The following excerpt is from the company's SEC filing.
Over $200 million in Share Repurchases
During the First Quarter
First Quarter Highlights
First
quarter 2022 net income of $240 million compared to net income of $100 million in the prior year period; first quarter 2022 diluted earnings
per share of $1.04 compared to diluted earnings per share of $0.37 in the prior year period.
First
quarter 2022 adjusted net income of $256 million compared to adjusted net income of $147 million in the prior year period; first quarter
2022 adjusted diluted earnings per share of $1.19 compared to adjusted diluted earnings per share of $0.66 in the prior year per
iod.
First
quarter 2022 adjusted EBITDA of $415 million compared to adjusted EBITDA of $289 million in the prior year period.
First
quarter 2022 adjusted EBITDA margin of 17% compared to adjusted EBITDA margin of 16% in the prior year period.
First quarter 2022 net cash provided by operating activities from continuing
operations was $85 million. Free cash flow from continuing operations was $16 million for the first quarter 2022 compared to an outflow
of $114 million in the prior year period.
Repurchased approximately 5.5 million shares for approximately $210 million
in the first quarter 2022. During the first quarter of 2022, the Board approved an increased share repurchase authorization to $2 billion
from $1 billion. The Company intends to repurchase approximately $1 billion in shares during 2022.
The strong financial condition of the Company was reflected in the recent
rating upgrades from Fitch to BBB on March 4, 2022 and S&P to BBB- on April 13, 2022.
Three months ended
March 31,
In millions, except per share amounts
Revenues
Net income
Adjusted net income
Diluted income per share
Adjusted diluted income per share
Adjusted EBITDA
Net cash provided by (used in) operating activities from continuing operations
See end of press release for footnote explanations and reconciliations of non-GAAP measures.
THE WOODLANDS, Texas
–
Huntsman Corporation (NYSE: HUN) today reported first quarter 2022 results with revenues of $2,389 million, net income of $240 million,
adjusted net income of $256 million and adjusted EBITDA of $415 million.
Peter R. Huntsman, Chairman, President and CEO,
commented:
"We started 2022 with positive momentum
and are focused on further improvements through a deliberate value over volume strategy that includes our pricing initiatives, cost optimization
programs, organic investments and when appropriate bolt-on acquisitions. We delivered on pricing in the first quarter and expanded our
margins despite tremendous upward pressure on our raw material costs. The strength of our balance sheet was recognized by the recent upgrades
from S&P to BBB- and Fitch to BBB.
Looking forward,
our balance sheet strength as well as our expected cash flow gives us flexibility to invest for the future as well as return cash to shareholders
today. The Board increased our dividend 13% in the first quarter for a total dividend increase of 70% since 2018. And, as we previously
announced, the Board doubled the share repurchase authorization to $2 billion at the end of March, half of which we intend to spend in
2022. We are actively monitoring the many economic cross currents throughout the world but where we stand today, we expect continued strong
overall results in the second quarter.
Segment Analysis for 1Q22 Compared to 1Q21
Polyurethanes
The increase in revenues in our Polyurethanes segment for
the three months ended March 31, 2022 compared to the same period of 2021 was largely due to higher MDI average selling prices and slightly
higher sales volumes. MDI average selling prices increased in all our regions. Sales volumes increased primarily due to stronger demand
in all our regions. The increase in segment adjusted EBITDA was primarily due to higher MDI margins resulting from higher MDI pricing
and slightly higher sales volumes, partially offset by higher raw material costs and lower earnings from our PO/MTBE joint venture in
China.
Performance Products
The increase in revenues in our Performance Products segment
for the three months ended March 31, 2022 compared to the same period of 2021 was primarily due to higher average selling prices
and slightly higher sales volumes. Average selling prices increased primarily due to stronger demand in relation to the ongoing recovery
from the global economic slowdown as well as in response to an increase in raw material costs. Sales volumes increased primarily due to
stronger demand as well as favorable product mix changes aligned with our value-over-volume business strategy. The increase in segment
adjusted EBITDA was primarily due to increased revenues and margins, partially offset by increased fixed costs.
Advanced Materials
The increase in revenues in our Advanced Materials segment
for the three months ended March 31, 2022 compared to the same period in 2021 was primarily due to higher average selling prices,
partially offset by lower sales volumes. Average selling prices increased across all markets largely in response to higher raw material,
energy and logistics costs. Sales volumes decreased primarily due to deselection of lower margin base resins business. The increase in
segment adjusted EBITDA was primarily due to higher sales prices and the benefit from the Gabriel Acquisition.
