WYNYARD, UK, May 6, 2021 /PRNewswire/ --
First Quarter 2021 Highlights
- Net loss attributable to Venator of $21
million compared to net income attributable to Venator of
$7 million in the prior year
period
- Adjusted EBITDA of $49 million
compared to $57 million and
$25 million in the first and fourth
quarters of 2020, respectively
- Net cash used in operating activities of $15 million and free cash out flow of
$30 million
- Diluted loss per share of $0.20
and adjusted diluted earnings per share of $0.01
- Compared to the fourth quarter of 2020, average TiO2
selling prices increased 3% in local currency and TiO2
sales volumes increased 14%
- During April 2021, we signed an
agreement to sell our Water Treatment business to Feralco Group for
approximately $6 million cash
|
|
Three months
ended
|
|
|
March
31,
|
|
December 31,
2020
|
|
(In millions, except per share amounts)
|
|
2021
|
|
2020
|
|
|
Revenues
|
|
$
|
553
|
|
|
$
|
532
|
|
|
$
|
476
|
|
|
|
|
|
|
|
|
|
Net (loss) income
attributable to Venator
|
|
$
|
(21)
|
|
|
$
|
7
|
|
|
$
|
(58)
|
|
|
Adjusted net income
(loss) attributable to Venator(1)
|
|
$
|
1
|
|
|
$
|
12
|
|
|
$
|
(13)
|
|
|
Adjusted
EBITDA(1)
|
|
$
|
49
|
|
|
$
|
57
|
|
|
$
|
25
|
|
|
|
|
|
|
|
|
|
Diluted (loss)
earnings per share (4)
|
|
$
|
(0.20)
|
|
|
$
|
0.07
|
|
|
$
|
(0.54)
|
|
|
Adjusted diluted
earnings (loss) per share(1)
|
|
$
|
0.01
|
|
|
$
|
0.11
|
|
|
$
|
(0.12)
|
|
|
|
|
|
|
|
|
|
Net cash (used in)
provided by operating activities
|
|
$
|
(15)
|
|
|
$
|
(58)
|
|
|
$
|
34
|
|
|
Free cash
flow(3)
|
|
$
|
(30)
|
|
|
$
|
(85)
|
|
|
$
|
13
|
|
|
|
See end of press
release for footnote explanations
|
Venator Materials PLC ("Venator") (NYSE: VNTR) today reported
first quarter 2021 results with revenues of $553 million, net loss attributable to Venator of
$21 million, adjusted net income
attributable to Venator of $1 million
and adjusted EBITDA of $49
million.
Simon Turner, President and
CEO of Venator, commented:
"We have seen a strong start to the year and our first quarter
results are encouraging. Demand was robust across all products and
regions and we delivered approximately $9
million of benefit from our 2020 business improvement
program.
TiO2 fundamentals are favorable; in the first quarter
our average selling prices increased 3% in local currency compared
to the fourth quarter of 2020. We expect to see higher raw material
and input costs during the year; however, we believe strong market
conditions will enable us to manage margins through further
TiO2 selling price increases.
Our Performance Additives segment EBITDA improved by
$8 million compared to the fourth
quarter of 2020. Positive construction and home improvement trends
continued in the first quarter, and we saw further recovery for
products used in automotive end markets.
During April 2021, we signed an
agreement to sell our Water Treatment business to Feralco Group for
approximately $6 million. They are a
more natural long-term owner of the business, which will benefit
its customers and associates. This divestiture enables Venator to
unlock value from a non-core element of our enterprise."
Segment Analysis for 1Q21 Compared to 1Q20
Titanium Dioxide
The Titanium Dioxide segment
generated revenues of $414 million
for the three months ended March 31,
2021, an increase of $12
million, or 3%, compared to the same period in 2020. The
increase was primarily due to a 6% favorable impact from foreign
currency translation, primarily between the Euro and the U.S.
Dollar, partially offset by a 1% decline in TiO2 sales
volumes, a 1% decrease in average local currency selling prices and
a 1% unfavorable impact due to mix and other.
