DENVER, April 8, 2025 /PRNewswire/ -- Gates Industrial Corporation plc (NYSE:GTES) will issue its first-quarter earnings release before the market opens on Wednesday, April 30, 2025. Management will host a webcast and conference call on the same day at 10:00 a.m. Eastern time to discuss Gates Industrial's financial results. The conference call can be accessed as follows: By dialing (888) 414-4601 (domestic) or +1 (646) 960-0313 (international) and requesting the Gates Industrial Corporation First-Quarter 2 ...

Core Insights - Gates has launched the Data Master MegaFlex, a large-diameter cooling hose designed for high-density digital infrastructure, expanding its data center product portfolio [1][5] - The new hose is engineered for high-flow liquid cooling systems, addressing the thermal loads of high-density server environments [2][4] - The Data Master MegaFlex features a significantly tighter minimum bend radius, allowing for easier installations and greater design flexibility compared to traditional hoses [3] Product Features - The Data Master MegaFlex is available in sizes ranging from 1.25" to 2", facilitating higher-volume and faster coolant flow [4] - It is constructed with a peroxide-cured EPDM tube, ensuring compatibility with various coolant types and supporting system longevity [4] - The hose is designed to minimize performance degradation over time, which is crucial for liquid-cooled data centers [4] Company Commitment - Gates emphasizes its commitment to innovation in data center cooling solutions, positioning itself as a trusted partner for next-generation data center infrastructure [5] - The Data Master MegaFlex will be available starting April 2025, indicating the company's proactive approach to meet market demands [5]

Group 1 - The article revisits a bullish thesis on Gates Industrial Corporation, which specializes in engineered power transmission and fluid power solutions [1] - The focus of the investment service is on cash flow and companies that generate it, highlighting value and growth prospects in the oil and natural gas sector [1] - Subscribers have access to a stock model account, detailed cash flow analyses of exploration and production firms, and live discussions about the sector [2] Group 2 - A promotional offer is available for a two-week free trial, encouraging engagement with the oil and gas investment community [3]

