ESAB (US:ESAB)2024-10-29 10:32Financial Performance - ESAB reported third quarter sales of $673 million, a decrease of 1% on a reported basis, but an increase of 1% on a core organic growth basis compared to the prior year[2]. - Net income from continuing operations attributable to ESAB was $69 million, or $1.13 diluted earnings per share, with core adjusted net income of $77 million, or $1.25 diluted earnings per share[2]. - Core adjusted EBITDA for the third quarter was $125 million, representing a 6% increase and a margin expansion of 130 basis points to 19.6% compared to the prior year quarter[2]. - The company reported a net income attributable to ESAB Corporation of $68.2 million for the third quarter, an increase from $57.6 million in the prior year[18]. - Net income from continuing operations for Q3 2024 was $71.0 million, up from $60.8 million in Q3 2023, representing a 19.0% increase[20]. - Adjusted net income for Q3 2024 reached $78.6 million, compared to $69.0 million in Q3 2023, reflecting a 25.0% year-over-year growth[20]. - Adjusted EBITDA for Q3 2024 was $127.4 million, an increase from $122.5 million in Q3 2023, indicating a 4.0% rise[21]. - Adjusted net income margin from continuing operations improved to 11.7% in Q3 2024, compared to 10.2% in Q3 2023[20]. - Core adjusted net income from continuing operations for the nine months ended September 27, 2024, was $232.0 million, up from $203.1 million for the same period in 2023, marking a 14.2% increase[20]. - Adjusted EBITDA margin for Q3 2024 was 18.9%, slightly up from 18.0% in Q3 2023[21]. Sales and Growth Outlook - The company raised its full year 2024 total core sales growth outlook to a range of (1.5)% to (0.5)% and core organic sales growth to 0.0% to 1.0%[4]. - The 2024 core net sales growth range is projected to be between -1.5% and -0.5%[33]. - Organic sales growth in the Americas was 2.0%, while EMEA & APAC experienced a growth of 0.1%[25]. Cash Flow and Investments - ESAB's cash flow remained robust amid a challenging end market environment, enhancing confidence in achieving long-term targets by 2028[3]. - The adjusted free cash flow for the three months ended September 27, 2024, was $95.8 million, compared to $99.9 million for the same period in 2023[31]. - Net cash provided by operating activities was $228,523 thousand, compared to $208,099 thousand in the same period last year, reflecting an increase of about 9.7%[36]. - Net cash used in investing activities rose significantly to $(114,214) thousand, compared to $(42,359) thousand in the prior year, indicating a year-over-year increase of approximately 169%[36]. - Cash and cash equivalents at the end of the period reached $253,670 thousand, a substantial increase from $82,833 thousand at the end of the same period last year, marking a growth of over 206%[36]. Strategic Initiatives - The company emphasized positive volume growth and record margins driven by new product launches and strategic investments in commercial transformation[3]. - The company continues to focus on geographic expansion and bolt-on acquisitions to drive growth[3]. - The company made acquisitions net of cash received totaling $(86,537) thousand, significantly higher than $(18,665) thousand in the prior year, suggesting an aggressive expansion strategy[36]. Cost Management and Charges - Restructuring and related charges for Q3 2024 were $1.9 million, down from $3.1 million in Q3 2023, showing a reduction of 38.7%[20]. - Acquisition-amortization and other related charges for Q3 2024 totaled $10.0 million, compared to $9.3 million in Q3 2023, reflecting a 7.5% increase[20]. - The company experienced a pension settlement loss of $12.2 million for the nine months ended September 27, 2024, compared to no loss reported in the same period of 2023[20]. - The company reported a pension settlement loss of $12,155 thousand, which was not present in the previous year[36]. - Stock-based compensation expense increased to $14,473 thousand, compared to $11,150 thousand in the prior year, reflecting a rise of approximately 30.9%[36]. - Changes in trade receivables resulted in a decrease of $(39,075) thousand, compared to a decrease of $(15,170) thousand in the previous year, indicating a worsening in receivables management[36]. Balance Sheet Highlights - Total current assets increased to $1,221.5 million as of September 27, 2024, compared to $997.7 million at the end of 2023[35]. - Long-term debt rose to $1,080.2 million as of September 27, 2024, up from $1,018.1 million at the end of 2023[35]. - Retained earnings increased to $548.3 million as of September 27, 2024, compared to $350.6 million at the end of 2023[35]. - The company anticipates a currency impact of approximately -2.5% on core net sales for 2024[33].