RADNOR, PA — Triumph Group, Inc. (NYSE: TGI) has announced its financial results for the first quarter of fiscal 2025, ending June 30, 2024. The company reported net sales of $281.0 million, marking a 7% increase from the previous year. Operating income reached $8.1 million, translating to a 3% operating margin. However, the company recorded a net loss from continuing operations of $18.8 million, or $0.24 per share. On an adjusted basis, the net loss was $4.3 million, or $0.06 per share.
The company’s adjusted EBITDAP (Earnings Before Interest, Taxes, Depreciation, Amortization, and Pension) stood at $25.4 million, with an adjusted EBITDAP margin of 9%. Despite these figures, Triumph faced significant cash outflows, using $104.5 million in operations and reporting a free cash use of $112.7 million.
Fiscal 2025 Guidance
Triumph’s fiscal 2025 guidance includes net sales of approximately $1.2 billion and operating income of roughly $132.5 million, reflecting an 11% operating margin. This guidance has been updated to account for a $7.5 million legal contingencies loss. The company expects adjusted EBITDAP of approximately $182.0 million, corresponding to a 15% margin. Earnings per diluted share are projected to be about $0.33, with adjusted earnings per diluted share at $0.52. Triumph also anticipates cash flow from operations to range between $30.0 million and $50.0 million, with free cash flow falling between $10.0 million and $25.0 million.
Operational Highlights
The first quarter’s operating income of $8.1 million includes $1.6 million in restructuring costs related to the $40.0 million in cost reduction actions noted last fiscal year. Additionally, a $7.5 million loss in legal contingencies impacted results due to updates in previously disclosed arbitration related to environmental liabilities in the company’s legacy Structures business. The quarter also saw a $5.4 million debt extinguishment loss tied to the retirement of debt.
Dan Crowley, Triumph’s chairman, president, and CEO, highlighted the company’s performance: “TRIUMPH achieved its ninth consecutive quarter of year-over-year sales growth as commercial aftermarket sales from our IP-based business grew by more than 42% and more than offset temporary commercial OEM and supply chain headwinds. We retired an additional $120.0 million of debt in the quarter, strengthening the balance sheet and earning credit upgrades from both of the rating agencies that follow TRIUMPH.”
Crowley also noted challenges in the Interiors business due to reduced 737MAX shipments, but expressed optimism about a recovery in the fourth quarter as narrowbody aircraft rates ramp up.
Segment Performance
Commercial OEM sales saw a modest increase of $1.6 million, or 1.4%, driven by higher sales volumes on the Boeing 787 program and various business jet platforms. These gains were partially offset by lower sales on Bell 429, Boeing 737, and other commercial fixed-wing platforms.
Commercial aftermarket sales rose significantly, by $15.0 million or 42.6%, primarily due to increased spares sales and a spare parts intellectual property transaction of approximately $4.6 million.
Military OEM sales decreased by $4.0 million, or 6.0%, mainly due to lower volumes on the V-22 program. Conversely, military aftermarket sales grew by $4.2 million, or 11.4%, driven by increased spares and repairs for several programs, including CH-47 and CH-53, though rotorcraft repair and overhaul sales declined.
Non-aviation sales remained stable, reflecting steady demand.
Backlog and Cash Flow
The company’s backlog, representing the next 24 months of actual purchase orders with firm delivery dates or contract requirements, stood at $1.87 billion, down 2% from the prior fiscal year-end. This decrease was mainly due to changes in delivery timing under the Boeing 737MAX program, offset by increases in Airbus A320 family orders.
For the first quarter, cash flow used in operations was $104.5 million, aligning with previous expectations.
Navigating Growth Amid Challenges
Triumph Group’s first quarter results for fiscal 2025 reflect both progress and challenges. The company has managed to grow its sales and strengthen its balance sheet despite facing legal contingencies and restructuring costs. With a focus on leveraging its IP-based business and anticipating a recovery in commercial OEM and aftermarket sales, Triumph aims to achieve its fiscal 2025 targets. The company’s ongoing commitment to innovation and operational efficiency will be crucial as it navigates the complexities of the aerospace and defense industry.
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