DOWNERS GROVE, Ill.,
May 9, 2022 /PRNewswire/ -- Univar Solutions Inc. (NYSE:
UNVR) ("Univar Solutions" or "the Company"), a leading global
commodity and specialty chemical and ingredient distributor, today
announced its financial results for the first quarter ended
March 31, 2022.
First Quarter 2022 Highlights
- Record net income of $180.8
million was 173.1 percent higher than the $66.2 million reported in the prior-year first
quarter. Adjusted net income(1) of $183.4 million compared to $73.6 million in the prior-year first
quarter.
- Earnings per diluted share improved to $1.06 compared to $0.39 per diluted share in the prior-year first
quarter. Adjusted earnings per diluted share(1)
increased to $1.07 from $0.43 in the prior-year first quarter.
- Record Adjusted EBITDA(1) was $319.3 million compared to $182.2 million in the prior-year first quarter.
Adjusted EBITDA margin(1) of 11.1 percent improved from
8.5 percent in the prior-year first quarter.
- Net cash used in operating activities increased to $134.4 million from $92.3
million in the prior year first quarter.
- Leverage ratio(1) was 2.4x at March 31, 2022, compared to 2.5x at December 31, 2021.
- Share repurchases returned $24
million of capital to shareholders during the first
quarter.
Univar Solutions Reports Record 2022 First Quarter Financial
Results and Raises Full Year 2022 Guidance
Full-year Adjusted EBITDA(1) guidance increased
to the range of $1,000 million to
$1,050 million.
"Coming off a tremendous 2021, I am truly delighted with our
record financial performance in the first quarter, despite the
ongoing challenges of constrained supply, transport and the
pandemic," said David Jukes,
president and chief executive officer. "This is a testament to our
agile, resilient business model and dedicated team of professionals
who put the customer at the centre of all we do, everyday. Despite
an uncertain world, we believe investments in our installed asset
base, owned trucking fleet and digital backbone, along with our
robust supplier relationships and strong commercial execution will
continue to deliver profitable share growth and shareholder value.
In 2022, we remain focused on factors we can control and expect an
outstanding full-year Adjusted EBITDA in the range of $1,000 million to $1,050
million. Looking further ahead to 2023, whilst not giving
firm guidance at this point, we expect to accelerate the targets
laid out at last November's Analyst Day, and deliver a full-year
ahead of schedule."
(1)
|
Non-GAAP financial
measure. See "Use of Non-GAAP Financial Measures" for further
discussion and related schedules attached hereto for
reconciliations to the most directly comparable GAAP financial
measures and related explanations of ratios or percentages, as
applicable.
|
Company Performance
Univar Solutions operating performance results are described
below and, unless otherwise indicated, are a comparison of first
quarter 2022 results with first quarter 2021 results.
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
Three months ended
March 31,
|
|
|
|
|
|
% change
excl.
|
(in
millions)
|
|
2022
|
|
2021
|
|
$
change
|
|
%
change
|
|
currency(1)
|
Segment External
Sales(2)
|
|
|
|
|
|
|
|
|
|
|
USA
|
|
$
1,843.2
|
|
$
1,293.0
|
|
$
550.2
|
|
42.6
%
|
|
42.6
%
|
EMEA
|
|
562.2
|
|
505.9
|
|
56.3
|
|
11.1
%
|
|
23.8
%
|
Canada
|
|
293.4
|
|
222.7
|
|
70.7
|
|
31.7
%
|
|
31.8
%
|
LATAM
|
|
183.8
|
|
133.8
|
|
50.0
|
|
37.4
%
|
|
35.4
%
|
Total Consolidated
Net Sales
|
|
$
2,882.6
|
|
$
2,155.4
|
|
$
727.2
|
|
33.7
%
|
|
36.6
%
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit
(exclusive of depreciation)(3)(4)
|
|
|
|
|
|
|
|
|
USA
|
|
$
472.9
|
|
$
325.7
|
|
$
147.2
|
|
45.2
%
|
|
45.2
%
|
EMEA
|
|
141.6
|
|
128.2
|
|
13.4
|
|
10.5
%
|
|
22.6
%
|
Canada
|
|
74.5
|
|
56.3
|
|
18.2
|
|
32.3
%
|
|
32.3
%
|
LATAM
|
|
40.5
|
|
32.2
|
|
8.3
|
|
25.8
%
|
|
23.3
%
|
Total Consolidated
Gross Profit
(exclusive of depreciation)(3)
|
|
$
729.5
|
|
$
542.4
|
|
$
187.1
|
|
34.5
%
|
|
37.2
%
|
|
|
|
|
|
|
|
|
|
|
|
Total Consolidated
Net Income
|
|
$
180.8
|
|
$
66.2
|
|
$
114.6
|
|
173.1
%
|
|
177.3
%
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA(3)
|
|
|
|
|
|
|
|
|
|
|
USA
|
|
$
209.2
|
|
$
101.8
|
|
$
107.4
|
|
105.5
%
|
|
105.5
%
|
EMEA
|
|
63.8
|
|
50.6
|
|
13.2
|
|
26.1
%
|
|
42.5
%
|
Canada
|
|
36.7
|
|
26.3
|
|
10.4
|
|
39.5
%
|
|
39.5
%
|
LATAM
|
|
16.2
|
|
15.6
|
|
0.6
|
|
3.8
%
|
|
1.9
%
|
Other(5)
|
|
(6.6)
|
|
(12.1)
|
|
5.5
|
|
45.5
%
|
|
45.5
%
|
Total Consolidated
Adjusted EBITDA(3)
|
|
$
319.3
|
|
$
182.2
|
|
$
137.1
|
|
75.2
%
|
|
79.6
%
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Represents percentage
change for the comparative periods using a constant currency.
See "Use of Non-GAAP Financial Measures" for further
discussion.
|
(2)
|
Segment external
sales represent sales to third party customers. Inter-segment sales
are excluded from segment external sales.
|
(3)
|
Non-GAAP financial
measures. See "Use of Non-GAAP Financial Measures" for further
discussion and related schedules attached hereto for
reconciliations to the most directly comparable GAAP financial
measures.
|
(4)
|
Gross profit
(exclusive of depreciation) is defined as segment net sales
inclusive of inter-segment sales less cost of goods sold (exclusive
of depreciation).
|
(5)
|
Other represents
unallocated corporate costs that do not directly benefit
segments.
|
Consolidated Results
Univar Solutions reported net sales of $2.9 billion, an increase of 33.7 percent on a
reported basis and 36.6 percent on a constant currency
basis(1) compared to the prior-year first quarter.
