Altra Industrial Motion Corp. (Nasdaq: AIMC) (“Altra” or the
“Company”), a leading global manufacturer and supplier of motion
control, power transmission and automation products, today
announced unaudited financial results for the second quarter ended
June 30, 2022.
Q2 2022 Financial HighlightsIncludes
contribution of divested Jacobs Vehicle Systems ("JVS") business
through April 8, 2022
|
Q2 2022 |
Q2 2021 |
YOY Change |
Net sales |
$498.1M |
$488.6M |
1.9% |
|
- Q2 2022 Organic Sales Growth was 3.1% for the combined business
compared with the second quarter of 2021. Q2 2022 Pro Forma Organic
Sales Growth was 13.8% for the combined business compared with the
second quarter of 2021.*
- Q2 2022 Power Transmission Technologies (PTT) segment Organic
Sales were up 10.6%; Automation & Specialty (A&S) segment
Organic Sales were down 3.8% compared with the prior year. Pro
Forma Organic Sales for A&S were up 17.8% compared with the
prior year.*
- Pro Forma Q2 2022 North America Organic Sales up 8.2%, Europe
up 20.0% and Asia-Pacific/Rest of World up 19.6% compared with the
prior year.*
|
GAAP Net Income |
$26.3M |
$40.8M |
(35.5%) |
Non-GAAP Net Income* |
$55.0M |
$58.5M |
(6.0%) |
Earnings per diluted share |
$0.40 |
$0.62 |
(35.5%) |
Non-GAAP Earnings per diluted share* |
$0.84 |
$0.89 |
(5.6%) |
Non-GAAP Adjusted EBITDA* |
$97.1M |
$102.6M |
(5.4%) |
Non-GAAP Adjusted EBITDA Margin* |
19.5% |
21.0% |
(150 bps) |
Operating Income Margin |
12.8% |
13.4% |
(60 bps) |
Non-GAAP Operating Income Margin* |
16.4% |
17.3% |
(90 bps) |
Cash Flow from Operations |
$32.1M |
$63.9M |
(49.8%) |
Non-GAAP Adjusted Free Cash Flow* |
$34.3M |
$56.0M |
(38.8%) |
Q2 2022 Pro Forma Financial Highlights Excludes
contribution of divested JVS business*
|
Q2 2022 |
Q2 2021 |
YOY Change |
Pro Forma Net Sales* |
$491.8M |
$436.5M |
12.7% |
Pro Forma Non-GAAP Earnings per diluted
share* |
$0.84 |
$0.74 |
13.5% |
Pro Forma Non-GAAP Adjusted EBITDA* |
$96.6M |
$88.3M |
9.4% |
Pro Forma Non-GAAP Adjusted EBITDA Margin* |
19.6% |
20.2% |
(60 bps) |
Pro Forma Non-GAAP Operating Income Margin* |
16.5% |
16.8% |
(30 bps) |
Management Comments
“Our second-quarter results reflect the resilience of our
business model as we continue to transform Altra into a premier
industrial company and technology leader,” said Carl Christenson,
Altra’s Chairman and Chief Executive Officer. “The Altra team once
again did an exceptional job executing our long-term business
strategy while mitigating near-term supply chain, labor constraints
and inflation headwinds. As a result, we delivered strong Q2
results highlighted by double-digit sales and Non-GAAP earnings per
diluted share growth on a pro-forma basis, positive cash flows, and
a record-level backlog supported by strong incoming order
rates.
“During the quarter, margins remained relatively steady as our
pricing and surcharge initiatives offset the effects of rising
inflation. We have implemented additional pricing actions to
continue to protect margins and we will take further action if
necessary.
“We continue to execute our strategy to strengthen our balance
sheet and position our portfolio with highly engineered products in
the motion control and power transmission markets. We have made
great progress with the integration of our Nook acquisition – a
testament to our ability to identify and execute on value-adding
M&A opportunities. We are on track to achieve targeted
synergies and are thrilled with the caliber of the people, systems
and technology that came with the acquisition. We also closed on
the JVS divestiture on April 8th and used proceeds from the sale to
pay down debt and further reduce our leverage and expect our
efforts to lower our leverage to continue throughout the remainder
of the year.
“Although economic signals point to increased uncertainty, we
believe the underlying health of our Company and our industry
remain very strong. We are seeing pent-up demand and CapEx
investments being made across many markets, including late cycle
and automation, and expect that to continue. We are also confident
that Altra is well-positioned to navigate through this period as we
have demonstrated in the past. We have a clear strategy, an
exceptional team, a proven operational playbook and a track record
of driving growth, margin expansion and strong cashflow through a
range of market conditions.”
Business Outlook
Christenson concluded, “Today we are updating our 2022 guidance.
Notably, we continue to expect earnings to be equal or higher
compared to the prior year, despite a $194 million revenue reset
related to the JVS divestiture.”
Altra is providing updated guidance for the full year 2022 as
follows:
|
Updated 2022 Guidance (Including JVS contribution through
April 8, 2022) |
|
|
Pro Forma Updated 2022 Guidance* (Excluding JVS
contribution through April 8, 2022) |
|
|
Prior 2022 Guidance (Excluding JVS contribution
) |
|
|
Low |
|
High |
|
|
Low |
|
High |
|
|
Low |
|
High |
|
Full Year Sales |
$ |
1,931.8 |
|
$ |
1,971.8 |
|
|
$ |
1,880.0 |
|
$ |
1,920.0 |
|
|
$ |
1,855.0 |
|
$ |
1,895.0 |
|
GAAP
Diluted EPS |
$ |
2.33 |
|
$ |
2.42 |
|
|
$ |
2.31 |
|
$ |
2.40 |
|
|
$ |
2.54 |
|
$ |
2.64 |
|
Non-GAAP Diluted EPS* |
$ |
3.35 |
|
$ |
3.50 |
|
|
$ |
3.22 |
|
$ |
3.37 |
|
|
$ |
3.22 |
|
$ |
3.37 |
|
Non-GAAP Adjusted EBITDA* |
$ |
388.5 |
|
$ |
403.5 |
|
|
$ |
378.7 |
|
$ |
393.7 |
|
|
$ |
378.7 |
|
$ |
393.7 |
|
Tax
Rate |
|
22 |
% |
|
24 |
% |
|
|
22 |
% |
|
24 |
% |
|
|
22 |
% |
|
23 |
% |
Capital
Expenditures |
$ |
50.0 |
|
$ |
55.0 |
|
|
$ |
50.0 |
|
$ |
55.0 |
|
|
$ |
50.0 |
|
$ |
55.0 |
|
Depreciation and Amortization |
$ |
95.0 |
|
$ |
100.0 |
|
|
$ |
95.0 |
|
$ |
100.0 |
|
|
$ |
95.0 |
|
$ |
100.0 |
|
Non-GAAP Adjusted Free Cash Flow* |
$ |
100.0 |
|
$ |
125.0 |
|
|
$ |
100.0 |
|
$ |
125.0 |
|
|
$ |
125.0 |
|
$ |
140.0 |
|
*Reconciliations of Non-GAAP Disclosures
(Amounts in Millions of Dollars, except per share
information)
*Reconciliation of Non-GAAP Net Income:
|
|
Quarter Ended June 30, |
|
|
Year to Date Ended June 30, |
|
|
|
|
2022 |
|
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
Net income |
|
$ |
26.3 |
|
|
|
$ |
40.8 |
|
|
$ |
71.1 |
|
|
$ |
80.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring costs |
|
$ |
0.5 |
|
|
|
$ |
0.8 |
|
|
$ |
0.9 |
|
|
$ |
1.7 |
|
|
Acquisition related stock
compensation expense |
|
|
— |
|
|
|
|
0.2 |
|
|
|
— |
|
|
|
0.5 |
|
|
Acceleration of stock
compensation expense upon retirement |
|
|
— |
|
|
|
|
— |
|
|
|
0.6 |
|
|
|
— |
|
|
Acquisition related
amortization expense |
|
|
13.8 |
|
|
|
|
17.7 |
|
|
|
27.8 |
|
|
|
35.3 |
|
|
Non-cash amortization of
interest rate swap expense |
|
|
— |
|
|
|
|
3.0 |
|
|
|
— |
|
|
|
6.1 |
|
|
Acquisition related
expenses |
|
|
0.4 |
|
|
|
|
0.4 |
|
|
|
0.6 |
|
|
|
0.4 |
|
|
Amortization of inventory fair
value adjustment |
|
|
1.2 |
|
|
|
|
— |
|
|
|
2.4 |
|
|
|
— |
|
|
Tax impact of above adjustments |
|
|
(3.7 |
) |
|
(1 |
) |
|
(4.4 |
) |
(2 |
) |
|
(7.6 |
) |
(3 |
) |
|
(9.0 |
) |
(4 |
) |
Impairment charges |
|
|
2.2 |
|
|
|
|
— |
|
|
|
8.3 |
|
|
|
— |
|
|
Tax expense due to asset held
for sale impairment charge |
|
|
14.3 |
|
|
|
|
— |
|
|
|
10.5 |
|
|
|
|
|
Non-GAAP Net Income* |
|
$ |
55.0 |
|
|
|
$ |
58.5 |
|
|
$ |
114.6 |
|
|
$ |
115.0 |
|
|
Non-GAAP Earnings Per Diluted
Share* |
|
$ |
0.84 |
|
|
|
$ |
0.89 |
|
|
$ |
1.75 |
|
|
$ |
1.75 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Pro Forma Non-GAAP Diluted Earnings Per
Share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Earnings Per Diluted Share* |
|
$ |
0.84 |
|
|
|
$ |
0.89 |
|
|
$ |
1.75 |
|
|
$ |
1.75 |
|
|
JVS Non-GAAP Earnings Per Diluted Share* |
|
(0.00 |
) |
|
|
|
(0.15 |
) |
|
|
(0.13 |
) |
|
|
(0.34 |
) |
|
Pro Forma Non-GAAP Earnings Per Diluted Share* |
|
$ |
0.84 |
|
|
|
$ |
0.74 |
|
|
$ |
1.62 |
|
|
$ |
1.41 |
|
|
(1) Tax impact is
calculated by multiplying the estimated effective tax rate for the
period of 23.3% by the above items. |
(2) Tax impact is
calculated by multiplying the estimated effective tax rate for the
period of 20.0% by the above items. |
(3) Tax impact is
calculated by multiplying the estimated effective tax rate for the
period of 23.5% by the above items. |
(4) Tax impact is
calculated by multiplying the estimated effective tax rate for the
period of 20.5% by the above items. |
*Reconciliation of Non-GAAP Free Cash Flow and Non-GAAP Adjusted
Free Cash Flow:
|
|
Quarter Ended June 30, |
|
|
Year to Date Ended June 30, |
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
|
(Unaudited) |
|
|
(Unaudited) |
|
|
(Unaudited) |
|
|
(Unaudited) |
|
Net cash flows from operating activities |
|
$ |
32.1 |
|
|
$ |
63.9 |
|
|
$ |
7.2 |
|
|
$ |
100.1 |
|
Purchase of property, plant
and equipment |
|
|
(12.8 |
) |
|
|
(7.9 |
) |
|
|
(30.6 |
) |
|
|
(17.5 |
) |
Non-GAAP Free Cash Flow* |
|
$ |
19.3 |
|
|
$ |
56.0 |
|
|
$ |
(23.4 |
) |
|
$ |
82.6 |
|
JVS transaction costs
paid |
|
|
4.3 |
|
|
|
— |
|
|
|
4.3 |
|
|
|
— |
|
Tax paid for JVS
divestiture |
|
|
10.7 |
|
|
|
— |
|
|
|
10.7 |
|
|
|
— |
|
Non-GAAP Adjusted Free Cash
Flow* |
|
$ |
34.3 |
|
|
$ |
56.0 |
|
|
$ |
(8.4 |
) |
|
$ |
82.6 |
|
*Reconciliation of Net Debt:
|
|
|
June 30, 2022 |
|
|
December 31, 2021 |
|
Total gross debt |
|
|
$ |
1,087.7 |
|
|
$ |
1,414.3 |
|
Cash and cash equivalents |
|
|
|
(192.9 |
) |
|
|
(246.1 |
) |
Net Debt* |
|
|
$ |
894.8 |
|
|
$ |
1,168.2 |
|
*Reconciliation of Organic Sales and Organic Sales Growth:
|
|
Quarter Ended June 30, 2022 |
|
|
|
|
Quarter Ended June 30, 2022 |
Net sales |
|
$ |
498.1 |
|
|
Net sales growth |
|
1.9% |
Foreign currency
translation |
|
|
(18.0 |
) |
|
Foreign currency
translation |
|
-3.7% |
Nook acquisition |
|
|
(12.6 |
) |
|
Nook acquisition |
|
-2.5% |
Organic Sales* |
|
$ |
503.5 |
|
|
Organic Sales Growth* |
|
3.1% |
Reconciliation of Pro Forma Organic Sales: |
|
|
|
|
Reconciliation of Pro Forma Organic Sales
Growth: |
|
|
Net sales |
|
$ |
498.1 |
|
|
Net sales growth |
|
1.9% |
JVS net sales |
|
|
(6.3 |
) |
|
JVS net sales |
|
10.8% |
Pro Forma Net Sales* |
|
$ |
491.8 |
|
|
Pro Forma Net Sales growth* |
|
12.7% |
Foreign currency translation |
|
|
(17.4 |
) |
|
Foreign currency translation |
|
-4.0% |
Nook acquisition |
|
|
(12.6 |
) |
|
Nook acquisition |
|
-2.9% |
Pro Forma Organic Sales* |
|
$ |
496.6 |
|
|
Pro Forma Organic Sales Growth* |
|
13.8% |
*Reconciliation of Non-GAAP Income from Operations and Non-GAAP
Income from Operations Margin:
|
Quarter Ended June 30, |
|
|
Year to Date Ended June 30, |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Income from operations |
$ |
63.7 |
|
|
$ |
65.5 |
|
|
$ |
131.3 |
|
|
$ |
130.6 |
|
Income from operations as a
percent of net sales |
|
12.8 |
% |
|
|
13.4 |
% |
|
|
13.0 |
% |
|
|
13.6 |
% |
Restructuring costs |
$ |
0.5 |
|
|
$ |
0.8 |
|
|
$ |
0.9 |
|
|
$ |
1.7 |
|
Acquisition related stock
compensation expense |
|
— |
|
|
|
0.2 |
|
|
|
— |
|
|
|
0.5 |
|
Acceleration of stock
compensation expense upon retirement |
|
— |
|
|
|
— |
|
|
|
0.6 |
|
|
|
— |
|
Acquisition related
amortization expense |
|
13.8 |
|
|
|
17.7 |
|
|
|
27.8 |
|
|
|
35.3 |
|
Acquisition related
expenses |
|
0.4 |
|
|
|
0.4 |
|
|
|
0.6 |
|
