TGI Triumph Group Inc

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 07, 2023

 

 

TRIUMPH GROUP, INC.

(Exact name of Registrant as Specified in Its Charter)

 

 

Delaware			1-12235	51-0347963
(State or Other Jurisdiction of Incorporation)			(Commission File Number)	(IRS Employer Identification No.)
555 E Lancaster Avenue Suite 400
Radnor, Pennsylvania				19087
(Address of Principal Executive Offices)				(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: 610 251-1000

 

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $.001 per share		TGI		New York Stock Exchange LLC
Purchase rights		N/A		New York Stock Exchange LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

---

 

Item 2.02 Results of Operations and Financial Condition.

On February 7, 2023, Triumph Group, Inc. issued a press release announcing its financial results for the third quarter of the fiscal year ending March 31, 2024 and conducted a conference call to further discuss the financial results. The full text of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

 

Following this issuance of the noted press release, management identified a typographical error, which originally stated: “Reaffirmed cash flow from operations of $65.0 million to $85.0 million, free cash flow of $40.0 million to $65.0 million, subject to the timing of closing of the sale of Product Support”; and has been corrected to state: “Reaffirmed cash flow from operations of $65.0 million to $85.0 million, free cash flow of $40.0 million to $55.0 million, subject to the timing of closing of the sale of Product Support”.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

 

Exhibit No.		Description
99.1		Press release dated February 7, 2023
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

 

---

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

			Triumph Group, Inc.
Date:	November 7, 2023	By:	/s/ Thomas A. Quigley, III
			Thomas A. Quigley, III, Vice President, Investor Relations, Mergers & Acquisitions, and Treasurer

 

 

---

Exhibit 99.1

 

 

 

NEWS RELEASE

 

Contact: April Harper Director, Marketing & Communications Phone (610) 251-1000 aharper@triumphgroup.com			Thomas A. Quigley, III VP, Investor Relations, Mergers & Acquisition and Treasurer Phone (610) 251-1000 tquigley@triumphgroup.com

 

TRIUMPH REPORTS THIRD QUARTER FISCAL 2024 RESULTS

UPDATING GUIDANCE FOR PRODUCT SUPPORT SALE

RADNOR, Pa. – February 7, 2024 – Triumph Group, Inc. (NYSE: TGI) ("TRIUMPH" or the “Company”) today reported financial results for its third quarter of fiscal 2024, which ended December 31, 2023.

 

Third Quarter Fiscal 2024

 

Fiscal 2024 Guidance

 

“The announced sale of our Product Support business will be transformative for our balance sheet and is on track for closure this quarter which will meaningfully accelerate our deleveraging progress,” said Dan Crowley, TRIUMPH's chairman, president and chief executive officer. “Following the divestiture, we are right sizing our cost structure to achieve our multi-year profit margin and cash flow targets. By strengthening our balance sheet and focusing on our OEM component, spares and IP-based aftermarket business, TRIUMPH will further improve its capacity to win and profitably grow in the expanding markets we serve."

"TRIUMPH generated its seventh consecutive quarter of year over year organic sales growth benefiting from increased commercial OEM production rates. TRIUMPH generated positive free cash flow in the quarter, although earnings and

---

cash were lower than planned due to a finite set of industry-wide supply chain constraints which impacted deliveries in the quarter. We expect a very strong fourth quarter that benefits from deferred deliveries, historical seasonality, improving mix and incremental price improvements as well as working capital investments we made in the first half of the year.”

Mr. Crowley continued, “TRIUMPH accelerated new business capture with a year-to-date book to bill rate of 1.34, lifting our backlog 20% year over year to the highest level since March 2020. Going forward, the new TRIUMPH will deliver top and bottom-line growth rates at or above the market as we benefit from a focus on OEM and related aftermarket product lines.”

 

Third Quarter Fiscal 2024 Overview

 

		Three Months Ended December 31,
($ in millions)		2023				2022
Commercial OEM		$	142.3			$	120.0
Military OEM			61.1				61.7
Total OEM Revenue			203.4				181.7
Commercial Aftermarket			35.1				30.9
Military Aftermarket			38.3				39.1
Total Aftermarket Revenue			73.4				70.0
Non-Aviation Revenue			7.3				9.5
Amortization of acquired contract liabilities			0.8				0.4
Total Net Sales*		$	285.0			$	261.7
* 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 $30.7 million, or 27.5% primarily on production volumes on Boeing 737 and 787 programs.

