CLEVELAND, April 2, 2020 /PRNewswire/ -- TransDigm Group
Incorporated (NYSE: TDG), a leading global designer, producer and
supplier of highly engineered aircraft components, today announced
cost mitigation efforts as a result of disruption in the aerospace
and travel industries as a result of the COVID-19 virus.
Cost Mitigation Efforts
The Company is beginning to see significant decreases in demand
across its commercial aerospace business and expects this trend
will continue in the coming months. As a result, the Company has
adjusted its estimated shipping levels accordingly and will reduce
its workforce by up to 15%. These actions are in addition to
the cost mitigation efforts that were implemented earlier this
calendar year. TransDigm also currently anticipates implementing
one to two week furloughs at many locations over approximately the
next six months in response to business unit specific
situations.
Impacted domestic employees will receive a substantial lump sum
payment upon their departure based on their tenure and will receive
an additional $4,000 to defray
expenses associated with health care costs, job-search costs or for
any other purpose. The Company is hopeful that these payments will
help to significantly mitigate the impact of these events on its
employees.
As an additional action to reduce costs, TransDigm's senior
management team will substantially reduce their cash compensation
for the balance of 2020. TransDigm's President and Chief Executive
Officer, Kevin Stein, is reducing
his cash compensation by over 50% and other senior executives will
also substantially reduce their cash compensation as well. Members
of TransDigm's Board of Directors will forgo their annual cash
board fees.
TransDigm is focused on mitigating the impact to its business
while supporting customers and employees. This includes following
guidance from the World Health Organization and U.S. Centers for
Disease Control and Prevention to prevent the spread of the virus.
At this time, the duration or magnitude of this disruption is
difficult to predict and the Company may have to adjust its plans
as the situation evolves. However, TransDigm remains confident in
its business model over the long term and hopes to return to normal
employment levels as soon as practical.
Guidance Update
Given the unprecedented uncertainty around the ultimate impact
of COVID-19 on global market and economic conditions, TransDigm is
withdrawing its financial guidance for the fiscal year ending
September 30, 2020. The Company will
provide more information on its second quarter 2020 earnings
call.
About TransDigm
TransDigm Group, through its wholly-owned subsidiaries, is a
leading global designer, producer and supplier of highly engineered
aircraft components for use on nearly all commercial and military
aircraft in service today. Major product offerings, substantially
all of which are ultimately provided to end-users in the aerospace
industry, include mechanical/electro-mechanical actuators and
controls, ignition systems and engine technology, specialized pumps
and valves, power conditioning devices, specialized AC/DC electric
motors and generators, NiCad batteries and chargers, engineered
latching and locking devices, rods and locking devices, engineered
connectors and elastomers, databus and power controls, cockpit
security components and systems, specialized cockpit displays,
aircraft audio systems, specialized lavatory components, seat belts
and safety restraints, engineered interior surfaces and related
components, advanced sensor products, switches and relay panels,
advanced displays, thermal protection and insulation, lighting and
control technology, military personnel parachutes, high performance
hoists, winches and lifting devices, and cargo loading, handling
and delivery systems.
Forward-Looking Statements
Statements in this press release that are not historical facts
are forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Words such as "believe,"
"may," "will," "should," "expect," "intend," "plan," "predict,"
"anticipate," "estimate," or "continue" and other words and terms
of similar meaning may identify forward-looking statements. All
forward-looking statements involve risks and uncertainties which
could affect TransDigm Group's actual results and could cause its
actual results to differ materially from those expressed or implied
in any forward-looking statements made by, or on behalf of,
TransDigm Group. These risks and uncertainties include but are not
limited to: the impact that the COVID-19 pandemic has on our
business, results of operations, financial condition and liquidity;
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; future
geopolitical or worldwide events; cyber-security threats and
natural disasters; our reliance on certain customers; the U.S.
defense budget and risks associated with being a government
supplier including government audits and inspections; failure to
maintain government or industry approvals; failure to complete or
successfully integrate acquisitions, including our acquisition of
Esterline; our indebtedness; potential environmental liabilities;
liabilities arising in connection with litigation; increases in raw
material costs, taxes and labor costs that cannot be recovered in
product pricing; risks and costs associated with our international
sales and operations; and other risk factors. Further information
regarding the important factors that could cause actual results to
differ materially from projected results can be found in TransDigm
Group's Annual Report on Form 10-K and other reports that TransDigm
Group or its subsidiaries have filed with the Securities and
Exchange Commission. Except as required by law, TransDigm Group
undertakes no obligation to revise or update the forward-looking
statements contained in this press release.
Contact:
Investor Relations
(216) 706-2945
ir@transdigm.com
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SOURCE TransDigm Group Inc.