WILMINGTON, Del., July 30, 2020 /PRNewswire/ -- 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 2020.
Second Quarter 2020 Highlights
- Net Sales of $1.1 billion
- Net Income of $24 million, with
EPS of $0.15
- Adjusted Net Income of $30
million, with Adjusted EPS of $0.18
- Adjusted EBITDA of $166
million
- Free Cash Flow of $50 million, a
$167 million improvement from prior
year
- On July 29th, the
company's board of directors approved a Q3 dividend of $0.25 per share, consistent with the prior
quarter
Update on COVID-19 Response Plan
- All Chemours sites remain operational
- Maintaining health and safety measures across our sites
- On target to reduce FY 2020 costs by $160 million
- On target to reduce FY 2020 CAPEX by ~$125 million, from approx. $400 million to approx. $275 million
- Preserving strong balance sheet, ample liquidity of
$1.4 billion with no near-term senior
debt maturities
"Our results in the second quarter reflect disciplined execution
of our cash generation strategy in spite of the significant impact
of COVID-19 on global demand," said Chemours President and CEO
Mark Vergnano. "We remain focused on
both our employees' safety and fully supporting our customers'
needs. At the same time, the team has reduced costs and
improved operating efficiency through this difficult period. These
efforts combined with our strong liquidity position give us
tremendous confidence that we will be in a strong position to
respond when market conditions improve."
Second quarter 2020 net sales were $1.1
billion in comparison to $1.4
billion in the prior-year second quarter. Results were
driven primarily by lower volume across all segments.
Second quarter net income was $24
million, resulting in EPS of $0.15. Adjusted Net Income was $30 million, resulting in Adjusted EPS of
$0.18, down $0.54 from the prior year, inclusive of a
$13 million charge related to our
Fayetteville facility. Adjusted EBITDA for the second quarter 2020
was $166 million in comparison to
$283 million in the previous year
second quarter, a result of lower volumes and prices, idle
production charges, lower fixed cost absorption and limited F-Gas
quota sales, partially offset by stronger operational performance
and lower cost, driven by FY2020 cost reduction plan in response to
COVID-19, on year-over-year basis.
Fluoroproducts
Fluoroproducts segment net sales in the second quarter were
$523 million in comparison to
$711 million in the prior year.
Volume and price declined 22 percent and 3 percent,
respectively, on a year-over-year basis. Lower volumes were
primarily driven by the impact of COVID-19 on global automotive
OEMs and industrial end-markets. Segment Adjusted EBITDA of
$97 million decreased 46 percent
versus the prior-year quarter, negatively impacted by higher costs
driven by idle production and minimal F-gas quota sales due to
illegal imports of HFC refrigerants into the EU. This was partially
offset by cost reductions across the business and improved
operational performance.
Chemical Solutions
Chemical Solutions segment net sales were $82 million, a 37 percent decrease versus the
prior-year second quarter. Volumes were down 16 percent
year-over-year primarily driven by COVID-19 related mine closures.
Portfolio was down 18 percent year-over-year primarily driven by
the Methylamines and Methylamides business divestiture in the
fourth quarter of 2019. Lower average prices were primarily driven
by regional customer mix. Adjusted EBITDA of $19 million was 19 percent higher in comparison
to the prior-year quarter, reflecting a 1100 bps improvement in
margins to 23 percent from 12 percent in the prior-year primarily
due to portfolio management actions and lower costs.
Titanium Technologies
Titanium Technologies segment net sales in the second quarter were
$488 million in comparison to
$567 million in the prior-year
quarter. Volumes were down 9 percent versus the prior-year second
quarter, a result of softer demand primarily in Europe, Latin
America and Asia.
North America was relatively flat,
as the DIY trends helped support the end-market demand in the
region. Global average selling prices were flat sequentially and
down 5 percent on a year-over-year basis. Segment Adjusted EBITDA
decreased by 26 percent to $94
million, in comparison to $127
million in last year's second quarter, negatively impacted
by fixed cost under-absorption.
Corporate and Other
Corporate and Other in the second quarter 2020 represented a
$44 million offset to Adjusted
EBITDA, versus a $40 million offset
in the prior-year quarter. This increase was attributable to higher
costs associated with environmental remediation matters partially
offset by reductions in compensation expense and lower external
spend.
