Slide 1: FY 2023 Q3 Earnings Call
FY 2023 Q3 Earnings Call August 8, 2023
Slide 2: Agenda
Agenda TransDigm Overview, Highlights and Outlook Kevin Stein President and CEO Market Review Joel Reiss Co‐COO Operating Performance and Financial Results Sarah Wynne 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‐ Comm OEM Proprietary 27% OEM Defense 42% Prop
Slide 5: 2023 Q3 Financial Performance by Markets – Pro Forma
2023 Q3 Financial Performance by Markets – Pro Forma Highlights Q3 Review – Pro Forma Revenues⁽¹⁾ 25% Biz Actual vs. Prior Year Jet/Heli Q3 YTD Commercial OEM: Q3 ’23 Commercial Transport Revenue Up 21% 75% Com Commercial OEM: Up 25% Up 24% Transport Q3 ’23 Business Jet/Helicopter Revenue Up 30%
Slide 6: Third Quarter 2023 Select Financial Results
Third Quarter 2023 Select Financial Results ($ in millions, except per share amounts) Q3 FY Q3 FY 2023 2022 Revenue $1,744 $1,398 25% Increase Gross Profit $1,029 $816 • Favorable Aftermarket vs. OEM sales mix 59.0% 58.4% 0.6% • Fixed overhead spread over higher production volumes SG&A $209 $184 • C
Slide 7: Fiscal 2023 Outlook
Fiscal 2023 Outlook Market Growth Assumptions FY 2022 Pro Forma Sales Mix (1) Market FY 2023 Expected Growth 27% Commercial OEM Up 20% to 25% Range 31% Commercial Aftermarket Low 30% Range 42% Defense Up MSD to HSD % Range Guidance Summary ($ in millions, except per share amounts) FY 23 Guidance Low
Slide 8: Fiscal 2023 Select Financial Assumptions
Fiscal 2023 Select Financial Assumptions Select Financial Assumptions for Fiscal 2023 Prior Assumptions (Issued May 2023) Updated Assumptions (included Calspan) Capital Expenditures $155 to $185 million No change Full Year Net Interest Expense ≈ $1.185 billion (includes $85 million of ≈ $1.180 billi
Slide 9: Reconciliation of Fiscal 2023 Outlook
Reconciliation of Fiscal 2023 Outlook ($ in millions, except per share amounts) FY 2023 Guidance Midpoint Net income $ 1,239 Adjustments: Includes approx. $10m Depreciation and amortization expense 278 of backlog amortization Interest expense - net 1,180 Income tax provision 414 EBITDA 3,111 Adjustm
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 Thirty‐Nine Week Periods Ended Mid‐Point July 1, 2023 July 2, 2022 July 1, 2023 July 2, 2022 September 30, 2023 GAAP earnings per share from continuing operations $ 6.14 $ 4.10 $ 14.80 $ 9.42 $ 20.99
Slide 11: Capital Structure
Capital Structure Capital Structure ($ in millions) Actual 7/1/23 Rate Cash $3,071 $810mm revolver – S + 2.50% (1) $350mm AR securitization facility 350 S + 1.30% First lien term loan H due 2027 1,716 S + 3.25% First lien term loan I due 2028 4,547 S + 3.25% Senior secured notes due 2026 4,400 6.250
Slide 12: Interest Rate Sensitivity
Interest Rate Sensitivity • Interest rates on TDG’s $20Bn of gross Debt is over 75% hedged/fixed rate through fiscal year 2026 • Achieved via a combination of interest rate caps, swaps and collars • Significantly reduces near-term exposure to any variable rate increases $ in millions Current FY 23 A
Slide 13: Debt Maturity Profile
Debt Maturity Profile Debt Maturity Profile ($MM) $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: $450M AR Securitization renews annually in July 12
Slide 14: Appendix: Reconciliation of Income from Continuing Operations to EBITDA and EBITDA As Defined
Appendix: Reconciliation of Income from Continuing Operations to EBITDA and EBITDA As Defined ($ in millions) Thirteen Week Periods Ended Thirty‐Nine Week Periods Ended July 1, 2023 July 2, 2022 July 1, 2023 July 2, 2022 Income from continuing operations $ 352 $ 239 $ 885 $ 601 Adjustments: Deprecia
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 Thirty‐Nine Week Periods Ended Reported Earnings Per Share July 1, 2023 July 2, 2022 July 1, 2023 July 2, 2022 Income from continuing operations $ 352 $ 239 $ 885 $ 601 Less
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) Thirty‐Nine Week Periods Ended July 1, 2023 July 2, 2022 Net cash provided by operating activities $ 913 $ 675 Adjustments: Changes in assets and liabilities, net of effects from acq