08/05/2022 | Press release | Distributed by Public on 08/05/2022 04:55
Three Months Ended June 30, |
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(in millions, except per share data) | 2022 | 2021 | ||
Net sales | $ | 3,485 | $ | 3,242 |
Cost of sales | 3,312 | 3,092 | ||
Gross profit | 173 | 150 | ||
Selling, general and administrative expenses | 142 | 136 | ||
Restructuring and impairment costs | 12 | 8 | ||
Equity income (loss) | 16 | 38 | ||
Earnings (loss) before interest and income taxes | 35 | 44 | ||
Net financing charges | 39 | 87 | ||
Other pension expense (income) | (4) | (4) | ||
Income (loss) before income taxes | - | (39) | ||
Income tax provision (benefit) | 20 | 10 | ||
Net income (loss) | (20) | (49) | ||
Income attributable to noncontrolling interests | 10 | 22 | ||
Net income (loss) attributable to Adient | $ | (30) | $ | (71) |
Diluted earnings (loss) per share | $ | (0.32) | $ | (0.75) |
Shares outstanding at period end | 94.8 | 94.2 | ||
Diluted weighted average shares | 94.8 | 94.2 |
June 30, | September 30, | |||
(in millions) | 2022 | 2021 | ||
Assets | ||||
Cash and cash equivalents | $ | 892 | $ | 1,521 |
Accounts receivable - net
|
1,761 | 1,426 | ||
Inventories | 953 | 976 | ||
Assets held for sale | - | 49 | ||
Other current assets | 456 | 1,114 | ||
Current assets | 4,062 | 5,086 | ||
Property, plant and equipment - net | 1,443 | 1,607 | ||
Goodwill | 2,122 | 2,212 | ||
Other intangible assets - net | 504 | 555 | ||
Investments in partially-owned affiliates | 348 | 335 | ||
Assets held for sale | 7 | 25 | ||
Other noncurrent assets | 829 | 958 | ||
Total assets | $ | 9,315 | $ | 10,778 |
Liabilities and Shareholders' Equity | ||||
Short-term debt | $ | 20 | $ | 184 |
Accounts payable and accrued expenses | 2,697 | 2,519 | ||
Liabilities held for sale | - | 16 | ||
Other current liabilities | 670 | 792 | ||
Current liabilities | 3,387 | 3,511 | ||
Long-term debt | 2,707 | 3,512 | ||
Other noncurrent liabilities | 723 | 797 | ||
Redeemable noncontrolling interests | 45 | 240 | ||
Shareholders' equity attributable to Adient | 2,123 | 2,376 | ||
Noncontrolling interests | 330 | 342 | ||
Total liabilities and shareholders' equity | $ | 9,315 | $ | 10,778 |
Three Months Ended June 30, |
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(in millions) | 2022 | 2021 | ||
Operating Activities | ||||
Net income (loss) attributable to Adient | $ | (30) | $ | (71) |
Income attributable to noncontrolling interests | 10 | 22 | ||
Net income (loss) | (20) | (49) | ||
Adjustments to reconcile net income (loss) to cash provided (used) by operating activities: | ||||
Depreciation | 72 | 71 | ||
Amortization of intangibles | 14 | 10 | ||
Pension and postretirement benefit expense (benefit) | (3) | (1) | ||
Pension and postretirement contributions, net | (7) | (6) | ||
Equity in earnings of partially-owned affiliates, net of dividends received | 10 | 245 | ||
Deferred income taxes | 13 | (2) | ||
Non-cash restructuring and impairment charges | 1 | 1 | ||
Equity-based compensation | 7 | 10 | ||
Other | - | 8 | ||
Changes in assets and liabilities: | ||||
Receivables | (83) | 315 | ||
Inventories | 8 | (87) | ||
Other assets | 7 | 14 | ||
Restructuring reserves | (11) | (23) | ||
Accounts payable and accrued liabilities | 37 | (277) | ||
Accrued income taxes | (22) | (7) | ||
Cash provided (used) by operating activities | 23 | 222 | ||
