Delaware
|
001-38095
|
46-2393770
|
(State or other jurisdiction of incorporation)
|
(Commission File Number)
|
(IRS Employer Identification No.)
|
☐ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
☐ |
Soliciting material pursuant to Rule 14a−12 under the Exchange Act (17 CFR 240.14a−12)
|
☐ |
Pre−commencement communications pursuant to Rule 14d−2(b) under the Exchange Act (17 CFR 240.14d−2(b))
|
☐ |
Pre−commencement communications pursuant to Rule 13e−4(c) under the Exchange Act (17 CFR 240.13e− 4(c))
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Emerging growth company
|
☐
|
ITEM 2.02 |
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
|
ITEM 9.01 |
FINANCIAL STATEMENTS AND EXHIBITS
|
Gardner Denver Holdings, Inc.
|
||
Date: April 26, 2018
|
By:
|
/s/ Andrew Schiesl
|
Name:
|
Andrew Schiesl
|
|
Title:
|
Vice President, General Counsel, Chief Compliance Officer and Secretary
|
April 26, 2018
|
· |
Revenues of $619.6 million increased 29% over the prior year, supported by strong and broad-based double-digit order growth across all three segments
|
· |
Reported net income of $42.4 million compared to a prior year net loss of $7.0 million
|
· |
Adjusted EBITDA of $148.2 million grew 61% over the prior year with a margin of 23.9%, an improvement of 480 basis points, reflecting both volume growth and operational improvements
|
· |
Free cash flow of $50.1 million compared to a prior year outflow of $19.0 million
|
· |
Increasing full year 2018 Adjusted EBITDA guidance to a range of $685 to $705 million from prior range of between $650 to $670 million given expectations for continued end market strength and company execution
|
- |
Orders of $337.8 million, up 18% compared to the prior year, and up 10% excluding the impact of FX
|
- |
Revenues of $316.9 million, up 28% compared to the prior year, and up 19% excluding the impact of FX
|
- |
Segment Adjusted EBITDA of $66.8 million, up 42% from $47.2 million in the prior year
|
- |
Segment Adjusted EBITDA margin of 21.1%, up 210 basis points from 19.0% in the prior year
|
- |
Orders of $291.0 million, up 19% compared to the prior year, and up 16% excluding the impact of FX
|
- |
Revenues of $242.2 million, up 36% compared to the prior year, and up 33% excluding the impact of FX
|
- |
Segment Adjusted EBITDA of $68.0 million, up 77% from $38.5 million in the prior year
|
- |
Segment Adjusted EBITDA margin of 28.1%, up 650 basis points from 21.6% in the prior year
|
- |
Orders of $75.0 million, up 19% compared to the prior year, and up 11% excluding the impact of FX
|
- |
Revenues of $60.5 million, up 9% compared to the prior year, and up 1% excluding the impact of FX
|
- |
Segment Adjusted EBITDA of $15.9 million, up 9% from $14.6 million in the prior year
|
- |
Segment Adjusted EBITDA margin of 26.3%, down 10 basis points from 26.4% in the prior year
|
For the Three Month period ended
March 31,
|
||||||||
2018
|
2017
|
|||||||
Revenues
|
$
|
619.6
|
$
|
481.7
|
||||
Cost of sales
|
387.7
|
307.1
|
||||||
Gross Profit
|
231.9
|
174.6
|
||||||
Selling and administrative expenses
|
106.9
|
102.3
|
||||||
Amortization of intangible assets
|
30.9
|
27.6
|
||||||
Other operating expense, net
|
4.3
|
7.9
|
||||||
Operating Income
|
89.8
|
36.8
|
||||||
Interest expense
|
26.0
|
45.9
|
||||||
Other income, net
|
(2.0
|
)
|
(0.5
|
)
|
||||
Income (Loss) Before Income Taxes
|
65.8
|
(8.6
|
)
|
|||||
Provision (benefit) for income taxes
|
23.4
|
(1.6
|
)
|
|||||
Net Income (Loss)
|
42.4
|
(7.0
|
)
|
|||||
Less: Net income attributable to noncontrolling interests
|
-
|
0.1
|
||||||
Net Income (Loss) Attributable to Gardner Denver Holdings, Inc.
