Financial Reports: Caterpillar, TTI Group, Brightview, Generac, SiteOne

We have recent financial reports from three industry companies, including links to investor relations pages for further details on each company report. (Updated Aug. 6 to add Caterpillar and TTI Group results)

Caterpillar

On Aug. 6, Caterpillar Inc. announced second-quarter 2024 results. Total sales and revenues for the second quarter of 2024 were $16.689 billion, a decrease of $629 million, or 4%, compared with $17.318 billion in the second quarter of 2023. The decrease was primarily due to lower sales volume of $1.206 billion, partially offset by favorable price realization of $578 million. The decrease in sales volume was mainly driven by the impact from changes in dealer inventories. Dealer inventory decreased during the second quarter of 2024, compared with an increase during the second quarter of 2023.

In the three primary segments, sales were lower in Construction Industries and Resource Industries and higher in Energy & Transportation.

Construction Industries’ total sales were $6.683 billion in the second quarter of 2024, a decrease of $471 million, or 7%, compared with $7.154 billion in the second quarter of 2023. The decrease was primarily due to lower sales volume of $588 million, partially offset by favorable price realization of $178 million. The decrease in sales volume was mainly driven by the impact from changes in dealer inventories. Dealer inventory remained about flat during the second quarter of 2024, compared to an increase during the second quarter of 2023.

Sales in North America were about flat. Lower sales volume was offset by favorable price realization. Lower sales volume was mainly driven by lower sales of equipment to end users.

Resource Industries’ total sales were $3.206 billion in the second quarter of 2024, a decrease of $357 million, or 10%, compared with $3.563 billion in the second quarter of 2023. The decrease was primarily due to lower sales volume of $475 million, partially offset by favorable price realization of $133 million. The decrease in sales volume was mainly driven by the impact from changes in dealer inventories. Dealer inventory decreased more during the second quarter of 2024 than during the second quarter of 2023.

Energy & Transportation’s total sales were $7.337 billion in the second quarter of 2024, an increase of $118 million, or 2%, compared with $7.219 billion in the second quarter of 2023. Sales increased across all applications except Industrial. The increase in sales was primarily due to favorable price realization of $264 million, partially offset by lower sales volume of $129 million.

“I’d like to thank our team for delivering another strong quarter, including higher adjusted operating profit margin, record adjusted profit per share and robust ME&T free cash flow,” said Chairman and CEO Jim Umpleby. “Our results continue to reflect the benefit of the diversity of our end markets as well as the disciplined execution of our strategy for long-term profitable growth.”

TTI Group, including Milwaukee, Ryobi, others

On Aug. 6, Techtronic Industries Co. Ltd. announced its unaudited consolidated results for the six-month period ended June 30, 2024. TTI grew sales in the first half of 2024 to US $7.3 billion, up 6.3% in reported currency and 6.6% in local currency. Milwaukee delivered double-digit sales growth in local currency and Ryobi outperformed the market.

Milwaukee, which TTI called its “Flagship,” grew sales 11.2% in local currency, extending our leadership position as the #1 professional power tool brand worldwide. Our Consumer group of businesses delivered solid first half 2024 results. Led by strong performance in Outdoor, Ryobi delivered mid-single digit sales growth compared with the first half of last year. Our consumer Floorcare and Cleaning business delivered profit improvement of US$9.1 million and revenue of US$428 million which was comparable to the revenue generated for the first half of last year.

Gross margin improved 67 bps to 39.9% in the first half of 2024. We finished the first half of 2024 with US$4,027 million of inventory, a reduction of US$71 million from year end 2023 and US$554 million compared to the first half of last year. We delivered US$626 million of EBIT in the first half, growing 11.8% over the comparable period in 2023. EBIT Margin as a percentage of sales was 8.6%, an increase of 42 bps from the first half of 2023. Net Profit increased 15.7% to US$550 million.

Horst Julius Pudwill, Chairman of TTI, said, “We delivered outstanding results in the first half of 2024, including generating strong Free Cash Flow and strengthening our balance sheet through disciplined working capital management. With the promotion of Steven Philip Richman to CEO and the deep talent pool supporting him, we are extremely well positioned to continue growing the overall market and extending our leadership position.”

Steven Philip Richman, CEO of TTI, commented, “Our first half performance demonstrates our focus on extending our market leadership position within our MILWAUKEE and Consumer group of businesses, while delivering a strong financial performance. We remain laser focused on our strategy of investing in demonstrably better, technologically advanced new products and exceptional people to drive our growth.” TTI appointed Richman to the role of TTI Chief Executive Officer on May 21, 2024.

Brightview

Commercial landscaping services company BrightView Holdings, Inc. reported unaudited results for the third quarter ended June 30, 2024.

For the third quarter of fiscal 2024, total revenue decreased 3.6% to $738.8 million driven by a $39.2 million year over year decrease in revenue from our commercial landscaping business. These decreases were partially offset by an $11.6 million increase in our development services revenue.

For the three months ended June 30, 2024, Adjusted EBITDA increased by $6.1 million to $107.9 million representing a 130 basis point increase in Adjusted EBITDA margin. The increase was due to the increased revenue described above combined with successful cost management due to ongoing cost management initiatives focused on payroll and overhead costs and reduction in non-core businesses.

“Third quarter served as another milestone as we continue to progress with our One BrightView initiatives and delivered margin improvement across all segments for both the quarter and the year-to-date results,” said BrightView President and Chief Executive Officer Dale Asplund. “Consequently, this positioned us to reaffirm the midpoint of our Revenue, EBITDA and Margin guidance for fiscal 2024, while raising our Free Cash Flow guidance for a second time this year. Our relentless pursuit to drive transformational change remains in the early innings as we continue down the path of positioning BrightView as the employer of choice, while providing better service to our customers and driving profitable growth.”

