Orion S.A. (NYSE: OEC), a specialty chemical company, today
announced financial results for period ended September 30, 2024 as
follows:
Third Quarter 2024
Highlights
- Net sales of $463.4 million, down $2.8 million year over
year
- Net loss of $20.2 million, which includes a $42.5 million
impact from the loss due to misappropriation of assets, net of
income tax benefit, down $46.4 million year over year
- Diluted Loss per share of ($0.35), which includes impact due
to misappropriation of assets of ($0.72), down $0.79 year over
year
- Adjusted EBITDA1 of $80.1 million, up 4% year over
year
- Adjusted Diluted EPS1 of $0.47, down $0.02 year over
year
Nine Months 2024
Highlights
- Net sales of $1,443.3 million, up $17.6 million year over
year
- Net income of $27.0 million, which includes a $42.5 million
impact from the loss due to misappropriation of assets, net of
income tax benefit, down $71.6 million year over year
- Diluted EPS of $0.46, which includes impact due to
misappropriation of assets of ($0.72), down $1.19 year over
year
- Adjusted EBITDA1 of $240.5 million, down 10% year over
year
- Adjusted Diluted EPS1 of $1.40, down $0.36 year over
year
1 The reconciliations of Non-U.S. GAAP (“GAAP”) measures to the
respective most comparable GAAP measures are provided in the
section titled Reconciliation of Non-GAAP Financial Measures
below.
“While our net income was a loss due to the fraud event, Orion
delivered strong third quarter Adjusted EBITDA, even with Rubber
segment volumes being down 11% versus prior year. Rubber volumes
have constrained operating results in 2024, due to the high level
of tire imports into Western markets. We addressed this as part of
our commercial strategy for 2025. As a result, we expect volume
growth, even in a flat market, while maintaining Rubber segment
gross profit per ton. Increased tariffs and/or economic improvement
represent potential upsides. Expected operational improvements,
productivity initiatives and strong cost management, should also
contribute,” stated Corning Painter, Orion’s Chief Executive
Officer. “I believe the company is in an excellent position to
deliver higher Adjusted EBITDA next year regardless of the global
economy’s trajectory.”
“As we complete our growth investments, we expect much stronger
free cash flow in 2025 and 2026,” continued Painter. “With
conviction around this dynamic, and as conveyed last quarter, we
continue to see share repurchases as an appropriate allocation of
excess capital. We re-initiated buyback activity during the third
quarter, repurchasing approximately $11 million of stock, or more
than 1% of our shares outstanding.”
Jeff Glajch, Orion’s Chief Financial Officer added, “this
quarter’s GAAP Net loss of $20 million includes $43 million of net
loss due to the fraud. This compares to a net income of $26 million
in the third quarter of 2023. The independent investigation is
complete and remediation measures have been implemented.”
“On an operating basis, before the impact from the
misappropriation of assets,” continued Glajch, “our 4% Adjusted
EBITDA improvement was achieved despite the aforementioned lower
Rubber segment volumes. These results illustrate the durable and
resilient nature of our business as we close out 2024. The Adjusted
EBITDA improvement was a function of better Specialty segment
regional mix, better operating performance and formula-based
pricing, which more than offset lower Rubber volumes. For the
balance of 2024, considering macro signals and lower forecasts from
customers including key tiremakers about extended year-end
production shutdowns, we are modifying our full year guidance.”
Third Quarter 2024 Overview:
(In millions, except volume and EPS
data)
Q3 2024
Q3 2023
Y/Y Change
Y/Y Change in %
Volume (kmt)
225.2
245.2
(20.0)
(8.2)%
Net sales
463.4
466.2
(2.8)
(0.6)%
Gross profit
107.5
110.2
(2.7)
(2.5)%
Income (loss) from operations
(15.3)
45.7
(61.0)
(133.5)%
Net income (loss)
(20.2)
26.2
(46.4)
(177.1)%
Adjusted net income(1)
27.4
28.9
(1.5)
(5.2)%
Adjusted EBITDA(1)
80.1
77.3
2.8
3.6%
Basic Earnings (loss) per share
(0.35)
0.45
(0.80)
(177.8)%
Diluted Earnings (loss) per share
(0.35)
0.44
(0.79)
(179.5)%
Adjusted Diluted EPS(1)
0.47
0.49
(0.02)
(4.1)%
(1)
The reconciliations of Non-U.S. GAAP
(“GAAP”) measures to the respective most comparable GAAP measures
are provided in the section titled Reconciliation of Non-GAAP
Financial Measures below.
Volume decreased by 20.0 kmt year over year due to lower volume
in the Americas and Asia Pacific (“APAC”) regions, those were
partially offset by higher volumes in Europe, the Middle East, and
African (“EMEA”) region. Net sales decreased by $2.8 million, or
0.6%, year over year, driven primarily by lower volume, partially
offset by the favorable pass-through effect of oil prices. Gross
profit decreased by $2.7 million, or 2.5%, to $107.5 million year
over year. The decrease was driven primarily by higher fixed
costs.
During the third quarter of 2024, we were the target of a
criminal scheme that resulted in multiple fraudulently induced
outbound wire transfers to accounts controlled by unknown third
parties. These losses and professional fees incurred in connection
with related third-party investigations aggregated to $60.7
million.
Income (loss) from operations decreased by $61.0 million, or
133.5%, to $15.3 million year over year. The decrease was driven
primarily by the Loss due to misappropriation of assets, net.
Adjusted EBITDA increased by $2.8 million, or 3.6%, to $80.1
million year over year. The increase was driven by favorable
pricing, partially offset by higher fixed costs and lower
cogeneration.
Quarterly Business Segment Results
SPECIALTY CARBON BLACK
(In millions, except volume)
Q3 2024
Q3 2023
Y/Y Change
Y/Y Change in %
Volume (kmt)
59.7
59.9
(0.2)
(0.3)%
Net sales
162.5
150.4
12.1
8.0%
Gross profit
36.6
38.6
(2.0)
(5.2)%
Adjusted EBITDA
27.2
26.1
1.1
4.2%
Specialty Carbon Black segment volume declined by 0.2 kmt, or
0.3%, year over year. Net sales increased by $12.1 million, or
8.0%, to $162.5 million year over year, primarily due to improved
product mix in key applications, partially offset by lower volume.
Adjusted EBITDA increased by $1.1 million, or 4.2%, to $27.2
million year over year. The increase was primarily due to improved
product mix in key applications, partially offset by higher fixed
cost and lower cogeneration.
RUBBER CARBON BLACK
(In millions, except volume)
Q3 2024
Q3 2023
Y/Y Change
Y/Y Change in %
Volume (kmt)
165.5
185.3
(19.8)
(10.7)%
Net sales
300.9
315.8
(14.9)
(4.7)%
Gross profit
70.9
71.6
(0.7)
(1.0)%
Adjusted EBITDA
52.9
51.2
1.7
3.3%
Rubber Carbon Black segment volume declined by 19.8 kmt, or
10.7%, year over year due to lower demand in the Americas and APAC
regions. Net sales declined by $14.9 million, or 4.7%, to $300.9
million year over year, primarily due to lower volume, partially
offset by favorable price. Adjusted EBITDA increased by $1.7
million, or 3.3%, to $52.9 million year over year, driven primarily
by favorable price, partially offset by lower volume.
Nine Months 2024
Highlights
Nine Months Ended September
30,
Year-Over Year
(In millions, except volume and EPS
data)
2024
2023
Delta
Volume (kmt)
706.7
706.0
0.7
0.1%
Net sales
1,443.3
1,425.7
17.6
1.2%
Gross profit
339.5
363.7
(24.2)
(6.7)%
Income from operations
79.1
178.1
(99.0)
(55.6)%
Net income
27.0
98.6
(71.6)
(72.6)%
Adjusted net income(1)
82.7
105.5
(22.8)
(21.6)%
Adjusted EBITDA(1)
240.5
265.7
(25.2)
(9.5)%
Basic EPS
0.46
1.66
(1.20)
(72.3)%
Diluted EPS
0.46
1.65
(1.19)
(72.1)%
Adjusted Diluted EPS(1)
1.40
1.76
(0.36)
(20.5)%
(1)
The reconciliations of these non-GAAP
measures to the respective most comparable GAAP measures are
provided in the section titled Reconciliation of non-GAAP Financial
Measures.
