CHARLOTTE, N.C., Feb. 2, 2021 /PRNewswire/ -- Albemarle
Corporation (NYSE: ALB), a leader in the global specialty chemicals
industry, today announced preliminary results for the fourth
quarter ended December 31, 2020.
Fourth-Quarter 2020 Highlights
(Unless otherwise
stated, all percent changes are based on year-over-year
comparisons)
- Net sales of between $870 million
and $880 million, down 11% to 12%,
but above prior outlook
- Net income in the range of $77
million to $87 million, down
3% to 15%; $0.73 to $0.81 per diluted share
- Adjusted diluted EPS of between $1.11 and $1.19,
excluding an after-tax $40 million
mark-to-market actuary loss due to lower discount rates
- Adjusted EBITDA of between $213
million and $223 million, down
24% to 28%, but above prior outlook
The information in this release is preliminary and unaudited and
reflects our estimated financial results for the three months and
year ended December 31, 2020. In
preparing this information, management made a number of complex and
subjective judgments and estimates about the appropriateness of
certain reported amounts and disclosures. Our actual financial
results for the three months and year ended December 31, 2020, have not yet been finalized by
management and remain subject to the completion of management's
final review and our other closing procedures, as well as the
completion of the audit of our annual financial statements. These
preliminary estimated results do not represent a comprehensive
statement of all financial results for the three months and year
ended December 31, 2020. We are
required to consider all available information through the
finalization of our financial statements and their possible impact
on our financial conditions and results of operations for the
period, including the impact of such information on the complex
judgments and estimates referred to above. The preliminary
estimates above are based solely on information available to us as
of the date of this release, and subsequent information or events
may lead to material differences between these preliminary
estimated financial results and the results of operations described
in our subsequent SEC reports.
Outlook
Albemarle anticipates that its
full-year 2021 performance will improve relative to 2020 with
continued economic recovery following the COVID-19 pandemic. We
expect our Lithium business to experience lower pricing, offset by
higher volumes. Higher Lithium costs related to project start-ups
are expected to be partially offset by efficiency improvements.
Bromine results are expected to be up on higher volumes with
on-going savings initiatives expected to offset inflation. Our
Catalysts business continues to recover from the very low levels
seen in full-year 2020 but is expected to remain well below
pre-COVID levels assuming a slow recovery of refining capacity
utilization and margins. Finally, capital expenditures are expected
to be approximately flat year-over-year, but above previous
expectations, as we accelerate Lithium growth with additional
conversion capacity projects.
Fourth Quarter and Full-Year Results
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
|
|
December
31,
|
In millions,
except per share amounts
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net sales
|
$870 -
$880
|
|
$
|
992.6
|
|
|
$3,120 -
$3,130
|
|
$
|
3,589.4
|
|
Net income
attributable to Albemarle Corporation(a)
|
$77 - $87
|
|
$
|
90.4
|
|
|
$368 -
$378
|
|
$
|
533.2
|
|
Adjusted
EBITDA(b)
|
$213 -
$223
|
|
$
|
294.7
|
|
|
$811 -
$821
|
|
$
|
1,036.8
|
|
Diluted earnings per
share
|
$0.73 -
$0.81
|
|
$
|
0.85
|
|
|
$3.46 -
$3.54
|
|
$
|
5.02
|
|
Adjusted diluted
earnings per share(b)
|
$1.11 -
$1.19
|
|
$
|
1.73
|
|
|
$4.06 -
$4.14
|
|
$
|
6.04
|
|
|
|
(a)
|
Fourth-quarter and
full-year 2020 net income includes an after-tax $40 million pension
mark-to-market actuary loss due to lower discount rates;
fourth-quarter and full-year 2019 net income includes an expense
$64.8 million resulting from estimated stamp duties levied on
assets purchased related to the Wodgina Project.
|
(b)
|
See Non-GAAP
Reconciliations for further details.
|
Consolidated Summary of Segment Results
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
|
|
December
31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net
sales:
|
|
|
|
|
|
|
|
Lithium
|
$356 -
$359
|
|
$
|
411.1
|
|
|
$1,142 -
$1,145
|
|
$
|
1,358.2
|
|
Bromine
Specialties
|
$260 -
$263
|
|
243.5
|
|
|
$962 -
$965
|
|
1,004.2
|
|
Catalysts
|
$194 -
$196
|
|
282.5
|
|
|
$796 -
$798
|
|
1,061.8
|
|
All Other
|
$60 - $62
|
|
55.4
|
|
|
$220 -
$222
|
|
165.2
|
|
Total net
sales
|
$870 -
$880
|
|
$
|
992.6
|
|
|
$3,120 -
$3,130
|
|
$
|
3,589.4
|
|
See accompanying Non-GAAP Reconciliations below.
