CHARLOTTE, N.C., Nov. 6, 2024
/PRNewswire/ -- Albemarle Corporation (NYSE: ALB), a global leader
in providing essential elements for mobility, energy, connectivity
and health, today announced its results for the third quarter ended
September 30, 2024.
Third-Quarter 2024 and Recent
Highlights
(Unless otherwise stated, all percentage
changes represent year-over-year comparisons)
- Net sales of $1.4 billion, with
volumes in Energy Storage and Specialties up 16% and 4%,
respectively
- Net loss of ($1.1) billion, or
($9.45) per diluted share
attributable to common shareholders, which included pre-tax charges
of $861 million primarily related to
previously announced capital project asset write-offs
- Adjusted diluted loss per share attributable to common
shareholders of ($1.55)
- Adjusted EBITDA of $211 million;
Specialties adjusted EBITDA up 22% year-over-year and Ketjen
adjusted EBITDA up 134% year-over-year
- Cash from operations of $241
million, representing >100% operating cash flow
conversion(a), driven by favorable working capital
management
- Maintaining full-year 2024 outlook considerations due to
productivity and cost improvements, higher volumes, and the
performance of long-term contracts
- Progressed comprehensive review of cost and operating
structure; additional details include:
- Implementing new operating structure to maintain long-term
competitiveness, streamlining organization to an integrated
functional model
- Driving additional cost and productivity improvements of
$300 million to $400 million expected per year encompassing
broad-based actions that include workforce reductions and
manufacturing improvements
- Reducing global workforce by an expected 6-7%, representing
approximately 15% of non-manufacturing workforce
- Decreasing FY 2025 capital expenditures by approximately 50%
versus FY 2024 to an anticipated range of $800 million to $900
million
|
(a)
|
Defined as Operating
Cash Flow divided by Adj. EBITDA
|
"Our steadfast focus on execution allowed us to deliver solid
third-quarter results and maintain our full-year 2024 corporate
outlook considerations as cost improvements, higher volumes, and
the performance of our long-term contracts offset lower market
pricing," said Kent Masters,
Albemarle's chairman and CEO.
Masters continued, "Through our strategic review of Albemarle's cost and operating structure, we
have identified significant opportunities to reduce cost, improve
productivity and decrease capital spending while ensuring we
efficiently serve customers and our end-markets. These actions are
designed to increase Albemarle's
financial flexibility, strengthen our core capabilities and
position the company to maintain its leadership position
long-term."
Additional Actions in Connection with Comprehensive Review of
Cost and Operating Structure
During the third quarter, Albemarle progressed the previously announced
comprehensive review of its cost and operating structure, building
on the actions announced with the company's second quarter 2024
earnings release. Effective November 1,
2024, Albemarle implemented
a new operating structure, which included transitioning to an
integrated functional model designed to increase agility, deliver
significant cost savings and maintain long-term competitiveness.
The company is also announcing today a global workforce reduction
expected to impact 6-7% of total headcount to drive significant
cost-out and productivity actions.
The annual run-rate cost savings of actions in connection with
the comprehensive review is expected to be in the range of
$300 million to $400 million driven by elimination of
redundancies, reduced management layers, productivity benefits and
optimized manufacturing costs.
These savings are in addition to cost savings of over
$100 million announced and executed
this year. During the fourth quarter of 2024, the company expects
to record a charge primarily related to severance and related
benefit costs.
Full-year 2025 capital expenditures are expected to be in the
range of $800 million to $900 million, with the majority of that spend
aligned with sustaining existing assets and resources and the
remainder allocated to select growth projects and high-return,
quick payback improvements.
Total Corporate Outlook Considerations
The company is maintaining its prior full-year 2024 outlook
considerations, which are based on observed lithium market price
scenarios. The previously published $12-15/kg range is expected to apply even when
assuming recent market pricing persists for the remainder of the
year, due to enterprise-wide cost improvements, strong volume
growth, and Energy Storage contract performance. Total company
full-year 2024 net sales are expected to be at the lower-end of
that range due to lower recent market pricing. Full-year adjusted
EBITDA is expected to be towards the middle of that range, driven
by productivity and cost benefits and higher equity income.
All other corporate outlook considerations are unchanged.
|
Total Corporate FY
2024E
Including Energy
Storage Scenarios
|
|
Observed market price
case(a)
|
Recent
pricing
|
Q4 2023
average
|
H2 2023
average
|
|
Average lithium market
price ($/kg LCE)(a)
|
$12-15
|
~$20
|
~$25
|
|
Net sales
|
$5.5 - $6.2
billion
|
$6.1 - $6.8
billion
|
$6.9 - $7.6
billion
|
|
Adjusted
EBITDA(b)(c)
|
$0.9 - $1.2
billion
|
$1.6 - $1.8
billion
|
$2.3 - $2.6
billion
|
|
Weighted-average common
shares outstanding (diluted)(d)
|
~118 million
|
~118 million
|
135 - 139
million
|
|
(a)
|
Price represents blend
of relevant Asia and China market indices for the periods
referenced.
