Three Months Ended June 30, | ||||||||||||||
(in millions, except per share data) | 2023 | 2022 | ||||||||||||
Net sales | $ | 4,055 | $ | 3,485 | ||||||||||
Cost of sales | 3,753 | 3,312 | ||||||||||||
Gross profit | 302 | 173 | ||||||||||||
Selling, general and administrative expenses | 148 | 142 | ||||||||||||
Restructuring and impairment costs | 6 | 12 | ||||||||||||
Equity income (loss) | 25 | 16 | ||||||||||||
Earnings (loss) before interest and income taxes | 173 | 35 | ||||||||||||
Net financing charges | 49 | 39 | ||||||||||||
Other pension expense (income) | 1 | (4) | ||||||||||||
Income (loss) before income taxes | 123 | — | ||||||||||||
Income tax provision (benefit) | 28 | 20 | ||||||||||||
Net income (loss) | 95 | (20) | ||||||||||||
Income attributable to noncontrolling interests | 22 | 10 | ||||||||||||
Net income (loss) attributable to Adient | $ | 73 | $ | (30) | ||||||||||
Diluted earnings (loss) per share | $ | 0.77 | $ | (0.32) | ||||||||||
Shares outstanding at period end | 93.7 | 94.8 | ||||||||||||
Diluted weighted average shares | 94.9 | 94.8 |
June 30, | September 30, | |||||||||||||
(in millions) | 2023 | 2022 | ||||||||||||
Assets | ||||||||||||||
Cash and cash equivalents | $ | 908 | $ | 947 | ||||||||||
Accounts receivable - net | 2,074 | 1,852 | ||||||||||||
Inventories | 877 | 953 | ||||||||||||
Other current assets | 547 | 411 | ||||||||||||
Current assets | 4,406 | 4,163 | ||||||||||||
Property, plant and equipment - net | 1,397 | 1,377 | ||||||||||||
Goodwill | 2,115 | 2,057 | ||||||||||||
Other intangible assets - net | 421 | 467 | ||||||||||||
Investments in partially-owned affiliates | 296 | 286 | ||||||||||||
Assets held for sale | 7 | 11 | ||||||||||||
Other noncurrent assets | 840 | 797 | ||||||||||||
Total assets | $ | 9,482 | $ | 9,158 | ||||||||||
Liabilities and Shareholders' Equity | ||||||||||||||
Short-term debt | $ | 2 | $ | 14 | ||||||||||
Accounts payable and accrued expenses | 3,029 | 2,818 | ||||||||||||
Other current liabilities | 689 | 669 | ||||||||||||
Current liabilities | 3,720 | 3,501 | ||||||||||||
Long-term debt | 2,532 | 2,564 | ||||||||||||
Other noncurrent liabilities | 688 | 673 | ||||||||||||
Redeemable noncontrolling interests | 57 | 45 | ||||||||||||
Shareholders' equity attributable to Adient | 2,174 | 2,073 | ||||||||||||
Noncontrolling interests | 311 | 302 | ||||||||||||
Total liabilities and shareholders' equity | $ | 9,482 | $ | 9,158 |
Three Months Ended June 30, | ||||||||||||||
(in millions) | 2023 | 2022 | ||||||||||||
Operating Activities | ||||||||||||||
Net income (loss) attributable to Adient | $ | 73 | $ | (30) | ||||||||||
Income attributable to noncontrolling interests | 22 | 10 | ||||||||||||
Net income (loss) | 95 | (20) | ||||||||||||
Adjustments to reconcile net income (loss) to cash provided (used) by operating activities: | ||||||||||||||
Depreciation | 74 | 72 | ||||||||||||
Amortization of intangibles | 13 | 14 | ||||||||||||
Pension and postretirement benefit expense (benefit) | 3 | (3) | ||||||||||||
Pension and postretirement contributions, net | (2) | (7) | ||||||||||||
Equity in earnings of partially-owned affiliates, net of dividends received | (2) | 10 | ||||||||||||
Deferred income taxes | 2 | 13 | ||||||||||||
Non-cash restructuring and impairment charges | — | 1 | ||||||||||||
Equity-based compensation | 7 | 7 | ||||||||||||
Other | 1 | — | ||||||||||||
Changes in assets and liabilities: | ||||||||||||||
