AKRON, Ohio, Jan. 9, 2017 /PRNewswire/ -- A. Schulman,
Inc. (Nasdaq: SHLM) today announced earnings for the fiscal 2017 first quarter for the period ended November 30, 2016. On a GAAP basis, the Company reported earnings per diluted share of $0.04 compared with $0.18 in the prior period. Adjusted earnings per diluted share were
$0.49 compared with $0.50 in the prior year period.
Consolidated net sales for the fiscal first quarter were $600 million compared with $649.2 million for the prior year quarter. Excluding the negative impact of foreign currency translation of
$9.3 million, net sales fell 6.2% when compared with the prior year quarter.
GAAP gross margin in the fiscal 2017 first quarter increased to 16.8% compared with 16.2% in the prior year period. Segment
gross margin in the fiscal 2017 first quarter was improved slightly when compared with the prior year period at 16.9%.
Operating income margin was 3.2% compared with 4% in the prior year period. Adjusted operating income margin was 5.8%
consistent with the prior year period.
On a GAAP basis, the Company reported fiscal first quarter net income of $1.1 million, compared
with $5.2 million in the first quarter of fiscal 2016. On an adjusted basis, excluding certain
items as noted in the reconciliation of GAAP and Non-GAAP financial measures, the Company generated net income of $14.4 million compared with $14.9 million in the prior-year period. Fiscal first
quarter adjusted EBITDA was $54.6 million, compared with $58.4
million in the prior year period.
"Clearly, a lot of hard work remains to be done as we restore the Company's operational and financial performance worldwide.
While we were able to grow sales and gross margins in Asia-Pacific and in our Engineered
Composites segment, we experienced continued weakness in the United States and Europe. Our recently implemented global actions to strengthen our sales organization and optimize our
footprint are designed to address this weakness," said Joseph M. Gingo, chairman, president and
chief executive officer. "As we move forward in fiscal 2017, we must continue to execute as we reset the business and rejuvenate
our growth plan."
John W. Richardson, chief financial officer, stated, "We are well into the completion of our
simplification efforts which facilitated the consolidation of our product families allowing for the reduction of layers of middle
management. We believe this will generate our previously stated savings of approximately $5 million to $6
million in fiscal 2017 and 2018. In the meantime, we continue to keep an eye on cost controls as evidenced by an
improvement in SG&A."
Balance Sheet/Cash Flow
Cash provided from operations during the fiscal first quarter was $26.3 million, compared with $40 million in the prior period. Working capital days were lower at 53 days on a trailing 12-month basis, an
improvement from 54 days in the prior year.
The cash flow was used to reduce net debt, which represents total debt less cash and cash equivalents and restricted cash, by
$7 million in the fiscal first quarter, to $894 million, for a net
leverage ratio of 3.97x. Additionally, the Company prepaid $56 million in term debt, plus another
$3.4 million of normal required payments during the quarter. The pre-payments were facilitated by
the Company borrowing on its revolving credit facility in Europe and transferring approximately
$40 million in a tax efficient manner to the U.S. Since the purchase of Citadel in mid-2015, the
Company has paid down approximately $180 million of total debt.
Business Outlook
The Company is maintaining its previously stated fiscal 2017 targets of $2.5 billion to $2.6
billion in sales, adjusted EBITDA of $225 million to $230 million, adjusted earnings per
diluted share in the range of $2.08 to $2.18, and a return on invested capital of 11 percent to
12.5 percent. Refer to the reconciliation of GAAP and Non-GAAP financial measures for the types of items excluded from the
Company's business outlook.
Gingo stated, "As we look forward to the remainder of the year, we expect continued challenges to our top-line growth.
Further, if the dollar remains strong against world currencies, we will see additional pressure. However, I believe the near-term
benefits of our simplified business structure – coupled with our enhanced global sales process and renewed product development
initiative – creates an environment for us to withstand current headwinds and deliver solid results on a full-year basis."
Conference Call on the Web
A live Internet broadcast of A. Schulman's conference call regarding fiscal 2017 first-quarter earnings can
be accessed at 10:00 a.m. Eastern Time on January 10, 2017, 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 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 4,800 people and has 54 manufacturing facilities globally. A.
Schulman reported net sales of approximately $2.5 billion for the fiscal year ended August 31, 2016.
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.
