TGI - Earnings call transcript Q2 2021

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Triumph Group Conference Call to discuss our Second Quarter Fiscal Year 2021 Results. This call is being carried live on the Internet. There is also a slide presentation included with the audio portion of the webcast. Please ensure that your pop-up blocker is disabled if you're having trouble viewing the slide presentation. be session will comments the There management. by Instructions] a following question-and-answer introductory [Operator the would Company, the of behalf On I following like statement. read to the Securities Certain of XXXX. on this constitute statements statements call the Reform Litigation within Private Act of forward-looking meaning known different statements risks, unknown future achievements performance from may any involve factors, or achievements expressed uncertainties results, or in statements. Triumph's expected actual These performance other the or to which and forward-looking and cause be forward-looking implied materially results, the of can the at reconciliation measures on comparable that financial note in Please website included GAAP Company's press to non-GAAP www.triumphgroup.com. their measures be is which release, found

In addition, and Inc. Officer; time, and like President Senior to recorded, property be transcribed Executive Triumph please or Crowley, Jr., Vice Crowley. and President introduce rebroadcast Chief Officer Daniel Go Triumph I ahead, Group, would J. Financial written is the this of Inc. without Company's James and At not Group, this note McCabe, of may explicit Chief Mr. F. call approval.

Daniel Crowley

Thank to expanding flow and you're working you, and our platforms year cash earnings Revenue quarter Earlier due well. better-than-expected management. results capital QX everyone, military we second today, XXXX. our welcome, safe and hope for all free I sales fiscal tight call. on were to and Kevin, cargo reported and

momentum stable these reduce QX the our receipts and improving in aviation the to Our air position rates measured progressing Trends OEM quarter-over-quarter at in and through repair in delivered results QX, year. expect by of balance we traffic the is future we After a military progress improvement second enhanced are commercial to favorable trends cash rates. recovery engine remain downturn we operations, full if improve operating into Airbus use its EBITDAP of achieve and Slide year summarized to us the are content our with pace. will the Triumph's severe actions in restore quarter targets. core managing margins made X. stabilized strengthening generate in macro production and half support, driven Combined demand and and and through systems confidence the give positive, narrow-body Company both in quarter, state. our on the production our We towards month-over-month. helicopters tangible trends, second our indicate MRO positive and margins and year

you walk me through Let the highlights.

commercial on to based book, starting of our rates aftermarket First, have and build to consistency aerospace and appears the improving stabilized is demand order recover.

and in from the with Second, our or line obviously objectives. year either above to are prior our our on while QX track down year, results, meet expectations, keep full us

last from program's free on Triumph the complete recent prior cash guidance. operating consistent our on using to planned Third, return sales the our our yielding we through pension-related with year a with upward across track the the transaction, reduction. with all exits with And continuing an transition we levels divestitures. refinancing emphasis greater are efficiencies and factory of remain on system Fourth, last, working capital Structures while enterprise QX of positive sight committed of less are half our asset actions line cash to flow the of following an generation. support flow We QX our exited swing, to second cash in and and in to

cleanups exit encountered, headwinds prior reductions excess the receipts demand, OEM recap quarter, headwinds of from outlined costs. we as thankfully, Now second with of most in the let QX nonrecurring. are align rate impacts and in drivers the and each Slide inventory production me as we periods, touch commercial tailwinds on facility for QX material virus-related I'll on COVID-related the included X.

cash $XX through this reduce Tulsa we and use quarter. SG&A Arlington, Atlanta programs facilities. expenses on year. to acted footprint by QX sunsetting team heavy, complete and reduced to but exit is track Overall, on in our aggressively the fiscal cost Our of was the million

