CLEVELAND, Nov. 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 fourth quarter
ended September 30, 2023. The Company also announced that its
Board of Directors has authorized a special cash dividend of
$35.00 on each outstanding share of
common stock and cash dividend equivalent payments under options
granted under its stock options plans. The record date for the
special dividend is November 20,
2023, and the payment date for the dividend is November 27, 2023.
Fourth quarter highlights include:
- Net sales of $1,852 million, up
23% from $1,510 million in the prior
year's quarter;
- Income from continuing operations of $414 million, up 56% from the prior year's
quarter;
- Earnings per share from continuing operations of $7.23, up 82% from the prior year's quarter;
- EBITDA As Defined of $963
million, up 28% from $752
million in the prior year's quarter;
- EBITDA As Defined margin of 52.0%; and
- Adjusted earnings per share of $8.03, up 46% from $5.50 in the prior year's quarter.
Fiscal 2023 highlights include:
- Net sales of $6,585 million, up
21% from $5,429 million in the prior
fiscal year;
- Income from continuing operations of $1,299 million, up 50% from the prior fiscal
year;
- Earnings per share from continuing operations of $22.03, up 65% from the prior fiscal year;
- EBITDA As Defined of $3,395
million, up 28% from $2,646
million in the prior fiscal year;
- EBITDA As Defined margin of 51.6%; and
- Adjusted earnings per share of $25.84, up 51% from $17.14 in the prior fiscal year.
Quarter-to-Date Results
Net sales for the quarter increased 22.6%, or $342 million, to $1,852
million from $1,510 million in
the comparable quarter a year ago. Organic sales growth as a
percentage of net sales was 18.5%.
Income from continuing operations for the quarter increased
$148 million, or 55.6%, to
$414 million from $266 million in the comparable quarter a year
ago. The increase in income from continuing operations primarily
reflects the increase in net sales described above, favorable sales
mix and lower non-cash stock and deferred compensation expense.
These favorable items contributing to the increase in income from
continuing operations was partially offset by higher income tax
expense, higher one-time refinancing costs and higher interest
expense.
GAAP earnings per share in the prior year quarter were reduced
by $0.70 per share as a result of
dividend equivalent payments made in the fourth quarter related to
the $18.50 per share dividend
declared and paid in the quarter last year. No dividend
equivalent payments were made during the fourth quarter of fiscal
2023. 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 quarter increased 47.0% to
$460 million, or $8.03 per share, from $313
million, or $5.50 per share,
in the comparable quarter a year ago.
EBITDA for the quarter increased 29.4% to $911 million from $704
million for the comparable quarter a year ago. EBITDA As
Defined for the quarter increased 28.1% to $963 million compared with $752 million in the comparable quarter a year
ago. EBITDA As Defined as a percentage of net sales for the quarter
was 52.0% compared with 49.8% in the comparable quarter a year
ago.
During the quarter, TransDigm successfully completed a private
offering of $1,450 million of 6.875%
Senior Secured Notes due December 15,
2030. TransDigm used the net proceeds from the offering,
plus cash on hand, to redeem all of its $950
million of outstanding 6.375% Senior Subordinated Notes due
2026 and all of its $500 million of
outstanding 6.875% Senior Subordinated Notes due 2026.
Acquisition Activity Subsequent to the Quarter
Subsequent to the quarter, and as previously announced on
November 9, 2023, TransDigm has
entered into a definitive agreement to acquire the Electron Device
Business of Communications & Power Industries ("CPI"), a
portfolio company of TJC, L.P., for approximately $1.385 billion in cash. CPI's Electron Device
Business is a leading global manufacturer of electronic components
and subsystems primarily serving the aerospace and defense market.
Its products are highly engineered, proprietary components with
significant aftermarket content and a strong presence across
aerospace and defense platforms. The acquisition is expected to
close by the end of TransDigm's third fiscal quarter of 2024,
subject to regulatory approvals in the
United States and United
Kingdom and customary closing conditions.
Year-to-Date Results
Fiscal 2023 net sales increased 21.3%, or $1,156 million, to $6,585
million from $5,429 million in
fiscal 2022. Organic sales growth as a percentage of net sales was
18.1%.
