Abrupt and unprecedented reductions in inventory by growers
and the distribution channel led to significant volume decline
despite steady on-the-ground consumption
Second Quarter 2023 Highlights
- Revenue of $1.01 billion, down 30
percent versus Q2 2022 and down 28 percent
organically1
- Consolidated GAAP net income of $32.4
million, down 75 percent versus Q2 2022
- Adjusted EBITDA of $187.6
million, down 48 percent versus Q2 2022
- Consolidated GAAP earnings of $0.24 per diluted share, down 77 percent versus
Q2 2022
- Adjusted earnings per diluted share of $0.50, down 74 percent versus Q2 2022
- Returned approximately $123
million to shareholders, including $50 million in share repurchases
Full-Year Outlook2
- Revenue of $5.20 to $5.40 billion, reflecting a 9 percent decline at
the midpoint versus 2022
- Adjusted EBITDA of $1.30 to
$1.40 billion, reflecting a 4 percent
decline at the midpoint versus 2022
- Lowers adjusted earnings per diluted share outlook to
$5.86 to $6.80, reflecting 15 percent decrease at the
midpoint versus 2022
- Lowers free cash flow outlook to a midpoint of break even
PHILADELPHIA, Aug. 2, 2023
/PRNewswire/ -- FMC Corporation (NYSE: FMC) today reported second
quarter 2023 revenue of $1.01
billion, down 30 percent versus second quarter 2022, and
down 28 percent organically. On a GAAP basis, the company reported
earnings of $0.24 per diluted share
in the second quarter, a decrease of 77 percent versus second
quarter 2022. Second quarter adjusted earnings were $0.50 per diluted share, down 74 percent versus
second quarter 2022.
Second Quarter
Adjusted EPS versus Q2 2022
|
-143
cents
|
Adjusted
EBITDA
|
-116 cents
|
Interest
Expense
|
-20 cents
|
Depreciation &
Amortization
|
-4 cents
|
Minority
Interest
|
-3 cents
|
"FMC delivered second quarter results in-line with recently
adjusted guidance expectations. Active inventory management by
growers and the distribution channel drove unprecedented volume
declines and as a result we now expect the overall crop protection
market to contract high-single-digits to low-double-digits percent
this year despite steady on-the-ground usage by growers," said
Mark Douglas, FMC president and
chief executive officer.
Revenue in the quarter was driven by a 31 percent decline from
volume. Price was up 3 percent, partially offset by a 2
percent foreign currency headwind. Demand for the company's
innovative products remained resilient as sales from new products
launched in the last five years were essentially flat to the
prior-year period despite the overall sales drop. Branded diamides
performed better than the rest of the portfolio, with reduced
partner sales the main driver of volume decline in diamides.
North America revenue was down
25 percent (down 24 percent organically) versus the prior-year
period as partners, the distribution channel and growers reduced
inventory. Branded diamides in the region showed strong growth
largely due to high insect pressure in Canada. Sales in EMEA declined 26 percent
(down 24 percent organically) compared to second quarter 2022 due
to channel and grower destocking as well as adverse weather
conditions across Europe. Volume
headwinds were partially offset by strong pricing gains in the
region. In Latin America, revenue
was down 38 percent versus the prior-year period driven by
significantly lower volumes as destocking was amplified by a
historic drought in southern Brazil and Argentina. Sales in Asia declined 29 percent (down 23 percent
organically) year-over-year. As expected, India continued to manage high channel
inventory and was impacted by challenged growing conditions in most
of the country. Globally, Plant Health revenue was down 31 percent
(down 25 percent organically) versus prior year driven by similar
channel dynamics as the rest of the crop protection portfolio.
