COLUMBUS, Ind.--(BUSINESS WIRE)--Today, Cummins Inc. (NYSE: CMI) (“Cummins”) announced the final exchange ratio for its previously announced split-off exchange offer to Cummins shareholders to exchange their shares of common stock of Cummins for shares of common stock of Atmus Filtration Technologies Inc. (NYSE: ATMU) (“Atmus”) currently held by Cummins. For each share of Cummins common stock that is validly tendered and not properly withdrawn by shareholders and that is accepted by Cummins pursuant to the ...

Atmus Filtration Technologies (ATMU) closed the last trading session at $22.47, gaining 1.8% over the past four weeks, but there could be plenty of upside left in the stock if short-term price targets set by Wall Street analysts are any guide. The mean price target of $28.17 indicates a 25.4% upside potential.The mean estimate comprises six short-term price targets with a standard deviation of $1.47. While the lowest estimate of $26 indicates a 15.7% increase from the current price level, the most optimisti ...

Atmus Filtration Technologies, Inc. (NYSE:ATMU) Q4 2023 Earnings Conference Call February 14, 2024 11:00 AM ET Company Participants Todd Chirillo - Executive Director, IR Steph Disher - CEO Jack Kienzler - CFO Conference Call Participants Joe O'Dea - Wells Fargo Rob Mason - Baird Jerry Revich - Goldman Sachs Andrew Obin - Bank of America Bobby Brooks - Northland Capital Markets Operator Thank you for standing by and welcome to the Atmus Filtration Technologies' Fourth Quarter and Full Year 2023 Earnings Cal ...

Fourth Quarter and Full Year 2023 Earnings Call Forward Looking Statements This presentation contains forward-looking statements within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995, including, without limitation, those that are based on current expectations, estimates and projections about the industries in which we operate and management’s views, plans, objectives, projections, beliefs and assumptions. Forward-looking statements may be iden ...

NASHVILLE, Tenn.--(BUSINESS WIRE)--Atmus Filtration Technologies Inc. (Atmus; NYSE: ATMU) today announced that it will file a Form S-4 Registration Statement with the Securities and Exchange Commission (the “SEC”) in connection with Cummins’ (NYSE: CMI) offer to exchange up to 67,054,726 shares of Atmus common stock that Cummins owns, representing 80.5% of the total outstanding shares of Atmus common stock, for outstanding shares of Cummins common stock. Pursuant to the exchange offer, Cummins shareholders ...

COLUMBUS, Ind.--(BUSINESS WIRE)--Today, Cummins Inc. (NYSE: CMI) (“Cummins”) announced that it will commence an exchange offer to fully split off its remaining interest in Atmus Filtration Technologies Inc. (NYSE: ATMU) (“Atmus”). In May 2023, Atmus completed its initial public offering where 19.5%, or 16,243,070 shares, of Atmus’ common stock was sold, with Cummins retaining the remaining 80.5% of Atmus’ common stock. Through the planned exchange offer, Cummins shareholders will have the option to exchange ...

