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Sep 26, 2020
Gates Industrial Q3 2020 Earnings Report
Gates Industrial's third-quarter performance in 2020 reflected sequential improvement across geographies and end markets, driven by productivity and restructuring efforts.
Key Takeaways
Gates Industrial reported net sales of $712.2 million, a decrease of 4.6% compared to the prior-year period. Net income attributable to shareholders was $41.9 million, or $0.14 per diluted share, compared to $35.5 million, or $0.12 per diluted share in the prior-year period. Adjusted Net Income was $75.8 million, or $0.26 per diluted share. The company highlighted strong third-quarter results driven by momentum and focused execution, with demand trending positively and significant sequential improvement across all geographies and end markets.
Net sales decreased by 4.6% year-over-year to $712.2 million.
Net income attributable to shareholders increased to $41.9 million, or $0.14 per diluted share.
Adjusted Net Income increased to $75.8 million, or $0.26 per diluted share.
Adjusted EBITDA was $140.0 million with a margin of 19.7%.
Gates Industrial
Gates Industrial
Gates Industrial Revenue by Segment
Revenue by Segment
Power Transmission Revenue
CapyFin.comFluid Power Revenue
CapyFin.com Forward Guidance
Due to the continuing level of uncertainty related to the COVID-19 pandemic and the inability to predict the trajectory and sustainability of the demand recovery, the Company is not reinstating full-year 2020 core revenue or Adjusted EBITDA guidance at this time. The Company continues to expect total capital expenditures of approximately $70 million for the full year. Based on the significant rebound of the business from the second-quarter low, the Company expects that higher net working capital investment to support increased demand, as well as certain non-cash deferred tax impacts, will result in Free Cash Flow Conversion greater than 80% of Adjusted Net Income.
Revenue & Expenses
Visualization of income flow from segment revenue to net income