Investing Activities | ||||
Capital expenditures | (53) | (60) | ||
Sale of property, plant and equipment | 6 | 11 | ||
Business acquisitions | (13) | (271) | ||
Proceeds from business divestitures | - | 53 | ||
Settlement of an affiliate loan | - | 15 | ||
Cash provided (used) by investing activities | (60) | (252) | ||
Financing Activities | ||||
Increase (decrease) in short-term debt | - | 30 | ||
Increase (decrease) in long-term debt | - | 214 | ||
Repayment of long-term debt | (144) | (185) | ||
Debt financing costs | - | (7) | ||
Dividends paid to noncontrolling interests | (3) | (7) | ||
Other | - | (1) | ||
Cash provided (used) by financing activities | (147) | 44 | ||
Effect of exchange rate changes on cash and cash equivalents | (42) | - | ||
Increase (decrease) in cash and cash equivalents, including cash classified within current assets held for sale | (226) | 14 | ||
Less: Change in cash classified within current assets held for sale | - | 2 | ||
Increase (decrease) in cash and cash equivalents | $ | (226) | $ | 16 |
Three Months Ended June 30, |
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(in millions) | 2022 | 2021 | ||
Net Sales | ||||
Americas | $ | 1,673 | $ | 1,440 |
EMEA | 1,215 | 1,328 | ||
Asia | 627 | 516 | ||
Eliminations | (30) | (42) | ||
Total net sales | $ | 3,485 | $ | 3,242 |
Three Months Ended June 30, |
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(in millions) | 2022 | 2021 | ||
Adjusted EBITDA | ||||
Americas | $ | 70 | $ | 23 |
EMEA | 31 | 22 | ||
Asia | 64 | 92 | ||
Corporate-related costs (1)
|
(22) | (19) | ||
Restructuring and impairment costs (2)
|
(12) | (8) | ||
Purchase accounting amortization (3)
|
(14) | (11) | ||
Restructuring related charges (4)
|
(1) | - | ||
Stock based compensation | (7) | (10) | ||
Depreciation | (72) | (71) | ||
Other items (5)
|
(2) | 26 | ||
Earnings (loss) before interest and income taxes | 35 | 44 | ||
Net financing charges | (39) | (87) | ||
Other pension income (expense) | 4 | 4 | ||
Income (loss) before income taxes | $ | - | $ | (39) |
Three Months Ended June 30, |
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(in millions, except per share data) | 2022 | 2021 | ||
Income available to shareholders | ||||
Net income (loss) attributable to Adient | $ | (30) | $ | (71) |
Weighted average shares outstanding | ||||
Basic weighted average shares outstanding | 94.8 | 94.2 | ||
Effect of dilutive securities: | ||||
Stock options, unvested restricted stock and unvested performance share awards | - | - | ||
Diluted weighted average shares outstanding | 94.8 | 94.2 |
• | 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. |
• |
"Americas footprint actions" and "EMEA footprint actions" refer to miscellaneous closures / roll off of business.
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• |
"EMEA deconsolidation" refers to sale of a metals business in Turkey effective October 1, 2021 to a nonconsolidated JV in which Adient retains a noncontrolling interest.
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• |
"China strategic transaction" refers to the disposition of the YFAS JV and consolidation of CQADNT and LFADNT, all of which were effective on September 30, 2021.
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• |
"China footprint actions" refers to divestitures of smaller, non-core businesses (i.e., remaining fabrics business and Futuris entity).
