CHARLOTTE, N.C., May 5, 2021 /PRNewswire/ -- Albemarle Corporation (NYSE: ALB) today announced its results for the first quarter ended March 31, 2021.

Albemarle Corp. Logo. (PRNewsFoto/Albemarle Corporation)

First Quarter 2021 Highlights
(Unless otherwise stated, all percent changes are based on year-over-year comparisons)

  • Net income of $95.7 million, or $0.84 per diluted share; Adjusted diluted EPS of $1.10, an increase of 10%
  • Net sales of $829.3 million, an increase of 12%
  • Adjusted EBITDA of $230.1 million an increase of 17%
  • Full year 2021 guidance unchanged
  • Entered into a definitive agreement to sell the Fine Chemistry Services business to W. R. Grace & Co. for proceeds of approximately $570 million
  • Completed $1.5 billion public equity offering to accelerate profitable growth; reduced debt, providing financial flexibility to execute strategy
  • Signed the U.N. Global Compact, aligning our sustainability efforts with those of the international business community

"We were pleased with our performance this quarter, achieving a 17% year-over-year increase in adjusted EBITDA, driven by strong sales from our Lithium and Bromine businesses," said Albemarle CEO Kent Masters. "We successfully and safely managed through the impact of the U.S. Gulf Coast winter storm on our Bromine and Catalysts businesses. As we look to expand our earnings potential, we continue to focus on execution of our growth strategy and are in the final stages of two lithium projects which will double our conversion capacity to approximately 175,000 metric tons. Additionally, we expect to start approving Wave 3 expansion projects during the second quarter."

Outlook

Albemarle continues to expect its full year 2021 operating performance to improve modestly relative to full year 2020, assuming continued recovery from the global economic downturn. While the total company guidance has not changed, from a GBU perspective, the outlook for our Lithium business has improved and for our Catalysts business our expectations are lower, while the outlook for our Bromine business is unchanged.


FY 2021 Guidance

Net sales

$3.2 - $3.3 billion

Adjusted EBITDA

$810 - $860 million

Adjusted EBITDA Margin

25% - 26%

Adjusted Diluted EPS

$3.25 - $3.65

Net Cash from Operations

$475 - $575 million

Capital Expenditures

$850 - $950 million

COVID-19 Response

Albemarle's cross-functional Global Response Team continues to meet regularly to address employee health and safety and operational challenges. Our priority is always the health and well-being of our employees, customers, and communities. Our focus has shifted from managing an immediate global crisis to building in the flexibility needed to adjust for regional differences and changing conditions.    

First Quarter Results

In millions, except per share amounts

Q1 2021


Q1 2020


$ Change


% Change

Net sales

$

829.3



$

738.8



$

90.4



12.2

%

Net income attributable to Albemarle Corporation

$

95.7



$

107.2



$

(11.5)



(10.8)

%

Adjusted EBITDA(a)

$

230.1



$

196.4



$

33.7



17.2

%

Diluted earnings per share

$

0.84



$

1.01



$

(0.17)



(16.8)

%

   Non-operating pension and OPEB items(a)

(0.04)



(0.02)






   Non-recurring and other unusual items(a)

0.29



0.01






Adjusted diluted earnings per share(b)

$

1.10



$

1.00



$

0.10



10.0

%



(a)

See Non-GAAP Reconciliations for further details.

(b)

Totals may not add due to rounding.

Net sales of $829.3 million increased by $90.4 million compared to the prior year quarter, primarily driven by increased sales across all three core business segments as discussed below.

Adjusted EBITDA of $230.1 million increased by $33.7 million from the prior year quarter benefiting from several Lithium customers that accelerated orders under long-term agreements, as well as favorable volume and customer mix in our Bromine business, partially offset by the impact of the U.S. Gulf Coast winter storm to the Bromine and Catalysts businesses. Net income attributable to Albemarle of $95.7 million decreased by $11.5 million from the prior year primarily due to higher one-time interest and financing costs related to our recent equity offering and debt tender. 

