Atmus Filtration Technologies (US:ATMU)2025-02-21 20:26Financial Performance - For the year ended December 31, 2024, Atmus generated $1,669.6 million in net sales, $185.6 million in net income, and $329.5 million in adjusted EBITDA[13]. - The Company reported cash and cash equivalents of $184.3 million as of December 31, 2024, compared to $168.0 million in 2023, an increase of 9.0%[301]. - Net income for 2024 reached $185.6 million, compared to $171.3 million in 2023, marking an increase of 8.0%[296]. - Basic earnings per share (EPS) for 2024 was $2.23, up from $2.06 in 2023, representing an increase of 8.2%[296]. - Total assets as of December 31, 2024, were $1,190.3 million, an increase from $1,088.6 million in 2023, reflecting a growth of 9.4%[300]. - Total liabilities decreased to $962.9 million in 2024 from $1,007.9 million in 2023, a reduction of 4.5%[300]. - Operating income for 2024 was $266.2 million, up from $248.4 million in 2023, reflecting a growth of 7.3%[296]. - The gross margin for 2024 was $462.1 million, compared to $432.7 million in 2023, indicating a year-over-year increase of 6.5%[296]. - Cash provided by operating activities decreased to $105.4 million in 2024 from $189.0 million in 2023, a decline of 44.3%[303]. - Total current income tax expense decreased to $56.9 million in 2024 from $65.1 million in 2023, a reduction of 11.8%[387]. - The effective tax rate for 2024 was 21.0%, down from 24.3% in 2023, driven by a favorable change in the mix of earnings among tax jurisdictions[388]. Sales and Market Position - Approximately 68% of Atmus' net sales in 2024 came from leading OEMs, with Cummins accounting for 17.6% of net sales[23][24]. - Atmus estimates that approximately 86% of its net sales in 2024 were generated in the aftermarket, with core markets representing 60% on-highway and 40% off-highway[25]. - Major customers, including Cummins, PACCAR, and the Traton Group, accounted for 17.6%, 16.5%, and 12.2% of net sales in 2024, indicating a stable reliance on these key clients[381]. - Revenue from the United States was $782.3 million in 2024, up from $746.5 million in 2023, while other international sales reached $887.3 million, slightly increasing from $881.6 million in 2023[378]. - The fuel product category generated $720.2 million in 2024, a growth of 2.1% from $705.2 million in 2023, while lube and air categories also saw increases to $326.8 million and $288.6 million, respectively[380]. Cost and Expenses - Material costs represented approximately 61% of Atmus' cost of sales in 2024, up from 57% in 2023[35]. - Research, development, and engineering expenses for Atmus were $40.6 million, $42.5 million, and $38.6 million for the years ended December 31, 2024, 2023, and 2022, respectively[41]. - Research, development, and engineering expenses totaled $40.6 million in 2024, a decrease from $42.5 million in 2023, reflecting a focus on cost management[360]. - Capital expenditures for 2024 were $48.6 million, compared to $45.8 million in 2023, reflecting a 6.1% increase[303]. - Operating lease costs increased to $15.7 million in 2024, compared to $10.5 million in 2023, representing a growth of 49.5%[397]. - Total lease liabilities increased to $40.1 million in 2024 from $26.4 million in 2023, indicating a growth of 51.4%[398]. Investments and Patents - Atmus has over 1,200 worldwide active or pending patents and over 650 trademark registrations as of December 31, 2024[38]. - Investments in equity method investees amounted to $84.9 million as of December 31, 2024, compared to $84.8 million in 2023, indicating stable investment levels[382]. - Dividends received from unconsolidated equity investees increased to $25.5 million in 2024, up from $19.8 million in 2023, showcasing improved returns from these investments[383]. Risk Management - Atmus' interest rate risk is primarily related to a $600 million term loan facility and a $400 million revolving credit facility, with a 0.125% change in SOFR potentially impacting annual interest expense by $0.7 million[278]. - Atmus' foreign currency exchange risk is managed through financial derivative instruments, with no material impact expected from a hypothetical 10% fluctuation in currency rates[275]. Corporate Governance and Culture - Atmus' leadership team has extensive industry experience and a proven track record of driving growth and innovation[30]. - The company has a diverse leadership team, with three out of seven directors being female and 38% of the executive team being female[58]. - The company emphasizes a positive safety culture, aiming for zero serious injury fatalities and adhering to international standards for health and safety[55]. - Atmus' annual variable compensation plans encourage collaboration and align employee performance with overall business results[52]. - The company is committed to inclusion and diversity, continuously seeking to attract and retain diverse talent globally[58]. Compliance and Accounting - The company maintained effective internal control over financial reporting as of December 31, 2024, based on COSO criteria[283]. - The company adopted new accounting standards in Q4 2024, which did not materially impact disclosures or financial results, indicating compliance with evolving regulations[373]. - The company operates as one reportable segment, with performance assessed based on consolidated net income, ensuring a streamlined approach to resource allocation and performance evaluation[362]. Shareholder Returns - The company repurchased $20.0 million in common stock during the year[305]. - Cash dividends declared amounted to $8.3 million, equating to $0.10 per share[305]. - The company authorized a $150.0 million share repurchase program effective July 17, 2024, with approximately $130.0 million remaining for repurchases as of December 31, 2024[417][418].