Gates Industrial Reports Second-Quarter 2025 Results
Gates Industrial (NYSE:GTES) reported Q2 2025 results with net sales of $883.7 million, showing a slight decline of 0.2% year-over-year. The company posted net income of $56.5 million, or $0.22 per diluted share, with Adjusted Net Income per share of $0.39.
The Power Transmission segment saw 1.5% growth in net sales to $550.1 million, while Fluid Power segment experienced a 2.9% decline to $333.6 million. The company's Replacement channels and Mobility business showed strong performance, with the latter growing double-digits. Agriculture sector returned to growth for the first time since Q4 2022.
Gates Industrial has raised its 2025 guidance, projecting core sales growth of 0.5% to 2.5%, Adjusted EBITDA of $765-795 million, and Adjusted EPS of $1.44-1.52. The company expects Free Cash Flow conversion to exceed 90%.
Gates Industrial (NYSE:GTES) ha comunicato i risultati del secondo trimestre 2025 con vendite nette pari a 883,7 milioni di dollari, registrando un leggero calo dello 0,2% rispetto all'anno precedente. L'utile netto 猫 stato di 56,5 milioni di dollari, ovvero 0,22 dollari per azione diluita, con un utile netto rettificato per azione di 0,39 dollari.
Il segmento Power Transmission ha registrato una crescita delle vendite nette dell'1,5% a 550,1 milioni di dollari, mentre il segmento Fluid Power ha subito un calo del 2,9% a 333,6 milioni di dollari. I canali di sostituzione e il business della mobilit脿 hanno mostrato una solida performance, con quest'ultimo in crescita a doppia cifra. Il settore agricolo 猫 tornato a crescere per la prima volta dal quarto trimestre del 2022.
Gates Industrial ha rivisto al rialzo le previsioni per il 2025, prevedendo una crescita delle vendite core tra lo 0,5% e il 2,5%, un EBITDA rettificato tra 765 e 795 milioni di dollari e un utile per azione rettificato tra 1,44 e 1,52 dollari. L'azienda si aspetta che la conversione del flusso di cassa libero superi il 90%.
Gates Industrial (NYSE:GTES) report贸 los resultados del segundo trimestre de 2025 con ventas netas de
El segmento de Transmisi贸n de Potencia tuvo un crecimiento del 1.5% en ventas netas hasta $550.1 millones, mientras que el segmento de Potencia de Fluidos experiment贸 una ca铆da del 2.9% hasta $333.6 millones. Los canales de reemplazo y el negocio de movilidad mostraron un desempe帽o fuerte, con este 煤ltimo creciendo en dos d铆gitos. El sector agr铆cola volvi贸 a crecer por primera vez desde el cuarto trimestre de 2022.
Gates Industrial ha incrementado sus previsiones para 2025, proyectando un crecimiento de ventas n煤cleo del 0.5% al 2.5%, un EBITDA ajustado de $765-795 millones y un EPS ajustado de $1.44-1.52. La compa帽铆a espera que la conversi贸n del flujo de caja libre supere el 90%.
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Gates Industrial (NYSE:GTES) a publi茅 ses r茅sultats du deuxi猫me trimestre 2025 avec un chiffre d'affaires net de 883,7 millions de dollars, enregistrant une l茅g猫re baisse de 0,2 % en glissement annuel. La soci茅t茅 a r茅alis茅 un b茅n茅fice net de 56,5 millions de dollars, soit 0,22 dollar par action dilu茅e, avec un b茅n茅fice net ajust茅 par action de 0,39 dollar.
Le segment Transmission de puissance a connu une croissance des ventes nettes de 1,5 % 脿 550,1 millions de dollars, tandis que le segment Puissance hydraulique a enregistr茅 une baisse de 2,9 % 脿 333,6 millions de dollars. Les canaux de remplacement et l'activit茅 mobilit茅 ont affich茅 de solides performances, cette derni猫re enregistrant une croissance 脿 deux chiffres. Le secteur agricole est revenu 脿 la croissance pour la premi猫re fois depuis le quatri猫me trimestre 2022.
Gates Industrial a revu 脿 la hausse ses pr茅visions pour 2025, projetant une croissance des ventes de base de 0,5 % 脿 2,5 %, un EBITDA ajust茅 de 765 脿 795 millions de dollars et un BPA ajust茅 de 1,44 脿 1,52 dollar. La soci茅t茅 s'attend 脿 ce que la conversion du flux de tr茅sorerie disponible d茅passe 90 %.
