RADNOR,
Pa., Aug. 2, 2023 /PRNewswire/ -- Triumph
Group, Inc. (NYSE: TGI) ("TRIUMPH" or the "Company") today
reported preliminary financial results for its first quarter
of fiscal 2024, which ended June 30,
2023.
First Quarter Fiscal 2024
- Net sales of $327.1 million;
Organic sales growth of 14%
- Operating income of $18.7 million
with operating margin of 5.7%; adjusted operating income of
$24.4 million with adjusted operating
margin of 7.5%
- Net loss of ($12.8) million, or
($0.19) per share; adjusted net loss
of ($7.0) million, or ($0.10) per diluted share
- Adjusted EBITDAP of $35.6 million
with Adjusted EBITDAP margin of 10.9%
Fiscal 2024 Guidance
- Reaffirmed expected net sales of $1.39
billion to $1.43 billion,
reflecting 7 - 10% organic growth
- Updated operating income of $159.0
million to $174.0 million,
reflecting operating margin of 11 - 12%
- Reaffirmed adjusted EBITDAP of $210.0
million to $225.0 million,
reflecting Adjusted EBITDAP margin of 15 - 16%
- Reaffirmed expected cash flow from operations of $60.0 million to $80.0
million; free cash flow of $35.0
million to $50.0 million
"Building off our positive momentum from fiscal 2023,
TRIUMPH generated its fifth
consecutive quarter of organic sales growth driven by continued
strong commercial aftermarket and improving OEM demand," said
Dan Crowley, TRIUMPH's chairman, president, and chief
executive officer. "Free cash use was in line with our expectations
and was impacted by seasonality due to increased working capital
necessary to support higher deliveries. We continue to expect free
cash flow to improve over the course of the year. With a
growing and profitable backlog, TRIUMPH is well positioned to continue to grow
organically and improve profitability, while also benefitting from
the positive trends across our end markets."
Mr. Crowley continued, "As TRIUMPH continues to focus on deleveraging and
optimizing its capital structure, the company recently completed
the successful redemption of its warrants, increasing cash by
$85 million and reducing debt by
$14 million. TRIUMPH remains on track to deliver profitable
growth and achieve its full year guidance as the Company is
executing on its financial and operational goals."
First Quarter Fiscal 2024 Overview
|
|
Three Months Ended
June 30,
|
|
($ in
millions)
|
|
2023
|
|
|
2022
|
|
Commercial
OEM
|
|
$
|
117.2
|
|
|
$
|
168.5
|
|
Military OEM
|
|
|
65.8
|
|
|
|
57.0
|
|
Total OEM
Revenue
|
|
|
183.0
|
|
|
|
225.5
|
|
|
|
|
|
|
|
|
Commercial
Aftermarket
|
|
|
87.6
|
|
|
|
63.2
|
|
Military
Aftermarket
|
|
|
47.6
|
|
|
|
50.9
|
|
Total Aftermarket
Revenue
|
|
|
135.2
|
|
|
|
114.1
|
|
|
|
|
|
|
|
|
Non-Aviation
Revenue
|
|
|
8.3
|
|
|
|
9.2
|
|
Amortization of
acquired contract liabilities
|
|
|
0.6
|
|
|
|
0.5
|
|
Total Net
Sales*
|
|
$
|
327.1
|
|
|
$
|
349.4
|
|
* Differences due to
rounding
|
|
|
|
|
|
|
Note> Aftermarket
sales include both repair & overhaul services and spare parts
sales.
|
|
|
|
|
|
Excluding impacts from divestitures and exited or sunsetting
programs, organic Commercial OEM sales increased $8.7 million, or 8.1% and included increased
production volumes on Boeing 787 and 737 programs, offset by
reductions across other commercial rotorcraft programs.
Military OEM sales increased $8.8
million, or 15.5%, all of which were organic, primarily due
to increased sales related to the CH-53K, V-22, and UH-60
programs.
Commercial Aftermarket sales increased $24.5 million, or 38.7%. Excluding impacts
from divestitures, organic Commercial Aftermarket sales increased
$25.9 million, or 42.5%, driven by
the continued improvement in overall air travel metrics, favorably
impacting both repair and overhaul services and spare part sales on
an equal basis.
Military aftermarket sales decreased $3.3
million, or 6.6%, all of which was organic, driven by
reduced sales across several fixed wing platforms and reduced
spares on rotorcraft platforms relative to the prior year,
partially offset by increased repairs on rotorcraft platforms.
First quarter operating income of $18.7
million includes $1.9 million
of shareholder cooperation costs and a $3.8
million reduction of the prior period gain on sale of assets
and businesses. Net loss for the first quarter of 2024 was
($12.8) million or ($0.19) per share and includes $0.1 million in debt extinguishment
losses.
