LEXINGTON, Ky., April 28, 2021 /PRNewswire/ -- Valvoline Inc.
(NYSE: VVV), a leading supplier of premium branded lubricants and
automotive services, today reported financial results for its
second fiscal quarter ended March 31,
2021. All comparisons in this press release are made to the
same prior-year period unless otherwise noted.
"We continue to see healthy demand and loyalty to our brand from
consumers and customers," said Sam
Mitchell, CEO of Valvoline. "Quick Lubes had record 20%
system-wide same-store sales growth and improved margins for the
quarter, and International saw robust volume, top-line and earnings
growth. Core North America
generated top-line growth and continued to provide significant
operating cash flow. This strong cash generation is a key component
of our strategic transformation to a more service-driven company by
funding our growth initiatives in Quick Lubes and
International."
"Based on our strong results and confidence in the business, we
are increasing our outlook for the year to $590 million to $610
million in adjusted EBITDA."
Second-Quarter Results
Reported second-quarter 2021 net income and EPS were
$68 million and $0.37, respectively. These results included
$15 million ($0.09 per diluted share) of after-tax expense
primarily related to debt extinguishment costs of $27 million and were partially offset by pension
and other post-employment benefit (OPEB) income of $10 million as well as a business interruption
insurance recovery of $2 million.
Reported second-quarter 2020 net income and EPS were $63 million and $0.33, respectively. These results included
after-tax expense of $11 million
($0.06 per diluted share) primarily
related to debt redemption costs of $14
million and pension and OPEB income of $7 million as well as other expenses totaling
$4 million.
Second-quarter 2021 adjusted net income and adjusted EPS were
$83 million and $0.46, respectively, compared to adjusted net
income of $74 million and adjusted
EPS of $0.39 in the prior-year
period. Adjusted EBITDA in the quarter was $152 million, a 13% increase compared to the
prior-year period. (See Tables 7 and
8 for reconciliations of adjusted earnings.)
The prior-year period included a reduction to variable
compensation expense due to lower earnings expectations at the
onset of the COVID-19 pandemic, resulting in a $21 million unfavorable impact year-over-year.
Current-period earnings also included a last-in-first-out (LIFO)
inventory accounting charge of $5
million versus a LIFO credit of $4
million in the prior-year period. Excluding these
unfavorable impacts, adjusted EBITDA in the quarter increased
38%.
Operating Segment Results
Quick Lubes
- Total sales growth of 34% to $285
million; SSS grew 20.2% system-wide, 19.8% for
company-operated stores and 20.4% for franchised stores
- Operating income increased $23
million or 58% to $63 million;
adjusted EBITDA increased $29 million
or 58% to $79 million
- Quick Lubes ended the quarter with 1,548 total company-operated
and franchised stores, a net increase of 129 new stores or 9%
versus the prior year
The Quick Lubes segment continued its momentum with strong top-
and bottom-line growth. For the quarter, sales grew 34% and
adjusted EBITDA was up 58%. System-wide SSS grew 20.2% versus the
prior-year period with strong contribution from franchised and
company-operated stores and a balance between transaction and
average ticket increases. This led to normalized SSS growth of more
than 10% (based on average two-year growth).
Year-over-year growth in profitability in the quarter was driven
by record SSS performance, the addition of 129 net new stores, a
unit increase of 9%, and improved margins in line with the
Company's long-term growth strategy. Gross margin expansion of 320
basis points was due primarily to improved premium mix and customer
traffic versus the prior-year period.
Core North America
- Sales increased 2% to $242
million
- Operating income decreased $9
million or 19% to $38 million;
adjusted EBITDA decreased $9 million
or 18% to $42 million
- Excluding a $7 million
unfavorable, non-cash year-over-year LIFO inventory impact,
adjusted EBITDA declined 4%
Volume growth of 7% was balanced across both the retail and
installer channels, with the retail channel continuing to benefit
from solid promotional performance and effective marketing. Demand
in the installer channel continues to recover from the impacts of
COVID-19.
The decline in segment profitability was primarily attributable
to short-term price-cost lag due to rising raw material cost
impacts – including an unfavorable, non-cash, year-over-year LIFO
accounting impact of $7 million. As
it has done historically, the Company is executing pricing
increases which are expected to offset rising raw material
costs.
International
- Sales increased 36% to $174
million; lubricant volume increased 28% to 17.6 million
gallons
- Lubricant volume from unconsolidated joint ventures increased
53% to 13.2 million gallons
- Operating income increased $10
million or 56% to $28 million;
adjusted EBITDA increased $12 million
or 63% to $31 million
The International segment had another exceptional quarter with
robust sales and profitability growth, including all regions
contributing double-digit volume growth. The strong performance was
led by the Asia-Pacific region,
particularly China, which had a
larger COVID-19 impact in the prior-year period compared to other
markets.
Top-line growth and favorable foreign exchange impacts as well
as an increased contribution from unconsolidated joint ventures
contributed to the significant growth in profitability.
Balance Sheet and Cash Flow
- Total debt of approximately $1.7
billion and net debt of approximately $1.5 billion
- Year-to-date cash flow from operations of $190 million; discretionary cash flow (cash flow
from operations less maintenance capital) of $175 million; free cash flow of $116 million
- Repurchased $42 million or 1.7
million shares of common stock, leaving 181 million shares
outstanding as of March 31, 2021
Outlook
The guidance provided in this press release is based on current
expectations, including those surrounding the ongoing COVID-19
pandemic.
"Our performance in the first half of the year has been
outstanding," Mitchell said. "We are seeing continued strong
momentum as we have remained focused on executing our superior
in-store experience and staying connected to our customers. With
Quick Lubes already representing half of our adjusted EBITDA this
quarter, we are accelerating our shift to a more service-centric
business."
Mitchell continued, "I have never been more optimistic about our
future than I am today. We remain focused on our strategy, driving
faster growth, higher margins and stronger returns as our retail
services business continues to perform at a high level.
Based on our strong performance throughout the first half of the
year, we are raising our fiscal 2021 guidance for adjusted EBITDA,
along with our outlook for overall sales growth, same-store sales
growth, adjusted EPS and free cash flow. We expect Quick Lubes to
generate more than half of our adjusted EBITDA for the balance of
the year and expect that this strong performance will offset any
near-term margin pressure from rising raw material costs further
highlighting the benefits of our multiple routes to market."
Information regarding the Company's outlook for fiscal 2021 is
provided in the table below:
|
Updated
Outlook
|
Prior
Outlook
|
Operating
Segments
|
|
|
Sales
growth
|
23 - 25%
|
14 - 16%
|
New Quick Lube store
additions (includes company-operated, franchise and
acquisitions)
|
no change
|
140 - 160
|
Quick Lubes
system-wide same-store sales growth
|
18 - 20%
|
12 - 14%
|
Normalized1
same-store sales growth
|
9 - 11%
|
6 - 8%
|
Adjusted
EBITDA
|
$590 - $610
million
|
$560 - $580
million
|
Corporate
Items
|
|
|
Adjusted effective
tax rate
|
no change
|
25 - 26%
|
Adjusted
EPS
|
$1.72 -
$1.82
|
$1.57 -
$1.67
|
Capital
expenditures
|
no change
|
$160 - $170
million
|
Free cash
flow
|
$250 - $270
million
|
$200 - $220
million
|
1 Same-store sales growth excluding
estimated COVID-19 impacts in March - May 2020 period; based on
average two-year same-store sales growth between fiscal 2020 and
2021 outlook.
|
Valvoline's outlook for adjusted EBITDA, adjusted EPS and the
adjusted effective tax rate are non-GAAP financial measures that
exclude or will otherwise be adjusted for items impacting
comparability. Valvoline is unable to reconcile these
forward-looking non-GAAP financial measures to GAAP net income and
EPS for fiscal 2021 without unreasonable efforts, as the Company is
currently unable to predict with a reasonable degree of certainty
the type and extent of certain items that would be expected to
impact GAAP net income and EPS in fiscal 2021 but would not impact
non-GAAP adjusted results.
Conference Call Webcast
Valvoline will host a live audio webcast of its fiscal second
quarter 2021 conference call at 9 a.m. ET on Thursday, April 29, 2021. The webcast and
supporting materials will be accessible through Valvoline's website
at http://investors.valvoline.com. Following the live event, an
archived version of the webcast and supporting materials will be
available.
Basis of Presentation
Certain prior year amounts have been reclassified to conform to
current year presentation. In addition, the Company adopted the
current expected credit losses accounting standard, effective at
the beginning of fiscal 2021 using the required modified
retrospective approach. Under this approach, financial information
related to periods prior to adoption were not adjusted and are
presented as originally reported under the previous accounting
guidance. The effects of adopting the new current expected credit
losses standard were recognized as an adjustment that increased
opening retained deficit by approximately $2
million. The Company expects the ongoing impacts will not be
material to the consolidated financial statements.
Key Business Measures
Valvoline tracks its operating performance and manages its
business using certain key measures, including system-wide,
company-operated and franchised store counts and same-store sales;
Express Care store counts; lubricant volumes sold by unconsolidated
joint ventures and total lubricant volumes sold; and percentage of
premium lubricants sold. Management believes these measures are
useful to evaluating and understanding Valvoline's operating
performance and should be considered as supplements to, not
substitutes for, Valvoline's sales and operating income, as
determined in accordance with U.S. GAAP.
Sales in the Quick Lubes reportable segment are influenced by
the number of service center stores and the business performance of
those stores. Stores are considered open upon acquisition or
opening for business. Temporary store closings remain in the
respective store counts with only permanent store closures
reflected in the activity and end of period store counts. SSS is
defined as sales by U.S. Quick Lubes service center stores
(company-operated, franchised and the combination of these for
system-wide SSS), with new stores, including franchised
conversions, excluded from the metric until the completion of their
first full fiscal year in operation as this period is generally
required for new store sales levels to begin to normalize. Quick
Lubes sales are limited to sales at company-operated stores, sales
of lubricants and other products to independent franchisees and
Express Care operators and royalties and other fees from franchised
stores. Although Valvoline does not recognize store-level sales
from franchised or Express Care stores as sales in its Statements
of Consolidated Income, management believes system-wide and
franchised SSS comparisons and store counts, in addition to Express
Care store counts, are useful to assess the operating performance
of the Quick Lubes reportable segment and the operating performance
of an average Quick Lubes store.
Lubricant volumes sold by unconsolidated joint ventures are used
to measure the operating performance of the International operating
segment. Valvoline does not record lubricant sales from
unconsolidated joint ventures as International reportable segment
revenue. International sales are limited to sales by Valvoline's
consolidated affiliates. Although Valvoline does not record sales
by unconsolidated joint ventures as sales in its Statements of
Consolidated Income, management believes lubricant volumes
including and sold by unconsolidated joint ventures is useful to
assess the operating performance of its investments in joint
ventures.
Management also evaluates lubricant volumes sold in gallons for
each of its reportable segments and premium lubricant percentage,
defined as premium lubricant gallons sold as a percentage of U.S.
branded segment lubricant volumes for the Quick Lubes and Core
North America segments and as a percentage of total segment
lubricant volume for the International segment. Premium lubricant
products generally provide a higher contribution to segment
profitability and the percentage of premium volumes is useful to
evaluating and understanding Valvoline's operating performance.
Use of Non-GAAP Measures
To aid in the understanding of Valvoline's ongoing business
performance, certain items within this press release are presented
on an adjusted basis. These non-GAAP measures, presented on both a
consolidated and operating segment basis, are not defined within
U.S. GAAP and do not purport to be alternatives to net or operating
income/loss, earnings/loss per share or cash flows from operating
activities as a measure of operating performance or cash flows. For
a reconciliation of non-GAAP measures, refer to Tables 4, 7, 8 and
9 of this press release.
