Thermon Reports Fourth Quarter Fiscal 2024 Results
Thermon (NYSE: THR) announced its Q4 and Fiscal 2024 results, reporting record annual revenue of $494.6 million, up 12%, driven by diversified end markets and decarbonization projects. Q4 revenue grew 4% to $127.7 million. GAAP EPS rose by 26% to $0.29 in Q4, with a net income increase of 31% to $10.1 million. However, Adjusted EPS fell by 17% to $0.34. Annual net income increased by 53% to $51.6 million, and Adjusted EBITDA rose 12% to $104.2 million. Fiscal 2025 revenue is projected between $527 million and $553 million, with GAAP EPS of $1.57-$1.73 and Adjusted EPS of $1.90-$2.06. Thermon maintained a strong balance sheet with $141.3 million in liquidity, though net debt-to-adjusted EBITDA increased to 1.2x. The company completed the acquisition of Vapor Power and exited its Russian operations. Key challenges include a 12% drop in Q4 bookings and a gross margin contraction by 110 basis points.
- Record annual revenue of $494.6 million, up 12%
- Q4 revenue increased 4% to $127.7 million
- Annual GAAP EPS up 52% to $1.51
- Q4 GAAP EPS up 26% to $0.29
- Annual net income increased 53% to $51.6 million
- Annual Adjusted EBITDA up 12% to $104.2 million
- Liquidity of $141.3 million, including $48.6 million in cash
- Successful acquisition of Vapor Power
- Completed exit from Russian operations
- Q4 Adjusted EPS fell by 17% to $0.34
- Q4 Adjusted EBITDA decreased 6% to $23.6 million
- Gross margin contracted by 110 basis points in Q4
- Q4 bookings dropped by 12% to $117 million
- Net debt-to-Adjusted EBITDA ratio increased to 1.2x
- Organic Q4 sales decreased by $5.7 million or 5%
Insights
Thermon's fiscal 2024 results demonstrate a strong growth trajectory, highlighted by an increase in revenue of
However, the decrease in Adjusted EBITDA by
Investors should consider the increase in gross margin by 80 basis points over the fiscal year, which is indicative of improved operational efficiencies. Yet, the gross margin contraction of 110 basis points in Q4 suggests some near-term pressures possibly due to the integration of Vapor Power and other strategic expenditures. The guidance for
Thermon's emphasis on diversified end markets, now comprising 68% of total revenue, is a significant strategic move that reduces dependence on the oil and gas sector. This shift is beneficial given the growing environmental regulations and the push towards sustainable energy solutions. The acquisition of Vapor Power, which added
Additionally, the company's proactive steps in digital transformation through the Genesis Network for heat trace system controls is a progressive move. It not only enhances operational efficiencies but also opens up new revenue streams from IoT-based services. As the industrial process heating market evolves, such innovations will likely provide Thermon with a competitive edge.
Despite these positive developments, the 12% drop in orders and cautious market outlook expressed by the management should be closely watched. It might imply that while the strategic shifts are promising, market adoption and external economic factors could introduce volatility in the short term.
