A SCHULMAN INC AKRON, Ohio, Oct. 20, 2015 /PRNewswire/ -- A. Schulman, Inc. (Nasdaq: SHLM) today announced earnings for the fiscal 2015 fourth quarter ended August 31, 2015.
Bernard Rzepka, president and chief executive officer, said, "Through our transformational acquisition of Citadel, we made significant strides toward our strategic vision of becoming the premier plastics solutions provider. At the same time, we continued to deliver strong operational and financial results. For three consecutive years, excluding the impact from foreign currency, we achieved year-over-year growth in sales, gross margin and EBITDA. These results give us confidence that we have the team and the tools in place to deliver further profitable growth in fiscal 2016 and beyond."
Joseph Levanduski, executive vice president & chief financial officer, said, "Through our intense efforts, we overcame significant foreign currency headwinds and improved our adjusted consolidated gross profit by 10% for the year and 28% for the quarter. Our operational focus, acquisitions and organic growth initiatives collectively delivered these strong results. Since the acquisition of Citadel, we have made steady progress in debt reduction and have succeeded in lowering debt levels from the June opening balance sheet by $64 million. We are on track to achieve a 2.5x net leverage within fiscal 2017, while supporting our growth initiatives."
Engineered Plastics Consolidation
As part of the integration of its Citadel Plastics acquisition announced earlier this year, the Company is consolidating its United States and Canada ("USCAN") production facilities. The Company will close three facilities in Evansville, Indiana and the production from these facilities will be consolidated into other facilities in Evansville to improve our capacity utilization. Additionally, the Company will relocate production of its Engineered Plastics products from its Akron, Ohio plant to one of the Evansville facilities. The Company intends to invest in our Akron plant in order to grow our Masterbatch product family. Overall, the Company expects to reduce headcount by approximately 26 people.
On a pre-tax basis, the Company expects the Engineered Plastic consolidation to deliver approximately $9.5 million in annual savings, of which approximately $4 million is expected in fiscal 2016 and the remainder will be recognized in fiscal year 2017. The Company expects approximately $2 to $3 million of pretax employee-related cash and other charges as well as approximately $5 to $6 million of pretax machinery and equipment accelerated depreciation. Costs associated with the plan are expected to be recognized through December 2016 as the Company completes the facility consolidation activities.
"We are swiftly executing our integration of Citadel," said Rzepka. "While these decisions are not easy for those impacted, the additional Citadel plants in the Evansville area required that we evaluate capacity utilization and manufacturing capabilities and achieve efficiencies and cost savings. The consolidation of our Engineered Plastics business illustrates our continuing commitment to right-sizing our capacity and affirms our commitment to capturing our stated synergy savings of $25 million by the end of 2016."
Fiscal Fourth-Quarter Results
Consolidated net sales for the fiscal 2015 fourth quarter were $674.0 million, compared with $627.4 million in the same prior-year quarter. Net sales from Citadel and prior 2014 acquisitions, which includes legacy volume consolidated during the integration process, contributed $128.5 million of revenue during the quarter. These contributions were partially offset by $79.8 million of unfavorable foreign currency translation. Adjusted gross margin in the fourth quarter as a percent of net sales improved to 16.2% compared with 13.6% in the prior-year period.
The Company reported profit from continuing operations of $0.75 per diluted share. On an adjusted basis, excluding financing, restructuring and acquisitions-related costs, the Company generated net income of $0.64 per diluted share.
Europe, Middle East and Africa ('EMEA") net sales were $326.7 million compared with $388.6 million in the same prior-year period. The unfavorable impact of foreign currency translation was $64.1 million. EMEA adjusted gross profit was $44 million. Excluding the negative impact of foreign currency translation of $8.3 million, adjusted gross profit increased by $2.2 million, or 4.5%, primarily due to improved product mix as well as the incremental contribution of the Specialty Plastics acquisition.
Net sales for the U.S. and Canada ("USCAN") were $195.3 million in the fourth quarter, an increase of 41% compared with the same prior-year period primarily as a result of the Citadel acquisition. USCAN adjusted gross profit was $34.1 million, an increase of $11.7 million from the same prior-year period. The strong gross margin gains came both from Citadel's contribution, and improvements across A. Schulman's legacy businesses.
Latin America's ("LATAM") net sales for the quarter were $45.3 million, a decrease of $4.2 million compared with the same prior-year period. Excluding the unfavorable impact of foreign currency translation of $10.5 million, core revenue growth accelerated to 12.7%. LATAM adjusted gross profit was $9.9 million, an increase of $3.7 million primarily due to the benefits of improved product mix and operations. Operating margins improved from 4.2% to 12.1% during the quarter.
Asia Pacific ("APAC") reported net sales were $49.5 million, which included acquisition contribution of $2.8 million, and a negative foreign exchange impact of $4.5 million. APAC adjusted gross profit was $6.8 million, an increase of $0.3 million compared with the prior-year period. Gross profit benefited from smart savings initiatives and increased organic volume. Operating margins improved from 5.3% to 7.1% during the quarter.
Engineered Composites ("EC") net sales for the quarter were $57.1 million from the acquisition date of June 1, 2015. Organic volumes in the legacy EC business improved over historical levels. EC gross profit for the quarter was $14.5 million, or 25.4% of net sales.
Working Capital/Cash Flow
Cash provided from operations was $60.2 million in the twelve months ended August 31, 2015. Working capital days were 64 days in the fourth quarter of fiscal 2015 versus 57 days at the end of the comparable period.