Adjusted EBITDA for the Titanium Dioxide segment was
$40 million for the three months
ended March 31, 2021, a decrease of
$6 million, or 13%, compared to the
same period in 2020. The decrease was primarily attributable to an
$11 million increase from higher raw
material, energy and shipping costs, partially offset by
$5 million of benefits from our 2020
business improvement program and $3
million net benefit from foreign currency translation.
Performance Additives
The Performance Additives
segment generated revenues of $139
million for the three months ended March 31, 2021, an increase of $9 million, or 7%, compared to the same period in
2020. The increase was primarily attributable to a 4% favorable
impact of foreign currency translation, primarily between the Euro
and the U.S. Dollar, a 2% favorable impact of mix and other and a
1% increase in volumes.
Adjusted EBITDA for the Performance Additives segment was
$23 million for the three months
ended March 31, 2021, an increase of
$1 million, or 5%, compared to the
same period in 2020. The increase was primarily attributable to the
increase in sales during the period and $2
million of benefits from our 2020 business improvement
program, partially offset by the negative overall impact of foreign
currency translation on our costs.
Corporate and other
Corporate and other represents
expenses which are not allocated to our segments. Losses from
Corporate and other were $14 million
in the three months ended March 31,
2021, or $3 million higher
compared to the same period in 2020. This was primarily due to an
increase in personnel costs in the first quarter of 2021 compared
to the same period of 2020, driven by the timing of payments, and
an unfavorable variance in foreign exchange rates compared to the
prior year, partially offset by $2
million of benefit from our 2020 business improvement
program.
Tax Items
We recorded income tax expense of
$5 million for the three months ended
March 31, 2021 and a $2 million
benefit for the three months ended March 31,
2020. Our adjusted effective tax rate was 35% for both the
three months ended March 31, 2021 and the same period in
2020.
Our income taxes are significantly affected by the mix of income
and losses in the tax jurisdictions and valuation allowances in
certain jurisdictions in which we operate. In 2021, we expect to
see an adjusted effective tax rate of approximately 35%. We
continue to expect our adjusted effective tax rate in the long-term
will be approximately 15% to 20%.
Liquidity and Capital Resources
As of March
31, 2021, we had $434 million of total liquidity. This
includes cash and cash equivalents of $187
million and $247 million of availability under our
existing asset-based revolving credit facility. At the end of the
first quarter, net debt was $769
million compared to $737
million as of December 31,
2020.
Capital expenditures totaled $12
million in the first quarter of 2021. We expect total
capital expenditures in 2021 to be approximately $75 million to $85
million.
Earnings Conference Call Information
We will hold a conference call to discuss our first quarter 2021
results on Thursday, May 6, 2021 at
8:00 a.m. ET.
|
|
Call-in numbers for
the conference call:
|
|
|
|
U.S.
participants
|
1-833-366-1118
|
|
|
International
participants
|
1-412-902-6770
|
|
|
(No passcode
required)
|
|
In order to facilitate the registration process, you may use the
following link to pre-register for the conference call. Callers who
pre-register will be given a unique PIN and separate call-in number
to gain immediate access to the call and bypass the live operator.
To pre-register, please go to:
https://dpregister.com/sreg/10153214/e4f55fbc56
Webcast Information
The conference call will be
available via webcast and can be accessed from the company's
website at venatorcorp.com/investor-relations.
Replay Information
The conference call will be
available for replay beginning May 6,
2021 and ending May 13,
2021.
|
|
Call-in numbers for
the replay:
|
|
|
|
U.S.
participants
|
1-877-344-7529
|
|
|
International
participants
|
1-412-317-0088
|
|
|
Passcode
|
10153214
|
Upcoming Conferences
During the second quarter of
2021, a member of management is expected to present at Vertical
Research Partners 2021 Virtual Conference May 25, 2021, Deutsche Bank's 12th Annual Global
Basic Materials Conference (Virtual) on June
9, 2021 and the BMO 2021 Chemicals and Packaging Conference
(Virtual) June 23, 2021. A webcast of
the presentations, if applicable, along with accompanying materials
will be available at venatorcorp.com/investor-relations.
