Sensata Technologies Reports Third Quarter 2024 Financial Results
“Our third quarter core operating results demonstrate early positive returns from our strategic efforts to improve operational efficiency, drive execution, and expand margins," said
Operating Results - Third Quarter
Operating results for the third quarter of 2024 compared to the third quarter of 2023 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
$982.8 million , a decrease of$18.5 million , or 1.8%, compared to$1,001.3 million in the third quarter of 2023.
Operating loss / income:
-
Operating loss of
$199.2 million , or 20.3% of revenue, decreased by$315.5 million , or 271.4%, compared to operating income of$116.3 million , or 11.6% of revenue, in the third quarter of 2023. -
The third quarter 2024 operating loss reflects certain charges, including: approximately
$150 million in goodwill impairment related to the Dynapower business; approximately$141 million reflected in restructuring and other in connection with the loss on the sale of the Insights business and additional product lifecycle management related exits; and approximately$27 million in expenses related to product lifecycle management related exits reflected in cost of revenue. -
Adjusted operating income was
$188.4 million , or 19.2% of revenue, a decrease of$3.2 million , or 1.7%, compared to adjusted operating income of$191.6 million , or 19.1% of revenue, in the third quarter of 2023.
Loss / earnings per share:
-
Loss per share was
$0.17 , a decrease of$0.58 , or 141.5%, compared to earnings per share of$0.41 in the third quarter of 2023. The loss per share includes the release of a tax valuation allowance related to certain intellectual property assets resulting in a$258 million tax benefit. -
Adjusted earnings per share was
$0.86 , a decrease of$0.05 , or 5.5%, compared to adjusted earnings per share of$0.91 in the third quarter of 2023.
Sensata generated free cash flow of
In
During the third quarter of 2024, Sensata returned approximately
Operating Results - Nine Months
Operating results for the nine months ended
Revenue:
-
Revenue was
$3,025.1 million , a decrease of$36.5 million , or 1.2%, compared to$3,061.6 million in the nine months endedSeptember 30, 2023 .
Operating income:
-
Operating income was
$75.5 million , or 2.5% of revenue, a decrease of$307.6 million , or 80.3%, compared to operating income of$383.1 million , or 12.5% of revenue, in the nine months endedSeptember 30, 2023 . -
Operating income for the nine month period includes the third quarter 2024 charges noted above, which were: approximately
$150 million in goodwill impairment related to the Dynapower business; approximately$141 million reflected in restructuring and other in connection with the loss on the sale of the Insights business and additional product lifecycle management related exits; and approximately$27 million in expenses related to product lifecycle management related exits reflected in cost of revenue. -
Adjusted operating income was
$573.6 million , or 19.0% of revenue, a decrease of$16.7 million , or 2.8%, compared to adjusted operating income of$590.3 million , or 19.3% of revenue, in the nine months endedSeptember 30, 2023 .
Earnings per share:
-
Earnings per share was
$0.81 , a decrease of$0.49 , or 37.7%, compared to earnings per share of$1.30 in the nine months endedSeptember 30, 2023 . Earnings per share in the 2024 period includes the release of a tax valuation allowance related to certain intellectual property assets resulting in a$258 million tax benefit. -
Adjusted earnings per share was
$2.68 , a decrease of$0.12 , or 4.3%, compared to adjusted earnings per share of$2.80 in the nine months endedSeptember 30, 2023 .