Military OEM sales decreased from prior year as decreased sales on military rotorcraft were partially offset by increased volume on other military programs, including fixed wing platforms.

Aftermarket sales include both repair and overhaul services as well as the sales of spare parts. Commercial Aftermarket sales increased $4.2 million, or 13.8%, driven by the continued improvement in overall air travel metrics, favorably impacting both repair and overhaul services and spare part sales. The impacts from divestitures and exited or sunsetting programs on Commercial aftermarket sales was not significant.

Military aftermarket sales decreased primarily on reduced repair and overhaul sales on the UH-60 platform.

 

TRIUMPH's results included the following:

($ millions except EPS)		Pre-tax				After-tax				Diluted EPS
Loss from Continuing Operations - GAAP		$	(10.8	)		$	(11.9	)		$	(0.15	)
Adjustments
Debt extinguishment gain			(1.0	)			(1.0	)			(0.01	)
Adjusted Income from Continuing Operations - non-GAAP		$	(11.8	)		$	(12.9	)		$	(0.16	)

The number of shares used in computing diluted income per share for the third quarter of 2024 was 76.9 million.

 

Backlog, which represents the next 24 months of actual purchase orders with firm delivery dates or contract requirements, was $1.87 billion, up 18% from prior fiscal year end. This increase was primarily on commercial OEM platforms.

 

For the third quarter of fiscal 2024, cash flow provided by operations was $27.6 million, which was in line with expectations previously provided.

 

 

---

Conference Call

TRIUMPH will hold a conference call today, February 7th, at 8:30 a.m. (ET) to discuss the third 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 February 7th to February 13th by calling (844) 344-7529 (Domestic) or (412) 317-0088 (International), passcode #7026058.

 

About TRIUMPH

TRIUMPH, headquartered in Radnor, Pennsylvania, designs, develops, 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) ON FOLLOWING PAGES

 

 

---

FINANCIAL DATA (UNAUDITED)

TRIUMPH GROUP, INC. AND SUBSIDIARIES

(in thousands, except per share data)

 

		Three Months Ended								Nine Months Ended
		December 31,								December 31,
CONDENSED STATEMENTS OF OPERATIONS		2023				2022				2023				2022
Net sales		$	284,955			$	261,662			$	833,456			$	805,104
Cost of sales (excluding depreciation shown below)			214,972				190,014				618,742				588,009
Selling, general & administrative			42,846				39,497				135,479				142,019
Depreciation & amortization			7,383				7,798				22,062				24,473
Legal judgment loss			—				—				1,338				—
Restructuring costs			43				—				1,985				1,074
Loss (gain) on sale of assets and businesses, net			—				720				12,208				(103,163	)
Operating income			19,711				23,633				41,642				152,692
Interest expense and other, net			32,419				30,769				94,354				83,262
Debt modification and extinguishment (gain) loss			(1,046	)			1,441				(5,125	)			1,441
Warrant remeasurement gain			—				(5,537	)			(8,545	)			(5,537	)
Non-service defined benefit income			(820	)			(8,576	)			(2,460	)			(25,725	)
Income tax expense			1,069				24				3,348				2,669
(Loss) income from continuing operations			(11,911	)			5,512				(39,930	)			96,582
(Loss) income from discontinued operations, net of tax			(3,991	)			5,440				4,569				10,554
Net (loss) income		$	(15,902	)		$	10,952			$	(35,361	)		$	107,136
(Loss) earnings per share - basic:
Net (loss) income - continuing operations		$	(0.15	)		$	0.09			$	(0.55	)		$	1.49
Net (loss) income- discontinued operations			(0.05	)			0.08				0.06				0.16
(Loss) earnings per share - basic		$	(0.20	)		$	0.17			$	(0.49	)		$	1.65
Weighted average common shares outstanding - basic			76,895				65,066				73,200				64,969
(Loss) earnings per share - diluted:
Net (loss) income- continuing operations		$	(0.15	)		$	—			$	(0.55	)		$	1.37
Net (loss) income- discontinued operations			(0.05	)			0.08				0.06				0.16
(Loss) earnings per share - diluted		$	(0.20	)		$	0.08			$	(0.49	)		$	1.53
Weighted average common shares outstanding - diluted			76,895				68,454				73,200				66,346