Volume increased by 0.7 kmt to 706.7 kmt compared to the nine
months ended September 30, 2023, primarily due to higher Specialty
Carbon Black segment volume, partially offset by lower Rubber
Carbon Black segment volume. Net sales increased by $17.6 million,
or 1.2%, in the nine months ended September 30, 2024 to $1,443.3
million year over year, primarily driven by broad-based recovery in
Specialty Carbon Black segment across all regions and Rubber Carbon
Black price improvements, partially offset by unfavorable foreign
currency translation impact and lower Rubber Carbon Black segment
volume. Gross profit decreased by $24.2 million, or 6.7%, to $339.5
million year over year. The decrease was primarily driven by higher
fixed costs, unfavorable impact from pass-through of raw material
costs and lower cogeneration.
During the third quarter of 2024, we were the target of a
criminal scheme that resulted in multiple fraudulently induced
outbound wire transfers to accounts controlled by unknown third
parties. These losses and professional fees incurred in connection
with related third-party investigations aggregated to $60.7
million.
Income from operations decreased by $99.0 million, or 55.6%, to
$79.1 million year over year. The decrease was driven primarily by
the Loss due to misappropriation of assets, net. Adjusted EBITDA
decreased by $25.2 million, or 9.5%, from $265.7 million in the
nine months ended September 30, 2023 to $240.5 million in the nine
months ended September 30, 2024. The decrease was primarily due to
higher fixed costs, lower Rubber Carbon Black segment volume and
lower cogeneration. Those were partially offset by higher volume in
Specialty Carbon Black segment.
Nine Months Business Segment
Results
SPECIALTY CARBON BLACK
Nine Months Ended September
30,
(In millions, except volume)
2024
2023
Delta
Volume (kmt)
185.9
166.5
19.4
11.7%
Net sales
498.9
461.9
37.0
8.0%
Gross profit
117.8
133.3
(15.5)
(11.6)%
Adjusted EBITDA
83.1
93.3
(10.2)
(10.9)%
Volumes increased by 19.4 kmt, or 11.7%, year over year to 185.9
kmt for the nine months ended September 30, 2024, primarily due to
demand recovery across all regions and end markets. Net sales
increased by $37.0 million, or 8.0%, year over year to $498.9
million for the nine months ended September 30, 2024, primarily due
to higher volume across all regions. Adjusted EBITDA decreased by
$10.2 million, or 10.9%, year over year to $83.1 million for the
nine months ended September 30, 2024. The decrease was primarily
due to higher fixed costs and lower cogeneration. Those were
partially offset by higher volume.
RUBBER CARBON BLACK
Nine Months Ended September
30,
(In millions, except volume)
2024
2023
Delta
Volume (kmt)
520.8
539.5
(18.7)
(3.5)%
Net sales
944.4
963.8
(19.4)
(2.0)%
Gross profit
221.7
230.4
(8.7)
(3.8)%
Adjusted EBITDA
157.4
172.4
(15.0)
(8.7)%
Volume decreased by 18.7 kmt, or 3.5%, year over year to 520.8
kmt, for the nine months ended September 30, 2024, primarily due to
lower demand in the Americas and APAC regions. Net sales decreased
by $19.4 million, or 2.0%, year over year to $944.4 million for the
nine months ended September 30, 2024, primarily due to lower
volume, partially offset by favorable price. Adjusted EBITDA
decreased by $15.0 million, or 8.7%, to $157.4 million for the nine
months ended September 30, 2024, driven primarily by lower demand
in Americas and APAC regions, lower cogeneration and higher fixed
costs. Those were partially offset by favorable price.
Debt
As of September 30, 2024, the company’s net debt was $920.5
million, up $139.8 million from the end of 2023, and our net debt
to adjusted EBITDA ratio was 3.00 times.
Outlook
“We are revising our 2024 guidance for the year to an Adjusted
EBITDA range of $305 million to $315 million and an Adjusted
Diluted EPS range of $1.65 per share to $1.75 per share. Free cash
flow is now likely to be negative $35 million this year, before
impact from the fraud event and its related tax benefit.” Mr.
