Sign In  |  Register  |  About Los Altos  |  Contact Us

Los Altos, CA
September 01, 2020 1:26pm
7-Day Forecast | Traffic
  • Search Hotels in Los Altos

  • CHECK-IN:
  • CHECK-OUT:
  • ROOMS:

Sensata Technologies Reports Fourth Quarter and Full Year 2023 Financial Results

Sensata Technologies (NYSE: ST), a global industrial technology company and leading provider of sensors, sensor-rich solutions, and electrical protection devices used in mission-critical systems that create valuable business insights for customers, today announced financial results for its fourth quarter and full year ended December 31, 2023.

"Our capital allocation strategy to reduce net leverage and return cash to shareholders is showing strong early returns as adjusted EPS of $3.61 in 2023 increased 6.2% year over year (14.4% on a constant-currency basis) and gross leverage declined to 3.8x from 4.7x,” said Jeff Cote, CEO and President of Sensata. "Our ability to deliver solutions for our customers in an increasingly electrified world represents an unprecedented opportunity for Sensata and we are well-positioned for success. In 2023, Sensata's electrification revenue grew by nearly 50% to approximately $700 million. Over the last three years, we have won over $1.3 billion in electrification opportunities, much of it in our long-cycle businesses, giving me great confidence that electrification will drive Sensata’s growth in the coming years.”

Operating Results - Fourth Quarter

Operating results for the fourth quarter of 2023 compared to the fourth quarter of 2022 are summarized below. These results include non-GAAP financial measures, each of which is defined and reconciled to the most directly comparable GAAP measure later in this press release.

Revenue:

  • Revenue was $992.5 million, a decrease of ($22.2) million, or (2.2%), compared to $1,014.7 million in the fourth quarter of 2022.
  • Revenue decreased (1.3%) on an organic basis, which excludes a decrease of (0.9%) from foreign currency exchange rates versus the prior year period.

Operating (loss)/income:

  • Operating loss was ($201.4) million, or (20.3%) of revenue, a decrease of ($353.8) million compared to operating income of $152.4 million, or 15.0% of revenue, in the fourth quarter of 2022.
  • Operating loss includes a $321.7 million non-cash goodwill impairment charge related to the Insights reporting unit.
  • Adjusted operating income was $183.7 million, or 18.5% of revenue (19.1% on a constant currency basis), a decrease of ($20.6) million, or (10.1%), compared to adjusted operating income of $204.3 million, or 20.1% of revenue, in the fourth quarter of 2022.

(Loss)/earnings per share:

  • Loss per share was ($1.34), a decrease of $(2.08) compared to earnings per share of $0.74 in the fourth quarter of 2022.
  • Adjusted earnings per share was $0.81, a decrease of ($0.15), or (15.6%) (decrease of (4.2%) on a constant currency basis), compared to adjusted earnings per share of $0.96 in the fourth quarter of 2022.

Sensata generated $105.1 million of operating cash flow and $56.7 million of free cash flow in the fourth quarter of 2023. In the quarter, Sensata used cash to reduce debt by $400 million, repurchase shares valued at approximately $28.1 million, and paid $18.2 million in dividends to shareholders.

Operating Results - Full Year

Operating results for the year ended December 31, 2023 compared to the year ended December 31, 2022 are summarized below. These results include non-GAAP financial measures, each of which is defined and reconciled to the most directly comparable GAAP measure later in this press release.

Revenue:

  • Revenue was a record $4,054.1 million, an increase of $24.8 million, or 0.6%, compared to $4,029.3 million in the year ended December 31, 2022.
  • Revenue increased 1.5% on an organic basis, which excludes a decrease of (1.4%) from foreign currency exchange rates and an increase of 0.5% from acquisitions, net of divestitures, each versus the prior year.

Operating income:

  • Operating income was $181.7 million, or 4.5% of revenue, a decrease of ($488.5) million, or (72.9%), compared to operating income of $670.1 million, or 16.6% of revenue, in the year ended December 31, 2022.
  • Operating income includes a non-cash goodwill impairment charge related to our Insights reporting unit, charges related to the Q3 2023 Restructuring Plan, and charges related to the exit of the Spear Marine Business.
  • Adjusted operating income was $774.0 million, or 19.1% of revenue (19.7% on a constant currency basis), a decrease of ($3.9) million, or (0.5%), compared to adjusted operating income of $777.9 million, or 19.3% of revenue, in the year ended December 31, 2022.

(Loss)/earnings per share:

  • Loss per share was ($0.03), a decrease of ($2.02), or (101.5%), compared to earnings per share of $1.99 in the year ended December 31, 2022.
  • Adjusted earnings per share was $3.61, an increase of $0.21, or 6.2% (increase of 14.4% on a constant currency basis), compared to adjusted earnings per share of $3.40 in the year ended December 31, 2022.

Sensata generated $456.7 million of operating cash flow and $272.1 million of free cash flow in the year ended December 31, 2023. During 2023, Sensata reduced debt by $850 million, repurchased shares valued at approximately $88.4 million, and paid $71.5 million of dividends to shareholders.

