- Record third quarter sales and margin performance
- Sales up 10% with core organic growth of 7%
- Reported operating income of $101 million and core adjusted
EBITDA of $118 million, up 23% versus prior year
- Raised full year 2023 outlook
ESAB Corporation (“ESAB” or the “Company”) (NYSE: ESAB), a
premier narrowly diversified industrial company, today announced
record financial results for the third quarter of 2023.
ESAB reported third quarter sales of $681 million, an increase
of 10% on a reported basis or 7% higher core organic growth before
acquisitions and currency translation impacts, as compared to the
prior year. ESAB also reported third quarter net income from
continuing operations attributable to ESAB of $59 million or $0.97
diluted earnings per share and core adjusted net income of $66
million or $1.08 diluted earnings per share. Core adjusted EBITDA
of $118 million rose 23% and margins expanded 170 basis points to
18.3%, both as compared to the prior year quarter.
“ESAB delivered another impressive quarter characterized by
organic growth, margin expansion, and cash flow, confidently
propelling us closer to our long-term objectives," stated Shyam P.
Kambeyanda, President and CEO of ESAB Corporation. "In September,
we proudly unveiled ESAB's cutting-edge equipment and automation
solutions at the Fabtech and Essen trade shows, captivating the
interest of end-users and generating excitement among our valued
customers. Our end markets continue to demonstrate resilience, and
the ongoing success of our ESAB Business Excellence system (EBX) is
facilitating growth, margin expansion and robust cash flow
generation. Based on our year-to-date results and continued
momentum entering the fourth quarter, ESAB has raised and narrowed
its full-year 2023 guidance."
ESAB Raised Full Year 2023
Outlook
ESAB raised its full year 2023 outlook and expects total core
sales growth of 6.5% to 7.5%, core organic sales growth of 5.0% to
6.0%, core adjusted EBITDA of $465 to $475 million, and core
adjusted EPS of $4.30 to $4.40, up from our prior guidance of total
core sales growth of 6.0% to 7.5%, core organic sales growth of
4.0% to 5.5%, core adjusted EBITDA of $450 to $465 million and core
adjusted EPS of $4.10 to $4.30.
Conference Call and
Webcast
The Company will hold a conference call to discuss its third
quarter 2023 results beginning at 8:00 a.m. Eastern on Wednesday,
November 1, 2023, which will be open to the public by calling
+1-888-550-5302 (U.S. callers) and +1-646-960-0685 (International
callers) and referencing the conference ID number 4669992 and
through webcast via ESAB’s website www.ESABcorporation.com under
the “Investors” section. Access to a supplemental slide
presentation can also be found on ESAB's website under the same
heading. Both the audio of this call and the slide presentation
will be archived on the website later today and will be available
until the next quarterly call. To view this press release and
associated financials in a PDF format click here. The Company’s
quarterly report on Form 10-Q for the quarter ended September 29,
2023, filed November 1, 2023, is also available on ESAB’s website
under the “Investors” section.
About ESAB Corporation
Founded in 1904, ESAB Corporation (NYSE: ESAB) is a premier
narrowly diversified global leader in connected fabrication
technology and gas control solutions. The Company’s rich history of
innovative products, workflow solutions and business system ESAB
Business Excellence, enables its purpose of Shaping the World We
Imagine.TM ESAB Corporation is based in North Bethesda, Maryland
and employs approximately 9,000 associates and serves customers in
approximately 150 countries. To learn more, visit
www.ESABcorporation.com.
Non-GAAP Financial Measures and Other
Adjustments
ESAB has provided in this press release financial information
that has not been prepared in accordance with accounting principles
generally accepted in the United States of America (“non-GAAP”).
