Fourth Quarter 2019 Highlights
- Revenues of $606 million, down 14% from the prior year
excluding the impact of foreign exchange (“FX”)
- Reported net income of $26 million and adjusted net income of
$77 million
- Adjusted EBITDA of $135 million with a margin of 22.3%, with
the Industrials and Medical segments each reporting strong year
over year margin expansion
- Generated $90 million in free cash flow; free cash flow to
reported net income conversion of 347%
- Received all required regulatory approvals that are a condition
to closing for the pending transaction with Ingersoll-Rand plc’s
Industrial segment, including approval from the European
Commission; on track to close by February 29, 2020 with continued
confidence in achieving the previously announced $250 million cost
synergy target
2020 Guidance
- Adjusted EBITDA to be within a range of $540 million to $570
million
- Free cash flow to be within a range of $280 million to $300
million; free cash flow conversion to reported net income in excess
of 100%
Gardner Denver Holdings, Inc. (NYSE: GDI) announced today fourth
quarter and full year 2019 results.
Fourth quarter revenues of $606 million were down 15% compared
to the prior year and down 14% excluding the impact of FX. Net
income in the quarter was $26 million, or $0.12 per share based on
share count of 209 million, compared to prior year net income of
$95 million, or $0.45 per share based on share count of 208
million. Adjusted net income decreased 35% to $77 million, or $0.37
per share, compared to $119 million, or $0.57 per share, in the
prior year. Adjusted EBITDA was $135 million, down 29% compared to
the prior year, and Adjusted EBITDA as a percentage of revenues
finished at 22.3%.
In the fourth quarter, Gardner Denver generated $99 million of
cash flow from operating activities and invested $9 million in
capital expenditures, resulting in free cash flow of $90 million,
compared to $126 million in the prior year. Fourth quarter net debt
to Adjusted EBITDA leverage improved to 2.0x, from 2.1x in the
prior year.
Total revenues for 2019 were $2.5 billion, down 9% compared to
the prior year and down 6% excluding the impact of FX. Net income
for the year was $159 million, or $0.76 per share based on share
count of 209 million compared to prior year of $269 million, or
$1.29 per share based on share count of 209 million. Adjusted net
income decreased 16% to $332 million, or $1.59 per share, compared
to $395 million, or $1.89 per share, in the prior year. Adjusted
EBITDA was $565 million, down 17% compared to the prior year.
Adjusted EBITDA as a percentage of revenues decreased 230 basis
points to 23.0% as compared to 25.3% in the prior year. Gardner
Denver generated $343 million of cash flow from operating
activities in the year and invested $43 million in capital
expenditures, resulting in free cash flow of $300 million, or 189%
of reported net income.
Business Trends
“2019 was a solid year for Gardner Denver as we remained focused
on our strategy in the midst of challenging market conditions,”
said Vicente Reynal, Chief Executive Officer. “Through the use of
the Gardner Denver Execution Excellence process (“GDX”), the team
was able to execute both commercially and operationally and
proactively managed our cost base as market conditions remained
challenged across the majority of our businesses. The results are
evident in our financials, as the Industrials, mid and downstream
Energy and Medical businesses collectively grew 3% excluding FX and
expanded Adjusted EBITDA margins by 80 basis points, with each
business showing positive year over year margin expansion. I am
particularly pleased with the progress we have seen in the
Industrials and Medical segments as both businesses finished the
year at record Adjusted EBITDA margin. In the upstream Energy
business, the team took decisive action to right-size the cost
structure of the business given known headwinds in the oil and gas
markets, resulting in healthy Adjusted EBITDA margins that remain
above the overall Energy segment average. The mentality of focusing
on those areas within our control was also visible in our cash
generation as the teams continued to drive strong working capital
performance, resulting in $300 million of free cash flow for the
year and free cash flow conversion well in excess of 100%.”
