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Triumph Group Reports First Quarter Fiscal 2007 Results

WAYNE, Pa.--(BUSINESS WIRE)--July 26, 2006--Triumph Group, Inc. (NYSE:TGI):

  • Net sales for the first quarter fiscal 2007 increased 25% to $222.8 million
  • Operating income for the first quarter fiscal 2007 increased 33% to $18.3 million
  • Net income for the first quarter fiscal 2007 increased 32% to $9.4 million
  • Backlog increased 38% over prior year to $942.7 million

Triumph Group, Inc. (NYSE:TGI) today reported that net sales for the first quarter of the fiscal year ending March 31, 2007 totaled $222.8 million, a twenty-five percent increase from last year's first quarter net sales of $177.7 million. Net income for the first quarter of fiscal year 2007 increased thirty-two percent to $9.4 million, or $0.58 per diluted common share, versus $7.2 million, or $0.45 per diluted common share for the first quarter of the prior year. During the quarter, the company generated $1.1 million of cash flow from operations. Results for the first quarter of fiscal year 2007 also reflected a $0.02 per share charge related to stock compensation expense including the impact of adopting Statement of Financial Accounting Standards (SFAS) No. 123R as of April 1, 2006.

Prior year period segment results have been restated to classify certain revenue and costs from the Aftermarket Services segment to the Aerospace Systems segment for the operations of Triumph Fabrications-Phoenix and Triumph Fabrications-Fort Worth due to the fact that most of their product line has been transitioned to aerospace OEM products. The restatement shifted approximately $4.4 million in revenue and $0.8 million in operating loss, previously reported in the Aftermarket Services segment, to the Aerospace Systems segment's results for the first quarter ended June 30, 2006.

The Aerospace Systems segment reported net sales for the quarter of $174.2 million compared to $138.6 million in the prior year period, as restated, an increase of twenty-six percent. Operating income for the first quarter of fiscal year 2007 was $20.3 million, compared to $15.4 million for the prior year period, as restated, a thirty-two percent increase. Excluding the recently announced acquisition of Triumph Structures-Wichita (formerly, Excel Manufacturing, Inc.), organic sales growth for the quarter was nineteen percent.

The Aftermarket Services segment reported net sales for the quarter of $49.5 million, compared to $39.8 million in the prior year period, as restated, a twenty-four percent increase. Operating income for the first quarter of fiscal year 2007 was $2.1 million, compared to $2.2 million for the prior year period, as restated. Excluding the recently announced acquisition of Triumph Interiors (formerly Air Excellence International, Inc.), organic sales growth for the quarter was eighteen percent. Operating results for the quarter reflected $0.6 million of start up costs associated with the new Thailand maintenance and repair facility which was not included in the prior year period.

Richard C. Ill, Triumph's President and Chief Executive Officer, said, "We are very pleased with the first quarter results and with the strong operational and financial performance across our businesses. As we expected, our recent acquisitions are making a positive contribution, but the fundamental driver behind our strong performance was organic revenue growth combined with enhanced operating leverage. Based on the strength of our markets and our robust backlog, we are optimistic that we will continue to generate sales growth and improved profitability for the balance of the year."

Commenting on the outlook for the year, Mr. Ill stated, "Based upon the performance in sales and earnings for the first quarter, we now expect that fiscal year 2007 sales will be toward the upper end of the previously announced range of $875 million to $925 million and earnings per share for the fiscal year to be toward the upper end of the previously announced range of $2.40 to $2.70."

As previously announced, Triumph Group will hold a conference call on July 27th at 7:30 a.m. (EDT) to discuss the fiscal year 2007 first 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 July 27th until August 3rd by calling (888) 266-2081 (Domestic) or (703) 925-2533 (International), passcode #935724.

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 performance, profitability, growth and earnings. 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, 2006.



                     FINANCIAL DATA  (UNAUDITED)

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

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

CONDENSED STATEMENTS OF INCOME                       2006      2005
                                                   --------- ---------


Net Sales                                          $222,822  $177,697

Operating Income                                     18,303    13,729

Interest Expense and Other                            3,732     3,187
Income Tax Expense                                    5,138     3,373
                                                   --------- ---------

Net Income                                           $9,433    $7,169
                                                   ========= =========

Earnings Per Share - Basic:

Net Income                                            $0.59     $0.45
                                                   ========= =========

Weighted average common shares outstanding - Basic   16,078    15,906
                                                   ========= =========

Earnings Per Share - Diluted:

Net Income                                            $0.58     $0.45
                                                   ========= =========

Weighted average common shares outstanding -
 Diluted                                             16,286    16,006
                                                   ========= =========


                      FINANCIAL DATA (UNAUDITED)

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

BALANCE SHEET
                                                June 30,    March 31,
                                                  2006        2006
                                               ----------- -----------
                    Assets
Cash                                               $5,435      $5,698
Accounts Receivable, net                          150,769     147,780
Inventory                                         258,104     235,878
Deferred Income Taxes                               6,868       6,868
Prepaid Expenses and Other                          4,708       4,894
                                               ----------- -----------
  Current Assets                                  425,884     401,118