Fiscal 2023 income from continuing operations increased
$433 million, or 50.0%, to
$1,299 million from $866 million in fiscal 2022. 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, higher
interest expense and higher one-time refinancing costs.
GAAP earnings per share were reduced in fiscal 2023 and 2022 by
$0.67 per share and $1.47 per share, respectively, as a result of
dividend equivalent payments made during each year.
Fiscal 2023 adjusted net income increased 48.0% to $1,477 million, or $25.84 per share, from $998 million, or $17.14 per share, in fiscal 2022.
Fiscal 2023 EBITDA increased 28.2% to $3,148 million from $2,456
million in fiscal 2022. EBITDA As Defined for fiscal 2023
increased 28.3% to $3,395 compared
with $2,646 in fiscal 2022. EBITDA As
Defined as a percentage of net sales for fiscal 2023 was 51.6%
compared with 48.7% in fiscal 2022.
"I am extremely pleased with our team's performance and the
overall operating results for the fourth quarter and full year
fiscal 2023," stated Kevin Stein,
TransDigm Group's President and Chief Executive Officer. "Our
diligent focus on our value drivers and cost structure along with
the continued recovery of the commercial aftermarket drove a fiscal
2023 EBITDA As Defined margin of 51.6%, which was up almost three
margin points from fiscal 2022. The strong fourth quarter fiscal
2023 performance resulted in surpassing our most recently issued
fiscal 2023 EBITDA As Defined Margin guidance and meeting the high
end of that revenue guidance. Revenues also sequentially improved
in the fourth quarter for all three of our major market channels -
commercial OEM, commercial aftermarket and defense.
Additionally, given the significant amount of cash currently
available, our strong operating performance, outlook for steady
cash generation and ongoing expectations, we believe that this is
the appropriate time to declare and pay a special dividend, as we
have done in the past. The payout of a special dividend of
$35.00 per share will leave us with
significant liquidity and financial flexibility to meet any likely
range of capital requirements or other opportunities. As you know,
we are continuously evaluating our capital allocation options and
are pleased to return this amount of capital to our shareholders.
We will have deployed over $2.7
billion of capital in under seven months including the
Calspan acquisition that closed this past May and this dividend to
be paid in late November.
We look forward to the opportunity to continue creating value
for our shareholders as we move into our fiscal 2024."
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 2024 Outlook
Mr. Stein stated, "We are issuing full year fiscal 2024 guidance
today, which reflects our current expectations for the year. We
were very pleased to see the progression of the commercial
aerospace market recovery in our fiscal 2023 and we expect the
recovery to continue in our fiscal 2024. Trends remain favorable
across all three of our market channels - commercial OEM,
commercial aftermarket and defense." This guidance excludes any
impact from the pending acquisition of the Electron Device Business
of CPI.
TransDigm expects fiscal 2024 financial guidance to be as
follows:
- Net sales are anticipated to be in the range of $7,480 million to $7,680
million compared with $6,585
million in fiscal 2023;
- Net income from continuing operations is anticipated to be in
the range of $1,641 million to
$1,753 million compared with
$1,299 million in fiscal 2023;
- Earnings per share from continuing operations is expected to be
in the range of $26.61 to
$28.55 per share based upon weighted
average shares outstanding of 57.8 million shares compared with
$22.03 per share in fiscal 2023;
- EBITDA As Defined is anticipated to be in the range of
$3,870 million to $4,010 million compared with $3,395 million in fiscal 2023 (corresponding to
an EBITDA As Defined margin guide of approximately 52.0% for fiscal
2024);
- Adjusted earnings per share is expected to be in the range of
$31.00 to $32.94 per share compared with $25.84 per share in fiscal 2023; and
- Fiscal 2024 outlook is based on the following market growth
assumptions:
- Commercial OEM revenue growth around 20%;
- Commercial aftermarket revenue growth in the mid-teens
percentage range; and
- Defense revenue growth in the mid to high-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,
2024.
Earnings Conference Call
TransDigm Group will host a conference call for investors and
security analysts on November 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/BI1ebb5609ef4f4510b054be7169ac0a70.
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 and specialized flight, wind tunnel
and jet engine testing services and equipment.
