WILMINGTON, Del., April 20, 2020 /PRNewswire/ --
- Taking all appropriate actions to provide essential materials
and support commitment to safety of employees, customers, and
communities
- Strengthens liquidity with $1.0
billion revolving credit facility
- Secures $2.0 billion in committed
financing ensuring ability to refinance debt maturities due in
November 2020
- Expects strong first quarter results; implementing initiatives
to address significant uncertainty in select end-markets, including
conserving cash and improving working capital
- Expects 1Q 2020 GAAP EPS in the range of $(1.00) to $(0.70)
and adjusted EPS in the range of $0.82 to $0.84;
suspends full-year guidance
- Expects 1Q 2020 GAAP Income (Loss) from continuing operations
in the range of $(725) million to
$(510) million and Operating EBITDA
of approximately $1.3 billion
DuPont (NYSE: DD) today provided an update on current business
conditions and announced actions it is taking to address
macroeconomic uncertainty driven by the global outbreak of
COVID-19.
"Our team is meeting the unprecedented challenges presented by
the COVID-19 pandemic with an unwavering commitment to the safety
of our employees, our customers and the communities in which we
operate, all while delivering solid financial results for the first
quarter of 2020," said Ed Breen,
Executive Chairman and Chief Executive Officer. "However, as this
pandemic expands globally, the uncertainty around demand in select
end-markets continues. In response, we continue to advance
initiatives to improve our working capital, and have taken steps to
delay certain capital investments and idle production at several
manufacturing sites. We will remain agile, continuing to take
swift, prudent actions as conditions continue to evolve."
Capital Discipline and Liquidity
Due to the uncertainties presented by COVID-19, DuPont has
implemented a number of proactive measures to enhance its already
strong liquidity position and improve working capital.
- Entered into a 364-day $1.0
billion revolving credit facility, replacing the
$750 million revolving credit
facility that was set to expire in June
2020
- Secured a $2.0 billion 364-day
delayed-draw facility ensuring its ability to meet the November 2020 maturities; the company may elect
to replace this facility via the capital markets
- Delayed certain capital investments
- Idled production at several manufacturing sites, predominantly
production plants within the Transportation and Industrial segment,
due to the current global automotive environment
"Securing these two new facilities further strengthens our
near-term liquidity position. Additionally, we now have committed
financing in place to bridge our debt maturing in November 2020 to the receipt of the special cash
payment in connection with the Nutrition & Biosciences and IFF
transaction," said Breen. "Combined with our existing cash balances
and available borrowings through our commercial paper program,
these facilities provide the liquidity needed to navigate these
uncertain times."
(1) Adjusted EPS and Operating EBITDA are non-GAAP measures and
are defined on page 5. See page 3 for reconciliations to GAAP.
Preliminary First Quarter Results
DuPont also announced it expects first quarter 2020 GAAP EPS in
the range of $(1.00) to $(0.70) and adjusted EPS(1) in the
range of $0.82 - $0.84 on net sales of approximately $5.2 billion. First quarter 2020 GAAP
income (loss) from continuing operations is expected to be in the
range of $(725) million to
$(510) million and operating
EBITDA(1) is expected to be approximately $1.3 billion. The Company expects to deliver
operating EBITDA results above its initial guidance in each core
segment, led by strong demand for its materials into personal
protection, water filtration, food & beverage, probiotics and
electronics markets.
Full-Year 2020 Financial Outlook
The Company remains intently focused on the levers within its
control, including delivering on cost saving targets. However, with
global softening in automotive, oil & gas and select industrial
end-markets and the unknown duration and intensity of the COVID-19
pandemic, the Company has elected to suspend its full-year 2020 net
sales and adjusted EPS(1) guidance.
The Company will hold its earnings conference call at 8 a.m. ET
on Tuesday, May 5, 2020.
