TRIUMPH REPORTS STRONG SECOND QUARTER FISCAL 2025 RESULTS AND RAISES FY25 GUIDANCE
RADNOR, Pa., Nov. 12, 2024 /PRNewswire/ -- Triumph Group, Inc. (NYSE:TGI) ("TRIUMPH" or the "Company") today reported financial results for its second quarter of fiscal 2025, which ended September 30, 2024.
Second Quarter Fiscal 2025
Net sales of $287.5 million; sales growth of 1%
Operating income of $32.4 million with operating margin of 11%; adjusted operating income of $36.0 million with adjusted operating margin of 13%
Net income from continuing operations of $11.9 million, or $0.15 per diluted share; adjusted net income from continuing operations of $15.4 million, or $0.20 per share
Adjusted EBITDAP of $42.6 million with Adjusted EBITDAP margin of 15%
Cash used in operations of ($38.4) million and free cash use of ($44.7) million. Cash and available liquidity was $148 million at September 30th.
Fiscal 2025 Guidance
Net sales of approximately $1.2 billion
Increasing operating income to a range of $140.5 million to $145.5 million, reflecting operating margin of 12%
Increasing Adjusted EBITDAP to a range of $190.0 million to $195.0 million, reflecting Adjusted EBITDAP margin of 16%
Increasing earnings per diluted share to a range of $0.47 to $0.53, and adjusted earnings per diluted share to a range of $0.70 - $0.76
Increasing cash flow from operations to a range of $40.0 million to $55.0 million, and free cash flow to a range of $20.0 million to $30.0 million
"TRIUMPH achieved its tenth consecutive quarter of year-over-year sales growth as commercial aftermarket sales from our IP-based business grew by more than 34%, more than offsetting temporary commercial OEM and supply chain headwinds," said Dan Crowley, TRIUMPH's chairman, president and chief executive officer. "We exceeded our cash targets in the quarter through strong operational performance across all our businesses including Interiors where we turned around the business in Q2 through substantial cost reductions and a commercial resolution to bring its profit and cash flow in line with full year expectations." Mr. Crowley continued, "TRIUMPH is raising its fiscal 2025 earnings and cash flow guidance on strong aftermarket demand and the improvement in Interiors, while maintaining sales guidance despite lower short-term OEM production rates which we expect to recover in our fourth quarter. Our strong aftermarket growth and operating performance, and historical seasonality will accelerate our free cash flow generation in the second half of FY25. We expect to deliver top and bottom-line growth rates at or above the market as we benefit from continuing strong aftermarket demand."
Second Quarter Fiscal 2025 Overview
Three Months Ended September 30,
($ in millions)
2024
2023
Commercial OEM
$
118.9
$
130.6
Military OEM
64.0
61.1
Total OEM Revenue
183.0
191.6
Commercial Aftermarket
50.2
39.7
Military Aftermarket
43.8
43.6
Total Aftermarket Revenue
93.9
83.3
Non-Aviation Revenue
10.0
9.2
Amortization of acquired contract liabilities
0.6
0.6
Total Net Sales*
$
287.5
$
284.7
* Differences due to rounding
Note> Aftermarket sales include both repair & overhaul services and spare parts sales.
Commercial OEM sales decreased ($11.6) million, or (8.9%) primarily due to decreased sales volume on the Boeing 737, 767, 777 programs, which were partially offset by increased sales on Boeing 787 program and a favorable settlement in Interiors across multiple programs.
Commercial Aftermarket sales increased $10.4 million, or 26.2%, primarily due to a combination of increased spares sales and repair sales volume across several platforms including the Boeing 787 program.
Military OEM sales increased $3.0 million, or 4.9%, as increased sales volumes on the CH-47 and AH-64 helped offset expected decreases on the V-22 program.
Military aftermarket sales increased $0.2 million, or 0.5%, as increased repairs on the CH-47 platform and a spare parts intellectual property transaction of approximately $5.0 million were partially offset by decreased repair and overhaul sales on the V-22 program.