Higher sales were attributable to chemical price inflation, higher
industrial demand, and market share gains.
Gross profit (exclusive of depreciation) of $729.5 million increased 34.5 percent on a
reported basis and 37.2 percent on a constant currency
basis(1). Higher gross profit was driven primarily by
chemical price inflation, higher industrial demand, operational
execution, and market share gains, and partially offset by higher
input cost inflation. Gross margin increased 10 basis points to
25.3 percent compared to the prior-year first quarter, primarily
due to chemical price inflation, partially offset by higher input
cost inflation.
Univar Solutions reported net income of $180.8 million, or $1.06 per diluted share, compared to net income
of $66.2 million, or $0.39 per diluted share, in the prior year first
quarter. The increase was primarily due to higher gross profit
(exclusive of depreciation), partially offset by higher
Warehousing, Selling and Administrative (WS&A) costs as well as
higher taxes.
Adjusted earnings per diluted share(1) of
$1.07 in the quarter increased from
$0.43 in the prior-year first quarter
primarily due to higher net income.
Adjusted EBITDA(1) of $319.3
million increased $137.1
million, or 75.2 percent, compared to the prior-year first
quarter, or an increase of 79.6 percent on a constant currency
basis(1). The increase was primarily driven by higher gross profit,
partially offset by higher WS&A.
Net cash used in operating activities increased to $134.4 million from $92.3 million in the first quarter last
year, primarily driven by higher net working capital use due to
chemical price inflation and timing of the 2021 variable
compensation payments. The increase in net cash used in operating
activities was partially offset by higher net income.
Liquidity was $1,098.6 million as of March 31, 2022,
inclusive of $245.4 million of
cash on hand and availability under committed, asset-based
credit facilities.
(1)
|
Non-GAAP financial
measure. See "Use of Non-GAAP Financial Measures" for further
discussion and related schedules attached hereto for
reconciliations to the most directly comparable GAAP financial
measures and related explanations of ratios or percentages, as
applicable.
|
Segment Results
USA:
- USA external sales increased
42.6 percent during the quarter, primarily due to chemical price
inflation, higher industrial demand, and market share gains.
- Gross profit (exclusive of depreciation) increased by 45.2
percent, primarily driven by chemical price inflation, higher
industrial demand, operational execution, and market share gains,
partially offset by input cost inflation. Gross margin increased 50
basis points to 25.7 percent, primarily driven by chemical price
inflation, partially offset by input cost inflation.
- Adjusted EBITDA(1) increased 105.5 percent to
$209.2 million, primarily driven by
higher gross profit, partially offset by higher WS&A. The
increase in WS&A was primarily due to higher operating costs
and variable compensation, partially offset by an environmental
recovery and net synergies. Adjusted EBITDA margin(1)
increased by 340 basis points to 11.3 percent, primarily due to
operating leverage and higher gross margins.
EMEA:
- EMEA external sales increased 11.1 percent, or 23.8 percent on
a constant currency basis(1). The increase was primarily
due to chemical price inflation and market share gains, partially
offset by the effects of the Distrupol divestiture.
- Gross profit (exclusive of depreciation) increased 10.5
percent, or 22.6 percent on a constant currency
basis(1), primarily driven by chemical price inflation,
operational execution, and market share gains. Gross margin
decreased 10 basis points to 25.2 percent, driven by input cost
inflation, partially offset by chemical price inflation.
- Adjusted EBITDA(1) increased 26.1 percent to
$63.8 million on a reported basis, or
42.5 percent on a constant currency basis(1), compared
to the prior-year first quarter. This increase was primarily driven
by higher gross profit, partially offset by the effects of the
Distrupol divestiture. Adjusted EBITDA margin(1)
increased 130 basis points to 11.3 percent, primarily due to
operating leverage.
(1)
|
Non-GAAP
financial measure. See "Use of Non-GAAP Financial Measures" for
further discussion and related schedules attached hereto for
reconciliations to the most directly comparable GAAP financial
measures and related explanations of ratios or percentages, as
applicable.
|
CANADA:
- Canada external sales
increased by 31.7 percent, or 31.8 percent on a constant currency
basis(1), primarily due to chemical price inflation and
market share gains.
- Gross profit (exclusive of depreciation) increased by 32.3
percent on a reported and constant currency basis(1).
The increase was primarily driven by chemical price inflation,
operational execution, and market share gains, partially offset by
input cost inflation. Gross margin increased 10 basis points to
25.4 percent, primarily driven by chemical price inflation,
partially offset by input cost inflation.
- Adjusted EBITDA(1) increased 39.5 percent to
$36.7 million on a reported and
constant currency basis(1) compared to the prior year.
The increase in Adjusted EBITDA(1) was primarily due to
higher gross profit, partially offset by higher WS&A, which was
impacted by higher operating costs and variable compensation.
Adjusted EBITDA margin(1) increased by 70 basis points
to 12.5 percent, primarily due to operating leverage.
LATAM:
- LATAM external sales increased by 37.4 percent, or 35.4 percent
on a constant currency basis(1), largely due to chemical
price inflation and the Sweetmix acquisition.
- Gross profit (exclusive of depreciation) increased by 25.8
percent, or 23.3 percent on a constant currency
basis(1), primarily due to chemical price inflation and
the Sweetmix acquisition, partially offset by input cost inflation.
Gross margin decreased 210 basis points to 22.0 percent, primarily
driven by product mix.
- Adjusted EBITDA(1) increased 3.8 percent to
$16.2 million on a reported basis, or
1.9 percent on a constant currency basis(1). Adjusted
EBITDA(1) increased primarily due to higher gross
profit, partially offset by higher WS&A. Adjusted EBITDA
margin(1) decreased 290 basis points to 8.8 percent,
primarily due to lower gross margin and higher WS&A given
increased corporate cost allocation as a result of the SAP
implementation and higher operating costs.
(1)
|
Non-GAAP financial
measure. See "Use of Non-GAAP Financial Measures" for further
discussion and related schedules attached hereto for
reconciliations to the most directly comparable GAAP financial
measures and related explanations of ratios or percentages, as
applicable.
|
Outlook
The Company expects Adjusted EBITDA(1) to be between
$270 million and $290 million for the second quarter of 2022 as
compared to $197.5 million for the
second quarter of 2021. For full-year 2022, Adjusted
EBITDA(1) is expected to increase to a range of
$1,000 million to $1,050 million, as compared to $797.7 million for full year 2021. Our forecast
versus the prior-year reflects anticipated continued strong
business conditions, market share growth and benefits from Nexeo
net synergies. Net Free Cash Flow(1) in 2022 is expected
to be in a range of $400 million to
$450 million.
The Company reaffirms its commitment to its objectives and
expects:
- Ingredients & Specialties (I&S) organic growth of
greater than 200 basis points above economic consensus
- Chemicals & Services (C&S) organic growth above
economic consensus
- Adjusted EBITDA(1) margins to greater than 9
percent
- 50 percent Net Free Cash Flow(1) conversion
- Maintain leverage between 2.0x and 2.5x
- Average annual capital return to shareholders of 20 percent to
30 percent of Adjusted Net Income(1)
The majority of the Company's debt obligations mature in 2026
and beyond and the Company is in full compliance with the covenants
under its credit agreements as of March 31,
2022.
Conference Call and Webcast Details
The Company will host a webcast with investors to discuss first
quarter 2022 results at 9:00 a.m. ET
on May 10, 2022, which can be accessed on the Investor
Relations section of its website at
http://investors.univarsolutions.com. After the live webcast, a
replay of the webcast will be available on the same website until
May 10, 2024.
(1)
|
Non-GAAP financial
measure. See "Use of Non-GAAP Financial Measures" for further
discussion and related schedules attached hereto for
reconciliations to the most directly comparable GAAP financial
measures and related explanations of ratios or percentages, as
applicable.
|
Use of Non-GAAP Measures
In this press release, the Company's financial results are
provided both in accordance with accounting principles generally
accepted in the United States of
America (GAAP) and using certain non-GAAP financial
measures. In particular, the Company presents the non-GAAP
financial measures of gross profit (exclusive of depreciation),
gross margin (defined as gross profit (exclusive of depreciation)
divided by net sales on a consolidated basis and by external sales
on a segment level, as applicable), Adjusted EBITDA, Adjusted
EBITDA margin (defined as Adjusted EBITDA divided by net sales on a
consolidated basis and by external sales on a segment level, as
applicable), Adjusted net income, Adjusted earnings per diluted
share, leverage ratio, net free cash flow and results on a constant
currency basis. The non-GAAP financial measures are included as a
complement to results provided in accordance with GAAP because
management believes these non-GAAP financial measures help
investors' ability to analyze underlying trends in the Company's
business, evaluate its performance relative to other companies in
its industry and provide useful information to both management and
investors by excluding certain items that may not be indicative of
the Company's core operating results. Additionally, the Company has
used, and may continue to use, Adjusted EBITDA and Adjusted
earnings per diluted share in setting performance incentive targets
to more closely align management compensation with operational
performance.
The Company evaluates its results of operations on both an as
reported and a constant currency basis. The constant currency
presentation is a non-GAAP financial measure, which excludes the
impact of fluctuations in foreign currency exchange rates. The
Company believes providing information on a constant currency basis
provides valuable supplemental information regarding its results of
operations, consistent with how it evaluates its performance. The
Company calculates constant currency percentages and other
information by converting its financial results in local currency
for a period using the average exchange rate for the prior period
to which it is comparing.
The non-GAAP financial measures noted above are not calculated
in accordance with GAAP and should not be considered a substitute
for any other measure of financial performance presented in
accordance with GAAP. Additionally, other companies may calculate
Adjusted EBITDA and other such metrics differently than the Company
does, limiting their usefulness as comparative measures. For
further information related to the Company's use of non-GAAP
financial measures, and reconciliations to the most directly
comparable GAAP measures, see the schedules attached hereto.
About Univar Solutions
Univar Solutions (NYSE: UNVR) is a leading global specialty
chemical and ingredient distributor representing a premier
portfolio from the world's leading producers. With the industry's
largest private transportation fleet and technical sales force,
unparalleled logistics know-how, deep market and regulatory
knowledge, formulation and recipe development, and leading digital
tools, the Company is well-positioned to offer tailored solutions
and value-added services to a wide range of markets, industries,
and applications. While fulfilling its purpose to help keep
communities healthy, fed, clean and safe, Univar Solutions is
committed to helping customers and suppliers innovate and focus on
Growing Together. Learn more at www.univarsolutions.com.
Forward-Looking Statements
This press release includes certain statements relating to
future events and our intentions, beliefs, expectations, and
outlook for the future, which are "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, as amended,
including, without limitation, statements regarding the impacts of
the effects of COVID-19 on the Company, the Company's anticipated
future results and financial performance, liquidity position and
cash flows, actions regarding expense control and cost reductions,
expected net synergies from the Nexeo acquisition, capital
expenditures and other statements regarding the Company's
Streamline 2022 Program and other initiatives. Forward-looking
statements are subject to known and unknown risks and
uncertainties, many of which may be beyond the Company's control.
