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TRIUMPH REPORTS FOUTH QUARTER FISCAL 2023 RESULTS

PROVIDES FISCAL YEAR 2024 GUIDANCE

RADNOR, Pa., May 17, 2023 /PRNewswire/ -- Triumph Group, Inc. (NYSE: TGI) ("TRIUMPH" or the "Company") today reported financial results for its fourth quarter and fiscal 2023, which ended March 31, 2023.

Fourth Quarter Fiscal 2023

  • Net sales of $393.3 million

  • Operating income of $56.2 million with operating margin of 14%; adjusted operating income of $59.9 million with adjusted operating margin of 15%

  • Net loss of ($17.5) million, or ($0.27) per share; adjusted net income of $34.5 million, or $0.39 per diluted share

  • Adjusted EBITDAP of $68.1 million with Adjusted EBITDAP margin of 17.3%

  • Cash flow generated from operations of $60.0 million; free cash flow of $51.8 million

Fiscal 2023

  • Net sales of $1.38 billion

  • Operating income of $238.1 million with operating margin of 17%, including $101.5 million gain on sale from our Stuart, Florida business; adjusted operating income of $158.7 million with adjusted operating margin of 11%

  • Net income of $89.6 million, or $1.20 per diluted share; adjusted net income of $55.4 million, or $0.77 per diluted share

  • Adjusted EBITDAP of $195.7 million with Adjusted EBITDAP margin of 14.0%

  • Cash flow used in operations of ($52.3) million; free cash use of ($72.9) million

  • Proactively addressed near term maturities through new $1.2 billion first lien secured financing

Fiscal 2024 Guidance

  • Net sales of $1.39 billion to $1.43 billion, reflecting 7 - 10% organic growth

  • Operating income of $165.0 million to $180.0 million, reflecting operating income margin of 12 - 16%

  • Adjusted EBITDAP of $210.0 million to $225.0 million, reflecting Adjusted EBITDAP margin of 15 - 16%

  • Cash flow from operations of $60.0 million to $80.0 million; free cash flow of $35.0 million to $50.0 million

"TRIUMPH ended our fiscal year 2023 on an upswing and exceeded both our Net Sales and our adjusted earnings per share guidance and successfully extending our debt maturities to enhance liquidity and financial flexibility," said Dan Crowley, TRIUMPH's chairman, president, and chief executive officer. "As our markets improve, we generated 21% organic sales growth from continuing operations in the quarter as a result of increasing commercial OEM production rates, accelerating MRO demand, and recovering military volumes. In addition, we delivered strong cash generation for the quarter and improved profitability on a year over year basis as supply chain constraints eased."

Mr. Crowley continued, "As a result of our healthy backlog and recent wins, we anticipate organic growth of 7 - 10% as well as continued margin expansion and positive free cash flow generation in fiscal 2024.  We will also maintain our focus on deleveraging and optimizing our capital structure over time.  As we execute on our financial and operational goals, TRIUMPH remains on track to deliver profitable growth and enhance shareholder value."

Fourth Quarter and Full Year Fiscal 2023 Overview



Three Months Ended March 31,



Year Ended March 31,


($ in millions)


2023



2022



2023



2022


Commercial OEM


$

140.7



$

165.0



$

543.5



$

645.9


Military OEM



80.1




74.7




261.1




292.4


Total OEM Revenue



220.8




239.7




804.6




938.3















Commercial Aftermarket



95.6




65.6




325.5




245.0


Military Aftermarket



63.9




54.6




213.0




224.4


Total Aftermarket Revenue



159.5




120.2




538.5




469.4















Non-Aviation Revenue



12.3




24.5




33.6




46.4


Amortization of acquired contract liabilities



0.7




2.2




2.5




5.9


Total Net Sales*


$

393.3



$

386.7



$

1,379.1



$

1,459.9


* 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, fiscal year organic Commercial OEM sales increased $104.5 million, or 28.7% with over half the improvement driven by increased production volumes on the Boeing 737 program, as well as an increases across other commercial fixed wing and rotorcraft programs and an intellectual property transaction.

