EX-99.1 2 tgi-ex99_1.htm EX-99.1 EX-99.1

Exhibit 99.1

img27292495_0.jpg 

 

 

NEWS RELEASE

 

Contact:

Thomas A. Quigley, III

Vice President, Investor Relations, Mergers & Acquisition and Treasurer

Phone (610) 251-1000

tquigley@triumphgroup.com

 

 

TRIUMPH REPORTS FOURTH QUARTER FISCAL 2024 RESULTS

PROVIDES FISCAL YEAR 2025 GUIDANCE

RADNOR, Pa. – May 23, 2024 – Triumph Group, Inc. (NYSE: TGI) ("TRIUMPH" or the “Company”) today reported financial results for its fourth quarter and fiscal 2024, which ended March 31, 2024.

 

Fourth Quarter Fiscal 2024

•
Net sales of $358.6 million; organic sales growth of 11%
•
Operating income of $44.8 million with operating margin of 12.5%; adjusted operating income of $55.8 million with adjusted operating margin of 15.6%
•
Net income from continuing operations of $5.5 million, or $0.07 per diluted share; adjusted net income from continuing operations of $23.3 million, or $0.31 per diluted share
•
Adjusted EBITDAP of $58.3 million with Adjusted EBITDAP margin of 16.3%
•
Cash provided by operations of $77.7 million and free cash flow of $72.1 million

 

Fiscal 2024

•
Net sales of $1.19 billion; organic sales growth of 13%
•
Operating income of $86.5 million with operating margin of 7.3%; adjusted operating income of $114.9 million with adjusted operating margin of 9.6%
•
Net loss from continuing operations of ($34.5) million, or $(0.46) per share; adjusted net loss from continuing operations of ($4.4) million, or $(0.06) per share
•
Adjusted EBITDAP of $144.3 million with Adjusted EBITDAP margin of 12.1%
•
Cash provided by operations of $9.4 million and free cash use of ($12.4) million

 

Fiscal 2025 Guidance

•
Net sales of approximately $1.2 billion
•
Operating income of approximately $140.0 million, reflecting operating margin of 12%
•
Adjusted EBITDAP of approximately $182.0 million, reflecting Adjusted EBITDAP margin 15%
•
Earnings per diluted share of approximately $0.42
•
Cash flow from operations of $30.0 million to $50.0 million, free cash flow of $10.0 million to $25.0 million

 

“TRIUMPH took important strategic actions during fiscal 2024 to create a more streamlined, value-added and IP-based business with a much stronger balance sheet," said Dan Crowley, TRIUMPH's chairman, president and chief executive officer. “We completed the divestiture of our third-party Product Support MRO business during the fourth quarter and

retired over $550.0 million of debt with the sale proceeds to materially accelerate our de-leveraging as committed to our shareholders during our September 2023 Investor Day."

 

"We were pleased to report our eighth consecutive quarter of year over year organic growth as aftermarket volume grew rapidly in our remaining OEM businesses. While sales increased in our Interiors business in the fourth quarter, its profit and cash flow continued to lag due to external cost drivers. We expect these headwinds to abate as narrowbody aircraft rates recover. However, TRIUMPH generated positive free cash flow overall and achieved our strongest margins of the fiscal year due to benefits from higher overall sales and strong aftermarket mix."

 

Mr. Crowley continued, “TRIUMPH accelerated new business capture with a year-to-date book to bill rate of 1.28, lifting our backlog 22% year over year to the highest level since March 2020. Our fiscal 2025 guidance reflects the strength of TRIUMPH's portfolio, helping to offset short-term end market headwinds, while enabling improvement across our key financial metrics, notably an estimated 300 basis point expansion in Adjusted EBITDAP margins. With the anticipated market demand from the coming aerospace and defense upcycle, we expect to 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.”

