CHARLOTTE, N.C., May 3, 2023
/PRNewswire/ -- Albemarle Corporation (NYSE: ALB), a global leader
in providing essential elements for mobility, energy, connectivity
and health, today announced its results for the first quarter ended
March 31, 2023.
First-Quarter 2023 and Recent
Highlights
(Unless otherwise stated, all percentage
changes represent year-over-year comparisons)
- Net sales of $2.6 billion, an
increase of 129%
- Net income of $1.2 billion, or
$10.51 per diluted share, an increase
of 389%
- Adjusted diluted EPS of $10.32,
an increase of 334%
- Adjusted EBITDA of $1.6 billion,
an increase of 269%
- Selected U.S. lithium processing facility location in
Richburg, South
Carolina
- Signed definitive agreements with Mineral Resources Limited
("MinRes") to restructure the MARBL Lithium Joint Venture in
Australia and separately for
MinRes to invest in Albemarle's
conversion assets in China
- Reached final investment decision to build Kemerton trains III
& IV
- Adjusting 2023 guidance to reflect current lithium market
pricing; Net sales are now expected to increase approximately 35%
to 55% year-over-year and adjusted EBITDA now expected to range
from (5%) to 15% year-over-year
"Compared to last year, first quarter net sales more than
doubled, adjusted diluted earnings per share more than quadrupled
providing a robust start to the year," commented Albemarle CEO
Kent Masters. "We see strong sales
volume growth for the rest of the year but have modified our
guidance to reflect softening lithium market pricing. We remain
confident in the underlying market strength of our world-class
asset base and our long-term growth strategy."
2023 Corporate Outlook
The company is revising
full-year 2023 outlook to reflect current lithium market pricing.
Net sales are expected to increase 35% to 55% over prior year,
primarily driven by a continued global shift to electric vehicles.
The year-over-year change in Adjusted EBITDA is expected to be in
the range of (5%) to 15% as higher net sales are partially offset
by timing impacts of higher priced inventories. The company expects
to maintain positive free cash flow. The company's capital
expenditures are expected to be between $1.7
billion and $1.9 billion for
2023.
|
FY 2023
Guidance
as of Feb.15,
2023
|
|
FY 2023
Guidance
as of May 3,
2023
|
Net sales
|
$11.3 - $12.9
billion
|
|
$9.8 - $11.5
billion
|
Adjusted
EBITDA(a)
|
$4.2 - $5.1
billion
|
|
$3.3 - $4.0
billion
|
Adjusted EBITDA
Margin(a)
|
37% - 40%
|
|
34% - 35%
|
Adjusted Diluted
EPS(a)
|
$26.00 -
$33.00
|
|
$20.75 -
$25.75
|
Net Cash from
Operations
|
$2.1 - $2.4
billion
|
|
$1.7 - $2.3
billion
|
Capital
Expenditures
|
$1.7 - $1.9
billion
|
|
$1.7 - $1.9
billion
|
(a)
|
The company does not
provide a reconciliation of forward-looking non-GAAP financial
measures to the most directly comparable financial measures
calculated and reported in accordance with GAAP, as the company is
unable to estimate significant non-recurring or unusual items
without unreasonable effort. See "Additional Information
regarding Non-GAAP Measures" for more information.
|
First Quarter 2023 Results
In millions, except
per share amounts
|
Q1
2023
|
|
Q1
2022
|
|
$
Change
|
|
%
Change
|
Net sales
|
$
2,580.3
|
|
$
1,127.7
|
|
$
1,452.5
|
|
128.8 %
|
Net income attributable
to Albemarle Corporation
|
$
1,238.6
|
|
$
253.4
|
|
$
985.2
|
|
388.8 %
|
Adjusted
EBITDA(a)
|
$
1,595.7
|
|
$
431.9
|
|
$
1,163.8
|
|
269.4 %
|
Diluted earnings per
share
|
$
10.51
|
|
$
2.15
|
|
$
8.36
|
|
388.8 %
|
Non-operating pension and OPEB items(a)
|
—
|
|
(0.04)
|
|
|
|
|
Non-recurring and other unusual items(a)
|
(0.19)
|
|
0.26
|
|
|
|
|
Adjusted diluted
earnings per share(a)(b)
|
$
10.32
|
|
$
2.38
|
|
$
7.94
|
|
333.6 %
|
(a)
|
See Non-GAAP
Reconciliations for further details.