|
$
|
42.4
|
$
|
(7.1
|
)
|
|||
Basic earnings (loss) per share
|
$
|
0.21
|
$
|
(0.05
|
)
|
|||
Diluted earnings (loss) per share
|
$
|
0.20
|
$
|
(0.05
|
)
|
March 31,
2018
|
December 31,
2017
|
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
353.8
|
$
|
393.3
|
||||
Accounts receivable, net of allowance for doubtful accounts of $19.5 and $18.7, respectively
|
541.6
|
536.3
|
||||||
Inventories
|
567.2
|
494.5
|
||||||
Other current assets
|
50.8
|
39.5
|
||||||
Total current assets
|
1,513.4
|
1,463.6
|
||||||
Property, plant and equipment, net of accumulated depreciation of $219.6 and $203.8, respectively
|
365.3
|
363.2
|
||||||
Goodwill
|
1,308.3
|
1,227.6
|
||||||
Other intangible assets, net
|
1,449.2
|
1,431.2
|
||||||
Deferred tax assets
|
1.1
|
1.0
|
||||||
Other assets
|
138.1
|
134.6
|
||||||
Total assets
|
$
|
4,775.4
|
$
|
4,621.2
|
||||
Liabilities and Stockholders' Equity
|
||||||||
Current liabilities:
|
||||||||
Short-term borrowings and current maturities of long-term debt
|
$
|
21.1
|
$
|
20.9
|
||||
Accounts payable
|
284.6
|
269.7
|
||||||
Accrued liabilities
|
305.4
|
271.2
|
||||||
Total current liabilities
|
611.1
|
561.8
|
||||||
Long-term debt, less current maturities
|
2,034.0
|
2,019.3
|
||||||
Pensions and other postretirement benefits
|
100.2
|
99.8
|
||||||
Deferred income taxes
|
248.3
|
237.5
|
||||||
Other liabilities
|
214.1
|
226.0
|
||||||
Total liabilities
|
3,207.7
|
3,144.4
|
||||||
Stockholders' equity:
|
||||||||
Common stock, $0.01 par value; 1,000,000,000 shares authorized; 199,434,219 and 198,377,237 shares issued at March 31, 2018 and December 31, 2017, respectively
|
2.0
|
2.0
|
||||||
Capital in excess of par value
|
2,282.3
|
2,275.4
|
||||||
Accumulated deficit
|
(535.7
|
)
|
(577.8
|
)
|
||||
Accumulated other comprehensive loss
|
(153.3
|
)
|
(199.8
|
)
|
||||
Treasury stock at cost; 2,208,106 and 2,159,266 shares at March 31, 2018 and December 31, 2017, respectively
|
(27.6
|
)
|
(23.0
|
)
|
||||
Total stockholders' equity
|
1,567.7
|
1,476.8
|
||||||
Total liabilities and stockholders' equity
|
$
|
4,775.4
|
$
|
4,621.2
|
For the
Three Month
Period Ended
March 31,
2018
|
For the
Three Month
Period Ended
March 31,
2017
|
|||||||
Cash Flows From Operating Activities:
|
||||||||
Net income (loss)
|
$
|
42.4
|
$
|
(7.0
|
)
|
|||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
||||||||
Amortization of intangible assets
|
30.9
|
27.6
|
||||||
Depreciation in cost of sales
|
11.4
|
10.3
|
||||||
Depreciation in selling and administrative expenses
|
2.7
|
1.8
|
||||||
Stock-based compensation expense
|
3.4
|
-
|
||||||
Foreign currency transaction losses, net
|
2.6
|
0.6
|
||||||
(Gains) losses on asset and business disposals
|
(1.2
|
)
|
3.0
|
|||||
Deferred income taxes
|
2.8
|
(6.2
|
)
|
|||||
Changes in assets and liabilities:
