BRAINTREE, Mass., Feb. 13, 2020 (GLOBE NEWSWIRE) -- Altra Industrial Motion Corp. (Nasdaq: AIMC), a leading global manufacturer and supplier of motion control, power transmission and automation products, today announced unaudited financial results for the fourth quarter ended December 31, 2019. Except where otherwise noted, financial results for the fourth quarter of 2019 and 2018 as well as full year 2019 include the Automation and & Specialty (A&S) business. Full year 2018 results only include financial results of the A&S business for the period from October 1, 2018 to December 31, 2018.

Financial Highlights

• Fourth-quarter 2019 net sales were $441.9 million compared with $469.2 million in the fourth quarter of 2018. Fiscal year 2019 net sales were $1.834 billion, at the high end of the Company’s previously provided guidance range. Fourth-quarter 2019 organic sales were down 4.8% for the combined business compared with the fourth quarter of 2018. Excluding the impact of foreign currency translation, Power Transmission Technologies (PTT) segment sales were down 3.1% and Automation & Specialty (A&S) segment sales were down 6.5% compared with the prior year.*
• Fourth-quarter net income was $37.3 million, or $0.58 per diluted share, compared with a loss of $5.0 million, or a loss of $0.08 per diluted share, in the fourth quarter of 2018. Non-GAAP net income in the fourth quarter of 2019 was $42.7 million, or $0.66 per diluted share. This is compared with non-GAAP net income of $42.0 million, or $0.65 per diluted share, in the fourth quarter of 2018. Fiscal year 2019 net income was $127.2 million, or $1.97 per diluted share and non-GAAP net income was $184.3 million, or $2.86 per diluted share.*
• Non-GAAP adjusted EBITDA in the fourth quarter of 2019 was $89.4 million, or 20.2% of net sales, compared with $95.2 million, or 20.3% of net sales, in the fourth quarter of 2018.*
• Operating income margin in the fourth quarter of 2019 was 11.8% compared with 3.9% in the fourth quarter of 2018. Non-GAAP operating income margin in the fourth quarter of 2019 was 16.4%, compared with 16.8% in the fourth quarter of 2018.*
• Cash flow from operations for the fourth quarter of 2019 of $73.0 million led to free cash flow of $58.2 million in the fourth quarter of 2019, compared with free cash flow of $40.9 million in the fourth quarter of 2018.* For the fiscal year 2019 the Company generated a record $201.7 million of free cash flow.*
• $40.0 million of debt was paid down in the fourth quarter of 2019, bringing total debt pay down to $130.0 million in 2019 and $150.0 million since the closing of the A&S merger on October 1, 2018.

Strategic Highlights

• Delivered $15.0 million of synergies in 2019 and remain on track to deliver a total of $52.0 million of synergies by year four following the acquisition of the A&S business.
• Advanced strategic priority to expediently de-lever company with the pay down of $130 million of debt in 2019 and $150 million since closing of the A&S merger. Leverage at the end of 2019 was 3.8x net debt to Non-GAAP adjusted EBITDA on an unaudited proforma basis.*
• Successfully completed 3 facility consolidations in 2019 with 2 additional consolidations underway
• Continued progress with integration of world-class business systems across the organization.

Management Comments

“2019 was a pivotal year for Altra as we solidified our foundation as a premier industrial company and executed on our strategic priorities to integrate the Altra and A&S businesses, de-lever our balance sheet, and capture cost savings and synergies,” said Carl Christenson, Altra’s Chairman and Chief Executive Officer.

“Against the backdrop of a difficult market environment our team continued to execute extremely well. Our fourth-quarter performance was highlighted by exceptional operating results and strong working capital, which helped deliver $58.2 million of free cash flow in the fourth quarter of 2019. In addition, by leveraging the benefits of our cost actions and synergies we achieved year-over-year earnings growth despite pressure on the topline.”*

“Looking ahead, cost containment and de-levering the balance sheet with strong cash flow remain a top priority. We have done an excellent job of delivering on cost synergies and are starting to move our focus to capturing sales synergies in support of our efforts to accelerate organic topline growth. We are excited by the opportunity we have to continue to implement a best-in-class business system across the organization and are confident that the work we are doing to drive cost out of the business and manage the balance sheet positions Altra to have very strong operating leverage when the market turns.” concluded Christenson.

Business Outlook

While we see ongoing strength in some end markets and are encouraged by recent trade-related developments, several of the markets we serve remain under pressure and the cadence of the global industrial economic recovery remains uncertain and will take time to flow through. We expect tougher sales comparatives in the first half of the year. Our guidance below reflects the fact that we continue to expect exchange rate headwinds into 2020. The guidance includes our best estimate of the revenue impact related to the coronavirus. We estimate that impact to be between $10 and $50 million. We recognize that the situation is fluid and as a result it is very difficult to predict when our factories, suppliers, and customers will be fully operational again.

Altra is providing guidance for full year 2020 as follows:

• Full-year 2020 sales in the range of $1,720 - $1,770 million.
• GAAP diluted EPS in the range of $1.53 to $1.67.
• Non-GAAP diluted EPS in the range of $2.40 to $2.60.*
• Non-GAAP adjusted EBITDA in the range of $340 to $360 million.*
• Tax rate for the full year is expected to be approximately 22% to 24% before discrete items, capital expenditures in the range of $45 to $50 million, and depreciation and amortization in the range of $125 to $132 million.
• Expect to exit 2020 with leverage of 3.5x to 3.7x and pay down up to $150 million of debt.

About Altra Industrial Motion Corp.

Altra Industrial Motion Corp. is a premier industrial, global manufacturer and supplier of electromechanical power transmission, motion control and automation products, including highly engineered power transmission, motion control and engine braking systems and components. Altra's portfolio consists of 27 well-respected brands including Bauer Gear Motor, Boston Gear, Jacobs Vehicle Systems, Kollmorgen, Portescap, Stromag, Svendborg Brakes, TB Wood's, Thomson and Warner Electric. Headquartered in Braintree, Massachusetts, Altra has approximately 9,200 employees and over 50 production facilities in 16 countries around the world.