Segment Performance

 

 

For the three months ended

December 31,

 

For the full year ended

December 31,

$ in 000s

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Performance Sensing (1)

 

 

 

 

 

 

 

 

Revenue

 

$

753,028

 

 

$

746,604

 

 

$

3,002,728

 

 

$

2,920,393

 

Operating income

 

$

184,353

 

 

$

192,870

 

 

$

744,246

 

 

$

728,308

 

% of Performance Sensing revenue

 

 

24.5

%

 

 

25.8

%

 

 

24.8

%

 

 

24.9

%

 

 

 

 

 

 

 

 

 

Sensing Solutions (1)

 

 

 

 

 

 

 

 

Revenue

 

$

239,466

 

 

$

268,072

 

 

$

1,051,355

 

 

$

1,108,869

 

Operating income

 

$

68,219

 

 

$

78,443

 

 

$

299,032

 

 

$

323,347

 

% of Sensing Solutions revenue

 

 

28.5

%

 

 

29.3

%

 

 

28.4

%

 

 

29.2

%

(1)

Effective April 1, 2023, we reorganized our reportable segments to move material handling products from Performance Sensing to Sensing Solutions to align with new management reporting. Prior year amounts have been reclassified.

 

Guidance

"We anticipate our end markets to be relatively flat year over year given the current IHS automotive outlook, weakness in Europe and North America heavy vehicle and off road production, and continued destocking in industrials," said Brian Roberts, EVP and CFO of Sensata. "Given that market backdrop, we expect revenue to be flat to down slightly in the first and second quarters of 2024 before rebounding in the second half of the year as new and ramping product launches drive growth. We expect adjusted operating margins to be flat in the first quarter and then increase sequentially by approximately 20 – 30 basis points per quarter."

Q1 2024 Guidance

 

 

 

$ in millions, except EPS

Q1-24 Guidance

Q1-23

Y/Y Change

Revenue

$970 - $1,010

$998.2

(3%) - 1%

organic growth

 

 

(2%) - 2%

Adjusted Operating Income

$178 - $190

$192.9

(8%) - (2%)

Adjusted Net Income

$124 - $134

$140.7

(12%) - (5%)

Adjusted EPS

$0.82 - $0.88

$0.92

(11%) - (4%)

 

Versus the prior year period, Sensata expects that changes in foreign currency exchange rates will decrease revenue by approximately ($7) million at the midpoint and decrease adjusted EPS by approximately ($0.05) at the midpoint in the first quarter of 2024.

Conference Call and Webcast

Sensata will conduct a conference call today at 8:00 a.m. Eastern Time to discuss its fourth quarter and full year 2023 financial results and its outlook for the first quarter of 2024. The dial-in numbers for the call are 1-844-784-1726 or 1-412-380-7411. Callers should reference the "Sensata Q4 2023 Financial Results Conference Call." A live webcast of the conference call will also be available on the investor relations page of Sensata’s website at http://investors.sensata.com. Additionally, a replay of the call will be available until February 13, 2024. To access the replay, dial 1-877-344-7529 or 1-412-317-0088 and enter confirmation code: 5379784.

About Sensata Technologies

Sensata Technologies is a leading industrial technology company that develops sensors, sensor-based solutions, including controllers and software, and other mission-critical products to create valuable business insights for customers and end users. For more than 100 years, Sensata has provided a wide range of customized, sensor-rich solutions that address complex engineering requirements to help customers solve difficult challenges in the automotive, heavy vehicle & off-road, industrial, and aerospace industries. With approximately 19,400 employees and operations in 16 countries, Sensata’s solutions help to make products safer, cleaner and more efficient, more electrified, and more connected. For more information, please visit Sensata’s website at www.sensata.com.

Non-GAAP Financial Measures

We supplement the reporting of our financial information determined in accordance with U.S. generally accepted accounting principles (“GAAP”) with certain non-GAAP financial measures. We use these non-GAAP financial measures internally to make operating and strategic decisions, including the preparation of our annual operating plan, evaluation of our overall business performance, and as a factor in determining compensation for certain employees. We believe presenting non-GAAP financial measures is useful for period-over-period comparisons of underlying business trends and our ongoing business performance. We also believe presenting these non-GAAP measures provides additional transparency into how management evaluates the business.

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 U.S. GAAP. In addition, our non-GAAP financial measures may not be the same as, or comparable to, similar non-GAAP measures presented by other companies.

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 corporate and other expenses, 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 U.S. GAAP, excluding certain non-GAAP adjustments which are detailed in the accompanying reconciliation tables. Adjusted EPS is calculated by dividing adjusted net income (or loss) by the number of diluted weighted-average ordinary shares outstanding in the period. We believe that these measures are useful to investors and management in understanding our ongoing operations and in analysis of ongoing operating trends.

Adjusted operating income (or loss) is defined as operating income (or loss), determined in accordance with U.S. GAAP, excluding certain non-GAAP adjustments which are detailed in the accompanying reconciliation tables. Adjusted operating margin is calculated by dividing adjusted operating income (or loss) by net revenue. We believe that these measures are useful to investors and management in understanding our ongoing operations and in analysis of ongoing operating trends.