These forward-looking statements are subject to risks and
uncertainties that could cause actual results to differ materially
from the expectations and assumptions. A detailed discussion of
these factors and uncertainties is contained in the Company's
filings with the Securities and Exchange Commission. Potential
factors that could affect such forward-looking statements include,
among others: general economic conditions, particularly
fluctuations in industrial production and consumption and the
timing and extent of economic downturns and potential recoveries
the sustained geographic spread of the COVID-19 pandemic; the
duration and severity of the COVID-19 pandemic; current and new
actions that may be taken by governmental authorities to address or
otherwise mitigate the impact of the COVID-19 pandemic; the
potential negative impacts of COVID-19 on the global economy and
our employees, customers, vendors and suppliers; and the overall
impact of the COVID-19 pandemic on our business, results of
operations and financial condition; significant changes in the
business strategies of producers or in the operations of our
customers; increased competitive pressures, including as a result
of competitor consolidation; significant changes in the pricing,
demand and availability of chemicals; our indebtedness, the
restrictions imposed by and costs associated with our debt
instruments, and our ability to obtain additional financing; the
broad spectrum of laws and regulations that we are subject to,
including extensive environmental, health and safety laws and
regulations; potential business disruptions and security breaches,
including cybersecurity incidents; an inability to generate
sufficient working capital; increases in transportation and fuel
costs and changes in our relationship with third party providers;
accidents, safety failures, environmental damage, product quality
issues; delivery failures or potential hazards and risks related to
our operations and the hazardous materials we handle, potential
inability to obtain adequate insurance coverage; ongoing
litigation; potential product liability claims and recalls and
other environmental, legal and regulatory risks; challenges
associated with international operations; exposure to interest rate
and currency fluctuations; risks associated with integration of
legacy business systems; possible impairment of goodwill and
intangible assets; an inability to integrate the business and
systems of the companies we acquire, including failure to realize
the anticipated benefits of such acquisitions; negative
developments affecting our pension plans and multi-employer
pensions; labor disruptions associated with the unionized portion
of our workforce; and the other factors described in the Company's
Annual Report on Form 10-K for the year ended December 31, 2021, as well as other filings with
the Securities and Exchange Commission. We caution you that the
forward-looking information presented in this press release is not
a guarantee of future events or results, and that actual events or
results may differ materially from those made in or suggested by
the forward-looking information contained in this press release. In
addition, forward-looking statements generally can be identified by
the use of forward-looking terminology such as "may," "plan,"
"seek, "will," "expect," "intend," "estimate," "anticipate,"
"believe" or "continue" or the negative thereof or variations
thereon or similar terminology. Any forward-looking information
presented herein is made only as of the date of this press release,
and the Company does not undertake any obligation to update or
revise any forward-looking information to reflect changes in
assumptions, the occurrence of unanticipated events, or otherwise,
except as required by law.
Univar Solutions
Inc.
Condensed
Consolidated Statements of Operations
(Unaudited)
|
|
|
|
Three months ended
March 31,
|
(in millions,
except per share data)
|
|
2022
|
|
2021
|
Net sales
|
|
$
2,882.6
|
|
$
2,155.4
|
Cost of goods sold
(exclusive of depreciation)
|
|
2,153.1
|
|
1,613.0
|
Operating
expenses:
|
|
|
|
|
Outbound freight and
handling
|
|
$
115.9
|
|
$
91.4
|
Warehousing, selling
and administrative
|
|
294.3
|
|
268.8
|
Other operating
expenses, net
|
|
15.7
|
|
44.2
|
Depreciation
|
|
32.9
|
|
43.8
|
Amortization
|
|
11.8
|
|
13.1
|
Total operating
expenses
|
|
$
470.6
|
|
$
461.3
|
Operating
income
|
|
$
258.9
|
|
$
81.1
|
Other (expense)
income:
|
|
|
|
|
Interest
income
|
|
$
1.1
|
|
$
0.4
|
Interest
expense
|
|
(22.2)
|
|
(27.0)
|
Gain on sale of
business
|
|
—
|
|
0.6
|
Other income,
net
|
|
7.7
|
|
28.7
|
Total other (expense)
income
|
|
$
(13.4)
|
|
$
2.7
|
Income before income
taxes
|
|
$
245.5
|
|
$
83.8
|
Income tax
expense
|
|
64.7
|
|
17.6
|
Net income
|
|
$
180.8
|
|
$
66.2
|
|
|
|
|
|
Income per common
share:
|
|
|
|
|
Basic income per
common share
|
|
$
1.07
|
|
$
0.39
|
Diluted income per
common share
|
|
$
1.06
|
|
$
0.39
|
|
|
|
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
Basic
|
|
169.6
|
|
169.3
|
Diluted
|
|
171.3
|
|
170.1
|
|
|
|
|
|
Univar Solutions
Inc.
Condensed
Consolidated Balance Sheets
(Unaudited)
|
|
(in millions,
except per share data)
|
|
March 31,
2022
|
|
December
31,
2021
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
245.4
|
|
$
251.5
|
Trade accounts
receivable, net of allowance for doubtful accounts of $15.0 and
$15.8 at March 31, 2022 and December 31, 2021,
respectively
|
|
1,806.0
|
|
1,539.5
|
Inventories
|
|
1,105.5
|
|
932.2
|
Prepaid expenses and
other current assets
|
|
198.2
|
|
169.1
|
Total current
assets
|
|
$
3,355.1
|
|
$
2,892.3
|
Property, plant and
equipment, net
|
|
$
1,028.1
|
|
$
1,031.0
|
Goodwill
|
|
2,321.8
|
|
2,310.4
|
Intangible assets,
net
|
|
203.9
|
|
211.7
|
Deferred tax
assets
|
|
26.5
|
|
29.4
|
Other
assets
|
|
337.3
|
|
303.0
|
Total
assets
|
|
$
7,272.7
|
|
$
6,777.8
|
Liabilities and
stockholders' equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Short-term
financing
|
|
$
10.0
|
|
$
—
|
Trade accounts
payable
|
|
1,149.0
|
|
1,009.3
|
Current portion of
long-term debt
|
|
40.4
|
|
41.5
|
Accrued
compensation
|
|
92.3
|
|
196.4
|
Other accrued
expenses
|
|
430.6
|
|
420.4
|
Total current
liabilities
|
|
$
1,722.3
|
|
$
1,667.6
|
Long-term
debt
|
|
$
2,416.9
|
|
$
2,223.5
|
Pension and other
postretirement benefit liabilities
|
|
207.2
|
|
211.7
|
Deferred tax
liabilities
|
|
86.3
|
|
56.1
|
Other long-term
liabilities
|
|
323.2
|
|
326.4
|
Total
liabilities
|
|
$
4,755.9
|
|
$
4,485.3
|
Stockholders'
equity:
|
|
|
|
|
Preferred stock, $0.01
par value, 200,000,000 shares authorized, no shares issued or
outstanding at March 31, 2022 and December 31,
2021
|
|
$
—
|
|
$
—
|
Common stock, $0.01
par value, 2,000,000,000 shares authorized, 172,037,131 and
171,199,938 shares issued at March 31, 2022 and
December 31, 2021, respectively
|
|
1.7
|
|
1.7
|
Additional paid-in
capital
|
|
3,062.5
|
|
3,048.5
|
Treasury stock at
cost, 2,563,449 and 1,832,385 shares at March 31, 2022 and
December 31, 2021, respectively
|
|
(74.0)
|
|
(50.0)
|
Accumulated
deficit
|
|
(164.2)
|
|
(345.0)
|
Accumulated other
comprehensive loss
|
|
(309.2)
|
|
(362.7)
|
Total stockholders'
equity
|
|
$
2,516.8
|
|
$
2,292.5
|
Total liabilities and
stockholders' equity
|
|
$
7,272.7
|
|
$
6,777.8
|
Univar Solutions
Inc.
