CHARLOTTE, N.C., May 5, 2021 /PRNewswire/ -- Albemarle
Corporation (NYSE: ALB) today announced its results for the
first quarter ended March 31,
2021.
First Quarter 2021 Highlights
(Unless otherwise
stated, all percent changes are based on year-over-year
comparisons)
- Net income of $95.7 million, or
$0.84 per diluted share; Adjusted
diluted EPS of $1.10, an increase of
10%
- Net sales of $829.3 million, an
increase of 12%
- Adjusted EBITDA of $230.1 million
an increase of 17%
- Full year 2021 guidance unchanged
- Entered into a definitive agreement to sell the Fine Chemistry
Services business to W. R. Grace
& Co. for proceeds of approximately $570
million
- Completed $1.5 billion public
equity offering to accelerate profitable growth; reduced debt,
providing financial flexibility to execute strategy
- Signed the U.N. Global Compact, aligning our sustainability
efforts with those of the international business community
"We were pleased with our performance this quarter, achieving a
17% year-over-year increase in adjusted EBITDA, driven by strong
sales from our Lithium and Bromine businesses," said Albemarle CEO
Kent Masters. "We successfully and
safely managed through the impact of the U.S. Gulf Coast winter
storm on our Bromine and Catalysts businesses. As we look to expand
our earnings potential, we continue to focus on execution of our
growth strategy and are in the final stages of two lithium projects
which will double our conversion capacity to approximately 175,000
metric tons. Additionally, we expect to start approving Wave 3
expansion projects during the second quarter."
Outlook
Albemarle continues to expect
its full year 2021 operating performance to improve modestly
relative to full year 2020, assuming continued recovery from the
global economic downturn. While the total company guidance has not
changed, from a GBU perspective, the outlook for our Lithium
business has improved and for our Catalysts business our
expectations are lower, while the outlook for our Bromine business
is unchanged.
|
FY 2021
Guidance
|
Net sales
|
$3.2 - $3.3
billion
|
Adjusted
EBITDA
|
$810 - $860
million
|
Adjusted EBITDA
Margin
|
25% - 26%
|
Adjusted Diluted
EPS
|
$3.25 -
$3.65
|
Net Cash from
Operations
|
$475 - $575
million
|
Capital
Expenditures
|
$850 - $950
million
|
COVID-19 Response
Albemarle's cross-functional
Global Response Team continues to meet regularly to address
employee health and safety and operational challenges. Our priority
is always the health and well-being of our employees, customers,
and communities. Our focus has shifted from managing an immediate
global crisis to building in the flexibility needed to adjust for
regional differences and changing conditions.
First Quarter Results
In millions,
except per share amounts
|
Q1
2021
|
|
Q1
2020
|
|
$
Change
|
|
%
Change
|
Net sales
|
$
|
829.3
|
|
|
$
|
738.8
|
|
|
$
|
90.4
|
|
|
12.2
|
%
|
Net income
attributable to Albemarle Corporation
|
$
|
95.7
|
|
|
$
|
107.2
|
|
|
$
|
(11.5)
|
|
|
(10.8)
|
%
|
Adjusted
EBITDA(a)
|
$
|
230.1
|
|
|
$
|
196.4
|
|
|
$
|
33.7
|
|
|
17.2
|
%
|
Diluted earnings per
share
|
$
|
0.84
|
|
|
$
|
1.01
|
|
|
$
|
(0.17)
|
|
|
(16.8)
|
%
|
Non-operating pension and OPEB items(a)
|
(0.04)
|
|
|
(0.02)
|
|
|
|
|
|
Non-recurring and other unusual items(a)
|
0.29
|
|
|
0.01
|
|
|
|
|
|
Adjusted diluted
earnings per share(b)
|
$
|
1.10
|
|
|
$
|
1.00
|
|
|
$
|
0.10
|
|
|
10.0
|
%
|
|
|
(a)
|
See Non-GAAP
Reconciliations for further details.
|
(b)
|
Totals may not add
due to rounding.
|
Net sales of $829.3 million
increased by $90.4 million compared
to the prior year quarter, primarily driven by increased sales
across all three core business segments as discussed below.
Adjusted EBITDA of $230.1 million
increased by $33.7 million from the
prior year quarter benefiting from several Lithium customers that
accelerated orders under long-term agreements, as well as favorable
volume and customer mix in our
Bromine business, partially offset by the impact of the U.S. Gulf
Coast winter storm to the Bromine and Catalysts businesses. Net
income attributable to Albemarle
of $95.7 million decreased by
$11.5 million from the prior year
primarily due to higher one-time interest and financing costs
related to our recent equity offering and debt tender.