Financial Performance - Net sales for Fiscal 2024 were $3,408.2 million, a decrease of 4.5% compared to $3,570.2 million in Fiscal 2023[199] - Cost of sales decreased by 7.3% to $2,049.7 million in Fiscal 2024 from $2,211.3 million in the prior year[201] - Gross profit remained relatively stable at $1,358.5 million in Fiscal 2024 compared to $1,358.9 million in Fiscal 2023[199] - Selling, general and administrative expenses decreased to $870.0 million in Fiscal 2024 from $882.2 million in the prior year, a reduction of $12.2 million[203] - Operating income from continuing operations increased to $478.7 million in Fiscal 2024, up from $462.6 million in Fiscal 2023[199] - Net income from continuing operations was $220.5 million in Fiscal 2024, down from $257.0 million in the previous year[199] - Adjusted EBITDA for Fiscal 2024 was $761.1 million, compared to $747.0 million in Fiscal 2023[199] Sales Breakdown - Sales into replacement channels accounted for approximately 68% of total net sales in Fiscal 2024[195] - Power Transmission net sales for Fiscal 2024 decreased by 3.8% to $2,108.1 million, driven by lower volumes and adverse currency exchange rates[218] - Fluid Power net sales for Fiscal 2024 decreased by 5.7% to $1,300.1 million, primarily due to lower volumes and adverse currency exchange rates[221] - Core sales for the year ended December 28, 2024, were $3,444.6 million, reflecting a decline of $125.6 million or 3.5% on a core basis[257] - The impact of currency rate movements on net sales was $36.4 million for the year ended December 28, 2024[257] Tax and Income - The effective tax rate for Fiscal 2024 was 32.8%, significantly higher than 9.9% in Fiscal 2023[211] - The company recognized a deconsolidation loss of $12.7 million related to the suspension of operations in Russia during Fiscal 2024[198] Cash Flow and Investments - Cash provided by operating activities was $379.6 million in Fiscal 2024, down from $481.0 million in the prior year, primarily due to a decrease in trade working capital[228] - Net cash used in investing activities increased to $104.4 million in Fiscal 2024, driven by higher capital expenditures and cash derecognition from the deconsolidation of a subsidiary[229] - Net cash used in financing activities was $286.7 million in Fiscal 2024, including $176.1 million for share repurchases[230] Debt and Liquidity - Long-term debt as of December 28, 2024, was $2,350.6 million, a decrease from $2,451.5 million in the prior year[232] - The company does not anticipate any material long-term deterioration in its overall liquidity position in the foreseeable future[227] - The company expects to finance future cash requirements with cash on hand, cash flows from operations, and borrowings under its secured revolving credit facility[224] - On June 4, 2024, the company issued new Dollar Senior Notes due 2029 amounting to $500.0 million and fully redeemed existing Dollar Senior Notes due 2026 totaling $568.0 million, incurring $13.7 million in accrued interest[235] - A voluntary principal debt repayment of $100.0 million was made against the 2021 Dollar Term Loans in February 2024, resulting in the accelerated recognition of $1.0 million of deferred issuance costs[236] - The company increased borrowing capacity under its revolving credit facility from $250.0 million to $500.0 million on June 4, 2024, extending maturity to June 4, 2029[240] - Total committed borrowing headroom as of December 28, 2024, was $471.8 million, alongside cash balances of $682.0 million[245] Assets and Liabilities - As of December 28, 2024, non-guarantor subsidiaries represented approximately 73% of net sales and 65% of EBITDA, with total assets of approximately 66% and total liabilities of about 25%[244] - The company’s total contractual obligations as of December 28, 2024, amounted to $3,357.8 million, including $2,363.5 million in principal debt and $700.0 million in interest payments[248] Impairment and Tax Assets - The fair value of the reporting units exceeded their carrying values, resulting in no goodwill impairments recognized during Fiscal 2024[272] - The discount rates used in the impairment tests of goodwill were 11.3% and 10.7% for the Power Transmission and Fluid Power reporting units, respectively[271] - The discount rate used in the Fiscal 2024 impairment test for indefinite-lived intangible assets was 12.0%, with no impairment recognized[277] - Deferred income tax assets of $5.5 million in Türkiye, $3.7 million in Poland, and $3.4 million in the U.S. are not realizable due to net operating losses[283] - The company has established valuation allowances against certain deferred income tax assets until sufficient evidence supports their reduction[283] Risk Management - The company maintains a liquidity risk management strategy by diversifying funding sources and staggering debt maturities[295] - Credit ratings are Ba3 Stable with Moody's and BB- Stable with Standard & Poor's, subject to regular review[296] - The company actively monitors third-party depository institutions to mitigate credit risk associated with cash and short-term investments[298] Customer Concentration - Two customers accounted for 13.7% and 6.1% of total trade accounts receivable as of December 28, 2024, compared to 12.5% and 9.6% as of December 30, 2023[301]