The Company uses 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 to assess performance and allocate resources because the Company believes that these measures are useful to investors and
management in understanding current profitability levels that may serve as a basis for evaluating future performance and
facilitating comparability of results. In addition, operating income before certain items, segment operating income before
certain items and net income excluding certain items are important to management as all are a component of the Company's annual
and long-term employee incentive plans. 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, may not be reported by all of the Company's competitors and may 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 may 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 may 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 and the integration thereof, 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;
- our current debt position could adversely affect our financial health and prevent us from fulfilling our financial
obligations; and
- failure of counterparties to perform under the terms and conditions of contractual arrangements, including suppliers,
customers, buyers and sellers of a business and other third parties with which the Company contracts.
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, 2016. 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
(Unaudited)
|
|
Three months ended November 30,
|
|
2016
|
|
2015
|
|
(In thousands, except per share data)
|
|
Net sales
|
$
|
600,000
|
|
|
$
|
649,219
|
|
|
Cost of sales
|
498,985
|
|
|
544,290
|
|
|
Selling, general and administrative expenses
|
72,374
|
|
|
77,237
|
|
|
Restructuring expense
|
9,544
|
|
|
1,546
|
|
|
Operating income (loss)
|
19,097
|
|
|
26,146
|
|
|
Interest expense
|
13,164
|
|
|
13,618
|
|
|
Foreign currency transaction (gains) losses
|
562
|
|
|
729
|
|
|
Other (income) expense, net
|
(1,132)
|
|
|
51
|
|
|
Income (loss) before taxes
|
6,503
|
|
|
11,748
|
|
|
Provision (benefit) for U.S. and foreign income taxes
|
3,319
|
|
|
4,251
|
|
|
Net income (loss)
|
3,184
|
|
|
7,497
|
|
|
Noncontrolling interests
|
(241)
|
|
|
(404)
|
|
|
Net income (loss) attributable to A. Schulman, Inc.
|
2,943
|
|
|
7,093
|
|
|
Convertible special stock dividends
|
1,875
|
|
|
1,875
|
|
|
Net income (loss) available to A. Schulman, Inc. common
stockholders
|
$
|
1,068
|
|
|
$
|
5,218
|
|
|
|
|
|
|
Weighted-average number of shares outstanding:
|
|
|
|
|
Basic
|
29,363
|
|
|
29,223
|
|
|
Diluted
|
29,477
|
|
|
29,462
|
|
|
|
|
|
|
Net income (loss) per common share available to A. Schulman, Inc. common
stockholders
|
|
|
|
|
Basic
|
$
|
0.04
|
|
|
$
|
0.18
|
|
|
Diluted
|
$
|
0.04
|
|
|
$
|
0.18
|
|
|
|
|
|
|
Cash dividends per common share
|
$
|
0.205
|
|
|
$
|
0.205
|
|
|
Cash dividends per share of convertible special stock
|
$
|
15.00
|
|
|
$
|
15.00
|
|
|
A. SCHULMAN, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
|
November 30,
2016
|
|
August 31,
2016
|
|
(In thousands)
|
|
ASSETS
|
|
Current assets:
|
|
|
|
|
Cash and cash equivalents
|
$
|
39,285
|
|
|
$
|
35,260
|
|
|
Restricted cash
|
8,256
|
|
|
8,143
|
|
|
Accounts receivable, less allowance for doubtful accounts of $11,106 at
November 30, 2016 and $11,341 at August 31, 2016
|
376,138
|
|
|
376,786
|
|
|
Inventories
|
275,663
|
|
|
263,617
|
|
|
Prepaid expenses and other current assets
|
44,516
|
|
|
40,263
|
|
|
Total current assets
|
743,858
|
|
|
724,069
|
|
|
Property, plant and equipment, at cost:
|
|
|
|
|
Land and improvements
|
32,423
|
|
|
32,957
|
|
|
Buildings and leasehold improvements
|
179,274
|
|
|
184,291
|
|
|
Machinery and equipment
|
435,993
|
|
|
447,932
|
|
|
Furniture and fixtures
|
33,615
|
|
|
34,457
|
|
|
Construction in progress
|
23,095
|
|
|
20,431
|
|
|
Gross property, plant and equipment
|
704,400
|
|
|
