STAMFORD, Conn., Oct. 28, 2020 /PRNewswire/ --
Third Quarter 2020 Highlights:
- Revenue of $675 million increased
17 percent sequentially on improved market demand
- Income from operations of $49
million; Net income of $902
million primarily due to the reversal of a portion of U.S.
valuation allowance relating to net operating loss carryforwards
resulting in a non-cash benefit of $895
million
- Adjusted EBITDA of $148 million;
Adjusted EBITDA margin of 22 percent (Non-GAAP), reflecting the
impact of adjusting our operations to accommodate the effects of
the pandemic, partially offset by cost reductions and increased
acquisition synergies
- Total year-to-date acquisition synergies of $183 million, with $134
million reflected in Adjusted EBITDA (Non-GAAP); Raising
total synergy target for FY 2020 to $235
million, with $185 million to
be reflected in Adjusted EBITDA (Non-GAAP)
- GAAP diluted income per share of $6.18; Adjusted diluted EPS of $0.05 (Non-GAAP)
- TiO2 sales volumes increased 16 percent
sequentially, driven by improving market demand throughout the
quarter, with level selling prices consistent with
expectations
- Zircon sales volumes declined 15 percent sequentially as a
result of shipment timing between quarters, with a 2 percent
decline in selling prices driven largely by product mix
- Feedstock and other products sales increased 73 percent
sequentially, primarily due to increased pig iron and CP slag sales
mandated by the FTC consent order
Fourth Quarter 2020 Outlook:
- Strong sales trends reflect a favorable deviation from typical
fourth quarter seasonality; anticipate this will result in
TiO2 sales volumes at or above Q3 2020 and Q4 2019
- Q4 zircon sales volume to be the strongest quarter of the year;
expected to increase in the range of 25 percent sequentially
- Adjusted EBITDA outlook of $155 -
$170 million and Adjusted EBITDA
margin to recover to first half of 2020 levels
Tronox Holdings plc (NYSE:TROX) ("Tronox" or the "Company"), the
world's leading integrated manufacturer of titanium dioxide
pigment, today reported its financial results for the quarter
ending September 30, 2020, as follows:
Summary of
Financial Results for the Quarter Ending September 30,
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
(Millions of
dollars)
|
Q3
2020
|
Q3
2019
|
Y-o-Y %
∆
|
Q2
2020
|
Q-o-Q %
∆
|
Revenue
|
$675
|
$768
|
(12%)
|
$578
|
17%
|
TiO2
|
543
|
603
|
(10%)
|
466
|
17%
|
Zircon
|
56
|
68
|
(18%)
|
68
|
(18%)
|
Feedstock and other
products
|
76
|
97
|
(22%)
|
44
|
73%
|
Net Income (Loss)
from Continuing Ops
|
902
|
26
|
n/m
|
|
(4)
|
n/m
|
Adjusted
EBITDA
|
148
|
184
|
(20%)
|
142
|
4%
|
Adjusted EBITDA
Margin %
|
22%
|
24%
|
(2)
pts
|
25%
|
(3)
pts
|
|
|
|
|
|
|
|
Y-o-Y %
∆
|
|
Q-o-Q %
∆
|
|
Volume
|
Price
|
|
Volume
|
Price
|
TiO2
|
(9%)
|
(1%)
|
|
16%
|
0%
|
Local Currency
Basis
|
n/a
|
(3%)
|
|
n/a
|
(1%)
|
Zircon
|
(7%)
|
(11%)
|
|
(15%)
|
(2%)
|
Note: Net income
from continuing operations for Q3 2019 is shown on a pro forma
basis to exclude a $40 million charge for additional inventory
step-up in cost of goods sold in Q3 2019 related to the Cristal
acquisition. All other figures in the table are as
reported.
|
Tronox's third quarter results grew sequentially driven by
improving market conditions throughout the quarter.
TiO2 volumes increased 16 percent quarter over quarter,
while pricing remained level. TiO2 sales volumes
benefited from sequential volume growth in all regions led by a
significant recovery in South and Central
America. Compared to the third quarter of last year,
sales volumes were higher in Latin
America, level in North
America, and lower slightly in Europe, while volumes lagged in Asia Pacific, largely due to the COVID-19
impact in India. Zircon revenue declined 18 percent
sequentially, as shipment timing led to a reallocation of volumes
between quarters, resulting in 15 percent lower sales volumes
sequentially, and price was impacted by 2 percent driven largely by
product mix. Feedstock and other products revenues improved
sequentially as market conditions supported improved pig iron sales
and mandated CP slag shipments resumed. Tronox delivered
Adjusted EBITDA of $148 million and
an Adjusted EBITDA margin of 22 percent, which reflected the impact
of adjusting our operations to accommodate the effects of the
pandemic as projected. This impact was minimized through
continued cost reductions as well as acquisition synergies totaling
$183 million year to date, with
$134 million reflected in Adjusted
EBITDA.
Commenting on these results, Jeffry N.
Quinn, chairman and chief executive officer, stated, "Our
third quarter results continue to reflect the strength of our
vertically integrated business and our ability to optimize our
operations across a variety of business conditions. Utilizing
our proprietary enterprise optimization capabilities, we adjusted
our operations to accommodate the effects of the pandemic, which
resulted in increased production costs and a slight temporary
impact to margins as we foreshadowed on our second quarter earnings
call. However, the strength of synergies captured and cost
reductions minimized the impact on our margin profile. As the
quarter progressed, we also saw a benefit from the regional
diversity of our revenue profile as demand in all regions returns
to more normalized levels on a staggered basis.
