UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
EXCHANGE ACT OF 1934
For the quarterly period ended
or
EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number:
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
☒ | Accelerated filer | ◻ | |||
Non-accelerated filer | ◻ | Smaller reporting company | Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
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Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class | Trading symbol | Name of Exchange on which registered |
As of October 31, 2023, there were
TABLE OF CONTENTS
2
Trinseo PLC
Quarterly Report on Form 10-Q
For the quarterly period ended September 30, 2023
Unless otherwise indicated or required by context, as used in this Quarterly Report on Form 10-Q (“Quarterly Report”), the term “Trinseo” refers to Trinseo PLC (NYSE: TSE), a public limited company existing under the laws of Ireland, and not its subsidiaries. The terms “Company,” “we,” “us” and “our” refer to Trinseo and its consolidated subsidiaries, taken as a consolidated entity. Trinseo PLC is the surviving entity of a cross-border merger with our predecessor company, Trinseo S.A., which merger was completed in October 2021. All financial data provided in this Quarterly Report is the financial data of Trinseo PLC, unless otherwise indicated. Prior to the formation of the Company, our business was wholly owned by The Dow Chemical Company (together with other affiliates, “Dow”). The Company may distribute cash to shareholders under Irish law via dividends or distributions made out of distributable profits.
Definitions of capitalized terms not defined herein appear within our Annual Report on Form 10-K for the year ended December 31, 2022 (“Annual Report”) filed with the Securities and Exchange Commission (“SEC”) on February 27, 2023.
Cautionary Note on Forward-Looking Statements
This Quarterly Report contains, without limitation, statements concerning plans, objectives, goals, projections, forecasts, strategies, future events or performance, and underlying assumptions and other statements, which are not statements of historical facts. Forward-looking statements may be identified by the use of words like “expect,” “anticipate,” “believe,” “intend,” “forecast,” ”estimate,” “see,” “outlook,” “will,” “may,” “might,” “potential,” “likely,” “target,” “plan,” “contemplate,” “seek,” “attempt,” “should,” “could,” “would,” or expressions of similar meaning. Forward-looking statements reflect management’s evaluation of information currently available and are based on our current expectations and assumptions regarding our business, the economy, our current indebtedness and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict.
Specific factors that may cause future results to differ from those expressed by the forward-looking statements, or otherwise impact performance or other predictions of future actions have, in many but not all cases, been identified in connection with specific forward-looking statements. Factors that might cause future results to differ from those expressed by the forward-looking statements include, but are not limited to, our ability to successfully implement proposed restructuring initiatives, including the closure of certain plants and product lines, and to successfully generate cost savings and increase profitability; our ability to successfully execute our business and transformation strategy; increased costs or disruption in the supply of raw materials; increased energy costs; compliance with laws and regulations impacting our business; conditions in the global economy and capital markets; our ability to meet the covenants under our existing indebtedness; our ability to successfully investigate and remediate chemical releases on or from our sites, make related capital expenditures, reimburse third-party cleanup costs or settle potential regulatory penalties or other claims; and those discussed in our Annual Report filed with the SEC on February 27, 2023 under Part I, Item IA— “Risk Factors,” within this Quarterly Report and in other filings and furnishings made by the Company with the SEC from time to time.
As a result of these or other factors, our actual results, performance or achievements may differ materially from those contemplated by the forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. Therefore, we caution you against relying on these forward-looking statements. The forward-looking statements included in this Quarterly Report are made only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.
Available Information
Our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, are available free of charge through the Investor Relations section of our website, www.trinseo.com, as soon as reasonably practicable after the reports are electronically filed or furnished with the SEC. We provide this website and information contained in or connected to it for informational purposes only. That information is not a part of this Quarterly Report.