Receivables | (72) | (83) | ||||||||||||
Inventories | 39 | 8 | ||||||||||||
Other assets | (13) | 7 | ||||||||||||
Restructuring reserves | (8) | (11) | ||||||||||||
Accounts payable and accrued liabilities | 65 | 37 | ||||||||||||
Accrued income taxes | 1 | (22) | ||||||||||||
Cash provided (used) by operating activities | 203 | 23 | ||||||||||||
Investing Activities | ||||||||||||||
Capital expenditures | (60) | (53) | ||||||||||||
Sale of property, plant and equipment | 1 | 6 | ||||||||||||
Business acquisitions | 5 | (13) | ||||||||||||
Proceeds from business divestitures | 2 | — | ||||||||||||
Other | (1) | — | ||||||||||||
Cash provided (used) by investing activities | (53) | (60) | ||||||||||||
Financing Activities | ||||||||||||||
Repayment of long-term debt | — | (144) | ||||||||||||
Share repurchases | (37) | — | ||||||||||||
Cash paid to acquire a noncontrolling interest | — | (3) | ||||||||||||
Dividends paid to noncontrolling interests | (5) | — | ||||||||||||
Share based compensation and other | (1) | — | ||||||||||||
Cash provided (used) by financing activities | (43) | (147) | ||||||||||||
Effect of exchange rate changes on cash and cash equivalents | (25) | (42) | ||||||||||||
Increase (decrease) in cash and cash equivalents | $ | 82 | $ | (226) |
Three Months Ended June 30, | ||||||||||||||
(in millions) | 2023 | 2022 | ||||||||||||
Net Sales | ||||||||||||||
Americas | $ | 1,900 | $ | 1,673 | ||||||||||
EMEA | 1,438 | 1,215 | ||||||||||||
Asia | 742 | 627 | ||||||||||||
Eliminations | (25) | (30) | ||||||||||||
Total net sales | $ | 4,055 | $ | 3,485 |
Three Months Ended June 30, | ||||||||||||||
(in millions) | 2023 | 2022 | ||||||||||||
Adjusted EBITDA | ||||||||||||||
Americas | $ | 95 | $ | 70 | ||||||||||
EMEA | 103 | 31 | ||||||||||||
Asia | 100 | 64 | ||||||||||||
Corporate-related costs (1) | (22) | (22) | ||||||||||||
Restructuring and impairment costs (2) | (6) | (12) | ||||||||||||
Purchase accounting amortization (3) | (13) | (14) | ||||||||||||
Restructuring related charges (4) | (3) | (1) | ||||||||||||
Stock based compensation | (7) | (7) | ||||||||||||
Depreciation | (74) | (72) | ||||||||||||
Other items (5) | — | (2) | ||||||||||||
Earnings (loss) before interest and income taxes | $ | 173 | $ | 35 | ||||||||||
Net financing charges | (49) | (39) | ||||||||||||
Other pension income (expense) | (1) | 4 | ||||||||||||
Income (loss) before income taxes | $ | 123 | $ | — |
Three Months Ended June 30, | ||||||||||||||
(in millions, except per share data) | 2023 | 2022 | ||||||||||||
Income available to shareholders | ||||||||||||||
Net income (loss) attributable to Adient | $ | 73 | $ | (30) | ||||||||||
Weighted average shares outstanding | ||||||||||||||
Basic weighted average shares outstanding | 94.1 | 94.8 | ||||||||||||
Effect of dilutive securities: | ||||||||||||||
Stock options, unvested restricted stock and unvested performance share awards | 0.8 | — | ||||||||||||
Diluted weighted average shares outstanding | 94.9 | 94.8 |
• | Adjusted EBIT is defined as income before income taxes and noncontrolling interests excluding net financing charges, restructuring, impairment and related costs, purchase accounting amortization, transaction gains/losses, other significant non-recurring items, and net mark-to-market adjustments on pension and postretirement plans. Adjusted EBIT margin is adjusted EBIT as a percentage of net sales. | ||||