Condensed
Consolidated Statements of Cash Flows
(Unaudited)
|
|
|
|
Three months ended
March 31,
|
(in
millions)
|
|
2022
|
|
2021
|
Operating
activities:
|
|
|
|
|
Net income
|
|
$
180.8
|
|
$
66.2
|
Adjustments to
reconcile net income to net cash used by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
44.7
|
|
56.9
|
Amortization of
deferred financing fees and debt discount
|
|
1.4
|
|
1.8
|
Gain on sale of
business
|
|
—
|
|
(0.6)
|
Gain on sale of
property, plant and equipment and other assets
|
|
(0.9)
|
|
(1.1)
|
Deferred income
taxes
|
|
19.1
|
|
2.0
|
Stock-based
compensation expense
|
|
13.9
|
|
5.9
|
Fair value adjustment
for warrants
|
|
—
|
|
(25.6)
|
Other
|
|
2.6
|
|
(1.5)
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Trade accounts
receivable, net
|
|
(270.5)
|
|
(220.9)
|
Inventories
|
|
(168.9)
|
|
(70.8)
|
Prepaid expenses and
other current assets
|
|
(15.9)
|
|
(34.3)
|
Trade accounts
payable
|
|
140.3
|
|
138.1
|
Other, net
|
|
(81.0)
|
|
(8.4)
|
Net cash used by
operating activities
|
|
$
(134.4)
|
|
$
(92.3)
|
Investing
activities:
|
|
|
|
|
Purchases of property,
plant and equipment
|
|
$
(32.5)
|
|
$
(16.3)
|
Purchases of
businesses, net of cash acquired
|
|
(3.8)
|
|
—
|
Proceeds from sale of
property, plant, and equipment
|
|
1.8
|
|
5.3
|
Other
|
|
—
|
|
(1.2)
|
Net cash used by
investing activities
|
|
$
(34.5)
|
|
$
(12.2)
|
Financing
activities:
|
|
|
|
|
Payments on long-term
debt and finance lease obligations
|
|
$
(12.0)
|
|
$
(56.2)
|
Proceeds under
revolving credit facilities
|
|
491.4
|
|
603.0
|
Payments under
revolving credit facilities
|
|
(294.3)
|
|
(684.0)
|
Taxes paid related to
net share settlements of stock-based compensation awards
|
|
(7.2)
|
|
(2.1)
|
Purchases of treasury
stock
|
|
(24.0)
|
|
—
|
Stock option
exercises
|
|
8.4
|
|
1.5
|
Other
|
|
8.5
|
|
4.1
|
Net cash used by
financing activities
|
|
$
170.8
|
|
$
(133.7)
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
$
(8.0)
|
|
$
(7.0)
|
Net decrease in cash
and cash equivalents
|
|
(6.1)
|
|
(245.2)
|
Cash and cash
equivalents at beginning of period
|
|
251.5
|
|
386.6
|
Cash and cash
equivalents at end of period
|
|
$
245.4
|
|
$
141.4
|
|
|
|
|
|
Univar Solutions
Inc.
Reconciliation of
GAAP Net Income to Adjusted Net Income and
Diluted Earnings
per Share to Adjusted Diluted Earnings per Share
(Unaudited)
|
|
|
|
Three months ended
March 31,
|
|
|
2022
|
|
2021
|
(in millions,
except per share data)
|
|
Amount
|
|
per share
(1)(2)
|
|
Amount
|
|
per share
(1)(2)
|
Net income and
diluted EPS
|
|
$
180.8
|
|
$
1.06
|
|
$
66.2
|
|
$
0.39
|
Amortization
|
|
11.8
|
|
0.07
|
|
13.1
|
|
0.08
|
Exchange
loss(3)
|
|
(0.5)
|
|
—
|
|
1.9
|
|
0.01
|
Derivative loss
(gain)(3)
|
|
(5.0)
|
|
(0.03)
|
|
0.4
|
|
—
|
(Gain) loss on sale
of business
|
|
—
|
|
—
|
|
(0.6)
|
|
—
|
Nexeo employee
severance and other facility closure costs(4)
|
|
—
|
|
—
|
|
0.9
|
|
0.01
|
Shared service
employee severance and other facility closure
costs(4)
|
|
—
|
|
—
|
|
0.1
|
|
—
|
Loss on
extinguishment of debt and debt refinancing
costs(3)
|
|
—
|
|
—
|
|
0.2
|
|
—
|
Nexeo acquisition and
integration related expenses(4)
|
|
—
|
|
—
|
|
16.1
|
|
0.09
|
Fair value adjustment
for warrants(3)
|
|
—
|
|
—
|
|
(25.6)
|
|
(0.15)
|
Non-operating
retirement benefits(3)
|
|
(2.6)
|
|
(0.02)
|
|
(6.7)
|
|
(0.04)
|
Multi-employer
pension plan exit liability(3)
|
|
—
|
|
—
|
|
18.4
|
|
0.11
|
Income tax benefit
related to reconciling items(5)
|
|
(0.5)
|
|
—
|
|
(11.3)
|
|
(0.07)
|
Other discrete tax
items(6)
|
|
(0.6)
|
|
(0.01)
|
|
0.5
|
|
—
|
Adjusted net income
and diluted EPS
|
|
$
183.4
|
|
$
1.07
|
|
$
73.6
|
|
$
0.43
|
|
|
|
|
|
|
|
|
|
GAAP diluted common
shares outstanding(2)
|
|
171.3
|
|
|
|
170.1
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Immaterial
differences may exist in the calculation of per share amounts due
to rounding.
