Gates(US:GTES)2024-05-01 11:59Financial Performance - First-quarter 2024 net sales were $862.6 million, a decrease of 3.9% from $897.7 million in the prior-year quarter, with a core sales decrease of 3.6%[4] - Net income attributable to shareholders for the first quarter was $40.0 million, or $0.15 per diluted share, compared to $26.4 million, or $0.09 per diluted share in the first quarter of 2023[5] - Adjusted EBITDA for the first quarter was $195.6 million, representing a margin of 22.7%, up from $174.5 million and 19.4% in the prior-year quarter[7] - Net income for the three months ended March 30, 2024, was $46.1 million, an increase of 50.8% compared to $30.6 million for the same period in 2023[28] - Adjusted EBITDA for the same period was $195.6 million, representing an Adjusted EBITDA margin of 22.7%, up from 19.4% in the prior year[36] - Adjusted Net Income attributable to shareholders increased to $83.5 million, compared to $72.8 million in the prior year[42] Segment Performance - Power Transmission segment net sales decreased by 2.8% to $532.8 million, with an Adjusted EBITDA of $119.0 million, reflecting a margin expansion of 270 basis points[9] - Fluid Power segment net sales decreased by 5.7% to $329.8 million, with an Adjusted EBITDA of $76.6 million, showing a margin improvement of 410 basis points[13] - The Power Transmission segment reported net sales of $532.8 million, down $9.4 million, while the Fluid Power segment saw a decrease of $22.9 million to $329.8 million[48] Guidance and Projections - The company has raised its full-year 2024 Adjusted EBITDA guidance to a range of $745 million to $805 million, an increase of $20 million from previous guidance[16] - Core revenue growth guidance for 2024 remains unchanged at a range of -3% to +1%[16] Cash Flow and Debt - The company reduced its gross debt during the quarter and had total outstanding debt of $2.4 billion as of March 30, 2024[14] - The company used $21.0 million of cash in operations during the first quarter, with capital expenditures increasing to $18.1 million from $14.6 million in the prior-year quarter[14] - Free Cash Flow for the period was negative at $(21.0) million, compared to positive cash flow of $52.5 million in the same period last year[28] - The company incurred $148.9 million in net cash used in financing activities during the period, primarily due to payments of long-term debt[28] Assets and Liabilities - Total assets decreased to $7,045.9 million as of March 30, 2024, down from $7,254.5 million as of December 30, 2023[26] - Cash and cash equivalents at the end of the period were $525.7 million, a decrease from $597.8 million at the end of the previous year[28] - Total liabilities decreased to $3,550.5 million as of March 30, 2024, down from $3,710.6 million as of December 30, 2023[26] Shareholder Actions - The company repurchased approximately $50 million of its ordinary shares in February 2024, with an additional $50 million available under its share repurchase authorization[15] - The diluted weighted-average number of shares outstanding was 267,435,531, compared to 287,878,415 in the prior year[42] Other Notable Events - The company recorded a pre-tax charge of $0.1 million related to a customer's bankruptcy proceedings during the three months ended March 30, 2024[45] - Cybersecurity incident expenses were incurred due to a malware attack on February 11, 2023, which may be partially offset by insurance recoveries[45] - Currency rate movements positively impacted net sales by $2.8 million overall, with a $5.9 million increase in Power Transmission and a $3.1 million decrease in Fluid Power[48] - The company reported a decrease in inventories to $677.2 million as of March 30, 2024, from $647.2 million as of December 30, 2023[26]