 

 

---

(Continued)

FINANCIAL DATA (UNAUDITED)

TRIUMPH GROUP, INC. AND SUBSIDIARIES

(dollars in thousands, except share data)

 

BALANCE SHEETS		Unaudited December 31, 2023				Audited March 31, 2023
Assets
Cash and cash equivalents		$	162,899			$	227,403
Accounts receivable, net			127,494				156,116
Contract assets			89,406				86,740
Inventory, net			352,188				309,084
Prepaid and other current assets			16,578				14,073
Assets held for sale			180,642				140,096
Current assets			929,207				933,512
Property and equipment, net			141,583				138,622
Goodwill			511,571				509,449
Intangible assets, net			67,308				73,898
Other, net			26,913				28,697
Assets held for sale - noncurrent			—				30,666
Total assets		$	1,676,582			$	1,714,844
Liabilities & Stockholders' Deficit
Current portion of long-term debt		$	3,342			$	3,162
Accounts payable			133,550				173,575
Contract liabilities			40,182				44,095
Accrued expenses			140,092				141,679
Liabilities related to assets held for sale			32,216				34,413
Current liabilities			349,382				396,924
Long-term debt, less current portion			1,627,810				1,688,620
Accrued pension and post-retirement benefits, noncurrent			301,661				359,375
Deferred income taxes, noncurrent			7,356				7,268
Other noncurrent liabilities			60,653				59,988
Liabilities related to assets held for sale - noncurrent			—				65
Stockholders' Deficit:
Common stock, $.001 par value, 200,000,000 and 100,000,000 shares authorized, 76,856,572 and 65,432,589 shares issued			77				65
Capital in excess of par value			1,107,241				964,741
Treasury stock, at cost, 631 and 0 shares			(5	)			—
Accumulated other comprehensive loss			(534,676	)			(554,646	)
Accumulated deficit			(1,242,917	)			(1,207,556	)
Total stockholders' deficit			(670,280	)			(797,396	)
Total liabilities and stockholders' deficit		$	1,676,582			$	1,714,844

 

 

---

(Continued)

FINANCIAL DATA (UNAUDITED)

TRIUMPH GROUP, INC. AND SUBSIDIARIES

(dollars in thousands)

 

		Nine Months Ended December 31,
		2023				2022
Operating Activities
Net (loss) income		$	(35,361	)		$	107,136
Adjustments to reconcile net (loss) income to net cash used in    operating activities:
Depreciation and amortization			25,688				27,115
Amortization of acquired contract liability			(1,951	)			(1,832	)
Loss (gain) on sale of assets and businesses			12,208				(103,163	)
Gain on modification and extinguishment of debt			(5,125	)			—
Other amortization included in interest expense			4,458				4,857
Provision for credit losses			855				495
Warrants remeasurement gain			(8,545	)			(6,435	)
Share-based compensation			8,788				6,420
Changes in other assets and liabilities, excluding the effects of    acquisitions and divestitures:
Trade and other receivables			16,926				(8,579	)
Contract assets			(4,144	)			(14,667	)
Inventories			(49,545	)			(39,829	)
Prepaid expenses and other current assets			(880	)			839
Accounts payable, accrued expenses, and contract liabilities			(30,502	)			(63,014	)
Accrued pension and other postretirement benefits			(3,352	)			(25,647	)
Other, net			2,207				4,013
Net cash used in operating activities			(68,275	)			(112,291	)
Investing Activities
Capital expenditures			(16,258	)			(12,274	)
Payments on sale of assets and businesses			(6,840	)			(6,160	)
Investment in joint venture			(1,658	)			—
Net cash used in investing activities			(24,756	)			(18,434	)
Financing Activities
Proceeds from issuance of long-term debt			2,000				—
Retirement of debt and finance lease obligations			(50,585	)			(1,809	)
Payment of deferred financing costs			(1,728	)			—
Proceeds on issuance of common stock, net of issuance costs			79,961				—
Repurchase of shares for share-based compensation    minimum tax obligation			(1,287	)			(3,490	)
Net cash provided by (used in) financing activities			28,361				(5,299	)
Effect of exchange rate changes on cash			166				(5,425	)
Net change in cash and cash equivalents			(64,504	)			(141,449	)
Cash and cash equivalents at beginning of period			227,403				240,878
Cash and cash equivalents at end of period		$	162,899			$	99,429