Capital expenditures for fiscal 2015 were $42.6 million compared with $35.1 million last year. These expenditures were primarily related to strategic investments in the Company's global manufacturing facilities and technical innovation and collaboration centers focused on organic growth and new product development. During the year, the Company declared and paid quarterly cash dividends to common shareholders of $24.0 million, or $0.82 per common share consistent with our past strategy of providing an attractive yield to shareholders in addition to share price appreciation.
Year-to-Date Results
Net sales for the year were $2.4 billion, compared with $2.5 billion for the same prior-year period. Fiscal year net sales results included a negative foreign currency translation of $257.1 million, and contributions from acquisitions of $258.3 million.
Operating income was $70.4 million, a decrease of $11.9 million compared with the same prior-year period. Total operating income before certain items was $120.7 million, an increase of $20.9 million or 21% compared with last year. Excluding the negative impact of foreign currency translation of $11.8 million, total operating income before certain items increased 33% versus the comparable period. Organic growth contributed an incremental $10.3 million while recent acquisitions added $22.4 million.
Business Outlook
The Company initiates a fiscal 2016 adjusted net income guidance range of $2.80 to $2.85 per diluted share including the accretive impact of the Citadel acquisition.
"We are excited about the opportunities that Citadel brings to us. We've taken a transformative step forward in achieving our long-term strategic goals, one of them being rebalancing our regional footprint. Given the current volatile markets, we expect another challenging year; however, we are committed to achieving further profitable growth through a focus on execution, including the continued seamless integration of Citadel," Rzepka added.
Conference Call on the Web
A live Internet broadcast of A. Schulman's conference call regarding fiscal 2015 fourth-quarter earnings can be accessed at 10:00 a.m. Eastern Time on October 21, 2015, on the Company's website, www.aschulman.com. An archived replay of the call will also be available on the website.
Investor Presentation Materials
Senior executives of the Company may participate in meetings with analysts and investors throughout the fiscal year. The Company has posted presentation materials, portions of which may be used during such meetings, in the Investors section of its website at www.aschulman.com. The presentation will remain on the website as long as it is in use.
About A. Schulman, Inc.
A. Schulman, Inc. is a leading international supplier of high-performance plastic compounds and resins headquartered in Akron, Ohio. Since 1928, the Company has been providing innovative solutions to meet its customers' demanding requirements. The Company's customers span a wide range of markets such as packaging, mobility, building & construction, electronics & electrical, agriculture, personal care & hygiene, sports, leisure & home, custom services and others. The Company employs approximately 5,000 people and has 58 manufacturing facilities globally. A. Schulman reported net sales of approximately $2.4 billion for the fiscal year ended August 31, 2015. Additional information about A. Schulman can be found at www.aschulman.com.
Use of Non-GAAP Financial Measures
This release includes certain financial information determined by methods other than in accordance with accounting principles generally accepted in the United States ("GAAP"). These non-GAAP financial measures include segment gross profit, SG&A expenses excluding certain items, segment operating income, operating income before certain items, net income excluding certain items, net income per diluted share excluding certain items and adjusted EBITDA, as discussed further in the Reconciliation of GAAP and Non-GAAP Financial Measures below. These non-GAAP financial measures are considered relevant to aid analysis and understanding of the Company's results and business trends. However, non-GAAP measures are not in accordance with, nor are they a substitute for, GAAP measures, and tables included in this release reconcile each non-GAAP financial measure with the most directly comparable GAAP financial measure. The most directly comparable GAAP financial measures for these purposes are gross profit, SG&A expenses, operating income, net income and net income per diluted share. The Company's non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures, and should be read only in conjunction with the Company's consolidated financial statements prepared in accordance with GAAP.
While the Company believes that these non-GAAP financial measures provide useful supplemental information to investors, there are very significant limitations associated with their use. These non-GAAP financial measures are not prepared in accordance with GAAP, August not be reported by all of the Company's competitors and August not be directly comparable to similarly titled measures of the Company's competitors due to potential differences in the exact method of calculation. The Company compensates for these limitations by using these non-GAAP financial measures as supplements to GAAP financial measures and by reviewing the reconciliations of the non-GAAP financial measures to their most comparable GAAP financial measures.
Cautionary Statements
A number of the matters discussed in this document that are not historical or current facts deal with potential future circumstances and developments and August constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the fact that they do not relate strictly to historic or current facts and relate to future events and expectations. Forward-looking statements contain such words as "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. Forward-looking statements are based on management's current expectations and include known and unknown risks, uncertainties and other factors, many of which management is unable to predict or control, that August cause actual results, performance or achievements to differ materially from those expressed or implied in the forward-looking statements. Important factors that could cause actual results to differ materially from those suggested by these forward-looking statements, and that could adversely affect the Company's future financial performance, include, but are not limited to, the following:
-- worldwide and regional economic, business and political conditions,
including continuing economic uncertainties in some or all of the
Company's major product markets or countries where the Company has
operations;
-- the effectiveness of the Company's efforts to improve operating margins
through sales growth, price increases, productivity gains, and improved
purchasing techniques;
-- competitive factors, including intense price competition;
-- fluctuations in the value of currencies in areas where the Company
operates;
-- volatility of prices and availability of the supply of energy and raw
materials that are critical to the manufacture of the Company's
products, particularly plastic resins derived from oil and natural gas;
-- changes in customer demand and requirements;
-- effectiveness of the Company to achieve the level of cost savings,
productivity improvements, growth and other benefits anticipated from
acquisitions, joint ventures and restructuring initiatives;
-- escalation in the cost of providing employee health care;
-- uncertainties regarding the resolution of pending and future litigation
and other claims;
-- the performance of the global automotive market as well as other markets
served;
-- further adverse changes in economic or industry conditions, including
global supply and demand conditions and prices for products;
-- operating problems with our information systems as a result of system
security failures such as viruses, cyber-attacks or other causes;
-- the impact of the indebtedness incurred to finance the Citadel
acquisition;
-- integration of the business of Citadel with our existing business,
including the risk that the integration will be more costly or more time
consuming and complex than anticipated;
-- our ability to achieve the anticipated synergies, cost savings and other
benefits from the Citadel acquisition;
-- transaction and acquisition-related costs incurred in connection with
the Citadel acquisition and related transactions; and
-- substantial time devoted by management to the integration of the Citadel
acquisition.
