CLEVELAND, Nov. 12, 2020 /PRNewswire/ -- TransDigm Group
Incorporated (NYSE: TDG), a leading global designer, producer and
supplier of highly engineered aircraft components, today reported
results for the fourth quarter ended September 30, 2020, which
were significantly impacted by the COVID-19 pandemic.
Fourth quarter highlights include:
- Net sales of $1,173 million, down
23.9% from $1,541 million in the
prior year's quarter;
- Income from continuing operations of $101 million;
- Earnings per share from continuing operations of $1.76;
- EBITDA As Defined margin of 42.4%;
- EBITDA As Defined of $498 million
is down 29.6% from $707 million in
the prior year's quarter;
- Adjusted earnings per share of $2.89, down 48.6% from $5.62; and
- Strong operating cash flow generation of $222 million.
Fiscal 2020 highlights include:
- Net sales of $5,103 million, down
2.3% from $5,223 million in the prior
year;
- Income from continuing operations of $653 million;
- Earnings per share from continuing operations of $8.14;
- EBITDA As Defined margin of 44.6%;
- EBITDA As Defined of $2,278
million is down 5.8% from $2,419
million in the prior year; and
- Adjusted earnings per share of $14.47, down 20.8% from $18.27.
Fiscal 2021 financial guidance will not be issued at this
time.
Quarter-to-Date Results
Net sales for the quarter declined 23.9%, or $368 million, to $1,173
million from $1,541 million in
the comparable quarter a year ago. In the current quarter, all
sales represent organic sales.
Income from continuing operations for the quarter was
$101 million, a decrease of 68.1%
compared to $317 million in the
comparable quarter a year ago. The decrease in income from
continuing operations primarily reflects the decline in net sales
described above. This decline in income from continuing operations
was partially offset by a lower effective tax rate.
Adjusted net income for the quarter decreased 47.5% to
$166 million, or $2.89 per share, from $316
million, or $5.62 per share,
in the comparable quarter a year ago.
EBITDA for the quarter decreased 40.9% to $414 million from $700
million for the comparable quarter a year ago. EBITDA As
Defined for the period decreased 29.6% to $498 million compared with $707 million in the comparable quarter a year
ago. EBITDA As Defined as a percentage of net sales for the quarter
was 42.4%.
"Throughout our fourth fiscal quarter, both passenger demand and
air traffic remained depressed due to the COVID-19 pandemic. The
pandemic has resulted in governments around the world implementing
measures to control the spread of the virus, including quarantines,
travel restrictions and other measures. Certain markets have
reopened, while others, particularly international markets,
remained closed or are enforcing extended quarantines. Despite
these headwinds, I am pleased that we were able to sequentially
expand our EBITDA As Defined margin to about forty-two and a half
percent as a result of careful management of our cost structure,"
stated Kevin Stein, TransDigm Group's President and
Chief Executive Officer.
Year-to-Date Results
Fiscal 2020 net sales declined 2.3%, or $120 million, to $5,103
million from $5,223 million in
the comparable period last year. Organic sales declined 13.8%.
Acquisition sales growth was $603
million, all of which are attributable to
Esterline.
Fiscal 2020 income from continuing operations declined 22.4% to
$653 million compared to $841 million in the comparable period a year ago.
This decrease in income from continuing operations primarily
reflects the decline in net sales described above, along with
higher interest expense, higher operating costs and amortization
expense attributable to Esterline and COVID-19 restructuring costs.
The decline in income from continuing operations was offset
partially by lower acquisition related expenses and a lower
effective tax rate. The effective tax rate for fiscal 2020 was
positively impacted by a one-time provisional benefit from dividend
and dividend equivalent payments made in the period, as well as the
enactment of the CARES Act which included favorable modifications
to the interest deduction limitation. The effective tax rate for
full-year fiscal 2020 was 11.7% compared to 20.9% for fiscal
2019.
GAAP earnings per share were reduced in fiscal 2020 and 2019 by
$3.22 per share and $1.97 per share, respectively, as a result of
dividend and dividend equivalent payments made during each
year.
Fiscal 2020 adjusted net income decreased 19.3% to $829 million, or $14.47 per share, from $1,028 million, or $18.27 per share, in the comparable period a year
ago.
Fiscal 2020 EBITDA decreased 4.4% to $2,052 million from $2,148
million for the comparable period a year ago. EBITDA As
Defined for the period decreased 5.8% to $2,278 million compared with $2,419 million in the comparable period a year
ago. EBITDA As Defined as a percentage of net sales for the current
period was 44.6%.
