Adient(ADNT)2024-08-06 20:17Financial Performance - Adient recorded net sales of $3,716 million for Q3 2024, a decrease of $339 million or 8.4% compared to Q3 2023, primarily due to lower production volumes and unfavorable currency impacts[137]. - Gross profit for Q3 2024 was $207 million, representing 5.6% of net sales, down from $302 million or 7.4% in Q3 2023, attributed to lower production volumes and unfavorable material economics[138]. - Net loss attributable to Adient was $11 million in Q3 2024, compared to a net income of $73 million in Q3 2023, driven by lower production volumes and higher restructuring costs[139]. - Adient's net sales for the first nine months of fiscal 2024 decreased by $540 million or 5% compared to the same period in fiscal 2023, largely due to production disruptions and softening demand[142]. - Comprehensive loss attributable to Adient was $78 million for Q3 2024, a decrease of $84 million compared to a comprehensive income of $6 million in Q3 2023[160]. - For the first nine months of fiscal 2024, comprehensive loss was $88 million, down $249 million from a comprehensive income of $161 million in the same period of fiscal 2023[161]. - Net sales for the first nine months of fiscal 2024 were $11,126 million, down 6% from $11,666 million in the same period of fiscal 2023[170]. - Net loss attributable to Adient was $61 million for the first nine months of FY2024, compared to net income of $70 million for the same period in FY2023[159]. Segment Performance - Global light vehicle production increased by 0.5% to 22.1 million units in Q3 2024, with North America showing a 2.4% increase, while South America experienced a decline of 12.5%[136]. - The EMEA segment faced persistent operational challenges, contributing to a 4.3% decline in vehicle production in that region[135]. - EMEA segment net sales decreased by 10% in Q3 2024 to $1,288 million, down from $1,438 million in Q3 2023[174]. - Adjusted EBITDA for the EMEA segment in Q3 2024 was $25 million, a decline of 76% from $103 million in Q3 2023[174]. Costs and Expenses - Restructuring and impairment costs rose significantly to $16 million in Q3 2024, compared to $6 million in Q3 2023, indicating increased operational challenges[140]. - Cost of sales decreased by $244 million, or 7%, and gross profit decreased by $95 million, or 31%, in Q3 FY2024 compared to Q3 FY2023[143]. - SG&A expenses decreased by $27 million, or 18%, in Q3 FY2024 compared to Q3 FY2023, primarily due to lower net engineering and administrative spending[145]. - Restructuring and impairment costs increased by $10 million in Q3 FY2024 and by $122 million in the first nine months of FY2024 due to restructuring actions in EMEA[147]. - Cost of sales decreased by $440 million, or 4%, and gross profit decreased by $100 million, or 13%, in the first nine months of FY2024 compared to the same period in FY2023[144]. - SG&A for the first nine months of FY2024 decreased by $44 million, or 10%, compared to the first nine months of FY2023[146]. Cash Flow and Financing - Cash provided by operating activities decreased to $280 million in the first nine months of fiscal 2024, down from $373 million in the prior year[189]. - Adient incurred $152 million in restructuring costs during the first nine months of fiscal 2024, with expected annual operating cost reductions of approximately $100 million upon completion of the 2024 Plan[192][193]. - As of June 30, 2024, Adient had $923 million available under its asset-based revolving credit facility[183]. - The Term Loan B Agreement had an outstanding balance of $633 million as of June 30, 2024, with a maturity extended to January 31, 2031[184]. Market Conditions - The automotive industry is experiencing softening consumer demand and lower vehicle production, impacting Adient's financial results[164]. - The automotive industry has faced significant volatility in commodity costs, including steel and petrochemical prices, which may continue to impact Adient's input costs[197]. - Adient has historically managed to offset inflation effects through operating efficiencies, despite experiencing moderate cost increases[197]. Monitoring and Risk - The company is closely monitoring the financial results of its EMEA segment for potential implications on long-lived asset recoverability[134]. - Adient is closely monitoring the EMEA segment for potential impairment of long-lived assets, including goodwill, due to unfavorable trends[164]. - As of June 30, 2024, there have been no material changes to Adient's critical accounting estimates and policies since the fiscal year ended September 30, 2023[198]. - Adient has not experienced adverse changes in market risk exposures that materially affected its disclosures as of June 30, 2024[200].