Thermon Reports Third Quarter Fiscal 2024 Results
- 12% increase in revenue for Q3 2024 compared to Q3 2023
- 88% increase in net income for Q3 2024 compared to Q3 2023
- 86% increase in EPS for Q3 2024 compared to Q3 2023
- Acquisition of Vapor Power to capture share in growing end-markets driven by decarbonization and electrification trends
- Raising FY 2024 revenue and EPS guidance
- Maintaining a strong balance sheet and flexible liquidity
- On track to complete withdrawal from operations in the Russian Federation in Q4 2024
- Decrease in backlog for Q3 2024 compared to Q3 2023
Insights
The reported double-digit growth in revenue, net income and EPS for Thermon Group Holdings, Inc. reflects a robust financial performance, particularly in the context of the industrial process heating solutions industry. The increase in revenue by 12% indicates a steady demand for the company's products, driven by sales in various regions such as US-LAM, Europe and Asia Pacific. This regional diversification is a positive indicator of the company's market penetration and resilience against localized economic fluctuations.
The significant 88% rise in net income and the 86% increase in fully diluted GAAP EPS suggest operational efficiency and effective cost management. The gross margin expansion by approximately 80 basis points, despite the non-recurring charges from the Russia Exit, implies improved profitability which could be attributed to a favorable product mix or cost-saving initiatives. Investors might view the raised FY 2024 revenue and EPS guidance as a sign of management's confidence in the company's continued growth trajectory.
However, the contraction in bookings by 1% and a book-to-bill ratio of 0.91x might raise concerns about future revenue growth sustainability. Additionally, the increase in net debt-to-adjusted EBITDA ratio to 1.5x, although within the target range, may suggest that the company is leveraging to finance its growth, specifically the acquisition of Vapor Power. Such strategic moves towards decarbonization and electrification trends align with broader industry shifts, potentially positioning the company favorably in the long-term.
The industrial process heating solutions sector is experiencing a transformation driven by global trends such as decarbonization and electrification. Thermon's acquisition of Vapor Power aligns with these trends, indicating a strategic move to capture a share in growing diversified end-markets. The mention of decarbonization opportunities contributing over 4% of revenues, with the potential to represent over 20% of the pipeline, suggests Thermon's proactive shift towards future-proofing its product portfolio. This could potentially open up new revenue streams and enhance the company's competitive edge.
Thermon's performance in diversified end markets such as Chemical, Power and Commercial and the growth in revenue from these sectors, underscore the company's adaptability and its ability to leverage cross-sector opportunities. The emphasis on a solid backlog entering the fourth quarter suggests a degree of visibility into future revenues, which is typically a positive indicator for market stability and investor sentiment.
However, the acknowledgment of challenges in mix and timing in the upcoming quarter could imply potential volatility or uncertainty in revenue recognition. This nuanced understanding of the company's position and outlook is crucial for investors assessing the risk and potential of their investments.
The completion of the Russia Exit and the receipt of requisite regulatory approvals in January 2024 represent compliance with international legal and regulatory frameworks. This move may mitigate potential risks associated with operating in politically sensitive regions and align with corporate governance standards that are increasingly scrutinized by investors. The associated one-time charge and its impact on EPS, although relatively small, illustrate the company's transparency in financial reporting.
The legal intricacies of international acquisitions, such as that of Vapor Power, involve due diligence and compliance with various regulations. The successful execution of such a strategic acquisition without negatively impacting the balance sheet significantly is indicative of competent legal and financial planning. This is an aspect that investors may consider when evaluating the company's governance and strategic decision-making capabilities.