Mr. Stein continued, "Fiscal 2020 has been a challenging year
given the unprecedented COVID-19 pandemic and ensuing disruption of
the commercial aerospace industry. These circumstances required
actions that were necessary, but difficult to implement. The
purposeful management of our cost structure, along with tight
management of our balance sheet, better positions us as a Company
to emerge strongly from the ongoing weakness in our primary
commercial end markets. With the recent uptick in global COVID-19
cases as well as renewed lockdowns in certain countries, much
uncertainty remains about the duration of the pandemic and pace of
recovery. We will continue to be focused in our management of the
details and look forward to the opportunity to create value for our
stakeholders in fiscal 2021."
Please see the attached tables for a reconciliation of income
from continuing operations to EBITDA, EBITDA As Defined, and
adjusted net income; a reconciliation of net cash provided by
operating activities to EBITDA and EBITDA As Defined, and a
reconciliation of earnings per share to adjusted earnings per share
for the periods discussed in this press release.
Fiscal 2021 Outlook
Given the considerable uncertainty around the extent and
duration of business disruptions related to the COVID-19 pandemic,
and how that will impact operations, the Company will not provide
fiscal year 2021 guidance at this time.
Earnings Conference Call
TransDigm Group will host a conference call for investors and
security analysts on November 12, 2020, beginning at
11:00 a.m., Eastern Time. To join the
call, dial (833) 397-0943 and enter the passcode 8789968.
International callers should dial (720) 405-3217 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 8789968.
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, batteries and chargers, engineered latching
and locking devices, engineered rods, engineered connectors and
elastomer sealing solutions, databus and power controls, cockpit
security components and systems, specialized and advanced cockpit
displays, aircraft audio systems, specialized lavatory components,
seat belts and safety restraints, engineered and customized
interior surfaces and related components, advanced sensor products,
switches and relay panels, thermal protection and insulation,
lighting and control technology, parachutes, high performance
hoists, winches and lifting devices, and cargo loading, handling
and delivery systems.
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 2021 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,
2020 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:
|
|
Investor
Relations
|
|
|
216-706-2945
|
|
|
ir@transdigm.com
|
TRANSDIGM GROUP
INCORPORATED
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
FOR THE THIRTEEN
WEEK PERIODS AND FISCAL YEARS ENDED
|
|
Table
1
|
SEPTEMBER 30, 2020
AND SEPTEMBER 30, 2019
|
|
(Amounts in
millions, except per share amounts)
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Thirteen Week
Periods Ended
|
|
Fiscal Year
Ended
|
|
|
September 30,
2020
|
|
September 30,
2019
|
|
September 30,
2020
|
|
September 30,
2019
|
NET SALES
|
|
$
|
1,173
|
|
|
$
|
1,541
|
|
|
$
|
5,103
|
|
|
$
|
5,223
|
|
COST OF
SALES
|
|
637
|
|
|
659
|
|
|
2,456
|
|
|
2,414
|
|
GROSS
PROFIT
|
|
536
|
|
|
882
|
|
|
2,647
|
|
|
2,809
|
|
SELLING AND
ADMINISTRATIVE EXPENSES
|
|
182
|
|
|
212
|
|
|
727
|
|
|
748
|
|
AMORTIZATION OF
INTANGIBLE ASSETS
|
|
41
|
|
|
55
|
|
|
169
|
|
|
135
|
|
INCOME FROM
OPERATIONS
|
