The Chemours Company (“Chemours” or “the Company”) (NYSE: CC), a
global leader in delivering innovative performance chemistry
through Thermal & Specialized Solutions (“TSS”), Titanium
Technologies (“TT”), and Advanced Performance Materials (“APM”),
today announced its financial results for the third quarter 2024
and provided an update on the Company’s corporate strategy.
Key Third Quarter 2024 Results & Highlights
- Net Sales of $1.5 billion, in line with the corresponding
prior-year quarter, with TSS achieving record third quarter Net
Sales, driven by year-over-year growth of 21% in Opteon™
Refrigerants
- Net Loss attributable to Chemours of $27 million or $0.18 per
diluted share reflecting a non-cash impairment charge of $56
million1, compared with a Net Income attributable to Chemours of
$12 million, or $0.08 per diluted share, in the corresponding
prior-year quarter
- Adjusted Net Income2 of $61 million, or $0.40 per diluted
share, compared with $65 million, or $0.43 per diluted share, in
the corresponding prior-year quarter
- Adjusted EBITDA2,3 of $208 million compared to $2114 million in
the corresponding prior-year quarter
- Cash returned to shareholders through dividends of $38 million
in the quarter
“In the third quarter, we delivered strong results, meeting our
Net Sales expectations and exceeding our Adjusted EBITDA
expectations. We set a Net Sales record for TSS5, driven by robust
21% year-over-year growth in Opteon™ Refrigerants and made steady
progress in APM with high single-digit year-over-year growth in our
Performance Solutions portfolio. Our TT segment delivered a 23%
year-over-year increase in Adjusted EBITDA amid the lingering
impacts of the now resolved Altamira temporary facility closure in
the second quarter, underscoring our resilient and effective
operational execution,” said Denise Dignam, Chemours President and
CEO. “We are also outlining our refreshed corporate strategy,
designed to position Chemours for sustainable growth and long-term
value creation, with a sharpened focus on near-term execution.”
Total Chemours
Q3 2024
Q3 2023
Y-o-Y % ∆
Q2 2024
Q-o-Q % ∆
Net Sales (millions)
$1,501
$1,487
1%
$1,538
(2)%
Adjusted EBITDA (millions)
$208
$211
(1)%
$206
1%
Third quarter 2024 Net Sales of $1.5 billion increased 1%
compared to the prior-year quarter. A 5% increase in volume was
partially offset by a 3% decrease in pricing, with currency a
slight 1% headwind.
Third quarter 2024 Net Loss attributable to Chemours was $27
million or $0.18 per diluted share, reflecting an impairment charge
of $56 million in the APM segment, compared to Net Income
attributable to Chemours of $12 million, or $0.08 per diluted
share, in the prior-year quarter. Adjusted EBITDA for the third
quarter of 2024 was $208 million, compared to $211 million in the
prior-year quarter. The decline in Adjusted EBITDA was primarily
driven by lower pricing, and to a lesser degree, currency and
portfolio changes, partially offset by increased volumes and
reduced costs.
Thermal & Specialized Solutions
Q3 2024
Q3 2023
Y-o-Y % ∆
Q2 2024
Q-o-Q % ∆
Net Sales (millions)
$460
$436
6%
$513
(10)%
Opteon™ Refrigerants
$205
$170
21%
$227
(10)%
Freon™ Refrigerants
$146
$170
(14)%
$173
(16)%
Foam, Propellants & Other
$109
$96
14%
$113
(4)%
Adjusted EBITDA (millions)
$141
$162
(13)%
$161
(12)%
Adjusted EBITDA Margin
31%
37%
(6) ppts
31%
(0) ppts
TSS segment third quarter 2024 Net Sales were $460 million, up
6% compared to the third quarter 2023. Net Sales growth was
primarily driven by a volume increase of 8%, partially offset by a
price decline of 2%, while currency impact remained relatively
flat. The decline in pricing was largely attributed to softer
Freon™ Refrigerant prices due to elevated market hydrofluorocarbon
(HFC) inventory levels, partially offset by stronger Opteon™
Refrigerant pricing primarily in EMEA. Volume growth was driven by
stronger demand for Opteon™ Refrigerants, supported by continued
adoption in stationary end markets, as well as strong performance
in Foam, Propellants, and Other (FP&O).
TSS segment third quarter 2024 adjusted EBITDA decreased 13% to
$141 million compared to the prior year, with Adjusted EBITDA
Margin down 6 percentage points to 31%. This decline was primarily
driven by the previously mentioned decrease in Freon™ Refrigerant
pricing, higher costs associated with securing additional near-term
quota allowances and increased raw material costs. The decreases in
segment Adjusted EBITDA and Adjusted EBITDA Margin were partially
offset by volume increases in Opteon™ Refrigerants, supported by
continued adoption of low GWP products, especially in the
stationary end markets.
On a sequential basis, Net Sales decreased by 10%, driven by
typical seasonal trends across refrigerants portfolios and the
previously mentioned price declines in Freon™ Refrigerant pricing,
partially offset by increased volumes in Opteon™ Refrigerant
stationary end markets.
Titanium Technologies
Q3 2024
Q3 2023
Y-o-Y % ∆
Q2 2024
Q-o-Q % ∆
Net Sales (millions)
$679
$690
(2)%
$673
1%
Adjusted EBITDA (millions)
$85
$69
23%
$80
6%
Adjusted EBITDA Margin
13%
10%
3 ppts
12%
1 ppt
TT segment third quarter 2024 Net Sales were $679 million, down
2% compared to the third quarter 2023. This decline was primarily
driven by a 2% reduction in pricing. Volumes provided a 1% tailwind
year-over-year, while unfavorable currency movements created a less
than 1% headwind for the segment's Net Sales compared to the
prior-year quarter.
Adjusted EBITDA increased 23% to $85 million compared to the
prior year, while Adjusted EBITDA Margin also improved by 3
percentage points to 13%. The TT earnings increase was driven by
cost savings realized through the TT Transformation Plan, which was
partially offset by the impact of the previously mentioned decline
in pricing as well as the $18 million of costs related to the
unplanned weather-related downtime at our Altamira, Mexico
manufacturing site.
On a sequential basis, Net Sales increased 1%, driven by a 1%
increase in price.
Advanced Performance Materials
Q3 2024
Q3 2023
Y-o-Y % ∆
Q2 2024
Q-o-Q % ∆
Net Sales (millions)
$348
$343
1%
$339
3%
Advanced Materials
$208
$214
(3)%
$206
1%
Performance Solutions
$140
$129
9%
$133
5%
Adjusted EBITDA (millions)
$39
$68
(43)%
$45
(13)%
Adjusted EBITDA Margin
11%
20%
(9) ppts
13%
(2) ppts
APM segment third quarter 2024 Net Sales were $348 million, up
1% compared to the third quarter of 2023. The change in Net Sales
was primarily driven by a 9% increase in volume, partially offset
by a 7% decrease in price, with currency fluctuations presenting a
1% headwind. Volume growth was seen across both Advanced Materials
and Performance Solutions, while the price decline was attributed
to soft market conditions in our macroeconomically exposed end
markets and changes in product mix.
APM segment third quarter 2024 adjusted EBITDA decreased 43% to
$39 million, with the Adjusted EBITDA Margin falling by 9
percentage points to 11%. This decline was primarily due to product
mix and lower absorption of fixed costs.
On a sequential basis, Net Sales increased by 3%, driven by
volume growth of 3% primarily within Performance Solutions, while
both pricing and currency impacts remained unchanged.
Other Segment
The Performance Chemicals and Intermediates business in the
Company’s Other Segment had Net Sales and Adjusted EBITDA for the
third quarter 2024 of $14 million and $3 million, respectively.
Corporate Expenses6
Corporate Expenses were a $57 million offset to Adjusted EBITDA
in the third quarter 2024, up $3 million versus the prior-year
quarter.
Liquidity
As of September 30, 2024, consolidated gross debt was $4.1
billion. Debt, net of $596 million in unrestricted cash and cash
equivalents, was $3.5 billion, resulting in a net leverage ratio of
approximately 4.4x times on a trailing twelve-month Adjusted EBITDA
basis. Total liquidity was $1.2 billion, comprised of $596 million
in unrestricted cash and cash equivalents and $652 million of
revolving credit facility capacity, net of outstanding letters of
credit. The Company retained $70 million in restricted cash and
cash equivalents, including $50 million held in escrow under the
terms of the Memorandum of Understanding (MOU) related to potential
future legacy liabilities, and an additional $20 million
representing its estimated interest in an escrow account for
insurance proceeds.
Cash provided by operating activities for the third quarter of
2024 was $139 million compared to $131 million in the prior-year
quarter. Capital expenditures for the third quarter of 2024
amounted to $76 million, compared to $86 million in the prior-year
quarter. During the current quarter, the Company paid $38 million
in dividends to shareholders.
Fourth Quarter 2024 Outlook
In the fourth quarter, TSS anticipates a sequential low-teens
Net Sales decline driven by refrigerant seasonality, while
expecting TSS to maintain overall double-digit year-over-year
growth in Opteon™ Refrigerants. TSS Adjusted EBITDA is expected to
decrease in the low-20% range sequentially due to refrigerant
seasonality.
TT expects a mid- to high-single digit sequential Net Sales
decline, with seasonality driving lower volumes, as well as impacts
from mix of regional sales. Adjusted EBITDA is expected to decrease
between mid-to-high teens, consistent with the referenced
sequentially-lower volumes and mix.
APM expects a low-single digit Net Sales decline in the fourth
quarter, driven by macro weakness in Advanced Materials end markets
slightly offsetting increases in Performance Solutions. Adjusted
EBITDA is anticipated to be broadly flat sequentially due to the
favorable contribution from Performance Solutions sales and cost
reduction efforts across the business.
The Company anticipates a consolidated Net Sales decrease in the
mid to high-single digits sequentially, with consolidated Adjusted
EBITDA down in the high teens to low 20% range compared with third
quarter 2024 results. Corporate Expenses, as an offset to Adjusted
EBITDA, are expected to be generally in line with the third
quarter.
Overall unrestricted cash in the fourth quarter is anticipated
to remain generally in line with the third quarter, generating a
positive operating cash flow. Cash uses in the fourth quarter will
be concentrated around planned maintenance activities and the
expansion of TSS’s production site at Corpus Christi, Texas. The
Company expects total capex in the fourth quarter to be in the
range of approximately $100 million, due to elevated growth capital
spend in TSS.
Chemours Corporate Strategy Update
Chemours today also outlined a refreshed corporate strategy,
“Pathway to Thrive,” which builds on the Company’s strong
foundation in TSS, TT, and APM, and includes actionable steps to
create short- and long-term value centered around four pillars:
Operational Excellence, Enabling Growth, Portfolio Management and
Strengthening the Long Term.
