Triumph Group, Inc. (NYSE:TGI) Q2 2025 Earnings Conference Call November 12, 2024 8:30 AM ET

Company Participants

Tom Quigley - VP, IR
Dan Crowley - Chairman, President and CEO
Jim McCabe - SVP, CFO

Conference Call Participants

Sheila Kahyaoglu - Jefferies
David Strauss - Barclays
Michael Ciarmoli - Truist
Seth Seifman - JP Morgan
Mariana Mora - Bank of America
Cai von Rumohr - TD Cowen
Myles Walton - Wolfe Research
Noah Poponak - Goldman Sachs

Operator

Good morning. And welcome to the Triumph Group Second Quarter Fiscal 2025 Earnings Call. All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions [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.

Tom Quigley

Thank you. Good morning. And welcome to our second quarter fiscal 2025 earnings call. Today, I'm joined by Dan Crowley, the company's Chairman, President and CEO; and Jim McCabe, Senior Vice President, CFO of Triumph. As we review the financial results for the quarter, please refer to the presentation posted on our Web site this morning. We will discuss 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. And welcome to Triumph's second quarter call. Turning to Slide 3, we had a very good second quarter, capping a solid first half. This sets the stage for an even stronger second half, driven by favorable seasonality and operating leverage. Four key highlights from the quarter include, strong cash performance and working capital management. We exceeded our cash guidance by $35 million in the quarter and derisked our full year free cash flow target. We remain committed to delivering positive cash flow for the year. Secondly, we accelerated aftermarket growth. Leasing expert AerCap expects this trend to continue through at least 2030 as older aircraft return to service, the legacy fleet is extended and the next generation fleet enters its heavy maintenance cycles. We restored our interiors business to profitability in Q2 through a settlement with Boeing and deep cost reductions to rightsize the business. These actions put our interiors business on track to achieve higher historical levels of profitability as commercial OEM volumes return. Operational excellence improved across all four of our operating companies, results are better than last year. This led to year-over-year sales growth as we mark our 10th consecutive quarter of organic growth. This progress enables us to raise our fiscal '25 guidance for both profitability and cash flow consistent with the multiyear guidance we updated in May of 2024, which Jim will detail.