Solventum Reports Second Quarter 2024 Financial Results and Raises Full-Year Guidance
Solventum (NYSE: SOLV) posted its Q2 2024 financial results. Reported sales increased by 0.2% to $2.081 billion, and organic sales grew by 1.3%. GAAP EPS was $0.51, while adjusted EPS was $1.56. The company generated $355 million in cash from operations and had a free cash flow of $297 million.
Segment-wise, MedSurg and Health Information Systems saw organic sales growth, while Dental Solutions and Purification and Filtration declined.
Solventum raised its full-year 2024 guidance, expecting organic sales growth between 0% to 1.0% and adjusted EPS between $6.30 to $6.50. Free cash flow guidance remains at $700M to $800M. CEO Bryan Hanson highlighted ongoing business continuity amid the company's transformation.
Solventum (NYSE: SOLV) ha pubblicato i risultati finanziari per il secondo trimestre del 2024. Le vendite riportate sono aumentate dello 0,2% a 2,081 miliardi di dollari, mentre le vendite organiche sono cresciute dell'1,3%. L'utile per azione secondo i principi contabili GAAP è stato di 0,51 dollari, mentre l'utile per azione rettificato è stato di 1,56 dollari. L'azienda ha generato 355 milioni di dollari in contante dalle operazioni e ha registrato un flusso di cassa libero di 297 milioni di dollari.
Suddividendo per segmento, MedSurg e Health Information Systems hanno visto una crescita delle vendite organiche, mentre Dental Solutions e Purification and Filtration hanno registrato un calo.
Solventum ha alzato le previsioni per l'intero anno 2024, prevedendo una crescita delle vendite organiche tra lo 0% e l'1,0% e un utile per azione rettificato tra 6,30 e 6,50 dollari. Le previsioni del flusso di cassa libero rimangono tra 700 milioni e 800 milioni di dollari. Il CEO Bryan Hanson ha sottolineato la continuità aziendale durante la trasformazione dell'azienda.
Solventum (NYSE: SOLV) publicó sus resultados financieros del segundo trimestre de 2024. Las ventas reportadas aumentaron un 0,2% a 2.081 millones de dólares, y las ventas orgánicas crecieron un 1,3%. El beneficio por acción GAAP fue de 0,51 dólares, mientras que el beneficio por acción ajustado fue de 1,56 dólares. La empresa generó 355 millones de dólares en efectivo de las operaciones y tuvo un flujo de caja libre de 297 millones de dólares.
Por segmento, MedSurg y Health Information Systems vieron crecimiento en las ventas orgánicas, mientras que Dental Solutions y Purification and Filtration experimentaron una disminución.
Solventum elevó su guía para el año completo 2024, esperando un crecimiento de ventas orgánicas entre el 0% y el 1,0% y un beneficio por acción ajustado entre 6,30 y 6,50 dólares. La guía de flujo de caja libre se mantiene entre 700 millones y 800 millones de dólares. El CEO Bryan Hanson destacó la continuidad del negocio en medio de la transformación de la compañía.
솔벤트럼(Solventum, NYSE: SOLV)는 2024년 2분기 재무 결과를 발표했습니다. 보고된 판매는 20억 8100만 달러로 0.2% 증가했으며, 유기적 판매는 1.3% 증가했습니다. GAAP 기준 주당 순이익(EPS)은 0.51달러였고 조정 주당 순이익은 1.56달러였습니다. 회사는 운영에서 3억 5500만 달러의 현금을 창출했으며, 자유 현금 흐름은 2억 9700만 달러로 나타났습니다.
세그먼트별로는 MedSurg와 Health Information Systems가 유기적 판매 성장을 보인 반면, Dental Solutions와 Purification and Filtration은 감소했습니다.
솔벤트럼은 2024년 전체 연도 가이드를 상향 조정하여 유기적 판매 성장이 0%에서 1.0% 사이, 조정 주당 순이익이 6.30달러에서 6.50달러 사이일 것으로 예상하고 있습니다. 자유 현금 흐름 가이드는 7억 달러에서 8억 달러로 유지됩니다. CEO 브라이언 핸슨은 회사의 변혁 중에도 지속적인 비즈니스 연속성을 강조했습니다.
