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Press Release: Fortive Reports Fourth Quarter -3-

· 02/04/2021 16:15
-- Excluding on a pretax basis amortization of acquisition-related intangible assets; -- Excluding on a pretax basis acquisition and other transaction costs deemed significant ("Transaction Costs"); -- Excluding on a pretax basis the effect of deferred revenue and inventory fair value adjustments related to significant acquisitions; -- Excluding on a pretax basis the effect of earnings or loss from our equity method investments; -- Excluding the non-recurring gain on our retained investment in Vontier common stock, net of pretax extinguishment costs associated with the Debt-for-Equity Exchange to the extent applicable; -- Excluding on a pretax basis the effect of the net gain on the disposition of the Tektronix Video Business, -- Excluding on a pretax basis the non-cash interest expense associated with our 0.875% convertible senior notes; -- Excluding on a pretax basis the cost incurred pursuant to discrete restructuring plans that are fundamentally different (in terms of the size, strategic nature, and planning requirements, as well as the inconsistent frequency of such plans), from ongoing productivity improvements (the "Discrete Restructuring Charges"); -- Excluding on a pretax basis the non-recurring gain on the disposition of assets; -- Excluding the tax effect (to the extent tax deductible) of the adjustments noted above. The tax effect of such adjustments was calculated by applying our overall estimated effective tax rate to the pretax amount of each adjustment (unless the nature of the item and/or the tax jurisdiction in which the item has been recorded requires application of a specific tax rate or tax treatment, in which case the tax effect of such item is estimated by applying such specific tax rate or tax treatment). We expect to apply our overall estimated effective tax rate to each adjustment going forward; -- Excluding the non-cash discrete tax expense resulting from the Separation of Vontier; and -- Including the impact of the assumed conversion of our Mandatory Convertible Preferred Stock.------------- --------- Cash flows from investing activities: Cash paid for acquisitions, net of cash received (40.4) (3,939.8) Payments for additions to property, plant and equipment (75.7) (74.5) Proceeds from sale of property 5.3 -- ------------- --------- Total investing cash used in continuing operations (110.8) (4,014.3) Total investing cash used in discontinued operations (37.6) (40.3) ------------- --------- Net cash used in investing activities (148.4) (4,054.6) ------------- --------- Cash flows from financing activities: Net proceeds from (repayments of) commercial paper borrowings (1,141.9) 494.8 Proceeds from borrowings (maturities greater than 90 days), net of $8 million and $24 million of issuance costs in 2020 and 2019, respectively 741.7 2,913.2 Repayment of borrowings (maturities greater than 90 days) (1,730.8) (455.3) Payment of common stock cash dividend to shareholders (94.4) (93.8) Payment of mandatory convertible preferred stock cash dividend to shareholders (69.0) (69.0) Net cash consideration received from Vontier Separation 1,598.0 -- All other financing activities 20.7 23.2 ------------- --------- Total financing cash (used in) provided by continuing operations (675.7) 2,813.1 Total financing cash used in discontinued operations (20.4) (10.2) ------------- --------- Net cash (used in) provided by financing activities (696.1) 2,802.9 ------------- --------- Effect of exchange rate changes on cash and equivalents 27.4 7.1 Net change in cash and equivalents 619.6 26.8 ------------- --------- Beginning balance of cash and equivalents $ 1,205.2 $ 1,178.4 --------- -------- Ending balance of cash and equivalents $ 1,824.8 $ 1,205.2 --------- -------- Supplemental disclosure: Distribution of non-cash net liabilities to Vontier Corporation $ 147.4 $ -- This information is presented for reference only. Final audited financial statements will include footnotes, which should be referenced when available, to more fully understand the contents of this information. FORTIVE CORPORATION AND SUBSIDIARIES SEGMENT INFORMATION (unaudited) ($ in millions) Three Months Ended Year Ended ----------------------------- ------------------------------ December 31, December 31, December 31, December 31, 2020 2019 2020 2019 ------------- -------------- -------------- -------------- Sales: Intelligent Operating Solutions $ 544.9 $ 527.8 $1,883.7 $1,898.9 Precision Technologies 464.2 453.6 1,651.3 1,808.4 Advanced Healthcare Solutions 315.8 281.9 1,099.4 856.6 -------- -------- --- -------- --- -------- --- Total $1,324.9 $1,263.3 $4,634.4 $4,563.9 ======= ======= === ======= === ======= === Operating Profit: Intelligent Operating Solutions $ 104.8 $ 74.2 $ 317.8 $ 289.0 Precision Technologies 89.0 79.2 321.7 324.6 Advanced Healthcare Solutions 18.0 12.0 2.1 (72.0) Other (a) (27.9) (25.5) (102.2) (97.7) -------- -------- --- -------- --- -------- --- Total $ 183.9 $ 139.9 $ 539.4 $ 443.9 ======= ======= === ======= === ======= === Operating Margins: Intelligent Operating Solutions 19.2 % 14.1 % 16.9 % 15.2 % Precision Technologies 19.2 % 17.5 % 19.5 % 17.9 % Advanced Healthcare Solutions 5.7 % 4.3 % 0.2 % (8.4) % Total 13.9 % 11.1 % 11.6 % 9.7 % (a) Operating profit amounts in the Other category consist of unallocated corporate costs and other costs not considered part of our evaluation of reportable segment operating performance. This information is presented for reference only. Final audited financial statements will include footnotes, which should be referenced when available, to more fully understand the contents of this information.

FORTIVE CORPORATION AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

AND OTHER INFORMATION

Adjusted Net Earnings from Continuing Operations and Adjusted Diluted Net Earnings per Share from Continuing Operations

We disclose the non-GAAP measures of historical adjusted net earnings from continuing operations and historical and forecasted adjusted diluted net earnings per share from continuing operations, which to the extent applicable, make the following adjustments to GAAP net earnings and GAAP diluted net earnings per share:

Acquisition and Divestiture Related Items

While we have a history of acquisition and divestiture activity, we do not acquire and divest of businesses and assets on a predictable cycle. The amount of an acquisition's purchase price allocated to intangible assets and related amortization term and the deferred revenue and inventory fair value adjustments are unique to each acquisition and can vary significantly from acquisition to acquisition. In addition, the Transaction Costs and non-recurring gain on disposition of assets are unique to each transaction, are impacted from period to period depending on the number of acquisitions or divestitures evaluated, pending, or completed during such period, and the complexity of such transactions. We adjust for, and identify as significant, Transaction Costs, acquisition related fair value adjustments to deferred revenue and inventory, and corresponding restructuring charges primarily related to acquisitions, in each case, incurred in a given period, if we determine that such costs and adjustments exceed the range of our typical transaction costs and adjustments, respectively, in a given period. We believe, however, that it is important for investors to understand that such intangible assets contribute to revenue generation and that intangible assets and deferred revenue and inventory fair value adjustments related to past acquisitions will recur in future periods until such intangible assets and deferred revenue and inventory fair value adjustments, as applicable, have been fully amortized.

Equity Method Investments

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February 04, 2021 16:15 ET (21:15 GMT)