PHINIA Reports Solid Q4 and Full Year 2023 Results, Introduces 2024 Outlook
- Strong Q4 results with net sales of $882 million, a 3.6% increase YoY.
- Operating income of $81 million in Q4, with net earnings of $0.70 per diluted share.
- Full year net sales of $3,500 million, a 4.5% increase YoY.
- Operating income of $241 million for the full year, with net earnings of $2.17 per diluted share.
- PHINIA expects net sales of $3.42 billion to $3.57 billion in 2024.
- Positive customer pricing and growth in light vehicle OE sales offset by lower CV OE sales in China.
- Strong cost controls and improved working capital in Q4.
- PHINIA continues to win new business at a record pace.
- Cash on hand of $365 million and net leverage of less than 1 times EBITDA.
- Expect strong earnings and cash generation in 2024.
- Adjusted free cash flow expected to be $160 to $200 million in 2024.
- Operating margins declined YoY due to lower CV volumes in China and higher non-commodity inflationary costs.
- Net earnings and adjusted EBITDA margin decreased YoY.
- Industry-wide CV volumes expected to decline in North America and Europe in 2024.
Insights
The financial results of PHINIA Inc. for the fourth quarter and full year ended December 31, 2023, indicate a modest sales growth and a slight decline in operating margins. The increase in net sales by 3.6% in Q4 and 4.5% for the full year, excluding contract manufacturing sales, suggests resilience in the company's core business segments despite the challenges posed by lower commercial vehicle (CV) OE sales in China and non-commodity inflationary costs. However, the reported decrease in operating margins, both GAAP and adjusted, highlights the pressure on profitability, mainly due to the aforementioned challenges.
A key financial metric to note is the adjusted EBITDA margin, which has seen a year-over-year decrease of 20 basis points in Q4 and 90 basis points for the full year. This contraction may raise concerns about the company's efficiency and cost management strategies. The net leverage of less than 1 times EBITDA portrays a strong balance sheet, which could provide the company with financial flexibility for future investments or share repurchases. The adjusted free cash flow of $55 million in Q4 and $161 million for the full year, coupled with the company's commitment to returning capital to shareholders, is a positive signal for investors, reflecting the company's ability to generate cash while rewarding shareholders.
PHINIA Inc.'s strategic growth through new business wins in various segments, including the supply of fuel systems to leading global OEMs, is a significant development. The conquest business win and contracts for next-generation heavy-duty and medium-duty Diesel Fuel Systems underscore the company's competitive strength in the fuel systems market. This is particularly important as the automotive industry is increasingly focusing on hybrid and low emission powertrain technologies. PHINIA's ability to secure and expand its market share in the commercial vehicle segment, despite the overall lower CV OE sales in China, demonstrates the company's strategic positioning and adaptability to market trends.
The global automotive industry outlook, as suggested by the company's 2024 guidance, reflects an expected decline in CV volumes in North America and Europe, while other markets might see a slight increase. The anticipated slight downturn in global light vehicle (LV) volumes and engine production could pose challenges for the company. However, PHINIA's projected net sales and adjusted EBITDA for 2024 suggest confidence in their ability to navigate these headwinds and continue generating strong earnings and cash flow through operational efficiencies and growth in the Aftermarket sales.
The reported financials from PHINIA Inc. reflect broader economic trends, such as the impact of foreign currency exchange rates and inflationary pressures. The positive FX impact and strong cost controls have helped the company mitigate some of the adverse effects of economic volatility. However, the non-commodity inflationary costs that were not fully recovered from customers indicate that businesses are still grappling with managing costs amidst fluctuating market conditions.
The Chinese market dynamics, particularly the decline in CV OE sales, highlight the economic slowdown in one of the world's largest automotive markets, which could have ripple effects on the global supply chain and demand for automotive components. PHINIA's guidance for 2024, with expectations of continued pressure on industry-wide CV volumes, suggests a cautious outlook on the sector's recovery pace.
