Element Solutions Inc Increases Financial Guidance and Free Cash Flow Outlook
September 09 2020 - 7:00AM
Business Wire
- Experiencing greater than expected momentum in the automotive
industry and continued resilience in the electronics market
- Increasing third quarter 2020 adjusted EBITDA expectation to at
least $95 million
- Expect second half 2020 adjusted EBITDA in excess of $185
million
- Increasing free cash flow outlook to $200 million for the full
year 2020
Element Solutions Inc (NYSE:ESI) (“ESI” or the “Company”), a
global and diversified specialty chemicals company, today provided
an update to its 2020 financial guidance and free cash flow
outlook.
Executive Commentary
Chief Executive Officer Benjamin Gliklich said, “In our
end-markets most impacted by COVID-19, the recovery that began in
June has accelerated, and in our high-end electronics business, the
robust demand we saw in the first half of the year has continued.
This overall market strength has been amplified by our continued
execution on commercial and cost initiatives. Consequently, we are
increasing our adjusted EBITDA guidance and now expect to generate
at least $95 million of adjusted EBITDA in the third quarter
2020.”
Mr. Gliklich continued, “Based on current trends, we expect our
key end-markets to be relatively healthy in the fourth quarter as
well. Given the magnitude of the recovery we have seen to-date, we
anticipate some degree of normal seasonality in the back half of
the year. In that context, we expect second half 2020 adjusted
EBITDA to be in excess of $185 million. In addition, our improved
earnings outlook combined with the benefit from of our recent
successful bond refinancing has increased our expectation for free
cash flow for the full year 2020 from $185 million to $200 million.
I am very proud of our team’s work which has positioned the Company
well to capitalize on this recovery. We said early on in this
pandemic that we would emerge stronger, and the evidence of this is
mounting.”
About Element Solutions
Element Solutions Inc is a leading global specialty chemicals
company whose businesses supply a broad range of solutions that
enhance the performance of products people use every day. Developed
in multi-step technological processes, the innovative solutions of
the Company's businesses enable customers' manufacturing processes
in several key industries, including electronic circuitry,
semiconductor, communications infrastructure, automotive systems,
industrial surface finishing, consumer packaging and offshore
energy.
More information about the Company is available at
www.elementsolutionsinc.com.
Non-GAAP Financial
Measures
Adjusted EBITDA: Adjusted
EBITDA is defined as EBITDA (earnings before interest, provision
for income taxes, depreciation and amortization), excluding the
impact of additional items included in GAAP earnings which the
Company believes are not representative or indicative of its
ongoing business or are considered to be associated with its
capital structure.
Free cash flow: Free cash
flow is defined as net cash flows from operating activities less
net capital expenditures. Net capital expenditures include capital
expenditures less proceeds from the disposal of property, plant and
equipment.
The Company does not provide a reconciliation of adjusted EBITDA
guidance for the third quarter and second half of 2020 to GAAP due
to the inherent difficulty in forecasting and quantifying certain
amounts that are necessary for such reconciliation.
Forward-Looking
Statements
This release is intended to qualify for the safe harbor from
liability established by the Private Securities Litigation Reform
Act of 1995 as it contains "forward-looking statements" within the
meaning of the federal securities laws. These statements will often
contain words such as "expect," "anticipate," "project," "will,"
"should," "believe," "intend," "plan," "assume," "estimate,"
"predict," "seek," "continue," "outlook," "may," "might," "aim,"
"can have," "likely," "potential" "target," "hope," "goal,"
"priority," "guidance" or "confident" and variations of such words
and similar expressions and include, but are not limited to,
statements, beliefs, projections and expectations regarding
continued execution on commercial and cost initiatives; adjusted
EBITDA guidance for the third quarter of 2020; key end-markets
trends in the fourth quarter of 2020; normal seasonality in the
back of 2020; second half 2020 adjusted EBITDA outlook; full year
2020 free cash flow outlook and expectations; and the Company’s
position to capitalize on the recovery. These projections and
statements are based on management's estimates, assumptions or
expectations with respect to financial performance and future
events, and are believed to be reasonable, though are inherently
uncertain and difficult to predict. Such projections and statements
are based on the assessment of information available to management
as of the current date, and management does not undertake any
obligations to provide any further updates. Actual results could
differ materially from those expressed or implied in the
forward-looking statements if one or more of the underlying
estimates, assumptions or expectations prove to be inaccurate or
are unrealized. Important factors that could cause actual results
to differ materially from those suggested by the forward-looking
statements include, but are not limited to, the duration and spread
of the coronavirus (COVID-19) pandemic; new information concerning
its transmission and severity; actions taken or that might be taken
by governments, businesses or individuals to contain or reduce its
repercussions and mitigate its economic implications; evolving
macroeconomic factors, including general economic uncertainty,
unemployment rates, and recessionary pressures; decreased consumer
spending levels; reduction or changes in customer demand for the
Company's products and services; the Company's ability to
manufacture, sell and provide its products and services, including
as a result of travel restrictions, closed borders, operating
restrictions imposed on its facilities or reduced ability of its
employees to continue to work efficiently; increased operating
costs (whether as a results of changes to the Company's supply
chain or increases in employee costs or otherwise); collectability
of customer accounts; additional and prolonged devaluation of other
countries' currencies relative to the dollar; the general impact of
the pandemic on the Company's customers, employees, suppliers,
vendors and other stakeholders; the Company's ability to realize
the expected benefits of its cost containment and cost savings
measures; and the impact of acquisitions, divestitures,
restructurings, refinancings, impairments and other unusual items,
including the Company's ability to raise and/or retire new debt
and/or equity and to integrate and obtain the anticipated benefits,
results and synergies from these items or other related strategic
initiatives. Additional information concerning these and other
factors that could cause actual results to vary is, or will be,
included in the periodic and other reports filed by Element
Solutions with the Securities and Exchange Commission. Element
Solutions undertakes no obligation to update any forward-looking
statements, whether as a result of new information, future events
or otherwise.
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version on businesswire.com: https://www.businesswire.com/news/home/20200909005271/en/
Investor Relations Contact: Yash Nehete Associate Director,
Corporate Development & IR Element Solutions Inc
1-561-406-8465
Media Contact: Liz Cohen Managing Director Kekst CNC
1-212-521-4845
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