UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of Report: May 3, 2022
(Date of earliest event reported)
 


ITT INC.
(Exact name of registrant as specified in its charter)  
 
     
Indiana
001-05672
81-1197930
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(I.R.S. Employer
Identification No.)
     
 
1133 Westchester Avenue
White Plains, New York 10604
 
 
(Principal Executive Office)
 
 
Telephone Number: (914) 641-2000
 
     
 
Not Applicable
 
Former name or former address, if changed since last report
 

 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 


Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 


Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 


Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 


Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Securities registered pursuant to Section 12(b) of the Act:

Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, par value $1 per share
ITT
New York Stock Exchange
 
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).  Emerging growth company
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 

Item 2.02. Results of Operations and Financial Condition.

On May 3, 2022, ITT Inc. issued a press release reporting the financial results for the first fiscal quarter ended April 2, 2022.  A copy of the press release is attached to this Current Report on Form 8-K (“Current Report”) as Exhibit 99.1 and is incorporated by reference herein solely for purposes of this Item 2.02 disclosure.

The information in Item 2.02 of this Current Report, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of such section. The information in Item 2.02 of this Current Report, including Exhibit 99.1 attached hereto, shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

Item 9.01.
Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.
 
Description
 
     
104
 
Cover Page Interactive Data File (embedded within the Inline XBRL Document)

SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
ITT Inc.
 
(Registrant)
       
May 3, 2022
By:
/s/ Mary E. Gustafsson
   
Name:
Mary E. Gustafsson
   
Title:
Senior Vice President and General Counsel
     
(Authorized Officer of Registrant)

Exhibit 99.1

ITT Reports First-Quarter Earnings Per Share of $0.88, Adjusted EPS of $0.97

  • Revenue up 4% (7% organic) driven primarily by Connect & Control Technologies (CCT)
  • Orders up 11% (14% organic) driven by strong demand in Industrial Process (IP) and CCT
  • Deployed over $235 million of capital, including $186 million of share repurchases
  • Announced $140 million acquisition of Habonim, a specialty valves manufacturer, in Q2
  • Maintaining full year 2022 revenue, segment margin and adjusted EPS guidance

WHITE PLAINS, N.Y.--(BUSINESS WIRE)--May 3, 2022--ITT Inc. (NYSE: ITT) today reported financial results for the first quarter ended April 2, 2022. The company reported a year-over-year revenue increase of 4.0%, up 6.8% on an organic basis. This was primarily driven by strong demand for connectors and aerospace components in CCT and short-cycle products in IP, strength in Motion Technologies (MT) Friction aftermarket, and pricing actions that contributed approximately 3% to organic revenue growth – most notably in MT.

Segment operating margin of 14.6% for the first quarter declined 240 basis points versus prior year driven by significant cost inflation, which negatively impacted margins by 760 basis points year over year, a charge related to the suspension of operations in Russia, and strategic investments for growth. This was partially offset by pricing actions and productivity savings across the businesses, and higher sales volume primarily in CCT.

Earnings per share of $0.88 for the first quarter declined 11.0% versus prior year due to lower segment operating income, which included a charge related to the suspension of operations in Russia, partially offset by the benefit of share repurchases and a lower effective tax rate. Excluding the impact of the Russia charge and other items, adjusted earnings per share of $0.97 declined 8.5% versus prior year driven by significantly higher material and overhead costs which more than offset the operational improvements and pricing actions.

Operating cash flow for the first quarter declined $73.5 million to $(2.7) million primarily due to lower segment operating income, increased working capital investments to support sales growth and to mitigate continued supply chain disruptions, and timing of accounts receivable collections.


