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Triumph Group Reports Second Quarter Fiscal 2006 Results

WAYNE, Pa.--(BUSINESS WIRE)--Oct. 28, 2005--Triumph Group, Inc. (NYSE:TGI):

  • Net sales for second quarter fiscal 2006 increased 8% to $183.6 million

  • Operating income in the second quarter fiscal 2006 increased 34% to $13.2 million

  • Income from continuing operations for the second quarter fiscal 2006 increased 44% to $7.0 million

  • Backlog increased 35% over prior year to $756.8 million

Triumph Group, Inc. (NYSE:TGI) today reported that net sales from continuing operations for the second quarter of the fiscal year ending March 31, 2006 totaled $183.6 million, an eight percent increase from last year's second quarter net sales from continuing operations of $170.0 million. Income from continuing operations for the second quarter of fiscal 2006 increased forty-four percent to $7.0 million, or $0.44 per diluted common share, versus $4.9 million, or $0.31 per diluted common share for the second quarter of the prior year. During the quarter, the company generated $6.0 million of cash flow from operations.

Net sales from continuing operations for the first six months of fiscal 2006 were $361.3 million, an eight percent increase over net sales of $335.3 million last year. Income from continuing operations for the first six months of fiscal 2006 increased 103 percent to $14.2 million, or $0.89 per diluted common share, compared to income from continuing operations of $7.0 million, or $0.44 per diluted common share in the prior year period. During the six months, the company generated $7.1 million of cash flow from operations.

The Aerospace Systems segment reported net sales for the quarter of $140.4 million, compared to $122.1 million in the prior year period, an increase of fifteen percent. Operating income for the second quarter of fiscal 2006 was $17.2 million, compared to $14.6 million for the prior year period, an eighteen percent increase. The Aerospace Systems segment increased sales and operating income on both a year-over-year and a sequential quarterly basis, despite lost production due to the work stoppage at Boeing Commercial Aircraft division.

The Aftermarket Services segment reported net sales for the quarter of $44.0 million, compared to $42.4 million in the prior year period, a four percent increase. Operating income for the second quarter of fiscal 2006 was a loss of $1.2 million, compared to earnings of $2.3 million for the prior year period. Core growth in repair and overhaul service companies was offset by losses related to the Northwest Airlines and Delta Air Lines bankruptcies and by costs incurred in developing products associated with new aerospace programs in the castings and manufacturing operations of the Aftermarket Services segment.

Richard C. Ill, Triumph's President and Chief Executive Officer, said, "We are pleased to report increased sales, operating income, and net earnings for the second quarter and the first half of fiscal 2006 in spite of the material impact that the work stoppage at Boeing Commercial Aircraft division had on earnings for the quarter. Sales and earnings increased on a year-over-year basis and significant cash flow was generated from operating activities, reflecting the quality of our earnings growth. Moreover, the recovery of our aerospace business is apparent from the significant increase in our backlog, which reflects ramped-up commercial aerospace build schedules as well as initial production orders for the A380."

Commenting on the outlook for the year, Mr. Ill stated, "Based upon continued strength from operations and current market conditions, we expect that fiscal 2006 earnings per share will be in the range of $1.75 to $2.00."

As previously announced, Triumph will hold a conference call today at 8:00 a.m. (EDT) to discuss the fiscal 2006 second quarter results. The conference call will be available live and archived on the company's website at http://www.triumphgroup.com. An audio replay will be available from October 28th until November 4th by calling (888) 266-2081 (Domestic) or (703) 925-2533 (International), passcode #791424.

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 commercial and regional airlines, air cargo carriers, as well as original equipment manufacturers of commercial, regional, business and military aircraft and aircraft components.

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 statements concerning the company's earnings expectations for the fiscal year. 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, 2005.


                     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   2005      2004      2005      2004
                               --------- --------- --------- ---------


Net Sales                      $183,633  $169,980  $361,330  $335,333

Operating Income                 13,218     9,880    26,947    16,327

Interest Expense and Other        3,172     3,210     6,359     6,467
Income Tax Expense                3,002     1,775     6,375     2,860
                               --------- --------- --------- ---------

Income from Continuing
 Operations                       7,044     4,895    14,213     7,000
Income from Discontinued
 Operations                           0       777         0     1,531
                               --------- --------- --------- ---------

Net Income                       $7,044    $5,672   $14,213    $8,531
                               ========= ========= ========= =========

Earnings Per Share - Basic:

Income from Continuing
 Operations                       $0.44     $0.31     $0.89     $0.44
Income from Discontinued
 Operations                       $0.00     $0.05     $0.00     $0.10
                               --------- --------- --------- ---------
Net Income                        $0.44     $0.36     $0.89     $0.54
                               ========= ========= ========= =========

Weighted average common shares
 outstanding - Basic             15,910    15,868    15,908    15,864
                               ========= ========= ========= =========

Earnings Per Share - Diluted:

Income from Continuing
 Operations                       $0.44     $0.31     $0.89     $0.44
Income from Discontinued
 Operations                       $0.00     $0.05     $0.00     $0.10
                               --------- --------- --------- ---------
Net Income                        $0.44     $0.36     $0.89     $0.54
                               ========= ========= ========= =========

Weighted average common shares
 outstanding - Diluted           16,056    15,942    16,031    15,939
                               ========= ========= ========= =========


                      FINANCIAL DATA (UNAUDITED)

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

BALANCE SHEET
                                               September 30, March 31,
                                                   2005        2005
                                               ------------- ---------
                    Assets
  Cash                                               $5,335    $4,844
  Accounts Receivable, net                          124,470   127,942
  Inventory                                         229,200   217,234
  Deferred Income Taxes                               5,422     5,422
  Prepaid Expenses and Other                          5,028     3,887
                                               ------------- ---------
    Current Assets                                  369,455   359,329

  Property and Equipment, net                       232,076   234,123
  Goodwill                                          273,580   273,476
  Intangible Assets, net                             52,609    56,227
  Other                                              14,764    14,560
                                               ------------- ---------

  Total Assets                                     $942,484  $937,715
                                               ============= =========

      Liabilities & Stockholders' Equity

  Accounts Payable                                  $57,419   $65,211
  Accrued Expenses                                   64,579    75,598
  Income Taxes Payable                                1,330     2,922
  Current Portion of Long-Term Debt                   1,662     1,740
                                               ------------- ---------
    Current Liabilities                             124,990   145,471

  Long-Term Debt, less current portion              170,500   156,042
  Deferred Income Taxes and Other                   106,542   109,539

  Stockholders' Equity:
    Common Stock, $.001 par value, 50,000,000
     shares authorized, 16,027,324 shares
     issued                                              16        16
  Capital in excess of par value                    259,676   259,448
  Treasury Stock, at cost, 117,010 and 123,160
   shares                                            (2,905)   (3,057)
  Accumulated other comprehensive (loss)
   income                                              (498)      306
  Retained earnings                                 284,163   269,950
                                               ------------- ---------
    Total Stockholders' Equity                      540,452   526,663
                                               ------------- ---------

  Total Liabilities and Stockholders' Equity       $942,484  $937,715
                                               ============= =========


                      FINANCIAL DATA (UNAUDITED)

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

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

                                 2005      2004      2005      2004
                               --------- --------- --------- ---------

Net Sales:
  Aerospace Systems            $140,378  $122,090  $274,524  $241,506
  Aftermarket Services           44,039    42,421    88,199    82,162
  Other                               0     7,467         0    15,197
  Elimination of inter-segment
   sales                           (784)   (1,998)   (1,393)   (3,532)
                               --------- --------- --------- ---------
                               $183,633  $169,980  $361,330  $335,333
                               ========= ========= ========= =========

Operating Income (Loss):
  Aerospace Systems             $17,226   $14,600   $33,442   $25,909
  Aftermarket Services           (1,229)    2,295       127     3,561
  Other                               0    (3,780)        0    (6,933)
  Corporate                      (2,779)   (3,235)   (6,622)   (6,210)
                               --------- --------- --------- ---------
                                $13,218    $9,880   $26,947   $16,327
                               ========= ========= ========= =========

Depreciation and Amortization:
  Aerospace Systems              $5,489    $4,640   $11,014    $9,337
  Aftermarket Services            2,461     2,092     4,835     4,163
  Other                               0       745         0     1,505
  Corporate                          32        32        64        75
                               --------- --------- --------- ---------
                                 $7,982    $7,509   $15,913   $15,080
                               ========= ========= ========= =========


Capital Expenditures:
  Aerospace Systems              $3,237    $5,814    $5,154    $7,874
  Aftermarket Services            2,221     1,015     5,286     1,896
  Other                               0        17         0        24
  Corporate                          19         8        33        34
                               --------- --------- --------- ---------
                                 $5,477    $6,854   $10,473    $9,828
                               ========= ========= ========= =========

                     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, 2005 was $21.2
million with a margin of 11.5%. EBITDA for the three months ended
September 30, 2004 was $17.4 million with a margin of 10.2%. EBITDA
for the six months ended September 30, 2005 was $42.9 million with a
margin of 11.9%. EBITDA for the six months ended September 30, 2004
was $31.4 million with a margin of 9.4%.

