WILMINGTON, Del., Aug. 8, 2016 /PRNewswire/ --
Second Quarter 2016 Highlights
- Net Sales of $1.4 billion
- Net Loss of $18 million, or
($0.10) per diluted share, including
impairment charges of $63 million,
interest expense of $50 million and
restructuring costs of $9
million
- Adjusted EBITDA of $187
million
- Adjusted Net Income of $49
million, or $0.27 per diluted
share
Other Year-To-Date Highlights
- Continued progress on Five-Point Transformation Plan
objectives, including delivery of ~$100
million of cost reductions in the first half of 2016,
completion of the strategic review of Chemical Solutions portfolio,
commercial startup of Altamira
TiO2 capacity expansion and announced investment
in additional Opteon™ capacity
- $359 million improvement in cash
flow from operating activities in the first half
- Reduced ~$100 million of long
term debt year-to-date
- Completed the sale of the Sulfur business to Veolia for
approximately $325 million
Today, The Chemours Company (Chemours) (NYSE: CC), a global
chemistry company with leading market positions in titanium
technologies, fluoroproducts and chemical solutions, announced
financial results for the second quarter 2016.
Chemours President and CEO Mark
Vergnano said, "Our second quarter results reflect our
focused execution against our Five-Point Transformation Plan and
our drive to deliver on our commitments to all our stakeholders. We
have just celebrated our first anniversary as a public company, and
we are pleased with the progress we have made in that time to
strengthen our business model, reduce costs, and optimize our
company portfolio. At this point, we have completed the strategic
review of our Chemical Solutions portfolio, closed the sale of our
Sulfur business for approximately $325
million and announced the sale of our Clean and Disinfect
business for $230 million. We began
commercial production at our new TiO2 plant in
Altamira, Mexico and have been
encouraged by improvement in the titanium technologies segment with
increasing TiO2 prices. Overall, I am very pleased that
we have delivered approximately $100
million in cost reductions, improved margins, improved our
working capital, streamlined our portfolio and modestly improved
our balance sheet in the first half of 2016."
Second quarter net sales were $1.4
billion, a decrease of 8 percent from $1.5 billion in the prior-year quarter. Second
quarter net loss was $18 million, or
($0.10) per diluted share, versus net
loss of $18 million, or ($0.10) per diluted share on a pro forma basis in
the prior-year quarter. Adjusted EBITDA for the second quarter was
$187 million versus $127 million in the prior-year quarter. Improved
profitability in Fluoroproducts and cost reductions throughout the
company were partially offset by lower average prices in Titanium
Technologies and Chemical Solutions along with approximately
$9 million of unfavorable currency
movements versus the prior-year quarter.
Sequentially, sales increased by $86
million, an increase of 7 percent from $1.3 billion in the first quarter. Second quarter
net loss was $18 million, or
($0.10) per diluted share down from
net income of $51 million or
$0.28 per diluted share. The
net loss was primarily driven by asset impairment charges of
$63 million in the second quarter.
Second quarter Adjusted EBITDA increased by $59 million versus $128
million in the first quarter of 2016. The improved
performance was primarily driven by higher seasonal volumes in
Titanium Technologies and Fluoroproducts and supplemented by higher
TiO2 pricing and lower costs. These were partially
offset by unfavorable Corporate and Other expenses.
Titanium Technologies
In the second quarter, Titanium
Technologies segment sales were $596
million, a 7 percent decline versus the prior-year quarter.
Lower year-over-year pricing reduced net sales 6 percent and lower
volume of non-TiO2 product lines and the timing of
TiO2 shipments reduced net sales 1 percent. Strong
demand in North America and EMEA
was offset by weaker volumes in Asia and Latin
America versus the prior-year quarter. Segment Adjusted
EBITDA was $111 million, a 22 percent
improvement compared to the prior-year quarter. Benefits from cost
reductions and operational efficiencies drove the improvement in
Adjusted EBITDA, but were partially offset by the lower average
prices. Currency movements contributed a moderate benefit in the
quarter versus the previous-year quarter.
Sequentially, versus the first quarter of 2016, sales increased
14 percent and Adjusted EBITDA increased $57
million, or 105 percent. The increase in sales was due to
seasonally stronger volumes and higher global average price
increase of approximately 5 percent. Volume increased 10 percent
driven by sequentially higher demand in all regions except
Latin America. The benefits of
global average price increases, stronger volumes, transformation
plan cost savings and a $4 million
impact from favorable currency movements drove the increase in
Adjusted EBITDA. In August 2016,
Chemours communicated to customers in EMEA and Latin America that an additional $150 per tonne price increase will be effective
September 1, 2016.
