Volume growth and higher cost
savings led to earnings
above the high end of guidance
range
Third Quarter 2024 Highlights
- Revenue of $1.07 billion, an
increase of 9 percent versus Q3 2023 and up 12 percent
organically1
- Consolidated GAAP net income of $66
million, up $70 million from a
net loss of $4 million in Q3
2023
- Adjusted EBITDA of $201 million,
up 15 percent versus Q3 2023
- Consolidated GAAP net income of $0.52 per diluted share, up $0.55 from a net loss of $0.03 per diluted share in Q3 2023
- Adjusted earnings per diluted share of $0.69, up 57 percent versus Q3 2023
- GAAP Cash from operations of $160
million with free cash flow of $132
million
Full-Year Outlook2
- Revenue outlook of $4.33 billion
to $4.44 billion, reflecting a 2
percent decline at the midpoint versus 2023; reduced $20 million for loss of contribution from Global
Specialty Solutions (GSS) business3
- Adjusted EBITDA outlook range of $885
million to $915 million,
reflecting an 8 percent decline at the midpoint versus 2023;
reduced $10 million for loss of
contribution from GSS business3
- Adjusted earnings per diluted share outlook range of
$3.16 to $3.52, reflecting a 12 percent decrease at the
midpoint versus 2023
- Increases target restructuring savings range to $125 million to $150
million of adjusted EBITDA net benefit
- Free cash flow outlook range unchanged at $400 million to $500
million
PHILADELPHIA, Oct. 29,
2024 /PRNewswire/ --
FMC Corporation (NYSE: FMC) today reported third quarter 2024
revenue of $1.07 billion, an increase
of 9 percent versus third quarter 2023 and up 12 percent
organically. On a GAAP basis, the company reported net income of
$0.52 per diluted share in the third
quarter, up from a net loss of $0.03
per diluted share in the third quarter 2023 driven by higher sales
and lower costs from restructuring actions as well as a lower
effective tax provision. Adjusted earnings were $0.69 per diluted share, an increase of 57
percent versus third quarter of 2023.
|
Third Quarter
Adjusted EPS versus Prior-Year Quarter
|
+25
cents
|
|
Adjusted
EBITDA
|
+18
cents
|
|
Interest
Expense
|
+4 cents
|
|
Depreciation &
Amortization
|
+2 cents
|
|
Minority
Interest
|
-1 cent
|
|
Taxes
|
+3
cents
|
|
Rounding
|
-1 cent
|
"We delivered revenue and earnings growth as market conditions
improved although at varying rates across the regions," said Pierre
Brondeau, FMC chairman and chief executive officer. "Strong volume
growth in Latin America and
North America more than offset
lower pricing, particularly in Brazil and Argentina which accounted for two-thirds of
the total company price decline. Despite suboptimal market
conditions, we saw increased demand for new products, specifically
fluindapyr-based fungicide products, which confirms the strength of
FMC's innovation pipeline."
Revenue growth in the quarter of 9 percent was driven by a 17
percent increase in volume, with some North America second half orders occurring
earlier than expected due to improved channel inventory levels.
Price was lower by 5 percent, driven primarily by Latin America due to challenging market
conditions in Brazil and
Argentina including delayed rains
and elevated channel inventory. In addition, the bankruptcy of a
large customer led FMC to offer additional incentives to replace
lost volumes and maintain market share. FX was a 3 percent headwind
to sales in the quarter. Diamides growth outperformed the
overall company, led by strong growth of Cyazypyr® based
products.
In North America, revenue
increased 48 percent year-over-year driven by strong volume growth
as diamide partners increased orders and branded sales grew with
improved channel inventory levels. EMEA revenue declined 7 percent
(down 6 percent organically) compared to third quarter 2023 almost
entirely due to expected registration losses. Sales in Asia declined 10 percent (down 12 percent
organically) due to volume declines, mainly in India, as well as lower pricing. In
Latin America, revenue improved 8
percent year-over-year (up 15 percent organically). Pricing
challenges in Brazil and
Argentina were more than offset by
volume growth, primarily in Brazil, including strong demand for
Onsuva® fungicide – a fluindapyr-based formulation.
Globally, Plant Health revenue improved 11 percent (up 14 percent
organically) versus prior year driven by growth in biologicals,
most prominently in Asia.
FMC
Revenue
|
Q3
2024
|
|
Total Revenue Change
(GAAP)
|
9 %
|
|
Less FX
Impact
|
(3) %
|
|
Organic1 Revenue Change
(Non-GAAP)
|
12 %
|
|
|
|
|
Third quarter adjusted EBITDA was $201
million, an increase of 15 percent versus the prior-year
period and above the top-end of our guidance range. Higher sales
volume, FX tailwinds and above-target restructuring benefits more
than offset lower pricing and the recognition of unabsorbed fixed
costs from lower manufacturing activity in prior periods.