Painter concluded.
Conference Call
As previously announced, Orion will hold a conference call
tomorrow, Friday, November 8, 2024, at 8:30 a.m. (EDT). The dial-in
details for the live conference call are as follows:
U.S. Toll Free:
1-877-407-4018
International:
1-201-689-8471
A replay of the conference call may be accessed by phone at the
following numbers to Friday, November 22, 2024:
U.S. Toll Free:
1-844-512-2921
International:
1-412-317-6671
Conference ID:
13748613
Additionally, an archived webcast of the conference call will be
available on the investor section of the company’s website at
www.orioncarbons.com.
To learn more about Orion S.A., visit the company’s investor
website at www.orioncarbons.com, where we regularly post
information including notification of events, news, financial
performance, investor presentations and webcasts, non-GAAP
reconciliations, SEC filings and other information regarding our
company, its businesses and the markets it serves.
About Orion S.A.
Orion S.A. (NYSE: OEC) is a leading global supplier of carbon
black, a solid form of carbon produced as powder or pellets. The
material is made to customers’ exacting specifications for tires,
coatings, ink, batteries, plastics and numerous other specialty,
high-performance applications. Carbon black is used to tint,
colorize, provide reinforcement, conduct electricity, increase
durability, and add UV protection. Orion has innovation centers on
three continents and produces carbon black at 15 plants worldwide,
offering the most diverse variety of production processes in the
industry. The company’s corporate lineage goes back more than 160
years to Germany, where it operates the world’s longest-running
carbon black plant. Orion is a leading innovator, applying a deep
understanding of customers’ needs to deliver sustainable solutions.
For more information, please visit www.orioncarbons.com.
Cautionary Statement for the Purposes of the “Safe Harbor”
Provisions of the Private Securities Litigation Reform Act of
1995
This document contains and refers to certain forward-looking
statements with respect to our financial condition, results of
operations and business, including those in the “Outlook ” and
“Quarterly Business Segment Results” sections above. These
statements constitute forward-looking statements within the meaning
of Section 21E of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”). Forward-looking statements are statements of
future expectations that are based on management’s current
expectations and assumptions and involve known and unknown risks
and uncertainties that could cause actual results, performance or
events to differ materially from those expressed or implied in
these statements. You should not place undue reliance on
forward-looking statements. Forward-looking statements include,
among others, statements concerning the potential exposure to
market risks, statements expressing management’s expectations,
beliefs, estimates, forecasts, projections and assumptions and
statements that are not limited to statements of historical or
present facts or conditions. Forward-looking statements are
typically identified by words such as “anticipate,” "assume,"
“assure,” “believe,” “confident,” “could,” “estimate,” “expect,”
“intend,” “may,” “plan,” “objectives,” “outlook,” “probably,”
“project,” “will,” “seek,” “target” “to be,” and other words of
similar meaning.
These forward-looking statements include, without limitation,
statements about the following matters: • our outlook and
expectations for 2024 and 2025, including with respect to
profitability, plant utilization, net leverage, EBITDA growth and
free cash flow; • share repurchases; • growth and strategies; •
supply; • customer actions, behavior and demand for our products; •
macroeconomic conditions; • expectations and plans with respect to
our capital, including investments and potential returns to our
shareholders; • our internal controls over financial reporting,
including the remediation of a material weakness; and • loss due to
misappropriation of assets and potential recoveries of such
loss.
All these forward-looking statements are based on estimates and
assumptions that, although believed to be reasonable, are
inherently uncertain. Therefore, undue reliance should not be
placed upon any forward-looking statements. There are important
factors that could cause actual results to differ materially from
those contemplated by such forward-looking statements. These
factors include, among others: • possible negative or uncertain
worldwide economic conditions and developments; • the volatility
and cyclicality of the industries in which we operate; • the
operational risks inherent in chemicals manufacturing, including
disruptions due to technical facilities, severe weather conditions
or natural disasters; • our dependence on major customers and
suppliers; • unanticipated fluctuations in demand for our products,
including due to factors beyond our control; • our ability to
compete in the industries and markets in which we operate; •
changes in the nature of transportation in the future, which may
impact our customers and our business; • our ability to
successfully develop new products and technologies; • the
availability of substitutes for our products; • our ability to
implement our business strategies; • our ability to respond to
changes in feedstock prices and quality; • our ability to realize
benefits from investments, joint ventures, acquisitions or
alliances; our ability to negotiate satisfactory terms with
counterparties, the satisfactory performance by such counterparties
of their obligations to us, as well as our ability to meet our
performance obligations towards such counterparties; • our ability
to realize benefits from planned plant capacity expansions and
planned and current site development projects, including our
conductive additives facility at La Porte, Texas, and the impacts
of potential delays to such expansions and development projects; •
any information technology systems failures, network disruptions
and breaches of data security; • our relationships with our
workforce, including negotiations with labor unions, strikes and
work stoppages; • our ability to recruit or retain key management
and personnel; • our exposure to political or country risks
inherent in doing business globally; • any and all impacts from the
Russia-Ukraine war and the Hamas-Israel conflict and/or any
escalation thereof related energy costs, raw material availability
or other economic disruptions; • geopolitical events in the United
States (“U.S.”), Middle-East, European Union (“EU”) and China,
relations amongst Western countries and their neighbors as well as
future relations between the U.S., EU, China and other countries
and organizations; • all environmental, health and safety laws and
regulations, including nanomaterial and greenhouse gas emissions
regulations, and the related costs of maintaining compliance and
addressing liabilities; • any possible future investigations and
enforcement actions by governmental, supranational agencies or
other organizations; • our operations as a company in the chemical
sector, including the related risks of leaks, fires and toxic
releases as well as other accidents; • any market and regulatory
changes that may affect our ability to sell or otherwise benefit
from co-generated energy; • any litigation or legal proceedings,
including product liability, environmental or asbestos related
claims; • our ability to protect our intellectual property rights
and know-how; • our ability to generate the funds required to
service our debt and finance our operations; • any fluctuations in
foreign currency exchange and interest rates; • the availability
and efficiency of hedging; • any changes in international and local
economic conditions, dislocations in credit and capital markets and
inflation or deflation; • any potential impairments or write-offs
of certain assets; • any required increases in our pension fund or
retirement-related contributions; • the adequacy of our insurance
coverage; • any changes in our jurisdictional earnings mix or in
the tax laws or accepted interpretations of tax laws in those
jurisdictions; • any challenges to our decisions and assumptions in
assessing and complying with our tax obligations; • the potential
difficulty in obtaining or enforcing judgments or bringing legal
actions against Orion S.A. (a Luxembourg incorporated entity) in
the U.S. or elsewhere outside Luxembourg; and • any current or
future changes to disclosure requirements and obligations,
including but not limited to new ESG-related disclosures, related
audit requirements and our ability to comply with such obligations
and requirements.
Factors that could cause our actual results to differ materially
from those expressed or implied in such forward-looking statements
include those factors detailed under the captions “Cautionary
Statement for Purposes of the “Safe Harbor” Provisions of the
Private Securities Litigation Reform Act of 1995” and “Risk
Factors” in our Annual Report in Form 10-K for the year ended
December 31, 2023 and in Note Q. Commitments and Contingencies to
our audited Consolidated Financial Statements and in Note J.
Commitments and Contingencies to our unaudited Consolidated
Financial Statements Form 10-Q for the period ended September 30,
2024. It is not possible for our management to predict all risk
factors and uncertainties, nor can we assess the impact of all
factors on our business or the extent to which any factor, or
combination of factors, may cause actual results to differ
materially from those contained in any forward-looking statements.
We undertake no obligation to publicly update or revise any
forward-looking statement as a result of new information, future
events or other information, other than as required by applicable
law.
Reconciliation of Non-GAAP Financial Measures
We present certain financial measures that are not prepared in
accordance with GAAP or the accounting standards of any other
jurisdiction and may not be comparable to other similarly titled
measures of other companies. For a reconciliation of these non-GAAP
financial measures to their nearest comparable GAAP measures, see
section Reconciliation of Non-GAAP Financial Measures below.
These non-GAAP measures include, but are not limited to, Gross
profit per metric ton, Adjusted EBITDA, Net Working Capital,
Capital Expenditures, Net debt and Net leverage.
We define Gross profit per metric ton as Gross profit divided by
volume measured in metric tons. We define Adjusted EBITDA as Income
from operations before depreciation and amortization, stock-based
compensation, and non-recurring items (such as, restructuring
expenses, legal settlement gain, etc.) plus Earnings in affiliated
companies, net of tax. We definite Net Working Capital as
Inventories, net plus Accounts receivable, net minus Accounts
payable. We define Capital Expenditures as Cash paid for the
acquisition of intangible assets and property, plant and equipment.
We define Net debt as Total debt per Consolidated Balance Sheets
plus Deferred debt issuance cost - Term loans minus Cash and cash
equivalents. We define Net leverage as Net debt divided by trailing
twelve month Adjusted EBITDA.
Adjusted EBITDA is used by our chief operating decision maker
(“CODM”) to evaluate our operating performance and to make
decisions regarding allocation of capital, because it excludes the
effects of items that have less bearing on the performance of our
underlying core business. We use this measure, together with other
measures of performance under GAAP, to compare the relative
performance of operations in planning, budgeting and reviewing our
business. By eliminating potential differences in results of
operations between periods caused by factors such as depreciation
and amortization, historic cost and age of assets, financing and
capital structures and taxation positions or regimes, we believe
that Adjusted EBITDA provides a useful additional basis for
evaluating and comparing the current performance of the underlying
operations.
We believe our non-GAAP measures are useful measures of
financial performance in addition to Net income, Income from
operations and other profitability measures under GAAP, because
they facilitate operating performance comparisons from period to
period. In addition, we believe these non-GAAP measures aid
investors by providing additional insight into our operational
performance and help clarify trends affecting our business.
Other companies and analysts may calculate non-GAAP financial
measures differently, so making comparisons among companies on this
basis should be done carefully. Non-GAAP measures are not
performance measures under GAAP and should not be considered in
isolation or construed as substitutes for Net sales, Net income,
Income from operations, Gross profit and other GAAP measures as an
indicator of our operations in accordance with GAAP.
With respect to Adjusted EBITDA and Adjusted Diluted EPS outlook
for 2024, we are not able to reconcile the forward-looking non-GAAP
financial measures to the closest corresponding GAAP measure
without unreasonable efforts because we are unable to predict the
ultimate outcome of certain significant items. These items include,
but are not limited to, significant legal settlements, tax and
regulatory reserve changes, restructuring costs and acquisition and
financing related impacts.
Condensed Consolidated Statements of
Operations (Unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
(In millions, except share and per
share data)
2024
2023
2024
2023
Net sales
$
463.4
$
466.2
$
1,443.3
$
1,425.7
Cost of sales
355.9
356.0
1,103.8
1,062.0
Gross profit
107.5
110.2
339.5
363.7
Selling, general and administrative
expenses
57.9
55.6
179.7
168.3
Research and development costs
7.0
6.2
20.1
18.3
Loss due to misappropriation of assets,
net
60.7
—
60.7
—
Other (income) expenses, net
(2.8
)
2.7
(0.1
)
(1.0
)
Income (loss) from operations
(15.3
)
45.7
79.1
178.1
Interest and other financial expense,
net
15.9
12.9
40.8
41.6
Reclassification of actuarial gain from
AOCI
—
(2.2
)
—
(6.7
)
Income (loss) before earnings in
affiliated companies and income taxes
