- 9% revenue growth (5% organic) driven by pump projects and
aftermarket, aerospace and defense components, and Friction OE
outperformance
- 19.1% segment operating margin (19.4% adjusted), 150 basis
points expansion (120 basis points adjusted); segment operating
income increased 19% (17% adjusted)
- Year-to-date operating cash flow of $368 million, free cash
flow of $299 million
- Raising 2023 full year guidance across all metrics
November 2, 2023-- ITT Inc. (NYSE: ITT) today reported financial
results for the third quarter ended September 30, 2023. The company
reported a year-over-year revenue increase of 9%, primarily driven
by 13% growth in both Industrial Process and Connect & Control
Technologies. Foreign currency translation drove a 3% favorable
impact and the acquisition of Micro-Mode contributed 1% to total
revenue growth.
Third quarter segment operating income of $157 million increased
19% versus prior year (17% adjusted) due to productivity, pricing
actions and higher sales volume. This was partially offset by
higher compensation costs, overhead inflation and strategic growth
investments.
EPS for the third quarter of $1.34 increased 9% versus prior
year primarily due to segment operating income growth and benefits
from share repurchases. Adjusted EPS of $1.37 increased 14%
compared to prior year. Adjustments to EPS are primarily related to
restructuring costs to optimize the company’s cost base and
write-downs due to the suspension of business in Russia.
Operating cash flow for the third quarter of $170 million
increased $109 million versus prior year primarily driven by higher
operating income and improved working capital management. Free cash
flow for the quarter of $148 million increased $113 million versus
prior year. On a year-to-date basis, ITT generated operating cash
flow of $368 million, up $252 million versus 2022, and free cash
flow of $299 million, up $258 million versus 2022.
Table 1. Third Quarter Performance
Q3
2023
Q3
2022
Change
Revenue
$
822.1
$
753.6
9.1
%
Organic Growth
5.4
%
Segment Operating Income
$
157.3
$
132.4
18.8
%
Segment Operating Margin
19.1
%
17.6
%
150
bps
Adjusted Segment Operating Income
$
159.7
$
136.8
16.7
%
Adjusted Segment Operating Margin
19.4
%
18.2
%
120
bps
Earnings Per Share
$
1.34
$
1.23
8.9
%
Adjusted Earnings Per Share
$
1.37
$
1.20
14.2
%
Operating Cash Flow
$
169.8
$
61.0
178.4
%
Free Cash Flow
$
147.6
$
34.8
324.1
%
Note: all results unaudited; dollars in
millions except for per share amounts
Management Commentary
“In Q3, we continued to generate strong growth and execute on
all fronts. Our teams drove share gains in automotive and rail,
large project growth and aftermarket demand in pumps and valves,
and growth in aerospace and defense. Once again, we delivered
strong year-over-year and sequential segment margin expansion, and
are accelerating towards our 20% long-term target. We also
generated more than $350 million of cash flow this year, acquired
Svanehøj to grow our flow portfolio, and will continue to put our
cash to work with further M&A opportunities and the new $1
billion share repurchase program we announced in October. As a
result of this performance, today we are raising our 2023 outlook
for the third straight quarter. We continue to execute at a new
level of earnings, profitability and cash, whilst reinvesting in
our businesses and growing through acquisitions to deliver
long-term value,” said ITT’s Chief Executive Officer and President
Luca Savi.
Table 2. Third Quarter Segment Results
Revenue
Operating Income
Q3 2023
Reported Increase
Organic Growth
Q3 2023
Reported Increase
Adjusted Increase
Motion Technologies
$
359.5
5.1 %
0.6 %
$
59.4
10.0 %
12.8 %
Industrial Process
279.8
12.6 %
10.9 %
64.7
34.5 %
24.4 %
Connect & Control Technologies
184.0
12.7 %
7.7 %
33.2
9.6 %
10.6 %
Total Segment Results
822.1
9.1 %
5.4 %
157.3
18.8 %
16.7 %
Note: all results unaudited; excludes
intercompany eliminations of $1.2; comparisons to Q3 2022
Motion Technologies revenue increased $17 million
primarily due to higher sales volume in Friction OE and favorable
foreign currency translation impacts. Operating income increased $5
million primarily due to productivity actions and higher sales
volume, partially offset by higher labor and overhead costs,
unfavorable sales mix and prior year foreign currency hedge
benefits.
Industrial Process revenue increased $31 million
primarily due to growth in aftermarket parts and service and
project shipments. Operating income increased $17 million primarily
due to pricing actions, higher volume and productivity savings,
partially offset by higher labor costs.
Connect & Control Technologies revenue increased $21
million primarily driven by pricing actions, volume growth in
aerospace and defense components, and the acquisition of
Micro-Mode. Operating income increased $3 million primarily due to
pricing and productivity actions, partially offset by higher labor
and overhead costs.
2023 Guidance
We now expect revenue growth of approximately 9%, up 7% to 8% on
an organic basis; segment operating margin of 17.9% to 18.5% and
adjusted segment operating margin of 18.3% to 18.9%, up 110 bps to
170 bps; EPS of $5.05 to $5.11 and adjusted EPS of $5.15 to $5.21,
up 16% to 17% for the full year; and free cash flow of over $400
million, representing approximately 12% free cash flow margin for
the full year 2023.*
*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 2023 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
Thursday, November 2 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 from two hours after the webcast until Thursday, November
16, 2023 at midnight Eastern Time. Reconciliations of non-GAAP
financial performance metrics to their most comparable U.S. 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.
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,” “estimate,” “expect,”
“project,” “intend,” “plan,” “believe,” “target,” “future,” “may,”
“will,” “could,” “should,” “potential,” “continue,” “guidance” 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:
- volatility in raw material prices and our suppliers’ ability to
meet quality and delivery requirements;
- uncertain global economic and capital markets conditions, which
have been influenced by the COVID-19 pandemic, the Israel-Hamas
conflict, the ongoing Russia-Ukraine war, inflation, changes in
monetary policies, slowing growth and the threat of a possible
global economic recession, trade disputes between the U.S. and its
trading partners, political and social unrest, instability in the
global banking system and the availability and fluctuations in
prices of energy and commodities, including steel, oil, copper and
tin;
- impacts on our business stemming from continued supply chain
disruptions and raw material shortages, which have resulted in
increased costs and reduced availability of key commodities and
other necessary services;
- our inability to hire or retain key personnel;
- 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;
- failure to manage the distribution of products and services
effectively;
- fluctuations in interest rates and the impact of such
fluctuations on customer behavior and on our cost of debt;
- failure to compete successfully and innovate in our
markets;
- 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, as well
as similar breaches or failures affecting our business partners or
service providers;
- 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, including as a result of the tentatively-settled United
Automobile Workers (UAW) strike at the production facilities of
some of our customers; and maintenance expenditures, especially in
the energy, chemical and mining markets;
- the impacts on our business from Russia’s war with Ukraine, and
the global response to it;
- the risk of material business interruptions, particularly at
our manufacturing facilities;
- risk of liabilities from past divestitures and spin-offs;
- failure of portfolio management strategies, including
cost-saving initiatives, to meet expectations;
- 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 the passage of the Inflation Reduction Act of 2022 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;
- increased scrutiny from investors, lenders and other market
participants regarding our environmental, social and governance and
sustainability responsibilities, which could expose us to
additional costs and adversely impact our reputation, business,
financial performance and growth;
- failure to comply with the U.S. Foreign Corrupt Practices Act
(or other applicable anti-corruption legislation), export controls
and trade sanctions;
- risk of product liability claims and litigation; and
- changes in laws relating to the use and transfer of personal
and other information.
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.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS) Three Months Ended
Nine Months Ended
September 30,2023 October 1,2022
September 30,2023 October 1,2022 Revenue
$
822.1
$
753.6
$
2,453.9
$
2,213.1
Cost of revenue
542.7
520.2
1,632.6
1,539.1
Gross profit
279.4
233.4
821.3
674.0
General and administrative expenses
66.9
47.5
203.6
164.9
Sales and marketing expenses
44.4
39.5
131.2
118.3
Research and development expenses
25.0
24.4
77.1
73.7
Operating income
143.1
122.0
409.4
317.1
Interest and non-operating expense, net
1.4
2.3
7.4
2.6
Income from continuing operations before income tax expense
141.7
119.7
402.0
314.5
Income tax expense
29.9
16.4
80.6
59.9
Income from continuing operations
111.8
103.3
321.4
254.6
Loss from discontinued operations, net of tax benefit of $0.0,
$(0.1), $0.0 and $0.3, respectively
-
(0.1)
-
(1.3)
Net income
111.8
103.2
321.4
253.3
Less: Income attributable to noncontrolling interests
1.0
0.8
2.4
1.5
Net income attributable to ITT Inc.
$
110.8
$
102.4
$
319.0
$
251.8
Amounts attributable to ITT Inc.: Income from
continuing operations
$
110.8
$
102.5
$
319.0
$
253.1
Loss from discontinued operations, net of tax
-
(0.1)
-
(1.3)
Net income attributable to ITT Inc.
$
110.8
$
102.4
$
319.0
$
251.8
Earnings (loss) per share attributable to ITT Inc.:
Basic: Continuing operations
$
1.35
$
1.24
$
3.87
$
3.03
Discontinued operations
-
-
-
(0.02)
Net income
$
1.35
$
1.24
$
3.87
$
3.01
Diluted: Continuing operations
$
1.34
$
1.23
$
3.86
$
3.02
Discontinued operations
-
-
-
(0.02)
Net income
$
1.34
$
1.23
$
3.86
$
3.00
Weighted average common shares – basic
82.1
82.7
82.4
83.6
Weighted average common shares – diluted
82.5
83.0
82.7
83.9
CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED) (IN
MILLIONS, EXCEPT PER SHARE AMOUNTS)
September 30,2023
December 31,2022 As of the Period Ended
Assets Current
assets: Cash and cash equivalents
$
430.8
$
561.2
Receivables, net
674.0
628.8
Inventories
574.3
533.9
Other current assets
102.4
112.9
Total current assets
1,781.5
1,836.8
Non-current assets: Plant, property and equipment, net
523.2
526.8
Goodwill
1,001.1
964.8
Other intangible assets, net
123.0
112.8
Other non-current assets
373.5
339.1
Total non-current assets
2,020.8
1,943.5
Total assets
$
3,802.3
$
3,780.3
Liabilities and Shareholders’ Equity Current liabilities:
Commercial paper and current maturities of long-term debt
$
245.4
$
451.0
Accounts payable
408.1
401.1
Accrued and other current liabilities
390.5
333.4
Total current liabilities
1,044.0
1,185.5
Non-current liabilities: Postretirement benefits
132.0
137.2
Other non-current liabilities
207.1
200.2
Total non-current liabilities
339.1
337.4
Total liabilities
1,383.1
1,522.9
Shareholders’ equity: Common stock: Authorized – 250.0 shares, $1
par value per share Issued and outstanding – 82.1 shares and 82.7
shares, respectively
82.1
82.7
Retained earnings
2,705.8
2,509.7
Accumulated other comprehensive loss: Postretirement benefit plans
3.8
3.6
Cumulative translation adjustments
(382.6)
(347.9)
Total accumulated other comprehensive loss
(378.8)
(344.3)
Total ITT Inc. shareholders’ equity
2,409.1
2,248.1
Noncontrolling interests
10.1
9.3
Total shareholders’ equity
2,419.2
2,257.4
Total liabilities and shareholders’ equity
$
3,802.3
$
3,780.3
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
(IN MILLIONS) For the Nine Months Ended
September
30,2023 October 1,2022
Operating Activities Income from
continuing operations attributable to ITT Inc.
$
319.0
$
253.1
Adjustments to income from continuing operations: Depreciation and
amortization
82.8
81.5
Equity-based compensation
15.1
13.6
Gain on sale of business
(7.2)
-
Other non-cash charges, net
22.5
20.2
Changes in assets and liabilities: Change in receivables
(54.7)
(120.8)
Change in inventories
(40.9)
(111.3)
Change in contract assets
0.5
(15.6)
Change in contract liabilities
11.1
24.4
Change in accounts payable
16.5
54.0
Change in accrued expenses
29.4
(30.6)
Change in income taxes
(2.1)
(12.1)
Other, net
(24.4)
(41.2)
Net Cash – Operating Activities
367.6
115.2
Investing Activities Capital expenditures
(68.5)
(73.7)
Proceeds from sale of business
10.5
-
Acquisitions, net of cash acquired
(79.3)
(146.9)
Payments to acquire interest in unconsolidated subsidiaries
(1.4)
(25.6)
Other, net
(3.3)
1.4
Net Cash – Investing Activities
(142.0)
(244.8)
Financing Activities Commercial paper, net borrowings
(204.3)
363.1
Share repurchases under repurchase plan
(60.0)
(245.6)
Payments for taxes related to net share settlement of stock
incentive plans
(6.7)
(8.5)
Dividends paid
(71.9)
(66.1)
Other, net
(2.3)
0.1
Net Cash – Financing Activities
(345.2)
43.0
Exchange rate effects on cash and cash equivalents
(10.4)
(46.3)
Net cash – operating activities of discontinued operations
(0.2)
(0.1)
Net change in cash and cash equivalents
(130.2)
(133.0)
Cash and cash equivalents – beginning of year (includes restricted
cash of $0.7 and $0.8, respectively)
561.9
648.3
Cash and Cash Equivalents – end of year (includes restricted cash
of $0.9 and $0.8, respectively)
$
431.7
$
515.3
Supplemental Disclosures of Cash Flow Information Cash paid
during the year for: Interest
$
12.3
$
5.7
Income taxes, net of refunds received
$
72.0
$
63.5
Key Performance Indicators and Non-GAAP Measures
Management reviews a variety of key performance indicators
including revenue, segment operating income and margins, earnings
per share, order growth, and backlog, some of which are calculated
on a non-GAAP basis. 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 and acquisitions. The
period-over-period change resulting from foreign currency
fluctuations is estimated using a fixed exchange rate for both the
current and prior periods. We believe that reporting organic
revenue and organic orders provides 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
and
Adjusted Segment Operating Income are defined,
respectively, as total operating income and segment operating
income, adjusted to exclude special items that include, but are not
limited to, restructuring, certain asset impairment charges,
certain acquisition-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 and
Adjusted Segment Operating Margin are defined
as adjusted operating income or adjusted segment operating income,
respectively, 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-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 provides 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.
ITT Inc. Non-GAAP
Reconciliation Reported vs. Organic Revenue / Orders
Third Quarter 2023 & 2022 (In Millions) (all amounts
unaudited)
(As Reported - GAAP) (As Adjusted -
Organic) (A) (B) (C) (D) (E) (F) = A-D-E (G) =C-D-E (H)
= G / B $ Change % Change Revenue / $ Change % Change 2023 vs.2022
2023 vs.2022 Acquisitions FX Impact Orders
Adj. 2023 vs. 2022
Adj. 2023vs. 2022 Q3 2023 Q3 2022 Q3 2023 Q3 2023 Q3 2023
Revenue ITT Inc.
$
822.1
$
753.6
$
68.5
9.1%
$
6.0
$
21.6
$
794.5
$
40.9
5.4%
Motion Technologies
359.5
342.2
17.3
5.1%
-
15.3
344.2
2.0
0.6%
Industrial Process
279.8
248.5
31.3
12.6%
-
4.1
275.7
27.2
10.9%
Connect & Control Technologies
184.0
163.2
20.8
12.7%
6.0
2.2
175.8
12.6
7.7%
Orders
ITT Inc.
$
824.1
$
780.9
$
43.2
5.5%
$
4.9
$
22.3
$
796.9
$
16.0
2.0%
Motion Technologies
366.6
342.3
24.3
7.1%
-
15.6
351.0
8.7
2.5%
Industrial Process
270.8
271.9
(1.1)
(0.4%)
-
4.7
266.1
(5.8)
(2.1%)
Connect & Control Technologies
187.4
167.4
20.0
11.9%
4.9
2.0
180.5
13.1
7.8%
Note: Excludes intercompany eliminations Immaterial
differences due to rounding
ITT Inc. Non-GAAP Reconciliation
Reported vs Adjusted Segment Operating Income & Segment
Operating Margin Third Quarter 2023 & 2022 (In
Millions) (all amounts unaudited) Q3 2023 Q3 2023 Q3 2023 Q3
2022 Q3 2022 Q3 2022 % Change % Change AsReported SpecialItems
AsAdjusted AsReported SpecialItems AsAdjusted As Reported2023 vs.
2022 As Adjusted2023 vs. 2022
Revenue: Motion
Technologies
$
359.5
$
359.5
$
342.2
$
342.2
5.1%
5.1%
Industrial Process
279.8
279.8
248.5
248.5
12.6%
12.6%
Connect & Control Technologies
184.0
184.0
163.2
163.2
12.7%
12.7%
Intersegment eliminations
(1.2)
(1.2)
(0.3)
(0.3)
Total Revenue
$
822.1
$
822.1
$
753.6
$
753.6
9.1%
9.1%
Operating Margin: Motion Technologies
16.5%
50
BP
17.0%
15.8%
-
BP
15.8%
70
BP
120
BP Industrial Process
23.1%
20
BP
23.3%
19.4%
170
BP
21.1%
370
BP
220
BP Connect & Control Technologies
18.0%
20
BP
18.2%
18.6%
-
BP
18.6%
(60)
BP
(40)
BP Total Operating Segments
19.1%
30
BP
19.4%
17.6%
60
BP
18.2%
150
BP
120
BP
Operating Income: Motion Technologies
$
59.4
$
1.6
$
61.0
$
54.0
$
0.1
$
54.1
10.0%
12.8%
Industrial Process
64.7
0.5
65.2
48.1
4.3
52.4
34.5%
24.4%
Connect & Control Technologies
33.2
0.3
33.5
30.3
-
30.3
9.6%
10.6%
Total Segment Operating Income
$
157.3
$
2.4
$
159.7
$
132.4
$
4.4
$
136.8
18.8%
16.7%
Note: Immaterial differences due to rounding. Special
items include, but are not limited to, restructuring costs,
acquisition-related expenses, and other unusual or infrequent
items.