|
|
(b)
|
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.
|
|
(c)
|
Presented under updated
adjusted EBITDA definition as of 2024. FY23 adjusted EBITDA under
updated definition would be $3.5B. See Non-GAAP Reconciliations for
further details.
|
|
(d)
|
Each quarter, Albemarle
will report the more dilutive of either: 1) adding the underlying
shares in the mandatory to the share count or 2) reducing
Albemarle's net income to common shareholders by the mandatory
dividend. The 20-day volume-weighted average common share price
will be used in determining the underlying shares to be added to
the share count.
|
Third Quarter 2024 Results
|
In millions, except
per share amounts
|
Q3
2024
|
|
Q3
2023
|
|
$
Change
|
|
%
Change
|
|
Net sales
|
$
1,354.7
|
|
$
2,310.6
|
|
$ (955.9)
|
|
(41.4) %
|
|
Net (loss) income
attributable to Albemarle Corporation
|
$
(1,069.0)
|
|
$
302.5
|
|
$
(1,371.5)
|
|
(453.4) %
|
|
Adjusted
EBITDA(a)(b)
|
$
211.5
|
|
$
653.0
|
|
$ (441.5)
|
|
(67.6) %
|
|
Diluted (loss) earnings
per share attributable to common shareholders
|
$
(9.45)
|
|
$
2.57
|
|
$ (12.02)
|
|
(467.7) %
|
|
Non-recurring and other unusual items(a)
|
7.90
|
|
0.17
|
|
|
|
|
|
Adjusted diluted (loss)
earnings per share attributable to common
shareholders(a)(c)
|
$
(1.55)
|
|
$
2.74
|
|
$
(4.29)
|
|
(156.6) %
|
|
|
|
(a)
|
See Non-GAAP
Reconciliations for further details.
|
|
(b)
|
For comparability, 2023
figures presented under adjusted EBITDA definition that the company
adopted beginning in 2024.
|
|
(c)
|
Totals may not add due
to rounding.
|
Net sales for the third quarter of 2024 were $1.4 billion compared to $2.3 billion for the prior-year quarter, a
year-over-year decline of 41% driven primarily by lower pricing in
Energy Storage, partially offset by higher volumes in Energy
Storage (+16%) and Specialties (+4%). Net loss attributable to
Albemarle of ($1.1) billion decreased year-over-year by
$1.4 billion. During the third
quarter of 2024, the company recorded pre-tax charges totaling
$861 million related to restructuring
charges and asset write-offs. Adjusted EBITDA of $211 million declined by $441 million from the prior-year quarter
primarily due to margin compression and reduced equity earnings as
a result of lower pricing in the lithium value chain, which more
than offset favorable volume growth and cost and productivity
benefits.
The effective income tax rate for the third quarter of 2024 was
(9.4)% compared to 5.4% in the same period of 2023. On an adjusted
basis, the effective income tax rates were (12.9)% and 3.1% for the
third quarters of 2024 and 2023, respectively, with the decrease
primarily due to changes in geographic income mix and the impact of
valuation allowances for losses in consolidated entities in
Australia and certain entities in
China.
Energy Storage Results
|
In
millions
|
Q3
2024
|
|
Q3
2023
|
|
$
Change
|
|
%
Change
|
|
Net Sales
|
$
767.3
|
|
$
1,697.2
|
|
$
(929.9)
|
|
(54.8) %
|
|
Adjusted
EBITDA
|
$
142.9
|
|
$
604.9
|
|
$
(462.1)
|
|
(76.4) %
|
Energy Storage net sales for the third quarter of 2024 were
$767 million, a decrease of
$930 million, or 55%, due to lower
pricing (-71%), which more than offset higher volumes (+16%)
related to the ramp of lithium projects, including the La Negra
expansion in Chile and processing
plants in Qinzhou and Meishan in China, and sales of chemical-grade spodumene.
Adjusted EBITDA of $143 million
decreased $462 million, driven by
margin compression from lower lithium market pricing and reduced
equity earnings, which more than offset favorable volume
growth.
Specialties Results
|
In
millions
|
Q3
2024
|
|
Q3
2023
|
|
$
Change
|
|
%
Change
|
|
Net Sales
|
$
342.4
|
|
$
352.7
|
|
$
(10.3)
|
|
(2.9) %
|
|
Adjusted
EBITDA
|
$
56.3
|
|
$
46.3
|
|
$
10.0
|
|
21.5 %
|
Specialties net sales for the third quarter of 2024 were
$342 million, a decrease of
$10 million, or 3%, primarily due to
lower prices (-6%), which more than offset higher volumes (+4%).
Adjusted EBITDA of $56 million
increased $10 million versus the
year-ago quarter. Net sales and adjusted EBITDA were sequentially
higher as well, driven by productivity benefits and improved
end-market demand.