|
Table 1 — Results
of Operations
|
|
|
|
Three months
ended
|
|
|
March
31,
|
|
(In millions, except per share amounts)
|
|
2021
|
|
2020
|
|
Revenues
|
|
$
|
553
|
|
|
$
|
532
|
|
|
Cost of goods
sold
|
|
500
|
|
|
471
|
|
|
Operating
expenses
|
|
44
|
|
|
42
|
|
|
Restructuring,
impairment and plant closing and transition costs
|
|
14
|
|
|
7
|
|
|
Operating (loss)
income
|
|
(5)
|
|
|
12
|
|
|
Interest expense,
net
|
|
(15)
|
|
|
(10)
|
|
|
Other
income
|
|
5
|
|
|
4
|
|
|
(Loss) income
before income taxes
|
|
(15)
|
|
|
6
|
|
|
Income tax (expense)
benefit
|
|
(5)
|
|
|
2
|
|
|
Net (loss)
income
|
|
(20)
|
|
|
8
|
|
|
Net income
attributable to noncontrolling interests
|
|
(1)
|
|
|
(1)
|
|
|
Net (loss) income
attributable to Venator
|
|
$
|
(21)
|
|
|
$
|
7
|
|
|
|
|
|
|
|
Adjusted
EBITDA(1)
|
|
$
|
49
|
|
|
$
|
57
|
|
|
Adjusted net
income(1)
|
|
$
|
1
|
|
|
$
|
12
|
|
|
|
|
|
|
|
Basic (loss)
earnings per share
|
|
$
|
(0.20)
|
|
|
$
|
0.07
|
|
|
Diluted (loss)
earnings per share(4)
|
|
$
|
(0.20)
|
|
|
$
|
0.07
|
|
|
Adjusted earnings
per share(1)
|
|
$
|
0.01
|
|
|
$
|
0.11
|
|
|
Adjusted diluted
earnings per share(1)
|
|
$
|
0.01
|
|
|
$
|
0.11
|
|
|
|
|
|
|
|
Ordinary share
information:
|
|
|
|
|
|
Basic shares
outstanding
|
|
107.1
|
|
|
106.7
|
|
|
Diluted
shares(4)
|
|
107.7
|
|
|
106.7
|
|
|
|
See end of press
release for footnote explanations
|
|
Table 2 — Results
of Operations by Segment
|
|
|
|
Three months
ended
|
|
|
|
|
March
31,
|
|
Favorable
/
|
|
(In millions)
|
|
2021
|
|
2020
|
|
(Unfavorable)
|
|
Segment
Revenues:
|
|
|
|
|
|
|
|
Titanium
Dioxide
|
|
$
|
414
|
|
|
$
|
402
|
|
|
3%
|
|
Performance
Additives
|
|
139
|
|
|
130
|
|
|
7%
|
|
Total
|
|
$
|
553
|
|
|
$
|
532
|
|
|
4%
|
|
|
|
|
|
|
|
|
Segment Adjusted
EBITDA(1):
|
|
|
|
|
|
|
|
Titanium
Dioxide
|
|
$
|
40
|
|
|
$
|
46
|
|
|
(13)%
|
|
Performance
Additives
|
|
23
|
|
|
22
|
|
|
5%
|
|
Corporate and
other
|
|
(14)
|
|
|
(11)
|
|
|
(27)%
|
|
Total
|
|
$
|
49
|
|
|
$
|
57
|
|
|
(14)%
|
|
|
See end of press
release for footnote explanations
|
|
Table 3 — Factors
Impacting Sales Revenue
|
|
|
Three months
ended
|
|
March 31, 2021 vs.
