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EX-99.2 - EX-99.2 - Altra Industrial Motion Corp.aimc-ex992_128.htm
8-K - 8-K - Altra Industrial Motion Corp.aimc-8k_20180726.htm

Exhibit 99.1

Altra Reports Second-Quarter 2018 Results

Achieves Record EPS; Raises Guidance for Full Year 2018 as Growth Momentum Continues

 

BRAINTREE, Mass., July 26, 2018 - Altra Industrial Motion Corp(Nasdaq: AIMC), a global manufacturer and marketer of electromechanical power transmission and motion control products, today announced unaudited financial results for the second quarter ended June 30, 2018.

Second-Quarter Financial Highlights

 

Net sales were $237.3 million, up 6.2% from $223.4 million in the second quarter of 2017. Excluding the positive impact of foreign currency translation, net sales were up 2.9% from the same quarter of 2017.

 

Net income increased 23.4% to $19.0 million, or $0.65 per diluted share, from $15.4 million, or $0.53 per diluted share, in the second quarter of 2017.

 

Non-GAAP net income grew 25.3% to $20.8 million, or $0.71 per diluted share, from $16.6 million, or $0.57 per diluted share, a year ago.*  

 

Free cash flow increased 23.5% to $14.2 million year to date compared to the same period last year.*

 

Management Comments

“Our strong momentum continued in the second quarter as sales grew 6.2%, our sixth consecutive quarterly year-over-year increase,” said Carl Christenson, Altra’s Chairman and CEO. “We are capitalizing on the ongoing strength of the industrial economy, leveraging robust demand across most of our end markets, and we remain on-track in the execution of our growth strategy. Through our ongoing focus on bottom-line improvement, we achieved 23.4% and 25.3% increases in GAAP and non-GAAP net income, respectively, in the second quarter.*  

“Integration planning is on target for the combined Fortive Automation & Specialty business and Altra businesses to hit the ground running on day one,” continued Christenson. “Our plan remains to close on the acquisition by the end of the year and our entire team is working very hard to close as early as possible. We look forward to creating a premium global industrial company that expands our portfolio across the technology spectrum and increases our exposure to end markets with attractive secular trends.


“We have a strong new business pipeline with excellent opportunities for organic growth, and increasing confidence in the staying power of the current industrial economy,” continued Christenson. “As a result of this optimism and our first-half performance, we are raising our guidance for full year 2018.”  

Business Outlook

Altra is increasing its guidance for full year 2018. The Company currently expects full-year 2018 sales in the range of $920 to $935 million, up from its previous guidance in the range of $910 to $930 million.  Altra currently expects GAAP diluted EPS in the range of $2.06 to $2.11, and non-GAAP diluted EPS in the range of $2.45 to $2.55.  This is up from its previous guidance of GAAP diluted EPS in the range of $1.99 to $2.08, and non-GAAP diluted EPS guidance in the range of $2.36 to $2.49. The Company expects its tax rate for the full year to be approximately 23% to 25% before discrete items, capital expenditures in the range of $28 to $30 million, and depreciation and amortization in the range of $36 to $38 million.*

Reconciliations of Non-GAAP Disclosures

 

*Reconciliation of Non-GAAP Net Income:

 

 

Quarter Ended

 

 

Year to Date Ended

 

 

 

June 30, 2018

 

 

June 30, 2017

 

 

June 30, 2018

 

 

June 30, 2017

 

Net Income

 

$

19,007

 

 

$

15,384

 

 

$

28,008

 

 

$

25,710

 

Restructuring and consolidation costs

 

$

566

 

 

$

1,198

 

 

$

1,509

 

 

$

3,096

 

Loss on extinguishment of convertible debt

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,797

 

Loss on settlement of pension plan

 

 

-

 

 

 

-

 

 

 

5,086

 

 

 

-

 

Supplier warranty settlement

 

 

(1,980

)

 

 

