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October 25, 2018
|
· |
Revenues of $689 million increased 6% over the prior year
|
· |
Reported net income of $72 million compared to prior year of $28 million
|
· |
Adjusted EBITDA of $182 million grew 11% over the prior year with a margin of 26.4%, an improvement of 100 basis points
|
· |
Free cash flow of $93 million compared to prior year of $54 million
|
· |
Completed debt repayment of $152 million from available cash on hand, bringing total year debt pay down to $262 million
|
· |
Reaffirming full year 2018 Adjusted EBITDA guidance range of $690 million to $705 million
|
- |
Orders of $313 million, up 7% compared to the prior year, and up 8% excluding the impact of FX
|
- |
Revenues of $320 million, up 11% compared to the prior year, and up 13% excluding the impact of FX
|
- |
Segment Adjusted EBITDA of $72 million, up 14% from $63 million in the prior year
|
- |
Segment Adjusted EBITDA margin of 22.5%, up 60 basis points from 21.9% in the prior year, driven by the impacts of organic volume growth, pricing and targeted cost actions offsetting the decretive impacts of the Runtech acquisition and tariffs.
|
- |
Orders of $261 million, up 4% compared to the prior year, and up 5% excluding the impact of FX
|
- |
Upstream Energy orders of $167 million, up 9% compared to the prior year excluding the impact of FX
|
- |
Revenues of $299 million, down 1% compared to the prior year, and flat excluding the impact of FX
|
- |
Upstream Energy revenues of $186 million, up 6% compared to the prior year excluding the impact of FX
|
- |
Segment Adjusted EBITDA of $95 million, down 4% from $99 million in the prior year
|
- |
Segment Adjusted EBITDA margin of 31.8%, down 90 basis points from 32.7% in the prior year, driven by the expected decrease in revenues in the downstream business due to timing of large project shipments
|
- |
Orders of $74 million, up 20% compared to the prior year, and up 21% excluding the impact of FX
|
- |
Revenues of $71 million, up 18% compared to the prior year, and up 19% excluding the impact of FX
|
- |
Segment Adjusted EBITDA of $21 million, up 22% from $17 million in the prior year
|
- |
Segment Adjusted EBITDA margin of 29.1%, up 100 basis points from the prior year, driven primarily by strong organic volume growth due to ongoing design wins and new product innovation
|
For the Three
|
For the Nine
|
|||||||||||||||
Month Period Ended
|
Month Period Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
Revenues
|
$
|
689.3
|
$
|
649.6
|
$
|
1,977.1
|
$
|
1,710.4
|
||||||||
Cost of sales
|
426.9
|
395.7
|
1,233.6
|
1,066.0
|
||||||||||||
Gross Profit
|
262.4
|
253.9
|
743.5
|
644.4
|
||||||||||||
Selling and administrative expenses
|
107.7
|
111.0
|
330.4
|
338.9
|
||||||||||||
Amortization of intangible assets
|
31.0
|
29.5
|
93.4
|
87.6
|
||||||||||||
Other operating expense, net
|
6.0
|
17.4
|
10.8
|
186.7
|
||||||||||||
Operating Income
|
117.7
|
96.0
|
308.9
|
31.2
|
||||||||||||
Interest expense
|
24.4
|
30.1
|
76.5
|
115.4
|
||||||||||||
Loss on extinguishment of debt
|
0.9
|
34.1
|
1.0
|
84.5
|
||||||||||||
Other income, net
|
(2.4
|
)
|
(0.6
|
)
|
(6.7
|
)
|
(2.4
|
)
|
||||||||
Income (Loss) Before Income Taxes
|
94.8
|
32.4
|
238.1
|
(166.3
|
)
|
|||||||||||
Provision (benefit) for income taxes
|
22.6
|
4.4
|
63.2
|
(41.2
|
)
|
|||||||||||
Net Income (Loss)
|
72.2
|
28.0
|
174.9
|
(125.1
|
)
|
|||||||||||
Less: Net income attributable to noncontrolling interests
|
-
|
-
|
-
|
0.1
|
||||||||||||
Net Income (Loss) Attributable to Gardner Denver Holdings, Inc.