“In the fourth quarter, our Industrials segment delivered flat
revenue growth and saw orders decline by 3%, both FX-adjusted,
against strong prior year comps. From a regional perspective, both
the Americas and Europe saw low single digit FX-adjusted revenue
declines and APAC saw strong double digit growth driven primarily
by growth in niche products and solid execution on custom projects.
Margins were a particular highlight as the segment delivered 23.7%
Adjusted EBITDA margin, an improvement of 50 basis points from
prior year and 150 basis points sequentially from the third
quarter, driven by the benefits from the Innovate to Value
initiative (“i2V”), the previously announced restructuring actions
and ongoing productivity initiatives,” continued Reynal.
“Within our Energy segment, the upstream business performed
above expectations, due to increased penetration of our newly
introduced products and solutions, to limit sequential revenue
declines to 21%. The mid and downstream businesses experienced low
double digit FX-adjusted revenue declines against strong prior year
comps as market conditions were similar to what we saw in our
Industrials segment. In the Medical segment, solid performance
across both gas and liquid pump markets led to flat FX-adjusted
revenue growth, and 60 basis points of Adjusted EBITDA margin
expansion against strong prior year comps of 19% revenue growth and
360 basis points of margin expansion,” stated Reynal.
Fourth quarter 2019 performance:
Industrials
- Orders of $308 million, down 5% compared to the prior year,
and down 3% excluding the impact of FX; on top of 4% growth in the
prior year excluding the impact of FX
- Revenues of $333 million, down 1% compared to the prior year,
and flat excluding the impact of FX; on top of 11% growth in the
prior year excluding the impact of FX
- Segment Adjusted EBITDA of $79 million, up 1% from $78 million
in the prior year
- Segment Adjusted EBITDA margin of 23.7%, up 50 basis points
from 23.2% in the prior year, driven by operational efficiencies,
including i2V and targeted cost reductions
Energy
- Orders of $172 million, down 36% compared to the prior year,
and down 35% excluding the impact of FX
- Upstream Energy orders of $79 million, down
52% compared to the prior year
- Revenues of $206 million, down 33% compared to the prior year,
and down 32% excluding the impact of FX
- Upstream Energy revenues of $79 million,
down 50% compared to the prior year
- Segment Adjusted EBITDA of $53 million, down 44% from $95
million in the prior year
- Segment Adjusted EBITDA margin of 26.0%, down 500 basis points
from 31.0% in the prior year, driven by the expected declines in
the upstream business
Medical
- Orders of $64 million, down 3% compared to the prior year, and
down 2% excluding the impact of FX
- Revenues of $67 million, down 2% compared to the prior year,
and flat excluding the impact of FX; on top of 19% growth in the
prior year excluding the impact of FX
- Segment Adjusted EBITDA of $21 million, flat to the prior
year
- Segment Adjusted EBITDA margin of 30.8%, up 60 basis points
from 30.2% in the prior year, driven by operational efficiencies
and targeted cost reductions
2020 Guidance and Outlook
“Looking ahead to 2020, we expect market conditions to remain
largely in line with what we saw at the end of 2019,” stated
Reynal. “Given current forecasts for Industrial Production and
other macro-economic factors, we expect our Industrial segment
growth to be flat to down low single digits. In addition, we expect
upstream Energy to be down approximately 20% due to lower
forecasted capital spending from our customers and decreased well
completion activity. The mid and downstream Energy and Medical
businesses are expected to perform comparatively better. As a
result, we are expecting low single digit revenue declines across
the total company with FX expected to be relatively flat to prior
year levels. We are introducing full year 2020 guidance for
Adjusted EBITDA of $540 million to $570 million. In addition, we
expect free cash flow to be within a range of $280 million to $300
million and free cash flow to reported net income conversion in
excess of 100%. It is worth noting that this guidance for 2020 does
not include any anticipated total year impact from the Coronavirus
outbreak. China is a relatively small percentage of our overall
revenue base and while we do expect to see shipment deferrals in
the first quarter, we currently expect that revenue to shift to the
remainder of the year. Most importantly, the safety and well-being
of our employees remains our utmost concern and we will continue to
monitor the situation in terms of any impact to our people,
customers and supply chain.”
