WYNYARD, UK, Aug. 4, 2020 /PRNewswire/ --
Second Quarter 2020 Highlights
- Net loss attributable to Venator of $19
million compared to net income attributable to Venator of
$21 million in the prior year
period
- Adjusted EBITDA of $37 million
compared to $61 million in the second
quarter of 2019
- Diluted loss per share of $0.18
and adjusted diluted loss per share of $0.03
- TiO2 sales volumes declined by 16% compared to the
first quarter of 2020, primarily due to the effects of
COVID-19
- Average TiO2 pricing was stable compared to the
first quarter of 2020 and second quarter of 2019
- Delivered $11 million of cost
benefits in the second quarter compared to the prior year period,
including $7 million from our
COVID-19 initiatives and $4 million
from our 2019 Business Improvement Program
- Successfully completed an offering of $225 million in aggregate principal amount of
senior secured notes due 2025
|
|
Three months
ended
|
|
Six months
ended
|
|
|
June
30,
|
|
March 31,
2020
|
|
June
30,
|
(In millions, except per share amounts)
|
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
Revenues
|
|
$
|
456
|
|
|
$
|
578
|
|
|
$
|
532
|
|
|
$
|
988
|
|
|
$
|
1,140
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
attributable to Venator
|
|
$
|
(19)
|
|
|
$
|
21
|
|
|
$
|
7
|
|
|
$
|
(12)
|
|
|
$
|
18
|
|
Adjusted net (loss)
income attributable to Venator(1)
|
|
$
|
(3)
|
|
|
$
|
14
|
|
|
$
|
12
|
|
|
$
|
9
|
|
|
$
|
28
|
|
Adjusted
EBITDA(1)
|
|
$
|
37
|
|
|
$
|
61
|
|
|
$
|
57
|
|
|
$
|
94
|
|
|
$
|
121
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted (loss)
earnings per share
|
|
$
|
(0.18)
|
|
|
$
|
0.20
|
|
|
$
|
0.07
|
|
|
$
|
(0.11)
|
|
|
$
|
0.17
|
|
Adjusted diluted
(loss) earnings per share(1)
|
|
$
|
(0.03)
|
|
|
$
|
0.13
|
|
|
$
|
0.11
|
|
|
$
|
0.08
|
|
|
$
|
0.26
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
(used in) operating activities
|
|
$
|
38
|
|
|
$
|
(21)
|
|
|
$
|
(58)
|
|
|
$
|
(20)
|
|
|
$
|
(50)
|
|
Free cash
flow(3)
|
|
$
|
18
|
|
|
$
|
(50)
|
|
|
$
|
(85)
|
|
|
$
|
(67)
|
|
|
$
|
(132)
|
|
|
See end of press
release for footnote explanations
|
Venator Materials PLC ("Venator") (NYSE: VNTR) today reported
second quarter 2020 results with revenues of $456 million, net loss attributable to Venator of
$19 million, adjusted net loss
attributable to Venator of $3 million
and adjusted EBITDA of $37
million.
Simon Turner, President and
CEO of Venator, commented:
"Our business performed well in the second quarter
notwithstanding the severe headwinds due to the COVID-19 pandemic.
TiO2 volumes declined 16% sequentially, in-line with our
expectations. Our average TiO2 price remained stable,
consistent with our customer-tailored approach, and our decisive
cost actions helped mitigate the acute impact of lower demand.
"We continue to have a relentless focus on managing our costs
and cash uses. In the second quarter, we delivered on our COVID-19
cost initiatives and enhanced our liquidity position. We expect to
continue to benefit from our self-help measures, including our
Business Improvement Program.
"We are encouraged by the phased reopening of economies around
the world. We will continue to focus on items under our control,
such as providing quality products and services to our customers,
lowering our costs and cash uses and improving our competitive
profile."
Segment Analysis for 2Q20 Compared to 2Q19
Titanium Dioxide
The Titanium Dioxide segment generated revenues of $338 million for the three months ended
June 30, 2020, a decrease of
$101 million, or 23%, compared to the
same period in 2019. The decrease was primarily due to a 21%
decline in TiO2 sales volumes, a 1% unfavorable impact
from foreign currency translation and a 1% unfavorable impact due
to mix and other. TiO2 sales volumes declined across all
product categories and regions, most notably in Europe, primarily due to lower demand as a
result of the impact of COVID-19. The average TiO2
selling price remained stable compared to the prior year period and
the first quarter of 2020.
Adjusted EBITDA for the Titanium Dioxide segment was
$35 million for the three months
ended June 30, 2020, a decrease of
$20 million compared to the same
period in 2019. The decline was primarily a result of a decline in
overall TiO2 sales volumes. This was partially offset by
a reduction in costs, primarily related to actions taken in
response to the COVID-19 pandemic, and a benefit of more than
$3 million from our 2019 Business
Improvement Program.
