Ashland Global Holdings Inc. (NYSE: ASH) today provided an update
for preliminary fiscal 2022 third-quarter financial results1 and
raised its outlook for fiscal year 2022 results. Additional
information regarding third-quarter fiscal 2022 earnings and
full-year outlook will be shared during a conference call webcast
with securities analysts on Wednesday, July 27, 2022.
Preliminary fiscal 2022 third-quarter
financial resultsAshland’s financial results during the
quarter reflected previously communicated key drivers:
- Continued strong demand from resilient end-markets;
- Lower overall exposure to petrochemical-linked raw
materials;
- Disciplined pricing and product mix actions more than offset
additional inflation in raw-material, freight and energy
costs;
- Consistent operating performance across the company’s global
network of production facilities and research and development
labs;
- Strong financial results despite significant foreign currency
headwinds resulting from the strengthening U.S. dollar.
Sales were approximately $644 million, up
approximately 19 percent versus the prior-year period. Each
of the company’s reportable segments reported double-digit sales
growth compared to the prior year, driven by strong end-market
demand, enhanced pricing and improved product mix. Foreign currency
negatively impacted sales by approximately $26 million, or five
percent.
Ashland expects income from continuing
operations during the third fiscal quarter of approximately $51
million, or approximately $0.93 per diluted share. Adjusted
earnings from continuing operations excluding intangibles
amortization are expected to be approximately $104 million, or
$1.89 per diluted share. Net income (including discontinued
operations) is expected to be approximately $36
million.
Ashland’s Adjusted EBITDA is expected to be
approximately $174 million, up approximately 35 percent versus
prior year driven primarily by higher sales and expanded operating
margins, partially offset by unfavorable foreign currency. Each of
the company’s reportable segments delivered strong growth in
Adjusted EBITDA compared to the prior-year period. Foreign currency
negatively impacted Adjusted EBITDA by approximately $14 million,
or 11 percent.
The company expects that free cash flow
generation will be below prior year during the third fiscal quarter
due primarily to an increase in working capital levels globally as
previously communicated.
Fiscal year 2022 outlookBased
on current expectations and considering external uncertainties,
Ashland now expects sales in the range of $2.35 billion to $2.40
billion for fiscal year 2022, an increase of approximately three
percent when compared to previous expectations. This increased
outlook assumes a headwind of approximately $30 million from
negative foreign currency in the fiscal fourth quarter.
In addition, the company now expects Adjusted
EBITDA to be in the range of $580 million to $590 million for
fiscal year 2022, an increase of approximately four percent when
compared to previous expectations. This increased outlook assumes a
headwind of approximately $10 million from negative foreign
currency in the fiscal fourth quarter.
“Ashland is focused on the visibility we have
and the things we can control,” said Guillermo Novo, chair and
chief executive officer, Ashland. “The war in Ukraine and its
potential impact to the global economy, energy cost and
availability in Europe impacting customer and supplier operations,
the strengthening U.S. dollar, additional pandemic-related
lockdowns, and continued cost-inflation pressures are the greatest
areas of uncertainty currently. Our expectations regarding
logistics and transportation remain pragmatic with little to no
improvement expected during the fiscal year. Production levels
across all of Ashland’s global manufacturing facilities remain
strong as we work to meet customer demand as well as rebuild global
inventories.”
“We are encouraged by the resilient demand in
each of our segments and the operating discipline demonstrated by
the entire company,” continued Novo. “The Ashland team is executing
well on the aspects of the business that are within our
control.”
“We expect underlying near-term demand to remain
strong and continue to take actions to build inventories to
mitigate supply-chain and shipping challenges,” continued
Novo. “Pricing and mix-improvement actions should cover
current cost inflation and we are ready to take further action to
recover any additional cost inflation. While there continues to be
a great deal of global uncertainty, due to the resilient nature of
our portfolio and the end markets we serve and the disciplined
pricing actions enacted by our teams, we now expect sales and
Adjusted EBITDA for the full fiscal year to be greater than our
previously communicated outlook. I look forward to discussing our
fiscal-third quarter financial results and outlook on our upcoming
earnings call and webcast,” concluded Novo.
The information in this release is preliminary,
based upon information available at the time of this news release,
and actual results may differ.
Conference Call WebcastAshland
plans to issue its third-quarter earnings release at approximately
5 p.m. ET on Tuesday, July 26, 2022. The company’s live webcast
with securities analysts will include an executive summary and
detailed remarks. The live webcast will take place at 9 a.m. ET on
Wednesday, July 27, 2022. Simultaneously, the company will post a
slide presentation in the Investor Relations section of its website
at http://investor.ashland.com.
Among those participating in the webcast
presentation will be:
- Guillermo Novo, chair and chief executive officer;
- Kevin Willis, senior vice president and chief financial
officer; and
- Seth Mrozek, director, investor relations.
To access the call by phone, please go to this
registration link and you will be provided with dial in details. To
avoid delays, we encourage participants to dial into the conference
call fifteen minutes ahead of the scheduled start time.
The webcast and supporting materials will be
accessible through the Investor Relations section of Ashland's
website at http://investor.ashland.com. Following the live event,
an archived version of the webcast and supporting materials will be
available on the Ashland website for 12 months.
Use of Non-GAAP MeasuresAshland
believes that by removing the impact of depreciation and
amortization and excluding certain non-cash charges, amounts spent
on interest and taxes and certain other charges that are highly
variable from year to year, adjusted EBITDA provides Ashland’s
investors with performance measures that reflect the impact to
operations from trends in changes in sales, margin and operating
expenses, providing a perspective not immediately apparent from net
income. The adjustments Ashland makes to derive the non-GAAP
measure of adjusted EBITDA exclude items which may cause short-term
fluctuations in net income and which Ashland does not consider to
be the fundamental attributes or primary drivers of its business.