Gates Industrial (NYSE:GTES) meldete die Ergebnisse f眉r das zweite Quartal 2025 mit Nettoums盲tzen von 883,7 Millionen US-Dollar, was einem leichten R眉ckgang von 0,2 % im Jahresvergleich entspricht. Das Unternehmen erzielte einen Nettogewinn von 56,5 Millionen US-Dollar bzw. 0,22 US-Dollar je verw盲sserter Aktie, mit einem bereinigten Nettogewinn je Aktie von 0,39 US-Dollar.
Der Bereich Power Transmission verzeichnete ein Nettoumsatzwachstum von 1,5 % auf 550,1 Millionen US-Dollar, w盲hrend der Bereich Fluid Power einen R眉ckgang von 2,9 % auf 333,6 Millionen US-Dollar verzeichnete. Die Ersatzkan盲le und das Mobilit盲tsgesch盲ft des Unternehmens zeigten eine starke Leistung, wobei letzteres zweistellig wuchs. Der Agrarsektor kehrte erstmals seit dem vierten Quartal 2022 zum Wachstum zur眉ck.
Gates Industrial hat seine Prognose f眉r 2025 nach oben angepasst und erwartet ein Kernumsatzwachstum von 0,5 % bis 2,5 %, ein bereinigtes EBITDA von 765 bis 795 Millionen US-Dollar und ein bereinigtes Ergebnis je Aktie von 1,44 bis 1,52 US-Dollar. Das Unternehmen rechnet damit, dass die Free-Cashflow-Konversion 眉ber 90 % liegen wird.
- Raised full-year 2025 guidance for Adjusted EBITDA and Adjusted EPS
- Mobility business achieved double-digit growth
- Agriculture sector returned to growth first time since Q4 2022
- Replacement channels showed positive core sales growth
- Strong Free Cash Flow conversion expected to exceed 90%
- Gross margin expansion achieved
- Balance sheet continued to improve
- Overall net sales declined 0.2% year-over-year to $883.7 million
- Core sales declined 0.6% compared to prior year
- Fluid Power segment sales decreased 2.9% to $333.6 million
- Power Transmission segment Adjusted EBITDA margin declined 50 bps to 22.3%
Insights
Gates delivered stable Q2 with margins intact despite flat sales; raised 2025 guidance signals improved outlook despite mixed segment performance.
Gates Industrial's Q2 results reflect a company navigating a mixed operating environment with relative stability. Overall revenue of
The company's profitability metrics remained solid despite the flat top line. Net income from continuing operations reached
Looking at segment performance, Power Transmission delivered
The most encouraging aspect of this report is management's decision to raise full-year guidance. The revised outlook calls for core sales growth of
Particularly noteworthy are the growth areas management highlighted: Replacement channels showing positive growth, Mobility business growing double-digits, and the Agriculture sector returning to growth for the first time since Q4 2022. These pockets of strength are partially offsetting weakness in other areas and point to potential catalysts for future improvement. The projection of free cash flow conversion exceeding
Second-Quarter 2025 Financial Summary
- Second-quarter net sales of
$883.7 million 0.2% compared to the prior-year period, including core sales decline of0.6% . - Net income attributable to shareholders of
$56.5 million $0.22 - Adjusted Net Income per diluted share of
$0.39 - Net income from continuing operations of
$63.4 million 7.2% . - Adjusted EBITDA of
$199.2 million 22.5% . - Raising 2025 full-year guidance.
Ivo Jurek, Gates Industrial's Chief Executive Officer, commented, "In the second quarter, our team delivered solid results. The Replacement channels generated positive core sales growth and our Mobility business increased double-digits. Also, we realized growth in Agriculture for the first time since the fourth quarter of 2022. Our gross margin expanded and our balance sheet continued to improve."
