Livent(LTHM) - 2021 Q3 - Quarterly Report

Glossary of Terms The glossary defines key financial and business terms and abbreviations used throughout the report - The glossary defines key terms and abbreviations used throughout the report, including financial instruments like '2025 Notes' and 'Credit Agreement', accounting standards like 'ASC' and 'ASU', and business-specific terms such as 'EV' (Electric Vehicle) and 'Nemaska Project'[10] Part I - Financial Information Item 1. Financial Statements This section presents Livent Corporation's unaudited condensed consolidated financial statements for Q3 2021 and 2020, including operations, balance sheets, cash flows, and equity, with detailed accounting notes Condensed Consolidated Statements of Operations This statement details Livent's revenues, gross margins, and net loss for the specified periods Condensed Consolidated Statements of Operations (in Millions, Except Per Share Data) | Metric | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :---------------------------------------------------------------------------------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Revenue | $103.6 | $72.6 | $297.5 | $206.0 | | Gross margin | $18.3 | $2.8 | $52.0 | $27.6 | | Income/(loss) from operations before income taxes | $2.8 | $(13.6) | $6.9 | $(18.0) | | Income tax expense/(benefit) | $15.4 | $(3.1) | $13.8 | $(5.4) | | Net loss | $(12.6) | $(10.5) | $(6.9) | $(12.6) | | Net loss per weighted average share - basic and diluted | $(0.08) | $(0.07) | $(0.05) | $(0.09) | | Weighted average common shares outstanding - basic and diluted | 161.6 | 146.3 | 152.3 | 146.2 | - Revenue increased by 43% for the three months ended September 30, 2021, and by 44% for the nine months ended September 30, 2021, compared to the respective prior periods, primarily due to higher sales volumes of lithium hydroxide, lithium carbonate, and butyllithium[13][170][178] - Gross margin significantly increased by 554% for the three months ended September 30, 2021, and by 88% for the nine months ended September 30, 2021, driven by higher sales volumes, partially offset by increased logistics, raw material, and other operating costs[13][171][179] Condensed Consolidated Statements of Comprehensive Loss This statement presents Livent's net loss and other comprehensive income/loss components, including foreign currency translation and derivative instruments Condensed Consolidated Statements of Comprehensive Loss (in Millions) | Metric | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :------------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net loss | $(12.6) | $(10.5) | $(6.9) | $(12.6) | | Foreign currency translation (loss)/gain | $(1.1) | $3.0 | $(0.2) | $1.4 | | Derivative instruments loss, net of tax | $(0.1) | $0.0 | $0.0 | $(0.2) | | Other comprehensive (loss)/income, net of tax | $(1.2) | $3.0 | $(0.2) | $1.2 | | Comprehensive loss | $(13.8) | $(7.5) | $(7.1) | $(11.4) | - Comprehensive loss for the three months ended September 30, 2021, was $(13.8) million, an increase from $(7.5) million in the prior year, primarily due to foreign currency translation losses and derivative instrument losses[16] Condensed Consolidated Balance Sheets This statement provides a snapshot of Livent's assets, liabilities, and equity as of September 30, 2021, and December 31, 2020 Condensed Consolidated Balance Sheets (in Millions) | Metric | September 30, 2021 | December 31, 2020 | | :---------------------------------------------------------------------------------------------------------------- | :----------------- | :---------------- | | ASSETS | | | | Cash and cash equivalents | $195.3 | $11.6 | | Total current assets | $432.3 | $249.8 | | Property, plant and equipment, net | $605.3 | $545.3 | | Total assets | $1,151.0 | $936.8 | | LIABILITIES AND EQUITY | | | | Total current liabilities | $88.7 | $82.3 | | Long-term debt | $240.1 | $274.6 | | Total current and long-term liabilities | $366.5 | $400.6 | | Total equity | $784.5 | $536.2 | | Total liabilities and equity | $1,151.0 | $936.8 | - Cash and cash equivalents significantly increased to $195.3 million as of September 30, 2021, from $11.6 million at December 31, 2020, largely due to proceeds from a public offering[19][73][186] - Total assets grew to $1,151.0 million from $936.8 million, while total liabilities decreased to $366.5 million from $400.6 million, primarily driven by the repayment of the Revolving Credit Facility[19][188] Condensed Consolidated Statements of Cash Flows This statement details Livent's cash flows from operating, investing, and financing activities for the nine months ended September 30, 2021 and 2020 Condensed Consolidated Statements of Cash Flows (in Millions) | Metric | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :-------------------------------- | :-------------------------- | :-------------------------- | | Cash provided by operating activities | $41.0 | $1.5 | | Cash used in investing activities | $(74.3) | $(111.8) | | Cash provided by financing activities | $216.9 | $108.2 | | Increase/(decrease) in cash and cash equivalents | $183.7 | $(2.0) | | Cash and cash equivalents, end of period | $195.3 | $14.8 | - Cash provided by operating activities increased significantly to $41.0 million for the nine months ended September 30, 2021, from $1.5 million in the prior year, driven by higher net income and decreased accounts payable payments[21][189] - Cash used in investing activities decreased to $(74.3) million from $(111.8) million, primarily due to the temporary suspension and subsequent ramp-up of capital expansion work[21][191] - Cash provided by financing activities more than doubled to $216.9 million, mainly from $252.2 million net proceeds from a public offering, partially offset by Revolving Credit Facility repayments[21][192] Condensed Consolidated Statements of Equity This statement outlines changes in Livent's equity components, including common stock, retained earnings, and accumulated other comprehensive loss Condensed Consolidated Statements of Equity (in Millions) | Metric | Balance, Dec 31, 2020 | Balance, Sep 30, 2021 | | :------------------------------------ | :-------------------- | :-------------------- | | Common Stock, $0.001 Per Share Par Value | $0.1 | $0.1 | | Capital In Excess of Par Value | $520.9 | $776.4 | | Retained Earnings | $60.3 | $53.4 | | Accumulated Other Comprehensive Loss | $(44.4) | $(44.6) | | Treasury Stock | $(0.7) | $(0.8) | | Total Equity | $536.2 | $784.5 | - Total equity increased by $248.3 million to $784.5 million as of September 30, 2021, primarily driven by $252.2 million in net proceeds from a common stock offering[27][73] - Retained earnings decreased from $60.3 million to $53.4 million, reflecting net losses during the period[27] Notes to Condensed Consolidated Financial Statements Note 1: Description of the Business This note describes Livent Corporation's business, focusing on its role as a global producer of performance lithium compounds for EVs and batteries - Livent Corporation manufactures lithium for a wide range of products, primarily lithium-based batteries, specialty polymers, and chemical synthesis applications[28] - The company is a leading global producer of performance lithium compounds, with significant growth driven by the adoption of electric vehicles (EVs) and lithium-ion batteries in Asia, Europe, and North America[28][29] Note 2: Principal Accounting Policies and Related Financial Information This note outlines Livent's principal accounting policies, including estimates, assumptions, and the early adoption of ASU No. 2020-06 - The condensed consolidated financial statements are prepared in accordance with SEC interim reporting requirements and U.S. GAAP, with certain notes condensed or omitted[30] - Estimates and assumptions, particularly regarding trade receivables, long-lived assets, income taxes, inventory, and financial instruments, could be impacted by the COVID-19 pandemic, though no material updates were required as of the report date[31][32] - The company early adopted ASU No. 2020-06 for its 2025 Convertible Senior Notes, effective January 1, 2021, using the full retrospective method[33] Note 3: Recently Issued and Adopted Accounting Pronouncements and Regulatory Items This note details Livent's early adoption of ASU 2020-06 for convertible debt and ASU 2019-12 for income taxes - Livent early adopted ASU 2020-06 on January 1, 2021, using the full retrospective method, which simplifies accounting for convertible debt instruments by reporting them as a single liability and requiring the if-converted method for EPS calculations[37] - The adoption of ASU 2020-06 resulted in adjustments to retained earnings, additional paid-in capital, long-term debt, and deferred income taxes on the consolidated balance sheet[37] - The company also adopted ASU No. 2019-12, Simplifying the Accounting for Income Taxes, as of January 1, 2021, which did not have a material impact on the financial statements[38] Note 4: Revenue Recognition This note provides disaggregated revenue information by major geographical region and product category, highlighting customer concentration Disaggregated Revenue by Major Geographical Region (in Millions) | Region | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :---------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | North America | $20.0 | $11.0 | $63.4 | $40.5 | | Europe, Middle East & Africa | $14.2 | $9.8 | $46.0 | $32.3 | | Asia Pacific | $69.4 | $51.8 | $188.1 | $133.1 | | Total Revenue | $103.6 | $72.6 | $297.5 | $206.0 | Disaggregated Revenue by Major Product Category (in Millions) | Product Category | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :---------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Lithium Hydroxide | $50.7 | $43.9 | $160.5 | $115.4 | | Butyllithium | $27.4 | $19.6 | $76.1 | $62.4 | | High Purity Lithium Metal and Other Specialty Compounds | $9.8 | $7.1 | $27.6 | $23.0 | | Lithium Carbonate and Lithium Chloride | $15.7 | $2.0 | $33.3 | $5.2 | | Total Revenue | $103.6 | $72.6 | $297.5 | $206.0 | - For the three months ended September 30, 2021, one customer accounted for approximately 35% of total revenue, and the top 10 customers accounted for approximately 69% of total revenue, indicating significant customer concentration[42] Note 5: Inventories, Net This note presents the breakdown of Livent's inventories, net, including finished goods, semi-finished goods, and raw materials Inventories, Net (in Millions) | Category | September 30, 2021 | December 31, 2020 | | :------------------------ | :----------------- | :---------------- | | Finished goods | $35.0 | $36.1 | | Semi-finished goods | $41.3 | $46.2 | | Raw materials, supplies and other | $33.9 | $23.3 | | Inventory, net | $110.2 | $105.6 | - Total inventory, net, increased to $110.2 million as of September 30, 2021, from $105.6 million at December 31, 2020, primarily driven by an increase in raw materials, supplies, and other inventory[47] Note 6: Investments This note details Livent's equity interest in Québec Lithium Partners (QLP) and its accounting as an equity method investment - Livent holds a 50% equity interest in Québec Lithium Partners (QLP), a joint venture for the Nemaska Project, which is accounted for as an equity method investment[49] - The company recorded a $1.0 million loss for the three months and a $3.7 million loss for the nine months ended September 30, 2021, from its equity interest in QLP[49] Note 7: Restructuring and Other Charges This note outlines Livent's restructuring and other charges, including severance-related costs and environmental remediation expenses Restructuring and Other Charges (in Millions) | Category | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Severance-related and exit costs | $0.1 | $0.9 | $0.2 | $5.8 | | Environmental remediation | $0.1 | $0.1 | $0.3 | $0.4 | | Other | $0.9 | $3.4 | $2.9 | $3.9 | | Total | $1.1 | $4.4 | $3.4 | $10.1 | - Total restructuring and other charges decreased to $1.1 million for the three months and $3.4 million for the nine months ended September 30, 2021, from $4.4 million and $10.1 million in the prior year periods, respectively[50] - The decrease was primarily due to lower severance-related costs and the finalization of IPO litigation settlement in Q2 2021, which had incurred a $2.5 million accrual in Q3 2020[50][172] Note 8: Income Taxes This note details Livent's income tax expense/benefit and effective tax rate, explaining impacts from foreign currency and tax law changes Income Tax Expense/(Benefit) and Effective Tax Rate | Period | Income Tax Expense/(Benefit) (in Millions) | Effective Tax Rate | | :-------------------------- | :--------------------------------------- | :----------------- | | 3 Months Ended Sep 30, 2021 | $15.4 | 540.5% | | 3 Months Ended Sep 30, 2020 | $(3.1) | 22.8% | | 9 Months Ended Sep 30, 2021 | $13.8 | 198.7% | | 9 Months Ended Sep 30, 2020 | $(5.4) | 30.0% | - The significant increase in income tax expense for Q3 2021 and YTD 2021 was primarily due to foreign currency impacts in Argentina, including inflationary tax adjustments, and an increase in income from operations[54][175][183] - An amendment to Argentina's income tax law in June 2021, introducing new progressive corporate income tax rates, resulted in a tax benefit of $(2.2) million for the revaluation of Argentina net deferred tax assets for the nine months ended September 30, 2021[183] Note 9: Debt This note provides details on Livent's long-term debt, including the Revolving Credit Facility and Convertible Senior Notes due 2025 Long-Term Debt (in Millions) | Debt Type | September 30, 2021 | December 31, 2020 | | :-------------------------------- | :----------------- | :---------------- | | Revolving Credit Facility | $0.0 | $35.6 | | 4.125% Convertible Senior Notes due 2025 | $245.8 | $245.8 | | Transaction costs - 2025 Notes | $(5.7) | $(6.8) | | Total long-term debt | $240.1 | $274.6 | - Total long-term debt decreased to $240.1 million as of September 30, 2021, from $274.6 million at December 31, 2020, primarily due to the repayment of