CLEVELAND, May 9, 2023
/PRNewswire/ -- TransDigm Group Incorporated (NYSE: TDG), a leading
global designer, producer and supplier of highly engineered
aircraft components, today reported results for the second quarter
ended April 1, 2023.
Second quarter highlights include:
- Net sales of $1,592 million, up
20% from $1,327 million in the prior
year's quarter;
- Income from continuing operations of $304 million, up 53% from the prior year's
quarter;
- Earnings per share from continuing operations of $5.32, up 57% from the prior year's quarter;
- EBITDA As Defined of $817
million, up 29% from $633
million in the prior year's quarter;
- EBITDA As Defined margin of 51.3%;
- Adjusted earnings per share of $5.98, up 55% from $3.86 in the prior year's quarter; and
- Upward revision to fiscal 2023 financial guidance to reflect
the continued strong performance of the Company as well as to
include the acquisition of Calspan Corporation.
Quarter-to-Date Results
Net sales for the quarter increased 20.0%, or $265 million, to $1,592
million from $1,327 million in
the comparable quarter a year ago. Organic sales growth as a
percentage of net sales was 17.6%.
Income from continuing operations for the quarter increased
$105 million, or 52.8%, to
$304 million from $199 million in the comparable quarter a year
ago. The increase in income from continuing operations primarily
reflects the increase in net sales described above and favorable
sales mix. The increase was partially offset by higher income tax
expense and higher interest expense.
Adjusted net income for the quarter increased 50.2% to
$341 million, or $5.98 per share, from $227
million, or $3.86 per share,
in the comparable quarter a year ago.
EBITDA for the quarter increased 28.7% to $757 million from $588
million for the comparable quarter a year ago. EBITDA As
Defined for the quarter increased 29.1% to $817 million compared with $633 million in the comparable quarter a year
ago. EBITDA As Defined as a percentage of net sales for the quarter
was 51.3% compared with 47.7% in the comparable quarter a year
ago.
"I am very pleased with the operating results for the second
quarter and to see this continued strong performance as we hit the
halfway point in our fiscal year," stated Kevin Stein, TransDigm Group's President and
Chief Executive Officer. "Total revenue for the quarter ran ahead
of our expectations. Revenues sequentially improved in all three of
our major market channels - commercial OEM, commercial aftermarket
and defense; and bookings outpaced revenues for each of these
market channels. Our EBITDA As Defined margin improved to 51.3% for
the quarter, up approximately 360 basis points from the comparable
prior year period. This progression in our EBITDA As Defined margin
is a result of strict focus on our operating strategy and dedicated
efforts across our team, along with continued recovery in our
commercial aftermarket revenues.
Additionally, we are excited to have recently closed the
acquisition of Calspan Corporation. Calspan Corporation has
established positions across a diverse range of aftermarket-focused
aerospace and defense development and testing services. This
business fits well with our long-standing strategy, and its unique
service offerings exhibit the earnings stability and growth
potential that we have come to expect of our components-centered
businesses."
Financing Activities
As set out below, during the quarter, TransDigm completed two
refinancings, the net effect of which was to extend its 2025 debt
maturities out into 2028.
During the quarter, TransDigm successfully completed a
refinancing and repaid in full the approximately $5,559 million in the aggregate of Tranche E term
loans maturing March 30, 2025, and
Tranche F term loans maturing December 9,
2025. The Tranche E and Tranche F term loans were replaced
with approximately $4,559 million of
Tranche I term loans maturing August 24,
2028, along with the net proceeds from a private offering of
$1,000 million of 6.75% Senior
Secured Notes due August 15, 2028.
The applicable interest rate for the Tranche I term loans is Term
Secured Overnight Financing Rate ("SOFR") plus 3.25%.
Also during the quarter, TransDigm successfully completed a
private offering of $1,100 million of
6.75% Senior Secured Notes due August 15,
2028. These notes were an additional issuance of the
previously issued $1,000 million
6.75% Senior Secured Notes described above. TransDigm used the net
proceeds from the offering, plus cash on hand, to redeem all of its
$1,100 million of outstanding 8.00%
Senior Secured Notes due 2025 ("2025 Secured Notes"). On
March 9, 2023, TransDigm announced
the cash tender offer for all of its outstanding 2025 Secured
Notes.
