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Sep 30, 2022
Thermon Q2 2023 Earnings Report
Produced revenue growth, improved gross margin, and achieved record non-GAAP adjusted EPS.
Key Takeaways
Thermon reported a strong second quarter with a 24% increase in revenue and a significant improvement in profitability. The company's performance was driven by robust customer demand in the Western Hemisphere, while Europe faced challenges due to geopolitical events and higher energy costs. Thermon is raising its fiscal year 2023 revenue and earnings guidance due to continued strong market demand.
Revenue increased by 24% to $100.6 million, driven by sales growth in the US, Canada, and Latin America.
Gross margin improved to 45.7% compared to 39.0% due to higher volume, favorable mix, pricing realization, and operational efficiency.
GAAP EPS was $0.33, and non-GAAP adjusted EPS reached a record $0.38, primarily due to margin improvement and cost control.
Net income increased by 2,203% to $11.0 million, and adjusted EBITDA increased by 92% to $21.9 million, driven by volume growth and prudent cost management.
Forward Guidance
Thermon is raising its annual guidance for fiscal year ending March 31, 2023. The company expects revenue to be approximately $405-$420 million, including $18 million of revenue contribution from the Powerblanket acquisition. GAAP EPS is expected to be approximately $1.08-$1.17 per share, with Adjusted EPS to be approximately $1.30-$1.39 per share.
Positive Outlook
- Continued strength in the Western Hemisphere
- Operational excellence program
- Disciplined capital allocation priorities
- Improved cash flow in the second half
- Profitable growth throughout Fiscal 2023
Challenges Ahead
- Contraction in Europe
- Geopolitical instability in Russia and Ukraine
- Sanctions by the U.S. and Canadian governments and European Union
- Global supply chain constraints
Historical Earnings Impact
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Avg. Return Before/After Earnings
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