Form 8-K TRIUMPH GROUP INC For: May 18

 

Exhibit 99.1

 

 

NEWS RELEASE

 

Contact: April Harper Director, Marketing & Communications Phone (610) 251-1000 [email protected]			Thomas A. Quigley, III VP, Investor Relations and Controller Phone (610) 251-1000 [email protected]

 

TRIUMPH'S FOURTH QUARTER FISCAL 2022 RESULTS

DEMONSTRATE IMPROVING PROFITABILITY AND CASH FLOW;

PROVIDES FISCAL 2023 GUIDANCE

 

 

BERWYN, Pa. – May 18, 2022 – Triumph Group, Inc. (NYSE: TGI) ("TRIUMPH" or the “Company”) today reported financial results for its fourth quarter and fiscal 2022, which ended March 31, 2022.

 

Fourth Quarter Fiscal 2022

 

Fiscal 2022

 

Fiscal 2023 Guidance

“TRIUMPH continued to deliver improving operating margin and cash flow, both sequentially and year over year, thanks to our talented and dedicated global team.” stated Dan Crowley, TRIUMPH’s chairman, president and chief executive officer. “We are pleased to provide financial outlook for fiscal 2023 powered by the diversity of our people, our highly engineered products, and the programs and markets we serve. With a growing and profitable backlog, TRIUMPH is well positioned to benefit from continued strength in military and freighter markets and the anticipated recovery in commercial aviation production and aftermarket demand over the next several years.”

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“Mr. Crowley continued, “During fiscal 2022 we completed several important milestones including divesting our build to print metallic structures businesses, completing 747 production and streamlining our organizational structure to reduce cost and enhance communication and efficiencies. In fiscal 2023 we will expand our investment in operations, products and people to maximize value for all stakeholders.”

 

Fourth Quarter Fiscal 2022 Overview

Excluding divestitures and sunsetting programs, sales for the fourth quarter of fiscal 2022 were down 2% organically from the prior year period due to declines in commercial widebody production and timing of military OEM deliveries, partially offset by increases in commercial narrow body production.

Fourth quarter operating income of $38.8 million includes $8.6 million of restructuring costs related to our structures facility exits and $4.3 million reduction of prior period losses on sales of assets and businesses. Cost of sales benefited from the Aviation Manufacturing Jobs Protection Program by $11.4 million in the quarter. Net loss for the fourth quarter of fiscal 2022 was $10.6 million, or ($0.16) per share and includes $32.0 million non-cash pension settlement charge on the partial annuitization of pension benefits. On an adjusted basis, net income was $25.6 million, or $0.39 per diluted share.

TRIUMPH’s results included the following:

($ millions except EPS)		Pre-tax				After-tax				Diluted EPS
Loss from Continuing Operations - GAAP		$	(9.8	)		$	(10.6	)		$	(0.16	)
Gain on sale of assets and businesses, net			(4.3	)			(4.3	)			(0.07	)
Restructuring costs (cash)			6.3				6.3				0.10
Restructuring costs (non-cash)			2.3				2.3				0.04
Pension charges			32.0				32.0				0.49
Adjusted Income from Continuing Operations - non-GAAP *		$	26.4			$	25.6			$	0.39

* Differences due to rounding

 

The number of shares used in computing diluted earnings per share for the fourth quarter of 2022 was 65.4 million.

Adjusting for the pending Stuart divestiture, backlog, which represents the next 24 months of actual purchase orders with firm delivery dates or contract requirements, was $1.42 billion, up 6% from the prior year, primarily on commercial narrow body platforms.

 

For the fourth quarter of fiscal 2022, cash flow provided by operations was $33.0 million.

 

Outlook

The Company's outlook reflects adjustments detailed in the attached tables and assumes a first quarter of fiscal 2023 closure on our Stuart facility divestiture and the resolution of the related customer advances.

 

Based on anticipated aircraft production rates, the Company expects net sales for fiscal 2023 will be approximately $1.2 billion to $1.3 billion.

The Company expects GAAP fiscal 2023 earnings per diluted share of $0.40 to $0.60.

The Company expects fiscal 2023 cash used in operations of ($30.0) million to ($40.0) million, including core cash flow from operations of approximately $30.0 million to $45.0 million and core free cash flow of approximately break-even to $15.0 million.

 

Conference Call

 

TRIUMPH will hold a conference call today, May 18th, at 8:30 a.m. (ET) to discuss the fourth quarter of fiscal 2022 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 18th to May 25th by calling (877) 344-7529 (Domestic) or (412) 317-0088 (International), passcode #5049523.

 

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About TRIUMPH

 

TRIUMPH, headquartered in Berwyn, Pennsylvania, designs, engineers, manufactures, repairs and overhauls a broad portfolio of aerospace and defense systems, components and structures. 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, 2021.

 

Widespread health developments, including the recent global coronavirus (COVID-19), and the responses thereto (such as voluntary and in some cases, mandatory quarantines as well as shut downs and other restrictions on travel and commercial, social and other activities) could adversely and materially affect, among other things, the economic and financial markets and labor resources of the countries in which we operate, our manufacturing and supply chain operations, commercial operations and sales force, administrative personnel, third-party service providers, business partners and customers and the demand for our products, which could result in a material adverse effect on our business, financial conditions and results of operations.

 

FINANCIAL DATA (UNAUDITED) ON FOLLOWING PAGES

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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		2022				2021				2022				2021
Net sales		$	386,651			$	466,833			$	1,459,942			$	1,869,719
Cost of sales (excluding depreciation shown below)			284,722				359,598				1,073,063				1,476,266
Selling, general & administrative			49,295				53,773				202,070				215,962
Depreciation & amortization			9,600				20,515				49,635				93,334
Impairment of long-lived assets and goodwill			2,308				—				2,308				252,382
Restructuring costs			6,264				20,477				19,295				53,224
(Gain) loss on sale of assets and businesses, net			(4,335	)			58,682				9,294				104,702
Operating income (loss)			38,797				(46,212	)			104,277				(326,151	)
Interest expense and other, net			30,801				39,053				135,861				171,397
Debt extinguishment loss			—				—				11,624				—
Non-service defined benefit expense (income)			17,754				(12,244	)			(5,373	)			(49,519	)
Income tax expense			817				498				4,923				2,881
Net loss		$	(10,575	)		$	(73,519	)		$	(42,758	)		$	(450,910	)
Loss per share - basic:
Net loss		$	(0.16	)		$	(1.27	)		$	(0.66	)		$	(8.55	)
Weighted average common shares outstanding - basic			64,640				57,920				64,538				52,739
Loss per share - diluted:
Net loss		$	(0.16	)		$	(1.27	)		$	(0.66	)		$	(8.55	)
Weighted average common shares outstanding - diluted			64,640				57,920				64,538				52,739
Dividends declared and paid per common share		$	—			$	—			$	—			$	—

 

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FINANCIAL DATA (UNAUDITED)

TRIUMPH GROUP, INC. AND SUBSIDIARIES

(dollars in thousands, except share data)

BALANCE SHEETS		Unaudited March 31, 2022				Audited March 31, 2021
Assets
Cash and cash equivalents		$	240,878			$	589,882
Accounts receivable, net			178,663				194,066
Contract assets			101,828				134,638
Inventory, net			361,692				400,366
Prepaid and other current assets			19,437				19,206
Assets held for sale			60,104				216,276
Current assets			962,602				1,554,434
Property and equipment, net			169,050				211,369
Goodwill			513,722				521,638
Intangible assets, net			84,850				102,453
Other, net			30,476				61,041
Total assets		$	1,760,700			$	2,450,935
Liabilities & Stockholders' Deficit
Current portion of long-term debt		$	3,268			$	5,247
Accounts payable			161,534				179,473
Contract liabilities			171,763				204,379
Accrued expenses			207,420				271,160
Liabilities related to assets held for sale			57,519				58,108
Current liabilities			601,504				718,367
Long-term debt, less current portion			1,586,222				1,952,296
Accrued pension and post-retirement benefits, noncurrent			301,303				384,256
Deferred income taxes, noncurrent			7,386				7,491
Other noncurrent liabilities			51,708				207,378
Stockholders' Deficit:
Common stock, $.001 par value, 100,000,000 shares authorized, 64,629,279    and 64,488,674 shares issued			64				64
Capital in excess of par value			973,112				978,272
Treasury stock, at cost, 14,897 and 303,673 shares			(96	)			(12,606	)
Accumulated other comprehensive loss			(463,354	)			(530,192	)
Accumulated deficit			(1,297,149	)			(1,254,391	)
Total stockholders' deficit			(787,423	)			(818,853	)
Total liabilities and stockholders' deficit		$	1,760,700			$	2,450,935

