CLEVELAND, Nov. 9, 2017 /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 and fiscal year ended
September 30, 2017.
Highlights for the fourth quarter and fiscal year include:
- Fourth quarter net sales of $923.9
million, up 5.6% from $875.2
million;
- Fourth quarter net income from continuing operations of
$184.1 million, up 19.1% from
$154.7 million;
- Fourth quarter earnings per share from continuing operations
of $2.21, down 20.2% from
$2.77;
- Fourth quarter EBITDA As Defined of $460.1 million, up 8.7% from $423.3 million;
- Fourth quarter adjusted earnings per share of $3.48, up 5.8% from $3.29;
- Fiscal 2017 net sales of $3,504.3
million, up 10.5% from $3,171.4
million;
- Fiscal 2017 net income from continuing operations of
$628.5 million, up 7.2% from
$586.4 million;
- Fiscal 2017 earnings per share from continuing operations of
$8.45, down 18.7% from $10.39;
- Fiscal 2017 EBITDA As Defined $1,710.6 million, up 14.4% from $1,495.2 million; and
- Fiscal 2017 adjusted earnings per share of $12.38, up 7.7% from $11.49.
During the fourth quarter of 2017, TransDigm began the process
of disposing of our Schroth operations in connection with an
agreement with the Department of Justice. Accordingly, the
Schroth results are presented as discontinued operations, and as
such, $10.1 million of net sales are
excluded from continuing operations for the quarter and
$24.6 million of net sales are
excluded for the full fiscal year. Schroth was previously acquired
in February 2017.
Net sales for the quarter, which excludes $10.1 million of net sales from discontinued
operations, rose 5.6%, or $48.7
million, to $923.9 million
from $875.2 million in the comparable
quarter a year ago. Organic net sales growth was 2.7%.
Net income from continuing operations for the quarter rose 19.1%
to $184.1 million, or $2.21 per share, compared to $154.7 million, or $2.77 per share, in the comparable quarter a year
ago. Earnings per share were reduced in the quarter by $1.15 per share representing dividend equivalent
payments made during the quarter. The increase in net income
primarily reflects the increase in net sales described above, lower
acquisition related costs 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.
Net loss from discontinued operations in the quarter was
$30.7 million, or $0.56 loss per share.
Adjusted net income for the quarter rose 3.8% to $190.7 million, or $3.48 per share, from $183.6 million, or $3.29 per share, in the comparable quarter a year
ago.
EBITDA for the quarter, which excludes $0.9 million from discontinued operations,
increased 13.1% to $436.0 million
from $385.4 million for the
comparable quarter a year ago. EBITDA As Defined for the
period increased 8.7% to $460.1
million compared with $423.3
million in the comparable quarter a year ago. EBITDA
As Defined as a percentage of net sales for the quarter was
49.8%.
As previously reported, during the quarter TransDigm issued a
new $1.8 billion first lien term loan
and also drew $100 million on its
accounts receivable securitization facility. The proceeds were
used, together with cash on hand, to repay $1.2 billion of its existing tranche C term loans
and to fund a $22 per share special
dividend and related payments.
Year-to-Date Results
Fiscal 2017 net sales, which excludes $24.6 million from discontinued operations, rose
10.5% to $3,504.3 million from
$3,171.4 million in the comparable
period last year. Organic net sales growth was 2.4%.
Fiscal 2017 net income from continuing operations increased 7.2%
to $628.5 million, or $8.45 per share, compared with $586.4 million, or $10.39 per share, in the comparable period last
year. The increase in net income primarily reflects growth in net
sales described above, lower acquisition-related costs 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 weighted average level of
outstanding borrowings to $11.0
billion from $8.8 billion
outstanding in the comparable period last year, higher refinancing
costs and higher effective tax rate.
Net loss from discontinued operations in fiscal 2017 was
$31.7 million, or $0.57 per share.
Earnings per share were reduced in both 2017 and 2016 by
$2.87 per share and $0.05 per share, respectively, representing
dividend equivalent payments made during each fiscal year.
Fiscal 2017 adjusted net income rose 6.5% to $687.5 million, or $12.38 per share, from $645.3 million, or $11.49 per share, in the comparable period a year
ago.
