vvv-20211231

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

______________________

FORM 10-Q

(Mark one)


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2021


☐			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 001-37884

VALVOLINE INC.

(Exact name of registrant as specified in its charter)


Kentucky			30-0939371
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

100 Valvoline Way

Lexington, Kentucky 40509

(Address of principal executive offices) (Zip Code)

Telephone Number (859) 357-7777

(Registrant’s telephone number, including area code)

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 $0.01 per share

VVV

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 þ No o

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 þ No o

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 Act). Yes ☐ No þ

At January 31, 2022, there were 179,356,295 shares of the registrant’s common stock outstanding.

TABLE OF CONTENTS


			Page
PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (Unaudited)

Condensed Consolidated Statements of Comprehensive Income			3

Condensed Consolidated Balance Sheets			4

Condensed Consolidated Statements of Stockholders' Equity (Deficit)			5

Condensed Consolidated Statements of Cash Flows			6

Notes to Condensed Consolidated Financial Statements			7

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			18

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			30

ITEM 4. CONTROLS AND PROCEDURES			30

PART II – OTHER INFORMATION

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

SIGNATURE			33

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Valvoline Inc. and Consolidated Subsidiaries

Condensed Consolidated Statements of Comprehensive Income


	Three Months Ended December 31
(In millions, except per share amounts - unaudited)	2021		2020
Sales	$	858	$	653
Cost of sales	614		425
Gross profit	244		228

Selling, general and administrative expenses	135		117
Legacy and separation-related expenses	3		1
Equity and other income, net	(15)		(14)
Operating income	121		124
Net pension and other postretirement plan income	(9)		(13)
Net interest and other financing expenses	17		20

Income before income taxes	113		117
Income tax expense	26		30
Net income	$	87	$	87

NET EARNINGS PER SHARE
Basic	$	0.48	$	0.47
Diluted	$	0.48	$	0.47

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Basic	181		185
Diluted	182		186

COMPREHENSIVE INCOME
Net income	$	87	$	87
Other comprehensive income (loss), net of tax
Currency translation adjustments	—		18
Amortization of pension and other postretirement plan prior service credits	—		(2)
Unrealized gain on cash flow hedges	1		—
Other comprehensive income	1		16
Comprehensive income	$	88	$	103

See Notes to Condensed Consolidated Financial Statements.

Valvoline Inc. and Consolidated Subsidiaries

Condensed Consolidated Balance Sheets


(In millions, except per share amounts - unaudited)	December 31 2021		September 30 2021
Assets
Current assets
Cash and cash equivalents	$	152	$	230
Receivables, net	530		496
Inventories, net	264		258
Prepaid expenses and other current assets	55		53
Total current assets	1,001		1,037
Noncurrent assets
Property, plant and equipment, net	824		817
Operating lease assets	309		307
Goodwill and intangibles, net	782		775
Equity method investments	50		47
Deferred income taxes	13		14
Other noncurrent assets	204		194
Total noncurrent assets	2,182		2,154
Total assets	$	3,183	$	3,191

Liabilities and Stockholders’ Equity
Current liabilities

Current portion of long-term debt	$	32	$	17
Trade and other payables	218		246
Accrued expenses and other liabilities	291		306
Total current liabilities	541		569
Noncurrent liabilities
Long-term debt	1,662		1,677
Employee benefit obligations	248		258
Operating lease liabilities	276		274
Deferred income taxes	34		26
Other noncurrent liabilities	255		252
Total noncurrent liabilities	2,475		2,487
Commitments and contingencies
Stockholders’ equity
Preferred stock, no par value, 40 shares authorized; no shares issued and outstanding	—

SEC Form 10-Q filed by Valvoline Inc.