CLEVELAND, May 5, 2020
/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 28, 2020.
Second quarter highlights include:
- Net sales of $1,443 million, up
23.5% from $1,168 million;
- Net income from continuing operations of $323 million, up 61.5% from $200 million;
- Earnings per share from continuing operations of $5.63, up 58.1% from $3.56;
- EBITDA As Defined of $675
million, up 19.3% from $566
million;
- Adjusted earnings per share of $5.10, up 22.6% from $4.16; and
- Fiscal 2020 financial guidance withdrawn due to COVID-19
pandemic.
COVID-19 Update
The global outbreak of the coronavirus disease ("COVID-19") was
declared a pandemic by the World Health Organization in
March 2020 and has significantly
disrupted the airline industry, both domestically and
internationally.
As of March 28, 2020, we saw a
modest adverse impact to our commercial aftermarket and OEM sales
from the COVID-19 pandemic as approximately the last three weeks of
our second fiscal quarter were negatively impacted. Because the
duration and severity of the outbreak are uncertain at this time,
it is difficult to forecast any precise impact on the Company's
future results. However, the Company currently expects the COVID-19
pandemic to have a significant adverse impact on its sales, EBITDA
As Defined and net income for the remainder of fiscal 2020 under
the assumption that the COVID-19 pandemic will adversely affect our
non-defense customers and their demand for our products and
services. In the near term, the outbreak and worsening of the
COVID-19 pandemic will adversely impact our commercial aftermarket
sales. We believe that the COVID-19 pandemic will also adversely
impact our commercial OEM sales over the long term.
As previously disclosed on April 2,
2020, the Company has enacted cost mitigation efforts as a
result of expected declines in our business caused by the COVID-19
pandemic. These cost mitigation efforts include the following:
- Reduction in workforce by up to 15% to align operations with
customer demand; these actions are in addition to the cost
mitigation efforts implemented in the second quarter of fiscal
2020;
- Implementing one to eight-week furloughs at many businesses
over approximately the next six months in response to business
specific situations;
- Substantially reducing cash compensation for the senior
management team for the balance of fiscal 2020; and
- Board of Directors will forgo annual retainer fees.
Quarter-to-Date Results
Net sales for the quarter rose 23.5%, or $275 million, to $1,443
million from $1,168 million in
the comparable quarter a year ago. Organic sales growth was
4.8%. Acquisition sales growth over the comparable quarter a
year ago was $219 million, all of
which are attributable to Esterline.
Net income from continuing operations for the quarter increased
61.5% to $323 million compared to
$200 million in the comparable
quarter a year ago. The effective tax rate in the current quarter
was positively impacted by a one-time provisional benefit from
dividend equivalent payments made in the quarter, as well as the
enactment of the CARES Act which included favorable modifications
to the interest deductibility limitation. The current effective tax
rate was 4.2% compared to 24.2% for the comparable period of fiscal
2019. The balance of the increase in net income from continuing
operations primarily reflects the increase in net sales described
above, and lower acquisition-related expenses. This growth in net
income from continuing operations was offset partially by higher
operating costs and amortization expense attributable to Esterline
and higher interest expense.
Adjusted net income for the quarter increased 24.8% to
$292 million, or $5.10 per share, from $234
million, or $4.16 per share,
in the comparable quarter a year ago.
EBITDA for the quarter increased 31.2% to $661 million from $504
million for the comparable quarter a year ago. EBITDA As
Defined for the period increased 19.3% to $675 million compared with $566 million in the comparable quarter a year
ago. EBITDA As Defined as a percentage of net sales for the quarter
was 46.8%.
"We are pleased with our second quarter and fiscal first half
results, particularly in light of an increasingly difficult global
economy and commercial aerospace industry. Despite these headwinds,
we had positive organic revenue growth in the quarter,"
stated Kevin Stein, TransDigm Group's President and
Chief Executive Officer. "Also during the quarter, we began to move
swiftly and with purpose in response to the COVID-19 pandemic,
taking immediate actions to protect employees from the spread of
the virus while also dealing with the harsh reality confronting the
broader commercial aerospace industry in the near-term. While the
actions that the current circumstances require, ranging from broad
cost reductions to furloughs, and a right-sizing of the employee
base are difficult to implement, I have no doubt that they will
better position the Company to endure and emerge more strongly from
the ongoing weakness in our primary commercial end markets."
Capital Structure & Liquidity Update
The Company has a strong balance sheet and liquidity position.
TransDigm ended the second quarter of fiscal 2020 with a cash
balance of approximately $2.7 billion
and over $500 million of capacity
available on its revolving credit facility. Subsequent to the
quarter, in early April 2020, the
Company added an additional $1.5
billion of cash through two successful offerings of senior
secured notes. The two offerings of senior secured notes bring the
total cash balance to approximately $4.2
billion.