720,068
|
|
|
Accumulated depreciation
|
401,151
|
|
|
405,246
|
|
|
Net property, plant and equipment
|
303,249
|
|
|
314,822
|
|
|
Deferred charges and other noncurrent assets
|
84,995
|
|
|
88,161
|
|
|
Goodwill
|
256,878
|
|
|
257,773
|
|
|
Intangible assets, net
|
352,046
|
|
|
362,614
|
|
|
Total assets
|
$
|
1,741,026
|
|
|
$
|
1,747,439
|
|
|
LIABILITIES AND EQUITY
|
|
Current liabilities:
|
|
|
|
|
Accounts payable
|
$
|
281,056
|
|
|
$
|
280,060
|
|
|
U.S. and foreign income taxes payable
|
6,707
|
|
|
8,985
|
|
|
Accrued payroll, taxes and related benefits
|
52,517
|
|
|
47,569
|
|
|
Other accrued liabilities
|
87,113
|
|
|
67,704
|
|
|
Short-term debt
|
37,659
|
|
|
25,447
|
|
|
Total current liabilities
|
465,052
|
|
|
429,765
|
|
|
Long-term debt
|
904,352
|
|
|
919,349
|
|
|
Pension plans
|
139,108
|
|
|
145,108
|
|
|
Deferred income taxes
|
57,636
|
|
|
59,013
|
|
|
Other long-term liabilities
|
24,599
|
|
|
25,844
|
|
|
Total liabilities
|
1,590,747
|
|
|
1,579,079
|
|
|
Commitments and contingencies
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
Convertible special stock, no par value
|
120,289
|
|
|
120,289
|
|
|
Common stock, $1 par value, authorized - 75,000 shares, issued - 48,526
shares at November 30, 2016 and 48,510 shares at August 31, 2016
|
48,526
|
|
|
48,510
|
|
|
Additional paid-in capital
|
276,456
|
|
|
275,115
|
|
|
Accumulated other comprehensive income (loss)
|
(135,373)
|
|
|
(120,721)
|
|
|
Retained earnings
|
214,047
|
|
|
219,039
|
|
|
Treasury stock, at cost, 19,067 shares at November 30, 2016 and 19,069
shares at August 31, 2016
|
(382,928)
|
|
|
(382,963)
|
|
|
Total A. Schulman, Inc.'s stockholders' equity
|
141,017
|
|
|
159,269
|
|
|
Noncontrolling interests
|
9,262
|
|
|
9,091
|
|
|
Total equity
|
150,279
|
|
|
168,360
|
|
|
Total liabilities and equity
|
$
|
1,741,026
|
|
|
$
|
1,747,439
|
|
|
A. SCHULMAN, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
Three months ended November 30,
|
|
2016
|
|
2015
|
|
(In thousands)
|
|
Operating activities:
|
|
|
|
|
Net income
|
$
|
3,184
|
|
|
$
|
7,497
|
|
|
Adjustments to reconcile net income to net cash provided from (used in)
operating activities:
|
|
|
|
|
Depreciation
|
11,172
|
|
|
12,013
|
|
|
Amortization
|
8,817
|
|
|
10,039
|
|
|
Deferred tax provision (benefit)
|
(2,429)
|
|
|
1,306
|
|
|
Pension, postretirement benefits and other compensation
|
1,893
|
|
|
1,217
|
|
|
Changes in assets and liabilities, net of acquisitions:
|
|
|
|
|
Accounts receivable
|
(12,947)
|
|
|
7,345
|
|
|
Inventories
|
(21,639)
|
|
|
(8,671)
|
|
|
Accounts payable
|
16,404
|
|
|
377
|
|
|
Income taxes
|
(2,723)
|
|
|
1,432
|
|
|
Accrued payroll and other accrued liabilities
|
27,623
|
|
|
18,614
|
|
|
Other assets and long-term liabilities
|
(3,046)
|
|
|
(11,144)
|
|
|
Net cash provided from (used in) operating activities
|
26,309
|
|
|
40,025
|
|
|
Investing activities
|
|
|
|
|
Expenditures for property, plant and equipment
|
(12,972)
|
|
|
(7,402)
|
|
|
Proceeds from the sale of assets
|
375
|
|
|
361
|
|
|
Other investing activities
|
12
|
|
|
—
|
|
|
Net cash provided from (used in) investing activities
|
(12,585)
|
|
|
(7,041)
|
|
|
Financing activities:
|
|
|
|
|
Cash dividends paid to special stockholders
|
(1,875)
|
|
|
(1,875)
|
|
|
Cash dividends paid to common stockholders
|
(6,060)
|
|
|
(6,024)
|
|
|
Increase (decrease) in short-term debt
|
14,546
|
|
|
1,926
|
|
|
Borrowings on long-term debt
|
133,985
|
|
|
—
|
|
|
Repayments on long-term debt including current portion
|
(149,301)
|
|
|
(24,946)
|
|
|
Issuances of stock, common and treasury
|
51
|
|
|
90
|
|
|
Redemptions of common stock
|
(229)
|
|
|
—
|
|
|
Net cash provided from (used in) financing activities
|
(8,883)
|
|
|
(30,829)
|
|
|
Effect of exchange rate changes on cash
|
(816)
|
|
|
(3,465)
|
|
|
Net increase (decrease) in cash and cash equivalents
|
4,025
|
|
|
(1,310)