Liquidity
As of June 30,
2020, consolidated gross debt was $4.4 billion. Debt, net of $1 billion cash, was $3.3
billion, resulting in a net leverage ratio of approximately
3.7 times on a trailing twelve-month Adjusted EBITDA basis.
Total liquidity was $1.4 billion,
comprised of $1 billion of cash and
$399 million of revolver
capacity.
Cash provided by operating activities for the second quarter of
2020 was $111 million, up
$104 million from $7 million in the prior-year quarter. Capital
expenditures for the second quarter 2020 were $61 million, versus $124
million in last year's second quarter. Free Cash Flow for
the second quarter 2020 was a $50
million inflow versus the prior-year quarter of a
$117 million outflow, an improvement
of $167 million.
Outlook
Vergnano concluded: "The first half of 2020 has been one of the
most difficult periods in our short history. I am proud of the way
Chemours has responded and our ability to focus and execute through
these uncertain times. The outlook for the second half, while
improving, remains unclear. Looking ahead, as we navigate
this uncertain time, we remain focused on the execution of our
short-term response plan and long-term strategy. The Chemours Team
will continue to work in strong partnership with our customers to
deliver the full potential of our value proposition, because we win
only if our customers win."
Conference Call
As previously announced, Chemours will hold a conference call and
webcast on Friday, July 31, 2020 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) 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 general
industrial manufacturing. Our flagship products include prominent
brands such as Teflon™, Ti-Pure™, Krytox™, Viton™, Opteon™, Freon™
and Nafion™. In 2019, Chemours was named to Newsweek's list of
America's Most Responsible Companies. The company has approximately
7,000 employees and 30 manufacturing sites serving approximately
3,700 customers in over 120 countries. Chemours is headquartered in
Wilmington, Delaware and is listed
on the NYSE under the symbol CC.
For more information, we invite you to
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
reductions or 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, 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. In addition, the current
COVID-19 pandemic has significantly impacted the national and
global economy and commodity and financial markets. The full extent
and impact of the pandemic is unknown and to date has included
extreme volatility in financial and commodity markets, a
significant slowdown in economic activity, and increased
predictions of a global recession. The public and private sector
response has led to significant restrictions on travel, temporary
business closures, quarantines, stock market volatility, and a
general reduction in consumer and commercial activity globally.
Matters outside our control have affected our business and
operations and may or may continue to limit travel of employees to
our business units domestically and internationally, adversely
affect the health and welfare of our personnel, significantly
reduce the demand for our products, hinder our ability to provide
