TransDigm Group Reports Fiscal 2024 Fourth Quarter and Year-End Results
Fourth quarter highlights include:
- Net sales of
$2,185 million , up 18% from$1,852 million in the prior year's quarter; - Net income of
$468 million , up 13% from the prior year's quarter; - Earnings per share of
$5.80 ; - EBITDA As Defined of
$1,149 million , up 19% from$963 million in the prior year's quarter; - EBITDA As Defined margin of 52.6%; and
- Adjusted earnings per share of
$9.83 , up 22% from$8.03 in the prior year's quarter.
Fiscal 2024 highlights include:
- Net sales of
$7,940 million , up 21% from$6,585 million in the prior fiscal year; - Net income of
$1,715 million , up 32% from the prior fiscal year; - Earnings per share of
$25.62 , up 16% from the prior fiscal year; - EBITDA As Defined of
$4,173 million , up 23% from$3,395 million in the prior fiscal year; - EBITDA As Defined margin of 52.6%; and
- Adjusted earnings per share of
$33.99 , up 32% from$25.84 in the prior fiscal year.
Quarter-to-Date Results
Net sales for the quarter increased 18.0%, or
Net income for the quarter increased
GAAP earnings per share were reduced in the quarter by
Adjusted net income for the quarter increased 23.9% to
EBITDA for the quarter increased 14.3% to
Acquisition Activity
As previously reported on
Financing Activity
On
Special Dividend Activity
During the quarter, on
Year-to-Date Results
Fiscal 2024 net sales increased 20.6%, or
Fiscal 2024 net income increased
GAAP earnings per share were reduced in fiscal 2024 and 2023 by
Fiscal 2024 adjusted net income increased 33.1% to
Fiscal 2024 EBITDA increased 21.1% to
"I am very pleased with our team's performance and the overall operating results for the fourth quarter and full year of fiscal 2024," stated
During the course of the past six months, we have deployed approximately
As always, we remain committed to our operating strategy, value drivers and the effective management of our cost structure. We look forward to the opportunity to continue creating value for our shareholders as we move into our fiscal 2025."
Please see the attached tables for a reconciliation of net income to EBITDA, EBITDA As Defined, and adjusted net income; a reconciliation of net cash provided by operating activities to EBITDA and EBITDA As Defined; and a reconciliation of earnings per share to adjusted earnings per share for the periods discussed in this press release.
Fiscal 2025 Outlook
- Net sales are anticipated to be in the range of
$8,750 million to$8,950 million compared with$7,940 million in fiscal 2024, an increase of 11.5% at the midpoint; - Net income is anticipated to be in the range of
$1,887 million to$1,999 million compared with$1,715 million in fiscal 2024, an increase of 13.3% at the midpoint; - Earnings per share is expected to be in the range of
$31.47 to$33.39 per share based upon weighted average shares outstanding of 58.4 million shares, compared with$25.62 per share in fiscal 2024, which is an increase of 26.6% at the midpoint; - EBITDA As Defined is anticipated to be in the range of
$4,615 million to$4,755 million compared with$4,173 million in fiscal 2024, an increase of 12.3% at the midpoint (corresponding to an EBITDA As Defined margin guide of approximately 52.9% for fiscal 2025); - Adjusted earnings per share is expected to be in the range of
$35.36 to$37.28 per share compared with$33.99 per share in fiscal 2024, an increase of 6.9% at the midpoint; and - Fiscal 2025 outlook is based on the following market growth assumptions:
- Commercial OEM revenue growth in the mid single-digit percentage range;
- Commercial aftermarket revenue growth in the high single-digit to low double-digit percentage range; and
- Defense revenue growth in the high single-digit percentage range.
Please see the attached Table 6 for a reconciliation of EBITDA, EBITDA As Defined to net income and reported earnings per share to adjusted earnings per share guidance midpoint estimated for the fiscal year ending
Earnings Conference Call
The call will be archived on the website and available for replay at approximately
About
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
Although we use EBITDA and EBITDA As Defined as measures to assess the performance of our business and for the other purposes set forth above, the use of these non-GAAP financial measures as analytical tools has limitations, and you should not consider any of them in isolation, or as a substitute for analysis of our results of operations as reported in accordance with
- neither EBITDA nor EBITDA As Defined reflects the significant interest expense, or the cash requirements, necessary to service interest payments on our indebtedness;
- although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and neither EBITDA nor EBITDA As Defined reflects any cash requirements for such replacements;
- the omission of the substantial amortization expense associated with our intangible assets further limits the usefulness of EBITDA and EBITDA As Defined;
- neither EBITDA nor EBITDA As Defined includes the payment of taxes, which is a necessary element of our operations; and
- EBITDA As Defined excludes the cash expense we have incurred to integrate acquired businesses into our operations, which is a necessary element of certain of our acquisitions.
Forward-Looking Statements
Statements in this press release that are not historical facts, including statements under the heading "Fiscal 2025 Outlook," are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "believe," "may," "will," "should," "expect," "intend," "plan," "predict," "anticipate," "estimate," or "continue" and other words and terms of similar meaning may identify forward-looking statements.
All forward-looking statements involve risks and uncertainties that could cause
Contact: |
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Investor Relations |
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216-706-2945 |
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CONSOLIDATED STATEMENTS OF INCOME |
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FOR THE THIRTEEN WEEK PERIODS AND FISCAL YEARS ENDED |
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Table 1 |
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(Amounts in millions, except per share amounts) |
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(Unaudited) |
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Thirteen Week Periods Ended |
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Fiscal Years Ended |
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$ 2,185 |
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$ 1,852 |
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$ 7,940 |
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$ 6,585 |
COST OF SALES |
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927 |
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761 |
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3,268 |
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2,743 |
GROSS PROFIT |
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1,258 |
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1,091 |
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4,672 |
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3,842 |
SELLING AND ADMINISTRATIVE EXPENSES |
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264 |
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202 |
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980 |
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780 |
AMORTIZATION OF INTANGIBLE ASSETS |
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51 |
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33 |
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161 |
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139 |
INCOME FROM OPERATIONS |
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943 |
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856 |
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3,531 |
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2,923 |
INTEREST EXPENSE—NET |
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343 |
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292 |
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1,286 |
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1,164 |
REFINANCING COSTS |
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(1) |
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15 |
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58 |
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56 |
OTHER INCOME |
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(4) |
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— |
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(28) |
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(13) |
INCOME FROM OPERATIONS BEFORE INCOME TAXES |
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605 |
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549 |
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2,215 |
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1,716 |
INCOME TAX PROVISION |
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137 |
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135 |
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500 |
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417 |
NET INCOME |
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468 |
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414 |
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1,715 |
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1,299 |
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS |
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— |
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— |
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(1) |
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(1) |
NET INCOME ATTRIBUTABLE TO TD GROUP |
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$ 468 |
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$ 414 |
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$ 1,714 |
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$ 1,298 |
NET INCOME APPLICABLE TO TD GROUP COMMON STOCKHOLDERS |
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$ 336 |
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$ 414 |
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$ 1,481 |
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$ 1,260 |
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Earnings per share attributable to |
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Earnings per share—Basic and diluted |
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$ 5.80 |
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$ 7.23 |
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$ 25.62 |
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$ 22.03 |
Cash dividends declared per common share |
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$ 75.00 |
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$ — |
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$ 110.00 |
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$ — |
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Weighted-average shares outstanding: |
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Basic and diluted |
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58.0 |
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57.3 |
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57.8 |
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57.2 |
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SUPPLEMENTAL INFORMATION - RECONCILIATION OF |
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EBITDA, EBITDA AS DEFINED TO NET INCOME |
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FOR THE THIRTEEN WEEK PERIODS AND FISCAL YEARS ENDED |
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Table 2 |
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(Amounts in millions, except per share amounts) |
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(Unaudited) |
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Thirteen Week Periods Ended |
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Fiscal Years Ended |
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Net Income |
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$ 468 |
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$ 414 |
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$ 1,715 |
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$ 1,299 |
Adjustments: |
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Depreciation and amortization expense |
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93 |
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70 |
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312 |
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268 |
Interest expense-net |
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343 |
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292 |
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1,286 |
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1,164 |
Income tax provision |
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137 |
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135 |
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500 |
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417 |
EBITDA |
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1,041 |
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911 |
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3,813 |
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3,148 |
Adjustments: |
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Acquisition transaction and integration-related expenses (1) |
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28 |
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6 |
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70 |
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18 |
Non-cash stock and deferred compensation expense (2) |
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59 |
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26 |
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217 |
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157 |
Refinancing costs (3) |
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(1) |
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15 |
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58 |
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56 |
Other, net (4) |
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22 |