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, 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 2024 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 sensitivity
of our business to the number of flight hours that our customers'
planes spend aloft and our customers' profitability, both of which
are affected by general economic conditions; supply chain
constraints; increases in raw material costs, taxes and labor costs
that cannot be recovered in product pricing; failure to complete or
successfully integrate acquisitions; our indebtedness; current and
future geopolitical or other worldwide events, including, without
limitation, wars or conflicts and public health crises;
cybersecurity threats; risks related to the transition or physical
impacts of climate change and other natural disasters or meeting
sustainability-related voluntary goals or regulatory requirements;
our reliance on certain customers; the
United States ("U.S.") defense budget and risks associated
with being a government supplier including government audits and
investigations; failure to maintain government or industry
approvals; risks related to changes in laws and regulations,
including increases in compliance costs; potential environmental
liabilities; liabilities arising in connection with litigation;
risks and costs associated with our 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
most recent Annual Report on Form 10-K 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
|
|
|
CONSOLIDATED
STATEMENTS OF INCOME
|
|
|
FOR THE THIRTEEN
WEEK PERIODS AND FISCAL YEARS ENDED
|
|
Table
1
|
SEPTEMBER 30, 2023
AND SEPTEMBER 30, 2022
|
|
(Amounts in
millions, except per share amounts)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Thirteen Week
Periods Ended
|
|
Fiscal Years
Ended
|
|
|
September 30,
2023
|
|
September 30,
2022
|
|
September 30,
2023
|
|
September 30,
2022
|
NET SALES
|
|
$
1,852
|
|
$
1,510
|
|
$
6,585
|
|
$
5,429
|
COST OF
SALES
|
|
761
|
|
625
|
|
2,743
|
|
2,330
|
GROSS PROFIT
|
|
1,091
|
|
885
|
|
3,842
|
|
3,099
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SELLING AND
ADMINISTRATIVE EXPENSES
|
|
202
|
|
210
|
|
780
|
|
748
|
AMORTIZATION OF
INTANGIBLE ASSETS
|
|
33
|
|
34
|
|
139
|
|
136
|
INCOME FROM
OPERATIONS
|
|
856
|
|
641
|
|
2,923
|
|
2,215
|
INTEREST
EXPENSE—NET
|
|
292
|
|
277
|
|
1,164
|
|
1,076
|
REFINANCING
COSTS
|
|
15
|
|
—
|
|
56
|
|
1
|
OTHER (INCOME)
EXPENSE
|
|
—
|
|
3
|
|
(13)
|
|
18
|
GAIN ON SALE OF
BUSINESSES—NET
|
|
—
|
|
(1)
|
|
—
|
|
(7)
|
INCOME FROM CONTINUING
OPERATIONS
BEFORE INCOME TAXES
|
|
549
|
|
362
|
|
1,716
|
|
1,127
|
INCOME TAX
PROVISION
|
|
135
|
|
96
|
|
417
|
|
261
|
INCOME FROM CONTINUING
OPERATIONS
|
|
414
|
|
266
|
|
1,299
|
|
866
|
INCOME FROM
DISCONTINUED
OPERATIONS, NET OF TAX
|
|
—
|
|
—
|
|
—
|
|
1
|
NET INCOME
|
|
414
|
|
266
|
|
1,299
|
|
867
|
LESS: NET INCOME
ATTRIBUTABLE TO
NONCONTROLLING INTERESTS
|
|
—
|
|
—
|
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(1)
|
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(1)
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NET INCOME ATTRIBUTABLE
TO TD GROUP
|
|
$
414
|
|
$
266
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|
$
1,298
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$
866
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NET INCOME APPLICABLE
TO TD GROUP
COMMON STOCKHOLDERS
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$
414
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$
226
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$
1,260
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$
780
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Earnings per share
