WILMINGTON, Del., Aug. 1, 2019 /PRNewswire/ --
Second Quarter 2019 Highlights
- Net Sales of $1.4 billion
- Net Income of $96 million, with
diluted EPS of $0.57
- Adjusted Net Income of $120
million, with diluted Adjusted EPS of $0.72
- Adjusted EBITDA of $283
million
- Returned $108 million to
shareholders through share repurchases and dividends
Other Highlights
- Completed the acquisition of Southern Ionics Minerals on
August 1, enabling operational
synergies and access to high value ores
- Reduced 2019 outlook for Adjusted EBITDA, Adjusted EPS, and
Free Cash Flow
The Chemours Company (Chemours) (NYSE: CC), a global chemistry
company with leading market positions in Fluoroproducts, Chemical
Solutions and Titanium Technologies, today announced its financial
results for the second quarter 2019.
"The second quarter was challenging on a number of fronts,
including softer than expected Ti-Pure™ demand and the continued
impact of illegal imports of HFC refrigerants into Europe," said Chemours President and CEO
Mark Vergnano. "Both issues
impacted our volumes in the second quarter and more than offset
increasing adoption of Opteon™ mobile refrigerants in the United States and Asia, as well as productivity efforts.
We are clearly not satisfied with these results and remain firm in
our commitment to grow our businesses and improve the financial
performance of Chemours."
Second quarter 2019 net sales were $1.4
billion in comparison to $1.8
billion in the record-setting, prior-year quarter.
Results were driven primarily by lower volume in Titanium
Technologies, resulting in a 22 percent decrease in net sales.
Currency and price were small headwinds in the quarter.
Second quarter net income was $96
million, or $0.57 per diluted
share, inclusive of a $7 million
charge related to our Fayetteville facility. Adjusted EBITDA for
the second quarter 2019 was $283
million in comparison to $497
million in the previous year's second quarter, a result of
lower volumes across all segments.
Fluoroproducts
Fluoroproducts segment net sales in the
second quarter were $711 million in
comparison to $801 million in the
prior-year quarter. Illegal imports of HFC refrigerants into
the European Union, softer base refrigerants demand in North America, and macro-economic weakness
more than offset higher demand for Opteon™ mobile refrigerants and
positive impact of application development projects, resulting in a
volume decline versus last year's second quarter. Price was a 2
percent headwind on a year-over-year basis. Segment Adjusted EBITDA
of $180 million decreased 22 percent
versus the prior-year quarter, due to lower net sales and the
trailing impact of operating issues communicated in the previous
quarter.
Chemical Solutions
Chemical Solutions segment net
sales in the second quarter were $130
million in comparison to $153
million in the prior-year quarter. Volumes were lower
year-over-year primarily driven by reduced sales in Performance
Chemicals and Intermediates as well as in Mining Solutions due to
operational issues at a key customer mine. Higher average price was
realized as a result of previously communicated price
announcements. Second quarter 2019 segment Adjusted EBITDA of
$16 million increased 4 percent
versus the prior-year quarter, reflecting price tailwinds and
increased other income from licensing agreements.
Titanium Technologies
Titanium Technologies segment
net sales in the second quarter were $567
million in comparison to $862
million in the prior-year quarter. This decrease was a
result of lower volumes of Ti-Pure™ titanium dioxide driven by a
combination of weak demand and market share loss as we continue the
implementation of our Ti-Pure™ Value Stabilization strategy. Global
average selling prices were stable in comparison to last year's
second quarter and sequentially against the first quarter of 2019.
Segment Adjusted EBITDA was $127
million, in comparison to $295
million in last year's record second quarter. Results were
driven mainly by lower volumes of Ti-Pure™ titanium dioxide and
higher unit costs.
Corporate and Other
Corporate and Other in the second
quarter 2019 represented a $40
million offset to Adjusted EBITDA, versus a $44 million offset in the prior-year quarter.
This improvement was primarily attributable to lower costs
associated with certain legacy environmental matters.
The company realized an Adjusted Effective Tax Rate of
approximately 22 percent for the quarter. The company expects
its Adjusted Effective Tax Rate for the full-year 2019 to be within
a range of 18 to 20 percent, reflecting the company's anticipated
geographic mix of earnings.
Liquidity
As of June 30,
2019, gross consolidated debt was $4.2 billion. Debt, net of $630 million cash, was $3.6 billion, resulting in a net leverage ratio
of approximately 2.7 times on a trailing twelve-month basis.
Cash (used for) provided by operating activities for the second
quarter 2019 was $7 million, versus
$343 million in the prior-year
quarter. Capital expenditures for the second quarter 2019 were
$124 million, versus $126 million in last year's second quarter. Free
Cash Flow for the second quarter 2019 was ($117) million versus the prior-year quarter of
$217 million.
Acquisition
Chemours also announced the strategic
acquisition of Southern Ionics Minerals, LLC (SIM), a minerals
exploration, mining and manufacturing company headquartered in
Jacksonville, Florida for
$25 million. The transaction
with SIM's parent, Southern Ionics Incorporated, closed on August
1. SIM mines and processes titanium and zirconium mineral
sands from the same Trail Ridge geological formation mined by
Chemours in Florida. This
acquisition expands Chemours flexibility and scalability to
internally source ore. The acquisition includes a mineral sands
processing plant, an existing mine site, administrative offices,
and mineral rights currently held by SIM.
Outlook
As a result of the weaker financial
performance in the second quarter and increasing macro-economic
uncertainty, the company is lowering its earnings guidance for the
full year 2019. The company now expects to deliver 2019
Adjusted EBITDA within a range of $1.00 to $1.15
billion. Capital expenditures are expected to be
approximately $500 million, with Free
Cash Flow of approximately $100
million. The company expects Adjusted EPS of between
$2.37 and $3.08 per share.
Mr. Vergnano concluded, "We are disappointed in having to reduce
our guidance for 2019. However, as we look beyond the next
two quarters, we remain confident in the growth prospects for each
of our three core businesses. We have an outstanding asset
base, strong balance sheet, the right strategies, and more
importantly, a great team capable of navigating the business
cycle. We will continue to work hard to increase the
long-term value of Chemours, fully aligned with the interests of
our shareholders."
Conference Call
As previously announced, Chemours will
hold a conference call and webcast on Friday, August 2, 2019 at 8:30 AM EDT. 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 fluoroproducts, chemical solutions, and titanium technologies,
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 refrigeration and air conditioning, mining and general
industrial manufacturing, plastics and coatings. Our flagship
products include prominent brands such as Teflon™, Ti-Pure™,
Krytox™, Viton™, Opteon™, Freon™ and Nafion™. Chemours has
approximately 7,000 employees and 28 manufacturing sites serving
approximately 3,700 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, or follow us on Twitter @Chemours, or
LinkedIn.
Non-GAAP Financial Measures
We prepare our financial
statements in accordance with Generally Accepted Accounting
Principles (GAAP). Within this press release, we may make reference
to Adjusted Net Income (Loss), Adjusted EPS, Adjusted EBITDA,
Adjusted EBITDA Margin, Free Cash Flow, Adjusted Effective Tax
Rate, Return on Invested Capital and Net Leverage Ratio which are
non-GAAP financial measures. The company includes these non-GAAP
financial measures because management believes they are useful to
investors in that they provide for greater transparency with
respect to supplemental information used by management in its
financial and operational decision making.
Management uses Adjusted Net Income (Loss), Adjusted EPS,
Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow, Adjusted
Effective Tax Rate, Return on Invested Capital and Net Leverage
Ratio to evaluate the company's performance excluding the impact of
certain noncash charges and other special items which we expect to
be infrequent in occurrence in order to have comparable financial
results to analyze changes in our underlying business from quarter
to quarter.
Accordingly, the company believes the presentation of these
non-GAAP financial measures, when used in conjunction with GAAP
financial measures, is a useful financial analysis tool that can
assist investors in assessing the company's operating performance
and underlying prospects. This analysis should not be considered in
isolation or as a substitute for analysis of our results as
reported under GAAP. This analysis, as well as the other
information in this press release, should be read in conjunction
with the company's financial statements and footnotes contained in
the documents that the company files with the U.S. Securities and
Exchange Commission. The non-GAAP financial measures used by the
company in this press release may be different from the methods
used by other companies. For more information on the non-GAAP
financial measures, please refer to the attached schedules or the
table, "Reconciliation of Non-GAAP Financial Measures to GAAP
Financial Measures" and materials posted to the company's website
at investors.chemours.com.
Forward-Looking Statements
This press release
contains forward-looking statements, within the meaning of the safe
harbor provisions of the U.S. Private Securities Litigation Reform
Act of 1995, which involve risks and uncertainties. Forward-looking
statements provide current expectations of future events based on
certain assumptions and include any statement that does not
directly relate to a historical or current fact. The words
"believe," "expect," "will," "anticipate," "plan," "estimate,"
"target," "project" and similar expressions, among others,
generally identify "forward-looking statements," which speak only
as of the date such statements were made. These forward-looking
statements may address, among other things, the outcome or
resolution of any pending or future environmental liabilities, the
commencement, outcome or resolution of any regulatory inquiry,
investigation or proceeding, the initiation, outcome or settlement
of any litigation, changes in environmental regulations in the U.S.
or other jurisdictions that affect demand for or adoption of our
products, anticipated future operating and financial performance,
business plans, prospects, targets, goals and commitments, capital
investments and projects, plans for dividends or share repurchases,
sufficiency or longevity of intellectual property protection, cost
savings targets, plans to increase profitability and growth, our
ability to make acquisitions, integrate acquired businesses or
assets into our operations, and achieve anticipated synergies or
cost savings, and our outlook for net sales, Adjusted EBITDA,
Adjusted EPS, Free Cash Flow, Adjusted Effective Tax Rate, and
Return on Invested Capital, all of which are subject to substantial
risks and uncertainties that could cause actual results to differ
materially from those expressed or implied by such statements.
Forward-looking statements are based on certain assumptions and
expectations of future events that may not be accurate or realized.
These statements are not guarantees of future performance.
Forward-looking statements also involve risks and uncertainties
that are beyond Chemours' control. Additionally, there may be other
risks and uncertainties that Chemours is unable to identify at this
time or that Chemours does not currently expect to have a material
impact on its business. Factors that could cause or contribute to
these differences include the risks, uncertainties and other
factors discussed in our filings with the U.S. Securities and
Exchange Commission, including in our Annual Report on Form 10-K
for the year ended December 31, 2018.
Chemours assumes no obligation to revise or update any
forward-looking statement for any reason, except as required by
law.
CONTACT:
INVESTORS
Jonathan Lock
VP, Corporate Development and Investor Relations
+1.302.773.2263
investor@chemours.com
NEWS MEDIA
David
Rosen
Executive and Financial Communications Manager
+1.302.773.2711
media@chemours.com
The Chemours
Company
Consolidated
Statements of Operations (Unaudited)
(Dollars in
millions, except per share amounts)
|
|
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
Net sales
|
|
$
|
1,408
|
|
|
$
|
1,816
|
|
|
$
|
2,784
|
|
|
$
|
3,546
|
|
Cost of goods
sold
|
|
|
1,085
|
|
|
|
1,259
|
|
|
|
2,165
|
|
|
|
2,452
|
|
Gross
profit
|
|
|
323
|
|
|
|
557
|
|
|
|
619
|
|
|
|
1,094
|
|
Selling, general, and
administrative expense
|
|
|
136
|
|
|
|
161
|
|
|
|
292
|
|
|
|
304
|
|
Research and
development expense
|
|
|
19
|
|
|
|
20
|
|
|
|
41
|
|
|
|
40
|
|
Restructuring,
asset-related, and other charges
|
|
|
7
|
|
|
|
10
|
|
|
|
15
|
|
|
|
20
|
|
Total other operating
expenses
|
|
|
162
|
|
|
|
191
|
|
|
|
348
|
|
|
|
364
|
|
Equity in earnings of
affiliates
|
|
|
8
|
|
|
|
10
|
|
|
|
16
|
|
|
|
22
|
|
Interest expense,
net
|
|
|
(52)
|
|
|
|
(48)
|
|
|
|
(103)
|
|
|
|
(100)
|
|
Loss on
extinguishment of debt
|
|
|
—
|
|
|
|
(38)
|
|
|
|
—
|
|
|
|
(38)
|
|
Other income,
net
|
|
|
16
|
|
|
|
33
|
|
|
|
55
|
|
|
|
90
|
|
Income before
income taxes
|
|
|
133
|
|
|
|
323
|
|
|
|
239
|
|
|
|
704
|
|
Provision for income
taxes
|
|
|
37
|
|
|
|
41
|
|
|
|
50
|
|
|
|
125
|
|
Net
income
|
|
|
96
|
|
|
|
282
|
|
|
|
189
|
|
|
|
579
|
|
Less: Net income
attributable to non-controlling interests
|
|
|
—
|
|
|
|
1
|
|
|
|
—
|
|
|
|
1
|
|
Net income
attributable to Chemours
|
|
$
|
96
|
|
|
$
|
281
|
|
|
$
|
189
|
|
|
$
|
578
|
|
Per share
data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share of common stock
|
|
$
|
0.58
|
|
|
$
|
1.58
|
|
|
$
|
1.14
|
|
|
$
|
3.21
|
|
Diluted earnings per
share of common stock
|
|
|
0.57
|
|
|
|
1.53
|
|
|
|
1.12
|
|
|
|
3.11
|
|
The Chemours
Company
Consolidated
Balance Sheets
(Dollars in
millions, except per share amounts)
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
June 30,
2019
|
|
|
December 31,
2018
|
|
Assets
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
630
|
|
|
$
|
1,201
|
|
Accounts and notes
receivable, net
|
|
|
879
|
|
|
|
861
|
|
Inventories
|
|
|
1,250
|
|
|
|
1,147
|
|
Prepaid expenses and
other
|
|
|
73
|
|
|
|
84
|
|
Total current
assets
|
|
|
2,832
|
|
|
|
3,293
|
|
Property, plant, and
equipment
|
|
|
9,259
|
|
|
|
8,992
|
|
Less: Accumulated
depreciation
|
|
|
(5,768)
|
|
|
|
(5,701)
|
|
Property, plant, and
equipment, net
|
|
|
3,491
|
|
|
|
3,291
|
|
Operating lease
right-of-use assets
|
|
|
322
|
|
|
|
—
|
|
Goodwill and other
intangible assets, net
|
|
|
178
|
|
|
|
181
|
|
Investments in
affiliates
|
|
|
177
|
|
|
|
160
|
|
Other
assets
|
|
|
433
|
|
|
|
437
|
|
Total
assets
|
|
$
|
7,433
|
|
|
$
|
7,362
|
|
Liabilities
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
956
|
|
|
$
|
1,137
|
|
Current maturities of
long-term debt
|
|
|
18
|
|
|
|
13
|
|
Other accrued
liabilities
|
|
|
474
|
|
|
|
559
|
|
Total current
liabilities
|
|
|
1,448
|
|
|
|
1,709
|
|
Long-term debt,
net
|
|
|
4,190
|
|
|
|
3,959
|
|
Operating lease
liabilities
|
|
|
265
|
|
|
|
—
|
|
Deferred income
taxes
|
|
|
214
|
|
|
|
217
|
|
Other
liabilities
|
|
|
487
|
|
|
|
457
|
|
Total
liabilities
|
|
|
6,604
|
|
|
|
6,342
|
|
Commitments and
contingent liabilities
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
Common stock (par
value $0.01 per share; 810,000,000 shares authorized; 188,801,201
shares issued and 163,481,966 shares outstanding at June 30,
2019;
187,204,567 shares
issued and 170,780,474 shares outstanding at December 31,
2018)
|
|
|
2
|
|
|
|
2
|
|
Treasury stock, at
cost (25,319,235 shares at June 30, 2019;
16,424,093 shares at
December 31, 2018)
|
|
|
(1,072)
|
|
|
|
(750)
|
|
Additional paid-in
capital
|
|
|
853
|
|
|
|
860
|
|
Retained
earnings
|
|
|
1,571
|
|
|
|
1,466
|
|
Accumulated other
comprehensive loss
|
|
|
(531)
|
|
|
|
(564)
|
|
Total Chemours
stockholders' equity
|
|
|
823
|
|
|
|
1,014
|
|
Non-controlling
interests
|
|
|
6
|
|
|
|
6
|
|
Total
equity
|
|
|
829
|
|
|
|
1,020
|
|
Total liabilities
and equity
|
|
$
|
7,433
|
|
|
$
|
7,362
|
|
The Chemours
Company
|
Consolidated
Statements of Cash Flows (Unaudited)
|
(Dollars in
millions)
|
|
|
|
Six Months Ended
June 30,
|
|
|
|
2019
|
|
|
2018
|
|
Cash flows from
operating activities
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
189
|
|
|
$
|
579
|
|
Adjustments to
reconcile net income to cash (used for) provided by operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
154
|
|
|
|
142
|
|
Gain on sales of
assets and businesses
|
|
|
(3)
|
|
|
|
(45)
|
|
Equity in earnings of
affiliates, net
|
|
|
(15)
|
|
|
|
6
|
|
Loss on extinguishment
of debt
|
|
|
—
|
|
|
|
38
|
|
Amortization of debt
issuance costs and issue discounts
|
|
|
5
|
|
|
|
7
|
|
Deferred tax
provision
|
|
|
2
|
|
|
|
38
|
|
Stock-based
compensation expense
|
|
|
14
|
|
|
|
15
|
|
Net periodic pension
cost (income)
|
|
|
1
|
|
|
|
(7)
|
|
Defined benefit plan
contributions
|
|
|
(13)
|
|
|
|
(8)
|
|
Other operating
charges and credits, net
|
|
|
1
|
|
|
|
(5)
|
|
Decrease (increase) in
operating assets:
|
|
|
|
|
|
|
|
|
Accounts and notes
receivable, net
|
|
|
(16)
|
|
|
|
(175)
|
|
Inventories and other
operating assets
|
|
|
(70)
|
|
|
|
(74)
|
|
(Decrease) increase in
operating liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable and
other operating liabilities
|
|
|
(287)
|
|
|
|
28
|
|
Cash (used for)
provided by operating activities
|
|
|
(38)
|
|
|
|
539
|
|
Cash flows from
investing activities
|
|
|
|
|
|
|
|
|
Purchases of
property, plant, and equipment
|
|
|
(257)
|
|
|
|
(228)
|
|
Acquisition of
business, net
|
|
|
—
|
|
|
|
(37)
|
|
Proceeds from sales
of assets and businesses, net
|
|
|
1
|
|
|
|
41
|
|
Foreign exchange
contract settlements, net
|
|
|
—
|
|
|
|
(6)
|
|
Cash used for
investing activities
|
|
|
(256)
|
|
|
|
(230)
|
|
Cash flows from
financing activities
|
|
|
|
|
|
|
|
|
Proceeds from
