PHILADELPHIA, Aug. 4, 2020 /PRNewswire/ --
Second Quarter 2020 Highlights
- Revenue of $1.16 billion,
down 4 percent versus Q2 2019, up 3 percent
organically1
- Consolidated GAAP net income of $185
million, up 5 percent versus Q2 2019
- Adjusted EBITDA of $341 million, up 1 percent versus
Q2 2019
- Consolidated GAAP earnings of $1.41 per diluted share, up 7 percent versus Q2
2019
- Consolidated adjusted earnings per diluted share of
$1.72, up 4 percent versus Q2
2019
Full-Year Outlook Highlights2
- Revenue outlook range of $4.68 to
$4.82 billion, reflecting 3 percent
growth at the midpoint versus 2019 and 9 percent organic
growth1
- Raising adjusted EBITDA outlook to a range of $1.265 to $1.325
billion, reflecting 6 percent growth at the midpoint versus
2019
- Raising adjusted earnings guidance to a range of $6.28 to $6.62 per
diluted share, reflecting 6 percent growth at the midpoint versus
2019
FMC Corporation (NYSE: FMC) today reported second quarter 2020
revenue of approximately $1.16 billion, a decrease of 4 percent
versus second quarter 2019. Excluding the impact of foreign
currencies, organic sales grew 3 percent year over year. On a GAAP
basis, the company reported earnings of $1.41 per diluted share in the second
quarter, an increase of 7 percent versus second quarter 2019.
Second quarter adjusted earnings were $1.72 per diluted share, an increase of
4 percent versus second quarter 2019, and 6 cents above
the midpoint of guidance.
|
Second Quarter Adj.
EPS versus Guidance (midpoint)*
|
+6
cents**
|
|
EBITDA
|
+6 cents
|
|
Depreciation &
amortization
|
-1 cent
|
|
Interest
expense
|
-0.5 cent
|
|
Non-controlling
interest
|
+0.5 cent
|
|
Share count
|
+0.5 cent
|
|
|
|
*
|
Guidance refers to
EPS guidance presented on May 5, 2020 of $1.58 to $1.74
|
|
**
|
Contributing factors
do not sum to 6 cents, due to rounding
|
Mark Douglas, FMC president and
CEO said: "FMC delivered solid financial performance despite
challenging global conditions that included severe headwinds from
foreign currencies, impacts from COVID-19, and adverse weather in
Europe. FMC's geographic balance,
strength in demand for our product portfolio and pricing actions
all contributed to earnings growth in the quarter, as did the
proactive cost controls implemented at the outset of the
pandemic."
FMC revenue decline was driven by a 7 percent headwind from
foreign currencies, offset partially by a 2 percent
contribution from volume and a 1 percent contribution from price.
Latin America sales grew
2 percent year over year, and 24 percent excluding FX
headwinds. Pricing helped offset some of the FX headwinds, while
the underlying volume gains came from strong herbicide and
insecticide sales in Argentina and
robust sales for sugarcane applications in Brazil. In Asia, revenue increased 2 percent year
over year, and 8 percent excluding FX. Volume growth in
India, Pakistan and Australia, as well as modest pricing across
the region, were mostly offset by FX headwinds. In North America, sales decreased 6 percent
year over year, driven primarily by our planned activities to
reduce channel inventories of pre-emergent herbicides, partially
offset by strong insecticide sales. Sales in EMEA decreased
13 percent year over year and decreased 10 percent
excluding FX, due to poor weather conditions in Northern and
Eastern Europe as well as
forecasted registration losses and product rationalizations.
|
FMC
Revenue
|
Q2
2020
|
|
Organic
Growth
|
3%
|
|
FX Impact
|
(7%)
|
|
Total Revenue
Change
|
(4%)
|
2020 Outlook2
The company is forecasting full-year 2020 revenue to be in the
range of $4.68 billion to
$4.82 billion, representing an
increase of 3 percent at the midpoint versus 2019. Organic growth
is expected to be 9 percent, which is 1 percent higher than the
prior guidance. Full-year adjusted EBITDA is now expected to
be in the range of $1.265 billion to
$1.325 billion, representing 6
percent year-over-year growth at the midpoint and an increase of 1
percent versus prior guidance. 2020 adjusted earnings are now
expected to be in the range of $6.28
to $6.62 per diluted share,
representing a year-over-year increase of 6 percent at the midpoint
and 7 cents higher than prior
forecast. Full-year earnings growth drivers include volume in
Latin America and Asia Pacific, pricing and continued cost
discipline.
"While we expect continued challenges related to the global
pandemic and foreign currency headwinds throughout 2020, we are
more confident in our outlook for the remainder of the year and are
raising the midpoints of our EBITDA and EPS guidance," said
Douglas.
Third and Fourth Quarter Outlook2
Third quarter revenue is expected to be in the range of
$1.045 billion to $1.105 billion, representing a 6 percent increase
at the midpoint compared to third quarter 2019, and organic growth
of 12 percent excluding foreign currency headwinds.
Adjusted EBITDA is forecasted to be in the range of
$233 million to $257 million, representing a 12 percent increase
at the midpoint versus Q3 2019. FMC expects adjusted earnings per
diluted share to be in the range of $1.03 to $1.17 in
the third quarter, which is an increase of 17 percent at the
midpoint versus Q3 2019.
Fourth quarter revenue is expected to be in the range of
$1.23 billion to $1.31 billion, representing a 6 percent increase
at the midpoint compared to fourth quarter 2019, and organic growth
of 11 percent excluding foreign currency headwinds.
Adjusted EBITDA is forecasted to be in the range of
$335 million to $371 million, representing a 10 percent increase
at the midpoint versus Q4 2019. FMC expects adjusted earnings per
diluted share to be in the range of $1.71 to $1.91 in
the fourth quarter, which represents growth of 3 percent at the
midpoint versus Q4 2019.
|
Full Year
Outlook
|
Q3 2020
Outlook
|
Q4 2020
Outlook
|
|
Revenue
|
$4.68 to $4.82
billion
|
$1.045 to $1.105
billion
|
$1.23 to $1.31
billion
|
|
Organic
Growth
|
9%
|
12%
|
11%
|
|
Estimated FX
Impact
|
(6%)
|
(6%)
|
(5%)
|
|
Growth at midpoint
vs.
2019
|
3%
|
6%
|
6%
|
|
Adjusted
EBITDA
|
$1.265 to $1.325
billion
|
$233 to $257
million
|
$335 to $371
million
|
|
Growth at midpoint
vs.
2019
|
6%
|
12%
|
10%
|
|
Adjusted
EPS^
|
$6.28 to
$6.62
|
$1.03 to
$1.17
|
$1.71 to
$1.91
|
|
Growth at midpoint
vs.
2019
|
6%
|
17%
|
3%*
|
|
|
|
^
|
EPS estimates assume
131 million diluted shares.
|
|
*
|
Q4 2019 adjusted EPS
benefited from a large tax adjustment.
|
Supplemental Information
The company will post supplemental information on the web at
https://investors.fmc.com, including its webcast slides for
tomorrow's earnings call, definitions of non-GAAP terms and
reconciliations of non-GAAP figures to the nearest available GAAP
term.
About FMC
FMC Corporation, an agricultural sciences company, provides
innovative solutions to growers around the world with a robust
product portfolio fueled by a market-driven discovery and
development pipeline in crop protection, plant health, and
professional pest and turf management. This powerful combination of
advanced technologies includes leading insect control products
based on Rynaxypyr® and Cyazypyr® active ingredients; Authority®,
Boral®, Centium®, Command® and Gamit® branded herbicides; Talstar®
and Hero® branded insecticides; and flutriafol-based fungicides.
The FMC portfolio also includes biologicals such as Quartzo® and
Presence® bionematicides. FMC Corporation employs approximately
6,400 employees around the globe. To learn more, please visit
www.fmc.com.
FMC, the FMC logo, Rynaxypyr, Cyazypyr, Authority, Boral,
Centium, Command, Gamit, Talstar, Hero, Quartzo and Presence are
trademarks of FMC Corporation or an affiliate. Always read and
follow all label directions, restrictions and precautions for use.
Products listed here may not be registered for sale or use in all
states, countries or jurisdictions. Hero® insecticide is a
restricted use pesticide in the United
States.
The Company's investor relations website, located at
https://investors.fmc.com, should be considered as a recognized
channel of distribution, and the Company may periodically post
important information to the web site for investors, including
information that the Company may wish to disclose publicly for
purposes of complying with the federal securities laws. After
April 27, 2021, this type of
information will no longer be provided by press release but will
continue to be posted on the investor relations website.
Statement under the Safe Harbor Provisions of the Private
Securities Litigation Reform Act of 1995: FMC and its
representatives may from time to time make written or oral
statements that are "forward-looking" and provide other than
historical information, including statements contained in this
press release, in FMC's other filings with the SEC, and in reports
or letters to FMC stockholders.
