CHARLOTTE, N.C.,
May 1,
2024 /PRNewswire/ -- Albemarle Corporation (NYSE:
ALB), a global leader in providing essential elements for mobility,
energy, connectivity and health, today announced its results for
the first quarter ended March 31,
2024.
First-Quarter 2024 and Recent
Highlights
(Unless otherwise stated, all percentage
changes represent year-over-year comparisons)
- Net sales of $1.4 billion, driven
by Energy Storage volume growth as projects ramp
- Net income of $2 million, or
($0.08)(a) per diluted
share attributable to common shareholders
- Adjusted diluted EPS attributable to common shareholders of
$0.26
- Adjusted EBITDA(b) of $291
million
- On track to deliver more than $280
million target in productivity benefits in 2024; in Q1,
delivered over $90 million in
productivity and restructuring cost savings
- Conducted successful bidding events for spodumene concentrate
and lithium carbonate, designed to promote price transparency and
discovery
- Achieved 50% operating rate milestone at Kemerton I;
commissioning at Meishan and ramp of the Salar Yield Improvement
Project continue to progress well
- Reaffirmed FY 2024 corporate outlook considerations, including
ranges based on lithium market price scenarios
(a)
|
After mandatory
convertible preferred stock dividends
|
(b)
|
Beginning in 2024,
Adjusted EBITDA definition includes Albemarle's share of the
pre-tax earnings of the Talison joint venture
|
"In the first quarter, our team demonstrated agility in dynamic
market conditions by continuing to deliver solid volumetric growth,
ramping new conversion facilities, and executing cost reduction and
productivity improvements," said Kent Masters, Albemarle's
chairman and CEO. "We have strengthened our competitive position,
enhanced our financial flexibility, and started to increase lithium
market price transparency. Our actions best position us to serve
our core end-markets today and for the future." Masters added, "We
remain focused on disciplined capital allocation to deliver
profitable organic growth and value for all stakeholders."
2024 Total Corporate Outlook Considerations
The
company maintains its prior full-year outlook, which is based on
three lithium market price scenarios.
|
Total Corporate FY
2024E
Including Energy
Storage Scenarios
|
Observed market price
case(a)
|
YE 2023
|
Q4 2023
average
|
H2 2023
average
|
Average lithium market
price ($/kg LCE)(a)
|
~$15
|
~$20
|
~$25
|
Net sales
|
$5.5 - $6.2
billion
|
$6.1 - $6.8
billion
|
$6.9 - $7.6
billion
|
Adjusted
EBITDA(b)(c)
|
$0.9 - $1.2
billion
|
$1.6 - $1.8
billion
|
$2.3 - $2.6
billion
|
|
|
(a)
|
Price represents blend
of relevant Asia and China market indices for the periods
referenced.
|
(b)
|
The company does not
provide a reconciliation of forward-looking non-GAAP financial
measures to the most directly comparable financial measures
calculated and reported in accordance with GAAP, as the company is
unable to estimate significant non-recurring or unusual items
without unreasonable effort. See "Additional Information regarding
Non-GAAP Measures" for more information.
|
(c)
|
Presented under updated
adjusted EBITDA definition as of 2024. FY23 adjusted EBITDA under
updated definition would be $3.5B. See Non-GAAP Reconciliations for
further details.
|
2024 Other Corporate Outlook Considerations
Following
the company's public offering of depository shares representing an
interest in its mandatory convertible preferred stock, interest and
financing expenses are expected to be at the low end of the
previous range of $180 to
$220 million. The change in
weighted-average common shares outstanding (diluted) reflects the
recently issued shares of mandatory convertible preferred stock on
an as-converted basis. The change to the adjusted effective tax
rate range is related to geographic income mix and is dependent on
the assumption of lithium market price. All other corporate outlook
considerations are unchanged.
|
Other Corporate FY
2024E
|
Capital
expenditures
|
$1.6 - $1.8
billion
|
Depreciation and
amortization
|
$580 - $660
million
|
Adjusted effective tax
rate
|
(5%) - 27%
|
Corporate
costs
|
$120 - $150
million
|
Interest and financing
expenses
|
$180 - $210
million
|
Weighted-average common
shares outstanding (diluted)(d)
|
135 - 139
million
|
|
|
(d)
|
Each quarter, Albemarle
will report the more dilutive of either: 1) adding the underlying
shares in the mandatory to the share count or 2) reducing
Albemarle's net income to common shareholders by the mandatory
dividend. The 20-day volume-weighted average common share price
will be used in determining the underlying shares to be added to
the share count.
