Kronos Worldwide Reports Third Quarter 2021 Results
04 Noviembre 2021 - 2:15PM
Kronos Worldwide, Inc. (NYSE:KRO) today reported net income of
$36.0 million, or $.31 per share, in the third quarter of 2021
compared to $8.1 million, or $.07 per share, in the third quarter
of 2020. For the first nine months of 2021, Kronos Worldwide
reported net income of $81.3 million, or $.70 per share, compared
to $53.7 million, or $.46 per share in the first nine months of
2020. Net income in the third quarter and the first
nine months of 2021 was higher than in the comparable 2020 periods
primarily due to higher income from operations resulting from the
effects of higher sales volumes and higher average TiO2 selling
prices, partially offset by higher production costs including raw
material and energy costs, as discussed below. Our
results of operations for the first nine months of 2020 were
significantly impacted by the COVID-19 pandemic related demand
contraction in 2020 which impacted the second and third quarters
and was most acute in the second quarter of 2020. Comparability of
our results was also impacted by the effects of changes in currency
exchange rates, also discussed below.
Net sales of $499.8 million in the third quarter
of 2021 were $82.9 million, or 20%, higher than in the third
quarter of 2020. Net sales of $1,443.4 million in the first nine
months of 2021 were $219.5 million, or 18%, higher than in the
first nine months of 2020. Net sales increased in the 2021 periods
primarily due to higher sales volumes and higher average TiO2
selling prices. TiO2 sales volumes were 6% higher in
the third quarter of 2021 as compared to the third quarter of 2020
due to higher demand in our European and North American markets and
8% higher in the first nine months of 2021 as compared to the same
prior year period due to higher demand in all major markets.
Increased demand resulted from continuing improvements in global
economic activity in the 2021 periods compared to the negative
impact from the COVID-19 pandemic on the same periods in 2020.
Average TiO2 selling prices were 11% higher in the third quarter of
2021 as compared to the third quarter of 2020 and 4% higher in the
first nine months of 2021 as compared to the first nine months of
2020. Average TiO2 selling prices at the end of the third quarter
of 2021 were 10% higher than our average TiO2 selling prices at the
end of 2020. Fluctuations in currency exchange rates
(primarily the euro) also affected net sales comparisons,
increasing net sales by approximately $5 million in the third
quarter of 2021 and increasing net sales by approximately $47
million in the first nine months of 2021, as compared to the same
periods in 2020. The table at the end of this press release shows
how each of these items impacted net sales.
Our TiO2 segment profit (see description of
non-GAAP information below) in the third quarter of 2021 was $60.8
million as compared to $22.7 million in the third quarter of 2020.
For the year-to-date period, the Company’s segment profit was
$146.6 million as compared to $106.9 million in the first nine
months of 2020. Segment profit increased in the 2021 periods
primarily due to higher average TiO2 selling prices and higher
sales volumes, partially offset by higher manufacturing and other
production costs, including higher costs for raw materials and
energy. TiO2 production volumes were 13% higher in the third
quarter of 2021 as compared to the third quarter of 2020 and 4%
higher in the year-to-date period. We decreased production levels
in 2020 (primarily in the third quarter) to correspond to the
temporary decline in demand resulting from the COVID-19 pandemic.
We operated our production facilities at overall average capacity
utilization rates of 99% in the first nine months of 2021 (97%,
100% and 100% in the first, second and third quarters of 2021,
respectively) compared to 92% in 2020 (95%, 96% and 86% in the
first, second and third quarters of 2020, respectively).
Fluctuations in currency exchange rates (primarily the euro)
increased income from operations approximately $2 million in the
third quarter of 2021 as compared to the third quarter of 2020.
Fluctuations in currency exchange rates (primarily the Canadian
dollar) also affected the year-to-date segment profit comparison,
which decreased segment profit by approximately $15 million in the
year-to-date 2021 period as compared to the same period of
2020.
Our net income before interest expense, income
taxes and depreciation and amortization expense (EBITDA) (see
description of non-GAAP information below) in the third quarter of
2021 was $65.5 million compared to EBITDA of $28.6 million in the
third quarter of 2020. For the first nine months of 2021, the
Company’s EBITDA was $161.7 million compared to $126.4 million in
the first nine months of 2020.
