WILMINGTON, Del., Nov. 6, 2016 /PRNewswire/ --
Third Quarter 2016 Highlights
- Net Sales of $1.4 billion
- Net Income of $204 million, or
$1.11 per diluted share, including
gain on asset sales of $169 million,
impairment charges of $46 million,
interest expense of $51 million and
restructuring costs of $14
million
- Adjusted EBITDA of $268
million
- Adjusted Net Income of $112
million, or $0.61 per diluted
share
Other Highlights
- Continued progress on all transformation plan objectives,
including cost reductions, growth initiatives and portfolio
rationalization
- Improved cash from operating activities by ~$440 million year-to-date
- Retired $315 million of long term
debt through October 31, 2016
- Generated ~$685 million in gross
proceeds from Chemical Solutions divestitures
- Increased full-year Adjusted EBITDA outlook to be between
$740 and $775 million based on a net
income range of approximately $265 to $290
million
The Chemours Company (Chemours) (NYSE: CC), a global chemistry
company with leading market positions in titanium technologies,
fluoroproducts and chemical solutions, today announced financial
results for the third quarter 2016.
Chemours President and CEO Mark
Vergnano said, "We continue to make excellent progress on
all aspects of our transformation plan, realizing an incremental
$60 million of cost savings during
the quarter. We are benefiting from the OpteonTM
refrigerant ramp up and the expansion of our low-cost
TiO2 capacity at Altamira, while at the same time,
delivering our planned cost reductions." He continued, "We
successfully completed the Chemical Solutions portfolio review
during the quarter, generating substantial proceeds. And, in the
quarter, our Titanium Technologies business benefited from more
favorable market conditions, while the fluoropolymers market
remained challenged. Transformation initiatives are pervasive
throughout the company and our results speak for themselves."
Third quarter net sales were $1.4
billion, a decrease of 6 percent from $1.5 billion in the prior-year quarter, primarily
due to the impact of divestitures. Third quarter net income was
$204 million, or $1.11 per diluted share, versus net loss of
$29 million, or ($0.16) per diluted share in the prior-year
quarter. Adjusted EBITDA for the third quarter was $268 million versus $169
million in the prior-year quarter. Benefits from cost
reductions, improved average prices in Titanium Technologies and
improved profitability in Fluoroproducts was partially offset by
the loss of Adjusted EBITDA from the asset sales within Chemical
Solutions.
Sequentially, sales increased 1 percent to $1.4 billion in the third quarter. Third quarter
net income was $222 million higher,
or $1.21 per diluted share, versus
the second quarter net loss of $18
million or ($0.10) per diluted
share. The sales improvement was largely driven by higher seasonal
volumes in Titanium Technologies and Fluoroproducts supplemented by
higher TiO2 pricing. Third quarter Adjusted EBITDA
increased $81 million from
$187 million in the second quarter of
2016. Improved pricing in Titanium Technologies and
OpteonTM refrigerant growth in Fluoroproducts were the
primary drivers of the improved sequential performance, which were
partially offset by unfavorable Corporate and Other expenses.
Titanium Technologies
In the third quarter, Titanium
Technologies segment sales were $625
million, a 1 percent increase versus the prior-year quarter.
Improved year-over-year global average TiO2 pricing
increased sales 2 percent which was partially offset by minimal
currency headwinds. Year-over-year, TiO2 volume was
higher in all regions outside of China. Segment Adjusted EBITDA was
$144 million, an 80 percent increase
over the prior-year quarter. The increase in Adjusted EBITDA was
primarily due to the benefits of price increases, transformation
plan cost savings, and operational efficiencies.
Sequentially, versus the second quarter of 2016, sales increased
5 percent and Adjusted EBITDA increased $33
million, or 30 percent. The increase in sales was due to
slightly stronger volumes and a higher global average price
increase of approximately 3 percent. A volume increase of 2 percent
was the result of stronger demand primarily in Asia and Latin
America. Higher Adjusted EBITDA was driven by the benefits
of global average price increases, stronger volumes and better
utilization resulting in lower costs.
