With healthy end markets fueling momentum, our Connected
Mobility strategy and comprehensive suite of industry-leading
solutions continue to accelerate growth, profitability and free
cash flow.
Fourth Quarter 2023 Highlights:
- Sales of $789 million, down 10% vs. prior year; Core sales down
7%
- GAAP diluted net EPS of $0.68; Adjusted diluted net EPS of
$0.80 vs. prior guide of $0.75 to $0.79
- Operating cash flow was $165 million; Adjusted Free Cash Flow
was $153 million, representing 122% Adjusted Free Cash Flow
Conversion
Full Year 2023 Highlights:
- 2023 sales of $3.1 billion, down 3% vs. prior year; Core sales
down 2% (up 9% ex-EMV)
- 2023 GAAP diluted net EPS of $2.42, Adjusted diluted net EPS of
$2.89 vs. prior guide of $2.83 to $2.87
- Completed $300 million in debt paydown and $75 million in share
repurchases
Outlook for 2024:
- Initiates full year 2024 guidance for Adjusted diluted net EPS
of $3.00 to $3.15
- Initiates Q1 2024 guidance for Adjusted diluted net EPS of
$0.68 to $0.72
Vontier Corporation (NYSE: VNT), a leading global provider of
critical technologies and solutions to connect, manage and scale
the mobility ecosystem, today announced results for the fourth
quarter ended December 31, 2023.
Vontier reported $789.0 million in sales for the fourth quarter,
a decline of 10% year-over-year, reflecting a decrease in core
sales of 7%. Continued underlying momentum across the portfolio,
supported by strong secular tailwinds, healthy end market demand,
improved supply chain conditions, and ongoing pricing realization,
was more than offset by the expected sunset of EMV-related sales.
Operating profit of $146.4 million declined 6% versus the prior
year, and operating profit margin increased 70 basis points, to
18.6%. Adjusted operating profit of $173.9 million declined 8%
versus the prior year and adjusted operating profit margin
increased approximately 20 basis points, to 22.0%. Net earnings
were $106.2 million, and adjusted net earnings were $125.4 million,
resulting in GAAP diluted net earnings per share of $0.68 and
adjusted diluted net earnings per share of $0.80.
“Vontier delivered another quarter of solid underlying
performance to end the year,” said Mark Morelli, President and
Chief Executive Officer. “2023 marked a critical step in our
journey to catalyze a more connected mobility ecosystem. We made
tremendous progress on our strategic initiatives to accelerate
underlying growth, drove operational and commercial excellence
through the Vontier Business System, remained disciplined on
capital allocation, and continued to transform our portfolio.”
Morelli continued, “We enter 2024 with strong momentum and
uniquely positioned, with the depth and breadth of our portfolio,
to serve the mobility ecosystem. Our Connected Mobility strategy
empowers the global Vontier team to deliver industry-leading,
integrated solutions to drive enhanced productivity, automation and
profitability to our customers, and deliver above-market growth and
enhanced shareholder returns, in 2024 and beyond.”
Segment Results
Q4 2023 Segment Results Summary
Mobility Technologies(a)
Repair Solutions
Environmental & Fueling
Solutions
Other
Total Vontier
Sales ($M)
$271.4
$151.5
$339.0
$29.7
$789.0
Segment Operating Profit
$55.9
$37.8
$97.9
$3.1
$194.7
Segment Operating Profit %
20.6%
25.0%
28.9%
10.4%
24.7%
(a) Includes $2.6 million of intersegment
sales that are eliminated in consolidation.
Mobility Technologies reported sales increased 4% versus
the prior year. Strong demand for alternative energy solutions and
car wash technologies drove core sales growth of 4%. Segment
operating profit increased 14% versus the prior year. Segment
operating profit margin expanded 180 basis points year over year,
with strong contributions from volume leverage and positive
price/cost, partially offset by continued investment spending and a
foreign currency adjustment related to hyperinflationary
economies.
Repair Solutions reported sales grew 5% over the prior
year. Core sales growth of 5% was driven by robust demand for tool
storage and diagnostic tools. Segment operating profit increased
16% versus the prior year. Segment operating profit margin expanded
250 basis points driven by strong volume leverage, productivity,
and favorable price/cost.
Environmental & Fueling Solutions reported sales
declined 20% year-over-year. Core sales declined 19%, reflecting
the anticipated year-over-year decrease in EMV-related sales,
offset in part by continued strength in U.S. dispenser and
aftermarket offerings. Segment operating profit declined 20% year
over year, and segment operating profit margin remained comparable
with the prior year, as restructuring and productivity savings were
offset by peak EMV-related headwinds.
Other Items
- Repurchased ~$13 million, or ~0.4 million shares, during the
quarter; Full year 2023 share repurchases total ~$75 million, or
2.8 million shares.
- Repaid $60 million in debt during the quarter; Full year 2023
debt repayment totaled $300 million. Net leverage ratio ended Q4 at
2.8X.
- Announced the divestiture of the Coats business on January 8,
2024; ~$73 million in net proceeds.
2024 Outlook
- Total sales $3,050 to $3,110 million; Core sales growth +4 to
6%
- Adjusted operating profit margin +80 to 110 basis point
expansion year-over-year
- Adjusted diluted net EPS in the range of $3.00 to $3.15
- Adjusted free cash flow conversion of ~90 to 100%
Q1 2024 Outlook
- Total sales $745 to $760 million; Core sales growth +2 to
4%
- Adjusted operating profit margin expansion of 40 to 80 basis
points year-over-year
- Adjusted diluted net EPS of $0.68 to $0.72
Conference Call Details
Vontier will discuss results and outlook during its quarterly
investor conference call today starting at 8:30 a.m. ET. The call
and an accompanying slide presentation will be webcast on the
“Investors” section of Vontier’s website, www.vontier.com, under
“Events & Presentations.” A replay of the webcast will be
available at the same location shortly after the conclusion of the
presentation.
The call can be accessed via webcast or by dialing +1
888-259-6580, along with the conference ID: 69414951. A replay of
the webcast will be available at the same location shortly after
the conclusion of the presentation, or by dialing +1 877-934-3335,
conference ID: 69414951 and passcode 414951 or under the
“Investors” section of the Vontier website under “Events &
Presentations.”
ABOUT VONTIER
Vontier (NYSE: VNT) is a global industrial technology company
uniting productivity, automation and multi-energy technologies to
meet the needs of a rapidly evolving, more connected mobility
ecosystem. Leveraging leading market positions, decades of domain
expertise and unparalleled portfolio breadth, Vontier enables the
way the world moves – delivering smart, safe and sustainable
solutions to our customers and the planet. Vontier has a culture of
continuous improvement and innovation built upon the foundation of
the Vontier Business System and embraced by colleagues worldwide.
Additional information about Vontier is available on the Company’s
website at www.vontier.com.
NON-GAAP FINANCIAL MEASURES
In addition to the financial measures prepared in accordance
with generally accepted accounting principles (GAAP), this earnings
release also references “core sales growth,” “baseline core sales
growth”, “adjusted operating profit,” “adjusted operating profit
margin,” “segment operating profit,” “segment operating profit
margin,” “adjusted net earnings,” “adjusted diluted net earnings
per share,” “free cash flow,” “adjusted free cash flow”, “adjusted
free cash flow conversion”, “EBITDA”, “adjusted EBITDA” and “net
leverage ratio” which are non-GAAP financial measures. The reasons
why we believe these measures, when used in conjunction with the
GAAP financial measures, provide useful information to investors,
how management uses such non-GAAP financial measures, a
reconciliation of these measures to the most directly comparable
GAAP measures and other information relating to these measures are
included in the supplemental reconciliation schedule attached. The
non-GAAP financial measures should not be considered in isolation
or as a substitute for the GAAP financial measures, but should
instead be read in conjunction with the GAAP financial measures.
The non-GAAP financial measures used by Vontier in this release may
be different from similarly-titled non-GAAP measures used by other
companies.
