ITT 8-K
Itt Inc. (ITT)
8-K
2025-05-01
For: 2025-05-01
View Original
Added on
April 11, 2026
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: May 1, 2025
(Date of earliest event reported)
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | |||||||||
(Address of principal executive offices) (Zip Code)
(914 ) 641-2000
(Registrant's telephone number, including area code)
Former name or former address, if changed since last report
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On May 1, 2025, ITT Inc. issued a press release reporting the financial results for the first fiscal quarter ended March 29, 2025. A copy of the press release is attached to this Current Report on Form 8-K (“Current Report”) as Exhibit 99.1 and is incorporated by reference herein solely for purposes of this Item 2.02 disclosure.
The information in Item 2.02 of this Current Report, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of such section. The information in Item 2.02 of this Current Report, including Exhibit 99.1 attached hereto, shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description | |||||||
| 99.1 | ||||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL Document) | |||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
ITT Inc. | |||||||||||
(Registrant) | |||||||||||
May 1, 2025 | By: | /s/ Lori B. Marino | |||||||||
Name: | Lori B. Marino | ||||||||||
Title: | Senior Vice President, Chief Legal Officer, Chief Compliance Officer and Secretary | ||||||||||
(Authorized Officer of Registrant) | |||||||||||
Exhibit 99.1
ITT REPORTS 2025 FIRST QUARTER EARNINGS PER SHARE (EPS) OF $1.33, ADJUSTED EPS OF $1.45, IN LINE WITH PRE-ANNOUNCEMENT
▪7% orders growth (2% organic), driven by pump project and connectors awards, including strong contributions from acquisitions, surpassing $1.0 billion in orders for the quarter
▪Revenue of over $900 million, driven by defense connectors and rail, offset by lower aerospace demand
▪16.5% operating margin (17.4% adjusted), driven by productivity and pricing actions, offsetting unfavorable foreign currency impact
▪Net cash from operating activities of $113 million; free cash flow of $77 million
STAMFORD, Conn., May 1, 2025 – ITT Inc. (NYSE: ITT) today reported financial results for the first quarter ended March 29, 2025, consistent with the preliminary results announced on April 10. The company reported revenue of $913 million, flat on both a GAAP and organic basis, reflecting growth in parts, service and valves in Industrial Process (IP), connectors in Connect & Control Technologies (CCT) and rail in Motion Technologies (MT), offset by lower automotive and aerospace demand.
First quarter operating income of $151 million increased 1% versus prior year and increased 2% on an adjusted basis due to benefits from productivity savings and pricing actions, partially offset by temporary acquisition amortization and higher restructuring, material and labor costs. Operating income margin was flat versus prior year while adjusted operating margin increased by 30 basis points.
EPS, impacted by higher interest and tax expenses, decreased 1% for the first quarter versus prior year. Adjusted EPS of $1.45 increased 2% compared to prior year, driven by productivity and pricing actions.
Net cash from operating activities for the first quarter of $113 million increased 96% versus prior year primarily driven by favorable working capital and timing of customer payments. Free cash flow for the quarter of $77 million increased $47 million, or 154% versus prior year.
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Table 1. First Quarter Performance
| Q1 2025 | Q1 2024 | Change | ||||||||||||||||||
Revenue | $ | 913.0 | $ | 910.6 | 0.3 | % | ||||||||||||||
| Organic Growth | — | % | ||||||||||||||||||
| Operating Income | $ | 150.9 | $ | 149.9 | 0.7 | % | ||||||||||||||
| Operating Margin | 16.5 | % | 16.5 | % | — | bps | ||||||||||||||
| Adjusted Operating Income | $ | 159.3 | $ | 155.7 | 2.3 | % | ||||||||||||||
| Adjusted Operating Margin | 17.4 | % | 17.1 | % | 30 | bps | ||||||||||||||
| Earnings Per Share | $ | 1.33 | $ | 1.35 | (1.5) | % | ||||||||||||||
| Adjusted Earnings Per Share | $ | 1.45 | $ | 1.42 | 2.1 | % | ||||||||||||||
Net Cash from Operating Activities | $ | 113.4 | $ | 57.8 | 96.2 | % | ||||||||||||||
| Free Cash Flow | $ | 76.6 | $ | 30.1 | 154.5 | % | ||||||||||||||
Note: all results unaudited; dollars in millions except for per share amounts
Management Commentary
“ITT delivered a solid first quarter performance to begin 2025 with results in-line with our April pre-announcement, as expected. We surpassed $1 billion of orders in a quarter for the first time and entered Q2 with a $1.8 billion backlog, a 21% increase versus last year and up 10% sequentially. We expanded adjusted margin 30 basis points, driven by continued operational improvements and pricing and grew adjusted EPS 7% excluding the 2024 divestiture of Wolverine.
