Sensata Technologies Reports Third Quarter 2023 Financial Results
- Sensata's adjusted earnings per share increased by 7.1% in Q3 2023.
- Sensata generated $138.9 million of operating cash flow in Q3 2023.
- For the nine months ended September 30, 2023, revenue increased by 1.6%.
- Operating income decreased by 54.0% in Q3 2023.
- Earnings per share decreased by 54.9% in Q3 2023.
- Operating income decreased by 26.0% for the nine months ended September 30, 2023.
"Sensata's results in the third quarter were in line with our guidance and reflect our commitment to deliver as we transition with our customers to widespread Electrification. Sensata remains on track to achieve its long-term growth goals, including scaling its Electrification business to
Operating Results - Third Quarter
Operating results for the third quarter of 2023 compared to the third quarter of 2022 are summarized below. These results include non-GAAP financial measures, each of which is defined and reconciled to the most directly comparable GAAP measure later in this press release.
Revenue:
-
Revenue was
$1,001.3 million $17.0 million 1.7% ), compared to$1,018.3 million
-
Revenue decreased (
0.7% ) on an organic basis, which excludes a decrease of (1.0% ) from foreign currency exchange rates versus the prior year period.
Operating income:
-
Operating income was
$116.3 million 11.6% of revenue, a decrease of$136.6 million 54.0% ), compared to operating income of$252.9 million 24.8% of revenue, in the third quarter of 2022. The third quarter of 2022 included a one-time gain of$135.1 million
-
Adjusted operating income was
$191.6 million 19.1% of revenue (20.3% on a constant currency basis), a decrease of$5.7 million 2.9% ), compared to adjusted operating income of$197.3 million 19.4% of revenue, in the third quarter of 2022.
Earnings per share:
-
Earnings per share was
$0.41 $0.50 54.9% ), compared to earnings per share of$0.91
-
Adjusted earnings per share was
$0.91 $0.06 7.1% ($0.99 16.5% on a constant currency basis), compared to adjusted earnings per share of$0.85
Sensata generated
During the third quarter of 2023, Sensata returned approximately
Operating Results - Nine Months
Operating results for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 are summarized below. These results include non-GAAP financial measures, each of which is defined and reconciled to the most directly comparable GAAP measure later in this press release.
Revenue:
-
Revenue was
$3,061.6 million $47.0 million 1.6% , compared to$3,014.6 million
-
Revenue increased
2.4% on an organic basis, which excludes a decrease of (1.5% ) from foreign currency exchange rates and an increase of0.7% from acquisitions, net of divestitures, each versus the prior year.
Operating income:
-
Operating income was
$383.1 million 12.5% of revenue, a decrease of$134.7 million 26.0% ), compared to operating income of$517.8 million 17.2% of revenue, in the nine months ended September 30, 2022. The nine months ended September 30, 2022 included a one-time gain of$135.1 million
-
Adjusted operating income was
$590.3 million 19.3% of revenue (19.9% on a constant currency basis), an increase of$16.7 million 2.9% , compared to adjusted operating income of$573.6 million 19.0% of revenue, in the nine months ended September 30, 2022.
Earnings per share:
-
Earnings per share was
$1.30 $0.04 3.2% , compared to earnings per share of$1.26
-
Adjusted earnings per share was
$2.80 $0.35 14.3% ($2.97 21.2% on a constant currency basis), compared to adjusted earnings per share of$2.45
Sensata generated
During the first nine months of 2023, Sensata repaid its variable rate Term Loan, returned approximately
Segment Performance
|
|
For the three months ended
|
|
For the nine months ended
|
||||||||||||
$ in 000s |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Performance Sensing (1) |
|
|
|
|
|
|
|
|
||||||||
Revenue |
|
$ |
753,988 |
|
|
$ |
739,449 |
|
|
$ |
2,249,700 |
|
|
$ |
2,173,789 |
|
Operating income |
|
$ |
186,006 |
|
|
$ |
181,931 |
|
|
$ |
559,893 |
|
|
$ |
535,438 |
|
% of Performance Sensing revenue |
|
|
24.7 |
% |
|
|
24.6 |
% |
|
|
24.9 |
% |
|
|
24.6 |
% |
|
|
|
|
|
|
|
|
|
||||||||
Sensing Solutions (1) |
|
|
|
|
|
|
|
|
||||||||
Revenue |
|
$ |
247,314 |
|
|
$ |
278,819 |
|
|
$ |
811,889 |
|
|
$ |
840,797 |
|
Operating income |
|
$ |
71,345 |
|
|
$ |
80,251 |
|
|
$ |
230,813 |
|
|
$ |
244,904 |
|
% of Sensing Solutions revenue |
|
|
28.8 |
% |
|
|
28.8 |
% |
|
|
28.4 |
% |
|
|
29.1 |
% |
(1) |
Effective April 1, 2023, we reorganized our reportable segments to move material handling products from Performance Sensing to Sensing Solutions to align with new management reporting. Prior year amounts have been reclassified |
Guidance
"We are adjusting our fourth quarter guidance to reflect updated third party estimates for automotive production in the quarter due to the UAW strike. While the strike's impact is likely temporary, its impact on our results may vary from current expectations," said Paul Vasington, EVP and CFO of Sensata. "For the fourth quarter of 2023, we now expect revenue of
Q4-2023 Guidance |
|
|
|
$ in millions, except EPS |
Q4-23 Guidance |
Q4-22 |
Y/Y Change |
Revenue |
|
|
( |
organic growth |
|
|
( |
Adjusted Operating Income |
|
|
( |
Adjusted Net Income |
|
|
( |
Adjusted EPS |
|
|
( |
Versus the prior year period, Sensata expects that changes in foreign currency exchange rates will decrease revenue by approximately
CFO Transition
Separately today, Sensata announced that Paul Vasington, EVP and CFO, has decided to retire and will be stepping down from these roles following the publication of the third quarter 10-Q in early November, and that Brian Roberts has been appointed to begin serving as EVP and CFO of Sensata as of that date. Mr. Vasington will remain an advisor to Sensata until April 2024 to ensure a smooth transition.
