Market Newsdesk

April 28, 2021 6:58 am

Teledyne Technologies Reports First Quarter Results

Teledyne Technologies Reports First Quarter Results

THOUSAND OAKS, Calif.–(BUSINESS WIRE)–
Teledyne Technologies Incorporated (NYSE:TDY):

Record first quarter sales of $805.7 million
Record first quarter GAAP diluted earnings per share of $2.23
First quarter adjusted diluted earnings per share of $3.02 increased 39.2% and excluded pretax charges of $39.0 million ($0.79 per share) related to the pending acquisition of FLIR Systems, Inc., compared to prior outlook of $2.55 to $2.60, which also excluded FLIR
Record first quarter GAAP operating margin of 16.8% and adjusted operating margin of 17.5%, excluding pretax charges of $5.9 million related to the FLIR acquisition
Record first quarter cash flow from operations
Raising full year 2021 adjusted earnings outlook to $12.00 to $12.20 per share, which excludes charges and income related to FLIR, compared to the prior outlook of $11.25 to $11.45, which also excluded FLIR
Expect to complete the acquisition of FLIR on May 14, 2021

Teledyne today reported first quarter 2021 net sales of $805.7 million, compared with net sales of $784.6 million for the first quarter of 2020, an increase of 2.7%. Net income was $84.7 million ($2.23 diluted earnings per share) for the first quarter of 2021, compared with $82.2 million ($2.17 diluted earnings per share) for the first quarter of 2020, an increase of 3.0%. In connection with the pending acquisition of FLIR Systems, Inc. (“FLIR”), Teledyne incurred pretax charges of $39.0 million in the first quarter of 2021 which included $33.1 million in interest and debt expense related to obtaining permanent financing for the pending acquisition and $5.9 million in corporate expense for related transaction costs. Excluding these charges adjusted net income for the first quarter of 2021 was $114.9 ($3.02 per share). The first quarter of 2021 included $1.0 million in severance and facility consolidation costs, compared with $10.4 million in severance, facility consolidation, acquisition and certain changes in contract cost estimates for the first quarter of 2020. Operating margin was 16.8% for the first quarter of 2021, compared with 13.3% for the first quarter of 2020. Excluding the expenses related to the FLIR acquisition, adjusted operating margin for the first quarter of 2021 was 17.5%. The first quarter of 2021 reflected net discrete income tax benefits of $6.3 million compared with net discrete income tax benefits of $4.2 million for the first quarter of 2020.

“We began 2021 with the best first quarter sales, earnings, operating margin and cash flow in the company’s history,” said Robert Mehrabian, Executive Chairman. “Furthermore, we achieved these GAAP results despite incurring significant expenses related to the pending acquisition of FLIR. Excluding expenses related to FLIR, adjusted diluted earnings per share increased 39.2% compared with last year, primarily by maintaining the lower cost structure achieved in 2020 through reductions in force and initiatives directed toward improved margins. Sales increased in nearly every major business category except commercial aerospace. In addition, operating margin increased significantly in every business segment. I am very pleased with the breadth of our performance across both our commercial and government businesses. I remain especially excited about Teledyne’s future, both individually and even more so when combined with FLIR. Regarding the pending acquisition, our respective stockholder votes are scheduled for May 13. Pending stockholder approval and satisfaction of other closing conditions, we expect to complete the transaction the following morning.”

Review of Operations

Comparisons are with the first quarter of 2020, unless noted otherwise.

Instrumentation

The Instrumentation segment’s first quarter 2021 net sales were $286.5 million, compared with $285.1 million, an increase of 0.5%. Operating income was $59.4 million for the first quarter of 2021, compared with $50.8 million, an increase of 16.9%.

The first quarter 2021 net sales increase resulted from higher sales of environmental instrumentation and test and measurement instrumentation, mostly offset by lower sales of marine instrumentation. Sales of environmental instrumentation and test and measurement instrumentation increased $5.5 million and $3.2 million, respectively. Sales of marine instrumentation decreased $7.3 million. The increase in operating income reflected improved margins across most product categories resulting from ongoing margin improvement initiatives.

Digital Imaging

The Digital Imaging segment’s first quarter 2021 net sales were $263.3 million, compared with $246.7 million, an increase of 6.7%. Operating income was $52.0 million for the first quarter of 2021, compared with $43.8 million, an increase of 18.7%.

The first quarter 2021 net sales primarily reflected greater sales of industrial and scientific sensors and cameras, detectors for space imaging applications, as well as geospatial imaging systems. The increase in operating income in the first quarter of 2021 reflected the increase in sales as well as improved margins across most product categories.

Aerospace and Defense Electronics

The Aerospace and Defense Electronics segment’s first quarter 2021 net sales were $151.2 million, compared with $156.3 million, a decrease of 3.3%. Operating income was $28.3 million for the first quarter of 2021, compared with $13.4 million, an increase of 111.2%.

The first quarter 2021 net sales reflected $10.7 million of lower sales for aerospace electronics, partially offset by higher sales of $5.6 million for defense and space electronics. The continued weakness in the commercial aerospace industry has negatively affected sales of aerospace electronics. Operating income in the first quarter of 2021 reflected the impact of a lower cost structure due to actions taken in 2020, lower severance, facility consolidation and lower research and development costs. Operating income in the first quarter of 2021 included $0.2 million in severance and facility consolidation costs, compared with $8.2 million in severance, facility consolidation and certain changes in contract cost estimates for the first quarter of 2020. Research and development expense was lower by $4.7 million in the first quarter of 2021, and primarily reflected lower spending for aerospace electronics.

Engineered Systems

The Engineered Systems segment’s first quarter 2021 net sales were $104.7 million compared with $96.5 million, an increase of 8.5%. Operating income was $14.9 million for the first quarter of 2021, compared with $11.4 million, an increase of 30.7%.

The first quarter 2021 net sales primarily reflected higher sales of $8.7 million of engineered products and $0.3 million for turbine engines, partially offset by lower sales of $0.8 million of energy systems. The higher sales primarily reflected increased sales from defense and other manufacturing programs, as well as electronic manufacturing services products. The increase in operating income in the first quarter of 2021 reflected the impact of higher sales and a greater mix of higher margin fixed-price manufacturing programs.

Additional Financial Information

Cash Flow

Cash provided by operating activities was $124.9 million for the first quarter of 2021, compared with $76.4 million. The higher cash flow from operating activities for the first quarter of 2021 reflected improved working capital management, which included a focus on inventory reduction initiatives, partially offset by higher income tax payments and after tax payments of $2.8 million for expenses related to the pending FLIR acquisition. At April 4, 2021, net debt was $9.1 million and comprised of cash and cash equivalents of $3,234.2 million and total debt of $3,243.3 million. At January 3, 2021, net debt was $105.4 million and comprised of cash and cash equivalents of $673.1 million and total debt of $778.5. The higher cash and cash equivalents balance at April 4, 2021, included the proceeds of debt incurred to partially fund the pending acquisition of FLIR, described below. The company received $10.8 million from the exercise of stock options in the first quarter of 2021 compared with $10.2 million. Capital expenditures for the first quarter of 2021 were $17.6 million compared with $20.2 million. Depreciation and amortization expense for both the first quarter of 2021 and 2020 was $29.3 million.

Free Cash Flow (a)	First Quarter
(in millions, brackets indicate use of funds)	2021			2020
Cash provided by operating activities	$	124.9		$	76.4
Capital expenditures for property, plant and equipment	(17.6		)	(20.2		)
Free cash flow	107.3			56.2
FLIR related transaction cash payments, net of tax	2.8			—
Adjusted free cash flow	$	110.1		$	56.2

(a) The company defines free cash flow as cash provided by operating activities (a measure prescribed by generally accepted accounting principles) less capital expenditures for property, plant and equipment. Adjusted free cash flow eliminates the impact of cash paid for transaction related expenses for the pending FLIR acquisition on a net of tax basis. The company believes that this supplemental non-GAAP information is useful to assist management and the investment community in analyzing the company’s ability to generate cash flow.

Pending FLIR acquisition and debt activities

Teledyne and FLIR have entered into a definitive agreement under which Teledyne will acquire FLIR in a cash and stock transaction valued at approximately $8.0 billion. Under the terms of the agreement, FLIR stockholders will receive $28.00 per share in cash and 0.0718 shares of Teledyne common stock for each FLIR share, which implied a total purchase price of $56.00 per FLIR share based on Teledyne’s 5-day volume weighted average price as of December 31, 2020. The transaction is expected to close on May 13, 2021, subject to the receipt of required remaining regulatory approvals, including approvals of Teledyne and FLIR stockholders and other customary closing conditions. In the quarter, Teledyne completed various financing activities related to the pending acquisition of FLIR and incurred related interest expense totaling $33.1 million. These activities included entering into a $4.5 billion short term stand-by bridge facility on January 4, 2021, as required by the definitive agreement, resulting in interest expense of $17.2 million. In addition, on March 17, 2021, Teledyne called $493.3 million of existing fixed rate senior notes and incurred debt extinguishment expenses of $13.4 million. On March 22, 2021, Teledyne completed all permanent financing for the pending acquisition of FLIR. The permanent financing consists of $3.0 billion investment-grade bonds (the “Notes”), including $300.0 million aggregate principal amount of 0.65% Notes due 2023, $450.0 million aggregate principal amount of 0.95% Notes due 2024, $450.0 million aggregate principal amount of 1.60% Notes due 2026, $700.0 million aggregate principal amount of 2.25% Notes due 2028 and $1.1 billion aggregate principal amount of 2.75% Notes due 2031. Given the permanent financing, together with certain continuing debt, Teledyne expects its weighted average borrowing cost to be less than two percent upon closing the acquisition. The interest expense incurred in the quarter associated with the $3.0 billion Notes offering related to the pending FLIR acquisition totaled $2.5 million. Previously on March 4, 2021, Teledyne entered into a $1.0 billion Term Loan Credit Agreement and Amended and Restated Credit Agreement with capacity of $1.15 billion both maturing on March 4, 2026. As a result of the completion of the permanent debt financing, on March 22, 2021 Teledyne terminated the $4.5 billion stand-by bridge facility. Teledyne intends to use the proceeds from the Notes together with the proceeds from the $1.0 billion term loan and cash on hand to pay the cash portion of the consideration for the FLIR acquisition and refinance certain existing debt.

At April 4, 2021, total debt was $3,243.3 million, compared with total debt of $778.5 million at January 3, 2021. The debt balance at April 4, 2021, includes the debt incurred to fund the cash portion of the consideration for the FLIR acquisition. At April 4, 2021, $125.0 million was outstanding under the $750.0 million credit facility with available borrowing capacity under the facility, which is reduced by borrowings and certain outstanding letters of credit, of $616.0 million.

Income Taxes

The effective tax rate for the first quarter of 2021 was 16.4% compared with 18.6%. The first quarter of 2021 reflected net discrete income tax benefits of $6.3 million, which included a $4.8 million income tax benefit related to share-based accounting. The first quarter of 2020 reflected net discrete income tax benefits of $4.2 million which included $4.7 million in income tax benefit related to share-based accounting. Excluding the net discrete income tax benefits in both periods, the effective tax rates would have been 22.6% for the first quarter of 2021 compared with 22.8%.

Other

Stock option expense was $4.2 million for the first quarter of 2021 compared with $7.4 million. Stock option expense for fiscal year 2021 is currently expected to be $20.8 million based on current options outstanding and stock options expected to be granted in the third quarter of 2021, compared with $24.7 million for fiscal year 2020. The decrease in stock option expense in the first quarter of 2021, reflects the absence of stock option grants in the first quarter of 2021. Non-service retirement benefit income was $2.8 million for the first quarter of 2021, compared with $2.5 million. Interest expense, net of interest income, increased to $35.7 million for the first quarter of 2021 compared with $4.1 million. The higher 2021 amount included $33.1 million in interest and debt expense in connection with the pending FLIR acquisition. Corporate expense increased to $19.4 million for the first quarter of 2021, compared with $15.4 million. The higher 2021 amount included $5.9 million of transaction costs related to the pending FLIR acquisition.

Outlook

Based on its current outlook, the company’s management believes that second quarter 2021 adjusted diluted earnings per share will be in the range of $2.85 to $2.95 and full year 2021 adjusted diluted earnings per share will be in the range of $12.00 to $12.20. This outlook does not reflect the pending acquisition of FLIR and related transaction and financing costs, which cannot be estimated at this time, but are expected to be significant, and the issuance of Teledyne common stock in the transaction as contemplated by the definitive merger agreement. The total year 2021 adjusted diluted earnings per share outlook is an increase from the prior outlook of $11.25 to $11.45. The company’s annual expected tax rate for 2021 is 22.6%, before discrete tax items. In addition, we currently expect less discrete tax items in 2021 compared with 2020.

Use of Non-GAAP Financial Measures

We report our financial results in accordance with generally accepted accounting principles in the United States (“GAAP”). We supplement the reporting of our financial results determined under GAAP with certain non-GAAP financial measures. The non-GAAP financial measures presented provides management, analysts, and investors with additional useful information in evaluating the performance of the company. The non-GAAP financial measures should be considered in addition to, and not as a substitute for, financial measures prepared in accordance with GAAP. Further details on reasons that we use 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 following our GAAP financial statements.

Forward-Looking Statements Cautionary Notice

This earnings release contains forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995, with respect to management’s beliefs about the financial condition, results of operations and businesses of Teledyne in the future. Forward-looking statements involve risks and uncertainties, are based on the current expectations of the management of Teledyne and are subject to uncertainty and changes in circumstances.

The forward-looking statements contained herein may include statements about the expected effects on Teledyne of the proposed acquisition of FLIR and related financing, the anticipated timing and scope of the proposed transaction, anticipated earnings enhancements, estimated cost savings and other synergies related to the proposed transaction, costs to be incurred in achieving synergies, anticipated capital expenditures and product developments, and other strategic options. Forward-looking statements generally are accompanied by words such as “projects”, “intends”, “expects”, “anticipates”, “targets”, “estimates”, “will” and words of similar import that convey the uncertainty of future events or outcomes. All statements made in this communication that are not historical in nature should be considered forward-looking. By its nature, forward-looking information is not a guarantee of future performance or results and involves risks and uncertainties because it relates to events and depends on circumstances that will occur in the future.

Actual results could differ materially from these forward-looking statements. Many factors could change anticipated results, including ongoing challenges and uncertainties posed by the COVID-19 pandemic for businesses and governments around the world; the occurrence of any event, change or other circumstances that could give rise to the right of Teledyne or FLIR or both to terminate the Merger Agreement; the outcome of any legal proceedings that may be instituted against Teledyne or FLIR in connection with the Merger Agreement; the failure to obtain necessary regulatory approvals (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the transaction) or stockholder approvals or to satisfy any of the other conditions to the proposed transaction on a timely basis or at all; the inability to complete the acquisition and integration of FLIR successfully, to retain customers and key employees and to achieve operating synergies, including the possibility that the anticipated benefits of the proposed transaction are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy and competitive factors in the areas where Teledyne and FLIR do business; the possibility that the proposed transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; the parties’ ability to meet expectations regarding the timing, completion and accounting and tax treatments of the proposed transaction; dilution related to the issuance of Teledyne stock in the acquisition to the holders of FLIR stock, which will result in Teledyne stockholders having lower ownership and voting interests in Teledyne than they currently have and exercising less influence over management; changes in relevant tax and other laws; the inability to develop and market new competitive products; inherent uncertainties involved in the estimates and judgments used in the preparation of financial statements and the providing of estimates of financial measures, in accordance with U.S. GAAP and related standards; operating results of FLIR being lower than anticipated; disruptions in the global economy; the spread of the COVID-19 virus resulting in production, supply, contractual and other disruptions, including facility closures and furloughs and travel restrictions; customer and supplier bankruptcies; changes in demand for products sold to the defense electronics, instrumentation, digital imaging, energy exploration and production, commercial aviation, semiconductor and communications markets; funding, continuation and award of government programs; cuts to defense spending resulting from existing and future deficit reduction measures or changes to U.S. and foreign government spending and budget priorities triggered by the COVID-19 pandemic; impacts from the United Kingdom’s exit from the European Union; uncertainties related to the policies of the new U.S. Presidential Administration; the imposition and expansion of, and responses to, trade sanctions and tariffs; escalating economic and diplomatic tension between China and the United States; and threats to the security of our confidential and proprietary information, including cyber security threats. Lower oil and natural gas prices, as well as instability in the Middle East or other oil producing regions, and new regulations or restrictions relating to energy production, including with respect to hydraulic fracturing, could further negatively affect our businesses that supply the oil and gas industry. Continued weakness in the commercial aerospace industry will negatively affect the markets of our commercial aviation businesses. In addition, financial market fluctuations affect the value of the company’s pension assets.

Changes in the policies of U.S. and foreign governments, including economic sanctions, could result, over time, in reductions or realignment in defense or other government spending and further changes in programs in which the company participates.

Additional factors that could cause results to differ materially from those described above can be found in Teledyne’s Annual Report on Form 10-K for the year ended January 3, 2021, and subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, all of which are on file with the SEC and available in the “Investors” section of Teledyne’s website, teledyne.com, under the heading “Investor Information” and in other documents Teledyne files with the SEC, and in FLIR’s Annual Report on Form 10-K for the year ended December 31, 2020, and subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, all of which are on file with the SEC and available on the “Investor Relations” page of FLIR’s website, flir.com, under the heading “Filings and Financials” and in other documents FLIR files with the SEC.

All forward-looking statements speak only as of the date they are made and are based on information available at that time. Neither Teledyne nor FLIR assumes any obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made or to reflect the occurrence of unanticipated events except as required by federal securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.

Additional Information and Where to Find It

In connection with the proposed transaction between Teledyne Technologies Incorporated (“Teledyne”) and FLIR, Teledyne has filed with the Securities and Exchange Commission (the “SEC”) a Registration Statement on Form S-4 , as amended by Amendment No. 1, that includes a joint proxy statement of Teledyne and FLIR and a prospectus of Teledyne, as well as other relevant documents concerning the proposed transaction. The Registration Statement on Form S-4 became effective on April 12, 2021. The proposed transaction involving Teledyne and FLIR will be submitted to Teledyne’s stockholders and FLIR’s stockholders for their consideration. Stockholders of Teledyne and stockholders of FLIR are urged to read the registration statement and the joint proxy statement/prospectus regarding the transaction when they become available and any other relevant documents filed with the SEC, as well as any amendments or supplements to those documents, because they will contain important information.

Stockholders may obtain a free copy of the definitive joint proxy statement/prospectus, as well as other filings containing information about Teledyne and FLIR, without charge, at the SEC’s website (http://www.sec.gov). Copies of the joint proxy statement/prospectus and the filings with the SEC that will be incorporated by reference in the joint proxy statement/prospectus can also be obtained, without charge, by directing a request to Teledyne, Attn: Investor Relations, 1049 Camino Dos Rios, Thousand Oaks, California 91360, or to FLIR, Attn: Corporate Secretary, 1201 S Joyce St, Arlington, Virginia 22202.

Participants in the Solicitation

Teledyne, FLIR and certain of their respective directors, executive officers and employees may be deemed to be participants in the solicitation of proxies in connection with the proposed transaction. Information regarding Teledyne’s directors and executive officers is available in its definitive proxy statement for its 2020 Annual Meeting, which was filed with the SEC on March 10, 2020, its Annual Report on Form 10-K for the year ended January 3, 2021, which was filed with the SEC on February 25, 2021, and certain of its Current Reports on Form 8-K. Information regarding FLIR’s directors and executive officers is available in its definitive proxy statement, which was filed with the SEC on March 11, 2020, and certain of its Current Reports on Form 8-K. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the joint proxy statement/prospectus and other relevant materials filed with the SEC. Free copies of this document may be obtained as described in the preceding paragraph.

No Offer or Solicitation

This communication shall not constitute an offer to sell or the solicitation of an offer to sell or an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933.

A live webcast of Teledyne’s first quarter earnings conference call will be held at 11:00 a.m. (Eastern) on Wednesday, April 28, 2021. To access the call, go to www.teledyne.com/investors/events-and-presentations approximately ten minutes before the scheduled start time. A replay will also be available for one month starting at 12:00 p.m. (Eastern) on Wednesday, April 28, 2021.


TELEDYNE TECHNOLOGIES INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED APRIL 4, 2021 AND MARCH 29, 2020 (Unaudited – in millions, except per share amounts)

	First Quarter			First Quarter
	2021			2020
Net sales	$	805.7		$	784.6
Costs and expenses:
Costs of sales	492.5			492.6
Selling, general and administrative expenses	178.0			188.0
Total costs and expenses	670.5			680.6
Operating income	135.2			104.0
Interest and debt expense, net	(35.7		)	(4.1		)
Non-service retirement benefit income	2.8			2.5
Other expense, net	(1.0		)	(1.4		)
Income before income taxes	101.3			101.0
Provision for income taxes	16.6			18.8
Net income	$	84.7		$	82.2

Diluted earnings per common share	$	2.23		$	2.17

Weighted average diluted common shares outstanding	38.0			37.8


TELEDYNE TECHNOLOGIES INCORPORATED SUMMARY OF SEGMENT NET SALES AND OPERATING INCOME FOR THE THREE MONTHS ENDED APRIL 4, 2021 AND MARCH 29, 2020 (Unaudited – in millions)

	First Quarter			First Quarter			% Change
	2021			2020			% Change
Net sales:
Instrumentation	$	286.5		$	285.1		0.5	%
Digital Imaging	263.3			246.7			6.7	%
Aerospace and Defense Electronics	151.2			156.3			(3.3	)%
Engineered Systems	104.7			96.5			8.5	%
Total net sales	$	805.7		$	784.6		2.7	%
Operating income:
Instrumentation	$	59.4		$	50.8		16.9	%
Digital Imaging	52.0			43.8			18.7	%
Aerospace and Defense Electronics	28.3			13.4			111.2	%
Engineered Systems	14.9			11.4			30.7	%
Corporate expense	(19.4		)	(15.4		)	26.0	%
Operating income	135.2			104.0			30.0	%
Interest and debt expense, net	(35.7		)	(4.1		)	770.7	%
Non-service retirement benefit income	2.8			2.5			12.0	%
Other expense, net	(1.0		)	(1.4		)	(28.6	)%
Income before income taxes	101.3			101.0			0.3	%
Provision for income taxes	16.6			18.8			(11.7	)%
Net income	$	84.7		$	82.2		3.0	%


TELEDYNE TECHNOLOGIES INCORPORATED CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited – in millions)

	April 4, 2021		January 3, 2021
ASSETS
Cash and cash equivalents	$	3,234.2	$	673.1
Accounts receivable, net	639.2		624.1
Inventories, net	328.0		347.3
Prepaid expenses and other current assets	79.2		78.1
Total current assets	4,280.6		1,722.6
Property, plant and equipment, net	484.7		489.3
Goodwill and acquired intangible assets, net	2,537.2		2,559.7
Prepaid pension asset	74.3		67.9
Other assets, net	241.6		245.3
Total assets	$	7,618.4	$	5,084.8
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable	$	249.9	$	229.1
Accrued liabilities	402.5		434.2
Current portion of long-term debt and other debt	—		97.6
Total current liabilities	652.4		760.9
Long-term debt, net of current portion	3,243.3		680.9
Other long-term liabilities	386.4		414.4
Total liabilities	4,282.1		1,856.2
Total stockholders’ equity	3,336.3		3,228.6
Total liabilities and stockholders’ equity	$	7,618.4	$	5,084.8


TELEDYNE TECHNOLOGIES INCORPORATED RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES FOR THE THREE MONTHS ENDED APRIL 4, 2021 AND MARCH 29, 2020 (Unaudited – in millions, except per share amounts)

	First Quarter 2021						First Quarter 2020
	Income before income taxes		Net income		Diluted earnings per common share		Income before income taxes		Net income		Diluted earnings per common share
As reported – GAAP	$	101.3	$	84.7	$	2.23	$	101.0	$	82.2	$	2.17
Adjusted for specified items: (a)
Transaction costs	5.9		4.6		0.12		—		—		—
Debt issue costs and interest expense	33.1		25.6		0.67		—		—		—
As adjusted – Non-GAAP	$	140.3	$	114.9	$	3.02	$	101.0	$	82.2	$	2.17

	First Quarter 2021				First Quarter 2020
	Operating income		Operating margin		Operating income		Operating margin
As reported – GAAP	$	135.2	16.8	%	$	104.0	13.3	%
Adjusted for specified items: (a)
Transaction costs	5.9				—
As adjusted – Non-GAAP	$	141.1	17.5	%	$	104.0	13.3	%

	April 4, 2021			January 3, 2021
Current portion of long-term debt and other debt – GAAP	$	—		$	97.6
Long-term debt – GAAP	3,243.3			680.9
Total debt – Non-GAAP (a)	3,243.3			778.5
Less cash and cash equivalents – GAAP	(3,234.2		)	(673.1		)
Net debt – Non-GAAP (a)	$	9.1		$	105.4

(a) See description below for an explanation of non-GAAP financial measures. Adjusted net income is calculated using the company’s overall estimated effective tax rate, excluding discrete income tax items.

Explanation of Non-GAAP Financial Measures

We report our financial results in accordance with GAAP. However, management believes that, in order to more fully understand our short-term and long-term financial and operational trends, investors may wish to consider the impact of certain items resulting from our pending acquisition of FLIR which have an infrequent or non-recurring impact on operations. Accordingly, we present non-GAAP financial measures as a supplement to the financial measures we present in accordance with GAAP. These non-GAAP financial measures provide management with additional means to understand and evaluate the operating results and trends in our ongoing business by adjusting for certain expenses and other items. Management believes these non-GAAP financial measures provide additional means of evaluating period-over-period operating performance. In addition, management understands that some investors and financial analysts find this information helpful in analyzing our financial and operational performance and comparing this performance to our peers and competitors. The company’s 2021 diluted earnings per common share guidance is also presented on a non-GAAP basis.

We use the term “adjusted operating income” to refer to GAAP operating income excluding transaction costs related to the pending FLIR acquisition such as advisory, legal and other consulting fees, filing fees and other costs. We use the related term, “adjusted operating margin” to refer to adjusted operating income as a percentage of net sales.

We use the term “adjusted net income” to refer to GAAP net income excluding costs related to the pending FLIR acquisition. These costs include transaction costs such as advisory, legal and other consulting fees, filing fees and interest and debt expense on debt related to the acquisition and other costs. We use the term “adjusted diluted earnings per common share” to refer to GAAP diluted earnings per common share excluding costs related to the pending FLIR acquisition transaction costs such as advisory, legal and other consulting fees, filing fees and interest and debt expense on debt related to the acquisition and other costs. We also adjust for any tax impact related to the above items.

We use the term, “total debt”, a non-GAAP measure, to refer to the sum of GAAP current portion of long-term debt and other debt and GAAP long-term debt. We use the term “net debt” to refer to the difference between total debt less GAAP cash and cash equivalents. The company believes that this supplemental non-GAAP information is useful to assist management and the investment community in analyzing the company’s liquidity.

Management excludes the effect of each of the items identified below to arrive at the applicable non-GAAP financial measure referenced in the previous table for the reasons set forth below with respect to that item:

Transaction costs – In connection with the pending FLIR acquisition, we incurred $5.9 million in advisory, legal and other consulting fees, filing fees and other costs, which are part of selling, general and administrative expenses. We exclude these expenses to arrive at our non-GAAP measures because we believe they do not reflect the performance of our ongoing operations.

Debt issue costs and interest expense– In connection with the pending FLIR acquisition, Teledyne completed various financing activities and incurred related interest expense totaling $33.1 million. These activities included bridge loans fees, debt extinguishment expense and interest expense on the $3.0 billion bonds issued on March 22, 2021. We exclude the interest and debt expense associated with the pending FLIR acquisition to arrive at our non-GAAP measures because we believe it does not reflect the performance of our ongoing operations.

The non-GAAP financial measures described above are not meant to be considered superior to, or a substitute for, our financial statements prepared in accordance with GAAP. There are material limitations associated with non-GAAP financial measures because they exclude charges that have an effect on our reported results and, therefore, should not be relied upon as the sole financial measures by which to evaluate our financial results. Management compensates and believes that investors should compensate for these limitations by viewing the non-GAAP financial measures in conjunction with the GAAP financial measures. In addition, the non-GAAP financial measures included in this earnings announcement may be different from, and therefore may not be comparable to, similar measures used by other companies. The non-GAAP financial measures listed above are also used by our management to evaluate our operating performance, and benchmark our results against our historical performance and the performance of our peers.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210428005368/en/

Jason VanWees

(805) 373-4542

KEYWORDS: California United States North America

INDUSTRY KEYWORDS: Engineering Defense Aerospace Manufacturing Other Manufacturing Other Defense

MEDIA:

Logo

April 28, 2021 6:58 am

VF Corporation Enters Into Definitive Agreement to Sell the Occupational Portion of Its Work Segment

VF Corporation Enters Into Definitive Agreement to Sell the Occupational Portion of Its Work Segment

DENVER–(BUSINESS WIRE)–
VF Corporation (NYSE: VFC), a global leader in branded lifestyle apparel, footwear and accessories, today announced that it has entered into a definitive agreement to sell the occupational portion of its Work segment to a subsidiary of Redwood Capital Investments, LLC, a diversified holding company.

The occupational workwear portion of VF’s Work segment includes the following brands: Red Kap^®, VF Solutions^®, Bulwark^®, Workrite^®, Walls^®, Terra^®, Kodiak^®, Work Authority^® and Horace Small^®.

The sale does not include the Dickies^® and Timberland PRO^® brands.

Commenting on the agreement, VF’s Chairman, President and Chief Executive Officer, Steve Rendle said, “The sale of our occupational work brands reflects our continued focus on transforming VF into a more consumer-minded and retail-centric enterprise while further simplifying our portfolio and operating model. We are pleased to have reached this agreement with Redwood Capital Investments. They are an ideal owner to guide these brands and businesses into their next phase of growth.”

The transaction, which is expected to close in the first quarter of fiscal 2022, is subject to customary closing conditions and regulatory approvals for a closing to occur. Terms of the agreement were not disclosed.

Barclays is serving as exclusive financial advisor to VF on the transaction. Davis Polk & Wardwell LLP is acting as legal advisor. J.P. Morgan is serving as exclusive financial advisor to Redwood Capital Investments and Kirkland & Ellis, LLP is acting as legal advisor.

About VF

Founded in 1899, VF Corporation is one of the world’s largest apparel, footwear and accessories companies connecting people to the lifestyles, activities and experiences they cherish most through a family of iconic outdoor, active and workwear brands including Vans^®, The North Face^®, Timberland^® and Dickies^®. Our purpose is to power movements of sustainable and active lifestyles for the betterment of people and our planet. We connect this purpose with a relentless drive to succeed to create value for all stakeholders and use our company as a force for good. For more information, please visit vfc.com.

About Redwood Capital Investments, LLC

Redwood is a long-term holding company headquartered in Baltimore, MD that acquires and builds businesses across a diverse set of industries. Redwood’s existing businesses operate in the distribution, dealership, equipment leasing and real estate industries. Redwood focuses on creating value through reinvesting in their businesses to drive growth and create opportunities for employee advancement while preserving company culture.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210428005051/en/

VF Corporation Contacts:

Joe Alkire

Vice President, Corporate Development, Investor Relations and Treasury

(720) 778-4051

Craig Hodges

Vice President, Corporate Affairs

(720) 778-4116

KEYWORDS: Colorado United States North America

INDUSTRY KEYWORDS: Fashion Retail Other Retail Department Stores Manufacturing Textiles

MEDIA:

Logo

April 28, 2021 6:56 am

Lannett To Report Fiscal 2021 Third-Quarter Financial Results, Host Conference Call On Wednesday, May 5

PR Newswire

PHILADELPHIA, April 28, 2021 /PRNewswire/ — Lannett Company, Inc. (NYSE: LCI) today announced that it will report financial results for its fiscal 2021 third quarter on Wednesday, May 5, 2021, after the market closes. Lannett management will host a conference call that same afternoon at 4:30 p.m. Eastern Time to review the company’s performance and answer questions.

The conference call will be available to interested parties by dialing 888-895-5479 from the U.S. or Canada, or 847-619-6250 from international locations, passcode 50156994. The call will be broadcast via the Internet at www.Lannett.com. Listeners are encouraged to visit the website at least 10 minutes prior to the start of the scheduled presentation to register, download and install any necessary audio software. A playback of the call will be archived and accessible on the same website for at least three months.

About Lannett Company, Inc.
Lannett Company, founded in 1942, develops, manufactures, packages, markets and distributes generic pharmaceutical products for a wide range of medical indications. For more information, visit the company’s website at www.lannett.com.

Contact:
Robert Jaffe
Robert Jaffe Co., LLC
(424) 288-4098

View original content to download multimedia:http://www.prnewswire.com/news-releases/lannett-to-report-fiscal-2021-third-quarter-financial-results-host-conference-call-on-wednesday-may-5-301278771.html

SOURCE Lannett Company, Inc.

April 28, 2021 6:54 am

Timken Reports Record First-Quarter 2021 Results; Raises Full-Year Outlook

– Posted record sales of $1.03 billion, up 11 percent from last year

– Delivered strong earnings per diluted share of $1.47 on a GAAP basis, with record adjusted earnings per diluted share of $1.38

– Raises earnings outlook on strengthening markets; now expects 2021 earnings per diluted share of $5.00-$5.30 on a GAAP basis, with adjusted EPS of $5.15 to $5.45

PR Newswire

NORTH CANTON, Ohio, April 28, 2021 /PRNewswire/ — The Timken Company (NYSE: TKR; www.timken.com), a global industrial leader in engineered bearings and power transmission products, today reported first-quarter 2021 sales of $1.03 billion, up 11 percent from the same period a year ago. The increase was driven by organic growth across most end-market sectors led by renewable energy and off-highway, as well as the benefit of currency translation and the Aurora Bearing acquisition. First quarter sales were up 15 percent from the fourth quarter.

Timken posted net income of $113.3 million or $1.47 per diluted share in the first quarter, versus net income of $80.7 million or $1.06 per diluted share for the same period a year ago. The year-over-year increase was primarily driven by higher volume, favorable manufacturing performance and lower selling, general and administrative (SG&A) expenses, partially offset by unfavorable mix and higher material and logistics costs. The current period also benefited from a lower tax rate driven by discrete tax benefits.

Excluding special items (detailed in the attached tables), adjusted net income in the first quarter was $106.7 million or a record $1.38 per diluted share, versus adjusted net income of $84.7 million or $1.11 per diluted share for the same period in 2020.

During the quarter, Timken returned $50.1 million of cash to shareholders with the payment of its 395th consecutive quarterly dividend and the repurchase of 350 thousand shares of company stock. The company ended the first quarter with net debt to adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) at 1.9 times.

“We posted an outstanding first quarter, achieving double-digit revenue growth, margin expansion and record adjusted earnings per share despite supply chain challenges and cost headwinds,” said Richard G. Kyle, Timken president and chief executive officer. “Our strong operational execution and diverse, market-leading portfolio are delivering record results, while we continue to invest in our long-term profitable growth.”

First-Quarter 2021 Segment Results

Process Industries sales of $520.9 million increased 14.1 percent from the same period a year ago. The increase was driven mainly by organic growth in the renewable energy, distribution and general industrial sectors and the benefit of currency translation, offset partially by lower marine revenue.

EBITDA for the quarter was $131.0 million or 25.1 percent of sales, compared with EBITDA of $107.5 million or 23.5 percent of sales for the same period a year ago. The increase in EBITDA was driven primarily by higher volume, favorable manufacturing performance, lower SG&A expenses and the benefit of currency, partially offset by unfavorable mix and higher material and logistics costs.

Excluding special items (detailed in the attached tables), adjusted EBITDA in the quarter was $135.7 million or 26.0 percent of sales, compared with $111.5 million or 24.4 percent of sales in the first quarter last year.

Mobile Industries sales of $504.5 million increased 8.1 percent compared with the same period a year ago. The increase was driven mainly by organic growth in the off-highway, heavy truck and automotive sectors and the favorable impact of currency translation, partially offset by lower revenue in the rail and aerospace sectors.

EBITDA for the quarter was $79.6 million or 15.8 percent of sales, compared with EBITDA of $75.1 million or 16.1 percent of sales for the same period a year ago. The increase in EBITDA reflects higher volume and lower SG&A expenses, partially offset by unfavorable mix and higher material and logistics costs.

Excluding special items (detailed in the attached tables), adjusted EBITDA in the quarter was $80.1 million or 15.9 percent of sales, compared with $76.0 million or 16.3 percent of sales in the first quarter last year.

2021 Outlook

Timken now anticipates 2021 earnings per diluted share to range from $5.00 to $5.30 for the full year on a GAAP basis. Excluding special items (detailed in the attached tables), the company now expects 2021 adjusted earnings per diluted share of $5.15 to $5.45, which represents nearly 30 percent adjusted earnings growth versus 2020 at the midpoint. The company now expects 2021 revenue to be up approximately 18 percent at the midpoint in total versus 2020, which is up from the prior outlook of approximately 12 percent growth.

“We are raising our full-year outlook to reflect the robust and improving market conditions as well as our strong operational execution,” said Kyle. “Our outgrowth initiatives are contributing to our positive 2021 outlook, as we continue to win new business with our differentiated products and engineering innovation. We anticipate strong margin performance again this year, despite supply chain and other cost challenges. Overall, we are on track to deliver record results and we remain focused on executing our strategy to win in the marketplace and deliver higher performance for shareholders.”

Conference Call Information

Timken will host a conference call today at 11 a.m. Eastern Time to review its financial results. Presentation materials will be available online in advance of the call for interested investors and securities analysts.

Conference Call:	Wednesday, April 28, 2021
	11:00 a.m. Eastern Time
	Live Dial-In: 800-458-4121
	Or +1 323-209-6672
	(Call in 10 minutes prior to be included.)
	Conference ID: Timken’s 1Q Earnings Call
	Or Click to Join: https://tmkn.biz/3dvEorg

Conference Call Replay:	Replay Dial-In available through
	May 12, 2021:
	888-203-1112 or 719-457-0820
	Replay Passcode: 7139853

Live Webcast:	http://investors.timken.com

About The Timken Company

The Timken Company (NYSE: TKR; www.timken.com) designs a growing portfolio of engineered bearings and power transmission products. With more than a century of knowledge and innovation, we continuously improve the reliability and efficiency of global machinery and equipment to move the world forward. Timken posted $3.5 billion in sales in 2020 and employs more than 17,000 people globally, operating from 42 countries. Timken is recognized among America’s Most Responsible Companies by Newsweek, the World’s Most Ethical Companies® by Ethisphere and America’s Best Employers by Forbes.

Certain statements in this release (including statements regarding the company’s forecasts, estimates, plans and expectations) that are not historical in nature are “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. In particular, the statements related to expectations regarding the company’s future financial performance, including information under the heading “2021 Outlook,” are forward-looking.

The company cautions that actual results may differ materially from those projected or implied in forward-looking statements due to a variety of important factors, including: the finalization of the company’s financial statements for the first quarter of 2021; the company’s ability to respond to the changes in its end markets that could affect demand for the company’s products or services; unanticipated changes in business relationships with customers or their purchases from the company; changes in the financial health of the company’s customers, which may have an impact on the company’s revenues, earnings and impairment charges; fluctuations in material and energy costs; the impact of changes to the company’s accounting methods; political risks associated with government instability; recent world events that have increased the risks posed by international trade disputes, tariffs and sanctions; weakness in global or regional economic conditions and capital markets; the company’s ability to satisfy its obligations under its debt agreements and renew or refinance borrowings on favorable terms; fluctuations in currency valuations; changes in the expected costs associated with product warranty claims; the ability to achieve satisfactory operating results in the integration of acquired companies, including realizing any accretion within expected timeframes or at all; the impact on operations of general economic conditions; fluctuations in customer demand; the impact on the company’s pension obligations and assets due to changes in interest rates, investment performance and other tactics designed to reduce risk; the introduction of new disruptive technologies; unplanned plant shutdowns; the effects of government-imposed restrictions meant to address climate change; unanticipated litigation, claims, investigations or assessments; the company’s ability to maintain positive relations with unions and works councils; negative impacts to the company’s business, results of operations, financial position or liquidity as a result of COVID-19 or other epidemics and associated governmental measures such as restrictions on travel and manufacturing operations; and the company’s ability to complete and achieve the benefits of announced plans, programs, initiatives, acquisitions and capital investments. Additional factors are discussed in the company’s filings with the Securities and Exchange Commission, including the company’s Annual Report on Form 10-K for the year ended Dec. 31, 2020, quarterly reports on Form 10-Q and current reports on Form 8-K. Except as required by the federal securities laws, the company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Media Relations:

Scott Schroeder

234.262.6420
[email protected]

Investor Relations:

Neil Frohnapple

234.262.2310
[email protected]


The Timken Company
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in millions, except share data) (Unaudited)
	Three Months Ended March 31,
	2021		2020
Net sales	$	1,025.4	$	923.4
Cost of products sold	726.2		644.5
Gross Profit	299.2		278.9
Selling, general & administrative expenses	144.5		153.6
Impairment and restructuring charges	4.0		3.6
Operating Income	150.7		121.7
Non-service pension and other postretirement income	4.0		3.4
Other income, net	1.0		4.1
Interest expense, net	(14.4)		(15.6)
Income Before Income Taxes	141.3		113.6
Provision for income taxes	25.3		29.6
Net Income	116.0		84.0
Less: Net income attributable to noncontrolling interest	2.7		3.3
Net Income Attributable to The Timken Company	$	113.3	$	80.7

Net Income per Common Share Attributable to The Timken Company Common Shareholders
Basic Earnings per share	$	1.49	$	1.07
Diluted Earnings per share	$	1.47	$	1.06

Average Shares Outstanding	75,820,157		75,461,254
Average Shares Outstanding – assuming dilution	77,264,641		76,308,556


BUSINESS SEGMENTS
(Unaudited)
	Three Months Ended March 31,
(Dollars in millions)	2021			2020

Mobile Industries
Net sales	$	504.5		$	466.7
Earnings before interest, taxes, depreciation and amortization (EBITDA)⁽¹⁾	$	79.6		$	75.1
EBITDA Margin ⁽¹⁾	15.8		%	16.1		%
Process Industries
Net sales	$	520.9		$	456.7
Earnings before interest, taxes, depreciation and amortization (EBITDA) ⁽¹⁾	$	131.0		$	107.5
EBITDA Margin ⁽¹⁾	25.1		%	23.5		%
Unallocated corporate expense	$	(11.6)		$	(11.1)
Corporate pension and other postretirement benefit related expense⁽²⁾	(0.9)			—
Acquisition-related gain ⁽³⁾	0.6			—

Consolidated
Net sales	$	1,025.4		$	923.4
Earnings before interest, taxes, depreciation and amortization (EBITDA) ⁽¹⁾	$	198.7		$	171.5
EBITDA Margin ⁽¹⁾	19.4		%	18.6		%

⁽¹⁾ EBITDA is a non-GAAP measure defined as operating income plus other income (expense) and excluding depreciation and amortization. EBITDA Margin is a non-GAAP measure defined as EBITDA as a percentage of net sales. EBITDA and EBITDA Margin are important financial measures used in the management of the business, including decisions concerning the allocation of resources and assessment of performance. Management believes that reporting EBITDA and EBITDA Margin is useful to investors as these measures are representative of the core operations of the segments and Company, respectively.

⁽²⁾ Corporate pension and other postretirement benefit related expense primarily represent actuarial (losses) and gains that resulted from the remeasurement of plan assets and obligations as a result of changes in assumptions or experience. The Company recognizes actuarial (losses) and gains in connection with the annual remeasurement in the fourth quarter, or if specific events trigger a remeasurement. Refer to the Retirement Benefit Plans and Other Postretirement Benefit Plans footnotes within the Company’s annual reports on Form 10-K and quarterly reports on Form 10-Q for additional discussion.

⁽³⁾ The acquisition-related gain represents measurement period adjustments to the bargain purchase price gain on the acquisition of the assets of Aurora Bearing Company (“Aurora”) that closed on November 30, 2020.


CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in millions)	(Unaudited)
	March 31, 2021		December 31, 2020
ASSETS
Cash and cash equivalents	$	302.3	$	320.3
Restricted cash	0.8		0.8
Accounts receivable, net	712.3		581.1
Unbilled receivables	113.3		110.9
Inventories, net	864.8		841.3
Other current assets	150.1		145.9
Total Current Assets	2,143.6		2,000.3
Property, plant and equipment, net	1,020.6		1,035.6
Operating lease assets	113.1		118.2
Goodwill and other intangible assets	1,741.0		1,789.0
Non-current pension assets	0.1		2.0
Other assets	87.8		96.5
Total Assets	$	5,106.2	$	5,041.6
LIABILITIES
Accounts payable	$	362.6	$	351.4
Short-term debt, including current portion of long-term debt	178.3		130.7
Short-term operating lease liabilities	26.2		27.2
Income taxes	24.9		16.1
Accrued expenses	324.8		322.6
Total Current Liabilities	916.8		848.0
Long-term debt	1,423.7		1,433.9
Accrued pension benefits	157.4		163.0
Accrued postretirement benefits	52.1		41.3
Long-term operating lease liabilities	70.9		75.5
Other non-current liabilities	235.2		254.7
Total Liabilities	2,856.1		2,816.4
EQUITY
The Timken Company shareholders’ equity	2,175.5		2,152.9
Noncontrolling Interest	74.6		72.3
Total Equity	2,250.1		2,225.2
Total Liabilities and Equity	$	5,106.2	$	5,041.6


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
	Three Months Ended March 31,
(Dollars in millions)	2021		2020
Cash Provided by (Used in)
OPERATING ACTIVITIES
Net Income	$	116.0	$	84.0
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	43.0		42.3
Stock-based compensation expense	6.5		5.6
Pension and other postretirement income	(1.0)		(0.3)
Pension and other postretirement benefit contributions and payments	(2.5)		(5.5)
Changes in operating assets and liabilities:
Accounts receivable	(138.9)		(47.6)
Unbilled receivables	(2.5)		(8.3)
Inventories	(33.3)		0.3
Accounts payable	19.9		—
Accrued expenses	17.0		(34.3)
Income taxes	1.6		7.4
Other, net	5.9		12.6
Net Cash Provided by Operating Activities	$	31.7	$	56.2
INVESTING ACTIVITIES
Capital expenditures	$	(29.4)	$	(31.8)
Investments in short-term marketable securities, net	(10.0)		0.2
Net Cash Used in Investing Activities	$	(39.4)	$	(31.6)
FINANCING ACTIVITIES
Cash dividends paid to shareholders	$	(23.8)	$	(22.9)
Purchase of treasury shares	(26.3)		(42.3)
Proceeds from exercise of stock options	14.1		7.5
Payments related to tax withholding for stock-based compensation	(17.8)		(10.2)
Net proceeds from credit facilities	49.7		237.3
Net payments on long-term debt	(2.3)		(2.9)
Net Cash (Used in) Provided by Financing Activities	$	(6.4)	$	166.5
Effect of exchange rate changes on cash	(3.9)		(13.3)
(Decrease) Increase in Cash, Cash Equivalents and Restricted Cash	$	(18.0)	$	177.8
Cash, Cash Equivalents and Restricted Cash at Beginning of Period	321.1		216.2
Cash, Cash Equivalents and Restricted Cash at End of Period	$	303.1	$	394.0

Reconciliations of Adjusted Net Income to GAAP Net Income and Adjusted Earnings Per Share to GAAP Earnings Per Share:
(Unaudited)
The following reconciliation is provided as additional relevant information about the Company’s performance deemed useful to investors. Management believes that the non-GAAP measures of adjusted net income and adjusted diluted earnings per share are important financial measures used in the management of the business, including decisions concerning the allocation of resources and assessment of performance. Management believes that reporting adjusted net income and adjusted diluted earnings per share is useful to investors as these measures are representative of the Company’s core operations.

(Dollars in millions, except share data)	Three Months Ended March 31,
	2021		EPS		2020		EPS
Net Income Attributable to The Timken Company	$	113.3	$	1.47	$	80.7	$	1.06

Adjustments: ⁽¹⁾
Impairment, restructuring and reorganization charges⁽²⁾	$	5.2			$	5.8
Corporate pension and other postretirement benefit related expense⁽³⁾	0.9				—
Acquisition-related (gain) charges ⁽⁴⁾	(0.8)				3.3
Property (recoveries) losses and related expenses⁽⁵⁾	—				(2.2)
Noncontrolling interest of above adjustments	0.2				—
Provision for income taxes ⁽⁶⁾	(12.1)				(2.9)
Total Adjustments:	(6.6)		(0.09)		4.0		0.05
Adjusted Net Income Attributable to The Timken Company	$	106.7	$	1.38	$	84.7	$	1.11

⁽¹⁾ Adjustments are pre-tax, with the net tax provision listed separately.

⁽²⁾ Impairment, restructuring and reorganization charges (including items recorded in cost of products sold) relate to: (i) plant closures; (ii) the rationalization of certain plants; (iii) severance related to cost reduction initiatives and (iv) related depreciation and amortization. The Company re-assesses its operating footprint and cost structure periodically, and makes adjustments as needed that result in restructuring charges. However, management believes these actions are not representative of the Company’s core operations.

⁽³⁾ Corporate pension and other postretirement benefit related expense represents actuarial losses and (gains) that resulted from the remeasurement of plan assets and obligations as a result of changes in assumptions or experience. The Company recognizes actuarial losses and (gains) in connection with the annual remeasurement in the fourth quarter, or if specific events trigger a remeasurement. Refer to the Retirement Benefit Plans and Other Postretirement Benefit Plans footnotes within the Company’s annual reports on Form 10-K and quarterly reports on Form 10-Q for additional discussion.

⁽⁴⁾ The acquisition-related (gain) charges represent measurement period adjustments to the bargain purchase gain on the acquisition of the assets of Aurora that closed on November 30, 2020, as well as acquisition transaction costs and the inventory step-up impact.

⁽⁵⁾ Represents property loss and related expenses during the period presented (net of insurance recoveries received in 2020) resulting from property loss that occurred during the first quarter of 2019 at one of the Company’s warehouses in Knoxville, Tennessee and during the third quarter of 2019 at one of the Company’s warehouses in Yantai, China.

⁽⁶⁾ Provision for income taxes includes the net tax impact on pre-tax adjustments (listed above), the impact of discrete tax items recorded during the respective periods as well as other adjustments to reflect the use of one overall effective tax rate on adjusted pre-tax income in interim periods.

Reconciliation of EBITDA to GAAP Net Income, EBITDA Margin to Net Income as a Percentage of Sales, and EBITDA Margin, After Adjustments, to Net Income as a Percentage of Sales, and EBITDA, After Adjustments, to Net Income:
(Unaudited)
The following reconciliation is provided as additional relevant information about the Company’s performance deemed useful to investors. Management believes consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP measure that is useful to investors as it is representative of the Company’s performance and that it is appropriate to compare GAAP net income to consolidated EBITDA. Management also believes that adjusted EBITDA, adjusted EBITDA margin and EBITDA margin are useful to investors as they are representative of the Company’s core operations and are used in the management of the business, including decisions concerning the allocation of resources and assessment of performance.

(Dollars in millions)	Three Months Ended March 31,
	2021		Percentage to Net Sales		2020		Percentage to Net Sales
Net Income	$	116.0	11.3	%	$	84.0	9.1	%

Provision for income taxes	25.3				29.6
Interest expense	14.9				17.1
Interest income	(0.5)				(1.5)
Depreciation and amortization	43.0				42.3
Consolidated EBITDA	$	198.7	19.4	%	$	171.5	18.6	%

Adjustments:
Impairment, restructuring and reorganization charges ⁽¹⁾	$	4.9			$	4.4
Corporate pension and other postretirement benefit related expense⁽²⁾	0.9				—
Acquisition-related (gain) charges⁽³⁾	(0.8)				3.3
Property (recoveries) losses and related expenses⁽⁴⁾	—				(2.2)
Total Adjustments	5.0		0.5	%	5.5		0.6	%
Adjusted EBITDA	$	203.7	19.9	%	$	177.0	19.2	%

⁽¹⁾ Impairment, restructuring and reorganization charges (including items recorded in cost of products sold) relate to: (i) plant closures; (ii) the rationalization of certain plants; and (iii) severance related to cost reduction initiatives. The Company re-assesses its operating footprint and cost structure periodically, and makes adjustments as needed that result in restructuring charges. However, management believes these actions are not representative of the Company’s core operations.

⁽²⁾ Corporate pension and other postretirement benefit related expense represents actuarial losses and (gains) that resulted from the remeasurement of plan assets and obligations as a result of changes in assumptions or experience. The Company recognizes actuarial losses and (gains) in connection with the annual remeasurement in the fourth quarter, or if specific events trigger a remeasurement. Refer to the Retirement Benefit Plans and Other Postretirement Benefit Plans footnotes within the Company’s annual reports on Form 10-K and quarterly reports on Form 10-Q for additional discussion.

⁽³⁾ The acquisition-related (gain) charges represent measurement period adjustments to the bargain purchase gain on the acquisition of the assets of Aurora that closed on November 30, 2020, as well as acquisition transaction costs and the inventory step-up impact.

⁽⁴⁾ Represents property loss and related expenses during the period presented (net of insurance recoveries received in 2020) resulting from property loss that occurred during the first quarter of 2019 at one of the Company’s warehouses in Knoxville, Tennessee and during the third quarter of 2019 at one of the Company’s warehouses in Yantai, China.

Reconciliation of segment EBITDA Margin, After Adjustments, to segment EBITDA as a Percentage of Sales and segment EBITDA, After Adjustments, to segment EBITDA:
(Unaudited)
The following reconciliation is provided as additional relevant information about the Company’s Mobile Industries and Process Industries segment performance deemed useful to investors. Management believes that non-GAAP measures of adjusted EBITDA and adjusted EBITDA margin for the segments are useful to investors as they are representative of each segment’s core operations and are used in the management of the business, including decisions concerning the allocation of resources and assessment of performance.

Mobile Industries
	Three Months Ended March 31,
(Dollars in millions)	2021		Percentage to Net Sales		2020		Percentage to Net Sales
Earnings before interest, taxes, depreciation and amortization (EBITDA)	$	79.6	15.8	%	$	75.1	16.1	%
Impairment, restructuring and reorganization charges ⁽¹⁾	0.3				1.2
Acquisition-related charges ⁽²⁾	0.2				1.9
Property (recoveries) losses and related expenses⁽³⁾	—				(2.2)
Adjusted EBITDA	$	80.1	15.9	%	$	76.0	16.3	%

Process Industries
	Three Months Ended March 31,
(Dollars in millions)	2021		Percentage to Net Sales		2020		Percentage to Net Sales
Earnings before interest, taxes, depreciation and amortization (EBITDA)	$	131.0	25.1	%	$	107.5	23.5	%
Impairment, restructuring and reorganization charges ⁽¹⁾	4.6				3.1
Acquisition-related charges ⁽²⁾	0.1				0.9
Adjusted EBITDA	$	135.7	26.0	%	$	111.5	24.4	%

⁽¹⁾ Impairment, restructuring and reorganization charges (including items recorded in cost of products sold) relate to: (i) plant closures; (ii) the rationalization of certain plants; and (iii) severance related to cost reduction initiatives. The Company re-assesses its operating footprint and cost structure periodically, and makes adjustments as needed that result in restructuring charges. However, management believes these actions are not representative of the Company’s core operations.

⁽²⁾ The acquisition-related charges represent the inventory step-up impact.

⁽³⁾ Represents property loss and related expenses during the period presented (net of insurance recoveries received in 2020) resulting from property loss that occurred during the first quarter of 2019 at one of the Company’s warehouses in Knoxville, Tennessee and during the third quarter of 2019 at one of the Company’s warehouses in Yantai, China.

Reconciliation of Total Debt to Net Debt, the Ratio of Net Debt to Capital, and the Ratio of Net Debt to Adjusted EBITDA:
(Unaudited)
These reconciliations are provided as additional relevant information about the Company’s financial position deemed useful to investors. Capital, used for the ratio of net debt to capital, is a non-GAAP measure defined as total debt less cash and cash equivalents plus total shareholders’ equity. Management believes Net Debt, the Ratio of Net Debt to Capital, Adjusted EBITDA (see below), and the Ratio of Net Debt to Adjusted EBITDA are important measures of the Company’s financial position, due to the amount of cash and cash equivalents on hand. The Company presents net debt to adjusted EBITDA because it believes it is more representative of the Company’s financial position as it is reflective of the ability to cover its net debt obligations with results from its core operations.

(Dollars in millions)
	March 31, 2021			December 31, 2020
Short-term debt, including current portion of long-term debt	$	178.3		$	130.7
Long-term debt	1,423.7			1,433.9
Total Debt	$	1,602.0		$	1,564.6
Less: Cash and cash equivalents	(302.3)			(320.3)
Net Debt	$	1,299.7		$	1,244.3

Total Equity	$	2,250.1		$	2,225.2

Ratio of Net Debt to Capital	36.6		%	35.9		%

Adjusted EBITDA for the Twelve Months Ended	$	685.6		$	658.9

Ratio of Net Debt to Adjusted EBITDA	1.9			1.9

Reconciliation of Free Cash Flow to GAAP Net Cash Provided by Operating Activities:
(Unaudited)
Management believes that free cash flow is a non-GAAP measure that is useful to investors because it is a meaningful indicator of cash generated from operating activities available for the execution of its business strategy.

(Dollars in millions)
	Three Months Ended March 31,
	2021			2020
Net cash provided by operating activities	$	31.7		$	56.2
Less: capital expenditures	(29.4)			(31.8)
Free cash flow	$	2.3		$	24.4


Reconciliation of EBITDA, After Adjustments, to GAAP Net Income:
(Unaudited)
The following reconciliation is provided as additional relevant information about the Company’s performance deemed useful to investors. Management believes consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP measure that is useful to investors as it is representative of the Company’s performance and that it is appropriate to compare GAAP net income to consolidated EBITDA. Management also believes that the non-GAAP measure of adjusted EBITDA is useful to investors as it is representative of the Company’s core operations and is used in the management of the business, including decisions concerning the allocation of resources and assessment of performance.

(Dollars in millions)	Twelve Months Ended March 31, 2021		Twelve Months Ended December 31, 2020
Net Income	$	324.4	$	292.4
Provision for income taxes	99.6		103.9
Interest expense	65.4		67.6
Interest income	(2.7)		(3.7)
Depreciation and amortization	167.8		167.1
Consolidated EBITDA	$	654.5	$	627.3
Adjustments:
Impairment, restructuring and reorganization charges ⁽¹⁾	$	26.4	$	25.9
Corporate pension and other postretirement benefit related expense ⁽²⁾	19.4		18.5
Acquisition-related charges ⁽³⁾	0.2		3.7
Acquisition-related gain⁽⁴⁾	(11.7)		(11.1)
Gain on sale of real estate	(0.4)		(0.4)
Property (recoveries) losses and related expenses⁽⁵⁾	(3.3)		(5.5)
Tax indemnification and related items	0.5		0.5
Total Adjustments	31.1		31.6
Adjusted EBITDA	$	685.6	$	658.9

⁽¹⁾ Impairment, restructuring and reorganization charges (including items recorded in cost of products sold) relate to: (i) plant closures; (ii) the rationalization of certain plants and (iii) severance related to cost reduction initiatives. The Company re-assesses its operating footprint and cost structure periodically, and makes adjustments as needed that result in restructuring charges. However, management believes these actions are not representative of the Company’s core operations.

⁽²⁾ Corporate pension and other postretirement benefit related expense represents actuarial (gains) and losses that resulted from the remeasurement of plan assets and obligations as a result of changes in assumptions or experience. The Company recognizes actuarial (gains) and losses in connection with the annual remeasurement in the fourth quarter, or if specific events trigger a remeasurement.

⁽³⁾ The acquisition-related charges represent transaction costs and the inventory step-up impact.

⁽⁴⁾ The acquisition-related gain represents a bargain purchase gain on the acquisition of the assets of Aurora that closed on November 30, 2020.

⁽⁵⁾ Represents property loss and related expenses during the periods presented (net of insurance recoveries received in 2020) resulting from property loss that occurred during the first quarter of 2019 at one of the Company’s warehouses in Knoxville, Tennessee and during the third quarter of 2019 at one of the Company’s warehouses in Yantai, China.

Reconciliation of Adjusted Earnings per Share to GAAP Earnings per Share for Full Year 2021 Outlook:
(Unaudited)
The following reconciliation is provided as additional relevant information about the Company’s outlook deemed useful to investors. Forecasted full year adjusted diluted earnings per share is an important financial measure that management believes is useful to investors as it is representative of the Company’s expectation for the performance of its core business operations.

	Low End Earnings Per Share		High End Earnings Per Share
Forecasted full year GAAP diluted earnings per share	$	5.00	$	5.30

Forecasted Adjustments:
Restructuring and other special items, net⁽¹⁾	0.15		0.15
Total Adjustments:	$	0.15	$	0.15
Forecasted full year adjusted diluted earnings per share	$	5.15	$	5.45

⁽¹⁾ Restructuring and other special items, net do not include the impact of any potential mark-to-market pension and other postretirement remeasurement adjustments, because the amounts will not be known until incurred.




Reconciliation of Free Cash Flow to GAAP Net Cash Provided by Operating Activities for Full Year 2021 Outlook:
(Unaudited)
Forecasted full year free cash flow is a non-GAAP measure that is useful to investors because it is representative of the Company’s expectation of cash that will be generated from operating activities and available for the execution of its business strategy.
(Dollars in Millions)	Low End Free Cash Flow		High End Free Cash Flow
Net cash provided by operating activities	$	475.0	$	500.0
Less: capital expenditures	(150.0)		(150.0)
Free cash flow	$	325.0	$	350.0

Reconciliations of Adjusted Net Income to GAAP Net Income and Adjusted Earnings Per Share to GAAP Earnings Per Share:

(Unaudited)

The following reconciliation is provided as additional relevant information about the Company’s performance deemed useful to investors. Management believes that the non-GAAP measures of adjusted net income and adjusted diluted earnings per share are important financial measures used in the management of the business, including decisions concerning the allocation of resources and assessment of performance. Management believes that reporting adjusted net income and adjusted diluted earnings per share is useful to investors as these measures are representative of the Company’s core operations.

(Dollars in millions, except share data)

Twelve Months Ended
December 31,

2020

EPS

Net Income Attributable to The Timken Company

284.5

3.72

Adjustments: ⁽¹⁾

Impairment, restructuring and reorganization charges ⁽²⁾

29.0

Property (recoveries) losses and related expenses ⁽³⁾

(5.5)

Acquisition-related charges ⁽⁴⁾

3.7

Acquisition-related gain⁽⁵⁾

(11.1)

Gain on sale of real estate

(0.4)

Corporate pension and other postretirement benefit related expense⁽⁶⁾

18.5

Tax indemnification and related items

0.5

Noncontrolling interest of above adjustments

(0.1)

Provision for income taxes ⁽⁷⁾

(6.0)

Total Adjustments:

28.6

0.38

Adjusted Net Income Attributable to The Timken Company

313.1

4.10

⁽¹⁾ Adjustments are pre-tax, with the net tax provision listed separately.

⁽²⁾ Impairment, restructuring and reorganization charges (including items recorded in cost of products sold) relate to: (i) plant closures; (ii) the rationalization of certain plants; (iii) severance related to cost reduction initiatives and (iv) related depreciation and amortization. The Company re-assesses its operating footprint and cost structure periodically, and makes adjustments as needed that result in restructuring charges. However, management believes these actions are not representative of the Company’s core operations.

⁽³⁾ Represents property loss and related expenses during the periods presented (net of insurance recoveries received in 2020) resulting from property loss that occurred during the first quarter of 2019 at one of the Company’s warehouses in Knoxville, Tennessee and during the third quarter of 2019 at one of the Company’s warehouses in Yantai, China.

⁽⁴⁾ The acquisition-related charges represent acquisition transaction costs and the inventory step-up impact.

⁽⁵⁾ The acquisition-related gain represents a bargain purchase price gain on the acquisition of the assets of Aurora that closed on November 30, 2020.

⁽⁶⁾ Corporate pension and other postretirement benefit related expense (income) represents actuarial losses and (gains) that resulted from the remeasurement of plan assets and obligations as a result of changes in assumptions or experience. The Company recognizes actuarial losses and (gains) in connection with the annual remeasurement in the fourth quarter, or if specific events trigger a remeasurement. Refer to the Retirement Benefit Plans and Other Postretirement Benefit Plans footnotes within the Company’s annual reports on Form 10-K and quarterly reports on Form 10-Q for additional discussion.

⁽⁷⁾ Provision for income taxes includes the net tax impact on pre-tax adjustments (listed above), the impact of discrete tax items recorded during the respective periods as well as other adjustments to reflect the use of one overall effective tax rate on adjusted pre-tax income in interim periods.

View original content to download multimedia:http://www.prnewswire.com/news-releases/timken-reports-record-first-quarter-2021-results-raises-full-year-outlook-301278392.html

SOURCE The Timken Company

April 28, 2021 6:53 am

Elizabeth McCombs Appointed Chief Technology Officer at BD

John DeFord to join newly formed external Scientific Advisory Board

PR Newswire

FRANKLIN LAKES, N.J., April 28, 2021 /PRNewswire/ — BD (Becton, Dickinson and Company) (NYSE: BDX), a leading global medical technology company, today announced the appointment of Elizabeth McCombs as executive vice president and chief technology officer, effective April 26, 2021, succeeding John DeFord.

McCombs, 45, will be responsible for continuing to drive the company’s category innovation strategy and leading all research and development (R&D) activities, including executing the current innovation pipeline and developing the future product portfolio.

“Beth has been an influential leader since joining BD, leading R&D for the Medical Segment to achieve all key innovation and execution metrics with significant improvement over prior years,” said Tom Polen, chairman, CEO and president of BD. “She has served as a highly impactful R&D sponsor for our top Medical segment priorities, while co-leading the segment portfolio strategy and growth acceleration initiatives. In addition, Beth has helped to prioritize and redirect investments toward high-growth spaces that will accelerate category innovation across the Medical Segment businesses, with a focus on smart connected devices.”

McCombs, who brings more than 20 years of extensive experience in advanced medical device innovation to her new role, joined BD in 2019 as the senior vice president of R&D for the BD Medical Segment. She began her career at Johnson & Johnson (J&J) Ethicon Endo-Surgery and progressed through positions of increasing leadership responsibility, including director for the J&J Corporate Office of Science and Technology (COSAT), focused on external technology partnerships; R&D leader for the J&J Sports Medicine business; vice president of Surgical Innovation for the Ethicon franchise; and most recently, as vice president of R&D for Ethicon, while also leading China R&D and Industrial Design/Human Factors for all of J&J Medical Devices. Aside from her technical credentials, Beth has been recognized for her work driving inclusion and diversity efforts, including the support and mentorship of fellow female professionals.

“BD is making great strides in shifting our R&D portfolio toward high impact opportunities like smart connected devices, enabling new care settings, and improving diagnosis and treatment for chronic diseases,” said McCombs. “We will continue to advance an insight-driven innovation strategy and accelerate external technology partnerships and investments to increase the velocity and value creation of the innovation funnel, and we are committed to deliver the best customer outcomes and return on investment.”

McCombs holds both a Bachelor of Science and a Master of Science in Mechanical Engineering from the Massachusetts Institute of Technology, and a Master of Business Administration from the University of Pennsylvania’s Wharton School of Business.

Scientific Advisory Board

BD also announced the creation of an external Scientific Advisory Board (SAB), which will be comprised of top medical key opinion leaders, science and technology experts and experienced innovation leaders. The SAB will meet to review BD’s technology capabilities, innovation pipeline, tuck-in M&A opportunities and early-stage investments. The SAB will also advise BD’s leadership on its growth prioritization as well as emerging trends in health care, science and technology, and the potential implications for BD.

John DeFord, following his retirement from BD on May 28, 2021, will be a founding member and co-chair of the SAB. DeFord brings 35 years of extensive industry experience to the SAB as well as in-depth knowledge of BD’s R&D and business priorities. DeFord earned his bachelor’s degree and master’s degree in Electrical Engineering from Purdue University, where he also earned a doctorate in Electrical/Biomedical Engineering.

About BD

BD is one of the largest global medical technology companies in the world and is advancing the world of health by improving medical discovery, diagnostics and the delivery of care. The company supports the heroes on the frontlines of health care by developing innovative technology, services and solutions that help advance both clinical therapy for patients and clinical process for health care providers. BD and its 70,000 employees have a passion and commitment to help enhance the safety and efficiency of clinicians’ care delivery process, enable laboratory scientists to accurately detect disease and advance researchers’ capabilities to develop the next generation of diagnostics and therapeutics. BD has a presence in virtually every country and partners with organizations around the world to address some of the most challenging global health issues. By working in close collaboration with customers, BD can help enhance outcomes, lower costs, increase efficiencies, improve safety and expand access to health care. For more information on BD, please visit bd.com or connect with us on LinkedIn at www.linkedin.com/company/bd1/ and Twitter @BDandCo.

Contacts:

Media	Investors
Troy Kirkpatrick	Kristen M. Stewart, CFA
VP, Public Relations	SVP, Strategy & Investor Relations
858.617.2361	201.847.5378
[email protected]	[email protected]

View original content to download multimedia:http://www.prnewswire.com/news-releases/elizabeth-mccombs-appointed-chief-technology-officer-at-bd-301278622.html

SOURCE BD (Becton, Dickinson and Company)

April 28, 2021 6:53 am

Oshkosh Corporation Reports Fiscal 2021 Second Quarter Results

Oshkosh Corporation Reports Fiscal 2021 Second Quarter Results

Strong Fiscal 2021 Second Quarter Performance

Issues Fiscal 2021 Sales and Earnings Expectations

Declares Quarterly Cash Dividend of $0.33 Per Share

OSHKOSH, Wis.–(BUSINESS WIRE)–
Oshkosh Corporation (NYSE: OSK), a leading innovator of mission-critical vehicles and essential equipment, today reported fiscal 2021 second quarter net income of $99.6 million, or $1.44 per diluted share, compared to $68.6 million, or $0.99 per diluted share, in the second quarter of fiscal 2020. Results for the second quarter of fiscal 2021 included after-tax charges of $2.5 million associated with restructuring actions in the Access Equipment segment and $0.2 million associated with business acquisition costs in the Defense segment. Results for the second quarter of fiscal 2020 included an after-tax charge of $6.5 million associated with debt extinguishment costs incurred in connection with the refinancing of the Company’s senior notes and a valuation allowance on deferred tax assets in Europe of $11.4 million. Excluding these charges, adjusted¹ net income was $102.3 million, or $1.48 per diluted share, and $86.5 million, or $1.25 per diluted share, for the second quarter of fiscal 2021 and 2020, respectively. Comparisons in this news release are to the corresponding period of the prior year, unless otherwise noted.

Consolidated net sales in the second quarter of fiscal 2021 increased 5.1 percent to $1.89 billion as a result of higher Fire & Emergency and Access Equipment segment sales, offset in part by lower sales in the Defense segment.

Consolidated operating income in the second quarter of fiscal 2021 increased 5.4 percent to $140.8 million, or 7.5 percent of sales, compared to $133.6 million, or 7.4 percent of sales, in the second quarter of fiscal 2020. The increase was primarily due to improved product mix, the impact of higher consolidated sales volume and lower spending resulting from the COVID-19 pandemic, offset in part by higher incentive compensation accruals and a decrease in cumulative catch-up adjustments on contract margins in the Defense segment. Excluding $2.2 million of pre-tax charges related to restructuring actions and $0.3 million of pre-tax business acquisition costs, adjusted¹ operating income in the second quarter of fiscal 2021 was $143.3 million, or 7.6 percent of sales.

“We are pleased to report strong fiscal second quarter results that exceeded our expectations and were higher than the prior year. Our Access Equipment and Fire & Emergency segments both delivered strong revenue and profitability, and our outlook across the company has improved considerably over the past several months,” said John C. Pfeifer, president and chief executive officer of Oshkosh Corporation. “We expect our strong second quarter performance and improved outlook to yield growth in revenues, operating income and earnings per share in fiscal 2021 compared with last year’s results.

“During the quarter, our Defense team’s hard work and determination were rewarded when the U.S. Postal Service (USPS) selected Oshkosh as the winner to build its Next Generation Delivery Vehicle (NGDV). The NGDV will revolutionize the USPS delivery vehicle fleet with improved safety, reliability, sustainability and cost-efficiency as well as a better working experience for our nation’s postal carriers. The 10-year program provides the USPS with both zero-emission Battery Electric Vehicles (BEV) and fuel efficient, low emission Internal Combustion Engine (ICE) vehicles, with the option of delivering any combination, up to 100 percent of either model. Our vehicle design also provides the USPS with the flexibility to convert ICE units to BEV in the future. We are proud to be working with the USPS over the next decade on this historic program.

“We are pleased to reinstate our practice of providing expectations for the current fiscal year. For fiscal 2021, we expect full year revenues to be in the range of $7.75 billion to $7.95 billion, leading to expected diluted earnings per share of $6.10 to $6.60 or adjusted earnings per share of $6.35 to $6.85. Both of these estimates represent growth compared to fiscal 2020, and we expect to exit fiscal 2021 in a position of strength,” said Pfeifer.

Factors affecting second quarter results for the Company’s business segments included:

Access Equipment – Access Equipment segment sales in the second quarter of fiscal 2021 increased 6.5 percent to $738.2 million due to improved market demand in Asia and North America. The second quarter of fiscal 2020 was impacted by low market demand, due in large part to the global economic shutdown as a result of the COVID-19 pandemic.

Access Equipment segment operating income in the second quarter of fiscal 2021 increased 13.7 percent to $80.5 million, or 10.9 percent of sales, compared to $70.8 million, or 10.2 percent of sales, in the second quarter of fiscal 2020. The increase in operating income was primarily due to the impact of higher sales volume, lower spending resulting from the COVID-19 pandemic and improved product mix, offset in part by higher incentive compensation accruals. Excluding $2.2 million of pre-tax charges related to restructuring actions, adjusted¹ operating income in the second quarter of fiscal 2021 was $82.7 million, or 11.2 percent of sales.

Defense – Defense segment sales for the second quarter of fiscal 2021 decreased 2.6 percent to $614.7 million due to lower Family of Medium Tactical Vehicle sales volume and a $19 million decrease in cumulative catch-up adjustments on contracts, offset in part by higher Family of Heavy Tactical Vehicle sales volume and sales of Pratt Miller after its acquisition on January 19, 2021.

Defense segment operating income in the second quarter of fiscal 2021 decreased 40.5 percent to $35.5 million, or 5.8 percent of sales, compared to $59.7 million, or 9.5 percent of sales, in the second quarter of fiscal 2020. The decrease in operating income was due to a $14 million decrease in cumulative catch-up adjustments on contract margins as well as costs and inefficiencies associated with the establishment of an additional production line.

Fire & Emergency – Fire & Emergency segment sales for the second quarter of fiscal 2021 increased 29.0 percent to $312.5 million. Sales in the second quarter of fiscal 2020 were negatively impacted due to delayed deliveries resulting from a supplier quality issue and travel restrictions related to the COVID-19 pandemic that prevented customers from inspecting and accepting vehicles. In addition, Aircraft Rescue and Firefighting vehicle volume was higher in the second quarter of fiscal 2021 as two multi-unit awards were recognized in the quarter.

Fire & Emergency segment operating income in the second quarter of fiscal 2021 increased 149.5 percent to $47.4 million, or 15.2 percent of sales, compared to $19.0 million, or 7.8 percent of sales, in the second quarter of fiscal 2020. The increase in operating income was largely due to the impact of higher sales volume, favorable price/cost dynamics, improved product mix and the absence of manufacturing inefficiencies experienced in the second quarter of the prior year.

Commercial – Commercial segment sales for the second quarter of fiscal 2021 decreased 2.8 percent to $230.0 million due to lower refuse collection vehicle demand caused by the COVID-19 pandemic and the impact of the sale of the concrete batch plant business in the fourth quarter of fiscal 2020, offset in part by an increase in concrete mixer volume. Front-discharge concrete mixer volume was low in the prior year second quarter as a result of the ramp-up of production to a new model. Concrete batch plant sales were $6.8 million in the second quarter of fiscal 2020.

Commercial segment operating income in the second quarter of fiscal 2021 increased 132.1 percent to $18.8 million, or 8.2 percent of sales, compared to $8.1 million, or 3.4 percent of sales, in the second quarter of fiscal 2020. The increase in operating income was primarily due to lower product liability costs, lower spending resulting from the COVID-19 pandemic and lower warranty costs.

Corporate – Corporate operating costs in the second quarter of fiscal 2021 increased $17.4 million to $41.4 million primarily due to higher incentive compensation accruals, higher healthcare costs and higher share-based compensation expense as a result of the increase in the Company’s stock price.

Interest Expense Net of Interest Income – Interest expense net of interest income in the second quarter of fiscal 2021 decreased $9.5 million to $11.2 million. The second quarter of fiscal 2020 included $8.5 million of debt extinguishment costs incurred in connection with the refinancing of the Company’s senior notes.

Provision for Income Taxes – The Company recorded income tax expense in the second quarter of fiscal 2021 of $33.2 million, or 25.0 percent of pre-tax income, compared to $38.3 million, or 35.8 percent of pre-tax income, in the second quarter of fiscal 2020. Excluding the tax impact of debt extinguishment costs of $2.0 million as well as a valuation allowance on deferred tax assets in Europe, adjusted¹ income tax expense in the second quarter of fiscal 2020 was $28.9 million, or 25.0 percent of adjusted pre-tax income.

Six-month Results

The Company reported net sales for the first six months of fiscal 2021 of $3.47 billion and net income of $169.1 million, or $2.45 per diluted share. This compares with net sales of $3.49 billion and net income of $144.3 million, or $2.09 per diluted share, in the first six months of 2020. The improvement in net income for the first six months of fiscal 2021 compared to the first six months of fiscal 2020 was the result of the impact of lower selling, general and administrative costs resulting from the COVID-19 pandemic, the absence of a tax valuation allowance, the absence of debt extinguishment costs, improved investment results and lower intangible asset amortization.

Results for the first six months of fiscal 2021 included after-tax charges of $10.3 million associated with restructuring actions in the Access Equipment segment and $0.8 million associated with business acquisition costs in the Defense segment. Results for the first six months of fiscal 2020 included an after-tax charge of $6.5 million associated with debt extinguishment costs incurred in connection with the refinancing of the Company’s senior notes and a valuation allowance on deferred tax assets in Europe of $11.4 million. Excluding these charges, adjusted¹ net income was $180.2 million, or $2.61 per diluted share, and $162.2 million, or $2.35 per diluted share for the first six months of fiscal 2021 and 2020, respectively.

Fiscal 2021 Expectations

The Company announced its fiscal 2021 diluted earnings per share estimate range of $6.10 to $6.60 (adjusted earnings per share of $6.35 to $6.85) on projected net sales between $7.75 billion and $7.95 billion. These estimates reflect estimated operating income between $592.5 million and $637.5 million (adjusted operating income of between $610 million and $655 million). Management intends to provide additional guidance, including by segment, on the conference call later today.

Dividend Announcement

The Company’s Board of Directors today declared a quarterly cash dividend of $0.33 per share of Common Stock. The dividend will be payable on May 28, 2021, to shareholders of record as of May 14, 2021.

Conference Call

The Company will host a conference call at 9:00 a.m. EDT this morning to discuss its fiscal 2021 second quarter results and its full-year fiscal 2021 outlook. Slides for the call will be available on the Company’s website beginning at 7:00 a.m. EDT this morning. The call will be simultaneously webcast. To access the webcast, go to oshkoshcorp.com at least 15 minutes prior to the event and follow instructions for listening to the webcast. An audio replay of the call and related question and answer session will be available for 12 months at this website.

Forward Looking Statements

This news release contains statements that the Company believes to be “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact, including, without limitation, statements regarding the Company’s future financial position, business strategy, targets, projected sales, costs, earnings, capital expenditures, debt levels and cash flows, and plans and objectives of management for future operations, are forward-looking statements. When used in this news release, words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “should,” “project” or “plan” or the negative thereof or variations thereon or similar terminology are generally intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, assumptions and other factors, some of which are beyond the Company’s control, which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These factors include the overall impact of the COVID-19 pandemic on the Company’s business, results of operations and financial condition; the duration and severity of the COVID-19 pandemic; the negative impacts of the COVID-19 pandemic on global economies and the Company’s customers, suppliers and employees; the cyclical nature of the Company’s access equipment, commercial and fire & emergency markets, which are particularly impacted by the strength of U.S. and European economies and construction seasons; the Company’s ability to increase prices or impose surcharges to raise margins or to offset higher input costs, including increased commodity, raw material, labor and freight costs; the Company’s estimates of access equipment demand which, among other factors, is influenced by customer historical buying patterns and rental company fleet replacement strategies; the strength of the U.S. dollar and its impact on Company exports, translation of foreign sales and the cost of purchased materials; the expected level and timing of U.S. Department of Defense (DoD) and international defense customer procurement of products and services and acceptance of and funding or payments for such products and services; the Company’s ability to predict the level and timing of orders for indefinite delivery/indefinite quantity contracts with the U.S. federal government; risks related to reductions in government expenditures in light of U.S. defense budget pressures and an uncertain DoD tactical wheeled vehicle strategy; the impact of any DoD solicitation for competition for future contracts to produce military vehicles; potential impacts of budget constraints facing the USPS and continuously changing demands for postal services; risks related to facilities expansion, consolidation and alignment, including the amounts of related costs and charges and that anticipated cost savings may not be achieved; projected adoption rates of work at height machinery in emerging markets; the impact of severe weather, natural disasters or pandemics that may affect the Company, its suppliers or its customers; performance issues with suppliers or subcontractors, particularly as demand rebounds from the COVID-19 pandemic; risks related to the collectability of receivables, particularly for those businesses with exposure to construction markets; the cost of any warranty campaigns related to the Company’s products; risks associated with international operations and sales, including compliance with the Foreign Corrupt Practices Act; risks that a trade war and related tariffs could reduce the competitiveness of the Company’s products; the Company’s ability to comply with complex laws and regulations applicable to U.S. government contractors; cybersecurity risks and costs of defending against, mitigating and responding to data security threats and breaches; the Company’s ability to successfully identify, complete and integrate acquisitions and to realize the anticipated benefits associated with the same; and risks related to the Company’s ability to successfully execute on its strategic road map and meet its long-term financial goals. Additional information concerning these and other factors is contained in the Company’s filings with the Securities and Exchange Commission, including the Form 8-K filed today. All forward-looking statements speak only as of the date of this news release. The Company assumes no obligation, and disclaims any obligation, to update information contained in this news release. Investors should be aware that the Company may not update such information until the Company’s next quarterly earnings conference call, if at all.

About Oshkosh Corporation

At Oshkosh (NYSE: OSK), we make innovative, mission-critical equipment to help everyday heroes advance communities around the world. Headquartered in Wisconsin, Oshkosh Corporation employs more than 14,000 team members worldwide, all united behind a common cause: to make a difference in people’s lives. Oshkosh products can be found in more than 150 countries under the brands of JLG®, Pierce®, Oshkosh® Defense, McNeilus®, IMT®, Jerr-Dan®, Frontline™, Oshkosh® Airport Products, London™ and Pratt Miller. For more information, visit oshkoshcorp.com.

®, ™ All brand names referred to in this news release are trademarks of Oshkosh Corporation or its subsidiary companies.

OSHKOSH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In millions, except share and per share amounts; unaudited)

	Three Months Ended						Six Months Ended
	March 31,						March 31,
	2021			2020			2021			2020
Net sales	$	1,889.0		$	1,796.7		$	3,465.5		$	3,491.8
Cost of sales		1,573.9			1,504.3			2,907.8			2,909.9
Gross income		315.1			292.4			557.7			581.9

Operating expenses:
Selling, general and administrative		172.0			157.4			317.4			330.8
Amortization of purchased intangibles		2.3			1.4			3.6			8.4
Total operating expenses		174.3			158.8			321.0			339.2
Operating income		140.8			133.6			236.7			242.7

Other income (expense):
Interest expense		(11.8	)		(22.3	)		(23.8	)		(35.4	)
Interest income		0.6			1.6			1.2			2.9
Miscellaneous, net		3.1			(5.8	)		1.6			(6.2	)
Income before income taxes and earnings (losses) of unconsolidated affiliates		132.7			107.1			215.7			204.0
Provision for income taxes		33.2			38.3			46.4			59.0
Income before earnings (losses) of unconsolidated affiliates		99.5			68.8			169.3			145.0
Equity in earnings (losses) of unconsolidated affiliates		0.1			(0.2	)		(0.2	)		(0.7	)
Net income	$	99.6		$	68.6		$	169.1		$	144.3

Earnings per share:
Basic	$	1.45		$	1.00		$	2.48		$	2.12
Diluted		1.44			0.99			2.45			2.09

Basic weighted-average shares outstanding		68,513,419			68,281,213			68,375,370			68,189,216
Dilutive equity-based compensation awards		775,202			590,811			671,722			717,059
Diluted weighted-average shares outstanding		69,288,621			68,872,024			69,047,092			68,906,275

OSHKOSH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions; unaudited)

	March 31,			September 30,
	2021			2020
Assets
Current assets:
Cash and cash equivalents	$	1,093.2		$	582.9
Receivables, net		877.1			857.6
Unbilled receivables		460.4			483.6
Inventories, net		1,397.2			1,505.4
Other current assets		153.2			106.3
Total current assets		3,981.1			3,535.8
Property, plant and equipment:
Property, plant and equipment		1,408.3			1,397.0
Accumulated depreciation		(847.1	)		(831.1	)
Property, plant and equipment, net		561.2			565.9
Goodwill		1,086.5			1,009.5
Purchased intangible assets, net		447.3			418.2
Other long-term assets		267.7			286.5
Total assets	$	6,343.8		$	5,815.9

Liabilities and Shareholders’ Equity
Current liabilities:
Revolving credit facilities and current maturities of long-term debt	$	–		$	5.2
Accounts payable		662.3			577.8
Customer advances		706.0			491.4
Payroll-related obligations		185.6			150.8
Income taxes payable		19.3			14.7
Other current liabilities		329.3			345.2
Total current liabilities		1,902.5			1,585.1
Long-term debt, less current maturities		818.3			817.9
Other long-term liabilities		604.8			562.2
Commitments and contingencies
Shareholders’ equity		3,018.2			2,850.7
Total liabilities and shareholders’ equity	$	6,343.8		$	5,815.9

OSHKOSH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions; unaudited)

	Six Months Ended
	March 31,
	2021			2020
Operating activities:
Net income	$	169.1		$	144.3
Depreciation and amortization		48.3			50.6
Stock-based compensation expense		14.9			17.7
Deferred income taxes		4.0			11.4
(Gain) loss on sale of assets		0.6			(9.9	)
Foreign currency transaction gains		(0.7	)		(1.5	)
Loss on extinguishment of debt		–			8.5
Other non-cash adjustments		2.4			0.9
Changes in operating assets and liabilities		456.3			(157.2	)
Net cash provided by operating activities		694.9			64.8

Investing activities:
Additions to property, plant and equipment		(38.3	)		(57.5	)
Additions to equipment held for rental		(4.1	)		(10.9	)
Acquisition of business, net of cash acquired		(112.1	)		–
Proceeds from sale of equipment held for rental		7.8			32.5
Other investing activities		1.1			(1.2	)
Net cash used by investing activities		(145.6	)		(37.1	)

Financing activities:
Proceeds from the issuance of debt		–			303.9
Repayment of debt		(5.2	)		(300.0	)
Debt extinguishment and issuance costs		–			(9.6	)
Repurchases of Common Stock		(8.0	)		(49.3	)
Dividends paid		(45.2	)		(40.9	)
Proceeds from exercise of stock options		22.8			23.6
Other financing activities		(2.4	)		(0.8	)
Net cash used by financing activities		(38.0	)		(73.1	)

Effect of exchange rate changes on cash		(1.0	)		0.9
Increase (decrease) in cash and cash equivalents		510.3			(44.5	)
Cash and cash equivalents at beginning of period		582.9			448.4
Cash and cash equivalents at end of period	$	1,093.2		$	403.9

OSHKOSH CORPORATION
SEGMENT INFORMATION
(In millions; unaudited)

	Three Months Ended March 31,
	2021								2020
	External Customers		Inter- segment			Net Sales			External Customers		Inter- segment			Net Sales
Access Equipment
Aerial work platforms	$	358.2	$	–		$	358.2		$	273.7	$	–		$	273.7
Telehandlers		175.2		–			175.2			217.6		–			217.6
Other		203.2		1.6			204.8			201.7		–			201.7
Total Access Equipment		736.6		1.6			738.2			693.0		–			693.0

Defense^(a)		614.3		0.4			614.7			626.1		4.9			631.0

Fire & Emergency^(a)		308.7		3.8			312.5			241.9		0.4			242.3

Commercial
Refuse collection		104.4		–			104.4			115.2		–			115.2
Concrete placement		97.3		–			97.3			89.7		–			89.7
Other		27.1		1.2			28.3			30.1		1.7			31.8
Total Commercial		228.8		1.2			230.0			235.0		1.7			236.7
Corporate and intersegment eliminations		0.6		(7.0	)		(6.4	)		0.7		(7.0	)		(6.3	)
	$	1,889.0	$	–		$	1,889.0		$	1,796.7	$	–		$	1,796.7

	Six Months Ended March 31,
	2021								2020
	External Customers		Inter- segment			Net Sales			External Customers		Inter- segment			Net Sales
Access Equipment
Aerial work platforms	$	636.2	$	–		$	636.2		$	579.7	$	–		$	579.7
Telehandlers		298.1		–			298.1			419.0		–			419.0
Other		364.7		2.9			367.6			412.2		–			412.2
Total Access Equipment		1,299.0		2.9			1,301.9			1,410.9		–			1,410.9

Defense^(a)		1,164.3		0.7			1,165.0			1,126.0		5.4			1,131.4

Fire & Emergency^(a)		578.5		7.9			586.4			494.6		4.6			499.2

Commercial
Refuse collection		206.7		–			206.7			231.1		–			231.1
Concrete placement		165.0		–			165.0			165.4		–			165.4
Other		51.3		2.7			54.0			62.4		2.0			64.4
Total Commercial		423.0		2.7			425.7			458.9		2.0			460.9
Corporate and intersegment eliminations		0.7		(14.2	)		(13.5	)		1.4		(12.0	)		(10.6	)
	$	3,465.5	$	–		$	3,465.5		$	3,491.8	$	–		$	3,491.8

	Three Months Ended						Six Months Ended
	March 31,						March 31,
	2021			2020			2021			2020
Operating income (loss):
Access Equipment	$	80.5		$	70.8		$	105.4		$	139.8
Defense^(a)		35.5			59.7			88.3			90.7
Fire & Emergency^(a)		47.4			19.0			82.5			49.9
Commercial		18.8			8.1			30.7			25.9
Corporate and intersegment eliminations		(41.4	)		(24.0	)		(70.2	)		(63.6	)
	$	140.8		$	133.6		$	236.7		$	242.7

	March 31,
	2021		2020
Period-end backlog:
Access Equipment	$	1,519.9	$	844.4
Defense^(a)		3,501.8		3,447.3
Fire & Emergency^(a)		1,267.1		1,290.3
Commercial		449.7		400.2
	$	6,738.5	$	5,982.2

(a)

On October 1, 2020, the Company transferred operational responsibility of the airport snow removal vehicle business from the Fire & Emergency segment to the Defense segment. As a result, the results of the airport snow removal vehicle business have been included with the Defense segment for financial reporting purposes. Historical information has been reclassified to include the airport snow removal vehicle business in the Defense segment for all periods presented.

Non-GAAP Financial Measures

The Company reports its financial results in accordance with generally accepted accounting principles in the United States of America (GAAP). The Company is presenting various operating results both on a GAAP basis and on a basis excluding items that affect comparability of results. When the Company excludes certain items as described below, they are considered non-GAAP financial measures. The Company believes excluding the impact of these items is useful to investors in comparing the Company’s performance to prior period results. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company’s results prepared in accordance with GAAP. The table below presents a reconciliation of the Company’s presented non-GAAP measures to the most directly comparable GAAP measures (in millions, except per share amounts):

	Three Months Ended						Six Months Ended
	March 31,						March 31,
	2021			2020			2021			2020
Access Equipment segment operating income (GAAP)	$	80.5		$	70.8		$	105.4		$	139.8
Restructuring-related costs		2.2			–			10.2			–
Adjusted Access Equipment segment operating income (non-GAAP)	$	82.7		$	70.8		$	115.6		$	139.8

Defense segment operating income (GAAP)	$	35.5		$	59.7		$	88.3		$	90.7
Acquisition costs		0.3			–			1.0			–
Adjusted Defense segment operating income (non-GAAP)	$	35.8		$	59.7		$	89.3		$	90.7

Consolidated operating income (GAAP)	$	140.8		$	133.6		$	236.7		$	242.7
Restructuring-related costs		2.2			–			10.2			–
Acquisition costs		0.3			–			1.0			–
Adjusted consolidated operating income (non-GAAP)	$	143.3		$	133.6		$	247.9		$	242.7

Interest expense net of interest income (GAAP)		11.2			20.7			22.6			32.5
Loss on extinguishment of debt		–			(8.5	)		–			(8.5	)
Adjusted interest expense net of interest income (non-GAAP)		11.2			12.2			22.6			24.0

Pre-tax Income (GAAP)	$	132.7		$	107.1		$	215.7		$	204.0
Restructuring-related costs		2.2			–			10.2			–
Acquisition costs		0.3			–			1.0			–
Loss on extinguishment of debt		–			8.5			–			8.5
Adjusted pre-tax income (non-GAAP)	$	135.2		$	115.6		$	226.9		$	212.5

Provision for income taxes (GAAP)	$	33.2		$	38.3		$	46.4		$	59.0
Tax provision related to restructuring-related costs		(0.3	)		–			(0.1	)		–
Tax benefit related to acquisition costs		0.1			–			0.2			–
Tax benefit related to loss on extinguishment of debt		–			2.0			–			2.0
Valuation allowance on deferred tax assets		–			(11.4	)		–			(11.4	)
Adjusted provision for income taxes (non-GAAP)	$	33.0		$	28.9		$	46.5		$	49.6

	Three Months Ended				Six Months Ended
	March 31,				March 31,
	2021		2020		2021		2020
Net income (GAAP)	$	99.6	$	68.6	$	169.1	$	144.3
Loss on extinguishment of debt, net of tax		–		6.5		–		6.5
Valuation allowance on deferred tax assets		–		11.4		–		11.4
Restructuring-related costs, net of tax		2.5		–		10.3		–
Acquisition costs, net of tax		0.2		–		0.8		–
Adjusted net income (non-GAAP)	$	102.3	$	86.5	$	180.2	$	162.2

Earnings per share-diluted (GAAP)	$	1.44	$	0.99	$	2.45	$	2.09
Loss on extinguishment of debt, net of tax		–		0.10		–		0.10
Valuation allowance on deferred tax assets		–		0.16		–		0.16
Restructuring-related costs, net of tax		0.04		–		0.15		–
Acquisition costs, net of tax		–		–		0.01		–
Adjusted earnings per share-diluted (non-GAAP)	$	1.48	$	1.25	$	2.61	$	2.35

	Fiscal 2021 Expectations
	Low		High
Operating income (GAAP)	$	592.5	$	637.5
Restructuring-related costs		16.5		16.5
Acquisition costs		1.0		1.0
Adjusted operating income (non-GAAP)	$	610.0	$	655.0

Earnings per share-diluted (GAAP)	$	6.10	$	6.60
Restructuring-related costs, net of tax		0.24		0.24
Acquisition costs, net of tax		0.01		0.01
Adjusted earnings per share-diluted (non-GAAP)	$	6.35	$	6.85

¹ This news release refers to GAAP (U.S. generally accepted accounting principles) and non-GAAP financial measures. Oshkosh Corporation believes that the non-GAAP measures provide investors a useful comparison of the Company’s performance to prior period results. These non-GAAP measures may not be comparable to similarly-titled measures disclosed by other companies. A reconciliation of the Company’s presented non-GAAP measures to the most directly comparable GAAP measures can be found under the caption “Non-GAAP Financial Measures” in this news release.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210428005336/en/

Financial:

Patrick Davidson

Senior Vice President, Investor Relations

920.502.3266

Media:

Bryan Brandt

Senior Vice President, Chief Marketing Officer

920.502.3670

KEYWORDS: United States North America Wisconsin

INDUSTRY KEYWORDS: Law Enforcement/Emergency Services Public Policy/Government Automotive Other Construction & Property General Automotive Other Manufacturing Other Transport Construction & Property Trucking Transport Automotive Manufacturing Other Defense Manufacturing Other Automotive Defense Off-Road Trucks & SUVs Fleet Management

MEDIA:

Logo

April 28, 2021 6:53 am

CarMax to Host Virtual Analyst Day on May 6, 2021

CarMax to Host Virtual Analyst Day on May 6, 2021

RICHMOND, Va.–(BUSINESS WIRE)–
CarMax, Inc. (NYSE: KMX), the nation’s largest and most profitable retailer of used autos, issued a reminder that the Company will host its Virtual Analyst Day on Thursday, May 6, 2021 beginning at 9:00 a.m. Eastern Time (ET). The event is expected to conclude at 11:30 a.m. ET.

This event is designed for financial analysts and institutional investors and will highlight the company’s omni-channel strategy, digital initiatives and the road ahead.

Program highlights include sessions led by the following CarMax executives:

Bill Nash – President and Chief Executive Officer
Jim Lyski – EVP, Strategy, Product & Marketing
Shamim Mohammad – EVP, Chief Information and Technology Officer
Enrique Mayor-Mora – SVP, Chief Financial Officer
Diane Cafritz – SVP, Legal and Chief Human Resources Officer

Webcast Details

CarMax’s Virtual Analyst Day presentation will be webcast with accompanying presentations starting at 9:00 a.m. ET and will be followed by an interactive Q&A session with management. The webcast and presentation materials, as well as a replay of the webcast following the event can be accessed on our investor relations website at investors.carmax.com.

About CarMax

CarMax, the nation’s largest retailer of used autos, revolutionized the automotive retail industry by driving integrity, honesty and transparency in every interaction. The company offers a truly personalized experience with the option for customers to do as much, or as little, online and in-store as they want. CarMax also provides a variety of vehicle delivery methods, including home delivery, contactless curbside pickup and appointments in its stores. During the fiscal year ending February 28, 2021, CarMax sold more than 750,000 used vehicles and more than 425,000 wholesale vehicles at its in-store and virtual auctions. In addition, CarMax Auto Finance originated more than $6 billion in receivables during fiscal year 2021, adding to its near $14 billion portfolio. CarMax has 220 stores, 27,000 Associates, and is proud to have been recognized for 17 consecutive years as one of the Fortune 100 Best Companies to Work For®. For more information, visit www.carmax.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210428005326/en/

Stacy Frole, Vice President, Investor Relations

[email protected]

(804) 747-0422 ext. 7865

KEYWORDS: Virginia United States North America

INDUSTRY KEYWORDS: Professional Services Fleet Management Specialty General Automotive Aftermarket Automotive Retail Public Relations/Investor Relations Marketing Advertising Communications Finance

MEDIA:

Logo

April 28, 2021 6:48 am

Brinker International Reports Third Quarter Of Fiscal 2021 Results And Provides Fourth Quarter Of Fiscal 2021 Outlook

PR Newswire

DALLAS, April 28, 2021 /PRNewswire/ — Brinker International, Inc. (NYSE: EAT) today announced results for the third quarter of fiscal 2021 ended March 24, 2021, and provided a financial update for the fourth quarter of fiscal 2021.

“I am very pleased with the ongoing growth of our business as our guests are able to return in greater numbers to Chili’s and Maggiano’s dining rooms,” said Wyman Roberts, CEO and President. “This reopening trend, supported by investment in our digital platforms and virtual brands, now has us meaningfully outperforming our F19 sales and traffic results.”

Fiscal 2021 Highlights – Third Quarter

The third quarter of fiscal 2021 results reflect the continued impact from the COVID-19 pandemic. At the end of the third quarter, substantially all of our Company-owned restaurant dining rooms or patios were open in some capacity in accordance with state and local mandates.

Operating income in the third quarter of fiscal 2021 increased to $52.2 million as compared to $41.1 million in the third quarter of fiscal 2020.
Restaurant operating margin in the third quarter of fiscal 2021 increased to 13.9% in the third quarter of fiscal 2021 compared to 12.8% in the third quarter of fiscal 2020.
Chili’s Company sales in the third quarter of fiscal 2021 increased to $749.0 million in the third quarter of fiscal 2021 as compared to $748.7 million in the third quarter of fiscal 2020.
Net income per diluted share, on a GAAP basis, in the third quarter of fiscal 2021 was $0.73 compared to $0.81 in the third quarter of fiscal 2020, and excluding special items Net income per diluted share in the third quarter of fiscal 2021 was $0.78 compared to $1.28 in the third quarter of fiscal 2020.
Net cash provided by operating activities in the thirty-nine week period ended March 24, 2021 was $268.6 million, and capital expenditures totaled $62.4 million resulting in free cash flow of $206.2 million.
The estimated impact of Winter Storm “Uri” during the third quarter of fiscal 2021 was a decrease in Company sales of $10.5 million, comparable restaurant sales of 1.2%, and Net income per diluted share, excluding special items, of $0.06.

For comparable restaurant sales details and non-GAAP reconciliations, please refer to the Non-GAAP Information and Reconciliations section of this release.

Comparable Restaurant Sales for Selected Periods in Fiscal 2021 vs. Fiscal 2019

The following table compares fiscal 2021 to fiscal 2019 due to the impact of the pandemic on fiscal 2020 sales:

	Comparable Restaurant Sales
	January		February		March		MTD April Through April 21st
Brinker	(11.4)	%	(12.6)	%	(1.8)	%	6.3	%
Chili’s	(6.7)	%	(8.8)	%	2.0	%	10.1	%
Maggiano’s	(41.0)	%	(38.0)	%	(29.5)	%	(19.7)	%

Comparable restaurant sales includes restaurants that are currently open and had been open under the Company’s ownership at least six months at the beginning of the third quarter of fiscal 2019.

Financial Metrics

	Third Quarter
	2021			2020			% Change
Company sales	$	813.7		$	840.4		(3.2)	%
Total revenues	$	828.4		$	860.0		(3.7)	%

Operating income	$	52.2		$	41.1		27.0	%
Operating income as a percentage of Total revenues	6.3		%	4.8		%	1.5	%
Restaurant operating margin, non-GAAP⁽¹⁾	$	112.9		$	107.6		4.9	%
Restaurant operating margin as a percentage of Company sales, non-GAAP	13.9		%	12.8		%	1.1	%

Net income per diluted share⁽²⁾	$	0.73		$	0.81		(9.9)	%
Net income per diluted share, excluding special items, non-GAAP⁽²⁾	$	0.78		$	1.28		(39.1)	%

Comparable Restaurant Sales – Company Owned	Q3:21 vs 20		Q3:20 vs 19
Brinker	(3.3)	%	(5.9)	%
Chili’s	0.0	%	(5.3)	%
Maggiano’s	(29.6)	%	(9.9)	%


⁽¹⁾	Restaurant operating margin is defined as Company sales less Company restaurant expenses which includes Food and beverage costs, Restaurant labor and Restaurant expenses, and excludes Depreciation and amortization, General and administrative and Other (gains) and charges (see non-GAAP reconciliation below).

⁽²⁾	Net income per diluted share reflects the impact of 8.1 million shares of common stock sold in an offering in the fourth quarter of fiscal 2020.

Fourth Quarter of Fiscal 2021 Guidance

We are providing a financial outlook for the fourth quarter of fiscal 2021. The uncertainties created by the ongoing COVID-19 pandemic, as well as other risks and uncertainties, could cause actual results to differ materially from those projected.

Revenues are expected to be in the range of $950 million to $1.0 billion.
Net income per diluted share, excluding special items, is expected to be in the range of $1.55 to $1.70.
Diluted weighted average shares outstanding for the fourth quarter are expected to be in the range of 47.0 million to 48.0 million.

Fiscal 2021 is a 53-week year, and includes an extra operating week in the fourth quarter.

We are unable to reliably forecast special items such as restaurant impairments, restaurant closures, reorganization charges and legal settlements without unreasonable effort. As such, we do not present a reconciliation of forecasted non-GAAP measures to the corresponding GAAP measures. If special items are reported during fiscal 2021, reconciliations to the appropriate GAAP measures will be provided.

Third Quarter of Fiscal 2021 Operating Performance

Segment Performance

The table below presents selected financial information (in millions, except as noted) related to our segments’ operational performance for the thirteen week periods ended March 24, 2021 and March 25, 2020:

	Chili’s									Maggiano’s
	Third Quarter						Variance			Third Quarter						Variance
	2021			2020			Variance			2021			2020			Variance
Company sales	$	749.0		$	748.7		$	0.3		$	64.7		$	91.7		$	(27.0)
Franchise and other revenues	14.0			15.7			(1.7)			0.7			3.9			(3.2)
Total revenues	$	763.0		$	764.4		$	(1.4)		$	65.4		$	95.6		$	(30.2)

Operating income	$	80.3		$	58.7		$	21.6		$	1.4		$	4.0		$	(2.6)
Operating income as a % of Total revenues	10.5		%	7.7		%	2.8		%	2.1		%	4.2		%	(2.1)		%

Company restaurant expenses⁽¹⁾	$	641.6		$	648.4		$	(6.8)		$	59.0		$	84.3		$	(25.3)
Company restaurant expenses as a % of Company sales	85.7		%	86.6		%	(0.9)		%	91.2		%	91.9		%	(0.7)		%
Restaurant operating margin – non-GAAP	$	107.4		$	100.3		$	7.1		$	5.7		$	7.4		$	(1.7)
Restaurant operating margin as a % of Company sales – non-GAAP	14.3		%	13.4		%	0.9		%	8.8		%	8.1		%	0.7		%


⁽¹⁾	Company restaurant expenses includes Food and beverage costs, Restaurant labor and Restaurant expenses, and excludes Depreciation and amortization, General and administrative and Other (gains) and charges.

Chili’s

Chili’s Company sales increased primarily due to increased off-premise sales including It’s Just Wings, partially offset by lower dining room sales and the impact of Winter Storm Uri.
Chili’s Company restaurant expenses, as a percentage of Company sales, decreased primarily due to lower advertising expenses, lower hourly labor expenses, and favorable menu item mix, partially offset by higher expenses related to delivery fees and supplies in connection with the growth in off-premise sales and higher manager bonus expenses.

Maggiano’s

Maggiano’s Company sales decreased primarily due to lower dining room sales, partially offset by increased off-premise sales.
Maggiano’s Company restaurant expenses, as a percentage of Company sales, decreased primarily due to lower manager and hourly labor expenses, lower repairs and maintenance expenses, lower variable rent expenses, favorable menu item mix, lower banquet expenses, lower credit card fees, lower advertising expenses and lower utilities expenses. These decreases were partially offset by sales deleverage, higher expenses related to delivery fees and supplies in connection with the growth in off-premise sales, higher manager bonus expenses and higher insurance expenses.

Franchise and other revenues

Franchise and other revenues declined primarily due to the ongoing impact of the COVID-19 pandemic on our domestic and global franchise restaurants. Our franchisees generated sales of approximately $190.8 million in the third quarter of fiscal 2021 compared to $218.0 million in the third quarter of fiscal 2020.
Maggiano’s Franchise and other revenues decreased primarily due to lower banquet volume driven by the ongoing impact of the COVID-19 pandemic.

Income Taxes

On a GAAP basis, the effective income tax rate increased to 11.7% in the third quarter of fiscal 2021 compared to a benefit of 13.2% in the third quarter of fiscal 2020 primarily driven by leverage on the FICA tip tax credit, partially offset by the favorable impact of excess benefits associated with stock-based compensation. Excluding the impact of special items (see non-GAAP reconciliation below for details), the effective income tax rate increased to 15.0% in the third quarter of fiscal 2021 compared to 4.7% in the third quarter of fiscal 2020 driven by improved operating performance.

Webcast Information

Investors and interested parties are invited to listen to today’s conference call, as management will provide further details of the quarter and business updates. The call will broadcast live on Brinker’s website today, April 28, 2021 at 9 a.m. CDT:

http://investors.brinker.com/events/event-details/q3-2021-brinker-international-earnings-conference-call

For those who are unable to listen to the live broadcast, a replay of the call will be available shortly thereafter and will remain on Brinker’s website until the end of the day May 12, 2021.

Additional financial information, including statements of income which detail operations excluding special items, franchise and other revenues, and comparable restaurant sales trends by brand, is also available on Brinker’s website under the Financial Information section of the Investor tab.

Forward Calendar

SEC Form 10-Q for the third quarter of fiscal 2021 filing on or before May 3, 2021
Earnings release call for the fourth quarter of fiscal 2021 on August 18, 2021

Non-GAAP Measures

Brinker management uses certain non-GAAP measures in analyzing operating performance and believes that the presentation of these measures in this release provides investors with information that is beneficial to gaining an understanding of the Company’s financial results. Non-GAAP disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Reconciliations of these non-GAAP measures are included in the tables below.

About Brinker

Brinker International, Inc. is one of the world’s leading casual dining restaurant companies. Based in Dallas, Texas, as of March 24, 2021, Brinker owned, operated, or franchised 1,657 restaurants under the names Chili’s^® Grill & Bar (1,603 restaurants) and Maggiano’s Little Italy^® (54 restaurants).

Forward-Looking Statements

The statements and tables contained in this release that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are based on our current plans and expectations and involve risks and uncertainties which could cause actual results to differ materially from our historical results or from those projected in forward-looking statements, and are currently, or in the future could be, amplified by the novel strain of the coronavirus (“COVID-19”) pandemic. Such risks and uncertainties include, among other things, uncertainty of the magnitude, duration, geographic reach and impact of the COVID-19 pandemic on local, national and global economies; the current, and uncertain future, impact of the COVID-19 pandemic and governments’ responses to it on our industry, business, growth, reputation, projections, prospects, financial condition, operations, cash flows, and liquidity; the adequacy or effectiveness of steps we take to respond to the COVID-19 crisis, including cost reduction or other mitigation programs; the impact of competition; changes in consumer preferences; consumer perception of food safety; reduced disposable income; unfavorable publicity; increased minimum wages; governmental regulations; the impact of mergers, acquisitions, divestitures and other strategic transactions; the Company’s ability to meet its business strategy plan; loss of key management personnel; failure to hire and retain high-quality restaurant management; the impact of social media; failure to protect the security of data of our guests and team members; product availability; regional business and economic conditions; litigation; franchisee success; inflation; changes in the retail industry; technology failures; failure to protect our intellectual property; outsourcing; impairment of goodwill or assets; failure to maintain effective internal control over financial reporting; actions of activist shareholders; adverse weather conditions; terrorist acts; health epidemics or pandemics (such as COVID-19); and tax reform; as well as the risks and uncertainties described in “Risk Factors” in our Annual Report on Form 10-K and future filings with the Securities and Exchange Commission.

BRINKER INTERNATIONAL, INC.
Consolidated Statements of Comprehensive Income (Unaudited)
(In millions, except per share amounts)

	Thirteen Week Periods Ended				Thirty-Nine Week Periods Ended
	March 24, 2021		March 25, 2020		March 24, 2021		March 25, 2020
Revenues
Company sales	$	813.7	$	840.4	$	2,288.1	$	2,451.8
Franchise and other revenues⁽¹⁾	14.7		19.6		41.1		63.5
Total revenues	828.4		860.0		2,329.2		2,515.3
Operating costs and expenses
Food and beverage costs	213.9		226.7		606.3		653.6
Restaurant labor	270.8		285.9		774.6		846.2
Restaurant expenses	216.1		220.2		629.9		652.2
Depreciation and amortization	37.4		43.5		112.0		120.9
General and administrative	33.7		23.3		94.2		95.9
Other (gains) and charges⁽²⁾	4.3		19.3		13.5		30.7
Total operating costs and expenses	776.2		818.9		2,230.5		2,399.5
Operating income	52.2		41.1		98.7		115.8
Interest expenses	14.1		14.3		43.1		44.2
Other income, net	(0.3)		(0.4)		(1.2)		(1.4)
Income before income taxes	38.4		27.2		56.8		73.0
Provision (benefit) for income taxes	4.5		(3.6)		0.2		(0.6)
Net income	$	33.9	$	30.8	$	56.6	$	73.6

Basic net income per share	$	0.74	$	0.83	$	1.25	$	1.97

Diluted net income per share	$	0.73	$	0.81	$	1.22	$	1.94

Basic weighted average shares outstanding	45.5		37.2		45.3		37.3

Diluted weighted average shares outstanding	46.7		37.8		46.2		38.0

Other comprehensive income (loss)
Foreign currency translation adjustments⁽³⁾	$	0.3	$	(1.0)	$	1.1	$	(1.1)
Other comprehensive income (loss)	0.3		(1.0)		1.1		(1.1)
Comprehensive income	$	34.2	$	29.8	$	57.7	$	72.5


⁽¹⁾	Franchise and other revenues include royalties, delivery service income, gift card breakage, franchise advertising fees, digital entertainment revenues, Maggiano’s banquet service charge income, franchise and development fees, gift card discount costs from third-party gift card sales and merchandise income.
⁽²⁾	Other (gains) and charges included in the Consolidated Statements of Comprehensive Income (Unaudited) included (in millions):

	Thirteen Week Periods Ended				Thirty-Nine Week Periods Ended
	March 24, 2021		March 25, 2020		March 24, 2021		March 25, 2020
Loss from natural disasters, net of (insurance recoveries)	$	1.8	$	(0.9)	$	2.0	$	(0.6)
Remodel-related costs	0.9		0.6		1.8		2.1
COVID-19 related charges	0.9		16.1		3.1		16.1
Restaurant closure charges	0.3		0.3		2.2		3.4
Foreign currency transaction (gain) loss	0.1		2.3		(0.3)		2.2
Restaurant impairment charges	—		—		2.5		4.6
Lease modification gain, net	—		—		(0.5)		(3.1)
Acquisition of franchise restaurants costs, net	—		1.1		—		2.6
Other	0.3		(0.2)		2.7		3.4
	$	4.3	$	19.3	$	13.5	$	30.7


⁽³⁾	Foreign currency translation adjustment included in our Comprehensive income in the Consolidated Statements of Comprehensive Income (Unaudited) represents the unrealized impact of translating the financial statements of our Canadian restaurants from Canadian dollars to U.S. dollars. This amount is not included in Net income and would only be realized upon disposition of these restaurants.

BRINKER INTERNATIONAL, INC.
Condensed Consolidated Balance Sheets (Unaudited)
(In millions)

	March 24, 2021		June 24, 2020
ASSETS
Total current assets	$	252.4	$	224.4
Net property and equipment	751.6		805.3
Operating lease assets	1,025.8		1,054.6
Deferred income taxes, net	47.5		38.2
Other assets	231.7		233.5
Total assets	$	2,309.0	$	2,356.0
LIABILITIES AND SHAREHOLDERS’ DEFICIT
Total current liabilities	$	577.8	$	497.9
Long-term debt and finance leases, less current installments	1,017.0		1,208.5
Long-term operating lease liabilities, less current portion	1,023.7		1,061.6
Other liabilities	81.1		67.1
Total shareholders’ deficit	(390.6)		(479.1)
Total liabilities and shareholders’ deficit	$	2,309.0	$	2,356.0

Of the 1,120 Company-owned restaurants, at March 24, 2021, we own both the building and land for 42 restaurants. The related book values associated with these restaurants included land of $33.1 million and buildings of $11.6 million.