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Three Months Ended June 30, | ||||||||||||
2022 | 2021 | |||||||||||
(in millions, except per share data) | GAAP Results | Adj. | Adjusted Results | GAAP Results | Adj. | Adjusted Results | ||||||
Net sales | $ | 3,485 | $ | - | $ | 3,485 | $ | 3,242 | $ | - | $ | 3,242 |
Cost of sales (6)
|
3,312 | (2) | 3,310 | 3,092 | 28 | 3,120 | ||||||
Gross profit | 173 | 2 | 175 | 150 | (28) | 122 | ||||||
Selling, general and administrative expenses (7)
|
142 | (15) | 127 | 136 | (12) | 124 | ||||||
Restructuring and impairment costs (2)
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12 | (12) | - | 8 | (8) | - | ||||||
Equity income (loss) (8)
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16 | - | 16 | 38 | 1 | 39 | ||||||
Earnings (loss) before interest and income taxes (EBIT) | 35 | 29 | 64 | 44 | (7) | 37 | ||||||
Memo accounts: | ||||||||||||
Depreciation | 72 | 71 | ||||||||||
Equity based compensation | 7 | 10 | ||||||||||
Adjusted EBITDA | $ | 143 | $ | 118 | ||||||||
Net financing charges (9)
|
39 | (2) | 37 | 87 | (38) | 49 | ||||||
Other pension expense (income) (12)
|
(4) | 3 | (1) | (4) | 1 | (3) | ||||||
Income (loss) before income taxes | - | 28 | 28 | (39) | 30 | (9) | ||||||
Income tax provision (benefit) (10)
|
20 | (11) | 9 | 10 | 7 | 17 | ||||||
Net income (loss) attributable to Adient | (30) | 38 | 8 | (71) | 21 | (50) | ||||||
Diluted earnings (loss) per share | (0.32) | 0.40 | 0.08 | (0.75) | 0.22 | (0.53) | ||||||
Diluted weighted average shares | 94.8 | 0.9 | 95.7 | 94.2 | - | 94.2 |
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, 2021 | ||||||||||
Americas | EMEA | Asia | Corporate/Eliminations | Consolidated | ||||||
Net sales | $ | 1,440 | $ | 1,328 | $ | 516 | $ | (42) | $ | 3,242 |
Adjusted EBITDA | $ | 23 | $ | 22 | $ | 92 | $ | (19) | $ | 118 |
Adjusted EBITDA margin | 1.6 | % | 1.7 | % | 17.8 | % | N/A | 3.6 | % |
Three Months Ended June 30, |
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(in millions) | 2022 | 2021 | ||
Adjusted EBITDA | $ | 143 | $ | 118 |
Adjusted Equity Income | 16 | 39 | ||
Adjusted EBITDA Excluding Adjusted Equity Income | $ | 127 | $ | 79 |
% of Sales | 3.6 | % | 2.4 | % |
Three months ended June 30, | ||||||||||
2022 | 2021 | |||||||||
(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 | $ | - | $ | 20 | nm | $ | (39) | $ | 10 | (25.6)% |
Adjustments (10)
|
28 | (11) | (39.3)% | 30 | 7 | 23.3% | ||||
As adjusted | $ | 28 | $ | 9 | 32.1% | $ | (9) | $ | 17 | nm |
Three Months Ended June 30, |
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(in millions) | 2022 | 2021 | ||
Net income (loss) attributable to Adient | (30) | (71) | ||
Restructuring and impairment costs
|
12 | 8 | ||
Purchase accounting amortization
|
14 | 11 | ||
Restructuring related charges
|
1 | - | ||
Pension mark-to-market and curtailment/settlement (gain)/loss (12)
|
(3) | (1) | ||
Write off of deferred financing costs upon repurchase of debt (9)
|
- | 10 | ||
Derivative loss on Yanfeng transaction (9)
|
- | 24 | ||
Foreign exchange loss on intercompany loan in Russia (9)
|
2 | - | ||
Premium paid on repurchase of debt (9)
|
- | 4 | ||
Other items (5)
