Altra Reports Fourth-Quarter 2020 Results
Delivers
Prudent Cost Management Resulted in Record Operating Cash Flows
Paid Down
Provides 2021 Guidance
BRAINTREE, Mass., Feb. 12, 2021 (GLOBE NEWSWIRE) -- Altra Industrial Motion Corp. (Nasdaq: AIMC) (“Altra” or the “Company”), a leading global manufacturer and supplier of motion control, power transmission and automation products, today announced unaudited financial results for the fourth quarter ended December 31, 2020.
Financial Highlights
- Fourth-quarter 2020 net sales were
$453.2 million , up2.6% from the$441.9 million in the fourth quarter of 2019. Fiscal year 2020 net sales were$1.72 6 billion, slightly above the high end of the Company’s previously provided guidance range. Fourth-quarter 2020 organic sales were up 30 basis points for the combined business compared with the fourth quarter of 2019. - Fourth-quarter 2020 Power Transmission Technologies (“PTT”) segment sales were down
5.1% and Automation & Specialty (“A&S”) segment sales were up10.2% . Excluding the impact of foreign currency translation, PTT segment sales were down7.6% and A&S segment sales were up8.2% compared with the prior year.* - Fourth-quarter net income was
$31.2 million , or$0.48 per diluted share, compared with$37.3 million , or$0.58 per diluted share, in the fourth quarter of 2019. Non-GAAP net income in the fourth quarter of 2020 was$49.6 million , or$0.76 per diluted share. This is compared with non-GAAP net income of$42.7 million , or$0.66 per diluted share, in the fourth quarter of 2019.* - Fiscal year 2020 net income was a loss of
$25.5 million , or a loss of$0.39 per share and non-GAAP net income was$186.9 million , or$2.88 per diluted share, our best performance ever.* - Non-GAAP adjusted EBITDA in the fourth quarter of 2020 was
$96.1 million , or21.2% of net sales, compared with$89.4 million , or20.2% of net sales, in the fourth quarter of 2019.* - Operating income margin in the fourth quarter of 2020 was
12.8% compared with11.8% in the fourth quarter of 2019. Non-GAAP operating income margin in the fourth quarter of 2020 was17.2% , compared with16.4% in the fourth quarter of 2019.* - Cash flow from operations for the year ended December 31, 2020 was
$262.5 million , compared with cash flow from operations of$255.9 million for the prior year end. Non-GAAP Free Cash Flow for the year ended December 31, 2020 was$228.8 million , compared with Non-GAAP Free Cash Flow of$204.2 million for the prior year end. Non-GAAP Adjusted Free Cash Flow, which excludes the impact of the interest rate swap termination payment, was$263.5 million and$204.2 million for the years ended December 31, 2020 and 2019, respectively.* - Paid down
$70.0 million on the Company’s outstanding term loan in the fourth quarter of 2020, bringing total debt pay down to$160 million in 2020 and$310 million since the closing of the A&S merger on October 1, 2018. At the end of the fourth quarter, Altra’s cash balance and availability under the revolving credit facility were$254.4 million and$295.5 million , respectively.
Management Comments
“We ended the year with an exceptional fourth quarter marked by careful cost management, strong cash flow generation and significant progress de-levering the balance sheet,” said Carl Christenson, Altra’s Chairman and Chief Executive Officer. “By leveraging our market position, diversified portfolio and demand improvements in several markets – including wind and class 8 trucks in China – we exceeded our revenue expectations for the quarter. Additionally, through our focus on cost containment and by leveraging Altra’s world-class business system, we grew margins and delivered excellent working capital performance in the quarter.
“On a full-year basis, the broad diversity of our end markets and our ability to act nimbly to control costs through the pandemic allowed us to deliver outstanding performance. We generated
“What was abundantly clear through the events of 2020 is that our people are our greatest asset. I am incredibly proud of the resilience and agility demonstrated by the Altra team as they focused on maintaining safe working environments through a global pandemic while also serving our customers with our innovative solutions and delivering these exceptional financial results,” Christenson continued.