the Revolving Credit Facility using proceeds from the June 2021 public offering[55][68][188] - The company early adopted ASU 2020-06 retrospectively, which now reports the 2025 Notes as a single liability instrument, impacting interest expense and balance sheet classifications[57][60][62] - As of September 30, 2021, Livent was in compliance with all debt covenants, including a maximum allowable first lien leverage ratio of 3.5 and a minimum allowable interest coverage ratio of 3.5[69][188] Note 10: Equity This note details Livent's equity components, including common stock issuance, treasury shares, and accumulated other comprehensive loss Common Stock Issued and Outstanding | Metric | Balance at Dec 31, 2020 | Balance at Sep 30, 2021 | | :---------------------------------------- | :---------------------- | :---------------------- | | Issued Shares | 146,461,249 | 161,676,147 | | Treasury Shares | (99,268) | (101,131) | | Outstanding Shares | 146,361,981 | 161,575,016 | - In June 2021, Livent issued 14,950,000 shares of common stock in an underwritten public offering, generating net proceeds of $252.2 million, which were recorded to paid-in capital[73] Accumulated Other Comprehensive Loss (AOCL), Net of Tax (in Millions) | Metric | Dec 31, 2020 | Sep 30, 2021 | | :---------------------------------------- | :----------- | :----------- | | Foreign currency adjustments | $(44.4) | $(44.6) | | Derivative Instruments | $0.0 | $0.0 | | Total AOCL, net of tax | $(44.4) | $(44.6) | - No dividends were paid for the three and nine months ended September 30, 2021 and 2020, and none are expected in the foreseeable future[80] Note 11: Loss Per Share This note explains Livent's basic and diluted loss per common share, including the treatment of potentially dilutive securities Basic and Diluted Loss Per Common Share | Metric | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :---------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net loss (in Millions) | $(12.6) | $(10.5) | $(6.9) | $(12.6) | | Weighted average common shares outstanding (in Millions) | 161.6 | 146.3 | 152.3 | 146.2 | | Net loss per weighted average share - basic and diluted | $(0.08) | $(0.07) | $(0.05) | $(0.09) | - Diluted EPS considers potentially dilutive securities (stock options, RSUs, and 2025 Notes) using the if-converted method, but these are excluded when their inclusion would have an anti-dilutive effect due to a net loss[82] Total Antidilutive Weighted Average Share Equivalents (in Millions) | Period | Share equivalents from share-based plans | Share equivalents from 2025 Notes | Total | | :-------------------------- | :------------------------------------- | :-------------------------------- | :---- | | 3 Months Ended Sep 30, 2021 | 1.5 | 45.3 | 46.8 | | 3 Months Ended Sep 30, 2020 | 0.6 | 28.1 | 28.7 | | 9 Months Ended Sep 30, 2021 | 1.4 | 44.0 | 45.4 | | 9 Months Ended Sep 30, 2020 | 0.6 | 10.1 | 10.7 | Note 12: Financial Instruments, Risk Management and Fair Value Measurements This note describes Livent's use of derivative financial instruments for risk management and fair value measurements of debt - Livent uses derivative financial instruments, primarily foreign exchange forward contracts, to mitigate currency risk from international operations in currencies like the Euro, British pound, Chinese yuan, and Japanese yen[93][95] - Changes in the fair value of cash flow hedges are recorded in accumulated other comprehensive loss (AOCL) and reclassified to earnings as the hedged item affects earnings[97] - As of September 30, 2021, the estimated fair value of debt was $292.0 million, with a carrying amount of $240.1 million, and the 2025 Notes are classified as Level 2 in the fair value hierarchy[92] Note 13: Commitments and Contingencies This note outlines Livent's commitments and contingencies, including legal proceedings, environmental liabilities, and operating lease obligations - Livent records reserves for estimated losses from contingencies when a loss is probable and estimable, adjusting assessments as new information becomes available[115] - The company is subject to an audit by the Argentine Customs Authority regarding lithium carbonate exports from 2015-2017, with a reasonably possible liability that cannot currently be estimated[118] Operating Lease Liabilities Maturity Analysis (in Millions) | Period | Undiscounted cash flows | | :---------------- | :---------------------- | | Remainder of 2021 | $0.4 | | 2022 | $1.3 | | 2023 | $1.1 | | 2024 | $1.1 | | 2025 | $1.1 | | Thereafter | $3.0 | | Total future minimum lease payments | $8.0 | | Less: Imputed interest | $(1.5) | | Total | $6.5 | - In Q1 2021, Livent terminated a sublease for its corporate