Steph Disher
Chief Executive Officer at Cummins
Thank you, Todd and good morning everyone. We delivered strong performance in the first quarter. On the call today, I will provide an update on our performance in the quarter, our outlook for the year and provide some comments on delivery of our growth strategy. Jack will then provide additional details regarding our financial performance.
Before I discuss the quarterly performance, I would like to acknowledge the significant milestone of Atmus becoming a fully independent company on March 18. On February 14, Cummins announced an exchange offer, whereby Cummins shareholders could exchange all or a portion of Cummins common stock for shares of Atmus. Investors showed significant interest in the offer, with the transaction approximately twelve times oversubscribed. The divestiture of Atmus shares by Cummins was completed on March 18 and resulted in the full separation of Atmus.
With the successful completion of the exchange offer, all former Cummins appointed Directors have resigned from the Atmus Board of Directors and two new independent Directors, Diego Donoso and Stuart Taylor have been appointed to the Board. A majority of the Atmus Board of Directors is now independent and I'm excited to be working with the Board as we continue to accelerate growth and deliver long-term value for our shareholders.
Now, let's turn to the first quarter financial results and our current outlook for 2024. We delivered strong financial performance in the first quarter. Sales were $427 million compared to $419 million during the same period last year, an increase of approximately 2%. Adjusted EBITDA in the first quarter was $80 million or 18.8%, compared to $79 million or 18.8% in the prior period.
Adjusted EBITDA for the quarter excludes $6 million of one-time standalone costs and $4 million for the same period last year. Adjusted earnings per share was $0.60 in the first quarter of 2024 and adjusted free cash flow was negative $13 million. Adjusted free cash flow excludes $6 million of one-time separation related items.
Now let me provide some insight into our global market. As expected, we saw softer freight activity during the first quarter. However, our continued market share gains are offsetting some of the market weakness. Demand in the first-fit markets has started to show signs of slowing in the US. In India, markets remain robust, while in China, the market continues to fall short of expectations.
Looking ahead to our outlook for global markets, I will start with aftermarket for both on-highway and off-highway. In North America, we saw the Casp [Phonetic] rate index down 5% in the first quarter, compared to the prior year. The rate of decline slowed through the quarter with the month of March down 3.6% year-over-year. While we are expecting year-over-year freight activity to gradually improve through the balance of the year, we are still experiencing year-over-year declines and have not yet seen positive freight activity compared to the prior periods.
In global off-highway markets, we continue to see strength in North American construction for both residential and non residential construction, partially aided by government infrastructure spending. Economic conditions in Europe continue to be depressed with weakness in construction activity and in the Asia Pacific region, we are seeing low utilization rates across a number of our key end markets. Overall, we expect aftermarket for on-highway and off-highway to be flat to up 2% during the year, down slightly from our previous guidance of flat to up 3%.
Let's turn to our first-fit markets. In the US, we are anticipating declines to primarily impact the second half of 2024. We are modestly raising our outlook for US heavy duty truck to be down 7% to 12% for the full year, from our previous guidance of down 10% to 15%. In medium duty truck, our outlook remains unchanged at flat to down 5%. In China, we expect weakness to persist and demand for trucks in India is expected to remain robust, driven by strong on-highway performance.
While the outlook for our markets is mixed, we continue to execute on our growth plans and expand our market share in both aftermarket and first-fit. Our revenue guidance is unchanged at down 1% to up 3%, with global sales in the range of $1.61 billion to $1.675 billion. We expect continued strong operational performance and to deliver adjusted EBITDA margins of 18.25% to 19.25%, unchanged from prior guidance.
Additionally, adjusted EPS is unchanged from our prior outlook and anticipated to be in a range of $2.10 to $2.35. As we have separated from Cummins, we have incurred separation cost and cash impacts associated with establishing a standalone company. These costs and cash flows are one-time in nature. We want to be transparent and highlight those items to enable a clear understanding of the ongoing performance and cash generation of our business.
In relation to cash flow outlook, I want to highlight a one-time cash outflow which is estimated to be $30 million in 2024. This impact arises as a result of a change in working capital. Cummins previously processed our payroll on our behalf and we've received 60 day term. As we transition to managing our own payroll directly, this cash will flow immediately upon payment to employees.
Now I would like to take a moment to share the progress we have made on implementing our growth strategy. As a reminder, there are four pillars of our growth strategy. Our first pillar is to grow share in first-fit. We are a leader in fuel filtration and crankcase ventilation products and we are focused on growing this leadership position with global OEM customers.
We are winning with the winners and have continued to secure Cummins new vehicle platform. We are also accelerating growth with other leading global OEMs. We have recently won the fuel filtration business of a global OEM for the European and North American business and we are actively pursuing new customers who are out of reach to us as part of Cummins.
Our second and third pillar are interrelated and focus on accelerating profitable growth in the aftermarket and transforming our supply chain. We are relentlessly focused on our customers and providing the right product when and where it is needed. Our agility allows us to continue gaining share in the aftermarket with our world class Fleetguard products. As a key component of our agility is the continued transformation of our global distribution capabilities to provide our customers with industry leading product availability.
Earlier this year, we inaugurated our southern distribution center near Dallas, Texas and we recently opened our newest distribution facility in Singapore. We now have coverage for over 80% of our volume being distributed through dedicated Atmus warehouse facility. We are on track to establish additional centers in Europe throughout 2024.
We are also focused on driving efficiencies through our purchasing organization and investing in automation in our manufacturing operations. These focus areas will support continued reduction of our operating costs. We have demonstrated delivery of our transformation initiative through expansion of our adjusted EBITDA margin 300 basis points during 2023. Our guidance for 2024 reflects continued momentum, as we execute on our strategy.
Our fourth pillar is to expand into industrial filtration markets. We intend to pursue this growth inorganically and we see a strong pipeline of opportunities which our team is continuously evaluating. We will take a disciplined, programmatic approach, with a focus on creating long-term shareholder value. Our capital allocation priorities will continue to reflect our focus on growing our business, both organically and inorganically. We are also assessing our approach to returning cash to shareholders now that we are an independent company. I am proud of our Atmus team who delivered another strong quarter of performance. As a fully independent company, we will accelerate our growth strategy as we move through 2024.
Now, I will turn the call over to Jack, who will discuss our financial results in more detail.
