NASHVILLE, Tenn.--(BUSINESS WIRE)--Atmus Filtration Technologies Inc. (Atmus; NYSE: ATMU), a global leader in the filtration industry, announced today that its Board of Directors has declared a quarterly cash dividend in the amount of $0.055 per common share, payable on December 10, 2025 to shareholders of record at the close of business on November 25, 2025. About Atmus Filtration Technologies Inc. Atmus Filtration Technologies Inc. is a global leader in filtration and media solutions. For mor. ...

Revenue and Sales Performance - Approximately 14% of net sales in 2024 were generated through first-fit sales to OEMs, while 86% were from the aftermarket, indicating a strong recurring revenue base [87]. - During the first nine months of 2025, aftermarket demand remained soft, and first-fit demand experienced a reduction due to depressed market conditions, expected to continue through 2025 [98]. - Net sales for the three months ended September 30, 2025, were $447.7 million, an increase of $44.0 million or 10.9% compared to $403.7 million for the same period in 2024 [105]. - For the nine months ended September 30, 2025, net sales were $1,317.7 million, an increase of $54.8 million or 4.3% compared to $1,262.9 million in 2024 [112]. Financial Performance - Gross margin increased to $129.4 million for the three months ended September 30, 2025, up $18.1 million or 16.3% from $111.3 million in 2024, with a gross margin percentage of 28.9% [106]. - Operating income rose to $81.9 million for the three months ended September 30, 2025, an increase of $18.7 million or 29.6% compared to $63.2 million in 2024 [104]. - Net income for the three months ended September 30, 2025, was $54.8 million, reflecting an increase of $11.0 million or 25.1% from $43.8 million in 2024 [104]. - Basic earnings per share increased to $0.67 for the three months ended September 30, 2025, up $0.14 or 26.4% from $0.53 in 2024 [104]. - Gross margin for the nine months ended September 30, 2025, was $370.9 million, an increase of $15.9 million or 4.5% from $355.0 million in 2024, maintaining a gross margin percentage of 28.1% [113]. - Interest expense decreased to $25.4 million for the nine months ended September 30, 2025, down $6.0 million or 19.1% from $31.4 million in 2024 [117]. - The effective tax rate for the nine months ended September 30, 2025, was 22.3%, an increase of 1.4 percentage points compared to 20.9% in 2024 [119]. - EBITDA for the nine months ended September 30, 2025, was $252.8 million, compared to $233.1 million for the same period in 2024, reflecting a year-over-year increase of 8.0% [139]. - Adjusted EBITDA for the nine months ended September 30, 2025, was $268.3 million, up from $251.8 million in the same period of 2024, indicating a growth of 6.3% [139]. - Free cash flow for the nine months ended September 30, 2025, was $117.6 million, significantly higher than $46.8 million for the same period in 2024 [142]. - Adjusted earnings per share for the nine months ended September 30, 2025, increased to $2.04, compared to $1.92 for the same period in 2024 [140]. - Net income margin improved to 12.1% for the nine months ended September 30, 2025, compared to 11.5% for the same period in 2024 [139]. Expenses and Costs - The company incurred approximately $3.7 million in one-time expenses during the three months ended September 30, 2025, and approximately $15.5 million for the nine months ended September 30, 2025, primarily related to becoming a standalone public company [103]. - Logistics costs increased during the first nine months of 2025, primarily due to the transition to a standalone distribution network and the impact of tariffs [99]. - The company continues to evaluate opportunities to offset costs and mitigate the impact of evolving tariffs and policy changes on profitability [88]. - Capital expenditures for the nine months ended September 30, 2025, were $37.6 million, approximately 2.9% of net sales, compared to $38.6 million or 3.1% of net sales for the same period in 2024 [127]. - Dividends paid increased to $12.7 million in the first nine months of 2025, compared to $4.2 million in the same period of 2024 [129]. Debt and Financing - The company entered into a $1.0 billion credit agreement, which included a $600 million term loan facility and a $400 million revolving credit facility, with borrowings available post-IPO [92]. - As of September 30, 2025, the company had $577.5 million in outstanding borrowings on its $1.0 billion Credit Agreement, with $400 million available under the revolving credit facility [120]. - Total debt decreased to $577.5 million at September 30, 2025, from $592.5 million at December 31, 2024 [133]. - A 0.125% change in SOFR would result in an annual impact of $0.7 million on interest expense based on outstanding borrowings as of September 30, 2025 [147]. Currency and Market Risks - The depreciation of the U.S. dollar against certain foreign currencies had an unfavorable impact on the condensed consolidated results of operations in the first nine months of 2025 [102]. - Atmus is exposed to foreign currency exchange rate risks due to its international business presence, with a potential gain or loss in the fair value of outstanding foreign currency contracts estimated at approximately $9.0 million for a hypothetical 10% fluctuation [146]. Corporate Structure and Transition - The IPO was completed on May 30, 2023, with Cummins owning approximately 80.5% of the outstanding shares at that time [91]. - The company has incurred capital expenditures of approximately $9.5 million in 2025 related to the Separation, primarily for establishing functions previously co-mingled with Cummins [103]. - The transition services agreement with Cummins ended in September 2025, and no additional one-time expenses or capital expenditures are expected in 2025 or future periods [103].