|
$
|
72.2
|
$
|
28.0
|
$
|
174.9
|
$
|
(125.2
|
)
|
|||||||
Basic income (loss) per share
|
$
|
0.36
|
$
|
0.14
|
$
|
0.87
|
$
|
(0.71
|
)
|
|||||||
Diluted income (loss) per share
|
$
|
0.35
|
$
|
0.13
|
$
|
0.83
|
$
|
(0.71
|
)
|
September 30,
|
December 31,
|
|||||||
2018
|
2017
|
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
269.0
|
$
|
393.3
|
||||
Accounts receivable, net of allowance for doubtful accounts
|
||||||||
of $19.1 and $18.7, respectively
|
525.0
|
536.3
|
||||||
Inventories
|
550.1
|
494.5
|
||||||
Other current assets
|
63.4
|
39.5
|
||||||
Total current assets
|
1,407.5
|
1,463.6
|
||||||
Property, plant and equipment, net of accumulated depreciation
|
||||||||
of $238.7 and $203.8, respectively
|
346.9
|
363.2
|
||||||
Goodwill
|
1,268.4
|
1,227.6
|
||||||
Other intangible assets, net
|
1,356.8
|
1,431.2
|
||||||
Deferred tax assets
|
1.1
|
1.0
|
||||||
Other assets
|
135.7
|
134.6
|
||||||
Total assets
|
$
|
4,516.4
|
$
|
4,621.2
|
||||
Liabilities and Stockholders’ Equity
|
||||||||
Current liabilities:
|
||||||||
Short-term borrowings and current maturities of long-term debt
|
$
|
7.9
|
$
|
20.9
|
||||
Accounts payable
|
320.0
|
269.7
|
||||||
Accrued liabilities
|
258.9
|
271.2
|
||||||
Total current liabilities
|
586.8
|
561.8
|
||||||
Long-term debt, less current maturities
|
1,747.4
|
2,019.3
|
||||||
Pensions and other postretirement benefits
|
90.5
|
99.8
|
||||||
Deferred income taxes
|
279.3
|
237.5
|
||||||
Other liabilities
|
189.0
|
226.0
|
||||||
Total liabilities
|
2,893.0
|
3,144.4
|
||||||
Stockholders’ equity:
|
||||||||
Common stock, $0.01 par value; 1,000,000,000 shares authorized;
|
||||||||
200,876,956 and 198,377,237 shares issued at September 30, 2018
|
||||||||
and December 31, 2017, respectively
|
2.0
|
2.0
|
||||||
Capital in excess of par value
|
2,280.8
|
2,275.4
|
||||||
Accumulated deficit
|
(403.2
|
)
|
(577.8
|
)
|
||||
Accumulated other comprehensive loss
|
(226.4
|
)
|
(199.8
|
)
|
||||
Treasury stock at cost; 1,937,480 and 2,159,266 shares at September 30, 2018
|
||||||||
and December 31, 2017, respectively
|
(29.8
|
)
|
(23.0
|
)
|
||||
Total stockholders’ equity
|
1,623.4
|
1,476.8
|
||||||
Total liabilities and stockholders’ equity
|
$
|
4,516.4
|
$
|
4,621.2
|
For the
|
For the
|
|||||||
Nine Month
|
Nine Month
|
|||||||
Period Ended
|
Period Ended
|
|||||||
September 30,
|
September 30,
|
|||||||
2018
|
2017
|
|||||||
Cash Flows From Operating Activities:
|
||||||||
Net income (loss)
|
$
|
174.9
|
$
|
(125.1
|
)
|
|||
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
||||||||
Amortization of intangible assets
|
93.4
|
87.6
|
||||||
Depreciation in cost of sales
|
33.9
|
33.2
|
||||||
Depreciation in selling and administrative expenses
|
7.3
|
6.1
|
||||||
Stock-based compensation expense