 

Fourth Quarter and Full Year Fiscal 2024 Overview

 

 

 

Three Months Ended March 31,

 

 

Fiscal Year Ended March 31,

 

($ in millions)

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Commercial OEM

 

$

139.6

 

 

$

144.3

 

 

$

530.3

 

 

$

541.5

 

Military OEM

 

 

71.2

 

 

 

80.2

 

 

 

261.9

 

 

 

261.1

 

Total OEM Revenue

 

 

210.8

 

 

 

224.4

 

 

 

792.2

 

 

 

802.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Aftermarket

 

 

56.4

 

 

 

38.4

 

 

 

164.0

 

 

 

126.1

 

Military Aftermarket

 

 

65.3

 

 

 

54.1

 

 

 

183.1

 

 

 

165.8

 

Total Aftermarket Revenue

 

 

121.6

 

 

 

92.5

 

 

 

347.1

 

 

 

292.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-Aviation Revenue

 

 

25.4

 

 

 

7.8

 

 

 

50.0

 

 

 

33.6

 

Amortization of acquired contract liabilities

 

 

0.8

 

 

 

0.7

 

 

 

2.7

 

 

 

2.5

 

Total Net Sales*

 

$

358.6

 

 

$

325.5

 

 

$

1,192.0

 

 

$

1,130.6

 

* 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, Commercial OEM sales decreased ($1.5) million, or (1.1%) in the quarter primarily on a year-to-date adjustment to non-aviation revenue, offset by increases in production volumes on the Boeing 787 program.

Aftermarket sales include both repair and overhaul services as well as the sales of spare parts. Commercial Aftermarket sales increased $18.0 million, or 47.1%, driven by the continued improvement in overall air travel metrics, favorably impacting both spare part sales and repair and overhaul services. The impacts from divestitures and exited or sunsetting programs on Commercial aftermarket sales was not significant.

Military OEM sales decreased ($9.0) million, or (11.2%) in the quarter, as decreased sales on military rotorcraft such as V-22 were partially offset by volume on other military programs, including fixed wing platforms.

Military aftermarket sales increased $11.2 million, or 20.7% in the quarter, primarily on increased spares and repairs for military rotorcraft programs.

Non-aviation sales include a year-to-date true-up adjustment, primarily from Commercial OEM sales.

 

TRIUMPH's results included the following:

($ millions except EPS)

 

Pre-tax

 

 

After-tax

 

 

Diluted EPS

 

Income from Continuing Operations - GAAP

 

$

9.2

 

 

$

5.5

 

 

$

0.07

 

Adjustments

 

 

 

 

 

 

 

 

 

Legal contingencies loss

 

 

6.0

 

 

 

6.0

 

 

 

0.08

 

Restructuring costs

 

 

5.0

 

 

 

5.0

 

 

 

0.06

 

Debt extinguishment loss

 

 

6.8

 

 

 

6.8

 

 

 

0.09

 

 

 

 

 

 

 

 

 

 

 

Adjusted income from continuing operations - non-GAAP*

 

$

27.0

 

 

$

23.3

 

 

$

0.31

 

*Difference due to rounding.

 

 

 

 

 

 

 

 

 

 

Fourth quarter operating income of $44.8 million includes $5.0 million of restructuring costs related to the $40.0 million in cost reduction actions noted last quarter and $6.0 million in legal contingencies loss related to updates in our previously disclosed arbitration in our legacy Structures business. Net income from continuing operations for the fourth quarter of fiscal 2024 was $5.5 million or $0.07 per diluted share. In addition to the adjustments impacting operating income, the company incurred $6.8 million in debt extinguishment loss related to the retirement of debt in the quarter.

 

 

The number of shares used in computing diluted income per share for the fourth quarter of 2024 was 77.8 million.

 

Backlog, which represents the next 24 months of actual purchase orders with firm delivery dates or contract requirements, was $1.9 billion up 22% from prior fiscal year end. This increase was primarily on commercial OEM platforms.

 

For the fourth quarter of fiscal 2024, cash flow provided by operations was $77.7 million, which was in line with expectations previously provided.


 

Conference Call

TRIUMPH will hold a conference call today, May 23rd, at 8:30 a.m. (ET) to discuss the fourth 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 May 23rd to May 30th by calling (844) 344-7529 (Domestic) or (412) 317-0088 (International), passcode #8487447.