Continuing Double-Digit Revenue, Net Income and EPS Growth
Deploying Capital to Drive Inorganic Growth
Raising FY 2024 Revenue and EPS Guidance
AUSTIN, TX / ACCESSWIRE / February 1, 2024 / Thermon Group Holdings, Inc. (NYSE:THR) ("Thermon"), a global leader in industrial process heating solutions, today announced consolidated financial results for the third quarter ("Q3 2024") of the fiscal year ending March 31, 2024 ("Fiscal 2024"). Key highlights for Q3 2024 as compared to the three months ended December 31, 2022 ("Q3 2023") include:
- Produced record revenue of
$136.4 million , an increase of12% , driven by sales growth in US-LAM, Europe and Asia Pacific - Realized fully diluted GAAP earnings per share ("EPS") of
$0.46 and record non-GAAP adjusted EPS of$0.59 , an increase of86% and13% respectively, due to continued growth led by the US-LAM region - Generated net income of
$15.8 million , an increase of88% , and Adjusted EBITDA of$30.7 million , an increase of3% , driven by volume growth and effective cost management - Achieved gross profit of
$57.4 million , an increase of14% , and gross margin of42.1% , as compared to41.3% , an expansion of approximately 80 basis points due to higher volume and non-recurring charges from the Russia Exit in Q3 2023 - Delivered bookings of
$124.4 million , a contraction of1% , with70% of orders in diversified end markets, and a book-to-bill ratio of 0.91x - Closed the acquisition of Vapor Power in December 2023, our strategy to capture share in rapidly growing, diversified end-markets driven by decarbonization and electrification trends
"This was another solid quarter for Thermon, with continued growth in revenue, gross profit, net income and fully diluted GAAP EPS. The results are evidence of the successful execution of our strategy and our ability to operate efficiently and effectively in a dynamic environment," said Bruce Thames, President and CEO. "Earnings per share were up
Financial Highlights | Three Months Ended December 31, | Nine months ended December 31, | ||||||||||||||||||||||
in millions, except per share data | 2023 | 2022 | % Change | 2023 | 2022 | % Change | ||||||||||||||||||
Sales1 | $ | 136.4 | $ | 122.1 | 11.7 | % | $ | 367.0 | $ | 318.1 | 15.4 | % | ||||||||||||
Point-in-Time | 85.5 | 78.4 | 9.1 | % | 223.3 | 199.5 | 11.9 | % | ||||||||||||||||
Over Time - Small Projects | 17.3 | 16.9 | 2.4 | % | 47.5 | 46.7 | 1.7 | % | ||||||||||||||||
Over Time - Large Projects | 33.7 | 26.8 | 25.7 | % | 96.2 | 71.9 | 33.8 | % | ||||||||||||||||
Net Income | 15.8 | 8.4 | 88.0 | % | 41.5 | 26.0 | 59.8 | % | ||||||||||||||||
EPS | 0.46 | 0.25 | 86.2 | % | 1.21 | 0.77 | 57.2 | % | ||||||||||||||||
Adjusted Net Income2 | 20.1 | 17.5 | 14.4 | % | 50.4 | 38.8 | 29.8 | % | ||||||||||||||||
Adjusted EPS2 | 0.59 | 0.52 | 12.8 | % | 1.47 | 1.15 | 27.7 | % | ||||||||||||||||
Adjusted EBITDA3 | 30.7 | 29.8 | 3.3 | % | 80.6 | 68.2 | 18.2 | % | ||||||||||||||||
% of Sales: | ||||||||||||||||||||||||
Point-in-Time | 62.7 | % | 64.2 | % | -150 bps | 60.8 | % | 62.7 | % | -190 bps | ||||||||||||||
Over-Time - Small Projects | 12.7 | % | 13.8 | % | -110 bps | 12.9 | % | 14.7 | % | -180 bps | ||||||||||||||
Over-Time - Large Projects | 24.7 | % | 21.9 | % | 280 bps | 26.2 | % | 22.6 | % | 360 bps | ||||||||||||||
Net Income | 11.6 | % | 6.9 | % | 470 bps | 11.3 | % | 8.2 | % | 310 bps | ||||||||||||||
Adjusted Net Income2 | 14.7 | % | 14.3 | % | 40 bps | 13.7 | % | 12.2 | % | 150 bps | ||||||||||||||
Adjusted EBITDA3 | 22.5 | % | 24.4 | % | -190 bps | 22.0 | % | 21.4 | % | 60 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 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."
