Attached files
| file | filename |
|---|---|
| 8-K - 8-K - Altra Industrial Motion Corp. | d426312d8k.htm |
| EX-99.1 - EX-99.1 - Altra Industrial Motion Corp. | d426312dex991.htm |
 Third-Quarter
Third-Quarter
2012 Results
2012 Results
October 25, 2012
10:00 AM ET
Dial In Number
877-407-8293 Domestic
201-689-8349 International
Webcast at www.altramotion.com
Replay Number
Through November 1, 2012
877-660-6853 Domestic
201-612-7415 International
Account Number: # 364
Conference ID: # 401845
Webcast Replay at
www.altramotion.com
Exhibit 99.2 |
 Safe Harbor Statement
1
Cautionary Statement Regarding Forward Looking Statements
All statements, other than statements of historical fact included in this presentation and conference
call are forward-looking statements, as that term is defined in the Private Securities
Litigation Reform Act of 1995. These statements include, but are not limited to, any statement that may predict, forecast, indicate or imply
future results, performance, achievements or events. Forward-looking statements can
generally be identified by phrases such as “believes,” “expects,” “potential,”
“continues,” “may,” “should,” “seeks,” “predicts,”
“anticipates,” “intends,” “projects,” “estimates,” “plans,” “could,” “designed”, “should be,” and other similar
expressions that denote expectations of future or conditional events rather than statements of
fact. Forward-looking statements also may relate to strategies, plans and objectives
for, and potential results of, future operations, financial results, financial condition, business prospects, growth strategy and liquidity, and are
based upon financial data, market assumptions and management’s current business plans and beliefs
or current estimates of future results or trends available only as of the time the statements
are made, which may become out of date or incomplete. Forward-looking statements are inherently uncertain, and investors must
recognize that events could differ significantly from our expectations. These statements include, but
may not be limited to, actions to improve profitability in Europe in the coming quarters, sales
growth in North America, the company’s guidance for 2012, its optimism regarding further success in 2013, and its evaluation of the
refinance of its 8 1/8 senior secured notes and the potential resulting interest expense reduction for
2013. In addition to the risks and uncertainties noted in this release, there are certain
factors that could cause actual results to differ materially from those anticipated by some of
the statements made. These include: (1) competitive pressures, (2) changes in economic conditions in the United States and abroad and the cyclical
nature of our markets, (3) loss of distributors, (4) the ability to develop new products and respond
to customer needs, (5) risks associated with international operations, including currency
risks, (6) accuracy of estimated forecasts of OEM customers and the impact of the current global economic environment on our
customers, (7) risks associated with a disruption to our supply chain, (8) fluctuations in the costs
of raw materials used in our products, (9) product liability claims, (10) work stoppages and
other labor issues, (11) changes in employment, environmental, tax and other laws and changes in the enforcement of laws, (12) loss of
key management and other personnel, (13) changes in pension and retirement liabilities, (14) risks
associated with compliance with environmental laws, (15) the ability to successfully execute,
manage and integrate key acquisitions and mergers, (16) failure to obtain or protect intellectual property rights, (17) risks associated
with impairment of goodwill or intangibles assets, (18) failure of operating equipment or information
technology infrastructure, (19) risks associated with our debt leverage and operating covenants
under our debt instruments, (20) risks associated with restrictions contained in our Senior Secured Notes and Convertible Notes
(21) risks associated with compliance with tax laws, (22) risks associated with the global recession
and volatility and disruption in the global financial markets, (23) risks associated with
implementation of our new ERP system, (24) risks associated with the Bauer acquisition and integration, (25) risks associated with the
Company's planned investment in a new manufacturing facility in China, and (26) other risks,
uncertainties and other factors described in the Company's quarterly reports on Form 10-Q
and annual reports on Form 10-K and in the Company's other filings with the U.S. Securities and Exchange Commission (SEC) or in
materials incorporated therein by reference. Except as required by applicable law, Altra Holdings,
Inc. does not intend to, update or alter its forward looking statements, whether as a result of
new information, future events or otherwise. |
 Third Quarter 2012 Highlights
•
Maintained a 29.8% gross profit margin and 10.5% operating income margin
despite 1.9% decline in sales
•
Non-GAAP adjusted net income was $9.1 million or $0.34 per diluted share for
the quarter *
•
Strong operating cash-flow resulting in free cash flow of $21.9 million during
the quarter *
•