|
(b)
|
Totals may not add due
to rounding.
|
Net sales for the first quarter of 2023 were $2.6 billion compared to $1.1 billion for the prior-year quarter. The 129%
increase was driven by higher lithium prices and volumes. Net
income attributable to Albemarle
of $1.2 billion increased by
$1.0 billion from the prior year's
quarter. Adjusted EBITDA of $1.6
billion increased by $1.2
billion from the prior-year quarter primarily due to higher
net sales.
The effective income tax rate for the first quarter of 2023 was
23.9% compared to 26.9% in the same period of 2022. On an adjusted
basis, the effective income tax rates were 23.6% and 18.9% for the
first quarter of 2023 and 2022, respectively, with the increase
primarily due to changes in the geographic income mix.
Business Segment Results
Beginning January 1, 2023, the company re-segmented its
operating segments. The results from 2022 are restated to align
with the new structure.
Energy Storage Results
In
millions
|
Q1
2023
|
|
Q1
2022
|
|
$
Change
|
|
%
Change
|
Net Sales
|
$
1,943.7
|
|
$
463.7
|
|
$
1,480.0
|
|
319.2 %
|
Adjusted
EBITDA
|
$
1,406.2
|
|
$
285.2
|
|
$
1,120.9
|
|
393.0 %
|
Energy Storage net sales for the first quarter of 2023 were
$1.9 billion, an increase of
$1.5 billion (+319%) due to higher
pricing net of FX (+301%) related to renegotiated contracts and
increased market pricing. Volume was also higher (+18%) related to
the La Negra III/IV expansion in Chile, production from our processing plant in
Qinzhou, China, and higher tolling
volumes to meet growing customer demand. Adjusted EBITDA of
$1.4 billion increased $1.1 billion as higher pricing and volumes more
than offset higher costs.
On February 22, 2023, Albemarle signed a definitive agreement with
MinRes to restructure its MARBL Lithium Joint Venture in
Australia to enable each partner
to deliver long-term value to its customers. Albemarle also obtained new investment by
MinRes in Albemarle's conversion
assets in China. MinRes will
acquire a 50% interest in Albemarle's 100%-owned Qinzhou and Meishan
plants in China.
2023 Energy Storage Outlook
Energy Storage net sales
are estimated to range between $6.9
to $8.4 billion. Energy Storage
volumes are projected to be up 30% to 40% in 2023 compared to 2022.
Full year realized pricing is expected to be up 20% to 30% vs. the
prior year, assuming flat lithium market pricing as of mid-April 2023. Adjusted EBITDA anticipated to
range between $2.7 and $3.4 billion as higher priced spodumene
inventories more than offset higher pricing.
Albemarle continues to expand
its global portfolio of conversion capacity and utilization of its
world-class resource portfolio:
Chile
– The Salar Yield Improvement Project
is on schedule for mechanical completion by the middle of 2023
Australia
– Kemerton I is operating and
producing product subject to customer qualification
– Kemerton II is progressing through
commissioning
– Reached final investment decision to
build Kemerton trains III & IV
China
– Meishan construction progressing on
budget and on schedule with mechanical completion expected in
2024
United States
– Richburg site in South Carolina selected for U.S. lithium
processing facility
– Kings
Mountain mine studies continue to progress
– Silver Peak new wells and expansion
projects continue to progress
Specialties Results
In
millions
|
Q1
2023
|
|
Q1
2022
|
|
$
Change
|
|
%
Change
|
Net Sales
|
$
418.8
|
|
$
446.1
|
|
$
(27.4)
|
|
(6.1) %
|
Adjusted
EBITDA
|
$
162.2
|
|
$
152.6
|
|
$
9.6
|
|
6.3 %
|
Specialties net sales for the first quarter of 2023 were
$418.8 million, a decrease of
$27.4 million (-6%) primarily due to
lower volumes (-15%), partially offset by increased pricing net of
FX (+9%) primarily in our lithium specialties division. Volumes
were impacted by weaker demand across the product portfolio.
