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Triumph Group Reports Record First Quarter Fiscal 2008 Results

  • Net sales from continuing operations for the first quarter fiscal 2008 increased 26% to $275.0 million


  • Operating income from continuing operations for the first quarter fiscal 2008 increased 57% to $30.3 million, reflecting a 25% improvement in operating margin


  • Backlog increased 27% over prior year to $1.2 billion


  • Income from continuing operations for the first quarter fiscal 2008 increased 70% to $17.8 million, or $1.04 per diluted share


  • Net income for the first quarter fiscal 2008 increased 48% to $13.9 million, or $0.81 per diluted share, inclusive of loss of $0.23 per diluted share from discontinued operations

WAYNE, Pa.--(BUSINESS WIRE)--July 25, 2007--Triumph Group, Inc. (NYSE: TGI) today reported that net sales from continuing operations for the first quarter of the fiscal year ending March 31, 2008 totaled $275.0 million, a twenty-six percent increase from last year's first quarter net sales of $218.0 million. Income from continuing operations for the first quarter of fiscal year 2008 increased seventy percent to $17.8 million, or $1.04 per diluted share, versus $10.5 million, or $0.64 per diluted share, for the first quarter of the prior year. Net income for the first quarter of fiscal year 2008 increased forty-eight percent to $13.9 million, or $0.81 per diluted share, versus $9.4 million, or $0.58 per diluted share, for the first quarter of the prior year. During the quarter, the company used $10.8 million of cash flow from operations.

Effective June 30, 2007, the company designated Triumph Precision Castings, its castings facility included in the Aftermarket Services Group, and Triumph Precision, a build to specification manufacturer and supplier of ultra-precision machined components and assemblies in its Aerospace Systems Group, as discontinued operations. The company expects to complete the sale of these businesses in the second quarter of fiscal year 2008. For the three months ended June 30, 2007, the loss from discontinued operations was $3.9 million, or $0.23 per diluted share, which included an impairment charge of $2.6 million, or $0.15 per diluted share.

Richard C. Ill, Triumph's President and Chief Executive Officer, said, "We are very proud of the results achieved during the first quarter driven by strong growth in revenue and improvement in operating margins in both the Aerospace Systems and Aftermarket Services segments. While we continued to make progress in transitioning the casting facility to a profitable operation, we believe that the decision to sell the operations will allow us to better focus on our core aftermarket business going forward."

The Aerospace Systems segment reported net sales for the quarter of $217.3 million compared to $172.6 million in the prior year period, an increase of twenty-six percent. Operating income for the first quarter of fiscal year 2008 was $30.3 million, compared to $20.3 million for the prior year period, a forty-nine percent increase. Operating margin for the quarter improved to 14% from 12% in the prior year period. Organic sales growth for the quarter was twenty-three percent.

The Aftermarket Services segment reported net sales for the quarter of $58.3 million compared to $46.4 million in the prior year period, a twenty-six percent increase. Operating income for the first quarter of fiscal year 2008 was $5.7 million, compared to $3.0 million for the prior year period, a ninety-two percent increase. Operating margin for the quarter improved significantly to 10% from 6% in the prior year period. Organic sales growth for the quarter was nine percent.

"Based on our robust backlog, the strength of our markets and our ability to execute, we are confident that we will continue to generate significant revenue growth and enhanced operating earnings and profitability for the balance of the fiscal year," Mr. Ill continued. "Our first quarter results delivered on our commitment to improve the operating margin of our Aftermarket Services Group. In addition, our Aerospace Systems Group also delivered a meaningful improvement in its margins. As a result, we expect that earnings per share from continuing operations for the fiscal year will be in the range of $3.85 to $4.00."

As previously announced, Triumph Group will hold a conference call tomorrow at 8:30 a.m. (ET) to discuss the fiscal year 2008 first quarter results. The conference call will be available live and archived on the company's website at http://www.triumphgroup.com. A slide presentation will be included with the audio portion of the webcast. An audio replay will be available from July 26th until August 2nd by calling (888) 266-2081 (Domestic) or (703) 925-2533 (International), passcode #1113153.

Triumph Group, Inc., headquartered in Wayne, Pennsylvania, designs, engineers, manufactures, repairs and overhauls aircraft components and accessories. The company serves a broad, worldwide spectrum of the aviation industry, including original equipment manufacturers of commercial, regional, business and military aircraft and aircraft components, as well as commercial and regional airlines and air cargo carriers.

More information about Triumph can be found on the Internet at http://www.triumphgroup.com.