issuance of debt, net
|
|
|
—
|
|
|
|
520
|
|
Proceeds from
revolving loan
|
|
|
150
|
|
|
|
—
|
|
Debt
repayments
|
|
|
(6)
|
|
|
|
(672)
|
|
Payments related to
extinguishment of debt
|
|
|
—
|
|
|
|
(29)
|
|
Payments of debt
issuance costs
|
|
|
—
|
|
|
|
(12)
|
|
Purchases of treasury
stock, at cost
|
|
|
(322)
|
|
|
|
(394)
|
|
Proceeds from
exercised stock options, net
|
|
|
8
|
|
|
|
13
|
|
Payments related to
tax withholdings on vested stock awards
|
|
|
(30)
|
|
|
|
(6)
|
|
Payments of
dividends
|
|
|
(83)
|
|
|
|
(61)
|
|
Cash used for
financing activities
|
|
|
(283)
|
|
|
|
(641)
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
|
6
|
|
|
|
(7)
|
|
Decrease in cash
and cash equivalents
|
|
|
(571)
|
|
|
|
(339)
|
|
Cash and cash
equivalents at January 1,
|
|
|
1,201
|
|
|
|
1,556
|
|
Cash and cash
equivalents at June 30,
|
|
$
|
630
|
|
|
$
|
1,217
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash
flows information
|
|
|
|
|
|
|
|
|
Non-cash investing
and financing activities:
|
|
|
|
|
|
|
|
|
Changes in property,
plant, and equipment included in accounts payable
|
|
$
|
(25)
|
|
|
$
|
(1)
|
|
Obligations incurred
under build-to-suit lease arrangement
|
|
|
30
|
|
|
|
26
|
|
The Chemours
Company
|
Segment Financial
and Operating Data (Unaudited)
|
(Dollars in
millions)
|
|
Segment Net
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
Ended
|
|
|
Sequential
|
|
|
June
30,
|
|
|
Increase
/
|
|
|
March
31,
|
|
|
Increase
/
|
|
|
2019
|
|
|
2018
|
|
|
(Decrease)
|
|
|
2019
|
|
|
(Decrease)
|
|
Fluoroproducts
|
$
|
|
711
|
|
|
$
|
|
801
|
|
|
$
|
|
(90)
|
|
|
$
|
|
687
|
|
|
$
|
|
24
|
|
Chemical
Solutions
|
|
|
130
|
|
|
|
|
153
|
|
|
|
|
(23)
|
|
|
|
|
134
|
|
|
|
|
(4)
|
|
Titanium
Technologies
|
|
|
567
|
|
|
|
|
862
|
|
|
|
|
(295)
|
|
|
|
|
555
|
|
|
|
|
12
|
|
Total Net
Sales
|
$
|
|
1,408
|
|
|
$
|
|
1,816
|
|
|
$
|
|
(408)
|
|
|
$
|
|
1,376
|
|
|
$
|
|
32
|
|
Segment Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
Ended
|
|
|
Sequential
|
|
|
June
30,
|
|
|
Increase
/
|
|
|
March
31,
|
|
|
Increase
/
|
|
|
2019
|
|
|
2018
|
|
|
(Decrease)
|
|
|
2019
|
|
|
(Decrease)
|
|
Fluoroproducts
|
$
|
|
180
|
|
|
$
|
|
230
|
|
|
$
|
|
(50)
|
|
|
$
|
|
159
|
|
|
$
|
|
21
|
|
Chemical
Solutions
|
|
|
16
|
|
|
|
|
16
|
|
|
|
|
0
|
|
|
|
|
15
|
|
|
|
|
1
|
|
Titanium
Technologies
|
|
|
127
|
|
|
|
|
295
|
|
|
|
|
(168)
|
|
|
|
|
126
|
|
|
|
|
1
|
|
Corporate and
Other
|
|
|
(40)
|
|
|
|
|
(44)
|
|
|
|
|
4
|
|
|
|
|
(38)
|
|
|
|
|
(2)
|
|
Total Adjusted
EBITDA
|
$
|
|
283
|
|
|
$
|
|
497
|
|
|
$
|
|
(214)
|
|
|
$
|
|
262
|
|
|
$
|
|
21
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
Margin
|
20%
|
|
|
27%
|
|
|
|
|
|
19%
|
|
|
|
|
Quarterly Change
in Net Sales from June 30, 2018
|
|
|
|
|
|
|
|
|
|
Percentage
|
|
Percentage Change
Due To
|
|
|
June 30,
2019
Net
Sales
|
|
|
Change
vs.
June 30,
2018
|
|
Local
Price
|
|
Volume
|
|
Currency
Effect
|
|
Total
Company
|
$
|
|
1,408
|
|
|
|
(22)
|
%
|
|
(1)
|
%
|
|
(20)
|
%
|
|
(1)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fluoroproducts
|
$
|
|
711
|
|
|
|
(11)
|
%
|
|
(2)
|
%
|
|
(7)
|
%
|
|
(2)
|
%
|
Chemical
Solutions
|
|
|
130
|
|
|
|
(15)
|
%
|
|
4
|
%
|
|
(19)
|
%
|
|
—
|
%
|
Titanium
Technologies
|
|
|
567
|
|
|
|
(34)
|
%
|
|
—
|
%
|
|
(33)
|
%
|
|
(1)
|
%
|
Quarterly Change
in Net Sales from March 31, 2019
|
|
|
|
|
|
|
|
|
|
Percentage
|
|
Percentage Change
Due To
|
|
|
June 30,
2019
Net
Sales
|
|
|
Change
vs.
