Atmus Filtration Technologies Inc. (Atmus; NYSE: ATMU), a global
leader in filtration and media solutions, today reported financial
results for its second quarter that ended June 30, 2023.
Second Quarter Highlights
- Net sales of $414 million
- GAAP net income of $46 million
- Diluted earnings per share of $0.55
- Adjusted earnings per share of $0.63
- Adjusted EBITDA of $80 million and adjusted EBITDA margin of
19.3 percent
- Cash provided by operating activities was $46 million
- Adjusted free cash flow was $35 million
“Atmus delivered strong sales and operating results
during our first quarter as a public company,” said Steph Disher,
Chief Executive Officer of Atmus. “Reflecting on our solid results
and our Initial Public Offering on May 30, I am thankful for the
hard work and dedication of the entire Atmus team as we’ve taken
significant steps in the second quarter toward becoming a fully
independent company and unlocking our growth potential.”
Second-Quarter Results
For the second quarter of 2023, Atmus posted net sales of $414
million, compared to $393 million in the second quarter of 2022, an
increase of approximately 5 percent. The increase in sales was
primarily driven by an increase in pricing, partially offset by a
decrease in volume and negative impacts of currency.
Gross margin was $114 million, compared to $95 million in the
second quarter of fiscal year 2022, an increase of approximately 20
percent. Gross margin as a percent of net sales was 27.7% compared
to 24.3% in the same period last year. The increase in gross margin
and gross margin as a percent of net sales was driven by an
increase in pricing, favorable commodities and freight costs,
partially offset by an increase in variable compensation,
unfavorable currency impacts and lower volumes.
Adjusted EBITDA was $80 million, compared to $67 million in the
second quarter of 2022. Adjusted EBITDA margin was 19.3% compared
to 17.1% in the same period last year. Adjusted EBITDA in the
second quarter of 2023 excludes $9 million of one-time costs
associated with the separation of our business from Cummins Inc.
compared to the prior year quarter which excludes $1 million of
one-time costs.
Net income was $46 million, or $0.55 of diluted earnings per
share, compared to $49 million, or $0.59 of diluted earnings per
share in the same period last year.
Adjusted earnings per share was $0.63 compared to $0.60 of
adjusted earnings per share in the same period last year.
The effective tax rate for the second quarter was 24.5%.
Cash provided by operating activities was $46 million in the
second quarter of 2023, compared to cash provided by operating
activities of $40 million in the second quarter of 2022.
Outlook for Fiscal Year 2023
The company’s guidance for year 2023 is as follows:
- Revenue to be in the range of $1,580 million to $1,630
million
- Adjusted earnings per share in the range of $2.05 to $2.25
- Adjusted EBITDA margin to be in the range of 17.25 percent to
18.25 percent
Second Quarter 2023 Conference Call and Webcast
Atmus will host a conference call and webcast to discuss the
company's second quarter 2023 results on Wednesday, August 9, at
10:00 a.m. CT.
A live webcast and replay of the conference call can be accessed
from the Atmus investor relations website at
http://investors.atmus.com.
About Atmus Filtration Technologies Inc.
Atmus Filtration Technologies Inc. is a global leader in
filtration and media solutions. For more than 65 years, the company
has combined its culture of innovation with a rich history of
designing and manufacturing filtration solutions. With a presence
in more than 150 countries on six continents, Atmus serves
customers across truck, bus, agriculture, construction, mining,
marine and power generation vehicle and equipment markets, along
with providing comprehensive aftermarket support and solutions.
Headquartered in Nashville, Tennessee (U.S.), Atmus employs
approximately 4,250 people globally who are committed to creating a
better future by protecting what is important. Learn more at
https://www.atmus.com.