ESAB presents some of these non-GAAP financial measures including
and excluding Russia due to economic and political volatility
caused by the war in Ukraine, which results in enhanced investor
interest in this information. Core non-GAAP financial measures
exclude Russia for the three and nine months ended September 29,
2023 and the three and nine months ended September 30, 2022. These
non-GAAP financial measures may include one or more of the
following: adjusted net income from continuing operations, Core
adjusted net income from continuing operations, adjusted EBITDA
(earnings before interest, taxes, Restructuring and other related
charges, separation costs, acquisition-amortization and other
related charges and depreciation and other amortization), Core
adjusted EBITDA, organic sales growth, Core organic sales growth,
adjusted free cash flow, and ratios based on the foregoing
measures. ESAB also provides adjusted EBITDA and adjusted EBITDA
margin on a segment basis, as well as Core adjusted EBITDA and Core
adjusted EBITDA margin on a segment basis.
Adjusted net income from continuing operations represents Net
income from continuing operations attributable to ESAB Corporation,
excluding Restructuring and other related charges,
acquisition-amortization and other related charges, separation
costs and pension settlement gains. Adjusted net income, includes
the tax effect of non-GAAP adjusting items at applicable tax rates
and excludes the impact of discrete tax charges or gains in each
period. ESAB also presents adjusted net income margin from
continuing operations, which is subject to the same adjustments as
adjusted net income from continuing operations. Adjusted net income
per diluted share from continuing operations is a calculation of
adjusted net income from continuing operations over the
weighted-average diluted shares outstanding. ESAB also presents
Core adjusted net income from continuing operations and Core
adjusted net income per share - diluted from continuing operations,
which are subject to the same adjustments as Adjusted net income
from continuing operations and Adjusted net income per diluted
share from continuing operations, further removing the impact of
Russia for the three and nine months ended September 29, 2023 and
the three and nine months ended September 30, 2022.
Adjusted EBITDA, excludes from Net income from continuing
operations, the effect of Income tax expense, Interest expense
(income) and other, net, Restructuring and other related charges,
separation costs, acquisition-amortization and other related
charges, pension settlement gains and depreciation and other
amortization. ESAB presents adjusted EBITDA margins, which are
subject to the same adjustments as adjusted EBITDA. Further, ESAB
presents these non-GAAP performance measures on a segment basis,
which excludes the impact of Restructuring and other related
charges, separation costs, acquisition-amortization and other
related charges, pension settlement gains and depreciation and
other amortization from operating income. ESAB also presents Core
adjusted EBITDA and Core adjusted EBITDA margins, which are subject
to the same adjustments as Adjusted EBITDA and Adjusted EBITDA
margins, respectively, further removing the impact of Russia for
the three and nine months ended September 29, 2023 and the three
and nine months ended September 30, 2022.
ESAB presents organic sales growth, which excludes the impact of
acquisitions and foreign exchange rate fluctuations and presents
core organic sales growth, which further excludes the impact of the
Russia business for the three and nine months ended September 29,
2023 and three and nine months ended September 30, 2022 from core
organic sales growth.
Adjusted free cash flow represents cash flows from operating
activities excluding cash outflows related to the Company’s
separation from Enovis Corporation and discontinued operations,
less Purchases of property, plant and equipment net of proceeds
from sale of certain properties. Cash conversion represents
Adjusted free cash flow divided by Adjusted net income from
continuing operations.
These non-GAAP financial measures assist ESAB management in
comparing its operating performance over time because certain items
may obscure underlying business trends and make comparisons of
long-term performance difficult, as they are of a nature and/or
size that occur with inconsistent frequency or relate to unusual
events or discrete restructuring plans and other initiatives that
are fundamentally different from the ongoing productivity and core
business of the Company.
ESAB management also believes that presenting these measures
allows investors to view its performance using the same measures
that the Company uses in evaluating its financial and business
performance and trends.
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 GAAP results has
been provided in the financial tables included in this press
release.
Forward Looking
Statements
This press release includes forward-looking statements,
including forward-looking statements within the meaning of the U.S.