FMC
Revenue
|
Q2
2023
|
Total Revenue Change
(GAAP)
|
(30 %)
|
Less FX
Impact
|
2 %
|
Organic1
Revenue Change (Non-GAAP)
|
(28 %)
|
FMC second quarter adjusted EBITDA was $187.6 million, a decrease of 48 percent from the
prior-year period. The negative impact of volume more than offset
the gains from better year-over-year prices and costs. Cost was a
positive driver of adjusted EBITDA for the first time since
2020. FX was a headwind to adjusted EBITDA.
Full Year 2023 Outlook2
Consistent with the company's release on July 10, FMC is forecasting full-year 2023
revenue to be in the range of $5.20
billion to $5.40 billion,
reflecting a 9 percent decline at the midpoint versus 2022 and
full-year adjusted EBITDA is expected to be in the range of
$1.30 billion to $1.40 billion, representing 4 percent decline
year-over-year at the midpoint. The forecast for the 2023 adjusted
earnings range is lowered to $5.86 to
$6.80 per diluted share, representing
a year-over-year decrease of 15 percent at the midpoint. The
company is lowering full-year free cash flow guidance to a range of
negative $175 million to positive
$175 million due to the lower revenue
generated in the first half of the year, lowered adjusted EBITDA
guidance and expected lower payables at year end.
Second Half Outlook2
Sales in the second half of 2023 are expected to be in the range
of $2.84 billion to $3.04 billion, representing a 2 percent decrease
at the midpoint compared to the same period last year. Adjusted
EBITDA is forecasted to be $751
million to $851 million,
representing 16 percent growth at the midpoint versus second half
2022. Forecasted input cost tailwinds, operating expense
discipline, anticipated growth of new products and projected
pricing gains are expected to more than offset the adjusted EBITDA
impact from anticipated volume decline in the second half. The
split of earnings and revenue between the third and fourth quarter
is forecasted to be more heavily weighted to the end of the year as
growers and the distribution channel purchase closer to
application.
Third quarter revenue is expected to be in the range of
$1.19 billion to $1.27 billion, representing an 11 percent
decrease at the midpoint compared to third quarter 2022 as
inventory destocking dynamics in the channel are expected to
continue and 'hand-to-mouth' purchasing behavior is expected to
shift some orders closer to the application timeframe in the fourth
quarter. Adjusted EBITDA is forecasted to be in the range of
$240 million to $290 million, representing a 2 percent increase
at the midpoint versus third quarter 2022 as the impact from lower
volume is more than offset by favorable input costs and pricing.
FMC expects third quarter adjusted earnings per diluted share to be
in the range of $0.90 to $1.32, a 10 percent decrease at the midpoint
mainly due to projected higher interest expense.
Fourth quarter revenue is expected to be in the range of
$1.66 billion to $1.78 billion, representing a 6 percent increase
at the midpoint compared to prior year aided by channel and grower
purchase timing, expectations for increased planted acreage in
Brazil, forecasted product
launches and continued pricing actions. Adjusted EBITDA in the
fourth quarter is expected to be in the range of $511 million to $561
million, a 24 percent increase at the midpoint versus fourth
quarter 2022 due to forecasts of higher revenue and lower input
costs. FMC expects adjusted earnings per diluted share to be in the
range of $2.71 to $3.17, which represents a 24 percent increase
versus fourth quarter 2022.
"The crop protection market is in the midst of a global
resetting of inventory levels. We anticipate volume pressure at the
start of the second half and have adjusted our outlook accordingly.
However, we continue to observe steady consumption of product by
growers along with acreage increases for key crops. As a result, we
expect to grow adjusted EBITDA in the second half due to lower
costs, price increases and improved mix from new products as demand
for our innovative portfolio remains strong," said Douglas.
|
Full-Year 2023
Outlook2
|
Second-Half
Outlook2
|
Q3 2023
Outlook
|
Q4 2023
Outlook
|
Revenue
|
$5.20 to $5.40
billion
|
$2.84 to $3.04
billion*
|
$1.19 to $1.27
billion
|
$1.66 to $1.78
billion
|
Variance at
midpoint vs.
2022
|
-9 %
|
-2 %
|
-11 %
|
+6 %
|
Adjusted
EBITDA
|
$1.30 to $1.40
billion
|
$751 to $851
million
|
$240 to $290
million
|
$511 to $561
million
|
Variance at
midpoint vs.
2022
|
-4 %
|
+16 %
|
+2 %
|
+24 %
|
Adjusted
EPS^
|
$5.86 to
$6.80
|
$3.61 to
$4.49
|
$0.90 to
$1.32
|
$2.71 to
$3.17
|
Variance at
midpoint vs.
2022
|
-15 %
|
+13 %
|
-10 %
|
+24 %
|
|
^ EPS estimates
assume 125.8 million diluted shares for full year and 125.8 million
diluted shares for Q3.
|
* Q3 and Q4 ranges
do not sum to H2 range due to rounding.
|
Supplemental Information
The company will post supplemental information on the web at
https://investors.fmc.com, including its webcast slides for
tomorrow's earnings call, definitions of non-GAAP terms and
reconciliations of non-GAAP figures to the nearest available GAAP
term.
About FMC
FMC Corporation is a global agricultural sciences company
dedicated to helping growers produce food,
feed, fiber and fuel for an expanding world population
while adapting to a changing environment. FMC's innovative
crop protection solutions – including biologicals, crop nutrition,
digital and precision agriculture – enable growers, crop advisers
and turf and pest management professionals to address their
toughest challenges economically while protecting the environment.
With approximately 6,600 employees at more than 100 sites
worldwide, FMC is committed to discovering new herbicide,
insecticide and fungicide active ingredients, product formulations
and pioneering technologies that are consistently better for the
planet. Visit fmc.com to learn more and follow us
on LinkedIn® and Twitter®.
Statement under the Safe Harbor Provisions of the Private
Securities Litigation Reform Act of 1995: FMC and its
representatives may from time to time make written or oral
statements that are "forward-looking" and provide other than
historical information, including statements contained in this
press release, in FMC's other filings with the SEC, and in reports
or letters to FMC stockholders.
In some cases, FMC has identified these forward-looking
statements by such words or phrases as "will likely result," "is
confident that," "expect," "expects," "should," "could," "may,"
"will continue to," "believe," "believes," "anticipates,"
"predicts," "forecasts," "estimates," "projects," "potential,"
"intends" or similar expressions identifying "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995, including the negative of those words or
phrases. Such forward-looking statements are based on our current
views and assumptions regarding future events, future business
conditions and the outlook for the company based on currently
available information. The forward-looking statements involve known
and unknown risks, uncertainties and other factors that may cause
actual results to be materially different from any results, levels
of activity, performance or achievements expressed or implied by
any forward-looking statement. These statements are qualified by
reference to the risk factors included in Part I, Item 1A of our
Annual Report on Form 10-K for the year ended December 31, 2022 (the "2022 Form 10-K"), the
section captioned "Forward-Looking Information" in Part II of the
2022 Form 10-K and to similar risk factors and cautionary
statements in all other reports and forms filed with the Securities
and Exchange Commission ("SEC"). Moreover, investors are cautioned
to interpret many of these factors as being impacted as a result of
the residual adverse impacts of COVID and governmental, business,
and societal responses to COVID. We wish to caution readers
not to place undue reliance on any such forward-looking statements,
which speak only as of the date made. Forward-looking
statements are qualified in their entirety by the above cautionary
statement.
We specifically decline to undertake any obligation, and
specifically disclaims any duty, to publicly update or revise any
forward-looking statements that have been made to reflect events or
circumstances after the date of such statements or to reflect the
occurrence of anticipated or unanticipated events, except as may be
required by law.
This press release contains certain "non-GAAP financial
terms" which are defined on our website www.fmc.com/investors. Such
terms include adjusted EBITDA, adjusted earnings, free cash flow
and organic revenue growth. In addition, we have also provided on
our website reconciliations of non-GAAP terms to the most directly
comparable GAAP term.
- Organic revenue growth (non-GAAP) excludes the impact of
foreign currency changes.
- Although we provide forecasts for adjusted earnings per share,
adjusted EBITDA and free cash flow (non-GAAP financial measures),
we are not able to forecast the most directly comparable measures
calculated and presented in accordance with GAAP. Certain elements
of the composition of the GAAP amounts are not predictable, making
it impractical for us to forecast. Such elements include, but are
not limited to, restructuring, acquisition charges, and
discontinued operations. As a result, no GAAP outlook is
provided.
FMC
CORPORATION
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(Unaudited, in
millions, except per share amounts)
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Revenue
|
$
1,014.5
|
|
$
1,452.3
|
|
$
2,358.8
|
|
$
2,803.1
|
Costs of sales and
services
|
581.7
|
|
861.3
|
|
1,344.7
|
|
1,639.4
|
Gross margin
|
$ 432.8
|
|
$ 591.0
|
|
$
1,014.1
|
|
$
1,163.7
|
Selling, general and
administrative expenses
|
205.6
|
|
194.8
|
|
391.5
|
|
383.3
|
Research and
development expenses
|
87.7
|
|
79.5
|
|
166.1
|
|
151.3
|
Restructuring and other
charges (income)
|
7.3
|
|
80.8
|
|
19.8
|
|
89.9
|
Total costs and
expenses
|
$ 882.3
|
|
$
1,216.4
|
|
$
1,922.1
|
|
$
2,263.9
|
Income from continuing operations before
non-operating pension
and postretirement charges (income), interest expense, net and
income taxes
|
$
132.2
|
|
$
235.9
|
|
$
436.7
|
|
$ 539.2
|
Non-operating pension
and postretirement charges (income)
|
4.6
|
|
3.9
|
|
9.2
|
|
8.2
|
Interest expense,
net
|
64.5
|
|
35.3
|
|
115.9
|
|
65.2
|
Income (loss) from continuing operations before
income taxes
|
$
63.1
|
|
$
196.7
|
|
$
311.6
|
|
$ 465.8
|
Provision (benefit) for
income taxes
|
9.2
|
|
54.7
|
|
50.3
|
|
97.0
|
Income (loss) from
continuing operations
|
$
53.9
|
|
$ 142.0
|
|
$ 261.3
|
|
$ 368.8
|
Discontinued
operations, net of income taxes
|
(21.5)
|
|
(10.8)
|
|
(33.0)
|
|
(26.0)
|
Net income
(loss)
|
$
32.4
|
|
$
131.2
|
|
$
228.3
|
|
$ 342.8
|
Less: Net income
(loss) attributable to noncontrolling interests
|
1.9
|
|
(3.0)
|
|
1.8
|
|
1.2
|
Net income (loss) attributable to FMC
stockholders
|
$
30.5
|
|
$
134.2
|
|
$
226.5
|
|
$ 341.6
|
Amounts attributable to FMC
stockholders:
|
|
|
|
|
|
|
|
Income (loss)
from continuing operations
|
$
52.0
|
|
$ 145.0
|
|
$ 259.5
|
|
$ 367.6
|
Discontinued
operations, net of tax
|
(21.5)
|
|
(10.8)
|
|
(33.0)
|
|
(26.0)
|
Net income (loss)
|
$
30.5
|
|
$
134.2
|
|
$
226.5
|
|
$ 341.6
|
Basic earnings (loss) per common share attributable
to FMC
stockholders:
|
|
|
|
|
|
|
|
Continuing
operations
|
$
0.41
|
|
$
1.15
|
|
$
2.07
|
|
$ 2.91
|
Discontinued
operations
|
(0.17)
|
|
(0.09)
|
|
(0.26)
|
|
(0.21)
|
Basic earnings per common
share
|
$
0.24
|
|
$
1.06
|
|
$
1.81
|
|
$
2.70
|
Average number of
shares outstanding used in basic earnings per share
computations
|
125.1
|
|
126.2
|
|
125.2
|
|
126.1
|
Diluted earnings (loss) per common share attributable
to FMC
stockholders:
|
|
|
|
|
|
|
|
Continuing
operations
|
$
0.41
|
|
$
1.15
|
|
$
2.06
|
|
$ 2.90
|
Discontinued
operations
|
(0.17)
|
|
(0.09)
|
|
(0.26)
|
|
(0.21)
|
Diluted earnings per common
share
|
$
0.24
|
|
$
1.06
|
|
$
1.80
|
|
$
2.69
|
Average number of
shares outstanding used in diluted earnings per share
computations
|
125.7
|
|
126.9
|
|
125.9
|
|
126.9
|
|
|
|
|
|
|
|
|
Other Data:
|
|
|
|
|
|
|
|
Capital additions and
other investing activities
|
$
29.8
|
|
$
9.9
|
|
$
81.1
|
|
$ 64.8
|
Depreciation and
amortization expense
|
48.1
|
|
42.8
|
|
92.8
|
|
85.2
|
FMC
CORPORATION
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES
RECONCILIATION OF
NET INCOME (LOSS) ATTRIBUTABLE TO FMC STOCKHOLDERS (GAAP) TO
ADJUSTED AFTER-TAX EARNINGS FROM CONTINUING OPERATIONS,
ATTRIBUTABLE TO FMC STOCKHOLDERS (NON-GAAP)
(Unaudited, in
millions, except per share amounts)
