01—Abstract
Summary
Summary of the 10-Q filed October 24, 2024. Cited figures are marked; the original filing is the authoritative source.
Veralto Corporation's Form 10-Q for the quarter ended September 27, 2024 shows third-quarter sales of $1.314 billiona, up from $1.255 billion a year earlier, with net earnings of $219 million versus $205 million and diluted EPS of $0.88 versus $0.83.
For the nine months, sales were $3.848 billionb (versus $3.733 billion) and net earnings were $606 million, down from $639 million, with diluted EPS of $2.43 versus $2.59. The filing attributes the nine-month earnings decline to standalone public company costs, interest expense following the Separation from Danaher, sales and marketing growth investments, and a net loss on product line dispositions. Management reports core sales growth of 4.6% for the quarter and 3.4% year to date, and gross profit margin of 59.6% for the quarter versus 57.6% a year earlier.
Cash and cash equivalents rose to $1.267 billionc from $762 million at year-end 2023, and long-term debt was $2.639 billion. Operating cash flow was $590 million for the nine months, down from $700 million, reflecting cash interest payments of $137 million and cash tax payments of $209 million. The company declared a regular quarterly dividend of $0.09 per share, and the filing states that substantially all private notes were exchanged for registered notes in the exchange offer that expired September 3, 2024.
After the quarter end, on October 4, 2024, the company completed its acquisition of Information Exchange Holdings, Inc., the holding company that owns TraceGains, for $350 milliond, subject to customary post-closing adjustments. The company describes the acquisition as complementing its Product Quality & Innovation segment, specifically the packaging and color solutions business.
02—Key points
Key Highlights
- Third-quarter sales were $1.314 billion, up from $1.255 billion; net earnings were $219 million versus $205 million, and diluted EPS was $0.88 versus $0.83.
- Nine-month net earnings declined to $606 million from $639 million, with diluted EPS of $2.43 versus $2.59, citing standalone public company costs, post-Separation interest expense, and sales and marketing investments.
- Core sales grew 4.6% in the third quarter and 3.4% year to date; gross profit margin was 59.6% for the quarter versus 57.6% a year earlier.
- Water Quality segment operating profit rose to $195 million in the quarter from $188 million; Product Quality & Innovation operating profit rose to $137 million from $99 million.
- Operating cash flow was $590 million for the nine months, down from $700 million, with cash interest payments of $137 million and cash tax payments of $209 million.
- Cash and cash equivalents were $1.267 billion at September 27, 2024, versus $762 million at December 31, 2023; long-term debt was $2.639 billion.
- On October 4, 2024, the company completed the $350 million acquisition of Information Exchange Holdings, Inc. (TraceGains), a cloud-based compliance software provider, subject to customary post-closing adjustments.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2024, Veralto kept $0.17.
- Revenue$1.31B100.0%
- Cost of revenue−$531.0M40.4%
- Gross profit$783.0M59.6%
- Operating costs−$475.0M36.1%
- Operating income$308.0M23.4%
- Interest, other & tax−$89.0M6.8%
- Net income$219.0M16.7%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2024filed October 24, 2024Financial Statements
Q3 FY2024 against Q3 FY2023
| Line item | Q3 FY2024Q3 FY2023 | Change |
|---|---|---|
| Revenue | $1.31B$1.25B | +4.7% |
| Cost of Revenue | $531.00M$532.00M | −0.2% |
| Gross Profit | $783.00M$723.00M | +8.3% |
| R&D Expenses | $63.00M$55.00M | +14.5% |
| SG&A Expenses | $412.00M$395.00M | +4.3% |
| Operating Income | $308.00M$273.00M | +12.8% |
| Net Income | $219.00M$205.00M | +6.8% |
| EPS (Basic) | $0.89$0.83 | +7.2% |
| EPS (Diluted) | $0.88$0.83 | +6.0% |
| Shares Outstanding (Basic) | 247.40M246.30M | +0.4% |
| Shares Outstanding (Diluted) | 250.00M246.30M | +1.5% |
05—Questions
Frequently Asked Questions
How did Veralto perform in the third quarter of 2024?
Sales rose to $1.314 billion from $1.255 billion, and net earnings increased to $219 million from $205 million. Diluted EPS was $0.88 compared with $0.83. Core sales grew 4.6%, and operating profit was $308 million versus $273 million.
Why did nine-month net earnings decline despite higher sales?
The filing attributes the decline to standalone public company costs, interest expense following the Separation from Danaher, select investments in sales and marketing growth initiatives, and a net loss on the disposition of product lines. Interest expense was $85 million for the nine months, compared with $5 million a year earlier.
What is the status of the company's cash position and debt?
Cash and cash equivalents were $1.267 billion at September 27, 2024, of which about $467 million was held in the United States and about $800 million outside it. Long-term debt was $2.639 billion, and there were no amounts outstanding under the credit facility or commercial paper program.
What acquisition did Veralto announce after the quarter ended?
On October 4, 2024, Veralto completed its acquisition of Information Exchange Holdings, Inc., the holding company for TraceGains, for $350 million, subject to customary post-closing adjustments. The company says it complements the packaging and color solutions business within the Product Quality & Innovation segment.
What dividend did the company declare?
In the third quarter of 2024, the company declared a regular quarterly dividend of $0.09 per share, payable October 31, 2024 to holders of record as of September 27, 2024. Dividends paid during the nine months totaled $67 million.
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