The following is a summary of the Atmus Filtration Technologies Inc. (ATMU) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Atmus Filtration Technologies Inc. reported Q3 2024 sales of $404 million, marking an increase from $396 million in the previous year.

• Adjusted EBITDA for Q3 2024 was $79 million or 19.6%, a rise from $73 million or 18.3% in the prior year.

• Adjusted earnings per share were $0.61, and adjusted free cash flow reached $65 million.

Business Progress:

• Atmus has made substantial progress in transitioning from Cummins, with an 80% completion rate, expected to reach 90% by year-end, allowing more focus on growth.

• The company has a strategic resistance on first-fit market share growth and aftermarket expansion.

• New warehouse facilities in the UK and the upcoming transition of the remaining European facilities underline improvements in their own distribution network.

• On the product side, Atmus launched multiple new products aiming to grow organically in the industrial filtration market.

Opportunities:

• Atmus plans to leverage inorganic acquisition opportunities within industrial filtration, focusing on verticals like industrial air, liquids excluding water, and industrial water.

• The aftermarket revenue is expected to grow by approximately 2% to 4% year-over-year.

• Additional revenue opportunities arise from pricing, expected to add about 1.5% increase year-over-year.

Risks:

• The company is experiencing challenges in the first-fit markets, with weakening demand in the U.S. and abroad, specifically in India and China.

• Global aftermarket market is projected to decline by 2% to 3% reflecting continued soft freight activity along with weakness in the off-highway, construction, mining, and agriculture markets.

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