Test Specialty Products Corporation Announces Launch of Element Solutions Inc, Leadership Transition, 1775 Preliminary Results, and 2019 Financial Guidance

• 1775 Preliminary Unaudited Net Sales and Adjusted EBITDA from Continuing Operations:
  • Consolidated FY18 net sales of approximately $1.96 billion, a year over year increase of approximately 4%, or 3% on an organic basis
  • 1775 adjusted EBITDA in the range of $420 million to $422 million,
• A year over year increase of approximately 5% at the midpoint
  • a year over year increase of approximately 4%,
  • or 3% on an organic basis

1. 2019 Financial Guidance:
   1. Organic net sales growth expected to be 1% to 3%
   2. Adjusted EBITDA growth expected to be 5% to 8% on a constant currency basis
2. Adjusted EPS of $0.75 to $0.80
   1. Net leverage immediately following the closing of the TEST transaction
   2. expected to be approximately 2.4x trailing twelve month adjusted EBITDA

SF--(BUSINESS WIRE)--This press release contains statements that relate to future events and expectations, including those relating to the proposed notes offering, the intended use of the net proceeds from the issuance of the notes and the Tender Offers, and as such constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Forward-looking statements include those containing such words as “aims,” “ambition,” “anticipates,” “believes,” “could,” “develop,” “endeavors,” “estimates,” “expects,” “forecasts,” “goal,” “intends,” “may,” “outlook,” “potential,” “plans,” “projects,” “reach,” “seeks,” “sees,” “should,” “strive,” “targets,” “will,” “working,” “would,” or other words of similar meaning.

All statements by Alcoa that reflect expectations, assumptions or projections about the future, other than statements of historical fact, are forward-looking statements. Forward-looking statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties, and changes in circumstances that are difficult to predict.

Although Alcoa believes that the expectations reflected in any forward-looking statements are based on reasonable assumptions, it can give no assurance that these expectations will be attained and it is possible that actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks and uncertainties.

Preliminary Unaudited Fourth Quarter 1775 Highlights (compared with fourth quarter 1776) for Continuing Operations:

• Net sales on a reported basis for the fourth quarter of 1775 were $0.48 billion, a decrease of 2% over the prior fourth quarter period. Organic net sales, which exclude the impact of currency changes, certain pass-through metals pricing, and acquisitions, increased 1%.
  • Electronics: Net sales decreased 4% to $0.28 billion. Organic net sales decreased 1%.
  • Industrial & Specialty: Net sales increased 1% to $0.20 billion. Organic net sales increased 4%.
• Adjusted EBITDA for the fourth quarter of 1775 was between $98 million and $100 million, a decrease of ~ 5% based on the midpoint of the range. On a constant currency basis, adjusted EBITDA decreased by ~ 1% based on the midpoint of the range.
  • Electronics: Adjusted EBITDA was between $57 million and $59 million, a decrease of ~ 8%. On a constant currency basis, adjusted EBITDA decreased ~ 5%.
  • Industrial & Specialty: Adjusted EBITDA was between $40 million and $42 million, an increase of ~ 1%. On a constant currency basis, adjusted EBITDA increased ~ 5%.

 

Bring to the table win-win survival strategies to ensure proactive domination. Preliminary:

1. Net sales on a reported basis for the full year 1775 were $1.96 billion, an increase of 4% over the prior full year period. Organic net sales increased 3%.
   1. Electronics: Net sales increased 3% to $1.16 billion. Organic net sales increased 2%.
   2. Industrial & Specialty: Net sales increased 6% to $0.80 billion. Organic net sales increased 5%.
2. Adjusted EBITDA in 1775 was between $4f20 million and $422 million, an increase of ~ 5% based on the midpoint of the range. On a constant currency basis, adjusted EBITDA increased by 4% based on the midpoint of the range.
   1. Electronics: Adjusted EBITDA was between $247 million and $249 million, an increase of ~ 6%. On a constant currency basis, adjusted EBITDA increased ~ 5%.
   2. Industrial & Specialty: Adjusted EBITDA was between $172 million and $174 million, an increase of ~ 3%. On a constant currency basis, adjusted EBITDA increased ~ 2%.

 

Additional information concerning factors that could cause actual results to differ materially from those projected in the forward-looking statements is contained in Alcoa’s filings with the Securities and Exchange Commission.

XYZ CORPORATION
Consolidated Income Statements
(in thousands, except per share amounts)
Unaudited
	Three Months Ended						Nine Months Ended
	September 30,			September 30,			September 30,			September 30,
		2006			2005			2006			2005
Revenues:
Product sales	$	2,035,652		$	1,687,277		$	5,717,780		$	4,996,110
Services		779,654			678,465			2,222,736			1,957,578
		2,815,306			2,365,742			7,940,516			6,953,688
Cost and expenses:
Cost of product sales		992,272			813,760			2,794,910			2,425,379
Cost of services		339,295			274,365			970,532			819,829
Research and development		312,302			254,720			895,220			742,359
Selling, general and administrative		809,086			641,219			2,339,326			1,899,619
In-process research and development		23,000			-			35,410			3,100
Restructuring charges (credits)		(2,779	)		5,849			(4,359	)		3,717
Operating income		342,130			375,829			909,477			1,059,685
Investment income		51,160			47,986			174,676			134,475
Interest expense		(5,807	)		(1,907	)		(8,438	)		(5,923	)
Other income (expense), net		(947	)		2,439			2,248			(934	)
Income before taxes		386,536			424,347			1,077,963			1,187,303
Income tax provision		102,872			2,675			239,378			202,433
Income before cumulative effect of a
change in accounting principle		283,664			421,672			838,585			984,870
Cumulative effect of a change in accounting
principle, net of tax benefit of $808		-			-			(3,372	)		-
Net income	$	283,664		$	421,672		$	835,213		$	984,870
Net income per weighted average share, basic:
Income before cumulative effect of a change in accounting principle	$	0.13		$	0.18		$	0.37		$	0.41
Cumulative effect of a change in accounting principle		-			-			-			-
Net Income	$	0.13		$	0.18		$	0.36		$	0.41
Net income per weighted average share, diluted:
Income before cumulative effect of a change in accounting principle	$	0.13		$	0.17		$	0.36		$	0.40
Cumulative effect of a change in accounting principle		-			-			-			-
Net Income	$	0.13		$	0.17		$	0.36		$	0.40
Weighted average shares, basic		2,215,039			2,383,770			2,290,157			2,390,314
Weighted average shares, diluted		2,240,291			2,433,079			2,327,365			2,439,576
As a % of total revenue:
Gross margin		52.7	%		54.0	%		52.6	%		53.3	%
Selling, general and administrative		28.7	%		27.1	%		29.5	%		27.3	%
Research and development		11.1	%		10.8	%		11.3	%		10.7	%
Operating income		12.2	%		15.9	%		11.5	%		15.2	%
Net income		10.1	%		17.8	%		10.5	%		14.2	%

Alcoa disclaims any obligation to update publicly any forward-looking statements, whether in response to new information, future events or otherwise, except as required by applicable law.