ESAB (US:ESAB)2025-08-06 10:32Financial Performance - ESAB reported second quarter sales of $716 million, a 1% increase on a reported basis, but a 1% decrease on a core organic growth basis compared to the prior year[3]. - Net income from continuing operations attributable to ESAB was $69 million, or $1.12 diluted earnings per share, with core adjusted net income of $84 million, or $1.36 diluted earnings per share[3]. - Core adjusted EBITDA rose 3% to $138 million, with a margin expansion of 30 basis points to 20.4% compared to the prior year quarter[3]. - Net income from continuing operations (GAAP) for the three months ended July 4, 2025, was $69.8 million, a decrease of 18.9% compared to $85.5 million for the same period in 2024[24]. - Adjusted net income from continuing operations (non-GAAP) for the three months ended July 4, 2025, was $86.2 million, slightly down from $86.6 million in the prior year[24]. - Adjusted EBITDA (non-GAAP) for the three months ended July 4, 2025, was $143.5 million, compared to $141.0 million for the same period in 2024, reflecting a 1.8% increase[27]. - Adjusted net income margin from continuing operations was 12.0% for the three months ended July 4, 2025, compared to 12.3% in the same period last year[24]. - The company reported a diluted net income per share from continuing operations (GAAP) of $1.12 for the three months ended July 4, 2025, down from $1.37 in the same period last year[24]. - Net income for the six months ended July 4, 2025, was $137.936 million, a decrease of 5.3% from $145.963 million for the same period in 2024[43]. Guidance and Projections - ESAB raised its full year 2025 guidance for total core sales growth to 1.5% to 3.5%, up from a prior outlook of (1.0)% to 1.5%[5]. - Core adjusted EBITDA outlook increased to $525 to $535 million, compared to prior guidance of $520 to $530 million[5]. - Core adjusted EPS guidance was raised to $5.15 to $5.30, up from $5.10 to $5.25[5]. - Core adjusted EBITDA for 2024 is projected to be $510.7 million, with a range of $520 million to $530 million for 2025[39]. - The company expects 2025 core net sales growth to be in the range of 1.5% to 3.5%[39]. Strategic Initiatives - The company completed two strategic acquisitions, DeltaP and Aktiv, and signed EWM, enhancing its medical gas control and Fabtech portfolios[4]. - Strong performance was noted in high-growth markets, particularly in EMEA and APAC regions[4]. - The Americas team successfully navigated tariff-related pressures using the EBX strategy[4]. Cash Flow and Assets - Cash and cash equivalents as of July 4, 2025, were $258.2 million, an increase from $249.4 million at the end of 2024[41]. - Total assets increased to $4,432.4 million as of July 4, 2025, compared to $4,034.0 million at the end of 2024[41]. - The company reported net cash provided by operating activities of $82.0 million for the six months ended July 4, 2025[37]. - Net cash provided by operating activities decreased to $82.037 million, down 35.5% from $127.483 million year-over-year[43]. - Net cash used in investing activities increased significantly to $98.494 million, compared to $36.938 million in the prior year[43]. - The company reported a cash increase of $8.865 million, contrasting with a substantial increase of $126.467 million in the previous year[43]. - Cash and cash equivalents at the end of the period rose to $258.223 million, up from $228.470 million year-over-year[43]. - The company experienced a foreign exchange gain of $44.969 million on cash and cash equivalents, compared to a loss of $10.359 million in the prior period[43]. Liabilities and Expenses - Current liabilities totaled $686.5 million as of July 4, 2025, compared to $632.1 million at the end of 2024[41]. - Restructuring and other related charges for the three months ended July 4, 2025, amounted to $1.4 million, down from $4.8 million in the same period last year[27]. - Acquisition-amortization and other related charges for the three months ended July 4, 2025, were $21.6 million, significantly higher than $7.7 million in the prior year[27]. - Depreciation, amortization, and other impairment charges rose to $36.846 million, up from $32.930 million year-over-year[43]. - Stock-based compensation expense remained stable at approximately $9.900 million, compared to $9.886 million in the prior year[43]. - Changes in trade receivables resulted in a cash outflow of $49.161 million, an improvement from the outflow of $56.680 million in the previous year[43].