Jurek continued, "We have raised our guidance for full year 2025 Adjusted EBITDA and Adjusted EPS. Our team is focused on driving operating improvements and higher cash flow generation while our investments in key growth initiatives are yielding results. I am more optimistic about our secular top-line growth potential over the mid-term."听听
Power Transmission Segment Results
Three months ended | |||||||
(USD in millions) | June 28, 2025 | June 29, 2024 | % Change | % Core Change | |||
Net sales | 1.5听% | 0.6听% | |||||
Adjusted EBITDA | (0.8听%) | ||||||
Adjusted EBITDA margin | 22.3听% | 22.8听% | (50 bps) | ||||
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For the six months ended | |||||||
(USD in millions) | June 28, 2025 | June 29, 2024 | % Change | % Core Change | |||
Net sales | 0.2听% | 1.3听% | |||||
Adjusted EBITDA | (1.4听%) | ||||||
Adjusted EBITDA margin | 22.2听% | 22.6听% | (40 bps) | ||||
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Fluid Power Segment Results
Three months ended | |||||||
(USD in millions) | June 28, 2025 | June 29, 2024 | % Change | % Core Change | |||
Net sales | (2.9听%) | (2.5听%) | |||||
Adjusted EBITDA | (2.6听%) | ||||||
Adjusted EBITDA margin | 22.9听% | 22.8听% | 10 bps | ||||
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For the six months ended | |||||||
(USD in millions) | June 28, 2025 | June 29, 2024 | % Change | % Core Change | |||
Net sales | (2.9听%) | (1.2听%) | |||||
Adjusted EBITDA | (5.2听%) | ||||||
Adjusted EBITDA margin | 22.5听% | 23.0听% | (50 bps) | ||||
2025 Guidance
The Company is raising its full year guidance for 2025. Specifically, the company anticipates the following:
- Core sales growth in the range of +
0.5% to +2.5% year-over-year - Adjusted EBITDA of
$765 million $795 million - Adjusted Earnings Per Share of
$1.44 $1.52 - Capital Expenditures of approximately
$120 million - Free Cash Flow conversion exceeding
90%
Share-based metrics in the Company's guidance do not include the effect of any potential share repurchases.
Because GAAP financial measures on a forward-looking basis are not accessible, and reconciling information is not available without unreasonable effort, we have not provided reconciliations for forward-looking non-GAAP measures, including expected Core Sales Growth, Adjusted EBITDA, Adjusted Earnings per Share and Free Cash Flow conversion for 2025. For the same reasons, we are unable to address the probable significance of the unavailable information, which could be material to future results.
Conference Call and Webcast
Gates Industrial Corporation plc will host a conference call today at 11:30 a.m. Eastern Time to discuss the Company's financial results. The live webcast of the conference call and accompanying presentation materials can be accessed through Gates Industrial's website at investors.gates.com. For those unable to access the webcast, the conference call can be accessed by dialing (888) 414-4601 (domestic) or +1 (646) 960-0313 (international) and requesting the Gates Industrial Corporation Second-Quarter 2025 Earnings Conference Call or providing the Conference ID of 5772067. An audio replay of the conference call can be accessed by dialing (800) 770-2030 (domestic) or +1 (647) 362-9199 (international), and providing the passcode 5772067, or by accessing Gates Industrial's website at investors.gates.com.
About Gates Industrial Corporation plc