PHINIA's emphasis on operational efficiencies and the exit from agreements with its former parent company may be a strategic move to streamline operations and reduce costs in anticipation of a potentially challenging economic environment. The adjusted tax rate forecast of 28-32% for 2024 will also be a factor that investors should monitor as it affects the net earnings and ultimately shareholder value.
Fourth Quarter Highlights:
-
U.S. GAAP net sales of$882 million 3.6% compared with Q4 2022.-
Excluding
$24 million China .
-
Excluding
-
Operating income of
$81 million $89 million 9.2% and an adjusted operating margin of10.4% , a year-over-year decrease of 100 basis points (bps) and 80 bps, respectively.-
Q4 2023 segment adjusted operating margins were healthy at
12.6% , 90 bps ahead of the average segment adjusted operating margin for the first 9 months of the year. Operating margins declined from the prior year primarily from lower CV volumes inChina and higher non-commodity inflationary costs that were not fully recovered from customers.
-
Q4 2023 segment adjusted operating margins were healthy at
-
U.S. GAAP net earnings of$0.70 -
Excluding
$0.01 $0.71
-
Excluding
-
Net earnings of
$33 million 3.7% and adjusted EBITDA of$127 million 14.8% , a year-over-year decrease of 20 bps. -
Net cash provided by operating activities of
$62 million -
Adjusted free cash flow was
$55 million
-
Adjusted free cash flow was
Full Year 2023 Highlights:
-
U.S. GAAP net sales of$3,500 million 4.5% compared with 2022.-
Excluding
$50 million China and weaker foreign currency translation effect, primarily Chinese Renminbi.
-
Excluding
-
Operating income of
$241 million $347 million 6.9% and an adjusted operating margin of10.1% , a year-over-year decrease of 260 bps and 80 bps, respectively.-
Operating margins declined primarily from lower CV volumes in
China and higher non-commodity inflationary costs that were not fully recovered from customers.
-
Operating margins declined primarily from lower CV volumes in
-
U.S. GAAP net earnings of$2.17 -
Excluding
$1.96 $4.13
-
Excluding
-
Net earnings of
$102 million 2.9% and adjusted EBITDA of$490 million 14.2% , a year-over-year decrease of 90 bps. -
Net cash provided by operating activities of
$250 million -
Adjusted free cash flow was
$161 million
-
Adjusted free cash flow was
Key Wins in Strategic Growth Markets:
New business wins remained strong across all end markets. Notable examples of new business awards in Q4 include:
- Conquest business win to supply GDi fuel system to a leading OEM specializing in hybrid and low emission powertrain technology in the light vehicle segment, for their European and Asian business.
- Contract to supply next generation heavy duty Diesel Fuel Systems to a leading Global OEM, extending existing relationship in core commercial vehicle segment.
- Important business win to supply medium duty Diesel Fuel Systems to a leading Global OEM, securing existing business and expanding market share in the commercial vehicle segment.
Brady Ericson, President, and Chief Executive Officer of PHINIA commented: "Our Q4 results were stronger than expected as the North American strike impact was lower than anticipated, foreign currency moved in our favor, and we executed well with strong cost controls. Working capital continued to improve from Q3 as the team focused on efficiency. We continue to demonstrate resilient core operational performance with total segment adjusted operating margins coming in stronger than the first 9-month average results. I’m pleased with our teams’ focus on serving our customers while closing out 2023 with solid cost and margin performance. PHINIA continues to win new business at a record pace that we expect will support average annual low single digit top line growth through this decade. We ended the quarter with
During the quarter, we continued to return capital to our shareholders paying another roughly
2024 Full Year Guidance:
We expect strong earnings and cash generation in 2024 as we continue to drive operational efficiencies, exit agreements with our former parent and grow our Aftermarket sales. On the OE side, industry-wide CV volumes in 2024 are expected to decline mid to high single digits percent in
The Company will host a conference call to review fourth quarter 2023 results and full year 2024 outlook and take questions from the investment community at 8:30 a.m. ET today. This call will be webcast at PHINIA Q4 2023 Earnings Call. Additional presentation materials will be available at investors.phinia.com.
