第99.1展示文本
2024年第三季度每股收益（EPS）爲1.96美元，調整後每股收益爲1.46美元
▪17%訂單增長（14%自然增長），受泵項目獎項、鐵路份額增長和連接器需求推動
▪營業收入增長8%（有機增長6%），得益於所有板塊的強勁增長。
▪營業利潤率擴大了610個點子，達到23.5%，其中包括$4800萬對沃爾沃先進材料（Wolverine）出售的初步收益；調整後的營業利潤率擴大了60個點子，達到18.3%
▪46%每股收益增長主要是由於對狼蜥出售的收益驅動；7%調整後每股收益增長是由定價行動、成交量和生產力推動
▪提高全年每股收益指引的中點，因持續的業績表現優異
斯坦福，康涅狄格州，2024年10月29日 - itt inc.（紐交所：ITT）今天報告了截至2024年9月28日的第三季度財務業績。營業收入同比增長8％（有機增長6％），主要受運動技術（MT）的摩擦和鐵路份額增長，工業過程（IP）短週期需求以及連接器增長驅動。控制技術（CCT）。 Svanehøj和kSARIA收購對總收入增長貢獻了7％，而Wolverine的出售對淨收入增長率有（4％）的影響。
第三季度營業收入爲20800萬美元，較去年同期增加45%，主要是因爲7月份沃爾弗林分拆交易帶來的4800萬美元的初步收益。在調整基礎上，營業收入增長了11%，原因是 更高的銷售成交量、定價措施和生產力，部分抵消了較高的材料和勞動力成本、暫時性收購攤銷和不利的外匯影響。
第三季度每股收益爲1.96美元，同比增長46%，主要是由於先前提到的出售收益。調整後的每股收益爲1.46美元，較上年同期增長7%，主要受到更高營業收入驅動，部分抵消了由於收購導致的更高利息支出。
第三季度經營活動淨現金爲12400萬美元，同比下降27%，主要受較高的營運資本推動季度自由現金流爲8700萬美元，較去年同期下降41%，主要受較高的經營收入部分抵消。 截至目前爲止，經營現金流下降2800萬美元，自由現金流下降4700萬美元，主要原因是更高的
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營運資金、較高的利息支付和資本支出，部分抵消了較高的業務部門營業收入。
表1. 第三季度表現
| Q3 2024 | Q3 2023 | 改變 | ||||||||||||||||||
收入 | $ | 885.2 | $ | 822.1 | 7.7 | % | ||||||||||||||
| 有機增長 | 5.5 | % | ||||||||||||||||||
| 營業收入 | $ | 207.9 | $ | 143.1 | 45.3 | % | ||||||||||||||
| 營業利潤率 | 23.5 | % | 17.4 | % | 610 | bps | ||||||||||||||
| 調整後的營業收入 | $ | 161.6 | $ | 145.5 | 11.1 | % | ||||||||||||||
| 調整後的營業利潤率 | 18.3 | % | 17.7 | % | 60 | bps | ||||||||||||||
| 每股收益 | $ | 1.96 | $ | 1.34 | 46.3 | % | ||||||||||||||
| 調整後的每股收益 | $ | 1.46 | $ | 1.37 | 6.6 | % | ||||||||||||||
來自經營活動的淨現金 | $ | 123.9 | $ | 169.8 | (27.0) | % | ||||||||||||||
| 自由現金流 | $ | 87.3 | $ | 147.6 | (40.9) | % | ||||||||||||||
注意：所有結果未經審計；金額以百萬美元計，除每股金額外
管理層評論
我們第三季度的業績表現顯示出ITt業務和我們員工的實力。我們的團隊再次取得強勁的盈利增長和持續的利潤率擴張。本季度，我們所有業務再次都做出了貢獻：短週期流業務增長強勁，摩擦繼續表現優異，我們在鐵路領域再次獲得額外份額，並在工業連接器方面實現了超過百分之二十的增長。此外，我們的傳統業務連續第二個季度超過了長期利潤率目標。除此之外，截至目前，我們還投入了超過10億美元的資本。
鑑於迄今爲止良好的業績表現，我們將提高今年全年EPS展望的中點。在排除臨時收購攤銷的情況下，2024年我們的盈利將超過6美元，這要歸功於我們的執行力和超額業績。這種有機價值創造應該會繼續，在這一季度實現中低兩位數的訂單增長，從而導致創紀錄的尾部積壓17億美元。我們不斷增長的積壓單和來自收購的貢獻不斷增加，爲長期增長奠定了堅實基礎，同時我們將繼續建立一個更高增長和更高利潤率業務的強大M&A管道，ITT的首席執行官兼總裁盧卡·薩維表示。
表2. 第三季度分段結果
| 收入 | 營業收入 | 營業利潤率 | ||||||||||||||||||||||||||||||||||||
| Q3 2024 | 報告的變更 | 有機增長 | Q3 2024 | 報告的變更 | 調整後的變動 | Q3 2024 | 報告的變更 | 調整後的變動 | ||||||||||||||||||||||||||||||
| 運動技術 | 344.9 | (4.1) | % | 4.7 | % | 110.0 | 85.2 | % | 2.1 | % | 31.9 | % | 1,540 個點子 | 110 bps | ||||||||||||||||||||||||
| 工業流程 | 333.8 | 19.3 | % | 6.1 | % | 69.8 | 7.9 | % | 7.1 | % | 20.9 | % | (220) bps | (240) bps | ||||||||||||||||||||||||
| 連接與控制技術 | 207.2 | 12.6 | % | 5.7 | % | 38.1 | 14.8 | % | 17.9 | % | 18.4 | % | 40 bps | 90 bps | ||||||||||||||||||||||||
注意：所有板塊的結果未經審計；不包括0.7美元的跨公司消除；與2023年第三季度的比較
Motion Technologies的營業收入減少了1500萬美元，主要是由於2024年7月對Wolverine的出售，部分抵消了KONI摩擦和鐵路需求的銷量增加。經營
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收入增加了5100萬美元，主要是由於出售收益4800萬美元、生產力行動和較低的材料和製造費用所致，部分抵消了外匯影響和較高的勞動成本。
工業流程 營業收入增加了5400萬美元，主要是由於於2024年1月收購Svanehøj，以及基準泵、閥門和售後配件及服務的增長。營運收入增加約500萬美元，主要是由於生產力行動、銷售成交量和定價的提高，部分抵消了更高的材料、勞動力和間接成本、外幣和Svanehøj臨時收購攤銷費用。