Ketjen Results
|
In
millions
|
Q3
2024
|
|
Q3
2023
|
|
$
Change
|
|
%
Change
|
|
Net Sales
|
$
245.0
|
|
$
260.7
|
|
$
(15.7)
|
|
(6.0) %
|
|
Adjusted
EBITDA
|
$
35.5
|
|
$
15.2
|
|
$
20.3
|
|
134.0 %
|
Ketjen net sales for the third quarter of 2024 were $245 million, down 6% compared to the prior-year
quarter as higher prices (+2%) were more than offset by lower
volumes (-8%), primarily in fluid catalytic cracking. Adjusted
EBITDA of $35 million increased
$20 million, driven by higher volume
in clean fuels technology and lower materials and utilities
costs.
Cash Flow and Capital Deployment
Year-to-date cash from operations of $701
million decreased $722 million
versus the prior-year period, driven by lower adjusted EBITDA and
reduced dividends received from equity investments, partially
offset by inflows from working capital.
Year-to-date capital expenditures of $1.3
billion decreased by $135
million versus the prior-year period reflecting the impacts
of decisions that have stopped or slowed spending. Capital
expenditures for the full-year 2024 are now expected to be at the
lower-end of the prior outlook range of $1.7
billion to $1.8 billion. The
company announced today that it expects capital expenditures for
the full-year 2025 to be in the range of $800 million to $900
million, down approximately 50% year-over-year.
Balance Sheet and Liquidity
As of September 30, 2024, Albemarle had estimated liquidity of
approximately $3.4 billion, including
$1.7 billion of cash and cash
equivalents, $1.5 billion available
under its revolver and $223 million
available under other credit lines. Total debt was $3.6 billion, representing a debt covenant net
debt to adjusted EBITDA of approximately 3.5 times. On October 31, 2024, Albemarle proactively extended and re-shaped
its existing debt covenant waiver through the second quarter of
2026 to bolster its financial flexibility while the company pursues
its operating structure and cost-out actions and navigates current
market conditions.
Earnings Call
|
Date:
|
Thursday, November 7,
2024
|
|
Time:
|
8:00 AM Eastern
time
|
|
Dial-in
(U.S.):
|
1-800-590-8290
|
|
Dial-in
(International):
|
1-240-690-8800
|
|
Conference
ID:
|
ALBQ3
|
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) is a global leader 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 X (formerly 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," "scenario," "should," "would," and
"will". Forward-looking statements may include statements
regarding: our 2024 company and segment outlooks, including
expected market pricing of lithium and spodumene and other
underlying assumptions and outlook considerations; expected capital
expenditure amounts and the corresponding impact on cash flow;
market pricing of lithium carbonate equivalent and spodumene; plans
and expectations regarding other projects and activities, cost
reductions and accounting charges, 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 prices; production volume shortfalls; increased
competition; changes in 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 (Loss) Income
(In Thousands Except
Per Share Amounts) (Unaudited)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Net sales
|
$ 1,354,692
|
|
$ 2,310,596
|
|
$ 4,145,813
|
|
$ 7,261,038
|
|
Cost of goods
sold
|
1,458,726
|
|
2,255,662
|
|
4,221,487
|
|
5,371,077
|
|
Gross (loss)
profit
|
(104,034)
|
|
54,934
|
|
(75,674)
|
|
1,889,961
|
|
Selling, general and
administrative expenses
|
154,253
|
|
172,109
|
|
482,052
|
|
716,046
|
|
Restructuring charges
and asset write-offs
|
828,146
|
|
1,757
|
|
1,156,522
|
|
9,196
|
|
Research and
development expenses
|
22,397
|
|
21,082
|
|
66,699
|
|
62,972
|
|
Operating (loss)
profit
|
(1,108,830)
|
|
(140,014)
|
|
(1,780,947)
|
|
1,101,747
|
|
Interest and financing
expenses
|
(47,760)
|
|
(29,332)
|
|
(120,916)
|
|
(81,686)
|
|
Other (expenses)
income, net
|
(22,256)
|
|
11,182
|
|
61,311
|
|
147,628
|
|
(Loss) income before
income taxes and equity in net income of unconsolidated
investments
|
(1,178,846)
|
|
(158,164)
|
|
(1,840,552)
|
|
1,167,689
|
|
Income tax expense
(benefit)
|
110,853
|
|
(8,551)
|
|
76,472
|
|
311,399
|
|
(Loss) income before