The effective income tax rate for Q1 2021 was 17.9% compared to
16.0% in the same period in 2020. On an adjusted basis, the
effective income tax rates were 17.5% and 16.7% for the first
quarter of 2021 and 2020, respectively. The difference is largely
due to discrete tax expense recorded in Q1 2021 for an
out-of-period adjustment.
Business Segment Results
Lithium
In
millions
|
Q1
2021
|
|
Q1
2020
|
|
$
Change
|
|
%
Change
|
Net Sales
|
$
|
279.0
|
|
|
$
|
236.8
|
|
|
$
|
42.2
|
|
|
17.8
|
%
|
Adjusted
EBITDA
|
$
|
106.4
|
|
|
$
|
78.6
|
|
|
$
|
27.8
|
|
|
35.4
|
%
|
Lithium net sales of $279.0
million increased $42.2
million primarily driven by higher volumes, as some
customers accelerated orders under long-term agreements, offset by
lower average pricing for carbonate and technical grade. Adjusted
EBITDA of $106.4 million increased
$27.8 million primarily due to
increased net sales. Strong Q1 2021 margins reflect sales of
lower cost 2020 inventories.
Current Trends: FY 2021 volumes are expected to be
higher year-over-year due to North American plant restarts,
productivity improvements, and tolling. Average realized pricing is
expected to increase sequentially but remain flat compared to 2020.
We expect higher costs related to project start-ups, partially
offset by productivity improvements.
Bromine Specialties
In
millions
|
Q1
2021
|
|
Q1
2020
|
|
$
Change
|
|
%
Change
|
Net Sales
|
$
|
280.4
|
|
|
$
|
231.6
|
|
|
$
|
48.9
|
|
|
21.1
|
%
|
Adjusted
EBITDA
|
$
|
94.6
|
|
|
$
|
83.3
|
|
|
$
|
11.4
|
|
|
13.7
|
%
|
Bromine net sales of $280.4
million increased $48.9
million driven by demand for products across the portfolio
and a favorable customer mix. Adjusted EBITDA of $94.6 million increased $11.4 million due to increased net sales and was
partially offset by a $6.4 million
impact from the U.S. Gulf Coast winter storm. Cost savings
initiatives and pricing helped offset raw materials cost
increases.
Current Trends: We continue to expect FY 2021
results to be modestly higher than the previous year due to
continued economic recovery and improvements in certain end
markets, including electronics, and building and construction,
along with on-going cost savings initiatives and pricing. The
winter storm in the U.S. Gulf Coast during Q1 led to lost
production at the Magnolia,
Arkansas site, which is expected to impact sales and
adjusted EBITDA in mid-2021.
Catalysts
In
millions
|
Q1
2021
|
|
Q1
2020
|
|
$
Change
|
|
%
Change
|
Net Sales
|
$
|
220.2
|
|
|
$
|
207.2
|
|
|
$
|
13.0
|
|
|
6.3
|
%
|
Adjusted
EBITDA
|
$
|
25.4
|
|
|
$
|
47.5
|
|
|
$
|
(22.0)
|
|
|
(46.4)
|
%
|
Catalysts net sales of $220.2
million increased $13.0
million owing to higher volumes compared to the previous
year. Hydroprocessing Catalysts (HPC) volumes increased due
to timing of shipments offset by
lower Fluid Catalytic Cracking (FCC) volumes related to the impact
of the winter storm on our customers' requirements. Adjusted EBITDA
of $25.4 million declined
$22.0 million as a result of a
$26.2 million cost impact from the
U.S. Gulf Coast winter storm on two of our Houston-based plants and lower prices,
slightly offset by cost savings initiatives. First quarter 2020
results were overstated by $11.7
million due to incorrect cost of goods sold for inventory
values which were corrected the following quarter.
Current Trends: We expect 2021 adjusted EBITDA to
be lower year-over-year due to the impact of the winter storm, FCC
order delays, product mix, and the previously disclosed change in
order patterns from a large North American customer.
