WILMINGTON, Del., Nov. 3, 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 third
quarter 2020.
Third Quarter 2020 Results & Highlights
- Net Sales of $1.2 billion
- Net Income of $76 million, with
EPS of $0.46
- Adjusted Net Income of $78
million, with Adjusted EPS of $0.47
- Adjusted EBITDA of $210
million
- Free Cash Flow of $252 million, a
$92 million improvement from prior
year
- Repaid the $300 million
outstanding revolving credit facility balance
- On October 28, 2020, the
company's Board of Directors approved a Q4 dividend of $0.25 per share, consistent with the prior
quarter
- Advanced our Corporate Responsibility Commitments (CRC) with
publication of our third CRC report
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 approx. $125 million, from approx. $400 million to approx. $275 million
- Preserving strong balance sheet, ample liquidity of
$1.7 billion with no near-term senior
debt maturities
"Our results in the third quarter demonstrate the progress we
have made in executing our business plan and the steady recovery of
the auto, architectural coatings and construction markets", said
Chemours President and CEO Mark
Vergnano. "Despite the COVID-19 headwinds, we continue to
deliver on our cash generation strategy which supports our strong
balance sheet and liquidity position. We also released our third
annual CRC Report – renewing our commitment to leading the industry
and our peers on a broad spectrum of ESG targets. This
document remains foundational for the company, and a key component
of our long-term strategy."
Third quarter 2020 net sales were $1.2
billion in comparison to $1.4
billion in the prior-year third quarter. Results were driven
by lower volumes in Fluoroproducts and Chemical Solutions and lower
global average prices, partially offset by higher volumes in
Titanium Technologies. Third quarter net income was
$76 million, resulting in EPS of
$0.46, equal to the prior year.
Adjusted Net Income was $78 million,
resulting in Adjusted EPS of $0.47,
down $0.12 from the prior year,
inclusive of a $10 million charge
related to our Fayetteville facility. Adjusted EBITDA for the third
quarter 2020 was $210 million in
comparison to $248 million in the
previous year third quarter, a result of lower volumes and prices,
partially offset by stronger operational performance and lower cost
on a year-over-year basis.
Fluoroproducts
Fluoroproducts segment net sales in the
third quarter were $533 million in
comparison to $636 million in the
prior year. Volume and price declined 11 percent and 5
percent, respectively, on a year-over-year basis. Volumes
declined primarily due to demand weakness in fluoropolymer
products, partially offset by nascent signs of market recovery led
by increased customer demand for refrigerants, particularly in the
automotive sector as original equipment manufacturers (OEMs)
continued to improve production following shutdowns in the first
and second quarters of 2020. Segment Adjusted EBITDA of
$112 million decreased 8 percent
versus the prior-year quarter, primarily due to lower net sales
partially offset by better operational performance and cost
reduction actions. Fluoroproducts segment net sales and Adjusted
EBITDA in the third quarter were up 2 percent and 15 percent,
respectively, on a sequential basis, primarily driven by early
stages of recovery with sequential demand improvement and relative
strength of demand from automotive OEMs.
Chemical Solutions
Chemical Solutions segment net
sales were $88 million, a 37 percent
decrease versus the prior-year third quarter. Prices and volumes
were negatively impacted primarily by mine closures in Latin America, related to COVID-19. The
divesture of our Methylamines and Methylamides business in the
fourth quarter of 2019 resulted in a 19% negative impact on a
year-over-year basis. Adjusted EBITDA was $12 million in comparison to $23 million the prior-year quarter, driven by
lower volumes and lower licensing income.
Titanium Technologies
Titanium Technologies segment
net sales in the third quarter were $612
million in comparison to $614
million in the prior-year quarter. Volumes were up 4 percent
versus the prior-year third quarter, a result of demand recovery in
the architectural coatings, laminates and plastics markets. Global
average selling prices were down 5 percent on a year-over-year
basis. Segment Adjusted EBITDA decreased by 6 percent to
$129 million, in comparison to
$137 million in last year's third
quarter. Titanium Technologies segment net sales increased 25
percent on a sequential basis, with Adjusted EBITDA up 37 percent
on a sequential basis. Sequential strength in volume was driven by
early signs of demand recovery across most geographic regions and
end-markets.