goods and services to customers, cause disruptions in our supply
chains, adversely affect our business partners or cause other
unpredictable events. 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 Quarterly Report on Form 10-Q for the
quarter ended June 30, 2020 and in
our Annual Report on Form 10-K for the year ended December 31, 2019. 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
Alvenia
Scarborough
Sr. Director of Corporate Communications and Brand Marketing
+1.302.773.4507
media@chemours.com
The Chemours
Company
|
Interim
Consolidated Statements of Operations (Unaudited)
|
(Dollars in
millions, except per share amounts)
|
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
Net sales
|
$
|
1,093
|
|
|
$
|
1,408
|
|
|
$
|
2,398
|
|
|
$
|
2,784
|
|
Cost of goods
sold
|
|
894
|
|
|
|
1,085
|
|
|
|
1,901
|
|
|
|
2,165
|
|
Gross
profit
|
|
199
|
|
|
|
323
|
|
|
|
497
|
|
|
|
619
|
|
Selling, general, and
administrative expense
|
|
110
|
|
|
|
136
|
|
|
|
235
|
|
|
|
292
|
|
Research and
development expense
|
|
20
|
|
|
|
19
|
|
|
|
44
|
|
|
|
41
|
|
Restructuring,
asset-related, and other charges
|
|
17
|
|
|
|
7
|
|
|
|
28
|
|
|
|
15
|
|
Total other operating
expenses
|
|
147
|
|
|
|
162
|
|
|
|
307
|
|
|
|
348
|
|
Equity in earnings of
affiliates
|
|
7
|
|
|
|
8
|
|
|
|
14
|
|
|
|
16
|
|
Interest expense,
net
|
|
(53)
|
|
|
|
(52)
|
|
|
|
(107)
|
|
|
|
(103)
|
|
Other income
(expense), net
|
|
14
|
|
|
|
16
|
|
|
|
(1)
|
|
|
|
55
|
|
Income before
income taxes
|
|
20
|
|
|
|
133
|
|
|
|
96
|
|
|
|
239
|
|
(Benefit from)
provision for income taxes
|
|
(4)
|
|
|
|
37
|
|
|
|
(28)
|
|
|
|
50
|
|
Net
income
|
|
24
|
|
|
|
96
|
|
|
|
124
|
|
|
|
189
|
|
Net income
attributable to Chemours
|
$
|
24
|
|
|
$
|
96
|
|
|
$
|
124
|
|
|
$
|
189
|
|
Per share
data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share of common stock
|
$
|
0.15
|
|
|
$
|
0.58
|
|
|
$
|
0.75
|
|
|
$
|
1.14
|
|
Diluted earnings per
share of common stock
|
|
0.15
|
|
|
|
0.57
|
|
|
|
0.75
|
|
|
|
1.12
|
|
The Chemours
Company
|
Interim
Consolidated Balance Sheets (Unaudited)
|
(Dollars in
millions, except per share amounts)
|
|
|
June 30,
2020
|
|
|
December 31,
2019
|
|
Assets
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
1,031
|
|
|
$
|
943
|
|
Accounts and notes
receivable, net
|
|
540
|
|
|
|
674
|
|
Inventories
|
|
1,074
|
|
|
|
1,079
|
|
Prepaid expenses and
other
|
|
72
|
|
|
|
81
|
|
Total current
assets
|
|
2,717
|
|
|
|
2,777
|
|
Property, plant, and
equipment
|
|
9,296
|
|
|
|
9,413
|
|
Less: Accumulated
depreciation
|
|
(5,873)
|
|
|
|
(5,854)
|
|
Property, plant, and
equipment, net
|
|
3,423
|
|
|
|
3,559
|
|
Operating lease
right-of-use assets
|
|
273
|
|
|
|
294
|
|
Goodwill and other
intangible assets, net
|
|
171
|
|
|
|
174
|
|
Investments in
affiliates
|
|
175
|
|
|
|
162
|
|
Other
assets
|
|
275
|
|
|
|
292
|
|
Total
assets
|
$
|
7,034
|
|
|
$
|
7,258
|
|
Liabilities
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts
payable
|
$
|
651
|
|
|
$
|
923
|
|
Short-term and current
maturities of long-term debt
|
|
19
|
|
|
|
134
|
|
Other accrued
liabilities
|
|
486
|
|
|
|
484
|
|
Total current
liabilities
|
|
1,156
|
|
|
|
1,541
|
|
Long-term debt,
net
|
|
4,327
|
|
|
|
4,026
|
|
Operating lease
liabilities
|
|
224
|
|
|
|
245
|
|
Deferred income
taxes
|
|
58
|
|
|
|
118
|
|
Other
liabilities
|
|
610
|
|
|
|
633
|
|
Total
liabilities
|
|
6,375
|
|
|
|
6,563
|
|
Commitments and
contingent liabilities
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
Common stock (par
value $0.01 per share; 810,000,000 shares authorized;
189,551,590 shares issued and 164,232,355
shares outstanding at
June 30, 2020; 188,893,478 shares issued
and 163,574,243 shares outstanding at
December 31, 2019)
|
|
2
|
|
|
|
2
|
|
Treasury stock, at
cost (25,319,235 shares at June 30, 2020
and December 31, 2019)
|
|
(1,072)
|
|
|
|
(1,072)
|
|
Additional paid-in
capital
|
|
872
|
|
|
|
859
|
|
Retained
earnings
|
|
1,290
|
|
|
|
1,249
|
|
Accumulated other
comprehensive loss
|
|
(435)
|
|
|
|
(349)
|
|
Total Chemours
stockholders' equity
|
|
657
|
|
|
|
689
|
|
Non-controlling
interests
|
|
2
|
|
|
|
6
|
|
Total
equity
|
|
659
|
|
|
|
695
|
|
Total liabilities
and equity
|
$
|
7,034
|
|
|
$
|
7,258
|
|
The Chemours
Company
|
Interim
Consolidated Statements of Cash Flows (Unaudited)
|
(Dollars in
millions)
|
|
|
Six Months Ended
June 30,
|
|
|
2020
|
|
|
2019
|
|
Cash flows from
operating activities
|
|
|
|
|
|
|
|
Net income
|
$
|
124
|
|
|
$
|
189
|
|
Adjustments to
reconcile net income to cash provided by (used for) operating
activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
160
|
|
|
|
154
|
|
Gain on sales of
assets and businesses
|
|
—
|
|
|
|
(3)
|
|
Equity in earnings of
affiliates, net
|
|
(11)
|
|
|
|
(15)
|
|
Amortization of debt
issuance costs and issue discounts
|
|
5
|
|
|
|
5
|
|
Deferred tax (benefit)
provision
|
|
(70)
|
|
|
|
2
|
|
Asset-related
charges
|
|
11
|
|
|
|
—
|
|
Stock-based
compensation expense
|
|
9
|
|
|
|
14
|
|
Net periodic pension
cost
|
|
6
|
|
|
|
1
|
|
Defined benefit plan
contributions
|
|
(14)
|
|
|
|
(13)
|
|
Other operating
charges and credits, net
|
|
(3)
|
|
|
|
1
|
|
Decrease (increase) in
operating assets:
|
|
|
|
|
|
|
|
Accounts and notes
receivable, net
|
|
128
|
|
|
|
(16)
|
|
Inventories and other
operating assets
|
|
33
|
|
|
|
(70)
|
|
(Decrease) increase in
operating liabilities:
|
|
|
|
|
|
|
|
Accounts payable and
other operating liabilities
|
|
(223)
|
|
|
|
(287)
|
|
Cash provided by (used
for) operating activities
|
|
155
|
|
|
|
(38)
|
|
Cash flows from
investing activities
|
|
|
|
|
|
|
|
Purchases of
property, plant, and equipment
|
|
(167)
|
|
|
|
(257)
|
|
Proceeds from sales
of assets and businesses, net
|
|
—
|
|
|
|
1
|
|
Foreign exchange
contract settlements, net
|
|
4
|
|
|
|
—
|
|
Cash used for
investing activities
|
|
(163)
|
|
|
|
(256)
|
|
Cash flows from
financing activities
|
|
|
|
|
|
|
|
Proceeds from
accounts receivable securitization facility
|
|
12
|
|
|
|
—
|
|
Proceeds from
revolving loan
|
|
300
|
|
|
|
150
|
|
Debt
repayments
|
|
(134)
|
|
|
|
(6)
|
|
Payments on finance
leases
|
|
(3)
|
|
|
|
—
|
|
Purchases of treasury
stock, at cost
|
|
—
|
|
|
|
(322)
|
|
Proceeds from
exercised stock options, net
|
|
5
|
|
|
|
8
|
|
Payments related to
