Triumph (US:TGI)2022-02-09 17:21Financial 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]