Element Solutions Inc Announces 2023 Second Quarter Financial Results

  • Net sales of $586 million, a decrease of 13% from the second quarter last year on a reported basis or a decrease of 6% on an organic basis
  • GAAP diluted EPS of $0.11, compared to $0.25 in the same period last year
  • Reported net income of $27 million, as compared to $64 million in the same period last year
  • Adjusted EPS of $0.31
  • Adjusted EBITDA of $116 million
  • Second quarter 2023 cash from operating activities of $81 million and free cash flow of $67 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 six months ended June 30, 2023.


Executive Commentary

President and Chief Executive Officer Benjamin Gliklich said, “Element Solutions reported sequential adjusted EBITDA growth in what we believe is the trough of the most severe dislocation in the electronics market in recent history. Our results demonstrate outperformance relative to a market that saw double digit declines in key electronics drivers, such as smartphone units and semiconductor production. We seized the opportunity created by this backdrop to improve our capabilities in leading-edge technologies at the bottom of the cycle. Bringing our ViaForm® product line fully in-house and adding Kuprion’s ActiveCopper™ applications to our portfolio immediately improved our offering at the leading edge. Customers’ feedback has been extremely positive, and we have active commercial engagements associated with both offerings. These investments strengthen our ability to deliver technologies to the most demanding and innovative customers in the market, positioning our business to benefit disproportionately from the fastest growing and highest value segments in the electronics supply chain.”

Mr. Gliklich concluded, “We believe the second quarter was the trough and see evidence of acceleration in electronics already in July. Our semiconductor customers are increasing utilization and smartphone channel inventories are being digested based on third party sell-through and sell-in data. However, the baseline from which we are growing is lower than expected, compounded by additional currency headwinds from the Chinese renminbi, and therefore our expectations for 2023 full year earnings have moderated. We are reducing our full year 2023 adjusted EBITDA guidance to a range of $490 million to $500 million, which assumes recovering demand and the impact of certain cost actions underway. The expected exit velocity of our business together with the full year impact of our cost activity position us well for strong earnings growth in 2024. Our investments this quarter support significant longer-term outperformance.”

Second Quarter 2023 Highlights (compared with second quarter 2022)

  • Net sales on a reported basis for the second quarter of 2023 were $586 million, a decrease of 13% over the second quarter of 2022. Organic net sales decreased 6%.

    • Electronics: Net sales decreased 19% to $356 million. Organic net sales decreased 9%.
    • Industrial & Specialty: Net sales decreased 2% to $230 million. Organic net sales decreased 2%.
  • Second quarter of 2023 earnings per share (EPS) performance:

    • GAAP diluted EPS was $0.11 for the second quarter of 2023 as compared to $0.25 for the second quarter of 2022.
    • Adjusted EPS was $0.31, as compared to $0.38 for the same period last year.
  • Reported net income was $27 million for the second quarter of 2023 as compared to $64 million for the second quarter of 2022.
  • Adjusted EBITDA for the second quarter of 2023 was $116 million, a decrease of 17%. On a constant currency basis, adjusted EBITDA decreased 14%.

    • Electronics: Adjusted EBITDA was $76 million, a decrease of 25%. On a constant currency basis, adjusted EBITDA decreased 22%.
    • Industrial & Specialty: Adjusted EBITDA was $40 million, an increase of 2%. On a constant currency basis, adjusted EBITDA increased 5%.
    • Adjusted EBITDA margin decreased 90 basis points to 19.8% on a reported basis. On a constant currency basis, adjusted EBITDA margin decreased 60 basis points.

Updated 2023 Guidance

The Company expects third quarter 2023 adjusted EBITDA of approximately $125 million. For the full-year 2023, the Company now expects adjusted EBITDA to be in the range of $490 million to $500 million. For 2023, the Company expects adjusted EPS of approximately $1.30 and free cash flow of approximately $265 million.

Recent Developments

ViaForm Distribution Rights – On June 1, 2023, the Company terminated its long-standing distribution agreement related to its ViaForm® electrochemical deposition products for $200 million, including $170 million paid at closing and a deferred payment of $30.0 million which remains contingent upon satisfaction of certain conditions during the applicable transition period. Following the transition period, the Company expects to manage all aspects of the ViaForm® product line in-house, which it believes will result in a more efficient supply chain and improved customer outcomes for leading semiconductor fabricators. Based on the run rate of adjusted EBITDA from the ViaForm® product line as of the closing date and at current demand levels, the Company expects the ViaForm® business to contribute a baseline of approximately $15 million to annual adjusted EBITDA, with significant growth potential from expected synergies and market opportunities.

The transaction was funded with $150 million of term loans A under the Company’s senior credit facility and cash on hand. The Company also entered into interest rate swaps and cross-currency swaps to effectively convert the term loans A from U.S. dollar denominated debt obligations into fixed-rate euro-denominated debt through January 2026.

Kuprion Acquisition – On May 19, 2023, the Company completed the acquisition of Kuprion, Inc. for approximately $15.9 million, net of cash with potential additional payments in various installments to be made upon the achievement of certain milestones associated with product qualification and revenue through December 31, 2030. Kuprion is a developer of next-generation nano-copper technology to the semiconductor, circuit board and electronics assembly markets.

Conference Call

Element Solutions will host a webcast/dial-in conference call to discuss its 2023 second quarter financial results at 8:30 a.m. (Eastern Time) on Thursday, July 27, 2023. Participants on the call will include President and Chief Executive Officer Benjamin Gliklich, Chief Financial Officer Carey J. Dorman and Executive Chairman Sir Martin E. Franklin.

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 and expectations regarding the expected benefits of the ViaForm® and Kuprion investments, including improved capabilities and offerings in leading edge technologies and market position to benefit disproportionately from market trends; commercial engagements and deferred payments related to these investments; expected contribution of the ViaForm® transaction to the Company’s adjusted EBITDA and revenue and significant growth potential; evidence of acceleration in electronics in July 2023; increased utilization from semiconductor customers; smartphone channel inventories trends; recovering demand and impact of certain cost activity in 2023; strong earnings growth in 2024; longer-term outperformance; third quarter 2023 adjusted EBITDA guidance; and full-year 2023 guidance for adjusted EBITDA, adjusted EPS and free cash flow. 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 these 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 continuing economic impact of the coronavirus (COVID-19) and its variants on the global economy, the Company’s business, financial results, customers, suppliers, vendors and/or stock price, including the impact of related governmental responses, the efficacy of vaccines and treatments targeting COVID-19 and/or its variants; the general impact of the ongoing conflict between Russia and Ukraine on economic activity, including financial market instability and disruption of global supply chains, and on the Company’s customers, employees, suppliers, vendors and other stakeholders; inflation and fluctuations in foreign exchange rates; business and management strategies; outstanding debt and debt leverage ratio; shares repurchases; debt and/or equity issuance or retirement; 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 or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Certain information contained in this release is based on historical results and forecasts provided in connection with the ViaForm® and Kuprion transactions. Use of different methods for preparing, calculating or presenting such information may lead to different results and such differences may be material. While the Company believes this information is reliable and appropriate, investors are cautioned not to place undue reliance on this information.