Fiscal 2017 EBITDA , which excludes $3.0
million from discontinued operations, increased 15.1% to
$1,581.0 million from $1,373.6 million for the comparable period a year
ago. EBITDA As Defined for the period increased 14.4% to
$1,710.6 million compared with
$1,495.2 million in the comparable
period a year ago. EBITDA As Defined as a percentage of net
sales for the period was 48.8%.
"We are pleased with our overall operating results for both the
quarter and full fiscal year despite some modest puts and takes,"
stated W. Nicholas Howley, TransDigm
Group's Chairman and Chief Executive Officer. "For the full year,
our commercial transport aftermarket revenues were up in the
mid-single-digit percentage range despite weakness in our interior
businesses. This was partially offset by continuing weakness in our
business jet and helicopter aftermarket revenues. Commercial oem
revenues were slightly softer, however our defense revenues grew
more than originally anticipated. Our full fiscal year EBITDA As
Defined margin of 49% was strong and up almost two margin points
over the prior year, reflecting the power of our
consistent and strict operating focus."
He continued, "In Fiscal 2017, as part of our regular capital
allocation focus, we returned approximately $3 billion to our shareholders through a
combination of special dividends and share repurchases. We
ended the year with approximately $650
million in cash and have over $1
billion of liquidity available to us with our undrawn
revolver and capacity under our credit agreement. This strong
liquidity position grows throughout the year and provides us with
adequate financial flexibility to support continued growth and
pursue acquisition opportunities."
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 Fiscal 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 2018 Outlook
Assuming no acquisitions and based upon current market
conditions, TransDigm expects fiscal 2018 financial guidance to be
as follows:
- Net sales are anticipated to be in the range of $3,645 million to $3,725 million compared with
$3,504 million in fiscal 2017;
- Net income from continuing operations is anticipated to be in
the range of $702 million to $738
million compared with $597
million in fiscal 2017;
- Earnings per share from continuing operations are expected to
be in the range of $11.61 to $12.25
per share based upon weighted average shares outstanding of 55.6
compared with $7.88 per share in
fiscal 2017;
- EBITDA As Defined is anticipated to be in the range of
$1,805 million to $1,855 million
compared with $1,711 million in
fiscal 2017; and
- Adjusted earnings per share are expected to be in the range of
$12.78 to $13.42 per share compared
with $12.38 per share in fiscal
2017.
Mr. Howley stated, "Our fiscal 2018 guidance assumes that our
commercial aftermarket and OEM revenues will grow in
mid-single-digit percentage range, and defense revenues up in the
low to mid-single-digit percentage range."
Please see the attached table 6 for a reconciliation of EBITDA,
EBITDA As Defined to net income and reported earnings per share to
adjusted earnings per share guidance mid-point estimated for the
fiscal year ending September 30,
2018.
Earnings Conference Call
TransDigm Group will host a conference call for investors and
security analysts on November 9, 2017, beginning at
11:00 a.m., Eastern Time. To join the
call, dial (888) 558-9538 and enter the pass code 1759449.
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 1759449.
