TransDigm Group Incorporated (NYSE:TDG) Q4 2019 Earnings Conference Call - Final Transcript
Nov 19, 2019 • 11:00 am ET
W. Nicholas Howley
a reported basis. Organically our revenue was up almost 11% and EBITDA, as defined, up 14%, including the dividends paid in August, our shareholders made about 48% returns in the last fiscal year, a pretty good year.
Far and way, the largest portion of our business, our worldwide commercial aerospace markets, were strong in fiscal year '19. The smaller worldwide defense segment also did well. The TransDigm legacy businesses performed well. The Esterline acquired businesses continue to exceed our acquisition model, with the Q4 EBITDA as defined margin of over 30%. In 2020, we will include Esterline in the core businesses, and no longer break it out separately.
Fiscal year 2020 looks like another good year for TransDigm. Revenue and EBITDA as defined are both estimated to be up nicely. All our market segments appear to be in pretty good shape. There are some potential clouds on the horizon, in the commercial aerospace market, but we're watching this closely and we're prepared to react quickly, if required. Kevin will discuss 2019 and 2020 in significant more detail.
With respect to M&A and capital allocation, as previously announced, we executed agreements to sell both the Souriau business for about $920 million, and the EIT Group of businesses, for about $190 million. We closed the EIT deal and received the cash in September. We still hope to close the Souriau divestiture by the end of our fiscal first quarter 2020. We may still sell some smaller business, businesses with less proprietary aerospace and aftermarket content. But if we do so, at least as of today, I don't think they will be significant in size.
We also completed a roughly $2.6 billion financing recently, about $1.5 billion is for general corporate purposes and the balance is used to refinance and extend the payments on some other debt. We wanted to take advantage of an accommodating credit market and attractive rates.
With respect to capital allocation, we paid a $30 billion dividend in Q4 '19. We will review our capital allocation situation over the quarter, and see where we stand towards the end of the calendar year. Absent any new capital market activity and assuming our recent divestiture closes in a timely fashion, we'd expect to have almost $4 billion of cash at the end of Q1 2020, that's on or about 12/31/19. We also have a significant additional borrowing capacity under our credit line and our credit agreement. We have substantial liquidity and the financial flexibility to deal with any currently anticipated capital deployment allocation or other opportunities that may arise in the readily foreseeable future. We continue to actively evaluate and seek M&A opportunities. We have a decent pipeline of possibilities, as usual, mostly in the small and mid-size. I cannot predict or comment on possible closings, but as I said before, we are working steadily at M&A and we're still open for business.
Now let me hand it over to Kevin, to review our '19 performance , '20 outlook and some