|
313
|
|
|
615
|
|
|
1,751
|
|
|
1,926
|
|
INTEREST EXPENSE -
NET
|
|
267
|
|
|
245
|
|
|
1,029
|
|
|
859
|
|
REFINANCING
COSTS
|
|
1
|
|
|
—
|
|
|
28
|
|
|
3
|
|
OTHER (INCOME)
EXPENSE
|
|
(31)
|
|
|
3
|
|
|
(46)
|
|
|
1
|
|
INCOME FROM
CONTINUING OPERATIONS BEFORE INCOME TAXES
|
|
76
|
|
|
367
|
|
|
740
|
|
|
1,063
|
|
INCOME TAX
PROVISION
|
|
(25)
|
|
|
50
|
|
|
87
|
|
|
222
|
|
INCOME FROM
CONTINUING OPERATIONS
|
|
101
|
|
|
317
|
|
|
653
|
|
|
841
|
|
(LOSS) INCOME FROM
DISCONTINUED OPERATIONS, NET OF TAX
|
|
(19)
|
|
|
31
|
|
|
47
|
|
|
51
|
|
NET INCOME
|
|
82
|
|
|
348
|
|
|
700
|
|
|
892
|
|
LESS: NET INCOME
ATTRIBUTABLE TO NONCONTROLLING INTERESTS
|
|
—
|
|
|
(1)
|
|
|
(1)
|
|
|
(2)
|
|
NET INCOME
ATTRIBUTABLE TO TD GROUP
|
|
$
|
82
|
|
|
$
|
347
|
|
|
$
|
699
|
|
|
$
|
890
|
|
NET INCOME APPLICABLE
TO TD GROUP COMMON STOCKHOLDERS
|
|
$
|
82
|
|
|
$
|
260
|
|
|
$
|
514
|
|
|
$
|
779
|
|
Earnings per share
attributable to TD Group common stockholders:
|
|
|
|
|
|
|
|
|
Earnings per share
from continuing operations - basic and diluted
|
|
$
|
1.76
|
|
|
$
|
4.08
|
|
|
$
|
8.14
|
|
|
$
|
12.94
|
|
(Loss) Earnings per
share from discontinued operations - basic and diluted
|
|
(0.33)
|
|
|
0.55
|
|
|
0.82
|
|
|
0.90
|
|
Earnings per
share
|
|
$
|
1.43
|
|
|
$
|
4.63
|
|
|
$
|
8.96
|
|
|
$
|
13.84
|
|
Cash dividends
declared per common share
|
|
$
|
—
|
|
|
$
|
30.00
|
|
|
$
|
32.50
|
|
|
$
|
30.00
|
|
Weighted-average
shares outstanding:
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
57.3
|
|
|
56.3
|
|
|
57.3
|
|
|
56.3
|
|
TRANSDIGM GROUP
INCORPORATED
|
SUPPLEMENTAL
INFORMATION - RECONCILIATION OF EBITDA,
|
EBITDA AS DEFINED
TO INCOME FROM CONTINUING OPERATIONS
|
FOR THE THIRTEEN
WEEK PERIODS AND FISCAL YEARS ENDED
|
|
Table
2
|
SEPTEMBER 30, 2020
AND SEPTEMBER 30, 2019
|
|
(Amounts in
millions, except per share amounts)
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Thirteen Week
Periods Ended
|
|
Fiscal Year
Ended
|
|
|
September 30,
2020
|
|
September 30,
2019
|
|
September 30,
2020
|
|
September 30,
2019
|
Income from
continuing operations
|
|
$
|
101
|
|
|
$
|
317
|
|
|
$
|
653
|
|
|
$
|
841
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization expense
|
|
71
|
|
|
88
|
|
|
283
|
|
|
226
|
|
Interest expense,
net
|
|
267
|
|
|
245
|
|
|
1,029
|
|
|
859
|
|
Income tax
provision
|
|
(25)
|
|
|
50
|
|
|
87
|
|
|
222
|
|
EBITDA
|
|
414
|
|
|
700
|
|
|
2,052
|
|
|
2,148
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Acquisition-related
expenses and adjustments (1)
|
|
13
|
|
|
(16)
|
|
|
31
|
|
|
169
|
|
Non-cash stock
compensation expense (2)
|
|
34
|
|
|
23
|
|
|
93
|
|
|
93
|
|
Refinancing costs
(3)
|
|
1
|
|
|
—
|
|
|
28
|
|
|
3
|
|
COVID-19 & 737 MAX
restructuring costs (4)
|
|
23
|
|
|
—
|
|
|
54
|
|
|
—
|
|
Other, net
(5)
|
|
13
|
|
|
—
|
|
|
20
|
|
|
6
|
|
Gross Adjustments to
EBITDA
|
|
84
|
|
|
7
|
|
|
226
|
|
|
271
|
|
EBITDA As
Defined
|
|
$
|
498
|
|
|
$
|
707
|
|
|
$
|
2,278
|
|
|
$
|
2,419
|
|
EBITDA As Defined,
Margin (6)
|
|
42.4
|
%
|
|
45.9
|
%
|
|
44.6
|
%
|
|
46.3
|
%
|
|
|
(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.
|
|
|
(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
restructuring costs related to the Company's cost reduction
measures in response to the COVID-19 pandemic ($22 million and $46
million for the thirteen week period and fiscal year ended
September 30, 2020, respectively) and the 737 MAX production rate
changes ($3 million for the fiscal year ended September 30, 2020.
