PMA MANUFACTURING & ENGINEERING INVESTMENT BANKING PERSPECTIVES

Similar documents
Q1 2014: Key Statistics and Market Review

Presentation to National Academies Aeronautics Research and Technology Roundtable Washington, DC Richard Aboulafia Vice President, Analysis

AEROSPACE, DEFENSE, AND GOVERNMENT SERVICES

July Hexcel. All rights reserved.

CL King Best Ideas Conference

Revenues % % Gross operating margin % %

QUALCOMM Reports Third Fiscal Quarter Revenues of $1 Billion - Operating Earnings Per Share of $.75, Excluding Non-Recurring Charges -

Aircraft Markets In An Age Of Extremes

HM-1 Committee for Integrated Vehicle Health Management. PHM Society Panel Discussion September 26, 2012

THE PMA INDUSTRY ECONOMIC OUTLOOK

Financial Statements for 2000 & Business and Strategy Overview

Advancing the MRJ project

Activity report 2017

Omni-Lite Industries Canada Inc.

AEROSPACE, DEFENSE & GOVERNMENT SERVICES

Largest Latin American IT Services provider and an undisputed leader in systems integration, support and IT Outsourcing

Tech Data s Acquisition of Avnet Technology Solutions

2017 Aerospace Industry Mid-Year M&A Review

Nasdaq: DAIO. Anthony Ambrose. President and CEO. Data I/O Corporation May 2017 B. Riley & Co. Conference -- Investor Presentation

Click to add headline

China Telecom Corporation Limited 2 June 2008

GE s Technology and Services

AEROSPACE, DEFENSE & GOVERNMENT SERVICES

LMI Aerospace Products and Services

Interim Report on the First Half of /01/ 2017

Economic Update German American Chamber of Commerce

Mergers & Acquisition in an Evolving and Consolidating Industry. CoBank Rob West, SVP. May 12, 2016

Samu Konttinen, CEO Q4 / 2017 CORPORATE SECURITY REVENUE GROWTH ACCELERATED TO 16%

Google Inc net consolidated revenues: 27.2 billion euro

Applied Technology & Digital Media Industry Update Q2 2017

1Q17 RESULTS M AY / 2017

THIRD QUARTER October 20, 2016 Tele2 AB

Micronic Mydata Q4, Peter Uddfors, President and CEO Carl-Johan Blomberg, CFO 1 February, 2011

FY18 FULL-YEAR RESULTS 31 AUGUST 2018 NEXTDC LIMITED ACN

Engineering & Construction Conference. March 2009

Interoute Acquisition Summary. February 26, 2018

BOEING OVERVIEW. Connect Protect Explore Inspire. Copyright 2018 Boeing. All rights reserved.

For personal use only

Innovation and Excellence in Engineering and Support. Solutions.

Deutsche Leveraged Finance Conference. Matt Steinfort, CFO

Inmarsat plc Q4 & preliminary full year results March 2010

Marshall Aerospace and Defence Group.

SAFARICOM LIMITED ANNOUNCES AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2016.

Introduction to IAEG International Aerospace Environmental Group

Cincinnati Bell Inc. March 4, 2013

Electrical Products Group Conference

Den Store Aksjekvelden

Agenda Business Overview Operating Results Financial Results

Introduction to IAEG International Aerospace Environmental Group

Consolidated Financial Results for the Second Quarter, Fiscal 2018

Micronic Mydata Q1, Peter Uddfors, President and CEO Carl-Johan Blomberg, CFO 28 April, 2011

Taiwan Semiconductor Manufacturing Company Ltd. Announces First Quarter Results for the Period Ended March 31, 2000

Conference call April 26, :00 / Helsinki 08:00 / New York 1 Nokia 2016 Q1 2018

MUNTERS FOURTH. QUARTER 2018 Munters towards full potential

Economics: Principles in Action 2005 Correlated to: Indiana Family and Consumer Sciences Education, Consumer Economics (High School, Grades 9-12)

Economic Update. Automotive Insights Conference. Paul Traub. Federal Reserve Bank of Chicago January 18, Senior Business Economist

EFFICIENCY. DO IT. RIGHT.

