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thank you
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a Triumph group is a group of 42
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companies and 54 locations around the
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world
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predominantly in the U.S that designs
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manufacturers and repairs and overhauls
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components for aircraft
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and produces assemblies and
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sub-assemblies for the large aircraft
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manufacturers yeah but 43 percent of our
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business is military and about 45
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percent of our business is a commercial
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aircraft the balance is summon space and
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some in Business Jet and Regional Jet
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well right now it hasn't affected our
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business because we're working off a
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relatively large backlog in the
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commercial uh aircraft business on
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you know people uh like Boeing who had
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strong backlog in the 737 New Generation
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aircraft
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uh we do business as well with Airbus
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Etc Boeing is by far our largest
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customer by about 23 percent of our
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business that's both in the Military and
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Commercial end
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but uh I think that as the passenger
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miles and the cargo miles flown have
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decreased over the last uh
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year to year and a half new orders on
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aircraft uh have not been coming in as
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fast in addition to that the delay of
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the 787
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which is a very uh Dreamliner the
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futuristic type aircraft very light much
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more efficient
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I think will uh has affected our
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business because it's now a little
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delayed however
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I would suggest that halfway through
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2010 maybe toward early 2011 that will
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hold up the air the commercial end of
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the business because of the production
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of that aircraft
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a very much harder question to answer
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because the uncertainty of the defense
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budget and the production of certain
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aircrafts such as the C-17 as of a year
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ago the C-17
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was a plane that was disappearing or
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less than a year ago actually was
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disappearing from the you know military
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budget
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today India is talking about ordering 10
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more which is a Year's worth of C-17
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uh the rotocraft business has been
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excellent both on a repair and overhaul
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basis and on a new build
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many of our customers Boeing Sikorsky
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Bell
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uh the rotocraft business is excellent
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and in the war effort the V-22 which
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happens to be the largest chipset value
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in our business per aircraft has been
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doing very very well in production and
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Performing very well in Afghanistan and
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Iraq
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so I think the future is more of our
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problem based on the fact on what the
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defense budget will be and where they'll
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go with all these different aircraft
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over the last couple of years it hasn't
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affected us in a great respect because
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we've gained market share
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and uh
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when we went public for example in 1993
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in 1996
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a military business was four percent of
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our business now it's 43 as I said
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before so our military has strengthened
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immensely so uh really hasn't affected
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us too much in the last year or so
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they they do and that gives us an
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opportunity to repair an overhaul our
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primary business and the repair and
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overhaul is third-party components
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auxiliary power units constant speed
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drives things of that nature plus some
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of the products that we produce
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ourselves actuation equipment hydraulic
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assemblies and the like
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and that gives us the opportunity to
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repair and overhaul them the
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rotocraft on the other hand
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um
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that becomes more of an engine repair
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and overhaul which we that's the only
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product we don't we don't repair an
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overhaul main engine components
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and the
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the business of repairing and
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overhauling helicopter parts and parts
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of helicopters is done
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on site in Afghanistan in Iraq
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uh we think that the build rate on a
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rotocraft will continue to grow because
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a lot of those helicopters
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uh won't come home if we come if we get
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out of Iraq and we get out of
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Afghanistan
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that equipment will stay there
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and we'll have an opportunity to replace
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that
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generally speaking the margins have a
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tendency uh when we're doing uh repair
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and overhaul on our own products uh by
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our own I mean our own proprietary
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designs that come back into our shop for
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repair and overall the margins have a
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tendency of being higher
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in one of our divisions where we do
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repair and overhaul of third-party
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components defined as we repair
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constant speed drives that are done by
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Sun strand
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or apus that are done by Honeywell
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since we have to buy parts from
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sunstrand and Honeywell our margins have
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a tendency of being lower in that
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business or it's on an overall basis or
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new equipment
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uh depending on what that equipment is
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because we have so many companies
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involved our new equipment in the long
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run is probably a little higher margins
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uh and the margins and the after a
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market business in our proprietary
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business is the probably the highest
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margin of all
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and the margins on the aftermarket where
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it's third-party components is the
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lowest of our margins
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uh on an overall basis it's really not
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that far apart when you put the
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aftermarket business and the OEM
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business that we have
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based on the Dynamics that I just
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described you know
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first of all about 25 percent of our
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businesses
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foreign business that includes business
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we do with Bombardier in Canada we have
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two plants in Mexico
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one we acquired which manufactures
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acoustical and thermal blankets for
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aircraft
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and another were just building
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just north of Mexico City
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to do first operation Machining
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and first operation efforts for our own
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companies
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simply on the basis of low-cost labor
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I know
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uh the pressure is always on to produce
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lower cost
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but same technological advantage and
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same quality
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and the battle becomes when we do that
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with our customers
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customers say to us well you built a
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place in Mexico for low cost later that
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means you can drop your price
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and our answer to that is you didn't you
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didn't invest the 25 million dollars we
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did
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so sometimes it goes over well sometimes
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it doesn't but uh but we're operating in
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Mexico we built a plant in Thailand
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specifically to service the Asian market
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on the repair and overhaul Market of
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nacelle's thrust reversers and apus
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and we have acquired one to five
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companies in Europe
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all in Western Europe
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we have one in Eastern Europe
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which again is a low cost uh
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production area
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but primarily we're in the U.S all but
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those locations I just mentioned are in
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the U.S