- Record Revenue, Adjusted EBITDA, and Adjusted EPS for Fiscal 2024
- Grew Revenue from Diversified End Markets to
68% of Total Revenue in Fiscal 2024 - Introducing Fiscal 2025 Revenue Guidance of
$527 million -$553 million
AUSTIN, TX / ACCESSWIRE / May 29, 2024 / Thermon Group Holdings, Inc. (NYSE:THR) ("Thermon"), a global leader in industrial process heating solutions, today announced consolidated financial results for the fourth quarter ("Q4 2024") of the fiscal year ended March 31, 2024 ("Fiscal 2024"). Key highlights for Q42024 as compared to the three months ended March 31, 2023 ("Q42023") include:
- Produced record revenue of
$127.7 million , an increase of4% , driven by sales growth across diversified end markets and decarbonization projects - Realized fully diluted GAAP earnings per share ("EPS") of
$0.29 , an increase of26% , driven by higher volume and pricing, and non-GAAP Adjusted EPS of$0.34 , a decline of17% - Generated net income of
$10.1 million , an increase of31% and Adjusted EBITDA of$23.6 million , a decrease of6% , driven by planned investment to support long-term strategy - Achieved gross profit of
$52.4 million , an increase of2% and gross margin of41.0% , compared to42.1% , a contraction of approximately 110 basis points - Delivered bookings of
$117.0 million , a contraction of12% , with73% of orders in diversified end markets, and a book-to-bill ratio of 0.92x
Key highlights for Fiscal 2024 as compared to the twelve months ended March 31, 2023 ("Fiscal 2023") include:
- Produced record revenue of
$494.6 million , an increase of12% , driven by diversified end markets and decarbonization projects - Realized fully diluted GAAP EPS of
$1.51 , an increase of52% , and record non-GAAP adjusted EPS of$1.82 , an increase of17% , largely driven by higher volume - Generated net income of
$51.6 million , an increase of53% , and record Adjusted EBITDA of$104.2 million , an increase of12% - Achieved gross profit of
$211.6 million , an increase of14% , and gross margin of42.8% , as compared to42.0% , an expansion of approximately 80 basis points due to improved margins on over-time sales - Delivered bookings of
$472.1 million , an expansion of3% , with72% of orders in diversified end markets, and a book-to-bill ratio of 0.95x
"By successfully executing our strategy, the Thermon team delivered outstanding results in Fiscal 2024, including record revenue, Adjusted EBITDA, and Adjusted EPS," said Bruce Thames, President and CEO. "In line with our disciplined capital allocation strategy, we deployed our strong balance sheet to acquire Vapor Power, an innovative company specializing in electric- and gas-fired boilers, in the fourth quarter. We made significant progress on our end market diversification strategy, with revenue from non-oil and gas end markets comprising
Financial Highlights | Three Months Ended March 31, | Twelve Months Ended March 31, | ||||||||||||||||||||||
Unaudited, in millions, except per share data | 2024 | 2023 | % Change | 2024 | 2023 | % Change | ||||||||||||||||||
Sales 1 | $ | 127.7 | $ | 122.5 | 4.2 | % | $ | 494.6 | $ | 440.6 | 12.3 | % | ||||||||||||
Point-in-Time | 86.0 | 77.8 | 10.5 | % | 300.6 | 277.3 | 8.4 | % | ||||||||||||||||
Over Time - Small Projects | 18.3 | 18.8 | (2.7 | )% | 74.5 | 65.4 | 13.9 | % | ||||||||||||||||
Over Time - Large Projects | 23.4 | 25.9 | (9.7 | )% | 119.6 | 97.9 | 22.2 | % | ||||||||||||||||
Net Income | 10.1 | 7.7 | 31.2 | % | 51.6 | 33.7 | 53.2 | % | ||||||||||||||||
GAAP EPS | 0.29 | 0.23 | 26.1 | % | 1.51 | 1.00 | 51.8 | % | ||||||||||||||||
Adjusted Net Income 2 | 11.6 | 14.0 | (17.1 | )% | 61.9 | 52.8 | 17.3 | % | ||||||||||||||||
Adjusted EPS 2 | 0.34 | 0.41 | (17.1 | )% | 1.82 | 1.56 | 16.5 | % | ||||||||||||||||
Adjusted EBITDA3 | 23.6 | 25.1 | (6.0 | )% | 104.2 | 93.3 | 11.7 | % | ||||||||||||||||
% of Sales: | ||||||||||||||||||||||||
Point in Time | 67.3 | % | 63.5 | % | 380 bps | 60.8 | % | 62.9 | % | -210 bps | ||||||||||||||
Over Time - Small Projects | 14.3 | % | 15.3 | % | -100 bps | 15.1 | % | 14.8 | % | 30 bps | ||||||||||||||
Over Time - Large Projects | 18.3 | % | 21.1 | % | -280 bps | 24.2 | % | 22.2 | % | 200 bps | ||||||||||||||
Net Income | 7.9 | % | 6.3 | % | 160 bps | 10.4 | % | 7.6 | % | 280 bps | ||||||||||||||
Adjusted Net Income 2 | 9.1 | % | 11.4 | % | -230 bps | 12.5 | % | 12.0 | % | 50 bps | ||||||||||||||
Adjusted EBITDA 3 | 18.5 | % | 20.5 | % | -200 bps | 21.1 | % | 21.2 | % | -10 bps | ||||||||||||||
1 Over Time sales were previously reported as a single figure and are now presented as Over Time - Small Projects and Over Time - Large Projects. Over Time - Small Projects are each less than
2 Adjusted net income represents net Income (Loss) after the impact of acquisition costs, restructuring, costs associated with impairments and other charges, amortization of intangible assets and the tax expense/(benefit) for impact of foreign rate increases (see table, "Reconciliation of Net Income to Adjusted Net Income and Adjusted EPS").