"The trajectory moving out of the third quarter is indicative of
the improving market conditions we expect through the end of the
year and into 2021. While the macro environment remains
uncertain, we anticipate a favorable deviation from normal fourth
quarter seasonality, resulting in strong fourth quarter
TiO2 sales volumes at or above third quarter 2020 and
fourth quarter 2019 levels. Additionally, as a result of
shipment timing and continued recovery in end market demand, fourth
quarter zircon sales volumes are expected to be the strongest of
the year, improving sequentially from the third quarter in the
range of 25 percent.
"Given our continued demonstration of the benefits of our
vertically integrated business model, we are raising our full year
2020 synergy target to $235 million
with $185 million expected to be
reflected in Adjusted EBITDA. Our expectation of incremental
synergy achievement combined with the strength of our commercial
outlook and offsetting cost reductions should result in Adjusted
EBITDA in the fourth quarter in the range of $155 to $170
million with an Adjusted EBITDA margin improvement back to
first half 2020 levels.
"From a liquidity and capital resources perspective, we are
pleased with how well our business is positioned despite the
pandemic, attributable to the strength of our business model.
As we move closer to the end of the year, we are evaluating
incremental debt pay down options utilizing excess liquidity on the
balance sheet to advance further towards our gross debt target of
$2.5 billion."
Mr. Quinn concluded, "I am extremely proud of how focused our
entire Tronox team has remained throughout the prolonged pandemic,
prioritizing safety and looking out for the health and well-being
of one another while continuing to deliver safe, quality, low-cost,
sustainable tons for our customers. The strength in our
performance speaks to the resiliency of our business and reinforces
our confidence in Tronox's positioning for the recovery to
come."
Financial Summary for the Quarter Ending September 30,
2020
Tronox reported revenue of $675
million for the third quarter 2020, a decrease of 12 percent
compared to third quarter 2019 revenues of $768 million. Income from operations of
$49 million compared to $48 million in the year-ago quarter. Net
income attributable to Tronox was $896
million, or $6.18 per diluted
share, compared to a net loss from continuing operations
attributable to Tronox of $13
million, or $(0.09) per
diluted share, in the year-ago quarter. Net income
attributable to Tronox in the third quarter 2020 included
transaction costs related to the acquisition of TTI, a tax
valuation allowance, and other adjustments that totaled
$(889) million or $(6.13) per diluted share. Excluding these
items, adjusted net income attributable to Tronox (Non-GAAP) was
$7 million, or $0.05 per diluted share. Adjusted EBITDA of
$148 million decreased 20 percent
compared to $184 million in the
prior-year quarter.
Third Quarter 2020 vs. Third Quarter 2019
- Revenue of $675 million decreased
12 percent compared to $768 million,
driven largely by impacts from COVID-19
- TiO2 sales of $543
million decreased 10 percent compared to $603 million; sales volumes declined 9 percent
versus the year ago quarter due to impacts from COVID-19; selling
prices declined 1 percent on a U.S. dollar basis and 3 percent on a
local currency basis year over year
- Zircon sales of $56 million
decreased 18 percent from $68
million; selling prices were 11 percent lower and sales
volumes declined 7 percent due to softer market conditions,
primarily in China
- Feedstock and other products sales of $76 million decreased 22 percent from
$97 million due to lower pig iron,
and mandated CP slag volumes due to COVID-19
- Adjusted EBITDA of $148 million
decreased 20 percent compared to $184
million, driven primarily by lower sales due to COVID-19,
increased production costs due to adjusting our operations to
accommodate the effects of the pandemic, pigment plant idle
facility charges and LCM charges, and absence of deferred margin
benefit; this was partially offset by synergies, cost reductions,
improved Australia mining costs,
primarily driven by the legacy Cristal Gingko mining operations
following production downtime in Q3 2019, and FX tailwinds
- Selling, general and administrative ("SG&A") expenses were
$89 million compared to $82 million
- Interest expense of $48 million
decreased from $51 million in the
year-ago quarter
Third Quarter 2020 vs. Second Quarter 2020
- Revenue of $675 million increased
17 percent compared to $578 million,
primarily due to improving TiO2 volumes throughout the
quarter
- TiO2 sales of $543
million increased 17 percent compared to $466 million; sales volumes increased 16 percent
driven by continued strength in North
America, and improved market demand in South America and Europe; selling prices remained level
sequentially on a U.S. dollar basis and declined 1 percent on a
local currency basis
- Zircon sales of $56 million
decreased 18 percent from $68
million, driven by an 15 percent decline in sales volumes
that was a result of shipment timing between quarters; selling
prices declined 2 percent sequentially due to product mix
- Feedstock and other products sales of $76 million increased 73 percent compared to
$44 million, as sales volumes of pig
iron improved and mandated CP slag sales resumed in the
quarter
- Adjusted EBITDA of $148 million
increased 4 percent compared to $142
million, driven primarily by improved TiO2 and
feedstock and other sales volumes, improved operating costs in
South Africa and Australia, and synergies; this was partially
offset by increased production costs due to adjusting our
operations to accommodate the effects of the pandemic, pigment
plant idle facility charges and LCM charges, and FX headwinds
- SG&A expenses were $89
million compared to $80
million
- Interest expense was $48 million
compared to $47 million
Other Financial Information
- As of September 30, 2020, debt
was $3.5 billion and debt, net of
cash and cash equivalents was $2.8
billion
- Liquidity was $1.1 billion as of
September 30, 2020, comprised of cash
and cash equivalents of $722 million
and $376 million available under
revolving credit agreements
- Restricted cash of $27 million
includes $18 million held in escrow
related to the TTI acquisition
- In the third quarter 2020, capital expenditures were
$47 million and depreciation,
depletion and amortization expense was $76
million
- Free Cash Flow for the quarter was $37
million
Webcast Conference Call
Tronox will conduct a webcast conference call on Thursday, October 29, 2020, at 9:00 a.m. ET (New
York). The live call is open to the public via
internet broadcast and telephone.