tax withholdings on vested stock awards
|
|
(2)
|
|
|
|
(30)
|
|
Payments of dividends
to the Company's common shareholders
|
|
(82)
|
|
|
|
(83)
|
|
Distributions to
non-controlling interest shareholders
|
|
(4)
|
|
|
|
—
|
|
Cash provided by (used
for) financing activities
|
|
92
|
|
|
|
(283)
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
4
|
|
|
|
6
|
|
Increase
(decrease) in cash and cash equivalents
|
|
88
|
|
|
|
(571)
|
|
Cash and cash
equivalents at January 1,
|
|
943
|
|
|
|
1,201
|
|
Cash and cash
equivalents at June 30,
|
$
|
1,031
|
|
|
$
|
630
|
|
|
|
|
|
|
|
|
|
Supplemental cash
flows information
|
|
|
|
|
|
|
|
Non-cash investing
and financing activities:
|
|
|
|
|
|
|
|
Changes in property,
plant, and equipment included in accounts payable
|
$
|
25
|
|
|
$
|
(25)
|
|
Obligations incurred
under build-to-suit lease arrangement
|
|
—
|
|
|
|
30
|
|
The Chemours
Company
|
Segment Financial
and Operating Data (Unaudited)
|
(Dollars in
millions)
|
|
Segment Net
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ended
|
|
|
Sequential
|
|
|
Three Months Ended
June 30,
|
|
|
Increase
/
|
|
|
March
31,
|
|
|
Increase
/
|
|
|
2020
|
|
|
2019
|
|
|
(Decrease)
|
|
|
2020
|
|
|
(Decrease)
|
|
Fluoroproducts
|
$
|
|
523
|
|
|
$
|
|
711
|
|
|
$
|
|
(188)
|
|
|
$
|
|
600
|
|
|
$
|
|
(77)
|
|
Chemical
Solutions
|
|
|
82
|
|
|
|
|
130
|
|
|
|
|
(48)
|
|
|
|
|
92
|
|
|
|
|
(10)
|
|
Titanium
Technologies
|
|
|
488
|
|
|
|
|
567
|
|
|
|
|
(79)
|
|
|
|
|
613
|
|
|
|
|
(125)
|
|
Total Net
Sales
|
$
|
|
1,093
|
|
|
$
|
|
1,408
|
|
|
$
|
|
(315)
|
|
|
$
|
|
1,305
|
|
|
$
|
|
(212)
|
|
Segment Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ended
|
|
|
Sequential
|
|
|
Three Months Ended
June 30,
|
|
|
Increase
/
|
|
|
March
31,
|
|
|
Increase
/
|
|
|
2020
|
|
|
2019
|
|
|
(Decrease)
|
|
|
2020
|
|
|
(Decrease)
|
|
Fluoroproducts
|
$
|
|
97
|
|
|
$
|
|
180
|
|
|
$
|
|
(83)
|
|
|
$
|
|
140
|
|
|
$
|
|
(43)
|
|
Chemical
Solutions
|
|
|
19
|
|
|
|
|
16
|
|
|
|
|
3
|
|
|
|
|
15
|
|
|
|
|
4
|
|
Titanium
Technologies
|
|
|
94
|
|
|
|
|
127
|
|
|
|
|
(33)
|
|
|
|
|
138
|
|
|
|
|
(44)
|
|
Corporate and
Other
|
|
|
(44)
|
|
|
|
|
(40)
|
|
|
|
|
(4)
|
|
|
|
|
(36)
|
|
|
|
|
(8)
|
|
Total Adjusted
EBITDA
|
$
|
|
166
|
|
|
$
|
|
283
|
|
|
$
|
|
(117)
|
|
|
$
|
|
257
|
|
|
$
|
|
(91)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
Margin
|
15%
|
|
|
20%
|
|
|
|
|
|
20%
|
|
|
|
|
Quarterly Change
in Net Sales from the three months ended June 30,
2019
|
|
|
June 30,
2020
|
Percentage Change
vs.
|
|
Percentage Change
Due To
|
|
|
Net
Sales
|
|
|
June 30,
2019
|
|
Price
|
|
Volume
|
|
Currency
|
|
Portfolio
|
|
Total
Company
|
$
|
|
1,093
|
|
|
|
(22)
|
%
|
|
(4)
|
%
|
|
(16)
|
%
|
|
—
|
%
|
|
(2)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fluoroproducts
|
$
|
|
523
|
|
|
|
(26)
|
%
|
|
(3)
|
%
|
|
(22)
|
%
|
|
(1)
|
%
|
|
—
|
%
|
Chemical
Solutions
|
|
|
82
|
|
|
|
(37)
|
%
|
|
(3)
|
%
|
|
(16)
|
%
|
|
—
|
%
|
|
(18)
|
%
|
Titanium
Technologies
|
|
|
488
|
|
|
|
(14)
|
%
|
|
(5)
|
%
|
|
(9)
|
%
|
|
—
|
%
|
|
—
|
%
|
Quarterly Change
in Net Sales from the three months ended March 31,
2020
|
|
|
June 30,
2020
|
Percentage Change
vs.
