PHILADELPHIA and PERTH, Australia, Aug. 6, 2024
/PRNewswire/ --
- Realized Average Pricing of $17,200 / Product Metric Ton for Lithium
Hydroxide and Carbonate in the Second Quarter
- Tracking Towards High End of $60
to 80 million Cost Savings Guidance in 2024 and Accelerating
Further Cost Reductions
- Projecting a 25% Increase in Combined Lithium Hydroxide and
Carbonate Volume in Both 2024 and 2025 versus the Prior Year
- Reducing Capital Spending by ~$500
million Over Next 24 Months in Response to Current Market
Conditions
- Arcadium Lithium Investor Day Scheduled for September 19th
Arcadium Lithium plc (NYSE: ALTM, ASX: LTM, "Arcadium
Lithium" or the "Company") today reported results for the
second quarter of 2024.
Second Quarter Highlights
Second quarter revenue was $255
million and reported attributable GAAP net income was
$85.7 million, or 7 cent per diluted share. Adjusted
EBITDA1 was $99.1 million
and adjusted earnings per diluted share2 were
5 cents.
The Company realized average pricing of $17,200 per product metric ton for combined
lithium hydroxide and carbonate volumes in the second quarter.
Total volumes in the second quarter were up slightly versus the
first quarter, with higher carbonate and hydroxide sales partially
offset by lower spodumene sales due to reduced production at Mt.
Cattlin. Average realized pricing was higher sequentially for
spodumene, but lower across all other products. This decline
was driven by a combination of lower market prices for lithium
chemicals, the lag impact of price indices on a portion of the
Company's carbonate and hydroxide volumes, and changes in both
product and customer mix.
"We continue to focus on leveraging our low-cost, high quality
operational footprint and a commercial strategy of securing long
term contracts with strategic customers to navigate through all
market environments," said Paul
Graves, president and chief executive officer of Arcadium
Lithium. "Similar to last quarter, this approach helped us to
achieve higher realized pricing in the second quarter than we would
have under a fully market-based pricing approach, and to deliver
strong underlying profitability."
|
|
|
|
|
1 Reconciliation of Adjusted EBITDA,
a non-GAAP measure, to net income attributable to Arcadium
Lithium plc, the most directly comparable financial measure
presented in accordance with GAAP, is set forth in the
reconciliation table accompanying this release.
|
|
2
Corresponds to Diluted adjusted after-tax earnings per share in the
accompanying financial tables. Reconciliation of Diluted
adjusted after-tax earnings per share, a non-GAAP measure, to
Diluted earnings per ordinary share (GAAP), the most directly
comparable financial measure presented in accordance with GAAP, is
set forth in the reconciliation table accompanying this
release.
|
Cost Savings
Arcadium Lithium is expecting to deliver cost savings in 2024 at
the higher end of its $60 to 80
million guidance range. These savings are a result of
organizational restructuring, operating and logistics savings and
the elimination of third-party and other services across the two
legacy companies. Operating and logistics savings
predominately relate to raw materials, energy and transportation in
Argentina and several key supplier
contracts have been renegotiated with immediate effect.
In light of progress made to date and the changing market
conditions since merger completion, Arcadium Lithium is
accelerating further cost reduction initiatives. The Company
previously announced it expects to achieve total cost savings of
$125 million per annum by three years
of merger completion and has commenced a program to accelerate the
delivery of these cost savings.
2024 and 2025 Volumes
Arcadium Lithium is projecting a 25% increase in combined
lithium hydroxide and lithium carbonate sales volumes for the full
year compared to 2023, with a further 25% increase in 2025 compared
to 2024, both driven by already-completed expansions.
The Company continues to increase production levels at its
recently completed expansions in Argentina. Both expansions are currently
producing commercial volumes of lithium carbonate, resulting in
higher sales volumes of carbonate and hydroxide in the second half
of the year. The process of starting up both expansions means
that we expect to see further volume growth from both Olaroz and
Fenix in 2025 as they steadily move towards delivering their total
nameplate capacity of 40,000 metric tons and 33,000 metric tons
(including lithium chloride), respectively.
For lithium hydroxide, the combined 30,000 metric tons of
expansions in Bessemer City (U.S.), Zhejiang (China) and Naraha (Japan) are all finalizing qualification with
key customers. They are expected to produce increasing
commercial volumes as the lithium carbonate production in
Argentina increases to feed
them.
Capital Spending and Capacity Expansions
"Despite where lithium market prices are today, we still see a
strong long-term growth trajectory for lithium demand and expect a
return to healthier market fundamentals over time," continued
Graves. "However, the market is clearly indicating that the
industry does not need to add supply at the same pace as previously
expected. We have therefore decided to defer investment in
two of our four current expansion projects. While we remain
fully committed to developing our highly attractive portfolio of
expansion opportunities, each of which is expected to be amongst
the lowest cost lithium operations globally when completed, we will
seek to do so on a timeline that is supported by both the market
and our customers."
Arcadium Lithium intends to pause current investment in its
40,000 metric ton (LCE) spodumene Galaxy project in Canada (formerly "James Bay") and is exploring the opportunity to
bring in a partner that is interested in providing capital for the
project in return for a long-term strategic investment. The
pause in spending will be structured to minimize both cost and
timing disruption when the project is ultimately resumed.
Additionally, Arcadium Lithium is revisiting the sequencing of
its combined 25,000 metric ton lithium carbonate projects at the
Salar del Hombre Muerto in Argentina. Rather than execute
Fénix Phase 1B and Sal de Vida Stage 1 simultaneously as previously
announced, the projects will now be completed
sequentially.
