United States
Securities and Exchange Commission
Washington, D.C. 20549

FORM 10-Q

Commission File Number:    1-12235

TRIUMPH GROUP, INC.

(Exact name of registrant as specified in its charter)

(610) 251-1000

(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 period 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   o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated filer    o   Accelerated filer   x   Non-accelerated filer   o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes   o       No    x

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, 16,708,100 shares outstanding as of September 30, 2007.

TRIUMPH GROUP, INC.

INDEX

Part I. Financial Information

Item 1. Financial Statements.

Triumph Group, Inc.

Consolidated Balance Sheets

(dollars in thousands, except per share data)

SEE ACCOMPANYING NOTES.

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Triumph Group, Inc.

Consolidated Statements of Income

(in thousands, except per share data)

(unaudited)

* Difference due to rounding.

SEE ACCOMPANYING NOTES.

2

Triumph Group, Inc.

Consolidated Statements of Cash Flows

(dollars in thousands)

(unaudited)

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SEE ACCOMPANYING NOTES.

4

Triumph Group, Inc.

Consolidated Statements of Comprehensive Income

(dollars in thousands)

(unaudited)

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 of Triumph Group, Inc. (the “Company”) have been prepared in conformity with accounting principles generally accepted in the United States 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 accounting principles generally accepted in the United States 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 and six months ended September 30, 2007 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2008. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2007.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION

The Company 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.

USE OF ESTIMATES

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States 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.

RECENTLY ISSUED FINANCIAL ACCOUNTING STANDARD

In June 2006, the Financial Accounting Standards Board (“FASB”) issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an interpretation of Statement of Financial Accounting Standards (“SFAS”) No. 109 (“FIN 48”). FIN 48 creates a single model to address accounting for uncertainty in tax positions by prescribing a minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. FIN 48 also provides guidance on derecognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006. In connection with its adoption of FIN 48 on April 1, 2007, the Company recognized a charge of approximately $291 to retained earnings. See Note 8 of “Notes to Consolidated Financial Statements” for additional information regarding the Company’s uncertain tax positions.

In March 2007, the FASB ratified Emerging Issues Task Force Issue No. 06-10 (“EITF 06-10”), Accounting for Collateral Assignment Split-Dollar Life Insurance Agreements. EITF 06-10 provides guidance for determining a liability for the post-retirement benefit obligation as well as recognition and measurement of the associated asset on the basis of the terms of the collateral assignment agreement. EITF 06-10 is effective for fiscal years beginning after December 15, 2007. The Company is currently evaluating the impact the adoption of EITF 06-10 will have on the Company’s financial position, results of operations and cash flows.

INTANGIBLE ASSETS

Intangible assets cost and accumulated amortization at September 30, 2007 was $112,935 and $47,994, respectively. Intangible assets cost and accumulated amortization at March 31, 2007 was $112,710 and $42,791, respectively. Intangible assets consist of two major classes: (i) product rights and licenses, which

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at September 30, 2007 had a weighted-average life of 11.3 years, and (ii) non-compete agreements, customer relationships and other, which at September 30, 2007 had a weighted-average life of 10.6 years. Gross cost and accumulated amortization of product rights and licenses at September 30, 2007 were $74,082 and $34,577, respectively, and at March 31, 2007 were $73,957 and $31,070, respectively. Gross cost and accumulated amortization of noncompete agreements, customer relationships and other at September 30, 2007 were $38,853 and $13,417, respectively, and at March 31, 2007 were $38,753 and $11,721, respectively. Amortization expense for the three and six months ended September 30, 2007 and 2006 was $2,604 and $5,203 and $1,972 and $3,974, respectively. Amortization expense for the fiscal year ended March 31, 2008 and the succeeding five fiscal years by year is expected to be as follows: 2008: $10,386; 2009: $10,122; 2010: $9,872; 2011: $8,124; 2012: $6,593; and 2013: $6,480.

RECLASSIFICATIONS

Certain reclassifications have been made to prior year amounts in order to conform to the current year presentation.

3. FISCAL 2007 ACQUISITIONS

Acquisition of Allied Aerospace Industries, Inc.

Effective November 1, 2006, the Company acquired Allied Aerospace Industries, Inc. (“Allied”) through the merger of a newly organized, wholly-owned subsidiary of the Company, with and into Allied. The acquired business has since been consolidated into a single subsidiary of the Company, Triumph Aerospace Systems – Newport News, Inc. Triumph Aerospace Systems – Newport News, Inc. specializes in engineering design and manufacturing solutions for complex aerospace and defense programs. The results for Triumph Aerospace Systems – Newport News, Inc. are included in the Company’s Aerospace Systems Segment.

During the first half of fiscal 2008, the Company finalized the purchase price allocation for the Allied acquisition as a result of receiving the final appraisal of tangible and intangible assets, finalizing the deferred tax accounting and recording the final purchase price adjustment as per the purchase agreement. Based on the revised allocation, an additional $100 was allocated to intangible assets while the amount allocated to tangible assets was reduced by $232. The purchase price was reduced by $1,055 related to the final negotiation of the values on the closing balance sheet.

Acquisition of Grand Prairie Accessory Services, LLC

Effective January 1, 2007, the Company acquired the assets and business of Grand Prairie Accessory Services, LLC (“Grand Prairie”) through a newly organized, wholly-owned subsidiary of the Company, Triumph Accessory Services – Grand Prairie, Inc. Triumph Accessory Services – Grand Prairie, Inc. provides comprehensive maintenance solutions for engine accessories related to the CF34, CFM56, CF6, CT7 and V2500 family of engines. Capabilities include fuel, oil, pneumatic, hydraulic and mechanical engine accessories for those and other aero and aero-derivative gas turbine engines. The results for Triumph Accessory Services – Grand Prairie are included in the Company’s Aftermarket Services Segment.

During the second quarter of fiscal 2008, the Company revised the purchase price allocation for the Grand Prairie acquisition. Based on the revised allocation, an additional $50 was allocated to goodwill. The Company is awaiting final appraisals of tangible and intangible assets and the finalization of deferred tax

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accounting related to its acquisition of Grand Prairie. Therefore, the allocation of purchase price for the acquisition of Grand Prairie is not complete and is subject to change.

The following unaudited pro forma information for the three and six months ended September 30, 2006 has been prepared assuming these acquisitions had occurred on April 1, 2006. The pro forma information for the three and six months ended September 30, 2006 is as follows: Net sales: $238,411 and $472,445; Income from continuing operations: $13,836 and $25,706; Income per share from continuing operations-basic: $0.86 and $1.59; and Income per share from continuing operations-diluted: $0.85 and $1.58.

4. DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE

In September 2007, the Company sold the assets of Triumph Precision, Inc., a build to specification manufacturer and supplier of ultra-precision machined components and assemblies in its Aerospace Systems Segment. The effective date of the sale was July 1, 2007. The Company recognized a pre-tax loss of $650 on the sale of the business, which includes costs to sell of $150. The Company has also decided to sell Triumph Precision Castings Co., a casting facility in its Aftermarket Services Segment that specializes in producing high quality hot gas path components for aero and land based gas turbines. The Company recognized a pre-tax loss of $3,500 in the first quarter of fiscal 2008 based upon a write-down of the carrying value of the business to estimated fair value less costs to sell. The write-down was applied to inventory and long-lived assets, consisting primarily of property, plant and equipment. For financial statement purposes, the assets, liabilities, results of operations and cash flows of these businesses have been segregated from those of the continuing operations and are presented in the Company’s consolidated financial statements as discontinued operations and assets and liabilities held for sale.

Revenues of discontinued operations were $2,171 and $6,635 for the three and six months ended September 30, 2007 and $4,313 and $9,139 for the three and six months ended September 30, 2006, respectively. The loss from discontinued operations was $1,472 and $5,366, net of income tax benefit of $792 and $2,889 for the three and six months ended September 30, 2007 and $661 and $1,694, net of income tax benefit of $356 and $912 for the three and six months ended September 30, 2006, respectively. Interest expense of $769 and $1,525 was allocated to discontinued operations for the three and six months ended September 30, 2007, respectively, and interest expense of $693 and $1,367 was allocated to discontinued operations for the three and six months ended September 30, 2006, respectively, based upon the actual borrowings of the operations, and such interest expense is included in the loss from discontinued operations.

Assets and liabilities held for sale are comprised of the following:

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5. INVENTORIES

The components of inventories are as follows:

6. LONG-TERM DEBT

In September 2006, the Company issued $201,250 of convertible senior subordinated notes due October 1, 2026 bearing interest at a fixed rate of 2.625% (“Convertible Notes”). In October 2007, the Company delivered a notice to holders of its Convertible Notes to the effect that, for at least 20 trading days during the 30 consecutive trading days preceding September 30, 2007, the closing price of the Company’s common stock was greater than or equal to 130% of the conversion price of such notes on the last trading day. Under the terms of the Convertible Notes, the increase in the Company’s stock price triggered a provision, which gave holders of the notes a put option through December 31, 2007. Accordingly, the balance sheet classification of the notes will be short term for as long as the put option remains in effect.

On October 15, 2007, the Company amended its existing amended and restated credit agreement with its lenders to add a sublimit of $200,000 for foreign currency borrowings and amend and eliminate other certain terms and covenants.

Long-term debt consists of the following:

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:

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8. INCOME TAXES

Effective April 1, 2007, the Company adopted FIN 48, Accounting for Uncertainty in Income Taxes. The cumulative effect of adoption of FIN 48 has been recorded as a charge of $291 to retained earnings, an increase of $66 to net deferred income tax liabilities and an increase of $225 to income taxes payable as of April 1, 2007.

In conjunction with the adoption of FIN 48, the Company has classified uncertain tax positions as non-current income tax liabilities unless expected to be paid in one year. Penalties and tax-related interest expense are reported as a component of income tax expense. As of September 30, 2007 and April 1, 2007, the total amount of accrued income tax-related interest and penalties included in the Consolidated Balance Sheets was $265 and $174, respectively.

As of September 30, 2007 and April 1, 2007, the Company was subject to examination in a state jurisdiction for the fiscal years ended March 31, 2004 through March 31, 2006, none of which was individually material. The Company has filed appeals in a state jurisdiction related to fiscal years ended March 31, 1999 through March 31, 2003. The Company believes appropriate provisions for all outstanding issues have been made for all jurisdictions and all open years.

As of September 30, 2007 and April 1, 2007, the total amount of unrecognized tax benefits was $2,821 and $2,534, of which $2,468 and $2,181 would impact the effective tax rate, if recognized.

With few exceptions, the Company is no longer subject to U.S. federal income tax examinations for fiscal years ended before March 31, 2005, state or local examinations for fiscal years ended before March 31, 2004, or foreign income tax examinations by tax authorities for fiscal years ended before March 31, 2006.

9. GOODWILL

The following is a summary of the changes in the carrying value of goodwill from March 31, 2007 through September 30, 2007:

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10. SEGMENTS

The Company is organized based on the products and services that it provides. Under this organizational structure, the Company has two reportable segments:  the Aerospace Systems Group and the Aftermarket Services Group. The Company evaluates performance and allocates resources based on operating income of each reportable segment. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies (see Note 2). Each segment has a president and controller who manage their respective segment. The segment president reports directly to the President and CEO of the Company, the Chief Operating Decision Maker (“CODM”), as defined in SFAS No. 131, Disclosure about Segments of an Enterprise and Related Information. The segment presidents maintain regular contact with the CODM to discuss operating activities, financial results, forecasts and plans for the segment. The segment controllers have dual reporting responsibilities, reporting to both their segment president as well as to the Corporate Controller. The Company’s CODM evaluates performance and allocates resources based upon review of segment information. The CODM utilizes operating income as a primary measure of profitability.

At September 30, 2007, our Aerospace Systems segment consisted of 33 operating locations, and the Aftermarket Services segment consisted of 17 operating locations.

The Aerospace Systems segment consists of the Company’s operations which manufacture products primarily for the aerospace OEM market. The Aerospace Systems’ operations design and engineer mechanical and electromechanical controls, such as hydraulic systems and components, main engine gearbox assemblies, accumulators and mechanical control cables. The Aerospace Systems’ revenues are also derived from stretch forming, die forming, milling, bonding, machining, welding and assembly and fabrication of various structural components used in aircraft wings, fuselages and other significant assemblies. Further, the segment’s operations also design and manufacture composite assemblies for floor panels, environmental control system ducts and non-structural cockpit components. These products are primarily sold to various aerospace OEMs on a global basis.

The Aftermarket Services segment consists of the Company’s operations that provide maintenance, repair and overhaul services to both commercial and military markets on components and accessories manufactured by third parties. Maintenance, repair and overhaul revenues are derived from services on auxiliary power units, airframe and engine accessories, including constant-speed drives, cabin compressors, starters and generators, and pneumatic drive units. In addition, the Aftermarket Services’ operations repair and overhaul thrust reversers, nacelle components and flight control surfaces. The Aftermarket Services’ operations also perform repair and overhaul services, and supply spare parts for various types of cockpit instruments and gauges for a broad range of commercial airlines on a worldwide basis.

Segment operating income is total segment revenue reduced by operating expenses identifiable with that segment. Corporate includes general corporate administrative costs and any other costs not identifiable with one of the Company’s segments.

The Company does not accumulate net sales information by product or service or groups of similar products and services, and therefore the Company does not disclose net sales by product or service because to do so would be impracticable.

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Selected financial information for each reportable segment is as follows:

During the three months ended September 30, 2007 and 2006, the Company had international sales of $58,166 and $50,351, respectively. During the six month period ended September 30, 2007 and 2006, the Company had international sales of $114,347 and $99,909, respectively.

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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.)

OVERVIEW

We are a major supplier to the aerospace industry and have two operating segments: (i) Triumph Aerospace Systems Group, whose companies design, engineer and manufacture a wide range of proprietary and build to print components, assemblies and systems for the global aerospace OEM market; and (ii) Triumph Aftermarket Services Group, whose companies serve aircraft fleets, notably commercial airlines, the U.S. military and cargo carriers, through the maintenance, repair and overhaul services of aircraft components and accessories manufactured by third parties.

Financial highlights for the second quarter of fiscal 2008 include:

•                  Net sales for the second quarter of fiscal 2008 increased 26.1% to $279.8 million

•                  Operating income in the second quarter of fiscal 2008 increased 34.9% to $31.8 million

•                  Net income for the second quarter of fiscal 2008 increased 36.6% to $17.2 million

•                  Backlog increased 14% over the prior year to $1,179.2 million

For the quarter ended September 30, 2007, net sales totaled $279.8 million, a 26.1% increase from last year’s second quarter net sales of $221.8 million. Income from continuing operations for the second quarter of fiscal 2008 increased 40.9% to $18.7 million, or $1.05 per diluted common share, versus $13.3 million, or $0.81 per diluted common share, for the second quarter of the prior year. During the quarter, we generated $15.2 million of cash flow from operating activities.

RESULTS OF OPERATIONS

Quarter ended September 30, 2007 compared to quarter ended September 30, 2006

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Net sales increased by $58.0 million, or 26.1%, to $279.8 million for the quarter ended September 30, 2007 from $221.8 million for the quarter ended September 30, 2006. The acquisitions of the assets and businesses of Allied Aerospace Industries, Inc. and Grand Prairie Accessory Services, LLC, herein referred to as the “2007 Acquisitions,” contributed $15.6 million of the net sales increase. Excluding the effects of the 2007 Acquisitions, organic sales growth was $42.4 million, or 19.1%.

The Aerospace Systems segment benefited primarily from increased sales to our OEM customers driven by increased aircraft build rates, while the increase in sales for our Aftermarket Services segment was the result of increased demand for our services as a result of growth in global air traffic, the age of existing aircraft and enhanced capabilities.

Segment operating income increased by $8.4 million, or 30.5%, to $36.0 million for the quarter ended September 30, 2007 from $27.5 million for the quarter ended September 30, 2006. Operating income growth was a direct result of margins attained on increased sales volume as described above, improved margins and the contribution of $1.3 million from the 2007 Acquisitions, partially offset by increased costs in litigation, research and development, payroll and healthcare, and amortization associated with the 2007 Acquisitions.

Corporate general and administrative expenses increased by $0.2 million, or 4.3%, to $4.1 million for the quarter ended September 30, 2007 from $3.9 million for the quarter ended September 30, 2006, primarily due to recognition of stock-based compensation and increased bonus accruals offset by insurance reimbursements related to product liability claims.

Interest expense and other increased by $0.5 million, or 15.0%, to $3.6 million for the quarter ended September 30, 2007 compared to $3.1 million for the prior year period. This increase was due to higher average borrowings outstanding and amortization of debt issuance costs, partially offset by lower interest on our convertible notes issued in September 2006 as compared to the previously outstanding Class A Senior Notes and Class B Senior Notes.

The effective income tax rate for the quarter ended September 30, 2007 was 33.8% compared to 35.3% for the quarter ended September 30, 2006. The decrease in the tax rate was primarily due to the retroactive reinstatement of the research and experimentation tax credit in December 2006. Accordingly, the quarter ended September 30, 2006 did not include the benefit from the research and experimentation tax credit.

Business Segment Performance

The Aerospace Systems segment consists of the Company’s operations which manufacture products primarily for the aerospace OEM market. The Aerospace Systems operations design and engineer mechanical and electromechanical controls, such as hydraulic systems, main engine gearbox assemblies, accumulators and mechanical control cables. The Aerospace Systems revenues are also derived from stretch forming, die forming, milling, bonding, machining, welding and assembly and fabrication of various structural components used in aircraft wings, fuselages and other significant assemblies. Further, the segment’s operations also manufacture composite assemblies for floor panels, environmental control system ducts and non-structural cockpit components. These products are sold to various aerospace OEMs on a global basis.

The Aftermarket Services segment consists of the Company’s operations that provide maintenance, repair and overhaul services to both commercial and military markets on components and accessories manufactured by third parties. Maintenance, repair and overhaul revenues are derived from services on auxiliary power units, airframe and engine accessories, including constant-speed drives, cabin compressors, starters and generators, and pneumatic drive units. In addition, the Aftermarket Services operations repair and overhaul thrust reversers, nacelle components and flight control surfaces. The Aftermarket Services operations also perform repair and overhaul services, and supply spare parts, for various types of cockpit instruments and gauges for a broad range of commercial airlines on a worldwide basis.

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Business Segment Performance — Three months ended September 30, 2007 compared to three months ended September 30, 2006

Aerospace Systems: The Aerospace Systems segment net sales increased by $42.0 million, or 23.5%, to $220.5 million for the quarter ended September 30, 2007 from $178.5 million for the quarter ended September 30, 2006. The increase was primarily due to increased sales to our OEM customers of $35.1 million driven by increased aircraft build rates and the net sales contributed from the acquisition of the assets and business of Allied Aerospace Industries, Inc. (now Triumph Aerospace Systems – Newport News).

Aerospace Systems segment operating income increased by $5.8 million, or 22.9%, to $31.1 million for the quarter ended September 30, 2007 from $25.3 million for the quarter ended September 30, 2006. Operating income increased primarily due to margins attained on increased sales volume as described above, partially offset by increases in staffing, litigation costs and increased investments in research and development costs.

Aftermarket Services: The Aftermarket Services segment net sales increased by $16.0 million, or 36.4%, to $60.1 million for the quarter ended September 30, 2007 from $44.0 million for the quarter ended September 30, 2006. This increase was due to the sales increase associated with the acquisition of the assets and business of Grand Prairie Accessory Services, LLC (now Triumph Accessory Services – Grand Prairie, Inc.), and an increase in same store sales of $7.3 million due to new customers and products, growth in global commercial air traffic and U.S. military maintenance requirements resulting in increased demand for repair and overhaul of auxiliary power units and the brokering of similar units.

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Aftermarket Services segment operating income increased by $2.6 million, or 117.7%, to $4.8 million for the quarter ended September 30, 2007 from $2.2 million for the quarter ended September 30, 2006. Operating income increased primarily due to margins attained on increased sales volume, improved margins and the contribution from the acquisition of Triumph Accessory Services — Grand Prairie, Inc. partially offset by increases in payroll and depreciation and amortization expenses.

Six months ended September 30, 2007 compared to six months ended September 30, 2006