On April 8, 2020, TransDigm
successfully completed a private offering of $1.1 billion of 8.00% Senior Secured Notes due
2025.
Additionally, on April 17, 2020
TransDigm successfully completed a private offering of an
additional $400 million of 6.25%
Senior Secured Notes due 2026 (the "Notes") at a price equal to
101% of the par value or an effective interest rate of
approximately 6.05%. The Notes were an additional issuance of
the Company's existing 6.25% Senior Secured Notes due 2026 and
issued as additional notes under the indenture dated as of
February 13, 2019 pursuant to which
the Company previously issued $4,000
million aggregate principal amount of 6.25% Senior Secured
Notes due 2026.
W. Nicholas Howley, TransDigm
Group's Executive Chairman stated, "We had a substantial amount of
cash as of the quarter end and do not anticipate additional needs
to address this market disruption. However, out of an
abundance of caution and to maintain significant firepower, we
issued incremental debt to strengthen our liquidity position. This
allows extra protection for our investors in the event of a more
severe or extended market disruption than anticipated and
alternately allows us the flexibility to address any compelling
investment opportunities, consistent with our strategy that may
arise after the outlook has become somewhat more predictable."
Year-to-Date Results
Net sales for the twenty-six week period ended March 28, 2020 rose 34.6%, or $747 million, to $2,908
million from $2,161 million in
the comparable period a year ago. Organic sales growth was
6.7%. Acquisition sales growth over the comparable period a
year ago was $603 million, all of
which are attributable to Esterline.
Net income from continuing operations for the twenty-six week
period ended March 28, 2020 increased
40.4% to $556 million compared to
$396 million in the comparable period
a year ago. The effective tax rate in the current twenty-six week
period was positively impacted by a lower effective tax rate of
11.6% compared to 22.9% for the comparable period of fiscal 2019.
The balance of the increase in net income from continuing
operations primarily reflects the increase in net sales described
above and lower acquisition-related expenses. This growth in net
income from continuing operations was offset partially by higher
operating costs and amortization expense attributable to Esterline,
higher interest expense and one-time refinancing costs.
GAAP earnings per share were reduced in fiscal 2020 and 2019 by
$3.22 per share and $0.43 per share, respectively, as a result of
dividend equivalent payments made during each year.
Adjusted net income for the twenty-six week period ended
March 28, 2020 increased 27.7% to
$576 million, or $10.03 per share, from $451 million, or $8.00 per share, in the comparable period a year
ago.
EBITDA for the twenty-six week period ended March 28, 2020 increased 32.3% to $1,271 million from $961
million for the comparable period a year ago. EBITDA As
Defined for the period increased 28.8% to $1,356 million compared with $1,053 million in the comparable period a year
ago. EBITDA As Defined as a percentage of net sales for the current
period was 46.6%.
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 2020 Outlook
On April 2, 2020, the Company
withdrew its previously provided financial guidance for the fiscal
year ending September 30, 2020, due
to the unprecedented uncertainty around the ultimate impact of
COVID-19 on global market and economic conditions.
Earnings Conference Call
TransDigm Group will host a conference call for investors and
security analysts on May 5, 2020, beginning at 11:00 a.m., Eastern Time. To join the call, dial
(866) 221-1741 and enter the passcode 4190001. International
callers should dial (270) 215-9922 and use the same passcode. 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 one week by
dialing (855) 859-2056 and entering the passcode 4190001.
International callers should dial (404) 537-3406 and use the same
passcode.
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, seat belts
and safety restraints, engineered interior surfaces and related
components, advanced sensor products, switches and relay panels,
advanced displays, thermal protection and insulation, 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 2020 Outlook," are
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Words such as "believe,"
"may," "will," "should," "expect," "intend," "plan," "predict,"
"anticipate," "estimate," or "continue" and other words and terms
of similar meaning may identify forward-looking statements.