 

 

---

(CONTINUED)

FINANCIAL DATA (UNAUDITED)

TRIUMPH GROUP, INC. AND SUBSIDIARIES

(dollars in thousands)

 

		Three Months Ended								Nine Months Ended
		December 31,								December 31,
SEGMENT DATA		2023				2022				2023				2022
Net sales:
Systems & Support		$	241,109			$	218,196			$	718,238			$	633,678
Interiors			44,080				43,606				115,955				171,769
Elimination of inter-segment sales			(234	)			(140	)			(737	)			(343	)
		$	284,955			$	261,662			$	833,456			$	805,104
Operating income (loss):
Systems & Support		$	33,846			$	31,586			$	111,898			$	90,308
Interiors			(2,124	)			5,022				(8,048	)			8,645
Corporate			(10,569	)			(12,085	)			(53,420	)			60,159
Share-based compensation expense			(1,442	)			(890	)			(8,788	)			(6,420	)
		$	19,711			$	23,633			$	41,642			$	152,692
Operating margin %
Systems & Support			14.0	%			14.5	%			15.6	%			14.3	%
Interiors			(4.8	%)			11.5	%			(6.9	%)			5.0	%
Consolidated			6.9	%			9.0	%			5.0	%			19.0	%
Depreciation and amortization^:
Systems & Support		$	6,393			$	6,593			$	18,805			$	19,805
Interiors			584				691				1,911				3,059
Corporate			406				514				1,346				1,609
		$	7,383			$	7,798			$	22,062			$	24,473
Amortization of acquired contract liabilities:
Systems & Support		$	(800	)		$	(442	)		$	(1,965	)		$	(1,832	)
		$	(800	)		$	(442	)		$	(1,965	)		$	(1,832	)

 

 

 

---

(Continued)

FINANCIAL DATA (UNAUDITED)

TRIUMPH GROUP, INC, AND SUBSIDIARES

(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 income (loss) from continuing operations 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 income (loss) from continuing operations. In calculating Adjusted EBITDA and Adjusted EBITDAP, we exclude from income (loss) from continuing operations 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 income (loss) from continuing operations, 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 income (loss) from continuing operations. In addition, we urge investors and potential investors in our securities to carefully review the reconciliation of Adjusted EBITDA and Adjusted EBITDAP to income (loss) from continuing operations 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 income (loss) from continuing operations 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.

 

 

 

---

(Continued)

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 income (loss) from continuing operations) to calculate Adjusted EBITDA and Adjusted EBITDAP and the material limitations associated with using these non-GAAP financial measures as compared with income (loss) from continuing operations:

 

 

---

(Continued)

FINANCIAL DATA (UNAUDITED)

TRIUMPH GROUP, INC. AND SUBSIDIARIES

(dollars in thousands)

 

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 income (loss) from continuing operations for the indicated periods (in thousands):

