Slide 1: FY 2020 Q2 Earnings Call
FY 2020 Q2 Earnings Call May 5, 2020
Slide 2: Agenda
Agenda TransDigm Overview and Highlights Nick Howley Executive Chairman Operating Performance, Market Review Kevin Stein and Outlook President and CEO 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 (Includes Esterline)
TransDigm Overview (Includes Esterline) Distinguishing Characteristics Highly engineered aerospace components Significant aftermarket content Proprietary and sole source products High free cash flow Proprietary Revenues (1) Pro Forma Revenues (1) Pro Forma EBITDA As Defined (1) Non‐ Propriet
Slide 5: 2020 Q2 Financial Performance by Markets – Pro Forma (Includes Esterline)
2020 Q2 Financial Performance by Markets – Pro Forma (Includes Esterline) Highlights Q2 Review – Pro Forma Revenues⁽¹⁾ Actual vs. Prior Year 20% Biz Q2 YTD Jet/Heli Commercial OEM: 80% Com Commercial OEM: Down 3% Down 1% Transport Q2 ’20 Commercial Transport Revenue Down 6% Q2 ’20 Business Jet/H
Slide 6: Second Quarter 2020 Select Financial Results
Second Quarter 2020 Select Financial Results ($ in millions, except per share amounts) Q2 FY Q2 FY 2020 2019 Revenue $1,443 $1,168 23.5% Increase • Lower Esterline gross margins vs. legacy TDG Gross Profit $818 $650 1.0% Margin Increase • Legacy TDG business margins expanded Margin % 56.7% 55.7% • L
Slide 7: Misc. Financial
Misc. Financial ($ in millions) Cash Fiscal 2020 Current Misc. Financial Assumptions YTD Q2 FY 20 FY 19 Full year net interest expense: 3/28/20 9/30/19 ≈ $1.03 billion (includes new debt issuance) Net Cash Provided by $594 $1,029 Operating Activities Full year effective tax rate: Capital Expendi
Slide 8: Liquidity
Liquidity ($ in millions) Pro Forma Capital Structure Pro forma capitalization Actual Pro forma (1) ($ in millions) 3/28/20 Adj. 3/28/20 Rate Cash $2,668 $1,500 $4,168 FY20 Weighted $760mm revolver $200 – 200 L + 3.000% Average Interest $350mm AR securitization facility 350 – 350 L + 0.900% Rate Fir
Slide 9: Capital Structure Summary
Capital Structure Summary As of April 30, 2020 No financial maintenance covenants in place on any of TransDigm’s $20.2 billion of Secured and Unsecured Debt No maturity due on any term loans or bonds until July 2024 $760 million revolving credit facility; over $500 million available Drew $20
Slide 10: Debt Maturity Profile: Pro Forma to Include April Financing
Debt Maturity Profile: Pro Forma to Include April Financing Pro Forma Debt Maturity Profile – No Sizable Maturity Until July 2024 ($ in millions) $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0 2020 2021 2022 2023 2024 2025 2026 2027 Secured Term Loans Secured Notes Sr Sub Notes Note: $35
Slide 11: Appendix: Credit Agreement Highlights
Appendix: Credit Agreement Highlights Summary of Key Provisions in Credit Agreement TransDigm has no maintenance covenants in its existing Term Loan and Bond Indenture documents Only exception to this is that if the company should draw greater than 35% of its revolver, there is a Net Debt / EBIT
Slide 12: Appendix: Reconciliation of Net Income to EBITDA and EBITDA As Defined
Appendix: Reconciliation of Net Income to EBITDA and EBITDA As Defined ($ in millions) Thirteen Week Periods Ended Twenty‐Six Week Periods Ended March 28, 2020 March 30, 2019 March 28, 2020 March 30, 2019 Income from continuing operations $ 323 $ 200 $ 556 $ 396 Adjustments: Depreciation and amortiz
Slide 13: 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 Twenty‐Six Week Periods Ended Reported Earnings Per Share March 28, 2020 March 30, 2019 March 28, 2020 March 30, 2019 Income from continuing operations $ 323 $ 200 $ 556 $ 3
Slide 14: Appendix: Reconciliation of GAAP to Adjusted EPS
Appendix: Reconciliation of GAAP to Adjusted EPS Thirteen Week Periods Ended Twenty‐Six Week Periods Ended March 28, 2020 March 30, 2019 March 28, 2020 March 30, 2019 GAAP earnings per share from continuing operations $ 5.63 $ 3.56 $ 6.45 $ 6.61 Adjustments to earnings per share: Dividend equivalent
Slide 15: 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) Twenty‐Six Week Periods Ended March 28, 2020 March 30, 2019 Net cash provided by operating activities $ 594 $ 453 Adjustments: Changes in assets and liabilities, net of effects from