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 2018 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
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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
WEEK PERIODS AND FISCAL YEARS ENDED
|
|
Table
1
|
SEPTEMBER 30, 2017
AND SEPTEMBER 30, 2016
|
|
(Amounts in
thousands, except per share amounts)
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Thirteen Week
Periods Ended
|
|
Fiscal Years
Ended
|
|
|
September 30,
2017
|
|
September 30,
2016
|
|
September 30,
2017
|
|
September 30,
2016
|
NET SALES
|
|
$
|
923,885
|
|
|
$
|
875,223
|
|
|
$
|
3,504,286
|
|
|
$
|
3,171,411
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|
COST OF
SALES
|
|
392,646
|
|
|
390,904
|
|
|
1,519,659
|
|
|
1,443,348
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|
GROSS
PROFIT
|
|
531,239
|
|
|
484,319
|
|
|
1,984,627
|
|
|
1,728,063
|
|
SELLING AND
ADMINISTRATIVE EXPENSES
|
|
104,898
|
|
|
111,347
|
|
|
415,575
|
|
|
382,858
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AMORTIZATION OF
INTANGIBLE ASSETS
|
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18,404
|
|
|
23,971
|
|
|
89,226
|
|
|
77,445
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INCOME FROM
OPERATIONS
|
|
407,937
|
|
|
349,001
|
|
|
1,479,826
|
|
|
1,267,760
|
|
INTEREST EXPENSE -
NET
|
|
156,603
|
|
|
139,767
|
|
|
602,589
|
|
|
483,850
|
|
REFINANCING
COSTS
|
|
3,871
|
|
|
140
|
|
|
39,807
|
|
|
15,794
|
|
INCOME FROM
CONTINUING OPERATIONS
BEFORE INCOME TAXES
|
|
247,463
|
|
|
209,094
|
|
|
837,430
|
|
|
768,116
|
|
INCOME TAX
PROVISION
|
|
63,316
|
|
|
54,426
|
|
|
208,889
|
|
|
181,702
|
|
INCOME FROM
CONTINUING OPERATIONS
|
|
$
|
184,147
|
|
|
$
|
154,668
|
|
|
$
|
628,541
|
|
|
$
|
586,414
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LOSS FROM
DISCONTINUED OPERATIONS,
NET OF TAX
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(30,689)
|
|
|
—
|
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|
(31,654)
|
|
|
—
|
|
NET INCOME
|
|
$
|
153,458
|
|
|
$
|
154,668
|
|
|
$
|
596,887
|
|
|
$
|
586,414
|
|
NET INCOME APPLICABLE
TO COMMON
STOCK
|
|
$
|
90,172
|
|
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$
|
154,668
|
|
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$
|
437,630
|
|
|
$
|
583,414
|
|
Net earnings per
share:
|
|
|
|
|
|
|
|
|
Net earnings per
share from continuing operations--
basic and diluted
|
|
$
|
2.21
|
|
|
$
|
2.77
|
|
|
$
|
8.45
|
|
|
$
|
10.39
|
|
Net loss per share
from discontinued operations--
basic and diluted
|
|
(0.56)
|
|
|
—
|
|
|
(0.57)
|
|
|
—
|
|
Basic and
diluted
|
|
$
|
1.65
|
|
|
$
|
2.77
|
|
|
$
|
7.88
|
|
|
$
|
10.39
|
|
Cash dividends paid
per common share
|
|
$
|
22.00
|
|
|
$
|
—
|
|
|
$
|
46.00
|
|
|
$
|
—
|
|
Weighted-average
shares outstanding:
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
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54,796
|
|
|
55,832
|
|
|
55,530
|
|
|
56,157
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TRANSDIGM GROUP
INCORPORATED
|
|
|
|
|
|
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SUPPLEMENTAL
INFORMATION - RECONCILIATION OF EBITDA,
|
|
|
EBITDA AS DEFINED
TO NET INCOME
|
|
|
|
|
FOR THE THIRTEEN
WEEK PERIODS AND FISCAL YEARS ENDED
|
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Table
2
|
SEPTEMBER 30, 2017
AND SEPTEMBER 30, 2016
|
|
(Amounts in
thousands, except per share amounts)
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Thirteen Week
Periods Ended
|
|
Fiscal Years
Ended
|
|
|
September 30,
2017
|
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September 30,
2016
|
|
September 30,
2017
|
|
September 30,
2016
|
Net income
|
|
$
|
153,458
|
|
|
$
|
154,668
|
|
|
$
|
596,887
|
|
|
$
|
586,414
|
|
Less: Loss from
Discontinued Operations, net of tax