FORWARD-LOOKING STATEMENTS
This release contains forward-looking statements within the
meaning of the federal securities laws. These statements include,
but are not limited to statements regarding Vontier Corporation’s
(the “Company’s”) business and acquisition opportunities and
anticipated earnings, and any other statements identified by their
use of words like “anticipate,” “expect,” “believe,” “outlook,”
“guidance,” or “will” or other words of similar meaning. There are
a number of important risks and uncertainties that could cause
actual results, developments and business decisions to differ
materially from those suggested or indicated by such
forward-looking statements and you should not place undue reliance
on any such forward-looking statements. These risks and
uncertainties include, among other things, deterioration of or
instability in the economy, the markets we serve, international
trade policies and the financial markets, contractions or lower
growth rates and cyclicality of markets we serve, competition,
changes in industry standards and governmental regulations that may
adversely impact demand for our products or our costs, our ability
to successfully identify, consummate, integrate and realize the
anticipated value of appropriate acquisitions and successfully
complete divestitures and other dispositions, our ability to
develop and successfully market new products, software, and
services and expand into new markets, the potential for improper
conduct by our employees, agents or business partners, impact of
divestitures, contingent liabilities relating to acquisitions and
divestitures, impact of changes to tax laws, our compliance with
applicable laws and regulations and changes in applicable laws and
regulations, risks relating to international economic, political,
war or hostility, legal, compliance and business factors, risks
relating to potential impairment of goodwill and other intangible
assets, currency exchange rates, tax audits and changes in our tax
rate and income tax liabilities, the impact of our debt obligations
on our operations, litigation and other contingent liabilities
including intellectual property and environmental, health and
safety matters, our ability to adequately protect our intellectual
property rights, risks relating to product, service or software
defects, product liability and recalls, risks relating to product
manufacturing, our relationships with and the performance of our
channel partners, commodity costs and surcharges, our ability to
adjust purchases and manufacturing capacity to reflect market
conditions, reliance on sole sources of supply, security breaches
or other disruptions of our information technology systems, adverse
effects of restructuring activities, impact of changes to U.S.
GAAP, labor matters, and disruptions relating to man-made and
natural disasters. Additional information regarding the factors
that may cause actual results to differ materially from these
forward-looking statements is available in our SEC filings,
including our Form 10-K for the year ended December 31, 2022. These
forward-looking statements represent Vontier’s beliefs and
assumptions only as of the date of this release and Vontier does
not assume any obligation to update or revise any forward-looking
statement, whether as a result of new information, future events
and developments or otherwise.
VONTIER CORPORATION AND
SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(in millions)
(unaudited)
December 31, 2023
December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents
$
340.9
$
204.5
Accounts receivable, net
497.5
514.8
Inventories
296.6
346.0
Prepaid expenses and other current
assets
141.4
152.8
Equity securities measured at fair
value
—
21.3
Current assets held for sale
56.1
145.6
Total current assets
1,332.5
1,385.0
Property, plant and equipment, net
102.3
92.1
Operating lease right-of-use assets
47.0
44.5
Long-term financing receivables, net
276.2
249.8
Other intangible assets, net
568.3
649.7
Goodwill
1,742.4
1,738.7
Other assets
225.3
183.5
Total assets
$
4,294.0
$
4,343.3
LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings and current portion
of long-term debt
$
106.6
$
4.6
Trade accounts payable
366.8
430.9
Current operating lease liabilities
14.0
13.8