The following are the non-GAAP measures management has included
and how management defines them:
- EBITDA, which management defines as net income/loss, plus
income tax expense/benefit, net interest and other financing
expenses, and depreciation and amortization;
- Adjusted EBITDA, which management defines as EBITDA adjusted
for certain non-operational items, including net pension and other
postretirement plan expense/income; impairment of equity
investment; and other items (which can include activity related to
the separation from Ashland,
impact of significant acquisitions or divestitures, restructuring
costs, or other non-operational income/costs not directly
attributable to the underlying business);
- Adjusted operating income, which management defines as
operating income adjusted for certain key items impacting
comparability as noted in the definition of Adjusted EBITDA
above;
- Free cash flow, which management defines as operating cash
flows less capital expenditures and certain other adjustments, as
applicable;
- Adjusted net income, which management defines as net
income/loss adjusted for certain key items impacting comparability
as noted in the definition of Adjusted EBITDA above, as well as the
estimated net impact of the enactment of tax reform legislation and
debt extinguishment and modification costs that are not reflective
of the Company's ongoing operational performance or liquidity;
and
- Adjusted EPS, which management defines as earnings per diluted
share calculated using adjusted net income.
These measures are not prepared in accordance with U.S. GAAP and
contain management's best estimates of cost allocations and shared
resource costs. Management believes the use of non-GAAP measures on
a consolidated and operating segment basis assists investors in
understanding the ongoing operating performance of Valvoline's
business by presenting comparable financial results between
periods. The non-GAAP information provided is used by Valvoline's
management and may not be comparable to similar measures disclosed
by other companies, because of differing methods used by other
companies in calculating EBITDA, Adjusted EBITDA, free cash flow,
Adjusted net and operating income, and Adjusted EPS. These non-GAAP
measures provide a supplemental presentation of Valvoline's
operating performance.
Due to depreciable assets associated with the nature of the
Company's operations and interest costs related to Valvoline's
capital structure, management believes EBITDA is an important
supplemental measure to evaluate the Company's operating results
between periods on a comparable basis.
Adjusted EBITDA, Adjusted net and operating income, and Adjusted
EPS generally include adjustments for unusual, non-operational or
restructuring-related activities, which impact the comparability of
results between periods. Management believes these non-GAAP
measures provide investors with a meaningful supplemental
presentation of Valvoline's operating performance. These measures
include adjustments for net pension and other postretirement plan
expense/income, which includes several elements impacted by changes
in plan assets and obligations that are primarily driven by changes
in the debt and equity markets, as well as those that are
predominantly legacy in nature and related to prior service to the
Company from employees (e.g., retirees, former employees, current
employees with frozen benefits). These elements include (i)
interest cost, (ii) expected return on plan assets, (iii) actuarial
gains/losses, and (iv) amortization of prior service cost/credit.
Significant factors that can contribute to changes in these
elements include changes in discount rates used to remeasure
pension and other postretirement obligations on an annual basis or
upon a qualifying remeasurement, differences between actual and
expected returns on plan assets, and other changes in actuarial
assumptions, such as the life expectancy of plan participants.
Accordingly, management considers that these elements are more
reflective of changes in current conditions in global financial
markets (in particular, interest rates) and are outside the
operational performance of the business and are also primarily
legacy amounts that are not directly related to the underlying
business and do not have an immediate, corresponding impact on the
compensation and benefits provided to eligible employees for
current service. These measures include pension and other
postretirement service costs related to current employee service as
well as the costs of other benefits provided to employees for
current service.
Management uses free cash flow as an additional non-GAAP metric
of cash flow generation. By including capital expenditures and
certain other adjustments, as applicable, management is able to
provide an indication of the ongoing cash being generated that is
ultimately available for both debt and equity holders as well as
other investment opportunities. Unlike cash flow from operating
activities, free cash flow includes the impact of capital
expenditures, providing a supplemental view of cash generation.
Free cash flow has certain limitations, including that it does not
reflect adjustments for certain non-discretionary cash flows, such
as mandatory debt repayments. The amount of mandatory versus
discretionary expenditures can vary significantly between
periods.
Valvoline's results of operations are presented based on
Valvoline's management structure and internal accounting practices.
The structure and practices are specific to Valvoline; therefore,
Valvoline's financial results, EBITDA, Adjusted EBITDA, free cash
flow, Adjusted net and operating income and Adjusted EPS are not
necessarily comparable with similar information for other
comparable companies. EBITDA, Adjusted EBITDA, free cash flow,
Adjusted net and operating income and Adjusted EPS each have
limitations as analytical tools and should not be considered in
isolation from, or as an alternative to, or more meaningful than,
net and operating income and cash flows from operating activities
as determined in accordance with U.S. GAAP. Because of these
limitations, one should rely primarily on net and operating income
and cash flows provided from operating activities as determined in
accordance with U.S. GAAP and use EBITDA, Adjusted EBITDA, free
cash flow, Adjusted net and operating income and Adjusted EPS only
as supplements. In evaluating EBITDA, Adjusted EBITDA, free cash
flow, Adjusted net and operating income and Adjusted EPS, one
should be aware that in the future Valvoline may incur
expenses/income similar to those for which adjustments are made in
calculating EBITDA, Adjusted EBITDA, free cash flow, Adjusted net
and operating income and Adjusted EPS. Valvoline's presentation of
EBITDA, Adjusted EBITDA, free cash flow, Adjusted net and operating
income and Adjusted EPS should not be construed as a basis to infer
that Valvoline's future results will be unaffected by unusual or
nonrecurring items.
About Valvoline™
Valvoline Inc. (NYSE: VVV) is a leading worldwide marketer and
supplier of premium branded lubricants and automotive services,
with sales in more than 140 countries. Established in 1866, the
Company's heritage spans more than 150 years, during which time it
has developed powerful brand recognition across multiple product
and service channels. Valvoline ranks as the No. 3 passenger car
motor oil brand in the DIY market by volume. It operates and
franchises more than 1,500 quick-lube locations, and it is the No.