Q3 2024 sales were
Backlog, excluding the Vapor Power acquisition, was
Balance Sheet, Liquidity and Cash Flow
Thermon maintained a strong and flexible balance sheet during Q3 2024. The net debt-to-Adjusted EBITDA ratio was 1.5x as compared to 1.1x in the prior year period, due to the financing of the Vapor Power acquisition and remains within our long term target range of 1.5x - 2.0x. Gross outstanding debt increased by
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") is on track to be completed in the fourth quarter of Fiscal 2024 and Thermon received the requisite regulatory approvals in January 2024. During the three months ended December 31, 2023, the Company recorded a total charge of approximately
Balance Sheet Highlights | Three Months Ended December 31, | |||||||||||
in millions | 2023 | 2022 | % Change | |||||||||
Cash | $ | 55.4 | $ | 35.4 | 56.5 | % | ||||||
Total Debt | 213.3 | 132.8 | 60.7 | % | ||||||||
Net Debt1 / TTM Adjusted EBITDA | 1.5 | x | 1.1 | x | 0.4 | x | ||||||
Working Capital2 | 190.3 | 153.8 | 23.7 | % | ||||||||
Capital Expenditures | 2.2 | 1.5 | 46.3 | % | ||||||||
Free Cash Flow3 | 22.1 | 17.5 | 25.9 | % | ||||||||
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."
Revised Outlook
Kevin Fox, Thermon's Chief Financial Officer, added, "Our team continued to perform well in the third quarter of the fiscal year as we executed the strategy presented at our investor day in November. This included the strategic acquisition of Vapor Power, a company with complementary technology that accelerates our diversification and decarbonization efforts. We are again raising our full-year Fiscal 2024 revenue guidance, to approximately
Conference Call and Webcast Information
Thermon's senior management team, including Bruce Thames, President and Chief Executive Officer, and Kevin Fox, Senior Vice President and Chief Financial Officer, will discuss Q3 2024 results during a conference call today, February 1, 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 before interest expense (net of interest income), income tax expense, depreciation and amortization expense, stock-based compensation expense, acquisition costs, costs associated with restructuring and other income/(charges), and 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 May 31, 2022 acquisition of Powerblanket and 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. Adjusted EPS, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, Organic Sales and Free Cash Flow should be considered in addition to, and not as substitutes for, revenue, income from operations, net income, net income per share 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 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 and Free Cash Flow are calculated and reconciliations to the corresponding GAAP measures, see the sections of this release titled "Reconciliation of Net Income to Adjusted EBITDA," "Reconciliation of Net Income to Adjusted Net Income and Adjusted EPS" and "Reconciliation of Cash Provided by Operating Activities to Free Cash Flow." We are unable to reconcile projected fiscal 2024 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 2024 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, our ability to complete the disposition of our Russian subsidiary and anticipated timing and associated charges and our ability to achieve our financial performance targets for fiscal 2026 and our fiscal 2024 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) the outbreak of a global pandemic, including the current pandemic (COVID-19 and its variants); (ii) general economic conditions and cyclicality in the markets we serve; (iii) future growth of energy, chemical processing and power generation capital investments; (iv) our ability to operate successfully in foreign countries; (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) the current geopolitical instability in Russia and Ukraine and related sanctions by the U.S. and Canadian governments and European Union; (xxxi) environmental and health and safety laws and regulations as well as environmental liabilities; and (xxxii) climate change and related regulation of greenhouse gases, and (xxxiii) those factors listed under Item 1A "Risk Factors" included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2023 filed with the Securities and Exchange Commission (the "SEC") on May 25, 2023 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:
Kevin Fox, Chief Financial Officer
Ivonne Salem, Vice President, FP&A and Investor Relations
(512) 690-0600
Investor.Relations@thermon.com
Thermon Group Holdings, Inc.
