Transdigm Group Inc. · NYSE:TDG
Transdigm — Q1 2023 Earnings Presentation
16 slides from Transdigm's earnings presentation, Feb 7, 2023
Slide 1: FY 2023 Q1 Earnings Call
FY 2023 Q1 Earnings Call February 7, 2023
Slide 2: Agenda
Agenda TransDigm Overview, Highlights and Outlook Kevin Stein President and CEO Market Review Jorge L. Valladares III COO Operating Performance and Financial Results Mike Lisman CFO Q&A 1
Slide 3: Forward Looking Statements & Special Notice Regarding Pro Forma and Non-GAAP Information
Forward Looking Statements & Special Notice Regarding Pro Forma and Non‐GAAP Information FORWARD LOOKING STATEMENTS This presentation contains forward‐looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including information regarding our guidance for futur
Slide 4: TransDigm Overview
TransDigm Overview Distinguishing Characteristics Highly engineered aerospace components Significant aftermarket content Proprietary products High free cash flow Proprietary Revenues (1) Pro Forma Revenues (1) Pro Forma EBITDA As Defined (1) Non‐ Proprietary Comm OEM 27% OEM Defense 42% Prop
Slide 5: 2023 Q1 Financial Performance by Markets – Pro Forma
2023 Q1 Financial Performance by Markets – Pro Forma Highlights Q1 Review – Pro Forma Revenues⁽¹⁾ Actual vs. Prior Year 25% Biz Jet/Heli Q1 Commercial OEM: Q1 ’23 Commercial Transport Revenue Up 17% Commercial OEM: Up 20% 75% Com Transport Q1 ’23 Business Jet/Helicopter Revenue Up 27% Q1 ’23 B
Slide 6: First Quarter 2023 Select Financial Results
First Quarter 2023 Select Financial Results ($ in millions, except per share amounts) Q1 FY Q1 FY 2023 2022 Revenue $1,397 $1,194 17% Increase Gross Profit $793 $661 • Favorable Aftermarket vs. OEM sales mix 56.8% 55.4% 1.4% • Fixed overhead spread over higher production volumes SG&A $169 $170 • Con
Slide 7: Fiscal 2023 Outlook
Fiscal 2023 Outlook Market Growth Assumptions FY 2022 Pro FY 2023 Expected Forma Sales Mix (1) Market Growth 27% Commercial OEM Up Mid-Teens % Range 31% Commercial Aftermarket Up High-Teens % Range 42% Defense Up LSD to MSD % Range Guidance Summary ($ in millions, except per share amounts) FY 23 Gui
Slide 8: Fiscal 2023 Select Financial Assumptions
Fiscal 2023 Select Financial Assumptions Select Financial Assumptions for Fiscal 2023 Prior Assumptions (Issued November 2022) Updated Assumptions Capital Expenditures $155 to $185 million No change Full Year Net Interest Expense ≈ $1.14 billion (includes $80 million of ≈ $1.16 billion (includes $80
Slide 9: Reconciliation of Fiscal 2023 Outlook
Reconciliation of Fiscal 2023 Outlook ($ in millions, except per share amounts) FY 2023 Guidance Midpoint Net income $ 1,120 Adjustments: Includes approx. $4m of Depreciation and amortization expense 266 backlog amortization Interest expense - net 1,160 Income tax provision 372 EBITDA 2,918 Adjustme
Slide 10: Reconciliation of GAAP EPS to Adjusted EPS - Guidance
Reconciliation of GAAP EPS to Adjusted EPS ‐ Guidance Full Year Guidance Thirteen Week Periods Ended Mid‐Point December 31, 2022 January 1, 2022 September 30, 2023 GAAP earnings per share from continuing operations $ 3.33 $ 1.96 $ 18.94 Adjustments to earnings per share: Dividend equivalent payments
Slide 11: Capital Structure
Capital Structure Pro Forma Capital Structure ($ in millions) Actual 12/31/22 Rate Cash $3,288 $810mm revolver – L + 2.50% $350mm AR securitization facility 350 S + 1.30% First lien term loan E due 2025 2,149 L + 2.25% First lien term loan F due 2025 3,410 L + 2.25% First lien term loan H due 2027 1
Slide 12: Interest Rate Sensitivity
Interest Rate Sensitivity • Interest rates on TDG’s $20Bn of gross Debt is over 75% fixed rate through fiscal year 2025 • Achieved via a combination of interest rate caps and swaps • Significantly reduces near-term exposure to any LIBOR rate increases $ in millions Current FY 23 Assumptions LIBOR %
Slide 13: Debt Maturity Profile
Debt Maturity Profile Debt Maturity Profile ($MM) $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0 2023 2024 2025 2026 2027 2028 2029 Secured Term Loans Secured Notes Sr Sub Notes Note: $350M AR Securitization renews annually in July 12
Slide 14: Appendix: Reconciliation of Income from Continuing Operations to EBITDA and EBITDA As Defined
Appendix: Reconciliation of Income from Continuing Operations to EBITDA and EBITDA As Defined Thirteen Week Periods Ended ($ in millions) December 31, 2022 January 1, 2022 Income from continuing operations $ 229 $ 163 Adjustments: Depreciation and amortization expense 63 65 Interest expense, net 286
Slide 15: Appendix: Reconciliation of Reported EPS to Adjusted EPS
Appendix: Reconciliation of Reported EPS to Adjusted EPS ($ in millions, except per share amounts) Thirteen Week Periods Ended Reported Earnings Per Share December 31, 2022 January 1, 2022 Income from continuing operations $ 229 $ 163 Less: Net income attributable to noncontrolling interests (1) (1)
Slide 16: Appendix: Reconciliation of Net Cash Provided by Operating Activities to EBITDA and EBITDA As Defined
Appendix: Reconciliation of Net Cash Provided by Operating Activities to EBITDA and EBITDA As Defined ($ in millions) Thirteen Week Periods Ended December 31, 2022 January 1, 2022 Net cash provided by operating activities $ 377 $ 279 Adjustments: Changes in assets and liabilities, net of effects fro