Subsequent to the quarter, on April 10,
2023, TransDigm completed the redemption of the $1,100 million of outstanding 2025 Secured
Notes.
Acquisition of Calspan Corporation
Subsequent to the quarter, on May 8,
2023, TransDigm completed the acquisition of Calspan
Corporation ("Calspan") for approximately $725 million in cash, including certain tax
benefits. Calspan is a leading independent provider of highly
engineered testing and technology development services and systems
primarily for the aerospace & defense industry. Calspan's state
of the art transonic wind tunnel in Buffalo, New York is used across a range of
important aftermarket-focused development activities for both the
commercial and defense aerospace end markets.
Year-to-Date Results
Net sales for the twenty-six week period ended April 1, 2023 increased 18.6%, or $468 million, to $2,989
million from $2,521 million in
the comparable period a year ago. Organic sales growth as a
percentage of net sales for the twenty-six week period ended
April 1, 2023 was 16.5%.
Income from continuing operations for the twenty-six week period
ended April 1, 2023 increased
$171 million, or 47.2%, to
$533 million from $362 million in the comparable period a year ago.
The increase in income from continuing operations primarily
reflects the increase in net sales described above and favorable
sales mix. The increase was partially offset by a higher effective
tax rate and higher interest expense.
GAAP earnings per share were reduced in fiscal 2023 and 2022 by
$0.67 per share and $0.78 per share, respectively, as a result of
dividend equivalent payments made during each year. As a reminder,
GAAP earnings per share are reduced when TransDigm makes dividend
equivalent payments pursuant to the Company's stock option plans.
These dividend equivalent payments are made during the Company's
first fiscal quarter each year and also upon payment of any special
dividends.
Adjusted net income for the twenty-six week period ended
April 1, 2023 increased 48.6% to
$602 million, or $10.55 per share, from $405 million, or $6.85 per share, in the comparable period a year
ago.
EBITDA for the twenty-six week period ended April 1, 2023 increased 26.8% to $1,407 million from $1,110
million for the comparable period a year ago. EBITDA As
Defined for the period increased 26.5% to $1,516 compared with $1,198 in the comparable period a year ago.
EBITDA As Defined as a percentage of net sales for the period was
50.7% compared with 47.5% in the comparable period a year ago.
Please see the attached tables for a reconciliation of income
from continuing operations to EBITDA, EBITDA As Defined, and
adjusted net income; a reconciliation of net cash provided by
operating activities to EBITDA and EBITDA As Defined, and a
reconciliation of earnings per share to adjusted earnings per share
for the periods discussed in this press release.
Fiscal 2023 Outlook
Mr. Stein stated, "We are raising our full year guidance
primarily to reflect our strong second quarter results, the recent
acquisition of Calspan, and our current expectations for the
remainder of the fiscal year. We are pleased to once again raise
our guidance for fiscal 2023 and to see the continuation of
favorable trends in the commercial aerospace market recovery,
including the growth of flight activity in China."
TransDigm now expects fiscal 2023 financial guidance to be as
follows:
- Net sales are anticipated to be in the range of $6,410 million to $6,500
million compared with $5,429
million in fiscal 2022 (an increase of $300 million at the mid-point);
- Net income from continuing operations is anticipated to be in
the range of $1,141 million to
$1,191 million compared with
$866 million in fiscal 2022 (an
increase of $46 million at the
mid-point);
- Earnings per share from continuing operations is expected to be
in the range of $19.30 to
$20.18 per share based upon weighted
average shares outstanding of 57.1 million shares compared with
$13.38 per share in fiscal 2022 (an
increase of $0.80 at the
mid-point);
- EBITDA As Defined is anticipated to be in the range of
$3,230 million to $3,290 million compared with $2,646 million in fiscal 2022 (an increase of
$150 million at the midpoint and
corresponding to an EBITDA As Defined margin guide of approximately
50.5% for fiscal 2023);
- Adjusted earnings per share is expected to be in the range of
$23.31 to $24.19 per share compared with $17.14 per share in fiscal 2022 (an increase of
$1.58 at the mid-point); and
- Fiscal 2023 outlook is based on the following market growth
assumptions:
-
- Commercial aftermarket revenue growth in the 25% to 30%
range;
- Commercial OEM revenue growth in the 20% to 25% range; and
- Defense revenue growth in the low to mid-single-digit
percentage range.
