Chemours(CC)2024-11-04 11:41Financial Performance - Net sales for Q3 2024 increased by $14 million (or 1%) to $1.5 billion compared to Q3 2023, driven by a 5% increase in volume, despite a 3% decrease in price and a 1% unfavorable currency impact [300]. - For the nine months ended September 30, 2024, net sales decreased by $278 million (or 6%) to $4.4 billion, primarily due to a 5% decrease in price and a 1% headwind from the sale of the Glycolic Acid business in 2023 [301]. - The Thermal & Specialized Solutions segment's net sales increased by $24 million (6%) to $460 million for the three months ended September 30, 2024, compared to $436 million for the same period in 2023 [321]. - The Titanium Technologies segment's net sales decreased by $11 million (2%) to $679 million for the three months ended September 30, 2024, compared to $690 million for the same period in 2023 [327]. - For the nine months ended September 30, 2024, segment net sales decreased by $133 million (12%) to $985 million, down from $1.1 billion in the same period in 2023 [335]. - Net sales for the nine months ended September 30, 2024, were $3.1 billion, with a gross profit of $428 million and net income of $27 million [378]. Cost and Expenses - Cost of goods sold (COGS) remained flat at $1.2 billion for Q3 2024, while COGS for the nine months decreased by $105 million (or 3%) to $3.5 billion, attributed to lower raw materials costs [303]. - Selling, general, and administrative (SG&A) expenses decreased by $30 million (or 18%) to $135 million for Q3 2024, and by $651 million (or 61%) to $416 million for the nine months, mainly due to reduced litigation-related charges [304]. - Research and development (R&D) expenses were relatively stable at $29 million for Q3 2024 and $83 million for the nine months, compared to $28 million and $82 million in the same periods of 2023 [305]. - Corporate and Other costs increased by $3 million (6%) to $57 million for the three months ended September 30, 2024, compared to $54 million in the same period in 2023 [338]. Impairments and Charges - The company recorded a non-cash goodwill impairment charge of $56 million in Q3 2024 for the Advanced Performance Materials reporting unit [294]. - A goodwill impairment charge of $56 million was recognized for the Advanced Performance Materials reporting unit for the three and nine months ended September 30, 2024 [308]. - The company recorded non-cash asset-related charges of $25 million in Q3 2024 related to the write-off of certain operating assets as part of strategic footprint transformation initiatives [385]. - Restructuring, asset-related, and other charges decreased by $81 million (or 64%) to $45 million for Q3 2024, and by $89 million (or 63%) to $52 million for the nine months, primarily due to the 2024 Restructuring Program [306]. Cash Flow and Liquidity - As of September 30, 2024, total unrestricted cash and cash equivalents were $596 million, with $394 million held by foreign subsidiaries [342]. - The availability under the Revolving Credit Facility as of September 30, 2024, was $652 million, net of $49 million in outstanding letters of credit [342]. - For the nine months ended September 30, 2024, the company incurred a net cash usage of $771 million in operating activities, compared to a cash provided of $74 million in the same period of 2023 [346]. - The company utilized supply chain financing to accelerate the collection of $40 million and $95 million in accounts receivable for the quarters ended September 30, 2024 and 2023, respectively [349]. - The company expects to fund significant cash payments for known obligations through cash generated from operations and existing debt financing arrangements [352]. Environmental and Sustainability Commitments - The company is committed to sustainability and has set ambitious Corporate Responsibility Commitment goals to achieve by 2030, focusing on reducing greenhouse gas emissions and environmental impact [292]. - The company aims for a 60% reduction in Scope 1 and Scope 2 absolute GHG emissions by 2030, aligning with its Environmental Leadership goals [426]. - Chemours has set a target to achieve net zero greenhouse gas emissions from its operations by 2050, with near-term science-based targets approved by the Science Based Targets initiative (SBTi) [427]. - The company expects to spend approximately $160 million over the next three years on the five most significant remediation sites, which represent 80% of total accrued liabilities [402]. Foreign Currency and Interest Rate Management - As of September 30, 2024, the company had 9 foreign currency forward contracts outstanding with an aggregate gross notional U.S. dollar equivalent of $153 million, with a fair value of less than $1 million [443]. - The company recognized a net gain of $1 million and a net loss of $5 million for the three and nine months ended September 30, 2024, respectively, related to non-designated foreign currency forward contracts [443]. - The company entered into interest rate swaps with an aggregate notional U.S. dollar equivalent of $300 million, with a fair value of negative $8 million as of September 30, 2024 [447]. - Pre-tax losses of $6 million and less than $1 million were recognized for the three and nine months ended September 30, 2024, respectively, related to interest rate swaps [447]. Remediation and Legal Matters - The company has $567 million in environmental remediation liabilities as of September 30, 2024, with $119 million classified as current liabilities [352]. - Fayetteville Works has been under investigation for PFAS releases, with a Consent Order in place requiring the company to provide permanent replacement drinking water supplies to affected residents [409]. - The estimated potential liabilities for environmental remediation may range up to approximately $710 million above the accrued amount as of September 30, 2024, reflecting inherent uncertainties in evaluations [397]. - The U.S. Smelter and Lead Refinery site in East Chicago, Indiana, is under EPA-directed remediation, with the company cooperating with multiple parties [413].