Forward-looking disclosure statement
This press release contains forward-looking statements within
the meaning of the safe harbor provisions of the United States
Private Securities Litigation Reform Act of 1995, including,
without limitation, those that are based on current expectations,
estimates and projections about the industries in which we operate
and management’s views, plans, objectives, projections, beliefs and
assumptions. Forward-looking statements may be identified by the
use of words such as “anticipates,” “expects,” “forecasts,”
“intends,” “plans,” “believes,” “seeks,” “estimates,” “could,”
“should,” “may” or words of similar meaning. All statements other
than statements of historical fact are forward-looking statements,
including, without limitation, statements regarding the outlook for
our future business and financial performance, discussions of
future operations, our strategy for growth and market position.
These statements are not guarantees of future performance and
involve certain risks, uncertainties and assumptions, which are
difficult to predict. If the underlying assumptions prove correct,
or known or unknown risks or uncertainties materialize, our actual
outcomes, results and financial condition may differ materially
from what is expressed, implied or forecasted in such
forward-looking statements. Risks and uncertainties include, but
are not limited to, those reflected in the section titled “Risk
Factors” in our final prospectus relating to our initial public
offering, as filed with the Securities and Exchange Commission (the
“SEC”) on May 26, 2023, relating to our Registration Statement on
Form S-1, and those reflected elsewhere in our other filings with
the SEC. You are cautioned not to place undue reliance on
forward-looking statements. The forward-looking statements made
herein are made only as of the date hereof and we undertake no
obligation to publicly update or to revise any forward-looking
statement, whether as a result of new information, future
developments or otherwise, except as may be required by law.
Non-GAAP measures
We use non-GAAP financial information and believe it is useful
to investors as it provides additional information to facilitate
comparisons of historical operating results, identify trends in our
underlying operating results and provide additional insight and
transparency on how we evaluate our business. We use non-GAAP
financial measures to budget, make operating and strategic
decisions and evaluate our performance. We have detailed the
non-GAAP adjustments that we make in our non-GAAP definitions
below. We believe the non-GAAP measures should always be considered
along with the related U.S. GAAP financial measures. We have
provided the reconciliations between the U.S. GAAP and non-GAAP
financial measures and we also discuss our underlying U.S. GAAP
results throughout our Management’s Discussion and Analysis of
Financial Condition and Results of Operations in Form 10-Q.
Our primary non-GAAP financial measures are listed below and
reflect how we evaluate our current and prior-year operating
results. As new events or circumstances arise, these definitions
could change. When our definitions change, we provide the updated
definitions and present the related non-GAAP historical results on
a comparable basis.
- “EBITDA” is defined as earnings or losses before interest
expense, income taxes, depreciation and amortization and “EBITDA
margin” is defined as EBITDA as a percent of net sales. We believe
EBITDA and EBITDA margin are useful measures of our operating
performance as they assist investors and debt holders in comparing
our performance on a consistent basis without regard to financing
methods, capital structure, income taxes or depreciation and
amortization methods, which can vary significantly depending upon
many factors. Additionally, we believe these metrics are widely
used by investors, securities analysts, ratings agencies and others
in our industry in evaluating performance.
- “Adjusted EBITDA” is defined as EBITDA after adding back
certain one-time expenses, reflected in cost of sales and selling,
general and administrative expenses, associated with becoming a
standalone public company and “Adjusted EBITDA margin” is defined
as Adjusted EBITDA as a percent of net sales. We believe Adjusted
EBITDA and Adjusted EBITDA margin are useful measures of our
operating performance as it allows investors and debt holders to
compare our performance on a consistent basis without regard to
one-time costs attributable to our becoming a standalone public
company.
- “Adjusted earnings per share” is defined as diluted earnings
per share (the most comparable U.S. GAAP financial measure) after
adding back certain one-time expenses, reflected in cost of sales
and selling, general and administrative expenses, associated with
becoming a standalone public company less the related tax impact of
the same one-time expenses. We believe Adjusted earnings per share
provides improved comparability of underlying operating
results.
