Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2023 | Jul. 20, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-36272 | |
Entity Registrant Name | Element Solutions Inc | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 37-1744899 | |
Entity Address, Street Name | 500 East Broward Boulevard, Suite 1860 | |
Entity Address, Postal Zip Code | 33394 | |
Entity Address, City | Fort Lauderdale, | |
Entity Address, State | FL | |
City Area Code | 561 | |
Local Phone Number | 207-9600 | |
Title of each class | Common Stock, par value $0.01 per share | |
Trading symbol(s) | ESI | |
Name of each exchange on which registered | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 241,490,742 | |
Current Fiscal Year End Date | --12-31 | |
Amendment Flag | false | |
Entity Central Index Key | 0001590714 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Statement [Abstract] | ||||
Net sales | $ 586.1 | $ 676.9 | $ 1,160.5 | $ 1,357.1 |
Cost of sales | 357.6 | 427.1 | 704.2 | 844.3 |
Gross profit | 228.5 | 249.8 | 456.3 | 512.8 |
Operating expenses: | ||||
Selling, technical, general and administrative | 147 | 146.5 | 295.9 | 299.9 |
Research and development | 28.9 | 12.8 | 41.4 | 26.9 |
Total operating expenses | 175.9 | 159.3 | 337.3 | 326.8 |
Operating profit | 52.6 | 90.5 | 119 | 186 |
Other (expense) income: | ||||
Interest expense, net | (12) | (13.2) | (23.7) | (27.3) |
Foreign exchange gain | 9 | 2.7 | 13.9 | 2 |
Other (expense) income, net | (1.6) | 7.5 | (1.3) | 3.2 |
Total other expense | (4.6) | (3) | (11.1) | (22.1) |
Income before income taxes and non-controlling interests | 48 | 87.5 | 107.9 | 163.9 |
Income tax expense | (21.2) | (23.9) | (38.1) | (43.9) |
Net income from continuing operations | 26.8 | 63.6 | 69.8 | 120 |
Net income from discontinued operations, net of tax | 2.9 | 1.8 | 2.9 | 1.8 |
Net income | 29.7 | 65.4 | 72.7 | 121.8 |
Net loss (income) attributable to non-controlling interests | 0.2 | (0.2) | 0.1 | (0.5) |
Net income attributable to common stockholders | $ 29.9 | $ 65.2 | $ 72.8 | $ 121.3 |
Earnings per share | ||||
Basic from continuing operations (in dollars per share) | $ 0.11 | $ 0.25 | $ 0.29 | $ 0.48 |
Basic from discontinued operations (in dollars per share) | 0.01 | 0.01 | 0.01 | 0.01 |
Basic attributable to common stockholders (in dollars per share) | 0.12 | 0.26 | 0.30 | 0.49 |
Diluted from continuing operations (in dollars per share) | 0.11 | 0.25 | 0.29 | 0.48 |
Diluted from discontinued operations (in dollars per share) | 0.01 | 0.01 | 0.01 | 0.01 |
Diluted attributable to common stockholders (in dollars per share) | $ 0.12 | $ 0.26 | $ 0.30 | $ 0.49 |
Weighted average common shares outstanding | ||||
Basic (in shares) | 241.4 | 247.1 | 241.1 | 247.2 |
Diluted (in shares) | 241.7 | 247.5 | 241.6 | 248.3 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 29.7 | $ 65.4 | $ 72.7 | $ 121.8 |
Foreign currency translation: | ||||
Other comprehensive loss before reclassifications, net of tax expense of $3.0 and $4.5 for the three months ended June 30, 2023 and 2022 and $0.0 and $2.4 for the six months ended June 30, 2023 and 2022, respectively | (69.5) | (112.5) | (58.6) | (126.4) |
Total foreign currency translation adjustments | (69.5) | (112.5) | (58.6) | (126.4) |
Available-for-sale debt securities: | ||||
Other comprehensive loss before reclassifications, net of tax expense of $0.0 for the three and six months ended June 30, 2023, respectively | (1) | 0 | (1) | 0 |
Total unrealized loss on available-for-sale debt securities | (1) | 0 | (1) | 0 |
Derivative financial instruments: | ||||
Other comprehensive income before reclassifications, net of tax expense (benefit) of $2.1 and $2.9 for the three months ended June 30, 2023 and 2022 and ($0.9) and $11.7 for the six months ended June 30, 2023 and 2022, respectively | 14.7 | 6.1 | 13.2 | 28.6 |
Reclassifications, net of tax expense of $0.0 for the three months ended June 30, 2023 and 2022 and $0.0 for the six months ended June 30, 2023 and 2022, respectively | (9.7) | 3 | (17.8) | 7.8 |
Total unrealized gain (loss) on qualified hedging derivatives | 5 | 9.1 | (4.6) | 36.4 |
Other comprehensive loss | (65.5) | (103.4) | (64.2) | (90) |
Comprehensive (loss) income | (35.8) | (38) | 8.5 | 31.8 |
Comprehensive loss attributable to non-controlling interests | 0.6 | 0.1 | 0.5 | 1.5 |
Comprehensive (loss) income attributable to common stockholders | $ (35.2) | $ (37.9) | $ 9 | $ 33.3 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Foreign currency translation: | ||||
Before reclassification adjustment, tax | $ 3 | $ 4.5 | $ 0 | $ 2.4 |
Available-for-sale debt securities: | ||||
Before reclassification adjustments, tax | 0 | 0 | 0 | 0 |
Derivative financial instruments: | ||||
Before reclassification adjustment, tax expense (benefit) | 2.1 | 2.9 | 0.9 | 11.7 |
Reclassification adjustment, tax | $ 0 | $ 0 | $ 0 | $ 0 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Assets | ||
Cash & cash equivalents | $ 282.4 | $ 265.6 |
Accounts receivable, net of allowance for doubtful accounts of $13.9 and $14.4 at June 30, 2023 and December 31, 2022, respectively | 452.2 | 455.8 |
Inventories | 332.8 | 290.7 |
Prepaid expenses | 34.1 | 38.5 |
Other current assets | 155 | 138.1 |
Total current assets | 1,256.5 | 1,188.7 |
Property, plant and equipment, net | 282.5 | 277.2 |
Goodwill | 2,394.9 | 2,412.8 |
Intangible assets, net | 933.2 | 805.5 |
Deferred income tax assets | 48.5 | 51.5 |
Other assets | 145.4 | 168 |
Total assets | 5,061 | 4,903.7 |
Liabilities and stockholders' equity | ||
Accounts payable | 144.1 | 132.2 |
Current installments of long-term debt | 11.5 | 11.5 |
Accrued expenses and other current liabilities | 222.5 | 200.7 |
Total current liabilities | 378.1 | 344.4 |
Debt | 2,029.4 | 1,883.8 |
Pension and post-retirement benefits | 35.7 | 36.7 |
Deferred income tax liabilities | 115.3 | 121.2 |
Other liabilities | 182.8 | 168.5 |
Total liabilities | 2,741.3 | 2,554.6 |
Commitments and contingencies (Note 9) | ||
Stockholders' equity | ||
Common stock: 400.0 shares authorized (2023: 266.1 shares issued; 2022: 265.1 shares issued) | 2.7 | 2.7 |
Additional paid-in capital | 4,194.4 | 4,185.9 |
Treasury stock (2023: 24.6 shares; 2022: 24.3 shares) | (341.8) | (334.2) |
Accumulated deficit | (1,189.9) | (1,223.8) |
Accumulated other comprehensive loss | (361.9) | (298.1) |
Total stockholders' equity | 2,303.5 | 2,332.5 |
Non-controlling interests | 16.2 | 16.6 |
Total equity | 2,319.7 | 2,349.1 |
Total liabilities and stockholders' equity | $ 5,061 | $ 4,903.7 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Assets | ||
Allowance for doubtful accounts, current | $ 13.9 | $ 14.4 |
Stockholders' equity | ||
Common shares authorized (in shares) | 400,000,000 | 400,000,000 |
Common shares issued (in shares) | 266,100,000 | 265,100,000 |
Treasury shares (in shares) | 24,600,000 | 24,300,000 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Cash flows from operating activities: | ||
Net income | $ 72.7 | $ 121.8 |
Net income from discontinued operations, net of tax | 2.9 | 1.8 |
Net income from continuing operations | 69.8 | 120 |
Reconciliations of net income to net cash flows provided by operating activities: | ||
Depreciation and amortization | 80.2 | 82.2 |
Deferred income taxes | 2.5 | 7.9 |
Foreign exchange (gain) loss | (16.1) | 0.1 |
Incentive stock compensation | 7.7 | 8.8 |
Other, net | 23.5 | 7.7 |
Changes in assets and liabilities, net of acquisitions: | ||
Accounts receivable | (0.4) | (59.8) |
Inventories | (39.6) | (75.9) |
Accounts payable | 10.5 | 43.2 |
Accrued expenses | (11.9) | (43.2) |
Prepaid expenses and other current assets | 2 | (15.3) |
Other assets and liabilities | 6.2 | (7) |
Net cash flows provided by operating activities | 134.4 | 68.7 |
Cash flows from investing activities: | ||
Capital expenditures | (22.9) | (21.7) |
Proceeds from disposal of property, plant and equipment | 0.5 | 3.4 |
Acquisitions, net of cash acquired | (188.3) | (22.6) |
Other, net | (3) | (5.1) |
Net cash flows used in investing activities | (213.7) | (46) |
Cash flows from financing activities: | ||
Debt proceeds | 150 | 0 |
Repayments of borrowings | (5.8) | (6.3) |
Repurchases of common stock | 0 | (59.7) |
Dividends | (38.7) | (39.6) |
Payment of financing fees | (0.7) | 0 |
Other, net | (7.5) | (23.8) |
Net cash flows provided by (used in) financing activities | 97.3 | (129.4) |
Net cash flows provided by operating activities of discontinued operations | 2.9 | 1.8 |
Effect of exchange rate changes on cash and cash equivalents | (4.1) | (9.6) |
Net increase (decrease) in cash and cash equivalents | 16.8 | (114.5) |
Cash and cash equivalents at beginning of period | 265.6 | 330.1 |
Cash and cash equivalents at end of period | $ 282.4 | $ 215.6 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Millions | Total | Total Stockholders' Equity | Common Stock | Additional Paid-in Capital | Treasury Stock | Accumulated Deficit | Accumulated Other Comprehensive (Loss) Income | Non- controlling Interests |
Balance at Dec. 31, 2021 | $ 2,500.8 | $ 2,480.7 | $ 2.6 | $ 4,166.6 | $ (159.2) | $ (1,331.9) | $ (197.4) | $ 20.1 |
Balance (in shares) at Dec. 31, 2021 | 261,937,509 | |||||||
Balance (in shares) at Dec. 31, 2021 | 15,195,525 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income (loss) | 121.8 | 121.3 | 121.3 | 0.5 | ||||
Other comprehensive loss, net of taxes | (90) | (88) | (88) | (2) | ||||
Exercise/ vesting of share based compensation | (23.9) | (23.9) | $ 0.1 | $ (24) | ||||
Exercise/ vesting of share based compensation (in shares) | 3,039,990 | 1,032,769 | ||||||