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5 |
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15 |
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16 |
Gross Adjustments to EBITDA |
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108 |
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52 |
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360 |
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247 |
EBITDA As Defined |
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$ 1,149 |
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$ 963 |
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$ 4,173 |
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$ 3,395 |
EBITDA As Defined, Margin (5) |
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52.6 % |
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52.0 % |
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52.6 % |
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51.6 % |
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(1) |
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Represents costs incurred to integrate acquired businesses into |
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(2) |
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Represents the compensation expense recognized by |
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(3) |
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Represents costs expensed related to debt financing activities, including new issuances, extinguishments, refinancings and amendments to existing agreements. |
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(4) |
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Primarily represents foreign currency transaction (gains) or losses, payroll withholding taxes related to dividend equivalent payments and stock option exercises, non-service related pension costs, deferred compensation payments and other miscellaneous (income) expense. |
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(5) |
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The EBITDA As Defined margin represents the amount of EBITDA As Defined as a percentage of net sales. |
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SUPPLEMENTAL INFORMATION - RECONCILIATION OF REPORTED |
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EARNINGS PER SHARE TO ADJUSTED EARNINGS PER SHARE |
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FOR THE THIRTEEN WEEK PERIODS AND FISCAL YEARS ENDED |
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Table 3 |
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(Amounts in millions, except per share amounts) |
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(Unaudited) |
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Thirteen Week Periods Ended |
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Fiscal Years Ended |
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Reported Earnings Per Share |
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Net income |
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$ 468 |
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$ 414 |
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$ 1,715 |
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$ 1,299 |
Less: Net income attributable to noncontrolling interests |
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— |
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— |
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(1) |
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(1) |
Net income attributable to |
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468 |
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414 |
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1,714 |
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1,298 |
Less: Dividends declared or paid on participating securities |
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(132) |
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— |
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(233) |
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(38) |
Net income applicable to |
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$ 336 |
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$ 414 |
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$ 1,481 |
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$ 1,260 |
Weighted-average shares outstanding under the two-class method |
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Weighted-average common shares outstanding |
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56.2 |
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55.3 |
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55.8 |
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54.9 |
Vested options deemed participating securities |
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1.8 |
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2.0 |
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2.0 |
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2.3 |
Total shares for basic and diluted earnings per share |
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58.0 |
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57.3 |
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57.8 |
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57.2 |
Earnings per share—basic and diluted |
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$ 5.80 |
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$ 7.23 |
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$ 25.62 |
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$ 22.03 |
Adjusted Earnings Per Share |
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Net income |
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$ 468 |
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$ 414 |
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$ 1,715 |
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$ 1,299 |
Gross Adjustments to EBITDA |
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108 |
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52 |
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360 |
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247 |
Purchase accounting backlog amortization |
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8 |
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— |
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13 |
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4 |
Tax adjustment (1) |
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(14) |
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(6) |
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(122) |
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(73) |
Adjusted net income |
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$ 570 |
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$ 460 |
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$ 1,966 |
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$ 1,477 |
Adjusted diluted earnings per share under the two-class method |
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$ 9.83 |
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$ 8.03 |
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$ 33.99 |
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$ 25.84 |
Diluted Earnings Per Share to Adjusted Earnings Per Share |
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Diluted earnings per share from net income attributable to |
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$ 5.80 |
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$ 7.23 |
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$ 25.62 |
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$ 22.03 |
Adjustments to diluted earnings per share: |
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Inclusion of the dividend equivalent payments |
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2.27 |
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— |
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4.02 |
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0.67 |
Acquisition transaction and integration-related expenses |
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0.49 |
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0.08 |
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1.10 |
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0.28 |
Non-cash stock and deferred compensation expense |
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0.81 |
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0.35 |
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2.85 |
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2.07 |
Refinancing costs |
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(0.01) |
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0.20 |
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0.76 |
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0.74 |
Tax adjustment on income from operations before taxes (1) |
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0.18 |
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0.11 |
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(0.56) |
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(0.18) |
Other, net |
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0.29 |
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0.06 |