Conference Call and Webcast
Sensata will conduct a conference call today at 8:00 a.m. Eastern Time to discuss its third quarter 2023 financial results and its outlook for the fourth quarter of 2023. The dial-in numbers for the call are 1-844-784-1726 or 1-412-380-7411. Callers should reference the "Sensata Q3 2023 Financial Results Conference Call." A live webcast of the conference call will also be available on the investor relations page of Sensata’s website at http://investors.sensata.com. Additionally, a replay of the call will be available until November 7, 2023. To access the replay, dial 1-877-344-7529 or 1-412-317-0088 and enter confirmation code: 1055825.
About Sensata Technologies
Sensata Technologies is a leading industrial technology company that develops sensors, sensor-based solutions, including controllers and software, and other mission-critical products to create valuable business insights for customers and end users. For more than 100 years, Sensata has provided a wide range of customized, sensor-rich solutions that address complex engineering requirements to help customers solve difficult challenges in the automotive, heavy vehicle & off-road, industrial, and aerospace industries. With approximately 21,000 employees and operations in 16 countries, Sensata’s solutions help to make products safer, cleaner and more efficient, more electrified, and more connected. For more information, please visit Sensata’s website at www.sensata.com.
Non-GAAP Financial Measures
We supplement the reporting of our financial information determined in accordance with
Non-GAAP financial measures should be considered as supplemental in nature and are not meant to be considered in isolation or as a substitute for the related financial information prepared in accordance with
The non-GAAP financial measures referenced by Sensata in this release include: adjusted net income, adjusted earnings per share (“EPS”), adjusted operating income, adjusted operating margin, free cash flow, organic revenue growth, market outgrowth, adjusted earnings before interest, taxes, depreciation and amortization ("EBITDA"), net debt, and net leverage ratio. We also refer to changes in certain non-GAAP measures, usually reported either as a percentage or number of basis points, between two periods. Such changes are also considered non-GAAP measures.
Adjusted net income (or loss) is defined as net income (or loss), determined in accordance with
Adjusted operating income (or loss) is defined as operating income (or loss), determined in accordance with
Free cash flow is defined as net cash provided by/(used in) operating activities less additions to property, plant and equipment and capitalized software. We believe that this measure is useful to investors and management as a measure of cash generated by business operations that will be used to repay scheduled debt maturities and can be used to fund acquisitions, repurchase ordinary shares, or for the accelerated repayment of debt obligations.
Organic revenue growth (or decline) is defined as the reported percentage change in net revenue calculated in accordance with
Adjusted EBITDA is defined as net income (or loss), determined in accordance with
Net debt is defined as total debt, finance lease, and other financing obligations less cash and cash equivalents. We believe net debt is a useful measure to management and investors in understanding trends in our overall financial condition.
Net leverage ratio is defined as net debt divided by last twelve months (LTM) adjusted EBITDA. We believe the net leverage ratio is a useful measure to management and investors in understanding trends in our overall financial condition.
In discussing trends in our performance, we may refer to certain non-GAAP financial measures or the percentage change of certain non-GAAP financial measures in one period versus another, calculated on a constant currency basis. Constant currency is determined by stating revenues and expenses at prior period foreign currency exchange rates and excludes the impact of foreign currency exchange rates on all hedges and, as applicable, net monetary assets. We believe these measures are useful to investors and management in understanding our ongoing operations and in analysis of ongoing operating trends.
Safe Harbor Statement
This earnings release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by terminology such as "may," "will," "could," "should," "expect," "anticipate," "believe," "estimate," "predict," "project," "forecast," "continue," "intend," "plan," "potential," "opportunity," "guidance," and similar terms or phrases. Forward-looking statements involve, among other things, expectations, projections, and assumptions about future financial and operating results, objectives, business and market outlook, megatrends, priorities, growth, shareholder value, capital expenditures, cash flows, demand for products and services, share repurchases, and Sensata’s strategic initiatives, including those relating to acquisitions and dispositions and the impact of such transactions on our strategic and operational plans and financial results. These statements are subject to risks, uncertainties, and other important factors relating to our operations and business environment, and we can give no assurances that these forward-looking statements will prove to be correct.
