CLEVELAND, Nov. 16, 2021 /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, 2021.
Fourth quarter highlights include:
- Net sales of $1,279 million, up
9% from $1,173 million in the prior
year's quarter;
- Income from continuing operations of $209 million, up 107% from $101 million;
- Earnings per share from continuing operations of $3.58, up 103% from $1.76;
- EBITDA As Defined of $636
million, up 28% from $498
million;
- EBITDA As Defined margin of 49.7%, representing sequential
improvement;
- Adjusted earnings per share of $4.25, up 47% from $2.89 in the prior year's quarter; and
- Strong operating cash flow generation of $289 million.
Fiscal 2021 highlights include:
- Net sales of $4,798 million, down
6% from $5,103 million in the prior
fiscal year;
- Income from continuing operations of $681 million, up 4% from $653 million;
- Earnings per share from continuing operations of $10.41, up 28% from $8.14;
- EBITDA As Defined of $2,189
million, down 4% from $2,278
million;
- EBITDA As Defined margin of 45.6%, up 100 basis points from the
prior fiscal year; and
- Adjusted earnings per share of $12.13, down 16% from $14.47 in the prior fiscal year.
While the Company is not providing full financial guidance at
this time as a result of the continued disruption in our primary
commercial end markets, today's earnings call will include guidance
on select financial metrics for fiscal 2022 including EBITDA As
Defined margins, expected defense market revenue growth, tax rates,
and select other financial assumptions.
Quarter-to-Date Results
Net sales for the quarter increased 9.0%, or $106 million, to $1,279
million from $1,173 million in
the comparable quarter a year ago. Organic sales growth was
10.0%.
Income from continuing operations for the quarter increased
$108 million, or 106.9%, to
$209 million from $101 million in the comparable quarter a year
ago. The increase in income from continuing operations primarily
reflects the increase in net sales described above, favorable sales
mix and lower COVID-19 restructuring costs, partially offset by a
higher effective tax rate.
Adjusted net income for the quarter increased 49.4% to
$248 million, or $4.25 per share, from $166
million, or $2.89 per share,
in the comparable quarter a year ago.
EBITDA for the quarter increased 48.1% to $613 million from $414
million for the comparable quarter a year ago. EBITDA As
Defined for the quarter increased 27.7% to $636 million compared with $498 million in the comparable quarter a year
ago. EBITDA As Defined as a percentage of net sales for the quarter
was 49.7%, representing sequential improvement versus the third
fiscal quarter of 2021.
"Trends remain favorable for the recovery of the commercial
aerospace industry. Air traffic continues to improve globally,
along with vaccination rates. The recovery remains primarily driven
by domestic air travel, though international travel restrictions
are starting to soften in certain markets, which is encouraging,"
stated Kevin Stein, TransDigm
Group's President and Chief Executive Officer. "We continue to see
advancement in our commercial aftermarket revenues with another
quarter of sequential improvement. This recovery in our commercial
aftermarket revenues, along with our steady focus on our operating
strategy and management of our cost structure, has led to continued
sequential expansion of our EBITDA As Defined margin despite this
challenging commercial environment."
Year-to-Date Results
Fiscal 2021 net sales declined 6.0%, or $305 million, to $4,798
million from $5,103 million in
fiscal 2020. Organic sales declined 7.4%. Net acquisition and
divestiture sales growth was $75
million over the comparable prior year period.
Fiscal 2021 income from continuing operations was $681 million, an increase of 4.3% compared to
$653 million in fiscal 2020. The
increase in income from continuing operations primarily reflects
the net gain on sale recognized as a result of the divestitures
completed during fiscal 2021, a lower effective tax rate and
realization of our COVID-19 cost mitigation efforts, partially
offset by the decline in net sales described above, and higher
non-cash stock compensation expense and interest expense.
