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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Livent Corporation | NYSE:LTHM | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 16.51 | 0 | 01:00:00 |
x
|
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
o
|
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
Delaware
|
|
82-4699376
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
2929 Walnut Street
Philadelphia, Pennsylvania
|
|
19104
|
(Address of principal executive offices)
|
|
(Zip Code)
|
|
Page
No.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
2018
|
|
2017
|
|
2018
|
|
2017
|
|||||||||
(in Millions)
|
(unaudited)
|
|
(unaudited)
|
||||||||||||
Revenue
|
$
|
112.0
|
|
|
$
|
94.4
|
|
|
$
|
322.7
|
|
|
$
|
234.0
|
|
Costs and Expenses
|
|
|
|
|
|
|
|
||||||||
Cost of sales
|
62.5
|
|
|
52.3
|
|
|
167.2
|
|
|
135.0
|
|
||||
Gross margin
|
$
|
49.5
|
|
|
$
|
42.1
|
|
|
$
|
155.5
|
|
|
$
|
99.0
|
|
Selling, general and administrative expenses
|
4.7
|
|
|
3.2
|
|
|
12.7
|
|
|
10.1
|
|
||||
Corporate allocations
|
5.6
|
|
|
4.8
|
|
|
15.7
|
|
|
15.5
|
|
||||
Research and development expenses
|
0.9
|
|
|
0.9
|
|
|
2.9
|
|
|
2.3
|
|
||||
Restructuring and other charges
|
0.4
|
|
|
0.4
|
|
|
2.7
|
|
|
3.5
|
|
||||
Separation-related costs
|
2.4
|
|
|
—
|
|
|
2.4
|
|
|
—
|
|
||||
Total costs and expenses
|
$
|
76.5
|
|
|
$
|
61.6
|
|
|
$
|
203.6
|
|
|
$
|
166.4
|
|
Income from operations before non-operating pension benefit and settlement charges and income taxes
|
$
|
35.5
|
|
|
$
|
32.8
|
|
|
$
|
119.1
|
|
|
$
|
67.6
|
|
Non-operating pension benefit and settlement charges
|
(0.4
|
)
|
|
(0.4
|
)
|
|
(0.2
|
)
|
|
(1.7
|
)
|
||||
Income from operations before income taxes
|
$
|
35.9
|
|
|
$
|
33.2
|
|
|
$
|
119.3
|
|
|
$
|
69.3
|
|
Provision for income taxes
|
5.9
|
|
|
7.7
|
|
|
19.1
|
|
|
16.2
|
|
||||
Net income
|
$
|
30.0
|
|
|
$
|
25.5
|
|
|
$
|
100.2
|
|
|
$
|
53.1
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share - basic and diluted
|
$
|
0.24
|
|
|
$
|
0.21
|
|
|
$
|
0.81
|
|
|
$
|
0.43
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average shares outstanding - basic and diluted
(1)
|
123.0
|
|
|
123.0
|
|
|
123.0
|
|
|
123.0
|
|
(1)
|
The weighted average shares outstanding for both basic and diluted earnings per share for all periods presented was calculated using
123.0 million
shares of common stock outstanding, which was the number of shares issued to FMC in part in exchange for the asset contribution by FMC to us. Weighted average shares outstanding excludes the
20.0 million
shares of common stock subsequently issued as part of the public offering. Refer to the discussion in Note 2 for further details.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
2018
|
|
2017
|
|
2018
|
|
2017
|
|||||||||
(in Millions)
|
(unaudited)
|
|
(unaudited)
|
||||||||||||
Net income
|
$
|
30.0
|
|
|
$
|
25.5
|
|
|
$
|
100.2
|
|
|
$
|
53.1
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
||||||||
Foreign currency adjustments:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation gain (loss) arising during the period
|
$
|
(1.8
|
)
|
|
$
|
2.0
|
|
|
$
|
(3.0
|
)
|
|
$
|
4.7
|
|
Total foreign currency translation adjustments
(1)
|
$
|
(1.8
|
)
|
|
$
|
2.0
|
|
|
$
|
(3.0
|
)
|
|
$
|
4.7
|
|
|
|
|
|
|
|
|
|
||||||||
Pension and other postretirement benefits:
|
|
|
|
|
|
|
|
||||||||
Unrealized actuarial gains and prior service credits, net of tax of zero and $0.2 for the three and nine months ended September 30, 2017, respectively
(2)
|
$
|
—
|
|
|
$
|
(1.0
|
)
|
|
$
|
—
|
|
|
$
|
(2.5
|
)
|
Reclassification of amortization of unrecognized net actuarial and other losses, included in net income, net of tax of zero and ($0.1) for the three and nine months ended September 30, 2017, respectively
(3)
|
—
|
|
|
0.2
|
|
|
—
|
|
|
0.6
|
|
||||
Total pension and other postretirement benefits, net of tax of zero and $0.1 for the three and nine months ended September 30, 2017, respectively
|
$
|
—
|
|
|
$
|
(0.8
|
)
|
|
$
|
—
|
|
|
$
|
(1.9
|
)
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income (loss), net of tax
|
$
|
(1.8
|
)
|
|
$
|
1.2
|
|
|
$
|
(3.0
|
)
|
|
$
|
2.8
|
|
Comprehensive income
|
$
|
28.2
|
|
|
$
|
26.7
|
|
|
$
|
97.2
|
|
|
$
|
55.9
|
|
(1)
|
Income taxes are not provided on the equity in undistributed earnings of our foreign subsidiaries or affiliates since it is our intention that such earnings will remain invested in those affiliates indefinitely.
