PHILADELPHIA and PERTH,
Australia, Nov. 7, 2024
/PRNewswire/ -- Arcadium Lithium plc (NYSE: ALTM, ASX: LTM,
"Arcadium Lithium" or the "Company") today reported results
for the third quarter of 2024.
As a result of its pending acquisition by Rio Tinto, announced
on October 9, 2024 (the
"Transaction"), and as is customary during such transactions,
Arcadium Lithium will not hold an earnings conference call in
connection with its third quarter financial results. For the
same reason, the Company has withdrawn its operating and financial
guidance.
For further detail and discussion of Arcadium Lithium's results
for the third quarter of 2024, please refer to Arcadium Lithium's
Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, which was filed today with
the Securities and Exchange Commission (the "SEC"). Arcadium
Lithium plans to continue providing quarterly earnings releases and
will continue to file reports with the SEC until the Transaction
has been completed.
A preliminary proxy statement for the Transaction was filed with
the SEC on November 1, 2024.
Third Quarter Highlights
Third quarter revenue was $203.1
million and reported attributable GAAP net income was
$16.1 million, or 1 cent per diluted share. Adjusted
EBITDA1 was $42.9 million
and adjusted earnings per diluted share2 was
1 cent. The decline in Adjusted
EBITDA compared to the second quarter was attributable to lower
average realized prices and lower volumes, in addition to higher
costs.
The Company realized average pricing of $16,200 per product metric ton for combined
lithium hydroxide and carbonate volumes in the third quarter,
compared to $17,200 in the second
quarter. Average realized pricing declined across most
lithium products due to weaker market prices and customer and
product mix. However, lithium hydroxide pricing was roughly
flat quarter over quarter, supported by existing long term
commercial agreements.
Third quarter total volumes were 6% lower on an LCE3
basis than the second quarter, with higher spodumene volumes more
than offset by lower hydroxide and carbonate volumes. This
was largely a result of weaker overall demand in the quarter, as
well as a slow production ramp-up of the Olaroz Stage 2 lithium
carbonate expansion in Argentina.
|
Q3
2024
|
Revenue
(M)
|
Volume
|
Unit
|
Price
|
|
Lithium Hydroxide and
Lithium
Carbonate4
|
$141.60
|
~8,7505
|
product
metric ton
|
$16,200 / product
MT
|
|
Butyllithium
&
Other Lithium
Specialties
|
$39.40
|
~480
|
LCE3
|
$82,100 /
LCE
|
|
Spodumene
Concentrate
|
$22.10
|
~32,400
|
dry metric
ton
|
$682 / 5.3%
dmt
(~$770 SC6
equivalent)
|
|
|
|
|
|
|
Q3 2024 YTD (9
Months)
|
Revenue
(M)
|
Volume
|
Unit
|
Price
|
|
Lithium Hydroxide and
Lithium
Carbonate4
|
$517.80
|
~28,8505
|
product
metric ton
|
$18,000 / product
MT
|
|
Butyllithium
&
Other Lithium
Specialties
|
$130.20
|
~1,390
|
LCE3
|
$93,700 /
LCE
|
|
Spodumene
Concentrate
|
$70.80
|
~85,900
|
dry metric
ton
|
$824 / 5.4%
dmt
(~$925 SC6
equivalent)
|
"We continued to deliver strong average realized pricing in a
challenging market in the third quarter, supported by our
commercial strategy in lithium hydroxide which focuses on long term
strategic customers. Our nine-month year-to-date average
realized pricing of $18,000/t for
combined hydroxide and carbonate demonstrates our ability to
achieve higher pricing than market indices in current market
conditions," said Paul Graves,
president and chief executive officer of Arcadium Lithium.
"We remain focused on cost and operational discipline,
executing cost saving initiatives and prudently advancing our
expansion projects, prioritizing Sal de
Vida and Nemaska Lithium."
Acquisition by Rio Tinto
On October 9, 2024 a definitive
agreement (the "Transaction Agreement") was announced under which
Rio Tinto will acquire Arcadium Lithium in an all-cash transaction
for US$5.85 per share. The
Transaction represents a premium of 90% to Arcadium's closing price
of $3.08 per share on October 4, 2024 and values Arcadium Lithium's
diluted share capital at approximately $6.7
billion.6
Paul Graves said: "We are
confident that this is a compelling cash offer that reflects a full
and fair long-term value for our business and de-risks our
shareholders' exposure to the execution of our development
portfolio and market volatility. This agreement with Rio Tinto
demonstrates the value in what we have built over many years at
Arcadium Lithium and its predecessor companies, and we are excited
that this transaction will give us the opportunity to accelerate
and expand our strategy, for the benefit of our customers, our
employees, and the communities in which we operate."
The Transaction has been unanimously approved by both the Rio
Tinto and Arcadium Lithium Boards of Directors. The Transaction,
which will be implemented by way of a Jersey scheme of arrangement,
is expected to close in mid-2025. Key conditions to closing of the
Transaction include approval of Arcadium Lithium shareholders and
the Royal Court of Jersey. In addition, the Transaction is subject
to receipt of customary regulatory approvals and other closing
conditions. However, Arcadium Lithium cannot assure completion of
the Transaction by any particular date, if at all or that, if
completed, it will be completed on the terms set forth in the
Transaction Agreement.
Arcadium Lithium shareholders do not need to take any action at
the present time. A majority in number of those Arcadium
Lithium shareholders present and voting, and representing at least
75% of the voting rights of all shares voted, will be required to
complete the Transaction.
