Strong execution on strategic initiatives to accelerate
growth and position the portfolio for robust secular tailwinds
across the mobility ecosystem
- Sales of $764 million, down 1.5% vs. prior year; Core sales
down 1.6%
- GAAP diluted EPS of $0.62; Adjusted diluted net EPS of $0.67
vs. prior guide of $0.61 to $0.66
- Operating cash flow was $78 million; Adjusted Free Cash Flow
was $77 million, representing 73% Adjusted Free Cash Flow
Conversion
- Initiates Q3 2023 guidance for Adjusted diluted net EPS of
$0.65 to $0.69
- Increases full-year 2023 Adjusted diluted net EPS guidance to
$2.79 to $2.87
Vontier Corporation (NYSE: VNT), a leading global provider of
critical technologies and solutions to connect, manage and scale
the mobility ecosystem, today announced results for the second
quarter ended June 30, 2023.
Reported sales in the second quarter declined 1.5%
year-over-year to $764.4 million, reflecting a decrease in core
sales of 1.6%. Continued underlying momentum across the portfolio,
supported by strong secular tailwinds, healthy end market demand,
improving supply chain conditions and ongoing pricing realization,
was more than offset by the expected sunset of EMV-related sales.
Operating profit of $120.6 million declined 11.6% versus the prior
year, and operating profit margin decreased 180 basis points, to
15.8%. Adjusted operating profit of $160.1 million declined 4.1%
versus the prior year and adjusted operating profit margin
decreased approximately 60 basis points, to 20.9%. Net earnings
were $97.3 million, and adjusted net earnings were $105.4 million,
resulting in diluted net earnings per share of $0.62 and adjusted
diluted net earnings per share of $0.67.
“Vontier delivered another quarter of solid results, exceeding
the high-end of our EPS guidance, led by 9% baseline core sales
growth and strong operational execution,” said Mark Morelli,
President and Chief Executive Officer. “We continue to advance our
connected mobility strategy, resulting in several key customer wins
in the quarter and highlighting our distinct capabilities to enable
our customers’ decarbonization journeys and provide differentiated
operating system software.”
“Demand across our end markets remains constructive, and our
team’s growth strategy and cost out execution has been strong,
providing confidence in our improved outlook for the full year,”
Morelli continued.
“Vontier’s portfolio is uniquely positioned to deliver smart,
sustainable solutions as our customers continue to invest in
modernizing and expanding their footprints, decarbonizing their
fleets and enhancing their asset productivity. We believe no other
company across the mobility ecosystem can match our portfolio depth
and breadth, product capabilities, domain expertise and channel
presence needed to solve our customers’ high-value problems.”
Segment Results
Q2 2023 Segment Results Summary
Mobility Technologies
Repair Solutions
Environmental & Fueling
Solutions
Other
Total Vontier
Sales ($M)
$238.8
$158.4
$339.3
$27.9
$764.4
Segment Operating Profit
$44.7
$41.6
$95.2
$2.2
$183.7
Segment Operating Profit %
18.7%
26.3%
28.1%
7.9%
24.0%
Mobility Technologies reported sales increased 13.4%
versus the prior year. Core sales growth of 4.6% was driven by
strong performance across car wash technologies and alternative
energy solutions, as well as solid growth in telematics. Segment
operating profit increased 4.9% versus the prior year. Segment
operating profit margin declined 150 basis points year over year,
as a result of unfavorable mix related to the Invenco acquisition
and continued growth investments.
Repair Solutions reported sales grew 5.8% over the prior
year. Core sales growth of 6.0% was driven by robust demand for
tool storage, hardline and cordless power tools, as well as higher
net franchisee adds. Segment operating profit was in line with
prior year results. Segment operating profit margin declined 150
basis points, impacted by year-over-year reserve-related
adjustments to the receivables portfolio.
Environmental & Fueling Solutions reported sales
declined 9.6% year-over-year. Core sales were down 8.5% as
continued strength in U.S. dispensing equipment and aftermarket
parts was more than offset by the year-over-year decline in
EMV-related volume. Segment operating profit declined 3.4% year
over year, while segment operating profit margin expanded 190 basis
points, driven by price/cost execution, as well as higher
restructuring and productivity savings.
Other Items
- Repurchased ~$32 million, or ~1.1 million shares, during the
quarter; Year to date through June, share repurchases total $50
million, or 2.0 million shares.
- Repaid $100 million in debt during the quarter; Year to date
through June, debt repayment totaled $165 million. Net debt/Adj.
EBITDA ended Q2 at 2.9X.
- The divestiture of Global Traffic Technologies (GTT) closed in
April. Gross proceeds were $108 million.
2023 Outlook
- Total sales down low-to-mid-single digits; Core sales down
low-to-mid-single digits; Baseline* core sales growth of mid-single
digits-plus
- Adjusted operating profit margin down 60 to 80 basis points;
Baseline* adjusted operating profit margin expansion of 180 to 200
basis points
- Adjusted diluted EPS in the range of $2.79 to $2.87, compares
to the prior range of $2.77 to $2.87
- Adjusted free cash flow conversion of ~90-100%
Q3 2023 Outlook
- Total sales down mid-single digits; Core sales down mid-single
digits; Baseline* core sales growth of mid-single digits-plus
- Adjusted operating profit margin down 370 to 420 basis points
year over year; Baseline* adjusted operating profit margin down 70
to 100 basis points year-over-year
- Adjusted diluted EPS $0.65 to $0.69
*References to baseline core sales growth and baseline margin
expansion exclude the impact of the year over year decline in
EMV-related U.S. Dispenser sales (~$300M) and the associated
operating profit decline (~$150M), consistent with the framework
previously provided.
Conference Call Details
Vontier will discuss results and outlook during its quarterly
investor conference call today starting at 8:30 a.m. ET. The call
and an accompanying slide presentation will be webcast on the
“Investors” section of Vontier’s website, www.vontier.com, under
“Events & Presentations.” A replay of the webcast will be
available at the same location shortly after the conclusion of the
presentation.
The conference call can be accessed by dialing 888-886-7786,
along with the conference ID: 72770844. A replay of the webcast
will be available by dialing +1 877-674-7070, conference ID:
72770844 and passcode 770844 or under the “Investors” section of
the website under “Events & Presentations.”
ABOUT VONTIER
Vontier (NYSE: VNT) is a global industrial technology company
uniting critical mobility and multi-energy technologies and
solutions to meet the needs of a rapidly evolving, more connected
mobility ecosystem. Leveraging leading market positions, decades of
domain expertise and unparalleled portfolio breadth, Vontier
enables the way the world moves – delivering smart, safe and
sustainable solutions to our customers and the planet. Vontier has
a culture of continuous improvement built upon the foundation of
the Vontier Business System and embraced by over 8,500 colleagues
worldwide. Additional information about Vontier is available on the
Company’s website at www.vontier.com.
NON-GAAP FINANCIAL MEASURES
In addition to the financial measures prepared in accordance
with generally accepted accounting principles (GAAP), this earnings
release also references “core sales growth,” “baseline core sales
growth”, “adjusted operating profit,” “adjusted operating profit
margin,” “segment operating profit,” “segment operating profit
margin,” “adjusted net earnings,” “adjusted diluted net earnings
per share,” “free cash flow,” “adjusted free cash flow”, “adjusted
free cash flow conversion”, “EBITDA”, “adjusted EBITDA” and “net
leverage ratio” which are non-GAAP financial measures. The reasons
why we believe these measures, when used in conjunction with the
GAAP financial measures, provide useful information to investors,
how management uses such non-GAAP financial measures, a
reconciliation of these measures to the most directly comparable
GAAP measures and other information relating to these measures are
included in the supplemental reconciliation schedule attached. The
non-GAAP financial measures should not be considered in isolation
or as a substitute for the GAAP financial measures, but should
instead be read in conjunction with the GAAP financial measures.
The non-GAAP financial measures used by Vontier in this release may
be different from similarly-titled non-GAAP measures used by other
companies.
