TDG - Earnings call 4 2023 | TransDigm Group Incorporated

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Operator

Good day, and thank you for standing by. Welcome to the TransDigm Group Incorporated Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions] Again, please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Jaimie Stemen, Director of Investor Relations. Please go ahead.

Jaimie Stemen

to XXXX welcome Conference Quarter and Call. you, TransDigm's Fourth Fiscal Earnings Thank call TransDigm's Lisman; morning Executive on this Presenting the are Officer, Wynne. Stein; Operating Financial Officer, Co-Chief President Officer, Chief Mike and Sarah Kevin Chief and is Also Co-Chief Joel Operating our present call Officer, the for today Reiss. slide Please website supplemental to replay call obtain transdigm.com our and information. visit a at deck

not Before statements. during this made you that we statements forward-looking begin, the are which company historical are would fact, like to remind in call,

could that the cause results For refer further the factors information of website expressed with in important materially Investors differ implied to filings our those through or forward-looking actual from SEC latest about to please available at the section the sec.gov. or company's statements,

share, the to call, for will most all and The and reconciliations. non-GAAP company in would tables specifically also are and measures footnotes EBITDA, the measures. adjusted presentation the see like adjusted during of applicable be earnings we a course financial to net Please of referring as comparable that GAAP advise which defined, earnings EBITDA income of per the release you related directly the

over will turn I now Kevin. to call the

Kevin Stein

Thanks today. morning. in Good calling for

the few overview Then and usual off our strategy. Sarah of will A and Mike First, start our fiscal I'll on color comments quarter. the with quarter the outlook. about quick discuss 'XX give additional

and to Considering Board XX X now as Merv XX, outstanding each They sincerely John's creation on director retirements, of and October dedication of the X directors Merv TransDigm. the We have since these XXXX directors to years. Board, had Board value XXXX. Merv over and announced appreciate we previously we As and comprised served John contributed John truly on long-term since an job from TransDigm the directors. both is has our our done retired TransDigm

to board leaders we TransDigm. oversee feel the appropriate the term, is sets qualified highly our skill with and composed size of XX For and of near appropriate guide

continue Board always regularly However, as the assess will do, the we we to future. composition into

today. we on industry this. in bad the through phases both focus cycle. of To of in and business good as the of intrinsic to value our To on well times we are creation unique shareholder as here strategy steady all believe moving reiterate, summarize of in are believe reasons the the our consistency why we aerospace Now the some

Our generated by extended XX% unique products. sales of have which from comes revenues, stability relative have higher any the provided and significantly our are our downturns. of typically Most aftermarket proprietary over in margins, net EBITDA generally period,

We strategy, consistent follow long-term specifically. a

operate proprietary we significant aftermarket First, own and content. aerospace businesses with

value-based Second, we utilize a simple, methodology. well-proven, operating

PE-like a our to unique part we of have our decentralized And structure path aligned we we compensation with businesses see that allocation where methodology. a capital system a value-creation shareholders. organizational clear fit and and structure this a Fourth, and strategy Third, closely lastly, are acquire returns. key

allocation of shareholders the Our focused equity-like public well value as do details our long-standing a give of stay capital. with of creation liquidity careful the is we this, to goal To on returns our market. as both private

with from EBITDA and both the saw defined you total QX in another coming out as As release, margin our performance with revenue We closed we in operating quarter. solid year had earnings strong. good

as revenue guidance and 'XX at fiscal end guidance. fiscal that margin published year of our high full the defined our recently For EBITDA most came in surpassed the 'XX

travel to trends OEMs and making remains Global continues demand remain the favorable normalization. for aircraft are still is market progress as recover aerospace moving industry steady high. towards headway traffic on production. Commercial air forward and

in rates progress results comparison to well levels. and adversely remain made below There be our However, OEM total continue and air still pre-pandemic travel is levels. industry for remains levels pre-COVID be affected production to slightly the to below pre-pandemic aircraft

quarter, also saw market the improved aftermarket bookings channels, during defense. in we OEM, commercial in channels. for Revenues our of healthy commercial business, major and revenues sequentially a these growth all our our all X and In of market X

Our is commercial quarter. aftermarket to the and the XX% the Contributing in EBITDA with operational strong our disciplined margin to recovery as cost in continued revenues strict was our approach structure defined management. margin focus along

had cash close cash. ended we Additionally, good of billion flow quarter generation million of QX in $XXX the with $X.X operating and over to

We cash through XXXX. expect steadily generate significant additional to

update capital on allocation our and Next, activities an priorities.

decided more dividend dividend on late our we've later. over share. paid special of allocated was of per shareholders in will acquisition in to completed Calspan address XX. months. X aggregate, this including pay $XX this and May, past In will under be our paid in mentioned As press The release, have dividend November capital a billion -- of to interest in the $X.X to be this November, we Sarah our

leading global CPI, in release subsystems The the also and components Also, and serving cash. for billion are content in $X.XXX acquire a presence [ to business agreed Device across defense strong manufactured this defense proprietary is Electron communications aerospace aerospace and by significant products we electronic business today, we CPI's disclosed highly market. as and primarily major aftermarket a manufacturer power industries, our business engineered platforms. of press and the components with approximately Electron earlier of ] known Device

to 'XX. the in XXXX. business currently fiscal acquisition revenue year September ended for our electron the quarter by The CPI's third XX, million generated its end of approximately device close expected is $XXX fiscal of

over and earlier, a exiting sizable $X.X fiscal $X.X end cash the 'XX As our for to with Pro forma of balance billion balance year growing. billion. are close fiscal dividend, mentioned we cash is

we'll continue dividends. acquisition and potential and which include the electron repurchase CPI's we general corporate purposes, assessing share for acquisitions, program stock under closely may of leverage credit repurchases utilize devices and markets opportunities the to business As future our be always, to monitor

fit M&A current model. we that the continue opportunities for look actively M&A Regarding pipeline, to our

of than targets remain out look months, deal we XX potential pipeline encouraged the slightly and have continue typical we over a concerning As next XX to flow. to stronger

in that fit targets on our the As comment I long cannot confident usual, the midsize acquisitions for that range. a or predict is closings, and portfolio. mostly small there runway possible remain we but potential are

into our new As capital the TransDigm at allocation priorities are unchanged. we year, move fiscal

priority is dividends. M&A; do fourth via we though in do this third, capital our or seems and our take first accretive consideration. share return buyback this to businesses; paying shareholders down disciplined time, Our option to A at reinvest second, unlikely debt still into

on commercial in The and revenues end we continued the by fiscal outlook no were to primary for fiscal divestitures markets 'XX, XXXX. acquisitions 'XX. additional a assumes trends. Moving our based recovery expectations Throughout is in and encouraged strong commercial for our fiscal or through current our recovery seen guidance

market commercial 'XX bookings I guidance, OEM, are strong positive aftermarket fiscal end and X revenue our commercial channels, Trends on the Our shortly. market of all which support will major defense. commercial comment across

We cautiously the prevailing optimistic conditions are will that to continue evolve favorably.

preemptive we Changes to And taking condition for will will markets our necessary, could primary in guidance any impact our be this do. warranted. as as We watch that in revisions market lead end always react including steps might closely XXXX. and the to

guidance billion The of Our the $X.XX initial Slide is midpoint guidance X operations is also revenue excluded this up fiscal guidance. for approximately found pending the from The can or business fiscal XXXX in XX%. be Electron of our of Device 'XX CPI's acquisition and as presentation. continuing on follows

anticipated reminder working other revenues, QX less This quarters, be are subsequent a days growth fiscal EBITDA assumptions. on the rate than with XXXX EBITDA the market consistent is lower quarters following revenue of As and XX% margins than with and 'XX. guidance X years, to roughly past channel the based

mid- aftermarket XX%. revenue around expect range. Commercial OEM defense high and to percentage range growth in revenue commercial the growth growth We percentage the mid-teens single-digit in revenue

The guidance year, basis approximately and midpoint throughout move from sequentially of with of acquisition. anticipate includes $X.XX about EBITDA XXX around up XXXX. defined QX with QX lower XXXX margin points the margin billion an or dilution fiscal This of XX% margin being recent as than will guidance expected of XX%. fiscal our EBITDA the Calspan lowest is We up

final up adjusted midpoint more assumptions be the is 'XX or will in believe to impacting other XX%. fiscal as are updates. discuss and well with The EPS Sarah we shortly 'XX. along fiscal detail EPS factors we positioned approximately enter some We of $XX.XX anticipated

capital watch react aerospace and continue will As and develop to usual, continue to we closely markets accordingly. how the

have am Let the throughout with value expect industry. year forward from drivers, you structure cost the that operational I expect that commercial the value look by and to the us. on very me come continue and recovery aerospace company's provide pleased and performance strategy We our will this for stating to excellence. to We our conclude remain consistent XXXX fiscal focused

Group let Mike and to hand me Lisman, to few our items. Co-COO, it Now other our performance over recent a TransDigm review

Mike Lisman

start our typical category. I'll of market with key morning. results Good by review

year prior which we makes close the same a businesses periods. of call, our revenue, I'll is the aftermarket. For we in forma to into the OEM that provide and the remainder of typically in basis pro XX% own on the split compared market, our to commercial discussion commentary will In assuming XXXX, the mix both up of period

were XX% OEM revenue to and year Our fiscal commercial about compared total QX year prior commercial the for XX% year the supports for quarter revenue OEM same fiscal Bookings strong commercial of around period. QX. bookings compared 'XX. prior total periods. for compared full approximately in to 'XX the OEM XX% increased by X% 'XX the throughout growth strong fiscal with revenues Sequentially, grew in guidance This

appear to be challenges progressing. labor and chain supply but slowly OEM persist,

increasing commercial the rates bottleneck ramp-up. We Supply OEM remain continue and by Airbus the airline in to its steadily at chains production for strong be the and demand OEM new production aircraft. encouraged Boeing in

broader operating production positioned well ramp-up are aerospace our risks towards optimistic While units we the the remain this to are across targets. that support achieving sector, higher

year increased passenger the Now in largest commercial year XX% revenue our primarily driven business submarket. periods. by compared approximately in far commercial Total aftermarket which full revenue and QX by discussion. with strength XX% the commercial our continued Growth our aftermarket moving by to in is on prior was fiscal for aftermarket submarket, the 'XX

a compared freight also our increases interior by submarkets and in year were growth These decline in biz jet minimally offset our to We saw prior submarket. slight QX.

biz to return freight while in that the sustained past over decline saw submarkets, global the our is the softness plus and post-COVID likely in globally now flying this submarket and volumes, The the interior, in we minor commercial seen buoyed declines global aftermarket continues primary quarter. passenger, to contributed freight jet year

were bookings past year nicely. 'XX. approximately growth strong XX Sequentially, same to full commercial total for quarter compared months our aftermarket And the levels the this bookings bookings prior fiscal Commercial aftermarket percent these increased in exceeded revenue period. in the for commercial revenues year, for support XXXX by mid-teen aftermarket guide commercial range fiscal commercial over the aftermarket aftermarket sales The strong X%. in

see commercial the market, to in and have booking trends, quarter, defense but average can our XX-month rolling forecasting when just what lumpiness some we reminder, not is often a see there due we aftermarket, lumpiness we This never that in is market. historical recent it look seen quite at nonetheless. end historically the end As as as can this always most big

Turning referencing traffic still IATA in growth levels to broader market few dynamics pre-pandemic air expected than has the September. Globally, momentum. over in past is traffic data to Global but recent for a signal remain continued revenue recovery traffic the return lower passenger to months air levels, XXXX. miles and still steady most XXXX

continues ago down expect being months was compared steep surpass September, up year, in compared did significant China reported in traffic pre-pandemic. pre-pandemic this continues air X% X% and improve ramp-up for Domestic surprise. from is air to China past XX% most activity only global a December. September traffic levels. in not And a travel Domestic travel recently X to was was This to pre-pandemic. to it data and a nice China up the such in domestic improvement We

to the domestic September in Shifting X% pre-pandemic above travel U.S. over air came traffic. for

about strides traffic globally months. to the ago, about end travel over travel pre-pandemic continued compared of the recent has X%. most past A levels, September, depressed June, to International for XX% was make at data the international but this quarter in few down was only

our and XXXX Overall, levels XX% biz activity aftermarket Business jet well on will to by the pandemic jet to reached global revenue over utilization XX% the Now commercial submarket. how is was this Within our some starting submarkets, above with about continues the color highs time upcoming below submarket, pre-pandemic pre-COVID. business jet tell normalizes temper. in does remain above jet quick months. our and biz

Next, cargo on the submarket.

below struggle declines, positive of smaller year-over-year a the aftermarket months X air reminder, one continued just our to this to slightly last commercial volumes months. is Global been XX submarkets returned As straight growth bucket. Tekalometers, cargo have these pre-pandemic levels. after within Cargo flattish have and CTKs to of

now and the the less capacity aircraft on belly passenger being seen rates Additionally, of are side. have park to an full due freighter used cargo increase in return

in our and likely some on last the I in submarket of sustained full booking we've the freighter see the started a to that declines challenges As market aftermarket, softness freight earnings result of call, as commercial our mentioned CTKs referenced.

