WILMINGTON, Del., May 5, 2020 /PRNewswire/ --
First Quarter 2020 Highlights
- Net Sales of $1.3 billion
- Net Income of $100 million, with
EPS of $0.61
- Adjusted Net Income of $118
million, with Adjusted EPS of $0.71
- Adjusted EBITDA of $257
million
- On April 28th, the
company's board of directors approved a Q2 dividend of $0.25 per share, consistent with the prior
quarter
Update on COVID-19 Response
- Enacted comprehensive measures to protect the health and
well-being of Chemours' employees worldwide
- All Chemours plants currently operating with minimal impact
from COVID-19
- Launching a program to reduce FY 2020 costs by $160 million to increase financial
flexibility
- Reducing FY 2020 CAPEX by $125
million, from $400 million to
$275 million
- Preserving strong balance sheet, ample liquidity of
$1.4 billion with no near-term senior
debt maturities
- Withdrawing FY 2020 guidance due to current demand uncertainty,
driven by COVID-19
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 first quarter 2020 and its response to the COVID-19
pandemic.
"Our Q1 results were consistent with our expectations thanks, in
part, to improved operating performance across our network.
At the same time, we did begin to feel the early impact of COVID-19
in some areas of the business," said Chemours President and CEO
Mark Vergnano. "We are laser focused
on the safety of our employees and the support of our customers. I
am proud to report that our quick implementation of health
screening procedures and procurement of additional protective
equipment has allowed us to operate our manufacturing facilities
with minimal coronavirus-related disruption. In addition, we have
enacted a broad set of initiatives to reduce costs that will help
improve our financial flexibility and enable us to promptly respond
to changing conditions in the near term."
First quarter 2020 net sales were $1.3
billion in comparison to $1.4
billion in the prior-year first quarter. Results were driven
primarily by higher volume in Titanium Technologies, more than
offset by lower volume in Fluoroproducts and lower global average
prices across all segments. First quarter net income was
$100 million, or $0.61 per diluted share. Adjusted Net Income was
$118 million, with Adjusted EPS of
$0.71 up 8% and 13% respectively from
the prior year. Adjusted EBITDA for the first quarter 2020 was
$257 million in comparison to
$262 million in the previous year
first quarter, a result of lower F-Gas quota sales and prices,
partially offset by reduced costs year-over-year.
Fluoroproducts
In the first quarter 2020,
Fluoroproducts segment net sales were $600
million in comparison to $687
million in the prior-year. Softer demand was primarily
driven by the impact of COVID-19 in Asia
Pacific and several end markets globally, resulting in lower
volumes versus last year's first quarter. Average price was down 4
percent on a year-over-year basis. Segment Adjusted EBITDA of
$140 million decreased 12 percent
versus the prior-year quarter, negatively impacted by limited F-gas
quota sales due to illegal imports of HFC refrigerants into the EU.
This was partially offset by the improved efficiency from the
Corpus Christi Opteon™ facility ramp up, lower costs due to
improved operational execution and cost reductions across the
business. Margins improved sequentially from 19% in the
fourth quarter 2019 to 23% in the first quarter 2020.
Chemical Solutions
Chemical Solutions segment net
sales were $92 million, a 31 percent
decrease versus the prior-year first quarter. Volumes were lower
year-over-year primarily driven by the Methylamines and
Methylamides business divestiture in the fourth quarter 2019. Lower
average prices were driven by lower raw material price
pass-throughs and regional customer mix. Adjusted EBITDA of
$15 million was flat in comparison to
the prior-year quarter, reflecting a 500 bps improvement in margins
to 16% from 11% in the prior-year.
Titanium Technologies
Titanium Technologies segment
net sales in the first quarter were $613
million, up 10% in comparison to the prior-year quarter.
Volumes improved 19% on year-over-year basis and 2% on a sequential
basis. The higher volume of Ti-Pure™ titanium dioxide was driven by
a combination of steady demand and expected market share regain in
plastics. Global average selling prices declined by 2% sequentially
and 8% year-over-year. Segment Adjusted EBITDA increased by 10% to
$138 million, in comparison to
$126 million in last year's first
quarter. Margins improved sequentially from 19% in the fourth
quarter 2019 to 23% in the first quarter 2020 reflecting improved
fixed cost absorption.