All forward-looking statements involve risks and uncertainties
that could cause TransDigm Group's actual results to differ
materially from those expressed or implied in any forward-looking
statements made by, or on behalf of, TransDigm Group. These risks
and uncertainties include but are not limited to: the impact that
the COVID-19 pandemic has on the TransDigm Group's business,
results of operations, financial condition and liquidity; the
sensitivity of TransDigm Group's business to the number of flight
hours that its customers' planes spend aloft and its customers'
profitability, both of which are affected by general economic
conditions; future geopolitical or other worldwide events;
cyber-security threats and natural disasters; TransDigm Group's
reliance on certain customers; the U.S. defense budget and risks
associated with being a government supplier including government
audits and investigations; failure to maintain government or
industry approvals; failure to complete or successfully integrate
acquisitions, including TransDigm Group's acquisition of Esterline;
TransDigm Group's indebtedness; potential environmental
liabilities; liabilities arising in connection with litigation;
increases in raw material costs, taxes and labor costs that cannot
be recovered in product pricing; risks and costs associated with
TransDigm Group's international sales and operations; and other
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 for the fiscal year ended September 30,
2019 and other reports that TransDigm Group or its
subsidiaries have filed with the Securities and Exchange
Commission. Except as required by law, TransDigm Group undertakes
no obligation to revise or update the forward-looking statements
contained in this press release.
Contact:
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Investor
Relations
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216-706-2945
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ir@transdigm.com
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TRANSDIGM GROUP
INCORPORATED
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CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
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FOR THE THIRTEEN
AND TWENTY-SIX WEEK PERIODS ENDED
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Table
1
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MARCH 28, 2020 AND
MARCH 30, 2019
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(Amounts in
millions, except per share amounts)
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|
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(Unaudited)
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|
|
|
|
|
|
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Thirteen Week
Periods Ended
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Twenty-Six Week
Periods Ended
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March 28,
2020
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March 30,
2019
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March 28,
2020
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March 30,
2019
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NET SALES
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$
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1,443
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$
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1,168
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$
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2,908
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|
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$
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2,161
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COST OF
SALES
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625
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518
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1,288
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947
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GROSS
PROFIT
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818
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650
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1,620
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1,214
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SELLING AND
ADMINISTRATIVE EXPENSES
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180
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|
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160
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381
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282
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AMORTIZATION OF
INTANGIBLE ASSETS
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46
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22
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86
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42
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INCOME FROM
OPERATIONS
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592
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|
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468
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1,153
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890
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INTEREST EXPENSE -
NET
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252
|
|
|
202
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|
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501
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|
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374
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REFINANCING
COSTS
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3
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|
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3
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|
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26
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|
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3
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OTHER
INCOME
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—
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—
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(3)
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—
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INCOME FROM
CONTINUING OPERATIONS BEFORE INCOME TAXES
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337
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|
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263
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629
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513
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INCOME TAX
PROVISION
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14
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63
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|
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73
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|
|
117
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INCOME FROM
CONTINUING OPERATIONS
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323
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|
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200
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|
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556
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|
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396
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(LOSS) INCOME FROM
DISCONTINUED OPERATIONS, NET OF TAX
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(4)
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2
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68
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2
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NET INCOME
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319
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|
|
202
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|
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624
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398
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LESS: NET INCOME
ATTRIBUTABLE TO NONCONTROLLING INTERESTS
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—
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—
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(1)
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—
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NET INCOME
ATTRIBUTABLE TO TD GROUP
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$
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319
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$
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202
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$
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623
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$
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398
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NET INCOME APPLICABLE
TO TD GROUP COMMON STOCKHOLDERS
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$
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319
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$
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202
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$
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438
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$
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374
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Earnings per share
attributable to TD Group common stockholders:
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Earnings per share
from continuing operations - basic and diluted
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$
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5.63
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$
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3.56
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$
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6.45
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$
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6.61
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(Loss) Earnings per
share from discontinued operations - basic and diluted
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(0.07)
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0.04
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1.18
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0.04
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Earnings per
share
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$
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5.56
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$
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3.60
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$
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7.63
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$
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6.65
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Cash dividends
declared per common share
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$
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—
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$
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—
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$
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32.50
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$
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—
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Weighted-average
shares outstanding:
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Basic and
diluted
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57.4
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56.3
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57.4
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56.3
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TRANSDIGM GROUP
INCORPORATED
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SUPPLEMENTAL
INFORMATION - RECONCILIATION OF EBITDA,
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EBITDA AS DEFINED
TO NET INCOME
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FOR THE THIRTEEN
AND TWENTY-SIX WEEK PERIODS ENDED
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Table
2
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MARCH 28, 2020 AND
MARCH 30, 2019
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(Amounts in
millions, except per share amounts)
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|
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(Unaudited)
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|
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|
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Thirteen Week
Periods Ended
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Twenty-Six Week
Periods Ended
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March 28,
2020
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March 30,
2019
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March 28,
2020
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March 30,
2019
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Income from
continuing operations
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$
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323
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$
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200
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$
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556
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$
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396
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Adjustments:
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Depreciation and
amortization expense
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72
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39
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141
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74
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Interest expense,
net
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252
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202
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501
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374
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Income tax
provision
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14
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63
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73
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117
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EBITDA
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661
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504
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1,271
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961
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Adjustments:
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Acquisition-related
expenses and adjustments (1)
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9
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38
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16
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49
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Non-cash stock
compensation expense (2)
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11
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21
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37
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38
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Refinancing costs
(3)
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3
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3
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26
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3
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Other, net
(4)
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(9)
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—
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6
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2
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Gross Adjustments to
EBITDA
|
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14
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|
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62
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|
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85
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|
|
92
|
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EBITDA As
Defined
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$
|
675
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$
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566
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$
|
1,356
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$
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1,053
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EBITDA As Defined,
Margin (5)
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46.8
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%
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48.5
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%
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46.6
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%
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48.7
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%
|
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(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) Represents costs expensed related
to debt financing activities, including new issuances,
extinguishments, refinancings and amendments to existing
agreements.
