Eastman Chemical Company [NYSE:EMN] today provided additional information regarding the impact of an operational incident at its Kingsport, Tennessee, manufacturing facility.
On January 31, 2022, the company had an operational incident at its Kingsport site as a result of a steam line failure. Per Eastman safety processes, all manufacturing operations at the site were safely shut down following the incident. All areas of the manufacturing facility are safely returning to normal operations as quickly as possible. The primary impacted area is specialty copolyesters, which is expected to take 4-6 weeks to fully recover. In order to minimize the impact on specialty copolyester customers, Eastman is bringing forward a normal four-week spring maintenance shutdown from late March to now occur during the current repair process.
“I am incredibly thankful that no one was seriously injured during this incident and am grateful to the Eastman team for their quick response to the situation. It’s because of their dedication and expertise that I am confident that we will restore the site to normal operations safely and expeditiously,” said Mark Costa, Board Chair and CEO. “We are committed to being a caring and responsible community neighbor and a reliable supplier. We greatly appreciate the support and understanding of our Kingsport community, particularly our near neighbors, and our global customers, as we work through this incident.”
While the company continues to assess the financial impact of the incident, including pulling forward fixed and maintenance costs into the first quarter and an expected modest impact on sales volume in specialty copolyesters and acetate tow, first-quarter earnings per share are expected to be between $2.05 and $2.25. This includes strong earnings in January, reflecting robust underlying business conditions. In addition, for full-year 2022, the company reaffirms its expectation for adjusted EPS to be between $9.50 and $10 and maintains previously provided segment-level guidance. Specialty copolyesters is reported through the Advanced Materials segment and acetate tow is reported through the Fibers segment.
Forward-Looking Statements and Non-GAAP Financial Measures
This news release includes forward-looking statements concerning current expectations and certain assumptions regarding the impact of the Kingsport operational incident. Such expectations and assumptions are based upon certain preliminary information, internal estimates, and management assumptions, expectations, and plans, and are subject to a number of risks and uncertainties inherent in projecting future conditions, events, and results. Actual results could differ materially from expectations and assumptions expressed in the forward-looking statements if one or more of the underlying assumptions or expectations prove to be inaccurate or are unrealized. Important factors that could cause actual results to differ materially from such expectations are and will be detailed in the company’s filings with the Securities and Exchange Commission, including the quarterly report on Form 10-Q filed for third quarter 2021 available, and the annual report on Form 10-K to be filed for full-year 2021 and to be available, on the Eastman web site at www.eastman.com in the Investors, SEC Filings section.
The full-year 2022 projected adjusted EPS exclude any non-core, unusual, or nonrecurring items. Our financial results forecasts do not include non-core items (such as mark-to-market pension and other postretirement benefit gain or loss and asset impairments and restructuring charges) or any unusual or non-recurring items, and we accordingly are unable to reconcile projected adjusted EPS excluding non-core and any unusual or non-recurring items to reported GAAP earnings without unreasonable efforts.
Founded in 1920, Eastman is a global specialty materials company that produces a broad range of products found in items people use every day. With the purpose of enhancing the quality of life in a material way, Eastman works with customers to deliver innovative products and solutions while maintaining a commitment to safety and sustainability. The company’s innovation-driven growth model takes advantage of world-class technology platforms, deep customer engagement, and differentiated application development to grow its leading positions in attractive end markets such as transportation, building and construction, and consumables. As a globally inclusive and diverse company, Eastman employs approximately 14,000 people around the world and serves customers in more than 100 countries. The company had 2021 revenues of approximately $10.5 billion and is headquartered in Kingsport, Tennessee, USA. For more information, visit www.eastman.com.