|
|
Percentage Change
Due To
|
|
|
Net
Sales
|
|
|
March 31,
2020
|
|
Price
|
|
Volume
|
|
Currency
|
|
Portfolio
|
|
Total
Company
|
$
|
|
1,093
|
|
|
|
(16)
|
%
|
|
(1)
|
%
|
|
(15)
|
%
|
|
—
|
%
|
|
—
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fluoroproducts
|
$
|
|
523
|
|
|
|
(13)
|
%
|
|
—
|
%
|
|
(12)
|
%
|
|
(1)
|
%
|
|
—
|
%
|
Chemical
Solutions
|
|
|
82
|
|
|
|
(11)
|
%
|
|
(7)
|
%
|
|
(4)
|
%
|
|
—
|
%
|
|
—
|
%
|
Titanium
Technologies
|
|
|
488
|
|
|
|
(20)
|
%
|
|
—
|
%
|
|
(20)
|
%
|
|
—
|
%
|
|
—
|
%
|
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 represents 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; (gains) losses on sales of businesses 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,
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2020
|
|
|
2019
|
|
Net income
attributable to Chemours
|
$
|
|
24
|
|
|
$
|
96
|
|
|
$
|
|
100
|
|
|
$
|
|
124
|
|
|
$
|
|
189
|
|
Non-operating pension
and other post-retirement employee benefit income
|
|
|
(1)
|
|
|
|
|
(3)
|
|
|
|
|
—
|
|
|
|
|
(1)
|
|
|
|
|
(6)
|
|
Exchange (gains)
losses, net
|
|
|
(6)
|
|
|
|
|
9
|
|
|
|
|
24
|
|
|
|
|
19
|
|
|
|
|
3
|
|
Restructuring,
asset-related, and other charges
|
|
|
17
|
|
|
|
|
7
|
|
|
|
|
11
|
|
|
|
|
28
|
|
|
|
|
15
|
|
Gain on sales of
assets and businesses
|
|
|
—
|
|
|
|
|
(2)
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(2)
|
|
Transaction
costs
|
|
|
—
|
|
|
|
|
1
|
|
|
|
|
2
|
|
|
|
|
2
|
|
|
|
|
1
|
|
Legal and
environmental charges (1)
|
|
|
1
|
|
|
|
|
8
|
|
|
|
|
10
|
|
|
|
|
12
|
|
|
|
|
38
|
|
Adjustments made to
income taxes (2)
|
|
|
(2)
|
|
|
|
|
7
|
|
|
|
|
(19)
|
|
|
|
|
(22)
|
|
|
|
|
1
|
|
Benefit from income
taxes relating to reconciling items (3)
|
|
|
(3)
|
|
|
|
|
(3)
|
|
|
|
|
(10)
|
|
|
|
|
(13)
|
|
|
|
|
(11)
|
|
Adjusted Net
Income (4)
|
|
|
30
|
|
|
|
|
120
|
|
|
|
|
118
|
|
|
|
|
149
|
|
|
|
|
228
|
|
Interest expense,
net
|
|
|
53
|
|
|
|
|
52
|
|
|
|
|
54
|
|
|
|
|
107
|
|
|
|
|
103
|
|
Depreciation and
amortization
|
|
|
82
|
|
|
|
|
78
|
|
|
|
|
79
|
|
|
|
|
160
|
|
|
|
|
154
|
|
All remaining
provision for income taxes (4)
|
|
|
1
|
|
|
|
|
33
|
|
|
|
|
6
|
|
|
|
|
7
|
|
|
|
|
60
|
|
Adjusted
EBITDA
|
$
|
|
166
|
|
|
$
|
|
283
|
|
|
$
|
|
257
|
|
|
$
|
|
423
|
|
|
$
|
|
545
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted effective
tax rate (4)
|
|
|
3
|
%
|
|
|
|
22
|
%
|
|
|
|
5
|
%
|
|
|
|
4
|
%
|
|
|
|
21
|
%
|
|
|
(1)
|
Legal charges
pertains to litigation settlements, PFOA drinking water treatment
accruals, and other legal charges. Environmental charges pertains
to management's assessment of estimated liabilities associated with
on-site remediation, off-site groundwater remediation, and toxicity
studies related to Fayetteville. The six months ended June 30, 2020
includes $8 based on the aforementioned assessment associated with
certain estimated liabilities at Fayetteville. The three and six
months ended June 30, 2019 includes $7 and $34, respectively, for
the approved final Consent Order associated with certain matters at
Fayetteville. See "Note 16 – Commitments and Contingent
Liabilities" to the Interim Consolidated Financial
Statements in our Quarterly Report on Form 10-Q for the quarter
ended June 30, 2020 for further details.
|
(2)
|
Includes the removal
of certain discrete income tax impacts within our provision for
income taxes, such as shortfalls and windfalls on our share-based
payments, historical valuation allowance adjustments, unrealized
gains and losses on foreign exchange rate changes, and other
discrete income tax items.
|
(3)
|
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.
|
(4)
|
Adjusted effective
tax rate is defined as all remaining provision for income taxes
divided by pre-tax Adjusted Net Income.
