Gates Industrial Corporation plc (NYSE: GTES) reported Q4 EPS of $0.20, $0.01 better than the analyst estimate of $0.19. Revenue for the quarter came in at $794.2 million versus the consensus estimate of $725.94 million.

Fourth-Quarter 2020 Highlights

Net sales up 9.4%, including core revenue growth of 8.6%, compared to the prior-year period.
Net income attributable to shareholders of $24.3 million, or $0.08 per diluted share.
Adjusted Net Income of $57.7 million, or $0.20 per diluted share.
Adjusted EBITDA margin of 20.5%, representing year-over-year expansion of 190 basis points.
Net cash provided by operations of $181.5 million.
Free Cash Flow of $159.7 million, or 276.8% of Adjusted Net Income.
Repaid $300 million of long-term debt.
Initiating full-year 2021 guidance.

Ivo Jurek, Gates Industrial\'s Chief Executive Officer, commented, "The fourth quarter marked a turning point for our business as we returned to growth in all of our regions. We delivered solid core revenue growth with 12% sequential acceleration, increased our Adjusted EBITDA over 20% year-over-year and generated a significant amount of Free Cash Flow, all well above the high end of the guidance we provided. Based on the strong liquidity position we built throughout 2020, we also repaid $300 million of long-term debt in the quarter. Our performance demonstrates the benefits of our transformation and highlights the resilience of our business."

Jurek continued, "I'm pleased with the momentum we've seen in the business, as well as the execution of our global teams in managing through the challenges of the COVID-19 pandemic. The strategic investments we've made over the past several years, in combination with the substantial improvements implemented during the downturn, have put us in a position of strength entering 2021. We have an improved, more-flexible manufacturing footprint, revitalized product portfolio and focused organic growth initiatives that are starting to deliver solid results. We are excited about the potential that the year holds and the runway we have for above-market growth, margin expansion and strong cash generation."

2021 Outlook

The Company is introducing its full-year 2021 outlook, with core revenue expected to grow in the range of 9% to 14%, and Adjusted EBITDA margin expected in the range of 21% to 22%. The Company expects total capital expenditures in the range of $90 million to $110 million and Free Cash Flow Conversion to be greater than 80% of Adjusted Net Income.

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