Earnings call transcript Q3 2023

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Operator

Welcome to Triumph’s Third Quarter Fiscal Year 2023 Results Conference Call. 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 are having trouble viewing the slide presentation. All participants will be in listen-only mode. this being note Please Instructions] event recorded. is [Operator

approval. this the may property addition, explicit be please Triumph is that note written without rebroadcast and In of call Group, transcribed or recorded, not Inc.

President I would now brief who Relations, to introduce opening Treasurer, statement. and and provide of Triumph's Acquisitions Tom Mergers will Investor Quigley, like Vice a

Tom Quigley

and Crowley, Thank Jim of Chief Today, I'm call. fiscal XXXX you. Good earnings President and Vice morning, Senior Triumph. President and by McCabe, welcome the Dan and to Executive Officer Chairman, Officer; our third quarter Financial company's joined Chief

for As quarter, we review the financial on this refer results posted the morning. our website the presentation to please

discussing be will We adjusted results. our

These which press achievements on meaning different uncertainties expected of known implied financial forward-looking to forward-looking be of materially results, Act Our and from adjustments of Triumph's the measures involve the forward-looking or in reconciliation this statements in to or risks, the performance within Securities or Private performance comparable cause measures any presentation. results, may future unknown statements achievements Certain and call XXXX. factors, release in the expressed constitute statements any are Reform Litigation other statements. and actual non-GAAP earnings the GAAP explained in

to Dan, I'll turn it over you.

Dan Crowley

Tom. Thanks,

our mostly the the discussed our impacting in For backlog I grew were constraints the at quarter quarter, our up rates. earnings operations year. chain programs. in call, our prior double-digit our strong sales delaying both We second Triumph that delivered over sequentially and supply last defense deliveries On

quarter, these on to X% to from full the accelerate. defense our MRO year-over-year the supplier supply Triumph. on Intensive reducing higher This top our $XXX particularly to to We pickup will this OEM and to improve and headwinds improve. us we and forecast enabled deliveries of XX%, line as materially to our improve sequentially in up commercial management aftermarket of and impact XX% QX million. We sequentially deliveries continue chain enabled in anticipate profitability saw the sales volume be time

our increasing EPS are adjusted we and revenue full-year our Accordingly, guidance.

a on our than our many positive half we As value delivered Overall, in that for contract new to remain with positioning volatility. pleased experienced a or QX. results social and we Internally, experience and a Like well leveraged want more get the employees. new others, our deal, employees, pandemic. line environments, of few years of Extending company we Triumph I'm proposition in fiscal expectations, also for thank to the committed, our the the work paycheck. QX and through in from ‘XX. to pandemic be helped the a second above track at work empowerment year for we've who us our us create I cash which flexible

Now highlights. on quarter's I'll slide summarize three, the

shipments. Backlog from QX customers levels prior generated organic less as platforms up QX of costs. demand. to our First, the year-end and quarter-over-quarter is OEM sales of markets. expected in year at commercial stepped half are margins budgeted we benefit and done year-over-year, legacy increase and MRO XX% Triumph's to business was with XX% diverse XX% growth structures returning the improving driven end of than by and Triumph and exit up our

our our and and products XX% receipts war the MRO higher products Ukraine of wins and differentiating increasing revenue of in ‘XX wins in Beyond generate space sales anticipate supporting $X pipeline expenditures to platforms strategic our goal over OEM horizon of strong for new ’XX. new to We on a technologies. R&D planning on billion from new in to the rates, market over contribute fiscal With increases opportunities, and markets.

working capital. strong by reductions backlog, material possible free in inventory made expect past we due positive QX, flow and to Turning cash

several QX in now demand be reasons. substantially on for Legacy new all We Boeing remain and have QX aircraft with aircraft inventory a year-end commercial of levels of higher high and are aircraft delivered service confidence Triumph in in programs as deliveries orders deferred Airbus. and entered certain outlook our result increased MRO hand. from in pending to as demand older QX has

resource planned work orders, we seasonally supply MRO replenishment are have and Ukraine in shortages end our as or with and the sufficient of delayed the fiscal have with cash government's early Military dual October requested improving which all favorable on to U.S. And year of deliveries supporting review war and/or chain funded. Military domestic transit support source for to in hand We supplier parts inventories turn deliveries of thorough are sources. now and terms. deliveries. quick a were requirements planned and the customers low-cost completed of

we good about ramp overall, the So quarter is upon the us. feel and

not more and We and which and increase QX, track we flow environment, is priorities. as sheet we've to standing a fiscal top Against near-term saw one month-over-month we balance been during attention which improvement cash to operations maturities, benefit expect promising we're forecast turning ’XX our QX addressing year-over-year. stronger Consistent still. our our with our our operating record, strengthening from of

a that builds on deleveraging plan our comprehensive operational have improvement. We

transaction. in cost upcoming refinance as XXXX to outlook. of a As pulling our are the one We lever the in prepare for one Triumph It investors maturities increasing through efficient this warrants two-fold. warrants are our debt, of our be of announced debt given lower benefit The anticipated financial the while with assistance results component business our will equity of of December. advisors. exercised, we we're the growth distributed distribution benefits When warrants to plan, this confidence warrants the and outside our action are

important is timing Of an consideration. course,

approaches, pandemic has through us and our to agile market Our which team been downturn. bridge the allowed refinancing in

secure need that of are We our the our fund confident ability to growth in our in customers. to we financing

expanded Our improving we CapEx stakeholders. reinvestment and support the IRAD value all deliver and in enhance results also to

state. We're always future cost looking at in our ways support to manage of

enables as our translates retire structures we growth in and backlog and our business continued exit SG&A. reductions expansion IRAD targeting into higher are As margin programs, strong sales year-over-year. we This overhead

future. Triumph in We are we're the the better taking to confident proactive even steps for position

results take the our now and outlook Jim? third provide quarter then I'll through will comments and market. us Jim on some detailed

Jim McCabe

Thanks, expectations everyone. exceeded growth pleased or Dan, and we quarter profitable are on financial third and our to report results to year-over-year our met quarter. this I'm objectives. good morning, full-year Triumph's track achieve

of military results our on consolidated for Our customers. increasing demand the and quarter slide Revenue four. from are million $XXX commercial, reflects MRO

we prior revenue income year up is XX% for Excluding representing revenue million, programs, grew organically margin, XX% was Adjusted quarter which prior over and an operating businesses quarter. $XX divested consolidated the from sunsetting year. over the the

segment will especially or are market on Organic excluding million the XX% prior quarter. revenue largest of up in on the five. MRO and More details market from is growth was This licensing highlights slide XX% act up revenue driver Commercial be was support protection aviation our year. in manufacturing revenue by a Systems end benefit demand. segment, year, commercial results and in $XX last System this job in the the from was the demand quarter. transaction XX-Q. supports operating margin and income the and the

segment six. interiors, insulation in on Structures the segment our ducting from slide business results and business. continuing is The The are this

the income on XXX year of revenue rates interiors the $XX higher over and sunsetting driving on programs revenue. in production XXX divestitures growth. improved and organically. programs, million the strong are up the prior Excluding Operating Increasing XX% was organic

slide walk Our free cash on flow seven. is

accounts this and cash of flow planned quarter In cash million working ramp we $X capital receivable about free from QX $XX and growth Our in collections. to capital deliveries. included inventory as expect supporting higher of working shipments contribute used million cash QX the QX, to decrease

QX, flow with new cash free guidance. full-year We expect our in strong in line

We segment. investment our be approximately of expect and capital Support million expenditures and for all the to substantially capital that Systems $XX is in year

$XXX our availability, liquidity end debt is sufficient more million billion quarter, debt. eight. At We is our net of needs. we net had had schedule and of cash and The projected than slide of of which for the $X.X on the about

our continuing our planned leverage continuing full-year guidance. and We expect QX reduce profitable businesses. EBITDA free with and cash in to cash to new be We're in our flow consistent expanding by as positive

valuable in are exercised thoughtful remain that actions In shareholders. and we Triumph increased leverage, and pro reduce to Triumph the warrants to and The Warrants warrants realize took our structure we leverage, debt debt when expense those help a Triumph's give I a of one maturities and reduce with improve ability and actions. Dan address choice security distributed series reduce of December, shareholders our and timely rata will value. our how confident free our capital flow that of liquidity. interest and cash to

the look coming remain We forward area of attention progress see to capital opportunity we opening this in in refinancing and to the and window of the our reporting opportunistic maturities, pay we markets. improving close Regarding to continue months. XXXX

full-year from nine. expect billion. a to ‘XX up guidance prior our $X.XX FY now revenue to to turn For of slide range guidance, to be $X.X billion We

expect GAAP of We in share. be the $X.XX to $X.XX to per EPS range diluted

are per We guidance on previously. expected higher deliveries range $X.XX to up $X.XX adjusted QX. $X.XX our in Based share, to EPS increasing to $X.XX from

We received net approximately continue to expect to year. million the for be refunds taxes cash of $X

cash We $XXX expect million million $XXX about includes of interest expense interest. and to that be

million of we improvement use ’XX, $XX expenditures, in $XX resulting a million fiscal approximately full-year, $XX to with free to $X of cash $XX in $XX prior million the from million guidance. use to operations expect in million capital over For million cash that's

in growth met or our increasing our exceeded guidance earnings cash our reflect a strong year-over-year to In summary, and QX. flow are QX revenue, the we for free and profitable expectations full-year expectations

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

Dan Crowley

Thanks, Jim.