EB, Elektrobit Corporation Interim Report 2Q CEO Jukka Harju August 8, 2012

As a note, this presentation was released as the dates shown and reflected management views as of these dates. All information in this presentation

Mellanox to Acquire EZchip

Conference call October 26, :00 / Helsinki 08:00 / New York 1 Nokia 2016 Q3 2017

Electric Lightwave: Transformation Reaches Critical Mass. August 2016

Conference Call Second Quarter 2003 Financial Results. Jorma Ollila Chairman and CEO

PMA Parts by Licensing Agreement

Revenue and earnings increase

Sierra Wireless. Corporate Overview. May 2017

COMPANY PRESENTATION 1ST HALF Bechtle AG Neckarsulm, August 2012

CYRUSONE TO ACQUIRE ZENIUM DATA CENTERS

Q Aerospace, Defense & Government Services Quarterly Industry Update 2 nd Quarter 2017

Investor Presentation. February 2016

BOEING OVERVIEW. Connect Protect Explore Inspire. Copyright 2018 Boeing. All rights reserved.

THE AIRLINE GUIDE TO PMA

Marketing with National Bank Financial

Agenda. Major Achievements in the FY2000. Operating Results for the FY2000. Financial Results for the FY2000

Click to edit Master title

The power of light. Better futures by harnessing the potential of light. Investor Relations Presentation. March 2019

VASCO Data Security International, Inc. NASDAQ: VDSI

Contents D&B Business Browser versus D&B Hoovers... 3 Search for a Target Company... 3 Researching a Target Company... 3 Available Company Reports...

Agreement with National Grid USA

For personal use only

IDEX company presentation. January 2009

AEROSPACE & DEFENSE OUTLOOK

ATI UK Strategy in Aerospace. Aerospace Technology Congress 2016

Innovation Beyond Boundaries GE in China title will go here

QUALCOMM Reports First Quarter Results Revenues $941 Million, $.65 EPS

STATISTICAL BULLETIN 20 YEARS

March The Foundation for a Wireless World

Annual General Meeting.

Safe Harbor Statement

Copyright 2015, First Solar, Inc.

China Mobile (Hong Kong) Limited

2014 Forecast Results

Saft Groupe SA reports fourth quarter and full year 2006 sales

TCL Multimedia Announces 2017 Annual Results

UNITED INTERNET AG. 6-Month Frankfurt/Main, August 13, 2018

Marketing with Northland Capital Markets

European CEO Seminar Exane BNP Paribas. Paris, June 14, 2012

Nokia Siemens Networks. Simon Beresford-Wylie Chief Executive Officer

C O N T E N T. The Mexican Federation of the Aerospace Industry (FEMIA ) The Aerospace Industry in Mexico at the glance

F-Secure Corporation - Interim report Q2 2011

Transcription:

Our Insight, Your Growth PMA MANUFACTURING & ENGINEERING INVESTMENT BANKING PERSPECTIVES DANIEL E. SIRVENT DIRECTOR, CORPORATE FINANCE AEROSPACE, DEFENSE & GOVERNMENT MARKETS 949.975.2055 DSIRVENT@CKCOOPER.COM C. K. COOPER & COMPANY 18300 VON KARMAN AVENUE SUITE 700 IRVINE, CA 92612 14 TH ANNUAL GORHAM PMA-DER CONFERENCE MARCH 22, 2012 SAN DIEGO, CA WWW.CKCOOPER.COM

DASHBOARD OF KEY ECONOMIC INDICATORS U.S. GROSS DOMESTIC PRODUCT GROWTH U.S. UNEMPLOYMENT RATES 8.0% 6.0% 4.0% 2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 0.7% 0.6% 4.0% 4.9% 6.8% U. S. GROSS DOMESTIC PRODUCT SEASONALLY ADJUSTED ANNUAL GROWTH RATES 0.7% 5.0% 3.7% 1.6% 1.7% 2.2% 2.2% 2.7% 3.4% 2.1% 2.5% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 5.0% U.S. NATIONAL UNEMPLOYMENT RATES Unempl. Rate % Full Employment 10.2% 8.3% Source: Bureau of Economic Analysis Source: Bureau of Economic Analysis U.S. CORPORATE PROFITS JET FUEL PRICES $1,600 $1,400 $1,200 U.S. CORPORATE PROFITS $BNS $5.00 $4.50 $4.00 $3.50 JET FUEL PRICES $USD/GALLON $1,000 $800 $600 $3.00 $2.50 $2.00 $1.50 $400 $1.00 $200 $0 2003 2004 2005 2006 2007 2008 2009 2010 $0.50 $ OUR INSIGHT, YOUR GROWTH 2