The risks and uncertainties identified above are not the only risks the Company faces. Additional risk factors that could affect the Company's performance are set forth in the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2015. In addition, risks and uncertainties not presently known to the Company or that it believes to be immaterial also may adversely affect the Company. Should any known or unknown risks or uncertainties develop into actual events, or underlying assumptions prove inaccurate, these developments could have material adverse effects on the Company's business, financial condition and results of operations.
SHLM_ALL
A. SCHULMAN, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended August 31, Year ended August 31,
----------------------------- ---------------------
2015 2014 2015 2014
---- ---- ---- ----
Unaudited
(In thousands, except per share data)
Net sales $674,019 $627,358 $2,392,225 $2,446,998
Cost of sales 568,684 542,721 2,031,215 2,116,990
Selling, general and administrative
expenses 80,762 60,838 276,244 242,486
Restructuring expense 3,808 300 14,338 4,883
Asset impairment - - - 104
Curtailment and settlement (gains)
losses - 214 - 214
--- --- --- ---
Operating income 20,765 23,285 70,428 82,321
Interest expense 15,325 2,391 22,613 8,503
Bridge financing fees - - 18,750 -
Foreign currency transaction (gains)
losses 266 86 3,363 2,206
Other (income) expense, net (538) (242) (1,438) (720)
Gain on early extinguishment of debt - - (1,290) -
--- --- ------ ---
Income (loss) from continuing
operations before taxes 5,712 21,050 28,430 72,332
Provision (benefit) for U.S. and
foreign income taxes (18,302) 5,886 499 18,542
------- ----- --- ------
Income (loss) from continuing
operations 24,014 15,164 27,931 53,790
Income (loss) from discontinued
operations, net of tax (47) 223 (133) 3,202
--- --- ---- -----
Net income (loss) 23,967 15,387 27,798 56,992
Noncontrolling interests (279) (215) (1,169) (799)
Net income (loss) attributable to A.
Schulman, Inc. 23,688 15,172 26,629 56,193
------ ------ ------ ------
Convertible special stock dividends (1,875) - (2,438) -
Net income (loss) available to A.
Schulman, Inc. common stockholders $21,813 $15,172 $24,191 $56,193
======= ======= ======= =======
Weighted-average number of shares outstanding:
Basic 29,220 29,088 29,149 29,061
Diluted 29,486 29,517 29,483 29,362
Basic earnings per share available to A. Schulman, Inc. common stockholders
Income (loss) from continuing
operations $0.75 $0.51 $0.83 $1.82
Income (loss) from discontinued
operations $ - $0.01 $ - $0.11
--- --- ----- --- --- -----
Net income (loss) available to A.
Schulman, Inc. common stockholders $0.75 $0.52 $0.83 $1.93
===== ===== ===== =====
Diluted earnings per share available to A. Schulman, Inc. common stockholders
Income (loss) from continuing
operations $0.75 $0.51 $0.83 $1.80
Income (loss) from discontinued
operations $(0.01) $0.01 $(0.01) $0.11
------ ----- ------ -----
Net income (loss) available to A.
Schulman, Inc. common stockholders $0.74 $0.52 $0.82 $1.91
===== ===== ===== =====
Cash dividends per common share $0.205 $0.200 $0.820 $0.800
====== ====== ====== ======
Cash dividends per share of
convertible special stock $14.500 $ - $14.500 $ -
======= === === ======= === ===
A. SCHULMAN, INC.
CONSOLIDATED BALANCE SHEETS
August 31, August 31,
2015 2014
---- ----
Unaudited
(In thousands)
ASSETS
Current assets:
Cash and cash equivalents $96,872 $135,493
Accounts receivable, net 413,943 384,444
Inventories 317,328 292,141
Prepaid expenses and other
current assets 60,205 40,473
------ ------
Total current assets 888,348 852,551
------- -------
Property, plant and equipment, at cost:
Land and improvements 31,674 28,439
Buildings and leasehold
improvements 164,759 160,858
Machinery and equipment 427,183 398,563
Furniture and fixtures 34,393 41,255
Construction in progress 23,866 16,718
------ ------
Gross property, plant and
equipment 681,875 645,833
Accumulated depreciation 367,381 391,912
Net property, plant and
equipment 314,494 253,921
------- -------
Deferred charges and other
noncurrent assets 90,749 65,079
Goodwill 623,583 202,299
Intangible assets, net 434,537 138,634
------- -------
Total assets $2,351,711 $1,512,484
========== ==========
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable $305,385 $314,957
U.S. and foreign income
taxes payable 4,205 6,385
Accrued payroll, taxes and
related benefits 56,192 54,199
Other accrued liabilities 70,824 46,054
Short-term debt 20,710 31,748
------ ------
Total current liabilities 457,316 453,343
Long-term debt 1,045,349 339,546
Pension plans 117,889 129,949
Deferred income taxes 115,537 23,826
Other long-term liabilities 22,885 29,369
Total liabilities 1,758,976 976,033
--------- -------
Commitments and contingencies
Stockholders' equity:
Convertible special stock,
no par value 120,289 -
Common stock, $1 par value,
authorized -75,000 shares,
issued -48,369 shares in
2015 and 48,185 shares in
2014 48,369 48,185
Additional paid-in capital 274,319 268,545
Accumulated other
comprehensive income (loss) (83,460) (16,691)
Retained earnings 607,690 606,898
Treasury stock, at cost,
19,077 shares in 2015 and
18,973 shares in 2014 (383,121) (379,894)
-------- --------
Total A. Schulman, Inc.'s
stockholders' equity 584,086 527,043
------- -------
Noncontrolling interests 8,649 9,408
----- -----
Total equity 592,735 536,451
Total liabilities and equity $2,351,711 $1,512,484
========== ==========
A. SCHULMAN, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year ended August 31,
---------------------
2015 2014
---- ----
Unaudited
(In thousands)
Operating from continuing and
discontinued operations:
Net income $27,798 $56,992
Adjustments to reconcile net
income to net cash provided
from (used in) operating
activities:
Depreciation 37,257 33,697
Amortization 21,983 14,207
Deferred tax provision (19,253) (3,007)
Pension, postretirement benefits
and other compensation 7,560 10,802
Restricted stock compensation -
CEO transition costs, net of
cash 4,789 -
Asset impairment - 104
Curtailment and settlement
(gains) losses - 214
Gain on sale of assets from
discontinued operations - (3,365)
Changes in assets and
liabilities, net of
acquisitions:
Accounts receivable (2,395) (5,875)
Inventories (17,382) 7,099
Accounts payable (8,139) (3,497)
Income taxes (3,342) (1,372)
Tax (windfall) shortfall related
to share-based incentive
compensation (506) -
Accrued payroll and other
accrued liabilities 18,359 5,189
Other assets and long-term
liabilities (6,559) 1,954
------ -----
Net cash provided from (used in)
operating activities 60,170 113,142
------ -------
Investing from continuing and
discontinued operations:
Expenditures for property, plant
and equipment (42,587) (35,089)
Proceeds from the sale of assets 1,985 6,004
Investment in equity investees (12,456) -
Business acquisitions, net of
cash (808,258) (206,625)
-------- --------
Net cash provided from (used in)
investing activities (861,316) (235,710)
-------- --------
Financing from continuing and
discontinued operations:
Cash dividends paid to common
stockholders (24,024) (23,665)
Cash dividends paid to special
stockholders (1,813) -
Increase (decrease) in short-
term debt (8,759) 13,774
Borrowings on long-term debt 1,430,513 795,745
Repayments on long-term debt
including current portion (713,717) (653,894)
Payment of debt issuance costs (15,007) (1,782)
Noncontrolling interests'
contributions (distributions) (1,750) 600
Tax windfall (shortfall) related
to share-based incentive
compensation 506 -
Issuances of common stock,
common and treasury 289 487
Issuances of convertible special
stock, net 120,289 -
Redemptions of common stock (4,999) (361)
Purchases of treasury stock (3,335) (1,116)
------ ------
Net cash provided from (used in)
financing activities 778,193 129,788
------- -------
Effect of exchange rate changes
on cash (15,668) (5,781)
------- ------
Net increase (decrease) in cash
and cash equivalents (38,621) 1,439
------- -----
Cash and cash equivalents at
beginning of year 135,493 134,054
Cash and cash equivalents at end
of year $96,872 $135,493
======= ========
Cash paid during the year for:
Interest $11,187 $7,578
Income taxes $22,651 $21,720
A. SCHULMAN, INC.
Reconciliation of GAAP and Non-GAAP Financial Measures
Unaudited
Three months ended August 31, 2015 Cost of Sales Gross SG&A Restructuring Operating Income Operating Non Operating Income tax expense Net Income
Margin Expense Income per (income) (benefit) Available to ASI
Pound Expense Common
Stockholders Diluted EPS
---------------------------------- ------------- ------ ---- -------------- ---------------- ---------- -------------- ------------------ ----------------- -----------
(In thousands, except for %'s, per pound and per share data)
As reported $568,684 15.6% $80,762 $3,808 $20,765 $0.032 $15,053 $(18,302) $21,813 $0.74
Certain items:
Asset write-downs (1) (81) - - 81 - 28 53 -
Costs related to acquisitions (2) (93) (9,143) - 9,236 (80) 116 9,200 0.31
Restructuring and related costs (3) (1,041) (3,259) (3,808) 8,108 - 1,181 6,927 0.23
Inventory step-up (4) (2,741) - - 2,741 - 110 2,631 0.09
Acquisition-related interest (5) - - - - (1,312) 122 1,190 0.05
Tax benefits (charges) (6) - - - - - 23,106 (23,106) (0.78)
Loss (income) from discontinued operations - - - - - 47 -
--- --- --- --- ---
Total certain items (3,956) 0.6% (12,402) (3,808) 20,166 0.031 (1,392) 24,663 (3,058) (0.10)
------ --- ------- ------ ------ ----- ------ ------ ------ -----
As Adjusted $564,728 16.2% $68,360 $ - $40,931 $0.063 $13,661 $6,361 $18,755 $0.64
======== ==== ======= === === ======= ====== ======= ====== ======= =====
Percentage of Revenue 10.1% 6.1% 2.8%
==== === ===
Effective Tax Rate 23.3%
====
Three months ended August 31, 2014 Cost of Sales Gross SG&A Restructuring Operating Income Operating Non Operating Income tax expense Net Income
Margin Expense Income per (income) (benefit) Available to ASI
Pound Expense Common
Stockholders Diluted EPS
---------------------------------- ------------- ------ ---- -------------- ---------------- ---------- -------------- ------------------ ----------------- -----------
(In thousands, except for %'s, per pound and per share data)
As reported $542,721 13.5% $60,838 $300 $23,285 $0.043 $2,235 $5,886 $15,172 $0.52
Certain items:
Costs related to acquisitions (2) - (2,644) - 2,644 - 9 2,635 0.09
Restructuring and related costs (3) (285) (710) (300) 1,509 - 46 1,463 0.05
Inventory step-up (4) (269) - - 269 - (54) 323 0.01
Tax benefits (charges) (6) - - - - - (110) 110 -
Loss (income) from discontinued operations - - - - - - (222) (0.01)
--- --- --- --- ----
Total certain items (554) 0.1% (3,354) (300) 4,422 0.009 - (109) 4,309 0.14
---- --- ------ ---- ----- ----- --- ---- ----- ----
As Adjusted $542,167 13.6% $57,484 $ - $27,707 $0.052 $2,235 $5,777 $19,481 $0.66
