The Triumph Group, Inc. Reports First Quarter Fiscal 2023 Results

Triumph

BERWYN, PA — Triumph Group, Inc. (NYSE: TGI)  recently reported financial results for its first quarter of fiscal 2023, which ended June 30, 2022.

First Quarter Fiscal 2023

  • Net sales of $349.4 million

  • Operating income of $14.7 million with operating margin of 4%; adjusted operating income of $32.6 million with adjusted operating margin of 9%

  • Net loss of $10.3 million, or ($0.16) per share; adjusted net income of $7.5 million, or $0.12 per diluted share

  • Cash flow used in operations of $93.0 million; core cash used in operations of $72.0 million

Fiscal 2023 Guidance

  • Net sales of approximately $1.3 billion

  • GAAP earnings per diluted share of between $1.51 – $1.71

  • Adjusted earnings per diluted share of between $0.28 – $0.48, down $0.12 due to a reduction in non-cash pension income

  • Cash used in operations of ($30.0) million to ($40.0) million, includes core cash flow from operations of between $30.0 million – $45.0 million

TRIUMPH generated organic sales growth in our continuing operations driven by improving commercial OEM and MRO demand.” said Dan CrowleyTRIUMPH’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.”

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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.

First quarter operating income of $14.7 million includes $0.7 million of restructuring costs related to the Company’s 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.

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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 the Company’s facilities, the Company expects net sales for fiscal 2023 will be approximately $1.3 billion.

The Company reportedly 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 the Company’s 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 reportedly 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.

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

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