Adjusted EBITDA of $162.2 million
increased $9.6 million as higher
pricing and lower freight costs were partially offset by lower
volumes.
2023 Specialties Outlook
Albemarle is reaffirming its 2023 outlook for
Specialties net sales to range between $1.8
billion to $1.9 billion, with
adjusted EBITDA estimated from $555
million to $585 million.
Adjusted EBITDA margins are expected to be approximately flat
year-over-year.
Ketjen Results
In
millions
|
Q1
2023
|
|
Q1
2022
|
|
$
Change
|
|
%
Change
|
Net Sales
|
$
217.8
|
|
$
217.9
|
|
$
(0.1)
|
|
— %
|
Adjusted
EBITDA
|
$
14.5
|
|
$
16.9
|
|
$
(2.4)
|
|
(14.0) %
|
Ketjen net sales of $217.8 million
for the first quarter of 2023 were flat compared to the previous
year due to higher pricing net of FX (+12%) offset by lower volumes
(-12%). Adjusted EBITDA of $14.5
million declined $2.4 million
due to higher raw material costs, combined with freeze related
downtime and timing of some shipments that were pushed into the
second quarter of 2023.
2023 Ketjen Outlook
Albemarle expects Ketjen net sales
in 2023 to range between $1.0 billion
and $1.1 billion, with adjusted
EBITDA in the range of $100 million
to $140 million. Adjusted EBITDA
guidance is up from prior guidance as the segment is benefiting
from a recovery in refining pricing and managing processing
costs.
Balance Sheet and Liquidity
As of March 31, 2023,
Albemarle had estimated liquidity
of approximately $3.3 billion,
including $1.6 billion of cash and
equivalents, the full $1.5 billion
under its revolver and $180.5 million
available on other credit lines. Total debt was $3.2 billion, representing our debt covenant net
debt to adjusted EBITDA of approximately 0.4 times.
Cash Flow and Capital Deployment
Cash from operations
of $721.0 million increased
$514.8 million versus the prior year
period. This was driven by increased adjusted EBITDA and dividends
received from equity investments, partially offset by working
capital changes, that were primarily due to the increase in
receivables and inventories from higher lithium pricing. Capital
expenditures of $415.6 million
increased by $183.9 million versus
the prior year period as the company invested in lithium and
bromine capacity to support growth.
Albemarle's primary capital
allocation priorities are to invest in organic and inorganic
opportunities to drive profitable growth, maintain its financial
flexibility and investment grade credit rating, and fund its
dividends.
Earnings Call
Date:
|
Thursday, May 4,
2023
|
Time:
|
9:00 AM Eastern
time
|
Dial-in
(U.S.):
|
1.833.470.1428
|
Dial-in
(International):
|
1.404.662.2808
|
Passcode:
|
741195
|
The company's earnings presentation and supporting material are
available on Albemarle's website
at https://investors.albemarle.com.
About Albemarle
Albemarle Corporation (NYSE:
ALB) leads the world in transforming essential resources into
critical ingredients for mobility, energy, connectivity, and
health. We partner to pioneer new ways to move, power, connect and
protect with people and planet in mind. A reliable and high-quality
global supply of lithium and bromine allow us to deliver advanced
solutions for our customers. Learn more about how the people
of Albemarle are enabling a more
resilient world at albemarle.com and on Twitter @AlbemarleCorp.
Albemarle regularly posts
information to www.albemarle.com, including notification of events,
news, financial performance, investor presentations and webcasts,
non-GAAP reconciliations, Securities and Exchange Commission
("SEC") filings and other information regarding the company, its
businesses and the markets it serves.
Forward-Looking Statements
This press release contains
statements concerning our expectations, anticipations and beliefs
regarding the future, which constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995. These forward-looking statements, which are based on
assumptions that we have made as of the date hereof and are subject
to known and unknown risks and uncertainties, often contain words
such as "anticipate," "believe," "estimate," "expect," "guidance,"
"intend," "may," "outlook," "should," "would," and "will".
