Else Nutrition

Albemarle Reports Net Sales Increase of 10% for Third Quarter 2023

01 November 2023

CHARLOTTE, N.C., Nov. 1, 2023 /PRNewswire/ -- Albemarle Corporation (NYSE: ALB), a global leader in providing essential elements for mobility, energy, connectivity and health, today announced its results for the third quarter ended September 30, 2023.

Third-Quarter 2023 and Recent Highlights
(Unless otherwise stated, all percentage changes represent year-over-year comparisons)

  • Net sales of $2.3 billion, an increase of 10%
  • Net income of $302.5 million, or $2.57 per diluted share
  • Adjusted diluted EPS of $2.74
  • Adjusted EBITDA of $453.3 million
  • Signed agreements with Caterpillar Inc. to collaborate on solutions to support the full circular battery value chain and sustainable mining operations
  • Received $90 million critical materials award from the U.S. Department of Defense to support restart of Kings Mountain, NC mine
  • Completed the previously disclosed transaction to amend and simplify the MARBL joint venture with Mineral Resources Limited
  • On track to achieve more than $170 million in productivity benefits in 2023
  • 2023 net sales are now expected to increase approximately 30% to 35% year-over-year and 2023 adjusted EBITDA is expected to be flat to slightly down year-over-year

"Albemarle grew net sales by 10%, driven by higher volumes in our Energy Storage business," said Albemarle CEO Kent Masters. "In the third quarter, we formed new strategic partnerships and streamlined our existing MARBL joint venture to better position Albemarle for long-term growth. Our investments across the globe continue to progress, with the Meishan project ahead of schedule for completion in early 2024. Through our operating model, Albemarle Way of Excellence, we are on track to achieve more than $170 million in productivity benefits in 2023 and expect to achieve additional benefits in 2024 as we continue to operate with a disciplined approach."

2023 Corporate Outlook
The company's full-year 2023 outlook reflects expected financial performance assuming recent lithium market pricing continues for the remainder of the year, as consistent with our standard practice. Net sales are expected to increase 30% to 35% over the prior year, primarily driven by new mining and conversion capacity delivering 30% to 35% volumetric growth in Energy Storage. Adjusted EBITDA is expected to be flat to down 5% year over year, primarily due to lower Energy Storage pricing as well as the realization of higher spodumene pricing in costs of goods sold from our JV-owned mines. Net cash from operations is expected to be in the range of $600 million to $800 million for the full year 2023. The company's capital expenditures are expected to be between $1.9 billion and $2.1 billion for 2023.

 

FY 2023 Outlook

as of August 2, 2023

 

FY 2023 Outlook

as of November 1, 2023

Net sales

$10.4 - $11.5 billion

 

$9.5 - $9.8 billion

Adjusted EBITDA(a)

$3.8 - $4.4 billion

 

$3.2 - $3.4 billion

Adjusted EBITDA Margin(a)

37% - 38%

 

34% - 35%

Adjusted Diluted EPS(a)

$25.00 - $29.50

 

$21.50 - $23.50

Net Cash from Operations

$1.2 - $1.8 billion

 

$600 - $800 million

Capital Expenditures

$1.9 - $2.1 billion

 

$1.9 - $2.1 billion

  

(a)

The company does not provide a reconciliation of forward-looking non-GAAP financial measures to the most directly comparable financial measures calculated and reported in accordance with GAAP, as the company is unable to estimate significant non-recurring or unusual items without unreasonable effort.  See "Additional Information regarding Non-GAAP Measures" for more information.

Third Quarter 2023 Results

In millions, except per share amounts

Q3 2023

 

Q3 2022

 

$ Change

 

% Change

Net sales

$    2,310.6

 

$    2,091.8

 

$       218.8

 

10.5 %

Net income attributable to Albemarle Corporation

$       302.5

 

$       897.2

 

$      (594.7)

 

(66.3) %

Adjusted EBITDA(a)

$       453.3

 

$    1,190.0

 

$      (736.7)

 

(61.9) %

Diluted earnings per share

$         2.57

 

$         7.61

 

$       (5.04)

 

(66.2) %

   Non-operating pension and OPEB items(a)

 

(0.03)

    

   Non-recurring and other unusual items(a)

0.17

 

(0.08)

    

Adjusted diluted earnings per share(a)(b)

$         2.74

 

$         7.50

 

$       (4.76)

 

(63.5) %

  

(a)

See Non-GAAP Reconciliations for further details.

(b)

Totals may not add due to rounding.