 

About TRIUMPH

TRIUMPH, headquartered in Radnor, Pennsylvania, designs, develops, manufactures, repairs and provided spare parts across 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 guidance, 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

 

 

Year Ended

 

 

 

March 31,

 

 

March 31,

 

CONDENSED STATEMENTS OF OPERATIONS

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Net sales

 

$

358,587

 

 

$

325,458

 

 

$

1,192,043

 

 

$

1,130,562

 

Cost of sales (excluding depreciation shown below)

 

 

250,459

 

 

 

221,873

 

 

 

869,201

 

 

 

809,882

 

Selling, general & administrative

 

 

44,770

 

 

 

49,069

 

 

 

180,247

 

 

 

191,087

 

Depreciation & amortization

 

 

7,563

 

 

 

7,786

 

 

 

29,625

 

 

 

32,259

 

Legal contingencies loss

 

 

6,000

 

 

 

—

 

 

 

7,338

 

 

 

—

 

Restructuring costs

 

 

4,985

 

 

 

2,098

 

 

 

6,970

 

 

 

3,172

 

Loss (gain) on sale of assets and businesses, net

 

 

—

 

 

 

1,640

 

 

 

12,208

 

 

 

(101,523

)

Operating income

 

 

44,810

 

 

 

42,992

 

 

 

86,454

 

 

 

195,685

 

Interest expense and other, net

 

 

28,667

 

 

 

31,949

 

 

 

123,021

 

 

 

115,211

 

Debt modification and extinguishment loss

 

 

6,819

 

 

 

31,603

 

 

 

1,694

 

 

 

33,044

 

Warrant remeasurement gain

 

 

—

 

 

 

(3,146

)

 

 

(8,545

)

 

 

(8,683

)

Non-service defined benefit expense (income)

 

 

88

 

 

 

6,061

 

 

 

(2,372

)

 

 

(19,664

)

Income tax expense

 

 

3,775

 

 

 

691

 

 

 

7,123

 

 

 

3,360

 

Income (loss) from continuing operations

 

 

5,461

 

 

 

(24,166

)

 

 

(34,467

)

 

 

72,417

 

Income from discontinued operations, net of tax

 

 

542,284

 

 

 

6,623

 

 

 

546,851

 

 

 

17,176

 

Net income (loss)

 

$

547,745

 

 

$

(17,543

)

 

$

512,384

 

 

$

89,593

 

Earnings (loss) per share - basic:

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per share - continuing operations

 

$

0.07

 

 

$

(0.37

)

 

$

(0.46

)

 

$

1.12

 

Earnings per share - discontinued operations

 

 

7.05

 

 

 

0.10

 

 

 

7.38

 

 

 

0.26

 

Earnings (loss) per share - basic

 

$

7.12

 

 

$

(0.27

)

 

$

6.92

 

 

$

1.38

 

Weighted average common shares outstanding - basic

 

 

76,919

 

 

 

65,189

 

 

 

74,149

 

 

 

65,021

 

Earnings (loss) per share - diluted:

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per share - continuing operations

 

$

0.07

 

 

$

(0.37

)

 

$

(0.46

)

 

$

0.96

 

Earnings per share - discontinued operations

 

 

6.97

 

 

 

0.10

 

 

 

7.38

 

 

 

0.24

 

Earnings (loss) per share - diluted

 

$

7.04

 

 

$

(0.27

)

 

$

6.92

 

 

$

1.20

 

Weighted average common shares outstanding - diluted

 

 

77,817

 

 

 

65,189

 

 

 

74,149

 

 

 

71,721

 

 

(Continued)

FINANCIAL DATA (UNAUDITED)

TRIUMPH GROUP, INC. AND SUBSIDIARIES

(dollars in thousands, except share data)


 

BALANCE SHEETS

 

Unaudited
March 31,
2024

 

 

Unaudited
March 31,
2023

 

Assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

392,511

 

 

$

227,403

 

Accounts receivable, net

 

 

138,272

 

 

 

156,116

 

Contract assets

 

 

74,289

 

 

 

86,740

 

Inventory, net

 

 

317,671

 

 

 

309,084

 

Prepaid and other current assets

 

 

16,626

 

 

 

14,073

 

Assets held for sale

 

 

—

 

 

 

140,096

 

Current assets

 

 

939,369

 

 

 

933,512

 

Property and equipment, net

 