All Other
In
millions
|
Q1
2021
|
|
Q1
2020
|
|
$
Change
|
|
%
Change
|
Net Sales
|
$
|
49.6
|
|
|
$
|
63.2
|
|
|
$
|
(13.6)
|
|
|
(21.5)
|
%
|
Adjusted
EBITDA
|
$
|
21.5
|
|
|
$
|
22.8
|
|
|
$
|
(1.3)
|
|
|
(5.9)
|
%
|
Other operations represents our FCS business. FCS net sales of
$49.6 million declined $13.6 million and adjusted EBITDA of $21.5 million declined $1.3 million. The FCS business tends to be
contract driven and can vary quarter-to-quarter.
On February 25, 2021, we signed a
definitive agreement to sell the FCS business to W. R. Grace & Co. for proceeds of
approximately $570 million. The transaction is expected to
close in the second quarter of 2021.
Balance Sheet and Liquidity
As of March 31, 2021, Albemarle had estimated liquidity of
approximately $2.2 billion, including
$569.9 million of cash and
equivalents, the full $1.0 billion
available under our revolver, $500.0
million remaining under our delayed draw term loan and
$131.2 million on other available
credit lines. Total debt was $2.0
billion, representing net debt to adjusted EBITDA of
approximately 1.7 times. The recently completed $1.5 billion debt repayment supports our
financial flexibility to accelerate growth and maintain an
Investment Grade credit rating.
Cash Flow and Capital Deployment
Cash from operations for the three months ended March 31, 2021, of $157.9
million increased $2.9 million
versus the prior year as higher revenues in each of our reportable
segments more than offset working capital outflows in 2021. Capital
expenditures of $179.7 million
decreased by approximately $35.0
million versus the prior year as the company nears
completion of its Wave 2 Lithium expansion projects.
Our primary capital allocation priorities are to grow
profitably, fund our dividend, and maintain our financial
flexibility and our Investment Grade credit rating.
In February, the board declared a quarterly dividend of
$0.39 per share, an increase over the
quarterly dividend paid in 2020. This is our 27th consecutive year
of dividend increase.
Our share repurchase authorization remains in place; however,
there are no near-term plans to execute share buybacks. We have
discontinued efforts to sell our PCS business and will continue to
operate this business within our portfolio.
Earnings Call
Date:
|
Thursday, May 6,
2021
|
Time:
|
9:00 AM Eastern
time
|
Dial-in
(U.S.):
|
844-347-1034
|
Dial-in
(International):
|
209-905-5910
|
Passcode:
|
9167449
|
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), headquartered in Charlotte, N.C., is a global specialty
chemicals company with leading positions in lithium, bromine and
refining catalysts. We think beyond business-as-usual to power the
potential of companies in many of the world's largest and most
critical industries, such as energy, electronics, and
transportation. We actively pursue a sustainable approach to
managing our diverse global footprint of world-class resources. In
conjunction with our highly experienced and talented global teams,
our deep-seated values, and our collaborative customer
relationships, we create value-added and performance-based
solutions that enable a safer and more sustainable future.
We regularly post information to www.albemarle.com, including
notification of events, news, financial performance, investor
presentations and webcasts, non-GAAP reconciliations, SEC filings
and other information regarding our company, its businesses and the
markets it serves.