3 See table, "Reconciliation of Net Income to Adjusted EBITDA."
Sales attributable to the recent Vapor Power acquisition were
Backlog was
Balance Sheet, Liquidity and Cash Flow
Thermon maintained a strong and flexible balance sheet during Q4 2024. The Net Debt-to-Adjusted EBITDA ratio increased to 1.2x from 0.8x in the prior year period and decreased by 0.3x compared to Q3 2024. The sequential reduction was due to the repayment of
Working capital increased by
The Company's withdrawal from its operations in the Russian Federation through a disposition of its Russian subsidiary (the "Russia Exit") was completed in the fourth quarter of Fiscal 2024 following the receipt of all requisite regulatory approvals.
| Balance Sheet Highlights | Three Months Ended March 31, | |||||||||||
Unaudited, in millions, except ratio | 2024 | 2023 | % Change | |||||||||
Cash and Cash Equivalents | $ | 48.6 | $ | 35.6 | 36.5 | % | ||||||
Total Debt | 172.5 | 112.9 | 52.8 | % | ||||||||
Net Debt1 / TTM Adjusted EBITDA | 1.2 | x | 0.8 | x | 0.4 | x | ||||||
Working Capital 2 | 162.2 | 152.4 | 6.4 | % | ||||||||
Capital Expenditures | 3.1 | 4.3 | (27.9 | )% | ||||||||
Free Cash Flow 3 | 35.1 | 21.9 | 60.3 | % | ||||||||
1 Total company debt, net of cash and cash equivalents.
2 Working Capital equals Accounts Receivable plus Inventory less Accounts Payable.
3 See table, Reconciliation of Cash Provided by Operating Activities to Free Cash Flow.
Fiscal 2025 Outlook
Greg Lucas, Thermon's Vice President, Corporate Controller, added, "For the coming fiscal year ending March 31, 2025 ("Fiscal 2025"), we expect our customers to remain cautious with respect to large capital projects under the current macroeconomic backdrop. Nonetheless, we are optimistic about our ability to deliver revenue and earnings growth in Fiscal 2025 as we continue to execute our strategy and improve our cost structure through operational efficiency. We anticipate revenue to be in the range of approximately
Conference Call and Webcast Information
Thermon's senior management team, including Bruce Thames, President and Chief Executive Officer, and Greg Lucas, Vice President, Corporate Controller, will discuss Q4 2024 results during a conference call today, May 29, 2024 at 10:00 a.m. (Central Time). The call will be simultaneously webcast and the accompanying slide presentation containing financial information can be accessed on Thermon's investor relations website located at http://ir.thermon.com. Investment community professionals interested in participating in the question-and-answer session may access the call by dialing (877) 407-5976 from within the United States/Canada and (412) 902-0031 from outside of the United States/Canada. A replay of the webcast will be available on Thermon's investor relations website after the conclusion of the call.
About Thermon
Through its global network, Thermon provides safe, reliable and mission critical industrial process heating solutions. Thermon specializes in providing complete flow assurance, process heating, temperature maintenance, freeze protection and environmental monitoring solutions. Thermon is headquartered in Austin, Texas. For more information, please visit www.thermon.com.
