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FORT LAUDERDALE, FL – Element Solutions reported electronics net sales increased 1% to $269 million. Organic net sales decreased 2%.

Adjusted EBITDA for the segment was $67 million, an increase of 18%. On a constant currency basis, adjusted EBITDA increased 21%.

The specialty chemicals company reported total first quarter revenue of $452.6 million, down 1.6% year-over-year. Net income was $8.6 million, compared to a loss of $4 million in the same period last year. Total adjusted EBITDA was $110 million, an increase of 14% year-over-year.

First quarter cash flow from operating activities was $61 million, and free cash flow was $51 million.

Element is the parent company of MacDermid Alpha and Kester.

“As we reflect on the first quarter of 2020, Element Solutions sends its thoughts to those impacted by Covid-19 and its thanks to those on the front lines battling this pandemic,” said Benjamin Gliklich, CEO. “While our topline declined 3% organically, adjusted EBITDA grew 14% to $110 million as margins expanded by more than 300 basis points. The topline suffered as business slowed, primarily due to Covid-19 in Asia, where the demand impact was concentrated this quarter. This was partially offset by strong sales in several of our end markets benefiting from robust secular tailwinds or, in some cases, demand in anticipation of potential shutdowns in Europe and the Americas. Continued cost discipline and the benefit of favorable mix drove our adjusted EBITDA growth. Today, all our facilities are open.

“So far during the second quarter, many of our customers’ supply chains have largely shut down in the Americas and Europe, and economic indicators are increasingly negative. However, we believe our variable cost model and diversification should preserve relatively sustainable levels of profitability and cash flow generation. We expect adjusted EBITDA in the second quarter of between $70 million and $75 million, which, if current economic conditions persist into the second half of this year, should be our baseline expectations for third quarter adjusted EBITDA as well. Should the environment improve more rapidly or robustly, we believe there is meaningful upside to this baseline. However, the unknowable impact of Covid-19 makes it difficult to forecast. In all cases, we expect to continue to outperform against our end-markets and generate strong free cash flow, as we have historically.”

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