- “Free cash flow” is defined as cash flows provided by (used
for) operating activities less capital expenditures and “Adjusted
free cash flow” is defined as Free cash flow after adding back
certain onetime capital expenditures associated with becoming a
standalone public company. We believe Free cash flow and Adjusted
free cash flow are useful metrics used by management and investors
to analyze our ability to service and repay debt and return value
to shareholders.
The metrics defined above are not in accordance with, or
alternatives for, U.S. GAAP financial measures and may not be
consistent with measures used by other companies. It should be
considered supplemental data; however, the amounts included in the
EBITDA, EBITDA margin, Adjusted EBITDA, Adjusted EBITDA margin,
Adjusted earnings per share, Free cash flow and Adjusted free cash
flow calculations are derived from amounts included in the
consolidated statements of net income.
We do not consider our non-GAAP financial measures as superior
to, or a substitute for, the equivalent measures calculated and
presented in accordance with GAAP. Some of the limitations are:
such measures do not reflect our cash expenditures, or future
requirements for capital expenditures or contractual commitments;
such measures do not reflect changes in, or cash requirements for,
our working capital needs; such measures do not reflect the
interest expense or the cash requirements necessary to service
interest or principal payments on our debt; although depreciation
and amortization are non-cash charges, the assets being depreciated
and amortized will often have to be replaced in the future and such
measures do not reflect any cash requirements for such
replacements; and other companies in our industry may calculate
such measures differently than we do, limiting their usefulness as
comparative measures. To properly and prudently evaluate our
business, we encourage you to review the unaudited condensed
consolidated financial statements included in our SEC filings and
not rely on a single financial measure to evaluate our
business.
ATMUS FILTRATION TECHNOLOGIES
INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF NET INCOME
(in millions of U.S. dollars,
except per share data)
(Unaudited)
For the Three Months Ended
June 30,
For the Six Months Ended
June 30,
2023
2022
2023
2022
NET SALES(a)
$
413.6
$
393.2
$
832.2
$
775.7
Cost of sales
299.2
297.8
608.0
598.9
GROSS MARGIN
114.4
95.4
224.2
176.8
OPERATING EXPENSES AND INCOME
Selling, general and administrative
expenses
46.0
32.5
85.1
65.0
Research, development and engineering
expenses
12.3
9.5
22.1
19.9
Equity, royalty and interest income from
investees
8.3
5.5
16.7
14.2
Other operating expense, net
0.2
0.9
0.3
3.6
OPERATING INCOME
64.2
58.0
133.4
102.5
Interest expense
4.2
0.1
4.2
0.3
Other income, net
1.2
3.2
1.1
3.9
INCOME BEFORE INCOME TAXES
61.2
61.1
130.3
106.1
Income tax expense
15.0
11.9
31.4
22.1
NET INCOME
$
46.2
$
49.2
$
98.9
$
84.0
PER SHARE DATA:
Weighted-average shares for basic EPS
83.3
83.3
83.3
83.3
Weighted-average shares for diluted
EPS
83.3
83.3
83.3
83.3
Basic earnings per share
$
0.55
$
0.59
$
1.19
$
1.01
Diluted earnings per share
$
0.55
$
0.59
$
1.19
$
1.01
_________
(a)
Includes sales to related parties of $87.2
million and $176.3 million for the three and six months ended June
30, 2023, respectively, compared with $84.1 million and $170.0
million for the three and six months ended June 30, 2022,
respectively.