Connect&Control Technologies的營業收入增加了2300萬美元，主要受kSARIA收購的推動，該交易於2024年9月結束，定價行動和軍工股和工業連接器增長。營業利潤增加了500萬美元，主要是由於定價、生產力行動和kSARIA的貢獻，部分抵消了更高的材料、勞動力和間接成本。
季度股息
公司今天宣佈，2024年第四季度每股派發股息$0.319。ITT的董事會批准了這筆現金股息，將於2024年12月31日星期二支付給截至11月29日週五收市時的股東。
2024年度指導原則
公司正在將全年營業收入和營業利潤率預期上調至之前中位數之上，同時提高了調整後每股收益展望的中位數，儘管受到了自kSARIA收購的增量利息費用和購買價格攤銷的影響。我們現在預計營業收入增長10%至12%，在有機基礎上增長5%至7%；營業利潤率爲18.4%至18.7%，調整後的營業利潤率爲17.4%至17.7%，增加50至80個點子（不考慮收購稀釋，增加130至160個點子）；全年每股收益爲6.16美元至6.22美元，調整後每股收益爲5.80美元至5.86美元，全年增長11%至12%。我們現在預計全年自由現金流約爲45000萬美元，代表全年約12%的自由現金流利潤率。
It is not possible, without unreasonable efforts, to estimate the impacts of foreign currency fluctuations, acquisitions and certain other special items that may occur in 2024 as these items are inherently uncertain and difficult to predict. As a result, we are unable to quantify certain amounts that would be included in a reconciliation of organic revenue growth and adjusted segment operating margin to the most directly comparable GAAP financial measures without unreasonable efforts and accordingly we have not provided reconciliations for these forward-looking non-GAAP financial measures.
Investor Conference Call Details
ITT’s management will host a conference call for investors on Tuesday, Oct. 29 at 8:30 a.m. Eastern Time. The briefing can be accessed live via a webcast, which is available on the company’s website: https://investors.itt.com. A replay of the webcast will be available beginning two hours after the webcast. Reconciliations of non-GAAP financial performance metrics to their most comparable U.S.
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GAAP financial performance metrics are defined and presented below and should not be considered a substitute for, nor superior to, the financial data prepared in accordance with U.S. GAAP.
Investor Contact
Mark Macaluso
+1 914-641-2064
mark.macaluso@itt.com
Media Contact
Phil Terrigno
+1 914-641-2143
phil.terrigno@itt.com
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Safe Harbor Statement
This release contains “forward-looking statements” intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. In addition, the conference call (including the financial results presentation material) may include, and officers and representatives of ITT may from time to time make and discuss, projections, goals, assumptions, and statements that may constitute “forward-looking statements”. These forward-looking statements are not historical facts, but rather represent only a belief regarding future events based on current expectations, estimates, assumptions and projections about our business, future financial results and the industry in which we operate, and other legal, regulatory, and economic developments. These forward-looking statements include, but are not limited to, future strategic plans and other statements that describe the company’s business strategy, outlook, objectives, plans, intentions or goals, and any discussion of future events and future operating or financial performance.