A wide variety of potential risks, uncertainties, and other factors could materially affect our ability to achieve the results either expressed or implied by these forward-looking statements, including, but not limited to, risks related to public health crises, instability and changes in the global markets, supplier interruption or non-performance, the acquisition or disposition of businesses, adverse conditions or competition in the industries upon which we are dependent, intellectual property, product liability, warranty, and recall claims, market acceptance of new product introductions and product innovations, labor disruptions or increased labor costs, and changes in existing environmental or safety laws, regulations, and programs.
Investors and others should carefully consider the foregoing factors and other uncertainties, risks, and potential events including, but not limited to, those described in Item 1A: Risk Factors in our most recent Annual Report on Form 10-K and as may be updated from time to time in Item 1A: Risk Factors in our quarterly reports on Form 10-Q or other subsequent filings with the United States Securities and Exchange Commission. All such forward-looking statements speak only as of the date they are made, and we do not undertake any obligation to update these statements other than as required by law.
SENSATA TECHNOLOGIES HOLDING PLC
|
||||||||||||||||
|
For the three months ended
|
|
For the nine months ended
|
|||||||||||||
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net revenue |
|
$ |
1,001,302 |
|
|
$ |
1,018,268 |
|
|
$ |
3,061,589 |
|
|
$ |
3,014,586 |
|
Operating costs and expenses: |
|
|
|
|
|
|
|
|
||||||||
Cost of revenue |
|
|
687,959 |
|
|
|
694,535 |
|
|
|
2,090,538 |
|
|
|
2,038,218 |
|
Research and development |
|
|
45,448 |
|
|
|
47,947 |
|
|
|
136,244 |
|
|
|
141,898 |
|
Selling, general and administrative |
|
|
85,661 |
|
|
|
90,013 |
|
|
|
263,123 |
|
|
|
283,022 |
|
Amortization of intangible assets |
|
|
39,970 |
|
|
|
40,313 |
|
|
|
135,307 |
|
|
|
114,485 |
|
Restructuring and other charges, net |
|
|
26,004 |
|
|
|
(107,441 |
) |
|
|
53,262 |
|
|
|
(80,811 |
) |
Total operating costs and expenses |
|
|
885,042 |
|
|
|
765,367 |
|
|
|
2,678,474 |
|
|
|
2,496,812 |
|
Operating income |
|
|
116,260 |
|
|
|
252,901 |
|
|
|
383,115 |
|
|
|
517,774 |
|
Interest expense, net |
|
|
(36,908 |
) |
|
|
(44,856 |
) |
|
|
(115,104 |
) |
|
|
(135,143 |
) |
Other, net |
|
|
1,317 |
|
|
|
(21,371 |
) |
|
|
(8,215 |
) |
|
|
(111,067 |
) |
Income before taxes |
|
|
80,669 |
|
|
|
186,674 |
|
|
|
259,796 |
|
|
|
271,564 |
|
Provision for income taxes |
|
|
17,868 |
|
|
|
46,421 |
|
|
|
61,467 |
|
|
|
74,029 |
|
Net income |
|
$ |
62,801 |
|
|
$ |
140,253 |
|
|
$ |
198,329 |
|
|
$ |
197,535 |
|
|
|
|
|
|
|
|
|
|
||||||||
Net income per share: |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
$ |
0.41 |
|
|
$ |
0.91 |
|
|
$ |
1.30 |
|
|
$ |
1.27 |
|
Diluted |
|
$ |
0.41 |
|
|
$ |
0.91 |
|
|
$ |
1.30 |
|
|
$ |
1.26 |
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average ordinary shares outstanding: |
|
|
|
|
|
|
||||||||||
Basic |
|
|
152,046 |
|
|
|
154,474 |
|
|
|
152,421 |
|
|
|
156,124 |
|
Diluted |
|
|
152,379 |
|
|
|
154,943 |
|
|
|
152,922 |
|
|
156,855 |
||
SENSATA TECHNOLOGIES HOLDING PLC
|
||||||
|
September 30,
|
|
December 31,
|
|||
Assets |
|
|
|
|
||
Current assets: |
|
|
|
|
||
Cash and cash equivalents |
|
$ |
889,703 |
|
$ |
1,225,518 |
Accounts receivable, net of allowances |
|
|
766,835 |
|
|
742,382 |
Inventories |
|
|
683,646 |
|
|
644,875 |
Prepaid expenses and other current assets |
|
|
152,981 |