 

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FINANCIAL DATA (UNAUDITED)

TRIUMPH GROUP, INC. AND SUBSIDIARIES

(dollars in thousands, except share data)

 

		Fiscal Year Ended March 31
		2022				2021
Operating Activities
Net loss		$	(42,758	)		$	(450,910	)
Adjustments to reconcile net loss to net cash used in    operating activities:
Depreciation and amortization			49,635				93,334
Impairment of long-lived assets			2,308				252,382
Amortization of acquired contract liability			(5,870	)			(38,564	)
Loss on sale of assets and businesses			9,294				104,702
Curtailments, settlements, and special termination benefits loss, net			52,005				—
Other amortization included in interest expense			9,047				23,759
Provision for credit losses			452				4,853
Provision (benefit) for deferred income taxes			25				(176	)
Share-based compensation			9,782				12,701
Changes in other assets and liabilities, excluding the effects of    acquisitions and divestitures:
Trade and other receivables			2,822				126,294
Contract assets			702				46,841
Inventories			25,642				35,412
Prepaid expenses and other current assets			(1,122	)			(310	)
Accounts payable, accrued expenses, and contract liabilities			(189,412	)			(330,992	)
Accrued pension and other postretirement benefits			(58,597	)			(51,692	)
Other, net			(971	)			(753	)
Net cash used in operating activities			(137,016	)			(173,119	)
Investing Activities
Capital expenditures			(19,660	)			(25,178	)
Proceeds from sale of assets and businesses			224,518				15,888
Investment in joint venture			(2,101	)			—
Purchase of facility related to divested businesses			(21,550	)			—
Net cash provided by (used in) investing activities			181,207				(9,290	)
Financing Activities
Net decrease in revolving credit facility			—				(400,000	)
Proceeds from issuance of long-term debt			107				713,900
Retirement of debt and finance lease obligations			(380,009	)			(160,035	)
Payment of deferred financing costs			(400	)			(20,716	)
Sales of common stock			—				145,383
Premium on redemption of First Lien Notes			(9,108	)			—
Repurchase of shares for share-based compensation    minimum tax obligation			(3,249	)			(1,285	)
Net cash (used in) provided by financing activities			(392,659	)			277,247
Effect of exchange rate changes on cash			(536	)			9,581
Net change in cash and cash equivalents			(349,004	)			104,419
Cash and cash equivalents at beginning of period			589,882				485,463
Cash and cash equivalents at end of period		$	240,878			$	589,882

 

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FINANCIAL DATA (UNAUDITED)

TRIUMPH GROUP, INC. AND SUBSIDIARIES

(dollars in thousands)

		Three Months Ended								Year Ended
		March 31,								March 31,
SEGMENT DATA		2022				2021				2022				2021
Net sales:
Systems & Support		$	286,969			$	301,823			$	1,030,444			$	1,060,001
Aerospace Structures			99,684				165,306				429,547				814,371
Elimination of inter-segment sales			(2	)			(296	)			(49	)			(4,653	)
		$	386,651			$	466,833			$	1,459,942			$	1,869,719
Operating income (loss):
Systems & Support		$	49,237			$	39,484			$	163,450			$	113,517
Aerospace Structures			2,666				(13,515	)			13,982				(267,702	)
Corporate			(10,988	)			(68,566	)			(63,373	)			(159,265	)
Share-based compensation expense			(2,118	)			(3,615	)			(9,782	)			(12,701	)
		$	38,797			$	(46,212	)		$	104,277			$	(326,151	)
Operating margin %
Systems & Support			17.2	%			13.1	%			15.9	%			10.7	%
Aerospace Structures			2.7	%			(8.2	%)			3.3	%			(32.9	%)
Consolidated			10.0	%			(9.9	%)			7.1	%			(17.4	%)
Depreciation and amortization^:
Systems & Support		$	7,699			$	8,719			$	32,464			$	33,549
Aerospace Structures			3,556				10,989				16,234				308,708
Corporate			653				807				3,245				3,459
		$	11,908			$	20,515			$	51,943			$	345,716
Amortization of acquired contract liabilities:
Systems & Support		$	(2,226	)		$	(3,493	)		$	(5,859	)		$	(15,062	)
Aerospace Structures			—				(54	)			(12	)			(23,502	)
		$	(2,226	)		$	(3,547	)		$	(5,871	)		$	(38,564	)
^ includes impairment of long-lived assets

 

 

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FINANCIAL DATA (UNAUDITED)

TRIUMPH GROUP, INC. AND SUBSIDIARIES

(dollars in thousands)

Non-GAAP Financial Measure Disclosures

We prepare and publicly release quarterly unaudited financial statements prepared in accordance with GAAP. In accordance with Securities and Exchange Commission (the “SEC”) guidance on Compliance and Disclosure Interpretations, we also disclose and discuss certain non-GAAP financial measures in our public releases. Currently, the non-GAAP financial measure that we disclose is Adjusted EBITDA and Adjusted EBITDAP, which is our net income before interest, income taxes, amortization of acquired contract liabilities, curtailments, settlements and special termination benefits, legal settlements, loss on divestitures, share-based compensation expense, depreciation and amortization and Adjusted EBITDA, less pension & other postretirement benefits. We disclose Adjusted EBITDA and Adjusted EBITDAP on a consolidated and Adjusted EBITDAP an operating 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 to our previously reported results of operations.

We view Adjusted EBITDA and Adjusted EBITDAP as operating performance measure and as such we believe that the GAAP financial measure most directly comparable to it is net income. In calculating Adjusted EBITDA and Adjusted EBITDAP, we exclude from net income 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 GAAP and should not be considered as a measure of liquidity, as an alternative to net income (loss), income from continuing operations, or as an indicator of any other measure of performance derived in accordance with GAAP. Investors and potential investors in our securities should not rely on Adjusted EBITDA or Adjusted EBITDAP as substitutes for any GAAP financial measure, including net income (loss) or income 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 net income set forth below, in our earnings releases and in other filings with the SEC and to carefully review the 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 GAAP financial information with our Adjusted EBITDA and Adjusted EBITDAP.

Adjusted EBITDA and Adjusted EBITDAP is 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 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 25 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 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 is a measure of our ongoing operating performance because the isolation of non-cash income and expenses, such as amortization of acquired contract liabilities, depreciation and amortization, share-based compensation and non-operating items, such as interest and income taxes, 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 a financial measure 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 net income to calculate Adjusted EBITDA and Adjusted EBITDAP and the material limitations associated with using this non-GAAP financial measure as compared to net income:

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.

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FINANCIAL DATA (UNAUDITED)

TRIUMPH GROUP, INC. AND SUBSIDIARIES

(dollars in thousands)

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):		2022				2021				2022				2021
Net loss		$	(10,575	)		$	(73,519	)		$	(42,758	)		$	(450,910	)
Add-back:
Income tax expense			817				498				4,923				2,881
Interest expense and other, net			30,801				39,053				135,861				171,397
Debt extinguishment loss			—				—				11,624				—
Pension charges			31,959				—				52,005				—
(Gain) loss on sales of assets and businesses, net			(4,335	)			58,682				9,294				104,702
Impairment of rotable inventory			—				—				—				23,689
Amortization of acquired contract liabilities			(2,226	)			(3,547	)			(5,871	)			(38,564	)
Depreciation and amortization ^			11,908				20,515				51,943				345,716
Adjusted Earnings before Interest, Taxes, Depreciation    and Amortization ("Adjusted EBITDA")		$	58,349			$	41,682			$	217,021			$	158,911
Non-service defined benefit income (excluding settlements)			(14,205	)			(12,244	)			(57,378	)			(49,519	)
Adjusted Earnings before Interest, Taxes, Depreciation    and Amortization, and Pension ("Adjusted EBITDAP"), as historically presented			44,144				29,438				159,643				109,392
Share-based compensation			2,118				3,615				9,782				12,701
Adjusted Earnings before Interest, Taxes, Depreciation    and Amortization, and Pension ("Adjusted EBITDAP")		$	46,262			$	33,053			$	169,425			$	122,093
Net sales		$	386,651			$	466,833			$	1,459,942			$	1,869,719
Net loss margin			(2.7	%)			(15.7	%)			(2.9	%)			(24.1	%)
Adjusted EBITDAP margin, as historically presented			11.5	%			6.4	%			11.0	%			6.0	%
Adjusted EBITDAP margin			12.0	%			7.1	%			11.7	%			6.7	%
^ includes long-lived asset impairment charges

