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 fourth quarter and full year 2023.
Key Fourth Quarter 2023 Results
- Net Sales of $1.4 billion, up 2% year-over-year
- Net Loss attributable to Chemours of $18 million, or a loss of
$0.12 per diluted share
- Adjusted Net Income1, which primarily excludes $62 million ($89
million pre-tax) in litigation settlement charges, was $46 million,
compared to $480 thousand in the corresponding prior-year
quarter
- Adjusted Net Income per diluted share of $0.31, compared to
$0.00 per diluted share in the corresponding prior-year
quarter
- Adjusted EBITDA1,2, which primarily excludes litigation
settlement charges of $89 million, was $176 million, compared to
$120 million in the corresponding prior-year quarter
- Operating Cash Flow of $482 million and capital expenditures of
$135 million
Key Full Year 2023 Results
- Net Sales of $6.0 billion, down 11% year-over-year
- Net Loss attributable to Chemours of $238 million, or a loss of
$1.60 per share
- Adjusted Net Income1, which primarily excludes $639 million
($764 million pre-tax) in litigation settlement charges, was $425
million, compared to $738 million in the prior year
- Adjusted Net Income per diluted share of $2.82, compared to
$4.66 per diluted share in the prior year
- Adjusted EBITDA1,2, which primarily excludes litigation
settlement charges of $764 million, was $1.0 billion, compared to
$1.4 billion in the prior year
- Operating Cash Flow of $556 million and capital expenditures of
$370 million
“Chemours navigated a challenging year in 2023 that included
prolonged destocking in certain key end markets, and these
headwinds impacted our overall financial performance,” said
Chemours CEO Denise Dignam. “Our fourth quarter performance
reflected continued growth for our low global warming potential
refrigerants in our Thermal & Specialized Solutions segment,
double-digit growth in the Performance Solutions portfolio of our
Advanced Performance Materials segment, and improved demand for
titanium dioxide across most regions in the Titanium Technologies
segment. Over the course of the year, we realized meaningful cost
savings from our Titanium Technologies Transformation Plan,
continued our investments in growth markets in Thermal &
Specialized Solutions and Advanced Performance Materials, and made
significant progress resolving certain legacy issues.”
Fourth quarter 2023 Net Sales of $1.4 billion were 2% higher
than the prior-year quarter, with volumes increasing 3%, offset by
a 1% decrease in price. Net Sales increased primarily due to a 7%
increase in TT and a 17% increase in TSS, mostly offset by a 15%
decline in APM.
___________________________________________
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.
Please refer to the attached “Reconciliation of GAAP Financial
Measures to Non-GAAP Financial Measures (Unaudited)”.
Fourth quarter 2023 Net Loss attributable to Chemours was $18
million, or a loss of $0.12 per diluted share. Adjusted Net Income,
which primarily excludes $62 million ($89 million pre-tax) in
litigation settlement charges, was $46 million, compared to $480
thousand in the prior-year quarter. Adjusted Net Income per diluted
share was $0.31, compared to $0.00 per diluted share in the
prior-year quarter.
Fourth quarter 2023 Adjusted EBITDA improved 47% year-over-year
to $176 million, primarily driven by favorable demand in TSS and
lower input costs across our businesses, combined with the impact
from operating expense savings from the Titanium Technologies
Transformation Plan.
Full year 2023 Net Sales of $6.0 billion were 11% lower vs.
2022, with volumes down 13%, partially offset by a 2% increase in
price. The year-over-year decline was driven by a 21% decline in TT
and an 11% decline in APM, partially offset by an 8% increase in
TSS.
Full year 2023 Net Loss attributable to Chemours was $238
million, or a loss of $1.60 per diluted share. Adjusted Net Income,
which primarily excludes $639 million ($764 million pre-tax) in
litigation settlement charges, was $425 million, compared to $738
million in the prior year. Adjusted Net Income per diluted share
was $2.82, compared to $4.66 per diluted share in the prior
year.
Full year 2023 Adjusted EBITDA was $1,014 million, down 25% from
2022, attributable to weaker results in TT and APM.
For the three- and nine-month periods ended September 30, 2023,
we previously excluded $31 million (net of tax) from Adjusted Net
Income and $36 million from Adjusted EBITDA for non-cash inventory
write-offs associated with the closure of our Kuan Yin
manufacturing facility. These amounts are reflected within cost of
goods sold and in Adjusted Net Income and Adjusted EBITDA on a
consolidated basis for the year ended December 31, 2023. Impacts to
Adjusted EPS associated with this change for the three- and
nine-month periods referenced were $(0.20) and $(0.19),
respectively. Please refer to the attached “Reconciliation of GAAP
Financial Measures to Non-GAAP Financial Measures (Unaudited)”. For
full year 2023 Adjusted EBITDA, the impact from non-cash inventory
write-offs associated with the closure of the Kuan Yin
manufacturing facility was approximately $(40) million, all
reflected in cost of goods sold.
Additionally, on February 26, 2024, the Company received court
approval for the previously announced comprehensive settlement of
PFAS-related drinking water claims of a defined class of U.S.
public water systems, subject to reaching final judgment under the
settlement agreement, of which Chemours’ share totals $592
million3. This amount is reflected in other accrued liabilities as
of December 31, 2023. The Company also has restricted cash and
restricted cash equivalents of $603 million related to this matter
on its balance sheet as of December 31, 2023.
Segment Results
Titanium Technologies (TT) Delivering high-quality
Ti-Pure™ pigment through customer-centered innovation
Q4 2023
Q4 2022
Change
FY 2023
FY 2022
Change
Titanium Technologies
Net sales ($ millions)
$651
$606
7%
$2,680
$3,380
(21)%
Adjusted EBITDA ($ millions)
$64
$42
52%
$290
$601
(52)%
Adjusted EBITDA Margin
10%
7%
3 ppts
11%
18%
(7) ppts
___________________________________________
3
Recorded in the quarter ended June 30, 2023 as an SG&A expense.
TT segment fourth quarter 2023 Net Sales were $651 million, up
7% compared to the fourth quarter 2022. The increase in Net Sales
was due to a 12% increase in volume and a 1% currency tailwind,
partly offset by a 6% decrease in price. Volume increased due to
stronger demand in all regions, excluding North America. Price
declines in market-exposed channels were partially offset by
contractual price increases.
Versus the prior-year quarter, Adjusted EBITDA increased by 52%
to $64 million, with Adjusted EBITDA Margin up 300 basis points to
10%, driven by the aforementioned increase in sales volume and the
cost savings realized from the Titanium Technologies Transformation
Plan, which were in-line with previous expectations.
TT segment full year 2023 Net Sales were $2.7 billion, down 21%
vs. the prior year. The decrease in Net Sales was primarily
attributable to decreases in volume of 20% and price of 1%. Volume
decreased due to the continuation of a cyclical downturn that
started in 2022, with volume declines slowing on a year-over-year
basis as the year progressed, as evidenced by the fourth quarter
2023 segment results described above. Price decreased in comparison
with the prior year as contractual price increases were more than
offset by decreases in the market-exposed customer portfolio.
Currency impact was flat when compared to the prior year.
Versus the prior year, 2023 Adjusted EBITDA decreased by 52% to
$290 million, with Adjusted EBITDA Margin down 700 basis points to
11%, driven by the aforementioned decreases in sales volume and
price, the effects of inflation on costs, and lower fixed cost
absorption due to lower production volume, partially offset by the
cost savings realized from the Titanium Technologies Transformation
Plan.
Thermal & Specialized Solutions (TSS) Driving
innovation in low global warming potential thermal management
solutions to support customer transitions to more sustainable
products
Q4 2023
Q4 2022
Change
FY 2023
FY 2022
Change
Thermal & Specialized
Solutions
Net sales ($ millions)
$374
$320
17%
$1,819
$1,680
8%
Adjusted EBITDA ($ millions)
$124
$54
130%
$685
$603
14%
Adjusted EBITDA Margin
33%
17%
16 ppts
38%
36%
2 ppts
TSS segment fourth quarter 2023 Net Sales were $374 million, up
17% compared to the fourth quarter 2022. The increase in Net Sales
was driven by a 10% increase in volume, a 6% increase in price, and
a 1% currency tailwind. Volume increased across the portfolio,
excluding legacy refrigerant products. Price increased due to
pricing actions through legacy hydrofluorocarbons and in the
Refrigerants and Foam, Propellants, and Other Products
portfolios.
Versus the prior-year quarter, Adjusted EBITDA increased by 130%
year-over-year to $124 million, with Adjusted EBITDA Margin up
1,600 basis points to 33%, driven by the aforementioned increases
in sales volume and price, as well as by lower raw material
costs.
TSS segment full year 2023 Net Sales were $1.8 billion, up 8%
compared to the prior year. The increase in Net Sales was driven by
a 6% increase in volume and a 2% increase in price. Volume
increased due to strong automotive original equipment manufacturer
demand and continued adoption of Opteon™ products across all
regions. Prices increased across the portfolio, excluding
automotive end markets, due to favorable market and regulatory
dynamics, combined with steady value-based pricing growth within
the Refrigerants and Foam, Propellants and Other Products
portfolio. Currency impact was flat when compared to the prior
year.
Versus the prior year, 2023 Adjusted EBITDA increased by 14%
year-over-year to $685 million, with Adjusted EBITDA Margin up 200
basis points to 38%, driven by the aforementioned increases in
sales volume and price as well as lower raw material costs,
partially offset by lower earnings from equity affiliates and other
income.
Advanced Performance Materials (APM) Leading with
essential chemistry for innovative and sustainable solutions in
diverse industries, from clean energy to advanced electronics and
beyond
Q4 2023
Q4 2022
Change
FY 2023
FY 2022
Change
Advanced Performance Materials
Net sales ($ millions)
$325
$382
(15)%
$1,443
$1,618
(11)%
Adjusted EBITDA ($ millions)
$40
$61
(34)%
$273
$367
(26)%
Adjusted EBITDA Margin
12%
16%
(4) ppts
19%
23%
(4) ppts
APM segment fourth quarter 2023 Net Sales were $325 million,
down 15% compared to the fourth quarter 2022. The decrease in Net
Sales was due to an 18% decline in volume, partially offset by a 2%
increase in price, with currency impact a 1% tailwind. Volume
decreased primarily due to demand softness in APM’s Advanced
Materials portfolio, which serves more economically sensitive
end-markets. The price increase was driven by continued pricing
strength in high-value end-markets in APM’s Performance Solutions
portfolio, including advanced electronics and clean energy.
Performance Solutions portfolio’s fourth quarter 2023 Net Sales
were $134 million, up 11% vs. the prior-year quarter. Advanced
Materials portfolio’s fourth quarter 2023 Net Sales were $191
million, down 27% vs. the prior-year quarter.
Versus the prior-year quarter, Adjusted EBITDA was $40 million,
down 34% year-over-year, with Adjusted EBITDA Margin down 400 basis
points to 12%, driven by the aforementioned decrease in sales
volume driving lower fixed cost absorption, and an extended outage
for maintenance and improvements at one of the Company’s
manufacturing sites, partially offset by lower raw material
costs.
APM segment full year 2023 Net Sales were $1.4 billion, down 11%
vs. the prior year. The decrease in Net Sales was driven by a
decrease in volume of 16%, partially offset by an increase in price
of 6%. Volume decreased primarily due to demand softening in the
Advanced Materials portfolio, which serves more economically
sensitive end-markets. Price increased due to expanded sales in
high-value end-markets in the Performance Solutions portfolio,
including advanced electronics and clean energy, as well as pricing
actions taken to offset higher raw material costs in the Advanced
Materials portfolio. Unfavorable currency movements added a 1%
headwind.
Performance Solutions portfolio’s full year 2023 Net Sales were
$546 million, up 11% vs. the prior year. Advanced Materials
portfolio’s full year 2023 Net Sales were $897 million, down 20%
vs. the prior year.
Versus the prior year, 2023 Adjusted EBITDA decreased by 26% to
$273 million, with Adjusted EBITDA Margin down 400 basis points to
19%, driven by the aforementioned decrease in sales volume driving
lower fixed cost absorption, the impact of higher raw material
costs due to the continued effects of inflation, and an extended
plant outage for maintenance and improvement activities at one of
the Company’s manufacturing sites.
Other Segment
The Performance Chemicals and Intermediates business in the
Company’s Other Segment had Net Sales and Adjusted EBITDA for
fourth quarter 2023 of $11 million and breakeven, respectively, and
$85 million and $18 million, respectively, for full year 2023.
Corporate Expenses4
Corporate Expenses were $49 million in fourth quarter 2023, up
$11 million vs. the prior-year quarter, an increase primarily
driven by higher legacy environmental and legal costs. Corporate
Expenses were $212 million in full year 2023, flat vs. the prior
year.
___________________________________________
4
Previously reported as Corporate and Other and excludes unallocated
items.
Liquidity
As of December 31, 2023, consolidated gross debt was $4.1
billion. Debt, net of $1.2 billion in cash, was $2.9 billion,
resulting in a net leverage ratio of approximately 2.8x times on a
trailing twelve-month Adjusted EBITDA basis. Total liquidity was
$2.1 billion, comprised of $1.2 billion in unrestricted cash and
cash equivalents, and $0.9 billion of revolving credit facility
capacity, net of outstanding letters of credit. In addition,
Chemours maintained $604 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 discussed above.
Cash provided by operating activities was $556 million in full
year 2023, down from $755 million in the prior year, driven
primarily by lower earnings and PFAS-related litigation settlements
of $66 million, partially offset by the working capital actions
outlined in the Company’s Annual Report on Form 10-K for the year
ended December 31, 2023 (“Form 10-K”) that has been filed with the
U.S. Securities and Exchange Commission (“SEC”). Capital
expenditures were $370 million, lower than originally projected due
to project timing.
During the year, the Company repurchased $69 million of common
stock. The Company also amended and extended its EUR and USD term
loans, increasing aggregate borrowing by $400 million, as
previously reported.
Cash provided by operating activities for the fourth quarter of
2023, which includes certain PFAS-related litigation settlements of
$29 million, was $482 million, up $321 million from the prior-year
quarter, primarily driven by improved earnings and the net working
capital actions discussed in the Form 10-K. Capital expenditures
for fourth quarter 2023 were $135 million vs. $67 million in the
prior-year quarter.
While the Company has historically generated operating cash
flows through various past industry and economic cycles, the
Company sees a historical pattern of seasonality, comprising a
working capital use of cash in the first half of the year,
primarily driven by seasonal accounts receivable timing. During the
second half of 2024, the Company expects a working capital source
of cash as it sells product from inventory and collects receivables
from customers. Based on these seasonal trends and the impact of
the net working capital actions, the Company currently expects its
unrestricted cash and cash equivalents balance to decrease by
approximately $600 million in the first half of 2024, with a
majority of the decrease occurring in the first quarter of
2024.
On February 26, 2024, the United States District Court for the
District of South Carolina entered a final order and judgment for
the comprehensive settlement of PFAS-related drinking water claims
for a defined class of U.S. public water systems. On September 6,
2023, Chemours deposited its 50% share in the Water District
Settlement Fund. DuPont and Corteva jointly contributed the
remaining 50%. The settlement remains subject to the condition that
this approval reach final judgment in accordance with the
settlement agreement. Upon final judgment, which the Company
expects to occur in 2024, Chemours will no longer maintain its
reversionary interest in the underlying restricted funds within the
Water District Settlement Fund and, as such, the restricted cash
and restricted cash equivalents and the associated accrued
liabilities will be derecognized.
Outlook
The Company expects an approximate 10% sequential decline in TT
Net Sales for first quarter 2024 due to weaker demand for TiO2
driven by some regional seasonality and a discrete, now resolved
production challenge, resulting in an expected decline in TT
Adjusted EBITDA of approximately 15% vs. the fourth quarter of
2023. As we exit the first quarter, we are seeing positive trends
in our order book from existing levels.
TSS is expected to grow approximately 20% sequentially in both
Net Sales and Adjusted EBITDA in first quarter 2024, driven by
seasonality and demand for Opteon™ Blend products, attributable to
the regulatory transition and continued growth in low global
warming potential solutions. This is expected to be partially
offset by higher input costs from non-Corpus Christi sourced
materials as well as investment in next generation refrigerants and
immersion cooling. The Company anticipates continued growth in our
TSS business.
For APM, the Company projects a sequential decline of
approximately 10% in Net Sales for first quarter 2024, driven by
softness in economically-sensitive end markets and the tail impact
of an extended outage at a manufacturing site that is now resolved.
Adjusted EBITDA for first quarter 2024 is anticipated to be
approximately 20% lower sequentially. Absent manufacturing issues,
APM would have been relatively flat sequentially.
APM is nearing typical cycle lows, and, given where the Advanced
Materials portfolio sits in the value chain, the Company expects
the business to lag overall market recovery by about six to nine
months. The Performance Solutions portfolio remains the growth
engine for APM. However, in the near-term, Performance Solutions’
growth path is facing two temporary headwinds – capacity
constraints driven by pending permit approvals and slower than
expected development of the hydrogen market.
Corporate expenses impacting Adjusted EBITDA for first quarter
2024 are expected to be higher by approximately $30 million
sequentially.
We expect first quarter 2024 Operating Cash Flow to be an
outflow of approximately $400 million, attributable to working
capital dynamics that include seasonal accounts receivable timing
and the unwind of year-end net working capital timing actions. We
anticipate first quarter capital expenditures to be approximately
$100 million.
For the first quarter 2024, we expect consolidated Net Sales to
be flat to slightly down sequentially, with consolidated Adjusted
EBITDA down approximately 10% compared with fourth quarter 2023
results.
Audit Committee Internal Review Update
The Company provided an update regarding its previously
announced Audit Committee Internal Review in a separate release
issued today and in the Form 10-K.
Conference Call
As previously announced, Chemours will hold a conference call
and webcast on March 28, 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 on 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 first
quarter of 2024 and expectations with respect to working capital
during the first and second halves 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, including
those related to the closing of Chemours’ Kuan Yin manufacturing
site located in Taiwan, plans to increase profitability and growth,
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 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)
Year Ended December
31,
2023
2022
2021
Net sales
$
6,027
$
6,794
$
6,345
Cost of goods sold
4,721
5,178
4,964
Gross profit
1,306
1,616
1,381
Selling, general, and administrative
expense
1,290
710
592
Research and development expense
108
118
107
Restructuring, asset-related, and other
charges
153
16
6
Total other operating expenses
1,551
844
705
Equity in earnings of affiliates
45
55
43
Interest expense, net
(208
)
(163
)
(185
)
(Loss) gain on extinguishment of debt
(1
)
7
(21
)
Other income, net
91
70
163
(Loss) income before income
taxes
(318
)
741
676
(Benefit from) provision for income
taxes
(81
)
163
68
Net (loss) income
(237
)
578
608
Less: Net income attributable to
non-controlling interests
1
—
—
Net (loss) income attributable to
Chemours
$
(238
)
$
578
$
608
Per share data
Basic (loss) earnings per share of common
stock
$
(1.60
)
$
3.72
$
3.69
Diluted (loss) earnings per share of
common stock
(1.60
)
3.65
3.60
The Chemours Company
Consolidated Balance Sheets
(Unaudited)
(Dollars in millions, except per
share amounts)
December 31,
2023
2022
Assets
Current assets:
Cash and cash equivalents
$
1,203
$
1,102
Restricted cash and restricted cash
equivalents
604
—
Accounts and notes receivable, net
610
626
Inventories
1,352
1,404
Prepaid expenses and other
66
82
Total current assets
3,835
3,214
Property, plant, and equipment
9,412
9,387
Less: Accumulated depreciation
(6,196
)
(6,216
)
Property, plant, and equipment, net
3,216
3,171
Operating lease right-of-use assets
260
240
Goodwill
102
102
Other intangible assets, net
3
13
Investments in affiliates
158
175
Restricted cash and restricted cash
equivalents
—
202
Other assets
677
523
Total assets
$
8,251
$
7,640
Liabilities
Current liabilities:
Accounts payable
$
1,159
$
1,233
Compensation and other employee-related
cost
89
121
Short-term and current maturities of
long-term debt
51
43
Current environmental remediation
129
194
Other accrued liabilities
1,058
300
Total current liabilities
2,486
1,891
Long-term debt, net
3,987
3,590
Operating lease liabilities
206
198
Long-term environmental remediation
461
474
Deferred income taxes
44
61
Other liabilities
328
319
Total liabilities
7,512
6,533
Commitments and contingent liabilities
Equity
Common stock (par value $0.01 per share;
810,000,000 shares authorized; 197,519,784 shares issued and
148,587,397 shares outstanding at December 31, 2023; 195,375,810
shares issued and 148,504,030 shares outstanding at December 31,
2022)
2
2
Treasury stock, at cost (48,932,387 shares
at December 31, 2023; 46,871,780 shares at December 31, 2022)
(1,806
)
(1,738
)
Additional paid-in capital
1,033
1,016
Retained earnings
1,782
2,170
Accumulated other comprehensive loss
(274
)
(343
)
Total Chemours stockholders’ equity
737
1,107
Non-controlling interests
2
—
Total equity
739
1,107
Total liabilities and equity
$
8,251
$
7,640
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.
The Chemours Company
Consolidated Statements of
Cash Flows (Unaudited)
(Dollars in millions)
Year Ended December
31,
2023
2022
2021
Cash flows from operating
activities
Net (loss) income
$
(237
)
$
578
$
608
Adjustments to reconcile net income to
cash provided by operating activities:
Depreciation and amortization
307
291
317
Gain on sales of assets and businesses,
net
(110
)
(21
)
(115
)
Equity in earnings of affiliates, net
11
(22
)
(11
)
Loss (gain) on extinguishment of debt
1
(7
)
21
Amortization of debt issuance costs and
issue discounts
9
9
9
Deferred tax (benefit) provision
(158
)
20
(77
)
Asset-related charges
95
5
—
Stock-based compensation expense
18
27
34
Net periodic pension cost
9
9
6
Defined benefit plan contributions
(10
)
(10
)
(17
)
Other operating charges and credits,
net
1
(21
)
18
Decrease (increase) in operating
assets:
Accounts and notes receivable, net
(10
)
91
(225
)
Inventories and other current operating
assets
58
(294
)
(210
)
Other non-current operating assets
—
(96
)
8
(Decrease) increase in operating
liabilities:
Accounts payable
(72
)
105
281
Other current operating liabilities
642
(47
)
97
Non-current operating liabilities
2
138
70
Cash provided by operating activities
556
755
814
Cash flows from investing
activities
Purchases of property, plant, and
equipment
(370
)
(307
)
(277
)
Proceeds from sales of assets and
businesses, net of cash divested
143
33
508
Foreign exchange contract settlements,
net
(8
)
3
(12
)
Other investing activities
6
(13
)
1
Cash (used for) provided by investing
activities
(229
)
(284
)
220
Cash flows from financing
activities
Proceeds from issuance of debt, net
648
—
650
Debt repayments
(280
)
(68
)
(854
)
Payments related to extinguishment of
debt
—
—
(18
)
Payments of debt issuance costs
(4
)
(1
)
(11
)
Payments on finance leases
(11
)
(11
)
(10
)
Proceeds from supplier financing
programs
123
105
91
Payments to supplier financing program
(87
)
(106
)
(85
)
Purchases of treasury stock, at cost
(69
)
(495
)
(173
)
Proceeds from exercised stock options
19
51
23
Payments related to tax withheld on vested
stock awards
(19
)
(6
)
(2
)
Payments of dividends to the Company's
common shareholders
(149
)
(154
)
(164
)
Cash received (distributions to)
non-controlling interest shareholders
1
(1
)
(1
)
Cash provided by (used for) financing
activities
172
(686
)
(554
)
Effect of exchange rate changes on cash,
cash equivalents, restricted cash and restricted cash
equivalents
4
(32
)
(34
)
Increase (decrease) in cash, cash
equivalents, restricted cash and restricted cash
equivalents
503
(247
)
446
Cash, cash equivalents, restricted
cash, and restricted cash equivalents at January 1,
1,304
1,551
1,105
Cash, cash equivalents, restricted
cash, and restricted cash equivalents at December 31,
$
1,807
$
1,304
$
1,551
Supplemental cash flows
information
Cash paid during the year for:
Interest, net of amounts capitalized
$
223
$
164
$
180
Income taxes, net of refunds
54
131
149
Non-cash investing and financing
activities:
Purchases of property, plant, and
equipment included in accounts payable
$
82
$
79
$
89
Treasury stock repurchased, not
settled
—
1
4
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 consolidated
financial statements.
The Chemours Company
Segment Financial and
Operating Data (Unaudited)
(Dollars in millions)
Segment Net Sales
Three Months Ended December
31,
Increase /
Three Months Ended September
30,
Sequential Increase /
2023
2022
(Decrease)
2023
(Decrease)
Titanium Technologies
$
651
$
606
$
45
$
690
$
(39
)
Thermal & Specialized Solutions
374
320
54
436
(62
)
Advanced Performance Materials
325
382
(57
)
343
(18
)
Other Segment
11
30
(19
)
18
(7
)
Total Net Sales
$
1,361
$
1,338
$
23
$
1,487
$
(126
)
Segment Adjusted EBITDA
Three Months Ended December
31,
Increase /
Three Months Ended September
30,
Sequential Increase /
2023
2022
(Decrease)
2023
(Decrease)
Titanium Technologies
$
64
$
42
$
22
$
69
$
(5
)
Thermal & Specialized Solutions
$
124
$
54
$
70
$
162
$
(38
)
Advanced Performance Materials
$
40
$
61
$
(21
)
$
68
$
(28
)
Other Segment
$
—
$
1
$
(1
)
$
2
$
(2
)
Quarterly Change in Net Sales from the
three months ended December 31, 2022
Percentage Change Due
To
December 31, 2023 Net
Sales
Percentage Change vs. December
31, 2022
Price
Volume
Currency
Portfolio
Total Company
$
1,361
2
%
(1
)%
3
%
1
%
(1
)%
Titanium Technologies
$
651
7
%
(6
)%
12
%
1
%
—
%
Thermal & Specialized Solutions
374
17
%
6
%
10
%
1
%
—
%
Advanced Performance Materials
325
(15
)%
2
%
(18
)%
1
%
—
%
Other Segment
11
(63
)%
3
%
(19
)%
—
%
(47
)%
Quarterly Change in Net Sales from the
three months ended September 30, 2023
Percentage Change Due
To
December 31, 2023 Net
Sales
Percentage Change vs.
September 30, 2023
Price
Volume
Currency
Portfolio
Total Company
$
1,361
(8
)%
(2
)%
(5
)%
(1
)%
—
%
Titanium Technologies
$
651
(6
)%
(2
)%
(3
)%
(1
)%
—
%
Thermal & Specialized Solutions
374
(14
)%
(1
)%
(13
)%
—
%
—
%
Advanced Performance Materials
325
(5
)%
(5
)%
1
%
(1
)%
—
%
Other Segment
11
(39
)%
—
%
—
%
—
%
(39
)%
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.
The Company revised its September 30, 2023 non-GAAP Adjusted
EBITDA calculation to (1) remove previous adjustments related to
the write-off of certain raw materials and stores inventories and
(2) correct the understatement of accrued liabilities for steam
supplier contract litigation stemming from the decommissioning of
the Kuan Yin, Taiwan manufacturing facility. The following table
presents the three and nine months September 30, 2023 as previously
reported and as revised.
Three Months Ended
Nine Months Ended
September 30, 2023
September 30, 2023
September 30, 2023
September 30, 2023
As previously reported
As revised
As previously reported
As revised
Net income (loss) attributable to
Chemours
$
20
$
12
$
(212
)
$
(220
)
Non-operating pension and other
post-retirement employee benefit income
1
1
1
1
Exchange losses, net
9
9
21
21
Restructuring, asset-related, and other
charges (1)
153
127
168
142
Loss on extinguishment of debt
1
1
1
1
Gain on sales of assets and businesses,
net (2)
(106
)
(106
)
(106
)
(106
)
Transaction costs (3)
7
7
7
7
Qualified spend recovery (4)
(11
)
(11
)
(43
)
(43
)
Litigation-related charges (5)
31
31
675
675
Environmental charges (6)
8
8
9
9
Adjustments made to income taxes (7)
(1
)
(1
)
(5
)
(5
)
Benefit from income taxes relating to
reconciling items (8)
(16
)
(13
)
(107
)
(104
)
Adjusted Net Income
96
65
409
378
Net income attributable to non-controlling
interests
—
—
1
1
Interest expense, net
55
55
145
145
Depreciation and amortization
76
76
233
233
All remaining provision for income
taxes
20
15
86
81
Adjusted EBITDA
$
247
$
211
$
874
$
838
Weighted-average number of common shares
outstanding - basic
148,623,633
148,623,633
148,929,580
148,929,580
Weighted-average number of common shares
outstanding - diluted (10)
150,185,638
150,185,638
150,683,368
150,683,368
Basic earnings (loss) per share of common
stock (11)
$
0.13
$
0.08
$
(1.42
)
$
(1.47
)
Diluted earnings (loss) per share of
common stock (10) (11)
0.13
0.08
(1.42
)
(1.47
)
Adjusted basic earnings per share of
common stock (11)
0.64
0.44
2.75
2.55
Adjusted diluted earnings per share of
common stock (10) (11)
0.63
0.43
2.71
2.52
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)
Three Months Ended
Year Ended
December 31,
December 31,
2023
2022
2023
2022
(Loss) income before income
taxes
$
(71
)
$
(69
)
$
(318
)
$
741
Net (loss) income attributable to
Chemours
(18
)
(97
)
(238
)
578
Non-operating pension and other
post-retirement employee benefit (cost) income
(1
)
(1
)
—
(5
)
Exchange losses, net
17
26
38
15
Restructuring, asset-related, and other
charges (1)
11
1
153
15
Loss (gain) on extinguishment of debt
—
—
1
(7
)
(Gain) loss on sales of assets and
businesses, net (2)
(4
)
5
(110
)
(21
)
Transaction costs (3)
9
—
16
—
Qualified spend recovery (4)
(11
)
(17
)
(54
)
(58
)
Litigation-related charges (5)
89
38
764
23
Environmental charges (6)
—
22
9
204
Adjustments made to income taxes (7)
(14
)
39
(19
)
30
Benefit from income taxes relating to
reconciling items (8)
(32
)
(16
)
(135
)
(36
)
Adjusted Net Income
46
—
425
738
Net income attributable to non-controlling
interests
—
—
1
—
Interest expense, net
63
41
208
163
Depreciation and amortization
74
74
307
291
All remaining provision for income
taxes
(7
)
5
73
169
Adjusted EBITDA
$
176
$
120
$
1,014
$
1,361
Total debt principal
$
4,084
$
3,641
Less: Cash and cash equivalents
(1,203
)
(1,102
)
Total debt principal, net
$
2,881
$
2,539
Net Leverage Ratio (calculated using
GAAP earnings) (9)
(9.1x)
3.4x
Net Leverage Ratio (calculated using
Non-GAAP earnings) (9)
2.8x
1.9x
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 7 – Restructuring, Asset-related, and Other Charges"
to the Consolidated Financial Statements in our Annual Report on
Form 10-K for the year ended December 31, 2023 for further details.
In 2022, includes asset charges and write-offs resulting from the
conflict between Russia and Ukraine and our decision to suspend our
business with Russian entities.
(2)
Refer to “Note 8 – Other Income (Expense), Net” to the Consolidated
Financial Statements in our Annual Report on Form 10-K for the year
ended December 31, 2022 for further details.
(3)
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 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.
(5)
Litigation-related charges pertains to litigation settlements, PFOA
drinking water treatment accruals, and other related legal fees.
For the year ended December 31, 2023, 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 year ended December 31, 2022, 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. In 2022, environmental
charges include $196 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 (loss)
income 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.
(10)
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, 2022 and
year 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, 2022 and the year ended December 31, 2023, as
Adjusted Net Income was in a net income position.
(11)
Figures may not recalculate exactly due to rounding. Basic and
diluted earnings per share are calculated based on unrounded
numbers.
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
Year Ended
December 31,
September 30,
December 31,
2023
2022
2023
2023
2022
Numerator:
Net (loss) income attributable to
Chemours
$
(18)
$
(97)
$
12
$
(238)
$
578
Adjusted Net Income
46
—
65
425
738
Denominator:
Weighted-average number of common shares
outstanding - basic
148,861,410
150,046,614
148,623,633
148,912,397
155,359,361
Dilutive effect of the Company's employee
compensation plans (1)
1,078,467
2,176,565
1,562,005
1,584,958
2,943,646
Weighted-average number of common shares
outstanding - diluted (1)
149,939,877
152,223,179
150,185,638
150,497,355
158,303,007
Basic (loss) earnings per share of common
stock (2)
$
(0.12)
$
(0.65)
$
0.08
$
(1.60)
$
3.72
Diluted (loss) earnings per share of
common stock (1) (2)
(0.12)
(0.65)
0.08
(1.60)
3.65
Adjusted basic earnings per share of
common stock (2)
0.31
0.00
0.44
2.85
4.75
Adjusted diluted earnings per share of
common stock (1) (2)
0.31
0.00
0.43
2.82
4.66
(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, 2022 and
year 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, 2022 and the year 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240327592114/en/
INVESTORS Brandon Ontjes VP, FP&A and 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
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