Military OEM sales decreased $31.3 million, or (10.7)% primarily due to divestitures, as well as lower sales related to the E2-D and AH-64 programs. The decreased sales were partially offset by increased sales related to the CH-53K, and CH-47 programs.

Commercial Aftermarket sales increased  $80.6 million, or 32.9%.  Excluding impacts from divestitures, organic Commercial Aftermarket sales increased $86.9 million, or 36.8%, driven by the recovery in overall air travel metrics and including increased sales primarily across Boeing 737 commercial platform fleets.

Military aftermarket sales increased $9.3 million, or 17.1% for the fourth quarter of fiscal 2023 relative to the prior year, partially reversing the headwinds experienced in this end market from earlier in the fiscal year.

Increased aftermarket sales improved margins in both the fourth quarter and full fiscal year.

Fourth quarter operating income of $56.2 million includes $2.1 million of restructuring costs and $1.6 million reduction of prior period gain on sale assets and businesses. Net loss for the fourth quarter of 2023 was ($17.5) million or $(0.27) per share and includes $31.6 million in debt extinguishment costs associated with our recent refinancing, $14.6 million in pension settlement charges associated with a multi-employer plan obligation and $2.1 for warrant related items.

TRIUMPH's results included the following:

($ millions except EPS)


Pre-tax



After-tax



Diluted EPS


Loss from Continuing Operations - GAAP


$

(15.4)



$

(17.5)



$

(0.27)


Adjustments










Warrant related items



2.1




2.1




0.09


Loss on sale of assets and businesses, net



1.6




1.6




0.02


Restructuring costs



2.1




2.1




0.02


Debt extinguishment losses



31.6




31.6




0.36


Spokane withdrawal liability



14.6




14.6




0.17


Adjusted Income from Continuing Operations - non-GAAP


$

36.7



$

34.6



$

0.39


 

The number of shares used in computing adjusted diluted earnings per share for the fourth quarter of 2023 was 87.9 million.

Backlog, which represents the next 24 months of actual purchase orders with firm delivery dates or contract requirements, was $1.58 billion, up 11% from prior fiscal year end, after adjusting for the impact of the Stuart divestiture. This increase was primarily on commercial narrow body platforms.

For the fourth quarter of fiscal 2023, cash flow provided by operations was $60.0 million.

Outlook

The Company expects net sales for fiscal 2024 will be $1.39 billion to $1.43 billion, reflecting an organic growth rate of 7% - 10%, after excluding approximately $77.9 million in fiscal 2023 revenues from exited businesses.

The Company expects fiscal 2024 operating income of $165.0 million to $180.0 million, and Adjusted EBITDAP of $210.0 million to $225.0 million.

The Company expects fiscal 2024 cash flow from operations of $60.0 million to $80.0 million and approximately $25.0 million to $30.0 million for capital expenditures, resulting in expected free cash flow of $35.0 million to $50.0 million.

Conference Call

TRIUMPH will hold a conference call today, May 17th, at 8:30 a.m. (ET) to discuss the fourth quarter of fiscal 2023 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 http://ir.triumphgroup.com/QuarterlyResults. An audio replay will be available from May 17th to May 24th by calling (877) 344-7529 (Domestic) or (412) 317-0088 (International), passcode #2434836.

About TRIUMPH

TRIUMPH, headquartered in Radnor, Pennsylvania, designs, engineers, manufactures, repairs and overhauls a broad portfolio of aerospace and defense systems and components. The company serves the global aviation industry, including original equipment manufacturers and the full spectrum of military and commercial aircraft operators.

More information about TRIUMPH can be found on the Company's website at www.triumphgroup.com.

Forward Looking Statements

Statements in this release which are not historical facts are forward-looking statements under the provisions of the Private Securities Litigation Reform Act of 1995, including statements of expectations of or assumptions about financial and operational performance, revenues, earnings per share, cash flow or use, cost savings and operational efficiencies and organizational restructurings.  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, 2022.