Non-GAAP Financial Measures
Disclosure in this release of "Adjusted EPS," "Adjusted EBITDA," "Adjusted EBITDA margin," "Adjusted Net Income/(Loss)," "Free Cash Flow," "Organic Sales" and "Net Debt," which are "non-GAAP financial measures" as defined under the rules of the Securities and Exchange Commission (the "SEC"), are intended as supplemental measures of our financial performance that are not required by, or presented in accordance with, U.S. generally accepted accounting principles ("GAAP"). "Adjusted Net Income/(Loss)" and "Adjusted EPS" (or "Adjusted fully diluted EPS") represent net income/(loss) before the impact of restructuring and other charges/(income), costs associated with impairments and other charges, acquisition costs, amortization of intangible assets, tax expense for impact of foreign rate increases, and any tax effect of such adjustments. "Adjusted EBITDA" represents net income/(loss) before interest expense (net of interest income), income tax expense, depreciation and amortization expense, stock-based compensation expense, acquisition costs and costs associated with restructuring and other income/(charges), costs associated with impairments and other charges. "Adjusted EBITDA margin" represents Adjusted EBITDA as a percentage of total revenue. "Free Cash Flow" represents cash provided by operating activities less cash used for the purchase of property, plant, and equipment, net of sales of rental equipment and proceeds from sales of land and buildings. "Organic Sales" represents revenue excluding the impact of the Company's December 29, 2023, acquisition of Vapor Power. "Net Debt" represents total outstanding principal debt less cash and cash equivalents on hand.
We believe these non-GAAP financial measures are meaningful to our investors to enhance their understanding of our financial performance and are frequently used by securities analysts, investors and other interested parties to compare our performance with the performance of other companies that report Adjusted EPS, Adjusted EBITDA, Adjusted EBITDA margin or Adjusted Net Income/(Loss). Adjusted EPS, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income/(Loss) Free Cash Flow and Organic Sales should be considered in addition to, and not as substitutes for, income from operations, net income/(loss), net income/(loss) per share, revenue and other measures of financial performance reported in accordance with GAAP. We provide Free Cash Flow as a measure of liquidity. Our calculation of Adjusted EPS, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income/(Loss) and Free Cash Flow may not be comparable to similarly titled measures reported by other companies. For a description of how Adjusted EPS, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income/(Loss) and Free Cash Flow are calculated and reconciliations to the corresponding GAAP measures, see the sections of this release titled "Reconciliation of Net Income/(Loss) to Adjusted EBITDA," "Reconciliation of Net Income/(Loss) to Adjusted Net Income/(Loss) and Adjusted EPS" and "Reconciliation of Cash Provided by Operating Activities to Free Cash Flow." We are unable to reconcile projected Fiscal 2025 Adjusted EPS to the most directly comparable projected GAAP financial measure because certain information necessary to calculate such measures on a GAAP basis is unavailable or dependent on the timing of future events outside of our control. Therefore, because of the uncertainty and variability of the nature of and the amount of any potential applicable future adjustments, which could be significant, we are unable to provide a reconciliation for projected Fiscal 2025 Adjusted EPS without unreasonable effort.
Forward-Looking Statements
This release includes forward-looking statements within the meaning of the U.S. federal securities laws in addition to historical information. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, statements regarding our industry, business strategy, plans, goals and expectations concerning our market position, future operations, margins, profitability, capital expenditures, liquidity and capital resources and other financial and operating information such as the anticipated financial performance of our Vapor Power acquisition, our execution of our strategic initiatives, and our ability to achieve our financial performance targets for Fiscal 2026 and our Fiscal 2025 full-year guidance. When used herein, the words "anticipate," "assume," "believe," "budget," "continue," "contemplate," "could," "should" "estimate," "expect," "intend," "may," "plan," "possible," "potential," "predict," "project," "will," "would," "future," and similar terms and phrases are intended to identify forward-looking statements in this release. Forward-looking statements reflect our current expectations regarding future events, results or outcomes. These expectations may or may not be realized. Some of these expectations may be based upon assumptions, data or judgments that prove to be incorrect. In addition, our business and operations involve numerous risks and uncertainties, many of which are beyond our control, which could result in our expectations not being realized or otherwise materially affect our financial condition, results of operations and cash flows.