Private Securities Litigation Reform Act of 1995. Such
forward-looking statements include, but are not limited to,
statements concerning the Company’s plans, goals, objectives,
outlook, expectations, and intentions, and other statements that
are not historical or current fact. Forward-looking statements are
based on the Company’s current expectations and involve risks and
uncertainties that could cause actual results to differ materially
from those expressed or implied in such forward-looking statements,
including general risks and uncertainties such as market
conditions, economic conditions, geopolitical events, changes in
laws, regulations or accounting rules, fluctuations in interest
rates, terrorism, wars or conflicts, major health concerns, natural
disasters or other disruptions of expected business conditions.
Factors that could cause the Company’s results to differ materially
from current expectations include, but are not limited to, risks
related to the Company’s ability to operate as a stand-alone public
company; the Company’s ability to achieve the intended benefits
from the Company’s separation from Enovis; the impact of the war in
Ukraine and escalating geopolitical tensions; impact of COVID-19,
including supply chain disruptions; the impact on creditworthiness
and financial viability of customers; other impacts on the
Company’s business and ability to execute business continuity
plans; and the other factors detailed in the Company’s Annual
Report on Form 10-K for the year ended December 31, 2022 filed with
the SEC on March 7, 2023, as well as other risks discussed in the
Company’s filings with the U.S. Securities and Exchange Commission.
In addition, these statements are based on assumptions that are
subject to change. This press release speaks only as of the date
hereof. The Company disclaims any duty to update the information
herein.
ESAB CORPORATION
CONSOLIDATED AND COMBINED
CONDENSED STATEMENTS OF OPERATIONS
Dollars in thousands, except
per share data
(Unaudited)
Three Months Ended
Nine Months Ended
September 29, 2023
September 30, 2022
September 29, 2023
September 30, 2022
Net sales
$
680,996
$
620,265
$
2,085,418
$
1,929,353
Cost of sales
431,282
410,927
1,324,392
1,268,212
Gross profit
249,714
209,338
761,026
661,141
Selling, general and administrative
expense
145,439
121,668
442,836
394,026
Restructuring and other related
charges
3,129
6,676
17,742
16,629
Operating income
101,146
80,994
300,448
250,486
Pension settlement gain
—
(3,300
)
—
(3,300
)
Interest expense and other, net
20,502
12,165
58,831
19,516
Income from continuing operations before
income taxes
80,644
72,129
241,617
234,270
Income tax expense
19,808
17,836
77,806
63,629
Net income from continuing operations
60,836
54,293
163,811
170,641
Loss from discontinued operations, net of
taxes
(1,723
)
(977
)
(4,259
)
(4,898
)
Net income
59,113
53,316
159,552
165,743
Less: Income attributable to
noncontrolling interest, net of taxes
1,543
962
4,506
2,703
Net income attributable to ESAB
Corporation
$
57,570
$
52,354
$
155,046
$
163,040
Earnings (loss) per share – basic
Income from continuing operations
$
0.98
$
0.88
$
2.63
$
2.78
Loss on discontinued operations
$
(0.03
)
$
(0.02
)
$
(0.07
)
$
(0.08
)
Net income per share
$
0.95
$
0.86
$
2.56
$
2.70
Earnings (loss) per share – diluted
Income from continuing operations
$
0.97
$
0.88
$
2.61
$
2.77
Loss on discontinued operations
$
(0.03
)
$
(0.02
)
$
(0.07
)
$
(0.08
)
Net income per share – diluted
$
0.94
$
0.86
$
2.54
$
2.69
ESAB CORPORATION
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES
Dollars in millions, except
per share data
(Unaudited)
Three Months Ended
