Schedules Quarterly Earnings Conference Call
for February 6, 2024
WILMINGTON, Del., Jan. 24,
2024 /PRNewswire/ -- DuPont (NYSE: DD) today
announced preliminary financial results(1) for the
fourth quarter and full year ended December
31, 2023, provided an initial outlook for the first quarter
of 2024 and scheduled its fourth quarter 2023 quarterly earnings
conference call.
Preliminary Fourth Quarter and Full Year 2023 Results
|
4Q'23
(Preliminary)
|
FY'23
(Preliminary)
|
Net sales
|
~$2.90
billion
|
~$12.07
billion
|
GAAP Income (loss) from
continuing operations
|
$(370) to $(220)
million
|
$460 to $610
million
|
Operating
EBITDA(2)
|
~$715
million
|
~$2.94
billion
|
GAAP EPS from
continuing operations
|
$(0.88) -
$(0.52)
|
$0.92 -
$1.28
|
Adjusted
EPS(2)
|
$0.85 -
$0.87
|
$3.46 -
$3.48
|
Cash provided by
operating activities – cont. ops.
|
~$640
million
|
~$2.19
billion
|
Adjusted free cash
flow(2)
|
~$500
million
|
~$1.57
billion
|
Initial First Quarter 2024 Outlook
- Net Sales expected to be approximately $2.8 billion
- Operating EBITDA(2) expected to be approximately
$610 million
- Adjusted EPS(2) expected to be approximately
$0.63 - $0.65
"In a continued lower volume environment, we remain focused on
the operational levers within our control with strong cash
generation during the fourth quarter," said Ed Breen, DuPont Executive Chairman and Chief
Executive Officer. "As we finished 2023, we saw additional channel
inventory destocking within our industrial businesses as well as
continued weak demand in China. We
are seeing similar trends continue and expect sequential sales and
earnings to decline in the first quarter of 2024, driven by these
factors and the absence of certain discrete items which benefited
fourth quarter operating EBITDA."
"We continue to see stabilization within Semiconductor
Technologies with slight sequential sales lift occurring in the
fourth quarter as expected and we remain confident of a broad-based
market recovery for electronics materials in 2024," Breen
continued. "Further, we have acted quickly in executing the
restructuring actions announced last November and will begin to
realize associated cost savings later in the first quarter. Our
current expectation for full year 2024 financial performance
includes expected sequential improvement in sales and an
approximate ten percent operating EBITDA increase in the second
quarter from first quarter, as well as a return to year-over-year
sales and earnings growth in the second half of the year."
"We will provide more detail on the fourth quarter and full year
2023 as well as our 2024 outlook as part of our fourth quarter
earnings conference call on February
6th," Breen concluded.
DuPont's financial closing procedures for the fourth quarter and
year ended December 31, 2023 are not
yet complete. It is possible that the final results may differ from
the preliminary results, and that our first quarter outlook may
change from the initial outlook discussed above between now and
when results are finalized.
In connection with the preparation of fourth quarter and full
year 2023 financial statements, driven by current market
conditions, including incremental channel inventory destocking,
DuPont identified a triggering event as of December 31, 2023 and performed an impairment
analysis of the Protection reporting unit within the Water &
Protection segment as of December 31,
2023. The carrying value of the Protection reporting unit
contains historical DuPont assets and liabilities measured at fair
value in connection with the merger between Dow and DuPont. Based
on preliminary analysis, DuPont expects to record a non-cash
goodwill impairment charge in the range of $750 million to $850
million which is included in the preliminary fourth quarter
and full year 2023 GAAP ranges noted above.
(1)
|
Results are presented
on a continuing operations basis. See page 3 for further
information, including the basis of presentation included in this
release.
|
(2)
|
Operating EBITDA,
adjusted EPS and adjusted free cash flow are non-GAAP measures and
only reflect continuing operations. See page 4 for further
discussion, including a definition of significant items.
Reconciliation to the most directly comparable GAAP measure,
including details of significant items begins on page 5 of this
communication.
|
Fourth Quarter 2023 Earnings Conference Call
DuPont
will release its final fourth quarter and full year 2023 financial
results at 6:00 a.m. ET on Tuesday, February
6, 2024. In addition, DuPont will host a conference call at
8:00 a.m. ET that day to discuss its
results and business outlook. DuPont is observing a quiet period
until it reports on February 6,
2024.