Additional Information
It should be noted that adjusted net income attributable to
Albemarle Corporation, adjusted diluted earnings per share and
adjusted EBITDA are financial measures that are not required by, or
presented in accordance with, accounting principles generally
accepted in the United States, or
GAAP. These non-GAAP measures should not be considered as
alternatives to Net income attributable to Albemarle Corporation
("earnings"). These measures are presented here to provide
additional useful measurements to review our operations, provide
transparency to investors and enable period-to-period comparability
of financial performance. The Company's chief operating decision
maker uses these measures to assess the ongoing performance of the
Company and its segments, as well as for business and enterprise
planning purposes.
A description of other non-GAAP financial measures that we use
to evaluate our operations and financial performance, and
reconciliation of these non-GAAP financial measures to the most
directly comparable financial measures calculated and reported in
accordance with GAAP can be found on the following pages of this
press release, which is also is available on Albemarle's website at
https://investors.albemarle.com. The Company does not provide a
reconciliation of forward-looking non-GAAP financial measures to
the most directly comparable financial measures calculated and
reported in accordance with GAAP, as the Company is unable to
estimate significant non-recurring or unusual items without
unreasonable effort. The amounts and timing of these items are
uncertain and could be material to the Company's results calculated
in accordance with GAAP.
Earnings Release
Albemarle will release its
fourth-quarter 2020 earnings after the NYSE closes on Wednesday, Feb. 17, 2021. The company will
hold a conference call to discuss fourth-quarter 2020 results on
Thursday, Feb. 18, at 9:00 a.m. ET. This call will be webcast and can
be accessed through Albemarle Corporation's website at
http://investors.albemarle.com, via the webcast link below or by
phone at the following number:
US Toll
free:
|
+1 844 347
1034
|
International
direct:
|
+1 209 905
5910
|
Passcode:
|
6989169
|
Webcast:
|
Q4 Webcast
Link
|
Due to the COVID-19 pandemic, teleconference providers globally
are experiencing increases in conference call volume. To avoid
registration wait times, participants are encouraged to use the
webcast link as the primary listening source. If a caller is
anticipating asking a question, please dial in 15 minutes before
the start of the call to be placed in the queue early.
An online replay of this call will be available on Albemarle
Corporation's website (for 12 months) and by phone at the following
number (for 7 days):
US Toll
free:
|
+1 855 859
2056
|
International
direct:
|
+1 404 537
3406
|
Passcode:
|
6989169
|
About Albemarle
Albemarle Corporation (NYSE: ALB), headquartered in Charlotte, N.C., is a global specialty
chemicals company with leading positions in lithium, bromine and
refining catalysts. We think beyond business-as-usual to power the
potential of companies in many of the world's largest and most
critical industries, such as energy, electronics, and
transportation. We actively pursue a sustainable approach to
managing our diverse global footprint of world-class resources. In
conjunction with our highly experienced and talented global teams,
our deep-seated values, and our collaborative customer
relationships, we create value-added and performance-based
solutions that enable a safer and more sustainable future.
We regularly post information to www.albemarle.com, including
notification of events, news, financial performance, investor
presentations and webcasts, non-GAAP reconciliations, SEC filings
and other information regarding our company, its businesses and the
markets it serves.
Forward-Looking Statements
Some of the information presented in this press release,
including, without limitation, information related to product
development, production capacity, committed volumes, market trends,
pricing, expected growth, earnings and demand for our products,
input costs, surcharges, tax rates, stock repurchases, dividends,
cash flow generation, costs and cost synergies, capital projects,
economic trends, outlook and all other information relating to
matters that are not historical facts may constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Actual results could
differ materially from the views expressed. Factors that could
cause actual results to differ materially from the outlook
expressed or implied in any forward-looking statement include,
without limitation: changes in economic and business conditions;
changes in financial and operating performance of our major
customers and industries and markets served by us; the timing of
orders received from customers; the gain or loss of significant
customers; competition from other manufacturers; changes in the
demand for our products or the end-user markets in which our
products are sold; limitations or prohibitions on the manufacture
and sale of our products; availability of raw materials; increases
in the cost of raw materials and energy, and our ability to pass
through such increases to our customers; changes in our markets in
general; fluctuations in foreign currencies; changes in laws and
government regulation impacting our operations or our products; the
occurrence of regulatory actions, proceedings, claims or
litigation; the occurrence of cyber-security breaches, terrorist
attacks, industrial accidents, natural disasters or climate change;
the inability to maintain current levels of product or premises
liability insurance or the denial of such coverage; political
unrest affecting the global economy, including adverse effects from
terrorism or hostilities; political instability affecting our
manufacturing operations or joint ventures; changes in accounting
standards; the inability to achieve results from our global
manufacturing cost reduction initiatives as well as our ongoing
continuous improvement and rationalization programs; changes in the
jurisdictional mix of our earnings and changes in tax laws and
rates; changes in monetary policies, inflation or interest rates
that may impact our ability to raise capital or increase our cost
of funds, impact the performance of our pension fund investments
and increase our pension expense and funding obligations;
volatility and uncertainties in the debt and equity markets;
technology or intellectual property infringement, including
cyber-security breaches, and other innovation risks; decisions we
may make in the future; the ability to successfully execute,
operate and integrate acquisitions and divestitures; uncertainties
as to the duration and impact of the coronavirus (COVID-19)
pandemic; and the other factors detailed from time to time in the
reports we file with the SEC, including those described under "Risk
Factors" in our Annual Report on Form 10-K and our Quarterly
Reports on Form 10-Q. These forward-looking statements speak only
as of the date of this press release. We assume no obligation to
provide any revisions to any forward-looking statements should
circumstances change, except as otherwise required by securities
and other applicable laws.
