lthm-20230331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________________________________________________________

FORM 10-Q

_______________________________________________________________________


☒			Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2023


☐			Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _______ to _______

Commission File Number 001-38694

__________________________________________________________________________

LIVENT CORPORATION

(Exact name of registrant as specified in its charter)

__________________________________________________________________________


Delaware			82-4699376
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

1818 Market Street	Philadelphia	Pennsylvania	19103
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code: 215-299-5900

__________________________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	LTHM	New York Stock Exchange

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. YES ☒ NO ☐

INDICATE BY CHECK MARK WHETHER THE REGISTRANT HAS SUBMITTED ELECTRONICALLY EVERY INTERACTIVE DATA FILE REQUIRED TO BE SUBMITTED PURSUANT TO RULE 405 OF REGULATION S-T (§232.405 OF THIS CHAPTER) DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS REQUIRED TO SUBMIT SUCH FILES). YES ☒ NO ☐

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.

LARGE ACCELERATED FILER

☒

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.

☐

INDICATE BY CHECK MARK WHETHER THE REGISTRANT IS A SHELL COMPANY (AS DEFINED IN RULE 12B-2 OF THE EXCHANGE ACT). YES ☐ NO ☒

As of March 31, 2023, there were 179,610,299 shares of Common Stock, $0.001 par value per share, outstanding.

LIVENT CORPORATION

INDEX


			Page No.
Glossary of Terms			3
Part I - FINANCIAL INFORMATION			4
Item 1. Financial Statements			4
Condensed Consolidated Statements of Operations - Three Months Ended March 31, 2023 and 2022 (unaudited)			4
Condensed Consolidated Statements of Comprehensive Income - Three Months Ended March 31, 2023 and 2022 (unaudited)			5
Condensed Consolidated Balance Sheets - March 31, 2023 (unaudited) and December 31, 2022			6
Condensed Consolidated Statements of Cash Flows - Three Months Ended March 31, 2023 and 2022 (unaudited)			7
Condensed Consolidated Statements of Equity - Three Months Ended March 31, 2023 and 2022 (unaudited)			9
Notes to the Condensed Consolidated Financial Statements (unaudited)			10
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			23
Item 3. Quantitative and Qualitative Disclosures About Market Risk			30
Item 4. Controls and Procedures			30
Part II - OTHER INFORMATION			31
Item 1. Legal Proceedings			31
Item 1A. Risk Factors			31
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			31

Item 6. Exhibits			32
Signatures			33

Glossary of Terms

When the following terms and abbreviations appear in the text of this report, they have the meanings indicated below:


2025 Notes			$245.75 million principal amount 4.125% Convertible Senior Notes due 2025
AOCL			Accumulated other comprehensive loss

ASC 842			Accounting Standards Codification Topic 842 - Leases
Credit Agreement			As amended, provides for a $500 million senior secured revolving credit facility
EAETR			Estimated annual effective tax rate
ESG			Environmental, social and governance
EV			Electric vehicle
Exchange Act			Securities and Exchange Act of 1934

FMC			FMC Corporation


Livent NQSP			Livent Non-Qualified Savings Plan

MdA			Minera del Altiplano SA, our local operating subsidiary in Argentina
Nemaska Lithium or NLI			Nemaska Lithium Inc., a non-public lithium company not yet in the production stage domiciled in Québec, Canada
Nemaska Lithium Project			Through our subsidiary, Québec Lithium Partners (UK) Limited, we own a 50% equity interest in NLI, which in turn is developing the Nemaska Lithium Project, which will consist of the Whabouchi Mine and concentrator in the James Bay region of Québec and a lithium hydroxide conversion plant in Bécancour, Québec

OEM			Original equipment manufacturer



Revolving Credit Facility			Livent's $500 million senior secured revolving credit facility, as provided by the Credit Agreement
RSU			Restricted stock unit
SEC			Securities and Exchange Commission
Securities Act			Securities Act of 1933
Separation			On October 15, 2018, Livent completed its initial public offering and sold 20 million shares of Livent common stock to the public at a price of $17.00 per share