Performance Additives
The Performance Additives segment generated revenues of
$118 million for the three months
ended June 30, 2020, a decline of
$21 million, or 15%, compared to the
same period in 2019. The decline was primarily attributable to a
16% decrease in sales volumes, a 1% unfavorable impact of mix and
other and a 1% unfavorable impact of foreign currency translation,
partially offset by a 3% increase in the average selling price. The
decline in sales volumes was primarily a result of lower demand in
our color pigments and functional additives businesses due to the
impact of the COVID-19 pandemic. The average selling price
increased primarily as a result of favorable mix within our color
pigments and timber treatment businesses.
Adjusted EBITDA for the Performance Additives segment was
$13 million for the three months
ended June 30, 2020, a decrease of
$3 million compared to the same
period in 2019. The decrease was primarily attributable to a
decline in sales volumes due to the impact of COVID-19, partially
offset by a reduction in costs, primarily related to actions taken
in response to the COVID-19 pandemic, and a benefit of less than
$1 million from our 2019 Business
Improvement Program.
Corporate and other
Corporate and other represents expenses which are not allocated to
our segments. Losses from Corporate and other were $11 million for the three months ended
June 30, 2020, or $1 million higher compared to the same period in
2019. This was primarily a result of unfavorable foreign currency
translation. We expect Corporate and other to be approximately
$45 million for the full year
2020.
Tax Items
We recorded an income tax expense of $2
million for the three months ended June 30, 2020,
compared to an income tax benefit of $9
million for the three months ended June 30, 2019. Our
adjusted effective tax rate was 35% for both the three months ended
June 30, 2020 and the same period in 2019.
Our income taxes are significantly affected by the mix of income
and losses in the tax jurisdictions in which we operate, as
impacted by the presence of valuation allowances in certain tax
jurisdictions. In 2020, we expect an adjusted effective tax rate of
approximately 35%. We expect cash taxes in 2020 to be less than
$5 million and we continue to expect
our adjusted effective tax rate in the long-term will be
approximately 15% to 20%.
Liquidity and Capital Resources
As of June 30, 2020, we had $453
million of total liquidity. This includes cash and cash
equivalents of $188 million and
$265 million of availability under
our existing asset-based revolving credit facility. At the end of
the second quarter, net debt was $769
million compared to $695
million as of December 31,
2019.
On May 22, 2020, we successfully
completed an offering of $225 million
in aggregate principal amount of senior secured notes due 2025. The
proceeds of the offering were used to repay borrowings under the
ABL Facility and for general corporate purposes, including
enhancing our liquidity position.
Year to date, capital expenditures have totaled $47 million, including $16
million in the second quarter of 2020. In 2020, we expect
total capital expenditures to be approximately $60 million.
Earnings Conference Call Information
We will hold a conference call to discuss our second quarter
2020 results on Tuesday, August 4, 2020 at 8:00
a.m. ET.
Call-in numbers for
the conference call:
|
U.S.
participants
|
1-833-366-1118
|
International
participants
|
1-412-902-6770
|
(No passcode
required)
|
|
In order to facilitate the registration process, you may use the
following link to pre-register for the conference call. Callers who
pre-register will be given a unique PIN and separate call-in number
to gain immediate access to the call and bypass the live operator.
To pre-register, please go to:
http://dpregister.com/10145878
Webcast Information
The conference call will be
available via webcast and can be accessed from the company's
website at venatorcorp.com/investor-relations.
Replay Information
The conference call will be available for replay beginning
August 4, 2020 and ending
August 11, 2020.
Call-in numbers for
the replay:
|
U.S.
participants
|
1-877-344-7529
|
International
participants
|
1-412-317-0088
|
Passcode
|
10145878
|
Upcoming Conferences
During the third quarter of 2020, a member of management is
expected to present at the Jefferies Virtual Industrials Conference
on August 5-6, 2020, the UBS
Chemicals Virtual Conference on September 9,
2020, the J.P. Morgan European High Yield & Leveraged
Finance Conference on September 9-11,
2020 and the RBC Global Industrials Conference on
September 14-15, 2020. A webcast of
the presentations, if applicable, along with accompanying materials
will be available at venatorcorp.com/investor-relations.
Table 1 — Results
of Operations
|
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
|
June
30,
|
|
June
30,
|
(In millions, except per share amounts)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Revenues
|
|
$
|
456
|
|
|
$
|
578
|
|
|
$
|
988
|
|
|
$
|
1,140
|
|
Cost of goods
sold
|
|
411
|
|
|
511
|
|
|
882
|
|
|
997
|
|
Operating
expenses
|
|
46
|
|
|
45
|
|
|
88
|
|
|
100
|
|
Restructuring,
impairment and plant closing and transition costs
|
|
5
|
|
|
—
|
|
|
12
|
|
|
12
|
|
Operating (loss)
income
|
|
(6)
|
|
|
22
|
|
|
6
|
|
|
31
|
|
Interest expense,
net
|
|
(12)
|
|
|
(10)
|
|
|
(22)
|
|
|
(21)
|
|
Other
income
|
|
3
|
|
|
1
|
|
|
7
|
|
|
2
|
|
(Loss) income
before income taxes
|
|
(15)
|
|
|
13
|
|
|
(9)
|
|
|
12
|
|
Income tax (expense)
benefit
|
|
(2)
|
|
|
9
|
|
|
—
|
|
|
8
|
|
Net (loss)
income
|
|
(17)
|
|
|
22
|
|
|
(9)
|
|
|
20
|
|
Net income
attributable to noncontrolling interests
|
|
(2)
|
|
|
(1)
|
|
|
(3)
|
|
|
(2)
|
|
Net (loss) income
attributable to Venator
|
|
$
|
(19)
|
|
|
$
|
21
|
|
|
$
|
(12)
|
|
|
$
|
18
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA(1)
|
|
$
|
37
|
|
|
$
|
61
|
|
|
$
|
94
|
|
|
$
|
121
|
|
Adjusted net
(loss) income(1)
|
|
$
|
(3)
|
|
|
$
|
14
|
|
|
$
|
9
|
|
|
$
|
28
|
|
|
|
|
|
|
|
|
|
|
Basic (loss)
earnings per share
|
|
$
|
(0.18)
|
|
|
$
|
0.20
|
|
|
$
|
(0.11)
|
|
|
$
|
0.17
|
|
Diluted (loss)
earnings per share
|
|
$
|
(0.18)
|
|
|
$
|
0.20
|
|
|
$
|
(0.11)
|
|
|
$
|
0.17
|
|
Adjusted (loss)
earnings per share(1)
|
|
$
|
(0.03)
|
|
|
$
|
0.13
|
|
|
$
|
0.08
|
|
|
$
|
0.26
|
|
Adjusted diluted
(loss) earnings per share(1)
|
|
$
|
(0.03)
|
|
|
$
|
0.13
|
|
|
$
|
0.08
|
|
|
$
|
0.26
|
|
|
|
|
|
|
|
|
|
|
Ordinary share
information:
|
|
|
|
|
|
|
|
|
Basic shares
outstanding
|
|
106.7
|
|
|
106.6
|
|
|
106.7
|
|
|
106.5
|
|
Diluted
shares
|
|
106.7
|
|
|
106.6
|
|
|
106.7
|
|
|
106.5
|
|
|
See end of press
release for footnote explanations
|
Table 2 — Results
of Operations by Segment
|
|
|
|
Three months
ended
|
|
|
|
Six months
ended
|
|
|
|
|
June
30,
|
|
Favorable
/
|
|
June
30,
|
|
Favorable
/
|
(In millions)
|
|
2020
|
|
2019
|
|
(Unfavorable)
|
|
2020
|
|
2019
|
|
(Unfavorable)
|
Segment
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Titanium
Dioxide
|
|
$
|
338
|
|
|
$
|
439
|
|
|
(23)%
|
|
$
|
740
|
|
|
$
|
864
|
|
|
(14)%
|
Performance
Additives
|
|
118
|
|
|
139
|
|
|
(15)%
|
|
248
|
|
|
276
|
|
|
(10)%
|
Total
|
|
$
|
456
|
|
|
$
|
578
|
|
|
(21)%
|
|
$
|
988
|
|
|
$
|
1,140
|
|
|
(13)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Adjusted
EBITDA(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
Titanium
Dioxide
|
|
$
|
35
|
|
|
$
|
55
|
|
|
(36)%
|
|
$
|
81
|
|
|
$
|
116
|
|
|
(30)%
|
Performance
Additives
|
|
13
|
|
|
16
|
|
|
(19)%
|
|
35
|
|
|
31
|
|
|
13%
|
Corporate and
other
|
|
(11)
|
|
|
(10)
|
|
|
(10)%
|
|
(22)
|
|
|
(26)
|
|
|
15%
|
Total
|
|
$
|
37
|
|
|
$
|
61
|
|
|
(39)%
|
|
$
|
94
|
|
|
$
|
121
|
|
|
(22)%
|
|
See end of press
release for footnote explanations
|
Table 3 — Factors
Impacting Sales Revenue
|
|
|
Three months
ended
|
|
June 30, 2020 vs.
2019
|
|
Average Selling Price(a)
|
|
|
|
|
|
|
|
Local
Currency
|
|
Exchange
Rate
|
|
Sales Mix
& Other
|
|
Sales
Volume(b)
|
|
Total
|
Titanium
Dioxide
|
—%
|
|
(1)%
|
|
(1)%
|
|
(21)%
|
|
(23)%
|
Performance
Additives
|
3%
|
|
(1)%
|
|
(1)%
|
|
(16)%
|
|
(15)%
|
Total
Company
|
—%
|
|
(1)%
|
|
(1)%
|
|
(19)%
|
|
(21)%
|
|
|
|
Six months
ended
|
|
June 30, 2020 vs.