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net income (loss)
attributable to FMC stockholders (GAAP)
|
$
30.5
|
|
$
134.2
|
|
$
226.5
|
|
$
341.6
|
Corporate special
charges (income):
|
|
|
|
|
|
|
|
Restructuring and
other charges (income) (a)
|
7.3
|
|
80.8
|
|
19.8
|
|
89.9
|
Non-operating pension
and postretirement charges (income) (b)
|
4.6
|
|
3.9
|
|
9.2
|
|
8.2
|
Income tax expense
(benefit) on Corporate special charges (income)
(c)
|
(2.3)
|
|
(0.9)
|
|
(4.3)
|
|
(1.8)
|
Adjustment for
noncontrolling interest, net of tax on Corporate special
charges
(income)
|
0.8
|
|
—
|
|
(2.0)
|
|
—
|
Discontinued operations
attributable to FMC stockholders, net of income taxes
(d)
|
21.5
|
|
10.8
|
|
33.0
|
|
26.0
|
Tax adjustment
(e)
|
0.2
|
|
16.3
|
|
3.5
|
|
19.9
|
Adjusted after-tax earnings from continuing
operations attributable to
FMC stockholders (Non-GAAP) (1)
|
$
62.6
|
|
$
245.1
|
|
$
285.7
|
|
$
483.8
|
|
|
|
|
|
|
|
|
Diluted earnings per
common share (GAAP)
|
$
0.24
|
|
$
1.06
|
|
$ 1.80
|
|
$
2.69
|
Corporate special
charges (income) per diluted share, before tax:
|
|
|
|
|
|
|
|
Restructuring and
other charges (income)
|
0.06
|
|
0.64
|
|
0.16
|
|
0.71
|
Non-operating pension
and postretirement charges (income)
|
0.04
|
|
0.03
|
|
0.07
|
|
0.06
|
Income tax expense
(benefit) on Corporate special charges (income), per
diluted share
|
(0.01)
|
|
(0.02)
|
|
(0.03)
|
|
(0.02)
|
Adjustment for
noncontrolling interest, net of tax on Corporate special
charges
(income) per diluted share
|
—
|
|
—
|
|
(0.02)
|
|
—
|
Discontinued operations
attributable to FMC stockholders, net of income taxes
per diluted share
|
0.17
|
|
0.09
|
|
0.26
|
|
0.21
|
Tax adjustments per
diluted share
|
—
|
|
0.13
|
|
0.03
|
|
0.16
|
Diluted adjusted after-tax earnings from continuing
operations per share,
attributable to FMC stockholders (Non-GAAP)
|
$
0.50
|
|
$
1.93
|
|
$ 2.27
|
|
$
3.81
|
|
|
|
|
|
|
|
|
Average number of
shares outstanding used in diluted adjusted after-tax
earnings from continuing operations per share
computations
|
125.7
|
|
126.9
|
|
125.9
|
|
126.9
|
____________________
|
(1)
|
Referred to as Adjusted
earnings. The Company believes that Adjusted earnings, a Non-GAAP
financial measure, and its presentation on a per share basis
provides useful information about the Company's operating results
to management, investors, and securities analysts. Adjusted
earnings excludes the effects of corporate special charges,
tax-related adjustments and the results of our discontinued
operations. The Company also believes that excluding the effects of
these items from operating results allows management and investors
to compare more easily the financial performance of its underlying
business from period to period.
|
|
|
(a)
|
Three Months Ended
June 30, 2023:
|
|
|
|
Restructuring and other
charges (income) includes $4.3 million of severance and employee
separation costs as well as $0.6 million of other restructuring
related charges incurred as part of various restructuring
initiatives. These restructuring charges were offset by a $5.8
million gain recognized on the disposition of land related to a
previously closed manufacturing facility. Other charges (income) of
$8.2 million, relates primarily to environmental sites of $7.5
million as well as $0.7 million of other miscellaneous
charges.
