Triumph Reports Fourth Quarter Fiscal 2024 Results

Triumph Group, Inc. (NYSE: TGI) 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

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:

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.

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.