to aside what summarize and commercial management how is our currently about. think submarkets team, quick aftermarket we, going One on as in a

activity. shortly If a present run-up now seeing precipitous COVID's After a look lines. over returning have levels years. back how of first onset, thereafter in the trended we at pre-COVID drop take in to step these their big a various trend to these stages original saw X of trends, few markets back at from submarket, by freight years passenger excess the At in pre-COVID you of and a are to the past in followed things

freighter surge trend. it, with back traffic to cargo and full aircraft back continues traffic belly is while dropping cargo, Passenger to

to We this largest aftermarket our and Passenger is full the see this between on submarket we passenger. dynamic. win commercial are far by freighters within trade-off happy and

and high This call. compared gave X%. with full growth Sequentially, to of mid- revenues, expectation the QX defense revenue. or both Shifting which growth our grew at by market fiscal defense revenues The the year OEM in grew includes year aftermarket last for revenue, periods. single-digit XX% total 'XX total guidance on the approximately our traditionally full by XX% market, prior defense to exceeded last our XX% approximately below and which we the in that of defense range is revenue year

also significantly are up year compared this quarter same to prior period. the bookings Defense

U.S. We our government which reflected the spend continue in bookings see in defense to is revenue performance this and improvements outlays defense quarter.

will precision have steady times improvement. We be see before, are sales but with difficult. as said But lumpy. come, bookings hopeful is we and and the we'll to sales know forecasting them continue We defense can and many bookings accuracy

fiscal finish a op performance we're operating XX was unit I'd by teams the Lastly, efforts 'XX. and shareholders. for strong like our the and good delivered year, to with during recognizing our of accomplishments It they pleased

our remain the and operating enter strategy new to for now very products. we strong As our our fiscal teams our servicing demand management committed consistent year,

over turn like I'd that, Sarah to it With CFO, to our Wynne.

Sarah Wynne

'XX. morning, everyone. matters few then Thanks, for to going financial Mike, review good and I'm also and fiscal for a 'XX additional our expectations fiscal

rate organic our quarter, markets. in few fiscal liquidity. data rebound 'XX by and aftermarket OEM the was the growth, In driven XX.X%, additional on our commercial continued a taxes First, and fourth points organic growth end

GAAP On year taxes, their our and the adjusted within expected tax rate finished ranges.

and above for good driven flow. and that the to billion year, we we than expected, Kevin Mike higher XX%. GAAP had less the Our mentioned, traditionally extra as we generated billion taxes cash the fiscal adjusted rate EBITDA was cash just interest originally over and by operating guidance primarily flow, our which and cash carries XX% $X.X and payments, defined roughly was CapEx 'XX $X.X cash rate On performance cash free was the under EBITDA original liquidity, the

As from the dividend sheet for is the was for our XX. announced is be quarter. last debt-to-EBITDA November $XX net expected when with of dividend. the debt-to-EBITDA $X.X X.Xx X.Xx. of cash Pro $X.X billion ratio share per the or date year-end, pro billion the over The we this At Kevin balance down end at to morning, forma payment forma net on dividend ended $XX our approximately X.Xx, year the ratio mentioned,

caps, rising our the us to interest collars We through rates, gross cushion against swaps continue rate XXXX. least at in $XX of We environment watch This interest a hedged provides closely. combination balance immediate adequate any term. XX% debt through and remain rising the total billion on rate

line elevated ratio, pre-COVID in of into more in which, expense coverage the monitor we important in with ended basis, pro on interest a is a sits becomes environment interest which a to Xx. a take higher range reminder, as X.Xx of comfortably rate EBITDA at our rates these metric consideration and average Our X actively and to interest year forma times

operating these business to be comfortable continue within We brackets. the

actively approach interest boost changes time. the to do at this environment With returns, any to approach changes our not anticipate watching closely, we're in potential rate our any regard equity our debt to big to long-term using but

more my Next, our and going interest the all expect $XX and the expense, subject of some to on CPI's here of data Electron the to which give count. the end that financial acquisition fiscal in third business dividend, I'm but of quarter exclude share details and comments around approval, the payment Special the by entirely, note expectations, taxes we 'XX fiscal assumptions still Device 'XX. regulator on to is of include close

$X.XX this is cash an weighted And expense average be X.X%. This rate over expected approximately full about interest to assumes in 'XX. interest billion year. rate for a of of the to Net equates average X.X% fiscal estimate

tax fiscal interest XX%. cash XX% the versus expected decrease EBIT 'XX able our anticipated due for in given On prior expense our are mainly we're to our to and taxes, year rate to all for rates 'XX. GAAP adjusted in The purposes, is deduct to be additional higher the tax the range slight tax of

For we 'XX. to million expect in weighted shares XX.X share shares count, average our be outstanding

taxes, we free for cash to 'XX, leverage interest traditionally be EBITDA dividend, to again, define With November date expected we less $X billion. With CapEx XX, is represents a $X $XX special payment XX. to 'XX. payout share record dividend in the per morning and be over is to just November this fiscal regard is gross billion the our cash payments, regard operations The the date flow of at as payout announced the for liquidity metric defined as to and which TransDigm, fiscal from estimate close and would this cash

additional over end year transactions, $X cash balance imply would which dividend on to cash per a or acquisitions 'XX. the paying ratio the we of the billion $XX the capital After and close debt-to-EBITDA with end Xx in of market no at out net assuming share fiscal sheet, would

CPI's Device the the regulator business approval, and of quarter this is expect to 'XX. we in of third our However, Electron acquisition which end by excludes close subject to still fiscal

potential X% in as typical the are may there to no think we has As actively allocation and with and ratio capital dividends. our X% purposes, share the utilize Kevin debt repurchases outset, we been at to for general mentioned a how acquisitions, acquisition leverage approach range. monitoring the include leverage target to And corporate which this markets change about capital opportunities reminder, or or assessing in future our net

We coverage along interest our the will continue as allocation pursue to to watch strategy. ratio interest expense cash actively this of shareholders capital through with of ratio maximizing value we EBITDA our options to

So we return additional remain our with buybacks cash during pursue via a on think shareholders or M&A to final and/or fiscal dividends good we course flexibility share the position note that, in adequate to 'XX. of

the with to Q&A. operator back that, it to I'll turn off kick the

Operator

Our come first line Wolfe Instructions] question with the [Operator Myles will Research. from of Walton