Issuance of common stock under Employee Stock Purchase Plan | 0.7 | 0.7 | 0.7 | |||||
Issuance of common stock under Employee Stock Purchase Plan (in shares) | 35,566 | |||||||
Repurchases of common stock | (61.7) | (61.7) | $ (61.7) | |||||
Repurchases of common stock (in shares) | 2,993,094 | |||||||
Dividends | (40) | (40) | (40) | |||||
Equity compensation expense | 9 | 9 | 9 | |||||
Changes in non-controlling interests | (1.5) | 0.1 | 0.1 | (1.6) | ||||
Balance at Jun. 30, 2022 | 2,415.2 | 2,398.2 | $ 2.7 | 4,176.4 | $ (244.9) | (1,250.6) | (285.4) | 17 |
Balance (in shares) at Jun. 30, 2022 | 265,013,065 | |||||||
Balance (in shares) at Jun. 30, 2022 | 19,221,388 | |||||||
Balance at Mar. 31, 2022 | 2,513.5 | 2,494.9 | $ 2.6 | 4,172.3 | $ (201.8) | (1,295.9) | (182.3) | 18.6 |
Balance (in shares) at Mar. 31, 2022 | 264,944,559 | |||||||
Balance (in shares) at Mar. 31, 2022 | 17,051,344 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income (loss) | 65.4 | 65.2 | 65.2 | 0.2 | ||||
Other comprehensive loss, net of taxes | (103.4) | (103.1) | (103.1) | (0.3) | ||||
Exercise/ vesting of share based compensation | (0.1) | (0.1) | $ 0.1 | $ (0.2) | ||||
Exercise/ vesting of share based compensation (in shares) | 49,858 | 7,398 | ||||||
Issuance of common stock under Employee Stock Purchase Plan | 0.3 | 0.3 | 0.3 | |||||
Issuance of common stock under Employee Stock Purchase Plan (in shares) | 18,648 | |||||||
Repurchases of common stock | (42.9) | (42.9) | $ (42.9) | |||||
Repurchases of common stock (in shares) | 2,162,646 | |||||||
Dividends | (19.9) | (19.9) | (19.9) | |||||
Equity compensation expense | 3.7 | 3.7 | 3.7 | |||||
Changes in non-controlling interests | (1.4) | 0.1 | 0.1 | (1.5) | ||||
Balance at Jun. 30, 2022 | 2,415.2 | 2,398.2 | $ 2.7 | 4,176.4 | $ (244.9) | (1,250.6) | (285.4) | 17 |
Balance (in shares) at Jun. 30, 2022 | 265,013,065 | |||||||
Balance (in shares) at Jun. 30, 2022 | 19,221,388 | |||||||
Balance at Dec. 31, 2022 | $ 2,349.1 | 2,332.5 | $ 2.7 | 4,185.9 | $ (334.2) | (1,223.8) | (298.1) | 16.6 |
Balance (in shares) at Dec. 31, 2022 | 265,062,533 | |||||||
Balance (in shares) at Dec. 31, 2022 | 24,300,000 | 24,272,748 | ||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income (loss) | $ 72.7 | 72.8 | 72.8 | (0.1) | ||||
Other comprehensive loss, net of taxes | (64.2) | (63.8) | (63.8) | (0.4) | ||||
Exercise/ vesting of share based compensation | (7.6) | (7.6) | $ (7.6) | |||||
Exercise/ vesting of share based compensation (in shares) | 1,028,085 | 368,961 | ||||||
Issuance of common stock under Employee Stock Purchase Plan | 0.7 | 0.7 | 0.7 | |||||
Issuance of common stock under Employee Stock Purchase Plan (in shares) | 40,164 | |||||||
Dividends | (38.9) | (38.9) | (38.9) | |||||
Equity compensation expense | 7.8 | 7.8 | 7.8 | |||||
Changes in non-controlling interests | 0.1 | 0.1 | ||||||
Balance at Jun. 30, 2023 | $ 2,319.7 | 2,303.5 | $ 2.7 | 4,194.4 | $ (341.8) | (1,189.9) | (361.9) | 16.2 |
Balance (in shares) at Jun. 30, 2023 | 266,130,782 | |||||||
Balance (in shares) at Jun. 30, 2023 | 24,600,000 | 24,641,709 | ||||||
Balance at Mar. 31, 2023 | $ 2,371.3 | 2,354.7 | $ 2.7 | 4,190.7 | $ (341.5) | (1,200.4) | (296.8) | 16.6 |
Balance (in shares) at Mar. 31, 2023 | 266,029,479 | |||||||
Balance (in shares) at Mar. 31, 2023 | 24,625,334 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income (loss) | 29.7 | 29.9 | 29.9 | (0.2) | ||||
Other comprehensive loss, net of taxes | (65.5) | (65.1) | (65.1) | (0.4) | ||||
Exercise/ vesting of share based compensation | (0.3) | (0.3) | $ (0.3) | |||||
Exercise/ vesting of share based compensation (in shares) | 80,330 | 16,375 | ||||||
Issuance of common stock under Employee Stock Purchase Plan | 0.3 | 0.3 | 0.3 | |||||
Issuance of common stock under Employee Stock Purchase Plan (in shares) | 20,973 | |||||||
Dividends | (19.4) | (19.4) | (19.4) | |||||
Equity compensation expense | 3.4 | 3.4 | 3.4 | |||||
Changes in non-controlling interests | 0.2 | 0.2 | ||||||
Balance at Jun. 30, 2023 | $ 2,319.7 | $ 2,303.5 | $ 2.7 | $ 4,194.4 | $ (341.8) | $ (1,189.9) | $ (361.9) | $ 16.2 |
Balance (in shares) at Jun. 30, 2023 | 266,130,782 | |||||||
Balance (in shares) at Jun. 30, 2023 | 24,600,000 | 24,641,709 |
CONDENSED CONSOLIDATED STATEM_6
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Statement of Stockholders' Equity [Abstract] | ||||
Dividends declared (in dollars per share) | $ 0.08 | $ 0.08 | $ 0.16 | $ 0.16 |
BACKGROUND AND BASIS OF PRESENT
BACKGROUND AND BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BACKGROUND AND BASIS OF PRESENTATION | BACKGROUND AND BASIS OF PRESENTATION Background Element Solutions was incorporated in Delaware in January 2014 and its shares of common stock, par value $0.01 per share, trade on the New York Stock Exchange under the ticker symbol “ESI.” Element Solutions is a leading global specialty chemicals company whose businesses supply a broad range of solutions that enhance the performance of products people use every day. Developed in multi-step technological processes, these innovative solutions enable customers' manufacturing processes in several key industries, including consumer electronics, power electronics, semiconductor fabrication, communications and data storage infrastructure, automotive systems, industrial surface finishing, consumer packaging and offshore energy. Element Solutions' businesses provide products that, in substantially all cases, are consumed by customers as part of their production process, providing the Company with reliable and recurring revenue streams as the products are replenished in order to continue production. Element Solutions delivers its products to customers through its sales and service workforce, regional distributors and manufacturing representatives. Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with GAAP and include the accounts of Element Solutions and all of its controlled subsidiaries. The Company consolidates the income, expenses, assets, liabilities and cash flows of its subsidiaries from the date it acquires control or becomes the primary beneficiary. All intercompany accounts and transactions have been eliminated upon consolidation. In preparing the unaudited Condensed Consolidated Financial Statements in conformity with GAAP, management uses estimates and assumptions that may affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of net sales and expenses during the reporting period. Management applies judgment based on its understanding and analysis of the relevant circumstances, including historical experience and future expectations. These judgments, by their nature, are subject to an inherent degree of uncertainty and, accordingly, actual results could differ significantly from these estimates and assumptions. These unaudited Condensed Consolidated Financial Statements reflect all adjustments that are normal, recurring and necessary for a fair statement of the Company's financial position, results of operations and cash flows for interim periods, but are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2023. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Company's Consolidated Financial Statements and related notes included in its 2022 Annual Report. In the first quarter of 2023, the Company transferred operational responsibility of its Films business from its Graphics Solutions business within its Industrial & Specialty segment to its Circuitry Solutions business in its Electronics segment. The financial results of this business are not material to the Company's Consolidated Financial Statements. In addition, the Company transferred certain product lines between its Assembly Solutions business and its Semiconductor Solutions business, both of which are part of its Electronics segment, to align more closely with its current business structure. Historical information has been reclassified to reflect these changes for all periods presented in the unaudited Condensed Consolidated Financial Statements included in this Quarterly Report. Certain prior year amounts have also been reclassified to conform to the current year’s presentation. |
ACQUISITIONS
ACQUISITIONS | 6 Months Ended |