“Over the last several months, we have taken a hard look at the
business to develop a strategy that will unlock value for
shareholders and build on our commitments to the customers and
communities we serve,” said Denise Dignam. “We have three strong
businesses, a strong management team, good operational execution,
and clear competitive differentiators that position us well to
execute. Our strategy balances growth with disciplined capital
allocation, including ongoing cost actions that are core to how we
run our business.”
Operational Excellence: Chemours expects to achieve
incremental run-rate cost savings of greater than $250 million
across the Company from 2024 through 20277. This will include a
continuation of successful cost reductions through the TT
Transformation Plan, adding an incremental $100 million8 of
anticipated cost savings, plus $150 million in targeted cost
savings across the other businesses and corporate costs9.
The Company will apply a programmatic approach to achieve these
targets, leveraging its manufacturing excellence, standardized
operating model and continuous improvement to adapt to changing
markets. Given progress on cost-out execution efforts as of the
third quarter of 2024, the Company anticipates achieving 50% of the
planned run-rate cost savings by the end of 2025.
Enabling Growth: Chemours is committed to strategically
investing in high-return, innovative growth initiatives across its
portfolio, targeting a sales CAGR exceeding 5% from 2024 to 2027.
In the near term, the Company will prioritize expanding in rapidly
growing end markets, concentrating on data center cooling,
next-generation refrigerant, and semiconductor fabrication.
Investments in these growth enablers will be guided by Chemours’
disciplined capital allocation program, with funding primarily from
the Company’s strong cash flows and cost efficiency. By leveraging
these growth opportunities and focusing on commercial
effectiveness, Chemours will be poised to enhance its competitive
positioning and capture significant market share in an evolving
landscape.
Portfolio Management: The Company is strategically
optimizing its portfolio by shifting its focus from products to
applications in higher-growth, higher-margin markets. This will be
paired with regular holistic portfolio analysis focused on asset
base returns in order to drive shareholder value. The Company will
also evaluate its asset footprint to ensure the asset base is best
positioned to meet the Company’s future needs.
Strengthening the Long Term: Chemours has made measurable
progress resolving legacy liabilities, highlighted in the national
public water systems settlement finalized earlier this year. The
Company will continue to prioritize seeking reasonable resolutions
for the benefit of Chemours’ shareholders and other stakeholders.
Chemours will also maintain its commitment to responsible
manufacturing and continue to engage in advocacy efforts that
create global awareness, as well as regulations and policies
globally that recognize the criticality of the Company’s
chemistries.
Conference Call
As previously announced, Chemours will hold a conference call
and webcast on November 4, 2024, at 8:00 AM Eastern Standard Time.
Access to the webcast and materials can be accessed by visiting the
Events & Presentations page of Chemours’ investor website,
investors.chemours.com. A webcast replay of the conference call
will be available on Chemours’ investor website.
_________________
1 During the third quarter of 2024, the
Company reviewed recently released third-party industry
projections, which for hydrogen now reflect lower end-market demand
as well as slower market growth through 2030 and a more uncertain
long-term growth trajectory beyond 2030. In response to these
negative market outlook developments as well as increased
commercial headwinds due to limited cyclical end-markets recovery
and competitive intensity, the Company has revised its financial
projections for the Advanced Performance Materials business which
includes reductions to its investment plans. The Company concluded
that these market developments, as well as the Company's revised
financial projections to reflect these events, represented a
triggering event for the Company's Advanced Performance Materials
reporting unit and associated goodwill, as well as the related
asset group, during the third quarter of 2024. As a result of this
triggering event, a non-cash charge of $56 million was recorded in
the Advanced Performance Materials segment, reflecting the full
amount of goodwill in that business.
2 Non-GAAP measures, including Adjusted
Net Income, Adjusted EPS and Adjusted EBITDA referred to
throughout, principally exclude the impact of recent litigation
settlements for legacy environmental matters and associated fees,
in addition to other unallocated items – please refer to the
attached "Reconciliation of GAAP Financial Measures to Non-GAAP
Financial Measures (Unaudited)”.
3 Adjusted EBITDA excludes net income
attributable to noncontrolling interests, net interest expense,
depreciation and amortization, and all remaining provision for
income taxes from Adjusted Net Income. See the corresponding
reconciliation referenced in footnote #1.
4 The Company revised its September 30,
2023 non-GAAP Adjusted EBITDA calculation to (1) remove previous
adjustments related to the write-off of certain raw materials and
stores inventories and (2) correct the understatement of accrued
liabilities for steam supplier contract litigation stemming from
the decommissioning of the Kuan Yin, Taiwan manufacturing
facility.
5 For the third quarter as a segment.
6 2024 consolidated Adjusted EBITDA also reflect additional
unallocated costs of $5 million, $6 million and $3 million in Q1
2024, Q2 2024 and Q3 2024, respectively. These costs are reflected
in consolidated Adjusted EBITDA results only
7 Cost savings applied on an Adjusted
EBITDA basis with benefits not being realized until early 2025.
8 Expanding upon the $175 million plan
previously announced in the third quarter of 2023, bringing total
cost reductions to $275 million under the plan.