Fluoroproducts
Fluoroproducts segment sales in the
third quarter were $591 million, an
increase of 3 percent versus the prior-year quarter. A substantial
increase in demand for Opteon™ refrigerants was mostly offset by
government-imposed volume reductions of base refrigerants as well
as competitive pricing pressure within fluoropolymers. Segment
Adjusted EBITDA was $143 million, a
57 percent improvement versus the prior-year quarter. Increased
contributions from Opteon™ refrigerants and transformation cost
reductions were partially offset by unfavorable pricing and mix
within our fluoropolymers product lines.
Sequentially, versus the second quarter of 2016, sales and
Adjusted EBITDA increased 3 percent and 36 percent, respectively.
The Opteon™ refrigerants ramp up and strong demand for certain
fluoropolymers products more than offset regulatory-driven lower
demand in base refrigerant sales. In addition to Opteon™
refrigerant growth, the increase in Adjusted EBITDA was primarily
attributed to cost reductions.
Chemical Solutions
In the third quarter, Chemical
Solutions segment sales were $182
million, a 38 percent decline versus the prior-year quarter.
Lower sales were driven by the divestitures of the Clean and
Disinfect business, Sulfur Products and Beaumont Aniline facility,
as well as reduced average prices based on contractual pass-through
terms. Segment Adjusted EBITDA was $9
million, $1 million above the
prior-year quarter, reflecting lower operating costs partially
offset by the impacts of the divestitures.
Sequentially, sales decreased 15 percent versus the second
quarter of 2016, while Adjusted EBITDA was $2 million lower driven primarily by portfolio
changes completed in the current quarter.
In the third quarter, we completed the sales of Sulfur Products
and the Clean and Disinfect business to Veolia and LANXESS,
respectively, for combined proceeds of approximately
$544 million. Also, consistent with the company's plan to
streamline the portfolio and deliver cost savings in 2017, the
company ceased production at the Niagara Reactive Metals facility
at the end of September.
Corporate and Other
Corporate and Other represented a
negative $28 million of Adjusted
EBITDA, an increase of $18 million
versus the prior-year quarter. Higher expenses were primarily
related to performance-related compensation adjustments and other
miscellaneous expenses in the quarter. Versus the second quarter of
2016, Corporate and Other expenses declined $12 million largely due to timing of
expenses.
The company realized a cash tax rate of approximately 16 percent
in the quarter. For the full year 2016, the company expects its
cash tax rate to be in the low-twenties on a percentage basis,
taking into consideration the company's anticipated geographic mix
of earnings and implications of all divestitures during the
year.
Liquidity
As of September 30,
2016, gross consolidated debt was $3.8 billion. Debt, net of cash, was $2.8 billion. In the quarter, the company retired
approximately $115 million of its
bonds. Cash balances were $957
million at September 30, 2016.
In October 2016, the company retired
an additional $107 million of its
bonds, resulting in over $315 million
of total long term debt retired year-to-date. As a result, the
company expects to save approximately $19
million annually from lower interest obligations.
Improved inventory management along with the start of seasonal
working capital unwind drove strong progress in working capital
results and led to free cash flow of $132
million, up $124 million
versus the previous-year quarter. Year-to-date working
capital1 performance and free cash flow improved by
$448 million and $601 million, respectively, versus the
prior-year.
Outlook
"We remain disciplined and focused on
executing our Five-Point Transformation Plan," Vergnano commented.
"We expect the transformation plan improvements, along with a
stronger price environment for TiO2 and increased
OpteonTM refrigerants adoption to continue to enhance
earnings, despite loss of earnings from divestitures, base
refrigerant sales timing and unfavorable Fluoropolymers mix. We now
expect full-year 2016 Adjusted EBITDA to be between $740 million and $775 million. We are pleased
with the progress we have made year-to-date, and believe we are in
a stronger position as we move forward."
Conference Call
As previously announced, Chemours will
hold a conference call and webcast on Monday, November 7, 2016 at 8:30 AM EST. The webcast and additional
presentation materials can be accessed by visiting the Events &
Presentations page of Chemours' investor website,
investors.chemours.com. A webcast replay of the conference call
will be available on the Chemours' investor website.
About The Chemours Company
The Chemours Company (NYSE:
CC) 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 25 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, Brand Marketing and
Corporate
Communications
+1.302.773.4507
alvenia.g.scarborough@chemours.com
INVESTORS:
Alisha
Bellezza
Treasurer and 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
|
|
Nine months
ended
|
|
September
30,
|
|
September
30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Net sales
|
$
|
1,398
|
|
|
$
|
1,486
|
|
|
$
|
4,078
|
|
|
$
|
4,357
|
|
|
Cost of goods
sold
|
1,056
|
|
|
1,222
|
|
|
3,267
|
|
|
3,615
|
|
|
Gross
profit
|
342
|
|
|
264
|
|
|
811
|
|
|
742
|
|
|
Selling, general and
administrative expense
|
148
|
|
|
157
|
|
|
454
|
|
|
481
|
|
|
Research and
development expense
|
19
|
|
|
18
|
|
|
60
|
|
|
68
|
|
|
Restructuring and
asset related charges, net
|
60
|
|
|
184
|
|
|
145
|
|
|
245
|
|
|
Goodwill
impairment
|
—
|
|
|
25
|
|
|
—
|
|
|
25
|
|
|
Total
expenses
|
227
|
|
|
384
|
|
|
659
|
|
|
819
|
|
|
Equity in earnings of
affiliates
|
9
|
|
|
7
|
|
|
17
|
|
|
18
|
|
|
Interest expense,
net
|
(51)
|
|
|
(51)
|
|
|
(157)
|
|
|
(79)
|
|
|
Other income,
net
|
161
|
|
|
57
|
|
|
250
|
|
|
71
|
|
|
Income (loss)
before income taxes
|
234
|
|
|
(107)
|
|
|
262
|
|
|
(67)
|
|
|
Provision (benefit
from) for income taxes
|
30
|
|
|
(78)
|
|
|
25
|
|
|
(63)
|
|
|
Net income
(loss)
|
204
|
|
|
(29)
|
|
|
237
|
|
|
(4)
|
|
|
Less: Net income
attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Net income (loss)
attributable to Chemours
|
$
|
204
|
|
|
$
|
(29)
|
|
|
$
|
237
|
|
|
$
|
(4)
|
|
|
|
|
|
|
|
|
|
|
Per share
data
|
|
|
|
|
|
|
|
|
Basic earnings
(loss) per share of common stock
|
$
|
1.12
|
|
|
$
|
(0.16)
|
|
|
$
|
1.31
|
|
|
$
|
(0.02)
|
|
|
Diluted earnings
per share of common stock
|
$
|
1.11
|
|
|
$
|
(0.16)
|
|
|
$
|
1.30
|
|
|
$
|
(0.02)
|
|
|
Dividends per
share of common stock
|
$
|
0.03
|
|
|
$
|
0.03
|
|
|
$
|
0.09
|
|
|
$
|
0.58
|
|
|
The Chemours
Company
Consolidated Balance Sheets
(Dollars in millions, except per share amounts)
|
|
|
September 30,
2016
|
|
December 31,
2015
|
|
(Unaudited)
|
|
|
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
|
957
|
|
|
$
|
366
|
|
|
Accounts and notes
receivable - trade, net
|
881
|
|
|
859
|
|
|
Inventories
|
846
|
|
|
972
|
|
|
Prepaid expenses and
other
|
73
|
|
|
104
|
|
|
Total current
assets
|
2,757
|
|
|
2,301
|
|
|
Property, plant and
