AGCO Reports Second Quarter Results
AGCO reported second-quarter 2022 net sales of approximately $2.9 billion, a 2.3% increase year-over-year, boosted by core sales growth of 9.8% after adjusting for currency impacts. The reported net income was $2.37 per share, down from $3.73 in the same quarter last year. For the first half of 2022, AGCO achieved sales of approximately $5.6 billion, up 7.1%. Regional highlights include significant sales growth in South America (86.6%) but declines in Europe/Middle East (10.3%). Full-year adjusted earnings per share guidance remains at $11.70 to $11.90.
- Net sales for Q2 2022 reached $2.9 billion, a 9.8% increase excluding currency impacts.
- Strong performance in South America with a 86.6% increase in net sales.
- Maintained full-year adjusted earnings per share outlook of $11.70 to $11.90.
- Reported net income declined to $2.37 per share from $3.73 year-over-year.
- Operating income decreased in North America due to inflationary pressures and cyberattack impacts.
- Sales in Europe/Middle East fell by 10.3% compared to last year.
Net sales for the first six months of 2022 were approximately
Second Quarter Highlights
-
Reported regional sales results(1):
Europe /Middle East (“EME”) (10.3)%,North America +0.7% ,South America +86.6% ,Asia/Pacific /Africa (“APA”) (5.5)% -
Constant currency regional sales results(1)(2)(3): EME +
3.2% ,North America +1.4% ,South America +77.2% , APA +1.7% -
Regional operating margin performance: EME
11.0% ,North America 6.9% ,South America 16.5% , APA14.1% -
Fully operational within approximately two weeks of
May 2022 cyberattack- Q2 production, sales and net income were negatively impacted
-
Paid a variable special dividend of
per share as compared to$4.50 in 2021$4.00 - Maintained full-year outlook for adjusted earnings per share
(1) |
As compared to second quarter 2021. |
(2) |
Excludes currency translation impact. |
(3) |
See reconciliation of Non-GAAP measures in appendix. |
“AGCO delivered solid results in the second quarter by remaining focused on our farmer-first strategy, while effectively managing the challenges associated with the cyberattack, currency headwinds and ongoing supply chain constraints,” stated
Market Update
|
|
Industry Unit Retail Sales |
||
|
|
Tractors |
|
Combines |
Six Months Ended |
|
Change from Prior Year Period |
|
Change from Prior Year Period |
|
|
(7)% |
|
(8)% |
|
|
|
|
(5)% |
|
|
(10)% |
|
(16)% |
(1) Excludes compact tractors. |
||||
(2) Based on Company estimates. |
“Healthy grain production is forecasted for the major agricultural production regions. Although crop prices have declined from record levels earlier in 2022, they remain supportive and are helping farmers offset inflationary pressures from higher fuel, fertilizer and other input costs. Farm income estimates remain elevated and are expected to extend the strong end-market demand,” stated
Global industry production and retail sales were down modestly in the first 6 months of 2022 compared to last year's elevated levels due primarily to supply chain limitations. Industry retail sales in
Western European industry retail tractors decreased approximately
In
“While dependent on supply chain performance, we continue to expect strong demand in the second half to support full year 2022 industry retail sales that are expected to be above 2021 levels in
Regional Results
AGCO Regional
Three Months Ended |
|
2022 |
|
2021 |
|
% change
|
|
% change
|
|
% change
|
||
|
|
$ |
739.9 |
|
$ |
734.7 |
|
|
|
(0.7)% |
|
|
|
|
|
519.2 |
|
|
278.3 |
|
|
|
|
|
|
|
|
|
1,467.6 |
|
|
1,635.2 |
|
(10.3)% |
|
(13.5)% |
|
|
|
|
|
218.5 |
|
|
231.1 |
|
(5.5)% |
|
(7.1)% |
|
|
Total |
|
$ |
2,945.2 |
|
$ |
2,879.3 |
|
|
|
(7.5)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Six Months Ended |
|
2022 |
|
2021 |
|
% change
|
|
% change
|
|
% change
|
||
|
|
$ |
1,440.9 |
|
$ |
1,345.8 |
|
|
|
(0.5)% |
|
|
|
|
|
875.6 |
|
|
518.8 |
|
|
|
|
|
|
|
|
|
2,870.7 |
|
|
2,962.4 |
|
(3.1)% |
|
(11.6)% |
|
|
|
|
|
443.7 |
|
|
431.0 |
|
|
|
(6.0)% |
|
|
Total |
|
$ |
5,630.9 |
|
$ |
5,258.0 |
|
|
|
(6.4)% |
|
|
(1) See Footnotes for additional disclosures. |
AGCO’s North American net sales grew
Net sales in the South American region increased
Net sales in
Outlook
The ability of the Company’s supply chain to deliver parts and components on schedule is currently difficult to predict. The following outlook is based on AGCO’s current estimates of component deliveries. AGCO’s results will be impacted if the actual supply chain delivery performance differs from these estimates.
