CHARLOTTE, N.C., Aug. 3, 2022
/PRNewswire/ -- Albemarle Corporation (NYSE: ALB) today announced
its results for the second quarter ended June 30, 2022.
Second Quarter 2022 and Recent
Highlights
(Unless otherwise stated, all percentage
changes represent year-over-year comparisons)
- Net sales of $1.48 billion, an
increase of 91%
- Net income of $406.8 million, or
$3.46 per diluted share; Adjusted
diluted EPS of $3.45, an increase of
288%
- Adjusted EBITDA of $610 million,
an increase of 214%
- Kemerton I lithium conversion plant in Western Australia achieved first product in
July 2022
- Announced plans to build integrated lithium operations in
the United States, including the
Kings Mountain, North Carolina,
spodumene mine and a lithium conversion plant in the southeast
- Guidance for 2022 further revised upward on successful Lithium
contract renegotiations and increased prices in the Lithium and
Bromine businesses
- Expect significant growth in full-year 2022 results including
net sales of $7.1 - $7.5 billion (>2x 2021) and adjusted EBITDA of
$3.2 - $3.5
billion (>3x 2021)
- With revised guidance, expect to be free cash flow positive in
2022
"We delivered another strong quarter throughout the current
turbulent market environment, thanks to strong demand and pricing
trends, particularly for Lithium and Bromine. Over the past year,
we have shifted our Lithium contracting strategy to realize greater
benefits from these strong market dynamics," said Albemarle CEO
Kent Masters. "At the same time, we
remain disciplined in executing our long-term strategy as we
advance our growth projects in China, Australia, and the Americas."
Outlook
Albemarle's outlook for 2022 has continued to
improve based on expectations for ongoing demand strength and
tightness in the markets it serves. Net sales guidance was revised
upward primarily due to continued strength in pricing in its
Lithium and Bromine businesses. Adjusted EBITDA guidance is also
higher based on pricing expectations slightly offset by
inflationary cost pressures, particularly for natural gas in
Europe and raw materials. We now
expect to be free cash flow positive in 2022.
|
|
FY 2022
Guidance
as of May 23,
2022
|
FY 2022
Guidance
Further
Updated
|
Net sales
|
|
$5.8 - $6.2
billion
|
$7.1 - $7.5
billion
|
Adjusted
EBITDA
|
|
$2.2 - $2.5
billion
|
$3.2 - $3.5
billion
|
Adjusted EBITDA
Margin
|
|
38% - 40%
|
45% - 47%
|
Adjusted Diluted
EPS
|
|
$12.30 -
$15.00
|
$19.25 -
$22.25
|
Net Cash from
Operations
|
|
$550 - $850
million
|
$1.4 - $1.7
billion
|
Capital
Expenditures
|
|
$1.3 - $1.5
billion
|
$1.3 - $1.5
billion
|
Second Quarter Results
In millions, except
per share amounts
|
Q2
2022
|
|
Q2
2021
|
|
$
Change
|
|
%
Change
|
Net sales
|
$
1,479.6
|
|
$
773.9
|
|
$
705.7
|
|
91.2 %
|
Net income attributable
to Albemarle Corporation
|
$
406.8
|
|
$
424.6
|
|
$
(17.8)
|
|
(4.2) %
|
Adjusted
EBITDA(a)
|
$
610.2
|
|
$
194.6
|
|
$
415.6
|
|
213.5 %
|
Diluted earnings per
share
|
$
3.46
|
|
$
3.62
|
|
$
(0.16)
|
|
(4.4) %
|
Non-operating pension and OPEB items(a)
|
(0.03)
|
|
(0.04)
|
|
|
|
|
Non-recurring and other unusual items(a)
|
0.02
|
|
(2.69)
|
|
|
|
|
Adjusted diluted
earnings per share(a)(b)
|
$
3.45
|
|
$
0.89
|
|
$
2.56
|
|
287.6 %
|
|
(a)
See Non-GAAP Reconciliations for further details.
|
(b)
Totals may not add due to rounding.
|
Net sales of $1.48 billion
increased by $705.7 million compared
to the prior-year quarter primarily due to increased pricing driven
by strong demand from diverse end markets.
Net income attributable to Albemarle of $406.8
million decreased by $17.8
million from the prior-year quarter. Note that
prior-year net income attributable to Albemarle includes a $429.4 million ($331.6
million after discrete income taxes, or $2.87 per share) gain related to the sale of the
FCS business which was sold on June 1,
2021.
Adjusted EBITDA of $610.2 million
increased by $415.6 million from the
prior-year quarter primarily due to higher net sales, partially
offset by inflationary cost pressures including natural gas prices
in Europe and raw materials.
The effective income tax rate for the second quarter of 2022 was
22.2% compared to 20.0% in the same period of 2021. The difference
is largely due to global intangible low-taxed income and the
geographic mix of earnings. On an adjusted basis, the effective
income tax rates were 26.3% and 17.5% for the second quarter of
2022 and 2021, respectively.