		Three Months Ended								Nine Months Ended
		December 31,								December 31,
Adjusted Earnings before Interest, Taxes, Depreciation, Amortization, and Pension (Adjusted EBITDAP):		2023				2022				2023				2022
(Loss) income from continuing operations		$	(11,911	)		$	5,512			$	(39,930	)		$	96,582
Add-back:
Income tax expense			1,069				24				3,348				2,669
Interest expense and other, net			32,419				30,769				94,354				83,262
Debt modification and extinguishment (gain) loss			(1,046	)			1,441				(5,125	)			1,441
Warrant remeasurement gain			—				(5,537	)			(8,545	)			(5,537	)
Legal judgment loss			—				—				1,338				—
Consideration payable to customer related to divestiture			—				—				—				17,185
Shareholder cooperation expenses			—				—				1,905				—
Loss (gain) on sales of assets and businesses, net			—				720				12,208				(103,163	)
Share-based compensation			1,442				890				8,788				6,420
Amortization of acquired contract liabilities			(800	)			(442	)			(1,965	)			(1,832	)
Depreciation and amortization			7,383				7,798				22,062				24,473
Adjusted Earnings before Interest, Taxes, Depreciation    and Amortization ("Adjusted EBITDA")		$	28,556			$	41,175			$	88,438			$	121,500
Non-service defined benefit income (excluding settlements)			(820	)			(8,576	)			(2,460	)			(25,725	)
Adjusted Earnings before Interest, Taxes, Depreciation    and Amortization, and Pension ("Adjusted EBITDAP")		$	27,736			$	32,599			$	85,978			$	95,775
Net sales		$	284,955			$	261,662			$	833,456			$	805,104
(Loss) income from continuing operations margin			(4.2	%)			2.1	%			(4.8	%)			12.0	%
Adjusted EBITDAP margin			9.8	%			12.5	%			10.3	%			11.7	%

 

 

 

---

(Continued)

FINANCIAL DATA (UNAUDITED)

TRIUMPH GROUP, INC. AND SUBSIDIARIES

(dollars in thousands)

 

		Three Months Ended December 31, 2023
						Segment Data
Adjusted Earnings before Interest, Taxes, Depreciation, Amortization, and Pension (EBITDAP):		Total				Systems & Support				Interiors				Corporate/ Eliminations*
Loss from continuing operations		$	(11,911	)
Add-back:
Non-service defined benefit income			(820	)
Income tax expense			1,069
Debt extinguishment gain			(1,046	)
Interest expense and other, net			32,419
Operating income (loss)		$	19,711			$	33,846			$	(2,124	)		$	(12,011	)
Share-based compensation			1,442				—				—				1,442
Amortization of acquired contract liabilities			(800	)			(800	)			—				—
Depreciation and amortization			7,383				6,393				584				406
Adjusted Earnings (Losses) before Interest, Taxes,    Depreciation and Amortization, and Pension    ("Adjusted EBITDAP")		$	27,736			$	39,439			$	(1,540	)		$	(10,163	)
Net sales		$	284,955			$	241,109			$	44,080			$	(234	)
Adjusted EBITDAP margin			9.8	%			16.4	%			(3.5	%)		n/a

 

		Nine Months Ended December 31, 2023
						Segment Data
Adjusted Earnings before Interest, Taxes, Depreciation, Amortization, and Pension (EBITDAP):		Total				Systems & Support				Interiors				Corporate/ Eliminations*
Loss from continuing operations		$	(39,930	)
Add-back:
Non-service defined benefit income			(2,460	)
Income tax expense			3,348
Warrant remeasurement gain, net			(8,545	)
Debt extinguishment gain			(5,125	)
Interest expense and other, net			94,354
Operating income (loss)		$	41,642			$	111,898			$	(8,048	)		$	(62,208	)
Loss on sales of assets & businesses, net			12,208				—				—				12,208
Shareholder cooperation expenses			1,905				—				—				1,905
Legal judgment loss			1,338				—				—				1,338
Share-based compensation			8,788				—				—				8,788
Amortization of acquired contract liabilities			(1,965	)			(1,965	)			—				—
Depreciation and amortization			22,062				18,805				1,911				1,346
Adjusted Earnings (Losses) before Interest, Taxes,    Depreciation and Amortization, and Pension    ("Adjusted EBITDAP")		$	85,978			$	128,738			$	(6,137	)		$	(36,623	)
Net sales		$	833,456			$	718,238			$	115,955			$	(737	)
Adjusted EBITDAP margin			10.3	%			18.0	%			(5.3	%)		n/a

 

 

---

(Continued)

FINANCIAL DATA (UNAUDITED)

TRIUMPH GROUP, INC. AND SUBSIDIARIES

(dollars in thousands)

