CLEVELAND, May 7, 2024 /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 March 30, 2024.
Second quarter highlights include:
- Net sales of $1,919 million, up
21% from $1,592 million in the prior
year's quarter;
- Net income of $404 million, up
33% from the prior year's quarter;
- Earnings per share of $6.97, up
31% from the prior year's quarter;
- EBITDA As Defined of $1,021
million, up 25% from $817
million in the prior year's quarter;
- EBITDA As Defined margin of 53.2%;
- Adjusted earnings per share of $7.99, up 34% from $5.98 in the prior year's quarter; and
- Upward revision to fiscal 2024 financial guidance to reflect
TransDigm's continued strong performance.
Quarter-to-Date Results
Net sales for the quarter increased 20.5%, or $327 million, to $1,919
million from $1,592 million in
the comparable quarter a year ago. Organic sales growth as a
percentage of net sales was 16.1%.
Net income for the quarter increased $100
million, or 32.9%, to $404
million from $304 million in
the comparable quarter a year ago. The increase in net income
primarily reflects the increase in net sales described above and
the application of our value-driven operating strategy. The
increase was partially offset by higher interest expense, one-time
refinancing costs, income tax expense, and higher non-cash stock
and deferred compensation expense.
Adjusted net income for the quarter increased 35.5% to
$462 million, or $7.99 per share, from $341
million, or $5.98 per share,
in the comparable quarter a year ago.
EBITDA for the quarter increased 21.4% to $919 million from $757
million for the comparable quarter a year ago. EBITDA As
Defined for the quarter increased 25.0% to $1,021 million compared with $817 million in the comparable quarter a year
ago. EBITDA As Defined as a percentage of net sales for the quarter
was 53.2% compared with 51.3% in the comparable quarter a year
ago.
"I am very pleased with the operating results for the second
quarter. We continued to see strong performance as we closed out
the first half of our fiscal year," stated Kevin Stein, TransDigm Group's President and
Chief Executive Officer. "Total revenue for the quarter exceeded
our expectations and we had a robust EBITDA as Defined margin.
Revenues sequentially improved in all three of our major market
channels - commercial OEM, commercial aftermarket and defense. Our
EBITDA As Defined margin improved to 53.2% for the quarter, up
almost 200 basis points from the comparable prior year period. We
remain deeply committed to our operating strategy with dedicated
efforts across our teams to consistently focus on our value drivers
and management of our cost structure. We look forward to the second
half of our fiscal 2024 and the opportunity to continue driving
value for our shareholders."
Financing Activities
During the quarter, on February 27,
2024, TransDigm successfully completed a private offering of
two new senior secured notes for a total of $4,400 million, consisting of $2,200 million of 6.375% Senior Secured Notes due
March 1, 2029 ("2029 Secured Notes")
and $2,200 million of 6.625% Senior
Secured Notes due March 1, 2032
("2032 Secured Notes"). TransDigm used the net proceeds of the
offerings of the 2029 Secured Notes and 2032 Secured Notes, plus
cash on hand, to redeem all of its $4,400
million outstanding 6.250% Senior Secured Notes due
2026.
On March 22, 2024, TransDigm
successfully repriced the existing approximately $4,525 million Tranche I term loans maturing
August 24, 2028, to bear interest at
Term Secured Overnight Financing Rate ("SOFR") plus 2.75% compared
to Term SOFR plus 3.25% applicable prior to the repricing.
Additionally, TransDigm completed a refinancing and repaid in full
the approximately $1,708 million in
Tranche H term loans maturing February 22,
2027 and replaced such loans with approximately $1,708 million in Tranche K term loans maturing
March 22, 2030. The applicable
interest rate for the Tranche K term loans is Term SOFR plus 2.75%
compared to Term SOFR plus 3.25% applicable prior to the
refinancing.
