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Form 8-K TransDigm Group INC For: May 10

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May 10, 2016 8:14 AM EDT




UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 10, 2016


TransDigm Group Incorporated
(Exact name of registrant as specified in its charter)


 
 
 
 
 
Delaware
 
001-32833
 
41-2101738
(State or other jurisdiction
of incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification No.)
 
 
 
 
1301 East 9th Street, Suite 3000, Cleveland, Ohio
 
44114
(Address of principal executive offices)
 
(Zip Code)

(216) 706-2960
(Registrant’s telephone number, including area code)
(Former name or former address, if changed since last report.)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrants’ under any of the following provisions (see General Instruction A.2. below):

¨

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 










Item 2.02.
Results of Operations and Financial Condition.

On May 10, 2016, TransDigm Group Incorporated (“TransDigm Group” or the “Company”) issued a press release announcing its financial results for its second fiscal quarter ended April 2, 2016 and certain other information. A copy of this press release is furnished with this Current Report as Exhibit 99.1 and is incorporated herein by reference.

The information contained in this item and in the accompanying exhibit shall not be incorporated by reference into any filing of the Registrant, whether made before or after the date hereof. The information in this item, including the exhibit hereto, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended.

TransDigm Group will host a conference call for investors and security analysts on May 10, 2016, beginning at 11:00 a.m., Eastern Time. To join the call, dial (888) 558-9538 and enter the pass code 2322837. International callers should dial (760) 666-3183 and use the same pass code. A live audio webcast can be accessed online at http://www.transdigm.com. A slide presentation will also be available for reference during the conference call; go to the investor relations page of our website and click on “Presentations.”

The call will be archived on the website and available for replay at approximately 2:00 p.m., Eastern Time. A telephone replay will be available for two weeks by dialing (855) 859-2056 and entering the pass code 2322837. International callers should dial (404) 537-3406 and use the same pass code.

Item 9.01.
Financial Statements and Exhibits.

(d) Exhibits

The following exhibit is being filed with this Current Report on Form 8-K:

99.1
Press Release dated May 10, 2016.







SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
 
 
TRANSDIGM GROUP INCORPORATED
 
 
By
 
/s/ Terrance Paradie
 
 
Terrance Paradie
 
 
Executive Vice President and Chief Financial Officer

Date: May 10, 2016







Exhibit Index

Exhibit No.
 
Description
 
 
 
99.1
 
Press Release dated May 10, 2016.



        

Exhibit 99.1

                

TransDigm Group Reports Fiscal 2016 Second Quarter Results

Cleveland, Ohio, May 10, 2016/PRNewswire/ -- TransDigm Group Incorporated (NYSE: TDG), a leading global designer, producer and supplier of highly engineered aircraft components, today reported results for the second quarter ended April 2, 2016.

Highlights for the second quarter include:

•
Net sales of $796.8 million, up 28.7% from $619.0 million;

•
EBITDA As Defined of $368.6 million, up 28.0% from $288.1 million;

•
Net income of $138.6 million, up 25.0% from $110.9 million;

•
Earnings per share of $2.47, up 26.0% from $1.96;

•
Adjusted earnings per share of $2.86, up 35.5% from $2.11; and

•
Upward revision to EBITDA As Defined and earnings per share guidance.

Net sales for the quarter rose 28.7%, or $177.8 million, to $796.8 million from $619.0 million in the comparable quarter a year ago. Organic net sales growth was approximately 4.4%.

Net income for the quarter rose 25.0% to $138.6 million, or $2.47 per share, compared to $110.9 million, or $1.96 per share, in the comparable quarter a year ago. The increase in net income primarily reflects the growth in net sales described above partially offset by higher acquisition-related costs and interest expense.

Adjusted net income for the quarter rose 34.1% to $160.5 million, or $2.86 per share, from $119.7 million, or $2.11 per share, in the comparable quarter a year ago.