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,
                               ------------------- -------------------
                                 2005      2004      2005      2004
                               --------- --------- --------- ---------
Earnings before Interest,
 Taxes, Depreciation and
 Amortization (EBITDA):

  Income from Continuing
   Operations                    $7,044    $4,895   $14,213    $7,000

  Add-back:
    Income Tax Expense            3,002     1,775     6,375     2,860
    Interest Expense and Other    3,172     3,210     6,359     6,467
    Depreciation and
     Amortization                 7,982     7,509    15,913    15,080
                               --------- --------- --------- ---------

  Earnings before Interest,
   Taxes, Depreciation and
   Amortization ("EBITDA")      $21,200   $17,389   $42,860   $31,407
                               --------- --------- --------- ---------

  Net Sales                    $183,633  $169,980  $361,330  $335,333
                               --------- --------- --------- ---------

  EBITDA Margin                    11.5%     10.2%     11.9%      9.4%
                               ========= ========= ========= =========


                     FINANCIAL DATA  (UNAUDITED)

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

Non-GAAP Financial
 Measure Disclosures
 (continued)

                             Three Months Ended September 30, 2005
                         ---------------------------------------------
Earnings before
 Interest, Taxes,
 Depreciation and
 Amortization (EBITDA):
                           Total              Segment Data
                         --------- -----------------------------------

  Income from Continuing
   Operations              $7,044

  Add-back:
    Income Tax Expense      3,002
    Interest Expense and           Aerospace Aftermarket  Corporate /
     Other                  3,172   Systems   Services   Eliminations
                         --------- --------- ----------- -------------

  Operating Income
   (Expense)              $13,218   $17,226     ($1,229)      ($2,779)

    Depreciation and
     Amortization           7,982     5,489       2,461            32
                         --------- --------- ----------- -------------

  Earnings (Losses)
   before Interest,
   Taxes, Depreciation
   and Amortization
   ("EBITDA")             $21,200   $22,715      $1,232       ($2,747)
                         ========= ========= =========== =============

  Net Sales              $183,633  $140,378     $44,039         ($784)
                         ========= ========= =========== =============

  EBITDA Margin              11.5%     16.2%        2.8%      n/a
                         ========= ========= =========== =============


                              Six Months Ended September 30, 2005
                         ---------------------------------------------
Earnings before
 Interest, Taxes,
 Depreciation and
 Amortization (EBITDA):
                           Total              Segment Data
                         --------- -----------------------------------

  Income from Continuing
   Operations             $14,213

  Add-back:
    Income Tax Expense      6,375
    Interest Expense and           Aerospace Aftermarket  Corporate /
     Other                  6,359   Systems   Services   Eliminations
                         --------- --------- ----------- -------------

  Operating Income
   (Expense)              $26,947   $33,442        $127       ($6,622)

    Depreciation and
     Amortization          15,913    11,014       4,835            64
                         --------- --------- ----------- -------------

  Earnings (Losses)
   before Interest,
   Taxes, Depreciation
   and Amortization
   ("EBITDA")             $42,860   $44,456      $4,962       ($6,558)
                         ========= ========= =========== =============

  Net Sales              $361,330  $274,524     $88,199       ($1,393)
                         ========= ========= =========== =============

  EBITDA Margin              11.9%     16.2%        5.6%      n/a
                         ========= ========= =========== =============


                     FINANCIAL DATA  (UNAUDITED)

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

Non-GAAP Financial Measure Disclosures (continued)


Net Debt to Capital:                                Sep-05    Mar-05
                                                   --------- ---------

  Calculation of Net Debt
  -----------------------
  Current Portion                                    $1,662    $1,740
  Long term debt                                    170,500   156,042
                                                   --------- ---------
  Total Debt                                        172,162   157,782
  Less: Cash and cash equivalents                     5,335     4,844
                                                   --------- ---------
  Net Debt                                          166,827   152,938

  Calculation of Capital
  ----------------------
  Net Debt                                          166,827   152,938
  Stockholders' equity                              540,452   526,663
                                                   --------- ---------
  Total Capital                                    $707,279  $679,601
                                                   ========= =========

  Percent of net debt to capital                       23.6%     22.5%

CONTACT: Triumph Group, Inc.
John Bartholdson, 610-251-1000

SOURCE: Triumph Group, Inc.

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