In some cases, FMC has identified forward-looking statements
by such words or phrases as "will likely result," "is confident
that," "expect," "expects," "should," "could," "may," "will
continue to," "believe," "believes," "anticipates," "predicts,"
"forecasts," "estimates," "projects," "potential," "intends" or
similar expressions identifying "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of
1995, including the negative of those words and phrases. Such
forward-looking statements are based on management's current views
and assumptions regarding future events, future business conditions
and the outlook for the company based on currently available
information. These statements involve known and unknown risks,
uncertainties and other factors that may cause actual results to be
materially different from any results, levels of activity,
performance or achievements expressed or implied by any
forward-looking statement. Currently, one of the most significant
factors is the potential adverse effect of the current COVID-19
pandemic on the financial condition, results of operations, cash
flows and performance of FMC, which is substantially influenced by
the potential adverse effect of the pandemic on FMC's customers and
suppliers and the global economy and financial markets. The extent
to which COVID-19 impacts us will depend on future developments,
which are highly uncertain and cannot be predicted with confidence,
including the scope, severity and duration of the pandemic, the
actions taken to contain the pandemic or mitigate its impact, and
the direct and indirect economic effects of the pandemic and
containment measures, among others. Additional factors
include, among other things, the risk factors and cautionary
statements included within FMC's 2019 Form 10-K and FMC's Form 10-Q
for the quarter ended June 30, 2020.
Moreover, investors are cautioned to interpret many of these
factors as being heightened as a result of the ongoing and numerous
adverse impacts of the COVID-19 pandemic.
FMC cautions readers not to place undue reliance on any
forward-looking statements, which speak only as of the date made.
Forward-looking statements are qualified in their entirety by the
above cautionary statement. FMC undertakes no obligation, and
specifically disclaims any duty, to update or revise any
forward-looking statements to reflect events or circumstances
arising after the date on which they were made, except as otherwise
required by law.
This press release contains certain "non-GAAP financial
terms" which are defined on our website www.fmc.com/investors. In
addition, we have also provided on our website reconciliations of
non-GAAP terms to the most directly comparable GAAP term.
|
1.
|
Organic revenue
growth (non-GAAP) excludes the impact of foreign currency
changes.
|
|
|
|
2.
|
Although we provide
forecasts for adjusted earnings per share and adjusted EBITDA
(non-
GAAP financial
measures), we are not able to forecast the most directly comparable
measures
calculated and
presented in accordance with GAAP. Certain elements of the
composition of
the GAAP amounts are
not predictable, making it impractical for us to forecast. Such
elements
include, but are not
limited to, restructuring, acquisition charges, and discontinued
operations.
As a result, no GAAP
outlook is provided.
|
|
FMC
CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(LOSS)
(Unaudited, in millions, except per share
amounts)
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
Revenue
|
$
|
1,155.3
|
|
|
$
|
1,206.1
|
|
|
$
|
2,405.3
|
|
|
$
|
2,398.2
|
|
|
Costs of sales and
services
|
632.6
|
|
|
655.6
|
|
|
1,321.1
|
|
|
1,303.0
|
|
|
Gross
margin
|
$
|
522.7
|
|
|
$
|
550.5
|
|
|
$
|
1,084.2
|
|
|
$
|
1,095.2
|
|
|
Selling, general and
administrative expenses
|
171.0
|
|
|
196.9
|
|
|
360.4
|
|
|
380.8
|
|
|
Research and
development expenses
|
64.3
|
|
|
73.1
|
|
|
131.6
|
|
|
144.3
|
|
|
Restructuring and
other charges (income)
|
19.5
|
|
|
12.7
|
|
|
32.9
|
|
|
20.5
|
|
|
Total costs and
expenses
|
$
|
887.4
|
|
|
$
|
938.3
|
|
|
$
|
1,846.0
|
|
|
$
|
1,848.6
|
|
|
Income from
continuing operations before non-operating
pension and postretirement charges (income), interest
expense, net and income taxes