Accrued expenses and other current
liabilities
435.8
437.6
Current liabilities held for sale
32.1
43.0
Total current liabilities
955.3
929.9
Long-term operating lease liabilities
37.1
34.0
Long-term debt
2,189.0
2,585.7
Other long-term liabilities
217.0
214.2
Total liabilities
3,398.4
3,763.8
Commitments and Contingencies
Equity:
Preferred stock
—
—
Common stock
—
—
Treasury stock
(403.4
)
(328.0
)
Additional paid-in capital
56.8
27.6
Retained earnings
1,132.1
770.8
Accumulated other comprehensive income
104.9
106.1
Total Vontier stockholders’ equity
890.4
576.5
Noncontrolling interests
5.2
3.0
Total equity
895.6
579.5
Total liabilities and equity
$
4,294.0
$
4,343.3
VONTIER CORPORATION AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
EARNINGS
(in millions, except per share
amounts)
(unaudited)
Three Months Ended
Year Ended
December 31, 2023
December 31, 2022
December 31, 2023
December 31, 2022
Sales
$
789.0
$
871.9
$
3,095.2
$
3,184.4
Operating costs and expenses:
Cost of sales, excluding amortization of
acquisition-related intangible assets
(417.9
)
(486.9
)
(1,664.0
)
(1,756.1
)
Selling, general and administrative
expenses
(161.5
)
(167.4
)
(643.1
)
(627.8
)
Research and development expenses
(43.1
)
(40.2
)
(163.5
)
(144.6
)
Amortization of acquisition-related
intangible assets
(20.1
)
(21.0
)
(81.2
)
(78.0
)
Operating profit
146.4
156.4
543.4
577.9
Non-operating income (expense), net:
Interest expense, net
(23.0
)
(23.5
)
(93.7
)
(69.6
)
Gain on sale of business
—
—
34.4
—
Gain on previously held equity interests
from combination of business
—
—
—
32.7
Unrealized loss on equity securities
measured at fair value
—
(25.9
)
—
(8.7
)
Other non-operating income (expense),
net
1.0
(6.2
)
(0.6
)
(4.9
)
Earnings before income taxes
124.4
100.8
483.5
527.4
Provision for income taxes
(18.2
)
(33.1
)
(106.6
)
(126.1
)
Net earnings
$
106.2
$
67.7
$
376.9
$
401.3
Net earnings per share:
Basic
$
0.69
$
0.43
$
2.43
$
2.50
Diluted
$
0.68
$
0.43
$
2.42
$
2.49
Weighted average shares outstanding:
Basic
154.6
157.3
155.1
160.5
Diluted
155.9
157.7
156.0
161.0
VONTIER CORPORATION AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(in millions)
(unaudited)
Year Ended
December 31, 2023
December 31, 2022
Cash flows from operating activities:
Net earnings
$
376.9
$
401.3
Non-cash items:
Depreciation expense
43.8
40.9
Amortization of acquisition-related
intangible assets
81.2
78.0
Stock-based compensation expense
31.5
24.3
Amortization of debt issuance costs
3.8
3.4
Amortization of acquisition-related
inventory fair value step-up
1.3
1.1
Loss on equity investments
1.1
3.0
Gain on sale of business
(34.4
)
—
(Gain) loss on sale of property
(2.8
)
0.8
Gain on previously held equity interests
from combination of business
—
(32.7
)
Unrealized loss on equity securities
measured at fair value
—
8.7
Impairment charges
—
3.6
Change in accounts receivable, net
(148.1
)
(217.2
)
Change in inventories
48.9
(74.3
)
Change in prepaid expenses and other
assets
37.8
(16.0
)
Change in long-term financing receivables,
net
141.2
140.3
Change in trade accounts payable
(66.8
)
21.3
Change in accrued expenses and other
liabilities
(13.1
)
(24.1
)
Change in deferred income taxes
(47.3
)
(41.2
)
Net cash provided by operating
activities
455.0
321.2
Cash flows from investing activities:
Proceeds from sale of business, net of
cash provided
107.5
—
Cash paid for acquisitions, net of cash
received
—
(277.5
)
Payments for additions to property, plant
and equipment
(60.1
)
(60.0
)
Proceeds from sale of property
4.5
0.4
Cash paid for equity investments
(3.0
)
(11.8
)
Proceeds from sale of equity
securities
20.4
19.0
Net cash provided by (used in)
investing activities
69.3
(329.9
)
Cash flows from financing activities:
Proceeds from issuance of long-term
debt
—
1,167.0
Repayment of long-term debt
(300.0
)
(1,167.0
)
Net proceeds from short-term
borrowings
1.9
0.4
Payments for debt issuance costs
—
(0.8
)
Payments of common stock cash dividend
(15.5
)
(15.9
)
Purchases of treasury stock
(74.7
)
(328.0
)
Proceeds from stock option exercises
10.4
2.5
Other financing activities
(9.9
)
(6.1
)
Net cash used in financing
activities
(387.8
)
(347.9
)
Effect of exchange rate changes on cash
and cash equivalents
(0.1
)
(11.5
)
Net change in cash and cash
equivalents
136.4