Conference Call
Gardner Denver will broadcast a conference call to discuss
results for the fourth quarter of 2019 on Tuesday, February 18,
2020 at 8:00 a.m. Eastern time (7:00 a.m. Central time) through a
live webcast. This webcast will be available in listen-only mode
and can be accessed, for up to ninety days following the call,
through the Investors section on the Gardner Denver website at
http://investors.gardnerdenver.com.
Forward Looking
Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended (the "Securities Act") and Section 21E of the Securities
Exchange Act of 1934. These statements include, but are not limited
to, statements related to our expectations regarding the
performance of our business, our financial results, our liquidity
and capital resources and other non-historical statements,
including the statements in the "Business Trends” and “2020
Guidance and Outlook" sections of this press release. You can
identify these forward-looking statements by the use of words such
as "outlook," “guidance,” "believes," "expects," "potential,"
"continues," "may," "will," "should," "could," "seeks," "projects,"
"predicts," "intends," "plans," "estimates," "anticipates" or the
negative version of these words or other comparable words. Such
forward-looking statements are subject to various risks and
uncertainties, including relating to the pending merger between
Ingersoll-Rand plc’s (“Ingersoll-Rand”) Industrial segment
(“Ingersoll Rand Industrial”) and Gardner Denver, including that
conditions to such merger may not be satisfied, that such pending
merger may require significant time and attention of Gardner
Denver’s management, and that such pending merger may have a
material adverse effect on Gardner Denver whether or not it is
completed, macroeconomic factors beyond the Company’s control,
risks of doing business outside the United States, the Company’s
dependence on the level of activity in the energy industry,
potential governmental regulations restricting the use of hydraulic
fracturing, raw material costs and availability, the risk of a loss
or reduction of business with key customers or consolidation or the
vertical integration of the Company’s customer base, loss of or
disruption in the Company’s distribution network, the risk that
ongoing and expected restructuring plans may not be as effective as
the Company anticipates, and the Company’s substantial
indebtedness. Additional factors that could cause Gardner Denver’s
results to differ materially from those described in the
forward-looking statements can be found under the section entitled
"Risk Factors" in our most recent annual report on form 10-K filed
with the Securities and Exchange Commission (“SEC”), as such
factors may be updated from time to time in our periodic filings
with the SEC, which are accessible on the SEC's website at
www.sec.gov. Accordingly, there are or will be important factors
that could cause actual outcomes or results to differ materially
from those indicated in these statements. These factors should not
be construed as exhaustive and should be read in conjunction with
the other cautionary statements that are included in this release
and in our filings with the SEC. We undertake no obligation to
publicly update or review any forward-looking statement, whether as
a result of new information, future developments or otherwise,
except as required by law.
IMPORTANT ADDITIONAL INFORMATION AND WHERE
TO FIND IT
In connection with the pending merger transaction between
Gardner Denver and Ingersoll Rand Industrial U.S. Holdco, Inc.
(“Ingersoll Rand Industrial”), Gardner Denver and Ingersoll Rand
Industrial have filed registration statements with the SEC
registering shares of Gardner Denver common stock and Ingersoll
Rand Industrial common stock in connection with the proposed
transaction. Gardner Denver has also filed a proxy statement, which
has been sent to the Gardner Denver shareholders in connection with
their vote required in connection with the proposed transaction.
Ingersoll-Rand shareholders are urged to read the prospectus and/or
information statement that will be included in the registration
statements and any other relevant documents when they become
available, and Gardner Denver stockholders are urged to read the
proxy statement and any other relevant documents when they become
available, because they contain important information about Gardner
Denver, Ingersoll Rand Industrial and the proposed transaction. The
proxy statement, prospectus and/or information statement, and other
documents relating to the proposed transactions (when they become
available) can be obtained free of charge from the SEC’s website at
www.sec.gov. The proxy statement, prospectus and/or information
statement and other documents (when they are available) are also
available free of charge on Ingersoll-Rand’s website at
http://ir.ingersollrand.com or on Gardner Denver’s website at
https://investors.gardnerdenver.com. Information regarding the
persons who may, under the rules of the SEC, be considered
participants in the solicitation of the stockholders of Gardner
Denver in connection with the proposed transaction is set forth in
the proxy statement/prospectus filed with the SEC.
NO OFFER OR SOLICITATION
This communication shall not constitute an offer to sell or the
solicitation of an offer to sell or the solicitation of an offer to
buy any securities, nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offer of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as
amended.
This press release is not a solicitation of a proxy from any
security holder of Gardner Denver. However, Ingersoll-Rand, Gardner
Denver and certain of their respective directors and executive
officers may be deemed to be participants in the solicitation of
proxies from shareholders of Gardner Denver in connection with the
proposed transaction under the rules of the SEC. Information about
the directors and executive officers of Ingersoll-Rand may be found
in its Annual Report on Form 10-K filed with the SEC on February
12, 2019 and its definitive proxy statement relating to its 2019
Annual Meeting of Shareholders filed with the SEC on April 23,
2019. Information about the directors and executive officers of
Gardner Denver may be found in its Annual Report on Form 10-K filed
with the SEC on February 27, 2019, and its definitive proxy
statement relating to its 2019 Annual Meeting of Stockholders filed
with the SEC on March 26, 2019.
About Gardner Denver
Gardner Denver (NYSE: GDI) is a leading global provider of
mission-critical flow control and compression equipment and
associated aftermarket parts, consumables and services, which it
sells across multiple attractive end-markets within the industrial,
energy and medical industries. Its broad and complete range of
compressor, pump, vacuum and blower products and services, along
with its application expertise and over 155 years of engineering
heritage, allows Gardner Denver to provide differentiated product
and service offerings for its customers' specific uses. Gardner
Denver supports its customers through its global geographic
footprint of 38 key manufacturing facilities, more than 30
complementary service and repair centers across six continents, and
approximately 6,600 employees world-wide.
Gardner Denver uses its website www.gardnerdenver.com as a
channel of distribution of Company information. Financial and other
important information regarding the Company is routinely accessible
through and posted on its website. Accordingly, investors should
monitor Gardner Denver’s website, in addition to following the
Company’s press releases, SEC filings and public conference calls
and webcasts. In addition, you may automatically receive e-mail
alerts and other information about Gardner Denver when you enroll
your e-mail address by visiting the “Email Alerts” section of
Gardner Denver’s website at http://investors.gardnerdenver.com.
Non-U.S. GAAP Measures of Financial
Performance
In addition to consolidated GAAP financial measures, Gardner
Denver reviews various non-GAAP financial measures, including
“Adjusted EBITDA,” “Adjusted Net Income,” “Adjusted Diluted EPS,”
“Free Cash Flow” and “Free Cash Flow conversion.”
Gardner Denver believes Adjusted EBITDA, Adjusted Net Income and
Adjusted Diluted EPS are helpful supplemental measures to assist
management and investors in evaluating the Company’s operating
results as they exclude certain items that are unusual in nature or
whose fluctuation from period to period do not necessarily
correspond to changes in the operations of Gardner Denver’s
business. Adjusted EBITDA represents net income before interest,
taxes, depreciation, amortization and certain non-cash,
non-recurring and other adjustment items. Adjusted Net Income is
defined as net income including interest, depreciation and
amortization of non-acquisition related intangible assets and
excluding other items used to calculate Adjusted EBITDA and further
adjusted for the tax effect of these exclusions. Gardner Denver
believes that the adjustments applied in presenting Adjusted EBITDA
and Adjusted Net Income are appropriate to provide additional
information to investors about certain material non-cash items and
about non-recurring items that the Company does not expect to
continue at the same level in the future. Adjusted Diluted EPS is
defined as Adjusted Net Income divided by Adjusted Diluted Average
Shares Outstanding.