About PHINIA
PHINIA is an independent, market-leading, premium solutions and components provider with over 100 years of manufacturing expertise and industry relationships, with a strong brand portfolio that includes DELPHI®, DELCO REMY® and HARTRIDGE®. With 13,200 employees across 44 locations in 20 countries, PHINIA is headquartered in
Working across commercial vehicle and industrial applications (heavy-duty and medium-duty trucks, off-highway construction, marine and agricultural), and light vehicles (passenger cars, trucks, vans and sport-utility vehicles), we develop fuel systems, electrical systems and aftermarket solutions designed to keep combustion engines operating at peak performance, as cleanly and efficiently as possible, while at the same time investing in future technologies that will unlock the potential of alternative fuels.
By providing what the market needs today, to become more efficient and sustainable, while also developing innovative products and solutions designed to contribute to a cleaner tomorrow, we are the partner of choice for a diverse array of industrial and aftermarket customers –powering our shared journey toward a carbon-neutral and carbon-free tomorrow.
(DELCO REMY is a registered trademark of General Motors LLC licensed to PHINIA Technologies Inc.)
Forward-Looking Statements: This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements other than historical fact that provide current expectations or forecasts of future events based on certain assumptions and are not guarantees of future performance. Forward-looking statements use words such as “anticipate,” “believe,” “continue,” “could,” “designed,” “effect,” “estimate,” “evaluate,” “expect,” “forecast,” “goal,” “initiative,” “intend,” “likely,” “may,” “outlook,” “plan,” “potential,” “predict,” “project,” “pursue,” “seek,” “should,” “target,” “when,” “will,” “would,” or other words of similar meaning.
Forward-looking statements are subject to risks, uncertainties, and factors relating to our business and operations, all of which are difficult to predict and which could cause our actual results to differ materially from the expectations expressed in or implied by such forward-looking statements. Risks, uncertainties, and factors that could cause actual results to differ materially from those implied by these forward-looking statements include, but are not limited to: adverse changes in general business and economic conditions, including recessions, adverse market conditions or downturns impacting the vehicle and industrial equipment industries; our ability to deliver new products, services and technologies in response to changing consumer preferences, increased regulation of greenhouse gas emissions, and acceleration of the market for electric vehicles; competitive industry conditions; failure to identify, consummate, effectively integrate or realize the expected benefits from acquisitions or partnerships; pricing pressures from original equipment manufacturers (OEMs); inflation rates and volatility in the costs of commodities used in the production of our products; changes in
We caution readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date they are made. We undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
PHINIA Inc. |
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Condensed Consolidated Statements of Operations (Unaudited) |
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|||||||||||
(in millions) |
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|
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|
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|||||||||
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
|
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2023 |
|
|
|
2022 |
|
|
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2023 |
|
|
|
2022 |
|
Fuel Systems |
$ |
556 |
|
|
$ |
527 |
|
|
$ |
2,177 |
|
|
$ |
2,072 |
|
Aftermarket |
|
326 |
|
|
|
324 |
|
|
|
1,323 |
|
|
|
1,276 |
|
Net sales |
|
882 |
|
|
|
851 |
|
|
|
3,500 |
|
|
|
3,348 |
|
Cost of sales |
|
696 |
|
|
|
663 |
|
|
|
2,776 |
|
|
|
2,627 |
|
Gross profit |
|
186 |
|
|
|
188 |
|
|
|
724 |
|
|
|
721 |
|
Gross margin |
|
21.1 |
% |
|
|
22.1 |
% |
|
|
20.7 |
% |
|
|
21.5 |
% |
|
|
|
|
|
|
|
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||||||||