|
(2)
|
At December 31 of each year, we remeasure our pension and postretirement plan obligations at which time we record any actuarial gains (losses) and prior service (costs) credits to other comprehensive income.
|
(3)
|
For more detail on the components of these reclassifications and the affected line item in the combined statements of operations see Note 14 within these condensed combined financial statements.
|
(in Millions)
|
September 30, 2018
|
|
December 31, 2017
|
||||
ASSETS
|
(unaudited)
|
||||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
14.7
|
|
|
$
|
1.2
|
|
Trade receivables, net of allowance of $0.1 in 2018 and $0.1 in 2017
|
144.1
|
|
|
122.7
|
|
||
Inventories, net
|
47.3
|
|
|
49.6
|
|
||
Prepaid and other current assets
|
35.4
|
|
|
32.6
|
|
||
Total current assets
|
$
|
241.5
|
|
|
$
|
206.1
|
|
Property, plant and equipment, net
|
251.7
|
|
|
220.7
|
|
||
Intangibles assets, net
|
0.1
|
|
|
0.1
|
|
||
Deferred income taxes
|
1.2
|
|
|
2.4
|
|
||
Other assets
|
71.6
|
|
|
66.9
|
|
||
Total assets
|
$
|
566.1
|
|
|
$
|
496.2
|
|
LIABILITIES AND NET PARENT INVESTMENT
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable, trade and other
|
$
|
49.6
|
|
|
$
|
59.7
|
|
Advance payments from customers
|
—
|
|
|
1.8
|
|
||
Accrued and other current liabilities
|
17.7
|
|
|
21.3
|
|
||
Income taxes
|
1.0
|
|
|
3.2
|
|
||
Total current liabilities
|
$
|
68.3
|
|
|
$
|
86.0
|
|
Long-term debt (Note 11)
|
—
|
|
|
—
|
|
||
Environmental liabilities
|
6.1
|
|
|
5.9
|
|
||
Deferred income taxes
|
1.9
|
|
|
8.2
|
|
||
Other long-term liabilities
|
10.3
|
|
|
10.7
|
|
||
Commitments and contingent liabilities (Note 15)
|
|
|
|
|
|||
Net Parent Investment
|
|
|
|
||||
Net parent investment
|
$
|
528.1
|
|
|
$
|
431.0
|
|
Accumulated other comprehensive loss
|
(48.6
|
)
|
|
(45.6
|
)
|
||
Total net parent investment
|
$
|
479.5
|
|
|
$
|
385.4
|
|
Total liabilities and net parent investment
|
$
|
566.1
|
|
|
$
|
496.2
|
|
|
Nine Months Ended September 30,
|
||||||
2018
|
|
2017
|
|||||
(in Millions)
|
(unaudited)
|
||||||
Cash provided by operating activities:
|
|
|
|
||||
Net income
|
$
|
100.2
|
|
|
$
|
53.1
|
|
Adjustments to reconcile net income to cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
$
|
13.1
|
|
|
$
|
11.7
|
|
Restructuring and other charges
|
2.7
|
|
|
3.5
|
|
||
Deferred income taxes
|
(5.1
|
)
|
|
4.2
|
|
||
Pension and other postretirement benefits
|
0.5
|
|
|
(0.9
|
)
|
||
Share-based compensation
|
3.4
|
|
|
2.7
|
|
||
Change in excess of FIFO cost over LIFO cost
|
1.5
|
|
|
(0.8
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Trade receivables, net
|
(23.0
|
)
|
|
(49.2
|
)
|
||
Inventories
|
0.2
|
|
|
2.3
|
|
||
Accounts payable, trade and other
|
(9.6
|
)
|
|
21.5
|
|
||
Advance payments from customers
|
(1.8
|
)
|
|
(2.2
|
)
|
||
Income taxes
|
(3.0
|
)
|
|
0.5
|
|
||
Environmental spending
|
(0.1
|
)
|
|
(0.2
|
)
|
||
Restructuring and other spending
|
(0.8
|
)
|
|
(0.1
|
)
|
||
Change in prepaid and other current assets and other assets
|
(6.0
|
)
|
|
(11.7
|
)
|
||
Change in accrued and other current liabilities and other long-term liabilities
|
(9.7
|
)
|
|
(0.5
|
)
|
||
Cash provided by operating activities
|
$
|
62.5
|
|
|
$
|
33.9
|
|
Cash required by investing activities:
|
|
|
|
||||
Capital expenditures
|
$
|
(43.4
|
)
|
|
$
|
(25.7
|
)
|
Proceeds from disposal of property, plant and equipment
|
—
|
|
|
0.3
|
|
||
Payments associated with long-term supply agreements
|
—
|
|
|
(10.0
|
)
|
||
Other investing activities
|
(3.6
|
)
|
|
(3.4
|
)
|
||
Cash required by investing activities
|
$
|
(47.0
|
)
|
|
$
|
(38.8
|
)
|
Cash provided (required) by financing activities:
|
|
|
|
||||
Net change in net parent investment
|
$
|
(3.1
|
)
|
|
$
|
1.1
|
|
Cash provided (required) by financing activities
|
$
|
(3.1
|
)
|
|
$
|
1.1
|
|
Effect of exchange rate changes on cash and cash equivalents
|
1.1
|
|
|
—
|
|
||
Increase (decrease) in cash and cash equivalents
|
$
|
13.5
|
|
|
$
|
(3.8
|
)
|
Cash and cash equivalents, beginning of period
|
1.2
|
|
|
4.0
|
|
||
Cash and cash equivalents, end of period
|
$
|
14.7
|
|
|
$
|
0.2
|
|
(in Millions)
|
Net parent investment
|
|
Accumulated other comprehensive loss
|
|
Total
|
||||||
Balance, January 1, 2017
|
$
|
387.3
|
|
|
$
|
(76.6
|
)
|
|
$
|
310.7
|
|
Net income
|
53.1
|
|
|
—
|
|
|
53.1
|
|
|||
Net pension and other benefit actuarial losses and prior service costs, net of income tax
|
—
|
|
|
(1.9
|
)
|
|
(1.9
|
)
|
|||
Foreign currency translation adjustments
|
—
|
|
|
4.7
|
|
|
4.7
|
|
|||
Net change in net parent investment
|
1.1
|
|
|
—
|
|
|
1.1
|
|
|||
Balance, September 30, 2017
|
$
|
441.5
|
|
|
$
|
(73.8
|
)
|
|
$
|
367.7
|
|
|
|
|
|
|
|
||||||
Balance, January 1, 2018
|
$
|
431.0
|
|
|
$
|
(45.6
|
)
|
|
$
|
385.4
|
|
Net income
|
100.2
|
|
|
—
|
|
|
100.2
|
|
|||
Foreign currency translation adjustments
|
—
|
|
|
(3.0
|
)
|
|
(3.0
|
)
|
|||
Net change in net parent investment
|
(3.1
|
)
|
|
—
|
|
|
(3.1
|
)
|
|||
Balance, September 30, 2018
|
$
|
528.1
|
|
|
$
|
(48.6
|
)
|
|
$
|
479.5
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(in Millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Livent shared service costs
(1)
|
$
|
1.6
|
|
|
$
|
1.2
|
|
|
$
|
4.6
|
|
|
$
|
3.9
|
|
FMC Corporate shared service costs allocated to Livent
(2)
|
0.9
|
|
|
0.2
|
|
|
1.9
|
|
|
1.8
|
|
||||
Stock compensation expense
(3)
|
0.9
|
|
|
0.6
|
|
|
2.7
|
|
|
2.0
|
|
||||
FMC Corporate expense allocation
(4)
|
2.2
|
|
|
2.8
|
|
|
6.5
|
|
|
7.8
|
|
||||
Total Corporate allocations
|
$
|
5.6
|
|
|
$
|
4.8
|
|
|
$
|
15.7
|
|
|
$
|
15.5
|
|
(1)
|
Represents Livent’s portion of shared service costs historically allocated to Livent. These do not include
$2.1 million
and
$6.4 million
for the
three and nine
months ended
September 30, 2018
and
$2.0 million
and
$5.5 million
for the
three and nine
months ended
September 30, 2017
, respectively, of shared service costs historically allocated to and recorded within “Cost of sales” on the condensed combined statements of operations.
|
(2)
|
Amounts represent the Parent’s Corporate shared service cost allocated to Livent.
|
(3)
|
Stock compensation expense represents the allocation of the Parent’s Corporate stock compensation expense and the costs specifically identifiable to Livent employees. These amounts exclude the previously allocated portion included within Livent's shared service costs of
$0.2 million
and
$0.6 million
for both the
three and nine
months ended
September 30, 2018
and
2017
, respectively.
|
(4)
|
Represents the additional costs of the centralized functions of the Parent allocated to Livent.
|
(in Millions)
|
Three Months Ended September 30, 2018
|
|
Nine Months Ended September 30, 2018
|
||||
North America
|
$
|
39.2
|
|
|
$
|
81.5
|
|
Latin America
|
0.4
|
|
|
1.4
|
|
||
Europe, Middle East & Africa
|
17.7
|
|
|
55.2
|
|
||
Asia Pacific
|
54.7
|
|
|
184.6
|
|
||
Total Revenue
|
$
|
112.0
|
|
|
$
|
322.7
|
|
(in Millions)
|
Three Months Ended September 30, 2018
|
|
Nine Months Ended September 30, 2018
|
||||
Lithium Hydroxide
|
$
|
52.8
|
|
|
$
|
155.5
|
|
Butyllithium
|
26.3
|
|
|
75.5
|
|
||
High Purity Lithium Metal and Other Specialty Compounds
|
14.5
|
|
|
47.8
|
|
||
Lithium Carbonate and Lithium Chloride
|
18.4
|
|
|
43.9
|
|
||
Total Revenue
|
$
|
112.0
|
|
|
$
|
322.7
|
|
(in Millions)
|
Balance as of December 31, 2017
|
|
Balance as of September 30, 2018
|
|
Increase (Decrease)
|
||||||
Receivables from contracts with customers, net of allowances
|
$
|
122.7
|
|
|
$
|
144.1
|
|
|
$
|
21.4
|
|
Contract liabilities: Advance payments from customers
|
1.8
|
|
|
—
|
|
|
(1.8
|
)
|
a.
|
Costs of obtaining a contract:
We incur certain costs such as sales commissions which are incremental to obtaining the contract. We have taken the practical expedient of expensing such costs to obtain a contract, as and when they are incurred, as their expected amortization period is
one
year or less.
|
b.
|
Significant financing component:
We elected not to adjust the promised amount of consideration for the effects of a significant financing component if we expect, at contract inception, that the period between the transfer of a promised good or service to a customer and when the customer pays for that good or service will be
one
year or less.
|
c.
|
Remaining performance obligations:
We elected not to disclose the aggregate amount of the transaction price allocated to remaining performance obligations for our contracts that are
one
year or less, as the revenue is expected to be recognized within one year. Additionally, we have elected not to disclose information about variable considerations for remaining, wholly unsatisfied performance obligations for which the criteria in paragraph 606-10-32-40 have been met.
|
d.
