TransDigm Group INC
For the period ended Mar 29, 2025. Filed May 6, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 29, 2025 · Filed May 6, 2025
TDG$1,197.01+0.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-12-28; filed 2025-02-04.
0001260221-25-000014
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2025-03-29; filed 2025-05-06.
0001260221-25-000026
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 121 previous paragraphs and 157 current paragraphs.
83 unchanged; 35 reworded; 17 added; 3 removed; 0 previous and 22 current paragraphs rearranged.
Tables are not compared: 17 previous and 23 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (17)
Current report
Recently, the U.S. Government announced new or higher tariffs on goods imported into the U.S. from numerous countries and multiple nations countered with reciprocal tariffs and other actions in response. The U.S. Government stated that it is willing to negotiate with other countries regarding the tariffs. TransDigm is primarily a domestic manufacturer as the majority of its operations are in the U.S. and mainly sources in the U.S. for its U.S.-based production. Because of this and other factors such as the applicability of the United States-Mexico-Canada Agreement, we do not expect the tariffs to have a significant impact on our fiscal 2025 operating results. We will continue to monitor the developments on tariffs and other changes in trade policy for its potential impact on the economic environment and on our business and operating results.
Current report
•Refinancing Costs. No refinancing costs were incurred for the thirteen week period ended March 29, 2025. Refinancing costs of $28 million incurred for the thirteen week period ended March 30, 2024 were primarily related to the write-off of unamortized debt issuance costs recorded in conjunction with the redemption of the 6.25% secured notes due 2026 (“2026 Secured Notes”), which was completed during the thirteen week period ended March 30, 2024.
Current report
Net sales for the Power & Control segment increased $188 million, an increase of 20.4%, for the thirteen week period ended March 29, 2025 compared to the thirteen week period ended March 30, 2024. The sales increase resulted primarily from increases in organic sales in defense ($55 million, an increase of 13.0%) and commercial aftermarket ($34 million, an increase of 12.1%). The increase in defense sales is primarily attributable to continued improving U.S. Government defense spend outlays. The increase in commercial aftermarket sales is primarily attributable to the strong demand for air travel resulting in higher flight hours and utilization of aircraft.
Current report
Net sales for the Airframe segment increased $43 million, an increase of 4.5%, for the thirteen week period ended March 29, 2025 compared to the thirteen week period ended March 30, 2024. The sales increase resulted primarily from increases in organic sales in commercial aftermarket ($43 million, an increase of 14.4%) and defense ($15 million, an increase of 4.7%). The increase in commercial aftermarket sales and defense sales for the Airframe segment is attributable to the same factors described in the paragraph above for the Power & Control segment.
Current report
EBITDA As Defined for the Airframe segment increased approximately $19 million, an increase of 3.7%. The increase in EBITDA As Defined for the Airframe segment is attributable to the same factors described in the paragraph above for the Power & Control segment.
Current report
Twenty-six week period ended March 29, 2025 compared with the twenty-six week period ended March 30, 2024
Current report
Total Company
Current report
•Cost of Sales and Gross Profit. Cost of sales increased by $132 million, or 8.7%, to $1,647 million for the twenty-six week period ended March 29, 2025 compared to $1,515 million for the twenty-six week period ended March 30, 2024. Cost of sales and the related percentage of net sales for the twenty-six week periods ended March 29, 2025 and March 30, 2024 were as follows (amounts in millions):
Current report
•Selling and Administrative Expenses. Selling and administrative expenses increased by $20 million to $447 million, or 10.8% of net sales, for the twenty-six week period ended March 29, 2025 from $467 million, or 12.6% of net sales, for the twenty-six week period ended March 30, 2024. Selling and administrative expenses and the related percentage of net sales for the twenty-six week periods ended March 29, 2025 and March 30, 2024 were as follows (amounts in millions):
Current report
•Refinancing Costs. No refinancing costs were incurred for the twenty-six week period ended March 29, 2025. Refinancing costs of $28 million incurred for the twenty-six week period ended March 30, 2024 were primarily related to the write-off of unamortized debt issuance costs recorded in conjunction with the redemption of the 2026 Secured Notes, which was completed during the twenty-six week period ended March 30, 2024.
Current report
•Income Tax Provision. Income tax expense as a percentage of income before income taxes was approximately 21.7% for the twenty-six week period ended March 29, 2025 compared to 22.0% for the twenty-six week period ended March 30, 2024. The Company’s lower effective tax rate for the twenty-six week period ended March 29, 2025 was impacted by the geographic (i.e., U.S. vs. non-U.S.) mix of our pre-tax earnings.
Current report
•Net Income Attributable to TD Group. Net income attributable to TD Group increased $187 million, or 23.8%, to $972 million for the twenty-six week period ended March 29, 2025 compared to net income attributable to TD Group of $785 million for the twenty-six week period ended March 30, 2024, primarily as a result of the factors referenced above.
Current report
Business Segments
Current report
Net sales for the Power & Control segment increased $324 million, an increase of 17.9%, for the twenty-six week period ended March 29, 2025 compared to the twenty-six week period ended March 30, 2024. The sales increase resulted primarily from increases in organic sales in defense ($86 million, an increase of 10.3%) and commercial aftermarket ($71 million, an increase of 12.4%). The increase in defense sales is primarily attributable to continued improving U.S. Government defense spend outlays. The increase in commercial aftermarket sales is primarily attributable to the strong demand for air travel resulting in higher flight hours and utilization of aircraft.
Current report
Net sales for the Airframe segment increased $128 million, an increase of 7.0%, for the twenty-six week period ended March 29, 2025 compared to the twenty-six week period ended March 30, 2024. The sales increase resulted primarily from increases in organic sales in defense ($64 million, an increase of 11.1%) and commercial aftermarket ($63 million, an increase of 10.8%). The increase in defense sales and commercial aftermarket sales for the Airframe segment is attributable to the same factors described in the paragraph above for the Power & Control segment.