Sensata generated free cash flow of
During the first nine months of 2024, Sensata returned approximately
Guidance
For the fourth quarter of 2024, Sensata expects revenue of
Q4-2024 Guidance |
|
|
|
$ in millions, except EPS |
Q4-24 Guidance |
Q3-24 |
Q/Q Change |
Revenue |
|
|
(11%) - (8%) |
Adjusted Operating Income |
|
|
(11%) - (7%) |
Adj. Operating Margin |
19.2% - 19.5% |
19.2% |
0 bps - 30 bps |
Adjusted Net Income |
|
|
(18%) - (12%) |
Adjusted EPS |
|
|
(17%) - (12%) |
The decrease in revenue from the third quarter of 2024 to the fourth quarter of 2024 is primarily attributable to the following factors:
-
Sale of Insights business in the third quarter of 2024 (approximately
$50 million ) -
Incremental exits of underperforming products (approximately
$20 million ) -
Reduced production expectations in automotive and heavy vehicle (approximately
$30 million )
Conference Call and Webcast
Sensata will conduct a conference call today at
About
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
Gross leverage ratio is defined as gross debt divided by last twelve months (LTM) adjusted EBITDA. We believe that gross leverage ratio is a useful measure to management and investors in understanding trends in our overall financial condition.
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
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||||||||||||||||
Condensed Consolidated Statements of Operations |
||||||||||||||||
(In thousands, except per share amounts) |
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
|
For the three months ended
|
|
For the nine months ended
|
||||||||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net revenue |
|
$ |
982,830 |
|
|
$ |
1,001,302 |
|
|
$ |
3,025,074 |
|
|
$ |
3,061,589 |
|
Operating costs and expenses: |
|
|
|
|
|
|
|
|
||||||||
Cost of revenue |
|
|
701,463 |
|
|
|
687,959 |
|
|
|
2,115,137 |
|
|
|
2,090,538 |
|
Research and development |
|
|
42,685 |
|
|
|
45,448 |
|
|
|
133,324 |
|
|
|
136,244 |
|
Selling, general and administrative |
|
|
102,453 |
|
|
|
85,661 |
|
|
|
283,772 |
|
|
|
263,123 |
|
Amortization of intangible assets |
|
|
44,732 |
|
|
|
39,970 |
|
|
|
122,332 |
|
|
|
135,307 |
|
|
|
|
150,100 |
|
|
|
— |
|
|
|
150,100 |
|
|
|
— |
|
Restructuring and other charges, net |
|
|
140,624 |
|
|
|
26,004 |
|
|
|
144,897 |
|
|
|
53,262 |
|
Total operating costs and expenses |
|
|
1,182,057 |
|
|
|
885,042 |
|
|
|
2,949,562 |
|
|
|
2,678,474 |
|
Operating (loss)/income |
|
|
(199,227 |
) |
|
|
116,260 |
|
|
|
75,512 |
|
|
|
383,115 |
|
Interest expense |
|
|
(38,942 |
) |
|
|
(44,306 |
) |
|
|
(118,200 |
) |
|
|
(138,856 |
) |
Interest income |
|
|
5,857 |
|
|
|
7,398 |
|
|
|
15,397 |
|
|
|
23,752 |
|
Other, net |
|
|
(12,294 |
) |
|
|
1,317 |
|
|
|
(19,741 |
) |
|
|
(8,215 |
) |
Loss/(income) before taxes |
|
|
(244,606 |
) |
|
|
