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TransDigm Group Reports Fiscal 2018 Third Quarter Results

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TransDigm Group Reports Fiscal 2018 Third Quarter Results

PR Newswire

CLEVELAND, Aug. 7, 2018 /PRNewswire/ -- TransDigm Group Incorporated (NYSE:TDG), a leading global designer, producer and supplier of highly engineered aircraft components, today reported results for the third quarter ended June 30, 2018.

Highlights for the third quarter include:

  • Net sales of $980.7 million, up 9.2% from $897.7 million;
  • Net income from continuing operations of $217.4 million, up 28.0% from $169.8 million;
  • Earnings per share from continuing operations of $3.91, up 26.5% from $3.09;
  • EBITDA As Defined of $487.1 million, up 8.8% from $447.6 million;
  • Adjusted earnings per share of $4.01, up 19.0% from $3.37; and
  • Revisions to fiscal 2018 financial guidance.

Net sales for the quarter rose 9.2%, or $83.0 million, to $980.7 million from $897.7 million in the comparable quarter a year ago. Organic sales growth was 4.4%.  

Net income from continuing operations for the quarter rose 28.0% to $217.4 million, or $3.91 per share, compared to $169.8 million, or $3.09 per share, in the comparable quarter a year ago. The increase in net income primarily reflects the increase in net sales described above, lower effective tax rate and improvements to our operating margin resulting from the the strength of our proprietary products and continued productivity efforts. This growth in net income was partially offset by higher interest expense.

Adjusted net income for the quarter rose 20.8% to $223.2 million, or $4.01 per share, from $184.7 million, or $3.37 per share, in the comparable quarter a year ago.  Adjusted earnings per share in the current fiscal year includes $0.42 of favorable impact from the enactment of tax reform. Excluding this favorable tax impact, current earnings per share of $3.59 increased 6.5% over the prior year.

EBITDA for the quarter increased 10.1% to $467.0 million from $424.4 million for the comparable quarter a year ago.  EBITDA As Defined for the period increased 8.8% to $487.1 million compared with $447.6 million in the comparable quarter a year ago.  EBITDA As Defined as a percentage of net sales for the quarter was 49.7%.

"We are pleased with our operating results for both the fiscal third quarter and year-to-date periods," stated Kevin Stein, TransDigm Group's President and Chief Executive Officer. "Third quarter revenue in each of our major markets of commercial OEM, commercial aftermarket and defense grew sequentially and over the prior year. Ongoing overall trends supporting these end markets continue to be positive. Our smaller sub-markets of business jets and helicopters reported strong revenue growth in the current quarter in both commercial OEM and aftermarket, an encouraging sign after prolonged weakness. Despite the dilutive impact of recent acquisitions, our EBITDA as Defined margin of 49.7% remained strong, highlighting our continued focus on our value based operating strategy."

During the quarter, TransDigm successfully raised $1.2 billion of incremental debt including $500 million aggregate principal amount of 6.875% senior subordinated notes due 2026, and $700 million in additional tranche E term loans.  The proceeds were used to replenish the cash used to fund the purchase price for its acquisitions of the Kirkhill elastomers business and Extant Components Group Holdings, Inc. This cash and the remainder of the net proceeds will be used for general corporate purposes, including potential future acquisitions, dividends or repurchases under its stock repurchase program. TransDigm also repriced $5.1 billion of existing tranche E and F term loans to opportunistically lower the associated interest rates.

Subsequent to the quarter, on July 13, 2018, TransDigm completed the acquisition of Skandia Inc. from Graycliff Partners LP for approximately $84 million, including the assumption of debt. Skandia is a leading provider of highly engineered foam, foam fabrication, flammability testing and acoustic solutions for the business jet market.

Year-to-Date Results

Net sales for the thirty-nine week period ended June 30, 2018 rose 7.0% to $2,761.7 million from $2,580.4 million in the comparable period last year.  Organic net sales growth was 4.7%.