Current report
Acquisition sales for the Power & Control and Airframe segments contributed approximately $197 million in aggregate to the increase in net sales. Acquisition sales represent net sales from acquired businesses for the period up to one year from the respective acquisition date.
Current report
EBITDA As Defined for the Airframe segment increased approximately $105 million, an increase of 11.2%. The increase in EBITDA As Defined for the Airframe segment is attributable to the same factors described in the paragraph above for the Power & Control segment.
Removed paragraphs (3)
Previous report
Net sales for the Power & Control segment increased $137 million, an increase of 15.4%, for the thirteen week period ended December 28, 2024 compared to the thirteen week period ended December 30, 2023. The sales increase resulted primarily from increases in organic sales in commercial aftermarket ($37 million, an increase of 12.7%) and defense ($31 million, an increase of 7.6%). The increase in commercial aftermarket sales is primarily attributable to the strong demand for air travel resulting in higher flight hours and utilization of aircraft. The increase in defense sales is primarily attributable to due to continued improving U.S. Government defense spend outlays.
Previous report
Net sales for the Airframe segment increased $84 million, an increase of 9.7%, for the thirteen week period ended December 28, 2024 compared to the thirteen week period ended December 30, 2023. The sales increase resulted primarily from increases in organic sales in defense ($49 million, an increase of 18.6%) and commercial aftermarket ($20 million, an increase of 7.1%). The increase in defense sales and commercial aftermarket sales for the Airframe segment is attributable to the same factors described in the paragraph above for the Power & Control segment.
Previous report
EBITDA As Defined for the Airframe segment increased approximately $85 million, an increase of 19.7%. The increase in EBITDA As Defined for the Airframe segment is attributable to the same factors described in the paragraph above for the Power & Control segment.
Reworded paragraphs (35)
Previous wording
Important factors that could cause actual results to differ materially from the forward-looking statements made in this Quarterly Report on Form 10-Q 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; supply chain constraints; increases in raw material costs, taxes and labor costs that cannot be recovered in product pricing; failure to complete or successfully integrate acquisitions; our indebtedness; current and future geopolitical or other worldwide events, including, without limitation, wars or conflicts and public health crises; cybersecurity threats; risks related to the transition or physical impacts of climate change and other natural disasters or meeting sustainability-related voluntary goals or regulatory requirements; our reliance on certain customers; the United States (“U.S.”) defense budget and risks associated with being a government supplier including government audits and investigations; failure to maintain government or industry approvals; risks related to changes in laws and regulations, including increases in compliance costs; potential environmental liabilities; liabilities arising in connection with litigation; risks and costs associated with our international sales and operations; and other factors. Refer to Part II, Item 1A included in this Quarterly Report on Form 10-Q and to Part I, Item 1A of the Annual Report on Form 10-K for additional information regarding the foregoing factors that may affect our business.
Current wording
Important factors that could cause actual results to differ materially from the forward-looking statements made in this Quarterly Report on Form 10-Q 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; supply chain constraints; increases in raw material costs, taxes and labor costs that cannot be recovered in product pricing; failure to complete or successfully integrate acquisitions; our indebtedness; current and future geopolitical or other worldwide events, including, without limitation, wars or conflicts and public health crises; cybersecurity threats; risks related to the transition or physical impacts of climate change and other natural disasters or meeting sustainability-related voluntary goals or regulatory requirements; our reliance on certain customers; the United States (“U.S.”) defense budget and risks associated with being a government supplier including government audits and investigations; failure to maintain government or industry approvals; risks related to changes in laws and regulations, including increases in compliance costs and potential changes in trade policies and tariffs; potential environmental liabilities; liabilities arising in connection with litigation; risks and costs associated with our international sales and operations; and other factors. Refer to Part II, Item 1A included in this Quarterly Report on Form 10-Q and to Part I, Item 1A of the Annual Report on Form 10-K for additional information regarding the foregoing factors that may affect our business.
Previous wording
For the first quarter of fiscal 2025, we generated net sales of $2,006 million and net income attributable to TD Group of $493 million. EBITDA As Defined was $1,061 million, or 52.9% of net sales. Refer to the “Non-GAAP Financial Measures” section for certain information regarding EBITDA and EBITDA As Defined, including reconciliations of EBITDA and EBITDA As Defined to net income and net cash provided by operating activities.
Current wording
For the second quarter of fiscal 2025, we generated net sales of $2,150 million and net income attributable to TD Group of $479 million. EBITDA As Defined was $1,162 million, or 54.0% of net sales. Refer to the “Non-GAAP Financial Measures” section for certain information regarding EBITDA and EBITDA As Defined, including reconciliations of EBITDA and EBITDA As Defined to net income and net cash provided by operating activities.
Previous wording
In the first quarter of fiscal 2025, demand for air travel remained strong both domestically and internationally. The 2025 leading indicators or industry consensus suggest a continuation of current trends supported by continued revenue passenger kilometer (“RPK”) growth though the ongoing supply chain issues resulting in the delivery of fewer new aircraft deliveries to airlines may adversely impact the rate of RPK growth. In the first quarter of fiscal 2025, commercial aftermarket sales increased compared to the first quarter of fiscal 2024 primarily due to the strong demand for air travel resulting in higher flight hours and utilization of aircraft as global air traffic continues to surpass pre-pandemic levels.