Forward-looking statements may include statements regarding
expected: financial and operating results, production capacity,
volumes, and pricing, demand for Albemarle's products, capital projects,
acquisition and divestiture transactions, market and economic
trends, and all other information relating to matters that are not
historical facts. Factors that could cause Albemarle's actual results to differ
materially from the outlook expressed or implied in any
forward-looking statement include: changes in economic and business
conditions; financial and operating performance of customers;
timing and magnitude of customer orders; fluctuations in lithium
market pricing; production volume shortfalls; increased
competition; changes in the product demand; availability and cost
of raw materials and energy; technological change and development;
fluctuations in foreign currencies; changes in laws and government
regulation; regulatory actions, proceedings, claims or litigation;
cyber-security breaches, terrorist attacks, industrial accidents or
natural disasters; political unrest; changes in inflation or
interest rates; volatility in the debt and equity markets;
acquisition and divestiture transactions; timing and success of
projects; performance of Albemarle's partners in joint ventures and
other projects; changes in credit ratings; and the other factors
detailed from time to time in the reports Albemarle files with the SEC, including those
described under "Risk Factors" in Albemarle's most recent Annual Report on Form
10-K and any subsequently filed Quarterly Reports on Form 10-Q,
which are filed with the SEC and available on the investor section
of Albemarle's website
(investors.albemarle.com) and on the SEC's website at www.sec.gov.
These forward-looking statements speak only as of the date of this
press release. Albemarle assumes
no obligation to provide any revisions to any forward-looking
statements should circumstances change, except as otherwise
required by securities and other applicable laws.
Albemarle Corporation
and Subsidiaries
Consolidated Statements
of Income
(In Thousands Except
Per Share Amounts) (Unaudited)
|
|
Three Months
Ended
|
|
March
31,
|
|
2023
|
|
2022
|
Net
sales
|
$ 2,580,252
|
|
$ 1,127,728
|
Cost of goods
sold
|
1,303,712
|
|
678,698
|
Gross
profit
|
1,276,540
|
|
449,030
|
Selling, general and
administrative expenses
|
154,306
|
|
112,568
|
Research and
development expenses
|
20,471
|
|
16,083
|
Loss on sale of
interest in properties
|
—
|
|
8,400
|
Operating
profit
|
1,101,763
|
|
311,979
|
Interest and financing
expenses
|
(26,777)
|
|
(27,834)
|
Other income,
net
|
82,492
|
|
15,496
|
Income before income
taxes and equity in net income of unconsolidated
investments
|
1,157,478
|
|
299,641
|
Income tax
expense
|
276,963
|
|
80,530
|
Income before equity in
net income of unconsolidated investments
|
880,515
|
|
219,111
|
Equity in net income of
unconsolidated investments (net of tax)
|
396,188
|
|
62,436
|
Net income
|
1,276,703
|
|
281,547
|
Net income attributable
to noncontrolling interests
|
(38,123)
|
|
(28,164)
|
Net income attributable
to Albemarle Corporation
|
$ 1,238,580
|
|
$
253,383
|
Basic earnings per
share
|
$
10.57
|
|
$
2.16
|
Diluted earnings per
share
|
$
10.51
|
|
$
2.15
|
|
|
|
|
Weighted-average common
shares outstanding – basic
|
117,232
|
|
117,066
|
Weighted-average common
shares outstanding – diluted
|
117,841
|
|
117,653
|
Albemarle Corporation
and Subsidiaries
Condensed Consolidated
Balance Sheets
(In Thousands)
(Unaudited)
|
|
March
31,
|
|
December
31,
|
|
2023
|
|
2022
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
1,586,734
|
|
$
1,499,142
|
Trade accounts
receivable
|
1,351,915
|
|
1,190,970
|
Other accounts
receivable
|
312,560
|
|
185,819
|
Inventories
|
3,180,825
|
|
2,076,031
|
Other current
assets
|
225,541
|
|
234,955
|
Total current
assets
|
6,657,575
|
|
5,186,917
|
Property, plant and
equipment
|
9,830,257
|
|
9,354,330
