Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2023 | Oct. 31, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-41710 | |
Entity Registrant Name | Atmus Filtration Technologies Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 88-1611079 | |
Entity Address, Address Line One | 26 Century Boulevard | |
Entity Address, City or Town | Nashville | |
Entity Address, State or Province | TN | |
Entity Address, Postal Zip Code | 37214 | |
City Area Code | 615 | |
Local Phone Number | 514-7339 | |
Title of 12(b) Security | Common Stock, $0.0001 par value | |
Trading Symbol | ATMU | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 83,297,796 | |
Entity Central Index Key | 0001921963 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF NET INCOME - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | ||
Income Statement [Abstract] | |||||
NET SALES | [1] | $ 396.2 | $ 401.2 | $ 1,228.4 | $ 1,176.9 |
Cost of sales | 293.3 | 301.5 | 901.3 | 900.4 | |
GROSS MARGIN | 102.9 | 99.7 | 327.1 | 276.5 | |
OPERATING EXPENSES AND INCOME | |||||
Selling, general and administrative expenses | 41.3 | 32.3 | 126.4 | 97.3 | |
Research, development and engineering expenses | 11.1 | 9.8 | 33.2 | 29.7 | |
Equity, royalty and interest income from investees | 8.1 | 7.3 | 24.8 | 21.5 | |
Other operating (income) expense, net | (0.2) | 0 | 0.1 | 3.6 | |
OPERATING INCOME | 58.8 | 64.9 | 192.2 | 167.4 | |
Interest expense | 11 | 0.3 | 15.2 | 0.6 | |
Other income, net | 1.1 | 0 | 2.2 | 3.9 | |
Total other comprehensive loss, net of tax | 48.9 | 64.6 | 179.2 | 170.7 | |
Income tax expense | 11.3 | 14.2 | 42.7 | 36.3 | |
NET INCOME | $ 37.6 | $ 50.4 | $ 136.5 | $ 134.4 | |
PER SHARE DATA: | |||||
Weighted-average shares for basic EPS (in shares) | 83.3 | 83.3 | 83.3 | 83.3 | |
Weighted-average shares for diluted EPS (in shares) | 83.4 | 83.3 | 83.4 | 83.3 | |
Basic earnings per share (in dollars per share) | $ 0.45 | $ 0.61 | $ 1.64 | $ 1.61 | |
Diluted earnings per share (in dollars per share) | $ 0.45 | $ 0.61 | $ 1.64 | $ 1.61 | |
[1]Includes sales to related parties of $86.9 million and $263.2 million for the three and nine months ended September 30, 2023, respectively, compared with $90.1 million and $260.1 million for the three and nine months ended September 30, 2022, respectively. |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF NET INCOME (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | ||
NET SALES | [1] | $ 396.2 | $ 401.2 | $ 1,228.4 | $ 1,176.9 |
Related Party | |||||
NET SALES | $ 86.9 | $ 90.1 | $ 263.2 | $ 260.1 | |
[1]Includes sales to related parties of $86.9 million and $263.2 million for the three and nine months ended September 30, 2023, respectively, compared with $90.1 million and $260.1 million for the three and nine months ended September 30, 2022, respectively. |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
NET INCOME | $ 37.6 | $ 50.4 | $ 136.5 | $ 134.4 |
Other comprehensive loss, net of tax | ||||
Change in pension and other postretirement defined benefit plans | 0.8 | 0 | 0.8 | 0 |
Foreign currency translation adjustments | (6.9) | (11.5) | (9) | (31) |
Total other comprehensive loss, net of tax | (6.1) | (11.5) | (8.2) | (31) |
COMPREHENSIVE INCOME | $ 31.5 | $ 38.9 | $ 128.3 | $ 103.4 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
ASSETS | ||
Cash and cash equivalents | $ 138.8 | $ 0 |
Accounts and notes receivable, net | ||
Trade and other receivables | 176.8 | 174.2 |
Related party receivables | 61 | 61.8 |
Inventories | 243 | 245 |
Prepaid expenses and other current assets | 34.2 | 19.3 |
Total current assets | 653.8 | 500.3 |
Property, plant and equipment, net | 162.1 | 148.4 |
Investments and advances related to equity method investees | 78.2 | 77 |
Goodwill | 84.7 | 84.7 |
Other assets | 47.3 | 57 |
TOTAL ASSETS | 1,026.1 | 867.4 |
LIABILITIES | ||
Accounts payable (principally trade) | 153.1 | 145.9 |
Related party payables | 70.1 | 82 |
Accrued compensation, benefits and retirement costs | 39.5 | 18.2 |
Current portion of accrued product warranty | 4.5 | 5.9 |
Current maturities of long-term debt | 3.7 | 0 |
Other accrued expenses | 82.7 | 79 |
Total current liabilities | 353.6 | 331 |
Long-term debt | 596.3 | 0 |
Accrued product warranty | 7.4 | 9.6 |
Other liabilities | 34.4 | 71.2 |
TOTAL LIABILITIES | 991.7 | 411.8 |
Commitments and contingencies (Note 10) | ||
EQUITY | ||
Common stock, $0.0001 par value (2,000,000,000 shares authorized and 83,297,796 shares issued at September 30, 2023) | 0 | 0 |
Net parent investment | 0 | 511.4 |
Additional paid-in capital | 46 | 0 |
Retained earnings | 52.4 | 0 |
Accumulated other comprehensive loss | (64) | (55.8) |
TOTAL EQUITY | 34.4 | 455.6 |
TOTAL LIABILITIES AND EQUITY | $ 1,026.1 | $ 867.4 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | ||
NET INCOME | $ 136.5 | $ 134.4 |
Adjustments to reconcile net income to operating cash flows: | ||
Depreciation and amortization | 16.1 | 16.1 |
Deferred income taxes | 1.6 | 0.2 |
Equity in income of investees, net of dividends | (3) | (3.5) |
Foreign currency remeasurement and transaction exposure | (4.7) | (4.4) |
Changes in current assets and liabilities: | ||
Trade and other receivables | (4.4) | (19.5) |
Related party receivables | (0.7) | (3.8) |
Inventories | (1) | (50) |
Prepaid expenses and other current assets | (15.2) | (5.8) |
Accounts payable (principally trade) | 7.1 | 23.5 |
Related party payables | (10.9) | 16.1 |
Other accrued expenses | 27.1 | (6.8) |
Changes in other liabilities | (0.5) | (8.2) |
Other, net | (0.7) | (0.4) |
Net cash provided by operating activities | 147.3 | 87.9 |
CASH USED IN INVESTING ACTIVITIES | ||
Capital expenditures | (29.6) | (22.4) |
Net cash used in investing activities | (29.6) | (22.4) |
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | ||
Long-term debt proceeds | 650 | 0 |
Payments on long-term debt | (50) | 0 |
Net transfers to Parent | (580.3) | (65.5) |
Other, net | 1.4 | 0 |
Net cash provided by (used in) financing activities | 21.1 | (65.5) |
Net increase in cash and cash equivalents | 138.8 | 0 |
Cash and cash equivalents at beginning of period | 0 | 0 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 138.8 | 0 |
Non-cash investing and financing activities: | ||
Non-cash settlements with Parent | 29.4 | 0 |
Change in Capital expenditures | $ 0 | $ 0 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Millions | Total | Common Stock | Net Parent Investment | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss |
Beginning Balance at Dec. 31, 2021 | $ 427.6 | $ 0 | $ 469.2 | $ 0 | $ 0 | $ (41.6) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 134.4 | 134.4 | ||||
Other comprehensive income (loss), net | (31) | (31) | ||||
Net transfers (to) from Parent | (65.5) | (65.5) | ||||
Ending Balance at Sep. 30, 2022 | 465.5 | 0 | 538.1 | 0 | 0 | (72.6) |
Beginning Balance at Jun. 30, 2022 | 468.9 | 0 | 530 | 0 | 0 | (61.1) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 50.4 | 50.4 | ||||
Other comprehensive income (loss), net | (11.5) | (11.5) | ||||
Net transfers (to) from Parent | (42.3) | (42.3) | ||||
Ending Balance at Sep. 30, 2022 | 465.5 | 0 | 538.1 | 0 | 0 | (72.6) |
Beginning Balance at Dec. 31, 2022 | 455.6 | 0 | 511.4 | 0 | 0 | (55.8) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 136.5 | 84.1 | 52.4 | |||
Other comprehensive income (loss), net | (8.2) | (8.2) | ||||
Share-based awards | 1.4 | 1.4 | ||||
Net transfers (to) from Parent | (550.9) | (595.5) | 44.6 | |||
Ending Balance at Sep. 30, 2023 | 34.4 | 0 | 0 | 46 | 52.4 | (64) |
Beginning Balance at Jun. 30, 2023 | 1.5 | 0 | 0 | 44.6 | 14.8 | (57.9) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 37.6 | 37.6 | ||||
Other comprehensive income (loss), net | (6.1) | (6.1) | ||||
Share-based awards | 1.4 | 1.4 | ||||
Ending Balance at Sep. 30, 2023 | $ 34.4 | $ 0 | $ 0 | $ 46 | $ 52.4 | $ (64) |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) | Sep. 30, 2023 $ / shares shares |
Statement of Financial Position [Abstract] | |
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 |
Common stock, shares authorized (in shares) | 2,000,000,000 |
Common stock, shares issued (in shares) | 83,297,796 |
DESCRIPTION OF THE BUSINESS
DESCRIPTION OF THE BUSINESS | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF THE BUSINESS | DESCRIPTION OF THE BUSINESS Atmus Filtration Technologies Inc. (“Atmus” or the “Company”) develops, designs, manufactures and sells filters, coolant and chemical products. Atmus offers products for first fit and aftermarket applications, including air filters, fuel filters, fuel water separators, lube filters, hydraulic filters, coolants, fuel additives and other filtration systems to original equipment manufacturers, dealers/distributors and end-users. Atmus supports a wide customer base in a diverse range of markets, including on-highway and off-highway segments such as oil and gas, agriculture, mining, construction, power generation, marine and industrial markets. The Company produces and sells globally recognized Fleetguard branded products in over 150 countries, including countries in North America, Europe, South America, Asia, Australia and Africa. Fleetguard branded products are available through distribution centers worldwide. In April 2022, Cummins Inc. (“Cummins” or the “Parent”) announced its intention to separate its filtration business (the “Filtration Business”) into a standalone publicly traded company (the “Separation”). In preparation for separation from Cummins, Atmus, as its predecessor in interest, was incorporated as a wholly-owned subsidiary of Cummins in Delaware on April 1, 2022 in connection with the planned Separation. Prior to the completion of Atmus’s initial public offering (the “IPO”), Cummins completed, in all material respects, the transfer of the assets and liabilities of the Filtration Business to Atmus and its subsidiaries as detailed in the Separation Agreement Atmus entered into with Cummins. On September 30, 2022, and as amended on February 15, 2023, Atmus entered into a $1.0 billion credit agreement (“Credit Agreement”) with Cummins and a syndicate of banks, providing for a $600 million term loan facility (the “term loan”) and a $400 million revolving credit facility (the “revolving credit facility”), in anticipation of the Separation. Borrowings under the Credit Agreement did not become available until the IPO occurred. The facilities covered by the Credit Agreement will mature on September 30, 2027. Atmus’s Registration Statement on Form S-1, as amended, filed with the Securities and Exchange Commission (“Commission”) on May 16, 2023, was declared effective on May 25, 2023, and Atmus’s common shares began trading on the New York Stock Exchange under the symbol “ATMU” on May 26, 2023. On May 30, 2023, the IPO was completed through the sale on behalf of certain commercial paper holders of Cummins of 16,243,070 shares of common stock, including the underwriters’ full exercise of their 30-day option to purchase 2,118,661 shares to cover over-allotments. None of the proceeds of the IPO were for the benefit of Atmus. As of the closing of the IPO, Cummins owned approximately 80.5% of the outstanding shares of Atmus common stock. Upon completion of the IPO, Atmus borrowed $650 million, consisting of proceeds of the term loan and amounts drawn under the revolving credit facility, and paid such amounts to Cummins in partial consideration for the Separation. |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION As Atmus became a publicly traded company upon the IPO, its financial statements are now presented on a consolidated basis. In preparation for the IPO, the Company’s historical combined financial statements were prepared on a standalone basis, which reflected a combination of entities under common control that had been “carved out” of and derived from the historical consolidated financial statements and accounting records of Cummins. The unaudited financial statements for all periods presented, including the historical results of the Company prior to May 26, 2023, are now referred to as “Condensed Consolidated Financial Statements”, and have been prepared pursuant to the rules and regulations of the Commission for interim financial information . Accordingly, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) have been omitted. It is management’s opinion that these financial statements include all normal and recurring adjustments necessary for a fair statement of Atmus’s results of operations, financial position and cash flows. Results of operations for any interim period are not necessarily indicative of future or annual results. These interim statements should be read in conjunction with the audited financial statements and notes thereto included in Atmus’s final prospectus relating to the IPO, as filed with the Commission on May 26, 2023, pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended, relating to the Company’s Registration Statement on Form S-1 (the “IPO Prospectus”) and with the restated financial statements for the three months ended March 31, 2023 and the revised financial statements for the years ended December 31, 2022, 2021 and 2020 as filed with the Commission on August 8, 2023 on Form 8-K. Periods Prior to the IPO Prior to the IPO, Atmus, previously the Filtration Business of Cummins, functioned as part of the larger group of businesses controlled by Cummins and accordingly, utilized centralized functions of Cummins, such as facilities and information technology, to support its operations. A portion of the shared service costs were historically allocated to the Filtration Business. Cummins also performed certain corporate functions for the Filtration Business. The corporate expenses related to the Filtration Business were allocated from Cummins. These allocated costs primarily related to certain governance and corporate functions, including finance, human resources, investor relations, legal, tax, treasury and certain other costs. Where it was possible to specifically attribute such expenses to activities of the Filtration Business, these amounts were charged or credited directly to the Filtration Business without allocation or apportionment. Allocation of other such expenses was based on a reasonable reflection of the