Second Quarter 2022 Financial Highlights:
- Revenue of $426.7 million, an increase of 23.1% compared to the prior-year period; organic revenue growth of 10.6%
- Net income of $7.4 million, an increase of 45.1% compared to the prior-year period
- Adjusted EBITDA of $73.2 million, an increase of 26.2% compared to the prior-year period
USA: Evoqua Water Technologies, an industry leader in mission-critical water treatment solutions, has reported the results for its second quarter ended March 31, 2022.
Revenue for the second quarter of the fiscal year 2022 was $426.7 million, compared to $346.6 million in the prior-year period, an increase of 23.1%, or $80.1 million. Organic revenue grew 10.6%, or $36.7 million, driven by higher volume for products and services across most product lines and regions, augmented by favorable price realization. Inorganic revenue contributed $45.4 million, primarily related to our acquisition of the Mar Cor business on January 3, 2022. Revenue was unfavorably impacted $1.7 million related to foreign currency translation. Net income for the quarter was $7.4 million, resulting in diluted earnings per share (EPS) of $0.06, as compared to net income of $5.1 million and diluted EPS of $0.04 in the prior-year period. The increase in net income of 45.1%, or $2.3 million, was driven by higher revenue volume and related gross profit, partially offset by increased expenses primarily related to recent acquisitions and employment costs. Adjusted EBITDA for the quarter was $73.2 million, as compared to $58.0 million in the prior-year period, an increase of 26.2%, or $15.2 million. See the “Use of Non-GAAP Measures” section below for additional information regarding adjusted EBITDA and organic revenue.
“We are pleased to report solid second-quarter results driven by strong market demand across multiple regions, product lines, and end markets. Our book-to-bill ratio was again above 1.0, and disciplined pricing execution resulted in price realization outpacing cost inflation in the quarter. Managing material and skilled labor availability remains a daily priority across our business segments,” said Ron Keating, Evoqua’s CEO.
Mr. Keating continued, “Revenue grew 23% in the quarter, with organic revenue up almost 11% over the prior year. These increases were driven by double-digit growth across capital, service, and, particularly, aftermarket. Our Mar Cor integration is progressing nicely and is on track to achieve the expected synergies communicated last quarter. On April 1, we purchased the remaining equity position of Frontier Water Systems, following our acquisition of a majority position in the company in October 2019.”
Mr. Keating stated, “With a strong first half of 2022 behind us, we maintain a balanced approach to our outlook. For the second half, we expect strong market demand to continue with our book-to-bill ratio remaining above 1.0, pricing initiatives to continue producing a positive price/cost, and adjusted free cash flow conversion to be above 100% of adjusted net income. However, supply chain challenges continue to limit the visibility of order conversion timing and inflationary pressures are temporarily limiting margin expansion. For our fiscal 2022, we are raising the low end of our revenue and adjusted EBITDA outlook ranges by $20.0 million and $5.0 million, respectively. Our full-year revenue outlook range is now $1.64 to $1.70 billion, while our adjusted EBITDA range is $285 to $300 million.”
Evoqua Water Technologies is a leading provider of mission-critical water and wastewater treatment solutions, offering a broad portfolio of products, services, and expertise to support industrial, municipal and recreational customers who value water. Evoqua has worked to protect water, the environment, and its employees for more than 100 years, earning a reputation for quality, safety, and reliability around the world. Headquartered in Pittsburgh, Pennsylvania, the company operates in more than 150 locations across nine countries. The company is serving more than 38,000 customers and 200,000 installations worldwide.
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