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United States

Securities and Exchange Commission

Washington, D.C. 20549
FORM 10-Q


[x] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities

Exchange Act of 1934 For the Period Ended June 30, 1999.
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities

Exchange Act of 1934 For the Transition Period From _________ to ________
Commission File Number: 1-12235

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TRIUMPH GROUP, INC.

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(Exact name of registrant as specified in its charter)
Delaware 51-0347963

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(State or other jurisdiction of (I.R.S. Employer Identification No.)

incorporation or organization)
1255 Drummers Lane, Suite 200

Wayne, PA 19087-1565

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(Address of principal executive offices) (Zip Code)
(610) 975-0420

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(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required

to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during

the preceding 12 months (or for such shorter periods that the registrant was

required to file such reports), and (2) has been subject to such filing

requirements for the past 90 days. Yes X No

--- ---
Indicate the number of shares outstanding of each of the issuer's classes of

common stock, as of the latest practical date.
Common Stock, par value $0.001 per share, 8,382,986 shares and Class D common

stock, par value $0.001 per share, 3,348,535 shares, each as of July 30, 1999

TRIUMPH GROUP, INC.

INDEX
Part I. Financial Information


Page Number

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Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets 1

March 31, 1999 and June 30, 1999
Consolidated Statements of Income 3

Three months ended June 30, 1998 and 1999
Consolidated Statements of Cash Flows 4

Three months ended June 30, 1998 and 1999
Notes to Consolidated Financial Statements 6

June 30, 1999


Item 2. Management's Discussion and Analysis of Financial 10

Condition and Results of Operations


Item 3. Quantitative and Qualitative Disclosures About 14

Market Risk


Part II. Other Information


Item 1. Legal Proceedings 15


Item 2. Changes in Securities 15


Item 3. Defaults upon Senior Securities 15


Item 4. Submission of Matters to a Vote of Security Holders 15


Item 5. Other Information 15


Item 6. Exhibits and Reports on Form 8-K 15
Signature Page 16
Part I. Financial Information

Item: 1. Financial Statements

Triumph Group, Inc.

Consolidated Balance Sheets

(dollars in thousands, except per share data)


MARCH 31, JUNE 30,

1999 1999

---- ----

(unaudited)
ASSETS

Current assets:

Cash $ 4,953 $ 7,287

Accounts receivable, net 65,613 63,060

Inventories 104,771 114,931

Prepaid expenses and other 2,473 4,209

Deferred income taxes 2,408 2,492

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Total current assets 180,218 191,979
Property and equipment, net 107,123 122,150
Excess of cost over net assets acquired, net 124,667 131,645

Intangible assets and other, net 16,849 18,369

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Total assets $428,857 $464,143

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-1-

Triumph Group, Inc.

Consolidated Balance Sheets (continued)

(dollars in thousands, except per share data)


MARCH 31, JUNE 30,

1999 1999

---- ----

(unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable $ 33,894 $ 27,740

Accrued expenses 47,263 52,475

Income taxes payable 4,453 6,110

Current portion of long-term debt 1,151 2,443

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Total current liabilities 86,761 88,768
Long-term debt, less current portion 91,857 115,185

Deferred income taxes and other 35,462 40,015
Stockholders' equity:

Common stock, $.001 par value, 50,000,000

shares authorized, 8,551,786 shares issued 9 9

Class D common stock convertible,

$.001 par value, 6,000,000 shares authorized,

3,348,535 shares issued and outstanding 3 3

Capital in excess of par value 135,418 135,418

Treasury stock, at cost, 52,700 and 168,800 shares (1,336) (4,165)

Retained earnings 80,683 88,910

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Total stockholders' equity 214,777 220,175

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Total liabilities and stockholders' equity $428,857 $464,143

-------- --------

-------- --------


SEE ACCOMPANYING NOTES.

-2-

Triumph Group, Inc.