“As we look to the year ahead, our strategic priorities continue to be managing costs, driving margin enhancement, de-levering our balance sheet and positioning Altra to grow and thrive as a premier industrial company for the long term.”
Business Outlook
“We are taking a cautious approach to our initial outlook for 2021 due to the ongoing uncertainty related to the duration of the COVID-19 pandemic and timing of a broad economic recovery,” continued Christenson. “We are hopeful that market conditions improve sooner than our guidance currently assumes and will revisit our outlook appropriately as we gain better visibility. We remain confident that we have the right talent, financial discipline and market strength to continue to navigate the current environment while advancing our strategic priorities to solidify Altra as a world-class premier industrial company.”
The following guidance reflects management’s best estimate and practical assessment of the financial impact of COVID-19 to the Company’s business, at this time. This guidance assumes the general industrial economy will not begin a full recovery until late in 2021. In addition, the guidance assumes that approximately
Altra is providing guidance for full year 2021 as follows:
- Full-year 2021 sales in the range of
$1,790 million to$1,830 million - GAAP diluted EPS in the range of
$1.97 t o$2.10 - Non-GAAP diluted EPS in the range of
$2.95 t o$3.15 * - Non-GAAP adjusted EBITDA in the range of
$370.0 million to$385.0 million * - Tax rate for the full year of approximately
20% to23% before discrete items - Capital expenditures in the range of
$45 million to$50 million - Depreciation and amortization in the range of
$120 million to$125 million - Non-GAAP Adjusted Free cash flow in the range of
$185 million to$210 million *
*Reconciliations of Non-GAAP Disclosures
(Amounts in Millions of Dollars, except per share information)
*Reconciliation of Non-GAAP Net Income:
| Quarter Ended December 31, | Year Ended December 31, | ||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||
| Net income/(loss) | $ | 31.2 | $ | 37.3 | $ | (25.5 | ) | $ | 127.2 | ||||||
| Restructuring and consolidation costs | 1.9 | 2.4 | 7.4 | 14.1 | |||||||||||
| Acquisition related stock compensation expense | 0.4 | 0.6 | 1.8 | 3.2 | |||||||||||
| Acquisition related amortization expense | 17.5 | 17.5 | 69.8 | 70.4 | |||||||||||
| Automation and Specialty acquisition purchase price adjustment | — | — | (0.8 | ) | — | ||||||||||
| Non-cash amortization of interest rate swap settlement fee | 3.4 | — | 9.0 | — | |||||||||||
| Impairment of intangible assets - trademarks | — | — | 8.4 | — | |||||||||||
| Cross currency interest rate swap settlement fee | — | — | 0.9 | — | |||||||||||
| Acquisition related expenses | — | — | — | 0.7 | |||||||||||
| Tax impact of above adjustments | (4.8 | ) | (4.6 | ) | (20.4 | ) | (20.8 | ) | |||||||
| Non-cash deferred tax benefit due to income tax rate change in India | — | (10.5 | ) | — | (10.5 | ) | |||||||||
| 2019 tax benefit due to income tax rate change | — | — | (2.8 | ) | — | ||||||||||
| Impairment of intangible assets - goodwill | — | — | 139.1 | — | |||||||||||
| Non-GAAP net income* | $ | 49.6 | $ | 42.7 | $ | 186.9 | $ | 184.3 | |||||||
| Non-GAAP diluted earnings per share* | $ | 0.76 | $ | 0.66 | $ | 2.88 | $ | 2.86 | |||||||
*Reconciliation of Non-GAAP Free Cash Flow and Non-GAAP Adjusted Free Cash Flow
| Quarter Ended December 31, | Year Ended December 31, | ||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||
| Net cash flows (used) provided from operating activities | $ | 100.7 | $ | 75.5 | $ | 262.5 | $ | 255.9 | |||||||
