Fourth Quarter 2023 Highlights
- Reported sales of $548 million, up 9% on a reported basis
and down 1% organically
- Reported operating margin of 14.4%, up 100 bps; adjusted
operating margin of 15.8%, up 150 bps
- Reported EPS of $1.67, down 19%; adjusted EPS of $1.97, up
23%
Full Year 2023 Highlights
- Reported sales of $2.06 billion, up 4% on a reported basis
and 1% organically
- Reported operating margin of 17.1%, up 120 bps; adjusted
operating margin of 17.8%, up 140 bps
- Reported EPS of $7.82, up 5%; adjusted EPS of $8.27, up
16%
- Operating cash flow of $311 million and free cash flow of
$281 million, a 39% and 40% increase, respectively
- Closed the acquisition of Josam Company effective January 1,
2024
Note changes in performance are relative to fourth quarter
and year ended December 31, 2022
Watts Water Technologies, Inc., (NYSE: WTS) – through its
subsidiaries, one of the world’s leading manufacturers and
providers of plumbing, heating and water quality products and
solutions – today announced results for the fourth quarter and full
year 2023.
Chief Executive Officer Robert J. Pagano Jr. commented, “We
closed out 2023 with record results for the quarter and full year,
including record sales, operating margin and adjusted earnings per
share. I would like to express my gratitude to the entire Watts
team for their dedication and support throughout the year as we
delivered on our commitments to serve our customers, executed on
new product development, including products to support our Smart
and Connected strategy, and funded long-term investments.”
Mr. Pagano continued, “We are also pleased to have completed the
acquisitions of Bradley Corporation in the fourth quarter and Josam
Company effective January 1, 2024. These strategic and
complementary acquisitions expand our addressable market and enable
value creation through greater scale and growth opportunities. The
integration of both companies is underway and is progressing well.
Our balance sheet remains strong, and our robust cash flow
continues to support investment into the business, return of
capital to shareholders and the execution of our long-term
strategy.”
“As we enter 2024, we are monitoring weakening global economic
indicators. We are currently expecting softer market conditions as
the year progresses, and we have incorporated these expectations
into our outlook. We are taking actions as needed to adjust our
cost structure and are confident that our experienced team is
well-equipped to navigate the dynamic operating environment,”
concluded Mr. Pagano.
A summary of fourth quarter and full year financial results is
as follows:
Fourth Quarter and Full Year
Earnings Summary
Fourth quarter ended December
31,
Year ended December
31,
(In millions, except per share
information)
2023
2022
% Change
2023
2022
% Change
Sales
$
547.5
$
501.9
9
%
$
2,056.3
$
1,979.5
4
%
Net income
55.8
68.6
(19)
%
262.1
251.5
4
%
Diluted net income per share
$
1.67
$
2.05
(19)
%
$
7.82
$
7.48
5
%
Special items (1)
0.30
(0.45)
0.45
(0.35)
Adjusted earnings per share (1)
$
1.97
$
1.60
23
%
$
8.27
$
7.13
16
%
(1)
Special items and adjusted earnings per
share represent non-GAAP financial measures. For a reconciliation
of GAAP to non-GAAP items please see the tables attached to this
press release.
Fourth Quarter Financial Highlights Fourth quarter
2023 performance relative to fourth quarter 2022
- Sales of $548 million increased 9% on a reported basis and were
down 1% organically, primarily due to a tough prior-year organic
comparison with 11% organic growth in the fourth quarter of 2022.
The fourth quarter of 2023 included low-single digit organic growth
in the Americas and in Asia Pacific, Middle East and Africa
(“APMEA”) that was offset by mid-single digit organic decline in
Europe. Sales from acquisitions totaled approximately $42 million
with $33 million reported within the Americas and $9 million
reported within APMEA. Favorable foreign exchange movements added
approximately $6 million in sales.
- Operating margin increased 100 basis points on a reported basis
and 150 basis points on an adjusted basis, driven by favorable
price, product mix and productivity, which more than offset
inflation, lower volume, incremental investments and the dilutive
impact of the Enware and Bradley acquisitions. Reported operating
margin was unfavorably impacted by acquisition-related charges and
was partially offset by lower restructuring charges.