Textile Effects
The increase in revenues in our Textile Effects segment for
the three months ended March 31, 2022 compared to the same period of 2021 was due to higher average selling prices, partially offset by
a decrease in sales volumes. Average selling prices increased in response to higher direct costs. Sales volumes decreased primarily
due to a deselection of certain volume as well as lower demand. The increase in segment adjusted EBITDA was primarily due to improved
portfolio mix.
Corporate, LIFO and other
For the three months ended March 31, 2022, adjusted EBITDA from
Corporate and other was a loss of $50 million unchanged from the same period of 2021.
Liquidity and Capital Resources
During the three months ended March 31, 2022, our free cash flow from
continuing operations was a source of cash of $16 million as compared to a use of cash of $114 million in the prior year period. As of
March 31, 2022, we had approximately $2.3 billion of combined cash and unused borrowing capacity.
During the three months ended March 31, 2022, we spent $69 million
on capital expenditures as compared to $98 million in the same period of 2021. For 2022, we expect to spend approximately $300 million
on capital expenditures.
Income Taxes
In the first quarter 2022, both our effective
tax rate and our adjusted effective tax rate was 21%.
We expect our 2022 adjusted effective tax rate to be approximately 22% to
24%.
Earnings Conference Call Information
We will hold a conference call to discuss our first quarter 2022 financial
results on Thursday, April 28, 2022, at 10:00 a.m. ET.
Webcast link:
https://services.choruscall.com/mediaframe/webcast.html?webcastid=KvyqXLON
Participant dial-in numbers:
Domestic callers:
(877) 402-8037
International callers:
(201) 378-4913
The conference call will be accompanied
by presentation slides that will be accessible via the webcast link and Huntsman’s investor relations website,
www.huntsman.com/investors
.
Upon conclusion of the call, the webcast replay will be accessible via Huntsman’s website.
Upcoming Conferences
During the second quarter 2022, a member of management is expected
to present at:
Wells Fargo Industrials Conference on May 5, 2022
Key Banc Industrials and Basic Materials Conference on June 2, 2022
Stifel Cross Sector Insight Conference on June 8, 2022
Deutsche Bank Global Materials Conference on June 9, 2022
A webcast of the presentation, if applicable,
along with accompanying materials will be available at
Table 1
– Results of Operations
Cost of goods sold
Gross profit
Operating expenses (credits)
Restructuring, impairment and plant closing costs
Operating income
Interest expense, net
Equity in income of investment in unconsolidated affiliates
Fair value adjustments to Venator investment and related loss on disposal
Other income, net
Income from continuing operations before income taxes
Income tax expense
Income (loss) from discontinued operations, net of tax
Net income attributable to noncontrolling interests, net of tax
Net income attributable to Huntsman Corporation
Adjusted EBITDA
Basic income per share
Adjusted diluted income per share
Common share information:
Basic weighted average shares
Diluted weighted average shares
Diluted shares for adjusted diluted income per share
See end of press release for footnote explanations.
Table 2 – Results of Operations by
Segment
Better /
(Worse)
Segment Revenues:
Total Reportable Segments' Revenue
Intersegment Eliminations
Total Revenues
Segment Adjusted EBITDA
Total Reportable Segments' Adjusted EBITDA
Total Adjusted EBITDA
n/m = not meaningful
See end of press release for footnote explanations.
Table 3 – Factors Impacting Sales
Revenue
March 31, 2022 vs. 2021
Average Selling Price
Exchange
Sales Mix
Currency
& Other
Volume
(a) Excludes sales from tolling arrangements, by-products and raw materials.
(b) Excludes sales from by-products and raw materials.