-

 

 

 

(1,980

)

 

 

-

 

Amortization of inventory fair value adjustment

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2,347

 

Acquisition related expenses

 

 

1,833

 

 

 

568

 

 

 

7,241

 

 

 

1,566

 

Tax impact of above adjustments

 

 

1,348

 

 

 

(529

)

 

 

213

 

 

 

(2,620

)

Non-GAAP net income*

 

$

20,774

 

 

$

16,621

 

 

$

40,077

 

 

$

31,896

 

Non-GAAP diluted earnings per share*

 

$

0.71

 

 

$

0.57

 

 

$

1.37

 

 

$

1.10

 

 

 

*Reconciliation of Free Cash Flow:

 

Quarter Ended

 

 

June 30, 2018

 

 

June 30, 2017

 

Net cash flows from operating activities

$

29,109

 

 

$

25,956

 

Purchase of property, plant and equipment

 

(14,936

)

 

 

(14,416

)

Free cash flow*

$

14,173

 

 

$

11,540

 

In Thousands of Dollars, except per share amounts

 

 

 

 

 

 

 

 

*Reconciliation of Non-GAAP Operating Margin:


 

 

Quarter Ended

Year to Date Ended

 

 

 

June 30, 2018

 

 

June 30, 2017

 

 

June 30, 2018

 

 

June 30, 2017

 

Income from operations

 

$

28,049

 

 

$

23,149

 

 

$

47,729

 

 

$

40,811

 

Restructuring and consolidation costs

 

 

566

 

 

 

1,198

 

 

 

1,509

 

 

 

3,096

 

Amortization of inventory fair value adjustment

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2,347

 

Supplier warranty settlement

 

 

(1,980

)

 

 

-

 

 

 

(1,980

)

 

 

-

 

Acquisition related expenses

 

 

1,833

 

 

 

568

 

 

 

7,241

 

 

 

1,566

 

Non-GAAP income from operations *

 

$

28,468

 

 

$

24,915

 

 

$

54,499

 

 

$

47,820

 

Non-GAAP Income from operations as a percent of net sales*

 

 

12.0

%

 

 

11.2

%

 

 

11.4

%

 

 

10.9

%

 

 

 

 

 

 

 

 

 

 

 

Fiscal Year 2018

 

 

Fiscal Year 2018

Diluted earnings

per share

 

 

 

 

 

 

 

 

 

Net Income

 

$60.0 - $61.4

 

 

$2.06 - $2.11

 

 

Adjustments (1)

 

 

 

 

 

 

 

 

Restructuring and consolidation costs

 

2.0 - 4.0

 

 

 

 

 

Acquisition related expenses (2)

 

 

7.2

 

 

 

Loss on settlement of pension plan

 

 

5.1

 

 

 

Supplier warranty settlement

 

 

(2.0)

 

 

 

 

 

Tax impact of above adjustments (3)

 

(1.0) - (1.5)

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Net Income

 

$71.3 - $74.2

 

 

$2.45 - $2.55

 

 

 

 

 

 

 

 

 

 

 

(1) Adjustments are pre-tax, with net tax impact listed separately.

(2) Due to the uncertainty as to when future acquisition-related expenditures will be incurred, Altra has only included in its reconciliation those costs incurred year-to-date.  Altra expects to incur between $30-$50 million in acquisition-related expenditures in conjunction with the planned Fortive A&S business acquisition.

(3) Tax impact is calculated by multiplying the estimated effective tax rate for the period of 23% - 25% before discrete items by the above items with the exception of acquisition-related expenses and the supplier warranty settlement.  Due to the uncertainty of deductibility and the non-recurring nature of the acquisition-related expenses, no tax benefit is assumed and the negative rate impact has been adjusted from the non-GAAP net income calculation. The supplier warranty settlement income is not taxable in the local jurisdiction, therefore no tax impact has been assumed.

 

Conference Call

The Company will conduct an investor conference call to discuss its unaudited second-quarter 2018 financial results today, July 26, 2018 at 10:00 a.m. ET. The public is invited to listen to the conference call by dialing (877) 407-8293 domestically or (201) 689-8349 for international access. A live webcast of the call will be available in the "Investor Relations" section of www.altramotion.com. Individuals may download charts that will be used during the call at www.altramotion.com under presentations in the Investor Relations section. The charts will be available after earnings are released. A replay of the recorded conference call will be available after the conclusion of the call on July 26 through midnight on August 9, 2018. To listen to the replay, dial (877) 660-6853 domestically or (201) 612-7415 for international access (conference ID # 13681715). A webcast replay also will be available.


Altra Industrial Motion Corp.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Statements of Income Data:

 

Quarter Ended

 

 

 

 

Year to Date Ended

 

 

 

 

In Thousands of Dollars, except per share amounts

 

June 30, 2018

 

 

 

 

June 30, 2017

 

 

 

 

June 30, 2018

 

 

 

 

June 30, 2017

 

 

 

 

 

 

(Unaudited)

 

 

 

 

(Unaudited)

 

 

 

 

(Unaudited)

 

 

 

 

(Unaudited)

 

 

 

 

Net sales

 

$

237,323

 

 

 

 

$

223,357

 

 

 

 

$

477,708

 

 

 

 

$

438,792

 

 

 

 

Cost of sales

 

 

159,068

 

 

 

 

 

151,231

 

 

 

 

 

325,227

 

 

 

 

 

300,499

 

 

 

 

Gross profit

 

$

78,255

 

 

 

 

$

72,126

 

 

 

 

$

152,481

 

 

 

 

$

138,293

 

 

 

 

Gross profit as a percent of net sales

 

 

33.0

%

 

 

 

 

32.3

%

 

 

 

 

31.9

%

 

 

 

 

31.5

%

 

 

 

Selling, general & administrative expenses

 

 

43,382

 

 

 

 

 

41,619

 

 

 

 

 

90,512

 

 

 

 

 

82,003

 

 

 

 

Research and development expenses

 

 

6,258

 

 

 

 

 

6,160

 

 

 

 

 

12,731

 

 

 

 

 

12,383

 

 

 

 

Restructuring and consolidation costs

 

 

566

 

 

 

 

 

1,198

 

 

 

 

 

1,509

 

 

 

 

 

3,096

 

 

 

 

Income from operations

 

$

28,049

 

 

 

 

$

23,149

 

 

 

 

$

47,729

 

 

 

 

$

40,811

 

 

 

 

Income from operations as a percent of net sales

 

 

11.8

%

 

 

 

 

10.4

%

 

 

 

 

10.0

%

 

 

 

 

9.3

%

 

 

 

Loss on settlement of pension plan

 

 

-

 

 

 

 

 

-

 

 

 

 

 

5,086

 

 

 

 

 

-

 

 

 

 

Interest expense, net

 

 

2,065

 

 

 

 

 

2,031

 

 

 

 

 

3,899

 

 

 

 

 

3,736

 

 

 

 

Other non-operating income, net

 

 

(282

)

 

 

 

 

(136

)

 

 

 

 

(428

)

 

 

 

 

(666

)

 

 

 

Loss on extinguishment of convertible debt

 

 

-

 

 

 

 

 

-

 

 

 

 

 

-

 

 

 

 

 

1,797

 

 

 

 

Income before income taxes

 

$

26,266

 

 

 

 

$

21,254

 

 

 

 

$

39,172

 

 

 

 

$

35,944

 

 

 

 

Provision for income taxes

 

 

7,259

 

 

 

 

 

5,870

 

 

 

 

 

11,164

 

 

 

 

 

10,234

 

 

 

 

Income tax rate

 

 

27.6

%

 

 

 

 

27.6

%

 

 

 

 

28.5

%

 

 

 

 

28.5

%

 

 

 

Net income

 

 

19,007

 

 

 

 

 

15,384

 

 

 

 

 

28,008

 

 

 

 

 

25,710

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

28,979

 

 

 

 

 

28,978

 

 

 

 

 

29,085

 

 

 

 

 

28,873

 

 

 

 

Diluted

 

 

29,089

 

 

 

 

 

29,114

 

 

 

 

 

29,245

 

 

 

 

 

29,042

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.66

 

 

 

 

$

0.53

 

 

 

 

$

0.97

 

 

 

 

$

0.89

 

 

 

 

Diluted

 

$

0.65

 

 

 

 

$

0.53

 

 

 

 

$

0.96

 

 

 

 

$

0.89

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of Non-GAAP Income From Operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

$

28,049

 

 

 

 

$

23,149

 

 

 

 

$

47,729

 

 

 

 

$

40,811

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restructuring and consolidation costs

 

 

566

 

 

 

 

 

1,198

 

 

 

 

 

1,509

 

 

 

 

 

3,096

 

 

 

 

Amortization of inventory fair value adjustment

 

 

-

 

 

 

 

 

-

 

 

 

 

 

-

 

 

 

 

 

2,347

 

 

 

 

Supplier warranty settlement

 

 

(1,980

)

 

 

 

 

-

 

 

 

 

 

(1,980

)

 

 

 

 

-

 

 

 

 

Acquisition related expenses

 

 

1,833

 

 

 

 

 

568

 

 

 

 

 

7,241

 

 

 

 

 

1,566

 

 

 

 

Non-GAAP income from operations *

 

$

28,468

 

 

 

 

$

24,915

 

 

 

 

$

54,499

 

 

 

 

$

47,820

 

 

 

 

Non-GAAP Income from operations as a percent of net sales*

 

 

12.0

%

 

 

 

 

11.2

%

 

 

 

 

11.4

%

 

 

 

 

10.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of Non-GAAP Net Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

19,007

 

 

 

 

$

15,384

 

 

 

 

$

28,008

 

 

 

 

$

25,710

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restructuring and consolidation costs

 

 

566

 

 

 

 

 

1,198

 

 

 

 

 

1,509

 

 

 

 

 

3,096

 

 

 

 

Loss on extinguishment of convertible debt

 

 

-

 

 

 

 

 

-

 

 

 

 

 

-

 

 

 

 

 

1,797

 

 

 

 

Supplier warranty settlement

 

 

(1,980

)

 

 

 

 

-

 

 

 

 

 

(1,980

)

 

 

 

 

-

 

 

 

 

Loss on settlement of pension plan

 

 

-

 

 

 

 

 

-

 

 

 

 

 

5,086

 

 

 

 

 

-

 

 

 

 

Amortization of inventory fair value adjustment

 

 

-

 

 

 

 

 

-

 

 

 

 

 

-

 

 

 

 

 

2,347

 

 

 

 

Acquisition related expenses

 

 

1,833

 

 

 

 

 

568

 

 

 

 

 

7,241

 

 

 

 

 

1,566

 

 

 

 

Tax impact of above adjustments

 

 

1,348

 

 

 

 

 

(529

)

 

 

 

 

213

 

 

 

 

 

(2,620

)

 

 

 

Non-GAAP net income *

 

 

20,774

 

 

 

 

 

16,621

 

 

 

 

 

40,077

 

 

 

 

 

31,896

 

 

 

 

Non-GAAP diluted earnings per share *

 

$

0.71

 

 

(1

)

$

0.57

 

 

(2

)

$

1.37

 

 

(3

)

$

1.10

 

 

(4

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) - Tax impact is calculated by multiplying the estimated effective tax rate for the period of 24.2% by restructuring and consolidation costs.  Acquisition related expenses in the quarter are not tax deductible, therefore the tax impact has been eliminated. The supplier warranty settlement income is not taxable in the local jurisdiction; therefore, no tax impact has been assumed.

 

 

 

 

(2) - Tax impact is calculated by multiplying the estimated effective tax rate for the period of 29.9% by the above items.

 

 

 

 

(3) - Tax impact is calculated by multiplying the estimated effective tax rate for the period of 24.2% by restructuring and consolidation costs and the loss on settlement of pension plan.  Acquisition related expenses for the year to date period are not tax deductible, therefore the tax impact has been eliminated. The supplier warranty settlement income is not taxable in the local jurisdiction; therefore, no tax impact has been assumed.

 

 

 

 

(4) - Tax impact is calculated by multiplying the estimated effective tax rate for the period of 29.8% by the above items.

 

 

 

 

 

 


Consolidated Balance Sheets

 

 

 

 

 

 

 

 

In Thousands of Dollars

 

June 30, 2018

 

 

December 31, 2017

 

 

 

(unaudited)

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

38,114

 

 

$

51,994

 

Trade receivables, net

 

 

146,419

 

 

 

135,499

 

Inventories

 

 

149,592

 

 

 

145,611

 

Income tax receivable

 

 

1,832

 

 

 

6,634

 

Prepaid expenses and other current assets

 

 

21,012

 

 

 

17,344

 

Assets held for sale

 

 

701

 

 

 

1,081

 

Total current assets

 

 

357,670

 

 

 

358,163

 

Property, plant and equipment, net

 

 

189,328

 

 

 

191,918

 

Intangible assets, net

 

 

151,639

 

 

 

159,613

 

Goodwill

 

 

203,292

 

 

 

206,040

 

Deferred income taxes

 

 

1,592

 

 

 

2,608

 

Other non-current assets, net

 

 

3,031

 

 

 

2,315

 

Total assets

 

$

906,552

 

 

$

920,657

 

 

 

 

 

 

 

 

 

 

Liabilities and stockholders' equity

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

$

62,935

 

 

$

68,014

 

Accrued payroll

 

 

27,066

 

 

 

32,091

 

Accruals and other current liabilities

 

 

38,475

 

 

 

32,921

 

Income tax payable

 

 

9,032

 

 

 

9,082

 

Current portion of long-term debt

 

 

1,364

 

 

 

384

 

Total current liabilities

 

 

138,872

 

 

 

142,492

 

Long-term debt - less current portion

 

 

260,024

 

 

 

275,587

 

Deferred income taxes

 

 

50,214

 

 

 

52,250

 

Pension liabilities

 

 

24,390

 

 

 

25,038

 

Long term taxes payable

 

 

5,418

 

 

 

6,322

 

Other long-term liabilities

 

 

14,742

 

 

 

22,263

 

Total stockholders' equity

 

 

412,892

 

 

 

396,705

 

Total liabilities, and stockholders' equity

 

$

906,552

 

 

$

920,657

 

 

 

 

 

 

 

 

 

 

Reconciliation to operating working capital:

 

 

 

 

 

 

 

 

Trade receivables, net

 

 

146,419

 

 

 

135,499

 

Inventories

 

 

149,592

 

 

 

145,611

 

Accounts payable

 

 

(62,935

)

 

 

(68,014

)

Operating working capital *

 

$

233,076

 

 

$

213,096

 

 


 

 

Year to Date Ended

 

 

 

June 30, 2018

 

 

June 30, 2017

 

 

 

(Unaudited)

 

 

(Unaudited)

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

Net income

 

$

28,008

 

 

$

25,710

 

Adjustments to reconcile net income to net cash flows:

 

 

 

 

 

 

 

 

Depreciation

 

 

13,779

 

 

 

12,930

 

Amortization of intangible assets

 

 

4,900

 

 

 

4,685

 

Amortization of deferred financing costs

 

 

299

 

 

 

299

 

Loss on foreign currency, net

 

 

4

 

 

 

132

 

Loss on settlement of pension plan

 

 

5,086

 

 

 

-

 

Loss/(Gain) on disposal / impairment of fixed assets

 

 

298

 

 

 

(74

)

Loss on extinguishment of debt

 

 

-

 

 

 

1,797

 

Stock based compensation

 

 

2,680

 

 

 

3,153

 

Amortization of inventory fair value adjustment

 

 

-

 

 

 

2,347

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

Trade receivables

 

 

(12,971

)

 

 

(12,812

)

Inventories

 

 

(5,478

)

 

 

(1,473

)

Accounts payable and accrued liabilities

 

 

2,024

 

 

 

(9,212

)

Other current assets and liabilities

 

 

(3,956

)

 

 

(1,146

)

Other operating assets and liabilities

 

 

(5,564

)

 

 

(380

)

Net cash provided by operating activities

 

 

29,109

 

 

 

25,956

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

Purchase of property, plant and equipment

 

 

(14,936

)

 

 

(14,416

)

Working capital settlement from prior year acquisitions

 

 

-

 

 

 

2,883

 

Acquisition of Aluminum Die Casting, S.r.L.

 

 

(2,663

)

 

 

-

 

Net cash used in investing activities

 

 

(17,599

)

 

 

(11,533

)

Cash flows from financing activities

 

 

 

 

 

 

 

 

Payments on Revolving Credit Facility

 

 

(24,449

)

 

 

(24,054

)

Dividend payments

 

 

(9,972

)

 

 

(8,300

)

Borrowing under Revolving Credit Facility

 

 

11,000

 

 

 

5,000

 

Payments of equipment, working capital notes, mortgages and other debt

 

 

(568

)

 

 

(505

)

Cash paid to redeem Convertible Notes

 

 

 

 

 

(954

)

Shares surrendered for tax withholding

 

 

(1,490

)

 

 

(386

)

Net cash used in financing activities

 

 

(25,479

)

 

 

(29,199

)

Effect of exchange rate changes on cash and cash equivalents

 

 

89

 

 

 

4,639

 

Net change in cash and cash equivalents

 

 

(13,880

)

 

 

(10,137

)

Cash and cash equivalents at beginning of year

 

 

51,994

 

 

 

69,118

 

Cash and cash equivalents at end of period

 

$

38,114

 

 

$

58,981

 

Reconciliation to free cash flow:

 

 

 

 

 

 

 

 

Net cash flows from operating activities

 

 

29,109

 

 

 

25,956

 

Purchase of property, plant and equipment

 

 

(14,936

)

 

 

(14,416

)

Free cash flow*

 

$

14,173

 

 

$

11,540

 

 


Selected Segment Data

 

Quarter Ended

June 30

 

 

Year to Date Ended June 30

 

In Thousands of Dollars, except per share amount

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Net Sales:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Couplings, Clutches & Brakes

 

$

122,734

 

 

$

110,969

 

 

$

242,907

 

 

$

217,201

 

Electromagnetic Clutches & Brakes

 

 

65,136

 

 

 

65,281

 

 

 

134,243

 

 

 

129,159

 

Gearing

 

 

51,567

 

 

 

49,149

 

 

 

105,452

 

 

 

96,177

 

Eliminations

 

 

(2,114

)

 

 

(2,042

)

 

 

(4,894

)

 

 

(3,745

)

Total

 

$

237,323

 

 

$

223,357

 

 

$

477,708

 

 

$

438,792

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Couplings, Clutches & Brakes

 

$

18,740

 

 

$

12,007

 

 

$

32,160

 

 

$

20,352

 

Electromagnetic Clutches & Brakes

 

 

8,076

 

 

 

8,163

 

 

 

16,744

 

 

 

15,756

 

Gearing

 

 

6,399

 

 

 

6,590

 

 

 

12,515

 

 

 

12,115

 

Corporate

 

 

(4,600

)

 

 

(2,413

)

 

 

(12,181

)

 

 

(4,316

)

Restructuring and consolidation costs

 

 

(566

)

 

 

(1,198

)

 

 

(1,509

)

 

 

(3,096

)

Total

 

$

28,049

 

 

$

23,149

 

 

$

47,729

 

 

$

40,811

 

About Altra Industrial Motion Corp.

