Atmus Filtration Technologies (ATMU) - 2025 Q2 - Quarterly Results

Executive Summary & Highlights This section provides an overview of Atmus Filtration Technologies' strong Q2 2025 financial performance, updated 2025 outlook, and key strategic initiatives Second Quarter Highlights Atmus Filtration Technologies achieved record sales and strong financial results in Q2 2025, with net sales of $454 million, GAAP net income of $60 million, diluted EPS of $0.72, adjusted EPS of $0.75, and adjusted EBITDA of $95 million Second Quarter Highlights Summary | Metric | Q2 2025 (Million USD) | | :----------------------- | :-------------------- | | Net Sales | $454 | | GAAP Net Income | $60 | | Diluted EPS | $0.72 | | Adjusted EPS | $0.75 | | Adjusted EBITDA | $95 | | Adjusted EBITDA Margin | 21.0% | | Cash Flow from Operations| $44 | | Adjusted Free Cash Flow | $36 | 2025 Outlook The company raised its full-year 2025 guidance, expecting revenue between $1.685 billion and $1.735 billion, adjusted EBITDA margin of 19.25% to 20.0%, and adjusted EPS of $2.40 to $2.60 2025 Full-Year Guidance | Metric | 2025 Full-Year Guidance | | :----------------- | :---------------------- | | Revenue Range | $1,685 - $1,735 Million | | Adjusted EBITDA Margin | 19.25% - 20.0% | | Adjusted EPS | $2.40 - $2.60 | - The company repurchased $20 million of common stock during the quarter, with $100 million remaining under its share repurchase authorization[3] - The company paid a quarterly cash dividend of $0.05 per share[3] CEO Statement CEO Steph Disher noted Atmus achieved record sales and strong financial results by providing industry-leading filtration solutions, praising the team's adaptability and value creation - Atmus team achieved record sales and strong financial results[4] - The company serves customers by providing industry-leading filtration solutions[4] - The CEO commended the team's ability to navigate uncertainty, adapt to change, and build long-term shareholder value[4] Second Quarter 2025 Financial Results This section details Atmus Filtration Technologies' financial performance for Q2 2025, including net sales, gross margin, adjusted EBITDA, net income, EPS, and cash flow Net Sales Q2 2025 net sales increased by 4.8% to $454 million from $433 million in Q2 2024, driven by higher volumes and pricing, partially offset by unfavorable foreign currency Net Sales Performance | Metric | Q2 2025 (Million USD) | Q2 2024 (Million USD) | Year-over-Year Change | | :------- | :-------------------- | :-------------------- | :-------------------- | | Net Sales | $454 | $433 | +4.8% | - Sales growth was primarily driven by increased volumes and favorable pricing[4] - Unfavorable foreign currency impacts partially offset the sales growth[4] Gross Margin Q2 2025 gross margin decreased to $131 million (28.9% of net sales) from $132 million (30.5%) in Q2 2024, primarily due to unfavorable logistics and separation costs Gross Margin Performance | Metric | Q2 2025 (Million USD) | Q2 2024 (Million USD) | Year-over-Year Change | | :------- | :-------------------- | :-------------------- | :-------------------- | | Gross Margin | $131 | $132 | -0.8% | | Gross Margin % | 28.9% | 30.5% | -1.6 pp | - Gross margin decline was primarily due to unfavorable logistics costs, increased one-time separation costs from Cummins, unfavorable manufacturing costs, and unfavorable foreign currency impacts[5][6] - Favorable pricing and volumes partially offset the gross margin decline[6] Adjusted EBITDA Q2 2025 adjusted EBITDA increased to $95 million from $93 million in Q2 2024, with an adjusted EBITDA margin of 21.0%, slightly down from 21.4% Adjusted EBITDA Performance | Metric | Q2 2025 (Million USD) | Q2 2024 (Million USD) | Year-over-Year Change | | :----------- | :-------------------- | :-------------------- | :-------------------- | | Adjusted EBITDA | $95 | $93 | +2.2% | | Adjusted EBITDA% | 21.0% | 21.4% | -0.4 pp | - Q2 2025 adjusted EBITDA excluded $3 million in one-time separation costs related to the separation from Cummins Inc[7] Net Income & EPS Q2 2025 net income was $60 million, with diluted EPS of $0.72 and adjusted EPS of $0.75, both up from Q2 2024, with an effective tax rate of 21.9% Net Income and EPS Performance | Metric | Q2 2025 (Million USD) | Q2 2024 (Million USD) | Year-over-Year Change | | :----------- | :-------------------- | :-------------------- | :-------------------- | | Net Income | $60 | $56 | +7.1% | | Diluted EPS | $0.72 | $0.67 | +7.5% | | Adjusted EPS | $0.75 | $0.71 | +5.6% | - The effective tax rate for Q2 2025 was 21.9%[9] Cash Flow Q2 2025 cash flow from operating activities significantly increased to $44 million, and adjusted free cash flow rose to $36 million, excluding separation-related capital expenditures Cash Flow Performance | Metric | Q2 2025 (Million USD) | Q2 2024 (Million USD) | Year-over-Year Change | | :--------------- | :-------------------- | :-------------------- | :-------------------- | | Cash Flow from Operations | $44 | $23 | +91.3% | | Adjusted Free Cash Flow | $36 | $34 | +5.9% | - Q2 2025 adjusted free cash flow excluded $3 million in one-time capital expenditures related to the separation from Cummins Inc[10] - Q2 2024 adjusted free cash flow excluded $18 million in other one-time separation-related costs, primarily working capital inefficiencies from transitioning from Cummins' intercompany settlement terms to independent practices[10] Corporate Information This section provides essential corporate details, including investor communication channels, company overview, forward-looking statements, non-GAAP measures, and contact information Conference Call and Webcast Atmus will host a conference call and webcast on August 8, 2025, at 10:00 AM CT to discuss Q2 2025 results, accessible via the investor relations website - The conference call and webcast will be held on Friday, August 8, 2025, at 10:00 AM CT[11] - The live webcast and replay can be accessed through the Atmus Investor Relations website at **https://investors.atmus.com**[11](index=11&type=chunk) About Atmus Filtration Technologies Inc. Atmus Filtration Technologies Inc. is a global leader in filtration and media solutions with over 65 years of innovation, serving diverse vehicle and equipment markets worldwide - Atmus Filtration Technologies Inc. is a global leader in filtration and media solutions[12] - The company has over 65 years of innovation and operates across six continents[12] - It serves markets including trucks, buses, agriculture, construction, mining, marine, and power generation, offering comprehensive aftermarket support[12] Forward-looking disclosure statement This press release contains forward-looking statements subject to risks and uncertainties, and actual results may differ materially from expectations, with no obligation to update - This press release contains forward-looking statements, which are not guarantees of future performance[13] - Forward-looking statements involve risks, uncertainties, and assumptions that are difficult to predict, and actual results may differ materially from expectations[13][14] - The company undertakes no obligation to publicly update or revise any forward-looking statements, except as required by law[14] Non-GAAP measures The company uses non-GAAP financial measures like Adjusted EBITDA and Adjusted EPS to supplement GAAP statements, aiding investors in performance comparison and trend identification - The company uses non-GAAP financial information (EBITDA, Adjusted EBITDA, Adjusted EPS, Free Cash Flow, and Adjusted Free Cash Flow) to supplement GAAP financial statements[15][16][17] - Non-GAAP metrics are intended to help investors compare historical performance, identify trends, and assess operating performance and debt service capacity[15][17] - The company emphasizes that non-GAAP metrics are not substitutes for GAAP and may have limitations, such as not reflecting cash expenditures or working capital needs[17][18] Media Contacts This section provides contact information for investor relations and media inquiries - Investor Relations contact: Todd Chirillo, email: investor.relations@atmus.com[19] - Media Relations contact: Keri