Altra Industrial Motion Corp. (Nasdaq: AIMC) (“Altra” or the
“Company”), a leading global manufacturer and supplier of motion
control, power transmission and automation products, today
announced unaudited financial results for the second-quarter ended
June 30, 2020.
Q2 Financial Highlights
- Second-quarter 2020 net sales were $400.8 million compared with
$466.5 million in the second-quarter of 2019. Second-quarter 2020
organic sales were down 12.5% compared with the second-quarter of
2019. Excluding the impact of foreign currency translation, Power
Transmission Technologies (PTT) segment sales were down 14.9% and
Automation & Specialty (A&S) segment sales were down 10.3%
compared with the prior year.*
- For the second-quarter of 2020, the Company reported net income
of $21.7 million, or $0.34 per diluted share, which compares with
net income of $29.0 million, or $0.45 per diluted share, in the
second-quarter of 2019.
- Non-GAAP Net Income in the second-quarter of 2020 was $38.6
million, or $0.60 per diluted share. This is compared with Non-GAAP
Net Income of $45.6 million, or $0.71 per diluted share, in the
second-quarter of 2019.*
- Non-GAAP Adjusted EBITDA in the second-quarter of 2020 was
$88.9 million, or 22.2% of net sales, compared with $95.5 million,
or 20.5% of net sales, in the second-quarter of 2019.*
- Operating income margin in the second-quarter of 2020 was
13.0%, compared with operating income margin of 12.2% in the
second-quarter of 2019. Non-GAAP Operating Income Margin in the
second-quarter of 2020 was 17.8%, compared with 16.9% in the second
quarter of 2019.*
- Cash flow from operations for the second-quarter of 2020 was
$38.8 million, compared with cash flow from operations of $56.8
million in the second-quarter of 2019. Non-GAAP Free Cash Flow was
$29.7 million compared with Non-GAAP Free Cash Flow of $46.7
million in the second-quarter of 2019. Non-GAAP Adjusted Free
Cash Flow, which excludes the impact of the interest rate swap
termination payment was $64.4 million in the second-quarter of
2020.*
- Paid down $24.0 million on the Company’s outstanding term loan
in Q2 and ended the quarter with leverage of 3.8x total net debt to
LTM non-GAAP adjusted EBITDA on an unaudited basis. At the
end of the second-quarter, Altra’s cash balance and availability
under the revolving credit facility totaled approximately $514.9
million.*
COVID-19 Impact and Response
Prioritizing Employee Safety
Altra continues to manage through the COVID-19 pandemic with the
guiding principle of safeguarding its employees, customers and
shareholders. The Company is maintaining the protocols developed by
its Pandemic Response Team and following guidance from national,
state and local governmental and health authorities.
Ensuring Business Continuity
The Company’s Business Continuity Task Force was highly
successful in ensuring continuity of supply for its customers and
reopening manufacturing facilities impacted by the pandemic. During
the second-quarter, Altra experienced minimal supply chain
disruption and all material manufacturing facilities continued to
be operational.
Effective Cost Management
Altra continued to take aggressive actions to reduce costs to
protect the Company’s balance sheet and strengthen its financial
flexibility. These included furloughs, merit increase suspensions,
executive wage rollbacks, discretionary spending reductions,
corporate travel suspension, and service provider and other expense
reductions. In addition, the Company benefited from lower U.S.
healthcare expenses during the second-quarter on a year-over-year
basis as a result of a significant decline in preventative and
other non-emergency medical care for employees. U.S. healthcare
expenses are anticipated to return to historical levels as
employees resume normal levels of medical care, and the Company
does not expect to see the same level of benefit in the second half
of the year.
Management Comments
“Altra’s second-quarter execution was outstanding as we exceeded
our expectations for both revenue and profitability and
demonstrated our ability to perform well in a downturn,” said Carl
Christenson, Altra’s Chairman and Chief Executive Officer. “The
broad diversity of our end markets as a result of the merger has
clearly helped mitigate the financial impact of the current
economic crisis. Sales were higher than expected due to the
outperformance of select markets – including the Class 8 truck and
wind turbine markets in China – and better-than-anticipated overall
demand during a tough macro-economic environment. Our aggressive
actions to reduce costs led to the excellent bottom-line
performance as well as strong cash flow generation and debt
reduction.
“I am beyond proud of the Altra team around the globe as they
continue to strive to keep fellow employees healthy by vigilantly
maintaining safety protocols, while at the same time sustaining
business continuity and positioning Altra for success in the
post-pandemic world,” said Christenson. “We expect that certain of
our markets will benefit as we move beyond COVID-19, such as
factory automation, robotics, medical equipment and food
processing.
“While visibility in the second half of the year remains limited
due to the uncertainty around COVID-19, we believe we are well
positioned to deliver on our new guidance assuming that we maintain
current order rates. Against a challenging backdrop, we have
demonstrated the incredible resilience of our business model and
our team’s ability to take actions very quickly to maintain good
cash flow and continue to reduce debt during a downturn. We are
controlling what we can control in the short-term while protecting
the necessary resources to drive growth and thrive as a premier
industrial company for the long term when the global economy
recovers,” concluded Christenson.
Business Outlook
While it is difficult to predict the severity and duration of
the pandemic, Altra is updating its guidance to reflect
management’s best estimate and practical assessment of the
financial impact of COVID-19 to the Company’s business at this
time. The guidance assumes that order levels remain steady.
Management is closely monitoring the situation and is prepared to
implement further cost-reduction measures should topline demand
decelerate.
Altra is updating guidance for full year 2020 as follows:
- Full-year 2020 sales in the range of $1,580 million to $1,640
million.
- GAAP diluted EPS in the range of a loss of $1.16 to a loss of
$0.94.
- Non-GAAP diluted EPS in the range of $2.05 to $2.30.*
- Non-GAAP adjusted EBITDA in the range of $305.0 million to
$330.0 million.*
- Tax rate for the full year of approximately 21% to 23% before
discrete items, capital expenditures in the range of $40 to $45
million, and depreciation and amortization in the range of $124 to
$127 million.