-
Net sales for 2022 of
to$12.4 billion $12.6 billion - Gross and operating margins are projected to improve from 2021 levels, reflecting the impact of higher sales and production volumes as well as favorable pricing to offset material and labor cost inflation
- Increased investments in engineering and other technology investments to support AGCO’s precision ag and digital initiatives
-
Full year adjusted earnings per share of
to$11.70 $11.90
* * * * *
AGCO will host a conference call with respect to this earnings announcement at
* * * * *
Safe Harbor Statement
Statements that are not historical facts, including the projections of earnings per share, production levels, sales, industry demand, market conditions, commodity prices, currency translation, farm income levels, margin levels, strategy, investments in product and technology development, new product introductions, restructuring and other cost reduction initiatives, production volumes, tax rates and general economic conditions, are forward-looking and subject to risks that could cause actual results to differ materially from those suggested by the statements. The following are among the factors that could cause actual results to differ materially from the results discussed in or implied by the forward-looking statements.
- COVID-19 has negatively impacted our business, initially through closures, higher absentee rates, and reduced production at both our plants and the plants that supply us with parts and components, and more recently through supply chain challenges, including the inability of some of our suppliers to meet demand and logistics and transportation-related companies to deliver products in a timely manner. In addition, we have had to incur various costs related to preventing the spread of COVID-19, including changes to our factories and other facilities and those related to enabling remote work. We expect COVID-19 to continue to impact our business, although the manner and extent to which it impacts us will depend on future developments, including the duration of the pandemic, the timing, distribution and impact of vaccinations, and possible mutations of the virus that are more contagious or resistant to current vaccines. Measures taken by governments around the world, as well as businesses, including us, and the general public in order to limit the spread of COVID-19 will impact our business as well. These measures have included travel bans and restrictions, quarantines, shelter in place orders, curfews, business and government office closures, increased border controls or closures, port closures and transportation restrictions. The impacts of COVID-19 and such measures could include decreases in demand for our products, factory closures, increased absentee rates, reduced production, incurrence of additional costs due to the adherence to cleaning requirements and social distancing guidelines and increased costs of labor, parts and components and shipping, incurrence of impairment charges, slower collections and larger write-offs of accounts receivable, among other changes.
- Our financial results depend entirely upon the agricultural industry, and factors that adversely affect the agricultural industry generally, including declines in the general economy, adverse weather, tariffs, increases in farm input costs, lower commodity prices, lower farm income and changes in the availability of credit for our retail customers, will adversely affect us.
-
A majority of our sales and manufacturing takes place outside
the United States , and, many of our sales involve products that are manufactured in one country and sold in a different country, and as a result, we are exposed to risks related to foreign laws, taxes and tariffs, trade restrictions, economic conditions, labor supply and relations, political conditions and governmental policies. These risks may delay or reduce our realization of value from our international operations. Among these risks are the uncertain consequences of Brexit, Russian sanctions and tariffs imposed on exports to and imports fromChina . -
Most retail sales of the products that we manufacture are financed, either by our joint ventures with
Rabobank or by a bank or other private lender. Our joint ventures withRabobank , which are controlled byRabobank and are dependent uponRabobank for financing as well, finance over50% of the retail sales of our tractors and combines in the markets where the joint ventures operate. Any difficulty byRabobank to continue to provide that financing, or any business decision byRabobank as the controlling member not to fund the business or particular aspects of it (for example, a particular country or region), would require the joint ventures to find other sources of financing (which may be difficult to obtain), or us to find another source of retail financing for our customers, or our customers would be required to utilize other retail financing providers. As a result of the recent economic downturn, financing for capital equipment purchases generally has become more difficult in certain regions and in some cases, can be expensive to obtain. To the extent that financing is not available or available only at unattractive prices, our sales would be negatively impacted. - Both AGCO and our finance joint ventures have substantial accounts receivable from dealers and end customers, and we would be adversely impacted if the collectability of these receivables was less than optimal; this collectability is dependent upon the financial strength of the farm industry, which in turn is dependent upon the general economy and commodity prices, as well as several of the other factors listed in this section.
- We have experienced substantial and sustained volatility with respect to currency exchange rate and interest rate changes, which can adversely affect our reported results of operations and the competitiveness of our products.
