The Chemours Company (Wilmington, Delaware) has placed its CEO, CFO and one other official on leave as it investigates practices related to ethics hotline complaints, management of working capital and reporting of certain metrics. Chemours shares were down 33% at 12 pm ET on Feb. 29 because of the news.
President and CEO Mark Newman, senior vice president and CFO Jonathan Lock, and vice president, controller and principal accounting officer Camela Wisel were placed on administrative leave pending completion of the review process.
The company appointed Denise Dignam as interim CEO and Matt Abbott as interim CFO. Dignam has been with Chemours since 2015 and has served as president, titanium technologies since March 2023. Abbott was most recently in the role of senior vice president and chief enterprise transformation officer with Chemours.
The scope of the internal review includes processes for reviewing reports made to the Chemours ethics hotline; practices for managing working capital, including the impact on metrics within the company’s incentive plans; and certain non-GAAP metrics included in filings made with the Securities and Exchange Commission or related disclosures, Chemours said.
The company will also evaluate “one or more” potential weaknesses in its internal controls over financial reporting as of Dec. 31, 2023, including the “tone at the top” set by “certain members of senior management” and how information and communication are presented under its current internal control framework.
Chemours expects to report on these weaknesses in its annual report; however, the company does not expect to be able to file its Form 10-K on or before the March 15 deadline because of the delays from the audit. Previously, Chemours’ fourth-quarter and full-year 2023 earnings were already delayed from Feb. 14 to Feb. 28. Since the announced delay in earnings on Feb. 13, Chemours shares were down 45% at 10:00 am ET on Feb. 29.
Newman, Lock and Wisel’s leave is pending the completion of the internal review process, the company said. Three key Chemours executives resigned in the summer of 2023.
Preliminary earnings
With the internal review delaying full results, the company has posted unaudited preliminary year-end results for 2023.
The company expects a net loss for full-year 2023 within $225 million-$235 million, which is far below the net gain of $578 million for full-year 2022; the loss for 2023 will include $746 million in pre-tax litigation settlements, due primarily to a drinking water lawsuit related to polyfluoroalkyl substances and a $153 million charge for restructuring and asset-related incursions, which are partially offset by a $106 million gain from the 2023 sale of its glycolic acid business.
Net sales are expected to be approximately $6.0 billion for full-year 2023, down 11.8% year over year due to lower volumes in the titanium technologies and advanced materials segments, which are partially offset by increases in pricing and volumes in the thermal and specialized solutions segment.
by Jameson Croteau
Source: chemweek.com
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