|
Shipping and handling costs
:
We elected to account for shipping and handling activities that occur after the customer has obtained control of a good as fulfillment activities (i.e., an expense) rather than as a promised service.
|
e.
|
Measurement of transaction price:
We have elected to exclude from the measurement of transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by us from a customer.
|
|
September 30, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
(in Millions)
|
Gross
|
|
Accumulated Amortization
|
|
Net
|
|
Gross
|
|
Accumulated Amortization
|
|
Net
|
||||||||||||
Intangible assets subject to amortization
|
|||||||||||||||||||||||
Patent
|
$
|
0.3
|
|
|
$
|
(0.2
|
)
|
|
$
|
0.1
|
|
|
$
|
0.3
|
|
|
$
|
(0.2
|
)
|
|
$
|
0.1
|
|
|
$
|
0.3
|
|
|
$
|
(0.2
|
)
|
|
$
|
0.1
|
|
|
$
|
0.3
|
|
|
$
|
(0.2
|
)
|
|
$
|
0.1
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(in Millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Restructuring charges
|
$
|
0.3
|
|
|
$
|
0.3
|
|
|
$
|
2.4
|
|
|
$
|
3.2
|
|
Other charges
|
0.1
|
|
|
0.1
|
|
|
0.3
|
|
|
0.3
|
|
||||
Total restructuring and other charges
|
$
|
0.4
|
|
|
$
|
0.4
|
|
|
$
|
2.7
|
|
|
$
|
3.5
|
|
|
Restructuring Charges
|
||||||||||||||
(in Millions)
|
Severance and Employee Benefits
(1)
|
|
Other Charges (Income)
(2)
|
|
Asset Disposal Charges
(3)
|
|
Total
|
||||||||
Bessemer City restructuring
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.3
|
|
|
$
|
0.3
|
|
Three Months Ended September 30, 2018
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.3
|
|
|
$
|
0.3
|
|
|
|
|
|
|
|
|
|
||||||||
Other items
|
$
|
—
|
|
|
$
|
0.3
|
|
|
$
|
—
|
|
|
0.3
|
|
|
Three Months Ended September 30, 2017
|
$
|
—
|
|
|
$
|
0.3
|
|
|
$
|
—
|
|
|
$
|
0.3
|
|
|
|
|
|
|
|
|
|
||||||||
Bessemer City restructuring
|
$
|
—
|
|
|
$
|
1.9
|
|
|
$
|
0.5
|
|
|
$
|
2.4
|
|
Nine Months Ended September 30, 2018
|
$
|
—
|
|
|
$
|
1.9
|
|
|
$
|
0.5
|
|
|
$
|
2.4
|
|
|
|
|
|
|
|
|
|
||||||||
Bessemer City Restructuring
|
$
|
—
|
|
|
$
|
0.5
|
|
|
$
|
2.2
|
|
|
$
|
2.7
|
|
Other items
|
—
|
|
|
0.5
|
|
|
—
|
|
|
0.5
|
|
||||
Nine Months Ended September 30, 2017
|
$
|
—
|
|
|
$
|
1.0
|
|
|
$
|
2.2
|
|
|
$
|
3.2
|
|
(1)
|
Represents severance and employee benefit charges.
|
(2)
|
Primarily represents costs associated with demolition and other miscellaneous exit costs.
|
(3)
|
Primarily represents fixed asset write-offs which were or are to be abandoned.
|
(in Millions)
|
Balance at
12/31/16
|
Change in
reserves
(1)
|
Cash
payments
|
Other
|
Balance at
12/31/17
(2)
|
Change in
reserves
(1)
|
Cash
payments
|
Other
|
Balance at
9/30/18
(2)
|
||||||||||||||||||
Restructuring reserve
|
$
|
0.3
|
|
$
|
3.8
|
|
$
|
(0.9
|
)
|
$
|
(0.3
|
)
|
$
|
2.9
|
|
$
|
1.9
|
|
$
|
(0.8
|
)
|
$
|
—
|
|
$
|
4.0
|
|
Total
|
$
|
0.3
|
|
$
|
3.8
|
|
$
|
(0.9
|
)
|
$
|
(0.3
|
)
|
$
|
2.9
|
|
$
|
1.9
|
|
$
|
(0.8
|
)
|
$
|
—
|
|
$
|
4.0
|
|
(1)
|
Primarily related to facility shutdowns and other miscellaneous exit costs.
|
(2)
|
Included in “Accrued and other current liabilities” on the condensed combined balance sheets.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(in Millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Environmental charges
|
$
|
0.1
|
|
|
$
|
0.1
|
|
|
$
|
0.3
|
|
|
$
|
0.3
|
|
Other charges
|
$
|
0.1
|
|
|
$
|
0.1
|
|
|
$
|
0.3
|
|
|
$
|
0.3
|
|
(in Millions)
|
September 30, 2018
|
|
December 31, 2017
|
||||
Finished goods
|
$
|
5.1
|
|
|
$
|
4.0
|
|
Work in process
|
41.2
|
|
|
34.3
|
|
||
Raw materials, supplies and other
|
3.4
|
|
|
12.2
|
|
||
First-in, first-out inventory
|
$
|
49.7
|
|
|
$
|
50.5
|
|
Less: Excess of first-in, first-out cost over last-in, first-out cost
|
(2.4
|
)
|
|
(0.9
|
)
|
||
Inventories, net
|
$
|
47.3
|
|
|
$
|
49.6
|
|
(in Millions)
|
Total
|
||
Total environmental reserves at December 31, 2016
|
$
|
6.3
|
|
Provision
|
0.4
|
|
|
Spending
|
(0.3
|
)
|
|
Net change
|
$
|
0.1
|
|
Total environmental reserves at December 31, 2017
|
$
|
6.4
|
|
Provision
|
0.3
|
|
|
Spending
|
(0.1
|
)
|
|
Net change
|
$
|
0.2
|
|
Total environmental reserves at September 30, 2018
|
$
|
6.6
|
|
|
|
||
Environmental reserves, current
(1)
|
$
|
0.5
|
|
Environmental reserves, long-term
(2)
|
6.1
|
|
|
Total environmental reserves at September 30, 2018
|
$
|
6.6
|
|
(1)
|
These amounts are included within "Accrued and other current liabilities" on the condensed combined balance sheets.