The effective income tax rate for Q1 2021 was 17.9% compared to 16.0% in the same period in 2020. On an adjusted basis, the effective income tax rates were 17.5% and 16.7% for the first quarter of 2021 and 2020, respectively. The difference is largely due to discrete tax expense recorded in Q1 2021 for an out-of-period adjustment.

Business Segment Results

Lithium

In millions

Q1 2021


Q1 2020


$ Change


% Change

Net Sales

$

279.0



$

236.8



$

42.2



17.8

%

Adjusted EBITDA

$

106.4



$

78.6



$

27.8



35.4

%

Lithium net sales of $279.0 million increased $42.2 million primarily driven by higher volumes, as some customers accelerated orders under long-term agreements, offset by lower average pricing for carbonate and technical grade. Adjusted EBITDA of $106.4 million increased $27.8 million primarily due to increased net sales.  Strong Q1 2021 margins reflect sales of lower cost 2020 inventories.

Current Trends:  FY 2021 volumes are expected to be higher year-over-year due to North American plant restarts, productivity improvements, and tolling. Average realized pricing is expected to increase sequentially but remain flat compared to 2020. We expect higher costs related to project start-ups, partially offset by productivity improvements. 

Bromine Specialties

In millions

Q1 2021


Q1 2020


$ Change


% Change

Net Sales

$

280.4



$

231.6



$

48.9



21.1

%

Adjusted EBITDA

$

94.6



$

83.3



$

11.4



13.7

%

Bromine net sales of $280.4 million increased $48.9 million driven by demand for products across the portfolio and a favorable customer mix. Adjusted EBITDA of $94.6 million increased $11.4 million due to increased net sales and was partially offset by a $6.4 million impact from the U.S. Gulf Coast winter storm. Cost savings initiatives and pricing helped offset raw materials cost increases. 

Current Trends: We continue to expect FY 2021 results to be modestly higher than the previous year due to continued economic recovery and improvements in certain end markets, including electronics, and building and construction, along with on-going cost savings initiatives and pricing. The winter storm in the U.S. Gulf Coast during Q1 led to lost production at the Magnolia, Arkansas site, which is expected to impact sales and adjusted EBITDA in mid-2021.   

Catalysts

In millions

Q1 2021


Q1 2020


$ Change


% Change

Net Sales

$

220.2



$

207.2



$

13.0



6.3

%

Adjusted EBITDA

$

25.4



$

47.5



$

(22.0)



(46.4)

%

Catalysts net sales of $220.2 million increased $13.0 million owing to higher volumes compared to the previous year. Hydroprocessing Catalysts (HPC) volumes increased due to timing of shipments offset by lower Fluid Catalytic Cracking (FCC) volumes related to the impact of the winter storm on our customers' requirements. Adjusted EBITDA of $25.4 million declined $22.0 million as a result of a $26.2 million cost impact from the U.S. Gulf Coast winter storm on two of our Houston-based plants and lower prices, slightly offset by cost savings initiatives. First quarter 2020 results were overstated by $11.7 million due to incorrect cost of goods sold for inventory values which were corrected the following quarter.

Current Trends:  We expect 2021 adjusted EBITDA to be lower year-over-year due to the impact of the winter storm, FCC order delays, product mix, and the previously disclosed change in order patterns from a large North American customer.

All Other

In millions

Q1 2021


Q1 2020


$ Change


% Change

Net Sales

$

49.6



$

63.2



$

(13.6)



(21.5)

%

Adjusted EBITDA

$

21.5



$

22.8



$

(1.3)



(5.9)

%

Other operations represents our FCS business. FCS net sales of $49.6 million declined $13.6 million and adjusted EBITDA of $21.5 million declined $1.3 million. The FCS business tends to be contract driven and can vary quarter-to-quarter.

On February 25, 2021, we signed a definitive agreement to sell the FCS business to W. R. Grace & Co. for proceeds of approximately $570 million. The transaction is expected to close in the second quarter of 2021.

