FMC Corporation delivers first quarter earnings at higher end of guidance range, maintains full-year outlook
FMC reported first quarter 2024 earnings at the higher end of the guidance range. Revenue was $918 million, down 32% from Q1 2023. Adjusted EBITDA was $161 million, down 56% from Q1 2023. The company maintains full-year outlook with revenue expected to be $4.50 to $4.70 billion and adjusted EBITDA outlook of $900 million to $1.05 billion. Free cash flow outlook remains at $400 million to $600 million.
First quarter earnings at the higher end of guidance range
Significant improvement in cash from operations, up $708 million versus prior year
Maintains full-year revenue outlook of $4.50 to $4.70 billion
Maintains adjusted EBITDA outlook of $900 million to $1.05 billion
Adjusted earnings per diluted share outlook increased by 1% at the midpoint versus 2023
Revenue down 32% versus Q1 2023
Adjusted EBITDA down 56% versus Q1 2023
Consolidated GAAP net loss of $3 million in Q1 2024
Free cash flow negative $188 million in Q1 2024
Volume decline of 27% in first quarter revenue
North America sales declined 48%
Asia sales declined 29%
Plant Health revenue down 14%
Insights
On the positive side, the company's commitment to restructuring and the success of new product introductions seem to offer some counterbalance. Furthermore, the improvement in free cash flow, a important marker of financial health, by
Considering the second-half sales growth expectation of
Significant improvement in first quarter cash from operations, up
First Quarter 2024 Highlights
- Revenue of
$918 million - Consolidated GAAP net loss of
$3 million - Adjusted EBITDA of
$161 million - Consolidated GAAP loss of
$0.02 - Adjusted earnings per diluted share of
$0.36 - GAAP cash from operations of negative
$143 million $708 million - Free cash flow of negative
$188 million $727 million - Strong contribution from new product introductions (NPI3)
Full-Year Outlook2
- Maintains revenue outlook of
$4.50 billion $4.70 billion - Maintains adjusted EBITDA outlook of
$900 million $1.05 billion - Adjusted earnings per diluted share outlook unchanged at
$3.23 $4.41 - Restructuring continues, and company maintains target of
$50 million $75 million - Free cash flow outlook of
$400 million $600 million
FMC Corporation (NYSE:FMC) today reported first quarter 2024 revenue of
First Quarter Adjusted EPS versus Q1 2023 | - |
Adjusted EBITDA | - |
Interest Expense | - |
Depreciation & Amortization | - |
Noncontrolling Interest | |
Rounding |
"Free cash flow improved significantly, and we delivered adjusted EBITDA at the high end of our guidance range during the first quarter," said Mark Douglas, FMC president and chief executive officer. "As expected, sales continued to be impacted by inventory management actions by customers in all regions. Our results benefited from our restructuring actions and the continued resilient sales of our new products, particularly in
First quarter revenue was driven by 27 percent decline in volume due to ongoing channel destocking in all regions. Price was lower by 4 percent and foreign currency was a headwind of 1 percent.
FMC Revenue | Q1 2024 |
Total Revenue Change (GAAP) | (32) % |
Less FX Impact | (1) % |
Organic1 Revenue Change (Non-GAAP) | (31) % |
FMC first quarter adjusted EBITDA was
On a GAAP basis, cash from operations was negative
Outlook2
The company is forecasting full-year 2024 revenue to be in the range of
Second quarter revenue is expected to be in the range of
The midpoint of first-half guidance implies a 23 percent increase in second-half sales, a 46 percent increase in second-half adjusted EBITDA and a 91 percent increase in second-half EPS compared to the same period last year. Growth in second half results is expected to come from improving market conditions as the year progresses, higher year-over-year sales of new products and restructuring benefits. COGS headwinds are forecasted in the second half of the year primarily due to lower fixed cost absorption.
Full-Year 2024 | Q2 2024 | First-Half | Second-Half | ||
Revenue | |||||
Growth at midpoint vs. 2023 | 2.5 % | 6 % | (16) % | 23 % | |
Adjusted EBITDA | |||||
Growth at midpoint vs. 2023 | 0 % | 1 % | (36) % | 46 % | |
Adjusted EPS^ | |||||
Growth at midpoint vs. 2023 | 1 % | 15 % | (59) % | 91 % | |
^ EPS estimates assume 125.5 million diluted shares for full year and 125.5 million diluted shares for Q2. |
"Our second quarter revenue outlook includes volume growth for the first time since global destocking began in the second quarter of 2023," said Douglas. "We expect the market to continue to improve as we progress through the year and transition to more normal conditions in 2025. The combination of steady on-the-ground application, demand for our innovative and differentiated portfolio and a more efficient cost structure places FMC in a strong position as the market recovers."