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(4)
Primarily represents foreign currency transaction gain or loss,
payroll withholding taxes related to dividend equivalent payments
and stock option exercises, non-service related pension costs,
deferred compensation and gain or loss on sale of fixed
assets.
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(5) The EBITDA As Defined margin
represents the amount of EBITDA As Defined as a percentage of
sales.
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TRANSDIGM GROUP
INCORPORATED
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SUPPLEMENTAL
INFORMATION - RECONCILIATION OF
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|
|
|
|
REPORTED EARNINGS
PER SHARE TO
|
|
|
|
|
ADJUSTED EARNINGS
PER SHARE
|
|
|
|
|
FOR THE THIRTEEN
AND TWENTY-SIX WEEK PERIODS ENDED
|
Table
3
|
MARCH 28, 2020 AND
MARCH 30, 2019
|
(Amounts in
millions, except per share amounts)
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Thirteen Week
Periods Ended
|
|
Twenty-Six Week
Periods Ended
|
|
|
March 28,
2020
|
|
March 30,
2019
|
|
March 28,
2020
|
|
March 30,
2019
|
Reported Earnings
Per Share
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
|
$
|
323
|
|
|
$
|
200
|
|
|
$
|
556
|
|
|
$
|
396
|
|
Less: Net income
attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
(1)
|
|
|
—
|
|
Net income from
continuing operations attributable to TD Group
|
|
323
|
|
|
200
|
|
|
555
|
|
|
396
|
|
Less: Special
dividends declared or paid on participating securities
|
|
—
|
|
|
—
|
|
|
(185)
|
|
|
(24)
|
|
|
|
323
|
|
|
200
|
|
|
370
|
|
|
372
|
|
(Loss) income from
discontinued operations, net of tax
|
|
(4)
|
|
|
2
|
|
|
68
|
|
|
2
|
|
Net income applicable
to TD Group common stockholders - basic and diluted
|
|
$
|
319
|
|
|
$
|
202
|
|
|
$
|
438
|
|
|
$
|
374
|
|
Weighted-average
shares outstanding under the two-class method
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding
|
|
53.8
|
|
|
53.0
|
|
|
53.7
|
|
|
52.9
|
|
Vested options deemed
participating securities
|
|
3.6
|
|
|
3.3
|
|
|
3.7
|
|
|
3.4
|
|
Total shares for
basic and diluted earnings per share
|
|
57.4
|
|
|
56.3
|
|
|
57.4
|
|
|
56.3
|
|
Earnings per share
attributable to TD Group from continuing operations - basic and
diluted
|
|
$
|
5.63
|
|
|
$
|
3.56
|
|
|
$
|
6.45
|
|
|
$
|
6.61
|
|
(Loss) earnings per
share attributable to TD Group from discontinued operations - basic
and diluted
|
|
(0.07)
|
|
|
0.04
|
|
|
1.18
|
|
|
0.04
|
|
Basic and diluted
earnings per share
|
|
$
|
5.56
|
|
|
$
|
3.60
|
|
|
$
|
7.63
|
|
|
$
|
6.65
|
|
Adjusted Earnings
Per Share
|
|
|
|
|
Net income from
continuing operations attributable to TD Group
|
|
$
|
323
|
|
|
$
|
200
|
|
|
555
|
|
|
$
|
396
|
|
Gross adjustments to
EBITDA
|
|
14
|
|
|
62
|
|
|
85
|
|
|
92
|
|
Purchase accounting
backlog amortization
|
|
16
|
|
|
4
|
|
|
28
|
|
|
5
|
|
Tax adjustment
(1)
|
|
(61)
|
|
|
(32)
|
|
|
(93)
|
|
|
(42)
|
|
Adjusted net
income
|
|
$
|
292
|
|
|
$
|
234
|
|
|
$
|
575
|
|
|
$
|
451
|
|
Adjusted diluted
earnings per share under the two-class method
|
|
$
|
5.10
|
|
|
$
|
4.16
|
|
|
$
|
10.03
|
|
|
$
|
8.00
|
|
Diluted Earnings
Per Share to Adjusted Earnings Per Share
