HOUSTON, March 30, 2020 /PRNewswire/ -- Kraton
Corporation (NYSE: KRA) ("Kraton" or the "Company"), a leading
global sustainable producer of specialty polymers and
high-value biobased products derived from pine wood pulping
co-products today provided a status update related to the
COVID-19 pandemic impact on the Company.
As a global company, Kraton continues to monitor the progression
of the COVID-19 pandemic on a daily, if not hourly basis. The
safety and well-being of our employees, stakeholders, and the
communities in which we operate remain our primary concern.
While our essential plant and laboratory personnel remain on-site,
many of our employees around the world are working remotely.
We are continuing to follow the orders and guidance of Federal,
regional and local governmental agencies, as we maintain our own
stringent protocols in an effort to mitigate the spread of the
virus and protect the health of our employees, customers and
suppliers as well as the communities in which we operate.
"To date, COVID-19 has had a limited impact on our business and
results of operations. Our plants have continued to operate
at normal capacities, and our supply chain remains intact, with
adequate availability of key raw materials. Importantly,
under the U.S. Department of Homeland Security guidance issued on
March 19, as well as many related
regional and local governmental orders, chemical manufacturing
sites are considered essential critical infrastructure, and as
such, are not currently subject to closure in the locations where
we operate. While the European Union issues critical infrastructure
orders on a country-by-country basis, thus far they have taken a
similar approach to the U.S. Department of Homeland Security
guidance," said Kevin M. Fogarty, Kraton's Chief Executive
Officer. "Although there has been some disruption in global
logistics channels, we have not experienced significant delays in
fulfillment of customer orders. While the future remains
uncertain, we believe Kraton's geographic and end market
diversification remains a strength, as we serve many customers,
including those in medical, adhesive and food packaging industries,
whose products remain vital in the current environment," added
Fogarty.
The Company continues to strengthen its balance sheet, most
recently through the March 6, 2020
sale of its Cariflex business for $530
million, and the subsequent reduction in amounts outstanding
under its senior secured term loan facility.
"With the sale of our Cariflex business in early March, relative
to year-end 2019 we expect to reduce our consolidated net debt by
approximately $480 million by the end
of the first quarter of 2020," said Atanas
H. Atanasov, Kraton's Senior Vice President and Chief
Financial Officer. "Further, at this time, Kraton has over
$350 million of available liquidity,
comprised of approximately $150
million of cash on hand, and an ample borrowing base under a
$250 million largely undrawn ABL facility. While the ABL
facility is available through its current maturity date in early
2021, we intend to renew and extend the facility before year-end
2020."
"From a broader long-term capital structure standpoint, we
believe Kraton is well-positioned. With the exception of the
currently largely undrawn ABL facility, we have no scheduled
maturities until 2025. In the current environment, our focus will
remain on cash generation, working capital and operational,
efficiency and continued debt reduction. In addition, we are
closely monitoring market conditions and will adapt our capital
spending levels as we believe prudent," added Atanasov.
For the first quarter of 2020, the Company expects to report
Adjusted EBITDA exceeding the current consensus estimate of
approximately $46 million. The
Company expects to release full results for the first quarter of
2020 after market close on April 29,
2020 and host a call to discuss first quarter 2020 results
the morning of April 30, 2020.
ABOUT KRATON
Kraton Corporation (NYSE: KRA) is a leading global sustainable
producer of specialty polymers and high-value biobased products
derived from pine wood pulping co-products. Kraton's polymers are
used in a wide range of applications, including adhesives,
coatings, consumer and personal care products, sealants and
lubricants, and medical, packaging, automotive, paving and roofing
applications. As the largest global provider in the pine chemicals
industry, the company's pine-based specialty products are sold into
adhesives, roads and construction and tire markets, and it produces
and sells a broad range of performance chemicals into markets that
include fuel additives, oilfield chemicals, coatings, metalworking
fluids and lubricants, inks, flavors and fragrances and mining.
Kraton offers its products to a diverse customer base in numerous
countries worldwide.
Kraton, and the Kraton logo and design, are all trademarks of
Kraton Polymers LLC.
FORWARD LOOKING STATEMENTS
This press release contains "forward-looking statements" within
the meaning of the U.S. Private Securities Litigation Reform Act of
1995. Forward-looking statements are often characterized by the use
of words such as "believes," "estimates," "expects," "projects,"
"may," "intends," "plans" or "anticipates," or by discussions of
strategy, plans or intentions. The statements in this press
release that are not historical statements, including statements
regarding the future outlook for our business and the markets and
manner in which we operate; the impact of the COVID-19 pandemic on
our operations and the effectiveness of our protective or other
mitigation actions in response to such pandemic, the strength of
our geographic and end market diversification, expectations for
first quarter consolidated net debt reduction and Adjusted EBITDA
results, and plans regarding the possible renewal and extension of
our ABL facility are forward-looking statements. All
forward-looking statements in this press release are made based on
management's current expectations and estimates, which involve
known and unknown risks, uncertainties and other important factors
that could cause actual results to differ materially from those
expressed in forward-looking statements. Additional
information concerning factors that could cause actual results to
differ materially from those expressed in forward-looking
statements is contained in Kraton's most recently filed annual
report on Form 10-K, quarterly reports on Form 10-Q and in other
filings made by Kraton with the U.S. Securities and Exchange
Commission, and include, but are not limited to, risks related to:
Kraton's ability to repay or re-finance its indebtedness; Kraton's
reliance on third parties for the provision of significant
operating and other services; health epidemics or pandemics such as
COVID-19 (including governmental and regulatory actions relating
thereto); conditions in the global economy and capital markets;
fluctuations in raw material costs; limitations in the availability
of raw materials; competition in Kraton's end-use markets; and
other factors of which we are currently unaware or deem
immaterial. Readers are cautioned not to place undue reliance
on forward-looking statements. Forward-looking statements
contained herein speak only as of the date of this press release,
and we assume no obligation to publicly update or revise such
forward-looking statements in light of new information or future
events.
NON-GAAP FINANCIAL MEASURES
This press release contains information regarding adjusted
EBITDA and consolidated net debt, which are non-GAAP financial
measures made available as a supplement, and not an alternative, to
the results provided in accordance with generally accepted
accounting principles in the United
States of America ("GAAP").
Adjusted EBITDA: For our consolidated results, Adjusted EBITDA
represents net income (loss) before interest, taxes, depreciation,
and amortization, as adjusted for the impact of a number of items
we do not consider indicative of our on-going performance,
including the spread between FIFO and ECRC.
Consolidated Net Debt: We define consolidated net debt as total
consolidated debt (including debt of KFPC) less consolidated cash
and cash equivalents. Management uses consolidated net debt to
determine our outstanding debt obligations that would not readily
be satisfied by its cash and cash equivalents on hand. Management
believes that using consolidated net debt is useful to investors in
determining our leverage since we could choose to use cash and cash
equivalents to retire debt.
We have not reconciled consolidated net debt guidance to debt
due to high variability and difficulty in making accurate forecasts
and projections that are impacted by future decisions and actions.
The actual amount of such reconciling items will have a significant
impact if they were included in our net debt. Accordingly, a
reconciliation of the non-GAAP financial measure guidance to the
corresponding GAAP measures is not available without unreasonable
effort.
FOR FURTHER INFORMATION
H. Gene Shiels
281-504-4886
View original content to download
multimedia:http://www.prnewswire.com/news-releases/kraton-corporation-provides-status-update-related-to-covid-19-outbreak-301031388.html
SOURCE Kraton Corporation