Statements in this release which are not historical facts are forward-looking statements under the provisions of the Private Securities Litigation Reform Act of 1995, including expectations of future aerospace market conditions, financial and operational performance, revenue and earnings growth and sales and earnings results for fiscal 2008. All forward-looking statements involve risks and uncertainties which could affect the company's actual results and could cause its actual results to differ materially from those expressed in any forward looking statements made by, or on behalf of, the company. Further information regarding the important factors that could cause actual results to differ from projected results can be found in Triumph's reports filed with the SEC, including our Annual Report on Form 10-K for the year ended March 31, 2007.

                     FINANCIAL DATA (UNAUDITED)

                TRIUMPH GROUP, INC. AND SUBSIDIARIES
                (in thousands, except per share data)

                                                  Three Months Ended
                                                       June 30,
                                                 --------------------

CONDENSED STATEMENTS OF INCOME                     2007       2006
                                                 ---------  ---------

Net Sales                                        $275,004   $217,996

Operating Income                                   30,254     19,218

Interest Expense and Other                          3,207      3,058
Income Tax Expense                                  9,236      5,694
                                                 ---------  ---------

Income from Continuing Operations                  17,811     10,466
Loss from Discontinued Operations, net of tax      (3,894)    (1,033)
                                                 ---------  ---------

Net Income                                       $ 13,917   $  9,433
                                                 =========  =========

Earnings Per Share - Basic:

Income from Continuing Operations                $   1.08   $   0.65
Loss from Discontinued Operations                  ($0.24)    ($0.06)
                                                 ---------  ---------
Net Income                                       $   0.85 * $   0.59
                                                 =========  =========

Weighted average common shares outstanding -
 Basic                                             16,458     16,078
                                                 =========  =========

Earnings Per Share - Diluted:

Income from Continuing Operations                $   1.04   $   0.64
Loss from Discontinued Operations                  ($0.23)    ($0.06)
                                                 ---------  ---------
Net Income                                       $   0.81   $   0.58
                                                 =========  =========

Weighted average common shares outstanding -
 Diluted                                           17,204     16,286
                                                 =========  =========

Dividends declared and paid per common share     $   0.04   $   0.00
                                                 =========  =========

* Difference due to rounding.
                      FINANCIAL DATA (UNAUDITED)

                 TRIUMPH GROUP, INC. AND SUBSIDIARIES
            (dollars in thousands, except per share data)

BALANCE SHEET
                                                 June 30,   March 31,
                                                   2007       2007
                                                ---------- -----------
                    Assets
Cash                                            $    6,039 $    7,243
Accounts Receivable, net                           173,920    168,372
Inventory                                          317,885    296,080
Deferred Income Taxes                               11,456     11,530
Assets Held for Sale                                27,173     28,429
Prepaid Expenses and Other                           5,901      6,713
                                                ---------- -----------
    Current Assets                                 542,374    518,367

Property and Equipment, net                        285,597    283,681
Goodwill                                           339,013    339,930
Intangible Assets, net                              67,420     69,919
Other                                               15,121     17,261
                                                ---------- -----------

Total Assets                                    $1,249,525 $1,229,158
                                                ========== ===========


      Liabilities & Stockholders' Equity
Accounts Payable                                $   95,357 $  101,332
Accrued Expenses                                    59,494     75,582
Liabilities Related to Assets Held for Sale          7,684      7,331
Income Taxes Payable                                 5,776      1,484
Current Portion of Long-Term Debt                    5,703      5,702
                                                ---------- -----------
    Current Liabilities                            174,014    191,431

Long-Term Debt, less current portion               328,080    310,481
Deferred Income Taxes and Other                    102,508     99,883

Stockholders' Equity:
    Common Stock, $.001 par value, 50,000,000
     shares authorized, 16,641,941 and
     16,469,617 shares issued                           16         16
    Capital in excess of par value                 282,629    278,177
    Accumulated other comprehensive income
     (loss)                                             28       (120)
    Retained earnings                              362,250    349,290
                                                ---------- -----------
      Total Stockholders' Equity                   644,923    627,363
                                                ---------- -----------

Total Liabilities and Stockholders' Equity      $1,249,525 $1,229,158
                                                ========== ===========
                      FINANCIAL DATA (UNAUDITED)

                 TRIUMPH GROUP, INC. AND SUBSIDIARIES
                        (dollars in thousands)

SEGMENT DATA                                       Three Months Ended
                                                        June 30,
                                                   -------------------

                                                     2007      2006
                                                   --------- ---------

Net Sales:
  Aerospace Systems                                $217,280  $172,573
  Aftermarket Services                               58,313    46,447
  Elimination of inter-segment sales                   (589)   (1,024)
                                                   --------- ---------
                                                   $275,004  $217,996
                                                   ========= =========

Operating Income (Loss):
  Aerospace Systems                                $ 30,329  $ 20,341
  Aftermarket Services                                5,728     2,989
  Corporate                                          (5,803)   (4,112)
                                                   --------- ---------
                                                   $ 30,254  $ 19,218
                                                   ========= =========