|
(2)
|
These amounts are included in "Environmental liabilities" on the condensed combined balance sheets.
|
(in Millions)
|
September 30, 2018
|
|
December 31, 2017
|
||||
Property, plant and equipment
|
$
|
442.7
|
|
|
$
|
407.2
|
|
Accumulated depreciation
|
(191.0
|
)
|
|
(186.5
|
)
|
||
Property, plant and equipment, net
|
$
|
251.7
|
|
|
$
|
220.7
|
|
(in Millions)
|
September 30, 2018
|
|
|
|
|
||||||
Interest Rate Percentage
|
|
Maturity
Date
|
|
September 30, 2018
|
|
December 31, 2017
|
|||||
Revolving Credit Facility
(1)
|
4.9%
|
|
2023
|
|
$
|
—
|
|
|
$
|
—
|
|
Total long-term debt
|
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(1)
|
As of
September 30, 2018
, there were
no
letters of credit outstanding under our Revolving Credit Facility.
|
|
Three Months Ended September 30,
|
||||||||||||||||
|
2018
|
|
2017
|
||||||||||||||
(in Millions)
|
Before Tax
|
Tax
|
Effective Tax Rate %
|
|
Before Tax
|
Tax
|
Effective Tax Rate %
|
||||||||||
Income from operations before income taxes
|
$
|
35.9
|
|
$
|
5.9
|
|
16.4
|
%
|
|
$
|
33.2
|
|
$
|
7.7
|
|
23.2
|
%
|
Discrete items:
|
|
|
|
|
|
|
|
||||||||||
Separation related charges
(1)
|
$
|
2.4
|
|
$
|
0.5
|
|
|
|
$
|
—
|
|
$
|
—
|
|
|
||
Currency remeasurement
(2)
|
1.5
|
|
(0.1
|
)
|
|
|
0.6
|
|
0.3
|
|
|
||||||
Other discrete items
(3)
|
0.3
|
|
0.1
|
|
|
|
0.1
|
|
0.1
|
|
|
||||||
Tax only discrete items
(4)
|
—
|
|
1.5
|
|
|
|
—
|
|
0.3
|
|
|
||||||
Total discrete items
|
$
|
4.2
|
|
$
|
2.0
|
|
|
|
$
|
0.7
|
|
$
|
0.7
|
|
|
||
Income from operations before income taxes, before discrete items
|
$
|
40.1
|
|
$
|
7.9
|
|
|
|
$
|
33.9
|
|
$
|
8.4
|
|
|
||
Estimated Annualized Effective Tax Rate (EAETR)
(5)
|
|
|
19.7
|
%
|
|
|
|
24.8
|
%
|
|
Nine Months Ended September 30,
|
||||||||||||||||
|
2018
|
|
2017
|
||||||||||||||
(in Millions)
|
Before Tax
|
Tax
|
Effective Tax Rate %
|
|
Before Tax
|
Tax
|
Effective Tax Rate %
|
||||||||||
Income from operations before income taxes
|
$
|
119.3
|
|
$
|
19.1
|
|
16.0
|
%
|
|
$
|
69.3
|
|
$
|
16.2
|
|
23.4
|
%
|
Discrete items:
|
|
|
|
|
|
|
|
||||||||||
Separation related charges
(1)
|
$
|
2.4
|
|
$
|
0.5
|
|
|
|
$
|
—
|
|
$
|
—
|
|
|
||
Currency remeasurement
(2)
|
4.2
|
|
0.3
|
|
|
|
0.4
|
|
0.1
|
|
|
||||||
Other discrete items
(3)
|
2.3
|
|
0.5
|
|
|
|
3.2
|
|
1.2
|
|
|
||||||
Tax only discrete items
(4)
|
—
|
|
6.5
|
|
|
|
—
|
|
0.7
|
|
|
||||||
Total discrete items
|
$
|
8.9
|
|
$
|
7.8
|
|
|
|
$
|
3.6
|
|
$
|
2.0
|
|
|
||
Income from operations before income taxes, before discrete items
|
$
|
128.2
|
|
$
|
26.9
|
|
|
|
$
|
72.9
|
|
$
|
18.2
|
|
|
||
Estimated Annualized Effective Tax Rate (EAETR)
(5)
|
|
|
21.0
|
%
|
|
|
|
25.0
|
%
|
(1)
|
See Note 2 for more information on separation related charges.
|
(2)
|
Represents transaction gains or losses for currency remeasurement offset by associated hedge gains or losses, which are accounted for discretely in accordance with U.S. GAAP. Certain transaction gains or losses for currency remeasurement are not taxable, while offsetting hedge gains or losses are taxable.
|
(3)
|
During the three and nine months ended September 30, 2018, other discrete items were materially comprised of other miscellaneous restructuring charges, comprised primarily of asset disposal charges within Livent as a result of restructuring our operations at the manufacturing site located in Bessemer City, North Carolina.