Fluoroproducts
Fluoroproducts segment sales in the
second quarter were $573 million, a
decrease of 3 percent versus the prior-year quarter. Stronger
demand for Opteon™ refrigerants in both Europe and the U.S. delivered a significant
increase in volume that was offset by regulated volume reductions
of base refrigerants, weaker demand for fluoropolymer products into
consumer electronics markets and lower pricing due to product mix.
Segment Adjusted EBITDA was $105
million, a 94 percent increase versus the prior-year
quarter. Transformation plan cost reductions, improved
manufacturing operations and increased Opteon™ refrigerant
contributions were partially offset by unfavorable mix of
fluoropolymers products and approximately $11 million of unfavorable currency movements
versus the prior-year quarter.
Sequentially, versus the first quarter of 2016, sales and
Adjusted EBITDA increased 8 percent and 24 percent, respectively.
Seasonally stronger refrigerant sales, along with continued ramp up
in Opteon™ refrigerant volumes, more than offset weaker prices
related to unfavorable mix of fluoropolymer sales. The increase in
Adjusted EBITDA was driven by Opteon™ refrigerant growth, lower
costs and approximately $4 million of
benefit from currency movements in the quarter that were partially
offset by the unfavorable product mix.
Chemical Solutions
In the second quarter, Chemical
Solutions segment sales were $214
million, a 23 percent decline versus the prior-year quarter,
primarily due to pass-through impact on prices of lower raw
material costs and the portfolio impact of the Beaumont, TX aniline facility sale. Segment
Adjusted EBITDA was $11 million,
$7 million above the prior-year
quarter, reflecting continued benefits from transformation plan
initiatives that are lowering operating costs across the segment.
The timing of the planned cyanide expansion has been pushed back
due to permitting delays, and Chemours now expects the majority of
capital expenditures related to the construction will take place in
2017.
Sequentially, sales decreased 13 percent versus the first
quarter of 2016 primarily as a result of pass-through pricing,
while Adjusted EBITDA was $1 million
higher driven primarily by lower operating costs in the second
quarter.
In the second quarter, the company completed its strategic
review of the Chemicals Solutions segment. On July 29, 2016, the company completed the sale of
its Sulfur business to Veolia for approximately $325 million. Chemours expects to close the sale
of the Clean and Disinfect (C&D) business to LANXESS for
$230 million in the second half of
2016. During the second quarter, activities to shut down the
Reactive Metals business in Niagara,
NY continued with expected closure by the end of this
year.
Corporate and Other
Corporate and Other represented a
negative $40 million of Adjusted
EBITDA. Corporate and Other expenses in the second quarter of 2016
increased $18 million and
$19 million versus the prior-year
quarter and the first quarter 2016, respectively. The increase in
expenses primarily related to performance-related compensation
adjustments, litigation and other miscellaneous expenses in the
quarter.
The company recognized a cash tax rate of approximately 25
percent in the quarter, excluding restructuring and other
nonrecurring charges. For the full year 2016, the company expects
its cash tax rate to be in the high-teens percentages, taking into
consideration the company's anticipated geographic mix of earnings
and additional implications anticipated with the Sulfur and C&D
transactions.
Liquidity
As of June 30,
2016, gross consolidated debt was $3.9 billion. Debt, net of cash, was $3.5 billion.
Cash balances were $383 million at
June 30, 2016. In the quarter, the
company retired $50 million of Term
Loan B and $42 million of its bonds
for a combined cash amount of $85
million. An additional $8
million of bonds were retired in July
2016, completing $100 million
of total long term debt repurchased year-to-date. As a result of
these purchases, the company expects to save approximately
$5 million annually from lower
interest obligations.
Excluding the impact of interest payments in the quarter, the
company continued to improve working capital performance through
better inventory management and collections and payables processes.
Year-to-date working capital1 performance and free cash
flow improved by $219 million and
$347 million, respectively, versus
the prior-year, not including the benefit of the DuPont prepayment
originally received in February
2016.