Business Segment Results
Lithium Results
In
millions
|
Q2
2022
|
|
Q2
2021
|
|
$
Change
|
|
%
Change
|
Net Sales
|
$
891.5
|
|
$
320.3
|
|
$
571.2
|
|
178.3 %
|
Adjusted
EBITDA
|
$
495.2
|
|
$
109.4
|
|
$
385.8
|
|
352.5 %
|
Lithium net sales of $891.5
million increased $571.2
million (+178%) due to higher pricing net of FX (+160%)
related to renegotiated contracts and increased market pricing.
Volume was also higher (+18%) related to the La Negra III/IV
expansion in Chile and higher
tolling volumes to meet growing customer demand. Adjusted EBITDA of
$495.2 million increased $385.8 million as higher pricing and volumes more
than offset higher costs.
Lithium Outlook
Adjusted EBITDA for the full year 2022 is expected to grow
approximately 500-550% year over year, up from the previous outlook
of +300%. Average realized pricing is now expected to be up
225-250% year-over-year resulting from the renegotiated contracts
and increased market pricing. Full-year 2022 volume is expected to
be up 20-30% year over year primarily due to new capacity coming
online as well as higher tolling volumes. The revised outlook
assumes the company's expected third quarter realized selling price
remains constant for the remainder of the year. There is potential
upside if market pricing remains near current levels, if contract
renegotiations result in additional price improvements, or with
additional tolled volumes. There is potential downside in the event
of a material correction in lithium market pricing or potential
volume shortfalls (e.g., delays in acquisitions or expansion
projects).
Albemarle continues to progress
the expansion of its global portfolio of conversion capacity and
utilization of its world-class resource portfolio:
Chile
– La Negra III/IV conversion plant
is in commercial qualification and running as expected
– The Salar Yield Improvement Project
is on schedule for mechanical completion by the middle of next
year
Australia
– Kemerton I conversion plant
achieved first product in July
2022
– Kemerton II conversion plant
remains on track for mechanical completion in the second half of
2022
– Production of spodumene concentrate
from the first and second trains at Wodgina were achieved in May
and July, respectively
China
– The acquisition of the Qinzhou lithium
conversion plant in Guangxi China
is expected to close H2 2022
– Construction is underway at the
Meishan greenfield project
– Zhangjiagang greenfield project has
been deferred as we continue to fine tune the carbonate engineering
design
United States
– New wells and expansion projects
at Silver Peak continue to progress ahead of schedule
Bromine Results
In
millions
|
Q2
2022
|
|
Q2
2021
|
|
$
Change
|
|
%
Change
|
Net Sales
|
$
377.8
|
|
$
279.7
|
|
$
98.0
|
|
35.0 %
|
Adjusted
EBITDA
|
$
135.7
|
|
$
92.6
|
|
$
43.0
|
|
46.5 %
|
Bromine net sales of $377.8
million increased $98.0
million (+35%) primarily due to increased pricing net
of FX (+31%) and slightly higher volumes (+4%). Tight market
conditions continue to drive strong demand and favorable pricing
across the product portfolio. Adjusted EBITDA of $135.7 million increased $43.0 million as higher net sales were partially
offset by higher costs for raw materials and freight.
Bromine Outlook
Adjusted EBITDA for the full year 2022 is expected to grow
approximately 25-30% from 2021 based on higher pricing resulting
from strong demand in diverse end-markets including fire safety
solutions and clear completion fluids for offshore new well
drilling. Successful execution of growth projects in 2021 is
expected to contribute to a 5-10% volume increase in full-year
2022. Bromine's ongoing cost savings initiatives and favorable
pricing are expected to offset higher freight and raw material
costs.
Catalysts Results
In
millions
|
Q2
2022
|
|
Q2
2021
|
|
$
Change
|
|
%
Change
|
Net Sales
|
$
210.3
|
|
$
148.3
|
|
$
62.0
|
|
41.8 %
|
Adjusted
EBITDA
|
$
9.8
|
|
$
21.2
|
|
$
(11.4)
|
|
(53.7) %
|
Catalysts net sales of $210.3
million increased $62.0
million (+42%) compared to the previous year due to higher
volumes (+37%) and higher pricing net of FX (+5%). Adjusted EBITDA
of $9.8 million declined $11.4 million as higher sales were more than
offset by continued cost pressures from increasing natural gas
prices and raw materials.
Catalysts Outlook
Albemarle expects full-year
2022 adjusted EBITDA to be down 25-65% year-over-year, down from
the previous outlook due to continued volatility of raw materials
costs and natural gas pricing in Europe related to the war in Ukraine, partially offset by higher
pricing.
The strategic review of the Catalysts business is ongoing. The
company expects to provide an update as soon as circumstances
warrant.
All Other
In
millions
|
Q2
2022
|
|
Q2
2021
|
|
$
Change
|
|
%
Change
|
Net Sales
|
$
—
|
|
$
25.5
|
|
$
(25.5)
|
|
(100.0) %
|
Adjusted
EBITDA
|
$
—
|
|
$
8.4
|
|
$
(8.4)
|
|
(100.0) %
|
Other operations represent the FCS business which was sold on
June 1, 2021.
Balance Sheet and Liquidity
As of June 30, 2022, Albemarle had estimated liquidity of
approximately $2.6 billion, including
$930.6 million of cash and
equivalents, the full $1 billion
under its revolver, $500 million
remaining under its amended delayed draw term loan and $200.7 million on other available credit lines.