Also, this quarter we launched VIDAR, a game-changing industrial motor, enabling us to enter a $6 billion addressable market for industrial motors. VIDAR delivers variable-speed technology for industrial applications that drastically reduces costs and improves energy efficiency for our customers. And, it is the only industrial motor of its kind on the market.
Finally, we acted quickly to aggressively repurchase $400 million of ITT shares through April. Still, we have ample capacity for M&A, which remains a key strategic priority for ITT. We look forward to discussing all of this at our upcoming Capital Markets Day on May 15,” said ITT’s Chief Executive Officer and President Luca Savi.
Table 2. First Quarter Segment Results
| Revenue | Operating Income | Operating Margin | ||||||||||||||||||||||||||||||||||||
| Q1 2025 | Reported Change | Organic Growth | Q1 2025 | Reported Change | Adjusted Change | Q1 2025 | Reported Change | Adjusted Change | ||||||||||||||||||||||||||||||
| Motion Technologies | 346.1 | (11.8) | % | 0.5 | % | 67.6 | (4.2) | % | (3.9) | % | 19.5 | % | 150 bps | 160 bps | ||||||||||||||||||||||||
| Industrial Process | 333.3 | (0.2) | % | (1.0) | % | 63.5 | (1.6) | % | 0.4 | % | 19.1 | % | (20) bps | 10 bps | ||||||||||||||||||||||||
| Connect & Control Technologies | 234.7 | 26.8 | % | 1.4 | % | 36.0 | 10.1 | % | 13.1 | % | 15.3 | % | (240) bps | (200) bps | ||||||||||||||||||||||||
Note: all results unaudited; excludes intercompany eliminations of $1.1; comparisons to Q1 2024
Motion Technologies revenue decreased $46 million due to the Wolverine divestiture in the prior year and unfavorable foreign currency impacts. Organic revenue increased $2 million due to strength in rail, offset by lower Friction original equipment and aftermarket demand. Operating income decreased $3 million primarily due to lower revenue from the divestiture of Wolverine, partially offset by productivity actions.
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Industrial Process revenue was flat with strength in parts, service, valves and Svanehøj, offset by a decline in pump projects and baseline pumps. Operating income decreased $1 million primarily due to higher restructuring charges and increased personnel costs, partially offset by benefits from pricing, productivity actions and growth from Svanehøj.
Connect & Control Technologies revenue increased $50 million primarily driven by the kSARIA acquisition, which closed in September 2024, pricing actions and growth in defense and industrial connectors, partially offset by lower aerospace demand. Operating income increased $3 million primarily due to pricing, productivity actions and contributions from kSARIA, partially offset by higher material, labor and overhead costs.
Quarterly Dividend
The company announced today a quarterly dividend of $0.351 per share on its outstanding common stock. ITT’s Board of Directors approved the cash dividend for the second quarter of 2025, which will be payable on Monday, June 30, 2025 to shareholders of record as of the close of business on Monday, June 2, 2025.
2025 Guidance
The company is updating its 2025 full year guidance on a GAAP basis. We now expect revenue growth of 2% to 4%, operating margin of 17.5% to 18.4% and EPS of $5.80 to $6.20. There is no change, however, to our 2025 full year adjusted guidance. We continue to expect organic revenue growth of 3% to 5%; adjusted operating margin of 18.1% to 19.0%, up 40 to 130 bps; adjusted EPS of $6.10 to $6.50; and free cash flow of $450 million to $500 million, representing free cash flow margin of 12% to 13% for full year 2025. The company’s full year guidance reflects known and management-estimated tariff impacts as of the date of this release and does not assume any additional impacts stemming from potential changes in trade policy or broader macroeconomic conditions.
It is not possible, without unreasonable efforts, to estimate the impacts of foreign currency fluctuations, acquisitions and certain other special items that may occur in 2025 as these items are inherently uncertain and difficult to predict. As a result, we are unable to quantify certain amounts that would be included in a reconciliation of organic revenue growth and adjusted segment operating margin to the most directly comparable GAAP financial measures without unreasonable efforts and accordingly we have not provided reconciliations for these forward-looking non-GAAP financial measures.