Forward-Looking Statements
Some of the information presented in this press release, the
conference call and discussions that follow, including, without
limitation, information related to product development, production
capacity, committed volumes, market trends, pricing, financial
flexibility, expected growth, anticipated return on opportunities,
earnings and demand for our products, input costs, productivity
improvements, surcharges, tax rates, stock repurchases, dividends,
cash flow generation, costs and cost synergies, capital projects,
future acquisition and divestiture transactions, economic trends,
outlook and all other information relating to matters that are not
historical facts may constitute forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. Actual results could differ materially from the views
expressed. Factors that could cause actual results to differ
materially from the outlook expressed or implied in any
forward-looking statement include, without limitation: changes in
economic and business conditions; changes in financial and
operating performance of our major customers and industries and
markets served by us; the timing of orders received from customers;
the gain or loss of significant customers; competition from other
manufacturers; changes in the demand for our products or the
end-user markets in which our products are sold; limitations or
prohibitions on the manufacture and sale of our products;
availability of raw materials; increases in the cost of raw
materials and energy, and our ability to pass through such
increases to our customers; changes in our markets in general;
fluctuations in foreign currencies; changes in laws and government
regulation impacting our operations or our products; the occurrence
of regulatory actions, proceedings, claims or litigation; the
occurrence of cyber-security breaches, terrorist attacks,
industrial accidents, natural disasters or climate change; hazards
associated with chemicals manufacturing; the inability to maintain
current levels of product or premises liability insurance or the
denial of such coverage; political unrest affecting the global
economy, including adverse effects from terrorism or hostilities;
political instability affecting our manufacturing operations or
joint ventures; changes in accounting standards; the inability to
achieve results from our global manufacturing cost reduction
initiatives as well as our ongoing continuous improvement and
rationalization programs; changes in the jurisdictional mix of our
earnings and changes in tax laws and rates; changes in monetary
policies, inflation or interest rates that may impact our ability
to raise capital or increase our cost of funds, impact the
performance of our pension fund investments and increase our
pension expense and funding obligations; volatility and
uncertainties in the debt and equity markets; technology or
intellectual property infringement, including cyber-security
breaches, and other innovation risks; decisions we may make in the
future; the ability to successfully execute, operate and integrate
acquisitions and divestitures; uncertainties as to the duration and
impact of the coronavirus (COVID-19) pandemic; and the other
factors detailed from time to time in the reports we file with the
SEC, including those described under "Risk Factors" in our most
recent Annual Report on Form 10-K any subsequently filed Quarterly
Reports on Form 10-Q. These forward-looking statements speak only
as of the date of this press release. We assume 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,
|
|
2021
|
|
2020
|
Net
sales
|
$
|
829,291
|
|
|
$
|
738,845
|
|
Cost of goods
sold
|
565,604
|
|
|
496,827
|
|
Gross
profit
|
263,687
|
|
|
242,018
|
|
Selling, general and
administrative expenses
|
93,187
|
|
|
101,877
|
|
Research and
development expenses
|
14,636
|
|
|
16,097
|
|
Operating
profit
|
155,864
|
|
|
124,044
|
|
Interest and
financing expenses
|
(43,882)
|
|
|
(16,885)
|
|
Other income,
net
|
11,312
|
|
|
8,314
|
|
Income before income
taxes and equity in net income of unconsolidated
investments
|
123,294
|
|
|
115,473
|
|
Income tax
expense
|
22,107
|
|
|
18,442
|
|
Income before equity
in net income of unconsolidated investments
|
101,187
|
|
|
97,031
|
|
Equity in net income
of unconsolidated investments (net of tax)
|
16,511
|
|
|
26,604
|
|
Net income
|
117,698
|
|
|
123,635
|
|
Net income
attributable to noncontrolling interests