• | Adjusted EBITDA is defined as adjusted EBIT excluding depreciation and stock based compensation. Certain corporate-related costs are not allocated to the business segments in determining Adjusted EBITDA. Adjusted EBITDA margin is adjusted EBITDA as a percentage of net sales. Adjusted EBITDA excluding adjusted equity income, each as defined herein, is also presented. | ||||
• | Adjusted net income attributable to Adient is defined as net income attributable to Adient excluding restructuring, impairment and related costs, purchase accounting amortization, transaction gains/losses, expenses associated with becoming an independent company, other significant non-recurring items, net mark-to-market adjustments on pension and postretirement plans, the tax impact of these items and other discrete tax charges/benefits. | ||||
• | Adjusted effective tax rate is defined as adjusted income tax provision as a percentage of adjusted income before income taxes. | ||||
• | Adjusted earnings per share is defined as Adjusted net income attributable to Adient divided by diluted weighted average shares. | ||||
• | Adjusted equity income is defined as equity income excluding amortization of Adient's intangible assets related to its non-consolidated joint ventures and other unusual or one-time items impacting equity income. | ||||
• | Adjusted interest expense is defined as net financing charges excluding unusual or one-time items impacting interest expense. | ||||
• | Free cash flow is defined as cash provided by operating activities less capital expenditures. | ||||
• | Net debt is calculated as gross debt (short-term and long-term) less cash and cash equivalents. |
Three Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||||||||||||||||
(in millions, except per share data) | GAAP Results | Adj. | Adjusted Results | GAAP Results | Adj. | Adjusted Results | ||||||||||||||||||||||||||||||||
Net sales | $ | 4,055 | $ | — | $ | 4,055 | $ | 3,485 | $ | — | $ | 3,485 | ||||||||||||||||||||||||||
Cost of sales (6) | 3,753 | (1) | 3,752 | 3,312 | (2) | 3,310 | ||||||||||||||||||||||||||||||||
Gross profit | 302 | 1 | 303 | 173 | 2 | 175 | ||||||||||||||||||||||||||||||||
Selling, general and administrative expenses (7) | 148 | (13) | 135 | 142 | (15) | 127 | ||||||||||||||||||||||||||||||||
Restructuring and impairment costs (2) | 6 | (6) | — | 12 | (12) | — | ||||||||||||||||||||||||||||||||
Equity income (loss) (8) | 25 | 2 | 27 | 16 | — | 16 | ||||||||||||||||||||||||||||||||
Earnings (loss) before interest and income taxes (EBIT) | 173 | 22 | 195 | 35 | 29 | 64 | ||||||||||||||||||||||||||||||||
Memo accounts: | ||||||||||||||||||||||||||||||||||||||
Depreciation | 74 | 72 | ||||||||||||||||||||||||||||||||||||
Equity based compensation | 7 | 7 | ||||||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 276 | $ | 143 | ||||||||||||||||||||||||||||||||||
Net financing charges (9) | 49 | — | 49 | 39 | (2) | 37 | ||||||||||||||||||||||||||||||||
Other pension expense (income) | 1 | — | 1 | (4) | 3 | (1) | ||||||||||||||||||||||||||||||||
Income (loss) before income taxes | 123 | 22 | 145 | — | 28 | 28 | ||||||||||||||||||||||||||||||||
Income tax provision (benefit) (10) | 28 | — | 28 | 20 | (11) | 9 | ||||||||||||||||||||||||||||||||
Net income (loss) attributable to Adient | 73 | 20 | 93 | (30) | 38 | 8 | ||||||||||||||||||||||||||||||||
Diluted earnings (loss) per share | 0.77 | 0.21 | 0.98 | (0.32) | 0.40 | 0.08 | ||||||||||||||||||||||||||||||||