Net income from continuing operations for the thirty-nine week period ended June 30, 2018 increased 64.5% to $731.2 million, or $12.14 per share, compared with $444.4 million, or $6.25 per share, in the comparable period last year. The current thirty-nine week period was positively impacted by a lower effective tax rate due to tax reform.  The current effective tax rate was a benefit of 3.9% compared to a provision of 24.7% for the comparable period of fiscal 2017. The balance of the increase in net income primarily reflects growth in net sales described above, lower refinancing costs and lower acquisition-related costs, as well as improvements to our operating margin resulting from the strength of our proprietary products and continued productivity efforts. This growth in net income was partially offset by higher interest expense due to an increase in the level of weighted average outstanding borrowings to $12.5 billion from $11.3 billion outstanding in the comparable period last year.

Earnings per share were reduced in both 2018 and 2017 by $1.01 per share and $1.72 per share, respectively, representing dividend equivalent payments made during each year.

Net loss from discontinued operations for the thirty-nine week period ended June 30, 2018 was $2.9 million, or $0.05 loss per share, compared to $1.0 million, or $0.02 loss per share in the comparable period a year ago.

Adjusted net income for the thirty-nine week period ended June 30, 2018 rose 49.9% to $747.1 million, or $13.44 per share, from $498.6 million, or $8.94 per share, in the comparable period a year ago.  Adjusted earnings per share in the current fiscal year includes $3.83 of favorable impact from the enactment of tax reform. Excluding this favorable tax impact, current earnings per share of $9.61 increased 7.5% over the prior year.

EBITDA for the thirty-nine week period ended June 30, 2018 increased 12.6% to $1,289.0 million from $1,145.0 million for the comparable period a year ago.  EBITDA As Defined for the period increased 8.1% to $1,351.8 million compared with $1,250.5 million in the comparable period a year ago.  EBITDA As Defined as a percentage of net sales for the period was 48.9%.

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 2018 Outlook

Mr. Stein continued, "We are raising the low-end and mid-point of our full year revenue and EBITDA As Defined guidance range to reflect our operating performance to date and expectations for the fiscal fourth quarter. At the mid-point, we are increasing our revenue guidance by $20 million, EBITDA as Defined guidance by $15 million, and are decreasing our adjusted earnings per share guidance by $0.06 per share. Our revised adjusted earnings per share guidance decrease primarily reflects the impact of additional interest expense from our recent financing activities."

Assuming no additional acquisitions, TransDigm now expects fiscal 2018 financial guidance to be as follows:

  • Net sales are anticipated to be in the range of $3,780 million to $3,820 million compared with $3,504 million in fiscal 2017;
  • Net income from continuing operations is anticipated to be in the range of $928 million to $946 million compared with $629 million in fiscal 2017;
  • Earnings per share from continuing operations are expected to be in the range of $15.68 to $16.00 per share based upon weighted average shares outstanding of 55.6 compared with $8.45 per share in fiscal 2017;
  • EBITDA As Defined is anticipated to be in the range of $1,860 million to $1,880 million compared with $1,711 million in fiscal 2017; and
  • Adjusted earnings per share are expected to be in the range of $17.45 to $17.77 per share compared with $12.38 per share in fiscal 2017.

Please see the attached table 6 for a reconciliation of EBITDA, EBITDA As Defined to net income and reported earnings per share to adjusted earnings per share guidance mid-point estimated for the fiscal year ending September 30, 2018. Additionally, please see the attached table 7 for comparison of the current fiscal year 2018 guidance versus the previously issued fiscal year 2018 guidance.

Earnings Conference Call

TransDigm Group will host a conference call for investors and security analysts on August 7, 2018, beginning at 11:00 a.m., Eastern Time. To join the call, dial (888) 558-9538 and enter the pass code 6682239.  International callers should dial (760) 666-3183 and use the same pass code. A live audio webcast can be accessed online at http://www.transdigm.com. A slide presentation will also be available for reference during the conference call; go to the investor relations page of our website and click on "Presentations."