equipment
|
8,218
|
|
|
9,015
|
|
|
Less: Accumulated
depreciation
|
(5,393)
|
|
|
(5,838)
|
|
|
Net property, plant
and equipment
|
2,825
|
|
|
3,177
|
|
|
Goodwill
|
153
|
|
|
166
|
|
|
Other intangible
assets, net
|
18
|
|
|
10
|
|
|
Investments in
affiliates
|
169
|
|
|
136
|
|
|
Other
assets
|
367
|
|
|
508
|
|
|
Total
assets
|
$
|
6,289
|
|
|
$
|
6,298
|
|
|
Liabilities and
equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
$
|
835
|
|
|
$
|
973
|
|
|
Short-term borrowings
and current maturities of long-term debt
|
32
|
|
|
39
|
|
|
Other accrued
liabilities
|
569
|
|
|
454
|
|
|
Total current
liabilities
|
1,436
|
|
|
1,466
|
|
|
Long-term debt,
net
|
3,713
|
|
|
3,915
|
|
|
Deferred income
taxes
|
201
|
|
|
234
|
|
|
Other
liabilities
|
558
|
|
|
553
|
|
|
Total
liabilities
|
5,908
|
|
|
6,168
|
|
|
Commitments and
contingent liabilities
|
|
|
|
|
Equity
|
|
|
|
|
Common stock (par
value $0.01 per share; 810,000,000 shares authorized; 181,720,722
shares issued and outstanding as of September 30, 2016)
|
2
|
|
|
2
|
|
|
Additional paid in
capital
|
781
|
|
|
775
|
|
|
Retained earnings
(accumulated deficit)
|
117
|
|
|
(115)
|
|
|
Accumulated other
comprehensive loss
|
(523)
|
|
|
(536)
|
|
|
Total Chemours
stockholders' equity
|
377
|
|
|
126
|
|
|
Noncontrolling
interests
|
4
|
|
|
4
|
|
|
Total
equity
|
381
|
|
|
130
|
|
|
Total liabilities
and equity
|
$
|
6,289
|
|
|
$
|
6,298
|
|
|
The Chemours
Company
Consolidated Statements of Cash Flows (Unaudited)
(Dollars in millions)
|
|
|
Nine months
ended
|
|
September
30,
|
|
2016
|
|
2015
|
|
Operating
activities
|
|
|
|
|
Net income
(loss)
|
$
|
237
|
|
|
$
|
(4)
|
|
|
Adjustments to
reconcile net income (loss) to cash used for operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
212
|
|
|
201
|
|
|
Amortization of debt
issuance costs and discount
|
15
|
|
|
5
|
|
|
Gain on sale of
assets and business
|
(258)
|
|
|
—
|
|
|
Equity in earnings of
affiliates
|
(17)
|
|
|
(18)
|
|
|
Deferred tax
benefits
|
(29)
|
|
|
(86)
|
|
|
Asset related
charges
|
109
|
|
|
191
|
|
|
Other operating
charges and credits, net
|
33
|
|
|
17
|
|
|
(Increase) decrease
in operating assets:
|
|
|
|
|
Accounts and notes
receivable - trade, net
|
(63)
|
|
|
(250)
|
|
|
Inventories and other
operating assets
|
113
|
|
|
(29)
|
|
|
Decrease in operating
liabilities:
|
|
|
|
|
Accounts payable and other
operating liabilities
|
(28)
|
|
|
(147)
|
|
|
Cash provided by
(used for) operating activities
|
324
|
|
|
(120)
|
|
|
Investing
activities
|
|
|
|
|
Purchases of
property, plant and equipment
|
(235)
|
|
|
(392)
|
|
|
Purchase of
Intangible Assets
|
—
|
|
|
|
|
Proceeds from sales
of assets and business, net of cash transferred
|
707
|
|
|
8
|
|
|
Foreign exchange
contract settlements
|
(1)
|
|
|
61
|
|
|
Investment in
affiliates
|
(2)