|
|
0.4 |
|
Impairment charges |
|
2.2 |
|
|
|
— |
|
|
|
8.3 |
|
|
|
— |
|
Amortization of inventory fair
value adjustment |
|
1.2 |
|
|
|
— |
|
|
|
2.4 |
|
|
|
|
Non-GAAP Income From Operations* |
$ |
81.8 |
|
|
$ |
84.6 |
|
|
$ |
171.9 |
|
|
$ |
168.5 |
|
Non-GAAP Income From
Operations as a percent of net sales |
|
16.4 |
% |
|
|
17.3 |
% |
|
|
17.0 |
% |
|
|
17.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Pro Forma Non-GAAP Income From
Operations: |
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Income From Operations* |
$ |
81.8 |
|
|
$ |
84.6 |
|
|
$ |
171.9 |
|
|
$ |
168.5 |
|
JVS Non-GAAP Income From Operations |
|
(0.6 |
) |
|
|
(11.3 |
) |
|
|
(9.9 |
) |
|
|
(26.0 |
) |
Pro Forma Non-GAAP Income From Operations* |
$ |
81.2 |
|
|
$ |
73.3 |
|
|
$ |
162.0 |
|
|
$ |
142.5 |
|
Pro Forma Non-GAAP Income From Operations as a percent of Pro Forma
Net Sales* |
|
16.5 |
% |
|
|
16.8 |
% |
|
|
16.9 |
% |
|
|
16.8 |
% |
*Reconciliation of Non-GAAP Operating Income and Non-GAAP
Operating Income Margin:
Selected Statement of
Income Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended June 30, 2022 |
|
|
Quarter Ended June 30, 2021 |
|
|
|
GAAP Operating Income |
|
|
Adjustments |
|
|
Non-GAAP Operating Income* |
|
|
GAAP Operating Income |
|
|
Adjustments |
|
|
Non-GAAP Operating Income* |
|
Net sales |
|
$ |
498.1 |
|
|
$ |
— |
|
|
$ |
498.1 |
|
|
$ |
488.6 |
|
|
$ |
— |
|
|
$ |
488.6 |
|
Cost of sales |
|
|
324.9 |
|
|
|
1.2 |
|
|
|
323.7 |
|
|
|
312.7 |
|
|
|
— |
|
|
|
312.7 |
|
Gross profit |
|
|
173.2 |
|
|
|
1.2 |
|
|
|
174.4 |
|
|
|
175.9 |
|
|
|
— |
|
|
|
175.9 |
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general & administrative expenses |
|
|
90.8 |
|
|
|
14.2 |
|
|
|
76.6 |
|
|
|
93.5 |
|
|
|
18.3 |
|
|
|
75.2 |
|
Impairment charges |
|
|
2.2 |
|
|
|
2.2 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Research and development expenses |
|
|
16.0 |
|
|
|
— |
|
|
|
16.0 |
|
|
|
16.1 |
|
|
|
— |
|
|
|
16.1 |
|
Restructuring costs |
|
|
0.5 |
|
|
|
0.5 |
|
|
|
— |
|
|
|
0.8 |
|
|
|
0.8 |
|
|
|
— |
|
Income from operations |
|
$ |
63.7 |
|
|
$ |
18.1 |
|
|
$ |
81.8 |
|
|
$ |
65.5 |
|
|
$ |
19.1 |
|
|
$ |
84.6 |
|
GAAP and Non-GAAP Income From Operations as a percent of net
sales* |
|
|
12.8 |
% |
|
|
|
|
|
16.4 |
% |
|
|
13.4 |
% |
|
|
|
|
|
17.3 |
% |
Reconciliation of Pro Forma Income From
Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations |
|
$ |
63.7 |
|
|
$ |
18.1 |
|
|
$ |
81.8 |
|
|
$ |
65.5 |
|
|
$ |
19.1 |
|
|
$ |
84.6 |
|
JVS GAAP and Non-GAAP Income From Operations* |
|
|
(0.6 |
) |
|
|
— |
|
|
|
(0.6 |
) |
|
|
(7.0 |
) |
|
|
(4.3 |
) |
|
|
(11.3 |
) |
Pro Forma Income From Operations* |
|
$ |
63.1 |
|
|
$ |
18.1 |
|
|
$ |
81.2 |
|
|
$ |
58.5 |
|
|
$ |
14.8 |
|
|
$ |
73.3 |
|
Pro Forma GAAP and Pro Forma Non-GAAP Income From Operations as a
percent of Pro Forma Net Sales* |
|
|
12.8 |
% |
|
|
|
|
|
16.5 |
% |
|
|
13.4 |
% |
|
|
|
|
|
16.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year to Date Ended June 30, 2022 |
|
|
Year to Date Ended June 30, 2021 |
|
|
|
GAAP Operating Income |
|
|
Adjustments |
|
|
Non-GAAP Operating Income* |
|
|
GAAP Operating Income |
|
|
Adjustments |
|
|
Non-GAAP Operating Income* |
|
Net sales |
|
$ |
1,009.8 |
|
|
$ |
— |
|
|
$ |
1,009.8 |
|
|
$ |
960.7 |
|
|
$ |
— |
|
|
$ |
960.7 |
|
Cost of sales |
|
|
656.3 |
|
|
|
2.4 |
|
|
|
653.9 |
|
|
|
613.1 |
|
|
|
— |
|
|
|
613.1 |
|
Gross profit |
|
|
353.5 |
|
|
|
2.4 |
|
|
|
355.9 |
|
|
|
347.6 |
|
|
|
— |
|
|
|
347.6 |
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general & administrative expenses |
|
|
179.4 |
|
|
|
29.0 |
|
|
|
150.4 |
|
|
|
183.3 |
|
|
|
36.2 |
|
|
|
147.1 |
|
Impairment of goodwill and intangible asset |
|
|
8.3 |
|
|
|
8.3 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Research and development expenses |
|
|
33.6 |
|
|
|
— |
|
|
|
33.6 |
|
|
|
32.0 |
|
|
|
— |
|
|
|
32.0 |
|
Restructuring costs |
|
|
0.9 |
|
|
|
0.9 |
|
|
|
— |
|
|
|
1.7 |
|
|
|
1.7 |
|
|
|
— |
|
Income from
Operations |
|
$ |
131.3 |
|
|
$ |
40.6 |
|
|
$ |
171.9 |
|
|
$ |
130.6 |
|
|
$ |
37.9 |
|
|
$ |
168.5 |
|
GAAP and Non-GAAP Income From
Operations as a percent of net sales |
|
|
13.0 |
% |
|
|
|
|
|
17.0 |
% |
|
|
13.6 |
% |
|
|
|
|
|
17.5 |
% |
Reconciliation of Pro Forma Income From
Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations |
|
$ |
131.3 |
|
|
$ |
40.6 |
|
|
$ |
171.9 |
|
|
$ |
130.6 |
|
|
$ |
37.9 |
|
|
$ |
168.5 |
|
JVS GAAP and Non-GAAP Income From Operations* |
|
|
(3.8 |
) |
|
|
(6.1 |
) |
|
|
(9.9 |
) |
|
|
(17.5 |
) |
|
|
(8.5 |
) |
|
|
(26.0 |
) |
Pro Forma Income From Operations* |
|
$ |
127.5 |
|
|
$ |
34.5 |
|
|
$ |
162.0 |
|
|
$ |
113.1 |
|
|
$ |
29.4 |
|
|
$ |
142.5 |
|
Pro Forma GAAP and Pro Forma Non-GAAP Income From Operations as a
percent of Pro Forma Net Sales* |
|
|
13.3 |
% |
|
|
|
|
|
16.9 |
% |
|
|
13.4 |
% |
|
|
|
|
|
16.8 |
% |
*Reconciliation of Non-GAAP Adjusted EBITDA and Non-GAAP
Adjusted EBITDA Margin:
|
Quarter Ended June 30, |
|
|
2022 |
|
|
2021 |
|
Net income |
$ |
26.3 |
|
|
$ |
40.8 |
|
|
|
|
|
|
|
Gain on foreign currency and
other, net |
|
(0.8 |
) |
|
|
(0.8 |
) |
Impairment charges |
|
2.2 |
|
|
|
— |
|
Tax expense |
|
27.5 |
|
|
|
9.9 |
|
Interest expense |
|
11.8 |
|
|
|
16.5 |
|
Depreciation expense |
|
9.9 |
|
|
|
13.3 |
|
Acquisition related
expenses |
|
0.4 |
|
|
|
0.4 |
|
Acquisition related
amortization expense |
|
13.8 |
|
|
|
17.7 |
|
Stock compensation
expense |
|
4.3 |
|
|
|
4.0 |
|
Restructuring costs |
|
0.5 |
|
|
|
0.8 |
|
Amortization of inventory fair
value adjustment |
|
