Form 8-K TRIUMPH GROUP INC For: Aug 03

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF

THE SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported): August 3, 2022

 

TRIUMPH GROUP, INC.

(Exact name of registrant as specified in its charter)

 

Delaware		1-12235		51-0347963
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

899 Cassatt Road, Suite 210,
Berwyn, Pennsylvania		19312
(Address of principal executive offices)		(Zip Code)

 

(610) 251-1000

(Registrant's telephone number, including area code)

 

Not Applicable

(Former name or former address, if changed since last report.)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $.001 per share		TGI		New York Stock Exchange
Purchase Rights				New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

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Item 2.02 Results of Operations and Financial Condition.

On August 3, 2022, Triumph Group, Inc. issued a press release announcing its financial results for the first quarter of fiscal year ending March 31, 2023 and conducted a conference call to further discuss the financial results. The full text of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

 

Exhibit No.		Description
99.1		Press release dated August 3, 2022
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

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Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date:	August 3, 2022	TRIUMPH GROUP, INC.
		By:	/s/ Thomas A. Quigley, III
			Thomas A. Quigley, III
			Vice President, Investor Relations and Controller

 

 

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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 REPORTS FIRST QUARTER FISCAL 2023 RESULTS

UPDATES FISCAL 2023 SALES & EARNINGS GUIDANCE

 

 

BERWYN, Pa. – August 3, 2022 – Triumph Group, Inc. (NYSE: TGI) ("TRIUMPH" or the “Company”) today reported financial results for its first quarter of fiscal 2023, which ended June 30, 2022.

 

First Quarter Fiscal 2023

 

Fiscal 2023 Guidance

“TRIUMPH generated organic sales growth in our continuing operations driven by improving commercial OEM and MRO demand.” said Dan Crowley, TRIUMPH’s chairman, president and chief executive officer. “Our actions to mitigate supply chain constraints and work with our customers and suppliers to ensure continuity and affordability continue to differentiate TRIUMPH. With a growing and profitable backlog, TRIUMPH is well positioned to benefit from continued strength across nearly all of our end markets.”

Mr. Crowley continued, “Consistent with our strategic plan, TRIUMPH recently completed the divestiture of its last remaining large structures operation. Our first quarter results keep us on track to achieve our full year objectives, and with our goal to double profitability over fiscal years 2022 to 2025, driven by improved OEM production rates, expanded MRO volumes, enhanced pricing from recent contract extensions and a lower cost structure. We remain focused on investing in our people, operations, and products for the benefit of all stakeholders.”

 

First Quarter Fiscal 2023 Overview

Excluding divestitures and exited programs, sales for the first quarter of fiscal 2023 were up 1% organically from the prior year period as increases in commercial narrow-body production offset decreased military rotorcraft volume.

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First quarter operating income of $14.7 million includes $0.7 million of restructuring costs related to our structures facility exits and $17.2 million reduction of revenue for consideration payable to customer related to the Stuart divestiture. Cost of sales benefited from the Aviation Manufacturing Jobs Protection Program by $5.0 million in the quarter. Net loss for the first quarter of fiscal 2023 was $10.3 million, or ($0.16) per share primarily due to the items noted above. On an adjusted basis, net income was $7.5 million, or $0.12 per diluted share.

TRIUMPH’s results included the following:

($ millions except EPS)		Pre-tax				After-tax				EPS
Income from Continuing Operations - GAAP		$	(8.6	)		$	(10.3	)		$	(0.16	)
Restructuring costs (cash)			0.7				0.7				0.01
Consideration payable to customer related to divestiture^			17.2				17.2				0.26
Adjusted Income from Continuing Operations - non-GAAP *		$	9.3			$	7.5			$	0.12
^ Recorded in net sales
* Difference due to rounding

 

The number of shares used in computing diluted earnings per share for the first quarter of 2023 was 65.3 million.

Adjusting for the impact of the Stuart divestiture, backlog, which represents the next 24 months of actual purchase orders with firm delivery dates or contract requirements, was $1.53 billion, up 7% from the prior year, primarily on commercial narrow body platforms.

 

For the first quarter of fiscal 2023, cash flow used in operations was $93.0 million.

 

Outlook

The Company's outlook reflects adjustments detailed in the attached tables.

Based on expected aircraft production rates, and the resulting demand on each of our facilities, the Company expects net sales for fiscal 2023 will be approximately $1.3 billion.

The Company expects GAAP fiscal 2023 earnings per diluted share of $1.51 to $1.71, up $1.11 from prior guidance due to impacts of the Stuart divestiture and our interim pension re-measurement. The Company expects adjusted earnings per diluted share of $0.28 - $0.48, down $0.12 due to a reduction in non-cash pension income.

