Veralto Reports Third Quarter 2024 Results
WALTHAM, Mass., Oct. 23, 2024 /PRNewswire/ -- Veralto (NYSE:VLTO) (the "Company"), a global leader in essential water and product quality solutions dedicated to Safeguarding the World's Most Vital Resources™ announced results for the third quarter ended September 27, 2024.
Key Third Quarter 2024 Results
Sales increased 4.7% year-over-year to $1,314 million, with non-GAAP core sales growth of 4.6%
Operating profit margin was 23.4% and non-GAAP adjusted operating profit margin was 24.1%
Net earnings were $219 million, or $0.88 per diluted common share
Non-GAAP, adjusted net earnings were $223 million, or $0.89 per diluted common share
Operating cash flow was $224 million and non-GAAP free cash flow was $215 million
"Our teams across the world executed well and delivered another quarter of strong performance with mid-single digit core sales growth, robust margin expansion and strong cash generation. These results once again demonstrate the durability of our businesses, underpinned by global demand for clean water, safe food and trusted essential goods," said Jennifer L. Honeycutt, President and Chief Executive Officer. "The growth in Q3 was broad-based across key end markets and regions, highlighted by continued strong demand for industrial water treatment in North America and gradual recovery across consumer-packaged goods markets globally."
"Our culture of continuous improvement, powered by the Veralto Enterprise System, has fortified our growth and strengthened our execution this year, while also enabling increased investments in sales, marketing and innovation to create future value."
"Following our strong third quarter performance, we acquired TraceGains, a complementary addition to our packaging and color solutions. TraceGains expands our ability to provide greater value to consumer brands by helping them digitize critical workflows and accelerate time-to-market. Its recurring revenue, robust core sales growth, and attractive gross margins strengthen the financial profile of our PQI segment. Moreover, TraceGains' focus on increasing food safety is squarely aligned with our purpose -- Safeguarding the World's Most Vital Resources™," concluded Honeycutt.
2024 Guidance
The Company provides forecasted sales only on a non-GAAP basis because of the difficulty in estimating the other components of GAAP sales, such as currency translation, acquisitions, and divestitures.
For the fourth quarter of 2024, Veralto anticipates non-GAAP core sales growth in the low-to-mid single-digits year-over-year with adjusted operating profit margin of approximately 24.0% and adjusted diluted earnings per share in the range of $0.86 to $0.90 per share.
For the full year 2024, the Company expects core sales growth in the low single-digits with adjusted operating profit margin expansion of approximately 75 basis points. The Company raised its full year guidance for adjusted diluted earnings per share to a range of $3.44 to $3.48, up from its prior guidance of $3.37 to $3.45 per share. Free cash flow conversion guidance was maintained at a range of 100% to 110%.
Conference Call and Webcast Information
Veralto will discuss its third quarter results and updated financial guidance for 2024 during its quarterly investor conference call tomorrow starting at 8:30 a.m. (ET). Access to the call, webcast and an accompanying slide presentation will be available on the "Investors" section of Veralto's website, www.veralto.com, under the subheading "News & Events" and additional materials will be posted to the same section of Veralto's website. A replay of the webcast will be available in the same section of Veralto's website shortly after the conclusion of the call and will remain available until the next quarterly earnings call.
The conference call can be accessed by dialing +1 (800) 274-8461 (U.S.) or +1 (203) 518-9843 (INTL) (Conference ID: VLTO3Q24). A replay of the conference call will be available shortly after the conclusion of the call and until November 9, 2024. You can access the replay dial-in information on the "Investors" section of Veralto's website under the subheading "News & Events."
ABOUT VERALTO
With annual sales of $5 billion, Veralto is a global leader in essential technology solutions with a proven track record of solving some of the most complex challenges we face as a society. Our industry-leading companies with globally recognized brands are building on a long-established legacy of innovation and customer trust to create a safer, cleaner, more vibrant future. Headquartered in Waltham, Massachusetts, our global team of 16,000 associates is committed to making an enduring positive impact on our world and united by a powerful purpose: Safeguarding the World's Most Vital Resources™.
NON-GAAP MEASURES AND SUPPLEMENTAL MATERIALS
In addition to the financial measures prepared in accordance with generally accepted accounting principles (GAAP), this earnings release also contains non-GAAP financial measures. Calculations of these measures, the reasons why we believe these measures provide useful information to investors, a reconciliation of these measures to the most directly comparable GAAP measures, as applicable, and other information relating to these non-GAAP measures are included in the supplemental reconciliation schedule attached.
In addition, this earnings release, the slide presentation accompanying the related earnings call, non-GAAP reconciliations and a note containing details of historical and anticipated, future financial performance have been posted to the "Investors" section of Veralto's website (www.veralto.com) under the subheading "Quarterly Earnings."
FORWARD-LOOKING STATEMENTS
Certain statements in this release, including the statement regarding the Company's anticipated fourth quarter and full year 2024 financial performance, the Company's differentiation and positioning to continue delivering sustainable, long-term shareholder value and any other statements regarding events or developments that we believe or anticipate will or may occur in the future are "forward-looking" statements within the meaning of the federal securities laws. All statements other than historical factual information are forward-looking statements, including, without limitation, statements regarding: projections of revenue, expenses, profit, profit margins, tax rates, tax provisions, cash flows, pension and benefit obligations and funding requirements, Veralto's liquidity position or other financial measures; Veralto's management's plans and strategies for future operations, including statements relating to anticipated operating performance, cost reductions, restructuring activities, new product and service developments, competitive strengths or market position, acquisitions and the integration thereof, divestitures, spin-offs, split-offs or other distributions, strategic opportunities, securities offerings, stock repurchases, dividends and executive compensation; the effects of the separation or the distribution on Veralto's business; growth, declines and other trends in markets Veralto sells into; new or modified laws, regulations and accounting pronouncements; future regulatory approvals and the timing thereof; outstanding claims, legal proceedings, tax audits and assessments and other contingent liabilities; future foreign currency exchange rates and fluctuations in those rates; general economic and capital markets conditions; the anticipated timing of any of the foregoing; assumptions underlying any of the foregoing; and any other statements that address events or developments that Veralto intends or believes will or may occur in the future. Additional information regarding the factors that may cause actual results to differ materially from these forward-looking statements is available in our SEC filings, including our 2023 Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. These forward-looking statements speak only as of the date of this release and except to the extent required by applicable law, the Company does not assume any obligation to update or revise any forward-looking statement, whether as a result of new information, future events and developments or otherwise.
VERALTO CORPORATION
CONSOLIDATED AND COMBINED CONDENSED STATEMENTS OF EARNINGS
($ and shares in millions, except per share amounts)
(unaudited)
Three-Month Period Ended
Nine-Month Period Ended
September 27, 2024
September 29, 2023
September 27, 2024
September 29, 2023
Sales
$ 1,314
$ 1,255
$ 3,848
$ 3,733
Cost of sales
(531)
(532)
(1,544)
(1,578)
Gross profit
783
723
2,304
2,155
Operating costs:
Selling, general and administrative expenses
(412)
(395)
(1,220)
(1,133)
Research and development expenses
(63)
(55)
(184)
(168)
Operating profit
308
273
900
854
Nonoperating income (expense):
Other income (expense), net
5
—
(9)
(14)
Interest expense, net
(27)
(5)
(85)
(5)
Earnings before income taxes
286
268
806
835
Income taxes
(67)
(63)
(200)
(196)
Net earnings
$ 219
$ 205
$ 606
$ 639
Net earnings per common share:
