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Element Solutions (ESI) - 2024 Q3 - Quarterly Report
ESIElement Solutions (ESI)2024-10-29 20:15
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Financial Performance - Net income for Q3 2024 was 40.4million,comparedtoalossof40.4 million, compared to a loss of 31.7 million in Q3 2023, marking a significant turnaround [10]. - Total comprehensive income for Q3 2024 was 81.6million,whileQ32023reportedacomprehensivelossof81.6 million, while Q3 2023 reported a comprehensive loss of 57.0 million [11]. - The company reported a net income of 189.7millionfortheninemonthsendedSeptember30,2024,significantlyhigherthan189.7 million for the nine months ended September 30, 2024, significantly higher than 41.0 million for the same period in 2023 [14]. - The net income for the three months ended September 30, 2024, was 40.3million,comparedtoanetlossof40.3 million, compared to a net loss of 31.8 million for the same period in 2023, indicating a significant turnaround [17]. - For the nine months ended September 30, 2024, net income was reported at 189.5million,asignificantincreasefromthepreviousyear′sperformance[18].−BasicearningspersharefortheninemonthsendedSeptember30,2024,was189.5 million, a significant increase from the previous year's performance [18]. - Basic earnings per share for the nine months ended September 30, 2024, was 0.77, up from 0.16inthesameperiodof2023[61].CashandAssets−Cashandcashequivalentsincreasedto0.16 in the same period of 2023 [61]. Cash and Assets - Cash and cash equivalents increased to 376.0 million as of September 30, 2024, up from 289.3millionattheendof2023[14].−Totalassetsroseto289.3 million at the end of 2023 [14]. - Total assets rose to 5,098.2 million in Q3 2024, compared to 4,974.1millionattheendof2023[13].−Goodwilldecreasedto4,974.1 million at the end of 2023 [13]. - Goodwill decreased to 2,220.2 million as of September 30, 2024, down from 2,336.7millionattheendof2023[13].−Thetotalnumberofcommonsharesoutstandingincreasedto267,133,844asofSeptember30,2024,from266,130,782asofJune30,2023[17].−AsofSeptember30,2024,totalstockholders′equityincreasedto2,336.7 million at the end of 2023 [13]. - The total number of common shares outstanding increased to 267,133,844 as of September 30, 2024, from 266,130,782 as of June 30, 2023 [17]. - As of September 30, 2024, total stockholders' equity increased to 2,439.3 million from 2,373.1millionatJune30,2024,reflectingagrowthofapproximately2.82,373.1 million at June 30, 2024, reflecting a growth of approximately 2.8% [16]. Liabilities and Debt - Total liabilities increased slightly to 2,643.5 million in Q3 2024 from 2,629.8millionattheendof2023[13].−TheCompanyrecordedatotaldebtof2,629.8 million at the end of 2023 [13]. - The Company recorded a total debt of 1,926.2 million as of September 30, 2024, slightly down from 1,932.5millionattheendof2023[37].−TheCompany’stotallong−termdebtwas1,932.5 million at the end of 2023 [37]. - The Company’s total long-term debt was 1,914.7 million as of September 30, 2024, compared to 1,921.0millionattheendof2023,reflectingadecreaseof0.31,921.0 million at the end of 2023, reflecting a decrease of 0.3% [37]. Income and Expenses - The Company recognized an income tax expense of 36.8 million for the three months ended September 30, 2024, compared to 15.3millioninthesameperiodfor2023[69].−TheincometaxexpensefortheninemonthsendedSeptember30,2024,includedabenefitfromthereleaseofvaluationallowancesof15.3 million in the same period for 2023 [69]. - The income tax expense for the nine months ended September 30, 2024, included a benefit from the release of valuation allowances of 38.8 million against certain U.K. tax attribute carryforwards [70]. - The Company completed an internal restructuring that resulted in a non-recurring tax expense of 13.6millionduringthethirdquarterof2024[69].SalesandRevenue−TotalnetsalesforthethreemonthsendedSeptember30,2024,were13.6 million during the third quarter of 2024 [69]. Sales and Revenue - Total net sales for the three months ended September 30, 2024, were 645.0 million, an increase from 599.3millioninthesameperiodfor2023,representinganincreaseofapproximately7.5599.3 million in the same period for 2023, representing an increase of approximately 7.5% [75]. - Adjusted EBITDA for the three months ended September 30, 2024, was 142.7 million, compared to 134.1millioninthesameperiodfor2023,reflectingagrowthofabout6.4134.1 million in the same period for 2023, reflecting a growth of about 6.4% [75]. - The Electronics segment reported net sales of 419.1 million for the three months ended September 30, 2024, up from 367.0millioninthesameperiodfor2023,markinganincreaseofapproximately14.2367.0 million in the same period for 2023, marking an increase of approximately 14.2% [75]. - The Industrial & Specialty segment had net sales of 225.9 million for the three months ended September 30, 2024, down from 232.3millioninthesameperiodfor2023,adecreaseofabout2.8232.3 million in the same period for 2023, a decrease of about 2.8% [75]. Other Financial Metrics - The company declared dividends of 0.08 per share, totaling 19.5millionforthequarterendedSeptember30,2024[16].−Theaccumulateddeficitdecreasedto19.5 million for the quarter ended September 30, 2024 [16]. - The accumulated deficit decreased to (1,052.4) million as of September 30, 2024, from (1,073.2)millionatJune30,2024,showinganimprovementinfinancialhealth[16].−Thefairvalueofthecompany′slong−termdebtwasestimatedat(1,073.2) million at June 30, 2024, showing an improvement in financial health [16]. - The fair value of the company's long-term debt was estimated at 1.91 billion as of September 30, 2024 [59]. - The company held commodity derivative contracts with a notional amount of 76.8millionasofSeptember30,2024[55].−Thefairvalueofcross−currencyswapswasanetassetof76.8 million as of September 30, 2024 [55]. - The fair value of cross-currency swaps was a net asset of 0.9 million as of September 30, 2024 [51]. Business Operations - The Company agreed to sell its flexographic printing plate business, MacDermid Graphics Solutions, for approximately 325million,expectedtocloseinQ42024orH12025[26].−AsofSeptember30,2024,totalassetsheldforsalefromMacDermidGraphicsSolutionsamountedto325 million, expected to close in Q4 2024 or H1 2025 [26]. - As of September 30, 2024, total assets held for sale from MacDermid Graphics Solutions amounted to 261.4 million, including 130.4millioningoodwill[28].−TheCompanyachievedaproductqualificationmilestonerelatedtotheKuprionAcquisition,resultingina130.4 million in goodwill [28]. - The Company achieved a product qualification milestone related to the Kuprion Acquisition, resulting in a 3.9 million R&D expense [36]. - The Company recorded depreciation expenses of 10.0millionforQ32024,comparedto10.0 million for Q3 2024, compared to 11.8 million for Q3 2023, indicating a decrease of 15.3% [30]. - Amortization expenses on intangible assets were 29.4millionforQ32024,downfrom29.4 million for Q3 2024, down from 32.7 million for Q3 2023, a reduction of 10.1% [35]. Legal and Environmental Matters - The Company is involved in various legal proceedings but believes that their resolutions will not have a material adverse effect on its consolidated financial position [67]. - The Company's environmental liabilities totaled 10.8millionand10.8 million and 11.3 million as of September 30, 2024, and December 31, 2023, respectively, primarily due to environmental remediation and monitoring costs [64]. - An impairment charge of $80.0 million was recorded for the Industrial & Specialty segment due to a goodwill impairment test conducted in Q3 2023 [60].