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- **Revenue Growth Accelerates**: Q3 revenue up 10.9% YoY to $448M, driven by 6% volume (8% share gains) and 4% pricing.
- **Profitability Expansion**: Adjusted EBITDA margin improved to 20.4%, with full-year EBITDA margin target raised to 19.5%-20%.
- **Strategic Focus**: $81M share buybacks since program launch, 10% dividend increase, and M&A pipeline review.
- **Operational Milestone**: Cummins separation completed, freeing resources to pursue 4-pillar growth strategy.
- **Growth Catalysts**: Stellantis Ram product stocking ($44M volume boost), aftermarket channel expansion, and industrial filtration M&A exploration.

**【CEO Summary Section】**
- Completed operational separation from Cummins, enabling focus on growth and redeployment of resources.
- Third-quarter revenue grew 10.9% YoY to $448 million, driven by 6% volume, 4% pricing, and 1% FX. Adjusted EBITDA rose to $92 million (20.4% margin) vs. $79 million (19.6% margin) last year.
- Capital allocation: $30M share buybacks (total $61M YTD), 10% dividend increase, and M&A pipeline review.
- 4-pillar growth strategy progress: expanding first-fit partnerships, aftermarket channel expansion, supply chain optimization, and industrial filtration M&A exploration.
- Full-year revenue guidance raised to $1.72B-$1.745B (3%-4.5% growth), with EBITDA margin target of 19.5%-20%.

**【CFO Financial Commentary】**
- Q3 gross margin improved to $129M vs. $111M last year, driven by pricing and volumes, offset by higher logistics costs.
- Operating expenses stable at $56M, with $8M joint venture income.
- Free cash flow of $72M (vs. $65M last year), supported by $218M cash and $618M liquidity.
- No further separation costs expected post-Q3, with IT stabilization costs impacting Q4 margins.

**【Q&A Key Highlights】**
- **Volume Growth Drivers**: 8% share gains offset 2% market headwinds, including Stellantis Ram product stocking ($44M YoY volume increase).
- **Share Gains**: 3% full-year target driven by first-fit content expansion and aftermarket wins, particularly in North America.
- **Tariffs & Pricing**: 3% full-year pricing includes cost mitigation, with 2026 price actions contingent on market clarity.
- **Aftermarket Trends**: Freight recession expected to persist through H1 2026, limiting aftermarket recovery.
- **Industrial Filtration**: M&A pipeline active, with focus on industrial air, liquids (non-water), and water markets.
- **Competitive Positioning**: Expanding aftermarket channels to capitalize on competitors' challenges, e.g., First Brands bankruptcy.

Atmus Filtration Technologies Inc. (ATMU) Q3 2025 Earnings Call Transcript

- **Record Q2 Performance**: $454 million sales (+4.8% YoY), driven by pricing, volume, and share gains.
- **Strategic Separation Completion**: Operational separation from Cummins expected in Q3 2025.
- **Share Repurchase Acceleration**: $20 million in Q2, with full-year repurchases targeting 1-3% of market cap.
- **Updated Guidance**: 2025 revenue $1.685-1.735 billion (1-4% growth), adjusted EPS $2.40-2.60.
- **Tariff Mitigation**: Price-cost neutral strategy with $4 million incremental Q3 pricing adjustments.
- **Industrial Expansion**: M&A pipeline active, focusing on $50-100 million+ targets.

**【CEO Opening Remarks】**
- Q2 2025 sales reached a record $454 million, up 4.8% YoY, driven by pricing, volume growth, and share gains despite challenging global markets.
- Operational separation from Cummins is on track for completion in Q3 2025, with $10-15 million in one-time costs and capital expenditures.
- Share repurchases accelerated in Q2 ($20 million), bringing YTD total to $30 million, with full-year repurchases expected to be 1-3% of market cap.

**【CEO Growth Strategy Update】**
1. **First-Fit Share Growth**: 
   - Bid rate for new business increased, but timing of awards delayed due to trade and regulatory uncertainty.
   - U.S. heavy/medium-duty truck markets expected to decline 15-25% YoY due to regulatory uncertainty.
2. **Aftermarket Expansion**: 
   - Distributor partnerships and data analytics driving share gains, with pricing contributing 2.2% YoY growth.
   - Freight activity expected to remain stable, with Atmus outperforming market trends.
3. **Supply Chain Transformation**: 
   - 100% control of distribution network post-South Africa transition, improving on-shelf availability.
4. **Industrial Filtration Expansion**: 
   - Pipeline of M&A opportunities ($50-100 million+ revenue targets), with disciplined financial criteria.

**【CFO Financial Highlights】**
- Adjusted EBITDA: $95 million (21% margin) vs. $93 million (21.4%) in Q2 2024.
- Adjusted EPS: $0.75 vs. $0.71 in Q2 2024.
- Free cash flow: $36 million vs. $34 million in Q2 2024.
- Full-year guidance updated to $1.685-1.735 billion in revenue (1-4% YoY growth) and $2.40-2.60 in adjusted EPS.

**【Q&A Highlights】**
1. **Tariff Pricing Adjustments**: 
   - Q2 pricing impact of $5 million, with $4 million expected in Q3 and $3-4 million in Q4 to maintain price-cost neutrality.
2. **M&A Strategy**: 
   - Pipeline remains robust, with focus on industrial air, liquids (non-water), and water filtration.
3. **EBITDA Margin Outlook**: 
   - Full-year margin raised to 19.25-20%, with Q2 margin at 21% and Q3/Q4 expected to reflect volume headwinds.
4. **Liquidity Position**: 
   - $591 million in available liquidity (cash + revolver), supporting M&A and share buybacks.


Atmus Filtration Technologies Inc. (ATMU) Q2 2025 Earnings Call Transcript

- **Resilient Q1 performance**: $417M revenue (-2.4% YoY) driven by FX headwinds, with EBITDA margin improving to 19.6%.
- **2025 outlook**: Flat to +4% revenue growth, targeting 19%-20% EBITDA margin and $2.35-$2.60 EPS.
- **Tariff mitigation**: 1.5% pricing adjustment for China tariffs, 80%+ products USMCA-compliant.
- **Share repurchase program**: $30M executed since July 2024, $120M remaining under $150M authorization.
- **Supply chain transformation**: 95% distribution network transitioned, new South Korea media plant operational.
- **Pricing acceleration**: 3.2% annualized rate to ramp in Q3/Q4.

**【CEO Summary Section】**
- Q1 2025 revenue of $417 million (-2.4% YoY) driven by unfavorable FX (-3%) and soft market conditions, partially offset by pricing (+1%).
- Adjusted EBITDA of $82 million (19.6% margin) vs. $80 million (18.8%) prior year, benefiting from cost control and separation-related expenses.
- 2025 outlook: Flat to +4% revenue ($1.67B-$1.735B), 19%-20% EBITDA margin, $2.35-$2.60 EPS.
- Key initiatives: 
  - **Tariff mitigation**: 1.5% pricing adjustment for China tariffs, 80%+ products USMCA-compliant.
  - **Market share growth**: 2%+ aftermarket revenue expansion via multichannel distribution and data analytics.
  - **Supply chain transformation**: 95% distribution network transitioned from Cummins, new Mado, South Korea media plant operational.
  - **Industrial M&A**: Actively evaluating 3 verticals (industrial air, liquids, water) with disciplined approach.

**【CFO Financial Commentary】**
- Q1 2025: 
  - GAAP net income $53 million, Non-GAAP EPS $0.63 (vs. $0.60 prior year).
  - Free cash flow $20 million (vs. -$13M prior year), driven by working capital efficiency.
  - Onetime separation costs $9 million (revised FY25 guidance: $10M-$15M).
  - Balance sheet: $183M cash, $583M liquidity, 1.2x net debt/EBITDA.
- FY25 capital allocation: $30M share buybacks (total $30M repurchased since July 2024), $120M remaining under $150M authorization.

**【Q&A Key Themes】**
1. **Tariff Strategy**: 
  - 1.5% pricing adjustment for China tariffs, 3.2% annualized pricing impact.
  - Short-term: USMCA compliance, logistics rerouting. No long-term manufacturing shifts planned.
2. **M&A Activity**: 
  - Industrial filtration pipeline active, but market volatility slowing deal flow.
  - Focus on 3 verticals: industrial air, liquids (non-water), water.
3. **Market Outlook**: 
  - Aftermarket: Flat YoY (vs. prior +1.5% growth assumption) due to freight activity weakness.
  - First-fit: U.S. heavy-duty down 5%-15%, medium-duty down 10%-20%.
  - Pricing ramp: 3.2% annualized rate to accelerate in Q3/Q4.


Atmus Filtration (ATMU)-2 May 25-2025 Q1 Earnings call transcript

- **2024 Strong Performance**: 2.5% revenue growth, 19.7% EBITDA margin, $20M share buybacks.
- **2025 Outlook**: Flat to +4% revenue, 19%-20% EBITDA margin, $2.35-$2.60 EPS.
- **Strategic Wins**: New European OEM deal, NanoNet N3 media launch, 2%+ aftermarket share gain.
- **Risk Management**: FX headwinds, China market weakness, tariffs priced-in with contingency plans.
- **Growth Drivers**: Supply chain efficiency (+410bps margin since 2022), targeted first-fit investments, industrial M&A pipeline.

**【CEO Summary Section】**
- **2024 Yearly Highlights**: Achieved $1.67B revenue, 2.5% YoY growth; adjusted EBITDA margin expanded to 19.7% (up 110bps). Completed operational separation from Cummins, repurchased $20M shares, and launched brand campaign focusing on filtration innovation.
- **4-Pillar Growth Strategy Progress**: 
  1. **First-Fit Share Growth**: Won new European OEM deal, launched NanoNet N3 media for compact, high-performance filters.
  2. **Aftermarket Outperformance**: 2%+ market share gain vs. 2024 industry decline; expanded Fleetguard distribution in Latin America.
  3. **Supply Chain Transformation**: 95% of distribution network transitioned; adjusted EBITDA margin +410bps since 2022.
  4. **Industrial Filtration Expansion**: Actively pursuing acquisitions in air, liquid, and water filtration verticals.
- **2025 Outlook**: Flat to +4% revenue ($1.67B-$1.735B); adjusted EBITDA margin 19%-20%; EPS $2.35-$2.60. Anticipate soft first-half markets with potential H2 recovery.

**【CFO Financial Commentary】**
- **Q4 2024 Results**: 
  - Sales $407M (+1.8% YoY), driven by 2% volume and 1% pricing, offset by 1% FX.
  - Adjusted EBITDA $78M (19.1%), up 100bps YoY.
  - Adjusted EPS $0.58, +18% YoY.
  - Free cash flow $28M (excludes $14M one-time costs).
- **Full Year 2024**: 
  - Adjusted EBITDA $330M (+9%), margin 19.7%.
  - Free cash flow $115M (vs. $152M prior year, due to Belgium warehouse transition).
- **2025 Guidance**: 
  - $5M-$10M one-time separation costs.
  - Net debt/EBITDA ~1.2x, $184M cash on hand.

**【Q&A Key Themes】**
- **Profitability**: 2024 EBITDA margin exceeded guidance; 2025 margin range reflects FX headwinds and input cost inflation.
- **Market Growth**: Aftermarket expected +0% to +3%, first-fit flat to -10%. China market visibility limited; U.S. heavy-duty flat to -10%.
- **Tariff Risk Management**: Priced-in China tariffs; contingency plans for Mexico tariffs include pricing, sourcing shifts.
- **Supply Chain Resilience**: 95% of distribution network transitioned; Belgium warehouse nearing full capacity.
- **Industrial Expansion**: Inorganic pipeline active; organic product launch in early stages with limited 2025 contribution.

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