Corporate and Other
Corporate and Other in the first
quarter 2020 represented a $36
million offset to Adjusted EBITDA, versus a $38 million offset in the prior-year quarter.
This decrease was primarily attributable to lower external
spend.
The company realized an Adjusted Effective Tax Rate of
approximately 5 percent for the quarter.
Liquidity
As of March 31,
2020, consolidated gross debt was $4.1 billion. Debt, net of $714 million cash, was $3.4 billion, resulting in a net leverage ratio
of approximately 3.3 times on a trailing twelve-month Adjusted
EBITDA basis. Total liquidity was $1.4
billion, comprised of $714
million of cash and $699
million of revolver capacity.
Cash provided by operating activities for the first quarter of
2020 was $44 million, versus
$(44) million in the prior-year
quarter. Capital expenditures for the first quarter 2020 were
$106 million, versus $133 million in last year's first quarter. Free
Cash Flow for the first quarter 2020 was a $62 million outflow versus the prior-year quarter
of a $177 million outflow.
As previously announced, the company drew down $300 million of the revolving credit facility on
April 8, 2020 as a precautionary
action. The repayment of these borrowings is expected to occur when
the uncertainty in the global markets subsides.
Outlook
Vergnano said: "In light of the uncertainty
created by this pandemic, we are withdrawing our full-year 2020
guidance. However, Chemours is quickly taking steps to best weather
the current conditions, including protocols to safeguard the health
and well-being of our employees as COVID-19 runs its
course. At the same time, we have taken decisive action to
reduce FY 2020 costs by reducing overhead, discretionary spend, and
CAPEX. The entire Chemours team is fully engaged to serve our
customers, render aid in our communities around the world, and
assist in the fight against COVID-19."
Conference Call
As previously announced, Chemours will
hold a conference call and webcast on Wednesday, May 6, 2020 at 8:30 AM EDT. 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) is a global leader in titanium technologies,
fluoroproducts, and chemical solutions, 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 plastics and coatings,
refrigeration and air conditioning, mining, and general industrial
manufacturing. Our flagship products include prominent brands such
as Teflon™, Ti-Pure™, Krytox™, Viton™, Opteon™, Freon™ and Nafion™.
In 2019, Chemours was named to Newsweek's list of America's Most
Responsible Companies. The company has approximately 7,000
employees and 30 manufacturing sites serving approximately 3,700
customers in over 120 countries. Chemours is headquartered in
Wilmington, Delaware and is listed
on the NYSE under the symbol CC.
For more information, we invite you to
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
reductions or 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, 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. In addition, the current
COVID-19 pandemic has significantly impacted the national and
global economy and commodity and financial markets. The full extent
and impact of the pandemic is unknown and to date has included
extreme volatility in financial and commodity markets, a
significant slowdown in economic activity, and increased
predictions of a global recession. The public and private sector
response has led to significant restrictions on travel, temporary
business closures, quarantines, stock market volatility, and a
general reduction in consumer and commercial activity globally.
Matters outside our control have affected our business and
operations and may or may continue to limit travel of employees to
our business units domestically and internationally, adversely
affect the health and welfare of our personnel, significantly
reduce the demand for our products, hinder our ability to provide
goods and services to customers, cause disruptions in our supply
chains, adversely affect our business partners or cause other
unpredictable events. 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 Quarterly Report on Form 10-Q for the
quarter ended March 31, 2020 and in
our Annual Report on Form 10-K for the year ended December 31, 2019. 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
Global Leader, Media Relations and Strategic Communications
+1.302.773.2711
media@chemours.com
The Chemours
Company
Interim
Consolidated Statements of Operations (Unaudited)
(Dollars in
millions, except per share amounts)
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
2020
|
|
|
2019
|
|
Net sales
|
|
$
|
1,305
|
|
|
$
|
1,376
|
|
Cost of goods
sold
|
|
|
1,007
|
|
|
|
1,080
|
|
Gross
profit
|
|
|
298
|
|
|
|
296
|
|
Selling, general, and
administrative expense
|
|
|
125
|
|
|
|
156
|
|
Research and
development expense
|
|
|
24
|
|
|
|
22
|
|
Restructuring,
asset-related, and other charges
|
|
|
11
|
|
|
|
8
|
|
Total other operating
expenses
|
|
|
160
|
|
|
|
186
|
|
Equity in earnings of
affiliates
|
|
|
8
|
|
|
|
8
|
|
Interest expense,
net
|
|
|
(54)
|
|
|
|
(51)
|
|
Other (expense)
income, net
|
|
|
(15)
|
|
|
|
40
|
|
Income before
income taxes
|
|
|
77
|
|
|
|
107
|
|
(Benefit from)
provision for income taxes
|
|
|
(23)
|
|
|
|
13
|
|
Net
income
|
|
|
100
|
|
|
|
94
|
|
Net income
attributable to Chemours
|
|
$
|
100
|
|
|
$
|
94
|
|
Per share
data
|
|
|
|
|
|
|
|
|
Basic earnings per
share of common stock
|
|
$
|
0.61
|
|
|
$
|
0.56
|
|
Diluted earnings per
share of common stock
|
|
|
0.61
|
|
|
|
0.55
|
|
The Chemours
Company
Interim
Consolidated Balance Sheets
(Dollars in
millions, except per share amounts)
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
March 31, 2020
|
|
|
December 31,
2019
|
|
Assets
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
714
|
|
|
$
|
943
|
|
Accounts and notes
receivable, net
|
|
|
681
|
|
|
|
674
|
|
Inventories
|
|
|
1,114
|
|
|
|
1,079
|
|
Prepaid expenses and
other
|
|
|
82
|
|
|
|
81
|
|
Total current
assets
|
|
|
2,591
|
|
|
|
2,777
|
|
Property, plant, and
equipment
|
|
|
9,214
|
|
|
|
9,413
|
|
Less: Accumulated
depreciation
|
|
|
(5,770)
|
|
|
|
(5,854)
|
|
Property, plant, and
equipment, net
|
|
|
3,444
|
|
|
|
3,559
|
|
Operating lease
right-of-use assets
|
|
|
281
|
|
|
|
294
|
|
Goodwill and other
intangible assets, net
|
|
|
172
|
|
|
|
174
|
|
Investments in
affiliates
|
|
|
167
|
|
|
|
162
|
|
Other
assets
|
|
|
293
|
|
|
|
292
|
|
Total
assets
|
|
$
|
6,948
|
|
|
$
|
7,258
|
|
Liabilities
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
841
|
|
|
$
|
923
|
|
Short-term and current
maturities of long-term debt
|
|
|
22
|
|
|
|
134
|
|
Other accrued
liabilities
|
|
|
480
|
|
|
|
484
|
|
