2024 Q1 Form 10-K Financial Statement

#000143774924005185 Filed on February 22, 2024

View on sec.gov

Income Statement

Concept 2024 Q1 2023 Q4 2023
Revenue $1.470B $1.403B $6.111B
YoY Change -8.47% -14.97% -23.83%
Cost Of Revenue $1.269B $1.251B $5.205B
YoY Change -5.09% -14.32% -19.64%
Gross Profit $201.0M $152.0M $906.0M
YoY Change -25.28% -20.0% -41.4%
Gross Profit Margin 13.67% 10.83% 14.83%
Selling, General & Admin $176.0M $169.0M $689.0M
YoY Change -6.38% -5.59% -3.09%
% of Gross Profit 87.56% 111.18% 76.05%
Research & Development $31.00M $28.00M $115.0M
YoY Change 3.33% 0.0% -8.0%
% of Gross Profit 15.42% 18.42% 12.69%
Depreciation & Amortization $69.00M $70.00M $278.0M
YoY Change 0.0% -5.41% -1.07%
% of Gross Profit 34.33% 46.05% 30.68%
Operating Expenses $239.0M $195.0M $822.0M
YoY Change 14.9% 16.77% -5.95%
Operating Profit -$38.00M -$43.00M $84.00M
YoY Change -162.3% -286.96% -87.5%
Interest Expense -$19.00M -$9.000M -$65.00M
YoY Change 5.56% 28.57% 4.84%
% of Operating Profit -77.38%
Other Income/Expense, Net $2.000M $4.000M $2.000M
YoY Change 100.0% -66.67% -94.29%
Pretax Income -$36.00M -$59.00M $99.00M
YoY Change -165.45% 136.0% -85.8%
Income Tax -$20.00M -$2.000M $64.00M
% Of Pretax Income 64.65%
Net Earnings -$37.00M -$71.00M $101.0M
YoY Change -124.18% -21.98% -78.04%
Net Earnings / Revenue -2.52% -5.06% 1.65%
Basic Earnings Per Share -$0.22 $0.57
Diluted Earnings Per Share -$0.22 -$0.40 $0.57
COMMON SHARES
Basic Shares Outstanding 172.3M 174.3M 177.4M
Diluted Shares Outstanding 171.8M 177.4M

Balance Sheet

Concept 2024 Q1 2023 Q4 2023
SHORT-TERM ASSETS
Cash & Short-Term Investments $552.0M $540.0M $540.0M
YoY Change -10.24% -17.43% -17.43%
Cash & Equivalents $552.0M $540.0M $540.0M
Short-Term Investments
Other Short-Term Assets $158.0M $154.0M $154.0M
YoY Change 5.33% -18.95% -76.74%
Inventory $896.0M $867.0M $867.0M
Prepaid Expenses
Receivables $837.0M $747.0M $747.0M
Other Receivables $0.00 $6.000M $6.000M
Total Short-Term Assets $2.443B $2.314B $2.314B
YoY Change -9.52% -26.42% -26.42%
LONG-TERM ASSETS
Property, Plant & Equipment $2.571B $2.376B $2.742B
YoY Change 8.66% -0.04% -0.33%
Goodwill $640.0M $644.0M
YoY Change -0.31% 0.47%
Intangibles $378.0M $387.0M
YoY Change -8.92% -8.94%
Long-Term Investments $457.0M $438.0M $438.0M
YoY Change 3.63% 3.06% 3.06%
Other Assets $563.0M $611.0M $723.0M
YoY Change -19.11% -10.93% -13.21%
Total Long-Term Assets $5.129B $4.934B $4.934B
YoY Change 1.3% -2.78% -2.78%
TOTAL ASSETS
Total Short-Term Assets $2.443B $2.314B $2.314B
Total Long-Term Assets $5.129B $4.934B $4.934B
Total Assets $7.572B $7.248B $7.248B
YoY Change -2.46% -11.82% -11.82%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $745.0M $719.0M $719.0M
YoY Change -13.07% -20.73% -25.18%
Accrued Expenses $386.0M $395.0M $374.0M
YoY Change 1.31% -7.93% -9.22%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due $396.0M $12.00M $12.00M
YoY Change 3500.0% -81.82% -81.82%
Total Short-Term Liabilities $1.579B $1.172B $1.172B
YoY Change 21.74% -31.1% -31.1%
LONG-TERM LIABILITIES
Long-Term Debt $1.660B $1.676B $1.676B
YoY Change 10.01% 0.3% 0.3%
Other Long-Term Liabilities $336.0M $345.0M $679.0M
YoY Change -14.94% -18.25% -10.42%
Total Long-Term Liabilities $1.996B $2.021B $2.355B
YoY Change 4.83% -3.44% -3.05%
TOTAL LIABILITIES
Total Short-Term Liabilities $1.579B $1.172B $1.172B
Total Long-Term Liabilities $1.996B $2.021B $2.355B
Total Liabilities $4.178B $3.770B $4.025B
YoY Change 10.73% -13.93% -12.9%
SHAREHOLDERS EQUITY
Retained Earnings $2.528B $2.622B
YoY Change -9.84% -3.07%
Common Stock
YoY Change
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $3.152B $3.251B $3.223B
YoY Change
Total Liabilities & Shareholders Equity $7.572B $7.248B $7.248B
YoY Change -2.46% -11.82% -11.82%