AEROSPACE INDUSTRY GROWTH DRIVERS COMMERCIAL ORDERS &BACKLOGS BOEING ORDERS & DELIVERIES Orders (Left Axis) Deliveries (Left Axis) Backlog (Right Axis) 1,400 4,500 1,200 4,000 3,500 1,000 3,000 800 2,500 600 2,000 400 1,500 1,000 200 500 0 0 1955 1962 1969 1976 1983 1990 1997 2004 2011 EXPANDING PRODUCTION PIPELINES BOEING & AIRBUS ANNOUNCED INCREASED PRODUCTION RATES ON MULTIPLE A/C PLATFORMS FOLLOWING STRONG 2011 BOOKINGS A320/NEO & B737/MAX PROGRAMS EXTEND THE LIFECYCLES OF THE 2 MOST SUCCESSFUL NARROW-BODIES IN HISTORY. B787 IN PRODUCTION MODE, WITH AGGRESSIVE FUTURE RATE TARGETS. A350XWB LINGERS IN DEVELOPMENT, BUT 2013/-15/-17 EIS DATES SUGGEST SOUND FOOTING FOR FUTURE SUPPLY REQUIREMENTS. CRJ1000 & G650 ARE ALSO RAMPING PRODUCTION, AND THE CORP/BIZ MARKETS PROVIDE UPSIDE AS THEY AREN T EXPECTED TO BEGIN CONTRIBUTING MATERIALLY TO GROWTH UNTIL EARLY 2013. SYSTEM CAPACITY: ASMS &OPERATIONS SYSTEM LOAD: RPMS &ENPLANEMENTS 7.5% 2.9% 3.0% 2.5% 2.5% 7.5% 7.3% 9.9% 12.5% 2004 2005 2006 2007 2008 2009 2010 2011 [E] 2010 Source: FAA Aerospace Forecast 2031 Annual % Change U.S. COMMERCIAL AIR CARRIERS ASMs SYSTEM ASMS & AIRCRAFT OPERATIONS Operations 12.5% 7.5% 3.5% 3.1% 2.5% 2.5% 7.5% 7.1% 7.2% 12.5% 2004 2005 2006 2007 2008 2009 2010 2011 [E] 2010 Source: FAA Aerospace Forecast 2031 Annual % Change U.S. COMMERCIAL AIR CARRIERS RPMs SYSTEM RPMS & ENPLANEMENTS Enplanements 12.5% OUR INSIGHT, YOUR GROWTH 3

MARKET LANDSCAPE: PMA OVER/UNDER HERE S WHAT WE SAID LAST YEAR: DESPITE IMPROVING CONDITIONS, TENDENCIES TOWARD HIGHER EFFICIENCY, NEXT GENERATION AIRFRAME & ENGINE PLATFORMS WILL REQUIRE ADDITIONAL ATTENTION IN ORDER TO ALLOW PMA/DER FIRMS TO CAPTURE ADDITIONAL OPPORTUNITIES. 2012 & Beyond Broad Market Trends PMA Over/Under OEMs PMA DER Aircraft Lifecycle Factors B737 MAX & A320 NEO 20+ More Years!! B787 & the Composites Generation Structure v. Component Power Plant Partnerships (CFM/IAE/EA) OEM Cartels & Merry Go Rounds Long Term Market Factors PMA Adoption & Penetration Improved Acceptance /T&C Gaining Share OEM Pricing Policies PMA Adoption Supply Chain Consolidation Stronger PMA/DERs Jet Fuel Prices MRO vs. Acquisitions Shifting Market Dynamics End Market Demand Long Term Commercial A/C Cycle in Play Replacements trump Repairs Strong New A/C Pipeline & Re Engining Negative Neutral Positive OUR INSIGHT, YOUR GROWTH 4