Full-Year 2024 Outlook2,3
The company is confirming its full-year 2024 outlook for sales
and EBITDA and updating its outlook for adjusted EPS. The midpoints
for sales and EBITDA are adjusted for the imminent sale of the GSS
business, which is expected to close in early November. Full-year
revenue guidance has tightened to be in the range of $4.33 billion to $4.44
billion, representing a 2 percent decrease at the midpoint
versus 2023. Mid-single digit volume growth is expected to be more
than offset by price and, to a lesser extent, FX headwinds.
Full-year adjusted EBITDA range has been narrowed and is expected
to be $885 million to $915 million, an 8 percent decline at the
midpoint versus prior year. The range for 2024 adjusted earnings
per share is updated to be $3.16 to
$3.52 per diluted share, representing
a decrease of 12 percent year-over-year. The tax rate range is
narrowed to 13 to 15 percent, a 150 bps reduction versus prior
guidance at the midpoint. The company is maintaining its full-year
free cash flow guidance range of $400
million to $500 million.
Fourth Quarter Outlook2,3
The fourth quarter outlook has been adjusted to reflect the
imminent sale of the GSS business ($20
million loss in revenue and $10
million loss in EBITDA) and outperformance in Q3. Fourth
quarter revenue is now expected to be in the range of $1.30 billion to $1.41
billion, a 19 percent increase at the midpoint compared to
fourth quarter 2023. Adjusted EBITDA is forecasted to be in the
range of $321 million to $351 million, representing a 32 percent increase
at the midpoint versus fourth quarter 2023. FMC now expects
adjusted earnings per diluted share to be in the range of
$1.47 to $1.83 in the fourth quarter, which represents an
improvement of 54 percent at the midpoint versus fourth quarter
2023.
"We plan to deliver strong fourth quarter growth despite a shift
of some second half orders from the fourth quarter into the third
quarter, while many countries continue operating in challenging
conditions," said Brondeau. "Key fourth quarter earnings growth
drivers are robust sales of new products as well as additional cost
benefits from our restructuring program. We still expect further
earnings growth in 2025 from cost tailwinds as well as moderate top
line growth as market conditions improve."
|
Full Year 2024
Outlook2,3
|
Q4 2024
Outlook2,3
|
|
Revenue
|
$4.33 to $4.44
billion
|
$1.30 to $1.41
billion
|
|
Growth at midpoint
vs. 2023*
|
-2 %
|
19 %
|
|
Adjusted
EBITDA
|
$885 to $915
million
|
$321 to $351
million
|
|
Growth at midpoint
vs. 2023*
|
-8 %
|
32 %
|
|
Adjusted
EPS^
|
$3.16 to
$3.52
|
$1.47 to
$1.83
|
|
Growth at midpoint
vs. 2023*
|
-12 %
|
54 %
|
|
|
^Adjusted EPS
estimates assume 125.3 million diluted shares for Q4 and full
year.
|
|
*Percentages are
calculated using whole numbers. Minor differences may exist due to
rounding.
|
Supplemental Information
The company will post supplemental information on the web at
investors.fmc.com, including its webcast slides for tomorrow's
earnings call, definitions of non-GAAP terms and reconciliations of
non-GAAP figures to the most directly comparable GAAP term.
Always read and follow all label directions, restrictions and
precautions for use. Products listed here may not be registered for
sale or use in all states, countries or jurisdictions. FMC, the FMC
logo, Cyazypyr and Onsuva are trademarks of FMC Corporation or an
affiliate.
About FMC
FMC Corporation is a global agricultural sciences company
dedicated to helping growers produce food,
feed, fiber and fuel for an expanding world population
while adapting to a changing environment. FMC's innovative
crop protection solutions – including biologicals, crop nutrition,
digital and precision agriculture – enable growers, crop advisers
and turf and pest management professionals to address their
toughest challenges economically while protecting the environment.
With approximately 5,800 employees at more than 100 sites
worldwide, FMC is committed to discovering new herbicide,
insecticide and fungicide active ingredients, product formulations
and pioneering technologies that are consistently better for the
planet. Visit fmc.com to learn more and follow us
on LinkedIn®.
Statement under the Safe Harbor Provisions of the Private
Securities Litigation Reform Act of 1995: FMC and its
representatives may from time to time make written or oral
statements that are "forward-looking" and provide other than
historical information, including statements contained in this
press release, in FMC's other filings with the SEC, and in
presentations, reports or letters to FMC stockholders.
