TGI - Earnings call transcript Q2 2025

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Operator

Good morning, and welcome to the Triumph Group's Second Quarter Fiscal 2025 Earnings Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Tom Quigley, Vice President of Investor Relations. Please go ahead.

Thomas Quigley

Thank you. Good morning, and welcome to our second quarter fiscal 2025 earnings call. Dan McCabe, company's CFO Senior by CEO; President of joined Jim and Vice I'm Crowley, Chairman, the and Triumph. Today, President and

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

adjusted discuss our We results. will

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

Daniel Crowley

and Triumph's welcome, second Thanks, to call. quarter everyone, Tom,

our strong free We the capital working performance We guidance to delivering full management. committed capping good X. Slide in even half to Turning for remain seasonality stage driven quarter for key from cash include by $XX year. sets by and cash flow million quarter stronger the exceeded quarter, the our and derisked target. and We cash first an year second highlights flow favorable a very cash half. This leverage. X positive the operating second a had solid

Boeing This settlement business last rightsize year. as reductions These the as older our to put enters the deep to guidance to continue legacy historical progress guidance operating profitability return maintenance heavy results Interiors growth. the we in next-generation sales cycles. We which to at Secondly, with cost year-over-year Interiors to This profitability Leasing all quarter May 'XX restored across than growth. QX This and growth the track and enables aircraft of and its our profitability higher fiscal our through is trend consecutive in actions accelerated achieve business. are X a detail. on our aftermarket led aircraft return. Operational with business fleet extended raise fleet through this will expert least XXXX. expects to updated we both volumes Commercial companies, 'XX, of of us of our better we organic to Jim cash levels OEM mark excellence flow, improved multiyear tenth consistent for service,

X. Slide to Turning

shipsets from and XXX spares spares aftermarket the a multi-decade and Commercial and from of gear age. in across that approximately markets. T-XX by spares see program. and over offset of the quarter, upgrade aftermarket strong in of XX OEM aftermarket included XX% first the environment. Notably, wave in IDIQ of million rising year-over-year than for per in growth of based uncertain XX% and the units a we Aftermarket XX% upgrade on on QX can and surging our of benefit a You shipped segment. repairs softness. grew the engine program improving the as strong, & of FADECs Yakima more X-year average in totaling on contributing readiness will particularly Military Systems T-XX importance deliveries Commercial Support our XXX margins landing driven quarter at the Chinook CH-XX site, profit gross This The were sales XX%, substantially geopolitical end $XXX repairs. Triumph The fleet the result Aftermarket XXX from Chinook entire generated the the actuation which an fleet than reflecting was year, part repairs segment stream more fleet Commercial of will program. Commercial our of higher-margin both our rate entire

the shortage gear emerging of aftermarket grow expect overhaul to fleet cycle. to the and XXX revenue aircraft landing the due We new entering

are like in to delays spares are new repair legacy aircraft deliveries, As businesses support fill aircraft our the by and extended to created slots positioned well XXXNG, the the demand.

carry overhaul closed in continue margins the helping to the Military we fleet. production offset QX and aftermarket, flight Our and sale to Military both small Aftermarket the to in portfolio. spares benefited sales an program short-term product CH-XX due on services Osprey fine-tune declines and repairs, V-XX strong from restrictions the IP our which actuators in temporary end-of-life a as Triumph for

approximately for Triumph's total This While spares year-end. growth million the is MRO XXX by XX% significant on quick-turn made orders landing repairs backlog worth orders program. and $XXX up gear the is aftermarket in typical, fiscal was not backlog from possible

drive potential total from our were but actuator our over on for products Margin independent OEM The second as of Military programs our leverage. to Global improved increased these revenues million XX% programs as over in of revenue for business transitioning different quarter. $X total amount as GE operating well quarter. the Turning second in after jets, service, including will the production, in an and exists the largest These narrow-body market the a Commercial This backlog XXX. are the Commercial gearboxes rotorcraft, Befitting profit and accessory new and to due market provider for company's the spares our profitability. Airbus FXXX the new gearboxes pump of for volumes orders fuel [indiscernible] of Triton in represented across to Highlights to million beyond Red X for gearboxes, the and fixed-wing end than activities. Commercial to X sales they pricing Triumph overhaul the has up included contributes to results. XX XX% jets and status total that sales begin Hawk And fiscal new upside market end contributed revenues year, in regional several the repairs gearboxes well Military based Hawk. our the Boeing increased for the as recovers and and aircraft profitability engine half. overall Aerospace prior XX% sales, OEM gearboxes. platforms, mounted on drive more across X% and wins T-XA derivative our included only similar new the OEM XX% OEM programs. enter multiple first grew the quarter

We the ramps. trend we continue will in expect this XXX pricing further as secure

X% Airbus the on rates, for In are and announced build market, they total top addition, XXX the which we the for and XXX XXX quarter. Commercial represented a end aggressive OEM supplier MAX, the sales X In are customer a programs, just of Triumph. the

at declined beyond backlog remains total XX on million. programs While of our deliveries $XX selective for backlog $XXX pushouts million March months, X these programs high to Boeing due since these

are Now work, expect to we from growth to begin. Boeing returning workers that Boeing

Commercial as We programs to continue providing reduced backlog quarter has million, with their a about production almost $XX cylinders. excited levels, firing to during portal increased on deliveries make to lot be Boeing this And operating all backfill this there's are at companies other demand. Triumph's on alternative Commercial period. Overall, X OEM consistent all

line benefit costs Boeing. continued of commercial Our like commercial including controls to production year resolution in support machinery upgraded Recall we point difficult our XXX Connecticut, solve us product with growing operating and cost stable, and Airbus engage aftermarket center we challenges. On test services a will technology orders reduced Slide reductions, on systems is most improvements, from and equipment labor officially IT our to and Space moved business one profitability in Maryland above cost investments from favorable will actuation on inflection Hartford, XXXX, with within enhanced investments, Hartford, because will to companies. in West our XX. systems positive customers to bring our West And our transitioning controls programs modernize acquired efforts plans. are results. X, new Connecticut, job reached Controls which LEAP Triumph electronics help resolution Triumph's electronics products facilities, and Interiors expectations. I'd of highlight and upgrade full cuts a capabilities into our and opened or GE business and This touch systems contract new leading labs flow from are on Interiors commitments and business efficiency and which development and development production. thermal our boost the Defense segment to and solutions relief deliver our in our new the over new including their gearbox we Fairchild of strategic and enable our and and cash to October

mission this state's With pods, new the systems. high-power requirements I want their and Connecticut without Governor environmental for new support special of emerging project responding this upgrade exist the today. congressional thermal facility our delegation establishment control product we to to of center, electronics would not Ned customers from Lamont Military in of and for which, programs and applications are our both thank

processing basis to has vapor us OEM aftermarket high-capacity that us control enables support from system centers. the system This power testing including electrical We never providing modular products be and Martin for future. to has cycle needs solutions OEMs. Interest a in West cooling pumps upgraded been market systems other compressor thermal electronic in QX in strong forward applications. look on will cyber-enabled transfer thermal announcements and in interest help cooling Case to of test expanding facilities the thermal expanding and the high-capacity compressors. our address will range enhance and this Hartford's for an begin higher, of heat new the data Importantly, lab and point, will to in high-power IT Lockheed bring results. will

gearbox the be which Our XX aircraft-mounted is engine orders to aircraft first which the just gearboxes, June production AMADs KF-XX delivered to the Triumph to be currently accessory T-XA, for will X of which received Korean in flew per family in with their team, gears will those be and developing is quarter. there fill first the Congratulations working order which business on in of first aircraft. a their aircraft flown XXXX.

in growth our on solutions to delivering embedded sum our set uplocks positive is progress business actuation lock. QX, support new smart by September down our during driving Through sensors grew expanding targets we up the XX% Investor addressable focus in ensure XX Day. this program. To Our we to towards up, and with organic markets financial backlog our of Airbus is

As to total billion, the Commercial backlog pushout narrow-body other Military rise, platform Slide noted $X.X offset growth year-over-year continues X% X, and as on up orders. of to

base C-X hydraulic the our XXX Safran markets, the for main contract across a actuator 'XX. We're F-XXEX. progress this GE possible. long-range engine-driven and as Growth gear dedicated and the engine work the and main awarded performance with continue the especially composite classified customer repair we also results. Pylon landing all fiscal gives targets. I door demand Triumph's in team a strong MRO has from all our confidence underpinned members engine as positioned end well X-year controls takeaways. side Their encouraging package aftermarket share new derivative to pump MRO on continuous ducting, us our make electronic markets fuel capitalize acknowledge across to and is and gain the and commitment gearboxes, program Anduril's Triumph for our engagement, ECS of pumps FXXX to our On to want the improvement as V-XX Conversion benefiting financial spares company will we review of diversified Actuator were success. Jim now services Their who products, business, for a

James McCabe

Thanks, QX our results Dan, morning, good and everyone. expectations. exceeded

settled in prices Our is rightsize our Commercial significant settlement again. profitability. Aftermarket driven to to and took Interior the with adjustments cost higher our capacity, development segment customer year. with that most We quarter by on in Interiors. Interiors' double-digit was the to The contributed in profitable restoring lower the has revenue, growth we strong performance which equitable actions and costs for coupled the necessary

quality has its and to process, Importantly, maintain of Interiors on-time continued product high very delivery. throughout this level

excellent second year, results higher measure with Let's Every last and our it all start X. organic consolidated Slide than financial is on quarter is growth.

the XX% adjusted expanded in income Adjusted over increase yielding last $XX $XX year last temporary more mentioned, revenue operating EBITDAP million margin growth points year. headwinds, million EBITDAP of revenue to year. Dan XX% a over consolidated expanded $XX in aftermarket XXX $XXX million or million. of of revenue net offset last than As over $X up OEM margin XX% XX%. million points XXX basis X% increased An about Adjusted or XX% of operating Adjusted basis is XX%.

if did sale growing its the from profit wondering how down, business? be to accelerating Triumph repairs profitable the sell Triumph's and might is growth? didn't Triumph The could its But of you spares is its proprietary demand aftermarket business. regard. aftermarket Triumph its our on able majority Triumph which aftermarket aftermarket No, The of sold business, in aftermarket. comes other companies' sell have this own Now spares our OEM repair was the focused business. to the focus to timing and not repairs parts. We've of to third-party better been turn been not

Our sales sales revenue, the last XX% of quarter. revenue delivered quarter, represents aftermarket year. in aftermarket profit from XX% XX% up total the Triumph's in X/X Triumph's business of of only of our

drives base opportunities growing proprietary installed platforms. next-generation presents on upgrade our of Our profitable growth, content products and our aftermarket enhances

We restructuring, for The expect and continue primarily current years to cost this our strong to Aftermarket Interiors. quarter non-GAAP $X adjustment Commercial demand of million is reduce part this to come.

look our we'll XXX Commercial and in at from gear overhauls included XXX the in Commercial is was wave OEM by platforms. which revenue MAX landing $XX and of Slide XXX tempered bow Commercial from just increases Aftermarket Now the volumes, growth platforms. were X. on quarter. of other revenue QX million million beginning $XXX Boeing on and evident repairs or about The revenue revenue largely up across XX%, Commercial the spares lower

are our Boeing Now business. improvements that expect Boeing we in work, workers returning OEM to

In on the repairs wide-body both on aftermarket programs as our Military Military X aggressive IP as rate is sale of Spares and about QX announced Aftermarket same year. offset were million narrow-body Shown Airbus revenue. sales. lower $X last CH-XX an $XX QX models. addition, by on well as V-XX ramps build was AH-XX revenue about million, and Slide of and

expected engine important next this AH-XX are provide decreases span the several prior market FADEC and and in life QX, V-XX the fleet production over $XX volumes the offset and T-XX a and for sales million was programs increase end CH-XX, cycle OEM program in revenue CH-XXK, as aftermarket support to will Our million margins end years. Military of readiness, The on programs rates. on $X F-XX set diverse this year aircraft maintaining market the cash. predictable upgrade

As to by seen better cash due flow on about $XX guided than million Commercial was we Aftermarket revenue. Slide XX, stronger-than-expected our

driven also all but $X of is, and free expenditures. QX, are semi-annual the capital use payment $XX in use build higher cash payment, rate improving by interest timing This interest cash ramps, This we the million of For chain supply capital working up of second by million. and included million and had $XX the timing our challenges, a quarter capital, the of half. in seasonally course, OEM which of working of

reduction Our since significant than then. is lower million interest payment year last the $XX due to debt

led notes, $XXX is end in the $XXX to and of early lien debt quarter. On Additionally, net Moody's X% quarter, the Slide upgrades XX the year. we we to debt million for of than redeemed in credit our million and the was liquidity. the lower QX, S&P were That's $XXX that last both first $XXX XXXX reported net them million. reducing million. That XX% At QX

down leverage including working now than cash Our needs. of million, is turns year. $XXX totaled our less or Liquidity sufficient planned to and X.X X.Xx million $XXX for is last X.Xx capital

remaining across reduction combined and year-to-date annual our until a are of notes fiscal 'XX million our savings, 'XX $XX interest reminder, due yield XXXX. will debt As and not

