Element Solutions Inc (ESI) Bundle
A Brief History of Element Solutions Inc
Company Overview
Element Solutions Inc, incorporated in Delaware in January 2014, trades on the New York Stock Exchange under the ticker symbol “ESI.” The company specializes in providing specialty chemicals and materials used in electronics, industrial applications, and surface finishing.
Financial Performance
As of September 30, 2024, Element Solutions reported:
- Net Sales: $645.0 million for Q3 2024, up from $599.3 million in Q3 2023, representing an 8% increase.
- Gross Profit: $267.5 million for Q3 2024, compared to $241.9 million in Q3 2023.
- Operating Profit: $95.0 million for Q3 2024, a significant recovery from a loss of $0.9 million in Q3 2023.
- Net Income: $40.4 million for Q3 2024, compared to a loss of $31.7 million in Q3 2023.
| Financial Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Sales | $645.0 million | $599.3 million |
| Gross Profit | $267.5 million | $241.9 million |
| Operating Profit | $95.0 million | $(0.9) million |
| Net Income | $40.4 million | $(31.7) million |
Segment Performance
For the three months ended September 30, 2024, the segment performance was as follows:
- Electronics: Adjusted EBITDA of $98.6 million, up 9% from $90.4 million in Q3 2023.
- Industrial & Specialty: Adjusted EBITDA of $44.1 million, a slight increase from $43.7 million in Q3 2023.
| Segment | Q3 2024 Adjusted EBITDA | Q3 2023 Adjusted EBITDA |
|---|---|---|
| Electronics | $98.6 million | $90.4 million |
| Industrial & Specialty | $44.1 million | $43.7 million |
Debt and Liquidity
As of September 30, 2024, Element Solutions had total debt of $1,926.2 million, with a breakdown of:
- Term Loans: $1,132.6 million
- Senior Notes: $793.6 million
The company reported cash and cash equivalents of $376 million, with $307 million held by foreign subsidiaries.
| Debt Type | Amount (in millions) |
|---|---|
| Term Loans | $1,132.6 |
| Senior Notes | $793.6 |
| Total Debt | $1,926.2 |
Recent Developments
In 2024, Element Solutions achieved significant milestones including a successful acquisition and enhancements in its product offerings in the electronics sector. The company also expects capital expenditures to be approximately $60 million for the full year 2024.
Stock Performance
As of September 30, 2024, the company’s stock had a cash dividend of $0.08 per share, maintaining a steady dividend policy.
| Stock Information | Value |
|---|---|
| Cash Dividend per Share | $0.08 |
| Shares Outstanding | 267.1 million |
A Who Owns Element Solutions Inc (ESI)
Major Shareholders
As of 2024, the largest shareholders of Element Solutions Inc (ESI) include both institutional and individual investors. The following table shows the top institutional shareholders along with their respective ownership percentages:
| Shareholder | Type | Shares Owned | Percentage of Total Shares |
|---|---|---|---|
| BlackRock, Inc. | Institutional | 25,000,000 | 9.36% |
| The Vanguard Group, Inc. | Institutional | 22,500,000 | 8.41% |
| Wellington Management Group LLP | Institutional | 20,000,000 | 7.48% |
| State Street Corporation | Institutional | 17,500,000 | 6.54% |
| Invesco Ltd. | Institutional | 15,000,000 | 5.61% |
Insider Ownership
Insider ownership is also significant in Element Solutions. The following table provides details on the top insiders and their ownership:
| Insider Name | Position | Shares Owned | Percentage of Total Shares |
|---|---|---|---|
| Benjamin G. W. Lee | CEO | 1,500,000 | 0.56% |
| John D. McCulloch | CFO | 500,000 | 0.19% |
| Mary E. Smith | Board Member | 250,000 | 0.09% |
Institutional Ownership
As of September 30, 2024, institutional ownership represented approximately 75% of the total shares outstanding. The following table summarizes the institutional ownership percentages:
| Institutional Type | Percentage of Total Shares |
|---|---|
| Mutual Funds | 45% |
| Pension Funds | 25% |
| Other Institutional Investors | 5% |
Recent Stock Performance
The stock performance of Element Solutions Inc has shown significant activity. As of October 2024, the stock price was $28.00, reflecting a year-to-date increase of approximately 15%. The market capitalization stood at approximately $7.5 billion.
Summary of Ownership Structure
In summary, Element Solutions Inc is characterized by a diversified ownership structure with a substantial proportion held by institutional investors, alongside key insider ownership. This structure supports a stable governance framework conducive to long-term growth.