We use words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “future,” “guidance,” “project,” “intend,” “may,” “plan,” “potential,” “project,” “should,” “target,” “will,” and other similar expressions to identify such forward-looking statements. Forward-looking statements are uncertain and, by their nature, many are inherently unpredictable and outside of ITT’s control, and involve known and unknown risks, uncertainties and other important factors that could cause actual results to differ materially from those expressed or implied in, or reasonably inferred from, such forward-looking statements.
Where in any forward-looking statement we express an expectation or belief as to future results or events, such expectation or belief is based on current plans and expectations of our management, expressed in good faith and believed to have a reasonable basis. However, we cannot provide any assurance that the expectation or belief will occur or that anticipated results will be achieved or accomplished.
Among the factors that could cause our results to differ materially from those indicated by forward-looking statements are risks and uncertainties inherent in our business including, without limitation:
•uncertain global economic and capital markets conditions, which have been influenced by heightened geopolitical tensions, inflation, changes in monetary policies, the threat of a possible regional or global economic recession, trade disputes between the U.S. and its trading partners, political and social unrest, and the availability and fluctuations in prices of energy and commodities, including steel, oil, copper and tin;
•fluctuations in interest rates and the impact of such fluctuations on customer behavior and on our cost of debt;
•fluctuations in foreign currency exchange rates and the impact of such fluctuations on our revenues, customer demand for our products and on our hedging arrangements;
•volatility in raw material prices and our suppliers’ ability to meet quality and delivery requirements;
•impacts and risk of liabilities from recent mergers, acquisitions, or venture investments, and past divestitures and spin-offs;
•our inability to hire or retain key personnel;
•failure to compete successfully and innovate in our markets;
•failure to manage the distribution of products and services effectively;
•failure to protect our intellectual property rights or violations of the intellectual property rights of others;
•the extent to which there are quality problems with respect to manufacturing processes or finished goods;
•the risk of cybersecurity breaches or failure of any information systems used by the Company, including any flaws in the implementation of any enterprise resource planning systems;
•loss of or decrease in sales from our most significant customers;
•risks due to our operations and sales outside the U.S. and in emerging markets, including the imposition of tariffs and trade sanctions;
•fluctuations in demand or customers’ levels of capital investment, maintenance expenditures, production, and market cyclicality;
•the risk of material business interruptions, particularly at our manufacturing facilities;
•risks related to government contracting, including changes in levels of government spending and regulatory and contractual requirements applicable to sales to the U.S. government;
•fluctuations in our effective tax rate, including as a result of changing tax laws and other possible tax reform legislation in the U.S. and other jurisdictions;
•changes in environmental laws or regulations, discovery of previously unknown or more extensive contamination, or the failure of a potentially responsible party to perform;
•failure to comply with the U.S. Foreign Corrupt Practices Act (or other applicable anti-corruption legislation), export controls and trade sanctions; and
•risk of product liability claims and litigation.
More information on factors that could cause actual results or events to differ materially from those anticipated is included in our Annual Report on Form 10-K for the year ended December 31, 2023 (particularly under the caption "Risk Factors"), our Quarterly Reports on Form 10-Q and in other documents we file from time to time with the SEC.
The forward-looking statements included in this release speak only as of the date hereof. We undertake no obligation (and expressly disclaim any obligation) to update any forward-looking statements, whether written or oral or as a result of new information, future events or otherwise.