80,669 |
|
|
|
(47,032 |
) |
|
|
259,796 |
|
(Benefit from)/provision for income taxes |
|
|
(219,572 |
) |
|
|
17,868 |
|
|
|
(169,722 |
) |
|
|
61,467 |
|
Net (loss)/income |
|
$ |
(25,034 |
) |
|
$ |
62,801 |
|
|
$ |
122,690 |
|
|
$ |
198,329 |
|
|
|
|
|
|
|
|
|
|
||||||||
Net (loss)/income per share: |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
$ |
(0.17 |
) |
|
$ |
0.41 |
|
|
$ |
0.81 |
|
|
$ |
1.30 |
|
Diluted |
|
$ |
(0.17 |
) |
|
$ |
0.41 |
|
|
$ |
0.81 |
|
|
$ |
1.30 |
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average ordinary shares outstanding: |
|
|
|
|
|
|
||||||||||
Basic |
|
|
150,717 |
|
|
|
152,046 |
|
|
|
150,681 |
|
|
|
152,421 |
|
Diluted |
150,717 |
152,379 |
151,030 |
152,922 |
|
||||||
Condensed Consolidated Balance Sheets |
||||||
(In thousands) |
||||||
(Unaudited) |
||||||
|
|
|
|
|
||
Assets |
|
|
|
|
||
Current assets: |
|
|
|
|
||
Cash and cash equivalents |
|
$ |
506,215 |
|
$ |
508,104 |
Accounts receivable, net of allowances |
|
|
753,735 |
|
|
744,129 |
Inventories |
|
|
673,506 |
|
|
713,485 |
Prepaid expenses and other current assets |
|
|
161,853 |
|
|
136,686 |
Total current assets |
|
|
2,095,309 |
|
|
2,102,404 |
Property, plant and equipment, net |
|
|
893,722 |
|
|
886,010 |
|
|
|
3,392,704 |
|
|
3,542,770 |
Other intangible assets, net |
|
|
515,733 |
|
|
883,671 |
Deferred income tax assets |
|
|
295,561 |
|
|
131,527 |
Other assets |
|
|
121,301 |
|
|
134,605 |
Total assets |
|
$ |
7,314,330 |
|
$ |
7,680,987 |
|
|
|
|
|
||
Liabilities and shareholders' equity |
|
|
|
|
||
Current liabilities: |
|
|
|
|
||
Current portion of long-term debt and finance lease obligations |
|
$ |
2,076 |
|
$ |
2,276 |
Accounts payable |
|
|
459,710 |
|
|
482,301 |
Income taxes payable |
|
|
23,909 |
|
|
32,139 |
Accrued expenses and other current liabilities |
|
|
321,187 |
|
|
307,002 |
Total current liabilities |
|
|
806,882 |
|
|
823,718 |
Deferred income tax liabilities |
|
|
246,493 |
|
|
359,073 |
Pension and other post-retirement benefit obligations |
|
|
32,196 |
|
|
38,178 |
Finance lease obligations, less current portion |
|
|
21,702 |
|
|
22,949 |
Long-term debt, net |
|
|
3,174,354 |
|
|
3,373,988 |
Other long-term liabilities |
|
|
74,935 |
|
|
66,805 |
Total liabilities |
|
|
4,356,562 |
|
|
4,684,711 |
Total shareholders' equity |
|
|
2,957,768 |
|
|
2,996,276 |
Total liabilities and shareholders' equity |
|
$ |
7,314,330 |
|
$ |
7,680,987 |
|
||||||||
Condensed Consolidated Statements of Cash Flows |
||||||||
(In thousands) |
||||||||
(Unaudited) |
||||||||
|
|
For the nine months ended
|
||||||
|
|
|
2024 |
|
|
|
2023 |
|
Cash flows from operating activities: |
|
|
|
|
||||
Net income |
|
$ |
122,690 |
|
|
$ |
198,329 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
||||
Depreciation |
|
|
100,712 |
|
|
|
96,877 |
|