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 U.S. GAAP, excluding the period-over-period impact of foreign exchange rate differences as well as the net impact of material acquisitions and divestitures for the 12-month period following the respective transaction date(s). We believe that this measure is useful to investors and management in understanding our ongoing operations and in analysis of ongoing operating trends.

Adjusted EBITDA is defined as net income (or loss), determined in accordance with U.S. GAAP, excluding interest expense, net, provision for (or benefit from) income taxes, depreciation expense, amortization of intangible assets, and the following non-GAAP adjustments, if applicable: (1) restructuring related and other, (2) financing and other transaction costs, and (3) deferred gain or loss on derivative instruments. We believe that this measure is useful to investors and management in understanding our ongoing operations and in analysis of ongoing operating trends.

Adjusted corporate and other expenses is defined as corporate and other expenses calculated in accordance with U.S. GAAP, excluding the portion of non-GAAP adjustments described below that relate to corporate and other expenses. We believe adjusted corporate and other expenses is useful to management and investors in understanding the impact of non-GAAP adjustments on operating expenses not allocated to our segments.

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, trends, priorities, growth, shareholder value, capital expenditures, cash flows, demand for products and services, share repurchases, and Sensata’s strategic initiatives, including those relating to acquisitions and dispositions and the impact of such transactions on our strategic and operational plans and financial results. These statements are subject to risks, uncertainties, and other important factors relating to our operations and business environment, and we can give no assurances that these forward-looking statements will prove to be correct.

A wide variety of potential risks, uncertainties, and other factors could materially affect our ability to achieve the results either expressed or implied by these forward-looking statements, including, but not limited to, risks related to public health crises, instability and changes in the global markets, supplier interruption or non-performance, the acquisition or disposition of businesses, adverse conditions or competition in the industries upon which we are dependent, intellectual property, product liability, warranty, and recall claims, market acceptance of new product introductions and product innovations, labor disruptions or increased labor costs, and changes in existing environmental or safety laws, regulations, and programs.

Investors and others should carefully consider the foregoing factors and other uncertainties, risks, and potential events including, but not limited to, those described in Item 1A: Risk Factors in our most recent Annual Report on Form 10-K and as may be updated from time to time in Item 1A: Risk Factors in our quarterly reports on Form 10-Q or other subsequent filings with the United States Securities and Exchange Commission. All such forward-looking statements speak only as of the date they are made, and we do not undertake any obligation to update these statements other than as required by law.

 

SENSATA TECHNOLOGIES HOLDING PLC

Condensed Consolidated Statements of Operations

(In thousands, except per share amounts)

(Unaudited)

 

 

 

For the three months ended

December 31,

 

For the full year ended

December 31,

 

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Net revenue

 

$

992,494

 

 

$

1,014,676

 

 

$

4,054,083

 

 

$

4,029,262

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

Cost of revenue

 

 

702,287

 

 

 

673,830

 

 

 

2,792,825

 

 

 

2,712,048

 

Research and development

 

 

42,623

 

 

 

47,446

 

 

 

178,867

 

 

 

189,344

 

Selling, general and administrative

 

 

87,532

 

 

 

87,622

 

 

 

350,655

 

 

 

370,644

 

Amortization of intangible assets

 

 

38,553

 

 

 

39,302

 

 

 

173,860

 

 

 

153,787

 

Goodwill impairment charge

 

 

321,700

 

 

 

 

 

 

321,700

 

 

 

 

Restructuring and other charges, net

 

 

1,238

 

 

 

14,111

 

 

 

54,500

 

 

 

(66,700

)

Total operating costs and expenses

 

 

1,193,933

 

 

 

862,311

 

 

 

3,872,407

 

 

 

3,359,123

 

Operating (loss)/income

 

 

(201,439

)

 

 

152,365

 

 

 

181,676

 

 

 

670,139

 

Interest expense, net

 

 

(35,756

)

 

 

(43,676

)

 

 

(150,860

)

 

 

(178,819

)

Other, net

 

 

(4,759

)

 

 

16,449

 

 

 

(12,974

)

 

 

(94,618

)

(Loss)/income before taxes

 

 

(241,954

)

 

 

125,138

 

 

 

17,842

 

 

 

396,702

 

(Benefit from)/provision for income taxes

 

 

(39,716

)

 

 

11,988

 

 

 

21,751

 

 

 

86,017

 

Net (loss)/income

 

 

(202,238

)

 

 

113,150

 

 

 

(3,909

)

 

 

310,685

 

 

 

 

 

 

 

 

 

 

Net (loss)/income per share:

 

 

 

 

 

 

 

 

Basic

 

$

(1.34

)

 

$

0.74

 

 

$

(0.03

)

 

$

2.00

 

Diluted

 

$

(1.34

)

 

$

0.74

 

 

$

(0.03

)

 

$

1.99

 

��

 

 

 

 

 

 

 

 

Weighted-average ordinary shares outstanding:

 

 

 

 

 

 

Basic

 

 

151,090

 

 

 

152,639

 

 

 

152,089

 

 

 

155,253

 

Diluted

 

 

151,090

 

 

 

153,140

 

 

 

152,089

 

 

 

155,927

 

 

SENSATA TECHNOLOGIES HOLDING PLC

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

 

 

December 31,

2023

 

December 31,

2022

Assets

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

508,104

 

$

1,225,518

Accounts receivable, net of allowances

 

 

744,129

 

 

742,382

Inventories

 

 

713,485

 

 

644,875

Prepaid expenses and other current assets

 

 

136,686

 

 

162,268

Total current assets

 

 

2,102,404

 

 

2,775,043

Property, plant and equipment, net

 

 

886,010

 

 

840,819

Goodwill

 

 

3,542,770

 

 

3,911,224

Other intangible assets, net

 

 

883,671

 

 

999,722

Deferred income tax assets

 

 

131,527

 

 

100,539

Other assets

 

 

134,605

 

 

128,873

Total assets

 

$

7,680,987

 

$

8,756,220

 

 

 

 

 

Liabilities and shareholders' equity

 

 

 

 

Current liabilities:

 

 

 

 

Current portion of long-term debt and finance lease obligations

 

$

2,276

 

$

256,471

Accounts payable

 

 

482,301

 

 

531,572

Income taxes payable

 

 

32,139

 

 

43,987

Accrued expenses and other current liabilities

 

 

307,002

 

 

346,942

Total current liabilities

 

 

823,718

 

 

1,178,972

Deferred income tax liabilities

 

 

359,073

 

 

364,593

Pension and other post-retirement benefit obligations

 

 

38,178

 

 

36,086

Finance lease obligations, less current portion

 

 

22,949

 

 

24,742

Long-term debt, net

 

 

3,373,988

 

 

3,958,928

Other long-term liabilities

 

 

66,805

 

 

82,092

Total liabilities

 

 

4,684,711

 

 

5,645,413

Total shareholders' equity

 

 

2,996,276

 

 

3,110,807

Total liabilities and shareholders' equity

 

$

7,680,987

 

$

8,756,220

 

SENSATA TECHNOLOGIES HOLDING PLC

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

For the year ended

December 31,

 

 

 

2023

 

 

 

2022

 

Cash flows from operating activities:

 

 

 

 

Net (loss)/income

 

$

(3,909

)

 

$

310,685

 

Adjustments to reconcile net (loss)/income to net cash provided by operating activities:

 

 

 

 

Depreciation

 

 

133,105

 

 

 

127,184

 

Amortization of debt issuance costs

 

 

6,772

 

 

 

6,969

 

Goodwill impairment charge

 

 

321,700

 

 

 

 

Gain on sale of business

 

 

(5,877

)

 

 

(135,112

)

Share-based compensation

 

 

29,994

 

 

 

31,791

 

Loss on debt financing

 

 

1,413

 

 

 

5,468

 

Amortization of intangible assets

 

 

173,860

 

 

 

153,787

 

Deferred income taxes

 

 

(54,159

)

 

 

(781

)

Loss on equity investments, net

 

 

711

 

 

 

75,569

 

Unrealized loss on derivative instruments and other

 

 

35,986

 

 

 

34,309

 

Changes in operating assets and liabilities, net of effects of acquisitions

 

 

(160,301

)

 

 

(125,776

)

Acquisition-related compensation payments

 

 

(22,620

)

 

 

(23,500

)

Net cash provided by operating activities

 

 

456,675

 

 

 

460,593

 

Cash flows from investing activities:

 

 

 

 

Acquisitions, net of cash received

 

 

 

 

 

(631,516

)

Additions to property, plant and equipment and capitalized software

 

 

(184,609

)

 

 

(150,064

)

Investment in debt and equity securities

 

 

(390

)

 

 

(7,983

)

Proceeds from the sale of business, net of cash sold

 

 

19,000

 

 

 

198,841

 

Other

 

 

994

 

 

 

152

 

Net cash used in investing activities

 

 

(165,005

)

 

 

(590,570

)

Cash flows from financing activities:

 

 

 

 

Proceeds from exercise of stock options and issuance of ordinary shares

 

 

5,346

 

 

 

22,803

 

Payment of employee restricted stock tax withholdings

 

 

(12,280

)

 

 

(8,525

)

Proceeds from borrowings on debt

 

 

 

 

 

500,000

 

Payments on debt

 

 

(848,897

)

 

 

(510,701

)

Dividends paid

 

 

(71,543

)

 

 

(51,072

)

Payments to repurchase ordinary shares

 

 

(88,398

)

 

 

(292,274

)

Payments of debt financing costs

 

 

(787

)

 

 

(13,691

)

Net cash used in financing activities

 

 

(1,016,559

)

 

 

(353,460

)

Effect of exchange rate changes on cash and equivalents

 

 

7,475

 

 

 

 

Net change in cash and cash equivalents

 

 

(717,414

)

 

 

(483,437

)

Cash and cash equivalents, beginning of year

 

 

1,225,518

 

 

 

1,708,955

 

Cash and cash equivalents, end of year

 

$

508,104

 

 

$

1,225,518

 

 
 

Revenue by Business, Geography, and End Market (Unaudited)

(percent of total revenue)

 

For the three months

ended December 31,

 

For the full year

ended December 31,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Performance Sensing (1)