|
|
162,268 |
Total current assets |
|
|
2,493,165 |
|
|
2,775,043 |
Property, plant and equipment, net |
|
|
874,126 |
|
|
840,819 |
Goodwill |
|
|
3,864,490 |
|
|
3,911,224 |
Other intangible assets, net |
|
|
921,444 |
|
|
999,722 |
Deferred income tax assets |
|
|
93,858 |
|
|
100,539 |
Other assets |
|
|
141,252 |
|
|
128,873 |
Total assets |
|
$ |
8,388,335 |
|
$ |
8,756,220 |
|
|
|
|
|
||
Liabilities and shareholders' equity |
|
|
|
|
||
Current liabilities: |
|
|
|
|
||
Current portion of long-term debt, finance lease and other financing obligations |
|
$ |
1,888 |
|
$ |
256,471 |
Accounts payable |
|
|
515,095 |
|
|
531,572 |
Income taxes payable |
|
|
28,399 |
|
|
43,987 |
Accrued expenses and other current liabilities |
|
|
327,291 |
|
|
346,942 |
Total current liabilities |
|
|
872,673 |
|
|
1,178,972 |
Deferred income tax liabilities |
|
|
389,551 |
|
|
364,593 |
Pension and other post-retirement benefit obligations |
|
|
39,131 |
|
|
36,086 |
Finance lease and other financing obligations, less current portion |
|
|
23,456 |
|
|
24,742 |
Long-term debt, net |
|
|
3,771,810 |
|
|
3,958,928 |
Other long-term liabilities |
|
|
66,533 |
|
|
82,092 |
Total liabilities |
|
|
5,163,154 |
|
|
5,645,413 |
Total shareholders' equity |
|
|
3,225,181 |
|
|
3,110,807 |
Total liabilities and shareholders' equity |
|
$ |
8,388,335 |
|
$ |
8,756,220 |
SENSATA TECHNOLOGIES HOLDING PLC
|
||||||||
|
For the nine months ended
|
|||||||
|
|
|
2023 |
|
|
|
2022 |
|
Cash flows from operating activities: |
|
|
|
|
||||
Net income |
|
$ |
198,329 |
|
|
$ |
197,535 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
||||
Depreciation |
|
|
96,877 |
|
|
|
94,562 |
|
Amortization of debt issuance costs |
|
|
5,110 |
|
|
|
5,256 |
|
Gain on sale of business |
|
|
(5,877 |
) |
|
|
(135,112 |
) |
Share-based compensation |
|
|
24,454 |
|
|
|
24,180 |
|
Loss on debt financing |
|
|
857 |
|
|
|
5,468 |
|
Amortization of intangible assets |
|
|
135,307 |
|
|
|
114,485 |
|
Deferred income taxes |
|
|
12,323 |
|
|
|
3,313 |
|
Loss on equity investments, net |
|
|
678 |
|
|
|
75,135 |
|
Unrealized loss on derivative instruments and other |
|
|
15,712 |
|
|
|
40,702 |
|
Changes in operating assets and liabilities, net of effects of acquisitions |
|
|
(109,573 |
) |
|
|
(166,291 |
) |
Acquisition-related compensation payments |
|
|
(22,620 |
) |
|
|
(23,500 |
) |
Net cash provided by operating activities |
|
|
351,577 |
|
|
|
235,733 |
|
|
|
|
|
|
||||
Cash flows from investing activities: |
|
|
|
|
||||
Acquisitions, net of cash received |
|
|
— |
|
|
|
(632,683 |
) |
Additions to property, plant and equipment and capitalized software |
|
|
(136,224 |
) |
|
|
(110,424 |
) |
Investment in debt and equity securities |
|
|
(390 |
) |
|
|
(7,773 |
) |
Proceeds from the sale of business, net of cash sold |
|
|
19,000 |
|
|
|
198,841 |
|
Other |
|
|
— |
|
|
|
152 |
|
Net cash used in investing activities |
|
|
(117,614 |
) |
|
|
(551,887 |
) |
|
|
|
|
|
||||
Cash flows from financing activities: |
|
|
|
|
||||
Proceeds from exercise of stock options and issuance of ordinary shares |
|
|
5,346 |
|
|
|
16,460 |
|
Payment of employee restricted stock tax withholdings |
|
|
(12,067 |
) |
|
|
(7,834 |
) |
Payments on debt |
|
|
(448,640 |
) |
|
|
(507,968 |
) |
Dividends paid |
|
|
(53,380 |
) |
|
|
(34,271 |
) |
Payments to repurchase ordinary shares |
|
|
(60,290 |
) |
|
|
(241,903 |
) |
Payments of debt financing costs |
|
|
(747 |
) |
|
|
(13,369 |
) |
Net cash used in financing activities |
|
|
(569,778 |
) |
|
|
(288,885 |
) |
Net change in cash and cash equivalents |
|
|
(335,815 |
) |
|
|
(605,039 |