- Non-GAAP Adjusted Free cash flow in the range of $160 million
to $200 million.*
Reconciliations of Non-GAAP Disclosures
(Amounts in Millions of Dollars, except per share
information)
*Reconciliation of Non-GAAP Net Income:
|
Quarter Ended June 30, |
|
|
Year to Date Ended June 30, |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Net (loss)/income |
$ |
21.7 |
|
|
$ |
29.0 |
|
|
$ |
(95.0 |
) |
|
$ |
64.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring costs |
$ |
1.5 |
|
|
$ |
3.2 |
|
|
$ |
3.1 |
|
|
$ |
5.5 |
|
Acquisition related stock
compensation expense |
|
0.5 |
|
|
|
0.8 |
|
|
|
1.0 |
|
|
|
1.9 |
|
Acquisition related
amortization expense |
|
17.3 |
|
|
|
17.6 |
|
|
|
34.8 |
|
|
|
35.4 |
|
Acquisition related
expenses |
|
— |
|
|
|
0.2 |
|
|
|
— |
|
|
|
0.7 |
|
Non-cash amortization of
interest rate swap expense |
|
2.2 |
|
|
|
— |
|
|
|
2.2 |
|
|
|
— |
|
Impairment of intangible
assets - trademarks |
|
— |
|
|
|
— |
|
|
|
8.4 |
|
|
|
— |
|
Cross currency interest rate
swap settlement fee |
|
— |
|
|
|
— |
|
|
|
0.9 |
|
|
|
— |
|
Tax impact of above
adjustments |
|
(4.6 |
) |
|
|
(5.2 |
) |
|
|
(10.9 |
) |
|
|
(10.4 |
) |
2019 tax benefit due to income
tax rate change |
|
— |
|
|
|
— |
|
|
|
(2.8 |
) |
|
|
— |
|
Impairment of intangible
assets - goodwill |
|
— |
|
|
|
— |
|
|
|
139.1 |
|
|
|
— |
|
Non-GAAP net income* |
$ |
38.6 |
|
|
$ |
45.6 |
|
|
$ |
80.8 |
|
|
$ |
97.3 |
|
Non-GAAP diluted earnings per
share* |
$ |
0.60 |
|
|
$ |
0.71 |
|
|
$ |
1.25 |
|
|
$ |
1.51 |
|
*Reconciliation of Non-GAAP Free Cash Flow and Non-GAAP Adjusted
Free Cash Flow
|
Quarter Ended June 30, |
|
|
Year to Date Ended June 30, |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
(Unaudited) |
|
|
(Unaudited) |
|
|
(Unaudited) |
|
|
(Unaudited) |
|
Net cash flows from operating activities |
$ |
38.8 |
|
|
$ |
56.8 |
|
|
$ |
73.7 |
|
|
$ |
96.1 |
|
Purchase of property, plant and
equipment |
$ |
(9.1 |
) |
|
$ |
(10.1 |
) |
|
|
(17.3 |
) |
|
$ |
(24.1 |
) |
Non-GAAP Free cash flow* |
$ |
29.7 |
|
|
$ |
46.7 |
|
|
$ |
56.4 |
|
|
$ |
72.0 |
|
Payment for interest rate swap
settlement |
|
34.7 |
|
|
|
— |
|
|
|
34.7 |
|
|
|
— |
|
Non-GAAP Adjusted free cash
flow* |
$ |
64.4 |
|
|
$ |
46.7 |
|
|
$ |
91.1 |
|
|
$ |
72.0 |
|
*Reconciliation of Net Debt
|
June 30,
2020 |
|
|
December 31,
2019 |
|
Debt |
$ |
1,572.9 |
|
|
$ |
1,604.0 |
|
Cash |
|
(220.1 |
) |
|
|
(167.3 |
) |
Net debt* |
$ |
1,352.8 |
|
|
$ |
1,436.7 |
|
*Reconciliation of Non-GAAP Income From Operations:
|
Quarter Ended June 30, |
|
|
Year to Date Ended June 30, |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
(Loss)/Income from operations |
$ |
52.1 |
|
|
$ |
57.1 |
|
|
$ |
(45.9 |
) |
|
$ |
123.5 |
|
Income from operations as a
percent of net sales |
|
13.0 |
% |
|
|
12.2 |
% |
|
|
-5.5 |
% |
|
|
13.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring costs |
$ |
1.5 |
|
|
$ |
3.2 |
|
|
$ |
3.1 |
|
|
$ |
5.5 |
|
Acquisition related stock
compensation expense |
|
0.5 |
|
|
|
0.8 |
|
|
|
1.0 |
|
|
|
1.9 |
|
Acquisition related amortization
expense |
|
17.3 |
|
|
|
17.6 |
|
|
|
34.8 |
|
|
|
35.4 |
|
Impairment of goodwill and
intangible asset |
|
— |
|
|
|
— |
|
|
|
147.5 |
|
|
|
— |
|
Acquisition related expenses |
|
— |
|
|
|
0.2 |
|
|
|
— |
|
|
|
0.7 |
|
Non-GAAP income from operations* |
$ |
71.4 |
|
|
$ |
78.9 |
|
|
$ |
140.5 |
|
|
$ |
167.0 |
|
Non-GAAP Income from operations as a percent of net sales |
|
17.8 |
% |
|
|
16.9 |
% |
|
|
16.8 |
% |
|
|
17.6 |
% |
*Reconciliation of GAAP to Non-GAAP Operating Income and
Operating Income Margin
Selected Statement of Income Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended June 30, 2020 |
|
|
Quarter Ended June 30, 2019 |
|
|
GAAP Operating Income |
|
|
Adjustments |
|
|
Non-GAAP Operating Income* |
|
|
GAAP Operating Income |
|
|
Adjustments |
|
|
Non-GAAP Operating Income* |
|
Net sales |
$ |
400.8 |
|
|
$ |
— |
|
|
$ |
400.8 |
|
|
$ |
466.5 |
|
|
$ |
— |
|
|
$ |
466.5 |
|
Cost of sales |
|
257.4 |
|
|
|
— |
|
|
|
257.4 |
|
|
|
299.5 |
|
|
|
— |
|
|
|
299.5 |
|
Gross profit |
|
143.4 |
|
|
|
— |
|
|
|
143.4 |
|
|
|
167.0 |
|
|
|
— |
|
|
|
167.0 |
|
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general & administrative expenses |
|
75.8 |
|
|
|
17.8 |
|
|
|
58.0 |
|
|
|
92.0 |
|
|
|
18.6 |
|
|
|
73.4 |
|
Research and development expenses |
|
14.0 |
|
|
|
— |
|
|
|
14.0 |
|
|
|
14.7 |
|
|
|
— |
|
|
|
14.7 |
|
Restructuring costs |
|
1.5 |
|
|
|
1.5 |
|
|
|
- |
|
|
|
3.2 |
|
|
|
3.2 |
|
|
|
— |
|
(Loss)/Income from Operations |
$ |
52.1 |
|
|
$ |
19.3 |
|
|
$ |
71.4 |
|
|
$ |
57.1 |
|
|
$ |
21.8 |
|
|
$ |
78.9 |
|
GAAP and Non-GAAP Income from operations as a percent of net
sales |
|
13.0 |
% |
|
|
|
|
|
|
17.8 |
% |
|
|
12.2 |
% |
|
|
|
|
|
|
16.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year to Date Ended June 30, 2020 |
|
|
Year to Date Ended June 30, 2019 |
|
|
GAAP Operating Income |
|
|
Adjustments |
|
|
Non-GAAP Operating Income* |
|
|
GAAP Operating Income |
|
|
Adjustments |
|
|
Non-GAAP Operating Income* |
|
Net sales |
$ |
835.0 |
|
|
$ |
— |
|
|
$ |
835.0 |
|
|
$ |
949.3 |
|
|
$ |
— |
|
|
$ |
949.3 |
|
Cost of sales |
|
538.6 |
|
|
|
— |
|
|
|
538.6 |
|
|
|
607.4 |
|
|
|
— |
|
|
|
607.4 |
|
Gross profit |
|
296.4 |
|
|
|
— |
|
|
|
296.4 |
|
|
|
341.9 |
|
|
|
— |
|
|
|
341.9 |
|
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general & administrative expenses |
|
162.9 |
|
|
|
35.8 |
|
|
|
127.1 |
|
|
|
182.9 |
|
|
|
38.0 |
|
|
|
144.9 |
|
Impairment of goodwill and intangible asset |
|
147.5 |
|
|
|
147.5 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Research and development expenses |
|
28.8 |
|
|
|
— |
|
|
|
28.8 |
|
|
|
30.0 |
|
|
|
— |
|
|
|
30.0 |
|
Restructuring costs |
|
3.1 |
|
|
|
3.1 |
|
|
|
— |
|
|
|
5.5 |
|
|
|
5.5 |
|
|
|
— |
|
Income from
Operations |
$ |
(45.9 |
) |
|
$ |
186.4 |
|
|
$ |
140.5 |
|
|
$ |
123.5 |
|
|
$ |
43.5 |
|
|
$ |
167.0 |
|
GAAP and Non-GAAP Income from operations as a percent of net
sales |
|
-5.5 |
% |
|
|
|
|
|
|
16.8 |
% |
|
|
13.0 |
% |
|
|
|
|
|
|
17.6 |
% |
*Reconciliation of Non-GAAP Adjusted EBITDA and Non-GAAP
Adjusted EBITDA Margin:
|
Quarter
Ended June 30, |
|
|
2020 |
|
|
2019 |
|
Net (loss)/income |
$ |
21.7 |
|
|
$ |
29.0 |
|
|
|
|
|
|
|
|
|
Asset impairment and other,
net |
|
2.0 |
|
|
|
(0.3 |
) |
Tax expense |
|
9.1 |
|
|
|
9.1 |
|
Interest expense |
|
18.8 |
|
|
|
18.6 |
|
Depreciation expense |
|
14.7 |
|
|
|
14.6 |
|
Acquisition related amortization
expense |
|
17.3 |
|
|
|
17.6 |
|
Acquisition related expenses |
|
— |
|
|
|
0.2 |
|
Stock compensation expense |
|
3.8 |
|
|
|
3.5 |
|
Restructuring costs |
|
1.5 |
|
|
|
3.2 |
|
Non-GAAP adjusted EBITDA |
$ |
88.9 |
|
|
$ |
95.5 |
|
Non-GAAP adjusted EBITDA as a
percent of net sales |
|
22.2 |
% |
|
|
20.5 |
% |
*Reconciliation of 2020 Non-GAAP Net Income Guidance and
Non-GAAP Diluted EPS Guidance:
|
Projected Fiscal Year 2020 Net Income |
|
|
Projected Fiscal Year 2020 Diluted EPS |
Net (loss) and diluted
earnings per share |
($75.1 - $60.5) |
|
|
($1.16 - $0.94) |
Restructuring costs |
3.7 - 5.7 |
|
|
|
Cross currency interest rate swap settlement fee |
0.9 |
|
|
|
Acquisition related stock
compensation expense |
1.8 |
|
|
|
Acquisition related
amortization expense |
68.7 - 70.0 |
|
|
|
Impairment of intangibles
assets - trademarks |
8.4 |
|
|
|
Non-cash amortization of interest rate swap expense |
9.0 |
|
|
|
Tax impact of above
adjustments (1) (2) |
(20.8 - 22.5) |
|
|
|
Impairment of intangible
assets - goodwill |
139.1 |
|
|
|
2019 tax benefit due to income
tax rate change |
(2.8) |
|
|
|
Non-GAAP Net Income and Non-GAAP Diluted EPS
Guidance* |
$132.9 - 149.1 |
|
|
$2.05 - $2.30 |
(1) Adjustments are pre-tax, with net tax impact listed
separately |
|
|
|
|
(2) Tax impact is
calculated by multiplying the estimated effective tax rate for the
period of 23.0% |
*Reconciliation of 2020 Non-GAAP Adjusted EBITDA Guidance:
|
Fiscal Year 2020 |
Net (loss) |
($75.1 - $60.5) |
Interest expense |
75.1 -75.4 |
Tax expense |
15.6 - 20.0 |
Depreciation expense |
55.3 - 57.0 |
Acquisition related
amortization expense |
68.7 - 70.0 |
Stock based compensation |
14.2 - 14.9 |
Impairment of goodwill and
intangible asset |
147.5 |
Restructuring costs |
3.7 - 5.7 |
Non-GAAP adjusted EBITDA* |
$305.0 - $330.0 |
Conference Call
The Company will conduct an investor conference call to discuss
its unaudited second quarter 2020 financial results on Friday, July
24, 2020 at 10:00 a.m. ET. The public is invited to listen to the
conference call by dialing (866) 209-9085 domestically or (647)
689-5687 for international access and asking to participate in the
ALTRA conference call. A live webcast of the call will be available
in the "Investor Relations" section of www.altramotion.com.
Individuals may download charts that will be used during the call
at www.altramotion.com under Events and Presentations in the
Investor Relations section. The charts will be available after
earnings are released. A replay of the recorded conference call
will be available at the conclusion of the call on July 24th
through midnight on August 7, 2020. To listen to the replay, dial
(800) 585-8367 domestically or (416) 621-4642 for international
access (Conference ID: 6459679). A webcast replay also will be
available.
About Altra Industrial Motion Corp.
Altra Industrial Motion Corp. is a premier industrial, global
manufacturer and supplier of electromechanical power transmission,
motion control and automation products, including highly engineered
power transmission, motion control and engine braking systems and
components. Altra's portfolio consists of 27 well-respected brands
including Bauer Gear Motor, Boston Gear, Jacobs Vehicle Systems,
Kollmorgen, Portescap, Stromag, Svendborg Brakes, TB Wood's,
Thomson and Warner Electric. Headquartered in Braintree,
Massachusetts, Altra has approximately 9,200 employees and over 50
production facilities in 16 countries around the world.
Altra Industrial Motion Corp. |
|
Consolidated Balance Sheets |
|
|
|
|
|
|
|
In millions of dollars |
June 30,
2020 |
|
|
December 31,
2019 |
|
Assets: |
(Unaudited) |
|
|
|
|
|
Current Assets |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
220.1 |
|
|
$ |
167.3 |
|
Trade receivables, net |
|
230.6 |
|
|
|
243.2 |
|
Inventories |
|
223.1 |
|
|
|
222.5 |
|
Income tax receivable |
|
6.4 |
|
|
|
5.2 |
|
Prepaid expenses and other current assets |
|
35.8 |
|
|
|
29.1 |
|
Total current assets |
|
716.0 |
|
|
|
667.3 |
|
Property, plant and equipment, net |
|
339.7 |
|
|
|
354.4 |
|
Goodwill |
|
1,543.0 |
|
|
|
1,694.9 |
|
Intangible assets, net |
|
1,450.4 |
|
|
|
1,502.4 |
|
Deferred income taxes |
|
1.0 |
|
|
|
3.0 |
|
Other non-current assets, net |
|
9.2 |
|
|
|
25.1 |
|
Operating lease, right of use asset |
|
41.4 |
|
|
|
36.6 |
|
Total assets |
$ |
4,100.7 |
|
|
$ |
4,283.7 |
|
|
|
|
|
|
|
|
|
Liabilities and stockholders'
equity |
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
Accounts payable |
$ |
140.1 |
|
|
$ |
154.7 |
|
Accrued payroll |
|
57.3 |
|
|
|
58.3 |
|
Accruals and other current liabilities |
|
75.7 |
|
|
|
82.0 |
|
Income tax payable |
|
11.9 |
|
|
|
13.2 |
|
Current portion of long-term debt |
|
17.0 |
|
|
|
18.0 |
|
Operating lease liabilities |
|
13.0 |
|
|
|
13.5 |
|
Total current liabilities |
|
315.0 |
|
|
|
339.7 |
|
Long-term debt, less current portion and net of unaccreted
discount |
|
1,535.6 |
|
|
|
1,563.8 |
|
Deferred income taxes |
|
368.2 |
|
|
|
369.1 |
|
Pension liabilities |
|
30.5 |
|
|
|
30.8 |
|
Long-term taxes payable |
|
2.7 |
|
|
|
4.5 |
|
Other long-term liabilities |
|
9.8 |
|
|
|
28.8 |
|
Operating lease liabilities, net of current portion |
|
30.4 |
|
|
|
24.7 |
|
Total stockholders'
equity |
|
1,808.5 |
|
|
|
1,922.3 |
|
Total liabilities, and
stockholders' equity |
$ |
4,100.7 |
|
|
$ |
4,283.7 |
|
|
|
|
|
|
|
|
|
Reconciliation to operating
working capital: |
|
|
|
|
|
|
|
Trade receivables, net |
$ |
230.6 |
|
|
$ |
243.2 |
|
Inventories |
|
223.1 |
|
|
|
222.5 |
|
Accounts payable |
|
(140.1 |
) |
|
|
(154.7 |
) |
Non-GAAP operating working
capital* |
$ |
313.6 |
|
|
$ |
311.0 |
|
Consolidated
Statements of Income Data: |
Quarter Ended June 30, |
|
|
|
|
Year to Date Ended June 30, |
|
|
|
|
In millions of dollars |
2020 |
|
|
|
|
2019 |
|
|
|
|
2020 |
|
|
|
|
2019 |
|
|
|
|
|
(Unaudited) |
|
|
|
|
(Unaudited) |
|
|
|
|
(Unaudited) |
|
|
|
|
|
(Unaudited) |
|
|
|
|
Net sales |
$ |
400.8 |
|
|
|
|
$ |
466.5 |
|
|
|
|
$ |
835.0 |
|
|
|
|
$ |
949.3 |
|
|
|
|
Cost of sales |
|
257.4 |
|
|
|
|
|
299.5 |
|
|
|
|
|
538.6 |
|
|
|
|
|
607.4 |
|
|
|
|
Gross profit |
$ |
143.4 |
|
|
|
|
$ |
167.0 |
|
|
|
|
$ |
296.4 |
|
|
|
|
$ |
341.9 |
|
|
|
|
Gross profit as a percent of net sales |
|
35.8 |
% |
|
|
|
|
35.8 |
% |
|
|
|
|
35.5 |
% |
|
|
|
|
36.0 |
% |
|
|
|
Selling, general &
administrative expenses |
|
75.8 |
|
|
|
|
|
92.0 |
|
|
|
|
|
162.9 |
|
|
|
|
|
182.9 |
|
|
|
|
Impairment of goodwill and
intangible asset |
|
— |
|
|
|
|
|
— |
|
|
|
|
|
147.5 |
|
|
|
|
|
— |
|
|
|
|
Research and development
expenses |
|
14.0 |
|
|
|
|
|
14.7 |
|
|
|
|
|
28.8 |
|
|
|
|
|
30.0 |
|
|
|
|
Restructuring costs |