Outlook
"We are gaining momentum this year from the
success of our transformation plan, including cost reductions,
portfolio optimization, the ramp up of Opteon™ products and the
expansion at Altamira," Vergnano continued. "We expect these
initiatives along with our TiO2 price increases will
deliver full-year Adjusted EBITDA greater than 2015 and generate
modestly positive free cash flow. At this point in the year, we
believe that our full-year capital expenditures are tracking
slightly below $400 million,
primarily due to the shift in the timing of the cyanide expansion.
We intend to increase our investment in our Corpus Christi site to add flexibility for our
anticipated Opteon™ expansion. We are also investing in other
high-return capital projects that will enhance opportunities in our
core businesses. We have gained confidence in our ability to
realize our transformation plan goals of delivering $350 million of cost reductions and $150 million in Adjusted EBITDA associated with
Opteon™ and Altamira through 2017. We believe that we are
increasingly well-positioned to continue to strengthen our balance
sheet and enhance Chemours' market leadership as we move
forward."
Conference Call
As previously announced, Chemours will
hold a conference call and webcast on Tuesday, August 9, 2016 at 8:30 AM EDT. The webcast and additional
presentation materials can be accessed by visiting the Events &
Presentations page of the Chemours investor website,
investors.chemours.com. A webcast replay of the conference call
will be available on the Chemours investor website.
|
|
1
Excludes $131 million of benefit from DuPont
prepayment.
|
— — —
— — — —
— — —
—
About The Chemours Company
The Chemours Company (NYSE:
CC) helps create a colorful, capable and cleaner world through the
power of chemistry. Chemours is a global leader in titanium
technologies, fluoroproducts and chemical solutions, providing its
customers with solutions in a wide range of industries with
market-defining products, application expertise and chemistry-based
innovations. Chemours ingredients are found in plastics and
coatings, refrigeration and air conditioning, mining and oil
refining operations and general industrial manufacturing. Our
flagship products include prominent brands such as Teflon™,
Ti-Pure™, Krytox™, Viton™, Opteon™ and Nafion™. Chemours has
approximately 8,000 employees across 35 manufacturing sites serving
more than 5,000 customers in North
America, Latin America,
Asia-Pacific and Europe.
Chemours is headquartered in Wilmington,
Delaware and is listed on the NYSE under the symbol
CC. For more information please visit chemours.com.
Non-GAAP Financial Measures
We prepare our financial
statements in accordance with Generally Accepted Accounting
Principles ("GAAP"). Within this press release, we make reference
to Adjusted Net Income (Loss), Adjusted Diluted Income (Loss) per
share and Adjusted EBITDA and Free Cash Flow, which are non-GAAP
financial measures. Free Cash Flow is defined as Cash from
Operations minus cash used for PP&E purchases. 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 Diluted
Income (Loss) per share, Adjusted EBITDA and Free Cash Flow to
evaluate the company's performance excluding the impact of certain
non-cash 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 website at
investors.chemours.com.
Forward-Looking Statements
This press release contains
forward-looking statements, which often may be identified by their
use of words like "plans," "expects," "will," "believes,"
"intends," "estimates," "anticipates" or other words of similar
meaning. These forward-looking statements address, among other
things, our anticipated future operating and financial performance,
business plans and prospects, transformation plans, resolution of
environmental liabilities, litigation and other contingencies,
plans to increase profitability, our ability to pay or the amount
of any dividend, and target leverage that 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 not guarantees of future
performance and are based on certain assumptions and expectations
of future events which may not be realized. The matters discussed
in these forward-looking statements also are subject to risks,
uncertainties and other factors that could cause actual results to
differ materially from those projected, anticipated or implied in
the forward-looking statements, as further described in our filings
with the Securities and Exchange Commission, including our annual
report on Form 10-K for the fiscal year ended December 31, 2015. Chemours undertakes no duty to
update any forward-looking statements.
