Raises 2017 EPS guidance midpoint
GAAP Results:
-
Revenue up 3% to $626 million
-
Segment operating income up 9%
-
EPS up to $0.52
Adjusted Results:
-
Organic revenue up 2%; Organic orders up 7%
-
Segment operating income up 3%, including unfavorable FX of $4
million
-
EPS up 8% to $0.64
ITT Inc. (NYSE:ITT) today reported solid 2017 first-quarter financial
results that reflect the company’s ability to leverage the benefits from
proactive restructuring and continuous operational improvement while
advancing share gains and market growth in key global end markets and
deploying capital to enhance its global platforms.
On a GAAP basis, the company delivered revenue of $626 million, a 3
percent increase, and an organic revenue (defined as total revenue
excluding foreign exchange, acquisition and divestiture impacts)
increase of 2 percent, as solid growth in transportation – driven by
automotive, aerospace and defense – was partially offset by project
declines in oil and gas, reflecting weak backlog entering the year.
Organic orders grew 7% in the first quarter primarily due to a large oil
and gas project win and significant automotive share gains in Europe and
China.
GAAP segment operating income increased 9 percent and adjusted segment
operating income increased 3 percent, reflecting incremental
restructuring benefits, higher volumes and improved productivity. These
gains were partially offset by $4 million of unfavorable foreign
exchange, higher commodity costs and strategic investments to support
continued long-term automotive platform wins. Excluding foreign
exchange, adjusted segment operating income increased 8 percent. GAAP
segment operating income also benefited from lower restructuring and
acquisition-related costs.
GAAP EPS increased $0.10 to $0.52 and adjusted EPS, which excludes
special items, increased $0.05 to $0.64, as segment operating income
growth, favorable corporate costs and improved efficiency were partially
offset by $1 million of unfavorable impacts from foreign exchange.
Excluding foreign exchange, adjusted EPS grew 10 percent, despite a 150
basis point increase in the tax rate.
For a reconciliation of GAAP to non-GAAP results, please refer to www.itt.com/investors
or click
here.
“ITT delivered a solid first quarter as we continued our intense focus
on optimizing execution across the enterprise while advancing our
essential long-term growth plans,” said CEO and President Denise Ramos.
“We demonstrated our executional capability in accomplishments ranging
from successfully leveraging the benefits of our structural reset at
Industrial Process, to driving solid operational improvements at our
connector facilities, to improving productivity and efficiency across
the enterprise.
“We also simplified our structural framework by strategically combining
two of our segments to create Connect and Control Technologies, which
will give us new opportunities to optimize operations and leverage
shared resources and talent to enhance our long-term growth in the
global aerospace and industrial markets. All of this work is being
enhanced by our new Chief Operating Officer structure, which is driving
more robust processes and performance across the enterprise.
“In addition, we continued to expand in key end markets such as
automotive and aerospace, while leveraging recent acquisitions to
strengthen our global platforms. We drove significant order growth in
automotive in Europe and China, in global oil and gas pumps and
connectors, and in heavy vehicle connectors in Asia. In addition, we are
on track with the integration of our recent Axtone Railway Components
acquisition and are continuing to strategically deploy our capital to
both position ITT for long-term success and to create value for
shareowners.”
New Connect and Control Technologies Segment
The Connect and Control Technologies (CCT) segment was formed by
combining the company’s Interconnect Solutions and Control Technologies
businesses to align operations, leverage shared infrastructure and drive
long-term growth in common target markets. CCT designs and manufactures
harsh-environment connectors and critical energy absorption and flow
control components primarily for the aerospace and defense, and
industrial markets. Reconciliations of historical CCT quarterly data are
available at www.itt.com/investors
or click
here.
2017 First-Quarter Business Segment Results
All quarterly results are compared with the respective prior-year
periods.
Industrial Process designs and manufactures industrial pumps
and valves for the chemical, industrial, oil and gas, and mining markets.
-
Total revenue and organic revenue decreased 11 percent to $186
million, reflecting growth in short-cycle baseline pumps and service
that was more than offset by large project declines, primarily in oil
and gas due to weak backlog entering the year, as well as slower
aftermarket parts activity.
-
GAAP operating income decreased 19 percent to $7 million, and adjusted
segment operating income decreased 18 percent to $10 million. Both
measures primarily reflect lower project volumes across key markets,
increased negative impacts from pump projects with a high degree of
engineering and manufacturing complexity, and $1 million of
unfavorable foreign exchange, which were partially offset by
incremental restructuring benefits and improved operational execution.