Investor Conference Call Details
ITT’s management will host a conference call for investors on Thursday, May 1, 2025 at 8:30 a.m. Eastern Time. The briefing can be accessed live via a webcast which is available on the company’s website: https://investors.itt.com. A replay of the webcast will be available beginning two hours after the presentation concludes. Reconciliations of non-GAAP financial performance metrics to their most comparable U.S. GAAP financial performance metrics are defined and presented below and
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should not be considered a substitute for, nor superior to, the financial data prepared in accordance with U.S. GAAP.
Investor Contact Media Contact
Mark Macaluso Phil Terrigno
+1 914-641-2064 +1 914-641-2143
+1 914-641-2064 +1 914-641-2143
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Safe Harbor Statement
This release contains “forward-looking statements” intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. In addition, the conference call (including the financial results presentation material) may include, and officers and representatives of ITT may from time to time make and discuss, projections, goals, assumptions, and statements that may constitute “forward-looking statements”. These forward-looking statements are not historical facts, but rather represent only a belief regarding future events based on current expectations, estimates, assumptions and projections about our business, future financial results, the industry in which we operate, and other legal, regulatory, and economic developments. These forward-looking statements include, but are not limited to, future strategic plans and other statements that describe the company’s business strategy, outlook, objectives, plans, intentions or goals, and any discussion of future events and future operating or financial performance.
We use words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “future,” “guidance,” “intend,” “may,” “plan,” “potential,” “project,” “should,” “target,” “will,” “would,” and other similar expressions to identify such forward-looking statements. Forward-looking statements are uncertain and, by their nature, many are inherently unpredictable and outside of ITT’s control, and involve known and unknown risks, uncertainties and other important factors that could cause actual results to differ materially from those expressed or implied in, or reasonably inferred from, such forward-looking statements.
Where in any forward-looking statement we express an expectation or belief as to future results or events, such expectation or belief is based on current plans and expectations of our management, expressed in good faith and believed to have a reasonable basis. However, we cannot provide any assurance that the expectation or belief will occur or that anticipated results will be achieved or accomplished.
Among the factors that could cause our results to differ materially from those indicated by forward-looking statements are risks and uncertainties inherent in our business including, without limitation:
•uncertain global economic and capital markets conditions, which have been influenced by heightened geopolitical tensions, inflation, changes in monetary policies, the threat of a possible regional or global economic recession, trade disputes between the U.S. and its trading partners, political and social unrest, and the availability and fluctuations in prices of energy and commodities, including steel, oil, copper and tin;
•the imposition of new or increased tariffs by the U.S. government, particularly those targeting imports from specific countries, and the potential for retaliatory trade measures by affected countries, which could disrupt global supply chains, increase costs and reduce customer demand;
•fluctuations in interest rates and the impact of such fluctuations on customer behavior and on our cost of debt;
•fluctuations in foreign currency exchange rates and the impact of such fluctuations on our revenues, customer demand for our products and on our hedging arrangements;
•volatility in raw material prices and our suppliers’ ability to meet quality and delivery requirements;
•impacts and risk of liabilities from recent mergers, acquisitions, or venture investments, and past divestitures and spin-offs;
•our inability to hire or retain key personnel;
•failure to compete successfully and innovate in our markets;
•failure to manage the distribution of products and services effectively;
•failure to protect our intellectual property rights or violations of the intellectual property rights of others;
•the extent to which there are quality problems with respect to manufacturing processes or finished goods;
•the risk of cybersecurity breaches or failure of any information systems used by the Company, including any flaws in the implementation of any enterprise resource planning systems;
•loss of or decrease in sales from our most significant customers;
•risks due to our operations and sales outside the U.S. and in emerging markets, including the imposition of tariffs and trade sanctions;
•fluctuations in demand or customers’ levels of capital investment, maintenance expenditures, production, and market cyclicality;
•the risk of material business interruptions, particularly at our manufacturing facilities;
•risks related to government contracting, including changes in levels of government spending and regulatory and contractual requirements applicable to sales to the U.S. government;
•fluctuations in our effective tax rate, including as a result of changing tax laws and other possible tax reform legislation in the U.S. and other jurisdictions;
•changes in environmental laws or regulations, discovery of previously unknown or more extensive contamination, or the failure of a potentially responsible party to perform;
•failure to comply with the U.S. Foreign Corrupt Practices Act (or other applicable anti-corruption legislation), export controls and trade sanctions; and
•risk of product liability claims and litigation.
More information on factors that could cause actual results or events to differ materially from those anticipated is included in our Annual Report on Form 10-K for the year ended December 31, 2024 (particularly under the caption "Risk Factors"), our Quarterly Reports on Form 10-Q and in other documents we file from time to time with the SEC.