|
6.1
|
166.0
|
||||||
Foreign currency transaction (gains) losses, net
|
(0.6
|
)
|
6.3
|
|||||
Net (gain) loss on asset dispositions
|
(1.1
|
)
|
2.0
|
|||||
Loss on extinguishment of debt
|
1.0
|
84.5
|
||||||
Deferred income taxes
|
27.5
|
(68.1
|
)
|
|||||
Changes in assets and liabilities:
|
||||||||
Receivables
|
10.5
|
(65.9
|
)
|
|||||
Inventories
|
(44.7
|
)
|
(36.4
|
)
|
||||
Accounts payable
|
57.2
|
39.8
|
||||||
Accrued liabilities
|
(34.1
|
)
|
(19.8
|
)
|
||||
Other assets and liabilities, net
|
(33.0
|
)
|
(26.3
|
)
|
||||
Net cash provided by operating activities
|
298.3
|
83.9
|
||||||
Cash Flows From Investing Activities:
|
||||||||
Capital expenditures
|
(32.1
|
)
|
(36.4
|
)
|
||||
Net cash paid in business combinations
|
(113.6
|
)
|
(18.8
|
)
|
||||
Proceeds from the termination of derivatives
|
-
|
6.2
|
||||||
Disposals of property, plant and equipment
|
3.1
|
5.9
|
||||||
Net cash used in investing activities
|
(142.6
|
)
|
(43.1
|
)
|
||||
Cash Flows From Financing Activities:
|
||||||||
Principal payments on long-term debt
|
(262.4
|
)
|
(2,872.2
|
)
|
||||
Premium paid on extinguishment of senior notes
|
-
|
(29.7
|
)
|
|||||
Proceeds from long-term debt
|
-
|
2,010.7
|
||||||
Proceeds from the issuance of common stock, net of share issuance costs
|
-
|
893.3
|
||||||
Purchase of treasury stock
|
(16.7
|
)
|
(2.6
|
)
|
||||
Proceeds from stock option exercises
|
6.3
|
-
|
||||||
Purchase of shares from noncontrolling interests
|
-
|
(5.2
|
)
|
|||||
Payments of debt issuance costs
|
-
|
(2.9
|
)
|
|||||
Other
|
-
|
0.4
|
||||||
Net cash used in financing activities
|
(272.8
|
)
|
(8.2
|
)
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
(7.2
|
)
|
14.6
|
|||||
Net (decrease) increase in cash and cash equivalents
|
(124.3
|
)
|
47.2
|
|||||
Cash and cash equivalents, beginning of period
|
393.3
|
255.8
|
||||||
Cash and cash equivalents, end of period
|
$
|
269.0
|
$
|
303.0
|
For the Three
|
For the Nine
|
|||||||||||||||
Month Period Ended
|
Month Period Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
Net Income (Loss)
|
$
|
72.2
|
$
|
28.0
|
$
|
174.9
|
$
|
(125.1
|
)
|
|||||||
Basic Earnings (Loss) Per Share (As Reported)1
|
$
|
0.36
|
$
|
0.14
|
$
|
0.87
|
$
|
(0.71
|
)
|
|||||||
Diluted Earnings (Loss) Per Share (As Reported)1
|
$
|
0.35
|
$
|
0.13
|
$
|
0.83
|
$
|
(0.71
|
)
|
|||||||
Plus:
|
||||||||||||||||
Provision (benefit) for income taxes
|
22.6
|
4.4
|
63.2
|
(41.2
|
)
|
|||||||||||
Amortization of acquisition related intangible assets
|
27.2
|
27.3
|
82.8
|
80.4
|
||||||||||||
Sponsor fees and expenses
|
-
|
-
|
-
|
17.3
|
||||||||||||
Restructuring and related business transformation costs
|
12.3
|
6.3
|
25.2
|
20.5
|
||||||||||||
Acquisition related expenses and non-cash charges