Gates is a global manufacturer of innovative, highly engineered power transmission and fluid power solutions. Gates offers a broad portfolio of products to diverse replacement channel customers, and to original equipment听 manufacturers ("OEM") as specified components. Gates participates in many sectors of the industrial and consumer markets. Our products play essential roles in a diverse range of applications across a wide variety of end markets ranging from harsh and hazardous industries such as agriculture, construction, manufacturing and energy, to everyday consumer applications such as printers, power washers, automatic doors and vacuum cleaners and virtually every form of transportation. Our products are sold in more than 130 countries across our four commercial regions: the
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In some cases, you can identify these forward-looking statements by the use of words such as "outlook," "believes," "expects," "potential," "continues," "may," "will," "should," "could," "seeks," "predicts," "intends," "trends," "plans," "estimates," "anticipates" or the negative version of these words or other comparable words. These statements include, but are not limited to, statements related to expectations regarding the performance of the Company's business (including our ability to drive operating improvements and higher cash flow) and financial results, statements regarding our investments in key growth initiatives, and statements regarding our outlook for 2025. Such forward-looking statements are subject to various risks and uncertainties, including, among others,
听
Gates Industrial Corporation plc Condensed Consolidated听Statements of Operations (Unaudited) 听 | |||||||
Three months ended | Six months ended | ||||||
(USD in millions, except per share amounts) | June 28, 2025 | June 29, 2024 | June 28, | June 29, | |||
Net sales | $听听听听听听听听听听听听听听听 883.7 | $听听听听听听听听听听 885.5 | $听听听听听听听听听听听 1,731.3 | $听听听听听听听听听听听 1,748.1 | |||
Cost of sales | 523.5 | 528.1 | 1,026.5 | 1,060.7 | |||
Gross profit | 360.2 | 357.4 | 704.8 | 687.4 | |||
Selling, general and administrative expenses | 231.2 | 221.2 | 447.4 | 436.3 | |||
Transaction-related expenses | 鈥� | 1.2 | 0.4 | 1.6 | |||
Asset impairments | 0.2 | 鈥� | 0.8 | 鈥� | |||
Restructuring expenses | 13.0 | 1.6 | 14.6 | 2.8 | |||
Other operating expenses | 鈥� | 0.1 | 鈥� | 0.1 | |||
Operating income from continuing operations | 115.8 | 133.3 | 241.6 | 246.6 | |||
Interest expense | 28.8 | 49.1 | 58.4 | 86.6 | |||
Other expenses (income) | 6.8 | (6.0) | 9.2 | (10.9) | |||
Income from continuing operations before taxes | 80.2 | 90.2 | 174.0 | 170.9 | |||
Income tax expense | 16.8 | 12.3 | 42.0 | 46.8 | |||
Net income from continuing operations | 63.4 | 77.9 | 132.0 | 124.1 | |||
Loss on disposal of discontinued operations | 0.3 | 0.3 | 0.6 | 0.4 | |||
Net income | 63.1 | 77.6 | 131.4 | 123.7 | |||
Less: non-controlling interests | 6.6 | 6.9 | 12.9 | 13.0 | |||
Net income attributable to shareholders | $听听听听听听听听听听听听听听听听听 56.5 | $听听听听听听听听听听听听听 70.7 | $听听听听听听听听听听听听听听 118.5 | $听听听听听听听听听听听听听听 110.7 | |||
Earnings per share | |||||||
Basic | |||||||
Earnings per share from continuing operations | $听听听听听听听听听听听听听听听听听 0.22 | $听听听听听听听听听听听听听 0.27 | $听听听听听听听听听听听听听听听听 0.46 | $听听听听听听听听听听听听听听听听 0.42 | |||
Earnings per share from discontinued operations | 鈥� | 鈥� | 鈥� | 鈥� | |||
Earnings per share | $听听听听听听听听听听听听听听听听听 0.22 | $听听听听听听听听听听听听听 0.27 | $听听听听听听听听听听听听听听听听 0.46 | $听听听听听听听听听听听听听听听听 0.42 | |||
Diluted | |||||||
Earnings per share from continuing operations | $听听听听听听听听听听听听听听听听听 0.22 | $听听听听听听听听听听听听听 0.26 | $听听听听听听听听听听听听听听听听 0.45 | $听听听听听听听听听听听听听听听听 0.41 | |||
Earnings per share from discontinued operations | 鈥� | 鈥� | 鈥� | 鈥� | |||
Earnings per share | $听听听听听听听听听听听听听听听听听 0.22 | $听听听听听听听听听听听听听 0.26 | $听听听听听听听听听听听听听听听听 0.45 | $听听听听听听听听听听听听听听听听 0.41 | |||
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Gates Industrial Corporation plc Condensed Consolidated听Balance Sheets (Unaudited) 听 | |||