Please see the attached Table 6 for a reconciliation of EBITDA,
EBITDA As Defined to net income and reported earnings per share to
adjusted earnings per share guidance mid-point estimated for the
fiscal year ending September 30,
2023. Additionally, please see attached table 7 for
comparison of the current fiscal year 2023 guidance versus the
previously issued fiscal year 2023 guidance.
Earnings Conference Call
TransDigm Group will host a conference call for investors and
security analysts on May 9, 2023, beginning at 11:00 a.m., Eastern Time. To join the call
telephonically, please register for the call at
https://register.vevent.com/register/BIafa09c78ca5f4fc3afe14eb9065fa14c.
Once registered, participants will receive the dial-in information
and a unique pin to access the call. The dial-in information and
unique pin will be sent to the email used to register for the call.
The unique pin is exclusive to the registrant and can only be used
by one person at a time. A live audio webcast of the call can also
be accessed online at http://www.transdigm.com. A slide
presentation will also be available for reference during the
conference call; go to the investor relations page of our website
and click on "Presentations."
The call will be archived on the website and available for
replay at approximately 2:00 p.m., Eastern
Time.
About TransDigm Group
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, batteries and chargers, engineered latching
and locking devices, engineered rods, engineered connectors and
elastomer sealing solutions, databus and power controls, cockpit
security components and systems, specialized and advanced cockpit
displays, engineered audio, radio and antenna systems, specialized
lavatory components, seat belts and safety restraints, engineered
and customized interior surfaces and related components, advanced
sensor products, switches and relay panels, thermal protection and
insulation, lighting and control technology, parachutes, high
performance hoists, winches and lifting devices, and cargo loading,
handling and delivery systems.
Non-GAAP Supplemental Information
EBITDA, EBITDA As Defined, EBITDA As Defined Margin, adjusted
net income and adjusted earnings per share are non-GAAP financial
measures presented in this press release as supplemental
disclosures to net income and reported results. TransDigm Group
defines EBITDA as earnings before interest, taxes, depreciation and
amortization and defines EBITDA As Defined as EBITDA plus certain
non-operating items recorded as corporate expenses, including
non-cash compensation charges incurred in connection with TransDigm
Group's stock incentive or deferred compensation plans, foreign
currency gains and losses, acquisition-integration costs,
acquisition and divestiture transaction-related expenses, and
refinancing costs. Acquisition and divestiture-related costs
represent accounting adjustments to inventory associated with
acquisitions of businesses and product lines that were charged to
cost of sales when the inventory was sold; costs incurred to
integrate acquired businesses and product lines into the Company's
operations, facility relocation costs and other acquisition-related
costs; transaction-related costs for both acquisitions and
divestitures comprising deal fees; legal, financial and tax
diligence expenses and valuation costs that are required to be
expensed as incurred and other acquisition accounting adjustments.
TransDigm Group defines adjusted net income as net income plus
purchase accounting backlog amortization expense, effects from the
sale on businesses, non-cash compensation charges incurred in
connection with TransDigm Group's stock incentive or deferred
compensation plans, foreign currency gains and losses,
acquisition-integration costs, acquisition and divestiture
transaction-related expenses, and refinancing costs. EBITDA As
Defined Margin represents EBITDA As Defined as a percentage of net
sales. TransDigm Group defines adjusted diluted earnings per share
as adjusted net income divided by the total outstanding shares for
basic and diluted earnings per share. For more information
regarding the computation of EBITDA, EBITDA As Defined and adjusted
net income and adjusted earnings per share, please see the attached
financial tables.
TransDigm Group presents these non-GAAP financial measures
because it believes that they are useful indicators of its
operating performance. TransDigm Group believes that EBITDA is
useful to investors because it is frequently used by securities
analysts, investors and other interested parties to measure
operating performance among companies with different capital
structures, effective tax rates and tax attributes, capitalized
asset values and employee compensation structures, all of which can
vary substantially from company to company. In addition, analysts,
rating agencies and others use EBITDA to evaluate a company's
ability to incur and service debt. EBITDA As Defined is used to
measure TransDigm Inc.'s compliance with the financial covenant
contained in its credit facility. TransDigm Group's management also
uses EBITDA As Defined to review and assess its operating
performance, to prepare its annual budget and financial projections
and to review and evaluate its management team in connection with
employee incentive programs. Moreover, TransDigm Group's management
uses EBITDA As Defined to evaluate acquisitions and as a liquidity
measure. In addition, TransDigm Group's management uses adjusted
net income as a measure of comparable operating performance between
time periods and among companies as it is reflective of changes in
pricing decisions, cost controls and other factors that affect
operating performance.