Total current
liabilities
|
|
|
1,343
|
|
|
|
1,541
|
|
Long-term debt,
net
|
|
|
4,012
|
|
|
|
4,026
|
|
Operating lease
liabilities
|
|
|
233
|
|
|
|
245
|
|
Deferred income
taxes
|
|
|
88
|
|
|
|
118
|
|
Other
liabilities
|
|
|
611
|
|
|
|
633
|
|
Total
liabilities
|
|
|
6,287
|
|
|
|
6,563
|
|
Commitments and
contingent liabilities
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
Common stock (par
value $0.01 per share; 810,000,000 shares authorized; 189,537,718
shares issued and 164,218,483 shares outstanding at March 31, 2020;
188,893,478 shares issued and 163,574,243 shares outstanding at
December 31, 2019)
|
|
|
2
|
|
|
|
2
|
|
Treasury stock, at
cost (25,319,235 shares at March 31, 2020
and December 31,
2019)
|
|
|
(1,072)
|
|
|
|
(1,072)
|
|
Additional paid-in
capital
|
|
|
870
|
|
|
|
859
|
|
Retained
earnings
|
|
|
1,308
|
|
|
|
1,249
|
|
Accumulated other
comprehensive loss
|
|
|
(453)
|
|
|
|
(349)
|
|
Total Chemours
stockholders' equity
|
|
|
655
|
|
|
|
689
|
|
Non-controlling
interests
|
|
|
6
|
|
|
|
6
|
|
Total
equity
|
|
|
661
|
|
|
|
695
|
|
Total liabilities
and equity
|
|
$
|
6,948
|
|
|
$
|
7,258
|
|
The Chemours
Company
Interim
Consolidated Statements of Cash Flows (Unaudited)
(Dollars in
millions)
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
2020
|
|
|
2019
|
|
Cash flows from
operating activities
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
100
|
|
|
$
|
94
|
|
Adjustments to
reconcile net income to cash provided by (used for) operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
79
|
|
|
|
76
|
|
Equity in earnings of
affiliates, net
|
|
|
(4)
|
|
|
|
(7)
|
|
Amortization of debt
issuance costs and issue discounts
|
|
|
2
|
|
|
|
3
|
|
Deferred tax
benefit
|
|
|
(43)
|
|
|
|
(7)
|
|
Asset-related
charges
|
|
|
1
|
|
|
|
—
|
|
Stock-based
compensation expense
|
|
|
8
|
|
|
|
8
|
|
Net periodic pension
cost
|
|
|
3
|
|
|
|
1
|
|
Defined benefit plan
contributions
|
|
|
(8)
|
|
|
|
(6)
|
|
Other operating
charges and credits, net
|
|
|
3
|
|
|
|
4
|
|
Decrease (increase) in
operating assets:
|
|
|
|
|
|
|
|
|
Accounts and notes
receivable, net
|
|
|
(11)
|
|
|
|
16
|
|
Inventories and other
operating assets
|
|
|
(42)
|
|
|
|
(49)
|
|
(Decrease) increase in
operating liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable and
other operating liabilities
|
|
|
(44)
|
|
|
|
(177)
|
|
Cash provided by (used
for) operating activities
|
|
|
44
|
|
|
|
(44)
|
|
Cash flows from
investing activities
|
|
|
|
|
|
|
|
|
Purchases of
property, plant, and equipment
|
|
|
(106)
|
|
|
|
(133)
|
|
Foreign exchange
contract settlements, net
|
|
|
(6)
|
|
|
|
(1)
|
|
Cash used for
investing activities
|
|
|
(112)
|
|
|
|
(134)
|
|
Cash flows from
financing activities
|
|
|
|
|
|
|
|
|
Proceeds from
accounts receivable securitization facility
|
|
|
12
|
|
|
|
—
|
|
Debt
repayments
|
|
|
(128)
|
|
|
|
(3)
|
|
Payments on finance
leases
|
|
|
(1)
|
|
|
|
—
|
|
Purchases of treasury
stock, at cost
|
|
|
—
|
|
|
|
(255)
|
|
Proceeds from
exercised stock options, net
|
|
|
5
|
|
|
|
6
|
|
Payments related to
tax withholdings on vested stock awards
|
