PRNewswire/ -- Kraton Corporation (NYSE: KRA), a leading global sustainable producer of specialty polymers and high-value biobased products derived from pine wood pulping co-products, announces financial results for the quarter ended March 31, 2020.
FIRST QUARTER 2020 SUMMARY
First quarter 2020 results reflect the benefit of geographic and end-market diversification, with no material impact associated with COVID-19 during the quarter. Our plants continued to operate at normal capacities, and our supply chain remained largely intact, with adequate availability of key raw materials.
First quarter consolidated net income of $209.0 million, compared to $13.6 million in the first quarter of 2019.
First quarter consolidated Adjusted EBITDA(1) of $77.9 million, down 12.9% compared to the first quarter of 2019.
Polymer segment operating income of $17.9 million, up 93.8% compared to the first quarter of 2019, and Adjusted EBITDA(1) of $51.2 million, up 6.3% compared to $48.2 million in the first quarter of 2019.
Chemical segment operating income of $10.3 million, down 60.1% compared to the first quarter of 2019, and Adjusted EBITDA(1) of $26.7 million, down 35.3% compared to $41.3 million in the first quarter of 2019.
In connection with the sale of our Cariflex business on March 6, 2020, during the first quarter, consolidated debt was reduced by $378.8 million. Consolidated Net Debt(1) excluding the effect of foreign currency was reduced by $484.6 million.
$350 million of liquidity at quarter end, comprised of $150 in cash and approximately $200 million of borrowing availability under the $250 million ABL Facility.
"Our first core value at Kraton is Safety," said Kevin M. Fogarty, Kraton's President and Chief Executive Officer. "In today's COVID-19 world, we have taken extraordinary steps to ensure the health and safety of all our employees globally. Approximately half our colleagues today continue to work remotely, while those essential to operate our polymer and chemical plants and innovation centers globally are taking additional cautious measures to mitigate any possible exposure to the coronavirus. We are grateful that because of these actions we undertook, first in China, and later extending across our global network, we have had very few confirmed COVID-19 cases. Moreover, our dedicated colleagues continue to keep our global business fully operational, supplying customers in all regions, in many cases with chemical and polymer raw materials essential to slow the spread of the virus, or that are sadly needed to respond to increased demand in vital medical supply chains," added Fogarty.
"As for our overall first quarter 2020 results, we are very pleased to have delivered $77.9 million of Adjusted EBITDA, especially considering this to be against a backdrop of such a uniquely challenging global operating environment. Kraton's results for the quarter reflect the benefit of our broad geographic and end market diversification, evidence of the sustainability of our business model. During the quarter we saw positive demand trends in a number of end markets, including medical applications such as IV bags and in personal care and hygiene products. We also saw growing sales into adhesive markets, driven by tapes and labels for packaging applications as well as construction adhesives used in applications such as medical gowns and masks. Our first quarter results also benefited from our disciplined approach to cost management, and we project we remain on track to deliver $20 million of run rate cost savings in 2020. As a critical supplier of key inputs into a wide range of products that are vital in the current market, our production facilities around the globe have continued to operate at normal capacities. Currently, we have adequate access to key raw materials, and we have had minimal disruption in our global supply chain and customer fulfillment capability. We are also very pleased to have completed the sale of our Cariflex business in the quarter, providing for a substantial debt reduction and improving our capital structure and liquidity position," said Fogarty.
FIRST QUARTER 2020 SUMMARY
First quarter 2020 results reflect the benefit of geographic and end-market diversification, with no material impact associated with COVID-19 during the quarter. Our plants continued to operate at normal capacities, and our supply chain remained largely intact, with adequate availability of key raw materials.
First quarter consolidated net income of $209.0 million, compared to $13.6 million in the first quarter of 2019.
First quarter consolidated Adjusted EBITDA(1) of $77.9 million, down 12.9% compared to the first quarter of 2019.
Polymer segment operating income of $17.9 million, up 93.8% compared to the first quarter of 2019, and Adjusted EBITDA(1) of $51.2 million, up 6.3% compared to $48.2 million in the first quarter of 2019.
Chemical segment operating income of $10.3 million, down 60.1% compared to the first quarter of 2019, and Adjusted EBITDA(1) of $26.7 million, down 35.3% compared to $41.3 million in the first quarter of 2019.
In connection with the sale of our Cariflex business on March 6, 2020, during the first quarter, consolidated debt was reduced by $378.8 million. Consolidated Net Debt(1) excluding the effect of foreign currency was reduced by $484.6 million.
$350 million of liquidity at quarter end, comprised of $150 in cash and approximately $200 million of borrowing availability under the $250 million ABL Facility.
"Our first core value at Kraton is Safety," said Kevin M. Fogarty, Kraton's President and Chief Executive Officer. "In today's COVID-19 world, we have taken extraordinary steps to ensure the health and safety of all our employees globally. Approximately half our colleagues today continue to work remotely, while those essential to operate our polymer and chemical plants and innovation centers globally are taking additional cautious measures to mitigate any possible exposure to the coronavirus. We are grateful that because of these actions we undertook, first in China, and later extending across our global network, we have had very few confirmed COVID-19 cases. Moreover, our dedicated colleagues continue to keep our global business fully operational, supplying customers in all regions, in many cases with chemical and polymer raw materials essential to slow the spread of the virus, or that are sadly needed to respond to increased demand in vital medical supply chains," added Fogarty.
"As for our overall first quarter 2020 results, we are very pleased to have delivered $77.9 million of Adjusted EBITDA, especially considering this to be against a backdrop of such a uniquely challenging global operating environment. Kraton's results for the quarter reflect the benefit of our broad geographic and end market diversification, evidence of the sustainability of our business model. During the quarter we saw positive demand trends in a number of end markets, including medical applications such as IV bags and in personal care and hygiene products. We also saw growing sales into adhesive markets, driven by tapes and labels for packaging applications as well as construction adhesives used in applications such as medical gowns and masks. Our first quarter results also benefited from our disciplined approach to cost management, and we project we remain on track to deliver $20 million of run rate cost savings in 2020. As a critical supplier of key inputs into a wide range of products that are vital in the current market, our production facilities around the globe have continued to operate at normal capacities. Currently, we have adequate access to key raw materials, and we have had minimal disruption in our global supply chain and customer fulfillment capability. We are also very pleased to have completed the sale of our Cariflex business in the quarter, providing for a substantial debt reduction and improving our capital structure and liquidity position," said Fogarty.