|
Less accumulated
depreciation and amortization
|
2,476,768
|
|
2,391,333
|
Net property, plant
and equipment
|
7,353,489
|
|
6,962,997
|
Investments
|
1,391,229
|
|
1,150,553
|
Other assets
|
243,405
|
|
250,558
|
Goodwill
|
1,634,152
|
|
1,617,627
|
Other intangibles, net
of amortization
|
284,508
|
|
287,870
|
Total
assets
|
$ 17,564,358
|
|
$ 15,456,522
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable to
third parties
|
$
1,758,254
|
|
$
1,533,624
|
Accounts payable to
related parties
|
1,012,822
|
|
518,377
|
Accrued
expenses
|
403,336
|
|
505,894
|
Current portion of
long-term debt
|
2,167
|
|
2,128
|
Dividends
payable
|
46,753
|
|
46,116
|
Income taxes
payable
|
282,037
|
|
134,876
|
Total current
liabilities
|
3,505,369
|
|
2,741,015
|
Long-term
debt
|
3,233,393
|
|
3,214,972
|
Postretirement
benefits
|
33,062
|
|
32,751
|
Pension
benefits
|
160,343
|
|
159,571
|
Other noncurrent
liabilities
|
686,655
|
|
636,596
|
Deferred income
taxes
|
486,466
|
|
480,770
|
Commitments and
contingencies
|
|
|
|
Equity:
|
|
|
|
Albemarle Corporation
shareholders' equity:
|
|
|
|
Common
stock
|
1,173
|
|
1,172
|
Additional paid-in
capital
|
2,931,961
|
|
2,940,840
|
Accumulated other
comprehensive loss
|
(513,337)
|
|
(560,662)
|
Retained
earnings
|
6,792,938
|
|
5,601,277
|
Total Albemarle
Corporation shareholders' equity
|
9,212,735
|
|
7,982,627
|
Noncontrolling
interests
|
246,335
|
|
208,220
|
Total
equity
|
9,459,070
|
|
8,190,847
|
Total liabilities and
equity
|
$ 17,564,358
|
|
$ 15,456,522
|
Albemarle Corporation
and Subsidiaries
Selected Consolidated
Cash Flow Data
(In Thousands)
(Unaudited)
|
|
Three Months
Ended
March
31,
|
|
2023
|
|
2022
|
Cash and cash
equivalents at beginning of year
|
$
1,499,142
|
|
$ 439,272
|
Cash flows from
operating activities:
|
|
|
|
Net income
|
1,276,703
|
|
281,547
|
Adjustments to
reconcile net income to cash flows from operating
activities:
|
|
|
|
Depreciation and
amortization
|
87,271
|
|
66,574
|
Loss on sale of
interest in properties
|
—
|
|
8,400
|
Stock-based
compensation and other
|
10,540
|
|
4,245
|
Equity in net income
of unconsolidated investments (net of tax)
|
(396,188)
|
|
(62,436)
|
Dividends received
from unconsolidated investments and nonmarketable
securities
|
547,552
|
|
39,168
|
Pension and
postretirement benefit
|
1,954
|
|
(4,250)
|
Pension and
postretirement contributions
|
(2,825)
|
|
(3,890)
|
Unrealized (gain) loss
on investments in marketable securities
|
(45,732)
|
|
1,469
|
Deferred income
taxes
|
14,098
|
|
27,747
|
Working capital
changes
|
(764,071)
|
|
(219,397)
|
Non-cash transfer of
40% value of construction in progress of Kemerton plant
to MRL
|
7,665
|
|
65,100
|
Other, net
|
(15,987)
|
|
1,899
|
Net cash provided by
operating activities
|
720,980
|
|
206,176
|
Cash flows from
investing activities:
|
|
|
|
Capital
expenditures
|
(415,608)
|
|
(231,698)
|
(Purchases) sales of
marketable securities, net
|
(122,267)
|
|
3,751
|
Investments in equity
and other corporate investments
|
(1,133)
|
|
(146)
|
Net cash used in
investing activities
|
(539,008)
|
|
(228,093)
|
Cash flows from
financing activities:
|
|
|
|
Proceeds from
borrowings of credit agreements
|
—
|
|
280,000
|
Other debt repayments,
net
|
(713)
|
|
(166,615)
|
Dividends paid to
shareholders
|
(46,282)
|
|
(45,637)
|
Dividends paid to
noncontrolling interests
|
(53,145)
|
|
—
|
Proceeds from exercise
of stock options
|
81
|
|
419
|
Withholding taxes paid
on stock-based compensation award distributions
|
(18,617)
|
|
(10,422)
|
Other
|
—
|
|
(126)
|
Net cash (used in)
provided by financing activities
|
(118,676)
|
|
57,619
|
Net effect of foreign
exchange on cash and cash equivalents
|
24,296
|
|
(11,649)
|
Increase in cash and
cash equivalents
|
87,592
|
|
24,053
|
Cash and cash
equivalents at end of period
|
$
1,586,734
|
|
$ 463,325
|
Albemarle Corporation
and Subsidiaries
Consolidated Summary of
Segment Results
(In Thousands)
(Unaudited)