EBITDA for the quarter increased 23.9% to $341.4 million from $275.6 million for the comparable quarter a year ago. EBITDA As Defined for the period increased 28.0% to $368.6 million compared with $288.1 million in the quarter a year ago. EBITDA As Defined as a percentage of net sales for the quarter was 46.3%.

"I am pleased with our operating results for our fiscal second quarter," stated W. Nicholas Howley, TransDigm Group's Chairman and Chief Executive Officer. "We saw signs of improvement in the

1


commercial aftermarket as second quarter sales rose sharply versus the prior year. After a number of quarters of disconnect, these results are encouraging. The defense picture was mixed with sales slightly down versus the prior year quarter, but bookings were up significantly. Our reported EBITDA As Defined margin of approximately 46% was about the same as the prior year period in spite of over two margin point dilution from the acquisitions completed in fiscal 2015 and 2016. Our constant focus on our value-based operating strategy, including our first quarter headcount reductions, continued to show strong results."

During the thirteen week period ended April 2, 2016, TransDigm repurchased 691,519 shares of its common stock with a weighted-average price per share of $198.09 at an aggregate cost of approximately $137 million.

As previously reported, on January 4, 2016, TransDigm completed the tender offer for all of the outstanding shares of Breeze-Eastern Corporation ("Breeze-Eastern") (NYSE MKT:BZC) for $19.61 per share in cash. The purchase price for the tender offer was approximately $205.9 million, of which $146.4 million (net of cash acquired of $30.8 million) was paid at closing and $28.7 million is accrued for payment to dissenting shareholders. Breeze-Eastern is a leading global designer and manufacturer of high performance lifting and pulling devices for military and civilian aircraft, including rescue hoists, winches and cargo hooks, and weapons-lifting systems.
 
Year-to-Date Results

Net sales for the twenty-six week period ended April 2, 2016 rose 24.3% to $1,498.5 million from $1,205.9 million in the comparable period last year. Organic net sales growth was approximately 1.7%.

Net income for the twenty-six week period ended April 2, 2016 increased 22.8% to $253.5 million, or $4.44 per share, compared with $206.4 million, or $3.59 per share, in the comparable period last year. The increase in net income primarily reflects the increase in net sales described above, partially offset by higher interest expense, acquisition-related costs and non-cash compensation expense.

Adjusted net income for the twenty-six week period ended April 2, 2016 rose 30.6% to $289.2 million, or $5.12 per share, from $221.4 million, or $3.91 per share, in the comparable period a year ago.

EBITDA for the twenty-six week period ended April 2, 2016 increased 19.6% to $643.7 million from $538.1 million for the comparable period a year ago. EBITDA As Defined for the period increased 23.3% to $688.0 million compared with $557.8 million in the comparable period a year ago. EBITDA As Defined as a percentage of net sales for the period was 45.9%.

During the twenty-six week period ended April 2, 2016, TransDigm repurchased 1,015,387 shares of its common stock with a weighted-average price per share of $204.61 at an aggregate cost of approximately $208 million. As of April 2, 2016, the remaining amount of repurchases allowed

2


under the $450 million stock repurchase program authorized by our Board of Directors on January 21, 2016 was approximately $341 million.
 
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 2016 Outlook

Mr. Howley continued, "We are increasing the full year fiscal 2016 EBITDA as Defined guidance primarily due to the stronger margins experienced to date and expected for the second half of our fiscal year. Our earnings per share guidance was increased additionally due to shares repurchased in our second quarter."

Assuming no additional acquisitions, the revised guidance is as follows:
•
Net sales are anticipated to be in the range of $3,151 million to $3,181 million compared with $2,707 million in fiscal 2015;
•
EBITDA As Defined is anticipated to be in the range of $1,450 million to $1,470 million compared with $1,234 million in fiscal 2015;
•
Net income is anticipated to be in the range of $558 million to $572 million compared with $447 million in fiscal 2015;
•
Earnings per share are expected to be in the range of $9.89 to $10.13 per share based upon weighted average shares outstanding of 56.2 million compared with $7.84 per share in fiscal 2015; and
•
Adjusted earnings per share are expected to be in the range of $11.04 to $11.28 per share compared with $9.01 per share in fiscal 2015.