2019
|
|
Average Selling
Price(a)
|
|
|
|
|
|
|
|
Local
Currency
|
|
Exchange
Rate
|
|
Sales Mix
& Other
|
|
Sales
Volume(b)
|
|
Total
|
Titanium
Dioxide
|
(1)%
|
|
(1)%
|
|
(1)%
|
|
(11)%
|
|
(14)%
|
Performance
Additives
|
2%
|
|
(1)%
|
|
(1)%
|
|
(10)%
|
|
(10)%
|
Total
Company
|
—%
|
|
(1)%
|
|
(1)%
|
|
(11)%
|
|
(13)%
|
|
|
(a)
|
Excludes revenues
from tolling arrangements, by-products and raw materials
|
(b)
|
Excludes sales
volumes of by-products and raw materials
|
Table 4 —
Reconciliation of U.S. GAAP to Non-GAAP Measures
|
|
|
|
EBITDA
|
|
Net Income
(Loss)
|
|
Diluted
Earnings
(Loss) Per Share(1)
|
|
|
Three months
ended
|
|
Three months
ended
|
|
Three months
ended
|
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
(In millions, except per share amounts)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net (loss)
income
|
|
$
|
(17)
|
|
|
$
|
22
|
|
|
$
|
(17)
|
|
|
$
|
22
|
|
|
$
|
(0.16)
|
|
|
$
|
0.21
|
|
Net income
attributable to noncontrolling interests
|
|
(2)
|
|
|
(1)
|
|
|
(2)
|
|
|
(1)
|
|
|
(0.02)
|
|
|
(0.01)
|
|
Net (loss) income
attributable to Venator
|
|
(19)
|
|
|
21
|
|
|
(19)
|
|
|
21
|
|
|
(0.18)
|
|
|
0.20
|
|
Interest expense,
net
|
|
12
|
|
|
10
|
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit)
|
|
2
|
|
|
(9)
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
28
|
|
|
29
|
|
|
|
|
|
|
|
|
|
Business acquisition
and integration adjustments
|
|
—
|
|
|
(1)
|
|
|
—
|
|
|
(1)
|
|
|
—
|
|
|
(0.01)
|
|
Certain legal
expenses/settlements
|
|
3
|
|
|
1
|
|
|
3
|
|
|
1
|
|
|
0.03
|
|
|
0.01
|
|
Amortization of
pension and postretirement actuarial losses
|
|
4
|
|
|
4
|
|
|
4
|
|
|
4
|
|
|
0.04
|
|
|
0.03
|
|
Net plant incident
costs
|
|
2
|
|
|
6
|
|
|
2
|
|
|
6
|
|
|
0.02
|
|
|
0.06
|
|
Restructuring,
impairment, plant closing and transition costs
|
|
5
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
0.05
|
|
|
—
|
|
Income tax
adjustments(2)
|
|
—
|
|
|
—
|
|
|
2
|
|
|
(17)
|
|
|
0.01
|
|
|
(0.16)
|
|
Adjusted(1)
|
|
$
|
37
|
|
|
$
|
61
|
|
|
$
|
(3)
|
|
|
$
|
14
|
|
|
$
|
(0.03)
|
|
|
$
|
0.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted income tax
expense(2)
|
|
|
|
|
|
$
|
—
|
|
|
$
|
8
|
|
|
|
|
|
Net income
attributable to noncontrolling interests, net of tax
|
|
|
|
|
|
2
|
|
|
1
|
|
|
|
|
|
Adjusted pre-tax
(loss) income
|
|
|
|
|
|
$
|
(1)
|
|
|
$
|
23
|
|
|
|
|
|
Adjusted effective
tax rate
|
|
|
|
|
|
35%
|
|
|
35%
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
Net Income
(Loss)
|
|
Diluted
Earnings
(Loss) Per
Share(1)
|
|
|
Three months
ended March 31,
|
|
Three months
ended March 31,
|
|
Three months
ended March 31,
|
(In millions, except per share amounts)
|
|
2020
|
|
2020
|
|
2020
|
Net
income
|
|
$
|
8
|
|
|
$
|
8
|
|
|
$
|
0.08
|
|
Net income
attributable to noncontrolling interests
|
|
(1)
|
|
|
(1)
|
|
|
(0.01)
|
|
Net income
attributable to Venator
|
|
7
|
|
|
7
|
|
|
0.07
|
|
Interest expense,
net
|
|
10
|
|
|
|
|
|
Income tax
benefit
|
|
(2)
|
|
|
|
|
|
Depreciation and
amortization
|
|
28
|
|
|
|
|
|
Business acquisition
and integration expenses
|
|
1
|
|
|
1
|
|
|
0.01
|
|
Loss on disposal of
businesses/assets
|
|
2
|
|
|
2
|
|
|
0.02
|
|
Amortization of
pension and postretirement actuarial losses
|
|
3
|
|
|
3
|
|
|
0.03
|
|
Net plant incident
costs
|
|
1
|
|
|
1
|
|
|
0.01
|
|
Restructuring,
impairment, plant closing and transition costs
|
|
7
|
|
|
7
|
|
|
0.06
|
|
Income tax
adjustments(2)
|
|
—
|
|
|
(9)
|
|
|
(0.09)
|
|
Adjusted(1)
|
|
$
|
57
|
|
|
$
|
12
|
|
|
$
|
0.11
|
|
|
Adjusted income tax