Table
4 -- Reconciliation of U.S. GAAP to Non-GAAP Measures
Diluted Income
(Loss)
(Expense)
Benefit
Net
Income (Loss)
Per
Share
Three months
ended
March
31,
In millions, except
per share amounts
Net income
attributable to noncontrolling interests
Net income attributable
to Huntsman Corporation
Interest
expense from continuing operations
Income
tax expense, net from continuing operations
Depreciation
and amortization from continuing operations
Business
acquisition and integration expenses and purchase accounting inventory adjustments
Costs
associated with the Albemarle Settlement, net
EBITDA
/ Income from discontinued operations, net of tax
N/A
Loss on
sale of businesses/assets
Income
from transition services arrangements
Fair value
adjustments to Venator Investment
Certain
legal and other settlements and related expenses
Certain
non-recurring information technology project implementation costs
Amortization
of pension and postretirement actuarial losses
Restructuring,
impairment and plant closing and transition costs
Plant
incident remediation costs
Adjusted
income tax expense
Net income attributable to noncontrolling
interests, net of tax
Adjusted
pre-tax income
Adjusted
effective tax rate
Effective tax rate
N/A = not applicable
See end of press release
for footnote explanations.
Table 5 – Selected Balance Sheet Items
December 31,
Accounts and notes receivable, net
Inventories
Receivable associated with the Albemarle Settlement
Other current assets
Property, plant and equipment, net
Other noncurrent assets
Total assets
Accounts payable
Other current liabilities
Current portion of debt
Long-term debt
Other noncurrent liabilities
Huntsman Corporation stockholders’ equity
Noncontrolling interests in subsidiaries
Total liabilities and equity
Table 6 – Outstanding Debt
Revolving credit facility
Accounts receivable programs
Senior notes
Variable interest entities
Other debt
Total debt - excluding affiliates
Total cash
Net debt - excluding affiliates
Table 7 – Summarized Statement of
Cash Flows
Total cash at beginning of period
Net cash used in operating activities from discontinued operations
Net cash used in investing activities
Net cash provided by investing activities from discontinued operations
Net cash used in financing activities
Effect of exchange rate changes on cash
Total cash at end of period
Capital expenditures
Supplemental cash flow information:
Cash paid for interest
Cash paid for income taxes
Cash paid for restructuring and integration
Cash paid for pensions
Depreciation and amortization
Change in primary working capital:
Total change in primary working capital
Footnotes
We use adjusted EBITDA to measure the operating performance of our business and for planning and evaluating the performance of our
business segments. We provide adjusted net income because we feel it provides meaningful insight for the investment community into the
performance of our business. We believe that net income (loss) is the performance measure calculated and presented in accordance with
generally accepted accounting principles in the U.S. (“GAAP”) that is most directly comparable to adjusted EBITDA and adjusted
net income (loss). Additional information with respect to our use of each of these financial measures follows:
Adjusted EBITDA, adjusted net income (loss) and adjusted
diluted income (loss) per share, as used herein, are not necessarily comparable to other similarly titled measures of other companies.
Adjusted EBITDA is computed by eliminating the following
from net income (loss): (a) net income attributable to noncontrolling interests, net of tax; (b) interest; (c) income taxes; (d) depreciation
and amortization; (e) amortization of pension and postretirement actuarial losses (gains); (f) restructuring, impairment and plant closing
and transition costs (credits); and further adjusted for certain other items set forth in the reconciliation of net income (loss) to adjusted
EBITDA in Table 4 above.
Adjusted net income (loss) and adjusted diluted income (loss)
per share are computed by eliminating the after tax impact of the following items from net income (loss): (a) net income attributable
to noncontrolling interest; (b) amortization of pension and postretirement actuarial losses (gains); (c) restructuring, impairment and
plant closing and transition costs (credits); and further adjusted for certain other items set forth in the reconciliation of net income
(loss) to adjusted net income (loss) in Table 4 above. The income tax impacts, if any, of each adjusting item represent a ratable allocation
of the total difference between the unadjusted tax expense and the total adjusted tax expense, computed without consideration of any adjusting
items using a with and without approach.
We may disclose forward-looking adjusted EBITDA because
we cannot adequately forecast certain items and events that may or may not impact us in the near future, such as business acquisition
and integration expenses and purchase accounting inventory adjustments, certain legal and other settlements and related expenses, gains
on sale of businesses/assets and certain tax only items, including tax law changes not yet enacted. Each of such adjustment has not yet
occurred, is out of our control and/or cannot be reasonably predicted. In our view, our forward-looking adjusted EBITDA represents the
forecast net income on our underlying business operations but does not reflect any adjustments related to the items noted above that may
occur and can cause our adjusted EBITDA to differ.
Management internally uses free cash flow measure: (a) to evaluate our liquidity, (b) evaluate strategic investments, (c) plan stock
buyback and dividend levels and (d) evaluate our ability to incur and service debt. Free cash flow is defined as net cash provided by
operating activities less capital expenditures. Free cash flow is not a defined term under U.S. GAAP, and it should not be inferred that
the entire free cash flow amount is available for discretionary expenditures.