A&D CAPITAL MARKETS PERFORMANCE PMA COMPOSITE INDEX PERFORMANCE SELECTED PMA MANUFACTURERS 130.0% 125.0% 120.0% 115.0% 110.0% 105.0% 100.0% 95.0% 90.0% 85.0% PMA Composite Index S&P 500 S&P 500 / Aerospace & Defense DJ Industrials 80.0% 03/21/2011 05/10/2011 06/29/2011 08/18/2011 10/07/2011 11/28/2011 01/19/2012 03/09/2012 160.0% 150.0% 140.0% 130.0% 120.0% 110.0% 100.0% 90.0% 80.0% 70.0% PCP PH GR TKR TDG BEAV ESL TGI HEI 60.0% 03/21/2011 05/10/2011 06/29/2011 08/18/2011 10/07/2011 11/28/2011 01/19/2012 03/09/2012 VALUATION MULTIPLES: BY SEGMENT VALUATION MULTIPLES: PMA COMPANIES 14.0x 12.0x 10.0x 8.0x 6.0x 11.5x 9.6x VALUATIONS BY SEGMENT EV/EBITDA 10.0x 9.3x 4.9x LTM Prior Year 6.0x 16.0x 14.0x 12.0x 10.0x 8.0x 6.0x VALUATIONS BY COMPANY EV/EBITDA TEV/EBITDA Median 4.0x 4.0x 2.0x 0.0x 9.8x 9.0x 8.2x 7.7x 5.9x 6.5x COMMERCIAL AEROSPACE DEFENSE SYSTEMS & TECHNOLOGY SPACE & SATELLITE GOVERNMENT SERVICES SMALL & MICRO CAPS AIRLINES & TRANSPORT 2.0x 0.0x Source: FactSet Research & Public Company Filings OUR INSIGHT, YOUR GROWTH 5