Full details of the terms and conditions of the Transaction are
set out in the Transaction Agreement, which may be obtained, free
of charge, on the SEC's website (http://www.sec.gov).
|
________________________
|
|
1
Reconciliation of Adjusted EBITDA, a non-GAAP measure, to net
income attributable to Arcadium Lithium plc, the most directly
comparable financial measure presented in accordance with GAAP, is
set forth in the reconciliation table accompanying this
release.
|
|
2
Corresponds to Diluted adjusted after-tax earnings per share in the
accompanying financial tables. Reconciliation of Diluted
adjusted after-tax earnings per share, a non-GAAP measure, to
Diluted earnings per ordinary share (GAAP), the most directly
comparable financial measure presented in accordance with GAAP, is
set forth in the reconciliation table accompanying this
release.
|
|
3 Lithium
Carbonate Equivalents.
|
|
4 Includes
100% of Olaroz in which Arcadium Lithium has current economic
interest of 66.5%.
|
|
5 Excludes
lithium carbonate by-product.
|
|
6 Includes
conversion of all outstanding convertible senior notes due
2025.
|
Arcadium Lithium Contacts
Investors:
Daniel
Rosen +1 215 299 6208
daniel.rosen@arcadiumlithium.com
Phoebe Lee +61 413 557 780
phoebe.lee@arcadiumlithium.com
Media:
Karen Vizental
+54 9 114 414 4702
karen.vizental@arcadiumlithium.com
Supplemental Information
In this press release,
Arcadium Lithium uses the financial measures Adjusted EBITDA and
Diluted adjusted after-tax earnings per share. These terms
are not calculated in accordance with generally accepted accounting
principles (GAAP). Definitions of these terms, as well as a
reconciliation to the most directly comparable financial measure
calculated and presented in accordance with GAAP, are provided on
our website: ir.arcadiumlithium.com and elsewhere in this press
release or the financial tables that accompany this press
release.
About Arcadium Lithium
Arcadium Lithium is a leading
global lithium chemicals producer committed to safely and
responsibly harnessing the power of lithium to improve people's
lives and accelerate the transition to a clean energy future.
We collaborate with our customers to drive innovation and power a
more sustainable world in which lithium enables exciting
possibilities for renewable energy, electric transportation and
modern life. Arcadium Lithium is vertically integrated, with
industry-leading capabilities across lithium extraction processes,
including hard-rock mining, conventional brine extraction and
direct lithium extraction (DLE), and in lithium chemicals
manufacturing for high performance applications. We have operations
around the world, with facilities and projects in Argentina, Australia, Canada, China, Japan,
the United Kingdom and the United
States. For more information, please visit us at
www.ArcadiumLithium.com.
Additional Information and Where to Find It
In
connection with the Transaction, Arcadium Lithium has filed with
the SEC a preliminary proxy statement on Schedule 14A. This press
release is not a substitute for the proxy statement or any other
document that Arcadium Lithium may file with the SEC and send to
its shareholders in connection with the Transaction. Before making
any voting decision, Arcadium Lithium's shareholders are urged to
read all relevant documents filed or to be filed with the SEC,
including the proxy statement, as well as any amendments or
supplements to those documents, when they become available, because
they will contain important information about Arcadium Lithium and
the Transaction.
Arcadium Lithium's shareholders will be able to obtain a free
copy of the proxy statement, as well as other filings containing
information about Arcadium Lithium, free of charge, at the SEC's
website (www.sec.gov). Copies of the proxy statement and other
documents filed by Arcadium Lithium with the SEC may be obtained,
without charge, by contacting Arcadium Lithium through its website
at https://ir.arcadiumlithium.com/.
Participants in the Solicitation
Arcadium Lithium, its
directors, executive officers and other persons related to Arcadium
Lithium may be deemed to be participants in the solicitation of
proxies from Arcadium Lithium's shareholders in connection with the
Transaction. Information about the directors and executive officers
of Arcadium Lithium and their ownership of ordinary shares of
Arcadium Lithium is set forth in the sections entitled "Directors,
Executive Officers And Corporate Governance" and "Security
Ownership Of Certain Beneficial Owners And Management And Related
Stockholder Matters" in Arcadium Lithium's annual report on Form
10-K, as amended, for the fiscal year ended December 31, 2023, which was filed with the SEC
on February 29, 2024 and amended on
April 1, 2024 and April 29, 2024, and is set forth in the sections
entitled "Board of Directors" and "Security Ownership of Arcadium
Lithium plc" in its proxy statement for its 2024 annual meeting of
shareholders, which was filed with the SEC on June 7, 2024. Additional information regarding
the participants in the proxy solicitation and a description of
their direct and indirect interests, by security holdings or
otherwise, is included in the preliminary proxy statement and will
be included in the proxy statement and other relevant materials to
be filed with the SEC in connection with the Transaction when they
become available. Free copies of these documents may be obtained as
described in the preceding paragraph.
Important Information and Legal Disclaimer:
Safe
Harbor Statement under the Private Securities Litigation Reform Act
of 1995: Certain statements in this news release are
forward-looking statements. In some cases, we have identified
forward-looking statements by such words or phrases as "will likely
result," "is confident that," "expect," "expects," "should,"
"could," "may," "will continue to," "believe," "believes,"
"anticipates," "predicts," "forecasts," "estimates," "projects,"
"potential," "intends" or similar expressions identifying
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995, including the negative of
those words and phrases. Such forward-looking statements are based
on our current views and assumptions regarding future events,
future business conditions and the outlook for Arcadium Lithium
based on currently available information. There are important
factors that could cause Arcadium Lithium's actual results, level
of activity, performance or achievements to differ materially from
the results, level of activity, performance or achievements
expressed or implied by the forward-looking statements, including
the completion of the Transaction on anticipated terms and timing,
including obtaining required shareholder and regulatory approvals,
and the satisfaction of other conditions to the completion of the
Transaction; potential litigation relating to the Transaction that
could be instituted by or against Arcadium Lithium or its
affiliates, directors or officers, including the effects of any
outcomes related thereto; the risk that disruptions from the
Transaction will harm Arcadium Lithium's business, including
current plans and operations; the ability of Arcadium Lithium to
retain and hire key personnel; potential adverse reactions or
changes to business or governmental relationships resulting from
the announcement or completion of the Transaction; certain
restrictions during the pendency of the Transaction that may impact
Arcadium Lithium's ability to pursue certain business opportunities
or strategic transactions; significant transaction costs associated
with the Transaction; the possibility that the Transaction may be
more expensive to complete than anticipated, including as a result
of unexpected factors or events; the occurrence of any event,
change or other circumstance that could give rise to the
termination of the Transaction, including in circumstances
requiring Arcadium Lithium to pay a termination fee or other
expenses; competitive responses to the Transaction; the supply and
demand in the market for our products as well as pricing for
lithium and high-performance lithium compounds; our ability to
realize the anticipated benefits of the integration of the
businesses of Livent and Allkem or of any future acquisitions; our
ability to acquire or develop additional reserves that are
economically viable; the existence, availability and profitability
of mineral resources and mineral and ore reserves; the success of
our production expansion efforts, research and development efforts
and the development of our facilities; our ability to retain
existing customers; the competition that we face in our business;
the development and adoption of new battery technologies;
additional funding or capital that may be required for our
operations and expansion plans; political, financial and
operational risks that our lithium extraction and production
operations, particularly in Argentina, expose us to; physical and other
risks that our operations and suppliers are subject to; our ability
to satisfy customer qualification processes or customer or
government quality standards; global economic conditions, including
inflation, fluctuations in the price of energy and certain raw
materials; the ability of our joint ventures, affiliated entities
and contract manufacturers to operate according to their business
plans and to fulfill their obligations; severe weather events and
the effects of climate change; extensive and dynamic environmental
and other laws and regulations; our ability to obtain and comply
with required licenses, permits and other approvals; and other
factors described under the caption entitled "Risk Factors" in
Arcadium Lithium's 2023 Form 10-K filed with the SEC on
February 29, 2024, as well as
Arcadium Lithium's other SEC filings and public communications.
