10-K/APeriod: FY2009

TransDigm Group INC Annual Report (Amendment), Year Ended Sep 30, 2009

Filed February 10, 2010For Securities:TDG

Summary

TransDigm Group Incorporated (TDG) filed an Amendment No. 1 to its Form 10-K for the fiscal year ended September 30, 2009, primarily to restate its earnings per share (EPS) calculations. This amendment reflects the adoption of the two-class method for calculating EPS to account for 'participating securities,' such as vested stock options with dividend rights. While the company initially reported effective internal controls, this amendment identifies a material weakness related to the EPS calculation, leading to a revised conclusion that internal controls were not effective as of the fiscal year-end. Financially, the company demonstrated consistent revenue growth over the preceding five fiscal years, culminating in $761.6 million in net sales for FY 2009. Profitability also saw a strong upward trend, with net income reaching $162.9 million in FY 2009, up significantly from $34.7 million in FY 2005. The company's acquisition strategy is evident, with numerous acquisitions listed throughout the period, contributing to its growth. Despite the material weakness identified in internal controls, the underlying financial performance appears robust, with strong cash flow from operations and a growing equity base.

Financial Highlights

48 data points
Beta

Revenue

$761.55M

56.4% Gross Margin

Net Income

$162.90M

21.4% Net Margin

EPS (Diluted)

$3.10

Total Assets

$2.45B

Cash & Equivalents

$190.17M

Free Cash Flow

$183.96M

Financial Statements
Beta
Revenue$761.55M
Cost of Revenue$332.21M
Gross Profit$429.35M
R&D Expenses$12.60M
SG&A Expenses$80.02M
Operating Expenses$93.95M
Operating Income$335.40M
Net Income$162.90M
EPS (Basic)$3.10

Key Highlights

  • 1The amendment restates basic and diluted EPS to incorporate the two-class method, recognizing 'participating securities' like vested stock options.
  • 2A material weakness in internal controls over financial reporting was identified concerning the EPS calculation methodology.
  • 3Net sales grew from $374.3 million in fiscal year 2005 to $761.6 million in fiscal year 2009.
  • 4Net income saw substantial growth, increasing from $34.7 million in fiscal year 2005 to $162.9 million in fiscal year 2009.
  • 5The company has actively pursued a growth strategy through numerous acquisitions of businesses and product lines across the fiscal years 2005-2009.
  • 6EBITDA As Defined showed a consistent upward trend, reaching $374.7 million in fiscal year 2009.
  • 7The company reports strong cash flows from operating activities, which increased significantly to $197.1 million in fiscal year 2009.

Frequently Asked Questions

This amendment (10-K/A) is filed to restate TransDigm Group's basic and diluted earnings per share (EPS) and weighted average shares outstanding. This restatement is due to the adoption of the two-class method of calculating EPS, which accounts for 'participating securities' like vested stock options with dividend rights, a change from the previously used treasury stock method.

Yes, the company identified a material weakness in its internal control over financial reporting as of September 30, 2009, specifically related to the application of the two-class method for calculating basic and diluted earnings per share. This led to a revision of their previously reported effective internal control assessment.

TransDigm has shown a strong positive trend in its financial performance. Net sales increased from $374.3 million in FY 2005 to $761.6 million in FY 2009. Net income also grew significantly, from $34.7 million in FY 2005 to $162.9 million in FY 2009. Key non-GAAP measures like EBITDA As Defined also show consistent growth, indicating robust operational performance.

TransDigm's growth strategy appears to be heavily driven by acquisitions. The filing lists numerous acquisitions of businesses and product lines completed between fiscal years 2005 and 2009, which have been accounted for using the purchase method and have been integrated into the company's consolidated financial statements.