What are TransDigm's preliminary financial results for the fourth quarter and full fiscal year 2019?

For the thirteen-week period ended September 30, 2019, TransDigm preliminarily estimates net sales of $1,525 million to $1,545 million, income from continuing operations of $300 million to $310 million, and EBITDA As Defined of $695 million to $705 million. For the full fiscal year ended September 30, 2019, preliminary estimates include net sales of $5,205 million to $5,225 million, income from continuing operations of $825 million to $835 million, and EBITDA As Defined of $2,405 million to $2,415 million.

How do these preliminary results compare to the previous year?

For the fourth quarter, the preliminary results show significant year-over-year growth in net sales (from $1,049 million in Q4 2018) and income from continuing operations (from $230 million in Q4 2018). For the full fiscal year, net sales also show substantial growth (from $3,811 million in FY 2018), but income from continuing operations is slightly lower than the $962 million reported in FY 2018.

What is the impact of the divested businesses on the reported results?

The financial results for the Esterline Interface Technology group of businesses and the Souriau-Sunbank Connection Technologies business are reflected as discontinued operations. For the full fiscal year 2019, approximately $297 million in revenue and $63 million in EBITDA As Defined have been excluded from continuing operations and will be reported under discontinued operations.

What is the purpose of the proposed offering of senior subordinated notes?

TransDigm is proposing to offer senior subordinated notes. The net proceeds from this offering are intended to be used to redeem all of its outstanding 6.000% Senior Subordinated Notes due 2022. Any remaining proceeds will be used for general corporate purposes, which may include future acquisitions, dividends, or stock repurchases.

TDG 8-K: Earnings & Results & Regulation FD

Summary

TransDigm Group Incorporated (TDG) filed an 8-K on October 29, 2019, providing preliminary financial results for the thirteen-week and full fiscal year periods ended September 30, 2019. The company estimates significant year-over-year growth in net sales and income from continuing operations for the fourth quarter, with preliminary net sales projected between $1,525 million and $1,545 million, a substantial increase from the prior year's $1,049 million. Similarly, income from continuing operations is estimated to be between $300 million and $310 million, up from $230 million in the prior year period. For the full fiscal year, TransDigm expects net sales to reach $5,205 million to $5,225 million, also a significant increase from $3,811 million in fiscal year 2018. However, income from continuing operations for the full year is projected to be $825 million to $835 million, a slight decrease compared to $962 million in fiscal year 2018. These preliminary results exclude the financial impact of divested businesses, which will be reported as discontinued operations. The company also disclosed information regarding a proposed offering of senior subordinated notes to redeem existing debt and for general corporate purposes.

Key Highlights

1Preliminary Q4 2019 net sales estimated at $1,525M - $1,545M, a significant increase from $1,049M in Q4 2018.
2Preliminary Q4 2019 income from continuing operations estimated at $300M - $310M, up from $230M in Q4 2018.
3Preliminary FY 2019 net sales estimated at $5,205M - $5,225M, a substantial increase from $3,811M in FY 2018.
4Preliminary FY 2019 income from continuing operations estimated at $825M - $835M, slightly down from $962M in FY 2018.
5Divested businesses (Esterline Interface Technology and Souriau-Sunbank) treated as discontinued operations, excluding $297M in revenue and $63M in EBITDA for FY 2019.
6Company is undertaking a confidential offering of senior subordinated notes, with proceeds intended for redemption of outstanding notes and general corporate purposes, potentially including future acquisitions.
7Preliminary financial results are unaudited and subject to finalization.

TransDigm Group INC 8-K Report, Financial Results (Oct 29, 2019)

Summary

Key Highlights

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