Although Arcadium Lithium believes the expectations reflected in
the forward-looking statements are reasonable, Arcadium Lithium
cannot guarantee future results, level of activity, performance or
achievements. Moreover, neither Arcadium Lithium nor any other
person assumes responsibility for the accuracy and completeness of
any of these forward-looking statements. Arcadium Lithium is under
no duty to update any of these forward-looking statements after the
date of this news release to conform its prior statements to actual
results or revised expectations.
|
ARCADIUM LITHIUM
PLC
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited, in millions, except per share
data)
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2024
|
|
2023 (1)
|
|
2024
|
|
2023 (1)
|
|
Revenue
|
$ 203.1
|
|
$ 211.4
|
|
$
718.8
|
|
$ 700.7
|
|
Costs of
sales
|
146.9
|
|
83.6
|
|
475.8
|
|
258.4
|
|
Gross
margin
|
56.2
|
|
127.8
|
|
243.0
|
|
442.3
|
|
Impairment
charges
|
51.7
|
|
—
|
|
51.7
|
|
—
|
|
Selling, general and
administrative expenses
|
39.7
|
|
13.2
|
|
95.1
|
|
47.1
|
|
Research and
development expenses
|
1.2
|
|
1.3
|
|
3.8
|
|
3.3
|
|
Restructuring and other
charges
|
9.7
|
|
8.7
|
|
111.4
|
|
35.0
|
|
Total costs and
expenses
|
249.2
|
|
106.8
|
|
737.8
|
|
343.8
|
|
(Loss)/income from
operations before equity in net loss of unconsolidated
affiliate, interest expense/(income), net, loss on debt
extinguishment and
other (gains)/losses
|
(46.1)
|
|
104.6
|
|
(19.0)
|
|
356.9
|
|
Equity in net loss of
unconsolidated affiliate
|
5.9
|
|
6.7
|
|
5.9
|
|
22.0
|
|
Interest
expense/(income), net
|
1.5
|
|
—
|
|
(18.8)
|
|
—
|
|
Loss on debt
extinguishment
|
—
|
|
—
|
|
1.1
|
|
—
|
|
Other
(gains)/losses
|
(44.8)
|
|
1.2
|
|
(202.0)
|
|
(5.3)
|
|
(Loss)/income from
operations before income taxes
|
(8.7)
|
|
96.7
|
|
194.8
|
|
340.2
|
|
Income tax
(benefit)/expense
|
(33.4)
|
|
9.3
|
|
55.7
|
|
47.8
|
|
Net income
|
$
24.7
|
|
$
87.4
|
|
$
139.1
|
|
$ 292.4
|
|
Net income attributable
to noncontrolling interests
|
8.6
|
|
—
|
|
21.7
|
|
—
|
|
Net income attributable
to Arcadium Lithium plc
|
$
16.1
|
|
$
87.4
|
|
$
117.4
|
|
$ 292.4
|
|
Basic earnings per
ordinary share
|
$
0.01
|
|
$
0.20
|
|
$ 0.11
|
|
$
0.68
|
|
Diluted earnings per
ordinary share
|
$
0.01
|
|
$
0.17
|
|
$ 0.10
|
|
$
0.58
|
|
Weighted average
ordinary shares outstanding - basic
|
1,075.1
|
|
432.4
|
|
1,067.8
|
|
432.3
|
|
Weighted average
ordinary shares outstanding - diluted
|
1,143.6
|
|
503.6
|
|
1,136.4
|
|
503.5
|
|
_______________________
|
|
1.
|
For the three and nine
months ended September 30, 2023, basic and diluted earnings per
ordinary share and weighted average ordinary shares outstanding -
basic and diluted amounts represent predecessor Livent and have
been adjusted to reflect the 2.406 Exchange Ratio. Represents the
results of predecessor Livent's operations for three and nine
months ended September 30, 2023 which do not include the
operations of Allkem.