2 chain by number of stores in the United
States under the Valvoline Instant Oil ChangeSM
brand and the No. 3 chain by number of stores in Canada under the Valvoline Great Canadian Oil
Change brand. It also markets Valvoline lubricants and automotive
chemicals, including Valvoline EV Performance Fluids; Valvoline
Hybrid Vehicle Full Synthetic motor oil; Valvoline High Mileage
with MaxLife technology motor oil for engines over 75,000 miles;
Valvoline Advanced Full Synthetic motor oil; Valvoline Premium
Blue™ heavy-duty motor oil; Valvoline Multi-Vehicle Automatic
Transmission Fluid; and Zerex™ antifreeze. To learn more, visit
www.valvoline.com.
Forward-Looking Statements
Certain statements in this press release, other than statements
of historical fact, including estimates, projections and statements
related to Valvoline's business plans and operating results, are
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Valvoline has
identified some of these forward-looking statements with words such
as "anticipates," "believes," "expects," "estimates," "is likely,"
"predicts," "projects," "forecasts," "may," "will," "should" and
"intends" and the negative of these words or other comparable
terminology. These forward-looking statements are based on
Valvoline's current expectations, estimates, projections and
assumptions as of the date such statements are made and are subject
to risks and uncertainties that may cause results to differ
materially from those expressed or implied in the forward-looking
statements. Additional information regarding these risks and
uncertainties are described in the Company's filings with the
Securities and Exchange Commission (the "SEC"), including in the
"Risk Factors," "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Quantitative and
Qualitative Disclosures about Market Risk" sections of Valvoline's
most recently filed periodic report on Form 10-K, which is
available on Valvoline's website at
http://investors.valvoline.com/sec-filings or on the SEC's website
at http://sec.gov. Valvoline assumes no obligation to update or
revise these forward-looking statements for any reason, even if new
information becomes available in the future, unless required by
law.
™ Trademark, Valvoline or its subsidiaries, registered in
various countries
SM Service mark, Valvoline or its subsidiaries,
registered in various countries
FOR FURTHER INFORMATION
Sean
T. Cornett
Sr. Director, Investor Relations
+1 (859) 357-2798
scornett@valvoline.com
Michele Gaither Sparks
Sr. Director, Corporate Communications
+1 (859) 230-8079
michele.sparks@valvoline.com
Valvoline Inc. and
Consolidated Subsidiaries
|
Table 1
|
STATEMENTS OF
CONSOLIDATED INCOME
|
|
(In millions, except
per share amounts - preliminary and unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
|
March 31
|
|
March 31
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Sales
|
$
|
701
|
|
|
$
|
578
|
|
|
$
|
1,354
|
|
|
$
|
1,185
|
|
Cost of
sales
|
454
|
|
|
371
|
|
|
879
|
|
|
767
|
|
GROSS
PROFIT
|
247
|
|
|
207
|
|
|
475
|
|
|
418
|
|
Selling, general and
administrative expenses
|
129
|
|
|
96
|
|
|
246
|
|
|
213
|
|
Net legacy and
separation-related expenses (income)
|
—
|
|
|
—
|
|
|
1
|
|
|
(1)
|
|
Equity and other
income, net
|
(13)
|
|
|
(6)
|
|
|
(27)
|
|
|
(15)
|
|
OPERATING
INCOME
|
131
|
|
|
117
|
|
|
255
|
|
|
221
|
|
Net pension and other
postretirement plan income
|
(14)
|
|
|
(9)
|
|
|
(27)
|
|
|
(18)
|
|
Net interest and
other financing expenses
|
55
|
|
|
38
|
|
|
75
|
|
|
54
|
|
INCOME BEFORE
INCOME TAXES
|
90
|
|
|
88
|
|
|
207
|
|
|
185
|
|
Income tax
expense
|
22
|
|
|
25
|
|
|
52
|
|
|
49
|
|
NET
INCOME
|
$
|
68
|
|
|
$
|
63
|
|
|
$
|
155
|
|
|
$
|
136
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET EARNINGS PER
SHARE
|
|
|
|
|
|
|
|
BASIC
|
$
|
0.37
|
|
|
$
|
0.33
|
|
|
$
|
0.84
|
|
|
$
|
0.72
|
|
DILUTED
|
$
|
0.37
|
|
|
$
|
0.33
|
|
|
$
|
0.84
|
|
|
$
|
0.72
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE
COMMON SHARES OUTSTANDING
|
|
|
|
|
|
|
BASIC
|
182
|
|
|
188
|
|
|
184
|
|
|
188
|
|
DILUTED
|
183
|
|
|
188
|
|
|
184
|
|
|
189
|
|
|
|
|
|
|
|
|
|
|
Valvoline Inc. and
Consolidated Subsidiaries
|
Table 2
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
(In millions -
preliminary and unaudited)
|
|
|
|
|
|
March 31
|
|
September
30
|
|
|
|
|
2021
|
|
2020
|
ASSETS
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
247
|
|
|
$
|
