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TransDigm Group Incorporated Message Board

  • bluecheese4u bluecheese4u Nov 15, 2012 9:24 AM Flag

    TransDigm Group Reports Fiscal Fourth Quarter and Year-End Results

    TransDigm Group Reports Fiscal Fourth Quarter and Year-End Results

    Cleveland, Ohio, November 15, 2012/PRNewswire via COMTEX/ — TransDigm Group Incorporated (NYSE: TDG), a leading global designer, producer and supplier of highly engineered aircraft components, today reported results for the fourth quarter and fiscal year ended September 30, 2012.

    Highlights for the quarter and fiscal year include:



    • Fourth quarter net sales of $462.6 million, up 34.9% from $343.0 million;



    • Fourth quarter EBITDA As Defined of $215.1 million, up 25.1% from $171.9 million;



    • Fiscal 2012 net sales of $1,700.2 million, up 41.0% from $1,206.0 million;



    • Fiscal 2012 net income from continuing operations of $325.0 million, up 113.5% from $152.2 million;



    • Fiscal 2012 earnings per share of $5.97, up 88.0% from $3.17;



    • Fiscal 2012 EBITDA As Defined of $809.0 million, up 37.2% from $589.9 million; and



    • Fiscal 2012 adjusted earnings per share of $6.67, up 48.9% from $4.48.

    Net sales for the quarter rose 34.9% to $462.6 million from $343.0 million in the comparable quarter a year ago. Organic net sales grew approximately 6.7%. The favorable contribution from the acquisitions of Schneller, Harco, AmSafe and Aero-Instruments accounted for the balance of the sales increase.

    Net income from continuing operations for the quarter rose 36.6% to $87.9 million, or $1.63 per share, compared to $64.3 million, or $1.20 per share, in the comparable quarter a year ago. The increase in net income primarily reflects the growth in net sales described above and lower acquisition-related costs partially offset by a higher effective tax rate and higher interest expense. The current quarter included acquisition-related and non-cash compensation costs of $5.1 million, net of tax, or $0.09 per share. The comparable quarter a year ago reflected acquisition-related, refinancing and non-cash compensation costs of $12.9 million, net of tax, or $0.25 per share.

    Net income from discontinued operations in the comparable quarter a year ago was $3.1 million, or $0.06 per share.

    Adjusted net income for the quarter rose 20.4% to $93.0 million, or $1.72 per share, from $77.2 million, or $1.45 per share, in the comparable quarter a year ago.

    EBITDA for the quarter increased 30.7% to $209.0 million from $160.0 million for the comparable quarter a year ago. EBITDA As Defined for the period increased 25.1% to $215.1 million compared with $171.9 million in the quarter a year ago. EBITDA As Defined as a percentage of net sales for the quarter was 46.5%.

    As previously announced on October 25, 2012, TransDigm entered into an agreement to acquire the pump & engine control systems business of Goodrich, a subsidiary of United Technologies Corporation, for approximately $236 million in cash. The acquisition, subject to regulatory approvals and other customary closing conditions, is expected to close late in the current calendar year or early in 2013.

    Year-to-Date Results

    Fiscal 2012 net sales rose 41.0% to $1,700.2 million from $1,206.0 million in the comparable period last year. Organic sales growth was 11.8%. The acquisitions of McKechnie, Talley, Schneller, Harco, AmSafe and Aero-Instruments accounted for the balance of the sales increase.

    Fiscal 2012 net income from continuing operations increased 113.5% to $325.0 million, or $5.97 per share, from $152.2 million, or $2.80 per share. Net income from continuing operations in the prior year included one-time costs of $48.1 million, net of tax, or $0.90 per share, attributable to the refinancing of the Company’s capital structure in connection with the acquisition of McKechnie in the first quarter of fiscal 2011. The remainder of the increase in net income from continuing operations primarily reflects the growth in net sales partially offset by higher interest expense. Net income from continuing operations for the fiscal year ended September 30, 2012 includes acquisition–related and non-cash compensation costs of $34.7 million, net of tax, or $0.64 per share. In addition to the one-time costs attributable to the refinancing noted above, the net income from continuing operations in the comparable period a year ago included acquisition-related and non-cash compensation costs of $38.6 million, net of tax, or $0.73 per share.

    Net income from discontinued operations in the comparable period a year ago was $19.9 million, or $0.37 per share.

    Fiscal 2012 adjusted net income rose 50.6% to $359.7 million, or $6.67 per share, from $238.9 million, or $4.48 per share, in the comparable period a year ago.

    Fiscal 2012 EBITDA increased 61.6% to $768.0 million from $475.1 million in the comparable period a year ago. EBITDA As Defined for the period, increased 37.2% to $809.0 million compared with $589.9 million in the comparable period a year ago. EBITDA As Defined as a percentage of net sales for the period was 47.6%.

    “We are pleased with the operating results for both the fourth quarter and full fiscal year,” stated W. Nicholas Howley, TransDigm Group’s Chairman and Chief Executive Officer. “Despite growing macro economic uncertainty, we achieved almost 50% growth in adjusted earnings per share for the full fiscal year. This increase was driven by 41% sales growth derived from both our recent acquisitions and organic growth across our market channels. The ongoing strong year-to-

    date EBITDA As Defined margin was again achieved in spite of approximately 3 margin point dilution from acquisitions. This financial performance continues to reflect the ability of our proven operating strategy to consistently create real intrinsic value for our shareholders.”

    He continued, “In fiscal 2012, we completed the acquisition of three proprietary aerospace component businesses for approximately $870 million. Additionally, we raised approximately $500 million in debt to finance the acquisition of AmSafe in February 2012 and raised $700 million in October 2012 to pay a special dividend in November 2012. We ended the year with approximately $440 million in cash and approximately $300 million of capacity on our revolving credit facility as well as additional borrowing capacity under our credit agreement. This strong liquidity provides us with the flexibility to readily support continued growth and pursue acquisition opportunities.”

    Please see the attached tables for a reconciliation of net income to EBITDA, EBITDA As Defined, and adjusted net income; a reconciliation of net cash provided by operating activities to EBITDA and EBITDA As Defined, and a reconciliation of earnings per share to adjusted earnings per share for the periods discussed in this press release.

    Fiscal 2013 Outlook

    Assuming no acquisition activity and based upon current market conditions, the Company expects fiscal 2013 financial performance to be as follows:



    • Net sales are anticipated to be in the range of $1,800 million to $1,900 million compared with $1,700 million in fiscal 2012;




    • EBITDA As Defined is anticipated to be in the range of $864 million to $912 million compared with $809 million in fiscal 2012;




    • Net income is anticipated to be in the range of $336 million to $360 million compared with $325 million in fiscal 2012;




    • Earnings per share are expected to be in the range of $5.44 to $5.88 per share based upon weighted average shares outstanding of 54.5 million compared with $5.97 per share in fiscal 2012; and




    • Adjusted earnings per share are expected to be in the range of $6.54 to $6.98 per share compared with $6.67 per share in fiscal 2012.


    The fiscal 2013 guidance is based upon the following market assumptions:



    • In the commercial OEM market, we estimate revenue to be up in the low-single digit percentage range.




    • In the commercial aftermarket, we are assuming revenue growth to be in the 5-10% range.




    • In the defense market, absent any significant impact from sequestration, we estimate revenues to be modestly down.


    Conference Call

    TransDigm Group will host a conference call for investors and security analysts on November 15, 2012, beginning at 11:00 a.m., Eastern

    secDOTgov/Archives/edgar/data/1260221/000119312512471615/d439312dex991.htm

 
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