Financial Data and Key Metrics Changes - Sales for Q3 2025 were $448 million, an increase of 10.9% compared to $404 million in Q3 2024, driven by higher volumes, pricing, and favorable foreign exchange [9][13] - Adjusted EBITDA was $92 million, or 20.4%, compared to $79 million, or 19.6% in the prior period [15] - Adjusted earnings per share increased to $0.69 from $0.61 year-over-year [15] - Adjusted free cash flow was $72 million, up from $65 million in the prior year [15] - The effective tax rate for Q3 2025 was 23.6%, compared to 18.4% last year, influenced by changes in earnings mix and U.S. tax legislation [15] Business Line Data and Key Metrics Changes - The company experienced a 6% increase in volumes, a 4% increase in pricing, and a 1% contribution from favorable foreign exchange [13][20] - The aftermarket segment is expected to remain flattish year-over-year, with ongoing challenges in freight activity [10][31] Market Data and Key Metrics Changes - The heavy-duty and medium-duty truck markets in the U.S. are expected to decline by 20%-25% [11] - Demand for trucks in India is anticipated to grow, supported by government infrastructure spending [11] - The company raised its total revenue expectations for the year to a range of $1.72-$1.745 billion, reflecting a 3%-4.5% increase compared to the prior year [11] Company Strategy and Development Direction - The company is focused on a four-pillar growth strategy: growing share in First Fit, accelerating profitable growth in the aftermarket, transforming the supply chain, and expanding into industrial filtration markets [6][8] - The operational separation from the former parent company has been completed, allowing the company to focus on growth and redeploy resources [3][4] - The company plans to continue its share repurchase program and has increased its quarterly dividend by 10% [4][5] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to adapt to challenging market conditions and deliver strong operational performance [11][12] - The outlook for the aftermarket remains cautious, with expectations of continued flat conditions through the first half of 2026 [31] - The company is optimistic about its growth strategy and the potential for share gains, particularly in the aftermarket and First Fit applications [21][22] Other Important Information - The company has completed its separation activities from Cummins and does not anticipate incurring additional one-time costs related to this in Q4 [15][36] - The company has a strong liquidity position with $218 million in cash and a $400 million revolving credit facility, providing operational flexibility [16] Q&A Session Summary Question: Insights on stronger-than-expected performance and share gains - Management noted that the strong quarter was driven by 8% share gains, despite market headwinds of 2% [20][21] Question: Details on volume growth impact from Stellantis - Management indicated that the 44% increase in Ram volumes was significant but not expected to repeat in future quarters [27][28] Question: Clarification on aftermarket pacing and its sustainability - Management expects the flat aftermarket conditions to persist through the first half of 2026, with no signs of improvement yet [31] Question: Opportunities from the operational separation - Management expressed excitement about focusing resources on growth following the completion of the separation [33][36] Question: Impact of Section 232 tariffs on pricing - Management confirmed ongoing evaluation of tariff implications and plans for price-cost neutrality [39] Question: Positioning for growth in data center engine capacity - Management is targeting new business development in both aftermarket and First Fit applications, while acknowledging limited aftermarket benefits from gensets [41][42] Question: Potential benefits from First Brands' bankruptcy - Management is actively seeking to expand aftermarket coverage and gain market share through existing and new partnerships [44][45]

Financial Performance - Q3 2025 - Sales reached $448 million, compared to $404 million in the same period of 2024[9, 29] - Adjusted EBITDA stood at $92 million, resulting in an Adjusted EBITDA margin of 20.4%[9, 29] - Adjusted earnings per share (EPS) was $0.69[9, 29] - Adjusted Free Cash Flow was $72 million[9] - Net income was $55 million, with diluted earnings per share at $0.66[10, 29] Balance Sheet and Capital Allocation - The company has $618 million in liquidity[32] - Net Debt to Adjusted EBITDA ratio is 1.0x[32] - $30 million of share repurchases were executed in Q3 2025, with $61 million repurchased year-to-date[32] - The quarterly dividend was increased by 10% to $0.055 per share[32] 2025 Outlook - Sales are projected to be in the range of $1.72 billion to $1.745 billion[33] - Adjusted EBITDA margin is expected to be between 19.50% and 20.0%[33] - Adjusted earnings per share are forecasted to be $2.50 to $2.65[33]