Amortization of debt issuance costs |
|
|
4,510 |
|
|
|
5,110 |
|
|
|
|
150,100 |
|
|
|
— |
|
Loss/(gain) on sale of business |
|
|
110,111 |
|
|
|
(5,877 |
) |
Share-based compensation |
|
|
27,393 |
|
|
|
24,454 |
|
Loss on debt financing |
|
|
9,235 |
|
|
|
857 |
|
Amortization of intangible assets |
|
|
122,332 |
|
|
|
135,307 |
|
Deferred income taxes |
|
|
(235,943 |
) |
|
|
12,323 |
|
Loss on equity investments, net |
|
|
13,164 |
|
|
|
678 |
|
Unrealized (gain)/loss on derivative instruments and other |
|
|
(991 |
) |
|
|
15,712 |
|
Changes in operating assets and liabilities, net of effects of acquisitions |
|
|
(37,247 |
) |
|
|
(109,573 |
) |
Acquisition-related compensation payments |
|
|
(5,232 |
) |
|
|
(22,620 |
) |
Net cash provided by operating activities |
|
|
380,834 |
|
|
|
351,577 |
|
|
|
|
|
|
||||
Cash flows from investing activities: |
|
|
|
|
||||
Additions to property, plant and equipment and capitalized software |
|
|
(126,759 |
) |
|
|
(136,224 |
) |
Investment in debt and equity securities |
|
|
3,681 |
|
|
|
(390 |
) |
Proceeds from the sale of business, net of cash sold |
|
|
138,312 |
|
|
|
19,000 |
|
Net cash provided by/(used in) investing activities |
|
|
15,234 |
|
|
|
(117,614 |
) |
|
|
|
|
|
||||
Cash flows from financing activities: |
|
|
|
|
||||
Proceeds from exercise of stock options and issuance of ordinary shares |
|
|
4,605 |
|
|
|
5,346 |
|
Payment of employee restricted stock tax withholdings |
|
|
(9,746 |
) |
|
|
(12,067 |
) |
Proceeds from borrowings on debt |
|
|
500,000 |
|
|
|
— |
|
Payments on debt |
|
|
(700,855 |
) |
|
|
(448,640 |
) |
Dividends paid |
|
|
(54,266 |
) |
|
|
(53,380 |
) |
Payments to repurchase ordinary shares |
|
|
(47,299 |
) |
|
|
(60,290 |
) |
Purchase of noncontrolling interest in joint venture |
|
|
(79,393 |
) |
|
|
— |
|
Payments of debt financing costs |
|
|
(13,379 |
) |
|
|
(747 |
) |
Net cash used in financing activities |
|
|
(400,333 |
) |
|
|
(569,778 |
) |
Effect of exchange rate changes on cash and cash equivalents |
|
|
2,376 |
|
|
|
— |
|
Net change in cash and cash equivalents |
|
|
(1,889 |
) |
|
|
(335,815 |
) |
Cash and cash equivalents, beginning of year |
|
|
508,104 |
|
|
|
1,225,518 |
|
Cash and cash equivalents, end of period |
|
$ |
506,215 |
|
|
$ |
889,703 |
|
Segment Performance |
||||||||||||||||
|
|
For the three months
|
|
For the nine months
|
||||||||||||
$ in 000s |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Performance Sensing (1) |
|
|
|
|
|
|
|
|
||||||||
Revenue |
|
$ |
659,650 |
|
|
$ |
696,847 |
|
|
$ |
2,096,889 |
|
|
$ |
2,058,172 |
|
Operating income |
|
$ |
161,902 |
|
|
$ |
177,599 |
|
|
$ |
524,067 |
|
|
$ |
527,072 |
|
% of Performance Sensing revenue |
|
|
24.5 |
% |
|
|
25.5 |
% |
|
|
25.0 |
% |
|
|
25.6 |
% |
|
|
|
|
|
|
|
|
|
||||||||
Sensing Solutions |
|
|
|
|
|
|
|
|