1.2 |
|
|
|
— |
|
Non-GAAP Adjusted EBITDA* |
$ |
97.1 |
|
|
$ |
102.6 |
|
Non-GAAP Adjusted EBITDA as a
percent of net sales* |
|
19.5 |
% |
|
|
21.0 |
% |
|
|
|
|
|
|
Reconciliation of Pro Forma Non-GAAP Adjusted
EBITDA |
|
|
|
|
|
Non-GAAP Adjusted EBITDA* |
$ |
97.1 |
|
|
$ |
102.6 |
|
JVS Non-GAAP Adjusted EBITDA |
|
(0.5 |
) |
|
|
(14.3 |
) |
Pro Forma Non-GAAP Adjusted EBITDA* |
$ |
96.6 |
|
|
$ |
88.3 |
|
Pro Forma Non-GAAP Adjusted EBITDA as a percent of Pro Forma Net
Sales* |
|
19.6 |
% |
|
|
20.2 |
% |
*Reconciliation of Non-GAAP Gross Profit and Non-GAAP Gross
Profit Margin:
|
Quarter Ended June 30, |
|
|
Year to Date Ended June 30, |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Gross profit |
$ |
173.2 |
|
|
$ |
175.9 |
|
|
$ |
353.5 |
|
|
$ |
347.6 |
|
Gross profit as a percent of net sales |
|
34.8 |
% |
|
|
36.0 |
% |
|
|
35.0 |
% |
|
|
36.2 |
% |
Amortization of inventory fair
value adjustment |
|
1.2 |
|
|
|
— |
|
|
|
2.4 |
|
|
|
— |
|
Non-GAAP Gross Profit* |
$ |
174.4 |
|
|
$ |
175.9 |
|
|
$ |
355.9 |
|
|
$ |
347.6 |
|
Non-GAAP Gross Profit as a
percent of net sales* |
|
35.0 |
% |
|
|
36.0 |
% |
|
|
35.2 |
% |
|
|
36.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Pro Forma Non-GAAP Gross
Profit: |
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Gross Profit* |
$ |
174.4 |
|
|
$ |
175.9 |
|
|
$ |
355.9 |
|
|
$ |
347.6 |
|
JVS gross profit |
|
(0.7 |
) |
|
|
(14.1 |
) |
|
|
(13.2 |
) |
|
|
(31.8 |
) |
Pro Forma Non-GAAP Gross Profit* |
$ |
173.7 |
|
|
$ |
161.8 |
|
|
$ |
342.7 |
|
|
$ |
315.8 |
|
Pro Forma Non-GAAP Gross Profit as a percent of Pro Forma Net
Sales* |
|
35.3 |
% |
|
|
37.1 |
% |
|
|
35.8 |
% |
|
|
37.3 |
% |
*Reconciliation of Pro Forma Net Income and Diluted Earnings Per
Share and 2022 Non-GAAP Net Income Guidance and Non-GAAP Diluted
EPS Guidance:
|
|
Projected Fiscal Year 2022 Net Income |
|
Projected Fiscal Year 2022 Diluted EPS |
Net income and diluted
earnings per share |
|
$152.1-$157.8 |
|
$2.33 - $2.42 |
Pro Forma impact of
JVS divestiture, net of tax |
|
(1.2) |
|
(0.02) |
Pro Forma Net Income and
Diluted Earnings Per Share |
|
$150.9-$156.6 |
|
$2.31 - $2.40 |
Restructuring costs |
|
5.5 - 7.5 |
|
|
Acquisition related
expenses |
|
0.6 - 1.0 |
|
|
Amortization of inventory fair
value adjustment |
|
2.4 |
|
|
Acquisition related
amortization expense |
|
52.0 - 55.0 |
|
|
Acceleration of stock
compensation expense upon retirement |
|
0.6 |
|
|
Tax impact of above
adjustments (1)(2) |
|
(13.3) - (14.5) |
|
|
Impairment charges |
|
8.3 |
|
|
Tax expense due to asset
held for sale impairment charge |
|
10.5 |
|
|
Non-GAAP Net Income and
Non-GAAP Diluted EPS Guidance* |
|
$218.7 - $228.6 |
|
$3.35 - $3.50 |
Pro Forma impact of
JVS divestiture, net of tax |
|
(8.5) |
|
(0.13) |
Pro Forma Non-GAAP Net Income
and Pro Forma Non-GAAP Diluted EPS Guidance* |
|
$210.2 - $220.1 |
|
$3.22 - $3.37 |
(1) Adjustments
are pre-tax, with net tax impact listed
separately |
(2) Tax impact is
calculated by multiplying the estimated effective tax rate for the
period of 22.0 - 23.0% by the above items |
*Reconciliation of 2022 Non-GAAP Adjusted EBITDA Guidance:
|
|
Fiscal Year 2022 |
Net income |
|
$152.1 - $157.8 |
Acquisition related
expenses |
|
0.6 - 1.0 |
Interest expense |
|
48.0 - 50.0 |
Tax expense |
|
61.6 - 60.5 |
Depreciation expense |
|
43.0 - 45.0 |
Impairment charges |
|
8.3 |
Stock based compensation |
|
15.0 - 16.0 |
Restructuring costs |
|
5.5 - 7.5 |
Acquisition related
amortization expense |
|
52.0 - 55.0 |
Amortization of inventory fair
value adjustment |
|
2.4 |
Non-GAAP Adjusted EBITDA* |
|
$388.5 - $403.5 |
Pro Forma impact of
JVS divestiture, net of tax |
|
(9.8) |
Pro Forma Non-GAAP Adjusted
EBITDA* |
|
$378.7 - $393.7 |
*Reconciliation of 2022 Non-GAAP Adjusted Free Cash Flow
Guidance:
|
|
Fiscal Year 2022 |
Net cash flows from operating
activities |
|
$150.0 - $180.0 |
Purchase of property, plant
and equipment |
|
(50.0) - (55.0) |
Non-GAAP Adjusted Free Cash
Flow Guidance* |
|
$100.0 - $125.0 |
Conference Call
The company will conduct an investor conference call to discuss
its unaudited second quarter financial results on Thursday, July
28, 2022 at 11:00 a.m. ET. The public is invited to listen to the
conference call by dialing (844) 200-6205 domestically or (929)
526-1599 for international access and asking to participate in the
ALTRA conference call (Event Access Code: 576044). A live webcast
of the call will be available in the "Investor Relations" section
of www.altramotion.com. Individuals may download charts that will
be used during the call at www.altramotion.com under presentations
in the Investor Relations section. The charts will be available
after earnings are released. A replay of the recorded conference
call will be available at the conclusion of the call on Thursday,
July 28, 2022 through midnight on August 11, 2022. To listen to the
replay, dial (866) 813-9403 domestically or +44 (204) 525-0658 for
international access (Conference ID: 992757). A webcast replay also
will be available.
About Altra Industrial Motion Corp.
Altra Industrial Motion Corp. is a premier industrial global
manufacturer and supplier of highly engineered motion control,
automation, and power transmission systems and components. Altra's
portfolio consists of 26 well-respected brands including Bauer Gear
Motor, Boston Gear, Kollmorgen, Portescap, Stromag, Svendborg
Brakes, TB Wood's, Thomson and Warner Electric. Headquartered in
Braintree, Massachusetts, Altra has over 9,000 employees and 47
production facilities in 17 countries around the world.
