Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (date of earliest event reported): February 7, 2024

ADIENT PLC

(Exact name of registrant as specified in its charter)


Ireland	001-37757	98-1328821
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification Number)


3 Dublin Landings, North Wall Quay Dublin 1, Ireland D01 H104
(Address of principal executive offices)

Registrant’s telephone number, including area code: 734-254-5000

Not applicable

(Former name or former address, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of class

Trading symbol(s)

Name of exchange on which registered

Ordinary Shares, par value $0.001

ADNT

New York Stock Exchange

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrants under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the Registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition.

On February 7, 2024, Adient plc (the “Company”) issued a news release announcing its financial results for the first quarter ended December 31, 2023. The news release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

The information contained in Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.


EXHIBIT INDEX
Exhibit No.						Exhibit Description

99.1						Adient plc News Release dated February 7, 2024

104						Cover Page Interactive Data File (the Cover Page Interactive Data File is embedded within the Inline XBRL document).

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


	ADIENT PLC
Date: February 7, 2024	By:	/s/ Heather M. Tiltmann
	Name:	Heather M. Tiltmann
	Title:	Executive Vice President, Chief Legal and Human Resources Officer, and Corporate Secretary

Exhibit 99.1

Appendix

Page 1

Adient plc

Condensed Consolidated Statements of Income

(Unaudited)


	Three Months Ended December 31,
(in millions, except per share data)	2023		2022
Net sales	$	3,660	$	3,699
Cost of sales	3,414		3,468
Gross profit	246		231
Selling, general and administrative expenses	147		138

Restructuring and impairment costs	11		7
Equity income	23		28
Earnings before interest and income taxes	111		114
Net financing charges	44		41
Other pension expense	2		9
Income before income taxes	65		64
Income tax provision (benefit)	20		31
Net income	45		33
Income attributable to noncontrolling interests	25		21
Net income attributable to Adient	$	20	$	12

Diluted earnings per share	$	0.21	$	0.13

Shares outstanding at period end	91.2		95.4
Diluted weighted average shares	93.6		95.9

Appendix

Page 2

Adient plc

Condensed Consolidated Statements of Financial Position

(Unaudited)


	December 31,		September 30,
(in millions)	2023		2023
Assets
Cash and cash equivalents	$	990	$	1,110
Accounts receivable - net	1,661		1,874
Inventories	833		841

Other current assets	590		491
Current assets	4,074		4,316

Property, plant and equipment - net	1,401		1,382
Goodwill	2,138		2,094
Other intangible assets - net	401		408
Investments in partially-owned affiliates	322		303
Assets held for sale	7		7
Other noncurrent assets	954		914
Total assets	$	9,297	$	9,424

Liabilities and Shareholders' Equity
Short-term debt	$	144	$	134
Accounts payable and accrued expenses	2,751		2,926

Other current liabilities	653		678
Current liabilities	3,548		3,738

Long-term debt	2,403		2,401

Other noncurrent liabilities	673		682
Redeemable noncontrolling interests	57		57
Shareholders' equity attributable to Adient	2,285		2,228
Noncontrolling interests	331		318
Total liabilities and shareholders' equity	$	9,297	$	9,424

Appendix

Page 3

Adient plc

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Three Months Ended December 31,
(in millions)	2023		2022
Operating Activities
Net income attributable to Adient	$	20	$	12
Income attributable to noncontrolling interests	25		21
Net income	45		33
Adjustments to reconcile net income to cash provided (used) by operating activities:
Depreciation	72		69
Amortization of intangibles	11		12
Pension and postretirement benefit expense (benefit)	3		9
Pension and postretirement contributions, net	(10)		(3)
Equity in earnings of partially-owned affiliates, net of dividends received	(6)		(16)




Deferred income taxes	(6)		(1)


Equity-based compensation	13		8
Other	—		(3)
Changes in assets and liabilities:
Receivables	234		167
Inventories	29		22
Other assets	(81)		(47)
Restructuring reserves	(9)		(27)
Accounts payable and accrued liabilities	(256)		(191)
Accrued income taxes	2		12
Cash provided (used) by operating activities	41		44
Investing Activities
Capital expenditures	(55)		(61)
Sale of property, plant and equipment	14		15