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The forward-looking statements included in this release speak only as of the date hereof. We undertake no obligation (and expressly disclaim any obligation) to update any forward-looking statements, whether written or oral or as a result of new information, future events or otherwise.
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CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
| Three Months Ended | |||||||||||
| March 29, 2025 | March 30, 2024 | ||||||||||
| Revenue | $ | 913.0 | $ | 910.6 | |||||||
| Cost of revenue | 596.7 | 609.1 | |||||||||
| Gross profit | 316.3 | 301.5 | |||||||||
| General and administrative expenses | 85.3 | 71.5 | |||||||||
| Sales and marketing expenses | 53.2 | 50.1 | |||||||||
| Research and development expenses | 26.9 | 30.0 | |||||||||
| Operating income | 150.9 | 149.9 | |||||||||
Interest expense | 9.3 | 7.7 | |||||||||
Interest income | (1.7) | (1.8) | |||||||||
Other non-operating income, net | (1.0) | (1.5) | |||||||||
Income before income tax expense | 144.3 | 145.5 | |||||||||
| Income tax expense | 35.2 | 33.0 | |||||||||
| Net income | 109.1 | 112.5 | |||||||||
| Less: Income attributable to noncontrolling interests | 0.7 | 1.0 | |||||||||
| Net income attributable to ITT Inc. | $ | 108.4 | $ | 111.5 | |||||||
Earnings per share attributable to ITT Inc.: | |||||||||||
Basic | $ | 1.33 | $ | 1.36 | |||||||
Diluted | $ | 1.33 | $ | 1.35 | |||||||
| Weighted average common shares – basic | 81.3 | 82.2 | |||||||||
| Weighted average common shares – diluted | 81.7 | 82.7 | |||||||||
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CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
| As of the Period Ended | March 29, 2025 | December 31, 2024 | |||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 439.8 | $ | 439.3 | |||||||
| Receivables, net | 761.6 | 703.0 | |||||||||
| Inventories | 638.5 | 612.3 | |||||||||
| Other current assets | 124.5 | 131.2 | |||||||||
| Total current assets | 1,964.4 | 1,885.8 | |||||||||
| Non-current assets: | |||||||||||
| Plant, property and equipment, net | 588.7 | 577.2 | |||||||||
| Goodwill | 1,454.3 | 1,430.1 | |||||||||
| Other intangible assets, net | 446.8 | 454.1 | |||||||||
| Other non-current assets | 379.5 | 384.1 | |||||||||
| Total non-current assets | 2,869.3 | 2,845.5 | |||||||||
| Total assets | $ | 4,833.7 | $ | 4,731.3 | |||||||
| Liabilities and Shareholders’ Equity | |||||||||||
| Current liabilities: | |||||||||||
| Short-term borrowings | $ | 732.6 | $ | 427.6 | |||||||
| Accounts payable | 473.7 | 458.4 | |||||||||
| Accrued and other current liabilities | 449.6 | 447.2 | |||||||||
| Total current liabilities | 1,655.9 | 1,333.2 | |||||||||
| Non-current liabilities: | |||||||||||
Non-current portion of long-term debt | 4.5 | 232.6 | |||||||||
| Postretirement benefits | 120.4 | 119.0 | |||||||||
| Other non-current liabilities | 267.1 | 260.7 | |||||||||
| Total non-current liabilities | 392.0 | 612.3 | |||||||||
| Total liabilities | 2,047.9 | 1,945.5 | |||||||||
| Shareholders’ equity: | |||||||||||
| Common stock: | |||||||||||
Authorized – 250.0 shares, $1 par value per share | |||||||||||
Issued and outstanding – 81.0 shares and 81.5 shares, respectively | 81.0 | 81.5 | |||||||||
| Retained earnings | 3,090.5 | 3,115.6 | |||||||||
| Accumulated other comprehensive income (loss): | |||||||||||
| Postretirement benefits | 2.0 | 3.2 | |||||||||
| Cumulative translation adjustments | (394.2) | (421.5) | |||||||||
| Total accumulated other comprehensive loss | (392.2) | (418.3) | |||||||||
| Total ITT Inc. shareholders’ equity | 2,779.3 | 2,778.8 | |||||||||
| Noncontrolling interests | 6.5 | 7.0 | |||||||||
| Total shareholders’ equity | 2,785.8 | 2,785.8 | |||||||||
| Total liabilities and shareholders’ equity | $ | 4,833.7 | $ | 4,731.3 | |||||||
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CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
(IN MILLIONS)
For the Three Months Ended | March 29, 2025 | March 30, 2024 | |||||||||
| Operating Activities | |||||||||||
| Income from continuing operations attributable to ITT Inc. | $ | 108.4 | $ | 111.5 | |||||||
| Adjustments to income from continuing operations: | |||||||||||
| Depreciation and amortization | 37.2 | 33.6 | |||||||||
| Equity-based compensation | 7.9 | 7.0 | |||||||||