Consolidated Statements of Income

(in thousands, except per share data)

(unaudited)


THREE MONTHS ENDED JUNE 30,

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1998 1999

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Net sales $91,140 $ 104,894
Operating costs and expenses:

Cost of products sold 63,023 71,911

Selling, general, and administrative 12,072 13,435

Depreciation and amortization 2,887 4,726

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77,982 90,072
Operating income 13,158 14,822

Interest expense and other 705 1,855

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Income before income taxes 12,453 12,967

Income tax expense 4,859 4,732

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Net income $ 7,594 $ 8,235

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Earnings Per Share - Basic:

Net income $ 0.64 $ 0.70

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Weighted average common shares outstanding - Basic 11,898 11,737

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Earnings Per Share - Assuming Dilution:

Net income $ 0.60 $ 0.66

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Weighted average common shares outstanding -

Assuming Dilution 12,692 12,455

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SEE ACCOMPANYING NOTES.

-3-


Triumph Group, Inc.

Consolidated Statements of Cash Flows

(dollars in thousands)

(unaudited)

THREE MONTHS ENDED JUNE 30,

---------------------------

1998 1999

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OPERATING ACTIVITIES

Net income $7,594 $8,235

Adjustments to reconcile net income to net cash

provided by operating activities:

Depreciation and amortization 2,887 4,726

Other amortization included in interest expense 35 46

Provision for doubtful accounts receivable 56 61

Provision for deferred income taxes 395 2,148

Interest on subordinated and junior subordinated

promissory notes paid by issuance of

additional notes 185 218

Changes in other current assets and liabilities, net

of acquisition of business:

Accounts receivable 6,823 7,908

Inventories (5,912) (5,623)

Prepaid expenses and other current assets (662) (290)

Accounts payable, accrued expenses, and accrued

income taxes payable 754 (9,116)

Other 59 (136)

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Net cash provided by operating activities 12,214 8,177
INVESTING ACTIVITIES

Capital expenditures, net (4,652) (4,507)

Cost of business acquired, net of cash acquired -- (13,031)

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Net cash used in investing activities (4,652) (17,538)


-4-


Triumph Group, Inc.

Consolidated Statements of Cash Flows (continued)

(dollars in thousands)

(unaudited)


THREE MONTHS ENDED JUNE 30,

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FINANCING ACTIVITIES 1998 1999

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Net (decrease) increase in revolving credit facility $(7,793) $16,930

Repayment of debt and capital lease obligations (340) (1,435)

Purchase of Treasury Stock - (2,864)

Payments of deferred financing costs (25) (963)

Proceeds from exercise of stock options 72 27

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Net cash (used in) provided by financing activities (8,086) 11,695

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Net change in cash (524) 2,334

Cash at beginning of period 4,642 4,953

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Cash at end of period $ 4,118 $ 7,287

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SUPPLEMENTAL DISCLOSURE OF CASH FLOW

INFORMATION:

Cash paid for income taxes $ 712 $ 896

Cash paid for interest 491 1,556

SEE ACCOMPANYING NOTES.

-5-

Triumph Group, Inc.

Notes to Consolidated Financial Statements

(dollars in thousands, except per share data)

(Unaudited)
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared

in accordance with generally accepted accounting principles for interim

financial information and with the instructions to Form 10-Q and Article 10 of

Regulation S-X. Accordingly, they do not include all of the information and

footnotes required by generally accepted accounting principles for complete

financial statements. In the opinion of management, all adjustments (consisting

of normal recurring accruals) considered necessary for a fair presentation have

been included. Operating results for the three months ended June 30, 1999 are

not necessarily indicative of the results that may be expected for the fiscal

year ended March 31, 2000. For further information, refer to the consolidated

financial statements and footnotes thereto included in Triumph Group, Inc.'s

(the "Company") Annual Report on Form 10-K for the year ended March 31, 1999.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
The Company's aviation segment designs, engineers, manufactures or repairs and

overhauls aircraft components for commercial airlines, air cargo carriers, and

original equipment manufacturers on a worldwide basis. The Company's metals

segment manufactures, machines, processes, and distributes metal products to

customers in the computer, construction, container and office furniture

industries, primarily within North America.
NEW ACCOUNTING STANDARDS
In March 1998, the Accounting Standards Executive Committee issued Statement of