equity in net income of unconsolidated investments
|
(1,289,699)
|
|
(149,613)
|
|
(1,917,024)
|
|
856,290
|
|
Equity in net income of
unconsolidated investments (net of tax)
|
229,058
|
|
470,306
|
|
696,436
|
|
1,417,545
|
|
Net (loss)
income
|
(1,060,641)
|
|
320,693
|
|
(1,220,588)
|
|
2,273,835
|
|
Net income attributable
to noncontrolling interests
|
(8,351)
|
|
(18,160)
|
|
(34,154)
|
|
(82,679)
|
|
Net (loss) income
attributable to Albemarle Corporation
|
(1,068,992)
|
|
302,533
|
|
(1,254,742)
|
|
2,191,156
|
|
Mandatory convertible
preferred stock dividends
|
(41,687)
|
|
—
|
|
(94,959)
|
|
—
|
|
Net (loss) income
attributable to Albemarle Corporation common
shareholders
|
$
(1,110,679)
|
|
$
302,533
|
|
$
(1,349,701)
|
|
$ 2,191,156
|
|
Basic (loss) earnings
per share attributable to common shareholders
|
$
(9.45)
|
|
$
2.58
|
|
$ (11.49)
|
|
$
18.68
|
|
Diluted (loss) earnings
per share attributable to common shareholders
|
$
(9.45)
|
|
$
2.57
|
|
$ (11.49)
|
|
$
18.60
|
|
|
|
|
|
|
|
|
|
Weighted-average common
shares outstanding – basic
|
117,535
|
|
117,349
|
|
117,505
|
|
117,304
|
|
Weighted-average common
shares outstanding – diluted
|
117,535
|
|
117,783
|
|
117,505
|
|
117,797
|
|
Albemarle Corporation
and Subsidiaries
Condensed Consolidated
Balance Sheets
(In Thousands)
(Unaudited)
|
|
|
September
30,
|
|
December
31,
|
|
2024
|
|
2023
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
1,664,519
|
|
$
889,900
|
|
Trade accounts
receivable
|
749,792
|
|
1,213,160
|
|
Other accounts
receivable
|
268,696
|
|
509,097
|
|
Inventories
|
1,657,688
|
|
2,161,287
|
|
Other current
assets
|
328,915
|
|
443,475
|
|
Total current
assets
|
4,669,610
|
|
5,216,919
|
|
Property, plant and
equipment
|
12,376,369
|
|
12,233,757
|
|
Less accumulated
depreciation and amortization
|
3,117,917
|
|
2,738,553
|
|
Net property,
plant and equipment
|
9,258,452
|
|
9,495,204
|
|
Investments
|
1,179,598
|
|
1,369,855
|
|
Other assets
|
463,690
|
|
297,087
|
|
Goodwill
|
1,637,758
|
|
1,629,729
|
|
Other intangibles, net
of amortization
|
246,078
|
|
261,858
|
|
Total
assets
|
$ 17,455,186
|
|
$ 18,270,652
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts payable to
third parties
|
$
1,070,717
|
|
$
1,537,859
|
|
Accounts payable to
related parties
|
152,093
|
|
550,186
|
|
Accrued
expenses
|
513,122
|
|
544,835
|
|
Current portion of
long-term debt
|
3,012
|
|
625,761
|
|
Dividends
payable
|
61,262
|
|
46,666
|
|
Income taxes
payable
|
110,514
|
|
255,155
|
|
Total current
liabilities
|
1,910,720
|
|
3,560,462
|
|
Long-term
debt
|
3,565,990
|
|
3,541,002
|
|
Postretirement
benefits
|
25,959
|
|
26,247
|
|
Pension
benefits
|
143,666
|
|
150,312
|
|
Other noncurrent
liabilities
|
791,823
|
|
769,100
|
|
Deferred income
taxes
|
526,367
|
|
558,430
|
|
Commitments and
contingencies
|
|
|
|
|
Equity:
|
|
|
|
|
Albemarle Corporation
shareholders' equity:
|
|
|
|
|
Common
stock
|
1,176
|
|
1,174
|
|
Mandatory convertible
preferred stock
|
2,235,105
|
|
—
|
|
Additional paid-in
capital
|
2,978,387
|
|
2,952,517
|
|
Accumulated other
comprehensive loss
|
(469,770)
|
|
(528,526)
|
|
Retained
earnings
|
5,495,697
|
|
6,987,015
|
|
Total Albemarle
Corporation shareholders' equity
|
10,240,595
|
|
9,412,180
|
|
Noncontrolling
interests
|
250,066
|
|
252,919
|
|
Total
equity
|
10,490,661
|
|
9,665,099
|
|
Total
liabilities and equity
|
$ 17,455,186
|
|
$ 18,270,652
|
|
Albemarle Corporation
and Subsidiaries
Selected Consolidated
Cash Flow Data
(In Thousands)
(Unaudited)
|
|
|
Nine Months
Ended
September
30,
|
|
2024
|
|
2023
|
|
Cash and cash
equivalents at beginning of year
|
$ 889,900
|
|
$
1,499,142
|
|
Cash flows from
operating activities:
|
|
|
|
|
Net (loss)
income
|
(1,220,588)
|
|
2,273,835
|
|
Adjustments to
reconcile net (loss) income to cash flows from operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
425,532
|
|
285,801
|
|
Non-cash restructuring
and asset write-offs
|
1,075,888
|
|
—
|
|
Stock-based
compensation and other
|
24,443
|
|
29,465
|
|
Equity in net income
of unconsolidated investments (net of tax)
|
(696,436)
|
|
(1,417,545)
|
|
Dividends received
from unconsolidated investments and nonmarketable
securities
|
348,358
|
|
1,939,225
|
|