 
Table 1. First Quarter Performance


Q1 2022
Q1 2021
Change

Revenue $

726.2



$

698.4



4.0

%

Organic







6.8

%

Segment Operating Income $

105.8



$

118.8



(10.9)

%

Segment Operating Margin

14.6

%

17.0

%

(240)

bps

Adjusted Segment Operating Income $

116.4



$

122.1



(4.7)

%

Adjusted Segment Operating Margin

16.0

%

17.5

%

(150)

bps

Earnings Per Share $

0.88



$

0.99



(11.1)

%

Adjusted Earnings Per Share $

0.97



$

1.06



(8.5)

%

Operating Cash Flow $

(2.7)



$

70.8



(103.8)

%

Free Cash Flow $

(32.7)



$

53.6



(161.0)

%












 

Note: all results unaudited






















 

Management Commentary

“Once again, this quarter all of our ITTers around the world drove a solid performance, focusing relentlessly on the right priorities, further demonstrating ITT’s resiliency. We fought a significant labor shortage at the beginning of 2022 stemming from the sudden and sharp rise in the COVID-19 omicron variant in January. We faced inflation that was higher than planned in raw materials and overhead costs as well as labor shortages in North America. And, we are now managing the impacts of the war in Ukraine which in the quarter impacted our Friction, rail, and Industrial Process businesses. Still, despite all these challenges, the team delivered on its commitments in Q1,” said Luca Savi, Chief Executive Officer and President of ITT.

“We continued to outperform in the main end markets where we participate and are investing for the future. In the first quarter we drove 14% organic orders growth on the strength of Industrial Process and Connect & Control Technologies. We generated 7% organic revenue growth driven by all businesses despite continued labor, material, and supply constraints, with CCT growing 23% organically. We deployed over $235 million of capital, including to repurchase $186 million of ITT shares, reducing our share count by 2%. Finally, on April 4th we announced the acquisition of Habonim, an Israeli-based manufacturer of specialty ball valves and actuation technologies, which further demonstrates our commitment to strategically deploy our capital,” Savi continued.

Savi concluded, “There are clear headwinds in the near term. We are taking actions to address these challenges and continue to invest in the future of ITT, both organically and through M&A, to ensure we grow profitability and outperform over the long term.”


 
Table 2. First Quarter Segment Results


Revenue
Operating Income


Q1 2022 Reported
Increase /
(Decrease)
Organic
Growth /
(Decline)

Q1 2022 Reported
Increase /
(Decrease)
Adjusted
Increase /
(Decrease)

Motion Technologies $

370.1


0.3

%

4.0

%
$

59.7


(21.4)

%

(14.7)

%

Industrial Process

202.2


-

%

1.9

%

20.4


(34.2)

%

(19.1)

%

Connect & Control Technologies

154.6


21.4

%

23.2

%

25.7


117.8

%

81.7

%

Total segment results

726.2


4.0

%

6.8

%

105.8


(10.9)

%

(4.7)

%
















 

Note: all results unaudited; excludes intercompany eliminations; comparisons to Q1 2021


















 

Motion Technologies revenue increased primarily due to demand in Friction’s aftermarket business. Operating income decreased to $59.7 million primarily due to significantly higher material inflation, partially offset by pricing actions and productivity savings.

Industrial Process revenue was flat year over year due to growth in the short cycle businesses within the general industrial and chemical markets, offset by a decline in pump project activity. IP’s results continue to be impacted by labor shortages, supplier delays, and extended lead times, principally in the projects business. Operating income decreased to $20.4 million primarily due to higher material inflation, partially offset by productivity savings, favorable sales mix, and pricing actions.

Connect & Control Technologies revenue increased due to strong connector sales, principally in the industrial market, and higher component sales in commercial aerospace and defense. Operating income increased to $25.7 million primarily driven by productivity savings, higher sales volume, and limited pricing actions, partially offset by higher material costs and unfavorable sales mix.

2022 Guidance

We continue to expect revenue growth of 7% to 9%, or up 9% to 11% on an organic basis; segment operating margin of 17.5% to 18.4%; and adjusted segment operating margin of 17.6% to 18.5%, up 40 to 130 bps. We now expect earnings per share of $4.07 to $4.50, with no change to adjusted earnings per share of $4.30 to $4.70 per share, up 6% to 16%. Free cash flow is now expected to be in a range of $250 million to $300 million, representing free cash flow margin of approximately 8% to 10% for the full year.

The company’s 2022 guidance assumes continued disruptions in the global supply chain stemming from labor shortages, supplier delays, and raw material inflation, which we anticipate will persist through at least the first half of 2022. The guidance also assumes a significant reduction in sales in Russia stemming from the conflict in Ukraine, which we currently estimate will impact revenue by approximately $60 to $85 million for the full year. The guidance does not include the potential impact, if any, of a prolonged shutdown in China due to the reemergence of COVID-19.