||||||||
Revenue |
|
$ |
274,386 |
|
|
$ |
275,139 |
|
|
$ |
800,296 |
|
|
$ |
889,649 |
|
Operating income |
|
$ |
80,967 |
|
|
$ |
80,717 |
|
|
$ |
233,285 |
|
|
$ |
258,891 |
|
% of Sensing Solutions revenue |
|
|
29.5 |
% |
|
|
29.3 |
% |
|
|
29.1 |
% |
|
|
29.1 |
% |
|
|
|
|
|
|
|
|
|
||||||||
Other (1) |
|
|
|
|
|
|
|
|
||||||||
Revenue |
|
$ |
48,794 |
|
|
$ |
29,316 |
|
|
$ |
127,889 |
|
|
$ |
113,768 |
|
Operating income |
|
$ |
12,069 |
|
|
$ |
(965 |
) |
|
$ |
28,054 |
|
|
$ |
4,743 |
|
% of Other revenue |
|
|
24.7 |
% |
|
|
-3.3 |
% |
|
|
21.9 |
% |
|
|
4.2 |
% |
(1) |
Effective |
Revenue by Business, Geography, and End Market (Unaudited) |
||||||||||||
(percent of total revenue) |
|
For the three months
|
|
For the nine months
|
||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||
Performance Sensing (1) |
|
67.1 |
% |
|
69.6 |
% |
|
69.3 |
% |
|
67.2 |
% |
Sensing Solutions |
|
27.9 |
% |
|
27.5 |
% |
|
26.5 |
% |
|
29.1 |
% |
Other (1) |
|
5.0 |
% |
|
2.9 |
% |
|
4.2 |
% |
|
3.7 |
% |
Total |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
(percent of total revenue) |
|
For the three months
|
|
For the nine months
|
||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||
|
|
46.7 |
% |
|
45.3 |
% |
|
44.5 |
% |
|
45.6 |
% |
|
|
26.2 |
% |
|
25.6 |
% |
|
27.1 |
% |
|
26.5 |
% |
|
|
27.1 |
% |
|
29.1 |
% |
|
28.4 |
% |
|
27.9 |
% |
Total |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
(percent of total revenue) |
|
For the three months
|
|
For the nine months
|
||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||
Automotive |
|
54.0 |
% |
|
55.8 |
% |
|
55.2 |
% |
|
53.1 |
% |
Heavy vehicle and off-road (1) |
|
17.2 |
% |
|
17.6 |
% |
|
18.1 |
% |
|
17.6 |
% |
Industrial, Appliance, HVAC(2), & other |
|
18.7 |
% |
|
18.8 |
% |
|
17.8 |
% |
|
21.0 |
% |
Aerospace |
|
5.1 |
% |
|
4.9 |
% |
|
4.7 |
% |
|
4.6 |
% |
All other (1) |
|
5.0 |
% |
|
2.9 |
% |
|
4.2 |
% |
|
3.7 |
% |
Total |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
(1) |
Effective |
|
(2) |
|
Heating, ventilation and air conditioning. |
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 |
|||||||||||||||||
|
Operating (Loss)/Income |
|
Operating Margin |
|
Income
|
|
Net (Loss)/Income |
|
Diluted
|
|||||||||
Reported (GAAP) |
$ |
(199,227 |
) |
|
(20.3 |
%) |
|
$ |
(219,572 |
) |
|
$ |
(25,034 |
) |
|
$ |
(0.17 |
) |
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|||||||||
Restructuring related and other (1) |
|
210,180 |
|
|
21.4 |
% |
|
|
(851 |
) |
|
|
209,329 |
|
|
|
1.39 |
|
Financing and other transaction costs (2) |
|
131,913 |
|
|
13.4 |
% |
|
|
(512 |
) |
|
|
139,494 |
|
|
|
0.92 |
|
Step-up depreciation and amortization |
|
43,779 |
|
|
4.5 |
% |
|
|
— |
|
|
|
43,779 |
|
|
|
0.29 |
|
Deferred loss on derivative instruments |
|
1,739 |
|
|
0.2 |
% |
|
|
(111 |
) |
|
|