CONTACT:
MEDIA:
Alvenia
Scarborough
Director of Brand and Corporate
Communications
+1.302.773.4507
alvenia.g.scarborough@chemours.com
INVESTORS:
Alisha
Bellezza
Director of Investor
Relations
+1.302.773.2263
investor@chemours.com
|
The Chemours
Company
|
|
Consolidated
Statements of Operations (Unaudited)
|
|
(Dollars in
millions, except per share amounts)
|
|
|
Three months
ended
|
|
Six months
ended
|
|
June
30,
|
|
June
30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Net sales
|
$
|
1,383
|
|
|
$
|
1,508
|
|
|
$
|
2,680
|
|
|
$
|
2,871
|
|
|
Cost of goods
sold
|
1,116
|
|
|
1,282
|
|
|
2,212
|
|
|
2,393
|
|
|
Gross
profit
|
267
|
|
|
226
|
|
|
468
|
|
|
478
|
|
|
Selling, general and
administrative expense
|
174
|
|
|
157
|
|
|
307
|
|
|
324
|
|
|
Research and
development expense
|
17
|
|
|
27
|
|
|
40
|
|
|
50
|
|
|
Employee separation
and asset related charges, net
|
67
|
|
|
61
|
|
|
85
|
|
|
61
|
|
|
Total
expenses
|
258
|
|
|
245
|
|
|
432
|
|
|
435
|
|
|
Equity in earnings of
affiliates
|
4
|
|
|
8
|
|
|
9
|
|
|
11
|
|
|
Interest expense,
net
|
(50)
|
|
|
(28)
|
|
|
(106)
|
|
|
(28)
|
|
|
Other (expense)
income, net
|
(4)
|
|
|
21
|
|
|
89
|
|
|
14
|
|
|
(Loss) income
before income taxes
|
(41)
|
|
|
(18)
|
|
|
28
|
|
|
40
|
|
|
(Benefit from)
provision for income taxes
|
(23)
|
|
|
—
|
|
|
(5)
|
|
|
15
|
|
|
Net (loss)
income
|
(18)
|
|
|
(18)
|
|
|
33
|
|
|
25
|
|
|
Less: Net income
attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Net (loss) income
attributable to Chemours
|
$
|
(18)
|
|
|
$
|
(18)
|
|
|
$
|
33
|
|
|
$
|
25
|
|
|
|
|
|
|
|
|
|
|
Per share
data
|
|
|
|
|
|
|
|
|
Basic earnings
(loss) per share of common stock 1
|
$
|
(0.10)
|
|
|
$
|
(0.10)
|
|
|
$
|
0.18
|
|
|
$
|
0.14
|
|
|
Diluted earnings
(loss) per share of common stock 1
|
$
|
(0.10)
|
|
|
$
|
(0.10)
|
|
|
$
|
0.18
|
|
|
$
|
0.14
|
|
|
Dividends per
share of common stock 1
|
$
|
0.03
|
|
|
$
|
0.55
|
|
|
$
|
0.06
|
|
|
$
|
0.55
|
|
|
|
|
1
|
On July 1, 2015, E.
I. du Pont de Nemours and Company distributed 180,966,833 shares of
Chemours' common stock to holders of its common stock. Basic
and diluted earnings per common share and dividends per common
share for the three and six months ended June 30, 2015 were
calculated using the number of shares distributed on July 1,
2015.
|
|
The Chemours
Company
|
|
Consolidated
Balance Sheets
|
|
(Dollars in
millions, except per share amounts)
|
|
|
June 30,
2016
|
|
December 31,
2015
|
|
(Unaudited)
|
|
|
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash
|
$
|
383
|
|
|
$
|
366
|
|
|
Accounts and notes
receivable - trade, net
|
939
|
|
|
859
|
|
|
Inventories
|
892
|
|
|
972
|
|
|
Prepaid expenses and
other
|
52
|
|
|
58
|
|
|
Assets
held-for-sale
|
26
|
|
|
46
|
|
|
Total current
assets
|
2,292
|
|
|
2,301
|
|
|
Property, plant and
equipment
|
8,334
|
|
|
9,015
|
|
|
Less: Accumulated
depreciation
|
(5,444)
|
|
|