| Other non-cash charges, net | 6.3 | 8.1 | |||||||||
| Changes in assets and liabilities: | |||||||||||
| Change in receivables | (43.2) | (67.7) | |||||||||
| Change in inventories | (5.6) | (1.7) | |||||||||
| Change in contract assets | (6.6) | (13.5) | |||||||||
| Change in contract liabilities | 15.9 | 3.3 | |||||||||
| Change in accounts payable | 16.5 | 15.0 | |||||||||
| Change in accrued expenses | (31.7) | (44.5) | |||||||||
| Change in income taxes | 11.8 | 10.3 | |||||||||
| Other, net | (3.5) | (3.6) | |||||||||
| Net Cash – Operating Activities | 113.4 | 57.8 | |||||||||
| Investing Activities | |||||||||||
| Capital expenditures | (36.8) | (27.7) | |||||||||
| Acquisitions, net of cash acquired | (1.9) | (407.6) | |||||||||
| Other, net | (2.0) | — | |||||||||
| Net Cash – Investing Activities | (40.7) | (435.3) | |||||||||
| Financing Activities | |||||||||||
| Commercial paper, net borrowings | 291.8 | 134.7 | |||||||||
Long-term debt issued, net of debt issuance costs | — | 299.1 | |||||||||
| Long-term debt, repayments | (229.3) | (70.5) | |||||||||
| Share repurchases under repurchase plan | (100.0) | — | |||||||||
| Payments for taxes related to net share settlement of stock incentive plans | (13.0) | (12.5) | |||||||||
| Dividends paid | (28.7) | (26.5) | |||||||||
| Other, net | (0.7) | (0.9) | |||||||||
| Net Cash – Financing Activities | (79.9) | 323.4 | |||||||||
| Exchange rate effects on cash and cash equivalents | 7.9 | (12.0) | |||||||||
| Net cash – operating activities of discontinued operations | — | (0.1) | |||||||||
| Net change in cash and cash equivalents | 0.7 | (66.2) | |||||||||
Cash and cash equivalents – beginning of year (includes restricted cash of $0.7 and $0.7, respectively) | 440.0 | 489.9 | |||||||||
Cash and Cash Equivalents – End of Period (includes restricted cash of $0.9 and $0.7, respectively) | $ | 440.7 | $ | 423.7 | |||||||
Supplemental Disclosures of Cash Flow and Non-Cash Information: | |||||||||||
| Cash paid for Interest | $ | 9.1 | $ | 3.7 | |||||||
| Cash paid for Income taxes, net of refunds received | $ | 17.6 | $ | 16.3 | |||||||
Capital expenditures included in current liabilities | $ | 13.9 | $ | 17.5 | |||||||
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Key Performance Indicators and Non-GAAP Measures
ITT reviews a variety of key performance indicators including revenue, operating income and margin, earnings per share, order growth, and backlog. In addition, we consider certain measures to be useful to management and investors when evaluating our operating performance for the periods presented. These measures provide a tool for evaluating our ongoing operations and management of assets from period to period. This information can assist investors in assessing our financial performance and measures our ability to generate capital for deployment among competing strategic alternatives and initiatives, including, but not limited to, acquisitions, dividends, and share repurchases. Some of these metrics, however, are not measures of financial performance under accounting principles generally accepted in the United States of America (GAAP) and should not be considered a substitute for measures determined in accordance with GAAP. We consider the following non-GAAP measures, which may not be comparable to similarly titled measures reported by other companies, to be key performance indicators for purposes of our reconciliation tables.
Organic Revenues and Organic Orders are defined, respectively, as revenue and orders, excluding the impacts of foreign currency fluctuations, acquisitions, and divestitures that may or may not qualify as discontinued operations. Current year activity from acquisitions is excluded for twelve months following the closing date of acquisition. The period-over-period change resulting from foreign currency fluctuations is estimated using a fixed exchange rate for both the current and prior periods. Prior year revenue and orders are adjusted to exclude activity during the comparable period for twelve months post-closing date for divestitures that do not qualify as discontinued operations. We believe that reporting organic revenue and organic orders provide useful information to investors by helping identify underlying trends in our business and facilitating comparisons of our revenue performance with prior and future periods and to our peers.
