Fiscal Year 2023 Diluted EPS of $7.73 and
Adjusted EPS of $5.38
Cabot Corporation (NYSE: CBT) today announced results for its
fourth quarter and fiscal year 2023.
Key Highlights
- Fiscal Year 2023 Diluted EPS of $7.73 and Adjusted EPS of
$5.38; record fiscal year Reinforcement Materials segment EBIT of
$482 million
- Fiscal fourth quarter diluted EPS increased 150% year-over-year
due to the partial release of a tax valuation allowance in the
quarter
- Fourth quarter adjusted EPS increased 6% year-over-year driven
by higher Reinforcement Materials segment EBIT
- Cash Flows from Operations of $138 million in the fiscal fourth
quarter driven by strong Reinforcement Materials segment EBIT
- Returned cash to shareholders of $73 million in the quarter
through $23 million in dividends and $50 million in share
repurchases
(In millions, except per share
amounts)
Three Months Ended
Twelve Months Ended
9/30/23
9/30/22
9/30/23
9/30/22
Net sales
$
965
$
1,112
$
3,931
$
4,321
Net income (loss) attributable to Cabot
Corporation
$
234
$
94
$
445
$
209
Net earnings (loss) per share attributable
to Cabot Corporation
$
4.10
$
1.64
$
7.73
$
3.62
Less: Certain items after tax per
share
$
2.45
$
0.09
$
2.35
$
(2.66)
Adjusted EPS
$
1.65
$
1.55
$
5.38
$
6.28
Sean Keohane, Cabot President and Chief Executive Officer
commented: "I am pleased that we were able to deliver adjusted EPS
of $1.65 in the fourth quarter, which represents a 6%
year-over-year improvement and the strongest quarter of our fiscal
year 2023. We delivered adjusted EPS of $5.38 for fiscal year 2023
despite lower demand in key end markets, a weak environment in
China, and significant levels of customer destocking. We
proactively navigated a challenging macro-environment by
implementing strict cost management measures and demonstrating
strong commercial execution to sustain robust margins. I am also
pleased with the strong cash performance in the fiscal year, where
we generated $595 million in operating cash flow. We used this
robust cash flow generation to maintain our assets, invest for
growth and return cash to shareholders. We paid $88 million in
dividends, including an 8% increase announced in May, and we
repurchased $98 million of shares. We also made significant strides
in our sustainability agenda with the launch of our EVOLVE®
Sustainable Solutions technology platform during the year, which we
believe presents an exciting opportunity to offer our customers
sustainable reinforcing carbons and other materials to meet their
needs for increased circularity.”
Keohane concluded, “In fiscal 2023, we continued to execute
against our Creating for Tomorrow strategy and advanced a number of
strategic initiatives. We believe the investments that we have made
throughout the year have laid the foundation for advantaged growth
in the future. I thank our dedicated team across the globe, as
their collective efforts during the fiscal year enabled us to
navigate through a weak macro-economic environment and emerge even
more resilient.”
Financial Detail
For the fourth quarter of fiscal 2023, net income attributable
to Cabot Corporation was $234 million ($4.10 per diluted common
share). Net income reflects an after-tax per share benefit from
certain items of $2.45. Adjusted EPS for the fourth quarter of
fiscal 2023 was $1.65 per share.
Segment Results
Reinforcement Materials – Fourth quarter fiscal 2023 EBIT
in Reinforcement Materials increased by $25 million compared to the
fourth quarter of fiscal 2022. The increase in EBIT was principally
driven by improved unit margins from better pricing and product mix
in our calendar year 2023 customer agreements. Volumes declined by
2% due to lower volumes in the Americas and EMEA, partially offset
by higher volumes in Asia, particularly in China.
Global and regional volume changes for Reinforcement Materials
for the fourth quarter of fiscal 2023 as compared to the same
quarter of the prior year are set forth in the table below:
Fourth Quarter
Year-over-Year Change
Global Reinforcement Materials
Volumes
(2%)
Asia
3%
Europe, Middle East, Africa
(4%)
Americas
(7%)
Performance Chemicals – Fourth quarter fiscal 2023 EBIT
in Performance Chemicals decreased by $13 million compared to the
fourth quarter of fiscal 2022 primarily due to lower unit margins
from a less favorable product mix in the specialty carbons and
fumed metal oxides product lines and pricing pressures in the fumed
metal oxides and battery materials product lines. The overall
impact of volumes on segment EBIT was slightly negative in the
quarter, as a decrease in volumes year-over-year in the fumed metal
oxides and inkjet product lines was partially offset by growth in
the specialty carbons, specialty compounds and battery materials
product lines.
Cash Performance – The Company ended the fourth
quarter of fiscal 2023 with a cash balance of $238 million. During
the fourth quarter of fiscal 2023, cash flows from operating
activities were a source of $138 million. Capital expenditures for
the fourth quarter of fiscal 2023 were $78 million. Additional uses
of cash during the fourth quarter included $23 million for the
payment of dividends and $50 million for share repurchases.
Taxes – During the fourth quarter of fiscal 2023, the
Company recorded a tax benefit of $118 million for an effective tax
rate of (93%). The provision reflected a $158 million net benefit
for non-GAAP tax adjustments primarily related to the partial
release of a valuation allowance on U.S. deferred tax assets. The
operating tax rate for fiscal year 2023 was 28%. We expect our
operating tax rate for fiscal 2024 to be in the range of 28% to
30%.
Outlook
Commenting on the outlook for the Company, Keohane said,
“Looking ahead to fiscal 2024, we expect the macro-economic
environment to remain challenging, particularly in the near-term.
Despite this challenging environment, we expect fiscal year 2024
adjusted earnings per share to be in the range of $6.30 to $6.80,
driven by continued growth in our Reinforcement Materials segment.
In addition, we anticipate strong operating cash flow driven by
robust EBITDA assuming constant feedstock costs.”
Keohane continued, “Regarding our business outlook, in
Reinforcement Materials, we anticipate volume growth in the low
single digits in fiscal 2024 along with higher pricing and improved
product mix in our 2024 calendar year customer agreements to drive
year-over-year growth in segment EBIT. In our Performance Chemicals
segment, we expect volumes overall to remain consistent with our
fiscal fourth quarter, with some differences across product lines,
and for margins to remain stable.”
Keohane concluded, “Going forward, we will continue to maintain
our focus on cash generation and disciplined and balanced approach
to capital allocation. We remain committed to investing in
high-confidence, high-return projects, especially in Battery
Materials. With a clear focus on executing our Creating for
Tomorrow strategy, we believe we are well positioned to deliver
significant value to our shareholders.”
Earnings Call
The Company will host a conference call with industry analysts
at 8:00 a.m. Eastern time on Tuesday, November 7, 2023. The call
can be accessed through Cabot’s investor relations website at
http://investor.cabot-corp.com
About Cabot Corporation
Cabot Corporation (NYSE: CBT) is a global specialty chemicals
and performance materials company headquartered in Boston,
Massachusetts. The company is a leading provider of reinforcing
carbons, specialty carbons, battery materials, engineered elastomer
composites, inkjet colorants, masterbatches and conductive
compounds, fumed metal oxides and aerogel. The Company regularly
posts important information on its website and encourages investors
and potential investors to consult the Cabot website,
cabotcorp.com, regularly.
Forward-Looking Statements – This earnings release
contains forward-looking statements. All statements that address
expectations or projections about the future, including with
respect to our expectations for our performance in fiscal year
2024, including our expectations for adjusted earnings per share
and operating cash flow, with respect to growth in our
Reinforcement Materials segment and the factors that we expect will
drive that growth for volumes and margins in our Performance
Chemicals segment, for our operating tax rate for fiscal 2024, and
the opportunities we expect to provide our customers with our
efforts under our EVOLVE Sustainable Solutions technology platform
are forward-looking statements. These statements are not guarantees
of future performance and are subject to risks, uncertainties,
potentially inaccurate assumptions, and other factors, some of
which are beyond our control and difficult to predict. If known or
unknown risks materialize, or should underlying assumptions prove
inaccurate, our actual results could differ materially from past
results and from those expressed or implied by forward-looking
statements. Important factors that could cause our results to
differ materially from those expressed or implied in the
forward-looking statements include, but are not limited to,
industry capacity utilization and competition from other specialty
chemical companies; safety, health and environmental requirements
and related constraints imposed on our business; regulatory and
financial risks related to climate change developments; volatility
in the price and availability of energy and raw materials,
including with respect to the Russian invasion of Ukraine; a
significant adverse change in a customer relationship or the
failure of a customer to perform its obligations under agreements
with us; failure to achieve growth expectations from new products,
applications and technology developments; failure to realize
benefits from acquisitions, alliances, or joint ventures or achieve
our portfolio management objectives; unanticipated delays in, or
increased cost of site development projects; negative or uncertain
worldwide or regional economic conditions and market opportunities,
including from trade relations, global health matters or
geo-political conflicts; litigation or legal proceedings; tax rates
and fluctuations in foreign currency exchange and interest rates;
and the accuracy of the assumptions we used in establishing
reserves for our share of liability for respirator claims. These
factors are discussed more fully in the reports we file with the
Securities and Exchange Commission (“SEC”), particularly under the
heading “Risk Factors” in our annual report on Form 10-K for our
fiscal year ended September 30, 2022, which is filed with the SEC
at www.sec.gov. We assume no obligation to provide revisions to any
forward-looking statements should circumstances change, except as
otherwise required by securities and other applicable laws.
