TransDigm(US:TDG)2022-08-08 16:00PART I FINANCIAL INFORMATION ITEM 1 Financial Statements This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of income, comprehensive income, changes in stockholders' deficit, and cash flows, along with detailed notes explaining the company's accounting policies, acquisitions, debt, and other financial information Condensed Consolidated Balance Sheets – July 2, 2022 and September 30, 2021 Provides a snapshot of the company's financial position, showing assets, liabilities, and stockholders' deficit as of July 2, 2022, and September 30, 2021, with key changes including a decrease in total assets and an increase in treasury stock | Metric | July 2, 2022 (millions) | September 30, 2021 (millions) | Change (millions) | | :-------------------------------- | :---------------------- | :-------------------------- | :---------------- | | Total Assets | $18,819 | $19,315 | $(496) | | Total Liabilities | $21,787 | $22,225 | $(438) | | Total Stockholders' Deficit | $(2,968) | $(2,910) | $(58) | | Cash and cash equivalents | $3,808 | $4,787 | $(979) | | Treasury stock | $(1,706) | $(794) | $(912) | Condensed Consolidated Statements of Income – Thirteen and Thirty-Nine Week Periods Ended July 2, 2022 and July 3, 2021 Presents financial performance for the thirteen and thirty-nine week periods, noting increased net sales and varied net income attributable to TD Group | Metric | July 2, 2022 (millions) | July 3, 2021 (millions) | Change (millions) | % Change | | :------------------------------------- | :---------------------- | :---------------------- | :---------------- | :------- | | Net Sales | $1,398 | $1,218 | $180 | 14.8% | | Gross Profit | $816 | $655 | $161 | 24.6% | | Income from Operations | $599 | $447 | $152 | 34.0% | | Net Income Attributable to TD Group | $238 | $317 | $(79) | (24.9)% | | Earnings per share | $4.10 | $5.43 | $(1.33) | (24.5)% | | Metric | July 2, 2022 (millions) | July 3, 2021 (millions) | Change (millions) | % Change | | :------------------------------------- | :---------------------- | :---------------------- | :---------------- | :------- | | Net Sales | $3,919 | $3,519 | $400 | 11.4% | | Gross Profit | $2,213 | $1,788 | $425 | 23.8% | | Income from Operations | $1,574 | $1,156 | $418 | 36.2% | | Net Income Attributable to TD Group | $600 | $471 | $129 | 27.4% | | Earnings per share | $9.44 | $6.83 | $2.61 | 38.2% | Condensed Consolidated Statements of Comprehensive Income – Thirteen and Thirty-Nine Week Periods Ended July 2, 2022 and July 3, 2021 Details changes in comprehensive income, including net income and other comprehensive income (loss) components, showing a decrease for the thirteen-week period but remaining flat for the thirty-nine-week period | Metric | Thirteen Week Periods Ended July 2, 2022 (millions) | Thirteen Week Periods Ended July 3, 2021 (millions) | Thirty-Nine Week Periods Ended July 2, 2022 (millions) | Thirty-Nine Week Periods Ended July 3, 2021 (millions) | | :------------------------------------------ | :-------------------------------------------------- | :-------------------------------------------------- | :--------------------------------------------------- | :--------------------------------------------------- | | Net income attributable to TD Group | $238 | $317 | $600 | $471 | | Other comprehensive (loss) income, net of tax, attributable to TD Group | $(125) | $12 | $50 | $179 | | TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO TD GROUP | $113 | $329 | $650 | $650 | - Foreign currency translation adjustment significantly impacted other comprehensive income, moving from a gain of $10 million (13 weeks ended July 3, 2021) to a loss of $(155) million (13 weeks ended July 2, 2022)8 Condensed Consolidated Statements of Changes in Stockholders' Deficit – Thirteen and Thirty-Nine Week Periods Ended July 2, 2022 and July 3, 2021 Outlines changes in stockholders' deficit, including common stock, additional paid-in capital, accumulated deficit, accumulated other comprehensive loss, and treasury stock, with a notable increase in treasury stock due to repurchases | Metric | July 2, 2022 (millions) | September 30, 2021 (millions) | Change (millions) | | :-------------------------------- | :---------------------- | :-------------------------- | :---------------- | | Total TD Group stockholders' deficit | $(2,976) | $(2,916) | $(60) | | Treasury stock, at cost | $(1,706) | $(794) | $(912) | | Accumulated deficit | $(3,114) | $(3,705) | $591 | - The company repurchased 1,490,413 shares of common stock for $912 million during the second and third quarters of fiscal 2022, significantly increasing treasury stock48 Condensed Consolidated Statements of Cash Flows – Thirty-Nine Week Periods Ended July 2, 2022 and July 3, 2021 Details cash flows from operating, investing, and financing activities, showing increased operating cash flow, decreased cash used in investing, and a significant shift to net cash use in financing due to stock repurchases | Activity | July 2, 2022 (millions) | July 3, 2021 (millions) | Change (millions) | | :-------------------------------- | :---------------------- | :---------------------- | :---------------- | | Net cash provided by operating activities | $675 | $624 | $51 | | Net cash used in investing activities | $(505) | $(748) | $243 | | Net cash used in financing activities | $(1,116) | $(74) | $(1,042) | | Net decrease in cash and cash equivalents | $(979) | $(188) | $(791) | - The significant increase in cash used in financing activities is primarily due to $912 million in common stock repurchases in the current period, compared to none in the prior year12163 Notes to Condensed Consolidated Financial Statements These notes provide detailed explanations and disclosures for the condensed consolidated financial statements, covering business description, accounting policies, acquisitions, debt, income taxes, fair value measurements, derivatives, segment information, retirement plans, comprehensive loss, leases, commitments, and subsequent events Note 1. DESCRIPTION OF THE BUSINESS TransDigm Group Incorporated is a leading global designer, producer, and supplier of highly engineered aircraft components for commercial and military aircraft, offering a broad range of proprietary aerospace products - TransDigm Group Incorporated is a leading global designer, producer, and supplier of highly engineered aircraft components for use on nearly every commercial and military aircraft13 - The company offers a broad range of proprietary aerospace products, including mechanical/electro-mechanical actuators, ignition systems, specialized pumps and valves, and cockpit security components13 [