Diluted weighted average shares | 94.9 | — | 94.9 | 94.8 | 0.9 | 95.7 |
Three months ended June 30, 2023 | ||||||||||||||||||||||||||||||||
Americas | EMEA | Asia | Corporate/Eliminations | Consolidated | ||||||||||||||||||||||||||||
Net sales | $ | 1,900 | $ | 1,438 | $ | 742 | $ | (25) | $ | 4,055 | ||||||||||||||||||||||
Adjusted EBITDA | $ | 95 | $ | 103 | $ | 100 | $ | (22) | $ | 276 | ||||||||||||||||||||||
Adjusted EBITDA margin | 5.0 | % | 7.2 | % | 13.5 | % | N/A | 6.8 | % | |||||||||||||||||||||||
Three months ended June 30, 2022 | ||||||||||||||||||||||||||||||||
Americas | EMEA | Asia | Corporate/Eliminations | Consolidated | ||||||||||||||||||||||||||||
Net sales | $ | 1,673 | $ | 1,215 | $ | 627 | $ | (30) | $ | 3,485 | ||||||||||||||||||||||
Adjusted EBITDA | $ | 70 | $ | 31 | $ | 64 | $ | (22) | $ | 143 | ||||||||||||||||||||||
Adjusted EBITDA margin | 4.2 | % | 2.6 | % | 10.2 | % | N/A | 4.1 | % | |||||||||||||||||||||||
Three Months Ended June 30, | ||||||||||||||
(in millions) | 2023 | 2022 | ||||||||||||
Adjusted EBITDA | $ | 276 | $ | 143 | ||||||||||
Less: Adjusted Equity Income | 27 | 16 | ||||||||||||
Adjusted EBITDA Excluding Adjusted Equity Income | $ | 249 | $ | 127 | ||||||||||
% of Sales | 6.1 | % | 3.6 | % | ||||||||||
Three months ended June 30, | ||||||||||||||||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||||||||||||||||
(in millions, except effective tax rate) | Income (loss) before income taxes | Tax impact | Effective tax rate | Income (loss) before income taxes | Tax impact | Effective tax rate | ||||||||||||||||||||||||||||||||
As reported | $ | 123 | $ | 28 | 22.8% | $ | — | $ | 20 | nm | ||||||||||||||||||||||||||||
Adjustments (10) | 22 | — | —% | 28 | (11) | (39.3)% | ||||||||||||||||||||||||||||||||
As adjusted | $ | 145 | $ | 28 | 19.3% | $ | 28 | $ | 9 | 32.1% | ||||||||||||||||||||||||||||
Three Months Ended June 30, | ||||||||||||||
(in millions) | 2023 | 2022 | ||||||||||||
Net income (loss) attributable to Adient | $ | 73 | $ | (30) | ||||||||||
Restructuring and impairment costs (2) | 6 | 12 | ||||||||||||
Purchase accounting amortization (3) | 13 | 14 | ||||||||||||
Restructuring related charges | 3 | 1 | ||||||||||||
Pension mark-to-market and curtailment/settlement (gain)/loss (12) | — | (3) | ||||||||||||
Foreign exchange loss on intercompany loan in Russia (9) | — | 2 | ||||||||||||
Other items (5) | — | 2 | ||||||||||||
Impact of adjustments on noncontrolling interests (11) | (2) | (1) | ||||||||||||
Tax impact of above adjustments and other tax items (10) | — | 11 | ||||||||||||
Adjusted net income (loss) attributable to Adient | $ | 93 | $ | 8 |
Three Months Ended June 30, | ||||||||||||||
2023 | 2022 | |||||||||||||
Diluted earnings (loss) per share as reported | $ | 0.77 | $ | (0.32) | ||||||||||
Restructuring and impairment costs (2) | 0.06 | 0.13 | ||||||||||||
Purchase accounting amortization (3) | 0.14 | 0.15 | ||||||||||||
Restructuring related charges | 0.03 | 0.01 | ||||||||||||
Pension mark-to-market and curtailment/settlement (gain)/loss (12) | — | (0.03) | ||||||||||||
Foreign exchange loss on intercompany loan in Russia (9) | — | 0.02 | ||||||||||||
Other items (5) | — | 0.02 | ||||||||||||
Impact of adjustments on noncontrolling interests (11) | (0.02) | (0.01) | ||||||||||||
Tax impact of above adjustments and other tax items (10) | — | 0.11 | ||||||||||||
Adjusted diluted earnings (loss) per share | $ | 0.98 | $ | 0.08 | ||||||||||