======== ==== ======= === === ======= ====== ====== ====== ======= =====
Percentage of Revenue 9.2% 4.4% 3.1%
=== === ===
Effective Tax Rate 22.7%
====
A. SCHULMAN, INC.
Reconciliation of GAAP and Non-GAAP Financial Measures.
Con't
Year Ended August 31, 2015 Cost of Sales Gross SG&A Restructuring Operating Income Operating Non Operating Income tax Net Income
Margin Expense Income per (income) expense Available to ASI
Pound Expense (benefit) Common
Stockholders Diluted EPS
-------------------------- ------------- ------ ---- -------------- ---------------- ---------- -------------- ----------- ----------------- -----------
(In thousands, except for %'s, per pound and per share data)
As reported $2,031,215 15.1% $276,244 $14,338 $70,428 $0.031 $41,998 $499 $24,191 $0.82
Certain items:
Asset write-downs (1) (408) - - 408 - 28 380 0.01
Costs related to acquisitions (2) (267) (16,941) - 17,208 (81) 417 16,872 0.57
Restructuring and related costs (3) (1,388) (7,685) (14,338) 23,411 - 4,335 19,076 0.65
Gain on early extinguishment of debt (7) - - - - 1,290 (427) (863) (0.03)
CEO transition costs (8) - (6,167) - 6,167 - - 6,167 0.21
Inventory step-up (4) (3,082) - - 3,082 - 212 2,870 0.10
Acquisition-related interest (5) - - - - (20,445) 121 20,324 0.69
Tax benefits (charges) (6) - - - - - 19,265 (19,265) (0.65)
Loss (income) from discontinued operations 133 -
---
Total certain items (5,145) 0.2% (30,793) (14,338) 50,276 0.023 (19,236) 23,951 45,694 1.55
------ --- ------- ------- ------ ----- ------- ------ ------ ----
As Adjusted $2,026,070 15.3% $245,451 $ - $120,704 $0.054 $22,762 $24,450 $69,885 $2.37
========== ==== ======== === === ======== ====== ======= ======= ======= =====
Percentage of Revenue 10.3% 5.0% 2.9%
==== === ===
Effective Tax Rate 25.0%
====
Year Ended August 31, 2014 Cost of Sales Gross SG&A Restructuring Operating Income Operating Non Operating Income tax Net Income
Margin Expense Income per (income) expense Available to ASI
Pound Expense (benefit) Common
Stockholders Diluted EPS
-------------------------- ------------- ------ ---- -------------- ---------------- ---------- -------------- ----------- ----------------- -----------
(In thousands, except for %'s, per pound and per share data)
As reported $2,116,990 13.5% $242,486 $4,883 $82,321 $0.039 $9,989 $18,542 $56,193 $1.91
Certain items:
Asset write-downs (1) (107) - - 211 - 34 177 0.01
Costs related to acquisitions (2) (34) (5,987) - 6,021 (8) 154 5,875 0.20
Restructuring and related costs (3) (935) (3,800) (4,883) 9,832 (287) 963 9,156 0.31
Inventory step-up (4) (1,468) - - 1,468 - 44 1,424 0.05
Tax benefits (charges) (6) - - - - - 316 (316) (0.01)
Loss (income) from discontinued operations (3,202) (0.11)
------
Total certain items (2,544) 0.1% (9,787) (4,883) 17,532 0.009 (295) 1,511 13,114 0.45
------ --- ------ ------ ------ ----- ---- ----- ------ ----
As Adjusted $2,114,446 13.6% $232,699 $ - $99,853 $0.048 $9,694 $20,053 $69,307 $2.36
========== ==== ======== === === ======= ====== ====== ======= ======= =====
Percentage of Revenue 9.5% 4.1% 2.8%
=== === ===
Effective Tax Rate 22.2%
====
1 - Asset write-downs primarily relate to asset
impairments and accelerated depreciation.
2 - Costs related to acquisitions primarily
include third party professional, legal, IT and
other expenses associated with successful and
unsuccessful full or partial acquisition and
divestiture/dissolution transactions, as well as
certain employee-related expenses such as
travel, one-time bonuses and post-acquisition
severance separate from a formal restructuring
plan.
3 -Restructuring and related costs include items
such as employee severance charges, lease
termination charges, curtailment gains/losses,
other employee termination costs and charges
related to the reorganization of the legal entity
structure.
4 - Inventory step-up costs represent the
amortization of adjustments to fair value of
inventory acquired for acquisition purchase
accounting.
5 - Primarily relates to bridge financing fees.
6 - Tax benefits (charges) represent the
Company's adjustment of reported tax expense to
non-GAAP tax expense based on the overall annual
non-GAAP effective tax rate.