BRINKER INTERNATIONAL, INC.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In millions)

	Thirty-Nine Week Periods Ended
	March 24, 2021		March 25, 2020
Cash flows from operating activities
Net income	$	56.6	$	73.6
Adjustments to reconcile Net income to Net cash provided by operating activities:
Depreciation and amortization	112.0		120.9
Stock-based compensation	11.3		9.0
Restructure and impairment charges	6.5		24.8
Net loss on disposal of assets	1.1		1.1
Other	2.7		1.7
Changes in assets and liabilities	78.4		6.7
Net cash provided by operating activities	268.6		237.8
Cash flows from investing activities
Payments for property and equipment	(62.4)		(82.0)
Proceeds from sale of assets	1.6		1.0
Proceeds from note receivable	1.5		2.2
Payments for franchise restaurant acquisitions	—		(94.6)
Net cash used in investing activities	(59.3)		(173.4)
Cash flows from financing activities
Payments on revolving credit facility	(210.0)		(630.0)
Borrowings on revolving credit facility	28.4		806.8
Payments on long-term debt	(14.3)		(12.4)
Purchases of treasury stock	(4.1)		(32.3)
Payments for debt issuance costs	(2.2)		(1.0)
Payments of dividends	(1.5)		(43.3)
Proceeds from issuance of treasury stock	14.1		1.6
Net cash (used in) provided by financing activities	(189.6)		89.4
Net change in cash and cash equivalents	19.7		153.8
Cash and cash equivalents at beginning of period	43.9		13.4
Cash and cash equivalents at end of period	$	63.6	$	167.2

BRINKER INTERNATIONAL, INC.
Restaurant Summary

			New Openings
			Fiscal 2021
	Total Restaurants Open at March 24, 2021	Total Restaurants Open at March 25, 2020	Third Quarter Openings	Fiscal Year Openings	Full Year Projected Openings
Company-owned restaurants
Chili’s domestic	1,063	1,060	2	6	8
Chili’s international	5	5	—	—	—
Maggiano’s domestic	52	52	—	—	—
Total Company-owned	1,120	1,117	2	6	8
Franchise restaurants
Chili’s domestic	172	178	2	3	3
Chili’s international	363	379	2	6	7
Maggiano’s domestic	2	1	—	1	1
Total franchise	537	558	4	10	11
Total Company-owned and franchise
Chili’s domestic	1,235	1,238	4	9	11
Chili’s international	368	384	2	6	7
Maggiano’s domestic	54	53	—	1	1
Total	1,657	1,675	6	16	19

			Relocation Openings
Chili’s domestic Company-owned relocations			—	2	2

NON-GAAP INFORMATION AND RECONCILIATIONS
Comparable Restaurant Sales
*Q3 21 and Q3 20*

	Comparable Restaurant Sales⁽¹⁾				Price Impact				Mix-Shift⁽³⁾				Traffic
	Q3:21 vs 20⁽²⁾		Q3:20 vs 19		Q3:21 vs 20		Q3:20 vs 19		Q3:21 vs 20		Q3:20 vs 19		Q3:21 vs 20		Q3:20 vs 19
Company-owned	(3.3)	%	(5.9)	%	0.6	%	1.0	%	(6.2)	%	(0.1)	%	2.3	%	(6.8)	%
Chili’s	0.0	%	(5.3)	%	0.5	%	0.9	%	(4.5)	%	0.3	%	4.0	%	(6.5)	%
Maggiano’s	(29.6)	%	(9.9)	%	1.2	%	1.8	%	(9.2)	%	(1.5)	%	(21.6)	%	(10.2)	%
Chili’s franchise⁽⁴⁾	0.2	%	(7.7)	%
U.S.	5.2	%	(6.3)	%
International	(8.8)	%	(9.5)	%
Chili’s domestic⁽⁵⁾	0.6	%	(5.4)	%
System-wide⁽⁶⁾	(2.8)	%	(6.2)	%


⁽¹⁾	Comparable Restaurant Sales include all restaurants that have been in operation for more than 18 months except acquired restaurants which are included after 12 months of ownership. Restaurants temporarily closed 14 days or more are excluded from comparable restaurant sales. Percentage amounts are calculated based on the comparable periods year-over-year.

⁽²⁾	Comparable Restaurant Sales for Q3:21 vs 20 include the results of It’s Just Wings, a virtual brand launched nationally in June 2020.

⁽³⁾	Mix-Shift is calculated as the year-over-year percentage change in Company sales resulting from the change in menu items ordered by guests.

⁽⁴⁾	Chili’s franchise sales generated by franchisees are not included in revenues in the Consolidated Statements of Comprehensive Income (Unaudited); however, we generate royalty revenues and advertising fees based on franchisee revenues, where applicable. We believe presenting Chili’s franchise comparable restaurant sales provides investors relevant information regarding total brand performance.

⁽⁵⁾	Chili’s domestic Comparable Restaurant Sales percentages are derived from sales generated by Company-owned and franchise-operated Chili’s restaurants in the United States.

⁽⁶⁾	System-wide Comparable Restaurant Sales are derived from sales generated by Company-owned Chili’s and Maggiano’s restaurants in addition to the sales generated at franchise-operated Chili’s restaurants.

Reconciliation of Net Income Excluding Special Items (in millions, except per share amounts)

Brinker believes excluding special items from its financial results provides investors with a clearer perspective of the Company’s ongoing operating performance and a more relevant comparison to prior period results.

	Third Quarter
	Q3 21		EPS Q3 21		Q3 20		EPS Q3 20
Net income – GAAP	$	33.9	$	0.73	$	30.8	$	0.81
Special items⁽¹⁾	4.4		0.09		23.7		0.63
Income tax effect related to special items⁽²⁾	(1.1)		(0.02)		(6.0)		(0.16)
Special items, net of taxes	3.3		0.07		17.7		0.47
Adjustment for special tax items⁽³⁾	(0.8)		(0.02)		0.0		0.00
Net income, excluding special items – Non-GAAP	$	36.4	$	0.78	$	48.5	$	1.28


⁽¹⁾	Special items in the third quarter of fiscal 2021 consist of a charge of $4.3 million in Other (gains) and charges and $0.1 million of incremental depreciation expenses associated with a change in estimated useful life of certain restaurant-level long-lived assets. Special items in the third quarter of fiscal 2020 consist of $19.3 million in Other (gains) and charges that includes charges primarily related to the COVID-19 pandemic and $4.4 million of incremental depreciation expenses associated with a change in estimated useful life of certain restaurant-level long-lived assets.

⁽²⁾	Income tax effect related to special items is based on the statutory tax rate in effect at the end of each period presented.

⁽³⁾	Adjustment for special tax items in the third quarter of fiscal 2021 primarily related to excess tax windfalls associated with stock-based compensation. Adjustment for special tax items in the third quarter of fiscal 2020 was negligible.

Reconciliation of Restaurant Operating Margin (in millions, except percentages)

	Chili’s						Maggiano’s						Brinker
	Q3 21			Q3 20			Q3 21			Q3 20			Q3 21			Q3 20
Operating income – GAAP	$	80.3		$	58.7		$	1.4		$	4.0		$	52.2		$	41.1
Operating income as a percentage of Total revenues	10.5		%	7.7		%	2.1		%	4.2		%	6.3		%	4.8		%

Operating income – GAAP	$	80.3		$	58.7		$	1.4		$	4.0		$	52.2		$	41.1
Less: Franchise and other revenues	(14.0)			(15.7)			(0.7)			(3.9)			(14.7)			(19.6)
Plus: Depreciation and amortization	31.0			36.5			3.4			3.8			37.4			43.5
General and administrative	7.0			5.9			1.3			1.1			33.7			23.3
Other (gains) and charges	3.1			14.9			0.3			2.4			4.3			19.3
Restaurant operating margin – non-GAAP	$	107.4		$	100.3		$	5.7		$	7.4		$	112.9		$	107.6
Restaurant operating margin as a percentage of Company sales	14.3		%	13.4		%	8.8		%	8.1		%	13.9		%	12.8		%

Restaurant operating margin is not a measurement determined in accordance with GAAP and should not be considered in isolation, or as an alternative to operating income as an indicator of financial performance. Restaurant operating margin is widely regarded in the restaurant industry as a useful metric by which to evaluate restaurant-level operating efficiency and performance of ongoing restaurant-level operations. This non-GAAP measure is not indicative of overall Company performance and profitability because this measure does not directly accrue benefit to the shareholders due to the nature of costs excluded. We define Restaurant operating margin as Company sales less Food and beverage costs, Restaurant labor and Restaurant expenses. We believe this metric provides a more useful comparison between periods and enables investors to focus on the performance of restaurant-level operations by excluding revenues not related to food and beverage sales at Company-owned restaurants, corporate General and administrative expenses, Depreciation and amortization, and Other (gains) and charges.

Restaurant operating margin excludes Franchise and other revenues which are earned primarily from franchise royalties, advertising fees, and other non-food and beverage revenues streams such as delivery service income, gift card breakage, banquet service charges and digital entertainment revenues. Depreciation and amortization expenses, substantially all of which are related to restaurant-level assets, are excluded because such expenses represent historical costs which do not reflect current cash outlays for the restaurants. General and administrative expenses include primarily non-restaurant-level costs associated with support of the restaurants and other activities at our corporate offices and are therefore excluded. We believe that excluding special items, included within Other (gains) and charges, from Restaurant operating margin provides investors with a clearer perspective of the Company’s ongoing operating performance and a more useful comparison to prior period results. Restaurant operating margin as presented may not be comparable to other similarly titled measures of other companies in our industry.

Reconciliation of Free Cash Flow (in millions)

Brinker believes presenting free cash flow provides a useful measure to evaluate the cash flow available for reinvestment after considering the capital requirements and expenditures of our business operations.

	Thirty-Nine Week Period Ended March 24, 2021
Cash flows provided by operating activities – GAAP	$	268.6
Capital expenditures	(62.4)
Free cash flow – non-GAAP	$	206.2

View original content to download multimedia:http://www.prnewswire.com/news-releases/brinker-international-reports-third-quarter-of-fiscal-2021-results-and-provides-fourth-quarter-of-fiscal-2021-outlook-301278685.html

SOURCE Brinker International, Inc.

April 28, 2021 6:48 am

Quarterhill Acquires VDS GmbH

PR Newswire

VDS is a German-based provider of speed radar, adding new monitoring and enforcement capabilities to International Road Dynamics (“IRD”)
VDS to be integrated into IRD’s wholly owned subsidiary, Sensor Line GmbH
Acquisition price of approximately $2.8 million

TORONTO, April 28, 2021 /PRNewswire/ – Quarterhill Inc. (“Quarterhill”) (TSX: QTRH) (OTCQX: QTRHF), announces that it has completed the acquisition of all the issued and outstanding shares of VDS Verkehrstechnik GmbH (“VDS”), a German-based Intelligent Transportation Systems (“ITS”) provider of high precision traffic monitoring devices, for cash consideration of approximately $2.8 million. All dollar amounts are in Canadian dollars unless otherwise stated.

Based in Löbau, Germany, VDS develops, manufactures and sells fixed and mobile traffic monitoring devices that record driver speed and red-light infractions. VDS’s devices are currently the only radar-based products certified under new regulations in Germany that enable direct enforcement of traffic violations. VDS has one manufacturing facility and two service centers in Germany and will be integrated into Sensor Line GmbH, which was acquired by Quarterhill in January 2021 and is one of VDS’s largest suppliers of sensors. Sensor Line and VDS will continue to build on their 20-year partnership and undertake joint technology development.

“This acquisition further increases the number of well-engineered products to our suite of solutions and global sales channels,” said Rish Malhotra, CEO of IRD. “VDS’s technology expands our enforcement capabilities with the ability to generate speeding and red-light violations. These products are highly sought-after as governments at all levels seek to enhance transportation safety and identify new revenue opportunities. VDS also broadens our customer base to some of the largest cities and municipalities in Germany and their team will also support IRD’s projects in the region.”

“The acquisition of VDS fits with our strategy to support the growth of IRD and to expand our ITS business,” said Paul Hill, CEO of Quarterhill. “Our existing ITS platform provides for seamless integration and improves the potential for business synergies. We were introduced to VDS through Sensor Line, and this demonstrates how our presence in the ITS industry can lead to unique opportunities for acquisitions. We are pleased to have already completed two deals in 2021 and look forward to more M&A activity during the remainder of the year.”

Post synergies, VDS is expected to generate approximately $5.0 million in revenue and $600,000 in Adjusted EBITDA on an annual basis. For more information on VDS, please visit: https://www.vds-verkehrstechnik.de/en

About Quarterhill
Quarterhill is a growth-oriented company in the Intelligent Transportation System industry as well as a leader in Intellectual Property licensing. Our goal is to execute an investment strategy that capitalizes on attractive market opportunities within Intelligent Transportation Systems and its adjacent markets to become a global leader. Quarterhill is listed on the TSX under the symbol QTRH and on the OTCQX Best Market under the symbol QTRHF. For more information: www.quarterhill.com

Forward-looking Information

This news release contains forward-looking statements regarding IRD, Quarterhill and their businesses. Forward-looking statements are based on estimates and assumptions made by IRD and/or Quarterhill in light of their experience and perception of historical trends, current conditions, expected future developments and the expected effects of new business strategies, as well as other factors that IRD and/or Quarterhill believe are appropriate in the circumstances. The forward-looking events and circumstances discussed herein may not occur and could differ materially as a result of known and unknown risk factors and uncertainties affecting IRD and/or Quarterhill, including: potential risks and uncertainties relating to the ultimate geographic spread of the novel coronavirus (“COVID-19”); the severity of the disease; the duration of the COVID-19 outbreak; actions that may be taken by governmental authorities to contain the COVID-19 outbreak or to treat its impact; the potential negative impacts of COVID-19 on the global economy and financial markets and any resulting impact on IRD and/or Quarterhill and/or their businesses. Other factors include, without limitation, the risks described in Quarterhill’s March 11, 2021 annual information form for the year ended December 31, 2020 (the “AIF”). Copies of the AIF may be obtained at www.sedar.com. IRD and Quarterhill recommend that readers review and consider all of these risk factors and notes that readers should not place undue reliance on any of IRD’s forward-looking statements. IRD has no intention, and undertakes no obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Cautionary Note Regarding Use of Non-IFRS Measures
Quarterhill has historically used a set of metrics when evaluating our operational and financial performance. We continually monitor, evaluate and update these metrics as required to ensure they provide information considered most useful, in the opinion of our management, to any decision-making based on Quarterhill’s performance. This section defines, quantifies and analyzes the key performance indicators used by our management and referred to elsewhere in this Press Release, which are not recognized under IFRS and have no standardized meaning prescribed by IFRS. These indicators and measures are therefore unlikely to be comparable to similar measures presented by other issuers.

In this Press Release, we use the non-IFRS term “Adjusted EBITDA” to mean net income (loss) from continuing operations adjusted for: (i) income taxes; (ii) finance expense or income; (iii) amortization and impairment of intangibles; (iv) special charges and other one-time items; (v) depreciation of right-of-use assets and property, plant and equipment; (vi) effects of deleted deferred revenue; (vii) stock-based compensation; (viii) foreign exchange (gain) loss; and (ix) equity in earnings and dividends from joint ventures. Adjusted EBITDA is used by our management to assess our normalized cash generated on a consolidated basis and in our operating segments. Adjusted EBITDA is also a performance measure that may be used by investors to analyze the cash generated by Quarterhill and our operating segments. Adjusted EBITDA should not be interpreted as an alternative to net income and cash flows from operations as determined in accordance with IFRS or as a measure of liquidity.

View original content:http://www.prnewswire.com/news-releases/quarterhill-acquires-vds-gmbh-301278891.html

SOURCE Quarterhill Inc.

April 28, 2021 6:48 am

Marine Products Corporation Announces 20 Percent Increase in Regular Quarterly Cash Dividend

PR Newswire

ATLANTA, April 28, 2021 /PRNewswire/ — Marine Products Corporation (NYSE: MPX) announced today that its Board of Directors declared a 20 percent increase to the regular quarterly cash dividend from $0.10 per share to $0.12 per share payable June 10, 2021 to common stockholders of record at the close of business on May 10, 2021.

Marine Products Corporation (NYSE: MPX) is a leading manufacturer of fiberglass boats under three brand names: Chaparral, Robalo and Vortex. Chaparral’s sterndrive models include SSi and SSX, along with the Chaparral Surf Series. Chaparral’s outboard offerings include various models, such as OSX Luxury Sportboats, the 257 SSX, and SunCoast Sportdecks. Robalo builds an array of outboard sport fishing boats, which include center consoles, dual consoles and Cayman Bay Boat models. Chaparral also offers jet powered boats under the Vortex brand name. The Company continues to diversify its product lines through product innovation. With premium brands, a solid capital structure, and a strong independent dealer network, Marine Products Corporation is prepared to capitalize on opportunities to increase its market share and to generate superior financial performance to build long-term shareholder value. For more information on Marine Products Corporation visit our website at MarineProductsCorp.com.

For information contact:

BEN M. PALMER
Chief Financial Officer
(404) 321-7910
[email protected]

JIM LANDERS

Vice President Corporate Services
(404) 321-2162
[email protected]

View original content:http://www.prnewswire.com/news-releases/marine-products-corporation-announces-20-percent-increase-in-regular-quarterly-cash-dividend-301278459.html

SOURCE Marine Products Corporation