TransDigm (TDG) Q4 2024 Earnings Call Transcript

Motley Fool Transcribing, The Motley Fool

Wed, February 4, 2026 astatine 10:12 AM CST 42 min read

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Thursday, November 7, 2024 astatine 11:00 a.m. ET

• President and Chief Executive Officer — Kevin Stein

• Co-Chief Operating Officer — Mike Lisman

• Chief Financial Officer — Sarah Wynne

• Co-Chief Operating Officer — Joel Reiss

• Vice President, Investor Relations — Jaimie Stemen

Kevin Stein: Good morning. Thanks for calling successful today. First, I'll commencement disconnected with the accustomed speedy overview of our strategy, a fewer comments astir the 4th and sermon our fiscal 2025 outlook, past Mike and Sarah volition springiness further colour connected the quarter. To reiterate, we judge we are unsocial successful the manufacture successful some the consistency of our strategy successful some bully times and bad, arsenic good arsenic our dependable absorption connected intrinsic shareholder worth instauration done each phases of the aerospace cycle. To summarize, present are immoderate of the reasons wherefore we judge this. About 90% of our nett income are generated by unsocial proprietary products.

Most of our EBITDA comes from aftermarket revenues, which mostly person importantly higher margins and implicit immoderate extended play person typically provided comparative stableness successful the downturns. We travel a accordant semipermanent strategy specifically. We archetypal ain and run proprietary aerospace businesses with important aftermarket content. Second, we utilize a simple, well-proven, value-based operating methodology. Third, we person a decentralized enactment operation and a unsocial compensation strategy intimately aligned with shareholders. Fourth, we get businesses that acceptable the strategy wherever we spot a wide way to PE-like returns. And lastly, our superior operation and allocation are a cardinal portion of our worth instauration methodology.

Our long-standing extremity is to springiness our shareholders backstage equity-like returns with the liquidity of a nationalist market. To bash this, we enactment focused connected some the details of worth instauration arsenic good arsenic cautious allocation of our capital. As you saw from our net release, we closed retired the twelvemonth with different bully quarter. We had coagulated operating show successful Q4 with some full gross and EBITDA arsenic defined borderline coming successful strong. For the afloat year, fiscal 2024 gross came successful supra the precocious extremity of our astir precocious published guidance successful our fiscal 2024 EBITDA arsenic defined borderline surpassed the guidance. Commercial aerospace marketplace trends stay favorable successful the industry.

The commercialized aftermarket has normalized arsenic planetary aerial postulation continues to surpass pre-pandemic levels and request for question persists. In the commercialized OEM market, determination is inactive overmuch advancement to beryllium made for OEM rates and our results proceed to beryllium adversely affected successful examination to pre-pandemic productions. Airline request for caller craft remains precocious and the OEMs are moving to summation craft production. However, OEM craft accumulation rates stay good beneath pre-pandemic levels arsenic it struggles and the OEM proviso concatenation persists and the lingering effects of the precocious resolved machinists onslaught astatine Boeing apt pushes the OEM betterment further to the right.