Ashland Global Holdings Inc. (NYSE: ASH) today provided an update
for preliminary fiscal 2022 first-quarter financial results and
maintained its outlook for fiscal year 2022 results. Additional
information regarding first-quarter fiscal 2022 earnings will be
shared during a conference call webcast with securities analysts on
Wednesday February 2, 2022.
Preliminary fiscal 2022 first-quarter
financial results
Ashland’s financial results during the quarter
reflected previously communicated key drivers:
- Continued strong end-market demand.
- Persistent supply-chain and labor-availability challenges
impacting shipments and on-time order delivery.
- Lag impact on cost-inflation recovery from pricing
actions.
Sales were approximately $512 million, up 9
percent versus the prior-year period. However, continued
supply-chain and labor-shortage challenges inhibited the company’s
ability to meet strong overall customer demand. As a result,
approximately $20 million of confirmed orders were delayed in late
December with the majority being shipped in early January.
Additionally, the company continues to carry a large backlog of
unconfirmed orders it cannot commit to supply at this time.
Ashland expects income from continuing
operations during the first fiscal quarter of approximately $32
million, or approximately $0.55 per diluted share. Adjusted
earnings from continuing operations excluding intangibles
amortization are expected to be approximately $51 million, or $0.88
per diluted share. Net income (including discontinued operations)
is expected to be approximately $48 million.
Ashland’s Adjusted EBITDA is expected to be
approximately $106 million, up 5 percent versus prior year driven
by higher sales, but partially offset by the lag in price versus
cost-inflation recovery and the temporary government-imposed
shutdown of the plant in Nanjing, China.
For the full-year outlook, the company remains
focused on the visibility it has and the things it can
control. Ashland expects the current COVID impact to abate,
enabling continued end-market demand recovery. Pricing actions the
company has taken and continues to take should result in margin
normalization. Logistics and transportation expectations remain
pragmatic with only marginal improvement expected during the fiscal
year. The cost-inflation outlook and the need for future
pricing actions remain the greatest areas of uncertainty. As
such, based on current inflation and pricing expectations, the
company’s financial outlook for sales in the range of $2.25 billion
to $2.35 billion and Adjusted EBITDA in the range of $550 million
to $570 million is unchanged.
“We are encouraged by the strong demand in each
of our segments and the disciplined pricing actions being
demonstrated by our commercial teams,” said Guillermo Novo,
chairman and chief executive officer, Ashland. “The Ashland team is
executing well on the aspects of the business that are within our
control, especially pricing in a widespread inflationary
environment. The combined impact of the delayed orders, continued
cost-inflation escalation and the temporary government-imposed
shutdown of our facility in Nanjing, China are expected to result
in earnings for the quarter that are below our original
expectations.”
“We expect underlying demand to remain strong
and continue to take actions to build inventories to mitigate
supply-chain and shipping challenges,” continued Novo.
“Pricing actions should cover current cost inflation and we are
ready to take further action to recover any additional cost
inflation. Assuming end-market demand remains strong and we don’t
experience increased inflationary pressure in raw-material,
freight, energy and other costs, we continue to expect fiscal-year
sales and Adjusted EBITDA to be within the previously communicated
ranges. If cost inflation continues to escalate and we experience
additional lag impact following pricing actions, our outlook may
have to be updated. I look forward to discussing our results and
outlook in more detail on the upcoming call with securities
analysts.”
The information in this release is preliminary,
based upon information available at the time of this news release,
and actual results may differ.
Conference Call WebcastAshland
plans to issue its first-quarter earnings release at approximately
5 p.m. ET on Tuesday, February 1, 2022. The company’s live webcast
with securities analysts will include an executive summary and
detailed remarks. The live webcast will take place at 9 a.m. ET on
Wednesday, February 2, 2022. Simultaneously, the company will post
a slide presentation in the Investor Relations section of its
website at http://investor.ashland.com.
Among those participating in the webcast
presentation will be:
- Guillermo Novo, chairman and chief executive officer.
- Kevin Willis, senior vice president and chief financial
officer.
- Seth Mrozek, director of investor relations.
The webcast and supporting materials will be
accessible through the Investor Relations section of Ashland's
website at http://investor.ashland.com. Following the live event,
an archived version of the webcast and supporting materials will be
available on the Ashland website for 12 months.
Use of Non-GAAP MeasuresAshland
believes that by removing the impact of depreciation and
amortization and excluding certain non-cash charges, amounts spent
on interest and taxes and certain other charges that are highly
variable from year to year, adjusted EBITDA provides Ashland’s
investors with performance measures that reflect the impact to
operations from trends in changes in sales, margin and operating
expenses, providing a perspective not immediately apparent from net
income. The adjustments Ashland makes to derive the non-GAAP
measure of adjusted EBITDA exclude items which may cause short-term
fluctuations in net income and which Ashland does not consider to
be the fundamental attributes or primary drivers of its business.
Adjusted EBITDA provides disclosure on the same basis as that used
by Ashland’s management to evaluate financial performance on a
consolidated and reportable segment basis and provide consistency
in our financial reporting, facilitate internal and external
comparisons of Ashland’s historical operating performance and its
business units, and provide continuity to investors for
comparability purposes.
Key items, which are set forth on Table 2
accompanying this release, are defined as financial effects from
significant transactions that, either by their nature or amount,
have caused short-term fluctuations in net income and/or operating
income, which Ashland does not consider to most accurately reflect
Ashland’s underlying business performance and trends.
Further, Ashland believes that providing supplemental information
that excludes the financial effects of these items in the financial
results will enhance the investor’s ability to compare financial
performance between reporting periods.
Adjusted diluted earnings per share is a
performance measure used by Ashland and is defined by Ashland as
earnings (loss) from continuing operations, adjusted for identified
key items and divided by the number of outstanding diluted shares
of common stock. Ashland believes this measure provides
investors additional insights into operational performance by
providing earnings and diluted earnings per share metrics that
exclude the effect of the identified key items and tax specific key
items.
Adjusted diluted earnings per share, excluding
intangibles amortization expense metric enables Ashland to
demonstrate the impact of non-cash intangibles amortization expense
on earnings per share, in addition to key items previously
mentioned. Ashland’s management believe this presentation is
helpful to illustrate how previous acquisitions impact applicable
period results.
About Ashland
Ashland (NYSE: ASH) is a global, consumer market-focused additives
and specialty ingredients company that is responsibly solving for a
better world. Through science and a conscious and proactive mindset
for sustainability, we serve customers in pharmaceutical, personal
care, architectural coatings, construction, energy, food, beverage,
and nutraceuticals. At Ashland, we are approximately 3,800*
passionate, tenacious solvers who thrive on developing practical,
innovative, and elegant solutions to complex problems for customers
in more than 100 countries. Visit ashland.com and
ashland.com/sustainability to learn more.
Forward-Looking Statements This
news release contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended and
Section 21E of the Securities Exchange Act of 1934, as amended.
Ashland has identified some of these forward-looking statements
with words such as “anticipates,” “believes,” “expects,”
“estimates,” “is likely,” “predicts,” “projects,” “forecasts,”
“objectives,” “may,” “will,” “should,” “plans” and “intends” and
the negative of these words or other comparable terminology.
Ashland may from time to time make forward-looking statements in
its annual reports, quarterly reports and other filings with the
SEC, news releases and other written and oral communications. These
forward-looking statements are based on Ashland’s expectations and
assumptions, as of the date such statements are made, regarding
Ashland’s future operating performance, financial condition and
expected effects of the COVID-19 pandemic on Ashland’s business,
operating cash flow and liquidity, as well as the economy and other
future events or circumstances. These statements include but may
not be limited to Ashland’s expectations regarding its ability to
drive sales and earnings growth and realize further cost
reductions.
Ashland’s expectations and assumptions include,
without limitation, internal forecasts and analyses of current and
future market conditions and trends, management plans and
strategies, operating efficiencies and economic conditions (such as
prices, supply and demand, cost of raw materials, and the ability
to recover raw-material cost increases through price increases),
and risks and uncertainties associated with the following: the
impact of acquisitions and/or divestitures Ashland has made or may
make (including the possibility that Ashland may not realize the
anticipated benefits from such transactions); Ashland’s substantial
indebtedness (including the possibility that such indebtedness and
related restrictive covenants may adversely affect Ashland’s future
cash flows, results of operations, financial condition and its
ability to repay debt); severe weather, natural disasters, public
health crises (including the current COVID-19 pandemic), cyber
events and legal proceedings and claims (including product recalls,
environmental and asbestos matters); the effects of the COVID-19
pandemic on the geographies in which we operate, the end markets we
serve and on our supply chain and customers, and without
limitation, risks and uncertainties affecting Ashland that are
described in Ashland’s most recent Form 10-K (including Item 1A
Risk Factors) filed with the SEC, which is available on Ashland’s
website at http://investor.ashland.com or on the SEC’s website at
http://www.sec.gov. Various risks and uncertainties may cause
actual results to differ materially from those stated, projected or
implied by any forward-looking statements. The extent and duration
of the COVID-19 pandemic on our business and operations is
uncertain. Factors that will influence the impact on our business
and operations include the duration and extent of the pandemic, the
extent of imposed or recommended containment and mitigation
measures, and the general economic consequences of the pandemic.
Ashland believes its expectations and assumptions are reasonable,
but there can be no assurance that the expectations reflected
herein will be achieved. Unless legally required, Ashland
undertakes no obligation to update any forward-looking statements
made in this news release whether as a result of new information,
future events or otherwise.
1 Financial results are preliminary until
Ashland’s Form 10-Q is filed with the SEC.
* Reflects employee base following the planned
sale in 2022 of performance adhesives.
™ Trademark, Ashland or its subsidiaries,
registered in various countries.
FOR FURTHER INFORMATION:
Investor
Relations:
Media Relations:Seth A.
Mrozek
Carolmarie C. Brown+1 (302)
594-5010
+1 (302)
995-3158samrozek@ashland.com
ccbrown@ashland.com
- Q1 2022 Earnings Update with Financial Tables - 20220118
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