2020
|
|
Average Selling Price(a)
|
|
|
|
|
|
|
|
Local
Currency
|
|
Exchange
Rate
|
|
Sales Mix
& Other
|
|
Sales
Volume(b)
|
|
Total
|
|
Titanium
Dioxide
|
(1)%
|
|
6%
|
|
(1)%
|
|
(1)%
|
|
3%
|
|
Performance
Additives
|
—%
|
|
4%
|
|
2%
|
|
1%
|
|
7%
|
|
Total
Company
|
(1)%
|
|
6%
|
|
—%
|
|
(1)%
|
|
4%
|
|
|
|
(a)
|
Excludes revenues
from tolling arrangements, by-products and raw materials
|
|
(b)
|
Excludes sales
volumes of by-products and raw materials
|
|
Table 4 —
Reconciliation of U.S. GAAP to Non-GAAP Measures
|
|
|
|
EBITDA
|
|
Net Income
(Loss)
|
|
Diluted
Earnings
(Loss) Per
Share(1)(4)
|
|
|
Three months
ended
|
|
Three months
ended
|
|
Three months
ended
|
|
|
March
31,
|
|
March
31,
|
|
March
31,
|
|
(In millions, except per share amounts)
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
Net (loss)
income
|
|
$
|
(20)
|
|
|
$
|
8
|
|
|
$
|
(20)
|
|
|
$
|
8
|
|
|
$
|
(0.18)
|
|
|
$
|
0.08
|
|
|
Net income
attributable to noncontrolling interests
|
|
(1)
|
|
|
(1)
|
|
|
(1)
|
|
|
(1)
|
|
|
(0.01)
|
|
|
(0.01)
|
|
|
Net (loss) income
attributable to Venator
|
|
(21)
|
|
|
7
|
|
|
(21)
|
|
|
7
|
|
|
(0.19)
|
|
|
0.07
|
|
|
Interest expense,
net
|
|
15
|
|
|
10
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit)
|
|
5
|
|
|
(2)
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
31
|
|
|
28
|
|
|
|
|
|
|
|
|
|
|
Business acquisition
and integration adjustments
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
0.01
|
|
|
Loss on disposal of
businesses/assets
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
0.02
|
|
|
Certain legal
expenses/settlements
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
0.01
|
|
|
—
|
|
|
Amortization of
pension and postretirement actuarial losses
|
|
3
|
|
|
3
|
|
|
3
|
|
|
3
|
|
|
0.03
|
|
|
0.03
|
|
|
Net plant incident
costs
|
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
0.01
|
|
|
0.01
|
|
|
Restructuring,
impairment, plant closing and transition costs
|
|
14
|
|
|
7
|
|
|
14
|
|
|
7
|
|
|
0.13
|
|
|
0.06
|
|
|
Income tax
adjustments(2)
|
|
—
|
|
|
—
|
|
|
3
|
|
|
(9)
|
|
|
0.03
|
|
|
(0.09)
|
|
|
Adjusted(1)
|
|
$
|
49
|
|
|
$
|
57
|
|
|
$
|
1
|
|
|
$
|
12
|
|
|
$
|
0.01
|
|
|
$
|
0.11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted income tax
expense(2)
|
|
|
|
|
|
$
|
2
|
|
|
$
|
7
|
|
|
|
|
|
|
Net income
attributable to noncontrolling interests, net of tax
|
|
|
|
|
|
1
|
|
|
1
|
|
|
|
|
|
|
Adjusted pre-tax
income
|
|
|
|
|
|
$
|
4
|
|
|
$
|
20
|
|
|
|
|
|
|
Adjusted effective
tax rate
|
|
|
|
|
|
35
|
%
|
|
35
|
%
|
|
|
|
|
|
|
|
|
EBITDA
|
|
Net Income
(Loss)
|
|
Diluted
Earnings
(Loss) Per
Share(1)
|
|
|
Three months
ended
December 31,
|
|
Three months
ended
December 31,
|
|
Three months
ended
December 31,
|
|
