WYNYARD, UK, Feb. 24, 2021 /PRNewswire/ --
Fourth Quarter 2020 Highlights
- Net loss attributable to Venator of $58
million compared to $174
million in the prior year period
- Adjusted EBITDA of $25 million
compared to $23 million in the prior
year period
- Net cash provided by operating activities was $34 million and free cash flow was $13 million
- Loss per share of $0.54 and
adjusted loss per share of $0.12
Full-Year 2020 Highlights
- Net loss attributable to Venator of $112
million compared to $175
million in the prior year
- Adjusted EBITDA of $136 million
compared to $194 million in the prior
year
- Net cash provided by operating activities of $34 million and free cash outflow of $30 million
- Loss per share of $1.05 and
adjusted loss per share of $0.21
- Delivered $57 million of adjusted
EBITDA improvements as part of our business improvement programs
and COVID response program in 2020
|
|
Three months
ended
|
|
Twelve months
ended
|
|
|
December
31,
|
|
September 30,
2020
|
|
December
31,
|
(In millions, except per share amounts)
|
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
Revenues
|
|
$
|
476
|
|
|
$
|
464
|
|
|
$
|
474
|
|
|
$
|
1,938
|
|
|
$
|
2,130
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable
to Venator(a)
|
|
$
|
(58)
|
|
|
$
|
(174)
|
|
|
$
|
(42)
|
|
|
$
|
(112)
|
|
|
$
|
(175)
|
|
Adjusted net (loss)
income(2)(a)
|
|
$
|
(13)
|
|
|
$
|
(10)
|
|
|
$
|
(18)
|
|
|
$
|
(22)
|
|
|
$
|
26
|
|
Adjusted
EBITDA(1)(a)
|
|
$
|
25
|
|
|
$
|
23
|
|
|
$
|
17
|
|
|
$
|
136
|
|
|
$
|
194
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted loss per
share(a)
|
|
$
|
(0.54)
|
|
|
$
|
(1.63)
|
|
|
$
|
(0.39)
|
|
|
$
|
(1.05)
|
|
|
$
|
(1.64)
|
|
Adjusted diluted
(loss) earnings per share(1)(a)
|
|
$
|
(0.12)
|
|
|
$
|
(0.09)
|
|
|
$
|
(0.17)
|
|
|
$
|
(0.21)
|
|
|
$
|
0.24
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
|
34
|
|
|
$
|
69
|
|
|
$
|
20
|
|
|
$
|
34
|
|
|
$
|
33
|
|
Free cash
flow(3)(b)
|
|
$
|
13
|
|
|
$
|
20
|
|
|
$
|
24
|
|
|
$
|
(30)
|
|
|
$
|
(117)
|
|
|
(a) Includes an $11
million benefit in the twelve months ended December 31, 2019, due
to a change in plant utilization rates, which increased our
overhead absorption and corresponding inventory valuation at
certain facilities
|
(b) Does not include
a $15 million benefit from monetizing cross-currency interest rate
swaps in the twelve months ended December 31, 2019
|
See end of press
release for numbered footnote explanations
|
Venator Materials PLC ("Venator") (NYSE: VNTR) today reported
fourth quarter 2020 results with revenues of $476 million, net loss attributable to Venator of
$58 million, adjusted net loss of
$13 million and adjusted EBITDA of
$25 million.
Simon Turner, President and
CEO of Venator, commented:
"2020 was an unprecedented year with unique challenges and I was
very pleased with how well our associates and business responded.
We successfully completed our 2019 business improvement program,
introduced an additional savings program and delivered our
temporary COVID savings. In total, we delivered $57 million of cost savings and closed the year
with three consecutive quarters of positive free cash flow. Fourth
quarter sales volumes for our TiO2 products continue to improve and
have returned to pre-COVID levels within all business units of
Performance Additives. Our Performance Additives business
demonstrated particular resilience in 2020 as EBITDA improved by
$8 million compared to the prior
year.
"Although uncertainties regarding the COVID pandemic remain,
TiO2 fundamentals are improving. Stronger demand for TiO2 is
enabling higher selling prices as we seek to reclaim lost margin.
We continue to exercise disciplined management over our cash uses
as we seek to improve our long-term free cash flow profile. I am
optimistic about Venator's future prospects."
Segment Analysis for 4Q20 Compared to 4Q19
Titanium Dioxide
The Titanium Dioxide segment
generated revenues of $348 million in
the three months ended December 31,
2020, a decrease of $6
million, or 2%, compared to the same period in 2019. The
decline was primarily due to a 3% decrease in the average
TiO2 selling price and a 2% decrease in sales volumes
partially offset by a 3% favorable impact of foreign currency
translation, while mix and other was flat. Volumes were
lower as a result of the hurricanes in North America impacting sales from our joint
venture facility in Lake Charles,
Louisiana.
Adjusted EBITDA for the Titanium Dioxide segment was
$25 million in the three months ended
December 31, 2020, a decrease of
$5 million compared to the same
period in 2019. The decline was primarily a result of higher ore
costs and the impact of a non-recurring benefit in 2019 due to a
change in plant utilization rates. This was partially offset by
benefits from our business improvement programs and COVID response
program.
Performance Additives
The Performance Additives
segment generated revenues of $128
million in the three months ended December 31, 2020, an increase of $18 million, or 16%, compared to the same period
in 2019. The increase was primarily due to a 7% increase in sales
volumes, a 5% increase in average selling prices, a 3% favorable
impact from foreign currency translation and a 1% favorable impact
in mix and other. The increase in sales volumes was primarily a
result of improved demand for products used in automotive,
coatings, plastics and construction markets.
Adjusted EBITDA for the Performance Additives segment was
$15 million in the three months ended
December 31, 2020, an increase of
$11 million compared to the same
period in 2019. The increase was primarily due to increased sales
and benefits from our business improvement programs.
Corporate and Other
Corporate and other represents
expenses which are not allocated to our segments. Losses from
Corporate and other were $15 million,
or $4 million higher for the three
months ended December 31, 2020
compared to the same period in 2019. This is due to timing of
employee benefit accruals. We expect Corporate and other to be
approximately $45 million for the
full year 2021.
Tax Items
We recorded an income tax expense of
$9 million and $12 million for the three and twelve months ended
December 31, 2020, respectively,
compared to an income tax expense of $150
million and $150 million for
the three and twelve months ended December
31, 2019, respectively. $157
million of tax expense was recognized in the fourth quarter
of 2019 in connection with recognizing a full valuation allowance
against certain net deferred tax assets. Our adjusted effective tax
rate was unchanged at 35% for the full year 2020 and full year
2019.
Our income taxes are significantly affected by the mix of income
and losses in tax jurisdictions and valuation allowances in certain
jurisdictions in which we operate. In 2021, we expect to see an
adjusted effective tax rate of approximately 35%. We continue to
expect that our adjusted long-term effective tax rate will be
approximately 15% to 20%.
Liquidity and Capital Resources
As of December 31, 2020, we had cash and cash
equivalents of $220 million compared
with $55 million as of December 31, 2019. In addition, we have in place
an undrawn asset based revolving credit facility available for our
working capital needs and general corporate purposes with an
availability of $251 million as of
December 31, 2020. As of December 31, 2020, net debt was $737 million compared to $695 million as of December 31, 2019.
Capital expenditures excluding cash paid for Pori rebuild
totaled $13 million in the fourth
quarter of 2020 and $67 million in
the full year 2020. We expect capital expenditures in 2021 to total
approximately $75 - 85 million.
Earnings Conference Call Information
We will hold a
conference call to discuss our fourth quarter and full-year 2020
results on, Wednesday, February 24,
2021 at 10:00 a.m. ET.
Call-in numbers for
the conference call:
|
|
U.S.
participants
|
1-833-366-1118
|
International
participants
|
1-412-902-6770
|
(No passcode
required)
|
|
In order to facilitate the registration process, you may use the
following link to pre-register for the conference call. Callers who
pre-register will be given a unique PIN and separate call-in number
to gain immediate access to the call and bypass the live operator.
To pre-register, please go to:
https://dpregister.com/sreg/10150553/dee106ae92
Webcast Information
The conference call will be
available via webcast and can be accessed from the company's
website at venatorcorp.com/investor-relations.
Replay Information
The conference call will be
available for replay beginning February 24, 2021 and ending
March 3, 2021.
Call-in numbers for
the replay:
|
|
U.S.
participants
|
1-877-344-7529
|
International
participants
|
1-412-317-0088
|
Passcode
|
10150553
|
Upcoming Conferences
During the first quarter of 2021,
a member of management is expected to present at the Alembic Global
Advisors Deer Valley Chemical & Industrial Conference on
February 26, at the J.P. Morgan
Global High Yield & Leveraged Finance Conference on
March 2 and at the Bank of America
Merrill Lynch Global Agriculture and Materials Conference on
March 3. A webcast of the
presentations, if applicable, along with accompanying materials
will be available at venatorcorp.com/investor-relations.
Table 1 — Results
of Operations
|
|
|
|
Three months
ended
|
|
Twelve months
ended
|
|
|
December
31,
|
|
December
31,
|
(In millions, except per share amounts)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Revenues
|
|
$
|
476
|
|
|
$
|
464
|
|
|
$
|
1,938
|
|
|
$
|
2,130
|
|
Cost of goods
sold
|
|
442
|
|
|
431
|
|
|
1,778
|
|
|
1,892
|
|
Operating
expenses
|
|
49
|
|
|
42
|
|
|
170
|
|
|
192
|
|
Restructuring,
impairment, and plant closing and transition costs
|
|
33
|
|
|
9
|
|
|
58
|
|
|
33
|
|
Operating (loss)
income
|
|
(48)
|
|
|
(18)
|
|
|
(68)
|
|
|
13
|
|
Interest expense,
net
|
|
(15)
|
|
|
(10)
|
|
|
(52)
|
|
|
(41)
|
|
Other
income
|
|
15
|
|
|
5
|
|
|
27
|
|
|
8
|
|
Loss before income
taxes
|
|
(48)
|
|
|
(23)
|
|
|
(93)
|
|
|
(20)
|
|
Income tax
expense
|
|
(9)
|
|
|
(150)
|
|
|
(12)
|
|
|
(150)
|
|
Net
loss
|
|
(57)
|
|
|
(173)
|
|
|
(105)
|
|
|
(170)
|
|
Net income
attributable to noncontrolling interests
|
|
(1)
|
|
|
(1)
|
|
|
(7)
|
|
|
(5)
|
|
Net loss
attributable to Venator
|
|
$
|
(58)
|
|
|
$
|
(174)
|
|
|
$
|
(112)
|
|
|
$
|
(175)
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA(1)
|
|
$
|
25
|
|
|
$
|
23
|
|
|
$
|
136
|
|
|
$
|
194
|
|
Adjusted net
(loss) income(1)
|
|
$
|
(13)
|
|
|
$
|
(10)
|
|
|
$
|
(22)
|
|
|
$
|
26
|
|
|
|
|
|
|
|
|
|
|
Basic &
diluted loss per share
|
|
$
|
(0.54)
|
|
|
$
|
(1.63)
|
|
|
$
|
(1.05)
|
|
|
$
|
(1.64)
|
|
Adjusted basic
& diluted (loss) earnings per
share(1)
|
|
$
|
(0.12)
|
|
|
$
|
(0.09)
|
|
|
$
|
(0.21)
|
|
|
$
|
0.24
|
|
|
|
|
|
|
|
|
|
|
Ordinary share
information:
|
|
|
|
|
|
|
|
|
Basic & diluted
shares outstanding
|
|
106.7
|
|
|
106.6
|
|
|
106.7
|
|
|
106.5
|
|
|
See end of press
release for footnote explanations
|
Table 2 — Results
of Operations by Segment
|
|
|
|
Three months
ended
|
|
|
|
Twelve months
ended
|
|
|
|
|
December
31,
|
|
Better
/
|
|
December
31,
|
|
Better
/
|
(In millions)
|
|
2020
|
|
2019
|
|
(Worse)
|
|
2020
|
|
2019
|
|
(Worse)
|
Segment
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Titanium
Dioxide
|
|
$
|
348
|
|
|
$
|
354
|
|
|
(2)
|
%
|
|
$
|
1,431
|
|
|
$
|
1,614
|
|
|
(11)
|
%
|
Performance
Additives
|
|
128
|
|
|
110
|
|
|
16
|
%
|
|
507
|
|
|
516
|
|
|
(2)
|
%
|
Total
|
|
$
|
476
|
|
|
$
|
464
|
|
|
3
|
%
|
|
$
|
1,938
|
|
|
$
|
2,130
|
|
|
(9)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Adjusted
EBITDA(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
Titanium
Dioxide
|
|
$
|
25
|
|
|
$
|
30
|
|
|
(17)
|
%
|
|
$
|
127
|
|
|
$
|
197
|
|
|
(36)
|
%
|
Performance
Additives
|
|
15
|
|
|
4
|
|
|
275
|
%
|
|
55
|
|
|
47
|
|
|
17
|
%
|
Corporate and
other
|
|
(15)
|
|
|
(11)
|
|
|
(36)
|
%
|
|
(46)
|
|
|
(50)
|
|
|
8
|
%
|
Total
|
|
$
|
25
|
|
|
$
|
23
|
|
|
9
|
%
|
|
$
|
136
|
|
|
$
|
194
|
|
|
(30)
|
%
|
|
See end of press
release for footnote explanations
|
Table 3 — Factors
Impacting Sales Revenue
|
|
|
Three months
ended
|
|
December 31, 2020
vs. 2019
|
|
Average Selling Price(a)
|
|
|
|
|
|
|
|
Local
Currency
|
|
Exchange
Rate
|
|
Sales Mix
& Other
|
|
Sales
Volume(b)
|
|
Total
|
Titanium
Dioxide
|
(3)
|
%
|
|
3
|
%
|
|
—
|
%
|
|
(2)
|
%
|
|
(2)
|
%
|
Performance
Additives
|
5
|
%
|
|
3
|
%
|
|
1
|
%
|
|
7
|
%
|
|
16
|
%
|
Total
Company
|
(1)
|
%
|
|
3
|
%
|
|
1
|
%
|
|
—
|
%
|
|
3
|
%
|
|
|
Twelve months
ended
|
|
December 31, 2020
vs. 2019
|
|
Average Selling Price(a)
|
|
|
|
|
|
|
|
Local
Currency
|
|
Exchange
Rate
|
|
Sales Mix
& Other
|
|
Sales
Volume(b)
|
|
Total
|
Titanium
Dioxide
|
(2)
|
%
|
|
—
|
%
|
|
—
|
%
|
|
(9)
|
%
|
|
(11)
|
%
|
Performance
Additives
|
3
|
%
|
|
—
|
%
|
|
—
|
%
|
|
(5)
|
%
|
|
(2)
|
%
|
Total
Company
|
(1)
|
%
|
|
—
|
%
|
|
—
|
%
|
|
(8)
|
%
|
|
(9)
|
%
|
|
(a)
Excludes revenues from tolling arrangements, by-products and raw
materials
|
(b)
Excludes sales volumes of by-products and raw materials
|
Table 4 —
Reconciliation of U.S. GAAP to Non-GAAP Measures
|
|
|
|
EBITDA
|
|
Net Income
(Loss)
|
|
Diluted
Earnings
(Loss) Per Share
|
|
|
Three months
ended
|
|
Three months
ended
|
|
Three months
ended
|
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
(In millions, except per share amounts)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net
loss
|
|
$
|
(57)
|
|
|
$
|
(173)
|
|
|
$
|
(57)
|
|
|
$
|
(173)
|
|
|
$
|
(0.53)
|
|
|
$
|
(1.62)
|
|
Net income
attributable to noncontrolling interests
|
|
(1)
|
|
|
(1)
|
|
|
(1)
|
|
|
(1)
|
|
|
(0.01)
|
|
|
(0.01)
|
|
Net loss
attributable to Venator
|
|
(58)
|
|
|
(174)
|
|
|
(58)
|
|
|
(174)
|
|
|
(0.54)
|
|
|
(1.63)
|
|
Interest expense,
net
|
|
15
|
|
|
10
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
9
|
|
|
150
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
29
|
|
|
28
|
|
|
|
|
|
|
|
|
|
Business acquisition
and integration credits
|
|
—
|
|
|
(4)
|
|
|
—
|
|
|
(4)
|
|
|
—
|
|
|
(0.04)
|
|
Separation
gain
|
|
(10)
|
|
|
(3)
|
|
|
(10)
|
|
|
(3)
|
|
|
(0.09)
|
|
|
(0.03)
|
|
Gain on disposition
of businesses/assets
|
|
(1)
|
|
|
—
|
|
|
(1)
|
|
|
—
|
|
|
(0.01)
|
|
|
—
|
|
Certain legal
expenses/settlements
|
|
3
|
|
|
1
|
|
|
3
|
|
|
1
|
|
|
0.03
|
|
|
0.01
|
|
Amortization of
pension and postretirement actuarial losses
|
|
3
|
|
|
3
|
|
|
3
|
|
|
3
|
|
|
0.03
|
|
|
0.03
|
|
Net plant incident
costs
|
|
2
|
|
|
3
|
|
|
2
|
|
|
3
|
|
|
0.02
|
|
|
0.03
|
|
Restructuring,
impairment, plant closing and transition costs
|
|
33
|
|
|
9
|
|
|
33
|
|
|
9
|
|
|
0.31
|
|
|
0.08
|
|
Income tax
adjustments(2)
|
|
—
|
|
|
—
|
|
|
15
|
|
|
155
|
|
|
0.14
|
|
|
1.46
|
|
Adjusted(1)
|
|
$
|
25
|
|
|
$
|
23
|
|
|
$
|
(13)
|
|
|
$
|
(10)
|
|
|
$
|
(0.12)
|
|
|
$
|
(0.09)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted income tax
expense(2)
|
|
|
|
|
|
$
|
(6)
|
|
|
$
|
(5)
|
|
|
|
|
|
Net income
attributable to noncontrolling interests, net of tax
|
|
|
|
|
|
1
|
|
|
1
|
|
|
|
|
|
Adjusted pre-tax
loss(1)
|
|
|
|
|
|
$
|
(18)
|
|
|
$
|
(14)
|
|
|
|
|
|
Adjusted effective
tax rate
|
|
|
|
|
|
35
|
%
|
|
35
|
%
|
|
|
|
|
|
|
|
EBITDA
|
|
Net Income
(Loss)
|
|
Diluted
Earnings
(Loss) Per Share
|
|
|
Three months
ended
|
|
Three months
ended
|
|
Three months
ended
|
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
(In millions, except per share amounts)
|
|
2020
|
|
2020
|
|
2020
|
Net
loss
|
|
$
|
(39)
|
|
|
$
|
(39)
|
|
|
$
|
(0.36)
|
|
Net income
attributable to noncontrolling interests
|
|
(3)
|
|
|
(3)
|
|
|
(0.03)
|
|
Net loss
attributable to Venator
|
|
(42)
|
|
|
(42)
|
|
|
(0.39)
|
|
Interest expense,
net
|
|
15
|
|
|
|
|
|
Income tax
expense
|
|
3
|
|
|
|
|
|
Depreciation and
amortization
|
|
29
|
|
|
|
|
|
Business acquisition
and integration expenses
|
|
—
|
|
|
—
|
|
|
—
|
|
Gain on disposition
of businesses/ assets
|
|
(6)
|
|
|
(6)
|
|
|
(0.06)
|
|
Certain legal
expenses/settlements
|
|
—
|
|
|
—
|
|
|
—
|
|
Amortization of
pension and postretirement actuarial losses
|
|
3
|
|
|
3
|
|
|
0.03
|
|
Net plant incident
costs
|
|
2
|
|
|
2
|
|
|
0.02
|
|
Restructuring,
impairment, plant closing and transition costs
|
|
13
|
|
|
13
|
|
|
0.12
|
|
Income tax
adjustments(2)
|
|
—
|
|
|
12
|
|
|
0.11
|
|
Adjusted(1)
|
|
$
|
17
|
|
|
$
|
(18)
|
|
|
$
|
(0.17)
|
|
|
|
|
|
|
|
|
Adjusted income tax
expense(2)
|
|
|
|
$
|
(9)
|
|
|
|
Net income
attributable to noncontrolling interests, net of tax
|
|
|
|
3
|
|
|
|
Adjusted pre-tax
loss(1)
|
|
|
|
$
|
(24)
|
|
|
|
Adjusted effective
tax rate
|
|
|
|
35
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
Net Income
(Loss)
|
|
Diluted
Earnings
(Loss) Per Share
|
|
|
Twelve months
ended
|
|
Twelve months
ended
|
|
Twelve months
ended
|
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
(In millions, except per share amounts)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net
loss
|
|
$
|
(105)
|
|
|
$
|
(170)
|
|
|
$
|
(105)
|
|
|
$
|
(170)
|
|
|
$
|
(0.98)
|
|
|
$
|
(1.60)
|
|
Net income
attributable to noncontrolling interests
|
|
(7)
|
|
|
(5)
|
|
|
(7)
|
|
|
(5)
|
|
|
(0.07)
|
|
|
(0.04)
|
|
Net loss
attributable to Venator
|
|
(112)
|
|
|
(175)
|
|
|
(112)
|
|
|
(175)
|
|
|
(1.05)
|
|
|
(1.64)
|
|
Interest expense,
net
|
|
52
|
|
|
41
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
12
|
|
|
150
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
114
|
|
|
110
|
|
|
|
|
|
|
|
|
|
Business acquisition
and integration expenses (credits)
|
|
1
|
|
|
(1)
|
|
|
1
|
|
|
(1)
|
|
|
0.01
|
|
|
(0.01)
|
|
Separation
gain
|
|
(10)
|
|
|
(3)
|
|
|
(10)
|
|
|
(3)
|
|
|
(0.09)
|
|
|
(0.03)
|
|
(Gain) loss on
disposition of businesses/assets
|
|
(5)
|
|
|
1
|
|
|
(5)
|
|
|
1
|
|
|
(0.05)
|
|
|
0.01
|
|
Certain legal
expenses/settlements
|
|
6
|
|
|
4
|
|
|
6
|
|
|
4
|
|
|
0.06
|
|
|
0.04
|
|
Amortization of
pension and postretirement actuarial losses
|
|
13
|
|
|
14
|
|
|
13
|
|
|
14
|
|
|
0.12
|
|
|
0.13
|
|
Net plant incident
costs
|
|
7
|
|
|
20
|
|
|
7
|
|
|
20
|
|
|
0.07
|
|
|
0.19
|
|
Restructuring,
impairment, plant closing and transition costs
|
|
58
|
|
|
33
|
|
|
58
|
|
|
33
|
|
|
0.54
|
|
|
0.31
|
|
Income tax
adjustments(2)
|
|
—
|
|
|
—
|
|
|
20
|
|
|
133
|
|
|
0.19
|
|
|
1.24
|
|
Adjusted(1)
|
|
$
|
136
|
|
|
$
|
194
|
|
|
$
|
(22)
|
|
|
$
|
26
|
|
|
$
|
(0.21)
|
|
|
$
|
0.24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted income tax
expense(2)
|
|
|
|
|
|
$
|
(8)
|
|
|
$
|
17
|
|
|
|
|
|
Net income
attributable to noncontrolling interests, net of tax
|
|
|
|
|
|
7
|
|
|
5
|
|
|
|
|
|
Adjusted pre-tax
loss(1)
|
|
|
|
|
|
$
|
(23)
|
|
|
$
|
48
|
|
|
|
|
|
Adjusted effective
tax rate
|
|
|
|
|
|
35
|
%
|
|
35
|
%
|
|
|
|
|
|
See end of press
release for footnote explanations
|
Table 5 — Selected
Balance Sheet Items
|
|
|
|
December
31,
|
|
September
30,
|
|
December
31,
|
(In millions)
|
|
2020
|
|
2020
|
|
2019
|
Cash
|
|
$
|
220
|
|
|
$
|
208
|
|
|
$
|
55
|
|
Accounts and notes
receivable, net
|
|
324
|
|
|
306
|
|
|
321
|
|
Inventories
|
|
440
|
|
|
438
|
|
|
513
|
|
Prepaid and other
current assets
|
|
73
|
|
|
77
|
|
|
88
|
|
Property, plant and
equipment, net
|
|
947
|
|
|
940
|
|
|
989
|
|
Other
assets
|
|
353
|
|
|
331
|
|
|
299
|
|
Total
assets
|
|
$
|
2,357
|
|
|
$
|
2,300
|
|
|
$
|
2,265
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
262
|
|
|
$
|
215
|
|
|
$
|
351
|
|
Other current
liabilities
|
|
126
|
|
|
107
|
|
|
124
|
|
Current portion of
debt
|
|
7
|
|
|
7
|
|
|
13
|
|
Long-term
debt
|
|
950
|
|
|
950
|
|
|
737
|
|
Non-current payable
to affiliates
|
|
17
|
|
|
30
|
|
|
30
|
|
Other
liabilities
|
|
371
|
|
|
328
|
|
|
337
|
|
Total
equity
|
|
624
|
|
|
663
|
|
|
673
|
|
Total liabilities
and equity
|
|
$
|
2,357
|
|
|
$
|
2,300
|
|
|
$
|
2,265
|
|
Table 6 —
Outstanding Debt
|
|
|
|
December
31,
|
|
September
30,
|
|
December
31,
|
(In millions)
|
|
2020
|
|
2020
|
|
2019
|
Debt:
|
|
|
|
|
|
|
Term Loan
Facility
|
|
$
|
359
|
|
|
$
|
359
|
|
|
$
|
361
|
|
Senior Secured
Notes
|
|
215
|
|
|
215
|
|
|
—
|
|
Senior Unsecured
Notes
|
|
372
|
|
|
371
|
|
|
371
|
|
Other debt
|
|
11
|
|
|
12
|
|
|
18
|
|
Total debt -
excluding affiliates
|
|
$
|
957
|
|
|
$
|
957
|
|
|
$
|
750
|
|
Total cash
|
|
220
|
|
|
208
|
|
|
55
|
|
Net debt -
excluding affiliates
|
|
$
|
737
|
|
|
$
|
749
|
|
|
$
|
695
|
|
Table 7 —
Summarized Statement of Cash Flows
|
|
|
|
Three months
ended
|
|
Twelve months
ended
|
|
|
December
31,
|
|
December
31,
|
(In millions)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Total cash at
beginning of period
|
|
$
|
208
|
|
|
$
|
40
|
|
|
$
|
55
|
|
|
$
|
165
|
|
Net cash provided by
operating activities
|
|
34
|
|
|
69
|
|
|
34
|
|
|
33
|
|
Net cash used in
investing activities
|
|
(21)
|
|
|
(49)
|
|
|
(64)
|
|
|
(150)
|
|
Net cash (used in)
provided by financing activities
|
|
(3)
|
|
|
(6)
|
|
|
192
|
|
|
7
|
|
Effect of exchange
rate changes on cash
|
|
2
|
|
|
1
|
|
|
3
|
|
|
—
|
|
Total cash at end
of period
|
|
$
|
220
|
|
|
$
|
55
|
|
|
$
|
220
|
|
|
$
|
55
|
|
Supplemental cash
flow information:
|
|
|
|
|
|
|
|
|
Cash paid for
interest
|
|
$
|
(4)
|
|
|
$
|
—
|
|
|
$
|
(39)
|
|
|
$
|
(41)
|
|
Cash paid for income
taxes
|
|
(3)
|
|
|
(4)
|
|
|
(3)
|
|
|
(8)
|
|
Capital
expenditures
|
|
(15)
|
|
|
(42)
|
|
|
(69)
|
|
|
(152)
|
|
Depreciation and
amortization
|
|
29
|
|
|
28
|
|
|
114
|
|
|
110
|
|
|
|
|
|
|
|
|
|
|
Changes in primary
working capital:
|
|
|
|
|
|
|
|
|
Accounts and notes
receivable
|
|
(6)
|
|
|
50
|
|
|
14
|
|
|
22
|
|
Inventories
|
|
15
|
|
|
(6)
|
|
|
102
|
|
|
21
|
|
Accounts
payable
|
|
36
|
|
|
43
|
|
|
(77)
|
|
|
(29)
|
|
Total cash provided
by primary working capital
|
|
$
|
45
|
|
|
$
|
87
|
|
|
$
|
39
|
|
|
$
|
14
|
|
|
|
|
Three months
ended
|
|
Twelve months
ended
|
|
|
December
31,
|
|
December
31,
|
(In
millions)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Free cash
flow(3):
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
|
34
|
|
|
$
|
69
|
|
|
$
|
34
|
|
|
$
|
33
|
|
Capital
expenditures
|
|
(15)
|
|
|
(42)
|
|
|
(69)
|
|
|
(152)
|
|
Other investing
activities
|
|
(6)
|
|
|
(7)
|
|
|
5
|
|
|
2
|
|
Total free cash
flow(3)
|
|
$
|
13
|
|
|
$
|
20
|
|
|
$
|
(30)
|
|
|
$
|
(117)
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
|
25
|
|
|
$
|
23
|
|
|
$
|
136
|
|
|
$
|
194
|
|
Capital expenditures
excluding cash paid for Pori rebuild
|
|
(13)
|
|
|
(42)
|
|
|
(67)
|
|
|
(115)
|
|
Cash paid for
interest
|
|
(4)
|
|
|
—
|
|
|
(39)
|
|
|
(41)
|
|
Cash paid for income
taxes
|
|
(3)
|
|
|
(4)
|
|
|
(3)
|
|
|
(8)
|
|
Primary working
capital change
|
|
45
|
|
|
87
|
|
|
39
|
|
|
14
|
|
Restructuring
|
|
(3)
|
|
|
(4)
|
|
|
(10)
|
|
|
(26)
|
|
Pension &
other
|
|
(29)
|
|
|
(31)
|
|
|
(78)
|
|
|
(71)
|
|
Net cash flows
associated with Pori
|
|
(5)
|
|
|
(9)
|
|
|
(8)
|
|
|
(64)
|
|
Total free cash
flow(3)
|
|
$
|
13
|
|
|
$
|
20
|
|
|
$
|
(30)
|
|
|
$
|
(117)
|
|
|
See end of press
release for numbered footnote explanations
|
Footnotes
|
|
(1)
|
Our management uses
adjusted EBITDA to assess financial performance. Adjusted EBITDA is
defined as net income/loss before interest income/expense, net,
income tax expense/benefit, depreciation and amortization, and net
income attributable to noncontrolling interests, as well as
eliminating the following adjustments: (a) business acquisition and
integration expense/credits; (b) separation gain/expense; (c)
loss/gain on disposition of businesses/assets; (d) certain legal
expenses/settlements; (e) amortization of pension and
postretirement actuarial losses/gains; (f) net plant incident
costs/credits; and (g) restructuring, impairment, and plant closing
and transition costs/credits. We believe that net income is the
performance measure calculated and presented in accordance with
U.S. GAAP that is most directly comparable to adjusted
EBITDA.
|
|
|
|
We believe adjusted
EBITDA is useful to investors in assessing our ongoing financial
performance and provides improved comparability between periods
through the exclusion of certain items that management believes are
not indicative of our operational profitability and that may
obscure underlying business results and trends. However, this
measure should not be considered in isolation or viewed as a
substitute for net income or other measures of performance
determined in accordance with U.S. GAAP. Moreover, adjusted EBITDA
as used herein is not necessarily comparable to other similarly
titled measures of other companies due to potential inconsistencies
in the methods of calculation. Our management believes this measure
is useful to compare general operating performance from period to
period and to make certain related management decisions. Adjusted
EBITDA is also used by securities analysts, lenders and others in
their evaluation of different companies because it excludes certain
items that can vary widely across different industries or among
companies within the same industry. For example, interest expense
can be highly dependent on a company's capital structure, debt
levels and credit ratings. Therefore, the impact of interest
expense on earnings can vary significantly among companies. In
addition, the tax positions of companies can vary because of their
differing abilities to take advantage of tax benefits and because
of the tax policies of the various jurisdictions in which they
operate. As a result, effective tax rates and tax expense can vary
considerably among companies. Finally, companies employ productive
assets of different ages and utilize different methods of acquiring
and depreciating such assets. This can result in considerable
variability in the relative costs of productive assets and the
depreciation and amortization expense among companies.
|
|
|
|
Nevertheless, our
management recognizes that there are limitations associated with
the use of adjusted EBITDA in the evaluation of us as compared to
net income. Our management compensates for the limitations of using
adjusted EBITDA by using this measure to supplement U.S. GAAP
results to provide a more complete understanding of the factors and
trends affecting the business rather than U.S. GAAP results
alone.
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In addition to the
limitations noted above, adjusted EBITDA excludes items that may be
recurring in nature and should not be disregarded in the evaluation
of performance. However, we believe it is useful to exclude such
items to provide a supplemental analysis of current results and
trends compared to other periods because certain excluded items can
vary significantly depending on specific underlying transactions or
events, and the variability of such items may not relate
specifically to ongoing operating results or trends and certain
excluded items, while potentially recurring in future periods, may
not be indicative of future results.
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Adjusted net
income/loss attributable to Venator Materials PLC ordinary
shareholders is computed by eliminating the after-tax amounts
related to the following from net income/loss attributable to
Venator Materials PLC ordinary shareholders: (a) business
acquisition and integration expenses/ credits; (b) separation gain/
expense; (c) loss/gain on disposition of businesses/assets; (d)
certain legal expenses/ settlements; (e) amortization of pension
and postretirement actuarial losses/gains; (f) net plant incident
costs/credits; and (g) restructuring, impairment, and plant closing
and transition costs/credits. Basic adjusted net earnings per share
excludes dilution and is computed by dividing adjusted net income
by the weighted average number of shares outstanding during the
period. Adjusted diluted net earnings per share reflects all
potential dilutive ordinary shares outstanding during the period
increased by the number of additional shares that would have been
outstanding as dilutive securities.
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Adjusted net income
(loss) and adjusted net earnings (loss) per share amounts are
presented solely as supplemental information. These measures
exclude similar noncash items as Adjusted EBITDA in order to assist
our investors in comparing our performance from period to period
and as such, bear similar risks as Adjusted EBITDA as documented
above. For that reason, adjusted net income and the related per
share amounts, should not be considered in isolation and should be
considered only to supplement analysis of U.S. GAAP
results.
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(2)
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Prior to the second
quarter of 2019, the income tax impacts, if any, of each adjusting
item represented a ratable allocation of the total difference
between the unadjusted tax expense and the total adjusted tax
expense, computed without consideration of any adjusting items
using a with and without approach.
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Beginning in the
three- and six-month periods ended June 30, 2019, income tax
expense is adjusted by the amount of additional tax expense or
benefit that we would accrue if we used non-GAAP results instead of
GAAP results in the calculation of our tax liability, taking into
consideration our tax structure. We use a normalized effective tax
rate of 35%, which reflects the weighted average tax rate
applicable under the various jurisdictions in which we operate.
This non-GAAP tax rate eliminates the effects of non-recurring and
period specific items which are often attributable to restructuring
and acquisition decisions and can vary in size and frequency. This
rate is subject to change over time for various reasons, including
changes in the geographic business mix, valuation allowances, and
changes in statutory tax rates.
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We eliminate the
effect of significant changes to income tax valuation allowances
from our presentation of adjusted net income to allow investors to
better compare our ongoing financial performance from period to
period. We do not adjust for insignificant changes in tax valuation
allowances because we do not believe it provides more meaningful
information than is provided under GAAP. We believe that our
revised approach enables a clearer understanding of the long term
impact of our tax structure on post tax earnings.
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(3)
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Management internally
uses a free cash flow measure: (a) to evaluate the Company's
liquidity, (b) to evaluate strategic investments, (c) to evaluate
the Company's ability to incur and service debt. Free cash flow is
not a defined term under U.S. GAAP, and it should not be inferred
that the entire free cash flow amount is available for
discretionary expenditures. The Company defines free cash flow as
cash flows provided by (used in) operating activities from
continuing operations and used in investing activities. Free cash
flow is typically derived directly from the Company's consolidated
statement of cash flows; however, it may be adjusted for items that
affect comparability between periods. Free cash flow is presented
as supplemental information.
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About Venator
Venator is a global manufacturer and
marketer of chemical products that comprise a broad range of
pigments and additives that bring color and vibrancy to buildings,
protect and extend product life, and reduce energy consumption. We
market our products globally to a diversified group of industrial
customers through two segments: Titanium Dioxide, which consists of
our TiO2 business, and Performance Additives, which
consists of our functional additives, color pigments, timber
treatment and water treatment businesses. Based in
Wynyard, U.K., Venator employs
approximately 3,700 associates and sells its products in more than
120 countries.
Social
Media:
Twitter:
www.twitter.com/VenatorCorp
Facebook:
www.facebook.com/venatorcorp
LinkedIn: www.linkedin.com/company/venator-corp
Cautionary Statement Concerning Forward-Looking
Statements
Certain statements contained in this press
release constitute "forward looking statements" within the meaning
of the U.S. Private Securities Litigation Reform Act of 1995. These
forward looking statements represent Venator's expectations or
beliefs concerning future events, and it is possible that the
expected results described in this press release will not be
achieved. These forward looking statements are subject to risks,
uncertainties and other factors, many of which are outside of
Venator's control, that could cause actual results to differ
materially from the results discussed in the forward looking
statements, including the impacts and duration of the global
outbreak of the Coronavirus Disease 2019 pandemic on the global
economy and all aspects of our business, including our employees,
customers, suppliers, partners, results of operations, financial
condition and liquidity, global economic conditions, our ability to
maintain sufficient working capital, our ability to access capital
markets on favorable terms, our ability to transfer business from
our Pori, Finland manufacturing
facility to other sites in our manufacturing network, the costs
associated with such transfer and the closure of our Pori facility,
our ability to realize financial and operational benefits from our
business improvement plans and initiatives, changes in raw material
and energy prices, or interruptions in raw materials and energy,
industry production capacity and operating rates, the supply demand
balance for our products and that of competing products, pricing
pressures, technological developments, legal claims by or against
us, changes in government regulations, including increased
manufacturing, labeling and waste disposal regulations and the
classification of TiO2 as a carcinogen in the EU,
the impacts of increasing climate change regulations, geopolitical
events, cyberattacks and public health crises.
Any forward looking statement speaks only as of the date on
which it is made, and, except as required by law, Venator does not
undertake any obligation to update or revise any forward looking
statement, whether as a result of new information, future events or
otherwise. New factors emerge from time to time, and it is not
possible for Venator to predict all such factors. When considering
these forward looking statements, you should keep in mind the risk
factors and other cautionary statements in Venator's filings with
the US Securities and Exchange Commission, including Venator's
Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q. The
risk factors and other factors noted therein could cause its actual
results to differ materially from those contained in any forward
looking statement.
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SOURCE Venator Materials PLC