Slide 1: FY 2023 Q4 Earnings Call
FY 2023 Q4 Earnings Call November 9, 2023
Slide 2: Agenda
Agenda TransDigm Overview, Highlights and Outlook Kevin Stein President and CEO Market Review Mike Lisman 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 38% Prop
Slide 5: 2023 Q4 Financial Performance by Markets – Pro Forma
2023 Q4 Financial Performance by Markets – Pro Forma Highlights Q4 Review – Pro Forma Revenues⁽¹⁾ Commercial OEM: 30% Biz Actual vs. Prior Year Jet/Heli Q4 ’23 Commercial Transport Revenue Up 25% Q4 YTD Q4 ’23 Business Jet/Helicopter Revenue Up 17% 70% Com Transport Commercial OEM: Up 22% Up 24%
Slide 6: Fourth Quarter 2023 Select Financial Results
Fourth Quarter 2023 Select Financial Results ($ in millions, except per share amounts) Q4 FY Q4 FY 2023 2022 Revenue $1,852 $1,510 23% Increase Gross Profit $1,091 $885 • Favorable Aftermarket vs. OEM sales mix 58.9% 58.6% 0.3% • Fixed overhead spread over higher production volumes SG&A $202 $210 •
Slide 7: Full Year 2023 Select Financial Results
Full Year 2023 Select Financial Results ($ in millions, except per share amounts) FY 2023 FY 2022 Revenue $6,585 $5,429 21% Increase Gross Profit $3,842 $3,099 • Favorable Aftermarket vs. OEM sales mix 58.3% 57.1% 1.2% • Fixed overhead spread over higher production volumes SG&A $780 $748 • Continued
Slide 8: Fiscal 2024 Outlook
Fiscal 2024 Outlook Market Growth Assumptions FY 2023 Pro Forma Sales Mix (1) Market FY 2024 Expected Growth 27% Commercial OEM Around 20% 35% Commercial Aftermarket Mid-Teens % Range 38% Defense MSD to HSD % Range Guidance Summary ($ in millions, except per share amounts) FY 24 Guidance Low High Re
Slide 9: Fiscal 2024 Select Financial Assumptions
Fiscal 2024 Select Financial Assumptions Select Financial Assumptions for Fiscal 2024 Capital Expenditures $185 to $215 million Full Year Net Interest Expense ≈ $1.25 billion (includes $55 million of interest income) Full Year Effective Tax Rate ≈ 22% to 24% for GAAP EPS, Adjusted EPS and Cash Taxes
Slide 10: Reconciliation of Fiscal 2024 Outlook
Reconciliation of Fiscal 2024 Outlook ($ in millions, except per share amounts) FY 2024 Guidance Midpoint Net income $ 1,697 Adjustments: Depreciation and amortization expense 292 Interest expense - net 1,250 Income tax provision 507 EBITDA 3,746 Adjustments: Acquisition-related expenses and adjustm
Slide 11: Reconciliation of GAAP EPS to Adjusted EPS - Guidance
Reconciliation of GAAP EPS to Adjusted EPS ‐ Guidance Full Year Guidance Thirteen Week Periods Ended Fiscal Years Ended Mid‐Point September 30, September 30, September 30, September 30, September 30, 2024 2023 2022 2023 2022 GAAP earnings per share from continuing operations $ 7.23 $ 3.98 $ 22.03 $
Slide 12: Capital Structure
Capital Structure Pro Forma Capital Structure ($ in millions) Actual 9/30/23 Rate Cash $3,472 $810mm revolver – S + 2.50% $450mm AR securitization facility 350 S + 1.60% FY23 Weighted First lien term loan H due 2027 1,713 S + 3.25% Average Interest Rate First lien term loan I due 2028 4,536 S + 3.25
Slide 13: Interest Rate Sensitivity
Interest Rate Sensitivity • Interest rates on TDG’s $20Bn of gross Debt is 80% hedged/fixed rate through fiscal year 2025 • 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 24 Assump
Slide 14: Debt Maturity Profile
Debt Maturity Profile Debt Maturity Profile ($MM) $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0 2024 2025 2026 2027 2028 2029 2030 Secured Term Loans Secured Notes Sr Sub Notes Note: $450M AR Securitization renews annually in July 13
Slide 15: Appendix: Reconciliation of Income from Continuing Operations to EBITDA and EBITDA As Defined
Appendix: Reconciliation of Income from Continuing Operations to EBITDA and EBITDA As Defined ($ in millions) Thirteen Week Periods Ended Fiscal Years Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Income from continuing operations $ 414 $ 266 $ 1,299 $ 866 Adjustm
Slide 16: 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 Fiscal Years Ended Reported Earnings Per Share September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Income from continuing operations $ 414 $ 266 $ 1,
Slide 17: 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) Fiscal Years Ended September 30, 2023 September 30, 2022 Net cash provided by operating activities $ 1,375 $ 948 Adjustments: Changes in assets and liabilities, net of effects from a