Solventum (NYSE: SOLV) a publié ses résultats financiers pour le deuxième trimestre 2024. Les ventes déclarées ont augmenté de 0,2 % pour atteindre 2,081 milliards de dollars, et les ventes organiques ont crû de 1,3 %. Le bénéfice par action selon les principes comptables GAAP était de 0,51 dollar, tandis que le bénéfice par action ajusté était de 1,56 dollar. L'entreprise a généré 355 millions de dollars de flux de trésorerie provenant des opérations et a enregistré un flux de trésorerie libre de 297 millions de dollars.
Par segment, MedSurg et Health Information Systems ont connu une croissance des ventes organiques, tandis que Dental Solutions et Purification et Filtration ont diminué.
Solventum a relevé ses prévisions pour l'année 2024, s'attendant à une croissance des ventes organiques comprise entre 0 % et 1,0 % et à un bénéfice par action ajusté situé entre 6,30 et 6,50 dollars. Les prévisions de flux de trésorerie libre demeurent entre 700 millions et 800 millions de dollars. Le PDG Bryan Hanson a souligné la continuité des activités pendant la transformation de l'entreprise.
Solventum (NYSE: SOLV) hat seine Finanzzahlen für das zweite Quartal 2024 veröffentlicht. Die berichteten Verkaufszahlen stiegen um 0,2% auf 2,081 Milliarden Dollar, und die organischen Verkäufe wuchsen um 1,3%. Der GAAP Gewinn pro Aktie betrug 0,51 Dollar, während der bereinigte Gewinn pro Aktie bei 1,56 Dollar lag. Das Unternehmen generierte 355 Millionen Dollar Cashflow aus dem operativen Geschäft und hatte einen Free Cashflow von 297 Millionen Dollar.
Segmentweise verzeichneten MedSurg und Health Information Systems ein organisches Verkaufswachstum, während Dental Solutions und Purification and Filtration rückläufig waren.
Solventum hob die Prognose für das Gesamtjahr 2024 an und erwartet ein organisches Verkaufswachstum zwischen 0% und 1,0% sowie einen bereinigten Gewinn pro Aktie zwischen 6,30 und 6,50 Dollar. Die Prognose für den freien Cashflow bleibt bei 700 Millionen bis 800 Millionen Dollar. CEO Bryan Hanson betonte die kontinuierliche Geschäftstätigkeit trotz der Transformation des Unternehmens.
- Reported sales increased by 0.2% to $2.081 billion.
- Organic sales increased by 1.3%.
- Adjusted EPS of $1.56.
- Generated $355 million in cash from operations.
- Free cash flow of $297 million.
- Raised full-year 2024 guidance: organic sales growth of 0% to 1.0%, adjusted EPS of $6.30 to $6.50.
- GAAP operating income margin declined due to lower gross margins and increased operating expenses.
- Dental Solutions segment saw a 5.8% decline in sales.
- Purification and Filtration segment sales dropped by 3.6%.
- Separation activities and business continuity on track
- Reported sales increased
0.2% to ; organic sales increased$2.08 1 billion1.3% - GAAP Earnings Per Share (EPS) of
; adjusted EPS1 of$0.51 $1.56 - Generated
in cash from operations; free cash flow1 of$355 million $297 million - Raises full-year 2024 organic sales growth and adjusted EPS guidance
"As we continue to execute a complex transformation, we're encouraged by our first financial results as an independent company and early ability to maintain business continuity," said Bryan Hanson, chief executive officer, Solventum. "We are starting from a solid foundation and remain focused on addressing historical underperformance and spin-related topics to unlock significant value creation over time."
Second Quarter 2024 Financial Results
3 months ended June 30, 2024 (Millions of dollars, except per share amounts) | GAAP | non-GAAP1 |
Sales | ||
Operating income | ||
Operating income margin | 11.7 % | 20.7 % |
Earnings per share (EPS) | ||
Cash from operations/free cash flow1 |
Reported and organic sales growth reflect the expected normalizing of pricing. While volumes grew slightly, this included a benefit from a backorder improvement. By segment, organic sales growth was primarily driven by performance in our MedSurg and Health Information Systems segments, partially offset by results in our Dental Solutions and Purification and Filtration segments.
GAAP and adjusted operating income margin declined due to lower gross margins and an increase in operating expenses related to public company and functional stand-up costs. Both GAAP and adjusted EPS reflect a full quarter of interest expense.