Supplemental Information
The company will post supplemental information on the web at https://investors.fmc.com, including its webcast slides for tomorrow's earnings call, definitions of non-GAAP terms and reconciliations of non-GAAP figures to the nearest available GAAP term.
Always read and follow all label directions, restrictions and precautions for use. Products listed here may not be registered for sale or use in all states, countries or jurisdictions. FMC, the FMC logo, Adastrio, Onsuva, Premio and Xyway are trademarks of FMC Corporation or an affiliate.
About FMC
FMC Corporation is a global agricultural sciences company dedicated to helping growers produce food, feed, fiber and fuel for an expanding world population while adapting to a changing environment. FMC's innovative crop protection solutions – including biologicals, crop nutrition, digital and precision agriculture – enable growers, crop advisers and turf and pest management professionals to address their toughest challenges economically while protecting the environment. With approximately 6,200 employees at more than 100 sites worldwide, FMC is committed to discovering new herbicide, insecticide and fungicide active ingredients, product formulations and pioneering technologies that are consistently better for the planet. Visit fmc.com to learn more and follow us on LinkedIn®.
Statement under the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995: FMC and its representatives may from time to time make written or oral statements that are "forward-looking" and provide other than historical information, including statements contained in this press release, in FMC's other filings with the SEC, and in presentations, reports or letters to FMC stockholders.
In some cases, FMC has identified these forward-looking statements by such words or phrases as "outlook", "will likely result," "is confident that," "expect," "expects," "should," "could," "may," "will continue to," "believe," "believes," "anticipates," "predicts," "forecasts," "estimates," "projects," "potential," "intends" or similar expressions identifying "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including the negative of those words or phrases. Such forward-looking statements are based on our current views and assumptions regarding future events, future business conditions and the outlook for the company based on currently available information. The forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from any results, levels of activity, performance or achievements expressed or implied by any forward-looking statement. These statements are qualified by reference to the risk factors included in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023 (the "2023 Form 10-K"), the section captioned "Forward-Looking Information" in Part II of the 2023 Form 10-K and to similar risk factors and cautionary statements in all other reports and forms filed with the Securities and Exchange Commission ("SEC"). We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Forward-looking statements are qualified in their entirety by the above cautionary statement.
We specifically decline to undertake any obligation, and specifically disclaims any duty, to publicly update or revise any forward-looking statements that have been made to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events, except as may be required by law.
This press release contains certain "non-GAAP financial terms" which are defined on our website www.fmc.com/investors. Such terms include adjusted EBITDA, adjusted earnings, free cash flow and organic revenue growth. In addition, we have also provided on our website reconciliations of non-GAAP terms to the most directly comparable GAAP term.
- Organic revenue growth (non-GAAP) excludes the impact of foreign currency changes.
- Although we provide forecasts for adjusted earnings per share, adjusted EBITDA, and free cash flow (non-GAAP financial measures), we are not able to forecast the most directly comparable measures calculated and presented in accordance with GAAP. Certain elements of the composition of the GAAP amounts are not predictable, making it impractical for us to forecast. Such elements include, but are not limited to, restructuring, acquisition charges, and discontinued operations. As a result, no GAAP outlook is provided.