|
First Quarter 2024 Results
In millions, except
per share amounts
|
Q1
2024
|
|
Q1
2023
|
|
$
Change
|
|
%
Change
|
Net sales
|
$
1,360.7
|
|
$
2,580.3
|
|
$
(1,219.5)
|
|
(47.3) %
|
Net income attributable
to Albemarle Corporation
|
$
2.4
|
|
$
1,238.6
|
|
$
(1,236.1)
|
|
(99.8) %
|
Adjusted
EBITDA(a)(b)
|
$
291.2
|
|
$
1,761.7
|
|
$
(1,470.5)
|
|
(83.5) %
|
Diluted (loss) earnings
per share attributable to
common shareholders
|
$
(0.08)
|
|
$
10.51
|
|
$ (10.59)
|
|
(100.8) %
|
Non-recurring and other unusual items(a)
|
0.34
|
|
(0.19)
|
|
|
|
|
Adjusted diluted
earnings per share attributable to
common shareholders(a)(c)
|
$
0.26
|
|
$
10.32
|
|
$ (10.06)
|
|
(97.5) %
|
|
|
(a)
|
See Non-GAAP
Reconciliations for further details.
|
(b)
|
For comparability, 2023
figures presented under adjusted EBITDA definition that the company
adopted beginning in 2024.
|
(c)
|
Totals may not add due
to rounding.
|
Net sales for the first quarter of 2024 were $1.4 billion compared to $2.6 billion for the prior-year quarter, a
year-over-year decline of 47% that was driven primarily by lower
pricing in Energy Storage. Net income attributable
to Albemarle of $2 million
decreased by $1.2 billion and
adjusted EBITDA of $291 million
declined by $1.5 billion from the
prior-year quarter. The decline in earnings was primarily due to
lower lithium market pricing, as well as additional margin
compression due to inventory timing and reduced equity earnings at
the Talison joint venture, which more than offset favorable
volumes.
The effective income tax rate for the first quarter of 2024 was
2.2% compared to 23.9% in the same period of 2023. On an adjusted
basis, the effective income tax rates were (12.4)% and 23.6% for
the first quarter of 2024 and 2023, respectively, with the decrease
primarily due to changes in the geographic income mix.
Energy Storage Results
In
millions
|
Q1
2024
|
|
Q1
2023
|
|
$
Change
|
|
%
Change
|
Net Sales
|
$
800.9
|
|
$
1,943.7
|
|
$
(1,142.8)
|
|
(58.8) %
|
Adjusted
EBITDA
|
$
198.0
|
|
$
1,567.7
|
|
$
(1,369.7)
|
|
(87.4) %
|
Energy Storage net sales for the first quarter of 2024 were
$801 million, a decrease of
$1.1 billion, or 59%, due to lower
pricing (-89%), which more than offset higher volumes (+31%)
related to the ramp of lithium projects, including the
La Negra III/IV expansion in Chile and the processing plant in Qinzhou,
China, and sales of chemical-grade
spodumene. Adjusted EBITDA of $198
million decreased $1.4
billion, driven by lower lithium market pricing, as well as
margin compression due to inventory timing and reduced equity
earnings at the Talison joint venture, which more than offset
favorable volumes.
Specialties Results
In
millions
|
Q1
2024
|
|
Q1
2023
|
|
$
Change
|
|
%
Change
|
Net Sales
|
$
316.1
|
|
$
418.8
|
|
$
(102.7)
|
|
(24.5) %
|
Adjusted
EBITDA
|
$
45.2
|
|
$
162.2
|
|
$
(117.0)
|
|
(72.1) %
|
Specialties net sales for the first quarter of 2024 were
$316 million, a decrease of
$103 million, or 25%, primarily due
to lower prices (-19%) and lower volumes (-6%). Adjusted EBITDA of
$45 million decreased $117 million. Both volumes and prices were
impacted by weaker demand, particularly for consumer
electronics.
Ketjen Results
In
millions
|
Q1
2024
|
|
Q1
2023
|
|
$
Change
|
|
%
Change
|
Net Sales
|
$
243.8
|
|
$
217.8
|
|
$
26.0
|
|
11.9 %
|
Adjusted
EBITDA
|
$
22.0
|
|
$
14.5
|
|
$
7.4
|
|
51.1 %
|
Ketjen net sales of $244 million
for the first quarter of 2024 were up 12% compared to the previous
year due to higher volumes (+10%) and higher prices (+2%),
primarily from clean fuel technologies. Adjusted EBITDA of
$22 million increased $7 million largely due to higher sales and lower
input costs.