TRIUMPH's results included the
following:
($ millions
except EPS)
|
|
Pre-tax
|
|
|
After-tax
|
|
|
Diluted
EPS
|
|
Loss from Continuing
Operations - GAAP
|
|
$
|
(11.0)
|
|
|
$
|
(12.8)
|
|
|
$
|
(0.19)
|
|
Adjustments
|
|
|
|
|
|
|
|
|
|
Loss on sale of assets
and businesses, net
|
|
|
3.8
|
|
|
|
3.8
|
|
|
|
0.06
|
|
Shareholder cooperation
expenses
|
|
|
1.9
|
|
|
|
1.9
|
|
|
|
0.03
|
|
Debt extinguishment
losses
|
|
|
0.1
|
|
|
|
0.1
|
|
|
|
0.00
|
|
Adjusted Income from
Continuing Operations - non-GAAP
|
|
$
|
(5.2)
|
|
|
$
|
(7.0)
|
|
|
$
|
(0.10)
|
|
The number of shares used in computing loss per share for the
first quarter of 2024 was 66.3 million.
Backlog, which represents the next 24 months of actual purchase
orders with firm delivery dates or contract requirements, was
$1.74 billion, up 10% from prior
fiscal year end. This increase was primarily on commercial narrow
body platforms.
For the first quarter of fiscal 2024, cash flow used in
operations was $63.7 million, which
was in line with expectations previously provided and reflects
seasonality due to increased working capital to support higher
fiscal 2024 deliveries.
Potential Adjustments
We are currently evaluating the final accounting and process
around the working capital components of recent legacy Aerospace
Structures divestitures and related transition services agreements,
which could result in non-cash adjustments to reported amounts,
including gain or loss on sale of assets and businesses. At this
time, we do not anticipate that potential adjustments would be
material to the reported periods. We plan to provide an
update upon completion of this evaluation process. These
potential adjustments do not relate to previously disclosed
indemnification claims related to the sale of the Stuart facility,
which have been resolved in part at this time.
Conference Call
TRIUMPH will hold a conference
call today, August 2nd, at
8:30 a.m. (ET) to discuss the first
quarter of fiscal 2024 results. The conference call will be
available live and archived on the Company's website at
http://www.triumphgroup.com. A slide presentation will be
included with the audio portion of the webcast, and the
presentation has been posted on the Company's website at
https://www.triumphgroup.com/filings-financial/quarterly-results.
An audio replay will be available from August 2nd to August 9th by calling (844)
344-7529 (Domestic) or (412) 317-0088 (International), passcode
#2972802.
About TRIUMPH
TRIUMPH, headquartered in
Radnor, Pennsylvania, designs,
engineers, manufactures, repairs and overhauls a broad portfolio of
aerospace and defense systems and components. The company serves
the global aviation industry, including original equipment
manufacturers and the full spectrum of military and commercial
aircraft operators.
More information about TRIUMPH
can be found on the Company's website at www.triumphgroup.com.
Forward Looking Statements
Statements in this release which are not historical facts are
forward-looking statements under the provisions of the Private
Securities Litigation Reform Act of 1995, including statements of
expectations of or assumptions about financial and operational
performance, revenues, earnings per share, cash flow or use, cost
savings, operational efficiencies and organizational restructurings
and our evaluation of potential adjustments to reported amounts, as
described above. All forward-looking statements involve risks
and uncertainties which could affect the Company's actual results
and could cause its actual results to differ materially from those
expressed in any forward-looking statements made by, or on behalf
of, the Company. Further information regarding the important
factors that could cause actual results to differ from projected
results can be found in Triumph Group's reports filed with the SEC,
including our Annual Report on Form 10-K for the fiscal year ended
March 31, 2023.
FINANCIAL DATA
(UNAUDITED)
|
|
TRIUMPH GROUP, INC.
AND SUBSIDIARIES
(in thousands,
except per share data)
|
|
|
|
Three Months
Ended
|
|
|
|
June
30,
|
|
CONDENSED STATEMENTS
OF OPERATIONS
|
|
2023
|
|
|
2022
|
|
Net sales
|
|
$
|
327,145
|
|
|
$
|
349,384
|
|
Cost of sales
(excluding depreciation shown below)
|
|
|
240,734
|
|
|
|
272,400
|
|
Selling, general &
administrative
|
|
|
55,786
|
|
|
|
51,745
|
|
Depreciation &
amortization
|
|
|
8,118
|
|
|
|
9,806
|
|
Restructuring
costs
|
|
|
—
|
|
|
|
699
|
|
Loss on sale of assets
and businesses, net
|
|
|
3,820
|
|
|
|
—
|
|
Operating
income
|
|
|
18,687
|
|
|
|
14,734
|
|
Interest expense and
other, net
|
|
|
38,447
|
|
|
|
31,912
|
|
Debt extinguishment
losses
|
|
|
64
|
|
|
|
—
|
|
Warrant remeasurement
gain
|
|
|
(8,001)
|
|
|
|
—
|
|
Non-service defined
benefit income
|
|
|
(820)
|
|
|
|
(8,586)
|
|
Income tax
expense
|
|
|
1,750
|
|
|
|
1,750
|
|
Net loss
|
|
$
|
(12,753)
|
|
|
$
|
(10,342)
|
|
Loss per share -
basic:
|
|
|
|
|
|
|
Net loss
|
|
$
|
(0.19)
|
|
|
$
|
(0.16)
|
|
Weighted average common
shares outstanding - basic
|
|
|
66,347
|
|
|
|
64,820
|
|
Loss per share -
diluted:
|
|
|
|
|
|
|
Net loss
|
|
$
|
(0.19)
|
|
|
$
|
(0.16)
|
|
Weighted average common
shares outstanding - diluted
|
|
|
66,347
|
|
|
|
64,820
|
|
FINANCIAL DATA
(UNAUDITED)
|
|
TRIUMPH GROUP, INC.
