WILMINGTON, Del., Nov. 4, 2019 /PRNewswire/ --
Third Quarter 2019 Results
- Net Sales of $1.4 billion
- Net Income of $76 million, with
diluted EPS of $0.46
- Adjusted Net Income of $98
million, with diluted Adjusted EPS of $0.59
- Adjusted EBITDA of $248
million
- Free Cash Flow of $160
million
Other Highlights
- Published our second annual Corporate Responsibility Commitment
(CRC) report
- Announced the launch of a new Ti-Pure™ product for the
high-quality, specialty ink market
The Chemours Company (Chemours) (NYSE: CC), a global chemistry
company with leading market positions in Fluoroproducts, Chemical
Solutions and Titanium Technologies, today announced its financial
results for the third quarter 2019.
"Our results in the third quarter reflect a weakening
macro-economic environment that had an adverse impact on
performance across the business," said Chemours President and CEO
Mark Vergnano. "Despite that,
we continue to make progress on our core business imperatives,
including Ti-Pure™ value stabilization, Opteon™ adoption, and
Fluoropolymers application development. As part of our ongoing
efforts to improve operating efficiencies, we are making several
restructuring and portfolio changes across Chemours, including the
shutdown of our Methylamines and Methylamides business."
Third quarter 2019 net sales were $1.4
billion in comparison to $1.6
billion in the prior-year quarter. Results were driven
primarily by lower volume in Titanium Technologies and lower volume
and price in Fluoroproducts, resulting in a 15 percent decrease in
net sales. Currency was a small headwind in the quarter.
Third quarter net income was $76
million, or $0.46 per diluted
share, inclusive of restructuring, asset related, and other charges
of $34 million. Adjusted EBITDA for
the third quarter 2019 was $248
million in comparison to $435
million in the previous year's third quarter, a result of
lower volumes and fixed cost under-absorption in Titanium
Technologies, lower margins in Fluoroproducts, and reduced F-Gas
quota sales.
Fluoroproducts
Fluoroproducts segment net sales in the
third quarter were $636 million in
comparison to $682 million in the
prior-year quarter. The continued impact of illegal imports of HFC
refrigerants into the EU, softer base refrigerants demand, and
macro-economic weakness more than offset the positive impact of
adoption of Opteon™ mobile refrigerants and the increased sales of
high-grade Fluoropolymers. Price and volume declined 4 percent and
2 percent, respectively, on a year-over-year basis. Segment
Adjusted EBITDA of $122 million
decreased 33 percent versus the prior-year quarter, primarily due
to lower net sales and lower F-Gas quota sales.
Chemical Solutions
Chemical Solutions segment net
sales in the third quarter were $140
million in comparison to $155
million in the prior-year quarter. Prices were lower
year-over-year primarily driven by mix and lower cost pass-throughs
in Performance Chemicals and Intermediates. Third quarter 2019
segment Adjusted EBITDA of $23
million decreased 4 percent versus the prior-year quarter,
reflecting price headwinds partially offset by increased other
income from licensing agreements.
Titanium Technologies
Titanium Technologies segment
net sales in the third quarter were $614
million in comparison to $791
million in the prior-year quarter. This decrease was a
result of lower volumes of Ti-Pure™ titanium dioxide on a
year-over-year basis, though volumes were up 10% sequentially as
buying patterns stabilized. Global average selling prices
were largely stable in comparison to last year's third quarter.
Segment Adjusted EBITDA was $137
million, in comparison to $268
million in last year's third quarter, driven mainly by lower
volumes of Ti-Pure™ titanium dioxide and fixed cost
under-absorption.
Corporate and Other
Corporate and Other in the third
quarter 2019 represented a $34
million offset to Adjusted EBITDA, versus a $39 million offset in the prior-year quarter.
This improvement was primarily attributable to lower
performance-related compensation expense and other general
administrative costs.
The company realized an Adjusted Effective Tax Rate of
approximately 16 percent for the quarter. The company expects
its Adjusted Effective Tax Rate for the full-year 2019 to be within
a range of 18 to 19 percent, reflecting the company's anticipated
geographic mix of earnings.
Liquidity
As of September 30,
2019, gross consolidated debt was $4.2 billion. Debt, net of $694 million cash, was $3.5 billion, resulting in a net leverage ratio
of approximately 3.1 times on a trailing twelve-month basis.
Cash provided by operating activities for the third quarter 2019
was $288 million, versus $342 million in the prior-year quarter. Capital
expenditures for the third quarter 2019 were $128 million, versus $116
million in last year's third quarter. Free Cash Flow for the
third quarter 2019 was $160 million
versus the prior-year quarter of $226
million.
Outlook
Mr. Vergnano concluded, "Looking ahead, we
anticipate softer economic activity as we head into 2020, but are
actively monitoring trade and other issues, which could change the
dynamic. The Chemours team continues to work hard to build deeper
relationships with our customers, through initiatives such as
Ti-Pure™ Value Stabilization and our application development work
in Fluoroproducts. I remain confident that our customers' success
will be our own, and investments in our customer offerings will
create value for our shareholders over time."