Jun. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITIONS | ACQUISITIONS ViaForm Distribution Rights On June 1, 2023, the Company terminated a long-standing distribution agreement related to its ViaForm ® electrochemical deposition products for $200 million, including $170 million paid at closing and a deferred payment of $30.0 million which remains contingent upon satisfaction of certain conditions during the applicable transition period. Following the transition period, the Company expects to manage all aspects of the ViaForm® product line in-house, which it believes will result in a more efficient supply chain and improved customer outcomes for leading semiconductor fabricators. This deferred payment is expected to be paid in the fourth quarter of 2023 and, as such, is included in the Condensed Consolidated Balance Sheets as "Accrued expenses and other current liabilities." The transaction did not meet the accounting definition of a business which precluded any goodwill from being recognized and allowed the Company to capitalize $0.5 million of transaction costs. The financial results of this transaction are included in the Company's Semiconductor Solutions business within its Electronics segment. In connection with the transaction, the Company recognized a reacquired distribution right intangible asset of $187 million, which will be amortized over 15 years, and a receivable of $13.5 million to be settled in inventory and cash at the conclusion of the transition period and is included in the Condensed Consolidated Balance Sheets as "Other current assets." The amount paid is deductible for tax purposes. Kuprion Acquisition On May 19, 2023, the Company completed the Kuprion Acquisition for $15.9 million, net of cash, with potential additional payments in various installments, which are not to exceed $259 million in aggregate, to be made upon the achievement of certain milestones associated with product qualification and revenue through December 31, 2030. The Company acquired Kuprion, Inc. to complement its next-generation nano-copper technology to the semiconductor, circuit board and electronics assembly markets. As the acquisition did not meet the accounting definition of a business and the technology acquired is still in development with no alternative future use, $15.7 million was expensed to research and development in the Condensed Consolidated Statements of Operations. Any potential earn-out payments to be paid based on milestones will be recognized when probable and estimable and either expensed as additional research and development expense, if the technology did not yet meet the accounting definition of an asset, or capitalized as a developed technology intangible asset. The Company does not expect payments associated with the contingent consideration to be material for the remainder of 2023. Kuprion, Inc. is included in the Company's Semiconductor Solutions business within its Electronics segment. The amount paid, including future consideration, is not deductible for tax purposes. |
INVENTORIES
INVENTORIES | 6 Months Ended |
Jun. 30, 2023 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES The major components of inventory, on a net basis, were as follows: (dollars in millions) June 30, 2023 December 31, 2022 Finished goods $ 198.3 $ 164.4 Work in process 31.1 25.9 Raw materials and supplies 103.4 100.4 Total inventories $ 332.8 $ 290.7 |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 6 Months Ended |
Jun. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT | PROPERTY, PLANT AND EQUIPMENT The major components of property, plant and equipment were as follows: (dollars in millions) June 30, 2023 December 31, 2022 Land and leasehold improvements $ 51.2 $ 52.0 Buildings and improvements 166.4 163.9 Machinery, equipment, fixtures and software 314.0 299.8 Construction in process 53.0 50.3 Total property, plant and equipment 584.6 566.0 Accumulated depreciation (302.1) (288.8) Property, plant and equipment, net $ 282.5 $ 277.2 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS Goodwill The changes in the carrying amount of goodwill by segment were as follows: (dollars in millions) Electronics Industrial & Specialty Total Balance at December 31, 2022 $ 1,304.0 $ 1,108.8 (1) $ 2,412.8 Transfer of Films business (2) 7.9 (7.9) — Foreign currency translation and other (29.2) 11.3 (17.9) Balance at June 30, 2023 $ 1,282.7 $ 1,112.2 $ 2,394.9 (1) Includes accumulated impairment losses of $46.6 million. (2) Goodwill was reallocated using a relative fair value approach and assessed for impairment both before and after the allocation. See Note 1, Background and Basis of Presentation, to the unaudited Condensed Consolidated Financial Statements for further information. Intangible Assets The major components of intangible assets were as follows: June 30, 2023 December 31, 2022 (dollars in millions) Gross Carrying Accumulated Net Book Gross Carrying Accumulated Net Book Customer relationships $ 966.8 $ (467.9) $ 498.9 $ 967.5 $ (434.1) $ 533.4 Developed technology 405.6 (293.5) 112.1 408.9 (277.0) 131.9 Trade names 94.8 (27.0) 67.8 96.0 (23.8) 72.2 Reacquired distribution rights 187.0 (1.0) 186.0 — — — Other 0.6 (0.2) 0.4 — — — Indefinite-lived trade name 68.0 — 68.0 68.0 — 68.0 Total $ 1,722.8 $ (789.6) $ 933.2 $ 1,540.4 $ (734.9) $ 805.5 For the three months ended June 30, 2023 and 2022, the Company recorded amortization expense on intangible assets of $31.0 million and $30.3 million, respectively. For the six months ended June 30, 2023 and 2022, the Company recorded amortization expense on intangible assets of $60.6 million and $61.3 million, respectively. |
DEBT
DEBT | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT The Company’s debt obligations consisted of the following: (dollars in millions) Maturity Date Interest Rate June 30, 2023 December 31, 2022 Term Loans A (1) 2026 SOFR plus 1.75% $ 149.1 $ — Term Loans B (1) 2026 SOFR plus 2.00% 1,100.3 1,104.5 Senior Notes - $800 million (2) 2028 3.875% 791.5 790.8 Total debt 2,040.9 1,895.3 Less: current installments of long-term debt 11.5 11.5 Total long-term debt $ 2,029.4 $ 1,883.8 (1) Term loans, net of unamortized discounts and debt issuance costs of $8.9 million and $9.5 million at June 30, 2023 and December 31, 2022, respectively. The effective interest rate was 2.9% and 1.6% at June 30, 2023 and December 31, 2022, respectively, including the effects of interest rate swaps and net investment hedges. See Note 7, Financial Instruments, to the unaudited Condensed Consolidated Financial Statements for further information regarding the Company's interest rate swaps and net investment hedges. (2) Senior notes, net of unamortized debt issuance costs of $8.5 million and $9.2 million at June 30, 2023 and December 31, 2022, respectively. The effective interest rate was 4.1% at June 30, 2023 and December 31, 2022, respectively. Credit Agreement On June 1, 2023, the Company amended its Credit Agreement and borrowed U.S. dollar denominated term loans A in an aggregate principal amount of $150 million under an incremental term loan facility. The new term loans A have identical terms as the term loans B, including a maturity date of January 2026, except for a first lien net leverage ratio covenant, their SOFR spread adjustment and the lack of required quarterly principal payments. Proceeds of the transaction were used to finance a portion of the reacquired ViaForm Distribution Rights. Guarantees, Covenants and Events of Default The obligations of the borrowers (the Company and its subsidiary, MacDermid, Incorporated) under the Credit Agreement are guaranteed, jointly and severally, by certain of their domestic subsidiaries and secured by a first-priority security interest in substantially all of their assets and the assets of the guarantors, including mortgages on material real property, subject to certain exceptions. The Credit Agreement contains customary representations and warranties and affirmative and negative covenants, including limitations on additional indebtedness, dividends, and other distributions, entry into new lines of business, use of loan proceeds, capital expenditures, restricted payments, restrictions on liens on the assets of the borrowers or any guarantor, transactions with affiliates, amendments to organizational documents, accounting changes, sale and leaseback transactions and dispositions. Subject to certain exceptions, the borrowers are required to maintain a first lien net leverage ratio not to exceed 5.0 to 1.0 under the term loan A facility and any borrowings under the revolving credit facility in an aggregate amount greater than 30% of the commitment amount, subject to a right to cure. The Credit Agreement requires the borrowers to make mandatory prepayments of borrowings, subject to certain exceptions, as described in the Credit Agreement. In addition, the Credit Agreement contains customary events of default that include, among others, non-payment of principal, interest or fees, violation of covenants, inaccuracy of representations and warranties, failure to make payment on, or defaults with respect to, certain other material indebtedness, bankruptcy and insolvency events, material judgments and change of control provisions. Upon the occurrence of an event of default, and after the expiration of any applicable grace period, payment of any outstanding loans under the Credit Agreement may be accelerated and the lenders could foreclose on their security interests in the assets of the borrowers and the guarantors. At June 30, 2023, the Company was in compliance with the debt covenants contained in the Credit Agreement and had full availability of its unused borrowing capacity of $369 million, net of letters of credit, under the revolving credit facility. The Company is required to pay a commitment fee on any undrawn portion of the revolving credit facility which is not material. Senior Notes 3.875% USD Notes due 2028 The indenture governing the 3.875% USD Notes due 2028 provides for, among other things, customary affirmative and negative covenants, events of default and other customary provisions. The notes accrue interest at a rate of 3.875% per annum, payable semi-annually in arrears, on March 1 and September 1 of each year, and will mature on September 1, 2028, unless earlier repurchased or redeemed. Pursuant to the indenture, the Company has the option to redeem the 3.875% USD Notes due 2028 prior to their maturity, subject to, in certain cases, the payment of an applicable make-whole premium, or to repurchase them by any means other than a redemption, including by tender offer, open market purchases or negotiated transactions. The 3.875% USD Notes due 2028 are fully and unconditionally guaranteed on a senior unsecured basis by generally all of the Company’s domestic subsidiaries that guarantee the obligations of the borrowers under the Credit Agreement. Lines of Credit and Other Debt Facilities The Company has access to various revolving lines of credit, short-term debt facilities and overdraft facilities worldwide which are used to fund short-term cash needs. There were no amounts outstanding under such facilities at June 30, 2023 and December 31, 2022. The Company had letters of credit outstanding of $5.9 million and $6.0 million at June 30, 2023 and December 31, 2022, respectively, of which $5.9 million and $6.0 million at June 30, 2023 and December 31, 2022, respectively, reduced the borrowings available under the various facilities. At June 30, 2023 and December 31, 2022, the availability under these facilities totaled approximately $392 million and $391 million, respectively, net of outstanding letters of credit. |