(5,838)
|
|
|
Net property,
plant and equipment
|
2,890
|
|
|
3,177
|
|
|
Goodwill
|
153
|
|
|
166
|
|
|
Other intangible
assets, net
|
8
|
|
|
10
|
|
|
Investments in
affiliates
|
157
|
|
|
136
|
|
|
Assets
held-for-sale
|
352
|
|
|
—
|
|
|
Other
assets
|
369
|
|
|
508
|
|
|
Total
assets
|
$
|
6,221
|
|
|
$
|
6,298
|
|
|
Liabilities and
equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
$
|
875
|
|
|
$
|
973
|
|
|
Short-term borrowings
and current maturities of long-term debt
|
36
|
|
|
39
|
|
|
Other accrued
liabilities
|
533
|
|
|
454
|
|
|
Total current
liabilities
|
1,444
|
|
|
1,466
|
|
|
Long-term debt,
net
|
3,823
|
|
|
3,915
|
|
|
Deferred income
taxes
|
202
|
|
|
234
|
|
|
Other
liabilities
|
583
|
|
|
553
|
|
|
Total
liabilities
|
6,052
|
|
|
6,168
|
|
|
Commitments and
contingent liabilities
|
|
|
|
|
Equity
|
|
|
|
|
Common stock (par
value $.01 per share; 810,000,000 shares authorized; 181,491,426
shares issued and outstanding as of June 30, 2016)
|
2
|
|
|
2
|
|
|
Additional paid-in
capital
|
774
|
|
|
775
|
|
|
Accumulated
deficit
|
(82)
|
|
|
(115)
|
|
|
Accumulated other
comprehensive loss
|
(529)
|
|
|
(536)
|
|
|
Total Chemours
stockholders' equity
|
165
|
|
|
126
|
|
|
Noncontrolling
interests
|
4
|
|
|
4
|
|
|
Total
equity
|
169
|
|
|
130
|
|
|
Total liabilities
and equity
|
$
|
6,221
|
|
|
$
|
6,298
|
|
|
The Chemours
Company
|
|
Consolidated
Statements of Cash Flows (Unaudited)
|
|
(Dollars in
millions)
|
|
|
Six months
ended
|
|
June
30,
|
|
2016
|
|
2015
|
|
Operating
activities
|
|
|
|
|
Net income
|
$
|
33
|
|
|
$
|
25
|
|
|
Adjustments to
reconcile net income to cash provided by (used for) operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
139
|
|
|
131
|
|
|
Amortization of debt
issuance costs and discount
|
11
|
|
|
2
|
|
|
Gain on sale of
assets and business
|
(88)
|
|
|
—
|
|
|
Equity in earnings of
affiliates
|
(9)
|
|
|
(11)
|
|
|
Deferred tax
benefits
|
(36)
|
|
|
(31)
|
|
|
Asset related
charges
|
63
|
|
|
—
|
|
|
Other operating
charges, net
|
14
|
|
|
2
|
|
|
Decrease (increase)
in operating assets:
|
|
|
|
|
Accounts and notes
receivable - trade, net
|
(92)
|
|
|
(205)
|
|
|
Inventories and other
operating assets
|
85
|
|
|
(68)
|
|
|
Increase (decrease)
in operating liabilities:
|
|
|
|
|
Accounts payable and other
operating liabilities
|
6
|
|
|
(78)
|
|
|
Cash
provided by (used for) operating activities
|
126
|
|
|
(233)
|
|
|
Investing
activities
|
|
|
|
|
Purchases of
property, plant and equipment
|
(168)
|
|
|
(287)
|
|
|
Proceeds from sales
of assets and business
|
150
|
|
|
8
|
|
|
Foreign exchange
contract settlements
|
—
|
|
|
(12)
|
|
|
Investment in
affiliates
|
—
|
|
|
(32)
|
|
|
Cash
used for investing activities
|
(18)
|
|
|
(323)
|
|
|
Financing
activities
|
|
|
|
|
Proceeds from
issuance of debt, net
|
—
|
|
|
3,490
|
|
|
Debt
repayments
|
(95)
|
|
|
—
|
|
|
Deferred financing
fees
|
(2)
|
|
|