427 |
|
|
|
0.00 |
|
Amortization of debt issuance costs |
|
— |
|
|
— |
% |
|
|
— |
|
|
|
1,316 |
|
|
|
0.01 |
|
Deferred taxes and other tax related (3) |
|
— |
|
|
— |
% |
|
|
(239,221 |
) |
|
|
(239,221 |
) |
|
|
(1.58 |
) |
Total adjustments |
|
387,611 |
|
|
39.4 |
% |
|
|
(240,695 |
) |
|
|
155,124 |
|
|
|
1.03 |
|
Adjusted (non-GAAP) |
$ |
188,384 |
|
|
19.2 |
% |
|
$ |
21,123 |
|
|
$ |
130,090 |
|
|
$ |
0.86 |
|
(1) |
Includes a |
|
(2) |
Includes |
|
(3) |
Includes |
($ in thousands, except per share amounts) |
For the three months ended |
|||||||||||||||||
|
Operating Income |
|
Operating Margin |
|
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 nine months ended |
||||||||||||||||
|
Operating Income |
|
Operating Margin |
|
Income
|
|
Net
|
|
Diluted
|
||||||||
Reported (GAAP) |
$ |
75,512 |
|
2.5 |
% |
|
$ |
(169,722 |
) |
|
$ |
122,690 |
|
|
$ |
0.81 |
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
||||||||
Restructuring related and other (1) |
|
239,378 |
|
7.9 |
% |
|
|
(2,235 |
) |
|
|
237,143 |
|
|
|
1.57 |
|
Financing and other transaction costs (2) |
|
138,726 |
|
4.6 |
% |
|
|
(1,373 |
) |
|
|
159,752 |
|
|
|
1.06 |
|
Step-up depreciation and amortization |
|
118,718 |
|
3.9 |
% |
|
|
— |
|
|
|
118,718 |
|
|
|
0.79 |
|
Deferred loss/(gain) on derivative instruments |
|
1,262 |
|
0.0 |
% |
|
|
1,577 |
|
|
|
(4,438 |
) |
|
|
(0.03 |
) |
Amortization of debt issuance costs |
|
— |
|
— |
% |
|
|
— |
|
|
|
4,509 |
|
|
|
0.03 |
|
Deferred taxes and other tax related (3) |
|
— |
|
— |
% |
|
|
(233,775 |
) |
|
|
(233,775 |
) |
|
|
(1.55 |
) |
Total adjustments |
|
498,084 |
|
16.5 |
% |
|
|
(235,806 |
) |
|
|
281,909 |
|
|
|
1.87 |
|
Adjusted (non-GAAP) |
$ |
573,596 |
|
19.0 |
% |
|
$ |
66,084 |
|
|
$ |
404,599 |
|
|
$ |
2.68 |
|
(1) |
Includes a |
|
(2) |
Includes a |
|
(3) |
Includes |
($ in thousands, except per share amounts) |
For the nine months ended |
|||||||||||||||
|
Operating Income |
|
Operating Margin |
|
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 |
Non-GAAP adjustments by location in statements of operations |
||||||||||||||||
(in thousands) |
For the three months
|
|
For the nine months
|
|||||||||||||
|
|
2024 |
|
|
|
|
2023 |
|
|
|
2024 |
|
|
|
|
2023 |
Cost of revenue (1) |
$ |
30,770 |
|
|
|
$ |
7,208 |
|
|
$ |
46,744 |
|
|
|
$ |
15,572 |
Selling, general and administrative |
|
22,584 |
|
|
|
|
3,727 |
|
|
|
38,375 |
|
|
|
|
7,749 |
Amortization of intangible assets (2) |
|
43,533 |
|
|
|
|
38,434 |
|
|
|
117,968 |
|
|
|
|
130,581 |
|
|
150,100 |
|
|
|
|
— |
|
|
|
150,100 |
|
|
|
|
— |
Restructuring and other charges, net (4) |
|
140,624 |
|
|
|
|
26,004 |
|
|
|
144,897 |
|
|
|
|
53,262 |
Operating income adjustments |
|
387,611 |
|
|
|
|
75,373 |
|
|
|
498,084 |
|
|
|
|
207,164 |
Interest expense, net |
|
1,316 |
|
|
|
|
1,688 |
|
|
|