Actual events, results and outcomes may differ materially from our expectations due to a variety of factors. Although it is not possible to identify all of these factors, they include, among others, (i) general economic conditions and cyclicality in the markets we serve; (ii) future growth of our key end markets and related capital investments; (iii) our ability to operate successfully in foreign countries; (iv) the outbreak of a global pandemic, including COVID-19 and its variants; (v) our ability to successfully develop and improve our products and successfully implement new technologies; (vi) competition from various other sources providing similar heat tracing and process heating products and services, or alternative technologies, to customers; (vii) our ability to deliver existing orders within our backlog; (viii) our ability to bid and win new contracts; (ix) the imposition of certain operating and financial restrictions contained in our debt agreements; (x) our revenue mix; (xi) our ability to grow through strategic acquisitions; (xii) our ability to manage risk through insurance against potential liabilities (xiii) changes in relevant currency exchange rates; (xiv) tax liabilities and changes to tax policy; (xv) impairment of goodwill and other intangible assets; (xvi) our ability to attract and retain qualified management and employees, particularly in our overseas markets; (xvii) our ability to protect our trade secrets; (xviii) our ability to protect our intellectual property; (xix) our ability to protect data and thwart potential cyber-attacks; (xx) a material disruption at any of our manufacturing facilities; (xxi) our dependence on subcontractors and third-party suppliers; (xxii) our ability to profit on fixed-price contracts; (xxiii) the credit risk associated to our extension of credit to customers; (xxiv) our ability to achieve our operational initiatives; (xxv) unforeseen difficulties with expansions, relocations, or consolidations of existing facilities; (xxvi) potential liability related to our products as well as the delivery of products and services; (xxvii) our ability to comply with foreign anti-corruption laws; (xxviii) export control regulations or sanctions; (xxix) changes in government administrative policy; (xxx) environmental and health and safety laws and regulations as well as environmental liabilities; (xxxi) climate change and related regulation of greenhouse gases and (xxxii) those factors listed under Item 1A "Risk Factors" included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2024, which we anticipate filing with the Securities and Exchange Commission (the "SEC") on May 29, 2024, and in any subsequent Quarterly Reports on Form 10-Q, Current Reports on Form 8-K or other filings that we have filed or may file with the SEC. Any one of these factors or a combination of these factors could materially affect our future results of operations and could influence whether any forward-looking statements contained in this release ultimately prove to be accurate.
Our forward-looking statements are not guarantees of future performance, and actual results and future performance may differ materially from those suggested in any forward-looking statements. We do not intend to update these statements unless we are required to do so under applicable securities laws.
CONTACT:
Greg Lucas, Vice President, Corporate Controller
Ivonne Salem, Vice President, FP&A and Investor Relations
(512) 690-0600
Investor.Relations@thermon.com
| Thermon Group Holdings, Inc. Consolidated Statements of Operations (Unaudited, in thousands except per share data) | ||||||||||||||||
| Three Months Ended March 31, | Twelve Months Ended March 31, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