Moenssen, email: media.inquiries@atmus.com[19] Financial Statements (Unaudited) This section presents the unaudited condensed consolidated financial statements for Atmus Filtration Technologies Inc., including statements of net income, balance sheets, and cash flows Condensed Consolidated Statements of Net Income This statement presents the unaudited condensed consolidated net income for Atmus Filtration Technologies Inc. for the three months ended June 30, 2025 and 2024 Condensed Consolidated Statements of Net Income | Metric | Q2 2025 (Million USD) | Q2 2024 (Million USD) | | :---------------------------------- | :-------------------- | :-------------------- | | Net Sales | 453.5 | 432.6 | | Cost of Sales | 322.5 | 300.7 | | Gross Margin | 131.0 | 131.9 | | Selling, General and Administrative Expenses | 46.1 | 49.1 | | Research and Development and Engineering Expenses | 10.7 | 10.4 | | Equity, Royalty and Interest Income | 7.5 | 8.2 | | Other Operating (Income) Expense, Net | — | 0.8 | | Operating Income | 81.7 | 79.8 | | Interest Expense | 8.5 | 10.5 | | Other Income, Net | 3.5 | 2.6 | | Income Before Taxes | 76.7 | 71.9 | | Income Tax Expense | 16.8 | 15.7 | | Net Income | 59.9 | 56.2 | | Basic Earnings Per Share | 0.73 | 0.67 | | Diluted Earnings Per Share | 0.72 | 0.67 | Condensed Consolidated Balance Sheets This statement presents the unaudited condensed consolidated balance sheets for Atmus Filtration Technologies Inc. as of June 30, 2025, and December 31, 2024 Condensed Consolidated Balance Sheets | Metric | June 30, 2025 (Million USD) | December 31, 2024 (Million USD) | | :------------------------------------ | :-------------------------- | :-------------------------- | | Assets | | | | Cash and Cash Equivalents | 190.8 | 184.3 | | Accounts and Notes Receivable, Net | 332.4 | 254.2 | | Inventories | 285.0 | 266.6 | | Prepaid Expenses and Other Current Assets | 47.8 | 49.9 | | Total Current Assets | 856.0 | 755.0 | | Property, Plant and Equipment, Net | 198.9 | 186.2 | | Equity Method Investments and Advances | 93.2 | 84.9 | | Goodwill | 84.7 | 84.7 | | Other Assets | 81.2 | 79.5 | | Total Assets | 1,314.0 | 1,190.3 | | Liabilities | | | | Accounts Payable | 240.7 | 193.1 | | Accrued Compensation, Benefits and Retirement Costs | 29.5 | 37.2 | | Current Portion of Accrued Product Warranty | 4.9 | 4.9 | | Current Portion of Long-Term Debt | 30.0 | 22.5 | | Other Accrued Expenses | 93.8 | 87.2 | | Total Current Liabilities | 398.9 | 344.9 | | Long-Term Debt | 555.0 | 570.0 | | Accrued Product Warranty | 7.3 | 7.3 | | Other Liabilities | 36.5 | 40.7 | | Total Liabilities | 997.7 | 962.9 | | Equity | | | | Common Stock | — | — | | Additional Paid-in Capital | 67.2 | 61.9 | | Retained Earnings | 360.8 | 264.5 | | Accumulated Other Comprehensive Loss | (61.3) | (79.0) | | Treasury Stock | (50.4) | (20.0) | | Total Equity | 316.3 | 227.4 | | Total Liabilities and Equity | 1,314.0 | 1,190.3 | Condensed Consolidated Statements of Cash Flows This statement presents the unaudited condensed consolidated cash flows for Atmus Filtration Technologies Inc. for the six months ended June 30, 2025 and 2024 Condensed Consolidated Statements of Cash Flows | Metric | H1 2025 (Million USD) | H1 2024 (Million USD) | | :------------------------------------ | :-------------------- | :-------------------- | | Cash Flows from Operating Activities | | | | Net Income | 104.6 | 101.7 | | Depreciation and Amortization | 14.6 | 11.7 | | Deferred Income Taxes | — | (4.0) | | Equity, Royalty and Interest Income (less dividends) | (7.9) | (5.8) | | Share-Based Compensation Expense | 5.3 | 6.0 | | Foreign Currency Revaluation and Transaction Risk | (3.8) | (2.3) | | Changes in Trade and Other Receivables | (67.8) | (33.8) | | Changes in Inventories | (10.1) | (32.2) | | Changes in Prepaid Expenses and Other Current Assets | 2.7 | (12.0) | | Changes in Accounts Payable | 38.0 | 6.2 | | Changes in Other Accrued Expenses | (4.1) | (19.9) | | Changes in Other Liabilities | (5.8) | 7.7 | | Other, Net | 7.4 | (8.6) | | Net Cash Provided by Operating Activities | 73.1 | 14.7 | | Cash Flows from Investing Activities | | | | Capital Expenditures | (24.4) | (22.2) | | Net Cash Used in Investing Activities | (24.4) | (22.2) | | Cash Flows from Financing Activities | | | | Repayment of Long-Term Debt | (7.5) | — | | Repurchase of Common Stock | (30.1) | — | | Dividends Paid | (8.3) | — | | Net Cash Used in Financing Activities | (45.9) | — | | Effect of Exchange Rate Changes on Cash and Cash Equivalents | 3.7 | — | | Net Increase (Decrease) in Cash and Cash Equivalents | 6.5 | (7.5) | | Cash and Cash Equivalents at Beginning of Period | 184.3 | 168.0 | | Cash and Cash Equivalents at End of Period | 190.8 | 160.5 | Earnings Per Share - Reconciliation This table provides the reconciliation of net income to basic and diluted earnings per share for Atmus Filtration Technologies Inc. for the three months ended June 30, 2025 and 2024 Earnings Per Share Reconciliation | Metric | Q2 2025 | Q2 2024 | | :------------------------------------ | :------ | :------ | | Net Income | $59.9 | $56.2 | | Weighted Average Shares Outstanding for Basic EPS | 82.5 | 83.4 | | Shares Added for Assumed Conversion of Long-Term Incentive Plan Shares | 0.5 | 0.3 | | Weighted Average Shares Outstanding for Diluted EPS | 83.0 | 83.7 | | Basic Earnings Per Share | $0.73 | $0.67 | | Diluted Earnings Per Share | $0.72 | $0.67 | Net Income to EBITDA and Adjusted EBITDA - Reconciliation This table reconciles net income to EBITDA and Adjusted EBITDA for Atmus Filtration Technologies Inc. for the three months ended June 30, 2025 and 2024 Net Income to EBITDA and Adjusted EBITDA Reconciliation | Metric | Q2 2025 (Million USD) | Q2 2024 (Million USD) | | :-------------------------- | :-------------------- | :-------------------- | | Net Income | $59.9 | $56.2 | | Add: Interest Expense | 8.5 | 10.5 | | Add: Income Tax Expense | 16.8 | 15.7 | | Add: Depreciation and Amortization | 7.4 | 6.3 | | EBITDA (Non-GAAP) | $92.6 | $88.7 | | Add: One-Time Separation Costs | $2.5 | $3.8 | | Adjusted EBITDA (Non-GAAP) | $95.1 | $92.5 | | Net Sales | $453.5 | $432.6 | | Net Income Margin | 13.2 % | 13.0 % | | EBITDA Margin (Non-GAAP) | 20.4 % | 20.5 % | | Adjusted EBITDA Margin (Non-GAAP) | 21.0 % | 21.4 % | - One-time separation costs primarily include expenses related to information technology, warehousing, manufacturing, and human resources separation[30] Diluted Earnings Per Share to Adjusted Earnings Per Share - Reconciliation This table reconciles diluted earnings per share to adjusted earnings per share for Atmus Filtration Technologies Inc. for the three months ended June 30, 2025 and 2024 Diluted EPS to Adjusted EPS Reconciliation | Metric | Q2 2025 | Q2 2024 | | :-------------------------- | :------ | :------ | | Diluted Earnings Per Share | $0.72 | $0.67 | | Add: One-Time Separation Costs | $0.03 | $0.05 | | Less: Tax Impact of One-Time Separation Costs | $— | $0.01 | | Adjusted Earnings Per Share | $0.75 | $0.71 | - The tax impact of one-time separation costs was $0.5 million in Q2 2025 and $0.8 million in Q2 2024[33] Cash Flows from Operating Activities to Free Cash Flow and Adjusted Free Cash Flow - Reconciliation This table reconciles cash flows from operating activities to free cash flow and adjusted free cash flow for Atmus Filtration Technologies Inc. for the three months ended June 30, 2025 and 2024 Cash Flows from Operating Activities to Free Cash Flow and Adjusted Free Cash Flow Reconciliation | Metric | Q2 2025 (Million USD) | Q2 2024 (Million USD) | | :------------------------------------ | :-------------------- | :-------------------- | | Cash Flows from Operating Activities | $44.4 | $22.9 | | Less: Capital Expenditures | $12.0 | $11.6 | | Free Cash Flow (Non-GAAP) | $32.4 | $11.3 | | Add: One-Time Separation Capital Expenditures | $3.1 | $4.5 | | Add: Other One-Time Separation-Related Costs | $— | $18.3 | | Adjusted Free Cash Flow (Non-GAAP) | $35.5 | $34.1 | - Other one-time separation-related costs primarily include working capital inefficiencies from transitioning from Cummins' intercompany settlement terms to independent practices[35]