Evoqua Water Technologies Reports Fourth Quarter and Full Year 2020 Results
Fourth Quarter 2020 Financial Highlights:
•Consolidated revenue of $383.9 million, down 6.9% compared to the prior year period; organic revenue down 1.7%
•Net income of $31.1 million compared to net income of $1.9 million in the prior year period
•Adjusted EBITDA of $75.6 million, a decline of 4.7% compared to the prior year period
Full Year 2020 Financial Highlights:
•Consolidated revenues of $1.43 billion, down 1.0% compared to the prior year; organic revenue increased 1.5%
•Net income of $114.4 million compared to a net loss of $8.5 million in the prior year
•Adjusted EBITDA of $239.6 million, up 2.0% from the prior year
•Net debt leverage ratio improved to 3.0x Adjusted EBITDA
PITTSBURGH -- Evoqua Water Technologies (NYSE:AQUA), an industry leader in mission-critical water treatment solutions, today reported results for its fourth quarter and fiscal year ended September 30, 2020.
Revenue for the fourth quarter of fiscal 2020 was $383.9 million compared to $412.5 million in the prior year period, a decrease of 6.9% or $28.6 million. The change in revenue was driven primarily by the net impact of acquisitions and the divestiture of the Memcor product line, which resulted in a net decrease in revenue of 5.8% or $24.0 million, in addition to a decline in organic revenue of 1.7% or $6.9 million. The revenue decline was partially offset by a favorable change in foreign currency translation of $2.3 million, an increase of 0.6% as compared to the prior year period. Net income for the quarter was $31.1 million, resulting in diluted earnings per share (“EPS”) of $0.26 as compared to net income of $1.9 million and diluted EPS of $0.01 in the prior year period. The change in net income for the quarter as compared to the prior year period was predominately impacted by a favorable change in non-cash foreign currency translation of $13.5 million, lower tax expense of $6.7 million, and $5.4 million of lower interest expense. Adjusted EBITDA for the quarter was $75.6 million as compared to $79.3 million in the prior year period. The decline in Adjusted EBITDA was primarily driven by the net impact in the period of the Memcor product line divestiture, partly offset by better margins and cost containment measures. Adjusted EPS was $0.29 for the quarter as compared to $0.17 in the prior year period, driven by lower tax and interest expense. See the “Use of Non-GAAP Measures” section below for additional information regarding Adjusted EBITDA and Adjusted EPS.
For fiscal 2020, revenue was $1.43 billion compared to $1.44 billion in the prior year, a decline of 1.0% or $14.9 million. The change in revenue was driven by the net impact of acquisitions and the divestiture of the Memcor product line, which resulted in a net decrease in revenue of 2.5% or $35.4 million, offset by an increase in organic revenue of 1.5% or $22.2 million. The revenue decline was also partially related to an overall unfavorable change in foreign currency translation of $1.7 million, a decrease of 0.1% as compared to the prior year. Net income for the year was $114.4 million, resulting in diluted EPS of $0.94 as compared to a net loss of $8.5 million and diluted EPS of $(0.08) in the prior year. The change in net income for the full year includes a net pre-tax benefit from the divestiture of the Memcor product line in the current year of $57.7 million, favorable change in non-cash foreign currency translation of $20.8 million, and a net decline in transaction costs, stock based compensation, restructuring and other charges of $27.2 million. For fiscal 2020, Adjusted EBITDA was $239.6 million as compared to Adjusted EBITDA of $235.0 million in the prior year, an increase of $4.6 million or 2.0%. The increase in Adjusted EBITDA for fiscal 2020 as compared to the prior year was driven primarily by improved gross margins and operational efficiencies, including temporary cost controls, as the Company has navigated the economic uncertainties presented by COVID-19. These favorable impacts more than offset the decline in Adjusted EBITDA generated by the divestiture of the Memcor product line. Adjusted EPS for the year was $0.67 as compared to $0.41 in the prior year, driven by the factors discussed as well as lower tax and interest expense. Net debt leverage ratio improved year over year to 3.0x Adjusted EBITDA from 3.8x Adjusted EBITDA. This improvement was generated by strong cash generation from the Company’s core operations as well as cash generated from the divestiture of the Memcor product line.
“I am very pleased with the performance delivered in the fourth quarter and throughout an unprecedented year of 2020, as we maintained uninterrupted service to our customers and executed on our strategy while addressing the challenges presented by COVID-19. We prioritized our efforts on protecting the health and safety of our employees and maximizing customer facing operations while delivering year-over-year improvements across most key financial metrics. I am confident that the actions taken result in an Evoqua that is stronger, more nimble and more effective as we enter 2021,” said Mr. Ron Keating, Evoqua’s CEO.
Mr. Keating continued, “Our solid performance throughout the year reflects the resiliency of our business and the balanced strength from the diverse end markets that we serve. We were pleased to see organic orders grow double digits in the fourth quarter as a result of increasing demand for our outsourced water solutions that provide long term, steady and recurring
The following information was filed by Evoqua Water Technologies Corp. (AQUA) on Tuesday, November 17, 2020 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.