CHARLOTTE, N.C., Aug. 2, 2023
/PRNewswire/ -- Albemarle Corporation (NYSE: ALB), a global leader
in providing essential elements for mobility, energy, connectivity
and health, today announced its results for the second quarter
ended June 30, 2023.
Second-Quarter 2023 and Recent
Highlights
(Unless otherwise stated, all percentage
changes represent year-over-year comparisons)
- Net sales of $2.4 billion, an
increase of 60%
- Net income of $650.0 million, or
$5.52 per diluted share, an increase
of 60%
- Adjusted diluted EPS of $7.33, an
increase of 112%
- Adjusted EBITDA of $1.0 billion,
an increase of 69%
- Established strategic agreement with Ford Motor Company to
supply over 100,000 metric tons of lithium hydroxide from 2026 to
2030
- Agreed to amend the terms of the transaction signed earlier
this year with Mineral Resources Ltd. ("MinRes") to significantly
simplify operations and retain full control of downstream
conversion assets
- Achieved IRMA 50 performance rating in the Salar de Atacama,
becoming first lithium producer to complete independent audit and
publish Initiative for Responsible Mining Assurance ("IRMA")
report
- Published 2022 Sustainability Report, highlighting progress on
diversity and environmental goals, including a new air quality goal
to reduce 90% of sulfur oxide emissions by 2027
- Named to Fortune 500 rankings and TIME100 Most Influential
Companies list
- Improved 2023 Energy Storage guidance reflecting recent lithium
market prices; Albemarle's 2023
net sales are now expected to increase approximately 40% to 55%
year-over-year and 2023 adjusted EBITDA is expected to increase 10%
to 25% year-over-year
"We achieved $2.4 billion in net
sales, up 60% from prior year, primarily driven by higher prices
and volumes in our Energy Storage business," commented Albemarle
CEO Kent Masters. "We remain
confident in the long-term outlook for our businesses and are
increasing our full-year 2023 net sales and adjusted EBITDA outlook
based on the recent increase in lithium market prices. Our
investments in future capacity are on track, with the Salar Yield
Improvement Project mechanically complete and the Meishan project
on schedule for early 2024 mechanical completion."
2023 Corporate Outlook
The company is updating
its full-year 2023 outlook to reflect recent lithium market prices.
Net sales are expected to increase 40% to 55% over the prior year,
primarily driven by the continued global shift to electric
vehicles. The year-over-year increase in Adjusted EBITDA is
expected to be in the range of 10% to 25%, primarily due to higher
Energy Storage pricing. Net cash from operations is expected to be
in the range of $1.2 billion to
$1.8 billion for the full year 2023,
below previous outlook primarily driven by changes in working
capital related to timing of Energy Storage shipments and
agreements in principle to resolve the previously disclosed matter
("DOJ Matter") with the U.S. Department of Justice ("DOJ") and the
Securities Exchange Commission ("SEC"). The company's capital
expenditures are expected to be between $1.9
billion and $2.1 billion for
2023, above previous outlook due to the retention of full ownership
in lithium processing assets under the amended agreements with
MinRes.
|
FY 2023
Guidance
as of May 3,
2023
|
|
FY 2023
Guidance
as of August 2,
2023
|
Net sales
|
$9.8 - $11.5
billion
|
|
$10.4 - $11.5
billion
|
Adjusted
EBITDA(a)
|
$3.3 - $4.0
billion
|
|
$3.8 - $4.4
billion
|
Adjusted EBITDA
Margin(a)
|
34% - 35%
|
|
37% - 38%
|
Adjusted Diluted
EPS(a)
|
$20.75 -
$25.75
|
|
$25.00 -
$29.50
|
Net Cash from
Operations
|
$1.7 - $2.3
billion
|
|
$1.2 - $1.8
billion
|
Capital
Expenditures
|
$1.7 - $1.9
billion
|
|
$1.9 - $2.1
billion
|
|
|
(a)
|
The company does not
provide a reconciliation of forward-looking non-GAAP financial
measures to the most directly comparable financial measures
calculated and reported in accordance with GAAP, as the company is
unable to estimate significant non-recurring or unusual items
without unreasonable effort. See "Additional Information
regarding Non-GAAP Measures" for more information.
|
Second Quarter 2023 Results
In millions, except
per share amounts
|
Q2
2023
|
|
Q2
2022
|
|
$
Change
|
|
%
Change
|
Net sales
|
$
2,370.2
|
|
$
1,479.6
|
|
$
890.6
|
|
60.2 %
|
Net income attributable
to Albemarle Corporation
|
$
650.0
|
|
$
406.8
|
|
$
243.3
|
|
59.8 %
|
Adjusted
EBITDA(a)
|
$
1,032.3
|
|
$
610.2
|
|
$
422.1
|
|
69.2 %
|
Diluted earnings per
share
|
$
5.52
|
|
$
3.46
|
|
$
2.06
|
|
59.5 %
|
Non-operating pension and OPEB items(a)
|
—
|
|
(0.03)
|
|
|
|
|
Non-recurring and other unusual items(a)
|
1.81
|
|
0.02
|
|
|
|
|
Adjusted diluted
earnings per share(a)(b)
|
$
7.33
|
|
$
3.45
|
|
$
3.88
|
|
112.5 %
|
|
|
(a)
|
See Non-GAAP
Reconciliations for further details.
|
(b)
|
Totals may not add due
to rounding.
|
Net sales for the second quarter of 2023 were $2.4 billion compared to $1.5 billion for the prior-year quarter. The 60%
increase was driven by increased prices from the Energy Storage and
Ketjen businesses. Net income attributable to Albemarle of $650.0
million increased by $243.3
million from the prior-year quarter due to favorable prices
and higher sales volume in Energy Storage partially offset by lower
sales volume in Specialties. Adjusted EBITDA of $1.0 billion increased by $422.1 million from the prior-year quarter
primarily due to higher net sales.
The effective income tax rate for the second quarter of 2023 was
25.5% compared to 22.2% in the same period of 2022. On an adjusted
basis, the effective income tax rates were 13.0% and 26.3% for the
second quarter of 2023 and 2022, respectively, with the decrease
primarily due to changes in the geographic income mix.
Adjusted diluted EPS of $7.33 and
adjusted EBITDA of $1.0 billion do
not reflect an accrual of $218.5
million related to the previously disclosed DOJ Matter.
Business Segment Results
Beginning January 1, 2023, the company re-segmented its
operating segments. The results from 2022 are recast to align with
the new structure.
Energy Storage Results
In
millions
|
Q2
2023
|
|
Q2
2022
|
|
$
Change
|
|
%
Change
|
Net Sales
|
$
1,763.1
|
|
$
802.4
|
|
$
960.7
|
|
119.7 %
|
Adjusted
EBITDA
|
$
932.0
|
|
$
483.5
|
|
$
448.5
|
|
92.8 %
|
Energy Storage net sales for the second quarter of 2023 were
$1.8 billion, an increase of
$1.0 billion (+120%) due to higher
prices reflecting tight market conditions, primarily in battery-
and tech-grade carbonate and hydroxide. Volume was also higher
(+36%) related to the La Negra III/IV expansion in Chile, production from our processing plant in
Qinzhou, China, and higher tolling
volumes to meet growing customer demand. Adjusted EBITDA of
$932.0 million increased $448.5 million due to higher prices and
volumes.
2023 Energy Storage Outlook
Energy Storage net sales
for the full year are estimated to range between $7.9 billion and $8.8
billion, above previous outlook primarily due to higher
lithium market index pricing. Energy Storage volumes are projected
to be at the higher end of the previous range of 30% to 40% in 2023
compared to 2022. Full year realized pricing is expected to be at
the higher end of the previous range of 20% to 30% compared to the
prior year, assuming recent lithium market prices continue through
2023. Adjusted EBITDA is anticipated to range between $3.5 billion and $3.9
billion, above previous outlook as higher net sales more
than offset timing impacts of higher priced spodumene
inventories.
In July, Albemarle announced an
agreement to amend and simplify commercial arrangements reached
with MinRes in February 2023. Under
the revised agreements, Albemarle
is expected to take full ownership of the Kemerton lithium
processing facility and 50% ownership of the Wodgina spodumene mine
in Australia and retain full
ownership of the Qinzhou and Meishan lithium processing facilities
in China. Transfer of 10% interest
in Wodgina is exchanged for 25% interest in Kemerton. Upon closing,
Albemarle expects to pay MinRes
$380 million to $400 million of which about half relates to net
consideration for the remaining 15% ownership of Kemerton and about
half relates to settlement adjustments for effective economic date
of April 1, 2022, and other
transaction costs. Closing is anticipated later in 2023, pending
Australian regulatory approvals.
Albemarle continues to expand
its global portfolio of conversion capacity and improve utilization
of its world-class resource portfolio with several notable
developments in the second quarter. In Chile, the Salar Yield Improvement Project
achieved mechanical completion and has moved into the commissioning
phase. In Australia, Kemerton I is
operating and producing battery-grade product subject to customer
qualification. Kemerton III & IV projects have been gated into
execution. In China, the
construction of Meishan is progressing on-budget and ahead of
schedule with mechanical completion expected in early
2024.
Specialties Results
In
millions
|
Q2
2023
|
|
Q2
2022
|
|
$
Change
|
|
%
Change
|
Net Sales
|
$
371.3
|
|
$
466.9
|
|
$
(95.6)
|
|
(20.5) %
|
Adjusted
EBITDA
|
$
60.2
|
|
$
147.4
|
|
$
(87.2)
|
|
(59.2) %
|
Specialties net sales for the second quarter of 2023 were
$371.3 million, a decrease of
$95.6 million (-20%) primarily due to
lower volumes (-15%) and lower prices (-5%). Adjusted EBITDA
of $60.2 million decreased
$87.2 million. Both volumes and
prices were impacted by weaker demand, particularly for consumer
electronics.
2023 Specialties Outlook
Albemarle is updating its 2023 outlook for
Specialties net sales to range between $1.5
billion and $1.6 billion, with
adjusted EBITDA estimated from $385
million to $440 million.