attributable to TD Group
common stockholders:
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|
|
|
|
|
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|
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Earnings per share
from continuing
operations—basic and diluted
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|
$
7.23
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$
3.98
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|
$
22.03
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$
13.38
|
Earnings per share
from discontinued
operations—basic and diluted
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|
—
|
|
—
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|
—
|
|
0.02
|
Earnings per
share
|
|
$
7.23
|
|
$
3.98
|
|
$
22.03
|
|
$
13.40
|
Cash dividends declared
per common share
|
|
$
—
|
|
$
18.50
|
|
$
—
|
|
$
18.50
|
Weighted-average shares
outstanding:
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
57.3
|
|
56.8
|
|
57.2
|
|
58.2
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TRANSDIGM GROUP
INCORPORATED
|
|
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SUPPLEMENTAL
INFORMATION - RECONCILIATION OF EBITDA,
|
|
|
EBITDA AS DEFINED TO
INCOME FROM CONTINUING OPERATIONS
|
|
|
FOR THE THIRTEEN
WEEK PERIODS AND FISCAL YEARS ENDED
|
|
Table
2
|
SEPTEMBER 30, 2023
AND SEPTEMBER 30, 2022
|
|
(Amounts in
millions, except per share amounts)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Thirteen Week
Periods Ended
|
|
Fiscal Years
Ended
|
|
|
September 30,
2023
|
|
September 30,
2022
|
|
September 30,
2023
|
|
September 30,
2022
|
Income from continuing
operations
|
|
$
414
|
|
$
266
|
|
$
1,299
|
|
$
866
|
Adjustments:
|
|
|
|
|
|
|
|
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Depreciation and
amortization expense
|
|
69
|
|
65
|
|
268
|
|
253
|
Interest
expense-net
|
|
292
|
|
277
|
|
1,164
|
|
1,076
|
Income tax
provision
|
|
136
|
|
96
|
|
417
|
|
261
|
EBITDA
|
|
911
|
|
704
|
|
3,148
|
|
2,456
|
Adjustments:
|
|
|
|
|
|
|
|
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Acquisition and
divestiture transaction-
related expenses and adjustments (1)
|
|
6
|
|
5
|
|
18
|
|
18
|
Non-cash stock and
deferred
compensation expense (2)
|
|
26
|
|
55
|
|
157
|
|
184
|
Refinancing costs
(3)
|
|
15
|
|
—
|
|
56
|
|
1
|
Gain on sale of
businesses-net (4)
|
|
—
|
|
(1)
|
|
—
|
|
(7)
|
Other, net
(5)
|
|
5
|
|
(11)
|
|
16
|
|
(6)
|
Gross Adjustments to
EBITDA
|
|
52
|
|
48
|
|
247
|
|
190
|
EBITDA As
Defined
|
|
$
963
|
|
$
752
|
|
$
3,395
|
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$
2,646
|
EBITDA As Defined,
Margin (6)
|
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52.0 %
|
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49.8 %
|
|
51.6 %
|
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48.7 %
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_______________________________________________
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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.
|
|
|
|
(4)
|
|
Represents the net gain
on sale of businesses.
|
|
|
|
(5)
|
|
Primarily represents
foreign currency transaction (gains) or losses, payroll withholding
taxes related to dividend equivalent payments and stock option
exercises, deferred compensation payments, non-service related
pension costs including the pension settlement (gain) loss for the
Esterline Retirement Plan, and for fiscal 2022, proceeds received
from a final working capital settlement for the ScioTeq and
TREALITY divestiture.
|
|
|
|
(6)
|
|
The EBITDA As Defined
margin represents the amount of EBITDA As Defined as a percentage
of net sales.