Consolidated Balance Sheets
(in thousands, except share per share data)
| Three Months Ended December 31, | Nine months ended December 31, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
Sales | $ | 136,427 | $ | 122,110 | $ | 366,975 | $ | 318,109 | ||||||||
Cost of sales | 79,017 | 71,660 | 207,798 | 184,508 | ||||||||||||
Gross profit | 57,410 | 50,450 | 159,177 | 133,601 | ||||||||||||
Operating expenses: | ||||||||||||||||
Selling, general and administrative expenses | 31,853 | 30,889 | 90,997 | 83,046 | ||||||||||||
Deferred compensation plan expense/(income) | 651 | 464 | 677 | (499 | ) | |||||||||||
Amortization of intangible assets | 2,121 | 2,367 | 6,735 | 7,072 | ||||||||||||
Restructuring and other charges/(income) | 1,336 | 2,668 | 2,221 | 2,668 | ||||||||||||
Income from operations | 21,449 | 14,062 | 58,547 | 41,314 | ||||||||||||
Other income/(expenses): | ||||||||||||||||
Interest expense, net | (1,754 | ) | (1,877 | ) | (5,263 | ) | (4,120 | ) | ||||||||
Other income/(expense) | 653 | 659 | 727 | (592 | ) | |||||||||||
Income before provision for taxes | 20,348 | 12,844 | 54,011 | 36,602 | ||||||||||||
Income tax expense | 4,511 | 4,419 | 12,506 | 10,637 | ||||||||||||
Net income | $ | 15,837 | $ | 8,425 | $ | 41,505 | $ | 25,965 | ||||||||
Net income per common share: | ||||||||||||||||
Basic income per share | $ | 0.47 | $ | 0.25 | $ | 1.22 | $ | 0.78 | ||||||||
Diluted income per share | $ | 0.46 | $ | 0.25 | $ | 1.21 | $ | 0.77 | ||||||||
Weighted-average shares used in computing net income per common share: | ||||||||||||||||
Basic common shares | 33,704 | 33,494 | 33,946 | 33,457 | ||||||||||||
Fully-diluted common shares | 34,202 | 33,880 | 34,325 | 33,756 | ||||||||||||
Thermon Group Holdings, Inc.
Consolidated Balance Sheets
(in thousands, except share per share data)
| (Unaudited) | ||||||||
| December 31, 2023 | March 31, 2023 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 55,396 | $ | 35,635 | ||||
Accounts receivable, net of allowances of | 120,624 | 97,627 | ||||||
Inventories, net | 96,299 | 82,132 | ||||||
Contract assets | 19,397 | 16,272 | ||||||
Prepaid expenses and other current assets | 16,363 | 16,138 | ||||||
Income tax receivable | 1,648 | 3,138 | ||||||
Total current assets | $ | 309,727 | $ | 250,942 | ||||
Property, plant and equipment, net of depreciation and amortization of | 67,932 | 63,288 | ||||||
Goodwill | 268,538 | 219,612 | ||||||
Intangible assets, net | 133,247 | 93,970 | ||||||
Operating lease right-of-use assets | 14,482 | 13,570 | ||||||
Deferred income taxes | 1,072 | 688 | ||||||
Other non-current assets | 10,090 | 7,559 | ||||||
Total assets | $ | 805,088 | $ | 649,629 | ||||
Liabilities and equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 26,611 | $ | 27,330 | ||||
Accrued liabilities | 40,392 | 39,364 | ||||||
Current portion of long-term debt | 15,945 | 10,222 | ||||||
Borrowings under revolving credit facility | 32,500 | 14,500 | ||||||
Contract liabilities | 15,414 | 8,483 | ||||||
Lease liabilities | 3,429 | 3,364 | ||||||
Income taxes payable | 5,448 | 6,809 | ||||||
Total current liabilities | $ | 139,739 | $ | 110,072 | ||||
Long-term debt, net | 163,954 | 87,710 | ||||||