Adjusted EBITDA 2023 margins are expected to be down year-over-year
primarily due to continued weakness in certain end-use markets
including consumer and industrial electronics and
elastomers partially offset by strong demand in other
end-markets, such as pharmaceuticals, agriculture and oilfield
services.
Ketjen Results
In
millions
|
Q2
2023
|
|
Q2
2022
|
|
$
Change
|
|
%
Change
|
Net Sales
|
$
235.8
|
|
$
210.3
|
|
$
25.5
|
|
12.1 %
|
Adjusted
EBITDA
|
$
42.9
|
|
$
9.8
|
|
$
33.1
|
|
337.9 %
|
Ketjen net sales of $235.8 million
for the second quarter of 2023 were up 12% compared to the previous
year due to higher prices, primarily from fluid catalytic cracking
and clean fuel technologies. Adjusted EBITDA of $42.9 million increased $33.1 million largely due to an insurance claim
receipt.
In June, Albemarle announced
the appointment of Michael J.
Simmons as president of Ketjen, a wholly owned
subsidiary.
2023 Ketjen Outlook
Albemarle reaffirmed Ketjen net
sales of $1.0 billion to $1.1 billion, and increased adjusted EBITDA from
$120 million to $150 million for 2023. Adjusted EBITDA guidance
increased primarily due to an insurance settlement.
Cash Flow and Capital Deployment
Cash from operations
of $794.7 million increased
$734.4 million versus the prior year
period. This was driven by increased adjusted EBITDA and dividends
received from equity investments, partially offset by working
capital changes that were primarily due to the increase in
receivables and inventories from higher lithium prices. Capital
expenditures of $919.3 million
increased by $416.7 million versus
the prior-year period as the company invested in Energy Storage and
Specialties capacity to support growth.
Albemarle's primary capital
allocation priorities are to invest in organic and inorganic
opportunities to drive profitable growth, maintain its financial
flexibility and investment grade credit rating, and fund its
dividends.
Balance Sheet and Liquidity
As of June 30, 2023,
Albemarle had estimated liquidity
of approximately $3.3 billion,
including $1.6 billion of cash and
equivalents, the full $1.5 billion
under its revolver and $207.4 million
available under other credit lines. Total debt was $3.5 billion, representing our debt covenant net
debt to adjusted EBITDA of approximately 0.4 times.
Earnings Call
Date:
|
Thursday, August 3,
2023
|
Time:
|
9:00 AM Eastern
time
|
Dial-in
(U.S.):
|
1.888.550.9911
|
Dial-in
(International):
|
1.646.960.0798
|
Passcode:
|
7739681
|
The company's earnings presentation and supporting material are
available on Albemarle's website
at https://investors.albemarle.com.
About Albemarle
Albemarle Corporation (NYSE:
ALB) leads the world in transforming essential resources into
critical ingredients for mobility, energy, connectivity, and
health. We partner to pioneer new ways to move, power, connect and
protect with people and planet in mind. A reliable and high-quality
global supply of lithium and bromine allow us to deliver advanced
solutions for our customers. Learn more about how the people of
Albemarle are enabling a more
resilient world at albemarle.com and on Twitter @AlbemarleCorp.
Albemarle regularly posts
information to www.albemarle.com, including notification of events,
news, financial performance, investor presentations and webcasts,
non-GAAP reconciliations, Securities and Exchange Commission
("SEC") filings and other information regarding the company, its
businesses and the markets it serves.
Forward-Looking Statements
This press release contains
statements concerning our expectations, anticipations and beliefs
regarding the future, which constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995. These forward-looking statements, which are based on
assumptions that we have made as of the date hereof and are subject
to known and unknown risks and uncertainties, often contain words
such as "anticipate," "believe," "estimate," "expect," "guidance,"
"intend," "may," "outlook," "should," "would," and "will".
Forward-looking statements may include statements regarding
expected: financial and operating results, production capacity,
volumes, and prices, demand for Albemarle's products, capital projects,
acquisition and divestiture transactions, market and economic
trends, and all other information relating to matters that are not
historical facts. Factors that could cause Albemarle's actual results to differ
materially from the outlook expressed or implied in any
forward-looking statement include: changes in economic and business
conditions; financial and operating performance of customers;
timing and magnitude of customer orders; fluctuations in lithium
market prices; production volume shortfalls; increased competition;
changes in product demand; availability and cost of raw materials
and energy; technological change and development; fluctuations in
foreign currencies; changes in laws and government regulation;
regulatory actions, proceedings, claims or litigation;
cyber-security breaches, terrorist attacks, industrial accidents or
natural disasters; political unrest; changes in inflation or
interest rates; volatility in the debt and equity markets;
acquisition and divestiture transactions; timing and success of
projects; performance of Albemarle's partners in joint ventures and
other projects; changes in credit ratings; and the other factors
detailed from time to time in the reports Albemarle files with the SEC, including those
described under "Risk Factors" in Albemarle's most recent Annual Report on Form
10-K and any subsequently filed Quarterly Reports on Form 10-Q,
which are filed with the SEC and available on the investor section
of Albemarle's website
(investors.albemarle.com) and on the SEC's website at www.sec.gov.