Position 98-1 ("SOP 98-1"), "Accounting for the Costs of Computer Software

Developed or Obtained for Internal Use." SOP 98-1 requires all costs related to

the development of internal-use software other than those incurred during the

application development stage to be expensed as incurred. Costs incurred during

the application development stage are required to be capitalized and amortized

over the estimated useful life of the software. The adoption of SOP 98-1 had no

material effect on results of operations or financial position for the three

months ended June 30, 1999.
USE OF ESTIMATES
The preparation of the financial statements in conformity with generally

accepted accounting principles requires management to make estimates and

assumptions that affect the amounts reported in the financial statements and

accompanying notes. Actual results could differ from those estimates.
3. ACQUISITIONS
Effective April 1, 1999, the Company acquired all of the outstanding stock of

Ralee Engineering Company ("Ralee"), based in City of Industry, California, for

an aggregate purchase price of approximately $32,213. The purchase price

includes cash paid at closing, net of cash acquired, the assumption of debt and

certain liabilities, direct costs of the acquisition, deferred payments and a

contingent payment of approximately $6,000, which is included in accrued

expenses at June 30, 1999. Ralee manufactures long structural components such as

stringers, cords, floor beams and spars for the aviation industry. The excess of

the purchase price over the fair value of the net assets acquired of $8,207 was

recorded as excess of cost over net assets acquired and is being amortized over

thirty years on a straight-line basis. The acquisition has been accounted for

under the purchase method and, accordingly, is included in the consolidated

financial statements from its date of acquisition. The acquisition was funded

through the Company's Credit Facility.

-6-

Triumph Group, Inc.

Notes to Consolidated Financial Statements (continued)

(dollars in thousands, except per share data)

(Unaudited)

4. INVENTORIES
The components of inventories are as follows:


MARCH 31, JUNE 30,

1999 1999

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Raw materials $ 30,896 $ 36,945

Work-in-process 39,280 41,498

Finished goods 34,595 36,488

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Total inventories $104,771 $114,931

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Effective April 1, 1999, the Company's method of valuing all inventory was the

lower of First-in First-out ("FIFO") cost or market. As of March 31, 1999,

approximately 10% of the inventory was valued using the Last-in First-out

("LIFO") method.
5. LONG-TERM DEBT
Long-term debt consists of the following:


MARCH 31, JUNE 30,

1999 1999

---- ----
Revolving credit facility $76,095 $ 93,025

Subordinated promissory notes 11,734 11,139

Industrial revenue bonds 4,665 4,330

Capital lease obligations 28 8,638

Other debt 486 496

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93,008 117,628

Less current portion 1,151 2,443

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$91,857 $115,185

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On June 11, 1999, the Company amended and restated its Credit Facility ("New

Credit Facility") with its Lenders to increase the Credit Facility to $250,000

from $125,000, extend the term and amend certain terms and covenants. The New

Credit Facility bears interest at either LIBOR plus between 0.75% and 1.75% or

the prime rate (or the Federal Funds rate plus 0.5% if greater) at the option of

the Company and expires on June 13, 2004. The variation in the interest rate is

based upon the Company's ratio of total indebtedness to earnings before

interest, taxes, depreciation and amortization. In addition, the Company is

required to pay a commitment fee of between 0.175% and 0.375% on the unused

portion of the New Credit Facility without penalty. The Company may allocate up

to $5,000 of the available New Credit Facility for the issuance of letters of

credit.
Effective April 1, 1999, in connection with the Ralee acquisition, the Company

assumed approximately $8,665 of capital leases with interest rates ranging from

7.1% to 10.2%, maturing between September 2003 and August 2005. Each capital

lease is secured by a piece of equipment.


-7-

Triumph Group, Inc.

Notes to Consolidated Financial Statements (continued)

(dollars in thousands, except per share data)

(Unaudited)


6. COMMITMENTS AND CONTINGENCIES
Certain of the Company's business operations and facilities are subject to a

number of federal, state, and local environmental laws and regulations. The

Company is indemnified for environmental liabilities related to assets purchased

from IKON Office Solutions, Inc. (formerly Alco Standard Corporation) which

existed prior to the acquisition of such assets and any unidentified

environmental liabilities which arise subsequent to the date of settlement

through July 22, 2000, arising from conditions or activities existing at these

facilities prior to the acquisition. In the opinion of management, there are no

significant environmental concerns which would have a material effect on the

financial condition or operating results of the Company which are not covered by

such indemnification.
The Company is involved in certain litigation matters arising out of its normal

business activities. In the opinion of management, the ultimate resolution of

such litigation will not have a material effect on the financial condition or

operating results of the Company.

