WILMINGTON, Del., May 3, 2021 /PRNewswire/ -- The Chemours Company
(Chemours) (NYSE: CC), a global chemistry company with leading
market positions in Titanium Technologies, Thermal &
Specialized Solutions, Advanced Performance Materials, and Chemical
Solutions today announces its financial results for the first
quarter 2021.
First Quarter 2021 Results & Highlights
- Net Sales of $1.4 billion, up 10%
year-over-year
- Net Income of $96 million with
EPS of $0.57
- Adjusted Net Income* of $120 million with
Adjusted EPS* of $0.71
- Adjusted EBITDA* of $268
million
- Initiated strategic review of Mining Solutions
- Announced ambitious net zero climate goal
- On April 29, 2021, the company's
Board of Directors approved a second quarter dividend of
$0.25 per share, consistent with the
prior quarter
2021 Revised Outlook
- Adjusted EBITDA* between $1.10
and $1.25 billion, up $100 million at the midpoint vs. prior
outlook
- Adjusted EPS* between ~$2.84 and $3.56
vs. prior expectation of ~$2.40 and
$3.12
- Free Cash Flow* now expected to be greater than
$450 million, up $100 million vs. prior outlook
"We are off to a great start in 2021 as the broad economic
recovery drove strong year-over-year and sequential volume growth
across the majority of our portfolio, leading to the highest
quarterly sales total in more than 2-years," said Chemours
President and CEO Mark Vergnano.
"This outcome was achieved despite managing through supply chain
challenges and operational headwinds, most notably from
Winter Storm Uri. Looking
ahead, our strong 1Q results and growing confidence in the outlook
allows us to raise our 2021 full-year Adjusted EBITDA range by
$100 million with Free Cash Flow now
expected to be greater than $450
million."
First quarter 2021 Net Sales were $1.4
billion, 10% higher than the prior-year quarter, which
included a negative 1% portfolio impact from the exit of the
aniline business. 11% volume growth was the primary driver of
the better year-over-year sales performance with positive
contributions from every segment, led by robust growth in Titanium
Technologies and Advanced Performance Materials. The 7% sequential
sales improvement was supported by a global macro recovery that
drove sales higher in Titanium Technologies, Thermal &
Specialized Solutions, Advanced Performance Materials, and Chemical
Solutions after accounting for portfolio
changes.
First quarter Net Income was $96 million, resulting in EPS
of $0.57. Adjusted Net Income
was $120 million, resulting in Adjusted EPS of $0.71, flat vs. the prior-year quarter.
Adjusted EBITDA for the first quarter 2021 was $268 million in comparison to $257 million in the prior-year first quarter, a
result of higher volume and favorable currency impact, partially
offset by lower average pricing, under absorption of fixed costs
stemming from Winter Storm Uri
related plant shutdowns, and higher performance-related
compensation. The cost impact of Winter Storm Uri, excluding the impact of lost
sales, on Adjusted EBITDA is $9
million, mostly in Thermal & Specialized
Solutions. Free Cash Flow improved $41
million vs. the prior-year quarter primarily driven by lower
capital expenditures.
Titanium Technologies
Titanium Technologies (TT)
segment Net Sales in the first quarter were $723 million in comparison to $613 million in the prior-year quarter. Volume
increased 16% vs. the prior-year first quarter, a result of solid
demand in all regions and end-markets despite the logistics and
operations issues from Winter Storm
Uri. Operations have since recovered and are ramping up
successfully to meet demand. Despite the challenging
operating environment, we prioritized supplying our long-term
contracted customers by managing product availability through Flex,
consistent with our TVS strategy. The percentage of sales
under long-term contracts increased during the quarter, as
customers realize the benefits of reliable sourcing and predictable
pricing. Currency was a 3% benefit vs. the prior-year period
with a 1% offset from lower price due to mix. On a sequential
basis, segment volume and price each increased by 2%, with positive
contribution across all channels. Adjusted EBITDA increased
by 22% to $169 million, in comparison
to $138 million in the prior-year
first quarter.
Thermal & Specialized Solutions
Thermal &
Specialized Solutions (TSS) segment Net Sales in the first quarter
were $304 million, a 1% decline vs.
the prior-year quarter. Segment volume improved 4%
year-over-year as the global demand recovery was partially offset
by constrained global auto production as well as from operational
challenges from Winter Storm Uri.
We worked closely with our customers to minimize disruption
and have now restored full supply chain capability.
