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

Triumph Group, Inc. (NYSE:TGI) today reported that net sales for the first quarter of fiscal year ending March 31, 2009 totaled $320.6 million, a seventeen percent increase from last year’s first quarter net sales of $275.0 million. Income from continuing operations for the first quarter of fiscal year 2009 increased forty-six percent to $26.0 million, or $1.54 per diluted share, versus $17.8 million, or $1.04 per diluted share, for the first quarter of the prior fiscal year. Net income for the first quarter of fiscal year 2009 increased seventy-eight percent to $24.8 million, or $1.47 per diluted share, versus $13.9 million, or $0.81 per diluted share, for the first quarter of the prior fiscal year. The number of shares used in computing diluted earnings per share for the first quarter of fiscal year 2009 was 16.9 million shares. During the quarter, the company generated $14.9 million of cash flow from operations. The Aerospace Systems segment reported net sales for the quarter of $258.2 million compared to $217.3 million in the prior year period, an increase of nineteen percent. Operating income for the first quarter of fiscal year 2009 was $46.1 million, compared to $30.3 million for the prior year period, a fifty-two percent increase. Operating margin improved twenty-eight percent from the prior year’s first quarter to eighteen percent. Organic sales growth for the quarter was thirteen percent. Operating income for the quarter included $1.5 million of legal expenses associated with the ongoing trade secret litigation. The Aftermarket Services segment reported net sales for the quarter of $63.0 million compared to $58.3 million in the prior year, an eight percent increase, all of which was organic. Operating income for the first quarter of fiscal year 2009 was $3.9 million, compared to $5.7 million for the prior year period, a thirty-two percent decrease. Operating results for the quarter included a charge for $1.3 million for the early termination of a maintenance contract. In addition, margins were negatively impacted by an adjustment to the revenue recognized on a power by the hour contract. Richard C. Ill, Triumph’s President and Chief Executive Officer, said, "We are very proud of the results achieved during the first quarter, particularly the margin improvement in our Aerospace Systems Group. Even in these times of economic uncertainty, we delivered continued growth in revenue, operating income and earnings. Our robust backlog should allow us to more than offset the anticipated reductions in airline capacity.” In commenting on the outlook for the fiscal year 2009, Mr. Ill said, "Based on our strong first quarter performance and our confidence in our ability to generate enhanced operating earnings and profitability for the balance of the year, we now expect that earnings per share from continuing operations for the fiscal year will be in excess of $5.25 per diluted share, which would be a twenty-two percent increase over the prior year, computed on 18.0 million shares. We reaffirm that sales will be in the range of $1.25 to $1.35 billion.” As previously announced, Triumph Group will hold a conference call tomorrow at 8:30 a.m. (ET) to discuss the fiscal year 2009 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 25th until August 1st by calling (888) 266-2081 (Domestic) or (703) 925-2533 (International), passcode #1261661. 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, 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 year ended March 31, 2008.   FINANCIAL DATA (UNAUDITED)   TRIUMPH GROUP, INC. AND SUBSIDIARIES (in thousands, except per share data)       Three Months EndedJune 30,   CONDENSED STATEMENTS OF INCOME   2008     2007       Net Sales $ 320,556 $ 275,004   Operating Income 43,328 30,254   Interest Expense and Other 3,427 3,207 Income Tax Expense   13,867     9,236     Income from Continuing Operations 26,034 17,811 Loss from Discontinued Operations, net of tax   (1,203 )   (3,894 )   Net Income $ 24,831   $ 13,917     Earnings Per Share - Basic:   Income from Continuing Operations $ 1.59 $ 1.08 Loss from Discontinued Operations   ($0.07 )   ($0.24 ) Net Income $ 1.52   $ 0.85   *   Weighted average common shares outstanding - Basic   16,373     16,458     Earnings Per Share - Diluted:   Income from Continuing Operations $ 1.54 $ 1.04 Loss from Discontinued Operations   ($0.07 )   ($0.23 ) Net Income $ 1.47   $ 0.81     Weighted average common shares outstanding - Diluted   16,891     17,204     Dividends declared and paid per common share $ 0.04   $ 0.04       * Difference due to rounding.   