TRIUMPH's results included the following:
($ millions except EPS)
Pre-tax
After-tax
Diluted EPS
Income from Continuing Operations - GAAP
$
9.1
$
11.9
$
0.15
Adjustments
Restructuring costs
3.6
3.6
0.05
Adjusted income from continuing operations - non-GAAP
$
12.7
$
15.5
$
0.20
The number of shares used in computing earnings per share for the second quarter of 2025 was 77.7 million.
Backlog, which represents the next 24 months of actual purchase orders with firm delivery dates or contract requirements, was $1.90 billion, an increase from prior fiscal year end. Our backlog includes increases across all end markets, partially offset by reductions due to the changes in timing of deliveries primarily under the Boeing 737MAX program.
For the second quarter of fiscal 2025, cash flow used in operations was ($38.4) million, which was better than expectations previously provided due to lower than expected working capital and strong aftermarket demand.
Conference Call
TRIUMPH will hold a conference call today, November 12th, at 8:30 a.m. (ET) to discuss the second quarter of fiscal 2025 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 November 12th to November 19th by calling (844) 344-7529 (Domestic) or (412) 317-0088 (International), passcode #6721044.
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, 2024.
FINANCIAL DATA (UNAUDITED) ON FOLLOWING PAGES
FINANCIAL DATA (UNAUDITED)
TRIUMPH GROUP, INC. AND SUBSIDIARIES
(in thousands, except per share data)
Three Months Ended
Six Months Ended
September 30,
September 30,
CONDENSED STATEMENTS OF OPERATIONS
2024
2023
2024
2023
Net sales
$
287,495
$
284,678
$
568,511
$
548,501
Cost of sales (excluding depreciation shown below)
192,891
209,865
399,968
403,770
Selling, general & administrative
51,123
42,137
100,501
92,631
Depreciation & amortization
7,487
7,314
14,854
14,679
Legal contingencies loss
—
1,338
7,464
1,338
Restructuring costs
3,566
1,942
5,182
1,942
(Gain) loss on sale of assets and businesses, net
—
(409)
—
12,208
Operating income
32,428
22,491
40,542
21,933
Interest expense and other, net
21,869
29,833
40,853
61,935
Debt modification and extinguishment (gain) loss
—
(688)
5,369
(4,079)
Warrant remeasurement gain
—
(544)
—
(8,545)
Non-service defined benefit expense (income)
1,468
(820)
2,501
(1,640)
Income tax (benefit) expense
(2,776)
1,019
(1,277)
2,279
Income (loss) from continuing operations
11,867
(6,309)
(6,904)
(28,017)
Income from discontinued operations, net of tax
—
5,013
4,680
8,558
Net income (loss)
$
11,867
$
(1,296)
$
(2,224)
$
(19,459)
Earnings (loss) per share - basic:
Earnings (loss) per share - continuing operations
$
0.15
$
(0.08)
$
(0.09)
$
(0.39)
Earnings per share - discontinued operations
—
0.06
0.06
0.12
Earnings (loss) per share - basic
$
0.15
$
(0.02)
$
(0.03)
$
(0.27)
Weighted average common shares outstanding - basic
77,343
76,447
77,252
71,368
Earnings (loss) per share - diluted:
Earnings (loss) per share - continuing operations
$
0.15
$
(0.08)
$
(0.09)
$
(0.39)
Earnings per share - discontinued operations
—
0.06
0.06
0.12
Earnings (loss) per share - diluted
$
0.15
$
(0.02)
$
(0.03)
$
(0.27)
Weighted average common shares outstanding - diluted
77,718
76,447
77,252
71,368
(Continued)
FINANCIAL DATA (UNAUDITED)
TRIUMPH GROUP, INC. AND SUBSIDIARIES
(dollars in thousands, except share data)
BALANCE SHEETS
UnauditedSeptember 30,2024
March 31,2024
Assets
Cash and cash equivalents
$
104,893
$
392,511
Accounts receivable, net
162,217
138,272
Contract assets
84,719
74,289
Inventory, net
393,824
317,671
Prepaid and other current assets
15,661
16,626
Current assets
761,314
939,369
Property and equipment, net
148,809
144,287
Goodwill
514,976
510,687
Intangible assets, net
60,703
65,063
Other, net
25,663
26,864
Total assets
$