Balance Sheet and Liquidity

As of March 31, 2021, Albemarle had estimated liquidity of approximately $2.2 billion, including $569.9 million of cash and equivalents, the full $1.0 billion available under our revolver, $500.0 million remaining under our delayed draw term loan and $131.2 million on other available credit lines. Total debt was $2.0 billion, representing net debt to adjusted EBITDA of approximately 1.7 times. The recently completed $1.5 billion debt repayment supports our financial flexibility to accelerate growth and maintain an Investment Grade credit rating.

Cash Flow and Capital Deployment

Cash from operations for the three months ended March 31, 2021, of $157.9 million increased $2.9 million versus the prior year as higher revenues in each of our reportable segments more than offset working capital outflows in 2021. Capital expenditures of $179.7 million decreased by approximately $35.0 million versus the prior year as the company nears completion of its Wave 2 Lithium expansion projects.

Our primary capital allocation priorities are to grow profitably, fund our dividend, and maintain our financial flexibility and our Investment Grade credit rating. 

In February, the board declared a quarterly dividend of $0.39 per share, an increase over the quarterly dividend paid in 2020. This is our 27th consecutive year of dividend increase.

Our share repurchase authorization remains in place; however, there are no near-term plans to execute share buybacks. We have discontinued efforts to sell our PCS business and will continue to operate this business within our portfolio.

Earnings Call

Date:

Thursday, May 6, 2021

Time:

9:00 AM Eastern time

Dial-in (U.S.):

844-347-1034

Dial-in (International):

209-905-5910

Passcode:

9167449

The company's earnings presentation and supporting material are available on Albemarle's website at https://investors.albemarle.com.

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, the conference call and discussions that follow, including, without limitation, information related to product development, production capacity, committed volumes, market trends, pricing, financial flexibility, expected growth, anticipated return on opportunities, earnings and demand for our products, input costs, productivity improvements, surcharges, tax rates, stock repurchases, dividends, cash flow generation, costs and cost synergies, capital projects, future acquisition and divestiture transactions, 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; hazards associated with chemicals manufacturing; 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 most recent Annual Report on Form 10-K any subsequently filed 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
Consolidated Statements of Income
(In Thousands Except Per Share Amounts) (Unaudited)


Three Months Ended


March 31,


2021


2020

Net sales

$

829,291



$

738,845


Cost of goods sold

565,604



496,827


Gross profit

263,687



242,018


Selling, general and administrative expenses

93,187



101,877


Research and development expenses

14,636



16,097


Operating profit

155,864



124,044


Interest and financing expenses

(43,882)



(16,885)


Other income, net

11,312



8,314


Income before income taxes and equity in net income of unconsolidated investments

123,294



115,473


Income tax expense

22,107



18,442


Income before equity in net income of unconsolidated investments

101,187



97,031


Equity in net income of unconsolidated investments (net of tax)

16,511



26,604


Net income

117,698



123,635


Net income attributable to noncontrolling interests

(22,021)



(16,431)


Net income attributable to Albemarle Corporation

$

95,677



$

107,204


Basic earnings per share

$

0.85



$

1.01


Diluted earnings per share

$

0.84



$

1.01






Weighted-average common shares outstanding – basic

112,592



106,227


Weighted-average common shares outstanding – diluted

113,330



106,512


Albemarle Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(In Thousands) (Unaudited)


March 31,


December 31,


2021


2020

ASSETS




Current assets:




Cash and cash equivalents

$

569,859



$

746,724


Trade accounts receivable

532,964



530,838


Other accounts receivable

60,558



61,958


Inventories

685,779



750,237


Other current assets

93,844



116,427


Assets held for sale

66,390




   Total current assets

2,009,394



2,206,184


Property, plant and equipment

7,433,593



7,427,641


Less accumulated depreciation and amortization

2,043,264



2,073,016


Net property, plant and equipment

5,390,329



5,354,625


Investments

663,448



656,244


Noncurrent assets held for sale

50,683




Other assets

212,258



219,268


Goodwill

1,629,169



1,665,520


Other intangibles, net of amortization

335,021



349,105


   Total assets

$

10,290,302



$

10,450,946


LIABILITIES AND EQUITY




Current liabilities:




Accounts payable

$

492,532



$

483,221


Accrued expenses

378,973



440,763


Current portion of long-term debt

616



804,677


Dividends payable

45,327



40,937


Liabilities held for sale

4,068




Income taxes payable

31,740



32,251


   Total current liabilities

953,256



1,801,849


Long-term debt

2,030,032



2,767,381


Postretirement benefits

47,817



48,075


Pension benefits

316,652



340,818


Other noncurrent liabilities

619,309



629,377


Deferred income taxes

380,683



394,852


Commitments and contingencies




Equity:




Albemarle Corporation shareholders' equity:




Common stock

1,167



1,069


Additional paid-in capital

2,889,923



1,438,038


Accumulated other comprehensive loss

(350,114)



(326,132)


Retained earnings

3,205,408



3,155,252


   Total Albemarle Corporation shareholders' equity

5,746,384



4,268,227


Noncontrolling interests

196,169



200,367


   Total equity

5,942,553



4,468,594


Total liabilities and equity

$

10,290,302



$

10,450,946


Albemarle Corporation and Subsidiaries
Selected Consolidated Cash Flow Data
(In Thousands) (Unaudited)


Three Months Ended
March 31,


2021


2020

Cash and cash equivalents at beginning of year

$

746,724



$

613,110


Cash flows from operating activities:




Net income

117,698



123,635


Adjustments to reconcile net income to cash flows from operating activities:




Depreciation and amortization

62,260



53,694


Stock-based compensation and other

2,560



2,501


Equity in net income of unconsolidated investments (net of tax)

(16,511)



(26,604)


Dividends received from unconsolidated investments and nonmarketable securities

4,950




Pension and postretirement benefit

(4,226)



(1,719)


Pension and postretirement contributions

(15,329)



(6,113)


Unrealized gain on investments in marketable securities

(1,762)



(627)


Loss on early extinguishment of debt

27,798




Deferred income taxes

(19,384)



4,790


Working capital changes

(49,185)



17,730


Non-cash transfer of 40% value of construction in progress of Kemerton plant to MRL

43,223



36,723


Other, net

5,857



(48,956)


Net cash provided by operating activities

157,949



155,054


Cash flows from investing activities:




Acquisitions, net of cash acquired



(22,572)


Capital expenditures

(179,683)



(214,529)


Sales of marketable securities, net

5,245



2,589


Investments in equity and other corporate investments

(286)



(356)


Net cash used in investing activities

(174,724)



(234,868)


Cash flows from financing activities:




Proceeds from issuance of common stock

1,453,888




Repayments of long-term debt and credit agreements

(1,174,980)




Proceeds from borrowings of credit agreements



250,000


Other debt repayments, net

(325,159)



(151,872)


Fees related to early extinguishment of debt

(23,719)




Dividends paid to shareholders

(41,130)



(38,982)


Dividends paid to noncontrolling interests

(26,219)



(14,286)


Proceeds from exercise of stock options

1,183



10,195


Withholding taxes paid on stock-based compensation award distributions

(6,860)



(3,825)


Other

(253)



(214)


Net cash (used in) provided by financing activities

(143,249)



51,016


Net effect of foreign exchange on cash and cash equivalents

(16,841)



(31,084)


Decrease in cash and cash equivalents

(176,865)



(59,882)


Cash and cash equivalents at end of period

$

569,859



$

553,228


Albemarle Corporation and Subsidiaries
Consolidated Summary of Segment Results
(In Thousands) (Unaudited) 


Three Months Ended


March 31,


2021


2020

Net sales:




Lithium

$

278,976



$

236,818


Bromine Specialties

280,447



231,592


Catalysts

220,243



207,207


All Other

49,625



63,228


Total net sales

$

829,291



$

738,845






Adjusted EBITDA:




Lithium

$

106,436



$

78,637


Bromine Specialties

94,640



83,262


Catalysts

25,427



47,470


All Other

21,479



22,824


Corporate

(17,928)



(35,828)


Total adjusted EBITDA

$

230,054



$

196,365


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, non-operating pension and OPEB items per diluted share, non-recurring and other unusual items per diluted share, adjusted effective income tax rates, EBITDA, adjusted EBITDA, EBITDA margin and adjusted EBITDA margin 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.