FORWARD-LOOKING STATEMENTS
This release contains forward-looking statements within the
meaning of the federal securities laws. These statements include,
but are not limited to statements regarding Vontier Corporation’s
(the “Company’s”) business and acquisition opportunities and
anticipated earnings, and any other statements identified by their
use of words like “anticipate,” “expect,” “believe,” “outlook,”
“guidance,” or “will” or other words of similar meaning. There are
a number of important risks and uncertainties that could cause
actual results, developments and business decisions to differ
materially from those suggested or indicated by such
forward-looking statements and you should not place undue reliance
on any such forward-looking statements. These risks and
uncertainties include, among other things, deterioration of or
instability in the economy, the markets we serve, international
trade policies and the financial markets, contractions or lower
growth rates and cyclicality of markets we serve, competition,
changes in industry standards and governmental regulations that may
adversely impact demand for our products or our costs, our ability
to successfully identify, consummate, integrate and realize the
anticipated value of appropriate acquisitions and successfully
complete divestitures and other dispositions, our ability to
develop and successfully market new products, software, and
services and expand into new markets, the potential for improper
conduct by our employees, agents or business partners, impact of
divestitures, contingent liabilities relating to acquisitions and
divestitures, impact of changes to tax laws, our compliance with
applicable laws and regulations and changes in applicable laws and
regulations, risks relating to international economic, political,
war or hostility, legal, compliance and business factors, risks
relating to potential impairment of goodwill and other intangible
assets, currency exchange rates, tax audits and changes in our tax
rate and income tax liabilities, the impact of our debt obligations
on our operations, litigation and other contingent liabilities
including intellectual property and environmental, health and
safety matters, our ability to adequately protect our intellectual
property rights, risks relating to product, service or software
defects, product liability and recalls, risks relating to product
manufacturing, our relationships with and the performance of our
channel partners, commodity costs and surcharges, our ability to
adjust purchases and manufacturing capacity to reflect market
conditions, reliance on sole sources of supply, security breaches
or other disruptions of our information technology systems, adverse
effects of restructuring activities, impact of changes to U.S.
GAAP, labor matters, and disruptions relating to man-made and
natural disasters. Additional information regarding the factors
that may cause actual results to differ materially from these
forward-looking statements is available in our SEC filings,
including our Form 10-K for the year ended December 31, 2022. These
forward-looking statements represent Vontier’s beliefs and
assumptions only as of the date of this release and Vontier does
not assume any obligation to update or revise any forward-looking
statement, whether as a result of new information, future events
and developments or otherwise.
VONTIER CORPORATION AND
SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(in millions)
(unaudited)
June 30, 2023
December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents
$
244.0
$
204.5
Accounts receivable, net
490.9
514.8
Inventories
329.2
346.0
Prepaid expenses and other current
assets
158.6
152.8
Equity securities measured at fair
value
—
21.3
Current assets held for sale
53.5
145.6
Total current assets
1,276.2
1,385.0
Property, plant and equipment, net
94.5
92.1
Operating lease right-of-use assets
42.0
44.5
Long-term financing receivables, net
265.0
249.8
Other intangible assets, net
606.6
649.7
Goodwill
1,733.9
1,738.7
Other assets
187.4
183.5
Total assets
$
4,205.6
$
4,343.3
LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings
$
8.7
$
4.6
Trade accounts payable
353.9
430.9
Current operating lease liabilities
12.9
13.8
Accrued expenses and other current
liabilities
441.7
437.6
Current liabilities held for sale
29.0
43.0
Total current liabilities
846.2
929.9
Long-term operating lease liabilities
31.8
34.0
Long-term debt
2,422.4
2,585.7
Other long-term liabilities
