Author Topic: TDG - Transdigm  (Read 143414 times)

cmlber

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Re: TDG - Transdigm
« Reply #290 on: January 25, 2017, 12:09:33 PM »
And I guess it's not easy to persuade FAA to accept replacement parts harvested from old planes...


With that said a large reduction of miles flown would hit TDG.

There is a market for spare parts from parting out retired aircraft, but in order to do that, you need to scrap the plane.  No rational airline is going to scrap a functioning plane in a recession in order to save a few thousand dollars on parts.  So usage of surplus parts might increase slightly in a recession, but not dramatically.  And TDG would likely offset it with higher price increases and more opportunities for M&A.


Jurgis

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Re: TDG - Transdigm
« Reply #291 on: January 25, 2017, 12:18:08 PM »
Hmm, reading that, it seems that in good times airlines could be buying new planes and selling old ones to 3rd countries that may not buy TDG parts (or any parts for that matter). In bad times, the miles flown drop down, but new plane purchases also drop down, so TDG parts may be somewhat flattish (?depends I guess?).

There might be some risk that if TDG is hugely price gauging that airlines/US gov decide to bite the bullet and somehow certify other manufacturers. Not a high probability likely.

Edit: I still think that the risk of catastrophic failure with lives lost is something to consider. If this happens and TDG is shown to have skimped on QA/pushed subpar parts, this could blow it especially with the levered BS.

Disclosure: I have a very tiny position and do not plan to make it major position at this time.
« Last Edit: January 25, 2017, 12:21:54 PM by Jurgis »
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KCLarkin

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Re: TDG - Transdigm
« Reply #292 on: January 25, 2017, 12:52:17 PM »
No rational airline is going to scrap a functioning plane in a recession in order to save a few thousand dollars on parts.

You wouldn't scrap an airplane just for TDG parts. But you might for the engines.

http://aviationweek.com/awin/spare-parts-pricing-and-availability-showing-volatility
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How much longer will young aircraft fetch higher prices for their parts than as whole airplanes?
- Aviation Week 2012

But TDG might be insulated because the parts aren't worth the expense of recovering.

hooplaer23

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Re: TDG - Transdigm
« Reply #293 on: January 26, 2017, 03:17:31 PM »
Citron's report highlights a few examples of parts with dramatic increases in price after Transdigm acquires a company.  But does anyone have thoughts on what this price change is on average? 

I think you can back into an estimate based on assumptions on changes in margins.  Here's an example: a company has sales of $100 and EBITDA margins of 30%, so EBITDA of $30.  TDG acquires the company and raises prices, which I assume flows straight through to EBITDA.  So if TDG raised prices by 40%, and volumes stayed the same, sales would move to $140, and EBITDA would increase to $70, or 50% EBITDA margins, which is around TDG's corporate average.  And this example is not assuming any benefit from cost improvements, which TDG talks about making following an acquisition.

It's also worth pointing out that by at least one metric, the Producer Price Index by Industry: Aerospace Product and Parts Manufacturing https://fred.stlouisfed.org/series/PCU3364133641, over the last 10 years aerospace parts have gone up in price in the range of 20%. 

fareastwarriors

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Re: TDG - Transdigm
« Reply #294 on: February 01, 2017, 08:37:11 AM »

Liberty

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Re: TDG - Transdigm
« Reply #295 on: February 07, 2017, 04:43:09 AM »
Q4: http://www.transdigm.com/phoenix.zhtml?c=196053&p=irol-newsArticle&ID=2243578

Quote
Highlights for the first quarter include:

Net sales of $814.0 million, up 16.0% from $701.7 million;
Declared and paid a special dividend and related dividend equivalent payments of $1.36 billion, or $24.00 per share;
Net income of $118.9 million, down 8.2% from $129.4 million, primarily due to refinancing expenses;
Earnings per share of $0.41, down 81.6% from $2.23, primarily due to dividend equivalent payments and refinancing expenses;
EBITDA As Defined of $385.0 million, up 20.5% from $319.4 million;
Adjusted earnings per share of $2.57, up 13.2% from $2.27; and
Upward revision to fiscal 2017 financial guidance.
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Larry

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Re: TDG - Transdigm
« Reply #296 on: February 07, 2017, 08:36:13 AM »
Quote
Subsequent to the fiscal quarter end, TransDigm repurchased 666,755 shares of its common stock at an aggregate cost of approximately $150.0 million under our existing stock repurchase program.

They repurchased ~1,2% of the company in just couple of weeks, looks like after the Citron short report. Their track record in repurchasing shares during dips has been great. Listening to the call right now.
« Last Edit: February 07, 2017, 08:37:49 AM by Larry »

Schwab711

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Re: TDG - Transdigm
« Reply #297 on: February 17, 2017, 10:29:55 AM »

Liberty

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Re: TDG - Transdigm
« Reply #298 on: February 22, 2017, 05:42:14 AM »
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Schwab711

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Re: TDG - Transdigm
« Reply #299 on: February 22, 2017, 06:36:07 AM »
$90m acquisition:

http://www.transdigm.com/phoenix.zhtml?c=196053&p=irol-newsArticle&ID=2248221

They keep adding to the Dreamliner bet. Their wiki article says sales up from 14m in 2005 to 43m in 2016 (11% CAGR). Takata acquired them for $32m in 2012.
https://de.wikipedia.org/wiki/Schroth_Safety_Products