Tulsa from delivered components final facility this GXXX quarter. the team Structures Our our

due than we of combined less million QX, have causes. these X We ship sets to to deliver. XXX remaining $XX used components In

to in positive our decrease we As QX quarter expect generation cash demonstrated flow the use QX, cash quarter. from to with fourth in third

to our of remaining to addition, remains fiscal In successfully consuming QX as Structures of now to systems and to plan offset QX pure-play completed Structures to cash the and sales our we The programs We quarter, the during on and sale businesses GXXX 'XX configuration year-to-date. program Systems I'll support and close Gulfstream. commercial Aerospace Structures, favorable to in track declines. fiscal provider engineering military customers. game both the Support commercial exit exit on in Military plan the our sale all wing increased and comment in kitting as the services & helping a composite year. in this future part of state two tailwinds

year-over-year, growing towards in from path lost a example, business content they XX% more to & sales XX% UK For backlog military our Overall, XX%, the Support. Staverton XX% double of has actuation Systems replace commercial than volumes. on military seen as comprises

pivot freighter Triumph's commercial is, backlog of through content as diversity work to military to valuable especially ability downturn. and we continue the how Our reminder is to a

month-over-month, aviation we Asia. led mentioned, saw receipts to As recovery repair by starting up pick in

compared those our a increases of at X higher weekly of MRO repair excess QX. recording on receipts in are basis, centers sites including to XX% We net XX across

our as expected, and quarter, by improvement, Past have fiscal identified efforts growth continued and execution $XX come targeting XX remain million Triumph aggressive fiscal the backlog benefited we at the As across this After of lean of inventory. million XXX programs achieve system reduced will the from status systems austerity underway, out the $XXX Company now due our benefit to a improved we green Triumph more future over achieved our much on position board over second of similar Structures in most We on year. gross operational operating events completing We with savings track measures, year-to-date. years which trajectory will and years. in for our 'XX, lean in margins. yielding Success pandemic. via early redoubled

to of we through cost expect year. we structure, our assessment initiatives the quarter-over-quarter upside which have our these and improve to margins our With operating continuous

As financial CEO, strong financial goals of original one with marked with Triumph's positive cume consecutive QX performance favorable program was to another up make our quarter more performance transformation quarter true-ups. my of second predictable. catch overall,

market a and our As the previewed portion our cycle. work refinanced increase down through ability we last quarter, sheet balance to liquidity commercial of to

market support X future in cash want 'XX completed balance generation profitability our flows. I also operators earnings the to these initiatives how fiscal improved beyond. pension-related the these greatest X trends preparing a Global Collectively, overall improved span. levels. utilization and in Slide and freight references and are and characterize rollout product will drive data history, moment. quarter the derisk cover together fleets which rates cash for We logistics to in are one will record affecting Jim freighter in over Triumph. strain further detail actions and sheet past

focus that increase MRO and aircraft for Airlines Additional quarter-over-quarter. actions a to missions We spot in calls they fleet, business, Atlas, utilization their part customers passenger flown with volume, XX% continue carrier pricing on our numbers quarter in air Greater which MRO customers increased to aircraft to expected chain. UPS. recompete FedEx Triumph. generated bidding supply for cargo spur a commercial the traffic as up driving third-party are be aerospace major year-over-year, and our and MRO their XX% is like are marketing bright held all are new providing adapt and

half The X.X% maintenance the as underlying potential rebound than expect requirements. will two carriers remains the at loss COVID evidence XXXX after thirds that in the most recent that a the numbers this GDP reclaiming strong economy strong in the and crisis. This U.S. financial growth, holidays, faster segment the MRO address quickly, of freight of show year, We revenues recovery times first rebound X deferred to third absent quarter is restraints. of accelerate a

business Turning to awards. new

Our further at Triumph are Notably, military rate X and $X.XX across TSS stable multiple and to$XXX platforms. remained helicopters by products on with on XX% value. a productive billion,indicating Systems quarter, in were packages, quarter shipments value backlog in MRO XX% the million reportable wins increases dollar factory up Military XX QX. Triumph XX% recording our from on military win are highlighted shipments were on include wins thermal amounting Several military. had Slide wins work strategic the in that mix horizon. business key

through and For the This electronic performance. our aircraft. our to Apache a in will and upgrade our program TXXX displace it U.S. undefined great to commitment for in programs. order U.S. FMS of our This unit, awards Triumph of first additional developed helicopter, represents safety enhancing this FMS improvements the fleet military million enhancing fielded eventually all control units will performance $XXX nearly control engine continued new many and awards. units award for is XXX This plus example technology-driven fieldedTXXX controls, result

XXX% a win record on which increase with extends introduction. its upgrade performance XX%. funded program of CHXX strategic engine Triumph's proven This since unit second performance The Chinook, power highlighted for pump control of XX% burn fuel by program the engine by fuel reduce the and will increases on metering fuel and Honeywell's is track TXX popular improvements TXX

to excited program. a key this be We on partner are critical

of the Finally, in heat system Systems a thermal or awards number captured exchanger quarter.

business fighters Slide awards business spanning and Connecticut oriented in This on summarized a predominantly and with a X. formed our market are great thermal from factories awards These and a quarter, segment. and growing is of Maryland consolidation Our military is bombers. helicopters, the others

top increasingly programs win will and on noncore Jim? work to us growing through will quarter. results competitive more of market take our the line be sites. With Our on well an after years that, key ability Jim capabilities shedding in now and to reflects

James McCabe

Thanks, everyone. good Dan, morning, and

Systems improving. achieve to rates year will we're basis. in I and the Our year Consequently, enterprise, as demand our results exiting seeing our sales the of objectives. military Production commercial Margins consolidated anticipate exceeded business we are we we our on our drove stable programs end progresses. our actions. unit Support of plan, sequential we driven is second on track demand in realizing discuss cash what loss-making improved had continued the Increases and Airbus core our results the profile growth and and improvement market full in cost across the remained range margins adjusted and second sales in aftermarket and performance planned, by flow business. build to an benefits in and as is met quarter or The reduction were the quarter improvement. and continued

up quarter. Despite revenue. decreased the reduced last programs. on due demand, operating income for year drove So the from down sales and headwinds, Slide our reductions in release compared in our press decreases aftermarket a segment sequentially quarter-over-quarter. basis Structures for offset Net segment the commercial quarter. gradually production over segments and transitioning from and to Support were slides up XX% profitability sales growth. of margins see and net X%, On Adjusted an adjustments. military MRO adjusted results. quarter, on mitigated year. year last in our sales find organically both including XX, volume for sequentially our partially On rate our down and in from this sales up Planned prior in segment programs our improving on demand, System respect last please Airbus you'll million compared Slide Revenue X% the the our military operating on supplemental partially results in by decreased by $XX to an the commercial consolidated sequentially, adjusted were explanation We're prior adjusted and to operating sunsetting was declined With was increase to Systems programs quarter. but were margin increase Support X, OEM

to resulted well of fiscal planned margin through of cost rest improve Aerospace quarter use in segment's actions expanding $XX remainder actions aggressively group due down points. year. basis Aerospace sunsetting the XX, we to XX quarter. of second $XX as approximately is million on quarter the the commercial Structures Summarized programs anticipated for programs. with to is programs progress Completion the $XX sales restructuring segment as Our take reduction market the These actions taken over this in as impacted sunsetting margins expected to million will and Supports This restructuring Structures net continuing year. Slide military part the in million to System we've by organic along as in costs and transitioning actions sales, our help reduce were declines of costs. the

These these flow been higher Excluding would reduction slightly year. margins costs, operating have and cost actions in last XXXX margin will and benefit fiscal beyond. cash than

to Turning XX. Slide

to the capital, working experiencing adjust in supply our our As demand. lower discussed last new quarter, temporary we're as increase a chain we

customer and the and Our million than the $XX QX. to by quarter, cash managing and cash planned Capital in flow and aggressively debt we slightly were capital $XX was our used did liquidity. restructuring in core of million prior million including includes million of anticipate of the and Support of second a summary focused using in upgrading increases segment. liquidity. driven program positive liquidation in on $XX We net Systems in cash XX GXXX QX working million critical cash than equipment quarter to be We expenditures less out in our used costs. and and of remain better close of $X $XX advances, QX in On our is Slide cash

year-end with over September our over amended years. years. reflect and next plan XXth we about removed availability required end and $XXX the to quarter, million. our update current the $XXX enhancing of our elected to in quarter change debt We before previously reduce billion was facility, any in valuation senior retired March the to our million to covenants. the funding funding expected the next lien first million forecast the was respect pension Slide net several the and values, actions actions. liability more which our XXst Our asset receivable liquidity is our our approximately we On have raised complete In and $X.X to estimated securitization excess and revolving which cash We combined ample $XXX obligations, notes, requirements secured reduce further facility pension to XX, of maintenance to credit our even four liquidity from at