| Purchase of property, plant and equipment | (9.4 | ) | (14.8 | ) | (33.7 | ) | (51.7 | ) | |||||||
| Non-GAAP free cash flow* | 91.3 | 60.7 | 228.8 | 204.2 | |||||||||||
| Payment for interest rate swap settlement | — | — | 34.7 | — | |||||||||||
| Non-GAAP adjusted free cash flow* | $ | 91.3 | $ | 60.7 | $ | 263.5 | $ | 204.2 | |||||||
*Reconciliation of Net Debt
| Amounts in millions | ||||||||
| Years Ended December 31, | ||||||||
| 2020 | 2019 | |||||||
| Debt | $ | 1,443.2 | $ | 1,604.0 | ||||
| Cash | (254.4 | ) | (167.3 | ) | ||||
| Net debt | $ | 1,188.8 | $ | 1,436.7 | ||||
*Reconciliation of Non-GAAP Income from Operations:
| Quarter Ended December 31, | Year Ended December 31, | ||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||
| Income from operations | $ | 58.0 | $ | 52.1 | $ | 77.5 | $ | 224.1 | |||||||
| Income from operations as a percent of net sales | 12.8 | % | 11.8 | % | 4.5 | % | 12.2 | % | |||||||
| Restructuring and consolidation costs | 1.9 | 2.4 | 7.4 | 14.1 | |||||||||||
| Acquisition related stock compensation expense | 0.4 | 0.6 | 1.8 | 3.2 | |||||||||||
| Acquisition related amortization expense | 17.5 | 17.5 | 69.8 | 70.4 | |||||||||||
| Impairment of goodwill and intangible asset | — | — | 147.5 | — | |||||||||||
| Acquisition related expenses | — | — | — | 0.7 | |||||||||||
| Non-GAAP income from operations* | $ | 77.8 | $ | 72.6 | 304.0 | $ | 312.5 | ||||||||
| Non-GAAP Income from operations as a percent of net sales | 17.2 | % | 16.4 | % | 17.6 | % | 17.0 | % | |||||||
*Reconciliation of Non-GAAP Operating Income and Non-GAAP Operating Income Margin
| Selected Statement of Income Data | ||||||||||||||||||||||||
| Quarter Ended December 31, 2020 | Quarter Ended December 31, 2019 | |||||||||||||||||||||||
| GAAP Operating Income | Adjustments | Non-GAAP Operating Income* | GAAP Operating Income | Adjustments | Non-GAAP Operating Income* | |||||||||||||||||||
| Net sales | $ | 453.2 | $ | — | $ | 453.2 | $ | 441.9 | $ | — | $ | 441.9 | ||||||||||||
| Cost of sales | 291.3 | — | 291.3 | 284.5 | — | 284.5 | ||||||||||||||||||
| Gross profit | 161.9 | — | 161.9 | 157.4 | — | 157.4 | ||||||||||||||||||
| Operating Expenses | ||||||||||||||||||||||||
| Selling, general & administrative expenses | 86.8 | 17.9 | 68.9 | 88.2 | 18.1 | 70.1 | ||||||||||||||||||
| Research and development expenses | 15.2 | — | 15.2 | 14.7 | — | 14.7 | ||||||||||||||||||
| Restructuring costs | 1.9 | 1.9 | — | 2.4 | 2.4 | — | ||||||||||||||||||
| Income from Operations | $ | 58.0 | $ | 19.8 | $ | 77.8 | $ | 52.1 | $ | 20.5 | $ | 72.6 | ||||||||||||
| GAAP and Non-GAAP Income from operations as a percent of net sales | 12.8 | % | 17.2 | % | 11.8 | % | 16.4 | % | ||||||||||||||||
| Year to Date Ended December 31, 2020 | Year to Date Ended December 31, 2019 | |||||||||||||||||||||||
| GAAP Operating Income | Adjustments | Non-GAAP Operating Income* | GAAP Operating Income | Adjustments | Non-GAAP Operating Income* | |||||||||||||||||||
| Net sales | $ | 1,726.0 | $ | — | $ | 1,726.0 | $ | 1,834.1 | $ | — | $ | 1,834.1 | ||||||||||||
| Cost of sales | 1,103.6 | — | 1,103.6 | 1,177.8 | — | 1,177.8 | ||||||||||||||||||
| Gross profit | 622.4 | — | 622.4 | 656.3 | — | 656.3 | ||||||||||||||||||
| Operating Expenses | ||||||||||||||||||||||||
| Selling, general & administrative expenses | 332.2 | 71.6 | 260.6 | 359.0 | 74.3 | 284.7 | ||||||||||||||||||
| Impairment of goodwill and intangible assets | 147.5 | 147.5 | — | — | — | — | ||||||||||||||||||
| Research and development expenses | 57.8 | — | 57.8 | 59.1 | — | 59.1 | ||||||||||||||||||
