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. ...

Atmus Filtration Technologies Inc. (NYSE:ATMU) Q3 2023 Results Conference Call November 3, 2023 11:00 AM ET Company Participants Todd Chirillo - Head of Investor Relations Steph Disher - Chief Executive Officer Jack Kienzler - Chief Financial Officer Conference Call Participants Tami Zakaria - JPMorgan Joe O'Dea - Wells Fargo Rob Mason - Baird Jerry Revich - Goldman Sachs David Ridley-Lane - Bank of America Operator Good morning. My name is Krista, and I'll be your conference operator today. At this time, I ...

Financial Performance - Net sales for Q3 2023 were $396.2 million, a decrease of 1.2% compared to $401.2 million in Q3 2022[96] - Gross margin increased to $102.9 million in Q3 2023, up 3.2% from $99.7 million in Q3 2022[96] - Operating income decreased to $58.8 million in Q3 2023, down 9.4% from $64.9 million in Q3 2022[96] - Net income for Q3 2023 was $37.6 million, a decline of 25.4% compared to $50.4 million in Q3 2022[96] - Basic and diluted earnings per share were both $0.45 in Q3 2023, down 26.2% from $0.61 in Q3 2022[96] - For the nine months ended September 30, 2023, net sales were $1,228.4 million, an increase of $51.5 million compared to $1,176.9 million for the same period in 2022[111] - Gross margin for the nine months ended September 30, 2023, was $327.1 million, an increase of $50.6 million from $276.5 million in 2022, with a gross margin percentage of 26.6%, up 3.1%[112] - Net income margin for the nine months ended September 30, 2023, was 11.1%, slightly down from 11.4% in the same period of 2022[140] - EBITDA margin for the nine months ended September 30, 2023, was 17.1%, compared to 15.9% for the same period in 2022, showing an improvement of 1.2 percentage points[140] Expenses - Selling, general and administrative expenses increased to $41.3 million in Q3 2023, up 27.9% from $32.3 million in Q3 2022[96] - Research, development, and engineering expenses rose to $11.1 million in Q3 2023, an increase of 13.3% from $9.8 million in Q3 2022[96] - Selling, general and administrative expenses rose to $41.3 million in Q3 2023, an increase of $9.0 million from $32.3 million in Q3 2022, with expenses as a percentage of net sales increasing to 10.4%[102] - Research, development and engineering expenses were $11.1 million in Q3 2023, up $1.3 million from $9.8 million in Q3 2022, representing 2.8% of net sales[103] - Selling, general and administrative expenses for the nine months ended September 30, 2023, were $126.4 million, an increase of $29.1 million from $97.3 million in 2022, with a percentage of net sales at 10.3%[113] - Research, development and engineering expenses for the nine months ended September 30, 2023, were $33.2 million, an increase of $3.5 million from $29.7 million in 2022, representing 2.7% of net sales[114] Cash Flow and Debt - Net cash provided by operating activities increased to $147.3 million for the nine months ended September 30, 2023, up from $87.9 million in the same period of 2022, representing a growth of 67.5%[125] - Net cash provided by financing activities for the nine months ended September 30, 2023, was $21.1 million, a significant improvement from a net cash used of $65.5 million in the same period of 2022[129] - Free cash flow for the nine months ended September 30, 2023, was $117.7 million, up from $65.5 million in the same period of 2022, indicating a growth of 79.8%[144] - Total debt at September 30, 2023, was $600.0 million, with a weighted-average term of 4.2 years, compared to zero debt at December 31, 2022[131] - Capital expenditures for the nine months ended September 30, 2023, were $29.6 million, which is approximately 2.4% of net sales, compared to $22.4 million or 1.9% of net sales for the same period in 2022[127][128] One-Time Expenses - The company incurred approximately $7.4 million in one-time expenses during Q3 2023 related to becoming a standalone public company[94] - The company expects to incur one-time expenses of approximately $30 million to $50 million between December 31, 2022, and December 31, 2024[94] Interest and Tax - Interest expense for Q3 2023 was $11.0 million, a significant increase from $0.3 million in Q3 2022, primarily due to borrowings under the Credit Agreement[105] - The effective tax rate for Q3 2023 was 23.1%, an increase of 1.1% from 22.0% in Q3 2022, driven by a change in the mix of earnings among tax jurisdictions[107] Foreign Currency and Risk Management - The company is exposed to foreign currency exchange rate risks due to its international business presence, which is managed through financial derivative instruments[146] - The company uses foreign currency forward contracts to minimize income volatility from remeasurement of net monetary assets and liabilities[147] - A hypothetical 10% fluctuation in the currencies of outstanding foreign currency contracts would not materially impact the unaudited condensed consolidated financial statements for the three and nine month periods ended September 30, 2023[148] - A 0.125% change in SOFR would result in an annual impact of $0.8 million on interest expense based on outstanding borrowings as of September 30, 2023[149] Outlook - The company anticipates that operating cash flow and other sources of liquidity will be sufficient to meet both short- and long-term financial commitments[123]

Table of Contents Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, $0.0001 par value ATMU New York Stock Exchange UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ___________________________ FORM 10-Q ___________________________ (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 OR oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITI ...