- Net sales of $645 million, an increase of 8% on a reported basis or 6% on an organic basis from the third quarter of 2023
- Reported net income of $40 million, compared to a net loss of $32 million in the same period last year
- Adjusted EBITDA of $143 million, compared to $134 million in the same period last year, an increase of 6% on a reported basis and 8% on a constant currency basis
- Third quarter 2024 cash flows from operating activities of $99 million and free cash flow of $86 million
MIAMI–(BUSINESS WIRE)–Element Solutions Inc (NYSE:ESI) (“Element Solutions” or the “Company”), a global and diversified specialty chemicals company, today announced its financial results for the three and nine months ended September 30, 2024.
Executive Commentary
President and Chief Executive Officer Benjamin Gliklich commented, “Element Solutions delivered strong results once again this quarter. Financially, operationally and strategically, we executed well. The Electronics segment continued to capitalize on developing technology trends like advanced packaging and high-performance computing, which represent the highest value and fastest growing portions of our markets. We have invested deliberately over several years to build capabilities oriented towards these emerging opportunities, and our results reflect progress, particularly in the context of ongoing softness in several historical core markets, including Western smartphones and automotive. Our Industrial & Specialty business also grew earnings despite a weakening industrial macro backdrop over the course of the quarter, particularly in Europe. Taken together, we continue to deliver on our commitments and to outperform our markets in each of our segments. Our narrowed full year 2024 adjusted EBITDA guidance range implies record earnings despite overall end-markets remaining well below prior peak levels.”
Mr. Gliklich continued, “Our actions this quarter repositioned our portfolio and improved our overall business quality and balance sheet. The previously announced sale of MacDermid Graphics Solutions will further focus our company on its core markets and should improve our underlying growth rate, margins and cash return on investment. The transaction is expected to close between year end and the end of the second quarter of 2025, pending closing conditions and regulatory approvals. Including the expected proceeds from the transaction, our net leverage ratio at year end 2024 would be approximately 2.5x leaving more capacity for strategic capital deployment than we have had in several years. Element Solutions is well-positioned for another record year in 2025.”
Third Quarter 2024 Highlights (compared with third quarter 2023)
-
Net sales on a reported basis for the third quarter of 2024 were $645 million, an increase of 8% over the third quarter of 2023. Organic net sales increased 6%.
- Electronics: Net sales increased 14% to $419 million. Organic net sales increased 9%.
- Industrial & Specialty: Net sales decreased 3% to $226 million. Organic net sales remained relatively flat.
-
Third quarter of 2024 earnings per share (EPS) performance:
- GAAP diluted EPS was $0.17, as compared to a loss per share of $0.13 for the same period last year.
- Adjusted EPS was $0.39, as compared to $0.36 for the same period last year.
-
Reported net income for the third quarter of 2024 was $40 million, as compared to a net loss of $32 million for the third quarter of 2023.
- Net income margin increased to 6.3%.
-
Adjusted EBITDA for the third quarter of 2024 was $143 million, as compared to $134 million for the third quarter of 2023, an increase of 6%. On a constant currency basis, adjusted EBITDA increased 8%.
- Electronics: Adjusted EBITDA was $99 million, an increase of 9%. On a constant currency basis, adjusted EBITDA increased 10%.
- Industrial & Specialty: Adjusted EBITDA was $44 million, an increase of 1%. On a constant currency basis, adjusted EBITDA increased 4%.
- Adjusted EBITDA margin decreased by 30 basis points to 22.1%. On a constant currency basis, adjusted EBITDA margin decreased by 20 basis points.
Updated 2024 Guidance
The Company expects full year 2024 adjusted EBITDA to be in the range of $535 million to $540 million. In addition, the Company expects its full year 2024 free cash flow to be in the range of $280 million to $300 million.
Recent Developments
MacDermid Graphics Solutions Transaction — On September 1, 2024, the Company entered into an agreement to sell its flexographic printing plate business, MacDermid Graphics Solutions, for approximately $325 million. MacDermid Graphics Solutions constitutes substantially all of the Company’s Graphics Solutions business. The transaction is expected to close in the fourth quarter of 2024 or the first half of 2025, subject to customary closing conditions, adjustments and regulatory approvals.
Syndication of $1.04 billion Term Loans and Debt Reduction — On October 15, 2024, the Company completed the syndication of $1.04 billion of new term loans B-3 which resulted in an interest rate reduction of 25 basis points to SOFR plus a spread of 1.75% per annum. In connection with this repricing, the Company fully paid down its $1.14 billion term loans B-2, therefore reducing its borrowing under its credit agreement by $100 million. The Company also terminated $100 million notional of the interest rate swaps and cross-currency swaps that would have matured in January 2025. The net proceeds of the new term loans and cash on hand were used to prepay in full the Company’s term loans B-2.
Conference Call
Element Solutions will host a webcast/dial-in conference call to discuss its 2024 third quarter financial results at 8:30 a.m. (Eastern Time) on Tuesday, October 29, 2024. Participants on the call will include President and Chief Executive Officer Benjamin Gliklich and Chief Financial Officer Carey J. Dorman.
To listen to the call by telephone, please dial 888-510-2346 (domestic) or 646-960-0111 (international) and provide the Conference ID: 3799230. The call will be simultaneously webcast at www.elementsolutionsinc.com. A replay of the call will be available after completion of the live call at www.elementsolutionsinc.com.
About Element Solutions
Element Solutions Inc is a leading global specialty chemicals company whose businesses supply a broad range of solutions that enhance the performance of products people use every day. Developed in multi-step technological processes, these innovative solutions enable customers’ manufacturing processes in several key industries, including consumer electronics, power electronics, semiconductor fabrication, communications and data storage infrastructure, automotive systems, industrial surface finishing, consumer packaging and offshore energy.
More information about the Company is available at www.elementsolutionsinc.com.
Forward-Looking Statements
This release is intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995 as it contains “forward-looking statements” within the meaning of the federal securities laws. These statements will often contain words such as “expect,” “anticipate,” “project,” “will,” “should,” “believe,” “intend,” “plan,” “assume,” “estimate,” “predict,” “seek,” “continue,” “outlook,” “may,” “might,” “aim,” “can have,” “likely,” “potential,” “target,” “hope,” “goal,” “priority,” “guidance” or “confident” and variations of such words and similar expressions. Examples of forward-looking statements include, but are not limited to, statements, beliefs, projections or expectations regarding capitalizing on developing technology trends and emerging opportunities; market trends and growth; commitment to outperform end-markets; expected benefits of the MacDermid Graphics Solutions transaction; the timing for completion of this transaction; the ability of the parties to close this transaction, including obtaining regulatory approvals and meeting other closing conditions; net debt leverage ratio at year end 2024 including the expected proceeds of this transaction; capital deployment; non-GAAP effective tax rate; full year 2024 guidance for adjusted EBITDA, constant currency adjusted EBITDA growth and free cash flow; and expected record year in 2025. These projections and statements are based on management’s estimates, assumptions or expectations with respect to future events and financial performance, and are believed to be reasonable, though are inherently uncertain and difficult to predict. Such projections and statements are based on the assessment of information available as of the current date, and the Company does not undertake any obligations to provide any further updates. Actual results could differ materially from those expressed or implied in the forward-looking statements if one or more of the underlying estimates, assumptions or expectations prove to be inaccurate or are unrealized. Important factors that could cause actual results to differ materially from those suggested by the forward-looking statements include, but are not limited to, the war between Russia and Ukraine, the Israel-Hamas conflict and other hostilities in the Middle-East as well as actions in response thereto and their impact on market conditions and the global economy; the continuing economic impact of the coronavirus (COVID-19) and its variants on the global economy and supply chains; price volatility and cost environment; inflation and fluctuations in foreign exchange rates; outstanding debt and debt leverage ratio; shares repurchases; debt and/or equity issuance or retirement; expected returns to stockholders; and the impact of acquisitions, divestitures, restructurings, refinancings, impairments and other unusual items, including the Company’s ability to integrate and obtain the anticipated benefits, results and synergies from these items or other related strategic initiatives. Additional information concerning these and other factors that could cause actual results to vary is, or will be, included in the Company’s periodic and other reports filed with the Securities and Exchange Commission. The Company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.
|
ELEMENT SOLUTIONS INC CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) |
|||||||||||||||
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||||||
|
(dollars in millions, except per share amounts) |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
Net sales |
$ |
645.0 |
|
|
$ |
599.3 |
|
|
$ |
1,832.7 |
|
|
$ |
1,759.8 |
|
|
Cost of sales |
|
377.5 |
|
|
|
357.4 |
|
|
|
1,053.0 |
|
|
|
1,061.6 |
|
|
Gross profit |
|
267.5 |
|
|
|
241.9 |
|
|
|
779.7 |
|
|
|
698.2 |
|
|
Operating expenses: |
|
|
|
|
|
|
|
||||||||
|
Selling, technical, general and administrative |
|
157.6 |
|
|
|
149.9 |
|
|
|
462.1 |
|
|
|
445.8 |
|
|
Research and development |
|
14.9 |
|
|
|
12.9 |
|
|
|
48.6 |
|
|
|
54.3 |
|
|
Goodwill impairment |
|
— |
|
|
|
80.0 |
|
|
|
— |
|
|
|
80.0 |
|
|
Total operating expenses |
|
172.5 |
|
|
|
242.8 |
|
|
|
510.7 |
|
|
|
580.1 |
|
|
Operating profit (loss) |
|
95.0 |
|
|
|
(0.9 |
) |
|
|
269.0 |
|
|
|
118.1 |
|
|
Other (expense) income: |
|
|
|
|
|
|
|
||||||||
|
Interest expense, net |
|
(14.2 |
) |
|
|
(13.3 |
) |
|
|
(42.4 |
) |
|
|
(37.0 |
) |
|
Foreign exchange gains (losses) |
|
11.1 |
|
|
|
(5.3 |
) |
|
|
24.0 |
|
|
|
8.6 |
|
|
Other (expense) income, net |
|
(14.7 |
) |
|
|
3.1 |
|
|
|
(29.7 |
) |
|
|
1.8 |
|
|
Total other expense |
|
(17.8 |
) |
|
|
(15.5 |
) |
|
|
(48.1 |
) |
|
|
(26.6 |
) |
|
Income (loss) before income taxes and non-controlling interests |
|
77.2 |
|
|
|
(16.4 |
) |
|
|
220.9 |
|
|
|
91.5 |
|
|
Income tax expense |
|
(36.8 |
) |
|
|
(15.3 |
) |
|
|
(32.8 |
) |
|
|
(53.4 |
) |
|
Net income (loss) from continuing operations |
|
40.4 |
|
|
|
(31.7 |
) |
|
|
188.1 |
|
|
|
38.1 |
|
|
Income from discontinued operations, net of tax |
|
— |
|
|
|
— |
|
|
|
1.6 |
|
|
|
2.9 |
|
|
Net income (loss) |
|
40.4 |
|
|
|
(31.7 |
) |
|
|
189.7 |
|
|
|
41.0 |
|
|
Net income attributable to non-controlling interests |
|
(0.1 |
) |
|
|
(0.1 |
) |
|
|
(0.2 |
) |
|
|
— |
|
|
Net income (loss) attributable to common stockholders |
$ |
40.3 |
|
|
$ |
(31.8 |
) |
|
$ |
189.5 |
|
|
$ |
41.0 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Earnings (loss) per share |
|
|
|
|
|
|
|
||||||||
|
Basic from continuing operations |
$ |
0.17 |
|
|
$ |
(0.13 |
) |
|
$ |
0.77 |
|
|
$ |
0.16 |
|
|
Basic from discontinued operations |
|
— |
|
|
|
— |
|
|
|
0.01 |
|
|
|
0.01 |
|
|
Basic attributable to common stockholders |
$ |
0.17 |
|
|
$ |
(0.13 |
) |
|
$ |
0.78 |
|
|
$ |
0.17 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Diluted from continuing operations |
$ |
0.17 |
|
|
$ |
(0.13 |
) |
|
$ |
0.77 |
|
|
$ |
0.16 |
|
|
Diluted from discontinued operations |
|
— |
|
|
|
— |
|
|
|
0.01 |
|
|
|
0.01 |
|
|
Diluted attributable to common stockholders |
$ |
0.17 |
|
|
$ |
(0.13 |
) |
|
$ |
0.78 |
|
|
$ |
0.17 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Weighted average common shares outstanding |
|
|
|
|
|
|
|
||||||||
|
Basic |
|
242.1 |
|
|
|
241.5 |
|
|
|
242.0 |
|
|
|
241.4 |
|
|
Diluted |
|
242.6 |
|
|
|
241.5 |
|
|
|
242.5 |
|
|
|
241.8 |
|
|
ELEMENT SOLUTIONS INC CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) |
|||||||
|
|
September 30, |
|
December 31, |
||||
|
(dollars in millions) |
|
2024 |
|
|
|
2023 |
|
|
Assets |
|
|
|
||||
|
Cash and cash equivalents |
$ |
376.0 |
|
|
$ |
289.3 |
|
|
Accounts receivable, net of allowance for doubtful accounts of $10.6 and $12.6 at September 30, 2024 and December 31, 2023, respectively |
|
474.9 |
|
|
|
461.8 |
|
|
Inventories |
|
285.7 |
|
|
|
298.9 |
|
|
Prepaid expenses |
|
28.2 |
|
|
|
32.5 |
|
|
Other current assets |
|
116.4 |
|
|
|
115.0 |
|
|
Current assets held for sale |
|
70.0 |
|
|
|
— |
|
|
Total current assets |
|
1,351.2 |
|
|
|
1,197.5 |
|
|
Property, plant and equipment, net |
|
273.9 |
|
|
|
296.9 |
|
|
Goodwill |
|
2,220.2 |
|
|
|
2,336.7 |
|
|
Intangible assets, net |
|
782.2 |
|
|
|
879.3 |
|
|
Deferred income tax assets |
|
159.3 |
|
|
|
120.5 |
|
|
Other assets |
|
120.0 |
|
|
|
143.2 |
|
|
Non-current assets held for sale |
|
191.4 |
|
|
|
— |
|
|
Total assets |
$ |
5,098.2 |
|
|
$ |
4,974.1 |
|
|
Liabilities and stockholders’ equity |
|
|
|
||||
|
Accounts payable |
$ |
127.1 |
|
|
$ |
140.6 |
|
|
Current installments of long-term debt |
|
11.5 |
|
|
|
11.5 |
|
|
Accrued expenses and other current liabilities |
|
228.8 |
|
|
|
217.3 |
|
|
Current liabilities held for sale |
|
16.6 |
|
|
|
— |
|
|
Total current liabilities |
|
384.0 |
|
|
|
369.4 |
|
|
Debt |
|
1,914.7 |
|
|
|
1,921.0 |
|
|
Pension and post-retirement benefits |
|
24.4 |
|
|
|
28.1 |
|
|
Deferred income tax liabilities |
|
105.6 |
|
|
|
108.9 |
|
|
Other liabilities |
|
198.5 |
|
|
|
202.4 |
|
|
Non-current liabilities held for sale |
|
16.3 |
|
|
|
— |
|
|
Total liabilities |
|
2,643.5 |
|
|
|
2,629.8 |
|
|
Stockholders’ equity |
|
|
|
||||
|
Common stock: 400.0 shares authorized (2024: 267.1 shares issued; 2023: 266.2 shares issued) |
|
2.7 |
|
|
|
2.7 |
|
|
Additional paid-in capital |
|
4,210.4 |
|
|
|
4,196.9 |
|
|
Treasury stock (2024: 25.0 shares; 2023: 24.6 shares) |
|
(349.5 |
) |
|
|
(341.9 |
) |
|
Accumulated deficit |
|
(1,052.4 |
) |
|
|
(1,183.3 |
) |
|
Accumulated other comprehensive loss |
|
(371.9 |
) |
|
|
(345.9 |
) |
|
Total stockholders’ equity |
|
2,439.3 |
|
|
|
2,328.5 |
|
|
Non-controlling interests |
|
15.4 |
|
|
|
15.8 |
|
|
Total equity |
|
2,454.7 |
|
|
|
2,344.3 |
|
|
Total liabilities and stockholders’ equity |
$ |
5,098.2 |
|
|
$ |
4,974.1 |
|
|
ELEMENT SOLUTIONS INC CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) |
||||||||||||||||||||
|
|
Three Months Ended |
|
|
Nine Months Ended |
||||||||||||||||
|
|
September 30, |
|
June 30, |
|
March 31, |
|
|
September 30, |
||||||||||||
|
(dollars in millions) |
|
2024 |
|
|
|
2024 |
|
|
|
2024 |
|
|
|
|
2024 |
|
|
|
2023 |
|
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Net income |
$ |
40.4 |
|
|
$ |
93.3 |
|
|
$ |
56.0 |
|
|
|
$ |
189.7 |
|
|
$ |
41.0 |
|
|
Net income from discontinued operations, net of tax |
|
— |
|
|
|
1.6 |
|
|
|
— |
|
|
|
|
1.6 |
|
|
|
2.9 |
|
|
Net income from continuing operations |
|
40.4 |
|
|
|
91.7 |
|
|
|
56.0 |
|
|
|
|
188.1 |
|
|
|
38.1 |
|
|
Reconciliation of net income to net cash flows provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Depreciation and amortization |
|
39.4 |
|
|
|
40.1 |
|
|
|
40.3 |
|
|
|
|
119.8 |
|
|
|
124.7 |
|
|
Deferred income taxes |
|
9.2 |
|
|
|
(37.4 |
) |
|
|
(5.4 |
) |
|
|
|
(33.6 |
) |
|
|
(8.1 |
) |
|
Foreign exchange gains |
|
(12.4 |
) |
|
|
(4.7 |
) |
|
|
(7.8 |
) |
|
|
|
(24.9 |
) |
|
|
(10.5 |
) |
|
Incentive stock compensation |
|
3.8 |
|
|
|
3.6 |
|
|
|
4.1 |
|
|
|
|
11.5 |
|
|
|
10.6 |
|
|
Goodwill impairment |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
80.0 |
|
|
Other, net |
|
13.6 |
|
|
|
1.3 |
|
|
|
3.7 |
|
|
|
|
18.6 |
|
|
|
25.8 |
|
|
Changes in assets and liabilities, net of acquisitions: |
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Accounts receivable |
|
(12.2 |
) |
|
|
(27.4 |
) |
|
|
(4.8 |
) |
|
|
|
(44.4 |
) |
|
|
(6.6 |
) |
|
Inventories |
|
22.6 |
|
|
|
(20.1 |
) |
|
|
(23.9 |
) |
|
|
|
(21.4 |
) |
|
|
(37.2 |
) |
|
Accounts payable |
|
(15.1 |
) |
|
|
14.3 |
|
|
|
0.7 |
|
|
|
|
(0.1 |
) |
|
|
13.3 |
|
|
Accrued expenses |
|
18.9 |
|
|
|
13.5 |
|
|
|
(14.5 |
) |
|
|
|
17.9 |
|
|
|
(8.0 |
) |
|
Prepaid expenses and other current assets |
|
(0.9 |
) |
|
|
(9.3 |
) |
|
|
6.7 |
|
|
|
|
(3.5 |
) |
|
|
3.4 |
|
|
Other assets and liabilities |
|
(8.8 |
) |
|
|
1.0 |
|
|
|
3.1 |
|
|
|
|
(4.7 |
) |
|
|
(3.7 |
) |
|
Net cash flows provided by operating activities |
|
98.5 |
|
|
|
66.6 |
|
|
|
58.2 |
|
|
|
|
223.3 |
|
|
|
221.8 |
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Capital expenditures |
|
(12.6 |
) |
|
|
(14.5 |
) |
|
|
(19.0 |
) |
|
|
|
(46.1 |
) |
|
|
(36.3 |
) |
|
Proceeds from disposal of property, plant and equipment |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
1.4 |
|
|
Acquisitions, net of cash acquired |
|
— |
|
|
|
— |
|
|
|
(3.9 |
) |
|
|
|
(3.9 |
) |
|
|
(188.6 |
) |
|
Other, net |
|
— |
|
|
|
(6.4 |
) |
|
|
— |
|
|
|
|
(6.4 |
) |
|
|
(2.7 |
) |
|
Net cash flows used in investing activities |
|
(12.6 |
) |
|
|
(20.9 |
) |
|
|
(22.9 |
) |
|
|
|
(56.4 |
) |
|
|
(226.2 |
) |
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Debt proceeds |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
150.0 |
|
|
Repayments of borrowings |
|
(2.8 |
) |
|
|
(2.9 |
) |
|
|
(2.9 |
) |
|
|
|
(8.6 |
) |
|
|
(8.6 |
) |
|
Dividends |
|
(19.4 |
) |
|
|
(19.4 |
) |
|
|
(20.0 |
) |
|
|
|
(58.8 |
) |
|
|
(58.1 |
) |
|
Payment of financing fees |
|
— |
|
|
|
— |
|
|
|
(2.1 |
) |
|
|
|
(2.1 |
) |
|
|
(1.0 |
) |
|
Other, net |
|
(6.0 |
) |
|
|
0.9 |
|
|
|
(7.7 |
) |
|
|
|
(12.8 |
) |
|
|
(7.7 |
) |
|
Net cash flows (used in) provided by financing activities |
|
(28.2 |
) |
|
|
(21.4 |
) |
|
|
(32.7 |
) |
|
|
|
(82.3 |
) |
|
|
74.6 |
|
|
Net cash flows provided by operating activities of discontinued operations |
|
— |
|
|
|
1.6 |
|
|
|
— |
|
|
|
|
1.6 |
|
|
|
2.9 |
|
|
Effect of exchange rate changes on cash and cash equivalents |
|
9.0 |
|
|
|
(2.9 |
) |
|
|
(5.6 |
) |
|
|
|
0.5 |
|
|
|
(9.1 |
) |
|
Net increase (decrease) in cash and cash equivalents |
|
66.7 |
|
|
|
23.0 |
|
|
|
(3.0 |
) |
|
|
|
86.7 |
|
|
|
64.0 |
|
|
Cash and cash equivalents at beginning of period |
|
309.3 |
|
|
|
286.3 |
|
|
|
289.3 |
|
|
|
|
289.3 |
|
|
|
265.6 |
|
|
Cash and cash equivalents at end of period |
$ |
376.0 |
|
|
$ |
309.3 |
|
|
$ |
286.3 |
|
|
|
$ |
376.0 |
|
|
$ |
329.6 |
|
|
ELEMENT SOLUTIONS INC ADDITIONAL FINANCIAL INFORMATION (Unaudited) |
||||||||||||||||||||||||||||||
|
I. SEGMENT RESULTS |
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|||||||||||||||||||||||||||
|
(dollars in millions) |
2024 |
|
|
2023 |
|
|
Reported |
|
Constant Currency |
|
Organic |
|
2024 |
|
2023 |
|
Reported |
|
Constant Currency |
|
Organic |
|||||||||
|
Net Sales |
||||||||||||||||||||||||||||||
|
Electronics |
$ |
419.1 |
|
$ |
367.0 |
|
|
14 |
% |
|
15 |
% |
|
9 |
% |
|
$ |
1,160.0 |
|
$ |
1,062.4 |
|
9 |
% |
|
11 |
% |
|
7 |
% |
|
Industrial & Specialty |
|
225.9 |
|
|
232.3 |
|
|
(3 |
)% |
|
0 |
% |
|
0 |
% |
|
|
672.7 |
|
|
697.4 |
|
(4 |
)% |
|
(2 |
)% |
|
(2 |
)% |
|
Total |
$ |
645.0 |
|
$ |
599.3 |
|
|
8 |
% |
|
9 |
% |
|
6 |
% |
|
$ |
1,832.7 |
|
$ |
1,759.8 |
|
4 |
% |
|
6 |
% |
|
3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net Income (Loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Total |
$ |
40.4 |
|
$ |
(31.7 |
) |
|
(nm) |
|
|
|
|
|
$ |
189.7 |
|
$ |
41.0 |
|
362 |
% |
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Adjusted EBITDA |
||||||||||||||||||||||||||||||
|
Electronics |
$ |
98.6 |
|
$ |
90.4 |
|
|
9 |
% |
|
10 |
% |
|
|
|
$ |
274.7 |
|
$ |
239.4 |
|
15 |
% |
|
18 |
% |
|
|
||
|
Industrial & Specialty |
|
44.1 |
|
|
43.7 |
|
|
1 |
% |
|
4 |
% |
|
|
|
|
130.1 |
|
|
123.1 |
|
6 |
% |
|
9 |
% |
|
|
||
|
Total |
$ |
142.7 |
|
$ |
134.1 |
|
|
6 |
% |
|
8 |
% |
|
|
|
$ |
404.8 |
|
$ |
362.5 |
|
12 |
% |
|
15 |
% |
|
|
||
|
|
Three Months Ended September 30, |
|
Constant Currency |
|
Nine Months Ended September 30, |
|
Constant Currency |
||||||||||||||||||
|
|
2024 |
|
2023 |
|
Change |
|
2024 |
|
Change |
|
2024 |
|
2023 |
|
Change |
|
2024 |
|
Change |
||||||
|
Net Income Margin |
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Total |
6.3 |
% |
|
(5.3 |
)% |
|
(nm) |
|
|
|
|
|
10.3 |
% |
|
2.3 |
% |
|
800bps |
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Adjusted EBITDA Margin |
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Electronics |
23.5 |
% |
|
24.6 |
% |
|
(110)bps |
|
23.6 |
% |
|
(100)bps |
|
23.7 |
% |
|
22.5 |
% |
|
120bps |
|
23.9 |
% |
|
140bps |
|
Industrial & Specialty |
19.5 |
% |
|
18.9 |
% |
|
60bps |
|
19.7 |
% |
|
90bps |
|
19.3 |
% |
|
17.7 |
% |
|
160bps |
|
19.6 |
% |
|
190bps |
|
Total |
22.1 |
% |
|
22.4 |
% |
|
(30)bps |
|
22.2 |
% |
|
(20)bps |
|
22.1 |
% |
|
20.6 |
% |
|
150bps |
|
22.3 |
% |
|
170bps |
|
(nm) Calculation not meaningful. |
|||||||||||||||||||||||||
|
II. CAPITAL STRUCTURE |
||||||||
|
(dollars in millions) |
|
|
Maturity |
|
Interest Rate |
|
September 30, |
|
|
|
|
|
|
|
2024 |
|||
|
Instrument |
|
|
|
|
|
|
|
|
|
Term Loans |
(1) |
|
12/18/2030 |
|
SOFR plus 2.00% |
|
$ |
1,141.4 |
|
Total First Lien Debt |
|
|
|
|
|
|
|
1,141.4 |
|
Senior Notes due 2028 |
|
|
9/1/2028 |
|
3.875% |
|
|
800.0 |
|
Total Debt |
|
|
|
|
|
|
|
1,941.4 |
|
Cash Balance |
|
|
|
|
|
|
|
376.0 |
|
Net Debt |
|
|
|
|
|
|
$ |
1,565.4 |
|
Adjusted Shares Outstanding |
(2) |
|
|
|
|
|
|
244.6 |
|
Market Capitalization |
(3) |
|
|
|
|
|
$ |
6,643.3 |
|
Total Capitalization |
|
|
|
|
|
|
$ |
8,208.7 |
|
(1) |
Element Solutions swapped its floating term loan rate to a fixed rate for all of its outstanding term loans through the use of interest rate swaps and cross-currency swaps which mature in January 2025 or December 2028, as applicable. At September 30, 2024, 100% of the Company’s debt was fixed. |
|
|
(2) |
See “Adjusted Common Shares Outstanding at September 30, 2024 and 2023″ following the footnotes under the “Adjusted Earnings Per Share (EPS)” reconciliation table below. |
|
|
(3) |
Based on the closing price of the shares of Element Solutions of $27.16 at September 30, 2024. |
|
III. SELECTED FINANCIAL DATA |
|
|
|
|
|||||||
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||
|
(dollars in millions) |
2024 |
|
2023 |
|
2024 |
|
2023 |
||||
|
Interest expense |
$ |
17.4 |
|
$ |
15.7 |
|
$ |
50.9 |
|
$ |
43.5 |
|
Interest paid |
|
24.3 |
|
|
22.9 |
|
|
56.9 |
|
|
48.7 |
|
Income tax expense |
|
36.8 |
|
|
15.3 |
|
|
32.8 |
|
|
53.4 |
|
Income taxes paid |
|
21.3 |
|
|
17.5 |
|
|
60.8 |
|
|
49.0 |
|
Capital expenditures |
|
12.6 |
|
|
13.4 |
|
|
46.1 |
|
|
36.3 |
|
Proceeds from disposal of property, plant and equipment |
|
— |
|
|
0.9 |
|
|
— |
|
|
1.4 |
Non-GAAP Measures
To supplement its financial measures prepared in accordance with GAAP, Element Solutions presents in this release the following non-GAAP financial measures: EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted EPS, adjusted common shares outstanding, free cash flow, organic net sales growth, full year 2024 guidance for adjusted EBITDA, constant currency adjusted EBITDA growth and free cash flow. The Company also evaluates and presents its results of operations on a constant currency basis.
Management internally reviews these non-GAAP measures to evaluate performance and liquidity on a comparative period-to-period basis in terms of absolute performance, trends and expected future performance with respect to the Company’s business and believes that these non-GAAP measures provide investors with an additional perspective on trends and underlying operating results on a period-to-period comparable basis. The Company also believes that investors find this information helpful in understanding the ongoing performance of its operations as well as their ability to generate cash separate from items that may have a disproportionate positive or negative impact on its financial results in any particular period or that are considered to be associated with its capital structure. These non-GAAP financial measures, however, have limitations as analytical tools, and should not be considered in isolation from, a substitute for, or superior to, the related financial information that Element Solutions reports in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in the Company’s financial statements and may not be completely comparable to similarly titled measures of other companies due to potential differences in calculation methods. In addition, these measures are subject to inherent limitations as they reflect the exercise of judgment by management about which items are excluded or included in determining these non-GAAP financial measures. Investors are encouraged to review the definitions and reconciliations of these non-GAAP financial measures to their most comparable GAAP financial measures included in this press release, and not to rely on any single financial measure to evaluate the Company’s businesses.
The Company provides full year 2024 guidance for adjusted EBITDA and constant currency adjusted EBITDA growth only on a non-GAAP basis. Reconciliations of such forward-looking non-GAAP measures to GAAP are excluded in reliance upon the exception provided by Item 10(e)(1)(i)(B) of Regulation S-K due to the inherent difficulty in forecasting and quantifying, without unreasonable efforts, certain amounts that are necessary for such reconciliations, including adjustments that could be made for restructurings, refinancings, impairments, divestitures, integration and acquisition-related expenses, share-based compensation amounts, non-recurring, unusual or unanticipated charges, expenses or gains, adjustments to inventory and other charges reflected in its reconciliations of historic numbers, the amount of which, based on historical experience, could be significant.
Contacts
Investor Relations Contact:
Varun Gokarn
Vice President, Strategy and Integration
Element Solutions Inc
1-203-952-0369
IR@elementsolutionsinc.com
Media Contact:
Scott Bisang / Ed Hammond / Tali Epstein
Collected Strategies
1-212-379-2072
esi@collectedstrategies.com
