Triumph Group, Inc. (NYSE:TGI) Q4 2023 Earnings Conference Call May 17, 2023 8:30 AM ET

Company Participants

Dan Crowley - Chairman, President & CEO

Jim McCabe - SVP & CFO

Tom Quigley - VP, IR, Mergers & Acquisitions, and Treasurer

Conference Call Participants

Sheila Kahyaoglu - Jefferies

Peter Arment - Baird

Myles Walton - Wolfe Research

Ron Epstein - Bank of America

Michael Ciarmoli - Truist Securities

Jack Ayers - TD Cowen

Noah Poponak - Goldman Sachs

Operator

Good morning, and welcome to the Triumph Group’s Fourth Quarter Fiscal Year 2023 Results Conference Call. All participants will be in listen-only mode for the duration of the call. [Operator Instructions] Please also note that this event is being recorded today.

I would now like to turn the conference over to Tom Quigley. Please go ahead, sir.

Tom Quigley

Thank you. Good morning, and welcome to our fourth quarter fiscal 2023 earnings call. Today, I'm joined by Dan Crowley, the company's Chairman, President and Chief Executive Officer, and Jim McCabe, Senior Vice President and Chief Financial Officer of Triumph.

As we review the financial results for the quarter, please refer to the presentation posted on our website this morning. We will be discussing our adjusted results. Our adjustments and any reconciliation of non-GAAP financial measures to comparable GAAP measures are explained in the earnings press release and in the presentation. Certain statements on this call constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties, and other factors, which may cause Triumph's actual results, performance, or achievements to be materially different from any expected future results, performance, or achievements expressed or implied in the forward-looking statements.

Dan, I'll turn it over to you.

Dan Crowley

Thanks, Tom. Triumph ended fiscal 2023 and Q4 on an upswing, with strong margins and positive cashflow, positioning the company for success in fiscal year 2024 and beyond, as demand accelerates. We met or exceeded our full-year financial targets, delivered organic sales growth, maturely expanded profitability, and in our fourth quarter, generated $52 million in positive free cashflow. Q4 was an encouraging finish to a solid fiscal year that marked year-over-year improvement in both earnings and free cashflow. Over the past two years, Triumph doubled our adjusted EBITDA margins from under 7% in our fiscal ‘21 to 14% in fiscal 2023. As we go forward, we expect this momentum to continue and are guiding to further margin expansion and topline growth in fiscal ’24, as we seek to enhance shareholder value in a rapidly improving demand environment. Deleveraging remains a top priority as we continue to optimize our capital structure over time. We recently extended our debt maturities, providing additional liquidity and flexibility as Triumph returns to consistent cashflow generation in fiscal ‘24 and beyond. Our four-point strategy remains on track. First, reposition the company as the systems and aftermarket company, which we've done. Two, improve operations and grow our proprietary and aftermarket sales and margins. Three, return to positive free cashflow to help delever the company. And four, generate the shareholder returns our investors expect. Triumph is a stronger company today as a result of our actions, allowing us to compete successfully in the market against larger and more valuable peers.