9 Restructuring costs associated with the
APM business and corporate overheads are captured as a part of the
2024 Restructuring Program in the third quarter of 2024.
About The Chemours Company
The Chemours Company (NYSE: CC) is a global leader in providing
industrial and specialty chemicals products for markets, including
coatings, plastics, refrigeration and air conditioning,
transportation, semiconductor and advanced electronics, general
industrial, and oil and gas. Through our three businesses – Thermal
& Specialized Solutions, Titanium Technologies, and Advanced
Performance Materials – we deliver application expertise and
chemistry-based innovations that solve customers’ biggest
challenges. Our flagship products are sold under prominent brands
such as Opteon™, Freon™, Ti-Pure™, Nafion™, Teflon™, Viton™, and
Krytox™. Headquartered in Wilmington, Delaware and listed on the
NYSE under the symbol CC, Chemours has approximately 6,100
employees and 28 manufacturing sites and serves approximately 2,700
customers in approximately 110 countries.
For more information, visit chemours.com or follow us on X
(formerly Twitter) @Chemours or LinkedIn.
Non-GAAP Financial Measures
We prepare our financial statements in accordance with Generally
Accepted Accounting Principles (GAAP). Within this press release,
we may make reference to Adjusted Net Income, Adjusted EPS,
Adjusted EBITDA, Total Debt Principal, Net and Net Leverage Ratio
which are non-GAAP financial measures. The Company includes these
non-GAAP financial measures because management believes they are
useful to investors in that they provide for greater transparency
with respect to supplemental information used by management in its
financial and operational decision making. Management uses Adjusted
Net Income, Adjusted EPS and Adjusted EBITDA, which adjust for (i)
certain non-cash items, (ii) certain items we believe are not
indicative of ongoing operating performance or (iii) certain
nonrecurring, unusual or infrequent items to evaluate the Company's
performance in order to have comparable financial results to
analyze changes in our underlying business from period to period.
Additionally, Total Debt Principal, Net and Net Leverage Ratio are
utilized as liquidity measures to assess the cash generation of our
businesses and on-going liquidity position.
Accordingly, the Company believes the presentation of these
non-GAAP financial measures, when used in conjunction with GAAP
financial measures, is a useful financial analysis tool that can
assist investors in assessing the Company's operating performance
and underlying prospects. This analysis should not be considered in
isolation or as a substitute for analysis of our results as
reported under GAAP. This analysis, as well as the other
information in this press release, should be read in conjunction
with the Company's financial statements and footnotes contained in
the documents that the Company files with the U.S. Securities and
Exchange Commission. The non-GAAP financial measures used by the
Company in this press release may be different from the methods
used by other companies. The Company does not provide a
reconciliation of forward-looking non-GAAP financial measures to
the most directly comparable GAAP reported financial measures on a
forward-looking basis because it is unable to predict with
reasonable certainty the ultimate outcome of unusual gains and
losses, potential future asset impairments and pending litigation
without unreasonable effort. These items are uncertain, depend on
various factors, and could have a material impact on GAAP reported
results for the guidance period. For more information on the
non-GAAP financial measures, please refer to the attached schedules
or the table, "Reconciliation of GAAP Financial Measures to
Non-GAAP Financial Measures (Unaudited)" and materials posted to
the Company's website at investors.chemours.com.
Forward-Looking Statements
This press release contains forward-looking statements, within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934, which involve
risks and uncertainties. Forward-looking statements provide current
expectations of future events based on certain assumptions and
include any statement that does not directly relate to a historical
or current fact. The words "believe," "expect," "will,"
"anticipate," "plan," "estimate," "target," "project" and similar
expressions, among others, generally identify "forward-looking
statements," which speak only as of the date such statements were
made. These forward-looking statements may address, among other
things, guidance on Company and segment performance for the fourth
quarter of 2024 and the Company’s strategy. Forward-looking
statements are based on certain assumptions and expectations of
future events that may not be accurate or realized, such as
guidance relying on models based upon management assumptions
regarding future events that are inherently uncertain. These
statements are not guarantees of future performance.
Forward-looking statements also involve risks and uncertainties
including the outcome or resolution of any pending or future
environmental liabilities, the commencement, outcome or resolution
of any regulatory inquiry, investigation or proceeding, the
initiation, outcome or settlement of any litigation, remediation of
material weaknesses and internal control over financial reporting,
changes in environmental regulations in the U.S. or other
jurisdictions that affect demand for or adoption of our products,
anticipated future operating and financial performance for our
segments individually and our company as a whole, business plans,
prospects, targets, goals and commitments, capital investments and
projects and target capital expenditures, efforts to resolve
outstanding or potential litigation, including claims related to
legacy PFAS liabilities, plans for dividends, sufficiency or
longevity of intellectual property protection, cost reductions or
savings targets, plans to increase profitability and growth, our
ability to develop and commercialize new products or technologies
and obtain necessary regulatory approvals, our ability to make
acquisitions, integrate acquired businesses or assets into our
operations, and achieve anticipated synergies or cost savings, all
of which are subject to substantial risks and uncertainties that
could cause actual results to differ materially from those
expressed or implied by such statements. These statements also may
involve risks and uncertainties that are beyond Chemours' control.
