CHARLOTTE, N.C.,
July 31,
2024 /PRNewswire/ -- Albemarle Corporation (NYSE:
ALB), a global leader in providing essential elements for mobility,
energy, connectivity and health, today announced its results for
the second quarter ended June 30,
2024.
Second-Quarter 2024 and Recent
Highlights
(Unless otherwise stated, all percentage
changes represent year-over-year comparisons)
- Net sales of $1.4 billion, as
lower pricing year-over-year was partly offset by Energy Storage
volume growth of 37% as new capacity additions ramp
- Net loss of ($188) million, or
($1.96) per diluted share
attributable to common shareholders, which included an after-tax
charge of $215 million related to
capital project asset write-offs and associated contract
cancellation costs
- Adjusted diluted EPS attributable to common shareholders of
$0.04
- Adjusted EBITDA of $386 million,
up sequentially, driven by higher equity income from increased
Talison JV sales volumes
- Cash from operations of $363
million, an increase of $289
million year-over-year, driven by higher Talison JV
dividends and working capital improvements
- Delivered more than $150 million
in productivity benefits; on track to exceed the company's
full-year restructuring and productivity target by 50%
- Maintaining full-year outlook considerations; notably, the
previously published $15/kg scenario
is expected to apply even assuming lower July market pricing
persists for the remainder of the year
- Initiating comprehensive review of cost and operating structure
to maintain competitive position, while addressing current
end-market realities, including immediate footprint changes at the
Kemerton, Australia site
"Our operational mindset continued to serve us well in the
second quarter as Albemarle progressed important organic growth
initiatives while taking actions to maintain our long-term
competitive position," said Kent
Masters, Albemarle's chairman and CEO. "We achieved the
first commercial sales of product from our Meishan conversion plant
and delivered more than $150 million
in productivity benefits. We are also maintaining our full-year
2024 corporate outlook considerations."
Masters continued, "Building on the progress already underway,
we are announcing a comprehensive review of our cost and operating
structure, beginning with immediate footprint actions at our
Kemerton site in Australia. The
review and steps underway will maintain Albemarle's competitive
position and ensure we execute with agility today and in the
future."
Announcement of Asset and Cost Actions and Initiation of
Review to Optimize Cost and Operating Structure
Albemarle announced today asset and cost actions designed to
enhance its long-term competitiveness as part of a comprehensive
review of its cost and operating structure. The review will help
ensure that Albemarle maintains its competitive position throughout
the cycle and is positioned for long-term value creation as it
navigates end-market challenges, primarily in the lithium value
chain. The asset and cost actions announced today include placing
Kemerton Train 2 in care and maintenance, stopping construction on
Kemerton Train 3, and focusing on optimizing and ramping Kemerton
Train 1. As a result, Albemarle expects to recognize a charge in
the range of $0.9-$1.1 billion as an exceptional item in the
company's third-quarter 2024 results.
Today's announcement builds on the proactive measures announced
by Albemarle in January 2024 to
re-phase its organic growth investments and optimize its cost
structure. Regarding those measures, in the second quarter,
Albemarle delivered more than $150
million in productivity and restructuring cost improvements
and is on track to exceed the company's initial target by
approximately 50%. During the second quarter of 2024, the company
recorded an after-tax charge of $215
million primarily related to stopping construction on
Kemerton Train 4 and other capital project asset write-offs and
associated contract cancellation costs.
Total Corporate Outlook Considerations
The company is maintaining its prior full-year outlook
considerations, which are based on observed lithium market price
scenarios. Notably, the previously published $15/kg range is expected to apply even when
assuming that lower July market pricing persists for the remainder
of the year, due to enterprise-wide cost improvements, strong
volume growth, higher shipments from the Talison JV, and Energy
Storage contract performance. These factors are expected to more
than offset lower pricing and a reduced Specialties outlook.
|
Total Corporate FY
2024E
Including Energy
Storage Scenarios
|
|
Observed market price
case(a)
|
Recent
pricing
|
Q4 2023
average
|
H2 2023
average
|
|
Average lithium market
price ($/kg LCE)(a)
|
$12-15
|
~$20
|
~$25
|
|
Net sales
|
$5.5 - $6.2
billion
|
$6.1 - $6.8
billion
|
$6.9 - $7.6
billion
|
|
Adjusted
EBITDA(b)(c)
|
$0.9 - $1.2
billion
|
$1.6 - $1.8
billion
|
$2.3 - $2.6
billion
|
|
Weighted-average common
shares outstanding
(diluted)(d)
|
~118 million
|
~118 million
|
135 - 139
million
|
|
|
|
(a)
|
Price represents blend
of relevant Asia and China market indices for the periods
referenced.
|
|
(b)
|
The company does not
provide a reconciliation of forward-looking non-GAAP financial
measures to the most directly comparable financial measures
calculated and reported in accordance with GAAP, as the company is
unable to estimate significant non-recurring or unusual items
without unreasonable effort. See "Additional Information regarding
Non-GAAP Measures" for more information.
|
|
(c)
|
Presented under updated
adjusted EBITDA definition as of 2024. FY23 adjusted EBITDA under
updated definition would be $3.5B. See Non-GAAP Reconciliations for
further details.
|
|
(d)
|
Each quarter, Albemarle
will report the more dilutive of either: 1) adding the underlying
shares in the mandatory to the share count or 2) reducing
Albemarle's net income to common shareholders by the mandatory
dividend. The 20-day volume-weighted average common share price
will be used in determining the underlying shares to be added to
the share count.
|
2024 Other Corporate Outlook Considerations
The company is reducing its Specialties adjusted EBITDA outlook
due to a slower than expected market rebound and higher logistics
costs related to the ongoing conflict in the Middle East. Capital expenditures are now
expected to be at the high-end of $1.7 to $1.8
billion related to timing of capital spending. Depreciation
and amortization reflects a tighter range in light of year-to-date
expense. Lower expected corporate costs reflect favorable interest
income and on-going cost and productivity improvements. Lower
interest and financing expenses reflect the repayment of short-term
debt. Below are outlook considerations updated from our first
quarter earnings release issued on May 1,
2024. All other corporate outlook considerations are
unchanged.
|
Other FY 2024E
Considerations
|
|
Specialties adj.