GAAP earnings per share were reduced in fiscal 2021 and 2020 by
$1.24 per share and $3.22 per share, respectively, as a result of
dividend equivalent payments made during each year. As a reminder,
GAAP earnings per share are reduced when TransDigm makes dividend
equivalent payments pursuant to the Company's stock option plans.
These dividend equivalent payments are made during the Company's
first fiscal quarter each year and also upon payment of any special
dividends.
Fiscal 2021 adjusted net income decreased 14.6% to $708 million, or $12.13 per share, from $829 million, or $14.47 per share, in fiscal 2020.
Fiscal 2021 EBITDA decreased 1.2% to $2,027 million from $2,052
million in fiscal 2020. EBITDA As Defined for the period
decreased 3.9% to $2,189 million
compared with $2,278 million in
fiscal 2020. EBITDA As Defined as a percentage of net sales for
fiscal 2021 was 45.6%.
The effective tax rate for the full-year fiscal 2021 was 4.7%
compared to 11.7% in fiscal 2020. The effective tax rate for fiscal
2021 was positively impacted by the release of the valuation
allowance applicable to the net interest deduction limitation
carryforward and the discrete impact of excess tax benefits
associated with share-based payments.
Mr. Stein continued, "I am very pleased with our teams'
performance throughout fiscal 2021. Although this year continued to
be significantly impacted by the disruption in the commercial
aerospace industry caused by the COVID-19 pandemic, we remained
diligent in driving value for our stakeholders. Encouraging
commercial air travel trends cause us to be optimistic for the
continued recovery of the commercial aerospace industry in the
upcoming year. Although uncertainty remains about the shape and
pace of recovery, we believe that in time the commercial aerospace
industry and our business will fully recover and expand into the
future. We look forward to fiscal 2022 and the opportunity to
create value for our stakeholders."
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 2022 Outlook
Given the considerable uncertainty around the extent and
duration of business disruptions related to the COVID-19 pandemic
and its impact on our primary commercial OEM and commercial
aftermarket end markets, the Company will not provide full fiscal
year 2022 guidance at this time. Information regarding fiscal 2022
EBITDA As Defined margins, expected defense market revenue growth,
tax rates, interest expense, capital expenditures and select
accounting information is included in the slide presentation
available for today's earnings call.
Earnings Conference Call
TransDigm Group will host a conference call for investors and
security analysts on November 16, 2021, beginning at
11:00 a.m., Eastern Time. To join the
call, dial (833) 397-0943 and enter the passcode 8669954.
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 8669954.
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, engineered audio, radio and antenna systems, specialized
lavatory components, seat belts and safety restraints, engineered
and customized interior surfaces and related components, advanced
sensor products, switches and relay panels, thermal protection and
insulation, lighting and control technology, parachutes, high
performance hoists, winches and lifting devices, and cargo loading,
handling and delivery systems.
Non-GAAP Supplemental Information
EBITDA, EBITDA As Defined, EBITDA As Defined Margin, adjusted
net income and adjusted earnings per share are non-GAAP financial
measures presented in this press release as supplemental
disclosures to net income and reported results. TransDigm Group
defines EBITDA as earnings before interest, taxes, depreciation and
amortization and defines EBITDA As Defined as EBITDA plus certain
non-operating items recorded as corporate expenses, including
non-cash compensation charges incurred in connection with TransDigm
Group's stock incentive plans, restructuring costs related to
TransDigm Group's cost reduction measures in response to the
COVID-19 pandemic, foreign currency gains and losses,
acquisition-integration costs, acquisition and divestiture
transaction-related expenses, and refinancing costs. COVID-19
restructuring costs represent actions taken by the Company to
reduce its workforce to align with customer demand, as well as
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). Acquisition and divestiture-related
costs represent accounting adjustments to inventory associated with
acquisitions of businesses and product lines that were charged to
cost of sales when the inventory was sold; costs incurred to
integrate acquired businesses and product lines into the Company's
operations, facility relocation costs and other acquisition-related
costs; transaction-related costs for both acquisitions and
divestitures comprising deal fees; legal, financial and tax
diligence expenses and valuation costs that are required to be
expensed as incurred and other acquisition accounting
adjustments. TransDigm Group defines adjusted net income as
net income plus purchase accounting backlog amortization expense,
effects from the sale on businesses, non-cash compensation charges
incurred in connection with TransDigm Group's stock incentive
plans, restructuring costs related to TransDigm Group's cost
reduction measures in response to the COVID-19 pandemic, foreign
currency gains and losses, acquisition-integration costs,
acquisition transaction-related expenses, and refinancing costs.
