WILMINGTON, Del., Aug. 2, 2018 /PRNewswire/ --
S econd Quarter 2018 Highlights
- Net Sales of $1.8 billion, up 14%
- Net Income of $281 million, up 75% with EPS of $1.53, up 82%
- Adjusted Net Income of $314 million, up 91% with Adjusted EPS of $1.71, up 99%
- Adjusted EBITDA of $497 million, up 38%
- Board authorized new $750 million share repurchase program and increased dividend to $0.25 per share
- Expect full-year 2018 Adjusted EBITDA in top end of range, reaffirmed three-year targets
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 2018.
"Our performance this quarter was truly a team effort, resulting in broad-based growth across our segments," said President and CEO Mark Vergnano. "Continued momentum in Opteon™ refrigerants adoption, increased price and sustained demand for our Fluoropolymers products, higher average global prices for Ti-Pure™ pigment, and demand for our Mining Solutions products led to double-digit growth across our key financial metrics."
Second quarter net sales rose 14 percent from the prior year quarter to $1.8 billion, driven by volume growth in Fluoroproducts and Chemical Solutions, and higher global average selling prices in Titanium Technologies and Fluoroproducts. Second quarter net income was $281 million, or $1.53 per diluted share, up 75 percent and 82 percent, respectively. Net income in the quarter reflects the impact of extinguishment of debt and refinancing actions taken during the second quarter of 2018. Adjusted EBITDA for the second quarter 2018 increased 38 percent to $497 million. This improvement was primarily a result of increased sales partially offset by higher distribution and raw material costs.
Fluoroproducts
Fluoroproducts segment sales in the second quarter were $801 million, a 13 percent increase in comparison to the prior-year quarter. Volume increased versus last year's second quarter driven by continued Opteon™ refrigerant adoption. Price was higher on a year-over-year basis across all businesses. Segment Adjusted EBITDA of $230 million improved 17 percent versus the prior-year quarter of $197 million, a result of Opteon™ adoption and improved prices, partially offset by raw material costs, distribution expenses, and process water treatment costs.
Chemical Solutions
In the second quarter 2018, Chemical Solutions segment sales were $153 million, a 3 percent increase versus the prior-year quarter. Improved demand in comparison to last year's second quarter resulted in higher volume across the segment. Price impact was modestly lower in the quarter due to mix. Second quarter 2018 segment Adjusted EBITDA was $16 million, versus $7 million in the prior year quarter, reflecting increased sales and lower costs.
Titanium Technologies
Titanium Technologies segment sales in the second quarter were $862 million, an 18 percent increase versus the prior-year quarter. Volume was slightly lower in comparison to robust demand in the prior-year quarter. Global average selling prices increased in comparison to last year's second quarter. Segment Adjusted EBITDA was $295 million, a 53 percent year-over-year increase versus last year's second quarter of $193 million. Results were driven by higher global average selling prices for Ti-Pure™ titanium dioxide, partially offset by higher raw material costs and increased distribution costs.
Corporate and Other
Corporate and Other represented a $44 million offset to Adjusted EBITDA. Expenses in the second quarter of 2018 increased $8 million versus the prior-year quarter, primarily related to ongoing environmental remediation efforts and legal costs.
The company realized an effective tax rate of approximately 13 percent in the quarter. The company expects its effective tax rate for the full-year 2018 to be approximately 20 percent, reflecting the company's anticipated geographic mix of earnings and US tax reform impacts.
Liquidity
As of June 30, 2018, gross consolidated debt was $4.0 billion. Debt, net of $1.2 billion cash, was $2.8 billion, resulting in a net debt-to-EBITDA ratio of approximately 1.6 times on a trailing twelve-month basis.
During the quarter, Chemours raised €450 million via senior unsecured notes. The proceeds from these notes, plus cash on hand, were used to redeem existing Euro 2023 notes as well as $250 million of USD 2023 notes. The redemption of the Euro 2023 and partial redemption of the USD 2023 notes resulted in a debt extinguishment payment of approximately $29 million. These transactions are expected to reduce interest expense by approximately $16 million annually. Including the amended and restated credit facility announced in the previous quarter, the transactions are expected to reduce interest expense by approximately $28 million annually.
Operating cash flow for the second quarter was $343 million, versus $184 million in the previous year quarter. Working capital for the quarter was a use of $44 million of cash, consistent with normal seasonal patterns.
Capital expenditures for the second quarter 2018 were $126 million, versus $69 million in last year's second quarter. The company expects its capital expenditures for the full-year 2018 to be within a range of $475 to $525 million. Free Cash Flow for the second quarter was $217 million, an 89 percent improvement versus the previous-year quarter of $115 million.
In the first half of 2018, cash provided by operating activities was $539 million, versus $225 million in the first half of 2017. Year-to-date 2018 Free Cash Flow of $311 million represents a $224 million improvement versus the prior-year's first half.
Capital Allocation
The Board of Directors of Chemours declared a quarterly cash dividend of $0.25 per share on the company's common stock for the third quarter of 2018, a 47 percent increase per share from the previous level of $0.17 per share. The dividend will be paid on September 14, 2018 to stockholders of record as of the close of business on August 17, 2018.
The company also announced today that the Chemours Board of Directors authorized a $750 million share repurchase plan. The authorization extends through the end of 2020. Repurchases may be made at management's discretion, subject to market conditions and other factors, and may be suspended or discontinued at any time.
"Chemours is committed to the capital allocation priorities set forth at our December investor day, including returning higher levels of cash to shareholders," said Chemours CFO Mark Newman. "Following our increased first quarter 2018 dividend, we are continuing to grow our quarterly dividend to a level that we believe is not only sustainable, but provides a platform to reward shareholders in line with our earnings growth over time. Paired with our new share repurchase authorization, we now expect to return the majority of our Free Cash Flow generation to shareholders through 2020."
Outlook
Vergnano concluded, "Given our strong first half results and visibility into the rest of 2018, we believe that earnings will be in the top end of our previously announced range. As we look over the longer term, we remain confident in our ability to meet or exceed our three-year financial targets, supported by our commitment to Ti-Pure™ Value Stabilization, assisting our fluorochemicals customers through the transition to Opteon™ refrigerants, and further investment in application development to meet growing needs for fluoropolymers. The Board of Directors authorization of an increased dividend and new share repurchase plan underscore our expectations for long-term growth."
Conference Call
As previously announced, Chemours will hold a conference call and webcast on Friday, August 3, 2018 at 8:30 AM EDT. The webcast and additional presentation materials can be accessed by visiting the Events & Presentations page of Chemours' investor website, investors.chemours.com. A webcast replay of the conference call will be available on the Chemours investor website.
About The Chemours Company
The Chemours Company (NYSE: CC) helps create a colorful, capable and cleaner world through the power of chemistry. Chemours is a global leader in fluoroproducts, chemical solutions, and titanium technologies, providing its customers with solutions in a wide range of industries with market-defining products, application expertise and chemistry-based innovations. Chemours ingredients are found in refrigeration and air conditioning, mining and general industrial manufacturing, plastics and coatings. Our flagship products include prominent brands such as Teflon™, Ti-Pure™, Krytox™, Viton™, Opteon™, Freon™ and Nafion™. Chemours has approximately 7,000 employees and 26 manufacturing sites serving approximately 4,000 customers in North America, Latin America, Asia-Pacific and Europe. Chemours is headquartered in Wilmington, Delaware and is listed on the NYSE under the symbol CC. For more information please visit chemours.com, or follow us on Twitter @Chemours, or LinkedIn.
Non-GAAP Financial Measures
We prepare our financial statements in accordance with Generally Accepted Accounting Principles (GAAP). Within this press release, we may make reference to Adjusted Net Income (Loss), Adjusted EPS, Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow, Return on Invested Capital (ROIC) 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, ROIC 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 and prospects, capital investments and projects, plans for dividends or share repurchases, sufficiency or longevity of intellectual property protection, cost savings targets, plans to increase profitability and growth, our ability to make acquisitions, integrate acquired businesses or assets into our operations, and achieve anticipated synergies or cost savings, and our outlook for net sales, Adjusted EBITDA, Adjusted EPS, Free Cash Flow, and Return on Invested Capital (ROIC), all of which are subject to substantial risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Forward-looking statements are based on certain assumptions and expectations of future events that may not be accurate or realized. These statements are not guarantees of future performance. Forward-looking statements also involve risks and uncertainties that are beyond Chemours' control. Additionally, there may be other risks and uncertainties that Chemours is unable to identify at this time or that Chemours does not currently expect to have a material impact on its business. Factors that could cause or contribute to these differences include the risks, uncertainties and other factors discussed in our filings with the U.S. Securities and Exchange Commission, including in our Annual Report on Form 10-K for the year ended December 31, 2017. Chemours assumes no obligation to revise or update any forward-looking statement for any reason, except as required by law.
CONTACT:
NEWS MEDIA
Alvenia Scarborough
Sr. Director of Corporate Communications and Brand Marketing
+1.302.773.4507
[email protected]
INVESTORS
Jonathan Lock
VP, Corporate Development and Investor Relations
+1.302.773.2263
[email protected]
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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, |
|
||||||||||
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
||||
|
Net sales |
|
$ |
1,816 |
|
|
$ |
1,588 |
|
|
$ |
3,546 |
|
|
$ |
3,024 |
|
|
Cost of goods sold |
|
|
1,259 |
|
|
|
1,150 |
|
|
|
2,452 |
|
|
|
2,230 |
|
|
Gross profit |
|
|
557 |
|
|
|
438 |
|
|
|
1,094 |
|
|
|
794 |
|
|
Selling, general, and administrative expense |
|
|
161 |
|
|
|
164 |
|
|
|
304 |
|
|
|
313 |
|
|
Research and development expense |
|
|
20 |
|
|
|
21 |
|
|
|
40 |
|
|
|
41 |
|
|
Restructuring, asset-related, and other charges |
|
|
10 |
|
|
|
6 |
|
|
|
20 |
|
|
|
18 |
|
|
Total other operating expenses |
|
|
191 |
|
|
|
191 |
|
|
|
364 |
|
|
|
372 |
|
|
Equity in earnings of affiliates |
|
|
10 |
|
|
|
10 |
|
|
|
22 |
|
|
|
17 |
|
|
Interest expense, net |
|
|
(48) |
|
|
|
(54) |
|
|
|
(100) |
|
|
|
(105) |
|
|
Loss on extinguishment of debt |
|
|
(38) |
|
|
|
(1) |
|
|
|
(38) |
|
|
|
(1) |
|
|
Other income, net |
|
|
33 |
|
|
|
23 |
|
|
|
90 |
|
|
|
66 |
|
|
Income before income taxes |
|
|
323 |
|
|
|
225 |
|
|
|
704 |
|
|
|
399 |
|
|
Provision for income taxes |
|
|
41 |
|
|
|
64 |
|
|
|
125 |
|
|
|
87 |
|
|
Net income |
|
|
282 |
|
|
|
161 |
|
|
|
579 |
|
|
|
312 |
|
|
Less: Net income attributable to non-controlling interests |
|
|
1 |
|
|
|
— |
|
|
|
1 |
|
|
|
1 |
|
|
Net income attributable to Chemours |
|
$ |
281 |
|
|
$ |
161 |
|
|
$ |
578 |
|
|
$ |
311 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share of common stock |
|
$ |
1.58 |
|
|
$ |
0.87 |
|
|
$ |
3.21 |
|
|
$ |
1.69 |
|
|
Diluted earnings per share of common stock |
|
|
1.53 |
|
|
|
0.84 |
|
|
|
3.11 |
|
|
|
1.64 |
|
|
Dividends per share of common stock |
|
|
0.17 |
|
|
|
0.03 |
|
|
|
0.17 |
|
|
|
0.06 |
|
|
The Chemours Company |
||||||||
|
Interim Consolidated Balance Sheets |
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|
(Dollars in millions, except per share amounts) |
||||||||
|
|
||||||||
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
June 30, 2018 |
|
|
December 31, 2017 |
|
||
|
Assets |
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
1,217 |
|
|
$ |
1,556 |
|
|
Accounts and notes receivable, net |
|
|
1,095 |
|
|
|
919 |
|
|
Inventories |
|
|
1,013 |
|
|
|
935 |
|
|
Prepaid expenses and other |
|
|
72 |
|
|
|
83 |
|
|
Total current assets |
|
|
3,397 |
|
|
|
3,493 |
|
|
Property, plant, and equipment |
|
|
8,718 |
|
|
|
8,511 |
|
|
Less: Accumulated depreciation |
|
|
(5,613) |
|
|
|
(5,503) |
|
|
Property, plant, and equipment, net |
|
|
3,105 |
|
|
|
3,008 |
|
|
Goodwill and other intangible assets, net |
|
|
189 |
|
|
|
166 |
|
|
Investments in affiliates |
|
|
172 |
|
|
|
173 |
|
|
Other assets |
|
|
475 |
|
|
|
453 |
|
|
Total assets |
|
$ |
7,338 |
|
|
$ |
7,293 |
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
1,175 |
|
|
$ |
1,075 |
|
|
Current maturities of long-term debt |
|
|
13 |
|
|
|
15 |
|
|
Other accrued liabilities |
|
|
434 |
|
|
|
558 |
|
|
Total current liabilities |
|
|
1,622 |
|
|
|
1,648 |
|
|
Long-term debt, net |
|
|
3,960 |
|
|
|
4,097 |
|
|
Deferred income taxes |
|
|
255 |
|
|
|
208 |
|
|
Other liabilities |
|
|
476 |
|
|
|
475 |
|
|
Total liabilities |
|
|
6,313 |
|
|
|
6,428 |
|
|
Commitments and contingent liabilities |
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
|
|
Common stock (par value $0.01 per share; 810,000,000 shares authorized; |
|
|
2 |
|
|
|
2 |
|
|
Treasury stock at cost (10,073,236 shares at June 30, 2018; 2,386,406 shares at December 31, 2017) |
|
|
(500) |
|
|
|
(116) |
|
|
Additional paid-in capital |
|
|
859 |
|
|
|
837 |
|
|
Retained earnings |
|
|
1,127 |
|
|
|
579 |
|
|
Accumulated other comprehensive loss |
|
|
(469) |
|
|
|
(442) |
|
|
Total Chemours stockholders' equity |
|
|
1,019 |
|
|
|
860 |
|
|
Non-controlling interests |
|
|
6 |
|
|
|
5 |
|
|
Total equity |
|
|
1,025 |
|
|
|
865 |
|
|
Total liabilities and equity |
|
$ |
7,338 |
|
|
$ |
7,293 |
|
|
The Chemours Company |
||||||||
|
Interim Consolidated Statements of Cash Flows (Unaudited) |
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|
(Dollars in millions) |
||||||||
|
|
||||||||
|
|
|
Six Months Ended June 30, |
|
|||||
|
|
|
2018 |
|
|
2017 |
|
||
|
Cash flows from operating activities |
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
579 |
|
|
$ |
312 |
|
|
Adjustments to reconcile net income to cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
142 |
|
|
|
142 |
|
|
Asset-related charges |
|
|
— |
|
|
|
2 |
|
|
Gain on sale of assets and businesses |
|
|
(45) |
|
|
|
(14) |
|
|
Equity in earnings of affiliates, net |
|
|
6 |
|
|
|
(17) |
|
|
Loss on extinguishment of debt |
|
|
38 |
|
|
|
1 |
|
|
Amortization of debt issuance costs and issue discounts |
|
|
7 |
|
|
|
7 |
|
|
Deferred tax provision |
|
|
38 |
|
|
|
38 |
|
|
Other operating charges and credits, net |
|
|
10 |
|
|
|
13 |
|
|
Decrease (increase) in operating assets: |
|
|
|
|
|
|
|
|
|
Accounts and notes receivable, net |
|
|
(175) |
|
|
|
(170) |
|
|
Inventories and other operating assets |
|
|
(96) |
|
|
|
(43) |
|
|
(Decrease) increase in operating liabilities: |
|
|
|
|
|
|
|
|
|
Accounts payable and other operating liabilities |
|
|
35 |
|
|
|
(46) |
|
|
Cash provided by operating activities |
|
|
539 |
|
|
|
225 |
|
|
Cash flows from investing activities |
|
|
|
|
|
|
|
|
|
Purchases of property, plant, and equipment |
|
|
(228) |
|
|
|
(138) |
|
|
Acquisition of business, net |
|
|
(37) |
|
|
|
— |
|
|
Proceeds from sale of assets and businesses, net |
|
|
41 |
|
|
|
38 |
|
|
Foreign exchange contract settlements, net |
|
|
(6) |
|
|
|
2 |
|
|
Cash used for investing activities |
|
|
(230) |
|
|
|
(98) |
|
|
Cash flows from financing activities |
|
|
|
|
|
|
|
|
|
Proceeds from issuance of debt, net |
|
|
520 |
|
|
|
494 |
|
|
Debt repayments |
|
|
(672) |
|
|
|
(20) |
|
|
Payments related to extinguishment of debt |
|
|
(29) |
|
|
|
(1) |
|
|
Payments of debt issuance costs |
|
|
(12) |
|
|
|
(6) |
|
|
Purchases of treasury stock, at cost |
|
|
(394) |
|
|
|
— |
|
|
Proceeds from exercised stock options, net |
|
|
13 |
|
|
|
26 |
|
|
Payments related to tax withholdings on vested restricted stock units |
|
|
(6) |
|
|
|
— |
|
|
Payments of dividends |
|
|
(61) |
|
|
|
(11) |
|
|
Cash (used for) provided by financing activities |
|
|
(641) |
|
|
|
482 |
|
|
Effect of exchange rate changes on cash and cash equivalents |
|
|
(7) |
|
|
|
18 |
|
|
(Decrease) increase in cash and cash equivalents |
|
|
(339) |
|
|
|
627 |
|
|
Cash and cash equivalents at January 1, |
|
|
1,556 |
|
|
|
902 |
|
|
Cash and cash equivalents at June 30, |
|
$ |
1,217 |
|
|
$ |
1,529 |
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash flows information |
|
|
|
|
|
|
|
|
|
Non-cash investing and financing activities: |
|
|
|
|
|
|
|
|
|
Changes in property, plant, and equipment included in accounts payable |
|
$ |
(1) |
|
|
$ |
(5) |
|
|
Obligations incurred under build-to-suit lease arrangement |
|
|
26 |
|
|
|
— |
|
|
The Chemours Company |
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|
Segment Financial and Operating Data (Unaudited) |
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|
(Dollars in millions) |
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Segment Net Sales |
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|
|
|
|
|
|
|
|
|
|
|
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|
|
Three Months |
|
|
|
|
|
|||
|
|
Three Months Ended |
|
|
Year-Over-Year |
|
|
Ended |
|
|
Sequential |
||||||||||||||
|
|
June 30, |
|
|
Increase / |
|
|
March 31, |
|
|
Increase / |
||||||||||||||
|
|
2018 |
|
|
2017 |
|
|
(Decrease) |
|
|
2018 |
|
|
(Decrease) |
|||||||||||
|
Fluoroproducts |
$ |
|
801 |
|
|
$ |
|
710 |
|
|
$ |
|
91 |
|
|
$ |
|
732 |
|
|
$ |
|
69 |
|
|
Chemical Solutions |
|
|
153 |
|
|
|
|
149 |
|
|
|
|
4 |
|
|
|
|
144 |
|
|
|
|
9 |
|
|
Titanium Technologies |
|
|
862 |
|
|
|
|
729 |
|
|
|
|
133 |
|
|
|
|
854 |
|
|
|
|
8 |
|
|
Total Net Sales |
$ |
|
1,816 |
|
|
$ |
|
1,588 |
|
|
$ |
|
228 |
|
|
$ |
|
1,730 |
|
|
$ |
|
86 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Segment Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months |
|
|
|
|
|
|||||
|
|
Three Months Ended |
|
|
Year-Over-Year |
|
|
Ended |
|
|
Sequential |
||||||||||||||
|
|
June 30, |
|
|
Increase / |
|
|
March 31, |
|
|
Increase / |
||||||||||||||
|
|
2018 |
|
|
2017 |
|
|
(Decrease) |
|
|
2018 |
|
|
(Decrease) |
|||||||||||
|
Fluoroproducts |
$ |
|
230 |
|
|
$ |
|
197 |
|
|
$ |
|
33 |
|
|
$ |
|
206 |
|
|
$ |
|
24 |
|
|
Chemical Solutions |
|
|
16 |
|
|
|
|
7 |
|
|
|
|
9 |
|
|
|
|
11 |
|
|
|
|
5 |
|
|
Titanium Technologies |
|
|
295 |
|
|
|
|
193 |
|
|
|
|
102 |
|
|
|
|
294 |
|
|
|
|
1 |
|
|
Corporate and Other |
|
|
(44) |
|
|
|
|
(36) |
|
|
|
|
(8) |
|
|
|
|
(43) |
|
|
|
|
(1) |
|
|
Total Adjusted EBITDA |
$ |
|
497 |
|
|
$ |
|
361 |
|
|
$ |
|
136 |
|
|
$ |
|
468 |
|
|
$ |
|
29 |
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Adjusted EBITDA Margin |
27% |
|
|
23% |
|
|
|
|
|
27% |
|
|
|
|||||||||||
|
Quarterly Change in Net Sales from June 30, 2017 |
|
|
|
|
|
|
||||||||||||||
|
|
|
Percentage |
|
Percentage Change Due To |
|
|||||||||||||||
|
|
June 30, 2018 Net Sales |
|
|
Change vs. June 30, 2017 |
|
Price |
|
Volume |
|
Currency |
|
Portfolio / |
|
|||||||
|
Total Company |
$ |
|
1,816 |
|
|
|
14 |
% |
|
9 |
% |
|
3 |
% |
|
2 |
% |
|
— |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fluoroproducts |
$ |
|
801 |
|
|
|
13 |
% |
|
4 |
% |
|
7 |
% |
|
2 |
% |
|
— |
% |
|
Chemical Solutions |
|
|
153 |
|
|
|
3 |
% |
|
(1)% |
|
|
3 |
% |
|
1 |
% |
|
— |
% |
|
Titanium Technologies |
|
|
862 |
|
|
|
18 |
% |
|
16 |
% |
|
(1)% |
|
|
3 |
% |
|
— |
% |
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||
|
Quarterly Change in Net Sales from March 31, 2018 |
|
|
|
|
|
|
||||||||||||||
|
|
|
Percentage |
|
Percentage Change Due To |
|
|||||||||||||||
|
|
June 30, 2018 Net Sales |
|
|
Change vs. March 31, 2018 |
|
Price |
|
Volume |
|
Currency |
|
Portfolio / Other |
|
|||||||
|
Total Company |
$ |
|
1,816 |
|
|
|
5 |
% |
|
2 |
% |
|
3 |
% |
|
— |
% |
|
— |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fluoroproducts |
$ |
|
801 |
|
|
|
9 |
% |
|
2 |
% |
|
7 |
% |
|
— |
% |
|
— |
% |
|
Chemical Solutions |
|
|
153 |
|
|
|
6 |
% |
|
— |
% |
|
6 |
% |
|
— |
% |
|
— |
% |
|
Titanium Technologies |
|
|
862 |
|
|
|
1 |
% |
|
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, |
|||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|||||||||||||||||||
|
|
|
June 30, |
|
|
March 31, |
|
|
June 30, |
|
||||||||||||||||
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2018 |
|
|
2017 |
|
||||||||||
|
Net income attributable to Chemours |
|
$ |
|
281 |
|
|
$ |
|
161 |
|
|
$ |
297 |
|
|
$ |
|
578 |
|
|
$ |
|
311 |
|
|
|
Non-operating pension and other post-retirement |
|
|
|
(7) |
|
|
|
|
(10) |
|
|
|
|
(7) |
|
|
|
|
(14) |
|
|
|
|
(18) |
|
|
Exchange gains, net |
|
|
|
(2) |
|
|
|
|
(2) |
|
|
|
|
— |
|
|
|
|
(2) |
|
|
|
|
(7) |
|
|
Restructuring and other charges |
|
|
|
9 |
|
|
|
|
6 |
|
|
|
|
10 |
|
|
|
|
19 |
|
|
|
|
18 |
|
|
Asset-related and other charges |
|
|
|
1 |
|
|
|
|
2 |
|
|
|
|
— |
|
|
|
|
1 |
|
|
|
|
2 |
|
|
Loss on extinguishment of debt |
|
|
|
38 |
|
|
|
|
1 |
|
|
|
|
— |
|
|
|
|
38 |
|
|
|
|
1 |
|
|
(Gain) loss on sale of assets or businesses (1) |
|
|
|
(3) |
|
|
|
|
2 |
|
|
|
|
(42) |
|
|
|
|
(45) |
|
|
|
|
(14) |
|
|
Transaction costs (2) |
|
|
|
9 |
|
|
|
|
2 |
|
|
|
|
— |
|
|
|
|
9 |
|
|
|
|
2 |
|
|
Legal and other charges (3,6) |
|
|
|
10 |
|
|
|
|
10 |
|
|
|
|
4 |
|
|
|
|
14 |
|
|
|
|
17 |
|
|
Adjustments made to income taxes (4,7) |
|
|
|
(8) |
|
|
|
|
(3) |
|
|
|
|
(5) |
|
|
|
|
(13) |
|
|
|
|
(13) |
|
|
(Benefit from) provision for income taxes relating to |
|
|
|
(14) |
|
|
|
|
(5) |
|
|
|
|
9 |
|
|
|
|
(5) |
|
|
|
|
(4) |
|
|
Adjusted Net Income |
|
|
|
314 |
|
|
|
|
164 |
|
|
|
|
266 |
|
|
|
|
580 |
|
|
|
|
295 |
|
|
Net income attributable to non-controlling interests |
|
|
|
1 |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
1 |
|
|
|
|
1 |
|
|
Interest expense, net |
|
|
|
48 |
|
|
|
|
54 |
|
|
|
|
52 |
|
|
|
|
100 |
|
|
|
|
105 |
|
|
All remaining depreciation and amortization (6) |
|
|
|
71 |
|
|
|
|
71 |
|
|
|
|
70 |
|
|
|
|
141 |
|
|
|
|
142 |
|
|
All remaining provision for income taxes (7) |
|
|
|
63 |
|
|
|
|
72 |
|
|
|
|
80 |
|
|
|
|
143 |
|
|
|
|
104 |
|
|
Adjusted EBITDA |
|
$ |
|
497 |
|
|
$ |
|
361 |
|
|
$ |
|
468 |
|
|
$ |
|
965 |
|
|
$ |
|
647 |
|
|
(1) |
For the three months ended June 30, 2018, gain on sale includes a $3 gain associated with the sale of the Company's East Chicago, Indiana site. For the six months |
|
|
|
|
(2) |
Includes costs associated with the Company's debt transactions, as well as accounting, legal, and bankers' transaction costs incurred in connection with the |
|
|
|
|
(3) |
Includes litigation settlements, PFOA drinking water treatment accruals, acquisition-related intangible asset amortization, and other charges. |
|
|
|
|
(4) |
Includes the removal of certain discrete income tax amounts within the Company's provision for income taxes. For the three and six months ended June 30, 2018, |
|
|
|
|
(5) |
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 include |
|
|
|
|
(6) |
The total amount of depreciation and amortization, including acquisition-related intangible asset amortization included in legal and other charges above, reconciles |
|
|
|
|
(7) |
The total provision for income taxes reconciles to the amount reported in the consolidated statements of operations for the three and six months ended June 30, |
|
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 |
|||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||
|
|
|
Three Months Ended |
|
|
Six Months Ended |
||||||||||||||||||||
|
|
|
June 30, |
|
|
March 31, |
|
|
June 30, |
|||||||||||||||||
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2018 |
|
|
2017 |
|||||||||||
|
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net income attributable to Chemours |
|
$ |
|
281 |
|
|
$ |
|
161 |
|
|
$ |
|
297 |
|
|
$ |
|
578 |
|
|
$ |
|
311 |
|
|
Adjusted Net Income |
|
|
|
314 |
|
|
|
|
164 |
|
|
|
|
266 |
|
|
|
|
580 |
|
|
|
|
295 |
|
|
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Weighted-average number of common shares |
|
|
|
177,798,484 |
|
|
|
|
185,069,436 |
|
|
|
|
182,069,982 |
|
|
|
|
179,922,433 |
|
|
|
|
184,243,461 |
|
|
Dilutive effect of the Company's employee |
|
|
|
6,022,757 |
|
|
|
|
6,057,203 |
|
|
|
|
6,263,215 |
|
|
|
|
6,142,986 |
|
|
|
|
5,899,412 |
|
|
Weighted-average number of common shares |
|
|
|
183,821,241 |
|
|
|
|
191,126,639 |
|
|
|
|
188,333,197 |
|
|
|
|
186,065,419 |
|
|
|
|
190,142,873 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Basic earnings per share of common stock |
|
$ |
|
1.58 |
|
|
$ |
|
0.87 |
|
|
$ |
|
1.63 |
|
|
$ |
|
3.21 |
|
|
$ |
|
1.69 |
|
|
Diluted earnings per share of common stock |
|
|
|
1.53 |
|
|
|
|
0.84 |
|
|
|
|
1.58 |
|
|
|
|
3.11 |
|
|
|
|
1.64 |
|
|
Adjusted basic earnings per share of common stock |
|
|
|
1.77 |
|
|
|
|
0.89 |
|
|
|
|
1.46 |
|
|
|
|
3.22 |
|
|
|
|
1.60 |
|
|
Adjusted diluted earnings per share of common stock |
|
|
|
1.71 |
|
|
|
|
0.86 |
|
|
|
|
1.41 |
|
|
|
|
3.12 |
|
|
|
|
1.55 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2018 Estimated Adjusted EBITDA and Estimated Adjusted EPS to Estimated GAAP Net Income Reconciliation (*) |
||||||||
|
|
||||||||
|
|
|
(Estimated) |
|
|||||
|
|
|
Year Ended December 31, 2018 |
|
|||||
|
|
|
Low |
|
|
High |
|
||
|
Net income attributable to Chemours |
|
$ |
985 |
|
|
$ |
1,080 |
|
|
Other adjustments |
|
|
(45) |
|
|
|
(45) |
|
|
Restructuring, asset-related, and other charges, net |
|
|
35 |
|
|
|
25 |
|
|
Provision for income taxes relating to reconciling items (1) |
|
|
5 |
|
|
|
5 |
|
|
Adjusted Net Income |
|
|
980 |
|
|
|
1,065 |
|
|
Interest expense, net |
|
|
220 |
|
|
|
220 |
|
|
Depreciation and amortization |
|
|
280 |
|
|
|
280 |
|
|
All remaining provision for income taxes |
|
|
295 |
|
|
|
285 |
|
|
Adjusted EBITDA |
|
$ |
1,775 |
|
|
$ |
1,850 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding - basic (2) |
|
|
179,000,000 |
|
|
|
179,000,000 |
|
|
Dilutive effect of the Company's employee compensation plans (2) |
|
|
6,000,000 |
|
|
|
6,000,000 |
|
|
Weighted average number of common shares outstanding - diluted (2) |
|
|
185,000,000 |
|
|
|
185,000,000 |
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share of common stock |
|
$ |
5.50 |
|
|
$ |
6.03 |
|
|
Diluted earnings per share of common stock |
|
|
5.32 |
|
|
|
5.84 |
|
|
Adjusted basic earnings per share of common stock |
|
|
5.47 |
|
|
|
5.95 |
|
|
Adjusted diluted earnings per share of common stock |
|
|
5.30 |
|
|
|
5.76 |
|
|
(1) |
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 include |
|
|
|
|
(2) |
The Company's estimates for the weighted-average number of common shares outstanding - basic and diluted reflect results for the year ended December 31, 2017, |
|
|
|
|
(*) |
The Company's estimates reflect its current visibility and expectations of market factors, such as, but not limited to: currency movements, titanium dioxide prices, |
|
The Chemours Company |
|||||||||||||||||||||||||
|
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures (Unaudited) |
|||||||||||||||||||||||||
|
(Dollars in millions) |
|||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||
|
Free Cash Flows to GAAP Cash Flows 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 |
|||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|||||||||||||||||||
|
|
|
June 30, |
|
|
March 31, |
|
|
June 30, |
|
||||||||||||||||
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2018 |
|
|
2017 |
|
||||||||||
|
Cash provided by operating activities |
|
$ |
|
343 |
|
|
$ |
|
184 |
|
|
$ |
|
196 |
|
|
$ |
|
539 |
|
|
$ |
|
225 |
|
|
Less: Purchases of property, plant, and equipment |
|
|
|
(126) |
|
|
|
|
(69) |
|
|
|
|
(102) |
|
|
|
|
(228) |
|
|
|
|
(138) |
|
|
Free Cash Flows |
|
$ |
|
217 |
|
|
$ |
|
115 |
|
|
$ |
|
94 |
|
|
$ |
|
311 |
|
|
$ |
|
87 |
|
|
2018 Estimated Free Cash Flows to GAAP Cash Flows Provided by Operating Activities Reconciliation (*) |
||
|
|
|
|
|
|
|
(Estimated) |
|
|
|
Year Ended December 31, |
|
|
|
2018 |
|
Cash provided by operating activities |
|
> $1,225 |
|
Less: Purchases of property, plant, and equipment |
|
(525) - (475) |
|
Free Cash Flows |
|
> $700 |
|
(*) |
The Company's estimates reflect its current visibility and expectations of market factors, such as, but not limited to: currency movements, titanium dioxide prices, and |
|
|
||||||||
|
Return on Invested Capital Reconciliation |
||||||||
|
|
||||||||
|
Return on Invested Capital is defined as Adjusted EBITDA, less depreciation and amortization (Adjusted EBIT), divided by the average of |
||||||||
|
|
||||||||
|
|
|
Twelve Months Ended June 30, |
|
|||||
|
|
|
2018 |
|
|
2017 |
|
||
|
Adjusted EBITDA (1) |
|
$ |
1,740 |
|
|
$ |
1,153 |
|
|
Less: Depreciation and amortization (1) |
|
|
(273) |
|
|
|
(287) |
|
|
Adjusted EBIT |
|
|
1,467 |
|
|
|
866 |
|
|
|
|
|
|
|
|
|
|
|
|
Total debt |
|
|
3,973 |
|
|
|
4,070 |
|
|
Total equity |
|
|
1,025 |
|
|
|
572 |
|
|
Less: Cash and cash equivalents |
|
|
(1,217) |
|
|
|
(1,529) |
|
|
Invested capital, net |
|
$ |
3,781 |
|
|
$ |
3,113 |
|
|
|
|
|
|
|
|
|
|
|
|
Average invested capital (2) |
|
$ |
3,481 |
|
|
$ |
3,158 |
|
|
|
|
|
|
|
|
|
|
|
|
Return on Invested Capital |
|
|
42.1 |
% |
|
|
27.4 |
% |
|
(1) |
Based on amounts for the trailing 12 months ended June 30, 2018 and 2017. Reconciliations of Adjusted EBITDA to net income (loss) attributable to Chemours |
|
|
|
|
(2) |
Average invested capital is based on a five-quarter trailing average of invested capital, net. |
View original content:SOURCE The Chemours Company