Opteon™ volumes continued to drive growth in the period due to
improved adoption but faced headwinds from lower global auto
production. Currency was a 1% benefit vs. the prior-year
period. Segment price declined 6% vs. the prior-year quarter,
primarily due to contractual price adjustments for refrigerants as
well as product and customer mix. Segment Adjusted EBITDA of
$93 million increased 6% vs. the
prior-year quarter and Adjusted EBITDA margins improved 200bps
year-over-year as cost discipline and the ramp of our Corpus
Christi facility more than offset headwinds from under absorption
of fixed costs stemming from operational issues related to
Winter Storm Uri and lower
contractual pricing.
Advanced Performance Materials
Advanced Performance
Materials (APM) segment Net Sales in the first quarter were
$333 million, returning to a
pre-pandemic quarterly sales run-rate and hitting the highest
monthly sales in Chemours history in March. Strong
year-over-year sales growth was driven by demand recovery across
nearly all end-markets and regions, led by Semiconductors,
Electronics, Transportation, and Oil &Gas. Volume and
currency contributed 13% and 4% respectively to the strong
year-over-year sales performance with a partial offset from 3%
lower pricing, driven by mix. Segment Adjusted EBITDA of
$51 million decreased 2% vs. the
prior-year quarter as higher sales were more than offset by fixed
cost under absorption due to supply chain disruption from
Winter Storm Uri, and the timing of
certain expenses vs. the prior-year period. On a sequential
basis Net Sales increased 19%, or $54
million, driving Adjusted EBITDA 104% higher, or
$26 million – demonstrating the high
incremental margin potential in this business. First quarter
Adjusted EBITDA margins of 15% are 600bps higher vs. the prior
quarter.
Chemical Solutions
Chemical Solutions (CS) segment Net
Sales in the first quarter were $76
million, 17% lower vs. the prior-year quarter driven by a
decline of 19% due to portfolio changes. CS Net Sales increased 2%
year-over-year after accounting for the portfolio change driven by
1% higher price and a 1% year-over-year volume increase led by
strong Mining Solutions performance. Glycolic Acid and Vazo™
demand remained strong in the quarter, but volumes were slightly
lower year-over-year due to regional logistical challenges and
effects from Winter Storm Uri.
Adjusted EBITDA was $10 million,
$5 million below the prior year
period, supported by stronger results in Mining Solutions, but
offset by incremental costs associated with Winter Storm Uri, portfolio impacts from the
closure of Pascagoula and the timing of license income relative to
the prior-year period.
Corporate and Other
Corporate and Other in the first
quarter 2021 represented a $55
million offset to Adjusted EBITDA vs. $36 million in the prior-year quarter, primarily
driven by $12 million of higher
legacy environmental remediation costs and performance-related
compensation expense vs. the prior-year period.
Liquidity
As of March 31,
2021, consolidated gross debt was $4.0 billion. Debt, net of $1.0 billion cash, was $3.0 billion, resulting in a net leverage ratio
of approximately 3.4 times on a trailing twelve-month Adjusted
EBITDA basis. Total liquidity was $1.7
billion comprised of $1.0
billion of cash and $0.7
billion of revolving credit facility capacity.
Cash provided by operating activities for the first quarter of
2021 was $39 million, down $5 million from
$44 million in the prior-year quarter. Capital
expenditures for the first quarter 2021 were $60 million, vs. $106
million in last year's first quarter. Free Cash
Flow for the first quarter of 2021 was negative $21 million, a $41
million improvement vs. the prior-year Free Cash Flow of
negative $62 million.
Outlook
Vergnano commented, "Given our solid first
quarter performance and the continuation of strong underlying
demand trends, we now expect to deliver 2021 Adjusted EBITDA within
a range of $1.1 to $1.25 billion and to generate greater than
$450 million of Free Cash Flow.
We remain mindful of the challenges presented by an uneven
global economic recovery and the ongoing COVID-19 pandemic but are
optimistic that the recovery is now well underway across all of our
core markets."
Conference Call
As previously announced, Chemours will
hold a conference call and webcast on Tuesday, May 4, 2021, 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) is a global leader in Titanium Technologies, Thermal
& Specialized Solutions, Advanced Performance Materials, and
Chemical Solutions providing its customers with solutions in a wide
range of industries with market-defining products, application
expertise and chemistry-based innovations. We deliver customized
solutions with a wide range of industrial and specialty chemicals
products for markets, including coatings, plastics, refrigeration,
and air conditioning, transportation, semiconductor and consumer
electronics, general industrial, mining and oil and gas. Our
flagship products include prominent brands such as Ti-Pure™,
Opteon™, Freon™, Teflon™, Viton™, Nafion™, and Krytox™. In
2019, Chemours was named to Newsweek's list of America's Most
Responsible Companies. The company has approximately 6,500
employees and 30 manufacturing sites serving approximately 3,300
customers in approximately 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 Section
27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, 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
for our segments individually and our company as a whole, business
plans, prospects, targets, goals and commitments, capital
investments and projects and target capital expenditures, 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, which has had, and we expect will continue to
have a negative impact on our financial results. 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, 2021 and in
our Annual Report on Form 10-K for the year ended December 31, 2020. 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
Thomas
Sueta
Director, Corporate Communications
+1.302.773.3903
media@chemours.com
The Chemours
Company
|
Interim
Consolidated Statements of Operations (Unaudited)
|
(Dollars in
millions, except per share amounts)
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
2021
|
|
|
2020
|
|
Net sales
|
|
$
|
1,436
|
|
|
$
|
1,305
|
|
Cost of goods
sold
|
|
|
1,139
|
|
|
|
1,007
|
|
Gross
profit
|
|
|
297
|
|
|
|
298
|
|
Selling, general, and
administrative expense
|
|
|
139
|
|
|
|
125
|
|
Research and
development expense
|
|
|
24
|
|
|
|
24
|
|
Restructuring,
asset-related, and other charges
|
|
|
(5)
|
|
|
|
11
|
|
Total other operating
expenses
|
|
|
158
|
|
|
|
160
|
|
Equity in earnings of
affiliates
|
|
|
10
|
|
|
|
8
|
|
Interest expense,
net
|
|
|
(49)
|
|
|
|
(54)
|
|
Other income
(expense), net
|
|
|
1
|
|
|
|
(15)
|
|
Income before
income taxes
|
|
|
101
|
|
|
|
77
|
|
Provision for
(benefit from) income taxes
|
|
|
5
|
|
|
|
(23)
|
|
Net
income
|
|
|
96
|
|
|
|
100
|
|
Net income
attributable to Chemours
|
|
$
|
96
|
|
|
$
|
100
|
|
Per share
data
|
|
|
|
|
|
|
|
|
Basic earnings per
share of common stock
|
|
$
|
0.58
|
|
|
$
|
0.61
|
|
Diluted earnings per
share of common stock
|
|
|
0.57
|
|
|
|
0.61
|
|
The Chemours
Company
|
Interim
Consolidated Balance Sheets (Unaudited)
|
(Dollars in
millions, except per share amounts)
|
|
|
|
March 31,
2021
|
|
|
December 31,
2020
|
|
Assets
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
1,008
|
|
|
$
|
1,105
|
|
Accounts and notes
receivable, net
|
|
|
723
|
|
|
|
511
|
|
Inventories
|
|
|
988
|
|
|
|
939
|
|
Prepaid expenses and
other
|
|
|
67
|
|
|
|
78
|
|
Total current
assets
|
|
|
2,786
|
|
|
|
2,633
|
|
Property, plant, and
equipment
|
|
|
9,553
|
|
|
|
9,582
|
|
Less: Accumulated
depreciation
|
|
|
(6,121)
|
|
|
|
(6,108)
|
|
Property, plant, and
equipment, net
|
|
|
3,432
|
|
|
|
3,474
|
|
Operating lease
right-of-use assets
|
|
|
228
|
|
|
|
236
|
|
Goodwill,
net
|
|
|
152
|
|
|
|
153
|
|
Other intangible
assets, net
|
|
|
11
|
|
|
|
14
|
|
Investments in
affiliates
|
|
|
169
|
|
|
|
167
|
|
Other
assets
|
|
|
392
|
|
|
|
405
|
|
Total
assets
|
|
$
|
7,170
|
|
|
$
|
7,082
|
|
Liabilities
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
976
|
|
|
$
|
844
|
|
Short-term and current
maturities of long-term debt
|
|
|
23
|
|
|
|
21
|
|
Other accrued
liabilities
|
|
|
502
|
|
|
|
577
|
|
Total current
liabilities
|
|
|
1,501
|
|
|
|
1,442
|
|
Long-term debt,
net
|
|
|
3,970
|
|
|
|
4,005
|
|
Operating lease
liabilities
|
|
|
186
|
|
|
|
194
|
|
Deferred income
taxes
|
|
|
51
|
|
|
|
36
|
|
Other
liabilities
|
|
|
610
|
|
|
|
590
|
|
Total
liabilities
|
|
|
6,318
|
|
|
|
6,267
|
|
Commitments and
contingent liabilities
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
Common stock (par
value $0.01 per share; 810,000,000 shares authorized;
190,783,383 shares issued and 165,464,148
shares outstanding at March 31,
2021; 190,239,883 shares issued and 164,920,648 shares outstanding
at December 31, 2020)
|
|
|
2
|
|
|
|
2
|
|
Treasury stock, at
cost (25,319,235 shares at March 31, 2021 and December 31,
2020)
|
|
|
(1,072)
|
|
|
|
(1,072)
|
|
Additional paid-in
capital
|
|
|
907
|
|
|
|
890
|
|
Retained
earnings
|
|
|
1,357
|
|
|
|
1,303
|
|
Accumulated other
comprehensive loss
|
|
|
(344)
|
|
|
|
(310)
|
|
Total Chemours
stockholders' equity
|
|
|
850
|
|
|
|
813
|
|
Non-controlling
interests
|
|
|
2
|
|
|
|
2
|
|
Total
equity
|
|
|
852
|
|
|
|
815
|
|
Total liabilities
and equity
|
|
$
|
7,170
|
|
|
$
|
7,082
|
|
The Chemours
Company
|
Interim
Consolidated Statements of Cash Flows (Unaudited)
|
(Dollars in
millions)
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
2021
|
|
|
2020
|
|
Cash flows from
operating activities
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
96
|
|
|
$
|
100
|
|
Adjustments to
reconcile net income to cash provided by (used for) operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
83
|
|
|
|
79
|
|
Equity in earnings of
affiliates, net
|
|
|
(10)
|
|
|
|
(4)
|
|
Amortization of debt
issuance costs and issue discounts
|
|
|
2
|
|
|
|
2
|
|
Deferred tax
benefit
|
|
|
(6)
|
|
|
|
(43)
|
|
Asset-related
charges
|
|
|
—
|
|
|
|
1
|
|
Stock-based
compensation expense
|
|
|
12
|
|
|
|
8
|
|
Net periodic pension
cost
|
|
|
1
|
|
|
|
3
|
|
Defined benefit plan
contributions
|
|
|
(5)
|
|
|
|
(8)
|
|
Other operating
charges and credits, net
|
|
|
29
|
|
|
|
3
|
|
Decrease (increase) in
operating assets:
|
|
|
|
|
|
|
|
|
Accounts and notes
receivable, net
|
|
|
(213)
|
|
|
|
(11)
|
|
Inventories and other
operating assets
|
|
|
(31)
|
|
|
|
(42)
|
|
(Decrease) increase in
operating liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable and
other operating liabilities
|
|
|
81
|
|
|
|
(44)
|
|
Cash provided by
operating activities
|
|
|
39
|
|
|
|
44
|
|
Cash flows from
investing activities
|
|
|
|
|
|
|
|
|
Purchases of
property, plant, and equipment
|
|
|
(60)
|
|
|
|
(106)
|
|
Foreign exchange
contract settlements, net
|
|
|
(17)
|
|
|
|
(6)
|
|
Cash used for
investing activities
|
|
|
(77)
|
|
|
|
(112)
|
|
Cash flows from