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, August 3rd, at 8:30 a.m. (ET) to discuss the first 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 August 3rd to August 10th by calling (877) 344-7529 (Domestic) or (412) 317-0088 (International), passcode #8597845.

 

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

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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

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FINANCIAL DATA (UNAUDITED)

TRIUMPH GROUP, INC. AND SUBSIDIARIES

(in thousands, except per share data)

		Three Months Ended
		June 30,
CONDENSED STATEMENTS OF OPERATIONS		2022				2021
Net sales		$	349,384			$	396,646
Cost of sales (excluding depreciation shown below)			272,400				293,678
Selling, general & administrative			51,745				56,251
Depreciation & amortization			9,806				15,431
Restructuring costs			699				4,485
Loss on sale of assets and businesses, net			—				5,969
Operating income			14,734				20,832
Interest expense and other, net			31,912				38,558
Debt extinguishment loss			—				9,689
Non-service defined benefit (income) expense			(8,586	)			1,722
Income tax expense			1,750				1,214
Net loss		$	(10,342	)		$	(30,351	)
Loss per share - basic:
Net loss		$	(0.16	)		$	(0.47	)
Weighted average common shares outstanding - basic			64,820				64,299
Loss per share - diluted:
Net loss		$	(0.16	)		$	(0.47	)
Weighted average common shares outstanding - diluted			64,820				64,299

 

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FINANCIAL DATA (UNAUDITED)

TRIUMPH GROUP, INC. AND SUBSIDIARIES

(dollars in thousands, except share data)

BALANCE SHEETS		Unaudited June 30, 2022				Audited March 31, 2022
Assets
Cash and cash equivalents		$	134,636			$	240,878
Accounts receivable, net			168,104				178,663
Contract assets			97,394				101,828
Inventory, net			379,929				361,692
Prepaid and other current assets			26,144				19,903
Assets held for sale			78,794				60,104
Current assets			885,001				963,068
Property and equipment, net			165,670				169,050
Goodwill			507,988				513,722
Intangible assets, net			81,875				84,850
Other, net			26,927				30,476
Total assets		$	1,667,461			$	1,761,166
Liabilities & Stockholders' Deficit
Current portion of long-term debt		$	2,968			$	3,268
Accounts payable			132,734				161,534
Contract liabilities			53,914				171,763
Accrued expenses			168,818				208,059
Liabilities related to assets held for sale			185,096				57,519
Current liabilities			543,530				602,143
Long-term debt, less current portion			1,587,073				1,586,222
Accrued pension and post-retirement benefits, noncurrent			287,621				301,303
Deferred income taxes, noncurrent			7,256				7,213
Other noncurrent liabilities			47,268				51,708
Stockholders' Deficit:
Common stock, $.001 par value, 100,000,000 shares authorized, 64,920,381    and 64,629,279 shares issued			65				64
Capital in excess of par value			971,390				973,112
Treasury stock, at cost, 0 and 14,897 shares			—				(96	)
Accumulated other comprehensive loss			(469,251	)			(463,354	)
Accumulated deficit			(1,307,491	)			(1,297,149	)
Total stockholders' deficit			(805,287	)			(787,423	)
Total liabilities and stockholders' deficit		$	1,667,461			$	1,761,166

 

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FINANCIAL DATA (UNAUDITED)

TRIUMPH GROUP, INC. AND SUBSIDIARIES

(dollars in thousands, except share data)

 

		Three Months Ended June 30,
		2022				2021
Operating Activities
Net loss		$	(10,342	)		$	(30,351	)
Adjustments to reconcile net loss to net cash used in    operating activities:
Depreciation and amortization			9,806				15,431
Amortization of acquired contract liability			(523	)			(1,214	)
Loss on sale of assets and businesses			—				5,969
Curtailments, settlements, and special termination benefits loss, net			—				16,078
Other amortization included in interest expense			1,562				4,002
Provision for (recovery of) credit losses			200				(28	)
Share-based compensation			1,578				2,247
Changes in other assets and liabilities, excluding the effects of    acquisitions and divestitures:
Trade and other receivables			4,474				(1,321	)
Contract assets			(8,638	)			(4,426	)
Inventories			(19,190	)			(9,354	)
Prepaid expenses and other current assets			(7,538	)			(3,633	)
Accounts payable, accrued expenses, and contract liabilities			(56,352	)			(128,922	)
Accrued pension and other postretirement benefits			(8,322	)			(13,713	)
Other, net			255				(279	)
Net cash used in operating activities			(93,030	)			(149,514	)
Investing Activities
Capital expenditures			(3,044	)			(2,112	)
(Payments on) proceeds from sale of assets and businesses			(2,322	)			180,478
Purchase of facility related to divested businesses			—				(21,550	)
Net cash (used in) provided by investing activities			(5,366	)			156,816
Financing Activities
Retirement of debt and finance lease obligations			(990	)			(350,688	)
Premium on redemption of First Lien Notes			—				(7,489	)
Repurchase of shares for share-based compensation    minimum tax obligation			(3,442	)			(2,336	)
Net cash used in financing activities			(4,432	)			(360,513	)
Effect of exchange rate changes on cash			(3,414	)			815
Net change in cash and cash equivalents			(106,242	)			(352,396	)
Cash and cash equivalents at beginning of period			240,878				589,882
Cash and cash equivalents at end of period		$	134,636			$	237,486

