Volume growth and restructuring savings drive year-over-year
earnings improvement
Second Quarter 2024 Highlights
- Revenue of $1.04 billion, up 2
percent versus Q2 2023 and up 4 percent
organically1
- Consolidated GAAP net income of $295
million
- Adjusted EBITDA of $202 million,
up 8 percent versus Q2 2023
- Consolidated GAAP income of $2.35
per diluted share
- Adjusted earnings per diluted share of $0.63, up 26 percent versus Q2 2023
- GAAP cash from operations of $292
million, an increase of $161
million versus Q2 2023
- Free cash flow of $280 million,
an improvement of $187 million versus
Q2 2023
Full-Year Outlook2
- Updates revenue outlook to range of $4.30 billion to $4.50
billion, reflecting a 2 percent decline at the midpoint
versus 2023
- Reduces adjusted EBITDA range to $880
million to $940 million, a
decline of 7 percent at the midpoint versus 2023
- Lowers adjusted earnings per diluted share outlook to a range
of $3.02 to $3.64, a decline of 12 percent at the midpoint
versus 2023
- Increases restructuring benefit target to a range of
$75 million to $100 million of adjusted EBITDA net benefit
- Updates free cash flow range to $400
million to $500 million
PHILADELPHIA, July 31,
2024 /PRNewswire/ --
FMC Corporation (NYSE:FMC) today reported second quarter 2024
revenue of $1.04 billion, up 2
percent versus second quarter 2023, and up 4 percent organically.
On a GAAP basis, the company reported income of $2.35 per diluted share in the second quarter, an
increase of 879 percent versus the second quarter of 2023 due to
additional benefits related to tax incentives granted to the
company's Swiss subsidiaries in late 2023. Second quarter adjusted
earnings were $0.63 per diluted
share, up 26 percent versus second quarter 2023.
|
Second Quarter
Adjusted EPS versus Q2 2023
|
+13
cents
|
|
Adjusted
EBITDA
|
+10 cents
|
|
Depreciation &
Amortization
|
+3 cents
|
|
Interest
Expense
|
+1 cent
|
|
Noncontrolling
Interest
|
+1 cent
|
|
Rounding
|
-2 cents
|
"Demand improved during the second quarter, resulting in a
pronounced increase in our sales volumes, most notably within
the United States and Brazil, despite customers continuing to
actively manage inventory," said Pierre Brondeau, FMC chairman and
chief executive officer. "Higher sales, as well as cost benefits
from our ongoing restructuring, led to adjusted EBITDA toward the
high end of our guidance range."
Second quarter revenue growth was driven by a 14 percent
increase in volume versus the prior year period when global
destocking was first observed. Volume growth was partially offset
by 10 percent lower price and a foreign currency headwind of 2
percent. Lower price was driven by competitive pressure as demand
returned and one-time incentives to customers to help them lower
the cost of inventory in the channel.
North America sales increased
24 percent due to higher volume, mainly in herbicides. Sales of new
products introduced (NPI3) in the last five years grew
strongly including contributions from new diamide insecticide
formulations and fluindapyr-based fungicides. In Latin America, revenue grew 14 percent (up 15
percent, excluding FX) due to higher volumes, almost entirely in
Brazil. Volume growth was
partially offset by lower price and an FX headwind. Branded
diamides and NPI3 both delivered strong growth in the
region. Asia sales declined by 28
percent (down 24 percent, excluding FX) due to lower volumes,
primarily in India, from ongoing
channel destocking and lower price. Sales in EMEA declined 3
percent (flat to the prior year, excluding FX). The region's
revenue grew in the low-teens percent, excluding sales made to
diamide partners, driven by higher volume. Plant Health revenue was
flat to the prior year with growth in biologicals.
FMC
Revenue
|
Q2
2024
|
|
Total Revenue Change
(GAAP)
|
2 %
|
|
Less FX
Impact
|
(2) %
|
|
Organic1 Revenue Change
(Non-GAAP)
|
4 %
|
The company's second quarter adjusted EBITDA was $202 million, an increase of 8 percent from the
prior-year period. Higher sales volume as well as cost benefits
from restructuring actions more than offset lower pricing and COGS
headwinds due to sales of higher-cost inventory from prior
year.
On a GAAP basis, cash from operations was $292 million, an increase of $161 million versus 2023, due to improvement in
working capital and higher earnings. Higher cash from operations
resulted in free cash flow of $280
million in the quarter. As of June
30, year-to-date free cash flow of $93 million is approximately $915 million higher than prior year.