203.8
214.2
Total liabilities
3,504.2
3,763.8
Commitments and Contingencies
Equity:
Preferred stock
—
—
Common stock
—
—
Treasury stock
(378.5
)
(328.0
)
Additional paid-in capital
37.8
27.6
Retained earnings
943.1
770.8
Accumulated other comprehensive income
94.1
106.1
Total Vontier stockholders’ equity
696.5
576.5
Noncontrolling interests
4.9
3.0
Total equity
701.4
579.5
Total liabilities and equity
$
4,205.6
$
4,343.3
VONTIER CORPORATION AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
EARNINGS
(in millions, except per share
amounts)
(unaudited)
Three Months Ended
Six Months Ended
June 30, 2023
July 1, 2022
June 30, 2023
July 1, 2022
Sales
$
764.4
$
776.4
$
1,540.8
$
1,524.5
Cost of sales
(416.3
)
(428.3
)
(839.7
)
(841.1
)
Gross profit
348.1
348.1
701.1
683.4
Operating costs:
Selling, general and administrative
expenses
(187.2
)
(176.7
)
(365.4
)
(342.7
)
Research and development expenses
(40.3
)
(34.9
)
(81.3
)
(69.4
)
Operating profit
120.6
136.5
254.4
271.3
Non-operating income (expense), net:
Interest expense, net
(23.9
)
(15.3
)
(47.9
)
(28.2
)
Gain on sale of business
34.1
—
34.1
—
Gain on previously held equity interests
from combination of business
—
—
—
32.7
Unrealized (loss) gain on equity
securities measured at fair value
—
(80.0
)
—
83.0
Other non-operating expense, net
(0.5
)
—
(1.4
)
(0.1
)
Earnings before income taxes
130.3
41.2
239.2
358.7
Provision for income taxes
(33.0
)
(7.9
)
(59.1
)
(75.2
)
Net earnings
$
97.3
$
33.3
$
180.1
$
283.5
Net earnings per share:
Basic
$
0.63
$
0.21
$
1.16
$
1.74
Diluted
$
0.62
$
0.21
$
1.15
$
1.73
Weighted average shares outstanding:
Basic
155.4
160.5
155.5
163.2
Diluted
156.3
161.2
156.2
163.9
VONTIER CORPORATION AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(in millions)
(unaudited)
Six Months Ended
June 30, 2023
July 1, 2022
Cash flows from operating activities:
Net earnings
$
180.1
$
283.5
Non-cash items:
Depreciation and amortization expense
62.7
58.1
Stock-based compensation expense
15.3
13.1
Amortization of debt issuance costs
2.0
1.7
Amortization of acquisition-related
inventory fair value step-up
1.3
—
Loss on equity investments
0.8
—
Gain on sale of business
(34.1
)
—
Gain on sale of property
(2.8
)
—
Gain on previously held equity interests
from combination of business
—
(32.7
)
Unrealized gain on equity securities
measured at fair value
—
(83.0
)
Change in deferred income taxes
(9.3
)
5.0
Change in accounts receivable and
long-term financing receivables, net
11.5
(31.8
)
Change in other operating assets and
liabilities
(69.0
)
(165.4
)
Net cash provided by operating
activities
158.5
48.5
Cash flows from investing activities:
Proceeds from sale of business, net of
cash provided
106.8
—
Cash paid for acquisitions, net of cash
received
—
(186.6
)
Payments for additions to property, plant
and equipment
(26.1
)
(26.5
)
Proceeds from sale of property
4.3
0.2
Cash paid for equity investments
(1.9
)
(7.3
)
Proceeds from sale of equity
securities
20.4
—
Net cash provided by (used in)
investing activities
103.5
(220.2
)
Cash flows from financing activities:
Proceeds from issuance of long-term
debt
—
144.0
Repayment of long-term debt
(165.0
)
(130.0
)
Net proceeds from short-term
borrowings
3.8
5.0
Payments of common stock cash dividend
(7.8
)
(8.0
)
Purchases of treasury stock
(50.0
)
(271.1
)
Proceeds from stock option exercises
3.1
0.6
Other financing activities
(6.7
)
(3.3
)
Net cash used in financing
activities
(222.6
)
(262.8
)
Effect of exchange rate changes on cash
and cash equivalents
0.1
(10.7
)
Net change in cash and cash
equivalents
39.5
(445.2
)
Beginning balance of cash and cash
equivalents
204.5
572.6
Ending balance of cash and cash
equivalents
$
244.0
$
127.4
VONTIER CORPORATION AND
SUBSIDIARIES
SEGMENT FINANCIAL
SUMMARY
(in millions)
(unaudited)
Three Months Ended
Six Months Ended
June 30, 2023
July 1, 2022
June 30, 2023
July 1, 2022
Sales
Mobility Technologies
$
238.8
$
210.6
$
484.7
$
418.2
Repair Solutions
158.4
149.7
339.8
314.1
Environmental & Fueling Solutions
339.3
375.3
653.1
703.5
Other
27.9
40.8
63.2
88.7
Total Vontier Sales
$
764.4
$
776.4
$
1,540.8
$
1,524.5
Segment & Adjusted Operating
Profit
Mobility Technologies
$
44.7
$
42.6
$
92.6
$
83.7
Repair Solutions
41.6
41.6
88.9
88.6
Environmental & Fueling Solutions
95.2
98.5
175.9
180.5
Other
2.2
3.2
6.0
8.3
Segment Operating Profit (Non-GAAP)
183.7
185.9
363.4
361.1
Corporate & Other Unallocated
Expense
(23.6
)
(18.9
)
(42.1
)
(30.7
)