EBITDA As Defined Margin represents EBITDA As Defined as a
percentage of net sales. TransDigm Group defines adjusted diluted
earnings per share as adjusted net income divided by the total
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 U.S. GAAP and such financial
measures should not be considered as an alternative to net income,
operating income, earnings per share, cash flows from operating
activities or other measures of performance determined in
accordance with U.S. GAAP. In addition, TransDigm Group's
calculation of these non-GAAP financial measures may not be
comparable to the calculation of similarly titled measures reported
by other companies.
Although we use EBITDA and EBITDA As Defined as measures to
assess the performance of our business and for the other purposes
set forth above, the use of these non-GAAP financial measures as
analytical tools has limitations, and you should not consider any
of them in isolation, or as a substitute for analysis of our
results of operations as reported in accordance with U.S. GAAP.
Some of these limitations are:
- neither EBITDA nor EBITDA As Defined reflects the significant
interest expense, or the cash requirements, necessary to service
interest payments on our indebtedness;
- although depreciation and amortization are non-cash charges,
the assets being depreciated and amortized will often have to be
replaced in the future, and neither EBITDA nor EBITDA As Defined
reflects any cash requirements for such replacements;
- the omission of the substantial amortization expense associated
with our intangible assets further limits the usefulness of EBITDA
and EBITDA As Defined;
- neither EBITDA nor EBITDA As Defined includes the payment of
taxes, which is a necessary element of our operations; and
- EBITDA As Defined excludes the cash expense we have incurred to
integrate acquired businesses into our operations, which is a
necessary element of certain of our acquisitions.
Forward-Looking Statements
Statements in this press release that are not historical facts,
including statements under the heading "Fiscal 2022 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, natural disasters and climate
change-related events; 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; TransDigm Group's indebtedness; potential
environmental liabilities; liabilities arising in connection with
litigation; climate-related regulations; 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 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, 2021 and other
reports that TransDigm Group or its subsidiaries have filed with
the Securities and Exchange Commission. Except as required by law,
TransDigm Group undertakes no obligation to revise or update the
forward-looking statements contained in this press release.
Contact:
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Investor
Relations
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216-706-2945
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ir@transdigm.com
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TRANSDIGM GROUP
INCORPORATED
|
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
|
|
FOR THE THIRTEEN
WEEK PERIODS AND FISCAL YEARS ENDED
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Table
1
|
SEPTEMBER 30, 2021
AND SEPTEMBER 30, 2020
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|
(Amounts in
millions, except per share amounts)
|
|
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(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Thirteen Week
Periods Ended
|
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Fiscal Years
Ended
|
|
|
September 30,
2021
|
|
September 30,
2020
|
|
September 30,
2021
|
|
September 30,
2020
|
NET SALES
|
|
$
|
1,279
|
|
|
$
|
1,173
|
|
|
$
|
4,798
|
|
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$
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5,103
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COST OF
SALES
|
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554
|
|
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637
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|
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2,285
|
|
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2,456
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GROSS
PROFIT
|
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725
|
|
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536
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|
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2,513
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|