7 - Represents a pre-tax net gain of $1.3
million on the early extinguishment of euro notes
repaid in February 2015.
8 - CEO transition costs represent a one-time
charge for the modification and accelerated
vesting upon retirement of the outstanding equity
compensation awards granted to Joseph M. Gingo in
2013 and 2014.
A. SCHULMAN, INC.
ADJUSTED EBITDA RECONCILIATION
Three months ended August 31, Year ended August 31,
----------------------------- ---------------------
2015 2014 2015 2014
---- ---- ---- ----
Unaudited
(In thousands)
Net income available to
A. Schulman, Inc.
common stockholders,
as adjusted (1) $18,755 $19,481 $69,885 $69,307
Interest expense, as
adjusted (2) 14,014 2,392 20,918 8,216
Provision for U.S. and
foreign income taxes,
as adjusted (1) 6,361 5,777 24,450 20,053
Depreciation, as
adjusted (3) 10,664 8,945 36,821 33,589
Amortization 10,096 3,864 21,983 14,172
Minority Interest 279 215 1,169 799
Special Stock Dividends 1,875 - 2,438 -
----- --- ----- ---
EBITDA, as adjusted $62,044 $40,674 $177,664 $146,136
======= ======= ======== ========
1 - For a list of certain items
to reconcile between "net income
available to A. Schulman, Inc.
common stockholders" and "net
income available to A. Schulman,
Inc. common stockholders, as
adjusted", refer to the
reconciliation of GAAP and non-
GAAP financial measures.
2 - Adjusted interest expense
excludes bridge financing fees
and the write-off of deferred
financing costs related to
obtaining new financing during
the third quarter of fiscal 2015.
3 -Adjusted depreciation excludes
accelerated depreciation charges
as they are already included in
(1).
A. SCHULMAN, INC.
SUPPLEMENTAL SEGMENT INFORMATION
Net Sales Pounds Sold
--------- -----------
Three months ended August 31,
-----------------------------
EMEA 2015 2014 $ Change % Change 2015 2014 Lbs. Change % Change
---- ---- ---- -------- -------- ---- ---- ----------- --------
(In thousands, except for %'s)
Custom performance
colors $29,253 $35,138 $(5,885) (16.7)% 11,768 11,514 254 2.2%
Masterbatch solutions 100,787 115,889 (15,102) (13.0)% 99,920 91,599 8,321 9.1%
Engineered plastics 96,201 114,033 (17,832) (15.6)% 70,895 71,881 (986) (1.4)%
Specialty powders 40,062 43,211 (3,149) (7.3)% 43,576 44,873 (1,297) (2.9)%
Distribution services 60,460 80,322 (19,862) (24.7)% 78,873 94,941 (16,068) (16.9)%
------ ------ ------- ------ ------ ------ ------- ------
Total EMEA $326,763 $388,593 $(61,830) (15.9)% 305,032 314,808 (9,776) (3.1)%
======== ======== ======== ====== ======= ======= ====== =====
Net Sales Pounds Sold
--------- -----------
Three months ended August 31,
-----------------------------
USCAN 2015 2014 $ Change % Change 2015 2014 Lbs. Change % Change
----- ---- ---- -------- -------- ---- ---- ----------- --------
(In thousands, except for %'s)
Custom performance
colors $12,734 $9,757 $2,977 30.5% 4,358 3,020 1,338 44.3%
Masterbatch solutions 37,033 41,567 (4,534) (10.9)% 53,061 54,473 (1,412) (2.6)%
Engineered plastics 104,158 42,336 61,822 146.0% 101,198 27,084 74,114 273.6%
Specialty powders 22,692 28,526 (5,834) (20.5)% 33,776 43,895 (10,119) (23.1)%
Distribution services 18,655 16,587 2,068 12.5% 23,403 17,036 6,367 37.4%
------ ------ ----- ---- ------ ------ ----- ----
Total USCAN $195,272 $138,773 $56,499 40.7% 215,796 145,508 70,288 48.3%
======== ======== ======= ==== ======= ======= ====== ====
Net Sales Pounds Sold
--------- -----------
Three months ended August 31,
-----------------------------
LATAM 2015 2014 $ Change % Change 2015 2014 Lbs. Change % Change
----- ---- ---- -------- -------- ---- ---- ----------- --------
(In thousands, except for %'s)
Custom performance
colors $1,129 $1,061 $68 6.4% 488 441 47 10.7%
Masterbatch solutions 25,232 24,592 640 2.6% 17,895 16,394 1,501 9.2%
Engineered plastics 11,363 13,055 (1,692) (13.0)% 9,137 9,454 (317) (3.4)%
Specialty powders 7,604 10,857 (3,253) (30.0)% 7,607 9,728 (2,121) (21.8)%
Distribution services - - - N/A - - - N/A
--- --- --- --- --- ---
Total LATAM $45,328 $49,565 $(4,237) (8.5)% 35,127 36,017 (890) (2.5)%
======= ======= ======= ===== ====== ====== ==== =====
Net Sales Pounds Sold
--------- -----------
Three months ended August 31,
-----------------------------
APAC 2015 2014 $ Change % Change 2015 2014 Lbs. Change % Change
---- ---- ---- -------- -------- ---- ---- ----------- --------
(In thousands, except for %'s)
Custom performance
colors $2,544 $1,346 $1,198 89.0% 2,826 1,048 1,778 169.7%
Masterbatch solutions 20,070 19,991 79 0.4% 20,907 18,442 2,465 13.4%
Engineered plastics 25,433 24,906 527 2.1% 20,444 16,640 3,804 22.9%
Specialty powders 1,148 3,984 (2,836) (71.2)% 1,195 3,625 (2,430) (67.0)%
Distribution services 328 200 128 64.0% 506 241 265 110.0%
--- --- --- --- --- ---
Total APAC $49,523 $50,427 $(904) (1.8)% 45,878 39,996 5,882 14.7%
======= ======= ===== ===== ====== ====== ===== ====
A. SCHULMAN, INC.
SUPPLEMENTAL SEGMENT INFORMATION
Net Sales Pounds Sold
--------- -----------
Year ended August 31,
---------------------
EMEA 2015 2014 $ Change % Change 2015 2014 Lbs. Change % Change
---- ---- ---- -------- -------- ---- ---- ----------- --------
(In thousands, except for %'s)
Custom performance colors $131,565 $146,629 $(15,064) (10.3)% 50,088 48,600 1,488 3.1%
Masterbatch solutions 412,501 452,865 (40,364) (8.9)% 392,522 354,384 38,138 10.8%
Engineered plastics 391,406 475,015 (83,609) (17.6)% 278,038 294,292 (16,254) (5.5)%
Specialty powders 154,701 181,153 (26,452) (14.6)% 177,618 181,533 (3,915) (2.2)%
Distribution services 249,182 322,205 (73,023) (22.7)% 354,973 383,218 (28,245) (7.4)%
------- ------- ------- ------ ------- ------- ------- -----
Total EMEA $1,339,355 $1,577,867 $(238,512) (15.1)% 1,253,239 1,262,027 (8,788) (0.7)%
========== ========== ========= ====== ========= ========= ====== =====
Net Sales Pounds Sold
--------- -----------
Year ended August 31,
---------------------
USCAN 2015 2014 $ Change % Change 2015 2014 Lbs. Change % Change
----- ---- ---- -------- -------- ---- ---- ----------- --------
(In thousands, except for %'s)
Custom performance colors $44,258 $34,131 $10,127 29.7% 15,099 10,666 4,433 41.6%
Masterbatch solutions 156,541 137,031 19,510 14.2% 213,413 200,283 13,130 6.6%
Engineered plastics 245,004 133,552 111,452 83.5% 191,150 85,735 105,415 123.0%
Specialty powders 94,265 106,305 (12,040) (11.3)% 145,159 163,279 (18,120) (11.1)%
Distribution services 70,425 64,031 6,394 10.0% 79,890 66,882 13,008 19.4%
------ ------ ----- ---- ------ ------ ------ ----
Total USCAN $610,493 $475,050 $135,443 28.5% 644,711 526,845 117,866 22.4%
======== ======== ======== ==== ======= ======= ======= ====
Net Sales Pounds Sold
--------- -----------
Year ended August 31,
---------------------
LATAM 2015 2014 $ Change % Change 2015 2014 Lbs. Change % Change
----- ---- ---- -------- -------- ---- ---- ----------- --------
(In thousands, except for %'s)
Custom performance colors $4,586 $3,966 $620 15.6% 1,834 1,712 122 7.1%
Masterbatch solutions 91,204 95,220 (4,016) (4.2)% 64,211 62,666 1,545 2.5%
Engineered plastics 46,220 51,170 (4,950) (9.7)% 34,912 36,349 (1,437) (4.0)%
Specialty powders 35,453 47,957 (12,504) (26.1)% 31,064 41,445 (10,381) (25.0)%
Distribution services - - - N/A - - - N/A
--- --- --- --- --- --- --- ---
Total LATAM $177,463 $198,313 $(20,850) (10.5)% 132,021 142,172 (10,151) (7.1)%
======== ======== ======== ====== ======= ======= ======= =====
Net Sales Pounds Sold
--------- -----------
Year ended August 31,
---------------------
APAC 2015 2014 $ Change % Change 2015 2014 Lbs. Change % Change
---- ---- ---- -------- -------- ---- ---- ----------- --------
(In thousands, except for %'s)
Custom performance colors $11,044 $3,495 $7,549 216.0% 8,636 2,748 5,888 214.3%
Masterbatch solutions 81,108 81,672 (564) (0.7)% 81,807 73,568 8,239 11.2%
Engineered plastics 104,628 93,991 10,637 11.3% 76,251 62,021 14,230 22.9%
Specialty powders 9,809 15,095 (5,286) (35.0)% 10,279 13,699 (3,420) (25.0)%
Distribution services 1,192 1,515 (323) (21.3)% 1,569 1,863 (294) (15.8)%
----- ----- ---- ----- ----- ----
Total APAC $207,781 $195,768 $12,013 6.1% 178,542 153,899 24,643 16.0%
======== ======== ======= === ======= ======= ====== ====
Net Sales Pounds Sold
--------- -----------
Three months ended August 31,
-----------------------------
Consolidated 2015 2014 $ Change % Change 2015 2014 Lbs. Change % Change
------------ ---- ---- -------- -------- ---- ---- ----------- --------
(In thousands, except for %'s)
Custom performance colors $45,660 $47,302 $(1,642) (3.5)% 19,440 16,023 3,417 21.3%
Engineered composites 57,133 - 57,133 N/A 46,082 - 46,082 N/A
Masterbatch solutions 183,122 202,039 (18,917) (9.4)% 191,783 180,908 10,875 6.0%
Engineered plastics 237,155 194,330 42,825 22.0% 201,674 125,059 76,615 61.3%
Specialty powders 71,506 86,578 (15,072) (17.4)% 86,154 102,121 (15,967) (15.6)%
Distribution services 79,443 97,109 (17,666) (18.2)% 102,782 112,218 (9,436) (8.4)%
------ ------ ------- ------ ------- ------- ------ -----
Total Consolidated $674,019 $627,358 $46,661 7.4% 647,915 536,329 111,586 20.8%
======== ======== ======= === ======= ======= ======= ====
Net Sales Pounds Sold
--------- -----------
Year ended August 31,
---------------------
Consolidated 2015 2014 $ Change % Change 2015 2014 Lbs. Change % Change
------------ ---- ---- -------- -------- ---- ---- ----------- --------
(In thousands, except for %'s)
Custom performance colors $191,453 $188,221 $3,232 1.7% 75,657 63,726 11,931 18.7%
Engineered composites 57,133 - 57,133 N/A 46,082 - 46,082 N/A
Masterbatch solutions 741,354 766,788 (25,434) (3.3)% 751,953 690,901 61,052 8.8%
Engineered plastics 787,258 753,728 33,530 4.4% 580,351 478,397 101,954 21.3%
Specialty powders 294,228 350,510 (56,282) (16.1)% 364,120 399,956 (35,836) (9.0)%
Distribution services 320,799 387,751 (66,952) (17.3)% 436,432 451,963 (15,531) (3.4)%
------- ------- ------- ------- ------- -------
Total Consolidated $2,392,225 $2,446,998 $(54,773) (2.2)% 2,254,595 2,084,943 169,652 8.1%