Deferred income taxes | 10,835 | 12,084 | ||||||
Non-current lease liabilities | 13,368 | 12,479 | ||||||
Other non-current liabilities | 9,767 | 8,296 | ||||||
Total liabilities | $ | 337,663 | $ | 230,641 | ||||
Equity | ||||||||
Common stock: | $ | 34 | $ | 33 | ||||
Preferred stock: $.001 par value; 10,000,000 authorized; no shares issued and outstanding | - | - | ||||||
Additional paid in capital | 242,111 | 239,860 | ||||||
Accumulated other comprehensive loss | (53,421 | ) | (58,100 | ) | ||||
Retained earnings | 278,701 | 237,195 | ||||||
Total equity | $ | 467,425 | $ | 418,988 | ||||
Total liabilities and equity | $ | 805,088 | $ | 649,629 | ||||
Thermon Group Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
| Nine months ended December 31, | ||||||||
| 2023 | 2022 | |||||||
Operating activities | ||||||||
Net income | $ | 41,505 | $ | 25,965 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 13,075 | 14,557 | ||||||
Amortization of deferred debt issuance costs | 236 | 230 | ||||||
Impairment of property, plant and equipment | - | 367 | ||||||
Stock compensation expense | 4,132 | 4,438 | ||||||
Deferred income taxes | (1,817 | ) | (4,186 | ) | ||||
Reserve for uncertain tax positions, net | - | 36 | ||||||
Remeasurement (gain)/loss on intercompany balances | (836 | ) | 134 | |||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (12,305 | ) | 1,145 | |||||
Inventories | (5,329 | ) | (18,047 | ) | ||||
Contract assets and liabilities | (3,343 | ) | 4,447 | |||||
Other current and non-current assets | (2,914 | ) | (695 | ) | ||||
Accounts payable | (1,793 | ) | (4,066 | ) | ||||
Accrued liabilities and non-current liabilities | (2,103 | ) | 1,433 | |||||
Income taxes payable and receivable | 80 | 5,847 | ||||||
Net cash provided by operating activities | $ | 28,588 | $ | 31,605 | ||||
Investing activities | ||||||||
Purchases of property, plant and equipment | (7,882 | ) | (5,173 | ) | ||||
Sale of rental equipment | 75 | 163 | ||||||
Cash paid for acquisitions, net of cash acquired | (100,472 | ) | (35,299 | ) | ||||
Net cash provided by/(used) in investing activities | $ | (108,279 | ) | $ | (40,309 | ) | ||
Financing activities | ||||||||
Proceeds from revolving credit facility | 18,000 | 34,500 | ||||||
Payments on revolving credit facility | - | (10,000 | ) | |||||
Proceeds from Term Loan A | 100,000 | - | ||||||
Payments on long-term debt | (17,778 | ) | (17,121 | ) | ||||
Issuance costs associated with revolving line of credit and long term debt | (659 | ) | - | |||||
Repurchase of employee stock units on vesting | (1,880 | ) | (588 | ) | ||||
Payments on finance leases | (145 | ) | (62 | ) | ||||
Net cash provided by/(used in) financing activities | $ | 97,538 | $ | 6,729 | ||||
Less: Net change in cash balances classified as assets held-for-sale | 849 | - | ||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 51 | (754 | ) | |||||
Change in cash, cash equivalents and restricted cash | 18,747 | (2,729 | ) | |||||
Cash, cash equivalents and restricted cash at beginning of period | 38,520 | 43,931 | ||||||
Cash, cash equivalents and restricted cash at end of period | $ | 57,267 | $ | 41,202 | ||||
Thermon Group Holdings, Inc.