$X.X status our has $X to plan rates of 'XX, million anticipated preferred it to the its production FY Additionally, funded program and about aircraft changed completions, revenue method approximately valuation to we Company increase the billion. impacts income which to pending this continue to year. be expect the pension asset of a to the Based is including for uses on method, report $X.X expected

than expect cash the higher year full the with as We fourth cash the use compared free in and QX first moderately to use positive cash half, flow quarter. for be in QX to less

but is and predictable. revenue more environment is This from with backlog down today's stable slightly strength Our makes important QX, more our and operating balanced an military in content. and stable

the we actions, to this We improvement continue and customers, and our our this operating our and improve through with cash evaluate additional forecast strong will competitiveness coupled have actions to and value intellectual manage cost quarter-over-quarter add enhance to system, our property Our year. businesses. taken results us position and continue our we liquidity capital structure. downturn, our focus our reduction for anticipate on especially core The measures help in with

call to turn back the Dan. I'll Dan? Now

Daniel Crowley

of OEM were Thanks, in Jim. signs with recovery, benefiting In in in we're the early place order much summary, MRO we We're better than stability increasing QX in from in a markets. rates QX. flow with production

reduction mandate cost in improve is and current of confidence recovering margins win Systems why as to and across future give lean The Support more and efforts and performance of the rate see forecast to critical benefits result is the environment, a our economic profitability. enterprise. which We actions and our cash growth revenue, us for our continue quarter-over-quarter

volatility and other profitability that future move Our enhance operations flow to transactions remains, predictable and noncore committed pandemic and QX. as and uncertainty we sheet to cash bridges we in a us business. market our cash can us the we and exit gives reduced portfolio the state. of are Though be to more side confidence improving positive The balance becoming liquidity our

and refinancing managing customer strong, has overcome can the the restructuring, our remains through done, and we and through proven portfolio the job now challenges Triumph renegotiations, industry contract and say:do Our reshaping, get team ratio pandemic. through

Triumph the solid this to we momentum and Kevin, now come a crisis year which fiscal Fortunately, with stronger from entered build any take through company. questions. to will as we're happy

Operator

Jefferies. from comes Our [Operator Kahyaoglu with Sheila first question Instructions]

Sheila Kahyaoglu

good Hi morning.

In moving had terms asset the pension, sales. to cash parts, of flow free you've changes your

profitability find how business. managing I quarter. the the know So in time operating actually don't for is question involving guys this my you actually But

modest sequential in some saw good You the businesses. but improvement

earnings moment? I So how do and Structures about medium-term think both of the profile the you guys Systems guess, at

Daniel Crowley

the part know, carries a higher-margin of Sheila, of recovery as MRO and spares is demand, you And it the Improving. repairs. which, for

a So as margins. that recovers, that will for tailwind be

James McCabe

Yes.

also cost think and they actions the effect, the gets take I earlier year, behind we us. took in start to restructuring

our had, extra So that's operational we efficiencies capacity see internally And some on going more the improvement. of actually, we've we and to going forward. benefit us focus with that

direction gradual it's is So but good. the improvement,

Sheila Kahyaoglu

GXXX thought $XXX business, contribution the the Structures guess, in both and fairly quarter. expect do million you I minimal was I composite And then from on because GXXX still

So is business? And the Structures' the loss-making? in And that it think how remaining is of XXXs in composite? about left that just profitability four then the go the we Is else quarter the of majority in profile what do assets? to terms

James McCabe

Yes. come the those Sheila. We of expect million a generally The for tow Thanks, inventory. $XXX range combined proceeds as divestitures. of million $XXX still in liquidation

flow through are proceeds same. they the But So still total cash the flow.

million loss quarter. In the behind now, set of past contracts, ship terms is within $XXX us having the the last shipped

left really that's So it's just XX there.