None in the thirteen week period ended September 30, 2020). These
were costs related to the Company's actions to reduce its workforce
to align with customer demand. This also includes $1 million and $5
million for the thirteen week period and fiscal year ended
September 30, 2020, respectively, of incremental costs related to
the pandemic that are not expected to recur once the pandemic has
subsided and are clearly separable from normal operations (e.g.,
additional cleaning and disinfecting of facilities by contractors
above and beyond normal requirements, personal protective
equipment, etc.).
|
|
|
(5)
|
Primarily represents
foreign currency transaction gains or losses, payroll withholding
taxes related to special dividend and dividend equivalent payments
and stock option exercises, non-service related pension costs,
deferred compensation and gain or loss on sale of fixed
assets.
|
|
|
(6)
|
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, 2020
AND SEPTEMBER 30, 2019
|
(Amounts in
millions, except per share amounts)
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Thirteen Week
Periods Ended
|
|
Fiscal Year
Ended
|
|
|
September 30,
2020
|
|
September 30,
2019
|
|
September 30,
2020
|
|
September 30,
2019
|
Reported Earnings
Per Share
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
|
$
|
101
|
|
|
$
|
317
|
|
|
$
|
653
|
|
|
$
|
841
|
|
Less: Net income
attributable to noncontrolling interests
|
|
—
|
|
|
(2)
|
|
|
(1)
|
|
|
(2)
|
|
Net income from
continuing operations attributable to TD Group
|
|
101
|
|
|
315
|
|
|
652
|
|
|
839
|
|
Less: Special
dividends declared or paid on participating securities, including
dividend equivalent payments
|
|
—
|
|
|
(87)
|
|
|
(185)
|
|
|
(111)
|
|
|
|
101
|
|
|
228
|
|
|
467
|
|
|
728
|
|
(Loss) Income from
discontinued operations, net of tax
|
|
(19)
|
|
|
32
|
|
|
47
|
|
|
51
|
|
Net income applicable
to TD Group common stockholders - basic and diluted
|
|
$
|
82
|
|
|
$
|
260
|
|
|
$
|
514
|
|
|
$
|
779
|
|
Weighted-average
shares outstanding under the two-class method
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding
|
|
54.3
|
|
|
53.4
|
|
|
53.9
|
|
|
53.1
|
|
Vested options deemed
participating securities
|
|
3.0
|
|
|
2.9
|
|
|
3.4
|
|
|
3.2
|
|
Total shares for
basic and diluted earnings per share
|
|
57.3
|
|
|
56.3
|
|
|
57.3
|
|
|
56.3
|
|
Earnings per share
from continuing operations - basic and diluted
|
|
$
|
1.76
|
|
|
$
|
4.08
|
|
|
$
|
8.14
|
|
|
$
|
12.94
|
|
(Loss) Earnings per
share from discontinued operations - basic and diluted
|
|
(0.33)
|
|
|
0.55
|
|
|
0.82
|
|
|
0.90
|
|
Earnings per
share
|
|
$
|
1.43
|
|
|
$
|
4.63
|
|
|
$
|
8.96
|
|
|
$
|
13.84
|
|
Adjusted Earnings
Per Share
|
|
|
|
|
Income from
continuing operations
|
|
$
|
101
|
|
|
$
|
317
|
|
|
$
|
653
|
|
|
$
|
841
|
|
Gross adjustments to
EBITDA
|
|
84
|
|
|
7
|
|
|
226
|
|
|
271
|
|
Purchase accounting
backlog amortization
|
|
12
|
|
|
20
|
|
|
53
|
|
|
38
|
|
Tax adjustment
(1)
|
|
(31)
|
|
|
(28)
|
|
|
(103)
|
|
|
(122)
|
|
Adjusted net
income
|
|
$
|
166
|
|
|
$
|
316
|
|
|
$
|
829
|
|
|
$
|
1,028
|
|
Adjusted diluted
earnings per share under the two-class method
|
|
$
|
2.89
|
|
|
$
|
5.62
|
|
|
$
|
14.47
|
|
|
$
|
18.27
|
|
Diluted Earnings
Per Share to Adjusted Earnings Per Share
|
|
|
|
|
Diluted earnings per
share from continuing operations
|
|
$
|
1.76
|
|
|
$
|
4.08
|
|
|
$