|
|
(30,689)
|
|
|
—
|
|
|
(31,654)
|
|
|
—
|
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Income from
Continuing Operations
|
|
184,147
|
|
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154,668
|
|
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628,541
|
|
|
586,414
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Adjustments:
|
|
|
|
|
|
|
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Depreciation and
amortization expense
|
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31,949
|
|
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36,569
|
|
|
141,025
|
|
|
121,670
|
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Interest expense,
net
|
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156,603
|
|
|
139,767
|
|
|
602,589
|
|
|
483,850
|
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Income tax
provision
|
|
63,316
|
|
|
54,426
|
|
|
208,889
|
|
|
181,702
|
|
EBITDA
|
|
436,015
|
|
|
385,430
|
|
|
1,581,044
|
|
|
1,373,636
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Acquisition-related
expenses and adjustments (1)
|
|
387
|
|
|
23,003
|
|
|
31,191
|
|
|
57,699
|
|
Non-cash stock
compensation expense (2)
|
|
12,817
|
|
|
14,487
|
|
|
45,524
|
|
|
48,306
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|
Refinancing costs
(3)
|
|
3,871
|
|
|
140
|
|
|
39,807
|
|
|
15,794
|
|
Other, net
(4)
|
|
7,015
|
|
|
241
|
|
|
12,997
|
|
|
(239)
|
|
Gross Adjustments to
EBITDA
|
|
24,090
|
|
|
37,871
|
|
|
129,519
|
|
|
121,560
|
|
EBITDA As
Defined
|
|
$
|
460,105
|
|
|
$
|
423,301
|
|
|
$
|
1,710,563
|
|
|
$
|
1,495,196
|
|
EBITDA As Defined,
Margin (5)
|
|
49.8
|
%
|
|
48.4
|
%
|
|
48.8
|
%
|
|
47.1
|
%
|
(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)
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Represents the
compensation expense recognized by TD Group under our stock
incentive plans.
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(3)
|
For the thirteen week
period ended September 30, 2017, represents debt issuance costs
expensed in conjunction with the additional term loan (tranche
G). For the fiscal year ended September 30, 2017, represents
debt issuance costs expensed in conjunction with the additional
term loan tranche (tranche G), the incremental term loan (tranche
F), refinancing of the 2021 Notes and the additional 2025
Notes.
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(4)
|
Primarily represents
gain or loss on sale of fixed assets, foreign currency transaction
gain or loss, foreign currency transaction gain or loss on
intercompany loans and employer withholding taxes on dividend
equivalent payments. In the periods prior to fiscal 2017, foreign
currency transaction gain or loss is not included in the
adjustments to EBITDA, as the foreign currency transaction gain or
loss was not significant during those periods.
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|
|
(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
WEEK PERIODS AND FISCAL YEARS ENDED
|
|
Table
3
|
SEPTEMBER 30, 2017
AND SEPTEMBER 30, 2016
|
|
(Amounts in
thousands, except per share amounts)
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Thirteen Week
Periods Ended
|
|
Fiscal Years
Ended
|
|
|
September 30,
2017
|
|
September 30,
2016
|
|
September 30,
2017
|
|
September 30,
2016
|
Reported Earnings
Per Share
|
|
|
|
|
|
|
|
|
Net income from
continuing operations
|
|
$
|
184,147
|
|
|
$
|
154,668
|
|
|
$
|
628,541
|
|
|
$
|
586,414
|
|
Less: dividends on
participating securities
|
|
(63,286)
|
|
|
—
|
|
|
(159,257)
|
|
|
(3,000)
|
|
|
|
$
|
120,861
|
|
|
$
|
154,668
|
|
|
$
|
469,284
|
|
|
$
|
583,414
|
|
Net loss from
discontinued operations
|
|
(30,689)
|
|
|
—
|
|
|
(31,654)
|
|
|
—
|
|
Net income applicable
to common stock - basic and
diluted