) |
Cash and cash equivalents, beginning of period |
|
|
1,225,518 |
|
|
|
1,708,955 |
|
Cash and cash equivalents, end of period |
|
$ |
889,703 |
|
|
$ |
1,103,916 |
|
Revenue by Business, Geography, and End Market (Unaudited)
(percent of total revenue) |
|
For the three months
|
|
For the nine months
|
||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Performance Sensing (1) |
|
75.3 % |
|
72.6 % |
|
73.5 % |
|
72.1 % |
Sensing Solutions (1) |
|
24.7 % |
|
27.4 % |
|
26.5 % |
|
27.9 % |
Total |
|
100.0 % |
|
100.0 % |
|
100.0 % |
|
100.0 % |
(percent of total revenue) |
|
For the three months
|
|
For the nine months
|
||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
45.3 % |
|
43.8 % |
|
45.6 % |
|
41.9 % |
|
|
25.6 % |
|
25.9 % |
|
26.5 % |
|
26.1 % |
|
|
29.1 % |
|
30.3 % |
|
27.9 % |
|
32.0 % |
Total |
|
100.0 % |
|
100.0 % |
|
100.0 % |
|
100.0 % |
(percent of total revenue) |
|
For the three months
|
|
For the nine months
|
||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Automotive (2) |
|
55.8 % |
|
52.4 % |
|
53.0 % |
|
51.8 % |
Heavy vehicle and off-road (1) |
|
20.5 % |
|
21.0 % |
|
21.4 % |
|
21.3 % |
Industrial (1) |
|
13.0 % |
|
16.0 % |
|
15.1 % |
|
14.2 % |
Appliance and HVAC |
|
4.8 % |
|
5.1 % |
|
4.8 % |
|
5.6 % |
Aerospace |
|
4.9 % |
|
3.7 % |
|
4.6 % |
|
3.6 % |
All other |
|
1.0 % |
|
1.8 % |
|
1.1 % |
|
3.5 % |
Total |
|
100.0 % |
|
100.0 % |
|
100.0 % |
|
100.0 % |
| (1) | Effective April 1, 2023, we reorganized our structure to move material handling products from the Performance Sensing reportable segment to the Sensing Solutions reportable segment to align with new management reporting. Accordingly, material handling revenue, which has historically been presented in the HVOR end-market, is now presented in the Industrial end-market. Prior period amounts for revenue by business and end market have been reclassified above. |
|
| (2) |
Includes amounts reflected in the Sensing Solutions segment as follows: |
|
Market Outgrowth (Unaudited)
|
|
For the three months ended |
|
For the nine months ended |
||||||||
|
|
September 30, 2023 |
|
September 30, 2023 |
||||||||
|
|
Reported
|
|
Organic
|
|
End Market
|
|
Reported
|
|
Organic
|
|
End Market
|
Sensata |
|
( |
|
( |
|
( |
|
|
|
|
|
|
Market outgrowth, or organic revenue growth less end market growth, can be lumpy during individual quarters due to timing of customer production launches, channel inventory, customer or platform mix, and changes in market share. For the last twelve months, market outgrowth is estimated to have been 460 bps and 660 bps for the past three years.
GAAP to Non-GAAP Reconciliations
The following unaudited tables provide a reconciliation of the difference between each of the non-GAAP financial measures referenced herein and the most directly comparable
Operating income and margin, income tax, net income, and earnings per share
($ in thousands, except per share amounts) |
For the three months ended September 30, 2023 |
|||||||||||||||||
|
Operating
|
|
Operating
|
|
Income
|
|
Net
|
|
Diluted
|
|||||||||
Reported (GAAP) |
$ |
116,260 |
|
|
11.6 |
% |
|
$ |
17,868 |
|
|
$ |
62,801 |
|
|
$ |
0.41 |
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|||||||||
Restructuring related and other (1) |
|
31,549 |
|
|
3.2 |
% |
|
|
(1,363 |
) |
|
|
30,186 |
|
|
|
0.20 |
|
Financing and other transaction costs |
|
5,662 |
|
|
0.6 |
% |
|
|
— |
|
|
|
6,038 |
|
|
|
0.04 |
|
Step-up depreciation and amortization |
|
38,825 |
|
|
3.9 |
% |
|
|
— |
|
|
|
38,825 |
|
|
|
0.25 |
|
Deferred gain on derivative instruments |
|
(663 |
) |
|
(0.1 |
%) |
|
|
39 |
|
|
|