Earnings Conference Call
TransDigm Group will host a conference call for investors and security analysts on May 10, 2016, beginning at 11:00 a.m., Eastern Time. To join the call, dial (888) 558-9538 and enter the pass code 2322837. International callers should dial (760) 666-3183 and use the same pass code. A live audio webcast can be accessed online at http://www.transdigm.com. A slide presentation will also be available for reference during the conference call; go to the investor relations page of our website and click on “Presentations.”
The call will be archived on the website and available for replay at approximately 2:00 p.m., Eastern Time. A telephone replay will be available for two weeks by dialing (855) 859-2056 and entering the pass code 2322837. International callers should dial (404) 537-3406 and use the same pass code.

3


About TransDigm Group
TransDigm Group, through its wholly-owned subsidiaries, is a leading global designer, producer and supplier of highly engineered aircraft components for use on nearly all commercial and military aircraft in service today. Major product offerings, substantially all of which are ultimately provided to end-users in the aerospace industry, include mechanical/electro-mechanical actuators and controls, ignition systems and engine technology, specialized pumps and valves, power conditioning devices, specialized AC/DC electric motors and generators, NiCad batteries and chargers, engineered latching and locking devices, rods and locking devices, engineered connectors and elastomers, cockpit security components and systems, specialized cockpit displays, aircraft audio systems, specialized lavatory components, seatbelts and safety restraints, engineered interior surfaces and related components, lighting and control technology, military personnel parachutes, high performance hoists, winches and lifting devices, and cargo loading, handling and delivery systems.
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. TransDigm Group defines EBITDA as earnings before interest, taxes, depreciation and amortization and defines EBITDA As Defined as EBITDA plus certain non-operating items, refinancing costs, acquisition-related costs, transaction-related costs and non-cash charges incurred in connection with certain employee benefit plans. TransDigm Group defines adjusted net income as net income plus purchase accounting backlog amortization expense, effects from the sale on businesses, refinancing costs, acquisition-related costs, transaction-related costs and non-cash charges incurred in connection with certain employee benefit plans. EBITDA As Defined Margin represents EBITDA As Defined as a percentage of net sales. TransDigm Group defines adjusted diluted earnings per share as adjusted net income divided by the total shares for basic and diluted earnings per share. For more information regarding the computation of EBITDA, EBITDA As Defined and adjusted net income and adjusted earnings per share, please see the attached financial tables.
TransDigm Group presents these non-GAAP financial measures because it believes that they are useful indicators of its operating performance. TransDigm Group believes that EBITDA is useful to investors because it is frequently used by securities analysts, investors and other interested parties to measure operating performance among companies with different capital structures, effective tax rates and tax attributes, capitalized asset values and employee compensation structures, all of which can vary substantially from company to company. In addition, analysts, rating agencies and others use EBITDA to evaluate a company’s ability to incur and service debt. EBITDA As Defined is used to measure TransDigm Inc.’s compliance with the financial covenant contained in its credit facility. TransDigm Group’s management also uses EBITDA As Defined to review and assess its operating performance, to prepare its annual budget and financial projections and to review and evaluate its management team in connection with employee incentive programs. Moreover, TransDigm Group’s management uses EBITDA As Defined to evaluate acquisitions and as a liquidity measure. In addition, TransDigm Group’s management uses adjusted net income as a measure of comparable operating performance between time periods and among companies as it is reflective of changes in pricing decisions, cost controls and other factors that affect operating performance.