1 Represents non-GAAP financial measure; see the "Non-GAAP Financial Measures" section for applicable information. |
Segment Sales* | ||||||||||||
Three months ended June 30, | ||||||||||||
2024 | 2023 | Sales change 2024 vs 2023 | ||||||||||
(Dollars in millions) | Net Sales | Net Sales | Total Sales | Translation | Other2 | Organic Sales | ||||||
MedSurg | $ 1,162 | $ 1,161 | 0.1 % | (1.1) % | (0.5) % | 1.8 % | ||||||
Dental Solutions | 331 | 351 | (5.8) | (1.5) | (2.4) | (2.0) | ||||||
Health Information Systems | 328 | 316 | 3.5 | (0.1) | — | 3.6 | ||||||
Purification and Filtration | 238 | 248 | (3.6) | (1.6) | (1.2) | (0.9) | ||||||
Corporate and Unallocated3 | 22 | — | NM | NM | NM | NM | ||||||
Total Company | $ 2,081 | $ 2,076 | 0.2 % | (1.1) % | — % | 1.3 % |
*Data in the schedule above is intentionally rounded to the nearest million and, therefore, may not sum. |
2Other represents sales impact from acquisitions and divestitures measured separately for the first 12 months post-transaction. Divestiture impacts include lost sales from the company's dental anesthetics business that was sold in August 2023 and certain health care businesses retained by 3M |
3Corporate and unallocated includes sales related to product supplied to 3M and other supply agreements related to legacy 3M business and assumed by the company at spin-off. |
Full-Year 2024 Guidance
Solventum is raising its full-year 2024 guidance
- Organic sales growth of
0% to +1.0% (previously -2% to0% ) - Adjusted EPS of
to$6.30 (previously$6.50 to$6.10 )$6.40 - Free cash flow of
to$700M (no change to prior guidance)$800M
Organic revenue, adjusted EPS, free cash flow amounts and adjusted effective tax rate included in Solventum's full-year guidance and additional considerations below are non-GAAP financial measures. Solventum does not provide reconciliations of the forward-looking non-GAAP financial measures to the respective GAAP metrics as it is unable to predict with reasonable certainty and without unreasonable effort certain items, such as the impact of changes in currency exchange rates, impacts associated with business acquisitions or divestitures, timing and magnitude of restructuring activities, among other items.
Additional considerations:
- Wave 1 of the SKU rationalization project represents approximately
5% of total SKUs and is not expected to have a material impact on 2024 revenue or margin performance - 3M supply agreement mark-up started on April 1, 2024, and Solventum anticipates impact to the income statement to begin in Q3 2024
- Solventum now expects a full-year adjusted effective tax rate range of
18% to19% (previously20% to21% )
Solventum's full-year 2024 guidance is based on Q1 2024 as a carve-out plus the remainder of the year as a stand-alone company starting April 1, 2024.
See the "Non-GAAP Financial Measures" section for explanations of our non-GAAP financial measures.
Earnings Conference Call Solventum will host a conference call today, August 8, at 4:30 p.m. Eastern Time to discuss its second quarter financial results and provide an update on its business. The conference call can be accessed via audio webcast at investors.solventum.com or by dialing (800) 715-9871 within the
A replay of the webcast, along with the earnings press release, slides highlighting the results, and supplemental financial disclosures, will also be available at the same link on the Investor Relations section of the company's website.