Current wording
In the first half of fiscal 2025, demand for air travel remained strong both domestically and internationally. The 2025 leading indicators or industry consensus suggest a continuation of current trends supported by continued revenue passenger kilometer (“RPK”) growth though the ongoing supply chain issues resulting in the delivery of fewer new aircraft deliveries to airlines may adversely impact the rate of RPK growth. Recent RPK statistics indicate a softening in the growth rate, particularly in North America. In the first half of fiscal 2025, commercial aftermarket sales increased compared to the first half of fiscal 2024 primarily due to the strong demand for air travel resulting in higher flight hours and utilization of aircraft as global air traffic continues to surpass pre-pandemic levels. We continue to closely monitor the economic environment, including its impact on airline capacity as several airlines have announced potential capacity reductions. At this time, we are seeing minimal impact on our commercial aftermarket.
Previous wording
Our commercial transport original equipment manufacturer (“OEM”) shipments and revenues generally run ahead of aircraft delivery schedules. Consistent with prior years, our fiscal 2025 shipments will be a function of, among other things, the estimated 2025 and 2026 commercial aircraft production rates for Boeing and Airbus. Airline demand for new aircraft remains high, and the OEMs are working to increase aircraft production. However, aircraft production rates remain well below pre-pandemic levels as the struggles in the OEM supply chain persist. Other factors, such as the Boeing machinist strike, also has contributed to lower production rates. Due to these factors, it is difficult to accurately predict the OEM build rates for 2025. In the first quarter of fiscal 2025, commercial OEM sales decreased compared to the first quarter of fiscal 2024 primarily due to the adverse impact on aircraft production from the Boeing machinist strike.
Current wording
Our commercial transport original equipment manufacturer (“OEM”) shipments and revenues generally run ahead of aircraft delivery schedules. Consistent with prior years, our fiscal 2025 shipments will be a function of, among other things, the estimated 2025 and 2026 commercial aircraft production rates for Boeing and Airbus. Airline demand for new aircraft remains high and the OEMs are working to increase aircraft production. However, aircraft production rates remain well below pre-pandemic levels as the struggles in the OEM supply chain and labor challenges persist but continue to improve. The recent tariff actions and potentially weakening economic environment, and Boeing machinist strike, which affected its 737 MAX, 767 and 777 production lines, make it difficult to accurately predict the OEM build rates for 2025, though progress continues to be made in the build rates, particularly with the 737 MAX, since the resolution of the strike in the first quarter of fiscal 2025. In the first half of fiscal 2025, the impact across TransDigm's operating units has been uneven and varied, resulting in commercial OEM sales slightly decreasing compared to the first half of fiscal 2024.
Previous wording
Our defense business fluctuates from year-to-year, and is dependent, to a degree, on government budget constraints, the timing of orders, macro and micro dynamics with respect to the U.S. Department of Defense (“DOD”) procurement policy and the extent of global conflicts, such as the ongoing conflicts between Russia and Ukraine and Israel and Hamas can increase demand. Likewise, delays in government spending outlays and government funding reprioritization can reduce demand. For a variety of reasons, the military spending outlook is very uncertain, though recent DOD budgets have trended upwards due to recent geopolitical challenges, such as the ongoing conflicts between Russia and Ukraine and Israel and Hamas, and current military modernization efforts. Defense sales in the first quarter of fiscal 2025 increased compared to the first quarter of fiscal 2024 primarily due to continued improving United States Government (“U.S. Government”) defense spend outlays.
Current wording
Our defense business fluctuates from year-to-year, and is dependent, to a degree, on government budget constraints, the timing of orders, macro and micro dynamics with respect to the U.S. Department of Defense (“DOD”) procurement policy and the extent of global conflicts, such as the ongoing conflicts between Russia and Ukraine and Israel and Hamas can increase demand. Likewise, delays in government spending outlays and government funding reprioritization can reduce demand. For a variety of reasons, the military spending outlook is very uncertain, though recent DOD budgets have trended upwards due to recent geopolitical challenges, such as the ongoing conflicts between Russia and Ukraine and Israel and Hamas, and current military modernization efforts. Defense sales in the first half of fiscal 2025 increased compared to the first half of fiscal 2024 primarily due to continued improving United States Government (“U.S. Government”) defense spend outlays.
Previous wording
(1)Net income applicable to TD Group common stockholders represents net income attributable to TD Group less special dividends declared or paid on participating securities, including dividend equivalents of $49 million and $101 million for the thirteen week periods December 28, 2024 and December 30, 2023, respectively.
Current wording
(1)Net income applicable to TD Group common stockholders represents net income attributable to TD Group less special dividends declared or paid on participating securities, including dividend equivalent payments of $49 million and $101 million for the twenty-six week periods ended March 29, 2025 and March 30, 2024, respectively.
Previous wording
The increase in organic sales of $118 million for the thirteen week period ended December 28, 2024 compared to the thirteen week period ended December 30, 2023 is primarily related to increases in defense sales ($80 million, an increase of 11.8%) and commercial aftermarket sales ($57 million, an increase of 9.9%), partially offset by a decrease in commercial OEM sales ($16 million, a decrease of 4.2%). The increase in defense sales is primarily attributable to continued improving U.S. Government defense spend outlays. The increase in commercial aftermarket sales is primarily attributable to the strong demand for air travel resulting in higher flight hours and utilization of aircraft. The decrease in commercial OEM sales is primarily attributable to the adverse impact on aircraft production from the Boeing machinist strike.
Current wording
The increase in organic sales of $132 million for the thirteen week period ended March 29, 2025 compared to the thirteen week period ended March 30, 2024 is primarily related to increases in commercial aftermarket sales ($77 million, an increase of 13.3%) and defense sales ($69 million, an increase of 9.5%), partially offset by a slight decrease in commercial OEM sales ($1 million, a decrease of 0.2%). The increase in commercial aftermarket sales is primarily attributable to the strong demand for air travel resulting in higher flight hours and utilization of aircraft. The increase in defense sales is primarily attributable to continued improving U.S. Government defense spend outlays. The slight decrease in commercial OEM sales is primarily attributable to the adverse impact on aircraft production from the Boeing machinist strike.