|
|
|
(32)
|
|
|
Cash provided by
(used for) investing activities
|
469
|
|
|
(355)
|
|
|
Financing
activities
|
|
|
|
|
Proceeds from
issuance of debt, net
|
—
|
|
|
3,490
|
|
|
Debt
repayments
|
(212)
|
|
|
(6)
|
|
|
Deferred financing
fees
|
(2)
|
|
|
(79)
|
|
|
Dividends
paid
|
(16)
|
|
|
(100)
|
|
|
Cash provided at
separation by DuPont
|
—
|
|
|
247
|
|
|
Net transfers to
DuPont
|
—
|
|
|
(2,857)
|
|
|
Cash (used for)
provided by financing activities
|
(230)
|
|
|
695
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
28
|
|
|
(5)
|
|
|
Increase in cash
and cash equivalents
|
591
|
|
|
215
|
|
|
Cash and cash
equivalents at beginning of period
|
366
|
|
|
—
|
|
|
Cash and cash
equivalents at end of period
|
$
|
957
|
|
|
$
|
215
|
|
|
|
|
|
|
Non-cash investing
activities:
|
|
|
|
|
Change in property,
plant and equipment included in accounts payable
|
$
|
9
|
|
|
$
|
(42)
|
|
|
The Chemours
Company
Segment Financial and Operating Data (Unaudited)
(Dollars in millions)
|
|
|
Segment Net
Sales
|
Three months
ended
|
|
|
Three months
ended
|
Sequential
|
|
September
30,
|
Increase /
(Decrease)
|
|
June
30,
|
Increase /
(Decrease)
|
|
2016
|
2015
|
|
2016
|
|
Titanium
Technologies
|
$
|
625
|
|
$
|
616
|
|
$
|
9
|
|
|
$
|
596
|
|
$
|
29
|
|
|
Fluoroproducts
|
591
|
|
575
|
|
16
|
|
|
573
|
|
18
|
|
|
Chemical
Solutions
|
182
|
|
295
|
|
(113)
|
|
|
214
|
|
(32)
|
|
|
Net
sales
|
$
|
1,398
|
|
$
|
1,486
|
|
$
|
(88)
|
|
|
$
|
1,383
|
|
$
|
15
|
|
|
|
|
|
|
|
|
Segment Adjusted
EBITDA
|
Three months
ended
|
|
|
Three months
ended
|
Sequential
|
|
September
30,
|
Increase /
(Decrease)
|
|
June
30,
|
Increase /
(Decrease)
|
|
2016
|
2015
|
|
2016
|
|
Titanium
Technologies
|
$
|
144
|
|
$
|
80
|
|
$
|
64
|
|
|
$
|
111
|
|
$
|
33
|
|
|
Fluoroproducts
|
143
|
|
91
|
|
52
|
|
|
105
|
|
38
|
|
|
Chemical
Solutions
|
9
|
|
8
|
|
1
|
|
|
11
|
|
(2)
|
|
|
Corporate and
Other
|
(28)
|
|
(10)
|
|
(18)
|
|
|
(40)
|
|
12
|
|
|
Total Adjusted
EBITDA
|
$
|
268
|
|
$
|
169
|
|
$
|
99
|
|
|
$
|
187
|
|
$
|
81
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
Margin
|
19
|
%
|
11
|
%
|
|
|
14
|
%
|
|
|
Quarterly Change
in Net Sales from September 30, 2015
|
|
|
|
September 30,
2016
Net
Sales
|
Percentage
Change vs
2015
|
Percentage change
due to:
|
|
Local
Price
|
Volume
|
Currency
Effect
|
Portfolio /
Other
|
|
Total
Company
|
$
|
1,398
|
|
(6)%
|
(1)%
|
—%
|
—%
|
(5)%
|
|
|
|
|
|
|
|
|
Titanium
Technologies
|
$
|
625
|
|
1%
|
1%
|
—%
|
—%
|
—%
|
|
Fluoroproducts
|
$
|
591
|
|
3%
|
(2)%
|
5%
|
—%
|
—%
|
|
Chemical
Solutions
|
$
|
182
|
|
(38)%
|
(7)%
|
(5)%
|
—%
|
(26)%
|
|
|
|
|
Quarterly Change
in Net Sales from June 30, 2016
|
|
|
|
September 30,
2016
Net
Sales
|
Percentage
Change vs
June 30, 2016
|
Percentage change
due to:
|
|
Local
Price
|
Volume
|
Currency
Effect
|
Portfolio /
Other
|
|