Altra Industrial Motion Corp. |
|
Consolidated Balance
Sheets |
|
|
|
|
|
In millions of dollars |
June 30, 2022 |
|
|
December 31, 2021 |
|
Assets: |
(Unaudited) |
|
|
|
|
Current assets |
|
|
|
|
|
Cash and cash equivalents |
$ |
192.9 |
|
|
$ |
246.1 |
|
Trade receivables, net |
|
271.6 |
|
|
|
224.5 |
|
Inventories |
|
316.1 |
|
|
|
267.8 |
|
Income tax receivable |
|
23.5 |
|
|
|
11.7 |
|
Assets held for sale |
|
- |
|
|
|
377.3 |
|
Prepaid expenses and other current assets |
|
36.8 |
|
|
|
40.4 |
|
Total current assets |
|
840.9 |
|
|
|
1,167.8 |
|
Property, plant and equipment, net |
|
271.8 |
|
|
|
275.8 |
|
Goodwill |
|
1,520.9 |
|
|
|
1,564.0 |
|
Intangible assets, net |
|
998.0 |
|
|
|
1,057.2 |
|
Deferred income taxes |
|
1.2 |
|
|
|
2.3 |
|
Other non-current assets |
|
17.0 |
|
|
|
13.5 |
|
Operating lease right of use assets |
|
44.4 |
|
|
|
50.0 |
|
Total assets |
$ |
3,694.2 |
|
|
$ |
4,130.6 |
|
Liabilities and stockholders'
equity |
|
|
|
|
|
Current liabilities |
|
|
|
|
|
Accounts payable |
$ |
183.9 |
|
|
$ |
173.3 |
|
Accrued payroll |
|
63.3 |
|
|
|
81.8 |
|
Accruals and other current liabilities |
|
82.0 |
|
|
|
77.0 |
|
Income tax payable |
|
3.7 |
|
|
|
6.0 |
|
Current portion of long-term debt |
|
15.6 |
|
|
|
11.1 |
|
Liabilities held for sale |
|
- |
|
|
|
53.0 |
|
Operating lease liabilities |
|
13.5 |
|
|
|
14.3 |
|
Total current liabilities |
|
362.0 |
|
|
|
416.5 |
|
Long-term debt, net of current portion |
|
1,070.1 |
|
|
|
1,401.0 |
|
Deferred income taxes |
|
249.5 |
|
|
|
250.5 |
|
Pension liabilities |
|
27.8 |
|
|
|
29.9 |
|
Long-term taxes payable |
|
1.8 |
|
|
|
2.7 |
|
Other long-term liabilities |
|
6.0 |
|
|
|
7.3 |
|
Operating lease liabilities, net of current portion |
|
32.7 |
|
|
|
37.6 |
|
Total stockholders'
equity |
|
1,944.3 |
|
|
|
1,985.1 |
|
Total liabilities, and
stockholders' equity |
$ |
3,694.2 |
|
|
$ |
4,130.6 |
|
|
|
|
|
|
|
Reconciliation to operating
working capital: |
|
|
|
|
|
Trade receivables, net |
$ |
271.6 |
|
|
$ |
224.5 |
|
Inventories |
|
316.1 |
|
|
|
267.8 |
|
Accounts payable |
|
(183.9 |
) |
|
|
(173.3 |
) |
Non-GAAP operating working
capital* |
$ |
403.8 |
|
|
$ |
319.0 |
|
Consolidated
Statements of Income Data: |
Quarter Ended June 30, |
|
|
Year to Date Ended June 30, |
|
In millions of dollars |
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
(Unaudited) |
|
|
(Unaudited) |
|
|
(Unaudited) |
|
|
(Unaudited) |
|
Net sales |
$ |
498.1 |
|
|
$ |
488.6 |
|
|
$ |
1,009.8 |
|
|
$ |
960.7 |
|
Cost of sales |
|
324.9 |
|
|
|
312.7 |
|
|
|
656.3 |
|
|
|
613.1 |
|
Gross profit |
$ |
173.2 |
|
|
$ |
175.9 |
|
|
$ |
353.5 |
|
|
$ |
347.6 |
|
Gross profit as a percent of net sales |
|
34.8 |
% |
|
|
36.0 |
% |
|
|
35.0 |
% |
|
|
36.2 |
% |
Selling, general &
administrative expenses |
|
90.8 |
|
|
|
93.5 |
|
|
|
179.4 |
|
|
|
183.3 |
|
Impairment charges |
|
2.2 |
|
|
|
— |
|
|
|
8.3 |
|
|
|
— |
|
Research and development
expenses |
|
16.0 |
|
|
|
16.1 |
|
|
|
33.6 |
|
|
|
32.0 |
|
Restructuring costs |
|
0.5 |
|
|
|
0.8 |
|
|
|
0.9 |
|
|
|
1.7 |
|
Income from operations |
$ |
63.7 |
|
|
$ |
65.5 |
|
|
$ |
131.3 |
|
|
$ |
130.6 |
|
Income from operations as a percent of net sales |
|
12.8 |
% |
|
|
13.4 |
% |
|
|
13.0 |
% |
|
|
13.6 |
% |
Interest expense, net |
|
11.8 |
|
|
|
16.5 |
|
|
|
23.1 |
|
|
|
33.4 |
|
Other non-operating income,
net |
|
(1.9 |
) |
|
|
(1.7 |
) |
|
|
(2.0 |
) |
|
|
(3.2 |
) |
Income before income
taxes |
$ |
53.8 |
|
|
$ |
50.7 |
|
|
$ |
110.2 |
|
|
$ |
100.4 |
|
Provision for income
taxes |
|
27.5 |
|
|
|
9.9 |
|
|
|
39.1 |
|
|
|
20.4 |
|
Income tax rate |
|
51.1 |
% |
|
|
19.5 |
% |
|
|
35.5 |
% |
|
|
20.3 |
% |
Net income |
$ |
26.3 |
|
|
$ |
40.8 |
|
|
$ |
71.1 |
|
|
$ |
80.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average common shares
outstanding: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
65.1 |
|
|
|
64.8 |
|
|
|
65.0 |
|
|
|
64.8 |
|
Diluted |
|
65.3 |
|
|
|
65.4 |
|
|
|
65.3 |
|
|
|
65.4 |
|
Net income per share: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.40 |
|
|
$ |
0.63 |
|
|
$ |
1.09 |
|
|
$ |
1.23 |
|
Diluted |
$ |
0.40 |
|
|
$ |
0.62 |
|
|
$ |
1.09 |
|
|
$ |
1.22 |
|
Consolidated
Statements of Cash Flows: |
|
Year to Date Ended June 30, |
|
In millions of dollars |
|
2022 |
|
|
2021 |
|
Cash flows from
operating activities |
|
|
|
|
|
|
Net income |
|
$ |
71.1 |
|
|
$ |
80.0 |
|
Adjustments to reconcile net
income to net operating cash flows: |
|
|
|
|
|
|
Depreciation |
|
|
20.1 |
|
|
|
26.4 |
|
Amortization of intangible
assets |
|
|
27.8 |
|
|
|
35.3 |
|
Amortization of deferred
financing costs |
|
|
0.5 |
|
|
|
2.3 |
|
Gain on foreign currency,
net |
|
|
(1.2 |
) |
|
|
(0.1 |
) |
Accretion of debt
discount |
|
|
0.1 |
|
|
|
0.2 |
|
Non-cash amortization of
interest rate swap expense |
|
|
— |
|
|
|
6.1 |
|
Impairment charges |
|
|
8.3 |
|
|
|
— |
|
Unrealized gain on investment
in MTEK Industry AB |
|
|
(0.7 |
) |
|
|
— |
|
Gain on disposal and
other |
|
|
(0.2 |
) |
|
|
(0.8 |
) |
Expense for deferred
taxes |
|
|
8.1 |
|
|
|
— |
|
Stock-based compensation |
|
|
8.2 |
|
|
|
7.5 |
|
Amortization of inventory fair
value adjustment |
|
|
2.4 |
|
|
|
— |
|
Changes in assets and
liabilities: |
|
|
|
|
|
|
Trade receivables, net |
|
|
(68.0 |
) |
|
|
(19.6 |
) |
Inventories |
|
|
(58.4 |
) |
|
|
(29.3 |
) |
Accounts payable and accrued
liabilities |
|
|
12.5 |
|
|
|
17.0 |
|
Other current assets and
liabilities |
|
|
(16.2 |
) |
|
|
(25.6 |
) |
Other operating assets and
liabilities |
|
|
(2.9 |
) |
|
|
0.7 |
|
JVS transaction costs
paid |
|
|
(4.3 |
) |
|
|
— |
|
Net cash provided by operating
activities |
|
|
7.2 |
|
|
|
100.1 |
|
Cash flows from
investing activities |
|
|
|
|
|
|
Purchase of property, plant
and equipment |
|
|
(30.6 |
) |
|
|
(17.5 |
) |
Proceeds from sale of
building |
|
|
— |
|
|
|
2.2 |
|
Proceeds from sale of JVS
business |
|
|
325.9 |
|
|
|
— |
|
Investment in MTEK Industry
AB |
|
|
(4.6 |
) |
|
|
— |
|
Nook Industries acquisition
purchase price adjustment |
|
|
(0.6 |
) |
|
|
— |
|
Net cash provided by (used in) investing activities |
|
|
290.1 |
|
|
|
(15.3 |
) |
Cash flows from
financing activities |
|
|
|
|
|
|
Payments on Revolving Credit
Facility |
|
|
(335.0 |
) |
|
|
— |
|
Borrowings on Revolving Credit
Facility |
|
|
15.0 |
|
|
|
— |
|
Payments on Term Loan B
Facility |
|
|
— |
|
|
|
(50.0 |
) |
Payments on Term Loan A
Facility |
|
|
(5.0 |
) |
|
|
— |
|
Dividend payments |
|
|
(10.5 |
) |
|
|
(7.8 |
) |
Net payments on financing
leases, mortgages, and other obligations |
|
|
(0.4 |
) |
|
|
(1.5 |
) |
Net proceeds from China
debt |
|
|
— |
|
|
|
2.8 |
|
Proceeds from issuance of
common stock upon exercise of options |
|
|
— |
|
|
|
2.2 |
|
Shares surrendered for tax
withholding |
|
|
(4.1 |
) |
|
|
(3.1 |
) |
Net cash used in financing activities |
|
|
(340.0 |
) |
|
|
(57.4 |
) |
Effect of exchange rate
changes on cash and cash equivalents |
|
|
(10.5 |
) |
|
|
(4.0 |
) |
Net change in cash and cash
equivalents |
|
|
(53.2 |
) |
|
|
23.4 |
|
Cash and cash equivalents at beginning of period |
|
|
246.1 |
|
|
|
254.4 |
|
Cash and cash equivalents at
end of period |
|
$ |
192.9 |
|
|
$ |
277.8 |
|
|
|
|
|
|
|
|
Reconciliation to Non-GAAP
Free Cash Flow: |
|
|
|
|
|
|
Net cash flows from operating
activities |
|
$ |
7.2 |
|
|
$ |
100.1 |
|
Purchase of property, plant
and equipment |
|
|
(30.6 |
) |
|
|
(17.5 |
) |
Non-GAAP Free Cash Flow* |
|
$ |
(23.4 |
) |
|
$ |
82.6 |
|
JVS transaction costs
paid |
|
|
4.3 |
|
|
|
— |
|
Tax paid for JVS
divestiture |
|
|
10.7 |
|
|
|
— |
|
Non-GAAP Adjusted Free Cash
Flow* |
|
$ |
(8.4 |
) |
|
$ |
82.6 |
|
Selected Segment
Data |
|
Quarter Ended June 30, |
|
|
Year to Date Ended June 30, |
|
In millions of dollars |
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Net
sales: |
|
|
|
|
|
|
|
|
|
|
|
|
Power Transmission Technologies |
|
$ |
252.5 |
|
|
$ |
237.6 |
|
|
$ |
506.2 |
|
|
$ |
458.6 |
|
Automation &
Specialty |
|
|
247.3 |
|
|
|
252.0 |
|
|
|
506.5 |
|
|
|
504.1 |
|
Inter-segment
eliminations |
|
|
(1.7 |
) |
|
|
(1.0 |
) |
|
|
(2.9 |
) |
|
|
(2.0 |
) |
Total |
|
$ |
498.1 |
|
|
$ |
488.6 |
|
|
$ |
1,009.8 |
|
|
$ |
960.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
operations: |
|
|
|
|
|
|
|
|
|
|
|
|
Power Transmission
Technologies |
|
$ |
37.5 |
|
|
$ |
33.6 |
|
|
$ |
69.8 |
|
|
$ |
61.4 |
|
Automation &
Specialty |
|
|
32.1 |
|
|
|
37.4 |
|
|
|
67.7 |
|
|
|
78.8 |
|
Corporate |
|
|
(5.4 |
) |
|
|
(4.7 |
) |
|
|
(5.3 |
) |
|
|
(7.9 |
) |
Restructuring costs |
|
|
(0.5 |
) |
|
|
(0.8 |
) |
|
|
(0.9 |
) |
|
|
(1.7 |
) |
Total |
|
$ |
63.7 |
|
|
$ |
65.5 |
|
|
$ |
131.3 |
|
|
$ |
130.6 |
|
*Reconciliation of Non-GAAP Income from Operations by
Segment:
Selected Segment
Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In millions of dollars |
|
Quarter Ended June 30, 2022 |
|
|
Year to Date Ended June 30, 2022 |
|
|
|
Power Transmission Technologies |
|
|
Automation and Specialty |
|
|
Corporate |
|
|
Inter-segment eliminations |
|
|
Total |
|
|
Power Transmission Technologies |
|
|
Automation and Specialty |
|
|
Corporate |
|
|
Inter-segment eliminations |
|
|
Total |
|
Net sales |
|
$ |
252.5 |
|
|
$ |
247.3 |
|
|
$ |
— |
|
|
$ |
(1.7 |
) |
|
$ |
498.1 |
|
|
|
506.2 |
|
|
|
506.5 |
|
|
|
(2.9 |
) |
|
|
— |
|
|
$ |
1,009.8 |
|
JVS net sales |
|
|
— |
|
|
|
(6.3 |
) |
|
|
— |
|
|
|
— |
|
|
|
(6.3 |
) |
|
|
— |
|
|
|
(51.8 |
) |
|
|
— |
|
|
|
— |
|
|
|
(51.8 |
) |
Pro Forma Net Sales* |
|
$ |
252.5 |
|
|
$ |
241.0 |
|
|
$ |
— |
|
|
$ |
(1.7 |
) |
|
$ |
491.8 |
|
|
$ |
506.2 |
|
|
$ |
454.7 |
|
|
$ |
(2.9 |
) |
|
$ |
— |
|
|
$ |
958.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income/(loss) from
operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations |
|
$ |
37.4 |
|
|
$ |
31.7 |
|
|
$ |
(5.4 |
) |
|
$ |
— |
|
|
$ |
63.7 |
|
|
$ |
69.7 |
|
|
$ |
66.9 |
|
|
$ |
(5.3 |
) |
|
$ |
— |
|
|
$ |
131.3 |
|
Restructuring costs |
|
|
0.1 |
|
|
|
0.4 |
|
|
|
— |
|
|
|
— |
|
|
|
0.5 |
|
|
|
0.1 |
|
|
|
0.8 |
|
|
|
— |
|
|
|
— |
|
|
|
0.9 |
|
Acceleration of stock
compensation expense upon retirement |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.6 |
|
|
|
— |
|
|
|
0.6 |
|
Acquisition related
amortization expense |
|
|
2.0 |
|
|
|
11.8 |
|
|
|
— |
|
|
|
— |
|
|
|
13.8 |
|
|
|
4.1 |
|
|
|
23.7 |
|
|
|
— |
|
|
|
— |
|
|
|
27.8 |
|
Acquisition related
expenses |
|
|
— |
|
|
|
— |
|
|
|
0.4 |
|
|
|
— |
|
|
|
0.4 |
|
|
|
— |
|
|
|
— |
|
|
|
0.6 |
|
|
|
— |
|
|
|
0.6 |
|
Impairment charges |
|
|
— |
|
|
|
2.2 |
|
|
|
— |
|
|
|
— |
|
|
|
2.2 |
|
|
|
— |
|
|
|
8.3 |
|
|
|
— |
|
|
|
— |
|
|
|
8.3 |
|
Amortization of inventory fair
value adjustment |
|
|
— |
|
|
|
1.2 |
|
|
|
— |
|
|
|
— |
|
|
|
1.2 |
|
|
|
— |
|
|
|
2.4 |
|
|
|
— |
|
|
|
— |
|
|
|
2.4 |
|
Non-GAAP Income From
Operations* |
|
$ |
39.5 |
|
|
$ |
47.3 |
|
|
$ |
(5.0 |
) |
|
$ |
— |
|
|
$ |
81.8 |
|
|
$ |
73.9 |
|
|
$ |
102.1 |
|
|
$ |
(4.1 |
) |
|
$ |
— |
|
|
$ |
171.9 |
|
Non-GAAP Income From
Operations as a percentage of Segment net sales* |
|
|
15.6 |
% |
|
|
19.1 |
% |
|
|
|
|
|
|
|
|
16.4 |
% |
|
|
14.6 |
% |
|
|
20.2 |
% |
|
|
|
|
|
|
|
|
17.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Pro Forma Non-GAAP Income From
Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Income From Operations* |
|
$ |
39.5 |
|
|
$ |
47.3 |
|
|
$ |
(5.0 |
) |
|
$ |
— |
|
|
$ |
81.8 |
|
|
$ |
73.9 |
|
|
$ |
102.1 |
|
|
$ |
(4.1 |
) |
|
$ |
— |
|
|
$ |
171.9 |
|
JVS Non-GAAP Income From Operations |
|
|
— |
|
|
|
(0.6 |
) |
|
|
— |
|
|
|
— |
|
|
|
(0.6 |
) |
|
|
— |
|
|
|
(9.9 |
) |
|
|
— |
|
|
|
— |
|
|
|
(9.9 |
) |
JVS stranded costs |
|
|
— |
|
|
|
1.2 |
|
|
|
(1.2 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2.3 |
|
|
|
(2.3 |
) |
|
|
— |
|
|
|
— |
|
Pro Forma Non-GAAP Income From Operations* |
|
$ |
39.5 |
|
|
$ |
47.9 |
|
|
$ |
(6.2 |
) |
|
$ |
— |
|
|
$ |
81.2 |
|
|
$ |
73.9 |
|
|
$ |
94.5 |
|
|
$ |
(6.4 |
) |
|
$ |
— |
|
|
$ |
162.0 |
|
Pro Forma Non-GAAP Income From Operations as a percent of Pro Forma
Net Sales* |
|
|
15.6 |
% |
|
|
19.9 |
% |
|
|
|
|
|
|
|
|
16.5 |
% |
|
|
14.6 |
% |
|
|
20.8 |
% |
|
|
|
|
|
|
|
|
16.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Segment
Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In millions of dollars |
|
Quarter Ended June 30, 2021 |
|
|
Year to Date Ended June 30, 2021 |