A&D PUBLIC COMPANY VALUATIONS PUBLIC COMPANY TRADING VALUATIONS REFLECT AVERAGE P/E RATIOS OF ~18X AND ENTERPRISE VALUATIONS OF ~10X EBITDA FOR LEADING COMPONENT PARTS PROVIDERS. $MMs, except per share data Company Name PMA Data Market Data Financial Data Valuation #PMA Share 52 Week Market Current Gross EBITDA Enterprise EV / Rank Sales EBITDA Parts Price High Value P/E Margin Margin Value Sales Precision Castparts Corp. 6 14,456 $173.04 $179.47 $25,118.9 21.7x $6,956.6 30.8% $1,893.0 27.2% $25,065.3 3.6x 13.2x Eaton Corp. 15 3,836 $50.19 $56.42 $16,798.6 12.7x $16,049.0 29.8% $2,189.0 13.6% $19,834.9 1.2x 9.1x Goodrich Corp. 4 27,347 $125.28 $126.44 $15,760.4 19.8x $8,074.9 31.9% $1,645.9 20.4% $17,284.2 2.1x 10.5x Parker Hannifin Corp. 9 5,260 $87.61 $99.40 $13,220.6 12.6x $12,990.6 24.2% $1,947.3 15.0% $14,947.2 1.2x 7.7x Dover Corp. 13 4,574 $62.66 $70.15 $11,507.9 13.2x $7,950.1 38.4% $1,519.7 19.1% $12,923.8 1.6x 8.5x Rockwell Collins Inc. 12 4,641 $57.77 $65.45 $8,452.0 14.6x $4,790.0 50.9% $1,017.0 21.2% $9,256.4 1.9x 9.1x TransDigm Group Inc. 2 96,057 $114.15 $121.48 $5,782.5 27.8x $1,318.4 53.8% $639.2 48.5% $8,876.7 6.7x 13.9x Zodiac Aerospace 5 24,007 $104.53 $81.80 $5,350.3 17.8x $3,792.8 14.9% $609.6 16.1% $4,829.9 1.3x 7.9x Timken Co. 10 5,247 $52.60 $57.83 $5,141.1 11.5x $5,170.2 26.6% $942.7 18.2% $5,269.5 1.0x 5.6x BE Aerospace Inc. 11 4,803 $47.13 $48.29 $4,897.5 21.0x $2,499.8 37.5% $490.1 19.6% $5,733.3 2.3x 11.7x Spirit AeroSystems Holdings Inc 3 27,547 $24.88 $26.12 $3,554.5 18.4x $4,864.1 11.6% $501.4 10.3% $4,564.0 0.9x 9.1x Triumph Group Inc. 1 108,135 $63.06 $66.77 $3,097.5 14.1x $3,380.6 20.5% $566.0 16.7% $4,466.3 1.3x 7.9x Crane Co. 17 2,967 $47.60 $52.38 $2,749.9 9.5x $2,545.9 33.9% $377.2 14.8% $2,966.7 1.2x 7.9x Heico Corp. 7 9,789 $52.78 $61.97 $2,222.6 30.2x $803.3 39.3% $169.9 21.1% $2,572.3 3.2x 15.1x Esterline Technologies Corp. 8 5,973 $66.24 $82.28 $2,030.4 16.4x $1,810.0 33.6% $279.4 15.4% $2,883.7 1.6x 10.3x RBC Bearings Inc. 16 3,462 $45.27 $48.05 $999.6 22.9x $375.1 33.9% $81.5 21.7% $965.1 2.6x 11.8x Astronics Corp. 14 4,288 $34.53 $38.02 $421.7 20.7x $228.2 26.5% $38.3 16.8% $461.6 2.0x 12.1x EV / EBITDA Max 108,135 $173.0 $179.5 $25,118.9 30.2x $16,049.0 53.8% $2,189.0 48.5% $25,065.3 6.7x 15.1x Mean 20,729 $71.1 $75.4 $7,476.8 17.9x $4,917.6 31.7% $876.9 19.8% $8,405.9 2.1x 10.1x Median 5,260 $57.8 $65.5 $5,141.1 17.8x $3,792.8 31.9% $609.6 18.2% $5,269.5 1.6x 9.1x Min 2,967 $24.9 $26.1 $421.7 9.5x $228.2 11.6% $38.3 10.3% $461.6 0.9x 5.6x Source: FactSet Research, Company Filings & CKCC Proprietary FAA PMA Database Analysis OUR INSIGHT, YOUR GROWTH 6

PMA DATABASE ANALYSIS: 1972-PRESENT 120,000 ANNUAL PMA SUPPLEMENTAL FILINGS BYMODEL TYPE 100,000 80,000 60,000 Aircraft Engines Rotorcraft Other ~80K - Mexmil 7.9% CAGR (2001-11) 40,000 20,000 1972 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 873,204 PMA Supplements on record since 1972 / 82% of these (713,391) have been filed since 2000 As interest in PMA Manufacturing Approval has expanded, so has the reliability of FAA Record keeping: In 1972, the FAA amended CFR Part 21 creating a separate process for PMA approvals, and eliminating the incorporate by reference of TC requirements. Despite rapid growth in PMA manufacturing in the 1980 s, barely 10,000 Supplements are included in the FAA Database from 1972 1990. In 1995, the FAA announced its Enhanced Enforcement policy regarding PMA approval and the regularity and detail of Supplement record keeping improved noticeably. Since about 2000, Supplements incorporate greater detail and reflect improved accuracy including PMA Holder ID# s and more complete descriptions regarding Approval Basis. Source: CKCC Proprietary FAA PMA Database OUR INSIGHT, YOUR GROWTH 7