Adjusted Operating Profit (Non-GAAP)
$
160.1
$
167.0
$
321.3
$
330.4
Segment & Adjusted Operating Profit
Margin
Mobility Technologies
18.7
%
20.2
%
19.1
%
20.0
%
Repair Solutions
26.3
%
27.8
%
26.2
%
28.2
%
Environmental & Fueling Solutions
28.1
%
26.2
%
26.9
%
25.7
%
Other
7.9
%
7.8
%
9.5
%
9.4
%
Segment Operating Profit Margin
(Non-GAAP)
24.0
%
23.9
%
23.6
%
23.7
%
Adjusted Operating Profit Margin
(Non-GAAP)
20.9
%
21.5
%
20.9
%
21.7
%
Note: Results for the Mobility Technologies and Environmental
& Fueling Solutions segments for the three and six months ended
July 1, 2022 have been revised from the results previously reported
on March 20, 2023.
VONTIER CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES AND
OTHER INFORMATION
Core Sales Growth and Baseline Core Sales Growth
We define core sales growth as the change in total sales
calculated according to GAAP but excluding (i) sales from acquired
and certain divested businesses; (ii) the impact of currency
translation; and (iii) certain other items.
- References to sales attributable to acquisitions or acquired
businesses refer to GAAP sales from acquired businesses recorded
prior to the first anniversary of the acquisition less the amount
of sales attributable to certain divested businesses or product
lines not considered discontinued operations.
- The portion of sales attributable to the impact of currency
translation is calculated as the difference between (a) the
period-to-period change in sales (excluding sales from acquired
businesses) and (b) the period-to-period change in sales, including
foreign operations, (excluding sales from acquired businesses)
after applying the current period foreign exchange rates to the
prior year period.
- The portion of sales attributable to other items is calculated
as the impact of those items which are not directly correlated to
sales from existing businesses which do not have an impact on the
current or comparable period.
Baseline core sales growth refers to core sales growth but
excluding the impact of the end of the U.S. upgrade cycle for
enhanced credit card security requirements for outdoor payment
systems based on the EMV global standards.
Core sales growth and Baseline core sales growth should be
considered in addition to, and not as a replacement for or superior
to, total sales, and may not be comparable to similarly titled
measures reported by other companies.
Management believes that reporting the non-GAAP financial
measure of core sales growth provides useful information to
investors by helping identify underlying growth trends in our
business and facilitating easier comparisons of our sales
performance with our performance in prior and future periods and to
our peers. We exclude the effect of acquisitions and certain
divestiture-related items because the nature, size and number of
such transactions can vary dramatically from period to period and
between us and our peers. We exclude the effect of currency
translation and certain other items from core sales because these
items are either not under management’s control or relate to items
not directly correlated to core sales growth. Management believes
the exclusion of these items from core sales growth may facilitate
assessment of underlying business trends and may assist in
comparisons of long-term performance. References to sales volume
refer to the impact of both price and unit sales.
Adjusted Operating Profit and Adjusted Operating Profit
Margin
Adjusted operating profit refers to operating profit calculated
in accordance with GAAP, but excluding amortization of
acquisition-related intangible assets, costs associated with
restructurings including one-time termination benefits and related
charges and impairment and other charges associated with facility
closure, contract termination and other related activities, and the
related impact of certain divested businesses or product lines not
considered discontinued operations ("Restructuring- and
divestiture-related adjustments"), transaction- and deal-related
costs, one-time costs related to the separation, amortization of
acquisition-related inventory fair value step-up, gains and losses
on sale of property, other charges which represent charges incurred
that are not part of our core operating results ("Other charges")
and normalization and other adjustments which represent adjustments
for standalone public company costs. Adjusted operating profit
margin refers to adjusted operating profit divided by GAAP
sales.