The event will be webcast live and can be accessed on DuPont's
Investors Relations webpage. A replay, along with the earnings
release and supporting materials, will also be posted to the
website. The dial-in number for the conference call is 888-440-4172
toll-free within the U.S. or +1-646-960-0673. The conference ID is
5994046.
About DuPont
DuPont (NYSE: DD) is a global innovation
leader with technology-based materials and solutions that help
transform industries and everyday life. Our employees apply diverse
science and expertise to help customers advance their best ideas
and deliver essential innovations in key markets including
electronics, transportation, construction, water, healthcare and
worker safety. More information about the company, its businesses
and solutions can be found at www.dupont.com. Investors can access
information included on the Investor Relations section of the
website at investors.dupont.com.
DuPontTM and all products, unless otherwise noted,
denoted with TM, SM or ® are
trademarks, service marks or registered trademarks of affiliates of
DuPont de Nemours, Inc.
Overview
On November 1,
2022, DuPont completed the divestiture, previously announced
on February 18, 2022, of the majority
of the historical Mobility & Materials segment, including the
Engineering Polymers business line and select product lines within
the Advanced Solutions and Performance Resins business lines (the
"M&M Divestiture"), to Celanese Corporation ("Celanese"). The
Company also announced on February 18,
2022, that its Board of Directors approved the divestiture
of the Delrin® acetal homopolymer (H-POM) business. On November 1, 2023, DuPont completed the
divestiture of the Delrin® business to TJC LP, (the "Delrin®
Divestiture" and together with the M&M Divestiture, the
"M&M Divestitures")
The preliminary results of operations for the three and twelve
months ended December 31, 2023,
present the financial results of the Delrin® Divestiture as
discontinued operations. In the comparative periods, the results of
operations for both the M&M Divestiture and the Delrin®
Divestiture are presented as discontinued operations. Unless
otherwise indicated, the discussion of results, including the
financial measures further discussed below, refers only to DuPont's
Continuing Operations and does not include discussion of balances
or activity of the M&M Divestitures.
Cautionary Statement about Preliminary Financial
Information and Other Forward-looking Statements
This
communication contains "forward-looking statements" within the
meaning of the federal securities laws, including Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. In this context,
forward-looking statements often address expected future business
and financial performance and financial condition, and often
contain words such as "expect," "anticipate," "intend," "plan,"
"believe," "seek," "see," "will," "would," "target,"
"stabilization," "confident," "preliminary," "initial," and similar
expressions and variations or negatives of these words. All
statements, other than statements of historical fact, are
forward-looking statements, including statements regarding
preliminary results for the fourth quarter and year ended
December 31, 2023, and the first
quarter 2024 initial outlook. The preliminary financial information
and outlook presented in this release are estimates based on
information available to management as of the date of this release,
have not been reviewed or audited by our independent registered
accounting firm, and are subject to change. There can be no
assurance that DuPont's actual results will not differ from the
preliminary financial information presented in this release. The
preliminary financial information presented in this release should
not be viewed as a substitute for full financial statements
prepared in accordance with GAAP.
