Tronox Reports First Quarter 2024 Financial Results
Performance exceeded expectations as demand trajectory outpaced normal seasonal levels against a backdrop of improving production costs
First Quarter 2024 Financial Highlights:
- Produced revenue of
$774 million , a 13% increase compared to the prior quarter, or a 9% increase compared to the prior year - Generated income from operations of
$41 million , and a net loss of$9 million ; adjusted net loss was$7 million (non-GAAP) - GAAP diluted loss per share of
$0.06 ; Adjusted diluted loss per share was$0.05 (non-GAAP) - Delivered Adjusted EBITDA of
$131 million , exceeding previously issued guidance of$100-120 million , and an Adjusted EBITDA margin of 16.9%, slightly above the guided range (non-GAAP) - Invested
$76 million in capital expenditures in the quarter
Second Quarter 2024 Outlook:
- TiO2 volumes expected to increase 7-10% compared to Q1 2024
- Zircon volumes expected to be relatively flat compared to Q1 2024
- Adjusted EBITDA expected to be
$160-180 million and Adjusted EBITDA margin to be in the range of 20%
This outlook is based on
_____ |
|
Note: For the Company's guidance with respect to second quarter 2024 non-GAAP measures, we are not able to provide without unreasonable effort the most directly comparable GAAP financial measure, or reconciliation to such GAAP financial measure, because certain items that impact such measures are uncertain, out of the Company's control or cannot be reasonably predicted. |
Summary of Select Financial Results for the Quarter Ending |
||||||
|
||||||
($M unless otherwise noted) |
|
Q1 2024 |
Q1 2023 |
Y-o-Y % ∆ |
Q4 2023 |
Q-o-Q % ∆ |
Revenue |
|
|
|
9 % |
|
13 % |
TiO 2 |
|
|
8 % |
|
17 % |
|
Zircon |
|
|
|
22 % |
|
54 % |
Other products |
|
|
7 % |
|
(26) % |
|
Income from operations |
|
|
|
(34) % |
|
413 % |
Net (Loss) Income |
|
( |
|
n/m |
( |
n/m |
Net (Loss) Income attributable to |
( |
|
n/m |
( |
n/m |
|
GAAP diluted (loss) earnings per share |
( |
|
n/m |
( |
n/m |
|
Adjusted diluted (loss) earnings per share |
( |
|
n/m |
( |
n/m |
|
Adjusted EBITDA |
|
|
|
(10) % |
|
39 % |
Adjusted EBITDA Margin % |
|
16.9 % |
20.6 % |
(370) bps |
13.7 % |
320 bps |
Free cash flow |
|
( |
( |
n/m |
|
n/m |
|
|
|
|
|
|
|
|
Y-o-Y % ∆ |
Q-o-Q % ∆ |
||||
|
Volume |
Price / Mix |
FX |
Volume |
Price / Mix |
FX |
TiO 2 |
18 % |
(10) % |
0 % |
18 % |
(1) % |
0 % |
Zircon |
43 % |
(21) % |
— |
54 % |
0 % |
— |
CEO's Remarks and Outlook
Chief Executive Officer
"On the operational side, we incurred significant costs in 2023 from running our assets at low utilization rates due to soft underlying demand. As we saw the market start to turn late last year, we began increasing our operating rates. As a result, our first quarter manufacturing costs improved when compared to both the prior year and prior quarter. As the high-cost inventory continues to move through our internal supply chain, efficiencies from investments made in the business to reduce costs will enable margins to return to levels realized prior to the downturn. The first quarter has been a true inflection point, and we believe the trends on both the market side and in reducing our costs will continue going forward. We are well on our way to delivering a step change in earnings power, having already worked through much of the remaining high cost inventory on the balance sheet."