|
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2023
|
|
2022
|
Net
sales:
|
|
|
|
Energy
Storage
|
$ 1,943,682
|
|
$
463,704
|
Specialties
|
418,778
|
|
446,147
|
Ketjen
|
217,792
|
|
217,877
|
Total net
sales
|
$ 2,580,252
|
|
$ 1,127,728
|
|
|
|
|
Adjusted
EBITDA:
|
|
|
|
Energy
Storage
|
$ 1,406,181
|
|
$
285,247
|
Specialties
|
162,158
|
|
152,602
|
Ketjen
|
14,543
|
|
16,910
|
Total segment adjusted
EBITDA
|
1,582,882
|
|
454,759
|
Corporate
|
12,837
|
|
(22,829)
|
Total adjusted
EBITDA
|
$ 1,595,719
|
|
$
431,930
|
See accompanying non-GAAP reconciliations below.
Additional Information regarding Non-GAAP Measures
It
should be noted that adjusted net income attributable to Albemarle
Corporation, adjusted diluted earnings per share, non-operating
pension and other post-employment benefit ("OPEB") items per
diluted share, non-recurring and other unusual items per diluted
share, adjusted effective income tax rates, EBITDA, adjusted EBITDA
(on a consolidated basis), EBITDA margin and adjusted EBITDA margin
are financial measures that are not required by, or presented in
accordance with, accounting principles generally accepted in
the United States, or GAAP. These
non-GAAP measures should not be considered as alternatives to Net
income attributable to Albemarle Corporation ("earnings") or other
comparable measures calculated and reported in accordance with
GAAP. These measures are presented here to provide additional
useful measurements to review the company's operations, provide
transparency to investors and enable period-to-period comparability
of financial performance. The company's chief operating decision
maker uses these measures to assess the ongoing performance of the
company and its segments, as well as for business and enterprise
planning purposes.
A description of other non-GAAP financial measures that
Albemarle uses to evaluate its
operations and financial performance, and reconciliation of these
non-GAAP financial measures to the most directly comparable
financial measures calculated and reported in accordance with GAAP
can be found on the following pages of this press release, which is
also is available on Albemarle's
website at https://investors.albemarle.com. The company does not
provide a reconciliation of forward-looking non-GAAP financial
measures to the most directly comparable financial measures
calculated and reported in accordance with GAAP, as the company is
unable to estimate significant non-recurring or unusual items
without unreasonable effort. The amounts and timing of these items
are uncertain and could be material to the company's results
calculated in accordance with GAAP.
ALBEMARLE
CORPORATION AND SUBSIDIARIES
Non-GAAP Reconciliations
(Unaudited)
See below for a reconciliation of adjusted net income
attributable to Albemarle Corporation, EBITDA and adjusted EBITDA
(on a consolidated basis), which are non-GAAP financial measures,
to Net income attributable to Albemarle Corporation ("earnings"),
the most directly comparable financial measure calculated and
reported in accordance with GAAP. Reconciliation of adjusted EBITDA
on a segment basis is also provided. Adjusted net income
attributable to Albemarle Corporation is defined as net income
before the non-recurring, other unusual and non-operating pension
and other post-employment benefit (OPEB) items as listed below. The
non-recurring and unusual items may include acquisition and
integration related costs, gains or losses on sales of businesses,
restructuring charges, facility divestiture charges, certain
litigation and arbitration costs and charges, and other significant
non-recurring items. EBITDA is defined as net income attributable
to Albemarle Corporation before interest and financing expenses,
income tax expense, and depreciation and amortization. Adjusted
EBITDA is defined as EBITDA plus or minus the non-recurring, other
unusual and non-operating pension and OPEB items as listed
below.
