ITT Reports 2024 Third Quarter Earnings Per Share (EPS) of $1.96, Adjusted EPS of $1.46
ITT reported strong Q3 2024 results with revenue increasing 8% (6% organic) to $885.2 million. EPS grew 46% to $1.96, while adjusted EPS rose 7% to $1.46. The company saw 17% orders growth driven by pump projects, rail gains, and connectors demand. Operating margin expanded 610 basis points to 23.5%, including a $48 million gain from the Wolverine divestiture. Notable performance includes revenue growth across all segments, with Industrial Process up 19.3%, Connect & Control Technologies up 12.6%, while Motion Technologies decreased 4.1% due to the Wolverine sale. The company raised its full-year guidance, expecting revenue growth of 10-12% and adjusted EPS of $5.80-$5.86.
ITT ha riportato risultati solidi per il terzo trimestre del 2024, con un incremento del fatturato dell'8% (6% organico) a 885,2 milioni di dollari. EPS è aumentato del 46% a 1,96 dollari, mentre l'EPS rettificato è salito del 7% a 1,46 dollari. L'azienda ha registrato una crescita degli ordini del 17%, trainata da progetti di pompe, guadagni nel settore ferroviario e dalla domanda di connettori. Il margine operativo è aumentato di 610 punti base al 23,5%, includendo un guadagno di 48 milioni di dollari dalla cessione della Wolverine. Performance notevoli includono la crescita dei ricavi in tutti i segmenti, con un aumento del 19,3% per il processo industriale, del 12,6% per le tecnologie di connessione e controllo, mentre le tecnologie di movimento sono diminuite del 4,1% a causa della vendita della Wolverine. L'azienda ha alzato le sue previsioni annuali, aspettandosi una crescita dei ricavi del 10-12% e un EPS rettificato di 5,80-5,86 dollari.
ITT informó resultados sólidos para el tercer trimestre de 2024, con un aumento del 8% en los ingresos (6% orgánico) a 885,2 millones de dólares. EPS creció un 46% a 1,96 dólares, mientras que el EPS ajustado aumentó un 7% a 1,46 dólares. La compañía vio un crecimiento de pedidos del 17% impulsado por proyectos de bombas, ganancias en el sector ferroviario y la demanda de conectores. El margen operativo se expandió en 610 puntos base hasta el 23,5%, incluyendo una ganancia de 48 millones de dólares de la desinversión de Wolverine. Las actuaciones notables incluyen el crecimiento de ingresos en todos los segmentos, con un aumento del 19,3% en el proceso industrial, del 12,6% en tecnologías de conexión y control, mientras que las tecnologías de movimiento disminuyeron un 4,1% debido a la venta de Wolverine. La empresa elevó su guía a todo el año, esperando un crecimiento de ingresos del 10-12% y un EPS ajustado de 5,80-5,86 dólares.
ITT는 2024년 3분기 강력한 실적을 보고하였으며, 매출이 8% (유기적 6%) 증가하여 8억 8,520만 달러에 달했습니다. EPS는 46% 성장하여 1.96달러, 조정된 EPS는 7% 증가하여 1.46달러에 이르렀습니다. 이 회사는 펌프 프로젝트, 철도 수익, 커넥터 수요에 의해 주문이 17% 증가했습니다. 운영 마진은 610bp 증가하여 23.5%에 도달했으며, 여기에는 Wolverine 매각에서의 4,800만 달러의 이익이 포함됩니다. 주목할 만한 성과로는 모든 세그먼트에서의 매출 성장으로, 산업 공정이 19.3% 증가하고, 연결 및 제어 기술이 12.6% 증가하며, Motion 기술은 Wolverine 매각으로 4.1% 감소했습니다. 이 회사는 연간 가이던스를 상향 조정하여 10-12%의 매출 성장과 5.80-5.86달러의 조정 EPS를 예상하고 있습니다.
ITT a annoncé de solides résultats pour le troisième trimestre de 2024, avec une augmentation du chiffre d'affaires de 8% (6% organique) à 885,2 millions de dollars. EPS a augmenté de 46% à 1,96 dollar, tandis que l'EPS ajusté a progressé de 7% à 1,46 dollar. L'entreprise a observé une croissance des commandes de 17%, soutenue par des projets de pompes, des gains dans le secteur ferroviaire et une demande de connecteurs. La marge opérationnelle a augmenté de 610 points de base pour atteindre 23,5%, incluant un gain de 48 millions de dollars provenant de la cession de Wolverine. Parmi les performances notables, on constate une croissance des revenus dans tous les segments, avec une augmentation de 19,3% dans les processus industriels, de 12,6% dans les technologies de connexion et de contrôle, tandis que les technologies de mouvement ont diminué de 4,1% en raison de la vente de Wolverine. L'entreprise a relevé ses prévisions annuelles, s'attendant à une croissance des revenus de 10 à 12% et un EPS ajusté de 5,80 à 5,86 dollars.