Previous wording
•Cost of Sales and Gross Profit. Cost of sales increased by $24 million, or 3.2%, to $771 million for the thirteen week period ended December 28, 2024 compared to $747 million for the thirteen week period ended December 30, 2023. Cost of sales and the related percentage of net sales for the thirteen week periods ended December 28, 2024 and December 30, 2023 were as follows (amounts in millions):
Current wording
•Cost of Sales and Gross Profit. Cost of sales increased by $109 million, or 14.2%, to $876 million for the thirteen week period ended March 29, 2025 compared to $767 million for the thirteen week period ended March 30, 2024. Cost of sales and the related percentage of net sales for the thirteen week periods ended March 29, 2025 and March 30, 2024 were as follows (amounts in millions):
Previous wording
•Selling and Administrative Expenses. Selling and administrative expenses decreased by $9 million, or 4%, to $211 million for the thirteen week period ended December 28, 2024, compared to $220 million, or 12.3% of net sales, for the thirteen week period ended December 30, 2023. Selling and administrative expenses and the related percentage of net sales for the thirteen week periods ended December 28, 2024 and December 30, 2023 were as follows (amounts in millions):
Current wording
•Selling and Administrative Expenses. Selling and administrative expenses decreased by $12 million, or 4.8%, to $236 million for the thirteen week period ended March 29, 2025, compared to $248 million, or 12.9% of net sales, for the thirteen week period ended March 30, 2024. Selling and administrative expenses and the related percentage of net sales for the thirteen week periods ended March 29, 2025 and March 30, 2024 were as follows (amounts in millions):
Previous wording
•Amortization of Intangible Assets. Amortization of intangible assets was $50 million for the thirteen week period ended December 28, 2024 compared to $35 million for the thirteen week period ended December 30, 2023. The increase in amortization expense of $15 million was primarily due to the amortization expense recognized on intangible assets from the fiscal 2024 acquisitions.
Current wording
•Amortization of Intangible Assets. Amortization of intangible assets was $47 million for the thirteen week period ended March 29, 2025 compared to $37 million for the thirteen week period ended March 30, 2024. The increase in amortization expense of $10 million was primarily due to the amortization expense recognized on intangible assets from the fiscal 2024 acquisitions.
Previous wording
•Interest Expense-net. Interest expense-net includes interest on borrowings outstanding, amortization of debt issuance costs and original issue discount, revolving credit facility fees, finance leases, interest income and the impact of interest rate swaps and caps designated and qualifying as cash flow hedges. Interest expense-net increased $78 million, or 26.0%, to $378 million for the thirteen week period ended December 28, 2024 from $300 million for the comparable thirteen week period in the prior fiscal year. The increase in interest expense-net was primarily due to an increase in outstanding borrowings (refer to Note 8, “Debt”in the notes to the condensed consolidated financial statements included herein for additional details) and a $10 million decrease in interest income. The weighted average interest rate for cash interest payments on total borrowings outstanding was 6.2% for the thirteen week period ended December 28, 2024 compared to 6.3% for the thirteen week period ended December 30, 2023.
Current wording
•Interest Expense-net. Interest expense-net includes interest on borrowings outstanding, amortization of debt issuance costs and original issue discount, revolving credit facility fees, finance leases, interest income and the impact of interest rate swaps and caps designated and qualifying as cash flow hedges. Interest expense-net increased $52 million, or 16.0%, to $378 million for the thirteen week period ended March 29, 2025 from $326 million for the comparable thirteen week period in the prior fiscal year. The increase in interest expense-net was primarily due to an increase in outstanding borrowings and a $27 million decrease in interest income. The weighted average interest rate for cash interest payments on total borrowings outstanding was 6.1% for the thirteen week period ended March 29, 2025 compared to 6.3% for the thirteen week period ended March 30, 2024.
Previous wording
•Other Income. Other income was $23 million for the thirteen week period ended December 28, 2024 compared to $1 million for the thirteen week period ended December 30, 2023. Other income for the thirteen week period ended December 28, 2024 primarily related to a gain on sale of business. Other income for the thirteen week period ended December 30, 2023 primarily related to the non-service related components of benefit costs on the Company's benefit plans.
Current wording
•Other Income. Other income was $9 million for the thirteen week period ended March 29, 2025 compared to $6 million for the thirteen week period ended March 30, 2024. Other income for the thirteen week period ended March 29, 2025 primarily related to royalty and other income and the non-service related components of benefit costs on the Company's benefit plans. Other income for the thirteen week period ended March 30, 2024 primarily related to royalty and other income and the non-service related components of benefit costs on the Company's benefit plans.
Previous wording
•Income Tax Provision. Income tax expense as a percentage of income before income taxes was approximately 20.4% for the thirteen week period ended December 28, 2024 compared to 21.7% for the thirteen week period ended December 30, 2023. The Company’s lower effective tax rate for the thirteen week period ended December 28, 2024 was primarily due to a less significant impact on the rate from the valuation allowance applicable to the Company's net interest deduction limitation carryforward.
Current wording
•Income Tax Provision. Income tax expense as a percentage of income before income taxes was approximately 23.0% for the thirteen week period ended March 29, 2025 compared to 22.2% for the thirteen week period ended March 30, 2024. The Company’s higher effective tax rate for the thirteen week period ended March 29, 2025 was primarily due to a less significant discrete benefit associated with share-based payments compared to the prior period.