 

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FINANCIAL DATA (UNAUDITED)

TRIUMPH GROUP, INC. AND SUBSIDIARIES

(dollars in thousands)

		Three Months Ended
		June 30,
SEGMENT DATA		2022				2021
Net sales:
Systems & Support		$	254,643			$	258,413
Aerospace Structures			94,753				138,252
Elimination of intersegment sales			(12	)			(19	)
		$	349,384			$	396,646
Operating income (loss):
Systems & Support		$	33,151			$	35,546
Aerospace Structures			(2,301	)			11,223
Corporate			(14,538	)			(23,690	)
Share-based compensation expense			(1,578	)			(2,247	)
		$	14,734			$	20,832
Operating margin %
Systems & Support			13.0	%			13.8	%
Aerospace Structures			(2.4	%)			8.1	%
Consolidated			4.2	%			5.3	%
Depreciation and amortization:
Systems & Support		$	7,521			$	8,504
Aerospace Structures			1,696				6,159
Corporate			589				768
		$	9,806			$	15,431
Amortization of acquired contract liabilities:
Systems & Support		$	(523	)		$	(1,202	)
Aerospace Structures			—				(12	)
		$	(523	)		$	(1,214	)
Capital expenditures:
Systems & Support		$	2,879			$	1,102
Aerospace Structures			56				652
Corporate			109				358
		$	3,044			$	2,112

 

 

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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
		June 30,
Adjusted Earnings before Interest, Taxes, Depreciation, Amortization, and Pension (Adjusted EBITDAP):		2022				2021
Net loss		$	(10,342	)		$	(30,351	)
Add-back:
Income tax expense			1,750				1,214
Interest expense and other, net			31,912				38,558
Debt extinguishment loss			—				9,689
Pension charges			—				16,078
Consideration payable to customer related to divestiture^			17,185				—
Loss on sale of assets and businesses, net			—				5,969
Share-based compensation			1,578				2,247
Amortization of acquired contract liabilities			(523	)			(1,214	)
Depreciation and amortization^			9,806				15,431
Adjusted Earnings before Interest, Taxes, Depreciation    and Amortization ("Adjusted EBITDA")		$	51,366			$	57,621
Non-service defined benefit income (excluding pension charges)			(8,586	)			(14,356	)
Adjusted Earnings before Interest, Taxes, Depreciation    and Amortization, and Pension ("Adjusted EBITDAP")		$	42,780			$	43,265
Net sales		$	349,384			$	396,646
Net income (loss) margin			(3.0	%)			(7.7	%)
Adjusted EBITDAP margin			11.7	%			10.9	%
^Reported in net sales

 

 

 

		Three Months Ended June 30, 2022
						Segment Data
Adjusted Earnings before Interest, Taxes, Depreciation, Amortization, and Pension (EBITDAP):		Total				Systems & Support				Aerospace Structures				Corporate/ Eliminations
Net loss		$	(10,342	)
Add-back:
Non-service defined benefit income			(8,586	)
Income tax expense			1,750
Debt extinguishment loss			—
Interest expense and other, net			31,912
Operating income (loss)		$	14,734			$	33,151			$	(2,301	)		$	(16,116	)
Consideration payable to customer related to divestiture^			17,185				—				17,185				—
Share-based compensation			1,578				—				—				1,578
Amortization of acquired contract liabilities			(523	)			(523	)			—				—
Depreciation and amortization			9,806				7,521				1,696				589
Adjusted Earnings (Losses) before Interest, Taxes,    Depreciation and Amortization, and Pension    ("Adjusted EBITDAP")		$	42,780			$	40,149			$	16,580			$	(13,949	)
Net sales		$	349,384			$	254,643			$	94,753			$	(12	)
Adjusted EBITDAP margin			11.7	%			15.8	%			14.8	%		n/a
^Reported in net sales

