Element Solutions Inc. Files 2023 Annual Report on Form 10-K

TL;DR

<b>Element Solutions Inc. has filed its 2023 10-K report detailing its financial performance and business operations.</b>

AI Summary

Element Solutions Inc (ESI) filed a Annual Report (10-K) with the SEC on February 21, 2024. Element Solutions Inc. reported its fiscal year 2023 results in its 10-K filing. The filing covers the period ending December 31, 2023. The company's principal business address is 500 East Broward Boulevard, Suite 1860, Fort Lauderdale, FL 33394. Element Solutions Inc. was formerly known as Platform Specialty Products Corp until October 31, 2013. The company operates within the Miscellaneous Chemical Products sector (SIC 2890).

Why It Matters

For investors and stakeholders tracking Element Solutions Inc, this filing contains several important signals. This 10-K filing provides a comprehensive overview of Element Solutions Inc.'s financial health, operational performance, and strategic positioning for the fiscal year 2023, which is crucial for investors and stakeholders to assess the company's value and future prospects. Understanding the company's historical financial data, including revenue, net income, and debt levels, as presented in this filing, is essential for making informed investment decisions and evaluating management's effectiveness.

Risk Assessment

Risk Level: medium — Element Solutions Inc shows moderate risk based on this filing. The filing is a standard annual report (10-K), which typically contains a broad range of information but does not inherently signal immediate positive or negative developments beyond routine disclosures.

Analyst Insight

Review the detailed financial statements and risk factors within the 10-K to assess Element Solutions Inc.'s performance and identify potential investment opportunities or risks.

Key Numbers

• 2023-12-31 — Fiscal Year End (Conformed period of report)
• 2024-02-21 — Filing Date (Filed as of date)
• 001-36272 — SEC File Number (SEC file number)
• 371744899 — IRS Number (IRS number)

Key Players & Entities

• Element Solutions Inc (company) — Filer name
• Platform Specialty Products Corp (company) — Former company name
• 2023-12-31 (date) — Conformed period of report
• 2024-02-21 (date) — Filed as of date
• 500 East Broward Boulevard, Suite 1860, Fort Lauderdale, FL 33394 (address) — Business address
• 2890 (industry_code) — Standard Industrial Classification

FAQ

Industry Context

Element Solutions Inc. operates in the Miscellaneous Chemical Products industry, which involves the manufacturing and distribution of specialized chemical products.

Regulatory Implications

The company is subject to various regulations governing the chemical industry, including environmental, health, and safety standards, as well as SEC reporting requirements for public companies.

What Investors Should Do

1. Analyze the financial statements for revenue trends, profitability, and cash flow.
2. Review the business description and risk factors for strategic insights and potential challenges.
3. Compare key financial metrics with industry peers and historical performance.

Year-Over-Year Comparison

This filing is the annual report for the fiscal year 2023, following previous filings which would include quarterly reports (10-Q) and potentially prior annual reports (10-K).

Key Financial Figures

• $0.01 — ich registered Common Stock, par value $0.01 per share ESI New York Stock Exchange
• $800 million — % USD Notes due 2028 Element Solutions' $800 million aggregate principal amount of 3.875% se
• $200 m — ong-standing distribution agreement for $200 million, including $170 million paid at c
• $170 million — n agreement for $200 million, including $170 million paid at closing and a deferred payment
• $30.0 million — id at closing and a deferred payment of $30.0 million. The deferred payment and a receivable
• $13.5 million — he deferred payment and a receivable of $13.5 million were settled in the fourth quarter of 2
• $6.1 million — f 2023. The receivable was settled with $6.1 million of inventory and $7.4 million cash (whi
• $7.4 million — tled with $6.1 million of inventory and $7.4 million cash (which reduced the purchase price
• $15.9 m — e completed the Kuprion Acquisition for $15.9 million, net of cash with potential addit
• $259 million — s installments, which are not to exceed $259 million in aggregate, to be made upon the achie
• $2.33 b — pecialty. In 2023, we achieved sales of $2.33 billion, to which our Electronics and Ind

Filing Documents

• esi-20231231.htm (10-K) — 2483KB
• esi10-k20231231ex1019.htm (EX-10.19) — 58KB
• esi10-k20231231ex211.htm (EX-21.1) — 84KB
• esi10-k20231231ex231.htm (EX-23.1) — 2KB
• esi10-k20231231ex241.htm (EX-24.1) — 12KB
• esi10-k20231231ex311.htm (EX-31.1) — 9KB
• esi10-k20231231ex312.htm (EX-31.2) — 9KB
• esi10-k20231231ex321.htm (EX-32.1) — 9KB
• esi10-k20231231ex971.htm (EX-97.1) — 57KB
• esi-20231231_g1.jpg (GRAPHIC) — 439KB
• esi-20231231_g2.jpg (GRAPHIC) — 122KB
• image.jpg (GRAPHIC) — 36KB
• 0001590714-24-000054.txt (&nbsp;) — 15451KB
• esi-20231231.xsd (EX-101.SCH) — 82KB
• esi-20231231_cal.xml (EX-101.CAL) — 139KB
• esi-20231231_def.xml (EX-101.DEF) — 485KB
• esi-20231231_lab.xml (EX-101.LAB) — 1148KB
• esi-20231231_pre.xml (EX-101.PRE) — 831KB
• esi-20231231_htm.xml (XML) — 2324KB

Forward-Looking Statements / Non-GAAP Financial Measures

Forward-Looking Statements / Non-GAAP Financial Measures iii Part I Item 1.

Business

Business 1 Item 1A.

Risk Factors

Risk Factors 10 Item 1B. Unresolved Staff Comments 22 I tem 1C. Cybersecurity 22 Item 2.

Properties

Properties 22 Item 3.

Legal Proceedings

Legal Proceedings 23 Item 4. Mine Safety Disclosures 23 Part II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 24 Item 6. [Reserved] 25 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 26 Item 7A.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 37 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 38 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 38 Item 9A.

Controls and Procedures

Controls and Procedures 38 Item 9B. Other Information 38 Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections 39 Part III Item 10. Directors, Executive Officers and Corporate Governance 40 Item 11.

Executive Compensation

Executive Compensation 40 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 40 Item 13. Certain Relationships and Related Transactions, and Director Independence 40 Item 14. Principal Accounting Fees and Services 40 Part IV Item 15. Exhibits, Financial Statement Schedules 41

Signatures

Signatures 44 i GLOSSARY OF DEFINED TERMS Terms Definitions Element Solutions; We; Us; Our; the Company Element Solutions Inc, a Delaware corporation, and where the context requires, its subsidiaries or operating businesses. Coventya Coventya Holding SAS and its subsidiaries. Coventya Acquisition Acquisition of Coventya on September 1, 2021. Credit Agreement Credit Agreement, dated as of January 31, 2019, as amended from time to time, among, inter alia, Element Solutions and MacDermid, Incorporated, as borrowers, certain subsidiaries of Element Solutions and the lenders from time to time parties thereto. EBITDA Earnings before interest, taxes, depreciation and amortization. E.U. European Union. Exchange Act Securities Exchange Act of 1934, as amended. GAAP U.S. Generally Accepted Accounting Principles. HKW H.K. Wentworth Limited and its subsidiaries. HKW Acquisition Acquisition of HKW on May 5, 2021. HSO HSO Herbert Schmidt GmbH & Co. KG, Dipl.-Ing. W. Schmidt GmbH and HSO Hong Kong Holding Limited and its subsidiary. HSO Acquisition Acquisition of HSO on January 26, 2022. Kuprion Acquisition Acquisition of Kuprion, Inc. on May 19, 2023. OEM Original equipment manufacturer. RSUs Restricted stock units issued by Element Solutions from time to time under the 2013 Plan. SEC Securities and Exchange Commission. Securities Act Securities Act of 1933, as amended. ViaForm Distribution Rights The rights to sell the Company's ViaForm electrochemical deposition products directly to customers. WACC Weighted average cost of capital. 2013 Plan Element Solutions Inc Amended and Restated 2013 Incentive Compensation Plan. 2023 Annual Report This annual report on Form 10-K for the fiscal year ended December 31, 2023. 2024 Proxy Statement Element Solutions' definitive proxy statement for its 2024 annual meeting of stockholders expected to be filed no later than 120 days after the Company's fiscal year end of December 31, 2023. 3.875% USD Notes

Forward-Looking Statements

Forward-Looking Statements This 2023 Annual Report contains forward-looking statements that can be identified by words such as "expect," "anticipate," "project," "will," "should," "believe," "intend," "plan," "assume," "estimate," "predict," "seek," "continue," "outlook," "may," "might," "aim," "can have," "likely," "potential," "target," "hope," "goal," "priority" or "confident" and variations of such words and similar expressions. Many of the forward-looking statements include, but are not limited to, statements, beliefs, projections and expectations regarding the expected benefits of the reacquired ViaForm Distribution Rights and the Kuprion Acquisition; deferred payments related to the Kuprion Acquisition; the war between Russia and Ukraine and the Israel-Hamas conflict and other hostilities in the Middle East as well as actions in response thereto and their impact on market conditions and the global economy; the continuing economic impact of the coronavirus (COVID-19) and its variants on the global economy, secular trends and expected growth of our businesses; capital requirements and need for and availability of financing; probability of achievement of the performance target related to certain performance-based RSUs; the impact of new accounting standards and accounting changes; potential share repurchases; our dividend policy and dividend declarations; our hedging activities; timing and outcome of environmental and legal matters; tax planning strategies and assessments; the impact of changes to privacy, cybersecurity, environmental, global trade, tax and other governmental regulations; impairments, including those on goodwill and other intangible assets; price volatility and cost environment; inflation and fluctuations in foreign exchange rates; our liquidity, cash flows and capital allocation; funding sources; expected capital expenditures; debt and debt leverage ratio; pension plan contributions; contractual obligations; general views about future operatin

Business

Item 1. Business Unless the context otherwise indicates or requires, all product names, trade names, trademarks, service marks or logos used in this 2023 Annual Report are part of our intellectual property, although the "" and "TM" trademark designations may have been omitted. For financial and other information about our segments and the geographic areas in which we do business, see "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7, "Financial Statements and Supplementary Data" in Part II, Item 8, as well as Note 1, "Background and Basis of Presentation" and Note 22, "Segment Information" to our audited Consolidated Financial Statements, all included in this 2023 Annual Report. Business Overview Element Solutions, incorporated in Delaware in January 2014, is a leading global specialty chemicals company whose businesses supply a broad range of solutions that enhance the performance of products people use every day. Developed in multi-step technological processes, these innovative solutions enable customers' manufacturing processes in several key industries, including consumer electronics, power electronics, semiconductor fabrication, communications and data storage infrastructure, automotive systems, industrial surface finishing, consumer packaging and offshore energy. Our product innovation and product extensions are expected to continue to drive sales growth in both new and existing markets while expanding margins through a consistent focus on increasing customer value propositions. We believe the majority of our businesses hold strong positions in the high-growth markets we serve. Our extensive global teams of specially trained scientists and engineers develop our products, and our expert sales and service organizations ensure our customers' needs are met every day. Our continuous focus on customer-centric innovation serves as a catalyst to drive changes to existing formulations and opportunities in adj

View Full Filing

View this 10-K filing on SEC EDGAR