The statements in this release relating to
matters that are not historical facts are forward-looking
statements that represent management's beliefs and assumptions
based on currently available information. Although we believe that
the expectations reflected in such forward-looking statements are
reasonable, we cannot give any assurances that these expectations
will prove to be correct. Such statements by their nature involve
substantial risks and uncertainties that could significantly impact
expected results, and actual future results could differ materially
from those described in such forward-looking statements. While it
is not possible to identify all factors, we continue to face many
risks and uncertainties. The factors that could cause actual future
results to differ materially include, but are not limited to, the
following:
- Future supply and demand for our
products
- The extent of the dependence of
certain of our businesses on certain market sectors
- The cyclicality of our
business
- Customer and producer inventory
levels
- Unexpected or earlier-than-expected
industry capacity expansion
- Changes in raw material and other
operating costs (such as energy and ore costs)
- Changes in the availability of raw
materials (such as ore)
- General global economic and
political conditions that harm the worldwide economy, disrupt our
supply chain, increase material costs or reduce demand or perceived
demand for our TiO2 products or impair our ability to operate our
facilities (including changes in the level of gross domestic
product in various regions of the world, natural disasters,
terrorist acts, global conflicts and public health crises such as
COVID-19)
- Competitive products and substitute
products
- Customer and competitor
strategies
- Potential consolidation of our
competitors
- Potential consolidation of our
customers
- The impact of pricing and
production decisions
- Competitive technology
positions
- Potential difficulties in upgrading
or implementing accounting and manufacturing software systems
- The introduction of trade barriers
or trade disputes
- Fluctuations in currency exchange
rates (such as changes in the exchange rate between the U.S. dollar
and each of the euro, the Norwegian krone and the Canadian dollar
and between the euro and the Norwegian krone), or possible
disruptions to our business resulting from uncertainties associated
with the euro or other currencies
- Operating interruptions (including,
but not limited to, labor disputes, leaks, natural disasters,
fires, explosions, unscheduled or unplanned downtime,
transportation interruptions, cyber-attacks and public health
crises such as COVID-19)
- Our ability to renew or refinance
credit facilities
- Our ability to maintain sufficient
liquidity
- The ultimate outcome of income tax
audits, tax settlement initiatives or other tax matters, including
future tax reform
- Our ability to utilize income tax
attributes, the benefits of which may or may not have been
recognized under the more-likely-than-not recognition criteria
- Environmental matters (such as
those requiring compliance with emission and discharge standards
for existing and new facilities)
- Government laws and regulations and
possible changes therein including new environmental health and
safety regulations (such as those seeking to limit or classify TiO2
or its use)
- Possible future litigation.
Should one or more of these risks materialize
(or the consequences of such a development worsen), or should the
underlying assumptions prove incorrect, actual results could differ
materially from those forecasted or expected. The Company disclaims
any intention or obligation to update or revise any forward-looking
statement whether as a result of changes in information, future
events or otherwise.
In an effort to provide investors with
additional information regarding the Company's results of
operations as determined by accounting principles generally
accepted in the United States of America (GAAP), the Company has
disclosed certain non-GAAP information which the Company believes
provides useful information to investors:
- The Company
discloses segment profit, which is used by the Company’s management
to assess the performance of the Company’s TiO2 operations. The
Company believes disclosure of segment profit provides useful
information to investors because it allows investors to analyze the
performance of the Company’s TiO2 operations in the same way that
the Company’s management assesses performance. The Company defines
segment profit as net income before income tax expense and certain
general corporate items. These general corporate items include
corporate expense and the components of other income (expense)
except for trade interest income; and
- The Company discloses EBITDA, which
is also used by the Company’s management to assess the performance
of the Company’s TiO2 operations. The Company believes disclosure
of EBITDA provides useful information to investors because it
allows investors to analyze the performance of the Company’s TiO2
operations in the same way that the Company’s management assesses
performance. The Company defines EBITDA as net income before
interest expense, income taxes and depreciation and amortization
expense.
Kronos Worldwide, Inc. is a major international producer of
titanium dioxide products.