Sales | $ | 127,654 | $ | 122,481 | $ | 494,629 | $ | 440,590 | ||||||||
Cost of sales | 75,267 | 70,957 | 283,065 | 255,465 | ||||||||||||
Gross profit | 52,387 | 51,524 | 211,564 | 185,125 | ||||||||||||
Operating expenses: | ||||||||||||||||
Selling, general and administrative expenses | 32,823 | 33,957 | 123,820 | 117,003 | ||||||||||||
Deferred compensation plan expense/(income) | 554 | 291 | 1,231 | (208 | ) | |||||||||||
Amortization of intangible assets | 3,423 | 2,375 | 10,158 | 9,447 | ||||||||||||
Restructuring and other charges/(income) | (1,237 | ) | 1,025 | 984 | 3,693 | |||||||||||
Income from operations | 16,824 | 13,876 | 75,371 | 55,190 | ||||||||||||
Other income/(expenses): | ||||||||||||||||
Interest expense, net | (3,582 | ) | (1,751 | ) | (8,845 | ) | (5,871 | ) | ||||||||
Other income/(expense) | 421 | 506 | 1,148 | (86 | ) | |||||||||||
Income before provision for taxes | 13,663 | 12,631 | 67,674 | 49,233 | ||||||||||||
Income tax expense/(benefit) | 3,580 | 4,930 | 16,086 | 15,567 | ||||||||||||
Net income | $ | 10,083 | $ | 7,701 | $ | 51,588 | $ | 33,666 | ||||||||
Net income/(loss) per common share: | ||||||||||||||||
Basic income per share | $ | 0.30 | $ | 0.23 | $ | 1.53 | $ | 1.01 | ||||||||
Diluted income per share | $ | 0.29 | $ | 0.23 | $ | 1.51 | $ | 1.00 | ||||||||
Weighted-average shares used in computing net income/(loss) per common share: | ||||||||||||||||
Basic common shares | 33,723 | 33,505 | 33,671 | 33,469 | ||||||||||||
Fully-diluted common shares | 34,239 | 33,980 | 34,067 | 33,746 | ||||||||||||
| Thermon Group Holdings, Inc. Consolidated Balance Sheets (Unaudited, in thousands, except share and per share data) | |||||||||
| March 31, 2024 | March 31, 2023 | ||||||||
Assets | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 48,631 | $ | 35,635 | |||||
Accounts receivable, net of allowances of | 107,318 | 97,627 | |||||||
Inventories, net | 86,321 | 82,132 | |||||||
Contract assets | 16,690 | 16,272 | |||||||
Prepaid expenses and other current assets | 14,010 | 16,138 | |||||||
Income tax receivable | 1,630 | 3,138 | |||||||
Total current assets | 274,600 | 250,942 | |||||||
Property, plant and equipment, net of depreciation and amortization of | 68,335 | 63,288 | |||||||
Goodwill | 270,786 | 219,612 | |||||||
Intangible assets, net | 127,092 | 93,970 | |||||||
Operating lease right-of-use assets | 13,613 | 13,570 | |||||||
Deferred income taxes | 1,074 | 688 | |||||||
Other non-current assets | 12,240 | 7,559 | |||||||
Total assets | $ | 767,740 | $ | 649,629 | |||||
Liabilities and equity | |||||||||
Current liabilities: | |||||||||
Accounts payable | 31,396 | 27,330 | |||||||
Accrued liabilities | 31,624 | 39,364 | |||||||
Current portion of long-term debt | 14,625 | 10,222 | |||||||
Borrowings under revolving credit facility | 5,000 | 14,500 | |||||||
Contract liabilities | 20,531 | 8,483 | |||||||
Lease liabilities | 3,273 | 3,364 | |||||||
Income taxes payable | 2,820 | 6,809 | |||||||
Total current liabilities | $ | 109,269 | $ | 110,072 | |||||
Long-term debt, net of current maturities and deferred debt issuance costs and debt discounts of | 151,957 | 87,710 | |||||||
Deferred income taxes | 9,439 | 12,084 | |||||||
Non-current lease liabilities | 12,635 | 12,479 | |||||||
Other non-current liabilities | 9,553 | 8,296 | |||||||
Total liabilities | $ | 292,853 | $ | 230,641 | |||||
Equity | |||||||||
Common stock: $.001 par value; 150,000,000 authorized; 33,730,243 and 33,722,225 shares issued and outstanding at March 31, 2024 and March 31, 2023, respectively | $ | 34 | $ | 33 | |||||
Preferred stock: $.001 par value; 10,000,000 authorized; no shares issued and outstanding | - | - | |||||||
Additional paid in capital | 243,555 | 239,860 | |||||||