AND SUBSIDIARIES
(dollars in thousands, except share data)
|
|
BALANCE
SHEETS
|
|
Unaudited
June 30,
2023
|
|
|
Audited
March 31,
2023
|
|
Assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
146,318
|
|
|
$
|
227,403
|
|
Accounts receivable,
net
|
|
|
163,649
|
|
|
|
196,775
|
|
Contract
assets
|
|
|
112,657
|
|
|
|
103,027
|
|
Inventory,
net
|
|
|
429,386
|
|
|
|
389,245
|
|
Prepaid and other
current assets
|
|
|
19,716
|
|
|
|
17,062
|
|
Current
assets
|
|
|
871,726
|
|
|
|
933,512
|
|
Property and equipment,
net
|
|
|
168,437
|
|
|
|
166,800
|
|
Goodwill
|
|
|
510,855
|
|
|
|
509,449
|
|
Intangible assets,
net
|
|
|
71,737
|
|
|
|
73,898
|
|
Other, net
|
|
|
32,115
|
|
|
|
31,185
|
|
Total assets
|
|
$
|
1,654,870
|
|
|
$
|
1,714,844
|
|
Liabilities &
Stockholders' Deficit
|
|
|
|
|
|
|
Current portion of
long-term debt
|
|
$
|
3,313
|
|
|
$
|
3,162
|
|
Accounts
payable
|
|
|
149,107
|
|
|
|
197,932
|
|
Contract
liabilities
|
|
|
47,882
|
|
|
|
44,482
|
|
Accrued
expenses
|
|
|
144,452
|
|
|
|
151,348
|
|
Current
liabilities
|
|
|
344,754
|
|
|
|
396,924
|
|
Long-term debt, less
current portion
|
|
|
1,677,603
|
|
|
|
1,688,620
|
|
Accrued pension and
post-retirement benefits, noncurrent
|
|
|
314,154
|
|
|
|
359,375
|
|
Deferred income taxes,
noncurrent
|
|
|
7,444
|
|
|
|
7,268
|
|
Other noncurrent
liabilities
|
|
|
57,369
|
|
|
|
60,053
|
|
Stockholders'
Deficit:
|
|
|
|
|
|
|
Common stock, $.001
par value, 100,000,000 shares authorized, 69,964,040
and 65,432,589 shares issued and
outstanding
|
|
|
70
|
|
|
|
65
|
|
Capital in excess of
par value
|
|
|
1,019,891
|
|
|
|
964,741
|
|
Accumulated other
comprehensive loss
|
|
|
(546,106)
|
|
|
|
(554,646)
|
|
Accumulated
deficit
|
|
|
(1,220,309)
|
|
|
|
(1,207,556)
|
|
Total stockholders'
deficit
|
|
|
(746,454)
|
|
|
|
(797,396)
|
|
Total liabilities and
stockholders' deficit
|
|
$
|
1,654,870
|
|
|
$
|
1,714,844
|
|
FINANCIAL DATA
(UNAUDITED)
|
|
TRIUMPH GROUP, INC.
AND SUBSIDIARIES
(dollars in
thousands, except share data)
|
|
|
|
Three Months Ended
June 30,
|
|
|
|
2023
|
|
|
2022
|
|
Operating
Activities
|
|
|
|
|
|
|
Net loss
|
|
$
|
(12,753)
|
|
|
$
|
(10,342)
|
|
Adjustments to
reconcile net loss to net cash used in
operating activities:
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
8,118
|
|
|
|
9,806
|
|
Amortization of
acquired contract liability
|
|
|
(575)
|
|
|
|
(523)
|
|
Loss on sale of assets
and businesses
|
|
|
3,820
|
|
|
|
—
|
|
Other amortization
included in interest expense
|
|
|
1,368
|
|
|
|
1,562
|
|
Provision for credit
losses
|
|
|
534
|
|
|
|
200
|
|
Warrants remeasurement
gain
|
|
|
(8,001)
|
|
|
|
—
|
|
Share-based
compensation
|
|
|
3,622
|
|
|
|
1,578
|
|
Changes in other
assets and liabilities, excluding the effects of
acquisitions and divestitures:
|
|
|
|
|
|
|
Trade and other
receivables
|
|
|
32,519
|
|
|
|
4,474
|
|
Contract
assets
|
|
|
(10,180)
|
|
|
|
(8,638)
|
|
Inventories
|
|
|
(39,818)
|
|
|
|
(19,190)
|
|
Prepaid expenses and
other current assets
|
|
|
(1,830)
|
|
|
|
(7,538)
|
|
Accounts payable,
