HOUSTON, Oct. 27, 2021
/PRNewswire/ -- Kraton Corporation (NYSE: KRA), a leading
global sustainable producer of specialty polymers and
high-value biobased products derived from pine wood pulping
co-products, announces financial results for the quarter ended
September 30, 2021.
THIRD QUARTER 2021 SUMMARY
- Consolidated net income of $55.2
million, compared to consolidated net loss of $402.6 million in the third quarter of 2020. The
third quarter of 2020 results include a non-cash goodwill
impairment charge of $400.0 million
within the Chemical segment.
- Adjusted EBITDA(2) of $88.1
million, up $27.8 million or
46.2%, compared to the third quarter of 2020.
-
- The $27.8 million increase in
Adjusted EBITDA(2) reflects strong global demand trends
in both segments and continued favorable market fundamentals in the
Chemical segment, partially offset cost inflation.
- Polymer segment operating income of $43.8 million, compared to an operating loss of
$5.1 million in the third quarter of
2020, and Adjusted EBITDA(2) of $41.3 million, up $9.4
million or 29.3%, compared to $31.9
million in the third quarter of 2020.
-
- The $9.4 million increase in
Adjusted EBITDA(2) reflects a 9.2% volume growth,
partially offset by higher raw material, logistics, utilities, and
secondary costs, which we continue to address through increases in
selling prices consistent with our Price Right strategy.
- Chemical segment operating income of $35.7 million, compared to an operating loss of
$401.7 million in the third quarter
of 2020, and Adjusted EBITDA(2) of $46.8 million, up 65.2%, compared to $28.3 million in the third quarter of 2020.
-
- The $18.5 million increase in
Adjusted EBITDA(2) reflects factors including higher
sales volumes associated with improved demand into high-value
upgrade markets and continued overall favorable market fundamentals
resulting in higher average selling prices, partially offset by
higher average raw material and other costs.
- Reduced consolidated debt during the quarter by $18.0 million and consolidated net
debt(2) by $50.0 million,
including the favorable effect of foreign currency(2) of
$11.1 million.
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
(In thousands,
except percentages and per share amounts)
|
Revenue
|
$
|
526,888
|
|
|
$
|
373,438
|
|
|
$
|
1,457,782
|
|
|
$
|
1,156,386
|
|
Polymer segment
operating income (loss)
|
$
|
43,822
|
|
|
$
|
(5,090)
|
|
|
$
|
125,649
|
|
|
$
|
29,597
|
|
Chemical segment
operating income (loss)
|
$
|
35,710
|
|
|
$
|
(401,681)
|
|
|
$
|
71,263
|
|
|
$
|
(395,296)
|
|
Consolidated net
income (loss)(1)
|
$
|
55,206
|
|
|
$
|
(402,617)
|
|
|
$
|
128,150
|
|
|
$
|
(200,678)
|
|
Adjusted EBITDA
(non-GAAP)(2)(4)
|
$
|
88,101
|
|
|
$
|
60,257
|
|
|
$
|
217,639
|
|
|
$
|
207,672
|
|
Adjusted EBITDA
margin (non-GAAP)(3)(4)
|
16.7
|
%
|
|
16.1
|
%
|
|
14.9
|
%
|
|
18.0
|
%
|
Diluted earnings
(loss) per share
|
$
|
1.62
|
|
|
$
|
(12.67)
|
|
|
$
|
3.76
|
|
|
$
|
(6.40)
|
|
Adjusted diluted
earnings per share (non-GAAP)(2)
|
$
|
0.98
|
|
|
$
|
0.49
|
|
|
$
|
1.84
|
|
|
$
|
1.05
|
|
|
|
|
(1)
|
For the three and
nine months ended September 30, 2020, includes the $400.0 million
non-cash goodwill impairment charge in the Chemical
segment.
|
(2)
|
See non-GAAP
reconciliations included in the accompanying financial tables for
the reconciliation of each non-GAAP measure to its most directly
comparable GAAP measure.
|
(3)
|
Defined as Adjusted
EBITDA as a percentage of revenue. Adjusted EBITDA margin reflects
approximately 135 basis points reduction for costs associated with
the Berre turnaround for the nine months ended September 30,
2021.
|
(4)
|
For the nine months
ended September 30, 2020, includes $10.3 million contribution from
the Cariflex business prior to its sale in March 2020.
|
"During the third quarter of 2021 our Polymer and Chemical
segments continued to benefit from positive global demand
fundamentals across the majority of our end market exposures. While
our consolidated financial results reflect ongoing inflation in the
cost for raw materials and energy inputs, as well as in
transportation and logistics costs, we continue to address the
impact of this inflation through actions consistent with our Price
Right strategy. In light of these factors, we are pleased to report
third quarter 2021 Adjusted EBITDA of $88.1
million," said Kevin M.
Fogarty, Kraton's President and Chief Executive Officer.
Third quarter 2021 Adjusted EBITDA for the Polymer segment was
$41.3 million, up $9.4 million or 29.3%, compared to the third
quarter of 2020. Third quarter 2021 results for the Polymer segment
reflect a 9.2% increase in sales volume, compared to the year-ago
quarter. Specialty Polymers sales volume was up 17.2% versus the
third quarter of 2020, benefiting from continued recovery in global
demand and higher sales into lubricant additive applications,
principally due to the timing of sales. Sales volume for
Performance Products was up 6.4% compared to the third quarter of
2020, driven by higher sales into consumer and adhesive
applications. As previously discussed, while unit margins have been
adversely impacted by increases in raw material and energy costs,
this largely reflects the lag effect associated with realization of
price increases. As such, we view the margin pressures as
transitory, and we expect unit margins and segment profitability to
continue to benefit from ongoing implementation of further price
increases.
Chemical segment Adjusted EBITDA for the third quarter of 2021
was $46.8 million, up $18.5 million or 65.2%, compared to the third
quarter of 2021. Third quarter 2021 financial results for the
Chemical segment reflect unit margin improvement, compared to the
third quarter of 2020, as the benefit of strong demand fundamentals
and higher average selling prices served to offset the impact of
increased costs for raw materials. Sales volume for Adhesives was
up 6.7%, compared to the third quarter of 2020, driven by favorable
global adhesive demand. Sales volume for Performance Chemicals was
down 2.5% versus the third quarter of 2020, principally due to
lower opportunistic sales of raw materials, and sales volume for
Tires was up 15.0%.
