Company: ATMU
Filing Date: 2025-05-02
Form Type: 10-Q
Source: 0001921963-25-000075
Chunk: 81

Company: Atmus Filtration Technologies Inc.
Filing Date: 2025-05-02
Form: 10-Q
Item: Item 2
Chunk 81
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 of the more important factors affecting our performance are briefly discussed below.

Market demand

Aftermarket and first-fit demand continued to soften in the first three months of 2025 reflecting depressed market conditions across many of our key markets. These market conditions reflect the general economic uncertainties attributable to the recent U.S. government tariff announcement and the retaliatory measures of certain other countries.

Global supply chain

While overall supply chain conditions continue to affect inventory and backlog levels, they have largely stabilized with minimal disruptions now being experienced and backorders largely recovered. Our management team continues to monitor and evaluate all of these factors and the related impacts on our business and operations, and we are diligently working to continue to minimize any supply chain impacts to our business and to our customers.

Commodity prices, labor, inflation and foreign currency exchange rates

Direct material cost pressures, driven largely by steel, resin and other petrochemical products, have generally stabilized, though rising costs were observed in the latter portions of the period. 

19

During the first three months of 2025, our Selling, general and administrative expenses increased as a result of increased people-related and consulting expenses.

Additionally, the appreciation of the U.S. dollar against foreign currencies had an unfavorable impact on our condensed consolidated results of operations in the first three months of 2025 due to translation impacts. We remain in a volatile currency environment and as such, there can be no assurances that this trend will continue for the remainder of 2025.

Standalone costs

We have incurred, and expect to continue to incur, additional costs associated with becoming a standalone public company. During the three months ended March 31, 2025, we incurred approximately $9.3 million of one-time expenses including $6.8 million within Cost of sales and $2.5 million within Selling, general and administrative expenses. We expect to incur one-time expenses of approximately $10 million to $15 million in 2025 in connection with becoming a standalone public company. In addition, we expect to incur capital expenditures in connection with the Separation of approximately $5 million to $10 million in 2025. These expenses and capital expenditures primarily relate to the establishment of functions previously co-mingled with Cummins, such as information technologies, distribution centers, manufacturing and human resources. The one-time costs incurred during the three months ended March 31, 2025, were primarily associated with establishing our own standalone warehouse in Belgium as we worked to ensure we were supporting customer needs. These expenses and capital expenditures are expected to be complete