FINANCIAL INSTRUMENTS
FINANCIAL INSTRUMENTS | 6 Months Ended |
Jun. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
FINANCIAL INSTRUMENTS | FINANCIAL INSTRUMENTS Derivatives and Hedging In the normal course of business, the Company is exposed to risks relating to changes in interest rates, foreign currency exchange rates and commodity prices. Derivative financial instruments, such as interest rate swaps, net investment hedges, foreign currency exchange forward contracts and commodities derivative contracts are used to manage the risks associated with changes in the conditions of those markets. All derivatives are recognized in the Condensed Consolidated Balance Sheets at fair value. The counterparties to the Company’s derivative agreements are primarily major international financial institutions. The Company continually monitors its derivative positions and the credit ratings of its counterparties and does not anticipate nonperformance on their part. Interest Rate and Cross-Currency Swaps The Company uses interest rate swaps and cross-currency swaps to reduce its exposure to interest rate risk and foreign currency risk. The Company has designated its interest rate swaps as cash flow hedges and its cross-currency swaps as net investment hedges of the foreign currency exposure of a portion of its net investment in certain euro functional subsidiaries. These swaps, as amended from time to time, effectively convert the Company's term loans under the Credit Agreement, which are U.S. dollar denominated debt obligations, into fixed-rate euro-denominated debt through their respective expiration dates. In June 2023, the Company entered into interest rate swaps and cross-currency swaps to effectively convert the $150 million of incremental term loans A from U.S. dollar denominated debt obligations into fixed-rate euro-denominated debt through January 2026. In March 2023, the Company terminated and replaced $360 million of its interest rate swaps and cross-currency swaps with swaps that mature in January 2026; which date is concurrent with the maturity date of the Company's term loans to which they relate. The fair value of the interest rate swaps on the date of termination was $6.8 million and the amount recorded in "Accumulated other comprehensive loss" is being amortized as a reduction to "Interest expense, net" in the Condensed Consolidated Statements of Operations from March 2023 through January 2024. The fair value in "Accumulated other comprehensive loss" for the terminated cross-currency swaps will remain until the hedged net investment is sold or liquidated. The total notional value of the interest rate swaps and cross-currency swaps held at June 30, 2023 and December 31, 2022 was approximately $1.26 billion and $1.11 billion, respectively. As of June 30, 2023, $358 million in notional value matures in January 2024, $392 million in January 2025 and $508 million in January 2026. The proceeds from these contracts are reflected as "Cash flows from operating activities" in the Condensed Consolidated Statement of Cash Flows. Changes in the fair value of interest rate swaps are recorded in "Accumulated other comprehensive loss" and reclassified to "Interest expense, net" in the Condensed Consolidated Statements of Operations as the underlying hedged item affects earnings. Changes in the fair value of cross-currency swaps are recorded in "Foreign currency translation" in "Accumulated other comprehensive loss." The net result of these hedges, excluding the reduction to interest expense from the terminated interest rate swaps discussed above, is an interest rate of approximately 2.9% at June 30, 2023, which could vary in the future due to changes in the euro and the U.S. dollar exchange rate. The fair value of the interest rate swaps was a net asset of $43.3 million and $47.3 million at June 30, 2023 and December 31, 2022, respectively. The fair value of the cross-currency swaps was a net asset of $40.2 million and $70.4 million at June 30, 2023 and December 31, 2022, respectively. For the three and six months ended June 30, 2023, these interest rate swaps and cross-currency swaps were deemed highly effective. The Company expects to reclassify a $32.2 million benefit from "Accumulated other comprehensive loss" to "Interest expense, net" in the Condensed Consolidated Statements of Operations within the next twelve months. Foreign Currency The Company conducts a significant portion of its business in currencies other than the U.S. dollar and certain subsidiaries conduct business in currencies other than their functional currency, which is typically their local currency. As a result, the Company’s operating results are impacted by foreign currency exchange rate volatility. At June 30, 2023, the Company held foreign currency forward contracts to purchase and sell various currencies to mitigate foreign currency exposure primarily with the U.S. dollar, euro and British pound. The Company has not designated any foreign currency exchange forward contracts as eligible for hedge accounting and, as a result, changes in the fair value of foreign currency forward contracts are recorded in the Condensed Consolidated Statements of Operations as "Other (expense) income, net." The total notional value of foreign currency exchange forward contracts held at June 30, 2023 and December 31, 2022 was approximately $104 million and $105 million, respectively, with settlement dates generally within one year. The fair value of the foreign currency forward contracts was an immaterial net current asset and a $0.3 million net current liability at June 30, 2023 and December 31, 2022, respectively. Commodities As part of its risk management policy, the Company enters into commodity derivative contracts for the purpose of mitigating its exposure to fluctuations in prices of certain metals used in the production of its finished goods. The Company held derivative contracts to purchase and sell various metals, primarily tin and silver, for a notional amount of $49.9 million and $45.7 million at June 30, 2023 and December 31, 2022, respectively. The fair value of the metals derivative contracts was a net current liability of $0.2 million and $2.5 million at June 30, 2023 and December 31, 2022, respectively. Substantially all contracts outstanding at June 30, 2023 have delivery dates within one year. The Company has not designated these derivatives as hedging instruments and, accordingly, records changes in their fair values in the Condensed Consolidated Statements of Operations as "Other (expense) income, net." Realized gains and losses on derivative contracts are accounted for in the Condensed Consolidated Statements of Cash Flows as "Operating activities". Fair Value Measurements The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis: (dollars in millions) Balance sheet location Classification June 30, 2023 December 31, 2022 Asset Category Foreign exchange contracts Other current assets Level 2 $ 0.1 $ 0.2 Metals contracts Other current assets Level 2 1.7 2.5 Interest rate swaps Other current assets Level 2 32.2 32.7 Cross-currency swaps Other current assets Level 2 27.4 26.1 Interest rate swaps Other assets Level 2 11.1 14.6 Cross-currency swaps Other assets Level 2 18.2 44.3 Available-for-sale debt securities Other assets Level 3 13.9 11.5 Total $ 104.6 $ 131.9 Liability Category Foreign exchange contracts Accrued expenses and other current liabilities Level 2 $ 0.1 $ 0.5 Metals contracts Accrued expenses and other current liabilities Level 2 1.9 5.0 Cross-currency swaps Other liabilities Level 2 5.4 — Total $ 7.4 $ 5.5 The fair values of Level 1 and Level 2 derivative assets and liabilities are determined using pricing models based upon observable market inputs, such as market spot and futures prices on over-the-counter derivative instruments, market interest rates and consideration of counterparty credit risk. Level 3 investments are valued using a probability weighted methodology based on possible outcomes of potential liquidity events. Significant assumptions include the enterprise valuation, the timing and type of liquidation events and the risk-free interest rate. There were no significant transfers of financial instruments between the fair value hierarchy levels for the three and six months ended June 30, 2023. The carrying value and estimated fair value of the Company’s long-term debt totaled $2.04 billion and $1.96 billion, respectively, at June 30, 2023. At December 31, 2022, the carrying value and estimated fair value totaled $1.90 billion and $1.80 billion, respectively. The carrying values noted above include unamortized discounts and debt issuance costs. The estimated fair value of long-term debt is measured using quoted market prices for similar instruments at the reporting date multiplied by the gross carrying amount of the related debt, which excludes unamortized discounts and debt issuance costs. Such instruments are valued using Level 2 inputs. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHAREBasic and diluted earnings per share are based on the weighted average number of shares of the Company's common stock and potential common stock outstanding during the period. Potential common stock, for purposes of determining diluted earnings per share, assumes the issuance of all potentially dilutive share equivalents using the treasury stock method. A computation of earnings per share and weighted average shares of the Company's common stock outstanding for the three and six months ended June 30, 2023 and 2022 is as follows: Three Months Ended June 30, Six Months Ended June 30, (dollars in millions, except per share amounts) 2023 2022 2023 2022 Net income from continuing operations $ 26.8 $ 63.6 $ 69.8 $ 120.0 Net loss (income) attributable to non-controlling interests 0.2 (0.2) 0.1 (0.5) Net income attributable to common stockholders $ 27.0 $ 63.4 $ 69.9 $ 119.5 Basic weighted average common shares outstanding 241.4 247.1 241.1 247.2 Denominator adjustments for diluted EPS: Number of stock options and RSUs 0.3 0.4 0.5 1.1 Denominator adjustments for diluted EPS 0.3 0.4 0.5 1.1 Diluted weighted average common shares outstanding 241.7 247.5 241.6 248.3 Earnings per share from continuing operations attributable to common stockholders: Basic $ 0.11 $ 0.25 $ 0.29 $ 0.48 Diluted $ 0.11 $ 0.25 $ 0.29 $ 0.48 For the three and six months ended June 30, 2023 and 2022, the following securities were not included in the computation of diluted shares outstanding because either the effect would be anti-dilutive or the applicable performance targets were not yet met for awards contingent upon such measures: Three Months Ended June 30, Six Months Ended June 30, (shares in millions) 2023 2022 2023 2022 Shares issuable upon vesting of RSUs and exercise of stock options 3.5 3.6 3.7 3.6 |
CONTINGENCIES, ENVIRONMENTAL AN
CONTINGENCIES, ENVIRONMENTAL AND LEGAL MATTERS | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES, ENVIRONMENTAL AND LEGAL MATTERS | CONTINGENCIES, ENVIRONMENTAL AND LEGAL MATTERS Environmental Matters The Company is involved in various claims relating to environmental matters at current and former plants and waste management sites. At certain of these sites, the Company engages or participates in remedial and other environmental compliance activities. At other sites, the Company has been named as a potential responsible party pursuant to the federal Superfund Act and/or state Superfund laws comparable to the federal law for site remediation. After analyzing each individual site, considering the number of parties involved, the level of its potential liability or contribution relating to the other parties, the nature and magnitude of the hazardous waste involved, the method and extent of remediation, the potential insurance coverage, the estimated legal and consulting expense with respect to each site and the time period over which any costs would likely be incurred, the Company estimates the clean-up costs and related claims for each site. The estimates are based in part on discussions with other potential responsible parties, governmental agencies and engineering firms. The Company accrues for environmental matters when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated based on current laws and existing technologies. The accruals are adjusted periodically as assessment and remediation efforts progress or as additional technical or legal information becomes available. The Company's environmental liabilities, which are included in the Condensed Consolidated Balance Sheets as "Accrued expenses and other current liabilities" and "Other liabilities," totaled $11.8 million and $11.6 million at June 30, 2023 and December 31, 2022, respectively, primarily driven by environmental remediation, clean-up costs and monitoring of sites that were either closed or disposed of in prior years. While uncertainty exists with respect to the amount and timing of its ultimate environmental liabilities, the Company does not currently anticipate any material losses in excess of the amount recorded. However, new information about the sites, such as results of investigations, could make it necessary for the Company to reassess its potential exposure related to these environmental matters. As of the date hereof, the Company believes it is not practicable to provide an estimated range of reasonably possible environmental losses in excess of its recorded liabilities, and, as a result, the Company is unable to ascertain the ultimate aggregate amount of monetary liability or financial impact that may be associated with these matters. Legal Matters From time to time, the Company is involved in various legal proceedings, investigations and/or claims in the normal course of its business. Although it cannot predict with certainty the ultimate resolution of these matters, which involve judgments that are inherently subjective, the Company believes that their resolutions, to the extent not covered by insurance, will not, individually or in the aggregate, have a material adverse effect on its consolidated financial position, results of operations or cash flows. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company's quarterly income tax provision is measured using an estimate of its consolidated annual effective tax rate, which includes the impact of foreign withholding tax accruals and uncertain tax positions, adjusted for discrete items, within the periods presented. The comparison of the Company's income tax provision between periods can be significantly impacted by the level and mix of earnings and losses by tax jurisdiction and discrete items. For the three months ended June 30, 2023, the Company recognized income tax expense of $21.2 million, as compared to $23.9 million in the same period for 2022. For the six months ended June 30, 2023, the Company recognized income tax expense of $38.1 million, as compared to $43.9 million in the same period for 2022. Income tax expense includes a U.S. tax benefit provided with respect to foreign earnings and the impact of changes to the level and mix of earnings, offset by an increase in foreign withholding tax accruals for the three and six months ended June 30, 2023. The effective tax rates for the three and six months ended June 30, 2023 were adversely impacted by expenses that will not be able to be deducted on our tax return but reduced our pre-tax income, primarily the recognition of $15.7 million of research and development costs associated with the Kuprion acquisition, that were not in the prior year period. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONSThe Company is party to an Advisory Services Agreement with Mariposa Capital, LLC, an affiliate of one of its founder directors, whereby Mariposa Capital, LLC is entitled to receive an annual fee of $3.0 million and reimbursement for expenses. This agreement is automatically renewed for successive one-year terms unless either party notifies the other in writing of its intention not to renew no later than 90 days prior to the expiration of the applicable term. Amounts paid under this agreement are recorded in the Condensed Consolidated Statements of Operations as "Selling, technical, general and administrative" expense. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION The Company's operations are organized into two reportable segments: Electronics and Industrial & Specialty. These segments represent businesses for which separate financial information is utilized by the chief operating decision maker (or CODM) for purposes of allocating resources and evaluating performance. See Note 1, Background and Basis of Presentation , to the unaudited Condensed Consolidated Financial Statements for information about the transfer of the Company's Films business and other transfers of product lines that occurred in the first quarter of 2023. The Company allocates resources and evaluates the performance of its operating segments based primarily on net sales and Adjusted EBITDA. Adjusted EBITDA for each segment is defined as EBITDA, as further adjusted for additional items included in earnings which the Company believes are not representative or indicative of each of its segments' ongoing business or are considered to be associated with the Company's capital structure. Adjusted EBITDA for each segment also includes an allocation of corporate costs, such as compensation expense and professional fees. Results of Operations The following table summarizes financial information regarding each reportable segment’s results of operations, including disaggregated external net sales by product category: Three Months Ended June 30, Six Months Ended June 30, (dollars in millions) 2023 2022 2023 2022 Net sales: Electronics Assembly Solutions $ 184.0 $ 222.4 $ 357.5 $ 453.0 Circuitry Solutions 103.0 137.9 209.7 273.2 Semiconductor Solutions 68.8 80.5 128.2 156.2 Total Electronics 355.8 440.8 695.4 882.4 Industrial & Specialty Industrial Solutions 175.8 182.3 356.5 372.4 Graphics Solutions 36.7 37.6 71.6 70.2 Energy Solutions 17.8 16.2 37.0 32.1 Total Industrial & Specialty 230.3 236.1 465.1 474.7 Total net sales $ 586.1 $ 676.9 $ 1,160.5 $ 1,357.1 Adjusted EBITDA: Electronics $ 76.3 $ 101.2 $ 149.0 $ 202.1 Industrial & Specialty 39.8 39.2 79.4 83.1 Total Adjusted EBITDA $ 116.1 $ 140.4 $ 228.4 $ 285.2 The following table reconciles "Net income attributable to common stockholders" to Adjusted EBITDA: Three Months Ended June 30, Six Months Ended June 30, (dollars in millions) 2023 2022 2023 2022 Net income attributable to common stockholders $ 29.9 $ 65.2 $ 72.8 $ 121.3 Add (subtract): Net (loss) income attributable to non-controlling interests (0.2) 0.2 (0.1) 0.5 Income from discontinued operations, net of tax (2.9) (1.8) (2.9) (1.8) Income tax expense 21.2 23.9 38.1 43.9 Interest expense, net 12.0 13.2 23.7 27.3 Depreciation expense 10.1 10.3 19.6 20.9 Amortization expense 31.0 30.3 60.6 61.3 EBITDA 101.1 141.3 211.8 273.4 Adjustments to reconcile to Adjusted EBITDA: Inventory step-up — — — 0.5 Restructuring expense 1.9 1.3 4.2 3.2 Acquisition and integration expense 4.4 1.1 8.3 4.0 Foreign exchange (gain) loss on intercompany loans (8.5) (0.9) (14.1) 0.7 Kuprion Acquisition research and development charge 15.7 — 15.7 — Adjustment of stock compensation previously not probable — — — 1.3 Other, net 1.5 (2.4) 2.5 2.1 Adjusted EBITDA $ 116.1 $ 140.4 $ 228.4 $ 285.2 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net Income (Loss) | $ 29.9 | $ 65.2 | $ 72.8 | $ 121.3 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended | 6 Months Ended |