|
(4)
|
For the nine months ended September 30, 2018 and 2017, tax only discrete items are comprised of the tax effect of currency remeasurement associated with foreign statutory operations, changes in realizability of certain deferred tax assets, changes in uncertain tax liabilities and related interest, excess tax benefits associated with share-based compensation, and changes in prior year estimates of subsidiary tax liabilities.
|
(5)
|
The primary drivers for the decrease in the third quarter effective tax rate for 2018 as compared to 2017 are shown in the table above. The remaining change was due to the change in mix of earnings in lower taxing jurisdictions, a reduced tax rate for earnings in the U.S., offset with the effect of the global intangible low-taxed income (GILTI) provisions of the Act.
|
(in Millions)
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
2018
|
|
2017
|
|
2018
|
|
2017
|
|||||||||
Interest cost
|
$
|
—
|
|
|
$
|
0.2
|
|
|
$
|
—
|
|
|
$
|
0.5
|
|
Expected return on plan assets
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
(0.4
|
)
|
||||
Amortization of net actuarial and other (gain) loss
|
—
|
|
|
0.2
|
|
|
—
|
|
|
0.7
|
|
||||
Net periodic benefit cost (income)
|
$
|
—
|
|
|
$
|
0.3
|
|
|
$
|
—
|
|
|
$
|
0.8
|
|
(in Millions)
|
Foreign currency adjustments
|
|
Pension and other postretirement benefits
(1)
|
|
Total
|
||||||
Accumulated other comprehensive loss, net of tax at December 31, 2017
|
$
|
(45.6
|
)
|
|
$
|
—
|
|
|
$
|
(45.6
|
)
|
2018 Activity
|
|
|
|
|
|
||||||
Other comprehensive income (loss) before reclassifications
|
(3.0
|
)
|
|
—
|
|
|
(3.0
|
)
|
|||
Accumulated other comprehensive loss, net of tax at September 30, 2018
|
$
|
(48.6
|
)
|
|
$
|
—
|
|
|
$
|
(48.6
|
)
|
(in Millions)
|
Foreign currency adjustments
|
|
Pension and other postretirement benefits
(1)
|
|
Total
|
||||||
Accumulated other comprehensive loss, net of tax at December 31, 2016
|
$
|
(50.3
|
)
|
|
$
|
(26.3
|
)
|
|
$
|
(76.6
|
)
|
2017 Activity
|
|
|
|
|
|
||||||
Other comprehensive income (loss) before reclassifications
|
4.7
|
|
|
(2.5
|
)
|
|
2.2
|
|
|||
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
0.6
|
|
|
0.6
|
|
|||
Accumulated other comprehensive loss, net of tax at September 30, 2017
|
$
|
(45.6
|
)
|
|
$
|
(28.2
|
)
|
|
$
|
(73.8
|
)
|
Details about Accumulated Other Comprehensive Loss Components
|
|
Amounts Reclassified from Accumulated Other Comprehensive Loss
|
|
Affected Line Item in the Condensed Combined Statements of Operations
|
||||||||||||||
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|
|
||||||||||||
(in Millions)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
||||||||
Pension and other postretirement benefits
|
|
|
|
|
|
|
|
|
|
|
||||||||
Amortization of unrecognized net actuarial and other losses
|
|
$
|
—
|
|
|
$
|
(0.2
|
)
|
|
$
|
—
|
|
|
$
|
(0.7
|
)
|
|
Non-operating pension benefit and settlement charges
|
Total before tax
|
|
$
|
—
|
|
|
$
|
(0.2
|
)
|
|
$
|
—
|
|
|
$
|
(0.7
|
)
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
Provision for income taxes
|
||||
Total reclassifications for the period
|
|
$
|
—
|
|
|
$
|
(0.2
|
)
|
|
$
|
—
|
|
|
$
|
(0.6
|
)
|
|
Amount included in net income
|
(in Millions)
|
September 30, 2018
|
|
December 31, 2017
|
||||
Prepaid and other current assets
|
|
|
|
||||
Argentina government receivable
(1)
|
$
|
8.7
|
|
|
$
|
13.5
|
|
Tax related items including value added tax receivables
|
4.9
|
|
|
3.6
|
|
||
Other receivables
|
15.1
|
|
|
6.5
|
|
||
Prepaid expenses
|
4.8
|
|
|
8.3
|
|
||
Other current assets
|
1.9
|
|
|
0.7
|
|
||
Total
|
$
|
35.4
|
|
|
$
|
32.6
|
|
(in Millions)
|
September 30, 2018
|
|
December 31, 2017
|
||||
Other assets
|
|
|
|
||||
Argentina government receivable
(1)
|
$
|
37.5
|
|
|
$
|
34.0
|
|
Advance to contract manufacturers
|
12.9
|
|
|
10.0
|
|
||
Capitalized software, net
|
1.8
|
|
|
2.2
|
|
||
Prepayment associated with long-term supply agreements
|
10.0
|
|
|
10.0
|
|
||
Tax related items
|
4.7
|
|
|
5.1
|
|
||
Other assets
|
4.7
|
|
|
5.6
|
|
||
Total
|
$
|
71.6
|
|
|
$
|
66.9
|
|
(1)
|
We have various subsidiaries that conduct business within Argentina. At
September 30, 2018
and
December 31, 2017
,
$37.8 million
and
$38.1 million
, respectively, of outstanding receivables due from the Argentina government, which primarily represent export tax and export rebate receivables, were denominated in U.S. dollars. As with all outstanding receivable balances we continually review recoverability by analyzing historical experience, current collection trends and regional business and political factors among other factors.