ALBEMARLE
CORPORATION AND SUBSIDIARIES
Non-GAAP
Reconciliations
(Unaudited)
See below for a reconciliation of adjusted net income
attributable to Albemarle Corporation to Net income attributable to
Albemarle Corporation ("earnings"), the most directly comparable
financial measure calculated and reported in accordance with GAAP.
Adjusted earnings is defined as earnings before the non-recurring,
other unusual and non-operating pension and other postretirement
benefit ("OPEB") items as listed below.
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
|
|
December
31,
|
In millions, except
per share amounts
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net income
attributable to Albemarle Corporation
|
$77 - $87
|
|
$
|
90.4
|
|
|
$368 -
$378
|
|
$
|
533.2
|
|
Add back:
|
|
|
|
|
|
|
|
Non-operating pension
and OPEB items (net of tax)
|
37.6
|
|
|
20.5
|
|
|
30.7
|
|
|
18.6
|
|
Non-recurring and
other unusual items (net of tax)
|
3.2
|
|
|
73.4
|
|
|
32.9
|
|
|
90.7
|
|
Adjusted net income
attributable to Albemarle Corporation
|
$118 -
$128
|
|
$
|
184.3
|
|
|
$432 -
$442
|
|
$
|
642.5
|
|
|
|
|
|
|
|
|
|
Adjusted diluted
earnings per share
|
$1.11 -
$1.19
|
|
$
|
1.73
|
|
|
$4.06 -
$4.14
|
|
$
|
6.04
|
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding – diluted
|
107,312
|
|
|
106,314
|
|
|
106,808
|
|
|
106,321
|
|
See below for a reconciliation of adjusted EBITDA, the non-GAAP
financial measure, to Net income attributable to Albemarle
Corporation, the most directly comparable financial measure
calculated and reported in accordance with GAAP (in millions).
Adjusted EBITDA is defined as earnings before interest, taxes,
depreciation and amortization, as adjusted on a consistent basis
for certain non-recurring or unusual items in a balanced manner. A
description of the non-recurring and other unusual items can be
found below the reconciliation table.
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
|
|
December
31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net income
attributable to Albemarle Corporation
|
$77 - $87
|
|
$
|
90.4
|
|
|
$368 -
$378
|
|
$
|
533.2
|
|
Depreciation and
amortization
|
61.8
|
|
|
56.8
|
|
|
232.0
|
|
|
213.5
|
|
Non-recurring and
other unusual items:
|
|
|
|
|
|
|
|
Restructuring and
other(a)
|
8.6
|
|
|
0.6
|
|
|
19.6
|
|
|
5.9
|
|
Acquisition and
integration related costs(b)
|
2.9
|
|
|
6.3
|
|
|
17.3
|
|
|
20.7
|
|
Gain on sale of
property(c)
|
—
|
|
|
(3.3)
|
|
|
—
|
|
|
(14.4)
|
|
Stamp
duty(d)
|
—
|
|
|
64.8
|
|
|
—
|
|
|
64.8
|
|
Windfield tax
settlement(e)
|
—
|
|
|
17.3
|
|
|
—
|
|
|
17.3
|
|
Other(f)
|
4.8
|
|
|
15.7
|
|
|
5.9
|
|
|
23.0
|
|
Interest and financing
expenses(g)
|
19.2
|
|
|
22.4
|
|
|
73.1
|
|
|
57.7
|
|
Income tax (benefit)
expense(h)
|
(10.1)
|
|
|
(5.1)
|
|
|
54.4
|
|
|
88.2
|
|
Non-operating pension
and OPEB items(i)
|
49.4
|
|
|
28.8
|
|
|
40.7
|
|
|
27.0
|
|
Adjusted
EBITDA
|
$213 -
$223
|
|
$
|
294.7
|
|
|
$811 -
$821
|
|
$
|
1,036.8
|
|
|
|
(a)
|
In 2020, we expect to
record severance expenses as part of business reorganization plans,
impacting each of our businesses and Corporate, primarily in the
U.S., Belgium, Germany and with our Jordanian joint venture
partner. During the three months and year ended December 31, 2019,
severance expenses were recorded as part of a business
reorganization plan primarily in Catalysts, Lithium and Corporate.