|
(2)
|
Diluted and
adjusted diluted earnings per share is calculated using net income
or adjusted net income available to common shareholders divided by
diluted weighted average shares outstanding during each period,
respectively, which includes unvested restricted shares. Diluted
earnings per share considers the impact of potentially dilutive
securities except in periods in which there is a loss because the
inclusion of the potential common shares would have an
anti-dilutive effect. Adjusted earnings per diluted share is based
on the GAAP dilutive share count, except where adjustments to GAAP
net loss result in an adjusted net income position.
|
(3)
|
Reconciling items
represent certain items disclosed on Schedule D included in this
document, excluding stock-based compensation, restructuring
charges, gain on sale of property, plant and equipment, certain
employee severance and facility closure costs and other.
|
(4)
|
For 2021, Nexeo
employee severance and other facility closure costs represent $1.0
million of other employee severance costs and ($0.1 million) of
other facility closure costs related to the Company's 2019 Nexeo
acquisition as disclosed on Schedule D included in this document.
For 2021, shared service employee severance and other facility
closure costs represent $0.1 million of other employee severance
costs related to the Company's shared service relocation as
disclosed on Schedule D included in this document. In 2021, Nexeo
acquisition and integration related expenses represent $16.1
million of acquisition and integration related expenses as
disclosed on Schedule D included in this document.
|
(5)
|
Tax on reconciling
items is calculated as the difference between the tax provisions on
US GAAP pre-tax earnings and Adjusted pre-tax earnings utilizing
the appropriate tax rates and laws of each jurisdiction.
|
(6)
|
Discrete tax items
primarily relate to stock compensation expense in the current year
and the tax law changes in the prior year.
|
Schedule
B
|
Univar Solutions
Inc.
Reconciliation of
GAAP Net Income (Loss) to Adjusted EBITDA
(Unaudited)
|
|
(in
millions)
|
|
Q2'20
|
Q3'20
|
Q4'20
|
|
Q1'21
|
Q2'21
|
Q3'21
|
Q4'21
|
|
Q1'22
|
|
LTM(2)
Q1'21
|
LTM(2)
Q4'21
|
LTM(2)
Q1'22
|
Net income
(loss)
|
|
$
1.8
|
$
28.9
|
$ (33.7)
|
|
$
66.2
|
$ 153.2
|
$
84.4
|
$ 156.8
|
|
$ 180.8
|
|
$
63.2
|
$
460.6
|
$
575.2
|
Depreciation
|
|
40.4
|
41.6
|
39.2
|
|
43.8
|
37.3
|
36.7
|
33.1
|
|
32.9
|
|
$
165.0
|
$
150.9
|
$
140.0
|
Amortization
|
|
14.8
|
14.7
|
14.7
|
|
13.1
|
13.2
|
12.4
|
13.8
|
|
11.8
|
|
$
57.3
|
$
52.5
|
$
51.2
|
Interest expense,
net
|
|
29.9
|
27.7
|
26.7
|
|
26.6
|
25.7
|
22.2
|
22.7
|
|
21.1
|
|
$
110.9
|
$
97.2
|
$
91.7
|
Income tax expense
(benefit)
|
|
11.6
|
2.7
|
(7.9)
|
|
17.6
|
27.0
|
37.7
|
42.3
|
|
64.7
|
|
$
24.0
|
$
124.6
|
$
171.7
|
EBITDA
|
|
$
98.5
|
$
115.6
|
$
39.0
|
|
$
167.3
|
$
256.4
|
$
193.4
|
$
268.7
|
|
$
311.3
|
|
$
420.4
|
$
885.8
|
$
1,029.8
|
Other operating
expenses, net(1)
|
|
24.8
|
20.3
|
13.9
|
|
44.2
|
29.9
|
17.7
|
15.7
|
|
15.7
|
|
$
103.2
|
$
107.5
|
$
79.0
|
Other expense
(income), net(1)
|
|
22.7
|
(1.3)
|
58.2
|
|
(28.7)
|
(3.3)
|
(1.1)
|
(77.3)
|
|
(7.7)
|
|
$
50.9
|
$ (110.4)
|
$
(89.4)
|
Impairment
charges
|
|
16.9
|
20.7
|
2.6
|
|
—
|
2.1
|
0.9
|
—
|
|
—
|
|
$
40.2
|
$
3.0
|
$
3.0
|
(Gain) loss on sale of
business
|
|
—
|
9.3
|
32.7
|
|
(0.6)
|
(87.6)
|
—
|
—
|
|
—
|
|
$
41.4
|
$
(88.2)
|
$
(87.6)
|
Brazil VAT (recovery)
charge
|
|
0.3
|
—
|
—
|
|
—
|
—
|
—
|
—
|
|
—
|
|
$
0.3
|
$
—
|
$
—
|
Adjusted
EBITDA
|
|
$
163.2
|
$
164.6
|
$
146.4
|
|
$
182.2
|
$
197.5
|
$
210.9
|
$
207.1
|
|
$
319.3
|
|
$
656.4
|
$
797.7
|
$
934.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Refer to Schedule D
for more information for the three months ended March 31, 2022
and 2021.
|
(2)
|
Last Twelve Month
(LTM) Adjusted EBITDA is a component used in the calculation of the
Company's leverage ratio as of a particular period end.
|
Schedule
C
|
Univar Solutions
Inc.