accrued expenses, and contract liabilities
|
|
|
(42,441)
|
|
|
|
(56,352)
|
|
Accrued pension and
other postretirement benefits
|
|
|
(1,262)
|
|
|
|
(8,322)
|
|
Other, net
|
|
|
3,155
|
|
|
|
255
|
|
Net cash used in
operating activities
|
|
|
(63,724)
|
|
|
|
(93,030)
|
|
Investing
Activities
|
|
|
|
|
|
|
Capital
expenditures
|
|
|
(6,401)
|
|
|
|
(3,044)
|
|
Payments on sale of
assets and businesses
|
|
|
(6,848)
|
|
|
|
(2,322)
|
|
Investment in joint
venture
|
|
|
(1,515)
|
|
|
|
—
|
|
Net cash used in
investing activities
|
|
|
(14,764)
|
|
|
|
(5,366)
|
|
Financing
Activities
|
|
|
|
|
|
|
Proceeds from issuance
of long-term debt
|
|
|
2,000
|
|
|
|
—
|
|
Retirement of debt and
finance lease obligations
|
|
|
(763)
|
|
|
|
(990)
|
|
Payment of deferred
financing costs
|
|
|
(1,438)
|
|
|
|
—
|
|
Payment of common stock
issuance costs, net of proceeds
|
|
|
(803)
|
|
|
|
—
|
|
Repurchase of shares
for share-based compensation
minimum tax obligation
|
|
|
(1,235)
|
|
|
|
(3,442)
|
|
Net cash used in
financing activities
|
|
|
(2,239)
|
|
|
|
(4,432)
|
|
Effect of exchange rate
changes on cash
|
|
|
(358)
|
|
|
|
(3,414)
|
|
Net change in cash and
cash equivalents
|
|
|
(81,085)
|
|
|
|
(106,242)
|
|
Cash and cash
equivalents at beginning of period
|
|
|
227,403
|
|
|
|
240,878
|
|
Cash and cash
equivalents at end of period
|
|
$
|
146,318
|
|
|
$
|
134,636
|
|
FINANCIAL DATA
(UNAUDITED)
|
|
TRIUMPH GROUP, INC.
AND SUBSIDIARIES
(dollars in
thousands)
|
|
|
|
Three Months
Ended
|
|
|
|
June
30,
|
|
SEGMENT
DATA
|
|
2023
|
|
|
2022
|
|
Net sales:
|
|
|
|
|
|
|
Systems &
Support
|
|
$
|
290,575
|
|
|
$
|
254,643
|
|
Interiors
|
|
|
36,583
|
|
|
|
94,753
|
|
Elimination of
inter-segment sales
|
|
|
(13)
|
|
|
|
(12)
|
|
|
|
$
|
327,145
|
|
|
$
|
349,384
|
|
Operating
income:
|
|
|
|
|
|
|
Systems &
Support
|
|
$
|
45,784
|
|
|
$
|
33,151
|
|
Interiors
|
|
|
(2,563)
|
|
|
|
(2,301)
|
|
Corporate
|
|
|
(20,912)
|
|
|
|
(14,538)
|
|
Share-based
compensation expense
|
|
|
(3,622)
|
|
|
|
(1,578)
|
|
|
|
$
|
18,687
|
|
|
$
|
14,734
|
|
Operating margin
%
|
|
|
|
|
|
|
Systems &
Support
|
|
|
15.8
|
%
|
|
|
13.0
|
%
|
Interiors
|
|
|
(7.0)
|
%
|
|
|
(2.4)
|
%
|
Consolidated
|
|
|
5.7
|
%
|
|
|
4.2
|
%
|
|
|
|
|
|
|
|
Depreciation and
amortization^:
|
|
|
|
|
|
|
Systems &
Support
|
|
$
|
6,940
|
|
|
$
|
7,521
|
|
Interiors
|
|
|
683
|
|
|
|
1,696
|
|
Corporate
|
|
|
495
|
|
|
|
589
|
|
|
|
$
|
8,118
|
|
|
$
|
9,806
|
|
Amortization of
acquired contract liabilities:
|
|
|
|
|
|
|
Systems &
Support
|
|
$
|
(575)
|
|
|
$
|
(523)
|
|
|
|
$
|
(575)
|
|
|
$
|
(523)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL DATA (UNAUDITED)
TRIUMPH
GROUP, INC. AND SUBSIDIARIES
(dollars in
thousands)
Non-GAAP Financial Measure Disclosures
We prepare and publicly release annual audited and quarterly
unaudited financial statements prepared in accordance with U.S.
GAAP. In accordance with Securities and Exchange Commission (the
"SEC") rules, we also disclose and discuss certain non-GAAP
financial measures in our public filings and earning releases.