Adjusted Operating Income is defined as operating income adjusted to exclude special items that include, but are not limited to, restructuring, certain asset impairment charges, certain acquisition- and divestiture-related impacts, and unusual or infrequent operating items. Special items represent charges or credits that impact current results, which management views as unrelated to the Company's ongoing operations and performance. Adjusted Operating Margin is defined as adjusted operating income divided by revenue. We believe these financial measures are useful to investors and other users of our financial statements in evaluating ongoing operating profitability, as well as in evaluating operating performance in relation to our competitors.
Adjusted Income from Continuing Operations is defined as income from continuing operations attributable to ITT Inc. adjusted to exclude special items that include, but are not limited to, restructuring, certain asset impairment charges, certain acquisition- and divestiture-related impacts, income tax settlements or adjustments, and unusual or infrequent items. Special items represent charges or credits, on an after-tax basis, that impact current results, which management views as unrelated to the Company’s ongoing operations and performance. The after-tax basis of each special item is determined using the jurisdictional tax rate of where the expense or benefit occurred and the tax deductibility under local tax rules. Adjusted Income from Continuing Operations per Diluted Share (Adjusted EPS) is defined as adjusted income from continuing operations divided by diluted weighted average common shares outstanding. We believe that adjusted income from continuing operations and adjusted EPS are useful to investors and other users of our financial statements in evaluating ongoing operating profitability, as well as in evaluating operating performance in relation to our competitors.
Free Cash Flow is defined as net cash provided by operating activities less capital expenditures. Free Cash Flow Margin is defined as free cash flow divided by revenue. We believe that free cash flow and free cash flow margin provide useful information to investors as it provides insight into a primary cash flow metric used by management to monitor and evaluate cash flows generated by our operations.
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ITT Inc. Non-GAAP Reconciliation Statements
(In millions; all amounts unaudited)
Reconciliation of Revenue to Organic Revenue | ||||||||||||||||||||
First Quarter | ||||||||||||||||||||
MT | IP | CCT | Elim | Total | ||||||||||||||||
2025 Revenue | $ | 346.1 | $ | 333.3 | $ | 234.7 | $ | (1.1) | $ | 913.0 | ||||||||||
Less: Acquisitions | — | 9.4 | 48.1 | — | 57.5 | |||||||||||||||
Less: Foreign currency translation | (8.4) | (6.5) | (1.1) | — | (16.0) | |||||||||||||||
2025 Organic revenue | $ | 354.5 | $ | 330.4 | $ | 187.7 | $ | (1.1) | $ | 871.5 | ||||||||||
2024 Revenue | $ | 392.4 | $ | 333.9 | $ | 185.1 | $ | (0.8) | $ | 910.6 | ||||||||||
| Less: Divestitures | 39.5 | — | — | — | 39.5 | |||||||||||||||
2024 Organic revenue | $ | 352.9 | $ | 333.9 | $ | 185.1 | $ | (0.8) | $ | 871.1 | ||||||||||
Organic Revenue Growth - $ | $ | 1.6 | $ | (3.5) | $ | 2.6 | $ | 0.4 | ||||||||||||
Organic Revenue Growth - % | 0.5 | % | (1.0) | % | 1.4 | % | — | % | ||||||||||||
Reported Revenue Growth - $ | $ | (46.3) | $ | (0.6) | $ | 49.6 | $ | 2.4 | ||||||||||||
Reported Revenue Growth - % | (11.8) | % | (0.2) | % | 26.8 | % | 0.3 | % | ||||||||||||
Reconciliation of Orders to Organic Orders | ||||||||||||||||||||
First Quarter | ||||||||||||||||||||
MT | IP | CCT | Elim | Total | ||||||||||||||||
