Livent Releases Second Quarter 2020 Results
PHILADELPHIA, Aug. 6, 2020 /PRNewswire/ -- Livent Corporation (NYSE: LTHM) today reported results for the second quarter of 2020.
Second quarter 2020 revenue was $64.9 million, with a reported GAAP net loss of $0.2 million, or breakeven on a per diluted share basis. Adjusted EBITDA was $6.4 million and adjusted earnings per share were also breakeven. Second quarter results reflected the continuation of difficult market conditions for both Livent and the lithium industry as a whole, exacerbated by COVID-19 related supply chain disruptions and related customer order delays.
All Livent production facilities are operational and have been operating without material disruptions. In Argentina, the Company has been operating without incident since resuming activities in early April following the mandatory government decree to halt production. However, we are closely monitoring the situation in Argentina as COVID-19 cases have recently increased in the country, including in the province of Catamarca where we operate. We continue to work closely with provincial and federal officials to provide a safe working environment for our employees and the local communities.
On June 23rd Livent announced the pricing of its Green Convertible Senior Notes due 2025, with total gross proceeds of $246 million. Livent was one of the first US companies to tap into this green financing option. The green notes enhance the Company's liquidity while also showcasing its unique sustainability profile and role as an enabler of green transport and electrification growth.
"Lithium demand was very weak in the second quarter, particularly in electric vehicle applications, as COVID-19 caused serious disruption and uncertainty throughout supply chains," said Paul Graves, president and chief executive officer of Livent. "While our other end-markets fared better, they also were impacted by the broader macroeconomic weakness caused by the pandemic. Amid the uncertainty, we had certain customers delay planned orders until later in the year. During this time Livent took action to significantly enhance liquidity, successfully issuing a green convertible bond and highlighting our ESG credentials with both investors and customers."
Sustainability has become a steadily increasing focus among customers. During the second quarter, Livent released its first Sustainability Report as a fully independent company. Most notably, the Company exceeded or nearly reached its 2025 targets for 20 percent reductions in GHG emissions, energy, water and waste intensities, previously set when Livent was a business segment of FMC Corporation, a full five years ahead of schedule. Livent views sustainability as central to its mission and fundamental to all investment decisions. The full report can be found on our website: livent.com/sustainability.
Livent expects near-term demand to continue to be challenged by weakness in key global markets. Market visibility remains limited in light of economic concerns related to the COVID-19 pandemic, and as a result Livent will not be providing updated financial guidance at this time.
Longer term, Livent continues to expect significant electric vehicle demand growth. Major OEMs are making stronger commitments to their EV platforms, and consumer demand, while currently impacted by COVID-19, shows a growing preference for electric vehicles, leading to higher market penetration rates. Governments around the globe continue to put policies, regulations and incentives in place to support and accelerate this shift to electrification.
On the supply side, COVID-19 restrictions have led to reduced near-term supply growth, while sustained weakness in lithium pricing has forced many developers and producers to defer or cancel new projects and expansions. This is expected to create a shortage of battery qualified lithium materials in the coming years.
"The transition to EVs continues despite COVID-19 related delays, as long-term OEM, government and consumer interest continues to grow. We believe Livent is well positioned to navigate short-term industry weakness and is prepared to react to a return of more normalized demand growth. Our core advantages – the low-cost and sustainable nature of our operations, our partnerships with leading battery producers and OEMs, and our continued investment in developing next generation engineered lithium products – position us to be a prime beneficiary of future improvements in lithium market conditions," concluded Graves.
In this press release, Livent uses the financial measures Adjusted EBITDA and adjusted earnings per diluted share. These terms are not calculated in accordance with generally accepted accounting principles (GAAP). Definitions of these terms, as well as a reconciliation to the most directly comparable financial measure calculated and presented in accordance with GAAP, are provided on our website: ir.livent.com. Such reconciliations are also set forth in the financial tables that accompany this press release.
For more than six decades, Livent has partnered with its customers to safely and sustainably use lithium to power the world. Livent is one of only a small number of companies with the capability, reputation, and know-how to produce high-quality finished lithium compounds that are helping meet the growing demand for lithium. The company has one of the broadest product portfolios in the industry, powering demand for green energy, modern mobility, the mobile economy, and specialized innovations, including light alloys and lubricants. Livent employs approximately 800 people throughout the world and operates manufacturing sites in the United States, England, India, China and Argentina. For more information, visit Livent.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Certain statements in this news release are forward-looking statements. In some cases, you can identify these statements by forward-looking words such as "may," "might," "will," "will continue to," "will likely result," "should," "expect," "expects," "intends," "plans," "anticipates," "believe," "believes," "estimates," "predicts," "potential," "continue," "could," "forecast," "future," "is confident that," "plans," or "projects," the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to risks, uncertainties and assumptions about Livent, may include projections of Livent's future financial performance, Livent's anticipated growth strategies and anticipated trends in Livent's business. These statements are only predictions based on Livent's current expectations and projections about future events. There are important factors that could cause Livent's actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. Currently, one of the most significant factors is the adverse effect of the current coronavirus ("COVID-19") pandemic on our business. The ultimate extent to which COVID-19 impacts us will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures, among others. Additional factors that could cause Livent's actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements include a decline in the growth in demand for electric vehicles; volatility in the price for performance lithium compounds; adverse global economic conditions; competition; quarterly and annual fluctuations of our operating results; risks relating to Livent's planned production expansion and related capital expenditures, including any temporary suspension of our expansion efforts; the potential development and adoption of battery technologies that do not rely on performance lithium compounds as an input; liquidity and access to credit; reduced customer demand, or delays in growth of customer demand, for higher performance lithium compounds,; the success of Livent's research and development efforts; risks inherent in international operations and sales, including political, financial and operational risks specific to Argentina, China and other countries where Livent has active operations; customer concentration and the delay or loss of, or significant reduction in orders from, large customers; failure to satisfy customer quality standards; fluctuations in the price of energy and certain raw materials; employee attraction and retention; union relations; cybersecurity breaches; our ability to protect our intellectual property rights; the lack of proven reserves; legal and regulatory proceedings; including any shareholder lawsuits; compliance with environmental, health and safety laws; changes in tax laws; risks related to our separation from FMC Corporation; risks related to ownership of our common stock, including price fluctuations and lack of dividends; as well as the other factors described under the caption entitled "Risk Factors" in Livent's 2019 Form 10-K filed with the Securities and Exchange Commission on February 28, 2020, our Current Report on Form 8-K filed with the Securities and Exchange Commission on April 6, 2020 and our subsequent Forms 10-Q filed with the Securities and Exchange Commission. Although Livent believes the expectations reflected in the forward-looking statements are reasonable, Livent cannot guarantee future results, level of activity, performance or achievements. Moreover, neither Livent nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. Livent is under no duty to update any of these forward-looking statements after the date of this news release to conform its prior statements to actual results or revised expectations.
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SOURCE Livent Corporation