342) | $(30,351) | $20,009 | 65.9% | - Organic sales increased by $2.8 million (0.8%) but were offset by declines from divestitures ($25.4 million) and sunsetting programs ($7.6 million)[131] - Organic gross margin improved to 27.1% in Q2 2022 from 26.1% in Q2 2021, driven by $5.0 million in AMJP grant benefits and favorable sales mix[132] - Corporate expenses decreased by $9.8 million, primarily due to a $6.0 million decrease in loss on sale of assets and businesses[134] Business Segment Performance (Q2 2022 vs Q2 2021) Systems & Support saw a 1.5% decrease in net sales and a 6.7% decrease in operating income, with organic gross margin declining due to sales mix changes despite AMJP benefits. Aerospace Structures experienced a 31.5% decrease in net sales but a significant improvement in organic operating income and gross margin, primarily due to reduced losses from the Spokane, Washington operations Business Segment Performance (in thousands) | Segment Performance (in thousands) | Q2 2022 Net Sales | Q2 2021 Net Sales | % Change Net Sales | Q2 2022 Operating Income | Q2 2021 Operating Income | % Change Operating Income | | :------------------------------- | :---------------- | :---------------- | :----------------- | :----------------------- | :----------------------- | :------------------------ | | Systems & Support | $254,643 | $258,413 | (1.5)% | $33,151 | $35,546 | (6.7)% | | Aerospace Structures | $94,753 | $138,252 | (31.5)% | $(2,301) | $11,223 | (120.5)% | - Systems & Support organic net sales increased by 0.9%, but overall sales declined due to the Staverton, UK divestiture. Organic gross margin decreased to 28.6% from 30.4% due to sales mix and timing of reserve adjustments, partially offset by AMJP benefits[142][143] - Aerospace Structures organic net sales increased by 0.6%, but overall sales declined significantly due to the Stuart operations divestiture, other divestitures, and sunsetting programs. Organic gross margin increased to 23.6% from 15.8%, driven by reduced losses from the Spokane, Washington operations[146][147] Liquidity and Capital Resources The Company's liquidity is primarily funded by cash, operations, and the Securitization Facility. Net cash used in operating activities improved by $56.5 million to $93.0 million in Q2 2022, driven by resolution of customer advances. Investing activities used $5.4 million, a significant decrease from $156.8 million provided in the prior year, which included proceeds from asset sales. Financing activities used $4.4 million, a substantial reduction from $360.5 million used in Q2 2021 due to debt redemption. The Company expects full-year capital expenditures of $30.0 million for fiscal 2023 - Net cash used in operating activities improved by $56.5 million, from $149.5 million in Q2 2021 to $93.0 million in Q2 2022, largely due to the resolution of customer advances transferred in the Stuart manufacturing operations sale[150] - Cash flows used in investing activities were $5.4 million in Q2 2022, a decrease of $162.2 million from $156.8 million provided in Q2 2021, which included $180.5 million from asset sales[153] - Cash flows used in financing activities decreased significantly from $360.5 million in Q2 2021 (due to debt redemption) to $4.4 million in Q2 2022[156] - As of June 30, 2022, the Company had $134.6 million of cash on hand and $79.0 million available under its Securitization Facility[156] - The Company expects full-year capital expenditures in fiscal 2023 to be approximately $30.0 million, with $26.0 million allocated to the Systems & Support segment for efficiency improvements and capability expansion[153] - The Company is currently in compliance with all debt covenants and anticipates minimal required contributions to its defined benefit plans in the near future, though recent market losses could trigger earlier funding requirements[165] Critical Accounting Policies There have been no material changes to the Company's critical accounting policies or the assumptions and estimates used to prepare financial information since the filing of the Annual Report on Form 10-K for the fiscal year ended March 31, 2022 - No material changes to critical accounting policies or estimates since the fiscal year ended March 31, 2022, 10-K filing[169] Forward-Looking Statements This section contains forward-looking statements regarding future operations and prospects, based on current projections and expectations. Actual results may differ materially due to uncertainties such as restructuring plans, business integrations, divestitures, economic conditions, customer dependence, and competitive factors in the aviation industry - Forward-looking statements are based on current projections and expectations, but actual results could differ materially due to factors like restructuring, divestitures, economic conditions, and customer dependence[170][172] Item 3. Quantitative and Qualitative Disclosures About Market Risk There have been no material changes in the Company's exposure to market risks from those disclosed in its Annual Report on Form 10-K for the fiscal year ended March 31, 2022 - No material change in market risk information from the Annual Report on Form 10-K for the fiscal year ended March 31, 2022[173] Item 4. Controls and Procedures As of June 30, 2022, the Company's management, including the CEO and CFO, concluded that its disclosure controls and procedures were effective at a reasonable assurance level. There were no material changes to internal control over financial reporting during the quarter - Disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2022[175] - No material changes occurred in internal control over financial reporting during the fiscal quarter[176] Part II. Other Information This section includes additional required disclosures such as legal proceedings, risk factors, and equity security sales Item 1. Legal Proceedings This section states that there are no legal proceedings applicable to report for the period - Not applicable[177] Item 1A. Risk Factors There have been no material changes in the Company's risk factors from those disclosed in its Annual Report on Form 10-K for the fiscal year ended March 31, 2022 - No material changes in risk factors from the Annual Report on Form 10-K for the fiscal year ended March 31, 2022[178] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section provides information on the Company's repurchases of common stock during the three months ended June 30, 2022, primarily to satisfy employee tax withholding obligations related to share-based compensation awards Common Stock Repurchases | Period | Total Number of Shares Purchased (1) | Average Price Paid Per Share (2) | | :------------------------- | :----------------------------------- | :------------------------------- | | April 1, 2022 - April 30, 2022 | 32,253 | $26.11 | | May 1, 2022 - May 31, 2022 | 55,172 | $23.64 | | June 1, 2022 - June 30, 2022 | 84,857 | $14.91 | | Total | 172,282 | $19.80 | - Shares purchased represent shares surrendered to the Company due to restricted share forfeitures or to satisfy tax withholding obligations in connection with employees' share-based compensation awards[180] Item 3. Defaults Upon Senior Securities This section states that there are no defaults upon senior securities applicable to report for the period - Not applicable[182] Item 4. Mine Safety Disclosures This section states that there are no mine safety disclosures applicable to report for the period - Not applicable[183] Item 5. Other Information This section states that there is no other information applicable to report for the period - Not applicable[184] Item 6. Exhibits This section lists the exhibits filed as part of the Form 10-Q, including the Tax Benefits Preservation Plan, a Separation Agreement, a list of Subsidiary Guarantors, CEO/CFO certifications, and XBRL financial information - Exhibits include the Tax Benefits Preservation Plan, a Separation Agreement, List of Subsidiary Guarantors, CEO/CFO Certifications, and iXBRL financial information[186] Signatures This section formally attests to the accuracy and completeness of the financial report by authorized company officers - The report is signed by Daniel J. Crowley (President and CEO), James F. McCabe, Jr. (Senior Vice President and CFO), and Thomas A. Quigley, III (Vice President, Investor Relations and Controller) on August 3, 2022[189]