Conference Call
As previously announced, Chemours will
hold a conference call and webcast on Tuesday, November 5, 2019 at 8:30 AM EST. The webcast and additional
presentation materials can be accessed by visiting the Events
& Presentations page of Chemours' investor website,
investors.chemours.com. A webcast replay of the conference call
will be available on the Chemours investor website.
About The Chemours Company
The Chemours Company
(NYSE: CC) helps create a colorful, capable and cleaner world
through the power of chemistry. Chemours is a global leader
in fluoroproducts, chemical solutions, and titanium technologies,
providing its customers with solutions in a wide range of
industries with market-defining products, application expertise and
chemistry-based innovations. Chemours ingredients are found
in refrigeration and air conditioning, mining and general
industrial manufacturing, plastics and coatings. Our flagship
products include prominent brands such as Teflon™, Ti-Pure™,
Krytox™, Viton™, Opteon™, Freon™ and Nafion™. Chemours has
approximately 7,000 employees and 28 manufacturing sites serving
approximately 3,700 customers in North
America, Latin America,
Asia-Pacific and Europe. Chemours is headquartered in
Wilmington, Delaware and is listed
on the NYSE under the symbol CC. For more information please visit
chemours.com, or follow us on Twitter @Chemours, or
LinkedIn.
Non-GAAP Financial Measures
We prepare our financial
statements in accordance with Generally Accepted Accounting
Principles (GAAP). Within this press release, we may make reference
to Adjusted Net Income (Loss), Adjusted EPS, Adjusted EBITDA,
Adjusted EBITDA Margin, Free Cash Flow, Adjusted Effective Tax
Rate, Return on Invested Capital and Net Leverage Ratio which are
non-GAAP financial measures. The company includes these non-GAAP
financial measures because management believes they are useful to
investors in that they provide for greater transparency with
respect to supplemental information used by management in its
financial and operational decision making.
Management uses Adjusted Net Income (Loss), Adjusted EPS,
Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow, Adjusted
Effective Tax Rate, Return on Invested Capital and Net Leverage
Ratio to evaluate the company's performance excluding the impact of
certain noncash charges and other special items which we expect to
be infrequent in occurrence in order to have comparable financial
results to analyze changes in our underlying business from quarter
to quarter.
Accordingly, the company believes the presentation of these
non-GAAP financial measures, when used in conjunction with GAAP
financial measures, is a useful financial analysis tool that can
assist investors in assessing the company's operating performance
and underlying prospects. This analysis should not be considered in
isolation or as a substitute for analysis of our results as
reported under GAAP. This analysis, as well as the other
information in this press release, should be read in conjunction
with the company's financial statements and footnotes contained in
the documents that the company files with the U.S. Securities and
Exchange Commission. The non-GAAP financial measures used by the
company in this press release may be different from the methods
used by other companies. For more information on the non-GAAP
financial measures, please refer to the attached schedules or the
table, "Reconciliation of Non-GAAP Financial Measures to GAAP
Financial Measures" and materials posted to the company's website
at investors.chemours.com.
Forward-Looking Statements
This press release
contains forward-looking statements, within the meaning of the safe
harbor provisions of the U.S. Private Securities Litigation Reform
Act of 1995, which involve risks and uncertainties. Forward-looking
statements provide current expectations of future events based on
certain assumptions and include any statement that does not
directly relate to a historical or current fact. The words
"believe," "expect," "will," "anticipate," "plan," "estimate,"
"target," "project" and similar expressions, among others,
generally identify "forward-looking statements," which speak only
as of the date such statements were made. These forward-looking
statements may address, among other things, the outcome or
resolution of any pending or future environmental liabilities, the
commencement, outcome or resolution of any regulatory inquiry,
investigation or proceeding, the initiation, outcome or settlement
of any litigation, changes in environmental regulations in the U.S.
or other jurisdictions that affect demand for or adoption of our
products, anticipated future operating and financial performance,
business plans, prospects, targets, goals and commitments, capital
investments and projects, plans for dividends or share repurchases,
sufficiency or longevity of intellectual property protection, cost
savings targets, plans to increase profitability and growth, our
ability to make acquisitions, integrate acquired businesses or
assets into our operations, and achieve anticipated synergies or
cost savings, and our outlook for net sales, Adjusted EBITDA,
Adjusted EPS, Free Cash Flow, Adjusted Effective Tax Rate, and
Return on Invested Capital, all of which are subject to substantial
risks and uncertainties that could cause actual results to differ
materially from those expressed or implied by such statements.
Forward-looking statements are based on certain assumptions and
expectations of future events that may not be accurate or realized.
These statements are not guarantees of future performance.
Forward-looking statements also involve risks and uncertainties
that are beyond Chemours' control. Additionally, there may be other
risks and uncertainties that Chemours is unable to identify at this
time or that Chemours does not currently expect to have a material
impact on its business. Factors that could cause or contribute to
these differences include the risks, uncertainties and other
factors discussed in our filings with the U.S. Securities and
Exchange Commission, including in our Annual Report on Form 10-K
for the year ended December 31, 2018.