|
|
ARCADIUM LITHIUM
PLC
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES
RECONCILIATION OF NET INCOME ATTRIBUTABLE TO ARCADIUM LITHIUM PLC
(GAAP) TO ADJUSTED
EBITDA (NON-GAAP)
(Unaudited)
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
(in
Millions)
|
2024
|
|
2023 (1)
|
|
2024
|
|
2023 (1)
|
|
Net income attributable
to Arcadium Lithium plc
|
$
16.1
|
|
$
87.4
|
|
$
117.4
|
|
$
292.4
|
|
Add back:
|
|
|
|
|
|
|
|
|
Net income attributable
to noncontrolling interests
|
8.6
|
|
—
|
|
21.7
|
|
—
|
|
Interest
expense/(income), net
|
1.5
|
|
—
|
|
(18.8)
|
|
—
|
|
Income tax
(benefit)/expense
|
(33.4)
|
|
9.3
|
|
55.7
|
|
47.8
|
|
Depreciation and
amortization
|
26.3
|
|
7.7
|
|
67.8
|
|
21.5
|
|
EBITDA (Non-GAAP)
(2)
|
19.1
|
|
104.4
|
|
243.8
|
|
361.7
|
|
Add back:
|
|
|
|
|
|
|
|
|
Argentina remeasurement
(gains)/losses (a)
|
(30.1)
|
|
11.6
|
|
(126.3)
|
|
20.5
|
|
Impairment charges
(b)
|
51.7
|
|
—
|
|
51.7
|
|
—
|
|
Restructuring and other
charges (c)
|
9.7
|
|
8.7
|
|
111.4
|
|
35.0
|
|
Loss on debt
extinguishment (d)
|
—
|
|
—
|
|
1.1
|
|
—
|
|
Inventory step-up,
Allkem Livent Merger (e)
|
0.5
|
|
—
|
|
21.0
|
|
—
|
|
Other losses/(gains)
(f)
|
1.0
|
|
5.0
|
|
(6.4)
|
|
15.8
|
|
Subtract:
|
|
|
|
|
|
|
|
|
Blue Chip Swap gain
(g)
|
(8.7)
|
|
(10.0)
|
|
(45.2)
|
|
(21.4)
|
|
Argentina interest
income (h)
|
(0.3)
|
|
—
|
|
(0.3)
|
|
—
|
|
Adjusted EBITDA
(Non-GAAP) (2)
|
$
42.9
|
|
$
119.7
|
|
$
250.8
|
|
$
411.6
|
|
__________________
|
|
1.
|
Represents the results
of predecessor Livent's operations for three and nine months ended
September 30, 2023 which do not include the operations of
Allkem.
|
|
2.
|
We evaluate operating
performance using certain Non-GAAP measures such as EBITDA, which
we define as net income attributable to Arcadium Lithium plc plus
noncontrolling interests, interest expense/(income), net, income
tax (benefit)/expense and depreciation and amortization; and
Adjusted EBITDA, which we define as EBITDA adjusted for Argentina
remeasurement (gains)/losses, impairment charges, restructuring and
other charges, Merger-related inventory step-up, certain Blue Chip
Swap gains and other losses/(gains). Management believes the use of
these Non-GAAP measures allows management and investors to compare
more easily the financial performance of its underlying business
from period to period. The Non-GAAP information provided may not be
comparable to similar measures disclosed by other companies because
of differing methods used by other companies in calculating EBITDA
and Adjusted EBITDA. This measure should not be considered as a
substitute for net income or other measures of performance or
liquidity reported in accordance with U.S. GAAP. The above table
reconciles EBITDA and Adjusted EBITDA from net income.
|
|
a.
|
Represents impact of
currency fluctuations primarily on deferred income tax assets and
liabilities. Also includes impact of currency fluctuations on other
tax assets and liabilities and on long-term monetary assets
associated with our capital expansion as well as foreign currency
devaluations. The remeasurement (gains)/losses are included within
Other (gains)/losses in our condensed consolidated statements of
operations but are excluded from our calculation of Adjusted EBITDA
because of: i.) their nature as income tax related; ii.) their
association with long-term capital projects which will not be
operational until future periods; or iii.) the severity of the
devaluations and their immediate impact on our operations in the
country.
|
|
b.
|
In the third quarter of
2024, the Company's plan to place its Mt Cattlin spodumene
operation in Western Australia into care and maintenance resulted
in a non-cash charge of $51.7 million for the three and nine
months ended September 30, 2024, and was recorded to Impairment
charges in the condensed consolidated statement of operations. The
impairment charges are excluded from our calculation of Adjusted
EBITDA because the charges are nonrecurring.
|
|
c.
|
We continually perform
strategic reviews and assess the return on our business. This
sometimes results in management changes or in a plan to restructure
the operations of our business. As part of these restructuring
plans, demolition costs and write-downs of long-lived assets may
occur. The three months ended September 30, 2024 and 2023 include
costs related to the combination of Livent and Allkem in a
stock-for-stock transaction (the "Allkem Livent Merger") of $12.2
million and $13.6 million, respectively. The nine months ended
September 30, 2024 and 2023 include costs related to the Allkem
Livent Merger of $99.0 million and $32.3 million, respectively. The
nine months ended September 30, 2024 and 2023 include
severance-related costs of $14.7 million and $2.4 million,
respectively.
|
|
d.
|
The nine months ended
September 30, 2024 includes a $0.9 million prepayment fee incurred
when the Sal de Vida Project Financing Facility was repaid in its
entirety by SDJ on May 30, 2024 and $0.2 million for the partial
write-off of deferred financing costs for amendments to the
Revolving Credit Facility. The debt extinguishment losses are
excluded from our calculation of Adjusted EBITDA because the loss
is nonrecurring.
|
|
e.
|
Relates to the step-up
in inventory recorded for Allkem Livent Merger for the nine months
ended September 30, 2024 as a result of purchase accounting,
excluded from Adjusted EBITDA as the step-up is considered a
one-time, non-recurring cost.
|
|
f.
|
The three and nine
months ended September 30, 2024 primarily represents foreign
currency remeasurement gains related to U.S. dollar-denominated
cash balances temporarily held at a foreign currency-functional
subsidiary. The three and nine months ended September 30, 2023,
prior to consolidation of Nemaska Lithium Inc. ("NLI") on October
18, 2023, represents our 50% ownership interest in costs incurred
for certain project-related costs to align NLI's reported results
with Arcadium's capitalization policies and interest expense
incurred by NLI, all included in Equity in net loss of
unconsolidated affiliate in our condensed consolidated statements
of operations. The Company consolidates NLI on a one-quarter lag
basis and prior to October 18, 2023, accounted for its equity
method investment in NLI on a one-quarter lag basis.