EBITDA
|
$210 - $260
million
|
|
Capital
expenditures
|
$1.7 - $1.8
billion
|
|
Depreciation and
amortization
|
$580 - $630
million
|
|
Corporate costs
(excluding FX)
|
$60 - $90
million
|
|
Interest and financing
expenses
|
$140 - $170
million
|
Second Quarter 2024 Results
|
In millions, except
per share amounts
|
Q2
2024
|
|
Q2
2023
|
|
$
Change
|
|
%
Change
|
|
Net sales
|
$
1,430.4
|
|
$
2,370.2
|
|
$ (939.8)
|
|
(39.7) %
|
|
Net (loss) income
attributable to Albemarle Corporation
|
$ (188.2)
|
|
$
650.0
|
|
$ (838.2)
|
|
(129.0) %
|
|
Adjusted
EBITDA(a)(b)
|
$
386.4
|
|
$
1,266.2
|
|
$ (879.9)
|
|
(69.5) %
|
|
Diluted (loss) earnings
per share attributable to common shareholders
|
$
(1.96)
|
|
$
5.52
|
|
$
(7.48)
|
|
(135.5) %
|
|
Non-recurring and other unusual items(a)
|
1.99
|
|
1.81
|
|
|
|
|
|
Adjusted diluted
earnings per share attributable to common
shareholders(a)(c)
|
$
0.04
|
|
$
7.33
|
|
$
(7.29)
|
|
(99.5) %
|
|
|
|
(a)
|
See Non-GAAP
Reconciliations for further details.
|
|
(b)
|
For comparability, 2023
figures presented under adjusted EBITDA definition that the company
adopted beginning in 2024.
|
|
(c)
|
Totals may not add due
to rounding.
|
Net sales for the second quarter of 2024 were $1.4 billion compared to $2.4 billion for the prior-year quarter, a
year-over-year decline of 40% driven primarily by lower pricing in
Energy Storage. Net loss attributable to Albemarle of ($188) million decreased by $838 million. During the second quarter of 2024,
we recorded a charge of $215 million
after income taxes related to capital project asset write-offs and
associated contract cancellation costs. Adjusted EBITDA of
$386 million declined by $880 million from the prior-year quarter
primarily due to margin compression and reduced equity earnings as
a result of lower lithium market pricing, which more than offset
favorable volume growth. Sequentially, adjusted EBITDA rose, driven
by higher equity income from increased sales volumes at the Talison
JV.
The effective income tax rate for the second quarter of 2024 was
6.2% compared to 25.5% in the same period of 2023. On an adjusted
basis, the effective income tax rates were (25.9)% and 12.9% for
the second quarter of 2024 and 2023, respectively, with the
decrease primarily due to changes in the geographic income mix and
the impact of a valuation allowance for losses in certain entities
in China.
Energy Storage Results
|
In
millions
|
Q2
2024
|
|
Q2
2023
|
|
$
Change
|
|
%
Change
|
|
Net Sales
|
$
830.1
|
|
$
1,763.1
|
|
$
(933.0)
|
|
(52.9) %
|
|
Adjusted
EBITDA
|
$
283.0
|
|
$
1,165.1
|
|
$
(882.1)
|
|
(75.7) %
|
Energy Storage net sales for the second quarter of 2024 were
$830 million, a decrease of
$933 million, or 53%, due to lower
pricing (-89%), which more than offset higher volumes (+37%)
related to the ramp of lithium projects, including the La Negra
expansion in Chile and the
processing plant in Qinzhou, China, and sales of chemical-grade spodumene.
Adjusted EBITDA of $283 million
decreased $882 million, driven by
margin compression from lower lithium market pricing and reduced
equity earnings as a result of lower pricing, which more than
offset favorable volume growth. Sequentially, adjusted EBITDA rose
$85 million, driven by higher equity
income from increased Talison JV sales volumes and further volume
ramp of new facilities.
Specialties Results
|
In
millions
|
Q2
2024
|
|
Q2
2023
|
|
$
Change
|
|
%
Change
|
|
Net Sales
|
$
334.6
|
|
$
371.3
|
|
$
(36.7)
|
|
(9.9) %
|
|
Adjusted
EBITDA
|
$
54.2
|
|
$
60.2
|
|
$
(6.0)
|
|
(10.0) %
|
Specialties net sales for the second quarter of 2024 were
$335 million, a decrease of
$37 million, or 10%, primarily due to
lower prices (-18%), which more than offset higher volumes (+9%).
Adjusted EBITDA of $54 million
decreased $6 million versus the
year-ago quarter. Net sales and adjusted EBITDA were sequentially
higher, driven by improved end-market demand and the absence of
planned and unplanned maintenance outages that impacted results in
the prior quarter.
Ketjen Results
|
In
millions
|
Q2
2024
|
|
Q2
2023
|
|
$
Change
|
|
%
Change
|
|
Net Sales
|
$
265.7
|
|
$
235.8
|
|
$
29.9
|
|
12.7 %
|
|
Adjusted
EBITDA
|
$
37.8
|
|
$
42.9
|
|
$
(5.0)
|
|
(11.8) %
|
Ketjen net sales of $266 million
for the second quarter of 2024 were up 13% compared to the
prior-year quarter due to higher volumes (+14%), partially offset
by lower prices (-1%), primarily from clean fuel technologies.
Adjusted EBITDA of $38 million
decreased $5 million as the
prior-year adjusted EBITDA included a one-time insurance claim
receipt.
Cash Flow and Capital Deployment
Second-quarter cash
from operations of $363 million
increased by $289 million versus the
prior year, driven by higher Talison JV dividends and working
capital improvements. Year-to-date cash from operations of
$461 million decreased $334 million versus the prior-year period, driven
by lower adjusted EBITDA and reduced dividends received from equity
investments, partially offset by inflows from working capital.
Year-to-date capital expenditures of $1.0
billion increased by $108
million versus the prior-year period due to the timing of
project spend. Capital expenditures for the full-year 2024 are now
expected to be at the high-end of $1.7
billion to $1.8 billion
related to timing of capital spending.
Balance Sheet and Liquidity
As of June 30, 2024,
Albemarle had estimated liquidity of approximately $3.5 billion, including $1.8 billion of cash and cash equivalents,
$1.5 billion available under its
revolver and $144 million available
under other credit lines. Total debt was $3.5 billion, representing a debt covenant net
debt to adjusted EBITDA of approximately 2.1 times.
Earnings Call
|
Date:
|
Thursday, August 1,
2024
|
|
Time:
|
8:00 AM Eastern
time
|
|
Dial-in
(U.S.):
|
1-800-590-8290
|
|
Dial-in
(International):
|
1-240-690-8800
|
|
Conference
ID:
|
ALBQ2
|
The company's earnings presentation and supporting material are
available on Albemarle's website at
https://investors.albemarle.com.
About Albemarle
Albemarle Corporation (NYSE: ALB) is a
global leader in transforming essential resources into critical
ingredients for mobility, energy, connectivity, and health. We
partner to pioneer new ways to move, power, connect and protect
with people and planet in mind. A reliable and high-quality global
supply of lithium and bromine allow us to deliver advanced
solutions for our customers. Learn more about how the people of
Albemarle are enabling a more resilient world at albemarle.com and
on X (formerly Twitter) @AlbemarleCorp.
Albemarle regularly posts information to www.albemarle.com,
including notification of events, news, financial performance,
investor presentations and webcasts, non-GAAP reconciliations,
Securities and Exchange Commission ("SEC") filings and other
information regarding the company, its businesses and the markets
it serves.
Forward-Looking Statements
This press release contains
statements concerning our expectations, anticipations and beliefs
regarding the future, which constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995. These forward-looking statements, which are based on
assumptions that we have made as of the date hereof and are subject
to known and unknown risks and uncertainties, often contain words
such as "anticipate," "believe," "estimate," "expect," "guidance,"
"intend," "may," "outlook," "scenario," "should," "would," and
"will". Forward-looking statements may include statements
regarding: our 2024 company and segment outlooks, including
expected market pricing of lithium and spodumene and other
underlying assumptions and outlook considerations; expected capital
expenditure amounts and the corresponding impact on cash flow;
market pricing of lithium carbonate equivalent and spodumene; plans
and expectations regarding other projects and activities, cost
reductions and accounting charges, and all other information
relating to matters that are not historical facts. Factors that
could cause Albemarle's actual results to differ materially from
the outlook expressed or implied in any forward-looking statement
include: changes in economic and business conditions; financial and
operating performance of customers; timing and magnitude of
customer orders; fluctuations in lithium market prices; production
volume shortfalls; increased competition; changes in product
demand; availability and cost of raw materials and energy;
technological change and development; fluctuations in foreign
currencies; changes in laws and government regulation; regulatory
actions, proceedings, claims or litigation; cyber-security
breaches, terrorist attacks, industrial accidents or natural
disasters; political unrest; changes in inflation or interest
rates; volatility in the debt and equity markets; acquisition and
divestiture transactions; timing and success of projects;
performance of Albemarle's partners in joint ventures and other
projects; changes in credit ratings; and the other factors detailed
from time to time in the reports Albemarle files with the SEC,
including those described under "Risk Factors" in Albemarle's most
recent Annual Report on Form 10-K and any subsequently filed
Quarterly Reports on Form 10-Q, which are filed with the SEC and
available on the investor section of Albemarle's website
(investors.albemarle.com) and on the SEC's website at www.sec.gov.
These forward-looking statements speak only as of the date of this
press release. Albemarle assumes no obligation to provide any
revisions to any forward-looking statements should circumstances
change, except as otherwise required by securities and other
applicable laws.
|
Albemarle Corporation and
Subsidiaries
|
|
Consolidated Statements
of (Loss) Income
|
|
(In Thousands Except
Per Share Amounts) (Unaudited)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Net sales
|
$ 1,430,385
|
|
$ 2,370,190
|
|
$ 2,791,121
|
|
$ 4,950,442
|
|
Cost of goods
sold
|
1,440,963
|
|
1,811,703
|
|
2,762,761
|
|
3,115,415
|
|
Gross (loss)
profit
|
(10,578)
|
|
558,487
|
|
28,360
|
|
1,835,027
|
|
Selling, general and
administrative expenses
|
168,948
|
|
397,070
|
|
346,660
|
|
551,376
|
|
Capital project asset
write-off
|
292,315
|
|
—
|
|
309,515
|
|
—
|
|
Research and
development expenses
|
20,770
|
|
21,419
|
|
44,302
|
|
41,890
|
|
Operating (loss)
profit
|
(492,611)
|
|
139,998
|
|
(672,117)
|
|
1,241,761
|
|
Interest and financing
expenses
|
(35,187)
|
|
(25,577)
|
|
(73,156)
|
|
(52,354)
|
|
Other income,
net
|
33,666
|
|
53,954
|
|
83,567
|
|
136,446
|
|
(Loss) income before
income taxes and equity in net income
of unconsolidated investments
|
(494,132)
|
|
168,375
|
|
(661,706)
|
|
1,325,853
|
|
Income tax (benefit)
expense
|
(30,660)
|
|
42,987
|
|
(34,381)
|
|
319,950
|
|
(Loss) income before
equity in net income of unconsolidated
investments
|
(463,472)
|
|
125,388
|
|
(627,325)
|
|
1,005,903
|
|
Equity in net income of
unconsolidated investments (net of
tax)
|
286,878
|
|
551,051
|
|
467,378
|
|
947,239
|
|
Net (loss)
income
|
(176,594)
|
|
676,439
|
|
(159,947)
|
|
1,953,142
|
|
Net income attributable
to noncontrolling interests
|
(11,604)
|
|
(26,396)
|
|
(25,803)
|
|
(64,519)
|
|
Net (loss) income
attributable to Albemarle Corporation
|
(188,198)
|
|
650,043
|
|
(185,750)
|
|
1,888,623
|
|
Mandatory convertible
preferred stock dividends
|
(41,688)
|
|
—
|
|
(53,272)
|
|
—
|
|
Net (loss) income
attributable to Albemarle Corporation
common shareholders
|
$
(229,886)
|
|
$
650,043
|
|
$
(239,022)
|
|
$ 1,888,623
|
|
Basic (loss) earnings
per share attributable to common
shareholders
|
$
(1.96)
|
|
$
5.54
|
|
$
(2.03)
|
|
$
16.10
|
|
Diluted (loss) earnings
per share attributable to common
shareholders
|
$
(1.96)
|
|
$
5.52
|
|
$
(2.03)
|
|
$
16.03
|
|
|
|
|
|
|
|
|
|
Weighted-average common
shares outstanding – basic
|
117,528
|
|
117,332
|
|
117,489
|
|
117,282
|
|
Weighted-average common
shares outstanding – diluted
|
117,528
|
|
117,769
|
|
117,489
|
|
117,805
|
|
Albemarle Corporation and
Subsidiaries
|
|
Condensed Consolidated
Balance Sheets
|
|
(In Thousands)
(Unaudited)
|
|
|
June
30,
|
|
December
31,
|
|
2024
|
|
2023
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
1,830,227
|
|
$
889,900
|
|
Trade accounts
receivable
|
785,553
|
|
1,213,160
|
|
Other accounts
receivable
|
412,181
|
|
509,097
|
|
Inventories
|
1,800,114
|
|
2,161,287
|
|
Other current
assets
|
397,630
|
|
443,475
|
|
Total current
assets
|
5,225,705
|
|
5,216,919
|
|
Property, plant and
equipment
|
12,788,646
|
|
12,233,757
|
|
Less accumulated
depreciation and amortization
|
2,951,614
|
|
2,738,553
|
|
Net property, plant
and equipment
|
9,837,032
|
|
9,495,204
|
|
Investments
|
1,160,674
|
|
1,369,855
|
|
Other assets
|
320,598
|
|
297,087
|
|
Goodwill
|
1,600,938
|
|
1,629,729
|
|
Other intangibles, net
of amortization
|
243,335
|
|
261,858
|
|
Total
assets
|
$ 18,388,282
|
|
$ 18,270,652
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts payable to
third parties
|
$
1,138,975
|
|
$
1,537,859
|
|
Accounts payable to
related parties
|
184,198
|
|
550,186
|
|
Accrued
expenses
|
508,334
|
|
544,835
|
|
Current portion of
long-term debt
|
3,213
|
|
625,761
|
|
Dividends
payable
|
60,668
|
|
46,666
|
|
Income taxes
payable
|
63,070
|
|
255,155
|
|
Total current
liabilities
|
1,958,458
|
|
3,560,462
|
|
Long-term
debt
|
3,519,504
|
|
3,541,002
|
|
Postretirement
benefits
|
25,925
|
|
26,247
|
|
Pension
benefits
|
141,627
|
|
150,312
|
|
Other noncurrent
liabilities
|
758,283
|
|
769,100
|
|
Deferred income
taxes
|
501,330
|
|
558,430
|
|
Commitments and
contingencies
|
|
|
|
|
Equity:
|
|
|
|
|
Albemarle Corporation
shareholders' equity:
|
|
|
|
|
Common
stock
|
1,175
|
|
1,174
|
|
Mandatory convertible
preferred stock
|
2,235,105
|
|
—
|
|
Additional paid-in
capital
|
2,969,851
|
|
2,952,517
|
|
Accumulated other
comprehensive loss
|
(637,551)
|
|
(528,526)
|
|
Retained
earnings
|
6,653,979
|
|
6,987,015
|
|
Total Albemarle
Corporation shareholders' equity
|
11,222,559
|
|
9,412,180
|
|
Noncontrolling
interests
|
260,596
|
|
252,919
|
|
Total
equity
|
11,483,155
|
|
9,665,099
|
|
Total liabilities and
equity
|
$ 18,388,282
|
|
$ 18,270,652
|
|
Albemarle Corporation and
Subsidiaries
|
|
Selected Consolidated
Cash Flow Data
|
|
(In Thousands)
(Unaudited)
|
|
|
Six Months
Ended
June
30,
|
|
2024
|
|
2023
|
|
Cash and cash
equivalents at beginning of year
|
$ 889,900
|
|
$
1,499,142
|
|
Cash flows from
operating activities:
|
|
|
|
|
Net (loss)
income
|
(159,947)
|
|
1,953,142
|
|
Adjustments to
reconcile net (loss) income to cash flows from operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
262,030
|
|
180,356
|
|
Non-cash capital
project assets write-off
|
276,013
|
|
—
|
|
Stock-based
compensation and other
|
15,439
|
|
20,017
|
|
Equity in net income
of unconsolidated investments (net of tax)
|
(467,378)
|
|
(947,239)
|
|
Dividends received
from unconsolidated investments and nonmarketable
securities
|
270,926
|
|
1,079,439
|
|
Pension and
postretirement expense
|
2,529
|
|
3,933
|
|
Pension and
postretirement contributions
|
(9,428)
|
|
(8,632)
|
|
Realized loss on
investments in marketable securities
|
33,746
|
|
—
|
|
Unrealized loss (gain)
on investments in marketable securities
|
23,777
|
|
(61,434)
|
|
Deferred income
taxes
|
(129,087)
|
|
(144,720)
|
|
Working capital
changes
|
460,937
|
|
(1,155,408)
|
|
Other, net
|
(118,711)
|
|
(124,767)
|
|
Net cash provided by
operating activities
|
460,846
|
|
794,687
|
|
Cash flows from
investing activities:
|
|
|
|
|
Acquisitions, net of
cash acquired
|
—
|
|
(8,240)
|
|
Capital
expenditures
|
(1,026,936)
|
|
(919,295)
|
|
Sales (purchases) of
marketable securities, net
|
82,578
|
|
(123,979)
|
|
Investments in equity
investments and nonmarketable securities
|
(148)
|
|
(1,192)
|
|
Net cash used in
investing activities
|
(944,506)
|
|
(1,052,706)
|
|
Cash flows from
financing activities:
|
|
|
|
|
Proceeds from issuance
of mandatory convertible preferred stock
|
2,236,750
|
|
—
|
|
Repayments of
long-term debt and credit agreements
|
(56,453)
|
|
—
|
|
Proceeds from
borrowings of long-term debt and credit agreements
|
56,453
|
|
300,000
|
|
Other debt repayments,
net
|
(627,390)
|
|
(1,500)
|
|
Dividends paid to
common shareholders
|
(93,916)
|
|
(93,317)
|
|
Dividends paid to
mandatory convertible preferred shareholders
|
(39,376)
|
|
—
|
|
Dividends paid to
noncontrolling interests
|
(18,137)
|
|
(53,145)
|
|
Proceeds from exercise
of stock options
|
86
|
|
81
|
|
Withholding taxes paid
on stock-based compensation award distributions
|
(10,677)
|
|
(24,910)
|
|
Other
|
(2,758)
|
|
—
|
|
Net cash provided by
financing activities
|
1,444,582
|
|
127,209
|
|
Net effect of foreign
exchange on cash and cash equivalents
|
(20,595)
|
|
231,406
|
|
Increase in cash and
cash equivalents
|
940,327
|
|
100,596
|
|
Cash and cash
equivalents at end of period
|
$
1,830,227
|
|
$
1,599,738
|
|
Albemarle Corporation and
Subsidiaries
|
|
Consolidated Summary of
Segment Results
|
|
(In Thousands)
(Unaudited)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Net
sales:
|
|
|
|
|
|
|
|
|
Energy
Storage
|
$
830,110
|
|
$ 1,763,065
|
|
$ 1,631,008
|
|
$ 3,706,747
|
|
Specialties
|
334,600
|
|
371,302
|
|
650,665
|
|
790,080
|
|
Ketjen
|
265,675
|
|
235,823
|
|
509,448
|
|
453,615
|
|
Total net
sales
|
$ 1,430,385
|
|
$ 2,370,190
|
|
$ 2,791,121
|
|
$ 4,950,442
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA:
|
|
|
|
|
|
|
|
|
Energy
Storage
|
$
282,979
|
|
$ 1,165,080
|
|
$
480,975
|
|
$ 2,732,772
|
|
Specialties
|
54,175
|
|
60,200
|
|
99,356
|
|
222,358
|
|
Ketjen
|
37,836
|
|
42,882
|
|
59,815
|
|
57,425
|
|
Total segment adjusted
EBITDA
|
374,990
|
|
1,268,162
|
|
640,146
|
|
3,012,555
|
|
Corporate
|
11,370
|
|
(1,920)
|
|
37,450
|
|
15,391
|
|
Total adjusted
EBITDA
|
$
386,360
|
|
$ 1,266,242
|
|
$
677,596
|
|
$ 3,027,946
|
See accompanying non-GAAP reconciliations below.
Additional Information regarding Non-GAAP Measures
It should be noted that adjusted net income attributable to
Albemarle Corporation, adjusted net income attributable to
Albemarle Corporation common shareholders, adjusted diluted
earnings per share attributable to common shareholders,
non-operating pension and other post-employment benefit ("OPEB")
items per diluted share, non-recurring and other unusual items per
diluted share, adjusted effective income tax rates, EBITDA,
adjusted EBITDA (on a consolidated basis), EBITDA margin and
adjusted EBITDA margin are financial measures that are not required
by, or presented in accordance with, accounting principles
generally accepted in the United
States, or GAAP. These non-GAAP measures should not be
considered as alternatives to Net (loss) income attributable to
Albemarle Corporation ("earnings") or other comparable measures
calculated and reported in accordance with GAAP. These measures are
presented here to provide additional useful measurements to review
the company's operations, provide transparency to investors and
enable period-to-period comparability of financial performance. The
company's chief operating decision maker uses these measures to
assess the ongoing performance of the company and its segments, as
well as for business and enterprise planning purposes.
A description of other non-GAAP financial measures that
Albemarle uses to evaluate its operations and financial
performance, and reconciliation of these non-GAAP financial
measures to the most directly comparable financial measures
calculated and reported in accordance with GAAP can be found on the
following pages of this press release, which is also is available
on Albemarle's website at https://investors.albemarle.com. The
company does not provide a reconciliation of forward-looking
non-GAAP financial measures to the most directly comparable
financial measures calculated and reported in accordance with GAAP,
as the company is unable to estimate significant non-recurring or
unusual items without unreasonable effort. The amounts and timing
of these items are uncertain and could be material to the company's
results calculated in accordance with GAAP.
ALBEMARLE CORPORATION AND
SUBSIDIARIES
Non-GAAP
Reconciliations
(Unaudited)
See below for a reconciliation of adjusted net income
attributable to Albemarle Corporation, adjusted net income
attributable to Albemarle Corporation common shareholders, EBITDA
and adjusted EBITDA (on a consolidated basis), which are non-GAAP
financial measures, to Net (loss) income attributable to Albemarle
Corporation ("earnings"), the most directly comparable financial
measure calculated and reported in accordance with GAAP. Adjusted
net income attributable to Albemarle Corporation common
shareholders is defined as net (loss) income after mandatory
convertible preferred stock dividends, but before the
non-recurring, other unusual and non-operating pension and other
post-employment benefit (OPEB) items as listed below. The
non-recurring and unusual items may include acquisition and
integration related costs, gains or losses on sales of businesses,
restructuring charges, facility divestiture charges, certain
litigation and arbitration costs and charges, and other significant
non-recurring items. EBITDA is defined as net (loss) income
attributable to Albemarle Corporation before interest and financing
expenses, income tax expense, and depreciation and amortization.
Adjusted EBITDA is defined as EBITDA plus or minus the
proportionate share of Windfield Holdings income tax expense,
non-recurring, other unusual and non-operating pension and OPEB
items as listed below.
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
In thousands, except
percentages and per
share amounts
|
$
|
|
% of
net
sales
|
|
$
|
|
% of
net
sales
|
|
$
|
|
% of
net
sales
|
|
$
|
|
% of
net
sales
|
|
Net (loss) income
attributable to Albemarle
Corporation
|
($188,198)
|
|
|
|
$ 650,043
|
|
|
|
($185,750)
|
|
|
|
$
1,888,623
|
|
|
|
Add back:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-operating pension
and OPEB items
(net of tax)
|
(336)
|
|
|
|
381
|
|
|
|
(687)
|
|
|
|
755
|
|
|
|
Non-recurring and
other unusual items (net
of tax)
|
234,498
|
|
|
|
213,194
|
|
|
|
274,542
|
|
|
|
190,420
|
|
|
|
Adjusted net income
attributable to Albemarle
Corporation
|
45,964
|
|
|
|
863,618
|
|
|
|
88,105
|
|
|
|
2,079,798
|
|
|
|
Mandatory convertible preferred stock
dividends
|
(41,688)
|
|
|
|
—
|
|
|
|
(53,272)
|
|
|
|
—
|
|
|
|
Adjusted net income
attributable to Albemarle
Corporation common shareholders
|
$4,276
|
|
|
|
$ 863,618
|
|
|
|
$34,833
|
|
|
|
$
2,079,798
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted diluted
earnings per share
attributable to common shareholders
|
$ 0.04
|
|
|
|
$ 7.33
|
|
|
|
$ 0.30
|
|
|
|
$
17.65
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
weighted-average common shares
outstanding – diluted
|
117,703
|
|
|
|
117,769
|
|
|
|
117,685
|
|
|
|
117,805
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable
to Albemarle
Corporation
|
($188,198)
|
|
(13.2) %
|
|
$ 650,043
|
|
27.4 %
|
|
($185,750)
|
|
(6.7) %
|
|
$
1,888,623
|
|
38.2 %
|
|
Add back:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and financing
expenses
|
35,187
|
|
2.5 %
|
|
25,577
|
|
1.1 %
|
|
73,156
|
|
2.6 %
|
|
52,354
|
|
1.1 %
|
|
Income tax (benefit)
expense
|
(30,660)
|
|
(2.1) %
|
|
42,987
|
|
1.8 %
|
|
(34,381)
|
|
(1.2) %
|
|
319,950
|
|
6.5 %
|
|
Depreciation and
amortization
|
138,279
|
|
9.7 %
|
|
93,085
|
|
3.9 %
|
|
262,030
|
|
9.4 %
|
|
180,356
|
|
3.6 %
|
|
EBITDA
|
(45,392)
|
|
(3.2) %
|
|
811,692
|
|
34.2 %
|
|
115,055
|
|
4.1 %
|
|
2,441,283
|
|
49.3 %
|
|
Proportionate share of
Windfield income
tax expense
|
119,780
|
|
8.4 %
|
|
233,976
|
|
9.9 %
|
|
193,469
|
|
6.9 %
|
|
399,961
|
|
8.1 %
|
|
Non-operating pension
and OPEB items
|
(337)
|
|
— %
|
|
612
|
|
— %
|
|
(662)
|
|
— %
|
|
1,213
|
|
— %
|
|
Non-recurring and
other unusual items
|
312,309
|
|
21.8 %
|
|
219,962
|
|
9.3 %
|
|
369,734
|
|
13.2 %
|
|
185,489
|
|
3.7 %
|
|
Adjusted
EBITDA
|
$386,360
|
|
27.0 %
|
|
$
1,266,242
|
|
53.4 %
|
|
$ 677,596
|
|
24.3 %
|
|
$
3,027,946
|
|
61.2 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
1,430,385
|
|
|
|
$
2,370,190
|
|
|
|
$
2,791,121
|
|
|
|
$
4,950,442
|
|
|
Non-operating pension and OPEB items, consisting of
mark-to-market actuarial gains/losses, settlements/curtailments,
interest cost and expected return on assets, are not allocated to
Albemarle's operating segments and are included in the Corporate
category. In addition, the company believes that these components
of pension cost are mainly driven by market performance, and the
company manages these separately from the operational performance
of the company's businesses. In accordance with GAAP, these
non-operating pension and OPEB items are included in Other income,
net. Non-operating pension and OPEB items were as follows (in
thousands):
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Interest
cost
|
$
8,501
|
|
$
9,027
|
|
$ 17,006
|
|
$ 18,037
|
|
Expected return on
assets
|
(8,838)
|
|
(8,415)
|
|
(17,668)
|
|
(16,824)
|
|
Total
|
$
(337)
|
|
$
612
|
|
$
(662)
|
|
$
1,213
|
In addition to the non-operating pension and OPEB items
disclosed above, the company has identified certain other items and
excluded them from Albemarle's adjusted net income calculation for
the periods presented. A listing of these items, as well as a
detailed description of each follows below (per diluted share):
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Restructuring and other
charges(1)
|
$
0.02
|
|
$
0.05
|
|
$
0.13
|
|
$
0.05
|
|
Acquisition and
integration related costs(2)
|
0.01
|
|
0.04
|
|
0.02
|
|
0.08
|
|
Capital project assets
write-off(3)
|
1.82
|
|
—
|
|
1.94
|
|
—
|
|
Loss (gain) in fair
value of public equity securities(4)
|
0.12
|
|
(0.10)
|
|
0.47
|
|
(0.39)
|
|
Legal
accrual(5)
|
—
|
|
1.82
|
|
—
|
|
1.82
|
|
Other(6)
|
(0.03)
|
|
0.02
|
|
(0.18)
|
|
0.07
|
|
Tax related
items(7)
|
0.05
|
|
(0.02)
|
|
(0.05)
|
|
(0.01)
|
|
Total non-recurring
and other unusual items
|
$
1.99
|
|
$
1.81
|
|
$
2.33
|
|
$
1.62
|
|
|
|
(1)
|
In January 2024, the
Company announced it was taking measures to unlock near term cash
flow and generate long-term financial flexibility by re-phasing
organic growth investments and optimizing its cost structure. As a
result, the Company recorded severance costs for employees in
Corporate and each of the businesses. During the three and six
months ended June 30, 2024, $2.5 million and $18.9 million were
recorded in Selling, general and administrative expenses ($2.0
million and $15.1 million after income taxes, or $0.02 and $0.13
per share), respectively. The severance has primarily been paid,
with the remainder to be paid in 2024. During the three and six
months ended June 30, 2023, $7.4 million of severance costs in
the Ketjen business were recorded in Selling, general and
administrative expenses ($5.7 million after income taxes, or $0.05
per share).
|
|
|
|
(2)
|
Costs related to the
acquisition, integration and divestitures for various significant
projects, recorded in Selling, general and administrative expenses
for the three and six months ended June 30, 2024 were $1.6 million
and $3.5 million ($1.2 million and $2.7 million after income taxes,
or $0.01 and $0.02 per share), respectively, and for the three and
six months ended June 30, 2023 were $6.5 million and $11.6 million
($5.0 million and $9.0 million after income taxes, or $0.04 and
$0.08 per share), respectively.
|
|
|
|
(3)
|
As part of the organic
growth investment re-phasing, during 2024 the Company wrote-off the
value of assets related to certain capital projects no longer part
of the Company's modified capital plan. The Company determined that
these assets will not provide future value or will require
significant re-engineering if the related projects are restarted.
Losses of $275.9 million and $293.1 million recorded in Operating
(loss) profit for the three and six months ended June 30, 2024,
respectively, and losses of $2.6 million and $5.4 million recorded
in Other income, net for the three and six months ended June 30,
2024, respectively ($214.5 million and $228.5 million after income
taxes, or $1.82 and $1.94 per share), related to these capital
project asset write-offs and associated contract cancellation
costs.
|
|
|
|
(4)
|
Losses of $17.8 million
and $27.2 million recorded in Other income, net resulting from the
net change in fair value of investments in public equity securities
for the three and six months ended June 30, 2024, respectively, and
a loss of $33.7 million recorded in Other income, net for the six
months ended June 30, 2024 resulting from the sale of investments
in public equity securities ($13.9 million and $55.0 million after
income taxes, or $0.12 and $0.47 per share). Gain of $15.0 million
and $60.8 million ($11.2 million and $45.6 million after income
taxes, or $0.10 and $0.39 per share) recorded in Other income, net
for the three and six months ended June 30, 2023, respectively,
resulting from the net increase in fair value of investments in
public equity securities.
|
|
|
|
(5)
|
Accrual of $218.5
million ($214.9 million after income taxes, or $1.82 per share)
recorded in Selling, general and administrative expenses resulting
from agreements in principle to resolve a previously disclosed
legal matter with the DOJ and SEC related to conduct in our Ketjen
business prior to 2018.
|
|
|
|
(6)
|
Other adjustments for
the three months ended June 30, 2024 included amounts recorded
in:
|
|
- Selling, general
and administrative expenses - $5.1 million of expenses related to
certain historical legal and environmental matters.
- Other income, net -
$8.9 million gain from PIK dividends of preferred equity in a
Grace subsidiary and a $0.6 million gain from an updated cost
estimate of an environmental reserve at a site not part of our
operations.
|
|
After income taxes,
these net gains totaled $3.7 million, or $0.03 per
share.
|
|
|
|
Other adjustments for
the three months ended June 30, 2023 included amounts recorded
in:
|
|
- Selling, general
and administrative expenses - $0.7 million of facility closure
expenses related to offices in Germany and $0.6 million primarily
related to shortfall contributions for a multiemployer plan
financial improvement plan.
- Other income, net - $3.9 million of a loss
resulting from the adjustment of indemnification related to
previously disposed businesses, partially offset by a $2.7 million
gain in the fair value of preferred equity of a Grace
subsidiary.
|
|
After income taxes,
these charges totaled $2.7 million, or $0.02 per share.
|
|
|
|
Other adjustments for
the six months ended June 30, 2024 included amounts recorded
in:
|
|
- Cost of goods sold
- $1.4 million of expenses related to non-routine labor and
compensation related costs that are outside normal compensation
arrangements.
- Selling, general and administrative expenses
- $5.2 million of expenses related to certain historical legal and
environmental matters.
- Other income, net -
$17.6 million gain from PIK dividends of preferred equity in a
Grace subsidiary, a $17.3 million gain primarily from the sale of
assets at a site not part of our operations, a $2.4 million gain
primarily resulting from the adjustment of indemnification related
to a previously disposed business and a $0.6 million gain from an
updated cost estimate of an environmental reserve at a site not
part of our operations, partially offset by $2.9 million of charges
for asset retirement obligations at a site not part of our
operations.
|
|
After income taxes,
these net gains totaled $21.0 million, or $0.18 per
share.
|
|
|
|
Other adjustments for
the six months ended June 30, 2023 included amounts recorded
in:
|
|
- Selling, general
and administrative expenses - $1.9 million of charges primarily for
environmental reserves at sites not part of our operations, $1.4
million of facility closure expenses related to offices in Germany
and $0.6 million primarily related to shortfall contributions for
a multiemployer plan financial improvement plan.
- Other income, net - $3.9 million of a loss
resulting from the adjustment of indemnification related to
previously disposed businesses and $3.6 million of asset retirement
obligation charges primarily for a site not part of our operations,
partially offset by a $2.7 million gain in the fair value of
preferred equity of a Grace subsidiary.
|
|
After income taxes,
these charges totaled $7.5 million, or $0.07 per share.
|
|
|
|
(7)
|
Included in Income tax
benefit for the three and six months ended June 30, 2024 are
discrete net tax expenses of $6.5 million, or $0.05 per share, and
benefits of $5.7 million, or $0.05 per share, respectively,
primarily related to the reduction in a foreign tax reserve and
excess tax benefits realized from stock-based compensation
arrangements.
|
|
|
|
Included in Income tax
expense for the three and six months ended June 30, 2023 are
discrete net tax benefits of $3.9 million, or $0.02 per share and
$1.0 million, or $0.01 per share, respectively. The net benefit
primarily related to foreign return to provisions offset by excess
tax benefits realized from stock-based compensation
arrangements.
|
See below for a reconciliation of the adjusted effective income
tax rate, the non-GAAP financial measure, to the effective income
tax rate, the most directly comparable financial measure calculated
and reported in accordance with GAAP (in thousands, except
percentages).
|
(Loss) Income
before income taxes
and equity in net
income of
unconsolidated
investments
|
|
Income tax
(benefit)
expense
|
|
Effective income
tax
rate
|
|
Three months ended
June 30, 2024
|
|
|
|
|
|
|
As reported
|
$
(494,132)
|
|
$
(30,660)
|
|
6.2 %
|
|
Non-recurring, other
unusual and non-operating pension and OPEB
items
|
311,972
|
|
77,810
|
|
|
|
As adjusted
|
$
(182,160)
|
|
$
47,150
|
|
(25.9) %
|
|
|
|
|
|
|
|
Three months ended
June 30, 2023
|
|
|
|
|
|
|
As reported
|
$
168,375
|
|
$
42,987
|
|
25.5 %
|
|
Non-recurring, other
unusual and non-operating pension and OPEB
items
|
220,574
|
|
6,999
|
|
|
|
As adjusted
|
$
388,949
|
|
$
49,986
|
|
12.9 %
|
|
|
|
|
|
|
|
Six months ended
June 30, 2024
|
|
|
|
|
|
|
As reported
|
$
(661,706)
|
|
$
(34,381)
|
|
5.2 %
|
|
Non-recurring, other
unusual and non-operating pension and OPEB
items
|
369,072
|
|
95,217
|
|
|
|
As adjusted
|
$
(292,634)
|
|
$
60,836
|
|
(20.8) %
|
|
|
|
|
|
|
|
Six months ended
June 30, 2023
|
|
|
|
|
|
|
As reported
|
$
1,325,853
|
|
$
319,950
|
|
24.1 %
|
|
Non-recurring, other
unusual and non-operating pension and OPEB
items
|
186,702
|
|
(4,473)
|
|
|
|
As adjusted
|
$
1,512,555
|
|
$
315,477
|
|
20.9 %
|
As noted above, beginning in 2024, the company changed its
definition of adjusted EBITDA for financial accounting purposes.
The updated definition includes Albemarle's share of the pre-tax
earnings of the Talison joint venture, whereas the prior definition
included Albemarle's share of Talison earnings net of tax. See
below for a reconciliation of adjusted EBITDA (on a consolidated
basis), the non-GAAP financial measure, to Net income attributable
to Albemarle Corporation ("earnings"), the most directly comparable
financial measure calculated and reported in accordance with GAAP,
as if it were presented under the new definition for the year ended
December 31, 2023.
|
Net income attributable
to Albemarle Corporation
|
$
1,573,476
|
|
Depreciation and
amortization
|
429,944
|
|
Interest and financing
expenses
|
116,072
|
|
Income tax
expense
|
430,277
|
|
Proportionate share of
Windfield income tax expense
|
779,703
|
|
Gain on sale of
business/interest in properties, net
|
(71,190)
|
|
Acquisition and
integration related costs
|
26,767
|
|
Goodwill
impairment
|
6,765
|
|
Non-operating pension
and OPEB items
|
(7,971)
|
|
Mark-to-market gain on
public equity securities
|
44,732
|
|
Legal
accrual
|
218,510
|
|
Other
|
(1,097)
|
|
Total adjusted
EBITDA
|
$
3,545,988
|
Contact:
Meredith Bandy 1.980.999.5168
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SOURCE Albemarle Corporation