expense(2)
|
|
|
|
$
|
7
|
|
|
|
Net income
attributable to noncontrolling interests, net of tax
|
|
|
|
1
|
|
|
|
Adjusted pre-tax
income
|
|
|
|
$
|
20
|
|
|
|
Adjusted effective
tax rate
|
|
|
|
35
|
%
|
|
|
|
|
|
|
EBITDA
|
|
Net Income
(Loss)
|
|
Diluted
Earnings
(Loss) Per Share(1)
|
|
|
Six months
ended
|
|
Six months
ended
|
|
Six months
ended
|
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
(In millions,
except per share amounts)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net (loss)
income
|
|
$
|
(9)
|
|
|
$
|
20
|
|
|
$
|
(9)
|
|
|
$
|
20
|
|
|
$
|
(0.08)
|
|
|
$
|
0.19
|
|
Net income
attributable to noncontrolling interests
|
|
(3)
|
|
|
(2)
|
|
|
(3)
|
|
|
(2)
|
|
|
(0.03)
|
|
|
(0.02)
|
|
Net (loss) income
attributable to Venator
|
|
(12)
|
|
|
18
|
|
|
(12)
|
|
|
18
|
|
|
(0.11)
|
|
|
0.17
|
|
Interest expense,
net
|
|
22
|
|
|
21
|
|
|
|
|
|
|
|
|
|
Income tax
benefit
|
|
—
|
|
|
(8)
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
56
|
|
|
55
|
|
|
|
|
|
|
|
|
|
Business acquisition
and integration expenses
|
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
0.01
|
|
|
0.01
|
|
Loss on disposal of
businesses/assets
|
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
0.02
|
|
|
—
|
|
Certain legal
expenses/settlements
|
|
3
|
|
|
1
|
|
|
3
|
|
|
1
|
|
|
0.03
|
|
|
0.01
|
|
Amortization of
pension and postretirement actuarial losses
|
|
7
|
|
|
8
|
|
|
7
|
|
|
8
|
|
|
0.06
|
|
|
0.07
|
|
Net plant incident
costs
|
|
3
|
|
|
13
|
|
|
3
|
|
|
13
|
|
|
0.03
|
|
|
0.12
|
|
Restructuring,
impairment, plant closing and transition costs
|
|
12
|
|
|
12
|
|
|
12
|
|
|
12
|
|
|
0.11
|
|
|
0.11
|
|
Income tax impact of
adjustments(2)
|
|
—
|
|
|
—
|
|
|
(7)
|
|
|
(25)
|
|
|
(0.07)
|
|
|
(0.23)
|
|
Adjusted(1)
|
|
$
|
94
|
|
|
$
|
121
|
|
|
$
|
9
|
|
|
$
|
28
|
|
|
$
|
0.08
|
|
|
$
|
0.26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted income tax
expense(2)
|
|
|
|
|
|
$
|
7
|
|
|
$
|
17
|
|
|
|
|
|
Net income
attributable to noncontrolling interest, net of tax
|
|
|
|
|
|
3
|
|
|
2
|
|
|
|
|
|
Adjusted pre-tax
income
|
|
|
|
|
|
$
|
19
|
|
|
$
|
47
|
|
|
|
|
|
Adjusted effective
tax rate
|
|
|
|
|
|
35
|
%
|
|
35
|
%
|
|
|
|
|
|
See end of press
release for footnote explanations
|
Table 5 — Selected
Balance Sheet Items
|
|
|
|
June
30,
|
|
December
31,
|
(In millions)
|
|
2020
|
|
2019
|
Cash and cash
equivalents
|
|
$
|
188
|
|
|
$
|
55
|
|
Accounts and notes
receivable, net
|
|
332
|
|
|
321
|
|
Inventories
|
|
487
|
|
|
513
|
|
Prepaid expenses and
other current assets
|
|
68
|
|
|
88
|
|
Property, plant and
equipment, net
|
|
941
|
|
|
989
|
|
Other
assets
|
|
314
|
|
|
299
|
|
Total
assets
|
|
$
|
2,330
|
|
|
$
|
2,265
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
257
|
|
|
$
|
351
|
|
Other current
liabilities
|
|
107
|
|
|
124
|
|
Current portion of
debt
|
|
7
|
|
|
13
|
|
Long-term
debt
|
|
950
|
|
|
737
|
|
Non-current payable
to affiliates
|
|
30
|
|
|
30
|
|
Other non-current
liabilities
|
|
315
|
|
|
337
|
|
Total
equity
|
|
664
|
|
|
673
|
|
Total liabilities
and equity
|
|
$
|
2,330
|
|
|
$
|
2,265
|
|
Table 6 —
Outstanding Debt
|
|
|
|
June
30,
|
|
December
31,
|
(In millions)
|
|
2020
|
|
2019
|
Debt:
|
|
|
|
|
Term Loan
Facility
|
|
$
|
360
|
|
|
$
|
361
|
|
Senior Secured
Notes
|
|
214
|
|
|
—
|
|
Senior Unsecured
Notes
|
|
371
|
|
|
371
|
|
Other debt
|
|
12
|
|
|
18
|
|
Total debt -
excluding affiliates
|
|
957
|
|
|
750
|
|
Total cash
|
|
188
|
|
|
55
|
|
Net debt -
excluding affiliates
|
|
$
|
769
|
|
|
$
|
695
|
|