2025 Orders | $ | 347.9 | $ | 404.6 | $ | 295.5 | $ | (1.5) | $ | 1,046.5 | ||||||||||
Less: Acquisitions | $ | — | $ | 17.6 | $ | 85.5 | $ | — | $ | 103.1 | ||||||||||
Less: Foreign currency translation | $ | (9.1) | $ | (6.1) | $ | (1.1) | $ | — | $ | (16.3) | ||||||||||
2025 Organic orders | $ | 357.0 | $ | 393.1 | $ | 211.1 | $ | (1.5) | $ | 959.7 | ||||||||||
2024 Orders | $ | 410.5 | $ | 354.0 | $ | 212.8 | $ | (1.1) | $ | 976.2 | ||||||||||
| Less: Divestitures | $ | 39.5 | $ | — | $ | — | $ | — | $ | 39.5 | ||||||||||
2024 Organic orders | $ | 371.0 | $ | 354.0 | $ | 212.8 | $ | (1.1) | $ | 936.7 | ||||||||||
Organic Orders Growth - $ | $ | (14.0) | $ | 39.1 | $ | (1.7) | $ | 23.0 | ||||||||||||
Organic Orders Growth - % | (3.8) | % | 11.0 | % | (0.8) | % | 2.5 | % | ||||||||||||
Reported Orders Growth - $ | $ | (62.6) | $ | 50.6 | $ | 82.7 | $ | 70.3 | ||||||||||||
Reported Orders Growth - % | (15.2) | % | 14.3 | % | 38.9 | % | 7.2 | % | ||||||||||||
Note: Immaterial differences due to rounding. | ||||||||||||||||||||
11
ITT Inc. Non-GAAP Reconciliation Statements
(In millions; all amounts unaudited)
| Reconciliations of Operating Income/Margin to Adjusted Operating Income/Margin | |||||||||||||||||||||||||||||||||||
First Quarter 2025 | First Quarter 2024 [a] | ||||||||||||||||||||||||||||||||||
| MT | IP | CCT | Corporate | ITT | MT | IP | CCT | Corporate | ITT | ||||||||||||||||||||||||||
| Reported Operating Income | $ | 67.6 | $ | 63.5 | $ | 36.0 | $ | (16.2) | $ | 150.9 | $ | 70.6 | $ | 64.5 | $ | 32.7 | $ | (17.9) | $ | 149.9 | |||||||||||||||
| Restructuring costs | 0.2 | 4.2 | 2.1 | — | 6.5 | 0.5 | 0.5 | 0.9 | — | 1.9 | |||||||||||||||||||||||||
| Acquisition-related expenses | — | 0.4 | (0.1) | — | 0.3 | — | 3.7 | — | — | 3.7 | |||||||||||||||||||||||||
Other special items | 0.7 | 0.9 | — | — | 1.6 | 0.2 | — | — | — | 0.2 | |||||||||||||||||||||||||
| Adjusted Operating Income | $ | 68.5 | $ | 69.0 | $ | 38.0 | $ | (16.2) | $ | 159.3 | $ | 71.3 | $ | 68.7 | $ | 33.6 | $ | (17.9) | $ | 155.7 | |||||||||||||||
| Change in Operating Income | (4.2) | % | (1.6) | % | 10.1 | % | (9.5) | % | 0.7 | % | |||||||||||||||||||||||||
| Change in Adjusted Operating Income | (3.9) | % | 0.4 | % | 13.1 | % | (9.5) | % | 2.3 | % | |||||||||||||||||||||||||
| Reported Operating Margin | 19.5 | % | 19.1 | % | 15.3 | % | 16.5 | % | 18.0 | % | 19.3 | % | 17.7 | % | 16.5 | % | |||||||||||||||||||
| Impact of special item adjustments | 30 bps | 160 bps | 90 bps | 90 bps | 20 bps | 130 bps | 50 bps | 60 bps | |||||||||||||||||||||||||||
| Adjusted Operating Margin | 19.8 | % | 20.7 | % | 16.2 | % | 17.4 | % | 18.2 | % | 20.6 | % | 18.2 | % | 17.1 | % | |||||||||||||||||||
| Change in Operating Margin | 150 bps | -20 bps | -240 bps | 0 bps | |||||||||||||||||||||||||||||||
| Change in Adjusted Operating Margin | 160 bps | 10 bps | -200 bps | 30 bps | |||||||||||||||||||||||||||||||
| Note: Immaterial differences due to rounding. | |||||||||||||||||||||||||||||||||||
| [a] The first quarter 2024 includes a change in accounting principle adjustment increasing the previously reported and adjusted operating income for IP and ITT by $0.7 and margin by 10 basis points. Refer to the ITT Quarterly Report on Form 10-Q for additional information pertaining to the change in accounting principle. | |||||||||||||||||||||||||||||||||||
12
ITT Inc. Non-GAAP Reconciliation Statements
(In millions; all amounts unaudited)
| Reconciliation of Reported vs. Adjusted Income from Continuing Operating and Diluted EPS | ||||||||||||||||||||||||||
| Income from Continuing Operations | Diluted Earnings per Share | |||||||||||||||||||||||||
Q1 2025 | Q1 2024 [a] | % Change | Q1 2025 | Q1 2024 [a] | % Change | |||||||||||||||||||||
