Fortive Hosts Investor Day, Reaffirms Second Quarter and Full-Year 2018 Guidance
EVERETT, Wash.--(BUSINESS WIRE)--Jun 12, 2018--Ahead of its investor day to be held at one of its operating companies, Industrial Scientific Corporation, headquartered in Pittsburgh, PA, Fortive Corporation (“Fortive”) (NYSE: FTV), a diversified industrial growth company, reaffirmed its guidance for the second quarter and full-year 2018.
For the second quarter of 2018, Fortive anticipates diluted net earnings per share to be in the range of $0.80 to $0.84 and adjusted diluted net earnings per share to be in the range of $0.86 to $0.90. For the full year 2018, Fortive expects diluted net earnings per share to be in the range of $3.18 to $3.28 and adjusted diluted net earnings per share to be in the range of $3.40 to $3.50.
James A. Lico, President and Chief Executive Officer, stated, “We are proud of the transformation over the last twelve months within our Field Solutions platform and are excited to showcase at our 2018 Investor Day the key organic and inorganic growth initiatives driving accelerated long-term growth. Operating leaders will highlight strong positions in attractive markets and industry-leading technologies, including an expanding portfolio of digital offerings, and demonstrate how the Fortive Business System is the cornerstone of our culture and competitive advantage.”
Mr. Lico added, “Fortive is well positioned with our large installed base, strong brands, and leading innovation to pursue growth initiatives in our over 30 billion dollar served market. We are committed to continue capital deployment towards enhancing our portfolio to build a better, stronger Fortive and creating long-term shareholder value.”
Fortive will discuss results and outlook during its video webcast of the investor day presentation today starting at 10:00 a.m. ET and concluding at approximately 1:45 p.m. ET. The link to the presentation materials and webcast will be available on the “Investors” section of Fortive’s website, www.fortive.com, under the subheading “Events & Presentations.” A replay of the video webcast will be available following the presentation.
Fortive is a diversified industrial growth company comprised of Professional Instrumentation and Industrial Technologies businesses that are recognized leaders in attractive markets. With 2017 revenues of $6.7 billion, Fortive’s well-known brands hold leading positions in field instrumentation, transportation, sensing, product realization, automation and specialty, and franchise distribution. Fortive is headquartered in Everett, Washington and employs a team of more than 26,000 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.
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 diluted net earnings per share” which is a non-GAAP financial measure. The reasons why we believe such measure, when used in conjunction with the corresponding GAAP financial measure, provide useful information to investors, how management uses such non-GAAP financial measure, a reconciliation of such measure to the most directly comparable GAAP measure and other information relating to such measure are included in the supplemental reconciliation schedule attached. The non-GAAP financial measure should not be considered in isolation or as a substitute for the GAAP financial measure, but should instead be read in conjunction with the GAAP financial measure. The non-GAAP financial measure used by Fortive in this release may be different from similarly-titled non-GAAP measure used by other companies.
Statements in this release that are not strictly historical, statements regarding Fortive’s anticipated earnings, business and acquisition opportunities, anticipated revenue growth, anticipated operating margin expansion, anticipated cash flow, 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. There are a number of important factors that could cause actual results, developments and business decisions to differ materially from those suggested or indicated by such forward-looking statements and you should not place undue reliance on any such forward-looking statements. These factors include, among other things: deterioration of or instability in the economy, the markets we serve, international trade policies, and the financial markets, 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 consummate the pending transaction with Altra Industrial Motion on a timely basis, 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, 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, labor matters, disruptions relating to man-made and natural disasters, impact of our separation from Danaher on our operations or financial results, and impact of our indemnification obligation to Danaher. 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, 2017 and our Quarterly Report on Form 10-Q for the quarter ended March 30, 2018. 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.
FORTIVE CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURE
Forecasted Adjusted Diluted Net Earnings per Share
We disclose the non-GAAP measure of forecasted adjusted diluted net earnings per share, which makes the following adjustments to GAAP diluted net earnings per share:Excluding on a pretax basis amortization of acquisition-related intangible assets; and Excluding the tax effect 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, and, as such, we are applying the estimated effective tax rate to each adjustment for the forecasted periods to facilitate comparisons in future periods; and Excluding adjustments made to the 2017 provisional amount estimated in connection with the Tax Cut and Jobs Act (the “TCJA”).
If any additional subsequent adjustments are made in 2018 to the provisional amounts estimated for 2017 in connection with the TCJA, such adjustments will be reflected in the applicable GAAP financial measures corresponding to the reporting period during which such adjustments are determined. In the event of such adjustments to the provisional amounts, we will also exclude such adjustments in the non-GAAP historical adjusted net earnings, historical adjusted diluted net earnings per share, and historical free cash flow conversion ratio we disclose for the corresponding period (such exclusions, including such exclusions as noted above, the “TCJA Adjustments”).
While we have a history of acquisition activity, we do not acquire businesses on a predictable cycle, and the amount of an acquisition’s purchase price allocated to intangible assets and related amortization term are unique to each acquisition and can vary significantly from acquisition to acquisition. We believe however that it is important for investors to understand that such intangible assets contribute to revenue generation and that intangible assets related to past acquisitions will recur in future periods until such intangible assets have been fully amortized.
The forecasted adjusted diluted net earnings per share does not reflect certain adjustments that are inherently difficult to predict or estimate due to their unknown timing, effect and/or significance, including, but not limited to, the TCJA Adjustments.
The TCJA Adjustments identified above have been excluded from the GAAP measures identified above because items of this nature and/or size occur with inconsistent frequency or occur for reasons that may be unrelated to our commercial performance during the period and/or because we believe the corresponding adjustments are useful in assessing our potential ongoing operating costs or gains in a given period. We will adjust for, and identify as significant, acquisition-related transaction costs, acquisition-related fair value adjustments to inventory and deferred revenue, 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.
Management believes that this non-GAAP financial measure provides useful information to investors by reflecting additional ways of viewing aspects of our operations that, when reconciled to the corresponding GAAP measure, help our investors to understand the long-term profitability trends of our business, and facilitate comparisons of our profitability to prior and future periods and to our peers.
The non-GAAP measure should be considered in addition to, and not as a replacement for or superior to, the comparable GAAP measure, and may not be comparable to similarly titled measures reported by other companies.
Forecasted Adjusted Diluted Net Earnings Per Share
View source version on businesswire.com:https://www.businesswire.com/news/home/20180612005480/en/
CONTACT: Fortive Corporation
Lisa Curran, 425-446-5000
Vice President, Investor Relations
6920 Seaway Boulevard
Everett, WA 98203
KEYWORD: UNITED STATES NORTH AMERICA PENNSYLVANIA WASHINGTON
INDUSTRY KEYWORD: MANUFACTURING ENGINEERING
SOURCE: Fortive Corporation
Copyright Business Wire 2018.
PUB: 06/12/2018 09:00 AM/DISC: 06/12/2018 09:00 AM