Pension and
postretirement expense
|
3,806
|
|
5,925
|
|
Pension and
postretirement contributions
|
(13,339)
|
|
(12,243)
|
|
Realized loss on
investments in marketable securities
|
33,746
|
|
—
|
|
Unrealized loss (gain)
on investments in marketable securities
|
26,982
|
|
(36,740)
|
|
Deferred income
taxes
|
(112,777)
|
|
(182,764)
|
|
Working capital
changes
|
823,194
|
|
(1,332,042)
|
|
Other, net
|
(17,415)
|
|
(129,377)
|
|
Net cash provided by
operating activities
|
701,394
|
|
1,423,540
|
|
Cash flows from
investing activities:
|
|
|
|
|
Acquisitions, net of
cash acquired
|
—
|
|
(43,207)
|
|
Capital
expenditures
|
(1,330,062)
|
|
(1,465,193)
|
|
Sales (purchases) of
marketable securities, net
|
83,651
|
|
(205,952)
|
|
Investments in equity
investments and nonmarketable securities
|
(217)
|
|
(1,279)
|
|
Net cash used in
investing activities
|
(1,246,628)
|
|
(1,715,631)
|
|
Cash flows from
financing activities:
|
|
|
|
|
Proceeds from issuance
of mandatory convertible preferred stock
|
2,236,750
|
|
—
|
|
Repayments of
long-term debt and credit agreements
|
(84,403)
|
|
—
|
|
Proceeds from
borrowings of long-term debt and credit agreements
|
84,403
|
|
300,000
|
|
Other debt repayments,
net
|
(629,434)
|
|
172,791
|
|
Dividends paid to
common shareholders
|
(140,929)
|
|
(140,251)
|
|
Dividends paid to
mandatory convertible preferred shareholders
|
(81,059)
|
|
—
|
|
Dividends paid to
noncontrolling interests
|
(37,176)
|
|
(79,393)
|
|
Proceeds from exercise
of stock options
|
114
|
|
117
|
|
Withholding taxes paid
on stock-based compensation award distributions
|
(10,892)
|
|
(26,166)
|
|
Other
|
(2,758)
|
|
(191)
|
|
Net cash provided by
financing activities
|
1,334,616
|
|
226,907
|
|
Net effect of foreign
exchange on cash and cash equivalents
|
(14,763)
|
|
167,710
|
|
Increase in cash and
cash equivalents
|
774,619
|
|
102,526
|
|
Cash and cash
equivalents at end of period
|
$
1,664,519
|
|
$
1,601,668
|
|
Albemarle Corporation
and Subsidiaries
Consolidated Summary of
Segment Results
(In Thousands)
(Unaudited)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Net
sales:
|
|
|
|
|
|
|
|
|
Energy
Storage
|
$
767,291
|
|
$ 1,697,163
|
|
$ 2,398,299
|
|
$ 5,403,910
|
|
Specialties
|
342,376
|
|
352,722
|
|
993,041
|
|
1,142,802
|
|
Ketjen
|
245,025
|
|
260,711
|
|
754,473
|
|
714,326
|
|
Total net
sales
|
$ 1,354,692
|
|
$ 2,310,596
|
|
$ 4,145,813
|
|
$ 7,261,038
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA:
|
|
|
|
|
|
|
|
|
Energy
Storage
|
$
142,887
|
|
$
604,948
|
|
$
623,862
|
|
$ 3,337,720
|
|
Specialties
|
56,273
|
|
46,307
|
|
155,629
|
|
268,665
|
|
Ketjen
|
35,473
|
|
15,159
|
|
95,288
|
|
72,584
|
|
Total segment adjusted
EBITDA
|
234,633
|
|
666,414
|
|
874,779
|
|
3,678,969
|
|
Corporate
|
(23,135)
|
|
(13,442)
|
|
14,315
|
|
1,949
|
|
Total adjusted
EBITDA
|
$
211,498
|
|
$
652,972
|
|
$
889,094
|
|
$ 3,680,918
|
See accompanying non-GAAP reconciliations below.
Additional Information regarding Non-GAAP Measures
It should be noted that adjusted net (loss) income attributable
to Albemarle Corporation, adjusted net (loss) income attributable
to Albemarle Corporation common shareholders, adjusted diluted
(loss) earnings per share attributable to common shareholders,
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 (loss) 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 (loss) income
attributable to Albemarle Corporation, adjusted net (loss) income
attributable to Albemarle Corporation common shareholders, EBITDA
and adjusted EBITDA (on a consolidated basis), which are non-GAAP
financial measures, to Net (loss) income attributable to Albemarle
Corporation ("earnings"), the most directly comparable financial
measure calculated and reported in accordance with GAAP. Adjusted
net (loss) income attributable to Albemarle Corporation common
shareholders is defined as net (loss) income after mandatory
convertible preferred stock dividends, but 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 (loss) 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
proportionate share of Windfield Holdings income tax expense,
non-recurring, other unusual and non-operating pension and OPEB
items as listed below.