Internet Broadcast: http://investor.tronox.com
Dial-in Telephone Numbers:
United States: +1.866.270.1533
International: +1.412.317.0797
Conference Call Presentation Slides will be used during
the conference call and will be available on our website:
http://investor.tronox.com
Conference Call Replay: Available via the internet and
telephone beginning on October 29,
2020, 1:00 p.m. ET
(New York), until November 3, 2020, 1:00
p.m. ET (New York)
Internet Replay: http://investor.tronox.com
Replay Dial-in Telephone Numbers:
United States: +1.877.344.7529
International: +1.412.317.0088
Replay Access Code: 10148822
Upcoming Conferences
During the fourth quarter 2020, a member of management is
scheduled to present at the following conferences:
- BofA Securities 2020 Leveraged Finance Virtual Conference,
November 30, 2020
- Citi 2020 Basic Materials Virtual Conference, December 1 - December 2, 2020
Accompanying conference and meeting materials will be available
at http://investor.tronox.com
About Tronox
Tronox Holdings plc is one of the world's leading producers of
high-quality titanium products, including titanium dioxide pigment,
specialty-grade titanium dioxide products and high-purity titanium
chemicals; and zircon. We mine titanium-bearing mineral sands and
operate upgrading facilities that produce high-grade titanium
feedstock materials, pig iron and other minerals. With nearly 7,000
employees across six continents, our rich diversity, unmatched
vertical integration model, and unparalleled operational and
technical expertise across the value chain, position Tronox as the
preeminent titanium dioxide producer in the world. For more
information about how our products add brightness and durability to
paints, plastics, paper and other everyday products, visit
tronox.com.
Cautionary Statement about Forward-Looking Statements
Statements in this release that are not historical are
forward-looking statements within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995. These forward-looking
statements, which are subject to known and unknown risks,
uncertainties and assumptions about us, may include projections of
our future financial performance including the effects of the
COVID-19 pandemic and anticipated synergies based on our growth and
other strategies and anticipated trends in our business. These
statements are only predictions based on our current expectations
and projections about future events. There are important factors
that could cause our actual results, level of activity,
performance, actual synergies, or achievements to differ materially
from the results, level of activity, performance, anticipated
synergies or achievements expressed or implied by the
forward-looking statements. Significant risks and uncertainties may
relate to, but are not limited to, the risk that a regulatory
approval that may be required for the TTI transaction is delayed,
is not obtained or is obtained subject to conditions that are not
anticipated; the risk that the TTI transaction does not close or
that the related transaction agreement is terminated; the risk that
expected synergies, operating efficiencies and other benefits
expected from the TTI transaction will not be realized or will not
be realized within the expected time period; business and market
disruptions related to the COVID-19 pandemic, market conditions and
price volatility for titanium dioxide, zircon and other feedstock
materials, as well as global and regional economic downturns,
including as a result of the COVID-19 pandemic, that adversely
affect the demand for our end-use products; disruptions in
production at our mining and manufacturing facilities; and other
financial, economic, competitive, environmental, political, legal
and regulatory factors. These and other risk factors are discussed
in the Company's filings with the Securities and Exchange
Commission (SEC).
Moreover, we operate in a very competitive and rapidly changing
environment. New risks and uncertainties emerge from time to time,
and it is not possible for our management to predict all risks and
uncertainties, nor can management assess the impact of all factors
on our business or the extent to which any factor, or combination
of factors, may cause actual results to differ materially from
those contained in any forward-looking statements. Although we
believe the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results,
level of activity, performance, synergies or achievements. Neither
we nor any other person assumes responsibility for the accuracy or
completeness of any of these forward-looking statements. You should
not rely upon forward-looking statements as predictions of future
events. Unless otherwise required by applicable laws, we undertake
no obligation to update or revise any forward-looking statements,
whether because of new information or future developments.
Use of Non-GAAP Information
To provide investors and others with additional information
regarding the financial results of Tronox Holdings plc, we have
disclosed in this release certain non-U.S. GAAP operating
performance measures of EBITDA, Adjusted EBITDA, Adjusted EBITDA
margin and Adjusted net loss attributable to Tronox, including its
presentation on a per share basis, and a non-U.S. GAAP liquidity
measure of Free Cash Flow. These non-U.S. GAAP financial
measures are a supplement to and not a substitute for or superior
to, the Company's results presented in accordance with U.S.
GAAP. The non-U.S. GAAP financial measures presented by the
Company may be different from non-U.S. GAAP financial measures
presented by other companies. Specifically, the Company believes
the non-U.S. GAAP information provides useful measures to investors
regarding the Company's financial performance by excluding certain
costs and expenses that the Company believes are not indicative of
its core operating results. The presentation of these
non-U.S. GAAP financial measures is not meant to be considered in
isolation or as a substitute for results or guidance prepared and
presented in accordance with U.S. GAAP. A reconciliation of
the non-U.S. GAAP financial measures to U.S. GAAP results is
included herein.