These forward-looking statements speak only as of the date of this
press release. Albemarle assumes
no obligation to provide any revisions to any forward-looking
statements should circumstances change, except as otherwise
required by securities and other applicable laws.
Albemarle Corporation
and Subsidiaries
Consolidated Statements
of Income
(In Thousands Except
Per Share Amounts) (Unaudited)
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net
sales
|
$ 2,370,190
|
|
$ 1,479,593
|
|
$ 4,950,442
|
|
$ 2,607,321
|
Cost of goods
sold
|
1,811,703
|
|
899,169
|
|
3,115,415
|
|
1,577,867
|
Gross
profit
|
558,487
|
|
580,424
|
|
1,835,027
|
|
1,029,454
|
Selling, general and
administrative expenses
|
397,070
|
|
128,942
|
|
551,376
|
|
241,510
|
Research and
development expenses
|
21,419
|
|
17,386
|
|
41,890
|
|
33,469
|
Loss on sale of
interest in properties
|
—
|
|
—
|
|
—
|
|
8,400
|
Operating
profit
|
139,998
|
|
434,096
|
|
1,241,761
|
|
746,075
|
Interest and financing
expenses
|
(25,577)
|
|
(41,409)
|
|
(52,354)
|
|
(69,243)
|
Other income,
net
|
53,954
|
|
8,767
|
|
136,446
|
|
24,263
|
Income before income
taxes and equity in net income of unconsolidated
investments
|
168,375
|
|
401,454
|
|
1,325,853
|
|
701,095
|
Income tax
expense
|
42,987
|
|
89,018
|
|
319,950
|
|
169,548
|
Income before equity in
net income of unconsolidated investments
|
125,388
|
|
312,436
|
|
1,005,903
|
|
531,547
|
Equity in net income of
unconsolidated investments (net of tax)
|
551,051
|
|
128,156
|
|
947,239
|
|
190,592
|
Net income
|
676,439
|
|
440,592
|
|
1,953,142
|
|
722,139
|
Net income attributable
to noncontrolling interests
|
(26,396)
|
|
(33,819)
|
|
(64,519)
|
|
(61,983)
|
Net income attributable
to Albemarle Corporation
|
$
650,043
|
|
$
406,773
|
|
$ 1,888,623
|
|
$
660,156
|
Basic earnings per
share
|
$
5.54
|
|
$
3.47
|
|
$
16.10
|
|
$
5.64
|
Diluted earnings per
share
|
$
5.52
|
|
$
3.46
|
|
$
16.03
|
|
$
5.61
|
|
|
|
|
|
|
|
|
Weighted-average common
shares outstanding – basic
|
117,332
|
|
117,116
|
|
117,282
|
|
117,091
|
Weighted-average common
shares outstanding – diluted
|
117,769
|
|
117,724
|
|
117,805
|
|
117,689
|
Albemarle Corporation
and Subsidiaries
Condensed Consolidated
Balance Sheets
(In Thousands)
(Unaudited)
|
|
|
|
|
|
|
|
|
June
30,
|
|
December
31,
|
|
2023
|
|
2022
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
1,599,738
|
|
$
1,499,142
|
Trade accounts
receivable
|
1,344,278
|
|
1,190,970
|
Other accounts
receivable
|
426,780
|
|
185,819
|
Inventories
|
3,658,623
|
|
2,076,031
|
Other current
assets
|
425,358
|
|
234,955
|
Total current
assets
|
7,454,777
|
|
5,186,917
|
Property, plant and
equipment
|
10,396,965
|
|
9,354,330
|
Less accumulated
depreciation and amortization
|
2,542,424
|
|
2,391,333
|
Net property,
plant and equipment
|
7,854,541
|
|
6,962,997
|
Investments
|
1,621,424
|
|
1,150,553
|
Other assets
|
269,694
|
|
250,558
|
Goodwill
|
1,634,823
|
|
1,617,627
|
Other intangibles, net
of amortization
|
274,409
|
|
287,870
|
Total
assets
|
$ 19,109,668
|
|
$ 15,456,522
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable to
third parties
|
$
1,960,068
|
|
$
1,533,624
|
Accounts payable to
related parties
|
1,092,398
|
|
518,377
|
Accrued
expenses
|
672,807
|
|
505,894
|
Current portion of
long-term debt
|
6,247
|
|
2,128
|
Dividends
payable
|
46,654
|
|
46,116
|
Income taxes
payable
|
513,339
|
|
134,876
|
Total current
liabilities
|
4,291,513
|
|
2,741,015
|
Long-term
debt
|
3,509,289
|
|
3,214,972
|
Postretirement
benefits
|
32,792
|
|
32,751
|
Pension
benefits
|
159,131
|
|
159,571
|
Other noncurrent
liabilities
|
700,825
|
|
636,596
|
Deferred income
taxes
|
328,078
|
|
480,770
|
Commitments and
contingencies
|
|
|
|
Equity:
|
|
|
|
Albemarle Corporation
shareholders' equity:
|
|
|
|
Common
stock
|
1,174
|
|
1,172
|
Additional paid-in
capital
|
2,936,036
|
|
2,940,840
|
Accumulated other