(31.2
)
35.0
38.3
143.2
Income tax expense (benefit)
(10.8
)
8.9
11.8
45.0
Earnings in affiliated companies, net of
tax
0.2
0.1
0.5
0.4
Net income (loss)
$
(20.2
)
$
26.2
$
27.0
$
98.6
Weighted-average shares outstanding (in
thousands):
Basic
58,191
58,572
58,406
59,284
Diluted
58,738
59,252
58,942
59,934
Earnings (loss) per share:
Basic
$
(0.35
)
$
0.45
$
0.46
$
1.66
Diluted
$
(0.35
)
$
0.44
$
0.46
$
1.65
Condensed Consolidated
Statements of Financial Position (Unaudited)
(In millions, except share
amounts)
September 30, 2024
December 31, 2023
ASSETS
Current assets
Cash and cash equivalents
$
53.2
$
37.5
Accounts receivable, net
267.9
241.0
Inventories, net
306.7
287.1
Income tax receivables
14.6
6.1
Prepaid expenses and other current
assets
75.7
74.4
Total current assets
718.1
646.1
Property, plant and equipment, net
962.7
900.1
Right-of-use assets
124.3
110.6
Goodwill
77.1
76.1
Intangible assets, net
21.6
25.5
Investment in equity method affiliates
7.4
5.1
Deferred income tax assets
56.3
30.0
Other assets
28.8
39.9
Total non-current assets
1,278.2
1,187.3
Total assets
$
1,996.3
$
1,833.4
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable
$
174.7
$
183.7
Current portion of long-term debt and
other financial liabilities
293.8
137.0
Accrued liabilities
42.5
41.7
Income taxes payable
12.1
34.2
Other current liabilities
54.8
43.7
Total current liabilities
577.9
440.3
Long-term debt, net
676.7
677.3
Employee benefit plan obligation
62.9
60.4
Deferred income tax liabilities
78.8
66.3
Other liabilities
123.7
110.6
Total non-current liabilities
942.1
914.6
Stockholders' Equity
Common stock
Authorized: 65,035,579 and 65,035,579
shares with no par value
Issued – 60,992,259 and 60,992,259 shares
with no par value
Outstanding – 57,720,219 and 57,898,772
shares
85.3
85.3
Treasury stock, at cost, 3,272,040 and
3,093,487
(73.8
)
(70.1
)
Additional paid-in capital
81.0
85.6
Retained earnings
439.8
417.6
Accumulated other comprehensive loss
(56.0
)
(39.9
)
Total stockholders' equity
476.3
478.5
Total liabilities and stockholders'
equity
$
1,996.3
$
1,833.4
Condensed Consolidated
Statements of Cash Flows (Unaudited)
Nine Months Ended September
30,
(In millions)
2024
2023
Cash flows from operating
activities:
Net income
$
27.0
$
98.6
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation of property, plant and
equipment and amortization of intangible assets and right of use
assets
90.0
80.8
Amortization of debt issuance costs
1.1
2.0
Share-based compensation
11.3
8.3
Deferred tax provision
(12.0
)
5.5
Foreign currency transactions
(7.4
)
3.2
Reclassification of actuarial gain from
AOCI
—
(6.7
)
Changes in operating assets and
liabilities, net:
Trade receivables
(26.2
)
98.1
Inventories
(17.6
)
(6.3
)
Trade payables
(8.2
)
(3.8
)
Other provisions
2.6
0.2
Income tax liabilities
(29.5
)
2.5
Other assets and liabilities, net
(0.3
)
(8.7
)
Net cash provided by operating
activities
30.8
273.7
Cash flows from investing
activities:
Acquisition of property, plant and
equipment
(135.7
)
(111.0
)
Net cash used in investing
activities
(135.7
)
(111.0
)
Cash flows from financing
activities:
Proceeds from long-term debt
borrowings
—
12.6
Repayments of long-term debt
(2.8
)
(2.3
)
Payments for debt issue costs
(0.2
)
(0.2
)
Cash inflows related to current financial
liabilities
242.1
103.2
Cash outflows related to current financial
liabilities
(98.3
)
(215.6
)
Dividends paid to shareholders
(3.6
)
(3.7
)
Repurchase of common stock
(17.9
)
(58.9
)
Net cash provided by (used in)
financing activities
119.3
(164.9
)
Increase (decrease) in cash, cash
equivalents and restricted cash
14.4
(2.2
)
Cash, cash equivalents and restricted cash
at the beginning of the period
40.2
63.4
Effect of exchange rate changes on
cash
0.1
(0.6