Chemours assumes no obligation to revise or update any
forward-looking statement for any reason, except as required by
law.
CONTACT:
INVESTORS
Jonathan Lock
VP, Corporate Development and Investor Relations
+1.302.773.2263
investor@chemours.com
NEWS MEDIA
David
Rosen
Executive and Financial Communications Manager
+1.302.773.2711
media@chemours.com
The Chemours
Company
Consolidated
Statements of Operations (Unaudited)
(Dollars in
millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
|
Nine Months Ended
September 30,
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
Net sales
|
|
$
|
1,390
|
|
|
$
|
1,628
|
|
|
$
|
4,173
|
|
|
$
|
5,174
|
|
Cost of goods
sold
|
|
|
1,096
|
|
|
|
1,151
|
|
|
|
3,260
|
|
|
|
3,603
|
|
Gross
profit
|
|
|
294
|
|
|
|
477
|
|
|
|
913
|
|
|
|
1,571
|
|
Selling, general, and
administrative expense
|
|
|
130
|
|
|
|
163
|
|
|
|
423
|
|
|
|
466
|
|
Research and
development expense
|
|
|
20
|
|
|
|
20
|
|
|
|
61
|
|
|
|
61
|
|
Restructuring,
asset-related, and other charges
|
|
|
34
|
|
|
|
12
|
|
|
|
49
|
|
|
|
32
|
|
Total other operating
expenses
|
|
|
184
|
|
|
|
195
|
|
|
|
533
|
|
|
|
559
|
|
Equity in earnings of
affiliates
|
|
|
9
|
|
|
|
10
|
|
|
|
25
|
|
|
|
32
|
|
Interest expense,
net
|
|
|
(53)
|
|
|
|
(47)
|
|
|
|
(156)
|
|
|
|
(148)
|
|
Loss on
extinguishment of debt
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(38)
|
|
Other income,
net
|
|
|
25
|
|
|
|
24
|
|
|
|
81
|
|
|
|
115
|
|
Income before
income taxes
|
|
|
91
|
|
|
|
269
|
|
|
|
330
|
|
|
|
973
|
|
Provision for
(benefit from) income taxes
|
|
|
15
|
|
|
|
(6)
|
|
|
|
65
|
|
|
|
119
|
|
Net
income
|
|
|
76
|
|
|
|
275
|
|
|
|
265
|
|
|
|
854
|
|
Less: Net income
attributable to non-controlling interests
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1
|
|
Net income
attributable to Chemours
|
|
$
|
76
|
|
|
$
|
275
|
|
|
$
|
265
|
|
|
$
|
853
|
|
Per share
data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share of common stock
|
|
$
|
0.46
|
|
|
$
|
1.56
|
|
|
$
|
1.60
|
|
|
$
|
4.77
|
|
Diluted earnings per
share of common stock
|
|
|
0.46
|
|
|
|
1.51
|
|
|
|
1.58
|
|
|
|
4.62
|
|
The Chemours
Company
Consolidated
Balance Sheets
(Dollars in
millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
September 30,
2019
|
|
|
December 31,
2018
|
|
Assets
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
694
|
|
|
$
|
1,201
|
|
Accounts and notes
receivable, net
|
|
|
832
|
|
|
|
861
|
|
Inventories
|
|
|
1,223
|
|
|
|
1,147
|
|
Prepaid expenses and
other
|
|
|
78
|
|
|
|
84
|
|
Total current
assets
|
|
|
2,827
|
|
|
|
3,293
|
|
Property, plant, and
equipment
|
|
|
9,274
|
|
|
|
8,992
|
|
Less: Accumulated
depreciation
|
|
|
(5,754)
|
|
|
|
(5,701)
|
|
Property, plant, and
equipment, net
|
|
|
3,520
|
|
|
|
3,291
|
|
Operating lease
right-of-use assets
|
|
|
307
|
|
|
|
—
|
|
Goodwill and other
intangible assets, net
|
|
|
176
|
|
|
|
181
|
|
Investments in
affiliates
|
|
|
184
|
|
|
|
160
|
|
Other
assets
|
|
|
442
|
|
|
|
437
|
|
Total
assets
|
|
$
|
7,456
|
|
|
$
|
7,362
|
|
Liabilities
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
948
|
|
|
$
|
1,137
|
|
Short-term and current
maturities of long-term debt
|
|
|
149
|
|
|
|
13
|
|
Other accrued
liabilities
|
|
|
546
|
|
|
|
559
|
|
Total current
liabilities
|
|
|
1,643
|
|
|
|
1,709
|
|
Long-term debt,
net
|
|
|
4,007
|
|
|
|
3,959
|
|
Operating lease
liabilities
|
|
|
254
|
|
|
|
—
|
|
Deferred income
