PQ Group Reports Solid First Quarter 2020 Results; Provides COVID-19 update
▪Sales of $361.6 million increased 0.7%, or 2.3% on constant currency basis;
▪Net income of $0.2 million with diluted EPS of $0.00; Adjusted net income of $21.7 million with Adjusted diluted EPS of $0.16;
▪Adjusted EBITDA of $103.1 million increased 2.1%, or 3.3% on a constant currency basis; Adjusted EBITDA margin of 26.2%;
▪Term Loan and Asset Based Lending facilities repriced and extended; and
▪Liquidity of $236.3 million, including cash on hand of $107.7 million at March 31, 2020
MALVERN, PA, May 5, 2020 -- PQ Group Holdings Inc. (NYSE:PQG) (“PQ” or the “Company”) reported results for the first quarter ended March 31, 2020. Sales of $361.6 million were up 0.7% versus the same period in 2019, or 2.3% on a constant currency basis, largely benefiting from volume growth in Catalysts, Performance Materials and Refining Services. Net income was $0.2 million with $0.00 diluted EPS, which includes a loss impact of ($7.5 million) with ($0.06) diluted EPS related to the Performance Materials asset swap transaction. Adjusted net income was $21.7 million with $0.16 Adjusted diluted EPS. Adjusted EBITDA was $103.1 million, up 2.1%, or 3.3% on a constant currency basis, largely on higher sales volumes. Adjusted EBITDA margin was 26.2%.
“We had a solid start to the year, delivering volume growth from three of our four business segments led by North America highway safety in Performance Materials and continued polyolefin growth in Catalysts,” commented Belgacem Chariag, PQ Chairman, President and Chief Executive Officer. “As for the balance of the year, the COVID-19 pandemic has created significant demand uncertainty. We believe our aggressive response, business diversification and financial flexibility position PQ well to navigate through this crisis.”
Review of Segment Results
Sales of $100.7 million decreased 4.8% versus the same period in 2019, largely on pass-through of lower sulfur pricing which more than offset higher demand for virgin sulfuric acid. Adjusted EBITDA of $37.2 million was down 6.3% on higher raw material usage and production costs.
Silica Catalyst sales of $24.9 million increased 56.6%, or 57.9% on a constant currency basis, versus the same period in 2019, largely driven by continued strong demand for polyolefin catalysts and timing for methyl methacrylate sales. Zeolyst JV sales rose 9.6% on a normalized demand level for emission control catalysts. Adjusted EBITDA of $22.7 million increased 25.4%, or 26.0% on a constant currency basis, on higher sales volumes.
Sales of $65.5 million increased 7.2%, or 9.5% on a constant currency basis. Adjusted EBITDA of $13.5 million increased 28.6%, or 29.5% on a constant currency basis versus the same period in 2019, due to increased demand for North American highway safety products coupled with favorable weather conditions.
Sales of $174.3 million decreased 3.4%, or 1.1% on a constant currency basis, versus the same period in 2019 on slower global demand for detergents and personal care products in Latin America. Adjusted EBITDA of $40.5 million decreased 5.2%, or 2.8% on a constant currency basis, due to lower sales volumes.
PQ Group Holdings First Quarter 2020 Earnings Release
The following information was filed by Pq Group Holdings Inc. (PQG) on Tuesday, May 5, 2020 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.