|
(22,021)
|
|
|
(16,431)
|
|
Net income
attributable to Albemarle Corporation
|
$
|
95,677
|
|
|
$
|
107,204
|
|
Basic earnings per
share
|
$
|
0.85
|
|
|
$
|
1.01
|
|
Diluted earnings per
share
|
$
|
0.84
|
|
|
$
|
1.01
|
|
|
|
|
|
Weighted-average
common shares outstanding – basic
|
112,592
|
|
|
106,227
|
|
Weighted-average
common shares outstanding – diluted
|
113,330
|
|
|
106,512
|
|
Albemarle Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(In Thousands) (Unaudited)
|
March
31,
|
|
December
31,
|
|
2021
|
|
2020
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
569,859
|
|
|
$
|
746,724
|
|
Trade accounts
receivable
|
532,964
|
|
|
530,838
|
|
Other accounts
receivable
|
60,558
|
|
|
61,958
|
|
Inventories
|
685,779
|
|
|
750,237
|
|
Other current
assets
|
93,844
|
|
|
116,427
|
|
Assets held for
sale
|
66,390
|
|
|
—
|
|
Total
current assets
|
2,009,394
|
|
|
2,206,184
|
|
Property, plant and
equipment
|
7,433,593
|
|
|
7,427,641
|
|
Less accumulated
depreciation and amortization
|
2,043,264
|
|
|
2,073,016
|
|
Net property, plant
and equipment
|
5,390,329
|
|
|
5,354,625
|
|
Investments
|
663,448
|
|
|
656,244
|
|
Noncurrent assets
held for sale
|
50,683
|
|
|
—
|
|
Other
assets
|
212,258
|
|
|
219,268
|
|
Goodwill
|
1,629,169
|
|
|
1,665,520
|
|
Other intangibles,
net of amortization
|
335,021
|
|
|
349,105
|
|
Total
assets
|
$
|
10,290,302
|
|
|
$
|
10,450,946
|
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
492,532
|
|
|
$
|
483,221
|
|
Accrued
expenses
|
378,973
|
|
|
440,763
|
|
Current portion of
long-term debt
|
616
|
|
|
804,677
|
|
Dividends
payable
|
45,327
|
|
|
40,937
|
|
Liabilities held for
sale
|
4,068
|
|
|
—
|
|
Income taxes
payable
|
31,740
|
|
|
32,251
|
|
Total
current liabilities
|
953,256
|
|
|
1,801,849
|
|
Long-term
debt
|
2,030,032
|
|
|
2,767,381
|
|
Postretirement
benefits
|
47,817
|
|
|
48,075
|
|
Pension
benefits
|
316,652
|
|
|
340,818
|
|
Other noncurrent
liabilities
|
619,309
|
|
|
629,377
|
|
Deferred income
taxes
|
380,683
|
|
|
394,852
|
|
Commitments and
contingencies
|
|
|
|
Equity:
|
|
|
|
Albemarle Corporation
shareholders' equity:
|
|
|
|
Common
stock
|
1,167
|
|
|
1,069
|
|
Additional paid-in
capital
|
2,889,923
|
|
|
1,438,038
|
|
Accumulated other
comprehensive loss
|
(350,114)
|
|
|
(326,132)
|
|
Retained
earnings
|
3,205,408
|
|
|
3,155,252
|
|
Total
Albemarle Corporation shareholders' equity
|
5,746,384
|
|
|
4,268,227
|
|
Noncontrolling
interests
|
196,169
|
|
|
200,367
|
|
Total
equity
|
5,942,553
|
|
|
4,468,594
|
|
Total liabilities and
equity
|
$
|
10,290,302
|
|
|
$
|
10,450,946
|
|
Albemarle Corporation and Subsidiaries
Selected Consolidated Cash Flow Data
(In Thousands) (Unaudited)
|
Three Months
Ended March
31,
|
|
2021
|
|
2020
|
Cash and cash
equivalents at beginning of year
|
$
|
746,724
|
|
|
$
|
613,110
|
|
Cash flows from
operating activities:
|
|
|
|
Net income
|
117,698
|
|
|
123,635
|
|
Adjustments to
reconcile net income to cash flows from operating
activities:
|
|
|
|
Depreciation and
amortization
|
62,260
|
|
|
53,694
|
|
Stock-based
compensation and other
|
2,560
|
|
|
2,501
|
|
Equity in net income
of unconsolidated investments (net of tax)
|
(16,511)
|
|
|
(26,604)
|
|
Dividends received
from unconsolidated investments and nonmarketable
securities
|
4,950
|
|
|
—
|
|
Pension and
postretirement benefit
|
(4,226)
|
|
|
(1,719)
|
|
Pension and
postretirement contributions
|
(15,329)
|
|
|
(6,113)
|
|
Unrealized gain on
investments in marketable securities
|
(1,762)
|
|
|
(627)
|
|
Loss on early
extinguishment of debt
|
27,798
|
|
|
—
|
|
Deferred income
taxes
|
(19,384)
|
|
|
4,790
|
|
Working capital
changes
|
(49,185)
|
|
|
17,730
|
|
Non-cash transfer of
40% value of construction in progress of Kemerton plant to
MRL
|
43,223
|
|
|
36,723
|
|
Other, net
|
5,857
|
|
|
(48,956)
|
|
Net cash provided by
operating activities
|
157,949
|
|
|
155,054
|
|
Cash flows from
investing activities:
|
|
|
|
Acquisitions, net of
cash acquired
|
—
|
|
|
(22,572)
|
|
Capital
expenditures
|
(179,683)
|
|
|
(214,529)
|
|
Sales of marketable
securities, net
|
5,245
|
|
|
2,589
|
|
Investments in equity
and other corporate investments
|
(286)
|
|
|
(356)
|
|
Net cash used in
investing activities
|
(174,724)
|
|
|
(234,868)
|
|
Cash flows from
financing activities:
|
|
|
|
Proceeds from issuance
of common stock
|
1,453,888
|
|
|
—
|
|
Repayments of
long-term debt and credit agreements
