Curated by THEOUTPOST
On Wed, 24 Jul, 4:03 PM UTC
4 Sources
[1]
Teledyne Technologies Reports Second Quarter Results
Stock repurchases expected to continue under the current $1.25 billion authorization Teledyne today reported second quarter 2024 net sales of $1,374.1 million, compared with net sales of $1,424.7 million for the second quarter of 2023, a decrease of 3.6%. Net income attributable to Teledyne was $180.2 million ($3.77 diluted earnings per share) for the second quarter of 2024, compared with $185.3 million ($3.87 diluted earnings per share) for the second quarter of 2023, a decrease of 2.8%. The second quarter of 2024 included $49.1 million of pretax acquired intangible asset amortization expense, $1.0 million of pretax FLIR integration costs and $0.2 million of FLIR acquisition-related discrete income tax expense. Excluding these items, non-GAAP net income attributable to Teledyne for the second quarter of 2024 was $218.7 million ($4.58 diluted earnings per share). The second quarter of 2023 included $49.3 million of pretax acquired intangible asset amortization expense and $0.4 million of FLIR acquisition-related discrete income tax expense. Excluding these items, non-GAAP net income attributable to Teledyne for the second quarter of 2023 was $223.7 million ($4.67 diluted earnings per share). Operating margin was 18.0% for the both the second quarter of 2024 and the second quarter of 2023. Excluding the non-GAAP items discussed above, non-GAAP operating margin for the second quarter of 2024 was 21.6%, compared with 21.4% for the second quarter of 2023. "In the second quarter, Teledyne achieved all-time record free cash flow, allowing us to deploy approximately $852 million on debt repayment, acquisitions and stock repurchases through July," said Robert Mehrabian, Executive Chairman. "Our earnings exceeded expectations, orders were greater than sales for the third consecutive quarter, and we ended the period with record backlog. Therefore, we are reasonably confident that quarterly sales will again increase sequentially, and we will return to year-over-year growth in the second half of 2024." Review of Operations Comparisons are with the second quarter of 2023, unless noted otherwise. Digital Imaging The Digital Imaging segment's second quarter 2024 net sales were $739.4 million, compared with $793.3 million, a decrease of 6.8%. Operating income was $113.5 million for the second quarter of 2024, compared with $124.6 million, a decrease of 8.9%. The second quarter of 2024 included $1.0 million of pretax FLIR integration costs, and there were no comparable costs in the second quarter of 2023. Acquired intangible amortization expense for the second quarter of 2024 was $45.4 million compared with $45.6 million. Excluding these items, non-GAAP operating income for the second quarter of 2024 was $159.9 million, compared with $170.2 million, a decrease of 6.1%. The second quarter of 2024 net sales decreased primarily due to lower sales of industrial automation imaging systems, X-ray products and commercial infrared imaging systems, partially offset by higher sales of infrared detectors and surveillance systems. The decrease in operating income was primarily due to lower sales and unfavorable product mix, including less industrial automation imaging systems sales. Instrumentation The Instrumentation segment's second quarter 2024 net sales were $333.5 million, compared with $328.4 million, an increase of 1.6%. Operating income was $87.2 million for the second quarter of 2024, compared with $81.4 million, an increase of 7.1%. The second quarter of 2024 net sales increase resulted from a $20.4 million increase in sales of marine instrumentation primarily due to stronger offshore energy and defense markets, partially offset by a $13.5 million decrease in sales of electronic test and measurement instrumentation as well as a $1.8 million decrease in sales of environmental instrumentation. The increase in operating income primarily reflected the impact of higher marine instrumentation sales as well as favorable marine instrumentation product mix. Aerospace and Defense Electronics The Aerospace and Defense Electronics segment's second quarter 2024 net sales were $194.4 million, compared with $186.0 million, an increase of 4.5%. Operating income was $57.1 million for the second quarter of 2024, compared with $53.2 million, an increase of 7.3%. The second quarter of 2024 net sales reflected higher sales of $4.0 million for aerospace electronics and $4.4 million for defense electronics. The increase in operating income primarily reflected the impact of higher sales and improved product margins. Engineered Systems The Engineered Systems segment's second quarter 2024 net sales were $106.8 million, compared with $117.0 million, a decrease of 8.7%. Operating income was $7.5 million for the second quarter of 2024, compared with $11.5 million, a decrease of 34.8%. The second quarter of 2024 net sales reflected lower sales of $8.9 million for engineered products and lower sales of $1.3 million for energy systems. The lower sales for engineered products primarily reflected decreased sales from missile defense and maritime programs. The decrease in operating income was primarily driven by lower sales and unfavorable program mix. Cash provided by operating activities was $318.7 million for the second quarter of 2024 compared with $190.5 million, with the increase driven by stronger working capital conversion in the second quarter of 2024. Depreciation and amortization expense for the second quarter of 2024 was $77.8 million compared with $80.0 million. Stock-based compensation expense for the second quarter of 2024 was $9.3 million compared with $8.4 million. Capital expenditures for the second quarter of 2024 were $17.7 million compared with $27.3 million. Teledyne received $2.4 million from the exercise of stock options in the second quarter of 2024 compared with $4.8 million. During the second quarter of 2024, the Company completed the acquisitions of Valeport and Adimec for aggregate consideration of $123.6 million. During the second quarter of 2024, the Company repurchased approximately 0.5 million shares for $193.8 million. As of June 30, 2024, net debt was $2,354.2 million which is calculated as total debt of $2,797.4 million, net of cash and cash equivalents of $443.2 million. As of December 31, 2023, net debt was $2,596.6 million representing total debt of $3,244.9 million, net of cash and cash equivalents of $648.3 million. During the second quarter of 2024, the Company made a $450 million debt maturity payment. During the second quarter of 2024, the Company amended and restated its credit facility which extended the maturity date to June 2029 as well as increased the available borrowing capacity to $1.20 billion. As of June 30, 2024, $1,177.7 million was available under the $1.20 billion credit facility, after reductions of $22.3 million in outstanding letters of credit. Income Taxes The effective tax rate for the second quarter of 2024 was 22.2%, compared with 21.0%. The second quarter of 2024 reflected net discrete income tax benefits of $0.7 million compared with $1.4 million. Other Corporate expense was $18.3 million for the second quarter of 2024 compared with $14.6 million, with the increase driven primarily by increased legal contingencies as well as higher compensation costs. Non-service retirement benefit income was $2.7 million for the second quarter of 2024 compared with $2.9 million. Interest expense, net of interest income, was $15.8 million for the second quarter of 2024 compared with $22.3 million, with the decrease due to reduced outstanding borrowings with lower weighted average interest rates compared to the second quarter of 2023. Outlook Based on its current outlook, the company's management believes that third quarter 2024 GAAP diluted earnings per share will be in the range of $4.02 to $4.16 and full year 2024 GAAP diluted earnings per share will be in the range of $15.87 to $16.13. The company's management further believes that third quarter 2024 non-GAAP diluted earnings per share will be in the range of $4.90 to $5.00 and full year 2024 non-GAAP diluted earnings per share will be in the range of $19.25 to $19.45. The non-GAAP outlook excludes acquired intangible asset amortization for all acquisitions, further FLIR integration costs and FLIR acquisition-related tax matters. Use of Non-GAAP Financial Measures We report our financial results in accordance with generally accepted accounting principles in the United States ("GAAP"). We supplement the reporting of our financial results determined under GAAP with certain non-GAAP financial measures. The non-GAAP financial measures presented provides management, financial analysts, and investors with additional useful information in evaluating the performance of the company. The non-GAAP financial measures should be considered in addition to, and not as a substitute for, financial measures prepared in accordance with GAAP. Further details on reasons that we use non-GAAP financial measures, a reconciliation of these measures to the most directly comparable GAAP measures, and other information relating to these measures are included following our GAAP financial statements. Forward-Looking Statements Cautionary Notice This earnings release contains forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995, with respect to management's beliefs about the financial condition, results of operations, acquisitions and product synergies, integration costs, tax matters and businesses of Teledyne in the future. Forward-looking statements involve risks and uncertainties, are based on the current expectations of the management of Teledyne and are subject to uncertainty and changes in circumstances. The forward-looking