(148 |
) |
|
|
0.00 |
|
Amortization of debt issuance costs |
|
— |
|
|
— |
% |
|
|
— |
|
|
|
1,688 |
|
|
|
0.01 |
|
Deferred taxes and other tax related |
|
— |
|
|
— |
% |
|
|
(1,122 |
) |
|
|
(1,122 |
) |
|
|
(0.01 |
) |
Total adjustments |
|
75,373 |
|
|
7.5 |
% |
|
|
(2,446 |
) |
|
|
75,467 |
|
|
|
0.50 |
|
Adjusted (non-GAAP) |
$ |
191,633 |
|
|
19.1 |
% |
|
$ |
20,314 |
|
|
$ |
138,268 |
|
|
$ |
0.91 |
|
(1) |
Includes |
|
($ in thousands, except per share amounts) |
For the three months ended September 30, 2022 |
|||||||||||||||||
|
Operating
|
|
Operating
|
|
Income
|
|
Net
|
|
Diluted
|
|||||||||
Reported (GAAP) |
$ |
252,901 |
|
|
24.8 |
% |
|
$ |
46,421 |
|
|
$ |
140,253 |
|
|
$ |
0.91 |
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|||||||||
Restructuring related and other |
|
16,394 |
|
|
1.6 |
% |
|
|
(427 |
) |
|
|
15,967 |
|
|
|
0.10 |
|
Financing and other transaction costs (1) |
|
(110,883 |
) |
|
(10.9 |
%) |
|
|
3,761 |
|
|
|
(97,619 |
) |
|
|
(0.63 |
) |
Step-up depreciation and amortization |
|
39,001 |
|
|
3.8 |
% |
|
|
— |
|
|
|
39,001 |
|
|
|
0.25 |
|
Deferred (gain)/loss on derivative instruments |
|
(102 |
) |
|
0.0 |
% |
|
|
(1,170 |
) |
|
|
4,501 |
|
|
|
0.03 |
|
Amortization of debt issuance costs |
|
— |
|
|
— |
% |
|
|
— |
|
|
|
1,823 |
|
|
|
0.01 |
|
Deferred taxes and other tax related |
|
— |
|
|
— |
% |
|
|
27,121 |
|
|
|
27,121 |
|
|
|
0.18 |
|
Total adjustments |
|
(55,590 |
) |
|
(5.5 |
%) |
|
|
29,285 |
|
|
|
(9,206 |
) |
|
|
(0.06 |
) |
Adjusted (non-GAAP) |
$ |
197,311 |
|
|
19.4 |
% |
|
$ |
17,136 |
|
|
$ |
131,047 |
|
|
$ |
0.85 |
|
(1) |
Includes a gain of |
|
($ in thousands, except per share amounts) |
For the nine months ended September 30, 2023 |
|||||||||||||||
|
Operating
|
|
Operating
|
|
Income
|
|
Net
|
|
Diluted
|
|||||||
Reported (GAAP) |
$ |
383,115 |
|
|
12.5 |
% |
|
$ |
61,467 |
|
|
$ |
198,329 |
|
$ |
1.30 |
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|||||||
Restructuring related and other (1) |
|
65,568 |
|
|
2.1 |
% |
|
|
(2,667 |
) |
|
|
62,901 |
|
|
0.41 |
Financing and other transaction costs |
|
14,175 |
|
|
0.5 |
% |
|
|
2,776 |
|
|
|
17,568 |
|
|
0.11 |
Step-up depreciation and amortization (2) |
|
131,281 |
|
|
4.3 |
% |
|
|
— |
|
|
|
131,281 |
|
|
0.86 |
Deferred (gain)/loss on derivative instruments |
|
(3,860 |
) |
|
(0.1 |
%) |
|
|
(198 |
) |
|
|
788 |
|
|
0.01 |
Amortization of debt issuance costs |
|
— |
|
|
— |
% |
|
|
— |
|
|
|
5,107 |
|
|
0.03 |
Deferred taxes and other tax related |
|
— |
|
|
— |
% |
|
|
12,102 |
|
|
|
12,102 |
|
|
0.08 |
Total adjustments |
|
207,164 |
|
|
6.8 |
% |
|
|
12,013 |
|
|
|
229,747 |
|
|
1.50 |
Adjusted (non-GAAP) |
$ |
590,279 |
|
|
19.3 |
% |
|
$ |
49,454 |
|
|
$ |
428,076 |
|
$ |
2.80 |
| (1) |
Includes |
|
| (2) |
Includes |
|
($ in thousands, except per share amounts) |
For the nine months ended September 30, 2022 |
|||||||||||||||
|
Operating
|
|
Operating
|
|
Income
|
|
Net
|
|
Diluted
|
|||||||
Reported (GAAP) |
$ |
517,774 |
|
|
17.2 |
% |
|
$ |
74,029 |
|
|
$ |
197,535 |
|
$ |
1.26 |
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|||||||
Restructuring related and other |
|
24,431 |
|
|
0.8 |
% |
|
|
(563 |
) |
|
|
24,310 |
|
|
0.15 |
Financing and other transaction costs (1) |
|
(80,624 |
) |
|
(2.7 |
%) |
|
|
2,767 |
|
|
|
5,218 |
|
|
0.03 |
Step-up depreciation and amortization |
|
110,264 |
|
|
3.7 |
% |
|
|
— |
|
|
|
110,264 |
|
|
0.70 |
Deferred loss on derivative instruments |
|
1,740 |
|
|
0.1 |
% |
|
|
(3,372 |
) |
|
|
12,971 |
|
|
0.08 |
Amortization of debt issuance costs |
|
— |
|
|
— |
% |
|
|
— |
|
|
|
5,256 |
|
|
0.03 |