OEM MARKET SHARES BY PMA FILINGS GLOBAL TOP 10 OEMS - 89.4% OF PMAS TIER II: 6.7% COMBINED PMA MARKET SHARE 1.5% 1.6% 1.6% 3.1% 1.3% 1.3% 3.6% 4.7% 12.4% 10.6% 58.4% OEM MARKET SHARE BY PMAS Boeing/MDHC EADS/Airbus United Technologies Textron/Cessna Bombardier/LearJet Rolls Royce Hawker Beechcraft GE Aviation Piper Aircraft Embraer SA Other OEM PMAs % Israel Aerospace (IAI) 10,700 1.2% Lockheed Martin 10,335 1.2% Gulfstream 8,979 1.0% SAFRAN 8,590 1.0% Honeywell 5,597 0.6% Teledyne Continental 4,708 0.5% Dassault 3,793 0.4% Fokker Aircraft 2,530 0.3% BAE Systems 2,236 0.3% Finnmeccanica 1,204 0.1% TOTAL 58,672 6.7% The Top 10 OEMs account for more than 780,000 PMA Supplements: o o o All but 2 of the Top 10 are Global PublicCompanies Figures exclude PMAs on Joint Ventures (ATR/CFM/IAE/EA). 2nd Tier OEMs represent an incremental 6.7%, with the Top 35 OEMs account for 98% of all PMA Approvals. The remaining ~85 OEMs which are predominantly GA, Specialty & Recreational aircraft models represent less than 11% of the total. Source: CKCC Proprietary FAA PMA Database OUR INSIGHT, YOUR GROWTH 8

THE GREAT DEBATE: LICENSING VS. T&C 120000 ANNUAL PMA SUPPLEMENTAL FILINGS BYAPPROVAL BASIS 100000 80000 60000 License T&C Other 40000 20000 0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 PMA APPROVALS BY TEST &COMPUTATION HAVE GAINED GROUND SINCE 2005 Approval Basis 2005 2006 2007 2008 2009 2010 2011 License 86.5% 84.6% 71.5% 68.6% 54.2% 38.2% 31.9% T&C 5.3% 8.7% 14.0% 22.0% 33.6% 44.2% 58.1% Other 8.2% 6.7% 14.6% 9.4% 12.1% 17.6% 10.0% Grand Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% In addition, the Other category includes Approval Basis descriptions including STC and Design Approval references, with no mention of licensing agreements in any of the Other filings. CKCCalso threw529supplements which were supported by License AND T&C over to the opposition team (though it s hardly rounding error given the dataset). Source: CKCC Proprietary FAA PMA Database OUR INSIGHT, YOUR GROWTH 9

M&A MARKET TRENDS AD&G SECTOR VALUE &VOLUME AD&G SECTOR VALUATIONS 800 700 600 500 400 300 200 100 0 AD&G TRANSACTION TRENDS # of Deals $ Deal Value 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 $200,000 $180,000 $160,000 $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $- 14.00x 12.00x 10.00x 8.00x 6.00x 4.00x 2.00x 0.00x 11.77x 10.43x 6.05x 7.99x AD&G VALUATION TRENDS 4.15x 4.08x TEV/EBITDA 11.74x 11.29x 11.08x 10.00x 9.70x 9.34x 9.02x 8.16x 9.01x 8.85x Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 2008 2009 2010 2011 STRONG APPETITE FOR PMA COMPANIES PMA ACQUISITIONS: 2011-PRESENT EV/SALES MULTIPLES REMAINED CONSISTENT NEAR 2.0X EV/EBITDA MULTIPLES CONTRACTED SLIGHTLY IN 2011 MIMICKING PUBLIC MARKET VALUATION TRENDS. EV/Sales EV/EBITDA 2008 11 2011 2008 11 2011 Max 5.10x 3.44x 19.41x 13.14x Mean 2.09x 2.08x 12.26x 11.02x Median 1.98x 2.17x 13.14x 11.02x Min 0.37x 1.02x 7.64x 8.90x Source: FactSet Research, DACIS, Public Company Filings & CKCC Research OUR INSIGHT, YOUR GROWTH 10

