WYNYARD, UK, Nov. 3, 2021 /PRNewswire/ --
Third Quarter 2021 Highlights
- Net loss attributable to Venator of $47
million compared to $42
million in the prior year period
- Adjusted EBITDA of $48 million
compared to $17 million in the prior
year period
- Net cash provided by operating activities of $7 million and free cash flow of $(13) million
- Diluted loss per share of $0.44
and adjusted diluted earnings per share of $0.03
- Compared to the second quarter of 2021, average TiO2
selling prices increased 5% in local currency and TiO2
sales volumes were 1% lower
- Refinanced asset-backed revolving credit facility ("ABL") on
October 15, and extended maturity to
2026
- Completed valuation of largest pension plan, expect more than
$20 million in future annual cash
savings
|
|
Three months
ended
|
|
Nine months
ended
|
|
|
September
30,
|
|
June 30,
2021
|
|
September
30,
|
|
(In millions, except per share amounts)
|
|
2021
|
|
2020
|
|
|
2021
|
|
2020
|
|
Revenues
|
|
$
|
557
|
|
|
$
|
474
|
|
|
$
|
567
|
|
|
$
|
1,677
|
|
|
$
|
1,462
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable
to Venator
|
|
$
|
(47)
|
|
|
$
|
(42)
|
|
|
$
|
(23)
|
|
|
$
|
(91)
|
|
|
$
|
(54)
|
|
|
Adjusted net income
(loss) attributable to Venator(1)
|
|
$
|
3
|
|
|
$
|
(18)
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
(9)
|
|
|
Adjusted
EBITDA(1)
|
|
$
|
48
|
|
|
$
|
17
|
|
|
$
|
43
|
|
|
$
|
140
|
|
|
$
|
111
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted loss per
share (4)
|
|
$
|
(0.44)
|
|
|
$
|
(0.39)
|
|
|
$
|
(0.21)
|
|
|
$
|
(0.85)
|
|
|
$
|
(0.51)
|
|
|
Adjusted diluted
earnings (loss) per share(1)
|
|
$
|
0.03
|
|
|
$
|
(0.17)
|
|
|
$
|
—
|
|
|
$
|
0.04
|
|
|
$
|
(0.08)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
|
7
|
|
|
$
|
20
|
|
|
$
|
10
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
Free cash
flow(3)
|
|
$
|
(13)
|
|
|
$
|
13
|
|
|
$
|
(5)
|
|
|
$
|
(45)
|
|
|
$
|
(54)
|
|
|
|
See end of press
release for footnote explanations
|
Venator Materials PLC ("Venator") (NYSE: VNTR) today reported
third quarter 2021 results with revenues of $557 million, net loss attributable to Venator of
$47 million, adjusted net income
attributable to Venator of $3 million
and adjusted EBITDA of $48
million.
Simon Turner, President and
CEO of Venator, commented:
"Our businesses performed well during the third quarter.
Functional TiO2 demand remains robust across all sectors and demand
for our specialty TiO2 products is improving. These improved
conditions have enabled TiO2 margin expansion within the third
quarter through pricing actions. Underlying demand within our
Performance Additives business remains healthy, though dampened by
supply and logistical challenges, as well as softer demand for
Timber Treatment products. Energy, shipping and raw material costs
have increased rapidly. As well as our previously announced price
increases, we are implementing additional fourth quarter surcharges
on certain products and freight routes. We continue to take action
to control our costs and remain committed to further margin
expansion.
"A valuation of our largest pension plan was recently completed
and as a result, we expect more than $20
million in future annual cash savings. This represents an
important milestone as we work toward improving our cash flow
profile."
Segment Analysis for 3Q21 Compared to 3Q20
Titanium Dioxide
The Titanium Dioxide segment
generated revenues of $430 million
for the three months ended September 30,
2021, an increase of $87
million, or 25%, compared to the same period in 2020. The
increase was primarily due to a 12% increase in average local
currency selling prices which we implemented to recover higher
costs of energy, raw materials, and shipping, an 11% increase in
sales volumes driven by increased demand in the third quarter of
2021 compared to the same period in the prior year, which was
impacted by the COVID-19 pandemic, a 1% favorable impact from
foreign currency translation, primarily as a result of the Euro
strengthening against the U.S. Dollar, and a 1% favorable impact of
mix and other.