Segment Operating Profit and Segment Operating Profit
Margin
Segment operating profit is used by Vontier’s management in
determining how to allocate resources and assess performance.
Segment operating profit represents total segment sales less
operating costs attributable to the segment, which does not include
unallocated corporate costs and other operating costs not allocated
to the reportable segments as part of management’s assessment of
reportable segment operating performance, including stock-based
compensation expense, amortization of intangible assets and other
costs shown in the reconciliation to GAAP operating profit below.
As part of management’s assessment of the Repair Solutions segment,
a capital charge based on the segment’s financing receivables
portfolio is assessed by Corporate. Segment operating profit margin
refers to segment operating profit divided by GAAP sales.
Adjusted Net Earnings and Adjusted Diluted Net Earnings per
Share
Adjusted net earnings refers to net earnings calculated in
accordance with GAAP, but excluding on a pretax basis amortization
of acquisition-related intangible assets, Restructuring- and
divestiture-related adjustments, transaction- and deal-related
costs, one-time costs related to the separation, amortization of
acquisition-related inventory fair value step-up, gains and losses
on sale of property, Other charges, normalization and other
adjustments which represent adjustments for standalone public
company costs, non-cash write-offs of deferred financing costs,
gains and losses on sale of businesses and gains and losses on
investments, and including the tax effect of these adjustments and
other tax adjustments. The tax effect of such adjustments was
calculated by applying our overall estimated effective tax rate to
the pretax amount of each adjustment (unless the nature of the item
and/or the tax jurisdiction in which the item has been recorded
requires application of a specific tax rate or tax treatment, in
which case the tax effect of such item is estimated by applying
such specific tax rate or tax treatment). Adjusted diluted net
earnings per share refers to adjusted net earnings divided by the
weighted average diluted shares outstanding.
Free Cash Flow, Adjusted Free Cash Flow and Adjusted Free
Cash Flow Conversion
Free cash flow refers to cash flow from operations calculated
according to GAAP but excluding capital expenditures. Adjusted free
cash flow refers to free cash flow adjusted for cash received from
the sale of property and cash paid for Restructuring- and
divestiture-related adjustments, transaction- and deal related
costs, one-time costs related to the separation, and Other charges.
Adjusted free cash flow conversion refers to adjusted free cash
flow divided by adjusted net earnings.
Net Leverage Ratio and Adjusted EBITDA
EBITDA refers to net earnings calculated in accordance with
GAAP, excluding interest, taxes, depreciation and amortization of
acquisition-related intangible assets. Adjusted EBITDA refers to
EBITDA adjusted for Restructuring- and divestiture-related
adjustments, transaction- and deal-related costs, one-time costs
related to the separation, amortization of acquisition-related
inventory fair value step-up, gains and losses on sale of property,
Other charges, non-cash write-offs of deferred financing costs,
gains and losses on sale of businesses and gains and losses on
investments. Net leverage ratio refers to net debt divided by
Adjusted EBITDA.
Management believes that these non-GAAP financial measures
provide useful information to investors by reflecting additional
ways of viewing aspects of our operations that, when reconciled to
the corresponding GAAP measure, help our investors to understand
the long-term profitability trends of our business, and facilitate
comparisons of our profitability to prior and future periods and to
our peers.
These non-GAAP measures should be considered in addition to, and
not as a replacement for or superior to, the comparable GAAP
measures, and may not be comparable to similarly titled measures
reported by other companies.
A reconciliation of each of the projected Core Sales Growth,
Baseline Core Sales Growth, Adjusted Operating Profit Margin,
Baseline Adjusted Operating Profit Margin, Adjusted Diluted Net
Earnings Per Share, Adjusted Free Cash Flow and Adjusted Free Cash
Flow Conversion, which are forward-looking non-GAAP financial
measures, to the most directly comparable GAAP financial measure,
is not provided because the company is unable to provide such
reconciliation without unreasonable effort. The inability to
provide each reconciliation is due to the unpredictability of the
amounts and timing of events affecting the items we exclude from
the non-GAAP measure.