Motion Technologies designs and manufactures braking
technologies, shock absorbers and specialized sealing solutions for the
automotive and rail markets.
-
Total revenue increased 12 percent to $287 million, and organic
revenue increased 10 percent, reflecting significant share gains and
market growth in automotive brake pads in Europe and China, improved
aftermarket, and strength in sealing solutions at Wolverine. Total
revenue includes $8 million of unfavorable foreign exchange and
incremental revenue of $14 million from the acquisition of Axtone
Railway Components.
-
GAAP operating income increased 8 percent to $55 million, and adjusted
segment operating income increased 5 percent to $56 million. Both
increases reflect strong volume growth, partially offset by commodity
costs, pricing pressures, $2 million of unfavorable foreign exchange
and $3 million of strategic investments to support continued long-term
platform wins in North America.
Connect and Control Technologies designs and manufactures
harsh-environment connectors and critical energy absorption and flow
control components primarily for the aerospace and defense and
industrial markets.
-
Total revenue increased 6 percent to $153 million, and organic revenue
increased 7 percent. Both increases reflect stronger general
industrial, defense, and oil and gas connector activity.
-
GAAP operating income increased 32 percent to $16 million and adjusted
segment operating income increased 14 percent to $18 million. Both
measures reflect higher volumes and improved operational efficiencies
in connector facilities and incremental restructuring benefits,
partially offset by incremental costs related to environmental control
systems.
Guidance
The company is maintaining its previously announced 2017 full-year
revenue guidance in the range of down 2 percent to up 2 percent vs. the
prior year, and it is raising the midpoint of its previous GAAP and
adjusted EPS guidance by $0.05. The updated EPS guidance reflects an
increase at the low end and a tightening of the previous ranges due to
solid results in the first quarter and an improved operational outlook,
partially offset by additional foreign exchange and commodity headwinds.
Investor Call Today
ITT's senior management will host a conference call for investors today
at 9 a.m. ET to review performance and answer questions. The briefing
can be monitored live via webcast at the following address on the
company's Web site: www.itt.com/investors
and will be available on the website from two hours after the webcast
until Monday, May 22, 2017, at midnight.
All references to EPS are defined as diluted earnings per share from
continuing operations.
About ITT
ITT is a diversified leading manufacturer of highly engineered critical
components and customized technology solutions for the transportation,
industrial, and oil and gas markets. Building on its heritage of
innovation, ITT partners with its customers to deliver enduring
solutions to the key industries that underpin our modern way of life.
ITT is headquartered in White Plains, N.Y., with employees in more than
35 countries and sales in a total of approximately 125 countries. The
company generated 2016 revenues of $2.4 billion. For more information,
visit www.itt.com.
Safe Harbor Statement
This release contains “forward-looking statements” intended to qualify
for the safe harbor from liability established by the Private Securities
Litigation Reform Act of 1995 (the “Act”). No forward-looking statement
can be guaranteed, and actual results may differ materially from those
projected. All forward-looking statements included in this release are
based on information available to us on the date hereof, and we
undertake no obligation to publicly update any forward-looking
statement, whether as a result of new information, future events or
otherwise. The forward-looking statements are not historical facts, but
rather are based on current expectations, estimates, assumptions and
projections about the business and future financial results of the
industry in which we operate, and other legal, regulatory and economic
developments. These forward-looking statements include, but are not
limited to, future strategic plans and other statements that describe
the company’s business strategy, outlook, objectives, plans, intentions
or goals, and any discussion of future events and future operating or
financial performance.
We use words such as “anticipate,” “estimate,” “expect,” “project,”
“intend,” “plan,” “believe,” “target,” “future,” “may,” “will,” “could,”
“should,” “potential,” “continue,” “guidance” and other similar
expressions to identify such forward-looking statements. Forward-looking
statements are uncertain and to some extent unpredictable, and involve
known and unknown risks, uncertainties and other important factors that
could cause actual results to differ materially from those expressed or
implied in, or reasonably inferred from, such forward-looking statements.
Forward-looking statements in this release should be evaluated together
with the risks and uncertainties that affect our business, particularly
those mentioned in the Risk Factors section of the Company's Annual
Report on Form 10-K, Quarterly Reports on Form 10-Q and other documents
filed from time to time with the Securities and Exchange Commission.
|
ITT INC. AND SUBSIDIARIES
|
|
CONSOLIDATED CONDENSED INCOME STATEMENTS
|
|
(In millions, except per share)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
|
For the Periods Ended March 31
|
|
|
|
|
2017
|
|
2016
|
|
Revenue
|
|
|
|
|
$
|
625.8
|
|
|
$
|
609.1
|
|
|
Costs of revenue
|
|
|
|
|
|
423.5
|
|
|
|
413.8
|
|
Gross Profit
|
|
|
|
|
|
202.3
|
|
|
|
195.3
|
|
|
General and administrative expenses
|
|
|
|
|
|
66.2
|
|
|
|
69.0
|
|
|
Sales and marketing expenses
|
|
|
|
|
|
43.1
|
|
|
|
43.3
|
|
|
Research and development expenses
|
|
|
|
|
|
22.5
|
|
|
|
19.2
|
|
|
Asbestos-related costs, net
|
|
|
|
|
|
14.9
|
|
|
|
12.8
|
|
Operating Income
|
|
|
|
|
|
55.6
|
|
|
|
51.0
|
|
|
Interest and non-operating expenses, net
|
|
|
|
|
|
0.8
|
|
|
|
1.7
|
|
Income from continuing operations before income tax expense
|
|
|
|
|
|
54.8
|
|
|
|
49.3
|
|
|
Income tax expense
|
|
|
|
|
|
9.1
|
|
|
|
11.7
|
|
Income from continuing operations
|
|
|
|
|
|
45.7
|
|
|
|
37.6
|
|
|
Loss from discontinued operations, net of tax
|
|
|
|
|
|
(0.1
|
)
|
|
|
(0.3
|
)
|
Net income
|
|
|
|
|
|
45.6
|
|
|
|
37.3
|
|
|
Less: Loss attributable to noncontrolling interests
|
|
|
|
|
|
(0.4
|
)
|
|
|
(0.1
|
)
|
Net Income attributable to ITT Inc.
|
|
|
|
|
$
|
46.0
|
|
|
$
|
37.4
|
|
Amounts attributable to ITT Inc.:
|
|
|
|
|
|
|
|
|
Income from continuing operations, net of tax
|
|
|
|
|
$
|
46.1
|
|
|
$
|
37.7
|
|
|
Loss from discontinued operations, net of tax
|
|
|
|
|
|
(0.1
|
)
|
|
|
(0.3
|
)
|
|
Net income attributable to ITT Inc.
|
|
|
|
|
$
|
46.0
|
|
|
$
|
37.4
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share attributable to ITT Inc.:
|
|
|
|
|
|
|
|
|
Basic earnings per share:
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
|
|
$
|
0.52
|
|
|
$
|
0.42
|
|
|
Discontinued operations
|
|
|
|
|
|
-
|
|
|
|
-
|
|
|
Net income
|
|
|
|
|
$
|
0.52
|
|
|
$
|
0.42
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share:
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
|
|
$
|
0.52
|
|
|
$
|
0.42
|
|
|
Discontinued operations
|
|
|
|
|
|
-
|
|
|
|
(0.01
|
)
|
|
Net income
|
|
|
|
|
$
|
0.52
|
|
|
$
|
0.41
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares - basic
|
|
|
|
|
|
88.5
|
|
|
|
89.6
|
|
|
Weighted average common shares - diluted
|
|
|
|
|
|
89.2
|
|
|
|
90.5
|
|
|
|
ITT INC. AND SUBSIDIARIES
|
|
|
CONSOLIDATED CONDENSED BALANCE SHEETS
|
|
|
(In millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
December 31,
|
|
|
|
|
|
|
2017
|
|
2016
|
|
|
|
|
|
|
(Unaudited)
|
|
|
Assets
|
|
|
|
|
|
|
|
Current Assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
$
|
348.5
|
|
$
|
460.7
|
|
|
Receivables, net
|
|
|
|
|
576.9
|
|
|
523.9
|
|
|
Inventories, net
|
|
|
|
|
311.5
|
|
|
295.2
|
|
|
Other current assets
|
|
|
|
|
142.0
|
|
|
122.0
|
Total current assets
|
|
|
|
|
1,378.9
|
|
|
1,401.8
|
|
|
Plant, property and equipment, net
|
|
|
|
|
481.5
|
|
|
464.5
|
|
|
Goodwill
|
|
|
|
|
865.7
|
|
|
774.7
|
|
|
Other intangible assets, net
|
|
|
|
|
156.7
|
|
|
160.3
|
|
|
Asbestos-related assets
|
|
|
|
|
301.3
|
|
|
314.6
|
|
|
Deferred income taxes
|
|
|
|
|
300.2
|
|
|
297.4
|
|
|
Other non-current assets
|
|
|
|
|
186.1
|
|
|
188.4
|
Total non-current assets
|
|
|
|
|
2,291.5
|
|
|
2,199.9
|
Total assets
|
|
|
|
$
|
3,670.4
|
|
$
|
3,601.7
|
Liabilities and Shareholders' Equity
|
|
|
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
|
|
|
|
Short-term loans and current maturities of long-term debt