Business acquisitions	—		(6)
Proceeds from business divestitures, net	(3)		3


Other	—		(1)
Cash provided (used) by investing activities	(44)		(50)
Financing Activities
Increase (decrease) in short-term debt	5		—
Increase (decrease) in long-term debt	—		2
Repayment of long-term debt	—		(2)
Debt financing costs	—		(7)
Share repurchases	(100)		—


Dividends paid to noncontrolling interests	(48)		(50)

Share based compensation and other	(12)		(12)
Cash provided (used) by financing activities	(155)		(69)
Effect of exchange rate changes on cash and cash equivalents	38		29


Increase (decrease) in cash and cash equivalents	$	(120)	$	(46)

Appendix

Page 4

Footnotes

1. Segment Results

Adient manages its business on a geographic basis and operates in the following three reportable segments for financial reporting purposes: 1) Americas, which is inclusive of North America and South America; 2) Europe, the Middle East and Africa ("EMEA") and 3) Asia Pacific/China ("Asia").

Adient evaluates the performance of its reportable segments using an adjusted EBITDA metric defined as income before income taxes and noncontrolling interests, excluding net financing charges, qualified restructuring and impairment costs, restructuring related-costs, net mark-to-market adjustments on pension and postretirement plans, transaction gains/losses, purchase accounting amortization, depreciation, stock-based compensation and other non-recurring items. Also, certain corporate-related costs are not allocated to the segments. The reportable segments are consistent with how management views the markets served by Adient and reflect the financial information that is reviewed by its chief operating decision maker.

Financial information relating to Adient's reportable segments is as follows:


	Three Months Ended December 31,
(in millions)	2023		2022
Net Sales
Americas	$	1,647	$	1,724
EMEA	1,268		1,182
Asia	770		821
Eliminations	(25)		(28)
Total net sales	$	3,660	$	3,699


	Three Months Ended December 31,
(in millions)	2023		2022
Adjusted EBITDA
Americas	$	80	$	69
EMEA	45		28
Asia	114		138
Corporate-related costs (1)	(23)		(23)
Restructuring and impairment costs (2)	(11)		(7)
Purchase accounting amortization (3)	(11)		(12)
Restructuring related activities (4)	9		(3)


Stock based compensation (12)	(13)		(8)
Depreciation	(72)		(69)
Other items (5)	(7)		1
Earnings before interest and income taxes	$	111	$	114
Net financing charges	(44)		(41)
Other pension income (expense)	(2)		(9)
Income before income taxes	$	65	$	64

Refer to the Footnote Addendum for footnote explanations.

Appendix

Page 5

2. Earnings Per Share

The following table reconciles the numerators and denominators used to calculate basic and diluted earnings per share:


	Three Months Ended December 31,
(in millions, except per share data)	2023		2022
Income available to shareholders
Net income attributable to Adient	$	20	$	12

Weighted average shares outstanding
Basic weighted average shares outstanding	92.9		95.1
Effect of dilutive securities:
Stock options, unvested restricted stock and unvested performance share awards	0.7		0.8
Diluted weighted average shares outstanding	93.6		95.9

Appendix

Page 6

3. Non-GAAP Measures

Adjusted EBIT, Adjusted EBIT margin, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted net income attributable to Adient, Adjusted effective tax rate, Adjusted earnings per share, Adjusted equity income, Adjusted interest expense, Free cash flow, Net debt, and Net leverage ratio as well as other measures presented on an adjusted basis are not recognized terms under U.S. GAAP and do not purport to be alternatives to the most comparable U.S. GAAP amounts. Since all companies do not use identical calculations, our definition and presentation of these measures may not be comparable to similarly titled measures reported by other companies. Management uses the identified non-GAAP measures to evaluate the operating performance of the Company and its business segments and to forecast future periods. Management believes these non-GAAP measures assist investors and other interested parties in evaluating Adient's on-going operations and provide important supplemental information to management and investors regarding financial and business trends relating to Adient's financial condition and results of operations. Investors should not consider these non-GAAP measures as alternatives to the related GAAP measures. Reconciliations of non-GAAP measures to their closest U.S. GAAP equivalent are presented below. Reconciliations of non-GAAP measures related to guidance for any future period have not been provided due to the unreasonable efforts it would take to provide such reconciliations.