into years overcoming some customers to of airline traffic the provide production. carriers three and insights Let the I challenges levels and the perspective. of the our want me the first, market acknowledge guidance and put returning to last and pre-pandemic But our about to air OEM of success

deliveries industry. and faster of partnerships commercial segment that calendar ended in XXXX an customer We're net new to and a more annual Airbus the year basis. orders both are Orders as increase the collaborating ways and solid of quarter rose each. and an new challenges over inherent supply are on transport recovery demand fourth the of Our better stronger. over more on XX% The aircraft our coordination year-over-year Boeing leading also XXX aircraft resolution XXX booked for with trajectory

the increase, ramp engine will expected Increasing down in benefiting recover traffic global due burn With XXXX backlog that now increase versus end production in as China's supply to accelerate evidenced to demand of past this million $XX owners XX% demand to MRO nearly to chain approximately Triumph Airline of aircraft and the by demand. policies ‘XX. particular. RPKs satisfy our continues on operations fiscal new enable third-party The year-over-year COVID to is by ‘XX.

at AXXX, are backlog the factory, production on components AXXX Depending recently received per XXX Boeing which Airbus up both the reaffirm XX and between producing Triumph’s is XX% levels OEMs, per thereafter. deliveries up is rates to is XX%. while XX QX backlog month. forecast related to from XX year-over-year Triumph month. XXX XX deliveries Boeing our new production Triumph increase and XXX

reflected minor While rates our and signals adjustments north, which these fiscal are fiscal look encouraged We're in results end the with to our production Triumph forecasts these that in facts profiles, ‘XX OEM forward year factories. providing May. guidance headed will by benefit all ‘XX are

quarter Overall, the up XX% MRO for segment this rose XX%. The translating is sales and up OEM with Military into and up growth XX% X%. XX% the Triumph. Commercial Sales for were

is Our Bookings X.XX. year-to-date. year-to-date to XX% bill book increased

new parts front, and third-party up the businesses MRO year-to-date. MRO our of quarter are inductions the XX% for XX% On across

for and is Black third-party We're pleased XX% aided FAAT. awards for These and year-over-year new next military Competitive Apache and XX aircraft $XXX year-to-date space Triumph IP, leading seen Hawk, million the Sierra Spares solution are ranging backlog OEM XX%, with like Triumph to C-XXX, by landing are MRO the our backlog associated both and while repairs EV-XX products rising that both XX% airframe be gear quarter. quarter system commercial backlog Atomic’s slides the Triumph's systems CH-XX, XX. by the new driven for and up on across with XX% of UAV. X% grew business, are programs up the wins a F-XX, entire wins for on General gen mounted to military for the to products gearboxes thermal totaling can customers. a and the from Across platforms

‘XX in including sixth-gen F-XXEX, B-XX, Triumph in OEM fiscal came bill bill the the a reflecting CH-XXE, billion prior portfolio, the the year. V-XX programs Hawk, quarter, defense increase KC-XX and year-over-year production E-XD. the key the out line decreases $XX benefiting The incorporated the fighters, the In Black from top the

quarter. Pylon which of However, our V-XX MRO program volume. is to Conversion V-XX content transitioning shipsets XX and significant an sustainment We delivered Triumph in for Actuators third repair maintains

announcement rate FMS content as XX content significant our CH-XXs welcome to U.S. maintain recent approve provides these Triumph on to of CH-XXK production, the full instant Navy's The and news exchangers. decision recently the revealed Egypt for and platforms, development. sixth-generation across the controls, share pursuing early and fuel fuel has actuation in the heat and got including Triumph bomber on also work pumps is B-XX fighters

value favor in platforms. to in source new through path of exiting new Our margin proprietary is positions across and reflected wins on sole programs new start work and lower build-to-print ramping the

Sierra and XX, to Triumph Chaser Turning bringing Dream fuel next cooling complete platforms actuators RAIDER system landing engine, the RAIDER to military for cycle the X These slide Nevada as the for Vehicle. capabilities gen is both for vapor well the gear adaptive vehicles, Space a GE's and system new include military pumps new as new Sikorsky market. high-capacity cycle the and

across product solutions these additive implement all to working are lines. We

to Partnerships newer and our our aircraft accelerate in key the and have enabler MRO the nacelle with in Air JV to engine repairs a planned on access and provide Middle repairs. with Mubadala us growth region's to Sanad growth, for will our markets accessory enable been MRO East JV France

on improving backlog the and keeps together, of raise our and business the in second be us cash and half of for positive guidance OEM to mix ‘XX to track Taken growing fiscal our And full-year. beyond. aftermarket

any look to and in markets to have. growth. forward team, and a we of you and financial our happy As to capital and are management our renewing stronger board Jim performance support structure take I questions improving

Operator

first question-and-answer [Operator the question Instructions] Seifman begin come will Seth from Our session. JPMorgan. now with will We

now may go ahead. You

Seth Seifman

were think wonder Hey, interiors much and everyone. the I core as about piece, interiors think very margin could well? profitability this about I morning, the breakeven here the the some little in the thanks bit And closeouts think was of business. for level kind you good related XXX the profitability there we talk there with and from if to and the Should about being talked about a goodness being core sales I last quarter XXX. structures from then the in we Or of quarter there lingering some margin as low-teens go-forward December quarter, business?