Core Insights - Atmus Filtration Technologies (ATMU) reported quarterly earnings of $0.69 per share, exceeding the Zacks Consensus Estimate of $0.61 per share, and up from $0.61 per share a year ago [1][2] - The company achieved revenues of $447.7 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 7.84% and increasing from $403.7 million year-over-year [3] Earnings Performance - The earnings surprise for the quarter was +13.11%, following a previous quarter surprise of +13.64% [2] - Atmus Filtration has consistently surpassed consensus EPS estimates over the last four quarters [2] Stock Performance - Atmus Filtration shares have increased approximately 18.7% since the beginning of the year, outperforming the S&P 500's gain of 14.3% [4] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.59 on revenues of $419.78 million, and for the current fiscal year, it is $2.57 on revenues of $1.7 billion [8] - The estimate revisions trend prior to the earnings release was unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [7] Industry Context - The Pollution Control industry, to which Atmus Filtration belongs, is currently ranked in the bottom 26% of over 250 Zacks industries, suggesting potential challenges ahead [9]

Financial Performance - Atmus reported net sales of $448 million for Q3 2025, a 10.9% increase from $404 million in Q3 2024[5] - GAAP net income for Q3 2025 was $55 million, or $0.66 diluted earnings per share, compared to $44 million, or $0.52 diluted earnings per share in Q3 2024[9] - Adjusted EBITDA for Q3 2025 was $92 million, with an adjusted EBITDA margin of 20.4%, up from $79 million and 19.6% in Q3 2024[8] - The gross margin increased to $129 million, representing 28.9% of net sales, compared to $111 million and 27.6% in the same period last year[7] - Net income for the nine months ended September 30, 2025, was $159.4 million, compared to $145.5 million for the same period in 2024, reflecting an increase of 9.9%[27] - Basic earnings per share rose to $0.67 for the three months ended September 30, 2025, compared to $0.53 in 2024, marking a growth of 26.4%[29] - Adjusted EBITDA for the three months ended September 30, 2025, was $91.5 million, up from $79.1 million in 2024, indicating a 15.3% increase[31] - The net income margin improved to 12.2% for the three months ended September 30, 2025, compared to 10.8% in 2024[31] Cash Flow and Assets - Cash provided by operating activities was $82 million in Q3 2025, compared to $71 million in Q3 2024[10] - Adjusted free cash flow was $72 million in Q3 2025, an increase from $65 million in Q3 2024[11] - Free cash flow for the three months ended September 30, 2025, was $68.9 million, compared to $54.3 million in 2024, representing a growth of 26.8%[36] - Cash and cash equivalents at the end of the period increased to $218.3 million from $196.8 million, a rise of 10.7%[27] - Total assets increased to $1,339.1 million as of September 30, 2025, up from $1,190.3 million at December 31, 2024, representing a growth of 12.5%[25] Debt and Shareholder Returns - Long-term debt decreased to $547.5 million as of September 30, 2025, from $570.0 million at December 31, 2024, a reduction of 4.4%[25] - The company repurchased $59.8 million of common stock during the nine months ended September 30, 2025, compared to $10.0 million in 2024[27] - A quarterly cash dividend of $0.055 per share was declared, marking a 10% increase from the previous quarter[3] Operational Changes - Atmus completed its operational separation from Cummins Inc., gaining full operational control over its distribution network[4] - The company raised its revenue guidance for 2025 to a range of $1,720 million to $1,745 million[6] Taxation - The effective tax rate for Q3 2025 was 23.6%[10]