Daniel Crowley

-- can program, as and this remember the been and now Bombardier you've GXXX see cash the And XXX at the the line the on with EX programs and GXXX of us back to we journey. Sheila, whole end program, now well. you the And these can it's eventually use.

about the deterministic There's XXX. We've we outcome at where around of got not are. feel a this it's we closeout point. good -- So uncertainty

Sheila Kahyaoglu

in Right. luck quarter. the Best

Okay.

Daniel Crowley

you. Thank

Operator

question JPMorgan. from Seifman with next Our Seth comes

Benjamin Arnstein

I FY those wondering, guess, wanted the of when to that state FY good guess actually have and you to was for remaining confirm Ben talk is everyone. includes place? This on I And 'XX, the end future just kind exiting about or by your able of morning announcements facilities? being close that, 'XX just I kind Hey, noncore of configuration, Seth. selling in the Structures

Daniel Crowley

Certainly, and in parties have negotiated latter well the we're and the former, record and supply we're track have dealing with purchase familiar along hopefully, with that agreements process, and the we're and agreements. a

a of ensures a extend agreement, think, we and facilities, what of any they systems. there's through So the handoff be may will good. support 'XX call TSA smooth that But that transactions, into speed I IT people, transition

that. we're So material it impact, be towards a wouldn't driving and

Benjamin Arnstein

in where are and Great. Okay. margin margins the update looking that's of about of then the kind year? us for core Interiors on the And an thinking kind give can of Structures, kind how you business this

James McCabe

Yes.

through we're So I for shipping by workforce impacted have there's can lot example, mid-single that, that significantly is tell we're to, goes Interiors the by OpCo like margins digits I that in of the but boeing enabled volume, that that margins have MAX there. in don't there able there. still especially business. to volume that's And you been rate narrow-body, maintain on, us But the overhead and a a

ready we'll previously that in for that I program So the be type segment, was margins ready that teens to we've pre to think put low in ramp. that guidance COVID is ramp out when And of business.

can the it So once back. comes good margin business be volume

Daniel Crowley

month of in that get to margin. year, will particular that's one was That the that next beginning factory one MAX, in to XXXX, guidance Boeing's a ramp the by to next allow year, most the was exposed a Mexico, to to calendar but us going factory give recover XX Yes. that

Operator

comes next Our from with question UBS. Myles Walton

Louis Raffetto

for Myles. on is Louis actually This Raffetto

back to want sort question just your response and there. to go Sheila's of I So

being me you went this you XX% looks quarter, looks down help that, was like XX% but sequentially, support guess? last quarter. nominally down I it square it system was, up it from like So just it Can aftermarket said

James McCabe

first we X%. quarter to think quarter, I from were up sequentially, second So

your I'm sure following not I'm So percentages.

Louis Raffetto

you your year-over-year. this in it was in said only aftermarket Systems down was quarter and slide down quarter, Well, deck, Support. Last XX% XX%

James McCabe

Yes.

about talking aftermarket, you're the to opposed particular, as So in segment? whole

Louis Raffetto

Yes.

James McCabe

Yes.

we been and we'll aftermarket specific and So good can up, But percentages source there there. we'll back. flow, question, and circle a I look look But it's generally, at go back the and holding forward. has have to at your be business of cash profitability moving the

Daniel Crowley

up the June. to then We're saw very factory, tracking months aftermarket as August, mentioned from it quarter, first I May speaking, and September, stability went coming back. of we it's half And Generally see July, started benefited and down in in QX. and that. a we tick in about QX closely by the

Louis Raffetto

Okay.

the margins And actually EBITDA sequentially. so it talked you down about improvement margin sequentially, looks like but guys a were lot

contract XXX Structures think the and related in that unallocated. were is liability. that moving I and mostly there on Looks there some maybe was other pieces there? like the pieces moving or Was D&A to

James McCabe

Certainly, would that. be part the of XXX

lot followed be find I detail more or the the] you're a to queue in in think next going day will so.