Jim McCabe

Seth. it’s Thanks, I'll start, Yes. Jim.

the was XX% potential there a go but and hurt got that pandemic MAX now. the Before the has to recovering by again. business MAX, it still the It is

positive. quarter, modestly profitable it was last and So actually cash

by got but there. that's it's even XXX, a back, forward, to when hurt to that going grow going So just comes help going from And more. you bit little the

is So can to operating it it's a a very cash profitable good and business. It XX% is and now continuing back up business in get margins. there. It positive

Seth Seifman

Right.

in But thinking XXX kind -- kind Okay. business like QX of now we're that XX% when that's about to of of here, interiors? margin a sort

Jim McCabe

of back, with to now. ramping. and consolidation there. margins as It's yet. the the out ramp facility XXX our Spokane Not But it single-digit continues MAX It's will into further help it extra in volume operations actually comes finished as we

there well. the to as see benefit So cost reductions from starting we're the

yet. no, teens So it's the not in

Dan Crowley

described, slow. it's But basis, very quarterly, on but range that you that steep a it's because full-year on in a

Seth Seifman

And MRO related now? okay. the S&S between, growth Okay, Thanks. kind you any How growth right related growth. between strong your about of, just two repair the in the thinking difference would business, and then characterize product differences those markets there

Dan Crowley

headed XX about from Right narrow they're the When a XX going with on month they of similar that's now and Airbus, to about the also but out at upswing. Airbus XX you the body, seven look year-end a month OEM delivering like India. rates delivered the on AXXX we're they're increases -- a both up of on at to month they're

MRO OEM the pandemic leading growth. of rates, strong us out seeing but we're the what's is So

the increase carriers full-year XXX higher for structural MAX, all the much and for the engine induction, watch orders surpassed is cells, all stand And parts in how then than also just have. in in orders. Delta ‘XX. the I Southwest. had of levels. new revenue so interiors United's it's XXX history I volume even side. We mentioned that XXXX And coming some big revenue and mean, do we And their American going reversers, overhauls the And reflection about well They highest accessories. there as gear read from they're engine in as you was in repair, QX, QX company's MRO, this had XXXX. a thrust up. boxes, triggering

So is in quite arrive the short-term, the newer their demand for the fleet the in for keeping both they're operation which MRO then till legacy aircraft fleet, and high. new

the profitable. big has payments us, it's a for shorter and cash MRO tailwind because and space also to been cash that's cash So

Seth Seifman

Great. Thank much. you very

Dan Crowley

Seth. Thanks,

Operator

come will Baird. from question next Arment Peter with Our

You may go ahead. now

Peter Arment

May, you Dan but going mentioned not for you you if and flow some Hey some morning, moving the know guidance that year, free detailed pieces in I key you're of going you're about wonder improve, are like of a thinking to the capital just drain, Jim. this of on more is only Good which think I big positive about fiscal Thanks. that, quarter, Dan, that us to but that Jim, pieces know, thanks. working give fourth we could maybe just Yes, at? cash when kind the just looking bigger ‘XX.

Jim McCabe

Sure.

growth of the really $XX QX. cash in generation this only above look first, fund quarter, in in the the if which million million fourth the what was And we range, $X and roughly quarter, fourth at think is expected. it's use I cash the So midpoint you're quarter you to in

into So finish next solid it's trends nice year. and going good

capital both the as to we're not year. the maybe we positive next the earlier users seeing and is exit the of of MRO the absence profitable So contributing the year in working rest businesses volume cash as And did one-timers, next that that year, growth for obviously, business. and OEM the were some in and

some overhead you business. reduced SG&A specifics the talked about our said, the the forward But lot more We look rationalizing next drivers. So portfolio. the key with give quarter. when you We've we give costs. and of are Those we've improved a to smaller as guidance

Peter Arment

just there as this given obviously follow-up, long-term? it's versus of describe systems related it Maybe a and you a aftermarket improving and into steep And business? Thanks. for up this could just you Just an rate. run talked great business still rate core structures reshaped see how the turn Okay. it Dan, portfolio? having business fits considered run how the Is IP and business to you've about just the the lot a

Dan Crowley

is interiors booked the that's You customer about In of keep to last certainly billion business lot. them in $X to the synergies. a XX-years year, bet. need win backlog going There without for

Our new on the work mentioned AXXX, they're got winning. work and that interiors they've yet now. still key I

So to absorption It has financially. it's us benefit. contributing an

our Mexico. the synergies performance. great that a product of with with not we lot sense One of interior a job systems. do They better There's in in operations their lean bundle solutions

So that not in connection. a there's sense, big

I it every in that now it us. to re-ramping the Right whether do look cash. contribution and year business fast and business interiors important we it's one we and that had in sales how to its profit every we and past about say, terms can confident we about level an or Triumph grow decision they've for we're will it. manage of make it businesses is retain it of can to our But and of the at trajectory

Peter Arment

Appreciate Thanks, the Dan. color.