- NPI (New Product Introductions) launched in the last five years
FMC CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) (Unaudited, in millions, except per share amounts) | |||
Three Months Ended March 31, | |||
2024 | 2023 | ||
Revenue | $ 918.0 | $ 1,344.3 | |
Costs of sales and services | 578.3 | 763.0 | |
Gross margin | $ 339.7 | $ 581.3 | |
Selling, general and administrative expenses | 163.9 | 185.9 | |
Research and development expenses | 60.9 | 78.4 | |
Restructuring and other charges (income) | 40.9 | 12.5 | |
Total costs and expenses | $ 844.0 | $ 1,039.8 | |
Income from continuing operations before non-operating pension and postretirement charges (income), interest expense, net and income taxes | $ 74.0 | $ 304.5 | |
Non-operating pension and postretirement charges (income) | 4.3 | 4.6 | |
Interest expense, net | 61.7 | 51.4 | |
Income (loss) from continuing operations before income taxes | $ 8.0 | $ 248.5 | |
Provision (benefit) for income taxes | (1.4) | 41.1 | |
Income (loss) from continuing operations | $ 9.4 | $ 207.4 | |
Discontinued operations, net of income taxes | (12.5) | (11.5) | |
Net income (loss) | $ (3.1) | $ 195.9 | |
Less: Net income (loss) attributable to noncontrolling interests | (0.4) | (0.1) | |
Net income (loss) attributable to FMC stockholders | $ (2.7) | $ 196.0 | |
Amounts attributable to FMC stockholders: | |||
Income (loss) from continuing operations | $ 9.8 | $ 207.5 | |
Discontinued operations, net of tax | (12.5) | (11.5) | |
Net income (loss) | $ (2.7) | $ 196.0 | |
Basic earnings (loss) per common share attributable to FMC stockholders: | |||
Continuing operations | $ 0.08 | $ 1.65 | |
Discontinued operations | (0.10) | (0.09) | |
Basic earnings per common share | $ (0.02) | $ 1.56 | |
Average number of shares outstanding used in basic earnings per share computations | 124.9 | 125.3 | |
Diluted earnings (loss) per common share attributable to FMC stockholders: | |||
Continuing operations | $ 0.08 | $ 1.64 | |
Discontinued operations | (0.10) | (0.09) | |
Diluted earnings per common share | $ (0.02) | $ 1.55 | |
Average number of shares outstanding used in diluted earnings per share computations | 125.2 | 126.1 | |
Other Data: | |||
Capital additions and other investing activities | $ 23.4 | $ 51.3 | |
Depreciation and amortization expense | 45.7 | 44.7 | |
FMC CORPORATION RECONCILIATION OF NON-GAAP FINANCIAL MEASURES | ||||
RECONCILIATION OF NET INCOME (LOSS) ATTRIBUTABLE TO FMC STOCKHOLDERS (GAAP) TO ADJUSTED AFTER-TAX EARNINGS FROM CONTINUING OPERATIONS, ATTRIBUTABLE TO FMC STOCKHOLDERS (NON-GAAP) (Unaudited, in millions, except per share amounts) | ||||
Three Months Ended March 31, | ||||
2024 | 2023 | |||
Net income (loss) attributable to FMC stockholders (GAAP) | $ (2.7) | $ 196.0 | ||
Corporate special charges (income): | ||||
Restructuring and other charges (income) (a) | 40.9 | 12.5 | ||
Non-operating pension and postretirement charges (income) (b) | 4.3 | 4.6 | ||
Income tax expense (benefit) on Corporate special charges (income) (c) | (9.6) | (2.0) | ||
Adjustment for noncontrolling interest, net of tax on Corporate special charges (income) | — | (2.8) | ||
Discontinued operations attributable to FMC stockholders, net of income taxes (d) | 12.5 | 11.5 | ||
Tax adjustment (e) | — | 3.3 | ||
Adjusted after-tax earnings from continuing operations attributable to FMC stockholders (Non-GAAP) (1) | $ 45.4 | $ 223.1 | ||
Diluted earnings per common share (GAAP) | $ (0.02) | $ 1.55 | ||
Corporate special charges (income) per diluted share, before tax: | ||||
Restructuring and other charges (income) | 0.33 | 0.10 | ||
Non-operating pension and postretirement charges (income) | 0.03 | 0.04 | ||
Income tax expense (benefit) on Corporate special charges (income), per diluted share | (0.08) | (0.02) | ||
Adjustment for noncontrolling interest, net of tax on Corporate special charges (income) per diluted share | — | (0.02) | ||
Discontinued operations attributable to FMC stockholders, net of income taxes per diluted share | 0.10 | 0.09 | ||
Tax adjustments per diluted share | — | 0.03 | ||
Diluted adjusted after-tax earnings from continuing operations per share, attributable to FMC stockholders (Non-GAAP) | $ 0.36 | $ 1.77 | ||
Average number of shares outstanding used in diluted adjusted after-tax earnings from continuing operations per share computations | 125.2 | 126.1 | ||
(1) | Referred to as Adjusted earnings. The Company believes that Adjusted earnings, a Non-GAAP financial measure, and its presentation on a per share basis provides useful information about the Company's operating results to management, investors, and securities analysts. Adjusted earnings excludes the effects of corporate special charges, tax-related adjustments and the results of our discontinued operations. The Company also believes that excluding the effects of these items from operating results allows management and investors to compare more easily the financial performance of its underlying business from period to period. | ||||||