headquarters, removing a $10.9 million ROU asset and lease liability, and executed a new five-year sublease in Q2 2021, recording a $2.1 million ROU asset and lease liability[124] Note 14: Supplemental Information This note provides supplemental financial details on prepaid assets, other assets, and various accrued and long-term liabilities Prepaid and Other Current Assets (in Millions) | Category | September 30, 2021 | December 31, 2020 | | :-------------------------- | :----------------- | :---------------- | | Argentina government receivable | $11.8 | $10.8 | | Tax related items | $15.4 | $15.7 | | Other receivables | $3.0 | $8.6 | | Prepaid expenses | $7.6 | $8.2 | | Other current assets | $6.0 | $12.8 | | Total | $43.8 | $56.3 | Other Assets (in Millions) | Category | September 30, 2021 | December 31, 2020 | | :-------------------------- | :----------------- | :---------------- | | Argentina government receivable | $51.0 | $55.8 | | Advance to contract manufacturers | $15.6 | $16.3 | | Capitalized software, net | $1.5 | $1.8 | | Tax related items | $2.5 | $2.7 | | Other assets | $11.0 | $11.8 | | Total | $81.6 | $88.4 | Accrued and Other Current Liabilities (in Millions) | Category | September 30, 2021 | December 31, 2020 | | :-------------------------- | :----------------- | :---------------- | | Plant restructuring reserves | $3.2 | $3.2 | | Retirement liability - 401K | $0.6 | $2.6 | | Accrued payroll | $11.5 | $12.5 | | Severance related | $0.2 | $2.5 | | Environmental reserves, current | $0.5 | $0.6 | | Other accrued and other current liabilities | $19.7 | $15.3 | | Total | $35.7 | $36.7 | Other Long-Term Liabilities (in Millions) | Category | September 30, 2021 | December 31, 2020 | | :---------------------------------------- | :----------------- | :---------------- | | Accrued investment in unconsolidated affiliate | $6.2 | $6.2 | | Asset retirement obligations | $0.3 | $0.3 | | Contingencies related to uncertain tax positions | $3.6 | $3.4 | | Deferred compensation plan obligation | $5.5 | $4.5 | | Self-insurance reserves | $1.5 | $1.5 | | Other long-term liabilities | $1.1 | $1.3 | | Total | $18.2 | $17.2 | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's analysis of Livent's financial condition, operations, liquidity, and market risks for Q3 2021, including COVID-19 impacts Special Note Regarding Forward-Looking Information This note cautions readers about forward-looking statements, highlighting risks from the COVID-19 pandemic, market demand, and supply chain disruptions - The report contains forward-looking statements based on current views and assumptions, which involve known and unknown risks and uncertainties that could cause actual results to differ materially[136] - A significant factor influencing future results is the potential adverse effect of the COVID-19 pandemic on the company's financial condition, operations, customers, and supply chain, with heightened risks due to ongoing impacts[137][139] - Key risks include declining demand for EV lithium compounds, supply chain disruptions, price volatility, competition, and risks associated with international operations, particularly in Argentina and China[138] Application of Critical Accounting Policies This note discusses management's critical accounting policies, estimates, and judgments, particularly concerning revenue, assets, and income taxes - The preparation of financial statements requires management to make estimates and judgments, with critical accounting policies including revenue recognition and trade receivables, impairment and valuation of long-lived assets, and income taxes[141][143][145] - The COVID-19 pandemic introduces uncertainty to these estimates, but as of the report date, no specific events required material updates to assumptions or asset/liability carrying values[144][146] Recently Issued and Adopted Accounting Pronouncements and Regulatory Items This section refers to Note 3 for details on recently issued and adopted accounting pronouncements and regulatory items - This section refers to Note 3 of the condensed consolidated financial statements for a discussion of recently adopted accounting guidance and other new accounting guidance[147] Overview This section provides an overview of Livent's business, focusing on its role in the EV battery market and the impact of the COVID-19 pandemic - Livent is a fully integrated lithium company focused on supplying high-performance lithium compounds to the growing Electric Vehicle (EV) battery market, while maintaining its position in butyllithium and high-purity lithium metal[148][149] - For Q3 2021, revenue increased by 43% to $103.6 million, and Adjusted EBITDA rose to $14.9 million from $0.9 million in