Dan Crowley

Thanks.

Operator

Our will next with from Kahyaoglu Jefferies. question come Sheila

go may ahead. You now

Sheila Kahyaoglu

of and XX% for my to terms know How is for and first time. debt of and going about think you bank Jim, I for outcomes asking Dan not Jim, you one the the you. you're in debt. range the Sure. refinancing? morning, Good thank do

options the cash here? on need sort you So the And sheet what potential of how do are balance operate? to much

Jim McCabe

capital volatile lot the businesses businesses them. with the working Well, had with we those Sheila. divested, associated cash of were that a Thanks, biggest

cash need have we we for QX. change the in less find less for need, we And cash $XXX cash expect availability right volatility. less million as moving So of there's generation we we sufficient and with especially forward, because that's the portfolio, and strong what now,

markets, we And and quarter for that to to are start opportunities markets on were maturities about refinancing still plans you we we for and We as We the of work to yield These to plans details see talked But them as continue And we again. not -- up and rates see over down seeing plans, advisers expand the without have in confidence well those a starting first before watch we're markets our give to us second them due of they're closer contingency have year shut open the get open in and favorable see to the with and we refinancing. going for just XX%. last the go around high opportunities and ‘XX. exact current. up you you back. do opening the

Dan Crowley

asked She cash as well. about

Jim McCabe

million except lot that's see that a initiatives. more sufficient. about right I than for essentially $XXX Yes, And for it’s a now, going growth need don't forward

continue us We alongside our technologies platforms. our our invest who customers, our capital existing take to technologies with in are to new of investing their on

that do to in and after opportunities reduction get keep business we to reinvesting look then for to So the we externally. we'll eventually, down growing. cash grow sustained want And outside keep

Dan Crowley

that you've years. follower we're X% this and about years Yes, North XX% in business. stock our for year years Last were and were we were headed year, from EBITDA an of Sheila, the we remember, many we XX%, about coming a you post ago, two been

been remember the And earnings and Board cash or and on we I we've I achieving away path just our so leverage a think And through goals. flow deleverage were quarters four to three from briefing pre-pandemic.

that. of and a for support bondholders. enjoy investment we And banks So resetting now from and we're interest the lot

So we're confident we can get refinanced.

Sheila Kahyaoglu

lot you of just for that. follow-up. And sense. Thank maybe shorter a a makes That

Can you $XXX your $XX in the or little went $XX a square remarks, prepared you Dan, maybe that but think, of mentioned million up bit? backlog new million million. wins, I

Dan Crowley

Quigley to respond on going Tom I'm that. -- to So

Tom Quigley

Sheila. Hey,

years really two As recall, is of backlog our you only next orders.

to received earn we've taking win orders that that orders a we're and of contract firm we expect on or five-year that beyond portion thing the on contract? maybe where that's into do account. So What

Sheila Kahyaoglu

you Thank it. so Got much.

Dan Crowley

Sheila. Thanks,

Operator

with Strauss come David Our from Barclays. next question will

now may You ahead. go

David Strauss

Thanks. morning. Good

Dan Crowley

morning. Good

David Strauss

in that Jim? ask my is million working free are looks math XXXX then like for capital And working fiscal for positive if around Is in ’XX. in flow capital, there? quarter? to working wanted assuming What assuming right, you're capital $XX about like you in comment to the it getting correct, fourth cash positive Just your

Jim McCabe

Yes.

to product as flow for in be working It both on directionally, out generation, quarter, lot meaningful the I working $XX going QX. I the So of next specific assumptions happened in is cash will fourth from full of a because contributing demand. mentioned, have capital shipping and But be part what's seasonally year. capital a are to the million stronger is improved time don't substantially. in with has working capital we

well. we're little past. in forward year that indicator think was one capital it chain improving dependent the portfolio, but were We've into should and we new supply a looking And down. XX-point with be than we improving, working disruptions, coming higher a as quarter. capital over less that's I to that's about little the capital next to be a seen And because improvement just working leading of working

David Strauss

of on a need to any pension early any guess, an standpoint -- And cash from you'll whether from both and Okay. make contributions? for income sort thoughts I next year,

Jim McCabe

should early to There in interest and have to is put material out the with not there on year, the risk all. year-end some how we how language are. the in rates but about at what disclosure the do Yes. be markets funding depending the it could increased assets, be valuation say, But going next years. Too say

David Strauss

much. Okay. Thanks very

Operator

come from with Our next Wolfe Walton Research. Myles question will

go now may You ahead.