ITT berichtete über starke Ergebnisse im 3. Quartal 2024, mit einem Umsatzanstieg von 8% (6% organisch) auf 885,2 Millionen Dollar. EPS wuchs um 46% auf 1,96 Dollar, während das bereinigte EPS um 7% auf 1,46 Dollar stieg. Das Unternehmen verzeichnete ein Auftragswachstum von 17%, das durch Pumpenprojekte, Gewinne im Schienenverkehr und die Nachfrage nach Steckverbindern angetrieben wurde. Die operative Marge erweiterte sich um 610 Basispunkte auf 23,5%, einschließlich eines Gewinns von 48 Millionen Dollar aus der Veräußerung von Wolverine. Bemerkenswerte Leistungen umfassen ein Umsatzwachstum in allen Segmenten, mit einem Anstieg von 19,3% im Industrieverfahren, 12,6% in der Verbindungstechnik, während die Bewegungstechnologien um 4,1% aufgrund des Verkaufs von Wolverine zurückgingen. Das Unternehmen hob seine Jahresprognose an und plant ein Umsatzwachstum von 10-12% sowie ein bereinigtes EPS von 5,80-5,86 Dollar.
- Revenue increased 8% to $885.2 million
- EPS grew 46% to $1.96; adjusted EPS up 7% to $1.46
- Operating margin expanded 610 basis points to 23.5%
- Record backlog of $1.7 billion
- Raised full-year guidance with revenue growth expected at 10-12%
- Free cash flow decreased 41% to $87.3 million
- Higher working capital and interest expenses impacting cash flow
- Motion Technologies revenue decreased 4.1%
- Higher material and labor costs affecting margins
Insights
Strong Q3 results demonstrate robust operational execution. Revenue grew 8% (
Notable highlights include
Management's raised guidance, targeting
ITT's strategic portfolio transformation is yielding results across key market segments. The Motion Technologies division is capturing rail market share despite Wolverine divestiture impacts. Industrial Process benefits from strong short-cycle demand and Svanehøj acquisition synergies, while Connect & Control Technologies shows momentum in defense and industrial connectors enhanced by kSARIA.
The record backlog of
-
17% orders growth (14% organic) driven by pump project awards, rail share gains and connectors demand
-
8% revenue growth (6% organic) driven by strength across all segments
-
610 basis points operating margin expansion to
23.5% , including preliminary gain on divestiture of Wolverine Advanced Materials (Wolverine); 60 basis points adjusted operating margin expansion to$48 million 18.3%
-
46% EPS growth primarily driven by the gain on the Wolverine divestiture;7% adjusted EPS growth driven by pricing actions, volume and productivity
- Raising midpoint of full year EPS guidance given continued outperformance
Third quarter operating income of
EPS for the third quarter of
Net cash from operating activities for the third quarter of
Table 1. Third Quarter Performance
|
Q3 2024 |
|
Q3 2023 |
|
Change |
|||||
Revenue |
$ |
885.2 |
|
|
$ |
822.1 |
|
|
7.7 |
% |
Organic Growth |
|
|
|
|
5.5 |
% |
||||
Operating Income |
$ |
207.9 |
|
|
$ |
143.1 |
|
|
45.3 |
% |
Operating Margin |
|
23.5 |
% |
|
|
17.4 |
% |
|
610 |
bps |
Adjusted Operating Income |
$ |
161.6 |
|
|
$ |
145.5 |
|
|
11.1 |
% |
Adjusted Operating Margin |
|
18.3 |
% |
|
|
17.7 |
% |
|
60 |
bps |
Earnings Per Share |
$ |
1.96 |
|
|
$ |
1.34 |
|
|
46.3 |
% |
Adjusted Earnings Per Share |
$ |
1.46 |
|
|
$ |
1.37 |
|
|
6.6 |
% |
Net Cash from Operating Activities |
$ |
123.9 |
|
|
$ |
169.8 |
|
|
(27.0) |
% |
Free Cash Flow |
$ |
87.3 |
|
|
$ |
147.6 |
|
|
(40.9) |
% |
Note: all results unaudited; dollars in millions except for per share amounts |
Management Commentary