Additionally on March 22, 2024,
TransDigm successfully completed a private offering of $550 million of 6.375% Senior Secured Notes due
March 1, 2029. These notes were an
additional issuance of the previously issued $2,200 million 6.375% Senior Secured Notes
described above. TransDigm used the net proceeds from the offering,
plus cash on hand, to redeem all of its $550
million of outstanding 7.50% Senior Subordinated Notes due
2027 ("2027 Subordinated Notes"). On March
22, 2024, TransDigm announced the cash tender offer for all
of its outstanding 2027 Subordinated Notes.
Subsequent to the quarter, on April 22,
2024, TransDigm completed the redemption of the $550 million of outstanding 2027 Subordinated
Notes.
Year-to-Date Results
Net sales for the twenty-six week period ended March 30, 2024 increased 24.1%, or $719 million, to $3,708
million from $2,989 million in
the comparable period a year ago. Organic sales growth as a
percentage of net sales for the twenty-six week period ended
March 30, 2024 was 19.6%.
Net income for the twenty-six week period ended March 30, 2024 increased $253 million, or 47.5%, to $786 million from $533
million in the comparable period a year ago. The increase in
net income primarily reflects the increase in net sales described
above and the application of our value-driven operating strategy.
The increase was partially offset by higher income tax expense,
interest expense, one-time refinancing costs, and higher non-cash
stock and deferred compensation expense.
GAAP earnings per share were reduced in fiscal 2024 and 2023 by
$1.75 per share and $0.67 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 its stock option plans. These
dividend equivalent payments are made during TransDigm's first
fiscal quarter each year and also upon payment of any special
dividends.
Adjusted net income for the twenty-six week period ended
March 30, 2024 increased 45.3% to
$875 million, or $15.15 per share, from $602 million, or $10.55 per share, in the comparable period a year
ago.
EBITDA for the twenty-six week period ended March 30, 2024 increased 26.3% to $1,777 million from $1,407
million for the comparable period a year ago. EBITDA As
Defined for the period increased 27.5% to $1,933 million compared with $1,516 million in the comparable period a year
ago. EBITDA As Defined as a percentage of net sales for the period
was 52.1% compared with 50.7% in the comparable period a year
ago.
Please see the attached tables for a reconciliation of net
income 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 raising our full year guidance
primarily to reflect our strong second quarter results and current
expectations for the remainder of the fiscal year. We are pleased
to once again raise our net sales and EBITDA As Defined guidance
for fiscal 2024 and to see further progression in our primary end
markets. Additionally, in light of the strong EBITDA As Defined
margin in the first half of our fiscal 2024, we are raising the
mid-point of our full year EBITDA As Defined margin guidance to
52.3%." This guidance excludes any EBITDA As Defined contribution
from the pending acquisition of CPI's Electron Device Business.
TransDigm now expects fiscal 2024 financial guidance to be as
follows:
- Net sales are anticipated to be in the range of $7,680 million to $7,800
million compared with $6,585
million in fiscal 2023, an increase of 17.5% at the midpoint
(an increase of $75 million at the
midpoint from prior guidance);
- Net income is anticipated to be in the range of $1,608 million to $1,686
million compared with $1,299
million in fiscal 2023, an increase of 26.8% at the midpoint
(an increase of $36 million at the
midpoint from prior guidance);
- Earnings per share is expected to be in the range of
$26.06 to $27.40 per share based upon weighted average
shares outstanding of 57.85 million shares, compared with
$22.03 per share in fiscal 2023,
which is an increase of 21.3% at the midpoint (an increase of
$0.60 per share at the midpoint from
prior guidance);
- EBITDA As Defined is anticipated to be in the range of
$3,995 million to $4,095 million compared with $3,395 million in fiscal 2023, an increase of
19.1% at the midpoint (an increase of $60
million at the midpoint from prior guidance and
corresponding to an EBITDA As Defined margin guide of approximately
52.3% for fiscal 2024);
- Adjusted earnings per share is expected to be in the range of
$31.75 to $33.09 per share compared with $25.84 per share in fiscal 2023, an increase of
25.5% at the midpoint (an increase of $1.57 per share at the midpoint from prior
guidance); 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-teens 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 midpoint estimated for the
fiscal year ending September 30,
2024. Additionally, please see attached Table 7 for
comparison of the current fiscal year 2024 guidance versus the
previously issued fiscal year 2024 guidance.