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
In thousands, except
percentages and per
share
amounts
|
$
|
|
% of
net
sales
|
|
$
|
|
% of
net
sales
|
|
$
|
|
% of
net
sales
|
|
$
|
|
% of
net
sales
|
|
Net (loss) income
attributable to Albemarle
Corporation
|
($1,068,992)
|
|
|
|
$ 302,533
|
|
|
|
($1,254,742)
|
|
|
|
$
2,191,156
|
|
|
|
Add back:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-operating pension
and OPEB items
(net of
tax)
|
(344)
|
|
|
|
386
|
|
|
|
(1,031)
|
|
|
|
1,141
|
|
|
|
Non-recurring and
other unusual items
(net of
tax)
|
928,771
|
|
|
|
19,674
|
|
|
|
1,203,313
|
|
|
|
210,094
|
|
|
|
Adjusted net (loss)
income attributable to
Albemarle
Corporation
|
(140,565)
|
|
|
|
322,593
|
|
|
|
(52,460)
|
|
|
|
2,402,391
|
|
|
|
Mandatory convertible preferred stock
dividends
|
(41,687)
|
|
|
|
—
|
|
|
|
(94,959)
|
|
|
|
—
|
|
|
|
Adjusted net (loss)
income attributable to
Albemarle Corporation common shareholders
|
($182,252)
|
|
|
|
$ 322,593
|
|
|
|
($147,419)
|
|
|
|
$
2,402,391
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted diluted (loss)
earnings per share
attributable to common shareholders
|
$ (1.55)
|
|
|
|
$ 2.74
|
|
|
|
$ (1.25)
|
|
|
|
$
20.39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
weighted-average common shares
outstanding –
diluted
|
117,535
|
|
|
|
117,783
|
|
|
|
117,505
|
|
|
|
117,797
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
attributable to Albemarle
Corporation
|
($1,068,992)
|
|
(78.9) %
|
|
$ 302,533
|
|
13.1 %
|
|
($1,254,742)
|
|
(30.3) %
|
|
$
2,191,156
|
|
30.2 %
|
|
Add back:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and financing
expenses
|
47,760
|
|
3.5 %
|
|
29,332
|
|
1.3 %
|
|
120,916
|
|
2.9 %
|
|
81,686
|
|
1.1 %
|
|
Income tax expense
(benefit)
|
110,853
|
|
8.2 %
|
|
(8,551)
|
|
(0.4) %
|
|
76,472
|
|
1.8 %
|
|
311,399
|
|
4.3 %
|
|
Depreciation and
amortization
|
163,502
|
|
12.1 %
|
|
105,445
|
|
4.6 %
|
|
425,532
|
|
10.3 %
|
|
285,801
|
|
3.9 %
|
|
EBITDA
|
(746,877)
|
|
(55.1) %
|
|
428,759
|
|
18.6 %
|
|
(631,822)
|
|
(15.2) %
|
|
2,870,042
|
|
39.5 %
|
|
Proportionate share of
Windfield income
tax expense
|
99,523
|
|
7.3 %
|
|
199,685
|
|
8.6 %
|
|
292,992
|
|
7.1 %
|
|
599,646
|
|
8.3 %
|
|
Non-operating pension
and OPEB items
|
(331)
|
|
— %
|
|
620
|
|
— %
|
|
(993)
|
|
— %
|
|
1,833
|
|
— %
|
|
Non-recurring and
other unusual items
|
859,183
|
|
63.4 %
|
|
23,908
|
|
1.0 %
|
|
1,228,917
|
|
29.6 %
|
|
209,397
|
|
2.9 %
|
|
Adjusted
EBITDA
|
$211,498
|
|
15.6 %
|
|
$ 652,972
|
|
28.3 %
|
|
$ 889,094
|
|
21.4 %
|
|
$
3,680,918
|
|
50.7 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
1,354,692
|
|
|
|
$
2,310,596
|
|
|
|
$
4,145,813
|
|
|
|
$
7,261,038
|
|
|
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, net. Non-operating pension and OPEB
items were as follows (in thousands):
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Interest
cost
|
$
8,523
|
|
$
9,054
|
|
$ 25,529
|
|
$ 27,091
|
|
Expected return on
assets
|
(8,854)
|
|
(8,434)
|
|
(26,522)
|
|
(25,258)
|
|
Total
|
$
(331)
|
|
$
620
|
|
$
(993)
|
|
$
1,833
|
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
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Restructuring charges
and asset write-offs(1)
|
$
7.91
|
|
$
0.01
|
|
$
9.99
|
|
$
0.06
|
|
Acquisition and
integration related costs(2)
|
—
|
|
0.07
|
|
0.03
|
|
0.14
|
|
Loss (gain) in fair
value of public equity securities(3)
|
0.03
|
|
0.17
|
|
0.50
|
|
(0.21)
|
|
Legal
accrual(4)
|
—
|
|
—
|
|
—
|
|
1.82
|
|
Other(5)
|
(0.04)
|
|
(0.09)
|
|
(0.23)
|
|
(0.03)
|
|
Tax related
items(6)
|
—
|
|
0.01
|
|
(0.05)
|
|
—
|
|
Total non-recurring
and other unusual items
|
$
7.90
|
|
$
0.17
|
|
$
10.24
|
|
$
1.78
|
|
(1)
|
The Company took
several actions during the nine months ended September 30, 2024 as
part of a broader effort that will focus on preserving its
world-class resource advantages, optimizing its global conversion
network, improving the Company's cost competitiveness and
efficiency, reducing capital intensity and enhancing the Company's
financial flexibility. Those actions included stopping construction
of Kemerton Trains 3 and 4, as well as certain other capital
projects, and placing Kemerton Train 2 in care and maintenance. As
a result, the Company recorded restructuring charges as described
above of $16.5 million in Cost of goods sold during the three and
nine months ended September 30, 2024, and $828.1 million and $1.2
billion during the three and nine months ended September 30, 2024,
respectively, in Restructuring charges and asset write-offs. In
addition, losses of $16.2 million and $21.5 million were recorded
in Other (expenses) income, net for the three and nine months ended
September 30, 2024, respectively, related to these actions. In
total this resulted in after-tax losses of $930.0 million and $1.2
billion, or $7.91 and $9.99 per share for the three and nine months
ended September 30, 2024, respectively. The tax impact includes a
valuation allowance to reverse the tax benefits associated with the
expenses recorded in Australia. During the three and nine months
ended September 30, 2023, $1.8 million and $9.2 million of
separation and other severance costs to employees in Corporate and
the Ketjen business were recorded in Selling, general and
administrative expenses ($1.3 million and $7.0
million after income taxes, or $0.01 and $0.06 per share),
respectively.