|
8.14
|
|
|
$
|
12.94
|
|
Adjustments to
diluted earnings per share:
|
|
|
|
|
|
|
|
|
Inclusion of the dividend equivalent payments
|
|
—
|
|
|
1.54
|
|
|
3.22
|
|
|
1.97
|
|
Acquisition-related expenses
|
|
0.42
|
|
|
0.05
|
|
|
1.20
|
|
|
2.77
|
|
Non-cash
stock compensation expense
|
|
0.57
|
|
|
0.33
|
|
|
1.32
|
|
|
1.24
|
|
Refinancing costs
|
|
0.02
|
|
|
—
|
|
|
0.40
|
|
|
0.04
|
|
Change in income tax
provision due to excess tax benefits on stock
compensation
|
|
(0.48)
|
|
|
(0.40)
|
|
|
(0.89)
|
|
|
(0.79)
|
|
COVID-19
& 737 MAX restructuring costs
|
|
0.39
|
|
|
—
|
|
|
0.76
|
|
|
—
|
|
Other,
net
|
|
0.21
|
|
|
0.02
|
|
|
0.32
|
|
|
0.10
|
|
Adjusted earnings per
share
|
|
$
|
2.89
|
|
|
$
|
5.62
|
|
|
$
|
14.47
|
|
|
$
|
18.27
|
|
|
|
(1)
|
For the thirteen week
periods and fiscal years ended September 30, 2020 and 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 FISCAL
YEAR ENDED
|
|
SEPTEMBER 30, 2020
AND SEPTEMBER 30, 2019
|
|
|
|
(Amounts in
millions)
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
Fiscal Year
Ended
|
|
|
September 30,
2020
|
|
September 30,
2019
|
Net cash provided by
operating activities
|
|
$
|
1,213
|
|
|
$
|
1,015
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
Changes in assets and
liabilities, net of effects from acquisitions of
businesses
|
|
(99)
|
|
|
176
|
|
Interest expense, net
(1)
|
|
996
|
|
|
831
|
|
Income tax provision -
current
|
|
63
|
|
|
222
|
|
Non-cash stock
compensation expense (2)
|
|
(93)
|
|
|
(93)
|
|
Refinancing costs
(3)
|
|
(28)
|
|
|
(3)
|
|
EBITDA
|
|
2,052
|
|
|
2,148
|
|
Adjustments:
|
|
|
|
|
Acquisition-related
expenses (4)
|
|
31
|
|
|
169
|
|
Non-cash stock
compensation expense (2)
|
|
93
|
|
|
93
|
|
Refinancing costs
(3)
|
|
28
|
|
|
3
|
|
COVID-19 & 737 MAX
restructuring costs (5)
|
|
54
|
|
|
—
|
|
Other, net
(6)
|
|
20
|
|
|
6
|
|
EBITDA As
Defined
|
|
$
|
2,278
|
|
|
$
|
2,419
|
|
|
|
(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)
|
Represents
restructuring costs related to the Company's cost reduction
measures in response to the COVID-19 pandemic ($46 million) and the
737 MAX production rate changes ($3 million). These were costs
related to the Company's actions to reduce its workforce to align
with customer demand. This also includes $5 million of incremental
costs related to the pandemic that are not expected to recur once
the pandemic has subsided and are clearly separable from normal
operations (e.g., additional cleaning and disinfecting of
facilities by contractors above and beyond normal requirements,
personal protective equipment, etc.).
|
|
|
(6)
|
Primarily represents
foreign currency transaction gain or loss, payroll withholding
taxes related to special dividend and 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)
|
|
|
|
|
|
|
September 30,
2020
|
|
September 30,
2019
|
Cash and cash
equivalents
|
|
$
|
4,717
|
|
|
$
|
1,467
|
|
Trade accounts
receivable - net
|
|
720
|
|
|
1,068
|
|
Inventories -
net
|
|
1,283
|
|
|
1,233
|
|
Current portion of
long-term debt
|
|
276
|
|
|
80
|
|
Short-term
borrowings-trade receivable securitization facility
|
|
349
|
|
|
350
|
|
Accounts
payable
|
|
218
|
|
|
276
|
|
Accrued current
liabilities
|
|
773
|
|
|
675
|
|
Long-term
debt
|
|
19,384
|
|
|
16,469
|
|
Total TD Group
stockholders' deficit
|
|
(3,972)
|
|
|
(2,894)
|
|
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