The call will be archived on the website and available for replay at approximately 2:00 p.m., Eastern Time. A telephone replay will be available for one week by dialing (855) 859-2056 and entering the pass code 6682239.  International callers should dial (404) 537-3406 and use the same pass code.

About TransDigm Group

TransDigm Group, through its wholly-owned subsidiaries, is a leading global designer, producer and supplier of highly engineered aircraft components for use on nearly all commercial and military aircraft in service today. Major product offerings, substantially all of which are ultimately provided to end-users in the aerospace industry, include mechanical/electro-mechanical actuators and controls, ignition systems and engine technology, specialized pumps and valves, power conditioning devices, specialized AC/DC electric motors and generators, NiCad batteries and chargers, engineered latching and locking devices, rods and locking devices, engineered connectors and elastomers, databus and power controls, cockpit security components and systems, specialized cockpit displays, aircraft audio systems, specialized lavatory components, seat belts and safety restraints, engineered interior surfaces and related components, lighting and control technology, military personnel parachutes, high performance hoists, winches and lifting devices, and cargo loading, handling and delivery systems.

Non-GAAP Supplemental Information

EBITDA, EBITDA As Defined, EBITDA As Defined Margin, adjusted net income and adjusted earnings per share are non-GAAP financial measures presented in this press release as supplemental disclosures to net income and reported results. TransDigm Group defines EBITDA as earnings before interest, taxes, depreciation and amortization and defines EBITDA As Defined as EBITDA plus certain non-operating items, refinancing costs, acquisition-related costs, transaction-related costs and non-cash charges incurred in connection with certain employee benefit plans. TransDigm Group defines adjusted net income as net income plus purchase accounting backlog amortization expense, effects from the sale on businesses, refinancing costs, acquisition-related costs, transaction-related costs and non-cash charges incurred in connection with certain employee benefit plans. EBITDA As Defined Margin represents EBITDA As Defined as a percentage of net sales. TransDigm Group defines adjusted diluted earnings per share as adjusted net income divided by the total shares for basic and diluted earnings per share. For more information regarding the computation of EBITDA, EBITDA As Defined and adjusted net income and adjusted earnings per share, please see the attached financial tables.

TransDigm Group presents these non-GAAP financial measures because it believes that they are useful indicators of its operating performance. TransDigm Group believes that EBITDA is useful to investors because it is frequently used by securities analysts, investors and other interested parties to measure operating performance among companies with different capital structures, effective tax rates and tax attributes, capitalized asset values and employee compensation structures, all of which can vary substantially from company to company. In addition, analysts, rating agencies and others use EBITDA to evaluate a company's ability to incur and service debt. EBITDA As Defined is used to measure TransDigm Inc.'s compliance with the financial covenant contained in its credit facility. TransDigm Group's management also uses EBITDA As Defined to review and assess its operating performance, to prepare its annual budget and financial projections and to review and evaluate its management team in connection with employee incentive programs. Moreover, TransDigm Group's management uses EBITDA As Defined to evaluate acquisitions and as a liquidity measure. In addition, TransDigm Group's management uses adjusted net income as a measure of comparable operating performance between time periods and among companies as it is reflective of changes in pricing decisions, cost controls and other factors that affect operating performance.

None of EBITDA, EBITDA As Defined, EBITDA As Defined Margin, adjusted net income or adjusted earnings per share is a measurement of financial performance under GAAP and such financial measures should not be considered as an alternative to net income, operating income, earnings per share, cash flows from operating activities or other measures of performance determined in accordance with GAAP. In addition, TransDigm Group's calculation of these non-GAAP financial measures may not be comparable to the calculation of similarly titled measures reported by other companies.