“Our third quarter results demonstrate the strength of the ITT businesses and of our people. Our teams once again outperformed with strong profitable growth and continued margin expansion. This quarter, once again, all of our businesses contributed: growth in our short-cycle flow business was robust, Friction continued to outperform, we took further share in rail and drove over twenty percent growth in industrial connectors. Furthermore, our legacy business surpassed our long-term margin target for the second consecutive quarter. On top of this, we also deployed more than
As a result of our strong performance thus far, we are raising the midpoint of our full year EPS outlook. Excluding the temporary acquisition amortization, we are driving to over
Table 2. Third Quarter Segment Results
|
Revenue |
|
Operating Income |
|
Operating Margin |
|
||||||
|
Q3 2024 |
Reported Change |
Organic Growth |
|
Q3 2024 |
Reported Change |
Adjusted Change |
|
Q3 2024 |
Reported Change |
Adjusted Change |
|
Motion Technologies |
344.9 |
(4.1)% |
|
|
110.0 |
|
|
|
|
1,540 bps |
110 bps |
|
Industrial Process |
333.8 |
|
|
|
69.8 |
|
|
|
|
(220) bps |
(240) bps |
|
Connect & Control Technologies |
207.2 |
|
|
|
38.1 |
|
|
|
|
40 bps |
90 bps |
|
Note: all results unaudited; excludes intercompany eliminations of |
Motion Technologies revenue decreased
Industrial Process revenue increased
Connect & Control Technologies revenue increased
Quarterly Dividend
The company announced today a quarterly dividend of
2024 Guidance
The company is raising its full-year revenue and operating margin guidance above the previous midpoint, while also raising the midpoint of its adjusted EPS outlook despite the incremental interest expense and purchase price amortization from the kSARIA acquisition. We now expect revenue growth 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 2024 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 accordingly 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 Tuesday, Oct. 29 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 beginning two hours after the webcast. 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,” “believe,” “continue,” “could,” “estimate,” “expect,” “future,” “guidance,” “project,” “intend,” “may,” “plan,” “potential,” “project,” “should,” “target,” “will,” 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:
-
uncertain global economic and capital markets conditions, which have been influenced by heightened geopolitical tensions, inflation, changes in monetary policies, the threat of a possible regional or global economic recession, trade disputes between the
U.S. and its trading partners, political and social unrest, and the availability and fluctuations in prices of energy and commodities, including steel, oil, copper and tin; - fluctuations in interest rates and the impact of such fluctuations on customer behavior and on our cost of debt;
- 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;
- volatility in raw material prices and our suppliers’ ability to meet quality and delivery requirements;
- impacts and risk of liabilities from recent mergers, acquisitions, or venture investments, and past divestitures and spin-offs;
- our inability to hire or retain key personnel;
- failure to compete successfully and innovate in our markets;
- failure to manage the distribution of products and services effectively;
- 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, maintenance expenditures, production, and market cyclicality;
- the risk of material business interruptions, particularly at our manufacturing facilities;
-
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 changing tax laws 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; and - risk of product liability claims and litigation.