Myles Walton

the obviously that it, of defense but commercial. the you was closed itself, more maybe than it give on a little of haven't a bit a nature understanding business us little the that I has, context aftermarket little it hoping color you just more CPI looks on bit maybe

list So And maybe been or up? something this does process from is that's more your something how a recently popped that's watch then just perspective, that flow? a while for on

Kevin Stein

at makes aerospace lot vacuum number a over Thanks, power high-power defense. business the of we It A years. generation products, company it products is looked Myles. tube through that type acquisition flow. had times in a a of It came is flies. deal This and applications for is an that

at a medical though but right and is -- This We business, us. aftermarket, applications, it be for be engineered. are of down defense, products overhauled significant a more doesn't. access fairway the little technology tend these Some to this acquisition to there products With years highly is highly, at here. as look to industrial an Big need X X repaired regular and to the component every intervals.

basic the that we tenants provides for. this believe look we So

Myles Walton

coming it's supply you're but watch quick Is a through? was quarter. Is then item, still called pull the there short-cycle one it Obviously, result on chain supply better as about to I stuff in the customer it improved? see of just out expecting sales is that up performance? the one -- defense. slide, And Okay. The sales from it be the X%. or

Mike Lisman

year. XX side demand in was is this picked to heading was free chain we customers stuff and were the on-time side, we stuff supply get a and better -- We and chain is also the them bit regard ship or terms our The us quarter. in The up a to It to to to bookings we bit. in deliveries out that build time. main not It's and with increased up stuff perfectly chain, need saw we're more able than the ease our us both. spot starting XX components of where door, ago, getting well from up, the a which little say, but supply of next were, all to build out sets on getting pre-COVID aftermarket it supply still probably hitting months the back on into

but So it direction, XX months more still there definitely as headwind the do bit as right and work much a heading ago. not in to a say, was, of probably

Operator

Goldman Our Noah with from line next question come of the Sachs. will Poponak

Noah Poponak

by in month could I the quarter? aftermarket bookings pick exact was the apart hoping we

Kevin Stein

that. apart like bookings We don't pull

Noah Poponak

[indiscernible]

Kevin Stein

blood was starting My there. pressure to up go

Sorry, Noah.

Mike Lisman

quarter. even the get don't We

Noah Poponak

Right, as shouldn't. you

that's once the of that close. the went pre you that you add math flow. keep mentioned when deployment change leverage much ending EBITDA then you that, X this through won't once year generating all all balance CPI net the -- sheet, So balance debt-to-EBITDA, capital after and the But you recognizing just even cash turns the and that on close at sheet

leave out with therefore, was a see dividend, to you wanted should lot to that and there So after mean the we guess towards go an balance to sized acquisition that sheet? as And the special that you read maybe pipeline? eye you I the firepower that still on

Kevin Stein

end the the see need what because be year than side. it, with want the to side. next and something more do we of But see fit can the and aerospace, things to stay to on will to our returns be -- make do. the ambitious general. always that's to acquisitions, find and of take and dividend We we're towards to a think like I pretty possibly returns or something no, And you debt, unfolds. deal capital to encouraged look And a with money, in forward deal that's we seeing on go whether you'd we CPI disciplined, a to a going the by hit how on that's we defense lot commercial have we'll think will buyback we find the flow better Even We're we we're opportunities these need We're when commercial do on year. we I -- it's criteria. market other side that acquisitions. that will we or casting will to more need on allocation with TransDigm the Yes, love M&A wide knowledge

Noah Poponak

speak you the And Okay. Kevin, I but if missed profitability maybe it, could to CPIs. of

Just for revenue a take the what we if time? can would on but minute. And over X be then Calspan for are margins touch Where like? multiple, you you could them can just the see me last

bought? some Just there? little market. had little Anything look just longer, Or thought you've did you it bit from noteworthy a had now different, that that kind deal the of what a a that for you questions was

Kevin Stein

Yes.

CPI at margins. TransDigm well, are below well margins think I

very but the don't is is on there the of improve, yet. process. We own this opportunity in think I early to business course,

us We to business. going to acquired and this, say of on comment. So is that I And expand to a business grow the there what we're early we Calspan, have -- too by traditional to think much or -- for we're we looks not and look that would don't us encouraged just it acquisition. component like model. know running our opportunities we're comment granularity ahead On It's and business. different usually find did or to when early I but the at too very for that market slightly vision there. of very by we M&A And aspects the is encouraged Calspan. It much that

is the So model TransDigm still the fact holds that very encouraging.

Mike Lisman

At was X thought we or better on least it set ownership to when of buy probably months a as as based we good little so. [indiscernible] out

Operator

come Vertical next from Research. the of Stallard will line Our question Robert with

Robert Stallard

Just from me. a couple

of the all, First on CPI business.

Are Or it it you does that TransDigm? have intending would within to You of looking non-aerospace here. on? you that sell be sort keep some exposure to mentioned defense

Kevin Stein

We would that within keep TransDigm.

We have company pieces non-aerospace with along a encouraged industrial now of the Absolutely section M&A. part of that come business. by the as

I device exposure about wouldn't mind market, is we very one and interesting that medical this think the more Medtronic a through learning through business.

Robert Stallard

expect a Okay. And fiscal where the of is you and that by it process gradual 'XX to Or How in then progress step on to aftermarket the the that for year half full going goes roughly sort that's 'XX of mid-teens, 'XX. we do see of the down up be to abrupt fiscal fiscal of guidance for as kind going ended end you here? year below by? Are to guidance?

Mike Lisman

on throughout but giving course start expect color up year. we ramp to bit guidance, We'd of quarterly like anything want what the the don't gradual too expect. We the much that little Yes. a of sounds

that's But us for of on some to track sequential there, just revenue because March we ups years. of fiscal year's year percentage happen course way could step year. is days. work the what always expect QX here day right? the the It but know, we 'XX. the XX% much of and It working of total largely prior out. throughout pretty you and doesn't ramp way, landings, goes that forecast sort increases and the the because the As with of over next see expect speaking, I consistent with some lumps a takeoffs the working That lower up

Robert Stallard

Okay.

will number coming year-on-year through So progresses, right? but be down actual year, year progresses rate percentage growth as the the the the

Mike Lisman

That's That's the obvious Correct. a fair. of work. comps assumption result the they and way fair mass and the

Operator

Our come from David Strauss of the line Barclays. will with next question

David Strauss

Sarah. question for a Probably

assume we drag cash in you about I working this $X from billion think year, a I of capital. had think in like of you $XXX past capital define million flow working top on you should as What talked it. that? terms from