Earnings Conference Call
TransDigm Group will host a conference call for investors and
security analysts on May 7, 2024, beginning at 11:00 a.m., Eastern Time. To join the call
telephonically, please register for the call at
https://register.vevent.com/register/BI4ffaf7d7e6c249b4b239e7831a8890b2.
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
|
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
|
|
FOR THE THIRTEEN AND
TWENTY-SIX WEEK PERIODS ENDED
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|
Table
1
|
MARCH 30, 2024 AND
APRIL 1, 2023
|
|
(Amounts in
millions, except per share amounts)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Thirteen Week
Periods Ended
|
|
Twenty-Six Week
Periods Ended
|
|
|
March 30,
2024
|
|
April 1,
2023
|
|
March 30,
2024
|
|
April 1,
2023
|
NET SALES
|
|
$
1,919
|
|
$
1,592
|
|
$
3,708
|
|
$
2,989
|
COST OF
SALES
|
|
767
|
|
663
|
|
1,515
|
|
1,268
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GROSS PROFIT
|
|
1,152
|
|
929
|
|
2,193
|
|
1,721
|
SELLING AND
ADMINISTRATIVE EXPENSES
|
|
248
|
|
199
|
|
467
|
|
369
|
AMORTIZATION OF
INTANGIBLE ASSETS
|
|
37
|
|
35
|
|
72
|
|
68
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INCOME FROM
OPERATIONS
|
|
867
|
|
695
|
|
1,654
|
|
1,284
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INTEREST
EXPENSE—NET
|
|
326
|
|
295
|
|
626
|
|
581
|
REFINANCING
COSTS
|
|
28
|
|
5
|
|
28
|
|
9
|
OTHER INCOME
|
|
(6)
|
|
(2)
|
|
(8)
|
|
(3)
|
INCOME FROM OPERATIONS
BEFORE INCOME TAXES
|
|
519
|
|
397
|
|
1,008
|
|
697
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INCOME TAX
PROVISION
|
|
115
|
|
93
|
|
222
|
|
164
|
NET INCOME
|
|
404
|
|
304
|
|
786
|
|
533
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LESS: NET INCOME
ATTRIBUTABLE TO NONCONTROLLING INTERESTS
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(1)
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—
|
|
(1)
|
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(1)
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NET INCOME ATTRIBUTABLE
TO TD GROUP
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$
403
|
|
$
304
|
|
$
785
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|
$
532
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NET INCOME APPLICABLE
TO TD GROUP COMMON STOCKHOLDERS
|
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$
403
|
|
$
304
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$
684
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$
494
|
|
|
|
|
|
|
|
|
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Earnings per share
attributable to TD Group common stockholders:
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Basic and
diluted
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$
6.97
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$
5.32
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$
11.83
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$
8.65
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Cash dividends declared
per common share
|
|
$
—
|
|
$
—
|
|
$
35.00
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|
$
—
|
|
|
|
|
|
|
|
|
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Weighted-average shares
outstanding:
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|
|
|
|
|
|
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Basic and
diluted
|
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57.8
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|
57.1
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57.8
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57.1
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TRANSDIGM GROUP
INCORPORATED
|
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SUPPLEMENTAL
INFORMATION - RECONCILIATION OF
|
|
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EBITDA, EBITDA AS
DEFINED TO NET INCOME
|
|
|
FOR THE THIRTEEN AND
TWENTY-SIX WEEK PERIODS ENDED
|
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Table
2
|
MARCH 30, 2024 AND
APRIL 1, 2023
|
|
(Amounts in
millions, except per share amounts)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Thirteen Week
Periods Ended
|
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Twenty-Six Week
Periods Ended
|
|
|
March 30,
2024
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April 1,
2023
|
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March 30,
2024
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April 1,
2023
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Net Income
|
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$
404
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$
304
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$
786
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$
533
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Adjustments:
|
|
|
|
|
|
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Depreciation and
amortization expense
|
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74
|
|
65
|
|
143
|
|
129
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Interest
expense-net
|
|
326
|
|
295
|
|
626
|
|
581
|
Income tax
provision
|
|
115
|
|
93
|
|
222
|
|
164
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EBITDA
|
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919
|
|
757
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|
1,777
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|
1,407
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Adjustments:
|
|
|
|
|
|
|
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Acquisition and
divestiture transaction-related expenses and adjustments
(1)
|
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14
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|
3
|
|
16
|
|
6
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Non-cash stock and
deferred compensation expense (2)
|
|
60
|
|
42
|
|
111
|
|
77
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Refinancing costs
(3)
|
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28
|
|
5
|
|
28
|
|
9
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Other, net
(4)
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|
—
|
|
10
|
|
1
|
|
17
|
Gross Adjustments to
EBITDA
|
|
102
|
|
60
|
|
156
|
|
109
|
EBITDA As
Defined
|
|
$ 1,021
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|
$
817
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$ 1,933
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$
1,516
|
EBITDA As Defined,
Margin (5)
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53.2 %
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51.3 %
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52.1 %
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50.7 %
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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.
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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 and deferred
compensation payments.
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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 REPORTED
|
|
|
EARNINGS PER SHARE
TO ADJUSTED EARNINGS PER SHARE
|
|
|
FOR THE THIRTEEN AND
TWENTY-SIX WEEK PERIODS ENDED
|
|
Table
3
|
MARCH 30, 2024 AND
APRIL 1, 2023
|
|
(Amounts in
millions, except per share amounts)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
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|
Thirteen Week
Periods Ended
|
|
Twenty-Six Week
Periods Ended
|
|
|
March 30,
2024
|
|
April 1,
2023
|
|
March 30,
2024
|
|
April 1,
2023
|
Reported Earnings
Per Share
|
|
|
|
|
|
|
|
|
Net income
|
|
$
404
|
|
$
304
|
|
$
786
|
|
$
533
|
Less: Net income
attributable to noncontrolling interests
|
|
(1)
|
|
—
|
|
(1)
|
|
(1)
|
Net income attributable
to TD Group
|
|
403
|
|
304
|
|
785
|
|
532
|
Less: Dividends paid on
participating securities
|
|
—
|
|
—
|
|
(101)
|
|
(38)
|
Net income applicable
to TD Group common stockholders—basic and diluted
|
|
$
403
|
|
$
304
|
|
$
684
|
|
$
494