7. EARNINGS PER SHARE
The following is a reconciliation between the weighted average outstanding

shares used in the calculation of basic and diluted earnings per share:


THREE MONTHS ENDED

JUNE 30,

--------

(in thousands) 1998 1999

---- ----
Weighted average common shares outstanding 11,898 11,737

Net effect of dilutive stock options 144 68

Net effect of dilutive warrant 650 650

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Weighted average common shares outstanding -

assuming dilution 12,692 12,455

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Options to purchase 203,500 shares of common stock, at prices ranging from

$32.19 per share to $45.38 per share, were outstanding during the first quarter

of fiscal 2000. These options were not included in the computation of diluted

earnings per share because the exercise price was greater than the average

market price of the common stock during the three months ended June 30, 1999

and, therefore, the effect would be antidilutive. Also, warrants to purchase up

to 60,000 share of common stock at $10.00 per share, subject to certain

performance criteria, were not included in the computation of diluted earnings

per share during the first quarter of fiscal 2000 because the number of

contingently issuable warrants was zero, based on the number of shares, if any,

that would be issuable under the terms of the arrangement, as if the end of the

contingency period were June 30, 1999.

-8-

Triumph Group, Inc.

Notes to Consolidated Financial Statements (continued)

(dollars in thousands, except per share data)

(Unaudited)

8. SEGMENT REPORTING
Selected financial information for each reportable segment is as follows:


THREE MONTHS ENDED

JUNE 30,

--------

1998 1999

---- ----
Net Sales:

Aviation $ 74,057 $86,055

Metals 17,083 18,839

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$ 91,140 $104,894

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Income before income taxes:

Operating income (expense):

Aviation $ 13,419 $14,669

Metals 754 930

Corporate (1,015) (777)

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13,158 14,822

Interest expense and other 705 1,855

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$ 12,453 $12,967

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Capital expenditures:

Aviation $ 4,394 $ 4,135

Metals 224 372

Corporate 34 -

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$ 4,652 $ 4,507

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Depreciation and amortization:

Aviation $ 2,615 $ 4,419

Metals 257 295

Corporate 15 12

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$ 2,887 $ 4,726

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March 31, 1999 June 30, 1999

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Assets:

Aviation $395,745 $429,279

Metals 31,228 30,793

Corporate 1,884 4,071

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$428,857 $464,143

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During the quarters ended June 30, 1998 and 1999, the Company had foreign sales

of $15,921 and $11,677, respectively.
9. SUBSEQUENT EVENT
On August 12 and 13, 1999 the Company repurchased an additional 50,000 and

24,000 shares of its Common stock, respectively. The aggregate purchase price

was $1,745.

-9-


Item 2. Management's Discussion and Analysis of Financial Condition and Results

of Operations

(The following discussion should be read in conjunction with the Consolidated

Financial Statements contained elsewhere herein.)
THREE MONTHS ENDED JUNE 30, 1999 COMPARED TO THREE MONTHS ENDED JUNE 30, 1998
AVIATION GROUP
NET SALES. Net sales for the Aviation Group increased by $12.0 million,

or 16.2%, to $86.1 million for the first quarter of fiscal 2000 from $74.1

million for the first quarter of fiscal 1999. This increase was due to the

inclusion of an aggregate of $19.2 million in net sales in the first quarter of

fiscal 2000 for Nu-Tech Industries, Inc. ("Nu-Tech"), DG Industries, Inc.

("DG"), DV Industries, Inc. ("DV"), Triumph Air Repair (Europe) Ltd. ("Triumph

Air (Europe)"), HTD Aerospace, Inc. ("HTD") and Triumph Precision, Inc.