|
|
|
|
|
(2)
|
Costs related to the
acquisition, integration and divestitures for various significant
projects, recorded in Selling, general and administrative expenses
for the three and nine months ended September 30, 2024 were $0.4
million and $3.9 million ($0.4 million and $3.1 million after
income taxes, or less than $0.01 and $0.03 per share),
respectively, and for the three and nine months ended September 30,
2023 were $10.0 million and $21.7 million ($7.8 million and $16.8
million after income taxes, or $0.07 and $0.14 per share),
respectively.
|
|
|
|
|
(3)
|
Losses of $5.0 million
and $32.2 million recorded in Other (expenses) income, net
resulting from the net change in fair value of investments in
public equity securities for the three and nine months ended
September 30, 2024, respectively, and a loss of $33.7 million
recorded in Other (expenses) income, net for the nine months ended
September 30, 2024 resulting from the sale of investments in public
equity securities ($3.9 million and $58.9 million after income
taxes, or $0.03 and $0.50 per share). Loss (gain) of $26.4 million
and ($34.4) million ($20.5 million and ($25.2) million after income
taxes, or $0.17 and ($0.21) per share) recorded in Other (expenses)
income, net for the three and nine months ended September 30, 2023,
respectively, resulting from the net change in fair value of
investments in public equity securities.
|
|
|
|
|
(4)
|
Accrual of $218.5
million ($214.9 million after income taxes, or $1.82 per share)
recorded in Selling, general and administrative expenses resulting
from agreements in principle to resolve a previously disclosed
legal matter with the DOJ and SEC related to conduct in our Ketjen
business prior to 2018.
|
|
|
|
|
(5)
|
Other adjustments for
the three months ended September 30, 2024 included amounts recorded
in:
|
|
•
|
Selling, general and
administrative expenses - $0.1 million of expenses related to
certain historical legal matters.
|
|
•
|
Other (expenses)
income, net - $9.2 million gain from PIK dividends of preferred
equity in a Grace subsidiary, partially offset by $2.0 million of a
loss resulting from the adjustment of indemnification related to a
previously disposed business.
|
|
After income taxes,
these net gains totaled $5.2 million, or $0.04 per
share.
|
|
|
|
|
Other adjustments for
the three months ended September 30, 2023 included amounts recorded
in:
|
|
•
|
Selling, general and
administrative expenses - $0.7 million of facility closure expenses
related to offices in Germany and $0.3 million of a loss from the
sale of legacy properties not part of our operations.
|
|
•
|
Other (expenses)
income, net - $8.2 million gain in the fair value of preferred
equity of a Grace subsidiary and a $7.2 million gain resulting from
insurance proceeds of a prior legal matter.
|
|
After income taxes,
these net gains totaled $11.2 million, or $0.09 per
share.
|
|
|
|
|
Other adjustments for
the nine months ended September 30, 2024 included amounts recorded
in:
|
|
•
|
Cost of goods sold -
$1.4 million of expenses related to non-routine labor and
compensation related costs that are outside normal compensation
arrangements.
|
|
•
|
Selling, general and
administrative expenses - $5.3 million of expenses related to
certain historical legal and environmental matters.
|
|
•
|
Other (expenses)
income, net - $26.8 million gain from PIK dividends of preferred
equity in a Grace subsidiary, a $17.3 million gain primarily from
the sale of assets at a site not part of our operations, a $0.6
million gain from an updated cost estimate of an environmental
reserve at a site not part of our operations and a $0.4 million net
gain primarily resulting from the adjustment of indemnification
related to previously disposed businesses, partially offset by $2.9
million of charges for asset retirement obligations at a site not
part of our operations.
