On July 25, 2024, Garrett Motion Inc (GTX, Financial) released its 8-K filing for the second quarter of 2024. Garrett Motion Inc designs, manufactures, and sells engineered turbocharger and electric-boosting technologies for light and commercial vehicle original equipment manufacturers (OEMs). The company is a technology leader with expertise in delivering products across gasoline, diesel, natural gas, and electrified powertrains. The company also sells its technologies in the aftermarket through its distribution network, deriving most of its revenue from Gas and geographically from Europe.
Performance Overview
Garrett Motion Inc (GTX, Financial) reported net sales of $890 million for Q2 2024, a 12% decrease from $1,011 million in Q2 2023. This decline was primarily driven by demand softness in gasoline, diesel, and commercial vehicle applications, partially offset by increased demand for replacement parts in aftermarket sales. The company also faced a 2% unfavorable impact due to foreign currency translation.
Net income for the quarter was $64 million, down from $71 million in the same period last year. The net income margin stood at 7.2%, slightly up from 7.0% in Q2 2023. Adjusted EBITDA was $150 million, a decrease from $170 million in Q2 2023, with an adjusted EBITDA margin of 16.9%, up from 16.8% in the previous year.
Financial Achievements and Challenges
Despite the challenging market conditions, Garrett Motion Inc (GTX, Financial) managed to expand its adjusted EBITDA margin by 10 basis points year over year to 16.9% and delivered $62 million of adjusted free cash flow. The company repurchased $65 million of common stock during the quarter, totaling $174 million for the first half of 2024. Additionally, Garrett issued $800 million of senior unsecured notes at favorable interest rates, which were used to partially repay its Term Loan B.
“Despite a volatile volume environment in the second quarter, Garrett delivered a very solid performance. We expanded our adjusted EBITDA margin by 10 basis points year over year to 16.9% and delivered $62 million of adjusted free cash flow,” said Olivier Rabiller, President and CEO of Garrett.
Income Statement Highlights
| Q2 2024 | Q2 2023 | H1 2024 | H1 2023 | |
|---|---|---|---|---|
| Net sales | $890 million | $1,011 million | $1,805 million | $1,981 million |
| Cost of goods sold | $705 million | $809 million | $1,448 million | $1,590 million |
| Gross profit | $185 million | $202 million | $357 million | $391 million |
| Net income | $64 million | $71 million | $130 million | $152 million |
| Adjusted EBITDA | $150 million | $170 million | $301 million | $338 million |
Balance Sheet and Cash Flow
Garrett Motion Inc (GTX, Financial) reported net cash provided by operating activities of $126 million for Q2 2024, down from $164 million in Q2 2023. Adjusted free cash flow was $62 million, a significant decrease from $140 million in the same period last year. The company had $698 million in available liquidity as of June 30, 2024, including $98 million in cash and cash equivalents and $600 million of undrawn commitments under its revolving credit facility.
Updated Full Year 2024 Outlook
Garrett Motion Inc (GTX, Financial) updated its full-year 2024 outlook, projecting net sales of $3,570 million, net income of $275 million, and adjusted EBITDA of $608 million. The company expects net cash provided by operating activities to be $405 million and adjusted free cash flow to be $350 million.
For more detailed information, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Garrett Motion Inc for further details.