Cashflow Statement

Concept 2024 Q1 2023 Q4 2023
OPERATING ACTIVITIES
Net Income -$37.00M -$71.00M $101.0M
YoY Change -124.18% -21.98% -78.04%
Depreciation, Depletion And Amortization $69.00M $70.00M $278.0M
YoY Change 0.0% -5.41% -1.07%
Cash From Operating Activities -$65.00M $164.0M $209.0M
YoY Change -57.79% -47.1% -77.13%
INVESTING ACTIVITIES
Capital Expenditures $42.00M $83.00M $230.0M
YoY Change -8.7% -3.49% -15.44%
Acquisitions $0.00
YoY Change
Other Investing Activities $0.00 -$3.000M $5.000M
YoY Change -100.0% -40.0% -171.43%
Cash From Investing Activities -$30.00M -$86.00M $305.0M
YoY Change -106.13% -5.49% -209.32%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net $344.0M
YoY Change -65.57%
Debt Paid & Issued, Net $3.000M $11.00M
YoY Change -25.0% -8.33%
Cash From Financing Activities $108.0M -39.00M -$620.0M
YoY Change -128.5% -56.18% -37.63%
NET CHANGE
Cash From Operating Activities -$65.00M 164.0M $209.0M
Cash From Investing Activities -$30.00M -86.00M $305.0M
Cash From Financing Activities $108.0M -39.00M -$620.0M
Net Change In Cash $12.00M 39.00M -$114.0M
YoY Change -130.77% -70.0% -70.54%
FREE CASH FLOW
Cash From Operating Activities -$65.00M $164.0M $209.0M
Capital Expenditures $42.00M $83.00M $230.0M
Free Cash Flow -$107.0M $81.00M -$21.00M
YoY Change -46.5% -63.84% -103.27%