In some cases, FMC has identified these forward-looking
statements by such words or phrases as "outlook", "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 or phrases. Such forward-looking statements are based
on our current views and assumptions regarding future events,
future business conditions and the outlook for the company based on
currently available information. The forward-looking statements
involve known and unknown risks, uncertainties and other factors
that may cause actual results to be materially different from any
results, levels of activity, performance or achievements expressed
or implied by any forward-looking statement. These statements are
qualified by reference to the risk factors included in Part I, Item
1A of our Annual Report on Form 10-K for the year ended
December 31, 2023 (the "2023 Form
10-K"), the section captioned "Forward-Looking Information" in Part
II of the 2023 Form 10-K and to similar risk factors and cautionary
statements in all other reports and forms filed with the Securities
and Exchange Commission ("SEC"). We wish to caution readers not to
place undue reliance on any such forward-looking statements, which
speak only as of the date made. Forward-looking statements
are qualified in their entirety by the above cautionary
statement.
We specifically decline to undertake any obligation, and
specifically disclaims any duty, to publicly update or revise any
forward-looking statements that have been made to reflect events or
circumstances after the date of such statements or to reflect the
occurrence of anticipated or unanticipated events, except as may be
required by law.
This press release contains certain "non-GAAP financial
terms" which are defined on our website www.fmc.com/investors. Such
terms include adjusted EBITDA, adjusted earnings, free cash flow
and organic revenue growth. In addition, we have also provided on
our website reconciliations of non-GAAP terms to the most directly
comparable GAAP term.
- Organic revenue growth (non-GAAP) excludes the impact of
foreign currency changes.
- Although we provide forecasts for adjusted earnings per share,
adjusted EBITDA, and free cash flow (non-GAAP financial measures),
we are not able to forecast the most directly comparable measures
calculated and presented in accordance with GAAP. Certain elements
of the composition of the GAAP amounts are not predictable, making
it impractical for us to forecast. Such elements include, but are
not limited to, restructuring, acquisition charges, and
discontinued operations. As a result, no GAAP outlook is
provided.
- Adjusted for anticipated sale of Global Specialty Solutions
(GSS) business expected to close in early November 2024
|
FMC
CORPORATION
CONSOLIDATED
STATEMENTS OF INCOME (LOSS)
(Unaudited and in
millions, except per share amounts)
|
|
|
Three Months Ended September
30,
|
|
Nine Months Ended September 30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Revenue
|
$
1,065.4
|
|
$ 981.9
|
|
$
3,021.8
|
|
$
3,340.7
|
|
Costs of sales and
services
|
679.0
|
|
600.7
|
|
1,897.6
|
|
1,945.4
|
|
Gross margin
|
$ 386.4
|
|
$ 381.2
|
|
$
1,124.2
|
|
$
1,395.3
|
|
Selling, general and
administrative expenses
|
159.2
|
|
171.3
|
|
487.9
|
|
562.8
|
|
Research and
development expenses
|
69.0
|
|
80.9
|
|
205.8
|
|
247.0
|
|
Restructuring and other
charges (income)
|
22.6
|
|
28.2
|
|
158.6
|
|
48.0
|
|
Total costs and
expenses
|
$ 929.8
|
|
$ 881.1
|
|
$
2,749.9
|
|
$
2,803.2
|
|
Income from continuing operations before
non-operating pension and
postretirement charges (income), interest expense, net and income
taxes
|
$
135.6
|
|
$
100.8
|
|
$
271.9
|
|
$ 537.5
|
|
Non-operating pension
and postretirement charges (income)
|
4.4
|
|
4.2
|
|
12.9
|
|
13.4
|
|
Interest expense,
net
|
58.7
|
|
64.6
|
|
184.0
|
|
180.5
|
|
Income (loss) from continuing operations before
income taxes
|
$
72.5
|
|
$
32.0
|
|
$
75.0
|
|
$ 343.6
|
|
Provision (benefit) for
income taxes
|
6.0
|
|
27.4
|
|
(298.9)
|
|
77.7
|
|
Income (loss) from
continuing operations
|
$
66.5
|
|
$
4.6
|
|
$ 373.9
|
|
$ 265.9
|
|
Discontinued
operations, net of income taxes
|
(0.9)
|
|
(8.3)
|
|
(16.2)
|
|
(41.3)
|
|
Net income (loss)
|
$
65.6
|
|
$
(3.7)
|
|
$
357.7
|
|
$ 224.6
|
|
Less: Net income
