CLEVELAND, Aug. 8, 2017
/PRNewswire/ -- TransDigm Group Incorporated (NYSE: TDG), a
leading global designer, producer and supplier of highly engineered
aircraft components, today reported results for the third quarter
ended July 1, 2017.
Highlights for the third quarter include:
- Net sales of $907.7 million,
up 13.8% from $797.7
million;
- Net income of $169.1 million,
up 5.2% from $160.6 million;
- Earnings per share of $3.08,
up 6.9% from $2.88;
- EBITDA As Defined of $442.9
million, up 15.4% from $383.9
million;
- Adjusted earnings per share of $3.30, up 6.8% from $3.09; and
- Reaffirms previously stated fiscal 2017 financial
guidance.
Net sales for the quarter rose 13.8%, or $110.0 million, to $907.7
million from $797.7 million in
the comparable quarter a year ago. The favorable contribution from
the businesses acquired in the last twelve month period was
$87.1 million. Organic net sales
growth was up approximately 3%.
Net income for the quarter increased 5.2% to $169.1 million, or $3.08 per share, compared to $160.6 million, or $2.88 per share, in the comparable quarter a year
ago. The increase in net income primarily reflects the increase in
net sales described above, lower refinancing expenses and
improvements to our operating margin resulting from the strength of
our proprietary products and continued productivity efforts. This
growth in net income was partially offset by higher interest
expense and a higher effective tax rate.
Adjusted net income for the quarter rose 5.1% to $181.1 million, or $3.30 per share, from $172.3 million, or $3.09 per share, in the comparable quarter a year
ago.
EBITDA for the quarter increased 23.1% to $424.2 million from $344.6
million for the comparable quarter a year ago. EBITDA
As Defined for the period increased 15.4% to $442.9 million compared with $383.9 million in the comparable quarter a year
ago. EBITDA As Defined as a percentage of net sales for the
quarter was 48.8%.
"We are pleased with our operating results for both the fiscal
third quarter and year-to-date periods," stated W. Nicholas Howley, TransDigm Group's Chairman
and Chief Executive Officer. "Our overall performance was in-line
with our expectations with some modest puts and takes across our
markets. Fiscal third quarter commercial transport aftermarket
revenues were up in the mid to high-single digit percentage range
despite ongoing weakness in our interior businesses. This was
partially offset by continuing weakness in our business jet and
helicopter aftermarket revenues. Our defense revenues continue to
grow more than originally anticipated. We stayed focused on our
value drivers and continued to expand our EBITDA margins. All in
all, a good quarter for intrinsic shareholder value creation."
During the thirteen week period ended July 1, 2017, TransDigm repurchased 205,800
shares of its common stock with a weighted average per share price
of $243 at an aggregate cost of
approximately $50 million.
As previously reported on June 1,
2017, during the thirteen week period ended July 1, 2017, TransDigm acquired three add-on
aerospace product lines for a purchase price of approximately
$105 million. All three product lines
consist primarily of proprietary, sole source products with
significant aftermarket. The products include highly engineered
aerospace controls, quick disconnect couplings, and communication
electronics.
Year-to-Date Results
Net sales for the thirty-nine week period ended July 1, 2017 rose 13.0% to $2,594.9 million from $2,296.2 million in the comparable period last
year. Organic net sales growth was approximately 2.5%.
Net income for the thirty-nine week period ended July 1, 2017 increased 2.7% to $443.4 million, or $6.23 per share, compared with $431.7 million, or $7.63 per share, in the comparable period last
year. Earnings per share were reduced in both 2017 and
2016 by $1.72 per share and
$0.05 per share, respectively,
representing dividend equivalent payments made during each fiscal
year. The increase in net income primarily reflects growth in net
sales described above and improvements to our operating margin
resulting from the strength of our proprietary products and
continued productivity efforts. This growth in net income was
partially offset by higher interest expense due to an increase in
the level of outstanding borrowings to $11.3
billion from $8.5 billion
outstanding in the comparable period last year, higher refinancing
costs, higher acquisition-related costs and higher effective tax
rate.
Adjusted net income for the thirty-nine week period ended
July 1, 2017 rose 7.8% to
$497.1 million, or $8.91 per share, from $461.1 million, or $8.20 per share, in the comparable period a year
ago.