Selling, general and administrative expenses |
|
107 |
|
|
|
106 |
|
|
|
413 |
|
|
|
407 |
|
Restructuring expense |
|
2 |
|
|
|
3 |
|
|
|
12 |
|
|
|
11 |
|
Other operating expense (income), net1 |
|
(4 |
) |
|
|
(8 |
) |
|
|
58 |
|
|
|
(15 |
) |
Operating income |
|
81 |
|
|
|
87 |
|
|
|
241 |
|
|
|
318 |
|
|
|
|
|
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|
|
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||||||||
Equity in affiliates’ earnings, net of tax |
|
(2 |
) |
|
|
(3 |
) |
|
|
(10 |
) |
|
|
(11 |
) |
Interest expense |
|
22 |
|
|
|
6 |
|
|
|
56 |
|
|
|
20 |
|
Interest income |
|
(4 |
) |
|
|
(3 |
) |
|
|
(13 |
) |
|
|
(6 |
) |
Other postretirement expense (income) |
|
3 |
|
|
|
(7 |
) |
|
|
2 |
|
|
|
(32 |
) |
Earnings before income taxes |
|
62 |
|
|
|
94 |
|
|
|
206 |
|
|
|
347 |
|
|
|
|
|
|
|
|
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||||||||
Provision for income taxes |
|
29 |
|
|
|
19 |
|
|
|
104 |
|
|
|
85 |
|
Net earnings |
$ |
33 |
|
|
$ |
75 |
|
|
$ |
102 |
|
|
$ |
262 |
|
|
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|
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Earnings per share — diluted |
$ |
0.70 |
|
|
$ |
1.60 |
|
|
$ |
2.17 |
|
|
$ |
5.57 |
|
|
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|
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|
|
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Weighted average shares outstanding — diluted |
|
47.0 |
|
|
|
47.0 |
|
|
|
47.0 |
|
|
|
47.0 |
|
___________________________________
1 |
During the course of preparing the Company's consolidated financial statements to be included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (Form 10-K), the Company identified an intercompany loan that had not properly been accounted for in connection with the Spin-Off resulting in expense being understated by |
PHINIA Inc. |
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Condensed Consolidated Balance Sheets (Unaudited) |
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(in millions) |
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December 31, |
||||
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|
2023 |
|
|
2022 |
ASSETS |
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||
Cash and cash equivalents |
$ |
365 |
|
$ |
251 |
Receivables, net |
|
1,017 |
|
|
891 |
Inventories |
|
487 |
|
|
459 |
Prepayments and other current assets |
|
58 |
|
|
40 |
Total current assets |
|
1,927 |
|
|
1,641 |
Property, plant and equipment, net |
|
921 |
|
|
922 |
Other non-current assets |
|
1,193 |
|
|
1,511 |
Total assets |
$ |
4,041 |
|
$ |
4,074 |
|
|
|
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LIABILITIES AND EQUITY |
|
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||
Short-term borrowings and current portion of long-term debt |
$ |
89 |
|
$ |
— |
Accounts payable |
|
639 |
|
|
686 |
Other current liabilities |
|
420 |
|
|
484 |
Total current liabilities |
|
1,148 |
|
|
1,170 |
|
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||
Long-term debt |
|
709 |
|
|
26 |
Other non-current liabilities |
|
297 |
|
|
1,235 |
Total liabilities |
|
2,154 |
|
|
2,431 |
|
|
|
|
||
Total equity |
|
1,887 |
|
|
1,643 |
Total liabilities and equity |
$ |
4,041 |
|
$ |
4,074 |
PHINIA Inc. |
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Condensed Consolidated Statements of Cash Flows (Unaudited) |
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(in millions) |
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|
Three Months Ended December 31, |
|
Year Ended December 31, |
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2023 |
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2022 |
|
|
|
2023 |
|
|
|
2022 |
|
OPERATING |
|
|
|
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||||||||
Net cash provided by operating activities |
$ |
62 |
|
|
$ |
181 |
|
|
$ |
250 |
|
|
$ |
303 |
|
INVESTING |
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Capital expenditures, including tooling outlays |
|
(33 |
) |
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(21 |
) |
|
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(150 |
) |
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|
(107 |
) |
Payments for investment in equity securities |
|
— |
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|
|
— |
|
|
|