(loss) attributable to noncontrolling interests
|
0.6
|
|
(0.2)
|
|
0.3
|
|
1.6
|
|
Net income (loss) attributable to FMC
stockholders
|
$
65.0
|
|
$
(3.5)
|
|
$
357.4
|
|
$ 223.0
|
|
Amounts attributable to FMC
stockholders:
|
|
|
|
|
|
|
|
|
Income (loss)
from continuing operations
|
$
65.9
|
|
$
4.8
|
|
$ 373.6
|
|
$ 264.3
|
|
Discontinued
operations, net of tax
|
(0.9)
|
|
(8.3)
|
|
(16.2)
|
|
(41.3)
|
|
Net income (loss)
|
$
65.0
|
|
$
(3.5)
|
|
$
357.4
|
|
$ 223.0
|
|
Basic earnings (loss) per common share attributable
to FMC stockholders:
|
|
|
|
|
|
|
|
|
Continuing
operations
|
$
0.53
|
|
$
0.04
|
|
$
2.98
|
|
$ 2.11
|
|
Discontinued
operations
|
(0.01)
|
|
(0.07)
|
|
(0.13)
|
|
(0.33)
|
|
Basic earnings per common
share
|
$
0.52
|
|
$
(0.03)
|
|
$
2.85
|
|
$
1.78
|
|
Average number of
shares outstanding used in basic earnings per share
computations
|
125.0
|
|
124.9
|
|
125.0
|
|
125.1
|
|
Diluted earnings (loss) per common share attributable
to FMC stockholders:
|
|
|
|
|
|
|
|
|
Continuing
operations
|
$
0.53
|
|
$
0.04
|
|
$
2.98
|
|
$ 2.10
|
|
Discontinued
operations
|
(0.01)
|
|
(0.07)
|
|
(0.13)
|
|
(0.33)
|
|
Diluted earnings per common
share
|
$
0.52
|
|
$
(0.03)
|
|
$
2.85
|
|
$
1.77
|
|
Average number of
shares outstanding used in diluted earnings per share
computations
|
125.5
|
|
125.3
|
|
125.3
|
|
125.7
|
|
|
|
|
|
|
|
|
|
Other Data:
|
|
|
|
|
|
|
|
|
Capital additions and
other investing activities
|
$
13.7
|
|
$
35.5
|
|
$
51.5
|
|
$ 116.6
|
|
Depreciation and
amortization expense
|
43.2
|
|
45.6
|
|
133.2
|
|
138.4
|
|
FMC
CORPORATION
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES
|
|
|
RECONCILIATION OF
NET INCOME (LOSS) ATTRIBUTABLE TO FMC STOCKHOLDERS (GAAP) TO
ADJUSTED AFTER-TAX EARNINGS FROM CONTINUING OPERATIONS,
ATTRIBUTABLE TO FMC STOCKHOLDERS (NON-GAAP)
(Unaudited and in
millions, except per share amounts)
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended September 30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Net income (loss)
attributable to FMC stockholders (GAAP)
|
$
65.0
|
|
$ (3.5)
|
|
$
357.4
|
|
$
223.0
|
|
Corporate special
charges (income):
|
|
|
|
|
|
|
|
|
Restructuring and
other charges (income) (a)
|
22.6
|
|
28.2
|
|
158.6
|
|
48.0
|
|
Non-operating pension
and postretirement charges (income) (b)
|
4.4
|
|
4.2
|
|
12.9
|
|
13.4
|
|
Income tax expense
(benefit) on Corporate special charges (income)
(c)
|
(5.0)
|
|
(4.2)
|
|
(28.4)
|
|
(8.5)
|
|
Adjustment for
noncontrolling interest, net of tax on Corporate special charges
(income)
|
—
|
|
0.4
|
|
—
|
|
(1.6)
|
|
Discontinued operations
attributable to FMC stockholders, net of income taxes
(d)
|
0.9
|
|
8.3
|
|
16.2
|
|
41.3
|
|
Tax adjustment
(e)
|
(0.7)
|
|
22.0
|
|
(305.0)
|
|
25.5
|
|
Adjusted after-tax earnings from continuing
operations attributable
to FMC stockholders (Non-GAAP) (1)
|
$
87.2
|
|
$
55.4
|
|
$
211.7
|
|
$
341.1
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
common share (GAAP)
|
$
0.52
|
|
$
(0.03)
|
|
$ 2.85
|
|
$
1.77
|
|
Corporate special
charges (income) per diluted share, before tax:
|
|
|
|
|
|
|
|
|
Restructuring and
other charges (income)
|
0.18
|
|
0.22
|
|
1.27
|
|
0.39
|
|
Non-operating pension
and postretirement charges (income)
|
0.03
|
|
0.03
|
|
0.10
|
|
0.11
|
|
Income tax expense
(benefit) on Corporate special charges (income), per diluted
share
|
(0.04)
|
|
(0.03)
|
|
(0.23)
|
|
(0.07)
|
|
Adjustment for
noncontrolling interest, net of tax on Corporate special charges
(income) per diluted share
|
—
|
|
—
|
|
—
|
|
(0.02)
|
|
Discontinued operations
attributable to FMC stockholders, net of income taxes per diluted
share
|
0.01
|
|
0.07
|
|
0.13
|
|
0.33
|
|
Tax adjustments per
diluted share
|
(0.01)
|
|
0.18
|
|
(2.43)
|
|
0.20
|
|
Diluted adjusted after-tax earnings from continuing
operations per
share, attributable to FMC stockholders
(Non-GAAP)
|
$
0.69
|
|
$
0.44
|
|
$ 1.69
|
|
$
2.71
|
|
|
|
|
|
|
|
|
|
Average number of
shares outstanding used in diluted adjusted after-tax
earnings from continuing operations per share
computations
|
125.5
|
|
125.3
|
|
125.3
|
|
125.7
|
____________________
|
(1)
|
Referred to as Adjusted
earnings. The Company believes that Adjusted earnings, a Non-GAAP