EBITDA for the thirty-nine week period ended July 1, 2017 increased 15.9% to $1,144.9 million from $988.2 million for the comparable period a year
ago. EBITDA As Defined for the period increased 16.5% to
$1,249.0 million compared with
$1,071.9 million in the comparable
period a year ago. EBITDA As Defined as a percentage of net
sales for the period was 48.1%.
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.
During the thirty-nine week period ended July 1, 2017, TransDigm repurchased 1,723,624
shares of its common stock with a weighted average per share price
of $226 at an aggregate cost of
approximately $390 million.
Fiscal 2017 Outlook
Assuming no additional acquisitions and based on current market
conditions, the fiscal 2017 financial guidance remains as
follows:
- Net sales are anticipated to be in the range of $3,530 million to $3,570 million compared with
$3,171 million in fiscal 2016;
- Net income is anticipated to be in the range of $605 million to $619 million compared with
$586 million in fiscal 2016;
- Earnings per share are expected to be in the range of
$9.16 to $9.40 per share based upon
weighted average shares outstanding of 55.6 compared with
$10.39 per share in fiscal 2016;
- EBITDA As Defined is anticipated to be in the range of
$1,693 million to $1,713 million
compared with $1,495 million in
fiscal 2016; and
- Adjusted earnings per share are expected to be in the range of
$12.09 to $12.33 per share compared
with $11.49 per share in fiscal
2016.
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,
2017. Additionally, please see the attached table 7 for
comparison of the current fiscal year 2017 guidance versus the
previously issued fiscal year 2017 guidance.
Potential Financing
TransDigm Group today announced its intention to issue a new
$1.8 billion first lien term
loan. TransDigm intends to use the proceeds, together with
cash on hand, to repay $1.2 billion
of its existing tranche C term loans and to fund a potential
special dividend in the range of $1.0
billion to $1.25 billion.
In connection with the senior credit facility refinancing,
TransDigm will make a presentation to its lenders on Tuesday, August 8, 2017 beginning at 1:00 p.m., Eastern Time. Additional information
will be available via Credit Suisse Securities (USA) LLC.
Earnings Conference Call
TransDigm Group will host a conference call for investors and
security analysts on August 8, 2017, beginning at 11:00 a.m., Eastern Time. To join the call, dial
(888) 558-9538 and enter the pass code 61153185.
International callers should dial (760) 666-3183 and use the same
pass code. A live audio webcast can 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. A telephone replay will be available for two weeks by
dialing (855) 859-2056 and entering the pass code 61153185.
International callers should dial (404) 537-3406 and use the same
pass code.
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, NiCad batteries and chargers, engineered
latching and locking devices, rods and locking devices, engineered
connectors and elastomers, databus and power controls, cockpit
security components and systems, specialized cockpit displays,
aircraft audio systems, specialized lavatory components, seatbelts
and safety restraints, engineered interior surfaces and related
components, lighting and control technology, military personnel
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, refinancing costs, acquisition-related costs,
transaction-related costs and non-cash charges incurred in
connection with certain employee benefit plans. TransDigm Group
defines adjusted net income as net income plus purchase accounting
backlog amortization expense, effects from the sale on businesses,
refinancing costs, acquisition-related costs, transaction-related
costs and non-cash charges incurred in connection with certain
employee benefit plans. 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 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 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 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 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 2017 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
which could affect TransDigm Group's actual results and could cause
its 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; future geopolitical or worldwide events; cyber-security
threats and natural disasters; our reliance on certain customers;
the U.S. defense budget and risks associated with being a
government supplier; failure to maintain government or industry
approvals; failure to complete or successfully integrate
acquisitions; our substantial indebtedness; potential environmental
liabilities; increases in raw material costs, taxes and labor costs
that cannot be recovered in product pricing; risks and costs
associated with our international sales and operations; and other
risk 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 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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|
Liza Sabol
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|
Investor
Relations
|
|
|
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 THIRTY-NINE WEEK PERIODS ENDED
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Table
1
|
JULY 1, 2017 AND
JULY 2, 2016
|
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(Amounts in
thousands, except per share amounts)
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Thirteen Week