ALBEMARLE CORPORATION AND SUBSIDIARIES
Non-GAAP Reconciliations
(Unaudited)

See below for a reconciliation of adjusted net income attributable to Albemarle Corporation, EBITDA and adjusted EBITDA, the non-GAAP financial measures, 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 post-employment benefit (OPEB) items as listed below. The non-recurring or unusual items may include acquisition and integration related costs, gains or losses on sales of businesses, restructuring charges, facility divestiture charges and other significant non-recurring items. EBITDA is defined as earnings before interest and financing expenses, income taxes, and depreciation and amortization. Adjusted EBITDA is defined as EBITDA and the non-recurring, other unusual and non-operating pension and OPEB items as listed below.


Three Months Ended


March 31,

In thousands, except percentages and per share amounts

2021


2020

Net income attributable to Albemarle Corporation

$

95,677



$

107,204


Add back:




Non-operating pension and OPEB items (net of tax)

(4,267)



(2,311)


Non-recurring and other unusual items (net of tax)

32,761



1,493


Adjusted net income attributable to Albemarle Corporation

$

124,171



$

106,386






Adjusted diluted earnings per share

$

1.10



$

1.00






Weighted-average common shares outstanding – diluted

113,330



106,512






Net income attributable to Albemarle Corporation

$

95,677



$

107,204


Add back:




Interest and financing expenses

43,882



16,885


Income tax expense

22,107



18,442


Depreciation and amortization

62,260



53,694


EBITDA

223,926



196,225


Non-operating pension and OPEB items

(5,465)



(2,908)


Non-recurring and other unusual items

11,593



3,048


Adjusted EBITDA

$

230,054



$

196,365






Net sales

$

829,291



$

738,845


EBITDA margin

27.0

%


26.6

%

Adjusted EBITDA margin

27.7

%


26.6

%

See below for a reconciliation of adjusted EBITDA on a segment basis, 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 thousands, except percentages).


Lithium


Bromine
Specialties


Catalysts


Reportable
Segments
Total


All
Other


Corporate


Consolidated
Total


% of
Net
Sales

Three months ended March 31, 2021
















Net income (loss) attributable to Albemarle Corporation

$

74,630



$

82,113



$

12,916



$

169,659



$

20,016



$

(93,998)



$

95,677



11.5

%

Depreciation and amortization

31,806



12,527



12,511



56,844



1,463



3,953



62,260



7.5

%

Non-recurring and other unusual items











11,593



11,593



1.4

%

Interest and financing expenses











43,882



43,882



5.3

%

Income tax expense











22,107



22,107



2.7

%

Non-operating pension and OPEB items











(5,465)



(5,465)



(0.7)

%

Adjusted EBITDA

$

106,436



$

94,640



$

25,427



$

226,503



$

21,479



$

(17,928)



$

230,054



27.7

%

















Three months ended March 31, 2020
















Net income (loss) attributable to Albemarle Corporation

$

53,240



$

71,665



$

34,892



$

159,797



$

20,846



$

(73,439)



$

107,204



14.5

%

Depreciation and amortization

25,397



11,597



12,578



49,572



1,978



2,144



53,694



7.2

%

Non-recurring and other unusual items











3,048



3,048



0.4

%

Interest and financing expenses











16,885



16,885



2.3

%

Income tax expense











18,442



18,442



2.5

%

Non-operating pension and OPEB items











(2,908)



(2,908)



(0.4)

%

Adjusted EBITDA

$

78,637



$

83,262



$

47,470



$

209,369



$

22,824



$

(35,828)



$

196,365



26.6

%

Non-operating pension and OPEB items, consisting of mark-to-market actuarial gains/losses, settlements/curtailments, interest cost and expected return on assets, are not allocated to our operating segments and are included in the Corporate category. In addition, 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. Non-operating pension and OPEB items were as follows (in thousands):


Three Months Ended


March 31,


2021


2020

Interest cost

$

5,428



$

7,155


Expected return on assets

(10,893)



