ESAB Corporation (NYSE:ESAB) Q3 2022 Results Conference Call November 3, 2022 8:00 AM ET

Company Participants

Mark Barbalato - VP, IR

Shyam Kambeyanda - President and CEO

Kevin Johnson - CFO

Conference Call Participants

Tami Zakaria - JP Morgan

Mig Dobre - Baird

Chris Dankert - Loop Capital

Adam Farley - Stifel

Operator

Good day and welcome to the ESAB Corporation Third Quarter 2022 Earnings Call. [Operator Instructions] And finally, I would like to advise all participants that this call is being recorded. Thank you.

I’d now like to welcome Mark Barbalato to begin the conference. Mark, over to you.

Mark Barbalato

Thanks, operator. Welcome to ESAB’s Third Quarter 2022 Earnings Call. This morning, I’m joined by our President and CEO, Shyam Kambeyanda; and CFO, Kevin Johnson.

Please keep in mind that some of the statements we are making are forward looking; and are subject to risks, including those set forth in our SEC filings and today’s earnings release. Actual results may differ. And we do not assume any obligation or intend to update these forward-looking statements, except as required by law. With respect to any non-GAAP financial measures mentioned during the call today, the accompanying reconciliation information related to those measures can be found in our earnings press release and today’s slide presentation.

With that, I’d like to turn the call over to our President and CEO, Shyam Kambeyanda.

Shyam Kambeyanda

Thank you, Mark. Good morning, everyone, and thank you all for joining us today.

I’m on Slide 3. ESAB delivered another solid quarter of revenue growth, margin expansion and cash flow. This quarter, we made great progress towards shaping ESAB into a faster-growing, higher-margin and less-cyclical business. Organic sales increased 10%. Adjusted EBITDA margin expanded 40 basis points to 16.6% as EBX initiatives continued to gain traction. We continue to shape our enterprise towards our long-term strategic goals by introducing exciting, new products; making bolt-on, accretive acquisitions; and using EBX to expand margins and improve cash flow. I’m proud of our team’s effort and execution against these 3 goals.

Moving to Slide 4 and focusing on organic growth. Our vitality index continues to be robust at 27%. On the left of the slide, I’ve highlighted some of our exciting, new products. You will note on the slide that we’re focused on developing industry-leading products that are eco-friendly, efficient and digitally connected. These new welding equipment and gas control products will shape ESAB towards faster organic growth and higher gross margins.