(77)
|
|
|
Dividends
paid
|
(11)
|
|
|
—
|
|
|
Cash provided at
separation by DuPont
|
—
|
|
|
247
|
|
|
Net transfers to
DuPont
|
—
|
|
|
(2,857)
|
|
|
Cash
(used for) provided by financing activities
|
(108)
|
|
|
803
|
|
|
Effect of exchange
rate changes on cash
|
17
|
|
|
—
|
|
|
Increase in
cash
|
17
|
|
|
247
|
|
|
Cash at beginning
of period
|
366
|
|
|
—
|
|
|
Cash at end of
period
|
$
|
383
|
|
|
$
|
247
|
|
|
|
|
|
|
Non-cash investing
activities:
|
|
|
|
|
Change in property,
plant and equipment included in accounts payable
|
$
|
10
|
|
|
$
|
(35)
|
|
|
The Chemours
Company
|
|
Segment Financial
and Operating Data (Unaudited)
|
|
(Dollars in
millions)
|
|
|
Segment Net
Sales
|
Three months
ended
|
|
|
Three months
ended
|
Sequential
|
|
June
30,
|
Increase /
(Decrease)
|
|
March
31,
|
Increase /
(Decrease)
|
|
2016
|
2015
|
|
2016
|
|
Titanium
Technologies
|
$
|
596
|
|
$
|
642
|
|
$
|
(46)
|
|
|
$
|
521
|
|
$
|
75
|
|
|
Fluoroproducts
|
573
|
|
588
|
|
(15)
|
|
|
531
|
|
42
|
|
|
Chemical
Solutions
|
214
|
|
278
|
|
(64)
|
|
|
245
|
|
(31)
|
|
|
Net
sales
|
$
|
1,383
|
|
$
|
1,508
|
|
$
|
(125)
|
|
|
$
|
1,297
|
|
$
|
86
|
|
|
Segment Adjusted
EBITDA
|
Three months
ended
|
|
|
Three months
ended
|
Sequential
|
|
June
30,
|
Increase /
(Decrease)
|
|
March
31,
|
Increase /
(Decrease)
|
|
2016
|
2015
|
|
2016
|
|
Titanium
Technologies
|
$
|
111
|
|
$
|
91
|
|
$
|
20
|
|
|
$
|
54
|
|
$
|
57
|
|
|
Fluoroproducts
|
105
|
|
54
|
|
51
|
|
|
85
|
|
20
|
|
|
Chemical
Solutions
|
11
|
|
4
|
|
7
|
|
|
10
|
|
1
|
|
|
Corporate and
Other
|
(40)
|
|
(22)
|
|
(18)
|
|
|
(21)
|
|
(19)
|
|
|
Total Adjusted
EBITDA
|
$
|
187
|
|
$
|
127
|
|
$
|
60
|
|
|
$
|
128
|
|
$
|
59
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
Margin
|
14
|
%
|
8
|
%
|
|
|
10
|
%
|
|
|
Quarterly Change
in Net Sales from June 30, 2015
|
|
|
|
2016
Net
Sales
|
Percentage Change
vs 2015
|
Percentage change
due to:
|
|
Local
Price
|
Volume
|
Currency
Effect
|
Portfolio /
Other
|
|
Total
Company
|
$
|
1,383
|
|
(8)%
|
(5)%
|
(1)%
|
(1)%
|
(1)%
|
|
|
|
|
|
|
|
|
Titanium
Technologies
|
$
|
596
|
|
(7)%
|
(6)%
|
(1)%
|
—%
|
—%
|
|
Fluoroproducts
|
$
|
573
|
|
(3)%
|
(1)%
|
1%
|
(2)%
|
(1)%
|
|
Chemical
Solutions
|
$
|
214
|
|
(23)%
|
(9)%
|
(8)%
|
—%
|
(6)%
|
|
Quarterly Change
in Net Sales from March 31, 2016
|
|
|
|
2016
Net
Sales
|
Percentage Change
vs March 31, 2016
|
Percentage change
due to:
|
|
Local
Price
|
Volume
|
Currency
Effect
|
Portfolio /
Other
|
|
Total
Company
|
$
|
1,383
|
|
7%
|
1%
|
6%
|
1%
|
(1)%
|
|
|
|
|
|
|
|
|
Titanium
Technologies
|
$
|
596
|
|
14%
|
4%
|
9%
|
1%
|
—%
|
|
Fluoroproducts
|
$
|
573
|
|
8%
|
(1)%
|
8%
|
1%
|
—%
|
|
Chemical
Solutions
|
$
|
214
|
|
(13)%
|
(2)%
|
(4)%
|
—%
|
(7)%
|
|
The Chemours
Company
|
|
Segment Financial
and Operating Data (Unaudited)
|
|
(Dollars in
millions)
|
|
|
|
Segment Net
Sales
|
Six months
ended
|
|
|
June
30,
|
Increase /