|
|
g.
|
Represents
non-recurring gain from the sale in Argentina pesos of Argentina
Sovereign U.S. dollar-denominated bonds due to the divergence of
Argentina's Blue Chip Swap market exchange rate from the official
rate.
|
|
h.
|
Represents interest
income received from the Argentina government for the period
beginning when the recoverability of certain of our
expansion-related VAT receivables were approved by the Argentina
government and ending on the date when the reimbursements were paid
by the Argentina government but is excluded from our calculation of
Adjusted EBITDA because of its association with long-term capital
projects which will not be operational until future
periods.
|
|
RECONCILIATION OF
NET INCOME ATTRIBUTABLE TO ARCADIUM LITHIUM PLC (GAAP) TO
ADJUSTED AFTER-TAX EARNINGS (NON-GAAP)
(Unaudited)
|
|
|
(in Millions, Except
Per Share Data)
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2024
|
|
2023 (1)
|
|
2024
|
|
2023 (1)
|
|
Net income attributable
to Arcadium Lithium plc
|
$
16.1
|
|
$
87.4
|
|
$
117.4
|
|
$
292.4
|
|
Add back:
|
|
|
|
|
|
|
|
|
Net income attributable
to noncontrolling interests
|
8.6
|
|
—
|
|
21.7
|
|
—
|
|
Special
charges:
|
|
|
|
|
|
|
|
|
Argentina
remeasurement (gains)/losses (a)
|
(30.1)
|
|
11.6
|
|
(126.3)
|
|
20.5
|
|
Impairment charges
(b)
|
51.7
|
|
—
|
|
51.7
|
|
—
|
|
Restructuring and
other charges (c)
|
9.7
|
|
8.7
|
|
111.4
|
|
35.0
|
|
Loss on debt
extinguishment (d)
|
—
|
|
—
|
|
1.1
|
|
—
|
|
Inventory step-up,
Allkem Livent Merger (e)
|
0.5
|
|
—
|
|
21.0
|
|
—
|
|
Other losses/(gains)
(f)
|
1.0
|
|
5.0
|
|
(6.4)
|
|
15.8
|
|
Blue Chip Swap gain
(g)
|
(8.7)
|
|
(10.0)
|
|
(45.2)
|
|
(21.4)
|
|
Argentina interest
income (h)
|
(0.3)
|
|
—
|
|
(0.3)
|
|
—
|
|
Non-GAAP tax
adjustments (i)
|
(34.7)
|
|
(10.8)
|
|
3.6
|
|
(17.1)
|
|
Adjusted after-tax
earnings (Non-GAAP) (2)
|
$
13.8
|
|
$
91.9
|
|
$
149.7
|
|
$
325.2
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
ordinary share (GAAP)
|
$
0.01
|
|
$
0.17
|
|
$
0.10
|
|
$
0.58
|
|
Special charges per
diluted share, before tax:
|
|
|
|
|
|
|
|
|
Argentina
remeasurement (gains)/losses, per diluted share
|
(0.02)
|
|
0.02
|
|
(0.10)
|
|
0.04
|
|
Impairment charges,
per diluted share
|
0.05
|
|
—
|
|
0.05
|
|
—
|
|
Restructuring and
other charges, per diluted share
|
0.01
|
|
0.02
|
|
0.11
|
|
0.07
|
|
Inventory step-up,
Allkem Livent Merger, per diluted share
|
—
|
|
—
|
|
0.02
|
|
—
|
|
Other losses/(gains),
per diluted share
|
—
|
|
0.01
|
|
(0.01)
|
|
0.03
|
|
Blue Chip Swap gain,
per diluted share
|
(0.01)
|
|
(0.02)
|
|
(0.04)
|
|
(0.04)
|
|
Non-GAAP tax
adjustments, per diluted share
|
(0.03)
|
|
(0.02)
|
|
—
|
|
(0.03)
|
|
Diluted adjusted
after-tax earnings per share (Non-GAAP) (2)
|
$
0.01
|
|
$
0.18
|
|
$
0.13
|
|
$
0.65
|
|
Weighted average
ordinary shares outstanding - diluted (Non-
GAAP) used in diluted adjusted after-tax earnings per share
computations
|
1,143.6
|
|
503.6
|
|
1,136.4
|
|
503.5
|
|
___________________
|
|
1.
|
For the three and nine
months ended September 30, 2023, diluted earnings per ordinary
share (GAAP), weighted average ordinary shares outstanding -
diluted (Non-GAAP) and all per diluted share amounts represent
predecessor Livent and have been adjusted to reflect the 2.406
Exchange Ratio. Represents the results of predecessor Livent's
operations for three and nine months ended September 30, 2023
which do not include the operations of Allkem.
|
|
2.
|
The Company believes
that the Non-GAAP financial measures Adjusted after-tax earnings
and Diluted adjusted after-tax earnings per share provide useful
information about the Company's operating results to management,
investors and securities analysts. Adjusted after-tax earnings
excludes the effects of, nonrecurring charges/(income) and
tax-related adjustments. The Company also believes that excluding
the effects of these items from operating results allows management
and investors to compare more easily the financial performance of
its underlying business from period to period. Diluted adjusted
after-tax earnings per share (Non-GAAP) is calculated using
weighted average common shares outstanding -
diluted.
|
|
a.
|
Represents impact of
currency fluctuations primarily on deferred income tax assets and
liabilities. Also includes impact of currency fluctuations on other
tax assets and liabilities and on long-term monetary assets
associated with our capital expansion as well as foreign currency
devaluations. The remeasurement (gains)/losses are included within
Other (gains)/losses in our condensed consolidated statements of
operations but are excluded from our calculation of Adjusted EBITDA
because of: i.) their nature as income tax related; ii.) their
association with long-term capital projects which will not be
operational until future periods; or iii.) the severity of the
devaluations and their immediate impact on our operations in the
country.
|
|
b.