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2,647
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SELLING AND
ADMINISTRATIVE EXPENSES
|
|
154
|
|
|
182
|
|
|
685
|
|
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727
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AMORTIZATION OF
INTANGIBLE ASSETS
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36
|
|
|
41
|
|
|
137
|
|
|
169
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INCOME FROM
OPERATIONS
|
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535
|
|
|
313
|
|
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1,691
|
|
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1,751
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INTEREST
EXPENSE—NET
|
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261
|
|
|
267
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|
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1,059
|
|
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1,029
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REFINANCING
COSTS
|
|
1
|
|
|
1
|
|
|
37
|
|
|
28
|
|
OTHER
INCOME
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|
(14)
|
|
|
(31)
|
|
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(51)
|
|
|
(46)
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GAIN ON SALE OF
BUSINESSES—NET
|
|
—
|
|
|
—
|
|
|
(69)
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|
|
—
|
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INCOME FROM
CONTINUING OPERATIONS
BEFORE INCOME TAXES
|
|
287
|
|
|
76
|
|
|
715
|
|
|
740
|
|
INCOME TAX PROVISION
(BENEFIT)
|
|
78
|
|
|
(25)
|
|
|
34
|
|
|
87
|
|
INCOME FROM
CONTINUING OPERATIONS
|
|
209
|
|
|
101
|
|
|
681
|
|
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653
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(LOSS) INCOME FROM
DISCONTINUED
OPERATIONS, NET OF TAX
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—
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(19)
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|
|
—
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|
|
47
|
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NET INCOME
|
|
209
|
|
|
82
|
|
|
681
|
|
|
700
|
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LESS: NET INCOME
ATTRIBUTABLE TO
NONCONTROLLING INTERESTS
|
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—
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|
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—
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(1)
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(1)
|
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NET INCOME
ATTRIBUTABLE TO TD GROUP
|
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$
|
209
|
|
|
$
|
82
|
|
|
$
|
680
|
|
|
$
|
699
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NET INCOME APPLICABLE
TO TD GROUP
COMMON STOCKHOLDERS
|
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$
|
209
|
|
|
$
|
82
|
|
|
$
|
607
|
|
|
$
|
514
|
|
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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3.58
|
|
|
$
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1.76
|
|
|
$
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10.41
|
|
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$
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8.14
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(Loss) Earnings per
share from discontinued
operations—basic and diluted
|
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—
|
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(0.33)
|
|
|
—
|
|
|
0.82
|
|
Earnings per
share
|
|
$
|
3.58
|
|
|
$
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1.43
|
|
|
$
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10.41
|
|
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$
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8.96
|
|
Cash dividends paid
per common share
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
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32.50
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Weighted-average
shares outstanding:
|
|
|
|
|
|
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Basic and
diluted
|
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58.4
|
|
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57.3
|
|
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58.4
|
|
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57.3
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TRANSDIGM GROUP
INCORPORATED
|