Table 7 —
Summarized Statement of Cash Flows
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
|
June
30,
|
|
June
30,
|
(In millions)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Total cash at
beginning of period
|
|
$
|
25
|
|
|
$
|
80
|
|
|
$
|
55
|
|
|
$
|
165
|
|
Net cash provided by
(used in) operating activities
|
|
38
|
|
|
(21)
|
|
|
(20)
|
|
|
(50)
|
|
Net cash used in
investing activities
|
|
(20)
|
|
|
(29)
|
|
|
(47)
|
|
|
(82)
|
|
Net cash provided by
financing activities
|
|
144
|
|
|
20
|
|
|
200
|
|
|
17
|
|
Effect of exchange
rate changes on cash
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total cash at end
of period
|
|
$
|
188
|
|
|
$
|
50
|
|
|
$
|
188
|
|
|
$
|
50
|
|
Supplemental cash
flow information:
|
|
|
|
|
|
|
|
|
Cash paid for
interest
|
|
$
|
(4)
|
|
|
$
|
(5)
|
|
|
$
|
(18)
|
|
|
$
|
(23)
|
|
Cash paid for income
taxes
|
|
—
|
|
|
(2)
|
|
|
—
|
|
|
(3)
|
|
Capital
expenditures
|
|
(16)
|
|
|
(31)
|
|
|
(47)
|
|
|
(83)
|
|
Depreciation and
amortization
|
|
28
|
|
|
29
|
|
|
56
|
|
|
55
|
|
|
|
|
|
|
|
|
|
|
Changes in primary
working capital:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
49
|
|
|
(16)
|
|
|
(13)
|
|
|
(77)
|
|
Inventories
|
|
13
|
|
|
(5)
|
|
|
22
|
|
|
30
|
|
Accounts
payable
|
|
(47)
|
|
|
(22)
|
|
|
(67)
|
|
|
(44)
|
|
Total cash provided
by (used in) primary working capital
|
|
$
|
15
|
|
|
$
|
(43)
|
|
|
$
|
(58)
|
|
|
$
|
(91)
|
|
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
|
June
30,
|
|
June
30,
|
(In
millions)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Free cash
flow(3):
|
|
|
|
|
|
|
|
|
Net cash provided by
(used in) operating activities
|
|
$
|
38
|
|
|
$
|
(21)
|
|
|
$
|
(20)
|
|
|
$
|
(50)
|
|
Capital
expenditures
|
|
(16)
|
|
|
(31)
|
|
|
(47)
|
|
|
(83)
|
|
Other investing
activities
|
|
(4)
|
|
|
2
|
|
|
—
|
|
|
1
|
|
Total free cash
flow(3)
|
|
$
|
18
|
|
|
$
|
(50)
|
|
|
$
|
(67)
|
|
|
$
|
(132)
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA(1)
|
|
$
|
37
|
|
|
$
|
61
|
|
|
$
|
94
|
|
|
$
|
121
|
|
Capital expenditures
excluding cash paid for Pori rebuild
|
|
(16)
|
|
|
(20)
|
|
|
(46)
|
|
|
(48)
|
|
Cash paid for
interest
|
|
(4)
|
|
|
(5)
|
|
|
(18)
|
|
|
(23)
|
|
Cash paid for income
taxes
|
|
—
|
|
|
(2)
|
|
|
—
|
|
|
(3)
|
|
Primary working
capital change
|
|
15
|
|
|
(43)
|
|
|
(58)
|
|
|
(91)
|
|
Restructuring
|
|
(1)
|
|
|
(10)
|
|
|
(5)
|
|
|
(17)
|
|
Pension &
other
|
|
(8)
|
|
|
(14)
|
|
|
(28)
|
|
|
(18)
|
|
Net cash flows
associated with Pori
|
|
(5)
|
|
|
(17)
|
|
|
(6)
|
|
|
(53)
|
|
Total free cash
flow(3)
|
|
$
|
18
|
|
|
$
|
(50)
|
|
|
$
|
(67)
|
|
|
$
|
(132)
|
|
|
See end of press
release for numbered footnote explanations
|
Footnotes
|
|
|
(1)
|
Our management uses
adjusted EBITDA to assess financial performance. Adjusted EBITDA is
defined as net income/loss before interest income/expense, net,
income tax expense/benefit, depreciation and amortization, and net
income attributable to noncontrolling interests, as well as
eliminating the following adjustments: (a) business acquisition and
integration expenses/adjustments; (b) loss/gain on disposition of
business/assets; (c) certain legal expenses/settlements; (d)
amortization of pension and postretirement actuarial losses/gains;
(e) net plant incident costs/credits; and (f) restructuring,
impairment, and plant closing and transition costs/credits. We
believe that net income is the performance measure calculated and
presented in accordance with U.S. GAAP that is most directly
comparable to adjusted EBITDA.