FINANCIAL DATA (UNAUDITED)   TRIUMPH GROUP, INC. AND SUBSIDIARIES (dollars in thousands, except per share data)   BALANCE SHEET June 30,2008 March 31,2008 Assets Cash $ 13,888 $ 13,738 Accounts Receivable, net 199,384 207,975 Inventory 381,400 361,667 Deferred Income Taxes 1,044 1,450 Assets Held for Sale 25,844 24,763 Prepaid Expenses and Other   4,298     5,207   Current Assets 625,858 614,800   Property and Equipment, net 324,295 324,095 Goodwill 384,593 383,740 Intangible Assets, net 75,493 78,488 Other   15,399     13,712     Total Assets $ 1,425,638   $ 1,414,835     Liabilities & Stockholders' Equity   Accounts Payable $ 103,559 $ 120,117 Accrued Expenses 74,915 83,397 Liabilities Related to Assets Held for Sale 4,873 4,587 Income Taxes Payable 9,295 1,509 Current Portion of Long-Term Debt   1,036     1,010   Current Liabilities 193,678 210,620   Long-Term Debt, less current portion 414,988 418,803 Income Taxes Payable, non-current 1,459 1,437 Deferred Income Taxes and Other 98,261 91,246   Stockholders' Equity: Common Stock, $.001 par value, 50,000,000 shares authorized, 16,578,745 and 16,517,374 shares issued 16 16 Capital in excess of par value 288,991 288,154 Treasury Stock, at cost, 189,679 and 213,950 shares (10,641 ) (12,003 ) Accumulated other comprehensive income 4,432 2,950 Retained earnings   434,454     413,612   Total Stockholders' Equity   717,252     692,729     Total Liabilities and Stockholders' Equity $ 1,425,638   $ 1,414,835     FINANCIAL DATA (UNAUDITED)     TRIUMPH GROUP, INC. AND SUBSIDIARIES (dollars in thousands)       SEGMENT DATA Three Months Ended June 30,   2008 2007   Net Sales: Aerospace Systems $ 258,232 $ 217,280 Aftermarket Services 62,968 58,313 Elimination of inter-segment sales   (644 )   (589 ) $ 320,556   $ 275,004     Operating Income (Loss): Aerospace Systems $ 46,070 $ 30,329 Aftermarket Services 3,887 5,728 Corporate   (6,629 )   (5,803 ) $ 43,328   $ 30,254     Depreciation and Amortization: Aerospace Systems $ 8,603 $ 7,258 Aftermarket Services 3,503 3,202 Corporate   67     63   $ 12,173   $ 10,523       Capital Expenditures: Aerospace Systems $ 9,154 $ 7,126 Aftermarket Services 2,147 2,297 Corporate   62     411   $ 11,363   $ 9,834       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, 2008 was $55.5 million with a margin of 17.3%. EBITDA for the three months ended June 30, 2007 was $40.8 million with a margin of 14.8%.   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, 2008 2007 Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA):   Income from Continuing Operations $26,034 $17,811   Add-back: Income Tax Expense 13,867 9,236 Interest Expense and Other 3,427 3,207 Depreciation and Amortization 12,173 10,523   Earnings before Interest, Taxes, Depreciation and Amortization ("EBITDA") $55,501 $40,777   Net Sales $320,556 $275,004   EBITDA Margin 17.3% 14.8%   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, 2008 Segment Data Total Aerospace Systems Aftermarket Services Corporate / Eliminations   Income from Continuing Operations $26,034   Add-back: Income Tax Expense 13,867 Interest Expense and Other 3,427   Operating Income (Expense) $43,328 $46,070 $3,887 ($6,629)   Depreciation and Amortization 12,173 8,603 3,503 67   Earnings (Losses) before Interest, Taxes, Depreciation and Amortization ("EBITDA") $55,501 $54,673 $7,390 ($6,562)   Net Sales $320,556 $258,232 $62,968 ($644)   EBITDA Margin 17.3% 21.2% 11.7% 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 June 30, 2007 Segment Data Total Aerospace Systems Aftermarket Services Corporate / 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, 2008 2008   Calculation of Net Debt Current Portion $ 1,036 $ 1,010 Long-term debt   414,988     418,803   Total Debt 416,024 419,813 Less: Cash   13,888     13,738   Net Debt $ 402,136   $ 406,075     Calculation of Capital Net Debt $ 402,136 $ 406,075 Stockholders' equity   717,252     692,729   Total Capital $ 1,119,388   $ 1,098,804     Percent of Net Debt to Capital 35.9 % 37.0 %