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


2023



2022



2023



2022


Net sales


$

393,289



$

386,651



$

1,379,128



$

1,459,942


Cost of sales (excluding depreciation shown below)



270,936




284,722




991,599




1,073,063


Selling, general & administrative



53,998




49,295




210,430




202,070


Depreciation & amortization



8,466




9,600




35,581




49,635


Impairment of long-lived assets and goodwill






2,308







2,308


Restructuring costs



2,098




6,264




4,949




19,295


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



1,640




(4,335)




(101,523)




9,294


Operating income



56,151




38,797




238,092




104,277


Interest expense and other, net



36,988




30,801




137,714




135,861


Debt extinguishment loss



31,603







33,044




11,624


Warrant remeasurement gain



(3,146)







(8,683)





Non-service defined benefit expense (income)



6,061




17,754




(19,664)




(5,373)


Income tax expense



2,188




817




6,088




4,923


Net (loss) income


$

(17,543)



$

(10,575)



$

89,593



$

(42,758)


(Loss) earnings per share - basic:













Net (loss) income


$

(0.27)



$

(0.16)



$

1.38



$

(0.66)


Weighted average common shares outstanding - basic



65,189




64,640




65,021




64,538


(Loss) earnings per share - diluted:













Net (loss) income


$

(0.27)



$

(0.16)



$

1.20



$

(0.66)


Weighted average common shares outstanding - diluted



65,189




64,640




71,721




64,538


 

(Continued)

FINANCIAL DATA (UNAUDITED)


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


BALANCE SHEETS


Unaudited
March 31,
2023



Audited
March 31,
2022


Assets







Cash and cash equivalents


$

227,403



$

240,878


Accounts receivable, net



196,775




178,663


Contract assets



103,027




101,828


Inventory, net



389,245




361,692


Prepaid and other current assets



17,062




19,903


Assets held for sale






60,104


Current assets



933,512




963,068


Property and equipment, net



166,800




169,050


Goodwill



509,449




513,722


Intangible assets, net



73,898




84,850


Other, net



31,185




30,476


Total assets


$

1,714,844



$

1,761,166


Liabilities & Stockholders' Deficit







Current portion of long-term debt


$

3,162



$

3,268


Accounts payable



197,932




161,534


Contract liabilities



44,482




171,763


Accrued expenses



151,348




208,059


Liabilities related to assets held for sale






57,519


Current liabilities



396,924




602,143


Long-term debt, less current portion



1,688,620




1,586,222


Accrued pension and post-retirement benefits, noncurrent



359,375




301,303


Deferred income taxes, noncurrent



7,268




7,213


Other noncurrent liabilities



60,053




51,708


Stockholders' Deficit:







Common stock, $.001 par value, 100,000,000 shares authorized,
65,432,589
   and 64,629,279 shares issued



65




64


Capital in excess of par value



964,741




973,112


Treasury stock, at cost, 0 and 14,897 shares






(96)


Accumulated other comprehensive loss



(554,646)




(463,354)


Accumulated deficit



(1,207,556)




(1,297,149)


Total stockholders' deficit



(797,396)




(787,423)


Total liabilities and stockholders' deficit


$

1,714,844



$

1,761,166


 

(Continued)

FINANCIAL DATA (UNAUDITED)


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




Fiscal Year Ended March 31




2023



2022


Operating Activities







Net income (loss)


$

89,593



$

(42,758)


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







Depreciation and amortization



35,575




49,635


Impairment of long-lived assets






2,308


Amortization of acquired contract liability



(2,500)




(5,871)


(Gain) loss on sale of assets and businesses



(101,523)




9,294


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



14,644




52,005


Gain on debt redemption of 2024 Second Lien Notes



(24,944)





Other amortization included in interest expense



12,872




9,047


Provision for credit losses



1,594




452


Provision (benefit) for deferred income taxes



14




25


Warrants remeasurement gain



(9,796)





Share-based compensation



8,913




9,782


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







Trade and other receivables



(26,433)




2,822


Contract assets



(9,055)




702


Inventories



(28,187)




25,642


Prepaid expenses and other current assets



1,970




(1,122)


Accounts payable, accrued expenses, and contract liabilities



15,368




(189,412)