financing activities
|
|
|
|
|
|
|
|
|
Proceeds from
accounts receivable securitization facility
|
|
|
—
|
|
|
|
12
|
|
Debt
repayments
|
|
|
(3)
|
|
|
|
(128)
|
|
Payments on finance
leases
|
|
|
(2)
|
|
|
|
(1)
|
|
Proceeds from
exercised stock options, net
|
|
|
6
|
|
|
|
5
|
|
Payments related to
tax withholdings on vested stock awards
|
|
|
(2)
|
|
|
|
(2)
|
|
Payments of dividends
to the Company's common shareholders
|
|
|
(41)
|
|
|
|
(41)
|
|
Cash used for
financing activities
|
|
|
(42)
|
|
|
|
(155)
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
|
(17)
|
|
|
|
(6)
|
|
Decrease in cash
and cash equivalents
|
|
|
(97)
|
|
|
|
(229)
|
|
Cash and cash
equivalents at January 1,
|
|
|
1,105
|
|
|
|
943
|
|
Cash and cash
equivalents at March 31,
|
|
$
|
1,008
|
|
|
$
|
714
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash
flows information
|
|
|
|
|
|
|
|
|
Non-cash investing
and financing activities:
|
|
|
|
|
|
|
|
|
Purchases of property,
plant, and equipment included in accounts payable
|
|
$
|
44
|
|
|
$
|
37
|
|
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
/
|
|
|
2021
|
|
|
2020
|
|
|
(Decrease)
|
|
|
2020
|
|
|
(Decrease)
|
|
Titanium
Technologies
|
$
|
|
723
|
|
|
$
|
|
613
|
|
|
$
|
|
110
|
|
|
$
|
|
691
|
|
|
$
|
|
32
|
|
Thermal &
Specialized Solutions
|
|
|
304
|
|
|
|
|
308
|
|
|
|
|
(4)
|
|
|
|
|
272
|
|
|
|
|
32
|
|
Advanced Performance
Materials
|
|
|
333
|
|
|
|
|
292
|
|
|
|
|
41
|
|
|
|
|
279
|
|
|
|
|
54
|
|
Chemical
Solutions
|
|
|
76
|
|
|
|
|
92
|
|
|
|
|
(16)
|
|
|
|
|
95
|
|
|
|
|
(19)
|
|
Total Net
Sales
|
$
|
|
1,436
|
|
|
$
|
|
1,305
|
|
|
$
|
|
131
|
|
|
$
|
|
1,337
|
|
|
$
|
|
99
|
|
Segment Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ended
|
|
|
Sequential
|
|
|
Three Months Ended
March 31,
|
|
|
Increase
/
|
|
|
December
31,
|
|
|
Increase
/
|
|
|
2021
|
|
|
2020
|
|
|
(Decrease)
|
|
|
2020
|
|
|
(Decrease)
|
|
Titanium
Technologies
|
$
|
|
169
|
|
|
$
|
|
138
|
|
|
$
|
|
31
|
|
|
$
|
|
149
|
|
|
$
|
|
20
|
|
Thermal &
Specialized Solutions
|
|
|
93
|
|
|
|
|
88
|
|
|
|
|
5
|
|
|
|
|
105
|
|
|
|
|
(12)
|
|
Advanced Performance
Materials
|
|
|
51
|
|
|
|
|
52
|
|
|
|
|
(1)
|
|
|
|
|
25
|
|
|
|
|
26
|
|
Chemical
Solutions
|
|
|
10
|
|
|
|
|
15
|
|
|
|
|
(5)
|
|
|
|
|
28
|
|
|
|
|
(18)
|
|
Corporate and
Other
|
|
|
(55)
|
|
|
|
|
(36)
|
|
|
|
|
(19)
|
|
|
|
|
(61)
|
|
|
|
|
6
|
|
Total Adjusted
EBITDA
|
$
|
|
268
|
|
|
$
|
|
257
|
|
|
$
|
|
11
|
|
|
$
|
|
246
|
|
|
$
|
|
22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
Margin
|
19%
|
|
|
20%
|
|
|
|
|
|
18%
|
|
|
|
|
Quarterly Change
in Net Sales from the three months ended March 31,
2020
|
|
|
March 31,
2021
|
|
Percentage Change
vs.
|
|
Percentage Change
Due To
|
|
|
Net
Sales
|
|
March 31,
2020
|
|
Price
|
|
Volume
|
|
Currency
|
|
Portfolio
|
|
Total
Company
|
$
|
|
1,436
|
|
|
10
|
%
|
|
(2)
|
%
|
|
11
|
%
|
|
2
|
%
|
|
(1)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Titanium
Technologies
|
$
|
|
723
|
|
|
18
|
%
|
|
(1)
|
%
|
|
16
|
%
|
|
3
|
%
|
|
—
|
%
|
Thermal &
Specialized Solutions
|
|
|
304
|
|
|
(1)
|
%
|
|
(6)
|
%
|
|
4
|
%
|
|
1
|
%
|
|
—
|
%
|
Advanced Performance
Materials
|
|
|
333
|
|
|
14
|
%
|
|
(3)
|
%
|
|
13
|
%
|
|
4
|
%
|
|
—
|
%
|
Chemical
Solutions
|
|
|
76
|
|
|
(17)
|
%
|
|
1
|
%
|
|
1
|
%
|
|
—
|
%
|
|
(19)
|
%
|
Quarterly Change
in Net Sales from the three months ended December 31,
2020
|
|
|
March 31,
2021
|
|
Percentage Change
vs.
