Tuesday, July 22, 2014 Last update: 4:03 AM
FreshNews.com - All Company Technology News Since 1996

TransDigm Group Reports Fiscal 2014 Second Quarter Results

Companies mentioned in this article: TransDigm Group Incorporated

CLEVELAND, May 6, 2014 /PRNewswire/ -- TransDigm Group Incorporated (NYSE: TDG), a leading global designer, producer and supplier of highly engineered aircraft components, today reported results for the second quarter ended March 29, 2014.

Highlights for the second quarter include:

    --  Net sales of $590.8 million, up 26.9% from $465.6 million;
    --  EBITDA As Defined of $263.0 million, up 19.9% from $219.3 million;
    --  Net income of $90.4 million, up 33.0% from $67.9 million;
    --  Earnings per share of $1.49, up 19.2% from $1.25;
    --  Adjusted earnings per share of $1.87, up 7.5% from $1.74; and
    --  Upward revision to fiscal 2014 financial guidance.

Net sales for the quarter rose 26.9% to $590.8 million from $465.6 million in the comparable quarter a year ago. Organic net sales grew approximately 6.1%. 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% to $90.4 million, or $1.49 per share, compared to $67.9 million, or $1.25 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 $20.5 million, net of tax, or $0.38 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 $4.3 billion to $5.7 billion primarily to fund the $22.00 per share dividend paid in July 2013. The current quarter included acquisition-related costs of $10.9 million, net of tax, or $0.19 per share. The comparable quarter a year ago reflected acquisition-related costs of $1.7 million, net of tax, or $0.02 per share.

Earnings per share in the current quarter were reduced by $0.10 per share representing dividend equivalent payments of $5.5 million related to the accelerated vesting of 0.2 million stock options under the "market sweep" provision for options granted in November 2011.

Adjusted net income for the quarter rose 12.3% to $106.6 million, or $1.87 per share, from $95.0 million, or $1.74 per share, in the comparable quarter a year ago. The adjusted earnings per share increase of 7.5% was lower than the increase in adjusted net income of 12.3% as a result of higher weighted average shares of 57.1 million, up from 54.5 million in the prior year period.

EBITDA for the quarter increased 35.6% to $244.4 million from $180.2 million for the comparable quarter a year ago. EBITDA As Defined for the period increased 19.9% to $263.0 million compared with $219.3 million in the quarter a year ago. EBITDA As Defined as a percentage of net sales for the quarter was 44.5%.

"We are pleased with our operating results for both the fiscal second quarter and year-to-date periods," stated W. Nicholas Howley, TransDigm Group's Chairman and Chief Executive Officer. "Underlying trends supporting our commercial aerospace markets continue to be positive with ongoing recovery in the commercial aftermarket and continued growth in commercial OEM. After adjusting for dilution of almost three margin points from the acquisitions completed in fiscal 2013 and first half of fiscal 2014, our year-to-date EBITDA As Defined margin was approximately 48%, an improvement of approximately one margin point over the prior year."

As previously reported on March 6, 2014, TransDigm Group acquired Elektro-Metall Export GmbH (EME) for approximately $49.5 million. EME manufactures proprietary, highly engineered aerospace electromechanical actuators, electrical and electromechanical components and assemblies primarily for commercial aircraft, helicopters and other specialty applications.

Year-to-Date Results

Net sales for the twenty-six week period ended March 29, 2014 rose 25.0% to $1,120.1 million from $896.0 million in the comparable period last year. Organic net sales grew approximately 7.5%. 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 twenty-six week period increased 24.2% to $176.5 million, or $2.93 per share, compared with $142.1 million, or $1.91 per share, in the comparable period last year. The prior year included one-time costs attributable to the refinancing of our senior secured credit facility in February 2013 of $20.5 million, net of tax, or $0.38 per share. 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 $4.3 billion to $5.7 billion primarily to fund the $22.00 per share dividend paid in July 2013.The twenty-six week period ended March 29, 2014 included acquisition-related costs of $16.8 million, net of tax, or $0.29 per share. The comparable period a year ago reflected acquisition-related costs of $5.0 million, net of tax, or $0.09 per share.

Earnings per share were reduced in both fiscal 2014 and 2013 by $0.17 per share and $0.70 per share respectively, representing dividend equivalent payments made during each fiscal year.