Unaudited Pro Forma Financial Information
On April 10, 2019, we announced
the completion of the acquisition of the TiO2 business
of Cristal which impacts the comparability of the reported results
for the third quarter of 2020 compared to the third quarter of
2019. Since Tronox and Cristal have combined their respective
businesses effective with the merger date of April 10, 2019, the three and nine months ended
September 30, 2020 reflect the
results of the combined business, while the three and nine months
ended September 30, 2019 reflect the
results of the combined business from April
10, 2019. To assist with a discussion of the third quarter
of 2020 and the third quarter of 2019 results on a comparable
basis, certain supplemental unaudited pro forma income statement
and Adjusted EBITDA information is provided on a consolidated basis
and is referred to as "pro forma information." The pro forma
information has been prepared on a basis consistent with Article 11
of Regulation S-X, assuming the merger and merger-related
divestitures of Cristal's North American TiO2 business
and the 8120 paper laminate grade had been consummated on
January 1, 2018. In preparing this
pro forma information, the historical financial information has
been adjusted to give effect to pro forma adjustments that are (i)
directly attributable to the business combination and other
transactions presented herein, such as the merger-related
divestitures, (ii) factually supportable, and (iii) expected to
have a continuing impact on the combined entity's consolidated
results. The pro forma information is based on management's
assumptions and is presented for illustrative purposes and does not
purport to represent what the results of operations would actually
have been if the business combination and merger-related
divestitures had occurred as of the dates indicated or what the
results would be for any future periods. Also, the pro forma
information does not include the impact of any revenue, cost or
other operating synergies in the periods prior to the acquisition
that may result from the business combination or any related
restructuring costs.
Media Contact: Melissa Zona
+1.636.751.4057
Investor Contact: Jennifer
Guenther
+1.646.960.6598
TRONOX HOLDINGS
PLC
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (U.S. GAAP)
|
(UNAUDITED)
|
(Millions of U.S.
dollars, except share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net
sales
|
$
675
|
|
$
768
|
|
$
1,975
|
|
$
1,949
|
Cost of goods
sold
|
536
|
|
635
|
|
1,532
|
|
1,614
|
Contract
loss
|
-
|
|
-
|
|
-
|
|
19
|
Gross
profit
|
139
|
|
133
|
|
443
|
|
316
|
Selling, general and
administrative expenses
|
89
|
|
82
|
|
263
|
|
252
|
Restructuring
|
1
|
|
3
|
|
3
|
|
13
|
Income from
operations
|
49
|
|
48
|
|
177
|
|
51
|
Interest
expense
|
(48)
|
|
(51)
|
|
(140)
|
|
(154)
|
Interest
income
|
1
|
|
4
|
|
6
|
|
16
|
Loss on
extinguishment of debt
|
-
|
|
-
|
|
-
|
|
(2)
|
Other income
(expense), net
|
7
|
|
(1)
|
|
19
|
|
2
|
Income (loss) from
continuing operations before income taxes
|
9
|
|
-
|
|
62
|
|
(87)
|
Income tax benefit
(provision)
|
893
|
|
(12)
|
|
876
|
|
(10)
|
Net income (loss)
from continuing operations
|
902
|
|
(12)
|
|
938
|
|
(97)
|
Net income from
discontinued operations, net of tax
|
-
|
|
6
|
|
-
|
|
5
|
Net income
(loss)
|
902
|
|
(6)
|
|
938
|
|
(92)
|
Net income
attributable to noncontrolling interest
|
6
|
|
7
|
|
14
|
|
17
|
Net income (loss)
attributable to Tronox Holdings plc
|
$
896
|
|
$
(13)
|
|
$
924
|
|
$
(109)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
per share, basic:
|
|
|
|
|
|
|
|
Continuing
operations
|
$
6.24
|
|
$
(0.13)
|
|
$
6.45
|
|
$
(0.82)
|
Discontinued
operations
|
$
-
|
|
$
0.04
|
|
$
-
|
|
$
0.04
|
Net income (loss)
per share, basic
|
$
6.24
|
|
$
(0.09)
|
|
$
6.45
|
|
$
(0.78)
|
|
|
|
|
|
|
|
|
Net income (loss)
per share, diluted:
|
|
|
|
|
|
|
|
Continuing
operations
|
$
6.18
|
|
$
(0.13)
|
|
$
6.42
|
|
$
(0.82)
|
Discontinued
operations
|
$
-
|
|
$
0.04
|
|
$
-
|
|
$
0.04
|
Net income (loss)
per share, diluted
|
$
6.18
|
|
$
(0.09)
|
|
$
6.42
|
|
$
(0.78)
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding, basic (in thousands)
|
143,579
|
|
142,278
|
|
143,245
|
|
139,158
|
Weighted average
shares outstanding, diluted (in thousands)
|
145,067
|
|
142,278
|
|
143,969
|
|
139,158
|
|
|
|
|
|
|
|
|
Other Operating
Data:
|
|
|
|
|
|
|
|
Capital
expenditures
|
47
|
|
59
|
|
129
|
|
140
|
Depreciation,
depletion and amortization expense
|
76
|
|
74
|
|
219
|
|
205
|
TRONOX HOLDINGS
PLC
|
RECONCILIATION OF
NON-U.S. GAAP FINANCIAL MEASURES
|
(UNAUDITED)
|
(Millions of U.S.