Regional Performance
Americas
- Sales of $387 million increased 10% on a reported basis and 1%
on an organic basis, against a tough prior-year comparison of 11%
organic growth in the fourth quarter of 2022. Solid growth in core
valve products was mostly offset by declines in gas connectors and
marine instrumentation. The acquisition of Bradley contributed
approximately $33 million in sales, or 9% to reported growth.
- Operating margin increased 120 basis points on a reported basis
and 150 basis points on an adjusted basis as benefits from price
realization, favorable product mix and productivity more than
offset inflation, lower volume, incremental investments and the
dilutive impact of the Bradley acquisition. Reported operating
margin was unfavorably impacted by acquisition-related
charges.
Europe
- Sales of $128 million were flat on a reported basis, which
included favorable foreign exchange movements of 5%. Organic sales
decreased 5%, as price realization was more than offset by lower
volumes in both fluid solutions and drains products.
- Operating margin increased 300 basis points on a reported basis
and 220 basis points on an adjusted basis. Reported and adjusted
operating margins both benefited from favorable price-cost dynamic
and product mix which more than offset lower volume and incremental
investments. Reported operating margin benefited from lower
restructuring charges.
APMEA
- Sales of $33 million increased 40% on a reported basis, which
included acquired sales of 37%, or $9 million, slightly offset by
unfavorable foreign exchange movements of 1%. Organic sales
increased 4%, driven by strong growth in Australia and New Zealand,
partially offset by flat sales in China and the Middle East.
- Operating margin decreased 160 basis points on a reported basis
and 180 basis points on an adjusted basis. Reported and adjusted
margins both benefited from price and productivity, which was more
than offset by inflation, incremental investments, affiliate
charges and dilution from the Enware acquisition. Reported
operating margin benefited from lower restructuring charges.
Cash Flow and Capital Allocation
- For 2023, operating cash flow was $311 million and net capital
expenditures were $30 million, resulting in free cash flow of $281
million. In 2022, operating cash flow was $224 million and net
capital expenditures were $23 million, resulting in free cash flow
of $201 million. Operating and free cash flow increased
year-over-year due to higher net income and reduced working capital
investment.
- The Company repatriated approximately $64 million in cash
during the fourth quarter of 2023 and approximately $118 million
for full year 2023. The proceeds were used to pay down revolving
debt and to fund acquisitions. The Company deployed approximately
$301 million of capital for the acquisition of Bradley Corporation
during the fourth quarter. The acquisition was funded with cash on
hand and borrowing on the Company’s revolving line of credit.
- The Company repurchased approximately 23,000 shares of Class A
common stock at a cost of $4.3 million during the fourth quarter of
2023. For full year 2023, the Company repurchased approximately
92,000 shares at a cost of approximately $16 million. Approximately
$12 million remains available under the stock repurchase program
authorized in 2019, which does not have an expiration date. An
additional $150 million remains available under the stock
repurchase program authorized in July 2023, which also has no
expiration date.
For a reconciliation of GAAP to non-GAAP items and a statement
regarding the usefulness of these measures to investors and
management in evaluating our operating performance, please see the
tables attached to this press release.
Watts Water Technologies, Inc. will hold a live webcast of its
conference call to discuss fourth quarter and full year 2023
results on Tuesday, February 13, 2024, at 9:00 a.m. EST. This press
release and the live webcast can be accessed by visiting the
Investor Relations section of the Company's website at
www.wattswater.com. Following the webcast, the call recording will
be available at the same address until February 12, 2025.
Watts Water Technologies, Inc., through its subsidiaries, is a
world leader in the manufacture of innovative products to control
the efficiency, safety, and quality of water within residential,
commercial, and institutional applications. Watts’ expertise in a
wide variety of water technologies enables us to be a comprehensive
supplier to the water industry.
This Press Release includes “forward-looking statements” as
defined in the Private Securities Litigation Reform Act of 1995,
including statements relating to expected 2024 financial results,
our strategy, the benefits from recent acquisitions and our ability
to manage challenging macro-economic and softer market conditions.
These forward-looking statements reflect our current views about
future events. You should not rely on forward-looking statements
because our actual results may differ materially from those
predicted as a result of a number of potential risks and
uncertainties. These potential risks and uncertainties include, but
are not limited to: the effectiveness, timing and expected savings
associated with our cost-cutting actions, restructuring and
initiatives; integration of acquired businesses in a timely and
cost-effective manner, retention of supplier and customer
relationships and key employees, and the ability to achieve
synergies and cost savings in the amounts and within the time
frames currently anticipated; current economic and financial
conditions, which can affect the housing and construction markets
where our products are sold, manufactured and marketed; shortages
in and pricing of raw materials and supplies; our ability to
compete effectively; changes in variable interest rates on our
borrowings; inflation; failure to expand our markets through
acquisitions; failure to successfully develop and introduce new
product offerings or enhancements to existing products; failure to
manufacture products that meet required performance and safety
standards; foreign exchange rate fluctuations; cyclicality of
industries where we market our products, such as plumbing and
heating wholesalers and home improvement retailers; environmental
compliance costs; product liability risks and costs; changes in the
status of current litigation; the war in Ukraine and other global
crises; supply chain and logistical disruptions or labor shortages
and workforce disruptions that could negatively affect our supply
chain, manufacturing, distribution, or other business processes;
and other risks and uncertainties discussed under the heading “Item
1A. Risk Factors” and in Note 16 of the Notes to the Consolidated
Financial Statements in our Annual Report on Form 10-K for the year
ended December 31, 2022, filed with the SEC, as well as risk
factors disclosed in our subsequent filings with the SEC. We
undertake no duty to update the information contained in this Press
Release, except as required by law.
WATTS WATER TECHNOLOGIES, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Amounts in millions, except
per share information)
(Unaudited)
Fourth Quarter Ended
Year Ended
December 31,
December 31,
December 31,
December 31,
2023
2022
2023
2022
Net sales
$
547.5
$
501.9
$
2,056.3
$
1,979.5
Cost of goods sold
291.8
283.3
1,095.4
1,105.2
GROSS PROFIT
255.7
218.6
960.9
874.3
Selling, general and administrative
expenses
173.1
147.0
604.5
550.5
Restructuring
3.8
6.2
5.5
10.6
Gain on sale of asset
—
(1.8
)
—
(1.8
)
OPERATING INCOME
78.8
67.2
350.9
315.0
Other (income) expense:
Interest income
(3.2
)
(0.3
)
(7.2
)
(0.6
)
Interest expense
3.8
2.0
8.2
7.0
Other expense, net
0.8
0.8
0.4
1.0
Total other expense
1.4
2.5
1.4
7.4
INCOME BEFORE INCOME TAXES
77.4
64.7
349.5
307.6
Provision (benefit) for income taxes
21.6
(3.9
)
87.4
56.1
NET INCOME
$
55.8
$
68.6
$
262.1
$
251.5
BASIC EPS
NET INCOME PER SHARE
$
1.67
$
2.05
$
7.85
$
7.51
Weighted average number of shares
33.4
33.4
33.4
33.5
DILUTED EPS
NET INCOME PER SHARE
$
1.67
$
2.05
$
7.82
$
7.48
Weighted average number of shares
33.5
33.5
33.5
33.6
Dividends declared per share
$
0.36
$
0.30
$
1.38
$
1.16
WATTS WATER TECHNOLOGIES, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(Amounts in millions, except
share information)
(Unaudited)
December 31,
December 31,
2023
2022