(In millions, except per share amounts)
|
|
2020
|
|
2020
|
|
2020
|
|
Net
loss
|
|
$
|
(57)
|
|
|
$
|
(57)
|
|
|
$
|
(0.53)
|
|
|
Net income
attributable to noncontrolling interests
|
|
(1)
|
|
|
(1)
|
|
|
(0.01)
|
|
|
Net loss
attributable to Venator
|
|
(58)
|
|
|
(58)
|
|
|
(0.54)
|
|
|
Interest expense,
net
|
|
15
|
|
|
|
|
|
|
Income tax
benefit
|
|
9
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
29
|
|
|
|
|
|
|
Business acquisition
and integration expenses
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Separation
gain
|
|
(10)
|
|
|
(10)
|
|
|
(0.09)
|
|
|
Gain on disposal of
businesses/assets
|
|
(1)
|
|
|
(1)
|
|
|
(0.01)
|
|
|
Certain legal
expenses/settlements
|
|
3
|
|
|
3
|
|
|
0.03
|
|
|
Amortization of
pension and postretirement actuarial losses
|
|
3
|
|
|
3
|
|
|
0.03
|
|
|
Net plant incident
costs
|
|
2
|
|
|
2
|
|
|
0.02
|
|
|
Restructuring,
impairment, plant closing and transition costs
|
|
33
|
|
|
33
|
|
|
0.31
|
|
|
Income tax
adjustments(2)
|
|
—
|
|
|
15
|
|
|
0.14
|
|
|
Adjusted(1)
|
|
$
|
25
|
|
|
$
|
(13)
|
|
|
$
|
(0.12)
|
|
|
|
|
|
|
|
|
|
Adjusted income tax
expense(2)
|
|
|
|
$
|
(6)
|
|
|
|
|
Net income
attributable to noncontrolling interests, net of tax
|
|
|
|
1
|
|
|
|
|
Adjusted pre-tax
loss
|
|
|
|
$
|
(18)
|
|
|
|
|
Adjusted effective
tax rate
|
|
|
|
35
|
%
|
|
|
|
|
See end of press
release for footnote explanations
|
|
Table 5 — Selected
Balance Sheet Items
|
|
|
|
March
31,
|
|
December
31,
|
|
(In millions)
|
|
2021
|
|
2020
|
|
Cash and cash
equivalents
|
|
$
|
187
|
|
|
$
|
220
|
|
|
Accounts and notes
receivable, net
|
|
366
|
|
|
324
|
|
|
Inventories
|
|
439
|
|
|
440
|
|
|
Prepaid expenses and
other current assets
|
|
65
|
|
|
73
|
|
|
Property, plant and
equipment, net
|
|
907
|
|
|
947
|
|
|
Other
assets
|
|
369
|
|
|
353
|
|
|
Total
assets
|
|
$
|
2,333
|
|
|
$
|
2,357
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
303
|
|
|
$
|
262
|
|
|
Other current
liabilities
|
|
108
|
|
|
126
|
|
|
Current portion of
debt
|
|
7
|
|
|
7
|
|
|
Long-term
debt
|
|
949
|
|
|
950
|
|
|
Non-current payable
to affiliates
|
|
17
|
|
|
17
|
|
|
Other non-current
liabilities
|
|
352
|
|
|
371
|
|
|
Total
equity
|
|
597
|
|
|
624
|
|
|
Total liabilities
and equity
|
|
$
|
2,333
|
|
|
$
|
2,357
|
|
|
Table 6 —
Outstanding Debt
|
|
|
|
March
31,
|
|
December
31,
|
|
(In millions)
|
|
2021
|
|
2020
|
|
Debt:
|
|
|
|
|
|
Term Loan
Facility
|
|
$
|
358
|
|
|
$
|
359
|
|
|
Senior Secured
Notes
|
|
215
|
|
|
215
|
|
|
Senior Unsecured
Notes
|
|
372
|
|
|
372
|
|
|
Other debt
|
|
11
|
|
|
11
|
|
|
Total debt -
excluding affiliates
|
|
956
|
|
|
957
|
|
|
Total cash
|
|
187
|
|
|
220
|
|
|
Net debt -
excluding affiliates
|
|
$
|
769
|
|
|
$
|
737
|
|
|
Table 7 —