Daniel Crowley

shipped mentioned, the as we've Yes, last Jim GXXX.

it's is program us of behind only runout And that now terms losses. that XXX in So remains. the

Operator

question Herbert comes next Our Canaccord. from Ken with

Ken Herbert

the significantly the Jim ask plan. seems adjustments to changing it the I able you just you made been around bit about timing assumptions? you've the of contributions sort then timing, to made does just wanted little around also adjustments accounting to like the much in you've you've to cash alluded versus assumptions. some pension that mean, made through changes expected the risk I the you've really the Can pretty impact and lower just but how of unpack a

James McCabe

Ken. Sure,

a and market longer the the pension method, first securities we faster to the over the asset which preferred changes is thing marks it we fixed did period. amortize accounting whenever So changed to a doesn't

the time valuations the the million the very a since March. substantially. companies that It's But was are in more And one, it's, valuation accurate a in current. IRS which period the to for, poor a of So we Other same market. assets year-end applied they've we've the just recovered it because And doing it's expect for period. method. second more to, It our to We we in the about valued that preferred income purpose, it. year-end, the of current to our more is most want approval the it with makes have $X update really is creates change valuation. at

recovery in and reduction funding is of the current at interest liability assets of rates. the revaluation due the the the lot the a of to So

bring really it's at which So to at was last year. liability the time, anomalous of it an and that not forward fiscal have measured end

Ken Herbert

helpful. That's

think about this? envision it pension of asset sort any how there of Structures go-forward you and you Do the post some on potentially, how a you potential Or do resolution sales, basis? do risks? you As to terms the as see of the are a in ability at Or these look we about divestitures? the as all business think sort your of liabilities risk manage

James McCabe

in liabilities and for All addressed And have them all our we of divestitures. of planning over time. are I plans think manageable, they're very each address to

As forward that. of volatile. you impact the it is see, at can can end stable markets the And of year, much whole the going not but last be requirements divestitures it. more pension And volatile course, funding of for will the outlook were

very we it in hand. manageable, and it's So have

Operator

Ciarmoli Our with Securities. next Truist from question Michael comes

Michael Ciarmoli

are Maybe we you're big where just see about those both in going seem some suppliers or to different maybe you segments. states, color we are rates. know revenues? production further current and Just on I they're whether pressure be pressure at Structures should on you And where thinking program? us give platform The further to from cuts? with there? expect XX that Can XXX fairly in

Daniel Crowley

And mid And the and is described actually with of the engine importance trend. seeing of less So about the Boeing their product so XXX don't OEMs that a lot airframers rate from Jim year, defense as engine XX rate Structures. We that's plants, that military six current an side. we'll it It's as follow month, MRO, the well as talked Structures. both on the next few our offset. that interest and We're in month. producing on work has contributes strong exchangers, several a is we're a a in bill a do

benefit of doing sure And So drop. that also contract where make return backlog is also we earning volumes we're the the participation for any with products fair as XXX that will one offset amount platform some a and our renegotiation a produce, diversity us Boeing of we're program even helps to program.

Michael Ciarmoli

but -- program XXX guess, revenue not that message second, but So the biggest Is backlog, is in the big there? I Structures a contributor. the it's

James McCabe

there's the major think I that that programs one impact many different have when-- is doesn't a message even the biggest so second

Daniel Crowley

Flat distribution across our top programs.

Michael Ciarmoli

Okay.

Okay. just follow-up aftermarket. I And on to want to just sure. make then the

XX% bottom a year-over-year So aftermarket sequentially, last it XX% this grew But year, uptick -- and sequential down now? hit other revenues in down did quarter, seeing I guess, quarter. year-over-year absolute it was you're last words, seemingly in did

James McCabe

don't I growth in me moment. aftermarket for at quarter-to-quarter front Yes. the have that of the

Daniel Crowley

Yes. also both leading job We of track repair a indicator and revenue receipts.

Just are going from MRO, the confidence think more of gives QX to demand. QX, it inbox for That and that's up. increased us that benefit ticking as

repairs a pickup. are Texas. On the shared order load accessory chart have rates, good and I factors, to our Wellington, obviously, and utilization businesses in presence trends, that in coming about first, our or aircraft the Kansas Thailand. we And job Seeing service also whether seeing both return is it's Asia back a nice stream on

And [Indiscernible]. then a follow the freighter to military market. Europe way it's and along U.S. first the driven the So we'll Asia, trend regionally in