Depreciation and Amortization:
  Aerospace Systems                                $  7,258  $  6,351
  Aftermarket Services                                3,202     2,027
  Corporate                                              63        44
                                                   --------- ---------
                                                   $ 10,523  $  8,422
                                                   ========= =========


Capital Expenditures:
  Aerospace Systems                                $  7,126  $  6,707
  Aftermarket Services                                2,297     6,085
  Corporate                                             411       125
                                                   --------- ---------
                                                   $  9,834  $ 12,917
                                                   ========= =========
                      FINANCIAL DATA (UNAUDITED)

                 TRIUMPH GROUP, INC. AND SUBSIDIARIES
                        (dollars in thousands)

Non-GAAP Financial Measure Disclosures

Earnings before Interest, Taxes, Depreciation and Amortization
 ("EBITDA") for the three months ended June 30, 2007 was $40.8 million
 with a margin of 14.8%. EBITDA for the three months ended June 30,
 2006 was $27.6 million with a margin of 12.7%.

Management believes that EBITDA provides the reader a good measure of
 cash generated from the operations of the business before any
 investment in working capital or fixed assets.

The following definition is provided for the non-GAAP financial
 measure identified above, together with a reconciliation of such non-
 GAAP financial measure to the most directly comparable financial
 measure calculated and presented in accordance with GAAP.

                                                   Three Months Ended
                                                        June 30,
                                                   -------------------
                                                     2007      2006
                                                   --------- ---------
Earnings before Interest, Taxes, Depreciation and
 Amortization (EBITDA):

  Income from Continuing Operations                $ 17,811  $ 10,466

  Add-back:
    Income Tax Expense                                9,236     5,694
    Interest Expense and Other                        3,207     3,058
    Depreciation and Amortization                    10,523     8,422
                                                   --------- ---------

  Earnings before Interest, Taxes, Depreciation
   and Amortization ("EBITDA")                     $ 40,777  $ 27,640

  Net Sales                                        $275,004  $217,996
                                                   --------- ---------

  EBITDA Margin                                        14.8%     12.7%
                                                   ========= =========
                      FINANCIAL DATA (UNAUDITED)

                 TRIUMPH GROUP, INC. AND SUBSIDIARIES
                        (dollars in thousands)

Non-GAAP Financial Measure Disclosures (continued)

Earnings before
 Interest, Taxes,
 Depreciation and
 Amortization (EBITDA):        Three Months Ended June 30, 2007
                         ---------------------------------------------
                                              Segment Data
                                   -----------------------------------
                                   Aerospace Aftermarket Corporate /
                           Total    Systems    Services   Eliminations
                         --------- -----------------------------------

  Income from Continuing
   Operations            $ 17,811

  Add-back:
    Income Tax Expense      9,236
    Interest Expense and
     Other                  3,207
                         ---------

  Operating Income
   (Expense)             $ 30,254  $ 30,329     $ 5,728       ($5,803)

  Depreciation and
   Amortization            10,523     7,258       3,202            63
                         --------- --------- ----------- -------------


Earnings (Losses) before
 Interest, Taxes,
 Depreciation and
 Amortization ("EBITDA") $ 40,777  $ 37,587     $ 8,930       ($5,740)
                         ========= ========= =========== =============

  Net Sales              $275,004  $217,280     $58,313         ($589)
                         ========= ========= =========== =============

  EBITDA Margin              14.8%     17.3%       15.3%          n/a
                         ========= ========= =========== =============
                      FINANCIAL DATA (UNAUDITED)

                 TRIUMPH GROUP, INC. AND SUBSIDIARIES
                        (dollars in thousands)

Non-GAAP Financial Measure Disclosures (continued)

We use "Net Debt to Capital" as a measure of financial leverage. The
 following table sets forth the computation of Net Debt to Capital:

                                                   June 30,  March 31,
                                                     2007      2007
                                                   --------- ---------

  Calculation of Net Debt
--------------------------------------------------
  Current Portion                                  $  5,703  $  5,702
  Long-term debt                                    328,080   310,481
                                                   --------- ---------
  Total Debt                                        333,783   316,183
  Less: Cash                                          6,039     7,243
                                                   --------- ---------
  Net Debt                                         $327,744  $308,940
                                                   ========= =========

  Calculation of Capital
--------------------------------------------------
  Net Debt                                         $327,744  $308,940
  Stockholders' equity                              644,923   627,363
                                                   --------- ---------
  Total Capital                                    $972,667  $936,303
                                                   ========= =========

  Percent of Net Debt to Capital                       33.7%     33.0%

CONTACT: Triumph Group, Inc.
Sheila Spagnolo, Vice President
610-251-1000
sspagnolo@triumphgroup.com

SOURCE: Triumph Group, Inc.

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