Nine Months Ended
September 29, 2023
September 30, 2022
September 29, 2023
September 30, 2022
Adjusted Net Income
(Dollars in millions, except
per share data)(1)
Net income from continuing operations
(GAAP)
$
60.8
$
54.3
$
163.8
$
170.6
Less: Income attributable to
noncontrolling interest, net of taxes
1.5
1.0
4.5
2.7
Net income from continuing operations
attributable to ESAB Corporation (GAAP)
59.3
53.3
159.3
167.9
Restructuring and other related charges –
pretax(2)
3.1
6.7
17.7
16.6
Acquisition-amortization and other related
charges – pretax(3)
9.3
7.2
27.8
22.5
Separation costs – pretax(4)
—
2.6
—
9.7
Pension settlement gain – pretax
—
(3.3
)
—
(3.3
)
Tax effect on above items(5)
(3.2
)
(5.6
)
(11.0
)
(13.4
)
Discrete tax adjustments(6)
0.5
1.3
20.1
1.3
Adjusted net income from continuing
operations (non-GAAP)
$
69.0
$
62.2
$
213.9
$
201.4
Adjusted net income from continuing
operations attributable to Russia (non-GAAP)(7)
3.2
6.5
10.8
18.2
Core adjusted net income from continuing
operations (non-GAAP)
$
65.8
$
55.7
$
203.1
$
183.2
Adjusted net income margin from continuing
operations
10.2
%
10.0
%
10.3
%
10.4
%
Adjusted Net Income Per Share
Net income per share – diluted from
continuing operations (GAAP)
$
0.97
$
0.88
$
2.61
$
2.77
Restructuring and other related charges –
pretax(2)
0.05
0.11
0.29
0.27
Acquisition-amortization and other related
charges – pretax(3)
0.15
0.12
0.46
0.37
Separation costs – pretax(4)
—
0.04
—
0.16
Pension settlement gain – pretax
—
(0.05
)
—
(0.05
)
Tax effect on above items(5)
(0.05
)
(0.09
)
(0.18
)
(0.22
)
Discrete tax adjustments(6)
0.01
0.02
0.33
0.02
Adjusted net income per share – diluted
from continuing operations (non-GAAP)
$
1.13
$
1.03
$
3.51
$
3.33
Adjusted net income per share – diluted
from continuing operations attributable to Russia (non-GAAP)(7)
0.05
0.11
0.17
0.30
Core adjusted net income per share –
diluted from continuing operations (non-GAAP)
$
1.08
$
0.92
$
3.34
$
3.03
(1)
Numbers may not sum due to rounding.
(2)
Includes severance and other termination
benefits, including outplacement services as well as the cost of
relocating associates, relocating equipment, lease termination
expenses, impairment of long-lived assets and other costs in
connection with the closure and optimization of facilities and
product lines.
(3)
Includes transaction expenses,
amortization of intangibles, fair value charges on acquired
inventories and integration expenses.
(4)
Includes non-recurring professional fees
and employee costs related to the planning and execution of the
separation from Enovis.
(5)
This line item reflects the aggregate tax
effect of all non-tax adjustments reflected in the proceeding line
items of the table. ESAB estimates the tax effect of each
adjustment item by applying ESAB’s overall estimated effective tax
rate to the pretax amount, unless the nature of the item and/or tax
jurisdiction in which the item has been recorded requires
application of a specific tax rate or tax treatment, in which case
the tax effect of such item is estimated by applying such specific
tax rate or tax treatment.
(6)
For 2023, discrete tax adjustments include
the impact of net discrete tax expenses related to dividend
withholding tax, the impact of an uncertain tax position due to an
adverse court ruling in a foreign jurisdiction, and a law change in
a foreign tax jurisdiction. For 2022, discrete tax adjustments
include the impact of non-recurring tax expense related to
restructuring, mainly the Separation from Enovis.
(7)
Represents Russia contribution for the
three and nine months ended September 29, 2023 and three and nine
months ended September 30, 2022, respectively.