Currently, the non-GAAP financial measures that we disclose are
Adjusted EBITDA, which is our net income (loss) before interest and
gains or losses on debt extinguishment, income taxes, amortization
of acquired contract liabilities, consideration payable to customer
related to divestitures, legal judgments and settlements,
gains/loss on divestitures, gains/losses on warrant remeasurements
and warrant-related transaction costs, share-based compensation
expense, depreciation and amortization (including impairment of
long-lived assets), other non-recurring impairments, and the
effects of certain pension charges such as curtailments,
settlements, withdrawals, and other early retirement incentives;
and Adjusted EBITDAP, which is Adjusted EBITDA, before pension
expense or benefit (excluding pension charges already adjusted in
Adjusted EBITDA). We disclose Adjusted EBITDA on a consolidated and
Adjusted EBITDAP on a consolidated and a reportable segment basis
in our earnings releases, investor conference calls and filings
with the SEC. The non-GAAP financial measures that we use may not
be comparable to similarly titled measures reported by other
companies. Also, in the future, we may disclose different non-GAAP
financial measures in order to help our investors more meaningfully
evaluate and compare our future results of operations with our
previously reported results of operations.
We view Adjusted EBITDA and Adjusted EBITDAP as operating
performance measures and, as such, we believe that the U.S. GAAP
financial measure most directly comparable to such measures is net
income (loss). In calculating Adjusted EBITDA and Adjusted EBITDAP,
we exclude from net income (loss) the financial items that we
believe should be separately identified to provide additional
analysis of the financial components of the day-to-day operation of
our business. We have outlined below the type and scope of these
exclusions and the material limitations on the use of these
non-GAAP financial measures as a result of these exclusions.
Adjusted EBITDA and Adjusted EBITDAP are not measurements of
financial performance under U.S. GAAP and should not be considered
as a measure of liquidity, as an alternative to net income (loss),
or as an indicator of any other measure of performance derived in
accordance with U.S. GAAP. Investors and potential investors in our
securities should not rely on Adjusted EBITDA or Adjusted EBITDAP
as a substitute for any U.S. GAAP financial measure, including net
income (loss). In addition, we urge investors and potential
investors in our securities to carefully review the reconciliation
of Adjusted EBITDA and Adjusted EBITDAP to net income (loss) set
forth below, in our earnings releases, and in other filings with
the SEC and to carefully review the U.S. GAAP financial information
included as part of our Quarterly Reports on Form 10-Q and our
Annual Reports on Form 10-K that are filed with the SEC, as well as
our quarterly earnings releases, and compare the U.S. GAAP
financial information with our Adjusted EBITDA and Adjusted
EBITDAP.
Adjusted EBITDA and Adjusted EBITDAP are used by management to
internally measure our operating and management performance and by
investors as a supplemental financial measure to evaluate the
performance of our business that, when viewed with our U.S. GAAP
results and the accompanying reconciliation, we believe provides
additional information that is useful to gain an understanding of
the factors and trends affecting our business. We have spent more
than 20 years expanding our product and service capabilities,
partially through acquisitions of complementary businesses. Due to
the expansion of our operations, which included acquisitions, our
net income (loss) has included significant charges for depreciation
and amortization. Adjusted EBITDA and Adjusted EBITDAP exclude
these charges and provide meaningful information about the
operating performance of our business, apart from charges for
depreciation and amortization. We believe the disclosure of
Adjusted EBITDA and Adjusted EBITDAP helps investors meaningfully
evaluate and compare our performance from quarter to quarter and
from year to year. We also believe Adjusted EBITDA and Adjusted
EBITDAP are measures of our ongoing operating performance because
the isolation of noncash charges, such as depreciation and
amortization, and nonoperating items, such as interest, income
taxes, pension and other postretirement benefits, provides
additional information about our cost structure and, over time,
helps track our operating progress. In addition, investors,
securities analysts, and others have regularly relied on Adjusted
EBITDA and Adjusted EBITDAP to provide financial measures by which
to compare our operating performance against that of other
companies in our industry.
FINANCIAL DATA (UNAUDITED)
TRIUMPH
GROUP, INC. AND SUBSIDIARIES
(dollars in
thousands)
Set forth below are descriptions of the financial items that
have been excluded from our net income to calculate Adjusted EBITDA
and Adjusted EBITDAP and the material limitations associated with
using these non-GAAP financial measures as compared with net income
from continuing operations:
- Gains or losses from sale of assets and businesses may be
useful for investors to consider because they reflect gains or
losses from sale of operating units or other assets. We do not
believe these earnings necessarily reflect the current and ongoing
cash earnings related to our operations.
- Warrants remeasurement gains or losses and Warrant-related
transaction costs may be useful for investors to consider because
they reflect the mark-to-market changes in the fair value of our
Warrants and the costs associated with Warrants issuance or
settlement. We do not believe these earnings necessarily reflect
the current and ongoing cash earnings related to our
operations.
- Consideration payable to a customer related to a divestiture
may be useful for investors to consider because it reflects
consideration paid to facilitate the ultimate sale of operating
units. We do not believe these charges necessarily reflect the
current and ongoing cash earnings related to our operations.
- Shareholder cooperation expenses may be useful for investors to
consider because they represent certain costs of corporate
governance that may be incurred periodically when reaching
cooperative agreements with shareholders. We do not believe these
charges necessarily reflect the current and ongoing cash earnings
related to our operations.
- Legal judgments and settlements, when applicable, may be useful
for investors to consider because it reflects gains or losses from
disputes with third parties. We do not believe these earnings
necessarily reflect the current and ongoing cash earnings related
to our operations.