|
|
Percentage Change
Due To
|
|
|
Net
Sales
|
|
December 31,
2020
|
|
Price
|
|
Volume
|
|
Currency
|
|
Portfolio
|
|
Total
Company
|
$
|
|
1,436
|
|
|
7
|
%
|
|
—
|
%
|
|
8
|
%
|
|
1
|
%
|
|
(2)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Titanium
Technologies
|
$
|
|
723
|
|
|
5
|
%
|
|
2
|
%
|
|
2
|
%
|
|
1
|
%
|
|
—
|
%
|
Thermal &
Specialized Solutions
|
|
|
304
|
|
|
12
|
%
|
|
1
|
%
|
|
12
|
%
|
|
(1)
|
%
|
|
—
|
%
|
Advanced Performance
Materials
|
|
|
333
|
|
|
19
|
%
|
|
(2)
|
%
|
|
20
|
%
|
|
1
|
%
|
|
—
|
%
|
Chemical
Solutions
|
|
|
76
|
|
|
(20)
|
%
|
|
2
|
%
|
|
(2)
|
%
|
|
—
|
%
|
|
(20)
|
%
|
The Chemours
Company
|
Reconciliation of
GAAP Financial Measures to Non-GAAP Financial Measures
(Unaudited)
|
(Dollars in
millions)
|
|
GAAP Net Income to
Adjusted Net Income and Adjusted EBITDA
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;
(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,
|
|
|
|
2021
|
|
|
2020
|
|
|
2020
|
|
Net income
attributable to Chemours
|
|
$
|
|
96
|
|
|
$
|
|
100
|
|
|
$
|
|
19
|
|
Non-operating pension
and other post-retirement employee benefit (income) cost
|
|
|
|
(1)
|
|
|
|
|
—
|
|
|
|
|
1
|
|
Exchange losses
(gains), net
|
|
|
|
8
|
|
|
|
|
24
|
|
|
|
|
(2)
|
|
Restructuring,
asset-related, and other charges
|
|
|
|
(5)
|
|
|
|
|
11
|
|
|
|
|
43
|
|
Loss on
extinguishment of debt
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
22
|
|
Gain on sales of
assets and businesses (1)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(8)
|
|
Natural disasters and
catastrophic events (2)
|
|
|
|
16
|
|
|
|
|
—
|
|
|
|
|
—
|
|
Transaction
costs
|
|
|
|
4
|
|
|
|
|
2
|
|
|
|
|
—
|
|
Legal and
environmental charges (3,4)
|
|
|
|
13
|
|
|
|
|
10
|
|
|
|
|
37
|
|
Adjustments made to
income taxes (5)
|
|
|
|
—
|
|
|
|
|
(19)
|
|
|
|
|
9
|
|
Benefit from income
taxes relating to reconciling items (6)
|
|
|
|
(11)
|
|
|
|
|
(10)
|
|
|
|
|
(18)
|
|
Adjusted Net
Income (7)
|
|
|
|
120
|
|
|
|
|
118
|
|
|
|
|
103
|
|
Interest expense,
net
|
|
|
|
49
|
|
|
|
|
54
|
|
|
|
|
50
|
|
Depreciation and
amortization
|
|
|
|
83
|
|
|
|
|
79
|
|
|
|
|
80
|
|
All remaining
provision for income taxes (7)
|
|
|
|
16
|
|
|
|
|
6
|
|
|
|
|
13
|
|
Adjusted
EBITDA
|
|
$
|
|
268
|
|
|
$
|
|
257
|
|
|
$
|
|
246
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted effective
tax rate (7)
|
|
|
|
12
|
%
|
|
|
|
5
|
%
|
|
|
|
11
|
%
|
|
|
(1)
|
The three months
ended December 31, 2020 includes a gain of $6 recognized in
connection with the sale of our Oakley, California site.
|
(2)
|
Natural disasters and
catastrophic events pertains to the total cost of plant repairs and
utility charges in excess of historical averages caused by Winter
Storm Uri.
