Element Solutions (US:ESI)2025-10-28 20:29Financial Performance - Net sales for Q3 2025 were $656 million, a 2% increase on a reported basis and a 5% increase on an organic basis compared to Q3 2024[4]. - Adjusted EBITDA reached a record $147 million, up 3% from $143 million in Q3 2024, with a 10% year-over-year increase when excluding the divested MacDermid Graphics Solutions business[4][11]. - Reported net income for Q3 2025 was $39 million, a decrease of 3% from $40 million in Q3 2024, resulting in a net income margin of 6.0%[11]. - Earnings per share (EPS) for Q3 2025 was $0.16 on a GAAP basis, compared to $0.17 for the same period last year, while adjusted EPS rose to $0.41 from $0.39[5]. - Net income for Q3 2025 was $39.3 million, a decrease of 3% from $40.4 million in Q3 2024[20]. - Adjusted EBITDA for the total company was $146.9 million in Q3 2025, reflecting a 3% increase from $142.7 million in Q3 2024[20]. - For the nine months ended September 30, 2025, adjusted net income is $273.6 million, up from $266.2 million in 2024[34]. - Net income for the three months ended September 30, 2025, was $39.3 million, compared to $40.4 million in 2024, while for the nine months, it was $184.8 million versus $189.7 million[38]. Segment Performance - The Electronics segment reported net sales of $465 million, an 11% increase, while the Industrial & Specialty segment saw a 16% decrease in net sales to $191 million, primarily due to divestitures[5]. - Net sales for the Electronics segment reached $465.2 million in Q3 2025, an increase of 11% compared to $419.1 million in Q3 2024[20]. - The Industrial & Specialty segment saw a decline in net sales to $190.9 million in Q3 2025, down 16% from $225.9 million in Q3 2024[20]. Cash Flow and Assets - Cash flows from operating activities for Q3 2025 were $100 million, with adjusted free cash flow of $84 million[4]. - Total assets increased to $5,045.1 million as of September 30, 2025, up from $4,873.9 million at December 31, 2024, representing a growth of 3.5%[16]. - The total current assets rose to $1,526.2 million as of September 30, 2025, compared to $1,270.0 million at December 31, 2024, marking a 20.1% increase[16]. - The company reported a net cash flow from operating activities of $100.1 million for Q3 2025, compared to $72.6 million in Q2 2025[18]. - Cash and cash equivalents at the end of Q3 2025 were $594.3 million, up from $359.4 million at the end of Q4 2024, an increase of 65.3%[18]. - Free cash flow for the three months ended September 30, 2025, was $84.1 million, compared to $85.9 million in 2024, while for the nine months, it was $173.0 million versus $177.2 million[40]. Guidance and Future Outlook - The company narrowed its full-year 2025 adjusted EBITDA guidance to between $545 million and $550 million, with adjusted free cash flow expected to be approximately $280 million[6]. - The acquisition of Micromax is anticipated to contribute meaningfully to earnings growth in 2026, although it will not impact this year's results[3]. - The company continues to explore opportunities for earnings growth, including the commercialization of Kuprion and additional potential acquisitions[3]. - The company expects cash flows from operating activities for 2025 to be approximately $326 million, with capital expenditures projected at around $65 million[40]. - The company expects full year 2025 guidance for adjusted EBITDA, but specific figures are not disclosed due to the inherent difficulty in forecasting[25]. Debt and Liabilities - Total liabilities decreased to $2,376.4 million as of September 30, 2025, from $2,475.5 million at December 31, 2024, a reduction of 4%[16]. - Total debt as of September 30, 2025, is $1,636.2 million, with a cash balance of $594.3 million, resulting in net debt of $1,041.9 million[21]. - Approximately 100% of the company's debt was fixed as of September 30, 2025, following interest rate swaps[21]. Other Financial Metrics - The adjusted EBITDA margin increased by 30 basis points to 22.4% in Q3 2025[11]. - Interest expense for the three months ended September 30, 2025, is $17.9 million, compared to $17.4 million in 2024[22]. - Capital expenditures for the three months ended September 30, 2025, are $16.5 million, an increase from $12.6 million in 2024[22]. - The non-GAAP effective tax rate is set at 20%, reflecting long-term expectations for taxes on adjusted non-GAAP earnings, lower than the statutory average of 23.7%[37]. - The company reported a restructuring expense of $1.5 million for the three months ended September 30, 2025, compared to a restructuring income of $0.1 million in 2024[38]. - Acquisition, integration, and transaction expenses for the three months ended September 30, 2025, were $11.0 million, up from $6.3 million in 2024[38]. - Adjusted common shares outstanding as of September 30, 2025, were 244.0 million, slightly down from 244.6 million in 2024[35]. - Adjusted common shares outstanding for the year-to-date average as of September 30, 2025, were 244.3 million, compared to 244.5 million in 2024[35].