- Non-service defined benefit income or expense from our pension
and other postretirement benefit plans (inclusive of certain
pension related transactions such as curtailments, settlements,
withdrawal, and early retirement or other incentives) may be useful
for investors to consider because they represent the cost of
postretirement benefits to plan participants, net of the assumption
of returns on the plan's assets and are not indicative of the cash
paid for such benefits. We do not believe these earnings
necessarily reflect the current and ongoing cash earnings related
to our operations.
- Amortization of acquired contract liabilities may be useful for
investors to consider because it represents the noncash earnings on
the fair value of off-market contracts acquired through
acquisitions. We do not believe these earnings necessarily reflect
the current and ongoing cash earnings related to our
operations.
- Amortization expense and nonrecurring asset impairments
(including goodwill, intangible asset impairments, and nonrecurring
rotable inventory impairments) may be useful for investors to
consider because it represents the estimated attrition of our
acquired customer base and the diminishing value of trade names,
product rights, licenses, or, in the case of goodwill, other assets
that are not individually identified and separately recognized
under U.S. GAAP, or, in the case of nonrecurring asset impairments,
the impact of unusual and nonrecurring events affecting the
estimated recoverability of existing assets. We do not believe
these charges necessarily reflect the current and ongoing cash
charges related to our operating cost structure.
- Depreciation may be useful for investors to consider because it
generally represents the wear and tear on our property and
equipment used in our operations. We do not believe these charges
necessarily reflect the current and ongoing cash charges related to
our operating cost structure.
- Share-based compensation may be useful for investors to
consider because it represents a portion of the total compensation
to management and the board of directors. We do not believe these
charges necessarily reflect the current and ongoing cash charges
related to our operating cost structure.
FINANCIAL DATA (UNAUDITED)
TRIUMPH
GROUP, INC. AND SUBSIDIARIES
(dollars in
thousands)
- The amount of interest expense and other, as well as debt
extinguishment gains or losses, we incur may be useful for
investors to consider and may result in current cash inflows or
outflows. However, we do not consider the amount of interest
expense and other and debt extinguishment gains or losses to be a
representative component of the day-to-day operating performance of
our business.
- Income tax expense may be useful for investors to consider
because it generally represents the taxes which may be payable for
the period and the change in deferred income taxes during the
period and may reduce the amount of funds otherwise available for
use in our business. However, we do not consider the amount of
income tax expense to be a representative component of the
day-to-day operating performance of our business.
Management compensates for the above-described limitations of
using non-GAAP measures by using a non-GAAP measure only to
supplement our GAAP results and to provide additional information
that is useful to gain an understanding of the factors and trends
affecting our business.
The following table shows our Adjusted EBITDA and Adjusted
EBITDAP reconciled to our net income for the indicated periods (in
thousands):
|
|
Three Months
Ended
|
|
|
|
June
30,
|
|
Adjusted Earnings
before Interest, Taxes, Depreciation,
Amortization, and Pension (Adjusted EBITDAP):
|
|
2023
|
|
|
2022
|
|
Net loss
|
|
$
|
(12,753)
|
|
|
$
|
(10,342)
|
|
Add-back:
|
|
|
|
|
|
|
Income tax
expense
|
|
|
1,750
|
|
|
|
1,750
|
|
Interest expense and
other, net
|
|
|
38,447
|
|
|
|
31,912
|
|
Debt extinguishment
losses
|
|
|
64
|
|
|
|
—
|
|
Warrant remeasurement
gain
|
|
|
(8,001)
|
|
|
|
—
|
|
Consideration payable
to customer related to divestiture
|
|
|
—
|
|
|
|
17,185
|
|
Shareholder
cooperation expenses
|
|
|
1,905
|
|
|
|
—
|
|
Loss on sales of
assets and businesses, net
|
|
|
3,820
|
|
|
|
—
|
|
Share-based
compensation
|
|
|
3,622
|
|
|
|
1,578
|
|
Amortization of
acquired contract liabilities
|
|
|
(575)
|
|
|
|
(523)
|
|
Depreciation and
amortization
|
|
|
8,118
|
|
|
|
9,806
|
|
Adjusted Earnings
before Interest, Taxes, Depreciation
and Amortization ("Adjusted EBITDA")
|
|
$
|
36,397
|
|
|
$
|
51,366
|
|
Non-service defined
benefit income (excluding settlements)
|
|
|
(820)
|
|
|
|
(8,586)
|
|
Adjusted Earnings
before Interest, Taxes, Depreciation
and Amortization, and Pension ("Adjusted
EBITDAP")
|
|
$
|
35,577
|
|
|
$
|
42,780
|
|
Net sales
|
|
$
|
327,145
|
|
|
$
|
349,384
|
|
Net income
margin
|
|
|
(3.9)
|
%
|
|
|
(3.0)
|
%
|
Adjusted EBITDAP
margin
|
|
|
10.9
|
%
|
|
|
11.7
|
%
|
|
|
|
|
|
|
|
FINANCIAL DATA
(UNAUDITED)
|
|
TRIUMPH GROUP, INC.