Summarized Statement of Cash Flows
|
|
|
|
Three months
ended
|
|
|
March
31,
|
|
(In millions)
|
|
2021
|
|
2020
|
|
Total cash at
beginning of period
|
|
$
|
220
|
|
|
$
|
55
|
|
|
Net cash used in
operating activities
|
|
(15)
|
|
|
(58)
|
|
|
Net cash used in
investing activities
|
|
(15)
|
|
|
(27)
|
|
|
Net cash (used in)
provided by financing activities
|
|
(2)
|
|
|
56
|
|
|
Effect of exchange
rate changes on cash
|
|
(1)
|
|
|
(1)
|
|
|
Total cash at end
of period
|
|
$
|
187
|
|
|
$
|
25
|
|
|
Supplemental cash
flow information:
|
|
|
|
|
|
Cash paid for
interest
|
|
$
|
(28)
|
|
|
$
|
(16)
|
|
|
Cash paid for income
taxes
|
|
—
|
|
|
—
|
|
|
Capital
expenditures
|
|
(12)
|
|
|
(31)
|
|
|
Depreciation and
amortization
|
|
31
|
|
|
28
|
|
|
|
|
|
|
|
Changes in primary
working capital:
|
|
|
|
|
|
Accounts
receivable
|
|
(50)
|
|
|
(62)
|
|
|
Inventories
|
|
(7)
|
|
|
9
|
|
|
Accounts
payable
|
|
47
|
|
|
(20)
|
|
|
Total cash used in
primary working capital
|
|
$
|
(10)
|
|
|
$
|
(73)
|
|
|
|
|
|
Three months
ended
|
|
|
March
31,
|
|
(In
millions)
|
|
2021
|
|
2020
|
|
Free cash
flow(3):
|
|
|
|
|
|
Net cash used in
operating activities
|
|
$
|
(15)
|
|
|
$
|
(58)
|
|
|
Capital
expenditures
|
|
(12)
|
|
|
(31)
|
|
|
Other investing
activities
|
|
(3)
|
|
|
4
|
|
|
Total free cash
flow(3)
|
|
$
|
(30)
|
|
|
$
|
(85)
|
|
|
|
|
|
|
|
Adjusted
EBITDA(1)
|
|
$
|
49
|
|
|
$
|
57
|
|
|
Capital expenditures
excluding cash paid for Pori rebuild
|
|
(12)
|
|
|
(30)
|
|
|
Cash paid for
interest
|
|
(28)
|
|
|
(16)
|
|
|
Cash paid for income
taxes
|
|
—
|
|
|
—
|
|
|
Primary working
capital change
|
|
(10)
|
|
|
(73)
|
|
|
Restructuring
|
|
(3)
|
|
|
(4)
|
|
|
Pension &
other
|
|
(22)
|
|
|
(18)
|
|
|
Net cash flows
associated with Pori
|
|
(4)
|
|
|
(1)
|
|
|
Total free cash
flow(3)
|
|
$
|
(30)
|
|
|
$
|
(85)
|
|
|
|
See end of press
release for numbered footnote explanations
|
|
Footnotes
|
|
(1)
|
Our management uses
adjusted EBITDA to assess financial performance. Adjusted EBITDA is
defined as net income/loss before interest income/expense, net,
income tax expense/benefit, depreciation and amortization, and net
income attributable to noncontrolling interests, as well as
eliminating the following adjustments: (a) business acquisition and
integration expense/adjustments; (b) loss/gain on disposition of
businesses/assets; (c) certain legal expenses/settlements; (d)
amortization of pension and postretirement actuarial losses/gains;
(e) net plant incident costs/credits; and (f) restructuring,
impairment, and plant closing and transition costs/credits. We
believe that net income is the performance measure calculated and
presented in accordance with U.S. GAAP that is most directly
comparable to adjusted EBITDA.