|
TRANSDIGM GROUP
INCORPORATED
|
|
|
|
|
SUPPLEMENTAL
INFORMATION - RECONCILIATION OF
|
|
|
|
|
REPORTED EARNINGS
PER SHARE TO
|
|
|
|
|
ADJUSTED EARNINGS
PER SHARE
|
|
|
|
|
FOR THE THIRTEEN
WEEK PERIODS AND FISCAL YEARS ENDED
|
|
|
|
Table
3
|
SEPTEMBER 30, 2023
AND SEPTEMBER 30, 2022
|
|
|
|
(Amounts in
millions, except per share amounts)
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Thirteen Week
Periods Ended
|
|
Fiscal Years
Ended
|
|
|
September 30,
2023
|
|
September 30,
2022
|
|
September 30,
2023
|
|
September 30,
2022
|
Reported Earnings
Per Share
|
|
|
|
|
|
|
|
|
Income from continuing
operations
|
|
$
414
|
|
$
266
|
|
$
1,299
|
|
$
866
|
Less: Net income
attributable to noncontrolling interests
|
|
—
|
|
—
|
|
(1)
|
|
(1)
|
Net income from
continuing operations attributable to TD Group
|
|
414
|
|
266
|
|
1,298
|
|
865
|
Less: Dividends paid on
participating securities
|
|
—
|
|
(40)
|
|
(38)
|
|
(86)
|
Income from
discontinued operations, net of tax
|
|
—
|
|
—
|
|
—
|
|
1
|
Net income applicable
to TD Group common stockholders—basic and diluted
|
|
$
414
|
|
$
226
|
|
$
1,260
|
|
$
780
|
Weighted-average
shares outstanding under the two-class method
|
|
|
|
|
|
|
|
|
Weighted-average common
shares outstanding
|
|
55.3
|
|
54.3
|
|
54.9
|
|
54.8
|
Vested options deemed
participating securities
|
|
2.0
|
|
2.5
|
|
2.3
|
|
3.4
|
Total shares for basic
and diluted earnings per share
|
|
57.3
|
|
56.8
|
|
57.2
|
|
58.2
|
Earnings per share from
continuing operations—basic and diluted
|
|
$
7.23
|
|
$
3.98
|
|
$
22.03
|
|
$
13.38
|
Earnings per share from
discontinued operations—basic and diluted
|
|
—
|
|
—
|
|
—
|
|
0.02
|
Earnings per
share
|
|
$
7.23
|
|
$
3.98
|
|
$
22.03
|
|
$
13.40
|
Adjusted Earnings
Per Share
|
|
|
|
|
|
|
|
|
Income from continuing
operations
|
|
$
414
|
|
$
266
|
|
$
1,299
|
|
$
866
|
Gross Adjustments to
EBITDA
|
|
52
|
|
48
|
|
247
|
|
190
|
Purchase accounting
backlog amortization
|
|
—
|
|
1
|
|
4
|
|
7
|
Tax adjustment
(1)
|
|
(6)
|
|
(2)
|
|
(73)
|
|
(65)
|
Adjusted net
income
|
|
$
460
|
|
$
313
|
|
$
1,477
|
|
$
998
|
Adjusted diluted
earnings per share under the two-class method
|
|
$
8.03
|
|
$
5.50
|
|
$
25.84
|
|
$
17.14
|
Diluted Earnings Per
Share to Adjusted Earnings Per Share
|
|
|
|
|
|
|
|
|
Diluted earnings per
share from continuing operations
|
|
$
7.23
|
|
$
3.98
|
|
$
22.03
|
|
$
13.38
|
Adjustments to diluted
earnings per share:
|
|
|
|
|
|
|
|
|
Inclusion
of the dividend equivalent payments
|
|
—
|
|
0.70
|
|
0.67
|
|
1.47
|
Acquisition and
divestiture transaction-related expenses and adjustments
|
|
0.08
|
|
0.09
|
|
0.28
|
|
0.33
|
Non-cash
stock and deferred compensation expense
|
|
0.35
|
|
0.73
|
|
2.07
|
|
2.37
|
Refinancing
costs
|
|
0.20
|
|
—
|
|
0.74
|
|
0.01
|
Tax adjustment on
income from continuing operations before taxes
(1)
|
|
0.11
|
|
0.17
|
|
(0.18)
|
|
(0.28)
|
Gain on sale of
businesses-net
|
|
—
|
|
(0.01)
|
|
—
|
|
(0.09)
|
Other,
net
|
|
0.06
|
|
(0.16)
|
|
0.23
|
|
(0.05)
|
Adjusted earnings per
share
|
|
$
8.03
|
|
$
5.50
|
|
$
25.84
|
|
$
17.14
|
_____________________________________________________
|
|
|
|
(1)
|
|
For the thirteen week
periods and fiscal years ended September 30, 2023 and 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 FISCAL YEARS
ENDED
|
|
Table
4
|
SEPTEMBER 30, 2023
AND SEPTEMBER 30, 2022
|
|
(Amounts in
millions)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