Use of Non-GAAP Financial Measures
To supplement Cabot’s consolidated financial statements
presented on a generally accepted accounting principle (“GAAP”)
basis, the preceding discussion of our results and the accompanying
financial tables report Adjusted EPS, Total Segment EBIT, Total
Segment EBITDA, Adjusted EBITDA, our operating tax rate, Free Cash
Flow and Discretionary Free Cash Flow, all of which are non-GAAP
financial measures. These non-GAAP financial measures are not
computed in accordance with, or as an alternative to, GAAP, and the
definitions of these measures may not be comparable to those used
by other companies. Reconciliations of Adjusted EPS to net income
(loss) per share attributable to Cabot Corporation, the most
directly comparable GAAP financial measure, Total Segment EBIT,
Total Segment EBITDA, and Adjusted EBITDA to income (loss) from
continuing operations before income taxes and equity in earnings of
affiliated companies, the most directly comparable GAAP financial
measure of each such non-GAAP measure, operating tax rate to
effective tax rate, the most directly comparable GAAP financial
measure and Free Cash Flow and Discretionary Free Cash Flow to Cash
flow from operating activities, the most directly comparable GAAP
financial measure, are provided in the tables titled “Cabot
Corporation Certain Items and Reconciliation of Adjusted EPS and
Operating Tax Rate” and “Cabot Corporation Reconciliation of
Non-GAAP Financial Measures.”
Management believes these non-GAAP measures provide investors
with greater transparency to the information used by Cabot
management in its financial and operational decision-making, allow
investors to see Cabot’s results through the eyes of management,
and better enable Cabot’s investors to understand Cabot’s operating
performance and financial condition. In addition, adjusted EPS and
Discretionary Free Cash Flow are two of the financial measures used
to determine payouts under the Company’s executive incentive
compensation awards.
Adjusted EPS. In calculating Adjusted EPS, we exclude
from our net income (loss) attributable to Cabot Corporation items
of expense and income that management does not consider
representative of the Company’s business operations. We refer to
these items as “certain items.” Management believes excluding these
items facilitates operating performance comparisons from period to
period by eliminating differences caused by the existence and
timing of certain expense and income items that would not otherwise
be apparent on a GAAP basis and an evaluation of the Company’s
operating performance without the impact of these costs or
benefits.
The items of income and expense that we exclude from our
calculations of Adjusted EPS but that are included in our GAAP net
income (loss) per share, as applicable in a particular reporting
period, include, but are not limited to, the following:
- Asset impairment charges, which primarily include charges
associated with an impairment of goodwill, other long-lived assets
or assets held for sale.
- Charges related to the divestiture of our Purification
Solutions business, which include accelerated costs associated with
the change in control and employee incentive compensation.
- Legal and environmental reserves and matters, which consist of
costs or benefits for matters typically related to former
businesses or that are otherwise incurred outside of the ordinary
course of business.
- Global restructuring activities, which include costs or
benefits associated with cost reduction initiatives or plant
closures and are primarily related to (i) employee termination
costs, (ii) asset impairment charges associated with restructuring
actions, (iii) costs to close facilities, including environmental
costs and contract termination penalties, and (iv) gains realized
on the sale of land or equipment associated with restructured
plants or locations.
- Acquisition and integration-related charges, which include
transaction costs, redundant costs incurred during the period of
integration, and costs associated with transitioning certain
management and business processes to Cabot’s processes.
- Gains (losses) on sale of a business.
- Gain associated with the bargain purchase of a business.
- Gains realized on the sale of land.
- Argentina controlled currency devaluation loss relates to the
foreign exchange loss from government controlled currency
devaluations on our net monetary assets denominated in the
Argentine Peso.
Cabot does not provide an expected GAAP EPS range or
reconciliation of the Adjusted EPS range with an expected GAAP EPS
range because, without unreasonable effort, we are unable to
predict with reasonable certainty the matters we would allocate to
“certain items,” including unusual gains and losses, costs
associated with future restructurings, acquisition-related expenses
and litigation outcomes. These items are uncertain, depend on
various factors, and could have a material impact on GAAP EPS in
future periods.
Total Segment EBIT. Total segment EBIT reflects the sum
of EBIT from our two reportable segments. In calculating Total
segment EBIT we exclude from our income (loss) from continuing
operations before income taxes and equity in earnings of affiliated
companies, certain items and items that, because they are not
controlled by the business segments and primarily benefit corporate
objectives, are not allocated to our business segments, such as
interest expense and other corporate costs, which include
unallocated corporate overhead expenses such as certain corporate
salaries and headquarter expenses, plus costs related to corporate
projects and initiatives.
Total Segment EBITDA. Total Segment EBITDA is equal to
Total Segment EBIT (as defined above), but further adjusted for
depreciation and amortization.
Adjusted EBITDA. Adjusted EBITDA reflects Total Segment
EBITDA and is further adjusted for unallocated corporate costs,
which include unallocated corporate overhead expenses such as
certain corporate salaries and headquarter expenses, plus costs
related to corporate projects and initiatives.
Free Cash Flow. To calculate “Free Cash Flow” we deduct
Additions to property, plant and equipment from cash flow from
operating activities.
Discretionary Free Cash Flow. To calculate “Discretionary
Free Cash Flow” we deduct sustaining and compliance capital
expenditures and changes in Net Working Capital from cash flow from
operating activities.