|
|
|
|
$
|
213.1
|
|
$
|
214.3
|
|
|
Accounts payable
|
|
|
|
|
313.6
|
|
|
301.7
|
|
|
Accrued liabilities
|
|
|
|
|
359.1
|
|
|
350.2
|
Total current liabilities
|
|
|
|
|
885.8
|
|
|
866.2
|
|
|
Asbestos-related liabilities
|
|
|
|
|
866.6
|
|
|
877.5
|
|
|
Postretirement benefits
|
|
|
|
|
251.9
|
|
|
248.6
|
|
|
Other non-current liabilities
|
|
|
|
|
174.1
|
|
|
181.0
|
Total non-current liabilities
|
|
|
|
|
1,292.6
|
|
|
1,307.1
|
Total liabilities
|
|
|
|
$
|
2,178.4
|
|
$
|
2,173.3
|
Total ITT Inc. shareholders' equity
|
|
|
|
|
1,490.4
|
|
|
1,426.4
|
|
|
Noncontrolling interests
|
|
|
|
|
1.6
|
|
|
2.0
|
|
|
Total shareholders' equity
|
|
|
|
|
1,492.0
|
|
|
1,428.4
|
Total liabilities and shareholders' equity
|
|
|
|
$
|
3,670.4
|
|
$
|
3,601.7
|
ITT INC. AND SUBSIDIARIES
|
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
|
(In millions)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
For the Three Months Ended March 31
|
|
|
|
|
2017
|
|
2016
|
Operating Activities
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
$
|
45.6
|
|
|
$
|
37.3
|
|
Less: Loss from discontinued operations
|
|
|
|
|
|
(0.1
|
)
|
|
|
(0.3
|
)
|
Less: Loss attributable to noncontrolling interests
|
|
|
|
|
|
(0.4
|
)
|
|
|
(0.1
|
)
|
Income from continuing operations attributable to ITT Inc.
|
|
|
|
|
|
46.1
|
|
|
|
37.7
|
|
Adjustments to income from continuing operations:
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
|
24.8
|
|
|
|
25.3
|
|
Stock-based compensation
|
|
|
|
|
|
3.7
|
|
|
|
2.9
|
|
Asbestos-related costs, net
|
|
|
|
|
|
14.9
|
|
|
|
12.8
|
|
Asbestos-related payments, net
|
|
|
|
|
|
(13.0
|
)
|
|
|
(4.3
|
)
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
Change in receivables
|
|
|
|
|
|
(34.7
|
)
|
|
|
(21.0
|
)
|
Change in inventories
|
|
|
|
|
|
(1.6
|
)
|
|
|
(4.0
|
)
|
Change in accounts payable
|
|
|
|
|
|
2.5
|
|
|
|
(14.8
|
)
|
Change in accrued expenses
|
|
|
|
|
|
(3.5
|
)
|
|
|
(28.8
|
)
|
Change in accrued and deferred income taxes
|
|
|
|
|
|
(4.6
|
)
|
|
|
3.4
|
|
Other, net
|
|
|
|
|
|
(7.5
|
)
|
|
|
(3.5
|
)
|
Net Cash - Operating activities
|
|
|
|
|
|
27.1
|
|
|
|
5.7
|
|
Investing Activities
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
|
|
|
(36.7
|
)
|
|
|
(21.0
|
)
|
Acquisitions, net of cash acquired
|
|
|
|
|
|
(113.7
|
)
|
|
|
(0.2
|
)
|
Purchases of investments
|
|
|
|
|
|
-
|
|
|
|
(40.0
|
)
|
Maturities of investments
|
|
|
|
|
|
-
|
|
|
|
36.3
|
|
Other, net
|
|
|
|
|
|
0.3
|
|
|
|
0.1
|
|
Net Cash - Investing activities
|
|
|
|
|
|
(150.1
|
)
|
|
|
(24.8
|
)
|
Financing Activities
|
|
|
|
|
|
|
|
Commercial paper, net borrowings
|
|
|
|
|
|
(1.5
|
)
|
|
|
28.5
|
|
Short-term revolving loans, borrowings
|
|
|
|
|
|
-
|
|
|
|
27.7
|
|
Short-term revolving loans, repayments
|
|
|
|
|
|
-
|
|
|
|
(27.7
|
)
|
Long-term debt, issued
|
|
|
|
|
|
2.1
|
|
|
|
-
|
|
Long-term debt, repayments
|
|
|
|
|
|
(0.3
|
)
|
|
|
(0.3
|
)
|
Repurchase of common stock
|
|
|
|
|
|
(2.3
|
)
|
|
|
(6.9
|
)
|
Proceeds from issuance of common stock
|
|
|
|
|
|
5.9
|
|
|
|
6.1
|
|
Dividends paid
|
|
|
|
|
|
(0.2
|
)
|
|
|
(11.4
|
)
|
Excess tax benefit from equity compensation activity
|
|
|
|
|
|
-
|
|
|
|
3.0
|
|
Other, net
|
|
|
|
|
|
-
|
|
|
|
(2.1
|
)
|
Net Cash - Financing activities
|
|
|
|
|
|
3.7
|
|
|
|
16.9
|
|
Exchange rate effects on cash and cash equivalents
|
|
|
|
|
|
7.9
|
|
|
|
9.9
|
|
Net Cash – Operating activities of discontinued operations
|
|
|
|
|
|
(0.8
|
)
|
|
|
7.5
|
|
Net change in cash and cash equivalents
|
|
|
|
|
|
(112.2
|
)
|
|
|
15.2
|
|
Cash and cash equivalents - beginning of year
|
|
|
|
|
|
460.7
|
|
|
|
415.7
|
|
Cash and cash equivalents - end of period
|
|
|
|
|
$
|
348.5
|
|
|
$
|
430.9
|
|
Key Performance Indicators and Non-GAAP Measures
|
|