|
|
|
|
We believe adjusted
EBITDA is useful to investors in assessing our ongoing financial
performance and provides improved comparability between periods
through the exclusion of certain items that management believes are
not indicative of our operational profitability and that may
obscure underlying business results and trends. However, this
measure should not be considered in isolation or viewed as a
substitute for net income or other measures of performance
determined in accordance with U.S. GAAP. Moreover, adjusted EBITDA
as used herein is not necessarily comparable to other similarly
titled measures of other companies due to potential inconsistencies
in the methods of calculation. Our management believes this measure
is useful to compare general operating performance from period to
period and to make certain related management decisions. Adjusted
EBITDA is also used by securities analysts, lenders and others in
their evaluation of different companies because it excludes certain
items that can vary widely across different industries or among
companies within the same industry. For example, interest expense
can be highly dependent on a company's capital structure, debt
levels and credit ratings. Therefore, the impact of interest
expense on earnings can vary significantly among companies. In
addition, the tax positions of companies can vary because of their
differing abilities to take advantage of tax benefits and because
of the tax policies of the various jurisdictions in which they
operate. As a result, effective tax rates and tax expense can vary
considerably among companies. Finally, companies employ productive
assets of different ages and utilize different methods of acquiring
and depreciating such assets. This can result in considerable
variability in the relative costs of productive assets and the
depreciation and amortization expense among companies.
|
|
|
|
Nevertheless, our
management recognizes that there are limitations associated with
the use of adjusted EBITDA in the evaluation of us as compared to
net income. Our management compensates for the limitations of using
adjusted EBITDA by using this measure to supplement U.S. GAAP
results to provide a more complete understanding of the factors and
trends affecting the business rather than U.S. GAAP results
alone.
|
|
|
|
In addition to the
limitations noted above, adjusted EBITDA excludes items that may be
recurring in nature and should not be disregarded in the evaluation
of performance. However, we believe it is useful to exclude such
items to provide a supplemental analysis of current results and
trends compared to other periods because certain excluded items can
vary significantly depending on specific underlying transactions or
events, and the variability of such items may not relate
specifically to ongoing operating results or trends and certain
excluded items, while potentially recurring in future periods, may
not be indicative of future results.
|
|
|
|
Adjusted net income
is computed by eliminating the after-tax amounts related to the
following from net income attributable to Venator Materials PLC
ordinary shareholders: (a) business acquisition and integration
expenses/adjustments; (b) loss/gain on disposition of
business/assets; (c) certain legal expenses/settlements; (d)
amortization of pension and postretirement actuarial losses/gains;
(e) net plant incident costs/credits; and (f) restructuring,
impairment, and plant closing and transition costs/credits. Basic
adjusted net earnings per share excludes dilution and is computed
by dividing adjusted net income by the weighted average number of
shares outstanding during the period. Adjusted diluted net earnings
per share reflects all potential dilutive ordinary shares
outstanding during the period increased by the number of additional
shares that would have been outstanding as dilutive
securities.
|
|
|
|
Adjusted net income
(loss) and adjusted net earnings (loss) per share amounts are
presented solely as supplemental information. These measures
exclude similar noncash items as Adjusted EBITDA in order to assist
our investors in comparing our performance from period to period
and as such, bear similar risks as Adjusted EBITDA as documented
above. For that reason, adjusted net income and the related per
share amounts, should not be considered in isolation and should be
considered only to supplement analysis of U.S. GAAP
results.
|
|
|
(2)
|
Prior to the second
quarter of 2019, the income tax impacts, if any, of each adjusting
item represented a ratable allocation of the total difference
between the unadjusted tax expense and the total adjusted tax
expense, computed without consideration of any adjusting items
using a with and without approach.
|
|
|
|
Beginning in the
three- and six-month periods ended June 30, 2019, income tax
expense is adjusted by the amount of additional tax expense or
benefit that we would accrue if we used non-GAAP results instead of
GAAP results in the calculation of our tax liability, taking into
consideration our tax structure. We use a normalized effective tax
rate of 35%, which reflects the weighted average tax rate
applicable under the various jurisdictions in which we operate.