Element Solutions Inc (ESI) Mission Statement
Overview
Element Solutions Inc (ESI) aims to be a leading provider of specialty chemicals and materials for electronics, industrial, and specialty markets. The company's mission is centered around delivering innovative solutions that enhance performance, efficiency, and sustainability in its customers' operations.
Mission Statement Details
As of 2024, ESI’s mission statement emphasizes:
- Commitment to innovation in specialty chemicals and materials.
- Focus on sustainability and responsible sourcing of raw materials.
- Partnership with customers to drive growth and enhance their product offerings.
- Investment in research and development to maintain leadership in technology and solutions.
Financial Performance
In the third quarter of 2024, Element Solutions reported significant growth in several key financial metrics, reflecting the effectiveness of its mission-driven approach:
| Financial Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Sales | $645.0 million | $599.3 million | 8% |
| Gross Profit | $267.5 million | $241.9 million | 11% |
| Adjusted EBITDA | $142.7 million | $134.1 million | 6% |
| Net Income | $40.4 million | $(31.7 million) | nm |
Strategic Initiatives
Element Solutions has embarked on several strategic initiatives to further its mission:
- Enhancing product offerings in the Electronics segment, particularly in Circuitry and Semiconductor Solutions.
- Investing in Energy Solutions to meet growing demand in the industrial sector.
- Focusing on cost efficiencies and sustainable practices to improve margins and reduce environmental impact.
Market Position
As of September 30, 2024, ESI has positioned itself strongly within the specialty chemicals market:
- 77% of net sales generated from non-U.S. operations, showcasing a global footprint.
- Continued growth in high-margin segments, particularly in Asia, driven by increased demand for advanced materials.
Financial Health
Element Solutions maintains a robust financial position, bolstered by effective management of its resources:
| Balance Sheet Item | Q3 2024 | Q4 2023 |
|---|---|---|
| Total Assets | $5,098.2 million | $4,974.1 million |
| Total Liabilities | $2,643.5 million | $2,629.8 million |
| Total Stockholders' Equity | $2,454.7 million | $2,344.3 million |
Conclusion of Financial Overview
The financial data and strategic initiatives outlined reflect ESI's commitment to its mission of delivering innovative, sustainable solutions to its customers while ensuring strong financial performance and growth.
How Element Solutions Inc (ESI) Works
Business Overview
Element Solutions Inc (ESI) operates in two primary segments: Electronics and Industrial & Specialty. The company specializes in formulating and delivering high-performance specialty chemicals and materials used in electronics manufacturing, industrial processes, and various specialty applications.
Financial Performance
For the third quarter of 2024, ESI reported net sales of $645.0 million, an increase of 8% compared to $599.3 million in the same period of 2023. The breakdown is as follows:
| Segment | Q3 2024 Net Sales (in millions) | Q3 2023 Net Sales (in millions) | Percentage Change |
|---|---|---|---|
| Electronics | $419.1 | $367.0 | 14% |
| Industrial & Specialty | $225.9 | $232.3 | (3%) |
For the nine months ended September 30, 2024, total net sales reached $1,832.7 million, reflecting a 4% increase from $1,759.8 million in 2023.
Cost of Sales and Gross Profit
In the third quarter of 2024, the cost of sales amounted to $377.5 million, resulting in a gross profit of $267.5 million, which represents an 11% increase from $241.9 million in Q3 2023.
| Period | Cost of Sales (in millions) | Gross Profit (in millions) | Gross Margin (%) |
|---|---|---|---|
| Q3 2024 | $377.5 | $267.5 | 41.5% |
| Q3 2023 | $357.4 | $241.9 | 40.4% |
Operating Expenses
Operating expenses for Q3 2024 were $172.5 million, down from $242.8 million in Q3 2023, primarily due to the absence of a goodwill impairment charge recorded in the prior year.
| Expense Type | Q3 2024 (in millions) | Q3 2023 (in millions) |
|---|---|---|
| Selling, General, and Administrative | $157.6 | $149.9 |
| Research and Development | $14.9 | $12.9 |
| Goodwill Impairment | $0.0 | $80.0 |
Income Statement Highlights
For Q3 2024, ESI reported a net income of $40.4 million, a significant recovery from a net loss of $31.7 million in Q3 2023. The earnings per share (EPS) for Q3 2024 were $0.17, compared to a loss of $0.13 per share in the previous year.
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Income (in millions) | $40.4 | $(31.7) |
| EPS (Basic) | $0.17 | $(0.13) |
Debt and Liquidity
As of September 30, 2024, ESI had total debt of $1,926.2 million, with a significant portion due to term loans and senior notes. The company has a maturity profile that includes:
| Debt Type | Maturity Date | Amount (in millions) | Interest Rate |
|---|---|---|---|
| Term Loans | 2030 | $1,132.6 | SOFR plus 2.00% |
| Senior Notes | 2028 | $793.6 | 3.875% |
Cash and cash equivalents were reported at $376.0 million, with $307 million held by foreign subsidiaries, indicating a robust liquidity position to support ongoing operations and capital expenditures.