As a result of these actions, the Company will immediately
reduce its capital spending and plans to spend approximately
$500 million less over the next 24
months.
The Company has no plans to alter the development of Nemaska
Lithium, a 32,000 metric ton integrated spodumene to hydroxide
project in Canada.
Arcadium Lithium is preparing for an upcoming Investor Day in
September where we will provide our views on the evolution of the
lithium market and how they align with our latest expansion plans
and broader strategic objectives for the business.
2024 Outlook Scenarios3
Arcadium Lithium continues to expect higher overall volumes year
over year, with a 25% increase in combined lithium hydroxide and
lithium carbonate sales offset by lower spodumene concentrate
sales.
The table below reflects Revenue and Adjusted EBITDA outcomes
for Arcadium Lithium based on two different lithium market price
scenarios for the second half of 2024. These scenarios should
not be interpreted as a forecast by Arcadium Lithium as to the
likely range of lithium prices during the period. It keeps
constant the midpoints of the Company's expected sales volumes,
cost savings and SG&A for 2024 while overlaying the pricing
mechanisms of existing commercial agreements:
|
|
|
Second Half
2024
Average Market
Price4
|
|
Full Year
2024
|
Units
|
|
$12/kg
|
|
$15/kg
|
|
Revenue
|
$
million
|
|
~1,100
|
|
~1,200
|
|
Adjusted
EBITDA5
|
$
million
|
|
~380
|
|
~470
|
|
Adjusted EBITDA Margin
5
|
|
35 %
|
|
39 %
|
The table below provides an outlook for other select financial
items:
|
Metric
|
Units
|
Full Year
2024
|
|
Selling, general and
administrative expenses6
|
$
million
|
~115
|
|
Depreciation &
amortization
|
$
million
|
~100
|
|
Adjusted tax rate
5
|
|
25 %
|
30 %
|
|
Full-year weighted
average diluted shares outstanding 7
|
million
|
~1,150
|
|
|
|
|
|
Capital
spending
|
$
million
|
550
|
700
|
|
|
|
|
|
|
|
3 Reflects 100% consolidation of
Olaroz and Nemaska Lithium, in which Arcadium Lithium has current
economic interests of 66.5% and 50%, respectively.
|
|
4 Reference market prices meant to
reflect multiple lithium products on an LCE equivalent
basis.
|
|
5 Although Arcadium Lithium
provides an outlook for Adjusted EBITDA, Adjusted EBITDA margin and
adjusted tax rate, each of these a non-GAAP measure, the Company is
not able to do so for the most directly comparable measures
calculated and presented in accordance with GAAP. Certain
elements of the composition of the GAAP amounts are not
predictable, making it impractical for the Company to provide an
outlook for such GAAP measures or to reconcile corresponding
non-GAAP financial measures to such GAAP measures without
unreasonable efforts. For the same reason, the Company is
unable to address the probable significance of the unavailable
information. Such elements include, but are not limited to,
restructuring and transaction related charges. As a result,
no GAAP equivalent outlook is provided for these
metrics.
|
|
6 Includes Research and development
expenses.
|
|
7 Inclusive of 67.7 million dilutive
share equivalents attributable to 2025 Notes.
|
Arcadium Lithium Contacts
Investors:
Daniel Rosen +1 215 299 6208
daniel.rosen@arcadiumlithium.com
Phoebe Lee +61 413 557 780
phoebe.lee@arcadiumlithium.com
Media:
Karen Vizental +54 9 114 414 4702
karen.vizental@arcadiumlithium.com
Supplemental Information
In this press release, Arcadium Lithium uses the financial
measures Adjusted EBITDA, Diluted adjusted after-tax earnings per
share, and Adjusted cash provided by operations. These terms
are not calculated in accordance with generally accepted accounting
principles (GAAP). Definitions of these terms, as well as a
reconciliation to the most directly comparable financial measure
calculated and presented in accordance with GAAP, are provided on
our website: ir.arcadiumlithium.com and elsewhere in this press
release or the financial tables that accompany this press
release.
About Arcadium Lithium
Arcadium Lithium is a leading global lithium chemicals producer
committed to safely and responsibly harnessing the power of lithium
to improve people's lives and accelerate the transition to a clean
energy future. We collaborate with our customers to drive
innovation and power a more sustainable world in which lithium
enables exciting possibilities for renewable energy, electric
transportation and modern life. Arcadium Lithium is
vertically integrated, with industry-leading capabilities across
lithium extraction processes, including hard-rock mining,
conventional brine extraction and direct lithium extraction (DLE),
and in lithium chemicals manufacturing for high performance
applications. We have operations around the world, with facilities
and projects in Argentina,
Australia, Canada, China, Japan,
the United Kingdom and the United
States. For more information, please visit us at
www.ArcadiumLithium.com.
Important Information and Legal Disclaimer:
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995: Certain statements in this news release are
forward-looking statements. In some cases, we have identified
forward-looking statements by such words or phrases as "will likely
result," "is confident that," "expect," "expects," "should,"
"could," "may," "will continue to," "believe," "believes,"
"anticipates," "predicts," "forecasts," "estimates," "projects,"
"potential," "intends" or similar expressions identifying
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995, including the negative of
those words and phrases. Such forward-looking statements are based
on our current views and assumptions regarding future events,
future business conditions and the outlook for Arcadium Lithium
based on currently available information. There are important
factors that could cause Arcadium Lithium's actual results, level
of activity, performance or achievements to differ materially from
the results, level of activity, performance or achievements
expressed or implied by the forward-looking statements, including
the supply and demand in the market for our products as well as
pricing for lithium and high-performance lithium compounds; our
ability to realize the anticipated benefits of the integration of
the businesses of Livent and Allkem or of any future acquisitions;
our ability to acquire or develop additional reserves that are
economically viable; the existence, availability and profitability
of mineral resources and mineral and ore reserves; the success of
our production expansion efforts, research and development efforts
and the development of our facilities; our ability to retain
existing customers; the competition that we face in our business;
the development and adoption of new battery technologies;
additional funding or capital that may be required for our
operations and expansion plans; political, financial and
operational risks that our lithium extraction and production
operations, particularly in Argentina, expose us to; physical and other
risks that our operations and suppliers are subject to; our ability
to satisfy customer qualification processes or customer or
government quality standards; global economic conditions, including
inflation, fluctuations in the price of energy and certain raw
materials; the ability of our joint ventures, affiliated entities
and contract manufacturers to operate according to their business
plans and to fulfill their obligations; severe weather events and
the effects of climate change; extensive and dynamic environmental
and other laws and regulations; our ability to obtain and comply
with required licenses, permits and other approvals; and other
factors described under the caption entitled "Risk Factors" in
Arcadium Lithium's 2023 Form 10-K filed with the Securities and
Exchange Commission ("SEC") on February 29,
2024, as well as Arcadium Lithium's other SEC filings and
public communications. Although Arcadium Lithium believes the
expectations reflected in the forward-looking statements are
reasonable, Arcadium Lithium cannot guarantee future results, level
of activity, performance or achievements. Moreover, neither
Arcadium Lithium nor any other person assumes responsibility for
the accuracy and completeness of any of these forward-looking
statements. Arcadium Lithium is under no duty to update any of
these forward-looking statements after the date of this news
release to conform its prior statements to actual results or
revised expectations.
|
ARCADIUM LITHIUM
PLC
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in
millions, except per share data)
|
|
|
Three Months
Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2024
|
|
2023 (1)
|
|
2024
|
|
2023 (1)
|
|
Revenue
|
$ 254.5
|
|
$ 235.8
|
|
$
515.7
|
|
$ 489.3
|
|
Costs of
sales
|
174.1
|
|
88.5
|
|
328.9
|
|
174.8
|
|
Gross
margin
|
80.4
|
|
147.3
|
|
186.8
|
|
314.5
|
|
Selling, general and
administrative expenses
|
15.5
|
|
17.6
|
|
55.4
|
|
33.9
|
|
Research and
development expenses
|
1.5
|
|
1.0
|
|
2.6
|
|
2.0
|
|
Restructuring and other
charges
|
21.9
|
|
24.3
|
|
101.7
|
|
26.3
|
|
Total costs and
expenses
|
213.0
|
|
131.4
|
|
488.6
|
|
237.0
|
|
Income from operations
before equity in net loss of unconsolidated
affiliate, interest income, net, loss on debt extinguishment and
other gains
|
41.5
|
|
104.4
|
|
27.1
|
|
252.3
|
|
Equity in net loss of
unconsolidated affiliate
|
—
|
|
7.2
|
|
—
|
|
15.3
|
|
Interest income,
net
|
(9.3)
|
|
—
|
|
(20.3)
|
|
—
|
|
Loss on debt
extinguishment
|
0.9
|
|
—
|
|
1.1
|
|
—
|
|
Other gains
|
(79.9)
|
|
(7.6)
|
|
(157.2)
|
|
(6.5)
|
|
Income from operations
before income taxes
|
129.8
|
|
104.8
|
|
203.5
|
|
243.5
|
|
Income tax
expense
|
35.3
|
|
14.6
|
|
89.1
|
|
38.5
|
|
Net income
|
$
94.5
|
|
$
90.2
|
|
$
114.4
|
|
$ 205.0
|
|
Net income attributable
to noncontrolling interests
|
8.8
|
|
—
|
|
13.1
|
|
—
|
|
Net income attributable
to Arcadium Lithium plc
|
$
85.7
|
|
$
90.2
|
|
$
101.3
|
|
$ 205.0
|
|
Basic earnings per
ordinary share
|
$
0.08
|
|
$
0.21
|
|
$ 0.10
|
|
$
0.47
|
|
Diluted earnings per
ordinary share
|
$
0.07
|
|
$
0.18
|
|
$ 0.09
|
|
$
0.41
|
|
Weighted average
ordinary shares outstanding - basic
|
1,074.9
|
|
432.3
|
|
1,064.2
|
|
432.2
|
|
Weighted average
ordinary shares outstanding - diluted
|
1,143.5
|
|
503.9
|
|
1,132.9
|
|
503.7
|
|
|
|
|
|
|
|
|
1.
|
For the three and six
months ended June 30, 2023, basic and diluted earnings per ordinary
share and weighted average ordinary shares outstanding - basic and
diluted amounts represent predecessor Livent and have been adjusted
to reflect the 2.406 Exchange Ratio. Represents the results of
predecessor Livent's operations for three and six months ended
June 30, 2023 which do not include the operations of
Allkem.
|
|
ARCADIUM LITHIUM
PLC
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES
RECONCILIATION OF
NET INCOME ATTRIBUTABLE TO ARCADIUM LITHIUM PLC (GAAP) TO
ADJUSTED
EBITDA (NON-GAAP)
(Unaudited)
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
(in
Millions)
|
2024
|
|
2023 (1)
|
|
2024
|
|
2023 (1)
|
|
Net income attributable
to Arcadium Lithium plc
|
$
85.7
|
|
$
90.2
|
|
$
101.3
|
|
$
205.0
|
|
Add back:
|
|
|
|
|
|
|
|
|
Net income attributable
to noncontrolling interests
|
8.8
|
|
—
|
|
13.1
|
|
—
|
|
Interest income,
net
|
(9.3)
|
|
—
|
|
(20.3)
|
|
—
|
|
Income tax
expense
|
35.3
|
|
14.6
|
|
89.1
|
|
38.5
|
|
Depreciation and
amortization
|
24.3
|
|
7.0
|
|
41.5
|
|
13.8
|
|
EBITDA (Non-GAAP)
(2)
|
144.8
|
|
111.8
|
|
224.7
|
|
257.3
|
|
Add back:
|
|
|
|
|
|
|
|
|
Argentina remeasurement
(gains)/losses (a)
|
(57.6)
|
|
4.8
|
|
(96.2)
|
|
8.9
|
|
Restructuring and other
charges (b)
|
21.9
|
|
24.3
|
|
101.7
|
|
26.3
|
|
Loss on debt
extinguishment (c)
|
0.9
|
|
—
|
|
1.1
|
|
—
|
|
Inventory step-up,
Allkem Livent Merger (d)
|
4.7
|
|
—
|
|
20.5
|
|
—
|
|
Other losses/(gains)
(e)
|
1.2
|
|
5.0
|
|
(7.4)
|
|
10.8
|
|
Subtract:
|
|
|
|
|
|
|
|
|
Blue Chip Swap gain
(f)
|
(16.8)
|
|
(11.4)
|
|
(36.5)
|
|
(11.4)
|
|
Adjusted EBITDA
(Non-GAAP) (2)
|
$
99.1
|
|
$
134.5
|
|
$
207.9
|
|
$
291.9
|
|
|
|
|
|
|
|
|
1.
|
Represents the results
of predecessor Livent's operations for three and six months ended
June 30, 2023 which do not include the operations of
Allkem.
|
|
2.
|
We evaluate operating
performance using certain Non-GAAP measures such as EBITDA, which
we define as net income attributable to Arcadium Lithium plc plus
noncontrolling interests, interest income, net, income tax expense
and depreciation and amortization; and Adjusted EBITDA, which we
define as EBITDA adjusted for Argentina remeasurement
(gains)/losses, restructuring and other charges, Merger-related
inventory step-up, certain Blue Chip Swap gains and other
losses/(gains). Management believes the use of these Non-GAAP
measures allows management and investors to compare more easily the
financial performance of its underlying business from period to
period. The Non-GAAP information provided may not be comparable to
similar measures disclosed by other companies because of differing
methods used by other companies in calculating EBITDA and Adjusted
EBITDA. This measure should not be considered as a substitute for
net income or other measures of performance or liquidity reported
in accordance with U.S. GAAP. The above table reconciles
EBITDA and Adjusted EBITDA from net income.
|
|
a.
|
Represents impact of
currency fluctuations primarily on deferred income tax assets and
liabilities. Also includes impact of currency fluctuations on other
tax assets and liabilities and on long-term monetary assets
associated with our capital expansion as well as foreign currency
devaluations. The remeasurement losses are included within Other
gains in our condensed consolidated statements of operations but
are excluded from our calculation of Adjusted EBITDA because of:
i.) their nature as income tax related; ii.) their association with
long-term capital projects which will not be operational until
future periods; or iii.) the severity of the devaluations and their
immediate impact on our operations in the country.
|
|
b.
|
We continually perform
strategic reviews and assess the return on our business. This
sometimes results in management changes or in a plan to restructure
the operations of our business. As part of these restructuring
plans, demolition costs and write-downs of long-lived assets may
occur. The three months ended June 30, 2024 and 2023 include costs
related to the combination of Livent and Allkem in a
stock-for-stock transaction (the "Transaction") of $19.8 million
and $18.8 million, respectively. The six months ended June 30, 2024
and 2023 include costs related to the Transaction of $86.8 million
and $18.8 million, respectively. The six months ended June 30, 2024
and 2023 include severance-related costs of $14.1 million and $2.4
million, respectively.
|
|
c.
|
The three months ended
June 30, 2024 represents a prepayment fee incurred when the Sal de
Vida Project Financing Facility was repaid in its entirety by SDJ
SA on May 30, 2024. The six months ended June 30, 2024 also
includes $0.2 million for the partial write-off of deferred
financing costs for amendments to the Revolving Credit Facility.
The debt extinguishment losses are excluded from our calculation of
Adjusted EBITDA because the loss is nonrecurring.
|
|
d.
|
Relates to the
step-up in inventory recorded for Allkem Livent Merger for the
three and six months ended June 30, 2024 as a result of
purchase accounting, excluded from Adjusted EBITDA as the step-up
is considered a one-time, non-recurring cost.
|
|
e.
|
The three and six
months ended June 30, 2024 primarily represents foreign currency
remeasurement gains related to U.S. dollar-denominated cash
balances temporarily held at a foreign currency-functional
subsidiary. The three and six months ended June 30, 2023,
prior to consolidation of Nemaska Lithium Inc. ("NLI") on October
18, 2023, represents our 50% ownership interest in costs incurred
for certain project-related costs to align NLI's reported results
with Arcadium's capitalization policies and interest expense
incurred by NLI, all included in Equity in net loss of
unconsolidated affiliate in our condensed consolidated statements
of operations. The Company consolidates NLI on a one-quarter lag
basis and prior to October 18, 2023, accounted for its equity
method investment in NLI on a one-quarter lag basis.
|
|
f.
|
Represents
non-recurring gain from the sale in Argentina pesos of Argentina
Sovereign U.S. dollar-denominated bonds due to the divergence
of Argentina's Blue Chip Swap market exchange rate from the
official rate.
|
|
RECONCILIATION OF
NET INCOME ATTRIBUTABLE TO ARCADIUM LITHIUM PLC (GAAP)
TO
ADJUSTED AFTER-TAX
EARNINGS (NON-GAAP)
(Unaudited)
|
|
|
(in Millions, Except
Per Share Data)
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2024
|
|
2023 (1)
|
|
2024
|
|
2023 (1)
|
|
Net income attributable
to Arcadium Lithium plc
|
$
85.7
|
|
$
90.2
|
|
$
101.3
|
|
$
205.0
|
|
Add back:
|
|
|
|
|
|
|
|
|
Net income attributable
to noncontrolling interests
|
8.8
|
|
—
|
|
13.1
|
|
—
|
|
Special
charges:
|
|
|
|
|
|
|
|
|
Argentina
remeasurement (gains)/losses (a)
|
(57.6)
|
|
4.8
|
|
(96.2)
|
|
8.9
|
|
Restructuring and
other charges (b)
|
21.9
|
|
24.3
|
|
101.7
|
|
26.3
|
|
Loss on debt
extinguishment (c)
|
0.9
|
|
—
|
|
1.1
|
|
—
|
|
Inventory step-up,
Allkem Livent Merger (d)
|
4.7
|
|
—
|
|
20.5
|
|
—
|
|
Other losses/(gains)
(e)
|
1.2
|
|
5.0
|
|
(7.4)
|
|
10.8
|
|
Blue Chip Swap gain
(f)
|
(16.8)
|
|
(11.4)
|
|
(36.5)
|
|
(11.4)
|
|
Non-GAAP tax
adjustments (g)
|
10.1
|
|
(5.6)
|
|
38.3
|
|
(6.3)
|
|
Adjusted after-tax
earnings (Non-GAAP) (2)
|
$
58.9
|
|
$
107.3
|
|
$
135.9
|
|
$
233.3
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
ordinary share (GAAP)
|
$
0.07
|
|
$
0.18
|
|
$
0.09
|
|
$
0.41
|
|
Special charges per
diluted share, before tax:
|
|
|
|
|
|
|
|
|
Argentina
remeasurement (gains)/losses, per diluted share
|
(0.05)
|
|
0.01
|
|
(0.08)
|
|
0.02
|
|
Restructuring and
other charges, per diluted share
|
0.02
|
|
0.05
|
|
0.09
|
|
0.05
|
|
Inventory step-up,
Allkem Livent Merger, per diluted share
|
—
|
|
—
|
|
0.02
|
|
—
|
|
Other losses/(gains),
per diluted share
|
—
|
|
0.01
|
|
(0.01)
|
|
0.02
|
|
Blue Chip Swap gain,
per diluted share
|
(0.01)
|
|
(0.03)
|
|
(0.02)
|
|
(0.03)
|
|
Non-GAAP tax
adjustments, per diluted share
|
0.02
|
|
(0.01)
|
|
0.03
|
|
(0.01)
|
|
Diluted adjusted
after-tax earnings per share (Non-GAAP) (2)
|
$
0.05
|
|
$
0.21
|
|
$
0.12
|
|
$
0.46
|
|
Weighted average
ordinary shares outstanding - diluted (Non-
GAAP) used in diluted adjusted after-tax earnings per share
computations
|
1,143.5
|
|
503.9
|
|
1,132.9
|
|
503.7
|
|
|
|
|
|
|
|
|
1.
|
For the three and six
months ended June 30, 2023, diluted earnings per ordinary share
(GAAP), weighted average ordinary shares outstanding - diluted
(Non-GAAP) and all per diluted share amounts represent
predecessor Livent and have been adjusted to reflect the 2.406
Exchange Ratio. Represents the results of predecessor Livent's
operations for three and six months ended June 30, 2023 which
do not include the operations of Allkem.
|
|
2.
|
The Company believes
that the Non-GAAP financial measures Adjusted after-tax earnings
and Diluted adjusted after-tax earnings per share provide useful
information about the Company's operating results to management,
investors and securities analysts. Adjusted after-tax earnings
excludes the effects of, nonrecurring charges/(income) and
tax-related adjustments. The Company also believes that excluding
the effects of these items from operating results allows management
and investors to compare more easily the financial performance of
its underlying business from period to period. Diluted adjusted
after-tax earnings per share (Non-GAAP) is calculated using
weighted average common shares outstanding -
diluted.
|
|
a.
|
Represents impact of
currency fluctuations primarily on deferred income tax assets and
liabilities. Also includes impact of currency fluctuations on other
tax assets and liabilities and on long-term monetary assets
associated with our capital expansion as well as foreign currency
devaluations. The remeasurement losses are included within Other
gains in our condensed consolidated statements of operations but
are excluded from our calculation of Adjusted EBITDA because of:
i.) their nature as income tax related; ii.) their association with
long-term capital projects which will not be operational until
future periods; or iii.) the severity of the devaluations and their
immediate impact on our operations in the country.
|
|
b.
|
We continually perform
strategic reviews and assess the return on our business. This
sometimes results in management changes or in a plan to restructure
the operations of our business. As part of these restructuring
plans, demolition costs and write-downs of long-lived assets may
occur. The three months ended June 30, 2024 and 2023 include costs
related to the Transaction of $19.8 million and $18.8 million,
respectively. The six months ended June 30, 2024 and 2023 include
costs related to the Transaction of $86.8 million and $18.8
million, respectively. The six months ended June 30, 2024 and 2023
include severance-related costs of $14.1 million and $2.4 million,
respectively.
|
|
c.
|
The three months ended
June 30, 2024 represents a prepayment fee incurred when
the Sal de Vida Project Financing Facility was repaid in its
entirety by SDJ SA on May 30, 2024. The six months ended June 30,
2024 also includes $0.2 million for the partial write-off of
deferred financing costs for amendments to the Revolving Credit
Facility. The debt extinguishment losses are excluded from our
calculation of Adjusted EBITDA because the loss is
nonrecurring.
|
|
d.
|
Relates to the step-up
in inventory recorded for Allkem Livent Merger for the three
and six months ended June 30, 2024 as a result of purchase
accounting, excluded from Adjusted EBITDA as the step-up is
considered a one-time, non-recurring cost.
|
|
e.
|
The three and six
months ended June 30, 2024 primarily represents foreign currency
remeasurement gains related to U.S. dollar-denominated cash
balances temporarily held at a foreign currency-functional
subsidiary. The three and six months ended June 30, 2023,
prior to consolidation of Nemaska Lithium Inc. ("NLI") on October
18, 2023, represents our 50% ownership interest in costs incurred
for certain project-related costs to align NLI's reported results
with Arcadium's capitalization policies and interest expense
incurred by NLI, all included in Equity in net loss of
unconsolidated affiliate in our condensed consolidated statements
of operations. The Company consolidates NLI on a one-quarter lag
basis and prior to October 18, 2023, accounted for its equity
method investment in NLI on a one-quarter lag basis.
|
|
f.
|
Represents
non-recurring gain from the sale in Argentina pesos of Argentina
Sovereign U.S. dollar-denominated bonds due to the divergence of
Argentina's Blue Chip Swap market exchange rate from the official
rate.
|
|
g.
|
The company excludes
the GAAP tax provision, including discrete items, from the Non-GAAP
measure Diluted adjusted after-tax earnings per share, and instead
includes a Non-GAAP tax provision based upon the annual Non-GAAP
effective tax rate. The GAAP tax provision includes certain
discrete tax items including, but not limited to: income tax
expenses or benefits that are not related to operating results in
the current year; tax adjustments associated with fluctuations in
foreign currency remeasurement of certain foreign operations;
certain changes in estimates of tax matters related to prior fiscal
years; certain changes in the realizability of deferred tax
assets and related accounting impacts; and changes in tax law.
Management believes excluding these discrete tax items assists
investors and securities analysts in understanding the tax
provision and the effective tax rate related to operating results
thereby providing investors with useful supplemental information
about the company's operational performance. The income tax
expense/(benefit) on special charges/(income) is determined using
the applicable rates in the taxing jurisdictions in which the
special charge or income occurred and includes both current and
deferred income tax expense/(benefit) based on the nature of the
Non-GAAP performance measure.
|
|
Three Months
Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
(in
Millions)
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Non-GAAP tax
adjustments:
|
|
|
|
|
|
|
|
|
Income tax benefit on
restructuring and other charges and other corporate
costs
|
$
(5.9)
|
|
$
(2.3)
|
|
$ (23.4)
|
|
$
(2.8)
|
|
Revisions to our tax
liabilities due to finalization of prior year tax
returns
|
0.2
|
|
(0.1)
|
|
1.2
|
|
(0.1)
|
|
Foreign currency
remeasurement (net of valuation allowance) and other discrete
items
|
9.6
|
|
(4.3)
|
|
47.9
|
|
(3.1)
|
|
Blue Chip Swap
gain
|
4.6
|
|
1.2
|
|
9.2
|
|
1.2
|
|
Other discrete
items
|
1.6
|
|
(0.1)
|
|
3.4
|
|
(1.5)
|
|
Total Non-GAAP tax
adjustments
|
$
10.1
|
|
$
(5.6)
|
|
$
38.3
|
|
$
(6.3)
|
|
RECONCILIATION OF
CASH (USED IN)/PROVIDED BY OPERATING ACTIVITIES (GAAP)
TO
ADJUSTED CASH
PROVIDED BY OPERATIONS (NON-GAAP)
(Unaudited)
|
|
|
Six Months Ended
June 30,
|
|
(in
Millions)
|
2024
|
|
2023 (1)
|
|
Cash (used in)/provided
by operating activities (GAAP)
|
$
(119.7)
|
|
$
181.6
|
|
Restructuring and
other charges
|
145.1
|
|
10.4
|
|
Adjusted cash provided
by operations (Non-GAAP) (2)
|
$
25.4
|
|
$
192.0
|
|
|
|
|
|
|
|
|
1.
|
Represents the results
of predecessor Livent's operations for six months ended
June 30, 2023 which do not include the operations of
Allkem.
|
|
2.
|
The Company believes
that the Non-GAAP financial measure Adjusted cash provided by
operations provides useful information about the Company's cash
flows to investors and securities analysts. Adjusted cash provided
by operations excludes the effects of transaction-related cash
flows. The Company also believes that excluding the effects of
these items from cash (used in)/provided by operating activities
allows management and investors to compare more easily the cash
flows from period to period.
|
|
RECONCILIATION OF
LONG-TERM DEBT (GAAP) AND CASH AND CASH EQUIVALENTS (GAAP)
TO
NET DEBT
(NON-GAAP)
(Unaudited)
|
|
|
(in
Millions)
|
June 30,
2024
|
|
December 31, 2023
(1)
|
|
Long-term debt
(including current maturities) (GAAP) (a)
|
$
634.0
|
|
$
302.0
|
|
Less: Cash and cash
equivalents (GAAP)
|
(380.4)
|
|
(237.6)
|
|
Net debt (Non-GAAP)
(2)
|
$
253.6
|
|
$
64.4
|
|
|
|
|
|
|
|
|
1.
|
Represents the
financial position of predecessor Livent as of December 31,
2023, which does not include the financial position of
Allkem.
|
|
2.
|
The Company believes
that the Non-GAAP financial measure Net debt provides useful
information about the Company's cash flows and liquidity to
investors and securities analysts.
|
|
a.
|
Presented net
of unamortized discounts of $74.4 million and $22.2
million as of June 30, 2024 and December 31, 2023,
respectively.
|
|
RECONCILIATION OF
CASH AND CASH EQUIVALENTS (GAAP) TO ADJUSTED CASH AND DEPOSITS
(NON-GAAP)
|
|
The following table
provides a reconciliation of Arcadium Lithium's Cash and cash
equivalents (GAAP) to Adjusted cash and deposits (Non-GAAP), on an
unaudited basis for illustrative purposes. We define Adjusted cash
and deposits (Non-GAAP) as Cash and cash equivalents, plus
restricted cash in Other non-current assets, less Nemaska Lithium
Cash and cash equivalents consolidated by Arcadium on a one-quarter
lag, plus Nemaska Lithium Cash and cash equivalents not on a
one-quarter lag. Our management believes that this measure provides
useful information about the Company's balances and liquidity to
investors and securities analysts. Such measure may not be
comparable to similar measures disclosed by other companies because
of differing methods used by other companies in calculating
Adjusted cash and deposits. These measures should not be considered
as a substitute for Cash and cash equivalents or other measures of
liquidity reported in accordance with U.S. GAAP.
|
|
|
June 30,
2024
|
|
December 31, 2023
(1)
|
|
(in
Millions)
|
(unaudited)
1
|
|
Arcadium Lithium Cash
and cash equivalents (GAAP)
|
$
380.4
|
|
$
237.6
|
|
Allkem Cash and cash
equivalents
|
—
|
|
681.4
|
|
Add:
|
|
|
|
|
Restricted cash in
Other non-current assets:
|
|
|
|
|
Project Loan Facility
guarantee - Stage 2 of Olaroz Plant (SDJ SA)
|
24.6
|
|
24.6
|
|
Project Financing
Facility guarantee - Sal de Vida (SDV SA) 2
|
—
|
|
32.5
|
|
Other
|
5.0
|
|
5.0
|
|
Less:
|
|
|
|
|
Nemaska Lithium Cash
and cash equivalents as of March 31, 2024 and
October 18, 2023, respectively, consolidated by Arcadium on a
one-quarter lag
|
(149.7)
|
|
(133.5)
|
|
Arcadium Lithium,
excluding Nemaska Lithium (3)
|
260.3
|
|
847.6
|
|
Nemaska Lithium Cash
and cash equivalents not on a one-quarter lag
(4)
|
41.3
|
|
44.2
|
|
Adjusted cash and
deposits (Non-GAAP) 3
|
$
301.6
|
|
$
891.8
|
|
|
|
|
|
|
|
|
|
|
1.
|
This unaudited
information of the combined company as of December 31, 2023 is for
illustrative purposes and was derived from the historical
consolidated financial information of Livent, Allkem and Nemaska
Lithium.
|
|
2.
|
On May 30,
2024, SDV SA paid the outstanding principal balance of
$47.0 million, a prepayment fee of $0.9 million and
accrued interest and commitment fees of $1.3 million to repay
the Project Financing Facility in its entirety.
|
|
3.
|
$137.6 million and
$176.9 million reserved or restricted at June 30, 2024 and December
31, 2023, respectively, to provide collateral or cash backing for
guarantees primarily on Allkem debt facilities, including $29.6
million and $62.1 million at June 30, 2024 and December 31, 2023,
respectively, in Other non-current assets in our condensed
consolidated balance sheet.
|
|
4.
|
The presentation
reflects NLI's actual balance at that date, not on a
one-quarter lag. This differs from Nemaska Lithium Cash and cash
equivalents included in Arcadium Lithium's condensed consolidated
balance sheet as of June 30, 2024 of $149.7 million,
representing NLI's balance as of March 31, 2024 as we consolidate
NLI on a one-quarter lag. On March 28, 2024, Nemaska Lithium
received cash of $150 million related to a second advance payment
in connection with a customer supply agreement repayable in equal
quarterly installments beginning in January 2027 and ending in
October 2031.
|
|
ARCADIUM LITHIUM
PLC
CONDENSED
CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
|
|
(in
Millions)
|
June 30,
2024
|
|
December 31, 2023
(1)
|
|
Cash and cash
equivalents
|
$
380.4
|
|
$
237.6
|
|
Trade receivables, net
of allowance of approximately $0.1 in 2024 and
$0.3 in 2023
|
94.1
|
|
106.7
|
|
Inventories
|
333.1
|
|
217.5
|
|
Other current
assets
|
264.0
|
|
86.4
|
|
Total current
assets
|
1,071.6
|
|
648.2
|
|
Investments
|
38.2
|
|
34.8
|
|
Property, plant and
equipment, net of accumulated depreciation of
$307.8 in 2024 and $269.1 in 2023
|
7,034.9
|
|
2,237.1
|
|
Right of use assets -
operating leases, net
|
53.7
|
|
6.8
|
|
Goodwill
|
1,300.3
|
|
120.7
|
|
Other intangibles,
net
|
56.6
|
|
53.4
|
|
Deferred income
taxes
|
32.7
|
|
1.4
|
|
Other assets
|
342.3
|
|
127.7
|
|
Total assets
|
$
9,930.3
|
|
$
3,230.1
|
|
|
|
|
|
Total current
liabilities
|
473.8
|
|
268.6
|
|
Long-term
debt
|
590.6
|
|
299.6
|
|
Contract liabilities -
long-term
|
253.8
|
|
217.8
|
|
Other long-term
liabilities
|
1,522.5
|
|
160.3
|
|
Total Arcadium Lithium
plc shareholders' equity
|
6,262.8
|
|
1,784.2
|
|
Noncontrolling
interests
|
826.8
|
|
499.6
|
|
Total liabilities and
equity
|
$
9,930.3
|
|
$
3,230.1
|
|
|
|
|
|
|
|
|
|
1.
|
Represents the
financial position of predecessor Livent as of December 31,
2023, which does not include the financial position of
Allkem.
|
|
ARCADIUM LITHIUM
PLC
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
|
Six Months Ended
June 30,
|
|
(in
Millions)
|
2024
|
|
2023 (1)
|
|
Cash (used in)/provided
by operating activities
|
$
(119.7)
|
|
$
181.6
|
|
Cash provided by/(used
in) investing activities
|
158.4
|
|
(180.2)
|
|
Cash provided by/(used
in) financing activities
|
119.6
|
|
(21.6)
|
|
Effect of exchange rate
changes on cash
|
(15.5)
|
|
(1.0)
|
|
Increase/(decrease) in
cash and cash equivalents
|
142.8
|
|
(21.2)
|
|
Cash and cash
equivalents, beginning of period
|
237.6
|
|
189.0
|
|
Cash and cash
equivalents, end of period
|
$
380.4
|
|
$
167.8
|
|
|
|
|
|
|
|
|
|
1.
|
Represents the results
of predecessor Livent's operations for three months ended March 31,
2023 which do not include the operations of Allkem.
|
|
ARCADIUM LITHIUM
PLC
LONG-TERM
DEBT
(Unaudited)
|
|
|
Interest Rate
Percentage
|
|
Maturity
Date
|
|
June 30,
2024
|
|
December 31,
2023(1)
|
|
(in
Millions)
|
SOFR
borrowings
|
|
Base rate
borrowings
|
|
|
|
|
|
|
|
|
|
Revolving Credit
Facility
|
7.19 %
|
|
9.25 %
|
|
|
|
2027
|
|
$
—
|
|
$
—
|
|
4.125% Convertible
Senior Notes due 2025
|
|
|
|
|
4.125 %
|
|
2025
|
|
245.8
|
|
245.8
|
|
Transaction costs -
2025 Notes
|
|
|
|
|
|
|
|
|
(1.6)
|
|
(2.4)
|
|
Nemaska - Prepayment
agreement - tranche 1
|
|
|
|
|
8.9 %
|
|
|
|
75.0
|
|
75.0
|
|
Discount - Prepayment
agreement
|
|
|
|
|
|
|
|
|
(19.4)
|
|
(19.8)
|
|
Nemaska - Prepayment
agreement - tranche 2
|
|
|
|
|
9.4 %
|
|
|
|
150.0
|
|
—
|
|
Discount - Prepayment
agreement
|
|
|
|
|
|
|
|
|
(53.4)
|
|
—
|
|
Nemaska -
Other
|
|
|
|
|
|
|
|
|
0.5
|
|
3.4
|
|
Debt assumed in Allkem
Livent Merger (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
Project Loan Facility -
Stage 1 of Olaroz Plant
|
|
|
|
|
4.90 %
|
|
2024
|
|
9.1
|
|
—
|
|
Project Loan Facility -
Stage 2 of Olaroz Plant
|
|
|
|
|
2.61 %
|
|
2029
|
|
144.0
|
|
—
|
|
Affiliate Loans with
TTC
|
|
|
|
|
15.25 %
|
|
2030
|
|
81.5
|
|
—
|
|
Affiliate Loan with
TLP
|
|
|
|
|
10.34 %
|
|
2026
|
|
2.5
|
|
—
|
|
Total debt assumed in
Allkem Livent Merger
|
|
|
|
|
|
|
|
|
237.1
|
|
—
|
|
Subtotal long-term debt
(including current
maturities)
|
|
|
|
|
|
|
|
|
634.0
|
|
302.0
|
|
Less current
maturities
|
|
|
|
|
|
|
|
|
(43.4)
|
|
(2.4)
|
|
Total long-term
debt
|
|
|
|
|
|
|
|
|
$
590.6
|
|
$
299.6
|
|
|
|
|
|
|
|
|
|
1.
|
Represents the
financial position of predecessor Livent as of December 31, 2023,
which does not include the financial position of Allkem.
|
|
2.
|
On May 30,
2024, SDV SA paid the outstanding principal balance of
$47.0 million, a prepayment fee of $0.9 million and
accrued interest and commitment fees of $1.3 million to repay
the Project Financing Facility in its entirety.
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SOURCE Arcadium Lithium PLC