Adjusted EBITDA for the Titanium Dioxide segment was
$54 million for the three months
ended September 30, 2021, an increase
of $33 million, or 157%, compared to
the same period in 2020. The increase was primarily attributable to
an increase in sales volumes, improvements in selling price, a net
benefit from foreign currency translation compared to the prior
year period, $8 million of savings
from our 2020 business improvement program, and the favorable
impact of higher plant utilization in the current year. These
favorable variances were partially offset by $28 million of higher energy, raw material, and
shipping costs and the impact of $12
million of non-recurring savings during 2020 as a result of
actions taken to reduce costs during the COVID-19 pandemic.
Performance Additives
The Performance Additives
segment generated revenues of $127
million for the three months ended September 30, 2021, a decrease of $4 million, or 3%, compared to the same period in
2020. The decrease was primarily due to loss of revenue from our
water treatment business, which we sold in the second quarter of
2021 and which accounted for approximately $5 million of revenue in the third quarter of
2020. Excluding the impact of our water treatment business in the
third quarter of 2020, our Performance Additives segment revenues
increased by approximately $2
million, or 2%, from the prior year period as a result of a
2% increase in average selling price, a 2% increase in mix and
other, and a 1% favorable impact from foreign currency translation
primarily as a result of the Euro strengthening against the U.S.
Dollar, partially offset by a 3% decrease in sales volumes. The
decrease in volumes was primarily driven by softer demand in our
timber treatment business during the third quarter of 2021.
Adjusted EBITDA for the Performance Additives segment was
$5 million for the three months ended
September 30, 2021 and 2020. The
current year amount reflects the benefit of a higher average
selling price, the favorable impact of higher plant utilization in
the current year, and a $1 million
benefit from our 2020 business improvement program compared to the
prior year period. These favorable impacts were offset by higher
shipping, energy and raw material costs and the impact of
$1 million of non-recurring savings
during 2020 as a result of actions taken to reduce costs during the
COVID-19 pandemic.
Corporate and other
Corporate and other represents
expenses which are not allocated to our segments. Losses from
Corporate and other were $11 million
in the three months ended September 30,
2021 or $2 million higher than
the same period in 2020. The increase was primarily as a result of
$2 million of non-recurring savings
during 2020 as a result of actions taken to reduce costs during the
COVID-19 pandemic, and an unfavorable impact of foreign exchange
rates, partially offset by $1 million
of savings from our 2020 business improvement program.
Tax Items
We recorded income tax expense of
$4 million and $3 million for the three months ended September
30, 2021 and September 30, 2020,
respectively. Our adjusted effective tax rate was 35% for both the
three months ended September 30, 2021 and the same period in
2020.
Our income taxes are significantly affected by the mix of income
and losses in the tax jurisdictions and valuation allowances in
certain jurisdictions in which we operate. In 2021, we expect to
see an adjusted effective tax rate of approximately 35%. 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 September
30, 2021, we had $396 million of total liquidity. This
includes cash and cash equivalents of $161
million and $235 million of availability under our
existing asset-based revolving credit facility. At the end of the
third quarter, net debt was $793
million compared to $737
million as of December 31,
2020.
Year to date, capital expenditures totaled $47 million, including $20
million in the third quarter of 2021. We expect total
capital expenditures in 2021 to be approximately $75 million.
Earnings Conference Call Information
We will hold a
conference call to discuss our third quarter 2021 results on
Wednesday, November 3, 2021 at 9:00 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:
https://dpregister.com/sreg/10159979/ece4cac9a5
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 November 3, 2021 and ending
November 10, 2021.
|
Call-in numbers for
the replay:
|
|
U.S.