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
350.1
$
310.8
Trade accounts receivable, less reserve
allowances of $11.9 million at December 31, 2023 and $10.7 million
at December 31, 2022
259.8
233.8
Inventories, net:
Raw materials
150.6
138.0
Work in process
20.2
21.0
Finished goods
228.5
216.6
Total Inventories
399.3
375.6
Prepaid expenses and other current
assets
51.8
30.4
Total Current Assets
1,061.0
950.6
PROPERTY, PLANT AND EQUIPMENT:
Property, plant and equipment, at cost
677.2
595.6
Accumulated depreciation
(429.0
)
(398.8
)
Property, plant and equipment, net
248.2
196.8
OTHER ASSETS:
Goodwill
693.0
592.4
Intangible assets, net
216.1
113.7
Deferred income taxes
23.6
17.8
Other, net
67.5
59.6
TOTAL ASSETS
$
2,309.4
$
1,930.9
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable
$
131.8
$
134.3
Accrued expenses and other liabilities
190.3
174.6
Accrued compensation and benefits
83.7
69.8
Total Current Liabilities
405.8
378.7
LONG-TERM DEBT
298.3
147.6
DEFERRED INCOME TAXES
13.5
26.2
OTHER NONCURRENT LIABILITIES
78.5
77.8
STOCKHOLDERS' EQUITY:
Preferred Stock, $0.10 par value;
5,000,000 shares authorized; no shares issued or outstanding
—
—
Class A common stock, $0.10 par value;
120,000,000 shares authorized; 1 vote per share; issued and
outstanding: 27,352,701 shares at December 31, 2023 and 27,314,679
shares at December 31, 2022
2.7
2.7
Class B common stock, $0.10 par value;
25,000,000 shares authorized; 10 votes per share; issued and
outstanding: 5,958,290 shares at December 31, 2023 and at December
31, 2022
0.6
0.6
Additional paid-in capital
674.3
651.9
Retained earnings
979.1
795.3
Accumulated other comprehensive loss
(143.4
)
(149.9
)
Total Stockholders' Equity
1,513.3
1,300.6
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY
$
2,309.4
$
1,930.9
WATTS WATER TECHNOLOGIES, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Amounts in millions)
(Unaudited)
Year Ended
December 31,
December 31,
2023
2022
OPERATING ACTIVITIES
Net income
$
262.1
$
251.5
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation
30.1
27.6
Amortization of intangibles
13.2
12.1
Loss on disposal, (gain) on sale of asset
and impairment of long-lived asset
0.2
(0.2
)
Stock-based compensation
20.2
18.4
Deferred income tax
(18.8
)
(29.6
)
Changes in operating assets and
liabilities, net of effects from business acquisitions:
Accounts receivable
6.2
(20.0
)
Inventories
27.0
(16.4
)
Prepaid expenses and other assets
(20.6
)
1.9
Accounts payable, accrued expenses and
other liabilities
(8.8
)
(21.3
)
Net cash provided by operating
activities
310.8
224.0
INVESTING ACTIVITIES
Additions to property, plant and
equipment
(29.7
)
(28.1
)
Proceeds from the sale of property, plant
and equipment
—
5.2
Business acquisitions, net of cash
acquired and other
(313.4
)
—
Net cash used in investing activities
(343.1
)
(22.9
)
FINANCING ACTIVITIES
Proceeds from long-term borrowings
240.0
85.0
Payments of long-term debt
(90.0
)
(80.0
)
Payments for tax withholdings on vested
stock awards
(15.8
)
(13.3
)
Payments for finance leases and other
(2.8
)
(4.7
)
Proceeds from share transactions under
employee stock plans
0.1
0.2
Payments to repurchase common stock
(16.0
)
(69.4
)
Dividends
(46.5
)
(39.5
)
Net cash provided by (used in) financing
activities
69.0
(121.7
)
Effect of exchange rate changes on cash
and cash equivalents
2.6
(10.6
)
INCREASE IN CASH AND CASH EQUIVALENTS
39.3
68.8
Cash and cash equivalents at beginning of
year
310.8
242.0
CASH AND CASH EQUIVALENTS AT END OF
YEAR
$
350.1
$
310.8
WATTS WATER TECHNOLOGIES, INC.
AND SUBSIDIARIES
SEGMENT INFORMATION
(Amounts in millions)
(Unaudited)
Net Sales
Fourth Quarter Ended
Year Ended
December 31,
2023
December 31,
2022
December 31,
2023
December 31,
2022
Americas
$
387.0
$
350.4
$
1,428.1
$
1,390.0
Europe
128.0
128.3
512.1
499.1
APMEA
32.5
23.2
116.1
90.4
Total
$
547.5
$
501.9
$
2,056.3
$
1,979.5
Operating Income
Fourth Quarter Ended
Year Ended
December 31,
2023
December 31,
2022
December 31,
2023
December 31,
2022
Americas
$
75.4
$
64.3
$
325.2
$
283.9
Europe
17.3
13.4
70.4
66.7
APMEA
4.2
3.3
16.1
14.0
Corporate
(18.1
)
(13.8
)
(60.8
)
(49.6
)
Total
$
78.8
$
67.2
$
350.9
$
315.0
Intersegment Sales
Fourth Quarter Ended
Year Ended
December 31,
2023
December 31,
2022
December 31,
2023
December 31,
2022
Americas
$
2.5
$
3.1
$
7.9
$
11.1
Europe
4.8
4.5
24.7
24.7
APMEA
17.8
8.2
85.2
71.4
Total
$
25.1
$
15.8
$
117.8
$
107.2
Key Performance Indicators and Non-GAAP
Measures
In this press release, we refer to non-GAAP financial measures
(including adjusted operating income, adjusted operating margins,
adjusted net income, adjusted earnings per share, organic sales,
free cash flow, cash conversion rate of free cash flow to net
income and net debt to capitalization ratio) and provide a
reconciliation of those non-GAAP financial measures to the
corresponding financial measures contained in our consolidated
financial statements prepared in accordance with GAAP. We believe
that these financial measures enhance the overall understanding of
our historical financial performance and give insight into our
future prospects. Adjusted operating income, adjusted operating
margins, adjusted net income and adjusted earnings per share
eliminate certain expenses incurred and benefits recognized in the
periods presented that relate primarily to our global restructuring
programs, acquisition-related costs, contingent consideration
adjustment, gain on sale of asset, the related income tax impacts
on these items, and other tax adjustments. Management then utilizes
these adjusted financial measures to assess the run rate of the
Company’s operations against those of comparable periods. Organic
sales growth is a non-GAAP measure of sales growth excluding the
impacts of foreign exchange, acquisitions and divestitures from
period-over-period comparisons. Management believes reporting
organic sales growth provides useful information to investors,
potential investors and others, and allows for a more complete
understanding of underlying sales trends by providing sales growth
on a consistent basis. Free cash flow, cash conversion rate of free
cash flow to net income, and the net debt to capitalization ratio,
which are adjusted to exclude certain cash inflows and outlays, and
include only certain balance sheet accounts from the comparable
GAAP measures, are an indication of our performance in cash flow
generation and also provide an indication of the Company's relative
balance sheet leverage to other industrial manufacturing companies.
These non-GAAP financial measures are among the primary indicators
management uses as a basis for evaluating our cash flow generation
and our capitalization structure. In addition, free cash flow is
used as a criterion to measure and pay certain compensation-based
incentives. For these reasons, management believes these non-GAAP
financial measures can be useful to investors, potential investors
and others. The Company’s non-GAAP financial measures may not be
comparable to similarly titled measures reported by other
companies. The presentation of this additional information is not
meant to be considered in isolation or as a substitute for
financial measures prepared in accordance with GAAP.
TABLE 1
RECONCILIATION OF GAAP "AS
REPORTED" TO "AS ADJUSTED" NON-GAAP
EXCLUDING THE EFFECT OF
ADJUSTMENTS FOR SPECIAL ITEMS
(Amounts in millions, except
per share information)
(Unaudited)
CONSOLIDATED RESULTS
Fourth Quarter Ended
Year Ended
December 31,
December 31,
December 31,
December 31,
2023
2022
2023
2022
Net sales
$
547.5
$
501.9
$
2,056.3
$
1,979.5
Operating income - as reported
$
78.8
$
67.2
$
350.9
$
315.0
Operating margin %
14.4
%
13.4
%
17.1
%
15.9
%
Adjustments for special items:
Restructuring
$
3.8
$
6.2
$
5.5
$
10.6
Acquisition-related costs
6.3
—
11.3
—
Contingent consideration adjustment
(2.5
)
—
(2.5
)
—
Gain on sale of asset
—
(1.8
)
—
(1.8
)
Total adjustments for special
items
$
7.6
$
4.4
$
14.3
$
8.8
.