Sarah Wynne

Yes.

said, going On we payables, capital Like the you year. of inventory peak neutral. I'd also capital about fiscal $XXX out about saw $XXX as working downside back and you the our in And added to about of this a than probably less where we forward, took million assume was accounts that million. That we some trough we defined more receivable 'XX. put obviously, COVID working

I think neutral now forward. we're and I assume in pretty good going would shape,

David Strauss

question, on Kevin, you're And the first guidance. line think half levels? with of in the your the second half of volumes two of the in mid-teens then That's aftermarket. guess, fair in thinking? question, that now pre-pandemic question. volume being terms growth terms And a to roughly Are it Is price, I what about Okay. parter back aftermarket

Mike Lisman

It's Mike. I'll take that one.

was we pre-COVID not takeoffs Freight plans submarket in is to more across I sorry, -- see we is much the Hellis going back First, the submarket. get with what XXX. bit little if obviously, are it like passengers That's we're in to all where And you'd consistent came passenger in is trending. that, probably in a down, off RPMs to to in, whole volume biz up on close. We're aftermarket XX% and The space, aftermarket close a by The basically to probably stuff is we're pretty what highlighted and that side and up down should XX%. -- commercial now expect, XXX varies piece stand That is FY then and down our within XXX, 'XX, which the volume or something landings so. have commercial interior from jet FY bit where more. too 'XX, the but where the how aggregate across our passenger on 'XX. was expect volume FY FY to in 'XX, back quite XX%

above that bit freight jet in up aftermarket the FY across then well, the subsegment. trending XXX XXX. of then commercial for if and 'XX but FY bucket passenger as biz the space, our both that as big And what a whole as is, the probably as in 'XX we're not probably up And little is defined means sort along volume again, aggregate,

trends, of guys first across your business, real aftermarket, get on slightly question The to, amount year. aim a positive and commercial of our price you second price as price we every on volume and part know,

In implies will of inflation. the heading half. volume give accurate. but amount too accurate, the of environment, direction don't of That's directionally to ahead XX% We directionally get on aftermarket and guide, inflation, aim miles a roughly but that the exact little far of sort price were trends, bit not a real So price you you're ahead sort off. this price half but and of off, it's not price

Operator

come will with Our next line of from the question of Epstein Bank Ron America.

Ronald Epstein

in attend giving less of one that just rates for been the there's world, the and you... kind so forth. competition what's case? guys financial and we've so financial that going things on you And hearing move in So interest and is is in potential given Is of from and there that sponsors your on out things the private -- the equity

Kevin Stein

be -- case. don't that of We lots to haven't see competition. I I found the

was In a wasn't I competitive seen fact, competitive in anything deal. CPI that process. haven't a

noticed have that. not I So

I the pockets. in be aerospace may think defense there and sector, deeper

not one bidding I'm on businesses. there's So seeing that no

wouldn't the things if be think market. was many that there coming case, I to

So we're competitive of a lot processes. seeing

Ronald Epstein

Broadly, to outsiders go mean, we And you vector kind about actually I how when help that? And Got looking in, just did down? is to get seems can it. think a should that fit I'm Got of what things then, you're there's to going the we you an try to I there want answer Kevin, agnostic go? it. what about whole? just portfolio me just this, kind like If kind and how to it. broader model think directions understanding in could could of Or markets? that mean the you a of area go, guys frame as

Kevin Stein

we don't We're Yes. aftermarket aborted. the as a are that at position have we and need They holes looking the for fill things, there that technology in have We noted proprietary. have technologies They about to highly products engineered, have. are agnostic have. marketplace. look We're what market in we or products that content though, to and

long these. very year. believe we'll quite do thing as out to if for fit to we'll products we to So year, and the need across what right and many per the feed aerospace continue we device of if $XXX much on value running have, no defense and us so learn. markets of as and to we reason I technologies and nicely. given that identify model opportunities acquire sure landscape for love you that. will what the utilized and to that acquire we I million now, better. we as outside model all think that have this of that's at commonality. the And we so contemplating There products, But applications and we're we are Does need of in target look Larger hundreds defense. highly about continue EBITDA continue continue find the to will question? full grow many find. fine, and me of we like like different to to your with millions us about grow. with acquisitions every generation to there's EBITDA find many not to continue we'll we this need see heard long am a I'm we going criteria. no as that side, products We It's and this to say at of defense million do side. is the don't is to medical And we be But you don't CPI continue this, $XX again, to see nice our answer for those proprietary do. We -- all other aerospace engineered so There's and hundreds businesses They learn of times, for places and us still dollars grow. I aerospace technologies, many and swing is

Ronald Epstein

does. Yes, it

Operator

the question from line of will Kahyaoglu Jefferies. next with Sheila Our come

Sheila Kahyaoglu

to about talked Kevin, wanted you aftermarket. dilutive. than the growing faster ask OE They're margins. I on points Calspan being basis XXX

do on that how aftermarket EBITDA guidance? mix think your OE So about we versus margin

Mike Lisman

Yes.

the guidance We there. XX% a the we're on aftermarket right? headwind we mid-teens. aftermarket, based of OE in slight the the called So giving slightly around the OE There's outgrows have the

the some right? of on headwind, level tenths the took of math. I type at couple you mean, margin. noise a swag a point If We're it's talking

overcome So nothing obviously The EBITDA just a be is And downwards. won't full us said big that's margin dilution his Calspan. to point year-over-year material that productivity. downward with we Kevin able one of in like as comments, that swings

headwind bit but too OE the a So much up, couple to little not of tenths. a ramp from

Sheila Kahyaoglu

give idea incorporated Okay. in Got on from well I obviously any range. you impact aftermarket, expectations? are? your you to there's below And if ask how guidance, margins they not a just of it. mentioned TransDigm but is on the And wide CPI TransDigm Can it's into us an the margins, below higher then very wanted AOGs

Kevin Stein

I'll the let on Mike the I answer don't But last -- CPI, one. question,

Mike Lisman

I margin, to think Sheila. trying just... were get at you the And

Kevin Stein

for probably on getting early don't It's us -- it's Where it that. to TransDigm yet. well, averages. below see well that. own for it us even to We too do too on early comment comment It's to we

