TransDigm Group Reports Fiscal Fourth Quarter and Year-End Results
-- Fourth quarter net sales up 4.3% to $197.4 million from $189.2 million
-- Fourth quarter earnings per share up 9.3% to $0.82 from $0.75
-- Fiscal 2009 net sales up 6.7% to $761.6 million from $713.7 million
-- Fiscal 2009 net income up 22.4% to $162.9 million from $133.1 million
-- Fiscal 2009 earnings per share up 21.9% to $3.23 from $2.65
-- Fiscal 2009 EBITDA As Defined up 12.5% to $374.7 million from $333.1
million
-- Fiscal 2009 adjusted earnings per share up 22.6% to $3.42 from $2.79
Net sales for the quarter rose 4.3% to
Net income for the quarter rose 9.5% to
Adjusted net income for the quarter increased 14.1% to
EBITDA for the quarter increased 2.2% to
Fiscal 2009 Results
Fiscal 2009 net sales were
Fiscal 2009 net income increased 22.4% to
Fiscal 2009 adjusted net income increased 23.3% to
Fiscal 2009 EBITDA increased 11.8% to
"Despite the continued uncertainty surrounding the airline industry and the global economy, we are pleased with our fiscal 2009 operating performance," stated
He continued "In fiscal 2009, we completed the acquisition of three proprietary aerospace component businesses and ended the fiscal year in sound financial condition with nearly
Fiscal 2010 Outlook
Assuming no acquisition activity and based upon current market conditions, the Company expects fiscal 2010 financial performance to be as follows:
-- Net sales are anticipated in the range of $770 million to $800 million
compared with $762 million in fiscal 2009;
-- Net income is anticipated in the range of $116 million to $126 million
compared with $163 million in fiscal 2009. The fiscal 2010 Net Income
will be negatively impacted by the amortization and interest expense
relating to the recent bond offering and costs associated with the
one-time special dividend;
-- EBITDA As Defined is anticipated in the range of $376 million to $390
million compared with $375 million in fiscal 2009;
-- Earnings per share are expected to be in the range of $2.28 to $2.48 per
share on weighted average shares of 51.0 million compared with $3.23 per
share in fiscal 2009; and
-- Adjusted earnings per share are expected to be in the range of $2.90 to
$3.10 per share compared with $3.42 in fiscal 2009.
"We go into fiscal 2010 with considerable market uncertainty," said Howley. "In differing degrees, most of our market segments are still experiencing headwinds. Though there appears to be some indication of stabilization, it is far from clear at this point."
Our fiscal 2010 guidance is based on the following market revenue assumptions.
In the Commercial OEM segment, we are assuming revenue decline in the mid-single digit percent range. This is based on a reduction in commercial transport rates in the second half of the fiscal year as well as lower business jet revenues.
In the Commercial Aftermarket segment, we are assuming worldwide traffic growth will be modestly down in the first half and increase in the second half, for a net flat year over year. This yields a low to mid-single digit percent revenue growth for the year.
In the Defense segment, we are assuming a low single digit percent decline for the year.
Please see the attached tables for a reconciliation of net income to EBITDA, EBITDA As Defined, and adjusted net income and a reconciliation of operating cash flow to EBITDA and EBITDA As Defined for the periods discussed in this press release.
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Non-GAAP Supplemental Information
EBITDA, EBITDA As Defined, EBITDA As Defined Margin, adjusted net income and adjusted earnings per share are non-GAAP financial measures presented in this press release as supplemental disclosures to net income and reported results.
None of EBITDA, EBITDA As Defined, EBITDA As Defined Margin, adjusted net income or adjusted earnings per share is a measurement of financial performance under GAAP and such financial measures should not be considered as an alternative to net income, operating income, cash flows from operating activities or other measures of performance determined in accordance with GAAP. In addition,
Forward-Looking Statements
Statements in this press release that are not historical facts are forward-looking statements under the provisions of the Private Securities Litigation Reform Act of 1995, including expectations of future performance, profitability, growth and earnings. All statements other than statements of historical fact that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward-looking statements, including, in particular, statements about our plans, objectives, strategies and prospects regarding, among other things, our financial condition, results of operations, and business. We have identified some of these forward-looking statements with words like "believe," "may," "will," "should," "expect," "intend," "plan," "predict," "anticipate," "estimate," or "continue" and other words and terms of similar meaning. Specifically, statements contained under the heading "Fiscal 2010 Outlook" constitute forward-looking statements.
All forward-looking statements involve risks and uncertainties which could affect
TRANSDIGM GROUP INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE THIRTEEN WEEK PERIODS AND FISCAL YEARS ENDED
SEPTEMBER 30, 2009 AND SEPTEMBER 30, 2008
(Amounts in thousands, except per share amounts)
(Unaudited)
Thirteen Week Periods Fiscal Years
Ended Ended
September 30, September 30,
2009 2008 2009 2008
NET SALES $197,354 $189,238 $761,552 $713,711
COST OF SALES 88,958 85,800 332,206 327,780
GROSS PROFIT 108,396 103,438 429,346 385,931
OPERATING EXPENSES:
Selling and administrative 22,081 19,101 80,018 74,650
Amortization of intangibles 3,774 3,161 13,928 12,002
Total operating expenses 25,855 22,262 93,946 86,652
INCOME FROM OPERATIONS 82,541 81,176 335,400 299,279
INTEREST EXPENSE - Net 19,550 22,306 84,398 92,677
INCOME BEFORE INCOME TAXES 62,991 58,870 251,002 206,602
INCOME TAX PROVISION 21,380 20,881 88,100 73,476
NET INCOME $41,611 $37,989 $162,902 $133,126
Net Earnings Per Share:
Basic earnings per share $0.85 $0.78 $3.36 $2.78
Diluted earnings per share $0.82 $0.75 $3.23 $2.65
Weighted-Average Shares
Outstanding:
Basic 48,678 48,485 48,481 47,856
Diluted 50,752 50,610 50,459 50,202
TRANSDIGM GROUP INCORPORATED
SUPPLEMENTAL INFORMATION
FOR THE THIRTEEN WEEK PERIODS AND FISCAL YEARS ENDED
SEPTEMBER 30, 2009 AND SEPTEMBER 30, 2008
(Amounts in thousands)
(Unaudited)
Thirteen Week Periods Fiscal Years
Ended Ended
September 30, September 30,
2009 2008 2009 2008
Net Income $41,611 $37,989 $162,902 $133,126
Depreciation and Amortization 7,179 6,605 27,521 25,254
Interest Expense, net 19,550 22,306 84,398 92,677
Income Tax Provision 21,380 20,881 88,100 73,476
EBITDA 89,720 87,781 362,921 324,533
Add: As Defined Adjustments:
Deferred Compensation Costs(1) - 573 297 2,216
Stock Option Expense(2) 1,592 936 5,782 4,002
Acquisition-Related Costs(3) 2,755 209 5,690 2,326
Gross Adjustments to EBITDA 4,347 1,718 11,769 8,544
EBITDA As Defined $94,067 $89,499 $374,690 $333,077
EBITDA As Defined, Margin(4) 47.7% 47.3% 49.2% 46.7%
(1) Represents the expenses recognized by TransDigm Group under its
deferred compensation plans.
(2) Represents the non-cash compensation expense recognized by TransDigm
Group under its stock plans.
(3) Represents costs incurred to integrate acquired businesses and product
lines into TransDigm Group's operations, purchase accounting
adjustments to inventory that were charged to cost of sales when the
inventory was sold, facility relocation costs and other acquisition
-related costs.
(4) The EBITDA As Defined margin represents the amount of EBITDA As
Defined as a percentage of net sales.
TRANSDIGM GROUP INCORPORATED
SUPPLEMENTAL INFORMATION
FOR THE THIRTEEN WEEK PERIODS AND FISCAL YEARS ENDED
SEPTEMBER 30, 2009 AND SEPTEMBER 30, 2008
(Amounts in thousands, except per share amounts)
(Unaudited)
Thirteen Week Periods Fiscal Years
Ended Ended
September 30, September 30,
2009 2008 2009 2008
Net Income $41,611 $37,989 $162,902 $133,126
Gross Adjustments to EBITDA 4,347 1,718 11,769 8,544
Purchase Accounting Backlog
Amortization 932 630 3,237 2,227
Tax Adjustment (1,814) (835) (5,267) (3,834)
Adjusted Net Income $45,076 $39,502 $172,641 $140,063
Basic Earnings per Share $0.85 $0.78 $3.36 $2.78
Diluted Earnings per Share $0.82 $0.75 $3.23 $2.65
Adjusted Basic Earnings per Share $0.93 $0.81 $3.56 $2.93
Adjusted Diluted Earnings per
Share $0.89 $0.78 $3.42 $2.79
Weighted-Average Shares
Outstanding:
Basic 48,678 48,485 48,481 47,856
Diluted 50,752 50,610 50,459 50,202
TRANSDIGM GROUP INCORPORATED
SUPPLEMENTAL INFORMATION
FOR THE THIRTY-NINE WEEK PERIODS ENDED
SEPTEMBER 30, 2009 AND SEPTEMBER 30, 2008
(Amounts in thousands)
(Unaudited)
Fiscal Years Ended
Sept 30, 2009 Sept 30, 2008
Net Cash Provided by Operating Activities $197,112 $189,635
Adjustments:
Changes in assets and liabilities,
net of effects from acquisitions
of businesses 1,897 (35,544)
Interest expense - net(1) 81,147 89,580
Income tax provision - current 79,300 66,141
Non-cash equity compensation(2) (5,813) (4,035)
Excess tax benefit from exercise
of stock options 9,278 18,756
EBITDA 362,921 324,533
Adjustments:
Acquisition-related costs(3) 5,690 2,326
Non-cash compensation and
deferred compensation costs(4) 6,079 6,218
EBITDA As Defined $374,690 $333,077
(1) Represents interest expense excluding the amortization of debt issue
costs and note premium.
(2) Represents the compensation expense recognized by TransDigm Group
under its stock plans.
(3) Represents costs incurred to integrate acquired businesses and product
lines into TransDigm Group's operations, purchase accounting
adjustments to inventory that were charged to cost of sales when the
inventory was sold, facility relocation costs and other acquisition-
related costs.
(4) Represents the compensation expense recognized by TransDigm Group
under its stock plans and its deferred compensation plans.
TRANSDIGM GROUP INCORPORATED
SELECTED BALANCE SHEET DATA
(Amounts in thousands)
(Unaudited)
September 30, September 30,
2009 2008
Cash and cash equivalents $190,167 $159,062
Trade accounts receivable - net 106,446 96,196
Inventories 167,766 144,114
Accounts payable 44,680 25,140
Accrued liabilities 55,072 63,362
Long-term debt 1,356,761 1,357,230
SOURCE
Jonathan D. Crandall, Investor Relations, +1-216-706-2945, ir@transdigm.com