AND SUBSIDIARIES (dollars in thousands)
|
|
|
|
Three Months Ended
June 30, 2023
|
|
|
|
|
|
|
Segment
Data
|
|
Adjusted Earnings
before Interest, Taxes, Depreciation,
Amortization, and Pension (EBITDAP):
|
|
Total
|
|
|
Systems &
Support
|
|
|
Interiors
|
|
|
Corporate/
Eliminations*
|
|
Net loss
|
|
$
|
(12,753)
|
|
|
|
|
|
|
|
|
|
|
Add-back:
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-service defined
benefit income
|
|
|
(820)
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
|
1,750
|
|
|
|
|
|
|
|
|
|
|
Warrant remeasurement
gain, net
|
|
|
(8,001)
|
|
|
|
|
|
|
|
|
|
|
Debt extinguishment
losses
|
|
|
64
|
|
|
|
|
|
|
|
|
|
|
Interest expense and
other, net
|
|
|
38,447
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
$
|
18,687
|
|
|
$
|
45,784
|
|
|
$
|
(2,563)
|
|
|
$
|
(24,534)
|
|
Loss on sales of
assets & businesses, net
|
|
|
3,820
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3,820
|
|
Shareholder
cooperation expenses
|
|
|
1,905
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,905
|
|
Share-based
compensation
|
|
|
3,622
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3,622
|
|
Amortization of
acquired contract liabilities
|
|
|
(575)
|
|
|
|
(575)
|
|
|
|
—
|
|
|
|
—
|
|
Depreciation and
amortization
|
|
|
8,118
|
|
|
|
6,940
|
|
|
|
683
|
|
|
|
495
|
|
Adjusted Earnings
(Losses) before Interest, Taxes,
Depreciation and Amortization, and Pension
("Adjusted EBITDAP")
|
|
$
|
35,577
|
|
|
$
|
52,149
|
|
|
$
|
(1,880)
|
|
|
$
|
(14,692)
|
|
Net sales
|
|
$
|
327,145
|
|
|
$
|
290,575
|
|
|
$
|
36,583
|
|
|
$
|
(13)
|
|
Adjusted EBITDAP
margin
|
|
|
10.9
|
%
|
|
|
18.0
|
%
|
|
|
(5.1)
|
%
|
|
n/a
|
|
FINANCIAL DATA
(UNAUDITED)
|
|
TRIUMPH GROUP, INC.
AND SUBSIDIARIES (dollars in thousands)
|
|
Non-GAAP Financial
Measure Disclosures (continued)
|
|
|
|
Three Months Ended
June 30, 2022
|
|
|
|
|
|
|
Segment
Data
|
|
Adjusted Earnings before Interest, Taxes,
Depreciation,
Amortization, and Pension (EBITDAP):
|
|
Total
|
|
|
Systems &
Support
|
|
|
Interiors
|
|
|
Corporate/
Eliminations*
|
|
Net loss
|
|
$
|
(10,342)
|
|
|
|
|
|
|
|
|
|
|
Add-back:
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-service defined
benefit income
|
|
|
(8,586)
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
|
1,750
|
|
|
|
|
|
|
|
|
|
|
Interest expense and
other, net
|
|
|
31,912
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
$
|
14,734
|
|
|
$
|
33,151
|
|
|
$
|
(2,301)
|
|
|
$
|
(16,116)
|
|
Consideration payable
to customer related to divestiture
|
|
|
17,185
|
|
|
|
—
|
|
|
|
17,185
|
|
|
|
—
|
|
Share-based
compensation
|
|
|
1,578
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,578
|
|
Amortization of
acquired contract liabilities
|
|
|
(523)
|
|
|
|
(523)
|
|
|
|
—
|
|
|
|
—
|
|
Depreciation and
amortization
|
|
|
9,806
|
|
|
|
7,521
|
|
|
|
1,696
|
|
|
|
589
|
|
Adjusted Earnings
(Losses) before Interest, Taxes,
Depreciation and Amortization, and Pension
("Adjusted EBITDAP")
|
|
$
|
42,780
|
|
|
$
|
40,149
|
|
|
$
|
16,580
|
|
|
$
|
(13,949)
|
|
Net sales
|
|
$
|
349,384
|
|
|
$
|
254,643
|
|
|
$
|
94,753
|
|
|
$
|
(12)
|
|
Adjusted EBITDAP
margin
|
|
|
11.7
|
%
|
|
|
15.8
|
%
|
|
|
14.8
|
%
|
|
n/a
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL DATA (UNAUDITED)
TRIUMPH
GROUP, INC. AND SUBSIDIARIES
(dollars in
thousands)
Non-GAAP Financial Measure Disclosures (continued)
Adjusted income from continuing operations, before income taxes,
adjusted income from continuing operations and adjusted income from
continuing operations per diluted share, before non-recurring costs
have been provided for consistency and comparability. These
measures should not be considered in isolation or as alternatives
to income from continuing operations before income taxes, income
from continuing operations and income from continuing operations
per diluted share presented in accordance with GAAP. The
following tables reconcile income from continuing operations before
income taxes, income from continuing operations, and income from
continuing operations per diluted share, before non-recurring
costs.