None of EBITDA, EBITDA As Defined, EBITDA As Defined Margin,
adjusted net income or adjusted earnings per share is a measurement
of financial performance under U.S. GAAP and such financial
measures should not be considered as an alternative to net income,
operating income, earnings per share, cash flows from operating
activities or other measures of performance determined in
accordance with U.S. GAAP. In addition, TransDigm Group's
calculation of these non-GAAP financial measures may not be
comparable to the calculation of similarly titled measures reported
by other companies.
Although we use EBITDA and EBITDA As Defined as measures to
assess the performance of our business and for the other purposes
set forth above, the use of these non-GAAP financial measures as
analytical tools has limitations, and you should not consider any
of them in isolation, or as a substitute for analysis of our
results of operations as reported in accordance with U.S. GAAP.
Some of these limitations are:
- neither EBITDA nor EBITDA As Defined reflects the significant
interest expense, or the cash requirements, necessary to service
interest payments on our indebtedness;
- although depreciation and amortization are non-cash charges,
the assets being depreciated and amortized will often have to be
replaced in the future, and neither EBITDA nor EBITDA As Defined
reflects any cash requirements for such replacements;
- the omission of the substantial amortization expense associated
with our intangible assets further limits the usefulness of EBITDA
and EBITDA As Defined;
- neither EBITDA nor EBITDA As Defined includes the payment of
taxes, which is a necessary element of our operations; and
- EBITDA As Defined excludes the cash expense we have incurred to
integrate acquired businesses into our operations, which is a
necessary element of certain of our acquisitions.
Forward-Looking Statements
Statements in this press release that are not historical facts,
including statements under the heading "Fiscal 2023 Outlook," 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
that could cause TransDigm Group's 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 the TransDigm Group's business,
results of operations, financial condition and liquidity; the
sensitivity of TransDigm Group's business to the number of flight
hours that its customers' planes spend aloft and its customers'
profitability, both of which are affected by general economic
conditions; current and future geopolitical or other worldwide
events; cyber-security threats, natural disasters and climate
change-related events; TransDigm Group's reliance on certain
customers; the U.S. defense budget and risks associated with being
a government supplier including government audits and
investigations; failure to maintain government or industry
approvals; failure to complete or successfully integrate
acquisitions; TransDigm Group's indebtedness; potential
environmental liabilities; liabilities arising in connection with
litigation; climate-related regulations; increases in raw material
costs, taxes and labor costs that cannot be recovered in product
pricing; risks and costs associated with TransDigm Group's
international sales and operations; and other 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 for the fiscal year
ended September 30, 2022 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:
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Investor
Relations
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216-706-2945
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ir@transdigm.com
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TRANSDIGM GROUP
INCORPORATED
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CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
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FOR THE THIRTEEN AND
TWENTY-SIX WEEK PERIODS ENDED
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Table
1
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APRIL 1, 2023 AND
APRIL 2, 2022
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(Amounts in
millions, except per share amounts)
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(Unaudited)
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|
|
|
|
|
|
|
|
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Thirteen Week
Periods Ended
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Twenty-Six Week
Periods Ended
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April 1,
2023
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April 2,
2022
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April 1,
2023
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April 2,
2022
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NET SALES
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$
1,592
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$
1,327
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$
2,989
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$
2,521
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COST OF
SALES
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663
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591
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1,268
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1,124
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GROSS PROFIT
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929
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736
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1,721
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1,397
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SELLING AND
ADMINISTRATIVE EXPENSES
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199
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183
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369
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353
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AMORTIZATION OF
INTANGIBLE ASSETS
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35
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33
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68
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69
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INCOME FROM
OPERATIONS
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695
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520
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1,284
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975
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INTEREST
EXPENSE—NET
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295
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266
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581
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530
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REFINANCING
COSTS
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5
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—
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9
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—
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OTHER INCOME
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(2)
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(6)
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(3)
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(8)
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INCOME FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES
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397
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260
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697
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453
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INCOME TAX
PROVISION
|
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93
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61
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164
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|
91
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INCOME FROM CONTINUING
OPERATIONS
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304
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|
199
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533
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362
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INCOME FROM
DISCONTINUED OPERATIONS, NET OF TAX
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—
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—
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—
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1
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NET INCOME
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304
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|
199
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533
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|
363
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LESS: NET INCOME
ATTRIBUTABLE TO NONCONTROLLING INTERESTS
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—
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—