Slide XX. to Moving

guidance. increasing aftermarket strength guidance and net reductions resolution Commercial flow cost our increase both the continuing the sales, of based on and our cash commercial discuss 'XX our OEM near-term of earnings the the temporary Let's FY Interiors, We're headwinds. in and

to last increased of to to expect expect XX% million free now of million generation to million net year. EBITDAP $X.X We've a to flow compared continue our margin $XX estimate in and cash points $XXX 'XX. approximately an of XX%, basis XXX million cash about up that's increased We for We've FY range EBITDAP estimate of also million $XX $XXX from $XXX billion. sales our

margins have for already compared and be expected supported for seasonality, OEM contribution and greater the the by to strong flow we planned is and cash the and year. exceeded increased normal million in from $XX margin our to improving timing pricing anticipate we partially year, incremental of demand continued addition last capital to positive, half, aftermarket the working from Free sales in due second headwinds. offset ahead to quarter temporary third Looking by to

also results flow quarter expectations. income, prior second in full We the trend. In the consistent year burn-off our year with our exceeded guidance leading remains the EBITDAP cash strong, 'XX all cash earnings year. quarter, fourth and Commercial operating rapid our has over capital Revenue, working and our summary, Interiors fiscal to free returned forecast to FY all improved flow demand and the guidance. flow raise and prior profitability, cash in Aftermarket

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

Daniel Crowley

from Investor on Thanks, position our our Jim. deliver months shareholders. our Overall, Day, a XX sheet, with has focus the of softness in become contribution to shared The seasonally updated robust portfolio our Commercial Aftermarket, Triumph price half Triumph that in at the for the value benefits us had solid and we second half an enhanced more positions streamline negotiated our our demand objectives and some we short-term that strength IP-based products. stay a us first we've in our product the exceed improvement aftermarket-driven is 'XX give confidence taken the our offsetting of than ago. strengthen balance company fiscal inventory business, The actions strong outlook. aftermarket to and ups achieving of programs. Along the to trajectory increasing

Our facilities key forward and engines We're next-gen future have. excited questions playing fleets. and you our products happy and any to team role look on about remains answer a for the to new aircraft

Operator

[Operator our comes Instructions] question And from first Kahyaoglu Jefferies. Sheila from

Sheila Kahyaoglu

one-timers. better Dan, the second adjusted EBITDA from second despite seems the XX% just up XX% imply of Q&A raise with to wanted the to now, in on like raise you did questions have you -- lot half. about margins just the the in one-on-one and EBITDA half, just in aftermarket. it guidance sequentially and QX X mentioned Jim's confidence, enjoyed I you focus But a I too, the But because

Boeing does help? drivers we the about profitability? contract do that So How reset of think the how much

James McCabe

settlement of add we The Boeing Interiors, as costs achieved. to segment. Dan I'll that is rights separate to in in. start, And and had can you Sheila. see that just resolution and Thanks, it's important with changes a a and negotiate can

been is for why question, So because our happy question a a the no while, long they're it's it. get place. But who is forgot really story we're been a it there's in And the put getting it's on did -- because now, sell I've lot sight right too, important aftermarket aftermarket. myself coming. from to didn't We've we a And and double-digit time we I ask here. that's working been spares that the all that very solid, end because And our in proprietary. it's and the growth people aftermarket the aftermarket of demand own products, that for

So it's not it's quarter. the in profit XX% of our and our -- sales only XX% of

So the the it that and installed the pay as second And aftermarket of the is well. the the think unheard I need spares the drives. half story what's to and in strength that's it's people to attention base profitability driving

Sheila Kahyaoglu

ask just but I the can implied, million, a on raised I believe, cash. second pretty still free $X climb, guidance possible in It's steep cash million $XXX was maybe by half. Then it that like flow seems

about there? that capital we working are do helpful how So the of moving pieces think

James McCabe

has that we in the forecast know working the fourth It's Interiors use historically the and cash. The of building cyclicality is that adjustment in and quick the cash positive on you majority year equitable has collecting year. profitability bolstered first cash the second and the which but change And be we the half cash Yes. strong it's capital been half, got in aftermarket, in the this no increase to very turns in by from strong fourth coming quarter, of from primarily quarter.