760
|
|
|
|
Receivables,
net
|
448
|
|
|
433
|
|
|
|
Inventories,
net
|
218
|
|
|
199
|
|
|
|
Prepaid expenses and
other current assets
|
55
|
|
|
46
|
|
|
Total current
assets
|
968
|
|
|
1,438
|
|
|
|
|
|
|
|
|
|
Noncurrent
assets
|
|
|
|
|
|
Property, plant and
equipment, net
|
741
|
|
|
613
|
|
|
|
Operating lease
assets
|
|
299
|
|
|
261
|
|
|
|
Goodwill and
intangibles, net
|
732
|
|
|
529
|
|
|
|
Equity method
investments
|
45
|
|
|
44
|
|
|
|
Deferred income
taxes
|
19
|
|
|
34
|
|
|
|
Other noncurrent
assets
|
117
|
|
|
132
|
|
|
Total noncurrent
assets
|
1,953
|
|
|
1,613
|
|
|
|
|
|
|
|
|
|
Total
assets
|
$
|
2,921
|
|
|
$
|
3,051
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' DEFICIT
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Current portion of
long-term debt
|
$
|
1
|
|
|
$
|
—
|
|
|
|
Trade and other
payables
|
180
|
|
|
189
|
|
|
|
Accrued expenses and
other liabilities
|
267
|
|
|
255
|
|
|
Total current
liabilities
|
448
|
|
|
444
|
|
|
|
|
|
|
|
|
|
Noncurrent
liabilities
|
|
|
|
|
|
Long-term
debt
|
1,719
|
|
|
1,962
|
|
|
|
Employee benefit
obligations
|
286
|
|
|
317
|
|
|
|
Operating lease
liabilities
|
265
|
|
|
231
|
|
|
|
Other noncurrent
liabilities
|
259
|
|
|
173
|
|
|
Total noncurrent
liabilities
|
2,529
|
|
|
2,683
|
|
|
|
|
|
|
|
|
|
Stockholders'
deficit
|
(56)
|
|
|
(76)
|
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders' deficit
|
$
|
2,921
|
|
|
$
|
3,051
|
|
Valvoline Inc. and
Consolidated Subsidiaries
|
Table 3
|
STATEMENTS OF
CONSOLIDATED CASH FLOWS
|
|
(In millions -
preliminary and unaudited)
|
|
|
|
|
Six months
ended
|
|
|
|
March 31
|
|
|
|
2021
|
|
2020
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
|
Net income
|
$
|
155
|
|
|
$
|
136
|
|
|
Adjustments to
reconcile net income to cash flows from operating
activities
|
|
|
|
|
Loss on
extinguishment of debt
|
36
|
|
|
19
|
|
|
|
Depreciation and
amortization
|
44
|
|
|
31
|
|
|
|
Pension
contributions
|
(4)
|
|
|
(5)
|
|
|
|
Stock-based
compensation expense
|
6
|
|
|
3
|
|
|
|
Other, net
|
2
|
|
|
2
|
|
|
Change in operating
assets and liabilities
|
(49)
|
|
|
(32)
|
|
Total cash provided
by operating activities
|
190
|
|
|
154
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
|
Additions to
property, plant and equipment
|
(74)
|
|
|
(57)
|
|
|
Repayments on notes
receivable
|
12
|
|
|
—
|
|
|
Acquisitions of
businesses, net of cash acquired
|
(223)
|
|
|
(11)
|
|
|
Other investing
activities, net
|
9
|
|
|
(3)
|
|
Total cash used in
investing activities
|
(276)
|
|
|
(71)
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
|
Proceeds from
borrowings, net of issuance costs
|
546
|
|
|
1,132
|
|
|
Repayments on
borrowings
|
(800)
|
|
|
(475)
|
|
|
Premium paid to
extinguish debt
|
(26)
|
|
|
(15)
|
|
|
Repurchases of common
stock
|
(100)
|
|
|
(60)
|
|
|
Cash dividends
paid
|
(46)
|
|
|
(42)
|
|
|
Other financing
activities
|
(5)
|
|
|
(3)
|
|
Total cash (used in)
provided by financing activities
|
(431)
|
|
|
537
|
|
|
Effect of currency
exchange rate changes on cash, cash equivalents, and restricted
cash
|
4
|
|
|
(4)
|
|
(DECREASE)
INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED
CASH
|
(513)
|
|
|
616
|
|
Cash, cash
equivalents, and restricted cash - beginning of period
|
761
|
|
|
159
|
|
CASH, CASH
EQUIVALENTS, AND RESTRICTED CASH - END OF PERIOD
|
$
|
248
|
|
|
$
|
775
|
|
Valvoline Inc. and
Consolidated Subsidiaries
|
|
|
|
Table 4
|
FINANCIAL
INFORMATION BY OPERATING SEGMENT
|
|
|
|
|
(In millions -
preliminary and unaudited)
|
|
|
|
|
|
Three months ended
March 31
|
|
2021
|
|
2020
|
|
Sales
|
|
Operating
income
|
|
Depreciation and
amortization
|
|
EBITDA
|
|
Sales
|
|
Operating
income
|
|
Depreciation and
amortization
|
|
EBITDA
|
Quick
Lubes
|
$
|
285
|
|
|
$
|
63
|
|
|
$
|
16
|
|
|
$
|
79
|
|
|
$
|
212
|
|
|
$
|
40
|
|
|
$
|
10
|
|
|
$
|
50
|
|
Core North
America
|
242
|
|
|
38
|
|
|
4
|
|
|
42
|
|
|
238
|
|
|
47
|
|
|
4
|
|
|
51
|
|
International
|
174
|
|
|
28
|
|
|
3
|
|
|
31
|
|
|
128
|
|
|
18
|
|
|
1
|
|
|
19
|
|
Total
operating segments
|
701
|
|
|
129
|
|
|
23
|
|
|
152
|
|
|
578
|
|
|
105
|
|
|
15
|
|
|
120
|
|
Unallocated and other
(a)
|
|
|
2
|
|
|
|
|
16
|
|
|
|
|
12
|
|
|
|
|
21
|
|
Total
results
|
701
|
|
|
131
|
|
|
23
|
|
|
168
|
|
|
578
|
|
|
117
|
|
|
15
|
|
|
141
|
|
Key items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net pension and other
postretirement plan income