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(1)
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(1)
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NET INCOME ATTRIBUTABLE
TO TD GROUP
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$
304
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$
199
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$
532
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$
362
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NET INCOME APPLICABLE
TO TD GROUP COMMON STOCKHOLDERS
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$
304
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$
199
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$
494
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$
316
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Earnings per share
attributable to TD Group common stockholders:
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Earnings per share
from continuing operations—basic and diluted
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$
5.32
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$
3.38
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$
8.65
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$
5.33
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Earnings per share
from discontinued operations—basic and diluted
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—
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—
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—
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0.02
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Earnings per
share
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$
5.32
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$
3.38
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$
8.65
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$
5.35
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Weighted-average shares
outstanding:
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Basic and
diluted
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57.1
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58.9
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57.1
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59.0
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TRANSDIGM GROUP
INCORPORATED
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SUPPLEMENTAL
INFORMATION - RECONCILIATION OF EBITDA,
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EBITDA AS DEFINED TO
INCOME FROM CONTINUING OPERATIONS
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FOR THE THIRTEEN AND
TWENTY-SIX WEEK PERIODS ENDED
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Table
2
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APRIL 1, 2023 AND
APRIL 2, 2022
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(Amounts in
millions, except per share amounts)
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(Unaudited)
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|
|
|
|
|
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Thirteen Week
Periods Ended
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Twenty-Six Week
Periods Ended
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April 1,
2023
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April 2,
2022
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April 1,
2023
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April 2,
2022
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Income from continuing
operations
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$
304
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$ 199
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$
533
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$
362
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Adjustments:
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Depreciation and
amortization expense
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65
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62
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129
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127
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Interest expense,
net
|
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295
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|
266
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581
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530
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Income tax
provision
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93
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|
61
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|
164
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91
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EBITDA
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757
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588
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1,407
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1,110
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Adjustments:
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Acquisition and
divestiture transaction-related expenses and adjustments
(1)
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3
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3
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6
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8
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Non-cash stock and
deferred compensation expense (2)
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42
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45
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77
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82
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Refinancing costs
(3)
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5
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—
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9
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—
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Other, net
(4)
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10
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(3)
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17
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(2)
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Gross Adjustments to
EBITDA
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60
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45
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109
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88
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EBITDA As
Defined
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$
817
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$ 633
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$
1,516
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$
1,198
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EBITDA As Defined,
Margin (5)
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51.3 %
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47.7 %
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50.7 %
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47.5 %
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(1)
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Represents accounting
adjustments to inventory associated with acquisitions of businesses
and product lines that were charged to cost of sales when inventory
was sold; costs incurred to integrate acquired businesses and
product lines into TD Group's operations, facility relocation costs
and other acquisition-related costs; transaction-related costs for
both acquisitions and divestitures comprising deal fees, legal,
financial and tax due diligence expenses, and valuation costs that
are required to be expensed as incurred.
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(2)
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Represents the
compensation expense recognized by TD Group under our stock
incentive plans and deferred compensation plans.
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(3)
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Represents costs
expensed related to debt financing activities, including new
issuances, extinguishments, refinancings and amendments to existing
agreements.
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(4)
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Primarily represents
foreign currency transaction (gains) or losses, payroll withholding
taxes related to dividend equivalent payments and stock option
exercises, non-service related pension costs, deferred compensation
payments and, for fiscal 2022, proceeds received from a final
working capital settlement for the ScioTeq and TREALITY
divestiture.
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(5)
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The EBITDA As Defined
margin represents the amount of EBITDA As Defined as a percentage
of net sales.