Forward Looking Statement
This news release contains forward-looking information about Solventum's financial results and estimates and business prospects that involve substantial risks and uncertainties. In particular, statements regarding the future performance of Solventum, including guidance for 2024, are forward-looking statements. You can identify these statements by the use of words such as "anticipates," "believes," "could," "estimates," "expects," "forecasts," "goal," "guidance," "intends," "may," "outlook," "plans," "projects," "seeks," "sees," "should," "targets," "will," "would," and other words and terms of similar meaning in connection with any discussion of future operating or financial performance or business plans or prospects. Among the factors that could cause actual results to differ materially are the following: (1) worldwide economic, political, regulatory, international, trade and geopolitical conditions, natural disasters, war, public health crises, and other events beyond Solventum's control; (2) operational execution risks; (3) damage to Solventum's reputation or its brands; (4) risks from acquisitions, strategic alliances, divestitures and other strategic events; (5) Solventum's business dealings involving third-party partners in various markets; (6) Solventum's ability to access the capital and credit markets and changes in Solventum's credit ratings; (7) exposure to interest rate and currency risks; (8) the highly competitive environment in which Solventum operates and consolidation in the healthcare industry; (9) reduction in customers' research budgets or government funding; (10) the timing and market acceptance of Solventum's new product and service offerings; (11) ongoing working relationships with certain key healthcare professionals; (12) changes in reimbursement practices of governments or private payers or other cost containment measures; (13) Solventum's ability to obtain components or raw materials supplied by third parties and other manufacturing and related supply chain difficulties, interruptions, and disruptive factors; (14) legal and regulatory proceedings and legal compliance risks (including third-party risks) with regards to antitrust, FCPA and other anti-bribery laws, environmental laws, anti-kickback and false claims laws, privacy laws, product liability claims, tax laws, and other laws and regulations in
Changes in such assumptions or factors could produce significantly different results. A further description of these factors is located under "Cautionary Note Regarding Forward-Looking Statements" and "Risk Factors" in the Information Statement included in Solventum's Quarterly Report on Form 10-Q for the quarter ended March 31, 2024. Solventum assumes no obligation to update any forward-looking statements discussed herein as a result of new information or future events or developments.
Non-GAAP Financial Measures
In addition to reporting financial results in accordance with
Solventum calculates forward-looking non-GAAP financial measures, including organic revenue growth, adjusted operating income, adjusted operating income margin, adjusted effective tax rate, adjusted earnings per share, and free cash flow based on internal forecasts that omit certain amounts that would be included in GAAP financial measures. Solventum does not provide reconciliations of these forward-looking non-GAAP financial measures to the respective GAAP metrics as it is unable to predict with reasonable certainty and without unreasonable effort certain items such as the impact of changes in currency exchange rates, impacts associated with business acquisitions or divestitures, timing and magnitude of restructuring activities, among other items. The timing and amounts of these items are uncertain and could have a material impact on Solventum's results in accordance with GAAP.
The Q2 2024 financial statements and financial information, including reconciliations of non-GAAP financial measures, are available on Solventum's website: investors.solventum.com.
About Solventum
