Albemarle growth story continues with strong second quarter performance

CHARLOTTE, N.C., Aug. 7, 2017

Second quarter 2017 highlights:

• Second quarter net sales were $737.3 million, an increase of 10% over the prior year
• Second quarter earnings were $103.3 million, or $0.92 per diluted share
• Second quarter adjusted EBITDA was $218.9 million, an increase of 15% over the prior year; adjusted diluted earnings per share from continuing operations of $1.13, an increase of 22% over the prior year
• Completed the $250 million accelerated share repurchase program, retiring approximately 2.3 million shares during the first half of 2017

	Three Months Ended								Six Months Ended
	June 30, ARIVA.DE Börsen-Geflüster Kurse Albemarle Corp 121,58 € -0,23%								June 30,
In thousands, except per share amounts	2017				2016				2017				2016
Net sales	$	737,258			$	669,327			$	1,459,321			$	1,326,538
Net income from continuing operations	$	113,689			$	95,586			$	176,346			$	313,822
Net income (loss) attributable to Albemarle Corporation	$	103,333			$	(314,821)			$	154,546			$	(86,635)
Adjusted EBITDA	$	218,941			$	190,471			$	430,317			$	382,504
Diluted earnings (loss) per share attributable to Albemarle Corporation	$	0.92			$	(2.78)			$	1.37			$	(0.77)
Non-operating pension and OPEB items(a)	(0.01)				—				(0.01)				—
Non-recurring and other unusual items(b)	0.21				0.19				0.82				(0.73)
Discontinued operations(c)	—				3.52				—				3.38
Adjusted diluted earnings per share from continuing operations(d)	$	1.13			$	0.93			$	2.18			$	1.88
See accompanying notes (a) through (d) to the condensed consolidated financial information and non-GAAP reconciliations.

Albemarle Corporation (NYSE: ALB) reported second quarter 2017 net sales of $737.3 million, earnings of $103.3 million and adjusted EBITDA of $218.9 million.

"The Albemarle team delivered another quarter of year over year growth while meeting important milestones toward our long-term growth strategy," said Luke Kissam, Albemarle's Chairman, President and CEO. "Total company adjusted EBITDA grew 15% and adjusted diluted EPS grew 22% over the second quarter of last year. This marks the sixth consecutive quarter of year over year revenue growth for the corporation. Our Lithium business continues to deliver strong year over year volume growth, and our major lithium capital expansion projects and exploration for new lithium resources remain on schedule."

Outlook

Based on our strong performance in the first half of 2017, we confirm our guidance of $2.90 to $3.05 billion in net sales, adjusted EBITDA of $835 to $875 million, and adjusted EPS per diluted share of $4.20 to $4.40.

Results

Second quarter 2017 earnings were $103.3 million, or $0.92 per diluted share, compared to a net loss of ($314.8) million, or ($2.78) per diluted share in the second quarter 2016. The increase in 2017 was primarily related to a loss from discontinued operations of $3.52 per diluted share in 2016, as well as the increase in results of our Lithium and Advanced Materials segment. Second quarter 2017 adjusted EBITDA increased by $28.5 million compared to the prior year. Second quarter 2017 adjusted net income from continuing operations was $126.5 million, or $1.13 per diluted share, compared to $105.1 million, or $0.93 per diluted share, for second quarter 2016. See notes to the condensed consolidated financial information for further details. The Company reported net sales of $737.3 million in second quarter 2017, up from net sales of $669.3 million in the second quarter of 2016, driven by the favorable impact of higher sales volumes and pricing impacts of our Lithium and Advanced Materials segment, partially offset by the impact of the divestiture of the minerals-based flame retardants and specialty chemicals business and unfavorable currency exchange impacts.