Although we use EBITDA and EBITDA As Defined as measures to assess the performance of our business and for the other purposes set forth above, the use of these non-GAAP financial measures as analytical tools has limitations, and you should not consider any of them in isolation, or as a substitute for analysis of our results of operations as reported in accordance with GAAP. Some of these limitations are:

  • neither EBITDA nor EBITDA As Defined reflects the significant interest expense, or the cash requirements necessary to service interest payments, on our indebtedness;
  • although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and neither EBITDA nor EBITDA As Defined reflects any cash requirements for such replacements;
  • the omission of the substantial amortization expense associated with our intangible assets further limits the usefulness of EBITDA and EBITDA As Defined;
  • neither EBITDA nor EBITDA As Defined includes the payment of taxes, which is a necessary element of our operations; and
  • EBITDA As Defined excludes the cash expense we have incurred to integrate acquired businesses into our operations, which is a necessary element of certain of our acquisitions.

Forward-Looking Statements

Statements in this press release that are not historical facts, including statements under the heading "Fiscal 2018 Outlook," are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.Words such as "believe," "may," "will," "should," "expect," "intend," "plan," "predict," "anticipate," "estimate," or "continue" and other words and terms of similar meaning may identify forward-looking statements.

All forward-looking statements involve risks and uncertainties which could affect TransDigm Group's actual results and could cause its actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, TransDigm Group. These risks and uncertainties include but are not limited to: the sensitivity of our business to the number of flight hours that our customers' planes spend aloft and our customers' profitability, both of which are affected by general economic conditions; future geopolitical or worldwide events; cyber-security threats and natural disasters; our reliance on certain customers; the U.S. defense budget and risks associated with being a government supplier; failure to maintain government or industry approvals; failure to complete or successfully integrate acquisitions; our substantial indebtedness; potential environmental liabilities; increases in raw material costs, taxes and labor costs that cannot be recovered in product pricing; risks and costs associated with our international sales and operations; and other risk factors. Further information regarding the important factors that could cause actual results to differ materially from projected results can be found in TransDigm Group's Annual Report on Form 10-K and other reports that TransDigm Group or its subsidiaries have filed with the Securities and Exchange Commission. Except as required by law, TransDigm Group undertakes no obligation to revise or update the forward-looking statements contained in this press release.

Contact:


Liza Sabol



Director of Investor Relations



216-706-2945



ir@transdigm.com

 

TRANSDIGM GROUP INCORPORATED







CONDENSED CONSOLIDATED STATEMENTS OF INCOME





FOR THE THIRTEEN AND THIRTY-NINE WEEK PERIODS ENDED


Table 1

JUNE 30, 2018 AND JULY 1, 2017


(Amounts in thousands, except per share amounts)


(Unaudited)





Thirteen Week Periods Ended


Thirty-Nine Week Periods Ended



June 30, 2018


July 1, 2017


June 30, 2018


July 1, 2017

NET SALES


$

980,662



$

897,655



$

2,761,692



$

2,580,401


COST OF SALES


411,142



377,959



1,181,448



1,127,013


GROSS PROFIT


569,520



519,696



1,580,244



1,453,388


SELLING AND ADMINISTRATIVE EXPENSES


113,019



108,104



327,073



310,677


AMORTIZATION OF INTANGIBLE ASSETS


19,224



23,259



53,793



70,822


INCOME FROM OPERATIONS


437,277



388,333



1,199,378



1,071,889


INTEREST EXPENSE - NET


167,577



152,141



489,776



445,986


REFINANCING COSTS


4,159



345



5,910



35,936


INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES


265,541



235,847



703,692



589,967


INCOME TAX PROVISION


48,150



66,015



(27,550)



145,573


INCOME FROM CONTINUING OPERATIONS


$

217,391



$

169,832



$

731,242



$

444,394


LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX


(145)



(779)



(2,943)



(965)


NET INCOME


$

217,246



$

169,053



$

728,299



$

443,429


NET INCOME APPLICABLE TO COMMON STOCK


$

217,246



$

169,053



$

672,151



$

347,458


Net earnings per share:









Net earnings per share from continuing operations -  basic and diluted


$

3.91



$

3.09



$

12.14



$

6.25


Net loss per share from discontinued operations -
basic and diluted




(0.01)



(0.05)



(0.02)


Net earnings per share


$

3.91



$

3.08



$

12.09



$

6.23


Cash dividends paid per common share


$



$



$



$

24.00


Weighted-average shares outstanding:









Basic and diluted


55,597



54,890



55,598



55,773


 

 

TRANSDIGM GROUP INCORPORATED







SUPPLEMENTAL INFORMATION - RECONCILIATION OF EBITDA,



EBITDA AS DEFINED TO NET INCOME





FOR THE THIRTEEN AND THIRTY-NINE WEEK PERIODS ENDED


Table 2

JUNE 30, 2018 AND JULY 1, 2017


(Amounts in thousands, except per share amounts)






(Unaudited)











Thirteen Week Periods Ended


Thirty-Nine Week Periods Ended



June 30, 2018


July 1, 2017


June 30, 2018


July 1, 2017

Net income


$

217,246



$

169,053



$

728,299



$

443,429


Less: Loss from discontinued operations, net of tax (1)


(145)



(779)



(2,943)



(965)


Income from Continuing Operations


217,391



169,832



731,242



444,394


Adjustments:









Depreciation and amortization expense


33,925



36,367



95,534



109,076


Interest expense, net


167,577



152,141



489,776



445,986


Income tax provision


48,150



66,015



(27,550)



145,573


EBITDA


467,043



424,355



1,289,002



1,145,029


Adjustments:









Acquisition-related expenses and adjustments (2)


10,381



4,484



16,940



30,804


Non-cash stock compensation expense (3)


13,708



11,580



36,411



32,707


Refinancing costs (4)


4,159



345



5,910



35,936


Other, net (5)


(8,150)



6,824



3,534



5,982


Gross Adjustments to EBITDA


20,098



23,233



62,795



105,429


EBITDA As Defined


$

487,141



$

447,588



$

1,351,797



$

1,250,458


EBITDA As Defined, Margin (6)


49.7

%


49.9

%


48.9

%


48.5

%



(1) During the fourth quarter of 2017, the Company committed to disposing of Schroth in connection with the settlement of a Department of Justice investigation into the competitive effects of the acquisition. Therefore, Schroth was classified as held-for-sale beginning September 30, 2017. On January 26, 2018, the Company completed the sale of Schroth in a management buyout to a private equity fund and certain members of Schroth management for approximately $61.4 million, which includes a working capital adjustment of $0.3 million that was settled in July 2018.


(2) 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.


(3) Represents the compensation expense recognized by TD Group under our stock incentive plans.


(4) Represents costs expensed related to debt financing activities, including new issuances, extinguishments, refinancings and amendments to existing agreements.


(5) Primarily represents foreign currency transaction gain or loss, payroll withholding taxes related to dividend equivalent payments and stock option exercises and gain or loss on sale of fixed assets.  Prior to the fourth quarter of fiscal 2017, foreign currency transaction gain or loss other than related to intercompany loans was not included in the adjustments to EBITDA, as the foreign currency transaction gain or loss was immaterial during those periods.  Therefore, the prior periods presented herein were adjusted to conform to the current year presentation.


(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 AND THIRTY-NINE WEEK PERIODS ENDED


Table 3

JUNE 30, 2018 AND JULY 1, 2017


(Amounts in thousands, except per share amounts)




(Unaudited)











Thirteen Week Periods Ended


Thirty-Nine Week Periods Ended



June 30, 2018


July 1, 2017


June 30, 2018


July 1, 2017

Reported Earnings Per Share









Net income from continuing operations


$

217,391



$

169,832



$

731,242



$

444,394


Less: dividends on participating securities






(56,148)



(95,971)




217,391



169,832



675,094



348,423


Net loss from discontinued operations


(145)



(779)



(2,943)



(965)


Net income applicable to common stock -

basic and diluted


$

217,246



$

169,053



$

672,151



$

347,458


Weighted-average shares outstanding under the two-class method









Weighted-average common shares outstanding


52,470



51,932



52,241



52,718


Vested options deemed participating securities


3,127



2,958



3,357



3,055


Total shares for basic and diluted earnings per share


55,597



54,890



55,598



55,773


Net earnings per share from continuing operations -basic and diluted


$

3.91



$

3.09



$

12.14



$

6.25


Net loss per share from discontinued operations - basic and diluted




(0.01)