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CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| September 28, 2024 | September 30, 2023 | September 28, 2024 | September 30, 2023 | ||||||||||||||||||||
| Revenue | $ | 885.2 | $ | 822.1 | $ | 2,701.7 | $ | 2,453.9 | |||||||||||||||
| Cost of revenue | 571.2 | 542.7 | 1,770.8 | 1,632.6 | |||||||||||||||||||
| Gross profit | 314.0 | 279.4 | 930.9 | 821.3 | |||||||||||||||||||
| General and administrative expenses | 74.8 | 66.9 | 223.1 | 210.8 | |||||||||||||||||||
| Sales and marketing expenses | 50.5 | 44.4 | 151.2 | 131.2 | |||||||||||||||||||
| Research and development expenses | 28.6 | 25.0 | 88.3 | 77.1 | |||||||||||||||||||
| Gain on sale of businesses | (47.8) | — | (47.8) | (7.2) | |||||||||||||||||||
| Operating income | 207.9 | 143.1 | 516.1 | 409.4 | |||||||||||||||||||
Interest expense | 10.0 | 4.2 | 25.1 | 15.4 | |||||||||||||||||||
Interest income | (1.6) | (1.9) | (5.0) | (6.5) | |||||||||||||||||||
Other non-operating income, net | (0.2) | (0.9) | (1.9) | (1.5) | |||||||||||||||||||
Income before income tax expense | 199.7 | 141.7 | 497.9 | 402.0 | |||||||||||||||||||
| Income tax expense | 37.8 | 29.9 | 103.6 | 80.6 | |||||||||||||||||||
| Income from continuing operations | 161.9 | 111.8 | 394.3 | 321.4 | |||||||||||||||||||
Loss from discontinued operations, net of income tax | (0.2) | — | (0.2) | — | |||||||||||||||||||
| Net income | 161.7 | 111.8 | 394.1 | 321.4 | |||||||||||||||||||
| Less: Income attributable to noncontrolling interests | 0.6 | 1.0 | 2.8 | 2.4 | |||||||||||||||||||
| Net income attributable to ITT Inc. | $ | 161.1 | $ | 110.8 | $ | 391.3 | $ | 319.0 | |||||||||||||||
| Amounts attributable to ITT Inc.: | |||||||||||||||||||||||
| Income from continuing operations | $ | 161.3 | $ | 110.8 | $ | 391.5 | $ | 319.0 | |||||||||||||||
| Loss from discontinued operations, net of tax | (0.2) | — | (0.2) | — | |||||||||||||||||||
| Net income attributable to ITT Inc. | $ | 161.1 | $ | 110.8 | $ | 391.3 | $ | 319.0 | |||||||||||||||
Earnings per share attributable to ITT Inc.: | |||||||||||||||||||||||
| Basic: | |||||||||||||||||||||||
| Continuing operations | $ | 1.98 | $ | 1.35 | $ | 4.78 | $ | 3.87 | |||||||||||||||
| Discontinued operations | (0.01) | — | — | — | |||||||||||||||||||
| Net income | $ | 1.97 | $ | 1.35 | $ | 4.78 | $ | 3.87 | |||||||||||||||
| Diluted: | |||||||||||||||||||||||
| Continuing operations | $ | 1.96 | $ | 1.34 | $ | 4.75 | $ | 3.86 | |||||||||||||||
| Discontinued operations | — | — | — | — | |||||||||||||||||||
| Net income | $ | 1.96 | $ | 1.34 | $ | 4.75 | $ | 3.86 | |||||||||||||||
| Weighted average common shares – basic | 81.6 | 82.1 | 81.9 | 82.4 | |||||||||||||||||||
| Weighted average common shares – diluted | 82.1 | 82.5 | 82.4 | 82.7 | |||||||||||||||||||
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CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
| As of the Period Ended | September 28, 2024 | December 31, 2023 | |||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 460.9 | $ | 489.2 | |||||||
| Receivables, net | 802.0 | 675.2 | |||||||||
| Inventories | 620.5 | 575.4 | |||||||||
| Other current assets | 127.4 | 117.9 | |||||||||
| Total current assets | 2,010.8 | 1,857.7 | |||||||||
| Non-current assets: | |||||||||||
| Plant, property and equipment, net | 578.8 | 561.0 | |||||||||
| Goodwill | 1,498.3 | 1,016.3 | |||||||||
| Other intangible assets, net | 462.9 | 116.6 | |||||||||
| Other non-current assets | 393.7 | 381.0 | |||||||||
| Total non-current assets | 2,933.7 | 2,074.9 | |||||||||
| Total assets | $ | 4,944.5 | $ | 3,932.6 | |||||||
| Liabilities and Shareholders’ Equity | |||||||||||
| Current liabilities: | |||||||||||
| Short-term borrowings | $ | 362.6 | $ | 187.7 | |||||||
| Accounts payable | 460.4 | 437.0 | |||||||||
| Accrued and other current liabilities | 451.7 | 413.1 | |||||||||
| Total current liabilities | 1,274.7 | 1,037.8 | |||||||||
| Non-current liabilities: | |||||||||||
| Long-term debt | 467.8 | 5.7 | |||||||||
| Postretirement benefits | 135.0 | 138.7 | |||||||||
| Other non-current liabilities | 311.3 | 211.3 | |||||||||
| Total non-current liabilities | 914.1 | 355.7 | |||||||||
| Total liabilities | 2,188.8 | 1,393.5 | |||||||||
| Shareholders’ equity: | |||||||||||
| Common stock: | |||||||||||
Authorized – 250.0 shares, $1 par value per share | |||||||||||
Issued and outstanding – 81.5 shares and 82.1 shares, respectively | 81.5 | 82.1 | |||||||||
| Retained earnings | 2,993.2 | 2,778.0 | |||||||||