Adjusted net income for the twenty-six week period rose 13.6% to $201.5 million, or $3.53 per share, from $177.3 million, or $3.26 per share, in the comparable period a year ago. The adjusted earnings per share increase of 8.3% was lower than the increase in adjusted net income of 13.6% as a result of higher weighted average shares of 57.0 million, up from 54.5 million in the prior year period.

EBITDA for the twenty-six week period increased 29.3% to $478.8 million from $370.5 million for the comparable period a year ago. EBITDA As Defined for the period increased 20.6% to $506.5 million compared with $420.2 million in the comparable period a year ago. EBITDA As Defined as a percentage of net sales for the period was 45.2%.

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 2014 Outlook

Mr. Howley continued, "We are increasing the full year fiscal 2014 guidance primarily to reflect the recent acquisition of EME, performance experienced to date and our current expectations for the second half of our fiscal year."

The Company is adjusting full year fiscal 2014 guidance, which assumes no additional acquisitions, as follows:

    --  Net sales are anticipated to be in the range of $2,317 million to $2,367
        million (previously in the range of $2,283 million to $2,343 million)
        compared with $1,924 million in fiscal 2013;
    --  EBITDA As Defined is anticipated to be in the range of $1,046 million to
        $1,068 million (previously in the range of $1,036 million to $1,064
        million) compared with $900 million in fiscal 2013;
    --  Net income is anticipated to be in the range of $380 million to $394
        million (previously in the range of $375 million to $393 million)
        compared with $303 million in fiscal 2013;
    --  Earnings per share are expected to be in the range of $6.33 to $6.57 per
        share (previously in the range of $6.24 to $6.54 per share) compared
        with $2.39 per share in fiscal 2013; and
    --  Adjusted earnings per share are expected to be in the range of $7.46 to
        $7.70 per share (previously in the range of $7.35 to $7.65 per share)
        compared with $6.90 per share in fiscal 2013.

Conference Call
TransDigm Group will host a conference call for investors and security analysts on May 6, 2014, beginning at 11:00 a.m., Eastern Time. To join the call, dial (800) 295-4740 and enter the pass code 52424031. International callers should dial (617) 614-3925 and use the same pass code. A live audio webcast can be accessed online at http://www.transdigm.com. A slide presentation will also be available for reference during the conference call; go to the investor relations page of our website and click on "Presentations."

The call will be archived on the website and available for replay at approximately 2:00 p.m., Eastern Time. A telephone replay will be available for two weeks by dialing (888) 286-8010 and entering the pass code 94379901. International callers should dial (617) 801-6888 and use the same pass code.

About TransDigm Group
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. Major product offerings, substantially all of which are ultimately provided to end-users in the aerospace industry, include mechanical/electro-mechanical actuators and controls, ignition systems and engine technology, specialized pumps and valves, power conditioning devices, specialized AC/DC electric motors and generators, NiCad batteries and chargers, engineered latching and locking devices, rods and locking devices, engineered connectors and elastomers, cockpit security components and systems, specialized cockpit displays, aircraft audio systems, specialized lavatory components, seatbelts and safety restraints, engineered interior surfaces, lighting and control technology and military personnel parachutes and cargo delivery systems.

Non-GAAP Supplemental Information
EBITDA, EBITDA As Defined, EBITDA As Defined Margin, adjusted net income and adjusted earnings per share are non-GAAP financial measures presented in this press release as supplemental disclosures to net income and reported results. TransDigm Group defines EBITDA as earnings before interest, taxes, depreciation and amortization and defines EBITDA As Defined as EBITDA plus certain non-operating items, refinancing costs, acquisition-related costs, transaction-related costs and non-cash charges incurred in connection with certain employee benefit plans. TransDigm Group defines adjusted net income as net income plus purchase accounting backlog amortization expense, effects from the sale on businesses, refinancing costs, acquisition-related costs, transaction-related costs and non-cash charges incurred in connection with certain employee benefit plans. EBITDA As Defined Margin represents EBITDA As Defined as a percentage of net sales. TransDigm Group defines adjusted diluted earnings per share as adjusted net income divided by the total shares for basic and diluted earnings per share. For more information regarding the computation of EBITDA, EBITDA As Defined and adjusted net income and adjusted earnings per share, please see the attached financial tables.