|
(3)
|
Legal charges
pertains to litigation settlements, PFOA drinking water treatment
accruals, and other legal charges. The three months ended December
31, 2020 includes $29 incurred in connection with our portion of
the costs to settle PFOA multi-district litigation. See "Note 15 –
Commitments and Contingent Liabilities" to the Interim Consolidated
Financial Statements in our Quarterly Report on Form 10-Q for the
quarter ended March 31, 2021 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, 2020 for further details.
|
(4)
|
In 2020,
environmental charges pertains to management's assessment of
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 related to the approved final Consent Order
associated with certain matters at Fayetteville. See "Note 15 –
Commitments and Contingent Liabilities" to the Interim Consolidated
Financial Statements in our Quarterly Report on Form 10-Q for the
quarter ended March 31, 2021 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, 2020 for further details
|
(5)
|
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, certain return-to-accrual adjustments, valuation
allowance adjustments, unrealized gains and losses on foreign
exchange rate changes, and other discrete income tax
items.
|
(6)
|
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.
|
(7)
|
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
GAAP Financial Measures to Non-GAAP Financial Measures
(Unaudited)
|
(Dollars in
millions, except per share amounts)
|
|
GAAP Earnings per
Share to Adjusted 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,
|
|
|
|
2021
|
|
|
2020
|
|
|
2020
|
|
Numerator:
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Chemours
|
|
$
|
|
96
|
|
|
$
|
|
100
|
|
|
$
|
|
19
|
|
Adjusted Net
Income
|
|
|
|
120
|
|
|
|
|
118
|
|
|
|
|
103
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of common shares outstanding - basic
|
|
|
|
165,652,778
|
|
|
|
|
164,247,449
|
|
|
|
|
165,056,160
|
|
Dilutive effect of the
Company's employee compensation plans
|
|
|
|
3,397,544
|
|
|
|
|
1,010,542
|
|
|
|
|
3,031,379
|
|
Weighted-average
number of common shares outstanding - diluted
|
|
|
|
169,050,322
|
|
|
|
|
165,257,991
|
|
|
|
|
168,087,539
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share of common stock
|
|
$
|
|
0.58
|
|
|
$
|
|
0.61
|
|
|
$
|
|
0.12
|
|
Diluted earnings per
share of common stock
|
|
|
|
0.57
|
|
|
|
|
0.61
|
|
|
|
|
0.11
|
|
Adjusted basic
earnings per share of common stock
|
|
|
|
0.72
|
|
|
|
|
0.72
|
|
|
|
|
0.62
|
|
Adjusted diluted
earnings per share of common stock
|
|
|
|
0.71
|
|
|
|
|
0.71
|
|
|
|
|
0.61
|
|
The Chemours
Company
|
Reconciliation of
GAAP Financial Measures to Non-GAAP Financial Measures
(Unaudited)
|
(Dollars in
millions, except per share amounts)
|
|
2021 Estimated
Adjusted EBITDA and Estimated GAAP Net Income to Estimated Adjusted
EPS Reconciliation (*)
|
|
|
|
Year Ended
December 31, 2021
|
|
|
|
Low
|
|
|
High
|
|
Net income
attributable to Chemours
|
|
$
|
429
|
|
|
$
|
552
|
|
Restructuring,
transaction, and other costs
|
|
|
50
|
|
|
|
50
|
|
Adjusted Net
Income
|
|
|
479
|
|
|
|
602
|
|
Interest expense,
net
|
|
|
191
|
|
|
|
191
|
|
Depreciation and
amortization
|
|
|
325
|
|
|
|
325
|
|
All remaining
provision for income taxes
|
|
|
105
|
|
|
|
132
|
|
Adjusted
EBITDA
|
|
$
|
1,100
|
|
|
$
|
1,250
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of common shares outstanding - basic (1)
|
|
|
165.7
|
|
|
|
165.7
|
|
Dilutive effect of
the Company's employee compensation plans (1,2)
|
|
|
3.2
|
|
|
|
3.2
|
|
Weighted-average
number of common shares outstanding - diluted (1,2)
|
|
|
168.9
|
|
|
|
168.9
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share of common stock
|
|
$
|
2.59
|
|
|
$
|
3.33
|
|
Diluted earnings per
share of common stock (2)
|
|
|
2.54
|
|
|
|
3.27
|
|
Adjusted basic
earnings per share of common stock
|
|
|
2.89
|
|
|
|
3.63
|
|
Adjusted diluted
earnings per share of common stock (2)
|
|
|
2.84
|
|
|
|
3.56
|
|
|
|
(1)
|
The Company's
estimates for the weighted-average number of common shares
outstanding - basic and diluted reflect results for the three
months ended March 31, 2021, which are carried forward for the
projection period.
