nVent Electric plc | |||||||||||
Three months ended | |||||||||||
September 30, 2020 | September 30, 2019 | % / point change | |||||||||
Net Sales | $509 | $560 | -9% | ||||||||
Organic | -14% | ||||||||||
Operating Income (loss) | $(142) | $86 | -264% | ||||||||
Reported ROS | (27.8)% | 15.4% | |||||||||
Segment Income | $101 | $115 | -12% | ||||||||
Adjusted ROS | 19.8% | 20.5% | -70 bps |
Enclosures | |||||||||||
Three months ended | |||||||||||
September 30, 2020 | September 30, 2019 | % / point change | |||||||||
Net Sales | $245 | $263 | -7% | ||||||||
Organic | -14% | ||||||||||
ROS | 18.0% | 18.1% | -10 bps |
Electrical & Fastening Solutions ("EFS") | |||||||||||
Three months ended | |||||||||||
September 30, 2020 | September 30, 2019 | % / point change | |||||||||
Net Sales | $148 | $150 | -1% | ||||||||
Organic | -5% | ||||||||||
ROS | 27.6% | 27.6% | 0 bps |
Thermal Management | |||||||||||
Three months ended | |||||||||||
September 30, 2020 | September 30, 2019 | % / point change | |||||||||
Net Sales | $117 | $148 | -21% | ||||||||
Organic | -22% | ||||||||||
ROS | 21.8% | 26.1% | -430 bps |
nVent Electric plc | |||||||||||||||||
Condensed Consolidated Statements of Income (Loss) (Unaudited) | |||||||||||||||||
Three months ended | Nine months ended | ||||||||||||||||
In millions, except per-share data | September 30, 2020 | September 30, 2019 | September 30, 2020 | September 30, 2019 | |||||||||||||
Net sales | $ | 509.3 | $ | 559.8 | $ | 1,477.4 | $ | 1,637.3 | |||||||||
Cost of goods sold | 312.5 | 335.7 | 925.0 | 991.1 | |||||||||||||
Gross profit | 196.8 | 224.1 | 552.4 | 646.2 | |||||||||||||
% of net sales | 38.6 | % | 40.0 | % | 37.4 | % | 39.5 | % | |||||||||
Selling, general and administrative | 107.4 | 126.2 | 334.8 | 359.4 | |||||||||||||
% of net sales | 21.1 | % | 22.5 | % | 22.7 | % | 22.0 | % | |||||||||
Research and development | 10.5 | 11.8 | 33.1 | 36.2 | |||||||||||||
% of net sales | 2.1 | % | 2.1 | % | 2.2 | % | 2.2 | % | |||||||||
Impairment of goodwill and trade names | 220.5 | — | 220.5 | — | |||||||||||||
Operating income (loss) | (141.6) | 86.1 | (36.0) | 250.6 | |||||||||||||
% of net sales | (27.8 | %) | 15.4 | % | (2.4 | %) | 15.3 | % | |||||||||
Net interest expense | 8.5 | 11.6 | 27.8 | 34.0 | |||||||||||||
Other expense | 0.7 | 0.9 | 2.2 | 2.8 | |||||||||||||
Income (loss) before income taxes | (150.8) | 73.6 | (66.0) | 213.8 | |||||||||||||
Provision (benefit) for income taxes | (12.1) | 13.7 | 28.3 | 36.6 | |||||||||||||
Effective tax rate | 8.0 | % | 18.6 | % | (42.9 | %) | 17.1 | % | |||||||||
Net income (loss) | $ | (138.7) | $ | 59.9 | $ | (94.3) | $ | 177.2 | |||||||||
Earnings (loss) per ordinary share | |||||||||||||||||
Basic | $ | (0.82) | $ | 0.35 | $ | (0.56) | $ | 1.03 | |||||||||
Diluted | $ | (0.82) | $ | 0.35 | $ | (0.56) | $ | 1.02 | |||||||||
Weighted average ordinary shares outstanding | |||||||||||||||||
Basic | 170.0 | 169.1 | 169.9 | 172.3 | |||||||||||||
Diluted | 170.0 | 170.3 | 169.9 | 173.8 | |||||||||||||
Cash dividends paid per ordinary share | $ | 0.175 | $ | 0.175 | $ | 0.525 | $ | 0.525 |
nVent Electric plc | ||||||||
Condensed Consolidated Balance Sheets (Unaudited) | ||||||||
September 30, 2020 | December 31, 2019 | |||||||
In millions | ||||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 159.8 | $ | 106.4 | ||||
Accounts and notes receivable, net | 327.4 | 334.3 | ||||||
Inventories | 238.9 | 244.7 | ||||||
Other current assets | 89.9 | 113.3 | ||||||
Total current assets | 816.0 | 798.7 | ||||||
Property, plant and equipment, net | 278.1 | 284.5 | ||||||
Other assets | ||||||||
Goodwill | 2,090.7 | 2,279.1 | ||||||
Intangibles, net | 1,117.6 | 1,160.5 | ||||||
Other non-current assets | 108.2 | 117.5 | ||||||
Total other assets | 3,316.5 | 3,557.1 | ||||||
Total assets | $ | 4,410.6 | $ | 4,640.3 | ||||
Liabilities and Equity | ||||||||
Current liabilities | ||||||||
Current maturities of long-term debt and short-term borrowings | $ | 20.0 | $ | 17.5 | ||||
Accounts payable | 139.1 | 187.1 | ||||||
Employee compensation and benefits | 68.8 | 71.9 | ||||||
Other current liabilities | 182.0 | 185.7 | ||||||
Total current liabilities | 409.9 | 462.2 | ||||||
Other liabilities | ||||||||
Long-term debt | 1,032.8 | 1,047.1 | ||||||
Pension and other post-retirement compensation and benefits | 220.0 | 207.2 | ||||||
Deferred tax liabilities | 234.7 | 237.8 | ||||||
Other non-current liabilities | 99.8 | 93.5 | ||||||
Total liabilities | 1,997.2 | 2,047.8 | ||||||
Equity | 2,413.4 | 2,592.5 | ||||||
Total liabilities and equity | $ | 4,410.6 | $ | 4,640.3 |
nVent Electric plc | ||||||||
Condensed Consolidated Statements of Cash Flows (Unaudited) | ||||||||
Nine months ended | ||||||||
In millions | September 30, 2020 | September 30, 2019 | ||||||
Operating activities | ||||||||
Net income (loss) | $ | (94.3) | $ | 177.2 | ||||
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities | ||||||||
Depreciation | 28.8 | 26.1 | ||||||
Amortization | 48.1 | 45.6 | ||||||
Deferred income taxes | 6.2 | (1.9) | ||||||
Share-based compensation | 10.0 | 12.4 | ||||||
Impairment of goodwill and trade names | 220.5 | — | ||||||
Changes in assets and liabilities, net of effects of business acquisitions | ||||||||
Accounts and notes receivable | 7.8 | (17.2) | ||||||
Inventories | 9.3 | (18.4) | ||||||
Other current assets | 22.2 | — | ||||||
Accounts payable | (46.1) | (53.6) | ||||||
Employee compensation and benefits | (3.5) | (7.7) | ||||||
Other current liabilities | (3.4) | (1.9) | ||||||
Other non-current assets and liabilities | (1.9) | (3.1) | ||||||
Net cash provided by (used for) operating activities | 203.7 | 157.5 | ||||||
Investing activities | ||||||||
Capital expenditures | (25.4) | (29.0) | ||||||
Proceeds from sale of property and equipment | 1.5 | 6.1 | ||||||
Acquisitions, net of cash acquired | (27.0) | (127.8) | ||||||
Net cash provided by (used for) investing activities | (50.9) | (150.7) | ||||||
Financing activities | ||||||||
Net receipts of revolving long-term debt | — | 216.5 | ||||||
Repayments of long-term debt | (12.5) | (9.7) | ||||||
Dividends paid | (89.2) | (91.1) | ||||||
Shares issued to employees, net of shares withheld | 4.7 | 5.3 | ||||||
Repurchases of ordinary shares | (3.2) | (235.7) | ||||||
Net cash provided by (used for) financing activities | (100.2) | (114.7) | ||||||
Effect of exchange rate changes on cash and cash equivalents | 0.8 | (1.6) | ||||||
Change in cash and cash equivalents | 53.4 | (109.5) | ||||||
Cash and cash equivalents, beginning of period | 106.4 | 159.0 | ||||||
Cash and cash equivalents, end of period | $ | 159.8 | $ | 49.5 |
nVent Electric plc | ||||||||||||||
Supplemental Financial Information by Reportable Segment (Unaudited) | ||||||||||||||
2020 | ||||||||||||||
In millions | First Quarter | Second Quarter | Third Quarter | Nine Months | ||||||||||
Net sales | ||||||||||||||
Enclosures | $ | 258.5 | $ | 219.3 | $ | 244.7 | $ | 722.5 | ||||||
Electrical & Fastening Solutions | 141.9 | 132.1 | 147.7 | 421.7 | ||||||||||
Thermal Management | 120.5 | 95.8 | 116.9 | 333.2 | ||||||||||
Total | $ | 520.9 | $ | 447.2 | $ | 509.3 | $ | 1,477.4 | ||||||
Segment income (loss) | ||||||||||||||
Enclosures | $ | 40.9 | $ | 28.2 | $ | 44.0 | $ | 113.1 | ||||||
Electrical & Fastening Solutions | 33.5 | 34.7 | 40.7 | 108.9 | ||||||||||
Thermal Management | 20.3 | 14.4 | 25.5 | 60.2 | ||||||||||
Other | (13.2) | (9.0) | (9.3) | (31.5) | ||||||||||
Total | $ | 81.5 | $ | 68.3 | $ | 100.9 | $ | 250.7 | ||||||
Return on sales | ||||||||||||||
Enclosures | 15.8 | % | 12.9 | % | 18.0 | % | 15.7 | % | ||||||
Electrical & Fastening Solutions | 23.6 | % | 26.3 | % | 27.6 | % | 25.8 | % | ||||||
Thermal Management | 16.8 | % | 15.0 | % | 21.8 | % | 18.1 | % | ||||||
Total | 15.6 | % | 15.3 | % | 19.8 | % | 17.0 | % |
2019 | ||||||||||||||
In millions | First Quarter | Second Quarter | Third Quarter | Nine Months | ||||||||||
Net sales | ||||||||||||||
Enclosures | $ | 255.5 | $ | 260.0 | $ | 262.6 | $ | 778.1 | ||||||
Electrical & Fastening Solutions | 137.4 | 150.7 | 149.6 | 437.7 | ||||||||||
Thermal Management | 145.1 | 128.8 | 147.6 | 421.5 | ||||||||||
Total | $ | 538.0 | $ | 539.5 | $ | 559.8 | $ | 1,637.3 | ||||||
Segment income (loss) | ||||||||||||||
Enclosures | $ | 45.6 | $ | 48.2 | $ | 47.6 | $ | 141.4 | ||||||
Electrical & Fastening Solutions | 31.2 | 41.6 | 41.3 | 114.1 | ||||||||||
Thermal Management | 34.3 | 25.3 | 38.5 | 98.1 | ||||||||||
Other | (14.9) | (10.3) | (12.8) | (38.0) | ||||||||||
Total | $ | 96.2 | $ | 104.8 | $ | 114.6 | $ | 315.6 | ||||||
Return on sales | ||||||||||||||
Enclosures | 17.8 | % | 18.5 | % | 18.1 | % | 18.2 | % | ||||||
Electrical & Fastening Solutions | 22.7 | % | 27.6 | % | 27.6 | % | 26.1 | % | ||||||
Thermal Management | 23.6 | % | 19.6 | % | 26.1 | % | 23.3 | % | ||||||
Total | 17.9 | % | 19.4 | % | 20.5 | % | 19.3 | % |
nVent Electric plc | ||||||||||||||||||||
Reconciliation of GAAP to non-GAAP financial measures for the year ended December 31, 2020 | ||||||||||||||||||||
excluding the effect of adjustments (Unaudited) | ||||||||||||||||||||
Actual | Forecast (1) | |||||||||||||||||||
In millions, except per-share data | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Full Year | |||||||||||||||
Net sales | $ | 520.9 | $ | 447.2 | $ | 509.3 | ||||||||||||||
Net income (loss) | 18.6 | 25.8 | (138.7) | |||||||||||||||||
Provision (benefit) for income taxes | 31.0 | 9.4 | (12.1) | |||||||||||||||||
Income (loss) before income taxes | 49.6 | 35.2 | (150.8) | |||||||||||||||||
Other expense | 0.8 | 0.7 | 0.7 | |||||||||||||||||
Net interest expense | 9.9 | 9.4 | 8.5 | |||||||||||||||||
Operating income (loss) | 60.3 | 45.3 | (141.6) | |||||||||||||||||
% of net sales | 11.6 | % | 10.1 | % | (27.8 | %) | ||||||||||||||
Adjustments: | ||||||||||||||||||||
Restructuring and other | 4.3 | 6.2 | 5.4 | |||||||||||||||||
Acquisition transaction and integration costs | 0.9 | 0.8 | 0.5 | |||||||||||||||||
Intangible amortization | 16.0 | 16.0 | 16.1 | |||||||||||||||||
Impairment of goodwill | — | — | 212.3 | |||||||||||||||||
Impairment of trade names | — | — | 8.2 | |||||||||||||||||
Segment income | $ | 81.5 | $ | 68.3 | $ | 100.9 | ||||||||||||||
Return on sales | 15.6 | % | 15.3 | % | 19.8 | % | ||||||||||||||
Segment income | $ | 81.5 | $ | 68.3 | $ | 100.9 | ||||||||||||||
Depreciation | 9.6 | 9.4 | 9.8 | |||||||||||||||||
Earnings before income tax, depreciation, and amortization - as adjusted | $ | 91.1 | $ | 77.7 | $ | 110.7 | ||||||||||||||
Net income (loss) - as reported | $ | 18.6 | $ | 25.8 | $ | (138.7) | $ | 57 | $ | (38) | ||||||||||
Adjustments to operating income (loss) | 21.2 | 23.0 | 242.5 | 16 | 303 | |||||||||||||||
Income tax adjustments | 18.3 | 0.2 | (27.7) | (3) | (12) | |||||||||||||||
Net income - as adjusted | $ | 58.1 | $ | 49.0 | $ | 76.1 | $ | 70 | $ | 253 | ||||||||||
Diluted earnings (loss) per ordinary share | ||||||||||||||||||||
Diluted earnings (loss) per ordinary share - as reported | $ | 0.11 | $ | 0.15 | $ | (0.82) | $0.30 - $0.35 | $(0.25) - $(0.20) | ||||||||||||
Adjustments | 0.23 | 0.14 | 1.27 | 0.08 | 1.71 | |||||||||||||||
Diluted earnings per ordinary share - as adjusted | $ | 0.34 | $ | 0.29 | $ | 0.45 | $0.38 - $0.43 | $1.46 - $1.51 | ||||||||||||
(1) Forecast information represents an approximation | ||||||||||||||||||||
nVent Electric plc | ||||||||||||||||||||
Reconciliation of GAAP to non-GAAP financial measures for the year ended December 31, 2019 | ||||||||||||||||||||
excluding the effect of 2019 adjustments (Unaudited) | ||||||||||||||||||||
In millions, except per-share data | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Full Year | |||||||||||||||
Net sales | $ | 538.0 | $ | 539.5 | $ | 559.8 | $ | 566.7 | $ | 2,204.0 | ||||||||||
Operating income | 77.5 | 87.0 | 86.1 | 82.5 | 333.1 | |||||||||||||||
% of net sales | 14.4 | % | 16.1 | % | 15.4 | % | 14.6 | % | 15.1 | % | ||||||||||
Adjustments: | ||||||||||||||||||||
Restructuring and other | 3.6 | 2.7 | 11.2 | 6.7 | 24.2 | |||||||||||||||
Acquisition transaction and integration costs | — | — | 1.9 | 0.5 | 2.4 | |||||||||||||||
Intangible amortization | 15.1 | 15.1 | 15.4 | 15.8 | 61.4 | |||||||||||||||
Inventory step-up amortization | — | — | — | 3.2 | 3.2 | |||||||||||||||
Segment income | $ | 96.2 | $ | 104.8 | $ | 114.6 | $ | 108.7 | $ | 424.3 | ||||||||||
Return on sales | 17.9 | % | 19.4 | % | 20.5 | % | 19.2 | % | 19.3 | % | ||||||||||
Net income - as reported | $ | 56.4 | $ | 60.9 | $ | 59.9 | $ | 45.5 | $ | 222.7 | ||||||||||
Adjustments to operating income | 18.7 | 17.8 | 28.5 | 26.2 | 91.2 | |||||||||||||||
Pension and other post-retirement mark-to-market loss | — | — | — | 27.3 | 27.3 | |||||||||||||||
Income tax adjustments | (5.6) | (3.3) | (4.6) | (19.3) | (32.8) | |||||||||||||||
Net income - as adjusted | $ | 69.5 | $ | 75.4 | $ | 83.8 | $ | 79.7 | $ | 308.4 | ||||||||||
Diluted earnings per ordinary share | ||||||||||||||||||||
Diluted earnings per ordinary share - as reported | $ | 0.32 | $ | 0.35 | $ | 0.35 | $ | 0.27 | $ | 1.29 | ||||||||||
Adjustments | 0.07 | 0.09 | 0.14 | 0.20 | 0.49 | |||||||||||||||
Diluted earnings per ordinary share - as adjusted | $ | 0.39 | $ | 0.44 | $ | 0.49 | $ | 0.47 | $ | 1.78 | ||||||||||
nVent Electric plc | |||||||||||||||||||||||||||||
Reconciliation of Net Sales Growth to Organic Net Sales Growth by Segment | |||||||||||||||||||||||||||||
for the quarter ended September 30, 2020 (Unaudited) | |||||||||||||||||||||||||||||
Q3 Net Sales Growth | |||||||||||||||||||||||||||||
Organic | Currency | Acq./Div. | Total | ||||||||||||||||||||||||||
nVent | (13.5) | % | 0.9 | % | 3.6 | % | (9.0) | % | |||||||||||||||||||||
Enclosures | (14.0) | % | 1.1 | % | 6.1 | % | (6.8) | % | |||||||||||||||||||||
Electrical & Fastening Solutions | (4.8) | % | 0.6 | % | 2.9 | % | (1.3) | % | |||||||||||||||||||||
Thermal Management | (21.6) | % | 0.8 | % | — | % | (20.8) | % |
Reconciliation of Net Sales Growth to Organic Net Sales Growth | |||||||||||||||||||||||||||||
for the quarter and year ended December 31, 2020 (Unaudited) | |||||||||||||||||||||||||||||
Forecast (1) | |||||||||||||||||||||||||||||
Q4 Net Sales Growth | Full Year Net Sales Growth | ||||||||||||||||||||||||||||
Organic | Currency | Acq./Div. | Total | Organic | Currency | Acq. / Div. | Total | ||||||||||||||||||||||
nVent | (14) - (10)% | 1 | % | 1 | % | (12) - (8)% | (14) - (13)% | — | % | 4 | % | (10) - (9)% | |||||||||||||||||
(1) Forecast information represents an approximation |
Reconciliation of cash from operating activities to free cash flow (Unaudited) | |||||||||||||||||
Three months ended | Nine months ended | ||||||||||||||||
In millions | September 30, 2020 | September 30, 2019 | September 30, 2020 | September 30, 2019 | |||||||||||||
Net cash provided by (used for) operating activities | $ | 113.2 | $ | 99.7 | $ | 203.7 | $ | 157.5 | |||||||||
Capital expenditures | (8.2) | (11.4) | (25.4) | (29.0) | |||||||||||||
Proceeds from sale of property and equipment | 0.1 | — | 1.5 | 6.1 | |||||||||||||
Free cash flow | $ | 105.1 | $ | 88.3 | $ | 179.8 | $ | 134.6 | |||||||||