Core Insights - Atmus Filtration Technologies reported a strong financial performance for the third quarter of 2025, with net sales increasing by 10.9% year-over-year to $448 million, driven by higher volume, pricing increases, and favorable currency impacts [5][7][21] - The company has completed its operational separation from Cummins Inc., achieving full operational control and a fully integrated distribution network [4][5] - Atmus has raised its guidance for 2025, indicating positive expectations for future performance [3] Financial Performance - Net sales for Q3 2025 were $448 million, up from $404 million in Q3 2024 [5][21] - Gross margin increased to $129 million, representing 28.9% of net sales, compared to 27.6% in the same period last year [6][21] - GAAP net income was $55 million, or $0.66 per diluted share, compared to $44 million, or $0.52 per diluted share in Q3 2024 [9][21] - Adjusted EBITDA was $92 million, with an adjusted EBITDA margin of 20.4%, up from $79 million and 19.6% in Q3 2024 [8][21] Cash Flow and Shareholder Returns - Cash provided by operating activities was $82 million, an increase from $71 million in Q3 2024 [10][11] - Adjusted free cash flow was $72 million, compared to $65 million in the same quarter last year [11] - The company repurchased $30 million of common stock under its $150 million share repurchase program and declared a quarterly cash dividend of $0.055 per share, a 10% increase from the previous quarter [3][32] Operational Developments - The operational separation from Cummins Inc. has been completed, marking a significant milestone for Atmus [4][5] - The company has established a fully integrated distribution network, enhancing its operational capabilities [4]

Company Announcement - Atmus Filtration Technologies Inc. will report its financial results for the third quarter of 2025 on November 7, 2025, before market open [1] - A conference call will be held on the same day at 10:00 AM CT to discuss the financial results with the investment community [1][2] Company Overview - Atmus Filtration Technologies Inc. is a global leader in filtration and media solutions, with over 65 years of experience in designing and manufacturing filtration solutions [3] - The company operates on six continents and serves various markets, including truck, bus, agriculture, construction, mining, marine, and power generation [3] - Atmus is headquartered in Nashville, Tennessee, and employs approximately 4,500 people globally [3] Recent Developments - Atmus Filtration Technologies has released its inaugural Sustainability Report for 2023-2024, outlining its approach to sustainability [5] - The company has declared a quarterly cash dividend of $0.055 per common share, marking a 10% increase from the previous dividend of $0.05 [6] - For the second quarter of 2025, Atmus reported net sales of $454 million, GAAP net income of $60 million, and diluted earnings per share of $0.72 [7]

Industry Overview - The Zacks Pollution Control industry is experiencing strong demand for air pollution control products due to increasing greenhouse gas emissions and associated health risks [1] - Stringent regulations and emission standards globally are expected to continue driving demand for industry participants [1][5] Major Trends - Rapid urbanization and rising greenhouse gas emissions from the industrial sector are increasing the demand for air quality control systems [4] - Public awareness of health risks related to air pollution is fueling market growth [4] - The expansion of infrastructure projects in developing countries is boosting demand for pollution abatement equipment [4] - Strict emission standards and laws implemented globally are augmenting demand for pollution-control equipment [5] - The adoption of AI and IoT in industrial processes is enabling real-time monitoring of air pollution sources, driving demand for pollution abatement technologies [5] Challenges - The growing preference for renewable energy sources is restraining demand for industrial emission-abatement products [6] - Supportive government policies for renewable energy and the rapid adoption of electric vehicles are negatively impacting the industry's prospects [6] Industry Performance - The Zacks Pollution Control industry has underperformed the broader Industrial Products sector and the S&P 500 index over the past year, declining 7.3% compared to the sector's increase of 9.6% and the S&P 500's increase of 15.5% [9] Valuation - The industry is currently trading at a forward P/E ratio of 20.20X, compared to the S&P 500's 22.85X and the sector's 19.81X [12] Key Companies - **Atmus Filtration**: A leader in industrial filtration with a Zacks Rank 2 (Buy), has seen a 32.3% share price increase over the past year [17][18] - **Donaldson Company**: Engaged in manufacturing filtration systems, holds a Zacks Rank 2, and has gained 1% in the past year [21][22] - **Fuel Tech**: Develops air pollution control technology, with a Zacks Rank 2 and a 163.9% share price increase over the past year [25][26] - **Tetra Tech**: Provides consulting and engineering services, holds a Zacks Rank 3 (Hold), and has seen a 20.1% increase in shares over the past six months despite a 23.5% decline over the past year [29][30]