		Three Months Ended December 31, 2022
						Segment Data
Adjusted Earnings before Interest, Taxes, Depreciation, Amortization, and Pension (EBITDAP):		Total				Systems & Support				Interiors				Corporate/ Eliminations*
Income from continuing operations		$	5,512
Add-back:
Non-service defined benefit income			(8,576	)
Income tax expense			24
Warrant remeasurement gain			(5,537	)
Debt extinguishment loss			1,441
Interest expense and other, net			30,769
Operating income (loss)		$	23,633			$	31,586			$	5,022			$	(12,975	)
Loss on sales of assets & businesses, net			720				—				—				720
Share-based compensation			890				—				—				890
Amortization of acquired contract liabilities			(442	)			(442	)			—				—
Depreciation and amortization			7,798				6,593				691				514
Adjusted Earnings (Losses) before Interest, Taxes,    Depreciation and Amortization, and Pension    ("Adjusted EBITDAP")		$	32,599			$	37,737			$	5,713			$	(10,851	)
Net sales		$	261,662			$	218,196			$	43,606			$	(140	)
Adjusted EBITDAP margin			12.5	%			17.3	%			13.1	%		n/a

 

		Nine Months Ended December 31, 2022
						Segment Data
Adjusted Earnings before Interest, Taxes, Depreciation, Amortization, and Pension (EBITDAP):		Total				Systems & Support				Interiors				Corporate/ Eliminations*
Income from continuing operations		$	96,582
Add-back:
Non-service defined benefit income			(25,725	)
Income tax expense			2,669
Warrant remeasurement gain			(5,537	)
Debt extinguishment loss			1,441
Interest expense and other, net			83,262
Operating income		$	152,692			$	90,308			$	8,645			$	53,739
Gain on sales of assets & businesses, net			(103,163	)			—				—				(103,163	)
Consideration payable to customer related to divestiture			17,185				—				17,185				—
Share-based compensation			6,420				—				—				6,420
Amortization of acquired contract liabilities			(1,832	)			(1,832	)			—				—
Depreciation and amortization			24,473				19,805				3,059				1,609
Adjusted Earnings (Losses) before Interest, Taxes,    Depreciation and Amortization, and Pension    ("Adjusted EBITDAP")		$	95,775			$	108,281			$	28,889			$	(41,395	)
Net sales		$	805,104			$	633,678			$	171,769			$	(343	)
Adjusted EBITDAP margin			11.7	%			17.1	%			15.3	%		n/a

 

 

 

---

(Continued)

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 December 31, 2023
(amounts in '000s, except per share amounts)		Pre-Tax				After-Tax				Diluted EPS
Loss from continuing operations - GAAP		$	(10,842	)		$	(11,911	)		$	(0.15	)
Adjustments:
Restructuring costs			43				43				0.00
Debt modification and extinguishment gain			(1,046	)			(1,046	)			(0.01	)
Adjusted loss from continuing operations - non-GAAP		$	(11,845	)		$	(12,914	)		$	(0.16	)

 

		Nine Months Ended December 31, 2023
		Pre-Tax				After-Tax				Diluted EPS
Loss from continuing operations - GAAP		$	(36,582	)		$	(39,930	)		$	(0.55	)
Adjustments:
Loss on sale of assets and businesses, net			12,208				12,208				0.17
Restructuring costs			1,985				1,985				0.03
Shareholder cooperation expenses			1,905				1,905				0.03
Debt extinguishment gain			(5,125	)			(5,125	)			(0.07	)
Legal judgment			1,338				1,338				0.02
Adjusted loss from continuing operations - non-GAAP*		$	(24,271	)		$	(27,619	)		$	(0.38	)
*Difference due to rounding.

 

 

 

---

(Continued)

FINANCIAL DATA (UNAUDITED)

TRIUMPH GROUP, INC. AND SUBSIDIARIES
(dollars in thousands)

 

		Three Months Ended December 31, 2022
		Pre-Tax				After-Tax				Diluted EPS
Income from continuing operations - GAAP		$	5,536			$	5,512
GAAP EPS Numerator Adjustments:
Warrant related items		$	(5,730	)		$	(5,730	)
GAAP EPS Numerator:		$	(194	)		$	(218	)		$	(0.00	)
Adjustments:
Loss on sale of assets and businesses, net			720				720				0.01
Debt modification and extinguishment loss			1,441				1,441				0.02
Warrant issuance costs			899				899				0.01
Adjusted income from continuing operations - non-GAAP*		$	2,866			$	2,842			$	0.04
*Difference due to rounding.