 

 

 

 

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FINANCIAL DATA (UNAUDITED)

TRIUMPH GROUP, INC. AND SUBSIDIARIES

(dollars in thousands)

Non-GAAP Financial Measure Disclosures (continued)

 

		Three Months Ended June 30, 2021
						Segment Data
Adjusted Earnings before Interest, Taxes, Depreciation, Amortization, and Pension (EBITDAP):		Total				Systems & Support				Aerospace Structures				Corporate/ Eliminations
Net loss		$	(30,351	)
Add-back:
Non-service defined benefit expense			1,722
Income tax expense			1,214
Debt extinguishment loss			9,689
Interest expense and other, net			38,558
Operating income (loss)		$	20,832			$	35,546			$	11,223			$	(25,937	)
Loss on sales of assets & businesses, net			5,969				—				—				5,969
Share-based compensation			2,247				—				—				2,247
Amortization of acquired contract liabilities			(1,214	)			(1,202	)			(12	)			—
Depreciation and amortization			15,431				8,504				6,159				768
Adjusted Earnings (Losses) before Interest,    Taxes, Depreciation and Amortization,    and Pension ("Adjusted EBITDAP")		$	43,265			$	42,848			$	17,370			$	(16,953	)
Net sales		$	396,646			$	258,413			$	138,252			$	(19	)
Adjusted EBITDAP margin			10.9	%			16.7	%			12.6	%		n/a

 

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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 June 30, 2022
		Pre-Tax				After-Tax				EPS
Loss from continuing operations - GAAP		$	(8,592	)		$	(10,342	)		$	(0.16	)
Adjustments:
Restructuring costs			699				699				0.01
Consideration payable to customer related to divestiture^			17,185				17,185				0.26
Adjusted income from continuing operations - non-GAAP*		$	9,292			$	7,542			$	0.12
^ Recorded in net sales
* Difference due to rounding

 

 

		Three Months Ended June 30, 2021
		Pre-Tax				After-Tax				Diluted EPS
Loss from continuing operations - GAAP		$	(29,137	)		$	(30,351	)		$	(0.47	)
Adjustments:
Loss on sale of assets and businesses, net			5,969				5,969				0.09
Restructuring costs			4,485				4,485				0.07
Pension curtailment charge			16,078				16,078				0.25
Refinancing cost			9,689				9,689				0.15
Adjusted loss from continuing operations - non-GAAP*		$	7,084			$	5,870			$	0.09
* Differences due to rounding

 

		Fiscal 2023
		Diluted EPS
		Guidance
Initial earnings per share guidance range		$0.40 - $0.60
Impact of interim pension remeasurement			(0.12	)
Restructuring costs			(0.01	)
Consideration payable to customer related to divestiture			(0.26	)
Gain on sale of assets and business (Q2)			1.53
Curtailment charge related to divestiture (Q2)			(0.03	)
Updated earnings per share guidance - GAAP		$1.51 - $1.71
Adjustments:
Restructuring costs			0.01
Consideration payable to customer related to divestiture			0.26
Gain on sale of assets and business			(1.53	)
Curtailment charge related to divestiture			0.03
Adjusted earnings per share guidance - non-GAAP		$0.28-$0.48

 

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(Continued)

 

FINANCIAL DATA (UNAUDITED)

TRIUMPH GROUP, INC. AND SUBSIDIARIES

(dollars in thousands)

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 June 30,
		2022				2021
Operating income - GAAP		$	14,734			$	20,832
Adjustments:
Loss on sale of assets and businesses, net			—				5,969
Restructuring costs			699				4,485
Consideration payable to customer related to divestiture^			17,185				—
Adjusted operating income - non-GAAP		$	32,618			$	31,286
Adjusted operating margin			8.9	%			7.9	%

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.

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.

		Three Months Ended June 30,								Fiscal 2023 Guidance
$ in millions		2022				2021
Cash used in operating activities		$	(93.0	)		$	(149.5	)		$ (40.0) - $ (30.0)
Plus:
Non-core cash use^			(21.0	)			—			$ (70.0) - $ (75.0)
Core cash (used in) provided by operations		$	(72.0	)		$	(149.5	)		$ 30.0 - $ 45.0
Less:
Capital expenditures			(3.0	)			(2.1	)		~ $ (30.0)
Core free cash (use) flow		$	(75.1	)		$	(151.6	)		$ -- - $ 15.0

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

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