Forward-looking statements address matters that are, to varying
degrees, uncertain and subject to risks, uncertainties, and
assumptions, many of which that are beyond DuPont's control, that
could cause actual results to differ materially from those
expressed in any forward-looking statements. Forward-looking
statements are not guarantees of future results. Some of the
important factors that could cause DuPont's actual results to
differ materially from those projected in any such forward-looking
statements include, but are not limited to: (i) risks and
uncertainties, related to DuPont's preliminary financial results
for the three and twelve months ended December 31, 2023, and its initial outlook for
the first quarter 2024, including that final results may differ due
to the completion of the financial closing procedures and/or the
annual audit process; changes in facts, circumstances and/or
assumptions and/or developments in the interim; (ii) risks and
uncertainties related to the settlement agreement concerning PFAS
liabilities reached June 2023 with
plaintiff water utilities by Chemours, Corteva, EIDP and DuPont,
including timing of court approval; (iii) risks and costs related
to each of the parties respective performance under and the impact
of the arrangement to share future eligible PFAS costs by and
between DuPont, Corteva and Chemours, including the outcome of any
pending or future litigation related to PFAS or PFOA, including
personal injury claims and natural resource damages claims; the
extent and cost of ongoing remediation obligations and potential
future remediation obligations; changes in laws and regulations
applicable to PFAS chemicals; (iv) ability to achieve anticipated
tax treatments in connection with completed and future, if any,
divestitures, mergers, acquisitions and other portfolio changes
actions and impact of changes in relevant tax and other laws; (v)
indemnification of certain legacy liabilities; (vi) failure to
realize expected benefits and effectively manage and achieve
anticipated synergies and operational efficiencies in connection
with completed and future, if any, divestitures, mergers,
acquisitions, and other portfolio management, productivity and
infrastructure actions; (vii) risks and uncertainties, including
increased costs and the ability to obtain raw materials and meet
customer needs from, among other events, pandemics and responsive
actions; timing and recovery from demand declines in
consumer-facing markets, including in China; adverse changes in worldwide economic,
political, regulatory, international trade, geopolitical, capital
markets and other external conditions; and other factors beyond the
Company's control, including inflation, recession, military
conflicts, natural and other disasters or weather related events,
that impact the operations of the Company, its customers and/or
suppliers; (viii) ability to offset increases in cost of inputs,
including raw materials, energy and logistics; (ix) risks
associated with demand and market conditions in the semiconductor
industry and associated end markets, including from continuing or
expanding trade disputes or restrictions, including on exports to
China of U.S.-regulated products
and technology; (x) risks, including ability to achieve, and costs
associated with DuPont's sustainability strategy including the
actual conduct of the company's activities and results thereof, and
the development, implementation, achievement or continuation of any
goal, program, policy or initiative discussed or expected; and (xi)
other risks to DuPont's business and operations, including the risk
of impairment; each as further discussed in DuPont's most recent
annual report and subsequent current and periodic reports filed
with the U.S. Securities and Exchange Commission. Unlisted factors
may present significant additional obstacles to the realization of
forward-looking statements. Consequences of material differences in
results as compared with those anticipated in the forward-looking
statements could include, among other things, business or supply
chain disruption, operational problems, financial loss, legal
liability to third parties and similar risks, any of which could
have a material adverse effect on DuPont's consolidated financial
condition, results of operations, credit rating or liquidity. You
should not place undue reliance on forward-looking statements,
which speak only as of the date they are made. DuPont assumes no
obligation to publicly provide revisions or updates to any
forward-looking statements whether as a result of new information,
future developments or otherwise, should circumstances change,
except as otherwise required by securities and other applicable
laws.
Non-GAAP Financial Measures
Unless otherwise indicated, all financial metrics presented
reflect continuing operations only.
This communication includes information that does not conform to
accounting principles generally accepted in the United States of America ("U.S. GAAP") and
are considered non-GAAP measures. Management uses these measures
internally for planning, forecasting and evaluating the performance
of the Company, including allocating resources. DuPont's management
believes these non-GAAP financial measures are useful to investors
because they provide additional information related to the ongoing
performance of DuPont to offer a more meaningful comparison related
to future results of operations. These non-GAAP financial measures
supplement disclosures prepared in accordance with U.S. GAAP, and
should not be viewed as an alternative to U.S. GAAP. Furthermore,
such non-GAAP measures may not be consistent with similar measures
provided or used by other companies. Non-GAAP measures included in
this release are defined below.
Indirect costs, such as those related to corporate and shared
service functions previously allocated to the M&M Divestitures,
do not meet the criteria for discontinued operations and remain
reported within continuing operations. A portion of these indirect
costs include costs related to activities the Company is performing
post-closing of the M&M Divestitures and for which it is/will
be reimbursed ("Future Reimbursable Indirect Costs"). Future
Reimbursable Indirect Costs are reported within continuing
operations but are excluded from operating EBITDA as defined below.
The remaining portion of these indirect costs is not subject to
future reimbursement ("Stranded Costs"). Stranded Costs are
reported within continuing operations in Corporate & Other and
are included within Operating EBITDA.
Adjusted EPS is defined as earnings per common share from
continuing operations - diluted, excluding the after-tax impact of
significant items, after-tax impact of amortization expense of
intangibles, the after-tax impact of non-operating pension / other
post employment benefits ("OPEB") credits / costs and Future
Reimbursable Indirect Costs.