utilization of the service provided or benefit received by the Filtration Business for the periods presented prior to the Separation, on a consistent basis, such as a relative percentage of headcount and third-party sales. The aggregate costs allocated for these functions to the Filtration Business are included within the unaudited Condensed Consolidated Statements of Net Income for the periods presented prior to the Separation. Management believes these cost allocations were a reasonable reflection of the utilization of services provided to, or the benefit derived by, the Filtration Business during the period prior to the IPO, though the allocations may not be indicative of the actual costs that would have been incurred had the Filtration Business operated as a standalone public company. Actual costs that may have been incurred if the Filtration Business had been a standalone company would depend on a number of factors, including the chosen organizational structure, whether functions were outsourced or performed by the Filtration Business employees, and strategic decisions made in areas such as manufacturing, selling and marketing, research and development, information technology and infrastructure. Historically, Atmus’s cash was transferred to Cummins on a daily basis. This arrangement was not reflective of the manner in which Atmus would have been able to finance its operations had it been a standalone business separate from Cummins during each of the periods presented. Cummins’ debt and related interest expense were not allocated to Atmus for any of the periods presented since Atmus was not the legal obligor of the debt and Cummins’ borrowings were not directly attributable to Atmus. As the separate legal entities that made up the Filtration Business were not historically held by a single legal entity, Cummins’ net investment in this business (“Net Parent Investment”) was presented in lieu of a controlling interest’s equity in the Condensed Consolidated Financial Statements. For the Filtration Business, transactions with Cummins affiliates were included in the Condensed Consolidated Statements of Net Income and related balances were reflected as related party receivables and related party payables. Other balances between the Filtration Business and Cummins were considered to be effectively settled in the Condensed Consolidated Financial Statements at the time the transactions were recorded. As of the IPO Date In connection with the Separation, we entered into various agreements with Cummins, including a separation agreement. In the Separation Agreement, there were certain assets and liabilities identified in the schedules, including leases and unrecognized tax liabilities, which were retained by Cummins and were reflected as Net Parent Investment in the Company’s Condensed Consolidated Financial Statements, and those that were transferred to the Company, including additional pension assets, other compensation obligations and certain other assets and liabilities, which were transferred to the Company through Net Parent Investment in the Company’s Condensed Consolidated Financial Statements. These various agreements comprehensively provide a framework for our relationship with Cummins and govern various interim and ongoing relationships between us and Cummins post IPO. As part of the Separation, Net Parent Investment was reclassified as Additional Paid-in Capital. Periods Post IPO Following the IPO, certain services continue to be provided by Cummins under the Transition Services Agreement (“TSA”). The Company incurred certain costs in its establishment as a standalone public company and expects to incur ongoing additional costs associated with operating as an independent, publicly traded company. As a standalone entity, the Company will file tax returns on its own behalf, and tax balances and effective income tax rates may differ from the amounts reported in the historical periods. Atmus currently files a consolidated Federal income tax return and returns in certain other jurisdictions with Cummins. Following a full separation from Cummins, Atmus will file tax returns in those jurisdictions on its own behalf. Post IPO, Retained earnings began to accumulate and the balance reflected on the Condensed Consolidated Balance Sheets reflects earnings for the period May 26, 2023 through September 30, 2023. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Significant Accounting Estimates and Judgments Preparation of financial statements requires management to make estimates and assumptions that affect reported amounts presented and disclosed in our interim Condensed Consolidated Financial Statements. Significant estimates and assumptions in these interim Condensed Consolidated Financial Statements require the exercise of judgment. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be different from these estimates. In preparing these interim Condensed Consolidated Financial Statements, the significant judgments made by management in applying the Company’s accounting policies and the key sources of estimation and uncertainty were the same as those applied to the Combined Financial Statements in the IPO Prospectus. Russian Operations On March 17, 2022, Cummins’ Board of Directors announced that Cummins would indefinitely suspend its operations in Russia due to the ongoing conflict in Ukraine. As a result of the suspension of operations, Atmus evaluated the recoverability of assets in Russia and assessed other liabilities that may have been incurred. Atmus has experienced, and expects to continue to experience, an inability to collect customer receivables from Russian customers. Atmus also determined that it has some inventory items that were designated specifically for Russia that cannot be used elsewhere. As a result of the suspension of Russian operations, the Company established a reserve of approximately $1.7 million for accounts receivable and $0.6 million of inventory was written off during 2022. As of September 30, 2023 , the accounts receivable reserve for Atmus’s Russia operations was $1.5 million and no additional inventory was written off during the year. The expense recognized in 2022 was recorded within Other operating (income) expense, net and Cost of sales in the Condensed Consolidated Statements of Net Income. |
REVENUE FROM CONTRACTS WITH CUS
REVENUE FROM CONTRACTS WITH CUSTOMERS | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | REVENUE FROM CONTRACTS WITH CUSTOMERS Disaggregation of Revenue Revenue by Geographic Area The table below presents Atmus’s combined sales by geographic area. Net sales attributed to geographic areas were based on the location of the customer. For the Three Months Ended For the Nine Months Ended 2023 2022 2023 2022 (in millions) United States $ 180.2 $ 184.2 $ 567.2 $ 546.8 Other international 216.0 217.0 661.2 630.1 Total net sales $ 396.2 $ 401.2 $ 1,228.4 $ 1,176.9 Revenue by Product Category The table below presents Atmus’s combined sales by product category: For the Three Months Ended For the Nine Months Ended 2023 2022 2023 2022 (in millions) Fuel $ 167.8 $ 171.2 $ 536.1 $ 509.1 Lube 76.8 78.6 228.5 232.1 Air 69.7 71.7 214.6 201.3 Other 81.9 79.7 249.2 234.4 Total net sales $ 396.2 $ 401.2 $ 1,228.4 $ 1,176.9 |