Segment Adjusted
EBITDA and
Gross Profit
(exclusive of depreciation)
(Unaudited)
|
|
|
|
USA
|
|
EMEA
|
|
Canada
|
|
LATAM
|
|
Other/
Eliminations(1)
|
|
Consolidated
|
(in
millions)
|
|
Three months ended
March 31, 2022
|
External
customers
|
|
$
1,843.2
|
|
$
562.2
|
|
$
293.4
|
|
$
183.8
|
|
$
—
|
|
$
2,882.6
|
Inter-segment
|
|
28.5
|
|
0.7
|
|
1.8
|
|
—
|
|
(31.0)
|
|
—
|
Total net
sales
|
|
$
1,871.7
|
|
$
562.9
|
|
$
295.2
|
|
$
183.8
|
|
$
(31.0)
|
|
$
2,882.6
|
Cost of goods sold
(exclusive of depreciation)
|
|
$
1,398.8
|
|
$
421.3
|
|
$
220.7
|
|
$
143.3
|
|
$
(31.0)
|
|
$
2,153.1
|
Outbound freight and
handling
|
|
85.8
|
|
17.0
|
|
9.9
|
|
3.2
|
|
—
|
|
115.9
|
Warehousing, selling
and administrative
|
|
177.9
|
|
60.8
|
|
27.9
|
|
21.1
|
|
6.6
|
|
294.3
|
Adjusted
EBITDA
|
|
$
209.2
|
|
$
63.8
|
|
$
36.7
|
|
$
16.2
|
|
$
(6.6)
|
|
$
319.3
|
|
|
|
USA
|
|
EMEA
|
|
Canada
|
|
LATAM
|
|
Other/
Eliminations(1)
|
|
Consolidated
|
(in
millions)
|
|
Three months ended
March 31, 2022
|
Net sales
|
|
$
1,871.7
|
|
$
562.9
|
|
$
295.2
|
|
$
183.8
|
|
$
(31.0)
|
|
$
2,882.6
|
Cost of goods sold
(exclusive of depreciation)
|
|
1,398.8
|
|
421.3
|
|
220.7
|
|
143.3
|
|
(31.0)
|
|
2,153.1
|
Gross profit
(exclusive of depreciation)
|
|
$
472.9
|
|
$
141.6
|
|
$
74.5
|
|
$
40.5
|
|
$
—
|
|
$
729.5
|
|
|
|
USA
|
|
EMEA
|
|
Canada
|
|
LATAM
|
|
Other/
Eliminations(1)
|
|
Consolidated
|
(in
millions)
|
|
Three months ended
March 31, 2021
|
External
customers
|
|
$
1,293.0
|
|
$
505.9
|
|
$
222.7
|
|
$
133.8
|
|
$
—
|
|
$
2,155.4
|
Inter-segment
|
|
17.4
|
|
0.8
|
|
0.7
|
|
—
|
|
(18.9)
|
|
—
|
Total net
sales
|
|
$
1,310.4
|
|
$
506.7
|
|
$
223.4
|
|
$
133.8
|
|
$
(18.9)
|
|
$
2,155.4
|
Cost of goods sold
(exclusive of depreciation)
|
|
$
984.7
|
|
$
378.5
|
|
$
167.1
|
|
$
101.6
|
|
$
(18.9)
|
|
$
1,613.0
|
Outbound freight and
handling
|
|
63.3
|
|
15.9
|
|
9.2
|
|
3.0
|
|
—
|
|
91.4
|
Warehousing, selling
and administrative
|
|
160.6
|
|
61.7
|
|
20.8
|
|
13.6
|
|
12.1
|
|
268.8
|
Adjusted
EBITDA
|
|
$
101.8
|
|
$
50.6
|
|
$
26.3
|
|
$
15.6
|
|
$
(12.1)
|
|
$
182.2
|
|
|
|
USA
|
|
EMEA
|
|
Canada
|
|
LATAM
|
|
Other/
Eliminations(1)
|
|
Consolidated
|
(in
millions)
|
|
Three months ended
March 31, 2021
|
Net sales
|
|
$
1,310.4
|
|
$
506.7
|
|
$
223.4
|
|
$
133.8
|
|
$
(18.9)
|
|
$
2,155.4
|
Cost of goods sold
(exclusive of depreciation)
|
|
984.7
|
|
378.5
|
|
167.1
|
|
101.6
|
|
(18.9)
|
|
1,613.0
|
Gross profit
(exclusive of depreciation)
|
|
$
325.7
|
|
$
128.2
|
|
$
56.3
|
|
$
32.2
|
|
$
—
|
|
$
542.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Other/Eliminations
represents the elimination of intersegment transactions as well as
unallocated corporate costs consisting of costs specifically
related to parent company operations that do not directly benefit
segments, either individually or collectively.
|
Schedule
D
|
Univar Solutions
Inc.
Detail of Other
operating expenses, net and
Other income,
net
(Unaudited)
|
|
Other operating
expenses, net
|
|
|
Three months ended
March 31,
|
(in
millions)
|
|
2022
|
|
2021
|
Acquisition and
integration related expenses
|
|
$
—
|
|
$
16.4
|
Stock-based
compensation expense
|
|
13.9
|
|
5.9
|
Other employee
severance costs
|
|
—
|
|
2.9
|
Multi-employer pension
plan exit liability
|
|
—
|
|
18.4
|
Gain on sale of
property, plant and equipment
|
|
(0.9)
|
|
(1.1)
|
Other
|
|
2.7
|
|
1.7
|
Total other operating
expenses, net
|
|
$
15.7
|
|
$
44.2
|
|
Other income,
net
|
|
|
Three months ended
March 31,
|
(in
millions)
|
|
2022
|
|
2021
|
Foreign currency
transactions
|
|
$
4.3
|
|
$
(1.8)
|
Foreign currency
denominated loans revaluation
|
|
(3.8)
|
|
(0.1)
|
Undesignated foreign
currency derivative instruments
|
|
0.9
|
|
(1.7)
|
Undesignated interest
rate and cross currency swap contracts
|
|
4.1
|
|
1.3
|
Non-operating
retirement benefits
|
|
2.6
|
|
6.7
|
Fair value adjustment
for warrants
|
|
—
|
|
25.6
|
Other
|
|
(0.4)
|
|
(1.3)
|
Total other income,
net
|
|
$
7.7
|
|
$
28.7
|
Schedule
E
|
Univar Solutions
Inc.