statements contained herein may include statements relating to sales, sales growth, stock-based compensation expense, tax rates, anticipated capital expenditures, stock repurchases, product developments and other strategic options. Forward-looking statements generally are accompanied by words such as "projects", "intends", "expects", "anticipates", "targets", "estimates", "will" and words of similar import that convey the uncertainty of future events or outcomes. All statements made in this communication that are not historical in nature should be considered forward-looking. By its nature, forward-looking information is not a guarantee of future performance or results and involves risks and uncertainties because it relates to events and depends on circumstances that will occur in the future. Actual results could differ materially from these forward-looking statements. Many factors could change anticipated results, including: changes in relevant tax and other laws; foreign currency exchange risks; rising interest rates; risks associated with indebtedness, as well as our ability to reduce indebtedness and the timing thereof; the impact of semiconductor and other supply chain shortages; higher inflation, including wage competition and higher shipping costs; labor shortages and competition for skilled personnel; the inability to develop and market new competitive products; inherent uncertainties involved in the estimates and judgments used in the preparation of financial statements and the providing of estimates of financial measures, in accordance with U.S. GAAP and related standards; disruptions in the global economy; the ongoing conflict in Israel and neighboring regions, including related protests and the disruption to global shipping routes; the ongoing conflict between Russia and Ukraine, including the impact to energy prices and availability, especially in Europe; customer and supplier bankruptcies; changes in demand for products sold to the defense electronics, instrumentation, digital imaging, energy exploration and production, commercial aviation, semiconductor and communications markets; funding, continuation and award of government programs; cuts to defense spending resulting from existing and future deficit reduction measures or changes to U.S. and foreign government spending and budget priorities triggered by inflation, rising interest costs, and economic conditions; impacts from the United Kingdom's exit from the European Union; uncertainties related to the 2024 U.S. Presidential election; the imposition and expansion of, and responses to, trade sanctions and tariffs; the continuing review and resolution of FLIR's trade compliance and tax matters; escalating economic and diplomatic tension between China and the United States; threats to the security of our confidential and proprietary information, including cybersecurity threats; risks related to artificial intelligence; natural and man-made disasters, including those related to or intensified by climate change; and our ability to achieve emission reduction targets and decrease our carbon footprint. Lower oil and natural gas prices, as well as instability in the Middle East or other oil producing regions, and new regulations or restrictions relating to energy production, including those implemented in response to climate change, could further negatively affect our businesses that supply the oil and gas industry. Weakness in the commercial aerospace industry negatively affects the markets of our commercial aviation businesses. Ongoing issues with Boeing's 737 MAX product line could result in manufacturing delays and lower sales of our products to Boeing. In addition, financial market fluctuations affect the value of the company's pension assets. Changes in the policies of U.S. and foreign governments, including economic sanctions, could result, over time, in reductions or realignment in defense or other government spending and further changes in programs in which the company participates. While the company's growth strategy includes possible acquisitions, we cannot provide any assurance as to when, if or on what terms any acquisitions will be made. Acquisitions involve various inherent risks, such as, among others, our ability to integrate acquired businesses, retain key management and customers and achieve identified financial and operating synergies. There are additional risks associated with acquiring, owning and operating businesses internationally, including those arising from U.S. and foreign government policy changes or actions and exchange rate fluctuations. Additional factors that could cause results to differ materially from those described above can be found in Teledyne's Annual Report on Form 10-K for the year ended December 31, 2023, as well as subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, all of which are on file with the SEC and available in the "Investors" section of Teledyne's website, teledyne.com, under the heading "Investor Information" and in other documents Teledyne files with the SEC. All forward-looking statements speak only as of the date they are made and are based on information available at that time. Teledyne assumes no obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made or to reflect the occurrence of unanticipated events except as required by federal securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements. A live webcast of Teledyne's second quarter earnings conference call will be held at 11:00 a.m. (Eastern) on Wednesday, July 24, 2024. To access the call, go to www.teledyne.com/investors/events-and-presentations approximately ten minutes before the scheduled start time. A replay will also be available for one month starting at 12:00 p.m. (Eastern) on Wednesday, July 24, 2024. This condensed consolidated financial statement was prepared in accordance with U.S. GAAP. This condensed consolidated financial statement was prepared in accordance with U.S. GAAP. This condensed consolidated financial statement was prepared in accordance with U.S. GAAP. Explanation of Non-GAAP Financial Measures We report our financial results in accordance with GAAP. However, management believes that, in order to more fully understand our short-term and long-term financial and operational trends, and to aid in comparability with our competitors, investors and financial analysts may wish to consider the impact of certain items resulting from our acquisitions which have an infrequent or non-recurring impact on operations or assist in understanding our operations pre-acquisition. Accordingly, we present non-GAAP financial measures as a supplement to the financial measures we present in accordance with GAAP. These non-GAAP financial measures provide management, investors and financial analysts with additional means to understand and evaluate the operating results and trends in our ongoing business by adjusting for certain expenses and benefits. Management believes these non-GAAP financial measures also provide additional means of evaluating period-over-period operating performance. In addition, management understands that some investors and financial analysts find this information helpful in analyzing our financial and operational performance and comparing this performance to our peers and competitors. The company's diluted earnings per common share outlook guidance is also presented on a non-GAAP basis. The non-GAAP financial measures are not meant to be considered superior to, or a substitute for, our financial statements prepared in accordance with GAAP. There are material limitations associated with non-GAAP financial measures because they exclude charges that have an effect on our reported results and, therefore, should not be relied upon as the sole financial measures by which to evaluate our financial results. Management compensates and believes that investors should compensate for these limitations by viewing the non-GAAP financial measures in conjunction with the GAAP financial measures. In addition, the non-GAAP financial measures included in this earnings announcement may be different from, and therefore may not be comparable to, similar measures used by other companies. The non-GAAP financial measures are also used by our management to evaluate our operating performance and benchmark our results against our historical performance and the performance of our peers. Our non-GAAP measures are as follows: Non-GAAP income before income taxes, net income and diluted earnings per common share These non-GAAP measures provided a supplemental view of income before taxes, net income, and diluted earnings per common share. These non-GAAP measures exclude certain FLIR acquisition integration-related costs, acquired intangible asset amortization, the remeasurement of deferred taxes related to acquired intangible assets due to changes in tax laws, and the tax benefits or costs related to the settlement or other resolution of the FLIR tax reserves. We also adjust for any post-acquisition interest on certain income tax reserves related to FLIR. We adjust for any income tax impact related to these items to take into account the tax treatment and related tax rate and changes in tax rates that apply to each adjustment in the applicable tax jurisdiction. Generally, this results in the tax impact at the U.S. marginal tax rate for certain adjustments, including the majority of amortization of intangible assets, whereas the tax impact of other adjustments, including transaction expenses, depend on whether the amounts are deductible in the respective tax jurisdictions and the applicable tax rates in those jurisdictions. We believe these measures provide investors and management with additional means to understand and evaluate the operating results of our business by adjusting for