(368.1
)
Beginning balance of cash and cash
equivalents
204.5
572.6
Ending balance of cash and cash
equivalents
$
340.9
$
204.5
VONTIER CORPORATION AND
SUBSIDIARIES
SEGMENT FINANCIAL
SUMMARY
(in millions)
(unaudited)
Three Months Ended
Year Ended
December 31, 2023
December 31, 2022
December 31, 2023
December 31, 2022
Sales
Mobility Technologies
$
271.4
$
261.1
$
1,003.8
$
907.8
Repair Solutions
151.5
144.7
651.5
611.5
Environmental & Fueling Solutions
339.0
421.6
1,323.7
1,493.6
Other
29.7
44.5
118.8
171.5
Intersegment eliminations
(2.6
)
—
(2.6
)
—
Total Vontier Sales
$
789.0
$
871.9
$
3,095.2
$
3,184.4
Segment & Adjusted Operating
Profit
Mobility Technologies
$
55.9
$
49.0
$
199.9
$
187.5
Repair Solutions
37.8
32.5
170.0
169.7
Environmental & Fueling Solutions
97.9
121.7
369.5
406.5
Other
3.1
9.4
11.3
19.2
Segment Operating Profit (Non-GAAP)
194.7
212.6
750.7
782.9
Corporate & Other Unallocated
Expense
(20.8
)
(22.6
)
(86.4
)
(66.7
)
Adjusted Operating Profit (Non-GAAP)
$
173.9
$
190.0
$
664.3
$
716.2
Segment & Adjusted Operating Profit
Margin
Mobility Technologies
20.6
%
18.8
%
19.9
%
20.7
%
Repair Solutions
25.0
%
22.5
%
26.1
%
27.8
%
Environmental & Fueling Solutions
28.9
%
28.9
%
27.9
%
27.2
%
Other
10.4
%
21.1
%
9.5
%
11.2
%
Segment Operating Profit Margin
(Non-GAAP)
24.7
%
24.4
%
24.3
%
24.6
%
Adjusted Operating Profit Margin
(Non-GAAP)
22.0
%
21.8
%
21.5
%
22.5
%
Note: Results for the Mobility Technologies and Environmental
& Fueling Solutions segments for the three months and year
ended December 31, 2022 have been revised from the results
previously reported on March 20, 2023.
VONTIER CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES AND
OTHER INFORMATION
Core Sales Growth and Baseline Core Sales Growth
We define core sales growth as the change in total sales
calculated according to GAAP but excluding (i) sales from acquired
and certain divested businesses; (ii) the impact of currency
translation; and (iii) certain other items.
- References to sales attributable to acquisitions or acquired
businesses refer to GAAP sales from acquired businesses recorded
prior to the first anniversary of the acquisition less the amount
of sales attributable to certain divested or exited businesses or
product lines not considered discontinued operations.
- The portion of sales attributable to the impact of currency
translation is calculated as the difference between (a) the
period-to-period change in sales (excluding sales from acquired
businesses) and (b) the period-to-period change in sales, including
foreign operations, (excluding sales from acquired businesses)
after applying the current period foreign exchange rates to the
prior year period.
- The portion of sales attributable to other items is calculated
as the impact of those items which are not directly correlated to
sales from existing businesses which do not have an impact on the
current or comparable period.
Baseline core sales growth refers to core sales growth but
excluding the impact of the end of the U.S. upgrade cycle for
enhanced credit card security requirements for outdoor payment
systems based on the EMV global standards.
Core sales growth and Baseline core sales growth should be
considered in addition to, and not as a replacement for or superior
to, total sales, and may not be comparable to similarly titled
measures reported by other companies.
Management believes that reporting the non-GAAP financial
measure of core sales growth provides useful information to
investors by helping identify underlying growth trends in our
business and facilitating easier comparisons of our sales
performance with our performance in prior and future periods and to
our peers. We exclude the effect of acquisitions and certain
divestiture-related items because the nature, size and number of
such transactions can vary dramatically from period to period and
between us and our peers. We exclude the effect of currency
translation and certain other items from core sales because these
items are either not under management’s control or relate to items
not directly correlated to core sales growth. Management believes
the exclusion of these items from core sales growth may facilitate
assessment of underlying business trends and may assist in
comparisons of long-term performance.
Adjusted Operating Profit and Adjusted Operating Profit
Margin
Adjusted operating profit refers to operating profit calculated
in accordance with GAAP, but excluding amortization of
acquisition-related intangible assets, costs associated with
restructurings including one-time termination benefits and related
charges and impairment and other charges associated with facility
closure, contract termination and other related activities, and the
related impact of certain divested or exited businesses or product
lines not considered discontinued operations ("Restructuring- and
divestiture-related adjustments"), transaction- and deal-related
costs, one-time costs related to the separation, amortization of
acquisition-related inventory fair value step-up, gains and losses
on sale of property, other charges which represent charges incurred
that are not part of our core operating results ("Other charges")
and normalization and other adjustments which represent adjustments
for standalone public company costs. Adjusted operating profit
margin refers to adjusted operating profit divided by GAAP
sales.
Segment Operating Profit and Segment Operating Profit
Margin
Segment operating profit is used by Vontier’s management in
determining how to allocate resources and assess performance.
Segment operating profit represents total segment sales less
operating costs attributable to the segment, which does not include
unallocated corporate costs and other operating costs not allocated
to the reportable segments as part of management’s assessment of
reportable segment operating performance, including stock-based
compensation expense, amortization of acquisition-related
intangible assets and other costs shown in the reconciliation to
GAAP operating profit below. As part of management’s assessment of
the Repair Solutions segment, a capital charge based on the
segment’s financing receivables portfolio is assessed by Corporate.
Segment operating profit margin refers to segment operating profit
divided by GAAP sales.
Adjusted Net Earnings and Adjusted Diluted Net Earnings per
Share
Adjusted net earnings refers to net earnings calculated in
accordance with GAAP, but excluding on a pretax basis amortization
of acquisition-related intangible assets, Restructuring- and
divestiture-related adjustments, transaction- and deal-related
costs, one-time costs related to the separation, amortization of
acquisition-related inventory fair value step-up, gains and losses
on sale of property, Other charges, normalization and other
adjustments which represent adjustments for standalone public
company costs, non-cash write-offs of deferred financing costs,
gains and losses on sale of businesses and gains and losses on
investments, and including the tax effect of these adjustments and
other tax adjustments. The tax effect of such adjustments was
calculated by applying our estimated adjusted effective tax rate to
the pretax amount of each adjustment. Adjusted diluted net earnings
per share refers to adjusted net earnings divided by the weighted
average diluted shares outstanding.
Free Cash Flow, Adjusted Free Cash Flow and Adjusted Free
Cash Flow Conversion
Free cash flow refers to cash flow from operations calculated
according to GAAP but excluding capital expenditures. Adjusted free
cash flow refers to free cash flow adjusted for cash received from
the sale of property and cash paid for Restructuring- and
divestiture-related adjustments, transaction- and deal-related
costs, one-time costs related to the separation, and Other charges.
Adjusted free cash flow conversion refers to adjusted free cash
flow divided by adjusted net earnings.
Net Leverage Ratio, EBITDA and Adjusted EBITDA
EBITDA refers to net earnings calculated in accordance with
GAAP, excluding interest, taxes, depreciation and amortization of
acquisition-related intangible assets. Adjusted EBITDA refers to
EBITDA adjusted for Restructuring- and divestiture-related
adjustments, transaction- and deal-related costs, one-time costs
related to the separation, amortization of acquisition-related
inventory fair value step-up, gains and losses on sale of property,
non-cash write-offs of deferred financing costs, gains and losses
on sale of businesses and gains and losses on investments. Net
leverage ratio refers to net debt divided by Adjusted EBITDA.
Management believes that these non-GAAP financial measures
provide useful information to investors by reflecting additional
ways of viewing aspects of our operations that, when reconciled to
the corresponding GAAP measure, help our investors to understand
the long-term profitability trends of our business, and facilitate
comparisons of our profitability to prior and future periods and to
our peers.
These non-GAAP measures should be considered in addition to, and
not as a replacement for or superior to, the comparable GAAP
measures, and may not be comparable to similarly titled measures
reported by other companies.
A reconciliation of each of the projected Core Sales Growth,
Baseline Core Sales Growth, Adjusted Operating Profit Margin,
Baseline Adjusted Operating Profit Margin, Adjusted Diluted Net
Earnings Per Share, Adjusted Free Cash Flow and Adjusted Free Cash
Flow Conversion, which are forward-looking non-GAAP financial
measures, to the most directly comparable GAAP financial measure,
is not provided because the company is unable to provide such
reconciliation without unreasonable effort. The inability to
provide each reconciliation is due to the unpredictability of the
amounts and timing of events affecting the items we exclude from
the non-GAAP measure.
Components of Sales Growth
% Change Three Months Ended
December 31, 2023 vs. Comparable 2022 Period
Mobility Technologies
Repair Solutions
Environmental & Fueling
Solutions
Other Segment
Total
Total Sales Growth (GAAP)
3.9%
4.7%
(19.6)%
(33.3)%
(9.5)%
Core sales growth (Non-GAAP)
4.4%
4.7%
(19.1)%
2.0%
(7.3)%
Acquisitions and divestitures
(Non-GAAP)
—%
—%
(0.8)%
(35.5)%
(2.2)%
Currency exchange rates (Non-GAAP)
(0.5)%
—%
0.3%
0.2%
—%
Core sales growth (Non-GAAP)
4.4%
4.7%
(19.1)%
2.0%
(7.3)%
Impact of EMV sunset(a)
7.1%
—%
20.0%
—%
12.1%
Baseline core sales growth (Non-GAAP)
11.5%
4.7%
0.9%
2.0%
4.8%
(a) Reflects the impact of the end of the
U.S. upgrade cycle for enhanced credit card security requirements
for outdoor payments systems based on the EMV global standards.
% Change Year Ended December
31, 2023 vs. Comparable 2022 Period
Mobility Technologies
Repair Solutions
Environmental & Fueling
Solutions
Other Segment
Total
Total Sales Growth (GAAP)
10.6%
6.5%
(11.4)%
(30.7)%
(2.8)%
Core sales growth (Non-GAAP)
6.1%
6.7%
(10.6)%
(2.1)%
(2.1)%
Acquisitions and divestitures
(Non-GAAP)
5.6%
—%
(0.2)%
(28.4)%
(0.1)%
Currency exchange rates (Non-GAAP)
(1.1)%
(0.2)%
(0.6)%
(0.2)%
(0.6)%
Reconciliation of Operating Profit to Adjusted Operating
Profit and Segment Operating Profit
Three Months Ended
Year Ended
$ in millions
December 31, 2023
December 31, 2022
December 31, 2023
December 31, 2022
Operating Profit (GAAP)
$
146.4
$
156.4
$
543.4
$
577.9
Amortization of acquisition-related
intangible assets
20.1
21.0
81.2
78.0
Restructuring- and divestiture-related
adjustments
3.7
5.5
26.0
17.8
Transaction- and deal-related costs
3.2
3.9
12.0
33.3
One-time costs related to separation
0.5
1.3
3.2
5.3
Amortization of acquisition-related
inventory fair value step-up
—
1.1
1.3
1.1
Loss (gain) on sale of property
—
0.8
(2.8
)
0.8
Other charges
—
—
—
2.2
Normalization and other adjustments(a)
—
—
—
(0.2
)
Adjusted Operating Profit
(Non-GAAP)
173.9
190.0
664.3
716.2
Corporate & Other Unallocated
Costs
20.8
22.6
86.4
66.7
Segment Operating Profit
(Non-GAAP)
$
194.7
$
212.6
$
750.7
$
782.9
Operating Profit Margin (GAAP)
18.6
%
17.9
%
17.6
%
18.1
%
Adjusted Operating Profit Margin
(Non-GAAP)
22.0
%
21.8
%
21.5
%
22.5
%
Segment Operating Profit Margin
(Non-GAAP)
24.7
%
24.4
%
24.3
%
24.6
%
(a) Adjustment for standalone public
company costs
Reconciliation of Net Earnings to Adjusted Net
Earnings
Three Months Ended
Year Ended
($ in millions)
December 31, 2023
December 31, 2022
December 31, 2023
December 31, 2022
Net Earnings (GAAP)
$
106.2
$
67.7
$
376.9
$
401.3
Amortization of acquisition-related
intangible assets
20.1
21.0
81.2
78.0
Restructuring- and divestiture-related
adjustments
3.7
5.5
26.0
17.8
Transaction- and deal-related costs
3.2
3.9
12.0
33.3
One-time costs related to separation
0.5
1.3
3.2
5.3
Amortization of acquisition-related
inventory fair value step-up
—
1.1
1.3
1.1
Loss (gain) on sale of property
—
0.8
(2.8
)
0.8
Other charges
—
—
—
2.2
Normalization and other adjustments
(a)
—
—
—
(0.2
)
Non-cash write-off of deferred financing
costs
—
—
0.2
—
Gain on sale of business
—
—
(34.4
)
—
Loss on equity investments
0.1
5.8
1.1
3.0
Gain on previously held equity interests
from combination of business
—
—
—
(32.7
)
Unrealized loss on equity securities
measured at fair value
—
25.9
—
8.7
Tax effect of the Non-GAAP adjustments and
other tax adjustments (b)
(8.4
)
(5.2
)
(14.4
)
(22.3
)
Adjusted Net Earnings
(Non-GAAP)
$
125.4
$
127.8
$
450.3
$
496.3
Diluted weighted average shares
outstanding
155.9
157.7
156.0
161.0
Diluted Net Earnings Per Share
(GAAP)
$
0.68
$
0.43
$
2.42
$
2.49
Adjusted Diluted Net Earnings Per Share
(Non-GAAP)
$
0.80
$
0.81
$
2.89
$
3.08
(a) Adjustment for standalone public
company costs
(b) The gain on previously held equity
interests from combination of business is non-taxable income and
therefore the tax effect of the adjustments only includes the other
adjustments noted.
Reconciliation of Operating Cash Flow to Free Cash Flow,
Adjusted Free Cash Flow, and Adjusted Free Cash Flow
Conversion
Three Months Ended
Year Ended
($ in millions)
December 31, 2023
December 31, 2022
December 31, 2023
December 31, 2022
Operating Cash Flow (GAAP)
$
164.9
$
181.4
$
455.0
$
321.2
Less: Purchases of property, plant &
equipment (capital expenditures)
(16.6
)
(17.0
)
(60.1
)
(60.0
)
Free Cash Flow (Non-GAAP)
$
148.3
$
164.4
$
394.9
$
261.2
Restructuring- and divestiture-related
adjustments
2.9
4.6
19.0
17.5
Transaction- and deal-related costs
1.6
5.5
17.7
20.2
One-time costs related to separation
—
—
—
0.2
Proceeds from sale of property
0.2
0.2
4.5
0.4
Other charges
—
—
—
14.8
Adjusted Free Cash Flow
(Non-GAAP)
$
153.0
$
174.7
$
436.1
$
314.3
Adjusted Net Earnings
(Non-GAAP)
$
125.4
$
127.8
$
450.3
$
496.3
Adjusted Free Cash Flow Conversion
Ratio (Non-GAAP)
122.0
%
136.7
%
96.8
%
63.3
%
Net Leverage Ratio and Reconciliation from Net Earnings to
EBITDA to Adjusted EBITDA
Total Debt
$
2,306.6
Less: Cash
(340.9
)
Net Debt
$
1,965.7
Adjusted EBITDA (Non-GAAP)
$
708.8
Net Leverage Ratio
2.8
Three Months Ended
Year Ended
($ in millions)
December 31, 2023
December 31, 2023
Net Earnings (GAAP)
$
106.2
$
376.9
Interest expense, net
23.0
93.7
Income tax expense
18.2
106.6
Depreciation and amortization expense
31.2
125.0
EBITDA (Non-GAAP)
$
178.6
$
702.2
Restructuring- and divestiture-related
adjustments
3.7
26.0
Transaction- and deal-related costs
3.2
12.0
One-time costs related to separation
0.5
3.2
Amortization of acquisition-related
inventory fair value step-up
—
1.3
Gain on sale of property
—
(2.8
)
Non-cash write-off of deferred financing
costs
—
0.2
Gain on sale of business
—
(34.4
)
Loss on equity investments
0.1
1.1
Adjusted EBITDA (Non-GAAP)
$
186.1
$
708.8
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240215236135/en/
Ryan Edelman Vice President, Investor Relations Vontier
Corporation 5438 Wade Park Blvd, Suite 600 Raleigh, NC 27607
Telephone: (984) 238-1929
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