Operating income - as adjusted
$
86.4
$
71.6
$
365.2
$
323.8
Adjusted operating margin %
15.8
%
14.3
%
17.8
%
16.4
%
Net income - as reported
$
55.8
$
68.6
$
262.1
$
251.5
Adjustments for special items - tax
effected:
Restructuring
$
2.8
$
4.6
$
4.1
$
7.9
Acquisition-related costs
4.7
—
8.3
—
Contingent consideration adjustment
(2.5
)
—
(2.5
)
—
Gain on sale of asset
—
(1.4
)
—
(1.4
)
Discrete tax items
5.3
(18.2
)
5.3
(18.2
)
Total adjustments for special items -
tax effected
$
10.3
$
(15.0
)
$
15.2
$
(11.7
)
Net income - as adjusted
$
66.1
$
53.6
$
277.3
$
239.8
Diluted earnings per share - as
reported
$
1.67
$
2.05
$
7.82
$
7.48
Restructuring
0.08
0.13
0.12
0.23
Acquisition-related costs
0.14
—
0.25
—
Contingent consideration adjustment
(0.08
)
—
(0.08
)
—
Gain on sale of asset
—
(0.04
)
—
(0.04
)
Discrete tax items
0.16
(0.54
)
0.16
(0.54
)
Diluted earnings per share - as
adjusted
$
1.97
$
1.60
$
8.27
$
7.13
TABLE 2
SEGMENT INFORMATION -
RECONCILIATION OF GAAP "AS REPORTED" TO "AS ADJUSTED"
NON-GAAP
EXCLUDING THE EFFECT OF
ADJUSTMENTS FOR SPECIAL ITEMS
(Amounts in millions)
(Unaudited)
Fourth Quarter Ended
Fourth Quarter Ended
December 31, 2023
December 31, 2022
Americas
Europe
APMEA
Corporate
Total
Americas
Europe
APMEA
Corporate
Total
Net sales
$
387.0
128.0
32.5
—
547.5
$
350.4
128.3
23.2
—
501.9
Operating income (loss) - as
reported
$
75.4
17.3
4.2
(18.1
)
78.8
$
64.3
13.4
3.3
(13.8
)
67.2
Operating margin %
19.5
%
13.5
%
12.8
%
14.4
%
18.3
%
10.5
%
14.4
%
13.4
%
Adjustments for special items
$
2.8
1.9
(0.1
)
3.0
7.6
$
1.3
3.1
—
—
4.4
Operating income (loss) - as
adjusted
$
78.2
19.2
4.1
(15.1
)
86.4
$
65.6
16.5
3.3
(13.8
)
71.6
Adjusted operating margin %
20.2
%
15.0
%
12.6
%
15.8
%
18.7
%
12.8
%
14.4
%
14.3
%
Year Ended
Year Ended
December 31, 2023
December 31, 2022
Americas
Europe
APMEA
Corporate
Total
Americas
Europe
APMEA
Corporate
Total
Net sales
$
1,428.1
512.1
116.1
—
2,056.3
$
1,390.0
499.1
90.4
—
1,979.5
Operating income (loss) - as
reported
$
325.2
70.4
16.1
(60.8
)
350.9
$
283.9
66.7
14.0
(49.6
)
315.0
Operating margin %
22.8
%
13.7
%
13.8
%
17.1
%
20.4
%
13.4
%
15.5
%
15.9
%
Adjustments for special items
$
3.3
2.0
3.2
5.8
14.3
$
2.2
6.7
(0.1
)
—
8.8
Operating income (loss) - as
adjusted
$
328.5
72.4
19.3
(55.0
)
365.2
$
286.1
73.4
13.9
(49.6
)
323.8
Adjusted operating margin %
23.0
%
14.1
%
16.6
%
17.8
%
20.6
%
14.7
%
15.4
%
16.4
%
TABLE 3
SEGMENT INFORMATION -
RECONCILIATION OF REPORTED NET SALES TO NON-GAAP ORGANIC
SALES
(Amounts in millions)
(Unaudited)
Fourth Quarter Ended
Americas
Europe
APMEA
Total
Reported net sales December 31, 2023
$
387.0
$
128.0
$
32.5
$
547.5
Reported net sales December 31, 2022
350.4
128.3
23.2
501.9
Dollar change
$
36.6
$
(0.3)
$
9.3
$
45.6
Net sales % increase (decrease)
10.4
%
(0.2)
%
40.1
%
9.1