 

75.9

%

 

73.6

%

 

74.1

%

 

72.5

%

Sensing Solutions (1)

 

24.1

%

 

26.4

%

 

25.9

%

 

27.5

%

Total

 

100.0

%

 

100.0

%

 

100.0

%

 

100.0

%

 
 

(percent of total revenue)

 

For the three months

ended December 31,

 

For the full year

ended December 31,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Americas

 

43.3

%

 

43.5

%

 

45.0

%

 

42.3

%

Europe

 

21.3

%

 

25.6

%

 

26.3

%

 

25.9

%

Asia/Rest of World

 

35.4

%

 

30.9

%

 

28.7

%

 

31.8

%

Total

 

100.0

%

 

100.0

%

 

100.0

%

 

100.0

%

 
 

(percent of total revenue)

 

For the three months

ended December 31,

 

For the full year

ended December 31,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Automotive (2)

 

55.8

%

 

53.8

%

 

53.7

%

 

52.3

%

Heavy vehicle and off-road (1)

 

21.1

%

 

20.6

%

 

21.3

%

 

21.1

%

Industrial (1)

 

13.5

%

 

14.8

%

 

14.7

%

 

14.4

%

Appliance and HVAC

 

4.0

%

 

4.9

%

 

4.6

%

 

5.4

%

Aerospace

 

4.9

%

 

4.3

%

 

4.7

%

 

3.8

%

All other

 

0.7

%

 

1.6

%

 

1.0

%

 

3.0

%

Total

 

100.0

%

 

100.0

%

 

100.0

%

 

100.0

%

(1)

Effective April 1, 2023, we reorganized our structure to move material handling products from the Performance Sensing reportable segment to the Sensing Solutions reportable segment to align with new management reporting. Accordingly, material handling revenue, which has historically been presented in the HVOR end-market, is now presented in the Industrial end-market. Prior period amounts for revenue by business and end market have been reclassified above.

 

(2)

Includes amounts reflected in the Sensing Solutions segment as follows: $9.8 million and $7.9 million of revenue in the three months ended December 31, 2023 and 2022, respectively, and $37.9 million and $35.8 million of revenue in the years ended December 31, 2023 and 2022, respectively.

 

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 U.S. GAAP financial measure. Amounts presented in these tables may not appear to recalculate due to the effect of rounding.

Operating income and margin, income tax, net income, and earnings per share

($ in thousands, except per share amounts)

For the three months ended December 31, 2023

 

Operating

(loss)/Income

 

Operating

Margin

 

Income

Taxes

 

Net

(Loss)/

Income

 

Diluted

EPS

Reported (GAAP)

$

(201,439

)

 

(20.3

%)

 

$

(39,716

)

 

$

(202,238

)

 

$

(1.34

)

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

Restructuring related and other (1)

 

345,926

 

 

34.9

%

 

 

(992

)

 

 

344,934

 

 

 

2.28

 

Financing and other transaction costs

 

2,111

 

 

0.2

%

 

 

(49

)

 

 

6,651

 

 

 

0.04

 

Step-up depreciation and amortization

 

37,301

 

 

3.8

%

 

 

 

 

 

37,301

 

 

 

0.25

 

Deferred gain on derivative instruments

 

(218

)

 

0.0

%

 

 

471

 

 

 

(2,521

)

 

 

(0.02

)

Amortization of debt issuance costs

 

 

 

%

 

 

 

 

 

1,664

 

 

 

0.01

 

Deferred taxes and other tax related

 

 

 

%

 

 

(62,493

)

 

 

(62,493

)

 

 

(0.41

)

Total adjustments

 

385,120

 

 

38.8

%

 

 

(63,063

)

 

 

325,536

 

 

 

2.15

 

Adjusted (non-GAAP)

$

183,681

 

 

18.5

%

 

$

23,347

 

 

$

123,298

 

 

$

0.81

 

(1)

Includes $321.7 million of charges to impair goodwill in our Insights reporting unit, presented on the consolidated statement of operations in goodwill impairment charge. Also includes $11.4 million of charges arising as an indirect result of actions taken in the Q3 2023 Plan, of which approximately $2.1 million was recorded in restructuring and other charges, net, with the remainder primarily in cost of revenue.

 

($ in thousands, except per share amounts)

For the three months ended December 31, 2022

 

Operating

Income

 

Operating

Margin

 

Income

Tax

 

Net

Income

 

Diluted

EPS

Reported (GAAP)

$

152,365

 

 

15.0

%

 

$

11,988

 

 

$

113,150

 

 

$

0.74

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

Restructuring related and other

 

12,041

 

 

1.2

%

 

 

(2,935

)

 

 

10,205

 

 

 

0.07

 

Financing and other transaction costs

 

5,074

 

 

0.5

%

 

 

 

 

 

5,508

 

 

 

0.04

 

Step-up depreciation and amortization

 

38,027

 

 

3.7

%

 

 

 

 

 

38,027

 

 

 

0.25

 

Deferred gain on derivative instruments

 

(3,213

)

 

(0.3

%)

 

 

2,985

 

 

 

(11,481

)

 

 

(0.07

)