SOFR			Secured Overnight Financing Rate
U.S. GAAP			United States Generally Accepted Accounting Principles
VAT			Value-added tax

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

LIVENT CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


	Three Months Ended March 31,
	2023		2022
(in Millions, Except Per Share Data)	(unaudited)
Revenue	$	253.5	$	143.5
Cost of sales	87.5		83.6
Gross margin	166.0		59.9
Selling, general and administrative expenses	16.3		11.8
Research and development expenses	1.0		0.9
Restructuring and other charges	1.9		1.0
Separation-related costs	—		0.1
Total costs and expenses	106.7		97.4
Income from operations before equity in net loss of unconsolidated affiliates and other gain	146.8		46.1
Equity in net loss of unconsolidated affiliates	8.1		2.2



Other gain	—		(14.0)
Income from operations before income taxes	138.7		57.9
Income tax expense	23.9		4.7


Net income	$	114.8	$	53.2
Net income per weighted average share - basic	$	0.64	$	0.33
Net income per weighted average share - diluted	$	0.55	$	0.28
Weighted average common shares outstanding - basic	179.6		161.7
Weighted average common shares outstanding - diluted	209.2		191.4

The accompanying notes are an integral part of these condensed consolidated financial statements.

LIVENT CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


	Three Months Ended March 31,
	2023		2022
(in Millions)	(unaudited)
Net income	$	114.8	$	53.2
Other comprehensive income/(loss), net of tax:
Foreign currency adjustments:
Foreign currency translation gain/(loss) arising during the period	1.5		(1.0)

Total foreign currency translation adjustments	1.5		(1.0)
Derivative instruments:
Unrealized hedging gains, net of tax of $0.1 and $0.1	0.2		0.1

Total derivative instruments	0.2		0.1
Other comprehensive income/(loss), net of tax	1.7		(0.9)
Comprehensive income	$	116.5	$	52.3

The accompanying notes are an integral part of these condensed consolidated financial statements.

LIVENT CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS


(in Millions, Except Share and Par Value Data)	March 31, 2023		December 31, 2022
ASSETS	(unaudited)
Current assets
Cash and cash equivalents	$	194.1	$	189.0
Trade receivables, net of allowance of approximately $0.3 in 2023 and 2022	112.9		141.6
Inventories, net	184.1		152.3
Prepaid and other current assets	67.5		61.1


Total current assets	558.6		544.0
Investments	453.3		440.3
Property, plant and equipment, net of accumulated depreciation of $261.0 in 2023 and $253.1 in 2022	1,040.0		968.3



Deferred income taxes	0.7		0.4
Right of use assets - operating leases, net	5.5		4.8
Other assets	122.2		116.4
Total assets	$	2,180.3	$	2,074.2
LIABILITIES AND EQUITY
Current liabilities

Accounts payable, trade and other	$	64.7	$	81.7


Accrued and other current liabilities	36.2		37.4
Contract liability - short-term	2.5		15.5
Operating lease liabilities - current	1.1		0.9



Income taxes	27.6		13.2

Total current liabilities	132.1		148.7
Long-term debt	242.3		241.9
Operating lease liabilities - long-term	4.5		4.2
Environmental liabilities	6.5		6.4
Deferred income taxes	17.8		16.1
Contract liability - long-term	198.0		198.0
Other long-term liabilities	18.1		15.9
Commitments and contingent liabilities (Note 13)	—		—
Total current and long-term liabilities	619.3		631.2
Equity
Common stock; $0.001 par value; 2 billion shares authorized; 179,715,772 and 179,652,125 shares issued; 179,610,299 and 179,548,550 outstanding as of March 31, 2023 and December 31, 2022, respectively	0.1		0.1
Capital in excess of par value of common stock	1,161.9		1,160.4
Retained earnings	449.2		334.4
Accumulated other comprehensive loss	(49.3)		(51.0)
Treasury stock, at cost; 105,473 and 103,575 shares as of March 31, 2023 and December 31, 2022, respectively	(0.9)		(0.9)


Total equity	1,561.0		1,443.0
Total liabilities and equity	$	2,180.3	$	2,074.2

The accompanying notes are an integral part of these condensed consolidated financial statements.