Matters outside our control, including general economic conditions,
geopolitical conditions and global health events and weather
events, have affected or may affect our business and operations and
may or may continue to hinder our ability to provide goods and
services to customers, cause disruptions in our supply chains such
as through strikes, labor disruptions or other events, adversely
affect our business partners, significantly reduce the demand for
our products, adversely affect the health and welfare of our
personnel or cause other unpredictable events. Additionally, there
may be other risks and uncertainties that Chemours is unable to
identify at this time or that Chemours does not currently expect to
have a material impact on its business. Factors that could cause or
contribute to these differences include the risks, uncertainties
and other factors discussed in our filings with the U.S. Securities
and Exchange Commission, including in our Quarterly Report on Form
10-Q for the quarter ended September 30, 2024, and in our Annual
Report on Form 10-K for the year ended December 31, 2023. Chemours
assumes no obligation to revise or update any forward-looking
statement for any reason, except as required by law.
The Chemours Company
Consolidated Statements of
Operations (Unaudited)
(Dollars in millions, except per
share amounts)
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
Net sales
$
1,501
$
1,487
$
4,388
$
4,666
Cost of goods sold
1,215
1,214
3,510
3,615
Gross profit
286
273
878
1,051
Selling, general, and administrative
expense
135
165
416
1,067
Research and development expense
29
28
83
82
Restructuring, asset-related, and other
charges
45
126
52
141
Goodwill impairment charge
56
—
56
—
Total other operating expenses
265
319
607
1,290
Equity in earnings of affiliates
11
13
34
38
Interest expense, net
(69
)
(55
)
(197
)
(145
)
Loss on extinguishment of debt
—
(1
)
—
(1
)
Other income, net
7
102
10
100
(Loss) income before income
taxes
(30
)
13
118
(247
)
(Benefit from) provision for income
taxes
(3
)
1
24
(28
)
Net (loss) income
(27
)
12
94
(219
)
Less: Net income attributable to
non-controlling interests
—
—
—
1
Net (loss) income attributable to
Chemours
$
(27
)
$
12
$
94
$
(220
)
Per share data
Basic (loss) earnings per share of common
stock
$
(0.18
)
$
0.08
$
0.63
$
(1.47
)
Diluted (loss) earnings per share of
common stock
(0.18
)
0.08
0.63
(1.47
)
The Chemours Company
Consolidated Balance Sheets
(Unaudited)
(Dollars in millions, except per
share amounts)
September 30, 2024
December 31, 2023
Assets
Current assets:
Cash and cash equivalents
$
596
$
1,203
Restricted cash and restricted cash
equivalents
20
604
Accounts and notes receivable, net
951
610
Inventories
1,438
1,352
Prepaid expenses and other
75
66
Total current assets
3,080
3,835
Property, plant, and equipment
9,545
9,412
Less: Accumulated depreciation
(6,372
)
(6,196
)
Property, plant, and equipment, net
3,173
3,216
Operating lease right-of-use assets
254
260
Goodwill
46
102
Other intangible assets, net
3
3
Investments in affiliates
190
158
Restricted cash and restricted cash
equivalents
50
—
Other assets
667
677
Total assets
$
7,463
$
8,251
Liabilities
Current liabilities:
Accounts payable
$
1,069
$
1,159
Compensation and other employee-related
cost
89
89
Short-term and current maturities of
long-term debt
53
51
Current environmental remediation
119
129
Other accrued liabilities
447
1,058
Total current liabilities
1,777
2,486
Long-term debt, net
3,988
3,987
Operating lease liabilities
196
206
Long-term environmental remediation
448
461
Deferred income taxes
41
44
Other liabilities
354
328
Total liabilities
6,804
7,512
Commitments and contingent liabilities
Equity
Common stock (par value $0.01 per share;
810,000,000 shares authorized; 198,282,108 shares issued and
149,392,660 shares outstanding at September 30, 2024; 197,519,784
shares issued and 148,587,397 shares outstanding at December 31,
2023)
2
2
Treasury stock, at cost (48,889,448 shares
at September 30, 2024 and 48,932,387 at December 31, 2023)
(1,805
)
(1,806
)
Additional paid-in capital
1,050
1,033
Retained earnings
1,763
1,782
Accumulated other comprehensive loss
(353
)
(274
)
Total Chemours stockholders’ equity
657
737
Non-controlling interests
2
2
Total equity
659
739
Total liabilities and equity
$
7,463
$
8,251
The Chemours Company
Consolidated Statements of
Cash Flows (Unaudited)
(Dollars in millions)
Nine Months Ended September
30,
2024
2023
Cash flows from operating
activities
Net income (loss)
$
94
$
(220
)
Adjustments to reconcile net income to
cash used for operating activities:
Depreciation and amortization
223
233
Gain on sales of assets and businesses
(3
)
(106
)
Equity in earnings of affiliates, net
(31
)
(32
)
Loss on extinguishment of debt
—
1
Amortization of debt issuance costs and
issue discounts
9
6
Deferred tax benefit
(34
)
(137
)
Asset-related charges
25
89
Stock-based compensation expense
12
13
Net periodic pension cost
2
8
Defined benefit plan contributions
(9
)
(9
)
Other operating charges and credits,
net
(9
)
(15
)
Goodwill impairment
56
—
Decrease (increase) in operating
assets:
Accounts and notes receivable, net
(348
)
(212
)
Inventories and other current operating
assets
(91
)
71
Other non-current operating assets
48
59
(Decrease) increase in operating
liabilities:
Accounts payable
(95
)
(333
)
Other current operating liabilities
(624
)
660
Other non-current operating
liabilities
4
(2
)
Cash (used for) provided by operating
activities
(771
)
74
Cash flows from investing
activities
Purchases of property, plant, and
equipment
(251
)
(235
)
Proceeds from sales of assets and
businesses
3
138
Foreign exchange contract settlements,
net
—
(8
)
Other investing activities
2
6
Cash used for investing activities
(246
)
(99
)
Cash flows from financing
activities
Proceeds from issuance of debt
—
648
Debt repayments
(13
)
(277
)
Payments of debt issuance cost
—
(4
)
Payments on finance leases
(9
)
(8
)
Proceeds from supplier financing
program
67
70
Payments to supplier financing program
(80
)
(72
)
Purchases of treasury stock, at cost
—
(69
)
Proceeds from exercised stock options,
net
8
18
Payments related to tax withholdings on
vested stock awards
(3
)
(18
)
Payments of dividends to the Company's
common shareholders
(112
)
(112
)
Cash received from non-controlling
interest shareholder
—
1
Other financing activities
21
—
Cash (used for) provided by financing
activities
(121
)
177
Effect of exchange rate changes on cash,
cash equivalents, restricted cash and restricted cash
equivalents
(3
)
(9
)
(Decrease) increase in cash, cash
equivalents, restricted cash and restricted cash
equivalents
(1,141
)
143
Cash, cash equivalents, restricted cash
and restricted cash equivalents at January 1,
1,807
1,304
Cash, cash equivalents, restricted cash
and restricted cash equivalents at September 30,
$
666
$
1,447
Supplemental cash flows
information
Non-cash investing and financing
activities:
Purchases of property, plant, and
equipment included in accounts payable
$
92
$
76
Certain prior period amounts have been revised to correct for
certain immaterial errors impacting previously issued financial
statements, which are more fully described in our Annual Report on
Form 10-K for the year ended December 31, 2023. Certain prior
period amounts have been reclassified to conform to the current
period presentation, the effect of which was not material to the
Company’s interim consolidated financial statements.
The Chemours Company
Segment Financial and
Operating Data (Unaudited)
(Dollars in millions)
Segment Net Sales
Three Months
Ended
Sequential
Three Months Ended September
30,
Increase /
June 30,
Increase /
2024
2023
(Decrease)
2024
(Decrease)
Thermal & Specialized Solutions
$
460
$
436
$
24
$
513
$
(53
)
Titanium Technologies
679
690
(11
)
673
6
Advanced Performance Materials
348
343
5
339
9
Other Segment
14
18
(4
)
13
1
Total Net Sales
$
1,501
$
1,487
$
14
$
1,538
$
(37
)
Segment Adjusted EBITDA
Three Months
Ended
Sequential
Three Months Ended September
30,
Increase /
June 30,
Increase /
2024
2023
(Decrease)
2024
(Decrease)
Thermal & Specialized Solutions
$
141
$
162
$
(21
)
$
161
$
(20
)
Titanium Technologies
$
85
$
69
$
16
$
80
$
5
Advanced Performance Materials
$
39
$
68
$
(29
)
$
45
$
(6
)
Other Segment
$
3
$
2
$
1
$
3
$
—
Quarterly Change in Net Sales from the
three months ended September 30, 2023
September 30,
Percentage Change
2024
vs.
Percentage Change Due
To
Net Sales
September 30, 2023
Price
Volume
Currency
Portfolio
Total Company
$
1,501
1
%
(3
)%
5
%
(1
)%
—
%
Thermal & Specialized Solutions
$
460
6
%
(2
)%
8
%
—
%
—
%
Titanium Technologies
679
(2
)%
(2
)%
1
%
(1
)%
—
%
Advanced Performance Materials
348
1
%
(7
)%
9
%
(1
)%
—
%
Other Segment
14
(22
)%
—
%
14
%
—
%
(36
)%
Quarterly Change in Net Sales from the
three months ended June 30, 2024
September 30,
Percentage Change
2024
vs.
Percentage Change Due
To
Net Sales
June 30, 2024
Price
Volume
Currency
Portfolio
Total Company
$
1,501
(2
)%
—
%
(2
)%
—
%
—
%
Thermal & Specialized Solutions
$
460
(10
)%
(2
)%
(8
)%
—
%
—
%
Titanium Technologies
679
1
%
1
%
—
%
—
%
—
%
Advanced Performance Materials
348
3
%
—
%
3
%
—
%
—
%
Other Segment
14
8
%
8
%
—
%
—
%
—
%
The Chemours Company Reconciliation
of GAAP Financial Measures to Non-GAAP Financial Measures
(Unaudited) (Dollars in millions)
GAAP Net (Loss) Income
Attributable to Chemours to Adjusted Net Income and Adjusted EBITDA
Reconciliation GAAP Net
Leverage Ratio to Non-GAAP Net Leverage Ratio
Reconciliation
Adjusted earnings before interest, taxes, depreciation, and
amortization (“Adjusted EBITDA”) is defined as (loss) income before
income taxes, excluding the following items: interest expense,
depreciation, and amortization; non-operating pension and other
post-retirement employee benefit costs, which represents the
components of net periodic pension costs excluding the service cost
component; exchange (gains) losses included in other income
(expense), net; restructuring, asset-related, and other charges;
(gains) losses on sales of businesses or assets; and, other items
not considered indicative of the Company’s ongoing operational
performance and expected to occur infrequently, including certain
litigation related and environmental charges and Qualified Spend
reimbursable by DuPont and/or Corteva as part of the Company's
cost-sharing agreement under the terms of the MOU that were
previously excluded from Adjusted EBITDA. Adjusted Net Income is
defined as net (loss) income attributable to Chemours, adjusted for
items excluded from Adjusted EBITDA, except interest expense,
depreciation, amortization, and certain provision for (benefit
from) income tax amounts. Net Leverage Ratio is defined as our
total debt principal, net, or our total debt principal outstanding
less unrestricted cash and cash equivalents, divided by Adjusted
EBITDA.
