Slide 1: FY 2014 Second Quarter Earnings Call
FY 2014 SECOND QUARTER EARNINGS CALL May 6, 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 Proprietary Est FY 2014 Pro Forma EBITDA Revenues (1) Pro Forma Revenues As Defined (1) (Excluding Non-Aviation Se
Slide 6: 2014 Q2 Financial Performance by Markets – Pro Forma
2014 Q2 Financial Performance by Markets – Pro Forma Highlights⁽¹⁾ Q2 Market Review – Pro Forma Revenues⁽¹⁾ Actual vs. Prior Year Q2 2014 YTD 2014 Commercial OEM Commercial transport OEM up 14% Commercial OEM: Up 11% Up 11% Business jet revenues up 6% YTD Commercial Aftermarket: Commercial A
Slide 7: Fiscal 2014 Outlook
Fiscal 2014 Outlook Est FY 2014 Pro Forma Sales Mix (1) Market FY 2013 Expected Growth⁽¹⁾ 31% Commercial OEM Up High Single-Digit % 38% Commercial Aftermarket Up High Single-Digit % 31% Defense Flat Assumptions Guidance Summary ($ in millions) Worldwide RPM growth ≈ 4% to 5% Low High OEM product
Slide 8: Second Quarter 2014 Results
Second Quarter 2014 Results ($ in millions) Q2 FY14 Q2 FY13 Revenue $590.8 $465.6 26.9% Increase Gross Profit $307.6 $259.3 3.6 Margin Point Decline Margin % 52.1% 55.7% ● Dilutive impact from acquisitions ● Strength of our proprietary products and productivity improvements SG&A $71.5 $55.5 % to Sal
Slide 9: Liquidity & Taxes
Liquidity & Taxes ($ in millions) Cash Liquidity EBITDA 3/29/2014 FY 9/30/2013 As Defined Net Cash Provided by 3/29/2014 Multiple Rate (1) Operating Activities $220.5 $470.2 Cash $476 Capital Expenditures ($17.7) ($35.5) Revolver – – Existing Term Loan B 495 0.5x L + 2.75% Free Cash Flow $202.8 $434
Slide 10: Reconciliation of GAAP to Adjusted EPS - Guidance
Reconciliation of GAAP to Adjusted EPS ‐ Guidance ($ in millions) Thirteen Week Periods Twenty-Six Week Periods Full Year Guidance Ended Ended Mid-Point March 29, March 30, March 29, March 30, September 30, 2014 2013 2014 2013 2014 Earnings per share $ 1.49 $ 1.25 $ 2.93 $ 1.91 $ 6.45 Adjustments to
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 March 29, March 30, March 29, March 30, 2014 2013 2014 2013 Net income $ 90,355 $ 67,937 $ 176,478 $ 142,107 Adjustments : Deprecia tion a nd a mortizati
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 Twenty‐Six Week Periods Ended Periods Ended March 29, March 30, March 29, March 30, Reported Earnings Per Share 2014 2013 2014 2013 Net income $ 90,355 $ 67,937 $ 176,478 $ 142,107 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 March 29, 2014 March 30, 2013 Net Ca s h Provi ded by Operati ng Acti vi ti es $ 220,488 $ 197,289 Adjus tments : Changes i n as s ets a nd l i a bi l