comprehensive loss
|
(517,946)
|
|
(560,662)
|
Retained
earnings
|
7,396,045
|
|
5,601,277
|
Total Albemarle
Corporation shareholders' equity
|
9,815,309
|
|
7,982,627
|
Noncontrolling
interests
|
272,731
|
|
208,220
|
Total
equity
|
10,088,040
|
|
8,190,847
|
Total liabilities and
equity
|
$ 19,109,668
|
|
$ 15,456,522
|
Albemarle Corporation
and Subsidiaries
Selected Consolidated
Cash Flow Data
(In Thousands)
(Unaudited)
|
|
|
|
|
Six Months
Ended
June
30,
|
|
2023
|
|
2022
|
Cash and cash
equivalents at beginning of year
|
$
1,499,142
|
|
$ 439,272
|
Cash flows from
operating activities:
|
|
|
|
Net income
|
1,953,142
|
|
722,139
|
Adjustments to
reconcile net income to cash flows from operating
activities:
|
|
|
|
Depreciation and
amortization
|
180,356
|
|
137,567
|
Loss on sale of
interest in properties
|
—
|
|
8,400
|
Stock-based
compensation and other
|
20,017
|
|
15,232
|
Equity in net income
of unconsolidated investments (net of tax)
|
(947,239)
|
|
(190,592)
|
Dividends received
from unconsolidated investments and nonmarketable
securities
|
1,079,439
|
|
156,964
|
Pension and
postretirement benefit
|
3,933
|
|
(8,273)
|
Pension and
postretirement contributions
|
(8,632)
|
|
(7,685)
|
Unrealized (gain) loss
on investments in marketable securities
|
(61,434)
|
|
3,061
|
Loss on early
extinguishment of debt
|
—
|
|
19,219
|
Deferred income
taxes
|
(144,720)
|
|
39,476
|
Working capital
changes
|
(1,155,408)
|
|
(888,036)
|
Non-cash transfer of
40% value of construction in progress of Kemerton plant to
MRL
|
11,623
|
|
96,314
|
Other, net
|
(136,390)
|
|
(43,475)
|
Net cash provided by
operating activities
|
794,687
|
|
60,311
|
Cash flows from
investing activities:
|
|
|
|
Acquisitions, net of
cash acquired
|
(8,240)
|
|
—
|
Capital
expenditures
|
(919,295)
|
|
(502,607)
|
(Purchases) sales of
marketable securities, net
|
(123,979)
|
|
3,402
|
Investments in equity
and other corporate investments
|
(1,192)
|
|
(767)
|
Net cash used in
investing activities
|
(1,052,706)
|
|
(499,972)
|
Cash flows from
financing activities:
|
|
|
|
Repayments of
long-term debt and credit agreements
|
—
|
|
(455,000)
|
Proceeds from
borrowings of long-term debt and credit agreements
|
300,000
|
|
1,964,216
|
Other debt repayments,
net
|
(1,500)
|
|
(390,601)
|
Fees related to early
extinguishment of debt
|
—
|
|
(9,767)
|
Dividends paid to
shareholders
|
(93,317)
|
|
(91,894)
|
Dividends paid to
noncontrolling interests
|
(53,145)
|
|
(26,525)
|
Proceeds from exercise
of stock options
|
81
|
|
855
|
Withholding taxes paid
on stock-based compensation award distributions
|
(24,910)
|
|
(10,583)
|
Other
|
—
|
|
(4,172)
|
Net cash provided by
financing activities
|
127,209
|
|
976,529
|
Net effect of foreign
exchange on cash and cash equivalents
|
231,406
|
|
(45,544)
|
Increase in cash and
cash equivalents
|
100,596
|
|
491,324
|
Cash and cash
equivalents at end of period
|
$
1,599,738
|
|
$ 930,596
|
Albemarle Corporation
and Subsidiaries
Consolidated Summary of
Segment Results
(In Thousands)
(Unaudited)
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net
sales:
|
|
|
|
|
|
|
|
Energy
Storage
|
$ 1,763,065
|
|
$
802,393
|
|
$ 3,706,747
|
|
$ 1,266,097
|
Specialties
|
371,302
|
|
466,875
|
|
790,080
|
|
913,022
|
Ketjen
|
235,823
|
|
210,325
|
|
453,615
|
|
428,202
|
Total net
sales
|
$ 2,370,190
|
|
$ 1,479,593
|
|
$ 4,950,442
|
|
$ 2,607,321
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA:
|
|
|
|
|
|
|
|
Energy
Storage
|
$
932,023
|
|
$
483,517
|
|
$ 2,338,204
|
|
$
768,764
|
Specialties
|
60,200
|
|
147,374
|
|
222,358
|
|
299,976
|
Ketjen
|
42,882
|
|
9,792
|
|
57,425
|
|
26,702
|
Total segment adjusted
EBITDA
|
1,035,105
|
|
640,683
|
|
2,617,987
|
|
1,095,442
|
Corporate
|
(2,839)
|
|
(30,474)
|
|
9,998
|
|
(53,303)
|
Total adjusted
EBITDA
|
$ 1,032,266
|
|
$
610,209
|
|
$ 2,627,985
|
|
$ 1,042,139
|
See accompanying non-GAAP reconciliations below.
