Slide 1: FY 2014 Third Quarter Earnings Call
FY 2014 THIRD QUARTER EARNINGS CALL August 5, 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 Financial Results Gregory Rufus Executive Vice President and CFO Q&A W. Nicholas Howley Chairman and CEO Raymond F. Laubenthal Presid
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 Q3 Financial Performance by Markets – Pro Forma
2014 Q3 Financial Performance by Markets – Pro Forma Highlights⁽¹⁾ Q3 Market Review – Pro Forma Revenues⁽¹⁾ Actual vs. Prior Year Q3 2014 YTD 2014 Commercial OEM Commercial transport revenues up 12% YTD Commercial OEM: Up 6% Up 9% Business jet revenues up 3% YTD Commercial Aftermarket: Comme
Slide 7: Fiscal 2014 Outlook
Fiscal 2014 Outlook Est FY 2014 Pro Forma Sales Mix (1) Market FY 2014 Expected Growth⁽¹⁾ 31% Commercial OEM Up High Single-Digit % 38% Commercial Aftermarket Up ≈ 10% 31% Defense Flat Assumptions Guidance Summary ($ in millions) Worldwide RPM growth ≈ 4% to 5% Low High OEM production rate incre
Slide 8: Third Quarter 2014 Results
Third Quarter 2014 Results ($ in millions) Q3 FY14 Q3 FY13 Revenue $610.6 $488.6 25.0% Increase Gross Profit $327.5 $269.0 1.4 Margin Point Decline Margin % 53.6% 55.0% ● Dilutive impact from acquisitions ● Favorable OEM vs. aftermarket product mix ● Strength of our proprietary products and producti
Slide 9: Liquidity & Taxes
Liquidity & Taxes ($ in millions) Cash Liquidity 6/28/2014 FY 9/30/2013 Net Debt to Pro Net Cash Provided by Actual Forma EBITDA As Operating Activities $349.5 $470.2 6/28/2014 Defined Multiple Rate Cash $729 Capital Expenditures ($25.5) ($35.5) $420m revolver – L + 3.00% Free Cash Flow $324.0 $434.
Slide 10: Reconciliation of GAAP to Adjusted EPS - Guidance
Reconciliation of GAAP to Adjusted EPS - Guidance ($ in millions) Thirteen Week Periods Full Year Guidance Ended Thirty-Nine Week Periods Ended Mid-Point June 28, June 29, June 28, June 29, September 30, 2014 2013 2014 2013 2014 Earnings per share $ (1.66) $ 0.71 $ 1.26 $ 2.62 $ 3.01 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 Thirty-Nine Week Periods Ended Periods Ended June 28, June 29, June 28, June 29, 2014 2013 2014 2013 Net income $ 16,177 $ 76,655 $ 192,655 $ 218,762 Adjus tments : Depreciation and amortization ex
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 Thirty-Nine Week Periods Ended Periods Ended June 28, June 29, June 28, June 29, Reported Earnings (Loss) Per Share 2014 2013 2014 2013 Net income $ 16,177 $ 76,655 $ 192,655 $ 218,762
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) Thirty-Nine Week Periods Ended June 28, 2014 June 29, 2013 Net Ca s h Provi ded by Opera ti ng Acti vi ti es $ 349,529 $ 267,035 Adjus tments : Cha nges i n a s s ets a nd l i a bi