EQUITY, ROYALTY AND INTEREST IN
EQUITY, ROYALTY AND INTEREST INCOME FROM INVESTEES | 9 Months Ended |
Sep. 30, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
EQUITY, ROYALTY AND INTEREST INCOME FROM INVESTEES | EQUITY, ROYALTY AND INTEREST INCOME FROM INVESTEES Equity, royalty and interest income from investees, net of applicable taxes, was as follows: For the Three Months Ended For the Nine Months Ended 2023 2022 2023 2022 (in millions) Shanghai Fleetguard Filter Co. Ltd $ 1.2 $ 2.1 $ 3.8 $ 3.9 Fleetguard Filters Pvt. Ltd. 5.5 3.8 16.3 13.3 Filtrum Fibretechnologies Pvt. Ltd — 0.1 0.2 0.2 Atmus share of net income 6.7 6.0 20.3 17.4 Royalty and interest income 1.4 1.3 4.5 4.1 Equity, royalty and interest income from investees $ 8.1 $ 7.3 $ 24.8 $ 21.5 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES In connection with the Separation, the Company entered into a Tax Matters Agreement with Cummins that among other things, formalized our agreement related to the responsibility for historical tax positions for the period prior to the IPO for jurisdictions where our business was included in the consolidated or combined tax returns of Cummins. Atmus’s effective tax rate for the three and nine month periods ended September 30, 2023, was 23.1% and 23.8%, respectively. Atmus’s effective tax rate for the three and nine month periods ended September 30, 2022, |
INVENTORIES
INVENTORIES | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Inventories are stated at the lower of cost or net realizable value. Inventories included the following: September 30, December 31, (in millions) Finished products $ 183.5 $ 195.9 Work-in-process and raw materials 92.6 92.4 Inventories at FIFO cost 276.1 288.3 Excess of FIFO over LIFO (33.1) (43.3) Total inventories $ 243.0 $ 245.0 |
PRODUCT WARRANTY LIABILITY
PRODUCT WARRANTY LIABILITY | 9 Months Ended |
Sep. 30, 2023 | |
Product Warranties Disclosures [Abstract] | |
PRODUCT WARRANTY LIABILITY | PRODUCT WARRANTY LIABILITY A tabular reconciliation of the product warranty liability, including accrued product campaigns, was as follows: For the Nine Months Ended 2023 2022 (in millions) Balance, beginning of year $ 15.5 $ 23.9 Provision for base warranties issued 6.8 1.3 Payments made during period (5.4) (5.8) Changes in estimates for pre-existing product warranties (4.8) (2.2) Foreign currency translation and other (0.2) (0.5) Balance, end of period $ 11.9 $ 16.7 Warranty liabilities included in Atmus’s Condensed Consolidated Balance Sheets were as follows: September 30, December 31, (in millions) Current portion $ 4.5 $ 5.9 Long-term portion 7.4 9.6 Total $ 11.9 $ 15.5 Fuel Heater Campaign Accrual Quality issues were identified with a particular application of a fuel heater that primarily impacted one customer, resulting in a recall campaign. A total of $24.2 million was accrued for this campaign during the years ended December 31, 2020 and 2019. The remaining accrual balance at September 30, 2023 was $3.1 million all of which is included in current portion of accrued product warranty on Atmus’s Condensed Consolidated Balance Sheet. |
DEBT AND BORROWING ARRANGEMENTS
DEBT AND BORROWING ARRANGEMENTS | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
DEBT AND BORROWING ARRANGEMENTS | DEBT AND BORROWING ARRANGEMENTSAtmus entered into the Credit Agreement with Cummins and a syndicate of banks, providing for a "term loan” and a revolving credit facility, in anticipation of the Separation. Borrowings under the Credit Agreement did not become available under the Credit Agreement until the IPO occurred. The facilities covered by the Credit Agreement will mature on September 30, 2027. Upon completion of the IPO, we borrowed $650 million under the Credit Agreement, consisting of proceeds of the term loan and amounts drawn under the revolving credit facility, and paid such amounts to Cummins in partial consideration for the Separation. Borrowings under the Credit Agreement bear interest at varying rates, depending on the type of loan and, in some cases, the rates of designated benchmarks and the applicable election made. Generally, U.S. dollar-denominated loans bear interest at an adjusted term Secured Overnight Financing Rate (“SOFR”) (which includes a 0.10 percent credit spread adjustment to SOFR) for the applicable interest period plus a rate ranging from 1.125 percent to 1.75 percent depending on Atmus’s net leverage ratio. As of September 30, 2023, $600 million has been drawn on the term loan and no amount was drawn on the revolving credit facility. These amounts are included within Long-term debt and Current maturities of long-term debt on the Balance Sheet. As of September 30, 2023, Atmus’s fair value of Long-term debt was approximately $600 million, which was derived from Level 2 input measures. Our credit lines available as of September 30, 2023 and December 31, 2022 include: As of September 30, 2023 As of December 31, 2022 Facility Amount Borrowed Amount Facility Amount Borrowed Amount (in millions) Credit facilities: Term loan September 30, 2027 (1) $ 600.0 $ 600.0 — — Revolving credit facility September 30, 2027 (1) 400.0 — — — (1) Atmus maintains a term loan facility and a revolving credit facility as part of the Credit Agreement. The Credit Agreement includes financial covenants that Atmus maintain certain net leverage, secured net leverage and interest coverage ratios. At September 30, 2023, Atmus complied with all financial covenants. The Credit Agreement also contains customary representations, events of default and covenants, including restrictions on the level of borrowing. Over the next five years, aggregate principal maturities of our long-term debt are (in millions): 2024 2025 2026 2027 2028 Thereafter Total $ 7.5 $ 22.5 $ 30.0 $ 540.0 $ — $ — $ 600.0 |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | ACCUMULATED OTHER COMPREHENSIVE LOSS Following are the changes in Accumulated other comprehensive income (loss) by component for the three and nine month periods ended September 30, 2023 and September 30, 2022: For the Three Months Ended For the Nine Months Ended 2023 2022 2023 2022 (in millions) Currency translation adjustments: Balance at beginning of period $ (58.8) $ (59.6) $ (56.7) $ (40.1) Currency translation adjustments (6.9) (11.5) (9.0) (31.0) Other comprehensive loss, net (6.9) (11.5) (9.0) (31.0) Balance at end of period (65.7) (71.1) (65.7) (71.1) Pensions and other benefit plans: Balance at beginning of period $ 0.9 $ (1.5) $ 0.9 $ (1.5) Change in pensions and other benefit plans 0.8 — 0.8 — Other comprehensive income (loss), net 0.8 — 0.8 — Balance at end of period 1.7 (1.5) 1.7 (1.5) Accumulated other comprehensive loss: Balance at beginning of period $ (57.9) $ (61.1) $ (55.8) $ (41.6) Total other comprehensive loss, net (6.1) (11.5) (8.2) (31.0) Balance at end of period $ (64.0) $ (72.6) $ (64.0) $ (72.6) |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Legal Proceedings The Company is subject to lawsuits and claims arising out of the ordinary course of its business. While