Q2 2017 Supplemental Financial Information May 4, 2017 Exhibit 99.2
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Strategic Direction Key Focus Areas Maintained A high-performing aerospace and defense company whose engaged employees deliver value through world-class products, services, and technologies. Profitable & Balanced Sales Growth Enterprise Excellence Leverage the Enterprise Employee Engagement Regulatory & Customer Compliance
Q2 2017 Financial Results Sales of $509 million, up 3.8% * Organic sales increase $23 million GAAP EPS of $1.17 (per diluted share) Adjusted EPS of $1.20 ** Free cash flow of $62 million ** * Comparison is to fiscal Q2 2016 ** Excludes certain discrete items; see Page 1 regarding non-GAAP financial measures. Strong Performance in Q2 2017
Q2 2017 Year-over-Year (YOY) Summary Dollars in millions, except EPS Q2 2017 Q2 2016 Change Sales $ 509 $ 490 $ 19 Gross Margin $ 176 $ 156 $ 20 - % of sales 34.5% 31.9% 2.6% Operating Earnings from Continuing Operations $ 57 $ 28 $ 29 - % of sales 11.2% 5.7% 5.5% Earnings from Continuing Operations $ 35 $ 17 $ 18 Earnings Per Diluted Share from Continuing Operations $ 1.17 $ 0.57 $ 0.60
Q2 2017 Sales Change (YOY) Items Sales Q2 2016 $ 490 Foreign currency translation (6) FX forward contract 2 Sales volume 23 Q2 2017 $ 509 Dollars in millions
Q2 2017 Segment Sales Change (YOY) Total Change Organic¹ FX Avionics & Controls 8% 6% 2% Sensors & Systems 4% 6% (2)% Advanced Materials (2)% 1% (3)% Total 4% 5% (1)% ¹ Q2 2017 organic sales growth represents the total reported increase within the company’s continuing operations less the impact of all foreign currency translation and hedging activities.
Q2 2017 Gross Margin Change (YOY) Items Gross Margin Q2 2016 $ 156 Foreign currency translation - FX forward contract 2 Sales volume / mix 13 Other 5 Q2 2017 $ 176 Dollars in millions
Q2 2017 Earnings Adjustment Dollars in millions, except EPS Adjustments are net of tax Earnings from Continuing Ops Diluted EPS GAAP $ 35 $ 1.17 Advanced Displays Integration Costs and Compliance Costs 1 0.03 Adjusted * $ 36 $ 1.20 * See Page 1 regarding non-GAAP financial measures.
YTD Q2 2017 Free Cash Flow Reconciliation YTD Q2 2017 YTD Q2 2016 Net Earnings $ 52 $ 20 Depreciation and amortization 51 49 Change in working capital (A/R, Inventory, A/P) (5) 2 Other (7) 8 Cash flow from operations $ 91 $ 79 Capital expenditures (29) (42) Free cash flow * $ 62 $ 37 Dollars in millions; GAAP results Amounts included in Free Cash Flow YTD Q2 2017 YTD Q2 2016 Adjustments to Net Income (net of tax) * $ 4 $ 19 Loss from Discontinued Operations $ (5) $ (7) * See Page 1 regarding non-GAAP financial measures.
Q2 2017 EBITDA Q2 2017 Q2 2016 Operating Earnings from Continuing Operations $ 57 $ 28 Depreciation and amortization 25 24 EBITDA from Continuing Operations * $ 82 $ 52 Dollars in millions * See Page 1 regarding non-GAAP financial measures.
YTD Q2 2017 EBITDA * See Page 1 regarding non-GAAP financial measures. YTD Q2 2017 YTD Q2 2016 Operating Earnings from Continuing Operations $ 87 $ 45 Depreciation and amortization 51 48 EBITDA from Continuing Operations * $ 138 $ 93 Dollars in millions
2017 Guidance Guidance Sales $2.0B - $2.05B GAAP EPS (diluted, continuing ops) $4.30 - $4.70 Adjusted EPS * (diluted, continuing ops) $4.50 - $4.90 EBITDA* $295M - $315M Free Cash Flow * $165M - $185M Guidance 2017 Adjusted EPS GAAP EPS (diluted, continuing ops) $4.30 - $4.70 Compliance Costs $0.18 Advanced Displays Integration Costs $0.02 Adjusted EPS * (diluted, continuing ops) $4.50 - $4.90 * See Page 1 regarding non-GAAP financial measures. Guidance Unchanged
2017 Guidance Assumptions Interest expense ~$29 million Tax rate ~24%-25% Average diluted shares outstanding 29.830 million Depreciation / Amortization expense ~$100 million Cap Ex $55 - $60 million
2017 Tax Outlook Q2 2017 Supplemental Financial Information 2017 Q1 Discrete Tax Benefits 2017 Q1 Tax Rate (Excluding Discrete Benefits) 2017 Q1 Tax Rate 2017 Full-Year Estimated Tax Rate ~ 24% - 25% 2017 Q2 Tax Rate 28.4% Effective Tax Rate YTD 2017 Q2 Tax Rate 20.2% Effective Tax Rate 27.7% Tax Rate (Excl. Discrete Items)
Share Repurchase Update # Shares In thousands $ Value In millions $ Authorization Remaining In millions FY 2014 269 $ 30.3 FY 2015 2,562 259.5 FY 2016 305 18.7 H1 2017 - - Total since inception * 3,136 $ 308.5 $ 91.5 * $400 million total authorization for share repurchase.
Appendix
Q2 2017 Adjusted Gross Margin and EBIT * * See Page 1 regarding non-GAAP financial measures
Q2 2016 Adjusted Gross Margin and EBIT * * See Page 1 regarding non-GAAP financial measures
YTD 2017 Adjusted Gross Margin and EBIT * * See Page 1 regarding non-GAAP financial measures
YTD 2016 Adjusted Gross Margin and EBIT * * See Page 1 regarding non-GAAP financial measures