Total
Company
|
$
|
1,398
|
|
1%
|
1%
|
3%
|
—%
|
(3)%
|
|
|
|
|
|
|
|
|
Titanium
Technologies
|
$
|
625
|
|
5%
|
3%
|
2%
|
—%
|
—%
|
|
Fluoroproducts
|
$
|
591
|
|
3%
|
—%
|
3%
|
—%
|
—%
|
|
Chemical
Solutions
|
$
|
182
|
|
(15)%
|
(3)%
|
9%
|
—%
|
(21)%
|
|
The Chemours
Company
Segment Financial and Operating Data (Unaudited)
(Dollars in millions)
|
|
|
Segment Net
Sales
|
Nine months
ended
|
|
|
September
30,
|
Increase /
(Decrease)
|
|
2016
|
2015
|
|
Titanium
Technologies
|
$
|
1,742
|
|
$
|
1,803
|
|
$
|
(61)
|
|
|
Fluoroproducts
|
1,695
|
|
1,715
|
|
(20)
|
|
|
Chemical
Solutions
|
641
|
|
839
|
|
(198)
|
|
|
Net
sales
|
$
|
4,078
|
|
$
|
4,357
|
|
$
|
(279)
|
|
|
|
|
|
Segment Adjusted
EBITDA
|
Nine months
ended
|
|
|
September
30,
|
Increase /
(Decrease)
|
|
2016
|
2015
|
|
Titanium
Technologies
|
$
|
309
|
|
$
|
264
|
|
$
|
45
|
|
|
Fluoroproducts
|
333
|
|
220
|
|
113
|
|
|
Chemical
Solutions
|
30
|
|
13
|
|
17
|
|
|
Corporate and
Other
|
(89)
|
|
(56)
|
|
(33)
|
|
|
Total Adjusted
EBITDA
|
$
|
583
|
|
$
|
441
|
|
$
|
142
|
|
|
|
|
|
|
Adjusted EBITDA
Margin
|
14
|
%
|
10
|
%
|
|
|
Year-to-date
Change in Net Sales from September 30, 2015
|
|
|
|
2016
Net
Sales
|
Percentage
Change vs
2015
|
Percentage change
due to:
|
|
Local
Price
|
Volume
|
Currency
Effect
|
Portfolio /
Other
|
|
Total
Company
|
$
|
4,078
|
|
(6)%
|
(4)%
|
1%
|
(1)%
|
(2)%
|
|
|
|
|
|
|
|
|
Titanium
Technologies
|
$
|
1,742
|
|
(3)%
|
(6)%
|
3%
|
—%
|
—%
|
|
Fluoroproducts
|
$
|
1,695
|
|
(1)%
|
—%
|
1%
|
(2)%
|
—%
|
|
Chemical
Solutions
|
$
|
641
|
|
(24)%
|
(8)%
|
(4)%
|
—%
|
(12)%
|
|
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
|
|
Nine months
ended
|
|
|
September
30,
|
|
June
30,
|
|
September
30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2016
|
|
2015
|
|
Net income (loss)
attributable to Chemours
|
|
$
|
204
|
|
|
$
|
(29)
|
|
|
$
|
(18)
|
|
|
$
|
237
|
|
|
$
|
(4)
|
|
|
Non-operating pension
and other postretirement employee benefit (income) costs
|
|
(5)
|
|
|
(10)
|
|
|
(7)
|
|
|
(19)
|
|
|
5
|
|
|
Exchange losses
(gains)
|
|
17
|
|
|
(44)
|
|
|
14
|
|
|
37
|
|
|
(47)
|
|
|
Restructuring
charges
|
|
14
|
|
|
139
|
|
|
9
|
|
|
41
|
|
|
200
|
|
|
Asset related
charges1
|
|
46
|
|
|
70
|
|
|
63
|
|
|
109
|
|
|
70
|
|
|
(Gain) loss on sale
of assets or business
|
|
(169)
|
|
|
—
|
|
|
1
|
|
|
(258)
|
|
|
—
|
|
|
Transaction
costs2
|
|
2
|
|
|
—
|
|
|
12
|
|
|
18
|
|
|
—
|
|
|
Legal and other
charges3
|
|
5
|
|
|
—
|
|
|
13
|
|
|
24
|
|
|
—
|
|
|
(Benefit from)
provision for income taxes relating to reconciling
items4
|
|
(2)
|
|
|
(53)
|
|
|
(38)
|
|
|
(16)
|
|
|
(82)
|
|
|
Adjusted Net
Income
|
|
112
|
|
|
73
|
|
|
49
|
|
|
173
|
|
|
142
|
|
|
Net income
attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Interest expense,
net
|
|
51
|
|
|
51
|
|
|
50
|
|
|
157
|
|
|
79
|
|
|