For the six months ended June 30, 2017, earnings were $154.5 million, or $1.37 per diluted share, compared to a net loss of ($86.6) million, or ($0.77) per diluted share for the six months ended June 30, 2016. The increase in 2017 was primarily driven by a loss from discontinued operations of $3.38 per diluted share in 2016, as well as earnings growth in our Lithium and Advanced Materials segment. For the six months ended June 30, 2017, adjusted EBITDA was $430.3 million compared to $382.5 million for the same period 2016. For the six months ended June 30, 2017, adjusted net income from continuing operations was $245.5 million, or $2.18 per diluted share, compared to $212.2 million, or $1.88 per diluted share, for the same period 2016. See notes to the condensed consolidated financial information for further details. The Company reported net sales for the six months ended June 30, 2017 of $1.46 billion, up from net sales of $1.33 billion, driven by the favorable impact of higher sales volumes in each of our three reportable segments and pricing impacts of our Lithium and Advanced Materials segment, partially offset by the impact of the divestiture of the minerals-based flame retardants and specialty chemicals business and unfavorable currency exchange impacts.

Quarterly Segment Results

Lithium and Advanced Materials reported net sales of $317.9 million in the second quarter of 2017, an increase of 36.2% from second quarter 2016 net sales of $233.4 million. The $84.5 million increase in net sales as compared to prior year was primarily due to favorable pricing impacts and increased sales volumes, partially offset by $1.8 million of unfavorable currency exchange impacts. Adjusted EBITDA for Lithium and Advanced Materials was $132.5 million, an increase of 60.3% from second quarter 2016 results of $82.7 million. The $49.9 million increase in adjusted EBITDA as compared to the prior year was primarily due to increased sales volumes and favorable pricing impacts, partially offset by higher selling, general and administrative costs and $1.7 million of unfavorable currency exchange impacts.

Bromine Specialties reported net sales of $203.9 million in the second quarter of 2017, a decrease of 1.4% from second quarter 2016 net sales of $206.9 million. The $2.9 million decrease in net sales as compared to the prior year was primarily due to lower pricing impacts and $0.6 million of unfavorable currency exchange impacts. Adjusted EBITDA for Bromine Specialties was $62.1 million, a decrease of 6.7% from second quarter 2016 results of $66.6 million. The $4.5 million decrease in adjusted EBITDA as compared to the prior year was primarily due to lower volume and pricing impacts, unfavorable product mix and higher selling, general and administrative costs.

Refining Solutions reported net sales of $184.2 million in the second quarter of 2017, an increase of 3.5% from net sales of $178.0 million in the second quarter of 2016. The $6.2 million increase in net sales as compared to the prior year was primarily due to higher sales volumes, partially offset by unfavorable pricing impacts due to customer and product mix, and $1.4 million of unfavorable currency exchange impacts. Adjusted EBITDA for Refining Solutions was $50.1 million in the second quarter of 2017, a decrease of 18.7% from second quarter 2016 results of $61.6 million. The $11.5 million decrease in adjusted EBITDA as compared to the prior year was primarily due to unfavorable mix impacts and higher costs.

All Other net sales were $30.7 million in the second quarter of 2017, a decrease of 39.4% from net sales of $50.6 million in the second quarter of 2016. The $19.9 million decrease in net sales as compared to the prior year was primarily due to the impact of the divestiture of the minerals-based flame retardants and specialty chemicals business of $12.9 million, as well as lower sales volumes and a change in the pricing contract formula for the fine chemistry services business. All Other adjusted EBITDA was $2.4 million in the second quarter of 2017, an increase of 179.0% from second quarter 2016 results of $0.9 million. The $1.6 million increase in adjusted EBITDA as compared to the prior year was primarily due to lower selling, general and administrative costs, partially offset by the impact of the divestiture of $0.6 million.

In summary, total net sales were $737.3 million in the second quarter of 2017, an increase of $67.9 million, or 10.1%, from second quarter 2016 net sales of $669.3 million. The increase in net sales as compared to prior year was primarily due to favorable pricing impacts and higher sales volumes in our Lithium and Advanced Materials segment, partially offset by the divestiture of the minerals-based flame retardants and specialty chemicals business of $12.9 million and unfavorable currency exchange impacts of $3.8 million. Total adjusted EBITDA was $218.9 million in the second quarter of 2017, an increase of $28.5 million, or 14.9%, from second quarter 2016 adjusted EBITDA of $190.5 million. The increase in adjusted EBITDA as compared to prior year was primarily due to the impact of higher sales volumes and favorable pricing impacts, partially offset by higher selling, general and administrative costs and the divestiture of the minerals-based flame retardants and specialty chemicals business of $0.6 million.

Corporate Results

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