PQ Group Reports Fourth Quarter and Full Year 2019 Results;
$268 million Cash from Operations leads to $215 million debt repayment
Sales of $352.4 million for the fourth quarter and $1,567.1 million for the year;
Net income of $19.1 million with diluted EPS of $0.14 and Adjusted net income of $18.0 million with Adjusted diluted EPS of $0.13 for the quarter; Net income of $79.5 million with diluted EPS of $0.59 and Adjusted net income of $125.2 million with Adjusted diluted EPS of $0.92 for the year;
Adjusted EBITDA of $103.1 million for the quarter and $474.3 million for the year; Adjusted EBITDA margin of 27.3% for the year expanded 100 basis points;
Net cash provided by operating activities of $267.7 million and Adjusted free cash flow of $166.2 million for the year;
Repaid debt of $215 million and reduced leverage ratio to 3.9x at year-end;
Launched transformation of the Performance Chemicals business focusing on future efficiency and growth
The financial results and outlook include non-GAAP financial measures. These non-GAAP measures are more fully described and are reconciled from the respective measures determined under GAAP in “Presentation of Non-GAAP Financial Measures” and the attached appendix tables.
MALVERN, PA, February 20, 2020 -- PQ Group Holdings Inc. (NYSE:PQG) (“PQ” or the “Company”) reported results for the fourth quarter and year ended December 31, 2019. For the fourth quarter, sales of $352.4 million declined 7.3% from the fourth quarter of 2018. Net income was $19.1 million with $0.14 diluted EPS and Adjusted net income was $18.0 million with $0.13 Adjusted diluted EPS. Adjusted EBITDA was $103.1 million. For the year, sales were $1,567.1 million, a decrease of 2.6% over 2018. Net income was $79.5 million with $0.59 diluted EPS. Adjusted net income was $125.2 million with $0.92 Adjusted diluted EPS. Adjusted EBITDA was $474.3 million.
“We had a better than expected finish to 2019 driven by the excellent performance of our Catalysts business in the fourth quarter,” commented Belgacem Chariag, PQ Chairman, President and Chief Executive Officer. “For the year, our Catalysts and Performance Materials business segments delivered outstanding results leading to a solid financial outcome. Strong commercial execution and improved capital efficiency coupled with asset monetizations drove a record $166 million of Adjusted free cash flow, ahead of our guidance. This enabled us to repay $215 million of debt and reduce our leverage ratio by more than one-half turn, in line with our commitment.”
Review of Segment Results
For the quarter ended December 31, 2019, sales of $105.7 million decreased 11.5% versus the same period in 2018 largely on the pass-through of $7 million of lower sulfur pricing coupled with lower volumes from unplanned customer outages and weaker demand for virgin sulfuric acid. Adjusted EBITDA of $41.9 million declined 16.4% on lower volumes. The prior year period included a gain of $4.0 million related to an insurance recovery.
For the year ended December 31, 2019, sales of $447.1 million decreased 1.9% versus the same period in 2018 due to lower volumes from unplanned customer outages, softer demand for virgin sulfuric acid and pass-through of lower sulfur pricing, offset by higher average pricing from the roll-off of a below-market contract. Adjusted EBITDA of $175.6 million was in line with prior year, as favorable pricing offset lower volumes.
PQ Group Holdings Fourth Quarter and Year 2019 Earnings Release