We door. haven't been in the

you. time to be update So then and we'll unpack that, able we need some to

Mike Lisman

but when fleet. second platforms diversified asked assume the so turbofan across ground a across there's fly noise uptick issues of huge racks of and that and from we I of the are gear older market-weighted and not We're our that the Sheila, nothing and something it's it said, that. you're the EOG, to It's plan and -- going material some This But factored some on to expect your not fleet aircraft you then we it's newer not to about probably keep out think to a about grounded, a big aircraft that question, And trying airlines exacted flying. older more guidance into it I as those of are given comes lesser stuff up. that probably has that And get material those the it's there level. to and our a little far aircraft tailwind, from. half as upside all bit a

Operator

line Herbert RBC of Our next with from come Ken question will the Markets. Capital

Kenneth Herbert

to China initial when you Mike, or it relative the about in upside. biggest was maybe Kevin 'XX, source expectations, aftermarket, Maybe of sounds think like

you of guidance today? geographically at of either and where think parts maybe As the look see upside biggest maybe the market, or and about could guide you the we some market fiscal of other the as 'XX mid-teens in the potential dynamics

Mike Lisman

Yes.

things. guess I two So

ready demand supply market from the to as the if quickly, it's this grows there. guide more saw First, you if be we'll our year,

didn't right? as us big to as provided we when year for China that, XX%. were So strength I guide surge last did think think the right? our with do we when up we the or was pocket to down double-digit went over international more a our aftermarket probably elsewhere. Asia That's what that, knows well, percentage we do carried a depressed back. original conservative skis expectations finished guidance little and more rally well that's we comes And FY pre-COVID. when than still 'XX. is The contributor Pacific, still it stuff our down the that out a this in up the we back bit from, versus could It is op that, we where though, double was of same get it commercial with We'd bit specifically look most. as out Hard thing occurs. year came for right? the to units it where forecast Who

right? still we've and class seen sort But below It's that you RPMs, trend And where in years. after line. X% should look couple get got demand travel, source year. not stuff on should us of on most think in demand right? out the as you as GDP of in you where a coming you knows as that per to in of back it global but past on, And when sort sort drives back of sector a where that prior who a bit where a sort stuff. we've back a prior we're biggest downturns, demand, been sort bit getting the X/XX, pent-up financial see. that we all trend we'll a years, out FY line, And we guys know FY beyond I is just step FY take original went to middle what crisis air now the 'XX, But 'XX. that of goes. was of pent-up this underlying of good because to get of years And 'XX, 'XX, for of to X rising the growth RPM original be not couple would tailwind and continue be back tailwind were think FY did, line we've this were now recovery trend back, we there And and upside, pent-up who and the there's line just of if trend downturns, well that we'll how there you you But demand past out in growth got potentially as FY based still that, But the you bit year of knows that others heading. 'XX. there's for 'XX, quite FY a a

Kenneth Herbert

that look And on would concern the around of a part bit and different as seeing the terms you is assumption at in last more market? to that give pushback at all Are of side. little it maybe spare relative years, to pricing from to -- come 'XX of think in helpful. And a you any to in airlines like couple pricing? you the sounds from That's a reason about passenger the strength going is lot anything

Mike Lisman

No.

little said earlier, year. No Same we've try That's what this year. aim had inflation. a of bit what to historically. playbook ahead to pushback. of we we'll this get we achieved As do huge real always we've price That's

revenue and are parts I the to flying the their keep airlines in now. think get air the generating aircraft happy

Operator

from Cowen. will with line Gautam of TD question next the Khanna Our come

Gautam Khanna

you you're on now, lot. lot airline a or they don't stocks a whatever scope are that less in size. would guys up Anything because just things. follow we under down seeing than purchasing obviously some in evidence the know see order if nature... They're or just any normally airline are companies. aftermarket, pressure I buying seeing of change destocking these the two in to wanted just from behavior average any I of One, of the customers

Mike Lisman

airlines. intelligence not volume inventory of much the as into I discounts anyway. to of not seeing mean, We're you it's that. know, But them get generally, levels Yes. exact giving the we're hard

tend at don't described think seeing we've much our much seen I all. there. too hold they of don't no, to So you the we're very not of any But dynamic stuff.

Gautam Khanna

then to relatedly, And between discernible airlines direct distribution in Good. differences the Okay. any the channel and

Mike Lisman

No.

most much commercial aftermarket, growth a part, with has aftermarket the aftermarket tracking bit us for tracking and POS commercial our commercial been the about for channel whole this into total For flows together justice distribution there -- of which dollars. closely. rough the ebbs quarter, is pretty That's a the pretty revenue been year,

moving So inventory no disconnects much or of but pretty here consistently and not little throughout meaningful distributor, been anything. same of because the that, exactly the there, in bit They've unlocks year. because noise right, get do direction you

Operator

line of from Gursky question the Our come will Jason with next Citi.

Jason Gursky

make on wanted just can relative modest shift towards in Sheila that comment to a little margin the to rate pretty margin mix earlier think OE, up aftermarket headwind that your in I higher growth you there leads the touched productivity. revisit being perspective to a a from question you the that

get out impact retirements know kind have on volumes to time curious potential is leverage. think outcome actually is margins over it so the you expand just goes upward then risks OE accelerate allow a margins? curious as term, and retirement how better of and potential aftermarket and look that, how and all on growth OpEx the some widening a higher into future OE gap can of longer them? you of between whether you the just about business, to has margins? that some talk Can know, higher. you think the bias we to of price growth some as get to I'm the opportunities you side, about and of for margins And that question to certain your the aircraft further ramp internally in As the about Kind as whether, and accelerating OE you

Mike Lisman

light here that 'XX couple tough color which generally, FY how range-bounded give to try aircraft out it that that I'll the given years the Sure. is shed about on of is enough, make factors tougher. why we a in various some little bit as guidance that even money service. think we of on is a margins But out do good after retirements, to come really into to we new still on pertains obviously,

historically warranty it's the look XX% age, now little tailwind something If been X-year it a older historical us. That something I slight out a like XX%. a average of versus at bit for is closer But as get ramps But XXXX again, aftermarket or production creates material. closer of the the time, you on that's the OE of Again, we'll flying like fleet fleet really window probably to think than expect margins average. well. XX% newer commercial historical like tremendously attractive still period make as stuff the that the nothing you'd so, to up very the time over through to

historical They're the seen average dynamic for us that. rate are same We from value being low. with much have and fleet. content well other on this products is think real not seen were it USM guys. higher price you from that count retirements half targeted of the we the The where there from of on that works monitor The engine question points lot some as get I the primarily avionics going, historically you We've and the side. there know, X.X% you though. hurt not the a negative USM of as going our We the We as retirement, just impact on time, way dynamic really forward, is of historically. don't the impact like

a look something always it's monitor expect we So we but and headwind there. time, at don't real huge

ramps growing maybe we but And as a couple obviously, aftermarket going well years here the the going little So to bit is up OE continue nothing for insurmountable. of headwind, forward, out. generally, a margin think, of a

good in think we're we So spot. sitting a

Operator

will the Liwag from with Kristine Morgan of line Our come next question Stanley.