 

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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				Aerospace Structures				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	)
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"), as historically presented		$	44,144			$	54,710			$	6,222			$	(16,788	)
Share-based compensation			2,118			$	—			$	—			$	2,118
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, as historically presented			11.5	%			19.2	%			6.2	%		n/a
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				Aerospace Structures				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
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"), as historically presented		$	159,643			$	190,055			$	30,204			$	(60,616	)
Share-based compensation			9,782			$	—			$	—			$	9,782
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, as historically presented			11.0	%			18.5	%			7.0	%		n/a
Adjusted EBITDAP margin			11.7	%			18.5	%			7.0	%		n/a

* Operating loss at Corporate includes share-based compensation expense.

 

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FINANCIAL DATA (UNAUDITED)

TRIUMPH GROUP, INC. AND SUBSIDIARIES

(dollars in thousands)

Non-GAAP Financial Measure Disclosures (continued)

		Three Months Ended March 31, 2021
						Segment Data
Adjusted Earnings before Interest, Taxes, Depreciation, Amortization, and Pension (EBITDAP):		Total				Systems & Support				Aerospace Structures				Corporate/ Eliminations*
Net loss		$	(73,519	)
Add-back:
Non-service defined benefit income			(12,244	)
Income tax expense			498
Interest expense and other, net			39,053
Operating income (loss)		$	(46,212	)		$	39,484			$	(13,515	)		$	(72,181	)
Loss on sales of assets & businesses, net			58,682				—				—				58,682
Amortization of acquired contract liabilities			(3,547	)			(3,493	)			(54	)			—
Depreciation and amortization			20,515				8,719				10,989				807
Adjusted Earnings (Losses) before Interest, Taxes,    Depreciation and Amortization, and Pension    ("Adjusted EBITDAP"), as historically presented		$	29,438			$	44,710			$	(2,580	)		$	(12,692	)
Share-based compensation			3,615			$	—			$	—			$	3,615
Adjusted Earnings (Losses) before Interest, Taxes,    Depreciation and Amortization, and Pension    ("Adjusted EBITDAP")		$	33,053			$	44,710			$	(2,580	)		$	(9,077	)
Net sales		$	466,833			$	301,823			$	165,306			$	(296	)
Adjusted EBITDAP margin, as historically presented			6.4	%			15.0	%			(1.6	%)		n/a
Adjusted EBITDAP margin			7.1	%			15.0	%			(1.6	%)		n/a

 

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		Year Ended March 31, 2021
						Segment Data
Adjusted Earnings before Interest, Taxes, Depreciation, Amortization, and Pension (EBITDAP):		Total				Systems & Support				Aerospace Structures				Corporate/ Eliminations*
Net loss		$	(450,910	)
Add-back:
Non-service defined benefit income			(49,519	)
Income tax expense			2,881
Interest expense and other, net			171,397
Operating income (loss)		$	(326,151	)		$	113,517			$	(267,702	)		$	(171,966	)
Loss on sales of assets & businesses, net			104,702				—				—				104,702
Amortization of acquired contract liabilities			(38,564	)			(15,062	)			(23,502	)			—
Impairment of rotable inventory			23,689				23,689				—				—
Depreciation and amortization ^			345,716				33,549				308,708				3,459
Adjusted Earnings (Losses) before Interest, Taxes,    Depreciation and Amortization, and Pension    ("Adjusted EBITDAP"), as historically presented		$	109,392			$	155,693			$	17,504			$	(63,805	)
Share-based compensation			12,701				—				—				12,701
Adjusted Earnings (Losses) before Interest, Taxes,    Depreciation and Amortization, and Pension    ("Adjusted EBITDAP")		$	122,093			$	155,693			$	17,504			$	(51,104	)
Net sales		$	1,869,719			$	1,060,001			$	814,371			$	(4,653	)
Adjusted EBITDAP margin, as historically presented			6.0	%			14.9	%			2.2	%		n/a
Adjusted EBITDAP margin			6.7	%			14.9	%			2.2	%		n/a
^ includes long-lived asset impairment charge in the first quarter of fiscal 2021