participants
|
1-877-344-7529
|
|
International
participants
|
1-412-317-0088
|
|
Passcode
|
10159979
|
Upcoming Conferences
During the fourth quarter of
2021, a member of management is expected to present at Citi's 2021
Basic Materials Virtual Conference on November 30, 2021 and Bank of America Leveraged
Finance Conference on December 1,
2021. 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
|
|
Nine months
ended
|
|
|
September
30,
|
|
September
30,
|
|
(In millions, except per share amounts)
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
Revenues
|
|
$
|
557
|
|
|
$
|
474
|
|
|
$
|
1,677
|
|
|
$
|
1,462
|
|
|
Cost of goods
sold
|
|
511
|
|
|
454
|
|
|
1,529
|
|
|
1,336
|
|
|
Operating
expenses
|
|
42
|
|
|
33
|
|
|
129
|
|
|
121
|
|
|
Restructuring,
impairment and plant closing and transition costs
|
|
35
|
|
|
13
|
|
|
60
|
|
|
25
|
|
|
Operating income
(loss)
|
|
(31)
|
|
|
(26)
|
|
|
(41)
|
|
|
(20)
|
|
|
Interest expense,
net
|
|
(15)
|
|
|
(15)
|
|
|
(44)
|
|
|
(37)
|
|
|
Other (expense)
income, net
|
|
3
|
|
|
5
|
|
|
10
|
|
|
12
|
|
|
Loss before income
taxes
|
|
(43)
|
|
|
(36)
|
|
|
(75)
|
|
|
(45)
|
|
|
Income tax
expense
|
|
(4)
|
|
|
(3)
|
|
|
(14)
|
|
|
(3)
|
|
|
Net
loss
|
|
(47)
|
|
|
(39)
|
|
|
(89)
|
|
|
(48)
|
|
|
Net income
attributable to noncontrolling interests
|
|
—
|
|
|
(3)
|
|
|
(2)
|
|
|
(6)
|
|
|
Net loss
attributable to Venator
|
|
$
|
(47)
|
|
|
$
|
(42)
|
|
|
$
|
(91)
|
|
|
$
|
(54)
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA(1)
|
|
$
|
48
|
|
|
$
|
17
|
|
|
$
|
140
|
|
|
$
|
111
|
|
|
Adjusted net
income (loss) attributable to Venator(1)
|
|
$
|
3
|
|
|
$
|
(18)
|
|
|
$
|
4
|
|
|
$
|
(9)
|
|
|
|
|
|
|
|
|
|
|
|
Basic loss per
share
|
|
$
|
(0.44)
|
|
|
$
|
(0.39)
|
|
|
$
|
(0.85)
|
|
|
$
|
(0.51)
|
|
|
Diluted loss per
share(4)
|
|
$
|
(0.44)
|
|
|
$
|
(0.39)
|
|
|
$
|
(0.85)
|
|
|
$
|
(0.51)
|
|
|
Adjusted earnings
(loss) per share(1)
|
|
$
|
0.03
|
|
|
$
|
(0.17)
|
|
|
$
|
0.04
|
|
|
$
|
(0.08)
|
|
|
Adjusted diluted
earnings (loss) per share(1)
|
|
$
|
0.03
|
|
|
$
|
(0.17)
|
|
|
$
|
0.04
|
|
|
$
|
(0.08)
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary share
information:
|
|
|
|
|
|
|
|
|
|
Basic shares
outstanding
|
|
107.3
|
|
|
106.7
|
|
|
107.2
|
|
|
106.7
|
|
|
Diluted
shares(4)
|
|
107.5
|
|
|
106.7
|
|
|
107.5
|
|
|
106.7
|
|
|
|
See end of press
release for footnote explanations
|
|
Table 2 — Results
of Operations by Segment
|
|
|
|
Three months
ended
|
|
|
|
Nine months
ended
|
|
|
|
|
September
30,
|
|
Favorable
/
|
|
September
30,
|
|
Favorable
/
|
|
(In millions)
|
|
2021
|
|
2020
|
|
(Unfavorable)
|
|
2021
|
|
2020
|
|
(Unfavorable)
|
|
Segment
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Titanium
Dioxide
|
|
$
|
430
|
|
|
$
|
343
|
|
|
25%
|
|
$
|
1,259
|
|
|
$
|
1,083
|
|
|
16%
|
|
Performance
Additives
|
|
127
|
|
|
131
|
|
|
(3)%
|
|
418
|
|
|
379
|
|
|
10%
|
|
Total
|
|
$
|
557
|
|
|
$
|
474
|
|
|
18%
|
|
$
|
1,677
|
|
|
$
|
1,462
|
|
|
15%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Adjusted
EBITDA(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Titanium
Dioxide
|
|
$
|
54
|
|
|
$
|
21
|
|
|
157%
|
|
$
|
130
|
|
|
$
|
102
|
|
|
27%
|
|
Performance
Additives
|
|
5
|
|
|
5
|
|
|
—%
|
|
46
|
|
|
40
|
|
|
15%
|
|
Corporate and
other
|