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TRANSDIGM GROUP
INCORPORATED
|
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SUPPLEMENTAL
INFORMATION - RECONCILIATION OF
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|
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REPORTED EARNINGS
PER SHARE TO
|
|
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|
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ADJUSTED EARNINGS
PER SHARE
|
|
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|
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FOR THE THIRTEEN AND
TWENTY-SIX WEEK PERIODS ENDED
|
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Table
3
|
APRIL 1, 2023 AND
APRIL 2, 2022
|
|
|
|
(Amounts in
millions, except per share amounts)
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Thirteen Week
Periods Ended
|
|
Twenty-Six Week
Periods Ended
|
|
|
April 1,
2023
|
|
April 2,
2022
|
|
April 1,
2023
|
|
April 2,
2022
|
Reported Earnings
Per Share
|
|
|
|
|
|
|
|
|
Income from continuing
operations
|
|
$
304
|
|
$
199
|
|
$
533
|
|
$
362
|
Less: Net income
attributable to noncontrolling interests
|
|
—
|
|
—
|
|
(1)
|
|
(1)
|
Net income from
continuing operations attributable to TD Group
|
|
304
|
|
199
|
|
532
|
|
361
|
Less: Dividends paid on
participating securities
|
|
—
|
|
—
|
|
(38)
|
|
(46)
|
Income from
discontinued operations, net of tax
|
|
—
|
|
—
|
|
—
|
|
1
|
Net income applicable
to TD Group common stockholders—basic and diluted
|
|
$
304
|
|
$
199
|
|
$
494
|
|
$
316
|
Weighted-average
shares outstanding under the two-class method
|
|
|
|
|
|
|
|
|
Weighted-average common
shares outstanding
|
|
54.7
|
|
55.2
|
|
54.6
|
|
55.2
|
Vested options deemed
participating securities
|
|
2.4
|
|
3.7
|
|
2.5
|
|
3.8
|
Total shares for basic
and diluted earnings per share
|
|
57.1
|
|
58.9
|
|
57.1
|
|
59.0
|
Earnings per share from
continuing operations—basic and diluted
|
|
$
5.32
|
|
$
3.38
|
|
$
8.65
|
|
$
5.33
|
Earnings per share from
discontinued operations—basic and diluted
|
|
—
|
|
—
|
|
—
|
|
0.02
|
Earnings per
share
|
|
$
5.32
|
|
$
3.38
|
|
$
8.65
|
|
$
5.35
|
Adjusted Earnings
Per Share
|
|
|
|
|
|
|
|
|
Income from continuing
operations
|
|
$
304
|
|
$
199
|
|
$
533
|
|
$
362
|
Gross Adjustments to
EBITDA
|
|
60
|
|
45
|
|
109
|
|
88
|
Purchase accounting
backlog amortization
|
|
1
|
|
1
|
|
2
|
|
5
|
Tax adjustment
(1)
|
|
(24)
|
|
(18)
|
|
(42)
|
|
(50)
|
Adjusted net
income
|
|
$
341
|
|
$
227
|
|
$
602
|
|
$
405
|
Adjusted diluted
earnings per share under the two-class method
|
|
$
5.98
|
|
$
3.86
|
|
$
10.55
|
|
$
6.85
|
Diluted Earnings Per
Share to Adjusted Earnings Per Share
|
|
|
|
|
|
|
|
|
Diluted earnings per
share from continuing operations
|
|
$
5.32
|
|
$
3.38
|
|
$
8.65
|
|
$
5.33
|
Adjustments to diluted
earnings per share:
|
|
|
|
|
|
|
|
|
Inclusion
of the dividend equivalent payments
|
|
—
|
|
—
|
|
0.67
|
|
0.78
|
Acquisition and
divestiture transaction-related expenses and adjustments
|
|
0.05
|
|
0.04
|
|
0.10
|
|
0.15
|
Non-cash
stock and deferred compensation expense
|
|
0.55
|
|
0.55
|
|
1.01
|
|
1.03
|
Refinancing
costs
|
|
0.07
|
|
—
|
|
0.12
|
|
—
|
Tax adjustment on
income from continuing operations before taxes
(1)
|
|
(0.15)
|
|
(0.10)
|
|
(0.23)
|
|
(0.44)
|
Other,
net
|
|
0.14
|
|
(0.01)
|
|
0.23
|
|
—
|
Adjusted earnings per
share
|
|
$
5.98
|
|
$
3.86
|
|
$
10.55
|
|
$
6.85
|
(1)
|
|
For the thirteen and twenty-six week periods ended April 1,
2023 and April 2, 2022, the Tax adjustment represents the tax
effect of the adjustments at the applicable effective tax rate, as
well as the impact on the effective tax rate when excluding the
excess tax benefits on stock option exercises. Stock compensation
expense is excluded from adjusted net income and therefore we have
excluded the impact that the excess tax benefits on stock option
exercises have on the effective tax rate for determining adjusted
net income.
|
TRANSDIGM GROUP
INCORPORATED
|
|
|
SUPPLEMENTAL
INFORMATION - RECONCILIATION OF NET CASH
|
|
|
PROVIDED BY
OPERATING ACTIVITIES TO EBITDA,
|
|
|
EBITDA AS
DEFINED
|
|
|
FOR THE TWENTY-SIX
WEEK PERIODS ENDED
|
|
Table
4
|
APRIL 1, 2023 AND
APRIL 2, 2022
|
|
(Amounts in
millions)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
Twenty-Six Week
Periods Ended
|
|
|
April 1,
2023
|
|
April 2,
2022
|
Net cash provided by
operating activities
|
|
$
507
|
|
$
366
|
Adjustments:
|
|
|
|
|
Changes in assets and
liabilities, net of effects from acquisitions and sales of
businesses
|
|
242
|
|
201
|
Interest expense, net
(1)
|
|
561
|
|
513
|
Income tax provision -
current
|
|
164
|
|
92
|
Loss contract
amortization
|
|
19
|
|
20
|
Non-cash stock and
deferred compensation expense (2)
|
|
(77)
|
|
(82)
|
Refinancing costs
(3)
|
|
(9)
|
|
—
|
EBITDA
|
|
1,407
|
|
1,110
|
Adjustments:
|
|
|
|
|
Acquisition and
divestiture transaction-related expenses and adjustments
(4)
|
|
6
|
|
8
|
Non-cash stock and
deferred compensation expense (2)
|
|
77
|
|
82
|
Refinancing costs
(3)
|
|
9
|
|
—
|
Other, net
(5)
|
|
17
|
|
(2)
|
EBITDA As
Defined
|
|
$
1,516
|
|
$
1,198
|
|
|
|
(1)
|
|
Represents interest
expense excluding the amortization of debt issuance costs and
premium and discount on debt.
|
(2)
|
|
Represents the
compensation expense recognized by TD Group under our stock
incentive plans and deferred compensation plans.
|
(3)
|
|
Represents costs
expensed related to debt financing activities, including new
issuances, extinguishments, refinancings and amendments to existing
agreements.
|
(4)
|
|
Represents accounting
adjustments to inventory associated with acquisitions of businesses
and product lines that were charged to cost of sales when inventory
was sold; costs incurred to integrate acquired businesses and
product lines into TD Group's operations, facility relocation costs
and other acquisition-related costs; transaction-related costs for
both acquisitions and divestitures comprising deal fees, legal,
financial and tax due diligence expenses, and valuation costs that
are required to be expensed as incurred.
|
(5)
|
|
Primarily represents
foreign currency transaction (gains) or losses, payroll withholding
taxes related to dividend equivalent payments and stock option
exercises, non-service related pension costs, deferred compensation
payments and, for fiscal 2022, proceeds received from a final
working capital settlement for the ScioTeq and TREALITY
divestiture.
|
TRANSDIGM GROUP
INCORPORATED
|
|
|
SUPPLEMENTAL
INFORMATION - BALANCE SHEET DATA
|
|
Table
5
|
(Amounts in
millions)
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
April 1,
2023
|
|
September 30,
2022
|
Cash and cash
equivalents
|
|
$
3,418
|
|
$
3,001
|
Restricted cash
(1)
|
|
1,100
|
|
—
|
Trade accounts
receivable—Net
|
|
1,018
|
|
967
|
Inventories—Net
|
|
1,529
|
|
1,332
|
Current portion of
long-term debt (1)
|
|
1,162
|
|
76
|
Short-term
borrowings—trade receivable securitization facility
|
|
350
|
|
350
|
Accounts
payable
|
|
292
|
|
279
|
Accrued and other
current liabilities
|
|
718
|
|
721
|
Long-term
debt
|
|
19,349
|
|
19,369
|
Total TD Group
stockholders' deficit
|
|
(2,901)
|
|
(3,773)
|
(1)
|
|
Represents the cash committed from the issuance of the $1,100
million in 6.75% Senior Secured Notes due August 15, 2028, to
redeem the outstanding $1,100 million in 8.00% Senior Secured Notes
due 2025. The notification of the redemption of the $1,100 million
8.00% Secured Notes due 2025 occurred on March 9, 2023, and the
redemption occurred on April 10, 2023.