More information on factors that could cause actual results or events to differ materially from those anticipated is included in our Annual Report on Form 10-K for the year ended December 31, 2023 (particularly under the caption "Risk Factors"), our Quarterly Reports on Form 10-Q and in other documents we file from time to time with the SEC.
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) |
|||||||||||||||
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
September 28, 2024 |
|
September 30, 2023 |
|
September 28, 2024 |
|
September 30, 2023 |
||||||||
Revenue |
$ |
885.2 |
|
|
$ |
822.1 |
|
|
$ |
2,701.7 |
|
|
$ |
2,453.9 |
|
Cost of revenue |
|
571.2 |
|
|
|
542.7 |
|
|
|
1,770.8 |
|
|
|
1,632.6 |
|
Gross profit |
|
314.0 |
|
|
|
279.4 |
|
|
|
930.9 |
|
|
|
821.3 |
|
General and administrative expenses |
|
74.8 |
|
|
|
66.9 |
|
|
|
223.1 |
|
|
|
210.8 |
|
Sales and marketing expenses |
|
50.5 |
|
|
|
44.4 |
|
|
|
151.2 |
|
|
|
131.2 |
|
Research and development expenses |
|
28.6 |
|
|
|
25.0 |
|
|
|
88.3 |
|
|
|
77.1 |
|
Gain on sale of businesses |
|
(47.8 |
) |
|
|
— |
|
|
|
(47.8 |
) |
|
|
(7.2 |
) |
Operating income |
|
207.9 |
|
|
|
143.1 |
|
|
|
516.1 |
|
|
|
409.4 |
|
Interest expense |
|
10.0 |
|
|
|
4.2 |
|
|
|
25.1 |
|
|
|
15.4 |
|
Interest income |
|
(1.6 |
) |
|
|
(1.9 |
) |
|
|
(5.0 |
) |
|
|
(6.5 |
) |
Other non-operating income, net |
|
(0.2 |
) |
|
|
(0.9 |
) |
|
|
(1.9 |
) |
|
|
(1.5 |
) |
Income before income tax expense |
|
199.7 |
|
|
|
141.7 |
|
|
|
497.9 |
|
|
|
402.0 |
|
Income tax expense |
|
37.8 |
|
|
|
29.9 |
|
|
|
103.6 |
|
|
|
80.6 |
|
Income from continuing operations |
|
161.9 |
|
|
|
111.8 |
|
|
|
394.3 |
|
|
|
321.4 |
|
Loss from discontinued operations, net of income tax |
|
(0.2 |
) |
|
|
— |
|
|
|
(0.2 |
) |
|
|
— |
|
Net income |
|
161.7 |
|
|
|
111.8 |
|
|
|
394.1 |
|
|
|
321.4 |
|
Less: Income attributable to noncontrolling interests |
|
0.6 |
|
|
|
1.0 |
|
|
|
2.8 |
|
|
|
2.4 |
|
Net income attributable to ITT Inc. |
$ |
161.1 |
|
|
$ |
110.8 |
|
|
$ |
391.3 |
|
|
$ |
319.0 |
|
|
|
|
|
|
|
|
|
||||||||
Amounts attributable to ITT Inc.: |
|
|
|
|
|
|
|
||||||||
Income from continuing operations |
$ |
161.3 |
|
|
$ |
110.8 |
|
|
$ |
391.5 |
|
|
$ |
319.0 |
|
Loss from discontinued operations, net of tax |
|
(0.2 |
) |
|
|
— |
|
|
|
(0.2 |
) |
|
|
— |
|
Net income attributable to ITT Inc. |
$ |
161.1 |
|
|
$ |
110.8 |
|
|
$ |
391.3 |
|
|
$ |
319.0 |
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share attributable to ITT Inc.: |
|
|
|
|
|
|
|
||||||||
Basic: |
|
|
|
|
|
|
|
||||||||
Continuing operations |
$ |
1.98 |
|
|
$ |
1.35 |
|
|
$ |
4.78 |
|
|
$ |
3.87 |
|
Discontinued operations |
|
(0.01 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Net income |
$ |
1.97 |
|
|
$ |
1.35 |
|
|
$ |
4.78 |
|
|
$ |
3.87 |
|
Diluted: |
|
|
|
|
|
|
|
||||||||
Continuing operations |
$ |
1.96 |
|
|
$ |
1.34 |
|
|
$ |
4.75 |
|
|
$ |
3.86 |
|
Discontinued operations |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Net income |
$ |
1.96 |
|
|
$ |
1.34 |
|
|
$ |
4.75 |
|
|
$ |
3.86 |
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares – basic |
|
81.6 |
|
|
|
82.1 |
|
|
|
81.9 |
|
|
|
82.4 |
|
Weighted average common shares – diluted |
|
82.1 |
|
|
|
82.5 |
|
|
|
82.4 |
|
|
|
82.7 |
|
CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED) (IN MILLIONS, EXCEPT PER SHARE AMOUNTS) |
|||||||
As of the Period Ended |
September 28, 2024 |
|
December 31, 2023 |
||||
Assets |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
460.9 |
|
|
$ |
489.2 |
|
Receivables, net |
|
802.0 |
|
|
|
675.2 |
|
Inventories |
|
620.5 |
|
|