We believe adjusted effective tax rate provides improved comparability
between periods through the exclusion of certain items that management believes are not indicative of the businesses’ operational
profitability and that may obscure underlying business results and trends. In our view, effective tax rate is the performance measure
calculated 7and presented in accordance with U.S. GAAP that is most directly comparable to adjusted effective tax rate. The reconciliation
of historical adjusted effective tax rate and effective tax rate is set forth in Table 4 above. Please see the reconciliation of our
net income to adjusted net income in Table 4for details regarding the tax impacts of our non-GAAP adjustments.
Our forward-looking adjusted effective tax rate is calculated
based on our forecast effective tax rate, and the range of our forward-looking adjusted effective tax rate equals the range of our forecast
effective tax rate. We disclose forward-looking adjusted effective tax rate because we cannot adequately forecast certain items and events
that may or may not impact us in the near future, such as business acquisition and integration expenses and purchase accounting inventory
adjustments, certain legal and other settlements and related expenses, gains on sale of businesses/assets and certain tax only items,
including tax law changes not yet enacted. Each of such adjustment has not yet occurred, is out of our control and/or cannot be reasonably
predicted. In our view, our forward-looking adjusted effective tax rate represents the forecast effective tax rate on our underlying
business operations but does not reflect any adjustments related to the items noted above that may occur and can cause our effective
tax rate to differ.
(4) Net debt is a measure we use to
monitor how much debt we have after taking into account our total cash. We use it as an indicator of our overall financial position, and
calculate it by taking our total debt, including the current portion, and subtracting total cash.
About Huntsman:
Huntsman Corporation is a publicly traded global manufacturer and
marketer of differentiated and specialty chemicals with 2021 revenues of approximately $8 billion. Our chemical products number
in the thousands and are sold worldwide to manufacturers serving a broad and diverse range of consumer and industrial end markets.
We operate more than 70 manufacturing, R&D and operations facilities in approximately 30 countries and employ approximately
9,000 associates within our four distinct business divisions. For more information about Huntsman, please visit the company's website
at
Social Media:
Twitter:
www.twitter.com/Huntsman_Corp
Facebook:
www.facebook.com/huntsmancorp
LinkedIn:
www.linkedin.com/company/huntsman
Forward-Looking Statements:
This press release includes "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking
statements include statements concerning our plans, objectives, goals, strategies, future events, future revenue or performance, capital
expenditures, financing needs, plans or intentions relating to acquisitions, divestitures or strategic transactions, including the review
of the Textile Effects Division, business trends and any other information that is not historical information. When used in this press
release, the words "estimates," "expects," "anticipates," "likely," "projects," "outlook,"
"plans," "intends," "believes," "forecasts," or future or conditional verbs, such as "will,"
"should," "could" or "may," and variations of such words or similar expressions are intended to identify
forward-looking statements. These forward-looking statements, including, without limitation, management's examination of historical operating
trends and data, are based upon our current expectations and various assumptions and beliefs. In particular, such forward-looking statements
are subject to uncertainty and changes in circumstances and involve risks and uncertainties that may affect the Company's operations,
markets, products, prices and other factors as discussed in the Company's filings with the Securities and Exchange Commission (the "SEC").
In addition, there can be no assurance that the review of the Textile Effects Division will result in one or more transactions or other
strategic change or outcome. Significant risks and uncertainties may relate to, but are not limited to, ongoing impact of COVID-19 on
our operations and financial results, volatile global economic conditions, cyclical and volatile product markets, disruptions in production
at manufacturing facilities, timing of proposed transactions, reorganization or restructuring of the Company's operations, including any
delay of, or other negative developments affecting the ability to implement cost reductions and manufacturing optimization improvements
in the Company's businesses and to realize anticipated cost savings, and other financial, operational, economic, competitive, environmental,
political, legal, regulatory and technological factors. Any forward-looking statement should be considered in light of the risks set forth
under the caption "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2021, which may be supplemented
by other risks and uncertainties disclosed in any subsequent reports filed or furnished by the Company from time to time. All forward-looking
statements apply only as of the date made. Except as required by law, the Company undertakes no obligation to update or revise forward-looking
statements to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events.
The above information was disclosed in a filing to the SEC. To see the filing, click here.
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