|
|
After income taxes,
these net gains totaled $26.2 million, or $0.23 per
share.
|
|
|
|
|
Other adjustments for
the nine months ended September 30, 2023 included amounts recorded
in:
|
|
•
|
Selling, general and
administrative expenses - $2.1 million of facility closure expenses
related to offices in Germany, $1.9 million of charges primarily
for environmental reserves at sites not part of our operations and
$1.0 million primarily related to shortfall contributions for a
multiemployer plan financial improvement plan.
|
|
•
|
Other (expenses)
income, net - $10.9 million gain in the fair value of preferred
equity of a Grace subsidiary and a $7.2 million gain resulting from
insurance proceeds of a prior legal matter, partially offset by
$3.9 million of a loss resulting from the adjustment of
indemnification related to previously disposed businesses and $3.6
million of charges for asset retirement obligations at a site not
part of our operations.
|
|
After income taxes,
these net gains totaled $3.7 million, or $0.03 per
share.
|
|
|
|
|
(6)
|
Included in Income tax
expense for the three and nine months ended September 30, 2024 are
discrete net tax benefits of $0.4 million, or less than $0.01 per
share, and $6.1 million, or $0.05 per share, respectively,
primarily related to the reduction in a foreign tax reserve and
excess tax benefits realized from stock-based compensation
arrangements.
|
|
|
|
|
Included in Income tax
expense for the three and nine months ended September 30, 2023 are
discrete net tax expenses of $1.3 million, or $0.01 per share and
net tax benefits of $0.3 million, or less than $0.01 per share,
respectively. The net expense primarily related to foreign return
to provisions offset by 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).
|
(Loss) Income
before income taxes
and equity in net
income of
unconsolidated
investments
|
|
Income tax
expense
(benefit)
|
|
Effective income
tax
rate
|
|
Three months ended
September 30, 2024
|
|
|
|
|
|
|
As reported
|
$
(1,178,846)
|
|
$
110,853
|
|
(9.4) %
|
|
Non-recurring, other
unusual and non-operating pension and OPEB items
|
858,852
|
|
(69,575)
|
|
|
|
As adjusted
|
$
(319,994)
|
|
$
41,278
|
|
(12.9) %
|
|
|
|
|
|
|
|
Three months ended
September 30, 2023
|
|
|
|
|
|
|
As reported
|
$
(158,164)
|
|
$
(8,551)
|
|
5.4 %
|
|
Non-recurring, other
unusual and non-operating pension and OPEB items
|
24,528
|
|
4,468
|
|
|
|
As adjusted
|
$
(133,636)
|
|
$
(4,083)
|
|
3.1 %
|
|
|
|
|
|
|
|
Nine months ended
September 30, 2024
|
|
|
|
|
|
|
As reported
|
$
(1,840,552)
|
|
$
76,472
|
|
(4.2) %
|
|
Non-recurring, other
unusual and non-operating pension and OPEB items
|
1,227,924
|
|
25,642
|
|
|
|
As adjusted
|
$
(612,628)
|
|
$
102,114
|
|
(16.7) %
|
|
|
|
|
|
|
|
Nine months ended
September 30, 2023
|
|
|
|
|
|
|
As reported
|
$
1,167,689
|
|
$
311,399
|
|
26.7 %
|
|
Non-recurring, other
unusual and non-operating pension and OPEB items
|
211,230
|
|
(5)
|
|
|
|
As adjusted
|
$
1,378,919
|
|
$
311,394
|
|
22.6 %
|
As noted above, beginning in 2024, the company changed its
definition of adjusted EBITDA for financial accounting purposes.
The updated definition includes Albemarle's share of the pre-tax earnings of
the Talison joint venture, whereas the prior definition included
Albemarle's share of Talison
earnings net of tax. See below for a reconciliation of adjusted
EBITDA (on a consolidated basis), the non-GAAP financial measure,
to Net income attributable to Albemarle Corporation ("earnings"),
the most directly comparable financial measure calculated and
reported in accordance with GAAP, as if it were presented under the
new definition for the year ended December
31, 2023.
|
Net income attributable
to Albemarle Corporation
|
$
1,573,476
|
|
Depreciation and
amortization
|
429,944
|
|
Interest and financing
expenses
|
116,072
|
|
Income tax
expense
|
430,277
|
|
Proportionate share of
Windfield income tax expense
|
779,703
|
|
Gain on sale of
business/interest in properties, net
|
(71,190)
|
|
Acquisition and
integration related costs
|
26,767
|
|
Goodwill
impairment
|
6,765
|
|
Non-operating pension
and OPEB items
|
(7,971)
|
|
Mark-to-market gain on
public equity securities
|
44,732
|
|
Legal
accrual
|
218,510
|
|
Other
|
(1,097)
|
|
Total adjusted
EBITDA
|
$
3,545,988
|
Media Contact: Peter
Smolowitz, +1 (980) 308-6310,
media@albemarle.com
Investor Relations Contact: +1 (980)
299-5700, invest@albemarle.com
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SOURCE Albemarle Corporation