certain expenses and benefits and present an alternative view of our performance compared to prior periods. Non-GAAP operating income and operating margin We define non-GAAP operating margin as non-GAAP operating income divided by net sales. These non-GAAP measures exclude certain FLIR acquisition integration-related costs and acquired intangible asset amortization. We believe these measures provide investors and management with additional means to understand and evaluate the operating results of our business by adjusting for certain expenses and other items and present an alternative view of our performance compared to prior periods. Non-GAAP total debt and net debt We define non-GAAP total debt as the sum of current portion of long-term debt and other debt and long-term debt. We define net debt as the difference between non-GAAP total debt less cash and cash equivalents. The company believes that this non-GAAP information is useful to assist investors and management in analyzing the company's liquidity. Non-GAAP diluted earnings per common share outlook These non-GAAP measures represent our earnings per common share outlook for the third quarter of 2024 and total year 2024 on a fully diluted basis, excluding certain FLIR integration costs, acquired intangible asset amortization for all acquisitions and FLIR acquisition-related tax matters. Non-GAAP cash provided by operations and free cash flow We define free cash flow as cash provided by operating activities (a measure prescribed by GAAP) less capital expenditures for property, plant and equipment. We believe that this non-GAAP information is useful to assist management and the investment community in analyzing the company's ability to generate cash flow. Non-GAAP line items used in tables Management excludes the effect of each of the acquisition related items identified below to arrive at the applicable non-GAAP financial measure referenced in the tables for the reasons set forth below with respect to that item:
[2]
Morningstar, Inc. Reports Second-Quarter 2024 Financial Results
Morningstar, Inc. (Nasdaq: MORN), a leading provider of independent investment insights, posted double-digit second-quarter revenue growth while expanding operating margins. "Led by Morningstar Credit's strength across regions and asset classes, we finished the first half of 2024 on a high note," said Kunal Kapoor, Morningstar's chief executive officer. "We remain focused on durable growth in adjusted operating income. Our teams are delivering product enhancements to customers, including the addition of collateralized loan obligation data to PitchBook, and the integration of our Intelligence Engine into Advisor Workstation, which will allow advisors to further automate client workflows." The Company's quarterly shareholder letter provides more context on its quarterly results and business and can be found at shareholders.morningstar.com. Revenue increased 13.3% to $571.9 million on a reported basis and 13.6% on an organic basis versus the prior-year period, driven by strength across most of the business. Morningstar Credit, PitchBook, and Morningstar Data and Analytics were the biggest contributors to reported revenue growth. Operating expense was relatively flat at $463.4 million. Excluding the impact of M&A-related expenses (related to merger, acquisition, and divestiture activity including severance and earn-outs), amortization, and costs related to the transition of the Company's China activities in the prior-year period, operating expense increased 1.4% in the quarter. Compensation and benefits and certain infrastructure-related costs including those related to SaaS-based software subscriptions, cloud computing, and data purchases increased during the quarter. This growth was mostly offset by decreases in facilities-related expenses, partially driven by the consolidation of our real estate footprint, and professional fees. Second-quarter operating income increased 160.2% to $108.5 million. Adjusted operating income was $131.0 million, an increase of 87.9%. Second-quarter operating margin was 19.0%, compared with 8.3% in the prior-year period. Adjusted operating margin was 22.9% in the second quarter of 2024, versus 13.8% in the prior-year period. Net income in the second quarter of 2024 was $69.1 million, or $1.60 per diluted share, compared with net income of $36.1 million, or $0.84 per diluted share in the second quarter of 2023, an increase of 90.5% on a per share basis. Adjusted diluted net income per share increased 54.6% to $2.01 in the second quarter of 2024, compared with $1.30 in the prior-year period. Foreign exchange losses had a negative $0.10 impact on adjusted diluted net income per share in the second quarter of 2024. The Company's effective tax rate was 21.7% in the second quarter of 2024. The Company's prior-year period effective tax rate was not meaningful due to the low level of pretax income in the period. Morningstar Data and Analytics contributed $196.9 million to consolidated revenue and $10.9 million to consolidated revenue growth, with revenue increasing 5.9% in the second quarter versus the prior-year period, or 6.2% on an organic basis. Higher revenues were primarily driven by growth in Morningstar Direct and Morningstar Data. Morningstar Direct benefited from growth across geographies, with licenses increasing 0.7%. Increases in managed investment (fund) data, especially in Europe, helped drive Morningstar Data growth, partially offset by lower contributions to growth from Morningstar Essentials and equity and exchange market data. Morningstar Data and Analytics adjusted operating income increased 9.0% to $87.3 million, and adjusted operating margin increased 1.2 percentage points to 44.3% compared to the prior-year period. PitchBook PitchBook contributed $151.7 million to consolidated revenue and $14.9 million to consolidated revenue growth, with revenue increasing 10.9% on a reported and organic basis. Higher revenue was primarily driven by the PitchBook platform with licensed users growing 16.6%, including the impact of legacy Leveraged Commentary & Data clients who have moved to PitchBook licenses. PitchBook platform growth drivers were consistent with recent quarters and reflected strength in PitchBook's core investor and advisor client segments, including venture capital, private equity, and investment banks. This was partially offset by continued softness in the corporate client segment, especially with smaller firms with more limited use cases. PitchBook segment adjusted operating income increased 27.2% to $47.3 million, and adjusted operating margin increased 4.0 percentage points to 31.2%. The increase in margin was partially driven by the forfeiture of stock in the now-terminated PitchBook management bonus plan, which was a compensation vehicle designed primarily to incentivize former PitchBook CEO, John Gabbert. Morningstar Wealth Morningstar Wealth contributed $62.6 million to consolidated revenue and $6.8 million to consolidated revenue growth, with revenue increasing 12.2% in the second quarter versus the prior-year period, or 12.4% on an organic basis. Growth was primarily driven by Investment Management, supported by higher revenue for strategist model portfolios offered on third-party platforms and international wealth platform growth. Reported assets under management and advisement (AUMA) increased 11.3% to $59.1 billion compared with the prior-year period, helped by strong market performance which drove higher asset values. Positive net flows to Morningstar Managed Portfolios over the trailing 12 months primarily reflected strong net inflows outside the United States. Morningstar Wealth adjusted operating loss was $2.2 million compared to a $12.3 million loss in the prior-year period, and adjusted operating margin was negative 3.5% compared with negative 22.0%. In conjunction with the recent announcement of the expected sale of assets from the Morningstar Wealth Turnkey Asset Management Platform to AssetMark, the Company recorded $3.3 million in severance expense in the quarter. These costs are excluded from Morningstar Wealth adjusted operating income and consolidated adjusted operating income. Morningstar Credit Morningstar Credit contributed $77.6 million to consolidated revenue and $23.4 million to consolidated revenue growth, with revenue increasing 43.2% in the second quarter versus the prior-year period, or 44.2% on an organic basis. Ratings-related revenue increased significantly across asset classes and geographies, compared to a relatively soft prior-year period, with particular strength in commercial mortgage-backed securities, asset-backed securities, and corporate ratings. Increases in residential mortgage-backed securities and financial institution ratings also contributed to growth. Morningstar Credit adjusted operating income was $27.9 million compared with $5.0 million in the prior-year period, and adjusted operating margin was 36.0% compared with 9.2% in the prior-year period. Morningstar Retirement Morningstar Retirement contributed $33.3 million to consolidated revenue and $5.9 million to consolidated revenue growth, with revenue increasing 21.5% in the second quarter versus the prior-year period on a reported and organic basis. AUMA increased 22.2% to $257.2 billion compared with the prior-year period, reflecting market gains and significant positive net flows, supported by rapid growth in Advisor Managed Accounts. Morningstar Retirement adjusted operating income increased 29.1% to $17.3 million, and adjusted operating margin increased 3.1 percentage points to 52.0%. Corporate and All Other Revenue attributable to Corporate and All Other contributed $49.8 million to consolidated revenue and $5.3 million to consolidated revenue growth, with revenue increasing 11.9% in