Three Months Ended
Nine Months Ended
Twelve Months Ended
September 30,
June 30,
September 30,
September 30,
2024
2023
2024
2024
2023
2024
2023
(Loss) income before income
taxes
$
(30
)
$
13
$
82
$
118
$
(247
)
$
48
$
(316
)
Net (loss) income attributable to
Chemours
$
(27
)
$
12
$
70
$
94
$
(220
)
$
77
$
(316
)
Non-operating pension and other
post-retirement employee benefit (income) cost
(2
)
1
(2
)
(4
)
1
(6
)
—
Exchange losses, net
—
9
7
6
21
23
47
Restructuring, asset-related, and other
charges (1)
43
127
3
51
142
61
143
Goodwill impairment charge (2)
56
—
—
56
—
56
—
Loss on extinguishment of debt
—
1
—
—
1
—
1
Gain on sales of assets and businesses,
net (3)
—
(106
)
—
(3
)
(106
)
(7
)
(101
)
Transaction costs (4)
—
7
—
—
7
9
7
Qualified spend recovery (5)
(7
)
(11
)
(8
)
(22
)
(43
)
(33
)
(60
)
Litigation-related charges (6)
1
31
(16
)
(15
)
675
74
714
Environmental charges (7)
—
8
—
—
9
—
31
Adjustments made to income taxes (8)
1
(1
)
(4
)
(2
)
(5
)
(15
)
34
(Benefit from) provision for income taxes
relating to reconciling items (9)
(4
)
(13
)
7
5
(104
)
(27
)
(120
)
Adjusted Net Income
61
65
57
166
378
212
380
Net income attributable to non-controlling
interests
—
—
—
—
1
—
1
Interest expense, net
69
55
66
197
145
261
186
Depreciation and amortization
78
76
74
223
233
297
307
All remaining provision for income taxes
(9)
—
15
9
21
81
13
84
Adjusted EBITDA
$
208
$
211
$
206
$
607
$
838
$
783
$
958
Total debt principal
$
4,078
$
4,031
Less: Cash and cash equivalents
(596
)
(852
)
Total debt principal, net
$
3,482
$
3,179
Net Leverage Ratio (calculated using
GAAP earnings) (10)
72.5x
(10.1)x
Net Leverage Ratio (calculated using
Non-GAAP earnings) (10)
4.4x
3.3x
GAAP Net (Loss) Income
Attributable to Chemours to Adjusted Net Income and Adjusted EBITDA
Reconciliation GAAP Net
Leverage Ratio to Non-GAAP Net Leverage Ratio Reconciliation
(Continued)
(1)
For the twelve months ended September 30,
2024, restructuring, asset-related, and other charges primarily
includes charges related to the 2024 Restructuring Program,
Titanium Technologies Transformation Plan and shutdown of a
production line at the Company's El Dorado site. For the twelve
months ended September 30, 2023, restructuring, asset-related, and
other charges primarily includes charges related to the Titanium
Technologies Transformation Plan, 2023 Restructuring Program and
our decision to abandon implementation of our new ERP software
platform. Refer to "Note 5 – Restructuring, Asset-related, and
Other Charges" to the Interim Consolidated Financial Statements in
our Quarterly Report on Form 10-Q for the quarter ended September
30, 2024 for further details.
(2)
Represents a non-cash goodwill impairment
charge in the Advanced Performance Materials reporting unit, which
is discussed further in "Note 11 – Goodwill and Other Intangibles,
Net" to the Interim Consolidated Financial Statements in our
Quarterly Report on Form 10-Q for the quarter ended September 30,
2024.
(3)
For the twelve months ended September 30,
2024, gain on sales of assets and businesses, net includes pre-tax
gain on sale of $106 million related to the Glycolic Acid
Transaction. Refer to "Note 5 – Restructuring, Asset-related, and
Other Charges" to the Interim Consolidated Financial Statements in
our Quarterly Report on Form 10-Q for the quarter ended September
30, 2024 for further details.
(4)
For the twelve months ended September 30,
2024, transaction costs includes $9 million of third-party costs
related to the Titanium Technologies Transformation Plan. For the
twelve months ended September 30, 2023, transaction costs includes
$7 million of costs associated with the New Senior Secured Credit
Facilities entered into during 2023, which is discussed in further
detail in "Note 20 – Debt" to the Consolidated Financial Statements
in our Annual Report on Form 10-K.
(5)
Qualified spend recovery represents costs
and expenses that were previously excluded from Adjusted EBITDA,
reimbursable by DuPont and/or Corteva as part of our cost-sharing
agreement under the terms of the MOU which is discussed in further
detail in "Note 18 – Commitments and Contingent Liabilities" to the
Interim Consolidated Financial Statements in our Quarterly Report
on Form 10-Q for the quarter ended September 30, 2024.
