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New words:
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Removed:
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Financial report summary
?Risks
- We have exposure to the risks associated with instability in the global economy and financial markets, which may negatively impact our revenues, liquidity, suppliers and customers.
- Information systems failure or disruption, due to cyber terrorism or other actions, may adversely impact our business and result in financial loss to the Company or liability to our customers.
- More than half of our sales and operations are in non-U.S. jurisdictions and we are subject to the economic, political, regulatory and other risks of international operations.
- A natural disaster, catastrophe, pandemic, geopolitical tensions or other event could adversely affect our operations.
- Large or rapid increases in the cost of raw materials and component parts, substantial decreases in their availability or our dependence on particular suppliers of raw materials and component parts could materially and adversely affect our operating results.
- We face competition in the markets we serve, which could materially and adversely affect our operating results.
- Shareholder, customer and regulatory agency emphasis on environmental, social, and governance responsibility may impose additional costs on us or expose us to new risks.
- Acquisitions, including integrating such acquisitions, and dispositions create certain risks and may affect our operating results.
- Our results of operations are subject to exchange rate and other currency risks. A significant movement in exchange rates could adversely impact our results of operations and cash flows.
- If we are unable to develop new products and technologies, our competitive position may be impaired, which could materially and adversely affect our sales and market share.
- Our business could suffer if we experience employee work stoppages, union and work council campaigns or other labor difficulties.
- Changes in tax or other laws, regulations, or adverse determinations by taxing or other governmental authorities could increase our effective tax rate and cash taxes paid or otherwise affect our financial condition or operating results.
- Our success depends on our ability to attract, retain and develop key personnel and other talent throughout the Company.
- The risk of non-compliance with U.S. and foreign laws and regulations applicable to our international operations could have a significant impact on our results of operations, financial condition or strategic objectives.
- Third parties may infringe upon our intellectual property or may claim we have infringed their intellectual property, and we may expend significant resources enforcing or defending our rights or suffer competitive injury.
- The loss of, or disruption in, our distribution network could have a negative impact on our abilities to ship products, meet customer demand and otherwise operate our business.
- Our ongoing and expected restructuring plans and other cost savings initiatives may not be as effective as we anticipate, and we may fail to realize the cost savings and increased efficiencies that we expect to result from these actions. Our operating results could be negatively affected by our inability to effectively implement such restructuring plans and other cost savings initiatives.
- Cost overruns, delays, penalties or liquidated damages could negatively impact our results, particularly with respect to fixed-price contracts for custom engineered products.
- Our operating results could be adversely affected by a loss or reduction of business with key customers or consolidation or the vertical integration of our customer base.
- Credit and counterparty risks could harm our business.
- We are a defendant in certain asbestos and silica-related personal injury lawsuits, which could adversely affect our financial condition.
- The nature of our products creates the possibility of significant product liability and warranty claims, which could harm our business.
- A significant portion of our assets consists of goodwill and other intangible assets, the value of which may be reduced if we determine that those assets are impaired.
- Environmental compliance costs and liabilities could adversely affect our financial condition.
- We face risks associated with our pension and other postretirement benefit obligations.
- Our indebtedness could have important adverse consequences and adversely affect our financial condition.
- We may not be able to generate sufficient cash to service all of our indebtedness, and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.
- The terms of the credit agreement governing the Senior Secured Credit Facilities (as amended, the "Credit Agreement") may restrict our current and future operations, particularly our ability to respond to changes or to take certain actions.
- Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.
- We utilize derivative financial instruments to reduce our exposure to market risks from changes in interest rates on our variable rate indebtedness and we will be exposed to risks related to counterparty credit worthiness or non-performance of these instruments.
- If the financial institutions that are part of the syndicate of our Revolving Credit Facility (as defined herein) fail to extend credit under our Revolving Credit Facility, our liquidity and results of operations may be adversely affected.
Management Discussion
- (1)See the “Non-GAAP Financial Measures” section for a reconciliation to comparable GAAP measure.
- Revenues for the three month period ended March 31, 2024 were $1,670.1 million, an increase of $40.8 million, or 2.5%, compared to $1,629.3 million for the same three month period in 2023. The increase in revenues was primarily due to acquisitions of $55.7 million and higher pricing of $48.3 million, partially offset by lower organic volumes of $60.9 million and unfavorable impact of foreign currencies of $2.3 million. The percentage of consolidated revenues derived from aftermarket parts and services was 37.0% in the three month period ended March 31, 2024 compared to 36.5% in the same three month period in 2023.
- Gross profit for the three month period ended March 31, 2024 was $746.3 million, an increase of $82.1 million, or 12.4%, compared to $664.2 million for the same three month period in 2023, and as a percentage of revenues was 44.7% for the three month period ended March 31, 2024 and 40.8% for the same three month period in 2023. The increase in gross profit is primarily