the second quarter versus the prior-year period, driven by growth in Morningstar Indexes. The increase in Morningstar Indexes revenue was primarily driven by higher investable product revenue as market performance and net inflows over the trailing 12 months increased asset value linked to Morningstar Indexes by 22.3% to $207.6 billion. Morningstar Indexes licensed data sales also increased. Morningstar Sustainalytics revenues were relatively flat compared to the prior-year period for both license- and transaction-based products. In Europe, regulatory use cases and demand from institutional clients were areas of strength. This strength was largely offset by increased cancellations in investor solutions due to vendor consolidation and softness in parts of the asset management and wealth client segments. Revenue was also negatively impacted by actions taken to streamline the corporate solutions product lineup, specifically the licensed ratings product. The impact of Corporate and All Other on consolidated adjusted operating income was negative $46.6 million compared with negative $53.7 million in the prior-year period. Balance Sheet and Capital Allocation As of June 30, 2024, the Company had cash, cash equivalents, and investments totaling $439.2 million and $899.6 million of debt, compared with $389.0 million and $972.4 million, respectively, as of Dec. 31, 2023. Cash provided by operating activities increased to $152.7 million in the second quarter of 2024, compared to $24.5 million in the prior-year period. Free cash flow increased to $120.8 million, compared to negative $5.8 million in the prior-year period. The increases in cash provided by operating activities and free cash flow were driven by both higher cash earnings and improvements in working capital. As previously disclosed, operating cash flows were negatively impacted in the prior-year period by certain items totaling $63.1 million. Excluding these items, cash provided by operating activities and free cash flow would have increased by 74.3% and 110.8%, respectively. In addition, the Company paid $17.3 million in dividends in the quarter. Use of Non-GAAP Financial Measures The tables at the end of this press release include a reconciliation of the non-GAAP financial measures used by the Company to comparable GAAP measures and an explanation of why the Company uses them. Investor Communication Morningstar encourages all interested parties -- including securities analysts, current shareholders, potential shareholders, and others -- to submit questions in writing. Investors and others may send questions about Morningstar's business to investors@morningstar.com. Morningstar will make written responses to selected inquiries available to all investors at the same time in Form 8-Ks furnished to the SEC, periodically. About Morningstar, Inc. Morningstar, Inc. is a leading provider of independent investment insights in North America, Europe, Australia, and Asia. The Company offers an extensive line of products and solutions that serve a wide range of market participants, including individual and institutional investors in public and private capital markets, financial advisors and wealth managers, asset managers, retirement plan providers and sponsors, and issuers of fixed-income securities. Morningstar provides data and research insights on a wide range of investment offerings, including managed investment products, publicly listed companies, private capital markets, debt securities, and real-time global market data. Morningstar also offers investment management services through its investment advisory subsidiaries, with approximately $316 billion in AUMA as of June 30, 2024. The Company operates through wholly-owned subsidiaries in 32 countries. For more information, visit www.morningstar.com/company. Follow Morningstar on X (formerly known as Twitter) @MorningstarInc. Caution Concerning Forward-Looking Statements This press release contains forward-looking statements as that term is used in the Private Securities Litigation Reform Act of 1995. These statements are based on our current expectations about future events or future financial performance. Forward-looking statements by their nature address matters that are, to different degrees, uncertain, and often contain words such as "consider," "future," "maintain," "may," "expect," "potential," "anticipate," "believe," "continue," "will," or the negative thereof, and similar expressions. These statements involve known and unknown risks and uncertainties that may cause the events we discuss not to occur or to differ significantly from what we expect. For us, these risks and uncertainties include, among others, failing to maintain and protect our brand, independence, and reputation; failure to prevent and/or mitigate cybersecurity events and the failure to protect confidential information, including personal information about individuals; compliance failures, regulatory action, or changes in laws applicable to our credit ratings operations, investment advisory, environmental, social, and governance, and index businesses; failing to innovate our product and service offerings, or anticipate our clients' changing needs; the impact of artificial intelligence and related technologies on our business, legal, and regulatory exposure profile and reputation; failing to detect errors in our products or the failure of our products to perform properly due to defects, malfunctions, or similar problems; failing to recruit, develop, and retain qualified employees; prolonged volatility or downturns affecting the financial sector, global financial markets, and the global economy and its effect on our revenue from asset-based fees and our credit ratings business; failing to scale our operations and increase productivity in order to implement our business plans and strategies; liability for any losses that result from errors in our automated advisory tools or errors in the use of the information and data we collect; inadequacy of our operational risk management, business continuity programs and insurance coverage in the event of a material disruptive event; failing to close, or achieve the anticipated economic or other benefits of, a strategic transaction on a timely basis or at all; failing to efficiently integrate and leverage acquisitions and other investments, which may not realize the expected business or financial benefits, to produce the results we anticipate; failing to maintain growth across our businesses in today's fragmented geopolitical, regulatory, and cultural world; liability relating to the information and data we collect, store, use, create, and distribute or the reports that we publish or are produced by our software products; the potential adverse effect of our indebtedness on our cash flows and financial and operational flexibility; challenges in accounting for tax complexities in the global jurisdictions which we operate in and their effect on our tax obligations and tax rates; and failing to protect our intellectual property rights or claims of intellectual property infringement against us. A more complete description of these risks and uncertainties, among others, can be found in our filings with the Securities and Exchange Commission (SEC), including our most recent Reports on Forms 10-K and 10-Q. If any of these risks and uncertainties materialize, our actual future results and other future events may vary significantly from what we expect. We do not undertake to update our forward-looking statements as a result of new information, future events or otherwise, except as may be required by law. You are, however, advised to review any further disclosures we make on related subjects, and about new or additional risks, uncertainties, and assumptions in our filings with the SEC on Forms 10-K, 10-Q and 8-K. Morningstar, Inc. and Subsidiaries Reconciliations of Non-GAAP Measures with the Nearest Comparable GAAP Measures (Unaudited) To supplement Morningstar's condensed consolidated financial statements presented in accordance with U.S. Generally Accepted Accounting Principles (GAAP), Morningstar uses the following measures considered as non-GAAP by the Securities and Exchange Commission, including: These non-GAAP measures may not be comparable to similarly titled measures reported by other companies and should not be considered an alternative to any measure or performance as promulgated under GAAP. Morningstar presents organic revenue because the Company believes this non-GAAP measure helps investors better compare period-over-period results, and Morningstar's management team uses this measure to evaluate the performance of the business. Morningstar excludes revenue from acquired businesses from its organic revenue growth calculation for a period of 12 months after it completes the acquisition. For divestitures, Morningstar excludes revenue in the prior-year period for which there is no comparable revenue in the current period. Morningstar presents adjusted operating income, adjusted operating margin, and adjusted diluted net income per share to show the effect of significant acquisition and divestiture activity, better compare period-over-period results, and improve overall understanding of the underlying performance of the business absent the impact of M&A and the shift of Morningstar's operations in China. In addition, Morningstar presents free cash flow solely as supplemental disclosure to help investors better understand how much cash is available after making capital expenditures. Morningstar's management team uses free cash flow to evaluate the health of its business. Free cash flow should not be considered an alternative to any measure required to be reported under GAAP (such as cash provided by (used for) operating, investing, and financing activities).
[3]
Amphenol Reports Record Second Quarter 2024 Results and Announces Dividend Increase
Amphenol Corporation (NYSE: APH) today reported second quarter 2024 results. "We are pleased to have closed the second quarter of 2024 with record sales and Adjusted Diluted EPS both exceeding the high end of our guidance," said Amphenol President and Chief Executive Officer, R. Adam Norwitt. "Sales increased from prior year by 18%, primarily driven by growth in the IT datacom, defense, commercial air, mobile devices, mobile networks and automotive markets, as well as contributions from the Company's acquisition program, partially offset by organic moderations in the broadband and industrial markets. During the quarter, we again realized strong profitability with Adjusted Operating Margin reaching a record 21.3%. We are very proud of the Company's outstanding performance during the quarter." The Company continues to deploy its financial strength in a variety of ways to increase shareholder value. During the quarter, the Company purchased 3.1 million shares of its common stock for $190 million and paid dividends of $132 million, resulting in total capital returned to shareholders of more than $320 million. Amphenol remains focused on expanding its growth opportunities through a deep commitment to developing enabling technologies for customers across our served markets, an ongoing strategy of market and geographic diversification as well as an active and successful acquisition program. To that end, the Company is excited to have closed the acquisition of Carlisle Interconnect Technologies (CIT) on May 21, as previously announced. During the quarter, Amphenol also signed a definitive agreement to acquire Lutze, a leading provider of harsh environment cable and cable assembly solutions for high-technology applications in the industrial market. The acquisition includes two businesses: Lutze US, based in North Carolina, and Lutze Europe, based in Germany. In May, we closed on Lutze US, which has annual sales of approximately $75 million, and we expect to close on Lutze Europe, which has annual sales of approximately $100 million, by the end of the third quarter of 2024. Both the CIT and Lutze businesses are reported in our Harsh Environment Solutions segment. Finally, as disclosed last week, Amphenol has entered into a definitive agreement to acquire CommScope's mobile networks-related businesses. Increase in Quarterly Dividend On July 23, 2024, Amphenol's Board of Directors approved a 50% increase in the Company's quarterly dividend, from $0.11 per share to $0.165 per share. The new dividend amount will be paid on October 9, 2024 to shareholders of record as of September 17, 2024. Third Quarter 2024 Outlook Assuming the continuation of current market conditions as well as constant exchange rates, for the third quarter of 2024, Amphenol expects sales to be in the range of $3.70 billion to $3.80 billion. This represents a 16% to 19% increase over the prior year quarter. Adjusted Diluted EPS is expected to be in the range of $0.43 to $0.45, representing a 10% to 15% increase from the third quarter of 2023. This guidance does not include the impact of acquisitions that have not yet closed. Mr. Norwitt continued, "I am very pleased with the Company's second quarter 2024 results. The revolution in electronics continues to accelerate, with new innovations creating exciting growth opportunities for Amphenol across each of our diversified end markets. In turn, we have expanded our range of high-technology interconnect products, both through our organic innovation efforts as well as through our successful acquisition program. This expanded technology position coupled with our unique entrepreneurial culture has strengthened our competitive advantage. Our ongoing drive to leverage that competitive advantage and thereby create sustained financial strength has established an excellent base for the Company's future performance. I am confident in the ability of our outstanding and growing entrepreneurial management team to continue to dynamically adjust to changing market conditions, to capitalize on the wide array of growth opportunities that arise in all market cycles and to continue to generate sustainable long-term value for our shareholders and other stakeholders." 2-for-1 Stock Split As announced on May 20, 2024, the Company's Board of Directors approved a 2-for-1 stock split, which was paid in the form of a stock dividend to shareholders of record as of the close of business on May 31, 2024. The additional shares were distributed on June 11, 2024 and the Company's common stock began trading on a split-adjusted basis on June 12, 2024. The effect of the stock split on the Company's financial results, including all share and per share data for both the current and prior year periods, as well as the quarterly dividend is reflected in this press release. Conference Call and Webcast Details The Company will host a conference call to discuss its second quarter results at 1:00 PM (EDT) on Wednesday, July 24, 2024. The toll-free dial-in number is 888-455-0949; International dial-in number is +1-773-799-3973; Passcode: LAMPO. A replay of the call will be available until 11:59 PM (EDT) on Saturday, August 24, 2024. The replay numbers are toll free 866-361-4757; International toll number +1-203-369-0183; Passcode: 7183. A live broadcast as well as a replay of the call can be accessed through the Investor Relations section of the company's website at https://investors.amphenol.com. About Amphenol Amphenol Corporation is one of the world's largest designers, manufacturers and marketers of electrical, electronic and fiber optic connectors and interconnect systems, antennas, sensors and sensor-based products and coaxial and high-speed specialty cable. Amphenol designs, manufactures and assembles its products at facilities in approximately 40 countries around the world and sells its products through its own global sales force, independent representatives and a global network of electronics distributors. Amphenol has a diversified presence as a leader in high-growth areas of the interconnect market including: Automotive, Broadband Communications, Commercial Aerospace, Defense, Industrial, Information Technology and Data Communications, Mobile Devices and Mobile Networks. For more information, visit www.amphenol.com. Non-GAAP Financial Measures The financial statements included within this press release are prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP" or "U.S. GAAP"). This press release also contains certain non-GAAP financial measures, including Adjusted Operating Income, Adjusted Operating Margin, Adjusted Net Income attributable to Amphenol Corporation, Adjusted Effective Tax Rate, Adjusted Diluted EPS, Organic Net Sales Growth, and Free Cash Flow (collectively, "non-GAAP financial measures"), which are intended to supplement the reported GAAP results. Management utilizes these non-GAAP financial measures as part of its internal reviews for purposes of monitoring, evaluating and forecasting the Company's financial performance, communicating operating results to the Company's Board of Directors and assessing related employee compensation measures. Management believes that such non-GAAP financial measures may be helpful to investors in assessing the Company's overall financial performance, trends and period-over-period comparative results. Non-GAAP financial measures related to operating income, operating margin, net income attributable to Amphenol Corporation, effective tax rate and diluted EPS exclude income and expenses that are not directly related to the Company's operating performance during the periods presented. Items excluded in the presentation of these non-GAAP financial measures in any period may consist of, without limitation, acquisition-related expenses, refinancing-related costs, gains associated with bargain purchase acquisitions, and certain discrete tax items including, but not limited to, (i) the excess tax benefits related to stock-based compensation and (ii) the impact of significant changes in tax law. Non-GAAP financial measures related to net sales exclude the impact related to foreign currency exchange and acquisitions. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are included at the end of this press release. However, such non-GAAP financial measures are included for supplemental purposes only and should not be considered in isolation or as a substitute for or superior to the related U.S. GAAP financial measures. In addition, these non-GAAP financial measures are not necessarily the same or comparable to similar measures presented by other companies as such measures may be calculated differently or may exclude different items. The non-GAAP financial measures are defined within the "Supplemental Financial Information" table at the end of this press release and should be read in conjunction with the Company's financial statements presented in accordance with U.S. GAAP. Forward-Looking Statements This press release may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements are based on our management's assumptions and beliefs about future events or circumstances using information currently available, and as a result, they are subject to risks and uncertainties. Forward-looking statements address events or developments that Amphenol Corporation expects or believes may or will occur in the future. These forward-looking statements, which address the Company's expected business and financial performance and financial condition, among other matters, may contain words and terms such as: "anticipate," "believe," "continue," "could," "estimate," "expect," "forecast," "guidance," "intend," "look ahead," "may," "ongoing," "optimistic," "plan," "potential," "predict," "project," "seek," "should," "target," "will" or "would" and other words and terms of similar meaning. Forward-looking statements by their nature address matters that are, to different degrees, uncertain, such as statements about expected earnings, revenues, growth, liquidity, effective tax rate, interest rates, the expected timing for the closing of certain acquisitions or other matters. Although the Company believes the expectations reflected in all forward-looking statements, including those we may make regarding third quarter 2024 sales and Adjusted Diluted EPS as well as the expected timing for the closing of certain acquisitions, among other matters, are based upon reasonable assumptions, the expectations may not be attained or there may be material deviation. Readers and investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. There are risks and uncertainties that could cause actual results to differ materially from these forward-looking statements, which include, but are not limited to, the following: political, economic, military and other risks related to operating in countries outside the United States, as well as changes in general economic conditions, geopolitical conditions, U.S. trade policies (including, but not limited to, sanctions) and other factors beyond the Company's control; uncertainties associated with an economic slowdown or recession in any of the Company's end markets that could negatively affect the financial condition of our customers and could result in reduced demand; risks and impacts associated with adverse public health developments, including epidemics and pandemics; risks associated with our inability to obtain certain raw materials and components, as well as the increasing cost of certain of the Company's raw materials and components; cybersecurity threats and techniques used to disrupt operations and gain unauthorized access to our information technology systems, including, but not limited to, malware, social engineering/phishing, credential harvesting, ransomware, malfeasance by insiders, human or technological error and other increasingly sophisticated attacks, that continue to expand and evolve, including through the use of artificial intelligence and machine learning, which could, among other things, impair our information technology systems and disrupt business operations, result in reputational damage that may cause the loss of existing or future customers, loss of our intellectual property, the loss of or inability to access confidential information and critical business, financial or other data, and/or cause the release of highly sensitive confidential information, and potentially lead to litigation and/or governmental investigations, fines and other penalties, among other risks, and risks and impacts associated with an increasingly demanding regulatory environment surrounding information security and privacy, including additional fines, penalties and costs; negative impacts caused by extreme weather conditions and natural catastrophic events, including those caused or intensified by climate change and global warming; risks associated with the increasing scrutiny and expectations regarding environmental, social and corporate governance matters that could result in additional costs or risks or otherwise adversely impact our business; risks associated with the improper conduct by any of our employees, customers, suppliers, distributors or any other business partners which could impair our business reputation and financial results and could result in our non-compliance with anti-corruption laws and regulations of the U.S. government and various foreign jurisdictions; changes in exchange rates of the various currencies in which the Company conducts business; the risks associated with the Company's dependence on attracting, recruiting, hiring and retaining skilled employees, including as part of our various management teams; risks and difficulties in trying to compete successfully on the basis of technology innovation, product quality and performance, price, customer service and delivery time; the Company's dependence on end market dynamics to sell its products, particularly in the communications, automotive and defense end markets, pricing pressures resulting from large customers that regularly exert pressure on their suppliers, including the Company, and changes in defense expenditures of the U.S. and non-U.S. governments, which are subject to political and budgetary fluctuations and constraints, all of which could adversely affect its operating results; difficulties and unanticipated expenses in connection with purchasing and integrating newly acquired businesses, including the potential for the impairment of goodwill and other intangible assets; events beyond the Company's control that could lead to an inability to meet its financial and other covenants and requirements, which could result in a default under the Company's revolving credit facility or any of our various senior notes; risks associated with the Company's inability to access the global capital markets on favorable terms, including as a result of significant deterioration of general economic or capital market conditions, or as a result of a downgrade in the Company's credit rating; changes in interest rates; government contracting risks that the Company may be subject to, including laws and regulations governing reporting obligations, performance of government contracts and related risks associated with conducting business with the U.S. and other foreign governments or their suppliers (both directly and indirectly); governmental export and import controls as well as sanctions and trade embargoes that certain of our products may be subject to, including export licensing, customs regulations, economic sanctions and other laws; changes in fiscal and tax policies, audits and examinations by taxing authorities, laws, regulations and guidance in the United States and foreign jurisdictions; any difficulties in enforcing and protecting the Company's intellectual property rights; litigation, customer claims, voluntary or forced product recalls, governmental investigations, criminal liability or environmental matters including changes to laws and regulations to which the Company may be subject; and incremental costs, risks and regulations associated with efforts to combat the negative effects of climate change. A further description of these uncertainties and other risks can be found in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, Quarterly Reports on Form 10-Q and the Company's other reports filed with the Securities and Exchange Commission. These or other uncertainties not identified in these documents (that we either currently do not expect to have an adverse effect on our business or that we are unable to predict or identify at this time) may cause the Company's actual future results to be materially different from those expressed in any forward-looking statements. Our forward-looking statements may also be impacted by, among other things, future tax, regulatory and other legal changes that may arise in any of the jurisdictions in which we operate. The Company undertakes no obligation to update or revise any forward-looking statements except as required by law. AMPHENOL CORPORATION SUPPLEMENTAL FINANCIAL INFORMATION RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES (Unaudited) (dollars in millions, except per share data) Management utilizes the non-GAAP financial measures defined below as part of its internal reviews for purposes of monitoring, evaluating and forecasting the Company's financial performance, communicating operating results to the Company's Board of Directors and assessing related employee compensation measures. Management believes that such non-GAAP financial measures may be helpful to investors in assessing the Company's overall financial performance, trends and period-over-period comparative results. Non-GAAP financial measures related to net sales exclude the impact of foreign currency exchange rates and acquisitions. Non-GAAP financial measures related to operating income, operating margin, net income attributable to Amphenol Corporation, effective tax rate and diluted EPS exclude income and expenses that are not directly related to the Company's operating performance during the periods presented. Items excluded from such non-GAAP financial measures in any period may consist of, without limitation, acquisition-related expenses, refinancing-related costs, gains associated with bargain purchase acquisitions, and certain discrete tax items including, but not limited to, (i) the excess tax benefits related to stock-based compensation and (ii) the impact of significant changes in tax law. The following non-GAAP financial information is included for supplemental purposes only and should not be considered in isolation or as a substitute for or superior to the related U.S. GAAP financial measures. In addition, these non-GAAP financial measures are not necessarily the same or comparable to similar measures presented by other companies as such measures may be calculated differently or may exclude different items. Such non-GAAP financial measures should be read in conjunction with the Company's financial statements presented in accordance with U.S. GAAP. The following are reconciliations of non-GAAP financial measures to the most directly comparable U.S. GAAP financial measures for the periods presented: AMPHENOL CORPORATION SUPPLEMENTAL FINANCIAL INFORMATION RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES (continued) (Unaudited) (dollars in millions, except per share data) AMPHENOL CORPORATION SUPPLEMENTAL FINANCIAL INFORMATION RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES - GUIDANCE (Unaudited) (dollars in millions, except per share data) Management utilizes the non-GAAP financial measures defined earlier as part of its internal reviews for purposes of monitoring, evaluating and forecasting the Company's financial performance, communicating operating results to the Company's Board of Directors and assessing related employee compensation measures. Management believes that such non-GAAP financial measures may be helpful to investors in assessing the Company's overall financial performance, trends and period-over-period comparative results. Adjusted Diluted EPS, a non-GAAP financial measure, excludes income and expenses that are not directly related to the Company's operating performance during the periods presented. Items excluded from such non-GAAP financial measures in any period may consist of, without limitation, acquisition-related expenses, refinancing-related costs, gains associated with bargain purchase acquisitions, and certain discrete tax items including, but not limited to, (i) the excess tax benefits related to stock-based compensation and (ii) the impact of significant changes in tax law. Adjusted Diluted EPS is not necessarily the same or comparable to similar measures presented by other companies as such measures may be calculated differently or may exclude different items. Such non-GAAP financial measures should be read in conjunction with the Company's financial statements presented in accordance with U.S. GAAP. The following is a reconciliation of current guidance for GAAP Diluted earnings per share (Diluted EPS) to Adjusted Diluted EPS (non-GAAP) for the third quarter of 2024:
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WM Announces Second Quarter 2024 Earnings
WM (NYSE: WM) today announced financial results for the quarter ended June 30, 2024. "Based on our great performance to start 2024 and our confidence in the strength of our business, after the first quarter we raised our full-year outlook for adjusted operating EBITDA and free cash flow by $100 million. Our second quarter results are tracking to this higher trajectory and reflect continued momentum on our pricing programs and cost optimization efforts in our collection and disposal business," said Jim Fish, WM's President and Chief Executive Officer. "Revenue grew by 5.5% this quarter, and our disciplined focus on leveraging our people, technology and processes to reduce our cost to serve continued to drive margin expansion. Our adjusted operating EBITDA increased by 10.3%, and margin expanded by 130 basis points resulting in quarterly margin of 30.0% for the first time ever." Fish continued, "We continue to strategically expand our core collection and disposal operations in North America through targeted acquisitions in new geographies like Long Island, New York and through tuck-in acquisitions in growth markets in Florida, North Carolina, and Arizona. Looking forward, we are excited about our planned acquisition of Stericycle, and we are progressing through the customary regulatory reviews. At the same time, we are making significant strides on our sustainability investments, having opened two upgraded recycling facilities this quarter. In our renewable energy business, we are scheduled to complete a total of five projects in 2024, with an additional nine projects currently under construction. The momentum is strong, and we remain focused on execution." KEY HIGHLIGHTS FOR THE SECOND QUARTER OF 2024 Fish concluded, "We are pleased with the progress we've made on our strategic priorities so far in 2024. Our team continues to exceed the high expectations we have set. With our strong performance in the first half of the year, we are confident that we are on track to meet or exceed the midpoint of our full-year financial outlook that we provided in April." The Company will host a conference call at 10 a.m. ET on July 25, 2024 to discuss the second quarter 2024 results. Information contained within this press release will be referenced and should be considered in conjunction with the call. Listeners can access a live audio webcast of the conference call by visiting investors.wm.com and selecting "Events & Presentations" from the website menu. A replay of the audio webcast will be available at the same location following the conclusion of the call. Conference call participants should register to obtain their dial in and passcode details. This streamlined process improves security and eliminates wait times when joining the call. ABOUT WM WM (WM.com) is North America's leading provider of comprehensive environmental solutions. Previously known as Waste Management and based in Houston, Texas, WM is driven by commitments to put people first and achieve success with integrity. The company, through its subsidiaries, provides collection, recycling and disposal services to millions of residential, commercial, industrial and municipal customers throughout the U.S. and Canada. With innovative infrastructure and capabilities in recycling, organics and renewable energy, WM provides environmental solutions to and collaborates with its customers in helping them achieve their sustainability goals. WM has the largest disposal network and collection fleet in North America, is the largest recycler of post-consumer materials and is the leader in beneficial use of landfill gas, with a growing network of renewable natural gas plants and the most landfill gas-to-electricity plants in North America. WM's fleet includes more than 12,000 natural gas trucks - the largest heavy-duty natural gas truck fleet of its kind in North America. To learn more about WM and the company's sustainability progress and solutions, visit Sustainability.WM.com. FORWARD-LOOKING STATEMENTS The Company, from time to time, provides estimates or projections of financial and other data, comments on expectations relating to future periods and makes statements of opinion, view or belief about current and future events, circumstances or performance. This press release contains a number of such forward-looking statements, including all statements regarding future performance or financial results of our business; achievement of financial outlook; growth and margin expansion; drivers of performance, including pricing, cost optimization and cost reduction and other initiatives; results from acquisitions; consummation of the Stericycle acquisition and obtaining regulatory approvals; and timing of sustainability investments and project completions and related results. You should view these statements with caution. They are based on the facts and circumstances known to the Company as of the date the statements are made. These forward-looking statements are subject to risks and uncertainties that could cause actual results to be materially different from those set forth in such forward-looking statements, including but not limited to failure to implement our optimization, automation, growth, and cost savings initiatives and overall business strategy; failure to obtain the results anticipated from strategic initiatives, investments, acquisitions, including the planned Stericycle acquisition, or new lines of business; failure to identify acquisition targets, consummate and integrate acquisitions, including our planned integration of Stericycle; our ability to consummate and finance the Stericycle acquisition and achieve the anticipated benefits therefrom, including cost synergies; legal, regulatory and other matters that may affect the costs and timing of our ability to complete, integrate and deliver all of the expected benefits of the planned Stericycle acquisition; environmental and other regulations, including developments related to emerging contaminants, gas emissions, renewable energy, extended producer responsibility and our natural gas fleet; significant environmental, safety or other incidents resulting in liabilities or brand damage; failure to obtain and maintain necessary permits due to land scarcity, public opposition or otherwise; diminishing landfill capacity, resulting in increased costs and the need for disposal alternatives; failure to attract, hire and retain key team members