Slide 1: FY 2014 First Quarter Earnings Call
FY 2014 FIRST QUARTER EARNINGS CALL February 4, 2014
Slide 2: Agenda
Agenda TransDigm Overview W. Nicholas Howley Chairman and CEO Highlights, Market Review, Operating W. Nicholas Howley Performance and Outlook Chairman and CEO Operations and Value Creation Raymond F. Laubenthal President and COO Financial Results Gregory Rufus Executive Vice President and CF
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 Pro Forma Revenues Proprietary Pro Forma EBITDA (Excluding Non- Revenues (1) As Defined (1) Aviation Segment) ⁽¹⁾
Slide 6: 2014 Q1 Financial Performance by Markets – Pro Forma
2014 Q1 Financial Performance by Markets – Pro Forma Highlights⁽¹⁾ Q1 Market Review – Pro Forma Revenues⁽¹⁾ Actual vs. Prior Year Q1 2014 Commercial OEM Driven by commercial transport OEM Commercial OEM: Up 10.5% Business jet revenues ≈ flat Commercial Aftermarket: Commercial Aftermarket: Up
Slide 7: Fiscal 2014 Outlook
Fiscal 2014 Outlook FY 2012 Pro Forma Sales Mix (1) Market Expected Growth⁽¹⁾ 33% Commercial OEM Up High Single-Digit % 41% Commercial Aftermarket Up High Single-Digit % 26% Defense Flat Assumptions Guidance Summary ($ in millions) Worldwide RPM growth ≈ 4% to 5% Low High OEM production rate inc
Slide 8: First Quarter 2014 Results
First Quarter 2014 Results ($ in millions) Q1 FY14 Q1 FY13 Revenue $529.3 $430.4 23.0% Increase Gross Profit $284.1 $238.5 1.7 Margin Point Decline Margin % 53.7% 55.4% ● Dilutive impact from acquisitions SG&A $57.1 $55.2 ● Lower SG&A as a % of sales relative to our sales growth % to Sales 10.8% 12.
Slide 9: Liquidity & Taxes
Liquidity & Taxes ($ in millions) Cash Liquidity EBITDA 12/28/2013 FY 9/30/2013 As Defined Net Cash Provided by 12/28/2013 Multiple Rate (1) Operating Activities $115.7 $470.2 Cash $411 Capital Expenditures ($8.1) ($35.5) Revolver – – Existing Term Loan B 496 0.5x L + 2.75% Free Cash Flow $107.6 $43
Slide 10: Reconciliation of GAAP to Adjusted EPS - Guidance
Reconciliation of GAAP to Adjusted EPS - Guidance ($ in millions) Full Year Guidance Thirteen Week Periods Ended Mid-Point December 28, December 29, September 30, 2013 2012 2014 Earnings per share $ 1.44 $ 0.66 $ 6.39 Adjustments to earnings per share: Dividend equivalent payment 0.07 0.70 0.33 Non-
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 Periods Ended December 28, December 29, 2013 2012 Net income $ 86,123 $ 74,170 Adjustments: Depreciation and amortization expense 23,839 17,452 Interest expense, net 80,853 62,876 Income tax provis
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 December 28, December 29, Reported Earnings Per Share 2013 2012 Net income $ 86,123 $ 74,170 Less: dividends paid on participating securities (4,139) (38,130) Net income a
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) Thirteen Week Periods Ended December 28, December 29, 2013 2012 Net Cash Provided by Operating Activities $ 115,707 $ 98,115 Adjustments: Changes in assets and liabilities, net of