Periods Ended
|
|
Thirty-Nine Week
Periods Ended
|
|
|
July 1,
2017
|
|
July 2,
2016
|
|
July 1,
2017
|
|
July 2,
2016
|
NET SALES
|
|
$
|
907,667
|
|
|
$
|
797,692
|
|
|
$
|
2,594,917
|
|
|
$
|
2,296,188
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|
COST OF
SALES
|
|
385,896
|
|
|
354,177
|
|
|
1,137,803
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|
|
1,052,444
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|
GROSS
PROFIT
|
|
521,771
|
|
|
443,515
|
|
|
1,457,114
|
|
|
1,243,744
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|
SELLING AND
ADMINISTRATIVE EXPENSES
|
|
110,561
|
|
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94,244
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|
|
314,868
|
|
|
271,511
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AMORTIZATION OF
INTANGIBLE ASSETS
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23,570
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|
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18,629
|
|
|
71,235
|
|
|
53,474
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|
INCOME FROM
OPERATIONS
|
|
387,640
|
|
|
330,642
|
|
|
1,071,011
|
|
|
918,759
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|
INTEREST EXPENSE -
NET
|
|
152,227
|
|
|
120,812
|
|
|
446,073
|
|
|
344,083
|
|
REFINANCING
COSTS
|
|
345
|
|
|
15,654
|
|
|
35,936
|
|
|
15,654
|
|
INCOME BEFORE INCOME
TAXES
|
|
235,068
|
|
|
194,176
|
|
|
589,002
|
|
|
559,022
|
|
INCOME TAX
PROVISION
|
|
66,015
|
|
|
33,554
|
|
|
145,573
|
|
|
127,276
|
|
NET INCOME
|
|
$
|
169,053
|
|
|
$
|
160,622
|
|
|
$
|
443,429
|
|
|
$
|
431,746
|
|
NET INCOME APPLICABLE
TO COMMON STOCK
|
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$
|
169,053
|
|
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$
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160,622
|
|
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$
|
347,458
|
|
|
$
|
428,746
|
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Net earnings per
share:
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
$
|
3.08
|
|
|
$
|
2.88
|
|
|
$
|
6.23
|
|
|
$
|
7.63
|
|
Cash dividends
paid per common share
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
24.00
|
|
|
$
|
—
|
|
Weighted-average
shares outstanding:
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
54,890
|
|
|
55,832
|
|
|
55,773
|
|
|
56,263
|
|
TRANSDIGM GROUP
INCORPORATED
|
|
|
|
|
|
|
SUPPLEMENTAL
INFORMATION - RECONCILIATION OF EBITDA,
|
|
|
EBITDA AS DEFINED
TO NET INCOME
|
|
|
|
|
FOR THE THIRTEEN
AND THIRTY-NINE WEEK PERIODS ENDED
|
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Table
2
|
JULY 1, 2017 AND
JULY 2, 2016
|
|
(Amounts in
thousands, except per share amounts)
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Thirteen Week
Periods Ended
|
|
Thirty-Nine Week
Periods Ended
|
|
|
July 1,
2017
|
|
July 2,
2016
|
|
July 1,
2017
|
|
July 2,
2016
|
Net income
|
|
$
|
169,053
|
|
|
$
|
160,622
|
|
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$
|
443,429
|
|
|
$
|
431,746
|
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Adjustments:
|
|
|
|
|
|
|
|
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Depreciation and
amortization expense
|
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36,924
|
|
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29,564
|
|
|
109,851
|
|
|
85,101
|
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Interest expense,
net
|
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152,227
|
|
|
120,812
|
|
|
446,073
|
|
|
344,083
|
|
Income tax
provision
|
|
66,015
|
|
|
33,554
|
|
|
145,573
|
|
|
127,276
|
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EBITDA
|
|
424,219
|
|
|
344,552
|
|
|
1,144,926
|
|
|
988,206
|
|
Adjustments:
|
|
|
|
|
|
|
|
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Acquisition-related
expenses and adjustments (1)
|
|
6,192
|
|
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9,849
|
|
|
32,864
|
|
|
34,696
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|
Non-cash stock
compensation expense (2)
|
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11,580
|
|
|
11,371
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|
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32,707
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|
|
33,819
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Refinancing costs
(3)
|
|
345
|
|
|
15,654
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35,936
|
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15,654
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Other, net
(4)
|
|
547
|
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|
2,451
|
|
|
2,615
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|
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(480)
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Gross Adjustments to
EBITDA
|
|
18,664
|
|
|
39,325
|
|
|
104,122
|
|
|
83,689
|
|
EBITDA As
Defined
|
|
$
|
442,883
|
|
|
$
|
383,877
|
|
|
$
|
1,249,048
|
|
|
$
|
1,071,895
|
|
EBITDA As Defined,
Margin (5)
|
|
48.8
|
%
|
|
48.1
|
%
|
|
48.1
|
%
|
|
46.7
|
%
|
(1)
Represents 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 TD Group's
operations, facility relocation costs and other acquisition-related
costs; transaction-related costs 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)
Represents the compensation expense recognized by TD Group under
our stock incentive plans.