|
(11)
|
|
|
(9)
|
|
|
(22)%
|
|
(36)
|
|
|
(31)
|
|
|
(16)%
|
|
Total
|
|
$
|
48
|
|
|
$
|
17
|
|
|
182%
|
|
$
|
140
|
|
|
$
|
111
|
|
|
26%
|
|
|
See end of press
release for footnote explanations
|
|
Table 3 — Factors
Impacting Sales Revenue
|
|
|
Three months
ended
|
|
September 30, 2021
vs. 2020
|
|
Average Selling Price(a)
|
|
|
|
|
|
|
|
Local
Currency
|
|
Exchange
Rate
|
|
Sales Mix
& Other
|
|
Sales
Volume(b)
|
|
Total
|
|
Titanium
Dioxide
|
12%
|
|
1%
|
|
1%
|
|
11%
|
|
25%
|
|
Performance
Additives
|
2%
|
|
1%
|
|
23%
|
|
(29)%
|
|
(3)%
|
|
Total
Company
|
10%
|
|
1%
|
|
7%
|
|
—%
|
|
18%
|
|
|
|
|
|
Nine months
ended
|
|
September 30, 2021
vs. 2020
|
|
Average Selling Price(a)
|
|
|
|
|
|
|
|
Local
Currency
|
|
Exchange
Rate
|
|
Sales Mix
& Other
|
|
Sales
Volume(b)
|
|
Total
|
|
Titanium
Dioxide
|
4%
|
|
5%
|
|
—%
|
|
7%
|
|
16%
|
|
Performance
Additives
|
1%
|
|
3%
|
|
12%
|
|
(6)%
|
|
10%
|
|
Total
Company
|
4%
|
|
4%
|
|
3%
|
|
4%
|
|
15%
|
|
|
|
(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)(4)
|
|
|
Three months
ended
|
|
Three months
ended
|
|
Three months
ended
|
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
(In millions, except per share amounts)
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
Net
loss
|
|
$
|
(47)
|
|
|
$
|
(39)
|
|
|
$
|
(47)
|
|
|
$
|
(39)
|
|
|
$
|
(0.44)
|
|
|
$
|
(0.36)
|
|
|
Net income
attributable to noncontrolling interests
|
|
—
|
|
|
(3)
|
|
|
—
|
|
|
(3)
|
|
|
—
|
|
|
(0.04)
|
|
|
Net loss
attributable to Venator
|
|
(47)
|
|
|
(42)
|
|
|
(47)
|
|
|
(42)
|
|
|
(0.44)
|
|
|
(0.39)
|
|
|
Interest expense,
net
|
|
15
|
|
|
15
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
4
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
29
|
|
|
29
|
|
|
|
|
|
|
|
|
|
|
(Gain) loss on
disposal of businesses/assets
|
|
—
|
|
|
(6)
|
|
|
—
|
|
|
(6)
|
|
|
—
|
|
|
(0.06)
|
|
|
Certain legal
expenses/settlements
|
|
3
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
0.03
|
|
|
—
|
|
|
Amortization of
pension and postretirement actuarial losses
|
|
3
|
|
|
3
|
|
|
3
|
|
|
3
|
|
|
0.03
|
|
|
0.03
|
|
|
Net plant incident
costs
|
|
6
|
|
|
2
|
|
|
6
|
|
|
2
|
|
|
0.06
|
|
|
0.02
|
|
|
Restructuring,
impairment, plant closing and transition costs
|
|
35
|
|
|
13
|
|
|
35
|
|
|
13
|
|
|
0.33
|
|
|
0.12
|
|
|
Income tax
adjustments(2)
|
|
—
|
|
|
—
|
|
|
3
|
|
|
12
|
|
|
0.03
|
|
|
0.11
|
|
|
Adjusted(1)
|
|
$
|
48
|
|
|
$
|
17
|
|
|
$
|
3
|
|
|
$
|
(18)
|
|
|
$
|
0.03
|
|
|
$
|
(0.17)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted income tax
expense(2)
|
|
|
|
|
|
$
|
1
|
|
|
$
|
(9)
|
|
|
|
|
|
|
Net income
attributable to noncontrolling interests, net of tax
|
|
|
|
|
|
—
|
|
|
3
|
|
|
|
|
|
|
Adjusted pre-tax
income (loss)
|
|
|
|
|
|
$
|
4
|
|
|
$
|
(24)
|
|
|
|
|
|
|
Adjusted effective
tax rate
|
|
|
|
|
|
35%
|
|
35%
|
|
|
|
|
|
|
EBITDA
|
|
Net Income
(Loss)
|
|
Diluted
Earnings
(Loss) Per
Share(1)
|
|
|
Three months
ended June 30,
|
|
Three months
ended June 30,
|
|
Three months
ended June 30,
|
|
(In millions, except per share amounts)
|
|
2021
|
|
2021
|
|
2021
|
|
Net
loss
|
|
$
|
(22)
|
|
|
$
|
(22)
|
|
|
$
|
(0.20)
|
|
|
Net income
attributable to noncontrolling interests
|
|
(1)
|
|
|
(1)
|
|
|
(0.01)
|
|
|
Net loss
attributable to Venator
|
|
(23)
|
|
|