|
2 | (26) | ||
Impact of adjustments on noncontrolling interests (11)
|
(1) | (2) | ||
Tax impact of above adjustments and other tax items (10)
|
11 | (7) | ||
Adjusted net income (loss) attributable to Adient | $ | 8 | $ | (50) |
Three Months Ended June 30, |
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2022 | 2021 | |||
Diluted earnings (loss) per share as reported | $ | (0.32) | $ | (0.75) |
Restructuring and impairment costs | 0.13 | 0.08 | ||
Purchase accounting amortization | 0.15 | 0.12 | ||
Restructuring related charges | 0.01 | - | ||
Pension mark-to-market and curtailment/settlement (gain)/loss (12)
|
(0.03) | (0.01) | ||
Write off of deferred financing costs upon repurchase of debt (9)
|
- | 0.11 | ||
Derivative loss on Yanfeng transaction (9)
|
- | 0.25 | ||
Foreign exchange loss on intercompany loan in Russia (9)
|
0.02 | - | ||
Premium paid on repurchase of debt (9)
|
- | 0.04 | ||
Other items (5)
|
0.02 | (0.28) | ||
Impact of adjustments on noncontrolling interests (11)
|
(0.01) | (0.02) | ||
Tax impact of above adjustments and other tax items (10)
|
0.11 | (0.07) | ||
Adjusted diluted earnings (loss) per share | $ | 0.08 | $ | (0.53) |
June 30, | September 30, | |||
(in millions) | 2022 | 2021 | ||
Cash and cash equivalents | $ | 892 | $ | 1,521 |
Total short-term and long-term debt | 2,727 | 3,696 | ||
Net debt | $ | 1,835 | $ | 2,175 |
Three Months Ended June 30, |
Nine Months Ended June 30, |
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(in millions) | 2022 | 2021 | 2022 | 2021 | ||||
Cash provided (used) by operating activities | $ | 23 | $ | 222 | $ | 38 | $ | 362 |
Capital expenditures | (53) | (60) | (170) | (186) | ||||
Free cash flow | $ | (30) | $ | 162 | $ | (132) | $ | 176 |
FY2022 | FY2021 | |||||||
(in millions) | Q3 | YTD | Q3 | YTD | ||||
Adjusted EBITDA excluding adjusted equity income | $ | 127 | $ | 381 | $ | 79 | $ | 613 |
(+) Dividend | 26 | 27 | 283 | 292 | ||||
(-) Restructuring (cash) | (11) | (49) | (27) | (127) | ||||
(+/-) Net customer tooling | (15) | (36) | 10 | 10 | ||||
(+/-) Trade working capital (Net AR/AP + Inventory) | (57) | (6) | (60) | 37 | ||||
(+/-) Accrued compensation | 2 | (45) | 27 | 35 | ||||
(-) Interest paid | (23) | (134) | (48) | (184) | ||||
(+/-) Tax refund/taxes paid | (25) | (63) | (20) | (52) | ||||
(+/-) Non-income related taxes (VAT) | (20) | 33 | 5 | (73) | ||||
(+/-) Commercial settlements | (22) | (66) | (8) | (87) | ||||
(+/-) Capitalized engineering | 31 | 33 | (2) | 11 | ||||
(+/-) Prepaids | 15 | (8) | (1) | (31) | ||||
(+/-) Other | (5) | (29) | (16) | (82) | ||||
Operating cash flow | 23 | 38 | 222 | 362 | ||||
Capital expenditures | (53) | (170) | (60) | (186) | ||||
Free cash flow | $ | (30) | $ | (132) | $ | 162 | $ | 176 |
Net sales | Q1 | Q2 | Q3 | Q4 | FY2021 |
Americas - as reported: | 1,737 | 1,644 | 1,440 | 1,343 | 6,164 |
Americas footprint actions | (20) | - | - | (1) | (21) |
Americas - pro forma | 1,717 | 1,644 | 1,440 | 1,342 | 6,143 |
EMEA - as reported: | 1,604 | 1,636 | 1,328 | 996 | 5,564 |
EMEA JV deconsolidation | (25) | (28) | (11) | (35) | (99) |
EMEA footprint actions | (18) | (7) | (6) | 1 | (30) |