|
||||||||
Receivables
|
10.0
|
11.1
|
||||||
Inventories
|
(42.9
|
)
|
(15.4
|
)
|
||||
Accounts payable
|
8.4
|
3.2
|
||||||
Accrued liabilities
|
2.0
|
(20.6
|
)
|
|||||
Other assets and liabilities, net
|
(12.3
|
)
|
(11.0
|
)
|
||||
Net cash provided by (used in) operating activities
|
60.2
|
(2.6
|
)
|
|||||
Cash Flows From Investing Activities:
|
||||||||
Capital expenditures
|
(10.1
|
)
|
(16.4
|
)
|
||||
Net cash paid in business combinations
|
(94.9
|
)
|
(0.3
|
)
|
||||
Disposals of property, plant and equipment
|
3.0
|
0.1
|
||||||
Net cash used in investing activities
|
(102.0
|
)
|
(16.6
|
)
|
||||
Cash Flows From Financing Activities:
|
||||||||
Principal payments on long-term debt
|
(5.3
|
)
|
(6.1
|
)
|
||||
Purchase of treasury stock
|
(6.2
|
)
|
(2.5
|
)
|
||||
Proceeds from stock option exercises
|
3.3
|
-
|
||||||
Purchase of shares from noncontrolling interests
|
-
|
(4.6
|
)
|
|||||
Other
|
-
|
(0.1
|
)
|
|||||
Net cash used in financing activities
|
(8.2
|
)
|
(13.3
|
)
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
10.5
|
2.3
|
||||||
Net decrease in cash and cash equivalents
|
(39.5
|
)
|
(30.2
|
)
|
||||
Cash and cash equivalents, beginning of period
|
393.3
|
255.8
|
||||||
Cash and cash equivalents, end of period
|
$
|
353.8
|
$
|
225.6
|
For the Three Month period ended
March 31,
|
||||||||
2018
|
2017
|
|||||||
Net Income (Loss)
|
$
|
42.4
|
$
|
(7.0
|
)
|
|||
Basic Earnings (Loss) Per Share (As Reported)1,2
|
$
|
0.21
|
$
|
(0.05
|
)
|
|||
Diluted Earnings (Loss) Per Share (As Reported)1,2
|
$
|
0.20
|
$
|
(0.05
|
)
|
|||
Plus:
|
||||||||
Provision (benefit) for income taxes
|
23.4
|
(1.6
|
)
|
|||||
Amortization of acquisition related intangible assets
|
28.0
|
25.8
|
||||||
Sponsor fees and expenses
|
-
|
1.1
|
||||||
Restructuring and related business transformation costs
|
4.5
|
8.6
|
||||||
Acquisition related expenses and non-cash charges
|
4.6
|
0.7
|
||||||
Environmental remediation loss reserve
|
-
|
1.0
|
||||||
Expenses related to public stock offerings
|
1.4
|
1.3
|
||||||
Establish public company financial reporting compliance
|
0.8
|
1.3
|
||||||
Stock-based compensation
|
2.7
|
-
|
||||||
Foreign currency transaction losses, net
|
2.6
|
0.6
|
||||||
Shareholder litigation settlement recoveries
|
(4.5
|
)
|
-
|
|||||
Other adjustments
|
(0.7
|
)
|
0.5
|
|||||
Minus:
|
||||||||
Income tax provision, as adjusted
|
24.5
|
12.2
|
||||||
Adjusted Net Income
|
$
|
80.7
|
$
|
20.1
|
||||
Adjusted Basic Earnings Per Share2
|
$
|
0.40
|
$
|
0.14
|
||||
Adjusted Diluted Earnings Per Share2,4
|
$
|
0.38
|
$
|
0.13
|
||||
Average shares outstanding:
|
||||||||
Basic, as reported
|
201.6
|
148.5
|
||||||
Diluted, as reported3
|
209.9
|
148.5
|
||||||
Adjusted diluted4
|
209.9
|
150.6
|
For the Three Month period ended
March 31,
|