Fiscal Years
Ended
|
|
|
September 30,
2023
|
|
September 30,
2022
|
Net cash provided by
operating activities
|
|
$
1,375
|
|
$
948
|
Adjustments:
|
|
|
|
|
Changes in assets and
liabilities, net of effects from acquisitions of
businesses
|
|
415
|
|
288
|
Interest expense-net
(1)
|
|
1,123
|
|
1,076
|
Income tax provision -
current
|
|
414
|
|
283
|
Loss contract
amortization
|
|
34
|
|
39
|
Non-cash stock and
deferred compensation expense (2)
|
|
(157)
|
|
(184)
|
Refinancing costs
(3)
|
|
(56)
|
|
(1)
|
Gain on sale of
businesses-net (4)
|
|
—
|
|
7
|
EBITDA
|
|
3,148
|
|
2,456
|
Adjustments:
|
|
|
|
|
Acquisition and
divestiture transaction-related expenses and adjustments
(5)
|
|
18
|
|
18
|
Non-cash stock and
deferred compensation expense (2)
|
|
157
|
|
184
|
Refinancing costs
(3)
|
|
56
|
|
1
|
Gain on sale of
businesses-net (4)
|
|
—
|
|
(7)
|
Other, net
(6)
|
|
16
|
|
(6)
|
EBITDA As
Defined
|
|
$
3,395
|
|
$
2,646
|
______________________________________________
|
|
|
|
(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 the net gain
on sale of businesses.
|
|
|
|
(5)
|
|
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.
|
|
|
|
(6)
|
|
Primarily represents
foreign currency transaction (gains) or losses, payroll withholding
taxes related to dividend equivalent payments and stock option
exercises, deferred compensation payments, non-service related
pension costs including the pension settlement (gain) loss for the
Esterline Retirement Plan, 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)
|
|
|
|
|
|
|
September 30,
2023
|
|
September 30,
2022
|
Cash and cash
equivalents
|
|
$
3,472
|
|
$
3,001
|
Trade accounts
receivable—Net
|
|
1,230
|
|
967
|
Inventories—Net
|
|
1,616
|
|
1,332
|
Current portion of
long-term debt
|
|
71
|
|
76
|
Short-term
borrowings—trade receivable securitization facility
|
|
349
|
|
350
|
Accounts
payable
|
|
305
|
|
279
|
Accrued and other
current liabilities
|
|
854
|
|
721
|
Long-term
debt
|
|
19,330
|
|
19,369
|
Total TD Group
stockholders' deficit
|
|
(1,984)
|
|
(3,773)
|
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, 2024
|
Table
6
|
(Amounts in
millions, except per share amounts)
|
(Unaudited)
|
|
|
|
|
GUIDANCE
MID-POINT
|
|
|
Fiscal Year Ended
September 30, 2024
|
Net Income
|
|
$
1,697
|
Adjustments:
|
|
|
Depreciation and
amortization expense
|
|
292
|
Interest expense -
net
|
|
1,250
|
Income tax provision -
current
|
|
507
|
EBITDA
|
|
3,746
|
Adjustments:
|
|
|
Acquisition
transaction-related expenses and adjustments
(1)
|
|
20
|
Non-cash stock and
deferred compensation expense (1)
|
|
185
|
Refinancing costs
(1)
|
|
—
|
Other, net
(1)
|
|
(11)
|
Gross Adjustments to
EBITDA
|
|
194
|
EBITDA As
Defined
|
|
$
3,940
|
EBITDA As Defined,
Margin (1)
|
|
52.0 %
|
|
|
|
Earnings per
share
|
|
$
27.58
|
Adjustments to earnings
per share:
|
|
|
Inclusion of the
dividend equivalent payments
|
|
1.77
|
Non-cash stock and
deferred compensation expense
|
|
2.48
|
Acquisition related
expenses and adjustments
|
|
0.29
|
Refinancing
costs
|
|
—
|
Other, net
|
|
(0.15)
|
Adjusted earnings per
share
|
|
$
31.97
|
|
|
|
Weighted-average shares
outstanding
|
|
57.8
|
________________________________________
|
|
|
|
(1)
|
|
Refer to Table 2 above
for definitions of Non-GAAP measurement adjustments.
|
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SOURCE TransDigm Group Inc.