The Chemours Company (“Chemours” or “the Company”) (NYSE: CC), a
global chemistry company with leading market positions in Titanium
Technologies (“TT”), Thermal & Specialized Solutions (“TSS”),
and Advanced Performance Materials (“APM”), today announced its
financial results for the first quarter 2024.
Key First Quarter 2024 Results
- Net Sales of $1.4 billion, down 12% year-over-year
- Net Income attributable to Chemours of $52 million, or $0.34
per diluted share, compared with $145 million, or $0.96 per diluted
share, in the corresponding prior-year quarter
- Adjusted EBITDA1,2 was $193 million, compared to $304 million
in the corresponding prior-year quarter
- Cash flows used in operations were $290 million, and capital
expenditures were $102 million
- Cash returned to shareholders through dividends of $37 million
in the quarter
“Net Sales for the first quarter were in line with our
expectations across all three of our segments. Consolidated
Adjusted EBITDA was higher than anticipated driven by the
allocation of TiO2 volumes to higher-yield regions, the timing of
lower-cost ore consumption, the strong execution of our TT
Transformation Plan, and lower-than-expected corporate costs,” said
Chemours CEO Denise Dignam. “TSS continued to see a strong adoption
of Opteon™ products in stationary and auto aftermarket applications
combined with seasonal demand strength. The APM orderbook remains
near its recent lows but reflects a modest recovery since year end.
We also remain focused on ramping capacity in our Performance
Solutions product portfolio to serve growing opportunities,
primarily in the semiconductor manufacturing market. Lastly, we
delivered significant efficiencies and cost reductions through our
TT Transformation Plan and remain focused on becoming one of the
lowest cost TiO2 producers globally.”
Total Chemours
Q1 2024
Q1 2023
Change
Net Sales (millions)
$1,350
$1,536
(12)%
Adjusted EBITDA1,2 (millions)
$193
$304
(37)%
Adjusted EBITDA Margin
14%
20%
(6) ppts
First quarter 2024 Net Sales of $1.4 billion were 12% lower than
the prior-year quarter, reflecting a 6% decrease in volumes,
coupled with a 5% decline in price, while portfolio impacts posed a
slight 1% headwind. The decrease in first quarter Net Sales was
primarily due to a 23% decline in APM Net Sales with TT
experiencing a 7% decline and TSS an 8% decline.
First quarter 2024 Net Income attributable to Chemours was $52
million, or $0.34 per diluted share, compared to $145 million in
the prior-year quarter, primarily driven by continued weakness in
APM and a softer start to the year in TSS, partially offset by the
contributions from TT cost reduction actions. Adjusted EBITDA for
the first quarter of 2024 was $193 million, compared to $304
million in the prior-year quarter. This decline was primarily
driven by Adjusted EBITDA performance in APM and TSS. Price and
volume declines drove a year-over-year decrease of 36%, while a 6%
reduction in costs was largely offset by currency, portfolio, and
other cost offsets3. Additionally, currency fluctuations
represented a 3%, or $8 million, headwind compared to the
prior-year quarter, due to a stronger USD.
________________________________ 1 Non-GAAP measures, including
Adjusted Net Income, Adjusted EPS, and Adjusted EBITDA, referred to
throughout, principally exclude the impact of recent litigation
settlements for legacy environmental matters and associated fees,
in addition to other unallocated items – please refer to the
attached "Reconciliation of GAAP Financial Measures to Non-GAAP
Financial Measures (Unaudited)”. 2 Adjusted EBITDA excludes net
income attributable to noncontrolling interests, net interest
expense, depreciation and amortization, and all remaining provision
for income taxes from Adjusted Net Income. See the corresponding
reconciliation referenced in footnote #1. 3 Total costs in the
first quarter of 2024 include a $5 million unallocated item related
to third-party costs associated with the TT Transformation Plan.
Titanium Technologies (TT)
Q1 2024
Q1 2023
Change
Net Sales (millions)
$588
$632
(7)%
Adjusted EBITDA (millions)
$70
$70
0%
Adjusted EBITDA Margin
12%
11%
1 ppt
TT segment first quarter 2024 Net Sales were $588 million, down
7% compared to the first quarter 2023. The decrease in Net Sales
was mainly attributable to a 7% decline in pricing, with volume and
currency remaining relatively flat. Price decreased versus the
prior-year period as index-based priced contractual stability was
more than offset by decreases in the market-exposed customer
portfolio. Volumes were flat when compared to the prior-year period
as strength in the Asia Pacific and the Europe, Middle East and
Africa regions was offset by weakness in North America and Latin
America.
