Atmus Filtration Technologies Inc. (NYSE: ATMU)

Atmus Filtration Technologies Inc., or ATMU, is a prominent player in the global filtration industry, specializing in the production of filtration products for on-highway commercial vehicles and off-highway agriculture, construction, mining, and power generation vehicles and equipment. The company's primary brand is Fleetguard, which is recognized for its advanced filtration products that enable lower emissions and offer superior asset protection.

Atmus' main business activities revolve around the design, manufacturing, and sale of a wide range of filtration products and chemicals. These offerings include fuel filters, lube filters, air filters, crankcase ventilation, hydraulic filters, coolants, and various other chemicals. The company's products find application in both new vehicles and equipment as original equipment manufacturer (OEM) components, as well as replacement or repair parts. This dual-purpose approach results in a robust recurring revenue base for Atmus. In 2023, the company reported net sales of $1,628.1 million, with approximately 19% derived from first-fit sales to OEMs and the remaining 81% from the aftermarket.

Atmus boasts a significant presence in the global filtration market, with operations spanning six continents. The company's comprehensive distribution and market coverage enable it to cater to a diverse range of customers and end-users. A large installed base, driven by first-fit relationships with leading OEMs, provides Atmus with a long tail of revenue due to the long lifespans of commercial vehicles and equipment.

The company's competitive advantages lie in its technology leadership, deep industry knowledge, and the iconic Fleetguard brand. Atmus employs a team of around 350 engineers, scientists, and technical specialists who develop a range of filtration technologies, including filtration media, filter element formation, filtration systems integration, and service-related solutions. This technical team collaborates closely with customers to create and implement filtration technologies that enhance operational efficiency.

Atmus has formed strong partnerships with leading OEMs, such as Cummins, Daimler, Deere, Doosan, Foton, Komatsu, Paccar/DAF, the Traton Group (Navistar/Scania/MAN), Stellantis, and Volvo. The company supplies both first-fit and aftermarket products to these customers, having maintained relationships for at least a decade. Written agreements with most key customers outline purchase parameters but do not commit to specific volumes.

End-user relationships are crucial for Atmus, as they provide valuable market intelligence that drives up-sell and cross-sell opportunities while offering direct visibility into market opportunities. These relationships also facilitate the accelerated launch of a broad range of products where Atmus is not the first-fit.

Atmus operates scalable global manufacturing operations, with highly capable facilities in six continents. Strategic investments in automation and optimization of core filtration manufacturing processes deliver cost efficiencies. The company has a strong track record of generating attractive margins and strong operating cash flow, with a net income margin of 10.5% and an Adjusted EBITDA margin of 18.6% in 2023.

The company's senior leadership team includes experienced members such as CEO Stephanie J. Disher, CFO Jack Kienzler, Chief People Officer Renee Swan, Chief Legal Officer Toni Y. Hickey, and Vice President, Engine Products, Charles Masters. This team has a proven track record of driving growth and executing strategic vision to create long-term shareholder value.