-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, K78B1lrvCUWhrgQP1IxLEfoaYuPDN82XBWPvLPI6FpmOwcH/VE3VOgknXvO73ybm gar37jMVK53K3psFBLz/hg== 0000950152-01-000925.txt : 20010214 0000950152-01-000925.hdr.sgml : 20010214 ACCESSION NUMBER: 0000950152-01-000925 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20001230 FILED AS OF DATE: 20010213 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRANSDIGM INC /FA/ CENTRAL INDEX KEY: 0001077670 STANDARD INDUSTRIAL CLASSIFICATION: AIRCRAFT PART & AUXILIARY EQUIPMENT, NEC [3728] STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-71397 FILM NUMBER: 1536624 BUSINESS ADDRESS: STREET 1: 8233 IMPERIAL DRIVE CITY: WACO STATE: TX ZIP: 76712 BUSINESS PHONE: 2547760650 MAIL ADDRESS: STREET 1: 8233 IMPERIAL DRIVE CITY: WACO STATE: TX ZIP: 76712 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRANSDIGM HOLDING CO /FA/ CENTRAL INDEX KEY: 0001077672 STANDARD INDUSTRIAL CLASSIFICATION: AIRCRAFT PART & AUXILIARY EQUIPMENT, NEC [3728] STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-71397-01 FILM NUMBER: 1536625 BUSINESS ADDRESS: STREET 1: 8233 IMPERIAL DRIVE CITY: WACO STATE: TX ZIP: 76712 BUSINESS PHONE: 2547760650 MAIL ADDRESS: STREET 1: 8233 IMPERIAL DRIVE CITY: WACO STATE: TX ZIP: 76712 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MARATHON POWER TECHNOLOGIES CO CENTRAL INDEX KEY: 0001077673 STANDARD INDUSTRIAL CLASSIFICATION: AIRCRAFT PART & AUXILIARY EQUIPMENT, NEC [3728] STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-71397-02 FILM NUMBER: 1536626 BUSINESS ADDRESS: STREET 1: 8233 IMPERIAL DRIVE CITY: WACO STATE: TX ZIP: 76712 BUSINESS PHONE: 2547760650 MAIL ADDRESS: STREET 1: 8233 IMPERIAL DRIVE CITY: WACO STATE: TX ZIP: 76712 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ZMP INC CENTRAL INDEX KEY: 0001084401 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 133733378 STATE OF INCORPORATION: CA FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-71397-01 FILM NUMBER: 1536627 BUSINESS ADDRESS: STREET 1: 8233 IMPERIAL DRIVE CITY: WACO STATE: TX ZIP: 76712 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ADAMS RITE AEROSPACE INC CENTRAL INDEX KEY: 0001084402 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 133733378 STATE OF INCORPORATION: CA FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-71397-02 FILM NUMBER: 1536628 BUSINESS ADDRESS: STREET 1: 8233 IMPERIAL DRIVE CITY: WACO STATE: TX ZIP: 76712 10-Q 1 l86343ae10-q.txt TRANSDIGM INC. FORM 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended December 30, 2000. [ ] Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from ________________________ to _____________________ Commission File Number 333-71397 ---------------------------------------------------------- TransDigm Inc., TransDigm Holding Company, Marathon Power Technologies Company, - -------------------------------------------------------------------------------- ZMP, Inc. and Adams Rite Aerospace, Inc. - -------------------------------------------------------------------------------- (Exact name of co-registrants as specified in their respective charters) Delaware 13-3733378 - -------------------------------------------------------------------------------- (State or other Jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 26380 Curtiss Wright Parkway, Richmond Heights, Ohio 44143 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (216) 289-4939 - -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) - -------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report.) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X No --- --- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common Stock (Voting) of TransDigm Holding Company, $0.01 Par Value 119,824 - --------------------------------------------------- ---------------------------------- (Class) (Outstanding at December 30, 2000) Class A Common Stock (Non-Voting) of TransDigm Holding Company, $0.01 Par Value -0- - --------------------------------------------------- ---------------------------------- (Class) (Outstanding at December 30, 2000)
All of the outstanding capital stock of TransDigm Inc. is held by TransDigm Holding Company. 2 INDEX