========== ========== ======== ===== ========= ========= ======= ===
A. SCHULMAN, INC.
SUPPLEMENTAL SEGMENT INFORMATION
(continued)
Three months ended August 31, Year ended August 31,
----------------------------- ---------------------
2015 2014 2015 2014
---- ---- ---- ----
Unaudited
(In thousands, except for %'s)
Segment gross profit
EMEA $43,952 $50,031 $189,860 $206,268
USCAN 34,072 22,367 100,550 73,278
LATAM 9,896 6,228 31,971 26,239
APAC 6,835 6,565 29,238 26,767
EC 14,536 - 14,536 -
------ --- ------ ---
Total segment gross profit 109,291 85,191 366,155 332,552
Inventory step-up (2,741) (269) (3,082) (1,468)
Accelerated depreciation and restructuring related costs (1,122) (251) (1,796) (1,042)
Costs related to acquisitions (93) (34) (267) (34)
--- --- ---- ---
Total gross profit $105,335 $84,637 $361,010 $330,008
======== ======= ======== ========
Segment operating income
EMEA $17,281 $19,153 $78,313 $80,690
USCAN 15,414 11,815 40,713 30,418
LATAM 5,530 2,102 13,061 8,388
APAC 3,498 2,656 14,401 12,527
EC 5,454 - 5,454 -
----- --- ----- ---
Total segment operating income 47,177 35,726 151,942 132,023
Corporate (6,246) (8,019) (31,238) (32,170)
Costs related to acquisitions (9,236) (2,644) (17,208) (6,021)
Restructuring and related costs (8,108) (1,295) (23,411) (9,618)
Accelerated depreciation (81) - (408) (107)
CEO transition costs - - (6,167) -
Asset impairment - - - (104)
Curtailment and settlement gains (losses) - (214) - (214)
Inventory step-up (2,741) (269) (3,082) (1,468)
------ ---- ------ ------
Operating income 20,765 23,285 70,428 82,321
Interest expense (15,325) (2,391) (22,613) (8,503)
Bridge financing fees - - (18,750) -
Foreign currency transaction gains (losses) (266) (86) (3,363) (2,206)
Other income (expense), net 538 242 1,438 720
Gain on early extinguishment of debt - - 1,290 -
--- --- ----- ---
Income from continuing operations before taxes $5,712 $21,050 $28,430 $72,332
====== ======= ======= =======
Capacity Utilization
EMEA 83% 78% 87% 84%
USCAN 71% 65% 66% 64%
LATAM 81% 79% 73% 76%
APAC 61% 69% 64% 70%
EC 57% - % 57% - %
Worldwide 73% 73% 74% 75%
A. SCHULMAN, INC.
Sales by Geographical Region
Three months ended August 31, 2015
----------------------------------
Unaudited (In thousands, except for %'s)
Thermoplastics Engineered Composites Total
---------------------
Geographical Region Sales by Region % of TP Sales by Region % of EC Total Sales Total %
--------------- ------- --------------- ------- ----------- ------
United States /
Canada $195,272 31.7% $41,831 73.2% $237,103 35.2%
Europe 326,763 53.0% 5,892 10.3% 332,655 49.4%
Mexico /South
America 45,328 7.3% 9,410 16.5% 54,738 8.1%
Asia Pacific 49,523 8.0% - - % 49,523 7.3%
Total $616,886 100.0% $57,133 100.0% $674,019 100.0%
======== ===== ======= ===== ======== =====
Three months ended August 31, 2014
----------------------------------
Unaudited (In thousands, except for %'s)
Thermoplastics Engineered Composites Total
-------------- ---------------------
Geographical Region Sales by Region % of TP Sales by Region % of EC Total Sales Total %
--------------- ------- --------------- ------- ----------- ------
United States /
Canada $138,773 22.1% $ - - % $138,773 22.1%
Europe 388,593 62.0% - - % 388,593 62.0%
Mexico /South
America 49,565 7.9% - - % 49,565 7.9%
Asia Pacific 50,427 8.0% - - % 50,427 8.0%
Total $627,358 100.0% $ - - % $627,358 100.0%
======== ===== === === === === ======== =====
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/a-schulman-reports-fiscal-2015-fourth-quarter-and-full-year-results-300163399.html
SOURCE A. Schulman, Inc.
