DULUTH, Ga.--(BUSINESS WIRE)-- AGCO, Your Agriculture Company (NYSE: AGCO), a worldwide manufacturer and distributor of agricultural equipment and solutions, reported its results for the first quarter ended March 31, 2021. Net sales for the first quarter were approximately $2.4 billion, an increase of approximately 23.4% compared to the first quarter of 2020. Reported net income was $1.99 per share for the first quarter of 2021, and adjusted net income(3), which excludes restructuring expenses, was $2.00 per share. These results compare to reported net income of $0.85 per share, and adjusted net income, excluding restructuring expenses, of $0.86 per share for the first quarter of 2020. Excluding favorable currency translation impacts of approximately 3.5%, net sales in the first quarter of 2021 increased approximately 19.8% compared to the first quarter of 2020.
Highlights
(1) | As compared to first quarter 2020. | |
(2) | Excludes currency translation impact. | |
(3) | See reconciliation of Non-GAAP measures in appendix. |
“AGCO continued its strong operational performance in the first quarter and set records for first quarter operating income and earnings per share,” stated Eric Hansotia, AGCO’s Chairman, President and Chief Executive Officer. “Favorable market demand and positive market response to our technology-focused products helped produce sales growth and margin expansion across all regions. Outstanding execution from our team allowed us to minimize the impact of ongoing supply constraints, and an improved pricing environment helped offset material and freight cost inflation. Healthy farm fundamentals are driving robust replacement demand and our order boards remain well ahead of last year. With increased visibility for the coming quarters, we have raised our net sales and earnings forecast for 2021 while enabling continued investment in our premium technology, smart farming solutions and enhanced digital capabilities.”
Market Update
|
| Industry Unit Retail Sales | ||
|
| Tractors |
| Combines |
Three Months Ended March 31, 2021 |
| Change from Prior Year Period |
| Change from Prior Year Period |
North America(1) |
| 31% |
| 17% |
South America |
| 33% |
| 26% |
Western Europe(2) |
| 23% |
| 16% |
(1) | Excludes compact tractors. | |
(2) | Based on Company estimates. |
“The ongoing economic recovery from the COVID-19 pandemic is putting pressure on global grain inventories which are well below last year’s levels,” stated Mr. Hansotia. “As a result, prices of soft commodity are supporting more favorable farm economics as well as increased demand for machinery. These improved conditions are expected to generate industry growth across all the major markets in 2021.”
“North American industry retail sales increased in the first three months of 2021 compared to the same period in 2020,” continued Mr. Hansotia. “Sales of low horsepower tractors moved above prior peak levels while demand for high horsepower tractors also improved. With the fleet age remaining extended, industry retail sales of North America large agricultural equipment grew approximately 12% in the first quarter. Industry retail sales in Western Europe also increased in the first quarter of 2021 with growth across nearly all major markets. With higher wheat, dairy and livestock prices projecting favorable farm economics, farmer sentiment is expected to remain strong in Western Europe, supporting increased equipment demand in 2021. In South America, industry sales increased during the first three months of 2021 driven by improved demand in both Brazil and Argentina as well as recovery in the smaller export markets. A healthy first crop as well as favorable exchange rates are supporting positive economic conditions for farmers who continue to replace an aged fleet. Our long-term global view remains positive. Increasing demand for commodities, driven by the growing world population, as well as rising emerging market protein consumption and biofuel use, are expected to support elevated farm income and healthy conditions in our industry.”
Regional Results
AGCO Regional Net Sales (in millions)
Three Months Ended March 31, |
| 2021 |
| 2020 |
| % change from 2020 |
| % change from 2020 due to currency translation(1) |
| % change excluding currency translation | |||||||
North America |
| $ | 611.1 |
|
| $ | 551.9 |
|
| 10.7 | % |
| 1.0 | % |
| 9.7 | % |
South America |
| 240.5 |
|
| 153.9 |
|
| 56.3 | % |
| (27.6 | )% |
| 83.8 | % | ||
Europe/Middle East |
| 1,327.2 |
|
| 1,113.3 |
|
| 19.2 | % |
| 7.8 | % |
| 11.5 | % | ||
Asia/Pacific/Africa |
| 199.9 |
|
| 109.2 |
|
| 83.1 | % |
| 17.1 | % |
| 65.9 | % | ||
Total |
| $ | 2,378.7 |
|
| $ | 1,928.3 |
|
| 23.4 | % |
| 3.5 | % |
| 19.8 | % |
(1) | See Footnotes for additional disclosures. |
North America
AGCO’s North American net sales increased 9.7% in the first three months of 2021 compared to the same period of 2020, excluding the positive impact of currency translation. Increased sales of tractors, parts, grain and protein equipment and Precision Planting products generated most of the increase. Income from operations for the first three months of 2021 grew approximately $14.0 million compared to the same period in 2020 and operating margins reached 12.3%. Higher sales and production as well as the benefit of favorable pricing contributed to the improvement.
South America
Net sales in the South American region increased 83.8% in the first three months of 2021 compared to the same period of 2020, excluding the impact of unfavorable currency translation. Sales grew across all markets with the largest increases in Brazil and Argentina. Income from operations in the first three months of 2021 increased by approximately $25.0 million compared to the same period in 2020. The improved South America results reflect the benefit of higher sales and production, in addition to a richer sales mix with improved pricing offsetting material cost inflation.
Europe/Middle East
AGCO’s Europe/Middle East net sales increased 11.5% in the first three months of 2021 compared to the same period in 2020, excluding favorable currency translation impacts. Sales growth was achieved in all major markets with high horsepower tractors and parts showing the largest increases. Income from operations increased approximately $42.0 million in the first three months of 2021, compared to the same period in 2020, due to higher net sales and production volumes.
Asia/Pacific/Africa
Net sales in Asia/Pacific/Africa increased 65.9%, excluding the positive impact of currency translation, in the first three months of 2021 compared to the same period in 2020. Higher sales in China, Australia as well as Africa produced most of the increase. Income from operations improved by approximately $22.3 million in the first three months of 2021, compared to the same period in 2020.
Outlook
The health, safety and well-being of all AGCO employees, dealers and farmer customers continues to be AGCO’s top priority during the COVID-19 pandemic. The following outlook does not contemplate any further sales or production disruptions caused by the pandemic.
AGCO’s net sales for 2021 are expected to range from $10.6 billion to $10.8 billion, reflecting improved sales volumes, pricing and positive foreign currency translation. Gross and operating margins are projected to improve from 2020 levels, reflecting the impact of higher sales and production volumes as well as margin improvement initiatives. These improvements are planned to fund increases in engineering and other technology investments to support AGCO’s precision agriculture and digital initiatives. Based on these assumptions, 2021 earnings per share is targeted in a range from $8.40 to $8.60.
* * * * *
AGCO will host a conference call with respect to this earnings announcement at 10:00 a.m. Eastern Time on Thursday, April 29, 2021. The Company will refer to slides on its conference call. Interested persons can access the conference call and slide presentation via AGCO’s website at www.agcocorp.com in the “Events” section on the “Company/Investors” page of our website. A replay of the conference call will be available approximately two hours after the conclusion of the conference call for twelve months following the call. A copy of this press release will be available on AGCO’s website for at least twelve months following the call.
* * * * *
Safe Harbor Statement
Statements that are not historical facts, including the projections of earnings per share, sales, industry demand, market conditions, commodity prices, currency translation, farm income levels, margin levels, investments in product and technology development, new product introductions, restructuring and other cost reduction initiatives, production volumes, tax rates and general economic conditions, are forward-looking and subject to risks that could cause actual results to differ materially from those suggested by the statements. The following are among the factors that could cause actual results to differ materially from the results discussed in or implied by the forward-looking statements.
Further information concerning these and other factors is included in AGCO’s filings with the Securities and Exchange Commission, including its Form 10-K for the year ended December 31, 2020. AGCO disclaims any obligation to update any forward-looking statements except as required by law.
* * * * *
About AGCO
AGCO (NYSE: AGCO) is a global leader in the design, manufacture and distribution of agricultural solutions and delivers high-tech solutions for farmers feeding the world through its full line of equipment and related services. AGCO products are sold through five core brands, Challenger®, Fendt®, GSI®, Massey Ferguson® and Valtra®, supported by Fuse® smart farming solutions. Founded in 1990 and headquartered in Duluth, Georgia, USA, AGCO had net sales of over $9.1 billion in 2020. For more information, visit http://www.agcocorp.com. For company news, information and events, please follow us on Twitter: @AGCOCorp. For financial news on Twitter, please follow the hashtag #AGCOIR.
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Please visit our website at www.agcocorp.com
AGCO CORPORATION AND SUBSIDIARIES | |||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
(unaudited and in millions) | |||||||
| March 31, 2021 |
| December 31, 2020 | ||||
ASSETS |
|
|
| ||||
Current Assets: |
|
|
| ||||
Cash and cash equivalents | $ | 453.7 |
|
| $ | 1,119.1 |
|
Accounts and notes receivable, net | 1,048.2 |
|
| 856.0 |
| ||
Inventories, net | 2,360.3 |
|
| 1,974.4 |
| ||
Other current assets | 436.1 |
|
| 418.9 |
| ||
Total current assets | 4,298.3 |
|
| 4,368.4 |
| ||
Property, plant and equipment, net | 1,448.3 |
|
| 1,508.5 |
| ||
Right-of-use lease assets | 158.5 |
|
| 165.1 |
| ||
Investment in affiliates | 444.1 |
|
| 442.7 |
| ||
Deferred tax assets | 70.8 |
|
| 77.6 |
| ||
Other assets | 184.0 |
|
| 179.8 |
| ||
Intangible assets, net | 431.5 |
|
| 455.6 |
| ||
Goodwill | 1,276.8 |
|
| 1,306.5 |
| ||
Total assets | $ | 8,312.3 |
|
| $ | 8,504.2 |
|
|
|
|
| ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
| ||||
Current Liabilities: |
|
|
| ||||
Current portion of long-term debt | $ | 311.9 |
|
| $ | 325.9 |
|
Short-term borrowings | 51.8 |
|
| 33.8 |
| ||
Accounts payable | 1,097.5 |
|
| 855.1 |
| ||
Accrued expenses | 1,685.1 |
|
| 1,916.7 |
| ||
Other current liabilities | 268.3 |
|
| 231.3 |
| ||
Total current liabilities | 3,414.6 |
|
| 3,362.8 |
| ||
Long-term debt, less current portion and debt issuance costs | 936.6 |
|
| 1,256.7 |
| ||
Operating lease liabilities | 119.6 |
|
| 125.9 |
| ||
Pension and postretirement health care benefits | 216.2 |
|
| 253.4 |
| ||
Deferred tax liabilities | 109.1 |
|
| 112.4 |
| ||
Other noncurrent liabilities | 391.5 |
|
| 375.0 |
| ||
Total liabilities | 5,187.6 |
|
| 5,486.2 |
| ||
|
|
|
| ||||
Stockholders’ Equity: |
|
|
| ||||
AGCO Corporation stockholders’ equity: |
|
|
| ||||
Common stock | 0.8 |
|
| 0.8 |
| ||
Additional paid-in capital | 5.7 |
|
| 30.9 |
| ||
Retained earnings | 4,897.9 |
|
| 4,759.1 |
| ||
Accumulated other comprehensive loss | (1,817.9 | ) |
| (1,810.8 | ) | ||
Total AGCO Corporation stockholders’ equity | 3,086.5 |
|
| 2,980.0 |
| ||
Noncontrolling interests | 38.2 |
|
| 38.0 |
| ||
Total stockholders’ equity | 3,124.7 |
|
| 3,018.0 |
| ||
Total liabilities and stockholders’ equity | $ | 8,312.3 |
|
| $ | 8,504.2 |
|
See accompanying notes to condensed consolidated financial statements. |
AGCO CORPORATION AND SUBSIDIARIES | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||
(unaudited and in millions, except per share data) | |||||||
| Three Months Ended March 31, | ||||||
| 2021 |
| 2020 | ||||
Net sales | $ | 2,378.7 |
|
| $ | 1,928.3 |
|
Cost of goods sold | 1,808.2 |
|
| 1,477.8 |
| ||
Gross profit | 570.5 |
|
| 450.5 |
| ||
Selling, general and administrative expenses | 260.6 |
|
| 247.6 |
| ||
Engineering expenses | 96.3 |
|
| 84.9 |
| ||
Amortization of intangibles | 17.5 |
|
| 15.0 |
| ||
Restructuring expenses | 1.3 |
|
| 0.8 |
| ||
Bad debt (credit) expense | (0.4 | ) |
| 1.8 |
| ||
Income from operations | 195.2 |
|
| 100.4 |
| ||
Interest expense, net | 3.4 |
|
| 3.4 |
| ||
Other expense, net | 11.5 |
|
| 12.5 |
| ||
Income before income taxes and equity in net earnings of affiliates | 180.3 |
|
| 84.5 |
| ||
Income tax provision | 43.6 |
|
| 29.4 |
| ||
Income before equity in net earnings of affiliates | 136.7 |
|
| 55.1 |
| ||
Equity in net earnings of affiliates | 14.7 |
|
| 11.2 |
| ||
Net income | 151.4 |
|
| 66.3 |
| ||
Net income attributable to noncontrolling interests | (0.6 | ) |
| (1.6 | ) | ||
Net income attributable to AGCO Corporation and subsidiaries | $ | 150.8 |
|
| $ | 64.7 |
|
Net income per common share attributable to AGCO Corporation and subsidiaries: |
|
|
| ||||
Basic | $ | 2.00 |
|
| $ | 0.86 |
|
Diluted | $ | 1.99 |
|
| $ | 0.85 |
|
Cash dividends declared and paid per common share | $ | 0.16 |
|
| $ | 0.16 |
|
Weighted average number of common and common equivalent shares outstanding: |
|
|
| ||||
Basic | 75.3 |
|
| 75.3 |
| ||
Diluted | 75.9 |
|
| 75.9 |
| ||
See accompanying notes to condensed consolidated financial statements. |
AGCO CORPORATION AND SUBSIDIARIES | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
(unaudited and in millions) | |||||||
| Three Months Ended March 31, | ||||||
| 2021 |
| 2020 | ||||
Cash flows from operating activities: |
|
|
| ||||
Net income | $ | 151.4 |
|
| $ | 66.3 |
|
Adjustments to reconcile net income to net cash used in operating activities: |
|
|
| ||||
Depreciation | 54.8 |
|
| 51.6 |
| ||
Amortization of intangibles | 17.5 |
|
| 15.0 |
| ||
Stock compensation expense | 6.8 |
|
| 2.6 |
| ||
Equity in net earnings of affiliates, net of cash received | (14.7 | ) |
| (11.2 | ) | ||
Deferred income tax provision | 4.1 |
|
| 3.8 |
| ||
Other | 1.9 |
|
| 4.1 |
| ||
Changes in operating assets and liabilities: |
|
|
| ||||
Accounts and notes receivable, net | (232.3 | ) |
| (109.6 | ) | ||
Inventories, net | (466.1 | ) |
| (252.1 | ) | ||
Other current and noncurrent assets | (45.8 | ) |
| (65.4 | ) | ||
Accounts payable | 296.7 |
|
| (32.7 | ) | ||
Accrued expenses | (175.7 | ) |
| (206.7 | ) | ||
Other current and noncurrent liabilities | 86.1 |
|
| 99.0 |
| ||
Total adjustments | (466.7 | ) |
| (501.6 | ) | ||
Net cash used in operating activities | (315.3 | ) |
| (435.3 | ) | ||
Cash flows from investing activities: |
|
|
| ||||
Purchases of property, plant and equipment | (63.5 | ) |
| (60.6 | ) | ||
Proceeds from sale of property, plant and equipment | 0.1 |
|
| 0.4 |
| ||
Investment in unconsolidated affiliates | (0.1 | ) |
| (2.5 | ) | ||
Purchase of businesses, net of cash acquired | (0.8 | ) |
| — |
| ||
Other | (2.5 | ) |
| — |
| ||
Net cash used in investing activities | (66.8 | ) |
| (62.7 | ) | ||
Cash flows from financing activities: |
|
|
| ||||
Proceeds from indebtedness, net | (221.5 | ) |
| 559.8 |
| ||
Purchases and retirement of common stock | — |
|
| (55.0 | ) | ||
Payment of dividends to stockholders | (12.0 | ) |
| (12.1 | ) | ||
Payment of minimum tax withholdings on stock compensation | (26.5 | ) |
| (16.0 | ) | ||
Net cash (used in) provided by financing activities | (260.0 | ) |
| 476.7 |
| ||
Effects of exchange rate changes on cash, cash equivalents and restricted cash | (23.3 | ) |
| (24.8 | ) | ||
Decrease in cash, cash equivalents and restricted cash | (665.4 | ) |
| (46.1 | ) | ||
Cash, cash equivalents and restricted cash, beginning of period | 1,119.1 |
|
| 432.8 |
| ||
Cash, cash equivalents and restricted cash, end of period | $ | 453.7 |
|
| $ | 386.7 |
|
See accompanying notes to condensed consolidated financial statements. |
AGCO CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited, in millions, except share amounts, per share data and employees)
1. STOCK COMPENSATION EXPENSE
The Company recorded stock compensation expense as follows (in millions):
| Three Months Ended March 31, | ||||||
| 2021 |
| 2020 | ||||
Cost of goods sold | $ | 0.3 |
|
| $ | 0.1 |
|
Selling, general and administrative expenses | 6.5 |
|
| 2.5 |
| ||
Total stock compensation expense | $ | 6.8 |
|
| $ | 2.6 |
|
2. RESTRUCTURING EXPENSES
In recent years, the Company has announced and initiated several actions to rationalize employee headcount in various manufacturing facilities and administrative offices located in the U.S., Europe, South America, Africa and China in order to reduce costs in response to softening global market demand. The Company also has undertaken rationalizations of its grain and protein business during 2019 and 2020. As of December 31, 2020, the Company had approximately $16.8 million of accrued severance, facility closure and other costs related to such rationalizations. During the three months ended March 31, 2021, the Company recorded an additional $1.3 million of severance and related costs associated with further rationalizations, and paid approximately $6.2 million of severance and facility closure costs. The remaining $11.6 million of severance, facility closure and other related costs as of March 31, 2021, inclusive of approximately $0.3 million of negative foreign currency translation impacts, are expected to be paid primarily during 2021.
3. INDEBTEDNESS
Long-term debt at March 31, 2021 and December 31, 2020 consisted of the following (in millions):
| March 31, 2021 |
| December 31, 2020 | ||||
Senior term loan due 2022 | $ | 176.1 |
|
| $ | 184.0 |
|
Credit facility, expires 2023 | — |
|
| 277.9 |
| ||
1.002% Senior term loan due 2025 | 293.4 |
|
| 306.7 |
| ||
Senior term loans due between 2021 and 2028 | 771.1 |
|
| 806.0 |
| ||
Other long-term debt | 10.0 |
|
| 10.5 |
| ||
Debt issuance costs | (2.1 | ) |
| (2.5 | ) | ||
| 1,248.5 |
|
| 1,582.6 |
| ||
Less: |
|
|
| ||||
Senior term loans due 2021, net of debt issuance costs | (309.7 | ) |
| (323.6 | ) | ||
Current portion of other long-term debt | (2.2 | ) |
| (2.3 | ) | ||
Total long-term indebtedness, less current portion | $ | 936.6 |
|
| $ | 1,256.7 |
|
As of March 31, 2021 and December 31, 2020, the Company had short-term borrowings due within one year of approximately $51.8 million and $33.8 million, respectively.
4. INVENTORIES
Inventories at March 31, 2021 and December 31, 2020 were as follows (in millions):
| March 31, 2021 |
| December 31, 2020 | ||||
Finished goods | $ | 768.9 |
|
| $ | 641.3 |
|
Repair and replacement parts | 684.8 |
|
| 652.3 |
| ||
Work in process | 317.0 |
|
| 175.1 |
| ||
Raw materials | 589.6 |
|
| 505.7 |
| ||
Inventories, net | $ | 2,360.3 |
|
| $ | 1,974.4 |
|
5. ACCOUNTS RECEIVABLE SALES AGREEMENTS
The Company has accounts receivable sales agreements that permit the sale, on an ongoing basis, of a majority of its wholesale receivables in North America, Europe and Brazil to its U.S., Canadian, European and Brazilian finance joint ventures. As of March 31, 2021 and December 31, 2020, the cash received from receivables sold under the U.S., Canadian, European and Brazilian accounts receivable sales agreements was approximately $1.3 billion and $1.5 billion, respectively.
Losses on sales of receivables associated with the accounts receivable financing facilities discussed above, reflected within “Other expense, net” in the Company’s Condensed Consolidated Statements of Operations, were approximately $4.6 million and $8.1 million, respectively, during the three months ended March 31, 2021 and 2020.
The Company’s finance joint ventures in Europe, Brazil and Australia also provide wholesale financing directly to the Company’s dealers. As of March 31, 2021 and December 31, 2020, these finance joint ventures had approximately $80.7 million and $85.2 million, respectively, of outstanding accounts receivable associated with these arrangements. In addition, the Company sells certain trade receivables under factoring arrangements to other financial institutions around the world.
6. NET INCOME PER SHARE
A reconciliation of net income attributable to AGCO Corporation and subsidiaries and weighted average common shares outstanding for purposes of calculating basic and diluted net income per share for the three months ended March 31, 2021 and 2020 is as follows (in millions, except per share data):
| Three Months Ended March 31, | ||||||
| 2021 |
| 2020 | ||||
Basic net income per share: |
|
|
| ||||
Net income attributable to AGCO Corporation and subsidiaries | $ | 150.8 |
|
| $ | 64.7 |
|
Weighted average number of common shares outstanding | 75.3 |
|
| 75.3 |
| ||
Basic net income per share attributable to AGCO Corporation and subsidiaries | $ | 2.00 |
|
| $ | 0.86 |
|
Diluted net income per share: |
|
|
| ||||
Net income attributable to AGCO Corporation and subsidiaries | $ | 150.8 |
|
| $ | 64.7 |
|
Weighted average number of common shares outstanding | 75.3 |
|
| 75.3 |
| ||
Dilutive stock-settled appreciation rights, performance share awards and restricted stock units | 0.6 |
|
| 0.6 |
| ||
Weighted average number of common shares and common share equivalents outstanding for purposes of computing diluted net income per share | 75.9 |
|
| 75.9 |
| ||
Diluted net income per share attributable to AGCO Corporation and subsidiaries | $ | 1.99 |
|
| $ | 0.85 |
|
7. SEGMENT REPORTING
The Company’s four reportable segments distribute a full range of agricultural equipment and related replacement parts. The Company evaluates segment performance primarily based on income from operations. Sales for each segment are based on the location of the third-party customer. The Company’s selling, general and administrative expenses and engineering expenses are generally charged to each segment based on the region and division where the expenses are incurred. As a result, the components of income from operations for one segment may not be comparable to another segment. Segment results for the three months ended March 31, 2021 and 2020 are as follows (in millions):
Three Months Ended March 31, |
| North America |
| South America |
| Europe/Middle East |
| Asia/Pacific/Africa |
| Consolidated | ||||||||||
2021 |
|
|
|
|
|
|
|
|
|
| ||||||||||
Net sales |
| $ | 611.1 |
|
| $ | 240.5 |
|
| $ | 1,327.2 |
|
| $ | 199.9 |
|
| $ | 2,378.7 |
|
Income from operations |
| 74.9 |
|
| 16.2 |
|
| 144.3 |
|
| 21.0 |
|
| 256.4 |
| |||||
|
|
|
|
|
|
|
|
|
|
| ||||||||||
2020 |
|
|
|
|
|
|
|
|
|
| ||||||||||
Net sales |
| $ | 551.9 |
|
| $ | 153.9 |
|
| $ | 1,113.3 |
|
| $ | 109.2 |
|
| $ | 1,928.3 |
|
Income (loss) from operations |
| 60.9 |
|
| (8.8 | ) |
| 102.3 |
|
| (1.3 | ) |
| 153.1 |
|
A reconciliation from the segment information to the consolidated balances for income from operations is set forth below (in millions):
| Three Months Ended March 31, | ||||||
| 2021 |
| 2020 | ||||
Segment income from operations | $ | 256.4 |
|
| $ | 153.1 |
|
Corporate expenses | (35.9 | ) |
| (34.4 | ) | ||
Amortization of intangibles | (17.5 | ) |
| (15.0 | ) | ||
Stock compensation expense | (6.5 | ) |
| (2.5 | ) | ||
Restructuring expenses | (1.3 | ) |
| (0.8 | ) | ||
Consolidated income from operations | $ | 195.2 |
|
| $ | 100.4 |
|
RECONCILIATION OF NON-GAAP MEASURES
This earnings release discloses adjusted income from operations, adjusted net income, adjusted net income per share, and net sales on a constant currency basis, each of which exclude amounts that are typically included in the most directly comparable measure calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). A reconciliation of each of those measures to the most directly comparable GAAP measure is included below.
The following is a reconciliation of reported income from operations, net income and net income per share to adjusted income from operations, adjusted net income and adjusted net income per share for the three months ended March 31, 2021 and 2020 (in millions, except per share data):
| Three Months Ended March 31, | ||||||||||||||||||||||
| 2021 |
| 2020 | ||||||||||||||||||||
| Income From Operations |
| Net Income(1) |
| Net Income Per Share(1)(2) |
| Income From Operations |
| Net Income(1)(2) |
| Net Income Per Share(1) | ||||||||||||
As reported | $ | 195.2 |
|
| $ | 150.8 |
|
| $ | 1.99 |
|
| $ | 100.4 |
|
| $ | 64.7 |
|
| $ | 0.85 |
|
Restructuring expenses(3) | 1.3 |
|
| 1.3 |
|
| 0.02 |
|
| 0.8 |
|
| 0.7 |
|
| 0.01 |
| ||||||
As adjusted | $ | 196.5 |
|
| $ | 152.1 |
|
| $ | 2.00 |
|
| $ | 101.2 |
|
| $ | 65.5 |
|
| $ | 0.86 |
|
(1) | Net income and net income per share amounts are after tax. | |
(2) | Rounding may impact summation of amounts. | |
(3) | The restructuring expenses recorded during the three months ended March 31, 2021 and 2020 related primarily to severance and other related costs associated with the Company’s rationalization of certain U.S., European and South American manufacturing operations and various administrative offices, including costs associated with the Company’s rationalization of its grain and protein business. | |
The following table sets forth, for the three months ended March 31, 2021 and 2020, the impact to net sales of currency translation by geographical segment (in millions, except percentages):
| Three Months Ended March 31, |
| Change due to currency translation | ||||||||||||||
| 2021 |
| 2020 |
| % change from 2020 |
| $ |
| % | ||||||||
North America | $ | 611.1 |
|
| $ | 551.9 |
|
| 10.7 | % |
| $ | 5.7 |
|
| 1.0 | % |
South America | 240.5 |
|
| 153.9 |
|
| 56.3 | % |
| (42.4 | ) |
| (27.6 | )% | |||
Europe/Middle East | 1,327.2 |
|
| 1,113.3 |
|
| 19.2 | % |
| 86.4 |
|
| 7.8 | % | |||
Asia/Pacific/Africa | 199.9 |
|
| 109.2 |
|
| 83.1 | % |
| 18.7 |
|
| 17.1 | % | |||
| $ | 2,378.7 |
|
| $ | 1,928.3 |
|
| 23.4 | % |
| $ | 68.4 |
|
| 3.5 | % |
View source version on businesswire.com: https://www.businesswire.com/news/home/20210429005288/en/
Greg Peterson Vice President, Investor Relations 770-232-8229 greg.peterson@agcocorp.com
Source: AGCO