| Reported | $ | 108.4 | $ | 111.5 | (2.8) | % | $ | 1.33 | $ | 1.35 | (1.5) | % | ||||||||||||||
| Special Items Expense / (Income): | ||||||||||||||||||||||||||
| Restructuring costs | 6.5 | 1.9 | 0.08 | 0.03 | ||||||||||||||||||||||
Acquisition-related costs | 0.3 | 3.7 | — | 0.05 | ||||||||||||||||||||||
Net tax benefit of pre-tax special items | (1.5) | (1.3) | (0.02) | (0.03) | ||||||||||||||||||||||
Other tax-related special items [b] | 3.4 | 1.7 | 0.04 | 0.02 | ||||||||||||||||||||||
| Adjusted | $ | 118.7 | $ | 117.7 | 0.8 | % | $ | 1.45 | $ | 1.42 | 2.1 | % | ||||||||||||||
Note: Amounts may not calculate due to rounding. | ||||||||||||||||||||||||||
| Per share amounts are based on diluted weighted average common shares outstanding. | ||||||||||||||||||||||||||
[a] | The first quarter 2024 includes a change in accounting principle adjustment increasing the previously reported and adjusted income from continuing operations by $0.5M and reported diluted earnings per share by $0.01. Refer to the ITT Quarterly Report on Form 10-Q for additional information pertaining to the change in accounting principle. | |||||||||||||||||||||||||
[b] | Q1 2025 includes tax on undistributed foreign earnings ($2.5M) and other tax special items ($0.9M). Q1 2024 includes tax on undistributed foreign earnings. | |||||||||||||||||||||||||
13
ITT Inc. Non-GAAP Reconciliation Statements
(In millions; all amounts unaudited)
Reconciliation of GAAP vs Adjusted EPS Guidance - Full Year 2025 | ||||||||||||||||||||
2025 Full-Year Guidance | ||||||||||||||||||||
| Low | High | |||||||||||||||||||
EPS from Continuing Operations - GAAP | $ | 5.80 | $ | 6.20 | ||||||||||||||||
| Estimated restructuring | 0.29 | 0.29 | ||||||||||||||||||
| Other special items | 0.03 | 0.03 | ||||||||||||||||||
Tax on special items | (0.07) | (0.07) | ||||||||||||||||||
Other tax-related special items | 0.05 | 0.05 | ||||||||||||||||||
| EPS from Continuing Operations - Adjusted | $ | 6.10 | $ | 6.50 | ||||||||||||||||
Note: The Company has provided forward-looking non-GAAP financial measures for organic revenue growth and adjusted operating margin. It is not possible, without unreasonable efforts, to estimate the impacts of foreign currency fluctuations, acquisitions, and certain other special items that may occur in 2025 as these items are inherently uncertain and difficult to predict. As a result, the Company is unable to quantify certain amounts that would be included in a reconciliation of organic revenue growth and adjusted operating margin to the most directly comparable GAAP financial measures without unreasonable efforts and accordingly has not provided reconciliations for these forward looking non-GAAP financial measures. | ||||||||||||||||||||
14
ITT Inc. Non-GAAP Reconciliation Statements
(In millions; all amounts unaudited)
| Reconciliation of Cash from Operating Activities to Free Cash Flow | ||||||||||||||||||||
| Three Months Ended | FY 2025 Guidance | |||||||||||||||||||
| 3/29/2025 | 3/30/2024 | Low | High | |||||||||||||||||
| Net Cash - Operating Activities | $ | 113.4 | $ | 57.8 | $ | 575.0 | $ | 625.0 | ||||||||||||
| Less: Capital expenditures | 36.8 | 27.7 | 125.0 | 125.0 | ||||||||||||||||
| Free Cash Flow | $ | 76.6 | $ | 30.1 | $ | 450.0 | $ | 500.0 | ||||||||||||
| Revenue | $ | 913.0 | $ | 910.6 | $ | 3,720.0 | $ | 3,720.0 | [a] | |||||||||||
Operating Cash Flow Margin | 12.4 | % | 6.3 | % | 15 | % | 17 | % | ||||||||||||
| Free Cash Flow Margin | 8.4 | % | 3.3 | % | 12 | % | 13 | % | ||||||||||||
[a] Revenue included in the full year 2025 free cash flow margin guidance represents the expected revenue growth mid-point. | ||||||||||||||||||||
15