Total debt was $3.5 billion,
representing net debt to adjusted EBITDA of approximately 1.7
times.
Cash Flow and Capital Deployment
Cash from operations of $60.3
million decreased $325.5
million for the six months ended June 30, 2022, versus
the prior year driven by working capital changes, primarily the
increase in receivables and inventories from higher lithium
pricing, as well as a $332.5 million
litigation settlement payment, partially offset by increased
adjusted EBITDA. Capital expenditures of $502.6 million increased by $105.7 million versus the prior year as the
company nears completion of its Wave 2 Lithium expansion projects
and progresses the next wave of growth projects.
Albemarle's primary capital
allocation priorities are to invest in organic and inorganic
opportunities to drive profitable growth, maintain its financial
flexibility and Investment Grade credit rating, and fund its
dividend.
Earnings Call
Date:
|
Thursday, August 4,
2022
|
Time:
|
9:00 AM Eastern
time
|
Dial-in
(U.S.):
|
844-200-6205
|
Dial-in
(International):
|
929-526-1599
|
Passcode:
|
446425
|
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) is a global specialty
chemicals company with leading positions in lithium, bromine and
refining catalysts. Albemarle
thinks 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. Albemarle actively pursues a sustainable
approach to managing its diverse global footprint of world-class
resources. In conjunction with Albemarle's highly experienced and talented
global teams, its deep-seated values, and its collaborative
customer relationships, Albemarle
creates value-added and performance-based solutions that enable a
safer and more sustainable future.
Albemarle regularly posts
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 the 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 the timing of active and
proposed projects, production capacity, committed volumes, pricing,
financial flexibility, expected growth, anticipated return on
opportunities, earnings and demand for Albemarle's products, productivity
improvements, tax rates, stock repurchases, dividends, cash flow
generation, costs and cost synergies, capital projects, future
acquisition and divestiture transactions including statements with
respect to timing, expected benefits from proposed transactions,
market and economic trends, statements with respect to 2022 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 Albemarle's 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 its major customers and industries and
markets served by it; the timing of orders received from customers;
the gain or loss of significant customers; fluctuations in lithium
market pricing, which could impact our revenues and profitability
particularly due to our increased exposure to index-referenced and
variable-priced contracts for battery grade lithium sales; changes
with respect to contract renegotiations; potential production
volume shortfalls; competition from other manufacturers; changes in
the demand for its products or the end-user markets in which its
products are sold; limitations or prohibitions on the manufacture
and sale of its products; availability of raw materials; increases
in the cost of raw materials and energy, and its ability to pass
through such increases to its customers; technological change and
development, changes in its markets in general; fluctuations in
foreign currencies; changes in laws and government regulation
impacting its operations or its products; the occurrence of
regulatory actions, proceedings, claims or litigation (including
with respect to the U.S. Foreign Corrupt Practices Act and foreign
anti-corruption laws); the occurrence of cyber-security breaches,
terrorist attacks, industrial accidents or natural disasters; the
effect of climate change, including any regulatory changes to which
it might be subject; hazards associated with chemicals
manufacturing; the inability to maintain current levels of
insurance, including 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 its global manufacturing cost reduction
initiatives as well as its ongoing continuous improvement and
rationalization programs; changes in the jurisdictional mix of its
earnings and changes in tax laws and rates or interpretation;
changes in monetary policies, inflation or interest rates that may
impact its ability to raise capital or increase its cost of funds,
impact the performance of its pension fund investments and increase
its 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 it may make in the