(23)
|
|
|
(0.21)
|
|
|
Interest expense,
net
|
|
14
|
|
|
|
|
|
|
Income tax
expense
|
|
5
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
29
|
|
|
|
|
|
|
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
|
|
2
|
|
|
2
|
|
|
0.02
|
|
|
Restructuring,
impairment, plant closing and transition costs
|
|
11
|
|
|
11
|
|
|
0.10
|
|
|
Income tax
adjustments(2)
|
|
—
|
|
|
5
|
|
|
0.05
|
|
|
Adjusted(1)
|
|
$
|
43
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
Adjusted income tax
expense(2)
|
|
|
|
$
|
—
|
|
|
|
|
Net income
attributable to noncontrolling interests, net of tax
|
|
|
|
1
|
|
|
|
|
Adjusted pre-tax
loss
|
|
|
|
$
|
1
|
|
|
|
|
Adjusted effective
tax rate
|
|
|
|
35
|
%
|
|
|
|
|
EBITDA
|
|
Net Income
(Loss)
|
|
Diluted
Earnings
(Loss) Per Share(1)(4)
|
|
|
Nine months
ended
|
|
Nine months
ended
|
|
Nine months
ended
|
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
(In millions, except per share amounts)
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
Net
loss
|
|
$
|
(89)
|
|
|
$
|
(48)
|
|
|
$
|
(89)
|
|
|
$
|
(48)
|
|
|
$
|
(0.83)
|
|
|
$
|
(0.45)
|
|
|
Net income
attributable to noncontrolling interests
|
|
(2)
|
|
|
(6)
|
|
|
(2)
|
|
|
(6)
|
|
|
(0.02)
|
|
|
(0.06)
|
|
|
Net loss
attributable to Venator
|
|
(91)
|
|
|
(54)
|
|
|
(91)
|
|
|
(54)
|
|
|
(0.85)
|
|
|
(0.51)
|
|
|
Interest expense,
net
|
|
44
|
|
|
37
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
14
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
89
|
|
|
85
|
|
|
|
|
|
|
|
|
|
|
Business acquisition
and integration adjustments
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
0.01
|
|
|
Loss (gain) on
disposal of businesses/assets
|
|
2
|
|
|
(4)
|
|
|
2
|
|
|
(4)
|
|
|
0.02
|
|
|
(0.04)
|
|
|
Certain legal
expenses/settlements
|
|
4
|
|
|
3
|
|
|
4
|
|
|
3
|
|
|
0.04
|
|
|
0.03
|
|
|
Amortization of
pension and postretirement actuarial losses
|
|
9
|
|
|
10
|
|
|
9
|
|
|
10
|
|
|
0.08
|
|
|
0.09
|
|
|
Net plant incident
costs
|
|
9
|
|
|
5
|
|
|
9
|
|
|
5
|
|
|
0.08
|
|
|
0.05
|
|
|
Restructuring,
impairment, plant closing and transition costs
|
|
60
|
|
|
25
|
|
|
60
|
|
|
25
|
|
|
0.57
|
|
|
0.24
|
|
|
Income tax
adjustments(2)
|
|
—
|
|
|
—
|
|
|
11
|
|
|
5
|
|
|
0.10
|
|
|
0.05
|
|
|
Adjusted(1)
|
|
$
|
140
|
|
|
$
|
111
|
|
|
$
|
4
|
|
|
$
|
(9)
|
|
|
$
|
0.04
|
|
|
$
|
(0.08)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted income tax
expense(2)
|
|
|
|
|
|
$
|
3
|
|
|
$
|
(2)
|
|
|
|
|
|
|
Net income
attributable to noncontrolling interests, net of tax
|
|
|
|
|
|
2
|
|
|
6
|
|
|
|
|
|
|
Adjusted pre-tax
income (loss)
|
|
|
|
|
|
$
|
9
|
|
|
$
|
(5)
|
|
|
|
|
|
|
Adjusted effective
tax rate
|
|
|
|
|
|
35%
|
|
35%
|
|
|
|
|
|
|
See end of press
release for footnote explanations
|
|
Table 5 — Selected
Balance Sheet Items
|
|
|
|
September
30,
|
|
December
31,
|
|
(In millions)
|
|
2021
|
|
2020
|
|
Cash and cash
equivalents
|
|
$
|
161
|
|
|
$
|
220
|
|
|
Accounts and notes
receivable, net
|
|
394
|
|
|
324
|
|
|
Inventories
|
|
418
|
|
|
440
|
|
|
Prepaid expenses and
other current assets
|
|
80
|
|
|
73
|
|
|
Property, plant and
equipment, net
|
|
869
|
|
|
947
|
|
|
Other
assets
|
|
380
|
|
|
353
|
|
|
Total
assets
|
|
$
|
2,302
|
|
|
$
|
2,357
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
319