|
|
|
Cash and cash equivalents at beginning of period
|
35,260
|
|
|
96,872
|
|
|
Cash and cash equivalents at end of period
|
$
|
39,285
|
|
|
$
|
95,562
|
|
|
A. SCHULMAN, INC.
Reconciliation of GAAP and Non-GAAP Financial Measures
Unaudited
|
|
Three months ended November 30, 2016
|
|
Cost of
Sales
|
|
Gross Margin
|
|
SG&A
|
|
Restruct. Expense
|
|
Oper.
Income
|
|
Non Operating (Income) Expense
|
|
Income Tax Expense (Benefit)
|
|
Net Income Available to ASI Common Stockholders
|
|
Diluted
EPS
|
|
|
(In thousands, except for %'s and per share data)
|
|
As reported
|
|
$
|
498,985
|
|
|
16.8
|
%
|
|
$
|
72,374
|
|
|
$
|
9,544
|
|
|
$
|
19,097
|
|
|
$
|
12,594
|
|
|
$
|
3,319
|
|
|
$
|
1,068
|
|
|
$
|
0.04
|
|
|
Certain items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset impairment (8)
|
|
—
|
|
|
|
|
(678)
|
|
|
—
|
|
|
678
|
|
|
—
|
|
|
183
|
|
|
495
|
|
|
0.02
|
|
|
Accelerated depreciation (1)
|
|
(355)
|
|
|
|
|
(1)
|
|
|
—
|
|
|
356
|
|
|
—
|
|
|
96
|
|
|
260
|
|
|
0.01
|
|
|
Costs related to acquisitions and integrations (2)
|
|
(57)
|
|
|
|
|
(548)
|
|
|
—
|
|
|
605
|
|
|
—
|
|
|
163
|
|
|
442
|
|
|
0.01
|
|
|
Restructuring and related costs (3)
|
|
(173)
|
|
|
|
|
(3,556)
|
|
|
(9,544)
|
|
|
13,273
|
|
|
—
|
|
|
3,584
|
|
|
9,689
|
|
|
0.33
|
|
|
Lucent costs (4)
|
|
(85)
|
|
|
|
|
(724)
|
|
|
—
|
|
|
809
|
|
|
—
|
|
|
218
|
|
|
591
|
|
|
0.02
|
|
|
CEO transition costs (5)
|
|
—
|
|
|
|
|
(189)
|
|
|
—
|
|
|
189
|
|
|
—
|
|
|
51
|
|
|
138
|
|
|
—
|
|
|
Accelerated amortization of debt issuance costs (6)
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(205)
|
|
|
55
|
|
|
150
|
|
|
0.01
|
|
|
Tax (benefits) charges (7)
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,562)
|
|
|
1,562
|
|
|
0.05
|
|
|
Total certain items
|
|
(670)
|
|
|
0.1
|
%
|
|
(5,696)
|
|
|
(9,544)
|
|
|
15,910
|
|
|
(205)
|
|
|
2,788
|
|
|
13,327
|
|
|
0.45
|
|
|
As Adjusted
|
|
$
|
498,315
|
|
|
16.9
|
%
|
|
$
|
66,678
|
|
|
$
|
—
|
|
|
$
|
35,007
|
|
|
$
|
12,389
|
|
|
$
|
6,107
|
|
|
$
|
14,395
|
|
|
$
|
0.49
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of Revenue
|
|
|
|
|
|
11.1
|
%
|
|
|
|
5.8
|
%
|
|
|
|
|
|
2.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective Tax Rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended November 30, 2015
|
|
Cost of
Sales
|
|
Gross Margin
|
|
SG&A
|
|
Restruct. Expense
|
|
Oper.