future; future acquisition and divestiture transactions, including
the ability to successfully execute, operate and integrate
acquisitions and divestitures and incurring additional
indebtedness; continuing uncertainties as to the duration and
impact of the coronavirus (COVID-19) pandemic; performance of
Albemarle's partners in joint
ventures and other projects; changes in credit ratings; and the
other factors detailed from time to time in the reports
Albemarle files with the SEC,
including those described under "Risk Factors" in Albemarle's 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. Albemarle assumes 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
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net
sales
|
$ 1,479,593
|
|
$
773,896
|
|
$ 2,607,321
|
|
$ 1,603,187
|
Cost of goods
sold
|
899,169
|
|
525,479
|
|
1,577,867
|
|
1,091,083
|
Gross
profit
|
580,424
|
|
248,417
|
|
1,029,454
|
|
512,104
|
Selling, general and
administrative expenses
|
128,942
|
|
121,516
|
|
241,510
|
|
214,703
|
Research and
development expenses
|
17,386
|
|
13,976
|
|
33,469
|
|
28,612
|
(Gain) loss on sale of
business/interest in properties
|
—
|
|
(429,408)
|
|
8,400
|
|
(429,408)
|
Operating
profit
|
434,096
|
|
542,333
|
|
746,075
|
|
698,197
|
Interest and financing
expenses
|
(41,409)
|
|
(7,152)
|
|
(69,243)
|
|
(51,034)
|
Other income,
net
|
8,767
|
|
14
|
|
24,263
|
|
11,326
|
Income before income
taxes and equity in net income of unconsolidated
investments
|
401,454
|
|
535,195
|
|
701,095
|
|
658,489
|
Income tax
expense
|
89,018
|
|
106,985
|
|
169,548
|
|
129,092
|
Income before equity in
net income of unconsolidated investments
|
312,436
|
|
428,210
|
|
531,547
|
|
529,397
|
Equity in net income of
unconsolidated investments (net of tax)
|
128,156
|
|
17,998
|
|
190,592
|
|
34,509
|
Net income
|
440,592
|
|
446,208
|
|
722,139
|
|
563,906
|
Net income attributable
to noncontrolling interests
|
(33,819)
|
|
(21,608)
|
|
(61,983)
|
|
(43,629)
|
Net income attributable
to Albemarle Corporation
|
$
406,773
|
|
$
424,600
|
|
$
660,156
|
|
$
520,277
|
Basic earnings per
share
|
$
3.47
|
|
$
3.63
|
|
$
5.64
|
|
$
4.54
|
Diluted earnings per
share
|
$
3.46
|
|
$
3.62
|
|
$
5.61
|
|
$
4.51
|
|
|
|
|
|
|
|
|
Weighted-average common
shares outstanding – basic
|
117,116
|
|
116,809
|
|
117,091
|
|
114,700
|
Weighted-average common
shares outstanding – diluted
|
117,724
|
|
117,436
|
|
117,689
|
|
115,383
|
Albemarle Corporation and
Subsidiaries
|
Condensed Consolidated
Balance Sheets
|
(In Thousands)
(Unaudited)
|
|
|
June
30,
|
|
December
31,
|
|
2022
|
|
2021
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
930,596
|
|
$
439,272
|
Trade accounts
receivable
|
962,215
|
|
556,922
|
Other accounts
receivable
|
124,409
|
|
66,184
|
Inventories
|
1,216,213
|
|
812,920
|
Other current
assets
|
116,671
|
|
132,683
|
Total current
assets
|
3,350,104
|
|
2,007,981
|
Property, plant and
equipment
|
8,465,403
|
|
8,074,746
|
Less accumulated
depreciation and amortization
|
2,257,379
|
|
2,165,130
|
Net property, plant
and equipment
|
6,208,024
|
|
5,909,616
|
Investments
|
903,861
|
|
897,708
|
Other assets
|
230,346
|
|
252,239
|
Goodwill
|
1,542,767
|
|
1,597,627
|
Other intangibles, net
of amortization
|
285,303
|
|
308,947
|
Total
assets
|
$ 12,520,405
|
|
$ 10,974,118
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
1,091,583
|
|
$
647,986
|
Accrued
expenses
|
330,941
|
|
763,293
|
Current portion of
long-term debt
|
251,304
|
|
389,920
|
Dividends
payable
|
46,097
|
|
45,469
|
Income taxes
payable
|
61,837
|
|
27,667
|
Total current
liabilities
|
1,781,762
|
|
1,874,335
|
Long-term
debt
|
3,205,730
|
|
2,004,319
|
Postretirement
benefits
|
43,079
|
|
43,693
|
Pension
benefits
|
205,890
|
|
229,187
|
Other noncurrent
liabilities
|
591,021
|
|
663,698
|
Deferred income
taxes
|
391,948
|
|
353,279
|
Commitments and
contingencies
|
|
|
|
Equity:
|
|
|
|
Albemarle Corporation
shareholders' equity:
|
|
|
|
Common
stock
|
1,171
|
|
1,170
|
Additional paid-in
capital
|
2,927,086
|
|
2,920,007
|
Accumulated other
comprehensive loss
|
(507,138)
|
|
(392,450)
|
Retained
earnings
|
3,664,172
|
|
3,096,539
|
Total Albemarle
Corporation shareholders' equity
|
6,085,291
|
|
5,625,266
|
Noncontrolling
interests
|
215,684
|
|
180,341
|
Total
equity
|
6,300,975
|
|
5,805,607
|
Total liabilities and
equity
|
$ 12,520,405
|
|
$ 10,974,118
|
Albemarle Corporation and
Subsidiaries
|
Selected Consolidated
Cash Flow Data
|
(In Thousands)
(Unaudited)
|
|
|
Six Months
Ended
June
30,
|
|
2022
|
|
2021
|
Cash and cash