| Restructuring costs | 7.4 | 7.4 | — | 14.1 | 14.1 | — | ||||||||||||||||||
| Income from Operations | $ | 77.5 | $ | 226.5 | $ | 304.0 | $ | 224.1 | $ | 88.4 | $ | 312.5 | ||||||||||||
| GAAP and Non-GAAP Income from operations as a percent of net sales | 4.5 | % | 17.6 | % | 12.2 | % | 17.0 | % | ||||||||||||||||
*Reconciliation of Non-GAAP Adjusted EBITDA and Non-GAAP Adjusted EBITDA Margin:
| Quarter Ended December 31, | Year Ended December 31, | ||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||
| Net income/(loss) | $ | 31.2 | $ | 37.3 | $ | (25.5 | ) | $ | 127.2 | ||||||
| Asset impairment and other, net | 2.9 | 0.4 | 1.7 | 0.1 | |||||||||||
| Impairment of goodwill and intangible asset | — | — | 147.5 | — | |||||||||||
| Automation and Specialty acquisition purchase price adjustment | — | — | (0.8 | ) | — | ||||||||||
| Tax expense | 8.3 | (3.4 | ) | 29.5 | 21.0 | ||||||||||
| Interest expense | 17.9 | 17.2 | 72.1 | 73.8 | |||||||||||
| Depreciation expense | 13.6 | 14.5 | 57.8 | 58.0 | |||||||||||
| Acquisition related amortization expense | 17.5 | 17.5 | 69.8 | 70.4 | |||||||||||
| Acquisition related expenses | — | — | — | 0.7 | |||||||||||
| Stock compensation expense | 2.8 | 3.5 | 13.1 | 13.6 | |||||||||||
| Restructuring and consolidation expense | 1.9 | 2.4 | 7.4 | 14.1 | |||||||||||
| Non-GAAP adjusted EBITDA | $ | 96.1 | $ | 89.4 | $ | 372.6 | $ | 378.9 | |||||||
| Non-GAAP adjusted EBITDA as a percent of net sales | 21.2 | % | 20.2 | % | 21.6 | % | 20.7 | % | |||||||
*Reconciliation of 2021 Non-GAAP Net Income Guidance and Non-GAAP Diluted EPS Guidance:
| Fiscal Year 2021 | Fiscal Year 2021 Diluted EPS | |||
| Net income per share diluted | ||||
| Restructuring and consolidation costs | 0.8 - 2.8 | |||
| Acquisition related stock compensation expense | 0.9 | |||
| Acquisition related amortization expense | 67.8 - 71.5 | |||
| Non-cash unamortized interest rate swap expense | 11.8 | |||
| Tax impact of above adjustments(1)(2)** | (17.9) - (18.7) | |||
| Non-GAAP Net Income and Non-GAAP Diluted EPS Guidance | ||||
| (1) Adjustments are pre-tax, with net tax impact listed separately | ||||
| (2) Tax impact is calculated by multiplying the estimated effective tax rate for the period of | ||||
*Reconciliation of 2021 Non-GAAP Adjusted EBITDA Guidance:
| Fiscal Year 2021 | ||
| Net income per share diluted | ||
| Interest expense | 68.5 - 71.5 | |
| Tax expense | 38.4 - 34.3 | |
| Depreciation expense | 52.5 - 53.5 | |
| Acquisition related amortization expense | 67.8 - 71.5 | |
| Stock based compensation | 13.3 - 14.3 | |
| Restructuring and consolidation costs | 0.8 - 2.8 | |
| Non-GAAP adjusted EBITDA Guidance |
Conference Call
The Company will conduct an investor conference call to discuss its unaudited fourth quarter and full year 2020 financial results on Friday, February 12, 2021 at 10:00 a.m. ET. The public is invited to listen to the conference call by dialing (866) 209-9085 domestically or (647) 689-5687 for international access and asking to participate in the ALTRA conference call. A live webcast of the call will be available in the "Investor Relations" section of www.altramotion.com. Individuals may download charts that will be used during the call at www.altramotion.com under Events & Presentations in the Investor Relations section. The charts will be available after earnings are released. A replay of the recorded conference call will be available at the conclusion of the call on February 12 through midnight on February 26, 2021. To listen to the replay, dial (800) 585-8367 domestically or (416) 621-4642 for international access (Conference ID: 9897386). A webcast replay also will be available.