dollars, except share and per share data)
|
|
|
|
|
|
|
|
|
RECONCILIATION OF
NET INCOME (LOSS) FROM CONTINUING OPERATIONS
|
ATTRIBUTABLE TO
TRONOX HOLDINGS PLC (U.S. GAAP)
|
TO ADJUSTED NET
INCOME FROM CONTINUING OPERATIONS
|
ATTRIBUTABLE TO
TRONOX HOLDINGS PLC (NON-U.S. GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Tronox Holdings plc (U.S. GAAP)
|
$
896
|
|
$
(13)
|
|
$
924
|
|
$
(109)
|
Net income from
discontinued operations, net of tax (U.S. GAAP)
|
-
|
|
6
|
|
-
|
|
5
|
Net income (loss)
from continuing operations attributable to Tronox Holdings plc
(U.S. GAAP)
|
$
896
|
|
$
(19)
|
|
$
924
|
|
$
(114)
|
Inventory step-up
(a)
|
-
|
|
38
|
|
-
|
|
88
|
Contract loss
(b)
|
-
|
|
-
|
|
-
|
|
14
|
Transaction costs
(c)
|
6
|
|
-
|
|
10
|
|
29
|
Restructuring
(d)
|
1
|
|
3
|
|
2
|
|
13
|
Integration costs
(e)
|
1
|
|
4
|
|
9
|
|
8
|
Loss on
extinguishment of debt (f)
|
-
|
|
-
|
|
-
|
|
2
|
Reversal of U.S. tax
valuation allowance (g)
|
(895)
|
|
-
|
|
(895)
|
|
-
|
Other (h)
|
(2)
|
|
-
|
|
(2)
|
|
-
|
Tax valuation
allowance (i)
|
-
|
|
-
|
|
(2)
|
|
-
|
Charge for capital
gains tax payment to Exxaro (j)
|
-
|
|
4
|
|
-
|
|
6
|
Adjusted net income
from continuing operations attributable to Tronox Holdings plc
(non-U.S. GAAP) (1)
|
$
7
|
|
$
30
|
|
$
46
|
|
$
46
|
|
|
|
|
|
|
|
|
Diluted net income
(loss) per share from continuing operations (U.S. GAAP)
|
$
6.18
|
|
$
(0.13)
|
|
$
6.42
|
|
$
(0.82)
|
|
|
|
|
|
|
|
|
Inventory step-up,
per share
|
-
|
|
0.26
|
|
-
|
|
0.63
|
Contract loss, per
share
|
-
|
|
-
|
|
-
|
|
0.10
|
Transaction costs,
per share
|
0.04
|
|
-
|
|
0.07
|
|
0.21
|
Restructuring, per
share
|
0.01
|
|
0.02
|
|
0.01
|
|
0.09
|
Integration costs,
per share
|
0.01
|
|
0.03
|
|
0.06
|
|
0.06
|
Loss on
extinguishment of debt, per share
|
-
|
|
-
|
|
-
|
|
0.02
|
Reversal of tax
valuation allowance, per share
|
(6.17)
|
|
-
|
|
(6.22)
|
|
-
|
Other, per
share
|
(0.02)
|
|
-
|
|
(0.01)
|
|
-
|
Tax valuation
allowance, per share
|
-
|
|
-
|
|
(0.01)
|
|
-
|
Charge for capital
gains tax payment to Exxaro, per share
|
-
|
|
0.03
|
|
-
|
|
0.04
|
Diluted adjusted net
income per share from continuing operations attributable to Tronox
Holdings plc (non-U.S. GAAP)
|
$
0.05
|
|
$
0.21
|
|
$
0.32
|
|
$
0.33
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding, diluted (in thousands)
|
145,067
|
|
142,984
|
|
143,969
|
|
140,288
|
(1) Only the
restructuring, integration costs, inventory step-up and contract
loss amounts have been tax impacted. No income tax impacts
have been given to other items as they were recorded in
jurisdictions with full valuation allowances.
|
|
|
|
|
|
|
|
|
(a) Represents a
net-of-tax charge related to the recognition of a step-up in value
of inventories as a result of purchase accounting.
|
(b) Represents a
net-of-tax charge for the estimated losses we expect to incur under
the supply agreement with Venator which was recorded in "Contract
loss" in our Consolidated Statements of
Operations.
|
(c) Represents
transaction costs primarily associated with the Cristal Transaction
in 2019 and TTI Transaction in 2020 which were recorded in
"Selling, general and administrative expenses" in the unaudited
Condensed Consolidated Statements of Operations.
|
(d) Represents
amounts for employee-related costs, including severance, net of
tax.
|
(e)
Represents Integration costs associated with the Cristal
acquisition after the acquisition which were recorded in "Selling,
general and administrative expenses" in the unaudited Condensed
Consolidated Statements of Operations, net of tax.
|
(f) 2019 amounts
represent the loss in connection with the modification of the Wells
Fargo Revolver and termination of the ABSA Revolver and a voluntary
prepayment made on the Term Loan Facility.
|
(g) Represents the
reversal of the valuation allowance associated with unlimited lived
deferred tax assets within our U.S. jurisdiction.
|
(h) Represents other
activity not representative of ongoing operations of the
Company.
|
(i) Represents a full
valuation allowance established against the deferred tax assets
within our Saudi Arabia jurisdiction during the second quarter of
2020.
|
(j) Represents the
expected payment to Exxaro for capital gains tax on the disposal of
its ordinary shares in Tronox Holding plc included in "Other
expense, net" in the unaudited Condensed Consolidated Statements of
Operations.
|
TRONOX HOLDINGS
PLC
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(UNAUDITED)
|
(Millions of U.S.