equivalents at beginning of year
|
$ 439,272
|
|
$ 746,724
|
Cash flows from
operating activities:
|
|
|
|
Net income
|
722,139
|
|
563,906
|
Adjustments to
reconcile net income to cash flows from operating
activities:
|
|
|
|
Depreciation and
amortization
|
137,567
|
|
123,683
|
Loss (gain) on sale of
business/interest in properties
|
8,400
|
|
(429,408)
|
Stock-based
compensation and other
|
15,232
|
|
8,425
|
Equity in net income
of unconsolidated investments (net of tax)
|
(190,592)
|
|
(34,509)
|
Dividends received
from unconsolidated investments and nonmarketable
securities
|
156,964
|
|
27,420
|
Pension and
postretirement benefit
|
(8,273)
|
|
(8,465)
|
Pension and
postretirement contributions
|
(7,685)
|
|
(20,266)
|
Unrealized gain on
investments in marketable securities
|
3,061
|
|
(2,384)
|
Loss on early
extinguishment of debt
|
19,219
|
|
28,955
|
Deferred income
taxes
|
39,476
|
|
27,708
|
Working capital
changes
|
(888,036)
|
|
7,942
|
Non-cash transfer of
40% value of construction in progress of Kemerton plant to
MRL
|
96,314
|
|
96,185
|
Other, net
|
(43,475)
|
|
(3,339)
|
Net cash provided by
operating activities
|
60,311
|
|
385,853
|
Cash flows from
investing activities:
|
|
|
|
Capital
expenditures
|
(502,607)
|
|
(396,915)
|
Cash proceeds from
divestitures, net
|
—
|
|
290,467
|
Sales of marketable
securities, net
|
3,402
|
|
4,553
|
Investments in equity
and other corporate investments
|
(767)
|
|
(286)
|
Net cash used in
investing activities
|
(499,972)
|
|
(102,181)
|
Cash flows from
financing activities:
|
|
|
|
Proceeds from issuance
of common stock
|
—
|
|
1,453,888
|
Repayments of
long-term debt and credit agreements
|
(455,000)
|
|
(1,173,823)
|
Proceeds from
borrowings of credit agreements
|
1,964,216
|
|
—
|
Other debt repayments,
net
|
(390,601)
|
|
(325,316)
|
Fees related to early
extinguishment of debt
|
(9,767)
|
|
(24,877)
|
Dividends paid to
shareholders
|
(91,894)
|
|
(86,637)
|
Dividends paid to
noncontrolling interests
|
(26,525)
|
|
(43,698)
|
Proceeds from exercise
of stock options
|
855
|
|
14,335
|
Withholding taxes paid
on stock-based compensation award distributions
|
(10,583)
|
|
(7,047)
|
Other
|
(4,172)
|
|
(1,359)
|
Net cash provided by
(used in) financing activities
|
976,529
|
|
(194,534)
|
Net effect of foreign
exchange on cash and cash equivalents
|
(45,544)
|
|
(12,290)
|
Increase in cash and
cash equivalents
|
491,324
|
|
76,848
|
Cash and cash
equivalents at end of period
|
$ 930,596
|
|
$ 823,572
|
Albemarle Corporation and
Subsidiaries
|
Consolidated Summary of
Segment Results
|
(In Thousands)
(Unaudited)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net
sales:
|
|
|
|
|
|
|
|
Lithium
|
$
891,516
|
|
$
320,334
|
|
$ 1,441,788
|
|
$
599,310
|
Bromine
|
377,752
|
|
279,748
|
|
737,331
|
|
560,195
|
Catalysts
|
210,325
|
|
148,344
|
|
428,202
|
|
368,587
|
All Other
|
—
|
|
25,470
|
|
—
|
|
75,095
|
Total net
sales
|
$ 1,479,593
|
|
$
773,896
|
|
$ 2,607,321
|
|
$ 1,603,187
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA:
|
|
|
|
|
|
|
|
Lithium
|
$
495,208
|
|
$
109,441
|
|
$
803,823
|
|
$
215,877
|
Bromine
|
135,683
|
|
92,646
|
|
264,917
|
|
187,286
|
Catalysts
|
9,792
|
|
21,164
|
|
26,702
|
|
46,591
|
All Other
|
—
|
|
8,379
|
|
—
|
|
29,858
|
Corporate
|
(30,474)
|
|
(37,002)
|
|
(53,303)
|
|
(54,930)
|
Total adjusted
EBITDA
|
$
610,209
|
|
$
194,628
|
|
$ 1,042,139
|
|
$
424,682
|
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") or other comparable measures calculated
and reported in accordance with GAAP. These measures are presented
here to provide additional useful measurements to review the
company's 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
Albemarle uses to evaluate its
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 net
income attributable to Albemarle Corporation is defined as net income before the
non-recurring, other unusual and non-operating pension and other
post-employment benefit (OPEB)
items as listed below. The non-recurring and unusual items may
include acquisition and integration related costs, gains or losses
on sales of businesses, restructuring charges, facility divestiture
charges, certain litigation and arbitration costs and charges, and
other significant non-recurring items. EBITDA is defined as net
income attributable to Albemarle Corporation before interest and financing
expenses, income tax expense, and depreciation and amortization.
Adjusted EBITDA is defined as EBITDA plus or minus the
non-recurring, other unusual and non-operating pension
and OPEB items as listed
below.