Amortization of debt issuance costs

 

 

 

%

 

 

 

 

 

1,713

 

 

 

0.01

 

Deferred taxes and other tax related

 

 

 

%

 

 

(10,627

)

 

 

(10,627

)

 

 

(0.07

)

Total adjustments

 

51,929

 

 

5.1

%

 

 

(10,577

)

 

 

33,345

 

 

 

0.22

 

Adjusted (non-GAAP)

$

204,294

 

 

20.1

%

 

$

22,565

 

 

$

146,495

 

 

$

0.96

 

 
 

($ in thousands, except per share amounts)

For the full year ended December 31, 2023

 

Operating

Income

 

Operating

Margin

 

Income

Tax

 

Net

(Loss)/Income

 

Diluted

EPS

Reported (GAAP)

$

181,676

 

 

4.5

%

 

$

21,751

 

 

$

(3,909

)

 

$

(0.03

)

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

Restructuring related and other (1)

 

411,494

 

 

10.2

%

 

 

(3,659

)

 

 

407,835

 

 

 

2.67

 

Financing and other transaction costs (2)

 

16,286

 

 

0.4

%

 

 

2,727

 

 

 

24,219

 

 

 

0.16

 

Step-up depreciation and amortization (3)

 

168,582

 

 

4.2

%

 

 

 

 

 

168,582

 

 

 

1.11

 

Deferred gain on derivative instruments

 

(4,078

)

 

(0.1

%)

 

 

273

 

 

 

(1,733

)

 

 

(0.01

)

Amortization of debt issuance costs

 

 

 

%

 

 

 

 

 

6,771

 

 

 

0.04

 

Deferred taxes and other tax related

 

 

 

%

 

 

(50,391

)

 

 

(50,391

)

 

 

(0.33

)

Total adjustments

 

592,284

 

 

14.6

%

 

 

(51,050

)

 

 

555,283

 

 

 

3.64

 

Adjusted (non-GAAP)

$

773,960

 

 

19.1

%

 

$

72,801

 

 

$

551,374

 

 

$

3.61

 

(1)

Primarily includes (1) $321.7 million of charges to impair goodwill of our Insights reporting unit in the fourth quarter of 2023, (2) $28.8 million of charges related to the exit of the Spear Marine Business, $14.4 million of which was recorded in restructuring and other charges, net, with the remainder primarily in cost of revenue, (3) $23.5 million of charges incurred as part of the Q3 2023 Plan, recorded in restructuring and other charges, net, and (4) $18.8 million of charges arising as an indirect result of actions taken in the Q3 2023 Plan, of which approximately $2.1 million was recorded in restructuring and other charges, net, with the remainder primarily in cost of revenue. Refer to our Annual Report on Form 10-K for additional information on the goodwill impairment charge, the Q3 2023 Plan, and the exit of the Spear Marine Business.

 

(2)

Primarily includes $15.3 million of expense related to acquisition-related compensation arrangements (recorded in restructuring and other charges, net) and $5.4 million of debt financing loss related to our repayment of the 5.625% Senior Notes in December 2023 and our term loan in the first half of 2023 (recorded in other, net), partially offset by a $5.9 million gain on the sale of a business (recorded in restructuring and other charges, net).

 

(3)

Includes $13.5 million of accelerated amortization related to the exit of the Spear Marine Business in the second quarter of 2023.

 
 

($ in thousands, except per share amounts)

For the full year ended December 31, 2022

 

Operating

Income

 

Operating

Margin

 

Income

Tax

 

Net

Income

 

Diluted

EPS

Reported (GAAP)

$

670,139

 

 

16.6

%

 

$

86,017

 

 

$

310,685

 

$

1.99

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

Restructuring related and other

 

36,472

 

 

0.9

%

 

 

(3,498

)

 

 

34,515

 

 

0.22

Financing and other transaction costs (1)

 

(75,550

)

 

(1.9

%)

 

 

2,767

 

 

 

10,726

 

 

0.07

Step-up depreciation and amortization

 

148,291

 

 

3.7

%

 

 

 

 

 

148,291

 

 

0.95

Deferred (gain)/loss on derivative instruments

 

(1,473

)

 

0.0

%

 

 

(387

)

 

 

1,490

 

 

0.01

Amortization of debt issuance costs

 

 

 

%

 

 

 

 

 

6,969

 

 

0.04

Deferred taxes and other tax related (2)

 

 

 

%

 

 

17,828

 

 

 

17,828

 

 

0.11

Total adjustments

 

107,740

 

 

2.7

%

 

 

16,710

 

 

 

219,819

 

 

1.41

Adjusted (non-GAAP)

$

777,879

 

 

19.3

%

 

$

69,307

 

 

$

530,504

 

$

3.40

(1)

Includes gain on the sale of the Qinex Business in the third quarter of 2022 and changes in the fair value of acquisition-related contingent consideration amounts of $135.1 million and $9.4 million, respectively, partially offset by $48.9 million of expense related to compensation arrangements entered into concurrent with the closing of an acquisition, each of which were recorded in restructuring and other charges, net. Also includes $75.6 million of mark-to-market losses on our equity investments, primarily our investment in Quanergy Systems, Inc., which are presented in other, net in our consolidated statement of operations.