•			Adjusted EBIT is defined as income before income taxes and noncontrolling interests excluding net financing charges, restructuring, impairment and related costs, purchase accounting amortization, transaction gains/losses, other significant non-recurring items, and net mark-to-market adjustments on pension and postretirement plans. Adjusted EBIT margin is adjusted EBIT as a percentage of net sales.

•			Adjusted EBITDA is defined as adjusted EBIT excluding depreciation and stock based compensation. Certain corporate-related costs are not allocated to the business segments in determining Adjusted EBITDA. Adjusted EBITDA margin is adjusted EBITDA as a percentage of net sales. Adjusted EBITDA excluding adjusted equity income, each as defined herein, is also presented.
•			Adjusted net income attributable to Adient is defined as net income attributable to Adient excluding restructuring, impairment and related costs, purchase accounting amortization, transaction gains/losses, expenses associated with becoming an independent company, other significant non-recurring items, net mark-to-market adjustments on pension and postretirement plans, the tax impact of these items and other discrete tax charges/benefits.

•			Adjusted effective tax rate is defined as adjusted income tax provision as a percentage of adjusted income before income taxes.

•			Adjusted earnings per share is defined as Adjusted net income attributable to Adient divided by diluted weighted average shares.

•			Adjusted equity income is defined as equity income excluding amortization of Adient's intangible assets related to its non-consolidated joint ventures and other unusual or one-time items impacting equity income.
•			Adjusted interest expense is defined as net financing charges excluding unusual or one-time items impacting interest expense.
•			Free cash flow is defined as cash provided by operating activities less capital expenditures.
•			Net debt is calculated as gross debt (short-term and long-term) less cash and cash equivalents.
•			Net leverage ratio is calculated as net debt divided by LTM Adjusted EBITDA

Appendix

Page 7

Summarized Income Statement Information

(Refer to the Footnote Addendum for footnote explanations and details

of reconciling items between GAAP results and Adjusted results)


	Three Months Ended December 31,
	2023						2022
(in millions, except per share data)	GAAP Results		Adj.		Adjusted Results		GAAP Results		Adj.		Adjusted Results
Net sales	$	3,660	$	—	$	3,660	$	3,699	$	—	$	3,699
Cost of sales (6)	3,414		(1)		3,413		3,468		(1)		3,467
Gross profit	246		1		247		231		1		232
Selling, general and administrative expenses (7)	147		(6)		141		138		(14)		124

Restructuring and impairment costs (2)	11		(11)		—		7		(7)		—
Equity income (8)	23		2		25		28		(1)		27
Earnings before interest and income taxes (EBIT)	111		20		131		114		21		135

Memo accounts:
Depreciation					72						69
Equity based compensation					13						8
Adjusted EBITDA					$	216					$	212

Net financing charges	44		—		44		41		—		41
Other pension expense (income)	2		—		2		9		(8)		1
Income before income taxes	65		20		85		64		29		93
Income tax provision (benefit) (9)	20		9		29		31		6		37
Net income attributable to Adient	20		9		29		12		21		33
Diluted earnings per share	0.21		0.10		0.31		0.13		0.21		0.34
Diluted weighted average shares	93.6		—		93.6		95.9		—		95.9

Appendix

Page 8

Segment Performance:


	Three months ended December 31, 2023
	Americas			EMEA			Asia			Corporate/Eliminations		Consolidated

Net sales	$	1,647		$	1,268		$	770		$	(25)	$	3,660

Adjusted EBITDA	$	80		$	45		$	114		$	(23)	$	216

Adjusted EBITDA margin	4.9		%	3.5		%	14.8		%	N/A		5.9		%


	Three months ended December 31, 2022
	Americas			EMEA			Asia			Corporate/Eliminations		Consolidated

Net sales	$	1,724		$	1,182		$	821		$	(28)	$	3,699

Adjusted EBITDA	$	69		$	28		$	138		$	(23)	$	212

Adjusted EBITDA margin	4.0		%	2.4		%	16.8		%	N/A		5.7		%

The following table presents adjusted EBITDA excluding adjusted equity income:


	Three Months Ended December 31,
(in millions)	2023			2022
Adjusted EBITDA	$	216		$	212

Less: Adjusted Equity Income	25			27

Adjusted EBITDA Excluding Adjusted Equity Income	$	191		$	185
% of Sales	5.2		%	5.0		%

The following table reconciles income before income taxes to adjusted income before income taxes and presents the related effective tax rate and adjusted effective tax rate:


	Three months ended December 31,
	2023					2022
(in millions, except effective tax rate)	Income before income taxes		Tax impact		Effective tax rate	Income before income taxes		Tax impact		Effective tax rate
As reported	$	65	$	20	30.8%	$	64	$	31	48.4%
Adjustments (9)	20		9		45.0%	29		6		20.7%
As adjusted	$	85	$	29	34.1%	$	93	$	37	39.8%

Appendix

Page 9

The following table reconciles net income attributable to Adient to adjusted net income attributable to Adient:


	Three Months Ended December 31,
(in millions)	2023		2022
Net income attributable to Adient	$	20	$	12
Restructuring and impairment costs (2)	11		7
Purchase accounting amortization (3)	11		12
Restructuring related activities (4)	(9)		3
Pension mark-to-market and curtailment/settlement (gain)/loss (11)	—		8







Other items (5)	7		(1)
Impact of adjustments on noncontrolling interests (10)	(2)		(2)
Tax impact of above adjustments and other tax items (9)	(9)		(6)
Adjusted net income attributable to Adient	$	29	$	33

Refer to the Footnote Addendum for footnote explanations

The following table reconciles diluted earnings per share as reported to adjusted diluted earnings per share.


	Three Months Ended December 31,
	2023		2022
Diluted earnings per share as reported	$	0.21	$	0.13
Restructuring and impairment costs (2)	0.12		0.07
Purchase accounting amortization (3)	0.12		0.12
Restructuring related activities (4)	(0.10)		0.03
Pension mark-to-market and curtailment/settlement (gain)/loss (11)	—		0.08







Other items (5)	0.07		(0.01)
Impact of adjustments on noncontrolling interests (10)	(0.02)		(0.02)
Tax impact of above adjustments and other tax items (9)	(0.09)		(0.06)
Adjusted diluted earnings per share	$	0.31	$	0.34

Appendix

Page 10

The following table presents calculations of net debt and net leverage ratio:


	December 31,		September 30,
(in millions)	2023		2023
Cash	$	990	$	1,110
Total debt	2,547		2,535
Net debt	1,557		1,425
LTM Adjusted EBITDA	$	942	$	938
Net leverage ratio	1.65		1.52

The following table reconciles cash from operating activities to free cash flow:


	Three Months Ended December 31,
(in millions)	2023		2022
Operating cash flow	$	41	$	44
Capital expenditures	(55)		(61)
Free cash flow	$	(14)	$	(17)

The following table reconciles adjusted EBITDA excluding adjusted equity income to free cash flow:


	Three Months Ended December 31,
(in millions)		2023		2022
Adjusted EBITDA excluding adjusted equity income		$	191	$	185
Dividend		16		12
Restructuring (cash)		(10)		(30)
Net customer tooling		(17)		(14)
Trade working capital (Net AR/AP + Inventory)		111		46
Accrued compensation		(64)		(28)
Interest paid		(60)		(24)
Tax refund/taxes paid		(24)		(20)
Non-income related taxes (VAT)		(28)		(19)
Commercial settlements		16		(17)
Capitalized engineering		(17)		(25)
Prepaids		(19)		(24)
Other		(54)		2
Operating cash flow		41		44
Capital expenditures		(55)		(61)
Free cash flow		$	(14)	$	(17)

Appendix

Page 11

Footnote Addendum

(1) Corporate-related costs not allocated to the segments include executive office, communications, corporate development, legal and corporate finance.