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
In thousands, except
percentages and per share amounts
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net income attributable
to Albemarle Corporation
|
$ 406,773
|
|
$ 424,600
|
|
$ 660,156
|
|
$ 520,277
|
Add back:
|
|
|
|
|
|
|
|
Non-operating pension
and OPEB items (net of tax)
|
(3,946)
|
|
(4,273)
|
|
(8,085)
|
|
(8,540)
|
Non-recurring and
other unusual items (net of tax)
|
2,909
|
|
(315,996)
|
|
33,812
|
|
(283,235)
|
Adjusted net income
attributable to Albemarle Corporation
|
$ 405,736
|
|
$ 104,331
|
|
$ 685,883
|
|
$ 228,502
|
|
|
|
|
|
|
|
|
Adjusted diluted
earnings per share
|
$
3.45
|
|
$
0.89
|
|
$
5.83
|
|
$
1.98
|
|
|
|
|
|
|
|
|
Weighted-average common
shares outstanding – diluted
|
117,724
|
|
117,436
|
|
117,689
|
|
115,383
|
|
|
|
|
|
|
|
|
Net income attributable
to Albemarle Corporation
|
$ 406,773
|
|
$ 424,600
|
|
$ 660,156
|
|
$ 520,277
|
Add back:
|
|
|
|
|
|
|
|
Interest and financing
expenses
|
41,409
|
|
7,152
|
|
69,243
|
|
51,034
|
Income tax
expense
|
89,018
|
|
106,985
|
|
169,548
|
|
129,092
|
Depreciation and
amortization
|
70,993
|
|
61,423
|
|
137,567
|
|
123,683
|
EBITDA
|
608,193
|
|
600,160
|
|
1,036,514
|
|
824,086
|
Non-operating pension
and OPEB items
|
(5,038)
|
|
(5,471)
|
|
(10,318)
|
|
(10,936)
|
Non-recurring and
other unusual items (excluding items associated with interest
expense)
|
7,054
|
|
(400,061)
|
|
15,943
|
|
(388,468)
|
Adjusted
EBITDA
|
$ 610,209
|
|
$ 194,628
|
|
$
1,042,139
|
|
$ 424,682
|
|
|
|
|
|
|
|
|
Net sales
|
$
1,479,593
|
|
$ 773,896
|
|
$
2,607,321
|
|
$
1,603,187
|
EBITDA
margin
|
41.1 %
|
|
77.6 %
|
|
39.8 %
|
|
51.4 %
|
Adjusted EBITDA
margin
|
41.2 %
|
|
25.1 %
|
|
40.0 %
|
|
26.5 %
|
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
|
|
Catalysts
|
|
Reportable
Segments
Total
|
|
All
Other
|
|
Corporate
|
|
Consolidated
Total
|
|
% of Net
Sales
|
Three months ended
June 30, 2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Albemarle Corporation
|
$ 452,099
|
|
$ 122,461
|
|
$
(3,383)
|
|
$ 571,177
|
|
$ —
|
|
$ (164,404)
|
|
$
406,773
|
|
27.5 %
|
Depreciation and
amortization
|
42,502
|
|
13,222
|
|
13,175
|
|
68,899
|
|
—
|
|
2,094
|
|
70,993
|
|
4.8 %
|
Non-recurring and
other unusual items
|
607
|
|
—
|
|
—
|
|
607
|
|
—
|
|
6,447
|
|
7,054
|
|
0.5 %
|
Interest and financing
expenses
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
41,409
|
|
41,409
|
|
2.8 %
|
Income tax
expense
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
89,018
|
|
89,018
|
|
6.0 %
|
Non-operating pension
and OPEB items
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(5,038)
|
|
(5,038)
|
|
(0.3) %
|
Adjusted
EBITDA
|
$ 495,208
|
|
$ 135,683
|
|
$ 9,792
|
|
$ 640,683
|
|
$ —
|
|
$
(30,474)
|
|
$
610,209
|
|
41.2 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
June 30, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Albemarle Corporation
|
$
74,593
|
|
$
80,148
|
|
$ 8,446
|
|
$ 163,187
|
|
$
7,972
|
|
$
253,441
|
|
$
424,600
|
|
54.9 %
|
Depreciation and
amortization
|
33,497
|
|
12,498
|
|
12,718
|
|
58,713
|
|
407
|
|
2,303
|
|
61,423
|
|
7.9 %
|
Non-recurring and
other unusual items
|
1,351
|
|
—
|
|
—
|
|
1,351
|
|
—
|
|
(401,412)
|
|
(400,061)
|
|
(51.7) %
|
Interest and financing
expenses
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
7,152
|
|
7,152
|
|
0.9 %
|
Income tax
expense
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
106,985
|
|
106,985
|
|
13.8 %
|
Non-operating pension
and OPEB items
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(5,471)
|
|
(5,471)
|
|
(0.7) %
|
Adjusted
EBITDA
|
$ 109,441
|
|
$
92,646
|
|
$
21,164
|
|
$ 223,251
|
|
$
8,379
|
|
$
(37,002)
|
|
$
194,628
|
|
25.1 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended
June 30, 2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Albemarle Corporation
|
$ 713,788
|
|
$ 239,022
|
|
$
606
|
|
$ 953,416
|
|
$ —
|
|
$ (293,260)
|
|
$
660,156
|
|
25.3 %
|
Depreciation and
amortization
|
81,028
|
|
25,895
|
|
26,096
|
|
133,019
|
|
—
|
|
4,548
|
|
137,567
|
|
5.3 %
|
Non-recurring and
other unusual items
|
9,007
|
|
—
|
|
—
|
|
9,007
|
|
—
|
|
6,936
|
|
15,943
|
|
0.6 %
|
Interest and financing
expenses
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
69,243
|
|
69,243
|
|
2.7 %
|
Income tax
expense
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
169,548
|
|
169,548
|
|
6.5 %
|
Non-operating pension
and OPEB items
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(10,318)
|
|
(10,318)
|
|
(0.4) %
|
Adjusted
EBITDA
|
$ 803,823
|
|
$ 264,917
|
|
$
26,702
|
|
$
1,095,442
|
|
$ —
|
|
$
(53,303)
|
|
$
1,042,139
|
|
40.0 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended
June 30, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Albemarle Corporation
|
$ 144,965
|
|
$ 162,261