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(3) For
the thirteen week period ended July 1, 2017, represents debt
issuance costs expensed in conjunction with the additional 2025
Notes. For the thirty-nine week period ended July 1, 2017,
represents debt issuance costs expensed in conjunction with the
incremental term loan (tranche F), refinancing of the 2021 Notes
and the additional 2025 Notes.
|
|
(4)
Primarily represents foreign currency transaction gain or loss on
intercompany loans to be settled and gain or loss on sale of fixed
assets and payroll withholding taxes related to dividend equivalent
payments.
|
|
(5) The
EBITDA As Defined margin represents the amount of EBITDA As Defined
as a percentage of sales.
|
TRANSDIGM GROUP
INCORPORATED
|
|
|
|
|
|
|
SUPPLEMENTAL
INFORMATION - RECONCILIATION OF
|
|
|
|
|
REPORTED EARNINGS
PER SHARE TO
|
|
|
|
|
ADJUSTED EARNINGS
PER SHARE
|
|
|
|
|
FOR THE THIRTEEN
AND THIRTY-NINE WEEK PERIODS ENDED
|
|
Table
3
|
JULY 1, 2017 AND
JULY 2, 2016
|
|
(Amounts in
thousands, except per share amounts)
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Thirteen Week
Periods Ended
|
|
Thirty-Nine Week
Periods Ended
|
|
|
July 1,
2017
|
|
July 2,
2016
|
|
July 1,
2017
|
|
July 2,
2016
|
Reported Earnings
Per Share
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
169,053
|
|
|
$
|
160,622
|
|
|
$
|
443,429
|
|
|
$
|
431,746
|
|
Less: dividends on
participating securities
|
|
—
|
|
|
—
|
|
|
(95,971)
|
|
|
(3,000)
|
|
Net income applicable
to common stock - basic and
diluted
|
|
$
|
169,053
|
|
|
$
|
160,622
|
|
|
$
|
347,458
|
|
|
$
|
428,746
|
|
Weighted-average
shares outstanding under the
two-class method
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding
|
|
51,932
|
|
|
53,076
|
|
|
52,718
|
|
|
53,339
|
|
Vested options deemed
participating securities
|
|
2,958
|
|
|
2,756
|
|
|
3,055
|
|
|
2,924
|
|
Total shares for
basic and diluted earnings per share
|
|
54,890
|
|
|
55,832
|
|
|
55,773
|
|
|
56,263
|
|
Basic and diluted
earnings per share
|
|
$
|
3.08
|
|
|
$
|
2.88
|
|
|
$
|
6.23
|
|
|
$
|
7.63
|
|
Adjusted Earnings
Per Share
|
|
|
|
|
Net income
|
|
$
|
169,053
|
|
|
$
|
160,622
|
|
|
$
|
443,429
|
|
|
$
|
431,746
|
|
Gross adjustments to
EBITDA
|
|
18,664
|
|
|
39,325
|
|
|
104,122
|
|
|
83,689
|
|
Purchase accounting
backlog amortization
|
|
6,805
|
|
|
4,387
|
|
|
21,345
|
|
|
11,385
|
|
Tax
adjustment
|
|
(13,397)
|
|
|
(32,079)
|
|
|
(71,768)
|
|
|
(65,682)
|
|
Adjusted net
income
|
|
$
|
181,125
|
|
|
$
|
172,255
|
|
|
$
|
497,128
|
|
|
$
|
461,138
|
|
Adjusted diluted
earnings per share under the two-
class method
|
|
$
|
3.30
|
|
|
$
|
3.09
|
|
|
$
|
8.91
|
|
|
$
|
8.20
|
|
Diluted Earnings
Per Share to Adjusted Earnings
Per Share
|
|
|
|
|
Diluted earnings per
share
|
|
$
|
3.08
|
|
|
$
|
2.88
|
|
|
$
|
6.23
