Welcome to Triumph Group's second 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. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. In addition, please note that this call is the property of Triumph Group, Inc. and may not be recorded, transcribed, or rebroadcast without explicit written approval. I would now like to introduce Tom Quigley, Triumph's Vice President of Investor Relations, Mergers and Acquisitions, and Treasurer, who will provide a brief opening statement. Thank you. Good morning, and welcome to our second 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. During our call, we'll be referring to the supplemental slides which are posted on our website. 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. Please note the company's reconciliation of non-GAAP financial measures to comparable GAAP measures is included in the press release, which can be found on our website at triumphgroup.com. Dan, I'll turn it over to you. Thanks, Tom. Earlier today, we reported our second quarter results for fiscal year 2023. Completing the first half of fiscal 2023 marks a long-anticipated inflection point for Triumph as we transition from years of cash use to positive cash flow in the second half of the year. In addition, we delivered solid organic growth driven by a backlog expanding at double-digit rates as commercial volumes return. Supply chain constraints continue to be a headwind, leading to delays in sales in the quarter. This headwind was concentrated in our defense programs, but the active management of our supply chain has enabled us to mitigate the impact on Triumph. Our continued focus here, as well as our visibility in our backlog and pipeline, allows us to remain confident that we are able to achieve our current full-year guidance. Overall, our Q2 results were in line with our expectations, with pieces of our business exceeding them. More to come on that. On slide 3, I summarized the quarter's highlights. First, we generated organic growth of 6% sequentially and 13% year-over-year, driven by improving commercial OEM and MRO demand. Production of parts for MRO stepped up 11% sequentially in Q2 as both narrow and wide-body flight hours recovered. As a result of supply chain shortages, Q2 margins were level with the prior year quarter and are expected to step up in our Q3 and Q4 sequentially with year-end shipments. We have a clear line of sight on parts availability, support, planned shipments, and maintain the high end of our revenue guidance. Backlog is up 11% as Triumph realizes the benefits of our diverse products and markets and customers. With a pipeline of over $11 billion in opportunities, strategic wins on new platforms, and increasing R&D expenditures on differentiating technologies, we anticipate strong revenue increases over our planning horizon of fiscal 2024-2028. We expect to be cash flow positive over the balance of fiscal 2023 and beyond, with material reductions in past due backlog, inventory, and working capital anticipated in Q3 and Q4. Now I'll provide my perspective on the industry and how it relates to Triumph, starting with the supply chain and then OEM rates. Triumph continues to proactively mitigate supply chain challenges, which has lessened the impact on Triumph relative to the market. Let me share what we're seeing and what we're doing. On build rates, Triumph has received firm purchase orders from the OEMs which support our full-year outlook. We remain in close communications with the OEMs on out-year build rates to optimize our working capital levels. Supplier shortages resulted in deferred sales of approximately $22 million in Q2 and associated margins and cash. That said, our efforts to dual source work from low-cost sources has softened but not fully mitigated shortages. We track supplier on time and in full or OTIF, which is a measure of kit completeness so that top-level assemblies can be completed on time. OTIF was as low as 74% in April and has improved month-over-month to the mid-80s. We are focused on critical shortages, competing deliveries, and anticipate achieving OTIF levels of greater than 90% by the end of the fiscal year, which supports our full-year guidance. Last year, we revised our policies to provide 24 months demand forecast to our primary suppliers as well as strategic order coverage beyond lead time to secure allocation to protect our most critical programs. While our suppliers are not yet achieving 100% on time performance we expect, this incremental progress will enable Triumph to burn down approximately $40 million of past due backlog by the end of fiscal 2023. Castings and forging providers have been the largest sources of shortages. As such, we are expanding our additive manufacturing applications on items such as housings, actuators, and heat exchangers to reduce our long-term dependency on these long lead and capacity constrained sources. Our top supply chain priority remains to secure near term delivery assurance to ensure we achieve our fiscal 2023 revenue plan. We continue to partner with our customers and suppliers to ensure continuity and affordability. On the cost side, we continue to work with our suppliers and to mitigate potential price increases while also sourcing from alternative suppliers with lower costs where possible. Along these lines, Triumph awarded contracts to new suppliers in India and Thailand in the quarter as these countries expand their investment in A&D. As a result, these increases have typically totaled less