|
|
|
$
|
262
|
|
|
Other current
liabilities
|
|
127
|
|
|
126
|
|
|
Current portion of
debt
|
|
5
|
|
|
7
|
|
|
Long-term
debt
|
|
949
|
|
|
950
|
|
|
Non-current payable
to affiliates
|
|
17
|
|
|
17
|
|
|
Other non-current
liabilities
|
|
364
|
|
|
371
|
|
|
Total
equity
|
|
521
|
|
|
624
|
|
|
Total liabilities
and equity
|
|
$
|
2,302
|
|
|
$
|
2,357
|
|
|
Table 6 —
Outstanding Debt
|
|
|
|
September
30,
|
|
December
31,
|
|
(In millions)
|
|
2021
|
|
2020
|
|
Debt:
|
|
|
|
|
|
Term Loan
Facility
|
|
$
|
357
|
|
|
$
|
359
|
|
|
Senior Secured
Notes
|
|
216
|
|
|
215
|
|
|
Senior Unsecured
Notes
|
|
372
|
|
|
372
|
|
|
Other debt
|
|
9
|
|
|
11
|
|
|
Total debt -
excluding affiliates
|
|
954
|
|
|
957
|
|
|
Total cash
|
|
161
|
|
|
220
|
|
|
Net debt -
excluding affiliates
|
|
$
|
793
|
|
|
$
|
737
|
|
|
Table 7 —
Summarized Statement of Cash Flows
|
|
|
|
Three months
ended
|
|
Nine months
ended
|
|
|
September
30,
|
|
September
30,
|
|
(In millions)
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
Total cash at
beginning of period
|
|
$
|
182
|
|
|
$
|
188
|
|
|
$
|
220
|
|
|
$
|
55
|
|
|
Net cash provided by
operating activities
|
|
7
|
|
|
20
|
|
|
2
|
|
|
—
|
|
|
Net cash (used in)
provided by investing activities
|
|
(26)
|
|
|
4
|
|
|
(47)
|
|
|
(43)
|
|
|
Net cash provided by
(used in) financing activities
|
|
(1)
|
|
|
(5)
|
|
|
(12)
|
|
|
195
|
|
|
Effect of exchange
rate changes on cash
|
|
(1)
|
|
|
1
|
|
|
(2)
|
|
|
1
|
|
|
Total cash at end
of period
|
|
$
|
161
|
|
|
$
|
208
|
|
|
$
|
161
|
|
|
$
|
208
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash
flow information:
|
|
|
|
|
|
|
|
|
|
Cash paid for
interest
|
|
$
|
(27)
|
|
|
$
|
(17)
|
|
|
$
|
(58)
|
|
|
$
|
(35)
|
|
|
Cash paid for income
taxes
|
|
(1)
|
|
|
—
|
|
|
(5)
|
|
|
—
|
|
|
Capital
expenditures
|
|
(20)
|
|
|
(7)
|
|
|
(47)
|
|
|
(54)
|
|
|
Depreciation and
amortization
|
|
29
|
|
|
29
|
|
|
89
|
|
|
85
|
|
|
Restructuring
|
|
(2)
|
|
|
(2)
|
|
|
(7)
|
|
|
(7)
|
|
|
Net cash flows
associated with Pori
|
|
(3)
|
|
|
3
|
|
|
(10)
|
|
|
(3)
|
|
|
|
|
|
|
|
|
|
|
|
Changes in primary
working capital:
|
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
2
|
|
|
33
|
|
|
(79)
|
|
|
20
|
|
|
Inventories
|
|
(5)
|
|
|
65
|
|
|
8
|
|
|
87
|
|
|
Accounts
payable
|
|
19
|
|
|
(46)
|
|
|
64
|
|
|
(113)
|
|
|
Total cash provided
by (used in) primary working capital
|
|
$
|
16
|
|
|
$
|
52
|
|
|
$
|
(7)
|
|
|
$
|
(6)
|
|
|
|
Three months
ended
|
|
|
|
|
|
Nine months
ended
|
|
|
September
30,
|
|
June 30,
2021
|
|
September
30,
|
|
(In
millions)
|
|
2021
|
|
2020
|
|
|
2021
|
|
2020
|
|
Free cash
flow(3):
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
(used in) operating activities
|
|
$
|
7
|
|
|
$
|
20
|
|
|
$
|
10
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
Capital
expenditures
|
|
(20)
|
|
|
(7)
|
|
|
(15)
|
|
|
(47)
|
|
|
(54)
|
|
|
Total free cash
flow(3)
|
|
$
|
(13)
|
|
|
$
|
13
|
|
|
$
|
(5)
|
|
|
$
|
(45)
|
|
|
$
|
(54)
|
|
|
|
See end of press
release for numbered footnote explanations
|
|
(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 expense/adjustments; (b) loss/gain on disposition of
businesses/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
(loss) attributable to Venator Materials PLC ordinary shareholders