- Our success depends on the introduction of new products, particularly engines that comply with emission requirements and sustainable smart farming technology, which require substantial expenditures; there is no certainty that we can develop the necessary technology or that the technology that we develop will be attractive to farmers or available at competitive prices.
- Our expansion plans in emerging markets, including establishing a greater manufacturing and marketing presence and growing our use of component suppliers, could entail significant risks.
- Our business increasingly is subject to regulations relating to privacy and data protection, and if we violate any of those regulations, or otherwise are the victim of a cyber-attack, we could be subject to significant claims, penalties and damages.
-
Attacks through ransomware and other means are rapidly increasing, and in
May 2022 we learned that we had been the victim of a cyberattack. We have recently reexamined our safeguards as a result of the cyberattack, and continue to implement and bolster such safeguards that we believe are reasonable. However, there always will be the potential of the risk that a cyberattack will be successful and will disrupt our business, either through shutting down our operations, destroying data, exfiltrating data or otherwise. -
We depend on suppliers for components, parts and raw materials for our products, and any failure by our suppliers to provide products as needed, or by us to promptly address supplier issues, will adversely impact our ability to timely and efficiently manufacture and sell products. Recently suppliers of several key parts and components have not been able to meet our demand and we have had to decrease our production levels. In addition, the potential of natural gas shortages in
Europe , as well as predicted overall shortages in other energy sources, could also negatively impact our production and that of our supply chain in the future. It is unclear when these supply chain disruptions will be restored or what the ultimate impact on production, and consequently sales, will be. - Although as a general proposition our business has not experienced significant inflation in many years, beginning in the second half of 2021 we experienced significant inflation in a range of costs, including for parts and components, shipping, and energy. While we have been able to pass along most of those costs through increased prices, there can be no assurance that we will be able to continue to do so. If we are not, it will adversely impact our performance.
- We face significant competition, and if we are unable to compete successfully against other agricultural equipment manufacturers, we would lose customers and our net sales and performance would decline.
- We have a substantial amount of indebtedness, and, as a result, we are subject to certain restrictive covenants and payment obligations that may adversely affect our ability to operate and expand our business.
Further information concerning these and other factors is included in AGCO’s filings with the
* * * * *
About AGCO
AGCO (NYSE: AGCO) is a global leader in the design, manufacture and distribution of agricultural solutions and delivers high-tech solutions for farmers feeding the world through its full line of equipment and related services. AGCO products are sold through five core brands, Challenger®, Fendt®, GSI®, Massey Ferguson®, Precision Planting® and Valtra®, supported by Fuse® smart farming solutions. Founded in 1990 and headquartered in
# # # # #
Please visit our website at www.agcocorp.com
AGCO CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited and in millions)
|
|
|
|
||||
ASSETS |
|
|
|
||||
