KRONOS WORLDWIDE, INC. ANNOUNCES ACQUISITION OF SHARES IN JOINT VENTURE, AMENDMENT TO RECOVERY FACILITY AND QUARTERLY DIVIDEND

Dallas, Texas, July 17, 2024 (GLOBE NEWSWIRE) — Kronos Worldwide, Inc. (NYSE: KRO) today announced the following:

Acquisition of the remaining shares in the joint venture in LPC

Effective July 16, 2024, Kronos Worldwide, Inc. (“Kronos”) acquired a 50% interest in the joint venture in Louisiana Pigment Company, LP (“LPC”) previously held by Venator Investments, Ltd. Prior to the acquisition, Kronos, through a wholly owned subsidiary, held a 50% interest in the joint venture in LPC. Following the acquisition, LPC is an indirect wholly owned subsidiary of Kronos. Kronos acquired the 50% interest in the joint venture that it did not already own for an initial cash payment of $185 million (subject to working capital adjustments) and a potential earn-out payment of up to $15 million based on Kronos’ combined consolidated net income before interest expense, income taxes, depreciation and amortization, or EBITDA, over a two-year period covering calendar years 2025 and 2026.

“This acquisition is a unique opportunity for Kronos to add value to our customers and better serve the North American market,” said James M. Buch, Kronos CEO. “By fully owning the LPC facility, Kronos will expand its product offering and increase sales to new and existing customers while realizing significant synergies, including commercial, overhead and supply chain optimization. By implementing process innovations to increase productivity and improve efficiency using proven technology used in other Kronos facilities, we will be better positioned to serve our customers. LPC is the newest TiO chloride process₂ manufacturing facility operating in the Western world and we are excited to fully integrate LPC as part of Kronos and invest in the future of this world-class facility.”

Kronos previously operated LPC as a joint venture with Venator Materials or Venator Materials’ predecessors since 1993. LPC is located near Lake Charles, LA, and currently has an estimated annual production capacity of 156,000 metric tons. The acquisition was financed with cash on hand and borrowings under Kronos’ global revolving credit facility. Kronos will report LPC as a wholly owned subsidiary beginning with its third-quarter Form 10-Q filing. Kronos may continue to evaluate and explore additional financing options, subject to market conditions.

Amendment to the Revolving Credit Agreement

In connection with the acquisition of a 50% interest in the joint venture and to support Kronos’ overall liquidity needs, Kronos also completed an amendment to its $225 million global revolving credit facility with Wells Fargo. Among other things, the amendment increases the maximum loan amount from $225 million to $300 million, extends the maturity date to 2029 and expands the offering to include LPC and LPC receivables and certain of its inventory in the borrowing base.

Third quarter dividend

The Kronos Board of Directors has declared a quarterly dividend of five cents ($0.05) per share of common stock, a decrease of fourteen cents ($0.14) per share compared to the second quarter of 2024, payable on September 19, 2024 to shareholders of record as of the close of business on September 6, 2024. Commenting on the dividend, Mr. Buch said, “The reduced dividend rate will allow Kronos to focus on maintaining a strong balance sheet while continuing to evaluate strategic investment opportunities. In addition to strengthening liquidity and providing flexibility to cover increased debt service costs, working capital needs and capital improvements resulting from the acquisition of a 50% interest in the LPC joint venture, the new dividend rate will allow Kronos to focus on reducing leverage. We will continue to evaluate the appropriateness of the dividend in the future based on progress toward these priorities, operating results and other relevant factors.”

Kronos Worldwide, Inc. is a leading international manufacturer of titanium dioxide products.

Forward-looking statements

Statements in this press release that address matters that are not historical facts are forward-looking statements that reflect management’s beliefs and assumptions based on information currently available. These forward-looking statements include, but are not limited to, statements regarding the potential impact of the LPC acquisition, including expected synergies, innovations and other benefits, statements regarding the impact of the third quarter dividend reduction and statements regarding future dividend payments. Although Kronos believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that these expectations will prove to be correct. Such statements by their nature involve significant risks and uncertainties that could materially affect expected results, and actual future results could differ materially from those described in such forward-looking statements. Factors that could cause actual future results to differ materially include, but are not limited to, the following:

Future supply and demand for our products
Our ability to deliver anticipated cost savings through strategic and operational initiatives
Our ability to integrate acquisitions, including LPC, into our operations and realize expected synergies and innovations
The extent to which some of our businesses depend on specific market sectors
Cyclicality of our activities
Customer and manufacturer inventory levels
Unexpected or earlier than expected expansion of industry capacity
Changes in raw material costs and other operating costs (such as energy and ore costs)
Changes in the availability of raw materials (e.g. ore)
General global economic and political conditions that harm the world economy, disrupt our supply chain, increase material and energy costs, or reduce demand or perceived demand for our TiO₂ products or impair our ability to operate our facilities (including changes in the level of gross domestic product in various regions of the world, natural disasters, acts of terrorism, global conflicts and public health crises)
Operational disruptions (including, but not limited to, labor disputes, leaks, natural disasters, fires, explosions, unplanned or unscheduled outages, transportation disruptions, certain regional and global events or economic conditions and public health crises)
Technology-related disruptions (including, but not limited to, cyberattacks, software deployments, updates or enhancements, technology processing failures or other events) related to our technology infrastructure that could impact our ability to continue to operate as a business, or to key suppliers that could impact our supply chain, or to key customers that could impact their operations and cause orders to be curtailed or suspended
Competitive products and substitute products
Customer and competitor strategies
Potential consolidation of our competitors
Potential consolidation of our clients
The impact of pricing and production decisions
Competitive technological positions
Potential difficulties in upgrading or implementing accounting and production software systems
Introduction of trade barriers or trade disputes
Currency exchange rate fluctuations (such as changes in the exchange rate between the U.S. dollar and the euro, the Norwegian krone and the Canadian dollar, and the euro and the Norwegian krone) or possible disruptions to our business resulting from uncertainties related to the euro or other currencies
Our ability to renew or refinance credit facilities or other debt instruments in the future
Interest rate changes
Our ability to maintain sufficient liquidity
Final outcome of tax audits, tax settlement initiatives or other tax matters, including future tax reform
Our ability to use income tax attributes whose benefits may or may not have been recognized based on the more likely than unlikely recognition criteria
Environmental issues (such as compliance with emission and wastewater discharge standards for existing and new facilities)
Government laws and regulations and possible changes thereto, including new environmental, health, safety, sustainability or other regulations (such as those aimed at limiting or classifying TiO2)₂or its use)
Pending or possible future legal proceedings or other actions.

If one or more of these risks materialize (or the consequences of such developments worsen) or if underlying assumptions prove incorrect, actual results could differ materially from those projected or expected. Kronos disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of changes in information, future events or otherwise, except as required by law.

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Contact for investors

Bryan A. Hanley
Senior Vice President and Treasurer
Phone 972-233-1700