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Mail Stop 3561
February 17, 2006
W. Nicholas Howley
Chief Executive Officer
TD Holding Corporation
1301 East 9th Street, Suite 3710
Cleveland, OH 44114
Re: Transdigm Group, Inc.
Amendment No. 1 to Registration Statement on Form S-1
Filed February 2, 2006
File No. 333-130483
Transdigm, Inc. and Transdigm Holding Company
Form 10-Q for the Fiscal Quarter Ended December 31, 2005
Filed February 9, 2006
File No. 333-108340 and 333-108340-06
Dear Mr. Howley:
We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise your document in
response
to these comments. If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary. Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
information so we may better understand your disclosure. After
reviewing this information, we may raise additional comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or any other aspect
of
our review. Feel free to call us at the telephone numbers listed
at
the end of this letter.
Form S-1
Gatefold
1. We note your response to comment 3 and the gatefold artwork.
Please confirm that the components or parts that are shown were
designed and/or produced by you or your subsidiaries. Otherwise,
please tell us why it is appropriate to depict them in your
artwork.
Prospectus Summary, page 1
2. We note your response to comment 7 in our letter dated January
19,
2006; however, we reissue our previous comment. In addition,
please
move the third italicized paragraph that discusses EBITDA and
EBITDA
As Defined so that it appears under Selected Consolidated
Financial
Data on page 26.
3. We note your response to comment 8 in our letter dated January
19,
2006. The summary, however, still appears lengthy and overly
detailed. Please note that the summary is merely intended to
provide
a brief overview of the key aspects of the offering. For example,
your disclosure in subsections "The Company," "Our Competitive
Strengths" and "Our Business Strategy" contain excessive detail
for
the summary section. Further, please relocate your disclosure
regarding your formation to the beginning of this section under
"Our
Company." Please revise accordingly.
Our Company, page 2
4. We note your response to comment 9 in our letter dated January
19,
2006. You state that the list includes "major customers," yet
none
accounted for more than approximately 6% of your net sales.
Please
tell us how these customers are your "major customers." Since
none
of these customers appear to be material, then it appears to be
inappropriate to highlight the most recognizable of your
customers.
Please revise your disclosure.
Summary Historical Financial Data, page 8
5. Please refer to comment 28 in our letter dated January 19,
2006.
Please disclose the calculations of the significant financial
maintenance covenants contained in the Amended and Restated Senior
Credit Facility, as well as the disclosures set forth in Answer 10
of
the June 13, 2003 Frequently Asked Questions Regarding the Use of
Non-GAAP Financial Measures, or explain to us why it is not
necessary.
Management, page 61
Employment Related Agreements, page 70
6. We note your response to comment 41 in our letter dated January
19, 2006. It appears, however, that you have not described the
change in control provisions in your employment agreement with W.
Nicholas Howley. Accordingly, please describe the change of
control
provisions in your agreement with W. Nicholas Howley.
Principal and Selling Stockholders, page 78
7. We note your response to comment 46 in our letter dated January
19, 2006. Please, however, disclose in the prospectus how the
selling stockholders received their shares.
Certain Relationships and Related Party Transactions, page 83
Recent Transactions, page 84
8. We note your response to comment 48 in our letter dated January
19, 2006; however, we reissue our previous comment. Please
disclose
the individual bonuses received and the individual amounts
received
as deferred compensation. Further, please describe how the
bonuses
were allocated. We note your statement that they were based on
options; however, elsewhere you state that bonuses are based on
performance criteria.
Financial Statements
Segment Reporting, page F-18
9. Your response to our prior comment 64 is unpersuasive, with
respect to paragraph 37 of SFAS 131. In addition, your response
and
initial and revised disclosures do not appear consistent.
First, you state that management does not routinely analyze the
business on a product-by-product basis, nor does management or its
financial reporting systems aggregate certain product groupings
for
these purposes. Please explain to us why there appears to be a
disparity between this statement and the prior disclosure under
"Sales and Marketing" in your initial filing. As part of your
response: (i) provide us the name of each product manager in your
company; (ii) identify for us his or her specific product
responsibilities; (iii) for each year presented, provide us the
sales
and profitability information used by each product manager; and
(iv)
identify the product offerings that do not have product managers,
and
quantify for us the revenue attributable to these offerings. And
finally, for each year presented, provide us the revenue
information
by product that you can currently produce, grouped according to
the
eleven major product lines, and explain why it would not be
appropriate to provide this information in your filing.
And second, you indicate that your proposed revenue information
based
on customer category is more useful to investors than a revenue
breakdown by product or product grouping. Your reference that
investors can independently track macro economic factors does not
sufficiently support your conclusion that your proposed revenue
information is more useful. In addition, the fact that there is
information that may be more useful than the required information
does not preclude you from providing the required information.
As we have previously stated, you are required under paragraph 37
of
SFAS 131 to disclose the revenue attributable to each of your
eleven
major product lines. Each major product line appears to be the
appropriate basis for disclosure since, as disclosed in your
initial
filing with the Commission, you have structured your sales efforts
along major product lines, assigning a product line manager to
each
major product line, and that each product line manager is expected
to
grow the sales and profitability of his product line and to
achieve
the targeted annual level of bookings, sales, new business and
profitability for each product.
Transdigm, Inc. and Transdigm Holding Company
Form 10-Q for the Fiscal Quarter Ended December 31, 2005
10. Please correct the file number on the facing page.
11. We note that the Section 906 certifications were not filed
with
the quarterly report. Please refile the entire quarterly report,
including the Section 906 certifications and new Section 302
certifications. See Item 601(b)(32) of Regulation S-K.
* * * * *
As appropriate, please amend your registration statement in
response to these comments. You may wish to provide us with
marked
copies of the amendment to expedite our review. Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested information. Detailed cover
letters greatly facilitate our review. Please understand that we
may
have additional comments after reviewing your amendment and
responses
to our comments.
You may contact Patrick Kuhn, Staff Accountant, at (202) 551-
3308, or Michael Fay, Branch Chief, at (202) 551-3812, if you have
questions regarding comments on the financial statements and
related
matters. Please contact Kurt Murao, Attorney Advisor, at (202)
551-
3338, or Peggy Kim, Senior Staff Attorney, at (202) 551-3411 with
any
other questions you may have.
Sincerely,
Max Webb
Assistant Director
cc: Stephen J. Gartner, Esq.
Willkie Farr & Gallagher LLP
Fax: (212) 728-9222
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W. Nicholas Howley
TD Holding Corporation
February 17, 2006
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