Investor Conference Call Details

ITT’s management will host a conference call for investors on Tuesday, May 3 at 8:30 a.m., Eastern Time. The briefing can be accessed live via webcast which is available on the company’s website: investors.itt.com. A replay of the webcast will be available for 90 days following the presentation. A replay will also be available telephonically from two hours after the webcast until Tuesday, May 17, 2022, at midnight, Eastern Time. Reconciliations of non-GAAP financial performance metrics to their most comparable U.S. GAAP financial performance metrics are defined and presented below and should not be considered a substitute for, nor superior to, the financial data prepared in accordance with U.S. GAAP.

Safe Harbor Statement

This release contains “forward-looking statements” intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. In addition, the conference call (including the financial results presentation material) may include, and officers and representatives of ITT may from time to time make and discuss, projections, goals, assumptions, and statements that may constitute “forward-looking statements”. These forward-looking statements are not historical facts, but rather represent only a belief regarding future events based on current expectations, estimates, assumptions and projections about our business, future financial results, and the industry in which we operate, and other legal, regulatory, and economic developments. These forward-looking statements include, but are not limited to, future strategic plans and other statements that describe the company’s business strategy, outlook, objectives, plans, intentions or goals, and any discussion of future events and future operating or financial performance.

We use words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “target,” “future,” “may,” “will,” “could,” “should,” “potential,” “continue,” “guidance” and other similar expressions to identify such forward-looking statements. Forward-looking statements are uncertain, and, by their nature, many are inherently unpredictable and outside of ITT’s control, and involve known and unknown risks, uncertainties and other important factors that could cause actual results to differ materially from those expressed or implied in, or reasonably inferred from, such forward-looking statements.

Where in any forward-looking statement we express an expectation or belief as to future results or events, such expectation or belief is based on current plans and expectations of our management, expressed in good faith, and believed to have a reasonable basis. However, we cannot provide any assurance that the expectation or belief will occur or that anticipated results will be achieved or accomplished.

Among the factors that could cause our results to differ materially from those indicated by forward-looking statements are risks and uncertainties inherent in our business including, without limitation:


  • impacts on our business due to the COVID-19 pandemic, including:
    • variant strains of the virus, as well as the timing, effectiveness and availability of, and people’s receptivity to, vaccines or other medical remedies;
    • disruptions to our operations and demand for our products, increased costs, disruption of supply chain and other constraints in the availability of key commodities and other necessary services;
    • government-mandated site closures, employee illness, skilled labor shortages, the impact of potential travel restrictions, stay-in-place restrictions, and vaccination requirements on our business and workforce; and
    • customer and supplier bankruptcies, impacts to the global economy and financial markets, and liquidity challenges in accessing capital markets;
  • uncertain global economic and capital markets conditions, including those due to COVID-19, trade disputes between the U.S. and its trading partners, political and social unrest, and the availability and fluctuations in prices of steel, oil, copper, tin, and other commodities;
  • volatility in raw material prices and our suppliers’ ability to meet quality and delivery requirements;
  • failure to manage the distribution of products and services effectively;
  • failure to compete successfully and innovate in our markets;
  • failure to protect our intellectual property rights or violations of the intellectual property rights of others;
  • the extent to which there are quality problems with respect to manufacturing processes or finished goods;
  • the risk of cybersecurity breaches;
  • loss of or decrease in sales from our most significant customers;
  • risks due to our operations and sales outside the U.S. and in emerging markets;
  • the impacts on our business from the military conflict between Russia and Ukraine, and the global response to it;
  • fluctuations in foreign currency exchange rates and the impact of such fluctuations on our hedging arrangements;
  • fluctuations in interest rates and the impact of such fluctuations on our cost of debt;
  • fluctuations in demand or customers’ levels of capital investment and maintenance expenditures, especially in the oil and gas, chemical, and mining markets, or changes in our customers’ anticipated production schedules, especially in the commercial aerospace market;
  • the risk of material business interruptions, particularly at our manufacturing facilities;
  • risk of liabilities from past divestitures and spin-offs;
  • failure of portfolio management strategies, including cost-saving initiatives, to meet expectations;
  • risks related to government contracting, including changes in levels of government spending and regulatory and contractual requirements applicable to sales to the U.S. government;
  • fluctuations in our effective tax rate, including as a result of possible tax reform legislation in the U.S. and other jurisdictions;
  • changes in environmental laws or regulations, discovery of previously unknown or more extensive contamination, or the failure of a potentially responsible party to perform;
  • failure to comply with the U.S. Foreign Corrupt Practices Act (or other applicable anti-corruption legislation), export controls and trade sanctions, including tariffs;
  • risk of product liability claims and litigation; and
  • changes in laws relating to the use and transfer of personal and other information.

