Bay Street News

KRONOS WORLDWIDE, INC. REPORTS FIRST QUARTER 2024 RESULTS

Dallas, Texas, May 08, 2024 (GLOBE NEWSWIRE) — Kronos Worldwide, Inc. (NYSE:KRO) today reported net income of $8.1 million, or $.07 per share, in the first quarter of 2024 compared to a net loss of $15.2 million, or $.13 per share, in the first quarter of 2023. Net income increased in the first quarter of 2024 as compared to the first quarter of 2023 primarily due to higher income from operations as a result of the net effect of higher sales and production volumes, lower average TiO2 selling prices and lower production costs (primarily energy and raw material costs). Comparability of our results was also impacted by the effects of changes in currency exchange rates.

Net sales of $478.8 million in the first quarter of 2024 were $52.5 million, or 12%, higher than in the first quarter of 2023. Net sales increased in the first quarter of 2024 compared to the first quarter of 2023 due to the net effects of higher sales volumes due to strengthening demand for TiO2 in all our major markets and lower average TiO2 selling prices. TiO2 sales volumes were 28% higher in the first quarter of 2024 as compared to the first quarter of 2023. We started 2024 with average TiO2 selling prices 13% lower than at the beginning of 2023 and our average TiO2 selling prices declined 2% during the first quarter of 2024. Average TiO2 selling prices were 11% lower in the first quarter of 2024 as compared to the first quarter of 2023. Fluctuations in currency exchange rates (primarily the euro) also affected net sales comparisons, increasing net sales by approximately $4 million in first quarter of 2024 as compared to the first quarter of 2023. The table at the end of this press release shows how each of these items impacted net sales.

Our TiO2 segment profit (see description of non-GAAP information below) in the first quarter of 2024 was $23.4 million as compared to our TiO2 segment loss of $14.8 million in the first quarter of 2023. Segment profit increased in the first quarter of 2024 compared to the first quarter of 2023 primarily due to higher income from operations due to the net effects of higher sales and production volumes, lower production costs (primarily energy and raw material costs) and lower average TiO2 selling prices. TiO2 production volumes were 15% higher in the first quarter of 2024 compared to the first quarter of 2023. We operated our production facilities at 76% of practical capacity utilization in the first three months of 2023 due to decreased demand and a higher production cost environment. Due to improved overall demand and a more favorable production cost environment, we increased our production rates to 87% of practical capacity utilization in the first three months of 2024. As a result, our unabsorbed fixed costs associated with production curtailments included in cost of sales decreased by $10 million to $12 million in the first quarter of 2024 compared to $22 million in the first quarter of 2023. Changes in currency exchange rates had a nominal effect on our income from operations in the first quarter of 2024 as compared to the same period in 2023.

Our net income (loss) before interest expense, income taxes and depreciation and amortization expense (EBITDA) (see description of non-GAAP information below) in the first quarter of 2024 was $31.7 million compared to EBITDA of $(5.0) million in the first quarter of 2023.

Our income from operations in the first quarter of 2024 includes an aggregate charge related to a write-off of deferred financing costs of $1.5 million ($1.1 million, or $.01 per share, net of income tax benefit).

Our loss from operations in the first quarter of 2023 includes an insurance settlement gain related to a 2020 business interruption insurance claim of $1.7 million ($1.3 million, or $.01 per share, net of income tax expense).

The statements in this release relating to matters that are not historical facts are forward-looking statements that represent management’s beliefs and assumptions based on currently available information. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we cannot give any assurances that these expectations will prove to be correct. Such statements by their nature involve substantial risks and uncertainties that could significantly impact expected results, and actual future results could differ materially from those described in such forward-looking statements. While it is not possible to identify all factors, we continue to face many risks and uncertainties. The factors that could cause actual future results to differ materially include, but are not limited to, the following:

Should one or more of these risks materialize (or the consequences of such a development worsen), or should the underlying assumptions prove incorrect, actual results could differ materially from those forecasted or expected. The Company disclaims any intention or obligation to update or revise any forward-looking statement whether as a result of changes in information, future events or otherwise.

In an effort to provide investors with additional information regarding the Company’s results of operations as determined by accounting principles generally accepted in the United States of America (GAAP), the Company has disclosed certain non-GAAP information which the Company believes provides useful information to investors:

Kronos Worldwide, Inc. is a major international producer of titanium dioxide products.

Investor Relations Contact:        
Bryan A. Hanley
Senior Vice President & Treasurer
Tel: (972) 233-1700

KRONOS WORLDWIDE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (In millions, except per share and metric ton data)

             
    Three months ended
    March 31, 
    2023   2024
    (unaudited)
Net sales      $  426.3      $  478.8
Cost of sales      395.5      407.3
             
Gross margin      30.8      71.5
             
Selling, general and administrative expense      53.2      54.2
Other operating income (expense):              
Currency transactions, net      5.4      5.8
Other income (expense), net     1.9      (.1)
Corporate expense      (3.2)      (3.5)
             
Income (loss) from operations      (18.3)      19.5
             
Other income (expense):              
Trade interest income      .3      .4
Other interest and dividend income      1.7      .9
Marketable equity securities     (.7)      .3
Other components of net periodic pension
   and OPEB cost
     (.9)      (.3)
Interest expense      (4.2)      (9.2)
             
Income (loss) before income taxes      (22.1)      11.6
             
Income tax expense (benefit)     (6.9)      3.5
             
Net income (loss)   $  (15.2)   $  8.1
             
Net income (loss) per basic and diluted share   $  (.13)   $  .07
             
Weighted average shares used in the
   calculation of net income (loss) per share
     115.3      115.0
             
TiO2 data – metric tons in thousands:              
Sales volumes      102      130
Production volumes      105      121

KRONOS WORLDWIDE, INC.
RECONCILIATION OF INCOME (LOSS) FROM
OPERATIONS TO SEGMENT PROFIT (LOSS)
(In millions)

               
    Three months ended
    March 31, 
    2023     2024
    (unaudited)
Income (loss) from operations   $  (18.3)     $  19.5
               
Adjustments:                
Trade interest income      .3        .4
Corporate expense      3.2        3.5
               
Segment profit (loss)   $  (14.8)     $  23.4

RECONCILIATION OF NET INCOME (LOSS) TO EBITDA
(In millions)

             
    Three months ended
    March 31, 
    2023   2024
    (unaudited)
Net income (loss)   $  (15.2)   $  8.1
             
Adjustments:              
Depreciation expense      12.9      10.9
Interest expense      4.2      9.2
Income tax expense (benefit)      (6.9)      3.5
             
EBITDA   $  (5.0)   $  31.7

IMPACT OF PERCENTAGE CHANGE IN NET SALES

       
       Three months ended  
    March 31,   
    2024 vs. 2023  
    (unaudited)
Percentage change in net sales:       
TiO2 sales volumes    28 %
TiO2 product pricing    (11)  
TiO2 product mix/other    (6)  
Changes in currency exchange rates    1  
       
Total    12 %


Bay Street News