Cash Flow and Capital Deployment
Cash from operations
of $98 million for the first quarter
of 2024 decreased $623 million versus
the prior year period. The year-over-year decrease was driven by
lower adjusted EBITDA and reduced dividends received from equity
investments, partially offset by lower investment in working
capital. Capital expenditures of $579
million increased by $164
million versus the prior-year period due to the timing of
project spend.
On March 8, 2024, Albemarle
completed a $2.3 billion public
mandatory convertible preferred stock offering to fortify the
balance sheet, enhance financial flexibility, and fund in-flight
growth investments. Albemarle's capital allocation priorities
continue to focus on investing in its organic opportunities to
drive profitable growth, maintaining its investment grade credit
rating, and funding its dividends.
Balance Sheet and Liquidity
As of March 31, 2024, Albemarle had estimated liquidity
of approximately $3.7 billion,
including $2.1 billion of cash and
equivalents, $1.5 billion available
under its revolver and $124 million
available under other credit lines. Total debt was $3.5 billion, representing a debt covenant net
debt to adjusted EBITDA of approximately 0.9 times.
Earnings Call
Date:
|
Thursday, May 2,
2024
|
Time:
|
9:00 AM Eastern
time
|
Dial-in
(U.S.):
|
1-800-590-8290
|
Dial-in
(International):
|
1-240-690-8800
|
Conference
ID:
|
ALBQ1
|
The company's earnings presentation and supporting material are
available on Albemarle's website at
https://investors.albemarle.com.
About Albemarle
Albemarle Corporation (NYSE: ALB)
leads the world in transforming essential resources into critical
ingredients for mobility, energy, connectivity, and health. We
partner to pioneer new ways to move, power, connect and protect
with people and planet in mind. A reliable and high-quality global
supply of lithium and bromine allow us to deliver advanced
solutions for our customers. Learn more about how the people of
Albemarle are enabling a more resilient world at albemarle.com and
on X (formerly Twitter) @AlbemarleCorp.
Albemarle regularly posts information to www.albemarle.com,
including notification of events, news, financial performance,
investor presentations and webcasts, non-GAAP reconciliations,
Securities and Exchange Commission ("SEC") filings and other
information regarding the company, its businesses and the markets
it serves.
Forward-Looking Statements
This press release contains
statements concerning our expectations, anticipations and beliefs
regarding the future, which constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995. These forward-looking statements, which are based on
assumptions that we have made as of the date hereof and are subject
to known and unknown risks and uncertainties, often contain words
such as "anticipate," "believe," "estimate," "expect," "guidance,"
"intend," "may," "outlook," "scenario," "should," "would," and
"will". Forward-looking statements may include statements
regarding: our 2024 company and segment outlooks, including
expected market pricing of lithium and spodumene and other
underlying assumptions and outlook considerations; expected capital
expenditure amounts and the corresponding impact on cash flow;
market pricing of lithium carbonate equivalent and spodumene;
anticipated timing of the commissioning of the Meishan China
lithium conversion facility; plans and expectations regarding other
projects and activities, cost reductions and accounting charges,
and all other information relating to matters that are not
historical facts. Factors that could cause Albemarle's actual
results to differ materially from the outlook expressed or implied
in any forward-looking statement include: changes in economic and
business conditions; financial and operating performance of
customers; timing and magnitude of customer orders; fluctuations in
lithium market prices; production volume shortfalls; increased
competition; changes in product demand; availability and cost of
raw materials and energy; technological change and development;
fluctuations in foreign currencies; changes in laws and government
regulation; regulatory actions, proceedings, claims or litigation;
cyber-security breaches, terrorist attacks, industrial accidents or
natural disasters; political unrest; changes in inflation or
interest rates; volatility in the debt and equity markets;
acquisition and divestiture transactions; timing and success of
projects; performance of Albemarle's partners in joint ventures and
other projects; changes in credit ratings; and the other factors
detailed from time to time in the reports Albemarle files with the
SEC, including those described under "Risk Factors" in Albemarle's
most recent Annual Report on Form 10-K and any subsequently filed
Quarterly Reports on Form 10-Q, which are filed with the SEC and
available on the investor section of Albemarle's website
(investors.albemarle.com) and on the SEC's website at www.sec.gov.
These forward-looking statements speak only as of the date of this
press release. Albemarle assumes no obligation to provide any
revisions to any forward-looking statements should circumstances
change, except as otherwise required by securities and other
applicable laws.
Albemarle Corporation
and Subsidiaries
Consolidated Statements
of Income
(In Thousands Except
Per Share Amounts) (Unaudited)
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2024
|
|
2023
|
Net sales
|
$ 1,360,736
|
|
$ 2,580,252
|
Cost of goods
sold
|
1,321,798
|
|
1,303,712
|
Gross
profit
|
38,938
|
|
1,276,540
|
Selling, general and
administrative expenses
|
194,912
|
|
154,306
|
Research and
development expenses
|
23,532
|
|
20,471
|
Operating (loss)
profit
|
(179,506)
|
|
1,101,763
|
Interest and financing
expenses
|
(37,969)
|
|
(26,777)
|
Other income,
net
|
49,901
|
|
82,492
|
(Loss) income before
income taxes and equity in net income of unconsolidated
investments
|
(167,574)
|
|
1,157,478
|
Income tax (benefit)
expense
|
(3,721)
|
|
276,963
|
(Loss) income before
equity in net income of unconsolidated investments
|
(163,853)
|
|
880,515
|
Equity in net income of
unconsolidated investments (net of tax)
|
180,500
|
|
396,188
|
Net income
|
16,647
|
|
1,276,703
|
Net income attributable
to noncontrolling interests
|
(14,199)
|
|
(38,123)
|
Net income attributable
to Albemarle Corporation
|
2,448
|
|
1,238,580
|
Mandatory convertible
preferred stock dividends
|
(11,584)
|
|
—
|
Net (loss) income
attributable to Albemarle Corporation common
shareholders
|
$
(9,136)
|
|
$ 1,238,580
|
Basic (loss) earnings
per share attributable to common shareholders
|
$
(0.08)
|
|
$
10.57
|
Diluted (loss) earnings
per share attributable to common shareholders
|
$
(0.08)
|
|
$
10.51
|
|
|
|
|
Weighted-average common
shares outstanding – basic
|
117,451
|
|
117,232
|
Weighted-average common
shares outstanding – diluted
|
117,451
|
|
117,841
|
Albemarle Corporation
and Subsidiaries
Condensed Consolidated
Balance Sheets
(In Thousands)
(Unaudited)
|
|
|
March
31,
|
|
December
31,
|
|
2024
|
|
2023
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
2,055,813
|
|
$
889,900
|
Trade accounts
receivable
|
874,038
|
|
1,213,160
|
Other accounts
receivable
|
438,507
|
|
509,097
|
Inventories
|
1,904,827
|
|
2,161,287
|
Other current
assets
|
549,540
|
|
443,475
|
Total current
assets
|
5,822,725
|
|
5,216,919
|
Property, plant and
equipment
|
12,587,763
|
|
12,233,757
|
Less accumulated
depreciation and amortization
|
2,831,728
|
|
2,738,553
|
Net property, plant
and equipment
|
9,756,035
|
|
9,495,204
|
Investments
|
1,259,001
|
|
1,369,855
|
Other assets
|
329,283
|
|
297,087
|
Goodwill
|
1,613,534
|
|
1,629,729
|
Other intangibles, net
of amortization
|
251,755
|
|
261,858
|
Total
assets
|
$ 19,032,333
|
|
$ 18,270,652
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable to
third parties
|
$
1,165,955
|
|
$
1,537,859
|
Accounts payable to
related parties
|
129,613
|
|
550,186
|
Accrued
expenses
|
454,600
|
|
544,835
|
Current portion of
long-term debt
|
5,076
|
|
625,761
|
Dividends
payable
|
58,354
|
|
46,666
|
Income taxes
payable
|
237,098
|
|
255,155
|
Total current
liabilities
|
2,050,696
|
|
3,560,462
|
Long-term
debt
|
3,519,453
|
|
3,541,002
|
Postretirement
benefits
|
26,382
|
|
26,247
|
Pension
benefits
|
145,067
|
|
150,312
|
Other noncurrent
liabilities
|
833,548
|
|
769,100
|
Deferred income
taxes
|
657,468
|
|
558,430
|
Commitments and
contingencies
|
|
|
|
Equity:
|
|
|
|
Albemarle Corporation
shareholders' equity:
|
|
|
|
Common
stock
|
1,175
|
|
1,174
|
Mandatory convertible
preferred stock
|
2,235,379
|
|
—
|
Additional paid-in
capital
|
2,962,585
|
|
2,952,517
|
Accumulated other
comprehensive loss
|
(597,205)
|
|
(528,526)
|
Retained
earnings
|
6,930,868
|
|
6,987,015
|
Total Albemarle
Corporation shareholders' equity
|
11,532,802
|
|
9,412,180
|
Noncontrolling
interests
|
266,917
|
|
252,919
|
Total
equity
|
11,799,719
|
|
9,665,099
|
Total liabilities and
equity
|
$ 19,032,333
|
|
$ 18,270,652
|
Albemarle Corporation
and Subsidiaries
Selected Consolidated
Cash Flow Data
(In Thousands)
(Unaudited)
|
|
|
Three Months
Ended
March
31,
|
|
2024
|
|
2023
|
Cash and cash
equivalents at beginning of year
|
$ 889,900
|
|
$
1,499,142
|
Cash flows from
operating activities:
|
|
|
|
Net income
|
16,647
|
|
1,276,703
|
Adjustments to
reconcile net income to cash flows from operating
activities:
|
|
|
|
Depreciation and
amortization
|
123,751
|
|
87,271
|
Stock-based
compensation and other
|
9,317
|
|
10,540
|
Equity in net income
of unconsolidated investments (net of tax)
|
(180,500)
|
|
(396,188)
|
Dividends received
from unconsolidated investments and nonmarketable
securities
|
50,756
|
|
547,552
|
Pension and
postretirement expense
|
1,273
|
|
1,954
|
Pension and
postretirement contributions
|
(4,824)
|
|
(2,825)
|
Realized loss on
investments in marketable securities
|
33,746
|
|
—
|
Unrealized loss (gain)
on investments in marketable securities
|
6,737
|
|
(45,732)
|
Deferred income
taxes
|
116,447
|
|
14,098
|
Working capital
changes
|
(52,320)
|
|
(764,071)
|
Other, net
|
(23,076)
|
|
(8,322)
|
Net cash provided by
operating activities
|
97,954
|
|
720,980
|
Cash flows from
investing activities:
|
|
|
|
Capital
expenditures
|
(579,322)
|
|
(415,608)
|
Sales (purchases) of
marketable securities, net
|
84,893
|
|
(122,267)
|
Investments in equity
investments and nonmarketable securities
|
(74)
|
|
(1,133)
|
Net cash used in
investing activities
|
(494,503)
|
|
(539,008)
|
Cash flows from
financing activities:
|
|
|
|
Proceeds from issuance
of mandatory convertible preferred stock
|
2,236,750
|
|
—
|
Repayments of
long-term debt and credit agreements
|
(29,019)
|
|
—
|
Proceeds from
borrowings of long-term debt and credit agreements
|
29,019
|
|
—
|
Other debt repayments,
net
|
(620,753)
|
|
(713)
|
Dividends paid to
shareholders
|
(46,908)
|
|
(46,282)
|
Dividends paid to
noncontrolling interests
|
—
|
|
(53,145)
|
Proceeds from exercise
of stock options
|
86
|
|
81
|
Withholding taxes paid
on stock-based compensation award distributions
|
(10,619)
|
|
(18,617)
|
Other
|
(1,256)
|
|
—
|
Net cash provided by
(used in) financing activities
|
1,557,300
|
|
(118,676)
|
Net effect of foreign
exchange on cash and cash equivalents
|
5,162
|
|
24,296
|
Increase in cash and
cash equivalents
|
1,165,913
|
|
87,592
|
Cash and cash
equivalents at end of period
|
$
2,055,813
|
|
$
1,586,734
|
Albemarle Corporation
and Subsidiaries
Consolidated Summary of
Segment Results
(In Thousands)
(Unaudited)
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2024
|
|
2023
|
Net
sales:
|
|
|
|
Energy
Storage
|
$
800,898
|
|
$ 1,943,682
|
Specialties
|
316,065
|
|
418,778
|
Ketjen
|
243,773
|
|
217,792
|
Total net
sales
|
$ 1,360,736
|
|
$ 2,580,252
|
|
|
|
|
Adjusted
EBITDA:
|
|
|
|
Energy
Storage
|
$
197,996
|
|
$ 1,567,692
|
Specialties
|
45,181
|
|
162,158
|
Ketjen
|
21,979
|
|
14,543
|
Total segment adjusted
EBITDA
|
265,156
|
|
1,744,393
|
Corporate
|
26,080
|
|
17,311
|
Total adjusted
EBITDA
|
$
291,236
|
|
$ 1,761,704
|
See accompanying non-GAAP reconciliations below.
Additional Information regarding Non-GAAP Measures
It should be noted that adjusted net income attributable to
Albemarle Corporation, adjusted net income attributable to
Albemarle Corporation common shareholders, adjusted diluted
earnings per share attributable to common shareholders,
non-operating pension and other post-employment benefit ("OPEB")
items per diluted share, non-recurring and other unusual items per
diluted share, adjusted effective income tax rates, EBITDA,
adjusted EBITDA (on a consolidated basis), EBITDA margin and
adjusted EBITDA margin are financial measures that are not required
by, or presented in accordance with, accounting principles
generally accepted in the United
States, or GAAP. These non-GAAP measures should not be
considered as alternatives to Net income attributable to Albemarle
Corporation ("earnings") or other comparable measures calculated
and reported in accordance with GAAP. These measures are presented
here to provide additional useful measurements to review the
company's operations, provide transparency to investors and enable
period-to-period comparability of financial performance. The
company's chief operating decision maker uses these measures to
assess the ongoing performance of the company and its segments, as
well as for business and enterprise planning purposes.
A description of other non-GAAP financial measures that
Albemarle uses to evaluate its operations and financial
performance, and reconciliation of these non-GAAP financial
measures to the most directly comparable financial measures
calculated and reported in accordance with GAAP can be found on the
following pages of this press release, which is also is available
on Albemarle's website at https://investors.albemarle.com. The
company does not provide a reconciliation of forward-looking
non-GAAP financial measures to the most directly comparable
financial measures calculated and reported in accordance with GAAP,
as the company is unable to estimate significant non-recurring or
unusual items without unreasonable effort. The amounts and timing
of these items are uncertain and could be material to the company's
results calculated in accordance with GAAP.
ALBEMARLE CORPORATION AND SUBSIDIARIES
Non-GAAP Reconciliations
(Unaudited)
See below for a reconciliation of adjusted net income
attributable to Albemarle Corporation, adjusted net income
attributable to Albemarle Corporation common shareholders, EBITDA
and adjusted EBITDA (on a consolidated basis), which are non-GAAP
financial measures, to Net income attributable to Albemarle
Corporation ("earnings"), the most directly comparable financial
measure calculated and reported in accordance with GAAP. Adjusted
net income attributable to Albemarle Corporation common
shareholders is defined as net income after mandatory convertible
preferred stock dividends, but before the non-recurring, other
unusual and non-operating pension and other post-employment benefit
(OPEB) items as listed below. The non-recurring and unusual items
may include acquisition and integration related costs, gains or
losses on sales of businesses, restructuring charges, facility
divestiture charges, certain litigation and arbitration costs and
charges, and other significant non-recurring items. EBITDA is
defined as net income attributable to Albemarle Corporation before
interest and financing expenses, income tax expense, and
depreciation and amortization. Adjusted EBITDA is defined as EBITDA
plus or minus the proportionate share of Windfield Holdings income
tax expense, non-recurring, other unusual and non-operating pension
and OPEB items as listed below.
|
Three Months
Ended
|
|
March
31,
|
|
2024
|
|
2023
|
In thousands, except
percentages and per share amounts
|
$
|
|
% of
net
sales
|
|
$
|
|
% of
net
sales
|
Net income attributable
to Albemarle Corporation
|
$
2,448
|
|
|
|
$
1,238,580
|
|
|
Add back:
|
|
|
|
|
|
|
|
Non-operating pension
and OPEB items (net of tax)
|
(351)
|
|
|
|
374
|
|
|
Non-recurring and
other unusual items (net of tax)
|
40,044
|
|
|
|
(22,774)
|
|
|
Adjusted net income
attributable to Albemarle Corporation
|
42,141
|
|
|
|
1,216,180
|
|
|
Mandatory convertible preferred stock dividends
|
(11,584)
|
|
|
|
—
|
|
|
Adjusted net income
attributable to Albemarle Corporation common
shareholders
|
$
30,557
|
|
|
|
$
1,216,180
|
|
|
|
|
|
|
|
|
|
|
Adjusted diluted
earnings per share attributable to common shareholders
|
$
0.26
|
|
|
|
$
10.32
|
|
|
|
|
|
|
|
|
|
|
Adjusted
weighted-average common shares outstanding – diluted
|
117,668
|
|
|
|
117,841
|
|
|
|
|
|
|
|
|
|
|
Net income attributable
to Albemarle Corporation
|
$
2,448
|
|
0.2 %
|
|
$
1,238,580
|
|
48.0 %
|
Add back:
|
|
|
|
|
|
|
|
Interest and financing
expenses
|
37,969
|
|
2.8 %
|
|
26,777
|
|
1.0 %
|
Income tax (benefit)
expense
|
(3,721)
|
|
(0.3) %
|
|
276,963
|
|
10.7 %
|
Depreciation and
amortization
|
123,751
|
|
9.1 %
|
|
87,271
|
|
3.4 %
|
EBITDA
|
160,447
|
|
11.8 %
|
|
1,629,591
|
|
63.2 %
|
Proportionate share of
Windfield income tax expense
|
73,689
|
|
5.4 %
|
|
165,985
|
|
6.4 %
|
Non-operating pension
and OPEB items
|
(325)
|
|
— %
|
|
601
|
|
— %
|
Non-recurring and
other unusual items
|
57,425
|
|
4.2 %
|
|
(34,473)
|
|
(1.3) %
|
Adjusted
EBITDA
|
$
291,236
|
|
21.4 %
|
|
$
1,761,704
|
|
68.3 %
|
|
|
|
|
|
|
|
|
Net sales
|
$
1,360,736
|
|
|
|
$
2,580,252
|
|
|
Non-operating pension and OPEB items, consisting of
mark-to-market actuarial gains/losses, settlements/curtailments,
interest cost and expected return on assets, are not allocated to
Albemarle's operating segments and are included in the Corporate
category. In addition, the company believes that these components
of pension cost are mainly driven by market performance, and the
company manages these separately from the operational performance
of the company's businesses. In accordance with GAAP, these
non-operating pension and OPEB items are included in Other income,
net. Non-operating pension and OPEB items were as follows (in
thousands):
|
Three Months
Ended
|
|
March
31,
|
|
2024
|
|
2023
|
Interest
cost
|
$
8,505
|
|
$
9,010
|
Expected return on
assets
|
(8,830)
|
|
(8,409)
|
Total
|
$
(325)
|
|
$
601
|
In addition to the non-operating pension and OPEB items
disclosed above, the company has identified certain other items and
excluded them from Albemarle's adjusted net income calculation for
the periods presented. A listing of these items, as well as a
detailed description of each follows below (per diluted share):
|
Three Months
Ended
|
|
March
31,
|
|
2024
|
|
2023
|
Restructuring and other
charges(1)
|
$
0.23
|
|
$
—
|
Acquisition and
integration related costs(2)
|
0.01
|
|
0.03
|
Loss (gain) in fair
value of public equity securities(3)
|
0.35
|
|
(0.29)
|
Other(4)
|
(0.15)
|
|
0.04
|
Tax related
items(5)
|
(0.10)
|
|
0.03
|
Total non-recurring
and other unusual items
|
$
0.34
|
|
$
(0.19)
|
|
|
(1)
|
In January 2024, the
Company announced it was taking measures to unlock near term cash
flow and generate long-term financial flexibility by re-phasing
organic growth investments and optimizing its cost structure. As a
result, the Company recorded severance costs for employees in
Corporate and each of the businesses, and losses related to the
cancellation of certain capital expenditure projects. During the
three months ended March 31, 2024, $33.5 million of these expenses
were recorded in Selling, general and administrative expenses and
$2.8 million were recorded in Other income, net ($27.0 million
after income taxes, or $0.23 per share). The severance has
primarily been paid, with the remainder to be paid in
2024.
|
|
|
(2)
|
Costs related to the
acquisition, integration and divestitures for various significant
projects, recorded in Selling, general and administrative expenses
for the three months ended March 31, 2024 and 2023 were $1.9
million and $5.1 million ($1.5 million and $4.0 million after
income taxes, or $0.01 and $0.03 per share),
respectively.
|
|
|
(3)
|
Loss of $33.7 million
and $9.4 million recorded in Other income, net resulting from the
sale of investments in public equity securities and the change in
fair value of investments in public equity securities,
respectively, for the three months ended March 31, 2024 ($41.1
million after income taxes, or $0.35 per share). Gain of $45.8
million ($34.4 million after income taxes, or $0.29 per share)
recorded in Other income, net for the three months ended March 31,
2023, resulting from the increase in fair value of investments in
public equity securities.
|
|
|
(4)
|
Other adjustments for
the three months ended March 31, 2024 included amounts recorded
in:
- Cost of goods sold - $1.4 million of expenses
related to non-routine labor and compensation related costs that
are outside normal compensation arrangements.
- Selling, general and administrative expenses
- $0.1 million of expenses related to certain legal costs.
- Other income, net - $17.3 million gain
primarily from the sale of assets at a site not part of our
operations, an $8.7 million gain from PIK dividends of
preferred equity in a Grace subsidiary and a $2.4 million gain
primarily resulting from the adjustment of indemnification related
to a previously disposed business, partially offset by $2.9 million
of charges for asset retirement obligations at a site not part of
our operations.
|
|
After income taxes,
these net gains totaled $17.3 million, or $0.15 per
share.
|
|
|
|
Other adjustments for
the three months ended March 31, 2023 included amounts recorded
in:
- Selling, general and administrative expenses
- $1.9 million of charges primarily for environmental reserves at
sites not part of our operations and $0.7 million of facility
closure expenses related to offices in Germany.
- Other income, net - $3.6 million of asset
retirement obligation charges primarily for a site not part of our
operations.
|
|
After income taxes,
these net charges totaled $4.8 million, or $0.04 per
share.
|
|
|
(5)
|
Included in Income tax
benefit for the three months ended March 31, 2024 are discrete net
tax benefits of $12.3 million, or $0.10 per share primarily related
to the reduction in a foreign tax reserve and excess tax benefits
realized from stock-based compensation arrangements.
|
|
|
|
Included in Income tax
expense for the three months ended March 31, 2023 are discrete net
tax expenses of $2.9 million, or $0.03 per share primarily related
to foreign return to provisions offset by excess tax benefits
realized from stock-based compensation arrangements.
|
See below for a reconciliation of the adjusted effective income
tax rate, the non-GAAP financial measure, to the effective income
tax rate, the most directly comparable financial measure calculated
and reported in accordance with GAAP (in thousands, except
percentages).
|
Income before
income taxes and
equity in net income
of unconsolidated
investments
|
|
Income tax
expense
|
|
Effective income
tax
rate
|
Three months ended
March 31, 2024
|
|
|
|
|
|
As reported
|
$
(167,574)
|
|
$
(3,721)
|
|
2.2 %
|
Non-recurring, other
unusual and non-operating pension and OPEB
items
|
57,100
|
|
17,407
|
|
|
As adjusted
|
$
(110,474)
|
|
$
13,686
|
|
(12.4) %
|
|
|
|
|
|
|
Three months ended
March 31, 2023
|
|
|
|
|
|
As reported
|
$
1,157,478
|
|
$
276,963
|
|
23.9 %
|
Non-recurring, other
unusual and non-operating pension and OPEB
items
|
(33,872)
|
|
(11,472)
|
|
|
As adjusted
|
$
1,123,606
|
|
$
265,491
|
|
23.6 %
|
As noted above, beginning in 2024, the company changed its
definition of adjusted EBITDA for financial accounting purposes.
The updated definition includes Albemarle's share of the
pre-tax earnings of the Talison joint venture, whereas the prior
definition included Albemarle's share of Talison earnings net of
tax. See below for a reconciliation of adjusted EBITDA (on a
consolidated basis), the non-GAAP financial measure, to Net income
attributable to Albemarle Corporation ("earnings"), the most
directly comparable financial measure calculated and reported in
accordance with GAAP, as if it were presented under the new
definition for the year ended December 31,
2023.
Net income attributable
to Albemarle Corporation
|
$
1,573,476
|
Depreciation and
amortization
|
429,944
|
Interest and financing
expenses
|
116,072
|
Income tax
expense
|
430,277
|
Proportionate share of
Windfield income tax expense
|
779,703
|
Gain on sale of
business/interest in properties, net
|
(71,190)
|
Acquisition and
integration related costs
|
26,767
|
Goodwill
impairment
|
6,765
|
Non-operating pension
and OPEB items
|
(7,971)
|
Mark-to-market gain on
public equity securities
|
44,732
|
Legal
accrual
|
218,510
|
Other
|
(1,097)
|
Total adjusted
EBITDA
|
$
3,545,988
|
Contact:
Meredith Bandy 1.980.999.5168
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SOURCE Albemarle Corporation