Page Part I Financial Information Item 1 Financial Statements Consolidated Balance Sheets - December 30, 2000 and September 30, 2000 1 Consolidated Statements of Income - Thirteen Weeks Ended December 30, 2000 and December 31, 1999 2 Consolidated Statement of Changes in Stockholders' Deficiency - Thirteen Weeks Ended December 30, 2000 3 Consolidated Statements of Cash Flows - Thirteen Weeks Ended December 30, 2000 and December 31, 1999 4 Notes to Consolidated Financial Statements 5 Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations 7 Item 3 Quantitative and Qualitative Disclosure About Market Risk 10 Part II: Other Information Item 6 Exhibits and Reports on Form 8-K 11 Signatures 12
3
PART I: FINANCIAL INFORMATION ITEM 1 TRANSDIGM HOLDING COMPANY CONSOLIDATED BALANCE SHEETS (IN THOUSANDS OF DOLLARS) (UNAUDITED) - ------------------------------------------------------------------------------------ DECEMBER 30, SEPTEMBER 30, 2000 2000 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 4,739 $ 4,309 Accounts receivable, net 22,601 26,796 Inventories 39,220 32,889 Income taxes refundable 389 1,796 Deferred income taxes 5,657 5,657 Prepaid expenses and other 475 535 -------- -------- Total current assets 73,081 71,982 PROPERTY, PLANT AND EQUIPMENT - Net 24,574 25,029 INTANGIBLE ASSETS - Net 56,498 56,957 DEBT ISSUE COSTS - Net 8,998 9,400 DEFERRED INCOME TAXES AND OTHER 5,342 5,465 -------- -------- TOTAL $ 168,493 $ 168,833 ======== ======== LIABILITIES AND STOCKHOLDERS' DEFICIENCY CURRENT LIABILITIES: Current portion of long-term debt $ 10,953 $ 10,953 Accounts payable 10,125 5,672 Accrued liabilities 10,947 15,460 -------- -------- Total current liabilities 32,025 32,085 LONG-TERM DEBT - Less current portion 248,604 250,648 NON-CURRENT PORTION OF ACCRUED PENSION COSTS AND OTHER 2,898 3,138 -------- -------- Total liabilities 283,527 285,871 REDEEMABLE COMMON STOCK 1,627 1,371 -------- -------- STOCKHOLDERS' DEFICIENCY: Common stock 102,156 102,156 Retained deficit (218,385) (220,115) Accumulated other comprehensive loss (432) (450) -------- -------- Total stockholders' deficiency (116,661) (118,409) -------- -------- TOTAL $ 168,493 $ 168,833 ======== ========
See notes to consolidated financial statements. -1- 4 TRANSDIGM HOLDING COMPANY CONSOLIDATED STATEMENTS OF INCOME (IN THOUSANDS OF DOLLARS) (UNAUDITED) - -------------------------------------------------------------------------------- THIRTEEN WEEKS ENDED ---------------------------- DECEMBER 30, DECEMBER 31, 2000 1999 NET SALES $35,780 $33,734 COST OF SALES 19,993 18,135 ------- ------- GROSS PROFIT 15,787 15,599 ------- ------- OPERATING EXPENSES: Selling and administrative 4,256 4,132 Amortization of intangibles 419 512 Research and development 513 385 ------- ------- Total operating expenses 5,188 5,029 ------- ------- INCOME FROM OPERATIONS 10,599 10,570 INTEREST EXPENSE - Net 7,031 7,095 ------- ------- INCOME BEFORE INCOME TAXES 3,568 3,475 INCOME TAX PROVISON 1,582 1,375 ------- ------- NET INCOME $ 1,986 $ 2,100 ======= ======= See notes to consolidated financial statements. -2- 5
TRANSDIGM HOLDING COMPANY CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIENCY FOR THE THIRTEEN WEEKS ENDED DECEMBER 30, 2000 (IN THOUSANDS OF DOLLARS) (UNAUDITED) - --------------------------------------------------------------------------------------------------------------------------- COMMON ACCUMULATED STOCK OTHER (VOTING AND RETAINED COMPREHENSIVE CLASS A SHARES) DEFICIT INCOME (LOSS) TOTAL BALANCE, OCTOBER 1, 2000 $ 102,156 $(220,115) $ (450) $(118,409) NET INCOME 1,986 1,986 COMPREHENSIVE INCOME 18 18 ACCRETION OF REDEEMABLE COMMON STOCK (256) (256) --------- --------- ------ --------- BALANCE, DECEMBER 30, 2000 $ 102,156 $(218,385) $ (432) $(116,661) ========= ========= ====== =========
See notes to consolidated financial statements. -3- 6
TRANSDIGM HOLDING COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS OF DOLLARS) (UNAUDITED) - --------------------------------------------------------------------------------------------------------------------- THIRTEEN WEEKS ENDED ---------------------------------------- DECEMBER 30, DECEMBER 31, 2000 1999 OPERATING ACTIVITIES: Net income $ 1,986 $ 2,100 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation 1,245 954 Amortization of intangibles 419 512 Amortization of debt issue costs 402 384 Interest deferral on Holdings PIK Notes 694 600 Changes in assets and liabilities, excluding effect of acquisition of business (Note 5): Accounts receivable 4,195 1,092 Inventories (1,873) (2,110) Refundable income taxes 1,407 1,248 Prepaid expenses and other assets 183 (83) Accounts payable (5) (311) Accrued and other liabilities (4,695) (4,790) ------- ------- Net cash provided by (used in) operating activities 3,958 (404) ------- ------- INVESTING ACTIVITIES - Capital expenditures (790) (602) ------- ------- FINANCING ACTIVITIES: Net borrowings under revolving credit loans 500 Repayment of term loans (2,738) (2,015) ------- ------- Net cash used in financing activities (2,738) (1,515) ------- ------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 430 (2,521) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 4,309 2,729 ------- ------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 4,739 $ 208 ======= ======= SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for interest $ 9,384 $ 9,250 ======= ======= Cash paid during the period for income taxes $ 175 $ 127 ======= =======