|
(in Millions)
|
September 30, 2018
|
|
December 31, 2017
|
||||
Accrued and other current liabilities
|
|
|
|
||||
Restructuring reserves
|
$
|
4.0
|
|
|
$
|
2.9
|
|
Accrued payroll
|
8.3
|
|
|
7.9
|
|
||
Environmental reserves, current
|
0.5
|
|
|
0.5
|
|
||
Other accrued and other current liabilities
|
4.9
|
|
|
10.0
|
|
||
Total
|
$
|
17.7
|
|
|
$
|
21.3
|
|
(in Millions)
|
September 30, 2018
|
|
December 31, 2017
|
||||
Other long-term liabilities
|
|
|
|
||||
Asset retirement obligations
|
$
|
0.2
|
|
|
$
|
0.2
|
|
Contingencies related to uncertain tax positions
|
7.7
|
|
|
7.9
|
|
||
Self-insurance reserves
|
1.8
|
|
|
1.7
|
|
||
Other long-term liabilities
|
0.6
|
|
|
0.9
|
|
||
Total
|
$
|
10.3
|
|
|
$
|
10.7
|
|
•
|
Revenue recognition and trade receivables
|
•
|
Impairment and valuation of long-lived assets
|
•
|
Income taxes
|
•
|
Revenue of
$112.0 million
for the
three
months ended
September 30, 2018
increased
$17.6 million
, or approximately
19 percent
compared to the
three
months ended
September 30, 2017
.
|
•
|
Gross margin of
$49.5 million
for the
three
months ended
September 30, 2018
increased
$7.4 million
or approximately
17%
versus the prior year quarter primarily due to higher revenues. The increase in gross margin was primarily driven by prices, product mix and improved operating leverage. Gross margin as a percentage of revenue was approximately
44%
versus
45%
in the three months ended
September 30, 2018
and
2017
, respectively.
|
•
|
Non-operating pension benefit and settlement charges remained flat compared to the prior year quarter.
|
•
|
Selling, general and administrative expenses
increased
by
$1.5 million
, or approximately
47%
, to
$4.7 million
compared to the prior year quarter primarily due to the incremental standalone company costs.
|
•
|
Research and development expenses of
$0.9 million
remained flat compared to the prior year quarter.
|
•
|
Corporate allocations of
$5.6 million
increased by
$0.8 million
compared to the prior year quarter due to higher shared service costs allocated to Livent from FMC.
|
•
|
Adjusted EBITDA of
$42.8 million
increased
compared to the prior year quarter amount of
$37.1 million
primarily due to higher revenues.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
2018
|
|
2017
|
|
2018
|
|
2017
|
|||||||||
(in Millions)
|
(unaudited)
|
|
(unaudited)
|
||||||||||||
Revenue
|
$
|
112.0
|
|
|
$
|
94.4
|
|
|
$
|
322.7
|
|
|
$
|
234.0
|
|
Costs and Expenses
|
|
|
|
|
|
|
|
||||||||
Cost of sales
|
62.5
|
|
|
52.3
|
|
|
167.2
|
|
|
135.0
|
|
||||
Gross margin
|
$
|
49.5
|
|
|
$
|
42.1
|
|
|
$
|
155.5
|
|
|
$
|
99.0
|
|
Selling, general and administrative expenses
|
4.7
|
|
|
3.2
|
|
|
12.7
|
|
|
10.1
|
|
||||
Corporate allocations
|
5.6
|
|
|
4.8
|
|
|
15.7
|
|
|
15.5
|
|
||||
Research and development expenses
|
0.9
|
|
|
0.9
|
|
|
2.9
|
|
|
2.3
|
|
||||
Restructuring and other charges
|
0.4
|
|
|
0.4
|
|
|
2.7
|
|
|
3.5
|
|
||||
Separation-related costs
|
2.4
|
|
|
—
|
|
|
2.4
|
|
|
—
|
|
||||
Total costs and expenses
|
$
|
76.5
|
|
|
$
|
61.6
|
|
|
$
|
203.6
|
|
|
$
|
166.4
|
|
Income from operations before non-operating pension benefit and settlement charges and income taxes
|
$
|
35.5
|
|
|
$
|
32.8
|
|
|
$
|
119.1
|
|
|
$
|
67.6
|
|
Non-operating pension benefit and settlement charges
|
(0.4
|
)
|
|
(0.4
|
)
|
|
(0.2
|
)
|
|
(1.7
|
)
|
||||
Income from operations before income taxes
|
$
|
35.9
|
|
|
$
|
33.2
|
|
|
$
|
119.3
|
|
|
$
|
69.3
|
|
Provision for income taxes
|
5.9
|
|
|
7.7
|
|
|
19.1
|
|
|
16.2
|
|
||||
Net income
|
$
|
30.0
|
|
|
$
|
25.5
|
|
|
$
|
100.2
|
|
|
$
|
53.1
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net income (GAAP)
|
$
|
30.0
|
|
|
$
|
25.5
|
|
|
$
|
100.2
|
|
|
$
|
53.1
|
|
Add back:
|
|
|
|
|
|
|
|
||||||||
Provision for income taxes
|
5.9
|
|
|
7.7
|
|
|
19.1
|
|
|
16.2
|
|
||||
Depreciation and amortization
|
4.5
|
|
|
3.9
|
|
|
13.1
|
|
|
11.7
|
|
||||
EBITDA (Non-GAAP)
(1)
|
$
|
40.4
|
|
|
$
|
37.1
|
|
|
$
|
132.4
|
|
|
$
|
81.0
|
|
Add back:
|
|
|
|
|
|
|
|
||||||||
Restructuring and other charges
(a)
|
0.4
|
|
|
0.4
|
|
|
2.7
|
|
|
3.5
|
|
||||
Non-operating pension benefit and settlement charges
(b)
|
(0.4
|
)
|
|
(0.4
|
)
|
|
(0.2
|
)
|
|
(1.7
|
)
|
||||
Separation-related costs
(c)
|
2.4
|
|
|
—
|
|
|
2.4
|
|
|
—
|
|
||||
Livent Standalone Adjusted EBITDA (Non-GAAP)
(1)
|
$
|
42.8
|
|
|
$
|
37.1
|
|
|
$
|
137.3
|
|
|
$
|
82.8
|
|
(1)
|
In addition to net income, as determined in accordance with U.S. GAAP, we evaluate operating performance using certain non-GAAP measures such as EBITDA, which we define as net income plus interest expense, net, income tax expense (benefit), depreciation, and amortization, and Livent Standalone Adjusted EBITDA, which we define as EBITDA adjusted for restructuring and other charges (income), non-operating pension expense (benefit) and settlement charges, and separation-related costs. Management believes the use of these non-GAAP measures allows management and investors to compare more easily the financial performance of its underlying business from period to period. The non-GAAP information provided may not be comparable to similar measures disclosed by other companies because of differing methods used by other companies in calculating EBITDA and Livent Standalone Adjusted EBITDA. This measure should not be considered as a substitute for net income or other measures of performance or liquidity reported in accordance with U.S. GAAP. The above table reconciles EBITDA and Livent Standalone Adjusted EBITDA from net income.