(0.05)



(0.02)


Basic and diluted earnings per share


$

3.91



$

3.08



$

12.09



$

6.23


Adjusted Earnings Per Share





Net income from continuing operations


$

217,391



$

169,832



$

731,242



$

444,394


Gross adjustments to EBITDA


20,098



23,233



62,795



105,429


Purchase accounting backlog amortization


2,024



6,667



3,108



21,162


Tax adjustment


(16,292)



(14,985)



(49,998)



(72,404)


Adjusted net income


$

223,221



$

184,747



$

747,147



$

498,581


Adjusted diluted earnings per share under the two-class method


$

4.01



$

3.37



$

13.44



$

8.94


Diluted Earnings Per Share to Adjusted Earnings Per Share





Diluted earnings per share from continuing operations


$

3.91



$

3.09



$

12.14



$

6.25


Adjustments to diluted earnings per share:









   Inclusion of the dividend equivalent payments






1.01



1.72


   Non-cash stock compensation expense


0.19



0.15



0.64



0.41


   Acquisition-related expenses


0.17



0.14



0.35



0.65


   Refinancing costs


0.06





0.10



0.45


   Reduction in income tax provision due to excess tax 
    benefits on stock compensation


(0.20)



(0.11)



(0.86)



(0.61)


   Other, net


(0.12)



0.10



0.06



0.07


   Adjusted earnings per share


4.01



3.37



13.44



8.94


Less: Estimated impact of tax reform


(0.42)





(3.83)




Adjusted earnings per share excluding tax reform


$

3.59



$

3.37



$

9.61



$

8.94


 

 

TRANSDIGM GROUP INCORPORATED





SUPPLEMENTAL INFORMATION - RECONCILIATION OF NET CASH


Table 4

PROVIDED BY OPERATING ACTIVITIES TO EBITDA,


EBITDA AS DEFINED


FOR THE THIRTY-NINE WEEK PERIODS ENDED


JUNE 30, 2018 AND JULY 1, 2017




(Amounts in thousands)





(Unaudited)







Thirty-Nine Week Periods Ended



June 30, 2018


July 1, 2017

Net cash provided by operating activities


$

690,910



$

555,216







Adjustments:





Changes in assets and liabilities, net of effects from acquisitions of businesses


27,947



82,594


Interest expense - net (1)


473,597



430,456


Income tax provision - current


139,233



145,303


Non-cash stock compensation expense (2)


(36,411)



(32,707)


Refinancing costs (4)


(5,910)



(35,936)


EBITDA from discontinued operations (6)


(364)



103


EBITDA


1,289,002



1,145,029


Adjustments:





Acquisition-related expenses (3)


16,940



30,804


Non-cash stock compensation expense (2)


36,411



32,707


Refinancing costs (4)


5,910



35,936


Other, net (5)


3,534



5,982


EBITDA As Defined


$

1,351,797



$

1,250,458




(1) Represents interest expense excluding the amortization of debt issue costs and premium and discount on debt.


(2) Represents the compensation expense recognized by TD Group under our stock incentive plans.


(3) Represents accounting adjustments to inventory associated with acquisitions of businesses and product lines that were charged to cost of sales when the inventory was sold; costs incurred to integrate acquired businesses and product lines into TD Group's operations, facility relocation costs and other acquisition-related costs; transaction-related costs comprising deal fees; legal, financial and tax due diligence expenses and valuation costs that are required to be expensed as incurred.


(4) Represents costs expensed related to debt financing activities, including new issuances, extinguishments, refinancings and amendments to existing agreements.


(5) Primarily represents foreign currency transaction gain or loss, payroll withholding taxes related to dividend equivalent payments and stock option exercises and gain or loss on sale of fixed assets.  Prior to the fourth quarter of fiscal 2017, foreign currency transaction gain or loss other than related to intercompany loans was not included in the adjustments to EBITDA, as the foreign currency transaction gain or loss was immaterial during those periods.  Therefore, the prior periods presented herein were adjusted to conform to the current year presentation.