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SUPPLEMENTAL
INFORMATION - RECONCILIATION OF EBITDA,
|
|
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EBITDA AS DEFINED
TO INCOME FROM CONTINUING OPERATIONS
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|
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FOR THE THIRTEEN
WEEK PERIODS AND FISCAL YEARS ENDED
|
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Table
2
|
SEPTEMBER 30, 2021
AND SEPTEMBER 30, 2020
|
|
(Amounts in
millions, except per share amounts)
|
|
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(Unaudited)
|
|
|
|
|
|
|
|
|
|
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Thirteen Week
Periods Ended
|
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Fiscal Years
Ended
|
|
|
September 30,
2021
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September 30,
2020
|
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September 30,
2021
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September 30,
2020
|
Income from
continuing operations
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$
|
209
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|
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$
|
101
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$
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681
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$
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653
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Adjustments:
|
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|
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Depreciation and
amortization expense
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65
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|
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71
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|
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253
|
|
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283
|
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Interest expense,
net
|
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261
|
|
|
267
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|
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1,059
|
|
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1,029
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Income tax provision
(benefit)
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78
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(25)
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34
|
|
|
87
|
|
EBITDA
|
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613
|
|
|
414
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|
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2,027
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|
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2,052
|
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Adjustments:
|
|
|
|
|
|
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Acquisition and
divestiture transaction-
related expenses and adjustments (1)
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11
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|
|
13
|
|
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35
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|
|
31
|
|
Non-cash stock
compensation expense (2)
|
|
23
|
|
|
34
|
|
|
129
|
|
|
93
|
|
Refinancing costs
(3)
|
|
1
|
|
|
1
|
|
|
37
|
|
|
28
|
|
COVID-19 pandemic
restructuring costs (4)
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|
—
|
|
|
23
|
|
|
40
|
|
|
54
|
|
Gain on sale of
businesses, net (5)
|
|
—
|
|
|
—
|
|
|
(69)
|
|
|
—
|
|
Other, net
(6)
|
|
(12)
|
|
|
13
|
|
|
(10)
|
|
|
20
|
|
Gross Adjustments to
EBITDA
|
|
23
|
|
|
84
|
|
|
162
|
|
|
226
|
|
EBITDA As
Defined
|
|
$
|
636
|
|
|
$
|
498
|
|
|
$
|
2,189
|
|
|
$
|
2,278
|
|
EBITDA As Defined,
Margin (7)
|
|
49.7
|
%
|
|
42.4
|
%
|
|
45.6
|
%
|
|
44.6
|
%
|
(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 for both
acquisitions and divestitures comprising deal fees; legal,
financial and tax due diligence expenses; and valuation costs that
are required to be expensed as incurred.
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(2)
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)
Represents restructuring costs related to the Company's cost
reduction measures in response to the COVID-19 pandemic ($36
million for the fiscal year ended September 30, 2021 and
$22 million and $46 million for the thirteen week period and
fiscal year ended September 30, 2020, respectively), and also
includes restructuring costs related to the 737 MAX production rate
change ($3 million for the fiscal year ended September 30,
2020). These are costs related to the Company's actions to reduce
its workforce and consolidate certain facilities to align with
customer demand. This also includes incremental costs related to
the pandemic for the fiscal year ended September 30, 2021 of $4
million and for the thirteen week period and fiscal year ended
September 30, 2020 of $1 million and $5 million, respectively,
which 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).
|
|
(5)
Represents the net gain on completed divestitures.
|
|
(6)
Primarily represents the gain on insurance proceeds from the Leach
International Europe facility fire, 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.
|
|
(7) The
EBITDA As Defined margin represents the amount of EBITDA As Defined
as a percentage of net 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, 2021
AND SEPTEMBER 30, 2020
|
|
(Amounts in
millions, except per share amounts)
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Thirteen Week
Periods Ended
|
|
Fiscal Years
Ended
|
|
|
September 30,
2021
|
|
September 30,
2020
|
|
September 30,
2021
|
|
September 30,
2020
|
Reported Earnings
Per Share
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
|
$
|
209
|
|
|
$
|
101
|
|
|
$
|
681
|
|
|
$
|
653
|
|
Less: Net income
attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
(1)
|
|
|
(1)
|
|
Net income from
continuing operations attributable to TD
Group
|
|
209
|
|
|
101
|
|
|
680
|
|
|
652
|
|
Less: Special
dividends declared or paid on participating
securities, including dividend equivalent payments
|
|
—
|
|
|
—
|
|
|
(73)
|
|
|
(185)
|
|
(Loss) income from
discontinued operations, net of tax
|
|
—
|
|
|
(19)
|
|
|
—
|
|
|
47
|
|
Net income applicable
to TD Group common stockholders -
basic and diluted
|
|
$
|
209
|
|
|
$
|
82
|
|
|
$
|
607
|
|
|
$
|
514
|
|
Weighted-average
shares outstanding under the two-
class method
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding
|
|
55.1
|
|
|
54.3
|
|
|
54.8
|
|
|
53.9
|
|
Vested options deemed
participating securities
|
|
3.3
|
|
|
3.0
|
|
|
3.6
|
|
|
3.4
|
|
Total shares for
basic and diluted earnings per share
|
|
58.4
|
|
|
57.3
|
|
|
58.4
|
|
|
57.3
|
|
Earnings per share
from continuing operations—basic and
diluted
|
|
$
|
3.58
|
|
|
$
|
1.76
|
|
|
$
|
10.41
|
|
|
$
|
8.14
|
|
(Loss) Earnings per
share from discontinued operations—
basic and diluted
|
|
—
|
|
|
(0.33)
|
|
|
—
|
|
|
0.82
|
|
Earnings per
share
|
|
$
|
3.58
|
|
|
$
|
1.43
|
|
|
$
|
10.41
|
|
|
$
|
8.96
|
|
Adjusted Earnings
Per Share
|
|
|
|
|
Income from
continuing operations
|
|
$
|
209
|
|
|
$
|
101
|
|
|
$
|
681
|
|
|
$
|
653
|
|
Gross adjustments to
EBITDA
|
|
23
|
|
|
84
|
|
|
162
|
|
|
226
|
|
Purchase accounting
backlog amortization
|
|
4
|
|
|
12
|
|
|
11
|
|
|
53
|
|
Tax adjustment
(1)
|
|
12
|
|
|
(31)
|
|
|
(146)
|
|
|
(103)
|
|
Adjusted net
income
|
|
$
|
248
|
|
|
$
|
166
|
|
|
$
|
708
|
|
|
$
|
829
|
|
Adjusted diluted
earnings per share under the two-class
method
|
|
$
|
4.25
|
|
|
$
|
2.89
|
|
|
$
|
12.13
|
|
|
$
|
14.47
|
|
Diluted Earnings
Per Share to Adjusted Earnings Per
Share
|
|
|
|
|
Diluted earnings per
share from continuing operations
|
|
$
|
3.58
|
|
|
$
|
1.76
|
|
|
$
|
10.41
|
|
|
$
|
8.14
|
|
Adjustments to diluted
earnings per share:
|
|
|
|
|
|
|
|
|
Inclusion
of the dividend and dividend equivalent
payments
|
|
—
|
|
|
—
|
|
|
1.24
|
|
|
3.22
|
|
Acquisition and divestiture transaction-related expenses
and adjustments
|
|
0.15
|
|
|
0.42
|
|
|
0.49
|
|
|
1.20
|
|
Non-cash
stock compensation expense
|
|
0.32
|
|
|
0.57
|
|
|
1.76
|
|
|
1.32
|
|
Refinancing costs
|
|
0.01
|
|
|
0.02
|
|
|
0.51
|
|
|
0.40
|
|
Tax adjustment on
income from continuing operations
before taxes (1)
|
|
0.32
|
|
|
(0.48)
|
|
|
(1.90)
|
|
|
(0.89)
|
|
COVID-19
pandemic restructuring costs
|
|
—
|
|
|
0.39
|
|
|
0.54
|
|
|
0.76
|
|
Gain on sale of
businesses, net
|
|
—
|
|
|
—
|
|
|
(0.94)
|
|
|
—
|
|
Other,
net
|
|
(0.13)
|
|
|
0.21
|
|
|
0.02
|
|
|
0.32
|
|
Adjusted earnings per
share
|
|
$
|
4.25
|
|
|
$
|
2.89
|
|
|
$
|
12.13
|
|
|
$
|
14.47
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) For
the thirteen week periods and fiscal years ended September 30, 2021
and 2020, 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 release of the
valuation allowance applicable to the net interest deduction
limitation carryforward and the discrete impact of excess tax
benefits on stock option exercises.
|
TRANSDIGM GROUP
INCORPORATED
|
|
|
SUPPLEMENTAL
INFORMATION - RECONCILIATION OF NET CASH
|
|
|
PROVIDED BY
OPERATING ACTIVITIES TO EBITDA,
|
|
|
EBITDA AS
DEFINED
|
|
|
FOR THE FISCAL
YEARS ENDED
|
|
Table
4
|
SEPTEMBER 30, 2021
AND SEPTEMBER 30, 2020
|
|
(Amounts in
millions)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
Fiscal Years
Ended
|
|
|
September 30,
2021
|
|
September 30,
2020
|
Net cash provided by
operating activities
|
|
$
|
913
|
|
|
$
|
1,213
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
Changes in assets and
liabilities, net of effects from acquisitions and
sales of businesses
|
|
97
|
|
|
(168)
|
|
Interest expense, net
(1)
|
|
1,059
|
|
|
1,029
|
|
Income tax (benefit)
provision - current
|
|
—
|
|
|
63
|
|
Loss contract
amortization
|
|
55
|
|
|
36
|
|
Non-cash stock
compensation expense (2)
|
|
(129)
|
|
|
(93)
|
|
Refinancing costs
(3)
|
|
(37)
|
|
|
(28)
|
|
Gain on sale of
businesses, net (4)
|
|
69
|
|
|
—
|
|
EBITDA
|
|
2,027
|
|
|
2,052
|
|
Adjustments:
|
|
|
|
|
Acquisition and
divestiture transaction-related expenses and
adjustments (5)
|
|
35
|
|
|
31
|
|
Non-cash stock
compensation expense (2)
|
|
129
|
|
|
93
|
|
Refinancing costs
(3)
|
|
37
|
|
|
28
|
|
COVID-19 pandemic
restructuring costs (6)
|
|
40
|
|
|
54
|
|
Gain on sale of
businesses, net (4)
|
|
(69)
|
|
|
—
|
|
Other, net
(7)
|
|
(10)
|
|
|
20
|
|
EBITDA As
Defined
|
|
$
|
2,189
|
|
|
$
|
2,278
|
|
(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 the net gain on
completed divestitures.
|
|
(5)
Represents accounting adjustments to inventory associated with
acquisitions of businesses and product lines that were charged to
cost of sales when inventory was sold; costs incurred to integrate
acquired businesses and product lines into TD Group's operations,
facility relocation costs and other acquisition-related costs;
transaction-related costs for both acquisitions and divestitures
comprising deal fees; legal, financial and tax due diligence
expenses and valuation costs that are required to be expensed as
incurred.
|
|
(6) Represents restructuring costs
related to the Company's cost reduction measures in response to the
COVID-19 pandemic for the fiscal years ended September 30, 2021 and
2020 of $36 million and $46 million, respectively, and
also includes restructuring costs related to the 737 MAX production
rate change for the fiscal year ended September 30, 2020 of
$3 million. These are costs related to the Company's actions
to reduce its workforce and consolidate certain facilities to align
with customer demand. This also includes incremental costs related
to the pandemic for the fiscal years ended September 30, 2021 and
2020 of $4 million and $5 million, respectively, which
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).
|
|
(7) Primarily represents the gain on
insurance proceeds from the Leach International Europe facility
fire, 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,
2021
|
|
September 30,
2020
|
Cash and cash
equivalents
|
|
$
|
4,787
|
|
|
$
|
4,717
|
|
Trade accounts
receivable - net
|
|
791
|
|
|
720
|
|
Inventories -
net
|
|
1,185
|
|
|
1,283
|
|
Current portion of
long-term debt
|
|
277
|
|
|
276
|
|
Short-term
borrowings-trade receivable securitization facility
|
|
349
|
|
|
349
|
|
Accounts
payable
|
|
227
|
|
|
218
|
|
Accrued and other
current liabilities
|
|
810
|
|
|
773
|
|
Long-term
debt
|
|
19,372
|
|
|
19,384
|
|
Total TD Group
stockholders' deficit
|
|
(2,916)
|
|
|
(3,972)
|
|
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SOURCE TransDigm Group Inc.