March 31,
2019
|
|
Local
Price
|
|
Volume
|
|
Currency
Effect
|
|
Total
Company
|
$
|
|
1,408
|
|
|
|
2
|
%
|
|
(1)
|
%
|
|
4
|
%
|
|
(1)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fluoroproducts
|
$
|
|
711
|
|
|
|
4
|
%
|
|
—
|
%
|
|
5
|
%
|
|
(1)
|
%
|
Chemical
Solutions
|
|
|
130
|
|
|
|
(3)
|
%
|
|
(1)
|
%
|
|
(2)
|
%
|
|
—
|
%
|
Titanium
Technologies
|
|
|
567
|
|
|
|
2
|
%
|
|
(1)
|
%
|
|
3
|
%
|
|
—
|
%
|
The Chemours
Company
|
Reconciliation of
Non-GAAP Financial Measures to GAAP Financial Measures
(Unaudited)
|
(Dollars in
millions)
|
|
Adjusted EBITDA
and Adjusted Net Income to GAAP Net Income
Reconciliation
|
|
Adjusted earnings
before interest, taxes, depreciation, and amortization ("Adjusted
EBITDA") is defined as income (loss) before income taxes, excluding
the following items: interest expense, depreciation, and
amortization; non-operating pension and other post-retirement
employee benefit costs, which represent the components of net
periodic pension (income) costs excluding the service cost
component; exchange (gains) losses included in other income
(expense), net; restructuring, asset-related, and other charges;
asset impairments; (gains) losses on sale of business or assets;
and, other items not considered indicative of the Company's ongoing
operational performance and expected to occur infrequently.
Adjusted Net Income is defined as net income (loss) attributable to
Chemours, adjusted for items excluded from Adjusted EBITDA, except
interest expense, depreciation, amortization, and certain provision
for (benefit from) income tax amounts.
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
|
June
30,
|
|
|
March
31,
|
|
|
June
30,
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2019
|
|
|
2018
|
|
Net income
attributable to Chemours
|
|
$
|
|
96
|
|
|
$
|
281
|
|
|
$
|
94
|
|
|
$
|
|
189
|
|
|
$
|
578
|
|
Non-operating pension
and other post-retirement employee benefit income
|
|
|
|
(3)
|
|
|
|
|
(7)
|
|
|
|
|
(3)
|
|
|
|
|
(6)
|
|
|
|
|
(14)
|
|
Exchange losses
(gains), net
|
|
|
|
9
|
|
|
|
|
(2)
|
|
|
|
|
(6)
|
|
|
|
|
3
|
|
|
|
|
(2)
|
|
Restructuring,
asset-related, and other charges
|
|
|
|
7
|
|
|
|
|
10
|
|
|
|
|
8
|
|
|
|
|
15
|
|
|
|
|
20
|
|
Loss on
extinguishment of debt
|
|
|
|
—
|
|
|
|
|
38
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
38
|
|
Gain on sales of
assets and businesses (1)
|
|
|
|
(2)
|
|
|
|
|
(3)
|
|
|
|
|
—
|
|
|
|
|
(2)
|
|
|
|
|
(45)
|
|
Transaction
costs
|
|
|
|
1
|
|
|
|
|
9
|
|
|
|
|
—
|
|
|
|
|
1
|
|
|
|
|
9
|
|
Legal charges
(2)
|
|
|
|
8
|
|
|
|
|
10
|
|
|
|
|
29
|
|
|
|
|
38
|
|
|
|
|
14
|
|
Adjustments made to
income taxes (3)
|
|
|
|
7
|
|
|
|
|
(8)
|
|
|
|
|
(5)
|
|
|
|
|
1
|
|
|
|
|
(13)
|
|
Benefit from income
taxes relating to reconciling items (4)
|
|
|
|
(3)
|
|
|
|
|
(14)
|
|
|
|
|
(8)
|
|
|
|
|
(11)
|
|
|
|
|
(5)
|
|
Adjusted Net
Income
|
|
|
|
120
|
|
|
|
|
314
|
|
|
|
|
109
|
|
|
|
|
228
|
|
|
|
|
580
|
|
Net income
attributable to non-controlling interests
|
|
|
|
—
|
|
|
|
|
1
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
1
|
|
Interest expense,
net
|
|
|
|
52
|
|
|
|
|
48
|
|
|
|
|
51
|
|
|
|
|
103
|
|
|
|
|
100
|
|
Depreciation and
amortization
|
|
|
|
78
|
|
|
|
|
71
|
|
|
|
|
76
|
|
|
|
|
154
|
|
|
|
|
141
|
|
All remaining
provision for income taxes
|
|
|
|
33
|
|
|
|
|
63
|
|
|
|
|
26
|
|
|
|
|
60
|
|
|
|
|
143
|
|
Adjusted
EBITDA
|
|
$
|
|
283
|
|
|
$
|
|
497
|
|
|
$
|
|
262
|
|
|
$
|
|
545
|
|
|
$
|
|
965
|
|
(1)
|
For the six months
ended June 30, 2018, gain on sales of assets and businesses
included a $42 million gain associated with the sale of the
Company's Linden, New Jersey site.