|
Weighted-average
shares outstanding under the two-class method
|
|
|
|
|
|
|
|
|
Weighted-average common
shares outstanding
|
|
55.7
|
|
54.7
|
|
55.6
|
|
54.6
|
Vested options deemed
participating securities
|
|
2.1
|
|
2.4
|
|
2.2
|
|
2.5
|
Total shares for basic
and diluted earnings per share
|
|
57.8
|
|
57.1
|
|
57.8
|
|
57.1
|
Earnings per
share—basic and diluted
|
|
$
6.97
|
|
$
5.32
|
|
$
11.83
|
|
$
8.65
|
Adjusted Earnings
Per Share
|
|
|
|
|
|
|
|
|
Net income
|
|
$
404
|
|
$
304
|
|
$
786
|
|
$
533
|
Gross Adjustments to
EBITDA
|
|
102
|
|
60
|
|
156
|
|
109
|
Purchase accounting
backlog amortization
|
|
3
|
|
1
|
|
3
|
|
2
|
Tax adjustment
(1)
|
|
(47)
|
|
(24)
|
|
(70)
|
|
(42)
|
Adjusted net
income
|
|
$
462
|
|
$
341
|
|
$
875
|
|
$
602
|
Adjusted diluted
earnings per share under the two-class method
|
|
$
7.99
|
|
$
5.98
|
|
$
15.15
|
|
$
10.55
|
Diluted Earnings Per
Share to Adjusted Earnings Per Share
|
|
|
|
|
|
|
|
|
Diluted earnings per
share from net income attributable to TD Group
|
|
$
6.97
|
|
$
5.32
|
|
$
11.83
|
|
$
8.65
|
Adjustments to diluted
earnings per share:
|
|
|
|
|
|
|
|
|
Inclusion of
the dividend equivalent payments
|
|
—
|
|
—
|
|
1.75
|
|
0.67
|
Acquisition and
divestiture transaction-related expenses and adjustments
|
|
0.21
|
|
0.05
|
|
0.25
|
|
0.10
|
Non-cash
stock and deferred compensation expense
|
|
0.77
|
|
0.55
|
|
1.44
|
|
1.01
|
Refinancing
costs
|
|
0.37
|
|
0.07
|
|
0.37
|
|
0.12
|
Tax adjustment on
income from operations before taxes (1)
|
|
(0.33)
|
|
(0.15)
|
|
(0.52)
|
|
(0.23)
|
Other,
net
|
|
—
|
|
0.14
|
|
0.03
|
|
0.23
|
Adjusted earnings per
share
|
|
$
7.99
|
|
$
5.98
|
|
$
15.15
|
|
$
10.55
|
______________
|
|
|
|
(1)
|
|
For the thirteen and
twenty-six week periods ended March 30, 2024 and April 1,
2023, 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
|
MARCH 30, 2024 AND
APRIL 1, 2023
|
|
(Amounts in
millions)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
Twenty-Six Week
Periods Ended
|
|
|
March 30,
2024
|
|
April 1,
2023
|
Net cash provided by
operating activities
|
|
$
865
|
|
$
507
|
Adjustments:
|
|
|
|
|
Changes in assets and
liabilities, net of effects from acquisitions and sales of
businesses
|
|
207
|
|
242
|
Interest expense-net
(1)
|
|
604
|
|
561
|
Income tax
provision-current
|
|
223
|
|
164
|
Loss contract
amortization
|
|
17
|
|
19
|
Non-cash stock and
deferred compensation expense (2)
|
|
(111)
|
|
(77)
|
Refinancing costs
(3)
|
|
(28)
|
|
(9)
|
EBITDA
|
|
1,777
|
|
1,407
|
Adjustments:
|
|
|
|
|
Acquisition and
divestiture transaction-related expenses and adjustments
(4)
|
|
16
|
|
6
|
Non-cash stock and
deferred compensation expense (2)
|
|
111
|
|
77
|
Refinancing costs
(3)
|
|
28
|
|
9
|
Other, net
(5)
|
|
1
|
|
17
|
EBITDA As
Defined
|
|
$
1,933
|
|
$
1,516
|
______________
|
|
|
|
(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 and deferred
compensation payments.
|
TRANSDIGM GROUP
INCORPORATED
|
|
|
SUPPLEMENTAL
INFORMATION - BALANCE SHEET DATA
|
|
Table
5
|
(Amounts in
millions)
|
|
(Unaudited)
|
|
|
|
|
|
|
March 30,
2024
|
|
September 30,
2023
|
Cash and cash
equivalents
|
|
$
4,288
|
|
$
3,472
|
Restricted cash
(1)
|
|
550
|
|
—
|
Trade accounts
receivable—Net
|
|
1,201
|
|
1,230
|
Inventories—Net
|
|
1,753
|
|
1,616
|
Current portion of
long-term debt (1)
|
|
625
|
|
71
|
Short-term
borrowings—trade receivable securitization facility
|
|
450
|
|
349
|
Accounts
payable
|
|
302
|
|
305
|
Accrued and other
current liabilities
|
|
858
|
|
854
|
Long-term
debt
|
|
21,331
|
|
19,330
|
Total TD Group
stockholders' deficit
|
|
(3,029)
|
|
(1,984)
|
______________
|
|
|
|
(1)
|
|
Represents the cash
committed from the issuance of the $550 million in 6.375% Senior
Secured Notes due March 1, 2029, to redeem the outstanding $550
million in 7.50% Senior Subordinated Notes due 2027. The
notification of the redemption of the $550 million 7.50% Senior
Subordinated Notes due 2027 occurred on March 22, 2024, and the
redemption occurred on April 22, 2024.