"While we expect inflationary pressures to persist for the
balance of 2021, based upon our view of current demand trends, and
our expectations for further price realizations to offset
inflation, we continue to expect Adjusted EBITDA for the full year
2021 to fall in the range of $280 to
$300 million," said Fogarty. "With
respect to the previously announced Definitive Merger Agreement
between Kraton and DL Chemical Co., Ltd., we continue to expect the
closing to occur by the end of the first half of 2022," added
Fogarty.
Polymer
Segment
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
(In thousands,
except percentages)
|
Performance
Products
|
$
|
180,671
|
|
|
$
|
117,353
|
|
|
$
|
485,770
|
|
|
$
|
354,452
|
|
Specialty
Polymers
|
110,673
|
|
|
78,629
|
|
|
308,481
|
|
|
232,851
|
|
Cariflex(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
36,930
|
|
Isoprene
Rubber(1)
|
5,261
|
|
|
1,833
|
|
|
21,191
|
|
|
17,436
|
|
Other
|
484
|
|
|
725
|
|
|
1,243
|
|
|
1,103
|
|
Polymer Segment
Revenue
|
$
|
297,089
|
|
|
$
|
198,540
|
|
|
$
|
816,685
|
|
|
$
|
642,772
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
$
|
43,822
|
|
|
$
|
(5,090)
|
|
|
$
|
125,649
|
|
|
$
|
29,597
|
|
Adjusted EBITDA
(non-GAAP)(1)(2)
|
$
|
41,272
|
|
|
$
|
31,912
|
|
|
$
|
105,057
|
|
|
$
|
136,926
|
|
Adjusted EBITDA
margin (non-GAAP)(3)
|
13.9
|
%
|
|
16.1
|
%
|
|
12.9
|
%
|
|
21.3
|
%
|
|
|
|
(1)
|
Our Cariflex revenue
includes sales through March 6, 2020. We continue to sell Isoprene
Rubber to DL Chemical Co., Ltd. ("DL Chemical") under the Isoprene
Rubber Supply Agreement ("IRSA"). Sales under the IRSA are
transacted at cost and include the amortization of non-cash
deferred income of $2.4 million and $0.3 million for the three
months ended September 30, 2021 and 2020, respectively, and $10.0
million and $7.5 million for the nine months ended September 30,
2021 and 2020, respectively, which represents revenue deferred
until the products are sold under the IRSA.
|
(2)
|
See non-GAAP
reconciliations included in the accompanying financial tables for
the reconciliation of each non-GAAP measure to its most directly
comparable GAAP measure.
|
(3)
|
Defined as Adjusted
EBITDA as a percentage of revenue. Adjusted EBITDA margin reflects
approximately 240 basis points reduction for costs associated with
the Berre turnaround for the nine months ended September 30,
2021.
|
Q3 2021 VERSUS Q3 2020 RESULTS
Revenue for the Polymer segment was $297.1 million for the three months ended
September 30, 2021 compared to
$198.5 million for the three months
ended September 30, 2020. The
increase was driven by higher average sales prices implemented in
response to inflationary factors, including significantly higher
raw material costs, as well as strong demand fundamentals compared
to the third quarter of 2020, driving higher sales volumes in our
Specialty Polymers and Performance Products business lines. The
positive effect from changes in currency exchange rates between the
periods was $3.6 million.
Polymer Segment
Sales Volume % Change
|
Three Months Ended
September 30, 2021
|
Performance
Products
|
6.4
|
%
|
Specialty
Polymers
|
17.2
|
%
|
Isoprene
Rubber
|
25.4
|
%
|
Total
|
9.2
|
%
|
Sales volumes of 82.2 kilotons for the three months ended
September 30, 2021 increased 9.2%
compared to the three months ended September
30, 2020. Specialty Polymers sales volumes increased 17.2%
driven by strong demand across regions and most applications.
Performance Products sales volumes increased 6.4%, driven by higher
sales into consumer and adhesive applications associated with
continued demand strength. Isoprene Rubber sales volumes increased
25.4% due to timing associated with sales.
For the three months ended September 30,
2021, the Polymer segment generated Adjusted EBITDA
(non-GAAP) of $41.3 million compared
to $31.9 million for the three months
ended September 30, 2020. The higher
Adjusted EBITDA is primarily a result of volume growth across all
product lines. The contribution from higher sales volumes is
partially offset by inflationary pressures resulting in higher raw
material, logistics, utilities, and secondary costs, which we
continue to address through increases in selling prices consistent
with our Price Right strategy. The positive effect from changes in
currency exchange rates between the periods was $1.1 million. See a reconciliation of GAAP
operating income to non-GAAP Adjusted EBITDA below.
Chemical
Segment
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
(In thousands,
except percentages)
|
Adhesives
|
$
|
82,239
|
|
|
$
|
63,901
|
|
|
$
|
228,295
|
|
|
$
|
189,789
|
|
Performance
Chemicals
|
131,300
|
|
|
99,919
|
|
|
368,639
|
|
|
295,509
|
|
Tires
|
16,260
|
|
|
11,078
|
|
|
44,163
|
|
|
28,316
|
|
Chemical Segment
Revenue
|
$
|
229,799
|
|
|
$
|
174,898
|
|
|
$
|
641,097
|
|
|
$
|
513,614
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)(1)
|
$
|
35,710
|
|
|
$
|
(401,681)
|
|
|
$
|
71,263
|
|
|
$
|
(395,296)
|
|
Adjusted EBITDA
(non-GAAP)(2)
|
$
|
46,829
|
|
|
$
|
28,345
|
|
|
$
|
112,582
|
|
|
$
|
70,746
|
|
Adjusted EBITDA
margin (non-GAAP)(3)
|
20.4
|
%
|
|
16.2
|
%
|
|
17.6
|
%
|
|
13.8
|
%
|
|
|
|
(1)
|
For the three and
nine months ended September 30, 2020, includes the $400.0 million
non-cash goodwill impairment charge in the Chemical
segment.
|
(2)
|
See non-GAAP
reconciliations included in the accompanying financial tables for
the reconciliation of each non-GAAP measure to its most directly
comparable GAAP measure.
|
(3)
|
Defined as Adjusted
EBITDA as a percentage of revenue.
|
Q3 2021 VERSUS Q3 2020 RESULTS
Revenue for the Chemical segment was $229.8 million for the three months ended
September 30, 2021 compared to
$174.9 million for the three months
ended September 30, 2020. The
increase in revenue was primarily attributable to higher average
sales prices driven by the strong demand and improved product
upgrades. The positive effect from changes in currency exchange
rates between the periods was $1.0
million.
Chemical Segment
Sales Volume % Change
|
Three Months Ended
September 30, 2021
|
Adhesives
|
6.7
|
%
|
Performance
Chemicals
|
(2.5)
|
%
|
Tires(1)
|
15.0
|
%
|
Total
|
0.9
|
%
|
|
(1)
|
Tires volumes are
less than 5% of total Chemical segment volumes.
|
Sales volumes were 111.5 kilotons for the three months ended
September 30, 2021, an increase of
1.0 kilotons, or 0.9%, related to higher TOR and related
derivatives and Tire sales, due to continued strong demand trends
across most end use markets including the recovery of automotive
applications compared to the third quarter of 2020.
For the three months ended September 30,
2021, the Chemical segment generated $46.8 million of Adjusted EBITDA (non-GAAP)
compared to $28.3 million for the
three months ended September 30,
2020. The increase in Adjusted EBITDA was primarily driven
by the expanded unit margins across all product groups, including
continued favorability in the rosin chain, compared to the third
quarter of 2020. These increases were partially offset by higher
average raw material and other inflationary cost pressures. The
effect from changes in currency exchange rates between the periods
was immaterial. See a reconciliation of GAAP operating income to
non-GAAP Adjusted EBITDA below.
CASH FLOW AND CAPITAL STRUCTURE
During the third quarter of 2021, we reduced consolidated debt
by $18.0 million and
consolidated net debt by $50.0 million, including the favorable
effect of foreign currency of $11.1 million. For the nine months ended
September 30, 2021, we reduced our
consolidated debt by $39.1 million
and consolidated net debt by $43.4
million, including the favorable effect of foreign currency
of $25.0 million. The nine months
ended September 30, 2021 decrease in
our consolidated net debt was driven primarily by favorable
operating income, partially offset by increases in working capital,
including the impacts of higher raw material costs due to the
current inflationary environment and associated increases in
accounts receivable as a result of higher sales prices. Further,
we had approximately $344.3 million of available
liquidity, comprised of $90.2
million of cash on hand and a remaining available borrowing
base of $254.1 million on our ABL
Facility as of September 30, 2021.
Summary of principal amounts for indebtedness and a
reconciliation of Kraton debt to consolidated net debt (non-GAAP)
and consolidated net debt, excluding the effect of foreign currency
(non-GAAP):
|
September 30,
2021
|
|
June 30,
2021
|
|
December 31,
2020
|
|
(In
thousands)
|
Kraton
debt
|
$
|
837,282
|
|
|
$
|
848,704
|
|
|
$
|
860,360
|
|
KFPC
loans(1)(2)
|
73,718
|
|
|
80,255
|
|
|
89,733
|
|
Consolidated
debt
|
911,000
|
|
|
928,959
|
|
|
950,093
|
|
|
|
|
|
|
|
Kraton
cash
|
84,278
|
|
|
56,371
|
|
|
82,804
|
|
KFPC
cash(1)
|
5,918
|
|
|
1,761
|
|
|
3,097
|
|
Consolidated
cash
|
90,196
|
|
|
58,132
|
|
|
85,901
|
|
|
|
|
|
|
|
Consolidated net
debt
|
$
|
820,804
|
|
|
$
|
870,827
|
|
|
$
|
864,192
|
|
|
|
|
|
|
|
Effect of foreign
currency on consolidated net debt
|
25,031
|
|
|
13,918
|
|
|
|
Consolidated net
debt, excluding effect of foreign currency
|
$
|
845,835
|
|
|
$
|
884,745
|
|
|
|
|
|
|
(1)
|
Kraton Formosa
Polymers Corporation ("KFPC") joint venture, located in Mailiao,
Taiwan, which we own a 50% stake in and consolidate within our
financial statements.
|
(2)
|
KFPC executed the
KFPC Revolving Facilities to provide funding for working capital
requirements and/or general corporate purposes. These are in
addition to the 5.5 billion NTD KFPC Loan Agreement.
|
OUTLOOK
During the third quarter of 2021, we saw a continuation of
favorable global demand fundamentals across the majority of our end
markets. While we remain mindful of the potential for COVID-19 to
adversely impact global demand for the balance of 2021, we
currently expect demand trends to remain positive. In addition,
although we expect inflationary pressures for raw materials, energy
costs and for transportation & logistics costs, we expect to
address these pressures through actions consistent with our Price
Right strategy. As a result, we continue to expect Adjusted EBITDA
for the full year to fall in the range of $280 - $300
million, inclusive of the $19.7
million of full year costs associated with the second
quarter 2021 turnaround at our Berre, France, site.
We have not reconciled Adjusted EBITDA guidance to net income
(loss) because we do not provide guidance for net income (loss) or
for items that we do not consider indicative of our on-going
performance, including, but not limited to, transaction and
restructuring costs, costs associated with extinguishment of debt,
and the spread between FIFO and ECRC, as certain of these items are
out of our control and/or cannot be reasonably predicted.
Accordingly, a reconciliation of the Adjusted EBITDA guidance to
the corresponding U.S. GAAP measure is not available without
unreasonable effort.
USE OF NON-GAAP FINANCIAL MEASURES
This press release includes the use of both GAAP and non-GAAP
financial measures. The non-GAAP financial measures used are
EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Diluted
Earnings per Share, Consolidated Net Debt (including as adjusted to
exclude the effect of foreign currency), Adjusted Gross Profit, and
Adjusted Gross Profit Per Ton. Tables included in this earnings
release reconcile each of these non-GAAP financial measures with
the most directly comparable U.S. GAAP financial measure. For
additional information on the impact of the spread between
first-in-first-out ("FIFO") and Estimated Current Replacement Cost
("ECRC"), see Management's Discussion and Analysis of Financial
Condition and Results of Operations in our Annual Report on Form
10-K for the fiscal year ended December 31, 2020.