Accrued pension and other postretirement benefits



(32,562)




(58,597)


Other, net



2,206




(970)


Net cash used in operating activities



(52,251)




(137,016)


Investing Activities







Capital expenditures



(20,676)




(19,660)


(Payments on) proceeds from sale of assets and businesses



(6,220)




224,518


Investment in joint venture



(272)




(2,101)


Purchase of facility related to divested businesses






(21,550)


Net cash (used in) provided by investing activities



(27,168)




181,207


Financing Activities







Net increase in revolving credit facility







Proceeds from issuance of long-term debt



1,235,000




107


Retirement of debt and finance lease obligations



(1,101,520)




(380,009)


Payment of deferred financing costs



(17,097)




(400)


Proceeds on issuance of common stock, net of issuance costs



4,090





Premium on redemption of Senior Notes



(51,138)




(9,108)


Repurchase of shares for share-based compensation
   minimum tax obligation



(3,547)




(3,249)


Net cash provided by (used in) financing activities



65,788




(392,659)


Effect of exchange rate changes on cash



156




(536)


Net change in cash and cash equivalents



(13,475)




(349,004)


Cash and cash equivalents at beginning of period



240,878




589,882


Cash and cash equivalents at end of period


$

227,403



$

240,878


 

(Continued)

FINANCIAL DATA (UNAUDITED)


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




Three Months Ended



Year Ended




March 31,



March 31,


SEGMENT DATA


2023



2022



2023



2022


Net sales:













Systems & Support


$

353,414



$

286,969



$

1,167,533



$

1,030,444


Interiors (formerly Aerospace Structures)



39,878




99,684




211,647




429,547


Elimination of inter-segment sales



(3)




(2)




(52)




(49)




$

393,289



$

386,651



$

1,379,128



$

1,459,942


Operating income:













Systems & Support


$

71,306



$

49,237



$

190,863



$

163,450


Interiors (formerly Aerospace Structures)



2,424




2,666




11,069




13,982


Corporate



(15,086)




(10,988)




45,073




(63,373)


Share-based compensation expense



(2,493)




(2,118)




(8,913)




(9,782)




$

56,151



$

38,797



$

238,092



$

104,277


Operating margin %













Systems & Support



20.2

%



17.2

%



16.3

%



15.9

%

Interiors (formerly Aerospace Structures)



6.1

%



2.7

%



5.2

%



3.3

%

Consolidated



14.3

%



10.0

%



17.3

%



7.1

%














Depreciation and amortization^:













Systems & Support


$

7,334



$

7,699



$

29,781



$

32,464


Interiors (formerly Aerospace Structures)



624




3,556




3,683




16,234


Corporate



508




653




2,117




3,245




$

8,466



$

11,908



$

35,581



$

51,943


Amortization of acquired contract liabilities:













Systems & Support


$

(668)



$

(2,226)



$

(2,500)



$

(5,859)


Interiors (formerly Aerospace Structures)












(12)




$

(668)



$

(2,226)



$

(2,500)



$

(5,871)


 

FINANCIAL DATA (UNAUDITED)

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

Non-GAAP Financial Measure Disclosures

We prepare and publicly release annual audited and quarterly unaudited financial statements prepared in accordance with U.S. GAAP. In accordance with Securities and Exchange Commission (the "SEC") rules, we also disclose and discuss certain non-GAAP financial measures in our public filings and earning releases. Currently, the non-GAAP financial measures that we disclose are Adjusted EBITDA, which is our net income (loss) before interest and gains or losses on debt extinguishment, income taxes, amortization of acquired contract liabilities, consideration payable to customer related to divestitures, legal judgments and settlements, gains/loss on divestitures, gains/losses on warrant remeasurements and warrant-related transaction costs, share-based compensation expense, depreciation and amortization (including impairment of long-lived assets), other non-recurring impairments, and the effects of certain pension charges such as curtailments, settlements, withdrawals, and other early retirement incentives; and Adjusted EBITDAP, which is Adjusted EBITDA, before pension expense or benefit (excluding pension charges already adjusted in Adjusted EBITDA). We disclose Adjusted EBITDA on a consolidated and Adjusted EBITDAP on a consolidated and a reportable segment basis in our earnings releases, investor conference calls and filings with the SEC. The non-GAAP financial measures that we use may not be comparable to similarly titled measures reported by other companies. Also, in the future, we may disclose different non-GAAP financial measures in order to help our investors more meaningfully evaluate and compare our future results of operations with our previously reported results of operations.