Increased dividend to $0.06 per share for the fourth quarter
•
Initiating additional cost reductions in Europe
•
Purchased Lamiflex in Brazil
•
China greenfield on schedule to start up production in Q4
2 |
 Top-line Growth Drivers in Q3
•
Growth in distribution has slowed due to higher prior year comparable
and flattening North American industrial economy
•
Turf and Garden sales up slightly year-over-year as a result of good
market conditions and new product development
•
Ag demand up over Q3 2011 as a result of new programs
•
Expanded manufacturing capacity contributed to strong sales in
transportation market
•
Certain segments of energy market are strong while others are flat
•
Due
to
weaker
global
demand
mining
is
not
expected
to
improve
in
the
near term
3 |
 Third-Quarter 2012 Financial Highlights
QTD
QTD
Q3 2012
Q3 2011
$ Change
% Change
Net Sales
$174.5
$177.9
($3.4)
-1.9%
Gross Profit
$52.0
$53.0
($1.0)
-1.9%
% of Revenues
29.8%
29.8%
SG&A
$30.8
$31.6
($0.8)
-2.5%
% of Revenues
17.7%
17.8%
Income from operations
$18.4
$18.7
($0.3)
-1.6%
% of Revenues
10.5%
10.5%
Net Income
$8.5
$12.1
($3.6)
-29.8%
% of Revenues
4.9%
6.8%
Earnings Per Share:
Diluted
$0.32
$0.46
($0.14)
-30.4%
Weighted Average Common
Shares Outstanding:
Diluted
26,708
26,655
53
0.2%
($ millions)
4 |
  Third-Quarter 2012
Non-GAAP Measures
Non-GAAP Adjusted Net Income
(amounts in millions)
Q3 2012
Q3 2011
Reported Net Income (Loss)
$8.5
$12.1
Amortization of inventory fair value adjustment
0.1
-
Acquisition related expenses
-
0.7
Premium and deferred financing expense and
original issue discount eliminated on the
redeemed debt
0.7
0.5
Tax impact of above adjustments
(0.2)
(1)
(0.4)
(2)
Tax benefit from discrete items
-
(3.7)
Non-GAAP Adjusted Net Income
$9.1
$9.3
Non-GAAP Adjusted diluted earnings per share
$0.34
$0.35
(1)
tax impact is calculated by multiplying the estimated effective tax rate, 29.5% by the above
items (2)
tax impact is calculated by multiplying the estimated effective tax rate, 32.2% by the above
items Non-GAAP Adjusted Operating Income
(amount in millions)
Q3 2012
Q3 2011
Reported Income from Operations
$18.4
$18.7
Amortization of inventory fair value adjustment
0.1
-
Acquisition related expenses
-
0.7
Non-GAAP Adjusted Operating Income
$18.6
$19.3
5
QTD Free Cash Flow *
(amounts in millions)
Q3 2012
Q3 2011
Net cash used in operating activities
$30.2
$21.9
(8.3)
(4.9)
Free cash flow
21.9
17.0
Purchase of property, plant and
equipment |
 Balance Sheet Highlights
Balance Sheet Highlights
(amounts in millions)
Q3 2012
Q3 2011
Cash
$88.1
$90.3
Debt:
Convertible Senior Notes
85.0
85.0
8.125% Senior Notes
177.0
201.8
Capitalized Leases and other
1.2
0.6
IRB's
-
3.0
Mortgages
1.0
1.9
Total Debt
$264.2
$292.3
Total Debt less Cash
$176.1
42.3%
$202.0
49.0%
Shareholders' Equity
$239.8
57.7%
$210.2
51.0%
Shareholders' Equity plus Debt less Cash
$415.9
100.0%
$412.2
100.0%
6 |
 Third-Quarter 2012
Working Capital
Balance Sheet
(amounts in millions)
Operating Working Capital:
Q3 2012
Q2 2012
Q1 2012
Q4 2011
Q3 2011
Accounts Receivable
94.5
$
101.8
$
110.5
$
91.9
$
103.7
$
Inventories
124.3
121.0
127.1
126.0
123.5
Accounts Payable
(41.5)
(43.2)
(47.3)
(52.8)
(50.6)
Operating Working Capital
177.3
$
179.6
$
190.3
$
165.1
$
176.6
$
7 |
 2012 Outlook
•
$720 -
$735 Million in sales
•
$1.35 -
$1.45 Non-GAAP adjusted diluted earnings per share *
•
EPS includes $4.5 -
$5.0 Million of SAP costs and $1 Million in start-up costs in
China, approximately $0.13 -
$0.15 per share
•
$30 -
$35 Million in capital expenditures, including $10 Million for investments
in the new China facility
•
$25 -
$28 Million in depreciation and amortization
•
Tax rate approximately 32% before discrete items
8 |
 Summary
•
Solid third quarter and reaffirmed full year guidance
•
Very strong cash flow
•
Evaluating opportunities to refinance
•
Executing elements of long term growth strategy
•
Investing in growth opportunities
•
Accelerating profit improvement plans in Europe due to the weaker and
uncertain economy
9 |
 Discussion of Non-GAAP Measures
* As used in this presentation and conference call, non-GAAP adjusted
diluted earnings per share, non- GAAP adjusted income from operations and
non-GAAP adjusted net income are each calculated using either net income
or income from operations that excludes acquisition related costs, discrete tax items,
amortization
of
inventory
fair
value
adjustment,
premium
paid
on
the
redemption
of
debt
and
other
income
or charges that management does not consider to be directly related to the
Company's core operating performance. Non-GAAP adjusted diluted earnings
per share is calculated by dividing non-GAAP adjusted net income by GAAP
weighted average shares outstanding (diluted). Non-GAAP free cash flow is
calculated by deducting purchases of property, plant and equipment from new cash
provided by operating activities.
Altra believes that the presentation of non-GAAP adjusted net income,
non-GAAP adjusted income from operations, non-GAAP adjusted diluted
earnings per share and non-GAAP free cash flow provides important
supplemental information to management and investors regarding financial and business trends
relating to the Company's financial condition and results of operations.
10 |