dollars, except share and per share data)
|
|
|
|
|
|
|
|
|
|
September 30,
2020
|
|
December 31,
2019
|
ASSETS
|
|
|
|
Current
Assets
|
|
|
|
Cash and cash
equivalents
|
$
722
|
|
$
302
|
Restricted
cash
|
27
|
|
9
|
Accounts receivable
(net of allowance for credit losses of $4 million and $5 million as
of September 30, 2020 and December 31, 2019,
respectively)
|
484
|
|
482
|
Inventories,
net
|
1,176
|
|
1,131
|
Prepaid and other
assets
|
174
|
|
143
|
Income taxes
receivable
|
3
|
|
6
|
Total current
assets
|
2,586
|
|
2,073
|
|
|
|
|
Noncurrent
Assets
|
|
|
|
Property, plant and
equipment, net
|
1,651
|
|
1,762
|
Mineral leaseholds,
net
|
776
|
|
852
|
Intangible assets,
net
|
203
|
|
208
|
Lease right of use
assets, net
|
86
|
|
101
|
Deferred tax
assets
|
997
|
|
110
|
Other long-term
assets
|
177
|
|
162
|
Total
assets
|
$
6,476
|
|
$
5,268
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
Liabilities
|
|
|
|
Accounts
payable
|
$
306
|
|
$
342
|
Accrued
liabilities
|
364
|
|
283
|
Short-term lease
liabilities
|
38
|
|
38
|
Short-term
debt
|
6
|
|
-
|
Long-term debt due
within one year
|
48
|
|
38
|
Income taxes
payable
|
2
|
|
1
|
Total current
liabilities
|
764
|
|
702
|
|
|
|
|
Noncurrent
Liabilities
|
|
|
|
Long-term debt,
net
|
3,424
|
|
2,988
|
Pension and
postretirement healthcare benefits
|
138
|
|
160
|
Asset retirement
obligations
|
152
|
|
142
|
Environmental
liabilities
|
70
|
|
65
|
Long-term lease
liabilities
|
46
|
|
62
|
Deferred tax
liabilities
|
152
|
|
184
|
Other long-term
liabilities
|
42
|
|
49
|
Total
liabilities
|
4,788
|
|
4,352
|
|
|
|
|
Commitments and
Contingencies
|
-
|
|
-
|
Shareholders'
Equity
|
|
|
|
Tronox Holdings plc
ordinary shares, par value $0.01 — 143,530,571 shares issued and
outstanding at September 30, 2020 and 141,900,459 shares issued and
outstanding at December 31, 2019
|
1
|
|
1
|
Capital in excess of
par value
|
1,862
|
|
1,846
|
Retained earnings
(accumulated deficit)
|
400
|
|
(493)
|
Accumulated other
comprehensive loss
|
(712)
|
|
(606)
|
Total Tronox
Holdings plc shareholders' equity
|
1,551
|
|
748
|
Noncontrolling
interest
|
137
|
|
168
|
Total
equity
|
1,688
|
|
916
|
Total liabilities
and equity
|
$
6,476
|
|
$
5,268
|
TRONOX HOLDINGS
PLC
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(UNAUDITED)
|
(Millions of U.S.
dollars)
|
|
|
|
|
|
|
|
|
|
Nine Months
Ended
September 30,
|
|
2020
|
|
2019
|
Cash Flows from
Operating Activities:
|
|
|
|
Net income
(loss)
|
$
938
|
|
$
(92)
|
Net income from
discontinued operations, net of tax
|
-
|
|
5
|
Net income (loss)
from continuing operations
|
$
938
|
|
$
(97)
|
Adjustments to
reconcile net income (loss) from continuing operations to net cash
provided by operating activities, continuing operations:
|
|
|
|
Depreciation,
depletion and amortization
|
219
|
|
205
|
Reversal of U.S.
valuation allowance
|
(895)
|
|
-
|
Deferred income taxes
- other
|
9
|
|
(7)
|
Share-based
compensation expense
|
19
|
|
24
|
Amortization of
deferred debt issuance costs and discount on debt
|
7
|
|
6
|
Loss on
extinguishment of debt
|
-
|
|
2
|
Contract
loss
|
-
|
|
19
|
Acquired inventory
step-up recognized in earnings
|
-
|
|
95
|
Other non-cash items
affecting net (loss) income from continuing operations
|
44
|
|
20
|
Changes in assets and
liabilities:
|
|
|
|
(Increase) decrease
in accounts receivable, net of allowance for credit
losses
|
(13)
|
|
(34)
|
(Increase) decrease
in inventories, net
|
(100)
|
|
14
|
(Increase) decrease
in prepaid and other assets
|
(38)
|
|
2
|
Increase in accounts
payable and accrued liabilities
|
18
|
|
6
|
Net changes in income
tax payables and receivables
|
-
|
|
(5)
|
Changes in other
non-current assets and liabilities
|
(52)
|
|
(13)
|
Cash provided by
operating activities - continuing operations
|
156
|
|
237
|
|
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
Capital
expenditures
|
(129)
|
|
(140)
|
Cristal
Acquisition
|
-
|
|
(1,675)
|
Proceeds from sale of
Ashtabula
|
-
|
|
708
|
Insurance
proceeds
|
1
|
|
10
|
Loans
|
(24)
|
|
(25)
|
Proceeds from sale of
assets
|
1
|
|
2
|
Cash used in
investing activities - continuing operations
|
(151)
|
|
(1,120)
|
|
|
|
|
Cash Flows from
Financing Activities:
|
|
|
|
Repayments of
short-term debt
|
(7)
|
|
-
|
Repayments of
long-term debt
|
(23)
|
|
(272)
|
Proceeds from
long-term debt
|
500
|
|
222
|
Proceeds from
short-term debt
|
13
|
|
-
|
Repurchase of common
stock
|
-
|
|
(288)
|
Acquisition of
noncontrolling interest
|
-
|
|
(148)
|
Debt issuance
costs
|
(10)
|
|
(4)
|
Dividends
paid
|
(30)
|
|
(21)
|
Restricted stock and
performance-based shares settled in cash for withholding
taxes
|
(3)
|
|
(6)
|
Cash provided by
(used in) financing activities - continuing operations
|
440
|
|
(517)
|
|
|
|
|
Discontinued
Operations:
|
|
|
|
Cash used in
operating activities
|
-
|
|
29
|
Cash used in
investing activities
|
-
|
|
(1)
|
Net cash flows
used by discontinued operations
|
-
|
|
28
|
|
|
|
|
Effects of
exchange rate changes on cash and cash equivalents and restricted
cash
|
(7)
|
|
(8)
|
|
|
|
|
Net increase
(decrease) in cash, cash equivalents and restricted
cash
|
438
|
|
(1,380)
|
Cash, cash
equivalents and restricted cash at beginning of
period
|
311
|
|
1,696
|
Cash, cash
equivalents and restricted cash at end of period
|
$
749
|
|
$
316
|
TRONOX HOLDINGS
PLC
|
RECONCILIATION OF
NET INCOME (LOSS) TO EBITDA AND ADJUSTED EBITDA (NON-U.S.
