STAMFORD, Conn., Jan. 18, 2021 /PRNewswire/ --
Summary:
- Released selected preliminary unaudited financial results for
the quarter ending December 31,
2020:
-
- Revenue expected to be $783
million(1)
- Adjusted EBITDA expected to be $200 to $204
million(1)(2)
- Termination of the TTI transaction agreement following
rejection by the U.K. Competition and Markets Authority ("CMA") of
a remedy proposal and opening of a Phase 2 investigation
- $300 million discretionary debt
repayment to be made by the end of the quarter from cash on the
balance sheet originally intended for the TTI acquisition
-
- Total of $500 million in
discretionary debt repayments including $200
million repayment made in December
2020
- Increasing annualized dividend to $0.32 per share from $0.28 per share, equivalent to a 14
percent increase, effective when the normal first quarter 2021
dividend is declared
- Well-positioned to continue participation in the recovery and
demonstrate the full capabilities of Tronox's vertically integrated
portfolio
(1)
|
Note: The
information is preliminary, based upon information available as of
today and is subject to change and finalization following the
completion of management's disclosure controls
process.
|
(2)
|
Refer to the
tables at the end of this press release for a reconciliation to net
income. Investors are cautioned that net income is not finalized
and is subject to change, primarily due to the finalization of the
income tax provision which would not impact Adjusted EBITDA. For
this reason, earnings per share and adjusted earnings per share are
not available at this time.
|
Tronox Holdings plc (NYSE:TROX) ("Tronox" or the "Company"), a
leading integrated manufacturer of titanium dioxide pigment, today
released selected preliminary unaudited financial results for the
quarter ending December 31, 2020, and
provided an update on its business, including the decision to
terminate its agreement with Eramet S.A. ("Eramet") to acquire the
TiZir Titanium and Iron ("TTI") business following the CMA's
rejection of a remedy proposal and opening of a Phase 2
investigation.
"We are disappointed with the rejection of our remedy proposal
and respectfully disagree with the view taken by the CMA," stated
Jean-François Turgeon, co-Chief Executive Officer; Executive Vice
President and Chief Operating Officer. "While TTI was an
asset that would have furthered our vertical integration strategy,
the decision to terminate the agreement reflects the fact that
under the CMA's rules, we could not have obtained regulatory
approval prior to the termination date under the agreement with
Eramet. We are currently building significant momentum in the
market and are already well-positioned to execute on our strategic
plans with our existing portfolio today. We will continue to
leverage our vertical integration and sourcing strategy to supply
our pigment feedstock requirements and remain focused on our
efforts to bring the Jazan smelter online." Upon signing of
the agreement to acquire TTI in May
2020, $18 million of funds
were placed into escrow which, due to the termination of the
agreement, will now be released to Eramet as a break fee.
John D. Romano, co-Chief
Executive Officer; Executive Vice President, Chief Commercial and
Strategy Officer, commented, "We remain confident that our vertical
integration strategy will continue to provide a competitive
advantage, allowing Tronox to deliver reliable, safe, quality,
low-cost, sustainable tons to our customers while outperforming our
TiO2 peers. The TiO2 business continues
to benefit from the global industry recovery in 2021. With
the current momentum, we are very optimistic about the short-,
medium-, and long-term potential for both TiO2 and
Tronox as the leading integrated supplier in the industry.'
"Consistent with our previously stated capital allocation
priorities, we will be making a $300
million discretionary debt repayment before the end of the
quarter from cash on the balance sheet originally intended for the
TTI acquisition. Together, with a $200
million repayment made in December
2020, Tronox will have repaid $500
million of indebtedness by the end of the first quarter
bringing us closer to our total gross debt target of $2.5 billion.'
"Additionally, the Board intends to increase our annualized
dividend to $0.32 per share from
$0.28 per share, which equates to a
14 percent increase effective with the regular first quarter
2021 dividend. This reflects the confidence we have in the
trajectory of the recovery in the sector and in our differentiated
business model and is consistent with our previously stated goal to
increase dividends as business conditions permit."
Mr. Turgeon added, "Due to the positive dynamics in the market,
we delivered an even stronger fourth quarter than we previously
contemplated, with sales exceeding expectations and Adjusted EBITDA
coming in above our previously issued guidance. We expect
fourth quarter 2020 revenue of $783
million and Adjusted EBITDA of $200 to $204
million, our strongest Adjusted EBITDA performance since we
closed the Cristal acquisition. This performance was driven
by a continued demand recovery in the fourth quarter as well as
delivery on our synergy targets from the Cristal transaction.
Fourth quarter TiO2 volumes increased 8 percent
sequentially and year over year while pricing remained level.
Zircon volumes were the strongest of the year, increasing 70
percent sequentially and 48 percent year over year. We will
report our full financial results as planned in
mid-February." The selected preliminary unaudited financial
results for the quarter ending December 31,
2020 are preliminary, based upon information available as of
today and are subject to change and finalization based on
completion of all year-end close processes.
Mr. Romano concluded, "We remain very confident in our ability
to deliver industry leading results and are well-positioned to
continue our participation in the recovery and demonstrate the full
capabilities of our vertically integrated portfolio."
About Tronox
Tronox Holdings plc is one of the world's leading producers of
high-quality titanium products, including titanium dioxide pigment,
specialty-grade titanium dioxide products and high-purity titanium
chemicals; and zircon. We mine titanium-bearing mineral sands and
operate upgrading facilities that produce high-grade titanium
feedstock materials, pig iron and other minerals. With nearly 7,000
employees across six continents, our rich diversity, unmatched
vertical integration model, and unparalleled operational and
technical expertise across the value chain,
position Tronox as the preeminent titanium dioxide
producer in the world. For more information about how our products
add brightness and durability to paints, plastics, paper and other
everyday products, visit Tronox.com.