(Decrease)
|
|
2016
|
2015
|
|
Titanium
Technologies
|
$
|
1,117
|
|
$
|
1,187
|
|
$
|
(70)
|
|
|
Fluoroproducts
|
1,104
|
|
1,140
|
|
(36)
|
|
|
Chemical
Solutions
|
459
|
|
544
|
|
(85)
|
|
|
Net
sales
|
$
|
2,680
|
|
$
|
2,871
|
|
$
|
(191)
|
|
|
Segment Adjusted
EBITDA
|
Six months
ended
|
|
|
June
30,
|
Increase /
(Decrease)
|
|
2016
|
2015
|
|
Titanium
Technologies
|
$
|
166
|
|
$
|
184
|
|
$
|
(18)
|
|
|
Fluoroproducts
|
190
|
|
129
|
|
61
|
|
|
Chemical
Solutions
|
21
|
|
5
|
|
16
|
|
|
Corporate and
Other
|
(62)
|
|
(46)
|
|
(16)
|
|
|
Total Adjusted
EBITDA
|
$
|
315
|
|
$
|
272
|
|
$
|
43
|
|
|
|
|
|
|
Adjusted EBITDA
Margin
|
12
|
%
|
9
|
%
|
|
|
Year-to-date
Change in Net Sales from June 30, 2015
|
|
|
|
2016
Net
Sales
|
Percentage Change
vs 2015
|
Percentage change
due to:
|
|
Local
Price
|
Volume
|
Currency
Effect
|
Portfolio /
Other
|
|
Total
Company
|
$
|
2,680
|
|
(7)%
|
(5)%
|
1%
|
(2)%
|
(1)%
|
|
|
|
|
|
|
|
|
Titanium
Technologies
|
$
|
1,117
|
|
(6)%
|
(10)%
|
5%
|
(1)%
|
—%
|
|
Fluoroproducts
|
$
|
1,104
|
|
(3)%
|
1%
|
(1)%
|
(3)%
|
—%
|
|
Chemical
Solutions
|
$
|
459
|
|
(16)%
|
(9)%
|
(3)%
|
—%
|
(4)%
|
|
The Chemours
Company
|
|
Reconciliations of
Non-GAAP Information (Unaudited)
|
|
|
GAAP Net Income
(Loss) to Adjusted Net Income and Adjusted EBITDA Tabular
Reconciliations
|
|
(Dollars in
millions)
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2016
|
|
2015
|
|
Net (loss) income
attributable to Chemours
|
|
$
|
(18)
|
|
|
$
|
(18)
|
|
|
$
|
51
|
|
|
$
|
33
|
|
|
$
|
25
|
|
|
Non-operating pension
and other postretirement employee benefit (income) costs
|
|
(7)
|
|
|
8
|
|
|
(7)
|
|
|
(14)
|
|
|
15
|
|
|
Exchange losses
(gains)
|
|
14
|
|
|
(19)
|
|
|
6
|
|
|
20
|
|
|
(3)
|
|
|
Restructuring
charges
|
|
9
|
|
|
61
|
|
|
17
|
|
|
27
|
|
|
61
|
|
|
Asset related charges
1
|
|
63
|
|
|
—
|
|
|
—
|
|
|
63
|
|
|
—
|
|
|
Loss (gain) on sale
of assets or business
|
|
1
|
|
|
—
|
|
|
(89)
|
|
|
(88)
|
|
|
—
|
|
|
Transaction costs
2
|
|
12
|
|
|
—
|
|
|
3
|
|
|
15
|
|
|
—
|
|
|
Legal and other
charges 3
|
|
13
|
|
|
—
|
|
|
5
|
|
|
19
|
|
|
—
|
|
|
(Benefit from)
provision for income taxes relating to reconciling items
4
|
|
(38)
|
|
|
(15)
|
|
|
25
|
|
|
(15)
|
|
|
(29)
|
|
|
Adjusted Net
Income
|
|
49
|
|
|
17
|
|
|
11
|
|
|
60
|
|
|
69
|
|
|
Net income
attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Interest expense,
net
|
|
50
|
|
|
28
|
|
|
57
|
|
|
106
|
|
|
28
|
|
|
Depreciation and
amortization
|
|
73
|
|
|
67
|
|
|
66
|
|
|
139
|
|
|
131
|
|
|
All remaining
provision for (benefit from) income taxes
4
|
|
15
|
|
|
15
|
|
|
(6)
|
|
|
10
|
|
|
44
|
|
|
Adjusted
EBITDA
|
|
$
|
187
|
|
|
$
|
127
|
|
|
$
|
128
|
|
|
$
|
315
|
|
|
$
|
272
|
|
|
|
|
|
|
|
|
|
|
|
|
|
_______________
|
|
1
|
Includes asset
impairment in connection with the sale of the Sulfur business and
other asset write-offs in the Chemical Solutions
segment.