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<p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"><b><a href="#" id="notes" title="notes"></a><em style="font: inherit;">1.</em> </b><b>GENERAL</b></p> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt;"> </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;font-variant:small-caps;margin:0pt;text-align:left;"><span style="text-transform:uppercase;"><b>D<span style="font-family:Times New Roman;font-size:7pt;">escription of</span> B<span style="font-family:Times New Roman;font-size:7pt;">usiness</span></b></span></p> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt;"> </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">We are a global manufacturer of diversified organic chemical products. We operate in <span style="-sec-ix-hidden:c106795331">three</span> segments: Polyurethanes, Performance Products and Advanced Materials. Our products comprise many different chemicals and formulations, which we market globally to a wide range of consumers that consist primarily of industrial and building product manufacturers. Our products are used in a broad range of applications, including those in the adhesives, aerospace, automotive, coatings and construction, construction products, durable and non-durable consumer products, electronics, insulation, packaging, power generation and refining. Many of our products offer effects such as premium insulation in homes and buildings and the light weighting of airplanes and automobiles that help conserve energy. We are a leading global producer in many of our key product lines, including MDI, amines, maleic anhydride and epoxy-based polymer formulations. </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;"> </p> <p style="font-family: &quot;Times New Roman&quot;; font-size: 10pt; font-variant: normal; margin: 0pt; text-indent: 36pt; text-align: left;">Our company, a Delaware corporation, was formed in <em style="font: inherit;">2004</em> to hold the Huntsman businesses, which were founded by Jon M. Huntsman. Mr. Huntsman founded the predecessor to our Company in <em style="font: inherit;">1970</em> as a small polystyrene plastics packaging company. Since then, we have transformed through a series of acquisitions and divestitures and now own a global portfolio of businesses with a primary focus on improving energy efficiency. On <em style="font: inherit;"> February 28, 2023, </em>we completed the sale of our Textile Effects Business to Archroma for a purchase price of $593 million, which includes estimated adjustments to the purchase price for working capital plus the assumption of underfunded pension liabilities. The final purchase price is subject to customary post-closing adjustments. Upon the completion of the sale, we received net proceeds of $530 million, determined as the purchase price less $5 million for certain costs paid by Archroma on our behalf, $30 million of estimated net working capital adjustments and $28 million of cash that will be reimbursed to us as part of the final post-closing adjustments anticipated in the <em style="font: inherit;">first</em> quarter of <em style="font: inherit;">2024.</em> For more information, see “Note <em style="font: inherit;">4.</em> Discontinued Operations and Business Dispositions— Discontinued Operations—Sale of Textile Effects Business.” We operate all of our businesses through Huntsman International, our wholly-owned subsidiary. Huntsman International is a Delaware limited liability company and was formed in <em style="font: inherit;">1999.</em></p> <p style="font-family: &quot;Times New Roman&quot;; font-size: 10pt; font-variant: normal; margin: 0pt; text-indent: 36pt; text-align: left;"> </p> <div style="font-size:10pt"> <div style="font-family:'Times New Roman', Times, serif"> <span style="text-transform:uppercase"><b>H<span style="font-family:Times New Roman; font-size:7pt">untsman</span> C<span style="font-family:Times New Roman; font-size:7pt">orporation</span> <span style="font-family:Times New Roman; font-size:7pt">and</span> H<span style="font-family:Times New Roman; font-size:7pt">untsman</span> I<span style="font-family:Times New Roman; font-size:7pt">nternational</span> F<span style="font-family:Times New Roman; font-size:7pt">inancial</span> S<span style="font-family:Times New Roman; font-size:7pt">tatements</span></b></span> </div> <div style="font-family:'Times New Roman', Times, serif">   </div> </div> <div style="font-size:10pt"> <div style="font-family: &quot;Times New Roman&quot;, Times, serif; text-indent: 36pt;"> Except where otherwise indicated, these notes relate to the consolidated financial statements for both our Company and Huntsman International. The differences between our consolidated financial statements and Huntsman International’s consolidated financial statements relate primarily to different capital structures and purchase accounting recorded at our Company for the <em style="font: inherit;">2003</em> step-acquisition of Huntsman International Holdings LLC, the former parent company of Huntsman International that was merged into Huntsman International in <em style="font: inherit;">2005.</em> </div> <div style="font-family: &quot;Times New Roman&quot;, Times, serif; text-indent: 18pt;">   </div> <div style="font-family: &quot;Times New Roman&quot;, Times, serif; text-indent: 36pt;"> Huntsman International declared and paid to us a distribution in the form of certain affiliate accounts receivable in the <em style="font: inherit;">fourth</em> quarter of  <em style="font: inherit;">2022</em> and during <em style="font: inherit;">2023.