Management reviews a variety of key performance indicators including
revenue, segment operating income and margins, earnings per share,
order growth, and backlog, some of which are non-GAAP. In addition,
we consider certain measures to be useful to management and
investors when evaluating our operating performance for the periods
presented. These measures provide a tool for evaluating our ongoing
operations and management of assets from period to period. This
information can assist investors in assessing our financial
performance and measures our ability to generate capital for
deployment among competing strategic alternatives and initiatives,
including, but not limited to, acquisitions, dividends and share
repurchases.
|
These metrics, however, are not measures of financial performance
under accounting principles generally accepted in the United States
of America (GAAP) and should not be considered a substitute for
measures determined in accordance with GAAP. We consider the
following non-GAAP measures, which may not be comparable to
similarly titled measures reported by other companies, to be key
performance indicators for purposes of our reconciliation tables.
|
|
Organic Revenues and Organic Orders are defined as
revenues and orders, excluding the impacts of foreign currency
fluctuations, acquisitions and divestitures. Divestitures include
sales of portions of our business that did not meet the criteria for
presentation as a discontinued operation. The period-over-period
change resulting from foreign currency fluctuations is estimated
using a fixed exchange rate for both the current and prior periods.
Management believes that reporting organic revenue and organic
orders provides useful information to investors by helping identify
underlying trends in our business and facilitating easier
comparisons of our revenue performance with prior and future periods
and to our peers.
|
|
Adjusted Operating Income, Adjusted Segment Operating Income and
Adjusted Segment Operating Margin are defined as total
operating income and segment operating income, adjusted to exclude
special items that include, but are not limited to, asbestos-related
costs, restructuring costs, realignment costs, certain asset
impairment charges, certain acquisitions-related expenses, and other
unusual or infrequent operating items. Special items represent
significant charges or credits that impact the current results,
which management views as unrelated to the Company's ongoing
operations and performance. Adjusted segment operating margin is
defined as adjusted segment operating income divided by total
revenue. We believe that adjusted segment operating income is useful
to investors and other users of our financial statements in
evaluating ongoing operating profitability, as well as in evaluating
operating performance in relation to our competitors.
|
|
Adjusted Income from Continuing Operations, Adjusted EPS and
Adjusted EPS Guidance are defined as income from continuing
operations attributable to ITT Inc. and income from continuing
operations attributable to ITT Inc. per diluted share, adjusted to
exclude special items that include, but are not limited to,
asbestos-related costs, restructuring costs, realignment costs,
certain asset impairment charges, certain acquisition-related
expenses, income tax settlements or adjustments, and other unusual
and infrequent non-operating items. Special items represent
significant charges or credits, on an after-tax basis, that impact
current results, which management views as unrelated to the
Company's ongoing operations and performance. We believe that
adjusted income from continuing operations is useful to investors
and other users of our financial statements in evaluating ongoing
operating profitability, as well as in evaluating operating
performance in relation to our competitors.