than 2% of sales, and we expect any impact to be immaterial to our results. Triumph's cost reduction plans go beyond our supply chain. We set a goal to generate $49 million in cost savings in fiscal 2023, $42 million of which are related to internal costs. Year to date, we've generated $40 million in savings. Looking at OEM rates, the commercial aviation market continues to recover. Although paced by the ability of suppliers to support desired ramp rates. Travel demand continues to strengthen. The global commercial fleet has returned to 91% of pre-COVID levels with 96% of single aisle aircraft and 74% of twin aisle aircraft return to active service. There were other encouraging signs in the quarter for the twin aisle segment as Boeing booked orders for 60 twin aisle aircraft, including sixteen 787s from China Airlines. Further, Boeing resumed deliveries of the 787 in August, handing over nine in the quarter, while Airbus delivered thirteen A350s in the quarter. We anticipate rate increases on the 787 to follow. This is welcome news given Triumph's substantial ship set content on these platforms, which includes the entire suite of hydraulics and actuation for the 787 landing gear system. We are currently delivering 787 at rate 2-2.5 per month with a ramp to rate 4 anticipated early next year. Boeing forecasts a return to rate 5 in late calendar year 2023 and rate 10 in 2025. After large increases in OEM narrow body build rates from pandemic lows, the commercial OEMs recently delayed the next step up in production rates by 6-9 months to let the supply chain catch up. Triumph had already lowered demand forecast for narrow body deliveries in our internal plans. Most of our plants are producing MAX components at 26-31 ship sets per month and 45-48 per month on the A320 family, which has been key to organic sales growth I mentioned. Engine delivery push outs in Q2 on programs such as GE LEAP have already started to reverse as OEM supply chains catch up as a result of prudent slowdowns, which will benefit our second half of the year. Short term increases in inventory are expected to burn off in our second half benefiting free cash flow. While we look forward to even higher OEM rates, the recent rate stability and gradual supply chain recovery reinforce the bottom is in for our commercial end markets. We look forward to providing our fiscal 2024 revenue guidance with the latest OEM rate increase profiles. This macro backdrop, Triumph continues to see increasing demand across our markets as the aviation market recovers. Areas of strength include recovering OEM rates, strong MRO demand, and partnerships. Q2 saw our systems and support segment book to bill up 34% year-over-year with Q2 bookings up 15%. This is primarily driven by increases in commercial OEM and MRO end markets, while military backlog was also up a more modest 4%. I'll touch on military more in a moment. Triumph's backlog growth is the best leading indicator of top and bottom line expansion. Across Triumph, backlog is up 10% year-over-year with Boeing 737 backlog up 40%, F-35 up 60%, and the CH-53K backlog up in excess of 100%. MRO inductions are up as air transport and freight traffic expands, and we continue to progress to expand our market reach geographically, securing industry-leading aftermarket partnerships. We recently announced our partnership in the Middle East with Mubadala's Sanad, which will provide in-country access to the region's MRO markets and enable us to accelerate growth in engine accessory repairs. We expect this partnership to provide incremental sales starting early in fiscal 2024. Beyond forecasted increases in demand, enhanced pricing from recent contract extensions are starting to kick in, especially where we are the design authority, which applies to about 70% of our products, or where we are sole source, which is the case for 90% of our products, excluding our third-party MRO business. Taken together, our growing backlog and improving mix of OEM and aftermarket business support our goal of doubling profitability over fiscal years 2022 to 2025. Let me provide supporting facts on where we are on winning and how it affects our product mix. We set a goal in fiscal 2021 to generate 25% of our revenue from new customers and solutions. Since that time, 40% of Triumph's awards are associated with new products and/or new customers. Wins for the quarter totaling more than $200 million can be seen on slides 4 and 5. These wins are driven by Triumph IP on a number of products, including airframe-mounted gearboxes for the next-gen military platforms, hydraulic control valves on Future Vertical Lift helicopters, turboprop engine controls, thermal pump packs, and rotorcraft digital engine control upgrades. Triumph's MRO businesses are growing with new inductions up 26% year-over-year and recent awards across platforms in both military and commercial programs. New MRO customers added year to date include DHL Bahrain, Jetstar, BBAM Aircraft Leasing, Irish Air Corps, and Goodrich Aerostructures, Foley, Alabama. The military market, which expanded during the COVID downturn, is stable with continued U.S. government demand. While military sales were down in the quarter, backlog is up, bolstered by geopolitical events and subsequent FMS sales, including 96 AH-64s to Poland, 35 F-35s to Germany, and 24 F-35s to the Czech Republic. Additionally, we are experiencing resurgent orders for the M777 howitzer, a British wheeled towed artillery for which Triumph