At Solventum, we enable better, smarter, safer healthcare to improve lives. As a new company with a long legacy of creating breakthrough solutions for our customers' toughest challenges, we pioneer game-changing innovations at the intersection of health, material and data science that change patients' lives for the better — while empowering healthcare professionals to perform at their best. See how at Solventum.com.
Solventum Corporation CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF INCOME (Dollars in millions, except per-share amounts) (Unaudited) | ||||||||
Three months ended June 30, | Six months ended June 30, | |||||||
2024 | 2023 | 2024 | 2023 | |||||
Net sales of product | $ 1,605 | $ 1,607 | $ 3,158 | $ 3,157 | ||||
Net sales of software and rentals | 476 | 469 | 939 | 930 | ||||
Total net sales | 2,081 | 2,076 | 4,097 | 4,087 | ||||
Cost of product | 823 | 762 | 1,548 | 1,514 | ||||
Cost of software and rentals | 121 | 125 | 240 | 247 | ||||
Gross profit | 1,137 | 1,189 | 2,309 | 2,326 | ||||
Selling, general and administrative expenses | 701 | 579 | 1,297 | 1,156 | ||||
Research and development expenses | 192 | 193 | 387 | 388 | ||||
Total operating expenses | 1,837 | 1,659 | 3,472 | 3,305 | ||||
Operating income | 244 | 417 | 625 | 782 | ||||
Interest expense, net | 114 | — | 153 | — | ||||
Other expense (income), net | 34 | 4 | 47 | 6 | ||||
Income before income taxes | 96 | 413 | 425 | 776 | ||||
Provision for income taxes | 7 | 92 | 99 | 162 | ||||
Net Income | $ 89 | $ 321 | $ 326 | $ 614 | ||||
Earnings per share: | ||||||||
Basic earnings per share | $ 0.51 | $ 1.86 | $ 1.89 | $ 3.56 | ||||
Diluted earnings per share | 0.51 | 1.86 | 1.88 | 3.56 | ||||
Weighted-average number of share outstanding: | ||||||||
Basic | 173.2 | 172.7 | 172.9 | 172.7 | ||||
Diluted | 173.5 | 172.7 | 173.1 | 172.7 |
Solventum Corporation CONDENSED CONSOLIDATED AND COMBINED BALANCE SHEETS (Dollars in millions) (Unaudited) | ||||
June 30, | December 31, | |||
(Millions) | 2024 | 2023 | ||
Assets | ||||
Current assets | ||||
Cash and cash equivalents | $ 897 | $ 194 | ||
Accounts receivable — net of allowances of | 1,028 | 1,313 | ||
Due from related parties | 289 | — | ||
Inventories | ||||
Finished goods | 500 | 453 | ||
Work in process | 171 | 171 | ||
Raw materials and supplies | 228 | 233 | ||
Total inventories | 899 | 857 | ||
Other current assets | 250 | 155 | ||
Total current assets | 3,363 | 2,519 | ||
Property, plant and equipment — net | 1,537 | 1,457 | ||
Goodwill | 6,447 | 6,535 | ||
Intangible assets — net | 2,724 | 2,902 | ||
Other assets | 507 | 530 | ||
Total assets | $ 14,578 | $ 13,943 | ||
Liabilities | ||||
Current liabilities | ||||
Accounts payable | $ 495 | $ 477 | ||
Due to related parties | 611 | — | ||
Unearned revenue | 505 | 574 | ||
Other current liabilities | 960 | 677 | ||
Total current liabilities | 2,571 | 1,728 | ||
Long-term debt | 8,306 | — | ||
Pension and postretirement benefits | 315 | 166 | ||
Deferred income taxes | 214 | 231 | ||
Other liabilities | 305 | 152 | ||
Total liabilities | $ 11,711 | $ 2,277 | ||
Equity | ||||
Common stock par value, | $ 2 | $ — | ||
Shares issued and outstanding - June 30, 2024: 172,710,593 | ||||
Shares issued and outstanding - December 31, 2023: 0 | ||||
Additional paid-in capital | 3,719 | — | ||
Retained earnings | 89 | — | ||
Net parent investment | — | 12,003 | ||
Accumulated other comprehensive income (loss) — net | (943) | (337) | ||
Total equity | 2,867 | 11,666 | ||
Total liabilities and equity | $ 14,578 | $ 13,943 |
Solventum Corporation CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS (Dollars in millions) (Unaudited) | ||||
Six months ended June 30, | ||||
(Millions) | 2024 | 2023 | ||
Cash Flows from Operating Activities | ||||
Net income | $ 326 | $ 614 | ||
Adjustments to reconcile net income to net cash provided by operating activities | ||||
Depreciation and amortization | 272 | 278 | ||
Postretirement benefit plan expense | 19 | 21 | ||
Stock-based compensation expense | 60 | 26 | ||
Deferred income taxes | (56) | (69) | ||
Changes in assets and liabilities | ||||
Accounts receivable | 70 | (30) | ||
Due from related parties | 131 | — | ||
Inventories | (57) | (5) | ||
Accounts payable | 132 | 30 | ||
Due to related parties | (229) | — | ||
All other operating activities | 129 | 10 | ||