Additional Information regarding Non-GAAP Measures
It should be noted that adjusted net income attributable to
Albemarle Corporation, adjusted diluted earnings per share,
non-operating pension and other post-employment benefit ("OPEB")
items per diluted share, non-recurring and other unusual items per
diluted share, adjusted effective income tax rates, EBITDA,
adjusted EBITDA (on a consolidated basis), EBITDA margin and
adjusted EBITDA margin are financial measures that are not required
by, or presented in accordance with, accounting principles
generally accepted in the United
States, or GAAP. These non-GAAP measures should not be
considered as alternatives to Net income attributable to Albemarle
Corporation ("earnings") or other comparable measures calculated
and reported in accordance with GAAP. These measures are presented
here to provide additional useful measurements to review the
company's operations, provide transparency to investors and enable
period-to-period comparability of financial performance. The
company's chief operating decision maker uses these measures to
assess the ongoing performance of the company and its segments, as
well as for business and enterprise planning purposes.
A description of other non-GAAP financial measures that
Albemarle uses to evaluate its
operations and financial performance, and reconciliation of these
non-GAAP financial measures to the most directly comparable
financial measures calculated and reported in accordance with GAAP
can be found on the following pages of this press release, which is
also is available on Albemarle's
website at https://investors.albemarle.com. The company does not
provide a reconciliation of forward-looking non-GAAP financial
measures to the most directly comparable financial measures
calculated and reported in accordance with GAAP, as the company is
unable to estimate significant non-recurring or unusual items
without unreasonable effort. The amounts and timing of these items
are uncertain and could be material to the company's results
calculated in accordance with GAAP.
ALBEMARLE
CORPORATION AND SUBSIDIARIES
Non-GAAP
Reconciliations
(Unaudited)
See below for a reconciliation of adjusted net income
attributable to Albemarle Corporation, EBITDA and adjusted EBITDA
(on a consolidated basis), which are non-GAAP financial measures,
to Net income attributable to Albemarle Corporation ("earnings"),
the most directly comparable financial measure calculated and
reported in accordance with GAAP. Reconciliation of adjusted EBITDA
on a segment basis is also provided. Adjusted net income
attributable to Albemarle Corporation is defined as net income
before the non-recurring, other unusual and non-operating pension
and other post-employment benefit (OPEB) items as listed below. The
non-recurring and unusual items may include acquisition and
integration related costs, gains or losses on sales of businesses,
restructuring charges, facility divestiture charges, certain
litigation and arbitration costs and charges, and other significant
non-recurring items. EBITDA is defined as net income attributable
to Albemarle Corporation before interest and financing expenses,
income tax expense, and depreciation and amortization. Adjusted
EBITDA is defined as EBITDA plus or minus the non-recurring, other
unusual and non-operating pension and OPEB items as listed
below.
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
In thousands, except
percentages and per share amounts
|
$
|
|
% of
net
sales
|
|
$
|
|
% of
net
sales
|
|
$
|
|
% of
net
sales
|
|
$
|
|
% of
net
sales
|
Net income attributable
to Albemarle Corporation
|
$ 650,043
|
|
|
|
$ 406,773
|
|
|
|
$
1,888,623
|
|
|
|
$ 660,156
|
|
|
Add back:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-operating pension
and OPEB items (net of tax)
|
381
|
|
|
|
(3,946)
|
|
|
|
755
|
|
|
|
(8,085)
|
|
|
Non-recurring and
other unusual items (net of tax)
|
213,194
|
|
|
|
2,909
|
|
|
|
190,420
|
|
|
|
33,812
|
|
|
Adjusted net income
attributable to Albemarle Corporation
|
$ 863,618
|
|
|
|
$ 405,736
|
|
|
|
$
2,079,798
|
|
|
|
$ 685,883
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted diluted
earnings per share
|
$ 7.33
|
|
|
|
$ 3.45
|
|
|
|
$
17.65
|
|
|
|
$ 5.83
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common
shares outstanding – diluted
|
117,769
|
|
|
|
117,724
|
|
|
|
117,805
|
|
|
|
117,689
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable
to Albemarle Corporation
|
$ 650,043
|
|
27.4 %
|
|
$ 406,773
|
|
27.5 %
|
|
$
1,888,623
|
|
38.2 %
|
|
$ 660,156
|
|
25.3 %
|
Add back:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and financing
expenses
|
25,577
|
|
1.1 %
|
|
41,409
|
|
2.8 %
|
|
52,354
|
|
1.1 %
|
|
69,243
|
|
2.7 %
|
Income tax
expense
|
42,987
|
|
1.8 %
|
|
89,018
|
|
6.0 %
|
|
319,950
|
|
6.5 %
|
|
169,548
|
|
6.5 %
|
Depreciation and
amortization
|
93,085
|
|
3.9 %
|
|
70,993
|
|
4.8 %
|
|
180,356
|
|
3.6 %
|
|
137,567
|
|
5.3 %
|
EBITDA
|
811,692
|
|
34.2 %
|
|