|
|
|
|
We believe adjusted
EBITDA is useful to investors in assessing our ongoing financial
performance and provides improved comparability between periods
through the exclusion of certain items that management believes are
not indicative of our operational profitability and that may
obscure underlying business results and trends. However, this
measure should not be considered in isolation or viewed as a
substitute for net income or other measures of performance
determined in accordance with U.S. GAAP. Moreover, adjusted EBITDA
as used herein is not necessarily comparable to other similarly
titled measures of other companies due to potential inconsistencies
in the methods of calculation. Our management believes this measure
is useful to compare general operating performance from period to
period and to make certain related management decisions. Adjusted
EBITDA is also used by securities analysts, lenders and others in
their evaluation of different companies because it excludes certain
items that can vary widely across different industries or among
companies within the same industry. For example, interest expense
can be highly dependent on a company's capital structure, debt
levels and credit ratings. Therefore, the impact of interest
expense on earnings can vary significantly among companies. In
addition, the tax positions of companies can vary because of their
differing abilities to take advantage of tax benefits and because
of the tax policies of the various jurisdictions in which they
operate. As a result, effective tax rates and tax expense can vary
considerably among companies. Finally, companies employ productive
assets of different ages and utilize different methods of acquiring
and depreciating such assets. This can result in considerable
variability in the relative costs of productive assets and the
depreciation and amortization expense among companies.
|
|
|
|
Nevertheless, our
management recognizes that there are limitations associated with
the use of adjusted EBITDA in the evaluation of us as compared to
net income. Our management compensates for the limitations of using
adjusted EBITDA by using this measure to supplement U.S. GAAP
results to provide a more complete understanding of the factors and
trends affecting the business rather than U.S. GAAP results
alone.
|
|
|
|
In addition to the
limitations noted above, adjusted EBITDA excludes items that may be
recurring in nature and should not be disregarded in the evaluation
of performance. However, we believe it is useful to exclude such
items to provide a supplemental analysis of current results and
trends compared to other periods because certain excluded items can
vary significantly depending on specific underlying transactions or
events, and the variability of such items may not relate
specifically to ongoing operating results or trends and certain
excluded items, while potentially recurring in future periods, may
not be indicative of future results.
|
|
|
|
Adjusted net income
(loss) attributable to Venator Materials PLC ordinary shareholders
is computed by eliminating the after-tax amounts related to the
following from net income/loss attributable to Venator Materials
PLC ordinary shareholders: (a) business acquisition and integration
expenses/adjustments; (b) loss/gain on disposition of
businesses/assets; (c) certain legal expenses/settlements; (d)
amortization of pension and postretirement actuarial losses/gains;
(e) net plant incident costs/credits; and (f) restructuring,
impairment, and plant closing and transition costs/credits. Basic
adjusted net income per share excludes dilution and is computed by
dividing adjusted net income by the weighted average number of
shares outstanding during the period. Adjusted diluted net income
per share reflects all potential dilutive ordinary shares
outstanding during the period increased by the number of additional
shares that would have been outstanding as dilutive
securities.
|
|
|
|
Adjusted net income
(loss) and adjusted net income (loss) per share amounts are
presented solely as supplemental information. These measures
exclude similar noncash items as Adjusted EBITDA in order to assist
our investors in comparing our performance from period to period
and as such, bear similar risks as Adjusted EBITDA as documented
above. For that reason, adjusted net income and the related per
share amounts, should not be considered in isolation and should be
considered only to supplement analysis of U.S. GAAP
results.
|
|
|
|
(2)
|
Income tax expense is
adjusted by the amount of additional tax expense or benefit that we
would accrue if we used non-GAAP results instead of GAAP results in
the calculation of our tax liability, taking into consideration our
tax structure. We use a normalized effective tax rate of 35%, which
reflects the weighted average tax rate applicable under the various
jurisdictions in which we operate. This non-GAAP tax rate
eliminates the effects of non-recurring and period specific items
which are often attributable to restructuring and acquisition
decisions and can vary in size and frequency. This rate is subject
to change over time for various reasons, including changes in the
geographic business mix, valuation allowances, and changes in
statutory tax rates.