Forward Looking Statements
Statements in this release that are not historical are
forward-looking statements within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995. These forward-looking
statements, which are subject to known and unknown risks,
uncertainties and assumptions about us, may include projections of
our future financial performance including fourth quarter 2020
results, the effects of the COVID-19 pandemic and anticipated
synergies based on our growth and other strategies and anticipated
trends in our business. These statements are only predictions based
on our current expectations and projections about future events.
There are important factors that could cause our actual results,
level of activity, performance, actual synergies, or achievements
to differ materially from the results, level of activity,
performance, anticipated synergies or achievements expressed or
implied by the forward-looking statements. Significant risks and
uncertainties may relate to, but are not limited to business and
market disruptions related to the COVID-19 pandemic, market
conditions and price volatility for titanium dioxide, zircon and
other feedstock materials, as well as global and regional economic
downturns, including as a result of the COVID-19 pandemic, that
adversely affect the demand for our end-use products; disruptions
in production at our mining and manufacturing facilities; and other
financial, economic, competitive, environmental, political, legal
and regulatory factors. These and other risk factors are discussed
in the Company's filings with the Securities and Exchange
Commission (SEC). Expected fourth quarter 2020 results are subject
to change and finalization based on completion of all year-end
close processes.
Moreover, we operate in a very competitive and rapidly changing
environment. New risks and uncertainties emerge from time to time,
and it is not possible for our management to predict all risks and
uncertainties, nor can management assess the impact of all factors
on our business or the extent to which any factor, or combination
of factors, may cause actual results to differ materially from
those contained in any forward-looking statements. Although we
believe the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results,
level of activity, performance, synergies or achievements. Neither
we nor any other person assumes responsibility for the accuracy or
completeness of any of these forward-looking statements. You should
not rely upon forward-looking statements as predictions of future
events. Unless otherwise required by applicable laws, we undertake
no obligation to update or revise any forward-looking statements,
whether because of new information or future
developments.
Non-GAAP Financial Measures
Some of the information included in this release is derived from
the Company's consolidated financial information but is not
presented in Company's financial statements prepared in accordance
with accounting principles generally accepted in the United States of America (GAAP). Certain
of these data are considered "non-GAAP financial measures" under
SEC rules. These non-GAAP financial measures supplement our GAAP
disclosures and should not be considered an alternative to the GAAP
measure. Reconciliations to the most directly comparable GAAP
financial measures and management's rationale for the use of the
non-GAAP financial measures can be found in the schedules to this
release.
Media Contact: Melissa Zona
+1.636.751.4057
Investor Contact: Jennifer
Guenther
+1.646.960.6598
TRONOX HOLDINGS
PLC
|
RECONCILIATION OF
PRELIMINARY NET INCOME (LOSS) TO EBITDA AND ADJUSTED EBITDA
(NON-U.S. GAAP)
|
(UNAUDITED)
|
(Millions of U.S.
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
December 31, 2020
|
December 31,
2020
|
|
|
|
|
|
Low
End
|
High
End
|
|
Low
End
|
High
End
|
|
|
|
|
|
|
Preliminary net
income from continuing operations (U.S. GAAP)
|
$
57
|
$
61
|
|
$
995
|
$
999
|
Interest
expense
|
49
|
49
|
|
189
|
189
|
Interest
income
|
(2)
|
(2)
|
|
(8)
|
(8)
|
Income tax provision
(benefit)
|
(4)
|
(4)
|
|
(880)
|
(880)
|
Depreciation,
depletion and amortization expense
|
84
|
84
|
|
303
|
303
|
EBITDA (non-U.S.
GAAP)
|
184
|
188
|
|
599
|
603
|
Share-based
compensation (a)
|
12
|
12
|
|
31
|
31
|
Transaction costs
(b)
|
5
|
5
|
|
14
|
14
|
Restructuring
(c)
|
-
|
-
|
|
3
|
3
|
Integration costs
(d)
|
-
|
-
|
|
10
|
10
|
Loss on
extinguishment of debt (e)
|
2
|
2
|
|
2
|
2
|
Foreign currency
remeasurement (f)
|
4
|
4
|
|
(6)
|
(6)
|
Pension curtailment
gain - net (g)
|
(2)
|
(2)
|
|
(2)
|
(2)
|
Other items
(h)
|
(5)
|
(5)
|
|
12
|
12
|
Adjusted EBITDA
(non-U.S. GAAP)
|
$
200
|
$
204
|
|
$
663
|
$
667
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Represents
non-cash share-based compensation.
|
(b) Represents
transaction costs associated with the TTI Transaction, which were
recorded in "Selling, general and administrative expenses" in the
unaudited Condensed Consolidated Statements of
Operations.
|
(c) Represents
amounts for employee-related costs, including severance.
|
(d) Represents
integration costs associated with the Cristal acquisition after the
acquisition which were recorded in "Selling, general and
administrative expenses" in the unaudited Condensed Consolidated
Statements of Operations.
|
(e) Represents the
loss in connection with the voluntary prepayment of our Term Loan
Facility.
|
(f) Represents
realized and unrealized gains and losses associated with foreign
currency remeasurement related to third-party and intercompany
receivables and liabilities denominated in a currency other than
the functional currency of the entity holding them, which are
included in "Other income (expense), net" in the unaudited
Condensed Consolidated Statements of Operations.
|
(g) Represents a
curtailment gain due to the freezing of plan benefits partially
offset by pension settlements.
|
(h) Includes noncash
pension and postretirement costs, asset write-offs, accretion
expense and other items included in "Selling general and
administrative expenses", "Cost of goods sold" and "Other income
(expense), net" in the unaudited Condensed Consolidated Statements
of Operations.
|
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SOURCE Tronox Holdings plc