|
|
Adjusted Free Cash Flow is defined as net cash provided by
operating activities less capital expenditures, adjusted for cash
payments for restructuring costs, realignment actions, net asbestos
cash flows and other significant items that impact current results
which management views as unrelated to the Company's ongoing
operations and performance. Due to other financial obligations and
commitments, including asbestos, the entire free cash flow may not
be available for discretionary purposes. We believe that adjusted
free cash flow provides useful information to investors as it
provides insight into the primary cash flow metric used by
management to monitor and evaluate cash flows generated by our
operations.
|
ITT Inc. Non-GAAP Reconciliation
|
Reported vs. Organic Revenue / Order Growth
|
First Quarter 2017 & 2016
|
(In Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(As Reported - GAAP)
|
|
(As Adjusted - Organic)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(A)
|
|
(B)
|
|
|
|
(C)
|
|
(D)
|
|
(E) = B-C-D
|
|
(F) = E / A
|
|
|
|
|
|
|
|
|
|
Change
|
|
% Change
|
|
Acquisition / Divestitures
|
|
FX Impact
|
|
Change
|
|
% Change
|
|
|
|
|
|
3M 2017
|
|
3M 2016
|
|
2017 vs. 2016
|
|
2017 vs. 2016
|
|
3M 2017
|
|
3M 2017
|
|
|
Adj. 2017 vs. 2016
|
|
Adj. 2017 vs. 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ITT Inc. - Consolidated
|
|
|
|
|
625.8
|
|
609.1
|
|
16.7
|
|
|
2.7
|
%
|
|
14.0
|
|
(9.1
|
)
|
|
11.8
|
|
|
1.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industrial Process
|
|
|
|
|
186.1
|
|
208.8
|
|
(22.7
|
)
|
|
(10.9
|
%)
|
|
-
|
|
-
|
|
|
(22.7
|
)
|
|
(10.9
|
%)
|
Motion Technologies
|
|
|
|
|
287.3
|
|
257.0
|
|
30.3
|
|
|
11.8
|
%
|
|
14.0
|
|
(8.4
|
)
|
|
24.7
|
|
|
9.6
|
%
|
Connect & Control Technologies
|
|
|
|
|
153.3
|
|
144.3
|
|
9.0
|
|
|
6.2
|
%
|
|
-
|
|
(0.8
|
)
|
|
9.8
|
|
|
6.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Orders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Segment Orders
|
|
|
|
|
670.6
|
|
623.5
|
|
47.1
|
|
|
7.6
|
%
|
|
12.3
|
|
(8.9
|
)
|
|
43.7
|
|
|
7.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industrial Process
|
|
|
|
|
221.8
|
|
188.8
|
|
33.0
|
|
|
17.5
|
%
|
|
-
|
|
0.1
|
|
|
32.9
|
|
|
17.4
|
%
|
Motion Technologies
|
|
|
|
|
287.2
|
|
265.4
|
|
21.8
|
|
|
8.2
|
%
|
|
12.3
|
|
(8.2
|
)
|
|
17.7
|
|
|
6.7
|
%
|
Connect & Control Technologies
|
|
|
|
|
162.4
|
|
170.5
|
|
(8.1
|
)
|
|
(4.8
|
%)
|
|
-
|
|
(0.8
|
)
|
|
(7.3
|
)
|
|
(4.3
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Excludes intercompany eliminations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Immaterial differences due to rounding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ITT Inc. Non-GAAP Reconciliation
|
Reported vs Adjusted Segment Operating Income & Operating Margin
|
First Quarter 2017 & 2016
|
(In Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3M 2017
|
|
3M 2017
|
|
3M 2017
|
|
3M 2016
|
|
3M 2016
|
|
3M 2016
|
|
% Change
|
|
% Change
|
|
As Reported
|
|
Special Items
|
|
As Adjusted
|
|
As Reported
|
|
Special Items
|
|
As Adjusted
|
|
As Reported 2017 vs. 2016
|
|
As Adjusted 2017 vs. 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industrial Process
|
186.1
|
|
|
|
|
186.1
|
|
208.8
|
|
|
|
|
|
208.8
|
|
|
(10.9%)
|
|
|
(10.9%)
|
|
Motion Technologies
|
287.3
|
|
|
|
|
287.3
|
|
257.0
|
|
|
|
|
|
257.0
|
|
|
11.8%
|
|
|
11.8%
|
|
Connect & Control Technologies
|
153.3
|
|
|
|
|
153.3
|
|
144.3
|
|
|
|
|
|
144.3
|
|
|
6.2%
|
|
|