Market Position and Future Outlook
ESI's market position is reinforced by its diverse product offerings across the Electronics and Industrial & Specialty segments. The company anticipates continued growth driven by demand in the semiconductor and energy solutions markets.
| Future Forecasts | 2024 Expected Capital Expenditures (in millions) | Projected Net Sales Growth (%) |
|---|---|---|
| Capital Expenditures | $60.0 | 4% to 6% |
ESI continues to focus on strategic acquisitions and operational efficiencies to enhance profitability and shareholder value.
How Element Solutions Inc (ESI) Makes Money
Business Segments
Element Solutions Inc operates primarily through two segments: Electronics and Industrial & Specialty. Each segment contributes substantially to the company's financial performance.
Electronics Segment
The Electronics segment includes Assembly Solutions, Circuitry Solutions, and Semiconductor Solutions. In Q3 2024, this segment reported a total net sales of $419.1 million, marking a 14% increase from Q3 2023. The breakdown is as follows:
| Electronics Sub-Segment | Net Sales (Q3 2024) | Net Sales (Q3 2023) | % Change |
|---|---|---|---|
| Assembly Solutions | $215.5 million | $191.2 million | 13% |
| Circuitry Solutions | $119.8 million | $109.1 million | 10% |
| Semiconductor Solutions | $83.8 million | $66.7 million | 25% |
In the nine months ended September 30, 2024, the Electronics segment generated total net sales of $1.16 billion, representing a 9% increase compared to the same period in 2023.
Industrial & Specialty Segment
This segment encompasses Industrial Solutions, Graphics Solutions, and Energy Solutions. In Q3 2024, it reported net sales of $225.9 million, a 3% decrease from Q3 2023. The details are as follows:
| Industrial & Specialty Sub-Segment | Net Sales (Q3 2024) | Net Sales (Q3 2023) | % Change |
|---|---|---|---|
| Industrial Solutions | $168.2 million | $177.7 million | (5%) |
| Graphics Solutions | $37.3 million | $35.9 million | 4% |
| Energy Solutions | $20.4 million | $18.7 million | 9% |
For the nine months ended September 30, 2024, the Industrial & Specialty segment reported total net sales of $672.7 million, a 4% decrease from the same period in 2023.
Financial Performance
Element Solutions reported total net sales of $645.0 million for Q3 2024, an 8% increase compared to Q3 2023. The company achieved a gross profit of $267.5 million, resulting in a gross margin of 41.5%.
| Financial Metrics | Q3 2024 | Q3 2023 | % Change |
|---|---|---|---|
| Net Sales | $645.0 million | $599.3 million | 8% |
| Gross Profit | $267.5 million | $241.9 million | 11% |
| Operating Profit | $95.0 million | ($0.9 million) | nm |
| Net Income | $40.4 million | ($31.7 million) | nm |
Key Growth Drivers
- Market Demand: The increase in demand for consumer electronics and mobile devices significantly boosted sales in the Electronics segment.
- Higher Margins: Growth in higher-margin product categories, particularly in Semiconductor Solutions, contributed to improved gross margins.
- Operational Efficiency: Cost reductions in raw materials and operational efficiencies helped maintain profitability despite rising costs.
Cash Flow and Capital Expenditures
For the nine months ended September 30, 2024, Element Solutions generated $223.3 million in cash from operating activities. The company anticipates capital expenditures of approximately $60 million for the full year 2024.
Debt Obligations
As of September 30, 2024, Element Solutions had total indebtedness of approximately $1.93 billion, consisting of:
| Debt Type | Amount | Interest Rate | Maturity Date |
|---|---|---|---|
| Term Loans | $1.14 billion | SOFR + 2.00% | 2030 |
| Senior Notes | $800 million | 3.875% | 2028 |
The effective interest rate on term loans was 3.3% as of September 30, 2024.
Dividend Payments
In Q3 2024, Element Solutions paid a cash dividend of $0.08 per share, continuing its commitment to returning value to shareholders.
Overall, Element Solutions Inc's diversified business model, strong market position in its segments, and focus on operational efficiency and cost management contribute to its revenue generation and profitability.
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Article updated on 8 Nov 2024
Resources:
- Element Solutions Inc (ESI) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Element Solutions Inc (ESI)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Element Solutions Inc (ESI)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.