|
Three Months
Ended
|
|
March
31,
|
|
2023
|
|
2022
|
In thousands, except
percentages and per share amounts
|
$
|
|
% of
net
sales
|
|
$
|
|
% of
net
sales
|
Net income attributable
to Albemarle Corporation
|
$
1,238,580
|
|
|
|
$ 253,383
|
|
|
Add back:
|
|
|
|
|
|
|
|
Non-operating pension
and OPEB items (net of tax)
|
374
|
|
|
|
(4,139)
|
|
|
Non-recurring and
other unusual items (net of tax)
|
(22,774)
|
|
|
|
30,903
|
|
|
Adjusted net income
attributable to Albemarle Corporation
|
$
1,216,180
|
|
|
|
$ 280,147
|
|
|
|
|
|
|
|
|
|
|
Adjusted diluted
earnings per share
|
$
10.32
|
|
|
|
$
2.38
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common
shares outstanding – diluted
|
117,841
|
|
|
|
117,653
|
|
|
|
|
|
|
|
|
|
|
Net income attributable
to Albemarle Corporation
|
$
1,238,580
|
|
48.0 %
|
|
$ 253,383
|
|
22.5 %
|
Add back:
|
|
|
|
|
|
|
|
Interest and financing
expenses
|
26,777
|
|
1.0 %
|
|
27,834
|
|
2.5 %
|
Income tax
expense
|
276,963
|
|
10.7 %
|
|
80,530
|
|
7.1 %
|
Depreciation and
amortization
|
87,271
|
|
3.4 %
|
|
66,574
|
|
5.9 %
|
EBITDA
|
1,629,591
|
|
63.2 %
|
|
428,321
|
|
38.0 %
|
Non-operating pension
and OPEB items
|
601
|
|
— %
|
|
(5,280)
|
|
(0.5) %
|
Non-recurring and
other unusual items
|
(34,473)
|
|
(1.3) %
|
|
8,889
|
|
0.8 %
|
Adjusted
EBITDA
|
$
1,595,719
|
|
61.8 %
|
|
$ 431,930
|
|
38.3 %
|
|
|
|
|
|
|
|
|
Net sales
|
$
2,580,252
|
|
|
|
$
1,127,728
|
|
|
Non-operating pension and OPEB items, consisting of
mark-to-market actuarial gains/losses, settlements/curtailments,
interest cost and expected return on assets, are not allocated to
Albemarle's operating segments and
are included in the Corporate category. In addition, the company
believes that these components of pension cost are mainly driven by
market performance, and the company manages these separately from
the operational performance of the company's businesses. In
accordance with GAAP, these non-operating pension and OPEB items
are included in Other income (expenses), net. Non-operating pension
and OPEB items were as follows (in thousands):
|
Three Months
Ended
|
|
March
31,
|
|
2023
|
|
2022
|
Interest
cost
|
$
9,010
|
|
$
5,932
|
Expected return on
assets
|
(8,409)
|
|
(11,212)
|
Total
|
$
601
|
|
$ (5,280)
|
In addition to the non-operating pension and OPEB items
disclosed above, the company has identified certain other items and
excluded them from Albemarle's
adjusted net income calculation for the periods presented. A
listing of these items, as well as a detailed description of each
follows below (per diluted share):
|
Three Months
Ended
|
|
March
31,
|
|
2023
|
|
2022
|
Acquisition and
integration related costs(1)
|
$
0.03
|
|
$
0.01
|
Loss on sale of
interest in properties(2)
|
—
|
|
0.07
|
Mark-to-market gain on
public equity securities(3)
|
(0.29)
|
|
—
|
Other(4)
|
0.04
|
|
(0.01)
|
Tax related
items(5)
|
0.03
|
|
0.19
|
Total non-recurring
and other unusual items
|
$
(0.19)
|
|
$
0.26
|
|
|
(1)
|
Costs related to the
acquisition, integration and divestitures for various significant
projects, recorded in
Selling, general and administrative expenses for the three months
ended March 31, 2023 and 2022 were
$5.1 million and $1.7 million ($4.0 million and $1.3 million after
income taxes, or $0.03 and $0.01 per
share), respectively.