Property and Equipment, net                       256,253     237,325
Goodwill                                          298,136     272,737
Intangible Assets, net                             50,922      49,424
Other                                              14,089      14,179
                                               ----------- -----------

Total Assets                                   $1,045,284    $974,783
                                               =========== ===========

      Liabilities & Stockholders' Equity

Accounts Payable                                  $78,825     $73,995
Accrued Expenses                                   63,313      68,488
Income Taxes Payable                                6,906       5,195
Current Portion of Long-Term Debt                   8,078       8,078
                                               ----------- -----------
  Current Liabilities                             157,122     155,756

Long-Term Debt, less current portion              208,335     153,339
Deferred Income Taxes and Other                   100,781     101,985

Stockholders' Equity:
  Common Stock, $.001 par value, 50,000,000
   shares authorized, 16,143,713 and
   16,027,324 shares issued                            16          16
  Capital in excess of par value                  265,005     260,124
  Treasury Stock, at cost, 0 and 18,311 shares          0        (455)
  Accumulated other comprehensive income
   (loss)                                             412        (162)
  Retained earnings                               313,613     304,180
                                               ----------- -----------
    Total Stockholders' Equity                    579,046     563,703
                                               ----------- -----------

Total Liabilities and Stockholders' Equity     $1,045,284    $974,783
                                               =========== ===========


                      FINANCIAL DATA (UNAUDITED)

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

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

                                                     2006      2005
                                                   --------- ---------

Net Sales:
  Aerospace Systems                                $174,193  $138,576
  Aftermarket Services                               49,467    39,810
  Elimination of inter-segment sales                   (838)     (689)
                                                   --------- ---------
                                                   $222,822  $177,697
                                                   ========= =========

Operating Income (Loss):
  Aerospace Systems                                 $20,298   $15,400
  Aftermarket Services                                2,117     2,172
  Corporate                                          (4,112)   (3,843)
                                                   --------- ---------
                                                    $18,303   $13,729
                                                   ========= =========

Depreciation and Amortization:
  Aerospace Systems                                  $6,403    $5,899
  Aftermarket Services                                2,303     2,000
  Corporate                                              44        32
                                                   --------- ---------
                                                     $8,750    $7,931
                                                   ========= =========


Capital Expenditures:
  Aerospace Systems                                  $6,734    $2,400
  Aftermarket Services                                6,272     2,582
  Corporate                                             125        14
                                                   --------- ---------
                                                    $13,131    $4,996
                                                   ========= =========


                     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, 2006 was $27.1 million
with a margin of 12.1%. EBITDA for the three months ended June 30,
2005 was $21.7 million with a margin of 12.2%.

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,
                                                   -------------------
                                                     2006      2005
                                                   --------- ---------
Earnings before Interest, Taxes, Depreciation and
 Amortization (EBITDA):

  Income from Continuing Operations                  $9,433    $7,169

  Add-back:
    Income Tax Expense                                5,138     3,373
    Interest Expense and Other                        3,732     3,187
    Depreciation and Amortization                     8,750     7,931
                                                   --------- ---------

  Earnings before Interest, Taxes, Depreciation
   and Amortization ("EBITDA")                      $27,053   $21,660
                                                   --------- ---------

  Net Sales                                        $222,822  $177,697
                                                   --------- ---------

  EBITDA Margin                                        12.1%     12.2%
                                                   ========= =========


                     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, 2006
                         ---------------------------------------------
                                              Segment Data
                                   -----------------------------------
                                   Aerospace Aftermarket  Corporate /
                           Total    Systems   Services   Eliminations
                         --------- --------- ----------- -------------

    Income from
     Continuing
     Operations            $9,433

    Add-back:
      Income Tax Expense    5,138
      Interest Expense
       and Other            3,732
                         ---------

    Operating Income
     (Expense)            $18,303   $20,298      $2,117       ($4,112)

      Depreciation and
       Amortization         8,750     6,403       2,303            44
                         --------- --------- ----------- -------------

    Earnings (Losses)
     before Interest,
     Taxes, Depreciation
     and Amortization
     ("EBITDA")           $27,053   $26,701      $4,420       ($4,068)

    Net Sales            $222,822  $174,193     $49,467         ($838)
                         ========= ========= =========== =============

    EBITDA Margin            12.1%     15.3%        8.9%          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,
                                                     2006      2006
                                                   --------- ---------

  Calculation of Net Debt
  -----------------------
  Current Portion                                    $8,078    $8,078
  Long-term debt                                    208,335   153,339
                                                   --------- ---------
  Total Debt                                        216,413   161,417
  Less: Cash and cash equivalents                     5,435     5,698
                                                   --------- ---------
  Net Debt                                         $210,978  $155,719
                                                   ========= =========

  Calculation of Capital
  ----------------------
  Net Debt                                         $210,978  $155,719
  Stockholders' equity                              579,046   563,703
                                                   --------- ---------
  Total Capital                                    $790,024  $719,422
                                                   ========= =========

  Percent of Net Debt to Capital                       26.7%     21.6%

CONTACT: Triumph Group, Inc.
John Bartholdson, 610-251-1000
jbartholdson@triumphgroup.com

SOURCE: Triumph Group, Inc.

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