|
|
|
—
|
|
|
|
|
(14)
|
|
|
|
|
—
|
|
|
|
|
(9)
|
|
Business interruption
recovery
|
|
|
(2)
|
|
|
|
|
(2)
|
|
|
|
|
—
|
|
|
|
|
—
|
|
Acquisition and
divestiture-related costs
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
2
|
|
|
|
|
2
|
|
Adjusted
results
|
$
|
701
|
|
|
$
|
129
|
|
|
$
|
23
|
|
|
$
|
152
|
|
|
$
|
578
|
|
|
$
|
119
|
|
|
$
|
15
|
|
|
$
|
134
|
|
|
|
(a) Unallocated and
other includes pension and other postretirement plan non-service
income and remeasurement adjustments, net legacy and
separation-related activity and certain other corporate matters not
allocated to the operating segments.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 4
(continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six month ended March
31
|
|
2021
|
|
2020
|
|
Sales
|
|
Operating
income
|
|
Depreciation and
amortization
|
|
EBITDA
|
|
Sales
|
|
Operating
income
|
|
Depreciation and
amortization
|
|
EBITDA
|
Quick
Lubes
|
$
|
539
|
|
|
$
|
106
|
|
|
$
|
31
|
|
|
$
|
137
|
|
|
$
|
430
|
|
|
$
|
78
|
|
|
$
|
20
|
|
|
$
|
98
|
|
Core North
America
|
477
|
|
|
85
|
|
|
8
|
|
|
93
|
|
|
486
|
|
|
93
|
|
|
8
|
|
|
101
|
|
International
|
338
|
|
|
62
|
|
|
5
|
|
|
67
|
|
|
269
|
|
|
38
|
|
|
3
|
|
|
41
|
|
Total
operating segments
|
1,354
|
|
|
253
|
|
|
44
|
|
|
297
|
|
|
1,185
|
|
|
209
|
|
|
31
|
|
|
240
|
|
Unallocated and other
(a)
|
|
|
2
|
|
|
|
|
29
|
|
|
|
|
12
|
|
|
|
|
30
|
|
Total
results
|
1,354
|
|
|
255
|
|
|
44
|
|
|
326
|
|
|
1,185
|
|
|
221
|
|
|
31
|
|
|
270
|
|
Key items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net pension and other
postretirement plan income
|
|
|
—
|
|
|
|
|
(27)
|
|
|
|
|
—
|
|
|
|
|
(18)
|
|
Net legacy and
separation-related expenses (income)
|
|
|
1
|
|
|
|
|
1
|
|
|
|
|
(1)
|
|
|
|
|
(1)
|
|
Business interruption
recovery
|
|
|
(3)
|
|
|
|
|
(3)
|
|
|
|
|
—
|
|
|
|
|
—
|
|
Acquisition and
divestiture-related costs
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
2
|
|
|
|
|
2
|
|
Restructuring and
related expenses
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
1
|
|
|
|
|
1
|
|
Adjusted
results
|
$
|
1,354
|
|
|
$
|
253
|
|
|
$
|
44
|
|
|
$
|
297
|
|
|
$
|
1,185
|
|
|
$
|
223
|
|
|
$
|
31
|
|
|
$
|
254
|
|
|
|
(a) Unallocated and
other includes pension and other postretirement plan non-service
income and remeasurement adjustments, net legacy and
separation-related activity and certain other corporate matters not
allocated to the operating segments.
|
Valvoline Inc. and
Consolidated Subsidiaries
|
Table 5
|
INFORMATION BY
OPERATING SEGMENT
|
|
(In millions -
preliminary and unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
|
March 31
|
|
March 31
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
QUICK
LUBES
|
|
|
|
|
|
|
|
|
Lubricant sales
(gallons)
|
8.1
|
|
|
7.1
|
|
|
15.8
|
|
|
14.4
|
|
|
Premium lubricants
(percent of U.S. branded volumes)
|
70.6
|
%
|
|
67.5
|
%
|
|
70.0
|
%
|
|
67.0
|
%
|
|
Gross profit as a
percent of sales (a)
|
39.8
|
%
|
|
36.6
|
%
|
|
37.6
|
%
|
|
37.0
|
%
|
|
Same-store sales
growth - Company-operated (b)
|
19.8
|
%
|
|
0.3
|
%
|
|
12.8
|
%
|
|
3.3
|
%
|
|
Same-store sales
growth - Franchised (b) (c)
|
20.4
|
%
|
|
0.9
|
%
|
|
13.1
|
%
|
|
5.3
|
%
|
|
Same-store sales
growth - Combined (b) (c)
|
20.2
|
%
|
|
0.6
|
%
|
|
13.0
|
%
|
|
4.5
|
%
|
CORE NORTH
AMERICA
|
|
|
|
|
|
|
|
|
Lubricant sales
(gallons)
|
22.3
|
|
|
20.9
|
|
|
43.5
|
|
|
42.3
|
|
|
Premium lubricants
(percent of U.S. branded volumes)
|
60.9
|
%
|
|
57.7
|
%
|
|
60.3
|
%
|
|
56.8
|
%
|
|
Gross profit as a
percent of sales (a)
|
34.1
|
%
|
|
37.2
|
%
|
|
35.8
|
%
|
|
36.7
|
%
|
INTERNATIONAL
|
|
|
|
|
|
|
|
|
Lubricant sales
(gallons) (d)
|
17.6
|
|
|
13.7
|
|
|
34.4
|
|
|
28.4
|
|
|
Lubricant sales
(gallons), including unconsolidated joint ventures
(e)
|
30.8
|
|
|
22.3
|
|
|
61.1
|
|
|
47.8
|
|
|
Premium lubricants
(percent of lubricant volumes)
|
26.5
|
%
|
|
27.7
|
%
|
|
26.8
|
%
|
|
26.7
|
%
|
|
Gross profit as a
percent of sales (a)
|
29.8
|
%
|
|
30.2
|
%
|
|
30.3
|
%
|
|
29.4
|
%
|
|
|
|
(a)
|
Gross profit as a
percent of sales is defined as sales, less cost of sales, divided
by sales.
|
(b)
|
Beginning in fiscal
2021, Valvoline determines same-store sales (SSS) growth as sales
by U.S. Quick Lubes service center stores, with new stores,
including franchised conversions, excluded from the metric until
the completion of their first full fiscal year in operation.