Financial Performance - For the year ended December 31, 2023, Atmus generated $1,628.1 million in net sales, $171.3 million in net income, and $302.3 million in adjusted EBITDA[13]. - Atmus achieved a net income margin of 10.5% and an Adjusted EBITDA margin of 18.6% in 2023, demonstrating strong financial performance[44]. - The company reported a 16.7% increase in net sales in 2021, followed by an 8.6% increase in 2022, and a 4.2% increase in 2023 compared to the previous years[44]. - The gross margin for 2023 was $432.7 million, representing a gross margin percentage of approximately 26.6%, compared to $359.2 million in 2022[342]. - Operating income for 2023 was $248.4 million, up from $203.9 million in 2022, indicating a growth of 21.8%[342]. - The company reported a net income of $171.3 million for 2023, slightly up from $170.4 million in 2022, reflecting a growth of 0.5%[342]. - Total assets increased to $1,088.6 million in 2023 from $867.4 million in 2022, marking a growth of 25.5%[349]. - Total liabilities rose to $1,007.9 million in 2023, compared to $411.8 million in 2022, indicating a significant increase of 144.3%[349]. - The company reported a net transfer to Parent of $595.5 million in 2023, compared to $128.2 million in 2022, reflecting a significant increase in capital movement[355]. - The cash and cash equivalents at the end of the period stood at $168.0 million, marking a net increase of $168.0 million during the year[352]. - Other comprehensive loss for 2023 was minimal at $0.4 million, compared to $14.2 million in 2022, indicating improved financial stability[355]. Sales and Market Presence - Atmus estimates that aftermarket net sales represented approximately 81% of its total net sales in 2023[19]. - Atmus' largest customer, Cummins, accounted for approximately 17.4% of its net sales in 2023[35]. - Atmus serves approximately 49% of its net sales from outside the United States and Canada in 2023[24]. - The company supports a diverse customer base across various markets, including oil and gas, agriculture, and construction, with products available in over 140 countries[358]. - Related party sales to Cummins represented 17.4% of net sales in 2023, amounting to $282.5 million, compared to 19.3% in 2022[418]. Product Development and Innovation - Atmus launched approximately 300 new products annually over the last three years, focusing on targeted product releases[19]. - Atmus is focused on enhancing product content per vehicle by offering integrated solutions and smart filtration technologies[17]. - Atmus' research and development expenses were $42.3 million in 2023, $38.5 million in 2022, and $41.6 million in 2021, reflecting ongoing investment in innovation[58]. - Research and development expenses were $42.3 million, $38.5 million, and $41.6 million for the years ended December 31, 2023, 2022, and 2021, respectively, indicating a focus on product improvements and innovations[401]. Market Expansion and Strategy - Atmus plans to expand into the industrial filtration market, which had a total addressable market of approximately $48 billion in 2022, growing at a CAGR of approximately 7%[26]. - Atmus' core markets had a total addressable market of approximately $14 billion in 2022, growing at a CAGR of approximately 4% over the last five years[26]. - The company is focused on expanding its geographic coverage and investing in distribution expansion to better serve its customers[39]. - Atmus has entered into three joint ventures, two in India and one in China, to enhance market penetration and reduce capital spending[79]. - Atmus' joint venture Fleetguard Filters Private Ltd. operates seven manufacturing facilities in India, with Atmus holding 49.491% economic interest[80]. Operational Efficiency - Atmus operates 11 distribution centers and 10 manufacturing sites globally, enhancing its market coverage and operational efficiency[42]. - Material costs represented approximately 57% of Atmus' cost of sales in 2023, a decrease from 61% in 2022[52]. - The company has a large installed base that generates recurring revenue, with aftermarket product sales typically having higher profit margins compared to first-fit systems[40]. Leadership and Workforce - Atmus' leadership team has extensive industry experience, which is crucial for executing its strategic vision and driving growth[45]. - Atmus has a diverse leadership team with 44% of its executive team being female and 22% being ethnically diverse[73]. - Atmus emphasizes leadership development and employee support to enhance workforce capabilities and performance[67]. - Atmus conducts annual compensation studies to ensure competitive pay and incorporates living wage assessments to maintain fair compensation[69]. - Atmus' benefit programs include flexible medical benefits and various paid time-off options to meet employee needs[70]. - Atmus aims for zero serious injury fatalities and promotes a positive safety culture across its operations[72]. Environmental Sustainability - Atmus is committed to environmental sustainability, implementing initiatives like solar panels at its manufacturing sites and water conservation programs[76][77]. - Atmus is focused on reducing environmental impacts through pollution prevention and energy efficiency improvements[74]. Financial Reporting and Compliance - The company plans to provide a management report on internal control over financial reporting starting with the annual report for the year ending December 31, 2024[330]. - The company expects to file tax returns independently post-separation from Cummins, which may result in different effective income tax rates[370]. - The new accounting standards issued by FASB are expected to impact disclosures but not the results of operations or financial condition[411][412]. Taxation and Deferred Taxes - Total current income tax expense increased to $65.1 million in 2023 from $54.3 million in 2022, an increase of 19.5%[430]. - The effective tax rate for 2023 was 24.3%, up from 19.6% in 2022, primarily due to changes in income mix between U.S. and foreign operations[432]. - Total deferred tax assets amounted to $42.1 million in 2023, an increase from $37.6 million in 2022[436]. - Net deferred tax assets increased to $12.8 million in 2023, compared to $7.0 million in 2022[436].