(USD in millions, except share numbers and per share amounts) | As of | As of | |
Assets | |||
Current assets | |||
Cash and cash equivalents | $听听听听听听听听听听听听听听听 719.7 | $听听听听听听听听听听听听听听听 682.0 | |
Trade accounts receivable, net | 826.3 | 722.7 | |
Inventories | 729.0 | 676.0 | |
Taxes receivable | 39.5 | 28.6 | |
Prepaid expenses and other assets | 207.0 | 196.7 | |
Total current assets | 2,521.5 | 2,306.0 | |
Non-current assets | |||
Property, plant and equipment, net | 609.2 | 579.5 | |
Goodwill | 2,022.3 | 1,908.9 | |
Pension surplus | 5.7 | 5.7 | |
Intangible assets, net | 1,232.7 | 1,248.6 | |
Right-of-use assets | 142.4 | 139.4 | |
Taxes receivable | 20.2 | 20.7 | |
Deferred income taxes | 628.6 | 553.5 | |
Other non-current assets | 35.2 | 24.0 | |
Total assets | $听听听听听听听听听听听 7,217.8 | $听听听听听听听听听听听 6,786.3 | |
Liabilities and equity | |||
Current liabilities | |||
Debt, current portion | $听听听听听听听听听听听听听听听听听 39.8 | $听听听听听听听听听听听听听听听听听 39.1 | |
Trade accounts payable | 411.3 | 408.2 | |
Taxes payable | 27.3 | 22.9 | |
Accrued expenses and other current liabilities | 250.9 | 251.3 | |
Total current liabilities | 729.3 | 721.5 | |
Non-current liabilities | |||
Debt, less current portion | 2,304.9 | 2,311.5 | |
Post-retirement benefit obligations | 76.7 | 78.0 | |
Lease liabilities | 128.5 | 127.3 | |
Taxes payable | 84.7 | 82.2 | |
Deferred income taxes | 52.1 | 56.8 | |
Other non-current liabilities | 229.9 | 68.7 | |
Total liabilities | 3,606.1 | 3,446.0 | |
Shareholders' equity | |||
鈥擲hares, par value of | 2.6 | 2.6 | |
鈥擜dditional paid-in capital | 2,621.0 | 2,618.6 | |
鈥擜ccumulated other comprehensive loss | (940.0) | (1,077.2) | |
鈥擱etained earnings | 1,585.4 | 1,479.6 | |
Total shareholders' equity | 3,269.0 | 3,023.6 | |
Non-controlling interests | 342.7 | 316.7 | |
Total equity | 3,611.7 | 3,340.3 | |
Total liabilities and equity | $听听听听听听听听听听听 7,217.8 | $听听听听听听听听听听听 6,786.3 | |
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Gates Industrial Corporation plc Condensed Consolidated Statements of Cash Flows (Unaudited) 听 | |||
Six months ended | |||
(USD in millions) | June 28, | June 29, | |
Net income | 131.4 | 123.7 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 105.5 | 109.1 | |
Foreign exchange and other non-cash financing income | (12.6) | (11.9) | |
Share-based compensation expense | 15.7 | 13.8 | |
Decrease in post-employment benefit obligations, net | (4.4) | (4.2) | |
Deferred income taxes | (11.0) | (13.2) | |
Asset impairments | 0.8 | 鈥� | |
Gain on disposal of property, plant and equipment | 鈥� | (7.2) | |
Other operating activities | 5.8 | (1.2) | |
Changes in operating assets and liabilities: | |||
鈥擜ccounts receivable | (63.5) | (56.9) | |
鈥擨苍惫别苍迟辞谤颈别蝉 | (16.4) | (66.0) | |
鈥擜ccounts payable | (16.7) | (3.2) | |
鈥擯repaid expenses and other assets | (13.0) | 13.6 | |
鈥擳axes payable | (1.6) | (1.4) | |
鈥擮ther liabilities | (9.7) | (22.2) | |
Net cash provided by operating activities | 110.3 | 72.8 | |
Cash flows from investing activities | |||
Purchases of property, plant and equipment | (36.9) | (37.9) | |
Purchases of intangible assets | (18.7) | (7.4) | |
Purchases of investments | 鈥� | (11.2) | |
Cash paid under company-owned life insurance policies | (10.4) | (4.1) | |
Cash received under company-owned life insurance policies | 2.4 | 10.0 | |
Proceeds from the sale of property, plant and equipment | 2.1 | 10.5 | |
Other investing activities | (0.5) | 鈥� | |
Net cash used in investing activities | (62.0) | (40.1) | |
Cash flows from financing activities | |||
Issuance of shares | 4.7 | 7.1 | |
Repurchase of shares | (13.0) | (50.3) | |
Proceeds from long-term debt | 鈥� | 1,800.0 | |
