Gates Industrial Corporation plc reported its financial results for the three and nine months ended September 28, 2024, revealing a decline in net sales and net income compared to the same periods in 2023. For the third quarter, net sales were $830.7 million, down 4.8% from $872.9 million in the prior year. For the nine-month period, net sales totaled $2,578.8 million, a decrease of 4.7% from $2,706.9 million in 2023. The decline in sales was attributed to a significant drop in core sales, particularly in the industrial OEM channel, which fell by 15.0% in the third quarter, primarily in North America and EMEA.
Despite the decrease in sales, Gates reported a slight increase in gross profit for the nine months, rising to $1,023.2 million from $1,021.2 million in 2023. However, gross profit for the third quarter decreased to $335.8 million from $343.4 million in the same period last year. Operating income from continuing operations for the third quarter was $113.2 million, down from $125.9 million, while for the nine months, it increased to $366.1 million from $342.3 million.
Net income from continuing operations for the third quarter was $55.2 million, a significant drop from $85.6 million in 2023. For the nine months, net income decreased to $179.3 million from $187.8 million. The company’s earnings per share from continuing operations also fell, with basic EPS at $0.18 for the third quarter compared to $0.30 in the prior year.
Gates experienced a deconsolidation loss of $12.8 million due to the suspension of operations in Russia, which impacted the financial results. The company has been exiting its Russian activities since 2022, with minimal administrative costs remaining in 2024.
In terms of strategic developments, Gates has been active in managing its debt. The company issued $1,300.0 million in new term loans in June 2024 to extinguish previous loans and increased its revolving credit facility from $250.0 million to $500.0 million. Additionally, a share repurchase program was initiated in July 2024, with approximately $125 million of ordinary shares repurchased during the third quarter.
Overall, while Gates Industrial Corporation plc faced challenges in sales and profitability, it continued to focus on strategic financial management and restructuring efforts to navigate market conditions.
About Gates Industrial Corp plc
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