Versus the prior-year quarter, Adjusted EBITDA was flat at $70
million, with Adjusted EBITDA Margin increasing by 1 percentage
point to 12%, primarily attributable to continued cost reductions
from the TT Transformation Plan, partially offset by the
aforementioned decrease in price.
On a sequential basis, Net Sales decreased by 10%, completely
driven by decreases in volume, with pricing remaining unchanged.
Adjusted EBITDA increased by 9% vs. the prior quarter, primarily
driven by actions to allocate TiO2 volumes to higher-yield regions,
the timing of lower-cost ore consumption, and cost reductions from
the TT Transformation Plan.
Thermal & Specialized Solutions
(TSS)
Q1 2024
Q1 2023
Change
Net Sales (millions)
$449
$486
(8)%
Adjusted EBITDA (millions)
$151
$185
(18)%
Adjusted EBITDA Margin
34%
38%
(4) ppts
TSS segment first quarter 2024 Net Sales were $449 million, down
8% compared to the first quarter 2023. The decrease in Net Sales
was driven by declines in volume and price of 6% and 2%,
respectively, with currency impact flat. Volumes decreased
primarily due to lower demand in the Foam, Propellants and Other
products portfolio and in the automotive original equipment
manufacturer (“OEM”) market, partially offset by increased demand
for Opteon™ products in stationary end markets. Price decreased
primarily due to weaker legacy refrigerant pricing, as well as
contractual pricing declines in the Opteon™ automotive OEM market.
These refrigerant product portfolio pricing dynamics were offset by
stronger Opteon™ blends pricing, consistent with stronger
stationary demand.
Versus the prior-year quarter, Adjusted EBITDA decreased 18% to
$151 million, with Adjusted EBITDA Margin down 4 percentage points
to 34% driven by the aforementioned decreases in price and volume,
as well as increased R&D investments in immersion cooling and
next generation refrigerants.
On a sequential basis, Net Sales increased by 20%, with price
and volume increasing 5% and 15%, respectively, reflecting seasonal
refrigerant demand trends. This increase was partially offset by
softer volumes in the Foam, Propellants and Other product portfolio
due to its exposure to construction markets, which remain weak.
Advanced Performance Materials
(APM)
Q1 2024
Q1 2023
Change
Net Sales (millions)
$299
$388
(23)%
Adjusted EBITDA (millions)
$30
$84
(64)%
Adjusted EBITDA Margin
10%
22%
(12) ppts
APM segment first quarter 2024 Net Sales were $299 million, down
23% compared to the first quarter 2023. The decrease in Net Sales
was due to an 18% decline in volume and a 5% decrease in price,
with currency impact flat. Volume decreased primarily due to weaker
demand in more economically sensitive and non-strategic end markets
and the tail impact of the previously disclosed extended
maintenance outage from the fourth quarter of 2023 that is now
resolved. Price decreased primarily due to mix and softer market
dynamics compared with the prior year.
First quarter 2024 Net Sales for the Performance Solutions
product portfolio were $113 million, down 22% vs. the prior-year
quarter. First quarter 2024 Net Sales for the Advanced Materials
product portfolio were $186 million, down 24% vs. the prior-year
quarter.
Versus the prior-year quarter, Adjusted EBITDA was $30 million,
down 64% year-over-year, with Adjusted EBITDA Margin down 12
percentage points to 10%, primarily attributable to the decrease in
price, lower fixed cost absorption from lower volume, and the
extended maintenance outage, partially offset by lower input
costs.
On a sequential basis, Net Sales decreased 8%, reflecting a 1%
decrease in price and an 8% decline in volume, with currency a
slight 1% tailwind. On the same basis, Net Sales for the
Performance Solutions product portfolio declined 16%, while Net
Sales for the Advanced Materials product portfolio declined 3%.
These declines were primarily driven by ongoing demand softness in
more economically sensitive end markets in the Advanced Materials
product portfolio and specific product lines within the Performance
Solutions product portfolio.
Other Segment
The Performance Chemicals and Intermediates business in the
Company’s Other Segment had Net Sales and Adjusted EBITDA for first
quarter 2024 of $14 million and $2 million, respectively.
Corporate Expenses
Corporate Expenses were a $55 million offset to Adjusted EBITDA
in the first quarter 2024, up $10 million vs. the prior-year
quarter. Corporate Expenses were approximately $25 million lower
than anticipated, primarily driven by the timing of costs incurred
related to the Audit Committee’s Internal Review and the
remediation of material weaknesses in internal controls over
financial reporting, which were approximately $14 million in the
quarter. This difference from this previous amount was also
attributable to lower stock-based compensation expenses, driven by
lower overall achieved performance and the negative discretion
exercised by the Chemours Board of Directors on the compensation of
former executives and the timing of certain environmental
remediation expenses.