4


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, earnings per share, cash flows from operating activities or other measures of performance determined in accordance with GAAP. In addition, TransDigm Group’s calculation of these non-GAAP financial measures may not be comparable to the calculation of similarly titled measures reported by other companies.
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 GAAP. Some of these limitations are:
 
•
 
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 2016 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 which could affect TransDigm Group’s actual results and could cause its actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, TransDigm Group. These risks and uncertainties include but are not limited to: the sensitivity of our business to the number of flight hours that our customers’ planes spend aloft and our customers’ profitability, both of which are affected by general economic conditions; future terrorist attacks; cyber-security risks and natural disasters; our reliance on certain customers; the U.S. defense budget and risks associated with being a government supplier; failure to maintain government or industry approvals; failure to complete or

5


successfully integrate acquisitions; our substantial indebtedness; potential environmental liabilities; increases in costs that cannot be recovered in product pricing; risks associated with our international sales and operations; and other risk factors. Further information regarding the important factors that could cause actual results to differ materially from projected results can be found in TransDigm Group’s Annual Report on Form 10-K and other reports that TransDigm Group or its subsidiaries have filed with the Securities and Exchange Commission. Except as required by law, TransDigm Group undertakes no obligation to revise or update the forward-looking statements contained in this press release.
Contact:
 
Liza Sabol
 
 
Investor Relations
 
 
216-706-2945
 
 


6



TRANSDIGM GROUP INCORPORATED
 
 
 
 
 
 
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 
 
 
 
FOR THE THIRTEEN AND TWENTY-SIX WEEK PERIODS ENDED
 
Table 1
APRIL 2, 2016 AND MARCH 28, 2015
 
(Amounts in thousands, except per share amounts)
 
 
 
 
 
(Unaudited)
 
 
 
 
 
 
 
 
 
 
Thirteen Week Periods Ended
 
Twenty-Six Week Periods Ended
 
 
April 2, 2016
 
March 28, 2015
 
April 2, 2016
 
March 28, 2015
NET SALES
 
$
796,801

 
$
619,030

 
$
1,498,496

 
$
1,205,928

COST OF SALES
 
371,140

 
277,413

 
698,267

 
543,138

GROSS PROFIT
 
425,661

 
341,617

 
800,229

 
662,790

SELLING AND ADMINISTRATIVE EXPENSES
 
95,064

 
74,026

 
177,267

 
141,505

AMORTIZATION OF INTANGIBLE ASSETS
 
18,522

 
11,030

 
34,845

 
24,056

INCOME FROM OPERATIONS
 
312,075

 
256,561

 
588,117

 
497,229

INTEREST EXPENSE - NET
 
111,288

 
99,892

 
223,271

 
198,827

INCOME BEFORE INCOME TAXES
 
200,787

 
156,669

 
364,846

 
298,402

INCOME TAX PROVISION
 
62,160

 
45,775

 
111,317

 
91,975

NET INCOME
 
$
138,627

 
$
110,894

 
$
253,529

 
$
206,427

NET INCOME APPLICABLE TO COMMON STOCK
 
$
138,627

 
$
110,894

 
$
250,529

 
$
203,062

Net earnings per share:
 
 
 
 
 
 
 
 
  Basic and diluted
 
$
2.47

 
$
1.96

 
$
4.44

 
$
3.59

Weighted-average shares outstanding:
 
 
 
 
 
 
 
 
Basic and diluted
 
56,134

 
56,604

 
56,475

 
56,603



7


TRANSDIGM GROUP INCORPORATED
 
 
 
 
 
 
SUPPLEMENTAL INFORMATION - RECONCILIATION OF EBITDA,
 
 
EBITDA AS DEFINED TO NET INCOME
 
 
 
 
FOR THE THIRTEEN AND TWENTY-SIX WEEK PERIODS ENDED
 
Table 2
APRIL 2, 2016 AND MARCH 28, 2015
 
(Amounts in thousands, except per share amounts)
 
 
 
 
 
(Unaudited)
 
 
 
 
 
 
 
 
 
 
Thirteen Week Periods Ended
 
Twenty-Six Week Periods Ended
 
 
April 2, 2016
 
March 28, 2015
 
April 2, 2016
 
March 28, 2015
Net income
 
$
138,627

 
$
110,894

 
$
253,529

 
$
206,427

Adjustments:
 