Operating Tax Rate. Our “operating tax rate” is
calculated based upon management's forecast of the annual operating
tax rate for the fiscal year applied to adjusted pre-tax earnings.
The operating tax rate excludes income tax (expense) benefit on
certain items, discrete tax items and, on a quarterly basis the
timing of losses in certain jurisdictions. The income tax (expense)
benefit on certain items is determined using the applicable rates
in the taxing jurisdictions in which the certain items occurred and
includes both current and deferred income tax (expense) benefit
based on the nature of the certain items. Discrete tax items
include, but are not limited to, changes in valuation allowance,
uncertain tax positions, and other tax items, such as the tax
impact of legislative changes. Management believes that this
non-GAAP financial measure is useful supplemental information
because it helps our investors compare our tax rate year to year on
a consistent basis and to understand what our tax rate on current
operations would be without the impact of these items.
Cabot does not provide a forward-looking reconciliation of the
operating tax rate range with an effective tax rate range because,
without unreasonable effort, we are unable to predict with
reasonable certainty the matters we would allocate to “certain
items,” including unusual gains and losses, costs associated with
future restructurings, acquisition-related expenses and litigation
outcomes. These items are uncertain, depend on various factors, and
could have a material impact on the effective tax rate in future
periods.
Explanation of Terms Used
Product Mix. The term “product mix” refers to the mix of
types and grade of products sold or the mix of geographic regions
where products are sold, and the positive or negative impact this
has on the revenue or profitability of the business or segment.
Net Working Capital. The term “net working capital”
includes accounts receivable, inventory and accounts payable and
accrued expenses.
Fourth Quarter Earnings Announcement, Fiscal 2023
CABOT CORPORATION CONSOLIDATED STATEMENTS OF
OPERATIONS Periods ended September 30 Three
Months Twelve Months Dollars in millions, except per share amounts
(unaudited)
2023
2022
2023
2022
Net sales and other operating revenues
$
965
$
1,112
$
3,931
$
4,321
Cost of sales
740
892
3,092
3,436
Gross profit
225
220
839
885
Selling and administrative expenses
69
62
253
258
Research and technical expenses
14
14
57
55
Loss on sale of business and asset impairment charge
—
1
3
207
Gain on bargain purchase of a business
—
—
—
(24)
Income (loss) from operations
142
143
526
389
Other income (expense) Interest and dividend
income
9
4
31
11
Interest expense
(21)
(18)
(90)
(56)
Other income (expense)......
(3)
—
(16)
(9)
Total other income (expense)
(15)
(14)
(75)
(54)
Income (loss) before income taxes and equity in
earnings of affiliated companies
127
129
451
335
(Provision) benefit for income taxes
118
(29)
28
(102)
Equity in earnings of affiliated companies, net of tax
1
3
5
10
Net income (loss)
246
103
484
243
Net income (loss) attributable to noncontrolling interests
12
9
39
34
Net income (loss) attributable to Cabot Corporation
$
234
$
94
$
445
$
209
Diluted earnings (loss) per share of common stock
attributable to Cabot Corporation
$
4.10
$
1.64
$
7.73
$
3.62
Diluted weighted average common shares outstanding
56.1
56.8
56.5
56.9
CABOT CORPORATION SUMMARY RESULTS BY SEGMENT
Periods ended September 30 Three Months Twelve Months
Dollars in millions, except per share amounts (unaudited)
2023
2022
2023
2022
Sales (A) Reinforcement Materials
$
624
$
726
$
2,563
$
2,673
Performance Chemicals
306
343
1,225
1,388
Purification Solutions
—
—
—
97
Segment sales
930
1,069
3,788
4,158
Unallocated and other (B)
35
43
143
163
Net sales and other operating revenues
$
965
$
1,112
$
3,931
$
4,321
Segment Earnings Before Interest and Taxes (C)
Reinforcement Materials
$
134
$
109
$
482
$
408
Performance Chemicals
36
49
125
234
Purification Solutions
—
—
—
—
Total Segment Earnings Before Interest and Taxes
170
158
607
642
Unallocated and Other Interest expense
(21)
(18)
(90)
(56)
Certain items (D)
(22)
2
(29)
(183)
Unallocated corporate costs
(12)
(14)
(54)
(59)
General unallocated income (expense) (E)
13
4
22
1
Less: Equity in earnings of affiliated companies
1
3
5
10
Income (loss) before income taxes and equity in
earnings of affiliated companies
127
129
451
335
(Provision) benefit for income taxes (including tax certain
items)
118
(29)
28
(102)
Equity in earnings of affiliated companies
1
3
5
10
Net income (loss)
246
103
484
243
Net income (loss) attributable to noncontrolling interests
12
9
39
34
Net income (loss) attributable to Cabot Corporation
$
234
$
94
$
445
$
209
Diluted earnings (loss) per share of common stock
attributable to Cabot Corporation
$
4.10
$
1.64
$
7.73
$
3.62
Adjusted earnings (loss) per share (F)
$
1.65
$
1.55
$
5.38
$
6.28
Diluted weighted average common shares outstanding
56.1
56.8
56.5
56.9
(A) Beginning in fiscal 2023, the Company began allocating
energy center revenue to the applicable segment’s Sales. The
Company recast prior period financial information to conform to the
new presentation. The allocation of such revenue resulted in an
increase of $26 million and $98 million in the Reinforcement
Materials segment and $5 million and $16 million in the Performance
Chemicals segment, with an offsetting decrease in Unallocated and
Other revenue for the three months and twelve months ended
September 30, 2022, respectively. There was no impact to the
consolidated total Net sales and other operating revenues.