The balance of unpaid severance is primarily expected to be paid
through 2021.
|
|
|
(b)
|
Costs related to the
acquisition, integration and potential divestitures for various
significant projects.
|
|
|
(c)
|
Gain recorded in the
three months and year ended December 31, 2019 related to the
release of liabilities as part of the sale of a property. In
addition, during the year ended December 31, 2019 we recorded a
gain related to the sale of land in Pasadena, Texas not used as
part of our operations.
|
|
|
(d)
|
Loss resulting from
stamp duties levied on assets purchased related to the Wodgina
Project recorded during the three months and year ended December
31, 2019.
|
|
|
(e)
|
Representing our 49%
share of a tax settlement between our Windfield joint venture and
an Australian taxing authority recorded during the three months and
year ended December 31, 2019. This adjustment is offset by a
discrete tax benefit from a competent tax authority agreement. See
below for a discussion of discrete tax items.
|
|
|
(f)
|
Other adjustments for
2020 primarily relate to:
- Gain related to the
sale of our ownership percentage in the Saudi Organometallic
Chemicals Company LLC ("SOCC") joint venture
- Losses resulting
from the adjustment of indemnifications related to previously
disposed businesses
- Net expense
primarily relating to the increase of environmental reserves at
non-operating businesses we have previously divested
- Net gain primarily
relating to the sale of intangible assets in our Bromine business
and property in Germany not used as part of our
operation
- Net gain resulting
from the settlement of legal matters related to a business sold or
a site in the process of being sold
- Shortfall
contributions for our multiemployer plan financial improvement
plan
- Expense related to
a legal matter as part of a prior acquisition in our Lithium
business
|
|
Other adjustments for
2019 primarily relate to:
- Net loss primarily
resulting from the adjustment of indemnifications and other
liabilities related to previously disposed businesses or purchase
accounting
- Asset retirement
obligation charges related to the update of an estimate at a site
formerly owned by Albemarle
- Non-operating
pension costs from our 50% interest in Jordan Bromine Company
Limited ("JBC")
- Shortfall
contributions for our multiemployer pension plan financial
improvement plan
- Settlement of
terminated agreements, primarily in the Catalysts
segment
- Settlement of an
ongoing audit in the Lithium segment
|
(g)
|
Included in Interest
and financing expenses for the three months and year ended December
31, 2019 is a loss on early extinguishment of debt of $4.8 million
related to tender premiums, fees, unamortized discounts and
unamortized deferred financing costs from the redemption of the
4.50% senior notes due in 2020.
|
|
|
(h)
|
Included in Income
tax (benefit) expense for the three months and year ended December
31, 2020 are discrete net tax benefits of $13.9 million and $4.3
million, respectively. The net benefit for the three months and
year are primarily related to benefits for uncertain tax positions
for statute of limitation expirations, excess tax benefits from
stock-based compensation arrangements, and return to accrual
adjustments
.
|
|
Included in Income
tax (benefit) expense for the three months and year ended December
31, 2019 are discrete net tax benefits of $29.8 million and $27.4
million, respectively. This net benefit is primarily related to
benefits for uncertain tax positions primarily related to seeking
treaty relief from the competent authority to prevent double
taxation, and state rate changes.
|
|
|
(i)
|
Non-operating pension
and OPEB items, consist of mark-to-market actuarial gains/losses,
settlements/curtailments, interest cost and expected return on
assets. We believe that these components of pension cost are mainly
driven by market performance, and we manage these separately from
the operational performance of our businesses. In accordance with
GAAP, these non-operating pension and OPEB items are included in
Other (expenses) income, net. During the three months and year
ended December 31, 2020, we expect to record a pre-tax
mark-to-market actuarial loss of $52.3 million due to lower
discount rates. During the three months and year ended December 31,
2019, we recorded a pre-tax mark-to-market actuarial loss of $29.3
million due to lower discount rates.
|
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SOURCE Albemarle Corporation