Deferred taxes and other tax related (2) |
|
— |
|
|
— |
% |
|
|
28,455 |
|
|
|
28,455 |
|
|
0.18 |
Total adjustments |
|
55,811 |
|
|
1.9 |
% |
|
|
27,287 |
|
|
|
186,474 |
|
|
1.19 |
Adjusted (non-GAAP) |
$ |
573,585 |
|
|
19.0 |
% |
|
$ |
46,742 |
|
|
$ |
384,009 |
|
$ |
2.45 |
| (1) |
Includes gains on the sale of the Qinex Business in the third quarter of 2022 and changes in the fair value of acquisition-related contingent consideration amounts of |
|
| (2) |
Includes |
|
Non-GAAP adjustments by location in statements of operations
(in thousands) |
For the three months
|
|
|
For the nine months
|
|||||||||||||
|
|
2023 |
|
|
|
|
2022 |
|
|
|
|
2023 |
|
|
|
2022 |
|
Cost of revenue (1) |
$ |
7,208 |
|
|
|
$ |
8,687 |
|
|
|
$ |
15,572 |
|
|
$ |
12,062 |
|
Selling, general and administrative |
|
3,727 |
|
|
|
|
4,461 |
|
|
|
|
7,749 |
|
|
|
15,191 |
|
Amortization of intangible assets (2) |
|
38,434 |
|
|
|
|
38,703 |
|
|
|
|
130,581 |
|
|
|
109,369 |
|
Restructuring and other charges, net (3) |
|
26,004 |
|
|
|
|
(107,441 |
) |
|
|
|
53,262 |
|
|
|
(80,811 |
) |
Operating income adjustments |
|
75,373 |
|
|
|
|
(55,590 |
) |
|
|
|
207,164 |
|
|
|
55,811 |
|
Interest expense, net |
|
1,688 |
|
|
|
|
1,823 |
|
|
|
|
5,107 |
|
|
|
5,256 |
|
Other, net (4) |
|
852 |
|
|
|
|
15,276 |
|
|
|
|
5,463 |
|
|
|
98,120 |
|
Provision for income taxes (5) |
|
(2,446 |
) |
|
|
|
29,285 |
|
|
|
|
12,013 |
|
|
|
27,287 |
|
Net income adjustments |
$ |
75,467 |
|
|
|
$ |
(9,206 |
) |
|
|
$ |
229,747 |
|
|
$ |
186,474 |
|
| (1) |
The three and nine months ended September 30, 2023 include a charge of |
|
| (2) |
The nine months ended September 30, 2023 includes |
|
| (3) |
The three and nine months ended September 30, 2023 include |
|
| (4) |
The three and nine months ended September 30, 2022 include a mark-to-market loss on our equity investments, primarily in Quanergy Systems, Inc, of |
|
| (5) |
The nine months ended September 30, 2022 includes |
|
Free cash flow
|
|
For the three months
|
|
For the nine months
|
||||||||||||||||||
($ in thousands) |
|
|
2023 |
|
|
|
2022 |
|
|
% △ |
|
|
2023 |
|
|
|
2022 |
|
|
% △ |
||
Net cash provided by operating activities |
|
$ |
138,935 |
|
|
$ |
93,845 |
|
|
48.0 |
% |
|
$ |
351,577 |
|
|
$ |
235,733 |
|
|
49.1 |
% |
Additions to property, plant and equipment and capitalized software |
|
|
(51,780 |
) |
|
|
(36,355 |
) |
|
(42.4 |
%) |
|
|
(136,224 |
) |
|
|
(110,424 |
) |
|
(23.4 |
%) |
Free cash flow |
|
$ |
87,155 |
|
|
$ |
57,490 |
|
|
51.6 |
% |
|
$ |
215,353 |
|
|
$ |
125,309 |
|
|
71.9 |
% |
Adjusted corporate and other expenses
|
|
For the three months
|
|
For the nine months
|
||||||||||||
(in thousands) |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Corporate and other expenses (GAAP) |
|
$ |
(75,117 |
) |
|
$ |
(76,409 |
) |
|
$ |
(219,022 |
) |
|
$ |
(228,894 |
) |
Restructuring related and other |
|
|
9,234 |
|
|
|
7,964 |
|
|
|
20,915 |
|
|
|
13,125 |
|
Financing and other transaction costs |
|
|
1,973 |
|
|
|
4,988 |
|
|
|
5,566 |
|
|
|
11,493 |
|
Step-up depreciation and amortization |
|
|
391 |
|
|
|
298 |
|
|
|
700 |
|
|
|
895 |
|
Deferred (gain)/loss on derivative instruments |
|
|
(663 |
) |
|
|
(102 |
) |
|
|
(3,860 |
) |
|
|
1,740 |
|
Total adjustments |
|
|
10,935 |
|
|
|
13,148 |
|
|
|
23,321 |
|
|
|
27,253 |
|
Adjusted corporate and other expenses (non-GAAP) |
|
$ |
(64,182 |
) |
|
$ |
(63,261 |
) |
|
$ |
(195,701 |
) |
|
$ |
(201,641 |
) |
Adjusted EBITDA
|
|
|
|
For the three months
|
|
For the nine months
|
||||||||||||
(in thousands) |
|
LTM |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
2022 |
||