LIVENT CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


	Three Months Ended March 31,
	2023		2022
(in Millions)	(unaudited)
Cash provided by operating activities:
Net income	$	114.8	$	53.2
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	6.8		6.4
Restructuring and other charges	0.6		0.8
Deferred income taxes	1.4		0.8

Share-based compensation	1.9		1.6
Change in investments in trust fund securities	0.2		0.2



Equity in net loss of unconsolidated affiliate	8.1		2.2
Other gain, Blue Chip Swap	—		(14.0)
Other non-cash adjustments	(0.4)		(0.2)
Changes in operating assets and liabilities:
Trade receivables, net	30.3		(9.3)
Inventories	(31.0)		(16.5)
Accounts payable, trade and other	(17.8)		(3.2)
Changes in deferred compensation	0.9		0.7
Contract liability - short-term	(13.0)		0.7

Income taxes	14.3		(0.1)
Change in prepaid and other current assets and other assets	(8.3)		5.1
Change in accrued and other current liabilities and other long-term liabilities	(5.9)		(17.6)
Cash provided by operating activities	102.9		10.8
Cash used in investing activities:
Capital expenditures(1)	(73.5)		(68.7)
Investments in Livent NQSP securities	(0.7)		(0.7)
Proceeds from Blue Chip Swap, net of purchases	—		14.0
Investment in unconsolidated affiliate	(20.2)		—
Other investing activities	(3.7)		—
Cash used in investing activities	(98.1)		(55.4)
Cash (used in)/provided by financing activities:







Other financing activities	(0.1)		0.1
Cash (used in)/provided by financing activities	(0.1)		0.1
Effect of exchange rate changes on cash and cash equivalents	0.4		—
Increase/(decrease) in cash and cash equivalents	5.1		(44.5)
Cash and cash equivalents, beginning of period	189.0		113.0
Cash and cash equivalents, end of period	$	194.1	$	68.5

LIVENT CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)


	Three Months Ended March 31,
	2023		2022
Supplemental Disclosure for Cash Flow:	(unaudited)
Cash payments for income taxes, net of refunds	$	1.9	$	2.4
Cash payments for interest (1)	5.5		5.5
Cash payments for Restructuring and other charges	1.3		0.2
Cash payments for Separation-related charges	—		0.4

Accrued capital expenditures	15.3		29.0
Accrued investment in unconsolidated affiliate	—		8.0


Operating lease right-of-use assets and lease liabilities recorded for ASC 842	1.2		—

____________________

1.For the three months ended March 31, 2023 and 2022, $3.9 million and $4.0 million of interest expense was capitalized, respectively.

The accompanying notes are an integral part of these condensed consolidated financial statements.

LIVENT CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(UNAUDITED)


(in Millions Except Per Share Data)	Common Stock, $0.001 Per Share Par Value		Capital In Excess of Par		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Total






Balance as of December 31, 2021	$	0.1	$	778.1	$	60.9	$	(42.9)	$	(0.8)	$	795.4
Net income	—		—		53.2		—		—		53.2
Stock compensation plans	—		1.7		—		—		—		1.7
Exercise of stock options	—		0.1		—		—		—		0.1
Shares withheld for taxes - common stock issuances	—		(0.5)		—		—		—		(0.5)
Net hedging gains, net of income tax	—		—		—		0.1		—		0.1
Foreign currency translation adjustments	—		—		—		(1.0)		—		(1.0)
Balance as of March 31, 2022	$	0.1	$	779.4	$	114.1	$

SEC Form 10-Q filed by Livent Corporation