The Company's measure of profit/loss for segment reporting
purposes is Operating EBITDA as this is the manner in which the
Company's chief operating decision maker ("CODM") assesses
performance and allocates resources. The Company defines Operating
EBITDA as earnings (i.e., "Income from continuing operations before
income taxes") before interest, depreciation, amortization,
non-operating pension / OPEB benefits / charges, and foreign
exchange gains / losses, excluding Future Reimbursable Indirect
Costs, and adjusted for significant items. Reconciliations of these
measures are provided on the following page.
Significant items are items that arise outside the ordinary
course of the Company's business that management believes may cause
misinterpretation of underlying business performance, both
historical and future, based on a combination of some or all of the
item's size, unusual nature and infrequent occurrence. Management
classifies as significant items certain costs and expenses
associated with integration and separation activities related to
transformational acquisitions and divestitures as they are
considered unrelated to ongoing business performance.
Adjusted free cash flow is defined as cash provided by/used for
operating activities from continuing operations less capital
expenditures and excluding the impact of cash inflows/outflows that
are unusual in nature and/or infrequent in occurrence that neither
relate to the ordinary course of the Company's business nor reflect
the Company's underlying business liquidity. As a result, adjusted
free cash flow represents cash that is available to the Company,
after investing in its asset base, to fund obligations using the
Company's primary source of liquidity, cash provided by operating
activities from continuing operations. Management believes adjusted
free cash flow, even though it may be defined differently from
other companies, is useful to investors, analysts and others to
evaluate the Company's cash flow and financial performance, and it
is an integral measure used in the Company's financial planning
process.
Beginning in the second quarter of 2023, the Company has
segregated the cash flows from discontinued operations from the
cash flows from continuing operations in accordance with ASC 230,
Statement of Cash Flows. In connection with this change, the
Company updated the definition of adjusted free cash flow to
include only activities from continuing operations. The Company
believes that excluding cash flows from discontinued operations
provides the Company's investors with better visibility into the
underlying businesses cash generation for ongoing businesses.
Adjusted free cash flows has been recast for all periods to reflect
the change in definition.
Previously, in connection with its earnings release for the
third quarter of 2022, the Company updated the definition of
adjusted free cash flow to exclude the impact of cash
inflows/outflows that are of a certain magnitude, unusual in nature
and/or infrequent in occurrence that neither relate to the ordinary
course of the Company's business nor reflect the Company's
underlying business liquidity. The change was driven by the
estimated tax payments associated with the M&M Divestiture
which meet the magnitude criterion, were unusual in nature and
infrequent in occurrence and were not related to the Company's
ordinary course of business or underlying business liquidity. The
Company believes that excluding items of this nature provides the
Company's investors with better understanding of and enables them
to compare our underlying business liquidity from period to period.
Similar adjustments to the 2021 measures of adjusted free cash flow
were not necessary. Following the change to adjusted free cash flow
from continuing operations, noted above, adjustments to exclude the
impact of cash inflows/outflows that are unusual in nature and/or
infrequent in occurrence that neither relate to the ordinary course
of the Company's business nor reflect the Company's underlying
business liquidity will be adjusted to the extent they relate to
continuing operations. Management notes that for the three and
twelve month periods ended December 31,
2023 there were no exclusions for items that are unusual in
nature and/or infrequent in occurrence.