Current Assets: |
|
|
|
||||
Cash, cash equivalents and restricted cash |
$ |
580.6 |
|
|
$ |
889.1 |
|
Accounts and notes receivable, net |
|
1,149.3 |
|
|
|
991.5 |
|
Inventories, net |
|
3,382.3 |
|
|
|
2,593.7 |
|
Other current assets |
|
592.1 |
|
|
|
539.8 |
|
Total current assets |
|
5,704.3 |
|
|
|
5,014.1 |
|
Property, plant and equipment, net |
|
1,405.6 |
|
|
|
1,464.8 |
|
Right-of-use lease assets |
|
153.4 |
|
|
|
154.1 |
|
Investments in affiliates |
|
417.0 |
|
|
|
413.5 |
|
Deferred tax assets |
|
203.8 |
|
|
|
169.3 |
|
Other assets |
|
317.8 |
|
|
|
293.3 |
|
Intangible assets, net |
|
388.8 |
|
|
|
392.2 |
|
|
|
1,298.2 |
|
|
|
1,280.8 |
|
Total assets |
$ |
9,888.9 |
|
|
$ |
9,182.1 |
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
||||
Current Liabilities: |
|
|
|
||||
Current portion of long-term debt |
$ |
2.0 |
|
|
$ |
2.1 |
|
Short-term borrowings |
|
320.8 |
|
|
|
90.8 |
|
Accounts payable |
|
1,204.1 |
|
|
|
1,078.3 |
|
Accrued expenses |
|
1,915.0 |
|
|
|
2,062.2 |
|
Other current liabilities |
|
188.6 |
|
|
|
221.2 |
|
Total current liabilities |
|
3,630.5 |
|
|
|
3,454.6 |
|
Long-term debt, less current portion and debt issuance costs |
|
2,018.0 |
|
|
|
1,411.2 |
|
Operating lease liabilities |
|
119.8 |
|
|
|
115.5 |
|
Pension and postretirement health care benefits |
|
203.6 |
|
|
|
209.0 |
|
Deferred tax liabilities |
|
114.2 |
|
|
|
116.9 |
|
Other noncurrent liabilities |
|
419.5 |
|
|
|
431.1 |
|
Total liabilities |
|
6,505.6 |
|
|
|
5,738.3 |
|
|
|
|
|
||||
Stockholders’ Equity: |
|
|
|
||||
|
|
|
|
||||
Common stock |
|
0.7 |
|
|
|
0.7 |
|
Additional paid-in capital |
|
13.3 |
|
|
|
3.9 |
|
Retained earnings |
|
5,130.3 |
|
|
|
5,182.2 |
|
Accumulated other comprehensive loss |
|
(1,761.1 |
) |
|
|
(1,770.9 |
) |
|
|
3,383.2 |
|
|
|
3,415.9 |
|
Noncontrolling interests |
|
0.1 |
|
|
|
27.9 |
|
Total stockholders’ equity |
|
3,383.3 |
|
|
|
3,443.8 |
|
Total liabilities and stockholders’ equity |
$ |
9,888.9 |
|
|
$ |
9,182.1 |
|
See accompanying notes to condensed consolidated financial statements. |
AGCO CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited and in millions, except per share data)
|
Three Months Ended |
||||||
|
2022 |
|
2021 |
||||
Net sales |
$ |
2,945.2 |
|
$ |
2,879.3 |
|
|
Cost of goods sold |
|
2,254.7 |
|
|
2,186.9 |
|
|
Gross profit |
|
690.5 |
|
|
692.4 |
|
|
Selling, general and administrative expenses |
|
302.5 |
|
|
276.3 |
|
|
Engineering expenses |
|
107.1 |
|
|
107.2 |
|
|
Amortization of intangibles |
|
15.4 |
|
|
14.2 |
|
|
Restructuring expenses |
|
0.4 |
|
|
4.7 |
|
|
Bad debt expense (credit) |
|
1.6 |
|
|
(0.3 |
) |
|
Income from operations |
|
263.5 |
|
|
290.3 |
|
|
Interest expense, net |
|
5.9 |
|
|
2.2 |
|
|
Other expense, net |
|
21.7 |
|
|
14.6 |
|
|
Income before income taxes and equity in net earnings of affiliates |
|
235.9 |
|
|
273.5 |
|
|
Income tax provision |
|
71.5 |
|
|
7.7 |
|
|
Income before equity in net earnings of affiliates |
|
164.4 |
|
|
265.8 |
|
|
Equity in net earnings of affiliates |
|
13.2 |
|
|
18.6 |
|
|
Net income |
|
177.6 |
|
|
284.4 |
|
|
Net loss (income) attributable to noncontrolling interests |
|
0.1 |
|
|
(1.6 |
) |
|
Net income attributable to |
$ |
177.7 |
|
$ |
282.8 |
|
|
Net income per common share attributable to |
|
|
|
||||
Basic |
$ |
2.38 |
|
$ |
3.74 |
|
|
Diluted |
$ |
2.37 |
|
$ |
3.73 |
|
|
Cash dividends declared and paid per common share |
$ |
4.72 |
|
$ |
4.17 |
|
|
Weighted average number of common and common equivalent shares outstanding: |
|
|
|
||||
Basic |
|
74.6 |
|
|
75.5 |
|
|
Diluted |
|
74.9 |
|
|
75.9 |
|
|
See accompanying notes to condensed consolidated financial statements. |