Previous wording
•Net Income Attributable to TD Group. Net income attributable to TD Group increased $111 million, or 29.1%, to $493 million for the thirteen week period ended December 28, 2024 compared to net income attributable to TD Group of $382 million for the thirteen week period ended December 30, 2023, primarily as a result of the factors referenced above.
Current wording
•Net Income Attributable to TD Group. Net income attributable to TD Group increased $76 million, or 18.9%, to $479 million for the thirteen week period ended March 29, 2025 compared to net income attributable to TD Group of $403 million for the thirteen week period ended March 30, 2024, primarily as a result of the factors referenced above.
Previous wording
Acquisition sales for the Power & Control and Airframe increased approximately $99 million in the aggregate. Acquisition sales represent net sales from acquired businesses for the period up to one year from the respective acquisition date.
Current wording
Acquisition sales for the Power & Control and Airframe segments contributed approximately $99 million in the aggregate to the increase in net sales. Acquisition sales represent net sales from acquired businesses for the period up to one year from the respective acquisition date.
Previous wording
EBITDA As Defined for the Power & Control segment increased approximately $73 million, an increase of 14.3%, resulting primarily from the higher organic sales in commercial aftermarket and defense. Also contributing to the increase in EBITDA As Defined was the application of our three core value-driven operating strategy and positive leverage on our fixed overhead costs spread over a higher production volume.
Current wording
EBITDA As Defined for the Power & Control segment increased approximately $113 million, an increase of 21.6%, resulting primarily from the higher organic sales in commercial aftermarket and defense. Also contributing to the increase in EBITDA As Defined was the application of our three core value-driven operating strategy and positive leverage on our fixed overhead costs spread over a higher production volume.
Previous wording
Cost of sales during the thirteen week period ended December 28, 2024 decreased as a percentage of net sales. This was primarily driven by the application of our three core value-driven operating strategy (obtaining profitable new business, continually improving our cost structure and providing highly engineered value-added products to customers) coupled with fixed overhead costs incurred being spread over a higher production volume. Foreign exchange rates, particularly the U.S. dollar compared to the British pound and the euro, strengthened in the first quarter of fiscal 2025 compared to fiscal 2024, resulting in foreign currency gains recognized in the first quarter of fiscal 2025.
Current wording
Cost of sales during the twenty-six week period ended March 29, 2025 decreased as a percentage of net sales. This was primarily driven by the application of our three core value-driven operating strategy (obtaining profitable new business, continually improving our cost structure and providing highly engineered value-added products to customers) coupled with fixed overhead costs incurred being spread over a higher production volume. Foreign exchange rates, particularly the U.S. dollar compared to the British pound and the euro, strengthened in the first half of fiscal 2025 compared to fiscal 2024, resulting in foreign currency gains recognized in the first half of fiscal 2025.
Previous wording
Selling and administrative expenses as a percentage of net sales for the thirteen week period ended December 28, 2024 decreased as a percentage of net sales compared to the thirteen week period ended December 30, 2023 primarily driven by the decrease in non-cash stock and deferred compensation expense. The decrease is due to the reduction in the stock price as of December 28, 2024 compared to September 30, 2024, as the stock price is a key input used to determine the Black-Scholes fair value for the non-cash stock compensation expense.
Current wording
Selling administrative expenses as a percentage of net sales for the twenty-six week period ended March 29, 2025 decreased compared to the twenty-six week period ended March 30, 2024 primarily due to the decrease in non-cash stock and deferred compensation expense. The decrease in non-cash stock and deferred compensation expense is primarily attributable to the appreciation of the stock price at a higher rate during the first half of fiscal 2024 compared to the first half of fiscal 2025, as the stock price is a key input used to determine the Black-Scholes fair value for the non-cash stock compensation expense, and lower deferred compensation expense.
Previous wording
•Earnings per Share. Basic and diluted earnings per share was $7.62 for the thirteen week period ended December 28, 2024 and $4.87 for the thirteen week period ended December 30, 2023. Net income attributable to TD Group for the thirteen week period ended December 28, 2024 of $493 million was decreased by dividend equivalent payments of $49 million, or $0.83 per share, resulting in net income applicable to TD Group common stockholders of $444 million. Net income attributable to TD Group for the thirteen week period ended December 30, 2023 of $382 million was decreased by dividend equivalent payments of $101 million, or $1.75 per share, resulting in net income applicable to TD Group common stockholders of $281 million.
Current wording
•Earnings per Share. Basic and diluted earnings per share was $15.86 for the twenty-six week period ended March 29, 2025 and $11.83 for the twenty-six week period ended March 30, 2024. Net income attributable to TD Group for the twenty-six week period ended March 29, 2025 of $972 million was decreased by dividend equivalent payments of $49 million, or $0.83 per share, resulting in net income applicable to TD Group common stockholders of $923 million. Net income attributable to TD Group for the twenty-six week period ended March 30, 2024 of $785 million was decreased by dividend equivalent payments of $101 million, or $1.75 per share, resulting in net income applicable to TD Group common stockholders of $684 million.
Previous wording
EBITDA As Defined from acquisitions for the Power & Control and Airframe segments increased approximately $36 million in the aggregate. EBITDA As Defined from acquisitions represents EBITDA As Defined from acquired businesses for the period up to one year from the respective acquisition date.
Current wording
EBITDA As Defined from acquisitions for the Power & Control and Airframe segments contributed approximately $63 million in aggregate to the increase in EBITDA As Defined. EBITDA As Defined from acquisitions represents EBITDA As Defined from acquired businesses for the period up to one year from the respective acquisition date.
Previous wording
During the first quarter of fiscal 2025, the Company repurchased 252,800 shares of common stock at an average price of 1,248.65 per share for a total amount of $316 million. The Company may make additional share repurchases during the remainder of fiscal 2025. Whether the Company undertakes additional share repurchases or other aforementioned activities will depend on prevailing market conditions, the Company's liquidity requirements, contractual restrictions and other factors.
