Press Release: Fortive Reports Fourth Quarter 2020 Results
Fortive Reports Fourth Quarter 2020 Results
Fortive Corporation ("Fortive") (NYSE: FTV) today announced results for the fourth quarter 2020.
For the fourth quarter ended December 31, 2020, net earnings from continuing operations were $1.25 billion. For the same period, adjusted net earnings from continuing operations were $252.9 million. Diluted net earnings per share from continuing operations for the fourth quarter ended December 31, 2020 were $3.47. For the same period, adjusted diluted net earnings per share from continuing operations were $0.70.
For the fourth quarter of 2020, revenues from continuing operations increased 4.9% year-over-year to $1.3 billion, which reflected core revenue growth of 0.7%.
James A. Lico, President and Chief Executive Officer, stated, "We are pleased to announce our fourth quarter results which represented a strong finish to 2020. This performance highlighted the benefits of our transformation efforts and demonstrated the increased resilience of our portfolio. In addition to a 19% year-over-year increase in adjusted diluted net earnings per share, we saw continued sequential improvement in top-line performance resulting in total revenue growth of 4.9%, which was above the high end of our guidance, and a return to positive core growth. Through the application of the Fortive Business System, we also drove strong core operating margin expansion and a 39% year-over-year increase in free cash flow."
For the first quarter of 2021, Fortive anticipates diluted net earnings per share from continuing operations to be in the range of $0.18 to $0.22 and adjusted diluted net earnings per share from continuing operations to be in the range of $0.56 to $0.60. For the full year 2021, Fortive anticipates diluted net earnings per share from continuing operations to be in the range of $1.37 to $1.52 and adjusted diluted net earnings per share from continuing operations to be in the range of $2.40 to $2.55.
Mr. Lico added, "In 2020 we made substantial progress across a range of strategic imperatives, despite the challenging environment. Although we are mindful of continued near-term uncertainty, we are in a strong position to build on the progress we have made, and we are optimistic about our ability to continue to invest in innovation to accelerate growth across our portfolio and deliver increasing value for all our stakeholders."
Fortive will discuss results and outlook during its quarterly investor conference call today starting at 5:30 p.m. ET. The call and an accompanying slide presentation will be webcast on the "Investors" section of Fortive's website, www.fortive.com, under "Events & Presentations." A replay of the webcast will be available at the same location shortly after the conclusion of the presentation and will remain available until the next quarterly earnings call.
The conference call can be accessed by dialing 833-900-2302 within the U.S. or by dialing 236-714-2716 outside the U.S. a few minutes before 5:30 p.m. ET and notifying the operator that you are dialing in for Fortive's earnings conference call (access code 5897681). A replay of the conference call will be available two hours after the completion of the call until Thursday, February 18, 2021. Once available, you can access the conference call replay by dialing 800-585-8367 within the U.S. or 416-621-4642 outside the U.S. (access code 5897681) or visit the "Investors" section of the website under "Events & Presentations."
Fortive is a provider of essential technologies for connected workflow solutions across a range of attractive end-markets. The company holds leading positions in intelligent operating solutions, precision technologies, and advanced healthcare solutions. Fortive is headquartered in Everett, Washington and employs a team of more than 17,000 research and development, manufacturing, sales, distribution, service and administrative employees in more than 50 countries around the world. With a culture rooted in continuous improvement, the core of our company's operating model is the Fortive Business System. For more information please visit: www.fortive.com.
On October 9, 2020 (the "Distribution Date"), Fortive completed the separation of its prior Industrial Technologies segment by distributing 80.1% of the outstanding shares of Vontier Corporation ("Vontier"), the entity incorporated to hold such businesses, to Fortive stockholders (the "Separation") on a pro rata basis.
As the Separation occurred during the fourth fiscal quarter of 2020, Fortive has classified Vontier as a discontinued operation in its financial statements for all periods.
DIVESTITURE OF THE A&S BUSINESS
On October 1, 2018, Fortive completed the previously announced split-off of four of our operating companies (the "A&S Business") and the operating results and related assets and liabilities of the A&S Business are presented as discontinued operations for all periods.
NON-GAAP FINANCIAL MEASURES
In addition to the financial measures prepared in accordance with generally accepted accounting principles (GAAP), this earnings release also references "adjusted net earnings," "adjusted diluted net earnings per share," "free cash flow," and "core revenue growth," which are non-GAAP financial measures. The reasons why we believe these measures, when used in conjunction with the GAAP financial measures, provide useful information to investors, how management uses such 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 in the supplemental reconciliation schedule attached. The non-GAAP financial measures should not be considered in isolation or as a substitute for the GAAP financial measures, but should instead be read in conjunction with the GAAP financial measures. The non-GAAP financial measures used by Fortive in this release may be different from similarly-titled non-GAAP measures used by other companies.
Statements in this release that are not strictly historical, including statements regarding the impact of COVID-19 pandemic, business and acquisition opportunities, impact of acquisitions and dispositions, anticipated financial results, economic conditions, future prospects, shareholder value, and any other statements identified by their use of words like "anticipate," "expect," "believe," "outlook," "guidance," or "will" or other words of similar meaning are "forward-looking" statements within the meaning of the federal securities laws. These factors include, among other things: the duration and impact of the COVID-19 pandemic, deterioration of or instability in the economy, the markets we serve, international trade policies and the financial markets, trade relations with China, the phase out of the London Interbank Offered Rate, contractions or lower growth rates and cyclicality of markets we serve, competition, changes in industry standards and governmental regulations, our ability to successfully identify, consummate, integrate and realize the anticipated value of appropriate acquisitions and successfully complete divestitures and other dispositions, our ability to realize the intended benefits of the separation of Vontier, our ability to develop and successfully market new products, software, and services and expand into new markets, the potential for improper conduct by our employees, agents or business partners, impact of divestitures, contingent liabilities relating to acquisitions and divestitures, impact of changes to tax laws, our compliance with applicable laws and regulations and changes in applicable laws and regulations, risks relating to international economic, political, legal, compliance and business factors, risks relating to potential impairment of goodwill and other intangible assets, currency exchange rates, tax audits and changes in our tax rate and income tax liabilities, the impact of our debt obligations on our operations, litigation and other contingent liabilities including intellectual property and environmental, health and safety matters, our ability to adequately protect our intellectual property rights, risks relating to product, service or software defects, product liability and recalls, risks relating to product manufacturing, our relationships with and the performance of our channel partners, commodity costs and surcharges, our ability to adjust purchases and manufacturing capacity to reflect market conditions, reliance on sole sources of supply, security breaches or other disruptions of our information technology systems, adverse effects of restructuring activities, risk related to the tax treatment of our separation of Vontier, impact of our indemnification obligation to Vontier, impact of changes to U.S. GAAP, labor matters, and disruptions relating to man-made and natural disasters. Additional information regarding the factors that may cause actual results to differ materially from these forward-looking statements is available in our SEC filings, including our Annual Report on Form 10-K for the year ended December 31, 2019 and on Form 10-Q for the quarters ended March 27, 2020, June 26, 2020 and September 25, 2020. These forward-looking statements speak only as of the date of this release, and Fortive does not assume any obligation to update or revise any forward-looking statement, whether as a result of new information, future events and developments or otherwise.
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