TransDigm Group presents these non-GAAP financial measures because it believes that they are useful indicators of its operating performance. TransDigm Group believes that EBITDA is useful to investors because it is frequently used by securities analysts, investors and other interested parties to measure operating performance among companies with different capital structures, effective tax rates and tax attributes, capitalized asset values and employee compensation structures, all of which can vary substantially from company to company. In addition, analysts, rating agencies and others use EBITDA to evaluate a company's ability to incur and service debt. EBITDA As Defined is used to measure TransDigm Inc.'s compliance with the financial covenant contained in its credit facility. TransDigm Group's management also uses EBITDA As Defined to review and assess its operating performance, to prepare its annual budget and financial projections and to review and evaluate its management team in connection with employee incentive programs. Moreover, TransDigm Group's management uses EBITDA As Defined to evaluate acquisitions and as a liquidity measure. In addition, TransDigm Group's management uses adjusted net income as a measure of comparable operating performance between time periods and among companies as it is reflective of changes in pricing decisions, cost controls and other factors that affect operating performance.

None of EBITDA, EBITDA As Defined, EBITDA As Defined Margin, adjusted net income or adjusted earnings per share is a measurement of financial performance under GAAP and such financial measures should not be considered as an alternative to net income, operating income, earnings per share, cash flows from operating activities or other measures of performance determined in accordance with GAAP. In addition, TransDigm Group's calculation of these non-GAAP financial measures may not be comparable to the calculation of similarly titled measures reported by other companies.

Although we use EBITDA and EBITDA As Defined as measures to assess the performance of our business and for the other purposes set forth above, the use of these non-GAAP financial measures as analytical tools has limitations, and you should not consider any of them in isolation, or as a substitute for analysis of our results of operations as reported in accordance with GAAP. Some of these limitations are:

    --  neither EBITDA nor EBITDA As Defined reflects the significant interest
        expense, or the cash requirements necessary to service interest
        payments, on our indebtedness;
    --  although depreciation and amortization are non-cash charges, the assets
        being depreciated and amortized will often have to be replaced in the
        future, and neither EBITDA nor EBITDA As Defined reflects any cash
        requirements for such replacements;
    --  the omission of the substantial amortization expense associated with our
        intangible assets further limits the usefulness of EBITDA and EBITDA As
        Defined;
    --  neither EBITDA nor EBITDA As Defined includes the payment of taxes,
        which is a necessary element of our operations; and
    --  EBITDA As Defined excludes the cash expense we have incurred to
        integrate acquired businesses into our operations, which is a necessary
        element of certain of our acquisitions.

Because of these limitations, EBITDA and EBITDA As Defined should not be considered as measures of discretionary cash available to us to invest in the growth of our business. Management compensates for these limitations by not viewing EBITDA or EBITDA As Defined in isolation and specifically by using other GAAP measures, such as net income, net sales and operating profit, to measure our operating performance. Neither EBITDA nor EBITDA As Defined is a measurement of financial performance under GAAP, and neither should be considered as an alternative to net income or cash flow from operations determined in accordance with GAAP. Our calculation of EBITDA and EBITDA As Defined may not be comparable to the calculation of similarly titled measures reported by other companies.

Forward-Looking Statements
Statements in this press release that are not historical facts, including statements under the heading "Fiscal 2014 Outlook," are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.Words such as "believe," "may," "will," "should," "expect," "intend," "plan," "predict," "anticipate," "estimate," or "continue" and other words and terms of similar meaning may identify forward-looking statements.

All forward-looking statements involve risks and uncertainties which could affect TransDigm Group's actual results and could cause its actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, TransDigm Group. These risks and uncertainties include but are not limited to: the sensitivity of our business to the number of flight hours that our customers' planes spend aloft and our customers' profitability, both of which are affected by general economic conditions; future terrorist attacks; our reliance on certain customers; the U.S. defense budget and risks associated with being a government supplier; failure to maintain government or industry approvals; failure to complete or successfully integrate acquisitions; our substantial indebtedness; potential environmental liabilities; and other factors. Further information regarding the important factors that could cause actual results to differ materially from projected results can be found in TransDigm Group's Annual Report on Form 10-K and other reports that TransDigm Group or its subsidiaries have filed with the Securities and Exchange Commission. Except as required by law, TransDigm Group undertakes no obligation to revise or update the forward-looking statements contained in this press release.


