- Strong first quarter in Thermal & Specialized Solutions, company reaffirming full year 2023 Adjusted EBITDA and Free Cash Flow guidance
According to the company’s website news release on April 27, 2023, the Chemours Company (“Chemours”) (NYSE: CC), a global chemistry company with leading market positions in Titanium Technologies (TT), Thermal & Specialized Solutions (TSS), and Advanced Performance Materials (APM), announced its financial results for the first quarter 2023.
First Quarter 2023 Results & Highlights
- Net Sales of $1.5 billion
- Net Income of $145 million with EPS1 of $0.96
- Adjusted Net Income* of $148 million with Adjusted EPS* of $0.98
- Adjusted EBITDA* of $304 million
- Achieved record first quarter results in TSS, reflecting strong pricing and demand for our Opteon™ solutions
- Appointed Denise Dignam as President, Titanium Technologies & Chemical Solutions, Gerardo Familiar named President, Advanced Performance Materials
- Received two awards from U.S. Department of Energy (DOE) through its Better Buildings, Better Plants Initiative
- On April 27, 2023, the Company's Board of Directors approved a second quarter dividend of $0.25 per share, consistent with the prior quarter
"Chemours’ strong start to 2023 was driven by the growth underway in our TSS and APM segments. In TSS, demand for our Opteon™ low global warming potential thermal management solutions resulted in record first quarter Net Sales and Adjusted EBITDA, while APM delivered continued growth in our Performance Solutions portfolio which is essential to clean energy and advanced electronics applications,” said Mark Newman, Chemours President and CEO. “In our TT business, the near-term demand outlook remains mixed. Although destocking in Europe and China is largely behind us, global macroeconomic uncertainty will likely result in a more gradual recovery this year. Chemours remains committed to our key drivers of long-term shareholder value creation, and I want to recognize our global team for their focus in delivering strong first quarter results.”
First quarter 2023 Net Sales were $1.5 billion, (13)% lower than the prior-year quarter, driven by lower TT revenues. Price was a positive contributor to the results, up 6%, offset by lower volumes of (18)% and currency headwinds of (1)%, on a year-over-year basis.
First quarter Net Income was $145 million, resulting in EPS of $0.96, down $(0.47) vs. the prior-year quarter. Adjusted Net Income was $148 million. Adjusted EPS was $0.98, down $(0.48), or approximately (33)% vs. the prior-year quarter. Adjusted EBITDA for the first quarter of 2023 declined (25)% to $304 million in comparison to $403 million in the prior-year first quarter, driven primarily by TT results. Price continued to be ahead of cost in the first quarter, offset by the impact of lower volumes of (29)%. Currency was a (4)%, or $(15) million, headwind vs. the prior-year quarter due to a stronger USD.
Corporate and Other Activities
Corporate and Other was an offset to first quarter Adjusted EBITDA of $(45) million vs. $(65) million in the prior-year quarter. The decrease over the prior-year quarter was primarily attributable to lower legacy environmental and legal costs and lower long-term performance-related compensation.
Liquidity
As of March 31, 2023, consolidated gross debt was $3.6 billion. Debt, net of $0.8 billion cash, was $2.8 billion, resulting in a net leverage ratio of approximately 2.2 times on a trailing twelve-month Adjusted EBITDA basis. Total liquidity was $1.6 billion, comprised of $0.8 billion cash, and $0.8 billion of revolving credit facility capacity, net of outstanding letters of credit.
Cash used in operating activities for the first quarter of 2023 was $(119) million vs. $2 million cash provided by operating activities in the prior-year quarter. Capital expenditures for the first quarter of 2023 were $91 million vs. $106 million in the prior-year first quarter. Free Cash Flow for the first quarter of 2023 was $(210) million vs. $(104) million in the prior-year quarter. In the quarter, we repurchased $14 million of common stock.
Guidance
The Company is reaffirming its full year 2023 Adjusted EBITDA and Free Cash Flow guidance. The Company expects full year 2023 Adjusted EBITDA to be within the range of $1.20 - $1.30 billion and expects Free Cash Flow of greater than $350 million, inclusive of approximately $400 million of capital expenditures.
Mr. Newman concluded, "I am proud of the quarter we delivered as we continue to demonstrate the resiliency and growth potential of our portfolio. We are maintaining our guidance range and remain focused on our five key priorities to create long-term shareholder value, even as we closely monitor the ever-changing economic landscape.”
Conference Call
As previously announced, Chemours will hold a conference call and webcast exclusively for Q&A on April 28, 2023, at 8:00 AM Eastern Daylight Time. A transcript of the prepared remarks and additional presentation materials can be accessed by visiting the Events & Presentations page of Chemours' investor website, investors.chemours.com. A webcast replay of the conference call will be available on Chemours’ investor website.