The forward-looking statements included in this release speak only as of the date hereof. We undertake no obligation (and expressly disclaim any obligation) to update any forward-looking statements, whether written or oral or as a result of new information, future events or otherwise. More information on factors that could cause actual results or events to differ materially from those anticipated is included in the Risk Factors section of the Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other documents filed from time to time with the Securities and Exchange Commission.



 
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)













 
For the Three Months Ended April 2, 2022
April 3, 2021
Revenue $

726.2

 



$

698.4

 


Cost of revenue

507.8

 




469.4

 


Gross profit

218.4

 




229.0

 


General and administrative expenses

60.4

 




58.1

 


Sales and marketing expenses

38.4

 




36.7

 


Research and development expenses

25.0

 




24.3

 


Operating income

94.6

 




109.9

 


Interest and non-operating income, net

(0.2

)




(1.3

)


Income from continuing operations before income tax expense

94.8

 




111.2

 


Income tax expense

19.5

 




24.7

 


Net income

75.3

 




86.5

 


Less: Income attributable to noncontrolling interests

0.5

 




0.3

 


Net income attributable to ITT Inc. $

74.8

 



$

86.2

 









 
Earnings (loss) per share attributable to ITT Inc.:






Basic $

0.88

 



$

1.00

 


Diluted $

0.88

 



$

0.99

 









 
Weighted average common shares – basic

84.8

 




86.3

 


Weighted average common shares – diluted

85.2

 




86.9

 









 

CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)






(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)







April 2, 2022
December 31,
2021
Assets
Current assets:


Cash and cash equivalents $

710.4



$

647.5


Receivables, net

615.8




555.1


Inventories, net

475.6




430.9


Other current assets

102.7




88.6


Total current assets

1,904.5




1,722.1


Non-current assets:


Plant, property and equipment, net

504.9




509.1


Goodwill

918.5




924.3


Other intangible assets, net

80.9




85.7


Other non-current assets

316.8




324.2


Total non-current assets

1,821.1




1,843.3


Total assets $

3,725.6



$

3,565.4


Liabilities and Shareholders’ Equity






Current liabilities:






Commercial paper and current maturities of long-term debt $

487.0



$

197.6


Accounts payable

411.0




373.4


Accrued liabilities

344.3




357.3


Total current liabilities

1,242.3




928.3


Non-current liabilities:






Postretirement benefits

196.4




199.9


Other non-current liabilities

196.7




206.5


Total non-current liabilities

393.1




406.4


Total liabilities

1,635.4




1,334.7


Shareholders’ equity:






Common stock:






Authorized – 250.0 shares, $1 par value per share






Issued and outstanding – 83.6 shares and 85.5 shares, respectively

83.6




85.5


Retained earnings

2,334.6




2,461.6


Total accumulated other comprehensive loss

(333.3

)



(321.3

)

Total ITT Inc. shareholders’ equity

2,084.9




2,225.8


Noncontrolling interests

5.3




4.9


Total shareholders’ equity

2,090.2




2,230.7


Total liabilities and shareholders’ equity $

3,725.6



$

3,565.4








 
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)




(IN MILLIONS)








 
For the Three Months Ended April 2, 2022
April 3, 2021
Operating Activities




Income from continuing operations attributable to ITT Inc. $

74.8

 



$

86.2

 


Adjustments to income from continuing operations:






Depreciation and amortization

27.3

 




28.5

 


Equity-based compensation

3.7

 




3.3

 


Other non-cash charges, net

10.2

 




6.3

 


Changes in assets and liabilities:






Change in receivables

(70.7

)