)
Cash, cash equivalents and restricted
cash at the end of the period
54.7
60.6
Less restricted cash at the end of the
period
1.5
1.5
Cash and cash equivalents at the end of
the period
$
53.2
$
59.1
Reconciliation of Non-GAAP to
GAAP Financial Measures
The following tables present a
reconciliation of each Non-GAAP measure to the most directly
comparable GAAP measure:
Reconciliation of Net income (loss) to
Adjusted EBITDA:
Third Quarter
Nine Months Ended September
30,
(In millions)
2024
2023
2024
2023
Net income (loss)
$
(20.2
)
$
26.2
$
27.0
$
98.6
Add back Income tax (benefit) expense
(10.8
)
8.9
11.8
45.0
Add back Equity in earnings of affiliated
companies, net of tax
(0.2
)
(0.1
)
(0.5
)
(0.4
)
Income (loss) before earnings in
affiliated companies and income taxes
(31.2
)
35.0
38.3
143.2
Add back Interest and other financial
expense, net
15.9
12.9
40.8
41.6
Add back Reclassification of actuarial
gain from AOCI
—
(2.2
)
—
(6.7
)
Income (loss) from operations
(15.3
)
45.7
79.1
178.1
Add back Depreciation of property, plant
and equipment and amortization of intangible assets and right of
use assets
30.8
27.9
90.0
80.8
EBITDA
15.5
73.6
169.1
258.9
Equity in earnings of affiliated
companies, net of tax
0.2
0.1
0.5
0.4
Loss due to misappropriation of assets,
net:
Misappropriation of assets, net
59.2
—
59.2
—
Professional fees related to
misappropriation of assets
1.5
—
1.5
—
Long term incentive plan
4.8
3.6
11.3
8.3
Other adjustments
(1.1
)
—
(1.1
)
0.3
Adjusted EBITDA
$
80.1
$
77.3
$
240.5
$
265.7
Reconciliation of total debt per the
Consolidated Balance Sheet to Net debt:
(In millions)
September 30, 2024
Current portion of long term debt and
other financial liabilities
$
293.8
Long-term debt, net
676.7
Total debt as per Consolidated Balance
Sheets
970.5
Add: Deferred debt issuance costs - Term
loans
3.2
Less: Cash and cash equivalents
53.2
Net debt
$
920.5
Reconciliation of Net income (loss) to
Adjusted net income and Diluted Earnings (loss) per share to
Adjusted Diluted EPS:
Third Quarter
Nine Months Ended September
30,
(In millions, except per share
data)
2024
2023
2024
2023
Net income (loss)
$
(20.2
)
$
26.2
$
27.0
$
98.6
add back long-term incentive plan
4.8
3.6
11.3
8.3
add back loss due to misappropriation of
assets, net
59.2
—
59.2
—
add back loss due to professional fees
related to misappropriation of assets
1.5
—
1.5
—
add back other adjustment items
(1.1
)
—
(1.1
)
(1.9
)
add back reclassification of actuarial
gains from AOCI
—
(2.2
)
—
(6.7
)
add back intangible assets
amortization
1.9
1.8
5.5
5.4
add back foreign exchange rate impacts
1.4
(0.1
)
2.1
2.9
add back amortization of transaction
costs
0.3
0.7
1.1
2.0
Tax effect on add back items at estimated
tax rate
(20.4
)
(1.1
)
(23.9
)
(3.1
)
Adjusted net income
$
27.4
$
28.9
$
82.7
$
105.5
Total add back items
$
47.6
$
2.7
$
55.7
$
6.9
Impact of add-back items per share
$
0.82
$
0.05
$
0.94
$
0.11
Diluted Earnings (loss) per
share
$
(0.35
)
$
0.44
$
0.46
$
1.65
Adjusted Diluted EPS
$
0.47
$
0.49
$
1.40
$
1.76
Total of Loss due to misappropriation of
assets, net and loss due to professional fees related to
misappropriation of assets, net of tax benefit
$
(42.5
)
$
—
$
(42.5
)
$
—
Diluted weighted-average shares
outstanding (in thousands):
58,738
59,252
58,942
59,934
Impact of Loss due to misappropriation
of assets, net per share
$
(0.72
)
$
—
$
(0.72
)
$
—
Volumetric Information:
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
Delta
2024
2023
Delta
Volume (in kmt)
225.2
245.2
(20.0)
(8.2)
706.7
706.0
0.7
0.1
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241107968522/en/
Christopher Kapsch Vice President of Investor Relations +1
281-318-4413 christopher.kapsch@orioncarbons.com
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