|
|
(2)
|
|
|
|
(30)
|
|
Payments of
dividends
|
|
|
(41)
|
|
|
|
(42)
|
|
Cash used for
financing activities
|
|
|
(155)
|
|
|
|
(324)
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
|
(6)
|
|
|
|
(2)
|
|
Decrease in cash
and cash equivalents
|
|
|
(229)
|
|
|
|
(504)
|
|
Cash and cash
equivalents at January 1,
|
|
|
943
|
|
|
|
1,201
|
|
Cash and cash
equivalents at March 31,
|
|
$
|
714
|
|
|
$
|
697
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash
flows information
|
|
|
|
|
|
|
|
|
Non-cash investing
and financing activities:
|
|
|
|
|
|
|
|
|
Changes in property,
plant, and equipment included in accounts payable
|
|
$
|
37
|
|
|
$
|
(11)
|
|
Obligations incurred
under build-to-suit lease arrangement
|
|
|
—
|
|
|
|
17
|
|
Purchases of treasury
stock not settled by period-end
|
|
|
—
|
|
|
|
6
|
|
The Chemours
Company
Segment Financial
and Operating Data (Unaudited)
(Dollars in
millions)
|
|
|
Segment Net
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ended
|
|
|
Sequential
|
|
|
Three Months Ended
March 31,
|
|
|
Increase
/
|
|
|
December
31,
|
|
|
Increase
/
|
|
|
2020
|
|
|
2019
|
|
|
(Decrease)
|
|
|
2019
|
|
|
(Decrease)
|
|
Fluoroproducts
|
$
|
|
600
|
|
|
$
|
|
687
|
|
|
$
|
|
(87)
|
|
|
$
|
|
614
|
|
|
$
|
|
(14)
|
|
Chemical
Solutions
|
|
|
92
|
|
|
|
|
134
|
|
|
|
|
(42)
|
|
|
|
|
129
|
|
|
|
|
(37)
|
|
Titanium
Technologies
|
|
|
613
|
|
|
|
|
555
|
|
|
|
|
58
|
|
|
|
|
610
|
|
|
|
|
3
|
|
Total Net
Sales
|
$
|
|
1,305
|
|
|
$
|
|
1,376
|
|
|
$
|
|
(71)
|
|
|
$
|
|
1,353
|
|
|
$
|
|
(48)
|
|
Segment Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ended
|
|
|
Sequential
|
|
|
Three Months Ended
March 31,
|
|
|
Increase
/
|
|
|
December
31,
|
|
|
Increase
/
|
|
|
2020
|
|
|
2019
|
|
|
(Decrease)
|
|
|
2019
|
|
|
(Decrease)
|
|
Fluoroproducts
|
$
|
|
140
|
|
|
$
|
|
159
|
|
|
$
|
|
(19)
|
|
|
$
|
|
117
|
|
|
$
|
|
23
|
|
Chemical
Solutions
|
|
|
15
|
|
|
|
|
15
|
|
|
|
|
—
|
|
|
|
|
25
|
|
|
|
|
(10)
|
|
Titanium
Technologies
|
|
|
138
|
|
|
|
|
126
|
|
|
|
|
12
|
|
|
|
|
115
|
|
|
|
|
23
|
|
Corporate and
Other
|
|
|
(36)
|
|
|
|
|
(38)
|
|
|
|
|
2
|
|
|
|
|
(30)
|
|
|
|
|
(6)
|
|
Total Adjusted
EBITDA
|
$
|
|
257
|
|
|
$
|
|
262
|
|
|
$
|
|
(5)
|
|
|
$
|
|
227
|
|
|
$
|
|
30
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
Margin
|
20%
|
|
|
19%
|
|
|
|
|
|
17%
|
|
|
|
|
Quarterly Change
in Net Sales from the three months ended March 31,
2019
|
|
|
March 31,
2020
|
Percentage Change
vs.
|
|
Percentage Change
Due To
|
|
|
Net
Sales
|
|
|
March 31,
2019
|
|
Price
|
|
Volume
|
|
Currency
|
|
Portfolio
|
|
Total
Company
|
$
|
|
1,305
|
|
|
|
(5)
|
%
|
|
(5)
|
%
|
|
3
|
%
|
|
(1)
|
%
|
|
(2)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fluoroproducts
|
$
|
|
600
|
|
|
|
(13)
|
%
|
|
(4)
|
%
|
|
(8)
|
%
|
|
(1)
|
%
|
|
—
|
%
|
Chemical
Solutions
|
|
|
92
|
|
|
|
(31)
|
%
|
|
(4)
|
%
|
|
(7)
|
%
|
|
—
|
%
|
|
(20)
|
%
|
Titanium
Technologies
|
|
|
613
|
|
|
|
10
|
%
|
|
(8)
|
%
|
|
19
|
%
|
|
(1)
|
%
|
|
—
|
%
|
Quarterly Change
in Net Sales from the three months ended December 31,
2019
|
|
|
March 31,
2020
|
Percentage Change
vs.