taxes
|
|
|
208
|
|
|
|
217
|
|
Other
liabilities
|
|
|
501
|
|
|
|
457
|
|
Total
liabilities
|
|
|
6,613
|
|
|
|
6,342
|
|
Commitments and
contingent liabilities
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
Common stock (par
value $0.01 per share; 810,000,000 shares authorized; 188,811,686
shares issued and 163,492,451 shares outstanding at September 30,
2019; 187,204,567 shares issued and 170,780,474 shares outstanding
at December 31, 2018)
|
|
|
2
|
|
|
|
2
|
|
Treasury stock, at
cost (25,319,235 shares at September 30, 2019;
16,424,093 shares at
December 31, 2018)
|
|
|
(1,072)
|
|
|
|
(750)
|
|
Additional paid-in
capital
|
|
|
857
|
|
|
|
860
|
|
Retained
earnings
|
|
|
1,606
|
|
|
|
1,466
|
|
Accumulated other
comprehensive loss
|
|
|
(556)
|
|
|
|
(564)
|
|
Total Chemours
stockholders' equity
|
|
|
837
|
|
|
|
1,014
|
|
Non-controlling
interests
|
|
|
6
|
|
|
|
6
|
|
Total
equity
|
|
|
843
|
|
|
|
1,020
|
|
Total liabilities
and equity
|
|
$
|
7,456
|
|
|
$
|
7,362
|
|
The Chemours
Company
Consolidated
Statements of Cash Flows (Unaudited)
(Dollars in
millions)
|
|
|
|
|
|
|
Nine Months Ended
September 30,
|
|
|
|
2019
|
|
|
2018
|
|
Cash flows from
operating activities
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
265
|
|
|
$
|
854
|
|
Adjustments to
reconcile net income to cash provided by (used for) operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
232
|
|
|
|
213
|
|
Gain on sales of
assets and businesses
|
|
|
(11)
|
|
|
|
(45)
|
|
Equity in earnings of
affiliates, net
|
|
|
(24)
|
|
|
|
(4)
|
|
Loss on extinguishment
of debt
|
|
|
—
|
|
|
|
38
|
|
Amortization of debt
issuance costs and issue discounts
|
|
|
7
|
|
|
|
9
|
|
Deferred tax (benefit)
provision
|
|
|
(17)
|
|
|
|
3
|
|
Asset-related
charges
|
|
|
12
|
|
|
|
—
|
|
Stock-based
compensation expense
|
|
|
18
|
|
|
|
20
|
|
Net periodic pension
cost (income)
|
|
|
4
|
|
|
|
(7)
|
|
Defined benefit plan
contributions
|
|
|
(15)
|
|
|
|
(12)
|
|
Other operating
charges and credits, net
|
|
|
(2)
|
|
|
|
(11)
|
|
Decrease (increase) in
operating assets:
|
|
|
|
|
|
|
|
|
Accounts and notes
receivable, net
|
|
|
32
|
|
|
|
(87)
|
|
Inventories and other
operating assets
|
|
|
(46)
|
|
|
|
(154)
|
|
(Decrease) increase in
operating liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable and
other operating liabilities
|
|
|
(205)
|
|
|
|
64
|
|
Cash provided by
operating activities
|
|
|
250
|
|
|
|
881
|
|
Cash flows from
investing activities
|
|
|
|
|
|
|
|
|
Purchases of
property, plant, and equipment
|
|
|
(385)
|
|
|
|
(344)
|
|
Acquisition of
business, net
|
|
|
(10)
|
|
|
|
(37)
|
|
Proceeds from sales
of assets and businesses, net
|
|
|
7
|
|
|
|
46
|
|
Proceeds from life
insurance policies
|
|
|
1
|
|
|
|
—
|
|
Foreign exchange
contract settlements, net
|
|
|
—
|
|
|
|
8
|
|
Cash used for
investing activities
|
|
|
(387)
|
|
|
|
(327)
|
|
Cash flows from
financing activities
|
|
|
|
|
|
|
|
|
Proceeds from
issuance of debt, net
|
|
|
—
|
|
|
|
520
|
|
Proceeds from
revolving loan
|
|
|
150
|
|
|
|
—
|
|
Repayments on
revolving loan
|
|
|
(150)
|
|
|
|
—
|
|
Proceeds from
accounts receivable securitization facility
|
|
|
125
|
|
|
|
—
|
|
Debt
repayments
|
|
|
(15)
|
|
|
|
(675)
|
|
Payments related to
extinguishment of debt
|
|
|
—
|
|
|
|
(29)
|
|
Payments of debt
issuance costs
|
|
|
—
|
|
|
|
(12)
|
|
Payments on finance
leases
|
|
|
(2)
|
|
|
|
—
|
|
Purchases of treasury
stock, at cost