Depreciation and
amortization
|
|
73
|
|
|
70
|
|
|
73
|
|
|
212
|
|
|
201
|
|
|
All remaining
provision for (benefit from) income taxes4
|
|
32
|
|
|
(25)
|
|
|
15
|
|
|
41
|
|
|
19
|
|
|
Adjusted
EBITDA
|
|
$
|
268
|
|
|
$
|
169
|
|
|
$
|
187
|
|
|
$
|
583
|
|
|
$
|
441
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
The three and nine
months ended September 30, 2016 includes $46 million pre-tax
asset impairment of our Pascagoula Aniline facility and other asset
write-offs. The nine months ended September 30, 2016
also included $58 million pre-tax asset impairment in connection
with the sale of the Sulfur business and other asset write-offs,
which were recorded in the second quarter of 2016. The three
and nine months ended September 30, 2015 includes $25 million
of goodwill impairment and $45 asset impairment of the RMS
facility. All of these charges are recorded 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 nine months ended September 30, 2016 and 2015.
|
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
|
|
Nine months
ended
|
|
|
September
30,
|
|
June
30,
|
|
September
30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2016
|
|
2015
|
|
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
204
|
|
|
$
|
(29)
|
|
|
$
|
(18)
|
|
|
$
|
237
|
|
|
$
|
(4)
|
|
|
Adjusted Net
Income
|
|
$
|
112
|
|
|
$
|
73
|
|
|
$
|
49
|
|
|
$
|
173
|
|
|
$
|
142
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of common shares outstanding - Basic
|
|
181,596,161
|
|
|
180,968,049
|
|
|
181,477,672
|
|
|
181,452,194
|
|
|
180,968,049
|
|
|
Dilutive effect of
the company's employee compensation plans 5
|
|
1,932,395
|
|
|
918,680
|
|
|
1,114,845
|
|
|
1,089,738
|
|
|
918,680
|
|
|
Weighted average
number of common shares outstanding - Diluted
|
|
183,528,556
|
|
|
181,886,729
|
|
|
182,592,517
|
|
|
182,541,932
|
|
|
181,886,729
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share -
basic
|
|
$
|
1.12
|
|
|
$
|
(0.16)
|
|
|
$
|
(0.10)
|
|
|
$
|
1.31
|
|
|
$
|
(0.02)
|
|
|
Earnings per share -
diluted5
|
|
$
|
1.11
|
|
|
$
|
(0.16)
|
|
|
$
|
(0.10)
|
|
|
$
|
1.30
|
|
|
$
|
(0.02)
|
|
|
Adjusted earnings per
share – basic
|
|
$
|
0.62
|
|
|
$
|
0.40
|
|
|
$
|
0.27
|
|
|
$
|
0.95
|
|
|
$
|
0.78
|
|
|
Adjusted earnings per
share - diluted5
|
|
$
|
0.61
|
|
|
$
|
0.40
|
|
|
$
|
0.27
|
|
|
$
|
0.95
|
|
|
$
|
0.78
|
|
|
|
|
|
|
5
|
Diluted earnings
(loss) per share is calculated using net income (loss) available to
common shareholders divided by diluted weighted-average shares of
common shares outstanding during each period, which includes
unvested restricted shares. Diluted earnings per share considers
the impact of potentially dilutive securities except in periods in
which there is a loss because the inclusion of the potential common
shares would have an antidilutive effect.