PMA CONSOLIDATION: THE PAST IS PROLOGUE PMA-PMA MERGERS SHIFTING THE BALANCE Acquirer / Target 2011 Merger & Acquisition Transactions PMA # TransDigm, Inc. 7,162 AmSafe Global (Berkshire/Greenbriar) 10,315 Schneller LLC (Graham Partners) 78,580 TOTAL 96,057 United Technologies, Inc. 20,627 Goodrich Corp. [Pending] 27,347 TOTAL 47,974 Precision Castparts Corp. 9,509 Primus International (Oak Hill) 4,947 TOTAL 14,456 Wencor Group LLC 6,795 AAR Corp. (PMAs) 1,444 TOTAL 8,239 KAPCO, Inc. (Kirkhill Aicraft Products Co.) 4,884 AAXICO Sales, Inc. 863 TOTAL 5,747 Grand Total 172,473 % Total Market Share 24.2% In 2011, UTX announced an agreement to acquire GR for $18.4 Billion. While still pending completion later in 2012, the deal will double UTX s presence in the PMA business. TransDigm s acquisition of Schneller drives them into a close 2 nd place behind Triumph Group with the 2 companies controlling nearly 25% of the total body of PMA approvals. PCP spend $900 Million on its acquisition of Primus, more than doubling its stake in the PMA market. Despite a late entry for 2011, KAPCO s acquisition of AAXICO in February of this year brings this employee owned company ahead of all but a halfdozen private firms. Could KAPCO be edging closer to an IPO? Source: CKCC Proprietary FAA PMA Database 2012 LEAGUE TABLES Top 30 PMA Holders Type # PMA Approvals % Share Triumph Group, Inc. Public 108,135 12.4% TransDigm Group, Inc. Public 96,057 11.0% GM Nameplate, Inc. Private 48,690 5.6% United Technologies, Inc. Public 47,974 5.5% Spirit AeroSystems, Inc. Public 27,547 3.2% Zodiac Group SA Public 24,007 2.7% Avmat Aviation Materials Private 22,097 2.5% Panasonic Avionics Public 16,393 1.9% General Dynamics Public 15,704 1.8% Precision Castparts Corp. Public 14,456 1.7% AvioSupport Private 10,076 1.2% HEICO Corp. Public 9,789 1.1% BAE Systems Public 9,721 1.1% Aero Decals, Inc. Private 9,562 1.1% Wencor Group LLC PEG 8,239 0.9% Aerotech Holdings, Inc. Private 8,033 0.9% Great Lakes Aero Products Private 7,953 0.9% Esterline Technologies Public 5,973 0.7% KAPCO, Inc. ESOP 5,747 0.7% Parker Hannifin Public 5,260 0.6% Timken Company Public 5,247 0.6% B/E Aerospace Public 4,803 0.6% Rockwell Collins Public 4,641 0.5% Dover Corp. Public 4,574 0.5% Astronics, Inc. Public 4,288 0.5% Honeywell, Inc. Public 4,171 0.5% Loos & Company Private 3,911 0.4% Eaton Corp. Public 3,836 0.4% Meggitt plc Public 3,655 0.4% RBC Bearings Public 3,462 0.4% Top 30 Total 544,001 76.3% *Figures based on PMA Filings between 2000-2011 OUR INSIGHT, YOUR GROWTH 11

CASE STUDY: TRANSDIGM GROUP, INC. $1.2 BILLION M&A RAMPAGE SCHNELLER: HYPOTHETICAL ROI JUNE 2011 - TRANSDIGM GROUP PAID $288.5MM TO ACQUIRE SCHNELLER LLC FROM GRAHAM PARTNERS. FROM 2007-2011, SCHNELLER HAD RECEIVED OVER 78,000 PMA APPROVALS WITH 99.7% BASED ON TEST & COMPUTATION. DEC. 2011 - TDG PURCHASED HARCO LABORATORIES FOR $82.8MM TO GAIN ACCESS TO A PALTRY 300 PMA APPROVALS ON CRITICAL FLIGHT CONTROL, CABIN MANAGEMENT AND THERMOCOUPLE CABLE & HARNESS ASSEMBLIES. FEB. 2012 TDG ANNOUNCED IT S PLAN TO PURCHASE AMSAFE GLOBAL HOLDINGS AND ITS MORE THAN 10,000 PMA PART APPROVALS FROM BERKSHIRE EQUITY & GREENBRIAR EQUITY PARTNERS FOR $750MM, OR 2.9X AMSAFE S REPORTED$260MM IN ANNUAL SALES. TDGHAS BEEN GRANTED EARLY TERMINATION OF ITS HSR WAITING PERIOD. 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 Annual PMA Approvals 2007 2008 2009 2010 2011 ASSUMING AN ACQUISITION COST OF $120MM AND A 2:1 DEBT-TO-EQUITY RATIO, GRAHAM PARTNERS COULD HAVE EARNED $200MM ON A $40MM EQUITY INVESTMENT (ROI MULTIPLE: 5X) IN 4 YEARS PRIOR TO ANY DEBT AMORTIZATION. PRO-FORMA PMA POWERHOUSE 96,000 PMAS / 11.0% MARKET SHARE TRANSDIGM: PMAS BYAPPROVAL BASIS 1.6% 14.9% License T&C Other 83.5% 3.1% 0.9% TRANSDIGM: PMAS BYDIVISION 0.5% 10.7% 2.9% Schneller, LLC AmSafe/Bridport Bruce Aerospace, Inc. McKechnie Aerospace 81.8% Champion Aviation All Other TRANSDIGM: PMAS BYMODEL TYPE 1.3% 0.1% 0.0% Aircraft Engines Rotorcraft 98.6% Other Source: CKCC Proprietary FAA PMA Database OUR INSIGHT, YOUR GROWTH 12