("Triumph Precision"), (collectively, the "1999 Acquisitions") and Ralee

Engineering Company ("Ralee"). Net sales for the other operating divisions and

subsidiaries in the Aviation Group experienced a 9.7% decrease, totaling $7.2

million, from the prior year period. The decline in sales was due to slowdowns

in the production rates of certain Boeing commercial airplane programs,

specifically the 737 Classic, 747 and 777, as well as effects from Boeing

working off excess inventory for these programs, slightly offset by an increase

in the production rate of the 737 New Generation.
COSTS OF PRODUCTS SOLD. Costs of products sold for the Aviation Group

increased by $7.5 million, or 15.1%, to $57.0 million for the first quarter of

fiscal 2000 from $49.5 million for the first quarter fiscal 1999. This increase

was due to the inclusion of $11.0 million in the first quarter of fiscal 2000 of

costs of products sold associated with net sales generated by the 1999

Acquisitions and Ralee. Costs of products sold for the other operating divisions

and subsidiaries in the Aviation Group decreased by $3.5 million, or 7.1%, due

to the decline in shipments for Boeing commercial airplane programs discussed

above.
GROSS PROFIT. Gross profit for the Aviation Group increased by $4.5

million, or 18.4%, to $29.0 million for the first quarter of fiscal 2000 from

$24.5 million for the first quarter of fiscal 1999. This increase was due to the

inclusion of $8.2 million in the first quarter of fiscal 2000 of gross profit on

the net sales generated by the 1999 Acquisitions and Ralee. The remaining net

decrease of $3.6 million was due to reasons discussed above. As a percentage of

net sales, gross profit for the Aviation Group was 33.7% and 33.1% for the first

quarter of fiscal 2000 and 1999, respectively.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and

administrative expenses for the Aviation Group increased by $1.5 million, or

17.2%, to $9.9 million for the first quarter of fiscal 2000 from $8.5 million

for the first quarter of fiscal 1999, primarily due to the 1999 Acquisitions and

Ralee.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization for the

Aviation Group increased by $1.8 million, or 69.0%, to $4.4 million for the

first quarter of fiscal 2000 from $2.6 million for the first quarter of fiscal

1999, primarily due to the assets acquired in connection with the 1999

Acquisitions and Ralee.
OPERATING INCOME. Operating income for the Aviation Group increased by

$1.3 million, or 9.3%, to $14.7 million for the first quarter of fiscal 2000

from $13.4 million for the first quarter of fiscal 1999. This increase was

primarily due to the addition of net sales and profits generated by the 1999

Acquisitions and Ralee. All other operating divisions and subsidiaries in the

Aviation group experienced a 27.0% decline in operating income from the prior

year due to the reasons discussed above. As a percentage of net sales, operating

income for the Aviation Group was 17.0% for the first quarter of fiscal 2000 and

18.1% for the first quarter of fiscal 1999.

-10-

Management's Discussion And Analysis of

Financial Condition and Results of Operations

(continued)

METALS GROUP
NET SALES. Net sales for the Metals Group increased by $1.8 million, or

10.3%, to $18.8 million for the first quarter of fiscal 2000 from $17.1 million

for the first quarter of fiscal 1999. This increase was mainly due to an

increase activity at the Company's structural steel erection operation.
COSTS OF PRODUCTS SOLD. Costs of products sold for the Metals Group

increased by $1.4 million, or 10.4%, to $14.9 million for the first quarter of

fiscal 2000 from $13.5 million for the first quarter of fiscal 1999. This

increase mainly was due to the increase in activity at the Company's structural

steel erection operation.
GROSS PROFIT. Gross profit for the Metals Group increased by $0.4

million, or 9.8%, to $4.0 million for fiscal 2000 from $3.6 million for the

prior year period, due to the reasons discussed above. As a percentage of net

sales, gross profit for the Metals Group was 21.0% and 21.1% for the first

quarter of fiscal 2000 and fiscal 1999, respectively.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and

administrative expenses for the Metals Group increased by $0.1 million, or 5.4%,

to $2.7 million from $2.6 million in the first quarter of fiscal 1999.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization for the