|
|
|
$
|
7.63
|
|
Adjustments to
diluted earnings per share:
|
|
|
|
|
|
|
|
|
Inclusion of the dividend equivalent payments
|
|
—
|
|
|
—
|
|
|
1.72
|
|
|
0.05
|
|
Non-cash
stock compensation expense
|
|
0.15
|
|
|
0.15
|
|
|
0.41
|
|
|
0.42
|
|
Acquisition-related expenses
|
|
0.16
|
|
|
0.18
|
|
|
0.67
|
|
|
0.58
|
|
Refinancing costs
|
|
—
|
|
|
0.20
|
|
|
0.45
|
|
|
0.20
|
|
Reduction in income
tax provision net income per
common share related to the adoption of ASU
2016-09
|
|
(0.10)
|
|
|
(0.35)
|
|
|
(0.60)
|
|
|
(0.67)
|
|
Other,
net
|
|
0.01
|
|
|
0.03
|
|
|
0.03
|
|
|
(0.01)
|
|
Adjusted earnings per
share
|
|
$
|
3.30
|
|
|
$
|
3.09
|
|
|
$
|
8.91
|
|
|
$
|
8.20
|
|
TRANSDIGM GROUP
INCORPORATED
|
|
|
|
|
SUPPLEMENTAL
INFORMATION - RECONCILIATION OF NET CASH
|
|
Table
4
|
PROVIDED BY
OPERATING ACTIVITIES TO EBITDA,
|
|
EBITDA AS
DEFINED
|
|
FOR THE
THIRTY-NINE WEEK PERIODS ENDED
|
|
JULY 1, 2017 AND
JULY 2, 2016
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
Thirty-Nine Week
Periods Ended
|
|
|
July 1,
2017
|
|
July 2,
2016
|
Net cash provided by
operating activities
|
|
$
|
555,216
|
|
|
$
|
482,176
|
|
Adjustments:
|
|
|
|
|
Changes in assets and
liabilities, net of effects from acquisitions of
businesses
|
|
82,507
|
|
|
100,344
|
|
Interest expense -
net (1)
|
|
430,543
|
|
|
332,372
|
|
Income tax provision
- current
|
|
145,303
|
|
|
122,787
|
|
Non-cash stock
compensation expense (2)
|
|
(32,707)
|
|
|
(33,819)
|
|
Refinancing costs
(4)
|
|
(35,936)
|
|
|
(15,654)
|
|
EBITDA
|
|
1,144,926
|
|
|
988,206
|
|
Adjustments:
|
|
|
|
|
Acquisition-related
expenses (3)
|
|
32,864
|
|
|
34,696
|
|
Non-cash stock
compensation expense (2)
|
|
32,707
|
|
|
33,819
|
|
Refinancing costs
(4)
|
|
35,936
|
|
|
15,654
|
|
Other, net
(5)
|
|
2,615
|
|
|
(480)
|
|
EBITDA As
Defined
|
|
$
|
1,249,048
|
|
|
$
|
1,071,895
|
|
(1)
Represents interest expense excluding the amortization of debt
issue costs and premium and discount on debt.
|
|
(2)
Represents the compensation expense recognized by TD Group under
our stock incentive plans.
|
|
(3)
Represents 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 TD Group's
operations, facility relocation costs and other acquisition-related
costs; transaction-related costs comprising deal fees; legal,
financial and tax due diligence expenses and valuation costs that
are required to be expensed as incurred.
|
|
(4) For the
thirty-nine week period ended July 1, 2017, represents debt
issuance costs expensed in conjunction with the incremental term
loan (tranche F), refinancing of the 2021 Notes and the additional
2025 Notes.
|
|
(5)
Primarily represents foreign currency transaction gain or loss on
intercompany loans to be settled and gain or loss on sale of fixed
assets and payroll withholding taxes on dividend equivalent
payments.