(2) Reflects qualified restructuring charges for costs that are directly attributable to restructuring activities and meet the definition of restructuring under ASC 420 and one-time asset impairments, as follows:


	Three Months Ended December 31,
(in millions)	2023		2022
Restructuring charges	$	(11)	$	(7)



	$	(11)	$	(7)

(3) Reflects amortization of intangible assets including those related to partially owned affiliates recorded within equity income.

(4) Reflects non-qualified restructuring charges for costs that are directly attributable to restructuring activities, but do not meet the definition of restructuring under ASC 420 along with a gain on sale of a restructured facility in the America's segment for three months ended December 31, 2023, as follows:


	Three Months Ended December 31,
(in millions)	2023		2022
Restructuring related charges	$	(1)	$	(3)
Gain on sale of restructured facility	10		—
	$	9	$	(3)

(5) Other items include:


	Three Months Ended December 31,
(in millions)	2023		2022
Non-recurring contract related settlement	$	3	$	—
One-time divestiture related tax impact at an affiliate	(2)		—
Loss on business divestiture	(8)		—
Transaction costs	—		(1)
Adjustment to nonconsolidated partially-owned affiliates	—		1
Brazil indirect tax recoveries	—		1




	$	(7)	$	1

(6) The adjustments to cost of sales include:


	Three Months Ended December 31,
(in millions)	2023		2022
Restructuring related activities	$	(1)	$	(2)
Brazil indirect tax recoveries	—		1



	$	(1)	$	(1)

Appendix

Page 12

(7) The adjustments to selling, general and administrative costs include:


	Three Months Ended December 31,
(in millions)	2023		2022
Purchase accounting amortization	$	(11)	$	(12)
Loss on business divestiture	(8)		—
Gain on sale of restructured facility	10		—
Non-recurring contract related settlement	3		—
Transaction costs	—		(1)
Restructuring related activities	—		(1)


	$	(6)	$	(14)

(8) The adjustments to equity income include:


	Three Months Ended December 31,
(in millions)	2023		2022
One-time divestiture related tax impact at an affiliate	$	2	$	—

Adjustment to nonconsolidated partially-owned affiliates	—		(1)

	$	2	$	(1)

(9) The adjustments to income tax provision (benefit) include:


	Three Months Ended December 31,
(in millions)	2023		2022
Tax audit closures and statute expirations	$	(7)	$	(3)

Amortization	(2)		(2)
Pension curtailment loss	—		(2)



Other reconciling items	—		1
	$	(9)	$	(6)

(10) Reflects the impact of adjustments, primarily purchase accounting amortization on noncontrolling interests. In addition, during the first quarter of fiscal 2024, a $5 million adjustment was recorded to increase income attributable to noncontrolling interest related to the three months ended September 30, 2023.

(11) During the three months ended December 31, 2022, Adient recorded an $8 million curtailment loss associated with employee termination benefit plans in the Americas segment.

(12) During the three months ended December 31, 2023, a $5 million adjustment was recorded to increase equity-based compensation expense related to a retired executive's equity awards which should have been recognized in prior periods.

Cover	Feb. 07, 2024
Entity Addresses [Line Items]
Document Type	8-K
Document Period End Date	Feb. 07, 2024
Entity Registrant Name	ADIENT PLC
Entity Incorporation, State or Country Code	L2
Entity File Number	001-37757
Entity Tax Identification Number	98-1328821
Entity Address, Address Line One	3 Dublin Landings
Entity Address, Address Line Two	North Wall Quay
Entity Address, City or Town	Dublin 1
Entity Address, Country	IE
Entity Address, Postal Zip Code	D01 H104
City Area Code	734
Local Phone Number	254-5000
Title of 12(b) Security	Ordinary Shares, par value $0.001
Trading Symbol	ADNT
Security Exchange Name	NYSE
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Entity Central Index Key	0001670541
Amendment Flag	false