GAAP)
|
(UNAUDITED)
|
(Millions of U.S.
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
Net income (loss)
(U.S. GAAP)
|
$
902
|
|
$
(6)
|
|
$
938
|
|
$
(92)
|
Income from
discontinued operations, net of tax (U.S. GAAP)
|
-
|
|
6
|
|
-
|
|
5
|
Net income (loss)
from continuing operations (U.S. GAAP)
|
902
|
|
(12)
|
|
938
|
|
(97)
|
Interest
expense
|
48
|
|
51
|
|
140
|
|
154
|
Interest
income
|
(1)
|
|
(4)
|
|
(6)
|
|
(16)
|
Income tax provision
(benefit)
|
(893)
|
|
12
|
|
(876)
|
|
10
|
Depreciation,
depletion and amortization expense
|
76
|
|
74
|
|
219
|
|
205
|
EBITDA (non-U.S.
GAAP)
|
132
|
|
121
|
|
415
|
|
256
|
Inventory step-up
(a)
|
-
|
|
40
|
|
-
|
|
95
|
Contract loss
(b)
|
-
|
|
-
|
|
-
|
|
19
|
Share-based
compensation (c)
|
8
|
|
9
|
|
19
|
|
24
|
Transaction costs
(d)
|
6
|
|
-
|
|
10
|
|
29
|
Restructuring
(e)
|
1
|
|
3
|
|
3
|
|
13
|
Integration costs
(f)
|
1
|
|
4
|
|
10
|
|
8
|
Loss on
extinguishment of debt (g)
|
-
|
|
-
|
|
-
|
|
2
|
Foreign currency
remeasurement (h)
|
(2)
|
|
(1)
|
|
(10)
|
|
(5)
|
Charge for capital
gains tax payment to Exxaro (i)
|
-
|
|
4
|
|
-
|
|
6
|
Other items
(j)
|
2
|
|
4
|
|
17
|
|
12
|
Adjusted EBITDA
(non-U.S. GAAP)
|
$
148
|
|
$
184
|
|
$
464
|
|
$
459
|
(a) 2019 amount
represents a pre-tax charge related to the recognition of a step-up
in value of inventories as a result of purchase
accounting.
|
(b) 2019 amount
represents a pre-tax charge for the estimated losses we expect to
incur under the supply agreement with Venator.
|
(c) Represents
non-cash share-based compensation.
|
(d) 2020 and 2019
amounts represent transaction costs associated with the TTI
Transaction and Cristal Transaction, respectively, which were
recorded in "Selling, general and administrative expenses" in the
unaudited Condensed Consolidated Statements of
Operations.
|
(e) Represents
amounts for employee-related costs, including
severance.
|
(f) Represents
integration costs associated with the Cristal acquisition after the
acquisition which were recorded in "Selling, general and
administrative expenses" in the unaudited Condensed Consolidated
Statements of Operations.
|
(g) 2019 amount
represents the loss in connection with the modification of the
Wells Fargo Revolver and termination of the ABSA
Revolver.
|
(h) Represents
realized and unrealized gains and losses associated with foreign
currency remeasurement related to third-party and intercompany
receivables and liabilities denominated in a currency other than
the functional currency of the entity holding them, which are
included in "Other income (expense), net" in the unaudited
Condensed Consolidated Statements of Operations.
|
(i) Represents the
payment owed to Exxaro for capital gains tax on the disposal of its
ordinary shares in Tronox Holdings plc included in and "Other
income (expense), net" in the unaudited Condensed Consolidated
Statements of Operations.
|
(j) Includes noncash
pension and postretirement costs, asset write-offs, accretion
expense and other items included in "Selling general and
administrative expenses", "Cost of goods sold" and "Other income
(expense), net" in the unaudited Condensed Consolidated Statements
of Operations.
|
TRONOX HOLDINGS
PLC
|
FREE CASH FLOW
(NON-U.S. GAAP)
|
(UNAUDITED)
|
(Millions of U.S.
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table
reconciles cash used in operating activities to free cash flow for
the nine months ended September 30, 2020:
|
|
|
|
|
Consolidated
|
Cash provided by
operating activities - continuing operations
|
|
$
156
|
Capital
expenditures
|
|
(129)
|
Free cash flow (non-U.S. GAAP)
|
|
$
27
|
TRONOX HOLDINGS
PLC
|
PRO FORMA
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (U.S.
GAAP)
|
(UNAUDITED)
|
(Millions of U.S.
dollars, except share and per share data)
|
|
|
|
|
|
|
|
|
|
Proforma
amounts
|
|
Proforma
amounts
|
|
September
30,
|
|
Nine Months
Ended
September 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net
sales
|
$
675
|
|
$
768
|
|
$ 1,975
|
|
$ 2,315
|
Cost of goods
sold
|
536
|
|
595
|
|
1,532
|
|
1,822
|
Gross
profit
|
139
|
|
173
|
|
443
|
|
493
|
Selling, general and
administrative expenses
|
89
|
|
82
|
|
263
|
|
262
|
Restructuring
|
1
|
|
3
|
|
3
|
|
13
|
Income from
operations
|
49
|
|
88
|
|
177
|
|
218
|
Interest
expense
|
(48)
|
|
(51)
|
|
(140)
|
|
(160)
|
Interest
income
|
1
|
|
4
|
|
6
|
|
10
|
Loss on
extinguishment of debt
|
-
|
|
-
|
|
-
|
|
(2)
|
Other expense,
net
|
7
|
|
(1)
|
|
19
|
|
1
|
Income from
continuing operations before income taxes
|
9
|
|
40
|
|
62
|
|
67
|
Income tax benefit
(provision)
|
893
|
|
(14)
|
|
876
|
|
(27)
|
Net income from
continuing operations
|
902
|
|
26
|
|
938
|
|
40
|
Net income
attributable to noncontrolling interest
|
6
|
|
7
|
|
14
|
|
18
|
Net income from
continuing operations attributable to Tronox Holdings
plc
|
$
896
|
|
$
19
|
|
$
924
|
|
$
22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income from
continuing operations per share, diluted
|
$
6.18
|
|
$
0.13
|
|
$
6.42
|
|
$
0.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding, diluted (in thousands)
|
145,067
|
|
142,984
|
|
143,969
|
|
153,916
|
TRONOX HOLDINGS
PLC
|
PRO FORMA
RECONCILIATION OF NON-U.S. GAAP FINANCIAL MEASURES
|
(UNAUDITED)
|
(Millions of U.S.