Myles Walton

morning. good Thanks,

Dan Crowley

morning. Good

Myles Walton

implied go past, I EBITDA, hoping to is the maybe to you $XX of is which was the back I said for million something Dan, $XXX think doubling in million.

your XX% sort margin improvement that embedded of this think going $XXX about do to we a about here And you're fiscal million? should two in ‘XX? Is projection margin a Thanks. from as And to target questions. mentioned is target you what then One, there year. is it linear

Dan Crowley

Yes.

very we've our with improvement in three percent been own and a over last meetings Myles, years. the that on have We margin and discussion fairly the linear Board,

But the as what is of did to little high the and it's composite can end As to everybody we HEICO go. and harder lower at peers, peers a from end you at a we imagine, at other the looked our average. TransDigm you

that's least be a at believe peer earnings at needs Triumph we achievable. to -- So And XX that's XX. which is multiple, where and that's between like

an the Day than we're do the it. fiscal and and the can't When you percentage earnings the we to our important Jim amounts $XXX that we'll confident multiyear We get sufficient more need a with But in of you well because and were percentages. capital I our cash dollars, delever above million. why absolute structure we're to next goals, and setting for generation our guidance provide that year, we give target fiscal are that's It's as on can more ’XX, for you can insight give color we contemplating that outlook. Investor in next more year on achieve

Myles Walton

sure, in one-times in make sounds cleanups? then, kind Seth's were it right. right And that Jim, think I a few maybe million. want question, structures, as just I like Okay. to there some of final All Is

Jim McCabe

under around in there's the was $X of $X cleanup think million maintenance a than think, million -- cash, I -- the I less TSAs. continuing There was quarter. there,

programs it's as that don't minimis left. ESC have de we getting many So

Dan Crowley

work we a reserve tooling them is don’t anything of and pass about found that adversely was number the There to down. closeout put at we to shut for up reacted up And investors and of sites a $XX wrap need those what that like a million. we disposition

year. So we earlier the there we’re cost more than the were in close-down in confident

Myles Walton

you. Thank Okay, alright.

Dan Crowley

you. Thank

Operator

Osterland Securities. next from with Pete Truist come Our will question

go You ahead. may now

Pete Osterland

Thanks Mike for this for morning. question. on taking Ciarmoli our I'm

First, Systems wanted on ask I and just to Support margins.

there margins You it looks on higher were sales. mentioned down the as a prior year sequential benefits there, like despite well but basis period

what's wondering negative impact more Did just quarter? was the was side? on I So there. product margin a mix driving cost the Or have it pressure

Jim McCabe

year, a in mentioned modest sale had well. was line last out So this conjunction there you small Protection Act were in, with as compared in there year, QX year, Manufacturing IP a there money called Aviation license legacy sale. one-timers we we got to product us in I the But which benefits last the IP first, some an sale one, of

this a quarter very is clean. one-timers whole There's not lot of This quarter.

going look moving there. you when at this So we're forward, from quarter to grow

quarter which the was a margin, in mean the from another it QX, I look TSS and at year for EBITDA way XX.X% ago. is that's to XX.X% up in

The with time-to-time. So there. the we're does pleased mix change from progress

can lumpy. we're positive, of spare with the and the sales overall is pleased be But trend it. Some

Dan Crowley

out TSS The clean was take Yes. have When It higher operations. years, prior that you was earnings in rate we Jim we this didn't had mentioned, the of from revenue that than growth. those in any and growth one-timers profitability quarter.

mentioned demonstrate XX%, was, the that's we so QX. fact, again revenue growth higher. And earnings growth You in core to intend what in

Pete Osterland

right. as labor you market a anticipating you conditions need All meet for have attrition? hires you elevated how are helpful. that you then any fiscal into place the And currently? in ‘XX? That's do the And seeing that Are the follow-up, just you're to in growth

Dan Crowley

do. their been there's needs, our can money our employees, comments, like pockets We getting harder. that grinding in levels address labor. And better And been generally, and all at mentioned every can't plans. gear to look hours, skills include our Triumph all of a our But are of We has specialized their peers. attribute at which to sites. but I across flexible I this my of week We're all attrition work the headcount -- than support few throw we new deal we touch development

year, stipends haven't where on people an a and labor they've during And mechanics engage done way. at because gas our lower supply of that. employees some to long to be casting been get things involvement. the And prices. we employer has choice, want just we've last seen did tier We really to able experienced lot struggled. summer community giving And they appreciate that's been of particular, of, kind chain and But a mostly and the, houses, we've gone in challenges the where cash

So that's good area Triumph, a we're shape. But us. actually internal watch in for

Pete Osterland

color. Alright, Thank that’s helpful you.