June 30, | September 30, | |||||||||||||
(in millions) | 2023 | 2022 | ||||||||||||
Cash and cash equivalents | $ | 908 | $ | 947 | ||||||||||
Total short-term and long-term debt | 2,534 | 2,578 | ||||||||||||
Net debt | $ | 1,626 | $ | 1,631 | ||||||||||
Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||||||||||||
(in millions) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Cash provided (used) by operating activities | $ | 203 | $ | 23 | $ | 373 | $ | 38 | ||||||||||||||||||
Capital expenditures | (60) | (53) | (177) | (170) | ||||||||||||||||||||||
Free cash flow | $ | 143 | $ | (30) | $ | 196 | $ | (132) |
FY2023 | FY2022 | |||||||||||||||||||||||||
(in millions) | Q3 | YTD | Q3 | YTD | ||||||||||||||||||||||
Adjusted EBITDA excluding adjusted equity income | $ | 249 | $ | 637 | $ | 127 | $ | 381 | ||||||||||||||||||
Dividend | 23 | 36 | 26 | 27 | ||||||||||||||||||||||
Restructuring (cash) | (9) | (49) | (11) | (49) | ||||||||||||||||||||||
Net customer tooling | (3) | (40) | (15) | (36) | ||||||||||||||||||||||
Trade working capital (Net AR/AP + Inventory) | (53) | (21) | (57) | (6) | ||||||||||||||||||||||
Accrued compensation | 31 | 41 | 2 | (45) | ||||||||||||||||||||||
Interest paid | (19) | (107) | (23) | (134) | ||||||||||||||||||||||
Tax refund/taxes paid | (25) | (74) | (25) | (63) | ||||||||||||||||||||||
Non-income related taxes (VAT) | (13) | (5) | (20) | 33 | ||||||||||||||||||||||
Commercial settlements | 8 | 36 | (22) | (66) | ||||||||||||||||||||||
Capitalized engineering | 9 | (25) | 31 | 33 | ||||||||||||||||||||||
Prepaids | (16) | (41) | 15 | (8) | ||||||||||||||||||||||
Other | 21 | (15) | (5) | (29) | ||||||||||||||||||||||
Operating cash flow | 203 | 373 | 23 | 38 | ||||||||||||||||||||||
Capital expenditures | (60) | (177) | (53) | (170) | ||||||||||||||||||||||
Free cash flow | $ | 143 | $ | 196 | $ | (30) | $ | (132) |
Three Months Ended June 30, | ||||||||||||||
(in millions) | 2023 | 2022 | ||||||||||||
Restructuring charges | $ | (6) | $ | (13) | ||||||||||
Held for sale asset adjustments | — | 1 | ||||||||||||
$ | (6) | $ | (12) |
Three Months Ended June 30, | ||||||||||||||
(in millions) | 2023 | 2022 | ||||||||||||
Transaction costs | $ | (1) | $ | (2) | ||||||||||
Brazil indirect tax recoveries | 1 | 1 | ||||||||||||
Disposal of non-core assets | — | (1) | ||||||||||||
$ | — | $ | (2) |
Three Months Ended June 30, | ||||||||||||||
(in millions) | 2023 | 2022 | ||||||||||||
Restructuring related charges | $ | (1) | $ | (1) | ||||||||||
Brazil indirect tax recoveries | 1 | 1 | ||||||||||||
Purchase accounting amortization | (1) | (1) | ||||||||||||
Disposal of non-core assets | — | (1) | ||||||||||||
$ | (1) | $ | (2) |
Three Months Ended June 30, | ||||||||||||||
(in millions) | 2023 | 2022 | ||||||||||||
Purchase accounting amortization | $ | (12) | $ | (13) | ||||||||||
Transaction costs | (1) | (2) | ||||||||||||
$ | (13) | $ | (15) |
Three Months Ended June 30, | ||||||||||||||
(in millions) | 2023 | 2022 | ||||||||||||
Restructuring related charges | $ | 2 | $ | — | ||||||||||
Three Months Ended June 30, | ||||||||||||||
(in millions) | 2023 | 2022 | ||||||||||||
Foreign exchange loss on intercompany loan in Russia | $ | — | (2) | |||||||||||
Three Months Ended June 30, | ||||||||||||||
(in millions) | 2023 | 2022 | ||||||||||||
Valuation allowances | $ | 1 | $ | 12 | ||||||||||
Other reconciling items | (1) | (1) | ||||||||||||
$ | — | $ | 11 |