Triumph (TGI)2024-08-07 14:24Financial Data and Key Metrics Changes - Triumph Group reported a revenue of 17 million [11] - Adjusted operating income rose by 23% to 41 million, while military OEM revenue experienced a slight decline [13] - Commercial aftermarket revenue rose by 43%, largely due to legacy 737 spares and repairs, while commercial OEM revenue was slightly up at 1.9 billion, with a stable sequential backlog despite some order delays [18] - The commercial single-aisle backlog remained flat, while twin-aisle backlog grew by 42% year-over-year, driven by 787 and 777 orders [18] - The company anticipates strong aftermarket demand to continue through the end of the decade, supported by a growing installed base of proprietary products [17] Company Strategy and Development Direction - Triumph is focused on a pivot to systems and IP-based aftermarket services following the divestiture of its product support business, aiming to capitalize on strong aftermarket demand [8] - The company is preparing for an anticipated aerospace and defense industry super cycle, leveraging its diversified customer base and end markets [8] - Triumph is committed to enhancing shareholder value through operational improvements, product portfolio investments, and maintaining a strong balance sheet [24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about long-term demand, reinforced by positive feedback from the recent Farnborough International Airshow [16] - The company expects continued improvement in financial performance as it navigates through near-term OEM headwinds, with aftermarket sales driving profitability [23] - Management remains confident in achieving full-year financial objectives despite challenges in the interiors business and supply chain issues [15][23] Other Important Information - Triumph redeemed 821 million, with liquidity totaling $203 million [14] - A cybersecurity incident was reported, but management believes it will not materially impact financial results [22] Q&A Session All Questions and Answers Question: Can you walk us through the expected positive cash flow in the second half of the year? - Management indicated that strong performance in actuation and engine controls, along with anticipated increases in aftermarket sales, will contribute to positive cash flow in the second half [25][26] Question: What volume is needed for the MAX to achieve positive EBITDAP in interiors? - Management stated that achieving positive EBITDAP in interiors requires installation rates to increase to around 30 shipsets per month, with current production at 12 to 14 [29][30] Question: How is the company addressing the impact of the V-22 crash? - Management clarified that the crash was unrelated to Triumph's hardware, but acknowledged it could affect OEM deliveries and aftermarket sales [53] Question: How is Triumph preparing for potential strikes at Boeing? - Management noted that they have contingency plans in place and do not anticipate significant disruptions, as Boeing has been responsible in managing production rates [55] Question: Can you provide details on Triumph's electric aircraft gearbox development? - Management described ongoing projects for electric regional jets, emphasizing the importance of gearboxes in connecting electric motors to propellers [57][59]