    Contact:                   Liza Sabol

                               Investor Relations

                               (216) 706-2945

                               ir@transdigm.com



    TRANSDIGM GROUP INCORPORATED

    CONDENSED CONSOLIDATED STATEMENTS OF INCOME

    FOR THE THIRTEEN AND TWENTY-SIX WEEK PERIODS ENDED                                                                                                      Table 1

    MARCH 29, 2014 AND MARCH 30, 2013

    (Amounts in thousands, except per share amounts)

    (Unaudited)
    ----------

                                                       Thirteen Week Periods Ended          Twenty-Six Week Periods Ended
                                                       ---------------------------          -----------------------------

                                                                March 29,                             March 30,                     March 29,            March 30,

                                                                                       2014                                   2013                  2014                2013
                                                                                       ----                                   ----                  ----                ----


    NET SALES                                                                      $590,761                               $465,609            $1,120,083            $896,027


    COST OF SALES                                                                   283,179                                206,299               528,365             398,170
                                                                                    -------                                -------               -------             -------


    GROSS PROFIT                                                                    307,582                                259,310               591,718             497,857


    SELLING AND ADMINISTRATIVE EXPENSES                                              71,488                                 55,463               128,615             110,624

    AMORTIZATION OF INTANGIBLE ASSETS                                                17,600                                  9,735                33,983              20,275
                                                                                     ------                                  -----                ------              ------


    INCOME FROM OPERATIONS                                                          218,494                                194,112               429,120             366,958


    INTEREST EXPENSE - Net                                                           82,289                                 64,094               163,142             126,970

    REFINANCING COSTS                                                                     -                                 30,281                     -              30,281
                                                                                        ---                                 ------                   ---              ------


    INCOME BEFORE INCOME TAXES                                                      136,205                                 99,737               265,978             209,707


    INCOME TAX PROVISION                                                             45,850                                 31,800                89,500              67,600
                                                                                     ------                                 ------                ------              ------


    NET INCOME                                                                      $90,355                                $67,937              $176,478            $142,107
                                                                                    =======                                =======              ========            ========


    NET INCOME (LOSS) APPLICABLE TO COMMON STOCK                                    $84,869                                $67,937              $166,853            $103,977
                                                                                    =======                                =======              ========            ========


    Net earnings per share:

      Basic and diluted                                                               $1.49                                  $1.25                 $2.93               $1.91

      Cash dividends paid per common share                     $                          -           $                          - $                   -              $12.85


    Weighted-average shares outstanding:

    Basic and diluted                                                                57,068                                 54,453                57,030              54,453



    TRANSDIGM GROUP INCORPORATED

    SUPPLEMENTAL INFORMATION - RECONCILIATION OF EBITDA,

    EBITDA AS DEFINED TO NET INCOME

    FOR THE THIRTEEN AND TWENTY-SIX WEEK PERIODS ENDED

    MARCH 29, 2014 AND MARCH 30, 2013                                                                                                                                                                                                                                                                                                       Table 2
                                                                                                                                                                                                                                                                                                                                            -------

    (Amounts in thousands)

    (Unaudited)
    ----------

                                                                                                                                             Thirteen Week                                                Twenty-Six Week
                                                                                                                                             Periods Ended                                                 Periods Ended
                                                                                                                                             -------------                                                 -------------

                                                                                                                                               March 29,                                                     March 30,                                                     March 29,                                                     March 30,
                                                                                                                                                                       2014                                                          2013                                                          2014                                                 2013
                                                                                                                                                                       ----                                                          ----                                                          ----                                                 ----


    Net income                                                                                                                                                      $90,355                                                       $67,937                                                      $176,478                                             $142,107


    Adjustments:

    Depreciation and amortization expense                                                                                                                            25,881                                                        16,321                                                        49,720                                               33,773

    Interest expense, net                                                                                                                                            82,289                                                        64,094                                                       163,142                                              126,970

    Income tax provision                                                                                                                                             45,850                                                        31,800                                                        89,500                                               67,600
                                                                                                                                                                     ------                                                        ------                                                        ------                                               ------