Previously, SSS growth was determined as sales by U.S. Quick Lubes
service center stores, with stores new to the U.S. Quick Lubes
system excluded from the metric until completion of their first
full year in operation. Prior period measures have been revised to
conform to the current basis of presentation.
|
(c)
|
Valvoline franchisees
are distinct legal entities and Valvoline does not consolidate the
results of operations of its franchisees.
|
(d)
|
Excludes volumes sold
by unconsolidated joint ventures.
|
(e)
|
Valvoline
unconsolidated joint ventures are distinct legal entities and
Valvoline does not consolidate the results of operations of its
unconsolidated joint ventures.
|
Valvoline Inc. and
Consolidated Subsidiaries
|
Table 6
|
QUICK LUBES STORE
INFORMATION
|
|
(Preliminary and
unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company-operated
|
|
|
|
|
Second Quarter
2021
|
|
First Quarter
2021
|
|
Fourth Quarter
2020
|
|
Third Quarter
2020
|
|
Second Quarter
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of
period
|
|
663
|
|
|
584
|
|
|
548
|
|
|
536
|
|
|
524
|
|
|
|
Opened
|
|
6
|
|
|
10
|
|
|
22
|
|
|
5
|
|
|
7
|
|
|
|
Acquired
|
|
3
|
|
|
42
|
|
|
2
|
|
|
2
|
|
|
1
|
|
|
|
Net conversions
between company-operated and franchised
|
|
1
|
|
|
27
|
|
|
12
|
|
|
5
|
|
|
4
|
|
|
End of
period
|
|
673
|
|
|
663
|
|
|
584
|
|
|
548
|
|
|
536
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Franchised
|
|
|
|
|
Second Quarter
2021
|
|
First Quarter
2021
|
|
Fourth Quarter
2020
|
|
Third Quarter
2020
|
|
Second Quarter
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of
period
|
|
870
|
|
|
878
|
|
|
884
|
|
|
883
|
|
|
883
|
|
|
|
Opened
|
|
7
|
|
|
8
|
|
|
7
|
|
|
8
|
|
|
8
|
|
|
|
Acquired
|
|
—
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Net conversions
between company-operated and franchised
|
|
(1)
|
|
|
(27)
|
|
|
(12)
|
|
|
(5)
|
|
|
(4)
|
|
|
|
Closed
|
|
(1)
|
|
|
(1)
|
|
|
(1)
|
|
|
(2)
|
|
|
(4)
|
|
|
End of period
(a)
|
|
875
|
|
|
870
|
|
|
878
|
|
|
884
|
|
|
883
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
stores
|
|
1,548
|
|
|
1,533
|
|
|
1,462
|
|
|
1,432
|
|
|
1,419
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Express
Care
|
|
|
|
|
Second Quarter
2021
|
|
First Quarter
2021
|
|
Fourth Quarter
2020
|
|
Third Quarter
2020
|
|
Second Quarter
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of locations
at end of period (a)
|
|
290
|
|
|
295
|
|
|
296
|
|
|
304
|
|
|
301
|
|
|
|
(a) Included in the
store counts at the end of the second, third and fourth quarters of
fiscal 2020 were certain service center stores temporarily closed
at the discretion of the respective independent operators due to
the impacts of COVID-19. No service center stores were temporarily
closed as of March 31, 2021 and December 31, 2020. As of September
30, 2020, 1 franchised service center store was temporarily closed,
5 franchised service center stores were temporarily closed as of
June 30, 2020, and 26 franchised and 12 Express Care service center
stores were temporarily closed as of March 31, 2020.
|
Valvoline Inc. and
Consolidated Subsidiaries
|
Table 7
|
RECONCILIATION OF
NON-GAAP DATA - NET INCOME AND DILUTED EARNINGS PER
SHARE
|
(In millions, except
per share amounts - preliminary and unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
|
March 31
|
|
March 31
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
|
Reported net
income
|
$
|
68
|
|
|
$
|
63
|
|
|
$
|
155
|
|
|
$
|
136
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Net pension and other
postretirement plan income
|
(14)
|
|
|
(9)
|
|
|
(27)
|
|
|
(18)
|
|
|
Net legacy and
separation-related expenses (income)
|
—
|
|
|
—
|
|
|
1
|
|
|
(1)
|
|
|
Debt extinguishment
and modification costs
|
36
|
|
|
19
|
|
|
36
|
|
|
19
|
|
|
Business interruption
recovery
|
(2)
|
|
|
—
|
|
|
(3)
|
|
|
—
|
|
|
Acquisition and
divestiture-related costs
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|
Restructuring and
related expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
Total adjustments,
pre-tax
|
20
|
|
|
12
|
|
|
7
|
|
|
3
|
|
|
Income tax expense of
adjustments
|
(5)
|
|
|
(3)
|
|
|
(2)
|
|
|
(1)
|
|
|
Income tax
adjustments (a)
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|
Total adjustments,
after tax
|
15
|
|
|
11
|
|
|
5
|
|
|
4
|
|
Adjusted net
income
|
$
|
83
|
|
|
$
|
74
|
|
|
$
|
160
|
|
|
$
|
140
|
|
|
|
|
|
|
|
|
|
Reported diluted
earnings per share
|
$
|
0.37
|
|
|
$
|
0.33
|
|
|
$
|
0.84
|
|
|
$
|
0.72
|
|
Adjusted diluted
earnings per share
|
$
|
0.46
|
|
|
$
|
0.39
|
|
|
$
|
0.87
|
|
|
$
|
0.74
|
|
|
|
|
|
|
|
|
|
|
Weighted average
diluted common shares outstanding
|
183
|
|
|
188
|
|
|
184
|
|
|
189
|
|
|
|
|
(a)
|
Income tax
adjustments relate to the discrete impacts associated with tax
legislation changes in India.