We consider these non-GAAP financial measures to be important
supplemental measures of our performance and believe they are
frequently used by investors, securities analysts, and other
interested parties in the evaluation of our performance including
period-to-period comparisons and/or that of other companies in our
industry. Further, management uses these measures to evaluate
operating performance, and our incentive compensation plan based
incentive compensation payments on our Adjusted EBITDA performance
and attainment of net debt reduction, along with other factors.
These non-GAAP financial measures have limitations as analytical
tools and in some cases can vary substantially from other measures
of our performance. You should not consider them in isolation, or
as a substitute for analysis of our results under U.S. GAAP in
the United States.
EBITDA, Adjusted EBITDA, Adjusted EBITDA excluding Cariflex,
and Adjusted EBITDA Margin: For our consolidated results,
EBITDA represents net income (loss) before interest, taxes,
depreciation, and amortization. For each reporting segment, EBITDA
represents operating income (loss) before depreciation and
amortization, and earnings of unconsolidated joint ventures. Among
other limitations EBITDA does not: reflect the significant interest
expense on our debt or reflect the significant depreciation and
amortization expense associated with our long-lived assets; and
EBITDA included herein should not be used for purposes of assessing
compliance or non-compliance with financial covenants under our
debt agreements, which can vary from the terms used herein. The
calculation of EBITDA in our debt agreements includes adjustments,
such as extraordinary, non-recurring or one-time charges, proforma
cost savings, certain non-cash items, turnaround costs, and other
items included in the definition of EBITDA in the debt agreements.
Other companies in our industry may calculate EBITDA differently
than we do, limiting its usefulness as a comparative measure. As an
analytical tool, Adjusted EBITDA is subject to all the limitations
applicable to EBITDA. We prepare Adjusted EBITDA by eliminating
from EBITDA the impact of a number of items we do not consider
indicative of our on-going performance, including the spread
between FIFO and ECRC, but you should be aware that in the future
we may incur expenses similar to the adjustments in this
presentation. Our presentation of Adjusted EBITDA should not be
construed as an inference that our future results will be
unaffected by unusual or non-recurring items. In addition, due to
volatility in raw material prices, Adjusted EBITDA may, and often
does, vary substantially from EBITDA and other performance
measures, including net income calculated in accordance with U.S.
GAAP. We prepare Adjusted EBITDA excluding Cariflex by eliminating
from Adjusted EBITDA Cariflex sales, cost of sales, and direct
specific fixed costs incurred from January
1, 2020 through March 6, 2020.
We define Adjusted EBITDA Margin as Adjusted EBITDA as a percentage
of revenue (for each reporting segment or on a consolidated basis,
if applicable). Because of these and other limitations, EBITDA and
Adjusted EBITDA should not be considered as a measure of
discretionary cash available to us to invest in the growth of our
business.
Adjusted Gross Profit, Adjusted Gross Profit Per Ton, and
Adjusted Gross Profit Per Ton, excluding the Berre turnaround:
We define Adjusted Gross Profit Per Ton as Adjusted Gross Profit
divided by total sales volume (for each reporting segment or on a
consolidated basis, as applicable). We further calculate Adjusted
Gross Profit Per Ton, excluding the Berre turnaround, by deducting
out of gross profit costs associated with the Berre turnaround. We
define Adjusted Gross Profit as gross profit excluding certain
charges and expenses. Adjusted Gross Profit is limited because it
often varies substantially from gross profit calculated in
accordance with U.S. GAAP due to volatility in raw material
prices.
Adjusted Diluted Earnings Per Share: We prepare
Adjusted Diluted Earnings per Share by eliminating from Diluted
Earnings per Share the impact of a number of non-recurring items we
do not consider indicative of our on-going performance, including
the spread between FIFO and ECRC.
Consolidated Net Debt and Consolidated Net Debt, excluding
the effect of foreign currency: We define Consolidated Net Debt
as total consolidated debt (including debt of KFPC) less
consolidated cash and cash equivalents. Management uses
Consolidated Net Debt to determine our outstanding debt obligations
that would not readily be satisfied by its cash and cash
equivalents on hand. Management believes that using Consolidated
Net Debt is useful to investors in determining our leverage since
we could choose to use cash and cash equivalents to retire debt. We
also present Consolidated Net Debt, as adjusted for foreign
exchange impact accounts for the foreign exchange effect on our
foreign currency denominated debt agreements.
ABOUT KRATON CORPORATION
Kraton Corporation (NYSE: KRA) is a leading global sustainable
producer of specialty polymers and high-value biobased
products derived from pine wood pulping co-products. Kraton's
polymers are used in a wide range of applications, including
adhesives, coatings, consumer and personal care products, sealants
and lubricants, and medical, packaging, automotive, paving and
roofing applications. As the largest global provider in the pine
chemicals industry, the company's pine-based specialty products are
sold into adhesives, roads and construction, and tire markets, and
it produces and sells a broad range of performance chemicals into
markets that include fuel additives, oilfield chemicals, coatings,
metalworking fluids and lubricants, inks, flavors and fragrances,
and mining. Kraton offers its products to a diverse customer base
in numerous countries worldwide.
Kraton, the Kraton logo and design, are all trademarks of Kraton
Polymers LLC or its affiliates.
FORWARD LOOKING STATEMENTS
This press release contains "forward-looking statements" within
the meaning of the U.S. Private Securities Litigation Reform Act of
1995 that reflect our plans, beliefs, expectations, and current
views with respect to, among other things, future events and
financial performance. Forward-looking statements are often
characterized by the use of words such as "outlook," "believes,"
"target," "estimates," "reflect," "remain," "expects," "projects,"
"may," "intends," "plans," "on track", "forsees", "future," or
"anticipates," or by discussions of strategy, plans, or intentions.
The statements in this press release that are not historical
statements, including, but not limited to, statements regarding our
expectations as to the continued impact of the COVID-19 pandemic
(including governmental and regulatory actions) on demand for our
products, on the national and global economy and on our customers,
suppliers, employees, business and results of operations, our
expectations for our business demand, margin improvements, and
growth in 2021, market factors, inflationary pressures, and
transportation and logistics trends, our 2021 Adjusted EBITDA, the
impact of our diversified portfolio and broad geographic exposure,
the impact of and expected realization of announced and future
price increases, the inability to complete the proposed merger with
DL Chemical Co. Ltd. due to the failure to obtain stockholder
approval, or the failure to satisfy other conditions of the
proposed transaction within the proposed timeframe or at all
(including receipt of regulatory approvals), and the information
and the matters described under the caption "Outlook," are
forward-looking statements.
All forward-looking statements in this press release are made
based on management's current expectations and estimates, which
involve known and unknown risks, uncertainties, assumptions and
other important factors that could cause actual results to differ
materially from those expressed in forward-looking statements.
Additional information concerning factors that could cause actual
results to differ materially from those expressed in
forward-looking statements is contained in our most recently filed
Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and in
other filings made by us with the U.S. Securities and Exchange
Commission (the "SEC"), and include, but are not limited to, risks
related to: our ability to repay or re-finance indebtedness and
risk associated with incurring additional indebtedness; our
reliance on third parties for the provision of significant
operating and other services; the impact of extraordinary events,
including health epidemics or pandemics such as COVID-19 (including
governmental and regulatory actions relating thereto), natural
disasters and other weather conditions and terrorist attacks;
conditions in the global economy and capital markets; fluctuations
in raw material costs; limitations in the availability of raw
materials; competition in our end-use markets; fluctuations in
global tariffs and energy, transportation, and logistics costs; the
potential for charges related to our goodwill or other assets; and
other factors of which we are currently unaware or deem immaterial.
Many of these risks and uncertainties are currently amplified by
and will continue to be amplified by, or in the future may be
amplified by, the COVID-19 pandemic. To the extent any
inconsistency or conflict exists between the information included
in this press release and the information included in our prior
reports and other filings with the SEC, the information contained
in this press release updates and supersede such information.
Readers are cautioned not to place undue reliance on
forward-looking statements. Forward-looking statements contained
herein speak only as of the date of this press release, and we
assume no obligation to publicly update or revise such
forward-looking statements in light of new information or future
events.
KRATON
CORPORATION
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands,
except per share data)
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Revenue
|
$
|
526,888
|
|
|
$
|
373,438
|
|
|
$
|
1,457,782
|
|
|
$
|
1,156,386
|
|
Cost of goods
sold
|
360,197
|
|
|
304,684
|
|
|
1,015,533
|
|
|
875,388
|
|
Gross
profit
|
166,691
|
|
|
68,754
|
|
|
442,249
|
|
|
280,998
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research and
development
|
10,378
|
|
|
9,454
|
|
|
29,621
|
|
|
30,158
|
|
Selling, general, and
administrative
|
44,927
|
|
|
35,285
|
|
|
120,243
|
|
|
122,745
|
|
Depreciation and
amortization
|
31,674
|
|
|
31,313
|
|
|
94,947
|
|
|
93,828
|
|
(Gain) loss on
disposal of fixed assets
|
180
|
|
|
(527)
|
|
|
526
|
|
|
(34)
|
|
Impairment of
goodwill
|
—
|
|
|
400,000
|
|
|
—
|
|
|
400,000
|
|
Operating income
(loss)
|
79,532
|
|
|
(406,771)
|
|
|
196,912
|
|
|
(365,699)
|
|
Other income
(expense)
|
808
|
|
|
259
|
|
|
(877)
|
|
|
837
|
|
Disposition and exit
of business activities
|
—
|
|
|
—
|
|
|
—
|
|
|
175,189
|
|
Loss on
extinguishment of debt
|
—
|
|
|
(848)
|
|
|
—
|
|
|
(14,943)
|
|
Earnings of
unconsolidated joint venture
|
89
|
|
|
81
|
|
|
344
|
|
|
310
|
|
Interest expense,
net
|
(9,989)
|
|
|
(13,527)
|
|
|
(31,353)
|
|
|
(44,454)
|
|
Income (loss) before
income taxes
|
70,440
|
|
|
(420,806)
|
|
|
165,026
|
|
|
(248,760)
|
|
Income tax benefit
(expense)
|
(15,234)
|
|
|
18,189
|
|
|
(36,876)
|
|
|
48,082
|
|
Consolidated net
income (loss)
|
55,206
|
|
|
(402,617)
|
|
|
128,150
|
|
|
(200,678)
|
|
Net income
attributable to noncontrolling interest
|
(2,182)
|
|
|
(1,177)
|
|
|
(5,486)
|
|
|
(2,998)
|
|
Net income (loss)
attributable to Kraton
|
$
|
53,024
|
|
|
$
|
(403,794)
|
|
|
$
|
122,664
|
|
|
$
|
(203,676)
|
|
Earnings (loss) per
common share:
|
|
|
|
|
|
|
|
Basic
|
$
|
1.65
|
|
|
$
|
(12.67)
|
|
|
$
|
3.82
|
|
|
$
|
(6.40)
|
|
Diluted
|
$
|
1.62
|
|
|
$
|
(12.67)
|
|
|
$
|
3.76
|
|
|
$
|
(6.40)
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
32,148
|
|
|
31,787
|
|
|
32,075
|
|
|
31,728
|
|
Diluted
|
32,692
|
|
|
31,787
|
|
|
32,610
|
|
|
31,728
|
|
KRATON
CORPORATION
CONDENSED
CONSOLIDATED BALANCE SHEETS
(In thousands,
except par value)
|
|
|
September 30,
2021
|
|
December 31,
2020
|
|
(unaudited)
|
|
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
90,196
|
|
|
$
|
85,901
|
|
Receivables, net of
allowance for doubtful accounts of $764 and $598
|
263,234
|
|
|
180,258
|
|
Inventories of
products, net
|
411,993
|
|
|
318,885
|
|
Inventories of
materials and supplies, net
|
34,512
|
|
|
34,164
|
|
Prepaid
expenses
|
13,953
|
|
|
11,844
|
|
Other current
assets
|
17,843
|
|
|
15,338
|
|
Total current
assets
|
831,731
|
|
|
646,390
|
|
Property, plant, and
equipment, net of accumulated depreciation of $778,466 and
$732,279
|
929,481
|
|
|
942,703
|
|
Goodwill
|
373,303
|
|
|
375,061
|
|
Intangible assets,
net of accumulated amortization of $359,505 and $330,070
|
269,848
|
|
|
294,734
|
|
Investment in
unconsolidated joint venture
|
12,050
|
|
|
12,723
|
|
Deferred income
taxes
|
77,683
|
|
|
83,534
|
|
Long-term operating
lease assets, net
|
95,100
|
|
|
84,042
|
|
Other long-term
assets
|
20,113
|
|
|
21,770
|
|
Total
assets
|
$
|
2,609,309
|
|
|
$
|
2,460,957
|
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Current portion of
long-term debt
|
$
|
74,923
|
|
|
$
|
72,347
|
|
Accounts
payable-trade
|
221,308
|
|
|
176,229
|
|
Other payables and
accruals
|
203,206
|
|
|
167,364
|
|
Due to related
party
|
14,619
|
|
|
17,147
|
|
Total current
liabilities
|
514,056
|
|
|
433,087
|
|
Long-term debt, net
of current portion
|
825,459
|
|
|
865,516
|
|
Deferred income
taxes
|
123,700
|
|
|
125,559
|
|
Long-term operating
lease liabilities
|
77,894
|
|
|
67,898
|
|
Deferred
income
|
137,439
|
|
|
151,329
|
|
Other long-term
liabilities
|
151,997
|
|
|
168,566
|
|
Total
liabilities
|
1,830,545
|
|
|
1,811,955
|
|
|
|
|
|
Equity:
|
|
|
|
Kraton stockholders'
equity:
|
|
|
|
Preferred stock, $0.01
par value; 100,000 shares authorized; none issued
|
—
|
|
|
—
|
|
Common stock, $0.01
par value; 500,000 shares authorized; 32,148 shares issued and
outstanding at September 30, 2021; 31,873 shares issued and
outstanding at December 31, 2020
|
321
|
|
|
319
|
|
Additional paid in
capital
|
409,799
|
|
|
401,445
|
|
Retained
earnings
|
362,062
|
|
|
240,464
|
|
Accumulated other
comprehensive loss
|
(43,859)
|
|
|
(37,865)
|
|
Total Kraton
stockholders' equity
|
728,323
|
|
|
604,363
|
|
Noncontrolling
interest
|
50,441
|
|
|
44,639
|
|
Total
equity
|
778,764
|
|
|
649,002
|
|
Total liabilities and
equity
|
$
|
2,609,309
|
|
|
$
|
2,460,957
|
|
KRATON
CORPORATION
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In
thousands)
|
|
|
Nine Months Ended
September 30,
|
|
2021
|
|
2020
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
Consolidated net
income (loss)
|
$
|
128,150
|
|
|
$
|
(200,678)
|
|
Adjustments to
reconcile consolidated net income to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
94,947
|
|
|
93,828
|
|
Lease
amortization
|
18,138
|
|
|
18,463
|
|
Amortization of debt
original issue discount
|
—
|
|
|
148
|
|
Amortization of debt
issuance costs
|
1,893
|
|
|
2,426
|
|
Amortization of
deferred income
|
(10,821)
|
|
|
(8,460)
|
|
(Gain) loss on
disposal of property, plant, and equipment
|
526
|
|
|
(34)
|
|
Loss on extinguishment
of debt
|
—
|
|
|
14,943
|
|
Impairment of
goodwill
|
—
|
|
|
400,000
|
|
Earnings from
unconsolidated joint venture, net of dividends received
|
123
|
|
|
197
|
|
Deferred income tax
benefit
|
(3,040)
|
|
|
(64,576)
|
|
Release of uncertain
tax positions
|
—
|
|
|
(3,316)
|
|
Gain on disposition
and exit of business activities
|
—
|
|
|
(175,189)
|
|
Share-based
compensation
|
8,129
|
|
|
7,011
|
|
Decrease (increase)
in:
|
|
|
|
Accounts
receivable
|
(88,336)
|
|
|
5,033
|
|
Inventories of
products, materials, and supplies
|
(100,657)
|
|
|
10,083
|
|
Other
assets
|
(4,811)
|
|
|
769
|
|
Increase (decrease)
in:
|
|
|
|
Accounts
payable-trade
|
50,371
|
|
|
(37,073)
|
|
Other payables and
accruals
|
16,670
|
|
|
3,377
|
|
Other long-term
liabilities
|
(13,395)
|
|
|
(3,567)
|
|
Due to related
party
|
(1,493)
|
|
|
(1,032)
|
|
Net cash provided by
operating activities
|
96,394
|
|
|
62,353
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
Kraton purchase of
property, plant, and equipment
|
(61,884)
|
|
|
(54,138)
|
|
KFPC purchase of
property, plant, and equipment
|
(350)
|
|
|
(3,727)
|
|
Purchase of software
and other intangibles
|
(8,657)
|
|
|
(6,118)
|
|
Cash proceeds
(payments) from disposition and exit of business
activities
|
(876)
|
|
|
510,500
|
|
Net cash provided by
(used in) investing activities
|
(71,767)
|
|
|
446,517
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
Proceeds from
debt
|
103,000
|
|
|
77,000
|
|
Repayments of
debt
|
(103,000)
|
|
|
(534,733)
|
|
KFPC proceeds from
debt
|
54,889
|
|
|
63,559
|
|
KFPC repayments of
debt
|
(71,654)
|
|
|
(76,555)
|
|
Finance lease
payments
|
(559)
|
|
|
(134)
|
|
Purchase of treasury
stock
|
(4,931)
|
|
|
(748)
|
|
Proceeds from the
exercise of stock options
|
4,092
|
|
|
—
|
|
Settlement of interest
rate swap
|
—
|
|
|
(1,295)
|
|
Debt issuance
costs
|
—
|
|
|
(1,575)
|
|
Net cash used in
financing activities
|
(18,163)
|
|
|
(474,481)
|
|
Effect of exchange
rate differences on cash
|
(2,169)
|
|
|
(6,601)
|
|
Net increase in cash
and cash equivalents
|
4,295
|
|
|
27,788
|
|
Cash and cash
equivalents, beginning of period
|
85,901
|
|
|
35,033
|
|
Cash and cash
equivalents, end of period
|
$
|
90,196
|
|
|
$
|
62,821
|
|
KRATON
CORPORATION
RECONCILIATION OF
NET INCOME ATTRIBUTABLE TO KRATON AND OPERATING INCOME TO NON-GAAP
FINANCIAL MEASURES
(Unaudited)
(In
thousands)
|
|
|
Three Months Ended
September 30, 2021
|
|
Three Months Ended
September 30, 2020
|
|
Polymer
|
|
Chemical
|
|
Total
|
|
Polymer
|
|
Chemical
|
|
Total
|
Net income (loss)
attributable to Kraton
|
|
|
|
|
$
|
53,024
|
|
|
|
|
|
|
$
|
(403,794)
|
|
Net income
attributable to noncontrolling interest
|
|
|
|
|
2,182
|
|
|
|
|
|
|
1,177
|
|
Consolidated net
income (loss)
|
|
|
|
|
55,206
|
|
|
|
|
|
|
(402,617)
|
|
Add
(deduct):
|
|
|
|
|
|
|
|
|
|
|
|
Income tax (benefit)
expense
|
|
|
|
|
15,234
|
|
|
|
|
|
|
(18,189)
|
|
Interest expense,
net
|
|
|
|
|
9,989
|
|
|
|
|
|
|
13,527
|
|
Earnings of
unconsolidated joint venture
|
|
|
|
|
(89)
|
|
|
|
|
|
|
(81)
|
|
Loss on extinguishment
of debt
|
|
|
|
|
—
|
|
|
|
|
|
|
848
|
|
Other
income
|
|
|
|
|
(808)
|
|
|
|
|
|
|
(259)
|
|
Operating income
(loss)
|
$
|
43,822
|
|
|
$
|
35,710
|
|
|
79,532
|
|
|
$
|
(5,090)
|
|
|
$
|
(401,681)
|
|
|
(406,771)
|
|
Add
(deduct):
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
12,794
|
|
|
18,880
|
|
|
31,674
|
|
|
13,042
|
|
|
18,271
|
|
|
31,313
|
|
Other income
(expense)
|
287
|
|
|
521
|
|
|
808
|
|
|
(7)
|
|
|
266
|
|
|
259
|
|
Loss on extinguishment
of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
(848)
|
|
|
—
|
|
|
(848)
|
|
Earnings of
unconsolidated joint venture
|
89
|
|
|
—
|
|
|
89
|
|
|
81
|
|
|
—
|
|
|
81
|
|
EBITDA (a)
|
56,992
|
|
|
55,111
|
|
|
112,103
|
|
|
7,178
|
|
|
(383,144)
|
|
|
(375,966)
|
|
Add
(deduct):
|
|
|
|
|
|
|
|
|
|
|
|
Transaction,
acquisition related costs, restructuring, and other costs
(b)
|
4,790
|
|
|
(2)
|
|
|
4,788
|
|
|
1,531
|
|
|
150
|
|
|
1,681
|
|
Loss on extinguishment
of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
848
|
|
|
—
|
|
|
848
|
|
Gain on disposal of
fixed assets
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,316)
|
|
|
(1,316)
|
|
Impairment of
goodwill
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
400,000
|
|
|
400,000
|
|
Loss on emissions
credits
|
647
|
|
|
—
|
|
|
647
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Non-cash compensation
expense
|
2,610
|
|
|
—
|
|
|
2,610
|
|
|
2,266
|
|
|
—
|
|
|
2,266
|
|
Spread between FIFO
and ECRC
|
(23,767)
|
|
|
(8,280)
|
|
|
(32,047)
|
|
|
20,089
|
|
|
12,655
|
|
|
32,744
|
|
Adjusted
EBITDA
|
$
|
41,272
|
|
|
$
|
46,829
|
|
|
$
|
88,101
|
|
|
$
|
31,912
|
|
|
$
|
28,345
|
|
|
$
|
60,257
|
|
|
|
|
(a)
|
Included in EBITDA
are Isoprene Rubber sales to Daelim under the IRSA. Sales under the
IRSA are transacted at cost and include the amortization of
non-cash deferred income of $2.4 million and $0.3 million for the
three months ended September 30, 2021 and 2020, respectively, which
represents revenue deferred until the products are sold under the
IRSA.
|
(b)
|
Charges related to
the evaluation of acquisition transactions, severance expenses, and
other restructuring related charges.
|
|
Nine Months Ended
September 30, 2021
|
|
Nine Months Ended
September 30, 2020
|
|
Polymer
|
|
Chemical
|
|
Total
|
|
Polymer
|
|
Chemical
|
|
Total
|
Net income (loss)
attributable to Kraton
|
|
|
|
|
$
|
122,664
|
|
|
|
|
|
|
$
|
(203,676)
|
|
Net income
attributable to noncontrolling interest
|
|
|
|
|
5,486
|
|
|
|
|
|
|
2,998
|
|
Consolidated net
income (loss)
|
|
|
|
|
128,150
|
|
|
|
|
|
|
(200,678)
|
|
Add
(deduct):
|
|
|
|
|
|
|
|
|
|
|
|
Income tax (benefit)
expense
|
|
|
|
|
36,876
|
|
|
|
|
|
|
(48,082)
|
|
Interest expense,
net
|
|
|
|
|
31,353
|
|
|
|
|
|
|
44,454
|
|
Earnings of
unconsolidated joint venture
|
|
|
|
|
(344)
|
|
|
|
|
|
|
(310)
|
|
Loss on extinguishment
of debt
|
|
|
|
|
—
|
|
|
|
|
|
|
14,943
|
|
Other (income)
expense
|
|
|
|
|
877
|
|
|
|
|
|
|
(837)
|
|
Disposition and exit
of business activities
|
|
|
|
|
—
|
|
|
|
|
|
|
(175,189)
|
|
Operating income
(loss)
|
$
|
125,649
|
|
|
$
|
71,263
|
|
|
196,912
|
|
|
$
|
29,597
|
|
|
$
|
(395,296)
|
|
|
(365,699)
|
|
Add
(deduct):
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