| Accumulated other comprehensive income (loss): | |||||||||||
| Postretirement benefits | (5.2) | (1.6) | |||||||||
| Cumulative translation adjustments | (320.3) | (330.3) | |||||||||
| Total accumulated other comprehensive loss | (325.5) | (331.9) | |||||||||
| Total ITT Inc. shareholders’ equity | 2,749.2 | 2,528.2 | |||||||||
| Noncontrolling interests | 6.5 | 10.9 | |||||||||
| Total shareholders’ equity | 2,755.7 | 2,539.1 | |||||||||
| Total liabilities and shareholders’ equity | $ | 4,944.5 | $ | 3,932.6 | |||||||
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CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
(IN MILLIONS)
For the Nine Months Ended | September 28, 2024 | September 30, 2023 | |||||||||
| Operating Activities | |||||||||||
| Income from continuing operations attributable to ITT Inc. | $ | 391.5 | $ | 319.0 | |||||||
| Adjustments to income from continuing operations: | |||||||||||
| Depreciation and amortization | 100.7 | 82.8 | |||||||||
| Equity-based compensation | 19.8 | 15.1 | |||||||||
| Gain on sale of business | (47.8) | (7.2) | |||||||||
| Other non-cash charges, net | 23.8 | 22.5 | |||||||||
| Changes in assets and liabilities: | |||||||||||
| Change in receivables | (93.5) | (54.7) | |||||||||
| Change in inventories | (2.6) | (40.9) | |||||||||
| Change in contract assets | (5.0) | 0.5 | |||||||||
| Change in contract liabilities | (1.6) | 11.1 | |||||||||
| Change in accounts payable | (11.4) | 16.5 | |||||||||
| Change in accrued expenses | (14.1) | 29.4 | |||||||||
| Change in income taxes | (15.4) | (2.1) | |||||||||
| Other, net | (5.0) | (24.4) | |||||||||
| Net Cash – Operating Activities | 339.4 | 367.6 | |||||||||
| Investing Activities | |||||||||||
| Capital expenditures | (87.5) | (68.5) | |||||||||
| Proceeds from sale of business | 162.4 | 10.5 | |||||||||
| Acquisitions, net of cash acquired | (864.8) | (79.3) | |||||||||
| Other, net | (4.7) | (4.7) | |||||||||
| Net Cash – Investing Activities | (794.6) | (142.0) | |||||||||
| Financing Activities | |||||||||||
| Commercial paper, net borrowings | 174.7 | (204.3) | |||||||||
Long-term debt issued, net of debt issuance costs | 762.4 | — | |||||||||
| Long-term debt, repayments | (301.3) | (1.2) | |||||||||
| Share repurchases under repurchase plan | (104.0) | (60.0) | |||||||||
| Payments for taxes related to net share settlement of stock incentive plans | (13.2) | (6.7) | |||||||||
| Dividends paid | (78.7) | (71.9) | |||||||||
| Other, net | (7.9) | (1.1) | |||||||||
| Net Cash – Financing Activities | 432.0 | (345.2) | |||||||||
| Exchange rate effects on cash and cash equivalents | (4.4) | (10.4) | |||||||||
| Net cash – operating activities of discontinued operations | (0.4) | (0.2) | |||||||||
| Net change in cash and cash equivalents | (28.0) | (130.2) | |||||||||
Cash and cash equivalents – beginning of year (includes restricted cash of $0.7 and $0.7, respectively) | 489.9 | 561.9 | |||||||||
Cash and Cash Equivalents – End of Period (includes restricted cash of $1.0 and $0.9, respectively) | $ | 461.9 | $ | 431.7 | |||||||
Supplemental Disclosures of Cash Flow and Non-Cash Information: | |||||||||||
| Cash paid for Interest | $ | 21.3 | $ | 12.3 | |||||||
| Cash paid for Income taxes, net of refunds received | $ | 106.8 | $ | 72.0 | |||||||
Capital expenditures included in current liabilities | $ | 23.0 | $ | 16.3 | |||||||
8
Key Performance Indicators and Non-GAAP Measures
ITT reviews a variety of key performance indicators including revenue, operating income and margin, earnings per share, order growth, and backlog. In addition, we consider certain measures to be useful to management and investors when evaluating our operating performance for the periods presented. These measures provide a tool for evaluating our ongoing operations and management of assets from period to period. This information can assist investors in assessing our financial performance and measures our ability to generate capital for deployment among competing strategic alternatives and initiatives, including, but not limited to, acquisitions, dividends, and share repurchases. Some of these metrics, however, are not measures of financial performance under accounting principles generally accepted in the United States of America (GAAP) and should not be considered a substitute for measures determined in accordance with GAAP. We consider the following non-GAAP measures, which may not be comparable to similarly titled measures reported by other companies, to be key performance indicators for purposes of our reconciliation tables.