 

		Nine Months Ended December 31, 2022
		Pre-Tax				After-Tax				Diluted EPS
Income from continuing operations - GAAP		$	99,251			$	96,582
GAAP EPS Numerator Adjustments:
Warrant related items		$	(5,730	)		$	(5,730	)
GAAP EPS Numerator:		$	93,521			$	90,852			$	1.37
Adjustments:
Income on sale of assets and businesses, net			(103,163	)			(103,163	)			(1.55	)
Restructuring costs (cash based)			1,074				1,074				0.02
Consideration payable to customer related to divestiture^			17,185				17,185				0.26
Debt modification and extinguishment loss			1,441				1,441				0.02
Warrant issuance costs			899				899				0.01
Adjusted income from continuing operations - non-GAAP*		$	10,957			$	8,288			$	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 December 31,								Nine Months Ended December 31,
		2023				2022				2023				2022
Operating income - GAAP		$	19,711			$	23,633			$	41,642			$	152,692
Adjustments:
Loss (gain) on sale of assets and businesses, net			—				720				12,208				(103,163	)
Legal judgment loss			—				—				1,338				—
Restructuring costs (cash based)			43				—				1,985				1,074
Shareholder cooperation expenses			—				—				1,905				—
Consideration payable to customer related to divestiture			—				—				—				17,185
Adjusted operating income - non-GAAP		$	19,754			$	24,353			$	59,078			$	67,788
Adjusted operating margin - non-GAAP			6.9	%			9.3	%			7.1	%			8.2	%

 

 

---

(Continued)

FINANCIAL DATA (UNAUDITED)

TRIUMPH GROUP, INC. AND SUBSIDIARIES
(dollars in thousands)

 

		Fiscal 2024
($ in millions)		Guidance
Operating Income		$100.0 - $110.0
Adjustments:
Loss on sale of assets and businesses		$12.0
Shareholder cooperation expenses		$1.9
Legal judgment loss		$1.3
Restructuring costs (cash based)		$2.0
Depreciation & Amortization		$30.8
Amortization of acquired contract liabilities		($3.0)
Share-based compensation		$10.0
Adjusted EBITDAP - non-GAAP		$157.0 - $167.0

 

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 December 31,								Nine Months Ended December 31,								Fiscal 2024 Guidance
$ in millions		2023				2022				2023				2022
Cash provided by (used in) operating activities		$	27.6			$	0.1			$	(68.3	)		$	(112.3	)		$ 65.0 - $ 85.0
Less:
Capital expenditures			(5.3	)			(5.1	)			(16.3	)			(12.3	)		$ (25.0) - $ (30.0)
Free cash flow (use)*		$	22.4			$	(5.0	)		$	(84.5	)		$	(124.6	)		$ 40.0 - $ 55.0
* Differences due to rounding

 

---

v3.24.0.1

Document And Entity Information	Feb. 07, 2023
Document And Entity Information [Line Items]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Feb. 07, 2023
Securities Act File Number	1-12235
Entity Registrant Name	TRIUMPH GROUP, INC.
Entity Central Index Key	0001021162
Entity Tax Identification Number	51-0347963
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	555 E Lancaster Avenue
Entity Address, Address Line Two	Suite 400
Entity Address, City or Town	Radnor
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	19087
City Area Code	610
Local Phone Number	251-1000
Written Communications	false
Soliciting Material	false
Pre Commencement Tender Offer	false
Pre Commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Common Stock [Member]
Document And Entity Information [Line Items]
Security 12b Title	Common Stock, par value $.001 per share
Trading Symbol	TGI
Security Exchange Name	NYSE
Purchase Rights [Member]
Document And Entity Information [Line Items]
Security 12b Title	Purchase rights
No Trading Symbol Flag	true
Security Exchange Name	NYSE

---