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Oct 01, 2022
Gates Industrial Q3 2022 Earnings Report
Gates Industrial's Q3 2022 results were reported, showing a slight decrease in net sales but a core revenue growth. The company faced challenges including foreign currency impacts and supply chain disruptions, but pricing actions helped offset inflation.
Key Takeaways
Gates Industrial reported net sales of $860.7 million, a slight decrease of 0.2% year-over-year, but with a core revenue growth of 7.6%. Net income attributable to shareholders was $51.9 million, or $0.18 per diluted share. Adjusted Net Income was $89.4 million, or $0.31 per diluted share. The company is updating its full-year 2022 outlook to reflect the impact of foreign currency translation, supply chain challenges, and inflation.
Net sales reached $860.7 million, which included a core revenue growth of 7.6%.
Net income attributable to shareholders totaled $51.9 million, or $0.18 per diluted share.
Adjusted Net Income was reported as $89.4 million, equating to $0.31 per diluted share.
The company is initiating the next phase of its footprint optimization plan.
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 to reflect the incremental impact of foreign currency translation, supply chain challenges, inflation and the addition of targeted production capacity. The Company now expects core revenue growth in the range of 5.5% to 8.0%, Adjusted EBITDA in the range of $660 million to $690 million and Adjusted Earnings per Share between $1.07 and $1.15.
Positive Outlook
- Core revenue growth is expected to be in the range of 5.5% to 8.0%.
- Adjusted EBITDA is projected to be between $660 million and $690 million.
- Adjusted Earnings per Share are anticipated to be between $1.07 and $1.15.
- Capital expenditures are expected to be approximately $100 million.
- Free Cash Flow conversion is expected to be approximately 50% of Adjusted Net Income.
Challenges Ahead
- The outlook reflects the incremental impact of foreign currency translation.
- Supply chain challenges are expected to continue.
- Inflation is expected to persist.
- The Adjusted Earnings per Share range includes tax and other headwinds of $0.27 per share, primarily due to benefits from certain discrete tax items in 2021.
- Higher inventory levels are expected to mitigate the supply chain reliability challenges.
Revenue & Expenses
Visualization of income flow from segment revenue to net income