Chemours(CC)2025-05-06 20:35Financial Performance - Net sales for the three months ended March 31, 2025, were $1.368 billion, a slight increase from $1.362 billion in the same period of 2024[366]. - Gross profit decreased to $236 million for the three months ended March 31, 2025, down from $284 million in 2024, reflecting a decline in profitability[366]. - The net loss for the three months ended March 31, 2025, was $4 million, compared to a net income of $54 million in the same period of 2024[366]. - The company recorded a provision for income taxes of $4 million for the three months ended March 31, 2025, down from $16 million in 2024, due to decreased profitability[379]. - For the three months ended March 31, 2025, Chemours utilized supply chain financing to accelerate the collection of $93 million in accounts receivable, compared to $17 million in the same period of 2024[416]. - Chemours experienced a decrease in cash used for operating activities, with $112 million in Q1 2025 compared to $290 million in Q1 2024, primarily due to the unwinding of year-end 2023 net working capital actions[426]. - The net loss attributable to Chemours for the same period was $45 million, compared to a loss before income taxes of $53 million[444]. Cost and Expenses - The cost of goods sold increased by $54 million (or 5%) to $1.132 billion for the three months ended March 31, 2025, primarily due to higher raw materials costs[371]. - Selling, general, and administrative expenses decreased by $14 million (or 10%) to $123 million for the three months ended March 31, 2025, attributed to lower audit-related costs[373]. - Restructuring, asset-related, and other charges rose by $29 million (over 100%) to $33 million for the three months ended March 31, 2025, due to the exit from the SPS Capstone business[375]. - Interest expense increased by $3 million (or 5%) to $66 million for the three months ended March 31, 2025, driven by higher interest rates and increased debt principal[377]. Segment Performance - For the Thermal & Specialized Solutions segment, net sales increased by $12 million (or 3%) to $466 million for the three months ended March 31, 2025, compared to $454 million in the same period in 2024[387]. - Adjusted EBITDA for the Thermal & Specialized Solutions segment decreased by $9 million (or 6%) to $141 million, with an Adjusted EBITDA margin of 30%, down from 33% in the prior year[388]. - The Titanium Technologies segment's net sales increased by $6 million (or 1%) to $597 million for the three months ended March 31, 2025, compared to $591 million in the same period in 2024[394]. - Adjusted EBITDA for the Titanium Technologies segment decreased by $19 million (or 28%) to $50 million, with an Adjusted EBITDA margin of 8%, down from 12% in the prior year[395]. - The Advanced Performance Materials segment's net sales decreased by $9 million (or 3%) to $294 million for the three months ended March 31, 2025, compared to $303 million in the same period in 2024[401]. - Adjusted EBITDA for the Advanced Performance Materials segment increased by $2 million (or 7%) to $32 million, with an Adjusted EBITDA margin of 11%, up from 10% in the prior year[402]. Cash and Liquidity - Total unrestricted cash and cash equivalents as of March 31, 2025, amounted to $464 million, with $291 million held by foreign subsidiaries[412]. - The availability under the Revolving Credit Facility as of March 31, 2025, was $623 million, net of $52 million in outstanding letters of credit[412]. - The company expects liquidity from its sources to adequately support cash needs through at least the end of May 2026[411]. - As of March 31, 2025, Chemours reported unrestricted cash and cash equivalents of $291 million held by foreign subsidiaries, with a net cash outflow of approximately $31 million from the U.S. due to intercompany loans and dividends[418]. - Current liabilities decreased by $144 million (or 8%) to $1.673 billion at March 31, 2025, with accounts payable down by $150 million (or 13%) to $1 billion[436]. - Chemours declared a quarterly cash dividend of $0.0875 per share for Q2 2025, representing a 65% decrease from the previous quarter's dividend, aligning with the company's capital allocation strategy[423]. - Chemours anticipates significant cash payments for contractual obligations over the next 12 months, funded through operations, available cash, and existing debt financing[420]. - The company expects to maintain sufficient liquidity to meet its obligations through at least May 2026, focusing on growth initiatives and returning cash to shareholders[423]. Environmental and Regulatory Matters - The company has accrued litigation costs of $192 million as of March 31, 2025, which includes settlements with Ohio and Delaware[421]. - Environmental remediation liabilities amounted to $567 million as of March 31, 2025, slightly down from $571 million at the end of 2024[458]. - The five most significant environmental remediation sites account for 83% of total accrued liabilities, with expected spending of $128 million over the next three years for these sites[464]. - The New Jersey Department of Environmental Protection (NJ DEP) has mandated a remediation funding source of $943 million for Chambers Works, primarily for non-PFAS remediation[490]. - A conditional fine of up to €3.7 million has been indicated by DCMR for non-compliance with discharge limits, with a grace period until July 2025[474]. - The company has accrued €1 million related to a penalty from the Dutch ILT agency concerning hydrofluorocarbon reporting errors as of March 31, 2025[475]. - The company has implemented improvements to reporting procedures to comply with hydrofluorocarbon regulations after exceeding its quota[475]. - The company has been ordered to meet specific limits for PFAS discharges or face conditional fines, reflecting increased regulatory scrutiny[473]. - The company submitted a revised NPDES permit application in December 2024 to address discharge exceedances and is expected to incur future capital expenditures related to this[487]. - The company is engaged in ongoing legal discussions with four municipalities regarding environmental-related expenditures, with potential losses deemed probable but not estimable at this time[472]. Sustainability Initiatives - Chemours aims for a 60% absolute reduction in greenhouse gas emissions by 2030 and has set a new Scope 3 target to reduce emissions by 25% per ton of product by 2030[492]. - The Opteon™ product portfolio is projected to result in 325 million tons of avoided carbon dioxide equivalent emissions globally by the end of 2025[494]. - A 60% reduction in Scope 1 and Scope 2 absolute GHG emissions has been achieved, along with a 99% reduction in air and water process emissions of fluorinated organic chemicals[495]. - Chemours' Titanium Technologies business is advancing sustainability goals through the Ti-Pure™ Sustainability product series, focusing on climate impact and resource efficiency[498]. Financial Instruments and Hedging - At March 31, 2025, Chemours had 11 foreign currency forward contracts outstanding with a gross notional U.S. dollar equivalent of $185 million[512]. - For the three months ended March 31, 2025, Chemours recognized net losses of $2 million related to non-designated foreign currency forward contracts[512]. - The company has 185 foreign currency forward contracts under a cash flow hedge program with an aggregate notional U.S. dollar equivalent of $201 million as of March 31, 2025[513]. - A pre-tax loss of $15 million was recognized on the net investment hedge for the three months ended March 31, 2025[514]. - The company entered into a cross-currency swap to convert $600 million of senior unsecured notes due January 2033 into €567 million, with a fair value loss of $11 million as of March 31, 2025[515]. - A pre-tax loss of $16 million was recognized for the cross-currency swap for the three months ended March 31, 2025[515]. - The company has two interest rate swaps with an aggregate notional value of $300 million, resulting in a fair value loss of $4 million as of March 31, 2025[517]. - A pre-tax loss of $1 million was recognized for the interest rate swaps for the three months ended March 31, 2025[517]. - The company recognized a pre-tax gain of $4 million from interest rate swaps during the three months ended March 31, 2024[517].