Payments of long-term debt | (9.4) | (1,907.0) | |
Debt issuance costs paid | 鈥� | (17.7) | |
Employee taxes paid from shares withheld | (16.9) | (2.4) | |
Dividends paid to non-controlling interests | (3.5) | 鈥� | |
Other financing activities | 4.7 | 12.7 | |
Net cash used in financing activities | (33.4) | (157.6) | |
Effect of exchange rate changes on cash and cash equivalents and restricted cash | 23.1 | (16.2) | |
Net increase (decrease) in cash and cash equivalents and restricted cash | 38.0 | (141.1) | |
Cash and cash equivalents and restricted cash at the beginning of the period | 684.8 | 724.0 | |
Cash and cash equivalents and restricted cash at the end of the period | $听听听听听听听听听听听听听听听 722.8 | $听听听听听听听听听听听听听听听 582.9 | |
Supplemental schedule of cash flow information | |||
Interest paid | $听听听听听听听听听听听听听听听听听 56.8 | $听听听听听听听听听听听听听听听听听 86.0 | |
Income taxes paid | $听听听听听听听听听听听听听听听听听 54.7 | $听听听听听听听听听听听听听听听听听 61.4 | |
Accrued capital expenditures | $听听听听听听听听听听听听听听听听听听听 0.9 | $听听听听听听听听听听听听听听听听听听听 1.4 | |
Non-GAAP Financial Measures
This press release includes certain non-GAAP financial measures, which management believes are useful to investors, securities analysts and other interested parties. Management uses Adjusted EBITDA as its key profitability measure. This is a non-GAAP measure that represents EBITDA before certain items that impact comparison of the performance of our business either period-over-period or with other businesses. We use Adjusted EBITDA as our measure of segment profitability to assess the performance of our businesses, and it is used for total Gates as well because we believe it is important to consider our total profitability on a basis that is consistent with that of our operating segments. Adjusted EBITDA Margin is Adjusted EBITDA for a particular period expressed as a percentage of net sales for that period.
Management uses Adjusted Net Income as an additional measure of profitability. Adjusted Net Income is a non-GAAP measure that represents net income attributable to shareholders before certain items that impact comparison of the performance of our business, either period-over-period or with other businesses. Beginning with the three months ended June 29, 2024, we revised our definition of Adjusted Net Income to adjust for discrete tax items, which are significant, unusual or infrequently occurring tax items. We have revised the prior period amounts to conform to our current period presentation.
Core sales is a non-GAAP measure that represents net sales for the period excluding the impacts of movements in average currency exchange rates and the first-year impacts of acquisitions and disposals, when applicable. Core sales growth is the change in core sales expressed as a percentage of prior period net sales. We present core sales growth because it allows for a meaningful comparison of year-over-year performance without the volatility caused by foreign currency gains or losses, or the incomparability that would be caused by the impact of an acquisition or disposal.
Management uses Free Cash Flow to measure cash generation. Free Cash Flow is a non-GAAP measure that represents net cash provided by operations less capital expenditures. Free Cash Flow Conversion is a measure of Free Cash Flow expressed as a percentage of Adjusted Net Income. We use this metric as a measure of the success of our business in converting Adjusted Net Income into cash.
These non-GAAP financial measures should be considered only as supplemental to, and not as superior to, financial measures prepared in accordance with GAAP. Please see below for a reconciliation of historical non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with GAAP.