First Quarter 2024 Results
(Comparisons are to prior year (Q1 2024 vs. Q1 2023) unless otherwise noted)
The Company recorded first quarter revenue of
Revenue from TiO2 sales was
Zircon revenue increased 22% to
Revenue from other products was
Net loss attributable to
Adjusted EBITDA of
Sequentially, Adjusted EBITDA increased 39% due to improved absorption from higher production volumes, the absence of non-repeating charges in the prior quarter and higher sales volumes; this was partially offset by headwinds from product pricing and mix impacts, other company costs, exchange rates and higher freight costs due to
The Company's selling, general and administrative expenses were
Balance Sheet, Cash Flow and Capital Allocation
Free cash flow for the quarter was a use of
Sustainability
Webcast Conference Call
Internet Broadcast: http://investor.tronox.com
Dial-in Telephone Numbers:
International: +44 800 2797 040
Conference ID: 98071
Conference Call Presentation Slides will be used during the conference call and made available on our website: http://investor.tronox.com
Conference Call Replay: Available via the internet and telephone beginning on
Internet Replay: http://investor.tronox.com
US Toll Free: +1 (888) 660-6264
International: +44 20 8609 4320
Replay Access Code: 98071 #
About
Cautionary Statement about Forward-Looking Statements
Statements in this release that are not historical are forward-looking statements within the meaning of the
Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for our management to predict all risks and uncertainties, nor can management assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance, synergies or achievements. Neither we nor any other person assumes responsibility for the accuracy or completeness of any of these forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. Unless otherwise required by applicable laws, we undertake no obligation to update or revise any forward-looking statements, whether because of new information or future developments.
Use of Non-GAAP Information
To provide investors and others with additional information regarding the financial results of
Media Contact:
+1.636.751.4057
Investor Contact:
+1.646.960.6598
|
|||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS ( |
|||
(UNAUDITED) |
|||
(Millions of |
|||
|
|
|
|
|
|
|
|
|
Three Months Ended |
||
|
2024 |
|
2023 |
Net sales |
$ 774 |
|
$ 708 |
Cost of goods sold |
654 |
|
575 |
Gross profit |
120 |
|
133 |
Selling, general and administrative expenses |
79 |
|
71 |
Income from operations |
41 |
|
62 |
Interest expense |
(42) |
|
(33) |
Interest income |
4 |
|
3 |
Other (expense) income, net |
(1) |
|
2 |
Income before income taxes |
2 |
|
34 |
Income tax provision |
(11) |
|
(9) |
Net (loss) income |
(9) |
|
25 |
Net income attributable to noncontrolling interest |
— |
|
2 |
Net (loss) income attributable to |
$ (9) |
|
$ 23 |
|
|
|
|
|
|
|
|
(Loss) Earnings per share: |
|
|
|
Basic |
$ (0.06) |
|
$ 0.15 |
Diluted |
$ (0.06) |
|
$ 0.15 |
|
|
|
|
Weighted average shares outstanding, basic (in thousands) |
157,331 |
|
155,175 |
Weighted average shares outstanding, diluted (in thousands) |
157,331 |
|
156,641 |
|
|
|
|
Other Operating Data: |
|
|
|
Capital expenditures |
76 |
|
93 |
Depreciation, depletion and amortization expense |
72 |
|
71 |
|
|
|
|
|
||||
RECONCILIATION OF NON- |
||||
(UNAUDITED) |
||||
(Millions of |
||||
|
|
|
|
|
RECONCILIATION OF NET (LOSS) INCOME ATTRIBUTABLE TO TRONOX HOLDINGS PLC ( |
||||
TO ADJUSTED NET INCOME ATTRIBUTABLE TO TRONOX HOLDINGS PLC (NON- |
||||
|
||||
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
||
|
2024 |
|
2023 |
|
|
|
|
|
|
Net (loss) income attributable to |
$ (9) |
|
$ 23 |
|
|
|
|
|
|
Other (a) |
2 |
|
1 |
|
Adjusted net (loss) income attributable to |
$ (7) |
|
$ 24 |
|
|
|
|
|
|
Diluted net (loss) income per share ( |
$ (0.06) |
|
$ 0.15 |
|
|
|
|
|
|
Other, per share |
0.01 |
|
— |
|
Diluted adjusted net (loss) income per share attributable to |
$ (0.05) |
|
$ 0.15 |
|
|
|
|
|
|
Weighted average shares outstanding, diluted (in thousands) |
157,331 |
|
156,641 |
|
|
|
|
|
|
|
|
|
|
|
(1) Only certain other items have been tax impacted whereas certain other items were not tax impacted as they were recorded in jurisdictions with full valuation allowances. |
||||
(2) Diluted adjusted net (loss) income per share attributable to |
||||
(a) Represents other activity not representative of the ongoing operations of the Company. |
||||
|
|
|
|
|
|
|||
CONDENSED CONSOLIDATED BALANCE SHEETS |
|||
(UNAUDITED) |
|||
(Millions of |
|||
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
Current Assets |
|
|
|
Cash and cash equivalents |
$ 152 |
|
$ 273 |
Restricted cash |
2 |
|
— |
Accounts receivable (net of allowance for credit losses of |
378 |
|
290 |
Inventories, net |
1,403 |
|
1,421 |
Prepaid and other assets |
214 |
|
141 |
Income taxes receivable |
10 |
|
10 |
Total current assets |
2,159 |
|
2,135 |
|
|
|
|
Noncurrent Assets |
|
|
|
Property, plant and equipment, net |
1,804 |
|
1,835 |
Mineral leaseholds, net |
639 |
|
654 |
Intangible assets, net |
243 |
|
243 |
Lease right of use assets, net |
134 |
|
132 |
Deferred tax assets |
915 |
|
917 |
Other long-term assets |
128 |
|
218 |
Total assets |
$ 6,022 |
|
$ 6,134 |
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
Current Liabilities |
|
|
|
Accounts payable |
$ 398 |
|
$ 461 |
Accrued liabilities |
240 |
|
230 |
Short-term lease liabilities |
22 |
|
24 |
Short-term debt |
4 |
|
11 |
Long-term debt due within one year |
27 |
|
27 |
Total current liabilities |
691 |
|
753 |
|
|
|
|
Noncurrent Liabilities |
|
|
|
Long-term debt, net |
2,780 |
|
2,786 |
Pension and postretirement healthcare benefits |
103 |
|
104 |
Asset retirement obligations |
176 |
|
172 |
Environmental liabilities |
48 |
|
48 |
Long-term lease liabilities |
105 |
|
103 |
Deferred tax liabilities |
156 |
|
149 |
Other long-term liabilities |
38 |
|
39 |
Total liabilities |
4,097 |
|
4,154 |
|
|
|
|
Commitments and Contingencies |
|
|
|
Shareholders' Equity |
|
|
|
|
2 |
|
2 |
Capital in excess of par value |
2,070 |
|
2,064 |
Retained earnings |
655 |
|
684 |
Accumulated other comprehensive loss |
(845) |
|
(814) |
|
1,882 |
|
1,936 |
Noncontrolling interest |
43 |
|
44 |
Total equity |
1,925 |
|
1,980 |
Total liabilities and equity |
$ 6,022 |
|
$ 6,134 |
|
|
|
|
|
|||
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||
(UNAUDITED) |
|||
(Millions of |
|||
|
|
|
|
|
|
|
|
|
Three Months Ended |
||
|
2024 |
|
2023 |
Cash Flows from Operating Activities: |
|
|
|
Net (loss) income |
$ (9) |
|
$ 25 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: |
|
|
|
Depreciation, depletion and amortization |
72 |
|
71 |
Deferred income taxes |
11 |
|
(1) |