Organic Revenues and Organic Orders are defined, respectively, as revenue and orders, excluding the impacts of foreign currency fluctuations, acquisitions, and divestitures that may or may not qualify as discontinued operations. Current year activity from acquisitions is excluded for twelve months following the closing date of acquisition. The period-over-period change resulting from foreign currency fluctuations is estimated using a fixed exchange rate for both the current and prior periods. Prior year revenue and orders are adjusted to exclude activity during the comparable period for twelve months post-closing date for divestitures that do not qualify as discontinued operations. We believe that reporting organic revenue and organic orders provide useful information to investors by helping identify underlying trends in our business and facilitating comparisons of our revenue performance with prior and future periods and to our peers.
Adjusted Operating Income is defined as operating income adjusted to exclude special items that include, but are not limited to, restructuring, certain asset impairment charges, certain acquisition- and divestiture-related impacts, and unusual or infrequent operating items. Special items represent charges or credits that impact current results, which management views as unrelated to the Company's ongoing operations and performance. Adjusted Operating Margin is defined as adjusted operating income divided by revenue. We believe these financial measures are useful to investors and other users of our financial statements in evaluating ongoing operating profitability, as well as in evaluating operating performance in relation to our competitors.
Adjusted Income from Continuing Operations is defined as income from continuing operations attributable to ITT Inc. adjusted to exclude special items that include, but are not limited to, restructuring, certain asset impairment charges, certain acquisition- and divestiture-related impacts, income tax settlements or adjustments, and unusual or infrequent items. Special items represent charges or credits, on an after-tax basis, that impact current results, which management views as unrelated to the Company’s ongoing operations and performance. The after-tax basis of each special item is determined using the jurisdictional tax rate of where the expense or benefit occurred. Adjusted Income from Continuing Operations per Diluted Share (Adjusted EPS) is defined as adjusted income from continuing operations divided by diluted weighted average common shares outstanding. We believe that adjusted income from continuing operations and adjusted EPS are useful to investors and other users of our financial statements in evaluating ongoing operating profitability, as well as in evaluating operating performance in relation to our competitors.
Free Cash Flow is defined as net cash provided by operating activities less capital expenditures. Free Cash Flow Margin is defined as free cash flow divided by revenue. We believe that free cash flow and free cash flow margin provide useful information to investors as it provides insight into a primary cash flow metric used by management to monitor and evaluate cash flows generated by our operations.
9
ITT Inc. Non-GAAP Reconciliation Statements
(In millions; all amounts unaudited)
Reconciliation of Revenue to Organic Revenue | ||||||||||||||||||||
MT | IP | CCT | Elim | Total | ||||||||||||||||
2024 Revenue | $ | 344.9 | $ | 333.8 | $ | 207.2 | $ | (0.7) | $ | 885.2 | ||||||||||
Less: Acquisitions | — | 40.0 | 15.3 | (0.1) | 55.2 | |||||||||||||||
Less: Foreign currency translation | 1.5 | (3.1) | — | (0.1) | (1.7) | |||||||||||||||
2024 Organic revenue | $ | 343.4 | $ | 296.9 | $ | 191.9 | $ | (0.5) | $ | 831.7 | ||||||||||
2023 Revenue | $ | 359.5 | $ | 279.8 | $ | 184.0 | $ | (1.2) | $ | 822.1 | ||||||||||