financial measure, and its presentation on a per share basis
provides useful information about the Company's operating results
to management, investors, and securities analysts. Adjusted
earnings excludes the effects of corporate special charges,
tax-related adjustments and the results of our discontinued
operations. 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.
|
|
(a)
|
Three Months Ended
September 30, 2024:
|
|
Restructuring and other
charges (income) includes restructuring charges of $15.7 million
primarily related to the previously announced global restructuring
plan, referred to as "Project Focus." Charges incurred related to
Project Focus consist of $7.0 million of severance and employee
separation costs, $5.4 million of professional service provider
costs and other miscellaneous charges, and accelerated depreciation
of $6.2 million on assets identified for disposal in connection
with the restructuring initiative. These Project Focus
restructuring charges were partially offset by a $3.1 million gain
recognized on the disposition of a previously closed manufacturing
site. Other charges (income) of $6.9 million is comprised of $4.8
million of charges associated with our environmental sites and $2.1
million of other miscellaneous charges.
|
|
Three Months Ended
September 30, 2023:
|
|
Restructuring and other
charges (income) includes $2.5 million of employee separation
and $0.4 million of other exit costs incurred as part of
various restructuring initiatives. Other charges (income) of $25.3
million is comprised of $11.9 million in charges resulting
from the third quarter acquisition of in-process research and
development assets that do not meet the criteria for
capitalization. Additionally, we incurred $4.9 million in
losses related to the devaluation of the Argentine peso driven by
government actions, $4.5 million of charges associated with our
environmental sites, and $4.0 million of other miscellaneous
charges.
|
|
Nine Months Ended
September 30, 2024:
|
|
Restructuring and other
charges (income) includes restructuring charges of $133.2 million
primarily related Project Focus. Charges incurred in connection
with Project Focus consist of $53.3 million of non-cash asset
write off charges resulting from the contract termination with one
of our third-party manufacturers, $44.5 million of severance and
employee separation costs, including costs associated with the
previously announced CEO transition, $24.1 million of
professional service provider costs and other miscellaneous
charges, and accelerated depreciation of $14.4 million on
assets identified for disposal in connection with the restructuring
initiative. These Project Focus restructuring charges were
partially offset by a $3.1 million gain recognized on the
disposition of a previously closed manufacturing site. Other
charges (income) of $25.4 million is comprised of $13.8 million of
charges associated with our environmental sites and $11.6 million
of other miscellaneous charges.
|
|
Nine Months Ended
September 30, 2023:
|
|
Restructuring and other
charges (income) includes $6.8 million of employee separation
costs as well as $1.9 million of asset impairment and
other charges related to various global restructuring initiatives.
These restructuring charges were offset by a $5.8 million gain
recognized on the disposition of land related to a previously
closed manufacturing facility. Other charges (income) of
$45.1 million, is comprised of $11.9 million in charges
resulting from the third quarter acquisition of in-process research
and development assets that do not meet the criteria for
capitalization. We recognized a $6.9 million remeasurement charge
triggered during the period as a result of the significant currency
depreciation of the Pakistani Rupee. On January 25, 2023, the
Pakistani Rupee experienced its largest single day drop against the
US dollar in over two decades following the removal of the USD-PKR
exchange cap in place on the country's currency. Additionally, we
incurred $4.9 million in losses related to the devaluation of the
Argentine peso driven by government actions during the period,
$14.3 million of charges associated with our environmental
sites, and $7.1 million of other miscellaneous charges.
|
|
(b)
|
Our non-operating
pension and postretirement charges (income) are defined as those
costs (benefits) related to interest, expected return on plan
assets, amortized actuarial gains and losses and the impacts of any
plan curtailments or settlements. These are excluded from our
Adjusted Earnings and are primarily related to changes in pension
plan assets and liabilities which are tied to financial market
performance and we consider these costs to be outside our
operational performance. We continue to include the service cost
and amortization of prior service cost in our Adjusted Earnings
results noted above. These elements reflect the current year
operating costs to our businesses for the employment benefits
provided to active
employees.
|
|
(c)
|
The income tax expense
(benefit) on Corporate special charges (income) is determined using
the applicable rates in the taxing jurisdictions in which the
corporate 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.
|
|
(d)
|
Discontinued operations
includes provisions, net of recoveries, for environmental
liabilities and legal reserves and expenses related to previously
discontinued operations and retained liabilities. Discontinued
operations for the nine months ended September 30, 2024 includes
cash proceeds, net of fees of $18.0 million received as the result
of an insurance settlement for retained legal reserves.
|
|
(e)
|
We exclude the GAAP tax
provision, including discrete items, from the Non-GAAP measure of
income, and include a Non-GAAP tax provision based upon the
projected annual Non-GAAP effective tax rate. The GAAP tax
provision includes certain discrete tax items including, but are
not limited to: income tax expenses or benefits that are not
related to continuing 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
interim 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 continuing operating results thereby
providing investors with useful supplemental information about
FMC's operational performance.
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
(in Millions)
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Non-GAAP tax adjustments
|
|
|
|
|
|
|
|
|
Revisions to valuation
allowances of historical deferred tax assets
|
$ —
|
|
$
—
|
|
$
(1.6)
|
|
$
—
|
|
Foreign currency
remeasurement and other discrete items
|
(0.7)
|
|
22.0
|
|
(303.4)
|
|
25.5
|
|
Total Non-GAAP tax adjustments
|
$ (0.7)
|
|
$ 22.0
|
|
$
(305.0)
|
|
$ 25.5
|
|
|
In connection with our
plans to establish a global technology and innovation center in
Switzerland, we initiated changes to our corporate entity
structure, including intra-entity transfers of certain intellectual
property, during the second quarter of 2024. As a result, we
recorded a net tax benefit of approximately $300 million in
the nine months ended September 30, 2024. This benefit, net of
valuation allowance, was primarily a result of the recognition of a
step-up in tax basis to the fair value of the transferred
intellectual property by the Company's Swiss subsidiary. In
addition, local tax impacts associated with the disposition of the
transferred intellectual property were recorded as well as an
increase in our valuation allowance associated with Swiss
nonrefundable tax credits as a result of indirect effects of the
transferred intellectual property.
|
|
RECONCILIATION OF
NET INCOME (LOSS) (GAAP) TO ADJUSTED EARNINGS FROM CONTINUING
OPERATIONS, BEFORE INTEREST, INCOME TAXES, DEPRECIATION AND
AMORTIZATION,
AND NONCONTROLLING INTERESTS (NON-GAAP)
(Unaudited, in
millions)
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended September 30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Net income (loss)
(GAAP)
|
$ 65.6
|
|
$ (3.7)
|
|
$
357.7
|
|
$
224.6
|
|
Restructuring and
other charges (income)
|
22.6
|
|
28.2
|
|
158.6
|
|
48.0
|
|
Non-operating pension
and postretirement charges (income)
|
4.4
|
|
4.2
|
|
12.9
|
|
13.4
|
|
Discontinued
operations, net of income taxes
|
0.9
|
|
8.3
|
|
16.2
|
|
41.3
|
|
Interest expense,
net
|
58.7
|
|
64.6
|
|
184.0
|
|
180.5
|
|
Depreciation and
amortization
|
43.2
|
|
45.6
|
|
133.2
|
|
138.4
|
|
Provision (benefit)
for income taxes
|
6.0
|
|
27.4
|
|
(298.9)
|
|
77.7
|
|
Adjusted earnings from continuing operations, before
interest, income
taxes, depreciation and amortization, and noncontrolling interests
(Non-GAAP) (1)
|
$
201.4
|
|
$
174.6
|
|
$
563.7
|
|
$
723.9
|
___________________
|
(1)
|
Referred to as Adjusted
EBITDA. Defined as operating profit excluding restructuring and
other charges (income) and depreciation and amortization
expense.