AGCO CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited and in millions, except per share data)
|
Six Months Ended |
||||||
|
2022 |
|
2021 |
||||
Net sales |
$ |
5,630.9 |
|
$ |
5,258.0 |
|
|
Cost of goods sold |
|
4,309.1 |
|
|
3,995.1 |
|
|
Gross profit |
|
1,321.8 |
|
|
1,262.9 |
|
|
Selling, general and administrative expenses |
|
573.6 |
|
|
536.9 |
|
|
Engineering expenses |
|
207.4 |
|
|
203.5 |
|
|
Amortization of intangibles |
|
30.7 |
|
|
31.7 |
|
|
Impairment charges |
|
36.0 |
|
|
— |
|
|
Restructuring expenses |
|
3.4 |
|
|
6.0 |
|
|
Bad debt expense (credit) |
|
3.2 |
|
|
(0.7 |
) |
|
Income from operations |
|
467.5 |
|
|
485.5 |
|
|
Interest expense, net |
|
6.3 |
|
|
5.6 |
|
|
Other expense, net |
|
39.2 |
|
|
26.1 |
|
|
Income before income taxes and equity in net earnings of affiliates |
|
422.0 |
|
|
453.8 |
|
|
Income tax provision |
|
131.7 |
|
|
51.3 |
|
|
Income before equity in net earnings of affiliates |
|
290.3 |
|
|
402.5 |
|
|
Equity in net earnings of affiliates |
|
24.3 |
|
|
33.3 |
|
|
Net income |
|
314.6 |
|
|
435.8 |
|
|
Net loss (income) attributable to noncontrolling interests |
|
14.9 |
|
|
(2.2 |
) |
|
Net income attributable to |
$ |
329.5 |
|
$ |
433.6 |
|
|
Net income per common share attributable to |
|
|
|
||||
Basic |
$ |
4.41 |
|
$ |
5.75 |
|
|
Diluted |
$ |
4.40 |
|
$ |
5.71 |
|
|
Cash dividends declared and paid per common share |
$ |
4.92 |
|
$ |
4.33 |
|
|
Weighted average number of common and common equivalent shares outstanding: |
|
|
|
||||
Basic |
|
74.6 |
|
|
75.4 |
|
|
Diluted |
|
74.9 |
|
|
75.9 |
|
|
See accompanying notes to condensed consolidated financial statements. |
AGCO CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited and in millions)
|
Six Months Ended |
||||||
|
2022 |
|
2021 |
||||
Cash flows from operating activities: |
|
|
|
||||
Net income |
$ |
314.6 |
|
|
$ |
435.8 |
|
Adjustments to reconcile net income to net cash used in operating activities: |
|
|
|
||||
Depreciation |
|
106.5 |
|
|
|
109.9 |
|
Amortization of intangibles |
|
30.7 |
|
|
|
31.7 |
|
Stock compensation expense |
|
17.6 |
|
|
|
15.2 |
|
Impairment charges |
|
36.0 |
|
|
|
— |
|
Equity in net earnings of affiliates, net of cash received |
|
(23.7 |
) |
|
|
(32.6 |
) |
Deferred income tax benefit |
|
(0.6 |
) |
|
|
(65.5 |
) |
Other |
|
2.7 |
|
|
|
9.2 |
|
Changes in operating assets and liabilities: |
|
|
|
||||
Accounts and notes receivable, net |
|
(219.5 |
) |
|
|
(265.5 |
) |
Inventories, net |
|
(888.1 |
) |
|
|
(721.5 |
) |
Other current and noncurrent assets |
|
(91.9 |
) |
|
|
(73.3 |
) |
Accounts payable |
|
191.1 |
|
|
|
320.5 |
|
Accrued expenses |
|
(46.2 |
) |
|
|
(0.8 |
) |
Other current and noncurrent liabilities |
|
4.6 |
|
|
|
112.0 |
|
Total adjustments |
|
(880.8 |
) |
|
|
(560.7 |
) |
Net cash used in operating activities |
|
(566.2 |
) |
|
|
(124.9 |
) |
Cash flows from investing activities: |
|
|
|
||||
Purchases of property, plant and equipment |
|
(139.2 |
) |
|
|
(120.6 |
) |
Proceeds from sale of property, plant and equipment |
|
2.1 |
|
|
|
2.4 |
|
Investment in unconsolidated affiliates |
|
(1.5 |
) |
|
|
(1.0 |
) |
(Purchase) sale of businesses, net of cash acquired |
|
(111.3 |
) |
|
|
5.4 |
|
Other |
|
— |
|
|
|
(2.4 |
) |
Net cash used in investing activities |
|
(249.9 |
) |
|
|
(116.2 |
) |
Cash flows from financing activities: |
|
|
|
||||
Proceeds from indebtedness, net |
|
947.2 |
|
|
|
4.0 |
|
Payment of dividends to stockholders |
|
(368.5 |
) |
|
|
(328.6 |
) |
Payment of minimum tax withholdings on stock compensation |
|
(20.8 |
) |
|
|
(33.6 |
) |
Payment of debt issuance costs |
|
(0.2 |
) |
|
|
— |
|
Distributions to noncontrolling interest |
|
(11.6 |
) |
|
|
(3.5 |
) |
Net cash provided by (used in) financing activities |