ATMUS FILTRATION TECHNOLOGIES
INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in millions of U.S. dollars,
except share data)
(Unaudited)
June 30, 2023
December 31,
2022
ASSETS
Cash and cash equivalents
$
139.6
$
—
Accounts and notes receivable, net
Trade and other receivables
192.5
174.2
Related party receivables
63.0
61.8
Inventories
253.8
245.0
Prepaid expenses and other current
assets
29.9
19.3
Total current assets
678.8
500.3
Property, plant and equipment, net
156.7
148.4
Investments and advances related to equity
method investees
75.0
77.0
Goodwill
84.7
84.7
Other assets
44.8
57.0
TOTAL ASSETS
$
1,040.0
$
867.4
LIABILITIES
Accounts payable (principally trade)
$
155.4
$
145.9
Related party payables
73.7
82.0
Accrued compensation, benefits and
retirement costs
25.7
18.2
Current portion of accrued product
warranty
6.1
5.9
Other accrued expenses
83.5
79.0
Total current liabilities
344.4
331.0
Long-term debt
650.0
—
Accrued product warranty
10.0
9.6
Other liabilities
34.1
71.2
TOTAL LIABILITIES
1,038.5
411.8
Commitments and contingencies (Note
10)
EQUITY
Common stock, $0.0001 par value
(2,000,000,000 shares authorized and 83,297,796 shares issued at
June 30, 2023)
—
—
Net parent investment
—
511.4
Additional paid-in capital
44.6
—
Retained earnings
14.8
—
Accumulated other comprehensive loss
(57.9
)
(55.8
)
TOTAL EQUITY
1.5
455.6
TOTAL LIABILITIES AND EQUITY
$
1,040.0
$
867.4
ATMUS FILTRATION TECHNOLOGIES
INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(in millions of U.S.
dollars)
(Unaudited)
For the Six Months Ended
June 30,
2023
2022
CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES
Net income
$
98.9
$
84.0
Adjustments to reconcile net income to
operating cash flows:
Depreciation and amortization
10.9
10.8
Deferred income taxes
3.7
0.2
Equity in income of investees, net of
dividends
1.2
2.4
Foreign currency remeasurement and
transaction exposure
(5.2
)
(2.6
)
Changes in current assets and
liabilities:
Trade and other receivables
(18.3
)
(17.7
)
Related party receivables
(1.8
)
(15.2
)
Inventories
(9.4
)
(38.3
)
Prepaid expenses and other current
assets
(10.8
)
(4.1
)
Accounts payable (principally trade)
9.7
12.9
Related party payables
(7.9
)
29.3
Other accrued expenses
14.8
(9.9
)
Changes in other liabilities
1.6
(3.1
)
Other, net
1.6
(9.0
)
Net cash provided by operating
activities
89.0
39.7
CASH USED IN INVESTING
ACTIVITIES
Capital expenditures
(19.1
)
(16.5
)
Net cash used in investing activities
(19.1
)
(16.5
)
CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES
Long-term debt proceeds
650.0
—
Net transfers to Parent
(580.3
)
(23.2
)
Net cash provided by (used in) financing
activities
69.7
(23.2
)
Net increase in cash and cash
equivalents
139.6
—
Cash and cash equivalents at beginning of
period
—
—
CASH AND CASH EQUIVALENTS AT END OF
PERIOD
$
139.6
$
—
SUPPLEMENTAL CASH FLOW
INFORMATION:
Non-cash investing and financing
activities:
Non-cash settlements with Parent
$
(29.4
)
$
—
Change in Capital expenditures
—
(2.7
)
ATMUS FILTRATION TECHNOLOGIES
INC. AND SUBSIDIARIES
EARNINGS PER SHARE -
RECONCILIATION
(in millions of U.S. dollars,
except share data)
(Unaudited)
For the Three Months Ended
June 30,
For the Six Months Ended
June 30,
2023
2022
2023
2022
(in millions, except per share
data)
Net income
$
46.2
$
49.2
$
98.9
$
84.0
Weighted-average shares for basic EPS
83.3
83.3
83.3
83.3
Plus incremental shares from assumed
conversions of long-term incentive plan shares
—
—
—
—
Weighted-average shares for diluted
EPS
83.3
83.3
83.3
83.3
Basic earnings per share
$
0.55
$
0.59
$
1.19
$
1.01
Diluted earnings per share
$
0.55
$
0.59
$
1.19
$
1.01
ATMUS FILTRATION TECHNOLOGIES
INC. AND SUBSIDIARIES
NET INCOME TO EBITDA AND
ADJUSTED EBITDA - RECONCILIATION
(in millions of U.S.