Altra Industrial Motion Corp., through its subsidiaries, is a leading global designer, producer and marketer of a wide range of electromechanical power transmission and motion control products. The Company brings together strong brands covering over 40 product lines with production facilities in twelve countries. Altra's leading brands include Ameridrives Couplings, Bauer Gear Motor, Bibby Turboflex, Boston Gear, Delroyd Worm Gear, Formsprag Clutch, Guardian Couplings, Huco, Industrial Clutch, Inertia Dynamics, Kilian Manufacturing, Lamiflex Couplings, Marland Clutch, Matrix, Nuttall Gear, Stieber Clutch, Stromag, Svendborg Brakes, TB Wood's, Twiflex, Warner Electric, Warner Linear, and Wichita Clutch.

The Altra Industrial Motion Corp. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=4038.

* Discussion of Non-GAAP Financial Measures

As used in this release and the accompanying slides posted on the Company's website, non-GAAP diluted earnings per share, non-GAAP income from operations and non-GAAP net income are each calculated using either net income or income from operations that excludes acquisition related costs, restructuring costs, and other income or charges that management does not consider to be directly related to the Company's core operating performance. Non-GAAP gross profit is calculated using gross profit that excludes income or charges that management does not consider to be directly related to the Company's core operating performance. Non-GAAP diluted earnings per share is calculated by dividing non-GAAP 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 net cash flows from operating activities. Non-GAAP operating working capital is calculated by deducting accounts payable from net trade receivables plus inventories.


Altra believes that the presentation of non-GAAP net income, non-GAAP income from operations, non-GAAP gross profit, non-GAAP diluted earnings per share, non-GAAP free cash flow and non-GAAP operating working capital provides important supplemental information to management and investors regarding financial and business trends relating to the Company's financial condition and results of operations.

Additional Information

This communication does not constitute an offer to buy, or a solicitation of an offer to sell, any securities of Fortive Corporation (“Fortive”), Stevens Holding Company, Inc. (“Newco”) or Altra Industrial Motion Corp. (“Altra”). In connection with the proposed transaction, Newco filed a registration statement on Form S-4/S-1 containing a prospectus and Altra filed a registration statement on Form S-4 containing a prospectus (together, the “registration statements”) and a preliminary proxy statement on Schedule 14A with the U.S. Securities and Exchange Commission (the “SEC”), in each case on May 8, 2018. Each of Altra and Newco have filed, and expect to file, amendments to these filings before they become effective. Investors and security holders are urged to read the registration statements and Altra’s preliminary proxy statement and any further amendments to these filings when they become available as well as any other relevant documents to be filed with the SEC when they become available because such documents contain or will contain important information about Altra, Fortive, Newco and the proposed transaction. Altra’s preliminary proxy statement, the registration statements and any further amendments to these filings as well as any other relevant documents relating to the proposed transaction can be obtained free of charge from the SEC’s website at www.sec.gov. Such documents can also be obtained free of charge from Fortive upon written request to Fortive Corporation, Investor Relations, 6920 Seaway Blvd., Everett, WA 98203, or by calling (425) 446-5000 or upon written request to Altra Industrial Motion Corp., Investor Relations, 300 Granite St., Suite 201, Braintree, MA 02184, or by calling (781) 917-0527.

Forward-Looking Statements

All statements, other than statements of historical fact included in this release 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, the statements under “Business Outlook,” our expectations regarding our tax rate, our expectations regarding our acquisition of the Fortive A&S businesses, and the Company’s guidance for full year 2018.

 

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) risks associated with compliance with environmental laws, (14) the ability to successfully execute, manage and integrate key acquisitions and mergers, (15) failure to obtain or protect intellectual property rights, (16) risks associated with impairment of goodwill or intangibles assets, (17) failure of operating equipment or information technology infrastructure, (18) risks associated with our debt leverage and operating covenants under our debt instruments, (19) risks associated with restrictions contained in our Credit Facility, (20) risks associated with compliance with tax laws, (21) risks associated with the global recession and volatility and disruption in the global financial markets, (22) risks associated with implementation of our ERP system, (23) risks associated with the Svendborg and Stromag acquisitions and integration and other acquisitions, (24) risks associated with certain minimum purchase agreements we have with suppliers, (25) risks associated with our exposure to variable interest rates and foreign currency exchange rates, (26) risks associated with interest rate swap contracts, (27) risks associated with our exposure to renewable energy markets, (28) risks related to regulations regarding conflict minerals, (29) risks related to restructuring and plant consolidations, (30) risks related to our pending acquisition of Fortive A&S, including (a) the possibility that the conditions to the consummation of the proposed transaction will not be satisfied, (b) failure to obtain, delays in obtaining or adverse conditions related to obtaining stockholder or regulatory approvals, (c) the ability to obtain the anticipated tax treatment of the proposed transaction and related proposed transactions, (d) risks relating to any unforeseen changes to or the effects on liabilities, future capital expenditures, revenue, expenses, synergies, indebtedness, financial condition, losses and future prospects, (e) the possibility that we may be unable to achieve expected synergies and operating efficiencies in connection with the proposed transaction within the expected time-frames or at all and to successfully integrate Fortive A&S, (f) expected or targeted future financial and operating performance and results, (g) operating costs, customer loss and business disruption (including, without limitation,


difficulties in maintain relationships with employees, customers, clients or suppliers) being greater than expected following the proposed transaction, (h) failure to consummate or delay in consummating the proposed transaction for other reasons, (i) our ability to retain key executives and employees, (j) slowdowns or downturns in economic conditions generally and in the markets Fortive A&S’s businesses participate specifically, (k) slowdowns or downturns in the industrial economy, (l) lower than expected investments and capital expenditures in equipment that utilizes components produced by us or Fortive A&S, (m) lower than expected demand for our or Fortive A&S’s repair and replacement businesses, (n) our relationships with strategic partners, (o) the presence of competitors with greater financial resources than us and their strategic response to our products, (p) our ability to offset increased commodity and labor costs with increased prices, (q) our ability to successfully integrate the merged assets and the associated technology and achieve operational efficiencies, and (r) the integration of Fortive A&S being more difficult, time-consuming or costly than expected  and (31) 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 SEC or in materials incorporated therein by reference. Except as required by applicable law, Altra Industrial Motion Corp. does not intend to, update or alter its forward looking statements, whether as a result of new information, future events or otherwise. AIMC-E

 

Participants in the Solicitation

 

This communication is not a solicitation of a proxy from any security holder of Altra. However, Fortive, Altra and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from stockholders of Altra in connection with the proposed transaction under the rules of the SEC. Information about the directors and executive officers of Fortive may be found in its Annual Report on Form 10-K filed with the SEC on February 28, 2018 and its definitive proxy statement relating to its 2018 Annual Meeting filed with the SEC on April 16, 2018. Information about the directors and executive officers of Altra may be found in its Annual Report on Form 10-K filed with the SEC on February 23, 2018, its definitive proxy statement relating to its 2018 Annual Meeting filed with the SEC on March 23, 2018 and its preliminary proxy statement relating to the proposed transaction filed with the SEC on May 8, 2018.

CONTACT:

 

Altra Industrial Motion Corp.

Christian Storch, Chief Financial Officer

781-917-0541

Christian.storch@altramotion.com