(a) | Three Months Ended March 31, 2024: | ||||||
Restructuring and other charges (income) includes restructuring charges of | |||||||
Three Months Ended March 31, 2023: | |||||||
Restructuring and other charges (income) includes asset impairment and other charges of | |||||||
(b) | Our non-operating pension and postretirement charges (income) 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 Adjusted Earnings 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 Adjusted Earnings results noted above. These elements reflect the current year operating costs to our businesses for the employment benefits provided to active employees. | ||||||
(c) | The income tax expense (benefit) on Corporate special charges (income) is determined using the applicable rates in the taxing jurisdictions in which the corporate special charge or income occurred and includes both current and deferred income tax expense (benefit) based on the nature of the non-GAAP performance measure. | ||||||
(d) | Discontinued operations includes provisions, net of recoveries, for environmental liabilities and legal reserves and expenses related to previously discontinued operations and retained liabilities. | ||||||
(e) | We exclude the GAAP tax provision, including discrete items, from the Non-GAAP measure of income, and include a Non-GAAP tax provision based upon the projected annual Non-GAAP effective tax rate. The GAAP tax provision includes certain discrete tax items including, but are not limited to: income tax expenses or benefits that are not related to continuing operating results in the current year; tax adjustments associated with fluctuations in foreign currency remeasurement of certain foreign operations; certain changes in estimates of tax matters related to prior fiscal years; certain changes in the realizability of deferred tax assets and related interim accounting impacts; and changes in tax law. Management believes excluding these discrete tax items assists investors and securities analysts in understanding the tax provision and the effective tax rate related to continuing operating results thereby providing investors with useful supplemental information about FMC's operational performance. | ||||||
Three Months Ended March 31, | |||
(in Millions) | 2024 | 2023 | |
Non-GAAP tax adjustments | |||
Revisions to valuation allowances of historical deferred tax assets | $ (1.6) | $ — | |
Foreign currency remeasurement and other discrete items | 1.6 | 3.3 | |
Total Non-GAAP tax adjustments | $ — | $ 3.3 | |
RECONCILIATION OF NET INCOME (LOSS) (GAAP) TO ADJUSTED EARNINGS FROM CONTINUING (Unaudited, in millions) | ||||
Three Months Ended March 31, | ||||
2024 | 2023 | |||
Net income (loss) (GAAP) | $ (3.1) | $ 195.9 | ||
Restructuring and other charges (income) | 40.9 | 12.5 | ||
Non-operating pension and postretirement charges (income) | 4.3 | 4.6 | ||
Discontinued operations, net of income taxes | 12.5 | 11.5 | ||
Interest expense, net | 61.7 | 51.4 | ||
Depreciation and amortization | 45.7 | 44.7 | ||
Provision (benefit) for income taxes | (1.4) | 41.1 | ||
Adjusted earnings from continuing operations, before interest, income taxes, depreciation and amortization, and noncontrolling interests (Non-GAAP) (1) | $ 160.6 | $ 361.7 | ||
(1) | Referred to as Adjusted EBITDA. Defined as operating profit excluding restructuring and other charges (income) and depreciation and amortization expense. | ||||||
RECONCILIATION OF CASH PROVIDED (REQUIRED) BY OPERATING ACTIVITIES OF (Unaudited, in millions) | ||||
Three Months Ended March 31, | ||||
2024 | 2023 | |||
Cash provided (required) by operating activities of continuing operations (GAAP) | $ (142.9) | $ (851.3) | ||
Project Focus transformation spending | 39.9 | — | ||
Adjusted cash from operations(1) | $ (103.0) | $ (851.3) | ||
Capital expenditures | (20.7) | (46.9) | ||
Other investing activities | (2.7) | (4.4) | ||
Capital additions and other investing activities | $ (23.4) | $ (51.3) | ||
Cash provided (required) by operating activities of discontinued operations | (21.5) | (12.6) | ||
Project Focus transformation spending | (39.9) | — | ||
Legacy and transformation | $ (61.4) | $ (12.6) | ||
Free cash flow (Non-GAAP)(2) | $ (187.8) | $ (915.2) | ||
(1) | Adjusted cash from operations is defined as cash provided (required) by operating activities of continuing operations excluding the effects of transaction-related cash flows and Project Focus transformation spending. | ||||||