608,193
|
|
41.1 %
|
|
2,441,283
|
|
49.3 %
|
|
1,036,514
|
|
39.8 %
|
Non-operating pension
and OPEB items
|
612
|
|
— %
|
|
(5,038)
|
|
(0.3) %
|
|
1,213
|
|
— %
|
|
(10,318)
|
|
(0.4) %
|
Non-recurring and
other unusual items
|
220,725
|
|
9.3 %
|
|
7,054
|
|
0.5 %
|
|
186,252
|
|
3.8 %
|
|
15,943
|
|
0.6 %
|
Adjusted
EBITDA
|
$
1,033,029
|
|
43.6 %
|
|
$ 610,209
|
|
41.2 %
|
|
$
2,628,748
|
|
53.1 %
|
|
$
1,042,139
|
|
40.0 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
2,370,190
|
|
|
|
$
1,479,593
|
|
|
|
$
4,950,442
|
|
|
|
$
2,607,321
|
|
|
Non-operating pension and OPEB items, consisting of
mark-to-market actuarial gains/losses, settlements/curtailments,
interest cost and expected return on assets, are not allocated to
Albemarle's operating segments and
are included in the Corporate category. In addition, the company
believes that these components of pension cost are mainly driven by
market performance, and the company manages these separately from
the operational performance of the company's businesses. In
accordance with GAAP, these non-operating pension and OPEB items
are included in Other income (expenses), net. Non-operating pension
and OPEB items were as follows (in thousands):
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Interest
cost
|
$
9,027
|
|
$
5,894
|
|
$ 18,037
|
|
$ 11,826
|
Expected return on
assets
|
(8,415)
|
|
(10,932)
|
|
(16,824)
|
|
(22,144)
|
Total
|
$
612
|
|
$ (5,038)
|
|
$
1,213
|
|
$
(10,318)
|
In addition to the non-operating pension and OPEB items
disclosed above, the company has identified certain other items and
excluded them from Albemarle's
adjusted net income calculation for the periods presented. A
listing of these items, as well as a detailed description of each
follows below (per diluted share):
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Acquisition and
integration related costs(1)
|
$
0.04
|
|
$
0.03
|
|
$
0.08
|
|
$
0.05
|
Loss on sale of
interest in properties(2)
|
—
|
|
—
|
|
—
|
|
0.07
|
Loss on early
extinguishment of debt(3)
|
—
|
|
0.13
|
|
—
|
|
0.13
|
Mark-to-market gain on
public equity securities(4)
|
(0.10)
|
|
—
|
|
(0.39)
|
|
—
|
Legal
accrual(5)
|
1.82
|
|
—
|
|
1.82
|
|
—
|
Other(6)
|
0.07
|
|
0.01
|
|
0.12
|
|
—
|
Tax related
items(7)
|
(0.02)
|
|
(0.15)
|
|
(0.01)
|
|
0.04
|
Total non-recurring
and other unusual items
|
$
1.81
|
|
$
0.02
|
|
$
1.62
|
|
$
0.29
|
|
|
(1)
|
Costs related to the
acquisition, integration and divestitures for various significant
projects, recorded in Selling, general and administrative expenses
for the three and six months ended June 30, 2023 were $6.5 million
and $11.6 million ($5.0 million and $9.0 million after income
taxes, or $0.04 and $0.08 per share), respectively, and for the
three and six months ended June 30, 2022 were $5.4 million and $7.1
million ($4.2 million and $5.5 million after income taxes, or $0.03
and $0.05 per share), respectively.
|
|
|
(2)
|
Included in Loss on
sale of interest in properties for the six months ended June 30,
2022 is an expense of $8.4 million ($0.07 per share after no income
tax impact) related to a post-measurement period Wodgina
acquisition purchase price adjustment for a revised estimate of the
obligation to construct the lithium hydroxide conversion assets in
Kemerton due to cost overruns from supply chain, labor and COVID-19
pandemic related issues.
|
|
|
(3)
|
Included in Interest
and financing expenses for the three and six months ended June 30,
2022 is a loss on early extinguishment of debt of $19.2 million
($14.9 million after income taxes, or $0.13 per share),
representing the tender premiums, fees, unamortized discounts,
unamortized deferred financing costs and accelerated amortization
of associated interest rate swap from the redemption of the $425
million senior notes originally due in 2024 using the proceeds from
the issuance of $1.7 billion in senior notes in May
2022.
|
|
|
(4)
|
Gain of $15.0 million
and $60.8 million ($11.2 million and $45.6 million after income
taxes, or $0.10 and $0.39 per share) recorded in Other income, net
for the three and six months ended June 30, 2023, respectively,
resulting from the net increase in fair value of investments in
public equity securities.
|
|
|
(5)
|
Accrual of $218.5
million ($214.9 million after income taxes, or $1.82 per share)
recorded in Selling, general and administrative expenses resulting
from agreements in principle to resolve a previously disclosed
legal matter with the DOJ and SEC related to conduct in our Ketjen
business prior to 2018.
|
|
|
(6)
|
Other adjustments for
the three months ended June 30, 2023 included amounts recorded
in:
|
|
- Selling, general
and administrative expenses - $7.4 million of severance costs in
our Ketjen business which are primarily expected to be paid out
during 2023, $0.7 million of facility closure expenses related to
offices in Germany and $0.6 million primarily related to shortfall
contributions for a multiemployer plan financial improvement
plan.