|
|
|
Reconciliation of
"Income (loss) from continuing operations, net of tax" to
"Operating EBITDA"
|
Three Months
Ended
|
Twelve Months
Ended
|
Dec 31,
2023
|
Dec 31,
2023
|
In millions
(Unaudited)
|
(Preliminary)
|
(Preliminary)
|
Income (loss) from
continuing operations, net of tax (GAAP)
|
$(370) -
$(220)
|
$460 -
$610
|
+ Benefit from income
taxes on continuing operations
|
(292) -
(342)
|
(2) - (52)
|
Income (loss) from
continuing operations before income taxes
|
$(662) -
$(562)
|
$458 -
$558
|
+ Depreciation and
amortization
|
294
|
1,147
|
- Interest
income
|
23
|
155
|
+ Interest
expense
|
101
|
396
|
- Non-operating
pension/OPEB benefit (costs) credits
|
(2)
|
(9)
|
- Foreign exchange
losses (gains), net
|
(42)
|
(73)
|
+ Future reimbursable
indirect costs
|
1
|
7
|
- Adjustments for
significant items
|
(960) -
(860)
|
(1,007) -
(907)
|
Operating EBITDA
(non-GAAP)
|
$715
|
$2,942
|
Reconciliation of
"Earnings (loss) per common share from continuing
operations - diluted" to "Adjusted earnings per share from
continuing
operations - diluted"
|
Three Months
Ended
|
Twelve Months
Ended
|
Dec 31,
2023
|
Dec 31,
2023
|
Dollars per share
(Unaudited)
|
(Preliminary)
|
(Preliminary)
|
Earnings (loss) per
common share from continuing operations - diluted (GAAP)
|
$(0.88) -
$(0.52)
|
$ 0.92 -
$1.28
|
Less: Significant
items
|
(1.46) -
(1.12)
|
(1.47) -
(1.13)
|
Less: Amortization of
intangibles
|
(0.27)
|
(1.04)
|
Less: Non-op pension /
OPEB benefit credits
|
—
|
(0.02)
|
Less: Future
reimbursable indirect cost
|
—
|
(0.01)
|
Adjusted earnings per
share from continuing operations - diluted (non-GAAP)
|
$0.85 -
$0.87
|
$3.46 -
$3.48
|
Significant Items
for the Three and Twelve Months Ended
December 31, 2023 on a pre-tax and earnings (loss) per
common share from continuing operations - diluted (EPS)
basis consist of the following:
|
Three Months
Ended
|
Twelve Months
Ended
|
Dec 31,
2023
|
Dec 31,
2023
|
(Preliminary)
|
(Preliminary)
|
In millions, except per
share amounts (Unaudited)
|
Pretax
1
|
EPS
1
|
Pretax
1
|
EPS
1
|
Acquisition,
integration and separation costs 2
|
$(5)
|
$(0.01)
|
$(20)
|
$(0.04)
|
Restructuring and
asset related charges - net 3
|
(107)
|
(0.19)
|
(146)
|
(0.25)
|
Goodwill impairment
charge 4
|
(850) -
(750)
|
(1.97) -
(1.74)
|
(850) -
(750)
|
(1.88) -
(1.66)
|
Gain on divestiture
5
|
2
|
—
|
9
|
0.02
|
Income tax related
item 6
|
—
|
0.71 - 0.82
|
—
|
0.68 - 0.80
|
Total significant items
(non-GAAP)
|
$(960) -
$(860)
|
$(1.46) -
$(1.12)
|
$(1,007) -
$(907)
|
$(1.47) -
$(1.13)
|
|
|
1.
|
Earnings (loss) per
common share from continuing operations - diluted. The income tax
effect on significant items was calculated based upon the enacted
tax laws and statutory income tax rates applicable in the tax
jurisdiction(s) of the underlying non-GAAP adjustment.
|
2.
|
Acquisition,
integration and separation costs related to the Spectrum
Acquisition.
|
3.
|
Includes severance and
other asset related charges related to the 2023-2024 restructuring
program.
|
4.
|
Reflects an estimated
range of a non-cash goodwill impairment charge in the Protection
Reporting unit within the Water & Protection
segment.
|
5.
|
Reflects a gain
adjustment related to a previously divested business.
|
6.
|
Reflects an estimated
range of the global income tax impact of an internal
restructuring.
|
Reconciliation of
"Cash provided by operating activities - continuing
operations" to
"Adjusted free cash flow"1
|
Three Months
Ended
|
Twelve Months
Ended
|
Dec 31,
2023
|
Dec 31,
2023
|
In millions
(Unaudited)
|
(Preliminary)
|
(Preliminary)
|
Cash provided by
operating activities - continuing operations (GAAP)
|
$
644
|
$
2,189
|
Capital
expenditures
|
(143)
|
(617)
|
Adjusted free cash flow
(non-GAAP)
|
$
501
|
$
1,572
|
|
|
1.
|
Adjusted free cash flow
is calculated on a continuing operations basis for all periods
presented. Refer to the definitions of Non-GAAP metrics on page 4
for additional information.
|
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