|
(1,174,980)
|
|
|
—
|
|
Proceeds from
borrowings of credit agreements
|
—
|
|
|
250,000
|
|
Other debt repayments,
net
|
(325,159)
|
|
|
(151,872)
|
|
Fees related to early
extinguishment of debt
|
(23,719)
|
|
|
—
|
|
Dividends paid to
shareholders
|
(41,130)
|
|
|
(38,982)
|
|
Dividends paid to
noncontrolling interests
|
(26,219)
|
|
|
(14,286)
|
|
Proceeds from exercise
of stock options
|
1,183
|
|
|
10,195
|
|
Withholding taxes paid
on stock-based compensation award distributions
|
(6,860)
|
|
|
(3,825)
|
|
Other
|
(253)
|
|
|
(214)
|
|
Net cash (used in)
provided by financing activities
|
(143,249)
|
|
|
51,016
|
|
Net effect of foreign
exchange on cash and cash equivalents
|
(16,841)
|
|
|
(31,084)
|
|
Decrease in cash and
cash equivalents
|
(176,865)
|
|
|
(59,882)
|
|
Cash and cash
equivalents at end of period
|
$
|
569,859
|
|
|
$
|
553,228
|
|
Albemarle Corporation and Subsidiaries
Consolidated Summary of Segment Results
(In Thousands) (Unaudited)
|
Three Months
Ended
|
|
March
31,
|
|
2021
|
|
2020
|
Net
sales:
|
|
|
|
Lithium
|
$
|
278,976
|
|
|
$
|
236,818
|
|
Bromine
Specialties
|
280,447
|
|
|
231,592
|
|
Catalysts
|
220,243
|
|
|
207,207
|
|
All Other
|
49,625
|
|
|
63,228
|
|
Total net
sales
|
$
|
829,291
|
|
|
$
|
738,845
|
|
|
|
|
|
Adjusted
EBITDA:
|
|
|
|
Lithium
|
$
|
106,436
|
|
|
$
|
78,637
|
|
Bromine
Specialties
|
94,640
|
|
|
83,262
|
|
Catalysts
|
25,427
|
|
|
47,470
|
|
All Other
|
21,479
|
|
|
22,824
|
|
Corporate
|
(17,928)
|
|
|
(35,828)
|
|
Total adjusted
EBITDA
|
$
|
230,054
|
|
|
$
|
196,365
|
|
See accompanying non-GAAP reconciliations below.
Additional Information
It should be noted that adjusted net income attributable to
Albemarle Corporation, adjusted diluted earnings per share,
non-operating pension and OPEB items per diluted share,
non-recurring and other unusual items per diluted share, adjusted
effective income tax rates, EBITDA, adjusted EBITDA, 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"). These measures are presented here to
provide additional useful measurements to review our 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 we use
to evaluate our 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,
the 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.
Adjusted earnings is defined as earnings before the non-recurring,
other unusual and non-operating pension and other post-employment
benefit (OPEB) items as listed below. The non-recurring or unusual
items may include acquisition and integration related costs, gains
or losses on sales of businesses, restructuring charges, facility
divestiture charges and other significant non-recurring items.
EBITDA is defined as earnings before interest and financing
expenses, income taxes, and depreciation and amortization. Adjusted
EBITDA is defined as EBITDA and the non-recurring, other unusual
and non-operating pension and OPEB items as listed below.
|
Three Months
Ended
|
|
March
31,
|
In thousands, except
percentages and per share amounts
|
2021
|
|
2020
|
Net income
attributable to Albemarle Corporation
|
$
|
95,677
|
|
|
$
|
107,204
|
|
Add back:
|
|
|
|
Non-operating pension
and OPEB items (net of tax)
|
(4,267)
|
|
|
(2,311)
|
|
Non-recurring and
other unusual items (net of tax)
|
32,761
|
|
|
1,493
|
|
Adjusted net income
attributable to Albemarle Corporation
|
$
|
124,171
|
|
|
$
|
106,386
|
|
|
|
|
|
Adjusted diluted
earnings per share
|
$
|
1.10
|
|
|
$
|
1.00
|
|
|
|
|
|
Weighted-average
common shares outstanding – diluted
|
113,330
|
|
|
106,512
|
|
|
|
|
|
Net income
attributable to Albemarle Corporation
|
$
|
95,677
|
|
|
$
|
107,204
|
|
Add back:
|
|
|
|
Interest and financing
expenses
|
43,882
|
|
|
16,885
|
|
Income tax
expense
|
22,107
|
|
|
18,442
|
|
Depreciation and
amortization
|
62,260
|
|
|
53,694
|
|
EBITDA
|
223,926
|
|
|
196,225
|
|
Non-operating pension
and OPEB items
|
(5,465)
|
|
|
(2,908)
|
|
Non-recurring and
other unusual items
|
11,593
|
|
|
3,048
|
|
Adjusted
EBITDA
|
$
|
230,054
|
|
|
$
|
196,365
|
|
|
|
|
|
Net sales
|
$
|
829,291
|
|
|
$
|
738,845
|
|
EBITDA
margin
|
27.0
|
%
|
|
26.6
|
%
|
Adjusted EBITDA
margin
|
27.7
|
%
|
|
26.6
|
%
|
See below for a reconciliation of adjusted EBITDA on a segment
basis, the non-GAAP financial measure, to Net income attributable
to Albemarle Corporation, the most directly comparable financial
measure calculated and reported in accordance with GAAP (in
thousands, except percentages).