4,509 |
|
|
|
|
5,107 |
Other, net (5) |
|
6,892 |
|
|
|
|
852 |
|
|
|
15,122 |
|
|
|
|
5,463 |
Provision for income taxes (6) |
|
(240,695 |
) |
|
|
|
(2,446 |
) |
|
|
(235,806 |
) |
|
|
|
12,013 |
Net income adjustments |
$ |
155,124 |
|
|
|
$ |
75,467 |
|
|
$ |
281,909 |
|
|
|
$ |
229,747 |
(1) |
The three and nine months ended |
|
|
||
(2) |
The three and nine months ended |
|
|
||
(3) |
The three and nine months ended |
|
|
||
(4) |
The three and nine months ended |
|
|
||
(5) |
The nine months ended |
|
|
||
(6) |
Includes |
Free cash flow |
||||||||||||||||||||||
|
|
For the three months ended
|
|
For the nine months ended
|
||||||||||||||||||
($ in thousands) |
|
|
2024 |
|
|
|
2023 |
|
|
% △ |
|
|
2024 |
|
|
|
2023 |
|
|
% △ |
||
Net cash provided by operating activities |
|
$ |
130,891 |
|
|
$ |
138,935 |
|
|
(5.8 |
%) |
|
$ |
380,834 |
|
|
$ |
351,577 |
|
|
8.3 |
% |
Additions to property, plant and equipment and capitalized software |
|
|
(39,571 |
) |
|
|
(51,780 |
) |
|
23.6 |
% |
|
|
(126,759 |
) |
|
|
(136,224 |
) |
|
6.9 |
% |
Free cash flow |
|
$ |
91,320 |
|
|
$ |
87,155 |
|
|
4.8 |
% |
|
$ |
254,075 |
|
|
$ |
215,353 |
|
|
18.0 |
% |
Adjusted corporate and other expenses |
||||||||||||||||
|
|
For the three months
|
|
For the nine months
|
||||||||||||
(in thousands) |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Corporate and other expenses (GAAP) |
|
$ |
(268,809 |
) |
|
$ |
(75,117 |
) |
|
$ |
(442,665 |
) |
|
$ |
(219,022 |
) |
Restructuring related and other |
|
|
182,528 |
|
|
|
9,234 |
|
|
|
209,363 |
|
|
|
20,915 |
|
Financing and other transaction costs |
|
|
18,941 |
|
|
|
1,973 |
|
|
|
23,844 |
|
|
|
5,566 |
|
Step-up depreciation and amortization |
|
|
246 |
|
|
|
391 |
|
|
|
750 |
|
|
|
700 |
|
Deferred loss/(gain) on derivative instruments |
|
|
1,739 |
|
|
|
(663 |
) |
|
|
1,262 |
|
|
|
(3,860 |
) |
Total adjustments |
|
|
203,454 |
|
|
|
10,935 |
|
|
|
235,219 |
|
|
|
23,321 |
|
Adjusted corporate and other expenses (non-GAAP) |
|
$ |
(65,355 |
) |
|
$ |
(64,182 |
) |
|
$ |
(207,446 |
) |
|
$ |
(195,701 |
) |
Adjusted EBITDA |
|||||||||||||||||||
|
|
|
|
For the three months
|
|
For the nine months
|
|||||||||||||
(in thousands) |
|
LTM |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
||
Net (loss)/income |
|
$ |
(79,548 |
) |
|
$ |
(25,034 |
) |
|
$ |
62,801 |
|
|
$ |
122,690 |
|
|
$ |
198,329 |
Interest expense, net |
|
|
138,559 |
|
|
|
33,085 |
|
|
|
36,908 |
|
|
|
102,803 |
|
|
|
115,104 |
(Benefit from)/provision for income taxes |
|
|
(209,438 |
) |
|
|
(219,572 |
) |
|
|
17,868 |
|
|
|
(169,722 |
) |
|
|
61,467 |
Depreciation expense |
|
|
136,940 |
|
|
|
33,696 |
|
|
|
33,317 |
|
|
|
100,712 |
|
|
|
96,877 |
Amortization of intangible assets |
|
|
160,885 |
|
|
|
44,732 |
|
|
|
39,970 |
|
|
|
122,332 |
|
|
|
135,307 |
EBITDA |
|
|
147,398 |