|
|
|
|
We eliminate the
effect of significant changes to income tax valuation allowances
from our presentation of adjusted net income to allow investors to
better compare our ongoing financial performance from period to
period. We do not adjust for insignificant changes in tax valuation
allowances because we do not believe it provides more meaningful
information than is provided under GAAP. We believe that our
revised approach enables a clearer understanding of the long-term
impact of our tax structure on post tax earnings.
|
|
|
|
(3)
|
Management internally
uses a free cash flow measure: (a) to evaluate the Company's
liquidity, (b) to evaluate strategic investments, (c) to evaluate
the Company's ability to incur and service debt. Free cash flow is
not a defined term under U.S. GAAP, and it should not be inferred
that the entire free cash flow amount is available for
discretionary expenditures. The Company defines free cash flow as
cash flows provided by (used in) operating activities from
continuing operations and used in investing activities. Free cash
flow is typically derived directly from the Company's consolidated
statement of cash flows; however, it may be adjusted for items that
affect comparability between periods. Free cash flow is presented
as supplemental information.
|
|
|
|
(4)
|
The potentially
dilutive impact of share-based awards was excluded from the
calculation of earnings per share for the three months ended March
31, 2021 because there is an anti-dilutive effect as we are in a
net loss position.
|
About Venator
Venator is a global manufacturer and
marketer of chemical products that comprise a broad range of
pigments and additives that bring color and vibrancy to buildings,
protect and extend product life, and reduce energy consumption. We
market our products globally to a diversified group of industrial
customers through two segments: Titanium Dioxide, which consists of
our TiO2 business, and Performance Additives, which
consists of our functional additives, color pigments, timber
treatment and water treatment businesses. Based in Wynyard, U.K., Venator employs approximately
3,700 associates and sells its products in more than 120
countries.
Social
Media:
Twitter:
www.twitter.com/VenatorCorp
Facebook: www.facebook.com/venatorcorp
LinkedIn: www.linkedin.com/company/venator-corp
Cautionary Statement Concerning Forward-Looking
Statements
Certain statements contained in this press
release constitute "forward looking statements" within the meaning
of the U.S. Private Securities Litigation Reform Act of 1995. These
forward looking statements represent Venator's expectations or
beliefs concerning future events, and it is possible that the
expected results described in this press release will not be
achieved. These forward looking statements are subject to risks,
uncertainties and other factors, many of which are outside of
Venator's control, that could cause actual results to differ
materially from the results discussed in the forward looking
statements, including the impacts and duration of the global
outbreak of the COVID-19 pandemic on the global economy and all
aspects of our business, including our employees, customers,
suppliers, partners, results of operations, financial condition and
liquidity, global economic conditions, our ability to maintain
sufficient working capital, our ability to access capital markets
on favorable terms, our ability to transfer business from our Pori,
Finland manufacturing facility to
other sites in our manufacturing network, the costs associated with
such transfer and the closure of our Pori facility, our ability to
realize financial and operational benefits from our business
improvement plans and initiatives, changes in raw material and
energy prices, or interruptions in raw materials and energy,
industry production capacity and operating rates, the supply demand
balance for our products and that of competing products, pricing
pressures, technological developments, legal claims by or against
us, changes in government regulations, including increased
manufacturing, labeling and waste disposal regulations and the
classification of TiO2 as a carcinogen in the EU, the
impacts of climate change and increasing climate change
regulations, geopolitical events, cyberattacks and public health
crises.
Any forward looking statement speaks only as of the date on
which it is made, and, except as required by law, Venator does not
undertake any obligation to update or revise any forward looking
statement, whether as a result of new information, future events or
otherwise. New factors emerge from time to time, and it is not
possible for Venator to predict all such factors. When considering
these forward looking statements, you should keep in mind the risk
factors and other cautionary statements in Venator's filings with
the US Securities and Exchange Commission, including Venator's
Annual Reports on Form 10-K for the year ended December 31, 2020 and Quarterly Report on Form
10-Q for the quarter ended March 31,
2021. The risk factors and other factors noted therein could
cause its actual results to differ materially from those contained
in any forward looking statement.
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SOURCE Venator Materials PLC