|
|
|
|
Three Months Ended June 30,
2022:
|
|
|
|
Restructuring and other
charges (income) is primarily comprised of $76.1 million in
exit charges related to our decision to cease operations and
business in Russia. Restructuring and other charges (income) also
includes charges relating to environmental sites of $0.9 million,
as well as severance, restructuring, and other charges of $3.4
million from various restructuring programs and other charges of
$0.4 million.
|
|
|
|
Six Months Ended
June 30, 2023:
|
|
|
|
Restructuring and other
charges (income) includes $4.3 million of severance and
employee separation costs as well as $1.5 million of asset
impairment and other charges related to various global
restructuring initiatives. These restructuring charges were offset
by a $5.8 million gain recognized on the disposition of land
related to a previously closed manufacturing facility. Other
charges (income) of $19.8 million, relates primarily to a
$6.9 million remeasurement charge triggered during the period
as a result of the significant currency depreciation of the
Pakistani Rupee. On January 25th, 2023, the Pakistani Rupee
experienced its largest single day drop against the US dollar in
over two decades following the removal of the USD-PKR exchange cap
in place on the country's currency. Additionally, other charges
(income) relating to environmental sites of $9.8 million were
recognized during the period as well as $3.1 million of other
miscellaneous charges.
|
|
|
|
Six Months Ended June 30, 2022:
|
|
|
|
Restructuring and other
charges (income) is primarily comprised of $76.1 million in
exit charges related to our decision to cease operations and
business in Russia. Restructuring and other charges (income)
also includes income relating to environmental sites of
$2.4 million, as well as severance, restructuring, and other
charges of $14.6 million from various restructuring programs
and other charges of $1.6 million.
|
|
|
(b)
|
Our non-operating
pension and postretirement charges (income) are defined as those
costs (benefits) related to interest, expected return on plan
assets, amortized actuarial gains and losses and the impacts of any
plan curtailments or settlements. These are excluded from our
Adjusted Earnings and are primarily related to changes in pension
plan assets and liabilities which are tied to financial market
performance and we consider these costs to be outside our
operational performance. We continue to include the service cost
and amortization of prior service cost in our Adjusted Earnings
results noted above. These elements reflect the current year
operating costs to our businesses for the employment benefits
provided to active
employees.
|
|
|
(c)
|
The income tax expense
(benefit) on Corporate special charges (income) is determined using
the applicable rates in the taxing jurisdictions in which the
corporate special charge or income occurred and includes both
current and deferred income tax expense (benefit) based on the
nature of the non-GAAP performance measure.
|
|
|
(d)
|
Discontinued operations
includes provisions, net of recoveries, for environmental
liabilities and legal reserves and expenses related to previously
discontinued operations and retained liabilities.
