ESAB (ESAB) - 2024 Q4 - Annual Results

Financial Performance - ESAB reported fourth quarter sales of $671 million, a decrease of 3$72 million, or $1.18 diluted earnings per share, with core adjusted net income of$79 million, or $1.28 diluted earnings per share[3]. - Core adjusted EBITDA for the fourth quarter was$129 million, representing a 2% increase and a margin expansion of 90 basis points to 20.3%[3]. - The company achieved high-single-digit growth in welding equipment during the quarter, contributing to overall performance[9]. - ESAB's operating income for the fourth quarter was $111 million, compared to$103.7 million in the prior year[24]. - The company reported a net income attributable to ESAB Corporation of $53.7 million for the fourth quarter, up from$50.2 million year-over-year[24]. - Net income from continuing operations (GAAP) for Q4 2024 was $73.6 million, up from$59.6 million in Q4 2023, representing a 23.5% increase[26]. - Adjusted net income from continuing operations (non-GAAP) for Q4 2024 was $80.1 million, compared to$70.8 million in Q4 2023, reflecting a 17.5% growth[26]. - Adjusted EBITDA for Q4 2024 reached $131.2 million, an increase from$128.5 million in Q4 2023, indicating a 2.1% rise[28]. - Adjusted EBITDA margin (non-GAAP) for Q4 2024 was 19.6%, compared to 18.6% in Q4 2023, showing an improvement of 1.0 percentage points[28]. - Core adjusted net income per share (non-GAAP) for Q4 2024 was $1.28, up from$1.13 in Q4 2023, marking a 13.3% increase[30]. - Total net income from continuing operations for the year ended December 31, 2024, was $293.1 million, compared to$223.4 million in 2023, a significant increase of 31.2%[26]. - Adjusted net income margin from continuing operations for the year 2024 was 11.8%, up from 10.3% in 2023, reflecting a 1.5 percentage point improvement[26]. - Net income for the year ended December 31, 2024, increased to $270,748, up from$211,024 in 2023, representing a growth of approximately 28%[49]. Future Projections - The company expects core organic growth of 0.0% to 2.0% and total core sales growth of (2.0)% to 0.0% in 2025, impacted by approximately (3.5)% currency headwinds[5]. - ESAB anticipates core adjusted EBITDA of $515 million to$530 million and core adjusted EPS of $5.10 to$5.25 for the full year 2025[5]. - The company expects 2025 core net sales growth to range from -2.0% to 0.0%, with organic growth projected at 0.0% to 2.0% and acquisitions contributing approximately 1.5%[42]. - The company's core adjusted EBITDA for 2024 is projected to be $510.7 million, with a range of$515 million to $530 million for 2025[42]. Acquisitions and Investments - The acquisition of SUMIG, a South American light automation and equipment business, was completed in Q4 2024 to enhance global market opportunities[6]. - ESAB signed an agreement to acquire Bavaria Schweisstechnik GmbH, a European business, expected to close in 2025, which will strengthen its consumables portfolio[7]. - The company reported a significant increase in acquisitions, net of cash received, totaling$153,664, compared to $18,665 in 2023[49]. Cash Flow and Assets - Adjusted free cash flow for the year ended December 31, 2023, was$320.5 million, compared to $304.5 million for the previous year[40]. - Cash and cash equivalents increased to$249.4 million as of December 31, 2024, compared to $102.0 million as of December 31, 2023[45]. - Total assets grew to$4,033.975 million as of December 31, 2024, up from $3,828.629 million as of December 31, 2023[45]. - The company reported a decrease in retained earnings to$597.2 million as of December 31, 2024, compared to $350.6 million as of December 31, 2023[45]. - Net cash provided by operating activities rose to$355,399, compared to $330,494 in the previous year, indicating an increase of about 7.5$205,696, compared to $62,243 in the prior year, indicating a significant increase in investment outflows[49]. Currency Impact and Sales - The impact of foreign currency translation resulted in a decline of$89.7 million (3.2%) in total sales for the year ended December 31, 2023[37]. - For the three months ended December 31, 2023, total sales declined by $18.6 million, or 2.7$25.2 million (8.2%) and EMEA & APAC sales increasing by $6.6 million (1.7$2,774.8 million, reflecting a decline of $34.0 million (1.2$38.3 million (3.1%) and EMEA & APAC sales increasing by $4.3 million (0.3$1.7 million, down from $6.4 million in Q4 2023, showing a reduction of 73.4$12.2 million for the year ended December 31, 2024, compared to no loss reported in 2023[26]. - Depreciation, amortization, and other impairment charges were reported at $66,790, down from$75,034 in the previous year, indicating a decrease of about 11%[49]. - Stock-based compensation expense increased to $19,780 from$16,122, representing a rise of approximately 22%[49]. Dividends and Borrowings - The company paid dividends totaling $16,992, an increase from$13,342 in the previous year, reflecting a growth of approximately 27%[49]. - Proceeds from borrowings on Senior Notes amounted to $700,000, with additional borrowings on revolving credit facilities totaling$205,000[49]. - The effect of foreign exchange rates on cash and cash equivalents resulted in a decrease of $34,017, compared to a decrease of$18,555 in 2023[49].