|
TRANSDIGM GROUP
INCORPORATED
|
|
SUPPLEMENTAL
INFORMATION - RECONCILIATION OF EBITDA,
|
EBITDA AS DEFINED TO
NET INCOME AND REPORTED EARNINGS
|
PER SHARE TO
ADJUSTED EARNINGS PER SHARE GUIDANCE MID-POINT
|
FOR THE FISCAL YEAR
ENDING SEPTEMBER 30, 2023
|
Table
6
|
(Amounts in
millions, except per share amounts)
|
(Unaudited)
|
|
|
|
|
GUIDANCE
MID-POINT
|
|
|
Fiscal Year
Ended
September 30, 2023
|
Net Income
|
|
$
1,166
|
Adjustments:
|
|
|
Depreciation and
amortization expense
|
|
277
|
Interest expense -
net
|
|
1,185
|
Income tax provision -
current
|
|
388
|
EBITDA
|
|
3,016
|
Adjustments:
|
|
|
Acquisition
transaction-related expenses and adjustments
(1)
|
|
18
|
Non-cash stock and
deferred compensation expense (1)
|
|
165
|
Refinancing costs
(1)
|
|
36
|
Other, net
(1)
|
|
25
|
Gross Adjustments to
EBITDA
|
|
244
|
EBITDA As
Defined
|
|
$
3,260
|
EBITDA As Defined,
Margin (1)
|
|
50.5 %
|
|
|
|
Earnings per
share
|
|
$
19.74
|
Adjustments to earnings
per share:
|
|
|
Inclusion of the
dividend equivalent payments
|
|
0.67
|
Non-cash stock and
deferred compensation expense
|
|
2.18
|
Acquisition related
expenses and adjustments
|
|
0.36
|
Refinancing
costs
|
|
0.47
|
Other, net
|
|
0.33
|
Adjusted earnings per
share
|
|
$
23.75
|
|
|
|
Weighted-average shares
outstanding
|
|
57.1
|
(1)
|
|
Refer to Table 2 above for definitions of Non-GAAP measurement
adjustments.
|
|
|
|
|
|
|
|
TRANSDIGM GROUP
INCORPORATED
|
|
|
SUPPLEMENTAL
INFORMATION
|
CURRENT FISCAL YEAR
2023 GUIDANCE VERSUS
|
PRIOR FISCAL YEAR
2023 GUIDANCE
|
|
Table
7
|
(Amounts in
millions, except per share amounts)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
Current
Fiscal Year 2023
Guidance Issued
May 9, 2023
|
|
Prior
Fiscal Year 2023
Guidance Issued
February 7, 2023
|
|
Change at
Mid-Point
|
|
|
|
|
|
|
|
Net Sales
|
|
$6,410 to
$6,500
|
|
$6,070 to
$6,240
|
|
$300
|
|
|
|
|
|
|
|
GAAP Net Income from
Continuing Operations
|
|
$1,141 to
$1,191
|
|
$1,080 to
$1,160
|
|
$46
|
|
|
|
|
|
|
|
GAAP Earnings Per Share
from Continuing Operations
|
|
$19.30 to
$20.18
|
|
$18.24 to
$19.64
|
|
$0.80
|
|
|
|
|
|
|
|
EBITDA As
Defined
|
|
$3,230 to
$3,290
|
|
$3,060 to
$3,160
|
|
$150
|
|
|
|
|
|
|
|
Adjusted Earnings Per
Share
|
|
$23.31 to
$24.19
|
|
$21.47 to
$22.87
|
|
$1.58
|
|
|
|
|
|
|
|
Weighted-Average Shares
Outstanding
|
|
57.1
|
|
57.1
|
—
|
|
|
|
|
|
|
|
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SOURCE TransDigm Group Inc.