3
PART I —FINANCIAL INFORMATION
Item 1. Financial Statements
TRINSEO PLC
Condensed Consolidated Balance Sheets
(In millions, except per share data)
(Unaudited)
September 30, | December 31, | ||||||
| 2023 | 2022 | |||||
Assets |
|
| |||||
Current assets | |||||||
Cash and cash equivalents | $ | | $ | | |||
Accounts receivable, net of allowance for doubtful accounts (September 30, 2023: $ | | | |||||
Inventories |
| |
| | |||
Other current assets |
| |
| | |||
Total current assets |
| |
| | |||
Investments in unconsolidated affiliate |
| |
| | |||
Property, plant and equipment, net of accumulated depreciation (September 30, 2023: $ |
| | | ||||
Other assets | |||||||
Goodwill |
| |
| | |||
Other intangible assets, net |
| |
| | |||
Right-of-use assets - operating, net | | | |||||
Deferred income tax assets |
| |
| | |||
Deferred charges and other assets |
| |
| | |||
Total other assets |
| |
| | |||
Total assets | $ | | $ | | |||
Liabilities and shareholders’ equity | |||||||
Current liabilities | |||||||
Short-term borrowings and current portion of long-term debt | $ | | $ | | |||
Accounts payable |
| |
| | |||
Current lease liabilities - operating | | | |||||
Income taxes payable |
| |
| | |||
Accrued expenses and other current liabilities |
| |
| | |||
Total current liabilities |
| |
| | |||
Noncurrent liabilities | |||||||
Long-term debt, net of unamortized deferred financing fees |
| |
| | |||
Noncurrent lease liabilities - operating | | | |||||
Deferred income tax liabilities |
| |
| | |||
Other noncurrent obligations |
| |
| | |||
Total noncurrent liabilities |
| |
| | |||
Commitments and contingencies (Note 13) | |||||||
Shareholders’ equity | |||||||
Ordinary shares, $ | | | |||||
Preferred shares, € | |||||||
Deferred ordinary shares, € | — | — | |||||
Additional paid-in-capital |
| |
| | |||
Treasury shares, at cost (September 30, 2023: | ( | ( | |||||
Retained earnings (accumulated deficit) |
| ( |
| | |||
Accumulated other comprehensive loss |
| ( |
| ( | |||
Total shareholders’ equity |
| ( |
| | |||
Total liabilities and shareholders’ equity | $ | | $ | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
TRINSEO PLC
Condensed Consolidated Statements of Operations
(In millions, except per share data)
(Unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, |
| ||||||||||||
| 2023 |
| 2022 |
| 2023 |
| 2022 |
|
| |||||
Net sales |
| $ | |
| $ | |
| $ | |
| $ | | ||
Cost of sales |
| |
| |
| |
| | ||||||
Gross profit (loss) |
| |
| ( |
| |
| | ||||||
Selling, general and administrative expenses |
| |
| |
| |
| | ||||||
Equity in earnings of unconsolidated affiliate |
| |
| |
| |
| | ||||||
Impairment and other charges | | | | | ||||||||||
Operating income (loss) |
| ( |
| ( |
| ( |
| | ||||||
Interest expense, net |
| |
| |
| |
| | ||||||
(Gain) loss on extinguishment of long-term debt |
| | ( | | ( | |||||||||
Other expense (income), net |
| ( |
| | ( | | ||||||||
Loss from continuing operations before income taxes |
| ( |
| ( |
| ( |
| ( | ||||||
Provision for (benefit from) income taxes |
| ( |
| ( |
| ( |
| | ||||||
Net loss from continuing operations | ( | ( | ( | ( | ||||||||||
Net loss from discontinued operations, net of income taxes | — | ( | — | ( | ||||||||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | ||||||
Weighted average shares- basic | | | | | ||||||||||
Net loss per share- basic: | ||||||||||||||
Continuing operations | $ | ( | $ | ( | $ | ( | $ | ( | ||||||
Discontinued operations | — | ( | — | ( | ||||||||||
Net loss per share- basic | $ | ( | $ | ( | $ | ( | $ | ( | ||||||
Weighted average shares- diluted |
| |
| |
| |
| | ||||||
Net loss per share- diluted: | ||||||||||||||
Continuing operations | $ | ( | $ | ( | $ | ( | $ | ( | ||||||
Discontinued operations | — | ( | — | ( | ||||||||||
Net loss per share- diluted: | $ | ( | $ | ( | $ | ( | $ | ( |
The accompanying notes are an integral part of these condensed consolidated financial statements.