|
|
$
|
90,172
|
|
|
$
|
154,668
|
|
|
$
|
437,630
|
|
|
$
|
583,414
|
|
Weighted-average
shares outstanding under the
two-class method
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding
|
|
51,913
|
|
|
53,289
|
|
|
52,517
|
|
|
53,326
|
|
Vested options deemed
participating securities
|
|
2,883
|
|
|
2,543
|
|
|
3,013
|
|
|
2,831
|
|
Total shares for
basic and diluted earnings per share
|
|
54,796
|
|
|
55,832
|
|
|
55,530
|
|
|
56,157
|
|
Net earnings per
share from continuing operations--
basic and diluted
|
|
$
|
2.21
|
|
|
$
|
2.77
|
|
|
$
|
8.45
|
|
|
$
|
10.39
|
|
Net loss per share
from discontinued operations--
basic and diluted
|
|
(0.56)
|
|
|
—
|
|
|
(0.57)
|
|
|
—
|
|
Basic and diluted
earnings per share
|
|
$
|
1.65
|
|
|
$
|
2.77
|
|
|
$
|
7.88
|
|
|
$
|
10.39
|
|
Adjusted Earnings
Per Share
|
|
|
|
|
Net income from
continuing operations
|
|
$
|
184,147
|
|
|
$
|
154,668
|
|
|
$
|
628,541
|
|
|
$
|
586,414
|
|
Gross adjustments to
EBITDA
|
|
24,090
|
|
|
37,871
|
|
|
129,519
|
|
|
121,560
|
|
Purchase accounting
backlog amortization
|
|
1,602
|
|
|
8,082
|
|
|
22,764
|
|
|
19,467
|
|
Tax
adjustment
|
|
(19,177)
|
|
|
(16,987)
|
|
|
(93,369)
|
|
|
(82,131)
|
|
Adjusted net
income
|
|
$
|
190,662
|
|
|
$
|
183,634
|
|
|
$
|
687,455
|
|
|
$
|
645,310
|
|
Adjusted diluted
earnings per share under the two-
class method
|
|
$
|
3.48
|
|
|
$
|
3.29
|
|
|
$
|
12.38
|
|
|
$
|
11.49
|
|
Diluted Earnings
Per Share to Adjusted Earnings
Per Share
|
|
|
|
|
Diluted earnings per
share from continuing
operations
|
|
$
|
2.21
|
|
|
$
|
2.77
|
|
|
$
|
8.45
|
|
|
$
|
10.39
|
|
Adjustments to
diluted earnings per share:
|
|
|
|
|
|
|
|
|
Inclusion of the dividend equivalent payments
|
|
1.15
|
|
|
—
|
|
|
2.87
|
|
|
0.05
|
|
Non-cash
stock compensation expense
|
|
0.16
|
|
|
0.19
|
|
|
0.57
|
|
|
0.61
|
|
Acquisition-related expenses
|
|
0.03
|
|
|
0.40
|
|
|
0.67
|
|
|
0.97
|
|
Refinancing costs
|
|
0.05
|
|
|
—
|
|
|
0.50
|
|
|
0.20
|
|
Reduction in income tax provision net income per
common share related to the adoption of ASU
2016-09
|
|
(0.21)
|
|
|
(0.07)
|
|
|
(0.84)
|
|
|
(0.73)
|
|
Other,
net
|
|
0.09
|
|
|
—
|
|
|
0.16
|
|
|
—
|
|
Adjusted earnings per
share
|
|
$
|
3.48
|
|
|
$
|
3.29
|
|
|
$
|
12.38
|
|
|
$
|
11.49
|
|
TRANSDIGM GROUP
INCORPORATED
|
|
|
|
|
SUPPLEMENTAL
INFORMATION - RECONCILIATION OF NET CASH
|
|
Table
4
|
PROVIDED BY
OPERATING ACTIVITIES TO EBITDA,
|
|
EBITDA AS
DEFINED
|
|
FOR THE FISCAL
YEARS ENDED
|
|
SEPTEMBER 30, 2017
AND SEPTEMBER 30, 2016
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
Fiscal Years
Ended
|
|
|
September 30,
2017
|
|
September 30,
2016
|
Net cash provided by
operating activities
|
|
$
|
788,733
|
|
|
$
|
683,298
|
|
Adjustments:
|
|
|
|
|
Changes in assets and
liabilities, net of effects from acquisitions of
businesses
|
|
83,753
|
|
|
110,905
|
|
Interest expense -
net (1)
|
|
581,483
|
|
|
467,639
|
|
Income tax provision
- current
|
|
215,385
|
|
|
175,894
|
|
Non-cash stock
compensation expense (2)
|
|
(45,524)
|
|
|
(48,306)
|
|
Refinancing costs
(4)
|
|
(39,807)
|
|
|
(15,794)
|
|
EBITDA
|
|
1,584,023
|
|
|
1,373,636
|
|
Adjustments:
|
|
|
|
|
Acquisition-related
expenses (3)
|
|
31,191
|
|
|
57,699
|
|
Non-cash stock
compensation expense (2)
|
|
45,524
|
|
|
48,306
|
|
Refinancing costs
(4)
|
|
39,807
|
|
|
15,794
|
|
Other, net
(5)
|
|
12,997
|
|
|
(239)
|
|
EBITDA from
discontinued operations
|
|
(2,979)
|
|
|
—
|
|
EBITDA As
Defined
|
|
$
|
1,710,563
|
|
|
$
|
1,495,196
|
|
(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 fiscal year
ended September 30, 2017, represents debt issuance costs expensed
in conjunction with the additional term loan (tranche G), the
incremental term loan (tranche F), refinancing of the 2021 Notes
and the additional 2025 Notes.