|
|
|
(133,093 |
) |
|
|
190,864 |
|
|
|
278,815 |
|
|
|
607,084 |
Non-GAAP Adjustments |
|
|
|
|
|
|
|
|
|
|
|||||||||
Restructuring related and other |
|
|
585,304 |
|
|
|
210,180 |
|
|
|
31,549 |
|
|
|
239,378 |
|
|
|
65,568 |
Financing and other transaction costs |
|
|
167,825 |
|
|
|
140,006 |
|
|
|
6,038 |
|
|
|
161,125 |
|
|
|
14,792 |
Deferred (gain)/loss on derivative instruments |
|
|
(9,007 |
) |
|
|
538 |
|
|
|
(187 |
) |
|
|
(6,015 |
) |
|
|
986 |
Adjusted EBITDA |
|
$ |
891,520 |
|
|
$ |
217,631 |
|
|
$ |
228,264 |
|
|
$ |
673,303 |
|
|
$ |
688,430 |
Gross and net debt and leverage |
||||||||
|
|
As of |
||||||
($ in thousands) |
|
|
|
|
||||
Current portion of long-term debt and finance lease obligations |
|
$ |
2,076 |
|
|
$ |
2,276 |
|
Finance lease obligations, less current portion |
|
|
21,702 |
|
|
|
22,949 |
|
Long-term debt, net |
|
|
3,174,354 |
|
|
|
3,373,988 |
|
Total debt and finance lease obligations |
|
|
3,198,132 |
|
|
|
3,399,213 |
|
Less: discount, net of premium |
|
|
797 |
|
|
|
(1,568 |
) |
Less: deferred financing costs |
|
|
(26,443 |
) |
|
|
(24,444 |
) |
Total gross indebtedness |
|
|
3,223,778 |
|
|
|
3,425,225 |
|
|
|
|
|
|
||||
Adjusted EBITDA (LTM) |
|
$ |
891,520 |
|
|
$ |
906,647 |
|
Gross leverage ratio |
|
|
3.6 |
|
|
|
3.8 |
|
|
|
|
|
|
||||
Total gross indebtedness |
|
|
3,223,778 |
|
|
|
3,425,225 |
|
Less: cash and cash equivalents |
|
|
506,215 |
|
|
|
508,104 |
|
Net debt |
|
$ |
2,717,563 |
|
|
$ |
2,917,121 |
|
|
|
|
|
|
||||
Adjusted EBITDA (LTM) |
|
$ |
891,520 |
|
|
$ |
906,647 |
|
Net leverage ratio |
|
|
3.0 |
|
|
|
3.2 |
|
Guidance |
|||||||||||||||||
|
For the three months ending |
||||||||||||||||
($ in millions, except per share amounts) |
Operating Income |
|
Net Income |
|
EPS |
||||||||||||
|
Low |
|
High |
|
Low |
|
High |
|
Low |
|
High |
||||||
GAAP |
$ |
121.8 |
|
$ |
122.3 |
|
$ |
56.3 |
|
$ |
56.2 |
|
$ |
0.36 |
|
$ |
0.38 |
Restructuring related and other |
|
18.9 |
|
|
24.9 |
|
|
18.9 |
|
|
24.9 |
|
|
0.13 |
|
|
0.16 |
Financing and other transaction costs |
|
1.0 |
|
|
2.0 |
|
|
1.0 |
|
|
2.0 |
|
|
0.01 |
|
|
0.01 |
Step-up depreciation and amortization |
|
25.5 |
|
|
26.0 |
|
|
25.5 |
|
|
26.0 |
|
|
0.17 |
|
|
0.17 |
Deferred (gain)/loss on derivative instruments(1) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
Amortization of debt issuance costs |
|
— |
|
|
— |
|
|
1.3 |
|
|
1.4 |
|
|
0.01 |
|
|
0.01 |
Deferred taxes and other tax related |
|
— |
|
|
— |
|
|
4.0 |
|
|
4.5 |
|
|
0.03 |
|
|
0.03 |
Non-GAAP |
$ |
167.2 |
|
$ |
175.2 |
|
$ |
107.0 |
|
$ |
115.0 |
|
$ |
0.71 |
|
$ |
0.76 |
Weighted-average diluted shares outstanding (in millions) |
|
|
|
|
|
|
151.0 |
|
|
151.0 |
(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/20241104660787/en/
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Source: