PHILADELPHIA and PERTH, Australia, Feb. 22,
2024 /PRNewswire/ --
- Merger Between Allkem and Livent Completed on January 4, 2024
- Arcadium Lithium 2024 Outlook Highlighted by a 40% Increase in
Lithium Carbonate and Hydroxide Volumes as a Combined Company
- Projecting $60 to 80 million of
Realized Synergies / Cost Savings in 2024
- Slowing Pace of Expansion in Light of Current Market Conditions
and to Optimize Capital Efficiencies Between Co-Located
Projects
Arcadium Lithium plc (NYSE: ALTM, ASX: LTM, "Arcadium
Lithium") today reported results for the fourth quarter and full
year of 2023 for Livent Corporation ("Livent") and provided select
results for Allkem Limited ("Allkem"). The 2023 Form 10-K to
be released by Arcadium Lithium will only include the historical
results of Livent's operations since the merger closed after
December 31, 2023.
Full calendar year 2023 revenue for the combined company on a
pro forma basis was $2.0
billion. Arcadium Lithium expects to provide
additional calendar year 2023 pro forma financials early in the
second quarter of 2024 and will release combined results for the
new company beginning with the first quarter of 2024.
"We are excited to officially begin operating as Arcadium
Lithium, leveraging the strengths of two highly complementary
organizations and continuing to grow as one of the leading
producers of lithium chemicals globally," said Paul Graves, president and chief executive
officer of Arcadium Lithium. "While lithium and energy
storage market dynamics have changed considerably since our merger
announcement in May, the underlying strategic merits of the
transaction remain compelling. As a larger, more diversified
and vertically integrated company, we are better positioned to meet
the needs of our customers and have even greater flexibility to
take advantage of opportunities available throughout market
cycles."
Livent Corporation Results
Livent achieved the following results for the fourth quarter and
full year of 2023:
|
Metric
|
Units
|
2023
|
2022
|
YoY %
|
Q4 23
|
|
Revenue
|
$M
|
883
|
813
|
9 %
|
182
|
|
GAAP Net
Income
|
$M
|
330
|
274
|
21 %
|
38
|
|
Adj.
EBITDA1
|
$M
|
503
|
367
|
37 %
|
91
|
|
GAAP EPS
|
$/share
|
1.58
|
1.36
|
16 %
|
0.18
|
|
Adjusted
EPS1
|
$/share
|
1.89
|
1.40
|
35 %
|
0.34
|
|
|
|
|
|
|
|
Adj. cash from
operations1,2
|
$M
|
326
|
262
|
24 %
|
52
|
|
Capital
spending3
|
$M
|
329
|
327
|
— %
|
90
|
|
1. Denotes non-GAAP
financial term.
2. Excludes customer
advanced payment of $198 million.
3. Capital expenditures
and other investing activities; excludes capitalized
interest.
|
For the fourth quarter, volumes sold were broadly flat with
lower average realized prices across all lithium products versus
the third quarter and slightly higher costs. Despite a
challenging lithium market environment in the fourth quarter,
Livent achieved record results across all key financial metrics in
2023, reflecting higher average realized pricing and lower overall
costs. Full year 2023 net income increased 21%, adjusted
EBITDA was up 37% and adjusted EBITDA margins expanded by over 10%
compared to 2022.
Allkem Limited Results1
Olaroz Lithium Facility2
|
Lithium
Carbonate
|
|
Jujuy Province,
Argentina
|
|
|
Metric
|
Units
|
CY-23
|
Dec
Q-23
|
Sep
Q-23
|
QoQ %
|
|
Total
Revenue
|
US$M
|
511
|
96
|
123
|
(22) %
|
|
Production
|
metric
tons
|
17,758
|
4,144
|
4,453
|
(7) %
|
|
Sales
|
metric
tons
|
17,879
|
6,991
|
4,554
|
54 %
|
|
Average price
received1
|
US$/mt
|
27,788
|
13,564
|
25,981
|
(48) %
|
|
|
|
1.
|
Excludes lithium
carbonate by-product revenue of $14M, $2M and $5M in CY-23, Dec
Q-23 and Sep Q-23, respectively, which amounts are included in
Total Revenue.
|
- Quarterly production of 4,144 metric tons of lithium carbonate
with approximately 43% of quarterly production as battery grade
lithium carbonate
- Quarterly sales of 6,991 metric tons of which 31% was battery
grade lithium carbonate with average realized price of US$13,564/metric ton FOB3
Mt Cattlin
|
Spodumene
concentrate
|
|
|
Ravensthorpe,
Western Australia
|
|
Metric1
|
Units
|
CY-23
|
Dec
Q-23
|
Sep
Q-23
|
QoQ %
|
|
Spodumene
Revenue
|
US$M
|
571
|
46
|
201
|
(77) %
|
|
Realized
price
|
US$/dmt
CIF
|
2,785
|
763
|
2,625
|
(71) %
|
|
Recovery
|
%
|
68
|
72
|
68
|
6 %
|
|
Concentrate
produced
|
dmt
|
239,312
|
69,789
|
72,549
|
(4) %
|
|
Grade of concentrate
produced
|
%
Li2O
|
5.3
|
5.4
|
5.3
|
2 %
|
|
Concentrate
shipped
|
dmt
|
204,979
|
60,008
|
76,631
|
(22) %
|
|
Grade of concentrate
shipped
|
%
Li2O
|
5.3
|
5.3
|
5.3
|
— %
|
|
|
|
1.
|
Table includes metrics
for spodumene only and does not reflect production, sales or
revenue figures for low-grade material (which is sold irregularly)
or immaterial amounts of other products. Sales of these excluded
products totaled $38M, $0M and $3M in CY-23, Dec Q-23 and Sep Q-23,
respectively.
|
- Quarterly production of 69,789 metric tons of spodumene
concentrate at 5.4% Li2O grade
- Strong recovery of 72% demonstrates favorable grade and
mineralization as mining continues in the main part of the
orebody
- Spodumene concentrate sales of 60,008 metric tons at an SC6
equivalent price of US$850/dmt for
the quarter. Realized pricing during the quarter was impacted by a
shift to forward looking reference price mechanisms and the timing
of shipments all occurring in the second half of the quarter
Merger Completion
The all-stock merger of equals between Allkem and Livent was
completed on January 4, 2024 in-line
with expected timelines and following shareholder votes of approval
from both companies. Arcadium Lithium ordinary shares are
traded on the NYSE under the ticker "ALTM" and on the ASX as a
foreign exempt listing via CHESS Depositary Instruments (CDIs)
under the ticker "LTM".
Synergies / Cost Savings
Arcadium Lithium is expecting to realize synergy and cost
savings totaling $60 to 80 million in
2024. These benefits will be driven primarily by lower
selling, general, and administrative expenses, headcount reduction
and elimination of services and other overlaps between the two
legacy companies.
Expansions
Arcadium Lithium expects to increase combined lithium carbonate
and lithium hydroxide volumes delivered to customers by roughly 40%
in 2024 to 50,000 to 54,000 metric tons on a LCE basis4.
This is a result of lithium carbonate expansion ramp-ups at
both Olaroz and Fénix (Salar del Hombre Muerto), as well as at
downstream hydroxide assets globally. Offsetting some of this
higher volume in 2024 is a reduction in planned spodumene
production at Mt. Cattlin as part of cost optimization efforts at
the mine, reflecting the lower price environment.
Arcadium Lithium is growing volumes significantly during 2024 as
a result of previous multi-year expansionary investments.
However, in light of current market conditions the Company expects
to lower near-term capital spending commitments as it evaluates
ways to streamline its project pipeline while still delivering
additional volumes within the timeframes needed by
customers.
Mr. Graves stated: "It is clear that very few lithium expansion
projects make economic sense at current market prices, and the
longer prices stay near these levels the greater the impact will be
on future supply shortfalls. As we saw in 2022, this will
increase the likelihood of a rapid increase in future lithium
prices, although the complexity of the global battery supply chain
makes both the timing and extent of such an increase difficult to
predict."
"One of the many benefits of the merger is the opportunity to
both optimize and de-risk our growth projects that have natural
overlaps. By slowing capital spending in 2024 we are able to
accelerate the work needed to drive capital efficiencies in both
Argentina and Québec. We
expect this will ultimately help us realize lower overall capital
spending across the Fénix and Sal de
Vida projects, as well as between the James Bay and Nemaska
Lithium projects. We also expect to improve the operating
flexibility of these closely located assets as a result of the
revised plans."
Arcadium Lithium expects $450 to
$625 million in growth capital
spending in 2024 with an additional $100 to $125
million of maintenance capital spending.
As of December 31, 2023 Arcadium
Lithium had a combined consolidated cash balance of $892 million and cash, net of debt, of
$297 million5.
2024 Outlook Scenarios6
The outlook scenarios for the full year 2024 as set out below
are provided by Arcadium Lithium as a combined company. The
Company is expecting higher overall volumes, with a 40% increase in
combined lithium hydroxide and lithium carbonate sales partially
offset by lower spodumene concentrate sales.
The majority of Arcadium Lithium's hydroxide volumes are
currently sold under multi-year agreements with established pricing
terms (pre-agreed price or subject to floors and ceilings).
The Company's other lithium specialties (butyllithium, high purity
lithium metal, etc.) are typically sold on a customer-by-customer,
negotiated price basis with monthly or quarterly price
resets. Lithium carbonate and spodumene concentrate volumes
are currently sold largely at prevailing market prices set on a
monthly basis.
The table below reflects Revenue and Adjusted EBITDA outcomes
for Arcadium Lithium based on two different lithium market price
scenarios. These scenarios should not be interpreted as a forecast
by Arcadium Lithium as to the likely range of 2024 lithium
prices. It keeps constant the midpoints of the Company's
expected sales volumes, synergy/cost savings and SG&A for 2024
while overlaying the pricing mechanisms of existing commercial
agreements:
|
|
|
Average Lithium
Market Price (LCE Basis)
|
|
Metric
|
Units
|
|
$15/kg
LCE
|
|
$25/kg
LCE
|
|
Revenue
|
$
million
|
|
~1,250
|
|
~1,900
|
|
Adjusted
EBITDA1
|
$
million
|
|
~420
|
|
~1,000
|
|
Adjusted EBITDA
Margin1
|
|
34 %
|
|
53 %
|
|
|
|
1.
|
Although Arcadium
Lithium provides an outlook for Adjusted EBITDA and Adjusted tax
rate, the Company is not able to do so for the most directly
comparable measures calculated and presented in accordance with
GAAP. Certain elements of the composition of the GAAP amounts
are not predictable, making it impractical for the Company to
provide an outlook for such GAAP measures or to reconcile
corresponding non-GAAP financial measures to such GAAP measures
without unreasonable efforts. For the same reason, the
Company is unable to address the probable significance of the
unavailable information. Such elements include, but are not
limited to, restructuring and transaction related charges. As
a result, no GAAP equivalent outlook is provided for these
metrics.
|
The table below provides an outlook for other select financial
items:
|
Metric
|
Units
|
Full Year
2024
|
|
Selling, general and
administrative expenses1
|
$
million
|
~115
|
|
Depreciation &
amortization
|
$
million
|
~145
|
|
Adjusted tax
rate2
|
|
25 %
|
33 %
|
|
Full-year weighted
average diluted shares outstanding3
|
million
|
~1,150
|
|
|
|
|
|
Capital
spending
|
$
million
|
550
|
750
|
|
|
|
1.
|
Includes Research and
development expenses.
|
|
2.
|
Although Arcadium
Lithium provides an outlook for Adjusted EBITDA and Adjusted tax
rate, the Company is not able to do so for the most directly
comparable measures calculated and presented in accordance with
GAAP. Certain elements of the composition of the GAAP amounts
are not predictable, making it impractical for the Company to
provide an outlook for such GAAP measures or to reconcile
corresponding non-GAAP financial measures to such GAAP measures
without unreasonable efforts. For the same reason, the
Company is unable to address the probable significance of the
unavailable information. Such elements include, but are not
limited to, restructuring and transaction related charges. As
a result, no GAAP equivalent outlook is provided for these
metrics.
|
|
3.
|
Inclusive of 67.7
million dilutive share equivalents attributable to potential
conversion of 2025 Notes.
|
Arcadium Lithium Contacts
Investors:
Daniel Rosen
+1 215 299 6208
daniel.rosen@livent.com
Phoebe Lee +61 413 557 780
phoebe.lee@allkem.co
Media:
Karen Vizental
+54 9 114 414 4702
karen.vizental@allkem.co
Address:
Arcadium Lithium plc
Suite 12, Gateway Hub
Shannon Airport House
Shannon, Ireland
Supplemental Information
In this press release, Arcadium Lithium uses the financial
measures Adjusted EBITDA, Diluted adjusted after-tax earnings per
share, Adjusted tax rate, and Adjusted cash from operations.
These terms are not calculated in accordance with generally
accepted accounting principles (GAAP). Definitions of these
terms, as well as a reconciliation to the most directly comparable
financial measure calculated and presented in accordance with GAAP,
are provided on our website: ir.arcadiumlithium.com. Such
reconciliations are also set forth in the financial tables that
accompany this press release.
About Arcadium Lithium
Arcadium Lithium is a leading global lithium chemicals producer
committed to safely and responsibly harnessing the power of lithium
to improve people's lives and accelerate the transition to a clean
energy future. We collaborate with our customers to drive
innovation and power a more sustainable world in which lithium
enables exciting possibilities for renewable energy, electric
transportation and modern life. Arcadium Lithium is
vertically integrated, with industry-leading capabilities across
lithium extraction processes, including hard-rock mining,
conventional brine extraction and direct lithium extraction (DLE),
and in lithium chemicals manufacturing for high performance
applications. We have operations around the world, with facilities
and projects in Argentina,
Australia, Canada, China, Japan,
the United Kingdom and the United
States. For more information, please visit us at
www.ArcadiumLithium.com.
Important Information and Legal Disclaimer:
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995: Certain statements in this news release are
forward-looking statements. In some cases, we have identified
forward-looking statements by such words or phrases as "will likely
result," "is confident that," "expect," "expects," "should,"
"could," "may," "will continue to," "believe," "believes,"
"anticipates," "predicts," "forecasts," "estimates," "projects,"
"potential," "intends" or similar expressions identifying
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995, including the negative of
those words and phrases. Such forward-looking statements are based
on our current views and assumptions regarding future events,
future business conditions and the outlook for Arcadium Lithium
based on currently available information. There are important
factors that could cause Arcadium Lithium's actual results, level
of activity, performance or achievements to differ materially from
the results, level of activity, performance or achievements
expressed or implied by the forward-looking statements, including
the factors described under the caption entitled "Risk Factors" in
Livent Corporation's 2022 Form 10-K filed with the Securities and
Exchange Commission ("SEC") on February 24,
2023, and the factors described under the caption entitled
"Risk Factors" in Arcadium Lithium's registration statement on Form
S-4, initially filed with the SEC on July
20, 2023, as amended thereafter and declared effective by
the SEC on November 20, 2023, as well
as other risks associated with the merger of equals transaction
between Livent Corporation and Allkem Limited that resulted in the
creation of Arcadium Lithium, as well as other SEC filings and
public communications. Although Arcadium Lithium believes the
expectations reflected in the forward-looking statements are
reasonable, Arcadium Lithium cannot guarantee future results, level
of activity, performance or achievements. Moreover, neither
Arcadium Lithium nor any other person assumes responsibility for
the accuracy and completeness of any of these forward-looking
statements. Arcadium Lithium is under no duty to update any of
these forward-looking statements after the date of this news
release to conform its prior statements to actual results or
revised expectations.
|
ARCADIUM LITHIUM
PLC
CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited, in
millions, except per share data)
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
December
31,
|
|
December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Revenue
|
$
181.8
|
|
$
219.4
|
|
$
882.5
|
|
$
813.2
|
|
Costs of
sales
|
138.4
|
|
105.5
|
|
413.2
|
|
417.5
|
|
Gross
margin
|
43.4
|
|
113.9
|
|
469.3
|
|
395.7
|
|
Selling, general and
administrative expenses
|
16.1
|
|
14.6
|
|
63.2
|
|
55.2
|
|
Research and
development expenses
|
2.5
|
|
1.3
|
|
5.8
|
|
3.9
|
|
Restructuring and other
charges
|
22.0
|
|
2.9
|
|
56.7
|
|
7.5
|
|
Separation-related
costs
|
—
|
|
0.2
|
|
—
|
|
0.7
|
|
Total costs and
expenses
|
179.0
|
|
124.5
|
|
538.9
|
|
484.8
|
|
Income from operations
before equity in net loss of unconsolidated
affiliate, loss on debt extinguishment and other gain
|
2.8
|
|
94.9
|
|
343.6
|
|
328.4
|
|
Equity in net loss of
unconsolidated affiliate
|
1.1
|
|
6.7
|
|
23.1
|
|
15.1
|
|
Loss on debt
extinguishment
|
—
|
|
—
|
|
—
|
|
0.1
|
|
Other gain
|
(47.1)
|
|
—
|
|
(68.5)
|
|
(22.2)
|
|
Income from operations
before income taxes
|
48.8
|
|
88.2
|
|
389.0
|
|
335.4
|
|
Income tax
expense
|
11.1
|
|
5.5
|
|
58.9
|
|
61.9
|
|
Net income
|
$
37.7
|
|
$
82.7
|
|
$
330.1
|
|
$
273.5
|
|
Net income per weighted
average share - basic
|
$
0.21
|
|
$
0.46
|
|
$
1.84
|
|
$
1.59
|
|
Net income per weighted
average share - diluted
|
$
0.18
|
|
$
0.39
|
|
$
1.58
|
|
$
1.36
|
|
Weighted average common
shares outstanding - basic
|
179.8
|
|
179.5
|
|
179.7
|
|
171.8
|
|
Weighted average common
shares outstanding - diluted
|
209.0
|
|
209.4
|
|
209.2
|
|
201.6
|
|
ARCADIUM LITHIUM
PLC
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES
|
|
|
RECONCILIATION OF
NET INCOME TO EBITDA (NON-GAAP) AND ADJUSTED EBITDA
(NON-GAAP)
(Unaudited)
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
December
31,
|
|
December
31,
|
|
(In
Millions)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Net income
|
$
37.7
|
|
$
82.7
|
|
$
330.1
|
|
$
273.5
|
|
Add back:
|
|
|
|
|
|
|
|
|
Income tax
expense
|
11.1
|
|
5.5
|
|
58.9
|
|
61.9
|
|
Depreciation and
amortization
|
8.1
|
|
8.3
|
|
29.6
|
|
27.7
|
|
EBITDA (Non-GAAP)
(1)
|
56.9
|
|
96.5
|
|
418.6
|
|
363.1
|
|
Add back:
|
|
|
|
|
|
|
|
|
Argentina remeasurement
losses (a)
|
53.4
|
|
3.7
|
|
73.9
|
|
6.7
|
|
Restructuring and other
charges (b)
|
22.0
|
|
2.9
|
|
56.7
|
|
7.5
|
|
Separation-related
costs (c)
|
—
|
|
0.2
|
|
—
|
|
0.7
|
|
COVID-19 related costs
(d)
|
—
|
|
0.3
|
|
—
|
|
2.4
|
|
Loss on debt
extinguishment (e)
|
—
|
|
—
|
|
—
|
|
0.1
|
|
Other loss
(f)
|
0.8
|
|
4.0
|
|
16.9
|
|
9.9
|
|
Subtract:
|
|
|
|
|
|
|
|
|
Blue Chip Swap gain
(g)
|
(42.2)
|
|
—
|
|
(63.6)
|
|
(22.2)
|
|
Argentina interest
income (h)
|
—
|
|
—
|
|
—
|
|
(1.5)
|
|
Adjusted EBITDA
(Non-GAAP) (1)
|
$
90.9
|
|
$
107.6
|
|
$
502.5
|
|
$
366.7
|
___________________
|
1.
|
We evaluate operating
performance using certain Non-GAAP measures such as EBITDA, which
we define as net income plus interest expense, net, income tax
(benefit)/expense, depreciation, and amortization, and Adjusted
EBITDA, which we define as EBITDA adjusted for Argentina
remeasurement losses, restructuring and other charges,
separation-related costs, COVID-19 related costs and other
losses/(gains). Management believes the use of these Non-GAAP
measures allows management and investors to compare more easily the
financial performance of its underlying business from period to
period. The Non-GAAP information provided may not be comparable to
similar measures disclosed by other companies because of differing
methods used by other companies in calculating EBITDA and Adjusted
EBITDA. These measures should not be considered as a substitute for
net income or other measures of performance or liquidity reported
in accordance with U.S. GAAP. The above table reconciles EBITDA and
Adjusted EBITDA from net income.
|
|
a.
|
Represents impact of
currency fluctuations on tax assets and liabilities and on
long-term monetary assets associated with our capital expansion, as
well as significant currency devaluations. The remeasurement losses
are included within "Cost of sales" in our consolidated statement
of operations but are excluded from our calculation of Adjusted
EBITDA because of: i.) their nature as income tax related; ii.)
their association with long-term capital projects which will not be
operational until future periods; or iii.) the severity of the
devaluations and their immediate impact on our operations in the
country.
|
|
b.
|
We continually perform
strategic reviews and assess the return on our business. This
sometimes results in management changes or in a plan to restructure
the operations of our business. As part of these restructuring
plans, demolition costs and write-downs of long-lived assets may
occur. The three and twelve months ended December 31, 2023 includes
costs related to the Transaction of $21.8 million and $54.1
million, respectively. The three and twelve months ended December
31, 2022 includes costs related to the Transaction of $0.6 million
and $2.9 million, respectively.
|
|
c.
|
Represents legal and
professional fees and other separation-related activity.
|
|
d.
|
Represents incremental
costs associated with COVID-19 recorded in "Cost of sales" in the
consolidated statements of operations, including but not limited
to, incremental quarantine related absenteeism, incremental
facility cleaning costs, COVID-19 testing, pandemic related
supplies and personal protective equipment for employees, among
other costs; offset by economic relief provided by foreign
governments.
|
|
e.
|
Represents the partial
write off of deferred financing costs for the amendments to our
Revolving Credit Facility excluded from our calculation of Adjusted
EBITDA because the loss is nonrecurring.
|
|
f.
|
Prior to consolidation
of Nemaska Lithium Inc. ("NLI") on October 18, 2023, represents our
50% ownership interest (which was 25% prior to June 6, 2022) in
costs incurred for certain project-related costs to align NLI's
reported results with Arcadium Lithium's capitalization policies
and interest expense incurred by NLI, all included in Equity in net
loss of unconsolidated affiliate in our consolidated statement of
operations. The Company accounts for its investment in NLI on a
one-quarter lag basis.
|
|
g.
|
Represents gains from
the sale in Argentina pesos of Argentina Sovereign U.S.
dollar-denominated bonds.
|
|
h.
|
Represents interest
income received from the Argentina government for the period
beginning when the recoverability of certain of our
expansion-related VAT receivables were approved by the Argentina
government and ending on the date when the reimbursements were paid
by the Argentina government but is excluded from our calculation of
Adjusted EBITDA because of its association with long-term capital
projects which will not be operational until future
periods.
|
|
RECONCILIATION OF
NET INCOME TO ADJUSTED AFTER-TAX EARNINGS (NON-GAAP)
(Unaudited)
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
December
31,
|
|
December
31,
|
|
(In Millions, except
per share amounts)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Net income
|
$
37.7
|
|
$
82.7
|
|
$
330.1
|
|
$
273.5
|
|
Special
charges:
|
|
|
|
|
|
|
|
|
Argentina
remeasurement losses(a)
|
53.4
|
|
3.7
|
|
73.9
|
|
6.7
|
|
Restructuring and
other charges (b)
|
22.0
|
|
2.9
|
|
56.7
|
|
7.5
|
|
Separation-related
costs(c)
|
—
|
|
0.2
|
|
—
|
|
0.7
|
|
COVID-19 related costs
(d)
|
—
|
|
0.3
|
|
—
|
|
2.4
|
|
Loss on debt
extinguishment (e)
|
—
|
|
—
|
|
—
|
|
0.1
|
|
Other loss
(f)
|
0.8
|
|
4.0
|
|
16.9
|
|
9.9
|
|
Blue Chip Swap gain
(g)
|
(42.2)
|
|
—
|
|
(63.6)
|
|
(22.2)
|
|
Argentina interest
income (h)
|
—
|
|
—
|
|
—
|
|
(1.5)
|
|
Non-GAAP tax
adjustments (i)
|
(0.9)
|
|
(9.6)
|
|
(18.0)
|
|
5.5
|
|
Adjusted after-tax
earnings (Non-GAAP) (1)
|
$
70.8
|
|
$
84.2
|
|
$
396.0
|
|
$
282.6
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
common share
|
$
0.18
|
|
$
0.39
|
|
$
1.58
|
|
$
1.36
|
|
Special charges per
diluted share, before tax:
|
|
|
|
|
|
|
|
|
Argentina
remeasurement losses, per diluted share
|
0.26
|
|
0.02
|
|
0.35
|
|
0.03
|
|
Restructuring and
other charges, per diluted share
|
0.11
|
|
0.02
|
|
0.27
|
|
0.04
|
|
COVID-19 related
costs, per diluted share
|
—
|
|
—
|
|
—
|
|
0.01
|
|
Other loss, per
diluted share
|
—
|
|
0.02
|
|
0.08
|
|
0.05
|
|
Blue Chip Swap gain,
per diluted share
|
(0.20)
|
|
—
|
|
(0.30)
|
|
(0.11)
|
|
Argentina interest
income, per diluted share
|
—
|
|
—
|
|
—
|
|
(0.01)
|
|
Non-GAAP tax
adjustments per diluted share
|
(0.01)
|
|
(0.05)
|
|
(0.09)
|
|
0.03
|
|
Diluted adjusted
after-tax earnings per share (Non-GAAP) (1)
|
$
0.34
|
|
$
0.40
|
|
$
1.89
|
|
$
1.40
|
|
Weighted average number
of shares outstanding used in diluted adjusted
after-tax earnings per share computations (Non-GAAP)
|
209.0
|
|
209.4
|
|
209.2
|
|
201.6
|
____________________
|
1.
|
The company believes
that the Non-GAAP financial measures "Adjusted after-tax earnings"
and "Diluted adjusted after-tax earnings per share" provide useful
information about the company's operating results to management,
investors and securities analysts. Adjusted after-tax earnings
excludes the effects of nonrecurring charges/(income) and
tax-related adjustments. The company also believes that excluding
the effects of these items from operating results allows management
and investors to compare more easily the financial performance of
its underlying business from period to period. Diluted adjusted
after-tax earnings per share (Non-GAAP) is calculated using
weighted average common shares outstanding - diluted.
|
|
a.
|
Represents charges
related to currency fluctuations on tax assets and liabilities and
on long-term monetary assets associated with our capital expansion,
as well as significant currency devaluations. The remeasurement
losses are included within "Cost of sales" in our consolidated
statement of operations but are excluded from our calculation of
Adjusted EBITDA because of: i.) their nature as income tax related;
ii.) their association with long-term capital projects which will
not be operational until future periods; or iii.) the severity of
the devaluations and their immediate impact on our operations in
the country.
|
|
b.
|
We continually perform
strategic reviews and assess the return on our business. This
sometimes results in management changes or in a plan to restructure
the operations of our business. As part of these restructuring
plans, demolition costs and write-downs of long-lived assets may
occur. The three and twelve months ended December 31, 2023 includes
costs related to the Transaction of $21.8 million and $54.1
million, respectively. The three and twelve months ended December
31, 2022 includes costs related to the Transaction of $0.6 million
and $2.9 million, respectively.
|
|
c.
|
Represents legal and
professional fees and other separation-related activity.
|
|
d.
|
Represents incremental
costs associated with COVID-19 recorded in "Cost of sales" in the
consolidated statement of operations, including but not limited to,
incremental quarantine related absenteeism, incremental facility
cleaning costs, COVID-19 testing, pandemic related supplies and
personal protective equipment for employees, among other costs;
offset by economic relief provided by foreign
governments.
|
|
e.
|
Represents the partial
write off of deferred financing costs for the amendments to our
Revolving Credit Facility excluded from our calculation of Adjusted
EBITDA because the loss is nonrecurring.
|
|
f.
|
Prior to consolidation
of NLI on October 18, 2023, represents our 50% ownership interest
(which was 25% prior to June 6, 2022) in costs incurred for certain
project-related costs to align NLI's reported results with Arcadium
Lithium's capitalization policies and interest expense incurred by
NLI, all included in Equity in net loss of unconsolidated affiliate
in our consolidated statement of operations. The Company accounts
for its investment in NLI on a one-quarter lag basis.
|
|
g.
|
Represents gains from
the sale in Argentina pesos of Argentina Sovereign U.S.
dollar-denominated bonds.
|
|
h.
|
Represents interest
income received from the Argentina government for the period
beginning when the recoverability of certain of our
expansion-related VAT receivables were approved by the Argentina
government and ending on the date when the reimbursements were paid
by the Argentina government but is excluded from our calculation of
Adjusted EBITDA because of its association with long-term capital
projects which will not be operational until future
periods.
|
|
i.
|
The company excludes
the GAAP tax provision, including discrete items, from the Non-GAAP
measure "Diluted adjusted after-tax earnings per share", and
instead includes a Non-GAAP tax provision based upon the annual
Non-GAAP effective tax rate. The GAAP tax provision includes
certain discrete tax items including, but not limited to: income
tax expenses or benefits that are not related to operating results
in the current year; tax adjustments associated with fluctuations
in foreign currency remeasurement of certain foreign operations;
certain changes in estimates of tax matters related to prior fiscal
years; certain changes in the realizability of deferred tax assets
and related accounting impacts; and changes in tax law. Management
believes excluding these discrete tax items assists investors and
securities analysts in understanding the tax provision and the
effective tax rate related to operating results thereby providing
investors with useful supplemental information about the company's
operational performance. The income tax expense/(benefit) on
special charges/(income) is determined using the applicable rates
in the taxing jurisdictions in which the special charge or income
occurred and includes both current and deferred income tax
expense/(benefit) based on the nature of the Non-GAAP performance
measure.
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
December
31,
|
|
December
31,
|
|
(in
Millions)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Non-GAAP tax
adjustments:
|
|
|
|
|
|
|
|
|
Income tax benefit on
restructuring, separation-related and other corporate
costs
|
$
(3.4)
|
|
$
(0.7)
|
|
$
(7.0)
|
|
$
(2.0)
|
|
Revisions to our tax
liabilities due to finalization of prior year tax
returns
|
—
|
|
—
|
|
(0.4)
|
|
—
|
|
Foreign currency
remeasurement (net of valuation allowance) and other discrete
items
|
(1.1)
|
|
(7.1)
|
|
(16.2)
|
|
7.6
|
|
Blue Chip Swap
gain
|
4.5
|
|
—
|
|
6.7
|
|
2.3
|
|
Other discrete
items
|
(0.9)
|
|
(1.8)
|
|
(1.1)
|
|
(2.4)
|
|
Total Non-GAAP tax
adjustments
|
$
(0.9)
|
|
$
(9.6)
|
|
$ (18.0)
|
|
$
5.5
|
|
RECONCILIATION OF
CASH PROVIDED BY OPERATING ACTIVITIES TO ADJUSTED CASH FROM
OPERATIONS (NON-GAAP)
(Unaudited)
|
|
|
Twelve Months
Ended
|
|
December
31,
|
|
(In
Millions)
|
2023
|
|
2022
|
|
Cash provided by
operating activities
|
$
297.3
|
|
$
454.7
|
|
Restructuring and
other charges
|
28.7
|
|
3.5
|
|
Separation-related
costs
|
—
|
|
0.9
|
|
COVID-19 related costs
(a)
|
—
|
|
2.4
|
|
Argentina interest
income (b)
|
—
|
|
(1.5)
|
|
Adjusted cash from
operations (Non-GAAP) (1)
|
$
326.0
|
|
$
460.0
|
___________________
|
1.
|
The company believes
that the Non-GAAP financial measure "Adjusted cash from operations"
provides useful information about the company's cash flows to
investors and securities analysts. Adjusted cash from operations
excludes the effects of transaction-related cash flows. The company
also believes that excluding the effects of these items from cash
provided by operating activities allows management and investors to
compare more easily the cash flows from period to
period.
|
|
a.
|
Represents incremental
costs associated with COVID-19 recorded in "Cost of sales" in the
consolidated statement of operations, including but not limited to,
incremental quarantine related absenteeism, incremental facility
cleaning costs, COVID-19 testing, pandemic related supplies and
personal protective equipment for employees, among other costs;
offset by economic relief provided by foreign
governments.
|
|
b.
|
Represents interest
income received from the Argentina government for the period
beginning when the recoverability of certain of our
expansion-related VAT receivables were approved by the Argentina
government and ending on the date when the reimbursements were paid
by the Argentina government but is excluded from our calculation of
Adjusted EBITDA because of its association with long-term capital
projects which will not be operational until future
periods.
|
|
RECONCILIATION OF
LONG-TERM DEBT (GAAP) AND CASH AND CASH EQUIVALENTS (GAAP)
TO
NET DEBT
(NON-GAAP)
(Unaudited)
|
|
|
(In
Millions)
|
December 31,
2023
|
|
December 31,
2022
|
|
Long-term debt
(including current maturities) (GAAP) (a)
|
$
302.0
|
|
$
241.9
|
|
Less: Cash and cash
equivalents (GAAP)
|
(237.6)
|
|
(189.0)
|
|
Net debt (Non-GAAP)
(1)
|
$
64.4
|
|
$
52.9
|
___________________
|
1.
|
The company believes
that the non-GAAP financial measure "Net debt" provides useful
information about the company's cash flows and liquidity to
investors and securities analysts.
|
|
a.
|
Presented net of
unamortized transaction costs of $2.4 million and $3.9 million
as of December 31, 2023 and 2022, respectively.
|
|
ARCADIUM LITHIUM
PLC
CONDENSED
CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
|
|
(In
Millions)
|
December 31,
2023
|
|
December 31,
2022
|
|
Cash and cash
equivalents
|
$
237.6
|
|
$
189.0
|
|
Trade receivables, net
of allowance of approximately $0.3 in 2023 and 2022
|
106.7
|
|
141.6
|
|
Inventories
|
217.5
|
|
152.3
|
|
Other current
assets
|
86.4
|
|
61.1
|
|
Total current
assets
|
648.2
|
|
544.0
|
|
Investments
|
34.8
|
|
440.3
|
|
Property, plant and
equipment, net of accumulated depreciation of $269.1 in 2023
and $253.1 in 2022
|
2,237.1
|
|
968.3
|
|
Right of use assets -
operating leases, net
|
6.8
|
|
4.8
|
|
Goodwill
|
120.7
|
|
—
|
|
Other intangibles,
net
|
53.4
|
|
—
|
|
Deferred income
taxes
|
1.4
|
|
0.4
|
|
Other assets
|
127.7
|
|
116.4
|
|
Total assets
|
$
3,230.1
|
|
$
2,074.2
|
|
|
|
|
|
Total current
liabilities
|
268.6
|
|
148.7
|
|
Long-term
debt
|
299.6
|
|
241.9
|
|
Contract liabilities -
long term
|
217.8
|
|
198.0
|
|
Other long-term
liabilities
|
160.3
|
|
42.6
|
|
Equity
|
2,283.8
|
|
1,443.0
|
|
Total liabilities and
equity
|
$
3,230.1
|
|
$
2,074.2
|
|
ARCADIUM LITHIUM
PLC
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
|
Twelve Months Ended
December 31,
|
|
(In
Millions)
|
2023
|
|
2022
|
|
Cash provided by
operating activities
|
$
297.3
|
|
$
454.7
|
|
Cash used in investing
activities
|
(228.3)
|
|
(364.7)
|
|
Cash used in financing
activities
|
(20.4)
|
|
(12.5)
|
|
Effect of exchange rate
changes on cash
|
—
|
|
(1.5)
|
|
Increase in cash and
cash equivalents
|
48.6
|
|
76.0
|
|
Cash and cash
equivalents, beginning of period
|
189.0
|
|
113.0
|
|
Cash and cash
equivalents, end of period
|
$
237.6
|
|
$
189.0
|
|
1
|
Allkem's select results
include property-level financial measures reported according to
International Financial Reporting Standards (IFRS) as issued by the
International Accounting Standards Board, except as otherwise
indicated. These select results for Allkem's properties are not
intended to be reported regularly in this manner by Arcadium
Lithium moving forward and may not be comparable with Arcadium
Lithium's results for future periods, which will be reported under
U.S. generally accepted accounting principles.
|
|
2
|
All figures on a 100%
Olaroz Project basis, in which Allkem had a 66.5% economic
interest.
|
|
3
|
"FOB" (Free On Board)
excludes insurance and freight charges included in "CIF" (Cost,
Insurance, Freight) pricing. Therefore, the Company's FOB reported
prices are net of freight (shipping), insurance and sales
commission.
|
|
4
|
Lithium Carbonate
Equivalents. Includes 100% of Olaroz, in which Arcadium Lithium has
a 66.5% economic interest.
|
|
5
|
Cash and debt of the
combined company shown on an unaudited basis. Includes $44M of cash
and cash equivalents and $59M of debt at Nemaska
Lithium.
|
|
6
|
Reflects 100%
consolidation of Olaroz and Nemaska Lithium, in which Arcadium
Lithium has current economic interest of 66.5% and 50%,
respectively.
|
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SOURCE Arcadium Lithium PLC