Metals Group remained unchanged at $0.3 million for the first quarter of fiscal

2000 from the first quarter of fiscal 1999.
OPERATING INCOME. Operating income for the Metals Group increased by

$0.2 million, or 23.3%, to $0.9 million for the first quarter of fiscal 2000

from $0.8 million for the first quarter of fiscal 1999, due to the reasons

discussed above. As a percentage of net sales, operating income for the Metals

Group was 4.9% and 4.4% for the first quarter of fiscal 2000 and 1999,

respectively.
OVERALL RESULTS
CORPORATE EXPENSES. Corporate expenses decreased by $0.2 million, or

23.4%, to $0.8 million for the first quarter of fiscal 2000 from $1.0 million

for the first quarter of fiscal 1999.
INTEREST EXPENSE AND OTHER. Interest expense and other increased by

$1.2 million, or 163.1%, to $1.9 million for the first quarter of fiscal 2000

from $0.7 million for the first quarter of fiscal 1999. This increase was

primarily due to increased debt levels associated with the 1999 Acquisitions and

the acquisition of Ralee, the cash portions of which were financed by borrowings

under the Company's Credit Facility.
INCOME TAX EXPENSE. The effective tax rate was 36.5% for the first

quarter of fiscal 2000 and 39.0% for the first quarter of fiscal 1999. The first

quarter of fiscal 2000 effective tax rate is comparable to the third and fourth

quarters of fiscal 1999 effective tax rates of 37.0% in each of those quarters.
NET INCOME. Net income increased by $0.6 million, or 8.4%, to $8.2

million for the first quarter of fiscal 2000 from $7.6 million for the first

quarter of fiscal 1999. The increase in first quarter 2000 net income was

primarily attributable to the 1999 Acquisitions and Ralee, partially offset by

the reduced earnings of the remaining Aviation Group operating units due to the

decline in shipments for Boeing commercial airplane programs discussed above.

-11-

Management's Discussion And Analysis of

Financial Condition and Results of Operations

(continued)

LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital needs are generally funded through cash

flows from operations and borrowings under its credit arrangements. The Company

generated approximately $8.2 million of cash flows from operating activities for

the three months ended June 30, 1999. The Company used approximately $17.5

million in investing activities and raised $11.7 million in financing activities

for the three months ended June 30, 1999.
On June 11, 1999, the Company amended and restated its Credit Facility

("New Credit Facility") with its Lenders to increase the Credit Facility to

$250.0 million from $125.0 million, extend the term and amend certain terms and

covenants. The New Credit Facility bears interest at either LIBOR plus between

0.75% and 1.75% or the prime rate (or the Federal Funds rate plus 0.5% if

greater) at the option of the Company and expires on June 13, 2004. The

variation in the interest rate is based upon the Company's ratio of total

indebtedness to earnings before interest, taxes, depreciation and amortization.

In addition, the Company is required to pay a commitment fee of between 0.175%

and 0.375% on the unused portion of the New Credit Facility without penalty. The

Company may allocate up to $5.0 million of the available New Credit Facility for

the issuance of letters of credit. As of June 30, 1999, $155.6 million was

available under the New Credit Facility. On June 30, 1999, an aggregate amount

of approximately $93.0 million was outstanding under the New Credit Facility,

$85.0 million of which was accruing interest at LIBOR plus applicable basis

points totaling 6.0% per annum, and $8.0 million of which was accruing interest

at the prime rate of 7.75% per annum. Amounts repaid under the New Credit

Facility may be reborrowed.
In the first quarter of fiscal 2000, the Company acquired all of the

outstanding stock of Ralee. Ralee, located in City of Industry, California,

manufactures long structural components such as stringers, cords, floor beams

and spars for the aviation industry. The cash purchase price for this

acquisition, net of cash acquired, of approximately $13.0 million was funded by

borrowings under the Company's Credit Facility. Also, in connection with this

acquisition, the Company assumed $8.7 million of capital leases for equipment

with interest rates ranging from 7.1% to 10.2%, maturing between September 2003

and August 2005.
During the first quarter of fiscal 2000, the Company purchased 117,500