Current wording
In April 2025, the Company repurchased 105,567 shares of common stock at an average price of $1,240.91 per share for a total amount of $131 million. Whether the Company undertakes additional share repurchases or other aforementioned activities will depend on prevailing market conditions, the Company's liquidity requirements, contractual restrictions and other factors.
Previous wording
Operating Activities. The Company generated $752 million of net cash from operating activities during the thirteen week period ended December 28, 2024 compared to $636 million during the thirteen week period ended December 30, 2023.
Current wording
Operating Activities. The Company generated $900 million of net cash from operating activities during the twenty-six week period ended March 29, 2025 compared to $865 million during the twenty-six week period ended March 30, 2024.
Previous wording
The change in accounts receivable during the thirteen week period ended December 28, 2024 was a source of cash of $80 million compared to a source of cash of $94 million during the thirteen week period ended December 30, 2023. The decrease in the source of cash of $14 million is primarily attributable to the timing of cash receipts. The Company continues to actively manage its accounts receivable, the related agings and collection efforts.
Current wording
The change in accounts receivable during the twenty-six week period ended March 29, 2025 was a use of cash of $66 million compared to a source of cash of $36 million during the twenty-six week period ended March 30, 2024. The increase in the use of cash of $102 million is primarily attributable to the timing of cash receipts. The Company continues to actively manage its accounts receivable, the related agings and collection efforts.
Previous wording
The change in inventories during the thirteen week period ended December 28, 2024 was a use of cash of $79 million compared to a use of cash of $78 million during the thirteen week period ended December 30, 2023. The slight increase in the use of cash is due to an increase in inventory purchases to support the increase in bookings partially offset by higher sales activity. The Company continues to actively and strategically manage inventory levels in response to the ongoing supply chain challenges.
Current wording
The change in inventories during the twenty-six week period ended March 29, 2025 was a use of cash of $123 million compared to a use of cash of $114 million during the twenty-six week period ended March 30, 2024. The slight increase in the use of cash is due to an increase in inventory purchases to support the increase in bookings partially offset by higher sales activity. The Company continues to actively and strategically manage inventory levels in response to the ongoing supply chain challenges.
Previous wording
The change in accounts payable during the thirteen week period ended December 28, 2024 was a use of cash of $3 million compared to a use of cash of $21 million during the thirteen week period ended December 30, 2023. The change is due to the timing of payments to suppliers.
Current wording
The change in accounts payable during the twenty-six week period ended March 29, 2025 was a use of cash of $2 million compared to a use of cash of $9 million during the twenty-six week period ended March 30, 2024. The change is due to the timing of payments to suppliers.
Previous wording
Investing Activities. Net cash used in investing activities was $24 million during the thirteen week period ended December 28, 2024, consisting primarily of capital expenditures of $42 million and acquisitions of certain product lines completed during the first quarter of 2025 for $29 million; partially offset by other investing transactions inflows of $47 million.
Current wording
Investing Activities. Net cash used in investing activities was $191 million during the twenty-six week period ended March 29, 2025, consisting primarily of acquisitions of certain product lines completed during the first half of fiscal 2025 for $140 million and capital expenditures of $98 million; partially offset by other investing transactions inflows of $47 million.
Previous wording
Net cash used in investing activities was $50 million during the thirteen week period ended December 30, 2023, consisting primarily of capital expenditures of $36 million and the acquisition of a certain product line for $13 million.
Current wording
Net cash used in investing activities was $171 million during the twenty-six week period ended March 30, 2024, consisting primarily of $87 million for the acquisition of FPT and certain product lines completed during the first half of fiscal 2024 and capital expenditures of $84 million.
Previous wording
Financing Activities. Net cash used in financing activities was $4,516 million during the thirteen week period ended December 28, 2024. The use of cash was primarily attributable to dividend and dividend equivalent payments of $4,396 million and repurchases of common stock of $316 million; partially offset by an additional draw from the trade receivable securitization facility, including fees, of $163 million and proceeds from stock option exercises of $35 million.
Current wording
Financing Activities. Net cash used in financing activities was $4,540 million during the twenty-six week period ended March 29, 2025. The use of cash was primarily attributable to dividend and dividend equivalent payments of $4,396 million and repurchases of common stock of $369 million; partially offset by an additional draw from the trade receivable securitization facility, including fees, of $163 million and proceeds from stock option exercises of $89 million.
Previous wording
Net cash provided by financing activities was $67 million during the thirteen week period ended December 30, 2023. The source of cash was primarily attributable to the net proceeds of short-term and long-term debt, including fees, of $2,071 million and proceeds from stock option exercises of $52 million; partially offset by dividend and dividend equivalent payments of $2,038 million.
Current wording
Net cash provided by financing activities was $668 million during the twenty-six week period ended March 30, 2024. The source of cash was primarily attributable to the net proceeds of short-term and long-term debt, including fees, of $2,545 million and proceeds from stock option exercises of $165 million. This was primarily offset by dividend and dividend equivalent payments of $2,038 million and other financing fees of $4 million.
Previous wording
We have future obligations under various contracts relating to debt and interest payments, finance and operating leases, pension and post-retirement benefit plans and purchase obligations. During the thirteen week period ended December 28, 2024, there were no material changes to these obligations as reported in our Annual Report on Form 10-K for the fiscal year ended September 30, 2024.
Current wording
We have future obligations under various contracts relating to debt and interest payments, finance and operating leases, pension and post-retirement benefit plans and purchase obligations. During the twenty-six week period ended March 29, 2025, there were no material changes to these obligations as reported in our Annual Report on Form 10-K for the fiscal year ended September 30, 2024.