(2 |
) |
|
|
— |
|
Proceeds from asset disposals and other, net |
|
— |
|
|
|
(4 |
) |
|
|
2 |
|
|
|
2 |
|
Net cash used in investing activities |
|
(33 |
) |
|
|
(25 |
) |
|
|
(150 |
) |
|
|
(105 |
) |
FINANCING |
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Proceeds from issuance of long-term debt, net of discount |
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— |
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— |
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|
708 |
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— |
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Payments for debt issuance costs |
|
— |
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|
— |
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(14 |
) |
|
|
— |
|
Borrowings under Revolving Facility |
|
— |
|
|
|
— |
|
|
|
75 |
|
|
|
— |
|
Repayments of debt, including current portion |
|
(3 |
) |
|
|
(1 |
) |
|
|
(4 |
) |
|
|
(1 |
) |
Payments for stock-based compensation items |
|
(1 |
) |
|
|
— |
|
|
|
(1 |
) |
|
|
— |
|
Cash inflows related to debt due from Former Parent |
|
— |
|
|
|
111 |
|
|
|
36 |
|
|
|
140 |
|
Purchase of noncontrolling interest |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(3 |
) |
Dividends paid to PHINIA Inc. stockholders |
|
(11 |
) |
|
|
— |
|
|
|
(23 |
) |
|
|
— |
|
Payments for purchase of treasury stock |
|
(15 |
) |
|
|
— |
|
|
|
(24 |
) |
|
|
— |
|
Cash outflows related to debt due to Former Parent |
|
— |
|
|
|
(4 |
) |
|
|
(728 |
) |
|
|
(117 |
) |
Net transfers (to) from Former Parent |
|
— |
|
|
|
(188 |
) |
|
|
(5 |
) |
|
|
(204 |
) |
Net cash (used in) provided by financing activities |
|
(30 |
) |
|
|
(82 |
) |
|
|
20 |
|
|
|
(185 |
) |
Effect of exchange rate changes on cash |
|
(1 |
) |
|
|
7 |
|
|
|
(6 |
) |
|
|
(21 |
) |
Net (decrease) increase in cash and cash equivalents |
|
(2 |
) |
|
|
81 |
|
|
|
114 |
|
|
|
(8 |
) |
Cash and cash equivalents at beginning of period |
|
367 |
|
|
|
170 |
|
|
|
251 |
|
|
|
259 |
|
Cash and cash equivalents at end of year |
$ |
365 |
|
|
$ |
251 |
|
|
$ |
365 |
|
|
$ |
251 |
|
PHINIA Inc. |
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Net Debt (Unaudited) |
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(in millions) |
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|
December 31, |
||||
|
|
2023 |
|
|
2022 |
Total debt, including amounts due to Former Parent |
$ |
798 |
|
$ |
1,270 |
Cash and cash equivalents |
|
365 |
|
|
251 |
Net debt |
$ |
433 |
|
$ |
1,019 |
Non-GAAP Financial Measures
This press release contains information about PHINIA’s financial results that is not presented in accordance with accounting principles generally accepted in
Management believes that these non-GAAP financial measures are useful to management, investors, and banking institutions in their analysis of the Company's business and operating performance. Management also uses this information for operational planning and decision-making purposes.
Non-GAAP financial measures are not and should not be considered a substitute for any GAAP measure. Additionally, because not all companies use identical calculations, the non-GAAP financial measures as presented by PHINIA may not be comparable to similarly titled measures reported by other companies.
A reconciliation of each of projected Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Free Cash Flow, which are forward-looking non-GAAP financial measures, to the most directly comparable GAAP financial measure, is not provided because the Company is unable to provide such reconciliation without unreasonable effort. The inability to provide each reconciliation is due to the unpredictability of the amounts and timing of events affecting the items we exclude from the non-GAAP measure.
Adjusted EBITDA and Adjusted EBITDA Margin
The Company defines adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) as net earnings less interest, taxes, depreciation and amortization, adjusted to exclude the impact of restructuring expense, separation and transaction costs, other postretirement expense (income), equity in affiliates' earnings, net of tax, impairment charges, other net expenses, and other gains and losses not reflective of our ongoing operations. Adjusted EBITDA margin is defined as adjusted EBITDA divided by adjusted sales.