CASE STUDY: UTX ACQUIRING GOODRICH PMA PROFILE: GOODRICH CORP. PMA PROFILE: POST-ACQUISITION 0.8% 0.8% 2.2% GOODRICH: PMAS BYOEM 0.8% 7.0% Boeing/MDHC Rolls Royce UPON COMPLETION OF ITS ACQUISITION OF GOODRICH CORP., UTX WILL CONTROL NEARLY 50,000 PMA PART APPROVALS WITH MORE THAN HALF DERIVED FROM GOODRICH. 70% VIA LICENSE AGREEMENTS WITH THE REMAINDER ASSOCIATED WITH STC & DESIGN APPROVALS. 10.1% 24.4% 53.9% Airbus Bombardier Cessna GE Aviation Engines Embraer SA Other Company / Division License T&C Other TOTAL % Sikorsky Aircraft & Services 6,574 4 11,396 17,974 37.5% Hamilton Sundstrand 2,313 17 80 2,410 5.0% Other (P&W/Kidde/etc.) 141 16 86 243 0.5% United Technologies 9,028 37 11,562 20,627 43.0% Goodrich Corp. 24,783 641 1,923 27,347 57.0% Post Acquisition 33,811 678 13,485 47,974 100.0% % by Approval 70.5% 1.4% 28.1% 100.0% POST-ACQUISITION PMA BUSINESS SEGMENTATION UTX/GR: PMAS BYDIVISION Sikorsky Aircraft & Services Goodrich: PMAs by Approval Basis 2.3% 7.0% UTX/GR: PMAS BYAPPROVAL BASIS 37.5% Hamilton Sundstrand License 43.8% License 57.0% Other (P&W/Kidde/etc.) Goodrich Corp. 90.6% T&C Other 56.1% T&C Other 0.5% 5.0% 0.2% Source: CKCC Proprietary FAA PMA Database OUR INSIGHT, YOUR GROWTH 13

CONTACT INFORMATION 18300 VON KARMAN AVE, SUITE 700 IRVINE, CA 92612 Phone: 949-477-9300 Website: www.ckcooper.com Alexander G. Montano Managing Director 949-477-9300 ext. 2048 Agmontano@ckcooper.com Daniel E. Sirvent Director, Corporate Finance 949-477-9300 ext. 2055 Dsirvent@ckcooper.com Adam B. Connors Director, Corporate Finance 949-477-9300 ext. 2051 Aconnors@ckcooper.com Alec E. Alessi Associate Director 949-477-9300 ext. 2061 Aalessi@ckcooper.com Hue X. Lapham Associate Director / Syndicate 949-477-9300 ext. 2046 Hlapham@ckcooper.com Carl Goltermann Associate 949-477-9300 ext. 2032 Cgoltermann@ckcooper.com Tom J. Hsiao Associate 949-477-9300 ext. 2085 Thsiao@ckcooper.com