|
|
Percentage Change
Due To
|
|
|
Net
Sales
|
|
|
December 31,
2019
|
|
Price
|
|
Volume
|
|
Currency
|
|
Portfolio
|
|
Total
Company
|
$
|
|
1,305
|
|
|
|
(4)
|
%
|
|
(2)
|
%
|
|
—
|
%
|
|
—
|
%
|
|
(2)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fluoroproducts
|
$
|
|
600
|
|
|
|
(2)
|
%
|
|
(3)
|
%
|
|
1
|
%
|
|
—
|
%
|
|
—
|
%
|
Chemical
Solutions
|
|
|
92
|
|
|
|
(29)
|
%
|
|
—
|
%
|
|
(10)
|
%
|
|
—
|
%
|
|
(19)
|
%
|
Titanium
Technologies
|
|
|
613
|
|
|
|
—
|
%
|
|
(2)
|
%
|
|
2
|
%
|
|
—
|
%
|
|
—
|
%
|
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 represents 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 sales of businesses 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
|
|
|
|
March
31,
|
|
|
December
31,
|
|
|
|
2020
|
|
|
2019
|
|
|
2019
|
|
Net income (loss)
attributable to Chemours
|
|
$
|
|
100
|
|
|
$
|
94
|
|
|
$
|
|
(317)
|
|
Non-operating pension
and other post-retirement employee benefit (income) cost
(1)
|
|
|
|
—
|
|
|
|
|
(3)
|
|
|
|
|
373
|
|
Exchange losses
(gains), net
|
|
|
|
24
|
|
|
|
|
(6)
|
|
|
|
|
4
|
|
Restructuring,
asset-related, and other charges
|
|
|
|
11
|
|
|
|
|
8
|
|
|
|
|
38
|
|
Loss on sales of
assets and businesses
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
1
|
|
Transaction
costs
|
|
|
|
2
|
|
|
|
|
—
|
|
|
|
|
2
|
|
Legal and
environmental charges (2)
|
|
|
|
10
|
|
|
|
|
29
|
|
|
|
|
132
|
|
Adjustments made to
income taxes (3)
|
|
|
|
(19)
|
|
|
|
|
(5)
|
|
|
|
|
(5)
|
|
Benefit from income
taxes relating to reconciling items (4)
|
|
|
|
(10)
|
|
|
|
|
(8)
|
|
|
|
|
(136)
|
|
Adjusted Net
Income (5)
|
|
|
|
118
|
|
|
|
|
109
|
|
|
|
|
92
|
|
Interest expense,
net
|
|
|
|
54
|
|
|
|
|
51
|
|
|
|
|
52
|
|
Depreciation and
amortization
|
|
|
|
79
|
|
|
|
|
76
|
|
|
|
|
79
|
|
All remaining
provision for income taxes (5)
|
|
|
|
6
|
|
|
|
|
26
|
|
|
|
|
4
|
|
Adjusted
EBITDA
|
|
$
|
|
257
|
|
|
$
|
|
262
|
|
|
$
|
|
227
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted effective
tax rate (5)
|
|
|
|
5
|
%
|
|
|
|
19
|
%
|
|
|
|
5
|
%
|
|
|
(1)
|
The three months
ended December 31, 2019 includes a $380 settlement loss related to
a significant portion of our Netherlands pension plan, specific to
the vested pension benefits of the inactive participants. See "Note
27 – Long-term Employee Benefits" to the Consolidated Financial
Statements in our Annual Report on Form 10-K for the year ended
December 31, 2019 for further details.
|
(2)
|
Legal charges
pertains to litigation settlements, PFOA drinking water treatment
accruals, and other legal charges. Environmental charges pertains
to estimated liabilities associated with on-site remediation,
off-site groundwater remediation, and toxicity studies related to
Fayetteville. The three months ended March 31, 2020 includes $8 in
additional charges for the approved final Consent Order associated
with certain matters at Fayetteville. The three months ended March
31, 2019 includes $27 in additional charges for the estimated
liability associated with Fayetteville. The three months ended
December 31, 2019 includes $132 in additional charges for the
approved final Consent Order associated with certain matters at
Fayetteville. See "Note 16 – Commitments and Contingent
Liabilities" to the Interim Consolidated Financial
Statements in our Quarterly Report on Form 10-Q for the quarter
ended March 31, 2020 and "Note 22 – Commitments and Contingent
Liabilities" to the Consolidated Financial Statements in our
Annual Report on Form 10-K for the year ended December 31, 2019 for
further details.
|
(3)
|
Includes the removal
of certain discrete income tax impacts within our provision for
income taxes, such as shortfalls and windfalls on our 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.
|
(5)
|
Adjusted effective
tax rate is defined as all remaining provision for income taxes
divided by pre-tax Adjusted Net Income.