This non-GAAP tax rate eliminates the effects of non-recurring and
period specific items which are often attributable to restructuring
and acquisition decisions and can vary in size and frequency. This
rate is subject to change over time for various reasons, including
changes in the geographic business mix, valuation allowances, and
changes in statutory tax rates.
|
|
|
|
We eliminate the
effect of significant changes to income tax valuation allowances
from our presentation of adjusted net income to allow investors to
better compare our ongoing financial performance from period to
period. We do not adjust for insignificant changes in tax valuation
allowances because we do not believe it provides more meaningful
information than is provided under GAAP. We believe that our
revised approach enables a clearer understanding of the long term
impact of our tax structure on post tax earnings.
|
|
|
(3)
|
Management internally
uses a free cash flow measure: (a) to evaluate the Company's
liquidity, (b) to evaluate strategic investments and
(c) to evaluate the Company's ability to incur and service
debt. Free cash flow is not a defined term under U.S. GAAP, and it
should not be inferred that the entire free cash flow amount is
available for discretionary expenditures. The Company defines free
cash flow as cash flows provided by (used in) operating activities
from continuing operations and used in investing activities. Free
cash flow is typically derived directly from the Company's
condensed consolidated statement of cash flows; however, it may be
adjusted for items that affect comparability between periods. Free
cash flow is presented as supplemental information.
|
About Venator
Venator is a global manufacturer and marketer of chemical products
that comprise a broad range of pigments and additives that bring
color and vibrancy to buildings, protect and extend product life,
and reduce energy consumption. We market our products globally to a
diversified group of industrial customers through two segments:
Titanium Dioxide, which consists of our TiO2 business,
and Performance Additives, which consists of our functional
additives, color pigments, timber treatment and water treatment
businesses. Based in Wynyard,
U.K., Venator employs approximately 4,000 associates and sells its
products in more than 110 countries.
Social Media:
Twitter: www.twitter.com/VenatorCorp
Facebook: www.facebook.com/venatorcorp
LinkedIn: www.linkedin.com/company/venator-corp
Cautionary Statement Concerning Forward-Looking
Statements
Certain statements contained in this press release constitute
"forward looking statements" within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995. These forward looking
statements represent Venator's expectations or beliefs concerning
future events, and it is possible that the expected results
described in this press release will not be achieved. These forward
looking statements are subject to risks, uncertainties and other
factors, many of which are outside of Venator's control, that could
cause actual results to differ materially from the results
discussed in the forward looking statements, including the impacts
and duration of the global outbreak of the Coronavirus Disease 2019
pandemic on the global economy and all aspects of our business,
including our employees, customers, suppliers, partners, results of
operations, financial condition and liquidity, global economic
conditions, our ability to maintain sufficient working capital, our
ability to access capital markets on favorable terms, our ability
to transfer technology and manufacturing capacity from our Pori,
Finland manufacturing facility to
other sites in our manufacturing network, the costs associated with
such transfer and the closure of our Pori facility, our ability to
realize financial and operational benefits from our business
improvement plans and initiatives, impacts on TiO2
markets and the broader global economy from the imposition of
tariffs by the U.S. and other countries, changes in raw material
and energy prices, or interruptions in raw materials and energy,
industry production capacity and operating rates, the supply demand
balance for our products and that of competing products, pricing
pressures, technological developments, legal claims by or against
us, changes in government regulations, including increased
manufacturing, labeling and waste disposal regulations and the
classification of TiO2 as a carcinogen in the EU,
geopolitical events, cyberattacks and public health crises such as
coronavirus.
Any forward looking statement speaks only as of the date on
which it is made, and, except as required by law, Venator does not
undertake any obligation to update or revise any forward looking
statement, whether as a result of new information, future events or
otherwise. New factors emerge from time to time, and it is not
possible for Venator to predict all such factors. When considering
these forward looking statements, you should keep in mind the risk
factors and other cautionary statements in Venator's Annual Report
on Form 10-K for the year ended December 31,
2019 filed with the SEC and in its Quarterly Reports on Form
10-Q and Current Reports on Form 8-K. The risk factors and other
factors noted therein could cause its actual results to differ
materially from those contained in any forward looking
statement.
View original content to download
multimedia:http://www.prnewswire.com/news-releases/venator-announces-second-quarter-2020-results-delivery-of-cost-initiatives-mitigate-the-effects-of-covid-19-301105265.html
SOURCE Venator Materials PLC