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0.20 |
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0.23 |
Adjusted earnings per share |
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$ 9.83 |
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$ 8.03 |
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$ 33.99 |
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$ 25.84 |
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(1) |
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For the thirteen week periods and fiscal years ended |
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SUPPLEMENTAL INFORMATION - RECONCILIATION OF |
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PROVIDED BY OPERATING ACTIVITIES TO EBITDA, EBITDA AS DEFINED |
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FOR THE FISCAL YEARS ENDED |
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Table 4 |
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(Amounts in millions) |
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(Unaudited) |
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Fiscal Years Ended |
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Net cash provided by operating activities |
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$ 2,045 |
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$ 1,375 |
Adjustments: |
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Changes in assets and liabilities, net of effects from acquisitions and sales of businesses |
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272 |
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415 |
Interest expense-net (1) |
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1,246 |
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1,123 |
Income tax provision-current |
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490 |
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414 |
Loss contract amortization |
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35 |
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34 |
Non-cash stock and deferred compensation expense (2) |
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(217) |
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(157) |
Refinancing costs (3) |
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(58) |
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(56) |
EBITDA |
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3,813 |
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3,148 |
Adjustments: |
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Acquisition transaction and integration-related expenses (4) |
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70 |
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18 |
Non-cash stock and deferred compensation expense (2) |
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217 |
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157 |
Refinancing costs (3) |
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58 |
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56 |
Other, net (5) |
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15 |
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16 |
EBITDA As Defined |
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$ 4,173 |
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$ 3,395 |
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(1) |
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Represents interest expense, net of interest income, excluding the amortization of debt issuance costs and premium and discount on debt. |
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(2) |
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Represents the compensation expense recognized by |
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(3) |
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Represents costs expensed related to debt financing activities, including new issuances, extinguishments, refinancings and amendments to existing agreements. |
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(4) |
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Represents costs incurred to integrate acquired businesses into |
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(5) |
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Primarily represents foreign currency transaction (gains) or losses, payroll withholding taxes related to dividend equivalent payments and stock option exercises, non-service related pension costs, deferred compensation payments and other miscellaneous (income) expense. |
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SUPPLEMENTAL INFORMATION - BALANCE SHEET DATA |
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Table 5 |
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(Amounts in millions) |
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(Unaudited) |
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Cash and cash equivalents |
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$ 6,261 |
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$ 3,472 |
Trade accounts receivable—Net |
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1,381 |
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1,230 |
Inventories—Net |
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1,876 |
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1,616 |
Current portion of long-term debt |
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98 |
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71 |
Short-term borrowings—trade receivable securitization facility |
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486 |
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349 |
Accounts payable |
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323 |
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305 |
Dividends payable |
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4,216 |
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— |
Accrued and other current liabilities |
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1,216 |
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854 |
Long-term debt |
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24,296 |
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19,330 |
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(6,290) |
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(1,984) |
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SUPPLEMENTAL INFORMATION - RECONCILIATION OF EBITDA, |
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EBITDA AS DEFINED TO NET INCOME AND REPORTED EARNINGS PER |
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SHARE TO ADJUSTED EARNINGS PER SHARE GUIDANCE MIDPOINT |
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FOR THE FISCAL YEAR ENDING |
Table 6 |
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(Amounts in millions, except per share amounts) |
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(Unaudited) |
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GUIDANCE MIDPOINT |
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Fiscal Year Ended |
Net Income |
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$ 1,943 |
Adjustments: |
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Depreciation and amortization expense |
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380 |
Interest expense-net |
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1,540 |
Income tax provision |
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616 |
EBITDA |
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4,479 |
Adjustments: |
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Acquisition transaction-related expenses and adjustments (1) |
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30 |
Non-cash stock and deferred compensation expense (1) |
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180 |
Other, net (1) |
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(4) |
Gross Adjustments to EBITDA |
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206 |
EBITDA As Defined |
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$ 4,685 |
EBITDA As Defined Margin (1) |
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52.9 % |
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Earnings per share |
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$ 32.43 |
Adjustments to earnings per share: |
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Inclusion of the dividend equivalent payments |
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0.83 |
Acquisition transaction-related expenses and adjustments |
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0.76 |
Non-cash stock and deferred compensation expense |
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2.35 |
Other, net |
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(0.05) |
Adjusted earnings per share |
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$ 36.32 |
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Weighted-average shares outstanding |
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58.4 |
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(1) |
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Refer to Table 2 above for definitions of Non-GAAP measurement adjustments. |
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