38,394
|
|
|
56,553
|
|
|
94,947
|
|
|
39,337
|
|
|
54,491
|
|
|
93,828
|
|
Disposition and exit
of business activities
|
—
|
|
|
—
|
|
|
—
|
|
|
175,189
|
|
|
—
|
|
|
175,189
|
|
Other income
(expense)
|
(2,446)
|
|
|
1,569
|
|
|
(877)
|
|
|
32
|
|
|
805
|
|
|
837
|
|
Loss on extinguishment
of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
(14,943)
|
|
|
—
|
|
|
(14,943)
|
|
Earnings of
unconsolidated joint venture
|
344
|
|
|
—
|
|
|
344
|
|
|
310
|
|
|
—
|
|
|
310
|
|
EBITDA (a)
|
161,941
|
|
|
129,385
|
|
|
291,326
|
|
|
229,522
|
|
|
(340,000)
|
|
|
(110,478)
|
|
Add
(deduct):
|
|
|
|
|
|
|
|
|
|
|
|
Transaction,
acquisition related costs, restructuring, and other costs
(b)
|
7,017
|
|
|
2,750
|
|
|
9,767
|
|
|
13,230
|
|
|
1,380
|
|
|
14,610
|
|
Disposition and exit
of business activities
|
—
|
|
|
—
|
|
|
—
|
|
|
(175,189)
|
|
|
—
|
|
|
(175,189)
|
|
Loss on extinguishment
of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
14,943
|
|
|
—
|
|
|
14,943
|
|
Gain on disposal of
fixed assets
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,316)
|
|
|
(1,316)
|
|
Impairment of
goodwill
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
400,000
|
|
|
400,000
|
|
Loss on emissions
credits
|
647
|
|
|
—
|
|
|
647
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Non-cash compensation
expense
|
8,129
|
|
|
—
|
|
|
8,129
|
|
|
7,011
|
|
|
—
|
|
|
7,011
|
|
Spread between FIFO
and ECRC
|
(72,677)
|
|
|
(19,553)
|
|
|
(92,230)
|
|
|
47,409
|
|
|
10,682
|
|
|
58,091
|
|
Adjusted
EBITDA
|
$
|
105,057
|
|
|
$
|
112,582
|
|
|
$
|
217,639
|
|
|
$
|
136,926
|
|
|
$
|
70,746
|
|
|
$
|
207,672
|
|
Adjusted EBITDA
excluding Cariflex
|
$
|
105,057
|
|
|
$
|
112,582
|
|
|
$
|
217,639
|
|
|
$
|
126,582
|
|
|
$
|
70,746
|
|
|
$
|
197,328
|
|
|
|
|
(a)
|
Included in EBITDA
are Isoprene Rubber sales to Daelim under the IRSA. Sales under the
IRSA are transacted at cost and include the amortization of
non-cash deferred income of $10.0 million and $7.5 million for the
nine months ended September 30, 2021 and 2020, respectively, which
represents revenue deferred until the products are sold under the
IRSA.
|
(b)
|
Charges related to
the evaluation of acquisition transactions, severance expenses, and
other restructuring related charges.
|
KRATON
CORPORATION
RECONCILIATION OF
DILUTED EARNINGS PER SHARE TO ADJUSTED DILUTED EARNINGS PER
SHARE
(Unaudited)
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Diluted Earnings
(Loss) Per Share
|
$
|
1.62
|
|
|
$
|
(12.67)
|
|
|
$
|
3.76
|
|
|
$
|
(6.40)
|
|
Transaction,
acquisition related costs, restructuring, and other costs
(a)
|
0.11
|
|
|
0.03
|
|
|
0.23
|
|
|
0.34
|
|
Disposition and exit
of business activities
|
—
|
|
|
—
|
|
|
—
|
|
|
(4.94)
|
|
Loss on
extinguishment of debt
|
—
|
|
|
0.02
|
|
|
—
|
|
|
0.36
|
|
Gain on disposal of
fixed assets
|
—
|
|
|
(0.03)
|
|
|
—
|
|
|
(0.03)
|
|
Impairment of
goodwill
|
—
|
|
|
12.39
|
|
|
—
|
|
|
12.39
|
|
Tax
restructuring
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.03)
|
|
Loss on emissions
credits
|
0.01
|
|
|
—
|
|
|
0.01
|
|
|
—
|
|
Spread between FIFO
and ECRC
|
(0.76)
|
|
|
0.75
|
|
|
(2.16)
|
|
|
1.36
|
|
Adjusted Diluted
Earnings Per Share (non-GAAP)
|
$
|
0.98
|
|
|
$
|
0.49
|
|
|
$
|
1.84
|
|
|
$
|
1.05
|
|
|
|
|
(a)
|
Charges related to
the evaluation of acquisition transactions, severance expenses, and
other restructuring related charges.
|
POLYMER SEGMENT
RECONCILIATION OF GROSS PROFIT TO NON-GAAP FINANCIAL
MEASURES
(Unaudited)
(In
thousands)
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Gross
profit
|
$
|
90,323
|
|
|
$
|
34,996
|
|
|
$
|
251,744
|
|
|
$
|
161,572
|
|
|
|
|
|
|
|
|
|
Add
(deduct):
|
|
|
|
|
|
|
|
Transaction,
acquisition related costs, restructuring, and other
costs
|
—
|
|
|
—
|
|
|
—
|
|
|
387
|
|
Loss on emissions
credits
|
647
|
|
|
—
|
|
|
647
|
|
|
—
|
|
Non-cash compensation
expense
|
130
|
|
|
136
|
|
|
406
|
|
|
421
|
|
Spread between FIFO
and ECRC
|
(23,767)
|
|
|
20,089
|
|
|
(72,677)
|
|
|
47,409
|
|
Adjusted gross profit
(non-GAAP)
|
$
|
67,333
|
|
|
$
|
55,221
|
|
|
$
|
180,120
|
|
|
$
|
209,789
|
|
|
|
|
|
|
|
|
|
Sales volume
(kilotons)
|
82.2
|
|
|
75.3
|
|
|
240.8
|
|
|
221.6
|
|
Adjusted gross profit
per ton (non-GAAP)(a)
|
$
|
819
|
|
|
$
|
733
|
|
|
$
|
748
|
|
|
$
|
947
|
|
|
|
|
(a)
|
Adjusted gross profit
per ton for the nine months ended September 30, 2021, excluding
$19.7 million of costs associated with the Berre turnaround ($82),
would have been $830.
|
For further information:
H. Gene Shiels
Director of Investor Relations
281 504-4886
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SOURCE Kraton Corporation