Jun. 30, 2023 shares | Jun. 30, 2023 shares | |
Trading Arrangements, by Individual | ||
Non-Rule 10b5-1 Arrangement Adopted | false | |
Rule 10b5-1 Arrangement Terminated | true | |
Non-Rule 10b5-1 Arrangement Terminated | false | |
Carey J Dorman [Member] | ||
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | On March 1, 2023, Benjamin Gliklich, President & Chief Executive Officer, and Carey J. Dorman, Executive Vice President - Chief Financial Officer, each entered into a written plan for the potential sale of up to 200,000 and 30,000 shares of common stock of the Company, respectively, between May 30, 2023 and October 31, 2023. These plans were intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act. As of June 1, 2023, all plan shares had been sold, which resulted in the automatic termination of both plans. | |
Name | Carey J. Dorman | |
Title | Executive Vice President - Chief Financial Officer | |
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | March 1, 2023 | |
Arrangement Duration | 244 days | |
Aggregate Available | 30,000 | 30,000 |
Benjamin Gliklich [Member] | ||
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | On March 1, 2023, Benjamin Gliklich, President & Chief Executive Officer, and Carey J. Dorman, Executive Vice President - Chief Financial Officer, each entered into a written plan for the potential sale of up to 200,000 and 30,000 shares of common stock of the Company, respectively, between May 30, 2023 and October 31, 2023. These plans were intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act. As of June 1, 2023, all plan shares had been sold, which resulted in the automatic termination of both plans. | |
Name | Benjamin Gliklich | |
Title | President & Chief Executive Officer | |
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | March 1, 2023 | |
Arrangement Duration | 90 days | |
Aggregate Available | 200,000 | 200,000 |
BACKGROUND AND BASIS OF PRESE_2
BACKGROUND AND BASIS OF PRESENTATION (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidation | The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with GAAP and include the accounts of Element Solutions and all of its controlled subsidiaries. The Company consolidates the income, expenses, assets, liabilities and cash flows of its subsidiaries from the date it acquires control or becomes the primary beneficiary. All intercompany accounts and transactions have been eliminated upon consolidation. |
Basis of Presentation | In preparing the unaudited Condensed Consolidated Financial Statements in conformity with GAAP, management uses estimates and assumptions that may affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of net sales and expenses during the reporting period. Management applies judgment based on its understanding and analysis of the relevant circumstances, including historical experience and future expectations. These judgments, by their nature, are subject to an inherent degree of uncertainty and, accordingly, actual results could differ significantly from these estimates and assumptions. These unaudited Condensed Consolidated Financial Statements reflect all adjustments that are normal, recurring and necessary for a fair statement of the Company's financial position, results of operations and cash flows for interim periods, but are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2023. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Company's Consolidated Financial Statements and related notes included in its 2022 Annual Report. |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Major Components of Inventory | The major components of inventory, on a net basis, were as follows: (dollars in millions) June 30, 2023 December 31, 2022 Finished goods $ 198.3 $ 164.4 Work in process 31.1 25.9 Raw materials and supplies 103.4 100.4 Total inventories $ 332.8 $ 290.7 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Major Components of Property, Plant, and Equipment | The major components of property, plant and equipment were as follows: (dollars in millions) June 30, 2023 December 31, 2022 Land and leasehold improvements $ 51.2 $ 52.0 Buildings and improvements 166.4 163.9 Machinery, equipment, fixtures and software 314.0 299.8 Construction in process 53.0 50.3 Total property, plant and equipment 584.6 566.0 Accumulated depreciation (302.1) (288.8) Property, plant and equipment, net $ 282.5 $ 277.2 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in the Carrying Amount of Goodwill by Segment | The changes in the carrying amount of goodwill by segment were as follows: (dollars in millions) Electronics Industrial & Specialty Total Balance at December 31, 2022 $ 1,304.0 $ 1,108.8 (1) $ 2,412.8 Transfer of Films business (2) 7.9 (7.9) — Foreign currency translation and other (29.2) 11.3 (17.9) Balance at June 30, 2023 $ 1,282.7 $ 1,112.2 $ 2,394.9 (1) Includes accumulated impairment losses of $46.6 million. (2) Goodwill was reallocated using a relative fair value approach and assessed for impairment both before and after the allocation. See Note 1, Background and Basis of Presentation, to the unaudited Condensed Consolidated Financial Statements for further information. |
Schedule of Major Components of Intangible Assets | The major components of intangible assets were as follows: June 30, 2023 December 31, 2022 (dollars in millions) Gross Carrying Accumulated Net Book Gross Carrying Accumulated Net Book Customer relationships $ 966.8 $ (467.9) $ 498.9 $ 967.5 $ (434.1) $ 533.4 Developed technology 405.6 (293.5) 112.1 408.9 (277.0) 131.9 Trade names 94.8 (27.0) 67.8 96.0 (23.8) 72.2 Reacquired distribution rights 187.0 (1.0) 186.0 — — — Other 0.6 (0.2) 0.4 — — — Indefinite-lived trade name 68.0 — 68.0 68.0 — 68.0 Total $ 1,722.8 $ (789.6) $ 933.2 $ 1,540.4 $ (734.9) $ 805.5 |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule Debt and Capital Lease Obligations | The Company’s debt obligations consisted of the following: (dollars in millions) Maturity Date Interest Rate June 30, 2023 December 31, 2022 Term Loans A (1) 2026 SOFR plus 1.75% $ 149.1 $ — Term Loans B (1) 2026 SOFR plus 2.00% 1,100.3 1,104.5 Senior Notes - $800 million (2) 2028 3.875% 791.5 790.8 Total debt 2,040.9 1,895.3 Less: current installments of long-term debt 11.5 11.5 Total long-term debt $ 2,029.4 $ 1,883.8 (1) Term loans, net of unamortized discounts and debt issuance costs of $8.9 million and $9.5 million at June 30, 2023 and December 31, 2022, respectively. The effective interest rate was 2.9% and 1.6% at June 30, 2023 and December 31, 2022, respectively, including the effects of interest rate swaps and net investment hedges. See Note 7, Financial Instruments, to the unaudited Condensed Consolidated Financial Statements for further information regarding the Company's interest rate swaps and net investment hedges. (2) Senior notes, net of unamortized debt issuance costs of $8.5 million and $9.2 million at June 30, 2023 and December 31, 2022, respectively. The effective interest rate was 4.1% at June 30, 2023 and December 31, 2022, respectively. |
FINANCIAL INSTRUMENTS (Tables)
FINANCIAL INSTRUMENTS (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis: (dollars in millions) Balance sheet location Classification June 30, 2023 December 31, 2022 Asset Category Foreign exchange contracts Other current assets Level 2 $ 0.1 $ 0.2 Metals contracts Other current assets Level 2 1.7 2.5 Interest rate swaps Other current assets Level 2 32.2 32.7 Cross-currency swaps Other current assets Level 2 27.4 26.1 Interest rate swaps Other assets Level 2 11.1 14.6 Cross-currency swaps Other assets Level 2 18.2 44.3 Available-for-sale debt securities Other assets Level 3 13.9 11.5 Total $ 104.6 $ 131.9 Liability Category Foreign exchange contracts Accrued expenses and other current liabilities Level 2 $ 0.1 $ 0.5 Metals contracts Accrued expenses and other current liabilities Level 2 1.9 5.0 Cross-currency swaps Other liabilities Level 2 5.4 — Total $ 7.4 $ 5.5 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | A computation of earnings per share and weighted average shares of the Company's common stock outstanding for the three and six months ended June 30, 2023 and 2022 is as follows: Three Months Ended June 30, Six Months Ended June 30, (dollars in millions, except per share amounts) 2023 2022 2023 2022 Net income from continuing operations $ 26.8 $ 63.6 $ 69.8 $ 120.0 Net loss (income) attributable to non-controlling interests 0.2 (0.2) 0.1 (0.5) Net income attributable to common stockholders $ 27.0 $ 63.4 $ 69.9 $ 119.5 Basic weighted average common shares outstanding 241.4 247.1 241.1 247.2 Denominator adjustments for diluted EPS: Number of stock options and RSUs 0.3 0.4 0.5 1.1 Denominator adjustments for diluted EPS 0.3 0.4 0.5 1.1 Diluted weighted average common shares outstanding 241.7 247.5 241.6 248.3 Earnings per share from continuing operations attributable to common stockholders: Basic $ 0.11 $ 0.25 $ 0.29 $ 0.48 Diluted $ 0.11 $ 0.25 $ 0.29 $ 0.48 |