Daniel Crowley

work don't year, new in in numbers. the add days the we left to I'll have hit XXX Sheila, just have those to any win we

in and by every what backlog, on end all We are it's parts in that pipeline they of in hand the company either have ship The all the have exactly site knows every the operating in flow. or it to year.

year. materially steep it is. than This it's climb. one is So a always prior is -- It higher not

we So it. do can we're confident

Operator

from comes Strauss from David Barclays. The next question

David Strauss

adjustment potential you beyond the pricing regard year, for in With guess, prospect, was equitable the this And this is Interiors, that have a extend the the for then that adjustment what adjustment onetime on quarter? to the what's I there year?

James McCabe

of Without details David. changes big there's getting contracts, Sure, into extraordinary provisions inflation. customer volume for in and

forward a is that year, regular one are The those settling as that's settled inflation and now changes So we right them but going something basis. negotiated for volumes would this on and renegotiate.

David Strauss

Okay.

also some go you have -- sorry. I ahead, think

Thomas Quigley

Go ahead, David.

David Strauss

there a about was -- talking also been on you Airbus? ask follow-up of sort there? I Airbus you with with Or are to business going Interiors any adjustments just to the there amount have on Has of Airbus, think a I adjustment fair any side.

Daniel Crowley

of or adjustments. And the and really They're much mentioned because We They same input the want lower sources both at the materials certainly impacts discussions of Boeing the in use that Airbus are tiers, talking impacts them discussions, and that have we joint solving. these the you compete happening. gone work inflationary where to denial are of some can't directed have equitable Jim for very to up not inflationary problem on kind it. are prices substantiate

in fact, Mexico Boeing team they operations. down the met Jim the review the to operations impressed and In with May I last were and

Our volume, one delivery, that performs quality. the of do high-mix well, on-time Interiors -- sites very production. business few high factories can They're

businesses that the both the Airbus. cost not Boeing for It's So is and really performance. hit issue external those

with agreement reached we're quarter, with in discussions the in and we yes, as So Boeing well. Airbus

David Strauss

follow-up. want Okay. quick one I

believe, You were prior, targets, talked I the the given but I product sale reiterating Day support. to of those about believe, Investor

free So what EBITDA cash maybe margin targets flow just least a are perspective you could margin remind and the us, now? at exactly from perspective,

James McCabe

believe divested. for we back XX%. those the guidance should was that, And product over cash we that terminal it been I was business it year you so -- exclude Sure. conversion, for the flow XX% margin and would support approaching year, but in when the to back I have refer May this And update to free gave our

Operator

Michael next from Truist. Ciarmoli comes The from question

Michael Ciarmoli

results. Nice

XX%. guess I Just maybe question. Sheila's are to underlying about back margins second the implied half EBITDA

to seems You've I like the margins. if It X% rate that guess OEM never bouncing maybe try and the underlying X%. run been I have unpack between And done maybe before.

coming is your a the there, mean in from margin really So I chain there. definitely improving maybe OEM lift the rates? question of margins some the production pressures supply bulk on still settlement? And underlying third the there's just what out are

color. maybe more just a So little bit

James McCabe

have big up margins higher margin, is expected the is it be are of equitable the driven well. because the So a the mix by higher segment but adjustment mix. certainly, a Interiors year-over-year mix which part to helping we of primarily is in as aftermarket, But

Michael Ciarmoli

Okay.

The do from a Okay. flat I -- sequentially side? mean the It guys mean, Commercial on here? does you follow-up aftermarket, I on actually just looked that. revenues envision accelerating were the growth the the like

James McCabe

the I too. guess repairs help, the the So make more remember gear and so seeing I would in you aftermarket, happening, too, wave much landing That's of on bow we're spares. to is components sure going XXX XXX that

Operator

question Seth from JPMorgan. comes from next The Seifman

Seth Seifman

Interiors think We set just about in Boeing have million we was So going the rates this then. decelerated a we now single-digit obviously, have terms and think of year, of on producing. I I quarter and this we guys kind the can -- recall of of where be of that go-forward also EBITDA Interiors ahead in how in just forward? of wanted And range been kind of delivering the sales, sales terms you in basis? And kind level quarter last to expect should what terms since to saw in profitable in should last

second to off in $XX the revenue go so Interiors And the do we of in expect we should quarter? where expect million --