Dan Crowley

you. Thank

Operator

Cai question next with will Cowen. Rumohr from Our von come

You now go may ahead.

Cai von Rumohr

of stocks them those sort warrants, you there's me someone there? much. what exchange arbitrage. sort through Yes, Maybe that, that at use at expect And a the retiring are buy it thanks do the But And the if and the strike of positive priced so debt makes which are wants terms in to sense walk $XX.XX. maturities of under what I to guess, warrants? behind you XXXX thinking by seeing

Jim McCabe

the Cai. through that us optionality you've our equity ATM didn't option Yes, to past, an shareholders. provide give And Thanks, seen and an raise to really the warrants in shareholders.

And was, the feedback have of some like we'd the choice. to

for value shareholders what choose buck that give and security, that can and sell money buy value. and of way, something get they equity market to So they it's realize warrants trading could now, use into They a get did for stock the just over and it they term. that bonds go their could way to the and was sell got to they maybe stock, exercise want those stock And above stock to the exercise they cash, on trading hold or the could because may the warrants hold that comes that or the time is when point.

optionality it provides and existing shareholders. to So rata value pro our

overall possible provides and solve an of naturally the to want just best that. to expansion optionality, margins. a come pleased delevered It's just it to still So avenue changes component to do that It provide on one be all to get right? We doesn't through for problems. going right deleveraging maturities higher We're shareholders. strategy, at time, due. portfolio EBITDA through able our before one we're refinance value the We're terms they but for go

Cai von Rumohr

as said, going whole more not XX% to than substantially. clearly pay big. you're to you you're five Sheila like In their your a the I twice very if And quarters But have X.X% Bombardier to unless is to unlike bigger Spirit, case, lot your revenues. get pay like done. market debt look, changes going And this it's probably other while or have than high-yield basically candidates like

So interest basically refi will a your really costs, are margins increase that or that and your bad. not

margins get increase kind Your those can pretty margins, limits so it -- EBITDA are like the percentage of, the But in adjusted but good. growth. -- you looks

goes can expense, really so type think EBITDA like. I up the basically generate cost deal your the most eats I shareholders feel see is where of adjusted point really and of Or incremental up of would value the a mean, you a you And so with you in adjusted you there spiral higher that do the interest sort you're margin? EBITDA interest can like where potentially

Dan Crowley

Thanks, Cai.

of business, I think one. underlying debt, show our what your our absent value is is a the but fair QX results the question

to execution, average our XXXXs by last we us in in high-yield warrant. an refinanced viewed lot the said, lower is service second of credit lien, dividend of not we're Triumph than the trading a markets of with pay First, When It going first confidence carry those as favorably X.X%. should terms about are And are reduce ability that at At million. and in the let's more debt. is weeks. seeing full about but And few start a the our lot to by two opening interest we $XX the rate whole yes, that of price, a the bondholders X.X%. gives you

I that any projections interest all forward watch we it market than full And ’XX, exit A&D in rates space, I So looking ‘XX, the all, and short-term you'd comes we'll level. higher the to of think carry have are along reduce that then refinance period, couple say would debt that on debt agree at by be and years basis. option XXXX to that favorable of during that first any the the a pandemic do, a all we're with were from for a and

to And earnings the period, generation. during this period stronger downturn things cash we've do done these have position the really and us

we're the OEM right carry-down. cash of mix our use, that We're refinanced. and debt we're -- Boeing get sources between we've retired earnings carry well. as and Recall, were we can get confident interest getting advances that confident the our we shed businesses aftermarket, benefits can of we which So our that all

on. important with an and but question, answer, long we're a it dealing So head

Cai von Rumohr

much. Terrific. Thank you very

Operator

Our last Poponak from with Sachs. Goldman question come will Noah

may go now ahead. You

Noah Poponak

everybody. Good morning, Hey.

Jim McCabe

Noah. Hey,

Noah Poponak

the provided time, of and have had in previously? Day. compared saw period to the plans You Boeing's slide internal that just Can MAX Investor the of what where your rates XXXX me square you on thinking up for major now XXX airplane production before you the going what you were

Dan Crowley

gotten bill from We've current gives I our rates us delivery latest rates. Boeing to a Yes. schedule XX month. the that XX mentioned

in out XXXX. put XX there at Now be they a marker around to

so get, now I've each observed there's What step about adjustment. logical up that Boeing's and it between with ramp incrementally is points. some a and will we And new rate then schedule smaller changes

ramp. is as that ones ball supplier are they the fewer So shortages. with and those less it They there's They're fewer bouncing dialing fix the constraints as in. really road on of bounce. to we people have each high remedy them, put And on the a lot chasing

fourth You recent going line call That's the read the they opening that. XXX, about lot. a the for what Boeing North to orders the reinforced help line. All need for

was that QX lockstep rates We're So at we I of above in are building higher them. and will inventory with QX rate on to Boeing's to and production engine build the year, got well. clarity we've this as And we're rate our spot that saw we working say, part not staying them. quickly. off that year, going going burn and in now capital next flat up

So we're excited.

got deferral this that Even restored LEAP, the for a some do been in LEAP, year orders lot we on midyear fourth gearboxes quarter. had our of of the there

be direction on their scrambling in deliver to we're adjust, and to from narrow-body. generally going the profile, XX now update but we as And to expect of So adjustments those XX the we'll smaller them. they

Noah Poponak

a from -- stated the the just It same in is MAX evaluating the a the Or while number that, and the read rate but you're little saying sounds stabilizing a that sooner you a the later? fourth there's And term. firming zone sort higher line. same they're production in in is Their for and for a been lot higher or up? And that's is the bounces shorter helpful. least that the it's like ambitious has digging seeing like clean going pointing still around, said, to little contribution MAX? on -- And now too while. there up than That's delivery at to of you're Okay. the further delivery it about correct monthly a been and

Dan Crowley

delivery their with the to MAX total, first quarter, XX, last XX then year they supports their the in went delivered were they rate then XX to and ended by quarters MAXs think deliveries their they XX aircraft and June, XX four December. in I over the up In it.

So total there's their in increases real XX XX, was delivery out quantifiable and in of output Boeing were MAXs. December

people it's So We've production, happening. of supply a got lot there their MAX. the on observing hardware plant, in we definitely

but And important the as comes It rate a interiors for our plants. not only program actuation number back, is an us. of it's benefiting

be our to But releases wins press the us MAXs for as continue had I Airbus. to some aligned base, we So content, with with is new all diversify a mentioned the we are customer them. as And we about tailwind quarter the going Airbus well. in

Jim, anything add? to

Jim McCabe

that through. plants there Boeing inventory the had of Some some burning was

kind trailing why still that's may ramp going we're we and be up. So ramping, of, their

time Some of not. our are and near places are in some just

we're that's ramping inventory. I think there So the that difference is at

Noah Poponak

Okay. new wins to Last some you referred one, just you announced.

some to But the a of lot a started that? row how and with as up. Or end way clean existing strategic and revenue quarter, adding to Is frame The products and many there. Your quantify now pointing you Obviously, investor portfolio? or see presentation announcements. are for things the new has I while has a a in there that, how it growth on see? this slide do outgrowth because -- described the new of we the quarter new multiple percentage any any encouraging. seems two -- every initiatives earnings market sheet wins new much mean, pick products, you you up. I Or you way is you're a other to pretty mean, picking could organic

Dan Crowley

Yes.

new And XX% coming volume. goal of my for I'll revenue cycle. on about from a new Investor Day the that. But is exceeding of The new we our our quantify product-by-product in suppliers, take are XX%-plus that talked the -- on up. our wins life all, to how product coming of that's the script, goal challenge contribution I the be and of a wins we're and to customers of of maybe throughout basis order set a First

are So early on can't but on sixth-gen talk we that programs, specific development development fighter programs, current new content, I we think on platform. B-XX, about

well. plused like to up budget, production CH-XX. programs C-XXX. got budget the transitioning the The as to C-XXX up. in programs low-rate got on are plused on aircraft we and five in then V-XX, then the like that aircraft. XX And Apache President's mature a F-XX CX, we plused up be was be the for want And they want There's

want good problems end, you then So V-XX the us for example, in to is at mature tail are the be we very -- aftermarket. and as an aircraft, which [Indiscernible] the of today, phase have these the end, if sustainment

from of mix development ago. arc and If these get any financials. gaps They good big sustainment, like swings XXX, five G-XXX, Triumph a the that pipeline. had was those. gap that through problem but life then think, that And your years part production had we've your of stability while a it lot get lasted, early opened you in programs in now a and C-XX, across you in late up achieved, I And

and favorable, backlog take book-to-bill our X.X. month-over-month. aftermarket. let or action And give contributing. So growth vision the been us indicators, controls, real But companies our all have We greater specifics look the how to gears, than have they at book-to-bill actuators, they're it's operating leading you -- are whether on very of each they

level across our operating of growth consistent a it's units. all So of

Noah Poponak

Thanks much. very Okay.

Dan Crowley

Thanks, Noah.

Operator

today concludes question-and-answer be Standard at XX:XX at Group's available Triumph will Standard session through and Time Call. replay Time. Quarter a.m. XXXX our Year February Eastern a Fiscal p.m. Conference Third will Earnings This This X call have XX:XX Eastern that

the and Thank access X dialing for that's Again, again X you by XXX-XXXX XXX-XXXX. (XXX) attending can XXXXXXX. entering today's (XXX) replay XXXXXXX, presentation. You code access it's

disconnect. You now may

Triumph (TGI) 1 Feb 232023 Q3 Earnings call transcript