ELEMENT SOLUTIONS INC

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

(dollars in millions, except per share amounts)

2023

 

2022

 

2023

 

2022

Net sales

$

586.1

 

 

$

676.9

 

 

$

1,160.5

 

 

$

1,357.1

 

Cost of sales

 

357.6

 

 

 

427.1

 

 

 

704.2

 

 

 

844.3

 

Gross profit

 

228.5

 

 

 

249.8

 

 

 

456.3

 

 

 

512.8

 

Operating expenses:

 

 

 

 

 

 

 

Selling, technical, general and administrative

 

147.0

 

 

 

146.5

 

 

 

295.9

 

 

 

299.9

 

Research and development

 

28.9

 

 

 

12.8

 

 

 

41.4

 

 

 

26.9

 

Total operating expenses

 

175.9

 

 

 

159.3

 

 

 

337.3

 

 

 

326.8

 

Operating profit

 

52.6

 

 

 

90.5

 

 

 

119.0

 

 

 

186.0

 

Other (expense) income:

 

 

 

 

 

 

 

Interest expense, net

 

(12.0

)

 

 

(13.2

)

 

 

(23.7

)

 

 

(27.3

)

Foreign exchange gain

 

9.0

 

 

 

2.7

 

 

 

13.9

 

 

 

2.0

 

Other (expense) income, net

 

(1.6

)

 

 

7.5

 

 

 

(1.3

)

 

 

3.2

 

Total other expense

 

(4.6

)

 

 

(3.0

)

 

 

(11.1

)

 

 

(22.1

)

Income before income taxes and non-controlling interests

 

48.0

 

 

 

87.5

 

 

 

107.9

 

 

 

163.9

 

Income tax expense

 

(21.2

)

 

 

(23.9

)

 

 

(38.1

)

 

 

(43.9

)

Net income from continuing operations

 

26.8

 

 

 

63.6

 

 

 

69.8

 

 

 

120.0

 

Income from discontinued operations, net of tax

 

2.9

 

 

 

1.8

 

 

 

2.9

 

 

 

1.8

 

Net income

 

29.7

 

 

 

65.4

 

 

 

72.7

 

 

 

121.8

 

Net loss (income) attributable to non-controlling interests

 

0.2

 

 

 

(0.2

)

 

 

0.1

 

 

 

(0.5

)

Net income attributable to common stockholders

$

29.9

 

 

$

65.2

 

 

$

72.8

 

 

$

121.3

 

 

 

 

 

 

 

 

 

Earnings per share

 

 

 

 

 

 

 

Basic from continuing operations

$

0.11

 

 

$

0.25

 

 

$

0.29

 

 

$

0.48

 

Basic from discontinued operations

 

0.01

 

 

 

0.01

 

 

 

0.01

 

 

 

0.01

 

Basic attributable to common stockholders

$

0.12

 

 

$

0.26

 

 

$

0.30

 

 

$

0.49

 

 

 

 

 

 

 

 

 

Diluted from continuing operations

$

0.11

 

 

$

0.25

 

 

$

0.29

 

 

$

0.48

 

Diluted from discontinued operations

 

0.01

 

 

 

0.01

 

 

 

0.01

 

 

 

0.01

 

Diluted attributable to common stockholders

$

0.12

 

 

$

0.26

 

 

$

0.30

 

 

$

0.49

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

 

 

 

 

 

 

Basic

 

241.4

 

 

 

247.1

 

 

 

241.1

 

 

 

247.2

 

Diluted

 

241.7

 

 

 

247.5

 

 

 

241.6

 

 

 

248.3

 

 

ELEMENT SOLUTIONS INC

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

 

June 30,

 

December 31,

(dollars in millions)

2023

 

2022

Assets

 

 

 

Cash & cash equivalents

$

282.4

 

 

$

265.6

 

Accounts receivable, net of allowance for doubtful accounts of $13.9 and $14.4 at June 30, 2023 and December 31, 2022, respectively

 

452.2

 

 

 

455.8

 

Inventories

 

332.8

 

 

 

290.7

 

Prepaid expenses

 

34.1

 

 

 

38.5

 

Other current assets

 

155.0

 

 

 

138.1

 

Total current assets

 

1,256.5

 

 

 

1,188.7

 

Property, plant and equipment, net

 

282.5

 

 

 

277.2

 

Goodwill

 

2,394.9

 

 

 

2,412.8

 

Intangible assets, net

 

933.2

 

 

 

805.5

 

Deferred income tax assets

 

48.5

 

 

 

51.5

 

Other assets

 

145.4

 

 

 

168.0

 

Total assets

$

5,061.0

 

 

$

4,903.7

 

Liabilities and stockholders’ equity

 

 

 

Accounts payable

$

144.1

 

 

$

132.2

 

Current installments of long-term debt

 

11.5

 

 

 

11.5

 

Accrued expenses and other current liabilities

 

222.5

 

 

 

200.7

 

Total current liabilities

 

378.1

 

 

 

344.4

 

Debt

 

2,029.4

 

 

 

1,883.8

 

Pension and post-retirement benefits

 

35.7

 

 

 

36.7

 

Deferred income tax liabilities

 

115.3

 

 

 

121.2

 

Other liabilities

 

182.8

 

 

 

168.5

 

Total liabilities

 

2,741.3

 

 

 

2,554.6

 

Stockholders’ equity

 

 

 

Common stock: 400.0 shares authorized (2023: 266.1 shares issued; 2022: 265.1 shares issued)

 

2.7

 

 

 

2.7

 

Additional paid-in capital

 

4,194.4

 

 

 

4,185.9

 

Treasury stock (2023: 24.6 shares; 2022: 24.3 shares)

 

(341.8

)

 

 

(334.2

)

Accumulated deficit

 

(1,189.9

)

 

 

(1,223.8

)

Accumulated other comprehensive loss

 

(361.9

)

 

 

(298.1

)

Total stockholders’ equity

 

2,303.5

 

 

 

2,332.5

 

Non-controlling interests

 

16.2

 

 

 

16.6

 

Total equity

 

2,319.7

 

 

 

2,349.1

 

Total liabilities and stockholders’ equity

$

5,061.0

 

 

$

4,903.7

 

 

ELEMENT SOLUTIONS INC

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

Three Months Ended

 

 

Six Months Ended June 30,

(dollars in millions)

June 30,

2023

 

March 31,

2023

 

 

2023

 

2022

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

$

29.7

 

 

$

43.0

 

 

 

$

72.7

 

 

$

121.8

 

Net income from discontinued operations, net of tax

 

2.9

 

 

 

 

 

 

 

2.9

 

 

 

1.8

 

Net income from continuing operations

 

26.8

 

 

 

43.0

 

 

 

 

69.8

 

 

 

120.0

 

Reconciliation of net income to net cash flows provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

41.1

 

 

 

39.1

 

 

 

 

80.2

 

 

 

82.2

 

Deferred income taxes

 

2.9

 

 

 

(0.4

)

 

 

 

2.5

 

 

 

7.9

 

Foreign exchange (gain) loss

 

(8.8

)

 

 

(7.3

)

 

 

 

(16.1

)

 

 

0.1

 

Incentive stock compensation

 

3.3

 

 

 

4.4

 

 

 

 

7.7

 

 

 

8.8

 

Other, net

 

21.3

 

 

 

2.2

 

 

 

 

23.5

 

 

 

7.7

 

Changes in assets and liabilities, net of acquisitions:

 

 

 

 

 

 

 

 

Accounts receivable

 

2.2

 

 

 

(2.6

)

 

 

 

(0.4

)

 

 

(59.8

)

Inventories

 

(10.5

)

 

 

(29.1

)

 

 

 

(39.6

)

 

 

(75.9

)

Accounts payable

 

(8.1

)

 

 

18.6

 

 

 

 

10.5

 

 

 

43.2

 

Accrued expenses

 

10.4

 

 

 

(22.3

)

 

 

 

(11.9

)

 

 

(43.2

)

Prepaid expenses and other current assets

 

(0.7

)

 

 

2.7

 

 

 

 

2.0

 

 

 

(15.3

)

Other assets and liabilities

 

1.0

 

 

 

5.2

 

 

 

 

6.2

 

 

 

(7.0

)

Net cash flows provided by operating activities

 

80.9

 

 

 

53.5

 

 

 

 

134.4

 

 

 

68.7

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Capital expenditures

 

(13.8

)

 

 

(9.1

)

 

 

 

(22.9

)

 

 

(21.7

)

Proceeds from disposal of property, plant and equipment

 

 

 

 

0.5

 

 

 

 

0.5

 

 

 

3.4

 

Acquisitions, net of cash acquired

 

(188.3

)

 

 

 

 

 

 

(188.3

)

 

 

(22.6

)

Other, net

 

 

 

 

(3.0

)

 

 

 

(3.0

)

 

 

(5.1

)

Net cash flows used in investing activities

 

(202.1

)

 

 

(11.6

)

 

 

 

(213.7

)

 

 

(46.0

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Debt proceeds

 

150.0

 

 

 

 

 

 

 

150.0

 

 

 

 

Repayments of borrowings

 

(2.9

)

 

 

(2.9

)

 

 

 

(5.8

)

 

 

(6.3

)

Repurchases of common stock

 

 

 

 

 

 

 

 

 

 

 

(59.7

)

Dividends

 

(19.3

)

 

 

(19.4

)

 

 

 

(38.7

)

 

 

(39.6

)

Payment of financing fees

 

(0.7

)

 

 

 

 

 

 

(0.7

)

 

 

 

Other, net

 

(0.3

)

 

 

(7.2

)

 

 

 

(7.5

)

 

 

(23.8

)

Net cash flows provided by (used in) financing activities

 

126.8

 

 

 

(29.5

)

 

 

 

97.3

 

 

 

(129.4

)

Net cash flows provided by operating activities of discontinued operations

 

2.9

 

 

 

 

 

 

 

2.9

 

 

 

1.8

 

Effect of exchange rate changes on cash and cash equivalents

 

(5.1

)

 

 

1.0

 

 

 

 

(4.1

)

 

 

(9.6

)

Net increase (decrease) in cash and cash equivalents

 

3.4

 

 

 

13.4

 

 

 

 

16.8

 

 

 

(114.5

)

Cash and cash equivalents at beginning of period

 

279.0

 

 

 

265.6

 

 

 

 

265.6

 

 

 

330.1

 

Cash and cash equivalents at end of period

$

282.4

 

 

$

279.0

 

 

 

$

282.4

 

 

$

215.6

 

 

ELEMENT SOLUTIONS INC

ADDITIONAL FINANCIAL INFORMATION

(Unaudited)

 

I. SEGMENT RESULTS (1)

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

(dollars in millions)

2023

 

2022

 

Reported

 

Constant

Currency

 

Organic

 

2023

 

2022

 

Reported

 

Constant

Currency

 

Organic

Net sales

Electronics

$

355.8

 

$

440.8

 

(19)%

 

(17)%

 

(9)%

 

$

695.4

 

$

882.4

 

(21)%

 

(18)%

 

(10)%

Industrial & Specialty

 

230.3

 

 

236.1

 

(2)%

 

(1)%

 

(2)%

 

 

465.1

 

 

474.7

 

(2)%

 

1%

 

0%

Total

$

586.1

 

$

676.9

 

(13)%

 

(12)%

 

(6)%

 

$

1,160.5

 

$

1,357.1

 

(14)%

 

(12)%

 

(6)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

Electronics

$

76.3

 

$

101.2

 

(25)%

 

(22)%

 

 

 

$

149.0

 

$

202.1

 

(26)%

 

(22)%

 

 

Industrial & Specialty

 

39.8

 

 

39.2

 

2%

 

5%

 

 

 

 

79.4

 

 

83.1

 

(4)%

 

0%

 

 

Total

$

116.1

 

$

140.4

 

(17)%

 

(14)%

 

 

 

$

228.4

 

$

285.2

 

(20)%

 

(16)%

 

 

 

Three Months Ended June 30,

 

Constant Currency

 

Six Months Ended June 30,

 

Constant Currency

 

2023

 

2022

 

Change

 

2023

 

Change

 

2023

 

2022

 

Change

 

2023

 

Change

Adjusted EBITDA Margin

 

 

 

 

 

 

 

 

 

 

Electronics

21.5%

 

23.0%

 

(150)bps

 

21.8%

 

(120)bps

 

21.4%

 

22.9%

 

(150)bps

 

21.7%

 

(120)bps

Industrial & Specialty

17.3%

 

16.6%

 

70bps

 

17.6%

 

100bps

 

17.1%

 

17.5%

 

(40)bps

 

17.3%

 

(20)bps

Total

19.8%

 

20.7%

 

(90)bps

 

20.1%

 

(60)bps

 

19.7%

 

21.0%

 

(130)bps

 

20.0%

 

(100)bps

(1)

Reflects the transfer in the first quarter of 2023 of the operational responsibility of the Company’s Films business from its Graphics Solutions business in its Industrial & Specialty segment to its Circuitry Solutions business in its Electronics segment and the transfer of certain product lines between its Assembly Solutions business and its Semiconductor Solutions business, both of which are part of its Electronics segment. Historical information has been reclassified to reflect these changes for all periods presented.

 

II. CAPITAL STRUCTURE

(dollars in millions)

 

 

Maturity

 

Interest Rate

 

June 30, 2023

Instrument

 

 

 

 

 

 

 

Term Loans A

(1)

 

1/31/2026

 

SOFR plus 1.75%

 

$

150.0

Term Loans B

(1)

 

1/31/2026

 

SOFR plus 2.00%

 

 

1,108.3

Total First Lien Debt

 

 

 

 

 

 

 

1,258.3

Senior Notes due 2028

 

 

9/1/2028

 

3.875%

 

 

800.0

Total Debt

 

 

 

 

 

 

 

2,058.3

Cash Balance

 

 

 

 

 

 

 

282.4

Net Debt

 

 

 

 

 

 

$

1,775.9

Adjusted Shares Outstanding

(2)

 

 

 

 

 

 

243.9

Market Capitalization

(3)

 

 

 

 

 

$

4,682.9

Total Capitalization

 

 

 

 

 

 

$

6,458.8

(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 2024, January 2025 or January 2026, as applicable. At June 30, 2023, approximately 100% of the Company’s debt was fixed.

(2)

See “Adjusted Common Shares Outstanding at June 30, 2023 and 2022″ 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 $19.20 at June 30, 2023.

 

III. SELECTED FINANCIAL DATA

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

(dollars in millions)

2023

 

2022

 

2023

 

2022

Interest expense

$

14.5

 

$

13.5

 

$

27.8

 

$

28.0

Interest paid

 

4.5

 

 

4.0

 

 

25.8

 

 

24.5

Income tax expense

 

21.2

 

 

23.9

 

 

38.1

 

 

43.9

Income taxes paid

 

18.8

 

 

21.0

 

 

31.5

 

 

31.6

Capital expenditures

 

13.8

 

 

12.2

 

 

22.9

 

 

21.7

Proceeds from disposal of property, plant and equipment

 

 

 

3.4

 

 

0.5

 

 

3.4

 

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, net debt to adjusted EBITDA ratio (including with the estimated annual benefit from the ViaForm® transaction), organic net sales growth, third quarter 2023 guidance for adjusted EBITDA and full year 2023 guidance for adjusted EBITDA, adjusted EPS 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 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 separate from items that may have a disproportionate positive or negative impact on its financial results in any particular period or 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.

Contacts

Investor Relations:

Varun Gokarn

Senior Director, Strategy and Finance

Element Solutions Inc

1-203-952-0369

Media:

Liz Cohen

Managing Director

Kekst CNC

1-212-521-4845

Read full story here

error: Content is protected !!