|
(a)
|
We continually perform strategic reviews and assess the return on our business. This sometimes results in a plan to restructure the operations of our business. As part of these restructuring plans, demolition costs and write-downs of long-lived assets may occur.
|
(b)
|
Our non-operating pension expense (benefit) and settlement charges are defined as those costs (benefits) related to interest, expected return on plan assets, amortized actuarial gains and losses and the impacts of any plan curtailments or settlements. These are excluded from our segments results and are primarily related to changes in pension plan assets and liabilities which are tied to financial market performance and we consider these costs to be outside our operational performance. We continue to include the service cost and amortization of prior service cost in our Livent Standalone Adjusted EBITDA results noted above. These elements reflect the current year operating costs to our businesses for the employment benefits provided to active employees.
|
(c)
|
Represents legal, professional or transaction related fees primarily associated with the IPO and other Separation related activities.
|
(in Millions)
|
Nine Months Ended September 30,
|
||||||
2018
|
|
2017
|
|||||
Income from operations before non-operating pension benefit and settlement charges and income taxes
|
$
|
119.1
|
|
|
$
|
67.6
|
|
Special charges and depreciation and amortization
(1)
|
18.2
|
|
|
15.2
|
|
||
Operating income before depreciation and amortization (Non-GAAP)
(2)
|
$
|
137.3
|
|
|
$
|
82.8
|
|
Change in trade receivables, net
(3)
|
(23.0
|
)
|
|
(49.2
|
)
|
||
Change in inventories
(4)
|
0.2
|
|
|
2.3
|
|
||
Change in accounts payable
(5)
|
(9.6
|
)
|
|
21.5
|
|
||
Change in advance payments from customers
|
(1.8
|
)
|
|
(2.2
|
)
|
||
Change in all other operating assets and liabilities
(6)
|
(8.0
|
)
|
|
(9.5
|
)
|
||
Cash basis operating income (Non-GAAP)
|
$
|
95.1
|
|
|
$
|
45.7
|
|
|
|
|
|
||||
Restructuring and other spending
|
$
|
(0.8
|
)
|
|
$
|
(0.1
|
)
|
Environmental spending
|
(0.1
|
)
|
|
(0.2
|
)
|
||
Tax payments, net of refunds
(7)
|
(27.2
|
)
|
|
(11.5
|
)
|
||
Separation-related spending
(8)
|
(4.5
|
)
|
|
—
|
|
||
Cash provided by operating activities
|
$
|
62.5
|
|
|
$
|
33.9
|
|
(1)
|
Represents the sum of restructuring and other charges, separation-related costs, and depreciation and amortization.
|
(2)
|
Referred to as Livent Standalone Adjusted EBITDA.
|
(3)
|
The change in cash flows related to trade receivables in 2018 and 2017 were primarily driven by timing of collections. The increase in each year was also the result of higher revenues in each period compared to the corresponding comparable prior period.
|
(4)
|
The change in cash flows related to inventories is a result of decreased inventory levels due to higher sales volume.
|
(5)
|
The change in cash flows related to accounts payable is primarily driven by timing of payments made to suppliers and vendors. The 2018 period is also impacted by a significant decrease in payables that built in 2017 associated with a lithium hydroxide manufacturing agreement.
|
(6)
|
Changes in all periods presented primarily represent timing of payments associated with all other operating assets and liabilities. Please see the condensed combined statements of cash flows included within these condensed combined financial statements for disaggregation of the components that make up this line item.
|
(7)
|
Tax payments in 2018 increased due to higher global earnings in the period compared to the prior year period.
|
(8)
|
2018 activity represents payments for legal, professional or transaction related fees primarily associated with the IPO and other Separation related activities.
|
10.1
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32.1
|
|
|
|
|
|
32.2
|
|
|
|
|
|
101
|
|
Interactive Data File
|
|
LIVENT CORPORATION
(Registrant)
|
||
|
|
|
|
|
By:
|
/s/ GILBERTO ANTONIAZZI
|
|
|
|
Gilberto Antoniazzi,
Vice President and Chief Financial Officer
|
1 Year Livent Chart |
1 Month Livent Chart |
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