Q3 2020, driven by higher sales volumes[151] - The COVID-19 pandemic continued to negatively impact operations, supply chains, and logistics, causing disruptions, increased costs, and delays in capital expansion work in Argentina and the United States[150][152][154] - The company expects higher volumes and slightly higher average pricing for lithium products in 2021, with lower unit costs partially offset by increased logistics, solvents, and raw material costs[165] Results of Operations This section analyzes Livent's revenue, gross margin, net loss, and Adjusted EBITDA for Q3 2021 and YTD, explaining key drivers and cost pressures Key Financial Highlights (in Millions) | Metric | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :---------------------------------------------------------------------------------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Revenue | $103.6 | $72.6 | $297.5 | $206.0 | | Gross margin | $18.3 | $2.8 | $52.0 | $27.6 | | Net loss | $(12.6) | $(10.5) | $(6.9) | $(12.6) | | EBITDA (Non-GAAP) | $9.0 | $(7.2) | $25.9 | $0.0 | | Adjusted EBITDA (Non-GAAP) | $14.9 | $0.9 | $42.0 | $16.7 | - Revenue increased by 43% in Q3 2021 and 44% YTD 2021, driven by higher sales volumes of lithium hydroxide, lithium carbonate, and butyllithium due to increased customer demand[170][178] - Gross margin saw a significant increase of 554% in Q3 2021 and 88% YTD 2021, primarily from higher sales volumes, partially offset by increased logistics, raw material, and other operating costs, including COVID-19 related expenses[171][179] - Net loss for Q3 2021 was $(12.6) million, compared to $(10.5) million in Q3 2020, mainly due to higher Argentina tax expense from inflationary adjustments and increased operating costs, partially offset by higher sales volumes and lower restructuring charges[176][177] - Adjusted EBITDA significantly improved to $14.9 million in Q3 2021 and $42.0 million YTD 2021, reflecting stronger sales volumes despite cost pressures[168] Liquidity and Capital Resources This section discusses Livent's cash position, debt, operating cash flow, capital expenditures, and overall liquidity for the next 12 months - Cash and cash equivalents increased to $195.3 million at September 30, 2021, from $11.6 million at December 31, 2020, with $12.5 million held by foreign subsidiaries[186] - The company repaid all outstanding amounts under its $400 million Revolving Credit Facility in June 2021 using proceeds from a public offering, resulting in $385.6 million remaining borrowing capacity[187][188][193] - Cash provided by operating activities was $41.0 million YTD 2021, a significant increase from $1.5 million YTD 2020, driven by higher net income and decreased accounts payable payments[189] - Capital expenditures for 2021 are estimated at $125 million, as the company resumed capital expansion work in Argentina and the United States in Q2 2021 after a temporary suspension due to COVID-19[191][195] - Livent believes its available cash, cash from operations, and Revolving Credit Facility will provide adequate liquidity for the next 12 months[197] Commitments and Contingencies This section refers to Note 13 of the condensed consolidated financial statements for details on commitments and contingencies - This section refers to Note 13 of the condensed consolidated financial statements for details on commitments and contingencies[199] Contractual Commitments This section states that there have been no significant changes to contractual commitments since the 2020 Annual Report on Form 10-K - There have been no significant changes to contractual commitments during the period ended September 30, 2021, from those disclosed in the 2020 Annual Report on Form 10-K[200] Climate Change This section refers to the 2020 Annual Report on Form 10-K for a detailed discussion related to climate change - A detailed discussion related to climate change can be found in Part II, Item 7 of the 2020 Annual Report on Form 10-K[201] Off-Balance Sheet Arrangements This section confirms Livent has no material off-balance sheet arrangements impacting its financial condition or liquidity - Livent does not have any off-balance sheet arrangements that are material or reasonably likely to have a current or future effect on its financial condition, results of operations, or liquidity[202] Derivative Financial Instruments and Market Risks This section details Livent's management of market risks, including commodity prices, interest rates, and foreign currency exchange rates - Livent manages market risks related to commodity prices, interest rates, and foreign currency exchange rates through a controlled risk management program, including derivative contracts with