EMEA - pro forma | 1,561 | 1,601 | 1,311 | 962 | 5,435 |
Asia - as reported: | 554 | 588 | 516 | 465 | 2,123 |
China strategic transactions | 234 | 199 | 231 | 227 | 891 |
China footprint actions | (44) | (33) | (31) | (13) | (121) |
Asia - pro forma | 744 | 754 | 716 | 679 | 2,893 |
Elimination/corporate: | (47) | (49) | (42) | (33) | (171) |
Total Adient - as reported | 3,848 | 3,819 | 3,242 | 2,771 | 13,680 |
Total Adient - pro forma | 3,975 | 3,950 | 3,425 | 2,950 | 14,300 |
Adjusted EBITDA | Q1 | Q2 | Q3 | Q4 | FY2021 |
Americas - as reported: | 132 | 64 | 23 | 13 | 232 |
Americas footprint actions | (5) | 1 | - | (1) | (5) |
Americas - pro forma | 127 | 65 | 23 | 12 | 227 |
EMEA - as reported: | 114 | 141 | 22 | - | 277 |
EMEA JV deconsolidation | (4) | (5) | - | (8) | (17) |
EMEA footprint actions | (6) | (2) | (1) | (1) | (10) |
EMEA - pro forma | 104 | 134 | 21 | (9) | 250 |
Asia - as reported: | 151 | 121 | 92 | 122 | 486 |
China strategic transactions | (31) | (2) | 10 | (38) | (61) |
China footprint actions | (7) | (5) | (2) | - | (14) |
Asia - pro forma | 113 | 114 | 100 | 84 | 411 |
Elimination/corporate: | (19) | (23) | (19) | (17) | (78) |
Total Adient - as reported | 378 | 303 | 118 | 118 | 917 |
Total Adient - pro forma | 325 | 290 | 125 | 70 | 810 |
Three Months Ended June 30, |
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(in millions) | 2022 | 2021 | ||
Restructuring charges | $ | (13) | $ | (8) |
Held for sale asset adjustments | 1 | - | ||
$ | (12) | $ | (8) |
Three Months Ended June 30, |
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(in millions) | 2022 | 2021 | ||
Transaction costs | $ | (2) | $ | (2) |
Brazil indirect tax recoveries | 1 | 28 | ||
Disposal of non-core assets | (1) | - | ||
$ | (2) | $ | 26 |
Three Months Ended June 30, |
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(in millions) | 2022 | 2021 | ||
Restructuring related charges | $ | (1) | $ | - |
Brazil indirect tax recoveries | 1 | 28 | ||
Purchase accounting amortization | (1) | - | ||
Disposal of non-core assets | (1) | - | ||
$ | (2) | $ | 28 |
Three Months Ended June 30, |
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(in millions) | 2022 | 2021 | ||
Purchase accounting amortization | $ | (13) | $ | (10) |
Transaction costs | (2) | (2) | ||
$ | (15) | $ | (12) |
Three Months Ended June 30, |
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(in millions) | 2022 | 2021 | |
Purchase accounting amortization | - | 1 | |
$ | - | $ | 1 |
Three Months Ended June 30, |
||||
(in millions) | 2022 | 2021 | ||
Derivative loss on Yanfeng transaction | $ | - | $ | (24) |
Premium paid on repurchase of debt | - | (4) | ||
Write off of deferred financing costs upon repurchase of debt | - | (10) | ||
Foreign exchange loss on intercompany loan in Russia | (2) | - | ||
$ | (2) | $ | (38) |
Three Months Ended June 30, |
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(in millions) | 2022 | 2021 | ||
Benefits associated with restructuring and impairment charges | $ | - | $ | (2) |
Brazil indirect tax recoveries | - | 9 | ||
Withholding tax adjustments
|
- | (11) | ||
Valuation allowances | 12 | - | ||
Other reconciling items | (1) | (3) | ||
$ | 11 | $ | (7) |