supplies magazine assembly components. Triumph is actively developing IP in support of new military platforms in the form of next-generation gearboxes, valves, fuel pumps, actuators, landing gear systems, and vapor cycle cooling systems on multiple platforms currently under development. These upgrades are needed to address aircraft electrification, higher fuel efficiency demands, and the higher heat loads associated with electronic warfare. In the quarter, Triumph secured roles on the next-gen engines, the Digital Century Series fighters, and the Army's new helicopter platforms that will benefit our fiscal 2024-2028 planning horizon. Watch for Triumph orders as OEMs prime awards for these new systems are announced. Fiscal 2023 also marked an increase in the breadth of electric aircraft ventures beyond the eVTOL or air taxi space. We are actively engaged in 5 programs providing a mix of gearbox solutions, insulation, landing gear solutions, and actuation for freight, regional transport, and urban mobility segments. Landing gear, actuation, and gearbox components remain essential to electric aircraft, playing to Triumph's strengths. We'll share more information on these programs as they mature. Bottom line, despite short-term flat spots in commercial rates and timing issues caused by supply chain shortages, Triumph continued to deliver on our commitments to our customers and to meaningfully grow backlog. We remain on our path to value through this dynamic A&D cycle. We kept our momentum going during the downturn and expanded our partnerships, products, and services, which are now forming the foundation for our future growth and margin expansion. Jim will now take us through results for the quarter in more detail. Jim? Thanks, Dan, and good morning, everyone. As I review the financial results for the quarter, please refer to the presentation posted on our website this morning. I will be discussing our adjusted results. Our adjustments are explained in the earnings press release and in the presentation. Triumph's second quarter results met our expectations, and we are on track to achieve our full-year financial objectives. Our consolidated results for the quarter are on slide 8. Revenue of $308 million reflects increased volume from narrow-body platforms, offset by decreased military rotorcraft volume compared to last year. Excluding revenue from divested businesses and sunsetting programs, and despite the current market environment, we grew consolidated revenue 13% organically over the prior year quarter. Adjusted operating income of $30 million represents a 10% margin, up from 8% a year ago, and includes the impact of decreased military rotorcraft sales more than offset by a favorable closeout of legacy programs, a sale of certain non-core IP, and tailwinds from commercial narrow-body production rate increases. Adjustments this quarter include a $104 million gain on the sale of businesses, primarily from the Stuart divestiture that closed on July first, and $2 million of restructuring costs from an aftermarket product line we exited in the quarter. Systems and support segment results and highlights are on slide 9. Organic revenue is up 13% in the quarter, including decreased military rotorcraft sales, primarily from supply chain delays, but more than offset by higher commercial narrow-body volume and a sale of certain non-core IP. Systems and support operating income was $43 million or 16% margin, which is up slightly from the prior year. As Dan noted, we benefited from the commercial market upswing, with commercial OEM sales up over 30% in the quarter over last year. Results for our structure segment are on slide 10. The continuing business in this segment is the interiors, insulation, and ducting business. Excluding divestitures and sunsetting programs, structures revenue of $33 million was up 14% organically. 737 production rate increases in interiors contributed to the organic growth, partially offset by lower wide-body sales, which are expected to rebound. Operating income improved with the favorable closeout of certain 747 obligations and volume-driven recovery in the interiors business. Our free cash flow walk is on slide 11. Our $24 million of cash used this quarter included $17 million of working capital growth to support the ramp in our second half sales. As for our quarterly cash flow cadence, we expect our usual seasonality with approximately break-even cash flow in Q3 and strong cash generation in Q4, in line with our full-year cash flow commitment. We continue to expect capital expenditures of approximately $30 million for the year as we upgrade and expand our capacity for efficiency and to support new programs and future growth. The schedule of our net debt and liquidity is on slide 12. At the end of the quarter, we had just under $1.5 billion of net debt. We had about $150 million of cash and availability, which is more than sufficient for our projected needs as we pivot to positive free cash flow generation. We expect to be profitable and cash flow positive for the balance of the year. We are continuing to reduce our leverage as planned by expanding EBITDA and free cash flow in our continuing businesses. We are currently benefiting from our below-market fixed rate debt in this rising interest rate environment. Of course, we regularly review our capital structure with our advisors and board. We're paying close attention to the capital markets and remain nimble and opportunistic for when the windows open to improve our balance sheet before our next bond maturity in June of 2024. Consequently, we are confident in our ability to reduce our leverage, improve our capital structure, and address our debt maturities with a series of timely, balanced, and constructive actions that I look forward to sharing as we announce and execute them. For our full year guidance, turn to slide 13. Based on expected aircraft production rates and the resulting demand on each of our facilities, we expect FY23 revenue to be approximately $1.3 billion. We are increasing our GAAP EPS guidance by 15 cents to $1.66-$1.86 per diluted share. We are increasing our adjusted EPS guidance range by 12 cents to 40 cents-60 cents per diluted share due to a higher pension income estimate. We continue to expect cash taxes, net of refunds received, to be approximately $7 million for FY23. The interest expense is expected to be $129 million, including $123 million of cash interest. For the full year, we expect to use $30-$40 million of cash from operations, with approximately $30 million of capital expenditures, resulting in free cash use of $60-$70 million in fiscal 2023. In summary, despite some temporary supply chain challenges, we were able to identify and execute actions to meet our commitments, and our Q2 results are in line with our expectations. We remain on track to achieve our full year guidance and our multi-year financial objectives. Now I'll turn the call back to Dan. Dan? In summary, our second quarter results achieved in a challenging macro environment position us to deliver positive free cash flow and expand top and bottom lines in the second half of our fiscal year. This, in turn, will provide a strong jumping-off point for fiscal 2024. While it can't come fast enough, the commercial market recovery is happening, with rapidly improving MRO uptake closely followed by OEM rate increases. Our systems and support backlog meaningfully grew in the quarter, and our strong book-to-bill of 1.31 year-to-date confirms that our go-to-market strategies and pursuit of new customers, products, and services are working. Triumph remains on track to achieve our full-year objectives. I look forward to reporting on our progress as we continue to unlock the hidden value across our streamlined business and to deliver value for the benefit of all our stakeholders. We're happy now to take any questions. We will now begin the question and answer session. We ask that you limit yourself to one question and one follow-up to give everyone the opportunity to participate. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question will come from Seth Seifman of JP Morgan. Please go ahead. Thanks very much. Good morning, everyone. I wonder, Jim, if you could quantify two things. I guess, first of all, from the slides, the IP sale in systems and support, how much earnings that provided. And then also, you know, how you think about the go-forward margin in structures because it was almost 20% in the quarter, which is, you know, actually better than systems, you know, even at the low production rates we're at now. You know, anything that might have been unusual there and how to think about that going forward. Sure, Seth. Thanks. On the IP sale, you know, we did have the opportunity to monetize some IP with legacy programs, so it was strategic for us to do that. It was about $15 million of sales, and it was high profit 'cause a lot of expenses were incurred in prior periods. The profit was probably in the low teens%. That's one way we closed the quarter, and we have levers to pull every quarter, so we're pleased to be able to do that to meet our commitments for this year and this quarter. In terms of the margins and structures, yes, we did have good margins. We continue to work through the remaining vendor liabilities on legacy programs. There was clean catch in there. I think the overall clean catch for the company was about $8 million positive for the quarter, and the majority of that was related to favorable close out of those legacy liabilities. There's not a lot more of that left. Also in the background is Interiors continue to perform in that segment. We're seeing an upswing based on some 737 MAX volumes going through there as they were kind of breakeven-ish. They're returning to profitability, and they have a very strong growth forecast for next year in the Interiors segment. Great. Thanks. Maybe as a quick follow-up, you mentioned being nimble with regard to the capital structure. Can you talk a little bit about how you balance the desire to see some more improvement you know and positive cash flow you know before addressing the capital structure versus kind of the need to take care of that sooner rather than later, and you know how you're thinking about balancing those two things? Yes. Well, you know, I mentioned we pay close attention to the markets because you have to go to the market when the market's ready, not necessarily when you want to. You have to look for windows. Our next debt maturity is not until June of 2024. We're enjoying very low fixed rates right now, which we want to enjoy as long as possible. We want to be positioned to refinance. Our forecast has us improving our cash flow, improving our profitability, so we're gonna naturally deleverage over time, and we're gonna look for those windows. We're getting good advice, and we have good plans in place, with multiple options to execute. Great. Thank you very much. The next question comes from Sheila Kahyaoglu of Jefferies. Please go ahead. Good morning. Thank you guys so much. I wanted to maybe ask about free cash flow. You know, Jim, you've been very good about talking about it and how we think about the sequential improvement here. I think it was $21 million free cash flow clean for the first half. How do we get to the full year, and how do we think about, just, you know, any one-time items in that, otherwise? Thanks, Sheila. Yeah, we've had a lot fewer one-time items than previous years and even previous quarters. Year to date, we did have $17 million of cash used in Q1 from the Stuart business, which is now gone. We had $4 million of cash shutdown costs in Q1 as well. We really don't have any in this quarter. That's why you'll see on the slide, I didn't call any out for the quarter. They're behind us. It's a pretty clean quarter. Seth did mention the sale of the IP. That only brought $5 million of cash in the quarter. We have those kinds of things. We're in the business of developing and selling IP, whether it's directly or as part of our product. In terms of cash flow cadence moving forward, we're looking at breakeven-ish in the third quarter, and solidly cash positive, because of the trends in the business, but also because of our seasonality in Q4. $50-60 million of cash generation in Q4, and that gets us into our range of using only $60-70 million for the year. Moving forward, we're looking to be cash positive every year going forward. There'll still be some seasonality, but we're on the right track. We're excited about pivoting to growth in cash flow and profitability. Great. Thanks for just reiterating that. I'll jump back in the queue. The next question comes from Myles Walton of Wolfe Research. Please go ahead. Thanks. Good morning. Jim, I was hoping to just follow up on that for a second. I think the original guidance had about $70 million of one-time or non-recurring items in it, and you've got $21 year to date. Is there still anticipated to be $50 in the back half, or are the one times less vicious and you're reiterating the full year free cash flow? Yeah. Thanks, Myles. I guess the way you said it is, the one times are less vicious, and it's true because we've been mitigating them. That's part of the pickups we're talking about in our Aerostructures segment. These lingering liabilities, we've been able to negotiate them down and reduce them. They're a lot less, and right now, especially with the advances gone, remember they're all gone with the Aerostructures divestiture, there's really very little non-recurring moving forward for this year. Is there something in the operations that's offsetting the goodness of the non-recurring going away? Right now, in terms of cash flow, I would say it's the inventory growth because of supply chain challenges. You saw we had $87 million in the first half of the year of working capital growth. Now, that was only $17 million in the past quarter, and it will reverse itself for the second half. Now, that's our normal cadence anyway because of seasonality, but it's been exacerbated by the supply chain challenges. We're working through them, and we think we're as good as, if not better than others in mitigating supply chain challenges. We have a great organization doing that globally, and we know we're gonna be able to manage them. Okay. Dan, one question for you. If you look at the defense portfolio, there are a couple of programs in there that maybe not next year are sunsetting, but certainly over the next few programmatically look like they do. For something like the V-22, can you describe the sort of flexibility and the cost structure you're planning for so that you know you have you know an off-ramp as those programs naturally wind down and whatever new business comes along? Yeah. Thanks, Myles. The cadence on V-22 is really high. We both on OEM and on MRO. NAVAIR, who acquires the spares and repair units in the aftermarket has a lot of orders queued up with us. In the short term, we're busy, and there's some mods that are happening to improve the ability of those actuators to work in a high dust dirt environment, but we're cutting it as well. The platform's got a lot of life. You know, I think we're diversifying the makeup of the work at our gearbox business. We're on new starts like the T-7A, where we do the accessory mounted drive gearbox drive, and we're on LEAP IGBs on the commercial side, and we're winning content on the new future vertical lift alternatives. Even though V-22 may come down in the future, we're not worried about it. We're busy now, and we're on the new platforms. Okay. All right. Just one clean up one. Pension, Jim, is there any outlook on funding requirements there? I know there's been obviously movement on discount rates and asset returns, but is there a look that funding will be required sometime in the near future or no? Yeah. Annually, we do the funding forecast at every fiscal year end. There was no material funding over the next four years when we did that at the end of March. As we all know, the world's changed in terms of asset returns and interest rates during that time period. The next firm calculation we'll be doing is at the end of this fiscal year. We did note that we do expect there will be some funding based on current market conditions and current interest rates if they don't change before the end of the fiscal year. There is a headwind on pension funding should things not change, but not in the near term. Next year's not gonna be significant. It's really the out years 2 through 3 and 4 that might be impacted, but we'll know more specifically at the end of this year. Okay. Thanks for the questions. The next question comes from Gautam Khanna of Cowen. Please go ahead. Yes. Thank you very much. I guess to follow up with Seth's question about how you're thinking about refi. You make a point that basically a refi would likely be done at a considerably higher rate. Given the level of your cash flow, it looked like, you know, a refi just in terms of the ongoing outlays would take a fair bite out of that. Is it fair to assume that, you know, given your business prospects look like they're getting better, that you're more inclined to kind of wait and see and enjoy the current lower interest rates you've got? Yeah. Thanks, Guy. Yeah, I don't think it's a foregone conclusion that our rates would be higher. That's part of being measured in your approach and look at your timing. We do have time. We have about 18 months before our next maturity, and we are enjoying an improving business. With our cash going positive and our profitability increasing, we're gonna look for those windows and execute in a balanced way of the refinancing that's necessary to continue the business. I hope that answered your question. Okay. No, that's very helpful. Then, you know, Spirit AeroSystems basically had a situation where their OE customers asked them to slow down deliveries because, you know, they are not producing at their indicated line rates. Is that a risk for you? I mean, your rates look like they're a little lower, but it seems like things are bouncing around all over the supply chain. Is that something we should be concerned about? We went ahead and marked down, you know, the OEM rates to what we have firm orders for. I mentioned the ranges of output. They vary by plant depending on the channel inventory between us and the OEMs. You know, to have Airbus producing at 47 a month in Q2, headed to 55 within six months and then going to 65, six to nine months after that. I mean, to have the Max at 31, yeah, they did push it to the right, but you know, it should step to 38 in maybe second quarter of 2023 calendar, and then on the way up into the 40s in 2024. For us, you know, we're starting to see the benefit of that, and it benefits our absorption on SG&A and overhead, our supply chain. We're gonna burn off that excess inventory that Jim mentioned. Even the 787 rates, we've taken them down to, you know, approximately 2 a month. You know, we used to do 14. When that program gets back to 5 or 10, it's gonna be a huge upside for Triumph. We are watching engines. You know, there was a slowdown in the quarter on engine deliveries, and those are starting to come back. We got signals from the OEMs that said, "Looks like we've done enough de-risking. Go ahead and start ramping up again." I think there's some give and take between engines and airframers, but our rates are. We have confidence in our rates. Thank you very much. Thank you. The next question comes from Michael Ciarmoli of Truist Securities. Please go ahead. Hey, good morning, guys. Thanks for taking the questions here. Can I just go back to the free cash flow? Jim, I wanna make sure I understand. Last quarter, you had core free cash flow from breakeven to $15 million, and that included Roughly $70 million of one-timers. Now you think the one-timers are down to $20 million. You don't talk about core free cash flow. You just have $60 million-$70 million. Should we think about the apples to apples, $0-$15 million is now -$40 million to -$50 million on inventory? Or just help us reconcile what the apples to apples is last quarter to this quarter. Yes. We temporarily use that, the term core free cash flow when Stuart was still in the portfolio. Now that Stuart's out, we went back to what we've always used, which is consolidated free cash flow. All our businesses are continuing, including the interiors business that's in the Structures segment remaining. We include all that cash flow. We're no longer breaking out core versus non-core. All our businesses are continuing right now. I hope that answers the question, but happy to entertain any follow-up. Yeah. I mean, so did the cash flow weaken then? I mean, I'm just trying to get an apples to apples here. Yeah. I mean. I think the one- Yeah, I just- The one-timers associated with the legacy businesses that have been reduced have been offset with growth in inventory due to. Okay deferred shipments, primarily related to supply chain, but a little bit on wobbly demand. Okay. How long do you think it takes to unwind that inventory? I mean, I know you talked about positive second half and then positive in 2024. You know, is that inventory, that working capital hold through second half year? Do we get more of a burn down as we move into fiscal 2024? How should we think about that? Right now we're forecasting it will burn down over the next two quarters, by the end. Okay Remember that our business now has quicker cycle times because we used to be 69% systems business. Now we're 88% of our sales are from the systems business. We're truly a systems company, and that turns a lot quicker than the long, the big metallic structures businesses we used to be more in. Also the diversity is helping us so that no one problem has become too big of an issue. Our concentration. Our largest customer used to be last year, 36% of our sales. Now it's down to 29%, and that still includes some of the divested business this year. It will be in the mid-20s in terms of our concentration by customer. When you look at the diversity across programs and customers, it's easier to attack them and not have one big problem. Got it. Okay, that's helpful. Dan, just one more, if I could. You mentioned obviously the challenges which we're aware of on castings and forgings, and I think you talked about using some additive manufacturing for housings, heat exchangers. Can you just elaborate how long does that process take for you guys? How long does it take to get qualified? You know, just maybe a little bit more color there. Yeah, it's certainly a multi-year process, but the key is customers saying that the material properties and surface finishes of additive meet the requirements of the product. We'll start out in less stressed components. Secondary actuation usually has lower loads than, let's say, primary actuation like you do for flaps and rudders. We can cut it in on some of the you know, the metal structures that are used in those actuators. Heat exchangers are very encouraging because most heat exchangers are still made sort of in a tube and fin design that goes back to the 1800s, and now you can print those. You know, we're going through. We've got our first flight hardware on that, on those sort of products in use now. We'll just get customers to adopt them incrementally. There's weight savings, there's cost savings, the value proposition is pretty compelling, but it does take years to cut it in. The point being is that we're not just wringing our hands about the shortages in the supply chain. Between low cost sourcing and our efforts on additive, we're gonna do permanent solutions to what's been a chronic problem. You may recall in the last ramp up, 2018, 2019, pre-pandemic, these were the same bottlenecks we had back then. To my understanding that casting and forging providers had serious loss of talent and specialized knowledge that's taking some time to rebuild. We're not gonna count on that coming back fully. Got it. Perfect. Thanks, guys. Thank you. Again, if you would like to ask a question, please press star then one. Our next question will come from Ron Epstein of Bank of America. Please go ahead. Hey. Yeah, yeah. Good morning. I actually was gonna follow up on that question that Michael just asked on the additive manufacturing. I mean, realistically, I mean, to get that stuff certified, so on and so forth, that could take a real long time. Is that something you'd wanna do internally, or is that stuff that you'd be working with an additive manufacturing partner? That's a pretty specific domain knowledge to do that. I mean, is that an area of investment for you guys or not? I mean, how are you thinking about that? We invested several million dollars in partnership with GE, I wanna say 3 years ago, and we bought a few of their machines. More importantly, we talked to them about material selection, the powders, the best applications. Triumph didn't acquire the machines to get into the printing business. You know, the future is you design for additive, you upload the designs to the cloud, and then the parts are, you know, dropped by drones, you know, by the dock. I mean, it's gonna be something you can source. But, you know, so many of our products will benefit from it, so you having an organic capability allows you to learn how to design for it. Right now, fuel pumps, actuator housing, gearbox housings are all right applications for this. Our engineers are excited, especially the younger ones coming into the company, because most universities now have 3D printing as core curriculum, and they want to do that when they get out and practice. We're partnering with the agencies that have the strongest voice and certification, like Wright-Patt. We went up to the Air Force technology labs. We showed them what we're doing and the analysis that we've done on the strength of the parts, and they're helping us with the cert. The same thing will be required with NAVAIR, very deep technical ranks. Then our military customers will follow suit. On the commercial side, they'll also benefit from what's happening already on the engines. GE taught us a lot about what they've been able to achieve on commercial jet engine additive as an example. Long term, I'm confident in it. We'll try to find a way to provide more quantification of its adoption for the investors. Got it. You mentioned earlier about moving some work to India and Thailand. Where was that work currently done? Was it done here or was it done in another low-cost market like China? We got out of China pre-pandemic. Triumph had a plant there and had more partnerships. There were some legacy 747 parts that are made, but we had almost no impact from supply chain coming out of China. We had some demand reductions as MRO went down because they were flying less, but not on the supply side. There was more parts that were being sourced from U.S., Europe, other markets that were higher cost. I sent my head of supply chain there, and he came back and said, you wouldn't believe the level of investment that India is putting into A&D in serious capacity. We're going to ride that wave. We already have a plant in Thailand. It's one of our best plants, MRO plants. We have some experience in that market, and they're sourcing locally there. It's just a natural progression of ways to take cost out, and we're going to follow it. I also want to say that more manufacturing done closer to the end markets is the