September 19, 2011 - Triumph Group, Inc. (TGI-NYSE), through its subsidiaries, engages in the design, engineering, manufacture, repair, overhaul, and distribution of aerostructures, aircraft components, accessories, subassemblies, and systems worldwide. The company operates in three segments: Aerostructures (73% of 2010 sales), Aerospace Systems (18% of '10 revenues), and Aftermarket Services (9%). Boeing accounts for about 45% of sales.

The Aerospace Systems group designs and engineers mechanical and electromechanical controls, such as hydraulic systems, main engine gearbox assemblies, accumulators, mechanical control cables, and non-structural cockpit components.

The Aftermarket Services division provides maintenance, repair, and overhaul services to commercial and military markets on components and accessories manufactured by third parties, including auxiliary power units; airframe and engine accessories, such as constant-speed drives, cabin compressors, starters and generators, and pneumatic drive units; thrust reversers, nacelle components, and flight control surfaces; and cockpit instruments and gauges for a range of commercial airlines.

The company serves the aerospace industry, including original equipment manufacturers of commercial, regional, business, and military aircraft and components, as well as commercial and regional airlines and air cargo carriers. Triumph Group, Inc. was founded in 1993 and is based in Berwyn, Pennsylvania.

Triumph buys companies. It picked up three in 2006. In 2008, it acquired B&R Machine and Tool. Last year in June, it bought Vought Aircraft. Because of Vought, sales should grow by 20% this year (fiscal year ends in March of 2012), putting total revenues at $3.48 billion (a consensus from 10 analysts). Next year, they see $3.73 billion, up another 7%.

Of course, when sales go up, ideally, profits grow even faster. That's certainly the case at TGI. Earnings per share this year are forecast to be $4.39 (consensus of 11 analysts) well above the $3.48 of 2010. That's an increase of 26.15%. For 2012, they see $4.98, a gain of 13.44%. For the next 5 years, earnings are projected to grow by 13.87% annually on average. That's compared to the last 5 years when average annual growth was 21.45%.

Once the Vought acquisition becomes fully assimilated, look for better efficiencies. That will show in the company's operating margins. Management announced it expects to save $18 million a year by late 2011. Stronger sales will come from more high-end components for new aircraft, ones like the Boeing 787 Dreamliner, a jet that starts delivery this month. The most influential factor: more travelers traveling. Since 2009, air traffic has been building. Unless there is another terror attack of large magnitude, expect this trend to continue, especially as emerging economies strengthen and their populations begin to be more mobile.

Essential numbers:
- Market Cap is $2.51 billion.
- Trailing P/E is 13.8 while Forward P/E is 10.3.
- Operating margin for the last 12 months was 11.68%.
- Profit margin was 5.65%.
- Return on equity was 12.52% and Return on assets was 5.47%.
- Total cash is $36.42 million for 74 cents a share.
- Total debt is $1.24 billion.
- Debt to equity is 73.29%.
- Current ratio is 1.45.
- Book value per share is $34.47.
- Beta is 1.01.
- The stock is up by 44.56% in the last 12 months.
- There are 49.04 million shares Outstanding.
- Float is 38.26 million.
- Insiders own 1.77% of the stock. Institutions have 103% of the Float.
- The dividend is 16 cents a share for a yield of .3%.

    Ted Allrich