|
In the third quarter of
2024, the Company's plan to place its Mt Cattlin spodumene
operation in Western Australia into care and maintenance resulted
in a non-cash charge of $51.7 million for the three and nine
months ended September 30, 2024, and was recorded to Impairment
charges in the condensed consolidated statement of operations. The
impairment charges are excluded from our calculation of Adjusted
EBITDA because the charges are nonrecurring.
|
|
c.
|
We continually perform
strategic reviews and assess the return on our business. This
sometimes results in management changes or in a plan to restructure
the operations of our business. As part of these restructuring
plans, demolition costs and write-downs of long-lived assets may
occur. The three months ended September 30, 2024 and 2023 include
costs related to the Allkem Livent Merger of $12.2 million and
$13.6 million, respectively. The nine months ended September 30,
2024 and 2023 include costs related to the Allkem Livent Merger of
$99.0 million and $32.3 million, respectively. The nine months
ended September 30, 2024 and 2023 include severance-related costs
of $14.7 million and $2.4 million, respectively.
|
|
d.
|
The nine months ended
September 30, 2024 includes a $0.9 million prepayment fee incurred
when the Sal de Vida Project Financing Facility was repaid in its
entirety by SDJ on May 30, 2024 and $0.2 million for the partial
write-off of deferred financing costs for amendments to the
Revolving Credit Facility. The debt extinguishment losses are
excluded from our calculation of Adjusted EBITDA because the loss
is nonrecurring.
|
|
e.
|
Relates to the step-up
in inventory recorded for Allkem Livent Merger for the nine months
ended September 30, 2024 as a result of purchase accounting,
excluded from Adjusted EBITDA as the step-up is considered a
one-time, non-recurring cost.
|
|
f.
|
The three and nine
months ended September 30, 2024 primarily represents foreign
currency remeasurement gains related to U.S. dollar-denominated
cash balances temporarily held at a foreign currency-functional
subsidiary. The three and nine months ended September 30, 2023,
prior to consolidation of Nemaska Lithium Inc. ("NLI") on October
18, 2023, represents our 50% ownership interest in costs incurred
for certain project-related costs to align NLI's reported results
with Arcadium's capitalization policies and interest expense
incurred by NLI, all included in Equity in net loss of
unconsolidated affiliate in our condensed consolidated statements
of operations. The Company consolidates NLI on a one-quarter lag
basis and prior to October 18, 2023, accounted for its equity
method investment in NLI on a one-quarter lag basis.
|
|
g.
|
Represents
non-recurring gain from the sale in Argentina pesos of Argentina
Sovereign U.S. dollar-denominated bonds due to the divergence of
Argentina's Blue Chip Swap market exchange rate from the official
rate.
|
|
h.
|
Represents interest
income received from the Argentina government for the period
beginning when the recoverability of certain of our
expansion-related VAT receivables were approved by the Argentina
government and ending on the date when the reimbursements were paid
by the Argentina government but is excluded from our calculation of
Adjusted EBITDA because of its association with long-term capital
projects which will not be operational until future
periods.
|
|
i.
|
The company excludes
the GAAP tax provision, including discrete items, from the Non-GAAP
measure Diluted adjusted after-tax earnings per share, and instead
includes a Non-GAAP tax provision based upon the annual Non-GAAP
effective tax rate. The GAAP tax provision includes certain
discrete tax items including, but not limited to: income tax
expenses or benefits that are not related to operating results in
the current year; tax adjustments associated with fluctuations in
foreign currency remeasurement of certain foreign operations;
certain changes in estimates of tax matters related to prior fiscal
years; certain changes in the realizability of deferred tax assets
and related accounting impacts; and changes in tax law. Management
believes excluding these discrete tax items assists investors and
securities analysts in understanding the tax provision and the
effective tax rate related to operating results thereby providing
investors with useful supplemental information about the company's
operational performance. The income tax expense/(benefit) on
special charges/(income) is determined using the applicable rates
in the taxing jurisdictions in which the special charge or income
occurred and includes both current and deferred income tax
expense/(benefit) based on the nature of the Non-GAAP performance
measure.
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
(in
Millions)
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Non-GAAP tax
adjustments:
|
|
|
|
|
|
|
|
|
Income tax benefit on
restructuring and other charges and other corporate
costs
|
$
(3.5)
|
|
$
(0.8)
|
|
$ (26.9)
|
|
$
(3.6)
|
|
Revisions to our tax
liabilities due to finalization of prior year tax
returns
|
(5.3)
|
|
(0.3)
|
|
(4.1)
|
|
(0.4)
|
|
Foreign currency
remeasurement (net of valuation allowance) and other discrete
items
|
(9.5)
|
|
(12.0)
|
|
38.4
|
|
(15.1)
|
|
Blue Chip Swap
gain
|
1.3
|
|
1.0
|
|
10.5
|
|
2.2
|
|
Tax effect of
impairment charges
|
(15.5)
|
|
—
|
|
(15.5)
|
|
—
|
|
Other discrete
items
|
(2.2)
|
|
1.3
|
|
1.2
|
|
(0.2)
|
|
Total Non-GAAP tax
adjustments
|
$ (34.7)
|
|
$ (10.8)
|
|
$
3.6
|
|
$ (17.1)
|
|
RECONCILIATION OF
CASH (USED IN)/PROVIDED BY OPERATING ACTIVITIES (GAAP)
TO
ADJUSTED CASH PROVIDED BY OPERATIONS
(NON-GAAP)
(Unaudited)
|
|
|
Nine Months Ended
September 30,
|
|
(in
Millions)
|
2024
|
|
2023 (1)
|
|
Cash (used in)/provided
by operating activities (GAAP)
|
$
(158.9)
|
|
$
261.8
|
|
Restructuring and
other charges
|
162.0
|
|
12.2
|
|
Argentina interest
income
|
(1.1)
|
|
—
|
|
Adjusted cash provided
by operations (Non-GAAP) (2)
|
$
2.0
|
|
$
274.0
|
|
___________________
|
|
1.
|
Represents the results
of predecessor Livent's operations for nine months ended
September 30, 2023 which do not include the operations of
Allkem.