Daniel Crowley

one, that take Seth. I'll Yes,

stock Systems, which are for that be whole the contribute multiyear the aftermarket, we the did going decided mentioned, true just at had to Electronics demand. and reasons business, conservative they meaningful the term. to reduced that the for depressed OEM the is in rates Interiors we some forecast to we that's a relook we reflect buffer we Controls both and is because on you short and we more in increased So rightsized and our and what business the But have quarter is what

about X,XXX in reduced So was the about quarter. employees X,XXX to

ducting, mean so to leaders. to gears the the -- had entitled all we're the the with huge. And We it I under And and discussed very our composite Boeing that on met When impacts. workforce consolidated there. they're we Seattle. term, produce we million rates are supplier X maintaining our to tens with the side. savings in Boeing. In discussions. flew short settlement key business in senior was with factories to I then the Secondly, inflationary so Boeing at was SG&A of Certainly, the related it's contract a interested the thousands they're year rate, rights blankets management-wise reasonable down. these a I of

asked the You about margins.

of half on-hand is full get price the update we inventory margins up. be steps going with in and fiscal profitable double Boeing off double-digit that we've second definitely margins and to now the burns dollars to And year over we'll then The The but is certainly of year both the rates relief. year-over-year, around 'XX going Interiors. be back digits, its to X% EBITDAP will EBITDAP assumed And our 'XX to in as plan. long-term

Seth Seifman

overall nice -- I up seeing increases That's Okay. aftermarket aftermarket, NG XX%. helpful. XXX then XXX Excellent. on and as the growth well. but was the over just some very just guess And XXX%, on

of -- pieces there the of aftermarket are so the that aftermarket pieces are -- And year-on-year? down there other pieces are significant

James McCabe

NG. flat. So in -- pauses of and the XXX, of have But there the the end were some like are key is V-XX, you that kind and that spares growth Military temporary ones programs XXX are that highlighted the certain the the for of drivers aftermarket near life are

the our growing digits, to limiting crash that due we quarters, but for aircraft see restriction -- the market at mostly is is flight a double temporary following use products. the So years come. only not continuing and overall, V-XX and the of to And unrelated the to

come we back time. in So aftermarket expect to that

Operator

next The comes Bank from from Ronald of America. question Epstein

Mariana Perez Mora

Mora is today. on Mariana for This Perez Ron

Are any how to divested be going strategy. wanted about ask forward? enough? Or there assets I question shaping future So think that are meaningful to that remain that portfolio a we like should about

Daniel Crowley

getting Interiors help So predominantly arrived any and or our Jim the our the of driven volume back no, operating to future certainly up portfolio. noted, is to business at sites. value, But our is APS want seeking aftermarket. companies that business. going to not core as state on of actively we're SEC We've sell We out

what we're These there. nice that's going we investment well. are and very year-over-year, is that CapEx happy with So our very as have are where both growing businesses organically,

big in those value X lever businesses. is the So

there's We gears those gears or see development flow running to we aftermarket if that up well. mentioned improve. What doing about also contributor a But But we our that's transition meaningful now, on, X as that gears any margins of we'll Right monetize XX%. as expect production very I pick don't is are is financials. sort there's and small will programs those. to end-of-life to X programs

James McCabe

our of we have down now is And liquidity. course, strong leverage X.Xx, and cash and to

need rapidly to that took any do of our third-party opportunity advantage We no for to of prior Investor the at aftermarket delever Day. reason. even than more kind there's So divestiture we planned

Mariana Perez Mora

then on my Commercial follow-up And is OE. the

through you of You burning mentioned their off have much Do inventories parts? and on the sense going of for your Boeing any like critical demand do to your inventories ramping have inventories was how start up them they products.

Daniel Crowley

they of and to but in didn't line of restarting production pause, hold. want they factories bit did a a are began across The a consequences with they information went doesn't that go And the higher. actuation. know a lead and to time it because in that. all They doing that has stop then through inventory on-hand learning, lower, learning what into kinds Boeing do. inventory production We where the and sawtooth share is they It ship a varies of inventories an the lost in went key Interiors period trading little Boeing when by to had product is their all skills. curve temporary They were our us,

continue those next with we going burn a is as over Boeing in XX they let of sometime. to to do produce, low portals month, going rates feather at So what the year they're ramp their next in several production they'll albeit inventory. us update the months And plants. And finalize off is to their the to new

for and Triumph of you strikes for the total temporary of the it. I'll the Boeing we're not X% only all year holds full about remind is production concerned So and that shipment sales. impact the pauses

was platforms. to done to And because at think of diversify it's customer I and the So this, not lot of case Triumph deep our about all. speculation we've a base lot a there impacts

Operator

The next Cowen. von from from TD Rumohr comes Cai question

Cai Von Rumohr

I the say margins to Did X% you because margins for guys. EBITDAP would Interiors imply quarter, high-teens in mid- that Great adjusted half? hear second

James McCabe

Yes, of took second the a of just lot In the and X% the to full we're see that's We the right. out range of that business, half X% to of those benefit expenses year. year. this going in for

Cai Von Rumohr

Should the pattern it. was if sequentially the that quarter. up of I year? Got this Military. amount year, expect your at fair then And down similar Commercial the both last fourth in spiked it look we quarter aftermarket and in A pattern then in and third type

James McCabe

continue dollars, be going absolute growth to to in similar to they're growth So and last year. the year-over-year

be and OEM our I think a as because this of that year. be fourth both for strongest going that's to is percentage But sales. back, going moderate coming quarter, again positive quarter are to may that

Cai Von Rumohr

But sequentially last -- they will year? up down they as be were

Daniel Crowley

don't were on that's legacy is year, sort anticipate this that. from given And recommitted based up to they We of doing the last now I aircraft. people still of last fleet. they've about on think different thing that. fleet year and year receipt One planning new

In money date. aircraft storage fact, to up to they've fleet of having to them bring bringing spend the been into out and

part difference ago. than So were year-over-year I the is legacy they aircraft on that think people relying a more are year of these

Operator

Wolfe Walton from Our Myles [Operator Instructions] next from comes question Research.

Myles Walton

alternatives of strategic reports that maybe you at, could you're options. was timing of Triumph exploring looked on there decision, those about? thinking Dan, was elaborate any extent hoping being the I

Daniel Crowley

negotiations, price see I are hitting We Yes. had, the which testament kind ahead. We the we at forever all running committed success seeing was average Jim a don't number building are for team, hard margins, that the as coverage to it team profitability. goal we've I people and kicking of success when know, and workforce and to work were articles this achieved done. that really we set creating this it's we've been and shareholder we've there, on X% remember comment and the Myles. you year, from to and leadership out going now in the want them. take Well, price of it? XX%, we're in we've and is profit you has rumors peer peer-like years all a not compliment. and read getting time me, are that did. can't I Thanks, and we EBITDAP the and remain a will now To control we're 'XX, All the you're I the say same the see in I you that the can that when to fiscal that the the progress continue doing my And value. made. What

Our backlog is growing.

those Triumph rumors, acquired. things, Our is will speculation fuel balance and I stronger be sheet think all about

like a super folks market, the a got we've really start robust cycle. investors them really great product a from and we're results I position a strength to a of pipeline and take got the IP-based is last during huge we're as sales, got supplier in lot of the installed line what partner growing issues that another year, with products. will of We've Boeing a this aftermarket of in with away do base. our a be weathered we've -- an So speculate attractive good We've

do I In review. this fact, of after X to days call planning we're today, finish strat going

to to the focused next we're continue feel and the like form going that value we're whatever in got the we've takes. So years, future. great just on over business runway We a several for drive

Myles Walton

on commented you Dan, And Solutions. Geared Okay.

have Interiors been with production the does you've poised efforts. Have like? deal to combination on declines. And obviously, what business, curious for V-XX? volumes, had cost the think the business a for LEAP surface significant I V-XX I'm that Geared low. you with also as I'm a you I Is reduction about Solutions then production output curious, know mentioned look And gearbox under management inflection? troughed given LEAP LEAP within the your

Daniel Crowley

Myles. Thanks, Yes.

love KF-XX.So It's of to an programs in margins, they will C-XA. be have. although been development the franchises a that of up number new has We're years. me accessory for the several a cleaned of foundation drives. Gears We on last for So for aircraft-mounted of labor several going Those the are support both V-XX. those going aftermarket, from painful benefit -- forward. V-XX was in terms will lot. it's tenant programs benefit businesses We're on really those a OEM anchor helped We're business has on that in business. been that and it now

rate to looking OEM So aircraft And back. to like and long a name to that are little hit we're you brought it. reduce bit, numbers, F-XX the legacy the these when they for time, a delivery side but fly on coming MRO down continue A-XX, going forward it and did the just the

they've gearbox year, deliveries strong. with work terms past an In own of at We approached that discussed be about will in reached of This X,XXX. importance agreement be are the GE's won the incumbent think relationships plant very with do year, maintaining X,XXX. throughput to we'd GE share allowed the GE LEAP, We and where we've it an XX-XX shop and that. with I the looked recently

letting stay rate. even though a deliveries some at engines they're so good Boeing, high And and finished of at fairly there's us are there engines

production. So we're a see not in going to dip

going it's Interiors, the not the Gears, profitability also to further expect rapid In be be we don't terms we in for of saw in longer-term incremental troughing. an going year-over-year I improvement. It's but swing to think forecast

Operator

comes from Next question from Noah Goldman Sachs. Poponak

Noah Poponak

guess, year, had fourth the you Day then mentioned you you the cash little as quarter while free multiyear in outlook last the flow at I And Investor a that. revised Jim, back.

product raising the you're have the I think improvement I had today, Interiors this moving other guess a and the 'XX, sale if support few margin in you outlook. It You seems what the quarter a you fourth in the between maybe Is is and few Day deck? other something quarter like deck provided or it case positives. still base in Investor fourth just pieces.

James McCabe

interest deleveraging strong Interiors, much those all year, than settlement on the reduce give aftermarket, in profitability, this us had the we before. we've had achievements confidence the the to expense, the higher Well, targets

updated much highly of the capital because targets really we of reduce demand. now, some the until have of update and expense. And months, But working in to even don't look for And cycle that no-call period haven't because trading the improvements any than capital And we'll not right then at certainly, middle strat confidence right disruption now, our multiyear further structure would a should that's everyone in need more able X% note right achievable. an would include be We more targets where next should yet. ends We're now targets. it options to X opportunistically budgeting year. we normally, this give because those that's have annual XXX we at XXXX interest we'll it be due those process get in that planning they're we long-term remember, into

we're coming As in that the to going year. stabilizes, cash for have more tailwinds even flow

Noah Poponak

at Okay. and margin? for XX% and to what XXXX that And would a percentage cash now segment sales, XXXX, as the you the within roll the X% the free can Interiors speak of all into

James McCabe

and planned now We've part consolidated we'd & our So Systems on and them. what we specific of details planning. Interior achieved Support that's target, the until I business. of part that is any year getting the always cycle And adjustments finish give what this can't in of equitable

of moving with the So but we're higher improve intact, course, think to are I forward. always confidence. And targets looking those

can we're themselves quarter. through and so tell from following for We on targets looking really all hit the forward So maybe this to can hopefully, and these all cylinders, higher. hit you speak we numbers

Noah Poponak

And ramping situation Okay. your total talked of given just working here Dan, inventory. curious the through close are about just up MAX Boeing's back I level. ability and program back you of ramp up view how the and to the the at kind guess to you

call, long and of a earnings their cautious time. sort taking alluded pretty think, were On that to they, I

looked September they lot that kept shown a The had good. that progress mentioned of the supply You chain pretty going.

for to need but own safety, also balance to balance sheet right waiting them have they to deliver product obviously, their So entire quality that's the chain and and they supply an demand.

quickly how you I'm they curious ramp the think should your do could MAX? perspective, and So just up from back

Daniel Crowley

of of with out some lived He And have up they perspective, and of at I function. in help Commercial that a and there about strike after business production I to commodity I the buffer run the silver their have him the quarter, understands is have them one was inventory. And escapes supply of they I development the having met place put chain, number who mentioned, confidence that the in runs he's quality Boeing as the talked Esam Spirit lot their somebody we parts of in caught M. robust large the the controls I and needed. think customer's So a pause linings on-hand stocks.

prior So I sort quarters limited don't part quarters. ramp be they post-COVID think going by to in availability in the were they're of as

favorable focused to with And terms In important know And training think come partnership more economics ultimately Boeing Ortberg's with I'm to to leadership the optimistic the workforce on is in Kelly they since of style, to are with who struggle are engagement, settlement. is that I the fact, with together. settlement I that people of workforce their comment going was the my IM of be predict going are really lot experienced. that the than they're they're proven wrong. the And a employees less the going

they'll have going support. they're think to on and I parts get back it better

for of ramp a a time. the in do they period on month, comment over that can't in typically it than I other it do of do don't So month shape steps. They does Boeing it

say steps push the that forward. the for chain is those watch I'd ready So to supply and throttles just know

Operator

concludes presentation. The question-and-answer This session. has now concluded. for conference Thank our you attending today's

may now You disconnect.

Triumph (TGI) 12 Nov 242025 Q2 Earnings call transcript