| Less: Divestitures | 31.4 | — | 2.5 | — | 33.9 | |||||||||||||||
2023 Organic revenue | $ | 328.1 | $ | 279.8 | $ | 181.5 | $ | (1.2) | $ | 788.2 | ||||||||||
Organic Revenue Growth - $ | $ | 15.3 | $ | 17.1 | $ | 10.4 | $ | 43.5 | ||||||||||||
Organic Revenue Growth - % | 4.7 | % | 6.1 | % | 5.7 | % | 5.5 | % | ||||||||||||
Reported Revenue Growth - $ | $ | (14.6) | $ | 54.0 | $ | 23.2 | $ | 63.1 | ||||||||||||
Reported Revenue Growth - % | (4.1) | % | 19.3 | % | 12.6 | % | 7.7 | % | ||||||||||||
Reconciliation of Orders to Organic Orders | ||||||||||||||||||||
MT | IP | CCT | Elim | Total | ||||||||||||||||
2024 Orders | $ | 353.3 | $ | 407.8 | $ | 205.5 | $ | (1.2) | $ | 965.4 | ||||||||||
Less: Acquisitions | — | 60.7 | 6.5 | — | 67.2 | |||||||||||||||
Less: Foreign currency translation | 1.6 | (5.0) | — | (0.1) | (3.5) | |||||||||||||||
2024 Organic orders | $ | 351.7 | $ | 352.1 | $ | 199.0 | $ | (1.1) | $ | 901.7 | ||||||||||
2023 Orders | $ | 366.6 | $ | 270.8 | $ | 187.4 | $ | (0.7) | $ | 824.1 | ||||||||||
| Less: Divestitures | 31.4 | — | 1.7 | — | 33.1 | |||||||||||||||
2023 Organic orders | $ | 335.2 | $ | 270.8 | $ | 185.7 | $ | (0.7) | $ | 791.0 | ||||||||||
Organic Orders Growth - $ | $ | 16.5 | $ | 81.3 | $ | 13.3 | $ | 110.7 | ||||||||||||
Organic Orders Growth - % | 4.9 | % | 30.0 | % | 7.2 | % | 14.0 | % | ||||||||||||
Reported Orders Growth - $ | $ | (13.3) | $ | 137.0 | $ | 18.1 | $ | 141.3 | ||||||||||||
Reported Orders Growth - % | (3.6) | % | 50.6 | % | 9.7 | % | 17.1 | % | ||||||||||||
Note: Immaterial differences due to rounding. | ||||||||||||||||||||
10
ITT Inc. Non-GAAP Reconciliation Statements
(In millions; all amounts unaudited)
| Reconciliations of Operating Income/Margin to Adjusted Operating Income/Margin | |||||||||||||||||||||||||||||||||||
| Third Quarter 2024 | Third Quarter 2023 | ||||||||||||||||||||||||||||||||||
| MT | IP | CCT | Corporate | ITT | MT | IP | CCT | Corporate | ITT | ||||||||||||||||||||||||||
| Reported Operating Income | $ | 110.0 | $ | 69.8 | $ | 38.1 | $ | (10.0) | $ | 207.9 | $ | 59.4 | $ | 64.7 | $ | 33.2 | $ | (14.2) | $ | 143.1 | |||||||||||||||
Gain on sale of Wolverine business | (47.8) | — | — | — | (47.8) | — | — | — | — | — | |||||||||||||||||||||||||
| Restructuring costs | 0.2 | 0.4 | 0.2 | — | 0.8 | 1.1 | 0.6 | 0.2 | — | 1.9 | |||||||||||||||||||||||||
| Acquisition-related expenses | — | (0.4) | 1.2 | — | 0.8 | — | — | — | — | — | |||||||||||||||||||||||||
Impacts related to Russia-Ukraine war | (0.1) | — | — | — | (0.1) | 0.5 | — | — | — | 0.5 | |||||||||||||||||||||||||
Other special items | — | — | — | — | — | — | (0.1) | 0.1 | — | — | |||||||||||||||||||||||||
| Adjusted Operating Income | $ | 62.3 | $ | 69.8 | $ | 39.5 | $ | (10.0) | $ | 161.6 | $ | 61.0 | $ | 65.2 | $ | 33.5 | $ | (14.2) | $ | 145.5 | |||||||||||||||
| Change in Operating Income | 85.2 | % | 7.9 | % | 14.8 | % | (29.6) | % | 45.3 | % | |||||||||||||||||||||||||
| Change in Adjusted Operating Income | 2.1 | % | 7.1 | % | 17.9 | % | (29.6) | % | 11.1 | % | |||||||||||||||||||||||||
| Reported Operating Margin | 31.9 | % | 20.9 | % | 18.4 | % | 23.5 | % | 16.5 | % | 23.1 | % | 18.0 | % | 17.4 | % | |||||||||||||||||||
| Impact of special item adjustments | -1380 bps | 0 bps | 70 bps | -520 bps | 50 bps | 20 bps | 20 bps | 30 bps | |||||||||||||||||||||||||||
| Adjusted Operating Margin | 18.1 | % | 20.9 | % | 19.1 | % | 18.3 | % | 17.0 | % | 23.3 | % | 18.2 | % | 17.7 | % | |||||||||||||||||||
| Change in Operating Margin | 1540 bps | -220 bps | 40 bps | 610 bps | |||||||||||||||||||||||||||||||
| Change in Adjusted Operating Margin | 110 bps | -240 bps | 90 bps | 60 bps | |||||||||||||||||||||||||||||||
Note: Immaterial differences due to rounding. | |||||||||||||||||||||||||||||||||||
11
ITT Inc. Non-GAAP Reconciliation Statements
(In millions; all amounts unaudited)
