LONDON, UNITED KINGDOM – nVent Electric plc provided a business update in response to the COVID-19 pandemic; announced financial results for the first quarter of 2020; and withdrew its 2020 financial guidance provided on February 5, 2020 due to uncertainties relating to the pandemic.
“During this time nVent has established three priorities. We will focus first on the safety and well-being of our employees, continue business operations to serve our customers and support critical infrastructure, and make nVent stronger as a company, well-positioned to exit this crisis,” said Beth Wozniak, nVent’s chief executive officer. “We are executing on actions to realize approximately 50 million dollars of expected cost savings. These actions are a combination of temporary and structural changes, which we believe positions us well for when growth returns.”
“We saw demand deteriorate in geographies impacted by the COVID-19 pandemic. First it was China and then Europe and North America towards the end of the quarter as stay at home orders began to be enforced. As of today all our manufacturing sites are operational to support critical infrastructure such as data centers and networking solutions, medical and defense, to name a few,” said Wozniak.
“We believe we have a strong capital structure and have a healthy balance sheet. The company is taking appropriate actions and has identified multiple levers to preserve cash,” said Wozniak. “I want to thank our nVent employees, all of whom are making extraordinary efforts to support our customers, support our communities and support one another. I am confident in our people and plans to navigate through this time and emerge stronger.”
First quarter sales of $521 million were down 3 percent relative to the first quarter 2019 and declined 8 percent organically, which excludes the impact from currency fluctuations and acquisitions. Eldon added approximately $26 million in sales to the Enclosures segment during the first quarter. First quarter 2020 earnings per diluted share (“EPS”) were $0.11, down 66%, while on an adjusted basis, the company had EPS of $0.34, down 13%. Segment income, adjusted net income, free cash flow and adjusted EPS are described in the attached schedules.
First quarter 2020 operating income was $60 million, down 22 percent from $78 million in the first quarter of 2019. On an adjusted basis, segment income was $82 million, down 15 percent from $96 million in the first quarter of 2019, largely due to the impact of volume declines.
The company had net cash provided by operating activities of $7 million in the first quarter and free cash flow usage was $2 million, which was better than the prior year period. As of March 31, 2020, the company continued to have a strong liquidity position with $188 million in cash on hand and a net debt to EBITDA leverage ratio of 2.3x. The company proactively drew down $150 million on its revolving credit facility and has $315 million undrawn on the facility.
nVent previously announced on February 25, 2020 that its Board of Directors approved a regular cash dividend of $0.175 per share, payable during the second quarter on May 8, 2020.