Components of Sales Growth
% Change Three Months Ended
June 30, 2023 vs. Comparable 2022 Period
Mobility Technologies
Repair Solutions
Environmental & Fueling
Solutions
Total
Total Sales Growth (GAAP)
13.4
%
5.8
%
(9.6
)%
(1.5
)%
Core sales growth (Non-GAAP)
4.6
%
6.0
%
(8.5
)%
(1.6
)%
Impact of acquisitions (Non-GAAP)
10.0
%
—
%
—
%
0.9
%
Impact of currency exchange rates
(Non-GAAP)
(1.2
)%
(0.2
)%
(1.1
)%
(0.8
)%
Core sales growth (Non-GAAP)
4.6
%
6.0
%
(8.5
)%
(1.6
)%
Impact of EMV sunset(a)
5.7
%
—
%
17.6
%
10.2
%
Baseline core sales growth (Non-GAAP)
10.3
%
6.0
%
9.1
%
8.6
%
(a)
Reflects the impact of the end of the U.S. upgrade cycle for
enhanced credit card security requirements for outdoor payments
systems based on the EMV global standards.
% Change Six Months Ended June
30, 2023 vs. Comparable 2022 Period
Mobility Technologies
Repair Solutions
Environmental & Fueling
Solutions
Total
Total Sales Growth (GAAP)
15.9
%
8.2
%
(7.2
)%
1.1
%
Core sales growth (Non-GAAP)
8.3
%
8.4
%
(5.6
)%
1.1
%
Impact of acquisitions (Non-GAAP)
9.5
%
—
%
—
%
1.3
%
Impact of currency exchange rates
(Non-GAAP)
(1.9
)%
(0.2
)%
(1.6
)%
(1.3
)%
Reconciliation of Operating Profit to Adjusted Operating
Profit and Segment Operating Profit
Three Months Ended
Six Months Ended
$ in millions
June 30, 2023
July 1, 2022
June 30, 2023
July 1, 2022
Operating Profit (GAAP)
$
120.6
$
136.5
$
254.4
$
271.3
Amortization of acquisition-related
intangible assets
20.3
19.6
41.0
38.1
Restructuring- and divestiture-related
adjustments
14.3
5.2
18.8
5.6
Transaction- and deal-related costs
3.6
3.3
6.7
10.4
One-time costs related to separation
0.8
1.6
1.9
3.2
Amortization of acquisition-related
inventory fair value step-up
0.5
—
1.3
—
Gain on sale of property
—
—
(2.8
)
—
Other charges
—
0.8
—
2.1
Normalization and other adjustments(a)
—
—
—
(0.3
)
Adjusted Operating Profit
(Non-GAAP)
160.1
167.0
321.3
330.4
Corporate & Other Unallocated
Costs
23.6
18.9
42.1
30.7
Segment Operating Profit
(Non-GAAP)
$
183.7
$
185.9
$
363.4
$
361.1
Operating Profit Margin (GAAP)
15.8
%
17.6
%
16.5
%
17.8
%
Adjusted Operating Profit Margin
(Non-GAAP)
20.9
%
21.5
%
20.9
%
21.7
%
Segment Operating Profit Margin
(Non-GAAP)
24.0
%
23.9
%
23.6
%
23.7
%
(a)
Adjustment for standalone public company
costs
Reconciliation of Net Earnings to Adjusted Net
Earnings
Three Months Ended
Six Months Ended
($ in millions)
June 30, 2023
July 1, 2022
June 30, 2023
July 1, 2022
Net Earnings (GAAP)
$
97.3
$
33.3
$
180.1
$
283.5
Amortization of acquisition-related
intangible assets
20.3
19.6
41.0
38.1
Restructuring- and divestiture-related
adjustments
14.3
5.2
18.8
5.6
Transaction- and deal-related costs
3.6
3.3
6.7
10.4
One-time costs related to separation
0.8
1.6
1.9
3.2
Amortization of acquisition-related
inventory fair value step-up
0.5
—
1.3
—
Gain on sale of property
—
—
(2.8
)
—
Other charges
—
0.8
—
2.1
Normalization and other adjustments
(a)
—
—
—
(0.3
)
Non-cash write-off of deferred financing
costs
0.1
—
0.1
—
Gain on sale of business
(34.1