(2) | Free cash flow is defined as Adjusted cash from operations reduced by spending for capital additions and other investing activities as well as legacy and transformation spending. We believe that this Non-GAAP financial measure provides a useful basis for investors and securities analysts about the cash generated by routine business operations, including capital expenditures, in addition to assessing our ability to repay debt, fund acquisitions and return capital to shareholders through share repurchases and dividends. Our use of free cash flow has limitations as an analytical tool and should not be considered in isolation or as a substitute for an analysis of our results under | ||||||
RECONCILIATION OF REVENUE CHANGE (GAAP) TO ORGANIC REVENUE CHANGE (NON-GAAP) (1) (Unaudited) | |
Three Months Ended | |
Total Revenue Change (GAAP) | (32) % |
Less: Foreign Currency Impact | (1) % |
Organic Revenue Change (Non-GAAP) | (31) % |
(1) | We believe organic revenue growth (non-GAAP) provides management and investors with useful supplemental information regarding our ongoing revenue performance and trends by presenting revenue growth excluding the impact of fluctuations in foreign exchange rates. | ||||||
RECONCILIATION OF NET INCOME (LOSS) ATTRIBUTABLE TO FMC STOCKHOLDERS (GAAP) TO RETURN ON INVESTED CAPITAL ("ROIC") NUMERATOR (NON-GAAP) AND ROIC (USING NON-GAAP NUMERATOR)(1) (Unaudited) | |||
Twelve Months Ended | |||
March 31, 2024 | |||
Net income (loss) attributable to FMC stockholders (GAAP) | $ 1,122.8 | ||
Interest expense, net, net of income taxes | 210.9 | ||
Corporate special charges (income) | 284.4 | ||
Income tax expense (benefit) on Corporate special charges (income) | (40.4) | ||
Adjustment for noncontrolling interest, net of tax on Corporate special charges (income) | 1.2 | ||
Discontinued operations attributable to FMC stockholders, net of income taxes | 99.5 | ||
Tax adjustments | (1,170.7) | ||
ROIC numerator (Non-GAAP) | $ 507.7 | ||
March 31, 2024 | March 31, 2023 | ||
Total debt | $ 4,335.7 | $ 4,212.6 | |
Total FMC stockholders' equity | 4,311.5 | 3,470.7 | |
Total debt and FMC stockholders' equity (GAAP) | $ 8,647.2 | $ 7,683.3 | |
ROIC denominator (2 yr average total debt and FMC stockholders' equity) | $ 8,165.3 | ||
ROIC (using Non-GAAP numerator) | 6.22 % | ||
(1) | We believe ROIC (non-GAAP) provides management and investors with useful supplemental information regarding our utilization of capital provided by both equity and debt as well as our working capital and free cash flow management. | ||||||
FMC CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited, in millions) | |||
March 31, 2024 | December 31, 2023 | ||
Cash and cash equivalents | $ 417.8 | $ 302.4 | |
Trade receivables, net of allowance of | 2,817.9 | 2,703.2 | |
Inventories | 1,587.1 | 1,724.6 | |
Prepaid and other current assets | 375.2 | 398.9 | |
Total current assets | $ 5,198.0 | $ 5,129.1 | |
Property, plant and equipment, net | 875.6 | 892.5 | |
Goodwill | 1,587.9 | 1,593.6 | |
Other intangibles, net | 2,432.9 | 2,465.1 | |
Deferred income taxes | 1,375.1 | 1,336.6 | |
Other long-term assets | 508.9 | 509.3 | |
Total assets | $ 11,978.4 | $ 11,926.2 | |
Short-term debt and current portion of long-term debt | $ 1,311.1 | $ 934.0 | |
Accounts payable, trade and other | 589.3 | 602.4 | |
Advanced payments from customers | 88.7 | 482.1 | |
Accrued and other liabilities | 691.5 | 684.8 | |
Accrued customer rebates | 669.3 | 480.9 | |
Guarantees of vendor financing | 80.4 | 69.6 | |
Accrued pensions and other postretirement benefits, current | 6.4 | 6.4 | |
Income taxes | 116.2 | 124.4 | |
Total current liabilities | $ 3,552.9 | $ 3,384.6 | |
Long-term debt, less current portion | $ 3,024.6 | $ 3,023.6 | |
Long-term liabilities | 1,068.0 | 1,084.6 | |
Equity | 4,332.9 | 4,433.4 | |
Total liabilities and equity | $ 11,978.4 | $ 11,926.2 | |
FMC CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited, in millions) | |||
Three Months Ended March 31, | |||
2024 | 2023 | ||
Cash provided (required) by operating activities of continuing operations | $ (142.9) | $ (851.3) | |
Cash provided (required) by operating activities of discontinued operations | (21.5) | (12.6) | |
Cash provided (required) by investing activities of continuing operations | (23.7) | (54.4) | |
Cash provided (required) by financing activities of continuing operations | 305.7 | 840.3 | |
Effect of exchange rate changes on cash | (2.2) | 0.4 | |
Increase (decrease) in cash and cash equivalents | $ 115.4 | $ (77.6) | |
Cash and cash equivalents, beginning of period | $ 302.4 | $ 572.0 | |
Cash and cash equivalents, end of period | $ 417.8 | $ 494.4 | |
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SOURCE FMC Corporation
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