 
 
 
 
 
 
 
Depreciation and amortization expense
 
29,337

 
19,061

 
55,537

 
40,846

Interest expense - net
 
111,288

 
99,892

 
223,271

 
198,827

Income tax provision
 
62,160

 
45,775

 
111,317

 
91,975

EBITDA
 
341,412

 
275,622

 
643,654

 
538,075

Adjustments:
 
 
 
 
 
 
 
 
Acquisition-related expenses and adjustments (1)
 
17,623

 
5,315

 
24,847

 
7,016

Non-cash stock compensation expense (2)
 
11,767

 
7,830

 
22,448

 
13,594

Other, net (3)
 
(2,197
)
 
(698
)
 
(2,931
)
 
(888
)
Gross Adjustments to EBITDA
 
27,193

 
12,447

 
44,364

 
19,722

EBITDA As Defined
 
$
368,605

 
$
288,069

 
$
688,018

 
$
557,797

EBITDA As Defined, Margin (4)
 
46.3
%
 
46.5
%
 
45.9
%
 
46.3
%
(1) Represents accounting adjustments to inventory associated with acquisitions of businesses and product lines that were charged to cost of sales when the inventory was sold: costs incurred to integrate acquired businesses and product lines into TD Group's operations, facility relocation costs and other acquisition-related costs; transaction-related costs comprising deal fees; legal, financial and tax due diligence expenses; and valuation costs that are required to be expensed as incurred.
 
(2) Represents the compensation expense recognized by TD Group under our stock incentive plans.
 
(3) Primarily represents foreign currency transaction gain or loss on intercompany loans to be settled and gain or loss on sale of fixed assets.
 
(4) The EBITDA As Defined margin represents the amount of EBITDA As Defined as a percentage of sales.


8


TRANSDIGM GROUP INCORPORATED
 
 
 
 
 
 
SUPPLEMENTAL INFORMATION - RECONCILIATION OF
 
 
 
 
REPORTED EARNINGS PER SHARE TO
 
 
 
 
ADJUSTED EARNINGS PER SHARE
 
 
 
 
FOR THE THIRTEEN AND TWENTY-SIX WEEK PERIODS ENDED
 
Table 3
APRIL 2, 2016 AND MARCH 28, 2015
 
(Amounts in thousands, except per share amounts)
 
 
 
 
 
(Unaudited)
 
 
 
 
 
 
 
 
 
 
Thirteen Week Periods Ended
 
Twenty-Six Week Periods Ended
 
 
April 2, 2016
 
March 28, 2015
 
April 2, 2016
 
March 28, 2015
Reported Earnings Per Share
 
 
 
 
 
 
 
 
Net income
 
$
138,627

 
$
110,894

 
$
253,529

 
$
206,427

Less: dividends on participating securities
 
—

 
—

 
(3,000
)
 
(3,365
)
Net income applicable to common stock - basic and diluted
 
$
138,627

 
$
110,894

 
$
250,529

 
$
203,062

Weighted-average shares outstanding under the two-class method
 
 
 
 
 
 
 
 
Weighted-average common shares outstanding
 
53,222

 
52,915

 
53,468

 
52,721

Vested options deemed participating securities
 
2,912

 
3,689

 
3,007

 
3,882

Total shares for basic and diluted earnings per share
 
56,134

 
56,604

 
56,475

 
56,603

Basic and diluted earnings per share
 
$
2.47

 
$
1.96

 
$
4.44

 
$
3.59

Adjusted Earnings Per Share
 
 
 
 
Net income
 
$
138,627

 
$
110,894

 
$
253,529

 
$
206,427

Gross adjustments to EBITDA
 
27,193

 
12,447

 
44,364

 
19,722

Purchase accounting backlog amortization
 
4,458

 
—

 
6,998

 
1,966

Tax adjustment
 
(9,799
)
 
(3,673
)
 
(15,671
)
 