|
1.5 |
|
|
|
|
|
3.2 |
|
|
|
|
|
3.1 |
|
|
|
|
|
5.5 |
|
|
|
|
(Loss)/Income from operations |
$ |
52.1 |
|
|
|
|
$ |
57.1 |
|
|
|
|
$ |
(45.9 |
) |
|
|
|
$ |
123.5 |
|
|
|
|
Income from operations as a percent of net sales |
|
13.0 |
% |
|
|
|
|
12.2 |
% |
|
|
|
|
-5.5 |
% |
|
|
|
|
13.0 |
% |
|
|
|
Interest expense, net |
|
18.8 |
|
|
|
|
|
18.6 |
|
|
|
|
|
36.2 |
|
|
|
|
|
38.4 |
|
|
|
|
Other non-operating
(income)/expense, net |
|
2.5 |
|
|
|
|
|
0.4 |
|
|
|
|
|
1.1 |
|
|
|
|
|
1.5 |
|
|
|
|
(Loss)/Income before income
taxes |
$ |
30.8 |
|
|
|
|
$ |
38.1 |
|
|
|
|
$ |
(83.2 |
) |
|
|
|
$ |
83.6 |
|
|
|
|
Provision for income
taxes |
|
9.1 |
|
|
|
|
|
9.1 |
|
|
|
|
|
11.8 |
|
|
|
|
|
19.4 |
|
|
|
|
Income tax rate |
|
29.5 |
% |
|
|
|
|
23.9 |
% |
|
|
|
|
-14.2 |
% |
|
|
|
|
23.2 |
% |
|
|
|
Net (loss)/income |
$ |
21.7 |
|
|
|
|
$ |
29.0 |
|
|
|
|
$ |
(95.0 |
) |
|
|
|
$ |
64.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average common shares
outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
64.6 |
|
|
|
|
|
64.3 |
|
|
|
|
|
64.5 |
|
|
|
|
|
64.3 |
|
|
|
|
Diluted |
|
64.7 |
|
|
|
|
|
64.5 |
|
|
|
|
|
64.5 |
|
|
|
|
|
64.5 |
|
|
|
|
Net (loss)/income per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.34 |
|
|
|
|
$ |
0.45 |
|
|
|
|
$ |
(1.47 |
) |
|
|
|
$ |
1.00 |
|
|
|
|
Diluted |
$ |
0.34 |
|
|
|
|
$ |
0.45 |
|
|
|
|
$ |
(1.47 |
) |
|
|
|
$ |
1.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Non-GAAP Income from Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)/Income from operations |
$ |
52.1 |
|
|
|
|
$ |
57.1 |
|
|
|
|
$ |
(45.9 |
) |
|
|
|
$ |
123.5 |
|
|
|
|
Restructuring costs |
|
1.5 |
|
|
|
|
|
3.2 |
|
|
|
|
|
3.1 |
|
|
|
|
|
5.5 |
|
|
|
|
Acquisition related stock compensation expense |
|
0.5 |
|
|
|
|
|
0.8 |
|
|
|
|
|
1.0 |
|
|
|
|
|
1.9 |
|
|
|
|
Acquisition related amortization expense |
|
17.3 |
|
|
|
|
|
17.6 |
|
|
|
|
|
34.8 |
|
|
|
|
|
35.4 |
|
|
|
|
Impairment of goodwill and intangible asset |
|
— |
|
|
|
|
|
— |
|
|
|
|
|
147.5 |
|
|
|
|
|
— |
|
|
|
|
Acquisition related expenses |
|
— |
|
|
|
|
|
0.2 |
|
|
|
|
|
— |
|
|
|
|
|
0.7 |
|
|
|
|
Non-GAAP income from operations * |
$ |
71.4 |
|
|
|
|
$ |
78.9 |
|
|
|
|
$ |
140.5 |
|
|
|
|
$ |
167.0 |
|
|
|
|
Non-GAAP income from
operations as a percent of net sales |
|
17.8 |
% |
|
|
|
|
16.9 |
% |
|
|
|
|
16.8 |
% |
|
|
|
|
17.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Non-GAAP Net (Loss)/Income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)/income |
$ |
21.7 |
|
|
|
|
$ |
29.0 |
|
|
|
|
$ |
(95.0 |
) |
|
|
|
$ |
64.2 |
|
|
|
|
Restructuring costs |
|
1.5 |
|
|
|
|
|
3.2 |
|
|
|
|
|
3.1 |
|
|
|
|
|
5.5 |
|
|
|
|
Acquisition related stock
compensation expense |
|
0.5 |
|
|
|
|
|
0.8 |
|
|
|
|
|
1.0 |
|
|
|
|
|
1.9 |
|
|
|
|
Acquisition related
amortization expense |
|
17.3 |
|
|
|
|
|
17.6 |
|
|
|
|
|
34.8 |
|
|
|
|
|
35.4 |
|
|
|
|
Acquisition related
expenses |
|
— |
|
|
|
|
|
0.2 |
|
|
|
|
|
— |
|
|
|
|
|
0.7 |
|
|
|
|
Non-cash amortization of
interest rate swap expense |
|
2.2 |
|
|
|
|
|
— |
|
|
|
|
|
2.2 |
|
|
|
|
|
— |
|
|
|
|
Impairment of intangible
assets - trademarks |
|
— |
|
|
|
|
|
— |
|
|
|
|
|
8.4 |
|
|
|
|
|
— |
|
|
|
|
Cross currency interest rate
swap settlement fee |
|
— |
|
|
|
|
|
— |
|
|
|
|
|
0.9 |
|
|
|
|
|
— |
|
|
|
|
Tax impact of above
adjustments |
|
(4.6 |
) |
|
|
|
|
(5.2 |
) |
|
|
|
|
(10.9 |
) |
|
|
|
|
(10.4 |
) |
|
|
|
2019 tax benefit due to income
tax rate change |
|
— |
|
|
|
|
|
— |
|
|
|
|
|
(2.8 |
) |
|
|
|
|
— |
|
|
|
|
Impairment of intangible
assets - goodwill |
|
— |
|
|
|
|
|
— |
|
|
|
|
|
139.1 |
|
|
|
|
|
— |
|
|
|
|
Non-GAAP net income * |
$ |
38.6 |
|
|
|
|
$ |
45.6 |
|
|
|
|
$ |
80.8 |
|
|
|
|
$ |
97.3 |
|
|
|
|
Non-GAAP diluted earnings per
share * |
$ |
0.60 |
|
|
(1 |
) |
$ |
0.71 |
|
|
(2 |
) |
$ |
1.25 |
|
|
(3 |
) |
$ |
1.51 |
|
|
(4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Tax impact is calculated by multiplying the
estimated effective tax rate for the period of 21.5% by the above
items. |
|
(2) Tax impact is calculated by multiplying the
estimated effective tax rate for the period of 23.9% by the above
items. |
|
(3) Tax impact is
calculated by multiplying the estimated effective tax rate for the
period of 21.8% by the above items. |
|
(4) Tax impact is calculated by multiplying the
estimated effective tax rate for the period of 23.9% by the above
items. |
|
Cash flows from operating
activities |
Year to Date Ended June 30, |
|
In millions of dollars |
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
|
Net (loss)/income |
$ |
(95.0 |
) |
|
$ |
64.2 |
|
Adjustments to reconcile net
income to net operating cash flows: |
|
|
|
|
|
|
|
Depreciation |
|
29.3 |
|
|
|
28.9 |
|
Amortization of intangible assets |
|
34.8 |
|
|
|
35.4 |
|
Amortization of deferred financing costs |
|
2.3 |
|
|
|
2.3 |
|
Accretion of debt discount |
|
0.2 |
|
|
|
— |
|
Non-cash amortization of interest rate swap expense |
|
2.2 |
|
|
|
— |
|
Impairment of goodwill and intangible asset |
|
147.5 |
|
|
|
— |
|
Payment for interest rate swap settlement |
|
(34.7 |
) |
|
|
— |
|
(Gain)/Loss on foreign currency, net |
|
(0.1 |
) |
|
|
0.8 |
|
Loss on disposal, impairment and other |
|
— |
|
|
|
0.2 |
|
Stock-based compensation |
|
7.1 |
|
|
|
7.0 |
|
Changes in assets and liabilities: |
|
|
|
|
|
|
|
Trade receivables |
|
10.9 |
|
|
|
(10.2 |
) |
Inventories |
|
(3.6 |
) |
|
|
(6.3 |
) |
Accounts payable, accrued payroll, accruals and current
liabilities |
|
(10.8 |
) |
|
|
(20.2 |
) |
Other current assets and liabilities |
|
(14.6 |
) |
|
|
(4.5 |
) |
Other operating assets and liabilities |
|
(1.8 |
) |
|
|
(1.5 |
) |
Net cash provided by operating activities |
|
73.7 |
|
|
|
96.1 |
|
Cash flows from investing
activities |
|
|
|
|
|
|
|
Purchase of property, plant and
equipment |
|
(17.3 |
) |
|
|
(24.1 |
) |
A&S acquisition purchase
price adjustment |
|
— |
|
|
|
(13.5 |
) |
Proceeds from cross currency
interest rate swap settlement |
|
56.2 |
|
|
|
0.3 |
|
Net cash provided by (used in) investing activities |
|
38.9 |
|
|
|
(37.3 |
) |
Cash flows from financing
activities |
|
|
|
|
|
|
|
Borrowing under Revolving Credit
Facility |
|
100.0 |
|
|
|
— |
|
Payments on Revolving Credit
Facility |
|
(100.0 |
) |
|
|
— |
|
Payments on Term Loan
Facility |
|
(30.0 |
) |
|
|
(50.0 |
) |
Dividend payments |
|
(22.3 |
) |
|
|
(22.0 |
) |
Net payments on financing leases,
mortgages, and other obligations |
|
(0.2 |
) |
|
|
(0.5 |
) |
Net proceeds/(payments) from
China debt |
|
(0.6 |
) |
|
|
2.4 |
|
Shares surrendered for tax
withholding |
|
(2.0 |
) |
|
|
(2.3 |
) |
Net cash used in financing activities |
|
(55.1 |
) |
|
|
(72.4 |
) |
Effect of exchange rate changes
on cash and cash equivalents |
|
(4.7 |
) |
|
|
(1.8 |
) |
Net change in cash and cash
equivalents |
|
52.8 |
|
|
|
(15.4 |
) |
Cash and cash equivalents at beginning of period |
|
167.3 |
|
|
|
169.0 |
|
Cash and cash equivalents at end
of period |
$ |
220.1 |
|
|
$ |
153.6 |
|
|
|
|
|
|
|
|
|
Reconciliation to Free Cash
Flow: |
|
|
|
|
|
|
|
Net cash flows from operating
activities |
$ |
73.7 |
|
|
$ |
96.1 |
|
Purchase of property, plant and
equipment |
|
(17.3 |
) |
|
|
(24.1 |
) |
Free Cash Flow * |
|
56.4 |
|
|
|
72.0 |
|
Payment for interest rate swap
settlement |
|
34.7 |
|
|
|
— |
|
Adjusted Free Cash Flow * |
$ |
91.1 |
|
|
$ |
72.0 |
|
Selected Segment Data |
Quarter Ended June 30, |
|
|
Year to Date Ended June 30, |
|
In millions of dollars |
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Net sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Power Transmission
Technologies |
$ |
196.3 |
|
|
$ |
234.9 |
|
|
$ |
413.0 |
|
|
$ |
469.8 |
|
Automation & Specialty |
|
205.8 |
|
|
|
233.3 |
|
|
|
424.4 |
|
|
|
482.4 |
|
Inter-segment eliminations |
|
(1.3 |
) |
|
|
(1.7 |
) |
|
|
(2.4 |
) |
|
|
(2.9 |
) |
Total |
$ |
400.8 |
|
|
$ |
466.5 |
|
|
$ |
835.0 |
|
|
$ |
949.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)/Income from
operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Power Transmission
Technologies |
$ |
23.9 |
|
|
$ |
31.9 |
|
|
$ |
49.5 |
|
|
$ |
60.8 |
|
Automation & Specialty |
|
26.0 |
|
|
|
31.8 |
|
|
|
(92.6 |
) |
|
|
72.4 |
|
Corporate |
|
3.7 |
|
|
|
(3.4 |
) |
|
|
0.3 |
|
|
|
(4.2 |
) |
Restructuring costs |
|
(1.5 |
) |
|
|
(3.2 |
) |
|
|
(3.1 |
) |
|
|
(5.5 |
) |
Total |
$ |
52.1 |
|
|
$ |
57.1 |
|
|
$ |
(45.9 |
) |
|
$ |
123.5 |
|
*Reconciliation of Non-GAAP Income from Operations by
Segment:
Selected Segment Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In millions of dollars |
Quarter Ended June 30, 2020 |
|
|
Year to Date Ended June 30, 2020 |
|
|
Power Transmission Technologies |
|
|
Automation and Specialty |
|
|
Corporate |
|
|
Total |
|
|
Power Transmission Technologies |
|
|
Automation and Specialty |
|
|
Corporate |
|
|
Total |
|
Income/(loss) from
operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income/(loss) from operations |
$ |
23.6 |
|
|
$ |
24.8 |
|
|
$ |
3.7 |
|
|
$ |
52.1 |
|
|
$ |
48.6 |
|
|
$ |
(94.8 |
) |
|
$ |
0.3 |
|
|
$ |
(45.9 |
) |
Restructuring costs |
|
0.3 |
|
|
|
1.2 |
|
|
|
— |
|
|
|
1.5 |
|
|
|
0.9 |
|
|
|
2.2 |
|
|
|
— |
|
|
|
3.1 |
|
Acquisition related stock compensation expense |
|
— |
|
|
|
— |
|
|
|
0.5 |
|
|
|
0.5 |
|
|
|
— |
|
|
|
— |
|
|
|
1.0 |
|
|
|
1.0 |
|
Impairment of goodwill and
intangible asset |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
147.5 |
|
|
|
— |
|
|
|
147.5 |
|
Acquisition related amortization expense |
|
2.2 |
|
|
|
15.1 |
|
|
|
— |
|
|
|
17.3 |
|
|
|
4.5 |
|
|
|
30.3 |
|
|
|
— |
|
|
|
34.8 |
|
Total Non-GAAP
Income/(loss) from operations |
$ |
26.1 |
|
|
$ |
41.1 |
|
|
$ |
4.2 |
|
|
$ |
71.4 |
|
|
$ |
54.0 |
|
|
$ |
85.2 |
|
|
$ |
1.3 |
|
|
$ |
140.5 |
|
Non-GAAP Income from operations
as a percentage of Segment net sales* |
|
13.3 |
% |
|
|
20.0 |
% |
|
|
|
|
|
|
17.8 |
% |
|
|
13.1 |
% |
|
|
20.1 |
% |
|
|
|
|
|
|
16.8 |
% |
* Discussion of Non-GAAP Financial Measures
The non-GAAP financial measures used in this release are
utilized by management in comparing our operating performance on a
consistent basis. We believe that these financial measures
are appropriate to enhance the overall understanding of our
underlying operating performance trends compared to historical and
prospective periods and our peers. We believe that these measures
provide important supplemental information to management and
investors regarding financial and business trends relating to the
Company's financial condition and results of operations as well as
insight into the compliance with our debt covenants. Non-GAAP
financial measures should not be considered in isolation from, or
as a substitute for, financial information calculated in accordance
with GAAP. Investors are encouraged to review the
reconciliation of these non-GAAP measures to their most directly
comparable GAAP financial measures. A reconciliation of
non-GAAP financial measures presented above to our GAAP results has
been provided in the financial tables included in this press
release.
Organic SalesOrganic sales in this release excludes the impact
of foreign currency translation.
Non-GAAP Net Income, Non-GAAP Income From Operations, Non-GAAP
Diluted Earnings Per Share, Non-GAAP Operating Income Margin, and
Non-GAAP Diluted EPS Guidance Non-GAAP Net Income, Non-GAAP Income
From Operations, Non-GAAP Diluted Earnings Per Share, and Non-GAAP
Diluted Earnings Per Share Guidance exclude acquisition related
amortization expense, acquisition related expense, acquisition
related stock compensation expense, restructuring and consolidation
costs, non-cash amortization of interest rate swap expense and
other income or charges that management does not consider to be
directly related to the Company’s core operating performance.
Non-GAAP Diluted Earnings Per Share is calculated by dividing
Non-GAAP Net Income by GAAP weighted average shares outstanding
(diluted). Non-GAAP Operating Income Margin is calculated by
dividing Non-GAAP Income From Operations by GAAP Net Sales.
Non-GAAP Adjusted EBITDAAdjusted EBITDA represents earnings
before interest, taxes, depreciation, acquisition related
amortization, acquisition related costs, restructuring costs,
stock-based compensation, asset impairment and other income or
charges that management does not consider to be directly related to
the Company’s core operating performance.
Non-GAAP Adjusted EBITDA MarginNon-GAAP Adjusted EBITDA margin
is calculated by dividing Non-GAAP Adjusted EBITDA by GAAP Net
Sales.
Non-GAAP Free Cash FlowNon-GAAP Free Cash Flow is calculated by
deducting purchases of property, plant and equipment and adding
back the payment for interest rate swap settlement from net cash
flows from operating activities.
Non-GAAP Adjusted Free Cash Flow Non-GAAP Adjusted Free Cash
Flow is calculated by adding back the payment for the interest rate
swap settlement to Non-GAAP Free Cash Flow.
Non-GAAP Operating Working CapitalNon-GAAP Operating Working
Capital is calculated by deducting accounts payable from net trade
receivables plus inventories.
Net DebtNet Debt is calculated by subtracting cash from total
debt.
Forward-Looking Statements
All statements, other than statements of historical fact
included in this release are forward-looking statements, as that
term is defined in the Private Securities Litigation Reform Act of
1995. These statements include, but are not limited to, any
statement that may predict, forecast, indicate or imply future
results, performance, achievements or events. Forward-looking
statements can generally be identified by phrases such as
“believes,” “expects,” “potential,” “continues,” “may,” “should,”
“seeks,” “predicts,” “anticipates,” “intends,” “projects,”
“estimates,” “plans,” “could,” “designed”, “should be,” and other
similar expressions that denote expectations of future or
conditional events rather than statements of fact. Forward-looking
statements also may relate to strategies, plans and objectives for,
and potential results of, future operations, financial results,
financial condition, business prospects, growth strategy and
liquidity, and are based upon financial data, market assumptions
and management's current business plans and beliefs or current
estimates of future results or trends available only as of the time
the statements are made, which may become out of date or
incomplete. Forward looking statements are inherently uncertain,
and investors must recognize that events could differ significantly
from our expectations. These statements include, but may not be
limited to, the statements under “Business Outlook,” statements
regarding expectations with respect to the Company continuing to
benefit from lower U.S. healthcare expenses and statements
regarding the COVID-19 pandemic and (a) the Company’s navigation
through such pandemic, (b) expectations regarding the ability of
certain of the Company’s markets to benefit following recovery from
such pandemic, such as factory automation, robotics, medical
equipment and food processing, (c) limited visibility due to the
uncertainty of such pandemic and the Company’s belief that it is
well positioned to deliver on its 2020 guidance assuming it
maintains current order rates and (d) the Company’s ability to
control what it can control in the short-term while protecting the
necessary resources to drive growth and thrive as a premier
industrial company for the long term when the global economy
recovers.
In addition to the risks and uncertainties noted in this
release, there are certain factors that could cause actual results
to differ materially from those anticipated by some of the
statements made. These include: (1) competitive pressures, (2)
changes in political and economic conditions in the United States
and abroad and the cyclical nature of our markets, (3) loss of
distributors, (4) the ability to develop new products and respond
to customer needs, (5) risks associated with international
operations, including currency risks, and the effects of tariffs
and other trade actions taken by the United States and other
countries (6) accuracy of estimated forecasts of OEM customers and
the impact of the current global economic environment on our
customers, (7) risks associated with a disruption to our supply
chain, (8) fluctuations in the costs of raw materials used in our
products, (9) product liability claims, (10) work stoppages and
other labor issues, (11) changes in employment, environmental, tax
and other laws and changes in the enforcement of laws, (12) loss of
key management and other personnel, (13) risks associated with
compliance with environmental laws, (14) the ability to
successfully execute, manage and integrate key acquisitions and
mergers, (15) failure to obtain or protect intellectual property
rights, (16) risks associated with impairment of goodwill or
intangibles assets, (17) failure of operating equipment or
information technology infrastructure, including cyber-attacks or
other security breaches, and failure to comply with data privacy
laws or regulations, (18) risks associated with our debt leverage,
(19) risks associated with restrictions contained in the agreements
governing Altra’s $400 million aggregate principal amount of 6.125%
senior notes due 2026 and Altra’s revolving credit facility and
term loan facility, (20) risks associated with compliance with tax
laws, (21) risks associated with the global recession and
volatility and disruption in the global financial markets, (22)
risks associated with implementation of our enterprise resource
planning system, (23) risks associated with the Svendborg, Stromag,
and A&S acquisitions and integration and other acquisitions,
(24) risks associated with certain minimum purchase agreements we
have with suppliers, (25) risks related to our relationships with
strategic partners, (26) our ability to offset increased commodity
and labor costs with increased prices, (27) risks associated with
our exposure to variable interest rates and foreign currency
exchange rates, (28) risks associated with interest rate swap
contracts, (29) risks associated with our exposure to renewable
energy markets, (30) risks related to regulations regarding
conflict minerals, (31) risks related to restructuring and plant
consolidations, (32) risks related to our acquisition of A&S,
including (a) the possibility that we may be unable to achieve
expected synergies and operating efficiencies in connection with
the transaction within the expected time-frames or at all and to
successfully integrate A&S, (b) expected or targeted future
financial and operating performance and results, (c) operating
costs, customer loss and business disruption (including, without
limitation, difficulties in maintaining relationships with
employees, customers, clients or suppliers) being greater than
expected following the transaction, (d) our ability to retain key
executives and employees, (e) slowdowns or downturns in economic
conditions generally and in the markets in which the A&S
businesses participate specifically, (f) lower than expected
investments and capital expenditures in equipment that utilizes
components produced by us or A&S, (g) lower than expected
demand for our or A&S’s repair and replacement businesses, (h)
our ability to successfully integrate the merged assets and the
associated technology and achieve operational efficiencies, (i) the
integration of A&S being more difficult, time-consuming or
costly than expected, (j) the inability to undertake certain
corporate actions that otherwise could be advantageous to comply
with certain tax covenants, (k) potential unknown liabilities and
unforeseen expenses related to the acquisition and (l) the impact
on our internal controls and compliance with the regulatory
requirements under the Sarbanes-Oxley Act of 2002, (33) the risk
associated with the UK’s departure from the European Union, (34)
Altra’s ability to achieve the efficiencies, savings and other
benefits anticipated from its cost reduction, margin improvement,
restructuring, plant consolidation and other business optimization
initiatives, (35) the risks associated with transitioning from
LIBOR to a replacement alternative reference rate, (36) the scope
and duration of the COVID-19 global pandemic and its impact on
global economic systems and our employees, sites, operations,
customers and supply chain, and (37) other risks, uncertainties and
other factors described in the Company's quarterly reports on Form
10-Q and annual reports on Form 10-K and in the Company's other
filings with the U.S. Securities and Exchange Commission (SEC) or
in materials incorporated therein by reference. Except as required
by applicable law, Altra does not intend to, update or alter its
forward-looking statements, whether as a result of new information,
future events or otherwise.
AIMC-E
CONTACT:
Altra Industrial Motion Corp.
Christian Storch, Chief Financial Officer
781-917-0541
christian.storch@altramotion.com
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