the Company cannot predict with certainty the outcome, costs recognized with respect to such actions were not material during the three months ended September 30, 2023. The Company does not have any currently pending claims or litigation that the Company believes, individually or in the aggregate, will have a material adverse effect on its financial position, results of operations, liquidity or capital resources. Atmus carries various forms of commercial, property and casualty, product liability and other forms of insurance. Where Atmus has not entered into its own insurance policies, it will continue to be covered under Cummins’ insurance policies while Atmus continues to be majority owned by Cummins; however, such insurance may not be applicable or adequate to cover the costs associated with a judgment against Atmus with respect to these lawsuits, claims and proceedings. Atmus does not believe that these lawsuits are material individually or in the aggregate. While the Company believes it has established adequate accruals for our expected future liability with respect to pending lawsuits, claims and proceedings, where the nature and extent of any such liability can be reasonably estimated based upon presently available information, there can be no assurance that the final resolution of any existing or future lawsuits, claims or proceedings will not have a material adverse effect on Atmus’s business, results of operations, financial condition or cash flows. Indemnifications Periodically, Atmus enters into various contractual arrangements where it agrees to indemnify a third-party against certain types of losses. Atmus regularly evaluates the probability of having to incur costs associated with these indemnities and accrue for expected losses that are probable. Because the indemnifications are not related to specified known liabilities, and due to their uncertain nature, Atmus is unable to estimate the maximum amount of the potential loss associated with these indemnifications. |
RELATIONSHIP WITH PARENT AND RE
RELATIONSHIP WITH PARENT AND RELATED PARTIES | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
RELATIONSHIP WITH PARENT AND RELATED PARTIES | RELATIONSHIP WITH PARENT AND RELATED PARTIES As described in Note 1, Description of the Business , prior to the IPO, Atmus had been managed and operated in the normal course of business with other subsidiaries of Cummins. Accordingly, certain shared costs prior to the IPO have been allocated to Atmus and reflected as expenses in the Condensed Consolidated Financial Statements. Management of Cummins and Atmus consider the allocation methodologies used to be reasonable and appropriate reflections of historical expenses of Cummins attributable to Atmus for purposes of the Condensed Consolidated Financial Statements; however, the expenses reflected in the Condensed Consolidated Financial Statements may not be indicative of the actual expenses that would have been incurred during the periods presented if Atmus historically operated as a separate, stand-alone entity. In addition, the expenses reflected in the Condensed Consolidated Financial Statements may not be indicative of expenses that will be incurred in the future by Atmus. The Company entered into the Separation Agreement and TSA with Cummins, among other transaction agreements, all of which will govern the parties relationship following the IPO. This includes services provided by Cummins to the Company for a fixed term on a service-by-service basis. We will pay Cummins mutually agreed-upon fees for the services provided under the TSA. Corporate Costs/Allocations The Condensed Consolidated Financial Statements include corporate costs incurred by Cummins for services that were provided to or on behalf of Atmus for the period prior to IPO. Such costs represent shared services and infrastructure provided by Cummins, including administrative, finance, human resources, information technology, legal, and other corporate and infrastructure services. The corporate costs reflected in the Condensed Consolidated Financial Statements consist of direct charges to the business and indirect allocations to Atmus. The costs that were directly charged to Atmus, such as the shared services for finance provided by Cummins Business Services, were primarily determined based on actual usage. Indirect allocations are related to shared services and infrastructure provided by Cummins that would benefit Atmus but have not been directly charged to Atmus in a manner discussed above. These corporate costs were allocated to Atmus using methods management believes are consistent and reasonable. The primary allocation factor is third-party revenue; however, other relevant metrics are also utilized based on the nature of the underlying activities. For example, headcount is used as the allocation driver to allocate the human resource departmental costs. The expenses allocated and directly charged reflect all expenses that Cummins incurred on behalf of the Company. The expenses reflected in the Condensed Consolidated Financial Statements may not be indicative of the actual expenses that would have been incurred during the period presented if Atmus historically operated as a separate, stand-alone entity. All corporate charges and allocations have been deemed paid by Atmus to Cummins in the period in which the cost was recognized in the Condensed Consolidated Statements of Income. Total corporate costs allocated to Atmus were zero and $13.7 million for the three and nine months ended September 30, 2023, respectively, compared with $9.7 million and $36.4 million for the three and nine months ended September 30, 2022, respectively. Allocated corporate costs are included in Net sales, Cost of sales, Selling, general and administrative expenses, Research, development and engineering expenses and Other income, net. Post-IPO, Atmus has and will continue to incur its own corporate costs associated with being a standalone publicly traded company. Related Party Balances Atmus had trade receivables of $45.1 million and $52.0 million for products sold to, and accounts payable of $59.9 million and $57.6 million for products and services purchased in the ordinary course from Cummins as of September 30, 2023 and December 31, 2022, respectively. Atmus’s sales to Cummins were $71.7 million and $221.1 million for the three and nine months ended September 30, 2023, respectively, compared to $78.6 million and $227.0 million for the three and nine months ended September 30, 2022, respectively. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE Basic and diluted earnings per share (“EPS”) were calculated as follows: For the Three Months Ended For the Nine Months Ended 2023 2022 2023 2022 (in millions, except per share data) Net income $ 37.6 $ 50.4 $ 136.5 $ 134.4 Weighted-average shares for basic EPS 83.3 83.3 83.3 83.3 Plus incremental shares from assumed conversions of long-term incentive plan shares 0.1 — 0.1 — Weighted-average shares for diluted EPS 83.4 83.3 83.4 83.3 Basic earnings per share $ 0.45 $ 0.61 $ 1.64 $ 1.61 Diluted earnings per share $ 0.45 $ 0.61 $ 1.64 $ 1.61 Basic and diluted earnings per share for the three and nine months ended September 30, 2022 was calculated using the shares of common stock that were issued and outstanding as of the completion of the IPO. For the periods prior to the IPO, it is assumed that there were no dilutive equity instruments as there were no equity awards of Atmus outstanding prior to the IPO. Post-IPO, there were no anti-dilutive shares. |