|
|
|
(e)
|
We exclude the GAAP tax
provision, including discrete items, from the Non-GAAP measure of
income, and include a Non-GAAP tax provision based upon the
projected annual Non-GAAP effective tax rate. The GAAP tax
provision includes certain discrete tax items including, but are
not limited to: income tax expenses or benefits that are not
related to continuing operating results in the current year; tax
adjustments associated with fluctuations in foreign currency
remeasurement of certain foreign operations; certain changes in
estimates of tax matters related to prior fiscal years; certain
changes in the realizability of deferred tax assets and related
interim accounting impacts; and changes in tax law. Management
believes excluding these discrete tax items assists investors and
securities analysts in understanding the tax provision and the
effective tax rate related to continuing operating results thereby
providing investors with useful supplemental information about
FMC's operational performance.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
(in Millions)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Non-GAAP tax adjustments
|
|
|
|
|
|
|
|
Foreign currency
remeasurement and other discrete items
|
$ 0.2
|
|
$
16.3
|
|
$ 3.5
|
|
$
19.9
|
Total Non-GAAP tax adjustments
|
$
0.2
|
|
$
16.3
|
|
$
3.5
|
|
$
19.9
|
RECONCILIATION OF
NET INCOME (LOSS) (GAAP) TO ADJUSTED EARNINGS FROM CONTINUING
OPERATIONS, BEFORE INTEREST, INCOME TAXES, DEPRECIATION AND
AMORTIZATION, AND NONCONTROLLING INTERESTS
(NON-GAAP)
(Unaudited, in
millions)
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net income (loss)
(GAAP)
|
$ 32.4
|
|
$
131.2
|
|
$
228.3
|
|
$
342.8
|
Restructuring and
other charges (income)
|
7.3
|
|
80.8
|
|
19.8
|
|
89.9
|
Non-operating pension
and postretirement charges (income)
|
4.6
|
|
3.9
|
|
9.2
|
|
8.2
|
Discontinued
operations, net of income taxes
|
21.5
|
|
10.8
|
|
33.0
|
|
26.0
|
Interest expense,
net
|
64.5
|
|
35.3
|
|
115.9
|
|
65.2
|
Depreciation and
amortization
|
48.1
|
|
42.8
|
|
92.8
|
|
85.2
|
Provision (benefit)
for income taxes
|
9.2
|
|
54.7
|
|
50.3
|
|
97.0
|
Adjusted earnings from continuing operations, before
interest, income
taxes, depreciation and amortization, and noncontrolling
interests
(Non-GAAP) (1)
|
$
187.6
|
|
$
359.5
|
|
$
549.3
|
|
$
714.3
|
___________________
|
(1)
|
Referred to as Adjusted
EBITDA. Defined as operating profit excluding corporate special
charges (income) and depreciation and amortization
expense.
|
RECONCILIATION OF
CASH PROVIDED (REQUIRED) BY OPERATING ACTIVITIES OF CONTINUING
OPERATIONS (GAAP) TO FREE CASH FLOW (NON-GAAP)
(Unaudited, in
millions)
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Cash provided
(required) by operating activities of continuing operations
(GAAP) (1)
|
$
131.5
|
|
$
195.9
|
|
$ (719.8)
|
|
$ (401.9)
|
Transaction and
integration costs
|
—
|
|
—
|
|
—
|
|
0.5
|
Adjusted cash from
operations(2)
|
$
131.5
|
|
$
195.9
|
|
$
(719.8)
|
|
$
(401.4)
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
(28.9)
|
|
(23.4)
|
|
(75.8)
|
|
(73.7)
|
Other investing
activities
|
(0.9)
|
|
13.5
|
|
(5.3)
|
|
8.9
|
Capital additions and other investing
activities
|
$
(29.8)
|
|
$ (9.9)
|
|
$
(81.1)
|
|
$
(64.8)
|
|
|
|
|
|
|
|
|
Cash provided
(required) by operating activities of discontinued
operations
|
(14.3)
|
|
(20.6)
|
|
(26.9)
|
|
(31.6)
|
Transaction and
integration costs
|
—
|
|
—
|
|
—
|
|
(0.5)
|
Proceeds from Land
Disposition
|
5.8
|
|
—
|
|
5.8
|
|
—
|
Legacy and transformation
|
$ (8.5)
|
|
$
(20.6)
|
|
$
(21.1)
|
|
$
(32.1)
|
|
|
|
|
|
|
|
|
Free cash flow
(Non-GAAP)(3)
|
$ 93.2
|
|
$
165.4
|
|
$
(822.0)
|
|
$
(498.3)
|
|
___________________
|
(1)
|
The cash provided
(required) by operating activities for the three months ended June
30, 2023 and 2022 is the calculation of the six months ended June
30, 2023 and 2022 less the previously reported three months ended
March 31, 2023 and 2022, respectively.
|
(2)
|
Adjusted cash from
operations is defined as cash provided (required) by operating
activities of continuing operations excluding the effects of
transaction-related cash flows.
|
(3)
|
Free cash flow is
defined as Adjusted cash from operations reduced by spending for
capital additions and other investing activities as well as legacy
and transformation spending. We believe that this Non-GAAP
financial measure provides a useful basis for investors and
securities analysts about the cash generated by routine business
operations, including capital expenditures, in addition to
assessing our ability to repay debt, fund acquisitions and return
capital to shareholders through share repurchases and dividends.