|
2.8
|
1.2
|
13.1
|
3.1
|
||||||||||||
Environmental remediation loss reserve
|
-
|
-
|
-
|
0.9
|
||||||||||||
Expenses related to public stock offerings
|
0.3
|
0.5
|
2.2
|
3.6
|
||||||||||||
Establish public company financial reporting compliance
|
1.3
|
3.8
|
3.2
|
7.2
|
||||||||||||
Stock-based compensation
|
1.1
|
9.8
|
2.9
|
166.0
|
||||||||||||
Foreign currency transaction (gains) losses, net
|
(0.8
|
)
|
1.7
|
(0.6
|
)
|
6.3
|
||||||||||
Loss on extinguishment of debt
|
0.9
|
34.1
|
1.0
|
84.5
|
||||||||||||
Shareholder litigation settlement recoveries
|
-
|
-
|
(4.5
|
)
|
-
|
|||||||||||
Other adjustments
|
0.7
|
1.4
|
0.4
|
3.5
|
||||||||||||
Minus:
|
||||||||||||||||
Income tax provision, as adjusted
|
37.9
|
33.3
|
87.7
|
77.8
|
||||||||||||
Adjusted Net Income
|
$
|
102.7
|
$
|
85.2
|
$
|
276.1
|
$
|
149.2
|
||||||||
Adjusted Basic Earnings Per Share
|
$
|
0.51
|
$
|
0.42
|
$
|
1.37
|
$
|
0.85
|
||||||||
Adjusted Diluted Earnings Per Share2
|
$
|
0.49
|
$
|
0.41
|
$
|
1.32
|
$
|
0.82
|
||||||||
Average shares outstanding:
|
||||||||||||||||
Basic, as reported
|
201.9
|
201.3
|
201.8
|
175.7
|
||||||||||||
Diluted, as reported3
|
209.1
|
208.1
|
209.6
|
175.7
|
||||||||||||
Adjusted diluted2
|
209.1
|
208.1
|
209.6
|
180.9
|
For the Three
|
For the Nine
|
||||||||||||||||
Month Period Ended
|
Month Period Ended
|
||||||||||||||||
September 30,
|
September 30,
|
||||||||||||||||
2018
|
2017
|
2018
|
2017
|
||||||||||||||
Net Income (Loss)
|
$
|
72.2
|
$
|
28.0
|
$
|
174.9
|
$
|
(125.1
|
)
|
||||||||
Plus:
|
|||||||||||||||||
Interest expense
|
24.4
|
30.1
|
76.5
|
115.4
|
|||||||||||||
Provision (benefit) for income taxes
|
22.6
|
4.4
|
63.2
|
(41.2
|
)
|
||||||||||||
Depreciation expense
|
13.4
|
13.9
|
41.2
|
39.3
|
|||||||||||||
Amortization expense
|
31.0
|
29.5
|
93.4
|
87.6
|
|||||||||||||
Sponsor fees and expenses
|
-
|
-
|
-
|
17.3
|
|||||||||||||
Restructuring and related business transformation costs
|
12.3
|
6.3
|
25.2
|
20.5
|
|||||||||||||
Acquisition related expenses and non-cash charges
|
2.8
|
1.2
|
13.1
|
3.1
|
|||||||||||||
Environmental remediation loss reserve
|
-
|
-
|
-
|
0.9
|
|||||||||||||
Expenses related to public stock offerings
|
0.3
|
0.5
|
2.2
|
3.6
|
|||||||||||||
Establish public company financial reporting compliance
|
1.3
|
3.8
|
3.2
|
7.2
|
|||||||||||||
Stock-based compensation
|
1.1
|
9.8
|
2.9
|
166.0
|
|||||||||||||
Foreign currency transaction (gains) losses, net
|
(0.8
|
)
|
1.7
|
(0.6
|
)
|
6.3
|
|||||||||||
Loss on extinguishment of debt
|
0.9
|
34.1
|
1.0
|
84.5
|
|||||||||||||
Shareholder litigation settlement recoveries
|
-
|
-
|
(4.5
|
)
|
-
|
||||||||||||
Other adjustments
|
0.7
|
1.4
|
0.4
|
3.5
|
|||||||||||||
Adjusted EBITDA
|
$
|
182.2
|
$
|
164.7
|
$
|
492.1
|
$
|
388.9
|
|||||||||