(B) Unallocated and other reflects royalties,
other by-product revenue, external shipping and handling fees, the
impact of the corporate adjustment for unearned revenue, and
discounting charges for certain Notes receivable. (C)
Segment EBIT is a measure used by Cabot's Chief Operating
Decision-Maker to measure consolidated operating results, assess
segment performance and allocate resources. Segment EBIT includes
equity in earnings of affiliated companies, royalty income, and
allocated corporate costs. (D) Details of Certain
items are presented in the Certain Items and Reconciliation of
Adjusted EPS and Operating Tax Rate table. (E) General
unallocated income (expense) consists of gains (losses) arising
from foreign currency transactions, net of other foreign currency
risk management activities, Interest and dividend income, the
profit or loss related to the corporate adjustment for unearned
revenue, and unrealized holding gains (losses) for investments.
(F) Adjusted EPS is a non-GAAP measure, and a
reconciliation of Adjusted EPS to GAAP EPS is presented in the
Certain Items and Reconciliation of Adjusted EPS and Operating Tax
Rate table.
CABOT CORPORATION CONSOLIDATED
STATEMENTS OF FINANCIAL POSITION September
30, September 30, Dollars in millions (unaudited)
2023
2022
Current assets: Cash and cash equivalents
$
238
$
206
Accounts and notes receivable, net of reserve for doubtful
accounts of $2 and $3
695
836
Inventories: Raw materials
148
182
Work in process
—
—
Finished goods
374
427
Other
63
55
Total inventories
585
664
Prepaid expenses and other current assets
108
114
Total current assets
1,626
1,820
Property, plant and equipment, net
1,412
1,270
Goodwill
134
129
Equity affiliates
20
20
Intangible assets, net
60
63
Deferred income taxes
180
45
Other assets
172
178
Total assets
$
3,604
$
3,525
CABOT CORPORATION CONSOLIDATED STATEMENTS OF FINANCIAL
POSITION September 30, September 30,
Dollars in millions, except share and per share amounts (unaudited)
2023
2022
Current liabilities: Short-term borrowings
$
174
$
347
Accounts payable and accrued liabilities
600
707
Income taxes payable
40
44
Current portion of long-term debt
8
7
Total current liabilities
822
1,105
Long-term debt
1,094
1,089
Deferred income taxes
50
65
Other liabilities
231
234
Stockholders' equity: Preferred stock: Authorized:
2,000,000 shares of $1 par value Issued and Outstanding: None and
none
—
—
Common stock: Authorized: 200,000,000 shares of $1 par
valueIssued: 55,379,636 and 56,385,963 sharesOutstanding:
55,243,804 and 56,248,559 shares
55
56
Less cost of 135,832 and 137,404 shares of common treasury
stock
(3)
(4)
Additional paid-in capital
—
1
Retained earnings
1,574
1,284
Accumulated other comprehensive income (loss)
(362)
(439)
Total Cabot Corporation stockholders' equity
1,264
898
Noncontrolling interests
143
134
Total stockholders' equity
1,407
1,032
Total liabilities and stockholders' equity
$
3,604
$
3,525
CABOT CORPORATION QUARTERLY RESULTS BY SEGMENT
Fiscal 2022 Fiscal 2023 Dollars in millions,
except per share amounts (unaudited) Dec. Q Mar. Q June Q Sept. Q
FY Dec. Q Mar. Q June Q Sept. Q
FY Sales
(A) Reinforcement Materials
$
563
$
654
$
730
$
726
$
2,673
$
643
$
672
$
624
$
624
$
2,563
Performance Chemicals
306
363
376
343
1,388
286
326
307
306
1,225
Purification Solutions
61
36
—
—
97
—
—
—
—
—
Segment sales
930
1,053
1,106
1,069
4,158
929
998
931
930
3,788
Unallocated and other (B)
38
39
43
43
163
36
35
37
35
143
Net sales and other operating revenues
$
968
$
1,092
$
1,149
$
1,112
$
4,321
$
965
$
1,033
$
968
$
965
$
3,931
Segment Earnings Before Interest and Taxes (C)
Reinforcement Materials
$
85
$
101
$
113
$
109
$
408
$
94
$
122
$
132
$
134
$
482
Performance Chemicals
52
70
63
49
234
29
28
32
36
125
Purification Solutions
—
—
—
—
—
—
—
—
—
—
Total Segment Earnings Before Interest and Taxes
137
171
176
158
642
123
150
164
170
607
Unallocated and Other Interest expense
(12)
(11)
(15)
(18)
(56)
(22)
(23)
(24)
(21)
(90)
Certain items (D)
(204)
7
12
2
(183)
(4)
(2)
(1)
(22)
(29)
Unallocated corporate costs
(14)