Adjusted EBITDA provides disclosure on the same basis as that used
by Ashland’s management to evaluate financial performance on a
consolidated and reportable segment basis and provide consistency
in our financial reporting, facilitate internal and external
comparisons of Ashland’s historical operating performance and its
business units, and provide continuity to investors for
comparability purposes.
Key items, which are set forth on Table 2
accompanying this release, are defined as financial effects from
significant transactions that, either by their nature or amount,
have caused short-term fluctuations in net income and/or operating
income, which Ashland does not consider to most accurately reflect
Ashland’s underlying business performance and trends.
Further, Ashland believes that providing supplemental information
that excludes the financial effects of these items in the financial
results will enhance the investor’s ability to compare financial
performance between reporting periods.
Adjusted diluted earnings per share is a
performance measure used by Ashland and is defined by Ashland as
earnings (loss) from continuing operations, adjusted for identified
key items and divided by the number of outstanding diluted shares
of common stock. Ashland believes this measure provides
investors additional insights into operational performance by
providing earnings and diluted earnings per share metrics that
exclude the effect of the identified key items and tax specific key
items.
Adjusted diluted earnings per share, excluding
intangibles amortization expense metric enables Ashland to
demonstrate the impact of non-cash intangibles amortization expense
on earnings per share, in addition to key items previously
mentioned. Ashland’s management believes this presentation is
helpful to illustrate how previous acquisitions impact applicable
period results.
About Ashland
Ashland (NYSE: ASH) is a global, consumer market-focused additives
and specialty ingredients company that is responsibly solving for a
better world. Through science and a conscious and proactive mindset
for sustainability, we serve customers in pharmaceutical, personal
care, architectural coatings, construction, energy, food, beverage,
and nutraceuticals. At Ashland, we are approximately 3,800
passionate, tenacious solvers who thrive on developing practical,
innovative, and elegant solutions to complex problems for customers
in more than 100 countries. Visit ashland.com and
ashland.com/sustainability to learn more.
Forward-Looking Statements This
news release contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended and
Section 21E of the Securities Exchange Act of 1934, as amended.
Ashland has identified some of these forward-looking statements
with words such as “anticipates,” “believes,” “expects,”
“estimates,” “is likely,” “predicts,” “projects,” “forecasts,”
“objectives,” “may,” “will,” “should,” “plans” and “intends” and
the negative of these words or other comparable terminology.
Ashland may from time to time make forward-looking statements in
its annual reports, quarterly reports and other filings with the
SEC, news releases and other written and oral communications. These
forward-looking statements are based on Ashland’s expectations and
assumptions, as of the date such statements are made, regarding
Ashland’s future operating performance, financial condition and
expected effects of the COVID-19 pandemic on Ashland’s business,
operating cash flow and liquidity, as well as the economy and other
future events or circumstances. These statements include but may
not be limited to Ashland’s expectations regarding its ability to
drive sales and earnings growth and manage costs.
Ashland’s expectations and assumptions include,
without limitation, internal forecasts and analyses of current and
future market conditions and trends, management plans and
strategies, operating efficiencies and economic conditions (such as
prices, supply and demand, cost of raw materials, and the ability
to recover raw-material cost increases through price increases),
and risks and uncertainties associated with the following: the
impact of acquisitions and/or divestitures Ashland has made or may
make (including the possibility that Ashland may not realize the
anticipated benefits from such transactions); Ashland’s substantial
indebtedness (including the possibility that such indebtedness and
related restrictive covenants may adversely affect Ashland’s future
cash flows, results of operations, financial condition and its
ability to repay debt); severe weather, natural disasters, public
health crises (including the current COVID-19 pandemic), cyber
events and legal proceedings and claims (including product recalls,
environmental and asbestos matters); the effects of the COVID-19
pandemic, and the ongoing Ukraine and Russia conflict, on the
geographies in which we operate, the end markets we serve and on
our supply chain and customers, and without limitation, risks and
uncertainties affecting Ashland that are described in Ashland’s
most recent Form 10-K (including Item 1A Risk Factors) filed with
the SEC, which is available on Ashland’s website at
http://investor.ashland.com or on the SEC’s website at
http://www.sec.gov. Various risks and uncertainties may cause
actual results to differ materially from those stated, projected or
implied by any forward-looking statements. The extent and duration
of the COVID-19 pandemic on our business and operations is
uncertain. Factors that will influence the impact on our business
and operations include the duration and extent of the pandemic, the
extent of imposed or recommended containment and mitigation
measures, and the general economic consequences of the pandemic.
Ashland believes its expectations and assumptions are reasonable,
but there can be no assurance that the expectations reflected
herein will be achieved. Unless legally required, Ashland
undertakes no obligation to update any forward-looking statements
made in this news release whether as a result of new information,
future events or otherwise.
1 Financial results are preliminary until
Ashland’s Form 10-Q is filed with the SEC.
™ Trademark, Ashland or its subsidiaries,
registered in various countries.
FOR FURTHER INFORMATION:
Investor Relations: |
Media Relations: |
Seth A. Mrozek |
Carolmarie C. Brown |
+1 (302) 594-5010 |
+1 (302) 995-3158 |
samrozek@ashland.com |
ccbrown@ashland.com |
- Q3 2022 Earnings Update with Tables_ V_FINAL 20220718
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