Core Viewpoint - Atmus Filtration Technologies Inc. (ATMU) is expected to report its fourth-quarter 2023 results on February 14, with a history of surpassing earnings estimates in the previous two quarters, averaging a surprise of 23.4% [1] Group 1: Earnings Performance - The company's earnings in the last reported quarter were 52 cents per share, exceeding the Zacks Consensus Estimate of 45 cents by 15.6% [1] - Atmus Filtration has an Earnings ESP of +4.65%, with the Most Accurate Estimate at 45 cents, higher than the Zacks Consensus Estimate of 43 cents [4] Group 2: Growth Factors - The company is expected to benefit from its four-pillar growth strategy, focusing on first-fit markets, aftermarket growth, industrial filtration expansion, and supply-chain optimization [2] - Strong demand in first-fit markets is anticipated to drive top-line performance in the fourth quarter [2] - Product and technology leadership, along with strategic partnerships and the popularity of the Fleetguard brand, are likely to bolster revenues [2] Group 3: Challenges - Weakness in the aftermarket due to lower freight activity and customer destocking may negatively impact performance [3] - Sluggish economic recovery in China is expected to weigh on fourth-quarter results [3] - High capital and R&D investments for technology expansion may affect margin performance [3] - Foreign currency headwinds from substantial international operations could also impact profitability [3] Group 4: Comparative Analysis - Other companies with favorable earnings prospects include Flowserve Corporation (FLS) with an Earnings ESP of +1.22% and a trailing four-quarter earnings surprise of 27.3% [5] - Alarm.com Holdings (ALRM) has an Earnings ESP of +8.79% and a trailing four-quarter earnings surprise of 35% [5] - Nordson Corporation (NDSN) has an Earnings ESP of +3.25% and a trailing four-quarter earnings surprise of 2.6% [6]

If you are looking for a stock that has a solid history of beating earnings estimates and is in a good position to maintain the trend in its next quarterly report, you should consider Atmus Filtration Technologies (ATMU) . This company, which is in the Zacks Pollution Control industry, shows potential for another earnings beat.When looking at the last two reports, this industrial filtration product company has recorded a strong streak of surpassing earnings estimates. The company has topped estimates by 23. ...

Financial Data and Key Metrics Changes - Sales for Q3 2023 were $396 million, a decrease of approximately 1% from Q3 2022, driven by lower volumes partially offset by higher pricing and foreign exchange tailwinds [6][11] - Adjusted EBITDA margin rose 40 basis points to 18.3% compared to the prior year, with adjusted EBITDA of $73 million [6][13] - Adjusted earnings per share was $0.52, down from $0.62 in the same period last year, primarily due to increased interest expense [14] - Adjusted free cash flow improved to $50 million from $42 million in the prior year, attributed to strong working capital management [14] Business Line Data and Key Metrics Changes - The company experienced strong demand in first-fit markets, while aftermarket conditions softened due to lower freight activity and customer destocking [5][6] - Gross margin for the quarter was $103 million, an increase of $3 million compared to Q3 2022, with favorable pricing and improved commodity and freight costs contributing to margin growth [11][12] Market Data and Key Metrics Changes - The China market continues to show sluggish economic recovery, expected to persist through the remainder of the year [5] - Freight indices indicated a decline, with September down 6% year-on-year, contributing to softer demand in the on-highway sector [19] Company Strategy and Development Direction - The growth strategy focuses on four pillars: growing share in first-fit markets, accelerating profitable growth in the aftermarket, transforming the supply chain, and expanding into industrial filtration markets [8][10] - The company aims to leverage its technology leadership in fuel filtration and crankcase ventilation to enhance market share [28] Management's Comments on Operating Environment and Future Outlook - Management noted that destocking impacts are moderating, with expectations for a more stable environment in the fourth quarter [20] - The company raised its full-year 2023 guidance, expecting sales between $1.6 billion and $1.625 billion, with adjusted EBITDA margin in the range of 18% to 18.5% [16][17] Other Important Information - The company fully repaid its revolving credit facility during the quarter, enhancing its liquidity position to $539 million [15] - The effective tax rate for Q3 was 23.1%, an increase from the previous year, primarily due to changes in earnings mix among tax jurisdictions [14] Q&A Session Summary Question: Could you provide more color on the destocking headwinds in on versus off-highway markets? - Management indicated that destocking is largely complete, with expectations for a moderated impact moving into Q4, although demand remains softer in the on-highway aftermarket [20] Question: Any incremental pricing actions since July? - No additional pricing actions have been taken since July, with previous pricing adjustments helping to offset volume downturns [22] Question: What are the key market drivers for Q4? - Management expects continued softness in the aftermarket, with mid-single-digit volume declines anticipated, while first-fit markets remain strong [25] Question: How sustainable is the gross margin level around 26%? - Management noted that while pricing has been a significant factor, they are focused on improving efficiencies and managing input costs moving forward [32] Question: What is embedded in the full-year EBITDA margin guidance for Q4? - The guidance is primarily driven by volume dynamics, with no significant swings expected from freight and commodity costs [42] Question: Should we expect any unusual inventory build as distribution centers are established? - Management does not anticipate a material impact from inventory build, as the transition is being managed effectively [48]