Schedule of Antidilutive Securities Excluded From Computation of Earnings Per Share | For the three and six months ended June 30, 2023 and 2022, the following securities were not included in the computation of diluted shares outstanding because either the effect would be anti-dilutive or the applicable performance targets were not yet met for awards contingent upon such measures: Three Months Ended June 30, Six Months Ended June 30, (shares in millions) 2023 2022 2023 2022 Shares issuable upon vesting of RSUs and exercise of stock options 3.5 3.6 3.7 3.6 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, By Segment | The following table summarizes financial information regarding each reportable segment’s results of operations, including disaggregated external net sales by product category: Three Months Ended June 30, Six Months Ended June 30, (dollars in millions) 2023 2022 2023 2022 Net sales: Electronics Assembly Solutions $ 184.0 $ 222.4 $ 357.5 $ 453.0 Circuitry Solutions 103.0 137.9 209.7 273.2 Semiconductor Solutions 68.8 80.5 128.2 156.2 Total Electronics 355.8 440.8 695.4 882.4 Industrial & Specialty Industrial Solutions 175.8 182.3 356.5 372.4 Graphics Solutions 36.7 37.6 71.6 70.2 Energy Solutions 17.8 16.2 37.0 32.1 Total Industrial & Specialty 230.3 236.1 465.1 474.7 Total net sales $ 586.1 $ 676.9 $ 1,160.5 $ 1,357.1 Adjusted EBITDA: Electronics $ 76.3 $ 101.2 $ 149.0 $ 202.1 Industrial & Specialty 39.8 39.2 79.4 83.1 Total Adjusted EBITDA $ 116.1 $ 140.4 $ 228.4 $ 285.2 The following table reconciles "Net income attributable to common stockholders" to Adjusted EBITDA: Three Months Ended June 30, Six Months Ended June 30, (dollars in millions) 2023 2022 2023 2022 Net income attributable to common stockholders $ 29.9 $ 65.2 $ 72.8 $ 121.3 Add (subtract): Net (loss) income attributable to non-controlling interests (0.2) 0.2 (0.1) 0.5 Income from discontinued operations, net of tax (2.9) (1.8) (2.9) (1.8) Income tax expense 21.2 23.9 38.1 43.9 Interest expense, net 12.0 13.2 23.7 27.3 Depreciation expense 10.1 10.3 19.6 20.9 Amortization expense 31.0 30.3 60.6 61.3 EBITDA 101.1 141.3 211.8 273.4 Adjustments to reconcile to Adjusted EBITDA: Inventory step-up — — — 0.5 Restructuring expense 1.9 1.3 4.2 3.2 Acquisition and integration expense 4.4 1.1 8.3 4.0 Foreign exchange (gain) loss on intercompany loans (8.5) (0.9) (14.1) 0.7 Kuprion Acquisition research and development charge 15.7 — 15.7 — Adjustment of stock compensation previously not probable — — — 1.3 Other, net 1.5 (2.4) 2.5 2.1 Adjusted EBITDA $ 116.1 $ 140.4 $ 228.4 $ 285.2 |
BACKGROUND AND BASIS OF PRESE_3
BACKGROUND AND BASIS OF PRESENTATION (Details) | Jan. 31, 2014 $ / shares |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Common stock par value (in dollars per share) | $ 0.01 |
ACQUISITIONS (Details)
ACQUISITIONS (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 01, 2023 | May 19, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Business Acquisition | ||||||
Research and development | $ 28.9 | $ 12.8 | $ 41.4 | $ 26.9 | ||
ViaForm Distribution | ||||||
Business Acquisition | ||||||
Consideration transferred | $ 200 | |||||
Payments to acquire productive assets | 170 | |||||
Deferred payment upon satisfaction | 30 | |||||
Transaction costs | 0.5 | |||||
Other receivables | $ 13.5 | |||||
ViaForm Distribution | Customer relationships | ||||||
Business Acquisition | ||||||
Finite lived intangible asset useful life (in years) | 15 years | |||||
ViaForm Distribution | Reacquired distribution rights | ||||||
Business Acquisition | ||||||
Intangible assets acquired | $ 187 | |||||
Kuprion | ||||||
Business Acquisition | ||||||
Payments to acquire productive assets | $ 15.9 | |||||
Additional payment upon achievement of milestones | 259 | |||||
Research and development | $ 15.7 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 198.3 | $ 164.4 |
Work in process | 31.1 | 25.9 |
Raw materials and supplies | 103.4 | 100.4 |
Total inventories | $ 332.8 | $ 290.7 |
PROPERTY, PLANT AND EQUIPMENT -
PROPERTY, PLANT AND EQUIPMENT - Major Components of Property, Plant, and Equipment (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Property, plant and equipment | ||
Total property, plant and equipment | $ 584.6 | $ 566 |
Accumulated depreciation | (302.1) | (288.8) |
Property, plant and equipment, net | 282.5 | 277.2 |
Land and leasehold improvements | ||
Property, plant and equipment | ||
Total property, plant and equipment | 51.2 | 52 |
Buildings and improvements | ||
Property, plant and equipment | ||
Total property, plant and equipment | 166.4 | 163.9 |
Machinery, equipment, fixtures and software | ||
Property, plant and equipment | ||
Total property, plant and equipment | 314 | 299.8 |
Construction in process | ||
Property, plant and equipment | ||
Total property, plant and equipment | $ 53 | $ 50.3 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 10.1 | $ 10.3 | $ 19.6 | $ 20.9 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Accumulated impairment losses | $ 46.6 | ||||
Amortization of expense of intangible assets | $ 31 | $ 30.3 | $ 60.6 | $ 61.3 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Changes in Carrying Amount of Goodwill by Segment (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Goodwill | |
Beginning balance | $ 2,412.8 |
Transfer of Films business | 0 |
Foreign currency translation and other | (17.9) |
Ending balance | 2,394.9 |
Electronics | |
Goodwill | |
Beginning balance | 1,304 |
Transfer of Films business | 7.9 |
Foreign currency translation and other | (29.2) |
Ending balance | 1,282.7 |
Industrial & Specialty | |
Goodwill | |
Beginning balance | 1,108.8 |
Transfer of Films business | (7.9) |
Foreign currency translation and other | 11.3 |
Ending balance | $ 1,112.2 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - Intangible Assets Subject to Amortization (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets | ||
Accumulated Amortization | $ (789.6) | $ (734.9) |
Intangible Assets, Gross (Excluding Goodwill) | 1,722.8 | 1,540.4 |
Intangible assets, net | 933.2 | 805.5 |
Trade names | ||
Finite-Lived Intangible Assets | ||
Indefinite lived intangible assets | 68 | 68 |
Customer relationships | ||
Finite-Lived Intangible Assets | ||
Gross Carrying Amount | 966.8 | 967.5 |
Accumulated Amortization | (467.9) | (434.1) |
Net Book Value | 498.9 | 533.4 |
Developed technology | ||
Finite-Lived Intangible Assets | ||
Gross Carrying Amount | 405.6 | 408.9 |
Accumulated Amortization | (293.5) | (277) |
Net Book Value | 112.1 | 131.9 |
Trade names | ||
Finite-Lived Intangible Assets | ||
Gross Carrying Amount | 94.8 | 96 |
Accumulated Amortization | (27) | (23.8) |
Net Book Value | 67.8 | 72.2 |
Reacquired distribution rights | ||
Finite-Lived Intangible Assets | ||
Gross Carrying Amount | 187 | 0 |
Accumulated Amortization | (1) | 0 |
Net Book Value | 186 | 0 |
Other | ||
Finite-Lived Intangible Assets | ||
Gross Carrying Amount | 0.6 | 0 |
Accumulated Amortization | (0.2) | 0 |
Net Book Value | $ 0.4 | $ 0 |
DEBT - Summary of Debt and Capi
DEBT - Summary of Debt and Capital Leases Outstanding (Details) - USD ($) | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 01, 2023 | Dec. 31, 2022 | |
Debt Instrument | |||
Total debt | $ 2,040,900,000 | $ 1,895,300,000 | |
Less: current installments of long-term debt | 11,500,000 | 11,500,000 | |
Total long-term debt | 2,029,400,000 | 1,883,800,000 | |
Term loan A, Notes maturing 2026 | Domestic Line of Credit | |||
Debt Instrument | |||
Debt face amount | 150,000,000 | $ 150,000,000 | |
Total debt | $ 149,100,000 | 0 | |
Term loan A, Notes maturing 2026 | Domestic Line of Credit | SOFR | |||
Debt Instrument | |||
Spread on variable rate (percent) | 1.75% | ||
Term loan B, Notes maturing 2026 | Domestic Line of Credit | |||
Debt Instrument | |||
Total debt | $ 1,100,300,000 | 1,104,500,000 | |
Unamortized premiums, discounts and debt issuance costs | $ 8,900,000 | $ 9,500,000 | |
Effective interest rate (percent) | 2.90% | 1.60% | |
Term loan B, Notes maturing 2026 | Domestic Line of Credit | SOFR | |||
Debt Instrument | |||
Spread on variable rate (percent) | 2% | ||
USD Senior Notes, Due 2028 | Senior Notes | |||
Debt Instrument | |||
Debt face amount | $ 800,000,000 | ||
Stated interest rate (percent) | 3.875% | ||
Total debt | $ 791,500,000 | $ 790,800,000 | |
Unamortized premiums, discounts and debt issuance costs | $ 8,500,000 | $ 9,200,000 | |
Effective interest rate (percent) | 4.10% | 4.10% |
DEBT - Credit Agreement (Detail
DEBT - Credit Agreement (Details) - USD ($) | Jun. 30, 2023 | Jun. 01, 2023 |
Domestic Line of Credit | Term loan A, Notes maturing 2026 | ||
Line of Credit Facility | ||
Debt face amount | $ 150,000,000 | $ 150,000,000 |
DEBT - Guarantees, Covenants an
DEBT - Guarantees, Covenants and Events of Default (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Senior Notes | |
Debt Instrument | |
Covenant, outstanding borrowings leverage threshold (percent) | 30% |