|
|
RECONCILIATION OF
CASH PROVIDED (REQUIRED) BY OPERATING ACTIVITIES OF
CONTINUING OPERATIONS (GAAP) TO FREE CASH FLOW
(NON-GAAP)
(Unaudited, in
millions)
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended September 30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Cash provided
(required) by operating activities of continuing operations
(GAAP)
|
$
159.5
|
|
$
101.6
|
|
$
308.8
|
|
$ (618.2)
|
|
Project Focus transformation spending
(1)
|
26.4
|
|
—
|
|
89.9
|
|
—
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
(15.7)
|
|
(33.0)
|
|
(46.3)
|
|
(108.8)
|
|
Other investing
activities
|
2.0
|
|
(2.5)
|
|
(5.2)
|
|
(7.8)
|
|
Capital additions and other investing
activities
|
$
(13.7)
|
|
$
(35.5)
|
|
$
(51.5)
|
|
$
(116.6)
|
|
|
|
|
|
|
|
|
|
Cash provided
(required) by operating activities of discontinued
operations
|
(18.3)
|
|
(34.1)
|
|
(37.2)
|
|
(61.0)
|
|
Project Focus
transformation spending (1)
|
(26.4)
|
|
—
|
|
(89.9)
|
|
—
|
|
Proceeds from Land
Disposition
|
—
|
|
—
|
|
—
|
|
5.8
|
|
Legacy and transformation
|
$
(44.7)
|
|
$
(34.1)
|
|
$
(127.1)
|
|
$
(55.2)
|
|
|
|
|
|
|
|
|
|
Divestiture transaction costs
(2)
|
$
4.6
|
|
$
—
|
|
$
4.6
|
|
$
—
|
|
Free cash flow
(Non-GAAP)(3)
|
$
132.1
|
|
$ 32.0
|
|
$
224.7
|
|
$
(790.0)
|
___________________
|
(1)
|
Represents cash
payments made in connection with our Project Focus transformation
program. This spending is reclassified within this reconciliation
to be reflected in the "Legacy and transformation" category. The
presentation has no impact on our cash provided (required) by
operating activities of continuing operations (GAAP) or free cash
flow (non-GAAP).
|
|
(2)
|
Represents
transactional-related costs such as legal and professional
third-party fees associated with the anticipated sale of our Global
Specialty Solutions ("GSS") business. Proceeds from the sale of our
GSS business anticipated for the fourth quarter 2024 will be
excluded from free cash flow when received. Therefore, we have also
excluded the related transaction costs from free cash
flow.
|
|
(3)
|
Free cash flow is
defined as cash provided (required) by operating activities of
continuing operations (GAAP) adjusted for spending for capital
additions and other investing activities as well as legacy and
transformation spending and divestiture transaction costs
associated with the anticipated sale of our GSS business. As noted
above, Project Focus transformation spending is reclassified into
"Legacy and transformation" for presentation purposes. We
believe that this Non-GAAP financial measure provides a useful
basis for investors and securities analysts about the cash
generated by routine business operations, including capital
expenditures, in addition to assessing our ability to repay debt,
fund acquisitions and return capital to shareholders through share
repurchases and dividends. Our use of free cash flow has
limitations as an analytical tool and should not be considered in
isolation or as a substitute for an analysis of our results under
U.S. GAAP.
|
|
RECONCILIATION OF
REVENUE CHANGE (GAAP) TO
ORGANIC REVENUE
CHANGE (NON-GAAP) (1)
(Unaudited)
|
|
|
Three Months Ended
September 30, 2024 vs. 2023
|
|
Nine Months Ended
September 30, 2024 vs. 2023
|
|
Total Revenue Change (GAAP)
|
9 %
|
|
(10) %
|
|
Less: Foreign Currency
Impact
|
(3) %
|
|
(2) %
|
|
Organic Revenue Change
(Non-GAAP)
|
12 %
|
|
(8) %
|
___________________
|
(1)
|
We believe organic
revenue growth (non-GAAP) provides management and investors with
useful supplemental information regarding our ongoing revenue
performance and trends by presenting revenue growth excluding the
impact of fluctuations in foreign exchange rates.