Gardner Denver uses Free Cash Flow and Free Cash Flow conversion
to review the liquidity of its operations. Gardner Denver measures
Free Cash Flow as cash flows from operating activities less capital
expenditures and Free Cash Flow conversion as Free Cash Flow
divided by net income. Gardner Denver believes Free Cash Flow and
Free Cash Flow conversion are useful supplemental financial
measures for management and investors in assessing the Company’s
ability to pursue business opportunities and investments and to
service its debt. Free Cash Flow and Free Cash Flow conversion are
not measures of our liquidity under GAAP and should not be
considered as alternatives to cash flows from operating
activities.
Management and Gardner Denver’s board of directors regularly use
these measures as tools in evaluating the Company’s operating and
financial performance and in establishing discretionary annual
compensation. Such measures are provided in addition to, and should
not be considered to be a substitute for, or superior to, the
comparable measures under GAAP. In addition, Gardner Denver
believes that Adjusted EBITDA, Adjusted Net Income, Adjusted
Diluted EPS, Free Cash Flow and Free Cash Flow conversion are
frequently used by investors and other interested parties in the
evaluation of issuers, many of which also present Adjusted EBITDA,
Adjusted Net Income, Adjusted Diluted EPS, Free Cash Flow and Free
Cash Flow conversion when reporting their results in an effort to
facilitate an understanding of their operating and financial
results and liquidity.
Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS, Free
Cash Flow and Free Cash Flow conversion should not be considered as
alternatives to net income, diluted earnings per share or any other
performance measure derived in accordance with GAAP, or as
alternatives to cash flow from operating activities as a measure of
our liquidity. Adjusted EBITDA, Adjusted Net Income, Adjusted
Diluted EPS, Free Cash Flow and Free Cash Flow conversion have
limitations as analytical tools, and you should not consider such
measures either in isolation or as substitutes for analyzing
Gardner Denver’s results as reported under GAAP.
Reconciliations of Adjusted EBITDA, Adjusted Net Income,
Adjusted Diluted EPS and Free Cash Flow to their most comparable
U.S. GAAP financial metrics for historical periods are presented in
the tables below.
Reconciliations of non-GAAP measures related to full year 2020
guidance have not been provided due to the unreasonable efforts it
would take to provide such reconciliations due to the high
variability, complexity and uncertainty with respect to forecasting
and quantifying certain amounts that are necessary for such
reconciliations, including net income (loss) and adjustments that
could be made for acquisitions related expenses, restructuring and
other business transformation costs, gains or losses on foreign
currency exchange and the timing and magnitude of other amounts in
the reconciliation of historic numbers. For the same reasons, we
are unable to address the probable significance of the unavailable
information, which could have a potentially unpredictable, and
potentially significant, impact on our future GAAP financial
results.