|
|
|
(5)
|
Primarily represents
gain or loss on sale of fixed assets, foreign currency transaction
gain or loss, foreign currency transaction gain or loss on
intercompany loans and employer withholding taxes on dividend
equivalent payments. In the periods prior to fiscal 2017, foreign
currency transaction gain or loss is not included in the
adjustments to EBITDA, as the foreign currency transaction gain or
loss was not significant during those periods.
|
TRANSDIGM GROUP
INCORPORATED
|
|
|
|
SUPPLEMENTAL
INFORMATION - BALANCE SHEET DATA
|
|
Table
5
|
(Amounts in
thousands)
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
September 30,
2017
|
|
September 30,
2016
|
Cash and cash
equivalents
|
|
650,561
|
|
|
1,586,994
|
|
Trade accounts
receivable - net
|
|
636,127
|
|
|
576,339
|
|
Inventories -
net
|
|
730,681
|
|
|
724,011
|
|
Current portion of
long-term debt, net of debt issuance costs and OID
|
|
69,454
|
|
|
52,645
|
|
Short-term
borrowings-trade receivable securitization facility, net of
debt issuance costs
|
|
299,587
|
|
|
199,771
|
|
Accounts
payable
|
|
148,761
|
|
|
156,075
|
|
Accrued current
liabilities
|
|
335,888
|
|
|
344,112
|
|
Long-term debt, net
of debt issuance costs and OID
|
|
11,393,620
|
|
|
9,943,191
|
|
Total stockholders'
deficit
|
|
(2,951,204)
|
|
|
(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, 2018
|
|
(Amounts in
millions, except per share amounts)
|
|
(Unaudited)
|
|
|
|
|
|
Year
Ended
|
|
|
|
September
30,
|
|
|
|
2018
(guidance
|
|
|
|
mid-point)
|
|
Net income
|
|
$
|
720
|
|
|
Adjustments:
|
|
|
|
Depreciation and
amortization expense
|
|
130
|
|
|
Interest expense -
net
|
|
650
|
|
|
Income tax
provision
|
|
267
|
|
|
EBITDA
|
|
1,767
|
|
|
Adjustments:
|
|
|
|
Acquisition-related
expenses and adjustments (1) and other, net
(1)
|
|
15
|
|
|
Non-cash stock
compensation expense (1)
|
|
48
|
|
|
Refinancing costs
(1)
|
|
—
|
|
|
Gross Adjustments to
EBITDA
|
|
63
|
|
|
EBITDA As
Defined
|
|
$
|
1,830
|
|
|
EBITDA As Defined,
Margin (1)
|
|
49.7
|
%
|
|
|
|
|
|
Earnings per
share
|
|
$
|
11.93
|
|
|
Adjustments to
earnings per share:
|
|
|
|
Inclusion of the
dividend equivalent payments
|
|
1.02
|
|
|
Non-cash stock
compensation expense
|
|
0.60
|
|
|
Acquisition-related
expenses and adjustments and other, net
|
|
0.19
|
|
|
Refinancing
costs
|
|
—
|
|
|
Reduction in income
tax provision net income per common share related to the adoption
of ASU
2016-09
|
|
(0.64)
|
|
|
Adjusted earnings per
share
|
|
$
|
13.10
|
|
|
|
|
|
|
Weighted-average
shares outstanding
|
|
55.6
|
|
|
(1)
|
Refer to Table 2
above for definitions of Non-GAAP measurement
adjustments.
|