dollars)
(Unaudited)
For the Three Months Ended
June 30,
For the Six Months Ended June
30,
2023
2022
2023
2022
(in millions)
NET INCOME
$
46.2
$
49.2
$
98.9
$
84.0
Plus:
Interest expense
4.2
0.1
4.2
0.3
Income tax expense
15.0
11.9
31.4
22.1
Depreciation and amortization
5.5
5.4
10.9
10.8
EBITDA (non-GAAP)
$
70.9
$
66.6
$
145.4
$
117.2
Plus:
One-time separation costs(a)
$
8.8
$
0.8
$
12.9
$
1.0
Adjusted EBITDA (non-GAAP)
$
79.7
$
67.4
$
158.3
$
118.2
Net sales
$
413.6
$
393.2
$
832.2
$
775.7
Net income margin
11.2
%
12.5
%
11.9
%
10.8
%
EBITDA margin (non-GAAP)
17.1
%
16.9
%
17.5
%
15.1
%
Adjusted EBITDA margin
(non-GAAP)
19.3
%
17.1
%
19.0
%
15.2
%
(a)
Primarily comprised of one-time expenses
related to Information Technology, warehousing and Human Resources
separation costs.
ATMUS FILTRATION TECHNOLOGIES
INC. AND SUBSIDIARIES
DILUTED EARNINGS PER SHARE TO
ADJUSTED EARNINGS PER SHARE - RECONCILIATION
(in millions of U.S.
dollars)
(Unaudited)
For the Three Months Ended
June 30,
For the Six Months Ended June
30,
2023
2022
2023
2022
(per share)
Diluted earnings per share
$
0.55
$
0.59
$
1.19
$
1.01
Plus:
One-time separation costs(a)
$
0.11
$
0.01
$
0.16
$
0.01
Less:
Tax impact of one-time separation
costs(a)
$
0.03
$
—
$
0.04
$
—
Adjusted earnings per share
$
0.63
$
0.60
$
1.31
$
1.02
(a)
Primarily comprised of one-time expenses
related to Information Technology, warehousing and Human Resources
separation costs and the related tax impact of those expenses. The
tax impact of one-time separation costs for the three months ended
June 30, 2023 and 2022 were $2.2 million and $0.1 million,
respectively, and for the six months ended June 30, 2023 and 2022
were $3.1 million and $0.2 million, respectively.
ATMUS FILTRATION TECHNOLOGIES
INC. AND SUBSIDIARIES
CASH FLOWS FROM OPERATING
ACTIVITIES TO FREE CASH FLOW AND
ADJUSTED FREE CASH FLOW -
RECONCILIATION
(in millions of U.S.
dollars)
(Unaudited)
For the Three Months Ended
June 30,
For the Six Months Ended June
30,
2023
2022
2023
2022
(in millions)
Cash provided by operating activities
$
46.2
$
39.9
$
89.0
$
39.7
Less:
Capital expenditures
$
12.7
$
15.5
$
19.1
$
16.5
Free cash flow
$
33.5
$
24.4
$
69.9
$
23.2
Plus:
One-time separation capital
expenditures
$
1.8
$
—
$
2.6
$
—
Adjusted free cash flow
$
35.3
$
24.4
$
72.5
$
23.2
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230808104820/en/
Investor relations: Todd Chirillo
investor.relations@atmus.com
Media relations: Keri Moenssen media.inquiries@atmus.com
Atmus Filtration Technol... (NYSE:ATMU)
Gráfica de Acción Histórica
De Abr 2024 a May 2024
Atmus Filtration Technol... (NYSE:ATMU)
Gráfica de Acción Histórica
De May 2023 a May 2024