|
$
|
267.9
|
|
|
$
|
267.8
|
|
|
$
|
559.3
|
|
|
$
|
549.6
|
|
|
Non-operating pension
and postretirement charges (income)
|
2.2
|
|
|
3.3
|
|
|
4.4
|
|
|
6.7
|
|
|
Interest expense,
net
|
40.7
|
|
|
39.5
|
|
|
81.5
|
|
|
74.0
|
|
|
Income (loss) from
continuing operations before income
taxes
|
$
|
225.0
|
|
|
$
|
225.0
|
|
|
$
|
473.4
|
|
|
$
|
468.9
|
|
|
Provision (benefit)
for income taxes
|
29.2
|
|
|
30.6
|
|
|
63.9
|
|
|
66.9
|
|
|
Income (loss) from
continuing operations
|
$
|
195.8
|
|
|
$
|
194.4
|
|
|
$
|
409.5
|
|
|
$
|
402.0
|
|
|
Discontinued
operations, net of income taxes
|
(10.8)
|
|
|
(18.1)
|
|
|
(18.3)
|
|
|
(8.5)
|
|
|
Net income
(loss)
|
$
|
185.0
|
|
|
$
|
176.3
|
|
|
$
|
391.2
|
|
|
$
|
393.5
|
|
|
Less: Net income
(loss) attributable to noncontrolling
interests
|
0.6
|
|
|
1.8
|
|
|
0.6
|
|
|
3.3
|
|
|
Net income (loss)
attributable to FMC stockholders
|
$
|
184.4
|
|
|
$
|
174.5
|
|
|
$
|
390.6
|
|
|
$
|
390.2
|
|
|
Amounts
attributable to FMC stockholders:
|
|
|
|
|
|
|
|
|
Income (loss)
from continuing operations
|
$
|
195.2
|
|
|
$
|
192.6
|
|
|
$
|
408.9
|
|
|
$
|
398.7
|
|
|
Discontinued
operations, net of tax
|
(10.8)
|
|
|
(18.1)
|
|
|
(18.3)
|
|
|
(8.5)
|
|
|
Net income
(loss)
|
$
|
184.4
|
|
|
$
|
174.5
|
|
|
$
|
390.6
|
|
|
$
|
390.2
|
|
|
Basic earnings
(loss) per common share attributable to
FMC stockholders:
|
|
|
|
|
|
|
|
|
Continuing
operations
|
$
|
1.50
|
|
|
$
|
1.46
|
|
|
$
|
3.15
|
|
|
$
|
3.02
|
|
|
Discontinued
operations
|
(0.08)
|
|
|
(0.14)
|
|
|
(0.14)
|
|
|
(0.06)
|
|
|
Basic
earnings per common share
|
$
|
1.42
|
|
|
$
|
1.32
|
|
|
$
|
3.01
|
|
|
$
|
2.96
|
|
|
Average number of
shares outstanding used in basic
earnings per share computations
|
129.7
|
|
|
131.1
|
|
|
129.6
|
|
|
131.4
|
|
|
Diluted earnings
(loss) per common share attributable to
FMC stockholders:
|
|
|
|
|
|
|
|
|
Continuing
operations
|
$
|
1.49
|
|
|
$
|
1.46
|
|
|
$
|
3.13
|
|
|
$
|
3.00
|
|
|
Discontinued
operations
|
(0.08)
|
|
|
(0.14)
|
|
|
(0.14)
|
|
|
(0.06)
|
|
|
Diluted
earnings per common share
|
$
|
1.41
|
|
|
$
|
1.32
|
|
|
$
|
2.99
|
|
|
$
|
2.94
|
|
|
Average number of
shares outstanding used in diluted
earnings per share computations
|
130.6
|
|
|
132.3
|
|
|
130.5
|
|
|
132.7
|
|
|
|
|
|
|
|
|
|
|
Other
Data:
|
|
|
|
|
|
|
|
|
Capital additions and
other investing activities
|
$
|
19.2
|
|
|
$
|
15.6
|
|
|
$
|
43.8
|
|
|
$
|
36.4
|
|
|
Depreciation and
amortization expense
|
40.1
|
|
|
37.2
|
|
|
79.2
|
|
|
74.5
|
|
|
FMC
CORPORATION
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES
|
|
|
RECONCILIATION OF
NET INCOME (LOSS) ATTRIBUTABLE TO FMC STOCKHOLDERS (GAAP) TO
ADJUSTED AFTER-TAX EARNINGS FROM CONTINUING OPERATIONS,
ATTRIBUTABLE TO FMC
STOCKHOLDERS (NON-GAAP)
(Unaudited, in millions, except
per share amounts)
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
Net income (loss)
attributable to FMC stockholders (GAAP)
|
$
|
184.4
|
|
|
$
|
174.5
|
|
|
$
|
390.6
|
|
|
$
|
390.2
|
|
|
Corporate special
charges (income):
|
|
|
|
|
|
|
|
|
Restructuring and
other charges (income) (a)
|
19.5
|
|
|
12.7
|
|
|
32.9
|
|
|
20.5
|
|
|
Non-operating pension
and postretirement charges (income) (b)
|
2.2
|
|
|
3.3
|
|
|
4.4
|
|
|
6.7
|
|
|
Transaction-related
charges (c)
|
13.0
|
|
|
20.1
|
|
|
26.0
|
|
|
36.6
|
|
|
Income tax expense
(benefit) on Corporate special charges (income)
(d)
|
(5.9)
|
|
|
(7.1)
|
|
|
(10.8)
|
|
|
(12.8)
|
|
|
Discontinued
operations attributable to FMC stockholders, net of
income taxes (e)
|
10.8
|
|
|
18.1
|
|
|
18.3
|
|
|
8.5
|
|
|
Tax adjustment
(f)
|
—
|
|
|
(1.4)
|
|
|
2.2
|
|
|
(0.2)
|
|
|
Adjusted after-tax
earnings from continuing operations
attributable to FMC stockholders (Non-GAAP)
(1)
|
$
|
224.0
|
|
|
$
|
220.2
|
|
|
$
|
463.6
|
|
|
$
|
449.5
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
common share (GAAP)
|
$
|
1.41
|
|
|
$
|
1.32
|
|
|
$
|
2.99
|
|
|
$
|
2.94
|
|
|
Corporate special
charges (income) per diluted share, before tax:
|
|
|
|
|
|
|
|
|
Restructuring and
other charges (income)
|
0.15
|
|
|
0.10
|
|
|
0.25
|
|
|
0.16
|
|
|
Non-operating pension
and postretirement charges (income)
|
0.02
|
|
|
0.02
|
|
|
0.03
|
|
|
0.05
|
|
|
Transaction-related
charges
|
0.10
