Segment information (Tables)

3 Months Ended

Apr. 02, 2022

Schedule of net sales by operating segment

Sales between reporting segments and the impact of such sales on Adjusted EBITDA for each segment are not included in internal reports presented to the CEO and have therefore not been included below.


	Three months ended
(dollars in millions)	April 2, 2022		April 3, 2021
Power Transmission	$	555.6	$	559.5
Fluid Power	337.8		321.8
Continuing operations	$	893.4	$	881.3

Adjusted EBITDA by segment was as follows:


	Three months ended
(dollars in millions)	April 2, 2022		April 3, 2021
Power Transmission	$	97.8	$	132.7
Fluid Power	59.0		63.6
Continuing operations	$	156.8	$	196.3

Schedule of net sales by key geographic regions and markets

The following table summarizes our net sales by key geographic region of origin:


	Three months ended April 2, 2022			Three months ended April 3, 2021
(dollars in millions)		Power Transmission		Fluid Power		Power Transmission		Fluid Power
U.S.		$	159.1	$	167.5	$	155.9	$	152.7
North America, excluding U.S.		49.2		50.9		46.7		49.4
United Kingdom (“U.K.”)		12.0		17.4		12.7		14.7
EMEA(1), excluding U.K.		159.7		55.7		162.8		49.6
East Asia and India		74.4		21.0		82.9		23.5
Greater China		80.0		13.5		81.9		24.0
South America		21.2		11.8		16.6		7.9
Net sales		$	555.6	$	337.8	$	559.5	$	321.8

(1) Europe, Middle East and Africa (“EMEA”).

The following table summarizes our net sales into emerging and developed markets:


	Three months ended
(dollars in millions)	April 2, 2022		April 3, 2021
Developed	$	573.1	$	555.0
Emerging	320.3		326.3
Net sales	$	893.4	$	881.3

Reconciliation of adjusted EBITDA to net income from continuing operations

Reconciliation of net income from continuing operations to Adjusted EBITDA:


	Three months ended
(dollars in millions)	April 2, 2022		April 3, 2021
Net income from continuing operations	$	37.4	$	76.5
Income tax (benefit) expense	(2.2)		18.9
Income from continuing operations before taxes	35.2		95.4
Interest expense	32.6		34.4
Other expenses (income)	0.6		(1.2)
Operating income from continuing operations	68.4		128.6
Depreciation and amortization	55.1		55.8
Transaction-related expenses (1)	0.8		2.4

Restructuring expenses	0.5		2.9

Share-based compensation expense	24.1		6.3


Inventory impairments and adjustments (2) (included in cost of sales)	7.6		—


Severance expenses (included in SG&A)	0.3		0.3

Adjusted EBITDA	$	156.8	$	196.3

(1) Transaction-related expenses relate primarily to advisory fees and other costs recognized in respect of major corporate transactions, including the acquisition of businesses, and equity and debt transactions.

(2) Inventory impairments and adjustments include the reversal of the adjustment to remeasure certain inventories on a LIFO basis. The recent inflationary environment has caused LIFO values to drop below First-in, First-out (“FIFO”) values because LIFO measurement results in the more recent inflated costs being matched against current sales while historical, lower costs are retained in inventories.