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TransDigm GROUP INC. FINANCIAL ANALYSIS

1

TransDigm Group

(NYSE: TDG)

Company Profile

and Leadership

Formed in 2003, when Warburg Pincus acquired TransDigm Inc.

–

a company established in

1993,

TransDigm Group Inc. is a global leader in the

production of aerospace components,

systems and sub

-

systems.

The members of the Board of Directors

of TransDigm Group

,(NYSE: TDG),

are: W.

Nicholas Howley

–

Chief Executive Officer and Chairman of the Board of Directors,

William Dries

–

Retired Senior Vice President and Chief Financial Officer at EnPro

Industries, Merv Dunn

–

Chief Executive Officer

of Commercial Vehicle Group, Michael

Graff

–

Managing Director of Warburg Pincus LLC and a General Partner of Warburg Pincus

& Co., Sean P. Hennessy

–

Senior Vice President, Finance and Chief Financial Officer, The

Sherwin

-

Williams Company, Douglas W.

Peacock

–

Past Chairman of the Board of

Directors and Chief Executive Officer of TransDigm Inc., Robert J. Small

–

Managing

Director of Berkshire Partners LLC and John Staer

–

Chief Executive Officer of Satair A/S.

The

key

members of the Management of the

firm are:

W. Nicholas Howley

–

Chief

Executive Officer and Chairman of the Board of Directors, Raymond F. Laubenthal

–

President and Chief Operating Officer, Gregory Rufus

–

Executive Vice President, Chief

Financial Officer and Secretary, Robert S. Hende

rson

–

Executive Vice President, Bernt G.

Iversen, II

–

Executive Vice President in

-

charge of Business Development and Mergers &

Acquisitions.

P

roduct

s / Services, Major Customers, Major S

uppliers

TransDigm Group Inc.’s major products are commercial and m

ilitary

aircraft components in

three major segments of: Airframe, Power and Control, and Non

-

Aviation. These include:

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, speciali

zed cockpit displays, aircraft audio systems, specialized

lavatory components, seatbelts and safety restraints, engineered interior surfaces and lighting

and control technology.

Most of TransDigm Group revenue is from after

-

market sales

realized throughout

the useful life of aircrafts

–

mostly a period of 30 years. The major

suppliers of the firm’s inputs are

leading provider

s

of engineered industrial products

like The

Sherwin

-

Williams Company

and EnPro Industries.

The major customers include the leading

aircraft manufacturing firms such as Boeing, as well as the U.S. Military.

H

i

s

t

o

r

i

c

a

l

S

t

o

c

k

P

r

i

c

e

TDG’s annual stock price has been on a bullish up

-

run since 2009, due to a myriad of

reasons. First, the Group has a unique positioning that provides a high barrier of entry to

the

competition

and this provides it with

sustainable

high

cash flows

, sales an

d profit margins.

Secondly, TDG has been very vibrant in

making strategic

acquisitions

such as:

100%

outstanding stock of McKechnie Aerospace Holdings Inc

.

for appr

oximately $1.27 billion,

acquired the actuation business of Telair International Inc.

in 201

0. In 2011, TDG did not rest

on its acquisition laurel. It acquired the following in 2011:

Aero Quality Sales

;

Schneller

Holdings LLC

and

Harco Laboratories Inc,. In 2012, the following

Aero

-

Instruments Co.,

TransDigm GROUP INC. FINANCIAL ANALYSIS 1

TransDigm Group (NYSE: TDG)

Company Profile and Leadership

Formed in 2003, when Warburg Pincus acquired TransDigm Inc. – a company established in

1993, TransDigm Group Inc. is a global leader in the production of aerospace components,

systems and sub-systems.

The members of the Board of Directors of TransDigm Group,(NYSE: TDG), are: W.

Nicholas Howley – Chief Executive Officer and Chairman of the Board of Directors,

William Dries – Retired Senior Vice President and Chief Financial Officer at EnPro

Industries, Merv Dunn – Chief Executive Officer of Commercial Vehicle Group, Michael

Graff – Managing Director of Warburg Pincus LLC and a General Partner of Warburg Pincus

& Co., Sean P. Hennessy – Senior Vice President, Finance and Chief Financial Officer, The

Sherwin- Williams Company, Douglas W. Peacock – Past Chairman of the Board of

Directors and Chief Executive Officer of TransDigm Inc., Robert J. Small – Managing

Director of Berkshire Partners LLC and John Staer – Chief Executive Officer of Satair A/S.

The key members of the Management of the firm are: W. Nicholas Howley – Chief

Executive Officer and Chairman of the Board of Directors, Raymond F. Laubenthal –

President and Chief Operating Officer, Gregory Rufus – Executive Vice President, Chief

Financial Officer and Secretary, Robert S. Henderson – Executive Vice President, Bernt G.

Iversen, II – Executive Vice President in-charge of Business Development and Mergers &

Acquisitions.

Products / Services, Major Customers, Major Suppliers

TransDigm Group Inc.’s major products are commercial and military aircraft components in

three major segments of: Airframe, Power and Control, and Non-Aviation. These include:

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 and lighting

and control technology. Most of TransDigm Group revenue is from after-market sales

realized throughout the useful life of aircrafts – mostly a period of 30 years. The major

suppliers of the firm’s inputs are leading providers of engineered industrial products like The

Sherwin- Williams Company and EnPro Industries. The major customers include the leading

aircraft manufacturing firms such as Boeing, as well as the U.S. Military.

Historical Stock Price

TDG’s annual stock price has been on a bullish up-run since 2009, due to a myriad of

reasons. First, the Group has a unique positioning that provides a high barrier of entry to the

competition and this provides it with sustainable high cash flows, sales and profit margins.

Secondly, TDG has been very vibrant in making strategic acquisitions such as: 100%

outstanding stock of McKechnie Aerospace Holdings Inc. for approximately $1.27 billion,

acquired the actuation business of Telair International Inc. in 2010. In 2011, TDG did not rest

on its acquisition laurel. It acquired the following in 2011: Aero Quality Sales; Schneller

Holdings LLC and Harco Laboratories Inc,. In 2012, the following Aero-Instruments Co.,