Slide 1: FY 2016 Second Quarter Earnings Conference Call
FY 2016 SECOND QUARTER EARNINGS CONFERENCE CALL May 10, 2016
Slide 2: Agenda
Agenda TransDigm Overview W. Nicholas Howley Chairman, President and CEO Highlights, Market Review, Operating W. Nicholas Howley Performance and Outlook Chairman, President and CEO Operations & Value Creation Kevin Stein COO - Power Financial Results Terrance Paradie Executive Vice President
Slide 3: Forward Looking Statements
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 future periods. These forward-looking statements are based on management’s current expectation
Slide 4: Special Notice Regarding Pro Forma and Non-GAAP Information
Special Notice Regarding Pro Forma and Non-GAAP Information This presentation sets forth certain pro forma financial information. This pro forma financial information gives effect to certain recently completed acquisitions. Such pro forma information is based on certain assumptions and adjustments a
Slide 5: TransDigm Overview
TransDigm Overview DISTINGUISHING CHARACTERISTICS Highly engineered aerospace components Significant aftermarket content Proprietary and sole source products High free cash flow Proprietary Pro Forma Revenues Pro Forma EBITDA Revenues (1) (Excluding Non-Aviation Segment) (1) As Defined (1) N
Slide 6: 2016 Q2 Financial Performance by Markets – Pro Forma
2016 Q2 Financial Performance by Markets – Pro Forma Highlights⁽¹⁾ Q2 Market Review – Pro Forma Revenues⁽¹⁾ Actual vs. Prior Year Q2 YTD Commercial OEM Commercial OEM: Flat Flat Commercial transport revenue up 2% YTD Biz jet and helicopter revenue down 6% YTD Commercial Aftermarket Commercial Af
Slide 7: Fiscal 2016 Outlook
Fiscal 2016 Outlook FY 2015 Pro Forma Sales Mix (1) Market FY 2016 Expected Growth 32% Commercial OEM Up Low to Mid Single-Digit % 38% Commercial Aftermarket Up Mid to High Single-Digit % 30% Defense Up Low Single-Digit % Assumptions Guidance Summary ($ in millions) Full year interest expense ≈ $4
Slide 8: Second Quarter 2016 Results
Second Quarter 2016 Results ($ in millions, except per share amounts) Thirteeen Week Periods Ended April 2, 2016 March 28, 2015 Revenue $796.8 $619.0 28.7% Increase Gross Profit $425.7 $341.6 1.8 Margin Point Decrease Margin % 53.4% 55.2% ● Dilutive impact from acquisitions ● Strength of our proprie
Slide 9: Liquidity & Taxes
Liquidity & Taxes ($ in millions) Cash Liquidity Q2 FY 2016 Net Debt to Pro 4/2/2016 FY 9/30/2015 Actual Forma EBITDA As Net Cash Provided by 4/2/2016 Defined Multiple Rate Operating Activities $269.2 $520.9 Cash $612 Capital Expenditures ($22.3) ($54.9) $550m revolver – L + 3.00% Free Cash Flow $24
Slide 10: Reconciliation of GAAP to Adjusted EPS - Guidance
Reconciliation of GAAP to Adjusted EPS - Guidance Twenty-Six Week Periods Full Year Guidance Thirteen Week Periods Ended Ended Mid-Point April 2, March 28, April 2, March 28, September 30, 2016 2015 2016 2015 2016 Earnings per share $ 2.47 $ 1.96 $ 4.44 $ 3.59 $ 10.01 Adjustments to earnings per sha
Slide 11: Appendix - Reconciliation of Net Income to EBITDA and EBITDA As Defined
Appendix - Reconciliation of Net Income to EBITDA and EBITDA As Defined ($ in thousands) Thirteen Week Twenty-Six Week Periods Ended Periods Ended April 2, March 28, April 2, March 28, 2016 2015 2016 2015 Net income $ 138,627 $ 110,894 $ 253,529 $ 206,427 Adjustments: Depreciation and amortization e
Slide 12: Appendix - Reconciliation of Reported EPS to Adjusted EPS
Appendix - Reconciliation of Reported EPS to Adjusted EPS ($ in thousands, except per share amounts) Thirteen Week Periods Ended Twenty-Six Week Periods Ended April 2, March 28, April 2, March 28, Reported Earnings Per Share 2016 2015 2016 2015 Net income $ 138,627 $ 110,894 $ 253,529 $ 206,427 Less
Slide 13: Appendix - Reconciliation of Net Cash Provided by Operating Activities to EBITDA
Appendix - Reconciliation of Net Cash Provided by Operating Activities to EBITDA and EBITDA As Defined ($ in thousands) Twenty-Six Week Periods Ended April 2, 2016 March 28, 2015 Net cash provided by operating activities $ 269,160 $ 182,916 Adjustments: Changes in assets and liabilities, net of effe