Our use of free cash flow has limitations as an analytical tool and
should not be considered in isolation or as a substitute for an
analysis of our results under U.S. GAAP.
|
RECONCILIATION OF
REVENUE CHANGE (GAAP) TO
ORGANIC REVENUE
CHANGE (NON-GAAP) (1)
(Unaudited)
|
|
|
Three Months Ended
June 30, 2023 vs. 2022
|
|
Six Months Ended
June 30, 2023 vs. 2022
|
Total Revenue Change (GAAP)
|
(30) %
|
|
(16) %
|
Less: Foreign Currency
Impact
|
(2) %
|
|
(3) %
|
Organic Revenue Change
(Non-GAAP)
|
(28) %
|
|
(13) %
|
___________________
|
(1)
|
We believe organic
revenue growth (non-GAAP) provides management and investors with
useful supplemental information regarding our ongoing revenue
performance and trends by presenting revenue growth excluding the
impact of fluctuations in foreign exchange rates.
|
FMC
CORPORATION
CONDENSED
CONSOLIDATED BALANCE SHEETS
(Unaudited, in
millions)
|
|
|
June 30, 2023
|
|
December 31, 2022
|
Cash and cash
equivalents
|
$
941.5
|
|
$
572.0
|
Trade receivables, net
of allowance of $34.4 in 2023 and $33.9 in 2022
|
2,782.8
|
|
2,871.4
|
Inventories
|
2,072.3
|
|
1,651.6
|
Prepaid and other
current assets
|
470.2
|
|
343.6
|
Total current assets
|
$
6,266.8
|
|
$
5,438.6
|
|
|
|
|
Property, plant and
equipment, net
|
867.9
|
|
849.6
|
Goodwill
|
1,592.3
|
|
1,589.3
|
Other intangibles,
net
|
2,488.6
|
|
2,508.1
|
Deferred income
taxes
|
218.5
|
|
210.7
|
Other long-term
assets
|
517.6
|
|
575.0
|
Total assets
|
$
11,951.7
|
|
$
11,171.3
|
|
|
|
|
Short-term debt and
current portion of long-term debt
|
$
1,660.5
|
|
$
540.8
|
Accounts payable, trade
and other
|
1,032.7
|
|
1,252.2
|
Advanced payments from
customers
|
3.4
|
|
680.5
|
Accrued and other
liabilities
|
685.0
|
|
601.8
|
Accrued customer
rebates
|
743.1
|
|
465.3
|
Guarantees of vendor
financing
|
106.3
|
|
142.0
|
Accrued pensions and
other postretirement benefits, current
|
3.5
|
|
2.3
|
Income taxes
|
118.2
|
|
114.7
|
Total current liabilities
|
$
4,352.7
|
|
$
3,799.6
|
|
|
|
|
Long-term debt, less
current portion
|
$
3,022.0
|
|
$
2,733.2
|
Long-term
liabilities
|
1,199.6
|
|
1,237.6
|
Equity
|
3,377.4
|
|
3,400.9
|
Total liabilities and equity
|
$
11,951.7
|
|
$
11,171.3
|
FMC
CORPORATION
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in
millions)
|
|
|
Six Months Ended June 30,
|
|
2023
|
|
2022
|
Cash provided
(required) by operating activities of continuing
operations
|
$
(719.8)
|
|
$
(401.9)
|
|
|
|
|
Cash provided
(required) by operating activities of discontinued
operations
|
(26.9)
|
|
(31.6)
|
|
|
|
|
Cash provided
(required) by investing activities of continuing
operations
|
(78.5)
|
|
(65.3)
|
|
|
|
|
Cash provided
(required) by financing activities of continuing
operations
|
1,194.6
|
|
585.7
|
|
|
|
|
Effect of exchange rate
changes on cash
|
0.1
|
|
(12.2)
|
Increase (decrease) in
cash and cash equivalents
|
$
369.5
|
|
$
74.7
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents, beginning of period
|
$
572.0
|
|
$
516.8
|
|
|
|
|
Cash and cash equivalents, end of
period
|
$
941.5
|
|
$
591.5
|
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SOURCE FMC Corporation