About DuPont
DuPont (NYSE: DD) is a global innovation
leader with technology-based materials, ingredients and solutions
that help transform industries and everyday life. Our employees
apply diverse science and expertise to help customers advance their
best ideas and deliver essential innovations in key markets
including electronics, transportation, construction, water, health
and wellness, food and worker safety. More information about
the company, its businesses and solutions can be found at
www.dupont.com. Investors can access information included on
the Investor Relations section of the website at
www.investors.dupont.com.
(1) Adjusted EPS and Operating EBITDA are non-GAAP measures and
are defined on page 5. See page 3 for reconciliations to GAAP.
Reconciliation of
Non-GAAP Measures
|
Reconciliation of
Earnings (loss) per common share from continuing operations -
diluted
to Adjusted earnings per common share from continuing
operations (unaudited)
|
Three Months
Ended
March 31, 2020 -
(Preliminary)
|
Earnings (loss)
per common share from continuing operations - diluted
(GAAP)
|
$
(1.00)
|
-
|
$
(0.70)
|
Less: Significant
items charge 1
|
(1.33)
|
-
|
(1.05)
|
Less: Merger-related
amortization of intangibles
|
(0.50)
|
Less: Non-operating
pension / OPEB benefit
|
0.01
|
Adjusted earnings
per share from continuing operations - diluted
(Non-GAAP)
|
$
0.82
|
-
|
$
0.84
|
Reconciliation of
Income (loss) from continuing operations, net of tax to Operating
EBITDA
In Millions (Unaudited)
|
Three Months
Ended
March 31, 2020 -
(Preliminary)
|
Income (loss) from
continuing operations, net of tax (GAAP)
|
$
(725)
|
-
|
$
(510)
|
+ Provision (credit)
for income taxes on continuing operations
|
39
|
-
|
44
|
Income (loss) from
continuing operations before income taxes
|
(686)
|
-
|
(466)
|
+ Depreciation and
amortization
|
772
|
- Interest
income
|
2
|
+ Interest
expense
|
173
|
- Non-operating
pension / OPEB benefit
|
11
|
- Foreign exchange
gain / (losses), net
|
(8)
|
- Significant items
charge 1
|
(1,046)
|
-
|
(846)
|
Operating EBITDA
(Non-GAAP)
|
$
1,300
|
-
|
$
1,320
|
1
Significant items for the three months ended March 31, 2020 include
charges incurred in connection with impairment tests
triggered by expectations of the proceeds from certain potential
divestitures within the Non-Core segment. These asset
impairment charges within the Non-Core segment in the aggregate are
in the expected pre-tax range of approximately
$(700) million - $(900) million, or $(0.85) - $(1.15) per share,
and relate to goodwill and long-lived assets. Additional
significant items for the three months ended March 31, 2020 include
pre-tax integration & separation costs related to post-
Merger integration and the intended separation of the N&B
business of $(197) million, or $(0.21) per share; pre-tax
restructuring charges - net of $(134) million, or $(0.14) per
share; and pre-tax deferred financing fee amortization related
to the financing associated with the N&B transaction of $(10)
million, or $(0.01) per share; partially offset by a pre-tax
gain
on the sale of Company's Compound Semiconductor business of $197
million or $0.14 per share and income tax items of
approximately $0.02-$0.04 per share.
|
Cautionary Statement Regarding Forward Looking
Statements
This communication contains "forward-looking statements" within
the meaning of the federal securities laws, including Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. In this context,
forward-looking statements often address expected future business
and financial performance and financial condition, and often
contain words such as "expect," "anticipate," "intend," "plan,"
"believe," "seek," "see," "will," "would," "target," and similar
expressions and variations or negatives of these words.
On April 1, 2019, the company
completed the separation of its materials science business into a
separate and independent public company by way of a pro rata
dividend-in-kind of all the then outstanding stock of Dow
Inc. (the "Dow Distribution"). The company completed the
separation of its agriculture business into a separate and
independent public company on June 1,
2019, by way of a pro rata dividend-in-kind of all the then
outstanding stock of Corteva, Inc. (the "Corteva
Distribution").
On December 15, 2019, DuPont and
IFF announced they had entered definitive agreements to combine
DuPont's Nutrition & Biosciences business with IFF in a
transaction that would result in IFF issuing shares to DuPont
shareholders, pending customary closing conditions, other approvals
including regulatory and that of IFF's shareholders.
Forward-looking statements address matters that are, to varying
degrees, uncertain and subject to risks, uncertainties and
assumptions, many of which that are beyond DuPont's control, that
could cause actual results to differ materially from those
expressed in any forward-looking statements. Forward-looking
statements are not guarantees of future results. Some of the
important factors that could cause DuPont's actual results to
differ materially from those projected in any such forward-looking
statements include, but are not limited to: (i) the parties'
ability to meet expectations regarding the timing, completion and
accounting and tax treatments of the proposed transaction with IFF;
changes in relevant tax and other laws, (ii) failure to obtain
necessary regulatory approvals, approval of IFF's shareholders,
anticipated tax treatment or any required financing or to satisfy
any of the other conditions to the proposed transaction with IFF,
(iii) the possibility that unforeseen liabilities, future capital
expenditures, revenues, expenses, earnings, synergies, economic
performance, indebtedness, financial condition, losses, future
prospects, business and management strategies that could impact the
value, timing or pursuit of the proposed transaction with IFF, (iv)
risks and costs and pursuit and/or implementation of the separation
of the N&B Business, including timing anticipated to complete
the separation, any changes to the configuration of businesses
included in the separation if implemented, (v) risks and costs
related to the Dow Distribution and the Corteva Distribution
(together, the "Distributions") including (a) with respect to
achieving all expected benefits from the Distributions; (b) the
incurrence of significant costs in connection with the
Distributions, including costs to service debt incurred by the
Company to establish the relative credit profiles of Corteva, Dow
and DuPont and increased costs related to supply, service and other
arrangements that, prior to the Dow Distribution, were between
entities under the common control of DuPont; (c) indemnification of
certain legacy liabilities of E. I. du Pont de Nemours and Company
("Historical EID") in connection with the Corteva Distribution; and
(d) potential liability arising from fraudulent conveyance and
similar laws in connection with the Distributions; (vi) failure to
effectively manage acquisitions, divestitures, alliances, joint
ventures and other portfolio changes, including meeting conditions
under the Letter Agreement entered in connection with the Corteva
Distribution, related to the transfer of certain levels of assets
and businesses; (vii) uncertainty as to the long-term value of
DuPont common stock; (viii) potential inability or reduced access
to the capital markets or increased cost of borrowings, including
as a result of a credit rating downgrade (ix) risks and
uncertainties related to the novel coronavirus (COVID-19) and
the responses thereto (such as voluntary and in some cases,
mandatory quarantines as well as shut downs and other restrictions
on travel and commercial, social and other activities) on
DuPont's business, results of operations, access to sources of
liquidity and financial condition which depend on highly uncertain
and unpredictable future developments, including, but not limited
to, the duration and spread of the COVID-19 outbreak, its severity,
the actions to contain the virus or treat its impact, and how
quickly and to what extent normal economic and operating conditions
resume. and (x) other risks to DuPont's business, operations and
results of operations including from: failure to develop and market
new products and optimally manage product life cycles; ability,
cost and impact on business operations, including the supply chain,
of responding to changes in market acceptance, rules, regulations
and policies and failure to respond to such changes; outcome of
significant litigation, environmental matters and other commitments
and contingencies; failure to appropriately manage process safety
and product stewardship issues; global economic and capital market
conditions, including the continued availability of capital and
financing, as well as inflation, interest and currency exchange
rates; changes in political conditions, including tariffs, trade
disputes and retaliatory actions; impairment of goodwill or
intangible assets; the availability of and fluctuations in the cost
of energy and raw materials; business or supply disruption,
including in connection with the Distributions; ability to
effectively manage costs as the company's portfolio evolves;
security threats, such as acts of sabotage, terrorism or war,
global health concerns and pandemics, natural disasters and
weather events and patterns which could or could continue to result
in a significant operational event for DuPont, adversely impact
demand or production; ability to discover, develop and protect new
technologies and to protect and enforce DuPont's intellectual
property rights; unpredictability and severity of catastrophic
events, including, but not limited to, acts of terrorism or
outbreak of war or hostilities, as well as management's response to
any of the aforementioned factors. These risks are and will be more
fully discussed in DuPont's current, quarterly and annual reports
and other filings made with the U.S. Securities and Exchange
Commission, in each case, as may be amended from time to time in
future filings with the SEC. While the list of factors presented
here is considered representative, no such list should be
considered a complete statement of all potential risks and
uncertainties. Unlisted factors may present significant additional
obstacles to the realization of forward-looking statements.
Consequences of material differences in results as compared with
those anticipated in the forward-looking statements could include,
among other things, business disruption, operational problems,
financial loss, legal liability to third parties and similar risks,
any of which could have a material adverse effect on DuPont's
consolidated financial condition, results of operations, credit
rating or liquidity. You should not place undue reliance on
forward-looking statements, which speak only as of the date they
are made. DuPont assumes no obligation to publicly provide
revisions or updates to any forward-looking statements whether as a
result of new information, future developments or otherwise, should
circumstances change, except as otherwise required by securities
and other applicable laws. A detailed discussion of some of the
significant risks and uncertainties which may cause results and
events to differ materially from such forward-looking statements is
included in the section titled "Risk Factors" (Part I, Item 1A) of
DuPont's 2019 Annual Report on Form 10-K as updated by DuPont's
subsequent periodic and current reports filed with the SEC.
Non-GAAP Financial Measures:
This release includes information that does not conform to
accounting principles generally accepted in the United States of America ("U.S. GAAP") and
are considered non-GAAP measures. Management uses these measures
internally for planning, forecasting and evaluating the performance
of the Company, including allocating resources. DuPont's management
believes these non-GAAP financial measures are useful to investors
because they provide additional information related to the ongoing
performance of DuPont to offer a more meaningful comparison related
to future results of operations. These non-GAAP financial measures
supplement disclosures prepared in accordance with U.S. GAAP, and
should not be viewed as an alternative to U.S. GAAP. Furthermore,
such non-GAAP measures may not be consistent with similar measures
provided or used by other companies. Non-GAAP measures included in
this release are defined below.
Adjusted earnings per common share from continuing operations -
diluted ("Adjusted EPS"), is defined as earnings per common share
from continuing operations - diluted, excluding the after-tax
impact of significant items, after-tax impact of amortization
expense associated with intangibles acquired as part of the Merger
and the after-tax impact of non-operating pension / other post
employment benefits ("OPEB") benefits / charges.
Operating EBITDA, is defined as earnings (i.e. income (loss)
from continuing operations before income taxes) before interest,
depreciation, amortization, non-operating pension / OPEB benefits /
charges, and foreign exchange gains / losses, adjusted to exclude
significant items.
Significant items are items that arise outside the ordinary
course of the Company's business that management believes may cause
misinterpretation of underlying business performance, both
historical and future, based on a combination of some or all of the
item's size, unusual nature and infrequent occurrence. Management
classifies as significant items certain costs and expenses
associated with integration and separation activities related to
transformational acquisitions and divestures as they are considered
unrelated to ongoing business performance.
DuPont™, the DuPont Oval Logo, and all trademarks and service
marks denoted with ™, ℠ or ® are owned by affiliates of DuPont
de Nemours, Inc. unless otherwise noted.
(1) Adjusted EPS and Operating EBITDA are non-GAAP measures
and are defined on page 5. See page 3 for reconciliations to
GAAP.
View original content to download
multimedia:http://www.prnewswire.com/news-releases/dupont-provides-update-on-current-business-conditions-liquidity-position-and-1q-2020-financial-performance-301043261.html
SOURCE DuPont