dollars, except share and per share data)
|
|
|
|
|
|
RECONCILIATION OF
PRO FORMA NET INCOME FROM CONTINUING OPERATIONS
|
ATTRIBUTABLE TO
TRONOX HOLDINGS PLC (U.S. GAAP)
|
TO ADJUSTED NET
INCOME FROM CONTINUING OPERATIONS
|
ATTRIBUTABLE TO
TRONOX HOLDINGS PLC (NON-U.S. GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proforma
amounts
|
|
Proforma
amounts
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net income from
continuing operations attributable to Tronox Holdings
plc (U.S. GAAP)
|
$
896
|
|
$
19
|
|
$
924
|
|
$
22
|
Transaction
costs
|
6
|
|
-
|
|
10
|
|
-
|
Restructuring
|
1
|
|
3
|
|
2
|
|
13
|
Integration
costs
|
1
|
|
4
|
|
9
|
|
8
|
Loss on
extinguishment of debt
|
-
|
|
-
|
|
-
|
|
2
|
Reversal of tax
valuation allowance
|
(895)
|
|
-
|
|
(895)
|
|
-
|
Other
|
(2)
|
|
-
|
|
(2)
|
|
-
|
Tax valuation
allowance
|
-
|
|
-
|
|
(2)
|
|
-
|
Charge for capital
gains tax payment to Exxaro
|
-
|
|
4
|
|
-
|
|
6
|
Adjusted net income
attributable to Tronox Holdings plc (non-U.S.
GAAP)
|
$
7
|
|
$
30
|
|
$
46
|
|
$
51
|
|
|
|
|
|
|
|
|
Diluted net income
per share from continuing operations (U.S. GAAP)
|
$
6.18
|
|
$
0.13
|
|
$
6.42
|
|
$
0.14
|
|
|
|
|
|
|
|
|
Transaction costs,
per share
|
0.04
|
|
-
|
|
0.07
|
|
-
|
Restructuring, per
share
|
0.01
|
|
0.02
|
|
0.01
|
|
0.09
|
Integration costs,
per share
|
0.01
|
|
0.03
|
|
0.06
|
|
0.05
|
Loss on
extinguishment of debt, per share
|
-
|
|
-
|
|
-
|
|
0.01
|
Reversal of tax
valuation allowance, per share
|
(6.17)
|
|
-
|
|
(6.22)
|
|
-
|
Other, per
share
|
(0.02)
|
|
-
|
|
(0.01)
|
|
-
|
Tax valuation
allowance, per share
|
-
|
|
-
|
|
(0.01)
|
|
-
|
Charge for capital
gains tax payment to Exxaro, per share
|
-
|
|
0.03
|
|
-
|
|
0.04
|
Diluted adjusted net
income per share attributable to Tronox Holdings plc (non-U.S.
GAAP)
|
$
0.05
|
|
$
0.21
|
|
$
0.32
|
|
$
0.33
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding, diluted (in thousands)
|
145,067
|
|
142,984
|
|
143,969
|
|
153,916
|
TRONOX HOLDINGS
PLC
|
PRO FORMA
RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA
(NON-U.S. GAAP)
|
(UNAUDITED)
|
(Millions of U.S.
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro Forma
Three Months Ended
September 30,
|
|
Pro Forma
Nine Months Ended
September 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
Net income from
continuing operations (U.S. GAAP)
|
$
902
|
|
$
26
|
|
$
938
|
|
$
40
|
Interest
expense
|
48
|
|
51
|
|
140
|
|
160
|
Interest
income
|
(1)
|
|
(4)
|
|
(6)
|
|
(10)
|
Income tax provision
(benefit)
|
(893)
|
|
14
|
|
(876)
|
|
27
|
Depreciation,
depletion and amortization expense
|
76
|
|
74
|
|
219
|
|
248
|
EBITDA (non-U.S.
GAAP)
|
132
|
|
161
|
|
415
|
|
465
|
Share-based
compensation
|
8
|
|
9
|
|
19
|
|
24
|
Transaction
costs
|
6
|
|
-
|
|
10
|
|
-
|
Restructuring
|
1
|
|
3
|
|
3
|
|
13
|
Integration
costs
|
1
|
|
4
|
|
10
|
|
8
|
Loss on
extinguishment of debt
|
-
|
|
-
|
|
-
|
|
2
|
Foreign currency
remeasurement
|
(2)
|
|
(1)
|
|
(10)
|
|
(5)
|
Charge for capital
gains tax payment to Exxaro
|
-
|
|
4
|
|
-
|
|
6
|
Other
items
|
2
|
|
4
|
|
17
|
|
12
|
Adjusted EBITDA
(non-U.S. GAAP)
|
$
148
|
|
$
184
|
|
$
464
|
|
$
525
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/tronox-reports-third-quarter-2020-financial-results-301162236.html
SOURCE Tronox Holdings plc