We view Adjusted EBITDA and Adjusted EBITDAP as operating performance measures and, as such, we believe that the U.S. GAAP financial measure most directly comparable to such measures is net income (loss). In calculating Adjusted EBITDA and Adjusted EBITDAP, we exclude from net income (loss) the financial items that we believe should be separately identified to provide additional analysis of the financial components of the day-to-day operation of our business. We have outlined below the type and scope of these exclusions and the material limitations on the use of these non-GAAP financial measures as a result of these exclusions. Adjusted EBITDA and Adjusted EBITDAP are not measurements of financial performance under U.S. GAAP and should not be considered as a measure of liquidity, as an alternative to net income (loss), or as an indicator of any other measure of performance derived in accordance with U.S. GAAP. Investors and potential investors in our securities should not rely on Adjusted EBITDA or Adjusted EBITDAP as a substitute for any U.S. GAAP financial measure, including net income (loss). In addition, we urge investors and potential investors in our securities to carefully review the reconciliation of Adjusted EBITDA and Adjusted EBITDAP to net income (loss) set forth below, in our earnings releases, and in other filings with the SEC and to carefully review the U.S. GAAP financial information included as part of our Quarterly Reports on Form 10-Q and our Annual Reports on Form 10-K that are filed with the SEC, as well as our quarterly earnings releases, and compare the U.S. GAAP financial information with our Adjusted EBITDA and Adjusted EBITDAP.

Adjusted EBITDA and Adjusted EBITDAP are used by management to internally measure our operating and management performance and by investors as a supplemental financial measure to evaluate the performance of our business that, when viewed with our U.S. GAAP results and the accompanying reconciliation, we believe provides additional information that is useful to gain an understanding of the factors and trends affecting our business. We have spent more than 20 years expanding our product and service capabilities, partially through acquisitions of complementary businesses. Due to the expansion of our operations, which included acquisitions, our net income (loss) has included significant charges for depreciation and amortization. Adjusted EBITDA and Adjusted EBITDAP exclude these charges and provide meaningful information about the operating performance of our business, apart from charges for depreciation and amortization. We believe the disclosure of Adjusted EBITDA and Adjusted EBITDAP helps investors meaningfully evaluate and compare our performance from quarter to quarter and from year to year. We also believe Adjusted EBITDA and Adjusted EBITDAP are measures of our ongoing operating performance because the isolation of noncash charges, such as depreciation and amortization, and nonoperating items, such as interest, income taxes, pension and other postretirement benefits, provides additional information about our cost structure and, over time, helps track our operating progress. In addition, investors, securities analysts, and others have regularly relied on Adjusted EBITDA and Adjusted EBITDAP to provide financial measures by which to compare our operating performance against that of other companies in our industry.

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

  • Gains or losses from sale of assets and businesses may be useful for investors to consider because they reflect gains or losses from sale of operating units or other assets. We do not believe these earnings necessarily reflect the current and ongoing cash earnings related to our operations.

  • Warrants remeasurement gains or losses and warrant-related transaction costs may be useful for investors to consider because they reflect the mark-to-market changes in the fair value of our warrants and the costs associated with warrants issuance or settlement. We do not believe these earnings necessarily reflect the current and ongoing cash earnings related to our operations.

  • Consideration payable to a customer related to a divestiture may be useful for investors to consider because it reflects consideration paid to facilitate the ultimate sale of operating units. We do not believe these charges necessarily reflect the current and ongoing cash earnings related to our operations.

  • Legal judgments and settlements, when applicable, may be useful for investors to consider because it reflects gains or losses from disputes with third parties. We do not believe these earnings necessarily reflect the current and ongoing cash earnings related to our operations.