</em> </div> <div style="font-family: &quot;Times New Roman&quot;, Times, serif; text-indent: 18pt;">   </div> </div> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;font-variant:small-caps;margin:0pt;text-align:left;"><span style="text-transform:uppercase;"><b>R<span style="font-family:Times New Roman;font-size:7pt;">ecent</span> D<span style="font-family:Times New Roman;font-size:7pt;">evelopments </span></b></span></p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;font-variant:small-caps;margin:0pt;text-align:left;"> </p> <p style="font-family: &quot;Times New Roman&quot;; font-size: 10pt; font-variant: normal; margin: 0pt; text-align: left;"><b>Dividend Increase</b></p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family: &quot;Times New Roman&quot;; font-size: 10pt; font-variant: normal; margin: 0pt; text-indent: 36pt; text-align: left;">On <em style="font: inherit;"> February 16, 2024, </em>our Board of Directors declared a $0.25 per share cash dividend on our common stock. This represents an approximate 5% increase from the previous dividend.</p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;font-variant:small-caps;margin:0pt;text-align:left;"> </p> <p style="font-family: &quot;Times New Roman&quot;; font-size: 10pt; font-variant: normal; margin: 0pt; text-align: left;"><b>Separation and Acquisition of Assets of SLIC Joint Venture </b></p> <p style="font-family: &quot;Times New Roman&quot;; font-size: 10pt; font-variant: normal; margin: 0pt; text-align: left;"> </p> <p style="font-family: &quot;Times New Roman&quot;; font-size: 10pt; font-variant: normal; margin: 0pt; text-indent: 36pt; text-align: left;">On <em style="font: inherit;"> January 31, 2024, </em>we completed the planned separation and acquisition of assets of SLIC, our manufacturing joint venture with BASF and <em style="font: inherit;">three</em> Chinese chemical companies. The final purchase price of the acquired assets will be determined based on an asset valuation, which we currently expect to be completed in the <em style="font: inherit;">first</em> quarter of <em style="font: inherit;">2024.</em> The acquisition of the assets were funded in part with HPS issuing a note payable at closing of approximately $230 million, which is subject to change pending the final valuation. As of <em style="font: inherit;"> January 31, 2024, </em>we made a cash payment of approximately $26 million against the note payable. The remainder of the note payable will be paid off in cash in future quarters. The future proceeds of the acquisition received by SLIC will be distributed back to the respective joint venture partners upon liquidation of the joint venture. We anticipate that the liquidation will occur by mid-<em style="font: inherit;">2025.</em></p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt 0pt 0pt 8pt;text-indent:36pt;"> </p> <p style="font-family: &quot;Times New Roman&quot;; font-size: 10pt; font-variant: normal; margin: 0pt; text-align: left;"><b>Amendments to Accounts Receivable Securitization Programs</b></p> <p style="font-family: &quot;Times New Roman&quot;; font-size: 10pt; font-variant: normal; margin: 0pt; text-align: left;"> </p> <p style="font-family: &quot;Times New Roman&quot;; font-size: 10pt; font-variant: normal; margin: 0pt; text-indent: 36pt; text-align: left;">On <em style="font: inherit;"> January 22, 2024, </em>we entered into an amendment to our U.S. A/R Program that extended the scheduled maturity date of our U.S. A/R Program from <em style="font: inherit;"> July 2024 </em>to <em style="font: inherit;"> January 2027. </em>In addition, on <em style="font: inherit;"> January 31, 2024, </em>we entered into an amendment to our EU A/R Program, effective as of <em style="font: inherit;"> February 15, 2024, </em>that extended the scheduled maturity date of our EU A/R Program from <em style="font: inherit;"> July 2024 </em>to <em style="font: inherit;"> July 2027. </em>Aside from the extended maturity dates, these amendments to our A/R Programs secured substantially similar terms as those in the prior agreements.</p> <p style="font-family: &quot;Times New Roman&quot;; font-size: 10pt; font-variant: normal; margin: 0pt; text-indent: 36pt; text-align: left;"> </p> <p style="font-family: &quot;Times New Roman&quot;; font-size: 10pt; font-variant: normal; margin: 0pt; text-align: left;"><b>Other Significant Development During <em style="font: inherit;">2023</em></b></p> <p style="font-family: &quot;Times New Roman&quot;; font-size: 10pt; font-variant: normal; margin: 0pt; text-align: left;"> </p> <p style="font-family: &quot;Times New Roman&quot;; font-size: 10pt; font-variant: normal; margin: 0pt; text-align: left; text-indent: 36pt;">On <em style="font: inherit;"> September 19, 2023, </em>we entered into a share purchase agreement to sell our polyurethanes business in Russia and Belarus. The transaction is subject to government approvals in several jurisdictions in addition to regulatory approvals and the satisfaction of customary closing conditions. The timing and final completion of the transaction are uncertain as the requirements to obtain approval of the transaction have been evolving, and we expect the approval process will continue to be subject to unanticipated changes and delays. </p> <p style="font-family: &quot;Times New Roman&quot;; font-size: 10pt; font-variant: normal; margin: 0pt; text-indent: 36pt; text-align: left;"> </p>
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<p style="font-family: Times New Roman; font-size: 7pt; font-variant: small-caps; margin: 0pt; text-align: left;"><span style="text-transform:uppercase;"><b><span style="font-family:Times New Roman;font-size:10pt;">U</span>se of <span style="font-family:Times New Roman;font-size:10pt;">E</span>stimates</b></span></p> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt;"> </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.</p> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt;"> </p> <p style="font-size: 1pt; margin: 0; text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif"> </p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;font-variant:small-caps;margin:0pt;text-align:left;"></p>
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