major financial institutions[203] - The company is exposed to foreign currency risk from operations in various countries, primarily hedging with foreign exchange forward contracts, but does not hedge Argentine peso risks due to limited availability and high cost[205] - A sensitivity analysis indicates that a 10% change in foreign currency exchange rates would result in a net liability position of $(0.6) million with strengthening and a net asset position of $0.6 million with weakening as of September 30, 2021[206][207] - As of September 30, 2021, Livent had no interest rate swap agreements, and a one percentage point increase or decrease in interest rates would have impacted gross interest expense by $0.2 million for the nine months ended September 30, 2021[208][209] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section refers to the 'Derivative Financial Instruments and Market Risks' discussion within Item 2 for market risk disclosures - The required information for this item is provided in the 'Derivative Financial Instruments and Market Risks' section under Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations[210] Item 4. Controls and Procedures Management, including the CEO and CFO, concluded that Livent's disclosure controls and procedures were effective as of September 30, 2021, and there were no material changes in internal control over financial reporting during the quarter - As of September 30, 2021, the company's disclosure controls and procedures were deemed effective to provide reasonable assurance that required information is recorded, processed, summarized, and reported timely[211] - There were no changes in internal control over financial reporting during the quarter ended September 30, 2021, that materially affected or are reasonably likely to materially affect, the company's internal control over financial reporting[212] Part II - Other Information Item 1. Legal Proceedings This section states Livent is involved in ordinary course legal proceedings, with no expected material adverse effect on financial position - The company is involved in legal proceedings, including workers' compensation matters, in the ordinary course of business[214] - Based on available information and established reserves, the ultimate resolution of any known legal proceeding is not expected to have a material adverse effect on financial position, liquidity, or results of operations[214] - There are no material changes from legal proceedings previously disclosed in the 2020 Annual Report on Form 10-K, except as noted in Note 13 to the financial statements[214] Item 1A. Risk Factors This section advises readers to consider risk factors from the 2020 Annual Report on Form 10-K and cautions against undue reliance on forward-looking statements - Readers should carefully consider the risk factors discussed in Part I, Item 1A of the 2020 Annual Report on Form 10-K[215] - Additional risks and uncertainties not currently known or deemed immaterial could also adversely affect the business, financial condition, or future results[215] - The company cautions against undue reliance on forward-looking statements and does not undertake to publicly revise or update them[216] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section details common stock repurchases by the Livent NQSP trustee for employee investments, not part of a public program Issuer Purchases of Equity Securities (Q3 2021) | Period | Total Number of Shares Purchased | Average Price Paid Per Share | | :-------------------------- | :------------------------------- | :--------------------------- | | July 1 through July 31, 2021 | 206 | $19.52 | | August 1 through August 31, 2021 | 187 | $24.22 | | September 1 through September 30, 2021 | 172 | $24.64 | | Total Q3 2021 | 565 | $22.64 | - Shares of Livent common stock are reacquired by the trustee of the Livent NQSP through open-market purchases for employee investments and are recorded as Treasury stock[218] - Livent Corporation does not have any publicly announced stock repurchase programs[219] Item 6. Exhibits This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including interactive data files and certifying statements - Exhibits include Interactive Data Files (101, 104) and Certifying Statements from the CEO and CFO (31.1, 31.2, 32.1, 32.2) as required by the Sarbanes-Oxley Act[221] Signatures This section confirms the report's due signing by Livent Corporation's Vice President and Chief Financial Officer on November 4, 2021 - The report is duly signed on behalf of Livent Corporation by Gilberto Antoniazzi, Vice President and Chief Financial Officer, on November 4, 2021, in accordance with the Securities Exchange Act of 1934[223][224]