|
|
RECONCILIATION OF
NET INCOME (LOSS) ATTRIBUTABLE TO
FMC STOCKHOLDERS
(GAAP) TO RETURN ON INVESTED CAPITAL ("ROIC")
NUMERATOR
(NON-GAAP) AND ROIC (USING NON-GAAP NUMERATOR)(1)
(Unaudited)
|
|
|
Twelve Months Ended
|
|
|
|
September 30, 2024
|
|
|
|
Net income (loss)
attributable to FMC stockholders (GAAP)
|
$
1,455.9
|
|
|
|
Interest expense, net,
net of income taxes
|
206.1
|
|
|
|
Corporate special
charges (income)
|
366.4
|
|
|
|
Income tax expense
(benefit) on Corporate special charges (income)
|
(52.7)
|
|
|
|
Discontinued
operations attributable to FMC stockholders, net of income
taxes
|
73.4
|
|
|
|
Tax
adjustments
|
(1,497.9)
|
|
|
|
ROIC numerator
(Non-GAAP)
|
$
551.2
|
|
|
|
|
|
|
|
September 30, 2024
|
|
September 30, 2023
|
|
Total debt
|
$
4,070.0
|
|
$
4,115.7
|
|
Total FMC
stockholders' equity
|
4,607.8
|
|
3,290.9
|
|
Total debt and FMC
stockholders' equity (GAAP)
|
$
8,677.8
|
|
$
7,406.6
|
|
ROIC denominator (2 yr
average total debt and FMC stockholders' equity)
|
$
8,042.2
|
|
|
|
|
|
|
|
ROIC (using Net income
(loss) attributable to FMC stockholders (GAAP) as
numerator)
|
18.10 %
|
|
|
|
ROIC (using Non-GAAP
numerator)
|
6.85 %
|
|
|
___________________
|
(1)
|
We believe ROIC
(non-GAAP) provides management and investors with useful
supplemental information regarding our utilization of capital
provided by both equity and debt as well as our working capital and
free cash flow management.
|
|
FMC
CORPORATION
CONDENSED
CONSOLIDATED BALANCE SHEETS
(Unaudited, in
millions)
|
|
|
September 30, 2024
|
|
December 31, 2023
|
|
Cash and cash
equivalents
|
$
416.7
|
|
$
302.4
|
|
Trade receivables, net
of allowance of $41.5 in 2024 and $29.1 in 2023
|
2,890.5
|
|
2,703.2
|
|
Inventories
|
1,392.1
|
|
1,724.6
|
|
Prepaid and other
current assets
|
616.2
|
|
398.9
|
|
Total current assets
|
$
5,315.5
|
|
$
5,129.1
|
|
Property, plant and
equipment, net
|
869.4
|
|
892.5
|
|
Goodwill
|
1,517.8
|
|
1,593.6
|
|
Other intangibles,
net
|
2,421.7
|
|
2,465.1
|
|
Deferred income
taxes
|
1,621.1
|
|
1,336.6
|
|
Other long-term
assets
|
473.2
|
|
509.3
|
|
Total assets
|
$
12,218.7
|
|
$
11,926.2
|
|
Short-term debt and
current portion of long-term debt
|
$
1,043.2
|
|
$
934.0
|
|
Accounts payable, trade
and other
|
802.9
|
|
602.4
|
|
Advanced payments from
customers
|
0.4
|
|
482.1
|
|
Accrued and other
liabilities
|
739.3
|
|
684.8
|
|
Accrued customer
rebates
|
835.1
|
|
480.9
|
|
Guarantees of vendor
financing
|
77.9
|
|
69.6
|
|
Accrued pensions and
other postretirement benefits, current
|
6.4
|
|
6.4
|
|
Income taxes
|
83.2
|
|
124.4
|
|
Total current liabilities
|
$
3,588.4
|
|
$
3,384.6
|
|
Long-term debt, less
current portion
|
$
3,026.8
|
|
$
3,023.6
|
|
Long-term
liabilities
|
973.4
|
|
1,084.6
|
|
Equity
|
4,630.1
|
|
4,433.4
|
|
Total liabilities and equity
|
$
12,218.7
|
|
$
11,926.2
|
|
FMC
CORPORATION
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in
millions)
|
|
|
Nine Months Ended September 30,
|
|
2024
|
|
2023
|
|
Cash provided
(required) by operating activities of continuing
operations
|
$
308.8
|
|
$
(618.2)
|
|
|
|
|
|
Cash provided
(required) by operating activities of discontinued
operations
|
(37.2)
|
|
(61.0)
|
|
|
|
|
|
Cash provided
(required) by investing activities of continuing
operations
|
(55.9)
|
|
(126.8)
|
|
|
|
|
|
Cash provided
(required) by financing activities of continuing
operations
|
(101.5)
|
|
562.1
|
|
|
|
|
|
Effect of exchange rate
changes on cash
|
0.1
|
|
(4.3)
|
|
|
|
|
|
Increase (decrease) in
cash and cash equivalents
|
$
114.3
|
|
$
(248.2)
|
|
|
|
|
|
Cash and cash
equivalents, beginning of period
|
$
302.4
|
|
$
572.0
|
|
|
|
|
|
Cash and cash equivalents, end of
period
|
$
416.7
|
|
$
323.8
|
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SOURCE FMC Corporation