Share-based compensation expense |
6 |
|
6 |
Amortization of deferred debt issuance costs and discount on debt |
2 |
|
2 |
Other non-cash items affecting net (loss) income |
16 |
|
16 |
Changes in assets and liabilities: |
|
|
|
Increase in accounts receivable, net of allowance for credit losses |
(94) |
|
(41) |
Decrease (increase) in inventories, net |
11 |
|
(83) |
Decrease in prepaid and other assets |
16 |
|
2 |
Decrease in accounts payable and accrued liabilities |
(49) |
|
(68) |
Net changes in income tax payables and receivables |
(3) |
|
2 |
Changes in other non-current assets and liabilities |
(8) |
|
(10) |
Cash used in operating activities |
(29) |
|
(79) |
|
|
|
|
Cash Flows from Investing Activities: |
|
|
|
Capital expenditures |
(76) |
|
(93) |
Proceeds from sale of assets |
- |
|
2 |
Cash used in investing activities |
(76) |
|
(91) |
|
|
|
|
Cash Flows from Financing Activities: |
|
|
|
Repayments of short-term debt |
(6) |
|
(26) |
Repayments of long-term debt |
(5) |
|
(4) |
Proceeds from short-term debt |
- |
|
152 |
Dividends paid |
(1) |
|
(2) |
Cash (used in) provided by financing activities |
(12) |
|
120 |
|
|
|
|
Effects of exchange rate changes on cash and cash equivalents and restricted cash |
(2) |
|
1 |
|
|
|
|
Net decrease in cash and cash equivalents and restricted cash |
(119) |
|
(49) |
Cash and cash equivalents and restricted cash at beginning of period |
273 |
|
164 |
Cash and cash equivalents and restricted cash at end of period |
$ 154 |
|
$ 115 |
|
|
|
|
|
|||
RECONCILIATION OF NET (LOSS) INCOME TO EBITDA AND ADJUSTED EBITDA, ADJUSTED EBITDA AS A % OF |
|||
(UNAUDITED) |
|||
(Millions of |
|||
|
|
|
|
|
|
|
|
|
Three Months Ended |
||
|
2024 |
|
2023 |
|
|
|
|
Net (loss) income ( |
$ (9) |
|
$ 25 |
Interest expense |
42 |
|
33 |
Interest income |
(4) |
|
(3) |
Income tax provision (benefit) |
11 |
|
9 |
Depreciation, depletion and amortization expense |
72 |
|
71 |
EBITDA (non- |
112 |
|
135 |
Share-based compensation (a) |
6 |
|
6 |
Accretion expense and other adjustments to asset retirement obligations and environmental liabilities (b) |
7 |
|
2 |
Accounts receivable securitization program (c) |
3 |
|
2 |
Foreign currency remeasurement (d) |
(2) |
|
(1) |
Other items (e) |
5 |
|
2 |
Adjusted EBITDA (non- |
$ 131 |
|
$ 146 |
|
|
|
|
|
Three Months Ended |
||
|
2024 |
|
2023 |
Net sales |
$ 774 |
|
$ 708 |
Net (loss) income ( |
$ (9) |
|
$ 25 |
Net (loss) income ( |
(1.2) % |
|
3.5 % |
Adjusted EBITDA (non- |
16.9 % |
|
20.6 % |
|
|
|
|
|
|
|
|
Long-term debt, net |
$ 2,780 |
|
$ 2,786 |
Short-term debt |
4 |
|
11 |
Long-term debt due within one year |
27 |
|
27 |
(Less) Cash and cash equivalents |
(152) |
|
(273) |
Net debt |
$ 2,659 |
|
$ 2,551 |
Trailing-twelve month Adjusted EBITDA (non- |
$ 509 |
|
$ 524 |
Net debt to trailing-twelve month Adjusted EBITDA (non- |
5.2x |
|
4.9x |
|
|
|
|
|
|
|
|
(a) Represents non-cash share-based compensation. |
|||
(b) Primarily represents accretion expense and other noncash adjustments to asset retirement obligations and environmental liabilities. |
|||
(c) Primarily represents expenses associated with the Company's accounts receivable securitization program which is used as a source of liquidity in the Company's overall capital structure. |
|||
(d) Represents realized and unrealized gains and losses associated with foreign currency remeasurement related to third-party and intercompany receivables and liabilities denominated in a currency other than the functional currency of the entity holding them, which are included in "Other (expense) income, net" in the unaudited Condensed Consolidated Statements of Operations. |
|||
(e) Includes noncash pension and postretirement costs, asset retirement obligation remeasurements, asset write-offs, accretion expense and other items included in "Selling general and administrative expenses", "Cost of goods sold" and "Other (expense) income, net" in the unaudited Condensed Consolidated Statements of Operations. |
|||
|
|
|
|
|
||
FREE CASH FLOW (NON- |
||
(UNAUDITED) |
||
(Millions of |
||
|
|
|
|
|
|
|
|
|
|
|
|
The following table reconciles cash used in operating activities to free cash flow for the |
||
|
|
|
|
|
Three Months Ended |
Cash used in operating activities |
|
$ (29) |
Capital expenditures |
|
(76) |
Free cash flow (non- |
|
$ (105) |
|
|
|
|
|
|
|
||||||||||
RECONCILIATION OF TRAILING TWELVE MONTH NET (LOSS) INCOME TO EBITDA AND ADJUSTED EBITDA (NON- |
||||||||||
(UNAUDITED) |
||||||||||
(Millions of |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Trailing Twelve Month |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income ( |
|
$ (269) |
|
$ (14) |
|
$ (56) |
|
$ (9) |
|
$ (348) |
Interest expense |
|
38 |
|
42 |
|
45 |
|
42 |
|
167 |
Interest income |
|
(3) |
|
(4) |
|
(8) |
|
(4) |
|
(19) |
Income tax provision |
|
322 |
|
8 |
|
24 |
|
11 |
|
365 |
Depreciation, depletion and amortization expense |
|
68 |
|
67 |
|
69 |
|
72 |
|
276 |
EBITDA (non- |
|
156 |
|
99 |
|
74 |
|
112 |
|
441 |
Share-based compensation (a) |
|
5 |
|
4 |
|
6 |
|
6 |
|
21 |
Foreign currency remeasurement (b) |
|
(5) |
|
(1) |
|
1 |
|
(2) |
|
(7) |
Accretion expense and other adjustments to asset |
|
6 |
|
6 |
|
8 |
|
7 |
|
27 |
Accounts receivable securitization program (d) |
|
3 |
|
4 |
|
3 |
|
3 |
|
13 |
Other items (e) |
|
3 |
|
4 |
|
2 |
|
5 |
|
14 |
Adjusted EBITDA (non- |
|
$ 168 |
|
$ 116 |
|
$ 94 |
|
$ 131 |
|
$ 509 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Represents non-cash share-based compensation. |
||||||||||
(b) Represents realized and unrealized gains and losses associated with foreign currency remeasurement related to third-party and intercompany receivables and liabilities denominated in a currency other than the functional currency of the entity holding them, which are included in "Other (expense) income, net" in the unaudited Condensed Consolidated Statements of Operations. |
||||||||||
(c) Primarily represents accretion expense and other noncash adjustments to asset retirement obligations and environmental liabilities. |
||||||||||
(d) Primarily represents expenses associated with the Company's accounts receivable securitization program which is used as a source of liquidity in the Company's overall capital structure. |
||||||||||
(e) Includes noncash pension and postretirement costs, asset write-offs, severance expense and other items included in "Selling general and administrative expenses", "Cost of goods sold" and "Other (expense) income, net" in the unaudited Condensed Consolidated Statements of Operations. |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
View original content to download multimedia:https://www.prnewswire.com/news-releases/tronox-reports-first-quarter-2024-financial-results-302133675.html
SOURCE