ITT Inc. Non-GAAP Reconciliation Reported vs.
Adjusted Income from Continuing Operations & Adjusted EPS
Third Quarter 2023 & 2022 (In Millions, except per share
amounts) (all amounts unaudited) Q3 2023 Q3 2023 Q3 2022 Q3
2022 $ Change % Change AsReported Non-GAAPAdjustments AsAdjusted
AsReported Non-GAAPAdjustments AsAdjusted As Adjusted2023 vs. 2022
As Adjusted2023 vs. 2022 Segment operating income
$
157.3
$
2.4
#A
$
159.7
$
132.4
$
4.4
#A
$
136.8
Corporate and other (income) costs
(14.2)
-
(14.2)
(10.4)
0.6
#B
(9.8)
Operating income
143.1
2.4
145.5
122.0
5.0
127.0
18.5
14.6%
Operating margin
17.4%
17.7%
16.2%
16.9%
Interest income (expense), net
(2.3)
-
(2.3)
(2.4)
-
(2.4)
Other income (expense), net
0.9
-
0.9
0.1
-
0.1
Income from continuing operations before tax
141.7
2.4
144.1
119.7
5.0
124.7
Income tax expense
(29.9)
(0.2)
#C
(30.1)
(16.4)
(7.9)
#C
(24.3)
Income from continuing operations
111.8
2.2
114.0
103.3
(2.9)
100.4
Less: Income attributable to noncontrolling interests
1.0
-
1.0
0.8
-
0.8
Income from continuing operations - ITT Inc.
$
110.8
$
2.2
$
113.0
$
102.5
$
(2.9)
$
99.6
EPS from continuing operations
$
1.34
$
0.03
$
1.37
$
1.23
$
(0.03)
$
1.20
$
0.17
14.2%
Note: Amounts may not calculate due to rounding. Per share
amounts are based on diluted weighted average common shares
outstanding. #A - 2023 includes restructuring costs ($1.9M)
and impacts due to the suspension of business in Russia ($0.5M). #A
- 2022 includes restructuring costs ($1.1M), acquisition-related
expenses ($3.1M), and other costs ($0.2M). #B - 2022
includes acquisition-related expenses ($0.5M) and other costs
($0.1M). #C - 2023 includes the net tax benefit of special
items #A ($0.5M) and a net tax expense for other tax-related
special charges ($0.3M). #C - 2022 includes the net tax benefit of
special items #A and #B ($1.1M), tax benefit on future distribution
of foreign earnings ($7.8M), and other tax-related special items.
ITT Inc. Non-GAAP Reconciliation Free Cash Flow and Free
Cash Flow Margin Three and Nine Months Ended 2023 &
2022 (In Millions) (all amounts unaudited)
Q3
2023 Q3 2022
9M 2023
9M 2022
Net Cash - Operating Activities
$
169.8
$
61.0
$
367.6
$
115.2
Less: Capital expenditures
22.2
26.2
68.5
73.7
Free Cash Flow
$
147.6
$
34.8
$
299.1
$
41.5
Revenue
$
822.1
$
753.6
$
2,453.9
$
2,213.1
Free Cash Flow Margin
18.0%
4.6%
12.2%
1.9%
ITT Inc. Non-GAAP Reconciliation GAAP vs. Adjusted
EPS Guidance Full Year 2023 (Per share amounts) (all
amounts unaudited)
2023 Full-Year
Guidance
Low
High
EPS from Continuing Operations - GAAP
$
5.05
$
5.11
Estimated restructuring, net of tax
0.08
0.08
Other special items, net of tax
0.03
0.03
Other tax special Items
(0.01)
(0.01)
EPS from Continuing Operations - Adjusted
$
5.15
$
5.21
Note:
The Company has provided forward-looking non-GAAP financial
measures for organic revenue growth and adjusted segment 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 2023 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 segment 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.
ITT Inc. Non-GAAP
Reconciliation Free Cash Flow and Free Cash Flow Margin
Guidance Full Year 2023 (In Millions) (all amounts
unaudited)
2023 Full-Year Guidance Net
Cash - Operating Activities ~$510 Less: Capital expenditures
~$110
Free Cash Flow ~$400 Revenue #A
~$3,250
Free Cash Flow margin ~12% #A
Represents expected revenue growth of approximately ~9%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231102095904/en/
Investor Contact
Mark Macaluso +1 914-641-2064 mark.macaluso@itt.com
Media Contact
Phil Terrigno +1 914-641-2143 phil.terrigno@itt.com
ITT (NYSE:ITT)
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