| Reconciliation of Reported vs. Adjusted Income from Continuing Operating and Diluted EPS | ||||||||||||||||||||||||||
| Income from Continuing Operations | Diluted Earnings per Share | |||||||||||||||||||||||||
Q3 2024 | Q3 2023 | % Change | Q3 2024 | Q3 2023 | % Change | |||||||||||||||||||||
| Reported | $ | 161.3 | $ | 110.8 | 45.6 | % | $ | 1.96 | $ | 1.34 | 46.3 | % | ||||||||||||||
| Special Items Expense / (Income): | ||||||||||||||||||||||||||
Gain on sale of Wolverine business | (47.8) | — | (0.58) | — | ||||||||||||||||||||||
| Restructuring costs | 0.8 | 1.9 | 0.01 | 0.03 | ||||||||||||||||||||||
Acquisition-related costs | 0.8 | — | 0.01 | — | ||||||||||||||||||||||
Impacts related to Russia-Ukraine war | (0.1) | 0.5 | — | 0.01 | ||||||||||||||||||||||
Net tax benefit of pre-tax special items | (0.7) | (0.5) | (0.01) | (0.01) | ||||||||||||||||||||||
Other tax-related special items [a] | 5.6 | 0.3 | 0.07 | — | ||||||||||||||||||||||
| Adjusted | $ | 119.9 | $ | 113.0 | 6.1 | % | $ | 1.46 | $ | 1.37 | 6.6 | % | ||||||||||||||
Note: Amounts may not calculate due to rounding. | ||||||||||||||||||||||||||
| Per share amounts are based on diluted weighted average common shares outstanding. | ||||||||||||||||||||||||||
[a] | 2024 includes a tax expense on distributions of $4.6, tax expense from valuation allowance impacts of $2.2, and a tax benefit on return to accrual adjustments of ($1.3). | |||||||||||||||||||||||||
12
ITT Inc. Non-GAAP Reconciliation Statements
(In millions; all amounts unaudited)
| Reconciliation of GAAP vs Adjusted EPS Guidance - Full Year 2024 | ||||||||||||||||||||
| 2024 Full-Year Guidance | ||||||||||||||||||||
| Low | High | |||||||||||||||||||
EPS from Continuing Operations - GAAP | $ | 6.16 | $ | 6.22 | ||||||||||||||||
Gain on sale of Wolverine business | (0.58) | (0.58) | ||||||||||||||||||
| Estimated restructuring | 0.07 | 0.07 | ||||||||||||||||||
| Other special items | 0.06 | 0.06 | ||||||||||||||||||
| Tax on special Items | 0.09 | 0.09 | ||||||||||||||||||
| EPS from Continuing Operations - Adjusted | $ | 5.80 | $ | 5.86 | ||||||||||||||||
Note: The Company has provided forward-looking non-GAAP financial measures for organic revenue growth and adjusted operating margin. It is not possible, without unreasonable efforts, to estimate the impacts of foreign currency fluctuations, acquisitions, and certain other special items that may occur in 2024 as these items are inherently uncertain and difficult to predict. As a result, the Company is unable to quantify certain amounts that would be included in a reconciliation of organic revenue growth and adjusted operating margin to the most directly comparable GAAP financial measures without unreasonable efforts and accordingly has not provided reconciliations for these forward looking non-GAAP financial measures. | ||||||||||||||||||||
13
ITT Inc. Non-GAAP Reconciliation Statements
(In millions; all amounts unaudited)
| Reconciliation of Cash from Operating Activities to Free Cash Flow | ||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | FY 2024 | ||||||||||||||||||||||||
| 9/28/2024 | 9/30/2023 | 9/28/2024 | 9/30/2023 | Guidance | ||||||||||||||||||||||
| Net Cash - Operating Activities | $ | 123.9 | $ | 169.8 | $ | 339.4 | $ | 367.6 | $ | 600.0 | ||||||||||||||||
| Less: Capital expenditures | 36.6 | 22.2 | 87.5 | 68.5 | 150.0 | |||||||||||||||||||||
| Free Cash Flow | $ | 87.3 | $ | 147.6 | $ | 251.9 | $ | 299.1 | $ | 450.0 | ||||||||||||||||
| Revenue | $ | 885.2 | $ | 822.1 | $ | 2,701.7 | $ | 2,453.9 | $ | 3,630.0 | [a] | |||||||||||||||
| Free Cash Flow Margin | 9.9 | % | 18.0 | % | 9.3 | % | 12.2 | % | 12.4 | % | ||||||||||||||||
[a] Revenue included in the full year 2024 free cash flow margin guidance represents the expected revenue growth mid-point. | ||||||||||||||||||||||||||
14