Triumph Group’s 34% Growth in Commercial Aftermarket Sales Reflects Strong Support for Tourism Airlines and Global Travel Infrastructure

Triumph Group, Inc. (NYSE: TGI), known as “Triumph” or the “Company,” has released its financial performance for the second quarter of fiscal year 2025, which concluded on September 30, 2024. The company achieved solid growth, marking its tenth consecutive quarter of year-over-year sales gains and has raised its fiscal year guidance.

Second Quarter Fiscal 2025 Financial Performance

Key Financial Metrics:

Net Sales: Triumph reported net sales totaling $287.5 million, reflecting a year-over-year increase of 1%.
Operating Income: The company’s operating income reached $32.4 million with an operating margin of 11%. Adjusted operating income, reflecting certain adjustments, stood at $36.0 million, resulting in an adjusted operating margin of 13%.
Net Income from Continuing Operations: Net income from continuing operations was reported at $11.9 million, which translates to earnings per diluted share of $0.15. The adjusted net income was $15.4 million or $0.20 per diluted share.
Adjusted EBITDAP: Triumph achieved an Adjusted EBITDAP (Earnings Before Interest, Taxes, Depreciation, Amortization, and Pension) of $42.6 million, with an Adjusted EBITDAP margin of 15%.
Cash Flow: Cash used in operations for the quarter was ($38.4) million, with free cash usage totaling ($44.7) million. By the end of the quarter, Triumph reported available liquidity of $148 million.

Revised Fiscal 2025 Guidance

Triumph is confident in its year-end projections due to strong aftermarket demand and cost-saving efforts in various business areas.

Net Sales: Estimated to reach approximately $1.2 billion.
Operating Income: Increased to a range between $140.5 million and $145.5 million, yielding an anticipated operating margin of 12%.
Adjusted EBITDAP: Revised to a range of $190.0 million to $195.0 million, with an expected Adjusted EBITDAP margin of 16%.
Earnings Per Share (EPS): The company projects diluted earnings per share (EPS) between $0.47 and $0.53. Adjusted EPS is anticipated to be between $0.70 and $0.76.
Cash Flow from Operations: Forecasted between $40.0 million and $55.0 million, with free cash flow expected to range between $20.0 million and $30.0 million.

Operational Overview and Market Commentary

CEO Statement on Triumph’s Strategic Gains:

Dan Crowley, Triumph’s Chairman, President, and CEO, noted that the company’s commitment to growth and operational efficiencies has been key to its success. “We have achieved our tenth consecutive quarter of year-over-year sales growth, with our commercial aftermarket business seeing a 34% growth driven by IP-based initiatives, countering temporary OEM and supply chain challenges,” said Crowley. The CEO attributed cash targets being exceeded this quarter to improved performance across Triumph’s divisions, notably in the Interiors segment, which saw substantial cost reductions and adjustments to realign its profit and cash flow projections with full-year expectations.

Outlook for Second Half of Fiscal Year 2025:

Crowley added that Triumph is raising its fiscal 2025 earnings and cash flow targets in response to sustained demand and improvement in the Interiors segment, even as short-term OEM production is temporarily lower. He expects a recovery in production in the fourth quarter. “Our aftermarket growth, operational performance, and seasonality will drive free cash flow generation in the second half of FY25,” he stated. Crowley further emphasized Triumph’s goal to achieve top and bottom-line growth above the industry average.

Segment Performance for Second Quarter Fiscal 2025

Triumph reported revenues across several segments, reflecting its diverse client base in both commercial and military sectors.

Commercial OEM Performance

Revenue: $118.9 million, down from $130.6 million in the same period last year.
Factors Affecting Sales: Declines in sales volume on Boeing 737, 767, and 777 programs impacted revenue, although this was partially offset by increased sales on the Boeing 787 program and a favorable settlement in the Interiors segment across multiple programs.

Military OEM Performance

Revenue: Increased by 4.9% to $64.0 million, up from $61.1 million in the previous year.
Growth Drivers: Higher sales volumes on the CH-47 and AH-64 programs supported this increase, counterbalancing declines in the V-22 program.

Commercial Aftermarket

Revenue: Rose by 26.2% to $50.2 million, up from $39.7 million.
Growth Factors: This segment benefited from increased spares and repair sales across multiple platforms, notably the Boeing 787 program.

Military Aftermarket

Revenue: Increased slightly to $43.8 million from $43.6 million in the previous year.
Revenue Sources: Growth in repairs on the CH-47 platform and a $5.0 million intellectual property transaction for spare parts helped boost revenue, though partially offset by reduced repair and overhaul sales for the V-22 program.

Additional Financial Results and Operational Highlights

Backlog Growth:

Triumph’s order backlog, which includes firm orders for the next 24 months, increased to $1.90 billion. This growth reflects steady gains across all primary markets, with minor reductions linked to adjustments in the Boeing 737MAX delivery schedule.

Cash Flow and Operational Efficiency:

In the second quarter, Triumph used ($38.4) million in cash for operations, performing better than previously expected. The improvement was largely attributed to lower-than-anticipated working capital needs and robust demand in aftermarket segments.

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