|
|
$
21,362
|
|
$ 328,588
|
|
$
27,988
|
|
$
163,701
|
|
$
520,277
|
|
32.5 %
|
Depreciation and
amortization
|
65,303
|
|
25,025
|
|
25,229
|
|
115,557
|
|
1,870
|
|
6,256
|
|
123,683
|
|
7.7 %
|
Non-recurring and
other unusual items (excluding items associated
with interest expense)
|
5,609
|
|
—
|
|
—
|
|
5,609
|
|
—
|
|
(394,077)
|
|
(388,468)
|
|
(24.2) %
|
Interest and financing
expenses
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
51,034
|
|
51,034
|
|
3.2 %
|
Income tax
expense
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
129,092
|
|
129,092
|
|
8.1 %
|
Non-operating pension
and OPEB items
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(10,936)
|
|
(10,936)
|
|
(0.7) %
|
Adjusted
EBITDA
|
$ 215,877
|
|
$ 187,286
|
|
$
46,591
|
|
$ 449,754
|
|
$
29,858
|
|
$
(54,930)
|
|
$
424,682
|
|
26.5 %
|
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
Albemarle's operating segments and
are included in the Corporate category. In addition, the company
believes that these components of pension cost are mainly driven by
market performance, and the company manages these separately from
the operational performance of the company's businesses. In
accordance with GAAP, these non-operating pension and OPEB items
are included in Other income (expenses), net. Non-operating pension
and OPEB items were as follows (in thousands):
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Interest
cost
|
$
5,894
|
|
$
5,430
|
|
$ 11,826
|
|
$ 10,858
|
Expected return on
assets
|
(10,932)
|
|
(10,901)
|
|
(22,144)
|
|
(21,794)
|
Total
|
$ (5,038)
|
|
$ (5,471)
|
|
$
(10,318)
|
|
$
(10,936)
|
In addition to the non-operating pension and OPEB items
disclosed above, the company has identified certain other items and
excluded them from Albemarle's
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
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Restructuring and
other(1)
|
$
—
|
|
$
—
|
|
$
—
|
|
$
0.01
|
Acquisition and
integration related costs(2)
|
0.03
|
|
0.01
|
|
0.05
|
|
0.03
|
Albemarle Foundation
contribution(3)
|
—
|
|
0.13
|
|
—
|
|
0.13
|
Loss (gain) on sale of
business/interest in properties(4)
|
—
|
|
(2.82)
|
|
0.07
|
|
(2.87)
|
Loss on early
extinguishment of debt(5)
|
0.13
|
|
0.01
|
|
0.13
|
|
0.21
|
Other(6)
|
0.01
|
|
0.04
|
|
—
|
|
0.10
|
Tax related
items(7)
|
(0.15)
|
|
(0.06)
|
|
0.04
|
|
(0.06)
|
Total non-recurring
and other unusual items
|
$
0.02
|
|
$
(2.69)
|
|
$
0.29
|
|
$
(2.45)
|
(1)
|
During the three and
six months ended June 30, 2021, Albemarle recorded facility closure
costs related to offices in Germany, and severance expenses in
Germany and Belgium, in Selling, general and administrative
expenses of $0.8 million and $1.5 million ($0.5 million and $1.1
million after income taxes, or less than $0.01 and $0.01 per
share), respectively.
|
|
|
(2)
|
Costs related to the
acquisition, integration and divestitures for various significant
projects, recorded in Selling, general and administrative expenses
for the three and six months ended June 30, 2022 were $5.4 million
and $7.1 million ($4.2 million and $5.5 million after income taxes,
or $0.03 and $0.05 per share), respectively, and for the three and
six months ended June 30, 2021 were $1.9 million and $4.1 million
($1.5 million and $3.2 million after income taxes, or $0.01 and
$0.03 per share), respectively.
|
|
|
(3)
|
Included in Selling,
general and administrative expenses for the three and six months
ended June 30, 2021 is a charitable contribution of $20.0 million
($15.5 million after income taxes, or $0.13 per share), using a
portion of the proceeds received from the FCS divestiture, to the
Albemarle Foundation, a nonprofit organization that sponsors
grants, health and social projects, educational initiatives,
disaster relief, matching gift programs, scholarships and other
charitable initiatives in locations where Albemarle's employees
live and the company operates. This contribution is in addition to
the normal annual contribution made to the Albemarle Foundation by
the company, and is significant in size and nature in that it is
intended to provide more long-term benefits in these
communities.
|
|
|
(4)
|
Included in (Gain) loss
on sale of business/interest in properties for the six months ended
June 30, 2022 is an expense of $8.4 million ($0.07 per share after
no income tax impact) related to post-measurement period Wodgina
acquisition purchase price adjustment for a revised estimate of the
obligation to construct the lithium hydroxide conversion assets in
Kemerton due to anticipated cost overruns from supply chain, labor
and COVID-19 pandemic related issues. The three and six months
ended June 30, 2021 include a gain of $429.4 million ($331.6
million after discrete income taxes, or $2.87 per share) related to
the sale of the FCS business.