trend. The partnership with Mubadala's Sanad in the UAE is going to support not only the Middle East region, but India, since a lot of air traffic is going to go through the Middle East into India. By having a presence in Thailand, as China reopens, we expect to get a tailwind there. We look forward to expanding our Air France JV from the Americas into Asia. Got it. Maybe just one quick question on the balance sheet. As you all look into 2024, I mean, there's been this open question about refinancing. Have you had any change of thoughts there? I mean, that's a question we frequently get from investors is, you know, how will Triumph do the refinancing and so on and so forth? I don't know if there's anything that's changed on that front since the last quarterly call. Really nothing's changed other than we continue to develop our specific strategies and the criteria in which we'd execute them. We're looking for those windows to open up in the market. Right now, the high-yield market is pretty closed. We don't have to go to market right now because we have a runway of 18 months. We're going to continue to improve the underlying business with better profitability and cash flow. We'll get the best rating and the best terms of execution when the time comes. Nothing's really changed. It's going to be opportunistic on execution, and we're going to continue to improve the business. Time's on our side. Got it. All right. Thank you. The next question is a follow-up from Sheila Kahyaoglu of Jefferies. Please go ahead. Thank you, guys. Sorry, I was sticking to one question. In terms of just the inventory usage year to date, I was just wondering, what are you guys using inventory on? Is it just pre-buying raw materials that you're seeing lead time stretch into, or is it just wiring or semiconductors? If you could give some clarity around that and just how that unfolds? Is it for MAXes or just where is that being strained or is it for defense because you see the supply chain having issues there? Then I noticed payables is not a benefit for you guys, but it is for some of the other suppliers. Are you worried at all about smaller tier three, tier four suppliers not getting enough advances and cash funding? Are you guys watching that in your supply chain at all? Thanks. Yeah, thanks. Great question. On inventory, we started our year in April. We were working to a higher set of 787 and GE LEAP rates as an example. Then there was some markdown of those rates. Of course, you place these orders six to 12 months in advance of need. That was a bit of a whipsaw on demand versus supply. Now we're going to burn that off on both programs. We're not ahead of the game on MAX. We're closely matched to the OEM's rates there. We're not impacted by any temporary flat spot on the MAX. I would say that would be the biggest area. It's less raw materials. I think that only accounted for about $7 million of inventory growth in the quarter. It's more about work in process. It's parts that we have, and we're waiting for the last few parts from the supply chain to complete a kit so we can ship a product, ring the bell, book the sales, get the cash. That's the biggest component. That was up maybe $30 million in the quarter. When we say we're gonna burn it off in the second half of the year, as those last few remaining parts, what I call on time in full, come in, we'll complete those assemblies, ship the product, and then deliver the sales. You know, we looked at our second half of the year as to whether it's meaningfully higher than prior year, and it's single-digit increase over prior year on revenue and earnings and cash. It's not a huge step up, so we can do it. You know, I think everybody I've talked to in my peer group is seeing the same thing in terms of slow incremental improvement of supply chains. Not getting worse, but it's not gonna be solved overnight. On payables and tier three suppliers, we've done two things. One, we started giving them longer horizon forecast. Two, we started giving them longer lead authorization. Three, we worked with them to help them with additional roles within the company, other programs they can support. We haven't had any, you know, bankruptcies. We've had a couple of suppliers that had quality issues, so we've had to deploy teams into them to help them get back on track. Again, castings and housings tend to be a constraint. There hasn't been a financial barrier for them to perform. Jim? Yeah. Yeah, thanks, Ted. I think you covered it pretty well. It's from a purely financial perspective, it's the WIP. The work in process has gone up. If you look at what's the root cause, it's the on time in full. Just waiting for those last few parts to fill out the bill of materials. We haven't seen very dramatic growth in raw materials. It's really in our work in process. We have to balance those. We are working with suppliers that are challenging, and we're making progress. Looking forward to burning down. I think we have about $40 million of past due we're expecting to burn down by the end of the year. Just one last point, Sheila. To the question that Cai asked earlier about the rates, and he mentioned V-22. If you look at page 16 in our backup data, five of the top six programs in our backlog are all going up in rate. Between volume and new pricing that we've secured, we feel very good about this being the core driver of the volume to drive inventory burn off and then cash and margin expansion. Great. Thank you guys so much. Thank you.