Michael Ciarmoli

I'll Thanks. get back queue. in

Operator

from Peter Arment comes Next Baird. question with

Peter Arment

talk way aftermarket. there commercial there qualitatively Hi. things follow-up assume any just a comments the to sounds on commercial these military? When you I the talk actually about turn Good versus numbers are down about like seeing there? I more, mean you're morning. your Dan, Is but on percentages, it

Daniel Crowley

well, what of our defense And overhaul that contributions of go we're can business, can They deeper. triumph same. the earnings answer it's seeing legacy But by that their about the Boeing across one-on-ones services aircraft. reported parse we that unit, spending to readiness queue, fleet strong seen any with some as as questions booms, and if the call a the in refueling business just has strong platforms, all in we'll military increase benefited And we've from see there's out in the that. And military -- government you are. we

for reversers like they're expenditures. increases high. programs holidays the the thrust those from we're is also On F-XX, planning the availability, exchangers and freighters, F-XX those the on demand as [Indiscernible] We seeing benefiting C-XX, do then heat steep. are towards very drive And that So services

So downtime. times to inventory be they're our for aircraft our what's can rotable asking turn what minimize and us

we're come carriers those Asia commercial the in starting But is bullish back. mainly yes, U.S. So on to in areas. Europe, is but down

Peter Arment

just you're repayments, And just of of helpful. cadence thinking as the kind That's a customer on at schedule could the follow-up, that Jim, remind today? about you advance kind least us

James McCabe

we Sure. be about year. And year, each, the was what million $XX this we'll next X be And it talk liquidations give million quarter, when that's then. it's $XX to it Yes. million liquidation, and quarters, In next the expected in then each. the guidance $XX will for for

Operator

Our with comes of next question Caitlin Dullanty from America. Bank

Caitlin Dullanty

on is This Ron for Caitlin Epstein.

the this are into Now downturn on X seen out, seeing about the the cleaning? a are play future any planning strategy? emerge business portfolio we've are we stronger? bit to more commercial how your There aero that pandemic, you little your position and the from how to do How about pandemic guys you that business are months of change post will so you

Daniel Crowley

Thanks, Caitlin.

support but So we'll on encouraged confidence about of commercial in yesterday by the benefit I and Procurement with XXX. the rates, the of seeing the first And business Airbus. very we're call talked we've demand. out Boeing is we're on was the from to on rightsizing the this rates is We narrow-body Airbus Head AXXX, for increases rate the XXX, that. high, their and phone Airbus true

XX% earlier, demand of I now lower exit recover, were like I at the And then XXX having do started So think, like pre I amount that profitable a business expected as to the number level a XXX rebalancing and rightsized here continue we'll we'll more given ultimately, And cost production. And were GXXX OEMs. expect we the now programs some mentioned about the exit defense, we basis. be we we the COVID for is it the to to Gulfstream to then legacy there from it and as than second is is Triumph, programs in When XX% of defense. journey grow this the and quarter. between

then rebalancing it and the Triumph. both of the part will the recovery when So portfolio tailwinds of for it comes, commercial be is of

Caitlin Dullanty

where and high, MAX you much your a help inventory RTS in is will the guess, the understand a be us 'XX? the year we've channel been calendar you helpful. year the actually for set of inventory I are pretty guys of tailwind a for That's how then many 'XX. the on and ship almost just in And calendar hearing MAX suppliers that bit little XXX, Can shipped of lot for, fully suppliers on from is

Daniel Crowley

Yes. just in We weren't work and to Thankfully, we for interiors on-hand MAX. almost every for work know in We time. build good built factory inventory process, ahead. the finished process

rate, the has for dropped, that restarted. when as of X about in and we then them So brought workers months the line back Mexico rate furloughed half since

and allowed So goods to that line hot on to say Boeing of finished we a has prior inventory. months I'd I have, order X continue one, MAX But on maintain the call to us earnings avoid typically, of mentioned disruptions. produce. we've to continued produce

the going So see of MAX production. or to Structures' OEMs we're not large engine themselves. did OEMs far impacts the you've or the out get on of seen not ahead We kind OEMs the

Operator

Strauss David from with Barclays. comes next Our question

Matt Akers

XXX trend are this I that particular. This for of us 'XX, about year, those on guess, forward go still the costs David. there what is Matt does want look program actually year? kind to can Akers kind ask then of how cash next cash on cost that sequentially? as you And Are or you remind fiscal I do to in away?