Previous wording
As of December 28, 2024, TransDigm has $8,702 million in fully drawn term loans (the “Term Loans Facility”) and an $910 million revolving credit facility. The Term Loans Facility consists of four tranches of term loans as follows (aggregate principal amount disclosed is as of December 28, 2024):
Current wording
As of March 29, 2025, TransDigm has $8,680 million in fully drawn term loans (the “Term Loans Facility”) and a $910 million revolving credit facility. The Term Loans Facility consists of four tranches of term loans as follows (aggregate principal amount disclosed is as of March 29, 2025):
Previous wording
The Term Loans Facility requires quarterly aggregate principal payments of $22 million. Due to the timing of our quarter-end, no payments were made in the first quarter of fiscal 2025. The revolving commitments consist of two tranches which include up to $139 million of multicurrency revolving commitments. At December 28, 2024, the Company had $61 million in letters of credit outstanding and $849 million in borrowings available under the revolving commitments. Draws on the revolving commitments are subject to an interest rate of Term SOFR plus 2.25%. The unused portion of the revolving commitments is subject to a fee of 0.5% per annum. The maturity date of the revolving credit facility is February 27, 2029.
Current wording
The Term Loans Facility requires quarterly aggregate principal payments of $22 million. The revolving commitments consist of two tranches which include up to $139 million of multicurrency revolving commitments. At March 29, 2025, the Company had $53 million in letters of credit outstanding and $857 million in borrowings available under the revolving commitments. Draws on the revolving commitments are subject to an interest rate of Term SOFR plus 2.25%. The unused portion of the revolving commitments is subject to a fee of 0.5% per annum. The maturity date of the revolving credit facility is February 27, 2029.
Previous wording
During the first quarter of fiscal 2025, the Company drew the remaining $163 million available under the Securitization Facility. As of December 28, 2024, the Company has borrowed $650 million under the Securitization Facility, which is fully drawn. At December 28, 2024, the applicable interest rate was 6.08%. The Securitization Facility is collateralized by substantially all of the Company’s domestic operations’ trade accounts receivable.
Current wording
During the first quarter of fiscal 2025, the Company drew the remaining $163 million available under the Securitization Facility. As of March 29, 2025, the Company has borrowed $650 million under the Securitization Facility, which is fully drawn. At March 29, 2025, the applicable interest rate was 5.75%. The Securitization Facility is collateralized by substantially all of the Company’s domestic operations’ trade accounts receivable.
Previous wording
No dividends were declared in the first quarter of fiscal 2025. In September 2024, TransDigm's Board of Directors authorized and declared a special cash dividend of $75.00 on each outstanding share of common stock. On October 18, 2024, the Company paid the special cash dividend, totaling $4,216 million. Dividend equivalent payments are made during the Company's first fiscal quarter each year and also upon payment of any dividends declared. Total dividend equivalent payments in the first quarter of fiscal 2025 were approximately $180 million, $131 million of which was associated with the September 2024 special dividend declaration.
Current wording
No dividends were declared in the first half of fiscal 2025. In September 2024, TransDigm's Board of Directors authorized and declared a special cash dividend of $75.00 on each outstanding share of common stock. On October 18, 2024, the Company paid the special cash dividend, totaling $4,216 million. Dividend equivalent payments are made during the Company's first fiscal quarter each year and also upon payment of any dividends declared. Total dividend equivalent payments in the first quarter of fiscal 2025 were approximately $180 million, $131 million of which was associated with the September 2024 special dividend declaration.
Previous wording
The Company utilizes letters of credit to back certain payment and performance obligations. Letters of credit are subject to limits based on amounts outstanding under the Company’s revolving credit facility. As of December 28, 2024, the Company had $61 million in letters of credit outstanding.
Current wording
The Company utilizes letters of credit to back certain payment and performance obligations. Letters of credit are subject to limits based on amounts outstanding under the Company’s revolving credit facility. As of March 29, 2025, the Company had $53 million in letters of credit outstanding.
Rearranged current paragraphs (22)
Current report — wording carried from elsewhere
(1)Net income applicable to TD Group common stockholders represents net income attributable to TD Group less special dividends declared or paid on participating securities, including dividend equivalents. No special dividends were declared or paid on participating securities, including dividend equivalent payments, for the thirteen week periods ended March 29, 2025 and March 30, 2024.
Current report — wording carried from elsewhere
(2)Earnings per share is calculated by dividing net income applicable to TD Group common stockholders by the basic and diluted weighted average common shares outstanding.
Current report — wording carried from elsewhere
(3)Refer to “Non-GAAP Financial Measures” in this discussion and analysis for additional information and limitations regarding these non-GAAP financial measures, including a reconciliation to the comparable U.S. GAAP financial measure.
Current report — wording carried from elsewhere
Cost of sales during the thirteen week period ended March 29, 2025 increased as a percentage of net sales. This was primarily driven by foreign currency losses recognized in the second quarter of fiscal 2025 as foreign exchange rates, particularly the U.S. dollar compared to the British pound and the euro, weakened in the second quarter of fiscal 2025 compared to fiscal 2024. Excluding the impact of foreign currency losses (gains), cost of sales during the thirteen week period ended March 29, 2025 slightly decreased as a percentage of net sales. This was primarily driven by the application of our three core value-driven operating strategy (obtaining profitable new business, continually improving our cost structure and providing highly engineered value-added products to customers) coupled with fixed overhead costs incurred being spread over a higher production volume.
Current report — wording carried from elsewhere
Selling and administrative expenses as a percentage of net sales for the thirteen week period ended March 29, 2025 decreased compared to the thirteen week period ended March 30, 2024 primarily due to the decrease in non-cash stock and deferred compensation expense and acquisition transaction-related expenses.