    EBITDA                                                                                                                                                          244,375                                                       180,152                                                       478,840                                              370,450


    Adjustments:

    Acquisition related expenses and adjustments (1)                                                                                                                 10,435                                                         1,708                                                        15,352                                                5,175

    Non-cash stock compensation expense(2)                                                                                                                            8,158                                                         7,131                                                        12,333                                               14,262

    Refinancing costs(3)                                                                                                                                                  -                                                        30,281                                                             -                                               30,281
                                                                                                                                                                        ---                                                        ------                                                           ---                                               ------


    Gross Adjustments to EBITDA                                                                                                                                      18,593                                                        39,120                                                        27,685                                               49,718
                                                                                                                                                                     ------                                                        ------                                                        ------                                               ------


    EBITDA As Defined                                                                                                                                              $262,968                                                      $219,272                                                      $506,525                                             $420,168
                                                                                                                                                                   ========                                                      ========                                                      ========                                             ========

    EBITDA As Defined, Margin (4)                                                                                                                                      44.5%                                                         47.1%                                                         45.2%                                                46.9%


    (1) Represents accounting adjustments to inventory associated with acquisitions of businesses and product lines that were charged to cost of sales when the inventory was sold; costs incurred to integrate acquired businesses and product lines into TD Group's operations, facility relocation costs and other acquisition-related
     costs; transaction-related costs comprising deal fees; legal, financial and tax due diligence expenses and valuation costs that are required to be expensed as incurred and other acquisition accounting adjustments.

    (2) Represents the compensation expense recognized by TD Group under our stock option plans.

    (3) Represents debt issue costs expensed in conjunction with the refinancing of our 2010 Credit Facility and 2011 Credit Facility in February 2013.

    (4) The EBITDA As Defined margin represents the amount of EBITDA As Defined as a percentage of sales.


    TRANSDIGM GROUP INCORPORATED

    SUPPLEMENTAL INFORMATION - RECONCILIATION OF                                                                                                     Table 3

    REPORTED EARNINGS PER SHARE TO

    ADJUSTED EARNINGS PER SHARE

    FOR THE THIRTEEN AND TWENTY-SIX WEEK PERIODS ENDED

    MARCH 29, 2014 AND MARCH 30, 2013

    (Amounts in thousands, except per share amounts)

    (Unaudited)
    ----------

                                                                   Thirteen Week           Twenty-Six Week
                                                                   Periods Ended            Periods Ended
                                                                   -------------            -------------

    Reported Earnings Per Share                                      March 29,                March 30,             March 29,           March 30,
                                                                                     2014                     2013                2014                2013
                                                                                     ----                     ----                ----                ----


    Net income                                                                    $90,355                  $67,937            $176,478            $142,107

    Less: dividends on participating securities                                    (5,486)                       -              (9,625)            (38,130)
                                                                                   ------                      ---              ------             -------

    Net income applicable to common stock - basic and diluted                     $84,869                  $67,937            $166,853            $103,977
                                                                                  =======                  =======            ========            ========


    Weighted-average shares outstanding under

       the two-class method:

    Weighted average common shares outstanding                                     52,803                   52,204              52,745              52,001

    Vested options deemed participating securities                                  4,265                    2,249               4,285               2,452

    Total shares for basic and diluted earnings per share                          57,068                   54,453              57,030              54,453
                                                                                   ======                   ======              ======              ======


    Basic and diluted earnings (loss) per share                                     $1.49                    $1.25               $2.93               $1.91
                                                                                    =====                    =====               =====               =====



    Adjusted Earnings Per Share


    Net income                                                                    $90,355                  $67,937            $176,478            $142,107


    Gross adjustments to EBITDA                                                    18,593                   39,120              27,685              49,718

    Purchase accounting backlog amortization                                        5,949                      725               9,965               2,186

    Tax adjustment                                                                 (8,260)                 (12,805)            (12,669)            (16,731)
                                                                                   ------                  -------             -------             -------


    Adjusted net income                                                          $106,637                  $94,977            $201,459            $177,280
                                                                                 ========                  =======            ========            ========



    Adjusted diluted earnings per share under the two-class method                  $1.87                    $1.74               $3.53               $3.26
                                                                                    =====                    =====               =====               =====