GARDNER DENVER HOLDINGS, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Dollars in millions, except per
share amounts)
(Unaudited)
For the Three Month period
ended
For the Year Ended
December 31,
December 31,
2019
2018
2019
2018
Revenues
$
605.8
$
712.7
$
2,451.9
$
2,689.8
Cost of sales
380.5
443.8
1,540.2
1,677.3
Gross Profit
225.3
268.9
911.7
1,012.5
Selling and administrative expenses
113.4
104.2
436.4
434.6
Amortization of intangible assets
31.6
32.4
124.3
125.8
Other operating expense (income), net
32.7
(1.8
)
75.7
9.1
Operating Income
47.6
134.1
275.3
443.0
Interest expense
20.9
23.1
88.9
99.6
Loss on extinguishment of debt
-
-
0.2
1.1
Other income, net
(1.6
)
(0.4
)
(4.7
)
(7.2
)
Income Before Income Taxes
28.3
111.4
190.9
349.5
Provision for income taxes
2.5
16.9
31.8
80.1
Net Income
$
25.8
$
94.5
$
159.1
$
269.4
Basic earnings per share
$
0.13
$
0.47
$
0.78
$
1.34
Diluted earnings per share
$
0.12
$
0.45
$
0.76
$
1.29
GARDNER DENVER HOLDINGS, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(Dollars in millions, except
share and per share amounts)
(Unaudited)
December 31,
December 31,
2019
2018
Assets Current assets: Cash and cash equivalents
$
505.5
$
221.2
Accounts receivable, net of allowance for doubtful accounts of
$18.4 and $17.4, respectively
459.1
525.4
Inventories
502.5
523.9
Other current assets
76.8
60.7
Total current assets
1,543.9
1,331.2
Property, plant and equipment, net of accumulated depreciation of
$298.4 and $250.0, respectively
326.6
356.6
Goodwill
1,287.7
1,289.5
Other intangible assets, net
1,255.0
1,368.4
Deferred tax assets
3.0
1.3
Other assets
212.2
140.1
Total assets
$
4,628.4
$
4,487.1
Liabilities and Stockholders' Equity Current liabilities:
Short-term borrowings and current maturities of long-term debt
$
7.6
$
7.9
Accounts payable
322.9
340.0
Accrued liabilities
244.1
248.5
Total current liabilities
574.6
596.4
Long-term debt, less current maturities
1,603.8
1,664.2
Pensions and other postretirement benefits
99.7
94.8
Deferred income taxes
251.0
265.5
Other liabilities
229.4
190.2
Total liabilities
2,758.5
2,811.1
Stockholders' equity: Common stock, $0.01 par value; 1,000,000,000
shares authorized; 206,767,529 and 201,051,291 shares issued at
December 31, 2019 and December 31, 2018, respectively
2.1
2.0
Capital in excess of par value
2,302.0
2,282.7
Accumulated deficit
(141.4
)
(308.7
)
Accumulated other comprehensive loss
(256.0
)
(247.0
)
Treasury stock at cost; 1,701,785 and 2,881,436 shares at December
31, 2019 and 2018, respectively
(36.8
)
(53.0
)
Total stockholders' equity
1,869.9
1,676.0
Total liabilities and stockholders' equity
$
4,628.4
$
4,487.1
GARDNER DENVER HOLDINGS, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Dollars in millions)
(Unaudited)
For the
For the
Year Ended
Year Ended
December 31,
December 31,
2019
2018
Cash Flows From Operating Activities: Net income
$
159.1
$
269.4
Adjustments to reconcile net income to net cash provided by
operating activities: Amortization of intangible assets
124.3
125.8
Depreciation in cost of sales
44.3
44.8
Depreciation in selling and administrative expenses
9.5
9.8
Non-cash restructuring charges
3.3
-
Stock-based compensation expense
19.2
2.8
Foreign currency transaction losses (gains), net
8.1
(1.9
)
Net loss (gain) on asset disposition
0.8
(1.1
)
Loss on extinguishment of debt
0.2
1.1
Non-cash change in LIFO reserve
0.2
0.2
Deferred income taxes
(21.3
)
4.0
Changes in assets and liabilities Receivables
54.7
13.2
Inventories
18.7
(13.0
)
Accounts payable
(9.2
)
69.6
Accrued liabilities
(26.1
)
(38.9
)
Other assets and liabilities, net
(42.5
)
(41.3
)
Net cash provided by operating activities
343.3
444.5
Cash Flows From Investing Activities: Capital expenditures
(43.2
)
(52.2
)
Net cash paid in business combinations
(12.0
)
(186.3
)
Disposals of property, plant and equipment
0.9
3.5
Net cash used in investing activities
(54.3
)
(235.0
)
Cash Flows From Financing Activities: Principal payments on
long-term debt
(32.8
)
(337.6
)
Purchases of treasury stock
(18.6
)
(40.7
)
Proceeds from stock option exercises
42.7
6.8
Payments of contingent consideration
(2.3
)
(1.4
)
Payments of debt issuance costs
(0.5
)
-
Other
-
(0.1
)
Net cash used in financing activities
(11.5
)
(373.0
)
Effect of exchange rate changes on cash and cash equivalents
6.8
(8.6
)
Increase (decrease) in cash and cash equivalents
284.3
(172.1
)
Cash and cash equivalents, beginning of year
221.2
393.3
Cash and cash equivalents, end of year
$
505.5
$
221.2
GARDNER DENVER HOLDINGS, INC.