|
|
2.
|
The Company believes
that the Non-GAAP financial measure Adjusted cash provided by
operations provides useful information about the Company's cash
flows to investors and securities analysts. Adjusted cash provided
by operations excludes the effects of transaction-related cash
flows. The Company also believes that excluding the effects of
these items from cash (used in)/provided by operating activities
allows management and investors to compare more easily the cash
flows from period to period.
|
|
RECONCILIATION OF
LONG-TERM DEBT (GAAP) AND CASH AND CASH EQUIVALENTS (GAAP)
TO
NET DEBT (NON-GAAP)
(Unaudited)
|
|
|
(in
Millions)
|
September 30,
2024
|
|
December 31, 2023
(1)
|
|
Long-term debt
(including current maturities) (GAAP) (a)
|
$
724.4
|
|
$
302.0
|
|
Less: Cash and cash
equivalents (GAAP)
|
(137.9)
|
|
(237.6)
|
|
Net debt (Non-GAAP)
(2)
|
$
586.5
|
|
$
64.4
|
|
___________________
|
|
1.
|
Represents the
financial position of predecessor Livent as of December 31, 2023,
which does not include the financial position of Allkem.
|
|
2.
|
The Company believes
that the Non-GAAP financial measure Net debt provides useful
information about the Company's cash flows and liquidity to
investors and securities analysts.
|
|
a.
|
Presented net of
unamortized discounts of $64.9 million and $22.2 million as of
September 30, 2024 and December 31, 2023,
respectively.
|
|
RECONCILIATION OF
CASH AND CASH EQUIVALENTS (GAAP) TO ADJUSTED CASH AND DEPOSITS
(NON-GAAP)
|
|
|
The following table
provides a reconciliation of Arcadium Lithium's Cash and cash
equivalents (GAAP) to Adjusted cash and deposits (Non-GAAP), on an
unaudited basis for illustrative purposes. We define Adjusted cash
and deposits (Non-GAAP) as Cash and cash equivalents, plus
restricted cash in Other non-current assets, less Nemaska Lithium
Cash and cash equivalents consolidated by Arcadium on a one-quarter
lag, plus Nemaska Lithium Cash and cash equivalents not on a
one-quarter lag. Our management believes that this measure provides
useful information about the Company's balances and liquidity to
investors and securities analysts. Such measure may not be
comparable to similar measures disclosed by other companies because
of differing methods used by other companies in calculating
Adjusted cash and deposits. These measures should not be considered
as a substitute for Cash and cash equivalents or other measures of
liquidity reported in accordance with U.S. GAAP.
|
|
|
September 30,
2024
|
|
December 31, 2023
(1)
|
|
(in
Millions)
|
(unaudited)
(1)
|
|
Arcadium Lithium Cash
and cash equivalents (GAAP)
|
$
137.9
|
|
$
237.6
|
|
Allkem Cash and cash
equivalents
|
—
|
|
681.4
|
|
Add:
|
|
|
|
|
Restricted cash in
Other non-current assets:
|
|
|
|
|
Project Loan Facility
guarantee - Stage 2 of Olaroz Plant (SDJ)
|
18.1
|
|
24.6
|
|
Project Financing
Facility guarantee - Sal de Vida (SDV) (2)
|
—
|
|
32.5
|
|
Other
|
5.2
|
|
5.0
|
|
Less:
|
|
|
|
|
Nemaska Lithium Cash
and cash equivalents as of June 30, 2024 and October
18, 2023, respectively, consolidated by Arcadium on a one-quarter
lag
|
(42.0)
|
|
(133.5)
|
|
Arcadium Lithium,
excluding Nemaska Lithium
|
119.2
|
|
847.6
|
|
Nemaska Lithium Cash
and cash equivalents not on a one-quarter lag
(3)
|
12.2
|
|
44.2
|
|
Adjusted cash and
deposits (Non-GAAP) (4)
|
$
131.4
|
|
$
891.8
|
|
_________________
|
|
1.
|
This unaudited
information of the combined company as of December 31, 2023 is for
illustrative purposes and was derived from the historical
consolidated financial information of Livent, Allkem and Nemaska
Lithium.
|
|
2.
|
On May 30, 2024, SDV
paid the outstanding principal balance of $47.0 million, a
prepayment fee of $0.9 million and accrued interest and
commitment fees of $1.3 million to repay the Project Financing
Facility in its entirety.
|
|
3.
|
The presentation
reflects NLI's actual balance at that date, not on a one-quarter
lag. This differs from Nemaska Lithium cash and cash equivalents
included in Arcadium Lithium's condensed consolidated balance sheet
as of September 30, 2024 of $42 million, representing NLI's
balance as of June 30, 2024 as we consolidate NLI on a one-quarter
lag. In the third quarter of 2024, the Company contributed cash of
$43.9 million to Nemaska Lithium which, due to one-quarter lag
reporting, is not yet recorded in our consolidation of Nemaska. The
balance is recorded to Other assets - noncurrent because the cash
is expected to be used by Nemaska primarily for capital
expenditures. IQ contemporaneously made an equal contribution in
the third quarter of 2024 which, due to one-quarter lag reporting,
is not recorded in our consolidation of Nemaska. On March 28,
2024, Nemaska Lithium received cash of $150 million related to
a second advance payment in connection with a customer supply
agreement repayable in equal quarterly installments beginning in
January 2027 and ending in October 2031.
|
|
4.
|
$124.6 million and
$176.9 million is required to be reserved or restricted at
September 30, 2024 and December 31, 2023, respectively, to provide
collateral or cash backing for guarantees primarily on Allkem debt
facilities, including $23.3 million and $62.1 million at
September 30, 2024 and December 31, 2023, respectively, in Other
non-current assets in our condensed consolidated balance
sheet.