For the nine months ended June 30, 2024, total revenue decreased 1.6% to $2,038.4 million driven by a $79.5 million decrease in our commercial landscaping business. The decrease was partially offset by $31.5 million of increased revenue from our development services revenue and an $11.3 million increase in snow removal revenue compared to the prior year.

During the nine months ended June 30, 2024, Adjusted EBITDA increased by $22.4 million to $219.5 representing a 130 basis point expansion of Adjusted EBITDA margin. The increase was due to successful cost management initiatives focused on payroll and overhead costs, partially offset by decreased revenue described above.

Generac

Generac reported financial results for its second quarter ended June 30, 2024 and provided an update on its outlook for the full-year 2024.

Net sales were $998 million during the second quarter of 2024 as compared to $1.00 billion in the prior-year second quarter. Core sales, which excludes both the impact of acquisitions and foreign currency, was approximately flat from the prior year period. Residential product sales increased approximately 8% to $538 million as compared to $499 million last year. Commercial & Industrial product sales decreased approximately 10% to $344 million as compared to $384 million in the prior year.

Adjusted EBITDA before deducting for noncontrolling interests, as defined in the accompanying reconciliation schedules, was $165 million, or 16.5% of net sales, as compared to $137 million, or 13.6% of net sales, in the prior year. Cash flow from operations was $78 million during the second quarter, as compared to $83 million in the prior year. Free cash flow, as defined in the accompanying reconciliation schedules, was $50 million as compared to $54 million in the second quarter of 2023.

On July 30th, Generac agreed to increase its minority interest with an additional $35 million investment and further expand its commercial relationship with Wallbox, a global leader in smart electric vehicle charging and energy management solutions.

Generac is updating its overall net sales growth guidance for the full-year 2024 to be 4 to 8% compared to the prior year on an as-reported basis, an increase from the previous guidance range of 3 to 7%. Adjusted EBITDA margin, before deducting for non-controlling interests, is now expected to be 17.0 to 18.0% as compared to the previous expectation of 16.5 to 17.5%.

“Our second quarter results outperformed our prior outlook for adjusted EBITDA and adjusted EPS as input costs and operating expenses came in better than expected,” said Aaron Jagdfeld, President and Chief Executive Officer. “In line with our expectations, home standby generator shipments increased at a strong rate compared to a softer prior year period which included the impact of elevated field inventory levels, while shipments of C&I products declined versus prior year primarily due to expected weakness in our telecom and rental markets.”

As a result of recent power outage activity, which includes the impact of major outage event Hurricane Beryl, Generac is updating its full-year 2024 net sales guidance to 4 to 8% growth as compared to the prior year, an increase from the previous expectation of 3 to 7%.

Additionally, it now expects net income margin, before deducting for non-controlling interests, to be approximately 6.5 to 7.5% for the full-year 2024 as compared to the prior expectation of 6.0 to 7.0%. The corresponding adjusted EBITDA margin is now expected to be approximately 17.0 to 18.0% as compared to the previous guidance range of 16.5 to 17.5%.

SiteOne

SiteOne announced earnings for its second quarter ended June 30, 2024. The company announced that net sales for the Q2 2024 increased to $1.41 billion, or 4%, compared to $1.35 billion for the prior-year period. Organic daily sales decreased 3% compared to the prior-year period due to soft demand and price deflation for commodity products. Acquisitions contributed $103.2 million, or 8%, to net sales growth for the quarter.

SiteOne’s gross profit increased 4% to $510.3 million for the Q2 2024 compared to $489.4 million for the prior-year period. Gross margin contracted 10 basis points to 36.1% due to lower price realization, partially offset by a positive impact from acquisitions.

“In early June, we communicated that our organic daily sales for the second quarter were trending down 4% to 5% reflecting softer end market demand and continued price deflation. Given that trend, we were pleased to see conditions improve in June and achieve an organic daily sales decline of only 3% for the quarter,” said Doug Black, SiteOne’s Chairman and CEO. “With the benefit from acquisitions and with actions by our teams to control operating cost and maintain gross margin, we were also pleased to deliver adjusted EBITDA that was comparable to last year. Additionally, we added four attractive new companies to SiteOne during the quarter and one in July as we continue to build our full product line capability across the US and Canada. While we expect market softness and deflation to dampen this year’s results, our teams are executing our strategy and driving improvements as we manage through the near-term challenges. With a clear leadership position in wholesale landscape distribution, strong teams, a robust acquisition pipeline, and a winning strategy to create value for our stakeholders, we are confident in our ability to perform and grow in the years to come.”

Selling, general and administrative expenses for the period increased to $343.8 million from $320.6 million for the prior-year period. SG&A as a percentage of net sales increased 60 basis points to 24.3% primarily due to the impact of acquisitions.

Adjusted EBITDA decreased $0.7 million to $210.5 million for the Q2 2024, compared to $211.2 million for the prior-year period. Adjusted EBITDA margin decreased 70 basis points to 14.9%.

“Our maintenance and new construction markets remain resilient, but we are continuing to experience soft demand driven primarily by a weaker repair and remodel end market. Additionally, pricing continues to have a negative impact on our growth due to the ongoing deflation in commodities like PVC pipe and grass seed. We now expect those trends to continue throughout the second half of 2024. Our teams are executing our commercial and operational initiatives well, and we expect to continue outperforming the market with a low single digit organic daily sales decline for the remainder of the year,” Doug Black continued. “With the benefit of acquisitions, we expect overall sales growth to be positive in the second half of 2024 but with a lower adjusted EBITDA margin than last year.”