Kristine Liwag

generating a sorry, the delay Kevin, free Maybe strong cash step I Noah's answer there to earlier taking up back, there. mean was follow-up on -- your flow. question, a following enterprise is on

year the and a and capital deployment capacity year. still for have and acquisition digest next desire to special this dividend CPI able significant You're

environment, the taking interest you leverage current your rate into consideration next So what's event? for year deployment target your capital assess when next

Kevin Stein

Yes.

in her to Sarah and how range. I mix. the where would that And to are where she really this that respond, like that, this go in give range. said, as X there forecast historical markets comfortable we We're we sit. be We're that's I But to said in better into comfortable the M&A think all range. to that's you can't in comfort I for We'll would like the X Xx. opportunities will see think Xx. -- our than a capital

Kristine Liwag

the I is add one defense the I margin, had Defense. operating a mean of model with with on XX been And years. of in TransDigm. think the the I the over been pricing Great. IG under underestimated strength series past could microscope regarding if But strength investigations what's

TransDigm as And a production employee that much is more margin So efficiencies? how something looking hundred margin you've on the practices at in in is the defense, acquired in that expansion basis businesses you best see few expansion? there could points this manufacturing,

Mike Lisman

a them of across new growing mix value defense, per our all the going that we little of all price kind playbook getting of reason that's execute EBITDA margin no through percentage would of X businesses, every our Across point change we we look have performance we see And to if as year. year of, little Most and all cost to businesses. bit of well. obviously, our on bit target real target reductions, of a and I continue business, to forward. drivers. sort close drive of that a parts there -- true whole That's improvement a playbook,

bit productivity out and of getting then stuff inflation. New price real also business of a ahead costs driving and little

Operator

from the Our next Gavin come UBS. question of line will Parsons with

Gavin Parsons

go assume on you're And I is where growth you year? think amount implies of ask jet, transport? you just in rates that And the on OE but I decent are in the XX% wanted levels where pre-COVID kind biz back build organically, of a to think, above XXXX.

Mike Lisman

little about that's maybe think right, bit I below. a

the of [ past all the peak, issue way back then to not makes point. if MAX the 'XX that I think before went [indiscernible] ] happened, obviously the sort you OEM XX best comp the

but the don't OEM exact jet, I down of think with go And we This looked Biz we've we're so a quite are you to on think And 'XX. back the commercial I them me, we're So think Airbus, need at Boeing I a yet, stats front have in obviously, bit. bit to I recently. actually that's down. transport the side side below. back.

across I -- the guys a and headlines are down. book-to-bills a we jet do those volumes terms quite are The up still doing up narrow-bodies same the volumes doing the And biz think next are quite are well, bit. you in big quite guys side, OEMs. of -- read widebodies well bit and and transport the production

period. Hard that widebody prior in you gets estimates. it's find peak projected as the you hard at It's the to volume production others. as if think forecasts, go to and I look and projecting at widebody someone find hard your find look well to guys' back to who's

shift out the just the And a way some airlines more XXXX, XXXX, to of go you guys all for narrow there's to body. XXXX, been

will become more therefore, where heavily has that's seems it the backlog and production weighted the where So be.

Gavin Parsons

it past cost inflation Got see of kind it. but industry. feel of overall can some And maybe guys seems you kind in and aerospace defense Do pressure the on inflation there's like your peak the on side? like obviously, wages trends, we

Mike Lisman

not XX inflation your the has current of to We're to of forecasting, think kind goes levels go this and phenomenon. back level, inside say. And at anybody to this usually, X-year periods years, up one to do a it's saw kind We macroeconomic coming. macroeconomic the that. Hard respective past you of it spiked forecasters, I and X-, don't look if where

down, the down, we'll for hope for And certainly we put the That's certainly it. on but planned the be we best, the it year. coming way that, we count So good obviously, count this on together don't it see if but necessarily goes -- plan worst. to don't for

we we a business, a earnings that have mentioned I area, stuff, they it's In been publish U.S. seem say labor that changed our I couple And a inflation much and was of past few down in are the when pressures terms know in little still readings and asked, would of high. here have to percent maybe I prior kind CPI come calls the doesn't higher. of bit seeing months. that dynamic the Europe very is X-ish on think on question sort and in materials on this of what

prior business. any the We of off really levels haven't kind seen across of our coming

Operator

Our Truist from Osterland next Pete question will of come the line Securities. with

Peter Osterland

on Michael I'm for this morning.

fiscal Just wanted what's expectations to growth driving defense market. in parse out in 'XX the your

that And So any dynamics could us then just there? on growth with by the pricing how maybe impacted color give anything and budget you on your environment? be expectations the DoD can

Mike Lisman

continuing that together that little together -- that a the about the sure The or about we guidance, now, we pull that state some and us of the bit resolutions into did timing obviously, period of All comes bit generates have leeway think eventually and short a We potential take world the we when pulled like consideration given shutdown little we just made of time. think there. impact. Yes. for demand for things a some we stuff mainly guidance

and what are pricing same pricing, of And providing So inflation of continue into real change it's which target little there. guys we pricing you of sort no ahead the then side, a dynamic we to of today. bit incorporated on think the pricing I kind described, major is

Peter Osterland

a then you're maybe productivity headwind. still attrition market an And on a as or just labor conditions update Right. follow-up, significant seeing

maybe for upside additional you're headwinds if something margin like labor-related Just just if it wondering potential given significant, hasn't it seems your but performance, there there's strong experiencing? are been

Mike Lisman

Yes.

had workforce gone We've when our of ton overall successful the negotiations significant renewals We've a quite seen came the headwinds. and during or a unit percentage up guys have teams know it past of think months issues, around this with our issues. op major XX well, small wages environment I XX haven't is We no -- several unionized. in through inflation but no high worked you

Unknown Executive

the to add. just processes within the and projects automation factories that. make working mean really to I'll us I to few our improve less Jorge. working last -- we've on our is spent This years susceptible

Operator

question Our with next Deuschle the comes from Scott of line Deutsche Bank.

Research. will line Melius Our from question with Spingarn Robert come the of next

Unknown Analyst

place, intense about to on know cap wanted not Rob swaps price. your also higher factor in for have get does pricing eating via What are on ask Kevin, pass I'm I Mikus Spingarn. to Scott you cost you've strategy? you, you is in capital talked at customers rising past, to going I the the inflation. TransDigm but of your into to trying

at of you So free cash still can convert XX% EBITDA?

