Adient(US:ADNT)2024-05-03 10:55Financial Performance - Q2 FY2024 revenue was $3,750M, a 4% decrease year-over-year, primarily due to lower volumes and FX headwinds[2] - Adjusted EBITDA for Q2 FY2024 was $227M, up $12M year-over-year, with an adjusted EBITDA margin of 6.1%, reflecting a 60 basis points improvement[2] - The company reported a net loss of $(70)M for Q2 FY2024, with adjusted net income of $49M, representing a 58% increase year-over-year[2] - Adient reported net sales of $3,750 million for the three months ended March 31, 2024, a decrease of 4.1% compared to $3,912 million in the same period of 2023[18] - The gross profit for the quarter was $230 million, down from $250 million year-over-year, reflecting a gross margin of 6.1%[18] - Adjusted EBITDA for the three months ended March 31, 2024, was $227 million, compared to $215 million for the same period in 2023, reflecting an increase of 5.6%[38] - Adjusted net income attributable to Adient for the three months ended March 31, 2024, was $49 million, up from $31 million in the same period in 2023, representing a 58.1% increase[39] - Adjusted EBIT for the three months ended March 31, 2024, was $147 million, compared to $134 million for the same period in 2023, indicating a growth of 9.7%[38] - The adjusted EBITDA margin for the three months ended March 31, 2024, was 6.1%, compared to 5.5% for the same period in 2023, showing an improvement of 0.6 percentage points[38] - Basic and diluted earnings per share for the three months ended March 31, 2024, were both $(0.77), compared to $(0.16) for the same period in 2023[33] Cash Flow and Capital Management - Cash and cash equivalents stood at $905M as of March 31, 2024, down from $1,110M at the end of FY2023[6] - The company reported free cash flow of $(2)M year-to-date FY2024, compared to $53M in the same period last year[6] - Cash provided by operating activities was $81 million, down from $126 million year-over-year[25] - Operating cash flow for Q1 2024 was $81 million, down from $126 million in Q1 2023, highlighting challenges in cash generation[49] - Free cash flow for the three months ended March 31, 2024, was $12 million, down from $70 million in the same period of 2023, primarily due to increased capital expenditures[49] - Capital expenditures for the three months ended March 31, 2024, were $69 million, compared to $56 million in the same period of 2023, reflecting ongoing investments in growth[49] Shareholder Actions - Year-to-date share repurchases totaled $150M, retiring approximately 4.5M shares, with $385M remaining in the current share repurchase authorization[1] Future Guidance - The company expects FY2024 consolidated sales to be in the range of $14.8B to $14.9B, down from prior guidance of $15.4B to $15.5B[8] - Adient anticipates adjusted EBITDA for FY2024 to be between $900M and $920M, revised from a previous estimate of $985M[8] Restructuring and Cost Management - The company plans to implement restructuring actions with $125M in charges expected in Q2 FY2024, aimed at achieving ~$60M in reduced annual operating costs by FY2027[2] - The company incurred restructuring and impairment costs of $125 million in the latest quarter, significantly higher than $17 million in the prior year[18] - The company is focused on restructuring plans and managing input cost recoveries amid ongoing economic uncertainties[16] Segment Performance - The Americas segment generated net sales of $1,660 million, while EMEA and Asia reported $1,370 million and $742 million, respectively[28] Debt and Financial Health - Adient's long-term debt remained stable at $2,401 million, with total liabilities amounting to $3,658 million[21][22] - The net debt as of March 31, 2024, was $1.63 billion, an increase from $1.43 billion as of September 30, 2023, reflecting changes in cash and debt management[53] - The company reported a net leverage ratio of 1.71 as of March 31, 2024, compared to 1.52 in the previous period, indicating a slight increase in leverage[52] - The net leverage ratio is calculated as net debt divided by adjusted EBITDA for the last four quarters, providing insight into the company's financial health[34] Equity and Investment Performance - Equity income for the three months ended March 31, 2024, was $18 million, compared to $4 million in the same period of 2023, indicating strong performance in equity investments[45] - Net financing charges decreased to $47 million in Q1 2024 from $59 million in Q1 2023, showing effective cost management[47]