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Triumph Group Reports Record Second Quarter Fiscal 2009 Earnings; Raises Fiscal Year 2009 Guidance

 

-- Net sales for the second quarter fiscal 2009 increased 16% to $323.4 million
-- Operating income for the second quarter fiscal 2009 increased 34% to $42.7 million, reflecting an operating margin of 13.2%
-- Earnings per share from continuing operations increased 50% to $1.57 per diluted share
-- Net income per share increased 56% to $1.50 per diluted share
-- Cash flow from operations more than doubled to $36.1 million

WAYNE, Pa.--(BUSINESS WIRE)--

Triumph Group, Inc. (NYSE:TGI) today reported that net sales for the second quarter of fiscal year ending March 31, 2009 totaled $323.4 million, a sixteen percent increase from last year's second quarter net sales of $279.8 million. Income from continuing operations for the second quarter of fiscal year 2009 increased thirty-nine percent to $26.1 million, or $1.57 per diluted share, versus $18.7 million, or $1.05 per diluted share, for the second quarter of the prior fiscal year. Net income for the second quarter of fiscal year 2009 increased forty-five percent to $25.0 million, or $1.50 per diluted share, versus $17.2 million, or $0.97 per diluted share, for the second quarter of the prior fiscal year. The number of shares used in computing diluted earnings per share for the second quarter of fiscal year 2009 was 16.6 million shares. During the quarter, the company generated $36.1 million of cash flow from operations.

Net sales for the first six months of fiscal year 2009 were $643.9 million, a sixteen percent increase over net sales of $554.8 million last fiscal year. Income from continuing operations for the first six months of fiscal year 2009 increased forty-three percent to $52.1 million, or $3.14 per diluted share. Net income for the first six months of fiscal year 2009 increased sixty percent to $49.8 million, or $3.00 per diluted share. During the six months ended September 30, 2008, the company generated $51.0 million of cash flow from operations.

The Aerospace Systems segment reported net sales for the quarter of $257.6 million compared to $220.5 million in the prior year period, an increase of seventeen percent. Operating income for the second quarter of fiscal year 2009 was $46.5 million, compared to $31.1 million for the prior year period, a forty-nine percent increase. Operating margin increased from fourteen percent in the prior year's second quarter to eighteen percent. Organic sales growth for the quarter was eleven percent. Operating income for the quarter included $0.7 million of legal expenses associated with the ongoing trade secret litigation. These results were achieved despite lost production due to the work stoppage at Boeing's Commercial Aircraft division.

The Aftermarket Services segment reported net sales for the quarter of $66.5 million, compared to $60.1 million in the prior year period, an eleven percent increase, all of which was organic. Operating income for the second quarter of fiscal year 2009 was $2.9 million, compared to $4.8 million for the prior year period, a forty percent decrease. Losses at the Phoenix APU operations more than offset substantial improvements at most of the other companies within the segment. Without these losses, operating margin would have been in excess of ten percent.

Richard C. Ill, Triumph's President and Chief Executive Officer, said, "We had another very strong quarter marked by record sales and operating income, a robust backlog and greatly improved cash generation, which allowed us to reduce borrowings under our revolving credit facility by $22.7 million in the quarter. We are proud of the continued margin improvement in our Aerospace Systems Group. While we are disappointed by the execution at our Phoenix APU business, we have already taken actions, which include a management reorganization and workforce reductions, to improve their profitability and position them for future growth."

In commenting on the outlook for the fiscal year 2009, Mr. Ill said, "Given our strong results through the first six months and assuming that the Boeing strike lasts through November, we now expect that earnings per share from continuing operations for the fiscal year will be in excess of $5.40 per diluted share, computed on 16.7 million shares."

As previously announced, Triumph Group will hold a conference call tomorrow at 8:30 a.m. (ET) to discuss the fiscal year 2009 second 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 October 24th until October 31st by calling (888) 266-2081 (Domestic) or (703) 925-2533 (International), passcode #1292023.

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 company's website 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, the duration of the Boeing work stoppage, financial and operational performance, revenue and earnings growth, future operating margins and sales and earnings results for fiscal 2009. 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 fiscal year ended March 31, 2008.


                      FINANCIAL DATA (UNAUDITED)

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

                              Three Months Ended    Six Months Ended
                                 September 30,       September 30,
                              ------------------- --------------------

CONDENSED STATEMENTS OF
 INCOME                         2008      2007      2008      2007
                              --------- --------- --------- ---------


Net Sales                     $323,391  $279,772  $643,947  $554,776

Operating Income                42,714    31,843    86,042    62,097

Interest Expense and Other       3,067     3,566     6,494     6,773
Income Tax Expense              13,578     9,575    27,445    18,811
                              --------- --------- --------- ---------

Income from Continuing
 Operations                     26,069    18,702    52,103    36,513
Loss from Discontinued
 Operations, net of tax         (1,093)   (1,472)   (2,296)   (5,366)
                              --------- --------- --------- ---------

Net Income                    $ 24,976  $ 17,230  $ 49,807  $ 31,147
                              ========= ========= ========= =========

Earnings Per Share - Basic:

Income from Continuing
 Operations                   $   1.59  $   1.13  $   3.18  $   2.21
Loss from Discontinued
 Operations                     ($0.07)   ($0.09)   ($0.14)   ($0.33)
                              --------- --------- --------- ---------
Net Income                    $   1.52  $   1.04  $   3.04  $   1.89 *
                              ========= ========= ========= =========

Weighted average common
 shares outstanding - Basic     16,386    16,524    16,379    16,491
                              ========= ========= ========= =========

Earnings Per Share - Diluted:

Income from Continuing
 Operations                   $   1.57  $   1.05  $   3.14  $   2.08
Loss from Discontinued
 Operations                     ($0.07)   ($0.08)   ($0.14)   ($0.31)
                              --------- --------- --------- ---------
Net Income                    $   1.50  $   0.97  $   3.00  $   1.78 *
                              ========= ========= ========= =========

Weighted average common
 shares outstanding - Diluted   16,607    17,827    16,619    17,539
                              ========= ========= ========= =========

Dividends declared and paid
 per common share             $   0.04  $   0.04  $   0.08  $   0.08
                              ========= ========= ========= =========


* Difference due to rounding.


                      FINANCIAL DATA (UNAUDITED)

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

BALANCE SHEET
                                             September 30,  March 31,
                                                 2008         2008
                                             ------------- -----------
                   Assets
  Cash                                       $     13,065  $   13,738
  Accounts Receivable, net                        190,807     207,975
  Inventory                                       382,117     361,667
  Deferred Income Taxes                             1,130       1,450
  Assets Held for Sale                             26,253      24,763
  Prepaid Expenses and Other                        6,651       5,207
                                             ------------- -----------
    Current Assets                                620,023     614,800

  Property and Equipment, net                     327,849     324,095
  Goodwill                                        383,939     383,740
  Intangible Assets, net                           72,480      78,488
  Other                                            15,192      13,712
                                             ------------- -----------

  Total Assets                               $  1,419,483  $1,414,835
                                             ============= ===========

     Liabilities & Stockholders' Equity

  Accounts Payable                           $     92,624  $  120,117
  Accrued Expenses                                 85,173      83,397
  Liabilities Related to Assets Held for
   Sale                                             4,389       4,587
  Income Taxes Payable                                856       1,509
  Current Portion of Long-Term Debt                 4,548       1,010
                                             ------------- -----------
    Current Liabilities                           187,590     210,620

  Long-Term Debt, less current portion            389,204     418,803
  Income Taxes Payable, non-current                 1,463       1,437
  Deferred Income Taxes and Other                 100,904      91,246

  Stockholders' Equity:
    Common Stock, $.001 par value,
     50,000,000 shares authorized,
     16,580,337 and 16,517,374 shares issued           16          16
    Capital in excess of par value                289,816     288,154
    Treasury Stock, at cost, 189,679 and
     213,950 shares                               (10,552)    (12,003)
    Accumulated other comprehensive income          2,289       2,950
    Retained earnings                             458,753     413,612
                                             ------------- -----------
      Total Stockholders' Equity                  740,322     692,729
                                             ------------- -----------

Total Liabilities and Stockholders' Equity   $  1,419,483  $1,414,835
                                             ============= ===========