Treasury stock, common stock, at cost; 8,018 and zero shares at March 31, 2024 and 2023, respectively | (250 | ) | - | ||||||
Accumulated other comprehensive loss | (57,235 | ) | (58,100 | ) | |||||
Retained earnings | 288,783 | 237,195 | |||||||
Total equity | $ | 474,887 | $ | 418,988 | |||||
Total liabilities and equity | $ | 767,740 | $ | 649,629 | |||||
| Thermon Group Holdings, Inc. Consolidated Statements of Cash Flows (Unaudited, in thousands) | |||||||||||||
| Twelve Months Ended March 31, | |||||||||||||
| 2024 | 2023 | 2022 | |||||||||||
Operating activities | |||||||||||||
Net income/(loss) | $ | 51,588 | $ | 33,666 | $ | 20,092 | |||||||
Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities: | |||||||||||||
Depreciation and amortization | 18,837 | 19,231 | 20,205 | ||||||||||
Amortization of debt costs | 489 | 317 | 596 | ||||||||||
Loss on extinguishment of debt | - | - | 2,569 | ||||||||||
Impairment of property, plant and equipment | - | 298 | - | ||||||||||
Stock compensation expense | 5,754 | 5,954 | 3,803 | ||||||||||
Deferred income taxes | (2,079 | ) | (4,562 | ) | (1,648 | ) | |||||||
Reserve for uncertain tax positions, net | 84 | 36 | 77 | ||||||||||
(Gain)/Loss on long-term cross currency swap | - | - | (774 | ) | |||||||||
Remeasurement (gain)/loss on intercompany balances | (784 | ) | (914 | ) | (247 | ) | |||||||
Loss on sale of business, net of cash surrendered | - | - | 306 | ||||||||||
Changes in operating assets and liabilities: | |||||||||||||
Accounts receivable | (540 | ) | (2,912 | ) | (21,739 | ) | |||||||
Inventories | 3,778 | (8,839 | ) | (8,598 | ) | ||||||||
Contract assets | (101 | ) | 4,051 | (3,292 | ) | ||||||||
Other current and non-current assets | (4,935 | ) | 57 | (2,891 | ) | ||||||||
Accounts payable | 2,707 | (7,119 | ) | 13,752 | |||||||||
Accrued liabilities and non-current liabilities | (6,355 | ) | 11,147 | 2,227 | |||||||||
Income taxes payable and receivable | (2,488 | ) | 7,303 | $ | 4,316 | ||||||||
Net cash provided by/(used in) operating activities | $ | 65,955 | $ | 57,714 | $ | 28,754 | |||||||
Investing activities | |||||||||||||
Purchases of property, plant and equipment | (11,016 | ) | (9,453 | ) | (5,220 | ) | |||||||
Sale of rental equipment | 99 | 197 | 689 | ||||||||||
Proceeds from sale of property, plant and equipment | 840 | - | - | ||||||||||
Proceeds from disposal of business | 1,027 | - | - | ||||||||||
Cash paid for acquisitions, net of cash acquired | (100,472 | ) | (35,299 | ) | - | ||||||||
Net cash provided by/(used in) in investing activities | $ | (109,522 | ) | $ | (44,555 | ) | $ | (4,531 | ) | ||||
Financing activities | |||||||||||||
Proceeds from Term Loan A | 100,000 | - | 139,793 | ||||||||||
Payments on Term Loan A | (30,872 | ) | (27,180 | ) | (170,780 | ) | |||||||
Proceeds from revolving credit facility | 18,000 | 34,500 | 18,459 | ||||||||||
Payments on revolving credit facility | (27,500 | ) | (20,000 | ) | (8,134 | ) | |||||||
Issuance costs associated with debt financing | (759 | ) | - | (1,265 | ) | ||||||||
Lease financing | (28 | ) | (142 | ) | (155 | ) | |||||||
Issuance of common stock including exercise of stock options | - | - | 97 | ||||||||||
Repurchase of treasury shares under authorized program | (250 | ) | - | - | |||||||||
Repurchase of employee stock units on vesting | (2,058 | ) | (643 | ) | (673 | ) | |||||||
Net cash provided by/(used in) financing activities | $ | 56,533 | $ | (13,465 | ) | $ | (22,658 | ) | |||||
Less: Net change in cash balances classified as assets held-for-sale | - | (3,939 | ) | - | |||||||||
Effect of exchange rate changes on cash and cash equivalents | (1,055 | ) | (1,166 | ) | (84 | ) | |||||||
Change in cash and cash equivalents | $ | 11,911 | $ | (5,411 | ) | $ | 1,481 | ||||||