Full Year 2024 Outlook2
The company has updated its full-year 2024 revenue outlook to be
in the range of $4.30 billion to
$4.50 billion, representing a
decrease of 2 percent at the midpoint versus 2023. Versus the prior
year, mid-single digit volume growth is expected to be more than
offset by price and FX. The revised revenue guidance is 4
percent lower at the midpoint versus prior guidance to reflect
lower first half sales and delayed demand recovery.
The company has reduced full-year adjusted EBITDA guidance to a
range of $880 million and
$940 million, a 7 percent decline at
the midpoint versus both prior year and prior guidance, due to the
lower revenue outlook. Benefits from restructuring are now expected
to contribute $75 million to
$100 million, net of inflation, to
full-year adjusted EBITDA, an increase of $25 million at the midpoint from the prior
expectation. The revised 2024 adjusted earnings outlook is now
$3.02 to $3.64 per diluted share, representing a
year-over-year decrease of 12 percent at the midpoint due primarily
to lower earnings. The company is also adjusting its full-year
free cash flow guidance to a range of $400
million to $500 million
primarily to account for lower expected adjusted EBITDA.
Second Half 2024 Outlook2
Sales in the second half of 2024 are expected to be in the range
of $2.34 billion to $2.54 billion, a 15 percent increase at the
midpoint versus prior year. Higher volume from strong growth
of new products and improving market conditions are expected to
more than offset low-single digit pricing pressure and FX
headwinds. Despite lower price on a year-on-year basis, pricing
levels are expected to be similar to the second quarter. Adjusted
EBITDA in the second half is forecasted to be $518 million to $578
million, representing growth of 28 percent at the midpoint
versus the second half of 2023.
Third quarter revenue is expected to be in the range of
$1.00 billion to $1.09 billion, an increase of 6 percent at the
midpoint compared to the third quarter of 2023, driven by volume
growth. Price is expected to be a low-single digit headwind versus
prior year. Adjusted EBITDA is forecasted to be in the range
of $165 million to $195 million, an increase of 3 percent versus the
prior-year period as volume recovery more than offsets unfavorable
costs and lower price. Estimated COGS headwinds are forecasted at
approximately $40 million and are
mainly due to unabsorbed fixed costs related to reduced
manufacturing activity in the second half of 2023. This is expected
to more than offset the cost benefits from restructuring actions
and lead to overall unfavorable costs for the period. FMC
expects adjusted earnings per diluted share to be in the range of
$0.39 to $0.67 in the third quarter, which represents
a 20 percent increase at the midpoint versus the third quarter of
2023.
Fourth quarter revenue is expected to be in the range of
$1.34 billion to $1.45 billion, an increase of 22 percent at the
midpoint compared to the fourth quarter 2023, with volume growth
from products launched in the last five years as well continued
demand improvement. Price is expected to be lower by low-single
digits versus the prior year. Adjusted EBITDA is forecasted to be
in the range of $353 million to
$383 million, an increase of 45
percent at the midpoint versus the prior-year period due to higher
volume and restructuring benefits. Costs overall are a modest
tailwind in the quarter. FMC expects adjusted earnings per diluted
share to be in the range of $1.64 to
$1.96, which represents a 68 percent
increase at the midpoint versus fourth quarter 2023.
|
Full-Year
2024
Outlook2
|
Second-Half
Outlook2
|
Third
Quarter
Outlook2
|
Fourth
Quarter
Outlook2
|
|
Revenue
|
$4.30 to $4.50
billion
|
$2.34 to $2.54
billion
|
$1.00 to $1.09
billion
|
$1.34 to $1.45
billion
|
|
Growth at midpoint
vs. 2023
|
-2 %
|
15 %
|
6 %
|
22 %
|
|
Adjusted
EBITDA
|
$880 million
to
$940
million
|
$518 to $578
million
|
$165 to $195
million
|
$353 to $383
million
|
|
Growth at midpoint
vs. 2023
|
-7 %
|
28 %
|
3 %
|
45 %
|
|
Adjusted
EPS^
|
$3.02 to
$3.64
|
$2.03 to
$2.63
|
$0.39 to
$0.67
|
$1.64 to
$1.96
|
|
Growth at midpoint
vs. 2023
|
-12 %
|
54 %
|
20 %
|
68 %
|
|
|
^ EPS estimates
assume 125.3 million diluted shares for full year, Q3 and Q4. EPS
totals may not sum due to rounding.
|
"Based on our performance in the second quarter and the current
orders-in-hand for the second half, it is clear that demand is
recovering, although slower than originally anticipated," said
Brondeau. "We expect demand to increase as the year progresses even
as customers maintain a careful approach of managing inventory. Our
revised guidance reflects more modest market improvement with our
differentiated product portfolio and restructuring actions driving
earnings growth and placing us in a strong position for 2025."
Supplemental Information
The company will post supplemental information on the web at
https://investors.fmc.com, including its webcast slides for
tomorrow's earnings call, definitions of non-GAAP terms and
reconciliations of non-GAAP figures to the nearest available GAAP
term.
About FMC
FMC Corporation is a global agricultural sciences company
dedicated to helping growers produce food,
feed, fiber and fuel for an expanding world population
while adapting to a changing environment. FMC's innovative
crop protection solutions – including biologicals, crop nutrition,
digital and precision agriculture – enable growers, crop advisers
and turf and pest management professionals to address their
toughest challenges economically while protecting the environment.
With approximately 5,800 employees at more than 100 sites
worldwide, FMC is committed to discovering new herbicide,
insecticide and fungicide active ingredients, product formulations
and pioneering technologies that are consistently better for the
planet. Visit fmc.com to learn more and follow us
on LinkedIn®.
Statement under the Safe Harbor Provisions of the Private
Securities Litigation Reform Act of 1995: FMC and its
representatives may from time to time make written or oral
statements that are "forward-looking" and provide other than
historical information, including statements contained in this
press release, in FMC's other filings with the SEC, and in
presentations, reports or letters to FMC stockholders.
In some cases, FMC has identified these forward-looking
statements by such words or phrases as "outlook", "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 or phrases. Such forward-looking statements are based
on our current views and assumptions regarding future events,
future business conditions and the outlook for the company based on
currently available information. The forward-looking statements
involve known and unknown risks, uncertainties and other factors
that may cause actual results to be materially different from any
results, levels of activity, performance or achievements expressed
or implied by any forward-looking statement. These statements are
qualified by reference to the risk factors included in Part I, Item
1A of our Annual Report on Form 10-K for the year ended
December 31, 2023 (the "2023 Form
10-K"), the section captioned "Forward-Looking Information" in Part
II of the 2023 Form 10-K and to similar risk factors and cautionary
statements in all other reports and forms filed with the Securities
and Exchange Commission ("SEC"). We wish to caution readers not to
place undue reliance on any such forward-looking statements, which
speak only as of the date made. Forward-looking statements
are qualified in their entirety by the above cautionary
statement.
We specifically decline to undertake any obligation, and
specifically disclaims any duty, to publicly update or revise any
forward-looking statements that have been made to reflect events or
circumstances after the date of such statements or to reflect the
occurrence of anticipated or unanticipated events, except as may be
required by law.
This press release contains certain "non-GAAP financial
terms" which are defined on our website www.fmc.com/investors. Such
terms include adjusted EBITDA, adjusted earnings, free cash flow
and organic revenue growth. In addition, we have also provided on
our website reconciliations of non-GAAP terms to the most directly
comparable GAAP term.
- Organic revenue growth (non-GAAP) excludes the impact of
foreign currency changes.
- Although we provide forecasts for adjusted earnings per share,
adjusted EBITDA, and free cash flow (non-GAAP financial measures),
we are not able to forecast 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 us to forecast. Such elements include, but are
not limited to, restructuring, acquisition charges, and
discontinued operations. As a result, no GAAP outlook is
provided.
- New Product Introductions (NPI) – products launched in the last
five years
|
FMC
CORPORATION
CONSOLIDATED
STATEMENTS OF INCOME (LOSS)
(Unaudited, in
millions, except per share amounts)
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Revenue
|
$
1,038.4
|
|
$
1,014.5
|
|
$
1,956.4
|
|
$
2,358.8
|
|
Costs of sales and
services
|
640.3
|
|
581.7
|
|
1,218.6
|
|
1,344.7
|
|
Gross margin
|
$ 398.1
|
|
$ 432.8
|
|
$ 737.8
|
|
$
1,014.1
|
|
Selling, general and
administrative expenses
|
164.8
|
|
205.6
|
|
328.7
|
|
391.5
|
|
Research and
development expenses
|
75.9
|
|
87.7
|
|
136.8
|
|
166.1
|
|
Restructuring and other
charges (income)
|
95.1
|
|
7.3
|
|
136.0
|
|
19.8
|
|
Total costs and
expenses
|
$ 976.1
|
|
$ 882.3
|
|
$
1,820.1
|
|
$
1,922.1
|
|
Income from continuing operations before
non-operating
pension and postretirement charges (income), interest
expense,
net and income taxes
|
$
62.3
|
|
$
132.2
|
|
$
136.3
|
|
$ 436.7
|
|
Non-operating pension
and postretirement charges (income)
|
4.2
|
|
4.6
|
|
8.5
|
|
9.2
|
|
Interest expense,
net
|
63.6
|
|
64.5
|
|
125.3
|
|
115.9
|
|
Income (loss) from continuing operations before
income taxes
|
$
(5.5)
|
|
$
63.1
|
|
$
2.5
|
|
$ 311.6
|
|
Provision (benefit) for
income taxes
|
(303.5)
|
|
9.2
|
|
(304.9)
|
|
50.3
|
|
Income (loss) from
continuing operations
|
$ 298.0
|
|
$
53.9
|
|
$ 307.4
|
|
$ 261.3
|
|
Discontinued
operations, net of income taxes
|
(2.8)
|
|
(21.5)
|
|
(15.3)
|
|
(33.0)
|
|
Net income (loss)
|
$
295.2
|
|
$
32.4
|
|
$
292.1
|
|
$ 228.3
|
|
Less: Net income
(loss) attributable to noncontrolling interests
|
0.1
|
|
1.9
|
|
(0.3)
|
|
1.8
|
|
Net income (loss) attributable to FMC
stockholders
|
$
295.1
|
|
$
30.5
|
|
$
292.4
|
|
$ 226.5
|
|
Amounts attributable to FMC
stockholders:
|
|
|
|
|
|
|
|
|
Income (loss)
from continuing operations
|
$ 297.9
|
|
$
52.0
|
|
$ 307.7
|
|
$ 259.5
|
|
Discontinued
operations, net of tax
|
(2.8)
|
|
(21.5)
|
|
(15.3)
|
|
(33.0)
|
|
Net income (loss)
|
$
295.1
|
|
$
30.5
|
|
$
292.4
|
|
$ 226.5
|
|
Basic earnings (loss) per common share attributable
to FMC
stockholders:
|
|
|
|
|
|
|
|
|
Continuing
operations
|
$
2.37
|
|
$
0.41
|
|
$
2.45
|
|
$ 2.07
|
|
Discontinued
operations
|
(0.02)
|
|
(0.17)
|
|
(0.12)
|
|
(0.26)
|
|
Basic earnings per common
share
|
$
2.35
|
|
$
0.24
|
|
$
2.33
|
|
$
1.81
|
|
Average number of
shares outstanding used in basic earnings per
share
computations
|
125.0
|
|
125.1
|
|
125.0
|
|
125.2
|
|
Diluted earnings (loss) per common share attributable
to FMC
stockholders:
|
|
|
|
|
|
|
|
|
Continuing
operations
|
$
2.37
|
|
$
0.41
|
|
$
2.45
|
|
$ 2.06
|
|
Discontinued
operations
|
(0.02)
|
|
(0.17)
|
|
(0.12)
|
|
(0.26)
|
|
Diluted earnings per common
share
|
$
2.35
|
|
$
0.24
|
|
$
2.33
|
|
$
1.80
|
|
Average number of
shares outstanding used in diluted earnings per
share
computations
|
125.4
|
|
125.7
|
|
125.3
|
|
125.9
|
|
|
|
|
|
|
|
|
|
Other Data:
|
|
|
|
|
|
|
|
|
Capital additions and
other investing activities
|
$
14.4
|
|
$
29.8
|
|
$
37.8
|
|
$ 81.1
|
|
Depreciation and
amortization expense
|
44.3
|
|
48.1
|
|
90.0
|
|
92.8
|
|
FMC
CORPORATION
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES
|
|
|
RECONCILIATION OF NET INCOME (LOSS)
ATTRIBUTABLE TO FMC STOCKHOLDERS (GAAP) TO
ADJUSTED AFTER-TAX
EARNINGS FROM CONTINUING OPERATIONS, ATTRIBUTABLE TO
FMC
STOCKHOLDERS
(NON-GAAP)
(Unaudited, in
millions, except per share amounts)
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Net income (loss)
attributable to FMC stockholders (GAAP)
|
$
295.1
|
|
$
30.5
|
|
$
292.4
|
|
$
226.5
|
|
Corporate special
charges (income):
|
|
|
|
|
|
|
|
|
Restructuring and
other charges (income) (a)
|
95.1
|
|
7.3
|
|
136.0
|
|
19.8
|
|
Non-operating pension
and postretirement charges (income) (b)
|
4.2
|
|
4.6
|
|
8.5
|
|
9.2
|
|
Income tax expense
(benefit) on Corporate special charges (income)
(c)
|
(13.8)
|
|
(2.3)
|
|
(23.4)
|
|
(4.3)
|
|
Adjustment for
noncontrolling interest, net of tax on Corporate special
charges
(income)
|
—
|
|
0.8
|
|
—
|
|
(2.0)
|
|
Discontinued operations
attributable to FMC stockholders, net of income
taxes (d)
|
2.8
|
|
21.5
|
|
15.3
|
|
33.0
|
|
Tax adjustment
(e)
|
(304.3)
|
|
0.2
|
|
(304.3)
|
|
3.5
|
|
Adjusted after-tax earnings from continuing
operations attributable to
FMC stockholders
(Non-GAAP) (1)
|
$
79.1
|
|
$
62.6
|
|
$
124.5
|
|
$
285.7
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
common share (GAAP)
|
$
2.35
|
|
$
0.24
|
|
$ 2.33
|
|
$
1.80
|
|
Corporate special
charges (income) per diluted share, before tax:
|
|
|
|
|
|
|
|
|
Restructuring and
other charges (income)
|
0.76
|
|
0.06
|
|
1.09
|
|
0.16
|
|
Non-operating pension
and postretirement charges (income)
|
0.03
|
|
0.04
|
|
0.07
|
|
0.07
|
|
Income tax expense
(benefit) on Corporate special charges (income), per
diluted
share
|
(0.11)
|
|
(0.01)
|
|
(0.19)
|
|
(0.03)
|
|
Adjustment for
noncontrolling interest, net of tax on Corporate special
charges
(income) per diluted
share
|
—
|
|
—
|
|
—
|
|
(0.02)
|
|
Discontinued operations
attributable to FMC stockholders, net of income taxes
per diluted
share
|
0.02
|
|
0.17
|
|
0.12
|
|
0.26
|
|
Tax adjustments per
diluted share
|
(2.42)
|
|
—
|
|
(2.43)
|
|
0.03
|
|
Diluted adjusted after-tax earnings from continuing
operations per share,
attributable to FMC stockholders
(Non-GAAP)
|
$
0.63
|
|
$
0.50
|
|
$ 0.99
|
|
$
2.27
|
|
|
|
|
|
|
|
|
|
Average number of
shares outstanding used in diluted adjusted after-tax
earnings
from continuing
operations per share computations
|
125.4
|
|
125.7
|
|
125.3
|
|
125.9
|
|
________________________
|
|
(1)
|
Referred to as Adjusted
earnings. The Company believes that Adjusted earnings, a Non-GAAP
financial measure, and its presentation on a per share basis
provides useful information about the Company's operating results
to management, investors, and securities analysts. Adjusted
earnings excludes the effects of corporate special charges,
tax-related adjustments and the results of our discontinued
operations. 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.
|
|
|
|
(a)
|
Three Months Ended June 30,
2024:
|
|
|
|
Restructuring and other
charges (income) includes restructuring charges of $83.8 million
primarily related to the previously announced global restructuring
plan, referred to as "Project Focus." Charges incurred related to
Project Focus consist of $53.3 million of non-cash asset
write-off charges resulting from the contract termination with one
of our third-party manufacturers, $18.6 million of severance and
employee separation costs, including costs associated with the
previously announced CEO transition, $6.5 million of professional
service provider costs and other miscellaneous charges, and
accelerated depreciation of $5.9 million on assets identified for
disposal in connection with the restructuring initiative. Other
charges (income) of $11.3 million is comprised of $5.7 million of
charges associated with our environmental sites and $5.6 million of
other miscellaneous charges.
|
|
|
|
Three Months Ended June 30,
2023:
|
|
Restructuring and other
charges (income) includes $4.3 million of severance and employee
separation costs as well as $0.6 million of other restructuring
related charges incurred as part of various restructuring
initiatives. These restructuring charges were offset by a $5.8
million gain recognized on the disposition of land related to a
previously closed manufacturing facility. Other charges (income) of
$8.2 million, relates primarily to environmental sites of $7.5
million as well as $0.7 million of other miscellaneous
charges.
|
|
|
|
Six Months Ended June 30, 2024:
|
|
Restructuring and other
charges (income) includes restructuring charges of $117.5 million
primarily related Project Focus. Charges incurred in connection
with Project Focus consist of $53.3 million of non-cash asset write
off charges resulting from the contract termination with one of our
third-party manufacturers, $37.5 million of severance and employee
separation costs, including costs associated with the previously
announced CEO transition, $18.7 million of professional
service provider costs and other miscellaneous charges, and
accelerated depreciation of $8.2 million on assets identified for
disposal in connection with the restructuring initiative. Other
charges (income) of $18.5 million is comprised of $9.0 million of
charges associated with our environmental sites and $9.5 million of
other miscellaneous charges.
|
|
|
|
Six Months Ended June 30, 2023:
|
|
Restructuring and other
charges (income) includes $4.3 million of severance and employee
separation costs as well as $1.5 million of asset impairment and
other charges related to various global restructuring initiatives.
These restructuring charges were offset by a $5.8 million gain
recognized on the disposition of land related to a previously
closed manufacturing facility. Other charges (income) of $19.8
million, relates primarily to a $6.9 million remeasurement charge
triggered during the period as a result of the significant currency
depreciation of the Pakistani Rupee. On January 25th, 2023, the
Pakistani Rupee experienced its largest single day drop against the
US dollar in over two decades following the removal of the USD-PKR
exchange cap in place on the country's currency. Additionally,
other charges (income) relating to environmental sites of $9.8
million were recognized during the period as well as
$3.1 million of other miscellaneous charges.
|
|
|
|
(b)
|
Our non-operating
pension and postretirement charges (income) are defined as those
costs (benefits) related to interest, expected return on plan
assets, amortized actuarial gains and losses and the impacts of any
plan curtailments or settlements. These are excluded from our
Adjusted Earnings and are primarily related to changes in pension
plan assets and liabilities which are tied to financial market
performance and we consider these costs to be outside our
operational performance. We continue to include the service cost
and amortization of prior service cost in our Adjusted Earnings
results noted above. These elements reflect the current year
operating costs to our businesses for the employment benefits
provided to active
employees.
|
|
|
|
(c)
|
The income tax expense
(benefit) on Corporate special charges (income) is determined using
the applicable rates in the taxing jurisdictions in which the
corporate 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.
|
|
|
|
(d)
|
Discontinued operations
includes provisions, net of recoveries, for environmental
liabilities and legal reserves and expenses related to previously
discontinued operations and retained liabilities. Discontinued
operations for the three and six months ended June 30, 2024
includes cash proceeds, net of fees of $18.0 million received as
the result of an insurance settlement for retained legal
reserves.
|
|
|
|
(e)
|
We exclude the GAAP tax
provision, including discrete items, from the Non-GAAP measure of
income, and include a Non-GAAP tax provision based upon the
projected annual Non-GAAP effective tax rate. The GAAP tax
provision includes certain discrete tax items including, but are
not limited to: income tax expenses or benefits that are not
related to continuing 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
interim 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 continuing operating results thereby
providing investors with useful supplemental information about
FMC's operational performance.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
(in Millions)
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Non-GAAP tax adjustments
|
|
|
|
|
|
|
|
|
Revisions to valuation
allowances of historical deferred tax assets
|
$ —
|
|
$
—
|
|
$
(1.6)
|
|
$
—
|
|
Foreign currency
remeasurement and other discrete items
|
(304.3)
|
|
0.2
|
|
(302.7)
|
|
3.5
|
|
Total Non-GAAP tax adjustments
|
$
(304.3)
|
|
$
0.2
|
|
$
(304.3)
|
|
$
3.5
|
|
|
In connection with our
plans to establish a global technology and innovation center in
Switzerland, we initiated changes to our corporate entity
structure, including intra-entity transfers of certain intellectual
property, during the second quarter of 2024. As a result, we
recorded a net tax benefit of approximately $300 million. This
benefit, net of valuation allowance, was primarily a result of the
recognition of a step-up in tax basis to the fair value of the
transferred intellectual property by the Company's Swiss
subsidiary. In addition, local tax impacts associated with the
disposition of the transferred intellectual property were recorded
as well as an increase in our valuation allowance associated with
Swiss nonrefundable tax credits as a result of indirect effects of
the transferred intellectual property.
|
|
RECONCILIATION OF
NET INCOME (LOSS) (GAAP) TO ADJUSTED EARNINGS FROM
CONTINUING
OPERATIONS, BEFORE
INTEREST, INCOME TAXES, DEPRECIATION AND AMORTIZATION,
AND
NONCONTROLLING
INTERESTS (NON-GAAP)
(Unaudited, in
millions)
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Net income (loss)
(GAAP)
|
$
295.2
|
|
$ 32.4
|
|
$
292.1
|
|
$
228.3
|
|
Restructuring and
other charges (income)
|
95.1
|
|
7.3
|
|
136.0
|
|
19.8
|
|
Non-operating pension
and postretirement charges (income)
|
4.2
|
|
4.6
|
|
8.5
|
|
9.2
|
|
Discontinued
operations, net of income taxes
|
2.8
|
|
21.5
|
|
15.3
|
|
33.0
|
|
Interest expense,
net
|
63.6
|
|
64.5
|
|
125.3
|
|
115.9
|
|
Depreciation and
amortization
|
44.3
|
|
48.1
|
|
90.0
|
|
92.8
|
|
Provision (benefit)
for income taxes
|
(303.5)
|
|
9.2
|
|
(304.9)
|
|
50.3
|
|
Adjusted earnings from continuing operations, before
interest, income
taxes, depreciation and amortization, and
noncontrolling interests
(Non-GAAP) (1)
|
$
201.7
|
|
$
187.6
|
|
$
362.3
|
|
$
549.3
|
|
___________________
|
|
(1) Referred to
as Adjusted EBITDA. Defined as operating profit excluding
restructuring and other charges (income) and depreciation
and
amortization expense.
|
|
RECONCILIATION OF
CASH PROVIDED (REQUIRED) BY OPERATING ACTIVITIES OF
CONTINUING
OPERATIONS (GAAP) TO FREE CASH FLOW (NON-GAAP)
(Unaudited, in
millions)
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Cash provided
(required) by operating activities of continuing operations
(GAAP)
|
$
292.2
|
|
$
131.5
|
|
$
149.3
|
|
$ (719.8)
|
|
Project Focus
transformation spending
|
23.6
|
|
—
|
|
63.5
|
|
—
|
|
Adjusted cash from
operations(1)
|
$
315.8
|
|
$
131.5
|
|
$
212.8
|
|
$
(719.8)
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
(9.9)
|
|
(28.9)
|
|
(30.6)
|
|
(75.8)
|
|
Other investing
activities
|
(4.5)
|
|
(0.9)
|
|
(7.2)
|
|
(5.3)
|
|
Capital additions and other investing
activities
|
$
(14.4)
|
|
$
(29.8)
|
|
$
(37.8)
|
|
$
(81.1)
|
|
|
|
|
|
|
|
|
|
Cash provided
(required) by operating activities of discontinued
operations
|
2.6
|
|
(14.3)
|
|
(18.9)
|
|
(26.9)
|
|
Project Focus
transformation spending
|
(23.6)
|
|
—
|
|
(63.5)
|
|
—
|
|
Proceeds from Land
Disposition
|
—
|
|
5.8
|
|
—
|
|
5.8
|
|
Legacy and transformation
|
$
(21.0)
|
|
$ (8.5)
|
|
$
(82.4)
|
|
$
(21.1)
|
|
|
|
|
|
|
|
|
|
Free cash flow
(Non-GAAP)(2)
|
$
280.4
|
|
$ 93.2
|
|
$ 92.6
|
|
$
(822.0)
|
|
___________________
|
|
(1)
|
Adjusted cash from
operations is defined as cash provided (required) by operating
activities of continuing operations excluding the effects of
transaction-related
cash flows and Project
Focus transformation spending.
|
|
(2)
|
Free cash flow is
defined as Adjusted cash from operations reduced by spending for
capital additions and other investing activities as well as legacy
and
transformation
spending. We believe that this Non-GAAP financial measure provides
a useful basis for investors and securities analysts about the
cash
generated by routine
business operations, including capital expenditures, in addition to
assessing our ability to repay debt, fund acquisitions and return
capital
to shareholders through
share repurchases and dividends. Our use of free cash flow has
limitations as an analytical tool and should not be considered
in
isolation or as a
substitute for an analysis of our results under U.S.
GAAP.
|
|
RECONCILIATION OF
REVENUE CHANGE (GAAP) TO
ORGANIC REVENUE
CHANGE (NON-GAAP) (1)
(Unaudited)
|
|
|
Three Months Ended
June 30, 2024 vs. 2023
|
|
Six Months Ended
June 30, 2024 vs. 2023
|
|
Total Revenue Change (GAAP)
|
2 %
|
|
(17) %
|
|
Less: Foreign Currency
Impact
|
(2) %
|
|
(1) %
|
|
Organic Revenue Change (Non-GAAP)
|
4 %
|
|
(16) %
|
|
___________________
|
|
(1)
|
We believe organic
revenue growth (non-GAAP) provides management and investors with
useful
supplemental
information regarding our ongoing revenue performance and trends by
presenting
revenue growth
excluding the impact of fluctuations in foreign exchange
rates.
|
|
RECONCILIATION OF
NET INCOME (LOSS) ATTRIBUTABLE TO
FMC STOCKHOLDERS
(GAAP) TO RETURN ON INVESTED CAPITAL ("ROIC")
NUMERATOR
(NON-GAAP) AND ROIC (USING NON-GAAP NUMERATOR)(1)
(Unaudited)
|
|
|
Twelve Months Ended
|
|
|
|
June 30, 2024
|
|
|
|
Net income (loss)
attributable to FMC stockholders (GAAP)
|
$
1,387.4
|
|
|
|
Interest expense, net,
net of income taxes
|
209.5
|
|
|
|
Corporate special
charges (income)
|
371.8
|
|
|
|
Income tax expense
(benefit) on Corporate special charges (income)
|
(51.9)
|
|
|
|
Adjustment for
noncontrolling interest, net of tax on Corporate special charges
(income)
|
0.4
|
|
|
|
Discontinued
operations attributable to FMC stockholders, net of income
taxes
|
80.8
|
|
|
|
Tax
adjustments
|
(1,475.2)
|
|
|
|
ROIC numerator
(Non-GAAP)
|
$
522.8
|
|
|
|
|
|
|
|
June 30, 2024
|
|
June 30, 2023
|
|
Total debt
|
$
4,179.1
|
|
$
4,682.5
|
|
Total FMC
stockholders' equity
|
4,559.4
|
|
3,353.0
|
|
Total debt and FMC
stockholders' equity (GAAP)
|
$
8,738.5
|
|
$
8,035.5
|
|
ROIC denominator (2 yr
average total debt and FMC stockholders' equity)
|
$
8,387.0
|
|
|
|
|
|
|
|
ROIC (using Non-GAAP
numerator)
|
6.23 %
|
|
|
|
___________________
|
|
(1)
|
We believe ROIC
(non-GAAP) provides management and investors with useful
supplemental information regarding our utilization of
capital
provided by both equity
and debt as well as our working capital and free cash flow
management.
|
|
FMC
CORPORATION
CONDENSED
CONSOLIDATED BALANCE SHEETS
(Unaudited, in
millions)
|
|
|
June 30, 2024
|
|
December 31, 2023
|
|
Cash and cash
equivalents
|
$
471.5
|
|
$
302.4
|
|
Trade receivables, net
of allowance of $34.4 in 2024 and $29.1 in 2023
|
2,702.4
|
|
2,703.2
|
|
Inventories
|
1,435.0
|
|
1,724.6
|
|
Prepaid and other
current assets
|
601.3
|
|
398.9
|
|
Total current assets
|
$
5,210.2
|
|
$
5,129.1
|
|
Property, plant and
equipment, net
|
861.1
|
|
892.5
|
|
Goodwill
|
1,509.2
|
|
1,593.6
|
|
Other intangibles,
net
|
2,413.2
|
|
2,465.1
|
|
Deferred income
taxes
|
1,664.1
|
|
1,336.6
|
|
Other long-term
assets
|
472.9
|
|
509.3
|
|
Total assets
|
$
12,130.7
|
|
$
11,926.2
|
|
Short-term debt and
current portion of long-term debt
|
$
1,153.3
|
|
$
934.0
|
|
Accounts payable, trade
and other
|
697.3
|
|
602.4
|
|
Advanced payments from
customers
|
0.8
|
|
482.1
|
|
Accrued and other
liabilities
|
700.3
|
|
684.8
|
|
Accrued customer
rebates
|
780.8
|
|
480.9
|
|
Guarantees of vendor
financing
|
63.9
|
|
69.6
|
|
Accrued pensions and
other postretirement benefits, current
|
6.4
|
|
6.4
|
|
Income taxes
|
120.3
|
|
124.4
|
|
Total current liabilities
|
$
3,523.1
|
|
$
3,384.6
|
|
Long-term debt, less
current portion
|
$
3,025.8
|
|
$
3,023.6
|
|
Long-term
liabilities
|
1,001.1
|
|
1,084.6
|
|
Equity
|
4,580.7
|
|
4,433.4
|
|
Total liabilities and equity
|
$
12,130.7
|
|
$
11,926.2
|
|
FMC
CORPORATION
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in
millions)
|
|
|
Six Months Ended June 30,
|
|
2024
|
|
2023
|
|
Cash provided
(required) by operating activities of continuing
operations
|
$
149.3
|
|
$
(719.8)
|
|
|
|
|
|
Cash provided
(required) by operating activities of discontinued
operations
|
(18.9)
|
|
(26.9)
|
|
|
|
|
|
Cash provided
(required) by investing activities of continuing
operations
|
(39.6)
|
|
(78.5)
|
|
|
|
|
|
Cash provided
(required) by financing activities of continuing
operations
|
84.7
|
|
1,194.6
|
|
|
|
|
|
Effect of exchange rate
changes on cash
|
(6.4)
|
|
0.1
|
|
|
|
|
|
Increase (decrease) in
cash and cash equivalents
|
$
169.1
|
|
$
369.5
|
|
|
|
|
|
Cash and cash
equivalents, beginning of period
|
$
302.4
|
|
$
572.0
|
|
|
|
|
|
Cash and cash equivalents, end of
period
|
$
471.5
|
|
$
941.5
|
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SOURCE FMC Corporation