 

144,287

 

 

 

138,622

 

Goodwill

 

 

510,687

 

 

 

509,449

 

Intangible assets, net

 

 

65,063

 

 

 

73,898

 

Other, net

 

 

26,864

 

 

 

28,697

 

Assets held for sale - noncurrent

 

 

—

 

 

 

30,666

 

Total assets

 

$

1,686,270

 

 

$

1,714,844

 

Liabilities & Stockholders' Deficit

 

 

 

 

 

 

Current portion of long-term debt

 

$

3,200

 

 

$

3,162

 

Accounts payable

 

 

167,349

 

 

 

173,575

 

Contract liabilities

 

 

55,858

 

 

 

44,095

 

Accrued expenses

 

 

129,855

 

 

 

141,679

 

Liabilities related to assets held for sale

 

 

—

 

 

 

34,413

 

Current liabilities

 

 

356,262

 

 

 

396,924

 

Long-term debt, less current portion

 

 

1,074,999

 

 

 

1,688,620

 

Accrued pension and post-retirement benefits, noncurrent

 

 

283,634

 

 

 

359,375

 

Deferred income taxes, noncurrent

 

 

7,268

 

 

 

7,268

 

Other noncurrent liabilities

 

 

68,521

 

 

 

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, 76,923,691 and 65,432,589 shares issued

 

 

77

 

 

 

65

 

Capital in excess of par value

 

 

1,107,750

 

 

 

964,741

 

Accumulated other comprehensive loss

 

 

(517,069

)

 

 

(554,646

)

Accumulated deficit

 

 

(695,172

)

 

 

(1,207,556

)

Total stockholders' deficit

 

 

(104,414

)

 

 

(797,396

)

Total liabilities and stockholders' deficit

 

$

1,686,270

 

 

$

1,714,844

 

 

(Continued)

FINANCIAL DATA (UNAUDITED)

TRIUMPH GROUP, INC. AND SUBSIDIARIES

(dollars in thousands)

 

 

 

Fiscal Year Ended March 31

 

 

 

2024

 

 

2023

 

Operating Activities

 

 

 

 

 

 

Net income

 

$

512,384

 

 

$

89,593

 

Adjustments to reconcile net income to net cash provided by (used in)
   operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

33,250

 

 

 

35,581

 

Amortization of acquired contract liability

 

 

(2,721

)

 

 

(2,500

)

(Gain) loss on sale of assets and businesses

 

 

(556,161

)

 

 

(101,523

)

Curtailments, settlements, withdrawals, and special termination benefits loss, net

 

 

—

 

 

 

14,644

 

Loss on modification and extinguishment of debt

 

 

1,694

 

 

 

32,613

 

Other amortization included in interest expense

 

 

5,925

 

 

 

6,416

 

Provision for credit losses

 

 

1,136

 

 

 

1,594

 

Provision for deferred income taxes

 

 

—

 

 

 

14

 

Warrants remeasurement gain

 

 

(8,545

)

 

 

(9,796

)

Share-based compensation

 

 

9,445

 

 

 

8,913

 

Changes in other assets and liabilities, excluding the effects of
   acquisitions and divestitures:

 

 

 

 

 

 

Trade and other receivables

 

 

7,879

 

 

 

(26,433

)

Contract assets

 

 

9,584

 

 

 

(9,055

)

Inventories

 

 

(17,460

)

 

 

(28,187

)

Prepaid expenses and other current assets

 

 

(2,919

)

 

 

1,970

 

Accounts payable, accrued expenses, and contract liabilities

 

 

13,506

 

 

 

(35,733

)

Accrued pension and other postretirement benefits

 

 

(3,916

)

 

 

(32,562

)

Other, net

 

 

6,362

 

 

 

2,200

 

Net cash provided by (used in) operating activities

 

 

9,443

 

 

 

(52,251

)

Investing Activities

 

 

 

 

 

 

Capital expenditures

 

 

(21,827

)

 

 

(20,676

)

Proceeds from (payments on) sale of assets and businesses

 

 

713,413

 

 

 

(6,220

)

Investment in joint venture

 

 

(1,661

)

 

 

(272

)

Net cash provided by (used in) investing activities

 