- Other income, net -
$3.9 million of a loss resulting from the adjustment of
indemnification related to previously disposed businesses,
partially offset by a $2.7 million gain in the fair value of
preferred equity of a Grace subsidiary.
|
|
After income taxes,
these charges totaled $8.4 million, or $0.07 per share.
|
|
|
|
Other adjustments for
the six months ended June, 2023 included amounts recorded
in:
|
|
- Selling, general and administrative expenses
- $7.4 million of severance costs in our Ketjen business which are
primarily expected to be paid out during 2023, $1.9 million of
charges primarily for environmental reserves at sites not part of
our operations, $1.4 million of facility closure expenses related
to offices in Germany and $0.6 million primarily related to
shortfall contributions for a multiemployer plan financial
improvement plan.
- Other income, net - $3.9 million of a loss
resulting from the adjustment of indemnification related to
previously disposed businesses and $3.6 million of charges for
asset retirement obligations at a site not part of our operations,
partially offset by a $2.7 million gain in the fair value of
preferred equity of a Grace subsidiary.
|
|
After income taxes,
these charges totaled $13.2 million, or $0.12 per share.
|
|
|
|
Other adjustments for
the three months ended June 30, 2022 included amounts recorded
in:
|
|
- Selling, general
and administrative expenses - $0.5 million of expense related to
the settlement of a legal matter resulting from a prior
acquisition.
- Other income, net -
$1.1 million primarily related to facility closure expenses of
offices in Germany.
|
|
After income taxes,
these charges totaled $1.2 million, or $0.01 per share.
|
|
|
|
Other adjustments for
the six months ended June 30, 2022 included amounts recorded
in:
|
|
- Cost of goods sold - $0.5 million of expense
related to the settlement of a legal matter resulting from a prior
acquisition.
- Selling, general and administrative expenses
- $4.3 million of gains from the sale of legacy properties not part
of our operations, partially offset by $2.8 million of charges for
environmental reserves at sites not part of our operations and $1.1
million primarily related to facility closure expenses of offices
in Germany.
- Other income, net - $0.6 million gain related
to a settlement received from a legal matter in a prior
period.
|
|
After income taxes,
these charges totaled $0.3 million, or less than $0.01 per
share.
|
|
|
(7)
|
Included in Income tax
expense for the three and six months ended June 30, 2023 are
discrete net tax benefits of $3.9 million, or $0.02 per share and
$1.0 million, or $0.01 per share, respectively. The net benefit
primarily related to foreign return to provisions offset by excess
tax benefits realized from stock-based compensation
arrangements.
|
|
|
|
Included in Income tax
expense for the three and six months ended June 30, 2022 are
discrete net tax benefits of $17.3 million, or $0.15 per share and
net tax expense of $4.7 million, or $0.04 per share, respectively.
The net benefit for the three months was primarily related to a
benefit from global intangible low-taxed income, partially offset
by net discrete tax expenses related to withholding taxes and
foreign return to provisions. The discrete net expense for the six
months was primarily related to withholding taxes and foreign
return to provisions, partially offset by a benefit for excess tax
benefits realized from stock-based compensation
arrangements.
|
See below for a reconciliation of the adjusted effective income
tax rate, the non-GAAP financial measure, to the effective income
tax rate, the most directly comparable financial measure calculated
and reported in accordance with GAAP (in thousands, except
percentages).
|
Income
before
income taxes
and
equity in net
income
of
unconsolidated
investments
|
|
Income tax
expense
|
|
Effective income
tax
rate
|
Three months ended
June 30, 2023
|
|
|
|
|
|
As reported
|
$
168,375
|
|
$
42,987
|
|
25.5 %
|
Non-recurring, other
unusual and non-operating pension and OPEB items
|
221,337
|
|
7,762
|
|
|
As adjusted
|
$
389,712
|
|
$
50,749
|
|
13.0 %
|
|
|
|
|
|
|
Three months ended
June 30, 2022
|
|
|
|
|
|
As reported
|
$
401,454
|
|
$
89,018
|
|
22.2 %
|
Non-recurring, other
unusual and non-operating pension and OPEB items
|
21,235
|
|
22,272
|
|
|
As adjusted
|
$
422,689
|
|
$
111,290
|
|
26.3 %
|
|
|
|
|
|
|
Six months ended
June 30, 2023
|
|
|
|
|
|
As reported
|
$
1,325,853
|
|
$
319,950
|
|
24.1 %
|
Non-recurring, other
unusual and non-operating pension and OPEB items
|
187,465
|
|
(3,710)
|
|
|
As adjusted
|
$
1,513,318
|
|
$
316,240
|
|
20.9 %
|
|
|
|
|
|
|
Six months ended
June 30, 2022
|
|
|
|
|
|
As reported
|
$
701,095
|
|
$
169,548
|
|
24.2 %
|
Non-recurring, other
unusual and non-operating pension and OPEB items
|
24,844
|
|
(883)
|
|
|
As adjusted
|
$
725,939
|
|
$
168,665
|
|
23.2 %
|
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SOURCE Albemarle Corporation