|
|
|
(2)
|
Included in Loss on
sale of interest in properties for the three months ended March 31,
2022 is an
expense of $8.4 million ($0.07 per share after no income tax
impact) related to a post-measurement
period Wodgina acquisition purchase price adjustment for a revised
estimate of the obligation to construct
the lithium hydroxide conversion assets in Kemerton due to cost
overruns from supply chain, labor and
COVID-19 pandemic related issues.
|
|
|
(3)
|
Gain of $45.8 million
($34.4 million after income taxes, or $0.29 per share) recorded in
Other income, net
for the three months ended March 31, 2023, resulting from the
increase in fair value of investments in
public equity securities.
|
|
|
(4)
|
Other adjustments for
the three months ended March 31, 2023 included amounts recorded
in:
|
|
- Selling, general
and administrative expenses - 1.9 million of charges primarily for
environmental
reserves at sites not part of our operations and $0.7 million of
facility closure expenses related to
offices in Germany.
- Other income, net - $3.6 million of asset
retirement obligation charges primarily for a site not part
of our operations
|
|
|
After income taxes,
these net gains totaled $4.8 million, or $0.04 per
share.
|
|
|
|
Other adjustments for
the three months ended March 31, 2022 included amounts recorded
in:
|
|
- Selling, general
and administrative expenses - $4.3 million of gains from the sale
of legacy
properties not part of our operations, partially offset by $2.8
million of charges for environmental
reserves at sites not part of our operations and $0.7 million of
facility closure expenses related to
offices in Germany.
- Other income, net - $0.6 million gain related
to a settlement received from a legal matter in a prior
period.
|
|
|
After income taxes,
these charges totaled $0.9 million, or $0.01 per share.
|
|
|
(5)
|
Included in Income tax
expense for the three months ended March 31, 2023 are discrete net
tax
expenses of $2.9 million, or $0.03 per share primarily related to
foreign return to provisions offset by
excess tax benefits realized from stock-based compensation
arrangements.
|
|
|
|
Included in Income tax
expense for the three months ended March 31, 2022 are discrete net
tax
expenses of $20.4 million, or $0.18 per share related to global
intangible low-taxed income associated
with a payment made in 2022 for the settlement of a legacy legal
matter. In addition, Income tax expense
included discrete net tax expenses of $1.6 million, or $0.01 per
share. The discrete net expense was
primarily related to foreign return to provisions, partially offset
by a benefit for excess tax benefits realized
from stock-based compensation arrangements..
|
See below for a reconciliation of the adjusted effective income
tax rate, the non-GAAP financial measure, to the effective income
tax rate, the most directly comparable financial measure calculated
and reported in accordance with GAAP (in thousands, except
percentages).
|
Income before
income taxes and
equity in net income
of unconsolidated
investments
|
|
Income tax
expense
|
|
Effective income
tax
rate
|
Three months ended
March 31, 2023
|
|
|
|
|
|
As reported
|
$
1,157,478
|
|
$
276,963
|
|
23.9 %
|
Non-recurring, other
unusual and non-operating pension and OPEB
items
|
(33,872)
|
|
(11,472)
|
|
|
As adjusted
|
$
1,123,606
|
|
$
265,491
|
|
23.6 %
|
|
|
|
|
|
|
Three months ended
March 31, 2022
|
|
|
|
|
|
As reported
|
$
299,641
|
|
$
80,530
|
|
26.9 %
|
Non-recurring, other
unusual and non-operating pension and OPEB
items
|
3,609
|
|
(23,155)
|
|
|
As adjusted
|
$
303,250
|
|
$
57,375
|
|
18.9 %
|
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SOURCE Albemarle Corporation