|
(2)
|
Includes litigation
settlements, PFOA drinking water treatment accruals, and other
legal charges. For the three and six months ended June 30, 2019,
legal charges included $7 million and $34 million in additional
charges for the approved final Consent Order associated with
certain matters at the Company's Fayetteville, North Carolina
facility.
|
(3)
|
Includes the removal
of certain discrete income tax impacts within the Company's
provision for income taxes, such as the benefit from windfalls on
its share-based payments, historical valuation allowance
adjustments, unrealized gains and losses on foreign exchange rate
changes, and other discrete income tax items.
|
(4)
|
The income tax
impacts included in this caption are determined using the
applicable rates in the taxing jurisdictions in which income or
expense occurred and represents both current and deferred income
tax expense or benefit based on the nature of the non-GAAP
financial measure.
|
The Chemours
Company
|
Reconciliation of
Non-GAAP Financial Measures to GAAP Financial Measures
(Unaudited)
|
(Dollars in
millions, except per share amounts)
|
|
Adjusted Earnings
per Share to GAAP Earnings per Share Reconciliation
|
|
Adjusted earnings per
share ("EPS") is calculated by dividing Adjusted Net Income by the
weighted-average number of common shares outstanding. Diluted
Adjusted EPS accounts for the dilutive impact of stock-based
compensation awards, which includes unvested restricted shares.
Diluted Adjusted EPS considers the impact of potentially-dilutive
securities, except in periods in which there is a loss because the
inclusion of the potentially-dilutive securities would have an
anti-dilutive effect.
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
|
June
30,
|
|
|
March
31,
|
|
|
June
30,
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2019
|
|
|
2018
|
|
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Chemours
|
|
$
|
|
96
|
|
|
$
|
|
281
|
|
|
$
|
|
94
|
|
|
$
|
|
189
|
|
|
$
|
|
578
|
|
Adjusted Net
Income
|
|
|
|
120
|
|
|
|
|
314
|
|
|
|
|
109
|
|
|
|
|
228
|
|
|
|
|
580
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of common shares outstanding - basic
|
|
|
|
164,118,816
|
|
|
|
|
177,798,484
|
|
|
|
|
167,866,468
|
|
|
|
|
165,982,289
|
|
|
|
|
179,922,433
|
|
Dilutive effect of the
Company's employee compensation plans
|
|
|
|
2,822,810
|
|
|
|
|
6,022,757
|
|
|
|
|
4,194,432
|
|
|
|
|
3,508,621
|
|
|
|
|
6,142,986
|
|
Weighted-average
number of common shares outstanding - diluted
|
|
|
|
166,941,626
|
|
|
|
|
183,821,241
|
|
|
|
|
172,060,900
|
|
|
|
|
169,490,910
|
|
|
|
|
186,065,419
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share -
basic
|
|
$
|
|
0.58
|
|
|
$
|
|
1.58
|
|
|
$
|
|
0.56
|
|
|
$
|
|
1.14
|
|
|
$
|
|
3.21
|
|
Earnings per share -
diluted
|
|
|
|
0.57
|
|
|
|
|
1.53
|
|
|
|
|
0.55
|
|
|
|
|
1.12
|
|
|
|
|
3.11
|
|
Adjusted earnings per
share - basic
|
|
|
|
0.73
|
|
|
|
|
1.77
|
|
|
|
|
0.65
|
|
|
|
|
1.38
|
|
|
|
|
3.22
|
|
Adjusted earnings per
share - diluted
|
|
|
|
0.72
|
|
|
|
|
1.71
|
|
|
|
|
0.63
|
|
|
|
|
1.35
|
|
|
|
|
3.12
|
|
|
2019 Estimated
Adjusted EBITDA and Estimated Adjusted EPS to Estimated GAAP Net
Income Reconciliation (*)
|
|
|
|
Year Ended
December 31, 2019
|
|
|
|
Low
|
|
|
High
|
|
Net income
attributable to Chemours
|
|
$
|
357
|
|
|
$
|
466
|
|
Restructuring,
asset-related, and other charges
|
|
|
40
|
|
|
|
50
|
|
Adjusted Net
Income
|
|
|
397
|
|
|
|
516
|
|
Interest expense,
net
|
|
|
207
|
|
|
|
212
|
|
Depreciation and
amortization
|
|
|
309
|
|
|
|
309
|
|
Provision for income
taxes
|
|
|
87
|
|
|
|
113
|
|
Adjusted
EBITDA
|
|
$
|
1,000
|
|
|
$
|
1,150
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of common shares outstanding - basic (1)
|
|
|
164.2
|
|
|
|
164.2
|
|
Dilutive effect of
the Company's employee compensation plans (1,2)
|
|
|
3.5
|
|
|
|
3.5
|
|
Weighted-average
number of common shares outstanding - diluted (1,2)
|
|
|
167.7
|
|
|
|
167.7
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share of common stock
|
|
$
|
2.17
|
|
|
$
|
2.84
|
|
Diluted earnings per
share of common stock (2)
|
|
|
2.13
|
|
|
|
2.78
|
|
Adjusted basic
earnings per share of common stock
|
|
|
2.42
|
|
|
|
3.14
|
|
Adjusted diluted
earnings per share of common stock (2)
|
|
|
2.37
|
|
|
|
3.08
|
|
(1)
|
The Company's
estimates for the weighted-average number of common shares
outstanding - basic and diluted reflect actual results through June
30, 2019 which are carried forward for the projection period and
updated for the estimated impacts of the Company's 2019 share
repurchases.