|
|
Three Months
Ended
June 30, 2023
|
|
|
|
Pre-Tax
|
|
|
After-Tax
|
|
|
Diluted
EPS
|
|
Loss from continuing
operations - GAAP
|
|
$
|
(11,003)
|
|
|
$
|
(12,753)
|
|
|
$
|
(0.19)
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Loss on sale of assets
and businesses, net
|
|
|
3,820
|
|
|
|
3,820
|
|
|
|
0.06
|
|
Shareholder cooperation
expenses
|
|
|
1,905
|
|
|
|
1,905
|
|
|
|
0.03
|
|
Debt extinguishment
losses
|
|
|
64
|
|
|
|
64
|
|
|
|
0.00
|
|
Adjusted loss from
continuing operations - non-GAAP
|
|
$
|
(5,214)
|
|
|
$
|
(6,964)
|
|
|
$
|
(0.10)
|
|
FINANCIAL DATA
(UNAUDITED)
|
|
TRIUMPH GROUP, INC.
AND SUBSIDIARIES
(dollars in
thousands)
|
|
|
|
Three Months
Ended
June 30, 2022
|
|
|
|
Pre-Tax
|
|
|
After-Tax
|
|
|
Diluted
EPS
|
|
Loss from continuing
operations - GAAP
|
|
$
|
(8,592)
|
|
|
$
|
(10,342)
|
|
|
$
|
(0.16)
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Restructuring costs
(cash based)
|
|
|
699
|
|
|
|
699
|
|
|
|
0.01
|
|
Consideration payable
to customer related to divestiture^
|
|
|
17,185
|
|
|
|
17,185
|
|
|
|
0.26
|
|
Adjusted income from
continuing operations - non-GAAP*
|
|
$
|
9,292
|
|
|
$
|
7,542
|
|
|
$
|
0.12
|
|
*Difference due to
rounding.
|
|
|
|
|
|
|
|
|
|
^Recorded in net
sales.
|
|
|
|
|
|
|
|
|
|
Non-GAAP Financial Measure Disclosures (continued)
Adjusted Operating Income is defined as GAAP Operating Income,
less expenses/gains associated with the Company's transformation,
such as restructuring expenses, gains/losses on divestitures,
impairments of goodwill and other assets. Management believes that
this is useful in evaluating operating performance, but this
measure should not be used in isolation. The following table
reconciles our Operating income to Adjusted Operating income as
noted above.
|
|
Three Months
Ended
June 30,
|
|
|
|
2023
|
|
|
2022
|
|
Operating income -
GAAP
|
|
$
|
18,687
|
|
|
$
|
14,734
|
|
Adjustments:
|
|
|
|
|
|
|
Loss on sale of assets
and businesses, net
|
|
|
3,820
|
|
|
|
—
|
|
Restructuring costs
(cash based)
|
|
|
—
|
|
|
|
699
|
|
Shareholder cooperation
expenses
|
|
|
1,905
|
|
|
|
—
|
|
Consideration payable
to customer related to divestiture
|
|
|
—
|
|
|
|
17,185
|
|
Adjusted operating
income - non-GAAP
|
|
$
|
24,412
|
|
|
$
|
32,618
|
|
Adjusted operating
margin - non-GAAP
|
|
|
7.5
|
%
|
|
|
8.9
|
%
|
|
|
Fiscal
2024
|
($ in
millions)
|
|
Guidance
|
Operating
Income
|
|
$159.0 -
$174.0
|
Adjustments:
|
|
|
Loss on sale of assets
and businesses
|
|
$4.0
|
Shareholder cooperation
expenses
|
|
$2.0
|
Depreciation &
Amortization
|
|
$38.0
|
Amortization of
acquired contract liabilities
|
|
($3.0)
|
Share-based
compensation
|
|
$10.0
|
Adjusted EBITDAP -
non-GAAP
|
|
$210.0 -
$225.0
|
FINANCIAL DATA (UNAUDITED)
TRIUMPH
GROUP, INC. AND SUBSIDIARIES
(dollars in
thousands)
Cash provided by operations, is provided for consistency and
comparability. We also use free cash flow as a key factor in
planning for and consideration of strategic acquisitions and the
repayment of debt. This measure should not be considered in
isolation, as a measure of residual cash flow available for
discretionary purposes, or as an alternative to operating results
presented in accordance with GAAP. The following table reconciles
cash provided by operations to free cash flow.
|
|
Three Months
Ended
June 30,
|
|
|
Fiscal 2024
Guidance
|
$ in
millions
|
|
2023
|
|
|
2022
|
|
|
|
Cash used in operating
activities
|
|
$
|
(63.7)
|
|
|
$
|
(93.0)
|
|
|
$ 60.0 -
$ 80.0
|
Less:
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
|
(6.4)
|
|
|
|
(3.0)
|
|
|
$ (25.0) - $
(30.0)
|
Free cash (use)
flow*
|
|
$
|
(70.1)
|
|
|
$
|
(96.1)
|
|
|
$ 35.0 - $
50.0
|
* Differences due to
rounding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
View original
content:https://www.prnewswire.com/news-releases/triumph-reports-preliminary-first-quarter-fiscal-2024-results-301891183.html
SOURCE Triumph Group