|
546.1 |
|
|
|
(361.7 |
) |
Effects of exchange rate changes on cash, cash equivalents and restricted cash |
|
(38.5 |
) |
|
|
(16.1 |
) |
Decrease in cash, cash equivalents and restricted cash |
|
(308.5 |
) |
|
|
(618.9 |
) |
Cash, cash equivalents and restricted cash, beginning of period |
|
889.1 |
|
|
|
1,119.1 |
|
Cash, cash equivalents and restricted cash, end of period |
$ |
580.6 |
|
|
$ |
500.2 |
|
See accompanying notes to condensed consolidated financial statements. |
AGCO CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited, in millions, except share amounts, per share data and employees)
1. STOCK COMPENSATION EXPENSE
The Company recorded stock compensation expense as follows (in millions):
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
Cost of goods sold |
$ |
0.3 |
|
$ |
0.3 |
|
$ |
0.6 |
|
$ |
0.6 |
||||
Selling, general and administrative expenses |
|
10.3 |
|
|
8.2 |
|
|
17.0 |
|
|
14.7 |
||||
Total stock compensation expense |
$ |
10.6 |
|
$ |
8.5 |
|
$ |
17.6 |
|
$ |
15.3 |
2. IMPAIRMENT CHARGES
As a consequence of the current conflict between
3. RESTRUCTURING EXPENSES
In recent years, the Company announced and initiated several actions to rationalize employee headcount in various manufacturing facilities and administrative offices located in the
4. INDEBTEDNESS
Long-term debt at
|
|
|
|
||||
Credit facility, expires 2023 |
|
800.0 |
|
|
|
— |
|
|
|
260.4 |
|
|
|
283.7 |
|
Senior term loans due between 2023 and 2028 |
|
332.7 |
|
|
|
445.9 |
|
|
|
624.8 |
|
|
|
680.8 |
|
Other long-term debt |
|
6.1 |
|
|
|
7.7 |
|
Debt issuance costs |
|
(4.0 |
) |
|
|
(4.8 |
) |
|
|
2,020.0 |
|
|
|
1,413.3 |
|
Less: |
|
|
|
||||
Current portion of other long-term debt |
|
(2.0 |
) |
|
|
(2.1 |
) |
Total long-term indebtedness, less current portion |
$ |
2,018.0 |
|
|
$ |
1,411.2 |
|
In
In
As of
5. INVENTORIES
Inventories at
|
|
|
|
||||
Finished goods |
$ |
951.9 |
|
$ |
718.2 |
||
Repair and replacement parts |
|
737.6 |
|
|
697.8 |
||
Work in process |
|
625.6 |
|
|
282.8 |
||
Raw materials |
|
1,067.2 |
|
|
894.9 |
||
Inventories, net |
$ |
3,382.3 |
|
$ |
2,593.7 |
6. ACCOUNTS RECEIVABLE SALES AGREEMENTS
The Company has accounts receivable sales agreements that permit the sale, on an ongoing basis, of a majority of its wholesale receivables in
In addition, the Company sells certain trade receivables under factoring arrangements to other financial institutions around the world. As of
Losses on sales of receivables associated with the accounts receivable financing facilities discussed above, reflected within “Other expense, net” in the Company’s Condensed Consolidated Statements of Operations, were approximately
The Company’s finance joint ventures in
7. NET INCOME PER SHARE
A reconciliation of net income attributable to
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
Basic net income per share: |
|
|
|
|
|
|
|
||||||||
Net income attributable to |
$ |
177.7 |
|
$ |
282.8 |
|
$ |
329.5 |
|
$ |
433.6 |
||||
Weighted average number of common shares outstanding |
|
74.6 |
|
|
75.5 |
|
|
74.6 |
|
|
75.4 |
||||
Basic net income per share attributable to |
$ |
2.38 |
|
$ |
3.74 |
|
$ |
4.41 |
|
$ |
5.75 |
||||
Diluted net income per share: |
|
|
|
|
|
|
|
||||||||
Net income attributable to |
$ |
177.7 |
|
$ |
282.8 |
|
$ |
329.5 |
|
$ |
433.6 |
||||
Weighted average number of common shares outstanding |
|
74.6 |
|
|
75.5 |
|
|
74.6 |
|
|
75.4 |
||||
Dilutive stock-settled appreciation rights, performance share awards and restricted stock units |
|
0.3 |
|
|
0.4 |
|
|
0.3 |
|
|
0.5 |
||||
Weighted average number of common shares and common share equivalents outstanding for purposes of computing diluted net income per share |
|
74.9 |
|
|
75.9 |
|
|
74.9 |
|
|
75.9 |
||||
Diluted net income per share attributable to |
$ |
2.37 |
|
$ |
3.73 |
|
$ |
4.40 |
|
$ |
5.71 |
8. SEGMENT REPORTING
The Company’s four reportable segments distribute a full range of agricultural equipment and related replacement parts. The Company evaluates segment performance primarily based on income from operations. Sales for each segment are based on the location of the third-party customer. The Company’s selling, general and administrative expenses and engineering expenses are generally charged to each segment based on the region and division where the expenses are incurred. As a result, the components of income from operations for one segment may not be comparable to another segment. Segment results for the three and six months ended
Three Months Ended |
|
North
|
|
South
|
|
|
|
|
|
Consolidated |
||||||||||
2022 |
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales |
|
$ |
739.9 |
|
$ |
519.2 |
|
$ |
1,467.6 |
|
$ |
218.5 |
|
$ |
2,945.2 |
|||||
Income from operations |
|
|
50.7 |
|
|
85.5 |
|
|
161.2 |
|
|
30.7 |
|
|
328.1 |
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
2021 |
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales |
|
$ |
734.7 |
|
$ |
278.3 |
|
$ |
1,635.2 |
|
$ |
231.1 |
|
$ |
2,879.3 |
|||||
Income from operations |
|
|
103.7 |
|
|
23.1 |
|
|
201.5 |
|
|
26.6 |
|
|
354.9 |
Six Months Ended |
|
North
|
|
South
|
|
|
|
|
|
Consolidated |
||||||||||
2022 |
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales |
|
$ |
1,440.9 |
|
$ |
875.6 |
|
$ |
2,870.7 |
|
$ |
443.7 |
|
$ |
5,630.9 |
|||||
Income from operations |
|
|
105.5 |
|
|
131.6 |
|
|
323.5 |
|
|
64.7 |
|
|
625.3 |
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
2021 |
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales |
|
$ |
1,345.8 |
|
$ |
518.8 |
|
$ |
2,962.4 |
|
$ |
431.0 |
|
$ |
5,258.0 |
|||||
Income from operations |
|
|
178.6 |
|
|
39.3 |
|
|
345.8 |
|
|
47.6 |
|
|
611.3 |
A reconciliation from the segment information to the consolidated balances for income from operations is set forth below (in millions):
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
Segment income from operations |
$ |
328.1 |
|
|
$ |
354.9 |
|
|
$ |
625.3 |
|
|
$ |
611.3 |
|
Impairment charges |
|
— |
|
|
|
— |
|
|
|
(36.0 |
) |
|
|
— |
|
Corporate expenses |
|
(38.5 |
) |
|
|
(37.5 |
) |
|
|
(70.7 |
) |
|
|
(73.4 |
) |
Amortization of intangibles |
|
(15.4 |
) |
|
|
(14.2 |
) |
|
|
(30.7 |
) |
|
|
(31.7 |
) |
Stock compensation expense |
|
(10.3 |
) |
|
|
(8.2 |
) |
|
|
(17.0 |
) |
|
|
(14.7 |
) |
Restructuring expenses |
|
(0.4 |
) |
|
|
(4.7 |
) |
|
|
(3.4 |
) |
|
|
(6.0 |
) |
Consolidated income from operations |
$ |
263.5 |
|
|
$ |
290.3 |
|
|
$ |
467.5 |
|
|
$ |
485.5 |
|
RECONCILIATION OF NON-GAAP MEASURES
This earnings release discloses adjusted income from operations, adjusted net income, adjusted net income per share, and net sales on a constant currency basis, each of which exclude amounts that are typically included in the most directly comparable measure calculated in accordance with
The following is a reconciliation of reported income from operations, net income and net income per share to adjusted income from operations, adjusted net income and adjusted net income per share for the three and six months ended
|
Three Months Ended |
||||||||||||||||||||||
|
2022 |
|
2021 |
||||||||||||||||||||
|
Income From
|
|
Net
|
|
Net Income
|
|
Income From
|
|
Net
|
|
Net Income
|
||||||||||||
As reported |
$ |
263.5 |
|
$ |
177.7 |
|
$ |
2.37 |
|
$ |
290.3 |
|
$ |
282.8 |
|
|
$ |
3.73 |
|
||||
Restructuring expenses(3) |
|
0.4 |
|
|
0.4 |
|
|
0.01 |
|
|
4.7 |
|
|
3.9 |
|
|
|
0.05 |
|
||||
Deferred income tax adjustment(4) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(67.8 |
) |
|
|
(0.89 |
) |
||||
As adjusted |
$ |
264.0 |
|
$ |
178.1 |
|
$ |
2.38 |
|
$ |
295.0 |
|
$ |
218.9 |
|
|
$ |
2.88 |
|
(1) |
Net income and net income per share amounts are after tax. |
(2) |
Rounding may impact summation of amounts. |
(3) |
The restructuring expenses recorded during the three months ended |
(4) |
During the three months ended |
|
Six Months Ended |
||||||||||||||||||||||
|
2022 |
|
2021 |
||||||||||||||||||||
|
Income From
|
|
Net
|
|
Net Income
|
|
Income From
|
|
Net
|
|
Net Income
|
||||||||||||
As reported |
$ |
467.5 |
|
$ |
329.5 |
|
|
$ |
4.40 |
|
|
$ |
485.5 |
|
$ |
433.6 |
|
|
$ |
5.71 |
|
||
Impairment of Russian joint ventures(3) |
|
36.0 |
|
|
23.8 |
|
|
|
0.32 |
|
|
|
— |
|
|
— |
|
|
|
— |
|
||
Restructuring expenses(4) |
|
3.4 |
|
|
2.5 |
|
|
|
0.03 |
|
|
|
6.0 |
|
|
5.2 |
|
|
|
0.07 |
|
||
Gain on full acquisition of IAS joint venture(5) |
|
— |
|
|
(3.4 |
) |
|
|
(0.05 |
) |
|
|
— |
|
|
— |
|
|
|
— |
|
||
Write-down of investment in Russian finance joint venture(6) |
|
— |
|
|
4.8 |
|
|
|
0.06 |
|
|
|
— |
|
|
— |
|
|
|
— |
|
||
Deferred income tax adjustment(7) |
|
— |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
(67.8 |
) |
|
|
(0.89 |
) |
||
As adjusted |
$ |
507.0 |
|
$ |
357.1 |
|
|
$ |
4.77 |
|
|
$ |
491.5 |
|
$ |
371.0 |
|
|
$ |
4.89 |
|
(1) |
Net income and net income per share amounts are after tax. |
(2) |
Rounding may impact summation of amounts. |
(3) |
During the six months ended |
(4) |
The restructuring expenses recorded during the six months ended |
(5) |
During the six months ended |
(6) |
During the six months ended |
(7) |
During the six months ended |
The following is a reconciliation of targeted net income per share to adjusted targeted net income per share for the six months ended
|
|
Net Income Per Share(1) |
|
As targeted |
|
|
|
Impairment of Russian joint ventures |
|
0.32 |
|
Restructuring expenses |
|
0.03 |
|
Gain on full acquisition of IAS joint venture |
|
(0.05 |
) |
Write-down of investment in Russian finance joint venture |
|
0.06 |
|
As adjusted targeted(2) |
|
|
|
(1) |
Net income per share amount is after tax. |
(2) |
The above reconciliation adjustments to full year 2022 targeted net income per share are based upon restructuring expenses and the other adjustments incurred during the six months ended |
The following table sets forth, for the three and six months ended
|
Three Months Ended |
|
Change due to currency translation |
||||||||||||||
|
2022 |
|
2021 |
|
% change
|
|
$ |
|
% |
||||||||
|
$ |
739.9 |
|
$ |
734.7 |
|
0.7 |
% |
|
$ |
(5.3 |
) |
|
(0.7 |
)% |
||
|
|
519.2 |
|
|
278.3 |
|
86.6 |
% |
|
|
26.0 |
|
|
9.3 |
% |
||
|
|
1,467.6 |
|
|
1,635.2 |
|
(10.3 |
)% |
|
|
(220.7 |
) |
|
(13.5 |
)% |
||
|
|
218.5 |
|
|
231.1 |
|
(5.5 |
)% |
|
|
(16.5 |
) |
|
(7.1 |
)% |
||
|
$ |
2,945.2 |
|
$ |
2,879.3 |
|
2.3 |
% |
|
$ |
(216.5 |
) |
|
(7.5 |
)% |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Six Months Ended |
|
Change due to currency translation |
||||||||||||||
|
2022 |
|
2021 |
|
% change
|
|
$ |
|
% |
||||||||
|
$ |
1,440.9 |
|
$ |
1,345.8 |
|
7.1 |
% |
|
$ |
(6.9 |
) |
|
(0.5 |
)% |
||
|
|
875.6 |
|
|
518.8 |
|
68.8 |
% |
|
|
41.4 |
|
|
8.0 |
% |
||
|
|
2,870.7 |
|
|
2,962.4 |
|
(3.1 |
)% |
|
|
(344.5 |
) |
|
(11.6 |
)% |
||
|
|
443.7 |
|
|
431.0 |
|
2.9 |
% |
|
|
(26.0 |
) |
|
(6.0 |
)% |
||
|
$ |
5,630.9 |
|
$ |
5,258.0 |
|
7.1 |
% |
|
$ |
(336.0 |
) |
|
(6.4 |
)% |
View source version on businesswire.com: https://www.businesswire.com/news/home/20220727006108/en/
Vice President, Investor Relations
770-232-8229
greg.peterson@agcocorp.com
Source: AGCO
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