|
|
|
Power Transmission Technologies |
|
|
Automation and Specialty |
|
|
Corporate |
|
|
Inter-segment eliminations |
|
|
Total |
|
|
Power Transmission Technologies |
|
|
Automation and Specialty |
|
|
Corporate |
|
|
Inter-segment eliminations |
|
|
Total |
|
Net sales |
|
$ |
237.6 |
|
|
$ |
252.0 |
|
|
$ |
— |
|
|
$ |
(1.0 |
) |
|
$ |
488.6 |
|
|
$ |
458.6 |
|
|
$ |
504.1 |
|
|
$ |
— |
|
|
$ |
(2.0 |
) |
|
$ |
960.7 |
|
JVS net sales |
|
|
— |
|
|
|
(52.1 |
) |
|
|
— |
|
|
|
— |
|
|
|
(52.1 |
) |
|
|
— |
|
|
|
(113.7 |
) |
|
|
— |
|
|
|
— |
|
|
|
(113.7 |
) |
Pro Forma Net Sales* |
|
$ |
237.6 |
|
|
$ |
199.9 |
|
|
$ |
— |
|
|
$ |
(1.0 |
) |
|
$ |
436.5 |
|
|
$ |
458.6 |
|
|
$ |
390.4 |
|
|
$ |
— |
|
|
$ |
(2.0 |
) |
|
$ |
847.0 |
|
Income from
operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income/(loss) from
operations |
|
$ |
33.2 |
|
|
$ |
37.0 |
|
|
$ |
(4.7 |
) |
|
$ |
— |
|
|
$ |
65.5 |
|
|
$ |
60.4 |
|
|
$ |
78.1 |
|
|
$ |
(7.9 |
) |
|
$ |
— |
|
|
$ |
130.6 |
|
Restructuring costs |
|
|
0.4 |
|
|
|
0.4 |
|
|
|
— |
|
|
|
— |
|
|
|
0.8 |
|
|
|
1.0 |
|
|
|
0.7 |
|
|
|
— |
|
|
|
— |
|
|
|
1.7 |
|
Acquisition related stock
compensation expense |
|
|
— |
|
|
|
— |
|
|
|
0.2 |
|
|
|
— |
|
|
|
0.2 |
|
|
|
— |
|
|
|
— |
|
|
|
0.5 |
|
|
|
— |
|
|
|
0.5 |
|
Acquisition related
amortization expense |
|
|
2.2 |
|
|
|
15.5 |
|
|
|
— |
|
|
|
— |
|
|
|
17.7 |
|
|
|
4.3 |
|
|
|
31.0 |
|
|
|
— |
|
|
|
— |
|
|
|
35.3 |
|
Acquisition related
expenses |
|
|
— |
|
|
|
— |
|
|
|
0.4 |
|
|
|
— |
|
|
|
0.4 |
|
|
|
— |
|
|
|
— |
|
|
|
0.4 |
|
|
|
— |
|
|
|
0.4 |
|
Non-GAAP Income From
Operations* |
|
$ |
35.8 |
|
|
$ |
52.9 |
|
|
$ |
(4.1 |
) |
|
$ |
— |
|
|
$ |
84.6 |
|
|
$ |
65.7 |
|
|
$ |
109.8 |
|
|
$ |
(7.0 |
) |
|
$ |
— |
|
|
$ |
168.5 |
|
Non-GAAP Income From
Operations as a percentage of Segment net sales* |
|
|
15.1 |
% |
|
|
21.0 |
% |
|
|
|
|
|
|
|
|
17.3 |
% |
|
|
14.3 |
% |
|
|
21.8 |
% |
|
|
|
|
|
|
|
|
17.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Pro Forma Non-GAAP Income From
Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Income From Operations* |
|
$ |
35.8 |
|
|
$ |
52.9 |
|
|
$ |
(4.1 |
) |
|
$ |
— |
|
|
$ |
84.6 |
|
|
$ |
65.7 |
|
|
$ |
109.8 |
|
|
$ |
(7.0 |
) |
|
$ |
— |
|
|
$ |
168.5 |
|
JVS Non-GAAP Income From Operations |
|
|
— |
|
|
|
(11.3 |
) |
|
|
— |
|
|
|
— |
|
|
|
(11.3 |
) |
|
|
— |
|
|
|
(26.0 |
) |
|
|
— |
|
|
|
— |
|
|
|
(26.0 |
) |
JVS stranded costs |
|
|
— |
|
|
|
1.2 |
|
|
|
(1.2 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2.4 |
|
|
|
(2.4 |
) |
|
|
— |
|
|
|
— |
|
Pro Forma Non-GAAP Income From Operations* |
|
$ |
35.8 |
|
|
$ |
42.8 |
|
|
$ |
(5.3 |
) |
|
$ |
— |
|
|
$ |
73.3 |
|
|
$ |
65.7 |
|
|
$ |
86.2 |
|
|
$ |
(9.4 |
) |
|
$ |
— |
|
|
$ |
142.5 |
|
Pro Forma Non-GAAP Income From Operations as a percent of Pro Forma
Net Sales* |
|
|
15.1 |
% |
|
|
21.4 |
% |
|
|
|
|
|
|
|
|
16.8 |
% |
|
|
14.3 |
% |
|
|
22.1 |
% |
|
|
|
|
|
|
|
|
16.8 |
% |
*Discussion of Non-GAAP Financial Measures
The non-GAAP financial measures used in this release are
utilized by management in comparing our operating performance on a
consistent basis. We believe that these financial measures are
appropriate to enhance the overall understanding of our underlying
operating performance trends compared to historical and prospective
periods and our peers. We believe that these measures provide
important supplemental information to management and investors
regarding financial and business trends relating to the Company's
financial condition and results of operations as well as insight
into the compliance with our debt covenants. Non-GAAP financial
measures should not be considered in isolation from, or as a
substitute for, financial information calculated in accordance with
GAAP. Investors are encouraged to review the reconciliation of
these non-GAAP measures to their most directly comparable GAAP
financial measures. Our industry peers may provide similar
supplemental non-GAAP information with respect to one or more of
these measures, although they may not use the same or comparable
terminology and may not make identical adjustments. A
reconciliation of non-GAAP financial measures presented above to
our GAAP results has been provided in the financial tables included
in this press release.
Organic Sales and Organic Sales Growth
Organic Sales in this release are net sales excluding the impact
of foreign currency translation and acquisitions. Organic Sales can
be expressed as a dollar amount or a percentage rate when
describing Organic Sales Growth.
Non-GAAP Net Income, Non-GAAP Income From Operations, Non-GAAP
Diluted Earnings Per Share, Non-GAAP Operating Income Margin, and
Non-GAAP Net Income and Non-GAAP Diluted EPS Guidance
Non-GAAP Net Income, Non-GAAP Income From Operations, Non-GAAP
Diluted Earnings Per Share, and Non-GAAP Net Income and Non-GAAP
Diluted Earnings Per Share Guidance exclude, as applicable to the
particular period, acquisition related amortization expense,
acquisition related expense, acquisition related stock compensation
expense, restructuring and consolidation costs, non-cash
amortization of interest rate swap expense and other income or
charges that management does not consider to be directly related to
the Company’s core operating performance. Non-GAAP Diluted Earnings
Per Share is calculated by dividing Non-GAAP Net Income by GAAP
weighted average shares outstanding (diluted). Non-GAAP Operating
Income Margin is calculated by dividing Non-GAAP Income From
Operations by GAAP Net Sales.
Non-GAAP Gross Profit
Non-GAAP gross profit excludes amortization of inventory fair
value adjustment. Non-GAAP gross profit margin is calculated by
dividing Non-GAAP gross profit by GAAP Net Sales.
Non-GAAP Adjusted EBITDA and Non-GAAP Adjusted EBITDA
Guidance
Non-GAAP Adjusted EBITDA and Non-GAAP Adjusted EBITDA Guidance
represent earnings before interest, taxes, depreciation,
acquisition related amortization, acquisition related costs,
restructuring costs, stock-based compensation, asset impairment and
other income or charges that management does not consider to be
directly related to the Company’s core operating performance.