Net sales for the third quarter of 2023 were $2.3 billion compared to $2.1 billion for the prior-year quarter. The 10% increase was driven by increased volumes in Energy Storage and higher pricing in Ketjen. Net income attributable to Albemarle of $302.5 million decreased by $594.7 million and adjusted EBITDA of $453.3 million decreased by $736.7 million from the prior-year quarter primarily due to lower lithium market pricing and higher spodumene pricing in costs of goods sold being only partially offset by higher equity income due to inventory timing.

The effective income tax rate for the third quarter of 2023 was 5.4% compared to 22.7% in the same period of 2022. On an adjusted basis, the effective income tax rates were 3.1% and 23.2% for the third quarter of 2023 and 2022, respectively, with the decrease primarily due to changes in the geographic income mix. 

Business Segment Results
Beginning January 1, 2023, the company re-segmented its operating business units. The results from 2022 are recast to align with the new structure.

Energy Storage Results

In millions

Q3 2023

 

Q3 2022

 

$ Change

 

% Change

Net Sales

$        1,697.2

 

$        1,414.1

 

$           283.1

 

20.0 %

Adjusted EBITDA

$           407.5

 

$        1,084.6

 

$          (677.2)

 

(62.4) %

Energy Storage net sales for the third quarter of 2023 were $1.7 billion, an increase of $283.1 million (+20%) due to higher volumes (+40%) related to the La Negra III/IV expansion in Chile, production from our processing plant in Qinzhou, China, and higher tolling volumes to meet growing customer demand. Adjusted EBITDA of $407.5 million decreased $677.2 million as higher spodumene pricing in costs of goods sold was only partially offset by higher equity income due to inventory timing.

2023 Energy Storage Outlook
Energy Storage net sales for the full year are estimated to range between $7.0 billion and $7.2 billion, below our previous outlook primarily due to lower lithium market index pricing. Energy Storage volumes are projected to increase 30% to 35% in 2023 compared to 2022. Full year realized pricing increases are expected to range from 15% to 20% compared to the prior year, assuming recent lithium market prices continue through the remainder of 2023. Adjusted EBITDA is anticipated to be between $2.9 billion and $3.0 billion, below our previous outlook due to lower expected pricing and lower sales volumes at our Talison joint venture.

In October, Albemarle finalized simplified commercial arrangements related to its MARBL joint venture. Under the revised agreements, Albemarle will take full ownership of the Kemerton lithium processing facility and 50% ownership of the Wodgina spodumene mine in Australia and will retain full ownership of the Qinzhou and Meishan lithium processing facilities in China.

Albemarle continues to expand its global portfolio of lithium conversion capacity and world-class resource portfolio with several notable developments in the third quarter. In August, the company completed a $82 million investment in Patriot Battery Metals and continues to assess potential high-return organic and inorganic opportunities.  In Chile, the Salar Yield Improvement Project is ramping to capacity as expected. In China, the construction of Meishan is progressing on-budget and ahead of schedule with mechanical completion expected in early 2024.

Specialties Results

In millions

Q3 2023

 

Q3 2022

 

$ Change

 

% Change

Net Sales

$           352.7

 

$           441.9

 

$           (89.2)

 

(20.2) %

Adjusted EBITDA

$             46.3

 

$           133.6

 

$           (87.3)

 

(65.3) %

Specialties net sales for the third quarter of 2023 were $352.7 million, a decrease of $89.2 million (-20%) primarily due to lower volumes (-7%) and lower prices (-13%). Adjusted EBITDA of $46.3 million decreased $87.3 million. Both volumes and prices were impacted by weaker demand, particularly for consumer electronics.

2023 Specialties Outlook
Albemarle is updating its 2023 outlook for Specialties net sales to approximately $1.5 billion, with adjusted EBITDA estimated from $300 million to $320 million. Adjusted EBITDA 2023 margins are expected to be down year-over-year primarily due to continued weakness in certain end-use markets including consumer and industrial electronics and elastomers partially offset by strong demand in other end-markets, such as pharmaceuticals, agriculture and oilfield services. We continue to monitor the impact of the ongoing situation in the Middle East on our operations. To date, Specialties operations continue as usual without supply chain disruption.

Ketjen Results

In millions

Q3 2023

 

Q3 2022

 

$ Change

 

% Change

Net Sales

$           260.7

 

$           235.8

 

$             24.9

 

10.6 %

Adjusted EBITDA

$             15.2

 

$               4.6

 

$             10.5

 

227.1 %

Ketjen net sales of $260.7 million for the third quarter of 2023 were up 11% compared to the previous year due to higher prices (+8%), primarily from fluid catalytic cracking and clean fuel technologies. Adjusted EBITDA of $15.2 million increased $10.5 million largely due to higher prices and lower energy costs.

2023 Ketjen Outlook 
Albemarle expects Ketjen net sales of approximately $1.1 billion and an adjusted EBITDA range of $100 million to $120 million for 2023. The reduced adjusted EBITDA outlook primarily reflects impacts from timing of shipments and customer mix.

Cash Flow and Capital Deployment
Cash from operations of $1.4 billion for the nine-months ended September 30, 2023 increased $467.9 million versus the prior year period. This was driven by increased adjusted EBITDA and dividends received from equity investments, partially offset by working capital changes that were primarily due to the increase in receivables and inventories from higher lithium prices. Capital expenditures of $1.5 billion increased by $649.3 million versus the prior-year period as the company invested in Energy Storage and Specialties capacity to support growth.

Albemarle's primary capital allocation priorities are to invest in organic and inorganic opportunities to drive profitable growth, maintain its financial flexibility and investment grade credit rating, and fund its dividends.

Balance Sheet and Liquidity

As of September 30, 2023, Albemarle had estimated liquidity of approximately $3.1 billion, including $1.6 billion of cash and equivalents, $1.3 billion available under its revolver and $186.1 million available under other credit lines. Total debt was $3.7 billion, representing our debt covenant net debt to adjusted EBITDA of approximately 0.4 times.

Earnings Call

Date:

Thursday, November 2, 2023

Time:

9:00 AM Eastern time

Dial-in (U.S.):

1.888.330.2007

Dial-in (International):

1.646.960.0105

Passcode:

5205664

The company's earnings presentation and supporting material are available on Albemarle's website at https://investors.albemarle.com

About Albemarle
Albemarle Corporation (NYSE: ALB) leads the world in transforming essential resources into critical ingredients for mobility, energy, connectivity, and health. We partner to pioneer new ways to move, power, connect and protect with people and planet in mind. A reliable and high-quality global supply of lithium and bromine allow us to deliver advanced solutions for our customers. Learn more about how the people of Albemarle are enabling a more resilient world at albemarle.com and on Twitter @AlbemarleCorp.

Albemarle regularly posts information to www.albemarle.com, including notification of events, news, financial performance, investor presentations and webcasts, non-GAAP reconciliations, Securities and Exchange Commission ("SEC") filings and other information regarding the company, its businesses and the markets it serves.

Forward-Looking Statements
This press release contains statements concerning our expectations, anticipations and beliefs regarding the future, which constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, which are based on assumptions that we have made as of the date hereof and are subject to known and unknown risks and uncertainties, often contain words such as "anticipate," "believe," "estimate," "expect," "guidance," "intend," "may," "outlook," "should," "would," and "will". Forward-looking statements may include statements regarding expected: financial and operating results, production capacity, volumes, and prices, demand for Albemarle's products, capital projects, acquisition and divestiture transactions, market and economic trends, and all other information relating to matters that are not historical facts. Factors that could cause Albemarle's actual results to differ materially from the outlook expressed or implied in any forward-looking statement include: changes in economic and business conditions; financial and operating performance of customers; timing and magnitude of customer orders; fluctuations in lithium market prices; production volume shortfalls; increased competition; changes in product demand; availability and cost of raw materials and energy; technological change and development; fluctuations in foreign currencies; changes in laws and government regulation; regulatory actions, proceedings, claims or litigation; cyber-security breaches, terrorist attacks, industrial accidents or natural disasters; political unrest and war, including the situation in the Middle East and military conflicts in Ukraine; changes in inflation or interest rates; volatility in the debt and equity markets; acquisition and divestiture transactions; timing and success of projects; performance of Albemarle's partners in joint ventures and other projects; changes in credit ratings; and the other factors detailed from time to time in the reports Albemarle files with the SEC, including those described under "Risk Factors" in Albemarle's most recent Annual Report on Form 10-K and any subsequently filed Quarterly Reports on Form 10-Q, which are filed with the SEC and available on the investor section of Albemarle's website (investors.albemarle.com) and on the SEC's website at www.sec.gov. These forward-looking statements speak only as of the date of this press release. Albemarle assumes no obligation to provide any revisions to any forward-looking statements should circumstances change, except as otherwise required by securities and other applicable laws.

Albemarle Corporation and Subsidiaries

Consolidated Statements of Income

(In Thousands Except Per Share Amounts) (Unaudited)

 
 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

September 30,

 

2023

 

2022

 

2023

 

2022

Net sales

$ 2,310,596

 

$ 2,091,805

 

$ 7,261,038

 

$ 4,699,126

Cost of goods sold

2,255,662

 

1,047,991

 

5,371,077

 

2,625,858

Gross profit

54,934

 

1,043,814

 

1,889,961

 

2,073,268

Selling, general and administrative expenses

173,866

 

134,479

 

725,242

 

375,989

Research and development expenses

21,082

 

18,358

 

62,972

 

51,827

Loss on sale of interest in properties

 

 

 

8,400

Operating (loss) profit

(140,014)

 

890,977

 

1,101,747

 

1,637,052

Interest and financing expenses

(29,332)

 

(29,691)

 

(81,686)

 

(98,934)

Other income, net

11,182

 

7,974

 

147,628

 

32,237

(Loss) income before income taxes and equity in net
income of unconsolidated investments

(158,164)

 

869,260

 

1,167,689

 

1,570,355

Income tax expense

(8,551)

 

196,938

 

311,399

 

366,486

(Loss) income before equity in net income of
unconsolidated investments

(149,613)

 

672,322

 

856,290

 

1,203,869

Equity in net income of unconsolidated investments (net
of tax)

470,306

 

258,884

 

1,417,545

 

449,476

Net income

320,693

 

931,206

 

2,273,835

 

1,653,345

Net income attributable to noncontrolling interests

(18,160)

 

(33,991)

 

(82,679)

 

(95,974)

Net income attributable to Albemarle Corporation

$   302,533

 

$   897,215

 

$ 2,191,156

 

$ 1,557,371

Basic earnings per share

$         2.58

 

$         7.66

 

$       18.68

 

$       13.30

Diluted earnings per share

$         2.57

 

$         7.61

 

$       18.60

 

$       13.23

        

Weighted-average common shares outstanding – basic

117,349

 

117,136

 

117,304

 

117,106

Weighted-average common shares outstanding – diluted

117,783

 

117,869

 

117,797

 

117,749

Albemarle Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

(In Thousands) (Unaudited)

 
 

September 30,

 

December 31,

 

2023

 

2022

ASSETS

   

Current assets:

   

Cash and cash equivalents

$        1,601,668

 

$        1,499,142

Trade accounts receivable

1,179,012

 

1,190,970

Other accounts receivable

528,744

 

185,819

Inventories

3,404,212

 

2,076,031

Other current assets

411,926

 

234,955

Total current assets

7,125,562

 

5,186,917

Property, plant and equipment

10,929,150

 

9,354,330

Less accumulated depreciation and amortization

2,620,535

 

2,391,333

Net property, plant and equipment

8,308,615

 

6,962,997

Investments

1,254,041

 

1,150,553

Other assets

328,518

 

250,558

Goodwill

1,606,077

 

1,617,627

Other intangibles, net of amortization

260,541

 

287,870

Total assets

$      18,883,354

 

$      15,456,522

LIABILITIES AND EQUITY

   

Current liabilities:

   

Accounts payable to third parties

$        1,812,168

 

$        1,533,624

Accounts payable to related parties

795,088

 

518,377

Accrued expenses

689,106

 

505,894

Current portion of long-term debt

162,351

 

2,128

Dividends payable

46,661

 

46,116

Income taxes payable

436,238

 

134,876

Total current liabilities

3,941,612

 

2,741,015

Long-term debt

3,495,971

 

3,214,972

Postretirement benefits

32,797

 

32,751

Pension benefits

153,955

 

159,571

Other noncurrent liabilities

807,051

 

636,596

Deferred income taxes

289,529

 

480,770

Commitments and contingencies

   

Equity:

   

Albemarle Corporation shareholders' equity:

   

Common stock

1,174

 

1,172

Additional paid-in capital

2,945,975

 

2,940,840

Accumulated other comprehensive loss

(700,972)

 

(560,662)

Retained earnings

7,651,638

 

5,601,277

Total Albemarle Corporation shareholders' equity

9,897,815

 

7,982,627

Noncontrolling interests

264,624

 

208,220

Total equity

10,162,439

 

8,190,847

Total liabilities and equity

$      18,883,354

 

$      15,456,522

Albemarle Corporation and Subsidiaries

Selected Consolidated Cash Flow Data

(In Thousands) (Unaudited)

 
 

Nine Months Ended

September 30,

 

2023

 

2022

Cash and cash equivalents at beginning of year

$   1,499,142

 

$      439,272

Cash flows from operating activities:

   

Net income

2,273,835

 

1,653,345

Adjustments to reconcile net income to cash flows from operating activities:

   

Depreciation and amortization

285,801

 

215,280

Loss on sale of interest in properties

 

8,400

Stock-based compensation and other

29,465

 

24,649

Equity in net income of unconsolidated investments (net of tax)

(1,417,545)

 

(449,476)

Dividends received from unconsolidated investments and nonmarketable securities

1,939,225

 

350,895

Pension and postretirement benefit

5,925

 

(12,299)

Pension and postretirement contributions

(12,243)

 

(10,929)

Unrealized (gain) loss on investments in marketable securities

(36,740)

 

3,864

Loss on early extinguishment of debt

 

19,219

Deferred income taxes

(182,764)

 

77,968

Working capital changes

(1,332,042)

 

(1,004,236)

Non-cash transfer of 40% value of construction in progress of Kemerton plant
to MRL

17,132

 

115,969

Other, net

(146,509)

 

(37,047)

Net cash provided by operating activities

1,423,540

 

955,602

Cash flows from investing activities:

   

Acquisitions, net of cash acquired

(43,207)

 

Capital expenditures

(1,465,193)

 

(815,934)

(Purchases) sales of marketable securities, net

(205,952)

 

3,132

Investments in equity investments and nonmarketable securities

(1,279)

 

(507)

Net cash used in investing activities

(1,715,631)

 

(813,309)

Cash flows from financing activities:

   

Repayments of long-term debt and credit agreements

 

(455,000)

Proceeds from borrowings of long-term debt and credit agreements

300,000

 

1,964,216

Other debt repayments, net

172,791

 

(391,067)

Fees related to early extinguishment of debt

 

(9,767)

Dividends paid to shareholders

(140,251)

 

(138,165)

Dividends paid to noncontrolling interests

(79,393)

 

(44,208)

Proceeds from exercise of stock options

117

 

1,590

Withholding taxes paid on stock-based compensation award distributions

(26,166)

 

(12,150)

Other

(191)

 

(4,198)

Net cash provided by financing activities

226,907

 

911,251

Net effect of foreign exchange on cash and cash equivalents

167,710

 

(110,013)

Increase in cash and cash equivalents

102,526

 

943,531

Cash and cash equivalents at end of period

$   1,601,668

 

$   1,382,803

Albemarle Corporation and Subsidiaries

Consolidated Summary of Segment Results

(In Thousands) (Unaudited) 

 
 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

September 30,

 

2023

 

2022

 

2023

 

2022

Net sales:

       

Energy Storage

$ 1,697,163

 

$ 1,414,053

 

$ 5,403,910

 

$ 2,680,150

Specialties

352,722

 

441,928

 

1,142,802

 

1,354,950

Ketjen

260,711

 

235,824

 

714,326

 

664,026

Total net sales

$ 2,310,596

 

$ 2,091,805

 

$ 7,261,038

 

$ 4,699,126

        

Adjusted EBITDA:

       

Energy Storage

$   407,476

 

$ 1,084,643

 

$ 2,745,680

 

$ 1,853,407

Specialties

46,307

 

133,558

 

268,665

 

433,534

Ketjen

15,159

 

4,635

 

72,584

 

31,337

Total segment adjusted EBITDA

468,942

 

1,222,836

 

3,086,929

 

2,318,278

Corporate

(15,655)

 

(32,870)

 

(5,657)

 

(86,173)

Total adjusted EBITDA

$   453,287

 

$ 1,189,966

 

$ 3,081,272

 

$ 2,232,105

See accompanying non-GAAP reconciliations below.

Additional Information regarding Non-GAAP Measures

It should be noted that adjusted net income attributable to Albemarle Corporation, adjusted diluted earnings per share, non-operating pension and other post-employment benefit ("OPEB") items per diluted share, non-recurring and other unusual items per diluted share, adjusted effective income tax rates, EBITDA, adjusted EBITDA (on a consolidated basis), EBITDA margin and adjusted EBITDA margin are financial measures that are not required by, or presented in accordance with, accounting principles generally accepted in the United States, or GAAP. These non-GAAP measures should not be considered as alternatives to Net income attributable to Albemarle Corporation ("earnings") or other comparable measures calculated and reported in accordance with GAAP. These measures are presented here to provide additional useful measurements to review the company's operations, provide transparency to investors and enable period-to-period comparability of financial performance. The company's chief operating decision maker uses these measures to assess the ongoing performance of the company and its segments, as well as for business and enterprise planning purposes.

A description of other non-GAAP financial measures that Albemarle uses to evaluate its operations and financial performance, and reconciliation of these non-GAAP financial measures to the most directly comparable financial measures calculated and reported in accordance with GAAP can be found on the following pages of this press release, which is also is available on Albemarle's website at https://investors.albemarle.com. The company does not provide a reconciliation of forward-looking non-GAAP financial measures to the most directly comparable financial measures calculated and reported in accordance with GAAP, as the company is unable to estimate significant non-recurring or unusual items without unreasonable effort. The amounts and timing of these items are uncertain and could be material to the company's results calculated in accordance with GAAP.

ALBEMARLE CORPORATION AND SUBSIDIARIES

Non-GAAP Reconciliations

(Unaudited)

See below for a reconciliation of adjusted net income attributable to Albemarle Corporation, EBITDA and adjusted EBITDA (on a consolidated basis), which are non-GAAP financial measures, to Net income attributable to Albemarle Corporation ("earnings"), the most directly comparable financial measure calculated and reported in accordance with GAAP. Reconciliation of adjusted EBITDA on a segment basis is also provided. Adjusted net income attributable to Albemarle Corporation is defined as net income before the non-recurring, other unusual and non-operating pension and other post-employment benefit (OPEB) items as listed below. The non-recurring and unusual items may include acquisition and integration related costs, gains or losses on sales of businesses, restructuring charges, facility divestiture charges, certain litigation and arbitration costs and charges, and other significant non-recurring items. EBITDA is defined as net income attributable to Albemarle Corporation before interest and financing expenses, income tax expense, and depreciation and amortization. Adjusted EBITDA is defined as EBITDA plus or minus the non-recurring, other unusual and non-operating pension and OPEB items as listed below.

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

September 30,

 

2023

 

2022

 

2023

 

2022

In thousands, except percentages and per
share amounts

$

 

% of
net
sales

 

$

 

% of
net
sales

 

$

 

% of
net
sales

 

$

 

% of
net
sales

Net income attributable to Albemarle
Corporation

$ 302,533

   

$ 897,215

   

$  2,191,156

   

$  1,557,371

  

Add back:

               

Non-operating pension and OPEB items
(net of tax)

386

   

(3,936)

   

1,141

   

(12,021)

  

Non-recurring and other unusual items
(net of tax)

19,674

   

(9,789)

   

210,094

   

24,023

  

Adjusted net income attributable to
Albemarle Corporation

$ 322,593

   

$ 883,490

   

$  2,402,391

   

$  1,569,373

  
                

Adjusted diluted earnings per share

$      2.74

   

$      7.50

   

$    20.39

   

$    13.33

  
                

Weighted-average common shares
outstanding – diluted

117,783

   

117,869

   

117,797

   

117,749

  
                

Net income attributable to Albemarle
Corporation

$ 302,533

 

13.1 %

 

$ 897,215

 

42.9 %

 

$  2,191,156

 

30.2 %

 

$  1,557,371

 

33.1 %

Add back:

               

Interest and financing expenses

29,332

 

1.3 %

 

29,691

 

1.4 %

 

81,686

 

1.1 %

 

98,934

 

2.1 %

Income tax expense

(8,551)

 

(0.4) %

 

196,938

 

9.4 %

 

311,399

 

4.3 %

 

366,486

 

7.8 %

Depreciation and amortization

105,445

 

4.6 %

 

77,713

 

3.7 %

 

285,801

 

3.9 %

 

215,280

 

4.6 %

EBITDA

428,759

 

18.6 %

 

1,201,557

 

57.4 %

 

2,870,042

 

39.5 %

 

2,238,071

 

47.6 %

Non-operating pension and OPEB items

620

 

— %

 

(5,027)

 

(0.2) %

 

1,833

 

— %

 

(15,345)

 

(0.3) %

Non-recurring and other unusual items

23,908

 

1.0 %

 

(6,564)

 

(0.3) %

 

209,397

 

2.9 %

 

9,379

 

0.2 %

Adjusted EBITDA

$ 453,287

 

19.6 %

 

$  1,189,966

 

56.9 %

 

$  3,081,272

 

42.4 %

 

$  2,232,105

 

47.5 %

                

Net sales

$  2,310,596

   

$  2,091,805

   

$  7,261,038

   

$  4,699,126

  

Non-operating pension and OPEB items, consisting of mark-to-market actuarial gains/losses, settlements/curtailments, interest cost and expected return on assets, are not allocated to Albemarle's operating segments and are included in the Corporate category. In addition, the company believes that these components of pension cost are mainly driven by market performance, and the company manages these separately from the operational performance of the company's businesses. In accordance with GAAP, these non-operating pension and OPEB items are included in Other income (expenses), net. Non-operating pension and OPEB items were as follows (in thousands):

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

September 30,

 

2023

 

2022

 

2023

 

2022

Interest cost

$       9,054

 

$       5,857

 

$     27,091

 

$     17,683

Expected return on assets

(8,434)

 

(10,884)

 

(25,258)

 

(33,028)

Total

$          620

 

$     (5,027)

 

$       1,833

 

$    (15,345)

In addition to the non-operating pension and OPEB items disclosed above, the company has identified certain other items and excluded them from Albemarle's adjusted net income calculation for the periods presented. A listing of these items, as well as a detailed description of each follows below (per diluted share):

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

September 30,

 

2023

 

2022

 

2023

 

2022

Acquisition and integration related costs(1)

$         0.07

 

$         0.01

 

$         0.14

 

$         0.06

Loss on sale of interest in properties(2)

 

 

 

0.07

Loss on early extinguishment of debt(3)

 

 

 

0.13

Mark-to-market loss (gain) on public equity securities(4)

0.17

 

(0.07)

 

(0.21)

 

(0.07)

Legal accrual(5)

 

 

1.82

 

Other(6)

(0.08)

 

0.01

 

0.03

 

Tax related items(7)

0.01

 

(0.03)

 

 

0.01

Total non-recurring and other unusual items

$         0.17

 

$       (0.08)

 

$         1.78

 

$         0.20

  

(1)

Costs related to the acquisition, integration and divestitures for various significant projects, recorded in Selling, general and administrative expenses for the three and nine months ended September 30, 2023 were $10.0 million and $21.7 million ($7.8 million and $16.8 million after income taxes, or $0.07 and $0.14 per share), respectively, and for the three and nine months ended September 30, 2022 were $2.1 million and $9.2 million ($1.7 million and $7.2 million after income taxes, or $0.01 and $0.06 per share), respectively.

  

(2)

Included in Loss on sale of interest in properties for the nine months ended September 30, 2022 is an expense of $8.4 million ($0.07 per share after no income tax impact) related to a post-measurement period Wodgina acquisition purchase price adjustment for a revised estimate of the obligation to construct the lithium hydroxide conversion assets in Kemerton due to cost overruns from supply chain, labor and COVID-19 pandemic related issues.

  

(3)

Included in Interest and financing expenses for the nine months ended September 30, 2022 is a loss on early extinguishment of debt of $19.2 million ($14.9 million after income taxes, or $0.13 per share), representing the tender premiums, fees, unamortized discounts, unamortized deferred financing costs and accelerated amortization of associated interest rate swap from the redemption of the $425 million  senior notes originally due in 2024 using the proceeds from the issuance of $1.7 billion in senior notes in May 2022.

  

(4)

Loss (gain) of $26.4 million and ($34.4) million ($20.5 million and ($25.2) million after income taxes, or $0.17 and ($0.21) per share) recorded in Other income, net for the three and nine months ended September 30, 2023, respectively, resulting from the net change in fair value of investments in public equity securities. The three and nine months ended September 30, 2022 included a gain of $10.6 million ($8.4 million, or $0.07 per share) for these changes in fair value of investments in public equity securities.

  

(5)

Accrual of $218.5 million ($214.9 million after income taxes, or $1.82 per share) recorded in Selling, general and administrative expenses resulting from agreements in principle to resolve a previously disclosed legal matter with the U.S. Department of Justice and the SEC related to conduct in our Ketjen business prior to 2018.

  

(6)

Other adjustments for the three months ended September 30, 2023 included amounts recorded in:

 

  • Selling, general and administrative expenses - $1.8 million of separation and other severance costs to employees in Corporate and the Ketjen business which are primarily expected to be paid out during 2023, $0.7 million of facility closure expenses related to offices in Germany and $0.3 million of a loss from the sale of legacy properties not part of Albemarle's operations.
  • Other income, net - $8.2 million gain in the fair value of preferred equity from a Grace subsidiary and a $7.2 million gain resulting from insurance proceeds of a prior legal matter.
 

After income taxes, these net gains totaled $9.9 million, or $0.08 per share.

  
 

Other adjustments for the nine months ended September 30, 2023 included amounts recorded in:

 

  • Selling, general and administrative expenses - $9.2 million of separation and other severance costs to employees in Corporate and the Ketjen business which are primarily expected to be paid out during 2023, $2.1 million of facility closure expenses related to offices in Germany, $1.9 million of charges primarily for environmental reserves at sites not part of our operations and $1.0 million primarily related to shortfall contributions for a multiemployer plan financial improvement plan.
  • Other income, net - $10.9 million gain in the fair value of preferred equity of a Grace subsidiary and a $7.2 million gain resulting from insurance proceeds of a prior legal matter, partially offset by $3.9 million of a loss resulting from the adjustment of indemnification related to previously disposed businesses and $3.6 million of charges for asset retirement obligations at a site not part of our operations.
 

After income taxes, these net charges totaled $3.3 million, or $0.03 per share.

  
 

Other adjustments for the three months ended September 30, 2022 included amounts recorded in:

 

  • Cost of goods sold - $2.7 million of expense related to one-time retention payments for certain employees during the Ketjen strategic review and business unit realignment.
  • Selling, general and administrative expenses - $1.9 million of expense primarily related to one-time retention payments for certain employees during the Catalysts strategic review and business unit realignment and $1.4 million primarily related to facility closure expenses of offices in Germany.
  • Other income, net - $3.0 million gain from the reversal of a liability related to a previous divestiture and a $1.1 million gain resulting from the adjustment of indemnification related to previously disposed businesses.
 
 

After income taxes, these net charges totaled $1.0 million, or $0.01 per share.

  
 

Other adjustments for the nine months ended September 30, 2022 included amounts recorded in:

 

  • Cost of goods sold - $2.7 million of expense related to one-time retention payments for certain employees during the Ketjen strategic review and business unit realignment and $0.5 million of expense related to the settlement of a legal matter resulting from a prior acquisition.
  • Selling, general and administrative expenses - $3.4 million primarily related to facility closure expenses related to offices in Germany, $2.8 million of charges for environmental reserves at sites not part of our operations and $1.9 million of expense related to one-time retention payments for certain employees during the Catalysts strategic review and business unit realignment, partially offset by $4.3 million of gains from the sale of legacy properties not part of our operations.
  • Other income, net - $3.0 million gain from the reversal of a liability related to a previous divestiture, a $1.1 million gain resulting from the adjustment of indemnification related to previously disposed businesses and a $0.6 million gain related to a settlement received from a legal matter in a prior period.
 
 
 

After income taxes, these net charges totaled $1.3 million, or less than $0.01 per share.

  

(7)

Included in Income tax expense for the three and nine months ended September 30, 2023 are discrete net tax expense of $1.3 million, or $0.01 per share and net tax benefits of $0.3 million, or less than $0.01 per share, respectively. The net expense primarily related to foreign return to provisions offset by excess tax benefits realized from stock-based compensation arrangements.

  
 

Included in Income tax expense for the three and nine months ended September 30, 2022 are discrete net tax benefits of $4.1 million, or $0.03 per share and net tax expense of $0.7 million, or $0.01 per share, respectively. The net benefit for the three months was primarily related to a tax benefit for global intangible low-taxed income and net discrete tax benefits related to excess tax benefits realized from stock-based compensation arrangements and foreign return to provisions. The discrete net expense for the nine months was primarily related to withholding taxes and foreign return to provisions, partially offset by a benefit for excess tax benefits realized from stock-based compensation arrangements.

See below for a reconciliation of the adjusted effective income tax rate, the non-GAAP financial measure, to the effective income tax rate, the most directly comparable financial measure calculated and reported in accordance with GAAP (in thousands, except percentages).

 

Income before
income taxes and
equity in net income
of unconsolidated
investments

 

Income tax expense

 

Effective income tax rate

Three months ended September 30, 2023

     

As reported

$                   (158,164)

 

$                       (8,551)

 

5.4 %

Non-recurring, other unusual and non-operating pension and OPEB
items

24,528

 

4,468

  

As adjusted

$                   (133,636)

 

$                       (4,083)

 

3.1 %

      

Three months ended September 30, 2022

     

As reported

$                    869,260

 

$                    196,938

 

22.7 %

Non-recurring, other unusual and non-operating pension and OPEB
items

(11,592)

 

2,133

  

As adjusted

$                    857,668

 

$                    199,071

 

23.2 %

      

Nine months ended September 30, 2023

     

As reported

$                 1,167,689

 

$                    311,399

 

26.7 %

Non-recurring, other unusual and non-operating pension and OPEB
items

211,230

 

(5)

  

As adjusted

$                 1,378,919

 

$                    311,394

 

22.6 %

      

Nine months ended September 30, 2022

     

As reported

$                 1,570,355

 

$                    366,486

 

23.3 %

Non-recurring, other unusual and non-operating pension and OPEB
items

13,252

 

1,250

  

As adjusted

$                 1,583,607

 

$                    367,736

 

23.2 %

Sign Up To Get Daily Green Stock News In Your Inbox

Please review our Disclaimer and Privacy Policy before subscribing.

STOCK QUOTE

FEATURED GREEN STOCK

LithiumBank Resources

LithiumBank Resources is creating an opportunity to participate in the future of clean-tech energy. The company's strategy is to acquire claims in known lithium high grade hot spots with existing wells and infrastructure...

CLICK TO LEARN MORE

FEATURED GREEN STOCK

Else Nutrition

Else Nutrition is changing the face of early childhood nutrition with clean, sustainable, plant-based products. The company has developed the world’s first whole plant-based infant formula that is targeting the $100+ billion global...

CLICK TO LEARN MORE

COPYRIGHT ©2022 GREEN STOCK NEWS