    Diluted Earnings Per Share to Adjusted Earnings Per Share


    Diluted earnings per share                                                      $1.49                    $1.25               $2.93               $1.91


    Adjustments to diluted earnings per share:


       Inclusion of the dividend equivalent payment                                  0.10                        -                0.17                0.70


       Non-cash stock compensation expense                                           0.09                     0.09                0.14                0.18


       Acquisition related expenses                                                  0.19                     0.02                0.29                0.09


       Refinancing costs                                                                -                     0.38                   -                0.38
                                                                                      ---                     ----                 ---                ----



    Adjusted  earnings per share                                                    $1.87                    $1.74               $3.53               $3.26
                                                                                    =====                    =====               =====               =====


    TRANSDIGM GROUP INCORPORATED

    SUPPLEMENTAL INFORMATION - RECONCILIATION OF NET CASH                                                                                                                                                                                                                  Table 4

    PROVIDED BY OPERATING ACTIVITIES TO EBITDA, EBITDA AS DEFINED

    FOR THE TWENTY-SIX WEEK PERIODS ENDED

    MARCH 29, 2014 AND MARCH 30, 2013

    (Amounts in thousands)

    (Unaudited)
    ----------

                                                                                                                                                                                                 Twenty-Six Week Periods Ended
                                                                                                                                                                                                -----------------------------

                                                                                                                                                                                                        March 29, 2014                                                March 30, 2013
                                                                                                                                                                                                        --------------                                                --------------


    Net Cash Provided by Operating Activities                                                                                                                                                                                  $220,488                                              $197,289

    Adjustments:

    Changes in assets and liabilities, net of effects from acquisitions of businesses                                                                                                                                             6,841                                                (4,462)

    Net gain on sale of real estate                                                                                                                                                                                                 804                                                     -

    Interest expense - net (1)                                                                                                                                                                                                  156,712                                               120,004

    Income tax provision - current                                                                                                                                                                                               95,630                                                62,118

    Non-cash stock compensation expense(2)                                                                                                                                                                                      (12,333)                                              (14,262)

    Excess tax benefit from exercise of stock options                                                                                                                                                                            10,698                                                40,044

    Refinancing costs (4)                                                                                                                                                                                                             -                                               (30,281)
                                                                                                                                                                                                                                    ---                                               -------


    EBITDA                                                                                                                                                                                                                      478,840                                               370,450

    Adjustments:

    Acquisition related expenses(3)                                                                                                                                                                                              15,352                                                 5,175

    Non-cash stock compensation expense (2)                                                                                                                                                                                      12,333                                                14,262

    Refinancing costs(4)                                                                                                                                                                                                              -                                                30,281

    EBITDA As Defined                                                                                                                                                                                                          $506,525                                              $420,168
                                                                                                                                                                                                                               ========                                              ========


    (1) Represents interest expense excluding the amortization of debt issue costs and note premium and discount.

    (2) Represents the compensation expense recognized by TD Group under our stock option plans.

    (3) Represents accounting adjustments to inventory associated with acquisitions of businesses and product lines that were charged to cost of sales when the inventory was sold; costs incurred to integrate acquired businesses and product lines into TD Group's operations,
     facility relocation costs and other acquisition-related costs; transaction-related costs comprising deal fees; legal, financial and tax due diligence expenses and valuation costs that are required to be expensed as incurred and other acquisition accounting
     adjustments.

    (4) Represents debt issue costs expensed in conjunction with the refinancing of our 2010 Credit Facility and 2011 Credit Facility in February 2013.


    TRANSDIGM GROUP INCORPORATED

    SUPPLEMENTAL INFORMATION - BALANCE SHEET DATA                                                  Table 5

    (Amounts in thousands)

    (Unaudited)
    ----------

                                                  March 29, 2014            September 30, 2013
                                                  --------------            ------------------


    Cash and cash equivalents                                     $475,691                      $564,740

    Trade accounts receivable - Net                                342,379                       290,449

    Inventories - Net                                              458,463                       413,581


    Current portion of long-term debt                               31,045                        31,045

    Accounts payable                                                95,150                       106,768

    Accrued current liabilities                                    226,283                       184,687


    Long-term debt                                               5,692,432                     5,700,193


    Total stockholders' (deficit) equity                          (125,629)                     (336,381)

SOURCE TransDigm Group Incorporated