See notes to consolidated financial statements. -4- 7 TRANSDIGM HOLDING COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS THIRTEEN WEEKS ENDED DECEMBER 30, 2000 AND DECEMBER 31, 1999 (UNAUDITED) - -------------------------------------------------------------------------------- 1. DESCRIPTION OF THE BUSINESS TransDigm Holding Company ("Holdings"), through its wholly-owned operating subsidiary, TransDigm Inc. ("TransDigm"), is a premier supplier of proprietary mechanical components servicing predominantly the aircraft industry. TransDigm, along with its wholly-owned subsidiaries, Marathon Power Technologies Company ("Marathon"), ZMP, Inc. ("ZMP") and Adams Rite Aerospace, Inc., ("Adams Rite") (collectively, the "Company") offers a broad line of component products including tube connectors, valves, batteries, static inverters, pumps, quick disconnects, clamps, ball bearing and sliding controls, mechanical hardware, fluid controls, lavatory hardware, electromechanical controls, and oxygen systems related products. 2. UNAUDITED FINANCIAL INFORMATION Except for the September 30, 2000 consolidated balance sheet, which was derived from the Company's audited financial statements, the financial information included herein is unaudited; however, the information reflects all adjustments (consisting solely of normal recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the Company's financial position and results of operations and cash flows for the interim periods presented. The results of operations for the thirteen weeks ended December 30, 2000 are not necessarily indicative of the results to be expected for the full year. 3. INVENTORIES Inventories are stated at the lower of cost or market. Cost of inventories is determined by the average cost and the first-in, first-out (FIFO) methods. Inventories consist of the following (in thousands): DECEMBER 30, SEPTEMBER 30, 2000 2000 Work-in-progress and finished goods $ 26,889 $ 20,995 Raw materials and purchased component parts 18,592 18,325 -------- -------- Total 45,481 39,320 Reserve for excess and obsolete inventory (6,261) (6,431) -------- -------- Inventories - net $ 39,220 $ 32,889 ======== ======== 4. CONTINGENCIES ENVIRONMENTAL - The soil and groundwater beneath the Company's facility in Waco, Texas have been impacted by releases of hazardous materials. The resulting contaminants of concern have been delineated and characterized. The majority of these contaminants are presently below action levels prescribed by the Texas Natural Resources Conservation Commission ("TNRCC"). In connection with the Company's acquisition of Marathon, a $2 million escrow was previously funded to cover the cost of remediation that TNRCC might require for those contaminants currently in excess of action limits. As a result, the Company believes the condition of the soil and groundwater at the Waco facility will not require the incurrence of material expenditures. However, there can be no assurance that additional contamination will not be discovered or that the remediation required by the TNRCC will not be material to the financial condition, results of operations, or cash flows of the Company. -5- 8 OTHER - While the Company is currently involved in certain legal proceedings, management believes the results of these proceedings will not have a material effect on the financial condition, results of operations or cash flows of the Company. During the ordinary course of business, the Company is from time to time threatened with, or may become a party to, legal actions and other proceedings. The Company believes that its potential exposure to such legal actions is adequately covered by its aviation product and general liability insurance. 5. ACQUISITION During December 2000, the Company entered into agreements with Honeywell International, Inc. ("Honeywell") to purchase certain inventory of Honeywell's lubrication and scavenge pump product line for $4.5 million, along with an option to enter into an exclusive, worldwide license agreement to produce and sell such products for at least forty years and to buy certain related assets. The Company expects that it will pay for the inventory by the end of the Company's third quarter and is included in accounts payable at December 30, 2000. The cost of the option was not significant. During January 2001, the Company exercised the option. The execution of the license agreement and the purchase of the related assets is subject to certain closing conditions. 6. NEW ACCOUNTING STANDARD In June 1998, the Financial Accounting Standards Board issued Statement No. 133, Accounting for Derivative Instruments and Hedging Activities. This statement establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts (collectively referred to as derivatives), and for hedging activities. It requires that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. If certain conditions are met, a derivative may be specifically designated as (a) a hedge of the exposure to changes in the fair value of a recognized asset or liability or an unrecognized firm commitment, (b) a hedge of the exposure to variable cash flows of a forecasted transaction, or (c) a hedge of the foreign currency exposure of a net investment in a foreign operation, an unrecognized firm commitment, an available-for-sale security, or a foreign-currency-denominated forecasted transaction. The Company adopted this standard during the quarter ended December 30, 2000. The implementation of this standard did not have an impact on the Company's reported financial condition or results of operations. * * * * * -6- 9 PART I: FINANCIAL INFORMATION ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This Quarterly Statement includes "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended, including, in particular, the statements about our plans, strategies and prospects under this "Management's Discussion and Analysis of Financial Condition and Results of Operations" section. Although the Company believes that its plans, intentions and expectations reflected in or suggested by such forward-looking statements are reasonable, the Company can give no assurance that such plans, intentions or expectations will be achieved. Important factors that could cause actual results to differ materially from the forward-looking statements made in this Quarterly Statement are set forth herein as well as under the caption "Risk Factors" in the Registration Statement filed by the Company on Form S-4 on January 29, 1999, as amended through April 23, 1999. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by those cautionary statements. OVERVIEW The Company is a leading supplier of highly engineered aircraft components for use on nearly all commercial and military aircraft. The Company sells its products to commercial airlines and aircraft maintenance facilities in the aftermarket, to most original equipment manufacturers ("OEMs") of aircraft and to various agencies of the United States government. Sales of the Company's products are made directly to these organizations as well as through U.S. and international distributors who maintain inventories throughout the world of products purchased from the Company and others. During December 2000, the Company entered into agreements with Honeywell International, Inc. ("Honeywell") to purchase certain inventory of Honeywell's lubrication and scavenge pump product line for $4.5 million, along with an option to enter into an exclusive, worldwide license agreement to produce and sell such products for at least forty years and to buy certain related assets. The Company expects that it will pay for the inventory by the end of the Company's third quarter. The cost of the option was not significant. During January 2001, the Company exercised the option. The execution of the license agreement and the purchase of the related assets is subject to certain closing conditions. The following is management's discussion and analysis of certain significant factors that have affected the Company's financial position and operating results during the periods included in the accompanying consolidated financial statements. The Company's fiscal year ends on September 30. RESULTS OF OPERATIONS The following table sets forth, for the periods indicated, certain operating data of the Company as a percentage of net sales. THIRTEEN WEEKS ENDED ------------------------------- DECEMBER 30, DECEMBER 31, 2000 1999 Net sales 100 % 100 % --- --- Gross profit 44 46 Selling and administrative 12 12 Amortization of intangibles 1 2 Research and development 1 1 --- --- Income from operations 30 31 Interest expense - net 20 21 Provision for income taxes 4 4 --- --- Net income 6 % 6 % === === -7- 10 CHANGES IN RESULTS OF OPERATIONS THIRTEEN WEEKS ENDED DECEMBER 30, 2000 COMPARED WITH THIRTEEN WEEKS ENDED DECEMBER 31, 1999. - - NET SALES. Net sales increased by $2.1 million, or 6.1%, to $35.8 million for the quarter ended December 30, 2000 from $33.7 million for the comparable quarter last year, primarily due to increased unit volume on existing products and new business opportunities. - - GROSS PROFIT. Gross profit (net sales less cost of sales) increased by $.2 million, or 1.2%, to $15.8 million for the quarter ended December 30, 2000 from $15.6 million from the comparable quarter last year. Gross profit as a percentage of net sales was 44.1% during the first quarter of fiscal 2001 and 46.2% during the first quarter of fiscal 2000, primarily due to changes in customer and product mix. - - SELLING AND ADMINISTRATIVE. Selling and administrative expenses increased by $.2 million, or 3.0%, to $4.3 million for the quarter ended December 30, 2000 from $4.1 million for the quarter ended December 31, 1999. Selling and administrative expenses as a percentage of net sales was approximately 12% for both quarters. - - AMORTIZATION OF INTANGIBLES. Amortization of intangibles decreased by $.1 million, or 18.2%, to $.4 million for the quarter ended December 30, 2000 from $.5 million for the quarter ended December 31, 1999 as a result of certain intangible assets becoming fully amortized. - - RESEARCH AND DEVELOPMENT. Research and development expense increased by $.1 million, or 33.2%, to $.5 million for the quarter ended December 30, 2000 from $.4 million for the quarter ended December 31 1999. Research and development expense, as a percentage of net sales, was 1% for both quarters. - - INCOME FROM OPERATIONS. Operating income approximated $10.6 million for the quarter ended December 30, 2000 and the comparable quarter last year. - - INTEREST EXPENSE. Interest expense approximated $7.0 million for the first quarter of fiscal 2001 and the comparable quarter last year. - - INCOME TAXES. Income tax expense as a percentage of income before income taxes was 44% for the thirteen weeks ended December 30, 2000 compared to 40% for the thirteen weeks ended December 31, 1999, primarily due to increased earnings subject to tax. - - NET INCOME. The Company earned $2.0 million for the first quarter of fiscal 2001 compared to $2.1 million for the first quarter of fiscal 2000, primarily as a result of the factors referred to above. -8- 11 BACKLOG Management believes that sales order backlog (i.e., orders for products that have not yet been shipped) is a useful indicator of sales to OEMs. As of December 30, 2000, the Company estimated its sales order backlog at $79.1 million compared to an estimated $64.3 million as of December 31, 1999. The majority of the purchase orders outstanding as of December 30, 2000 are scheduled for delivery within the next twelve months. Purchase orders are generally subject to cancellation by the customer prior to shipment. The level of unfilled purchase orders at any given date during the year will be materially affected by the timing of the Company's receipt of purchase orders and the speed with which those orders are filled. Accordingly, the Company's backlog as of December 30, 2000 may not necessarily represent the actual amount of shipments or sales for any future period. FOREIGN OPERATIONS The Company manufactures all of its products in the United States. However, a portion of the Company's sales is conducted abroad and a portion of raw materials are purchased abroad. This activity is subject to numerous additional risks, including the impact of foreign government regulations, currency fluctuations, political uncertainties and differences in business practices. There can be no assurance that foreign governments will not adopt regulations or take other action that would have a direct or indirect adverse impact on the business or market opportunities of the Company within such governments' countries. Furthermore, there can be no assurance that the political, cultural and economic climate outside the United States will be favorable to the Company's operations and growth strategy. INFLATION Many of the Company's raw materials and operating expenses are sensitive to the effects of inflation, which could result in changing operating costs. The effects of inflation on the Company's businesses during the thirteen week periods ended December 30, 2000 and December 31, 1999 were not significant. LIQUIDITY AND CAPITAL RESOURCES The Company generated approximately $4.0 million of cash in operating activities during the thirteen weeks ended December 30, 2000 compared to approximately $.4 million used during the thirteen weeks ended December 31, 1999, principally due to increased collections of accounts receivable during the quarter ended December 30, 2000. Cash used in investing activities was approximately $0.8 million during the thirteen weeks ended December 30, 2000 compared to approximately $0.6 million used during the thirteen weeks ended December 31, 1999, primarily due to increased capital expenditures. Cash used in financing activities during the thirteen weeks ended December 30, 2000 was approximately $2.7 million compared to approximately $1.5 million provided by financing activities during the thirteen weeks ended December 31, 1999, primarily due to increased repayment of debt obligations. The Company's primary cash needs will consist of capital expenditures and debt service, including the payments required under the Honeywell agreement (see "Overview"). The Company incurs capital expenditures for the purpose of maintaining and replacing existing equipment and facilities and, from time to time, for facility expansion. ADDITIONAL DISCLOSURE REQUIRED BY INDENTURE Separate financial information of TransDigm is not presented since the Senior Subordinated Notes are guaranteed by Holdings and all direct and indirect subsidiaries of TransDigm and since Holdings has no operations or assets separate from its investment in TransDigm. In addition, Holdings' only liability consists of Holdings PIK Notes of $25.3 million that bear interest at 12% annually. Interest expense recognized on the Holdings PIK Notes during the thirteen week periods ended December 30, 2000 and December 31, 1999 was $.7 million and $.6 million, respectively. -9- 12 PART I: FINANCIAL INFORMATION ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK At December 30, 2000, the Company is subject to interest rate risk with respect to borrowings under its credit facility as the interest rates on such borrowings vary with market conditions and, thus, the amount of outstanding borrowings approximates the fair value of the indebtedness. On a historical basis, the weighted average interest rate on the $109.2 million of borrowings outstanding under the credit facility at December 30, 2000 was 9.2%. Also outstanding at December 30, 2000 was $125 million of Company indebtedness in the form of subordinated notes and $25.3 million of Holdings PIK Notes. The interest rates on both of these borrowings are fixed at 10 3/8% and 12% per year, respectively. The sensitivity of changes in the fair value of the Company's outstanding borrowings to changes in interest rates is described on page 17 of our Form 10-K for the fiscal year ended September 30, 2000. There have been no material changes in the sensitivity since September 30, 2000. -10- 13 PART II: OTHER INFORMATION ITEM 6 Exhibits and Reports on Form 8-K (a) Exhibits None (b) Reports on Form 8-K None -11- 14 SIGNATURES Pursuant to the requirements of Section 13 of the Securities Act of 1934, as amended, each of the Co-Registrants has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Richmond Heights, State of Ohio, on February 13, 2001. TRANSDIGM HOLDING COMPANY By: /s/ Gregory Rufus ----------------------------------------- Gregory Rufus Chief Financial Officer TRANSDIGM INC. By: /s/ Gregory Rufus ----------------------------------------- Gregory Rufus Chief Financial Officer MARATHON POWER TECHNOLOGIES COMPANY By: /s/ Gregory Rufus ----------------------------------------- Gregory Rufus Chief Financial Officer ZMP, INC. By: /s/ Gregory Rufus ----------------------------------------- Gregory Rufus Chief Financial Officer ADAMS RITE AEROSPACE, INC. By: /s/ Gregory Rufus ----------------------------------------- Gregory Rufus Chief Financial Officer -12- 15 TRANSDIGM HOLDING COMPANY Pursuant to the requirements of the Securities Act of 1934, this Report has been signed below by the following persons on behalf of the Co-Registrant and in the capacities and as of the dates indicated.
SIGNATURE TITLE DATE * Chief Executive Officer (Principal February 13, 2001 - ----------------------------------- Executive Officer) and Chairman of the Board Douglas W. Peacock * President and Chief Operating Officer February 13, 2001 - ----------------------------------- (Principal Operating Officer) and Director W. Nicholas Howley /s/ Gregory Rufus Chief Financial Officer (Principal Financial February 13, 2001 - ----------------------------------- and Accounting Officer) Gregory Rufus * Director February 13, 2001 - ----------------------------------- Stephen Berger * Director February 13, 2001 - ----------------------------------- William Hopkins * Director February 13, 2001 - ----------------------------------- Muzzafar Mirza * Director February 13, 2001 - ----------------------------------- John W. Paxton * Director February 13, 2001 - ----------------------------------- Thomas R. Wall, IV
-13- 16 TRANSDIGM INC. Pursuant to the requirements of the Securities Act of 1934, this Report has been signed below by the following persons on behalf of the Co-Registrant and in the capacities and as of the dates indicated.
SIGNATURE TITLE DATE * Chief Executive Officer (Principal February 13, 2001 - ----------------------------------- Executive Officer) and Chairman of the Board Douglas W. Peacock * President and Chief Operating Officer February 13, 2001 - ----------------------------------- (Principal Operating Officer) and Director W. Nicholas Howley /s/ Gregory Rufus Chief Financial Officer (Principal Financial February 13, 2001 - ----------------------------------- and Accounting Officer) Gregory Rufus * Director February 13, 2001 - ----------------------------------- Stephen Berger * Director February 13, 2001 - ----------------------------------- William Hopkins * Director February 13, 2001 - ----------------------------------- Muzzafar Mirza * Director February 13, 2001 - ----------------------------------- John W. Paxton * Director February 13, 2001 - ----------------------------------- Thomas R. Wall, IV
-14- 17 MARATHON POWER TECHNOLOGIES COMPANY Pursuant to the requirements of the Securities Act of 1934, this Report has been signed below by the following persons on behalf of the Co-Registrant and in the capacities and as of the dates indicated.
SIGNATURE TITLE DATE * Chief Executive Officer (Principal February 13, 2001 - ----------------------------------- Executive Officer) and Chairman of the Board Douglas W. Peacock * President (Principal Operating Officer) February 13, 2001 - ----------------------------------- Albert J. Rodriguez /s/ Gregory Rufus Chief Financial Officer (Principal Financial February 13, 2001 - ----------------------------------- and Accounting Officer) Gregory Rufus * Director February 13, 2001 - ----------------------------------- W. Nicholas Howley
-15- 18 ZMP, INC. Pursuant to the requirements of the Securities Act of 1934, this Report has been signed below by the following persons on behalf of the Co-Registrant and in the capacities and as of the dates indicated.
SIGNATURE TITLE DATE * Chairman of the Board and Executive Vice February 13, 2001 - ----------------------------------- President (Principal Executive Officer) Douglas W. Peacock * President (Principal Operating Officer) February 13, 2001 - ----------------------------------- John F. Leary /s/ Gregory Rufus Treasurer and Chief Financial Officer February 13, 2001 - ----------------------------------- (Principal Financial and Accounting Officer) Gregory Rufus * Executive Vice President and Director February 13, 2001 - ----------------------------------- W. Nicholas Howley
-16- 19 ADAMS RITE AEROSPACE, INC. Pursuant to the requirements of the Securities Act of 1934, this Report has been signed below by the following persons on behalf of the Co-Registrant and in the capacities and as of the dates indicated.
SIGNATURE TITLE DATE * Chairman of the Board and Executive Vice February 13, 2001 - ----------------------------------- President (Principal Executive Officer) Douglas W. Peacock * President (Principal Operating Officer) February 13, 2001 - ----------------------------------- John F. Leary /s/ Gregory Rufus Treasurer and Chief Financial Officer February 13, 2001 - ----------------------------------- (Principal Financial and Accounting Officer) Gregory Rufus * Executive Vice President and Director February 13, 2001 - ----------------------------------- W. Nicholas Howley
* The undersigned, by signing his name hereto, does sign and execute this Annual Report on Form 10-K pursuant to the Power of Attorney executed by the above-named officers and Directors of the Co-Registrants and filed with the Securities and Exchange Commission on behalf of such officers and Directors. By: /s/Gregory Rufus ------------------------------------- Gregory Rufus ATTORNEY-IN-FACT -17- -----END PRIVACY-ENHANCED MESSAGE-----