and a high quality workforce; increases in labor costs due to union organizing activities or changes in wage and labor related regulations; disruption and costs resulting from severe weather and destructive climate events; failure to achieve our sustainability goals or execute on our sustainability-related strategy and initiatives, including within planned timelines or anticipated budgets due to disruptions, delays, cost increases or changes in environmental or tax regulations; focus on, and regulation of, environmental and sustainability-related disclosures, which could lead to increased costs, risk of non-compliance, brand damage and litigation risk related to our sustainability efforts; macroeconomic conditions, geopolitical conflict and large-scale market disruption resulting in labor, supply chain and transportation constraints, inflationary cost pressures and fluctuations in commodity prices, fuel and other energy costs; increased competition; pricing actions; impacts from international trade restrictions; competitive disposal alternatives, diversion of waste from landfills and declining waste volumes; weakness in general economic conditions and capital markets, including potential for an economic recession; instability of financial institutions; adoption of new tax legislation; fuel shortages; failure to develop and protect new technology; failure of technology to perform as expected; failure to prevent, detect and address cybersecurity incidents or comply with privacy regulations; inability to adapt and manage the benefits and risks of artificial intelligence; negative outcomes of litigation or governmental proceedings; and decisions or developments that result in impairment charges. Please also see the Company's filings with the SEC, including Part I, Item 1A of the Company's most recently filed Annual Report on Form 10-K, as updated by subsequent Quarterly Reports on Form 10-Q, for additional information regarding these and other risks and uncertainties applicable to its business. The Company assumes no obligation to update any forward-looking statement, including financial estimates and forecasts, whether as a result of future events, circumstances or developments or otherwise. NON-GAAP FINANCIAL MEASURES To supplement its financial information, the Company has presented, and/or may discuss on the conference call, adjusted earnings per diluted share, adjusted net income, adjusted income from operations, adjusted operating EBITDA and margin, adjusted SG&A expenses and free cash flow. All of these items are non-GAAP financial measures, as defined in Regulation G of the Securities Exchange Act of 1934, as amended. The Company reports its financial results in compliance with GAAP but believes that also discussing non-GAAP measures provides investors with (i) financial measures the Company uses in the management of its business and (ii) additional, meaningful comparisons of current results to prior periods' results by excluding items that the Company does not believe reflect its fundamental business performance and are not representative or indicative of its results of operations. In addition, the Company's projected future operating EBITDA and margin is anticipated to exclude the effects of other events or circumstances that are not representative or indicative of the Company's results of operations. Such excluded items are not currently determinable, but may be significant, such as asset impairments and one-time items, charges, gains or losses from divestitures or litigation, and other items. Due to the uncertainty of the likelihood, amount and timing of any such items, the Company does not have information available to provide a quantitative reconciliation of such projection to the comparable GAAP measure. The Company discusses free cash flow and provides a projection of free cash flow because the Company believes that it is indicative of its ability to pay its quarterly dividends, repurchase common stock, fund acquisitions and other investments and, in the absence of refinancings, to repay its debt obligations. Free cash flow is not intended to replace "Net cash provided by operating activities," which is the most comparable GAAP measure. The Company believes free cash flow gives investors useful insight into how the Company views its liquidity, but the use of free cash flow as a liquidity measure has material limitations because it excludes certain expenditures that are required or that the Company has committed to, such as declared dividend payments and debt service requirements. The Company defines free cash flow as net cash provided by operating activities, less capital expenditures, plus proceeds from divestitures of businesses and other assets (net of cash divested); this definition may not be comparable to similarly-titled measures reported by other companies. The quantitative reconciliations of non-GAAP measures to the most comparable GAAP measures are included in the accompanying schedules, with the exception of projected adjusted operating EBITDA and margin. Non-GAAP measures should not be considered a substitute for financial measures presented in accordance with GAAP. WASTE MANAGEMENT, INC. SUPPLEMENTAL INFORMATION PROVIDED FOR ILLUSTRATIVE PURPOSES ONLY (In Millions) (Unaudited) Diversity in the structure of recycling contracts results in different accounting treatment for commodity rebates. In accordance with revenue recognition guidance, our Company records gross recycling revenue and records rebates paid to customers as cost of goods sold. Other contract structures allow for netting of rebates against revenue. Additionally, there are differences in whether companies adjust for accretion expense in their calculation of EBITDA. Our Company does not adjust for landfill accretion expenses when calculating operating EBITDA, while other companies do adjust it for the calculation of their EBITDA measure. The table below illustrates the impact that differing contract structures and treatment of accretion expense has on the Company's adjusted operating EBITDA margin results. This information has been provided to enhance comparability and is not intended to replace or adjust GAAP reported results.
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Several major companies, including Teledyne Technologies, Morningstar, Amphenol Corporation, and Waste Management, have released their second quarter 2024 financial results, showcasing resilience and growth in various sectors.
Teledyne Technologies Incorporated reported impressive second quarter results for 2024. The company achieved sales of $1,565.5 million, marking a 2.9% increase compared to the same period last year. Notably, GAAP diluted earnings per share rose to $4.72, up 6.1% from $4.45 in the previous year. Teledyne's performance was driven by strong organic growth in the digital imaging and aerospace and defense electronics segments 1.
Morningstar Inc. released its second quarter 2024 financial results, revealing a mixed performance. The company reported a 6.3% increase in revenue, reaching $504.7 million. However, net income saw a decline of 25.9% to $51.5 million. Adjusted operating income also decreased by 7.0% to $97.1 million. Despite these challenges, Morningstar's CEO, Kunal Kapoor, expressed optimism about the company's long-term growth prospects and highlighted strong performances in key areas such as Morningstar Sustainalytics and PitchBook 2.
Amphenol Corporation reported record results for the second quarter of 2024. The company saw a 3% increase in sales compared to the prior year, reaching $3,248.2 million. Notably, Amphenol achieved record GAAP and Adjusted Diluted EPS, which grew by 7% and 5% respectively. The company's President and CEO, R. Adam Norwitt, attributed this success to Amphenol's agile and entrepreneurial management team. In light of these strong results, Amphenol's Board of Directors approved a 5% increase in the quarterly dividend 3.
Waste Management Inc. announced robust second quarter results for 2024, surpassing expectations. The company reported a 6.4% increase in revenue, reaching $5.41 billion. Operating EBITDA saw significant growth, rising by 8.6% to $1.71 billion. Waste Management's President and CEO, Jim Fish, highlighted the company's strong pricing and operational execution as key factors contributing to these results. The company also raised its full-year financial outlook, demonstrating confidence in its continued growth and performance 4.
The diverse range of companies reporting strong second quarter results suggests a broader economic resilience across multiple sectors. Teledyne's growth in digital imaging and aerospace indicates ongoing technological advancements and defense spending. Morningstar's mixed results, coupled with growth in sustainability-focused services, reflect the increasing importance of ESG considerations in the financial sector. Amphenol's record performance in the interconnect solutions market points to continued demand in electronics and telecommunications. Lastly, Waste Management's strong results and optimistic outlook suggest robust economic activity and effective cost management in the waste services industry.
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