5
TRINSEO PLC
Condensed Consolidated Statements of Comprehensive Income (Loss)
(In millions)
(Unaudited)
Three Months Ended | Nine Months Ended | ||||||||||||
September 30, | September 30, | ||||||||||||
| 2023 |
| 2022 |
| 2023 |
| 2022 | ||||||
Net loss |
| $ | ( | $ | ( |
| $ | ( |
| $ | ( |
| |
Other comprehensive income (loss), net of tax: |
| ||||||||||||
Cumulative translation adjustments (net of tax of $ | ( | ( | ( |
| ( | ||||||||
Net gain (loss) on cash flow hedges (net of tax of $ | | ( | ( | ( | |||||||||
Pension and other postretirement benefit plans: | |||||||||||||
Net gain (loss) arising during period (net of tax of $ | — | | — | | |||||||||
Amounts reclassified from accumulated other comprehensive income | ( | ( | ( | ( | |||||||||
Total other comprehensive loss, net of tax |
| ( |
| ( |
| ( |
| ( | |||||
Comprehensive loss | $ | ( | $ | ( | $ | ( | $ | ( |
The accompanying notes are an integral part of these condensed consolidated financial statements.
6
TRINSEO PLC
Condensed Consolidated Statements of Shareholders’ Equity
(In millions, except per share data)
(Unaudited)
| Shares |
| Shareholders' Equity | ||||||||||||||||||||||||
| Ordinary Shares Outstanding |
| Treasury Shares | Deferred Ordinary Shares |
| Ordinary Shares | Deferred Ordinary Shares | Additional |
| Treasury Shares |
| Accumulated Other Comprehensive Income (Loss) |
| Retained Earnings (Accumulated Deficit) |
| Total | |||||||||||
Balance at December 31, 2022 |
| | | — | $ | | $ | — | $ | | $ | ( | $ | ( | $ | | $ | | |||||||||
Net loss |
| — | — | — | — | — | — | — | — | ( |
| ( | |||||||||||||||
Other comprehensive income |
| — | — | — | — | — | — | — | | — |
| | |||||||||||||||
Share-based compensation activity |
| | — | — | — | — | | — | — | — |
| | |||||||||||||||
Dividends on ordinary shares ($ | — | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||
Balance at March 31, 2023 |
| | | — | $ | | $ | — | $ | | $ | ( | $ | ( | $ | | $ | | |||||||||
Net loss |
| — | — | — |
| — | — |
| — |
| — |
| — |
| ( |
| ( | ||||||||||
Other comprehensive loss |
| — | — | — |
| — | — |
| — |
| — |
| ( |
| — |
| ( | ||||||||||
Share-based compensation activity |
| — | — | — |
| — | — |
| |
| — |
| — |
| — |
| | ||||||||||
Dividends on ordinary shares ($ | — | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||
Balance at June 30, 2023 |
| | | — | $ | | $ | — | $ | | $ | ( | $ | ( | $ | ( | $ | | |||||||||
Net loss |
| — | — | — | — | — | — | — | — | ( |
| ( | |||||||||||||||
Other comprehensive loss |
| — | — | — | — | — | — | — | ( | — |
| ( | |||||||||||||||
Share-based compensation activity |
| — | — | — | — | — | | — | — | — |
| | |||||||||||||||
Dividends on ordinary shares ($ | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||
Balance at September 30, 2023 |
| | | — | $ | | $ | — | $ | | $ | ( | $ | ( | $ | ( | $ | ( |
7
| Shares |
| Shareholders' Equity | ||||||||||||||||||||||||
| Ordinary Shares Outstanding |
| Treasury Shares | Deferred Ordinary Shares |
| Ordinary Shares | Deferred Ordinary Shares | Additional |
| Treasury Shares |
| Accumulated Other Comprehensive Income (Loss) |
| Retained Earnings (Accumulated Deficit) |
| Total | |||||||||||
Balance at December 31, 2021 |
| | | — | $ | | $ | — | $ | | $ | ( | $ | ( | $ | | $ | | |||||||||
Net income |
| — | — | — | — | — | — | — | — | |
| | |||||||||||||||
Other comprehensive loss |
| — | — | — | — | — | — | — | ( | — |
| ( | |||||||||||||||
Share-based compensation activity |
| | — | — | — | — | | — | — | — |
| | |||||||||||||||
Purchase of treasury shares | ( | | — | — | — | — | ( | — | — | ( | |||||||||||||||||
Dividends on ordinary shares ($ | — | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||
Balance at March 31, 2022 |
| | | — | $ | | $ | — | $ | | $ | ( | $ | ( | $ | | $ | | |||||||||
Net income |
| — | — |