 

689,925

 

 

 

(27,168

)

Financing Activities

 

 

 

 

 

 

Proceeds from issuance of long-term debt

 

 

2,000

 

 

 

1,235,000

 

Retirement of debt and finance lease obligations

 

 

(608,701

)

 

 

(1,126,501

)

Payment of deferred financing costs

 

 

(2,368

)

 

 

(17,097

)

Proceeds on issuance of common stock, net of issuance costs

 

 

79,961

 

 

 

4,090

 

Premium on redemption of long-term debt

 

 

(3,600

)

 

 

(26,157

)

Repurchase of shares for share-based compensation
   minimum tax obligation

 

 

(1,629

)

 

 

(3,547

)

Net cash (used in) provided by financing activities

 

 

(534,337

)

 

 

65,788

 

Effect of exchange rate changes on cash

 

 

77

 

 

 

156

 

Net change in cash and cash equivalents

 

 

165,108

 

 

 

(13,475

)

Cash and cash equivalents at beginning of period

 

 

227,403

 

 

 

240,878

 

Cash and cash equivalents at end of period

 

$

392,511

 

 

$

227,403

 


 

 

(CONTINUED)

FINANCIAL DATA (UNAUDITED)

TRIUMPH GROUP, INC. AND SUBSIDIARIES

(dollars in thousands)

 


 

 

 

Three Months Ended

 

 

Year Ended

 

 

 

March 31,

 

 

March 31,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Systems & Support

 

 

 

 

 

 

 

 

 

 

 

 

Net sales to external customer

 

$

310,116

 

 

$

285,583

 

 

$

1,027,630

 

 

$

918,960

 

Inter-segment sales (eliminated in consolidation)

 

 

71

 

 

 

90

 

 

 

795

 

 

 

391

 

Segment EBITDAP

 

 

71,336

 

 

 

64,134

 

 

 

200,074

 

 

 

172,415

 

Segment EBITDAP Margin

 

 

23.1

%

 

 

22.5

%

 

 

19.5

%

 

 

18.8

%

Depreciation & amortization

 

 

6,468

 

 

 

6,655

 

 

 

25,273

 

 

 

26,460

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interiors

 

 

 

 

 

 

 

 

 

 

 

 

Net sales to external customer

 

$

48,471

 

 

$

39,875

 

 

$

164,413

 

 

$

211,602

 

Inter-segment sales (eliminated in consolidation)

 

 

14

 

 

 

3

 

 

 

27

 

 

 

45

 

Segment EBITDAP

 

 

1,137

 

 

 

3,047

 

 

 

(5,000

)

 

 

31,937

 

Segment EBITDAP Margin

 

 

2.3

%

 

 

7.6

%

 

 

-3.0

%

 

 

14.0

%

Depreciation & amortization

 

 

594

 

 

 

624

 

 

 

2,505

 

 

 

3,683

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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 contingencies loss, 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:

•
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. 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 loss contingencies, when applicable, may be useful for investors to consider because it reflects gains or losses from legal disputes with third parties. We do not believe these gains or losses reflect the current and ongoing 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 and intangible asset 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.


 

 

(Continued)

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


 

 

 

Three Months Ended

 

 

Year Ended

 

 

 

March 31,

 

 

March 31,

 

Adjusted Earnings before Interest, Taxes, Depreciation,
Amortization, and Pension (Adjusted EBITDAP):

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Income (loss) from continuing operations

 

$

5,461

 

 

$

(24,166

)

 

$

(34,467

)

 

$

72,417

 

Add-back:

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

 

3,775

 

 

 

691

 

 

 

7,123

 

 

 

3,360

 

Interest expense and other, net

 

 

28,667

 

 

 

31,949

 

 

 

123,021

 

 

 

115,211

 

Debt modification and extinguishment (gain) loss

 

 

6,819

 

 

 

31,603

 

 

 

1,694

 

 

 

33,044

 

Warrant remeasurement gain

 

 

—

 

 

 

(3,146

)

 

 

(8,545

)

 

 

(8,683

)

Legal contingencies loss

 

 

6,000

 

 

 

—

 

 

 

7,338

 

 

 

—

 