SUPPLEMENTAL BALANCE SHEET DATA
SUPPLEMENTAL BALANCE SHEET DATA | 9 Months Ended |
Sep. 30, 2023 | |
Balance Sheet Related Disclosures [Abstract] | |
SUPPLEMENTAL BALANCE SHEET DATA | SUPPLEMENTAL BALANCE SHEET DATA Other assets included the following: September 30, December 31, (in millions) Operating lease assets (1) $ 26.2 $ 32.4 Deferred income taxes 10.0 14.3 Long-term receivables 3.0 3.1 Other 8.1 7.2 Other assets $ 47.3 $ 57.0 Other accrued expenses included the following: September 30, December 31, (in millions) Marketing accruals $ 41.2 $ 47.3 Other taxes payables 12.1 7.5 Income taxes payable 11.2 6.0 Current portion of operating lease liabilities (1) 7.2 9.0 Current portion of finance lease liabilities 0.3 0.4 Other 10.7 8.8 Other accrued expenses $ 82.7 $ 79.0 Other liabilities included the following: September 30, December 31, (in millions) Long-term portion of operating lease liabilities (1) $ 19.7 $ 23.2 Deferred income taxes 5.3 7.3 Long-term income taxes (1) — 29.8 Other long-term liabilities 9.4 10.9 Other liabilities $ 34.4 $ 71.2 (1) Balances at December 31, 2022 included an unrecognized tax liability for FIN48 reserves and leased assets and related depreciation, which have been retained by Cummins upon completion of Atmus’s IPO and are no longer included on Atmus’s Condensed Consolidated Balance Sheets at September 30, 2023. See Note 1, Description of the Business , and in Note 2, Basis of Presentation for more information. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Pay vs Performance Disclosure | ||||
NET INCOME | $ 37.6 | $ 50.4 | $ 136.5 | $ 134.4 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Significant Accounting Estimates and Judgments | Significant Accounting Estimates and Judgments Preparation of financial statements requires management to make estimates and assumptions that affect reported amounts presented and disclosed in our interim Condensed Consolidated Financial Statements. Significant estimates and assumptions in these interim Condensed Consolidated Financial Statements require the exercise of judgment. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be different from these estimates. In preparing these interim Condensed Consolidated Financial Statements, the significant judgments made by management in applying the Company’s accounting policies and the key sources of estimation and uncertainty were the same as those applied to the Combined Financial Statements in the IPO Prospectus. |
REVENUE FROM CONTRACTS WITH C_2
REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue by Geographic Area | The table below presents Atmus’s combined sales by geographic area. Net sales attributed to geographic areas were based on the location of the customer. For the Three Months Ended For the Nine Months Ended 2023 2022 2023 2022 (in millions) United States $ 180.2 $ 184.2 $ 567.2 $ 546.8 Other international 216.0 217.0 661.2 630.1 Total net sales $ 396.2 $ 401.2 $ 1,228.4 $ 1,176.9 |
Schedule of Revenue by Product Category | The table below presents Atmus’s combined sales by product category: For the Three Months Ended For the Nine Months Ended 2023 2022 2023 2022 (in millions) Fuel $ 167.8 $ 171.2 $ 536.1 $ 509.1 Lube 76.8 78.6 228.5 232.1 Air 69.7 71.7 214.6 201.3 Other 81.9 79.7 249.2 234.4 Total net sales $ 396.2 $ 401.2 $ 1,228.4 $ 1,176.9 |
EQUITY, ROYALTY AND INTEREST _2
EQUITY, ROYALTY AND INTEREST INCOME FROM INVESTEES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Royalty and Interest Income From Investees | Equity, royalty and interest income from investees, net of applicable taxes, was as follows: For the Three Months Ended For the Nine Months Ended 2023 2022 2023 2022 (in millions) Shanghai Fleetguard Filter Co. Ltd $ 1.2 $ 2.1 $ 3.8 $ 3.9 Fleetguard Filters Pvt. Ltd. 5.5 3.8 16.3 13.3 Filtrum Fibretechnologies Pvt. Ltd — 0.1 0.2 0.2 Atmus share of net income 6.7 6.0 20.3 17.4 Royalty and interest income 1.4 1.3 4.5 4.1 Equity, royalty and interest income from investees $ 8.1 $ 7.3 $ 24.8 $ 21.5 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories are stated at the lower of cost or net realizable value. Inventories included the following: September 30, December 31, (in millions) Finished products $ 183.5 $ 195.9 Work-in-process and raw materials 92.6 92.4 Inventories at FIFO cost 276.1 288.3 Excess of FIFO over LIFO (33.1) (43.3) Total inventories $ 243.0 $ 245.0 |
PRODUCT WARRANTY LIABILITY (Tab
PRODUCT WARRANTY LIABILITY (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Product Warranties Disclosures [Abstract] | |
Summary of Activity in Product Warranty Account | A tabular reconciliation of the product warranty liability, including accrued product campaigns, was as follows: For the Nine Months Ended 2023 2022 (in millions) Balance, beginning of year $ 15.5 $ 23.9 Provision for base warranties issued 6.8 1.3 Payments made during period (5.4) (5.8) Changes in estimates for pre-existing product warranties (4.8) (2.2) Foreign currency translation and other (0.2) (0.5) Balance, end of period $ 11.9 $ 16.7 Warranty liabilities included in Atmus’s Condensed Consolidated Balance Sheets were as follows: September 30, December 31, (in millions) Current portion $ 4.5 $ 5.9 Long-term portion 7.4 9.6 Total $ 11.9 $ 15.5 |
DEBT AND BORROWING ARRANGEMEN_2
DEBT AND BORROWING ARRANGEMENTS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Credit Lines Available | Our credit lines available as of September 30, 2023 and December 31, 2022 include: As of September 30, 2023 As of December 31, 2022 Facility Amount Borrowed Amount Facility Amount Borrowed Amount (in millions) Credit facilities: Term loan September 30, 2027 (1) $ 600.0 $ 600.0 — — Revolving credit facility September 30, 2027 (1) 400.0 — — — (1) Atmus maintains a term loan facility and a revolving credit facility as part of the Credit Agreement. The Credit Agreement includes financial covenants that Atmus maintain certain net leverage, secured net leverage and interest coverage ratios. At September 30, 2023, Atmus complied with all financial covenants. The Credit Agreement also contains customary representations, events of default and covenants, including restrictions on the level of borrowing. |