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Gates Industrial Corporation plc Reconciliation of Net Income from Continuing Operations to Adjusted EBITDA (Unaudited) 听 | |||||||
Three months ended | Six months ended | ||||||
(USD in millions) | June 28, | June 29, | June 28, | June 29, | |||
Net income from continuing operations | $听听听听听听听听听听听听听听 63.4 | $听听听听听听听听听听听听听听 77.9 | $听听听听听听听听听听听 132.0 | $听听听听听听听听听听听 124.1 | |||
Adjusted for: | |||||||
Income tax expense | 16.8 | 12.3 | 42.0 | 46.8 | |||
Interest expense | 28.8 | 49.1 | 58.4 | 86.6 | |||
Depreciation and amortization | 53.3 | 54.5 | 105.5 | 109.1 | |||
Transaction-related expenses听(1) | 鈥� | 1.2 | 0.4 | 1.6 | |||
Asset impairments | 0.2 | 鈥� | 0.8 | 鈥� | |||
Restructuring expenses听(2) | 13.0 | 1.6 | 14.6 | 2.8 | |||
Share-based compensation expense | 9.6 | 5.2 | 15.7 | 13.8 | |||
Inventory write-offs and adjustments (3) (included in cost of sales) | 4.0 | 3.4 | 3.0 | 17.3 | |||
Restructuring-related expenses (included in cost of sales) | 1.2 | 鈥� | 2.4 | 鈥� | |||
Restructuring-related expenses (included in SG&A) | 3.1 | 鈥� | 4.6 | 0.1 | |||
Credit loss related to customer bankruptcy (Included in SG&A) | 鈥� | 鈥� | 鈥� | 0.1 | |||
Other expenses (income), excluding foreign currency transaction gain or loss (4) | 5.8 | (3.1) | 7.1 | (4.6) | |||
Other items not directly related to current operations | 鈥� | 0.1 | 鈥� | 0.1 | |||
Adjusted EBITDA | $听听听听听听听听听听听 199.2 | $听听听听听听听听听听听 202.2 | $听听听听听听听听听听听 386.5 | $听听听听听听听听听听听 397.8 | |||
Net Sales | $听听听听听听听听听听听 883.7 | $听听听听听听听听听听听 885.5 | $听听听听听听听听 1,731.3 | $听听听听听听听听 1,748.1 | |||
Net income from continuing operations margin | 7.2听% | 8.8听% | 7.6听% | 7.1听% | |||
Adjusted EBITDA Margin | 22.5听% | 22.8听% | 22.3听% | 22.8听% | |||
(1) | Transaction-related expenses relate primarily to advisory fees and other costs recognized in respect of major corporate transactions, including the acquisition of businesses, and equity and debt transactions. 听 |
(2) | Restructuring expenses represent items qualifying for recognition as such under 听 |
(3) | Inventory write-offs and adjustments include the reversal of the adjustment to remeasure certain inventories on a Last-in-First-out ("LIFO") basis. 听 |
(4) | Other expenses (income) excludes foreign currency transaction losses of |
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Gates Industrial Corporation plc Reconciliation of Net Income Attributable to Shareholders to Adjusted Net Income (Unaudited) 听 | |||||||
Three months ended | Six months ended | ||||||
(USD in millions, except share numbers and per share amounts) | June 28, | June 29, | June 28, | June 29, | |||
Net income attributable to shareholders | $听听听听听听听听听听听听听听听听听 56.5 | $听听听听听听听听听听听听听听听听听 70.7 | $听听听听听听听听听听听听听听听 118.5 | $听听听听听听听听听听听听听听听 110.7 | |||
Adjusted for: | |||||||
Loss on disposal of discontinued operations | 0.3 | 0.3 | 0.6 | 0.4 | |||
Amortization of intangible assets arising from the 2014 acquisition of Gates | 29.0 | 28.9 | 57.3 | 58.0 | |||
Transaction-related expenses (1) | 鈥� | 1.2 | 0.4 | 1.6 | |||
Asset impairments | 0.2 | 鈥� | 0.8 | 鈥� | |||
Restructuring expenses (2) | 13.0 | 1.6 | 14.6 | 2.8 | |||
Restructuring-related expenses (included in cost of sales) | 1.2 | 鈥� | 2.4 | 鈥� | |||
Restructuring-related expenses (included in SG&A) | 3.1 | 鈥� | 4.6 | 0.1 | |||
Share-based compensation expense | 9.6 | 5.2 | 15.7 | 13.8 | |||
Inventory write-offs and adjustments (3) (included in cost of sales) | 4.0 | 3.4 | 3.0 | 17.3 | |||
Adjustments relating to post-retirement benefits | 0.5 | (0.6) | 0.9 | (1.3) | |||
Financing and other FX related losses | 7.8 | (3.0) | 11.0 | (1.5) | |||