|
|
|
(322)
|
|
|
|
(520)
|
|
Proceeds from
exercised stock options, net
|
|
|
8
|
|
|
|
15
|
|
Payments related to
tax withholdings on vested stock awards
|
|
|
(30)
|
|
|
|
(16)
|
|
Payments of
dividends
|
|
|
(124)
|
|
|
|
(106)
|
|
Cash used for
financing activities
|
|
|
(360)
|
|
|
|
(823)
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
|
(10)
|
|
|
|
(12)
|
|
Decrease in cash
and cash equivalents
|
|
|
(507)
|
|
|
|
(281)
|
|
Cash and cash
equivalents at January 1,
|
|
|
1,201
|
|
|
|
1,556
|
|
Cash and cash
equivalents at September 30,
|
|
$
|
694
|
|
|
$
|
1,275
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash
flows information
|
|
|
|
|
|
|
|
|
Non-cash investing
and financing activities:
|
|
|
|
|
|
|
|
|
Changes in property,
plant, and equipment included in accounts payable
|
|
$
|
68
|
|
|
$
|
12
|
|
Obligations incurred
under build-to-suit lease arrangement
|
|
|
35
|
|
|
|
41
|
|
Purchases of treasury
stock not settled by period-end
|
|
|
—
|
|
|
|
10
|
|
Non-cash financing
arrangements
|
|
|
11
|
|
|
|
—
|
|
Deferred payments
related to acquisition of business
|
|
|
15
|
|
|
|
—
|
|
The Chemours
Company
Segment Financial
and Operating Data (Unaudited)
(Dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Net
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
Ended
|
|
|
Sequential
|
|
|
September
30,
|
|
|
Increase
/
|
|
|
June
30,
|
|
|
Increase
/
|
|
|
2019
|
|
|
2018
|
|
|
(Decrease)
|
|
|
2019
|
|
|
(Decrease)
|
|
Fluoroproducts
|
$
|
|
636
|
|
|
$
|
|
682
|
|
|
$
|
|
(46)
|
|
|
$
|
|
711
|
|
|
$
|
|
(75)
|
|
Chemical
Solutions
|
|
|
140
|
|
|
|
|
155
|
|
|
|
|
(15)
|
|
|
|
|
130
|
|
|
|
|
10
|
|
Titanium
Technologies
|
|
|
614
|
|
|
|
|
791
|
|
|
|
|
(177)
|
|
|
|
|
567
|
|
|
|
|
47
|
|
Total Net
Sales
|
$
|
|
1,390
|
|
|
$
|
|
1,628
|
|
|
$
|
|
(238)
|
|
|
$
|
|
1,408
|
|
|
$
|
|
(18)
|
|
Segment
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
Ended
|
|
|
Sequential
|
|
|
September
30,
|
|
|
Increase
/
|
|
|
June
30,
|
|
|
Increase
/
|
|
|
2019
|
|
|
2018
|
|
|
(Decrease)
|
|
|
2019
|
|
|
(Decrease)
|
|
Fluoroproducts
|
$
|
|
122
|
|
|
$
|
|
182
|
|
|
$
|
|
(60)
|
|
|
$
|
|
180
|
|
|
$
|
|
(58)
|
|
Chemical
Solutions
|
|
|
23
|
|
|
|
|
24
|
|
|
|
|
(1)
|
|
|
|
|
16
|
|
|
|
|
7
|
|
Titanium
Technologies
|
|
|
137
|
|
|
|
|
268
|
|
|
|
|
(131)
|
|
|
|
|
127
|
|
|
|
|
10
|
|
Corporate and
Other
|
|
|
(34)
|
|
|
|
|
(39)
|
|
|
|
|
5
|
|
|
|
|
(40)
|
|
|
|
|
6
|
|
Total Adjusted
EBITDA
|
$
|
|
248
|
|
|
$
|
|
435
|
|
|
$
|
|
(187)
|
|
|
$
|
|
283
|
|
|
$
|
|
(35)
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
Margin
|
18%
|
|
|
27%
|
|
|
|
|
|
20%
|
|
|
|
|
Quarterly Change
in Net Sales from the three months ended September 30,
2018
|
|
|
|
Percentage
|
|
Percentage Change
Due To
|
|
|
September 30,
2019
Net
Sales
|
|
|
Change
vs.
September 30,
2018
|
|
Local
Price
|
|
Volume
|
|
Currency
Effect
|
|
Total
Company
|
$
|
|
1,390
|
|
|
|
(15)
|
%
|
|
(3)
|
%
|
|
(11)
|
%
|
|
(1)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fluoroproducts
|
$
|
|
636
|
|
|
|
(7)
|
%
|
|
(4)
|
%
|
|
(2)
|
%
|
|
(1)
|
%
|
Chemical
Solutions
|
|
|
140
|
|
|
|
(10)
|
%
|
|
(11)
|
%
|
|
1
|
%
|
|
—
|
%
|
Titanium
Technologies
|
|
|
614
|
|
|
|
(22)
|
%
|
|
(2)
|
%
|
|
(20)
|
%
|
|
—
|
%
|
Quarterly Change
in Net Sales from the three months ended June 30,
2019
|
|
|
|
Percentage
|
|
Percentage Change
Due To
|
|
|
September 30,
2019
Net
Sales
|
|
|
Change
vs.