AND SUBSIDIARIES
RECONCILIATION OF NET INCOME
AND EARNINGS PER SHARE TO ADJUSTED NET INCOME AND ADJUSTED EARNINGS
PER SHARE
(Dollars in millions, except per
share amounts)
(Unaudited)
For the Three
For the
Month Period Ended
Year Ended
December 31,
December 31,
2019
2018
2019
2018
Net Income
$
25.8
$
94.5
$
159.1
$
269.4
Basic Earnings Per Share (As Reported)
$
0.13
$
0.47
$
0.78
$
1.34
Diluted Earnings Per Share (As Reported)
$
0.12
$
0.45
$
0.76
$
1.29
Plus: Provision for income taxes
2.5
16.9
31.8
80.1
Amortization of acquisition related intangible assets
28.0
29.1
112.5
111.9
Restructuring and related business transformation costs
9.6
13.6
25.6
38.8
Acquisition related expenses and non-cash charges
20.0
3.6
54.6
16.7
Environmental remediation loss reserve
-
-
0.1
-
Expenses related to public stock offerings
-
0.7
-
2.9
Establish public company financial reporting compliance
-
1.1
0.6
4.3
Stock-based compensation
6.2
(5.3
)
23.1
(2.3
)
Loss on extinguishment of debt
-
-
0.2
1.1
Foreign currency transaction losses (gains), net
5.0
(1.3
)
8.1
(1.9
)
Shareholder litigation settlement recoveries
-
(5.0
)
(6.0
)
(9.5
)
Other adjustments
(0.2
)
2.2
0.6
2.2
Minus: Income tax provision, as adjusted
20.1
31.2
77.9
119.0
Adjusted Net Income
$
76.8
$
118.9
$
332.4
$
394.7
Adjusted Basic Earnings Per Share
$
0.38
$
0.59
$
1.63
$
1.96
Adjusted Diluted Earnings Per Share1
$
0.37
$
0.57
$
1.59
$
1.89
Average shares outstanding: Basic, as reported
204.8
201.1
203.5
201.6
Diluted, as reported
209.4
207.7
208.9
209.1
Adjusted diluted1
209.4
207.7
208.9
209.1
1 Adjusted diluted share count and adjusted diluted
earnings per share include incremental dilutive shares, using the
treasury stock method, which are added to average shares
outstanding.
GARDNER DENVER HOLDINGS, INC.