 

(2)

Includes $14.7 million of current tax expense related to the repatriation of profit from certain Asian subsidiaries to their parent companies in the Netherlands and the United States. The decision to repatriate these profits was the result of our goal to reduce our balance sheet exposure and corresponding earnings volatility related to changes in foreign currency exchange rates as well as to fund our deployment of capital.

 
 

Non-GAAP adjustments by location in statements of operations

(in thousands)

For the three months

ended December 31,

 

For the full year

ended December 31,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

 

 

 

 

 

 

 

 

Cost of revenue (1)

$

22,194

 

 

$

(1,189

)

 

$

37,766

 

 

$

10,873

 

Selling, general and administrative

 

2,890

 

 

 

1,266

 

 

 

10,639

 

 

 

16,457

 

Amortization of intangible assets (2)

 

37,098

 

 

 

37,741

 

 

 

167,679

 

 

 

147,110

 

Goodwill impairment charge (3)

 

321,700

 

 

 

 

 

 

321,700

 

 

 

 

Restructuring and other charges, net (4)

 

1,238

 

 

 

14,111

 

 

 

54,500

 

 

 

(66,700

)

Operating income adjustments

 

385,120

 

 

 

51,929

 

 

 

592,284

 

 

 

107,740

 

Interest expense, net

 

1,664

 

 

 

1,713

 

 

 

6,771

 

 

 

6,969

 

Other, net (5)

 

1,815

 

 

 

(9,720

)

 

 

7,278

 

 

 

88,400

 

(Benefit from)/provision for income taxes (6)

 

(63,063

)

 

 

(10,577

)

 

 

(51,050

)

 

 

16,710

 

Net income adjustments

$

325,536

 

 

$

33,345

 

 

$

555,283

 

 

$

219,819

 

(1)

The three and twelve months ended December 31, 2023 includes $9.4 million and $16.5 million, respectively, of charges arising as an indirect result of actions taken in the Q3 2023 Plan. The twelve months ended December 31, 2023 also includes a charge of $13.0 million to write down inventory related to the Spear Marine Business, which was exited in the second quarter of 2023.

 

(2)

The twelve months ended December 31, 2023 includes $13.5 million of accelerated amortization related to the exit of the Spear Marine Business in the second quarter of 2023.

 

(3)

In the fourth quarter of 2023, we impaired goodwill in our Insights reporting unit. Refer to our Annual Report on Form 10-K for additional information.

 

(4)

The twelve months ended December 31, 2023 includes (1) $22.8 million of charges related to the Q3 2023 Plan incurred in the second half of 2023, (2) $15.3 million of expense related to compensation arrangements entered into concurrent with the closing of certain acquisitions, and (3) $14.4 million of charges related to the exit of the Spear Marine Business in the second quarter of 2023. The twelve months ended December 31, 2022 includes gains of $135.1 million, related to the sale of the Qinex Business, and $9.4 million, related to changes in the fair values of acquisition-related contingent consideration amounts, partially offset by $48.9 million of expense related to compensation arrangements entered into concurrent with the closing of certain acquisitions, including $10.4 million recognized during the fourth quarter of 2022. Refer to our Annual Report on Form 10-K for additional information.

 

(5)

The year ended December 31, 2022 includes mark-to-market losses on our equity investments, primarily in Quanergy Systems, Inc, of $75.6 million, and a $5.5 million loss related to the redemption of the 4.875% Senior Notes in the third quarter of 2022.

 

(6)

The year ended December 31, 2022 includes current tax expense of $14.7 million related to the repatriation of profit from certain Asian subsidiaries to their parent company in the Netherlands. The decision to repatriate these profits was the result of our goal to reduce our balance sheet exposure and corresponding earnings volatility related to changes in foreign currency exchange rates as well as to fund our deployment of capital.

 
 

Free cash flow

($ in thousands)

 

Three months ended

December 31,

 

Full year ended

December 31,

 

 

 

2023

 

 

 

2022

 

 

% Change

 

 

2023

 

 

 

2022

 

 

% Change

Net cash provided by operating activities

 

$

105,098

 

 

$

224,860

 

 

(53.3

%)

 

$

456,675

 

 

$

460,593

 

 

(0.9

%)

Additions to property, plant and equipment and capitalized software

 

 

(48,385

)

 

 

(39,640

)

 

(22.1

%)

 

 

(184,609

)

 

 

(150,064

)

 

(23.0

%)

Free cash flow

 

$

56,713

 

 

$

185,220

 

 

(69.4

%)

 

$

272,066

 

 

$

310,529

 

 

(12.4

%)

 
 

Adjusted corporate and other expenses

 

 

Three months ended

December 31,

 

Full year ended

December 31,

(in thousands)

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Corporate and other expenses (GAAP)

 

$

(414,220

)

 

$

(65,535

)

 

$

(633,242

)

 

$

(294,429

)

Restructuring related and other (1)

 

 

345,594

 

 

 

(1,229

)

 

 

366,509

 

 

 

11,896

 

Financing and other transaction costs

 

 

1,205

 

 

 

4,233

 

 

 

6,771

 

 

 

15,726

 

Step-up depreciation and amortization

 

 

203

 

 

 

286

 

 

 

903

 

 

 

1,181

 

Deferred gain on derivative instruments

 

 

(218

)

 

 

(3,213

)

 

 

(4,078

)

 

 

(1,473

)

Total Adjustments

 

 

346,784

 

 

 

77

 

 

 

370,105

 

 

 

27,330

 

Adjusted corporate and other expenses

 

$

(67,436

)

 

$

(65,458

)

 

$

(263,137

)

 

$

(267,099

)

(1)

Includes $321.7 million of charges to impair goodwill in our Insights reporting unit, presented on the consolidated statement of operations in goodwill impairment charge.