Revenue and Sales Performance - Approximately 14% of net sales in 2024 were generated through first-fit sales to OEMs, while 86% were from the aftermarket, indicating a strong recurring revenue base [85]. - During the first half of 2025, aftermarket demand remained soft, and first-fit demand experienced a reduction due to depressed market conditions, expected to continue through the second half of 2025 [96]. - Net sales for the three months ended June 30, 2025, were $453.5 million, an increase of $20.9 million or 4.8% compared to $432.6 million for the same period in 2024 [104]. - For the six months ended June 30, 2025, net sales were $870.0 million, an increase of $10.8 million or 1.3% compared to $859.2 million for the same period in 2024 [112]. Financial Performance - Net income for the three months ended June 30, 2025, was $59.9 million, an increase of $3.7 million or 6.6% compared to $56.2 million for the same period in 2024 [109]. - The company reported net income of $104.6 million for the six months ended June 30, 2025, compared to $101.7 million for the same period in 2024, with a net income margin of 12.0% [139]. - Adjusted EBITDA for the six months ended June 30, 2025, was $176.8 million, compared to $172.7 million for the same period in 2024, with an adjusted EBITDA margin of 20.3% [139]. Expenses and Costs - The company incurred approximately $11.8 million in one-time expenses during the six months ended June 30, 2025, with expectations of incurring an additional $10 million to $15 million in 2025 related to becoming a standalone public company [101]. - Logistics costs increased during the first half of 2025 primarily due to the impact of tariffs, contributing to significant volatility and uncertainty in global demand [86]. - Selling, general and administrative expenses decreased to $46.1 million for the three months ended June 30, 2025, down $3.0 million or 6.1% from $49.1 million in 2024, representing 10.2% of net sales [106]. - Research, development and engineering expenses were $10.7 million for the three months ended June 30, 2025, an increase of $0.3 million compared to $10.4 million for the same period in 2024, maintaining 2.4% of net sales [107]. - Interest expense decreased to $8.5 million for the three months ended June 30, 2025, down $2.0 million or 19.0% from $10.5 million in 2024 [108]. Capital Expenditures and Cash Flow - The company expects to incur capital expenditures of approximately $10 million to $15 million in 2025 in connection with the Separation, primarily for establishing functions previously co-mingled with Cummins [101]. - Capital expenditures for the six months ended June 30, 2025, were $24.4 million, representing approximately 2.8% of net sales, compared to $22.2 million or 2.6% of net sales for the same period in 2024 [127]. - Net cash provided by operating activities increased to $73.1 million for the six months ended June 30, 2025, up from $14.7 million in the same period of 2024, reflecting a $58.4 million increase driven by lower working capital requirements [125]. - Free cash flow for the six months ended June 30, 2025, was $48.7 million, a significant increase from a negative $7.5 million in the same period of 2024 [141]. Debt and Financing - The company borrowed $650 million from a credit agreement upon completion of its IPO, which included a $600 million term loan and a $400 million revolving credit facility [90]. - As of June 30, 2025, the company had outstanding borrowings of $585.0 million on a $1.0 billion Credit Agreement, with $400 million available under the revolving credit facility [120]. - Total debt decreased to $585.0 million at June 30, 2025, from $592.5 million at December 31, 2024, with a weighted-average term of 2.4 years [132]. - Net cash used in financing activities was $45.9 million for the six months ended June 30, 2025, primarily due to stock repurchases, dividends paid, and term loan payments, compared to $0.0 million in the same period of 2024 [128]. Tax and Dividends - The effective tax rate for the six months ended June 30, 2025, was 21.6%, a decrease of 0.3 percentage points compared to 21.9% for the same period in 2024 [119]. - Dividends paid in the first six months of 2025 totaled $8.3 million, with a dividend of $0.05 per share declared for both the first and second quarters [129]. Separation and Market Conditions - The full separation from Cummins was completed on March 18, 2024, resulting in the divestiture of Cummins' entire ownership and voting interest in Atmus [92]. - The company is facing significant customer concentration among major clients such as Cummins, PACCAR, and the Traton Group, which poses risks to its financial performance [81]. - The company anticipates ongoing challenges related to supply chain conditions, including variability in material costs and potential disruptions [98]. Foreign Currency and Interest Rate Risks - Atmus is exposed to foreign currency exchange rate risks due to its international business presence, managing this risk through financial derivative instruments for hedging purposes [143]. - Atmus enters into foreign currency forward contracts to minimize income volatility from remeasurement of net monetary assets and liabilities, aiming to offset gains or losses from remeasurement with those from the forward contract [144]. - A hypothetical 10% fluctuation in the currencies of outstanding foreign currency contracts would not materially impact the unaudited condensed consolidated financial statements for the periods ended June 30, 2025, and June 30, 2024 [145]. - The interest rate risk is primarily related to a $600 million term loan facility and a $400 million revolving credit facility, with interest rates varying based on loan type and benchmarks [147]. - A 0.125% change in SOFR would result in a $0.7 million annual impact on interest expense based on outstanding borrowings as of June 30, 2025 [147].