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TransDigm Group Q2 2014 net sales up 27%

TransDigm Group Inc. (NYSE: TDG) reported results for the second quarter ended March 29, 2014.

Net sales for the quarter rose 26.9 percent to USD590.8m from USD465.6m in the comparable quarter a year ago. Organic net sales grew approximately 6.1 percent. The contribution from the acquisitions of Aerosonic, Airborne, Arkwin and Whippany Actuation accounted for the balance of the increase in net sales.

Net income for the quarter rose 33.0 percent to USD90.4m, or USD1.49 per share, compared to USD67.9m, or USD1.25 per share, in the comparable quarter a year ago. The prior quarter included one-time costs attributable to the refinancing of our senior secured credit facility in February 2013 of USD20.5m, net of tax, or USD0.38 per share. The remainder of the increase in net income primarily reflects the growth in net sales described above partially offset by higher interest expense and acquisition-related costs.

The increase in interest expense was primarily due to an increase in outstanding borrowings from USD4.3bn to USD5.7bn primarily to fund the USD22.00 per share dividend paid in July 2013. The current quarter included acquisition-related costs of USD10.9m, net of tax, or USD0.19 per share. The comparable quarter a year ago reflected acquisition-related costs of USD1.7m, net of tax, or USD0.02 per share.

Earnings per share in the current quarter were reduced by USD0.10 per share representing dividend equivalent payments of USD5.5m related to the accelerated vesting of 0.2m stock options under the “market sweep” provision for options granted in November 2011.

TransDigm Group, through its wholly-owned subsidiaries, is a leading global designer, producer and supplier of highly engineered aircraft components for use on nearly all commercial and military aircraft in service today.


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