6.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intersegment eliminations
|
(0.9)
|
|
|
|
|
(0.9)
|
|
(1.0)
|
|
|
|
|
|
(1.0)
|
|
|
|
|
|
|
|
Total Revenue
|
625.8
|
|
|
|
|
625.8
|
|
609.1
|
|
|
|
|
|
609.1
|
|
|
2.7%
|
|
|
2.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industrial Process
|
3.9%
|
|
150
|
BP
|
|
5.4%
|
|
4.3%
|
|
|
150
|
BP
|
|
5.8%
|
|
|
(40)
|
BP
|
|
(40)
|
BP
|
Motion Technologies
|
19.1%
|
|
30
|
BP
|
|
19.4%
|
|
19.7%
|
|
|
100
|
BP
|
|
20.7%
|
|
|
(60)
|
BP
|
|
(130)
|
BP
|
Connect & Control Technologies
|
10.6%
|
|
110
|
BP
|
|
11.7%
|
|
8.6%
|
|
|
230
|
BP
|
|
10.9%
|
|
|
200
|
BP
|
|
80
|
BP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating Segments
|
12.5%
|
|
90
|
BP
|
|
13.4%
|
|
11.8%
|
|
|
150
|
BP
|
|
13.3%
|
|
|
70
|
BP
|
|
10
|
BP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industrial Process
|
7.3
|
|
2.7
|
|
|
10.0
|
|
9.0
|
|
|
3.2
|
|
|
12.2
|
|
|
(18.9%)
|
|
|
(18.0%)
|
|
Motion Technologies
|
54.9
|
|
0.9
|
|
|
55.8
|
|
50.7
|
|
|
2.4
|
|
|
53.1
|
|
|
8.3%
|
|
|
5.1%
|
|
Connect & Control Technologies
|
16.3
|
|
1.6
|
|
|
17.9
|
|
12.4
|
|
|
3.3
|
|
|
15.7
|
|
|
31.5%
|
|
|
14.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Segment Operating Income
|
78.5
|
|
5.2
|
|
|
83.7
|
|
72.1
|
|
|
8.9
|
|
|
81.0
|
|
|
8.9%
|
|
|
3.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Immaterial differences due to rounding.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Special items include, but are not limited to, restructuring and
realignment costs, certain asset impairment charges,
acquisition-related expenses,
|
|
|
|
and other unusual or infrequent operating items.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ITT Inc. Non-GAAP Reconciliation
|
Reported vs. Adjusted Income from Continuing Operations &
Adjusted EPS
|
First Quarter 2017 & 2016
|
(In Millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent Change
|
|
Q1 2017
|
|
Non-GAAP
|
|
Q1 2017
|
|
Q1 2016
|
|
Non-GAAP
|
|
Q1 2016
|
|
2017 vs. 2016
|
|
2017 vs. 2016
|
|
As Reported
|
|
Adjustments
|
|
As Adjusted
|
|
As Reported
|
|
Adjustments
|
|
As Adjusted
|
|
As Adjusted
|
|
As Adjusted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Operating Income
|
78.5
|
|
|
|
5.2
|
|
#A
|
|
83.7
|
|
|
|
72.1
|
|
|
|
8.9
|
|
#A
|
|
81.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate (Expense)
|
(22.9
|
)
|
|
|
17.6
|
|
#B
|
|
(5.3
|
)
|
|
|
(21.1
|
)
|
|
|
12.7
|
|
#B
|
|
(8.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income
|
55.6
|
|
|
|
22.8
|
|
|
|
78.4
|
|
|
|
51.0
|
|
|
|
21.6
|
|
|
|
72.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Income (Expense)
|
(0.4
|
)
|
|
|
-
|
|
|
|
(0.4
|
)
|
|
|
(1.1
|
)
|
|
|
-
|
|
|
|
(1.1
|
)
|
|
|
|
|
|
|
Other Income (Expense)
|
(0.4
|
)
|
|
|
-
|
|
|
|
(0.4
|
)
|
|
|
(0.6
|
)
|
|
|
-
|
|
|
|
(0.6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from Continuing Operations before Tax
|
54.8
|
|
|
|
22.8
|
|
|
|
77.6
|
|
|
|
49.3
|
|
|
|
21.6
|
|
|
|
70.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax (Expense)
|
(9.1
|
)
|
|
|
(11.5
|
)
|
#C
|
|
(20.6
|
)
|
|
|
(11.7
|
)
|
|
|
(6.0
|
)
|
#C
|
|
(17.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from Continuing Operations
|
45.7
|
|
|
|
11.3
|
|
|
|
57.0
|
|
|
|
37.6
|
|
|
|
15.6
|
|
|
|
53.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Non Controlling Interest
|
(0.4
|
)
|
|
|
-
|
|
|
|
(0.4
|
)
|
|
|
(0.1
|
)
|
|
|
-
|
|
|
|
(0.1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from Continuing Operations - ITT Inc.
