Circuits Assembly Online Magazine - Element Solutions Posts Q4 Electronics Net Sales Down 4%

FORT LAUDERDALE, FL – Element Solutions posted fourth quarter electronics net sales down 4% year-over-year to $272 million. Electronics segment adjusted EBITDA was $63 million, up 7% year-over-year.

The electronics unit includes the MacDermid and Alpha brands.

Total net sales for the quarter ended Dec. 31 were $455 million, a decrease of 5% year-over-year. Net income was $74 million, compared to a net loss of $14 million in the fourth quarter of 2018. Adjusted EBITDA was $102 million, up 3%.

"We had a strong conclusion to 2019,” said CEO Benjamin Gliklich. “In the fourth quarter, stability in Asian electronics and continued cost control offset persisting weakness in our industrial markets and translated to 5% constant currency adjusted EBITDA growth, despite a 4% organic net sales decline. Last year represented the most challenging market conditions we had seen in a decade, resulting in our top line being 4% lower organically; nonetheless, we grew constant currency adjusted EBITDA by 3%. We outperformed our end-markets on the top line by several percentage points and demonstrated the strength of our highly variable cost model, taking out more than $50 million of cost to expand adjusted EBITDA margins by 120 basis points. Most importantly, we generated more than $235 million of free cash flow in 2019. Element Solutions is better off for having managed through this challenging year and well positioned to benefit disproportionately as our end markets recover."

For 2019, electronics net sales decreased 6% to $1.09 billion. Adjusted EBITDA was $253 million, an increase of 2%.

Total net sales for 2019 were $1.84 billion, down 6% year-over-year over. Net income was $80 million, compared to a net loss of $77 million in 2018. Adjusted EBITDA was $417 million, a decrease of 1%.

For 2020, the company expects adjusted EBITDA growth of between 2% and 4% on a constant currency basis and organic net sales growth of approximately 1%.

On Dec. 2, Element Solutions completed the Kester acquisition for $63.9 million net of cash.