(16)
(15)
(14)
(59)
(15)
(16)
(11)
(12)
(54)
General unallocated income (expense) (E)
1
(1)
(3)
4
1
4
2
3
13
22
Less: Equity in earnings of affiliated companies
1
3
3
3
10
2
1
1
1
5
Income (loss) before income taxes and equity in earnings of
affiliated companies
(93)
147
152
129
335
84
110
130
127
451
—
—
—
—
(Provision) benefit for income taxes (including tax certain items)
12
(36)
(49)
(29)
(102)
(20)
(29)
(41)
118
28
Equity in earnings of affiliated companies
1
3
3
3
10
2
1
1
1
5
Net income (loss)
(80)
114
106
103
243
66
82
90
246
484
Net income (loss) attributable to noncontrolling interests
9
7
9
9
34
12
7
8
12
39
Net income (loss) attributable to Cabot Corporation
$
(89)
$
107
$
97
$
94
$
209
$
54
$
75
$
82
$
234
$
445
Diluted earnings (loss) per share of common stock
attributable to Cabot Corporation
$
(1.57)
$
1.84
$
1.69
$
1.64
$
3.62
$
0.93
$
1.29
$
1.43
$
4.10
$
7.73
Adjusted earnings (loss) per share (F)
$
1.29
$
1.69
$
1.73
$
1.55
$
6.28
$
0.98
$
1.33
$
1.42
$
1.65
$
5.38
Diluted weighted average common shares outstanding
56.8
57.1
56.8
56.8
56.9
56.7
56.8
56.5
$
56.1
56.5
(A) Beginning in the fiscal year 2023, the Company began
allocating energy center revenue to the applicable segment’s Sales.
The Company recast prior period financial information to conform to
the new presentation. (B) Unallocated and other
reflects royalties, other by-product revenue, external shipping and
handling fees, the impact of the corporate adjustment for unearned
revenue, and discounting charges for certain Notes receivable.
(C) Segment EBIT is a measure used by Cabot's Chief
Operating Decision-Maker to measure consolidated operating results,
assess segment performance and allocate resources. Segment EBIT
includes equity in earnings of affiliated companies, royalty
income, and allocated corporate costs. (D) Details of
certain items are presented in the Certain Items and Reconciliation
of Adjusted EPS and Operating Tax Rate table. (E) General
unallocated income (expense) consists of gains (losses) arising
from foreign currency transactions, net of other foreign currency
risk management activities, Interest and dividend income, the
profit or loss related to the corporate adjustment for unearned
revenue, and unrealized holding gains (losses) for investments.
(F) Adjusted EPS is a non-GAAP measure, and a reconciliation
of Adjusted EPS to GAAP EPS is presented in the Certain Items and
Reconciliation of Adjusted EPS and Operating Tax Rate table.
CABOT CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS Periods ended September 30 Three
Months Twelve Months Dollars in millions (unaudited)
2023
2022
2023
2022
Cash Flows from Operating Activities: Net
income (loss)
$
246
$
103
$
484
$
243
Adjustments to reconcile net income to cash provided by
operating activities: Depreciation and amortization
37
35
144
146
Other non-cash charges (gains), net
(149)
7
(135)
158
Cash dividends received from equity affiliates
—
—
2
1
Changes in assets and liabilities: Changes in certain
working capital items (A)
1
(41)
97
(431)
Changes in other assets and liabilities, net
3
1
3
(17)
Cash provided by (used in) operating activities
138
105
595
100
Cash Flows from Investing Activities:
Additions to property, plant and equipment
(78)
(90)
(244)
(211)
Proceeds from sale of business
—
—
6
79
Cash paid for acquisition of business
—
—
—
(9)
Other investing activities, net
3
3
24
23
Cash provided by (used in) investing activities
(75)
(87)
(214)
(118)
Cash Flows from Financing Activities: Change
in debt, net
42
42
(179)
298
Cash dividends paid to common stockholders
(23)
(21)
(88)
(84)
Other financing activities, net
(51)
(5)
(136)
(69)
Cash provided by (used in) financing activities
(32)
16
(403)
145
Effect of exchange rates on cash
(13)
(42)
54
(91)
Increase (decrease) in cash and cash equivalents
18
(8)
32
36
Cash and cash equivalents at beginning of period
220
214
206
170
Cash and cash equivalents at end of period
$
238
$
206
$
238
$
206
(A) Includes Accounts and notes receivable, Inventories, and
Accounts payable and accrued liabilities.