|
Lithium
|
|
Bromine
Specialties
|
|
Catalysts
|
|
Reportable
Segments
Total
|
|
All
Other
|
|
Corporate
|
|
Consolidated
Total
|
|
% of
Net
Sales
|
Three months ended
March 31, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Albemarle Corporation
|
$
|
74,630
|
|
|
$
|
82,113
|
|
|
$
|
12,916
|
|
|
$
|
169,659
|
|
|
$
|
20,016
|
|
|
$
|
(93,998)
|
|
|
$
|
95,677
|
|
|
11.5
|
%
|
Depreciation and
amortization
|
31,806
|
|
|
12,527
|
|
|
12,511
|
|
|
56,844
|
|
|
1,463
|
|
|
3,953
|
|
|
62,260
|
|
|
7.5
|
%
|
Non-recurring and
other unusual items
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,593
|
|
|
11,593
|
|
|
1.4
|
%
|
Interest and financing
expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
43,882
|
|
|
43,882
|
|
|
5.3
|
%
|
Income tax
expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22,107
|
|
|
22,107
|
|
|
2.7
|
%
|
Non-operating pension
and OPEB items
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,465)
|
|
|
(5,465)
|
|
|
(0.7)
|
%
|
Adjusted
EBITDA
|
$
|
106,436
|
|
|
$
|
94,640
|
|
|
$
|
25,427
|
|
|
$
|
226,503
|
|
|
$
|
21,479
|
|
|
$
|
(17,928)
|
|
|
$
|
230,054
|
|
|
27.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Albemarle Corporation
|
$
|
53,240
|
|
|
$
|
71,665
|
|
|
$
|
34,892
|
|
|
$
|
159,797
|
|
|
$
|
20,846
|
|
|
$
|
(73,439)
|
|
|
$
|
107,204
|
|
|
14.5
|
%
|
Depreciation and
amortization
|
25,397
|
|
|
11,597
|
|
|
12,578
|
|
|
49,572
|
|
|
1,978
|
|
|
2,144
|
|
|
53,694
|
|
|
7.2
|
%
|
Non-recurring and
other unusual items
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,048
|
|
|
3,048
|
|
|
0.4
|
%
|
Interest and financing
expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,885
|
|
|
16,885
|
|
|
2.3
|
%
|
Income tax
expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,442
|
|
|
18,442
|
|
|
2.5
|
%
|
Non-operating pension
and OPEB items
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,908)
|
|
|
(2,908)
|
|
|
(0.4)
|
%
|
Adjusted
EBITDA
|
$
|
78,637
|
|
|
$
|
83,262
|
|
|
$
|
47,470
|
|
|
$
|
209,369
|
|
|
$
|
22,824
|
|
|
$
|
(35,828)
|
|
|
$
|
196,365
|
|
|
26.6
|
%
|
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
our operating segments and are included in the Corporate category.