Adjusted Operating Income and Adjusted Operating Margin
The Company defines adjusted operating income as operating income adjusted to exclude the impact of restructuring expense, separation and transaction costs, intangible asset amortization expense, impairment charges, other net expenses, and other gains and losses not reflective of the Company’s ongoing operations. Adjusted operating margin is defined as adjusted operating income divided by adjusted sales.
Adjusted Sales
The Company defines adjusted sales as net sales adjusted to exclude certain contract manufacturing agreements with BorgWarner that were entered into in connection with the spin-off.
Adjusted Net Earnings Per Diluted Share
The Company defines adjusted net earnings per diluted share as net earnings per share adjusted to exclude the tax-effected impact of restructuring expense, separation and transaction costs, intangible asset amortization, impairment charges, other net expenses, and other gains, losses and tax amounts not reflective of the Company’s ongoing operations.
Adjusted Free Cash Flow
The Company defines adjusted free cash flow as net cash provided by operating activities after adding back adjustments related to the ongoing effects of separation-related transactions, less capital expenditures, including tooling outlays.
Adjusted Sales (Unaudited) |
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(in millions) |
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Three Months Ended December 31, |
|
Year Ended December 31, |
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|
|
2023 |
|
|
|
2022 |
|
|
2023 |
|
|
|
2022 |
Fuel Systems net sales |
$ |
556 |
|
|
$ |
527 |
|
$ |
2,177 |
|
|
$ |
2,072 |
Contract manufacturing sales |
|
(24 |
) |
|
|
— |
|
|
(50 |
) |
|
|
— |
Fuel Systems adjusted sales |
$ |
532 |
|
|
$ |
527 |
|
$ |
2,127 |
|
|
$ |
2,072 |
|
|
|
|
|
|
|
|
||||||
Aftermarket net sales |
$ |
326 |
|
|
$ |
324 |
|
$ |
1,323 |
|
|
$ |
1,276 |
Adjusted sales |
$ |
858 |
|
|
$ |
851 |
|
$ |
3,450 |
|
|
$ |
3,348 |
Adjusted Operating Income and Adjusted Operating Income Margin (Unaudited) |
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(in millions) |
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Three Months Ended December 31, |
|
Year Ended December 31, |
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|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Operating income |
$ |
81 |
|
|
$ |
87 |
|
|
$ |
241 |
|
|
$ |
318 |
|
Separation and transaction costs |
|
(4 |
) |
|
|
4 |
|
|
|
80 |
|
|
|
31 |
|
Intangible asset amortization |
|
7 |
|
|
|
7 |
|
|
|
28 |
|
|
|
28 |
|
Restructuring expense |
|
2 |
|
|
|
3 |
|
|
|
12 |
|
|
|
11 |
|
Asset impairments |
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
5 |
|
Royalty income from Former Parent |
|
— |
|
|
|
(9 |
) |
|
|
(17 |
) |
|
|
(31 |
) |
Other |
|
3 |
|
|
|
2 |
|
|
|
3 |
|
|
|