(6) During the fourth quarter of 2017, the Company committed to disposing of Schroth in connection with the settlement of a Department of Justice investigation into the competitive effects of the acquisition. Therefore, Schroth was classified as held-for-sale beginning September 30, 2017. On January 26, 2018, the Company completed the sale of Schroth in a management buyout to a private equity fund and certain members of Schroth management for approximately $61.4 million, which includes a working capital adjustment of $0.3 million that was settled in July 2018.

 

 

TRANSDIGM GROUP INCORPORATED




SUPPLEMENTAL INFORMATION - BALANCE SHEET DATA


Table 5

(Amounts in thousands)




(Unaudited)







June 30, 2018


September 30, 2017

Cash and cash equivalents


$

1,853,373



$

650,561


Trade accounts receivable - net


658,168



636,127


Inventories - net


815,251



730,681


Current portion of long-term debt


75,793



69,454


Short-term borrowings-trade receivable securitization facility


299,956



299,587


Accounts payable


155,937



148,761


Accrued current liabilities


285,484



335,888


Long-term debt


12,516,010



11,393,620


Total stockholders' deficit


(2,098,480)



(2,951,204)


 

 

TRANSDIGM GROUP INCORPORATED



SUPPLEMENTAL INFORMATION - RECONCILIATION OF EBITDA,



EBITDA AS DEFINED TO NET INCOME AND REPORTED EARNINGS



PER SHARE TO ADJUSTED EARNINGS PER SHARE GUIDANCE MID-POINT

Table 6


FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2018


(Amounts in millions, except per share amounts)


(Unaudited)






Year Ended




September 30,




2018 (guidance




mid-point)


Net income


$

937



Adjustments:




Depreciation and amortization expense


131



Interest expense - net


670



Income tax provision


39



EBITDA


1,777



Adjustments:




Acquisition-related expenses and adjustments (1) and other, net (1)


35



Non-cash stock compensation expense (1)


52



Refinancing costs (1)


6



Gross Adjustments to EBITDA


93



EBITDA As Defined


$

1,870



EBITDA As Defined, Margin (1)


49.2

%






Earnings per share


$

15.84



Adjustments to earnings per share:




Inclusion of the dividend equivalent payments


1.01



Non-cash stock compensation expense


0.85



Acquisition-related expenses and adjustments and other, net


0.67



Refinancing costs


0.10



Reduction in income tax provision due to excess tax benefits on stock compensation


(0.86)



Adjusted earnings per share


$

17.61







Weighted-average shares outstanding


55.6







(1) Refer to Table 2 above for definitions of Non-GAAP measurement adjustments.




 

 

TRANSDIGM GROUP INCORPORATED



SUPPLEMENTAL INFORMATION



CURRENT FISCAL YEAR 2018 GUIDANCE VERSUS PRIOR FISCAL YEAR 2018 GUIDANCE

Table 7


(Amounts in millions, except per share amounts)



(Unaudited)








Current


Prior





Fiscal Year 2018


Fiscal Year 2018





Guidance


Guidance


Change at



Issued August 7, 2018


Issued May 1, 2018


Mid-Point


Sales

$3,780 to $3,820


$3,740 to $3,820


$20









GAAP Net Income from Continuing Operations

$928 to $946


$902 to $938


$17









GAAP Earnings Per Share from Continuing Operations

$15.68 to $16.00


$15.22 to $15.86


$0.30









EBITDA As Defined

$1,860 to $1,880


$1,830 to $1,880


$15









Adjusted Earnings Per Share

$17.45 to $17.77


$17.35 to $17.99


$(0.06)









Weighted-Average Shares Outstanding

55.6


55.6



 

Cision View original content:http://www.prnewswire.com/news-releases/transdigm-group-reports-fiscal-2018-third-quarter-results-300692738.html

SOURCE TransDigm Group Incorporated

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