|
46.1
|
|
|
|
11.3
|
|
|
|
57.4
|
|
|
|
37.7
|
|
|
|
15.6
|
|
|
|
53.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EPS from Continuing Operations
|
0.52
|
|
|
|
0.12
|
|
|
|
0.64
|
|
|
|
0.42
|
|
|
|
0.17
|
|
|
|
0.59
|
|
|
|
0.05
|
|
|
8.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Amounts may not calculate due to rounding.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
#A - 2017 includes restructuring and realignment costs ($4.5M) and
acquisition related costs of ($0.7M).
|
|
|
|
|
|
|
|
|
|
#A - 2016 includes restructuring and realignment costs ($6.5M) and
acquisition related costs of ($2.4M).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
#B - 2017 includes restructuring costs ($0.6M), certain costs
associated primarily with sale of excess property ($2.1M), asbestos
related expense ($14.9M).
|
#B - 2016 includes asbestos related expense and other costs ($12.7M).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
#C - 2017 includes various tax-related special items including tax
benefit on excess stock based compensation of ($1.1M), tax benefit
for tax rate changes ($1.3M), and the tax impact of other operating
special items.
|
#C - 2016 includes various tax-related special items including tax
on deemed distribution of foreign earnings of ($1.0M), in addition
to the tax impact of other operating special items.
|
ITT Inc. Non-GAAP Reconciliation
|
Net Cash - Operating Activities vs. Adjusted Free Cash Flow
Conversion
|
First Quarter 2017 & 2016
|
(In Millions)
|
|
|
|
|
|
|
|
|
|
|
|
3M 2017
|
|
3M 2016
|
|
|
|
|
|
|
|
|
Net Cash - Operating Activities
|
|
|
27.1
|
|
|
5.7
|
|
|
|
|
|
|
|
|
|
Capital Expenditures
|
|
|
36.7
|
|
|
21.0
|
|
|
|
|
|
|
|
|
|
Free Cash Flow
|
|
|
(9.6
|
)
|
|
(15.3
|
)
|
|
|
|
|
|
|
|
|
Realignment Related Cash Payments, including Capex
|
|
|
4.5
|
|
|
-
|
|
|
Restructuring Cash Payments
|
|
|
5.4
|
|
|
6.5
|
|
|
Asbestos Cash Payments, net
|
|
|
13.0
|
|
|
4.3
|
|
|
Adjusted Free Cash Flow
|
|
|
13.3
|
|
|
(4.5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from Continuing Operations - ITT Inc.
|
|
|
46.1
|
|
|
37.7
|
|
|
|
|
|
|
|
|
|
Special Items
|
|
|
11.3
|
|
|
15.6
|
|
|
|
|
|
|
|
|
|
Income from Continuing Operations - ITT Inc., Excluding
|
|
|
|
|
|
|
Special Items
|
|
|
57.4
|
|
|
53.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Free Cash Flow Conversion
|
|
|
23.2
|
%
|
|
NA
|
ITT Inc. Non-GAAP Reconciliation
|
GAAP vs. Adjusted EPS Guidance
|
Full Year 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017 Full-Year Guidance
|
|
|
|
|
Low
|
|
High
|
|
|
|
|
|
|
|
EPS from Continuing Operations - GAAP
|
|
|
|
$
|
1.52
|
|
|
$
|
1.78
|
|
|
|
|
|
|
|
|
Estimated Asbestos Related Costs, Net of Tax
|
|
|
|
|
0.42
|
|
|
|
0.42
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1.94
|
|
|
$
|
2.20
|
|
|
|
|
|
|
|
|
Estimated Restructuring, Realignment and Other Costs, Net of Tax
|
|
|
|
|
0.28
|
|
|
|
0.24
|
|
|
|
|
|
|
|
|
Acquisition Related Costs, Net of Tax
|
|
|
|
|
0.10
|
|
|
|
0.08
|
|
|
|
|
|
|
|
|
Other Special Tax Items
|
|
|
|
|
(0.04
|
)
|
|
|
(0.04
|
)
|
|
|
|
|
|
|
|
EPS from Continuing Operations - Adjusted
|
|
|
|
$
|
2.28
|
|
|
$
|
2.48
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20170508005248/en/
Copyright Business Wire 2017