2 |
|
Adjusted operating income |
$ |
89 |
|
|
$ |
95 |
|
|
$ |
347 |
|
|
$ |
364 |
|
|
|
|
|
|
|
|
|
||||||||
Net sales |
$ |
882 |
|
|
$ |
851 |
|
|
$ |
3,500 |
|
|
$ |
3,348 |
|
Operating margin % |
|
9.2 |
% |
|
|
10.2 |
% |
|
|
6.9 |
% |
|
|
9.5 |
% |
Adjusted sales |
$ |
858 |
|
|
$ |
851 |
|
|
$ |
3,450 |
|
|
$ |
3,348 |
|
Adjusted operating margin % |
|
10.4 |
% |
|
|
11.2 |
% |
|
|
10.1 |
% |
|
|
10.9 |
% |
____________________________
Segment Adjusted Operating Income and Segment Adjusted Operating Income Margin (Unaudited) |
|||||||||||||||
(in millions) |
|
|
|
|
|
|
|
||||||||
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Fuel Systems |
$ |
55 |
|
|
$ |
59 |
|
|
$ |
215 |
|
|
$ |
252 |
|
Margin % |
|
10.3 |
% |
|
|
11.2 |
% |
|
|
10.1 |
% |
|
|
12.2 |
% |
Aftermarket |
|
53 |
|
|
|
54 |
|
|
|
196 |
|
|
|
191 |
|
Margin % |
|
16.3 |
% |
|
|
16.7 |
% |
|
|
14.8 |
% |
|
|
15.0 |
% |
Segment adjusted operating income |
|
108 |
|
|
|
113 |
|
|
|
411 |
|
|
|
443 |
|
Margin % |
|
12.6 |
% |
|
|
13.3 |
% |
|
|
11.9 |
% |
|
|
13.2 |
% |
|
|
|
|
|
|
|
|
||||||||
Fuel Systems adjusted sales |
|
532 |
|
|
|
527 |
|
|
|
2,127 |
|
|
|
2,072 |
|
Aftermarket adjusted sales |
|
326 |
|
|
|
324 |
|
|
|
1,323 |
|
|
|
1,276 |
|
Adjusted sales |
$ |
858 |
|
|
$ |
851 |
|
|
$ |
3,450 |
|
|
$ |
3,348 |
|
____________________________
Adjusted EBITDA and EBITDA Margin (Unaudited) |
|
|
|
|
|
|
|
||||||||
(in millions) |
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net earnings |
$ |
33 |
|
|
$ |
75 |
|
|
$ |
102 |
|
|
$ |
262 |
|
Depreciation and tooling amortization |
|
38 |
|
|
|
33 |
|
|
|
143 |
|
|
|
142 |
|
Provision for income taxes |
|
29 |
|
|
|
19 |
|
|
|
104 |
|
|
|
85 |
|
Intangible asset amortization |
|
7 |
|
|
|
7 |
|
|
|
28 |
|
|
|
28 |
|
Interest expense |
|
22 |
|
|
|
6 |
|
|
|
56 |
|
|
|
20 |
|
Interest income |
|
(4 |
) |
|
|
(3 |
) |
|
|
(13 |
) |
|
|
(6 |
) |
EBITDA |
|
125 |
|
|
|
137 |
|
|
|
420 |
|
|
|
531 |
|
Separation and transaction costs |
|
(4 |
) |
|
|
4 |
|
|
|
80 |
|
|
|
31 |
|
Restructuring expense |
|
2 |
|
|
|
3 |
|
|
|
12 |
|
|
|
11 |
|
Other postretirement expense (income) |
|
3 |
|
|
|
(7 |
) |
|
|
2 |
|
|
|
(32 |
) |
Asset impairments |
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
5 |
|
Royalty income from Former Parent |
|
— |
|
|
|
(9 |
) |
|
|
(17 |
) |
|
|
(31 |
) |
Equity in affiliates’ earnings, net of tax |
|
(2 |
) |
|
|
(3 |
) |
|
|
(10 |
) |
|
|
(11 |
) |
Other |
|
3 |
|
|
|
2 |
|
|
|
3 |
|
|
|
2 |
|
Adjusted EBITDA |
$ |
127 |
|
|
$ |
128 |
|
|
$ |
490 |
|
|
$ |
506 |
|
|
|
|
|
|
|
|
|
||||||||
Adjusted sales |
$ |
858 |
|
|
$ |
851 |
|
|
$ |
3,450 |
|
|
$ |
3,348 |
|
Adjusted EBITDA margin % |
|
14.8 |
% |
|
|
15.0 |
% |
|
|
14.2 |
% |
|
|
15.1 |
% |
Net Earnings to Adjusted Net Earnings (Unaudited) |
|
|
|
|
|
|
|
||||||||
(in millions) |
|
|
|
|
|
|
|
||||||||