|
|
|
0.15
|
|
|
0.20
|
|
|
0.28
|
|
|
Income tax expense
(benefit) on Corporate special charges (income), per diluted
share
|
(0.04)
|
|
|
(0.06)
|
|
|
(0.08)
|
|
|
(0.10)
|
|
|
Discontinued
operations attributable to FMC stockholders, net of
income taxes per diluted share
|
0.08
|
|
|
0.14
|
|
|
0.14
|
|
|
0.06
|
|
|
Tax adjustments per
diluted share
|
—
|
|
|
(0.01)
|
|
|
0.02
|
|
|
—
|
|
|
Diluted adjusted
after-tax earnings from continuing
operations per share, attributable to FMC stockholders
(Non-GAAP)
|
$
|
1.72
|
|
|
$
|
1.66
|
|
|
$
|
3.55
|
|
|
$
|
3.39
|
|
|
|
|
|
|
|
|
|
|
Average number of
shares outstanding used in diluted adjusted
after-tax earnings from continuing operations per share
computations
|
130.6
|
|
|
132.3
|
|
|
130.5
|
|
|
132.7
|
|
|
|
____________________
|
|
(1)
|
The Company believes
that the Non-GAAP financial measure "Adjusted after-tax earnings
from continuing operations attributable
to FMC stockholders" and its presentation on a per share basis
provides useful information about the Company's operating
results
to management, investors, and securities analysts. Adjusted
earnings excludes the effects of corporate special charges,
tax-related
adjustments and the results of our discontinued operations. The
Company also believes that excluding the effects of these items
from
operating results allows management and investors to compare more
easily the financial performance of its underlying business
from
period to period.
|
|
|
|
(a)
|
Three Months Ended
June 30, 2020:
|
|
|
|
Restructuring and
other charges (income) is comprised of charges associated with the
integration of the DuPont Crop Protection Business.
These charges include severance, accelerated depreciation on
certain fixed assets, and other costs of $16.2 million. The
remaining restructuring
and other charges (income) includes charges of environmental sites
of $3.3 million.
|
|
|
|
Three Months Ended
June 30, 2019:
|
|
|
|
Restructuring and
other charges (income) is primarily comprised of charges associated
with the integration of the DuPont Crop Protection
Business. These charges include severance, accelerated depreciation
on certain fixed assets, and other costs (benefits) of $4.1
million.
Additionally, restructuring and other charges (income) includes
charges of continuing environmental sites treated as a Corporate
charge of
$5.6 million and other miscellaneous restructuring charges totaling
$3.0 million.
|
|
|
|
Six Months Ended
June 30, 2020:
|
|
|
|
Restructuring and
other charges (income) is primarily comprised of charges associated
with the integration of the DuPont Crop Protection
Business. These charges include severance, accelerated depreciation
on certain fixed assets, and other costs of $23.2 million. The
remaining
restructuring and other charges (income) primarily includes charges
of environmental sites of $9.7 million.
|
|
|
|
Six Months Ended
June 30, 2019:
|
|
|
|
Restructuring and
other charges (income) is primarily comprised of charges associated
with the integration of the DuPont Crop Protection
Business. These charges include severance, accelerated depreciation
on certain fixed assets, and other costs (benefits) of $8.0
million.
Additionally, restructuring and other charges (income) includes
charges of environmental sites of $8.2 million and other
miscellaneous
restructuring charges totaling $4.3 million.
|
|
|
|
(b)
|
Our non-operating
pension and postretirement charges (income) are defined as those
costs (benefits) related to interest, expected return
on plan assets, amortized actuarial gains and losses and the
impacts of any plan curtailments or settlements. These are excluded
from our
Adjusted Earnings and are primarily related to changes in pension
plan assets and liabilities which are tied to financial market
performance
and we consider these costs to be outside our operational
performance. We continue to include the service cost and
amortization of prior service
cost in our Adjusted Earnings results noted above. These elements
reflect the current year operating costs to our businesses for the
employment
benefits provided to active employees.
|
|
|
|
(c)
|
Charges related to
legal and professional fees associated with acquisition activities.