shares of its Common stock for total cash consideration of $2.9 million. In

August 1999, the Company purchased 74,000 shares of its Common stock for

total cash consideration of $1.7 million. The purchases were funded by

borrowings under the Company's New Credit Facility.
Capital expenditures were approximately $4.5 million for the three

months ended June 30, 1999 primarily for manufacturing machinery and equipment

for the Aviation Group. The Company funded these expenditures through borrowings

under its New Credit Facility. The Company expects capital expenditures to be

approximately $21.0 million for its fiscal year ending March 31, 2000. The

expenditures are expected to be used primarily to expand capacity at several

facilities in the Aviation Group.
The Company believes that cash generated by operations and borrowings

under the New Credit Facility will be sufficient to meet anticipated cash

requirements for its current operations. However, the Company has a stated

policy to grow through acquisition and is continuously evaluating various

acquisition opportunities. As a result, the Company currently is pursuing the

potential purchase of a number of candidates. In the event that more than one of

these transactions are successfully consummated, the availability under the New

Credit Facility might be fully utilized and additional funding sources may be

needed. There can be no assurance that such funding sources will be available to

the Company on terms favorable to the Company, if at all.
YEAR 2000 DATE CONVERSION
The Year 2000 issue exists because many software programs, computer

hardware, operating systems and microprocessor based embedded controls in

automated equipment use two-digit date fields to designate a year. As the

century date change occurs, date-sensitive systems may recognize the year 2000

as 1900, or not at all. This inability to recognize or properly treat the year

2000 may cause systems to process financial and operational information

incorrectly or fail to operate.

-12-

Management's Discussion And Analysis of

Financial Condition and Results of Operations

(continued)

The Company has recognized the need to ensure that its business

operations will not be adversely affected by the upcoming calendar year 2000

date change and is cognizant of the time sensitive nature of the problem. The

Company's operating units have assessed or are in the process of assessing how

each may be impacted by Year 2000 and have formulated and commenced or are

formulating and commencing implementation of a comprehensive plan to address all

known aspects of the Year 2000 problem: information systems, production and

facilities equipment, suppliers and customers. The Company's operating units are

currently making inquiries of customers and suppliers to assess their Year 2000

readiness. The operating units are also in the process of testing information

technology ("IT") systems, as well as non-IT systems, and verifying that

vendor-supplied or outsourced systems will be Year 2000 compliant and will

repair or replace any such systems found to be non-compliant. Currently, the

Company estimates that, on a consolidated basis, it has substantially completed

its assessment of how it may be impacted and the development of plans to address

the testing and remediation of its systems, and is approximately three-quarters

of the way through its testing and remediation activities. The Company estimates

that it will substantially complete this process prior to October 31, 1999.
The Company has not separately tracked its Year 2000 costs as a

project, but rather has incurred the costs in conjunction with normal sustaining

activities. The discretely identifiable costs incurred through June 30, 1999 of

completing the Company's Year 2000 assessment and of modifying its computer

software and hardware, as well as its production and facilities equipment, to be

Year 2000 compliant were approximately $0.6 million. The estimated costs yet to

be incurred are approximately $0.4 million. The current assessment does not

include costs related to software and hardware replaced in the normal course of

business other than replacements accelerated due to the Year 2000 issue.
The variety and complexity of the Year 2000 issues identified and the

proposed solutions, the Company's dependence on the technical skills of

employees and independent contractors, and especially the representations and

readiness of third parties are among the factors that could cause the Company's

efforts to be less than fully effective. In addition, Year 2000 issues present a

number of risks that are beyond the Company's reasonable control, such as

continued service from outside parties such as utility companies, financial

institutions, and transportation and delivery companies (such as Federal Express

and United Parcel Service). Also, certain significant customers are material to

the Company and a Year 2000 failure by one or more of these parties could result

in a material adverse effect on the Company's operating results and financial

position. The most likely worst case scenario would be the failure of particular

computer systems or machines with embedded chips that would require manual

processes in order to continue production and invoicing activities. The Company

believes that it could obtain materials at reasonably competitive prices from

alternate suppliers given a failure at a current vendor.
While the Company does not currently foresee any material problems,