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net earnings |
$ |
33 |
|
|
$ |
75 |
|
|
$ |
102 |
|
|
$ |
262 |
|
|
|
|
|
|
|
|
|
||||||||
Separation and transaction costs |
|
(7 |
) |
|
|
4 |
|
|
|
74 |
|
|
|
31 |
|
Intangible asset amortization |
|
6 |
|
|
|
7 |
|
|
|
25 |
|
|
|
28 |
|
Restructuring expense |
|
1 |
|
|
|
3 |
|
|
|
9 |
|
|
|
11 |
|
Royalty income from Former Parent |
|
— |
|
|
|
(9 |
) |
|
|
(17 |
) |
|
|
(31 |
) |
Asset impairments and lease modifications |
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
5 |
|
Tax adjustments |
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
||||||||
Adjusted net earnings |
|
33 |
|
|
$ |
81 |
|
|
$ |
194 |
|
|
$ |
306 |
|
Adjusted Net Earnings Per Diluted Share (Unaudited) |
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net earnings per diluted share |
$ |
0.70 |
|
|
$ |
1.60 |
|
|
$ |
2.17 |
|
|
$ |
5.57 |
|
|
|
|
|
|
|
|
|
||||||||
Separation and transaction costs |
|
(0.15 |
) |
|
|
0.09 |
|
|
|
1.57 |
|
|
|
0.66 |
|
Intangible asset amortization |
|
0.13 |
|
|
|
0.15 |
|
|
|
0.53 |
|
|
|
0.60 |
|
Restructuring expense |
|
0.02 |
|
|
|
0.10 |
|
|
|
0.19 |
|
|
|
0.23 |
|
Royalty income from Former Parent |
|
— |
|
|
|
(0.19 |
) |
|
|
(0.36 |
) |
|
|
(0.66 |
) |
Asset impairments and lease modifications |
|
— |
|
|
|
0.02 |
|
|
|
— |
|
|
|
0.11 |
|
Tax adjustments |
|
0.01 |
|
|
|
(0.02 |
) |
|
|
0.03 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
||||||||
Adjusted net earnings per diluted share |
$ |
0.71 |
|
|
$ |
1.75 |
|
|
$ |
4.13 |
|
|
$ |
6.51 |
|
Free Cash Flow (Unaudited) |
|
|
|
|
|
|
|
||||||||
(in millions) |
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net cash provided by operating activities |
$ |
62 |
|
|
$ |
181 |
|
|
$ |
250 |
|
|
$ |
303 |
|
Capital expenditures, including tooling outlays |
|
(33 |
) |
|
|
(21 |
) |
|
|
(150 |
) |
|
|
(107 |
) |
Effects of separation-related transactions |
|
26 |
|
|
|
4 |
|
|
|
61 |
|
|
|
31 |
|
Adjusted free cash flow |
$ |
55 |
|
|
$ |
164 |
|
|
$ |
161 |
|
|
$ |
227 |
|
Adjusted Sales Guidance (Unaudited) |
|
|
|
||||
(in millions) |
|
|
|
||||
|
|
|
|
||||
|
Full Year 2024 Guidance |
||||||
|
Low |
|
High |
||||
Net sales |
$ |
3,415 |
|
|
$ |
3,570 |
|
Spin-off agreement adjustment |
|
(15 |
) |
|
|
(20 |
) |
Adjusted sales |
$ |
3,400 |
|
|
$ |
3,550 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240221690343/en/
IR contact:
Michael Heifler
VP Investor Relations
investors@phinia.com
+1 947-262-1992
Media contact:
Kevin Price
Global Brand & Communications Director
media@phinia.com
+44 (0) 7795 463871
Source: PHINIA INC
FAQ
What were PHINIA's net sales in Q4 2023?
What was PHINIA's operating income in Q4 2023?
What were PHINIA's full year 2023 net sales?
What is PHINIA's expected net sales range for 2024?
What impacted PHINIA's operating margins in 2023?
What is PHINIA's adjusted free cash flow expectation for 2024?