(6,685
)
Adjusted net income
 
$
160,479

 
$
119,668

 
$
289,220

 
$
221,430

Adjusted diluted earnings per share under the two-class method
 
$
2.86

 
$
2.11

 
$
5.12

 
$
3.91

Diluted Earnings Per Share to Adjusted Earnings Per Share
 
 
 
 
Diluted earnings per share
 
$
2.47

 
$
1.96

 
$
4.44

 
$
3.59

Adjustments to diluted earnings per share:
 
 
 
 
 
 
 
 
   Inclusion of the dividend equivalent payments
 
—

 
—

 
0.05

 
0.06

   Non-cash stock compensation expense
 
0.14

 
0.09

 
0.28

 
0.16

   Acquisition-related expenses
 
0.28

 
0.06

 
0.39

 
0.10

   Other, net
 
(0.03
)
 
—

 
(0.04
)
 
—

Adjusted earnings per share
 
$
2.86

 
$
2.11

 
$
5.12

 
$
3.91




9


TRANSDIGM GROUP INCORPORATED
 
 
 
 
SUPPLEMENTAL INFORMATION - RECONCILIATION OF NET CASH
 
Table 4
PROVIDED BY OPERATING ACTIVITIES TO EBITDA,
 
EBITDA AS DEFINED
 
FOR THE TWENTY-SIX WEEK PERIODS ENDED
 
APRIL 2, 2016 AND MARCH 28, 2015
 
 
 
(Amounts in thousands)
 
 
 
 
(Unaudited)
 
 
 
 
 
 
Twenty-Six Week Periods Ended
 
 
April 2, 2016
 
March 28, 2015
Net cash provided by operating activities
 
$
269,160

 
$
182,916

Adjustments:
 
 
 
 
Changes in assets and liabilities, net of effects from acquisitions of businesses
 
54,922

 
53,397

Interest expense - net (1)
 
215,607

 
190,880

Income tax provision - current
 
108,693

 
86,447

Non-cash equity compensation (2)
 
(22,448
)
 
(13,594
)
Excess tax benefit from exercise of stock options
 
17,720

 
38,029

EBITDA
 
643,654

 
538,075

Adjustments:
 
 
 
 
Acquisition-related expenses (3)
 
24,847

 
7,016

Non-cash stock compensation expense (2)
 
22,448

 
13,594

Other, net (4)
 
(2,931
)
 
(888
)
EBITDA As Defined
 
$
688,018

 
$
557,797


(1) Represents interest expense excluding the amortization of debt issue costs and premium and discount on debt.
 
(2) Represents the compensation expense recognized by TD Group under our stock incentive plans.
 
(3) Represents accounting adjustments to inventory associated with acquisitions of businesses and product lines that were charged to cost of sales when the inventory was sold; costs incurred to integrate acquired businesses and product lines into TD Group's operations, facility relocation costs and other acquisition-related costs; transaction-related costs comprising deal fees; legal, financial and tax due diligence expenses and valuation costs that are required to be expensed as incurred.
 
(4) Primarily represents foreign currency transaction gain or loss on intercompany loans to be settled and gain or loss on sale of fixed assets.


10


TRANSDIGM GROUP INCORPORATED
 
 
 
SUPPLEMENTAL INFORMATION - BALANCE SHEET DATA
 
Table 5

(Amounts in thousands)
 
 
 
(Unaudited)
 
 
 
 
 
 
April 2, 2016
 
September 30, 2015
Cash and cash equivalents
 
612,015

 
714,033

Trade accounts receivable - net
 
480,579

 
444,072

Inventories - net
 
634,129

 
591,401

Current portion of long-term debt, net of debt issuance costs
 
43,464

 
43,427

Short-term borrowings-trade receivable securitization facility, net of debt issuance costs
 
199,895

 
199,792

Accounts payable
 
125,929

 
142,822

Accrued current liabilities
 
306,708

 
271,553

Long-term debt, net of debt issuance costs
 
8,091,934

 
8,106,383

Total stockholders' deficit
 
(961,818
)
 
(1,038,306
)



11

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