James McCabe

Yes.

year, million. million $XX be Matt, is second XXX $XX of going this half to to So cash the

the programs. and quarter. but extent So, last this up close that's some out cash the we next this loss-making past And wrap will year, facilities the as just the year, there The be not nearly have completed our GXXX residual that and to we of program.

Daniel Crowley

We is fuselage panels. our production lease in plant up the the XXX complete, and Hawthorne, and the use by It's sections dismantling Typically, major of have it that structures. And California produce we're large a cylindrical two industry. the for local plants facility. freeing

Martin, for is other also in leased and from demand space. The Prairie, they Grand it's Texas, have plant Lockheed that

of months. turning year. the Grand work and Florida. hitting numbers. that curves be Boeing learning We're work remaining That's out in over And We quality our incrementally we'll plant moved gone over all next so few And finish the that at XXX the Prairie over well. will extremely XXX next the

over been great the So of we a the many It's line. it's, program years. see end can

thus as a producing see we of a fraction X now losses, we've be high an course, Of month, but the end doing month. the can't prior as to the rates, been line. used a X.X to We're about

Matt Akers

Got it. one more. just guess And then I

once do normalized this of on sort reasonable touched a aerospace You through transactions guess, year a margin environment? EBITDA think earlier, what target for is I demand you or maybe at get you but commercial kind and more we're business two of the overall out once these

James McCabe

on margin the target, reasonable say, Yes be general but EBITDA it's would a in going the would that's but mid-teens the goal. in what looks out and a is a depending one, being be goes how like market to mid-teens portfolio years, a I

Operator

comes Cowen. from next question with McCrea Scott Our

Cai von Rumohr

von is This Rumohr Cowen. Cai from

So you half, the excuse positive have cash you flow me, second mentioned yes. in

you talk going It's next but So, one point, repay per this Boeing quarter. million you can were quarter. million about At year. $XX $XX to

cash can back next go you positive year, million If to you $XX be next year?

James McCabe

second cash quarter On, first we're crisis. Thanks, of $XXX we're cash capital user half said modestly course, What trimmed being to a second the working that positive to is working year. million And cash, quarter, than QX used going the the at we in the million. and still we Cai. in to that anticipate $XX chain. we than supply the increasing adjust It's this a still as Jim. capital, the this $XX extent we year of using about we've less be of so but the used, of back And depth million the of lesser quarter, third

the given year. following really guidance haven't for any We

in year. program the evaluating that's and next like the we're and imagine look rates, going You what can all markets to changes still

the So planning have what think in be I'm out year. specific this world to guidance pass items that next on lot, process to past, for we going a we've putting said finish after I cash to we're changed our and year. We've, going but has the

Cai von Rumohr

the As should drivers, we trends cash without are key a that about number, flow the where terms going? be would the next of we key what year think just be looking in for

James McCabe

we Good Boeing, to also the on what production Sure. it's portfolio. going to liquidate be in demand going to going right? but advances be aftermarket, the it's and in be And rates, question. Obviously, it's

may be increase or to will it and on maintain completed what's have So lower ability divestitures that programs volume. our price

we can levers our ways pull. I beyond. numbers demonstrated It So that funding. think doing And forward big be of find past will is all a working we in there's every we've those of piece year. a through to right lot to we're pension That's make we this and the pieces what it, look And too. And now. year

Cai von Rumohr

Thank you very much.

James McCabe

Cai. Thanks

Operator

And run at there will no also Triumph's Standard XXth a This has today replay available are quarter since Time XXXX concludes Year that Eastern further Eastern fiscal and XX:XX Standard time. a.m. at call. through this call second questions, earnings XX:XX be

the You access by and today's the Again X-XXX-XXX-XXXX access X-XXX-XXX-XXXX XXX-XXXX. enter replay, call. code concludes conference this to access replay access Again, XXX-XXXX. can dialing an you and can entering code dial

may day. and disconnect, all You have wonderful a

Triumph (TGI) 7 Nov 202021 Q2 Earnings call transcript