Liquidity
As of March 31, 2024, consolidated gross debt was $4.1 billion.
Debt, net of $746 million in unrestricted cash and cash
equivalents, was $3.3 billion, resulting in a net leverage ratio of
approximately 3.7x times on a trailing twelve-month Adjusted EBITDA
basis. Total liquidity was $1.6 billion, comprised of $746 million
in unrestricted cash and cash equivalents and $853 million of
revolving credit facility capacity, net of outstanding letters of
credit. In addition, Chemours maintained $607 million in restricted
cash and restricted cash equivalents, primarily held in the Water
District Settlement Fund per the terms of the U.S. public water
system settlement agreement.
Cash used in operating activities for the first quarter 2024 was
$290 million, an increased usage of $166 million from the
prior-year quarter. Capital expenditures for the first quarter 2024
were $102 million vs. $91 million in the prior-year quarter. During
the quarter, the Company paid $37 million in dividends to
shareholders.
The Company exhibits a historical pattern of first-half working
capital use of cash, primarily driven by the timing of sales and
inventory seasonality. The Company currently expects unrestricted
cash and cash equivalents to remain relatively flat through the end
of the second quarter of 2024. The Company expects a working
capital source of cash in the second half of the year as it sells
product from inventory and collects receivables from customers.
Outlook
In the second quarter of 2024, the Company expects TT to achieve
sequential Net Sales growth of approximately 15%, reflecting the
previously communicated improvement in the Company’s TiO2
orderbook. Adjusted EBITDA growth is expected to be generally
in-line with the growth in Net Sales, with higher volumes and
improved fixed cost absorption, partially offset primarily by the
shift in timing of higher-cost ore consumption, much of which is
anticipated for the second quarter.
In TSS, the Company expects mid-teens sequential growth for both
Net Sales and Adjusted EBITDA in the second quarter of 2024, driven
by both seasonality and continued adoption of Opteon™ products. The
projected sequential growth for Adjusted EBITDA incorporates a
modest offset from higher input costs from non-Corpus Christi
sourced materials to support the transition to Opteon™, lower fixed
cost absorption on the Company’s legacy refrigerant production, and
ongoing investments in next generation refrigerants and immersion
cooling. This increased investment, primarily in R&D, is
anticipated to be approximately $15 million in 2024.
APM expects sequential Net Sales growth in the low-teens, driven
by growth in the Performance Solutions product portfolio, paired
with a slight improvement in the performance of the Advanced
Materials product portfolio, reflecting a modest recovery in end
markets. Adjusted EBITDA for the second quarter of 2024 is expected
to approach a 30% sequential increase in the APM business, as mix
and fixed cost absorption improve with higher volumes.
Corporate Expenses, as an offset to Adjusted EBITDA, for the
second quarter of 2024 are expected to be higher by approximately
$15 million to $20 million sequentially, reflecting a normalization
of expenses associated with the Company’s long-term incentive plan
and environmental remediation costs. Additionally, the Company
anticipates that expenses related to the remediation of material
weaknesses in internal controls over financial reporting and other
recommendations arising from the Audit Committee’s Internal Review
will be relatively flat quarter-over-quarter.
The Company expects Operating Cash Flow to reflect a total usage
of approximately $500 million in the second quarter of 2024. This
projected usage includes an expected outflow of $606 million
currently held as restricted cash and restricted cash equivalents,
which represents the Company’s prior contribution made in 2023,
including interest, to the Water District Settlement Fund. Pursuant
to the Settlement Agreement, the Company expects to no longer
maintain its reversionary interest in such fund during the second
quarter. At the point of the judgment becoming final, this amount
currently held as restricted cash and restricted cash equivalents
will be derecognized along with the associated accrued liability.
Second quarter capital expenditures are expected to be
approximately $80 million.
For the second quarter of 2024, the Company expects consolidated
Net Sales to increase approximately 15% sequentially, with
consolidated Adjusted EBITDA also up approximately 15% compared
with first quarter 2024 results.
Conference Call
As previously announced, Chemours will hold a conference call
and webcast on May 1, 2024, at 8:00 AM Eastern Daylight Time.
Access to the webcast and 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 Chemours’ investor website.
About The Chemours Company
The Chemours Company (NYSE: CC) is a global leader in Titanium
Technologies, Thermal & Specialized Solutions, and Advanced
Performance Materials, providing its customers with solutions in a
wide range of industries with market-defining products, application
expertise, and chemistry-based innovations. We deliver customized
solutions with a wide range of industrial and specialty chemicals
products for markets, including coatings, plastics, refrigeration
and air conditioning, transportation, semiconductor and consumer
electronics, general industrial, and oil and gas. Our flagship
products include prominent brands such as Ti-Pure™, Opteon™,
Freon™, Teflon™, Viton™, Nafion™, and Krytox™. The Company has
approximately 6,200 employees and 28 manufacturing sites, and
serves approximately 2,700 customers in approximately 110
countries. Chemours is headquartered in Wilmington, Delaware and is
listed on the NYSE under the symbol CC.
For more information, we invite you to visit chemours.com or
follow us on X (formerly 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, Adjusted EPS,
Adjusted EBITDA, Adjusted EBITDA Margin, Total Debt Principal, Net
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, Adjusted EPS,
Adjusted EBITDA, and Adjusted EBITDA Margin, which adjust for (i)
certain non-cash items, (ii) certain items we believe are not
indicative of ongoing operating performance or (iii) certain
nonrecurring, unusual or infrequent items to evaluate the Company's
performance in order to have comparable financial results to
analyze changes in our underlying business from period to period.
Additionally, Total Debt Principal, Net and Net Leverage Ratio are
utilized as liquidity measures to assess the cash generation of our
businesses and on-going liquidity position.
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. The Company does not provide a
reconciliation of forward-looking non-GAAP financial measures to
the most directly comparable GAAP reported financial measures on a
forward-looking basis because it is unable to predict with
reasonable certainty the ultimate outcome of unusual gains and
losses, potential future asset impairments and pending litigation
without unreasonable effort. These items are uncertain, depend on
various factors, and could have a material impact on GAAP reported
results for the guidance period. For more information on the
non-GAAP financial measures, please refer to the attached schedules
or the table, "Reconciliation of GAAP Financial Measures to
Non-GAAP Financial Measures (Unaudited)" 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 Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934, 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, guidance on Company and segment performance for the second
quarter of 2024. Forward-looking statements are based on certain
assumptions and expectations of future events that may not be
accurate or realized, such as guidance relying on models based upon
management assumptions regarding future events that are inherently
uncertain. These statements are not guarantees of future
performance. Forward-looking statements also involve risks and
uncertainties including 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,
remediation of material weaknesses and internal control over
financial reporting, 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 for our segments individually and our company as a
whole, business plans, prospects, targets, goals and commitments,
capital investments and projects and target capital expenditures,
plans for dividends or share repurchases, sufficiency or longevity
of intellectual property protection, cost reductions or savings
targets, plans to increase profitability and growth, our ability to
develop and commercialize new products or technologies and obtain
necessary regulatory approvals, our ability to make acquisitions,
integrate acquired businesses or assets into our operations, and
achieve anticipated synergies or cost savings, 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. These statements also may involve risks and
uncertainties that are beyond Chemours' control. Matters outside
our control, including general economic conditions, geopolitical
conditions and global health events, have affected or may affect
our business and operations and may or may continue to hinder our
ability to provide goods and services to customers, cause
disruptions in our supply chains such as through strikes, labor
disruptions or other events, adversely affect our business
partners, significantly reduce the demand for our products,
adversely affect the health and welfare of our personnel or cause
other unpredictable events. 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 Quarterly Report on Form 10-Q
for the quarter ended March 31, 2024, and in our Annual Report on
Form 10-K for the year ended December 31, 2023. Chemours assumes no
obligation to revise or update any forward-looking statement for
any reason, except as required by law.
The Chemours Company
Consolidated Statements of
Operations (Unaudited)
(Dollars in millions, except per
share amounts)
Three Months Ended March
31,
2024
2023
Net sales
$
1,350
$
1,536
Cost of goods sold
1,064
1,168
Gross profit
286
368
Selling, general, and administrative
expense
142
124
Research and development expense
28
26
Restructuring, asset-related, and other
charges
4
16
Total other operating expenses
174
166
Equity in earnings of affiliates
13
12
Interest expense, net
(63
)
(42
)
Other income, net
5
1
Income before income taxes
67
173
Provision for income taxes
15
28
Net income
52
145
Net income attributable to
Chemours
$
52
$
145
Per share data
Basic earnings per share of common
stock
$
0.35
$
0.97
Diluted earnings per share of common
stock
0.34
0.96
The Chemours Company
Consolidated Balance Sheets
(Unaudited)
(Dollars in millions, except per
share amounts)
March 31, 2024
December 31, 2023
Assets
Current assets:
Cash and cash equivalents
$
746
$
1,203
Restricted cash and restricted cash
equivalents
607
604
Accounts and notes receivable, net
792
610
Inventories
1,391
1,352
Prepaid expenses and other
61
66
Total current assets
3,597
3,835
Property, plant, and equipment
9,469
9,412
Less: Accumulated depreciation
(6,260
)
(6,196
)
Property, plant, and equipment, net
3,209
3,216
Operating lease right-of-use assets
252
260
Goodwill
102
102
Other intangible assets, net
3
3
Investments in affiliates
165
158
Other assets
650
677
Total assets
$
7,978
$
8,251
Liabilities
Current liabilities:
Accounts payable
$
963
$
1,159
Compensation and other employee-related
cost
79
89
Short-term and current maturities of
long-term debt
41
51
Current environmental remediation
129
129
Other accrued liabilities
1,019
1,058
Total current liabilities
2,231
2,486
Long-term debt, net
3,968
3,987
Operating lease liabilities
198
206
Long-term environmental remediation
452
461
Deferred income taxes
44
44
Other liabilities
331
328
Total liabilities
7,224
7,512
Commitments and contingent liabilities
Equity
Common stock (par value $0.01 per share;
810,000,000 shares authorized; 197,711,836 shares issued and
148,779,449 shares outstanding at March 31, 2024; 197,519,784
shares issued and 148,587,397 shares outstanding at December 31,
2023)
2
2
Treasury stock, at cost (48,932,387 shares
at March 31, 2024 and December 31, 2023)
(1,806
)
(1,806
)
Additional paid-in capital
1,033
1,033
Retained earnings
1,797
1,782
Accumulated other comprehensive loss
(274
)
(274
)
Total Chemours stockholders’ equity
752
737
Non-controlling interests
2
2
Total equity
754
739
Total liabilities and equity
$
7,978
$
8,251
The Chemours Company
Consolidated Statements of
Cash Flows (Unaudited)
(Dollars in millions)
Three Months Ended March
31,
2024
2023
Cash flows from operating
activities
Net income
$
52
$
145
Adjustments to reconcile net income to
cash (used for) provided by operating activities:
Depreciation and amortization
71
79
Gain on sales of assets and businesses
(3
)
—
Equity in earnings of affiliates, net
(11
)
(9
)
Amortization of debt issuance costs and
issue discounts
3
2
Deferred tax (benefit) provision
(1
)
1
Asset-related charges
—
11
Stock-based compensation expense
1
4
Net periodic pension cost
1
2
Defined benefit plan contributions
(4
)
(5
)
Other operating charges and credits,
net
(11
)
(4
)
Decrease (increase) in operating
assets:
Accounts and notes receivable, net
(177
)
(205
)
Inventories and other current operating
assets
(34
)
(52
)
Other non-current operating assets
31
20
(Decrease) increase in operating
liabilities:
Accounts payable
(157
)
(44
)
Other current operating liabilities
(46
)
(72
)
Other non-current operating
liabilities
(5
)
3
Cash used for operating activities
(290
)
(124
)
Cash flows from investing
activities
Purchases of property, plant, and
equipment
(102
)
(91
)
Proceeds from sales of assets and
businesses
3
—
Foreign exchange contract settlements,
net
(2
)
(6
)
Cash used for investing activities
(101
)
(97
)
Cash flows from financing
activities
Debt repayments
(3
)
(3
)
Payments on finance leases
(3
)
(3
)
Proceeds from supplier financing
program
27
23
Payments to supplier financing program
(37
)
(18
)
Purchases of treasury stock, at cost
—
(14
)
Proceeds from exercised stock options,
net
1
2
Payments related to tax withholdings on
vested stock awards
(2
)
(18
)
Payments of dividends to the Company's
common shareholders
(37
)
(37
)
Cash used for financing activities
(54
)
(68
)
Effect of exchange rate changes on cash,
cash equivalents, restricted cash and restricted cash
equivalents
(9
)
6
Decrease in cash, cash equivalents,
restricted cash and restricted cash equivalents
(454
)
(283
)
Cash, cash equivalents, restricted cash
and restricted cash equivalents at January 1,
1,807
1,304
Cash, cash equivalents, restricted cash
and restricted cash equivalents at March 31,
$
1,353
$
1,021
Supplemental cash flows
information
Non-cash investing and financing
activities:
Purchases of property, plant, and
equipment included in accounts payable
$
44
$
34
Certain prior period amounts have been revised to correct for
certain immaterial errors related to the financial statement
presentation of a supplier financing program, which is more fully
described in our Annual Report on Form 10-K for the year ended
December 31, 2023. Certain prior period amounts have been
reclassified to conform to the current period presentation, the
effect of which was not material to the Company’s interim
consolidated financial statements.
The Chemours Company
Segment Financial and
Operating Data (Unaudited)
(Dollars in millions)
Segment Net Sales
Three Months
Ended
Sequential
Three Months Ended March
31,
Increase /
December 31,
Increase /
2024
2023
(Decrease)
2023
(Decrease)
Titanium Technologies
$
588
$
632
$
(44
)
$
651
$
(63
)
Thermal & Specialized Solutions
449
486
(37
)
374
75
Advanced Performance Materials
299
388
(89
)
325
(26
)
Other Segment
14
30
(16
)
11
3
Total Net Sales
$
1,350
$
1,536
$
(186
)
$
1,361
$
(11
)
Segment Adjusted EBITDA
Three Months
Ended
Sequential
Three Months Ended March
31,
Increase /
December 31,
Increase /
2024
2023
(Decrease)
2023
(Decrease)
Titanium Technologies
$
70
$
70
$
—
$
64
$
6
Thermal & Specialized Solutions
$
151
$
185
$
(34
)
$
124
$
27
Advanced Performance Materials
$
30
$
84
$
(54
)
$
40
$
(10
)
Other Segment
$
2
$
10
$
(8
)
$
—
$
2
Quarterly Change in Net Sales from the
three months ended March 31, 2023
March 31, 2024
Percentage Change vs.
Percentage Change Due
To
Net Sales
March 31, 2023
Price
Volume
Currency
Portfolio
Total Company
$
1,350
(12
)%
(5
)%
(6
)%
—
%
(1
)%
Titanium Technologies
$
588
(7
)%
(7
)%
—
%
—
%
—
%
Thermal & Specialized Solutions
449
(8
)%
(2
)%
(6
)%
—
%
—
%
Advanced Performance Materials
299
(23
)%
(5
)%
(18
)%
—
%
—
%
Other Segment
14
(53
)%
3
%
(14
)%
—
%
(42
)%
Quarterly Change in Net Sales from the
three months ended December 31, 2023
March 31, 2024
Percentage Change vs.
Percentage Change Due
To
Net Sales
December 31, 2023
Price
Volume
Currency
Portfolio
Total Company
$
1,350
(1
)%
1
%
(2
)%
—
%
—
%
Titanium Technologies
$
588
(10
)%
—
%
(10
)%
—
%
—
%
Thermal & Specialized Solutions
449
20
%
5
%
15
%
—
%
—
%
Advanced Performance Materials
299
(8
)%
(1
)%
(8
)%
1
%
—
%
Other Segment
14
27
%
(9
)%
36
%
—
%
—
%
The Chemours Company
Reconciliation of GAAP
Financial Measures to Non-GAAP Financial Measures
(Unaudited)
(Dollars in millions)
GAAP Net
Income (Loss) Attributable to Chemours to Adjusted Net Income and
Adjusted EBITDA Reconciliation
GAAP Net
Leverage Ratio to Non-GAAP Net Leverage Ratio
Reconciliation
Adjusted earnings before interest, taxes, depreciation, and
amortization (“Adjusted EBITDA”) is defined as income (loss) before
income taxes, excluding the following items: interest expense,
depreciation, and amortization; non-operating pension and other
post-retirement employee benefit costs, which represents the
components of net periodic pension costs excluding the service cost
component; exchange (gains) losses included in other income
(expense), net; restructuring, asset-related, and other charges;
(gains) losses on sales of businesses or assets; and, other items
not considered indicative of the Company’s ongoing operational
performance and expected to occur infrequently, including certain
litigation related and environmental charges and Qualified Spend
reimbursable by DuPont and/or Corteva as part of the Company's
cost-sharing agreement under the terms of the MOU that were
previously excluded from Adjusted EBITDA. Adjusted Net Income is
defined as net income (loss) attributable to Chemours, adjusted for
items excluded from Adjusted EBITDA, except interest expense,
depreciation, amortization, and certain provision for (benefit
from) income tax amounts. Net Leverage Ratio is defined as our
total debt principal, net, or our total debt principal outstanding
less unrestricted cash and cash equivalents, divided by Adjusted
EBITDA.
Three Months Ended
Twelve Months Ended
March 31,
December 31,
March 31,
2024
2023
2023
2024
2023
Income (loss) before income
taxes
$
67
$
173
$
(71
)
$
(424
)
$
634
Net income (loss) attributable to
Chemours
52
145
(18
)
(330
)
489
Non-operating pension and other
post-retirement employee benefit income
(1
)
—
(1
)
(1
)
(4
)
Exchange (gains) losses, net
(1
)
7
17
30
23
Restructuring, asset-related, and other
charges (1)
4
16
11
141
15
Loss (gain) on extinguishment of debt
—
—
—
1
(7
)
Gain on sales of assets and businesses,
net (2)
(3
)
—
(4
)
(113
)
(21
)
Transaction costs (3)
—
—
9
16
—
Qualified spend recovery (4)
(7
)
(14
)
(11
)
(47
)
(58
)
Litigation-related charges (5)
—
1
89
764
21
Environmental charges (6)
—
—
—
9
198
Adjustments made to income taxes (7)
2
(4
)
(14
)
(13
)
30
Provision for (benefit from) income taxes
relating to reconciling items (8)
2
(3
)
(32
)
(131
)
(40
)
Adjusted Net Income
48
148
46
326
646
Net income attributable to non-controlling
interests
—
—
—
1
—
Interest expense, net
63
42
63
229
164
Depreciation and amortization
71
79
74
299
297
All remaining provision for (benefit from)
income taxes
11
35
(7
)
49
155
Adjusted EBITDA
$
193
$
304
$
176
$
904
$
1,262
Total debt principal
$
4,051
$
3,673
Less: Cash and cash equivalents
(746
)
(816
)
Total debt principal, net
$
3,305
$
2,857
Net Leverage Ratio (calculated using
GAAP earnings) (9)
(7.8x)
4.5x
Net Leverage Ratio (calculated using
Non-GAAP earnings) (9)
3.7x
2.3x
GAAP Net
Income (Loss) Attributable to Chemours to Adjusted Net Income and
Adjusted EBITDA Reconciliation
GAAP Net
Leverage Ratio to Non-GAAP Net Leverage Ratio Reconciliation
(Continued)
(1)
Refer to "Note 4 – Restructuring, Asset-related, and Other Charges"
to the Interim Consolidated Financial Statements in our Quarterly
Report on Form 10-Q for the quarter ended March 31, 2024 for
further details. For the quarter ended March 31, 2023,
restructuring, asset-related, and other charges primarily includes
charges related to our decision to abandon implementation of our
new ERP software platform. For the twelve months ended March 31,
2024, restructuring, asset-related, and other charges primarily
includes charges related to the Titanium Technologies
Transformation Plan, charges related to our decision to abandon
implementation of our new ERP software platform, shutdown of a
production line at the Company's El Dorado site and the charges
related to the 2023 and 2022 Restructuring Programs. For the twelve
months ended March 31, 2023, restructuring, asset-related, and
other charges primarily includes asset charges and write-offs
resulting from the conflict between Russia and Ukraine and the
Company’s decision to suspend its business with Russian entities.
(2)
For the twelve months ended March 31, 2024, gain on sales of assets
and businesses, net includes pre-tax gain on sale of $106 million
related to the Glycolic Acid Transaction. For the twelve months
ended March 31, 2023, gain on sales of assets and businesses, net
includes pre-tax gain on sale of $5 million related to the Beaumont
Transaction and $18 million related to the Pascagoula Transaction.
(3)
For the twelve months ended March 31, 2024, transaction costs
includes $7 million of costs associated with the New Senior Secured
Credit Facilities entered into during 2023, which is discussed in
further detail in "Note 20 – Debt" to the Consolidated Financial
Statements in our Annual Report on Form 10-K, and $9 million of
third-party costs related to the Titanium Technologies
Transformation Plan.
(4)
Qualified spend recovery represents costs and expenses that were
previously excluded from Adjusted EBITDA, reimbursable by DuPont
and/or Corteva as part of our cost-sharing agreement under the
terms of the MOU which is discussed in further detail in "Note 16 –
Commitments and Contingent Liabilities" to the Interim Consolidated
Financial Statements in our Quarterly Report on Form 10-Q for the
quarter ended March 31, 2024.
(5)
Litigation-related charges pertains to litigation settlements, PFOA
drinking water treatment accruals, and other related legal fees.
For the twelve months ended March 31, 2024, litigation-related
charges includes the $592 million accrual related to the United
States Public Water System Class Action Suit Settlement plus $24
million of third-party legal fees directly related to the
settlement, $55 million of charges related to the Company's portion
of Chemours, DuPont, Corteva, EID and the State of Ohio's agreement
entered into in November 2023, $13 million related to the Company's
portion of the supplemental payment to the State of Delaware, $76
million for other PFAS litigation matters, and $4 million of other
litigation matters. For the twelve months ended March 31, 2024,
litigation-related charges primarily include proceeds from a
settlement in a patent infringement matter relating to certain
copolymer patents associated with the Company’s Advanced
Performance Materials segment and $20 million associated with the
Company's portion of the potential loss in the single matter not
included in the Leach settlement. See “Note 22 – Commitments and
Contingent Liabilities” to the Consolidated Financial Statements in
our Annual Report on Form 10-K for the year ended December 31, 2023
for further details.
(6)
Environmental charges pertains to management’s assessment of
estimated liabilities associated with certain environmental
remediation expenses at various sites. For the twelve months ended
March 31, 2023, environmental charges include $203 million related
to on-site and off-site remediation costs at Fayetteville. See
“Note 22 – Commitments and Contingent Liabilities” to the
Consolidated Financial Statements in our Annual Report on Form 10-K
for the year ended December 31, 2023 for further details.
(7)
Includes the removal of certain discrete income tax impacts within
our provision for income taxes, such as shortfalls and windfalls on
our share-based payments, certain return-to-accrual adjustments,
valuation allowance adjustments, unrealized gains and losses on
foreign exchange rate changes, and other discrete income tax items.
(8)
The income tax impacts included in this caption are determined
using the applicable rates in the taxing jurisdictions in which
income or expense occurred for each of the reconciling items and
represent both current and deferred income tax expense or benefit
based on the nature of the non-GAAP financial measure.
(9)
Net Leverage Ratio calculated using GAAP measures is defined as our
total debt principal, net, or our total debt principal outstanding
less unrestricted cash and cash equivalents, divided by income
(loss) before income taxes. Net Leverage Ratio calculated using
non-GAAP measures is defined as our total debt principal, net, or
our total debt principal outstanding less unrestricted cash and
cash equivalents, divided by Adjusted EBITDA.
Reconciliation of GAAP
Financial Measures to Non-GAAP Financial Measures
(Unaudited)
(Dollars in millions, except per
share amounts)
GAAP
Earnings per Share to Adjusted Earnings per Share
Reconciliation
Adjusted earnings per share (“Adjusted EPS”) is calculated by
dividing Adjusted Net Income by the weighted-average number of
common shares outstanding. Diluted Adjusted EPS accounts for the
dilutive impact of stock-based compensation awards, which includes
unvested restricted shares. Diluted Adjusted EPS considers the
impact of potentially-dilutive securities, except in periods in
which there is a loss because the inclusion of the
potentially-dilutive securities would have an anti-dilutive
effect.
Three Months Ended
March 31,
December 31,
2024
2023
2023
Numerator:
Net income (loss) attributable to
Chemours
$
52
$
145
$
(18)
Adjusted Net Income
48
148
46
Denominator:
Weighted-average number of common shares
outstanding - basic
149,035,200
148,997,084
148,861,410
Dilutive effect of the Company's employee
compensation plans (1)
1,015,169
2,182,181
1,078,467
Weighted-average number of common shares
outstanding - diluted (1)
150,050,369
151,179,265
149,939,877
Basic earnings (loss) per share of common
stock (2)
$
0.35
$
0.97
$
(0.12)
Diluted earnings (loss) per share of
common stock (1) (2)
0.34
0.96
(0.12)
Adjusted basic earnings per share of
common stock (2)
0.32
0.99
0.31
Adjusted diluted earnings per share of
common stock (1) (2)
0.32
0.98
0.31
(1)
In periods where the Company incurs a net loss, the impact of
potentially dilutive securities is excluded from the calculation of
EPS under U.S. GAAP, as their inclusion would have an anti-dilutive
effect. As such, with respect to the U.S. GAAP measure of diluted
EPS, the impact of potentially dilutive securities is excluded from
our calculation for the three months ended December 31, 2023. With
respect to the non-GAAP measure of adjusted diluted EPS, the impact
of potentially dilutive securities is included in our calculation
for the three months ended December 31, 2023 as Adjusted Net Income
was in a net income position.
(2)
Figures may not recalculate exactly due to rounding. Basic and
diluted earnings per share are calculated based on unrounded
numbers.
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version on businesswire.com: https://www.businesswire.com/news/home/20240430814447/en/
INVESTORS Brandon Ontjes Vice President, Investor
Relations +1.302.773.3309 investor@chemours.com
Kurt Bonner Manager, Investor Relations +1.302.773.0026
investor@chemours.com
NEWS MEDIA Cassie Olszewski Corporate Media & Brand
Reputation Leader +1.302.219.7140 media@chemours.com
Chemours (NYSE:CC)
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