June 30,
2019
|
|
Local
Price
|
|
Volume
|
|
Currency
Effect
|
|
Total
Company
|
$
|
|
1,390
|
|
|
|
(1)
|
%
|
|
(2)
|
%
|
|
1
|
%
|
|
—
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fluoroproducts
|
$
|
|
636
|
|
|
|
(11)
|
%
|
|
(1)
|
%
|
|
(10)
|
%
|
|
—
|
%
|
Chemical
Solutions
|
|
|
140
|
|
|
|
8
|
%
|
|
(4)
|
%
|
|
12
|
%
|
|
—
|
%
|
Titanium
Technologies
|
|
|
614
|
|
|
|
8
|
%
|
|
(2)
|
%
|
|
10
|
%
|
|
—
|
%
|
The Chemours Company
Reconciliation
of Non-GAAP Financial Measures to GAAP Financial Measures
(Unaudited)
(Dollars in millions)
Adjusted EBITDA and Adjusted Net Income to
GAAP Net Income Reconciliation
Adjusted earnings before interest, taxes, depreciation, and
amortization ("Adjusted EBITDA") is defined as income (loss) before
income taxes, excluding the following items: interest expense,
depreciation, and amortization; non-operating pension and other
post-retirement employee benefit costs, which represent the
components of net periodic pension (income) costs excluding the
service cost component; exchange (gains) losses included in other
income (expense), net; restructuring, asset-related, and other
charges; asset impairments; (gains) losses on sale of business or
assets; and, other items not considered indicative of the Company's
ongoing operational performance and expected to occur infrequently.
Adjusted Net Income is defined as net income (loss) attributable to
Chemours, adjusted for items excluded from Adjusted EBITDA, except
interest expense, depreciation, amortization, and certain provision
for (benefit from) income tax amounts.
|
|
Three Months
Ended
|
|
|
Nine Months
Ended
|
|
|
|
September
30,
|
|
|
June
30,
|
|
|
September
30,
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2019
|
|
|
2018
|
|
Net income
attributable to Chemours
|
|
$
|
|
76
|
|
|
$
|
275
|
|
|
$
|
96
|
|
|
$
|
|
265
|
|
|
$
|
853
|
|
Non-operating pension
and other post-retirement employee benefit cost (income)
|
|
|
|
1
|
|
|
|
|
(4)
|
|
|
|
|
(3)
|
|
|
|
|
(5)
|
|
|
|
|
(18)
|
|
Exchange (gains)
losses, net
|
|
|
|
(5)
|
|
|
|
|
6
|
|
|
|
|
9
|
|
|
|
|
(2)
|
|
|
|
|
4
|
|
Restructuring,
asset-related, and other charges
|
|
|
|
34
|
|
|
|
|
12
|
|
|
|
|
7
|
|
|
|
|
49
|
|
|
|
|
32
|
|
Loss on
extinguishment of debt
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
38
|
|
Gain on sales of
assets and businesses (1)
|
|
|
|
(9)
|
|
|
|
|
—
|
|
|
|
|
(2)
|
|
|
|
|
(11)
|
|
|
|
|
(45)
|
|
Transaction
costs
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
1
|
|
|
|
|
1
|
|
|
|
|
9
|
|
Legal charges
(2)
|
|
|
|
5
|
|
|
|
|
34
|
|
|
|
|
8
|
|
|
|
|
43
|
|
|
|
|
45
|
|
Adjustments made to
income taxes (3)
|
|
|
|
3
|
|
|
|
|
(41)
|
|
|
|
|
7
|
|
|
|
|
5
|
|
|
|
|
(54)
|
|
Benefit from income
taxes relating to reconciling items (4)
|
|
|
|
(7)
|
|
|
|
|
(11)
|
|
|
|
|
(3)
|
|
|
|
|
(18)
|
|
|
|
|
(15)
|
|
Adjusted Net
Income
|
|
|
|
98
|
|
|
|
|
271
|
|
|
|
|
120
|
|
|
|
|
327
|
|
|
|
|
849
|
|
Net income
attributable to non-controlling interests
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
1
|
|
Interest expense,
net
|
|
|
|
53
|
|
|
|
|
47
|
|
|
|
|
52
|
|
|
|
|
156
|
|
|
|
|
148
|
|
Depreciation and
amortization
|
|
|
|
78
|
|
|
|
|
71
|
|
|
|
|
78
|
|
|
|
|
232
|
|
|
|
|
213
|
|
All remaining
provision for income taxes
|
|
|
|
19
|
|
|
|
|
46
|
|
|
|
|
33
|
|
|
|
|
78
|
|
|
|
|
188
|
|
Adjusted
EBITDA
|
|
$
|
|
248
|
|
|
$
|
|
435
|
|
|
$
|
|
283
|
|
|
$
|
|
793
|
|
|
$
|
|
1,399
|
|
(1)
|
For the three and
nine months ended September 30, 2019, the Company recognized a
non-cash gain of $9 million related to the sale of the Company's
Repauno, New Jersey site. For the nine months ended September 30,
2018, gain on sales of assets and businesses included a $42 million
gain associated with the sale of our Linden, New Jersey
site.