Corporate and Other
Corporate and Other in the third
quarter 2020 represented a $43
million offset to Adjusted EBITDA, versus a $34 million offset in the prior-year quarter.
This increase was attributable to higher costs associated with
environmental remediation matters partially offset by lower
external spend.
Liquidity
As of September 30,
2020, consolidated gross debt was $4.1 billion. Debt, net of $956 million cash, was $3.2 billion, resulting in a net leverage ratio
of approximately 3.7 times on a trailing twelve-month Adjusted
EBITDA basis. Total liquidity was $1.7
billion, comprised of $956
million of cash and $702
million of revolving credit facility capacity.
Cash provided by operating activities for the third quarter of
2020 was $299 million, up
$11 million from $288 million in the prior-year quarter. Capital
expenditures for the third quarter 2020 were $47 million, versus $128
million in last year's third quarter. Free Cash Flow for the
third quarter 2020 was a $252 million
inflow versus the prior-year quarter of $160
million, an improvement of $92
million.
As previously announced, the company repaid the $300 million outstanding balance on its revolving
credit facility during the quarter.
Outlook
Mr. Vergnano concluded: "I am proud of the
resilience our business has shown over the first three quarters of
2020. Our results are a testament to the hard work of the
people of Chemours, our dedication to the success of our customers,
and our ability to execute in the face of uncertainty.
Looking ahead, I am confident that we are well positioned to create
sustained value through the economic recovery and remain committed
to achieving our full potential as Chemours."
Conference Call
As previously announced, Chemours will
hold a conference call and webcast on Wednesday, November 4, 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 September 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.
|
The Chemours
Company
Interim Consolidated Statements of Operations (Unaudited)
(Dollars in millions, except per share amounts)
|
|
|
|
Three Months Ended
September 30,
|
|
|
Nine Months Ended
September 30,
|
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
|
Net sales
|
|
$
|
1,233
|
|
|
$
|
1,390
|
|
|
$
|
3,631
|
|
|
$
|
4,173
|
|
|
Cost of goods
sold
|
|
|
976
|
|
|
|
1,096
|
|
|
|
2,877
|
|
|
|
3,260
|
|
|
Gross
profit
|
|
|
257
|
|
|
|
294
|
|
|
|
754
|
|
|
|
913
|
|
|
Selling, general, and
administrative expense
|
|
|
112
|
|
|
|
130
|
|
|
|
347
|
|
|
|
423
|
|
|
Research and
development expense
|
|
|
22
|
|
|
|
20
|
|
|
|
67
|
|
|
|
61
|
|
|
Restructuring,
asset-related, and other charges
|
|
|
9
|
|
|
|
34
|
|
|
|
37
|
|
|
|
49
|
|
|
Total other operating
expenses
|
|
|
143
|
|
|
|
184
|
|
|
|
451
|
|
|
|
533
|
|
|
Equity in earnings of
affiliates
|
|
|
4
|
|
|
|
9
|
|
|
|
19
|
|
|
|
25
|
|
|
Interest expense,
net
|
|
|
(53)
|
|
|
|
(53)
|
|
|
|
(160)
|
|
|
|
(156)
|
|
|
Other (expense)
income, net
|
|
|
(5)
|
|
|
|
25
|
|
|
|
(6)
|
|
|
|
81
|
|
|
Income before
income taxes
|
|
|
60
|
|
|
|
91
|
|
|
|
156
|
|
|
|
330
|
|
|
(Benefit from)
provision for income taxes
|
|
|
(16)
|
|
|
|
15
|
|
|
|
(44)
|
|
|
|
65
|
|
|
Net
income
|
|
|
76
|
|
|
|
76
|
|
|
|
200
|
|
|
|
265
|
|
|
Net income
attributable to Chemours
|
|
$
|
76
|
|
|
$
|
76
|
|
|
$
|
200
|
|
|
$
|
265
|
|
|
Per share
data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share of common stock
|
|
$
|
0.46
|
|
|
$
|
0.46
|
|
|
$
|
1.22
|
|
|
$
|
1.60
|
|
|
Diluted earnings per
share of common stock
|
|
|
0.46
|
|
|
|
0.46
|
|
|
|
1.21
|
|
|
|
1.58
|
|
|
The Chemours
Company
Interim Consolidated Balance Sheets (Unaudited)
(Dollars
in millions, except per share amounts)
|
|
|
|
September 30,
2020
|
|
|
December 31,
2019
|
|
Assets
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
956
|
|
|
$
|
943
|
|
Accounts and notes
receivable, net
|
|
|
572
|
|
|
|
674
|
|
Inventories
|
|
|
993
|
|
|
|
1,079
|
|
Prepaid expenses and
other
|
|
|
84
|
|
|
|
81
|
|
Total current
assets
|
|
|
2,605
|
|
|
|
2,777
|
|
Property, plant, and
equipment
|
|
|
9,391
|
|
|
|
9,413
|
|
Less: Accumulated
depreciation
|
|
|
(5,973)
|
|
|
|
(5,854
|
|
Property, plant, and
equipment, net
|
|
|
3,418
|
|
|
|
3,559
|
|
Operating lease
right-of-use assets
|
|
|
264
|
|
|
|
294
|
|
Goodwill and other
intangible assets, net
|
|
|
169
|
|
|
|
174
|
|
Investments in
affiliates
|
|
|
182
|
|
|
|
162
|
|
Other
assets
|
|
|
310
|
|
|
|
292
|
|
Total
assets
|
|
$
|
6,948
|
|
|
$
|
7,258
|
|
Liabilities
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
701
|
|
|
$
|
923
|
|
Short-term and current
maturities of long-term debt
|
|
|
32
|
|
|
|
134
|
|
Other accrued
liabilities
|
|
|
575
|
|
|
|
484
|
|
Total current
liabilities
|
|
|
1,308
|
|
|
|
1,541
|
|
Long-term debt,
net
|
|
|
4,063
|
|
|
|
4,026
|
|
Operating lease
liabilities
|
|
|
213
|
|
|
|
245
|
|
Deferred income
taxes
|
|
|
34
|
|
|
|
118
|
|
Other
liabilities
|
|
|
596
|
|
|
|
633
|
|
Total
liabilities
|
|
|
6,214
|
|
|
|
6,563
|
|
Commitments and
contingent liabilities
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
Common stock (par
value $0.01 per share; 810,000,000 shares authorized;
189,772,210 shares
issued and 164,452,975 shares outstanding at
September 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 September 30, 2020 and December 31,
2019)
|
|
|
(1,072)
|
|
|
|
(1,072
|
|
Additional paid-in
capital
|
|
|
879
|
|
|
|
859
|
|
Retained
earnings
|
|
|
1,325
|
|
|
|
1,249
|
|
Accumulated other
comprehensive loss
|
|
|
(402)
|
|
|
|
(349
|
|
Total Chemours
stockholders' equity
|
|
|
732
|
|
|
|
689
|
|
Non-controlling
interests
|
|
|
2
|
|
|
|
6
|
|
Total
equity
|
|
|
734
|
|
|
|
695
|
|
Total liabilities
and equity
|
|
$
|
6,948
|
|
|
$
|
7,258
|
|
The Chemours
Company
Interim Consolidated Statements of Cash Flows (Unaudited)
(Dollars in millions)
|
|
|
|
Nine Months Ended
September 30,
|
|
|
|
2020
|
|
|
2019
|
|
|
Cash flows from
operating activities
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
200
|
|
|
$
|
265
|
|
|
Adjustments to
reconcile net income to cash provided by (used for) operating
activities:
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
240
|
|
|
|
232
|
|
|
Gain on sales of
assets and businesses
|
|
|
—
|
|
|
|
(11)
|
|
|
Equity in earnings of
affiliates, net
|
|
|
(16)
|
|
|
|
(24)
|
|
|
Amortization of debt
issuance costs and issue discounts
|
|
|
7
|
|
|
|
7
|
|
|
Deferred tax
benefit
|
|
|
(105)
|
|
|
|
(17)
|
|
|
Asset-related
charges
|
|
|
16
|
|
|
|
12
|
|
|
Stock-based
compensation expense
|
|
|
12
|
|
|
|
18
|
|
|
Net periodic pension
cost
|
|
|
9
|
|
|
|
4
|
|
|
Defined benefit plan
contributions
|
|
|
(17)
|
|
|
|
(15)
|
|
|
Other operating
charges and credits, net
|
|
|
(11)
|
|
|
|
(2)
|
|
|
Decrease (increase) in
operating assets:
|
|
|
|
|
|
|
|
|
|
Accounts and notes
receivable, net
|
|
|
97
|
|
|
|
32
|
|
|
Inventories and other
operating assets
|
|
|
111
|
|
|
|
(46)
|
|
|
(Decrease) increase in
operating liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts payable and
other operating liabilities
|
|
|
(89)
|
|
|
|
(205)
|
|
|
Cash provided by
operating activities
|
|
|
454
|
|
|
|
250
|
|
|
Cash flows from
investing activities
|
|
|
|
|
|
|
|
|
|
Purchases of
property, plant, and equipment
|
|
|
(214)
|
|
|
|
(385)
|
|
|
Acquisition of
business, net
|
|
|
(10)
|
|
|
|
(10)
|
|
|
Proceeds from sales
of assets and businesses, net
|
|
|
—
|
|
|
|
7
|
|
|
Proceeds from life
insurance policies
|
|
|
—
|
|
|
|
1
|
|
|
Foreign exchange
contract settlements, net
|
|
|
14
|
|
|
|
—
|
|
|
Cash used for
investing activities
|
|
|
(210)
|
|
|
|
(387)
|
|
|
Cash flows from
financing activities
|
|
|
|
|
|
|
|
|
|
Proceeds from
accounts receivable securitization facility
|
|
|
12
|
|
|
|
125
|
|
|
Proceeds from
revolving loan
|
|
|
300
|
|
|
|
150
|
|
|
Repayments on
revolving loan
|
|
|
(300)
|
|
|
|
(150)
|
|
|
Debt
repayments
|
|
|
(140)
|
|
|
|
(15)
|
|
|
Payments on finance
leases
|
|
|
(4)
|
|
|
|
(2)
|
|
|
Purchases of treasury
stock, at cost
|
|
|
—
|
|
|
|
(322)
|
|
|
Proceeds from
exercised stock options, net
|
|
|
9
|
|
|
|
8
|
|
|
Payments related to
tax withholdings on vested stock awards
|
|
|
(2)
|
|
|
|
(30)
|
|
|
Payments of dividends
to the Company's common shareholders
|
|
|
(123)
|
|
|
|
(124)
|
|
|
Distributions to
non-controlling interest shareholders
|
|
|
(4)
|
|
|
|
—
|
|
|
Cash used for
financing activities
|
|
|
(252)
|
|
|
|
(360)
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
|
21
|
|
|
|
(10)
|
|
|
Increase
(decrease) in cash and cash equivalents
|
|
|
13
|
|
|
|
(507)
|
|
|
Cash and cash
equivalents at January 1,
|
|
|
943
|
|
|
|
1,201
|
|
|
Cash and cash
equivalents at September 30,
|
|
$
|
956
|
|
|
$
|
694
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash
flows information
|
|
|
|
|
|
|
|
|
|
Non-cash investing
and financing activities:
|
|
|
|
|
|
|
|
|
|
Changes in property,
plant, and equipment included in accounts payable
|
|
$
|
25
|
|
|
$
|
68
|
|
|
Obligations incurred
under build-to-suit lease arrangement
|
|
|
—
|
|
|
|
35
|
|
|
Non-cash financing
arrangements
|
|
|
15
|
|
|
|
11
|
|
|
Deferred payments
related to acquisition of business
|
|
|
—
|
|
|
|
15
|
|
|
The Chemours
Company
Segment Financial and Operating Data (Unaudited)
(Dollars in millions)
|
|
|
Segment Net
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months
|
|
|
|
|
|
|
|
|
|
|
|
|
Ended
|
|
|
Sequential
|
|
Three Months Ended
September 30,
|
|
|
Increase
/
|
|
|
June
30,
|
|
|
Increase
/
|
|
2020
|
|
|
2019
|
|
|
(Decrease)
|
|
|
2020
|
|
|
(Decrease)
|
|
Fluoroproducts
|
$
|
|
533
|
|
|
$
|
|
636
|
|
|
$
|
|
(103)
|
|
|
$
|
|
523
|
|
|
$
|
|
10
|
|
Chemical
Solutions
|
|
|
88
|
|
|
|
|
140
|
|
|
|
|
(52)
|
|
|
|
|
82
|
|
|
|
|
6
|
|
Titanium
Technologies
|
|
|
612
|
|
|
|
|
614
|
|
|
|
|
(2)
|
|
|
|
|
488
|
|
|
|
|
124
|
|
Total Net
Sales
|
$
|
|
1,233
|
|
|
$
|
|
1,390
|
|
|
$
|
|
(157)
|
|
|
$
|
|
1,093
|
|
|
$
|
|
140
|
|
Segment Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ended
|
|
|
Sequential
|
|
|
Three Months Ended
September 30,
|
|
|
Increase
/
|
|
|
June
30,
|
|
|
Increase
/
|
|
|
2020
|
|
|
2019
|
|
|
(Decrease)
|
|
|
2020
|
|
|
(Decrease)
|
|
|
Fluoroproducts
|
$
|
|
112
|
|
|
$
|
|
122
|
|
|
$
|
|
(10)
|
|
|
$
|
|
97
|
|
|
$
|
|
15
|
|
|
Chemical
Solutions
|
|
|
12
|
|
|
|
|
23
|
|
|
|
|
(11)
|
|
|
|
|
19
|
|
|
|
|
(7)
|
|
|
Titanium
Technologies
|
|
|
129
|
|
|
|
|
137
|
|
|
|
|
(8)
|
|
|
|
|
94
|
|
|
|
|
35
|
|
|
Corporate and
Other
|
|
|
(43)
|
|
|
|
|
(34)
|
|
|
|
|
(9)
|
|
|
|
|
(44)
|
|
|
|
|
1
|
|
|
Total Adjusted
EBITDA
|
$
|
|
210
|
|
|
$
|
|
248
|
|
|
$
|
|
(38)
|
|
|
$
|
|
166
|
|
|
$
|
|
44
|
|
|
|
|
Adjusted EBITDA
Margin
|
17
|
%
|
|
18
|
%
|
|
|
|
|
15
|
%
|
|
|
|
|
Quarterly Change
in Net Sales from the three months ended September 30,
2019
|
|
|
September 30,
2020
|
|
|
Percentage Change
vs.
|
|
Percentage Change
Due To
|
|
|
Net
Sales
|
|
|
September 30,
2019
|
|
Price
|
|
Volume
|
|
Currency
|
|
Portfolio
|
|
|
Total
Company
|
$
|
|
1,233
|
|
|
|
(11)
|
%
|
|
(5)
|
%
|
|
(4)
|
%
|
|
—
|
%
|
|
(2)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fluoroproducts
|
$
|
|
533
|
|
|
|
(16)
|
%
|
|
(5)
|
%
|
|
(11)
|
%
|
|
—
|
%
|
|
—
|
%
|
|
Chemical
Solutions
|
|
|
88
|
|
|
|
(37)
|
%
|
|
(5)
|
%
|
|
(13)
|
%
|
|
—
|
%
|
|
(19)
|
%
|
|
Titanium
Technologies
|
|
|
612
|
|
|
|
—
|
%
|
|
(5)
|
%
|
|
4
|
%
|
|
1
|
%
|
|
—
|
%
|
|
Quarterly Change
in Net Sales from the three months ended June 30,
2020
|
|
|
September 30,
2020
|
|
|
Percentage Change
vs.
|
|
Percentage Change
Due To
|
|
|
Net
Sales
|
|
|
June 30,
2020
|
|
Price
|
|
Volume
|
|
Currency
|
|
Portfolio
|
|
|
Total
Company
|
$
|
|
1,233
|
|
|
|
13
|
%
|
|
(3)
|
%
|
|
15
|
%
|
|
1
|
%
|
|
—
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fluoroproducts
|
$
|
|
533
|
|
|
|
2
|
%
|
|
(3)
|
%
|
|
4
|
%
|
|
1
|
%
|
|
—
|
%
|
|
Chemical
Solutions
|
|
|
88
|
|
|
|
7
|
%
|
|
(13)
|
%
|
|
20
|
%
|
|
—
|
%
|
|
—
|
%
|
|
Titanium
Technologies
|
|
|
612
|
|
|
|
25
|
%
|
|
(2)
|
%
|
|
26
|
%
|
|
1
|
%
|
|
—
|
%
|
|
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
|
|
|
Nine Months
Ended
|
|
|
|
September
30,
|
|
|
June
30,
|
|
|
September
30,
|
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2020
|
|
|
2019
|
|
|
Net income
attributable to Chemours
|
|
$
|
|
76
|
|
|
$
|
76
|
|
|
$
|
|
24
|
|
|
$
|
|
200
|
|
|
$
|
|
265
|
|
|
Non-operating pension
and other post-retirement
employee benefit (income) cost
|
|
|
|
(1)
|
|
|
|
|
1
|
|
|
|
|
(1)
|
|
|
|
|
(2)
|
|
|
|
|
(5)
|
|
|
Exchange losses
(gains), net
|
|
|
|
9
|
|
|
|
|
(5)
|
|
|
|
|
(6)
|
|
|
|
|
28
|
|
|
|
|
(2)
|
|
|
Restructuring,
asset-related, and other charges
|
|
|
|
9
|
|
|
|
|
34
|
|
|
|
|
17
|
|
|
|
|
37
|
|
|
|
|
49
|
|
|
Gain on sales of
assets and businesses (1)
|
|
|
|
—
|
|
|
|
|
(9)
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(11)
|
|
|
Transaction
costs
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
2
|
|
|
|
|
1
|
|
|
Legal and
environmental charges (2)
|
|
|
|
1
|
|
|
|
|
5
|
|
|
|
|
1
|
|
|
|
|
12
|
|
|
|
|
43
|
|
|
Adjustments made to
income taxes (3)
|
|
|
|
(10)
|
|
|
|
|
3
|
|
|
|
|
(2)
|
|
|
|
|
(32)
|
|
|
|
|
5
|
|
|
Benefit from income
taxes relating to reconciling
items (4)
|
|
|
|
(6)
|
|
|
|
|
(7)
|
|
|
|
|
(3)
|
|
|
|
|
(19)
|
|
|
|
|
(18)
|
|
|
Adjusted Net
Income (5)
|
|
|
|
78
|
|
|
|
|
98
|
|
|
|
|
30
|
|
|
|
|
226
|
|
|
|
|
327
|
|
|
Interest expense,
net
|
|
|
|
53
|
|
|
|
|
53
|
|
|
|
|
53
|
|
|
|
|
160
|
|
|
|
|
156
|
|
|
Depreciation and
amortization
|
|
|
|
79
|
|
|
|
|
78
|
|
|
|
|
82
|
|
|
|
|
240
|
|
|
|
|
232
|
|
|
All remaining
provision for income taxes (5)
|
|
|
|
—
|
|
|
|
|
19
|
|
|
|
|
1
|
|
|
|
|
7
|
|
|
|
|
78
|
|
|
Adjusted
EBITDA
|
|
$
|
|
210
|
|
|
$
|
|
248
|
|
|
$
|
|
166
|
|
|
$
|
|
633
|
|
|
$
|
|
793
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted effective
tax rate (5)
|
|
|
|
—
|
%
|
|
|
|
16
|
%
|
|
|
|
3
|
%
|
|
|
|
3
|
%
|
|
|
|
19
|
%
|
|
(1)
|
The three and nine
months ended September 30, 2019 include a non-cash gain of $9
recognized in connection with the sale our Repauno, New Jersey
site.
|
|
(2)
|
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 nine months ended September 30, 2020 includes $8
based on the aforementioned assessment associated with certain
estimated
liabilities at Fayetteville. The three and nine months ended
September 30, 2019 include $2 and $36, respectively, for the
approved final Consent Order
associated with certain matters at Fayetteville. See "Note 17 –
Commitments and Contingent Liabilities" to the Interim Consolidated
Financial Statements
in our Quarterly Report on Form 10-Q for the quarter ended
September 30, 2020 for further details.
|
|
(3)
|
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, certain return-to-accrual adjustments, 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.
|
|
(5)
|
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
|
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
|
June
30,
|
|
|
September
30,
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2020
|
|
|
2019
|
|
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Chemours
|
|
$
|
|
76
|
|
|
$
|
|
76
|
|
|
$
|
|
24
|
|
|
$
|
|
200
|
|
|
$
|
|
265
|
|
Adjusted Net
Income
|
|
|
|
78
|
|
|
|
|
98
|
|
|
|
|
30
|
|
|
|
|
226
|
|
|
|
|
327
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of common shares
outstanding - basic
|
|
|
|
164,762,621
|
|
|
|
|
163,815,483
|
|
|
|
|
164,648,103
|
|
|
|
|
164,556,139
|
|
|
|
|
165,254,084
|
|
Dilutive effect of the
Company's employee
compensation plans
|
|
|
|
1,851,050
|
|
|
|
|
1,325,380
|
|
|
|
|
765,838
|
|
|
|
|
1,209,143
|
|
|
|
|
2,780,874
|
|
Weighted-average
number of common shares
outstanding - diluted
|
|
|
|
166,613,671
|
|
|
|
|
165,140,863
|
|
|
|
|
165,413,941
|
|
|
|
|
165,765,282
|
|
|
|
|
168,034,958
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share of common stock
|
|
$
|
|
0.46
|
|
|
$
|
|
0.46
|
|
|
$
|
|
0.15
|
|
|
$
|
|
1.22
|
|
|
$
|
|
1.60
|
|
Diluted earnings per
share of common stock
|
|
|
|
0.46
|
|
|
|
|
0.46
|
|
|
|
|
0.15
|
|
|
|
|
1.21
|
|
|
|
|
1.58
|
|
Adjusted basic
earnings per share of common stock
|
|
|
|
0.47
|
|
|
|
|
0.60
|
|
|
|
|
0.18
|
|
|
|
|
1.37
|
|
|
|
|
1.97
|
|
Adjusted diluted
earnings per share of common stock
|
|
|
|
0.47
|
|
|
|
|
0.59
|
|
|
|
|
0.18
|
|
|
|
|
1.36
|
|
|
|
|
1.94
|
|
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
|
|
|
Nine Months
Ended
|
|
|
|
September
30,
|
|
|
June
30,
|
|
|
September
30,
|
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2020
|
|
|
2019
|
|
|
Cash provided by
operating activities
|
|
$
|
|
299
|
|
|
$
|
|
288
|
|
|
$
|
|
111
|
|
|
$
|
|
454
|
|
|
$
|
|
250
|
|
|
Less: Purchases of
property, plant, and equipment
|
|
|
|
(47)
|
|
|
|
|
(128)
|
|
|
|
|
(61)
|
|
|
|
|
(214)
|
|
|
|
|
(385)
|
|
|
Free Cash
Flows
|
|
$
|
|
252
|
|
|
$
|
|
160
|
|
|
$
|
|
50
|
|
|
$
|
|
240
|
|
|
$
|
|
(135)
|
|
|
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 September 30,
|
|
|
|
2020
|
|
|
2019
|
|
|
Adjusted EBITDA
(1)
|
|
$
|
860
|
|
|
$
|
1,134
|
|
|
Less: Depreciation
and amortization (1)
|
|
|
(318)
|
|
|
|
(303)
|
|
|
Adjusted
EBIT
|
|
$
|
542
|
|
|
$
|
831
|
|
|
|
|
|
|
|
|
|
|
|
|
As of September
30,
|
|
|
|
2020
|
|
|
2019
|
|
|
Total debt
|
|
$
|
4,095
|
|
|
$
|
4,156
|
|
|
Total
equity
|
|
|
734
|
|
|
|
843
|
|
|
Less: Cash and cash
equivalents
|
|
|
(956)
|
|
|
|
(694)
|
|
|
Invested capital,
net
|
|
$
|
3,873
|
|
|
$
|
4,305
|
|
|
Average invested
capital (2)
|
|
$
|
4,009
|
|
|
$
|
4,094
|
|
|
|
|
|
|
|
|
|
|
|
Return on Invested
Capital
|
|
|
14
|
%
|
|
|
20
|
%
|
|
(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.
|
CONTACT:
INVESTORS
Jonathan Lock
VP, Corporate Development and Investor Relations
+1.302.773.2263
investor@chemours.com
NEWS MEDIA
Thomas Sueta
Director, Corporate Communications
+1.302.773.3903
media@chemours.com
View original
content:http://www.prnewswire.com/news-releases/the-chemours-company-reports-third-quarter-2020-results-301165932.html
SOURCE The Chemours Company