01—Abstract
Summary
Summary of the 10-Q filed April 24, 2024. Cited figures are marked; the original filing is the authoritative source.
Veralto Corporation (VLTO) reported unaudited results for the three-month period ended March 29, 2024 in this Form 10-Q.
Sales rose 1.8% to $1,246 milliona from $1,225 million, and gross profit increased to $747 million from $708 million, with gross margin of 60.0% versus 57.8%. Net earnings declined to $184 million from $225 million, driven by higher operating expenses, standalone public company costs, interest expense following the Separation from Danaher, and a $15 million loss on the sale of a product line. Diluted EPS was $0.74 compared with $0.91 a year earlier.
The Water Quality segment grew sales 2.7% to $749 million and operating profit rose to $181 millionb, while Product Quality & Innovation sales were essentially flat at $497 million with operating profit of $133 million. Management expects positive secular growth drivers in industrial water markets, steady municipal demand, and a modest recovery in consumer-packaged goods markets as the year progresses.
Cash and cash equivalents were $827 millionc at quarter end against $2,618 million of long-term debt. Operating cash flow fell to $115 million from $156 million, reflecting $57 million of cash interest and $32 million of cash taxes, and the company paid $22 million in dividends, declaring a regular quarterly dividend of $0.09 per share.
02—Key points
Key Highlights
- Sales increased 1.8% to $1,246 million; Water Quality sales rose 2.7% to $749 million while Product Quality & Innovation sales rose 0.4% to $497 million.
- Gross profit margin improved to 60.0% from 57.8%, supported by positive pricing actions, lower material costs and productivity gains.
- Net earnings fell to $184 million from $225 million, and diluted EPS declined to $0.74 from $0.91, due to higher SG&A, stand-alone public company costs and post-Separation interest expense of $28 million.
- A $15 million loss on the sale of a Water Quality product line was recorded in other income (expense), net.
- Operating cash flow decreased to $115 million from $156 million, primarily reflecting cash interest payments of $57 million and cash tax payments of $32 million.
- Long-term debt was $2,618 million at March 29, 2024, with $827 million in cash and cash equivalents; no amounts were outstanding under the credit facility or commercial paper program.
- The company declared a regular quarterly dividend of $0.09 per share, payable April 30, 2024.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2024, Veralto kept $0.15.
- Revenue$1.25B100.0%
- Cost of revenue−$499.0M40.0%
- Gross profit$747.0M60.0%
- Operating costs−$454.0M36.4%
- Operating income$293.0M23.5%
- Interest, other & tax−$109.0M8.7%
- Net income$184.0M14.8%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2024filed April 24, 2024Financial Statements
Q1 FY2024 against Q1 FY2023
| Line item | Q1 FY2024Q1 FY2023 | Change |
|---|---|---|
| Revenue | $1.25B$1.23B | +1.7% |
| Cost of Revenue | $499.00M$517.00M | −3.5% |
| Gross Profit | $747.00M$708.00M | +5.5% |
| R&D Expenses | $60.00M$56.00M | +7.1% |
| SG&A Expenses | $394.00M$360.00M | +9.4% |
| Operating Income | $293.00M$292.00M | +0.3% |
| Interest Expense | $28.00M$0 | — |
| Net Income | $184.00M$225.00M | −18.2% |
| EPS (Basic) | $0.75$0.91 | −17.6% |
| EPS (Diluted) | $0.74$0.91 | −18.7% |
| Shares Outstanding (Basic) | 246.90M246.30M | +0.2% |
| Shares Outstanding (Diluted) | 248.80M246.30M | +1.0% |
05—Questions
Frequently Asked Questions
How did Veralto's revenue and profitability perform in the first quarter of 2024?
Sales increased 1.8% to $1,246 million and operating profit was $293 million, essentially flat versus $292 million a year earlier. Operating margin declined to 23.5% from 23.8%, while net earnings fell to $184 million from $225 million.
What drove the decline in net earnings?
The filing attributes the decrease to higher operating expenses, standalone public company costs, interest expense after the Separation from Danaher, and a loss on the sale of a product line. SG&A rose to $394 million from $360 million.
How did the two business segments perform?
Water Quality sales rose to $749 million from $729 million and operating profit rose to $181 million from $168 million. Product Quality & Innovation sales were $497 million versus $496 million, and operating profit fell to $133 million from $135 million.
What is the company's debt and liquidity position?
Long-term debt was $2,618 million at March 29, 2024, and cash and cash equivalents totaled $827 million. The company was in compliance with its debt covenants, and no amounts were outstanding under its credit facility or commercial paper program.
What is the outlook for 2024?
Management expects positive secular growth drivers across industrial water markets, particularly in North America, and steady demand at municipalities. In Product Quality & Innovation, it expects steady, modest recovery in consumer-packaged goods markets as the year progresses.
06—Continue