Except for the completion of certain in-flight initiatives,
primarily
associated with the finalization of our worldwide ERP system, we
have completed the integration of the DuPont Crop Protection
Business as of
June 30, 2020. The transition services agreement is now terminated
and we have completed a significant portion of the implementation
of the new
ERP system. The last phase of the ERP system transition is expected
to take place on November 1, 2020 with a stabilization period that
will go into
the first quarter of 2021. We anticipate remaining expense of
approximately $30 million to $35 million for the completion of
these defined in-flight initiatives
during the remaining time period.
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
(in
Millions)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
DuPont Crop
Protection Business Acquisition
|
|
|
|
|
|
|
|
|
Legal and professional
fees (1)
|
$
|
13.0
|
|
|
$
|
20.1
|
|
|
$
|
26.0
|
|
|
$
|
36.6
|
|
|
Total
Transaction-related charges
|
$
|
13.0
|
|
|
$
|
20.1
|
|
|
$
|
26.0
|
|
|
$
|
36.6
|
|
|
____________________
|
|
(1)
|
Represents
transaction costs, costs for transitional employees, other acquired
employees related costs, and transactional-
related costs such as legal and professional third-party fees.
These charges are recorded as a component of "Selling,
general and administrative expense" on the condensed consolidated
statements of income (loss).
|
|
|
|
(d)
|
The income tax
expense (benefit) on Corporate special charges (income) is
determined using the applicable rates in the
taxing jurisdictions in which the corporate special charge or
income occurred and includes both current and deferred income
tax expense (benefit) based on the nature of the non-GAAP
performance measure.
|
|
|
|
(e)
|
Three and Six
Months Ended June 30, 2020 and 2019
|
|
|
|
Discontinued
operations, net of income taxes include, in periods up to its
separation on March 1, 2019, the results of FMC
Lithium, including separation-related costs, as well as provisions,
net of recoveries, for environmental liabilities and legal
reserves and expenses related to previously discontinued
operations. During the six months ended June 30, 2019, we
finalized
the sale of the first of two parcels of land of our discontinued
site in Newark, California. The gain on sale was approximately
$21 million, net of tax, and was partially offset by the results of
our FMC Lithium business, which was a net loss due to
separation-related costs. These events did not recur in the current
period.
|
|
|
|
(f)
|
We exclude the
GAAP tax provision, including discrete items, from the Non-GAAP
measure of income, and include a
Non-GAAP tax provision based upon the projected annual Non-GAAP
effective tax rate. The GAAP tax provision includes
certain discrete tax items including, but are not limited to:
income tax expenses or benefits that are not related to
continuing
operating results in the current year; tax adjustments associated
with fluctuations in foreign currency remeasurement of certain
foreign operations; certain changes in estimates of tax matters
related to prior fiscal years; certain changes in the realizability
of
deferred tax assets and related interim accounting impacts; and
changes in tax law. Management believes excluding these
discrete tax items assists investors and securities analysts in
understanding the tax provision and the effective tax rate related
to
continuing operating results thereby providing investors with
useful supplemental information about FMC's operational
performance.
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
(in
Millions)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
Non-GAAP tax
adjustments
|
|
|
|
|
|
|
|
|
Revisions to valuation
allowances of historical deferred
tax assets
|
—
|
|
|
0.2
|
|
|
$
|
(0.4)
|
|
|
$
|
0.6
|
|
|
Foreign currency
remeasurement and other discrete items
|
—
|
|
|
(1.6)
|
|
|
2.6
|
|
|
(0.8)
|
|
|
Total Non-GAAP tax
adjustments
|
$
|
—
|
|
|
$
|
(1.4)
|
|
|
$
|
2.2
|
|
|
$
|
(0.2)
|
|
|
RECONCILIATION OF
NET INCOME (LOSS) (GAAP) TO ADJUSTED EARNINGS FROM CONTINUING
OPERATIONS, BEFORE INTEREST, INCOME TAXES, DEPRECIATION AND
AMORTIZATION, AND
NONCONTROLLING INTERESTS (NON-GAAP)
(Unaudited, in
millions)
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
Net income (loss)
(GAAP)
|
$
|
185.0
|
|
|
$
|
176.3
|
|
|
$
|
391.2
|
|
|
$
|
393.5
|
|
|
Restructuring and
other charges (income)
|
19.5
|
|
|
12.7
|
|
|
32.9
|
|
|
20.5
|
|
|
Non-operating pension
and postretirement charges (income)
|
2.2
|
|
|
3.3
|
|
|
4.4
|
|
|
6.7
|
|
|
Transaction-related
charges
|
13.0
|
|
|
20.1
|
|
|
26.0
|
|
|
36.6
|
|
|
Discontinued
operations, net of income taxes
|
10.8
|
|
|
18.1
|
|
|
18.3
|
|
|
8.5
|
|
|
Interest expense,
net
|
40.7
|
|
|
39.5
|
|
|
81.5
|
|
|
74.0
|
|
|
Depreciation and
amortization
|
40.1
|
|
|
37.2
|
|
|
79.2
|
|
|
74.5
|
|
|
Provision (benefit)
for income taxes
|
29.2
|
|
|
30.6
|
|
|
63.9
|
|
|
66.9
|
|
|
Adjusted earnings
from continuing operations, before interest,
income taxes, depreciation and amortization, and
noncontrolling interests (Non-GAAP) (1)
|
$
|
340.5
|
|
|
$
|
337.8
|
|
|
$
|
697.4
|
|
|
$
|
681.2
|
|
|
___________________
|
|
(1)
|
Referred to as
Adjusted EBITDA. Defined as operating profit excluding corporate
special charges (income) and depreciation and
amortization expense.
