TransDigm(TDG) - 2025 Q3 - Quarterly Results

Financial Performance - Net sales for Q3 2025 increased by 9.3%, or $191 million, to $2,237 million from $2,046 million in the same quarter last year, with organic sales growth at 6.3%[3] - Net income for Q3 2025 rose by $32 million, or 6.9%, to $493 million compared to $461 million in the prior year, driven by increased net sales and lower refinancing costs[4] - Adjusted net income for Q3 2025 increased by 7.1% to $558 million, or $9.60 per share, from $521 million, or $9.00 per share, in the same quarter last year[5] - EBITDA for Q3 2025 increased by 12.9% to $1,123 million from $995 million in the comparable quarter, with an EBITDA As Defined margin of 54.4%[6] - Year-to-date net sales for the thirty-nine weeks ended June 28, 2025, increased by 11.1%, or $640 million, to $6,394 million from $5,754 million in the prior year[15] - For the thirteen-week period ended June 28, 2025, net sales increased to $2,237 million, up from $2,046 million for the same period in 2024, representing a growth of 9.3%[35] - Gross profit for the thirty-nine-week period ended June 28, 2025, was $3,841 million, compared to $3,413 million for the same period in 2024, reflecting an increase of 12.5%[35] - EBITDA for the thirteen-week period ended June 28, 2025, was $1,123 million, up from $995 million in the same period of 2024, marking a growth of 12.9%[37] - EBITDA for the thirty-nine week period ended June 28, 2025, was $3,299 million, up from $2,772 million in the prior year, representing a year-over-year increase of 19.0%[40] Guidance and Projections - The company is raising the mid-point of its fiscal 2025 EBITDA As Defined guidance by $40 million while decreasing sales guidance by $60 million due to lower than expected commercial OEM sales[21] - Fiscal 2025 net sales are anticipated to be in the range of $8,760 million to $8,820 million, reflecting a 10.7% increase at the midpoint compared to fiscal 2024[22] - Adjusted earnings per share for fiscal 2025 is expected to be in the range of $36.33 to $37.15, an increase of 8.1% at the midpoint compared to fiscal 2024[25] - EBITDA As Defined for fiscal 2025 is anticipated to be in the range of $4,695 million to $4,755 million, representing a 13.2% increase at the midpoint compared to fiscal 2024[25] - For the fiscal year ending September 30, 2025, the guidance midpoint for net income is projected at $1,956 million, with an EBITDA as defined of $4,725 million, indicating a strong operational performance[43] - The adjusted earnings per share guidance for fiscal year 2025 is set at $36.74, reflecting an increase from the previous guidance midpoint[43] - Current fiscal year 2025 net sales guidance is revised to $8,760 to $8,820 million, a slight decrease of $60 million from prior guidance[45] - The weighted-average shares outstanding for the fiscal year 2025 guidance is projected at 58.175 million, a slight increase from 58.150 million[45] Acquisitions and Expenses - The company completed the acquisition of Servotronics, Inc. for $47.00 per share in cash and has entered into an agreement to acquire Simmonds Precision Products for approximately $765 million[9][12] - The company incurred acquisition transaction and integration-related expenses of $32 million for the thirty-nine-week period ended June 28, 2025[37] Cash Flow and Financial Position - Net cash provided by operating activities increased to $1,531 million for the thirty-nine week period ended June 28, 2025, compared to $1,473 million for the same period in 2024, reflecting a growth of 3.9%[40] - The company's total stockholders' deficit improved to $(5,004) million as of June 28, 2025, compared to $(6,290) million as of September 30, 2024[41] - The company reported cash dividends declared per common share of $35.00 for the thirty-nine-week period ended June 28, 2025[35] Interest and Expenses - Interest expense-net for the thirty-nine-week period ended June 28, 2025, was $1,152 million, compared to $943 million for the same period in 2024, an increase of 22.1%[35] - Interest expense-net for the thirty-nine week period increased to $1,124 million from $912 million in the previous year, highlighting rising financing costs[40] Risks and Challenges - The company anticipates that future performance may be affected by risks including supply chain constraints and geopolitical events, which could impact flight hours and customer profitability[33] - The company experienced a decrease in foreign currency exchange losses, which were $11 million for the thirty-nine week period ended June 28, 2025, compared to $3 million in the prior year[40]