)
—
(34.1
)
—
Loss on equity investments
0.1
—
0.8
—
Gain on previously held equity interests
from combination of business
—
—
—
(32.7
)
Unrealized loss (gain) on equity
securities measured at fair value
—
80.0
—
(83.0
)
Tax effect of the Non-GAAP adjustments
(b)
(0.9
)
(24.2
)
(7.4
)
7.9
Other tax adjustments
3.4
(2.8
)
5.1
(2.3
)
Adjusted Net Earnings
(Non-GAAP)
$
105.4
$
116.8
$
211.5
$
232.5
Diluted weighted average shares
outstanding
156.3
161.2
156.2
163.9
Diluted Net Earnings Per Share
(GAAP)
$
0.62
$
0.21
$
1.15
$
1.73
Adjusted Diluted Net Earnings Per Share
(Non-GAAP)
$
0.67
$
0.72
$
1.35
$
1.42
(a)
Adjustment for standalone public company
costs
(b)
Tax effect calculated using an estimated adjusted effective tax
rate for each respective period. The gain on previously held equity
interests from combination of business is non-taxable income and
therefore the tax effect of the adjustments only includes the other
adjustments noted.
Reconciliation of Operating Cash Flow to Adjusted Free Cash
Flow
Three Months Ended
Six Months Ended
($ in millions)
June 30, 2023
July 1, 2022
June 30, 2023
July 1, 2022
Operating Cash Flow (GAAP)
$
77.5
$
7.2
$
158.5
$
48.5
Less: Purchases of property, plant &
equipment (capital expenditures)
(12.4
)
(13.6
)
(26.1
)
(26.5
)
Free Cash Flow (Non-GAAP)
$
65.1
$
(6.4
)
$
132.4
$
22.0
Restructuring- and divestiture-related
adjustments
5.4
2.9
9.5
7.1
Transaction- and deal-related costs
6.2
2.6
8.5
8.7
One-time costs related to separation
—
0.1
—
0.2
Proceeds from sale of property
0.1
—
4.3
0.2
Other charges
—
13.9
—
14.8
Adjusted Free Cash Flow
(Non-GAAP)
$
76.8
$
13.1
$
154.7
$
53.0
Adjusted Net Earnings
(Non-GAAP)
$
105.4
$
116.8
$
211.5
$
232.5
Adjusted Free Cash Flow Conversion
Ratio (Non-GAAP)
72.9
%
11.2
%
73.1
%
22.8
%
Net Leverage Ratio and Reconciliation from Net Earnings to
EBITDA to Adjusted EBITDA
Total Debt
$
2,443.7
Less: Cash
(244.0
)
Net Debt
$
2,199.7
Adjusted EBITDA (Non-GAAP)
$
747.2
Net Leverage Ratio
2.9
Three Months Ended
LTM
($ in millions)
June 30, 2023
June 30, 2023
Net Earnings (GAAP)
$
97.3
$
297.9
Interest expense, net
23.9
89.3
Income tax expense
33.0
110.0
Depreciation and amortization expense
31.6
123.5
EBITDA (Non-GAAP)
$
185.8
$
620.7
Restructuring- and divestiture-related
adjustments
14.3
31.0
Transaction- and deal-related costs
3.6
29.6
One-time costs related to separation
0.8
4.0
Amortization of acquisition-related
inventory fair value step-up
0.5
2.4
Gain on sale of property
—
(2.0
)
Other charges
—
0.1
Non-cash write-off of deferred financing
costs
0.1
0.1
Gain on sale of business
(34.1
)
(34.1
)
Loss on equity investments
0.1
3.7
Unrealized loss on equity securities
measured at fair value
—
91.7
Adjusted EBITDA (Non-GAAP)
$
171.1
$
747.2
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230803075941/en/
Ryan Edelman Vice President, Investor Relations Vontier
Corporation 5438 Wade Park Blvd, Suite 600 Raleigh, NC 27607
Telephone: (984) 238-1929
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