|
|
The Chemours
Company
Reconciliations of Non-GAAP Information (Unaudited)
|
|
|
Estimated Income
Before Income Taxes and Estimated Adjusted EBITDA Tabular
Reconciliations
(Dollars in millions)
|
|
|
2016 Full Year
Estimate
|
|
(Dollars in
millions)
|
Low
|
|
High
|
|
Net income
attributable to Chemours
|
$
|
265
|
|
|
$
|
290
|
|
|
Non-operating pension
and other postretirement employee benefit (income) costs
|
(25)
|
|
|
(20)
|
|
|
Exchange
losses1
|
37
|
|
|
37
|
|
|
Restructuring
charges
|
50
|
|
|
45
|
|
|
Asset related
charges2
|
109
|
|
|
109
|
|
|
Gain on sale of
assets or business2
|
(258)
|
|
|
(258)
|
|
|
Transaction costs,
legal and other charges2
|
42
|
|
|
42
|
|
|
Provision for income
taxes relating to reconciling items3
|
(20)
|
|
|
(20)
|
|
|
Adjusted pre-tax
income
|
200
|
|
|
225
|
|
|
Net income
attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
Interest expense,
net
|
210
|
|
|
210
|
|
|
Depreciation and
amortization
|
280
|
|
|
280
|
|
|
All remaining
provision for income taxes3
|
50
|
|
|
60
|
|
|
Adjusted
EBITDA
|
$
|
740
|
|
|
$
|
775
|
|
|
|
|
|
|
1
|
The amount represents
the year-to-date net exchange losses incurred in the nine months
ended September 30, 2016. Full year actual results could
differ from the current estimate. and therefore could also change
our estimated income before income taxes. Forecasting the
remeasurement impact of foreign currency exchange fluctuation is
not practical without unreasonable effort.
|
|
2
|
At this time, we
cannot estimate additional impairment, gain on sale, transaction
costs and legal and other charges. Therefore, the amounts
included are the same as the actual amounts reported in the nine
months period ended September 30, 2016.
|
|
3
|
Provision for
(benefit from) income taxes were estimated based upon current
geographical mix of earnings. Actual provision for (benefit
from) income tax could defer from current estimate.
|
|
GAAP Cash Flow to
Free Cash Flow Tabular Reconciliations
|
|
|
|
Three months
ended
|
|
Nine months
ended
|
|
|
September
30,
|
|
June
30,
|
|
September
30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2016
|
|
2015
|
|
Cash flow provided by
(used for) operating activities
|
|
$
|
199
|
|
|
$
|
113
|
|
|
$
|
90
|
|
|
$
|
324
|
|
|
$
|
(120)
|
|
|
Cash flow used for
purchases of property, plant and
equipment
|
|
(67)
|
|
|
(105)
|
|
|
(79)
|
|
|
(235)
|
|
|
(392)
|
|
|
Free cash
flows 4
|
|
$
|
132
|
|
|
$
|
8
|
|
|
$
|
11
|
|
|
$
|
89
|
|
|
$
|
(512)
|
|
|
|
|
|
|
4
|
Cash flows from
operating activities for the nine months ended September 30, 2016
include the DuPont prepayments outstanding balance of approximately
$93 million. Excluding the DuPont prepayment, free cash flows
for the nine months ended September 30, 2016 would have been
negative $4 million.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/the-chemours-company-reports-third-quarter-2016-results-significant-earnings-and-margins-increases-driven-by-progress-on-transformation-plan-and-improved-market-conditions-300358103.html
SOURCE The Chemours Company