Schedule of Aggregate Principal Maturities of Long-Term Debt | Over the next five years, aggregate principal maturities of our long-term debt are (in millions): 2024 2025 2026 2027 2028 Thereafter Total $ 7.5 $ 22.5 $ 30.0 $ 540.0 $ — $ — $ 600.0 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Schedule of Changes In Accumulated Other Comprehensive Loss By Component | Following are the changes in Accumulated other comprehensive income (loss) by component for the three and nine month periods ended September 30, 2023 and September 30, 2022: For the Three Months Ended For the Nine Months Ended 2023 2022 2023 2022 (in millions) Currency translation adjustments: Balance at beginning of period $ (58.8) $ (59.6) $ (56.7) $ (40.1) Currency translation adjustments (6.9) (11.5) (9.0) (31.0) Other comprehensive loss, net (6.9) (11.5) (9.0) (31.0) Balance at end of period (65.7) (71.1) (65.7) (71.1) Pensions and other benefit plans: Balance at beginning of period $ 0.9 $ (1.5) $ 0.9 $ (1.5) Change in pensions and other benefit plans 0.8 — 0.8 — Other comprehensive income (loss), net 0.8 — 0.8 — Balance at end of period 1.7 (1.5) 1.7 (1.5) Accumulated other comprehensive loss: Balance at beginning of period $ (57.9) $ (61.1) $ (55.8) $ (41.6) Total other comprehensive loss, net (6.1) (11.5) (8.2) (31.0) Balance at end of period $ (64.0) $ (72.6) $ (64.0) $ (72.6) |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Earnings per Share | Basic and diluted earnings per share (“EPS”) were calculated as follows: For the Three Months Ended For the Nine Months Ended 2023 2022 2023 2022 (in millions, except per share data) Net income $ 37.6 $ 50.4 $ 136.5 $ 134.4 Weighted-average shares for basic EPS 83.3 83.3 83.3 83.3 Plus incremental shares from assumed conversions of long-term incentive plan shares 0.1 — 0.1 — Weighted-average shares for diluted EPS 83.4 83.3 83.4 83.3 Basic earnings per share $ 0.45 $ 0.61 $ 1.64 $ 1.61 Diluted earnings per share $ 0.45 $ 0.61 $ 1.64 $ 1.61 |
SUPPLEMENTAL BALANCE SHEET DA_2
SUPPLEMENTAL BALANCE SHEET DATA (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of Other Assets | Other assets included the following: September 30, December 31, (in millions) Operating lease assets (1) $ 26.2 $ 32.4 Deferred income taxes 10.0 14.3 Long-term receivables 3.0 3.1 Other 8.1 7.2 Other assets $ 47.3 $ 57.0 |
Schedule of Other Accrued Expenses | Other accrued expenses included the following: September 30, December 31, (in millions) Marketing accruals $ 41.2 $ 47.3 Other taxes payables 12.1 7.5 Income taxes payable 11.2 6.0 Current portion of operating lease liabilities (1) 7.2 9.0 Current portion of finance lease liabilities 0.3 0.4 Other 10.7 8.8 Other accrued expenses $ 82.7 $ 79.0 |
Schedule of Other Liabilities | Other liabilities included the following: September 30, December 31, (in millions) Long-term portion of operating lease liabilities (1) $ 19.7 $ 23.2 Deferred income taxes 5.3 7.3 Long-term income taxes (1) — 29.8 Other long-term liabilities 9.4 10.9 Other liabilities $ 34.4 $ 71.2 (1) Balances at December 31, 2022 included an unrecognized tax liability for FIN48 reserves and leased assets and related depreciation, which have been retained by Cummins upon completion of Atmus’s IPO and are no longer included on Atmus’s Condensed Consolidated Balance Sheets at September 30, 2023. See Note 1, Description of the Business , and in Note 2, Basis of Presentation for more information. |
DESCRIPTION OF THE BUSINESS - N
DESCRIPTION OF THE BUSINESS - Narrative (Details) $ in Millions | 4 Months Ended | 9 Months Ended | 12 Months Ended | ||
May 26, 2023 USD ($) shares | Sep. 30, 2023 USD ($) country | Sep. 30, 2023 USD ($) country | Dec. 31, 2022 USD ($) | Sep. 30, 2022 USD ($) | |
Description of Business [Line Items] | |||||
Number of countries | country | 150 | 150 | |||
Atmus Filtration Technologies Inc. And Subsidiaries | Cummins Filtration, Inc. | |||||
Description of Business [Line Items] | |||||
Ownership percentage | 80.50% | ||||
IPO | Cummins Filtration, Inc. | |||||
Description of Business [Line Items] | |||||
Number of shares issued in transaction (in shares) | shares | 16,243,070 | ||||
Over-Allotment Option | Cummins Filtration, Inc. | |||||
Description of Business [Line Items] | |||||
Number of shares issued in transaction (in shares) | shares | 2,118,661 | ||||
Revolving Credit Facility | Atmus Credit Agreement | Line of Credit | |||||
Description of Business [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | $ 1,000 | ||||
Proceeds from debt borrowings | $ 650 | ||||
Revolving Credit Facility | Atmus Term Loan Facility | Line of Credit | |||||
Description of Business [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | $ 600 | $ 600 | $ 0 | 600 | |
Proceeds from debt borrowings | 600 | 600 | 0 | ||
Revolving Credit Facility | Atmus Revolving Credit Facility | Line of Credit | |||||
Description of Business [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | 400 | 400 | 0 | $ 400 | |
Proceeds from debt borrowings | $ 0 | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Russian Operations - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | |
Variable Interest Entity [Line Items] | ||
Reserve established for accounts receivable | $ 1.7 | |
Inventory written off | $ 0 | $ 0.6 |
Allowance for credit loss | $ 1.5 |
REVENUE FROM CONTRACTS WITH C_3
REVENUE FROM CONTRACTS WITH CUSTOMERS (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | ||
Disaggregation of Revenue [Line Items] | |||||
Net sales | [1] | $ 396.2 | $ 401.2 | $ 1,228.4 | $ 1,176.9 |
Fuel | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | 167.8 | 171.2 | 536.1 | 509.1 | |
Lube | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | 76.8 | 78.6 | 228.5 | 232.1 | |
Air | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | 69.7 | 71.7 | 214.6 | 201.3 | |
Other | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | 81.9 | 79.7 | 249.2 | 234.4 | |
United States | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | 180.2 | 184.2 | 567.2 | 546.8 | |
Other international | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | $ 216 | $ 217 | $ 661.2 | $ 630.1 | |
[1]Includes sales to related parties of $86.9 million and $263.2 million for the three and nine months ended September 30, 2023, respectively, compared with $90.1 million and $260.1 million for the three and nine months ended September 30, 2022, respectively. |
EQUITY, ROYALTY AND INTEREST _3
EQUITY, ROYALTY AND INTEREST INCOME FROM INVESTEES (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Schedule of Equity Method Investments [Line Items] | ||||
Atmus share of net income | $ 6.7 | $ 6 | $ 20.3 | $ 17.4 |
Royalty and interest income | 1.4 | 1.3 | 4.5 | 4.1 |
Equity, royalty and interest income from investees | 8.1 | 7.3 | 24.8 | 21.5 |
Shanghai Fleetguard Filter Co. Ltd | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Atmus share of net income | 1.2 | 2.1 | 3.8 | 3.9 |
Fleetguard Filters Pvt. Ltd. | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Atmus share of net income | 5.5 | 3.8 | 16.3 | 13.3 |
Filtrum Fibretechnologies Pvt. Ltd | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Atmus share of net income | $ 0 | $ 0.1 | $ 0.2 | $ 0.2 |
INCOME TAXES (Details)
INCOME TAXES (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate | 23.10% | 22% | 23.80% | 21.30% |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Finished products | $ 183.5 | $ 195.9 |
Work-in-process and raw materials | 92.6 | 92.4 |
Inventories at FIFO cost | 276.1 | 288.3 |
Excess of FIFO over LIFO | (33.1) | (43.3) |
Total inventories | $ 243 | $ 245 |
PRODUCT WARRANTY LIABILITY - Pr