ESAB CORPORATION
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES
Dollars in millions
(Unaudited)
Three Months Ended September
29, 2023
Nine Months Ended September
29, 2023
Americas
EMEA & APAC
Total
Americas
EMEA & APAC
Total
(Dollars in
millions)(1)
Net income from continuing operations
(GAAP)
$
60.8
$
163.8
Income tax expense
19.8
77.8
Interest expense and other, net
20.5
58.8
Operating income (GAAP)
46.5
54.7
101.1
132.4
168.0
300.4
Adjusted to add (deduct)
Restructuring and other related
charges(2)
1.6
1.6
3.1
5.4
12.3
17.7
Acquisition-amortization and other related
charges(3)
5.2
4.0
9.3
16.0
11.9
27.8
Depreciation and other amortization
3.9
5.0
9.0
11.1
15.5
26.6
Adjusted EBITDA (non-GAAP)
$
57.2
$
65.3
$
122.5
$
164.9
$
207.7
$
372.6
Adjusted EBITDA attributable to Russia
(non-GAAP)(4)
—
4.7
4.7
—
15.7
15.7
Core adjusted EBITDA (non-GAAP)
$
57.2
$
60.6
$
117.8
$
164.9
$
192.0
$
356.9
Adjusted EBITDA margin (non-GAAP)
18.7
%
17.4
%
18.0
%
18.2
%
17.6
%
17.9
%
Core adjusted EBITDA margin
(non-GAAP)(5)
18.7
%
17.9
%
18.3
%
18.2
%
18.1
%
18.1
%
(1)
Numbers may not sum due to rounding.
(2)
Includes severance and other termination
benefits, including outplacement services as well as the cost of
relocating associates, relocating equipment, lease termination
expenses, impairment of long-lived assets and other costs in
connection with the closure and optimization of facilities and
product lines.
(3)
Includes transaction expenses,
amortization of intangibles, fair value charges on acquired
inventories and integration expenses.
(4)
Adjusted EBITDA relating to Russia for the
three and nine months ended September 29, 2023.
(5)
Net sales were $36.9 million and $114.4
million relating to Russia for the three and nine months ended
September 29, 2023.
ESAB CORPORATION
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES
Dollars in millions
(Unaudited)
Three Months Ended September
30, 2022
Nine Months Ended September
30, 2022
Americas
EMEA & APAC
Total
Americas
EMEA & APAC
Total
(Dollars in
millions)(1)
Net income from continuing operations
(GAAP)
$
54.3
$
170.6
Income tax expense
17.8
63.6
Interest expense (income) and other,
net
12.2
19.6
Pension settlement gain
$
(3.3
)
$
(3.3
)
Operating income (GAAP)
$
36.6
$
44.4
$
81.0
$
102.6
$
147.9
$
250.5
Adjusted to add (deduct):
Restructuring and other related
charges(2)
1.9
4.8
6.7
9.1
7.6
16.6
Separation costs(3)
0.8
1.0
1.8
4.6
4.3
8.9
Acquisition-amortization and other related
charges(4)
4.0
3.3
7.2
12.3
10.2
22.5
Depreciation and other amortization
3.2
5.1
8.3
10.1
16.1
26.2
Other(5)
—
—
—
0.3
(0.2
)
0.1
Adjusted EBITDA (non-GAAP)
$
46.4
$
58.6
$
105.0
$
138.9
$
185.9
$
324.8
Adjusted EBITDA attributable to Russia
(non-GAAP)(6)
—
9.5
9.5
—
23.4
23.4
Core adjusted EBITDA (non-GAAP)
$
46.4
$
49.2
$
95.5
$
138.9
$
162.5
$
301.4
Adjusted EBITDA margin (non-GAAP)
16.5
%
17.3
%
16.9
%
16.4
%
17.1
%
16.8
%
Core adjusted EBITDA margin
(non-GAAP)(7)
16.5
%
16.6
%
16.6
%
16.4
%
16.7
%
16.6
%
(1)
Numbers may not sum due to rounding.
(2)
Includes severance and other termination
benefits, including outplacement services as well as the cost of
relocating associates, relocating equipment, lease termination
expenses, impairment of long-lived assets and other costs in
connection with the closure and optimization of facilities and
product lines.
(3)
Includes non-recurring charges and
employee costs related to the planning and execution of the
Separation from Enovis within the Selling, general and
administrative expense line within the Consolidated and Combined
Condensed Statements of Operations. Amounts are allocated to the
segments as a percentage of revenue as the costs or gain are not
discrete to either segment.