  • Non-service defined benefit income or expense from our pension and other postretirement benefit plans (inclusive of certain pension related transactions such as curtailments, settlements, withdrawal, and early retirement or other incentives) may be useful for investors to consider because they represent the cost of postretirement benefits to plan participants, net of the assumption of returns on the plan's assets and are not indicative of the cash paid for such benefits. We do not believe these earnings necessarily reflect the current and ongoing cash earnings related to our operations.

  • Amortization of acquired contract liabilities may be useful for investors to consider because it represents the noncash earnings on the fair value of off-market contracts acquired through acquisitions. We do not believe these earnings necessarily reflect the current and ongoing cash earnings related to our operations.

  • Amortization expense and nonrecurring asset impairments (including goodwill, intangible asset impairments, and nonrecurring rotable inventory impairments) may be useful for investors to consider because it represents the estimated attrition of our acquired customer base and the diminishing value of trade names, product rights, licenses, or, in the case of goodwill, other assets that are not individually identified and separately recognized under U.S. GAAP, or, in the case of nonrecurring asset impairments, the impact of unusual and nonrecurring events affecting the estimated recoverability of existing assets. We do not believe these charges necessarily reflect the current and ongoing cash charges related to our operating cost structure.

  • Depreciation may be useful for investors to consider because it generally represents the wear and tear on our property and equipment used in our operations. We do not believe these charges necessarily reflect the current and ongoing cash charges related to our operating cost structure.

  • Share-based compensation may be useful for investors to consider because it represents a portion of the total compensation to management and the board of directors. We do not believe these charges necessarily reflect the current and ongoing cash charges related to our operating cost structure.

  • 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.

(Continued)

FINANCIAL DATA (UNAUDITED)

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

Management compensates for the above-described limitations of using non-GAAP measures by using a non-GAAP measure only to supplement our GAAP results and to provide additional information that is useful to gain an understanding of the factors and trends affecting our business.

The following table shows our Adjusted EBITDA and Adjusted EBITDAP reconciled to our net income 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):


2023



2022



2023



2022


Net (loss) income


$

(17,543)



$

(10,575)



$

89,593



$

(42,758)


Add-back:













Income tax expense



2,188




817




6,088




4,923


Interest expense and other, net



36,988




30,801




137,714




135,861


Debt extinguishment loss



31,603







33,044




11,624


Warrant remeasurement gain



(3,146)







(8,683)





Pension charges



14,644




31,959




14,644




52,005


Consideration Payable to customer related to
divestiture









17,185





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



1,640




(4,335)




(101,523)




9,294


Share-based compensation



2,493




2,118




8,913




9,782


Amortization of acquired contract liabilities



(668)




(2,226)




(2,500)




(5,871)


Depreciation and amortization



8,466




11,908




35,581




51,943


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


$

76,665



$

60,467



$

230,056



$

226,803


Non-service defined benefit income (excluding
settlements)



(8,583)




(14,205)




(34,308)




(57,378)


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


$

68,082



$

46,262



$

195,748



$

169,425


Net sales


$

393,289



$

386,651



$

1,379,128



$

1,459,942


Net income margin



(4.5)

%



(2.7)

%



6.5

%



(2.9)

%

Adjusted EBITDAP margin



17.3

%



12.0

%



14.0

%



11.7

%

 

(Continued)

FINANCIAL DATA (UNAUDITED)


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




Three Months Ended March 31, 2023







Segment Data


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


Total



Systems &
Support



Interiors#



Corporate/
Eliminations*


Net loss


$

(17,543)











Add-back:













Non-service defined benefit expense



6,061











Income tax expense



2,188











Warrant remeasurement gain



(3,146)











Debt extinguishment loss



31,603











Interest expense and other, net



36,988











Operating income (loss)


$

56,151



$

71,306



$

2,424



$

(17,579)


Loss on sales of assets & businesses, net



1,640










1,640


Share-based compensation



2,493










2,493


Amortization of acquired contract liabilities



(668)




(668)








Depreciation and amortization



8,466




7,334




624




508


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


$

68,082



$

77,972



$

3,048



$

(12,938)


Net sales


$

393,289



$

353,414



$

39,878



$

(3)


Adjusted EBITDAP margin



17.3

%



22.1

%



7.6

%


n/a






Year Ended March 31, 2023







Segment Data


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


Total



Systems &
Support



Interiors#



Corporate/
Eliminations*


Net income


$

89,593











Add-back:













Non-service defined benefit income



(19,664)











Income tax expense



6,088











Warrant remeasurement gain, net



(8,683)











Debt extinguishment loss



33,044











Interest expense and other, net



137,714











Operating income


$

238,092



$

190,863



$

11,069



$

36,160


Gain on sales of assets & businesses, net



(101,523)










(101,523)


Consideration payable to customer related to
divestiture



17,185







17,185





Share-based compensation



8,913










8,913


Amortization of acquired contract liabilities



(2,500)




(2,500)








Depreciation and amortization



35,581




29,781




3,683




2,117


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


$

195,748



$

218,144



$

31,937



$

(54,333)


Net sales


$

1,379,128



$

1,167,533



$

211,647



$

(52)


Adjusted EBITDAP margin



14.0

%



18.7

%



14.0

%


n/a


 

(Continued)

FINANCIAL DATA (UNAUDITED)


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


Non-GAAP Financial Measure Disclosures (continued)




Three Months Ended March 31, 2022







Segment Data


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


Total



Systems &
Support



Interiors#



Corporate/
Eliminations*


Net loss


$

(10,575)











Add-back:













Non-service defined benefit expense



17,754











Income tax expense



817











Interest expense and other, net



30,801











Operating income (loss)


$

38,797



$

49,237



$

2,666



$

(13,106)


Gain on sales of assets & businesses, net



(4,335)










(4,335)


Share-based compensation



2,118










2,118


Amortization of acquired contract liabilities



(2,226)




(2,226)








Depreciation and amortization



11,908




7,699




3,556




653


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


$

46,262



$

54,710



$

6,222



$

(14,670)


Net sales


$

386,651



$

286,969



$

99,684



$

(2)


Adjusted EBITDAP margin



12.0

%



19.2

%



6.2

%


n/a






Year Ended March 31, 2022







Segment Data


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


Total



Systems &
Support



Interiors#



Corporate/
Eliminations*


Net loss


$

(42,758)











Add-back:













Non-service defined benefit income



(5,373)











Income tax expense



4,923











Debt extinguishment loss



11,624











Interest expense and other, net



135,861











Operating income (loss)


$

104,277



$

163,450



$

13,982



$

(73,155)


Loss on sales of assets & businesses, net



9,294










9,294


Share-based compensation



9,782










9,782


Amortization of acquired contract liabilities



(5,871)




(5,859)




(12)





Depreciation and amortization



51,943




32,464




16,234




3,245


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


$

169,425



$

190,055



$

30,204



$

(50,834)


Net sales


$

1,459,942



$

1,030,444



$

429,547



$

(49)


Adjusted EBITDAP margin



11.7

%



18.5

%



7.0

%


n/a


 

(Continued)

FINANCIAL DATA (UNAUDITED)

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

Non-GAAP Financial Measure Disclosures (continued)

Adjusted income from continuing operations, before income taxes, adjusted income from continuing operations and adjusted income from continuing operations per diluted share, before non-recurring costs have been provided for consistency and comparability. These measures should not be considered in isolation or as alternatives to income from continuing operations before income taxes, income from continuing operations and income from continuing operations per diluted share presented in accordance with GAAP.  The following tables reconcile income from continuing operations before income taxes, income from continuing operations, and income from continuing operations per diluted share, before non-recurring costs.