|
|
ARCADIUM LITHIUM
PLC
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
|
|
(in
Millions)
|
September 30,
2024
|
|
December 31, 2023
(1)
|
|
Cash and cash
equivalents
|
$
137.9
|
|
$
237.6
|
|
Trade receivables, net
of allowance of approximately $0.1 in 2024 and
$0.3 in 2023
|
90.2
|
|
106.7
|
|
Inventories
|
389.6
|
|
217.5
|
|
Other current
assets
|
247.9
|
|
86.4
|
|
Total current
assets
|
865.6
|
|
648.2
|
|
Investments
|
40.0
|
|
34.8
|
|
Property, plant and
equipment, net of accumulated depreciation of
$345.5 in 2024 and $269.1 in 2023
|
7,249.2
|
|
2,237.1
|
|
Right of use assets -
operating leases, net
|
54.8
|
|
6.8
|
|
Goodwill
|
1,293.2
|
|
120.7
|
|
Other intangibles,
net
|
64.2
|
|
53.4
|
|
Deferred income
taxes
|
48.2
|
|
1.4
|
|
Other assets
|
389.4
|
|
127.7
|
|
Total assets
|
$
10,004.6
|
|
$
3,230.1
|
|
|
|
|
|
Total current
liabilities
|
735.3
|
|
268.6
|
|
Long-term
debt
|
436.0
|
|
299.6
|
|
Contract liabilities -
long-term
|
251.2
|
|
217.8
|
|
Other long-term
liabilities
|
1,448.2
|
|
160.3
|
|
Total Arcadium Lithium
plc shareholders' equity
|
6,296.1
|
|
1,784.2
|
|
Noncontrolling
interests
|
837.8
|
|
499.6
|
|
Total liabilities and
equity
|
$
10,004.6
|
|
$
3,230.1
|
|
___________________
|
|
1.
|
Represents the
financial position of predecessor Livent as of December 31, 2023,
which does not include the financial position of Allkem.
|
|
ARCADIUM LITHIUM
PLC
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
(Unaudited)
|
|
|
Nine Months Ended
September 30,
|
|
(in
Millions)
|
2024
|
|
2023 (1)
|
|
Cash (used in)/provided
by operating activities
|
$
(158.9)
|
|
$
261.8
|
|
Cash used in investing
activities
|
(129.8)
|
|
(315.5)
|
|
Cash provided by/(used
in) financing activities
|
203.1
|
|
(21.5)
|
|
Effect of exchange rate
changes on cash
|
(14.1)
|
|
(1.2)
|
|
Decrease in cash and
cash equivalents
|
(99.7)
|
|
(76.4)
|
|
Cash and cash
equivalents, beginning of period
|
237.6
|
|
189.0
|
|
Cash and cash
equivalents, end of period
|
$
137.9
|
|
$
112.6
|
|
___________________
|
|
1.
|
Represents the results
of predecessor Livent's operations for nine months ended September
30, 2023 which do not include the operations of Allkem.
|
|
ARCADIUM LITHIUM
PLC
LONG-TERM DEBT
(Unaudited)
|
|
|
Interest Rate
Percentage
|
|
Maturity
Date
|
|
September 30,
2024
|
|
December 31,
2023 (1)
|
|
(in
Millions)
|
SOFR
borrowings
|
|
Base rate
borrowings
|
|
|
|
|
|
|
|
|
|
Revolving Credit
Facility
|
6.70 %
|
|
8.75 %
|
|
|
|
2027
|
|
$
99.0
|
|
$
—
|
|
4.125% Convertible
Senior Notes due 2025
|
|
|
|
|
4.125 %
|
|
2025
|
|
245.8
|
|
245.8
|
|
Transaction costs -
2025 Notes
|
|
|
|
|
|
|
|
|
(1.2)
|
|
(2.4)
|
|
Nemaska - Prepayment
agreement - tranche 1 (2)
|
|
|
|
|
8.9 %
|
|
|
|
75.0
|
|
75.0
|
|
Discount - Prepayment
agreement
|
|
|
|
|
|
|
|
|
(16.2)
|
|
(19.8)
|
|
Nemaska - Prepayment
agreement - tranche 2 (2)
|
|
|
|
|
9.4 %
|
|
|
|
150.0
|
|
—
|
|
Discount - Prepayment
agreement
|
|
|
|
|
|
|
|
|
(47.5)
|
|
—
|
|
Nemaska -
Other
|
|
|
|
|
|
|
|
|
0.5
|
|
3.4
|
|
Debt assumed in Allkem
Livent Merger (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
Project Loan Facility -
Stage 2 of Olaroz Plant
|
|
|
|
|
2.61 %
|
|
2029
|
|
135.0
|
|
—
|
|
Affiliate Loans with
TTC
|
|
|
|
|
15.29 %
|
|
2030
|
|
81.5
|
|
—
|
|
Affiliate Loan with
TLP
|
|
|
|
|
10.34 %
|
|
2026
|
|
2.5
|
|
—
|
|
Total debt assumed in
Allkem Livent Merger
|
|
|
|
|
|
|
|
|
219.0
|
|
—
|
|
Subtotal long-term debt
(including current maturities)
|
|
|
|
|
|
|
|
|
724.4
|
|
302.0
|
|
Less current
maturities
|
|
|
|
|
|
|
|
|
(288.4)
|
|
(2.4)
|
|
Total long-term
debt
|
|
|
|
|
|
|
|
|
$
436.0
|
|
$
299.6
|
|
________________________
|
|
1.
|
Represents the
financial position of predecessor Livent as of December 31, 2023,
which does not include the financial position of Allkem.
|
|
2.
|
Represents advance
payments in connection with customer supply agreement which do not
have a contractual interest rate or bear any actual interest and
are repayable in equal quarterly installments beginning in January
2027 and ending in October 2031. Represents U.S. GAAP imputed
interest rate.
|
|
3.
|
On September 10, 2024,
SDJ paid the outstanding principal balance of $9.1 million to
repay Stage 1 of the Olaroz Plan Project Loan Facility in its
entirety. On May 30, 2024, SDV paid the outstanding principal
balance of $47.0 million, a prepayment fee of
$0.9 million and accrued interest and commitment fees of
$1.3 million to repay the Project Financing Facility in its
entirety.
|
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SOURCE Arcadium Lithium PLC