                      FINANCIAL DATA (UNAUDITED)

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



SEGMENT DATA                   Three Months Ended   Six Months Ended
                                  September 30,       September 30,
                               ------------------- -------------------

                                 2008      2007      2008      2007
                               --------- --------- --------- ---------

Net Sales:
  Aerospace Systems            $257,569  $220,511  $515,801  $437,791
  Aftermarket Services           66,481    60,054   129,449   118,367
  Elimination of inter-segment
   sales                           (659)     (793)   (1,303)   (1,382)
                               --------- --------- --------- ---------
                               $323,391  $279,772  $643,947  $554,776
                               ========= ========= ========= =========

Operating Income (Loss):
  Aerospace Systems            $ 46,515  $ 31,135  $ 92,585  $ 61,464
  Aftermarket Services            2,896     4,825     6,783    10,553
  Corporate                      (6,697)   (4,117)  (13,326)   (9,920)
                               --------- --------- --------- ---------
                               $ 42,714  $ 31,843  $ 86,042  $ 62,097
                               ========= ========= ========= =========

Depreciation and Amortization:
  Aerospace Systems            $  8,787  $  7,353  $ 17,390  $ 14,611
  Aftermarket Services            3,532     3,034     7,035     6,236
  Corporate                          66        70       133       133
                               --------- --------- --------- ---------
                               $ 12,385  $ 10,457  $ 24,558  $ 20,980
                               ========= ========= ========= =========


Capital Expenditures:
  Aerospace Systems            $  8,757  $  6,531  $ 17,911  $ 13,657
  Aftermarket Services            4,335     5,034     6,482     7,331
  Corporate                         425       134       487       545
                               --------- --------- --------- ---------
                               $ 13,517  $ 11,699  $ 24,880  $ 21,533
                               ========= ========= ========= =========


                      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 September 30, 2008 was $55.1
 million with a margin of 17.0%. EBITDA for the three months ended
 September 30, 2007 was $42.3 million with a margin of 15.1%. EBITDA
 for the six months ended September 30, 2008 was $110.6 million with a
 margin of 17.2%. EBITDA for the six months ended September 30, 2007
 was $83.1 million with a margin of 15.0%.

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   Six Months Ended
                                  September 30,       September 30,
                               ------------------- -------------------
                                 2008      2007      2008      2007
                               --------- --------- --------- ---------
Earnings before Interest,
 Taxes, Depreciation and
 Amortization (EBITDA):

  Income from Continuing
   Operations                  $ 26,069  $ 18,702  $ 52,103  $ 36,513

  Add-back:
    Income Tax Expense           13,578     9,575    27,445    18,811
    Interest Expense and Other    3,067     3,566     6,494     6,773
    Depreciation and
     Amortization                12,385    10,457    24,558    20,980
                               --------- --------- --------- ---------

  Earnings before Interest,
   Taxes, Depreciation and
   Amortization ("EBITDA")     $ 55,099  $ 42,300  $110,600  $ 83,077

  Net Sales                    $323,391  $279,772  $643,947  $554,776
                               --------- --------- --------- ---------

  EBITDA Margin                    17.0%     15.1%     17.2%     15.0%
                               ========= ========= ========= =========


                      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 September 30, 2008
                         ---------------------------------------------
                                              Segment Data
                                   -----------------------------------
                                   Aerospace Aftermarket  Corporate /
                           Total    Systems   Services   Eliminations
                         --------- --------- ----------- -------------

  Income from Continuing
   Operations            $ 26,069

  Add-back:
     Income Tax Expense    13,578
     Interest Expense
      and Other             3,067
                         ---------

  Operating Income
   (Expense)             $ 42,714  $ 46,515    $  2,896       ($6,697)

     Depreciation and
      Amortization         12,385     8,787       3,532            66
                         --------- --------- ----------- -------------

  Earnings (Losses)
   before Interest,
   Taxes,
   Depreciation and
    Amortization
    ("EBITDA")           $ 55,099  $ 55,302    $  6,428       ($6,631)
                         ========= ========= =========== =============

  Net Sales              $323,391  $257,569    $ 66,481         ($659)
                         ========= ========= =========== =============

  EBITDA Margin              17.0%     21.5%        9.7%          n/a
                         ========= ========= =========== =============


Earnings before
 Interest, Taxes,
 Depreciation and
 Amortization (EBITDA):       Six Months Ended September 30, 2008
                         ---------------------------------------------
                                              Segment Data
                                   -----------------------------------
                                   Aerospace Aftermarket  Corporate /
                           Total    Systems   Services   Eliminations
                         --------- --------- ----------- -------------

  Income from Continuing
   Operations            $ 52,103

  Add-back:
     Income Tax Expense    27,445
     Interest Expense
      and Other             6,494
                         ---------

  Operating Income
   (Expense)             $ 86,042  $ 92,585    $  6,783      ($13,326)

     Depreciation and
      Amortization         24,558    17,390       7,035           133
                         --------- --------- ----------- -------------

  Earnings (Losses)
   before Interest,
   Taxes,
   Depreciation and
    Amortization
    ("EBITDA")           $110,600  $109,975    $ 13,818      ($13,193)
                         ========= ========= =========== =============

  Net Sales              $643,947  $515,801    $129,449       ($1,303)
                         ========= ========= =========== =============

  EBITDA Margin              17.2%     21.3%       10.7%          n/a
                         ========= ========= =========== =============


                      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 September 30, 2007
                         ---------------------------------------------
                                              Segment Data
                                   -----------------------------------
                                   Aerospace Aftermarket Corporate /
                           Total    Systems    Services   Eliminations
                         --------- --------- ----------- -------------

  Income from Continuing
   Operations            $ 18,702

  Add-back:
    Income Tax Expense      9,575
    Interest Expense and
     Other                  3,566
                         ---------

  Operating Income
   (Expense)             $ 31,843  $ 31,135    $  4,825       ($4,117)

    Depreciation and
     Amortization          10,457     7,353       3,034            70
                         --------- --------- ----------- -------------

  Earnings (Losses)
   before Interest,
   Taxes, Depreciation
   and Amortization
   ("EBITDA")            $ 42,300  $ 38,488    $  7,859       ($4,047)
                         ========= ========= =========== =============

  Net Sales              $279,772  $220,511    $ 60,054         ($793)
                         ========= ========= =========== =============

  EBITDA Margin              15.1%     17.5%       13.1%          n/a
                         ========= ========= =========== =============


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

  Income from Continuing
   Operations            $ 36,513

  Add-back:
    Income Tax Expense     18,811
    Interest Expense and
     Other                  6,773
                         ---------

  Operating Income
   (Expense)             $ 62,097  $ 61,464    $ 10,553       ($9,920)

    Depreciation and
     Amortization          20,980    14,611       6,236           133
                         --------- --------- ----------- -------------

  Earnings (Losses)
   before Interest,
   Taxes, Depreciation
   and Amortization
   ("EBITDA")            $ 83,077  $ 76,075    $ 16,789       ($9,787)
                         ========= ========= =========== =============

  Net Sales              $554,776  $437,791    $118,367       ($1,382)
                         ========= ========= =========== =============

  EBITDA Margin              15.0%     17.4%       14.2%          n/a
                         ========= ========= =========== =============


                      FINANCIAL DATA (UNAUDITED)

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

Non-GAAP Financial Measure Disclosures (continued)

Management believes that "Net Debt to Capital" provides the reader a
 good measure of financial leverage. The following table sets forth
 the computation of Net Debt to Capital:

                                         September 30,    March 31,
                                              2008           2008
                                         -------------- --------------

  Calculation of Net Debt
----------------------------------------
  Current Portion                        $       4,548  $       1,010
  Long-term debt                               389,204        418,803
                                         -------------- --------------
  Total Debt                                   393,752        419,813
  Less: Cash                                    13,065         13,738
                                         -------------- --------------
  Net Debt                               $     380,687  $     406,075
                                         ============== ==============

  Calculation of Capital
----------------------------------------
  Net Debt                               $     380,687  $     406,075
  Stockholders' equity                         740,322        692,729
                                         -------------- --------------
  Total Capital                          $   1,121,009  $   1,098,804
                                         ============== ==============

  Percent of Net Debt to Capital                  34.0%          37.0%

Source: Triumph Group, Inc.

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