CABOT
CORPORATION CERTAIN ITEMS AND RECONCILIATION OF ADJUSTED EPS AND
OPERATING TAX RATE TABLE 1: DETAIL OF CERTAIN
ITEMS Periods ended September 30 Three Months Twelve Months
Dollars in millions, except per share amounts (unaudited)
2023
2022
2023
2022
Certain items before and after income
taxes Gain on bargain purchase of a business
$
― $ ―
$ ―
$
24
Gain on sale of land
—
—
1
17
Specialty Fluids divestiture related benefit
—
5
—
5
Employee benefit plan settlement and other charges
—
1
—
1
Loss on sale of business and asset impairment charge
—
(1)
(3)
(207)
Legal and environmental matters and reserves
(8)
—
(10)
(9)
Acquisition and integration-related charges
(2)
(2)
(4)
(6)
Purification Solutions divestiture related charges
—
—
—
(5)
Global restructuring activities
(4)
—
(4)
(3)
Argentina controlled currency
devaluation loss
(7)
—
(7)
—
Other certain items
(1)
(1)
(2)
—
Total certain items, pre-tax
(22)
2
(29)
(183)
Non-GAAP tax adjustments(A)
158
3
161
32
Total certain items after tax
$
136
$
5
$
132
$
(151)
Total certain items after tax per share impact
$
2.45
$
0.09
$
2.35
$
(2.66)
TABLE 2: CERTAIN ITEMS STATEMENT OF OPERATIONS LINE
ITEM Periods ended September 30 Three Months Twelve Months
Dollars in millions, Pre-Tax (unaudited)
2023
2022
2023
2022
Statement of Operations Line
Item (B) Gain on bargain
purchase of a business
$ ― $ ―
$ ―
$
24
Cost of sales
(6)
(2)
(10)
(9)
Selling and administrative expenses
(8)
5
(8)
9
Research and technical expenses
—
—
—
—
Other income (expense)
(8)
—
(8)
—
Loss on sale of business and asset impairment charge
—
(1)
(3)
(207)
Total certain items, pre-tax
$
(22)
$
2
$
(29)
$
(183)
TABLE 3: RECONCILIATION OF EFFECTIVE TAX RATE TO
OPERATING TAX RATE Three months ended September 30
2023
2022
Dollars in millions (unaudited) (Provision) / Benefit for Income
Taxes Rate (Provision) / Benefit for Income Taxes Rate
Effective Tax Rate
$
118
-93%
$
(29)
23%
Less: Non-GAAP tax adjustments(A)
158
3
Operating tax rate (C) (D)
$
(40)
27%
$
(32)
25%
Twelve months ended September 30
2023
2022
Dollars in millions (unaudited) (Provision) / Benefit for Income
Taxes Rate (Provision) / Benefit for Income Taxes Rate
Effective Tax Rate
$
28
-6%
$
(102)
30%
Less: Non-GAAP tax adjustments(A)
161
32
Operating tax rate (C) (D)
$
(133)
28%
$
(134)
26%
TABLE 4: RECONCILIATION OF ADJUSTED EPS BY QUARTER
FOR FISCAL 2023 and FISCAL 2022 Fiscal 2023 (E) Periods
ended (unaudited) Dec. Q Mar. Q June Q Sept. Q FY 2023
Reconciliation of Adjusted EPS to GAAP EPS Net
income (loss) per share attributable to Cabot Corporation
$
0.93
$
1.29
$
1.43
$
4.10
$
7.73
Less: Certain items after tax per share
(0.05)
(0.04)
0.01
2.45
2.35
Adjusted earnings (loss) per share
$
0.98
$
1.33
$
1.42
$
1.65
$
5.38
Fiscal 2022 (E) Periods ended (unaudited) Dec. Q Mar.
Q June Q Sept. Q FY 2022
Reconciliation of
Adjusted EPS to GAAP EPS Net income (loss) per share
attributable to Cabot Corporation
$
(1.57)
$
1.84
$
1.69
$
1.64
$
3.62
Less: Certain items after tax per share
(2.86)
0.15
(0.04)
0.09
(2.66)
Adjusted earnings (loss) per share
$
1.29
$
1.69
$
1.73
$
1.55
$
6.28
(A) Non-GAAP tax adjustments are made to arrive at the
operating tax provision. It includes the income tax (expense)
benefit on certain items, discrete tax items, and, on a quarterly
basis the timing of losses in certain jurisdictions. The income tax
(expense) benefit on certain items is determined using the
applicable rates in the taxing jurisdictions in which the certain
items occurred and includes both current and deferred income tax
(expense) benefit based on the nature of the certain items.
Discrete tax items include, but are not limited to, changes in
valuation allowance, uncertain tax positions, and other tax items,
such as the tax impact of legislative changes and tax accruals on
historic earnings due to changes in indefinite reinvestment
assertions. (B) This table indicates the line items where
certain items are recorded in the Consolidated Statements of
Operations. (C) The operating tax rate is calculated based upon
management's forecast of the annual operating tax rate for the
fiscal year applied to adjusted pre-tax earnings. The operating tax
rate excludes income tax (expense) benefit on certain items,
discrete tax items and, on a quarterly basis the timing of losses
in certain jurisdictions. (D) Our operating tax rate for fiscal
2024 is expected to be in the range of 28% to 30% (E) Per share
amounts are calculated after tax.