Three Months Ended
March 31, 2023




Pre-Tax



After-Tax



Diluted EPS


Loss from continuing operations - GAAP


$

(15,355)



$

(17,543)



$

(0.27)


Adjustments:










Warrant related items



2,083




2,083




0.09


Loss on sale of assets and businesses, net



1,640




1,640




0.02


Restructuring costs



2,098




2,098




0.02


Debt extinguishment loss



31,603




31,603




0.36


Spokane pension withdrawal



14,644




14,644




0.17


Adjusted income from continuing operations - non-GAAP


$

36,713



$

34,525



$

0.39


 



Year Ended
March 31, 2023




Pre-Tax



After-Tax



Diluted EPS


Income from continuing operations - GAAP


$

95,681



$

89,593





GAAP EPS Numerator Adjustments:










Warrant related items


$

(3,626)



$

(3,626)















GAAP EPS Numerator:


$

92,055



$

85,967



$

1.20


Adjustments:










Gain on sale of assets and businesses, net



(101,523)




(101,523)




(1.42)


Restructuring costs



4,949




4,949




0.07


Consideration payable to customer related to divestiture^



17,185




17,185




0.24


Debt 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*


$

61,467



$

55,379



$

0.77


 



Three Months Ended
March 31, 2022




Pre-Tax



After-Tax



Diluted EPS


Loss from continuing operations - GAAP


$

(9,758)



$

(10,575)



$

(0.16)


Adjustments:










Gain on sale of assets and businesses, net



(4,335)




(4,335)




(0.07)


Restructuring costs (cash based)



6,264




6,264




0.10


Restructuring costs (non-cash - long-lived asset impairment)



2,308




2,308




0.04


Pension charges



31,959




31,959




0.49


Adjusted income from continuing operations - non-GAAP*


$

26,438



$

25,621




0.39


 

(Continued)

FINANCIAL DATA (UNAUDITED)


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




Year Ended
March 31, 2022




Pre-Tax



After-Tax



Diluted EPS


Loss from continuing operations - GAAP


$

(37,835)



$

(42,758)



$

(0.66)


Adjustments:










Loss on sale of assets and businesses, net



9,294




9,294




0.14


Restructuring costs (cash based)



19,295




19,295




0.30


Restructuring costs (non-cash - long-lived asset impairment)



2,308




2,308




0.04


Pension charges



52,005




52,005




0.80


Debt extinguishment loss



11,624




11,624




0.18


Adjusted income from continuing operations - non-GAAP*


$

56,691



$

51,768



$

0.79


 

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,




2023



2022



2023



2022


Operating income - GAAP


$

56,151



$

38,797



$

238,092



$

104,277


Adjustments:













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



1,640




(4,335)




(101,523)




9,294


Restructuring costs (cash based)



2,098




6,264




4,949




19,295


Restructuring costs (non-cash - long-lived asset
impairment)






2,308







2,308


Consideration payable to customer related to divestiture









17,185





Adjusted operating income - non-GAAP


$

59,889



$

43,034



$

158,703



$

135,174


 



Fiscal 2024

($ in millions)


Guidance

Operating Income


$165.0 - $180.0

Adjustments:



Depreciation & Amortization


$38.0

Amortization of acquired contract liabilities


($3.0)

Share-based compensation


$10.0

Adjusted EBITDAP - non-GAAP


$210.0 - $225.0

 

(Continued)

FINANCIAL DATA (UNAUDITED)

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

Cash provided by operations, is provided for consistency and comparability. We also use free cash flow as a key factor in planning for and consideration of strategic acquisitions and the repayment of debt. This measure should not be considered in isolation, as a measure of residual cash flow available for discretionary purposes, or as an alternative to operating results presented in accordance with GAAP. The following table reconciles cash provided by operations to free cash flow.



Three Months Ended
March 31,



Fiscal Year Ended
March 31,



Fiscal 2024
Guidance

$ in millions


2023



2022



2023



2022




Cash used in operating activities


$

60.0



$

33.0



$

(52.3)



$

(137.0)



$  60.0 - $  80.0

Less:















Capital expenditures



(8.3)




(3.9)




(20.7)




(19.7)



$ (25.0) - $ (30.0)

Free cash use


$

51.8



$

29.1



$

(72.9)



$

(156.7)



$ 35.0 - $ 50.0

 

Cision
Cision

View original content:https://www.prnewswire.com/news-releases/triumph-reports-fouth-quarter-fiscal-2023-results-301826726.html

SOURCE Triumph Group