Brine unit

Albemarle Corporation's brine recovery unit in Magnolia.

Albemarle Corporation has announced its results for the third quarter ended September 30.

Third Quarter 2019 Highlights

(Based on year-over-year comparisons unless otherwise noted)

-- Net sales of $879.7 million increased 14 percent, excluding foreign exchange impact of 1 percent, largely driven by strong volume and favorable pricing.

-- Earnings were $1.46 per diluted share, an increase of 22 percent.

-- Adjusted EPS were $1.53 per diluted share, an increase of 17 percent.

-- Adjusted EBITDA was $254.4 million, an increase of 8 percent.

The company noted the following major developments during the quarter.

-- Completed previously announced lithium joint venture with Mineral Resources Limited on Oct. 31, 2019; funded Wodgina mine project and other general corporate projects with $1 billion, borrowed from new $1.2 billion unsecured credit facility

-- Previously announced company's full year 2019 adjusted diluted EPS outlook is $6-$6.20 from $6.25-$6.65.

-- Initiating cost management program targeting over $100 million in savings over a two-year period

"During the third quarter, Albemarle grew net sales by 14 percent, adjusted EBITDA by 12 percent, and adjusted earnings per share by 22 percent over the prior year, excluding currency impacts, due to solid growth across all businesses," said Luke Kissam, Albemarle CEO. "We have recently made several strategic decisions to further position Albemarle for long-term success and remain confident in the long-term growth prospects of our business."

Net sales increased 14 percent, in constant currencies, due to increased volume in all reportable segments and favorable pricing in Lithium and Bromine Specialties.

The company's earnings increased as a result of earnings growth from each of the businesses, lower interest and financing expenses, and a lower effective tax rate. The increase was partially offset by unfavorable currency exchange, higher corporate costs for professional services, and increased depreciation and amortization due to increased capital projects put into service.

Net sales increased 14 percent, in constant currencies, due to increased volume in all reportable segments and favorable pricing in Lithium and Bromine Specialties.

The company's earnings increased as a result of earnings growth from each of the businesses, lower interest and financing expenses, and a lower effective tax rate. The increase was partially offset by unfavorable currency exchange, higher corporate costs for professional services, and increased depreciation and amortization due to increased capital projects put into service.

Lithium segment net sales were $330.4 million, against Q3 2018’s $270.9 million.

Net sales and adjusted EBITDA growth were driven by increased volume and slightly favorable pricing of 1%, which more than offset deferred shipments due to disruption caused by Typhoon Tapah in late September. As previously communicated, impacted volume is expected to be fully recovered in the fourth quarter.

Net sales reflects unfavorable currency exchange of 1%. Adjusted EBITDA reflects favorable currency exchange of 4% resulting from a weaker Chilean Peso.

Cost of goods sold increased, mainly due to higher tolling product costs to meet customer commitments and address operating issues in La Negra, Chile.

Out-of-period non-cash expense of $7.0 million recorded in the third quarter of 2019 in cost of goods sold was due to an adjustment of lithium carbonate inventory values from the second quarter of 2019.

Bromine Specialties segment net sales were $256.3 million, against Q3 2018’s $232.6 million.

Net sales and adjusted EBITDA growth reflects favorable price impacts and increased volume, more than offsetting unfavorable currency exchange of 1 percent.

Catalyst segment sales were $261.3 million, against Q3 2018’s $251.1 million.

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