Consideration payable to customer related to divestiture

 

 

—

 

 

 

—

 

 

 

—

 

 

 

17,185

 

Shareholder cooperation expenses

 

 

—

 

 

 

—

 

 

 

1,905

 

 

 

—

 

Loss (gain) on sales of assets and businesses, net

 

 

—

 

 

 

1,640

 

 

 

12,208

 

 

 

(101,523

)

Share-based compensation

 

 

657

 

 

 

2,493

 

 

 

9,445

 

 

 

8,913

 

Amortization of acquired contract liabilities

 

 

(756

)

 

 

(668

)

 

 

(2,721

)

 

 

(2,500

)

Depreciation and amortization

 

 

7,563

 

 

 

7,786

 

 

 

29,625

 

 

 

32,259

 

Adjusted Earnings before Interest, Taxes, Depreciation
   and Amortization ("Adjusted EBITDA")

 

$

58,186

 

 

$

48,182

 

 

$

146,626

 

 

$

169,683

 

Non-service defined benefit expense (income) (excluding settlements)

 

 

88

 

 

 

6,061

 

 

 

(2,372

)

 

 

(19,664

)

Adjusted Earnings before Interest, Taxes, Depreciation
   and Amortization, and Pension ("Adjusted EBITDAP")

 

$

58,274

 

 

$

54,243

 

 

$

144,254

 

 

$

150,019

 

Net sales

 

$

358,587

 

 

$

325,458

 

 

$

1,192,043

 

 

$

1,130,562

 

Income (loss) from continuing operations margin

 

 

1.5

%

 

 

(7.4

%)

 

 

(2.9

%)

 

 

6.4

%

Adjusted EBITDAP margin

 

 

16.3

%

 

 

16.7

%

 

 

12.1

%

 

 

13.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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
March 31, 2024

 

(amounts in '000s, except per share amounts)

 

Pre-Tax

 

 

After-Tax

 

 

Diluted EPS

 

Income from continuing operations - GAAP

 

$

9,236

 

 

$

5,461

 

 

$

0.07

 

Adjustments:

 

 

 

 

 

 

 

 

 

Legal contingencies loss

 

 

6,000

 

 

 

6,000

 

 

 

0.08

 

Restructuring costs

 

 

4,985

 

 

 

4,985

 

 

 

0.06

 

Debt extinguishment loss

 

 

6,819

 

 

 

6,819

 

 

 

0.09

 

Adjusted income from continuing operations - non-GAAP*

 

$

27,040

 

 

$

23,265

 

 

$

0.31

 

 

 

 

Year Ended
March 31, 2024

 

 

 

Pre-Tax

 

 

After-Tax

 

 

Diluted EPS

 

Loss from continuing operations - GAAP

 

$

(27,344

)

 

$

(34,467

)

 

$

(0.46

)

Adjustments:

 

 

 

 

 

 

 

 

 

Loss on sale of assets and businesses, net

 

 

12,208

 

 

 

12,208

 

 

 

0.16

 

Restructuring costs

 

 

6,970

 

 

 

6,970

 

 

 

0.09

 

Shareholder cooperation expenses

 

 

1,905

 

 

 

1,905

 

 

 

0.03

 

Debt modification and extinguishment loss

 

 

1,694

 

 

 

1,694

 

 

 

0.02

 

Legal contingencies loss

 

 

7,338

 

 

 

7,338

 

 

 

0.10

 

Adjusted loss from continuing operations - non-GAAP*

 

$

2,771

 

 

$

(4,352

)

 

$

(0.06

)

*Difference due to rounding.

 

 

 

 

 

 

 

 

 


 

 

(Continued)

FINANCIAL DATA (UNAUDITED)

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

 

 

 

Three Months Ended
March 31, 2023

 

 

 

Pre-Tax

 

 

After-Tax

 

 

Diluted EPS

 

Loss from continuing operations - GAAP

 

$

(23,475

)

 

$

(24,166

)

 

$

(0.37

)

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

Warrant related items

 

 

2,083

 

 

 

2,083

 

 

 

0.12

 

Loss on sale of assets and businesses, net

 

 

1,640

 

 

 

1,640

 

 

 

0.02

 

Restructuring costs

 

 

2,098

 

 

 

2,098

 

 

 

0.02

 

Debt modification and extinguishment loss

 

 

31,603

 

 

 

31,603

 

 

 

0.36

 

Spokane pension withdrawal

 

 

14,644

 

 

 

14,644

 

 

 

0.17

 

Adjusted income from continuing operations - non-GAAP

 

$

28,593

 

 

$

27,902

 

 

$

0.32

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended
March 31, 2023

 

 

 

Pre-Tax

 

 

After-Tax

 

 

Diluted EPS

 

Income from continuing operations - GAAP

 

$

75,777

 

 

$

72,417

 

 

 

 

GAAP EPS Numerator Adjustments:

 

 

 

 

 

 

 

 

 

Warrant related items

 

$

(3,626

)

 

$

(3,626

)

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP EPS Numerator:

 

$

72,151

 

 

$

68,791

 

 

$

0.96

 

Adjustments:

 

 

 

 

 

 

 

 

 

Gain on sale of assets and businesses, net

 

 

(101,523

)

 

 

(101,523

)

 

 

(1.42

)

Restructuring costs

 

 

3,172

 

 

 

3,172

 

 

 

0.04

 

Consideration payable to customer related to divestiture^

 

 

17,185

 

 

 

17,185

 

 

 

0.24

 

Debt modification and extinguishment loss

 

 

33,044

 

 

 

33,044

 

 

 

0.46

 

Spokane pension withdrawal

 

 

14,644

 

 

 

14,644

 

 

 

0.20

 

Warrant issuance costs

 

 

1,113

 

 

 

1,113

 

 

 

0.02

 

Adjusted income from continuing operations - non-GAAP*

 

$

39,786

 

 

$

36,426

 

 

$

0.51

 

*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
March 31,

 

 

Year Ended
March 31,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Operating income - GAAP

 

$

44,810

 

 

$

42,992

 

 

$

86,454

 

 

$

195,685

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Loss (gain) on sale of assets and businesses, net

 

 

—

 

 

 

1,640

 

 

 

12,208

 

 

 

(101,523

)

Legal contingencies loss

 

 

6,000

 

 

 

—

 

 

 

7,338

 

 

 

—

 

Restructuring costs (cash based)

 

 

4,985

 

 

 

2,098

 

 

 

6,970

 

 

 

3,172

 

Shareholder cooperation expenses

 

 

—

 

 

 

—

 

 

 

1,905

 

 

 

—

 

Consideration payable to customer related to divestiture

 

 

—

 

 

 

—

 

 

 

—

 

 

 

17,185

 

Adjusted operating income - non-GAAP

 

$

55,795

 

 

$

46,730

 

 

$

114,875

 

 

$

114,519

 

Adjusted operating margin - non-GAAP

 

 

15.6

%

 

 

14.4

%

 

 

9.6

%

 

 

10.0

%

 

(Continued)

FINANCIAL DATA (UNAUDITED)

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

 

 

Fiscal 2025

 

($ in millions)

 

Guidance

 

Income from continuing operations, before taxes

 

$40.0

 

Adjustments:

 

 

 

Interest expense and other, net

 

~$95.0

 

Non-service defined benefit expense

 

~$5.0

 

Depreciation & Amortization

 

~$33.0

 

Amortization of acquired contract liabilities

 

~($4.0)

 

Share-based compensation

 

~$13.0

 

Adjusted EBITDAP - non-GAAP

 

$182.0

 

 

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
March 31,

 

 

Fiscal Year Ended
March 31,

 

 

Fiscal 2025
Guidance

$ in millions

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

 

Cash provided by (used in) operating activities

 

$

77.7

 

 

$

60.0

 

 

$

9.4

 

 

$

(52.3

)

 

$ 30.0 - $ 50.0

Less:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(5.6

)

 

 

(8.3

)

 

 

(21.8

)

 

 

(20.7

)

 

$ (20.0) - $ (25.0)

Free cash flow (use)*

 

$

72.1

 

 

$

51.8

 

 

$

(12.4

)

 

$

(72.9

)

 

$ 10.0 - $ 25.0

* Differences due to rounding