AND SUBSIDIARIES
RECONCILIATION OF NET INCOME
TO ADJUSTED EBITDA AND ADJUSTED NET INCOME AND CASH FLOWS -
OPERATING ACTIVITIES TO FREE CASH FLOW
(Dollars in millions)
(Unaudited)
For the Three
For the
Month Period Ended
Year Ended
December 31,
December 31,
2019
2018
2019
2018
Net Income
$
25.8
$
94.5
$
159.1
$
269.4
Plus: Interest expense
20.9
23.1
88.9
99.6
Provision for income taxes
2.5
16.9
31.8
80.1
Depreciation expense
13.5
13.3
53.8
54.6
Amortization expense
31.6
32.4
124.3
125.8
Restructuring and related business transformation costs
9.6
13.6
25.6
38.8
Acquisition related expenses and non-cash charges
20.0
3.6
54.6
16.7
Environmental remediation loss reserve
-
-
0.1
-
Expenses related to public stock offerings
-
0.7
-
2.9
Establish public company financial reporting compliance
-
1.1
0.6
4.3
Stock-based compensation
6.2
(5.3
)
23.1
(2.3
)
Loss on extinguishment of debt
-
-
0.2
1.1
Foreign currency transaction losses (gains), net
5.0
(1.3
)
8.1
(1.9
)
Shareholder litigation settlement recoveries
-
(5.0
)
(6.0
)
(9.5
)
Other adjustments
(0.2
)
2.2
0.6
2.2
Adjusted EBITDA
$
134.9
$
189.8
$
564.8
$
681.8
Minus: Interest expense
20.9
23.1
88.9
99.6
Income tax provision, as adjusted
20.1
31.2
77.9
119.0
Depreciation expense
13.5
13.3
53.8
54.6
Amortization of non-acquisition related intangible assets
3.6
3.3
11.8
13.9
Adjusted Net Income
$
76.8
$
118.9
$
332.4
$
394.7
Free Cash Flow Cash flows - operating activities
99.0
146.2
343.3
444.5
Minus: Capital expenditures
9.4
20.1
43.2
52.2
Free Cash Flow
$
89.6
$
126.1
$
300.1
$
392.3
GARDNER DENVER HOLDINGS, INC.
AND SUBSIDIARIES
RECONCILIATION OF SEGMENT
ADJUSTED EBITDA TO INCOME BEFORE INCOME TAXES
(Dollars in millions)
(Unaudited)
For the Three
For the
Month Period Ended
Year Ended
December 31,
December 31,
2019
2018
2019
2018
Revenue Industrials
$
333.1
$
337.6
$
1,301.3
$
1,303.3
Energy
205.8
307.0
870.2
1,121.1
Medical
66.9
68.1
280.4
265.4
Total Revenue
$
605.8
$
712.7
$
2,451.9
$
2,689.8
Segment Adjusted EBITDA Industrials
$
78.8
$
78.2
$
296.6
$
288.2
Energy
53.5
95.3
225.1
337.8
Medical
20.6
20.6
84.4
75.0
Total Segment Adjusted EBITDA
$
152.9
$
194.1
$
606.1
$
701.0
Less items to reconcile Segment Adjusted EBITDA to Income Before
Income Taxes: Corporate expenses not allocated to segments
$
18.0
$
4.3
$
41.3
$
19.2
Interest expense
20.9
23.1
88.9
99.6
Depreciation and amortization expense
45.1
45.7
178.1
180.4
Restructuring and related business transformation costs
9.6
13.6
25.6
38.8
Acquisition related expenses and non-cash charges
20.0
3.6
54.6
16.7
Environmental remediation loss reserve
-
-
0.1
-
Expenses related to public stock offerings
-
0.7
-
2.9
Establish public company financial reporting compliance
-
1.1
0.6
4.3
Stock-based compensation
6.2
(5.3
)
23.1
(2.3
)
Loss on extinguishment of debt
-
-
0.2
1.1
Foreign currency transaction losses (gains), net
5.0
(1.3
)
8.1
(1.9
)
Shareholder litigation settlement recoveries
-
(5.0
)
(6.0
)
(9.5
)
Other adjustments
(0.2
)
2.2
0.6
2.2
Income Before Income Taxes
$
28.3
$
111.4
$
190.9
$
349.5
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200217005455/en/
Gardner Denver Holdings, Inc. Investor Relations Contact Vikram
Kini (414) 212-4753 vikram.kini@gardnerdenver.com
Gardner Denver (NYSE:GDI)
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