is computed by eliminating the after-tax amounts related to the
following from net income/loss attributable to Venator Materials
PLC ordinary shareholders: (a) business acquisition and integration
expenses/adjustments; (b) loss/gain on disposition of
businesses/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 income 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 income
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 income (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)
|
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.
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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.
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(3)
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Management internally
uses a free cash flow measure: (a) to evaluate the Company's
liquidity, (b) to evaluate strategic investments, (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. Free cash flow is defined as cash flows
provided by (used in) operating activities from continuing
operations less capital expenditures. The Company updated its
definition of free cash flow during the third quarter of 2021 to
conform to the definition more commonly used by publicly traded
companies. Prior to the third quarter of 2021, free cash flow was
defined as cash flows provided by (used in) operating activities
from continuing operations and used in investing activities. Prior
period comparatives within this release have been restated for the
updated definition. Free cash flow is typically derived directly
from the Company's 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.
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(4)
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The potentially
dilutive impact of share-based awards was excluded from the
calculation of earnings per share for the three months and nine
months ended September 30, 2021 because there is an anti-dilutive
effect as we are in a net loss position.
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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 and timber treatment
businesses. We operate 21 facilities, employ approximately 3,600
associates worldwide and sell our products in more than 120
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 COVID-19 pandemic, including the Delta variant and
other variants, 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 business 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, 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, the impacts of
climate change and increasing climate change regulations,
geopolitical events, cyberattacks and public health crises.
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 filings with
the US Securities and Exchange Commission, including Venator's
Annual Reports on Form 10-K for the year ended December 31, 2020, its Quarterly Report on Form
10-Q for the quarter ended March 31,
2021 and its quarterly reports on Form 6-K for the quarters
ended June 30, 2021 and September 30, 2021. The risk factors and other
factors noted therein could cause its actual results to differ
materially from those contained in any forward looking
statement.
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SOURCE Venator Materials PLC