Net cash provided by operating activities | 797 | 875 | ||
Cash Flows from Investing Activities | ||||
Purchases of property, plant and equipment | (160) | (136) | ||
Net cash used in investing activities | (160) | (136) | ||
Cash Flows from Financing Activities | ||||
Net transfers to 3M | (8,247) | (761) | ||
Proceeds from long-term debt, net of issuance costs | 8,303 | — | ||
Other — net | 10 | — | ||
Net cash provided by (used in) financing activities | 66 | (761) | ||
Effect of exchange rate changes on cash and cash equivalents | — | — | ||
Net increase (decrease) in cash and cash equivalents | 703 | (22) | ||
Cash and cash equivalents at beginning of year | 194 | 61 | ||
Cash and cash equivalents at end of period | $ 897 | $ 39 |
Solventum Corporation SALES CHANGE ANALYSIS4 (Dollars in millions) (Unaudited) | ||||||||||||
Business Segment Information* | ||||||||||||
Six months ended June 30, | ||||||||||||
2024 | 2023 | Sales Change 2024 vs 2023 | ||||||||||
(Dollars in millions) | Net Sales | Net Sales | Total Sales | Translation | Other | Organic Sales | ||||||
MedSurg | $ 2,281 | $ 2,284 | (0.1) % | (0.8) % | (0.3) % | 1.0 % | ||||||
Dental Solutions | 666 | 692 | (3.8) | (0.9) | (2.1) | (0.8) | ||||||
Health Information Systems | 645 | 632 | 2.0 | — | — | 2.0 | ||||||
Purification and Filtration | 483 | 479 | 0.9 | (1.1) | (0.6) | 2.6 | ||||||
Corporate and Unallocated5 | 22 | — | NM | NM | NM | NM | ||||||
Total Company | $ 4,097 | $ 4,087 | 0.2 % | (0.7) % | (0.1) % | 1.1 % |
*Data in the schedule above is intentionally rounded to the nearest million and, therefore, may not sum. |
4Total sales change is calculated based on reported sales results. The components of sales change include organic local-currency sales, translation, and other. Organic local-currency sales include both organic volume impacts (which excludes acquisition and divestiture impacts, in addition to supply agreement and impacts) and selling price changes. Other represents sales impact from acquisitions and divestitures measured separately for the first 12 months post-transaction. Divestiture impacts include lost sales from the company's dental anesthetics business that was sold in August 2023 and certain health care businesses retained by 3M |
5Corporate and Unallocated also includes sales and cost of sales related to products supplied to 3M and other supply agreements related to legacy 3M business and assumed by the company at spin-off. |
Solventum Corporation and Subsidiaries
BUSINESS SEGMENTS
(Unaudited)
Operating segments include components of an enterprise where separate financial information is available that is evaluated regularly by the company's Chief Operating Decision Maker ("CODM") for the purpose of assessing performance and allocating resources. The company's CODM is its Chief Executive Officer. The company's operating activities are managed through four operating segments: MedSurg, Dental Solutions, Health Information Systems, and Purification and Filtration. There have been no changes to the composition of the segments or to financial information reported within each of the business segments. These segments have been identified based on the nature of the products sold and how the company manages its operations. Transactions among reportable segments are recorded at cost. No operating segments have been aggregated to form reportable segments.
Corporate and Unallocated includes amortization of acquired intangible assets, restructuring and related charges, benefits or costs related to capitalized manufacturing variances, spin-off and separation related costs and other net costs that the company chose not to allocate directly to its business segments. Spin-off and separation related costs include any costs incurred as part of our separation from 3M and costs to setup operations as a standalone company, including system implementations, manufacturing relocation, legal entity separation, certain equity awards granted as part of the spin-off, profit mark-ups on transition service arrangements with 3M and other one-time costs.
Corporate and Unallocated also includes sales and cost of sales related to products supplied to 3M and other supply agreements related to legacy 3M business and assumed by the company at spin-off. Because Corporate and Unallocated includes a variety of miscellaneous items, it is subject to fluctuation on a quarterly and annual basis. Business segment operating income is reconciled to total operating income below:
BUSINESS SEGMENT INFORMATION | ||||||||||||
Three months ended June 30, 2024 | Three months ended June 30, 2023 | |||||||||||
(Dollars in millions) | Net Sales | Operating | Operating | Net Sales | Operating | Operating | ||||||
MedSurg | $ 1,162 | $ 214 | 18.4 % | $ 1,161 | $ 269 | 23.2 % | ||||||
Dental Solutions | 331 | 90 | 27.2 | 351 | 124 | 35.3 | ||||||
Health Information Systems | 328 | 111 | 33.8 | 316 | 96 | 30.4 | ||||||
Purification and Filtration | 238 | 19 | 8.0 | 248 | 50 | 20.2 | ||||||
Total business segment operating income | $ 434 | $ 539 | ||||||||||
Corporate and Unallocated: | ||||||||||||
Amortization expense | $ (86) | $ (92) | ||||||||||
Other Corporate and Unallocated | (104) | (30) | ||||||||||
Total Corporate and Unallocated | 22 | (190) | NM | — | (122) | NM | ||||||
Total Company | $ 2,081 | $ 244 | 11.7 % | $ 2,076 | $ 417 | 20.1 % |
BUSINESS SEGMENT INFORMATION | ||||||||||||
Six months ended June 30, 2024 | Six months ended June 30, 2023 | |||||||||||
(Dollars in millions) | Net Sales | Operating | Operating | Net Sales | Operating | Operating | ||||||
MedSurg | $ 2,281 | $ 435 | 19.1 % | $ 2,284 | $ 522 | 22.8 % | ||||||
Dental Solutions | 666 | 200 | 30.0 | 692 | 235 | 34.0 | ||||||
Health Information Systems | 645 | 212 | 32.9 | 632 | 190 | 30.1 | ||||||
Purification and Filtration | 483 | 58 | 12.0 | 479 | 86 | 17.9 | ||||||
Total business segment operating income | $ 905 | $ 1,033 | ||||||||||
Corporate and Unallocated: | ||||||||||||
Amortization expense | $ (173) | $ (184) | ||||||||||
Other Corporate and Unallocated | (107) | (67) | ||||||||||
Total Corporate and Unallocated | 22 | (280) | NM | — | (251) | NM | ||||||
Total Company | $ 4,097 | $ 625 | 15.3 % | $ 4,087 | $ 782 | 19.1 % |
Solventum Corporation
SUPPLEMENTAL FINANCIAL INFORMATION
NON-GAAP MEASURES
(Unaudited)
In addition to reporting financial results in accordance with
There are limitations to the use of the non-GAAP financial measures presented in this information statement. These non-GAAP financial measures are not prepared in accordance with
The tables below reconcile our non-GAAP financial measures to the nearest financial measure that is in accordance with
Adjusted Operating Income, Adjusted Operating Income Margin and Adjusted Earnings Per Share (Non-GAAP measures)
Adjusted operating income and adjusted operating income margin are not defined under
Adjusted earnings per share is not defined under
Solventum Corporation SUPPLEMENTAL FINANCIAL INFORMATION NON-GAAP MEASURES – (CONTINUED)* (Unaudited) | ||||||||||||||||||||||
Three months ended June 30, 2024 | ||||||||||||||||||||||
(Dollars in millions, | Net sales | Cost of | Gross | Operating | Operating | Operating | Non- | Income | Net Income | Diluted | Effective | |||||||||||
GAAP | $ 944 | 54.6 % | $ 244 | 11.7 % | $ 148 | $ 96 | $ 89 | $ 0.51 | 7.3 % | |||||||||||||
Non-GAAP Adjustments: | ||||||||||||||||||||||
Amortization of | — | — | — | (86) | 86 | 4.1 | — | 86 | 72 | 0.41 | ||||||||||||
Restructuring costs (a) | — | (3) | 0.2 | (3) | 3 | 0.2 | — | 3 | 2 | 0.01 | ||||||||||||
Spin-off and | — | (21) | 1.0 | (97) | 97 | 4.7 | (26) | 123 | 104 | 0.61 | ||||||||||||
Legal entity | — | — | — | — | — | — | — | — | 4 | 0.02 | ||||||||||||
Non-GAAP | $ 920 | 55.8 % | $ 430 | 20.7 % | $ 122 | $ 308 | $ 271 | $ 1.56 | 12.2 % |
Three months ended June 30, 2023 | ||||||||||||||||||||||
(Dollars in millions, | Net sales | Cost of | Gross | Operating | Operating | Operating | Non- | Income | Net Income | Diluted | Effective | |||||||||||
GAAP | $ 887 | 57.3 % | $ 417 | 20.1 % | $ 4 | $ 413 | $ 321 | $ 1.86 | 22.3 % | |||||||||||||
Non-GAAP Adjustments: | ||||||||||||||||||||||
Amortization of | — | — | (92) | 92 | 4.4 | — | 92 | 77 | 0.45 | |||||||||||||
Restructuring costs (a) | — | (10) | 0.5 | (30) | 30 | 1.5 | — | 30 | 24 | 0.13 | ||||||||||||
Non-GAAP | $ 877 | 57.8 % | $ 539 | 26.0 % | $ 4 | $ 535 | $ 422 | $ 2.44 | 21.1 % |
__________________ |
*Data in the schedule above is intentionally rounded to the nearest million and, therefore, may not sum. |
(a) Consists of severance associated with restructuring programs. |
(b) Consists of costs specifically incurred in connection with the separation from 3M. |
(c) Consists of tax impacts for legal entity restructuring in connection with the separation from 3M. |
6Cost of sales is the combination of cost of product and cost of software and rental line items from the Condensed Consolidated and Combined Statements of Income and represents the total company cost of sales. |
7 Non-operating expense (income), net is the combination of interest expense, net and other expense (income), net line items from the Condensed Consolidated and Combined Statements of Income and represents the total company non-operating expense. |
Solventum Corporation SUPPLEMENTAL FINANCIAL INFORMATION NON-GAAP MEASURES – (CONTINUED)* (Unaudited) | ||||||||||||||||||||||
Six months ended June 30, 2024 | ||||||||||||||||||||||
(Dollars in millions, | Net sales | Cost of | Gross | Operating | Operating | Operating | Non- | Income | Net Income | Diluted | Effective | |||||||||||
GAAP | 56.4 % | $ 625 | 15.3 % | $ 200 | $ 425 | $ 326 | $ 1.88 | 23.3 % | ||||||||||||||
Non-GAAP Adjustments: | ||||||||||||||||||||||
Amortization of | — | — | — | (173) | 173 | 4.2 | — | 173 | 145 | 0.84 | ||||||||||||
Restructuring costs (a) | — | (4) | 0.1 | (12) | 12 | 0.3 | — | 12 | 8 | 0.05 | ||||||||||||
Spin-off and | — | (21) | 0.5 | (104) | 104 | 2.5 | (38) | 142 | 120 | 0.69 | ||||||||||||
Legal entity | — | — | — | — | — | — | — | — | 31 | 0.18 | ||||||||||||
Non-GAAP | 57.0 % | $ 914 | 22.3 % | $ 162 | $ 752 | $ 630 | $ 3.64 | 16.2 % |
Six months ended June 30, 2023 | ||||||||||||||||||||||
(Dollars in millions, | Net sales | Cost of | Gross | Operating | Operating | Operating | Non- | Income | Net Income | Diluted | Effective | |||||||||||
GAAP | 56.9 % | $ 782 | 19.1 % | $ 6 | $ 776 | $ 614 | $ 3.56 | 20.9 % | ||||||||||||||
Non-GAAP Adjustments: | ||||||||||||||||||||||
Amortization of | — | — | (184) | 184 | 4.5 | — | 184 | 154 | 0.89 | |||||||||||||
Restructuring costs (a) | — | (11) | 0.3 | (39) | 39 | 1.0 | — | 39 | 32 | 0.18 | ||||||||||||
Non-GAAP | 57.2 % | 24.6 % | $ 6 | $ 999 | $ 800 | $ 4.63 | 19.9 % |
__________________ |
*Data in the schedule above is intentionally rounded to the nearest million and, therefore, may not sum. |
(a) Consists of severance associated with restructuring programs. |
(b) Consists of costs specifically incurred in connection with the separation from 3M. |
(c) Consists of tax impacts for legal entity restructuring in connection with the separation from 3M. |
6Cost of sales is the combination of cost of product and cost of software and rental line items from the Condensed Consolidated and Combined Statements of Income and represents the total company cost of sales. |
7 Non-operating expense (income), net is the combination of interest expense, net and other expense (income), net line items from the Condensed Consolidated and Combined Statements of Income and represents the total company non-operating expense. |
Solventum Corporation
SUPPLEMENTAL FINANCIAL INFORMATION
NON-GAAP MEASURES – (CONTINUED)*
(Unaudited)
Free Cash Flow (non-GAAP measure):
Free cash flow is not defined under
(Dollars in millions) | Three months ended June 30, | Six months ended June 30, | ||||||
Major GAAP Cash Flow Categories | 2024 | 2023 | 2024 | 2023 | ||||
Net cash provided by operating activities | $ 355 | $ 366 | $ 797 | $ 875 | ||||
Net cash used in investing activities | (58) | (71) | (160) | (136) | ||||
Net cash provided by (used in) financing activities | (396) | (299) | 66 | (761) | ||||
Free Cash Flow (non-GAAP measure) | ||||||||
Net cash provided by operating activities | $ 355 | $ 366 | 797 | 875 | ||||
Purchases of property, plant and equipment | (58) | (71) | (160) | (136) | ||||
Free cash flow* | $ 297 | $ 295 | 637 | 739 |
__________________ |
* Non-GAAP financial measure. |
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SOURCE Solventum
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