%
(Decrease) increase due to foreign
exchange
—
%
(5.1)
%
0.7
%
(1.3)
%
Increase due to acquisition
(9.5)
%
—
%
(37.3)
%
(8.4)
%
Organic sales increase
0.9
%
(5.3)
%
3.5
%
(0.6)
%
Year Ended
Americas
Europe
APMEA
Total
Reported net sales December 31, 2023
$
1,428.1
$
512.1
$
116.1
$
2,056.3
Reported net sales December 31, 2022
1,390.0
499.1
90.4
1,979.5
Dollar change
$
38.1
$
13.0
$
25.7
$
76.8
Net sales % increase
2.7
%
2.6
%
28.4
%
3.9
%
Increase (decrease) due to foreign
exchange
0.2
%
(1.8)
%
4.5
%
(0.1)
%
Increase due to acquisition
(2.4)
%
—
%
(27.9)
%
(3.0)
%
Organic sales increase
0.5
%
0.8
%
5.0
%
0.8
%
Fourth Quarter Ended
Americas
Europe
APMEA
Total
Reported net sales December 31, 2022
$
350.4
$
128.3
$
23.2
$
501.9
Reported net sales December 31, 2021
318.3
133.6
22.0
473.9
Dollar change
$
32.1
$
(5.3)
$
1.2
$
28.0
Net sales % increase (decrease)
10.1
%
(4.0)
%
5.5
%
5.9
%
Decrease due to foreign exchange
0.6
%
13.2
%
11.8
%
4.6
%
Organic sales increase
10.7
%
9.2
%
17.3
%
10.5
%
Year Ended
Americas
Europe
APMEA
Total
Reported net sales December 31, 2022
$
1,390.0
$
499.1
$
90.4
$
1,979.5
Reported net sales December 31, 2021
1,207.2
517.4
84.6
1,809.2
Dollar change
$
182.8
$
(18.3)
$
5.8
$
170.3
Net sales % increase (decrease)
15.1
%
(3.5)
%
6.9
%
9.4
%
Decrease due to foreign exchange
0.3
%
12.0
%
6.6
%
3.9
%
Increase due to acquisition
(0.5)
%
—
%
—
%
(0.3)
%
Organic sales increase
14.9
%
8.5
%
13.5
%
13.0
%
TABLE 4
RECONCILIATION OF NET CASH
PROVIDED BY OPERATIONS TO FREE CASH FLOW
(Amounts in millions)
(Unaudited)
Year Ended
December 31,
December 31,
2023
2022
Net cash provided by operations - as
reported
$
310.8
$
224.0
Less: additions to property, plant, and
equipment
(29.7)
(28.1)
Plus: proceeds from the sale of property,
plant, and equipment
—
5.2
Free cash flow
$
281.1
$
201.1
Net income - as reported
$
262.1
$
251.5
Cash conversion rate of free cash flow to
net income
107.2
%
80.0
%
TABLE 5
RECONCILIATION OF LONG-TERM
DEBT (INCLUDING CURRENT PORTION) TO NET DEBT AND NET DEBT TO
CAPITALIZATION RATIO
(Amounts in millions)
(Unaudited)
December 31,
December 31,
2023
2022
Current portion of long-term debt
$
—
$
—
Plus: Long-term debt, net of current
portion
298.3
147.6
Less: Cash and cash equivalents
(350.1)
(310.8)
Net debt
$
(51.8)
$
(163.2)
Net debt
$
(51.8)
$
(163.2)
Plus: Total stockholders' equity
1,513.3
1,300.6
Capitalization
$
1,461.5
$
1,137.4
Net debt to capitalization ratio
(3.5)
%
(14.3)
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240212120361/en/
Diane McClintock SVP FP&A & Investor Relations email:
investorrelations@wattswater.com
Watts Water Technologies (NYSE:WTS)
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Watts Water Technologies (NYSE:WTS)
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