Reconciliation of Net Income to Adjusted EBITDA
(Unaudited, in thousands)
| Three Months Ended December 31, | Nine months ended December 31, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
GAAP Net income | $ | 15,837 | $ | 8,425 | $ | 41,505 | $ | 25,965 | ||||||||
Interest expense, net | 1,754 | 1,877 | 5,263 | 4,120 | ||||||||||||
Income tax expense/(benefit) | 4,511 | 4,419 | 12,506 | 10,637 | ||||||||||||
Depreciation and amortization expense | 4,273 | 4,705 | 13,075 | 14,557 | ||||||||||||
EBITDA (non-GAAP) | $ | 26,375 | $ | 19,426 | $ | 72,349 | $ | 55,279 | ||||||||
Stock compensation expense | 1,444 | 1,994 | 4,132 | 4,438 | ||||||||||||
Transaction-related costs1 | 1,592 | - | 1,859 | 126 | ||||||||||||
Restructuring and other charges/(income)1 | 1,336 | 2,668 | 2,221 | 2,668 | ||||||||||||
Other impairment charges/(income)1 | - | 5,666 | - | 5,666 | ||||||||||||
Adjusted EBITDA (non-GAAP) | $ | 30,747 | $ | 29,754 | $ | 80,561 | $ | 68,177 | ||||||||
Adjusted EBITDA % | 22.5 | % | 24.4 | % | 22.0 | % | 21.4 | % | ||||||||
1 - Vapor Power acquisition cost and the fiscal 2024 charges relate to the Company's Russian subsidiary.
Thermon Group Holdings, Inc.
Reconciliation of Net Income to Adjusted Net Income and Adjusted EPS
(Unaudited, in thousands except per share amounts)
Three Months Ended December 31, | Nine months ended December 31, | |||||||||
2023 | 2022 | 2023 | 2022 | |||||||
| GAAP Net income | $ 15,837 | $ 8,425 | $ 41,505 | $ 25,965 | ||||||
| Transaction-related costs1 | 1,592 | - | 1,859 | 126 | Operating expense | |||||
| Amortization of intangible assets | 2,121 | 2,367 | 6,735 | 7,072 | Intangible amortization | |||||
| Restructuring and other charges/(income)1 | 1,336 | 2,668 | 2,221 | 2,668 | Operating expense | |||||
| Impairments and other charges/(income)1 | - | 5,666 | - | 5,666 | ||||||
| Tax effect of adjustments | (821) | (1,585) | (1,914) | (2,657) | ||||||
| Adjusted Net Income (non-GAAP) | $ 20,065 | $ 17,541 | $ 50,406 | $ 38,840 | ||||||
| Adjusted Fully Diluted Earnings per Common Share (Adjusted EPS) (non-GAAP) | $ 0.59 | $ 0.52 | $ 1.47 | $ 1.15 | ||||||
| Fully-diluted common shares | 34,202 | 33,880 | 34,325 | 33,756 | ||||||
1 - Vapor Power acquisition cost and the fiscal 2024 charges relate to the Company's Russian subsidiary.
Thermon Group Holdings, Inc. | ||||||||
Reconciliation of Cash Provided by Operating Activities to Free Cash Flow | ||||||||
(Unaudited, in thousands) | ||||||||
Three Months Ended December 31, | Nine months ended December 31, | |||||||
2023 | 2022 | 2023 | 2022 | |||||
Cash provided by operating activities | ||||||||
Cash provided by/(used in) by investing activities | (102,705) | (1,499) | (108,279) | (40,309) | ||||
Cash provided by/(used in) by financing activities | 102,134 | (11,214) | 97,538 | 6,729 | ||||
Cash provided by operating activities | ||||||||
Less: Cash used for purchases of property, plant and equipment | (2,274) | (1,559) | (7,882) | (5,173) | ||||
Plus: Sales of rental equipment | 41 | 33 | 75 | 163 | ||||
Free cash flow provided (non-GAAP) | ||||||||
View the original press release on accesswire.com
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