Net income |
|
$ |
311,479 |
|
|
$ |
62,801 |
|
|
$ |
140,253 |
|
|
$ |
198,329 |
|
$ |
197,535 |
Interest expense, net |
|
|
158,780 |
|
|
|
36,908 |
|
|
|
44,856 |
|
|
|
115,104 |
|
|
135,143 |
Provision for income taxes |
|
|
73,455 |
|
|
|
17,868 |
|
|
|
46,421 |
|
|
|
61,467 |
|
|
74,029 |
Depreciation expense |
|
|
129,499 |
|
|
|
33,317 |
|
|
|
31,680 |
|
|
|
96,877 |
|
|
94,562 |
Amortization of intangible assets |
|
|
174,609 |
|
|
|
39,970 |
|
|
|
40,313 |
|
|
|
135,307 |
|
|
114,485 |
EBITDA |
|
|
847,822 |
|
|
|
190,864 |
|
|
|
303,523 |
|
|
|
607,084 |
|
|
615,754 |
Non-GAAP Adjustments |
|
|
|
|
|
|
|
|
|
|
||||||||
Restructuring related and other |
|
|
78,708 |
|
|
|
31,549 |
|
|
|
16,394 |
|
|
|
65,568 |
|
|
24,873 |
Financing and other transaction costs |
|
|
19,845 |
|
|
|
6,038 |
|
|
|
(101,380 |
) |
|
|
14,792 |
|
|
2,451 |
Deferred (gain)/loss on derivative instruments |
|
|
(13,480 |
) |
|
|
(187 |
) |
|
|
5,671 |
|
|
|
986 |
|
|
16,343 |
Adjusted EBITDA |
|
$ |
932,895 |
|
|
$ |
228,264 |
|
|
$ |
224,208 |
|
|
$ |
688,430 |
|
$ |
659,421 |
Net debt and leverage
|
|
As of |
||||||
($ in thousands) |
|
September 30,
|
|
December 31,
|
||||
Current portion of long-term debt, finance lease and other financing obligations |
|
$ |
1,888 |
|
|
$ |
256,471 |
|
Finance lease and other financing obligations, less current portion |
|
|
23,456 |
|
|
|
24,742 |
|
Long-term debt, net |
|
|
3,771,810 |
|
|
|
3,958,928 |
|
Total debt, finance lease, and other financing obligations |
|
|
3,797,154 |
|
|
|
4,240,141 |
|
Less: discount, net of premium |
|
|
(1,994 |
) |
|
|
(3,360 |
) |
Less: deferred financing costs |
|
|
(26,196 |
) |
|
|
(29,916 |
) |
Total gross indebtedness |
|
|
3,825,344 |
|
|
|
4,273,417 |
|
Less: cash and cash equivalents |
|
|
889,703 |
|
|
|
1,225,518 |
|
Net debt |
|
$ |
2,935,641 |
|
|
$ |
3,047,899 |
|
|
|
|
|
|
||||
Adjusted EBITDA (LTM) |
|
$ |
932,895 |
|
|
$ |
903,886 |
|
Net leverage ratio |
|
|
3.1 |
|
|
|
3.4 |
|
Guidance
|
For the three months ending December 31, 2023 |
||||||||||||||||
($ in millions, except per share amounts) |
Operating Income |
|
Net Income |
|
EPS |
||||||||||||
|
Low |
|
High |
|
Low |
|
High |
|
Low |
|
High |
||||||
GAAP |
$ |
132.7 |
|
$ |
146.5 |
|
$ |
70.1 |
|
$ |
80.8 |
|
$ |
0.46 |
|
$ |
0.53 |
Restructuring related and other |
|
2.3 |
|
|
3.5 |
|
|
2.3 |
|
|
3.5 |
|
|
0.02 |
|
|
0.02 |
Financing and other transaction costs |
|
1.0 |
|
|
3.0 |
|
|
1.0 |
|
|
3.0 |
|
|
0.01 |
|
|
0.02 |
Step-up depreciation and amortization |
|
40.0 |
|
|
41.0 |
|
|
40.0 |
|
|
41.0 |
|
|
0.26 |
|
|
0.27 |
Deferred (gain)/loss on derivative instruments(1) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
Amortization of debt issuance costs |
|
— |
|
|
— |
|
|
1.6 |
|
|
1.7 |
|
|
0.01 |
|
|
0.01 |
Deferred taxes and other tax related |
|
— |
|
|
— |
|
|
5.0 |
|
|
6.0 |
|
|
0.03 |
|
|
0.04 |
Non-GAAP |
$ |
176.0 |
|
$ |
194.0 |
|
$ |
120.0 |
|
$ |
136.0 |
|
$ |
0.79 |
|
$ |
0.89 |
Weighted-average diluted shares outstanding (in millions) |
|
|
|
|
|
|
152.0 |
|
|
152.0 |
|||||||
(1) |
We are unable to predict movements in commodity prices and, therefore, the impact of mark-to-market adjustments on our commodity forward contracts to our projected operating results. In prior periods such adjustments have been significant to our reported GAAP earnings. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20231031692472/en/
Investors:
Jacob Sayer
(508) 236-1666
jsayer@sensata.com
Media:
Alexia Taxiarchos
(508) 236-1761
ataxiarchos@sensata.com
Source: Sensata Technologies
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