Financial Data and Key Metrics Changes - Adjusted EBITDA margins increased by 140 basis points, exceeding initial forecasts despite a challenging demand environment [9] - Record adjusted earnings per share and adjusted EBITDA dollars achieved in 2024 [10] - Total revenue for Q4 was $829 million, a 2.6% decrease on a core basis, and down just under 4% including unfavorable foreign currency effects [17] - Adjusted EBITDA for Q4 was $181 million, yielding a margin of 21.8%, an increase of 30 basis points [19] - Free cash flow conversion for Q4 was 168%, bringing the full year to 74% [15] Business Line Data and Key Metrics Changes - Power Transmission segment revenues were $520 million, translating to a 1% decrease on a core basis, with OEM demand under pressure [21] - Fluid Power segment sales were $309 million, with a core sales decrease of approximately 5% [22] - Personal mobility core growth increased approximately 20%, marking the first growth in seven quarters [13] Market Data and Key Metrics Changes - North American core sales declined approximately 3%, primarily affected by lower OEM demand [26] - EMEA core sales fell just over 6%, with OEM sales decreasing double digits [27] - Asian business showed signs of industrial recovery, with core sales growing modestly [25] Company Strategy and Development Direction - The company is positioned to capitalize on a potential industrial demand recovery in 2025 and is focused on achieving midterm targets [10] - Investments in enterprise initiatives and system enhancements are expected to drive future profitability [34][45] - The company aims for a 2026 target net leverage ratio of 1 to 2x [16] Management's Comments on Operating Environment and Future Outlook - Management believes they are at or near trough demand levels in some end markets, with green shoots observed in others [16] - The company is optimistic about the potential for industrial recovery, supported by positive indicators such as the January PMI [84] - Management has not embedded significant market recovery in their forward guidance for 2025 [118] Other Important Information - The company repurchased $175 million of its stock during the year to facilitate Blackstone's exit [10] - The company is budgeting about a 3% headwind from foreign exchange for 2025, with greater impact expected in the first half [36] Q&A Session Summary Question: Can you provide insight into margin levers and efficiency savings? - Management indicated that significant margin upside is expected from enterprise initiatives, with FX being a major headwind [62] Question: What are the expectations for the Ag and construction markets in 2025? - Management anticipates continued challenges in Ag and construction, with expectations of mid-single-digit declines [99] Question: How is the company positioned in the data center market? - The company is ramping up engagement with various customers and is in different stages of design and testing [140] Question: What is the outlook for the automotive aftermarket? - The automotive aftermarket is performing well, with expectations for continued growth driven by market share gains [108] Question: How does the company view customer optimism? - Management acknowledges customer optimism but emphasizes the need for hard data to confirm any recovery [118]

Q4 2024 EARNINGS PRESENTATION FEBRUARY 6, 2025 1 LEGAL DISCLAIMERS 2 CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This presentation contains, and management may make on our call today, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In some cases, you can identify these forward-looking statements by the use of words such as "outlook," "believes," "expects," "potential," "contin ...

Core Insights - Gates Industrial (GTES) reported revenue of $829.4 million for Q4 2024, a year-over-year decline of 3.9% and an EPS of $0.36 compared to $0.39 a year ago, exceeding the Zacks Consensus Estimate of $818.28 million by 1.36% and delivering an EPS surprise of 5.88% [1] Financial Performance - Net Sales in Fluid Power amounted to $309.40 million, slightly below the average estimate of $310.74 million, reflecting a year-over-year decline of 6.4% [4] - Net Sales in Power Transmission reached $520 million, surpassing the average estimate of $507.05 million, with a year-over-year change of -2.4% [4] - Adjusted EBITDA for Fluid Power was reported at $67.90 million, exceeding the average estimate of $66 million [4] - Adjusted EBITDA for Power Transmission was $112.90 million, also above the average estimate of $110.66 million [4] Market Performance - Gates Industrial shares have returned +3.3% over the past month, outperforming the Zacks S&P 500 composite's +2.1% change [3] - The stock currently holds a Zacks Rank 5 (Strong Sell), indicating potential underperformance relative to the broader market in the near term [3]

Company Performance - Gates Industrial (GTES) reported quarterly earnings of $0.36 per share, exceeding the Zacks Consensus Estimate of $0.34 per share, but down from $0.39 per share a year ago [1] - The earnings surprise for this quarter was 5.88%, following a previous quarter where the company also surpassed expectations with a surprise of 6.45% [2] - The company posted revenues of $829.4 million for the quarter, surpassing the Zacks Consensus Estimate by 1.36%, but down from $863.3 million in the same quarter last year [3] Market Performance - Gates Industrial shares have increased by approximately 1% since the beginning of the year, while the S&P 500 has gained 3.1% [4] - The current consensus EPS estimate for the upcoming quarter is $0.36 on revenues of $856.19 million, and for the current fiscal year, it is $1.48 on revenues of $3.53 billion [8] Industry Outlook - The Manufacturing - General Industrial industry, to which Gates Industrial belongs, is currently ranked in the bottom 38% of over 250 Zacks industries, indicating potential challenges ahead [9] - The performance of Gates Industrial's stock may be influenced by the overall outlook for the industry, as research indicates that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [9]