|
|
RECONCILIATION OF
CASH PROVIDED (REQUIRED) BY OPERATING ACTIVITIES OF
CONTINUING OPERATIONS (GAAP) TO FREE CASH FLOW (NON-GAAP)
(Unaudited)
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
(In
Millions)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
Cash provided
(required) by operating activities of continuing
operations (GAAP)(1)
|
$
|
260.5
|
|
|
$
|
66.1
|
|
|
$
|
(48.4)
|
|
|
$
|
(216.8)
|
|
|
Transaction and
integration costs
|
17.0
|
|
|
23.2
|
|
|
39.5
|
|
|
43.1
|
|
|
Adjusted cash from
operations (2)
|
$
|
277.5
|
|
|
$
|
89.3
|
|
|
$
|
(8.9)
|
|
|
$
|
(173.7)
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
(7.7)
|
|
|
(16.4)
|
|
|
(23.2)
|
|
|
(35.5)
|
|
|
Other investing
activities
|
(11.5)
|
|
|
0.8
|
|
|
(20.6)
|
|
|
(0.9)
|
|
|
Capital additions
and other investing activities
|
$
|
(19.2)
|
|
|
$
|
(15.6)
|
|
|
$
|
(43.8)
|
|
|
$
|
(36.4)
|
|
|
|
|
|
|
|
|
|
|
Cash provided
(required) by operating activities of discontinued
operations
|
(25.9)
|
|
|
(14.4)
|
|
|
(45.3)
|
|
|
(8.7)
|
|
|
Cash provided
(required) by investing activities of discontinued
operations
|
1.1
|
|
|
—
|
|
|
1.1
|
|
|
9.2
|
|
|
Transaction and
integration costs
|
(17.0)
|
|
|
(23.2)
|
|
|
(39.5)
|
|
|
(43.1)
|
|
|
Investment in
Enterprise Resource Planning system
|
(12.0)
|
|
|
(14.1)
|
|
|
(30.6)
|
|
|
(26.7)
|
|
|
Legacy and
transformation
|
$
|
(53.8)
|
|
|
$
|
(51.7)
|
|
|
$
|
(114.3)
|
|
|
$
|
(69.3)
|
|
|
|
|
|
|
|
|
|
|
Free cash flow
(Non-GAAP) (3)
|
$
|
204.5
|
|
|
$
|
22.0
|
|
|
$
|
(167.0)
|
|
|
$
|
(279.4)
|
|
|
|
___________________
|
|
(1)
|
The cash provided
(required) by operating activities for the three months ended June
30, 2020 and 2019 is the calculation of the six
months ended June 30, 2020 and 2019 less the previously reported
three months ended March 31, 2020 and 2019,
respectively.
|
|
|
|
(2)
|
Adjusted cash
from operations is defined as cash provided (required) by operating
activities of continuing operations excluding
the effects of transaction-related cash flows.
|
|
|
|
(3)
|
Free cash flow is
defined as Adjusted cash from operations reduced by spending for
capital additions and other investing activities
as well as legacy and transformation spending. We believe that this
Non-GAAP financial measure provides a useful basis for
investors
and securities analysts about the cash generated by routine
business operations, including capital expenditures, in addition to
assessing
our ability to repay debt, fund acquisitions and return capital to
shareholders through share repurchases and dividends. Our use of
free cash
flow has limitations as an analytical tool and should not be
considered in isolation or as a substitute for an analysis of our
results under U.S. GAAP.
