2024 Q2 Form 10-Q Financial Statement

#000173570724000025 Filed on April 25, 2024

View on sec.gov

Income Statement

Concept 2024 Q2 2024 Q1 2023 Q1
Revenue $890.0M $915.0M $970.0M
YoY Change -11.97% -5.67% 7.66%
Cost Of Revenue $705.0M $743.0M $781.0M
YoY Change -12.86% -4.87% 7.58%
Gross Profit $185.0M $172.0M $189.0M
YoY Change -8.42% -8.99% 8.0%
Gross Profit Margin 20.79% 18.8% 19.48%
Selling, General & Admin $61.00M $64.00M $56.00M
YoY Change -3.17% 14.29% 5.66%
% of Gross Profit 32.97% 37.21% 29.63%
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $22.00M $22.00M $21.00M
YoY Change 0.0% 4.76% -4.55%
% of Gross Profit 11.89% 12.79% 11.11%
Operating Expenses $61.00M $65.00M $56.00M
YoY Change -4.69% 16.07% 5.66%
Operating Profit $124.0M $107.0M $133.0M
YoY Change -10.14% -19.55% 9.02%
Interest Expense -$62.00M -$31.00M $28.00M
YoY Change 106.67% -210.71% 21.74%
% of Operating Profit -50.0% -28.97% 21.05%
Other Income/Expense, Net $1.000M $5.000M $4.000M
YoY Change -114.29% 25.0% -85.71%
Pretax Income $87.00M $81.00M $108.0M
YoY Change -13.86% -25.0% -13.6%
Income Tax $23.00M $15.00M $27.00M
% Of Pretax Income 26.44% 18.52% 25.0%
Net Earnings $64.00M $66.00M $81.00M
YoY Change -131.84% -18.52% -7.95%
Net Earnings / Revenue 7.19% 7.21% 8.35%
Basic Earnings Per Share $0.29 $0.28 $0.13
Diluted Earnings Per Share $0.28 $0.28 $0.13
COMMON SHARES
Basic Shares Outstanding 226.0M shares 238.3M shares 64.84M shares
Diluted Shares Outstanding 225.9M shares 239.0M shares 65.97M shares

Balance Sheet

Concept 2024 Q2 2024 Q1 2023 Q1
SHORT-TERM ASSETS
Cash & Short-Term Investments $98.00M $196.0M $291.0M
YoY Change -79.5% -32.65% -7.62%
Cash & Equivalents $98.00M $196.0M $291.0M
Short-Term Investments
Other Short-Term Assets $85.00M $83.00M $124.0M
YoY Change -3.41% -33.06% 69.86%
Inventory $272.0M $272.0M $301.0M
Prepaid Expenses
Receivables $561.0M $616.0M $673.0M
Other Receivables $175.0M $171.0M $215.0M
Total Short-Term Assets $1.192B $1.338B $1.605B
YoY Change -31.57% -16.64% 8.45%
LONG-TERM ASSETS
Property, Plant & Equipment $438.0M $495.0M $462.0M
YoY Change -11.52% 7.14% -1.49%
Goodwill $193.0M $193.0M $193.0M
YoY Change 0.0% 0.0% 0.0%
Intangibles
YoY Change
Long-Term Investments $11.00M $30.00M $32.00M
YoY Change -62.07% -6.25% -3.03%
Other Assets $196.0M $372.0M $259.0M
YoY Change -52.31% 43.63% 10.21%
Total Long-Term Assets $1.037B $1.110B $1.186B
YoY Change -9.83% -6.41% -1.82%
TOTAL ASSETS
Total Short-Term Assets $1.192B $1.338B $1.605B
Total Long-Term Assets $1.037B $1.110B $1.186B
Total Assets $2.229B $2.448B $2.791B
YoY Change -22.93% -12.29% 3.83%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $984.0M $1.029B $1.123B
YoY Change -13.38% -8.37% 4.86%
Accrued Expenses $283.0M $219.0M $348.0M
YoY Change 16.94% -37.07% 15.23%
Deferred Revenue $14.00M $10.00M $10.00M
YoY Change 55.56% 0.0% 11.11%
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due $7.000M $7.000M $7.000M
YoY Change -88.33% 0.0% 0.0%
Total Short-Term Liabilities $1.274B $1.319B $1.478B
YoY Change -16.07% -10.76% 7.1%
LONG-TERM LIABILITIES
Long-Term Debt $1.465B $1.633B $1.157B
YoY Change -17.33% 41.14% -0.77%
Other Long-Term Liabilities $191.0M $201.0M $208.0M
YoY Change -6.37% -3.37% -23.25%
Total Long-Term Liabilities $1.656B $1.834B $1.365B
YoY Change -16.19% 34.36% -5.01%
TOTAL LIABILITIES
Total Short-Term Liabilities $1.274B $1.319B $1.478B
Total Long-Term Liabilities $1.656B $1.834B $1.365B
Total Liabilities $2.954B $3.183B $2.871B
YoY Change -15.96% 10.87% -5.71%
SHAREHOLDERS EQUITY
Retained Earnings -$1.792B -$1.856B -$1.446B
YoY Change -2.29% 28.35% -15.09%
Common Stock $0.00 $0.00 $0.00
YoY Change
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity -$725.0M -$735.0M -$80.00M
YoY Change
Total Liabilities & Shareholders Equity $2.229B $2.448B $2.791B
YoY Change -22.93% -12.29% 3.83%

Cashflow Statement

Concept 2024 Q2 2024 Q1 2023 Q1
OPERATING ACTIVITIES
Net Income $64.00M $66.00M $81.00M
YoY Change -131.84% -18.52% -7.95%
Depreciation, Depletion And Amortization $22.00M $22.00M $21.00M
YoY Change 0.0% 4.76% -4.55%
Cash From Operating Activities $126.0M $84.00M $92.00M
YoY Change -23.17% -8.7% 26.03%
INVESTING ACTIVITIES
Capital Expenditures $17.00M $32.00M $8.000M
YoY Change -32.0% 300.0% -72.41%
Acquisitions
YoY Change
Other Investing Activities $63.00M $4.000M
YoY Change 600.0%
Cash From Investing Activities $46.00M -$28.00M -$8.000M
YoY Change -387.5% 250.0% -72.41%
FINANCING ACTIVITIES
Cash Dividend Paid $0.00 $42.00M
YoY Change -100.0%
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities -272.0M -112.0M -$44.00M
YoY Change -747.62% 154.55% -77.55%
NET CHANGE
Cash From Operating Activities 126.0M 84.00M $92.00M
Cash From Investing Activities 46.00M -28.00M -$8.000M
Cash From Financing Activities -272.0M -112.0M -$44.00M
Net Change In Cash -100.0M -56.00M $44.00M
YoY Change -152.63% -227.27% -130.56%
FREE CASH FLOW
Cash From Operating Activities $126.0M $84.00M $92.00M
Capital Expenditures $17.00M $32.00M $8.000M
Free Cash Flow $109.0M $52.00M $84.00M
YoY Change -21.58% -38.1% 90.91%

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<div style="margin-top:10pt;text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Note 1. Background and Basis of Presentation</span></div><div style="margin-top:10pt;text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:700;line-height:120%">Background</span></div><div style="margin-top:10pt;text-align:justify;text-indent:21.6pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Garrett Motion Inc. (the “Company” or “Garrett”), is a cutting-edge technology leader delivering differentiated solutions for emission reduction and energy efficiency. We design, manufacture, and sell highly engineered turbocharging, air and fluid compression, and high-speed electric motor technologies to original equipment manufacturers (“OEMs”) and distributors within the mobility and industrial space. We have significant expertise in delivering products at scale for internal combustion engines using gasoline, diesel, natural gas, and hydrogen, as well as for zero emission technologies using hydrogen fuel cell systems, both for mobility and industrial use. As our customers continue to progress on electrification, we are applying our technological pillars to develop highly engineered E-Powertrain and E-Cooling compressor products to support their ambition. These products are key enablers for fuel economy, energy efficiency, thermal management, and compliance with emissions standards and overall greenhouse gas and other emission reduction targets.</span></div><div style="margin-top:10pt;text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:700;line-height:120%">Basis of Presentation</span></div><div style="margin-top:10pt;text-align:justify;text-indent:21.6pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The accompanying unaudited Consolidated Interim Financial Statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission applicable to interim financial statements. While these statements reflect all normal recurring adjustments that are, in the opinion of management, necessary for fair presentation of the results of the interim period, they do not include all of the information and footnotes required by United States generally accepted accounting principles (“GAAP”) for complete financial statements. The unaudited Consolidated Interim Financial Statements should therefore be read in conjunction with the Consolidated Financial Statements and accompanying notes for the year ended December 31, 2023</span><span style="background-color:#ffffff;color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> included in our Annual Report on Form 10-K, as filed with the Securities and Exchange Commission on February 15, 2024 (our “2023 Form 10-K”). The results of operations and cash flows for the three months ended March 31, 2024 should not necessarily be taken as indicative of the entire year. All amounts presented are in millions, except per share amounts. </span></div><div style="margin-top:10pt;text-align:justify;text-indent:21.6pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">We report our quarterly financial information using a calendar convention: the first, second and third quarters are consistently reported as ending on March 31, June 30 and September 30. It has been our practice to establish actual quarterly closing dates using a predetermined fiscal calendar, which requires our businesses to close their books on a Saturday to minimize the potentially disruptive effects of quarterly closing on our business processes. For differences in actual closing dates that are material to year-over-year comparisons of quarterly or year-to-date results, such differences have been adjusted for the three months ended March 31, 2024. Our actual closing dates for the three months ended March 31, 2024 and 2023 were March 30, 2024 and April 1, 2023, respectively.</span></div><div style="margin-top:10pt;text-align:justify;text-indent:21.6pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">We evaluate segment reporting in accordance with ASC 280, </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Segment Reporting</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">. We concluded that Garrett operates in a single operating segment and a single reportable segment based on the operating results available and evaluated regularly by the chief operating decision maker (“CODM”), which is our Chief Executive Officer, to make decisions about resource allocation and performance assessment. The CODM makes operational performance assessments and resource allocation decisions on a consolidated basis, inclusive of all of the Company’s products across channels and geographies.</span></div><div style="margin-top:10pt;text-align:justify;text-indent:21.6pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The preparation of the financial statements in conformity with GAAP requires management to make estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases these estimates on assumptions that it believes to be reasonable under the circumstances. Actual results could differ from the original estimates, requiring adjustments to these balances in future periods.</span></div>
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