About The Chemours Company
The Chemours Company (NYSE: CC) is a global leader in Titanium Technologies, Thermal & Specialized Solutions, and Advanced Performance Materials providing its customers with solutions in a wide range of industries with market-defining products, application expertise and chemistry-based innovations. We deliver customized solutions with a wide range of industrial and specialty chemicals products for markets, including coatings, plastics, refrigeration and air conditioning, transportation, semiconductor and consumer electronics, general industrial, and oil and gas. Our flagship products include prominent brands such as Ti-Pure™, Opteon™, Freon™, Teflon™, Viton™, Nafion™, and Krytox™. The company has approximately 6,600 employees and 29 manufacturing sites serving approximately 2,900 customers in approximately 120 countries. Chemours is headquartered in Wilmington, Delaware and is listed on the NYSE under the symbol CC.
For more information, we invite you to visit chemours.com or follow us on Twitter @Chemours or LinkedIn.
Non-GAAP Financial Measures
We prepare our financial statements in accordance with Generally Accepted Accounting Principles (GAAP). Within this press release, we may make reference to Adjusted Net Income, Adjusted EPS, Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow, Adjusted Effective Tax Rate, Return on Invested Capital and Net Leverage Ratio which are non-GAAP financial measures. The company includes these non-GAAP financial measures because management believes they are useful to investors in that they provide for greater transparency with respect to supplemental information used by management in its financial and operational decision making.
Management uses Adjusted Net Income, Adjusted EPS, Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow, Adjusted Effective Tax Rate, Return on Invested Capital and Net Leverage Ratio to evaluate the company's performance excluding the impact of certain noncash charges and other special items which we expect to be infrequent in occurrence in order to have comparable financial results to analyze changes in our underlying business from quarter to quarter.
Accordingly, the company believes the presentation of these non-GAAP financial measures, when used in conjunction with GAAP financial measures, is a useful financial analysis tool that can assist investors in assessing the company's operating performance and underlying prospects. This analysis should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. This analysis, as well as the other information in this press release, should be read in conjunction with the company's financial statements and footnotes contained in the documents that the company files with the U.S. Securities and Exchange Commission. The non-GAAP financial measures used by the company in this press release may be different from the methods used by other companies. For more information on the non-GAAP financial measures, please refer to the attached schedules or the table, "Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures" and materials posted to the company's website at investors.chemours.com.
Forward-Looking Statements
This press release contains forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which involve risks and uncertainties. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to a historical or current fact. The words "believe," "expect," "will," "anticipate," "plan," "estimate," "target," "project" and similar expressions, among others, generally identify "forward-looking statements," which speak only as of the date such statements were made. These forward-looking statements may address, among other things, the outcome or resolution of any pending or future environmental liabilities, the commencement, outcome or resolution of any regulatory inquiry, investigation or proceeding, the initiation, outcome or settlement of any litigation, changes in environmental regulations in the U.S. or other jurisdictions that affect demand for or adoption of our products, anticipated future operating and financial performance for our segments individually and our company as a whole, business plans, prospects, targets, goals and commitments, capital investments and projects and target capital expenditures, plans for dividends or share repurchases, sufficiency or longevity of intellectual property protection, cost reductions or savings targets, plans to increase profitability and growth, our ability to make acquisitions, integrate acquired businesses or assets into our operations, and achieve anticipated synergies or cost savings, all of which are subject to substantial risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Forward-looking statements are based on certain assumptions and expectations of future events that may not be accurate or realized, such as full year guidance relying on models based upon management assumptions regarding future events that are inherently uncertain. These statements are not guarantees of future performance. Forward-looking statements also involve risks and uncertainties that are beyond Chemours' control. Matters outside our control, including general economic conditions and the COVID-19 pandemic, have affected or may affect our business and operations and may or may continue to hinder our ability to provide goods and services to customers, cause disruptions in our supply chains such as through strikes, labor disruptions or other events, adversely affect our business partners, significantly reduce the demand for our products, adversely affect the health and welfare of our personnel or cause other unpredictable events. Additionally, there may be other risks and uncertainties that Chemours is unable to identify at this time or that Chemours does not currently expect to have a material impact on its business. Factors that could cause or contribute to these differences include the risks, uncertainties and other factors discussed in our filings with the U.S. Securities and Exchange Commission, including in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023 and in our Annual Report on Form 10-K for the year ended December 31, 2022. Chemours assumes no obligation to revise or update any forward-looking statement for any reason, except as required by law.
* For information on our non-GAAP measures, please refer to the attached "Reconciliation of GAAP Financial Measures to non-GAAP Financial Measures (Unaudited)"
INVESTORS
Jonathan Lock
SVP, Chief Development Officer
+1.302.773.2263 investor@chemours.com
Kurt Bonner
Manager, Investor Relations
+1.302.773.0026 investor@chemours.com
NEWS MEDIA
Thom Sueta
Director, Corporate Communications
+1.302.773.3903 media@chemours.com