|
|
|
(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
GAAP Financial Measures to Non-GAAP Financial Measures
(Unaudited)
|
(Dollars in
millions)
|
|
GAAP Cash Flow
Provided by Operating Activities to Free Cash Flows
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,
|
|
|
|
2021
|
|
|
2020
|
|
|
2020
|
|
Cash provided by
operating activities
|
|
$
|
|
39
|
|
|
$
|
|
44
|
|
|
$
|
|
353
|
|
Less: Purchases of
property, plant, and equipment
|
|
|
|
(60)
|
|
|
|
|
(106)
|
|
|
|
|
(53)
|
|
Free Cash
Flows
|
|
$
|
|
(21)
|
|
|
$
|
|
(62)
|
|
|
$
|
|
300
|
|
2021 GAAP Cash
Flow Provided by Operating Activities to Estimated Free Cash Flow
Reconciliation (*)
|
|
|
|
(Estimated)
|
|
|
Year Ended
December 31, 2021
|
Cash flow provided by
operating activities
|
|
$
|
>800
|
Less: Purchases of
property, plant, and equipment
|
|
|
~(350)
|
Free Cash
Flows
|
|
$
|
>450
|
|
|
(*)
|
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.
|
|
|
|
Twelve months
Ended March 31,
|
|
|
|
2021
|
|
|
2020
|
|
Adjusted EBITDA
(1)
|
|
$
|
890
|
|
|
$
|
1,015
|
|
Less: Depreciation
and amortization (1)
|
|
|
(324)
|
|
|
|
(313)
|
|
Adjusted
EBIT
|
|
$
|
566
|
|
|
$
|
702
|
|
|
|
|
|
|
|
|
|
|
|
|
As of March
31,
|
|
|
|
2021
|
|
|
2020
|
|
Total debt
|
|
$
|
3,993
|
|
|
$
|
4,034
|
|
Total
equity
|
|
|
852
|
|
|
|
661
|
|
Less: Cash and cash
equivalents
|
|
|
(1,008)
|
|
|
|
(714)
|
|
Invested capital,
net
|
|
$
|
3,837
|
|
|
$
|
3,981
|
|
Average invested
capital (2)
|
|
$
|
3,880
|
|
|
$
|
4,140
|
|
|
|
|
|
|
|
|
|
|
Return on Invested
Capital
|
|
|
15
|
%
|
|
|
17
|
%
|
|
|
(1)
|
Reconciliations of
net income (loss) attributable to Chemours to Adjusted EBITDA are
provided on a quarterly basis. See the preceding table for the
reconciliation of net income (loss) attributable to Chemours to
Adjusted EBITDA.
|
(2)
|
Average invested
capital is based on a five-quarter trailing average of invested
capital, net.
|
The Chemours
Company
|
Reconciliation of
GAAP Financial Measures to Non-GAAP Financial Measures
(Unaudited)
|
(Dollars in
millions)
|
|
Net Leverage Ratio
Reconciliation
|
|
Net Leverage Ratio is
defined as our total debt principal, net, or our total debt
principal outstanding less cash and cash equivalents, divided by
Adjusted EBITDA.
|
|
|
|
As of March
31,
|
|
|
|
2021
|
|
|
2020
|
|
Total debt
principal
|
|
$
|
4,027
|
|
|
$
|
4,069
|
|
Less: Cash and cash
equivalents
|
|
|
(1,008)
|
|
|
|
(714)
|
|
Total debt
principal, net
|
|
$
|
3,019
|
|
|
$
|
3,355
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve months
Ended March 31,
|
|
|
|
2021
|
|
|
2020
|
|
Adjusted EBITDA
(1)
|
|
$
|
890
|
|
|
$
|
1,015
|
|
|
|
|
|
|
|
|
|
|
Net Leverage
Ratio
|
|
|
3.4
|
|
|
|
3.3
|
|
|
|
(1)
|
Reconciliations of
net income (loss) attributable to Chemours to Adjusted EBITDA are
provided on a quarterly basis. See the preceding table for the
reconciliation of net income (loss) attributable to Chemours to
Adjusted EBITDA.
|
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SOURCE The Chemours Company