|
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 MIDPOINT
|
FOR THE FISCAL YEAR
ENDING SEPTEMBER 30, 2024
|
Table
6
|
(Amounts in
millions, except per share amounts)
|
(Unaudited)
|
|
|
|
|
GUIDANCE
MIDPOINT
|
|
|
Fiscal Year Ended
September 30, 2024
|
Net Income
|
|
$
1,647
|
Adjustments:
|
|
|
Depreciation and
amortization expense
|
|
294
|
Interest
expense-net
|
|
1,320
|
Income tax
provision
|
|
491
|
EBITDA
|
|
3,752
|
Adjustments:
|
|
|
Acquisition
transaction-related expenses and adjustments
(1)
|
|
41
|
Non-cash stock and
deferred compensation expense (1)
|
|
215
|
Refinancing costs
(1)
|
|
29
|
Other, net
(1)
|
|
8
|
Gross Adjustments to
EBITDA
|
|
293
|
EBITDA As
Defined
|
|
$
4,045
|
EBITDA As Defined,
Margin (1)
|
|
52.3 %
|
|
|
|
Earnings per
share
|
|
$
26.73
|
Adjustments to earnings
per share:
|
|
|
Inclusion of the
dividend equivalent payments
|
|
1.75
|
Non-cash stock and
deferred compensation expense
|
|
2.87
|
Acquisition
transaction-related expenses and adjustments
|
|
0.60
|
Refinancing
costs
|
|
0.38
|
Other, net
|
|
0.09
|
Adjusted earnings per
share
|
|
$
32.42
|
|
|
|
Weighted-average shares
outstanding
|
|
57.85
|
_____________
|
(1)
|
|
Refer to Table 2 above
for definitions of Non-GAAP measurement adjustments.
|
TRANSDIGM GROUP
INCORPORATED
|
|
|
SUPPLEMENTAL
INFORMATION
|
CURRENT FISCAL YEAR
2024 GUIDANCE VERSUS
|
PRIOR FISCAL YEAR
2024 GUIDANCE
|
|
Table
7
|
(Amounts in
millions, except per share amounts)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
Current
Fiscal Year 2024 Guidance
Issued May 7, 2024
|
|
Prior
Fiscal Year 2024 Guidance
Issued February 8, 2024
|
|
Change at
Midpoint
|
|
|
|
|
|
|
|
Net Sales
|
|
$7,680 to
$7,800
|
|
$7,575 to
$7,755
|
|
$75
|
|
|
|
|
|
|
|
GAAP Net
Income
|
|
$1,608 to
$1,686
|
|
$1,560 to
$1,662
|
|
$36
|
|
|
|
|
|
|
|
GAAP Earnings Per
Share
|
|
$26.06 to
$27.40
|
|
$25.25 to
$27.01
|
|
$0.60
|
|
|
|
|
|
|
|
EBITDA As
Defined
|
|
$3,995 to
$4,095
|
|
$3,920 to
$4,050
|
|
$60
|
|
|
|
|
|
|
|
Adjusted Earnings Per
Share
|
|
$31.75 to
$33.09
|
|
$29.97 to
$31.73
|
|
$1.57
|
|
|
|
|
|
|
|
Weighted-Average Shares
Outstanding
|
|
57.85
|
|
57.8
|
0.05
|
|
|
|
|
|
|
|
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