||||||||
2018
|
2017
|
|||||||
Net Income (Loss)
|
$
|
42.4
|
$
|
(7.0
|
)
|
|||
Plus:
|
||||||||
Interest expense
|
26.0
|
45.9
|
||||||
Provision (benefit) for income taxes
|
23.4
|
(1.6
|
)
|
|||||
Depreciation expense
|
14.1
|
12.1
|
||||||
Amortization expense
|
30.9
|
27.6
|
||||||
Sponsor fees and expenses
|
-
|
1.1
|
||||||
Restructuring and related business transformation costs
|
4.5
|
8.6
|
||||||
Acquisition related expenses and non-cash charges
|
4.6
|
0.7
|
||||||
Environmental remediation loss reserve
|
-
|
1.0
|
||||||
Expenses related to public stock offerings
|
1.4
|
1.3
|
||||||
Establish public company financial reporting compliance
|
0.8
|
1.3
|
||||||
Stock-based compensation
|
2.7
|
-
|
||||||
Foreign currency transaction losses, net
|
2.6
|
0.6
|
||||||
Shareholder litigation settlement recoveries
|
(4.5
|
)
|
-
|
|||||
Other adjustments
|
(0.7
|
)
|
0.5
|
|||||
Adjusted EBITDA
|
$
|
148.2
|
$
|
92.1
|
||||
Minus:
|
||||||||
Interest expense
|
$
|
26.0
|
$
|
45.9
|
||||
Income tax provision, as adjusted
|
24.5
|
12.2
|
||||||
Depreciation expense
|
14.1
|
12.1
|
||||||
Amortization of non-acquisition related intangible assets
|
2.9
|
1.8
|
||||||
Adjusted Net Income
|
$
|
80.7
|
$
|
20.1
|
||||
Free Cash Flow
|
||||||||
Cash flows - operating activities
|
$
|
60.2
|
$
|
(2.6
|
)
|
|||
Minus:
|
||||||||
Capital expenditures
|
10.1
|
16.4
|
||||||
Free Cash Flow
|
$
|
50.1
|
$
|
(19.0
|
)
|
For the Three Month period ended
March 31,
|
||||||||
2018
|
2017
|
|||||||
Revenue
|
||||||||
Industrials
|
$
|
316.9
|
$
|
248.0
|
||||
Energy
|
242.2
|
178.3
|
||||||
Medical
|
60.5
|
55.4
|
||||||
Total Revenue
|
$
|
619.6
|
$
|
481.7
|
||||
Segment Adjusted EBITDA
|
||||||||
Industrials
|
$
|
66.8
|
$
|
47.2
|
||||
Energy
|
68.0
|
38.5
|
||||||
Medical
|
15.9
|
14.6
|
||||||
Total Segment Adjusted EBITDA
|
$
|
150.7
|
$
|
100.3
|
||||
Less items to reconcile Segment Adjusted EBITDA to
|
||||||||
Income (Loss) Before Income Taxes:
|
||||||||
Corporate expenses not allocated to segments
|
$
|
2.5
|
$
|
8.2
|
||||
Interest expense
|
26.0
|
45.9
|
||||||
Depreciation and amortization expense
|
45.0
|
39.7
|
||||||
Sponsor fees and expenses
|
-
|
1.1
|
||||||
Restructuring and related business transformation costs
|
4.5
|
8.6
|
||||||
Acquisition related expenses and non-cash charges
|
4.6
|
0.7
|
||||||
Environmental remediation loss reserve
|
-
|
1.0
|
||||||
Expenses related to public stock offerings
|
1.4
|
1.3
|
||||||
Establish public company financial reporting compliance
|
0.8
|
1.3
|
||||||
Stock-based compensation
|
2.7
|
-
|
||||||
Foreign currency transaction losses, net
|
2.6
|
0.6
|
||||||
Shareholder litigation settlement recoveries
|
(4.5
|
)
|
-
|
|||||
Other adjustments
|
(0.7
|
)
|
0.5
|
|||||
Income (Loss) Before Income Taxes
|
$
|
65.8
|
$
|
(8.6
|
)
|