|
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
|
|
|
|
March
31,
|
|
|
December
31,
|
|
|
|
2020
|
|
|
2019
|
|
|
2019
|
|
Numerator:
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Chemours
|
|
$
|
|
100
|
|
|
$
|
|
94
|
|
|
$
|
|
(317)
|
|
Adjusted Net
Income
|
|
|
|
118
|
|
|
|
|
109
|
|
|
|
|
92
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of common shares outstanding - basic
|
|
|
|
164,247,449
|
|
|
|
|
167,866,468
|
|
|
|
|
163,519,362
|
|
Dilutive effect of the
Company's employee compensation plans (1)
|
|
|
|
1,010,542
|
|
|
|
|
4,194,432
|
|
|
|
|
1,370,113
|
|
Weighted-average
number of common shares outstanding - diluted (1)
|
|
|
|
165,257,991
|
|
|
|
|
172,060,900
|
|
|
|
|
164,889,475
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss)
per share of common stock
|
|
$
|
|
0.61
|
|
|
$
|
|
0.56
|
|
|
|
$
|
(1.94)
|
|
Diluted earnings
(loss) per share of common stock (1)
|
|
|
|
0.61
|
|
|
|
|
0.55
|
|
|
|
|
(1.94)
|
|
Adjusted basic
earnings per share of common stock
|
|
|
|
0.72
|
|
|
|
|
0.65
|
|
|
|
|
0.56
|
|
Adjusted diluted
earnings per share of common stock (1)
|
|
|
|
0.71
|
|
|
|
|
0.63
|
|
|
|
|
0.56
|
|
|
|
(1)
|
In periods where the
Company incurs a net loss, the impact of potentially dilutive
securities is excluded from the calculation of EPS under U.S. GAAP,
as their inclusion would have an anti-dilutive effect. As such,
with respect to the U.S. GAAP measure of diluted EPS, the impact of
potentially dilutive securities is excluded from our calculation
for the three months ended December 31, 2019. With respect to the
non-GAAP measure of adjusted diluted EPS, the impact of potentially
dilutive securities is included in our calculation for the three
months ended December 31, 2019, as Adjusted Net Income was in a net
income position.
|
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
|
|
Free Cash Flows is
defined as cash flows provided by (used for) operating activities,
less purchases of property, plant, and equipment as shown in the
consolidated statements of cash flows.
|
|
|
|
Three Months
Ended
|
|
|
|
March
31,
|
|
|
December
31,
|
|
|
|
2020
|
|
|
2019
|
|
|
2019
|
|
Cash flows provided
by (used for) operating activities
|
|
$
|
|
44
|
|
|
$
|
|
(44)
|
|
|
$
|
|
400
|
|
Less: Purchases of
property, plant, and equipment
|
|
|
|
(106)
|
|
|
|
|
(133)
|
|
|
|
|
(96)
|
|
Free Cash
Flows
|
|
$
|
|
(62)
|
|
|
$
|
|
(177)
|
|
|
$
|
|
304
|
|
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.
|
|
|
|
|
Twelve Months
Ended March 31,
|
|
|
|
2020
|
|
|
2019
|
|
Adjusted EBITDA
(1)
|
|
$
|
1,015
|
|
|
$
|
1,535
|
|
Less: Depreciation
and amortization (1)
|
|
|
(313)
|
|
|
|
(289)
|
|
Adjusted
EBIT
|
|
$
|
702
|
|
|
$
|
1,246
|
|
|
|
|
|
|
|
|
|
|
|
|
As of March
31,
|
|
|
|
2020
|
|
|
2019
|
|
Total debt
|
|
$
|
4,034
|
|
|
$
|
3,978
|
|
Total
equity
|
|
|
661
|
|
|
|
816
|
|
Less: Cash and cash
equivalents
|
|
|
(714)
|
|
|
|
(697)
|
|
Invested capital,
net
|
|
$
|
3,981
|
|
|
$
|
4,097
|
|
Average invested
capital (2)
|
|
$
|
4,140
|
|
|
$
|
3,853
|
|
|
|
|
|
|
|
|
|
|
Return on Invested
Capital
|
|
|
17
|
%
|
|
|
32
|
%
|
|
|
(1)
|
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 (loss) attributable
to Chemours for the three months ended March 31, 2020 and
2019.
|
(2)
|
Average invested
capital is based on a five-quarter trailing average of invested
capital, net.
|
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SOURCE The Chemours Company