Arcadium Lithium plc(ALTM) - 2024 Q2 - Quarterly Results

Performance Overview and Outlook The company reported Q2 2024 results, adjusted its capital spending and cost savings plans, and provided a full-year financial outlook Second Quarter 2024 Financial Highlights Arcadium Lithium reported second-quarter revenue of $255 million and a GAAP net income of $85.7 million Q2 2024 Key Financial Metrics | Metric | Q2 2024 | | :--- | :--- | | Revenue | $255.0 million | | GAAP Net Income (attributable) | $85.7 million | | Diluted EPS (GAAP) | $0.07 | | Adjusted EBITDA | $99.1 million | | Adjusted EPS | $0.05 | - The company achieved an average realized price of $17,200 per product metric ton for its combined lithium hydroxide and carbonate sales during the second quarter[1][2] - Total sales volumes increased slightly compared to the first quarter, but average realized pricing declined sequentially for all products except spodumene due to market conditions and mix shifts[2] Business Operations and Strategy The company is advancing cost savings, projecting significant volume growth, and deferring certain expansion projects to reduce capital spending Cost Savings Initiatives Arcadium Lithium is on track for its 2024 cost savings target and is accelerating its long-term savings program - Expected to deliver cost savings at the higher end of the $60 to $80 million guidance range in 2024[1][3] - A program has been initiated to accelerate the delivery of the previously announced $125 million per annum total cost savings target[4] Volume Growth Projections The company projects 25% annual sales volume growth for 2024 and 2025, driven by recent expansion project ramp-ups - Projecting a 25% increase in combined lithium hydroxide and carbonate sales volumes for 2024 versus 2023, and a further 25% increase in 2025 versus 2024[1][5] - Production is increasing at recently completed expansions in Argentina, which are expected to drive higher sales volumes in the second half of the year and continued growth into 2025[5] Capital Spending and Expansion Adjustments The company is reducing capital spending by approximately $500 million over two years by pausing and re-sequencing certain expansion projects - Capital spending will be reduced by approximately $500 million over the next 24 months[1][9] - Investment in the 40,000 metric ton Galaxy project in Canada will be paused[7] - The Fénix Phase 1B and Sal de Vida Stage 1 projects in Argentina will be completed sequentially rather than simultaneously[8] - The development of the Nemaska Lithium integrated project in Canada will not be altered[9] Full Year 2024 Outlook The company provided its 2024 financial outlook based on two market price scenarios, projecting increased sales volumes and capital spending of $550-$700 million 2024 Outlook Scenarios (Based on H2 2024 Market Price) | Full Year 2024 | Average Price $12/kg | Average Price $15/kg | | :--- | :--- | :--- | | Revenue | ~$1,100 million | ~$1,200 million | | Adjusted EBITDA | ~$380 million | ~$470 million | | Adjusted EBITDA Margin | 35% | 39% | 2024 Select Financial Item Outlook | Metric | Full Year 2024 Guidance | | :--- | :--- | | SG&A Expenses | ~$115 million | | Depreciation & Amortization | ~$100 million | | Adjusted Tax Rate | 25% - 30% | | Capital Spending | $550 - $700 million | Financial Statements This section presents the condensed consolidated statements of operations, balance sheets, and cash flows for the reported periods Condensed Consolidated Statements of Operations The company reported Q2 2024 revenue of $254.5 million and net income of $85.7 million, with six-month revenue reaching $515.7 million Statement of Operations Highlights (Three Months Ended June 30) | (in millions) | 2024 | 2023 | | :--- | :--- | :--- | | Revenue | $254.5 | $235.8 | | Gross Margin | $80.4 | $147.3 | | Net Income (attributable) | $85.7 | $90.2 | | Diluted EPS | $0.07 | $0.18 | Statement of Operations Highlights (Six Months Ended June 30) | (in millions) | 2024 | 2023 | | :--- | :--- | :--- | | Revenue | $515.7 | $489.3 | | Gross Margin | $186.8 | $314.5 | | Net Income (attributable) | $101.3 | $205.0 | | Diluted EPS | $0.09 | $0.41 | Condensed Consolidated Balance Sheets As of June 30, 2024, total assets stood at $9.93 billion, with cash of $380.4 million and long-term debt of $590.6 million Balance Sheet Summary (in millions) | Account | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $380.4 | $237.6 | | Total current assets | $1,071.6 | $648.2 | | Total assets | $9,930.3 | $3,230.1 | | Long-term debt | $590.6 | $299.6 | | Total shareholders' equity | $6,262.8 | $1,784.2 | | Total liabilities and equity | $9,930.3 | $3,230.1 | Condensed Consolidated Statements of Cash Flows For the first six months of 2024, the company had a net cash outflow from operations of $119.7 million, ending the period with $380.4 million in cash Cash Flow Summary (Six Months Ended June 30, in millions) | Activity | 2024 | 2023 | | :--- | :--- | :--- | | Cash (used in)/provided by operating activities | $(119.7) | $181.6 | | Cash provided by/(used in) investing activities | $158.4 | $(180.2) | | Cash provided by/(used in) financing activities | $119.6 | $(21.6) | | Increase/(decrease) in cash | $142.8 | $(21.2) | | Cash and cash equivalents, end of period | $380.4 | $167.8 | Non-GAAP Financial Measures and Reconciliations This section provides reconciliations of GAAP net income to non-GAAP measures such as Adjusted EBITDA and Adjusted After-Tax Earnings Reconciliation of Net Income to Adjusted EBITDA For Q2 2024, GAAP Net Income of $85.7 million was reconciled to a non-GAAP Adjusted EBITDA of $99.1 million Adjusted EBITDA Reconciliation (Q2, in millions) | Metric | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Net income attributable to Arcadium Lithium | $85.7 | $90.2 | | Adjustments (D&A, Tax, Interest, etc.) | $59.1 | $21.6 | | EBITDA (Non-GAAP) | $144.8 | $111.8 | | Further Adjustments (Restructuring, etc.) | $(45.7) | $22.7 | | Adjusted EBITDA (Non-GAAP) | $99.1 | $134.5 | Reconciliation of Net Income to Adjusted After-Tax Earnings Q2 2024 GAAP Net Income was reconciled to Adjusted After-Tax Earnings of $58.9 million, or $0.05 per diluted share Adjusted After-Tax Earnings Reconciliation (Q2) | (in millions, except per share) | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Net income attributable to Arcadium Lithium | $85.7 | $90.2 | | Total Special Charges & Tax Adjustments | $(26.8) | $17.1 | | Adjusted after-tax earnings (Non-GAAP) | $58.9 | $107.3 | | Diluted adjusted EPS (Non-GAAP) | $0.05 | $0.21 | Other Reconciliations The report provides additional non-GAAP reconciliations for adjusted cash from operations and net debt - Adjusted cash provided by operations for the six months ended June 30, 2024 was $25.4 million, compared to $192.0 million in the prior year period[25] - Net debt (a non-GAAP measure calculated as total debt less cash) stood at $253.6 million as of June 30, 2024[26]