|
|
2
|
Includes accounting,
legal and bankers transaction fees incurred related to the
Company's strategic initiatives, which includes pre-sale
transaction costs incurred in connection with the sales of the
C&D and Sulfur businesses.
|
|
3
|
Includes litigation
settlements, water treatment accruals related to PFOA, and lease
termination charges.
|
|
4
|
Total of provision
for (benefit from) income taxes reconciles to the amount reported
in the Interim Consolidated Statements of Operations for the three
and six months ended June 30, 2016 and 2015, and the three months
ended March 31, 2016.
|
|
|
|
Adjusted Net Income
diluted earnings per share is calculated using Adjusted Net Income
divided by diluted weighted-average shares of common shares
outstanding during each period, which includes unvested restricted
shares. The table below shows a reconciliation of the
numerator and denominator for basic and diluted earnings per share
and adjusted earnings per share calculations for the periods
indicated:
|
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2016
|
|
2015
|
|
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
(18)
|
|
|
$
|
(18)
|
|
|
$
|
51
|
|
|
$
|
33
|
|
|
$
|
25
|
|
|
Adjusted Net
Income
|
|
$
|
49
|
|
|
$
|
17
|
|
|
$
|
11
|
|
|
$
|
60
|
|
|
$
|
69
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of common shares outstanding - Basic
|
|
181,477,672
|
|
|
180,966,833
|
|
|
181,281,166
|
|
|
181,379,419
|
|
|
180,966,833
|
|
|
Dilutive effect of
the company's employee compensation plans 5
|
|
1,114,845
|
|
|
—
|
|
|
221,974
|
|
|
668,410
|
|
|
—
|
|
|
Weighted average
number of common shares outstanding - Diluted
|
|
182,592,517
|
|
|
180,966,833
|
|
|
181,503,140
|
|
|
182,047,829
|
|
|
180,966,833
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share -
basic
|
|
$
|
(0.10)
|
|
|
$
|
(0.10)
|
|
|
$
|
0.28
|
|
|
$
|
0.18
|
|
|
$
|
0.14
|
|
|
Earnings per share -
diluted 5
|
|
$
|
(0.10)
|
|
|
$
|
(0.10)
|
|
|
$
|
0.28
|
|
|
$
|
0.18
|
|
|
$
|
0.14
|
|
|
Adjusted earnings per
share - basic
|
|
$
|
0.27
|
|
|
$
|
0.09
|
|
|
$
|
0.06
|
|
|
$
|
0.33
|
|
|
$
|
0.38
|
|
|
Adjusted earnings per
share - diluted 5
|
|
$
|
0.27
|
|
|
$
|
0.09
|
|
|
$
|
0.06
|
|
|
$
|
0.33
|
|
|
$
|
0.38
|
|
|
|
5
|
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 Chemours
Company
|
|
Reconciliations of
Non-GAAP Information (Unaudited)
|
|
|
GAAP Cash Flow to
Free Cash Flow Tabular Reconciliations
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2016
|
|
2015
|
|
Cash flow provided by
(used for) operating activities
|
|
$
|
90
|
|
|
$
|
5
|
|
|
$
|
36
|
|
|
$
|
126
|
|
|
$
|
(233)
|
|
|
Cash flow used for
purchases of property, plant, and equipment
|
|
(79)
|
|
|
(150)
|
|
|
(89)
|
|
|
(168)
|
|
|
(287)
|
|
|
Free cash
flows 1
|
|
$
|
11
|
|
|
$
|
(145)
|
|
|
$
|
(53)
|
|
|
$
|
(42)
|
|
|
$
|
(520)
|
|
|
_______________
|
|
1
|
Cash flows from
operating activities for the three months ended March 31, 2016 and
the six months ended June 30, 2016 include the DuPont prepayments
outstanding balance of approximately $131 million and $166 million,
respectively. Excluding the DuPont prepayment, free cash
flows for the three months ended March 31, 2016 and the six months
ended June 30, 2016 would have been negative $219 million and
negative $173 million, respectively.
|
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SOURCE The Chemours Company