Slide 1: FY 2023 Q2 Earnings Call
FY 2023 Q2 Earnings Call May 9, 2023
Slide 2: Agenda
Agenda TransDigm Overview, Highlights and Outlook Kevin Stein President and CEO Market Review Jorge L. Valladares III COO Operating Performance and Financial Results Mike Lisman 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‐ Proprietary Comm OEM 27% OEM Defense 42% Prop
Slide 5: 2023 Q2 Financial Performance by Markets – Pro Forma
2023 Q2 Financial Performance by Markets – Pro Forma Highlights Q2 Review – Pro Forma Revenues⁽¹⁾ 25% Biz Actual vs. Prior Year Jet/Heli Q2 YTD Commercial OEM: Q2 ’23 Commercial Transport Revenue Up 22% 75% Com Commercial OEM: Up 25% Up 23% Transport Q2 ’23 Business Jet/Helicopter Revenue Up 32%
Slide 6: Second Quarter 2023 Select Financial Results
Second Quarter 2023 Select Financial Results ($ in millions, except per share amounts) Q2 FY Q2 FY 2023 2022 Revenue $1,592 $1,327 20% Increase Gross Profit $929 $736 • Favorable Aftermarket vs. OEM sales mix 58.4% 55.5% 2.9% • Fixed overhead spread over higher production volumes SG&A $199 $183 • Co
Slide 7: Fiscal 2023 Outlook
Fiscal 2023 Outlook Market Growth Assumptions FY 2022 Pro FY 2023 Expected Growth Forma Sales Mix (1) Market (includes Calspan) 27% Commercial OEM Up 20% to 25% Range 31% Commercial Aftermarket Up 25% to 30% Range 42% Defense Up LSD to MSD % Range Guidance Summary (current guidance includes Calspan)
Slide 8: Fiscal 2023 Select Financial Assumptions
Fiscal 2023 Select Financial Assumptions Select Financial Assumptions for Fiscal 2023 Prior Assumptions (Issued February 2023) Updated Assumptions (includes Calspan) Capital Expenditures $155 to $185 million No change Full Year Net Interest Expense ≈ $1.16 billion (includes $80 million of ≈ $1.185 b
Slide 9: Reconciliation of Fiscal 2023 Outlook
Reconciliation of Fiscal 2023 Outlook ($ in millions, except per share amounts) FY 2023 Guidance Midpoint Net income $ 1,166 Adjustments: Includes approx. $10m Depreciation and amortization expense 277 of backlog amortization Interest expense - net 1,185 Income tax provision 388 EBITDA 3,016 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 Twenty‐Six Week Periods Ended Mid‐Point April 1, 2023 April 2, 2022 April 1, 2023 April 2, 2022 September 30, 2023 GAAP earnings per share from continuing operations $ 5.32 $ 3.38 $ 8.65 $ 5.33 $ 19.
Slide 11: Capital Structure
Capital Structure Pro Forma Capital Structure ($ in millions) Actual Pro forma (1) 4/1/23 Adj. 4/1/23 Rate Cash $3,418 – $3,418 (1) Restricted Cash 1,100 (1,100) – Total Cash $4,518 $3,418 (2) $810mm revolver – – – L + 2.50% $350mm AR securitization facility 350 – 350 S + 1.30% First lien term loan
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: $350M AR Securitization renews annually in July 12
Slide 14: Appendix: Reconciliation of Income from Continuing Operations to EBITDA and EBITDA As Defined
Appendix: Reconciliation of Income from Continuing Operations to EBITDA and EBITDA As Defined ($ in millions) Thirteen Week Periods Ended Twenty‐Six Week Periods Ended April 1, 2023 April 2, 2022 April 1, 2023 April 2, 2022 Income from continuing operations $ 304 $ 199 $ 533 $ 362 Adjustments: Depre
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 Twenty‐Six Week Periods Ended Reported Earnings Per Share April 1, 2023 April 2, 2022 April 1, 2023 April 2, 2022 Income from continuing operations $ 304 $ 199 $ 533 $ 362 L
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) Twenty‐Six Week Periods Ended April 1, 2023 April 2, 2022 Net cash provided by operating activities $ 507 $ 366 Adjustments: Changes in assets and liabilities, net of effects from ac