(50.1

)


Change in inventories

(48.4

)




(21.2

)


Change in contract assets

(1.7

)




0.6

 


Change in contract liabilities

11.8

 




(2.7

)


Change in accounts payable

48.6

 




36.6

 


Change in accrued expenses

(42.5

)




(12.4

)


Change in income taxes

10.1

 




10.4

 


Other, net

(25.9

)




(14.7

)


Net Cash – Operating Activities

(2.7

)




70.8

 


Investing Activities






Capital expenditures

(30.0

)




(17.2

)


Other, net

0.6

 




0.1

 


Net Cash – Investing Activities

(29.4

)




(17.1

)


Financing Activities






Commercial paper, net borrowings

290.7

 




(42.6

)


Long-term debt, repayments

-

 




(0.1

)


Share repurchases under repurchase plan

(163.9

)




(50.0

)


Share repurchases from net settlement of employee stock incentive plans

(8.4

)




(11.0

)


Dividends paid

(22.4

)




(19.1

)


Other, net

0.6

 




-

 


Net Cash – Financing Activities

96.6

 




(122.8

)


Exchange rate effects on cash and cash equivalents

(1.5

)




(10.4

)


Net cash – operating activities of discontinued operations

(0.1

)




(0.1

)


Net change in cash and cash equivalents

62.9

 




(79.6

)


Cash and cash equivalents – beginning of year (includes restricted cash of $0.8 and $0.8, respectively)

648.3

 




860.6

 


Cash and Cash Equivalents – End of Period (includes restricted cash of $0.8 and $0.8, respectively) $

711.2

 



$

781.0

 


Supplemental Disclosures of Cash Flow Information






Cash paid during the year for:






Interest $

0.5

 



$

0.2

 


Income taxes, net of refunds received $

8.5

 



$

13.4

 



Key Performance Indicators and Non-GAAP Measures

Management reviews a variety of key performance indicators including revenue, segment operating income and margins, earnings per share, order growth, and backlog, some of which are calculated on a non-GAAP basis. In addition, we consider certain measures to be useful to management and investors when evaluating our operating performance for the periods presented. These measures provide a tool for evaluating our ongoing operations and management of assets from period to period. This information can assist investors in assessing our financial performance and measures our ability to generate capital for deployment among competing strategic alternatives and initiatives, including, but not limited to, acquisitions, dividends, and share repurchases. Some of these metrics, however, are not measures of financial performance under accounting principles generally accepted in the United States of America (GAAP) and should not be considered a substitute for measures determined in accordance with GAAP. We consider the following non-GAAP measures, which may not be comparable to similarly titled measures reported by other companies, to be key performance indicators for purposes of our reconciliation tables.
Organic Revenues and Organic Orders are defined, respectively, as revenue and orders, excluding the impacts of foreign currency fluctuations and acquisitions. The period-over-period change resulting from foreign currency fluctuations is estimated using a fixed exchange rate for both the current and prior periods. Management believes that reporting organic revenue and organic orders provides useful information to investors by helping identify underlying trends in our business and facilitating comparisons of our revenue performance with prior and future periods and to our peers.
Adjusted Operating Income and Adjusted Segment Operating Income are defined, respectively, as total operating income and segment operating income, adjusted to exclude special items that include, but are not limited to, restructuring, severance, certain asset impairment charges, certain acquisition-related impacts, unusual or infrequent operating items and, for 2021, asbestos-related impacts. Special items represent charges or credits that impact current results, which management views as unrelated to the Company's ongoing operations and performance. Adjusted Operating Margin and Adjusted Segment Operating Margin are defined as adjusted operating income or adjusted segment operating income divided by revenue. Adjusted Segment Decremental or Incremental Operating Margin is defined as the change in adjusted segment operating income divided by the change in revenue. We believe these financial measures are useful to investors and other users of our financial statements in evaluating ongoing operating profitability, as well as in evaluating operating performance in relation to our competitors.
Adjusted Income from Continuing Operations and Adjusted EPS are defined, respectively, as income from continuing operations attributable to ITT Inc. and income from continuing operations attributable to ITT Inc. per diluted share, adjusted to exclude special items that include, but are not limited to, restructuring, severance, certain asset impairment charges, certain acquisition-related impacts, income tax settlements or adjustments, unusual or infrequent items, and, for 2021, asbestos-related impacts. Special items represent charges or credits, on an after-tax basis, that impact current results which management views as unrelated to the Company's ongoing operations and performance. The after-tax basis of each special item is determined using the jurisdictional tax rate of where the expense or benefit occurred. We believe that adjusted income from continuing operations is useful to investors and other users of our financial statements in evaluating ongoing operating profitability, as well as in evaluating operating performance in relation to our competitors.
Free Cash Flow is defined as net cash provided by operating activities less capital expenditures. Free Cash Flow Margin is defined as free cash flow divided by revenue. We believe that free cash flow and free cash flow margin provides useful information to investors as it provides insight into a primary cash flow metric used by management to monitor and evaluate cash flows generated by our operations.