(4)
Includes transaction expenses,
amortization of intangibles, fair value charges on acquired
inventories and integration expenses.
(5)
Relates to the adjustment for certain
items included within the Interest expense (income) and other, net
line within the Consolidated and Combined Statements of
Operations.
(6)
Adjusted EBITDA relating to Russia for the
three and nine months ended September 30, 2022.
(7)
Net sales were $43.3 million and $113.7
million relating to Russia for the three and nine months ended
September 30, 2022.
ESAB CORPORATION
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES
Change in Sales
Dollars in millions
(Unaudited)
Sales Growth(1)
Americas
EMEA & APAC
Total ESAB
$
Change %
$
Change %
$
Change %
For the three months ended September 30,
2022
$
281.4
$
338.9
$
620.3
Components of Change:
Existing businesses (organic sales
growth)(2)
11.3
4.0
%
36.0
10.6
%
47.3
7.6
%
Acquisitions(3)
14.6
5.2
%
6.7
2.0
%
21.3
3.4
%
Foreign Currency translation(4)
(1.5
)
(0.5
)%
(6.4
)
(1.9
)%
(7.9
)
(1.3
)%
Total sales growth
$
24.4
8.7
%
$
36.3
10.7
%
$
60.7
9.8
%
For the three months ended September 29,
2023
305.8
375.2
681.0
(1)
Numbers may not sum due to rounding.
(2)
Excludes the impact of acquisitions and
foreign exchange rate fluctuations, thus providing a measure of
change due to organic growth factors such as price, product mix and
volume.
(3)
Represents the incremental sales in
comparison to the portion of the prior period during which we did
not own the business.
(4)
Represents the difference between prior
year sales valued at the actual prior year foreign exchange rates
and prior year sales valued at current year foreign exchange
rates.
Core Sales
Growth(1)(5)
Americas
EMEA & APAC
ESAB
$
Change %
$
Change %
$
Change %
For the three months ended September 30,
2022
$
281.4
$
295.6
$
577.0
Components of Change:
Existing businesses (core organic sales
growth)(2)
11.3
4.0
%
26.7
9.0
%
38.0
6.6
%
Acquisitions(3)
14.6
5.2
%
6.7
2.3
%
21.3
3.7
%
Foreign Currency translation(4)
(1.5
)
(0.5
)%
9.3
3.1
%
7.8
1.3
%
Total core sales growth
$
24.4
8.7
%
$
42.6
14.4
%
$
67.1
11.6
%
For the three months ended September 29,
2023
$
305.8
$
338.3
$
644.1
(1)
Numbers may not sum due to rounding.
(2)
Excludes the impact of acquisitions and
foreign exchange rate fluctuations, thus providing a measure of
change due to organic growth factors such as price, product mix and
volume.
(3)
Represents the incremental sales in
comparison to the portion of the prior period during which we did
not own the business.
(4)
Represents the difference between prior
year sales valued at the actual prior year foreign exchange rates
and prior year sales valued at current year foreign exchange
rates.
(5)
Represents sales excluding Russia for the
three months ended September 29, 2023 and September 30, 2022,
respectively.
ESAB CORPORATION
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES
Change in Sales
Dollars in millions
(Unaudited)
Sales Growth(1)
Americas
EMEA & APAC
Total ESAB
$
Change %
$
Change %
$
Change %
For the nine months ended September 30,
2022
$
844.7
$
1,084.6
$
1,929.4
Components of Change:
Existing businesses (organic sales
growth)(2)
35.4
4.2
%
95.5
8.8
%
130.9
6.8
%
Acquisitions(3)
41.5
4.9
%
18.2
1.7
%
59.7
3.1
%
Foreign Currency translation(4)
(13.9
)
(1.6
)%
(20.6
)
(1.9
)%
(34.5
)
(1.8
)%
Total sales growth
$
62.9
7.4
%
$
93.1
8.6
%
$
156.1
8.1
%
For the nine months ended September 29,
2023
907.7
1177.8
2085.4
(1)
Numbers may not sum due to rounding.
(2)
Excludes the impact of acquisitions and
foreign exchange rate fluctuations, thus providing a measure of
change due to organic growth factors such as price, product mix and
volume.
(3)
Represents the incremental sales in
comparison to the portion of the prior period during which we did
not own the business.
(4)
Represents the difference between prior
year sales valued at the actual prior year foreign exchange rates
and prior year sales valued at current year foreign exchange
rates.
Core Sales
Growth(1)(5)
Americas
EMEA & APAC
ESAB
$
Change %
$
Change %
$
Change %
For the nine months ended September 30,
2022
$
844.7
$
970.9
$
1,815.7
Components of Change:
Existing businesses (core organic sales
growth)(2)
35.4
4.2
%
83.4
8.6
%
118.8
6.5
%
Acquisitions(3)
41.5
4.9
%
18.2
1.9
%
59.7
3.3
%
Foreign Currency translation(4)
(13.9
)
(1.6
)%
(9.2
)
(0.9
)%
(23.1
)
(1.3
)%
Total core sales growth
$
62.9
7.4
%
$
92.4
9.5
%
$
155.3
8.6
%
For the nine months ended September 29,
2023
$
907.7
$
1,063.3
$
1,971.0
(1)
Numbers may not sum due to rounding.
(2)
Excludes the impact of acquisitions and
foreign exchange rate fluctuations, thus providing a measure of
change due to organic growth factors such as price, product mix and
volume.
(3)
Represents the incremental sales in
comparison to the portion of the prior period during which we did
not own the business.
(4)
Represents the difference between prior
year sales valued at the actual prior year foreign exchange rates
and prior year sales valued at current year foreign exchange
rates.
(5)
Represents sales excluding Russia for the
nine months ended September 29, 2023 and September 30, 2022,
respectively.
ESAB CORPORATION
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES
Adjusted Free Cash
Flow
Dollars in millions
(Unaudited)
Three Months Ended
Nine Months Ended
September 29, 2023
September 30, 2022
September 29, 2023
September 30, 2022
Net cash provided by operating activities
(GAAP)
$
107.4
$
79.5
$
208.1
$
122.9
Purchases of property, plant and equipment
(GAAP)
(11.9
)
(8.3
)
(28.9
)
(22.0
)
Proceeds from the sale of certain
properties(1)
1.9
—
2.8
2.5
Payments related to the Separation(2)
—
0.3
4.4
13.2
Payments related to discontinued
operations
2.5
5.6
12.2
19.3
Adjusted free cash flow (non-GAAP)
$
99.9
$
77.1
$
198.6
$
135.9
(1)
Includes proceeds from the sale of certain
properties related to restructuring efforts for which previous cash
outlays were included in Net cash provided by operating
activities.
(2)
Separation payments relate to one-time
non-recurring professional fees and employee costs incurred in the
planning and execution of the Separation from Enovis.
.
ESAB CORPORATION
2023 Outlook
Dollars in millions
(Unaudited)
ESAB 2023 Outlook
Previous Guidance
New Guidance
2022 Core net sales
$
2,429.9
$
2,429.9
Organic growth
4.0%-5.5%
5.0%-6.0%
Acquisitions
2.5%
2.5%-3.0%
Currency
(0.5)%
(1.0)%-(1.5)%
2023 Core net sales growth
range
6.0%-7.5%
6.5%-7.5%
2022 Core adjusted EBITDA
$
408.4
$
408.4
2023 Core adjusted EBITDA range
$
450-$ 465
$
465-$ 475
2022 Core adjusted EPS
$
4.12
$
4.12
2023 Core adjusted EPS
$
4.10-$ 4.30
$
4.30-$ 4.40
ESAB CORPORATION
CONSOLIDATED AND CONDENSED
BALANCE SHEETS
Dollars in thousands
(Unaudited)
September 29, 2023
December 31, 2022
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
82,833
$
72,024
Trade receivables, less allowance for
credit losses of $0 and $23,471
388,483
374,329
Inventories, net
425,691
416,829
Prepaid expenses
62,765
56,637
Other current assets
69,967
68,851
Total current assets
1,029,739
988,670
Property, plant and equipment, net
276,295
284,226
Goodwill
1,554,004
1,529,767
Intangible assets, net
491,295
517,167
Lease assets - right of use
91,696
92,033
Other assets
313,014
342,152
Total assets
$
3,756,043
$
3,754,015
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Accounts payable
$
302,630
$
316,265
Accrued liabilities
307,727
285,310
Total current liabilities
610,357
601,575
Long-term debt
1,089,329
1,218,643
Other liabilities
515,261
545,339
Total liabilities
2,214,947
2,365,557
Equity:
Common stock - $0.001 par value -
Authorized 600,000,000, 60,271,072 and 60,094,725 shares
outstanding as of September 29, 2023 and December 31, 2022,
respectively
60
60
Additional paid-in capital
1,876,335
1,865,904
Retained earnings
303,954
159,231
Accumulated other comprehensive loss
(679,540
)
(674,988
)
Total ESAB Corporation equity
1,500,809
1,350,207
Noncontrolling interest
40,287
38,251
Total equity
1,541,096
1,388,458
Total liabilities and equity
$
3,756,043
$
3,754,015
ESAB CORPORATION
CONSOLIDATED AND COMBINED
CONDENSED STATEMENTS OF CASH FLOWS
Dollars in thousands
(Unaudited)
Nine Months Ended
September 29, 2023
September 30, 2022
Cash flows from operating
activities:
Net income
$
159,552
$
165,743
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, amortization, and other
impairment charges
57,090
48,699
Stock-based compensation expense
11,150
9,532
Deferred income tax
756
(4,725
)
Non-cash interest expense
896
1,673
Pension settlement gain
—
(3,300
)
Changes in operating assets and
liabilities:
Trade receivables, net
(15,170
)
(7,361
)
Inventories, net
(16,212
)
(54,757
)
Accounts payable
(17,746
)
(10,916
)
Other operating assets and liabilities
27,783
(21,673
)
Net cash provided by operating
activities
208,099
122,915
Cash flows from investing
activities:
Purchases of property, plant and
equipment
(28,865
)
(21,996
)
Proceeds from sale of property, plant and
equipment
5,171
4,322
Acquisition, net of cash received
(18,665
)
—
Net cash used in investing
activities
(42,359
)
(17,674
)
Cash flows from financing
activities:
Proceeds from borrowings on term credit
facility
—
1,000,000
Repayments of borrowings on term credit
facility
(6,250
)
—
Proceeds from borrowings on revolving
credit facility
454,671
495,881
Repayments of borrowings on revolving
credit facility and other
(578,623
)
(360,000
)
Payment of deferred financing fees and
other
—
(4,904
)
Payment of deferred consideration
—
(1,500
)
Payment of dividends
(9,702
)
(3,025
)
Consideration to Former Parent in
connection with the Separation
—
(1,200,000
)
Distributions to noncontrolling interest
holders
(2,279
)
(1,960
)
Transfers from Former Parent, net
—
2,847
Net cash used in financing
activities
(142,183
)
(72,661
)
Effect of foreign exchange rates on Cash
and cash equivalents
(12,748
)
(13,155
)
Increase in Cash and cash
equivalents
10,809
19,425
Cash and cash equivalents, beginning of
period
72,024
41,209
Cash and cash equivalents, end of
period
$
82,833
$
60,634
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231101589602/en/
Investor Relations Contact:
Mark Barbalato Vice President, Investor Relations E-mail:
investorrelations@esab.com Phone: 1-301-323-9098
Media Contact: Tilea Coleman
Vice President, Corporate Communications E-mail:
mediarelations@esab.com Phone: 1-301-323-9092
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