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Jul 02, 2022
Gates Industrial Q2 2022 Earnings Report
Gates Industrial's financial performance showed solid improvement from the first quarter, driven by constructive demand trends and pricing actions offsetting inflation, but was impacted by FX headwinds and supply chain challenges.
Key Takeaways
Gates Industrial reported Q2 2022 results with net sales of $906.8 million, a slight decrease of 0.9% year-over-year, but included core revenue growth of 3.6%. Net income attributable to shareholders was $53.1 million, or $0.19 per diluted share, while Adjusted Net Income was $90.2 million, or $0.32 per diluted share. The company is updating its full-year 2022 outlook to reflect current market conditions, expecting core revenue growth in the range of 6% to 9%.
Net sales reached $906.8 million, including a 3.6% core revenue growth.
Net income attributable to shareholders was $53.1 million, or $0.19 per diluted share.
Adjusted Net Income amounted to $90.2 million, or $0.32 per diluted share.
Adjusted EBITDA was reported as $180.1 million.
Gates Industrial
Gates Industrial
Gates Industrial Revenue by Segment
Revenue by Segment
Power Transmission Revenue
CapyFin.comFluid Power Revenue
CapyFin.com Forward Guidance
The Company is updating its full-year 2022 outlook. The Company continues to see the demand environment as constructive and now expects core revenue growth in the range of 6% to 9%. Adjusted EBITDA is now expected in the range of $705 million to $755 million. Adjusted Earnings per Share are now expected to be between $1.15 and $1.25.
Positive Outlook
- Constructive demand environment
- Expects core revenue growth in the range of 6% to 9%
- Adjusted EBITDA is now expected in the range of $705 million to $755 million
- Adjusted Earnings per Share are now expected to be between $1.15 and $1.25
- Free Cash Flow conversion is now expected to be greater than 75% of Adjusted Net Income
Challenges Ahead
- Negative impact of larger foreign currency headwinds from a stronger U.S. dollar
- Continued supply chain challenges
- China exhibiting a slower pace of recovery from the COVID lockdowns
- Tax and other headwinds of $0.27 per share at the midpoint, primarily due to benefits from certain discrete tax items in 2021
- Higher inventory levels to mitigate the supply chain reliability challenges
Revenue & Expenses
Visualization of income flow from segment revenue to net income