About Altra Industrial Motion Corp.
Altra Industrial Motion Corp. is a premier industrial global manufacturer and supplier of highly engineered motion control, automation, power transmission, and engine braking systems and components. Altra's portfolio consists of 27 well-respected brands including Bauer Gear Motor, Boston Gear, Jacobs Vehicle Systems, Kollmorgen, Portescap, Stromag, Svendborg Brakes, TB Wood's, Thomson and Warner Electric. Headquartered in Braintree, Massachusetts, Altra has approximately 9,400 employees and 48 production facilities in 16 countries around the world.
| Consolidated Balance Sheets | Years Ended December 31, | ||||||
| In Millions of Dollars | 2020 | 2019 | |||||
| Assets: | (Unaudited) | ||||||
| Current Assets | |||||||
| Cash and cash equivalents | $ | 254.4 | $ | 167.3 | |||
| Trade receivables, net | 240.8 | 243.2 | |||||
| Inventories | 210.4 | 222.5 | |||||
| Income tax receivable | 6.9 | 5.2 | |||||
| Prepaid expenses and other current assets | 35.7 | 29.1 | |||||
| Total current assets | 748.2 | 667.3 | |||||
| Property, plant and equipment, net | 344.2 | 354.4 | |||||
| Intangible assets, net | 1,459.6 | 1,502.4 | |||||
| Goodwill | 1,596.0 | 1,694.9 | |||||
| Deferred income taxes | 4.9 | 3.0 | |||||
| Other non-current assets, net | 14.2 | 25.1 | |||||
| Operating lease right of use assets | 41.0 | 36.6 | |||||
| Total assets | $ | 4,208.1 | $ | 4,283.7 | |||
| Liabilities and stockholders' equity | |||||||
| Current liabilities | |||||||
| Accounts payable | $ | 163.6 | $ | 154.7 | |||
| Accrued payroll | 76.2 | 58.3 | |||||
| Accruals and other current liabilities | 73.0 | 82.0 | |||||
| Income tax payable | 18.8 | 13.2 | |||||
| Current portion of long-term debt | 16.6 | 18.0 | |||||
| Operating lease liabilities | 13.3 | 13.5 | |||||
| Total current liabilities | 361.5 | 339.7 | |||||
| Long-term debt, less current portion and net of unaccreted discount | 1,408.1 | 1,563.8 | |||||
| Deferred income taxes | 359.6 | 369.1 | |||||
| Pension liabilities | 35.4 | 30.8 | |||||
| Long-term taxes payable | 2.7 | 4.5 | |||||
| Other long-term liabilities | 14.3 | 28.8 | |||||
| Operating lease liabilities, net of current portion | 29.8 | 24.7 | |||||
| Total stockholders' equity | 1,996.7 | 1,922.3 | |||||
| Total liabilities, and stockholders' equity | $ |
AIMC
NASDAQ:AIMCAIMC RankingsAIMC Latest NewsAIMC Stock DataAbout AIMCAltra Industrial Motion Corp. is a premier industrial global manufacturer and supplier of highly engineered motion control, automation, power transmission, and engine braking systems and components. Altra's portfolio consists of 27 well-respected brands including Bauer Gear Motor, Boston Gear, Jacobs Vehicle Systems, Kollmorgen, Portescap, Stromag, Svendborg Brakes, TB Wood's, Thomson and Warner Electric. Headquartered in Braintree, Massachusetts. Altra has approximately 9,500 employees and over 50 production facilities in 16 countries around the world.
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