Reconciliation of
GAAP Debt to Net Debt
(Unaudited)
|
|
|
|
March
31,
|
|
December
|
(in
millions)
|
|
2022
|
|
2021
|
|
2021
|
Total short-term and
long-term debt
|
|
$
2,457.3
|
|
$
2,510.7
|
|
$
2,265.0
|
Add: Short-term
financing
|
|
10.0
|
|
4.5
|
|
—
|
Less: Cash and cash
equivalents
|
|
(245.4)
|
|
(141.4)
|
|
(251.5)
|
Total net
debt
|
|
$
2,221.9
|
|
$
2,373.8
|
|
$
2,013.5
|
|
|
|
|
|
|
|
LTM Adjusted
EBITDA(1)(2)
|
|
$
939.8
|
|
$
656.4
|
|
$
799.7
|
|
|
|
|
|
|
|
Leverage ratio (Total
net debt/LTM Adjusted EBITDA)
|
|
2.4 x
|
|
3.6 x
|
|
2.5 x
|
|
|
|
|
|
|
|
(1)
|
LTM Adjusted EBITDA,
as defined by the Company's credit agreements, includes adjustments
for acquisitions and divestitures and excludes the impact of
synergies not yet realized. For December 31, 2021, LTM Adjusted
EBITDA excludes three months of Adjusted EBITDA of $5 million,
related to the Distrupol business divestiture on April 1, 2021. For
March 31, 2022 and December 31, 2021, LTM Adjusted EBITDA includes
eight and eleven months of Adjusted EBITDA of $5 million and $7
million, respectively, related to the Sweetmix acquisition on
December 1, 2021.
|
(2)
|
Refer to
Schedule B for more information on LTM Adjusted EBITDA before the
adjustments discussed in the note above.
|
Schedule
F
|
Univar Solutions
Inc.
Reconciliation of
GAAP Net Income to Adjusted EBITDA Guidance
(Unaudited)
|
|
|
|
|
|
Year ended
December 31, 2021
|
|
Guidance
|
|
|
|
|
|
Q2
2022
|
|
Full year
2022
|
(in
millions)
|
|
Q1
2022
|
|
|
Low
|
|
High
|
|
Low
|
|
High
|
Net
income(1)
|
|
$
180.8
|
|
$
460.6
|
|
$
140
|
|
$
167
|
|
$
510
|
|
$
572
|
Depreciation(1)
|
|
32.9
|
|
150.9
|
|
35
|
|
33
|
|
140
|
|
130
|
Amortization
(1)
|
|
11.8
|
|
52.5
|
|
12
|
|
11
|
|
47
|
|
43
|
Interest expense,
net(1)
|
|
21.1
|
|
97.2
|
|
25
|
|
23
|
|
100
|
|
90
|
Income tax
expense(1)
|
|
64.7
|
|
124.6
|
|
51
|
|
59
|
|
183
|
|
205
|
Other operating
expenses, net(1)
|
|
15.7
|
|
107.5
|
|
10
|
|
—
|
|
30
|
|
20
|
Other income,
net(1)
|
|
(7.7)
|
|
(110.4)
|
|
(3)
|
|
(3)
|
|
(10)
|
|
(10)
|
Gain on sale of
business(1)
|
|
—
|
|
(88.2)
|
|
—
|
|
—
|
|
—
|
|
—
|
Impairment
charges(1)
|
|
—
|
|
3.0
|
|
—
|
|
—
|
|
—
|
|
—
|
Adjusted
EBITDA
|
|
$
319.3
|
|
$
797.7
|
|
$
270
|
|
$
290
|
|
$
1,000
|
|
$
1,050
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Adjusted EBITDA
excludes from forecasted net income the impact of gains and losses
of foreign currency and on divestitures, refinancing costs,
potential impairments, discrete tax items and other unusual or
nonrecurring items that might materially impact GAAP net income. We
have not provided a further reconciliation of Adjusted EBITDA to
GAAP net income as such reconciliation is not available without
unreasonable efforts because the additional components in deriving
Adjusted EBITDA are evaluated on an ongoing basis, can be highly
variable and cannot reasonably be predicted. In addition,
forecasted net income presented within this reconciliation is
provided for informational purposes only and should not be viewed
as guidance, as reported GAAP net income may differ materially from
forecasted net income due to the impact of the items of the type
identified above.
|
Schedule
G
|
Univar Solutions
Inc.
Reconciliation of
GAAP Cash Flow from Operations to Net Free Cash Flow
(Unaudited)
|
|
|
|
Year ended
December 31, 2021
|
|
Guidance
Full Year
2022
|
|
|
|
(in
millions)
|
|
|
Low
|
|
High
|
Net cash provided by
operating activities(1)
|
|
$
290.3
|
|
$
540
|
|
$
580
|
Capital
expenditures(1)(2)
|
|
(110.9)
|
|
(140)
|
|
(130)
|
Net free cash
flow
|
|
$
179.4
|
|
$
400
|
|
$
450
|
|
|
|
|
|
|
|
Net cash provided
(used) by investing activities(1)
|
|
$
23.6
|
|
$
(140)
|
|
$
(130)
|
Net cash used by
financing activities(1)(3)
|
|
$
(424.6)
|
|
$
(30)
|
|
$
(30)
|
|
|
|
|
|
|
|
(1)
|
The forecasted net
cash provided by operating and investing activities and used by
financing activities presented within this reconciliation excludes
certain unusual or infrequent items, such as refinancing costs,
potential impairments, discrete tax items and other unusual or
nonrecurring items, impacting GAAP financial metrics. While the
Company expects that these unusual or infrequent items may occur in
future periods, it is not possible to estimate the amount or
significance of these unusual or infrequent items without
unreasonable efforts because these items are evaluated on an
ongoing basis, can be highly variable and cannot reasonably be
predicted. As such, we have included above the impact of only those
items about which we are aware, can be reasonable predicted and are
reasonably likely to occur during the guidance period covered.
These financial measures are included within this reconciliation
for informational purposes only and should not be viewed as
guidance, as reported GAAP measures may differ materially from such
forecasted amounts due to the impact of the items of the type
identified above.
|
(2)
|
Excludes additions
from finance leases.
|
(3)
|
Excludes potential
share repurchases in FY2022.
|
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SOURCE Univar Solutions Inc.