Garrett Motion Expects 2023 Financial Results in the Upper End of its Prior Outlook and Will Hold its First Quarter Conference Call on Monday April 24, 2023
April 04 2023 - 6:58AM
Garrett Motion Inc. (Nasdaq: GTX, GTXAP), a leading differentiated
technology provider for the automotive industry, today announced
that it now expects to achieve financial results in the upper end
of the full year 2023 outlook published on February 14, 2023. Year
to date, better than expected financial performance has been
primarily driven by strong industry volumes in key regions, the
successful ramp-up of new programs, operational excellence, and
favorable foreign exchange.
Garrett’s improved performance could allow the
Company to satisfy the Consolidated EBITDA threshold, one of two
remaining conditions necessary to cause an automatic conversion of
the Series A preferred stock into shares of common stock,
potentially as early as Q2 2023.
The only remaining condition to conversion would
be the achievement of a 75-day VWAP of greater than $7.875 on the
common share price. The 75-day VWAP as of March 31, 2023 was $7.70.
Both conditions need to be met in the same period to initiate the
automatic conversion of the Series A preferred stock into common
shares.
Full Year 2023 Outlook
Garrett’s range for the full year 2023 outlook
for certain GAAP and Non-GAAP financial measures remains as follows
but will be updated during our next earnings conference call:
|
Full Year 2023 Outlook |
Net sales (GAAP) |
$3.55 billion to $3.85 billion |
Net sales growth at constant currency (Non-GAAP)* |
+1% to +6% |
Net income (GAAP) |
$255 million to $300 million |
Adjusted EBITDA (Non-GAAP)* |
$555 million to $615 million |
Net cash provided by operating activities (GAAP) |
$390 million to $490 million |
Adjusted free cash flow (Non-GAAP)* |
$300 million to $400 million |
* See reconciliations to the nearest GAAP measure on page 4.
Conference Call
Garrett plans to issue financial results for the
first quarter 2023 on Monday, April 24, 2023 before the open of
market trading.
Garrett will also hold a conference call the
same day at 8:30 am EDT / 2:30 pm CET. To participate on the
conference call, please dial +1-877-883-0383 (US) or
+1-412-902-6506 (international) and use the passcode 1423587.
The conference call will also be broadcast over
the internet and include a slide presentation. To access the
webcast and supporting material, please visit the investor
relations section of the Garrett Motion website at
http://investors.garrettmotion.com/. A replay of the conference
call will be available by dialing +1-877-344-7529 (US) or
+1-412-317-0088 (international) using the access code 3297013. The
webcast will also be archived on Garrett’s website.
Forward-Looking Statements This
release contains “forward-looking statements” within the Private
Securities Litigation Reform Act of 1995. All statements, other
than statements of fact, that address activities, events or
developments that we or our management intend, expect, project,
believe or anticipate will or may occur in the future are
forward-looking statements including without limitation our
statements regarding inflationary pressure on Garrett's business
and management's inflation mitigation strategies, financial results
and financial conditions, industry trends and anticipated demand
for our products, Garrett’s strategy, anticipated supply
constraints, including with respect to semiconductors, anticipated
developments in emissions standards, trends including with respect
to production volatility and volume, Garrett's capital structure,
anticipated new product development plans for the future including
expected R&D expenditures, anticipated impacts of partnerships
with third parties, and Garrett's outlook for 2023. Although we
believe forward-looking statements are based upon reasonable
assumptions, such statements involve known and unknown risks,
uncertainties, and other factors, which may cause the actual
results or performance of Garrett to be materially different from
any future results or performance expressed or implied by such
forward-looking statements. Such risks and uncertainties include
but are not limited to those described in our annual report on Form
10-K for the year ended December 31, 2022 (the “2022 Annual
Report”), as well as our other filings with the Securities and
Exchange Commission, under the headings “Risk Factors” and
“Cautionary Note Regarding Forward-Looking Statements.”
In particular, the achievement of the conditions necessary to
trigger an automatic conversion of the Series A Preferred Stock are
subject to multiple factors including but not limited to those
listed above, and the trading price of the Company’s common stock,
many of which factors are outside of the Company’s control.
Accordingly, an automatic conversion of the Series A Preferred
Stock may not occur on the timeline currently anticipated by the
Company or at all. You are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date
of this document. Forward-looking statements are not guarantees of
future performance, and actual results, developments and business
decisions may differ from those envisaged by our forward-looking
statements.
Non-GAAP Financial Measures
This release includes the following Non-GAAP financial measures
which are not calculated in accordance with generally accepted
accounting principles in the United States (“GAAP”): constant
currency sales growth, EBITDA, Adjusted EBITDA, and Adjusted Free
Cash Flow. The Non-GAAP financial measures provided herein are
adjusted for certain items as presented in the Appendix containing
Non-GAAP Reconciliations and may not be directly comparable to
similar measures used by other companies in our industry, as other
companies may define such measures differently. Management believes
that, when considered together with reported amounts, these
measures are useful to investors and management in understanding
our ongoing operations and analysis of ongoing operating trends.
Garrett believes that the Non-GAAP measures presented herein are
important indicators of operating performance because they exclude
the effects of certain items, therefore making them more closely
reflect our operational performance. These metrics should be
considered in addition to, and not as replacements for, the most
comparable GAAP measure. For additional information with respect to
our Non-GAAP financial measures, see the Appendix to this press
release and our 2022 Annual Report.
About Garrett Motion
Inc.Garrett Motion is a differentiated technology leader,
serving customers worldwide for more than 65 years with passenger
vehicle, commercial vehicle, aftermarket replacement and
performance enhancement solutions. Garrett’s cutting-edge
technology enables vehicles to become safer, more connected,
efficient and environmentally friendly. Our portfolio of
turbocharging, electric boosting and automotive software solutions
empowers the transportation industry to redefine and further
advance motion. For more information, please visit
www.garrettmotion.com.
For more information concerning the automatic
conversion terms of the Series A preferred stock, please see the
Certificate of Designations for the Series A preferred stock, which
is available as an exhibit to our 2022 Annual Report. “Consolidated
EBITDA” has the definition given to it in our Credit Agreement,
which is also available as an exhibit to our 2022 Annual
Report.
Contacts: |
|
|
MEDIA |
|
INVESTOR RELATIONS |
Christophe Mathy |
|
Eric Birge |
41.78.643.7194 |
|
1.734.228.9529 |
Christophe.Mathy@garrettmotion.com |
|
Eric.Birge@garrettmotion.com |
|
|
|
Full Year 2023 Outlook Reconciliation of
Reported Net Sales to Net Sales Growth at Constant
Currency
|
|
2023 Full Year |
|
|
Low End |
|
High End |
Reported net sales (% change) |
|
(1 |
)% |
|
7 |
% |
Foreign currency
translation |
|
(2 |
)% |
|
1 |
% |
Full year 2023 Targeted Net
Sales Growth at Constant Currency (Non-GAAP) |
|
1 |
% |
|
6 |
% |
Full Year 2023 Outlook Reconciliation of
Net Income to Adjusted EBITDA
|
|
2023 Full Year |
|
|
Low End |
|
High End |
|
|
(Dollars in millions) |
Net income - GAAP |
|
$ |
255 |
|
|
$ |
300 |
|
Net interest expense |
|
|
103 |
|
|
|
103 |
|
Tax expense |
|
|
80 |
|
|
|
95 |
|
Depreciation |
|
|
89 |
|
|
|
89 |
|
Full year 2023 Outlook EBITDA
(Non-GAAP) |
|
|
527 |
|
|
|
587 |
|
Non-operating income |
|
|
1 |
|
|
|
1 |
|
Stock compensation
expense |
|
|
19 |
|
|
|
19 |
|
Repositioning charges |
|
|
8 |
|
|
|
8 |
|
Full Year 2023 Outlook
Adjusted EBITDA (Non-GAAP) |
|
$ |
555 |
|
|
$ |
615 |
|
Full Year 2023 Outlook Reconciliation of
Net Cash Provided by Operating Activities to Adjusted Free Cash
Flow
|
|
2023 Full Year |
|
|
Low End |
|
High End |
|
|
(Dollars in millions) |
Net cash provided by operating activities
(GAAP) |
|
$ |
390 |
|
|
$ |
490 |
|
Expenditures for property,
plant and equipment |
|
|
(90 |
) |
|
|
(90 |
) |
Full year 2023 Outlook
Adjusted Free Cash Flow (Non-GAAP) |
|
$ |
300 |
|
|
$ |
400 |
|
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