TRIUMPH REPORTS FOURTH QUARTER FISCAL 2024 RESULTS

Rhea-AI Summary

Triumph Group (NYSE: TGI) announced fourth-quarter fiscal 2024 results with net sales of $358.6 million, showing an 11% organic sales growth.

Operating income was $44.8 million, with an operating margin of 12.5%, and adjusted operating income stood at $55.8 million (15.6% margin).

Net income from continuing operations was $5.5 million ($0.07 per share), while adjusted net income was $23.3 million ($0.31 per share).

For fiscal year 2024, net sales reached $1.19 billion with a 13% organic sales growth. The company reported a net loss of $34.5 million, or $(0.46) per share, but an adjusted net loss of $4.4 million, or $(0.06) per share.

Triumph's guidance for fiscal 2025 includes expected net sales of $1.2 billion, operating income of $140 million, adjusted EBITDAP of $182 million, earnings per share of $0.42, and free cash flow between $10 million to $25 million.

The company highlighted strategic actions, including the sale of a third-party Product Support MRO business and debt reduction, as well as significant new business captures, reflected in a 22% backlog increase year-over-year.

Positive

• Fourth-quarter net sales increased by 11% organically to $358.6 million.
• Operating income of $44.8 million with a margin of 12.5%; adjusted operating income of $55.8 million with a margin of 15.6%.
• Net income from continuing operations for the fourth quarter was $5.5 million, or $0.07 per diluted share.
• Fiscal 2024 net sales reached $1.19 billion with a 13% organic growth.
• Cash flow from operations for the fourth quarter was $77.7 million, leading to a positive free cash flow of $72.1 million.
• Backlog increased by 22% year-over-year to $1.9 billion.
• Triumph retired over $550 million of debt, strengthening the balance sheet.

Negative

• Net loss from continuing operations for the fiscal year 2024 was $34.5 million, or $(0.46) per share.
• Adjusted net loss was $4.4 million, or $(0.06) per share for fiscal year 2024.
• Military OEM sales decreased by 11.2% in the fourth quarter, with a $(9.0) million decline in revenue.
• Interiors business profit and cash flow lagged due to external cost drivers.
• Fourth quarter included $5.0 million in restructuring costs and $6.0 million in legal contingencies losses.

Insights

Financial Analyst

The fourth quarter and full-year fiscal 2024 results of TRIUMPH Group, Inc. reveal a notable uptick in its performance across several key metrics. In the fourth quarter, net sales reached $358.6 million, marking an organic sales growth of 11%. This substantial rise, coupled with an operating margin of 12.5% and an adjusted operating margin of 15.6%, underscores improved operational efficiency.

However, despite the impressive quarterly performance, the full fiscal year paints a less rosy picture. The company reported a net loss from continuing operations of ($34.5) million, or ($0.46) per share, although the adjusted figures were better, with an adjusted net loss of ($4.4) million, or ($0.06) per share. This discrepancy suggests that while the core operations are improving, there are significant one-off costs and adjustments impacting the bottom line.

The cash flow from operations remains a important metric for investors. For the fiscal year, it was a modest $9.4 million, with a negative free cash flow of ($12.4) million. The positive shift to $77.7 million in the fourth quarter signals better cash management and operational efficiency, which is promising for future quarters.

Guidance for fiscal 2025 indicates expected net sales of approximately $1.2 billion and operating income of around $140.0 million. These projections, especially the significant improvement in operating income, suggest a strong focus on margin expansion and cost control. Investors should monitor how well the company executes these strategies, given the fluctuating market conditions and external cost pressures highlighted by management.

Overall, while TRIUMPH's fiscal 2024 results show mixed outcomes, the outlined fiscal 2025 guidance and strategic initiatives point towards a potentially stronger financial performance.

Market Research Analyst

TRIUMPH's performance in the fourth quarter of fiscal 2024 offers a glimpse into the broader trends in the aerospace and defense markets. The company reported a significant organic sales growth of 11% during the quarter, driven largely by the commercial aftermarket segment, which saw a notable increase in sales by 47.1%. This growth aligns with the ongoing recovery in air travel and increased demand for repair and overhaul services and spare parts.

In contrast, the military OEM sales dipped by 11.2%, impacted by reduced volumes in specific programs, such as military rotorcraft like the V-22. However, the increase in military aftermarket sales by 20.7% demonstrates resilience in the military sector, driven by increased spares and repairs for various military programs. This suggests a balanced portfolio that can mitigate sector-specific downturns.

The backlog increase to $1.9 billion, up 22% from the prior fiscal year end, is a strong indicator of future revenue stability and growth potential. The book-to-bill ratio of 1.28 further reinforces this stability, suggesting that for every dollar of sales, the company is securing more than a dollar in new orders, which is a positive sign for long-term growth prospects.

Moreover, the company's strategic focus on divesting non-core businesses and reducing debt by over $550.0 million with sale proceeds will materially strengthen its balance sheet. This de-leveraging effort is critical in enhancing financial flexibility and reducing interest expenses, thus supporting future investment in growth areas.

The fiscal 2025 guidance reflects confidence in continued demand in the aerospace and defense upcycle, with expected adjusted EBITDAP margins expanding by 300 basis points. Investors should keep an eye on how market dynamics, such as the recovery in narrowbody aircraft rates and external cost drivers, influence these projections.

PROVIDES FISCAL YEAR 2025 GUIDANCE

RADNOR, Pa., May 23, 2024 /PRNewswire/ -- 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

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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

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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

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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

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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.

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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.
• 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

 

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SOURCE Triumph Group, Inc.

FAQ

What were Triumph Group's fourth-quarter 2024 sales?

Triumph Group reported fourth-quarter 2024 net sales of $358.6 million, showing an 11% organic growth.

What was Triumph Group's net income for the fourth quarter of 2024?

The net income from continuing operations for the fourth quarter of 2024 was $5.5 million, or $0.07 per diluted share.

What are the fiscal 2025 guidance figures for Triumph Group?

Triumph Group expects fiscal 2025 net sales of approximately $1.2 billion, operating income of $140 million, adjusted EBITDAP of $182 million, earnings per share of $0.42, and free cash flow of $10 million to $25 million.

How much did Triumph Group's backlog increase in fiscal 2024?

Triumph Group's backlog increased by 22% year-over-year to $1.9 billion in fiscal 2024.

What was Triumph Group's net loss for fiscal year 2024?

Triumph Group reported a net loss from continuing operations of $34.5 million, or $(0.46) per share for fiscal year 2024.