|
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,
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2020
|
|
|
2019
|
|
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Chemours
|
$
|
|
24
|
|
|
$
|
|
96
|
|
|
$
|
|
100
|
|
|
$
|
|
124
|
|
|
$
|
|
189
|
|
Adjusted Net
Income
|
|
|
30
|
|
|
|
|
120
|
|
|
|
|
118
|
|
|
|
|
149
|
|
|
|
|
228
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of common shares outstanding - basic
|
|
|
164,648,103
|
|
|
|
|
164,118,816
|
|
|
|
|
164,247,449
|
|
|
|
|
164,448,226
|
|
|
|
|
165,982,289
|
|
Dilutive effect of the
Company's employee compensation plans
|
|
|
765,838
|
|
|
|
|
2,822,810
|
|
|
|
|
1,010,542
|
|
|
|
|
888,190
|
|
|
|
|
3,508,621
|
|
Weighted-average
number of common shares outstanding - diluted
|
|
|
165,413,941
|
|
|
|
|
166,941,626
|
|
|
|
|
165,257,991
|
|
|
|
|
165,336,416
|
|
|
|
|
169,490,910
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share of common stock
|
$
|
|
0.15
|
|
|
$
|
|
0.58
|
|
|
$
|
|
0.61
|
|
|
$
|
|
0.75
|
|
|
$
|
|
1.14
|
|
Diluted earnings per
share of common stock
|
|
|
0.15
|
|
|
|
|
0.57
|
|
|
|
|
0.61
|
|
|
|
|
0.75
|
|
|
|
|
1.12
|
|
Adjusted basic
earnings per share of common stock
|
|
|
0.18
|
|
|
|
|
0.73
|
|
|
|
|
0.72
|
|
|
|
|
0.91
|
|
|
|
|
1.38
|
|
Adjusted diluted
earnings per share of common stock
|
|
|
0.18
|
|
|
|
|
0.72
|
|
|
|
|
0.71
|
|
|
|
|
0.90
|
|
|
|
|
1.35
|
|
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 flows 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,
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2020
|
|
|
2019
|
|
Cash provided by
(used for) operating activities
|
$
|
|
111
|
|
|
$
|
|
7
|
|
|
$
|
|
44
|
|
|
$
|
|
155
|
|
|
$
|
|
(38)
|
|
Less: Purchases of
property, plant, and equipment
|
|
|
(61)
|
|
|
|
|
(124)
|
|
|
|
|
(106)
|
|
|
|
|
(167)
|
|
|
|
|
(257)
|
|
Free Cash
Flows
|
$
|
|
50
|
|
|
$
|
|
(117)
|
|
|
$
|
|
(62)
|
|
|
$
|
|
(12)
|
|
|
$
|
|
(295)
|
|
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.
|
|
Twelve Months
Ended June 30,
|
|
|
|
2020
|
|
|
2019
|
|
Adjusted EBITDA
(1)
|
|
$
|
898
|
|
|
$
|
1,321
|
|
Less: Depreciation
and amortization (1)
|
|
|
(315)
|
|
|
|
(296)
|
|
Adjusted
EBIT
|
|
$
|
583
|
|
|
$
|
1,025
|
|
|
|
|
|
|
|
|
|
|
|
|
As of June
30,
|
|
|
|
2020
|
|
|
2019
|
|
Total debt
|
|
$
|
4,346
|
|
|
$
|
4,208
|
|
Total
equity
|
|
|
659
|
|
|
|
829
|
|
Less: Cash and cash
equivalents
|
|
|
(1,031)
|
|
|
|
(630)
|
|
Invested capital,
net
|
|
$
|
3,974
|
|
|
$
|
4,407
|
|
Average invested
capital (2)
|
|
$
|
4,116
|
|
|
$
|
3,989
|
|
|
|
|
|
|
|
|
|
|
Return on Invested
Capital
|
|
|
14
|
%
|
|
|
26
|
%
|
|
|
(1)
|
Reconciliations of
Adjusted EBITDA to net income 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.
|
(2)
|
Average invested
capital is based on a five-quarter trailing average of invested
capital, net.
|
View original
content:http://www.prnewswire.com/news-releases/the-chemours-company-reports-second-quarter-2020-results-301103181.html
SOURCE The Chemours Company