|
(2)
|
Includes litigation
settlements, PFOA drinking water treatment accruals, and other
legal charges. For the three and nine months ended September 30,
2019, legal charges included $2 million and $36 million in
additional charges for the approved final Consent Order associated
with certain matters at our Fayetteville, North Carolina facility,
which are discussed in further detail in "Note 19 – Commitments and
Contingent Liabilities" to the Interim Consolidated Financial
Statements.
|
(3)
|
Includes the removal
of certain discrete income tax impacts within the Company's
provision for income taxes, such as the benefit from windfalls on
its share-based payments, historical valuation allowance
adjustments, unrealized gains and losses on foreign exchange rate
changes, and other discrete income tax items.
|
(4)
|
The income tax
impacts included in this caption are determined using the
applicable rates in the taxing jurisdictions in which income or
expense occurred and represents both current and deferred income
tax expense or benefit based on the nature of the non-GAAP
financial measure.
|
The Chemours Company
Reconciliation
of Non-GAAP Financial Measures to GAAP Financial Measures
(Unaudited)
(Dollars in millions, except per share
amounts)
Adjusted Earnings per Share to GAAP Earnings
per Share Reconciliation
Adjusted earnings per share ("EPS") is calculated by dividing
Adjusted Net Income by the weighted-average number of common shares
outstanding. Diluted Adjusted EPS accounts for the dilutive impact
of stock-based compensation awards, which includes unvested
restricted shares. Diluted Adjusted EPS considers the impact of
potentially-dilutive securities, except in periods in which there
is a loss because the inclusion of the potentially-dilutive
securities would have an anti-dilutive effect.
|
|
Three Months
Ended
|
|
|
Nine Months
Ended
|
|
|
|
September
30,
|
|
|
June
30,
|
|
|
September
30,
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2019
|
|
|
2018
|
|
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Chemours
|
|
$
|
|
76
|
|
|
$
|
|
275
|
|
|
$
|
|
96
|
|
|
$
|
|
265
|
|
|
$
|
|
853
|
|
Adjusted Net
Income
|
|
|
|
98
|
|
|
|
|
271
|
|
|
|
|
120
|
|
|
|
|
327
|
|
|
|
|
849
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of common shares outstanding - basic
|
|
|
|
163,815,483
|
|
|
|
|
176,489,881
|
|
|
|
|
164,118,816
|
|
|
|
|
165,254,084
|
|
|
|
|
178,765,676
|
|
Dilutive effect of the
Company's employee compensation plans
|
|
|
|
1,325,380
|
|
|
|
|
5,387,244
|
|
|
|
|
2,822,810
|
|
|
|
|
2,780,874
|
|
|
|
|
5,891,072
|
|
Weighted-average
number of common shares outstanding - diluted
|
|
|
|
165,140,863
|
|
|
|
|
181,877,125
|
|
|
|
|
166,941,626
|
|
|
|
|
168,034,958
|
|
|
|
|
184,656,748
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share -
basic
|
|
$
|
|
0.46
|
|
|
$
|
|
1.56
|
|
|
$
|
|
0.58
|
|
|
$
|
|
1.60
|
|
|
$
|
|
4.77
|
|
Earnings per share -
diluted
|
|
|
|
0.46
|
|
|
|
|
1.51
|
|
|
|
|
0.57
|
|
|
|
|
1.58
|
|
|
|
|
4.62
|
|
Adjusted basic
earnings per share of common stock
|
|
|
|
0.60
|
|
|
|
|
1.54
|
|
|
|
|
0.73
|
|
|
|
|
1.97
|
|
|
|
|
4.75
|
|
Adjusted diluted
earnings per share of common stock
|
|
|
|
0.59
|
|
|
|
|
1.49
|
|
|
|
|
0.72
|
|
|
|
|
1.94
|
|
|
|
|
4.60
|
|
2019 Estimated
Adjusted EBITDA and Estimated Adjusted EPS to Estimated GAAP Net
Income Reconciliation (*)
|
|
|
|
|
|
|
Year Ended
December 31, 2019
|
|
|
|
Low
|
|
|
High
|
|
Net income
attributable to Chemours
|
|
$
|
357
|
|
|
$
|
466
|
|
Restructuring,
asset-related, and other charges
|
|
|
40
|
|
|
|
50
|
|
Adjusted Net
Income
|
|
|
397
|
|
|
|
516
|
|
Interest expense,
net
|
|
|
207
|
|
|
|
212
|
|
Depreciation and
amortization
|
|
|
309
|
|
|
|
309
|
|
Provision for income
taxes
|
|
|
87
|
|
|
|
113
|
|
Adjusted
EBITDA
|
|
$
|
1,000
|
|
|
$
|
1,150
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of common shares outstanding - basic (1)
|
|
|
164.2
|
|
|
|
164.2
|
|
Dilutive effect of
the Company's employee compensation plans (1,2)
|
|
|
3.5
|
|
|
|
3.5
|
|
Weighted-average
number of common shares outstanding - diluted (1,2)
|
|
|
167.7
|
|
|
|
167.7
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share of common stock
|
|
$
|
2.17
|
|
|
$
|
2.84
|
|
Diluted earnings per
share of common stock (2)
|
|
|
2.13
|
|
|
|
2.78
|
|
Adjusted basic
earnings per share of common stock
|
|
|
2.42
|
|
|
|
3.14
|
|
Adjusted diluted
earnings per share of common stock (2)
|
|
|
2.37
|
|
|
|
3.08
|
|
(1)
|
The Company's
estimates for the weighted-average number of common shares
outstanding - basic and diluted reflect actual results through
September 30, 2019 which are carried forward for the projection
period and updated for the estimated impacts of the Company's 2019
share repurchases.