In addition, we believe that these components of pension cost are
mainly driven by market performance, and we manage these separately
from the operational performance of our businesses. In accordance
with GAAP, these non-operating pension and OPEB items are included
in Other (expenses) income, net. Non-operating pension and OPEB
items were as follows (in thousands):
|
Three Months
Ended
|
|
March
31,
|
|
2021
|
|
2020
|
Interest
cost
|
$
|
5,428
|
|
|
$
|
7,155
|
|
Expected return on
assets
|
(10,893)
|
|
|
(10,063)
|
|
Total
|
$
|
(5,465)
|
|
|
$
|
(2,908)
|
|
In addition to the non-operating pension and OPEB items
disclosed above, we have identified certain other items and
excluded them from our 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,
|
|
2021
|
|
2020
|
Restructuring and
other(1)
|
$
|
—
|
|
|
$
|
0.01
|
|
Acquisition and
integration related costs(2)
|
0.02
|
|
|
0.02
|
|
Loss on early
extinguishment of debt(3)
|
0.20
|
|
|
—
|
|
Other(4)
|
0.06
|
|
|
(0.01)
|
|
Discrete tax
items(5)
|
0.01
|
|
|
(0.01)
|
|
Total non-recurring
and other unusual items
|
$
|
0.29
|
|
|
$
|
0.01
|
|
(1)
|
In 2020, we recorded
severance expenses as part of business reorganization plans,
impacting each of our businesses and Corporate, primarily in the
U.S., Germany and with our Jordanian joint venture partner. During
the three months ended March 31, 2020, we recorded severance
expenses in Cost of goods sold, Selling, general and administrative
expenses and Net income attributable to noncontrolling interest of
$0.7 million, $1.5 million and a $0.3 million gain ($1.5 million
after income taxes, or $0.01 per share), respectively. The balance
of unpaid severance is recorded in Accrued expenses and is expected
to primarily be paid through 2021.
|
|
|
|
(2)
|
Costs related to the
acquisition, integration and potential divestitures for various
significant projects, recorded in Selling, general and
administrative expenses for the three months ended March 31, 2021
and 2020 of $2.2 million and $3.0 million ($1.7 million and $2.3
million after income taxes, or $0.02 per share in each case),
respectively.
|
|
|
|
(3)
|
Included in Interest
and financing expenses for the three-month period ended March 31,
2021 is a loss on early extinguishment of debt of
$27.8 million ($23.0 million after income taxes, or $0.20 per
share), representing the tender premiums, fees, unamortized
discounts and unamortized deferred financing costs from the
redemption of $1.5 billion in debt using the proceeds from the
issuance of common stock.
|
|
|
|
(4)
|
Other adjustments for
the three months ended March 31, 2021 included amounts recorded
in:
|
|
•
|
Selling, general and
administrative expenses - $5.5 million of expenses primarily
related to non-routine labor and compensation related costs that
are outside normal compensation arrangements.
|
|
•
|
Other income, net -
$3.9 million of expenses primarily related to asset retirement
obligation charges to update of an estimate at a site formerly
owned by Albemarle.
|
|
After income taxes,
these charges totaled $7.1 million, or $0.06 per share.
|
|
|
|
|
Other adjustments for
the three months ended March 31, 2020 included amounts recorded
in:
|
|
•
|
Other expenses, net -
$2.6 million gain resulting from the settlement of a legal matter
related to a business sold, partially offset by a $0.8 million loss
resulting from the adjustment of indemnifications related to
previously disposed businesses.
|
|
After income taxes,
these net gains totaled $1.2 million, or $0.01 per
share.
|
|
|
|
(5)
|
Included in Income
tax expense for the three months ended March 31, 2021 are discrete
net tax expenses of $1.0 million, or $0.01 per share. This net
expense is primarily related to an out-of-period adjustment
regarding an overstated deferred tax liability for the three-month
period ended December 31, 2017, offset by a benefit due to the
release of a foreign valuation allowance and excess tax benefits
realized from stock-based compensation arrangements.
|
|
|
|
|
Included in Income
tax expense for the three months ended March 31, 2020 are discrete
net tax benefits of $1.1 million, or $0.01 per share. This net
benefit is primarily related to 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, 2021
|
|
|
|
|
|
As
reported
|
$
|
123,294
|
|
|
$
|
22,107
|
|
|
17.9
|
%
|
Non-recurring, other
unusual and non-operating pension and OPEB items
|
33,926
|
|
|
5,432
|
|
|
|
As
adjusted
|
$
|
157,220
|
|
|
$
|
27,539
|
|
|
17.5
|
%
|
|
|
|
|
|
|
Three months ended
March 31, 2020
|
|
|
|
|
|
As
reported
|
$
|
115,473
|
|
|
$
|
18,442
|
|
|
16.0
|
%
|
Non-recurring, other
unusual and non-operating pension and OPEB items
|
461
|
|
|
958
|
|
|
|
As
adjusted
|
$
|
115,934
|
|
|
$
|
19,400
|
|
|
16.7
|
%
|
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SOURCE Albemarle Corporation