Senior Notes | Term loan A, Notes maturing 2026 | |
Debt Instrument | |
Covenant, first lien net leverage ratio | 5 |
Line of Credit | Revolving Credit Facility | |
Debt Instrument | |
Current borrowing capacity | $ 369 |
DEBT - USD Notes (Details)
DEBT - USD Notes (Details) | Jun. 30, 2023 |
Senior Notes | USD Senior Notes, Due 2028 | |
Debt Instrument | |
Stated interest rate (percent) | 3.875% |
DEBT - Lines of Credit and Othe
DEBT - Lines of Credit and Other Debt Facilities (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Revolving Credit Facility | ||
Debt Instrument | ||
Reduction in borrowings | $ 5.9 | $ 6 |
Line of Credit | ||
Debt Instrument | ||
Outstanding letters of credit | 5.9 | 6 |
Line of Credit | Lines of Credit and Revolving Lines of Credit | ||
Debt Instrument | ||
Remaining borrowing capacity | $ 392 | $ 391 |
FINANCIAL INSTRUMENTS - Derivat
FINANCIAL INSTRUMENTS - Derivatives and Hedging (Details) - USD ($) | Jun. 30, 2023 | Jun. 01, 2023 | Mar. 31, 2023 | Dec. 31, 2022 |
Derivative Instruments, Gain (Loss) | ||||
Gain (loss) to be reclassified during next 12 months | $ 32,200,000 | |||
Commodities Investment | ||||
Derivative Instruments, Gain (Loss) | ||||
Derivative liability, current | 200,000 | $ 2,500,000 | ||
Cross Currency and Interest Rate Swap | ||||
Derivative Instruments, Gain (Loss) | ||||
Derivative notional amount | $ 360,000,000 | |||
Fair value | $ 6,800,000 | |||
Cross-currency swaps | ||||
Derivative Instruments, Gain (Loss) | ||||
Derivative notional amount | 1,260,000,000 | 1,110,000,000 | ||
Derivative asset | 40,200,000 | 70,400,000 | ||
Cross-currency swaps | Debt Expiry in January 2024 | ||||
Derivative Instruments, Gain (Loss) | ||||
Derivative notional amount | 358,000,000 | |||
Cross-currency swaps | Debt Expiry in January 2025 | ||||
Derivative Instruments, Gain (Loss) | ||||
Derivative notional amount | 392,000,000 | |||
Cross-currency swaps | Debt Expiry in January 2026 | ||||
Derivative Instruments, Gain (Loss) | ||||
Derivative notional amount | 508,000,000 | |||
Interest Rate Swaps | ||||
Derivative Instruments, Gain (Loss) | ||||
Derivative asset | 43,300,000 | 47,300,000 | ||
Foreign Exchange Forward | ||||
Derivative Instruments, Gain (Loss) | ||||
Derivative notional amount | $ 49,900,000 | 45,700,000 | ||
Derivative remaining maturity | 1 year | |||
Foreign Exchange Forward | Not Designated as Hedging Instrument | ||||
Derivative Instruments, Gain (Loss) | ||||
Derivative notional amount | $ 104,000,000 | 105,000,000 | ||
Derivative remaining maturity | 1 year | |||
Derivative asset, current | $ 0 | |||
Derivative liability, current | $ 300,000 | |||
Domestic Line of Credit | USD Term Loan | ||||
Derivative Instruments, Gain (Loss) | ||||
Effective interest rate (percent) | 2.90% | 1.60% | ||
Domestic Line of Credit | Term loan A, Notes maturing 2026 | ||||
Derivative Instruments, Gain (Loss) | ||||
Debt face amount | $ 150,000,000 | $ 150,000,000 |
FINANCIAL INSTRUMENTS - Schedul
FINANCIAL INSTRUMENTS - Schedule of Fair Value Measurements (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Recurring | ||
Asset Category | ||
Total | $ 104.6 | $ 131.9 |
Liability Category | ||
Total | 7.4 | 5.5 |
Level 2 | Recurring | Metals contracts | ||
Asset Category | ||
Derivative asset | 1.7 | 2.5 |
Liability Category | ||
Derivative liability | 1.9 | 5 |
Level 3 | Recurring | ||
Asset Category | ||
Available-for-sale debt securities | 13.9 | 11.5 |
Foreign exchange contracts | Level 2 | Recurring | ||
Asset Category | ||
Derivative asset | 0.1 | 0.2 |
Liability Category | ||
Derivative liability | 0.1 | 0.5 |
Interest rate swaps | ||
Asset Category | ||
Derivative asset | 43.3 | 47.3 |
Interest rate swaps | Level 2 | Recurring | Other current assets | ||
Asset Category | ||
Derivative asset | 32.2 | 32.7 |
Interest rate swaps | Level 2 | Recurring | Other assets | ||
Asset Category | ||
Derivative asset | 11.1 | 14.6 |
Cross-currency swaps | ||
Asset Category | ||
Derivative asset | 40.2 | 70.4 |
Cross-currency swaps | Level 2 | Recurring | ||
Liability Category | ||
Derivative liability | 5.4 | 0 |
Cross-currency swaps | Level 2 | Recurring | Other current assets | ||
Asset Category | ||
Derivative asset | 27.4 | 26.1 |
Cross-currency swaps | Level 2 | Recurring | Other assets | ||
Asset Category | ||
Derivative asset | $ 18.2 | $ 44.3 |
FINANCIAL INSTRUMENTS - Fair Va
FINANCIAL INSTRUMENTS - Fair Value Measurements, Additional Information (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Long-term debt, fair value | $ 2,040 | $ 1,900 |
Estimated Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Long-term debt, fair value | $ 1,960 | $ 1,800 |
EARNINGS PER SHARE - Computatio
EARNINGS PER SHARE - Computation of Weighted Average Shares Outstanding (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Earnings Per Share [Abstract] | ||||
Net income from continuing operations | $ 26.8 | $ 63.6 | $ 69.8 | $ 120 |
Net loss (income) attributable to non-controlling interests | 0.2 | (0.2) | 0.1 | (0.5) |
Net income attributable to common stockholders | $ 27 | $ 63.4 | $ 69.9 | $ 119.5 |
Basic weighted average common shares outstanding (in shares) | 241.4 | 247.1 | 241.1 | 247.2 |
Denominator adjustments for diluted EPS: | ||||
Number of stock options and RSUs (in shares) | 0.3 | 0.4 | 0.5 | 1.1 |
Denominator adjustments for diluted EPS (in shares) | 0.3 | 0.4 | 0.5 | 1.1 |
Diluted weighted average common shares outstanding (in shares) | 241.7 | 247.5 | 241.6 | 248.3 |
Earnings per share from continuing operations attributable to common stockholders: | ||||
Basic (in dollars per share) | $ 0.12 | $ 0.26 | $ 0.30 | $ 0.49 |
Diluted (in dollars per share) | $ 0.12 | $ 0.26 | $ 0.30 | $ 0.49 |
EARNINGS PER SHARE - Anti-dilut
EARNINGS PER SHARE - Anti-dilutive Securities (Details) - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Shares issuable upon vesting of RSUs and exercise of stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||||
Weighted-average securities not included in computation of diluted shares outstanding (in shares) | 3.5 | 3.6 | 3.7 | 3.6 |
CONTINGENCIES, ENVIRONMENTAL _2
CONTINGENCIES, ENVIRONMENTAL AND LEGAL MATTERS (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Commitments and Contingencies Disclosure [Abstract] | ||
Reserves for environmental matters | $ 11.8 | $ 11.6 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ 21.2 | $ 23.9 | $ 38.1 | $ 43.9 |
Non deductible research and development expense | $ 15.7 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - Mariposa Capital - Advisory Services Agreement $ in Millions | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Related Party Transaction | |
Related party transaction expense | $ 3 |
Automatic renewal period | 1 year |
Agreement renewal period | 90 days |
SEGMENT INFORMATION - Additiona
SEGMENT INFORMATION - Additional Information (Details) | 6 Months Ended |
Jun. 30, 2023 segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
SEGMENT INFORMATION - Financial
SEGMENT INFORMATION - Financial Information by Reportable Segment (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Segment Reporting Information | ||||
Net sales | $ 586.1 | $ 676.9 | $ 1,160.5 | $ 1,357.1 |
Total Adjusted EBITDA | 116.1 | 140.4 | 228.4 | 285.2 |
Electronics | ||||
Segment Reporting Information | ||||
Net sales | 355.8 | 440.8 | 695.4 | 882.4 |
Total Adjusted EBITDA | 76.3 | 101.2 | 149 | 202.1 |
Electronics | Assembly Solutions | ||||
Segment Reporting Information | ||||
Net sales | 184 | 222.4 | 357.5 | 453 |
Electronics | Circuitry Solutions | ||||
Segment Reporting Information | ||||
Net sales | 103 | 137.9 | 209.7 | 273.2 |
Electronics | Semiconductor Solutions | ||||
Segment Reporting Information | ||||
Net sales | 68.8 | 80.5 | 128.2 | 156.2 |
Industrial & Specialty | ||||
Segment Reporting Information | ||||
Net sales | 230.3 | 236.1 | 465.1 | 474.7 |
Total Adjusted EBITDA | 39.8 | 39.2 | 79.4 | 83.1 |
Industrial & Specialty | Industrial Solutions | ||||
Segment Reporting Information | ||||
Net sales | 175.8 | 182.3 | 356.5 | 372.4 |
Industrial & Specialty | Graphics Solutions | ||||
Segment Reporting Information | ||||
Net sales | 36.7 | 37.6 | 71.6 | 70.2 |
Industrial & Specialty | Energy Solutions | ||||
Segment Reporting Information | ||||
Net sales | $ 17.8 | $ 16.2 | $ 37 | $ 32.1 |
SEGMENT INFORMATION - Reconcili
SEGMENT INFORMATION - Reconciliation of Adjusted EBITDA to Net Income (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Segment Reporting [Abstract] | ||||
Net income attributable to common stockholders | $ 29.9 | $ 65.2 | $ 72.8 | $ 121.3 |
Add (subtract): | ||||
Net (loss) income attributable to non-controlling interests | (0.2) | 0.2 | (0.1) | 0.5 |
Net income from discontinued operations, net of tax | 2.9 | 1.8 | 2.9 | 1.8 |
Income tax expense | 21.2 | 23.9 | 38.1 | 43.9 |
Interest expense, net | 12 | 13.2 | 23.7 | 27.3 |
Depreciation expense | 10.1 | 10.3 | 19.6 | 20.9 |
Amortization expense | 31 | 30.3 | 60.6 | 61.3 |
EBITDA | 101.1 | 141.3 | 211.8 | 273.4 |
Adjustments to reconcile to Adjusted EBITDA: | ||||
Inventory step-up | 0 | 0 | 0 | 0.5 |
Restructuring expense | 1.9 | 1.3 | 4.2 | 3.2 |
Acquisition and integration expense | 4.4 | 1.1 | 8.3 | 4 |
Foreign exchange (gain) loss on intercompany loans | (8.5) | (0.9) | (14.1) | 0.7 |
Kuprion Acquisition research and development charge | 15.7 | 0 | 15.7 | 0 |
Adjustment of stock compensation previously not probable | 0 | 1.3 | ||
Other, net | 1.5 | (2.4) | 2.5 | 2.1 |
Adjusted EBITDA | $ 116.1 | $ 140.4 | $ 228.4 | $ 285.2 |