KRONOS WORLDWIDE, INC.CONDENSED CONSOLIDATED
STATEMENTS OF INCOME (In millions, except per share and metric ton
data)(unaudited)
|
Three months ended |
|
|
Nine months ended |
|
|
September 30, |
|
|
September 30, |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
|
|
|
|
|
Net sales |
$ |
416.9 |
|
|
$ |
499.8 |
|
|
$ |
1,223.9 |
|
|
$ |
1,443.4 |
|
Cost of sales |
|
336.3 |
|
|
|
376.8 |
|
|
|
959.4 |
|
|
|
1,115.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin |
|
80.6 |
|
|
|
123.0 |
|
|
|
264.5 |
|
|
|
327.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expense |
|
55.6 |
|
|
|
64.2 |
|
|
|
161.8 |
|
|
|
185.1 |
|
Other operating income
(expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency transactions, net |
|
(2.9 |
) |
|
|
1.2 |
|
|
|
3.2 |
|
|
|
1.2 |
|
Other income, net |
|
.6 |
|
|
|
.8 |
|
|
|
.7 |
|
|
|
2.7 |
|
Corporate expense |
|
(3.4 |
) |
|
|
(3.5 |
) |
|
|
(10.8 |
) |
|
|
(11.4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations |
|
19.3 |
|
|
|
57.3 |
|
|
|
95.8 |
|
|
|
135.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade interest income |
|
- |
|
|
|
- |
|
|
|
.3 |
|
|
|
.1 |
|
Other interest and dividend income |
|
.1 |
|
|
|
- |
|
|
|
1.2 |
|
|
|
.1 |
|
Insurance settlement gain |
|
- |
|
|
|
- |
|
|
|
1.5 |
|
|
|
- |
|
Marketable equity securities |
|
.4 |
|
|
|
(.1 |
) |
|
|
(1.3 |
) |
|
|
1.2 |
|
Other components of net periodic pension |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and OPEB cost |
|
(5.0 |
) |
|
|
(4.3 |
) |
|
|
(14.4 |
) |
|
|
(12.9 |
) |
Interest expense |
|
(4.9 |
) |
|
|
(4.8 |
) |
|
|
(14.1 |
) |
|
|
(15.0 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
9.9 |
|
|
|
48.1 |
|
|
|
69.0 |
|
|
|
108.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
1.8 |
|
|
|
12.1 |
|
|
|
15.3 |
|
|
|
27.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
$ |
8.1 |
|
|
$ |
36.0 |
|
|
$ |
53.7 |
|
|
$ |
81.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per basic and
diluted share |
$ |
.07 |
|
|
$ |
.31 |
|
|
$ |
.46 |
|
|
$ |
.70 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares used
in the |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
calculation of net income per share |
115.5 |
|
|
115.5 |
|
|
115.6 |
|
|
115.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TiO2 data - metric tons in
thousands: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales volumes |
136 |
|
|
142 |
|
|
396 |
|
|
427 |
|
Production volumes |
122 |
|
|
137 |
|
|
387 |
|
|
404 |
|
KRONOS WORLDWIDE, INC.RECONCILIATION OF INCOME
FROM OPERATIONS TO SEGMENT PROFIT(In millions)(unaudited)
|
Three months ended |
|
|
Nine months ended |
|
|
September 30, |
|
|
September 30, |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations |
$ |
19.3 |
|
|
$ |
57.3 |
|
|
$ |
95.8 |
|
|
$ |
135.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade interest income |
|
- |
|
|
|
- |
|
|
|
.3 |
|
|
|
.1 |
|
Corporate expense |
|
3.4 |
|
|
|
3.5 |
|
|
|
10.8 |
|
|
|
11.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment profit |
$ |
22.7 |
|
|
$ |
60.8 |
|
|
$ |
106.9 |
|
|
$ |
146.6 |
|
RECONCILIATION OF NET INCOME TO EBITDA(In
millions) (unaudited)
|
Three months ended |
|
|
Nine months ended |
|
|
September 30, |
|
|
September 30, |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
$ |
8.1 |
|
|
$ |
36.0 |
|
|
$ |
53.7 |
|
|
$ |
81.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation expense |
|
13.8 |
|
|
|
12.6 |
|
|
|
43.3 |
|
|
|
38.1 |
|
Interest expense |
|
4.9 |
|
|
|
4.8 |
|
|
|
14.1 |
|
|
|
15.0 |
|
Income tax expense |
|
1.8 |
|
|
|
12.1 |
|
|
|
15.3 |
|
|
|
27.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
$ |
28.6 |
|
|
$ |
65.5 |
|
|
$ |
126.4 |
|
|
$ |
161.7 |
|
IMPACT OF PERCENTAGE CHANGE IN NET SALES
(unaudited)
|
Three months ended |
|
Nine months ended |
|
September 30, |
|
September 30, |
|
2021 vs. 2020 |
|
2021 vs. 2020 |
|
|
|
|
Percentage change in net
sales: |
|
|
|
TiO2 sales volumes |
|
|
6 |
% |
|
|
|
|
8 |
% |
|
TiO2 product pricing |
|
|
11 |
|
|
|
|
|
4 |
|
|
TiO2 product mix/other |
|
|
2 |
|
|
|
|
|
2 |
|
|
Changes in currency exchange rates |
|
|
1 |
|
|
|
|
|
4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
20 |
% |
|
|
|
|
18 |
% |
|
Contact: Janet Keckeisen, Vice President, Investor
Relations, (972) 233-1700
Kronos Worldwide (NYSE:KRO)
Gráfica de Acción Histórica
De May 2024 a Jun 2024
Kronos Worldwide (NYSE:KRO)
Gráfica de Acción Histórica
De Jun 2023 a Jun 2024