(10,063)


Total

$

(5,465)



$

(2,908)


In addition to the non-operating pension and OPEB items disclosed above, we have identified certain other items and excluded them from our adjusted net income calculation for the periods presented. A listing of these items, as well as a detailed description of each follows below (per diluted share):


Three Months Ended


March 31,


2021


2020

Restructuring and other(1)

$



$

0.01


Acquisition and integration related costs(2)

0.02



0.02


Loss on early extinguishment of debt(3)

0.20




Other(4)

0.06



(0.01)


Discrete tax items(5)

0.01



(0.01)


Total non-recurring and other unusual items

$

0.29



$

0.01


 

(1)

In 2020, we recorded severance expenses as part of business reorganization plans, impacting each of our businesses and Corporate, primarily in the U.S., Germany and with our Jordanian joint venture partner. During the three months ended March 31, 2020, we recorded severance expenses in Cost of goods sold, Selling, general and administrative expenses and Net income attributable to noncontrolling interest of $0.7 million, $1.5 million and a $0.3 million gain ($1.5 million after income taxes, or $0.01 per share), respectively. The balance of unpaid severance is recorded in Accrued expenses and is expected to primarily be paid through 2021.




(2)

Costs related to the acquisition, integration and potential divestitures for various significant projects, recorded in Selling, general and administrative expenses for the three months ended March 31, 2021 and 2020 of $2.2 million and $3.0 million ($1.7 million and $2.3 million after income taxes, or $0.02 per share in each case), respectively.




(3)

Included in Interest and financing expenses for the three-month period ended March 31, 2021 is a loss on early extinguishment of debt of $27.8 million ($23.0 million after income taxes, or $0.20 per share), representing the tender premiums, fees, unamortized discounts and unamortized deferred financing costs from the redemption of $1.5 billion in debt using the proceeds from the issuance of common stock.




(4)

Other adjustments for the three months ended March 31, 2021 included amounts recorded in:


Selling, general and administrative expenses - $5.5 million of expenses primarily related to non-routine labor and compensation related costs that are outside normal compensation arrangements.


Other income, net - $3.9 million of expenses primarily related to asset retirement obligation charges to update of an estimate at a site formerly owned by Albemarle.


After income taxes, these charges totaled $7.1 million, or $0.06 per share.





Other adjustments for the three months ended March 31, 2020 included amounts recorded in:


Other expenses, net - $2.6 million gain resulting from the settlement of a legal matter related to a business sold, partially offset by a $0.8 million loss resulting from the adjustment of indemnifications related to previously disposed businesses.


After income taxes, these net gains totaled $1.2 million, or $0.01 per share.




(5)

Included in Income tax expense for the three months ended March 31, 2021 are discrete net tax expenses of $1.0 million, or $0.01 per share. This net expense is primarily related to an out-of-period adjustment regarding an overstated deferred tax liability for the three-month period ended December 31, 2017, offset by a benefit due to the release of a foreign valuation allowance and excess tax benefits realized from stock-based compensation arrangements.





Included in Income tax expense for the three months ended March 31, 2020 are discrete net tax benefits of $1.1 million, or $0.01 per share. This net benefit is primarily related to excess tax benefits realized from stock-based compensation arrangements.

See below for a reconciliation of the adjusted effective income tax rate, the non-GAAP financial measure, to the effective income tax rate, the most directly comparable financial measure calculated and reported in accordance with GAAP (in thousands, except percentages).


Income before
income taxes and
equity in net income
of unconsolidated
investments


Income tax
expense


Effective income tax
rate

Three months ended March 31, 2021






As reported

$

123,294



$

22,107



17.9

%

Non-recurring, other unusual and non-operating pension and OPEB items

33,926



5,432




As adjusted

$

157,220



$

27,539



17.5

%







Three months ended March 31, 2020






As reported

$

115,473



$

18,442



16.0

%

Non-recurring, other unusual and non-operating pension and OPEB items

461



958




As adjusted

$

115,934



$

19,400



16.7

%

 

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SOURCE Albemarle Corporation

Copyright 2021 PR Newswire

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