|
(2)
|
Diluted earnings per
share is calculated using net income available to common
shareholders divided by diluted weighted-average common shares
outstanding during each period, which includes unvested restricted
shares. Diluted earnings per share considers the impact of
potentially dilutive securities except in periods in which there is
a loss because the inclusion of the potential common shares would
have an anti-dilutive effect.
|
(*)
|
The Company's
estimates reflect its current visibility and expectations based on
market factors, such as currency movements, macro-economic factors,
and end-market demand. Actual results could differ materially from
these current estimates.
|
The Chemours
Company
|
Reconciliation of
Non-GAAP Financial Measures to GAAP Financial Measures
(Unaudited)
|
(Dollars in
millions)
|
|
Free Cash Flows to
GAAP Cash Flow Provided by Operating Activities Reconciliation
|
|
Free Cash Flows is
defined as cash flow provided by (used for) operating activities,
less purchases of property, plant, and equipment as shown in the
consolidated statements of cash flows.
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
|
June
30,
|
|
|
March
31,
|
|
|
June
30,
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2019
|
|
|
2018
|
|
Cash flow (used for)
provided by operating activities
|
|
$
|
|
7
|
|
|
$
|
|
343
|
|
|
$
|
|
(44)
|
|
|
$
|
|
(38)
|
|
|
$
|
|
539
|
|
Less: Purchases of
property, plant, and
equipment
|
|
|
|
(124)
|
|
|
|
|
(126)
|
|
|
|
|
(133)
|
|
|
|
|
(257)
|
|
|
|
|
(228)
|
|
Free Cash
Flows
|
|
$
|
|
(117)
|
|
|
$
|
|
217
|
|
|
$
|
|
(177)
|
|
|
$
|
|
(295)
|
|
|
$
|
|
311
|
|
2019 Estimated
Free Cash Flow to GAAP Cash Flow Provided by Operating Activities
Reconciliation (*)
|
|
|
|
(Estimated)
|
|
|
Year Ended
December 31,
|
|
|
2019
|
Cash flow provided by
operating activities
|
|
$
|
~ 600
|
Less: Purchases of
property, plant, and equipment
|
|
|
~ (500)
|
Free Cash
Flows
|
|
$
|
~ 100
|
(*)
|
The Company's
estimates reflect its current visibility and expectations based on
market factors, such as currency movements, macro-economic factors,
and end-market demand. Actual results could differ materially from
these current estimates.
|
Return on Invested
Capital Reconciliation
|
|
Return on Invested
Capital ("ROIC") is defined as Adjusted EBITDA, less depreciation
and amortization ("Adjusted EBIT"), divided by the average of
invested capital, which amounts to net debt, or debt less cash and
cash equivalents, plus equity.
|
|
|
|
Period Ended June
30,
|
|
|
|
2019
|
|
|
2018
|
|
Adjusted EBITDA
(1)
|
|
$
|
1,321
|
|
|
$
|
1,740
|
|
Less: Depreciation
and amortization (1)
|
|
|
(296)
|
|
|
|
(273)
|
|
Adjusted
EBIT
|
|
|
1,025
|
|
|
|
1,467
|
|
|
|
|
|
|
|
|
|
|
Total debt
|
|
|
4,208
|
|
|
|
3,973
|
|
Total
equity
|
|
|
829
|
|
|
|
1,025
|
|
Less: Cash and cash
equivalents
|
|
|
(630)
|
|
|
|
(1,217)
|
|
Invested capital,
net
|
|
$
|
4,407
|
|
|
$
|
3,781
|
|
|
|
|
|
|
|
|
|
|
Average invested
capital (2)
|
|
$
|
3,989
|
|
|
$
|
3,481
|
|
|
|
|
|
|
|
|
|
|
Return on Invested
Capital
|
|
|
25.7
|
%
|
|
|
42.1
|
%
|
(1)
|
Based on amounts for
the trailing 12 months ended June 30, 2019 and 2018.
Reconciliations of Adjusted EBITDA to net income (loss)
attributable to Chemours are provided on a quarterly basis. See the
preceding table for the reconciliation of Adjusted EBITDA to net
income attributable to Chemours for the three and six months ended
June 30, 2019 and 2018.
|
(2)
|
Average invested
capital is based on a five-quarter trailing average of invested
capital, net.
|
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SOURCE The Chemours Company