Financial Performance - Fourth-quarter net sales were $829.4 million, a decrease of 3.9% compared to $863.3 million in the prior-year quarter, primarily due to lower volume[5]. - Full-year 2024 net sales were $3,408.2 million, representing a 4.5% decline from $3,570.2 million in the prior year, driven by lower volume and unfavorable foreign currency[7]. - Fourth-quarter net income attributable to shareholders was $36.6 million, or $0.14 per diluted share, down from $62.9 million, or $0.24 per diluted share, in the prior-year quarter[8]. - Net income attributable to shareholders for the year ended December 28, 2024, was $194.9 million, down 16.3% from $232.9 million in 2023[30]. - Earnings per share from continuing operations for the year ended December 28, 2024, was $0.75, a decrease of 12.8% compared to $0.86 in 2023[30]. - For the three months ended December 28, 2024, net income from continuing operations was $41.2 million, compared to $69.2 million for the same period in 2023, reflecting a margin of 5.0%[42]. Adjusted EBITDA - Adjusted EBITDA for the fourth quarter was $180.8 million, with a margin of 21.8%, compared to $185.8 million in the prior-year quarter[11]. - Full-year 2024 adjusted EBITDA was $761.1 million, or 22.3% of net sales, an increase from $747.0 million, or 20.9% of net sales, in the prior year[12]. - Adjusted EBITDA for the three months ended December 28, 2024, was $180.8 million, with an Adjusted EBITDA margin of 21.8%, compared to $185.8 million and 21.5% in the prior year[42]. Cash Flow and Capital Expenditures - The company reported a net cash provided by operating activities of $379.6 million for the year ended December 28, 2024, down from $481.0 million in 2023[34]. - Capital expenditures for 2025 are projected to be approximately $120 million[24]. - Free Cash Flow is utilized to measure cash generation, representing net cash provided by operations less capital expenditures[39]. Debt and Stock Repurchase - The company repurchased $175 million of its stock and reduced debt levels during 2024[4]. - As of December 28, 2024, the company had total cash and cash equivalents of $682.0 million and total outstanding debt of $2.4 billion[22]. - Total liabilities decreased to $3,446.0 million as of December 28, 2024, from $3,710.6 million as of December 30, 2023[32]. Sales Growth and Projections - For 2025, the company anticipates core sales growth in the range of (0.5%) to +3.5% year-over-year[24]. - The company expects adjusted EBITDA for 2025 to be between $735 million and $795 million[24]. - Core sales for the three months ended December 28, 2024, were $841.1 million, reflecting a decline of $22.2 million or 2.6% on a core basis[50]. - Core sales for the year ended December 28, 2024, were $3,444.6 million, representing a decline of $125.6 million or 3.5% on a core basis[50]. Risks and Challenges - The company is facing risks related to international operations, supply chain challenges, and market acceptance of new products, which may impact future performance[27]. - The effective tax rate for the three months ended December 28, 2024, was impacted by net discrete tax expenses of $31.7 million, primarily due to changes in tax rates and law changes[48]. Other Financial Items - The company recognized a deconsolidation loss upon loss of control of the Russian subsidiary as of September 28, 2024[48]. - Transaction-related expenses included advisory fees and costs associated with major corporate transactions, impacting overall financial performance[48]. - The company recorded a pre-tax charge related to a customer's bankruptcy proceedings, reflecting estimated recovery from outstanding accounts receivable[48]. - Cybersecurity incident expenses incurred due to a malware attack included legal and consulting costs, with some potential offsets from insurance recoveries[48]. - Interest paid for the period was $132.6 million, while income taxes paid amounted to $122.3 million[35].

DENVER, Feb. 6, 2025 /PRNewswire/ --Fourth-Quarter 2024 Financial Summary Fourth-quarter net sales of $829.4 million, down 3.9% compared to the prior-year period, including a core sales decline of 2.6%. Net income attributable to shareholders of $36.6 million, or $0.14 per diluted share. Adjusted Net Income per diluted share of $0.36. Net income from continuing operations of $41.2 million, or a margin of 5.0%. Adjusted EBITDA of $180.8 million, or a margin of 21.8%.Full-Year 2024 Financial Summary Net sales ...