Minus:
|
|||||||||||||||||
Interest expense
|
$
|
24.4
|
$
|
30.1
|
$
|
76.5
|
$
|
115.4
|
|||||||||
Income tax provision, as adjusted
|
37.9
|
33.3
|
87.7
|
77.8
|
|||||||||||||
Depreciation expense
|
13.4
|
13.9
|
41.2
|
39.3
|
|||||||||||||
Amortization of non-acquisition related intangible assets
|
3.8
|
2.2
|
10.6
|
7.2
|
|||||||||||||
Adjusted Net Income
|
$
|
102.7
|
$
|
85.2
|
$
|
276.1
|
$
|
149.2
|
|||||||||
Free Cash Flow
|
|||||||||||||||||
Cash flows - operating activities
|
$
|
103.8
|
$
|
63.9
|
$
|
298.3
|
$
|
83.9
|
|||||||||
Minus:
|
|||||||||||||||||
Capital expenditures
|
11.3
|
9.6
|
32.1
|
36.4
|
|||||||||||||
Free Cash Flow
|
$
|
92.5
|
$
|
54.3
|
$
|
266.2
|
$
|
47.5
|
For the Three
|
For the Nine
|
|||||||||||||||
Month Period Ended
|
Month Period Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
Revenue
|
||||||||||||||||
Industrials
|
$
|
320.0
|
$
|
288.2
|
$
|
965.7
|
$
|
819.0
|
||||||||
Energy
|
298.8
|
301.6
|
814.1
|
719.4
|
||||||||||||
Medical
|
70.5
|
59.8
|
197.3
|
172.0
|
||||||||||||
Total Revenue
|
$
|
689.3
|
$
|
649.6
|
$
|
1,977.1
|
$
|
1,710.4
|
||||||||
Segment Adjusted EBITDA
|
||||||||||||||||
Industrials
|
$
|
72.1
|
$
|
63.1
|
$
|
210.0
|
$
|
173.7
|
||||||||
Energy
|
94.9
|
98.6
|
242.5
|
199.2
|
||||||||||||
Medical
|
20.5
|
16.8
|
54.4
|
46.9
|
||||||||||||
Total Segment Adjusted EBITDA
|
$
|
187.5
|
$
|
178.5
|
$
|
506.9
|
$
|
419.8
|
||||||||
Less items to reconcile Segment Adjusted EBITDA to
|
||||||||||||||||
Income (Loss) Before Income Taxes:
|
||||||||||||||||
Corporate expenses not allocated to segments
|
$
|
5.3
|
$
|
13.8
|
$
|
14.8
|
$
|
30.9
|
||||||||
Interest expense
|
24.4
|
30.1
|
76.5
|
115.4
|
||||||||||||
Depreciation and amortization expense
|
44.4
|
43.5
|
134.6
|
126.9
|
||||||||||||
Sponsor fees and expenses
|
-
|
-
|
-
|
17.3
|
||||||||||||
Restructuring and related business transformation costs
|
12.3
|
6.3
|
25.2
|
20.5
|
||||||||||||
Acquisition related expenses and non-cash charges
|
2.8
|
1.2
|
13.1
|
3.1
|
||||||||||||
Environmental remediation loss reserve
|
-
|
-
|
-
|
0.9
|
||||||||||||
Expenses related to public stock offerings
|
0.3
|
0.5
|
2.2
|
3.6
|
||||||||||||
Establish public company financial reporting compliance
|
1.3
|
3.8
|
3.2
|
7.2
|
||||||||||||
Stock-based compensation
|
1.1
|
9.8
|
2.9
|
166.0
|
||||||||||||
Foreign currency transaction (gains) losses, net
|
(0.8
|
)
|
1.7
|
(0.6
|
)
|
6.3
|
||||||||||
Loss on extinguishment of debt
|
0.9
|
34.1
|
1.0
|
84.5
|
||||||||||||
Shareholder litigation settlement recoveries
|
-
|
-
|
(4.5
|
)
|
-
|
|||||||||||
Other adjustments
|
0.7
|
1.3
|
0.4
|
3.5
|
||||||||||||
Income (Loss) Before Income Taxes
|
$
|
94.8
|
$
|
32.4
|
$
|
238.1
|
$
|
(166.3
|
)
|
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