 
 

Adjusted EBITDA

 

 

Three months ended

December 31,

 

Full year ended

December 31,

(in thousands)

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

Net (loss)/income

 

$

(202,238

)

 

$

113,150

 

 

$

(3,909

)

 

$

310,685

Interest expense, net

 

 

35,756

 

 

 

43,676

 

 

 

150,860

 

 

 

178,819

(Benefit from)/provision for income taxes

 

 

(39,716

)

 

 

11,988

 

 

 

21,751

 

 

 

86,017

Depreciation expense

 

 

36,228

 

 

 

32,622

 

 

 

133,105

 

 

 

127,184

Amortization of intangible assets

 

 

38,553

 

 

 

39,302

 

 

 

173,860

 

 

 

153,787

EBITDA

 

 

(131,417

)

 

 

240,738

 

 

 

475,667

 

 

 

856,492

Non-GAAP Adjustments

 

 

 

 

 

 

 

 

Restructuring related and other

 

 

345,926

 

 

 

13,140

 

 

 

411,494

 

 

 

38,013

Financing and other transaction costs

 

 

6,700

 

 

 

5,053

 

 

 

21,492

 

 

 

7,504

Deferred (gain)/loss on derivative instruments

 

 

(2,992

)

 

 

(14,466

)

 

 

(2,006

)

 

 

1,877

Adjusted EBITDA

 

$

218,217

 

 

$

244,465

 

 

$

906,647

 

 

$

903,886

 
 

Debt and leverage (gross and net)

 

 

As of

($ in thousands)

 

December 31,

2023

 

December 31,

2022

Current portion of long-term debt and finance lease obligations

 

$

2,276

 

 

$

256,471

 

Finance lease obligations, less current portion

 

 

22,949

 

 

 

24,742

 

Long-term debt, net

 

 

3,373,988

 

 

 

3,958,928

 

Total debt and finance lease obligations

 

 

3,399,213

 

 

 

4,240,141

 

Less: Discount, net of premium

 

 

(1,568

)

 

 

(3,360

)

Less: Deferred financing costs

 

 

(24,444

)

 

 

(29,916

)

Total gross indebtedness

 

$

3,425,225

 

 

$

4,273,417

 

Adjusted EBITDA (LTM)

 

$

906,647

 

 

$

903,886

 

Gross leverage ratio

 

 

3.8

 

 

 

4.7

 

 

 

 

 

 

 

 

As of

($ in thousands)

 

December 31,

2023

 

December 31,

2022

Total gross indebtedness

 

$

3,425,225

 

 

$

4,273,417

 

Less: Cash and cash equivalents

 

 

508,104

 

 

 

1,225,518

 

Net Debt

 

$

2,917,121

 

 

$

3,047,899

 

Adjusted EBITDA (LTM)

 

$

906,647

 

 

$

903,886

 

Net leverage ratio

 

 

3.2

 

 

 

3.4

 

Guidance

 

For the three months ending March 31, 2024

($ in millions, except per share amounts)

Operating Income

 

Net Income

 

EPS

 

Low

 

High

 

Low

 

High

 

Low

 

High

GAAP

$

132.9

 

$

140.9

 

$

73.4

 

$

78.2

 

$

0.48

 

$

0.52

Restructuring related and other

 

1.6

 

 

3.1

 

 

1.6

 

 

3.1

 

 

0.01

 

 

0.02

Financing and other transaction costs

 

1.0

 

 

3.0

 

 

1.0

 

 

3.0

 

 

0.01

 

 

0.02

Step-up depreciation and amortization

 

42.5

 

 

43.0

 

 

42.5

 

 

43.0

 

 

0.28

 

 

0.28

Deferred (gain)/loss on derivative instruments(1)

 

 

 

 

 

 

 

 

 

 

 

Amortization of debt issuance costs

 

 

 

 

 

1.5

 

 

1.7

 

 

0.01

 

 

0.01

Deferred taxes and other tax related

 

 

 

 

 

4.0

 

 

5.0

 

 

0.03

 

 

0.03

Non-GAAP

$

178.0

 

$

190.0

 

$

124.0

 

$

134.0

 

$

0.82

 

$

0.88

Weighted-average diluted shares outstanding (in millions)

 

 

 

 

 

 

151.7

 

 

151.7

(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.

 

Contacts

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.
 
 
Copyright © 2010-2020 LosAltos.com & California Media Partners, LLC. All rights reserved.