PRODUCT WARRANTY LIABILITY - Product Warranty Account (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Balance, beginning of year | $ 15.5 | $ 23.9 |
Provision for base warranties issued | 6.8 | 1.3 |
Payments made during period | (5.4) | (5.8) |
Changes in estimates for pre-existing product warranties | (4.8) | (2.2) |
Foreign currency translation and other | (0.2) | (0.5) |
Balance, end of period | $ 11.9 | $ 16.7 |
PRODUCT WARRANTY LIABILITY - Wa
PRODUCT WARRANTY LIABILITY - Warranty Liability (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 |
Product Warranties Disclosures [Abstract] | ||||
Current portion | $ 4.5 | $ 5.9 | ||
Long-term portion | 7.4 | 9.6 | ||
Total | $ 11.9 | $ 15.5 | $ 16.7 | $ 23.9 |
PRODUCT WARRANTY LIABILITY - Na
PRODUCT WARRANTY LIABILITY - Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Product Warranty Liability [Line Items] | ||||||
Total accrual | $ 11.9 | $ 15.5 | $ 16.7 | $ 23.9 | ||
Fuel Heater Campaign | ||||||
Product Warranty Liability [Line Items] | ||||||
Total accrual | $ 3.1 | $ 24.2 | $ 24.2 |
DEBT AND BORROWING ARRANGEMEN_3
DEBT AND BORROWING ARRANGEMENTS - Narrative (Details) - Revolving Credit Facility - Line of Credit - USD ($) $ in Millions | 4 Months Ended | 9 Months Ended | 12 Months Ended | |
May 26, 2023 | Sep. 30, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | |
Atmus Credit Agreement | ||||
Line of Credit Facility [Line Items] | ||||
Proceeds from debt borrowings | $ 650 | |||
Fair value of long-term debt | $ 600 | $ 600 | ||
Atmus Credit Agreement | Secured Overnight Financing Rate | Variable Rate Component One | ||||
Line of Credit Facility [Line Items] | ||||
Interest rate | 0.10% | |||
Atmus Credit Agreement | Secured Overnight Financing Rate | Minimum | Variable Rate Component Two | ||||
Line of Credit Facility [Line Items] | ||||
Interest rate | 1.125% | |||
Atmus Credit Agreement | Secured Overnight Financing Rate | Maximum | Variable Rate Component Two | ||||
Line of Credit Facility [Line Items] | ||||
Interest rate | 1.75% | |||
Atmus Term Loan Facility | ||||
Line of Credit Facility [Line Items] | ||||
Proceeds from debt borrowings | 600 | $ 600 | $ 0 | |
Atmus Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Proceeds from debt borrowings | $ 0 | $ 0 | $ 0 |
DEBT AND BORROWING ARRANGEMEN_4
DEBT AND BORROWING ARRANGEMENTS - Schedule of Credit Lines Available (Details) - Revolving Credit Facility - Line of Credit - USD ($) $ in Millions | 4 Months Ended | 9 Months Ended | 12 Months Ended | ||
May 26, 2023 | Sep. 30, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | |
Atmus Credit Agreement | |||||
Line of Credit Facility [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | $ 1,000 | ||||
Proceeds from debt borrowings | $ 650 | ||||
Atmus Term Loan Facility | |||||
Line of Credit Facility [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | $ 600 | $ 600 | $ 0 | 600 | |
Proceeds from debt borrowings | 600 | 600 | 0 | ||
Atmus Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | 400 | 400 | 0 | $ 400 | |
Proceeds from debt borrowings | $ 0 | $ 0 | $ 0 |
DEBT AND BORROWING ARRANGEMEN_5
DEBT AND BORROWING ARRANGEMENTS - Schedule of Long Term Debt (Details) $ in Millions | Sep. 30, 2023 USD ($) |
Debt Disclosure [Abstract] | |
2024 | $ 7.5 |
2025 | 22.5 |
2026 | 30 |
2027 | 540 |
2028 | 0 |
Thereafter | 0 |
Total | $ 600 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning Balance | $ 1.5 | $ 468.9 | $ 455.6 | $ 427.6 |
Other comprehensive income (loss), net | (6.1) | (11.5) | (8.2) | (31) |
Ending Balance | 34.4 | 465.5 | 34.4 | 465.5 |
Accumulated Other Comprehensive Loss | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning Balance | (57.9) | (61.1) | (55.8) | (41.6) |
Other comprehensive income (loss), net | (6.1) | (11.5) | (8.2) | (31) |
Ending Balance | (64) | (72.6) | (64) | (72.6) |
Currency translation adjustments: | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning Balance | (58.8) | (59.6) | (56.7) | (40.1) |
Other comprehensive income (loss), net | (6.9) | (11.5) | (9) | (31) |
Ending Balance | (65.7) | (71.1) | (65.7) | (71.1) |
Pensions and other benefit plans: | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning Balance | 0.9 | (1.5) | 0.9 | (1.5) |
Change in pensions and other benefit plans | 0.8 | 0 | 0.8 | 0 |
Other comprehensive income (loss), net | 0.8 | 0 | 0.8 | 0 |
Ending Balance | $ 1.7 | $ (1.5) | $ 1.7 | $ (1.5) |
RELATIONSHIP WITH PARENT AND _2
RELATIONSHIP WITH PARENT AND RELATED PARTIES (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | ||
Related Party Transaction [Line Items] | ||||||
Allocated corporate costs | $ 0 | $ 9.7 | $ 13.7 | $ 36.4 | ||
Related party receivables | 61 | 61 | $ 61.8 | |||
Net sales | [1] | 396.2 | 401.2 | 1,228.4 | 1,176.9 | |
Related Party | Cummins Filtration, Inc. | ||||||
Related Party Transaction [Line Items] | ||||||
Related party receivables | 45.1 | 45.1 | 52 | |||
Accounts payable | 59.9 | 59.9 | $ 57.6 | |||
Net sales | $ 71.7 | $ 78.6 | $ 221.1 | $ 227 | ||
[1]Includes sales to related parties of $86.9 million and $263.2 million for the three and nine months ended September 30, 2023, respectively, compared with $90.1 million and $260.1 million for the three and nine months ended September 30, 2022, respectively. |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Earnings Per Share [Abstract] | ||||
Net income | $ 37.6 | $ 50.4 | $ 136.5 | $ 134.4 |
Weighted-average shares for basic EPS (in shares) | 83,300,000 | 83,300,000 | 83,300,000 | 83,300,000 |
Plus incremental shares from assumed conversions of long-term incentive plan shares (in shares) | 100,000 | 0 | 100,000 | 0 |
Weighted-average shares for diluted EPS (in shares) | 83,400,000 | 83,300,000 | 83,400,000 | 83,300,000 |
Basic earnings per share (in dollars per share) | $ 0.45 | $ 0.61 | $ 1.64 | $ 1.61 |
Diluted earnings per share (in dollars per share) | $ 0.45 | $ 0.61 | $ 1.64 | $ 1.61 |
Anti-dilutive shares (in shares) | 0 | 0 | 0 | 0 |
SUPPLEMENTAL BALANCE SHEET DA_3
SUPPLEMENTAL BALANCE SHEET DATA - Schedule of Other Assets (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Balance Sheet Related Disclosures [Abstract] | ||
Operating lease assets | $ 26.2 | $ 32.4 |
Deferred income taxes | 10 | 14.3 |
Long-term receivables | 3 | 3.1 |
Other | 8.1 | 7.2 |
Other assets | $ 47.3 | $ 57 |
SUPPLEMENTAL BALANCE SHEET DA_4
SUPPLEMENTAL BALANCE SHEET DATA - Schedule of Other Accrued Expenses (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Text Block [Abstract] | ||
Marketing accruals | $ 41.2 | $ 47.3 |
Other taxes payables | 12.1 | 7.5 |
Income taxes payable | 11.2 | 6 |
Current portion of operating lease liabilities | 7.2 | 9 |
Current portion of finance lease liabilities | 0.3 | 0.4 |
Other accrued expenses | 10.7 | 8.8 |
Other accrued expenses | $ 82.7 | $ 79 |
SUPPLEMENTAL BALANCE SHEET DA_5
SUPPLEMENTAL BALANCE SHEET DATA - Schedule of Other Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Text Block [Abstract] | ||
Long-term portion of operating lease liabilities | $ 19.7 | $ 23.2 |
Deferred income taxes | 5.3 | 7.3 |
Long-term income taxes | 0 | 29.8 |
Other long-term liabilities | 9.4 | 10.9 |
Other liabilities | $ 34.4 | $ 71.2 |