|
Valvoline Inc. and
Consolidated Subsidiaries
|
Table 8
|
RECONCILIATION OF
NON-GAAP DATA - ADJUSTED EBITDA
|
|
(In millions -
preliminary and unaudited)
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
|
March 31
|
|
March 31
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Adjusted EBITDA -
Valvoline
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
68
|
|
|
$
|
63
|
|
|
$
|
155
|
|
|
$
|
136
|
|
Add:
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
22
|
|
|
25
|
|
|
52
|
|
|
49
|
|
Net interest and other
financing expenses
|
|
55
|
|
|
38
|
|
|
75
|
|
|
54
|
|
Depreciation and
amortization
|
|
23
|
|
|
15
|
|
|
44
|
|
|
31
|
|
EBITDA
|
|
168
|
|
|
141
|
|
|
326
|
|
|
270
|
|
Key items:
(a)
|
|
|
|
|
|
|
|
|
Net pension and other
postretirement plan income
|
|
(14)
|
|
|
(9)
|
|
|
(27)
|
|
|
(18)
|
|
Net legacy and
separation-related expenses (income)
|
|
—
|
|
|
—
|
|
|
1
|
|
|
(1)
|
|
Business interruption
recovery
|
|
(2)
|
|
|
—
|
|
|
(3)
|
|
|
—
|
|
Acquisition and
divestiture-related costs
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
Restructuring and
related expenses
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
Adjusted
EBITDA
|
|
$
|
152
|
|
|
$
|
134
|
|
|
$
|
297
|
|
|
$
|
254
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA -
Quick Lubes
|
|
|
|
|
|
|
|
|
Operating
income
|
|
$
|
63
|
|
|
$
|
40
|
|
|
$
|
106
|
|
|
$
|
78
|
|
Key items:
(a)
|
|
|
|
|
|
|
|
|
N/A
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Adjusted operating
income
|
|
63
|
|
|
40
|
|
|
106
|
|
|
78
|
|
Add:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
16
|
|
|
10
|
|
|
31
|
|
|
20
|
|
Adjusted
EBITDA
|
|
$
|
79
|
|
|
$
|
50
|
|
|
$
|
137
|
|
|
$
|
98
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA -
Core North America
|
|
|
|
|
|
|
|
|
Operating
income
|
|
$
|
38
|
|
|
$
|
47
|
|
|
$
|
85
|
|
|
$
|
93
|
|
Key items:
(a)
|
|
|
|
|
|
|
|
|
N/A
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Adjusted operating
income
|
|
38
|
|
|
47
|
|
|
85
|
|
|
93
|
|
Add:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
4
|
|
|
4
|
|
|
8
|
|
|
8
|
|
Adjusted
EBITDA
|
|
$
|
42
|
|
|
$
|
51
|
|
|
$
|
93
|
|
|
$
|
101
|
|
|
|
|
|
|
|
Table 8
(continued)
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
|
March 31
|
|
March 31
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Adjusted EBITDA -
International
|
|
|
|
|
|
|
|
|
Operating
income
|
|
$
|
28
|
|
|
$
|
18
|
|
|
$
|
62
|
|
|
$
|
38
|
|
Key items:
(a)
|
|
|
|
|
|
|
|
|
N/A
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Adjusted operating
income
|
|
28
|
|
|
18
|
|
62
|
|
|
38
|
Add:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
3
|
|
|
1
|
|
|
5
|
|
|
3
|
|
Adjusted
EBITDA
|
|
$
|
31
|
|
|
$
|
19
|
|
|
$
|
67
|
|
|
$
|
41
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA -
Unallocated and other
|
|
|
|
|
|
|
|
|
Operating
income
|
|
$
|
2
|
|
|
$
|
12
|
|
|
$
|
2
|
|
|
$
|
12
|
|
Add:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net pension and other
postretirement plan income
|
|
14
|
|
|
9
|
|
|
27
|
|
|
18
|
|
EBITDA
|
|
16
|
|
|
21
|
|
|
29
|
|
|
30
|
|
Key items:
(a)
|
|
|
|
|
|
|
|
|
Net pension and other
postretirement plan income
|
|
(14)
|
|
|
(9)
|
|
|
(27)
|
|
|
(18)
|
|
Net legacy and
separation-related expenses (income)
|
|
—
|
|
|
—
|
|
|
1
|
|
|
(1)
|
|
Business interruption
recovery
|
|
(2)
|
|
|
—
|
|
|
(3)
|
|
|
—
|
|
Acquisition and
divestiture-related costs
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
Restructuring and
related expenses
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
Adjusted
EBITDA
|
|
$
|
—
|
|
|
$
|
14
|
|
|
$
|
—
|
|
|
$
|
14
|
|
|
|
(a) Key items were
recorded in Unallocated and other and none were recognized in the
operating segment results. The table above reconciles Unallocated
and other operating income and relevant other items reported below
operating income to EBITDA and Adjusted EBITDA.
|
Valvoline Inc. and
Consolidated Subsidiaries
|
Table 9
|
RECONCILIATION OF
NON-GAAP DATA - FREE CASH FLOWS
|
|
(In millions -
preliminary and unaudited)
|
|
|
|
|
|
|
|
|
|
|
Six months
ended
|
|
|
|
March 31
|
Free cash flow
(a)
|
|
2021
|
|
2020
|
Total cash flows
provided by operating activities
|
|
$
|
190
|
|
|
$
|
154
|
|
Adjustments:
|
|
|
|
|
|
Additions to
property, plant and equipment
|
|
(74)
|
|
|
(57)
|
|
Free cash
flow
|
|
$
|
116
|
|
|
$
|
97
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months
ended
March 31
|
Discretionary free
cash flow (b)
|
|
|
|
2021
|
Total cash flows
provided by operating activities
|
|
|
|
$
|
190
|
|
Adjustments:
|
|
|
|
|
|
Maintenance additions
to property, plant and equipment
|
|
|
|
(15)
|
|
Discretionary free
cash flow
|
|
|
|
$
|
175
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal
year
|
Free cash flow
(a)
|
|
|
|
2021
Outlook
|
Total cash flows
provided by operating activities
|
|
|
|
$420 -
$430
|
Adjustments:
|
|
|
|
|
|
Additions to
property, plant and equipment
|
|
|
|
(160 -
170)
|
Free cash
flow
|
|
|
|
$250 -
$270
|
|
|
|
(a)
|
Free cash flow is
defined as cash flows from operating activities less capital
expenditures and certain other adjustments as
applicable.
|
(b)
|
Discretionary free
cash flow is defined as cash flows from operating activities less
maintenance capital expenditures. Maintenance capital expenditures
are routine uses of cash that are necessary to maintain the
Company's operations. Management believes discretionary free cash
flow is a useful measure of the Company's operational business
performance and should be used as a supplement, rather than an
alternative to, the GAAP measure of cash flows from operating
activities.
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/valvoline-reports-second-quarter-results-raises-fiscal-2021-guidance-301279592.html
SOURCE Valvoline Inc.