Kevin Stein

look we not at That's the it. way

way it pricing part analyze we of So and -- is inflationary general the factor in doesn't and inflationary in. pressures It measures. costs

Unknown Analyst

I then wanted being all? operating noticing also any PMX parts your uptick at And Okay. meaningful are to their in units, ask,

Mike Lisman

threats and of monitoring there. levels uptick no. of from mean No, for I actively prior No activity. kind meaningful always that we're looking

I think the slide deck investor uptick. on June but we put put no, in find meaningful that this no helpful, a we might out, you

Operator

of comes Sachs. the line Goldman Poponak with question from Our Noah next

Noah Poponak

situation the other industry to kind to in original year. issues overall felt the pretty because of have up chain ramp. had you has the middle been MAX on optimistic wanted held the deliveries. then have some it skeptical faced And equipment you ramp supply eyed on MAX of from like now gone cautiously perspective get your OE where the And guys clear the I

did perspective, recent there? the schedule total to a the than keep underlying master And to Or hold of going issues Boeing handful medium-term time period so that ramp curious chain moving by chain on supply more I'm the your are of months? along supply meaningful some back

Kevin Stein

But enough quality assuming will think I delivery have chain is, larger tries Joel think been that jump we hampered don't be I what know on the resolved. about if it can that to comment to that of hampered as other that things know larger the supply up. can ramp only issues continue course, we chain. I ramp the don't I in. and supply various get the that And Mike slow But has see.

Mike Lisman

Yes.

We're hitting them. obviously happens. units, ready can MAX towards we see together And hope get interest on year. supply they right. when of chain for maybe it on obviously year, this. to them our that's I all XX pull fully a we think I see and still across targets, Boeing's back those It's to the recover support get or us there aspirational We to, to past the necessarily our so. rest the op don't which, bit forecast in get count rate if the we see again, think, our though, and target out the

Kevin Stein

a think that's I good And aspirational. word

Operator

from Our line the question comes next Scott Bank. Deutsche with of Deuschle

Scott Deuschle

might the on if on defense growth put that, detail able just you One, contribute that to if lot, It seems be could 'XX? a point Armtec like any you finer potentially curious are million possible. to how on in much Sarah, offer but $XXX contract a at

Mike Lisman

It's a unit take Mike. that I'll It's related. one. of bit

the support the biggest of up gotten it. awards ramp this obviously, on the a XXX-millimeter We under goes including to got of to some into that a rate, on lot the expected government in capacity, That's building that the provide with one given contract, actually that build new new critical a supporting parts contract program. third the shift important we've one at ramp attention. -- of TransDigm, obviously. the go Given facility, -- But a program, it's go we'll we'll

super important customer us. a for is Government

me aim If lot the earlier up. pulled the it give. little the of production didn't we we bit kind think significant. revenue going capacity as things on the guys out of 'XX get we getting hugely in gate and forecast is could FY FY not ahead the the to a more a give 'XX. be of know, on of matter. And with year, needs the with year, And a for you I the conservative together an ramps We of count the that schedule, to we expansion. though. ramp be guidance upside focus of as bit bit will be upside On 'XX be the where A FY into It's

Scott Deuschle

on by funded is the CapEx Great. that Okay. And government right? project, this

Mike Lisman

is. It

Scott Deuschle

still then these as well. on you yet come aftermarket And -- and Mike to Mike age? it. for fleets seeing Or parts demand newer as much XXX platforms yet? question, like Got that last is Are AXXX

Mike Lisman

expect we're versus unit side historically fleet. the big market we're and platform. on at see think of seen, what you're seeing the No level. across based the takeoffs what on seeing landings about platform about landings aftermarket that by I weighted the and and by we're sort we'd to seeing we've deviations takeoffs or deviations

Operator

comes next Seifman of line with JPMorgan. Seth the Our question from

Seth Seifman

question So the one about quick margin.

you at initially year, XXX would things for pressure. expectation basis, -- partial that are And still plan, guys according to about better. of basis be but like then XXXX, be points going in was seems if a when The think acquired about margin it XXX on I that would it of like Calspan. about least not it's an sounds points pressure, basis annualized margin that,

is that's there anything changed that Or Calspan's maybe there guidance? some so conservatism embedded expectations? is regard And just in with else to

Mike Lisman

a give think not things exactly point. I it's percentage percentage bit level those deviations. conservatism We when guys and about round noise of you It's we point. a a

though. that. business well, ahead a performing it's little think is The I of bit

the in years what then dilution which coming generating dilution said, it's percentage rounding we ownership those based But is once so, know, far, -- a amounts, FY with it little at as understand X.X I of least maybe 'XX. looking Kevin there, think, was know it, above and it it's something on and where point, it's headed. of it's the when As you own X.X full the really bit guys was, we bit bit good noise-level it's see but and you thought a M&A, you a you here little good. what's -- so X we this really But stuff, or know And percentage year we'll as and don't based X it, better. bought as it months on

Seth Seifman

Right. Right.

I talked deal, in Okay. its doesn't increase defense terms guys And looking terms... Cool. that CPI But commercial pie some M&A. size. This you're say since of more maybe, -- acquisitions. on of past. stuff not to bit consistent much more a other have seems Kevin, you that of on it the agnostic think really now through in necessarily are change you've pie with the pandemic, would the deal that of the done you being kind focused And little kind in about then the that But the portion you

Kevin Stein

No.

difficult we prefer would so I It's aren't Commercial prefer have. commercial still defense think We businesses revenue. would as businesses we still over still to commercial. defense. forecast lumpy would prefer businesses the -- can

the on commercial only make a thrown at that you. return at revenue pitches But thrown business. can more you better to can You on growth a on. There's get see and you or

was this available. And access business find again, meet in proprietary that that the products, you aftermarket So phenomenal. aftermarket, was significant them criteria, highly case, when to engineered, this XX% your

and they're love those businesses, us You to for important acquire.

we commercial but So find defense can meet criteria. great still the businesses businesses, -- would also yes, rather

Operator

turn to the concludes session. remarks. Stemen to today's closing Jaimie question-and-answer That like call back I'd for

Jaimie Stemen

and good for you today's appreciate concludes We the it. call. Thank appreciate time, We joining This day. all call. your have a

Operator

Thank you call. conference for today's concludes This participating.

You may now disconnect.

TransDigm (TDG) 9 Nov 232023 Q4 Earnings call transcript