CABOT CORPORATION
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Fiscal 2023 (A) Dec. Q Mar. Q June Q Sept. Q FY 2023
Reconciliation of Adjusted EPS to GAAP
EPS Net income (loss) per share attributable to Cabot
Corporation
$
0.93
$
1.29
$
1.43
$
4.10
$
7.73
Less: Certain items after tax per share
(0.05)
(0.04)
0.01
2.45
2.35
Adjusted earnings (loss) per share
$
0.98
$
1.33
$
1.42
$
1.65
$
5.38
Fiscal 2022 (A) Dec. Q Mar. Q June Q Sept. Q FY 2022
Reconciliation of Adjusted EPS to GAAP
EPS Net income (loss) per share attributable to Cabot
Corporation
$
(1.57)
$
1.84
$
1.69
$
1.64
$
3.62
Less: Certain items after tax per share
(2.86)
0.15
(0.04)
0.09
(2.66)
Adjusted earnings (loss) per share
$
1.29
$
1.69
$
1.73
$
1.55
$
6.28
(A) Per share amounts are calculated after tax.
Dollars in millions
Fiscal 2023 Dec. Q Mar. Q June Q Sept. Q
FY 2023
Reconciliation of Total Segment
EBIT, Total Segment EBITDA and Adjusted EBITDA to Net Income and
Segment EBITDA Margin Net income (loss) attributable
to Cabot Corporation
$
54
$
75
$
82
$
234
$
445
Net income (loss) attributable to noncontrolling interests
12
7
8
12
39
Equity in earnings of affiliated companies, net of tax
(2)
(1)
(1)
(1)
(5)
Provision (benefit) for income taxes
20
29
41
(118)
(28)
Income (loss) before income taxes and equity in earnings of
affiliated companies
$
84
$
110
$
130
$
127
$
451
Interest expense
22
23
24
21
90
Certain items
4
2
1
22
29
Unallocated corporate costs
15
16
11
12
54
General unallocated (income) expense
(4)
(2)
(3)
(13)
(22)
Less: Equity in earnings of affiliated companies
(2)
(1)
(1)
(1)
(5)
Total Segment EBIT
$
123
$
150
$
164
$
170
$
607
Depreciation and amortization excluding corporate depreciation
34
36
36
36
142
Total Segment EBITDA
$
157
$
186
$
200
$
206
$
749
Less: Unallocated corporate costs before corporate depreciation
15
16
11
12
54
Adjusted EBITDA
$
142
$
170
$
189
$
194
$
695
Dollars in millions Dec. Q Mar. Q June Q Sept. Q FY 2023
Reinforcement Materials EBIT
$
94
$
122
$
132
$
134
$
482
Reinforcement Materials Depreciation and amortization
17
18
17
18
70
Reinforcement Materials EBITDA
$
111
$
140
$
149
$
152
$
552
Reinforcement Materials Sales
$
643
$
672
$
624
$
624
$
2,563
Reinforcement Materials EBITDA Margin
17%
21%
24%
24%
22%
Dollars in millions Dec. Q Mar. Q June Q Sept. Q FY 2023
Performance Chemicals EBIT
$
29
$
28
$
32
$
36
$
125
Performance Chemicals Depreciation and amortization
17
18
19
18
72
Performance Chemicals EBITDA
$
46
$
46
$
51
$
54
$
197
Performance Chemicals Sales
$
286
$
326
$
307
$
306
$
1,225
Performance Chemicals EBITDA Margin
16%
14%
17%
18%
16%
Dollars in millions
Fiscal 2023 Reconciliation of Free Cash Flow and Discretionary Free
Cash Flow to Cash Flow from Operating Activities Dec. Q
Mar. Q June Q Sept. Q FY 2023
Cash flow from operating
activities (B)
$
52
$
162
$
243
$
138
$
595
Less: Additions to property, plant and equipment
35
51
80
78
244
Free cash flow
$
17
$
111
$
163
$
60
$
351
Plus: Additions to property, plant and equipment
35
51
80
78
244
Less: Changes in net working capital (C)
(34)
59
71
1
97
Less: Sustaining and compliance capital expenditures
23
27
44
49
143
Discretionary free cash flow
$
63
$
76
$
128
$
88
$
355
(B) As provided in the Condensed Consolidated Statements of
Cash Flows. (C) Defined as changes in accounts receivable,
inventory and accounts payable and accrued liabilities as presented
on the Condensed Consolidated Statements of Cash Flows.
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Investor Contact: Steve Delahunt (617) 342-6255
Grafico Azioni Cabot (NYSE:CBT)
Storico
Da Ago 2024 a Set 2024
Grafico Azioni Cabot (NYSE:CBT)
Storico
Da Set 2023 a Set 2024