 

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(Continued)

FINANCIAL DATA (UNAUDITED)

TRIUMPH GROUP, INC. AND SUBSIDIARIES

(dollars in thousands, except per share data)

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, 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 - accelerated depreciation)			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
* Differences due to rounding

 

		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
* Differences due to rounding

 

		Three Months Ended March 31, 2021
		Pre-Tax				After-Tax				Diluted EPS
Loss from continuing operations - GAAP		$	(73,021	)		$	(73,519	)		$	(1.27	)
Adjustments:
Loss on sale of assets and businesses, net			58,682				58,682				1.00
Restructuring costs			20,477				20,477				0.35
Adjusted income from continuing operations - non-GAAP*		$	6,138			$	5,640				0.10
* Differences due to rounding

 

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(Continued)

FINANCIAL DATA (UNAUDITED)

TRIUMPH GROUP, INC. AND SUBSIDIARIES

(dollars in thousands, except per share data)

Non-GAAP Financial Measure Disclosures (continued)

		Year Ended March 31, 2021
		Pre-Tax				After-Tax				Diluted EPS
Loss from continuing operations - GAAP		$	(448,029	)		$	(450,910	)		$	(8.55	)
Adjustments:
Loss on sale of assets and businesses, net			104,702				104,702				1.99
Impairment of long-lived assets			252,382				252,382				4.79
Impairment of rotable assets			23,689				23,689				0.45
Restructuring costs			53,224				53,224				1.01
Refinancing costs			15,305				15,305				0.29
Adjusted income from continuing operations - non-GAAP*		$	1,273			$	(1,608	)		$	(0.03	)
* Differences due to rounding

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,
		2022				2021				2022				2021
Operating income (loss) - GAAP		$	38,797			$	(46,212	)		$	104,277			$	(326,151	)
Adjustments:
(Gain) loss on sale of assets and businesses, net			(4,335	)			58,682				9,294				104,702
Impairment of long-lived assets			2,308				—				2,308				252,382
Impairment of rotable inventory			—				—				—				23,689
Restructuring costs (cash and non-cash)			6,264				20,477				19,295				53,224
Adjusted operating income - non-GAAP		$	43,034			$	32,947			$	135,174			$	107,846

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,
		2022				2021				2022				2021
Cash provided by (used in) operating activities		$	32,965			$	22,752			$	(137,016	)		$	(173,119	)
Less:
Capital expenditures			(3,843	)			(6,190	)			(19,660	)			(25,178	)
Free cash flow (use)		$	29,122			$	16,562			$	(156,676	)		$	(198,297	)

 

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(Continued)

FINANCIAL DATA (UNAUDITED)

TRIUMPH GROUP, INC. AND SUBSIDIARIES

(dollars in thousands, except per share data)

Non-GAAP Financial Measure Disclosures (continued)

Fiscal 2023 outlook includes cash used in operations, core cash from operations and core free cash flow. We use core cash from operations and core free cash flow to measure performance of our continuing operations. The following table reconciles cash used in operations to core cash flow from operations and core free cash flow.

 

						Fiscal Year 2023 Cash Flow Guidance Range
						($ in millions)
Cash used in operations						$	(40.0	)	-	$	(30.0	)
Less:
Non-core cash use^						$	(70.0	)	-	$	(75.0	)
Core cash provided by operations						$	30.0		-	$	45.0
Less:
Capital expenditures						$	(30.0	)	-	$	(30.0	)
Core free cash flow						$	—		-	$	15.0
Excludes:
Liquidation of customer advances						~$104.0

^ Non-core cash use estimate includes remaining cash related to the exit or sale of legacy structures facilities and programs.

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