Current report — wording carried from elsewhere
•Earnings per Share. Basic and diluted earnings per share was $8.24 for the thirteen week period ended March 29, 2025 and $6.97 for the thirteen week period ended March 30, 2024.
Current report — wording carried from elsewhere
EBITDA As Defined from acquisitions for the Power & Control and Airframe segments contributed approximately $27 million in the aggregate to the increase in EBITDA as Defined. EBITDA As Defined from acquisitions represents EBITDA As Defined from acquired businesses for the period up to one year from the respective acquisition date.
Current report — wording carried from elsewhere
•Net Sales. Net organic sales and acquisition sales and the related dollar and percentage changes for the twenty-six week periods ended March 29, 2025 and March 30, 2024 were as follows (amounts in millions):
Current report — wording carried from elsewhere
Organic sales represent net sales from existing businesses owned by the Company, excluding sales from acquisitions. Acquisition sales represent net sales from acquired businesses for the period up to one year from the respective acquisition date. We believe this measure provides investors with a supplemental understanding of underlying sales trends by providing sales growth on a consistent basis. Refer to Note 2, “Acquisitions,” in the notes to the condensed consolidated financial statements included herein for information on the Company's recent acquisitions.
Current report — wording carried from elsewhere
The increase in organic sales of $251 million for the twenty-six week period ended March 29, 2025 compared to the twenty-six week period ended March 30, 2024 is primarily related to increases in defense sales ($149 million, an increase of 10.6%) and commercial aftermarket sales ($134 million, an increase of 11.6%), partially offset by a decrease in commercial OEM sales ($17 million, a decrease of 2.1%). The increase in defense sales is primarily attributable to continued improving U.S. Government defense spend outlays. The increase in commercial aftermarket sales is primarily attributable to the strong demand for air travel resulting in higher flight hours and utilization of aircraft. The decrease in commercial OEM sales is primarily attributable to the adverse impact on aircraft production from the Boeing machinist strike.
Current report — wording carried from elsewhere
The increase in acquisition sales for the twenty-six week period ended March 29, 2025 is primarily attributable to the fiscal 2024 acquisitions of Raptor Scientific, CPI's Electron Device Business, SEI and FPT.
Current report — wording carried from elsewhere
•Amortization of Intangible Assets. Amortization of intangible assets was $97 million for the twenty-six week period ended March 29, 2025 compared to $72 million for the twenty-six week period ended March 30, 2024. The increase in amortization expense of $25 million was primarily due to the amortization expense recognized on intangible assets from the fiscal 2024 acquisitions.
Current report — wording carried from elsewhere
•Interest Expense-net. Interest expense-net includes interest on borrowings outstanding, amortization of debt issuance costs and original issue discount, revolving credit facility fees, finance leases, interest income and the impact of interest rate swaps and caps designated and qualifying as cash flow hedges. Interest expense-net increased $130 million, or 20.8%, to $756 million for the twenty-six week period ended March 29, 2025 from $626 million for the comparable twenty-six week period in the prior fiscal year. The increase in interest expense-net was primarily due to an increase in outstanding borrowings and a $37 million decrease in interest income. The weighted average interest rate for cash interest payments on total borrowings outstanding was 6.2% for the twenty-six week period ended March 29, 2025 compared to 6.3% for the twenty-six week period ended March 30, 2024.
Current report — wording carried from elsewhere
•Other Income. Other income was $32 million for the twenty-six week period ended March 29, 2025 compared to $8 million recorded for the twenty-six week period ended March 30, 2024. Other income for the twenty-six week period ended March 29, 2025 primarily related to a gain on sale of business, royalty and other income and the non-service related components of benefit costs on the Company's benefit plans. Other income for the twenty-six week period ended March 30, 2024 primarily related to royalty and other income and the non-service related components of benefit costs on the Company's benefit plans.
Current report — wording carried from elsewhere
•Segment Net Sales. Net sales by segment for the twenty-six week periods ended March 29, 2025 and March 30, 2024 were as follows (amounts in millions):
Current report — wording carried from elsewhere
The change in Non-aviation net sales compared to the twenty-six week period in the prior fiscal year was not material.
Current report — wording carried from elsewhere
•EBITDA As Defined. Refer to “Non-GAAP Financial Measures” in this discussion and analysis for additional information and limitations regarding these non-GAAP financial measures, including a reconciliation to the comparable U.S. GAAP financial measure. EBITDA As Defined by segment for the twenty-six week periods ended March 29, 2025 and March 30, 2024 were as follows (amounts in millions):
Current report — wording carried from elsewhere
(1)Calculated as a percentage of consolidated net sales.
Current report — wording carried from elsewhere
EBITDA As Defined for the Power & Control segment increased approximately $187 million, an increase of 18.1%, resulting primarily from higher organic sales in defense and commercial aftermarket. Also contributing to the increase in EBITDA As Defined was the application of our three core value-driven operating strategy and positive leverage on our fixed overhead costs spread over a higher production volume.
Current report — wording carried from elsewhere
The change in Non-aviation EBITDA As Defined compared to the twenty-six week period in the prior fiscal year was not material.
Current report — wording carried from elsewhere
Corporate expenses consist primarily of compensation, benefits, professional services and other administrative costs incurred by the corporate offices. An immaterial amount of corporate expenses is allocated to the operating segments.
Current report — wording carried from elsewhere
During the first quarter of fiscal 2025, the Company repurchased 252,800 shares of common stock at an average price of $1,248.65 per share for a total amount of $316 million. During the second quarter of fiscal 2025, the Company repurchased 42,669 shares of common stock at an average price of $1,249.52 per share for a total amount of $53 million.