Non-GAAP Adjusted EBITDA Margin
Non-GAAP Adjusted EBITDA Margin is calculated by dividing
Non-GAAP Adjusted EBITDA by GAAP Net Sales.
Non-GAAP Free Cash Flow and Non-GAAP Free Cash Flow Guidance
Non-GAAP Free Cash Flow and Non-GAAP Free Cash Flow Guidance are
calculated by deducting purchases of property, plant and
equipment.
Non-GAAP Adjusted Free Cash Flow and Non-GAAP Adjusted Free Cash
Flow Guidance
Non-GAAP Adjusted Free Cash Flow and Non-GAAP Adjusted Free Cash
Flow Guidance are calculated by deducting purchases of property,
plant and equipment and adding back the JVS transaction costs paid
and tax paid as a result of the JVS divestiture.
Non-GAAP Operating Working Capital
Non-GAAP Operating Working Capital is calculated by deducting
accounts payable from net trade receivables plus inventories.
Net Debt
Net Debt is calculated by subtracting cash and cash equivalents
from total gross debt.
Pro Forma Net Sales, Pro Forma Net Sales Guidance, Pro Forma Net
Income, Pro Forma Non-GAAP Net Income Guidance, Pro Forma Diluted
Earnings Per Share, Pro Forma GAAP Diluted Earnings Per Share
Guidance, Pro Forma Non-GAAP Earnings per Diluted Share, Pro Forma
Non-GAAP Earnings per Diluted Share Guidance, Pro Forma Non-GAAP
Adjusted EBITDA, Pro Forma Non-GAAP Adjusted EBITDA Guidance, Pro
Forma Non-GAAP Adjusted EBITDA Margin, Pro Forma Non-GAAP Operating
Income Margin, Pro Forma Non-GAAP Income From Operations, Pro Forma
Non-GAAP Gross Profit, Pro Forma Non-GAAP Gross Profit as a Percent
of Pro Forma Net Sales, Pro Forma Organic Sales and Pro Forma
Organic Sales Growth, Pro Forma Non-GAAP Free Cash Flow
Guidance
Pro Forma GAAP and Pro Forma Non-GAAP financial measures and
guidance exclude the impact of the JVS business.
Forward-Looking Statements
All statements, other than statements of historical fact
included in this release are forward-looking statements, as that
term is defined in the Private Securities Litigation Reform Act of
1995. These statements include, but are not limited to, any
statement that may predict, forecast, indicate or imply future
results, performance, achievements or events. Forward-looking
statements can generally be identified by phrases such as
“believes,” “expects,” “potential,” “continues,” “may,” “should,”
“seeks,” “predicts,” “anticipates,” “intends,” “projects,”
“estimates,” “plans,” “could,” “designed”, “should be,” "will,”
“guidance,” “outlook,” and other similar expressions that denote
expectations of future or conditional events rather than statements
of fact. Forward-looking statements also may relate to strategies,
plans and objectives for, and potential results of, future
operations, financial results, financial condition, business
prospects, growth strategy and liquidity, and are based upon
financial data, market assumptions and management's current
business plans and beliefs or current estimates of future results
or trends available only as of the time the statements are made,
which may become out of date or incomplete. Forward looking
statements are inherently uncertain, and investors must recognize
that events could differ significantly from our expectations. These
statements include, but may not be limited to, the statements under
the “Business Outlook” section and statements related to
management's expectations regarding (a) pent-up demand and
CapEx investments continuing across many markets and the Company
being well-positioned to navigate through such period, (b) the
underlying health of the Company and its industry, (c) the
Company's ability to achieve targeted synergies from its
acquisition of Nook Industries, (d) the Company's commitment to
taking pricing actions if necessary to continue to protect margins,
(e) the Company’s execution on its strategy to strengthen its
balance sheet and position its portfolio with highly engineered
products in the motion control and power transmission markets, (f)
further strengthening of cash flows, (g) the Company's
ongoing efforts to lower its leverage, (h) the Company’s business
outlook for fiscal year 2022 and (i) the Company continuing
to transform into a premier industrial company and technology
leader.
In addition to the risks and uncertainties noted in this
release, there are certain factors that could cause actual results
to differ materially from those anticipated by some of the
statements made. These include: (1) competitive pressures, (2)
changes in political and economic conditions in the United States
and abroad, including, but not limited to, changes as a result of
the war in Ukraine, and the cyclical nature of our markets, (3)
loss of distributors, (4) the ability to develop new products and
respond to customer needs, (5) risks associated with international
operations, including currency risks, and the effects of tariffs
and other trade actions taken by the United States and other
countries, (6) accuracy of estimated forecasts of OEM customers and
the impact of the current global economic environment on our
customers, (7) risks associated with a disruption to our supply
chain including the impact of the global semiconductor chip
shortage, (8) fluctuations in the costs of raw materials used in
our products, (9) product liability claims, (10) work stoppages and
other labor issues involving the Company’s facilities or the
Company’s customers, (11) changes in employment, environmental, tax
and other laws and changes in the enforcement of laws, (12) loss of
key management and other personnel, (13) risks associated with
compliance with environmental laws, (14) the ability to
successfully execute, manage and integrate key acquisitions and
mergers, (15) failure to obtain or protect intellectual property
rights, (16) impairment or reduction of goodwill or intangible
assets, (17) failure of operating equipment or information
technology infrastructure, including cyber-attacks or other
security breaches, and failure to comply with data privacy laws or
regulations, (18) risks associated with our debt leverage, (19)
risks associated with restrictions contained in the agreements
governing Altra’s $400 million aggregate principal amount of 6.125%
senior notes due 2026 and Altra’s revolving credit facility and
term loan facility, (20) risks associated with compliance with tax
laws, (21) risks associated with the global recession and
volatility and disruption in the global financial markets, (22)
risks associated with enhancements to our enterprise resource
planning system, (23) risks associated with the Nook Industries and
A&S acquisitions and integration and other acquisitions, (24)
risks associated with certain minimum purchase agreements we have
with suppliers, (25) risks related to our relationships with
strategic partners, (26) our ability to offset increased commodity
and labor costs with increased prices, (27) risks associated with
our exposure to variable interest rates and foreign currency
exchange rates, (28) disruption of our supply chain, (29)
risks associated with our exposure to renewable energy markets,
(30) risks related to regulations regarding conflict minerals, (31)
risks related to restructuring and plant consolidations, (32)
exposure to United Kingdom political developments, including the
effect of its withdrawal from the European Union, and the
uncertainty surrounding the effect of Brexit and related negative
developments in the European Union and elsewhere, (33) Altra’s
ability to achieve the efficiencies, savings and other benefits
anticipated from its cost reduction, margin improvement,
restructuring, plant consolidation and other business optimization
initiatives, (34) the risks associated with transitioning from
LIBOR to a replacement alternative reference rate, (35) the scope
and duration of the COVID-19 global pandemic and its impact on
global economic systems and our employees, sites, operations,
customers and supply chain, including the impact of the pandemic on
manufacturing and supply capabilities throughout the world, (36)
adverse conditions in the credit and capital markets limiting or
preventing the Company’s and its customers’ and suppliers’ ability
to borrow or raise capital, (37) the Company’s ability to invest in
new technologies and manufacturing techniques and to develop or
adapt to changing technology and manufacturing techniques, (38)
defects, quality issues, inadequate disclosure or misuse with
respect to our products and capabilities, (39) changes in labor or
employment laws, (40) the Company’s ability to recruit, retain and
motivate key sales, marketing or engineering personnel, (41)
unplanned repairs or equipment outages, (42) changes in the
Company’s tax rates, or exposure to additional income tax
liabilities or assessments, as well as audits by tax authorities,
(43) the risks associated with the Company’s ability to
successfully divest or otherwise dispose of businesses that
are deemed not to fit with our strategic plan or are not achieving
the desired return on investment and (44) other risks,
uncertainties and other factors described in the Company's
quarterly reports on Form 10-Q and annual reports on Form 10-K and
in the Company's other filings with the U.S. Securities and
Exchange Commission (SEC) or in materials incorporated therein by
reference. Except as required by applicable law, Altra does not
intend to update or alter its forward-looking statements, whether
as a result of new information, future events or otherwise.
AIMC-E
CONTACT:
Altra Investor Relations
781-917-0600
Email: ir@altramotion.com
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