ITT Inc. Non-GAAP Reconciliation
Reported vs. Organic Revenue / Orders
First Quarter 2022 & 2021
(In Millions)
(all amounts unaudited)


















 

(As Reported - GAAP)
(As Adjusted - Organic)


















 

(A)
(B)
(C)


(D)
(E)
(F) = A-D-E
(G) =C-D-E
(H) = G / B





$ Change
% Change




Revenue /
$ Change
% Change





2022 vs.
2021


2022 vs.
2021


Acquisitions
FX Impact
Orders
Adj. 2022
vs. 2021

Adj. 2022
vs. 2021


Q1 2022
Q1 2021


Q1 2022
Q1 2022
Q1 2022




















 
Revenue

















ITT Inc.

$

726.2


$

698.4


$

27.8

 


4.0

%


$

-


$

(19.9

)


$

746.1


$

47.7


6.8

%




















 
Motion Technologies

 

370.1


 

369.1


 

1.0

 


0.3

%


 

-


 

(13.9

)


 

384.0


 

14.9


4.0

%


Industrial Process

 

202.2


 

202.3


 

(0.1

)


0.0

%


 

-


 

(3.9

)


 

206.1


 

3.8


1.9

%


Connect & Control Technologies

 

154.6


 

127.3


 

27.3

 


21.4

%


 

-


 

(2.2

)


 

156.8


 

29.5


23.2

%




















 


















 


















 
Orders

















ITT Inc.

$

812.1


$

732.9


$

79.2

 


10.8

%


$

-


$

(21.3

)


$

833.4


$

100.5


13.7

%




















 
Motion Technologies

 

369.2


 

372.3


 

(3.1

)


(0.8

%)


 

-


 

(14.1

)


 

383.3


 

11.0


3.0

%


Industrial Process

 

260.1


 

215.5


 

44.6

 


20.7

%


 

-


 

(4.5

)


 

264.6


 

49.1


22.8

%


Connect & Control Technologies

 

183.8


 

145.4


 

38.4

 


26.4

%


 

-


 

(2.7

)


 

186.5


 

41.1


28.3

%




















 


















 
Note: Excludes intercompany eliminations












Immaterial differences due to rounding






























 

ITT Inc. Non-GAAP Reconciliation
Reported vs. Organic Orders (Sequential)
First Quarter 2022 vs. Fourth Quarter 2021
(In Millions)
(all amounts unaudited)


















 

(As Reported - GAAP)
(As Adjusted - Organic)


















 

(A)
(B)
(C)


(D)
(E)
(F) = A-D-E
(G) =C-D-E
(H) = G / B





$ Change
% Change






$ Change
% Change





Q1 '22
vs. Q4 '21

Q1 '22
vs. Q4 '21

Acquisitions
FX Impact
Orders
Q1 '22
vs. Q4 '21

Q1 '22
vs. Q4 '21


Q1 2022
Q4 2021


Q1 2022
Q1 2022
Q1 2022




















 


















 
Orders

















ITT Inc.

$

812.1


$

722.2


$

89.9


12.4

%


$

-


$

(4.5

)


$

816.6


$

94.4


13.1

%




 
ITT Inc. Non-GAAP Reconciliation
Reported vs Adjusted Segment Operating Income & Segment Operating Margin
First Quarter 2022 & 2021
(In Millions)
(all amounts unaudited)


















 

Q1 2022
Q1 2022

Q1 2022
Q1 2021
Q1 2021

Q1 2021
% Change
% Change

As
Reported

Special
Items


As
Adjusted

As
Reported

Special
Items


As
Adjusted

As Reported
2022 vs. 2021

As Adjusted
2022 vs. 2021



















 
Revenue:

















Motion Technologies

$

370.1

 





$

370.1

 


$

369.1

 





$

369.1

 


0.3%


0.3%


Industrial Process

 

202.2

 





 

202.2

 


 

202.3

 





 

202.3

 


0.0%


0.0%


Connect & Control Technologies

 

154.6

 





 

154.6

 


 

127.3

 





 

127.3

 


21.4%


21.4%


Intersegment eliminations

 

(0.7

)





 

(0.7

)


 

(0.3

)





 

(0.3

)






Total Revenue

$

726.2

 





$

726.2

 


$

698.4

 





$

698.4

 


4.0%


4.0%




















 
Operating Margin:

















Motion Technologies

 

16.1

%


 

140


BP

 

17.5

%


 

20.6

%


 

-


BP

 

20.6

%


(450)

BP

(310)

BP

Industrial Process

 

10.1

%


 

270


BP

 

12.8

%


 

15.3

%


 

50


BP

 

15.8

%


(520)

BP

(300)

BP

Connect & Control Technologies

 

16.6

%


 

10


BP

 

16.7

%


 

9.3

%


 

190


BP

 

11.2

%


730

BP

550

BP

Total Operating Segments

 

14.6

%


 

140


BP

 

16.0

%


 

17.0

%


 

50


BP

 

17.5

%


(240)

BP

(150)

BP



















 


















 
Operating Income:

















Motion Technologies

$

59.7

 


$

5.1



$

64.8

 


$

76.0

 


$

-



$

76.0

 


(21.4%)


(14.7%)


Industrial Process

 

20.4

 


 

5.4



 

25.8

 


 

31.0

 


 

0.9



 

31.9

 


(34.2%)


(19.1%)


Connect & Control Technologies

 

25.7

 


 

0.1



 

25.8

 


 

11.8

 


 

2.4



 

14.2

 


117.8%


81.7%


Total Segment Operating Income

$

105.8

 


$

10.6



$

116.4

 


$

118.8

 


$

3.3



$

122.1

 


(10.9%)


(4.7%)




















 
Note: Immaterial differences due to rounding.






















 
Special items include, but are not limited to, restructuring, severance costs, acquisition-related expenses, and other unusual or infrequent items.


ITT Inc. Non-GAAP Reconciliation
Reported vs. Adjusted Income from Continuing Operations & Adjusted EPS
First Quarter 2022 & 2021
(In Millions, except per share amounts)
(all amounts unaudited)















 

Q1 2022


Q1 2022
Q1 2021


Q1 2021
$ Change
% Change

As
Reported

Non-GAAP
Adjustments

As
Adjusted

As
Reported

Non-GAAP
Adjustments

As
Adjusted

As Adjusted
2022 vs. 2021

As Adjusted
2022 vs. 2021















 
Segment operating income

$

105.8

 


$

10.6

 

#A

$

116.4

 


$

118.8

 


$

3.3

 

#A

$

122.1

 





Corporate (expense) income

 

(11.2

)


 

0.9

 

#B

 

(10.3

)


 

(8.9

)


 

3.8

 

#B

 

(5.1

)





Operating income (loss)

 

94.6

 


 

11.5

 


 

106.1

 


 

109.9

 


 

7.1

 


 

117.0

 


 

(10.9

)


(9.3

%)

Operating margin

 

13.0

%




 

14.6

%


 

15.7

%




 

16.8

%




















 
Interest income (expense), net

 

-

 


 

-

 


 

-

 


 

0.6

 


 

-

 


 

0.6

 





Other income (expense), net

 

0.2

 


 

-

 


 

0.2

 


 

0.7

 


 

-

 


 

0.7

 





Income from continuing operations before tax

 

94.8

 


 

11.5

 


 

106.3

 


 

111.2

 


 

7.1

 


 

118.3

 




















 
Income tax (expense) benefit

 

(19.5

)


 

(3.4

)

#C

 

(22.9

)


 

(24.7

)


 

(1.3

)

#C

 

(26.0

)





Income from continuing operations

 

75.3

 


 

8.1

 


 

83.4

 


 

86.5

 


 

5.8

 


 

92.3

 




















 
Less: Income attributable to noncontrolling interests

 

0.5

 


 

-

 


 

0.5

 


 

0.3

 


 

-

 


 

0.3

 





Income from continuing operations - ITT Inc.

$

74.8

 


$

8.1

 


$

82.9

 


$

86.2

 


$

5.8

 


$

92.0

 




















 
EPS from continuing operations

$

0.88

 


$

0.09

 


$

0.97

 


$

0.99

 


$

0.07

 


$

1.06

 


$

(0.09

)


(8.5

%)
















 
Note: Amounts may not calculate due to rounding.

#A -


2022 includes impacts related to the Russia-Ukraine conflict ($8.8M), severance costs ($1.5M) and restructuring costs ($0.3M).

#A -


2021 includes restructuring costs ($3.3M).


















 

#B -


2022 includes severance and other costs ($0.9M).

#B -


2021 includes asbestos related expense ($2.4M), other costs ($1.1M) and restructuring costs ($0.3M).


 

#C-


2022 includes the net tax benefit of special items #A and #B ($2.2M) and tax benefit for valuation allowance impacts of ($2.8M), partially offset by tax expense on future distribution of foreign earnings ($1.7M) and other tax-related special items.


 

#C -


2021 includes the net tax benefit of special items #A and #B ($1.3M) and tax benefit for valuation allowance impacts ($2.1M), partially offset by tax expense on future distribution of foreign earnings ($2.5M) and other tax related special items.


 

ITT Inc. Non-GAAP Reconciliation
Free Cash Flow
First Quarter 2022 & 2021
(In Millions)
(all amounts unaudited)




 

 

3M 2022

 


 

3M 2021






 
Net Cash - Operating Activities

$

(2.7

)


$

70.8






 
Capital expenditures

 

30.0

 


 

17.2






 
Free Cash Flow

$

(32.7

)


$

53.6



ITT Inc. Non-GAAP Reconciliation
GAAP vs. Adjusted EPS Guidance
Full Year 2022
(Per share amounts)
(all amounts unaudited)




 


2022 Full-Year Guidance


Low
High




 
EPS from Continuing Operations - GAAP

$

4.07

 


$

4.50

 





 
Estimated restructuring, net of tax

 

0.05

 


 

0.03

 





 
Other special items, net of tax

 

0.19

 


 

0.18

 





 
Other tax special Items

 

(0.01

)


 

(0.01

)





 
EPS from Continuing Operations - Adjusted

$

4.30

 


$

4.70

 

Note:

The Company has provided forward-looking non-GAAP financial measures for organic revenue growth and adjusted

 

 


segment operating margin. It is not possible, without unreasonable efforts, to estimate the impacts of foreign currency

 


fluctuations, acquisitions and certain other special items that may occur in 2022 as these items are inherently uncertain

 


and difficult to predict. As a result, the Company is unable to quantify certain amounts that would be included in a

 

 


reconciliation of organic revenue growth and adjusted segment operating margin to the most directly comparable GAAP



financial measures without unreasonable efforts and has not provided reconciliations for these forward looking non-GAAP
financial measures. 


ITT Inc. Non-GAAP Reconciliation
Free Cash Flow and Free Cash Flow Margin Guidance
Full Year 2022
(In Millions)
(all amounts unaudited)





 


2022 Full-Year Guidance


Low
High





 
Net Cash - Operating Activities

$

405.0

 


$

455.0

 







 
Capital expenditures

 

155.0

 


 

155.0

 







 
Free Cash Flow

 

250.0

 


 

300.0

 







 
Revenue #A

$

2,986.0

 


$

2,986.0

 







 
Free Cash Flow margin

 

8

%


 

10

%







 
#A Represents the midpoint of the revenue range provided of 7% to 9%.

 

Contacts

Investor:
Mark Macaluso
+1 914-641-2064
mark.macaluso@itt.com

Media:
Kellie Harris
+1 914-641-2103
kellie.harris@itt.com