|
575.4 |
|
Other current assets |
|
127.4 |
|
|
|
117.9 |
|
Total current assets |
|
2,010.8 |
|
|
|
1,857.7 |
|
Non-current assets: |
|
|
|
||||
Plant, property and equipment, net |
|
578.8 |
|
|
|
561.0 |
|
Goodwill |
|
1,498.3 |
|
|
|
1,016.3 |
|
Other intangible assets, net |
|
462.9 |
|
|
|
116.6 |
|
Other non-current assets |
|
393.7 |
|
|
|
381.0 |
|
Total non-current assets |
|
2,933.7 |
|
|
|
2,074.9 |
|
Total assets |
$ |
4,944.5 |
|
|
$ |
3,932.6 |
|
Liabilities and Shareholders’ Equity |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Short-term borrowings |
$ |
362.6 |
|
|
$ |
187.7 |
|
Accounts payable |
|
460.4 |
|
|
|
437.0 |
|
Accrued and other current liabilities |
|
451.7 |
|
|
|
413.1 |
|
Total current liabilities |
|
1,274.7 |
|
|
|
1,037.8 |
|
Non-current liabilities: |
|
|
|
||||
Long-term debt |
|
467.8 |
|
|
|
5.7 |
|
Postretirement benefits |
|
135.0 |
|
|
|
138.7 |
|
Other non-current liabilities |
|
311.3 |
|
|
|
211.3 |
|
Total non-current liabilities |
|
914.1 |
|
|
|
355.7 |
|
Total liabilities |
|
2,188.8 |
|
|
|
1,393.5 |
|
Shareholders’ equity: |
|
|
|
||||
Common stock: |
|
|
|
||||
Authorized – 250.0 shares, |
|
|
|
||||
Issued and outstanding – 81.5 shares and 82.1 shares, respectively |
|
81.5 |
|
|
|
82.1 |
|
Retained earnings |
|
2,993.2 |
|
|
|
2,778.0 |
|
Accumulated other comprehensive income (loss): |
|
|
|
||||
Postretirement benefits |
|
(5.2 |
) |
|
|
(1.6 |
) |
Cumulative translation adjustments |
|
(320.3 |
) |
|
|
(330.3 |
) |
Total accumulated other comprehensive loss |
|
(325.5 |
) |
|
|
(331.9 |
) |
Total ITT Inc. shareholders’ equity |
|
2,749.2 |
|
|
|
2,528.2 |
|
Noncontrolling interests |
|
6.5 |
|
|
|
10.9 |
|
Total shareholders’ equity |
|
2,755.7 |
|
|
|
2,539.1 |
|
Total liabilities and shareholders’ equity |
$ |
4,944.5 |
|
|
$ |
3,932.6 |
|
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) (IN MILLIONS) |
|||||||
For the Nine Months Ended |
September 28, 2024 |
|
September 30, 2023 |
||||
Operating Activities |
|
|
|
||||
Income from continuing operations attributable to ITT Inc. |
$ |
391.5 |
|
|
$ |
319.0 |
|
Adjustments to income from continuing operations: |
|
|
|
||||
Depreciation and amortization |
|
100.7 |
|
|
|
82.8 |
|
Equity-based compensation |
|
19.8 |
|
|
|
15.1 |
|
Gain on sale of business |
|
(47.8 |
) |
|
|
(7.2 |
) |
Other non-cash charges, net |
|
23.8 |
|
|
|
22.5 |
|
Changes in assets and liabilities: |
|
|
|
||||
Change in receivables |
|
(93.5 |
) |
|
|
(54.7 |
) |
Change in inventories |
|
(2.6 |
) |
|
|
(40.9 |
) |
Change in contract assets |
|
(5.0 |
) |
|
|
0.5 |
|
Change in contract liabilities |
|
(1.6 |
) |
|
|
11.1 |
|
Change in accounts payable |
|
(11.4 |
) |
|
|
16.5 |
|
Change in accrued expenses |
|
(14.1 |
) |
|
|
29.4 |
|
Change in income taxes |
|
(15.4 |
) |
|
|
(2.1 |
) |
Other, net |
|
(5.0 |
) |
|
|
(24.4 |
) |
Net Cash – Operating Activities |
|
339.4 |
|
|
|
367.6 |
|
Investing Activities |
|
|
|
||||
Capital expenditures |
|
(87.5 |
) |
|
|
(68.5 |
) |
Proceeds from sale of business |
|
162.4 |
|
|
|
10.5 |
|
Acquisitions, net of cash acquired |
|
(864.8 |
) |
|
|
(79.3 |
) |
Other, net |
|
(4.7 |
) |
|
|
(4.7 |
) |
Net Cash – Investing Activities |
|
(794.6 |
) |
|
|
(142.0 |
) |
Financing Activities |
|
|
|
||||
Commercial paper, net borrowings |
|
174.7 |
|
|
|
(204.3 |
) |
Long-term debt issued, net of debt issuance costs |
|
762.4 |
|
|
|
— |
|
Long-term debt, repayments |
|
(301.3 |
) |
|
|
(1.2 |
) |
Share repurchases under repurchase plan |
|
(104.0 |
) |
|
|
(60.0 |
) |
Payments for taxes related to net share settlement of stock incentive plans |
|
(13.2 |
) |
|
|
(6.7 |
) |
Dividends paid |
|
(78.7 |
) |
|
|
(71.9 |
) |
Other, net |
|
(7.9 |
) |
|
|
(1.1 |
) |
Net Cash – Financing Activities |
|
432.0 |
|
|
|
(345.2 |
) |
Exchange rate effects on cash and cash equivalents |
|
(4.4 |
) |
|
|
(10.4 |
) |
Net cash – operating activities of discontinued operations |
|
(0.4 |
) |
|
|
(0.2 |
) |
Net change in cash and cash equivalents |
|
(28.0 |
) |
|
|
(130.2 |
) |
Cash and cash equivalents – beginning of year (includes restricted cash of |
|
489.9 |
|
|
|
561.9 |
|
Cash and Cash Equivalents – End of Period (includes restricted cash of |
$ |
461.9 |
|
|
$ |
431.7 |
|
Supplemental Disclosures of Cash Flow and Non-Cash Information: |
|
|
|
||||
Cash paid for Interest |
$ |
21.3 |
|
|
$ |
12.3 |
|
Cash paid for Income taxes, net of refunds received |
$ |
106.8 |
|
|
$ |
72.0 |
|
Capital expenditures included in current liabilities |
$ |
23.0 |
|
|
$ |
16.3 |
|
Key Performance Indicators and Non-GAAP Measures
ITT reviews a variety of key performance indicators including revenue, operating income and margin, earnings per share, order growth, and backlog. 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, acquisitions, and divestitures that may or may not qualify as discontinued operations. Current year activity from acquisitions is excluded for twelve months following the closing date of acquisition. The period-over-period change resulting from foreign currency fluctuations is estimated using a fixed exchange rate for both the current and prior periods. Prior year revenue and orders are adjusted to exclude activity during the comparable period for twelve months post-closing date for divestitures that do not qualify as discontinued operations. We believe that reporting organic revenue and organic orders provide 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 is defined as operating income adjusted to exclude special items that include, but are not limited to, restructuring, certain asset impairment charges, certain acquisition- and divestiture-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 is defined as adjusted operating income 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- and divestiture-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 provide 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 Statements
|
||||||||||||||||
|
Reconciliation of Revenue to Organic Revenue |
|||||||||||||||
|
|
MT |
IP |
CCT |
Elim |
Total |
||||||||||
|
2024 Revenue |
$ |
344.9 |
|
$ |
333.8 |
|
$ |
207.2 |
|
$ |
(0.7 |
) |
$ |
885.2 |
|
|
Less: Acquisitions |
|
— |
|
|
40.0 |
|
|
15.3 |
|
|
(0.1 |
) |
|
55.2 |
|
|
Less: Foreign currency translation |
|
1.5 |
|
|
(3.1 |
) |
|
— |
|
|
(0.1 |
) |
|
(1.7 |
) |
|
2024 Organic revenue |
$ |
343.4 |
|
$ |
296.9 |
|
$ |
191.9 |
|
$ |
(0.5 |
) |
$ |
831.7 |
|
|
2023 Revenue |
$ |
359.5 |
|
$ |
279.8 |
|
$ |
184.0 |
|
$ |
(1.2 |
) |
$ |
822.1 |
|
|
Less: Divestitures |
|
31.4 |
|
|
— |
|
|
2.5 |
|
|
— |
|
|
33.9 |
|
|
2023 Organic revenue |
$ |
328.1 |
|
$ |
279.8 |
|
$ |
181.5 |
|
$ |
(1.2 |
) |
$ |
788.2 |
|
|
Organic Revenue Growth - $ |
$ |
15.3 |
|
$ |
17.1 |
|
$ |
10.4 |
|
|
$ |
43.5 |
|
||
|
Organic Revenue Growth - % |
|
4.7 |
% |
|
6.1 |
% |
|
5.7 |
% |
|
|
5.5 |
% |
||
|
|
|
|
|
|
|
||||||||||
|
Reported Revenue Growth - $ |
$ |
(14.6 |
) |
$ |
54.0 |
|
$ |
23.2 |
|
|
$ |
63.1 |
|
||
|
Reported Revenue Growth - % |
|
(4.1 |
)% |
|
19.3 |
% |
|
12.6 |
% |
|
|
7.7 |
% |
||
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
||||||||||
|
Reconciliation of Orders to Organic Orders |
|||||||||||||||
|
|
MT |
IP |
CCT |
Elim |
Total |
||||||||||
|
2024 Orders |
$ |
353.3 |
|
$ |
407.8 |
|
$ |
205.5 |
|
$ |
(1.2 |
) |
$ |
965.4 |
|
|
Less: Acquisitions |
|
— |
|
|
60.7 |
|
|
6.5 |
|
|
— |
|
|
67.2 |
|
|
Less: Foreign currency translation |
|
1.6 |
|
|
(5.0 |
) |
|
— |
|
|
(0.1 |
) |
|
(3.5 |
) |
|
2024 Organic orders |
$ |
351.7 |
|
$ |
352.1 |
|
$ |
199.0 |
|
$ |
(1.1 |
) |
$ |
901.7 |
|
|
2023 Orders |
$ |
366.6 |
|
$ |
270.8 |
|
$ |
187.4 |
|
$ |
(0.7 |
) |
$ |
824.1 |
|
|
Less: Divestitures |
|
31.4 |
|
|
— |
|
|
1.7 |
|
|
— |
|
|
33.1 |
|
|
2023 Organic orders |
$ |
335.2 |
|
$ |
270.8 |
|
$ |
185.7 |
|
$ |
(0.7 |
) |
$ |
791.0 |
|
|
Organic Orders Growth - $ |
$ |
16.5 |
|
$ |
81.3 |
|
$ |
13.3 |
|
|
$ |
110.7 |
|
||
|
Organic Orders Growth - % |
|
4.9 |
% |
|
30.0 |
% |
|
7.2 |
% |
|
|
14.0 |
% |
||
|
|
|
|
|
|
|
||||||||||
|
Reported Orders Growth - $ |
$ |
(13.3 |
) |
$ |
137.0 |
|
$ |
18.1 |
|
|
$ |
141.3 |
|
||
|
Reported Orders Growth - % |
|
(3.6 |
)% |
|
50.6 |
% |
|
9.7 |
% |
|
|
17.1 |
% |
||
|
|
|
|
|
|
|
||||||||||
|
Note: Immaterial differences due to rounding. |
ITT Inc. Non-GAAP Reconciliation Statements
(In millions; all amounts unaudited) |
|||||||||||||||||||||||||||||||
Reconciliations of Operating Income/Margin to Adjusted Operating Income/Margin |
|||||||||||||||||||||||||||||||
|
Third Quarter 2024 |
|
Third Quarter 2023 |
||||||||||||||||||||||||||||
|
MT |
IP |
CCT |
Corporate |
ITT |
|
MT |
IP |
CCT |
Corporate |
ITT |
||||||||||||||||||||
Reported Operating Income |
$ |
110.0 |
|
$ |
69.8 |
|
$ |
38.1 |
|
$ |
(10.0 |
) |
$ |
207.9 |
|
|
$ |
59.4 |
|
$ |
64.7 |
|
$ |
33.2 |
|
$ |
(14.2 |
) |
$ |
143.1 |
|
Gain on sale of Wolverine business |
|
(47.8 |
) |
|
— |
|
|
— |
|
|
— |
|
|
(47.8 |
) |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Restructuring costs |
|
0.2 |
|
|
0.4 |
|
|
0.2 |
|
|
— |
|
|
0.8 |
|
|
|
1.1 |
|
|
0.6 |
|
|
0.2 |
|
|
— |
|
|
1.9 |
|
Acquisition-related expenses |
|
— |
|
|
(0.4 |
) |
|
1.2 |
|
|
— |
|
|
0.8 |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Impacts related to |
|
(0.1 |
) |
|
— |
|
|
— |
|
|
— |
|
|
(0.1 |
) |
|
|
0.5 |
|
|
— |
|
|
— |
|
|
— |
|
|
0.5 |
|
Other special items |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
|
(0.1 |
) |
|
0.1 |
|
|
— |
|
|
— |
|
Adjusted Operating Income |
$ |
62.3 |
|
$ |
69.8 |
|
$ |
39.5 |
|
$ |
(10.0 |
) |
$ |
161.6 |
|
|
$ |
61.0 |
|
$ |
65.2 |
|
$ |
33.5 |
|
$ |
(14.2 |
) |
$ |
145.5 |
|
Change in Operating Income |
|
85.2 |
% |
|
7.9 |
% |
|
14.8 |
% |
|
(29.6 |
)% |
|
45.3 |
% |
|
|
|
|
|
|
||||||||||
Change in Adjusted Operating Income |
|
2.1 |
% |
|
7.1 |
% |
|
17.9 |
% |
|
(29.6 |
)% |
|
11.1 |
% |
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Reported Operating Margin |
|
31.9 |
% |
|
20.9 |
% |
|
18.4 |
% |
|
|
23.5 |
% |
|
|
16.5 |
% |
|
23.1 |
% |
|
18.0 |
% |
|
|
17.4 |
% |
||||
Impact of special item adjustments |
-1380 bps |
0 bps |
70 bps |
|
-520 bps |
|
50 bps |
20 bps |
20 bps |
|
30 bps |
||||||||||||||||||||
Adjusted Operating Margin |
|
18.1 |
% |
|
20.9 |
% |
|
19.1 |
% |
|
|
18.3 |
% |
|
|
17.0 |
% |
|
23.3 |
% |
|
18.2 |
% |
|
|
17.7 |
% |
||||
Change in Operating Margin |
1540 bps |
-220 bps |
40 bps |
|
610 bps |
|
|
|
|
|
|
||||||||||||||||||||
Change in Adjusted Operating Margin |
110 bps |
-240 bps |
90 bps |
|
60 bps |
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Note: Immaterial differences due to rounding. |
|||||||||||||||||||||||||||||||
|
ITT Inc. Non-GAAP Reconciliation Statements (In millions; all amounts unaudited) |
||||||||||||||||||
|
Reconciliation of Reported vs. Adjusted Income from Continuing Operating and Diluted EPS |
|||||||||||||||||
|
|
Income from Continuing Operations |
|