|
|
|
(5)
|
Included in Interest
and financing expenses for the three and six months ended June 30,
2022 is a loss on early extinguishment of debt of $19.2 million
($14.9 million after income taxes, or $0.13 per share),
representing the tender premiums, fees, unamortized discounts,
unamortized deferred financing costs and accelerated amortization
of associated interest rate swap from the redemption of the $425
million senior notes originally due in 2024 using the proceeds from
the issuance of $1.7 billion in senior notes in May
2022.
|
|
|
|
Included in Interest
and financing expenses for the three and six months ended June 30,
2021 is a loss on early extinguishment of debt of $1.2 million
and $29.0 million ($0.8 million and $23.8 million after income
taxes, or $0.01 and $0.21 per share), respectively, 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.
|
|
|
(6)
|
Other adjustments for
the three months ended June 30, 2022 included amounts recorded
in:
- Cost of goods sold - $0.5 million of expense
related to the settlement of a legal matter resulting from a prior
acquisition.
- Selling, general and administrative expenses
- $1.1 million primarily related to facility closure expenses of
offices in Germany.
After income taxes,
these charges totaled $1.2 million, or $0.01 per share.
Other adjustments for
the six months ended June 30, 2022 included amounts recorded
in:
- Cost of goods sold - $0.5 million of expense
related to the settlement of a legal matter resulting from a prior
acquisition.
- Selling, general and administrative expenses
- $4.3 million of gains from the sale of legacy properties not part
of our operations, partially offset by $2.8 million of charges for
environmental reserves at sites not part of our operations and $1.1
million primarily related to facility closure expenses of offices
in Germany.
- Other income, net - $0.6 million gain related
to a settlement received from a legal matter in a prior
period.
Other adjustments for
the three months ended June 30, 2021 included amounts recorded
in:
- Selling, general
and administrative expenses - $4.0 million of a loss resulting from
the sale of property, plant and equipment, $1.6 million of charges
for an environmental reserve at a site not part of the company's
operations and $1.4 million of expenses primarily related to
non-routine labor and compensation related costs that are outside
normal compensation arrangements.
- Other income, net -
$0.3 million of a gain resulting from the adjustment of
indemnification obligations related to previously disposed
businesses.
After income taxes,
these charges totaled $0.3 million, or less than $0.01 per
share.
|
|
|
(7)
|
Included in Income tax
expense for the three and six months ended June 30, 2022 are
discrete net tax benefits of $17.3 million, or $0.15 per share and
net tax expense of $4.7 million ,or $0.04 per share, respectively.
The net benefit for the three months was primarily related to a
benefit from global intangible low-taxed income, partially offset
by net discrete tax expenses related to withholding taxes and
foreign return to provisions. The discrete net expense for the six
months was primarily related to withholding taxes and foreign
return to provisions, partially offset by a benefit for excess tax
benefits realized from stock-based compensation
arrangements.
|
|
|
|
Included in Income tax
expense for the three and six months ended June 30, 2021 are
discrete net tax benefits of $7.6 million, or $0.06 per share and
$6.6 million, or $0.06 per share, respectively. The net benefit for
the three months is primarily related to excess tax benefits
realized from stock-based compensation arrangements and the
revaluation of deferred taxes due to tax rate changes. The net
benefit for the six months is primarily related to the release of a
foreign valuation allowance, excess tax benefits realized from
stock-based compensation arrangements, and the revaluation of
deferred taxes due to tax rate changes, partially offset by tax
expense due to an out-of-period adjustment regarding an overstated
deferred tax liability for the three-month period ended December
31, 2017.
|
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
June 30, 2022
|
|
|
|
|
|
As reported
|
$
401,454
|
|
$
89,018
|
|
22.2 %
|
Non-recurring, other
unusual and non-operating pension and OPEB items
|
21,235
|
|
22,272
|
|
|
As adjusted
|
$
422,689
|
|
$
111,290
|
|
26.3 %
|
|
|
|
|
|
|
Three months ended
June 30, 2021
|
|
|
|
|
|
As reported
|
$
535,195
|
|
$
106,985
|
|
20.0 %
|
Non-recurring, other
unusual and non-operating pension and OPEB items
|
(404,383)
|
|
(84,114)
|
|
|
As adjusted
|
$
130,812
|
|
$
22,871
|
|
17.5 %
|
|
|
|
|
|
|
Six months ended
June 30, 2022
|
|
|
|
|
|
As reported
|
$
701,095
|
|
$
169,548
|
|
24.2 %
|
Non-recurring, other
unusual and non-operating pension and OPEB items
|
24,844
|
|
(883)
|
|
|
As adjusted
|
$
725,939
|
|
$
168,665
|
|
23.2 %
|
|
|
|
|
|
|
Six months ended
June 30, 2021
|
|
|
|
|
|
As reported
|
$
658,489
|
|
$
129,092
|
|
19.6 %
|
Non-recurring, other
unusual and non-operating pension and OPEB items
|
(370,457)
|
|
(78,682)
|
|
|
As adjusted
|
$
288,032
|
|
$
50,410
|
|
17.5 %
|
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SOURCE Albemarle Corporation