(6)
Litigation-related charges pertains to
litigation settlements, PFOA drinking water treatment accruals, and
other related legal fees. For the twelve months ended September 30,
2024, litigation-related charges primarily includes a $29 million
accrual related to the Ohio MDL, $44 million of benefits related to
insurance recoveries, $55 million of charges related to the
Company's portion of Chemours, DuPont, Corteva, EID and the State
of Ohio's agreement entered into in November 2023, $13 million
related to the Company's portion of the supplemental payment to the
State of Delaware, $18 million for other PFAS litigation matters,
and $3 million of other litigation matters. For the twelve months
ended September 30, 2023, litigation-related charges primarily
includes the $592 million accrual related to the United States
Public Water System Class Action Suit Settlement plus $24 million
of third-party legal fees directly related to the settlement, $20
million associated with the Company's portion of the potential loss
in the single matter not included in the Leach settlement, $60
million for other PFAS litigation matters and $17 million of other
litigation matters. See "Note 18 – Commitments and Contingent
Liabilities" to the Interim Consolidated Financial Statements in
our Quarterly Report on Form 10-Q for the quarter ended September
30, 2024.
(7)
Environmental charges pertains to
management’s assessment of estimated liabilities associated with
certain environmental remediation expenses at various sites. For
the twelve months ended September 30, 2023, environmental charges
include $19 million related to off-site remediation costs at
Fayetteville. See "Note 18 – Commitments and Contingent
Liabilities" to the Interim Consolidated Financial Statements in
our Quarterly Report on Form 10-Q for the quarter ended September
30, 2024.
(8)
Includes the removal of certain discrete
income tax impacts within our provision for income taxes, such as
shortfalls and windfalls on our share-based payments, certain
return-to-accrual adjustments, valuation allowance adjustments,
unrealized gains and losses on foreign exchange rate changes, and
other discrete income tax items.
(9)
The income tax impacts included in this
caption are determined using the applicable rates in the taxing
jurisdictions in which income or expense occurred for each of the
reconciling items and represent both current and deferred income
tax expense or benefit based on the nature of the non-GAAP
financial measure.
(10)
Net Leverage Ratio calculated using GAAP
measures is defined as our total debt principal, net, or our total
debt principal outstanding less unrestricted cash and cash
equivalents, divided by (loss) income before income taxes. Net
Leverage Ratio calculated using non-GAAP measures is defined as our
total debt principal, net, or our total debt principal outstanding
less unrestricted cash and cash equivalents, divided by Adjusted
EBITDA.
Reconciliation of GAAP Financial Measures to
Non-GAAP Financial Measures (Unaudited) (Dollars in millions,
except per share amounts)
GAAP (Loss) Earnings
per Share to Adjusted Earnings per Share
Reconciliation
Adjusted earnings per share (“Adjusted EPS”) is calculated by
dividing Adjusted Net Income by the weighted-average number of
common shares outstanding. Diluted Adjusted EPS accounts for the
dilutive impact of stock-based compensation awards, which includes
unvested restricted shares. Diluted Adjusted EPS considers the
impact of potentially-dilutive securities, except in periods in
which there is a loss because the inclusion of the
potentially-dilutive securities would have an anti-dilutive
effect.
Three Months Ended
Nine Months Ended
September 30,
June 30,
September 30,
2024
2023
2024
2024
2023
Numerator:
Net (loss) income attributable to
Chemours
$
(27)
$
12
$
70
$
94
$
(220)
Adjusted Net Income
61
65
57
166
378
Denominator:
Weighted-average number of common shares
outstanding - basic
149,697,616
148,623,633
149,413,167
149,383,146
148,929,580
Dilutive effect of the Company's employee
compensation plans (1)
482,579
1,562,005
709,893
735,880
1,753,788
Weighted-average number of common shares
outstanding - diluted (1)
150,180,195
150,185,638
150,123,060
150,119,026
150,683,368
Basic (loss) earnings per share of common
stock (2)
$
(0.18)
$
0.08
$
0.47
$
0.63
$
(1.47)
Diluted (loss) earnings per share of
common stock (1) (2)
(0.18)
0.08
0.46
0.63
(1.47)
Adjusted basic earnings per share of
common stock (2)
0.40
0.44
0.38
1.11
2.55
Adjusted diluted earnings per share of
common stock (1) (2)
0.40
0.43
0.38
1.10
2.52
(1)
In periods where the Company incurs a net
loss, the impact of potentially dilutive securities is excluded
from the calculation of EPS under U.S. GAAP, as their inclusion
would have an anti-dilutive effect. As such, with respect to the
U.S. GAAP measure of diluted EPS, the impact of potentially
dilutive securities is excluded from our calculation for the three
months ended September 30, 2024 and nine months ended September 30,
2023. With respect to the non-GAAP measure of adjusted diluted EPS,
the impact of potentially dilutive securities is included in our
calculation for the three months ended September 30, 2024 and nine
months ended September 30, 2023 as Adjusted Net Income was in a net
income position.
(2)
Figures may not recalculate exactly due to
rounding. Basic and diluted (loss) earnings per share are
calculated based on unrounded numbers.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241104977465/en/
INVESTORS Brandon Ontjes Vice President, Investor
Relations +1.302.773.3309 investor@chemours.com
Kurt Bonner Manager, Investor Relations +1.302.773.0026
investor@chemours.com
NEWS MEDIA Cassie Olszewski Media Relations &
Reputation Leader +1.302.219.7140 media@chemours.com
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