Loss on extinguishment of debt (4) | 鈥� | 14.8 | 鈥� | 14.8 | |||
Credit loss related to customer bankruptcy (included in SG&A) | 鈥� | 鈥� | 鈥� | 0.1 | |||
Discrete tax items (5) | (7.2) | (12.2) | (7.1) | (0.5) | |||
Other adjustments | (1.5) | (1.7) | (2.8) | (3.5) | |||
Estimated tax effect of the above adjustments | (15.4) | (13.1) | (24.9) | (25.5) | |||
Adjusted Net Income | $听听听听听听听听听听听听听听听 101.1 | $听听听听听听听听听听听听听听听听听 95.5 | $听听听听听听听听听听听听听听听 195.0 | $听听听听听听听听听听听听听听听 187.3 | |||
Diluted weighted-average number of shares outstanding | 260,469,532 | 266,812,510 | 261,005,482 | 266,951,237 | |||
GAAP Net Income per diluted share | $听听听听听听听听听听听听听听听听听 0.22 | $听听听听听听听听听听听听听听听听听 0.26 | $听听听听听听听听听听听听听听听听听 0.45 | $听听听听听听听听听听听听听听听听听 0.41 | |||
Adjusted Net Income per diluted share | $听听听听听听听听听听听听听听听听听 0.39 | $听听听听听听听听听听听听听听听听听 0.36 | $听听听听听听听听听听听听听听听听听 0.75 | $听听听听听听听听听听听听听听听听听 0.70 | |||
(1) | Transaction-related expenses related primarily to advisory fees and other costs recognized in respect of major corporate transactions, including the acquisition of businesses, and equity and debt transactions. 听 |
(2) | Restructuring expenses represent items qualifying for recognition as such under 听 |
(3) | Inventory write-offs and adjustments include the reversal of the adjustment to remeasure certain inventories on a Last-in-First-out ("LIFO") basis. 听 |
(4) | On June 4, 2024, Gates extinguished the 2021 Dollar Term Loans and the asset-backed credit facility in connection with our debt refinancing. As a result, we accelerated 听 |
(5) | For the three months ended June 28, 2025, the effective tax rate was driven primarily by net discrete tax benefits of 听 For the six months ended June 28, 2025, the effective tax rate was driven primarily by net discrete tax benefits of听 |
听
Gates Industrial Corporation plc Reconciliation of Net Sales to Core Sales Growth (Unaudited) 听 | |||||
Three months ended June 28, 2025 | |||||
(USD in millions) | Power | Fluid Power | Total | ||
Net sales for the three months ended June 28, 2025 (1) | $听听听听听听听听听听听听 550.1 | $听听听听听听听听听听听听 333.6 | $听听听听听听听听听听听 883.7 | ||
Impact on net sales of movements in currency rates | (5.2) | 1.5 | (3.7) | ||
Core sales for the three months ended June 28, 2025 | $听听听听听听听听听听听 544.9 | $听听听听听听听听听听听 335.1 | $听听听听听听听听听听听 880.0 | ||
Net sales for the three months ended June 29, 2024 | 541.9 | 343.6 | 885.5 | ||
Increase (decrease) in net sales | 8.2 | (10.0) | (1.8) | ||
Increase (decrease)听 in net sales on a core basis (core sales) | $听听听听听听听听听听听听听听听听 3.0 | $听听听听听听听听听听听听听听 (8.5) | $听听听听听听听听听听听听听听 (5.5) | ||
Net sales growth (decline) | 1.5听% | (2.9听%) | (0.2听%) | ||
Core sales growth (decline) | 0.6听% | (2.5听%) | (0.6听%) | ||
听
Six months ended June 28, 2025 | |||||
(USD in millions) | Power | Fluid Power | Total | ||
Net sales for the six months ended June 28, 2025 | $听听听听听听听听 1,077.3 | $听听听听听听听听听听听听 654.0 | $听听听听听听听听 1,731.3 | ||
Impact on net sales of movements in currency rates | 11.7 | 11.2 | 22.9 | ||
Core sales for the six months ended June 28, 2025 | $听听听听听听听听 1,089.0 | $听听听听听听听听听听听 665.2 | $听听听听听听听听 1,754.2 | ||
Net sales for the six months ended June 29, 2024 | 1,074.7 | 673.4 | 1,748.1 | ||
Increase (decrease) in net sales | 2.6 | (19.4) | (16.8) | ||
Increase (decrease) in net sales on a core basis (core sales) | $听听听听听听听听听听听听听听 14.3 | $听听听听听听听听听听听听听听 (8.2) | $听听听听听听听听听听听听听听听听 6.1 | ||
Net sales growth (decline) | 0.2听% | (2.9听%) | (1.0听%) | ||
Core sales growth (decline) | 1.3听% | (1.2听%) | 0.3听% | ||
(1) | Throughout this document the terms "net sales" and "revenue" are used interchangeably in reference to the GAAP measure "net sales." |
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