Diluted Earnings per Share |
||||||||||||||
|
|
Q3 2024 |
Q3 2023 |
% Change |
|
Q3 2024 |
Q3 2023 |
% Change |
||||||||||
|
Reported |
$ |
161.3 |
|
$ |
110.8 |
|
45.6 |
% |
|
$ |
1.96 |
|
$ |
1.34 |
|
46.3 |
% |
|
Special Items Expense / (Income): |
|
|
|
|
|
|
|
||||||||||
|
Gain on sale of Wolverine business |
|
(47.8 |
) |
|
— |
|
|
|
|
(0.58 |
) |
|
— |
|
|
||
|
Restructuring costs |
|
0.8 |
|
|
1.9 |
|
|
|
|
0.01 |
|
|
0.03 |
|
|
||
|
Acquisition-related costs |
|
0.8 |
|
|
— |
|
|
|
|
0.01 |
|
|
— |
|
|
||
|
Impacts related to |
|
(0.1 |
) |
|
0.5 |
|
|
|
|
— |
|
|
0.01 |
|
|
||
|
Net tax benefit of pre-tax special items |
|
(0.7 |
) |
|
(0.5 |
) |
|
|
|
(0.01 |
) |
|
(0.01 |
) |
|
||
|
Other tax-related special items [a] |
|
5.6 |
|
|
0.3 |
|
|
|
|
0.07 |
|
|
— |
|
|
||
|
Adjusted |
$ |
119.9 |
|
$ |
113.0 |
|
6.1 |
% |
|
$ |
1.46 |
|
$ |
1.37 |
|
6.6 |
% |
|
|
|
|
|
|
|
|
|
||||||||||
|
Note: Amounts may not calculate due to rounding. |
|
|
|
|
|||||||||||||
|
Per share amounts are based on diluted weighted average common shares outstanding. |
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
||||||||||
[a] |
2024 includes a tax expense on distributions of |
|||||||||||||||||
|
|
ITT Inc. Non-GAAP Reconciliation Statements (In millions; all amounts unaudited) |
||||||||||
|
Reconciliation of GAAP vs Adjusted EPS Guidance - Full Year 2024 |
|||||||||
|
|
|
|
|
|
|
||||
|
|
|
|
|
2024 Full-Year Guidance |
|||||
|
|
|
|
|
Low |
High |
||||
|
EPS from Continuing Operations - GAAP |
|
|
|
$ |
6.16 |
|
$ |
6.22 |
|
|
Gain on sale of Wolverine business |
|
|
|
|
(0.58 |
) |
|
(0.58 |
) |
|
Estimated restructuring |
|
|
|
|
0.07 |
|
|
0.07 |
|
|
Other special items |
|
|
|
|
0.06 |
|
|
0.06 |
|
|
Tax on special Items |
|
|
|
|
0.09 |
|
|
0.09 |
|
|
EPS from Continuing Operations - Adjusted |
|
|
|
$ |
5.80 |
|
$ |
5.86 |
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
||||
|
Note: The Company has provided forward-looking non-GAAP financial measures for organic revenue growth and adjusted 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 2024 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 operating margin to the most directly comparable GAAP financial measures without unreasonable efforts and accordingly has not provided reconciliations for these forward looking non-GAAP financial measures. |
ITT Inc. Non-GAAP Reconciliation Statements (In millions; all amounts unaudited) |
||||||||||||||||||
Reconciliation of Cash from Operating Activities to Free Cash Flow |
|
|||||||||||||||||
|
Three Months Ended |
|
Nine Months Ended |
|
FY 2024 |
|
||||||||||||
|
9/28/2024 |
9/30/2023 |
|
9/28/2024 |
9/30/2023 |
|
Guidance |
|
||||||||||
Net Cash - Operating Activities |
$ |
123.9 |
|
$ |
169.8 |
|
|
$ |
339.4 |
|
$ |
367.6 |
|
|
$ |
600.0 |
|
|
Less: Capital expenditures |
|
36.6 |
|
|
22.2 |
|
|
|
87.5 |
|
|
68.5 |
|
|
|
150.0 |
|
|
Free Cash Flow |
$ |
87.3 |
|
$ |
147.6 |
|
|
$ |
251.9 |
|
$ |
299.1 |
|
|
$ |
450.0 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue |
$ |
885.2 |
|
$ |
822.1 |
|
|
$ |
2,701.7 |
|
$ |
2,453.9 |
|
|
$ |
3,630.0 |
|
[a] |
Free Cash Flow Margin |
|
9.9 |
% |
|
18.0 |
% |
|
|
9.3 |
% |
|
12.2 |
% |
|
|
12.4 |
% |
|
|
|
|
|
|
|
|
|
|
||||||||||
[a] Revenue included in the full year 2024 free cash flow margin guidance represents the expected revenue growth mid-point. |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20241029279489/en/
Investor Contact
Mark Macaluso
+1 914-641-2064
mark.macaluso@itt.com
Media Contact
Phil Terrigno
+1 914-641-2143
phil.terrigno@itt.com
Source: ITT Inc.
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