|
|
RECONCILIATION OF
REVENUE CHANGE (GAAP) TO
ORGANIC REVENUE CHANGE
(NON-GAAP) (1)
(Unaudited)
|
|
|
Three Months
Ended
June 30, 2020 vs. 2019
|
|
Six Months
Ended
June 30, 2020 vs. 2019
|
|
Total Revenue
Change (GAAP)
|
(4)
|
%
|
|
—
|
%
|
|
Less: Foreign Currency
Impact
|
(7)
|
%
|
|
(6)
|
%
|
|
Organic Revenue
Change (Non-GAAP)
|
3
|
%
|
|
6
|
%
|
|
|
|
|
|
Full Year
Outlook
|
|
Q3 2020
Outlook
|
|
Q4 2020
Outlook
|
|
Projected Total
Revenue Change at Midpoint (GAAP)
|
3
|
%
|
|
6
|
%
|
|
6
|
%
|
|
Less: Estimated
Foreign Currency Impact
|
(6)
|
%
|
|
(6)
|
%
|
|
(5)
|
%
|
|
Projected Organic
Revenue Change (Non-GAAP)
|
9
|
%
|
|
12
|
%
|
|
11
|
%
|
|
|
___________________
|
|
(1)
|
We believe organic
revenue growth (non-GAAP) provides management and investors with
useful supplemental information
regarding our ongoing revenue performance and trends by presenting
revenue growth excluding the impact of fluctuations in
foreign exchange rates.
|
|
FMC
CORPORATION
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited, in millions)
|
|
|
June 30,
2020
|
|
December 31,
2019
|
|
Cash and cash
equivalents
|
$
|
342.7
|
|
|
$
|
339.1
|
|
|
Trade receivables,
net of allowance of $24.8 in 2020 and $26.3 in 2019
|
2,342.4
|
|
|
2,231.2
|
|
|
Inventories
|
1,138.5
|
|
|
1,017.0
|
|
|
Prepaid and other
current assets
|
464.6
|
|
|
487.5
|
|
|
Total current
assets
|
$
|
4,288.2
|
|
|
$
|
4,074.8
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
733.8
|
|
|
758.0
|
|
|
Goodwill
|
1,460.7
|
|
|
1,467.5
|
|
|
Other intangibles,
net
|
2,603.9
|
|
|
2,629.0
|
|
|
Deferred income
taxes
|
249.6
|
|
|
257.4
|
|
|
Other long-term
assets
|
657.5
|
|
|
686.0
|
|
|
Total
assets
|
$
|
9,993.7
|
|
|
$
|
9,872.7
|
|
|
|
|
|
|
Short-term debt and
current portion of long-term debt
|
$
|
505.9
|
|
|
$
|
227.7
|
|
|
Accounts payable,
trade and other
|
842.2
|
|
|
900.1
|
|
|
Advanced payments
from customers
|
7.0
|
|
|
492.7
|
|
|
Accrued and other
liabilities
|
632.2
|
|
|
680.6
|
|
|
Accrued customer
rebates
|
489.5
|
|
|
280.6
|
|
|
Guarantees of vendor
financing
|
108.6
|
|
|
75.7
|
|
|
Accrued pensions and
other postretirement benefits, current
|
4.3
|
|
|
4.3
|
|
|
Income
taxes
|
93.2
|
|
|
62.2
|
|
|
Total current
liabilities
|
$
|
2,682.9
|
|
|
$
|
2,723.9
|
|
|
|
|
|
|
Long-term debt, less
current portion
|
$
|
3,027.5
|
|
|
$
|
3,031.1
|
|
|
Long-term
liabilities
|
1,432.4
|
|
|
1,556.3
|
|
|
Equity
|
2,850.9
|
|
|
2,561.4
|
|
|
Total liabilities
and equity
|
$
|
9,993.7
|
|
|
$
|
9,872.7
|
|
|
FMC
CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
(Unaudited, in millions)
|
|
|
Six Months Ended
June 30,
|
|
2020
|
|
2019
|
|
Cash provided
(required) by operating activities of continuing
operations
|
$
|
(48.4)
|
|
|
$
|
(216.8)
|
|
|
Cash provided
(required) by operating activities of discontinued
operations
|
(45.3)
|
|
|
(8.7)
|
|
|
Cash provided
(required) by investing activities of continuing
operations
|
(74.4)
|
|
|
(63.1)
|
|
|
Cash provided
(required) by investing activities of discontinued
operations
|
1.1
|
|
|
9.2
|
|
|
Cash provided
(required) by financing activities of continuing
operations
|
174.9
|
|
|
239.1
|
|
|
Cash provided
(required) by financing activities of discontinued
operations
|
—
|
|
|
(37.2)
|
|
|
Effect of exchange
rate changes on cash
|
(4.3)
|
|
|
(0.8)
|
|
|
Increase (decrease)
in cash and cash equivalents
|
$
|
3.6
|
|
|
$
|
(78.3)
|
|
|
Cash and cash
equivalents of continuing operations, beginning of
period
|
$
|
339.1
|
|
|
$
|
134.4
|
|
|
Cash and cash
equivalents of discontinued operations
|
—
|
|
|
27.3
|
|
|
Cash and cash
equivalents, beginning of period
|
$
|
339.1
|
|
|
$
|
161.7
|
|
|
Cash and cash
equivalents, end of period
|
$
|
342.7
|
|
|
$
|
83.4
|
|
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SOURCE FMC Corporation