This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Transdigm Group's CEO Discusses F1Q12 Results - Earnings Call Transcript

About 55% of our revenue and a much higher percent of our EBITDA comes from aftermarket sales. Aftermarket revenues have historically produced a higher gross margin and provided relative stability in the downtimes. Because of our uniquely high EBITDA margins, typically approaching 50%, and relatively low capital expenditure requirements, about 2% or less of revenue, TransDigm has year in and year out generated strong free cash flow. We pay close attention to our capital structure and view it as another means to create shareholder value. As you know, we have been in the past and continue to be willing to lever up when we either see good opportunity or view our leverage as sub-optimum for value creation. We typically begin to deleverage pretty quickly.

We have a well-proven, value-based operating strategy, focused around what we refer to as our three value drivers; new business development, continual cost improvement and value-based pricing. We stick to these concepts as the core of our operating management methodology. This consistent approach has worked for us through up and down markets and has allowed us to continually improve and increase the intrinsic value of our business while steadily investing in new business and platform positions.

We have also been successful in regularly acquiring and integrating businesses. We acquire proprietary aerospace products with significant aftermarket content. We've been able to acquire and improve proprietary aerospace businesses through all phases of the cycle. Through our consistent focus on our operating value drivers, a clear acquisition strategy, and close attention to our capital structure, we've been able to create intrinsic value for our shareholders for many years through up and down markets. This just completed quarter was again active.

In addition to all the operating activity, we closed on Harco $83 million. We also announced an agreement to buy AmSafe for about $750 million. The AmSafe price includes tax benefits over the next 10 years to TransDigm in the range of $70 million on a net present value basis. The tax benefits are front-end weighted to a certain degree.

Read the rest of this transcript for free on seekingalpha.com

3 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG

Markets

DOW 18,052.22 -73.90 -0.41%
S&P 500 2,111.58 -9.21 -0.43%
NASDAQ 5,081.8990 -16.0770 -0.32%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs