ITT Reports 2023 First Quarter Earnings Per Share (EPS) of $1.20, Adjusted EPS Of $1.17
-
10% revenue growth driven by higher volume and pricing actions -
7% orders growth driven by Industrial Process (IP) short-cycle and pump projects, and Connect & Control Technologies (CCT) aerospace demand -
270 basis points segment operating margin expansion (150 basis points adjusted) to
17.3% (17.5% adjusted) -
36% EPS growth (21% adjusted) driven by pricing actions, volume leverage and productivity - Acquisition of Micro-Mode Products, leading provider of specialty harsh application connectors
First quarter segment operating income of
EPS for the first quarter of
Operating cash flow for the first quarter increased
Table 1. First Quarter Performance
|
Q1 2023 |
|
Q1 2022 |
|
Change |
|||||
Revenue |
$ |
797.9 |
|
|
$ |
726.2 |
|
|
9.9 |
% |
Organic Growth |
|
|
|
|
10.3 |
% |
||||
Segment Operating Income |
$ |
138.1 |
|
|
$ |
105.8 |
|
|
30.5 |
% |
Segment Operating Margin |
|
17.3 |
% |
|
|
14.6 |
% |
|
270 |
bps |
Adjusted Segment Operating Income |
$ |
140.0 |
|
|
$ |
116.4 |
|
|
20.3 |
% |
Adjusted Segment Operating Margin |
|
17.5 |
% |
|
|
16.0 |
% |
|
150 |
bps |
Earnings Per Share |
$ |
1.20 |
|
|
$ |
0.88 |
|
|
36.4 |
% |
Adjusted Earnings Per Share |
$ |
1.17 |
|
|
$ |
0.97 |
|
|
20.6 |
% |
Operating Cash Flow |
$ |
58.1 |
|
|
$ |
(2.7 |
) |
|
NM |
|
Free Cash Flow |
$ |
29.4 |
|
|
$ |
(32.7 |
) |
|
NM |
|
Note: all results unaudited; dollars in millions except for per share amounts |
||||||||||
NM = not meaningful |
Management Commentary
“ITT delivered solid first quarter results to start 2023. We continue to gain market share in Friction, with 41 electric vehicle awards across global OEM platforms, and we secured a ten-year aftermarket agreement with Continental that positions ITT for long-term growth. Our pumps and flow business secured significant project awards linked to decarbonization and sustainability, and we are seeing strong demand in the aerospace and defense markets in CCT. Our performance and continued share gains drove strong orders and sales growth this quarter, and with the recent acquisition of specialty connectors manufacturer Micro-Mode Products, we’re positioned to capitalize on several growing end markets,” said ITT’s Chief Executive Officer and President Luca Savi.
“On the operational front, we continue to make good progress. IP expanded margins over 800 basis points to approximately 21 percent as investments in lean manufacturing mature. Across ITT, we are strengthening pricing actions to combat inflation while remaining vigilant on productivity. Our actions drove a more than 20 percent increase in adjusted EPS in Q1,” said Savi. “As a result of our strong Q1 performance, we are raising the mid-point of our adjusted EPS guidance range by
Table 2. First Quarter Segment Results
|
|
Revenue |
|
Operating Income |
|
||||||||||||||||
|
|
Q1 2023 |
Reported Increase/ (Decrease) |
Organic Growth |
|
Q1 2023 |
Reported Increase/ (Decrease) |
Adjusted Increase (Decrease) |
|
||||||||||||
|
Motion Technologies |
$ |
364.8 |
|
(1.4 |
) % |
|
2.2 |
% |
|
|
$ |
53.4 |
|
(10.6 |
) % |
|
(16.7 |
) % |
|
|
|
Industrial Process |
|
266.5 |
|
31.8 |
% |
|
25.5 |
% |
|
|
|
55.3 |
|
171.1 |
% |
|
119.8 |
% |
|
|
|
Connect & Control Technologies |
|
167.6 |
|
8.4 |
% |
|
9.8 |
% |
|
|
|
29.4 |
|
14.4 |
% |
|
13.6 |
% |
|
|
|
Total Segment Results |
|
797.9 |
|
9.9 |
% |
|
10.3 |
% |
|
|
|
138.1 |
|
30.5 |
% |
|
20.3 |
% |
|
|
Note: all results unaudited; excludes intercompany eliminations of |
Motion Technologies revenue decreased due to significant unfavorable foreign currency translation of
Industrial Process revenue increased, driven by short-cycle demand and growth in pump projects, and the addition of Habonim. This was partially offset by unfavorable foreign currency translation of
Connect & Control Technologies revenue increased, driven by growth in the aerospace and defense markets. This was partially offset by an unfavorable foreign currency translation of
2023 Guidance
The company is updating its 2023 guidance. We now expect EPS of
It is not possible, without unreasonable efforts, to estimate the impacts of foreign currency fluctuations, acquisitions and certain other special items that may occur in 2023 as these items are inherently uncertain and difficult to predict. As a result, we are unable to quantify certain amounts that would be included in a reconciliation of organic revenue growth and adjusted segment operating margin to the most directly comparable GAAP financial measures without unreasonable efforts and we have not provided reconciliations for these forward-looking non-GAAP financial measures.
Investor Conference Call Details
ITT’s management will host a conference call for investors on Thursday, May 4 at 8:30 a.m. Eastern Time. The briefing can be accessed live via a webcast, which is available on the company’s website: https://investors.itt.com. A replay of the webcast will be available for 90 days following the presentation. A replay will also be available telephonically from two hours after the webcast until Thursday, May 18, 2023 at midnight Eastern Time. Reconciliations of non-GAAP financial performance metrics to their most comparable
Safe Harbor Statement
This release contains “forward-looking statements” intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. In addition, the conference call (including the financial results presentation material) may include, and officers and representatives of ITT may from time to time make and discuss, projections, goals, assumptions, and statements that may constitute “forward-looking statements”. These forward-looking statements are not historical facts, but rather represent only a belief regarding future events based on current expectations, estimates, assumptions and projections about our business, future financial results and the industry in which we operate, and other legal, regulatory, and economic developments. These forward-looking statements include, but are not limited to, future strategic plans and other statements that describe the company’s business strategy, outlook, objectives, plans, intentions or goals, and any discussion of future events and future operating or financial performance.
We use words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “target,” “future,” “may,” “will,” “could,” “should,” “potential,” “continue,” “guidance” and other similar expressions to identify such forward-looking statements. Forward-looking statements are uncertain and, by their nature, many are inherently unpredictable and outside of ITT’s control, and involve known and unknown risks, uncertainties and other important factors that could cause actual results to differ materially from those expressed or implied in, or reasonably inferred from, such forward-looking statements.
Where in any forward-looking statement we express an expectation or belief as to future results or events, such expectation or belief is based on current plans and expectations of our management, expressed in good faith and believed to have a reasonable basis. However, we cannot provide any assurance that the expectation or belief will occur or that anticipated results will be achieved or accomplished.
Among the factors that could cause our results to differ materially from those indicated by forward-looking statements are risks and uncertainties inherent in our business including, without limitation:
- volatility in raw material prices and our suppliers’ ability to meet quality and delivery requirements;
-
uncertain global economic and capital markets conditions, which have been influenced by the COVID-19 pandemic, the
Russia -Ukraine war, inflation, uncertainty regarding theU.S. federal government’s debt limit, changes in monetary policies, the threat of a possible global economic recession, trade disputes between theU.S. and its trading partners, political and social unrest, instability in the global banking system and the availability and fluctuations in prices of energy and commodities, including steel, oil, copper and tin; - impacts on our business stemming from the COVID-19 pandemic, including from government-mandated site closures, employee illness and absenteeism, and continued supply chain disruptions and raw material shortages, which have resulted in increased costs and reduced availability of key commodities and other necessary services;
- our inability to hire or retain key personnel;
- fluctuations in foreign currency exchange rates and the impact of such fluctuations on our revenues, customer demand for our products and on our hedging arrangements;
- failure to manage the distribution of products and services effectively;
- fluctuations in interest rates and the impact of such fluctuations on customer behavior and on our cost of debt;
- failure to compete successfully and innovate in our markets;
- failure to protect our intellectual property rights or violations of the intellectual property rights of others;
- the extent to which there are quality problems with respect to manufacturing processes or finished goods;
- the risk of cybersecurity breaches or failure of any information systems used by the Company, including any flaws in the implementation of any enterprise resource planning systems;
- loss of or decrease in sales from our most significant customers;
-
risks due to our operations and sales outside the
U.S. and in emerging markets, including the imposition of tariffs and trade sanctions; - fluctuations in demand or customers’ levels of capital investment and maintenance expenditures, especially in the energy, chemical and mining markets;
-
the impacts on our business from Russia’s war with
Ukraine , and the global response to it; - the risk of material business interruptions, particularly at our manufacturing facilities;
- risk of liabilities from past divestitures and spin-offs;
- failure of portfolio management strategies, including cost-saving initiatives, to meet expectations;
-
risks related to government contracting, including changes in levels of government spending and regulatory and contractual requirements applicable to sales to the
U.S. government; -
fluctuations in our effective tax rate, including as a result of the passage of the Inflation Reduction Act of 2022 and other possible tax reform legislation in the
U.S. and other jurisdictions; - changes in environmental laws or regulations, discovery of previously unknown or more extensive contamination, or the failure of a potentially responsible party to perform;
-
failure to comply with the
U.S. Foreign Corrupt Practices Act (or other applicable anti-corruption legislation), export controls and trade sanctions; - risk of product liability claims and litigation; and
- changes in laws relating to the use and transfer of personal and other information.
The forward-looking statements included in this release speak only as of the date hereof. We undertake no obligation (and expressly disclaim any obligation) to update any forward-looking statements, whether written or oral or as a result of new information, future events or otherwise.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED) | |||||||
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS) | |||||||
For the Three Months Ended | April 1, 2023 | April 2, 2022 | |||||
Revenue | $ |
797.9 |
$ |
726.2 |
|||
Cost of revenue |
|
536.0 |
|
|
507.8 |
|
|
Gross profit |
|
261.9 |
|
|
218.4 |
|
|
General and administrative expenses |
|
68.3 |
|
|
60.4 |
|
|
Sales and marketing expenses |
|
42.9 |
|
|
38.4 |
|
|
Research and development expenses |
|
26.4 |
|
|
25.0 |
|
|
Operating income |
|
124.3 |
|
|
94.6 |
|
|
Interest and non-operating expense (income), net |
|
3.5 |
|
|
(0.2 |
) |
|
Income before income tax expense |
|
120.8 |
|
|
94.8 |
|
|
Income tax expense |
|
20.1 |
|
|
19.5 |
|
|
Net income |
|
100.7 |
|
|
75.3 |
|
|
Less: Income attributable to noncontrolling interests |
|
0.7 |
|
|
0.5 |
|
|
Net income attributable to ITT Inc. | $ |
100.0 |
|
$ |
74.8 |
|
|
|
|
||||||
Earnings per share attributable to ITT Inc.: |
|
|
|||||
Basic | $ |
1.21 |
|
$ |
0.88 |
|
|
Diluted | $ |
1.20 |
|
$ |
0.88 |
|
|
|
|
||||||
Weighted average common shares – basic |
|
82.6 |
|
|
84.8 |
|
|
Weighted average common shares – diluted |
|
83.0 |
|
|
85.2 |
|
CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED) | |||||||
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS) | |||||||
As of the Period Ended | April 1, 2023 |
December 31, 2022 |
|||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 462.0 |
|
$ | 561.2 |
|
|
Receivables, net | 669.9 |
|
628.8 |
|
|||
Inventories | 567.6 |
|
533.9 |
|
|||
Other current assets | 98.8 |
|
112.9 |
|
|||
Total current assets | 1,798.3 |
|
1,836.8 |
|
|||
Non-current assets: | |||||||
Plant, property and equipment, net | 528.0 |
|
526.8 |
|
|||
Goodwill | 968.1 |
|
964.8 |
|
|||
Other intangible assets, net | 107.5 |
|
112.8 |
|
|||
Other non-current assets | 365.9 |
|
339.1 |
|
|||
Total non-current assets | 1,969.5 |
|
1,943.5 |
|
|||
Total assets | $ | 3,767.8 |
|
$ | 3,780.3 |
|
|
Liabilities and Shareholders’ Equity | |||||||
Current liabilities: | |||||||
Commercial paper and current maturities of long-term debt | $ | 384.1 |
|
$ | 451.0 |
|
|
Accounts payable | 397.3 |
|
401.1 |
|
|||
Accrued and other current liabilities | 340.0 |
|
333.4 |
|
|||
Total current liabilities | 1,121.4 |
|
1,185.5 |
|
|||
Non-current liabilities: | |||||||
Postretirement benefits | 137.6 |
|
137.2 |
|
|||
Other non-current liabilities | 199.6 |
|
200.2 |
|
|||
Total non-current liabilities | 337.2 |
|
337.4 |
|
|||
Total liabilities | 1,458.6 |
|
1,522.9 |
|
|||
Shareholders’ equity: | |||||||
Common stock: | |||||||
Authorized – 250.0 shares, |
|||||||
Issued and outstanding – 82.4 shares and 82.7 shares, respectively | 82.4 |
|
82.7 |
|
|||
Retained earnings | 2,554.7 |
|
2,509.7 |
|
|||
Total accumulated other comprehensive loss | (337.9 |
) |
(344.3 |
) |
|||
Total ITT Inc. shareholders’ equity | 2,299.2 |
|
2,248.1 |
|
|||
Noncontrolling interests | 10.0 |
|
9.3 |
|
|||
Total shareholders’ equity | 2,309.2 |
|
2,257.4 |
|
|||
Total liabilities and shareholders’ equity | $ | 3,767.8 |
|
$ | 3,780.3 |
|
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) | |||||||
(IN MILLIONS) | |||||||
For the Three Months Ended | April 1, 2023 | April 2, 2022 | |||||
Operating Activities | |||||||
Income from continuing operations attributable to ITT Inc. | $ | 100.0 |
|
$ | 74.8 |
|
|
Adjustments to income from continuing operations: | |||||||
Depreciation and amortization | 26.7 |
|
27.3 |
|
|||
Equity-based compensation | 4.7 |
|
3.7 |
|
|||
Other non-cash charges, net | 7.5 |
|
10.2 |
|
|||
Changes in assets and liabilities: | |||||||
Change in receivables | (34.7 |
) |
(70.7 |
) |
|||
Change in inventories | (29.1 |
) |
(48.4 |
) |
|||
Change in contract assets | (2.0 |
) |
(1.7 |
) |
|||
Change in contract liabilities | 2.9 |
|
11.8 |
|
|||
Change in accounts payable | 1.8 |
|
48.6 |
|
|||
Change in accrued expenses | (10.8 |
) |
(42.5 |
) |
|||
Change in income taxes | 3.7 |
|
10.1 |
|
|||
Other, net | (12.6 |
) |
(25.9 |
) |
|||
Net Cash – Operating Activities | 58.1 |
|
(2.7 |
) |
|||
Investing Activities | |||||||
Capital expenditures | (28.7 |
) |
(30.0 |
) |
|||
Other, net | 0.2 |
|
0.6 |
|
|||
Net Cash – Investing Activities | (28.5 |
) |
(29.4 |
) |
|||
Financing Activities | |||||||
Commercial paper, net borrowings | (72.8 |
) |
290.7 |
|
|||
Share repurchases under repurchase plan | (30.0 |
) |
(163.9 |
) |
|||
Payments for taxes related to net share settlement of stock incentive plans | (6.3 |
) |
(8.4 |
) |
|||
Dividends paid | (24.2 |
) |
(22.4 |
) |
|||
Other, net | 0.4 |
|
0.6 |
|
|||
Net Cash – Financing Activities | (132.9 |
) |
96.6 |
|
|||
Exchange rate effects on cash and cash equivalents | 4.3 |
|
(1.5 |
) |
|||
Net cash – operating activities of discontinued operations | (0.1 |
) |
(0.1 |
) |
|||
Net change in cash and cash equivalents | (99.1 |
) |
62.9 |
|
|||
Cash and cash equivalents – beginning of year (includes restricted cash of |
561.9 |
|
648.3 |
|
|||
Cash and Cash Equivalents – end of year (includes restricted cash of |
$ | 462.8 |
|
$ | 711.2 |
|
|
Supplemental Disclosures of Cash Flow Information | |||||||
Cash paid during the year for: | |||||||
Interest | $ | 4.2 |
|
$ | 0.5 |
|
|
Income taxes, net of refunds received | $ | 13.2 |
|
$ | 8.5 |
|
Key Performance Indicators and Non-GAAP Measures
Management reviews a variety of key performance indicators including revenue, segment operating income and margins, earnings per share, order growth, and backlog, some of which are calculated on a non-GAAP basis. In addition, we consider certain measures to be useful to management and investors when evaluating our operating performance for the periods presented. These measures provide a tool for evaluating our ongoing operations and management of assets from period to period. This information can assist investors in assessing our financial performance and measures our ability to generate capital for deployment among competing strategic alternatives and initiatives, including, but not limited to, acquisitions, dividends, and share repurchases. Some of these metrics, however, are not measures of financial performance under accounting principles generally accepted in
Organic Revenues and Organic Orders are defined, respectively, as revenue and orders, excluding the impacts of foreign currency fluctuations and acquisitions. The period-over-period change resulting from foreign currency fluctuations is estimated using a fixed exchange rate for both the current and prior periods. We believe that reporting organic revenue and organic orders provides useful information to investors by helping identify underlying trends in our business and facilitating comparisons of our revenue performance with prior and future periods and to our peers.
Adjusted Operating Income and Adjusted Segment Operating Income are defined, respectively, as total operating income and segment operating income, adjusted to exclude special items that include, but are not limited to, restructuring, certain asset impairment charges, certain acquisition-related impacts, and unusual or infrequent operating items. Special items represent charges or credits that impact current results, which management views as unrelated to the Company's ongoing operations and performance. Adjusted Operating Margin and Adjusted Segment Operating Margin are defined as adjusted operating income or adjusted segment operating income, respectively, divided by revenue. We believe these financial measures are useful to investors and other users of our financial statements in evaluating ongoing operating profitability, as well as in evaluating operating performance in relation to our competitors.
Adjusted Income from Continuing Operations is defined as income from continuing operations attributable to ITT Inc. adjusted to exclude special items that include, but are not limited to, restructuring, certain asset impairment charges, certain acquisition-related impacts, income tax settlements or adjustments, and unusual or infrequent items. Special items represent charges or credits, on an after-tax basis, that impact current results, which management views as unrelated to the Company’s ongoing operations and performance. The after-tax basis of each special item is determined using the jurisdictional tax rate of where the expense or benefit occurred. Adjusted income from continuing operations per diluted share (adjusted EPS) is defined as adjusted income from continuing operations divided by diluted weighted average common shares outstanding. We believe that adjusted income from continuing operations and adjusted EPS are useful to investors and other users of our financial statements in evaluating ongoing operating profitability, as well as in evaluating operating performance in relation to our competitors.
Free Cash Flow is defined as net cash provided by operating activities less capital expenditures. Free Cash Flow Margin is defined as free cash flow divided by revenue. We believe that free cash flow and free cash flow margin provides useful information to investors as it provides insight into a primary cash flow metric used by management to monitor and evaluate cash flows generated by our operations.
ITT Inc. Non-GAAP Reconciliation | |||||||||||||||||||||||||||||||||
Reported vs. Organic Revenue / Orders | |||||||||||||||||||||||||||||||||
First Quarter 2023 & 2022 | |||||||||||||||||||||||||||||||||
(In Millions) | |||||||||||||||||||||||||||||||||
(all amounts unaudited) | |||||||||||||||||||||||||||||||||
(As Reported - GAAP) | (As Adjusted - Organic) | ||||||||||||||||||||||||||||||||
(A) |
|
(B) |
|
(C) |
|
|
|
(D) |
|
(E) |
|
(F) = A-D-E |
|
(G) =C-D-E |
|
(H) = G / B |
|||||||||||||||||
|
|
|
|
$ Change |
|
% Change |
|
|
|
|
|
Revenue / |
|
$ Change |
|
% Change |
|||||||||||||||||
|
|
|
|
2023 vs. |
|
2023 vs. |
|
Acquisitions |
|
FX Impact |
|
Orders |
|
Adj. 2023 |
|
Adj. 2023 |
|||||||||||||||||
Q1 2023 |
|
Q1 2022 |
|
2022 |
|
2022 |
|
Q1 2023 |
|
Q1 2023 |
|
Q1 2023 |
|
vs. 2022 |
|
vs. 2022 |
|||||||||||||||||
Revenue | |||||||||||||||||||||||||||||||||
ITT Inc. | $ |
797.9 |
$ |
726.2 |
$ |
71.7 |
|
9.9 |
% |
$ |
15.0 |
$ |
(17.9 |
) |
$ |
800.8 |
$ |
74.6 |
|
10.3 |
% |
||||||||||||
Motion Technologies |
|
364.8 |
|
|
370.1 |
|
|
(5.3 |
) |
(1.4 |
%) |
|
- |
|
|
(13.6 |
) |
|
378.4 |
|
|
8.3 |
|
2.2 |
% |
||||||||
Industrial Process |
|
266.5 |
|
|
202.2 |
|
|
64.3 |
|
31.8 |
% |
|
15.0 |
|
|
(2.2 |
) |
|
253.7 |
|
|
51.5 |
|
25.5 |
% |
||||||||
Connect & Control Technologies |
|
167.6 |
|
|
154.6 |
|
|
13.0 |
|
8.4 |
% |
|
- |
|
|
(2.1 |
) |
|
169.7 |
|
|
15.1 |
|
9.8 |
% |
||||||||
Orders | |||||||||||||||||||||||||||||||||
ITT Inc. | $ |
866.8 |
|
$ |
812.1 |
|
$ |
54.7 |
|
6.7 |
% |
$ |
13.8 |
|
$ |
(19.5 |
) |
$ |
872.5 |
|
$ |
60.4 |
|
7.4 |
% |
||||||||
Motion Technologies |
|
371.2 |
|
|
369.2 |
|
|
2.0 |
|
0.5 |
% |
|
- |
|
|
(13.4 |
) |
|
384.6 |
|
|
15.4 |
|
4.2 |
% |
||||||||
Industrial Process |
|
327.3 |
|
|
260.1 |
|
|
67.2 |
|
25.8 |
% |
|
13.8 |
|
|
(3.5 |
) |
|
317.0 |
|
|
56.9 |
|
21.9 |
% |
||||||||
Connect & Control Technologies |
|
169.3 |
|
|
183.8 |
|
|
(14.5 |
) |
(7.9 |
%) |
|
- |
|
|
(2.6 |
) |
|
171.9 |
|
|
(11.9 |
) |
(6.5 |
%) |
||||||||
Note: Excludes intercompany eliminations | |||||||||||||||||||||||||||||||||
Immaterial differences due to rounding |
ITT Inc. Non-GAAP Reconciliation | ||||||||||||||||||||||||||||||
Reported vs Adjusted Segment Operating Income & Segment Operating Margin | ||||||||||||||||||||||||||||||
First Quarter 2023 & 2022 | ||||||||||||||||||||||||||||||
(In Millions) | ||||||||||||||||||||||||||||||
(all amounts unaudited) | ||||||||||||||||||||||||||||||
Q1 2023 | Q1 2023 | Q1 2023 | Q1 2022 | Q1 2022 | Q1 2022 | % Change | % Change | |||||||||||||||||||||||
As Reported |
|
Special Items |
|
As Adjusted |
|
As Reported |
|
Special Items |
|
As Adjusted |
|
As Reported 2023 vs. 2022 |
|
As Adjusted 2023 vs. 2022 |
||||||||||||||||
Revenue: | ||||||||||||||||||||||||||||||
Motion Technologies | $ |
364.8 |
|
$ |
364.8 |
|
$ |
370.1 |
|
$ |
370.1 |
|
(1.4 |
%) |
(1.4 |
%) |
||||||||||||||
Industrial Process |
|
266.5 |
|
|
266.5 |
|
|
202.2 |
|
|
202.2 |
|
31.8 |
% |
31.8 |
% |
||||||||||||||
Connect & Control Technologies |
|
167.6 |
|
|
167.6 |
|
|
154.6 |
|
|
154.6 |
|
8.4 |
% |
8.4 |
% |
||||||||||||||
Intersegment eliminations |
|
(1.0 |
) |
|
(1.0 |
) |
|
(0.7 |
) |
|
(0.7 |
) |
||||||||||||||||||
Total Revenue | $ |
797.9 |
|
$ |
797.9 |
|
$ |
726.2 |
|
$ |
726.2 |
|
9.9 |
% |
9.9 |
% |
||||||||||||||
Operating Margin: | ||||||||||||||||||||||||||||||
Motion Technologies |
|
14.6 |
% |
|
20 |
|
BP |
|
14.8 |
% |
|
16.1 |
% |
|
140 |
BP |
|
17.5 |
% |
(150 |
) |
BP | (270 |
) |
BP | |||||
Industrial Process |
|
20.8 |
% |
|
50 |
|
BP |
|
21.3 |
% |
|
10.1 |
% |
|
270 |
|
BP |
|
12.8 |
% |
1,070 |
|
BP | 850 |
|
BP | ||||
Connect & Control Technologies |
|
17.5 |
% |
|
- |
|
BP |
|
17.5 |
% |
|
16.6 |
% |
|
10 |
|
BP |
|
16.7 |
% |
90 |
|
BP | 80 |
|
BP | ||||
Total Operating Segments |
|
17.3 |
% |
|
20 |
|
BP |
|
17.5 |
% |
|
14.6 |
% |
|
140 |
|
BP |
|
16.0 |
% |
270 |
|
BP | 150 |
|
BP | ||||
Operating Income: | ||||||||||||||||||||||||||||||
Motion Technologies | $ |
53.4 |
|
$ |
0.6 |
|
$ |
54.0 |
|
$ |
59.7 |
|
$ |
5.1 |
|
$ |
64.8 |
|
(10.6 |
%) |
(16.7 |
%) |
||||||||
Industrial Process |
|
55.3 |
|
|
1.4 |
|
|
56.7 |
|
|
20.4 |
|
|
5.4 |
|
|
25.8 |
|
171.1 |
% |
119.8 |
% |
||||||||
Connect & Control Technologies |
|
29.4 |
|
|
(0.1 |
) |
|
29.3 |
|
|
25.7 |
|
|
0.1 |
|
|
25.8 |
|
14.4 |
% |
13.6 |
% |
||||||||
Total Segment Operating Income | $ |
138.1 |
|
$ |
1.9 |
|
$ |
140.0 |
|
$ |
105.8 |
|
$ |
10.6 |
|
$ |
116.4 |
|
30.5 |
% |
20.3 |
% |
||||||||
Note: Immaterial differences due to rounding. | ||||||||||||||||||||||||||||||
Special items include, but are not limited to, restructuring costs, acquisition-related expenses, and other unusual or infrequent items. |
ITT Inc. Non-GAAP Reconciliation | ||||||||||||||||||||||||||||||
Reported vs. Adjusted Income from Continuing Operations & Adjusted EPS | ||||||||||||||||||||||||||||||
First Quarter 2023 & 2022 | ||||||||||||||||||||||||||||||
(In Millions, except per share amounts) | ||||||||||||||||||||||||||||||
(all amounts unaudited) | ||||||||||||||||||||||||||||||
Q1 2023 | Q1 2023 | Q1 2022 | Q1 2022 | $ Change | % Change | |||||||||||||||||||||||||
As Reported |
|
Non-GAAP Adjustments |
|
As Adjusted |
|
As Reported |
|
Non-GAAP Adjustments |
|
As Adjusted |
|
As Adjusted 2023 vs. 2022 |
|
As Adjusted 2023 vs. 2022 |
||||||||||||||||
Segment operating income | $ |
138.1 |
|
$ |
1.9 |
|
#A |
$ |
140.0 |
|
$ |
105.8 |
|
$ |
10.6 |
|
#A |
$ |
116.4 |
|
||||||||||
Corporate and other costs |
|
(13.8 |
) |
|
- |
|
|
(13.8 |
) |
|
(11.2 |
) |
|
0.9 |
|
#B |
|
(10.3 |
) |
|||||||||||
Operating income |
|
124.3 |
|
|
1.9 |
|
|
126.2 |
|
|
94.6 |
|
|
11.5 |
|
|
106.1 |
|
|
20.1 |
18.9 |
% |
||||||||
Operating margin |
|
15.6 |
% |
|
15.8 |
% |
|
13.0 |
% |
|
14.6 |
% |
||||||||||||||||||
Interest income (expense), net |
|
(4.1 |
) |
|
1.4 |
|
#C |
|
(2.7 |
) |
|
- |
|
|
- |
|
|
- |
|
|||||||||||
Other income (expense), net |
|
0.6 |
|
|
- |
|
|
0.6 |
|
|
0.2 |
|
|
- |
|
|
0.2 |
|
||||||||||||
Income from continuing operations before tax |
|
120.8 |
|
|
3.3 |
|
|
124.1 |
|
|
94.8 |
|
|
11.5 |
|
|
106.3 |
|
||||||||||||
Income tax expense |
|
(20.1 |
) |
|
(6.0 |
) |
#D |
|
(26.1 |
) |
|
(19.5 |
) |
|
(3.4 |
) |
#D |
|
(22.9 |
) |
||||||||||
Income from continuing operations |
|
100.7 |
|
|
(2.7 |
) |
|
98.0 |
|
|
75.3 |
|
|
8.1 |
|
|
83.4 |
|
||||||||||||
Less: Income attributable to noncontrolling interests |
|
0.7 |
|
|
- |
|
|
0.7 |
|
|
0.5 |
|
|
- |
|
|
0.5 |
|
||||||||||||
Income from continuing operations - ITT Inc. | $ |
100.0 |
|
$ |
(2.7 |
) |
$ |
97.3 |
|
$ |
74.8 |
|
$ |
8.1 |
|
$ |
82.9 |
|
||||||||||||
EPS from continuing operations | $ |
1.20 |
|
$ |
(0.03 |
) |
$ |
1.17 |
|
$ |
0.88 |
|
$ |
0.09 |
|
$ |
0.97 |
|
$ |
0.20 |
|
20.6 |
% |
|||||||
Note: Amounts may not calculate due to rounding. | ||||||||||||||||||||||||||||||
Total Operating Margin is defined as reported operating income or adjusted operating income divided by total revenue. | ||||||||||||||||||||||||||||||
Per share amounts are based on diluted weighted average common shares outstanding. |
#A - |
2023 includes impacts related to the |
#A - |
2022 includes impacts related to the |
|
|
#B - |
2022 includes severance costs ( |
|
|
#C - |
2023 includes interest charges related to the settlement of a tax audit in |
|
|
#D - |
2023 includes the net tax expense of special items #A and #C ( |
#D - |
2022 includes the net tax benefit of special items #A and #B ( |
ITT Inc. Non-GAAP Reconciliation | ||||||||
Free Cash Flow and Free Cash Flow Margin | ||||||||
First Quarter Ended 2023 & 2022 | ||||||||
(In Millions) | ||||||||
(all amounts unaudited) | ||||||||
3M 2023 |
3M 2022 |
|||||||
Net Cash - Operating Activities | $ |
58.1 |
|
$ |
(2.7 |
) |
||
Less: Capital expenditures |
|
28.7 |
|
|
30.0 |
|
||
Free Cash Flow | $ |
29.4 |
|
$ |
(32.7 |
) |
||
Revenue | $ |
797.9 |
|
$ |
726.2 |
|
||
Free Cash Flow Margin |
|
3.7 |
% |
|
(4.5 |
%) |
ITT Inc. Non-GAAP Reconciliation | ||||||||
GAAP vs. Adjusted EPS Guidance | ||||||||
Full Year 2023 | ||||||||
(Per share amounts) | ||||||||
(all amounts unaudited) | ||||||||
2023 Full-Year Guidance | ||||||||
Low | High | |||||||
EPS from Continuing Operations - GAAP | $ |
4.49 |
$ |
4.79 |
||||
Estimated restructuring, net of tax |
|
0.10 |
|
|
0.10 |
|
||
Other special items, net of tax |
|
0.04 |
|
|
0.04 |
|
||
Other tax special Items |
|
0.02 |
|
|
0.02 |
|
||
EPS from Continuing Operations - Adjusted | $ |
4.65 |
|
$ |
4.95 |
|
Note: |
The Company has provided forward-looking non-GAAP financial measures for organic revenue growth and adjusted segment operating margin. It is not possible, without unreasonable efforts, to estimate the impacts of foreign currency fluctuations, acquisitions and certain other special items that may occur in 2023 as these items are inherently uncertain and difficult to predict. As a result, the Company is unable to quantify certain amounts that would be included in a reconciliation of organic revenue growth and adjusted segment operating margin to the most directly comparable GAAP financial measures without unreasonable efforts and has not provided reconciliations for these forward looking non-GAAP financial measures. |
ITT Inc. Non-GAAP Reconciliation | ||||||||
Free Cash Flow and Free Cash Flow Margin Guidance | ||||||||
Full Year 2023 | ||||||||
(In Millions) | ||||||||
(all amounts unaudited) | ||||||||
2023 Full-Year Guidance | ||||||||
Low | High | |||||||
Net Cash - Operating Activities | $ |
470 |
|
$ |
520 |
|
||
Less: Capital expenditures |
|
120 |
|
|
120 |
|
||
Free Cash Flow | $ |
350 |
|
$ |
400 |
|
||
Revenue #A | $ |
3,225 |
|
$ |
3,225 |
|
||
Free Cash Flow margin |
|
11 |
% |
|
12 |
% |
||
#A Represents expected revenue growth of |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230504005122/en/
Investors
Mark Macaluso
+1 914-641-2064
mark.macaluso@itt.com
Media
Phil Terrigno
+1 914-641-2143
phil.terrigno@itt.com
Source: ITT Inc.