|
|
|
|
|
Diluted earnings per
share from continuing operations
|
|
$
|
5.63
|
|
|
$
|
3.56
|
|
|
$
|
6.45
|
|
|
$
|
6.61
|
|
Adjustments to
diluted earnings per share:
|
|
|
|
|
|
|
|
|
Inclusion of the dividend equivalent payments
|
|
—
|
|
|
—
|
|
|
3.22
|
|
|
0.43
|
|
Acquisition-related expenses
|
|
0.35
|
|
|
0.53
|
|
|
0.59
|
|
|
0.72
|
|
Non-cash
stock compensation expense
|
|
0.16
|
|
|
0.26
|
|
|
0.50
|
|
|
0.50
|
|
Refinancing costs
|
|
0.05
|
|
|
0.04
|
|
|
0.35
|
|
|
0.05
|
|
Reduction in income tax provision due to excess tax benefits on
stock compensation
|
|
(0.95)
|
|
|
(0.23)
|
|
|
(1.19)
|
|
|
(0.31)
|
|
Other,
net
|
|
(0.14)
|
|
|
—
|
|
|
0.11
|
|
|
—
|
|
Adjusted earnings per
share
|
|
$
|
5.10
|
|
|
$
|
4.16
|
|
|
$
|
10.03
|
|
|
$
|
8.00
|
|
|
(1) For
the thirteen and twenty-six week periods ended March 28, 2020 and
March 30, 2019, 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
|
|
Table
4
|
PROVIDED BY
OPERATING ACTIVITIES TO EBITDA,
|
|
EBITDA AS
DEFINED
|
|
FOR THE TWENTY-SIX
WEEK PERIODS ENDED
|
|
MARCH 28, 2020 AND
MARCH 30, 2019
|
|
|
|
(Amounts in
millions)
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
Twenty-Six Week
Periods Ended
|
|
|
March 28,
2020
|
|
March 30,
2019
|
Net cash provided by
operating activities
|
|
$
|
594
|
|
|
$
|
453
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
Changes in assets and
liabilities, net of effects from acquisitions of
businesses
|
|
173
|
|
|
64
|
|
Interest expense -
net (1)
|
|
485
|
|
|
361
|
|
Income tax provision
- current
|
|
82
|
|
|
124
|
|
Non-cash stock
compensation expense (2)
|
|
(37)
|
|
|
(38)
|
|
Refinancing costs
(3)
|
|
(26)
|
|
|
(3)
|
|
EBITDA
|
|
1,271
|
|
|
961
|
|
Adjustments:
|
|
|
|
|
Acquisition-related
expenses (4)
|
|
16
|
|
|
49
|
|
Non-cash stock
compensation expense (2)
|
|
37
|
|
|
38
|
|
Refinancing costs
(3)
|
|
26
|
|
|
3
|
|
Other, net
(5)
|
|
6
|
|
|
2
|
|
EBITDA As
Defined
|
|
$
|
1,356
|
|
|
$
|
1,053
|
|
|
(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 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 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.
|
|
(5) Primarily represents foreign
currency transaction gain or loss, payroll withholding taxes
related to dividend equivalent payments and stock option exercises,
non-service related pension costs, deferred compensation and gain
or loss on sale of fixed assets.
|
TRANSDIGM GROUP
INCORPORATED
|
|
|
|
SUPPLEMENTAL
INFORMATION - BALANCE SHEET DATA
|
|
Table
5
|
(Amounts in
millions)
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
March 28,
2020
|
|
September 30,
2019
|
Cash and cash
equivalents
|
|
$
|
2,668
|
|
|
$
|
1,467
|
|
Trade accounts
receivable - net
|
|
999
|
|
|
1,068
|
|
Inventories -
net
|
|
1,313
|
|
|
1,233
|
|
Current portion of
long-term debt
|
|
279
|
|
|
80
|
|
Short-term
borrowings-trade receivable securitization facility
|
|
350
|
|
|
350
|
|
Accounts
payable
|
|
266
|
|
|
276
|
|
Accrued current
liabilities
|
|
761
|
|
|
675
|
|
Long-term
debt
|
|
17,933
|
|
|
16,469
|
|
Total TD Group
stockholders' deficit
|
|
(4,209)
|
|
|
(2,894)
|
|
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SOURCE TransDigm Group Inc.