|
(2)
|
Diluted earnings per
share is calculated using net income available to common
shareholders divided by diluted weighted-average common shares
outstanding during each period, which includes unvested restricted
shares. Diluted earnings per share considers the impact of
potentially dilutive securities except in periods in which there is
a loss because the inclusion of the potential common shares would
have an anti-dilutive effect.
|
(*)
|
The Company's
estimates reflect its current visibility and expectations based on
market factors, such as currency movements, macro-economic factors,
and end-market demand. Actual results could differ materially from
these current estimates.
|
The Chemours
Company
Reconciliation of
Non-GAAP Financial Measures to GAAP Financial Measures
(Unaudited)
(Dollars in
millions)
|
|
Free Cash Flows to
GAAP Cash Flow Provided by Operating Activities
Reconciliation
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Nine Months
Ended
|
|
|
|
September
30,
|
|
|
June
30,
|
|
|
September
30,
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2019
|
|
|
2018
|
|
Cash flow provided by
operating activities
|
|
$
|
|
288
|
|
|
$
|
|
342
|
|
|
$
|
|
7
|
|
|
$
|
|
250
|
|
|
$
|
|
881
|
|
Less: Purchases of
property, plant, and equipment
|
|
|
|
(128)
|
|
|
|
|
(116)
|
|
|
|
|
(124)
|
|
|
|
|
(385)
|
|
|
|
|
(344)
|
|
Free Cash
Flows
|
|
$
|
|
160
|
|
|
$
|
|
226
|
|
|
$
|
|
(117)
|
|
|
$
|
|
(135)
|
|
|
$
|
|
537
|
|
Free Cash Flows is defined as cash flow provided by (used for)
operating activities, less purchases of property, plant, and
equipment as shown in the consolidated statements of cash
flows.
2019 Estimated
Free Cash Flow to GAAP Cash Flow Provided by Operating Activities
Reconciliation (*)
|
|
|
|
|
|
(Estimated)
|
|
|
Year Ended
December 31,
|
|
|
2019
|
Cash flow provided by
operating activities
|
|
$
|
~ 600
|
Less: Purchases of
property, plant, and equipment
|
|
|
~ (500)
|
Free Cash
Flows
|
|
$
|
~ 100
|
(*)
|
The Company's
estimates reflect its current visibility and expectations based on
market factors, such as currency movements, macro-economic factors,
and end-market demand. Actual results could differ materially from
these current estimates.
|
Return on Invested Capital
Reconciliation
Return on Invested Capital ("ROIC") is defined as Adjusted
EBITDA, less depreciation and amortization ("Adjusted EBIT"),
divided by the average of invested capital, which amounts to net
debt, or debt less cash and cash equivalents, plus equity.
|
|
Period Ended
September 30,
|
|
|
|
2019
|
|
|
2018
|
|
Adjusted EBITDA
(1)
|
|
$
|
1,134
|
|
|
$
|
1,794
|
|
Less: Depreciation
and amortization (1)
|
|
|
(303)
|
|
|
|
(281)
|
|
Adjusted
EBIT
|
|
|
831
|
|
|
|
1,513
|
|
|
|
|
|
|
|
|
|
|
Total debt
|
|
|
4,156
|
|
|
|
3,999
|
|
Total
equity
|
|
|
843
|
|
|
|
1,146
|
|
Less: Cash and cash
equivalents
|
|
|
(694)
|
|
|
|
(1,275)
|
|
Invested capital,
net
|
|
$
|
4,305
|
|
|
$
|
3,870
|
|
|
|
|
|
|
|
|
|
|
Average invested
capital (2)
|
|
$
|
4,094
|
|
|
$
|
3,637
|
|
|
|
|
|
|
|
|
|
|
Return on Invested
Capital
|
|
|
20.3
|
%
|
|
|
41.6
|
%
|
(1)
|
Based on amounts for
the trailing 12 months ended September 30, 2019 and 2018.
Reconciliations of Adjusted EBITDA to net income (loss)
attributable to Chemours are provided on a quarterly basis. See the
preceding table for the reconciliation of Adjusted EBITDA to net
income attributable to Chemours for the three and nine months ended
September 30, 2019 and 2018.
|
(2)
|
Average invested
capital is based on a five-quarter trailing average of invested
capital, net.
|
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SOURCE The Chemours Company