Cash, cash equivalents and restricted cash at beginning of period | 38,520 | 43,931 | 42,450 | ||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | 50,431 | $ | 38,520 | $ | 43,931 | |||||||
| Thermon Group Holdings, Inc. Reconciliation of Net Income/(Loss) to Adjusted EBITDA (Unaudited, in thousands) | |||||||||||||||||
| Three Months Ended March 31, | Twelve Months Ended March 31, | ||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||
GAAP Net income/(loss) | $ | 10,083 | $ | 7,701 | $ | 51,588 | $ | 33,666 | |||||||||
Interest expense, net | 3,582 | 1,751 | 8,845 | 5,871 | |||||||||||||
Income tax expense/(benefit) | 3,580 | 4,930 | 16,086 | 15,567 | |||||||||||||
Depreciation and amortization expense | 5,762 | 4,674 | 18,837 | 19,231 | |||||||||||||
EBITDA (non-GAAP) | $ | 23,007 | $ | 19,056 | $ | 95,356 | $ | 74,335 | |||||||||
Stock compensation expense | 1,622 | 1,516 | 5,754 | 5,954 | |||||||||||||
Transaction-related costs | 248 | 209 | 2,107 | 335 | |||||||||||||
Restructuring and other charges/(income) 1 | (1,237 | ) | 1,025 | 984 | 3,693 | ||||||||||||
Other impairment charges/(income) 1 | - | 3,279 | - | 8,945 | |||||||||||||
Adjusted EBITDA (non-GAAP) | $ | 23,640 | $ | 25,085 | $ | 104,201 | $ | 93,262 | |||||||||
Adjusted EBITDA % | 18.5 | % | 20.5 | % | 21.1 | % | 21.2 | % | |||||||||
1 Charges related to the Russia Exit
| Thermon Group Holdings, Inc. Reconciliation of Net Income/(Loss) to Adjusted Net Income/(Loss) and Adjusted EPS (Unaudited, in thousands except per share amounts) | |||||||||||||||||
| Three Months Ended March 31, | Twelve Months Ended March 31, | ||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||
GAAP Net income/(loss) | $ | 10,083 | $ | 7,701 | $ | 51,588 | $ | 33,666 | |||||||||
Transaction-related costs | 248 | 209 | 2,107 | 335 | Operating expense | ||||||||||||
Amortization of intangible assets | 3,423 | 2,375 | 10,158 | 9,447 | Intangible amortization | ||||||||||||
Restructuring and other charges/(income) 1 | (1,237 | ) | 1,025 | 984 | 3,693 | Operating expense | |||||||||||
Impairments and other charges/(income) 1 | - | 3,279 | - | 8,945 | Cost of Sales and Operating expense | ||||||||||||
Tax effect of adjustments | (881 | ) | (598 | ) | (2,947 | ) | (3,307 | ) | |||||||||
Adjusted Net Income/(Loss) (non-GAAP) | $ | 11,636 | $ | 13,991 | $ | 61,890 | $ | 52,779 | |||||||||
Adjusted Fully Diluted Earnings per Common Share (Adjusted EPS) (non-GAAP) | $ | 0.34 | $ | 0.41 | $ | 1.82 | $ | 1.56 | |||||||||
Fully-diluted common shares | 34,239 | 33,980 | 34,067 | 33,746 | |||||||||||||
1 Charges related to the Russia Exit
| Thermon Group Holdings, Inc. Reconciliation of Cash Provided by Operating Activities to Free Cash Flow (Unaudited, in thousands) | |||||||||||||||||
| Three Months Ended March 31, | Twelve Months Ended March 31, | ||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||
Cash provided by/(used in) by operating activities | $ | 37,367 | $ | 26,109 | $ | 65,955 | $ | 57,714 | |||||||||
Cash provided by/(used in) by investing activities | (1,243 | ) | (4,246 | ) | (109,522 | ) | (44,555 | ) | |||||||||
Cash provided by/(used in) by financing activities | (41,005 | ) | (20,194 | ) | 56,533 | (13,465 | ) | ||||||||||
Cash provided by operating activities | $ | 37,367 | $ | 26,109 | $ | 65,955 | $ | 57,714 | |||||||||
Less: Cash used for purchases of property, plant and equipment | (3,134 | ) | (4,280 | ) | (11,016 | ) | (9,453 | ) | |||||||||
Plus: Sales of rental equipment | 24 | 34 | 99 | 197 | |||||||||||||
Free cash flow provided (non-GAAP) | $ | 35,097 | $ | 21,863 | $ | 55,878 | $ | 48,458 | |||||||||
SOURCE: Thermon Group Holdings, Inc.
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