|
TRANSDIGM GROUP
INCORPORATED
|
|
|
|
SUPPLEMENTAL
INFORMATION - BALANCE SHEET DATA
|
|
Table
5
|
(Amounts in
thousands)
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
July 1,
2017
|
|
September 30,
2016
|
Cash and cash
equivalents
|
|
970,556
|
|
|
1,586,994
|
|
Trade accounts
receivable - net
|
|
606,005
|
|
|
576,339
|
|
Inventories -
net
|
|
743,579
|
|
|
724,011
|
|
Current portion of
long-term debt, net of debt issuance costs and OID
|
|
64,090
|
|
|
52,645
|
|
Short-term
borrowings-trade receivable securitization facility, net of debt
issuance costs
|
|
199,978
|
|
|
199,771
|
|
Accounts
payable
|
|
147,080
|
|
|
156,075
|
|
Accrued current
liabilities
|
|
319,569
|
|
|
344,112
|
|
Long-term debt, net
of debt issuance costs and OID
|
|
10,828,200
|
|
|
9,943,191
|
|
Total stockholders'
deficit
|
|
(1,895,445)
|
|
|
(651,490)
|
|
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
|
Table
6
|
|
FOR THE FISCAL
YEAR ENDING SEPTEMBER 30, 2017
|
|
(Amounts in
millions, except per share amounts)
|
|
(Unaudited)
|
|
|
|
|
|
Year
Ended
|
|
|
|
September
30,
|
|
|
|
2017
(guidance
|
|
|
|
mid-point)
|
|
Net income
|
|
$
|
612
|
|
|
Adjustments:
|
|
|
|
Depreciation and
amortization expense
|
|
144
|
|
|
Interest expense -
net
|
|
600
|
|
|
Income tax
provision
|
|
225
|
|
|
EBITDA
|
|
1,581
|
|
|
Adjustments:
|
|
|
|
Acquisition-related
expenses and adjustments (1) and other, net
(1)
|
|
42
|
|
|
Non-cash stock
compensation expense (1)
|
|
44
|
|
|
Refinancing costs
(1)
|
|
36
|
|
|
Gross Adjustments to
EBITDA
|
|
122
|
|
|
EBITDA As
Defined
|
|
$
|
1,703
|
|
|
EBITDA As Defined,
Margin (1)
|
|
48.0
|
%
|
|
|
|
|
|
Earnings per
share
|
|
$
|
9.28
|
|
|
Adjustments to
earnings per share:
|
|
|
|
Inclusion of the
dividend equivalent payments
|
|
1.73
|
|
|
Non-cash stock
compensation expense
|
|
0.55
|
|
|
Acquisition-related
expenses and adjustments and other, net
|
|
0.80
|
|
|
Refinancing
costs
|
|
0.45
|
|
|
Reduction in income
tax provision net income per common share related to the adoption
of ASU 2016-09
|
|
(0.60)
|
|
|
Adjusted earnings per
share
|
|
$
|
12.21
|
|
|
|
|
|
|
Weighted-average
shares outstanding
|
|
55.6
|
|
(1)
|
Refer to Table 2
above for definitions of Non-GAAP measurement
adjustments.
|
TRANSDIGM GROUP
INCORPORATED
|
|
|
SUPPLEMENTAL
INFORMATION
|
|
|
CURRENT FISCAL
YEAR 2017 GUIDANCE VERSUS PRIOR FISCAL YEAR 2017
GUIDANCE
|
Table
7
|
|
|
(Amounts in
millions, except per share amounts)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Current
|
|
Prior
|
|
|
|
|
Fiscal Year
2017
|
|
Fiscal Year
2017
|
|
|
|
|
Guidance
|
|
Guidance
|
|
Change
at
|
|
|
Reaffirmed August
8,
2017
|
|
Issued May 9,
2017
|
|
Mid-Point
|
|
Sales
|
$3,530 to
$3,570
|
|
$3,530 to
$3,570
|
|
—
|
|
|
|
|
|
|
|
|
GAAP Net
Income
|
$605 to
$619
|
|
$605 to
$619
|
|
—
|
|
|
|
|
|
|
|
|
GAAP Earnings Per
Share
|
$9.16 to
$9.40
|
|
$9.16 to
$9.40
|
|
—
|
|
|
|
|
|
|
|
|
EBITDA As
Defined
|
$1,693 to
$1,713
|
|
$1,693 to
$1,713
|
|
—
|
|
|
|
|
|
|
|
|
Adjusted Earnings Per
Share
|
$12.09 to
$12.33
|
|
$12.09 to
$12.33
|
|
—
|
|
|
|
|
|
|
|
|
Weighted-Average
Shares Outstanding
|
55.6
|
|
55.6
|
|
—
|
|