there can be no assurance that the Company and its material suppliers and

customers will be Year 2000 compliant by January 1, 2000 and that any such

non-compliance will not have a material adverse effect on the Company.
The Company is in the process of developing contingency plans in the

event that any unresolved issues are identified.
The foregoing Year 2000 discussion includes forward-looking statements

within the meaning of the Private Securities Litigation Reform Act of 1995

relating to the Company's efforts and management's expectations relating to Year

2000 readiness. The Company's Year 2000 project is dependent on certain future

events including the availability and cost of personnel trained to perform Year

2000 modifications, the ability of the Company to locate and correct all

non-compliant computer codes and embedded controls, the ability of material

customers, suppliers and trading partners to successfully complete their own

Year 2000 remediation projects, the accuracy of information received from third

parties concerning the Year 2000 compliance of their information systems or

automated equipment or concerning their Year 2000 business risk assessment, and

similar uncertainties.

-13-

Management's Discussion And Analysis of

Financial Condition and Results of Operations

(continued)

FORWARD LOOKING STATEMENTS
This report contains forward-looking statements within the meaning of

the Private Securities Litigation Reform Act of 1995 relating to the Company's

future operations and prospects, including statements that are based on current

projections and expectations about the markets in which the Company operates,

and management's beliefs concerning future performance and capital requirements

based upon current available information. Such statements are based on

management's beliefs as well as assumptions made by and information currently

available to management. When used in this document, words like "may", "might",

"will", "expect", "anticipate", "believe", "potential", and similar expressions

are intended to identify forward looking statements. Actual results could differ

materially from management's current expectations and there can be no assurance

that additional capital will not be required or that additional capital, if

required, will be available on reasonable terms, if at all, at such times and in

such amounts as may be needed by the Company. In addition to these factors,

among other factors that could cause actual results to differ materially are

uncertainties relating to the integration of acquired businesses, general

economic conditions affecting the Company's two business segments, dependence of

certain of the Company's businesses on certain key customers as well as

competitive factors relating to the aviation and metals industries. For a more

detailed discussion of these and other factors affecting the Company, see the

risk factors described in the Company's Annual Report on Form 10-K, for the year

ended March 31, 1999, filed with the SEC in June 1999.

Item 3. Quantitative and Qualitative Disclosures About Market Risk
For information regarding the Company's exposure to certain market

risks, see Item 7A. Quantitative and Qualitative Disclosures About Market Risk

in the Company's Annual Report on Form 10-K for the year ended March 31, 1999.

There has been no material change in this information.

-14-

TRIUMPH GROUP, INC.
Part II. Other Information
Item 1. Legal Proceedings
Not applicable
Item 2. Changes in Securities
Not applicable
Item 3. Defaults upon Senior Securities
Not applicable
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable
Item 5. Other Information
Not applicable
Item 6. Exhibits and Reports on Form 8-K
A. Exhibits
(27) Financial Data Schedule

B. Reports on Form 8-K
The Company did not file any reports on Form 8-K during the

three months ended June 30, 1999

-15-

Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the

registrant has duly caused this report to be signed on its behalf by the

undersigned thereunto duly authorized.

Triumph Group, Inc.

------------------------------------------------

(Registrant)
/s/ Richard C. Ill

------------------------------------------------

Richard C. Ill, President & CEO
/s/ John R. Bartholdson

------------------------------------------------

John R. Bartholdson, Senior Vice President & CFO

(Principal Financial Officer)

/s/ Kevin E. Kindig

------------------------------------------------

Kevin E. Kindig, Vice President & Controller

(Principal Accounting Officer)

Dated: August 13, 1999

-16-


5



THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE

FINANCIAL STATEMENTS OF TRIUMPH GROUP, INC. FOR THE THREE MONTHS ENDED JUNE 30,

1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.



0001021162

TRIUMPH GROUP, INC.

1,000


3-MOS

MAR-31-2000


APR-01-1999


JUN-30-1999

7,287

0

65,162

2,102

114,931

191,979


27,845

464,143

88,768

115,185


0


0

12

220,163

464,143

104,894

104,894

71,911

90,072

18

61

1,837

12,967

4,732

8,235

0

0

0

8,235

0.70

0.66

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