Income
|
|
Non Operating (Income) Expense
|
|
Income Tax Expense (Benefit)
|
|
Net Income Available to ASI Common Stockholders
|
|
Diluted
EPS
|
|
|
(In thousands, except for %'s and per share data)
|
|
As reported
|
|
$
|
544,290
|
|
|
16.2
|
%
|
|
$
|
77,237
|
|
|
$
|
1,546
|
|
|
$
|
26,146
|
|
|
$
|
14,398
|
|
|
$
|
4,251
|
|
|
$
|
5,218
|
|
|
$
|
0.18
|
|
|
Certain items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accelerated depreciation (1)
|
|
(1,447)
|
|
|
|
|
(6)
|
|
|
—
|
|
|
1,453
|
|
|
—
|
|
|
406
|
|
|
1,047
|
|
|
0.03
|
|
|
Costs related to acquisitions and integrations (2)
|
|
(129)
|
|
|
|
|
(1,737)
|
|
|
—
|
|
|
1,866
|
|
|
—
|
|
|
522
|
|
|
1,344
|
|
|
0.05
|
|
|
Restructuring and related costs (3)
|
|
(430)
|
|
|
|
|
(2,694)
|
|
|
(1,546)
|
|
|
4,670
|
|
|
(277)
|
|
|
1,391
|
|
|
3,556
|
|
|
0.12
|
|
|
Lucent costs (4)
|
|
(1,830)
|
|
|
|
|
(1,876)
|
|
|
—
|
|
|
3,706
|
|
|
—
|
|
|
1,037
|
|
|
2,669
|
|
|
0.09
|
|
|
Accelerated amortization of debt issuance costs (6)
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(110)
|
|
|
31
|
|
|
79
|
|
|
—
|
|
|
Tax (benefits) charges (7)
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(965)
|
|
|
965
|
|
|
0.03
|
|
|
Total certain items
|
|
(3,836)
|
|
|
0.6
|
%
|
|
(6,313)
|
|
|
(1,546)
|
|
|
11,695
|
|
|
(387)
|
|
|
2,422
|
|
|
9,660
|
|
|
0.32
|
|
|
As Adjusted
|
|
$
|
540,454
|
|
|
16.8
|
%
|
|
$
|
70,924
|
|
|
$
|
—
|
|
|
$
|
37,841
|
|
|
$
|
14,011
|
|
|
$
|
6,673
|
|
|
$
|
14,878
|
|
|
$
|
0.50
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of Revenue
|
|
|
|
|
|
10.9
|
%
|
|
|
|
5.8
|
%
|
|
|
|
—
|
|
|
2.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective Tax Rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28.0
|
%
|
|
|
|
|
1 - Accelerated depreciation is related to restructuring plans in the Company's USCAN and EMEA segments.
2 - Costs related to acquisitions and integrations 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. Refer to
Note 12 in the Company's Quarterly Report on Form 10-Q for the three months ended November 30, 2016 for further
discussion.
4 - Lucent costs primarily represent legal and investigation costs related to resolving the Lucent matter, product
manufacturing costs for reworking existing Lucent inventory, obsolete Lucent inventory reserve costs, and dedicated internal
personnel costs that would have otherwise been focused on normal operations.
5 - CEO transition costs represent charges for deferred compensation granted to Bernard
Rzepka.
6 - Write off of debt issuance costs are related to prepayments of $56.0 million of Term Loan B.
Refer to Note 3 in the Company's Quarterly Report on Form 10-Q for further discussion.
7 - Tax (benefits) charges represent the Company's quarterly non-GAAP tax based on the overall estimated annual non-GAAP
effective tax rates.
8 - Asset impairment relates to the discontinuation of information technology assets in the USCAN segment.
|
A. SCHULMAN, INC.
ADJUSTED EBITDA RECONCILIATION
(Unaudited)
|
|
Three months ended Nov 30,
|
|
2016
|
|
2015
|
|
(In thousands)
|
|
|
|
|
|
Net income available to A. Schulman, Inc. common stockholders
|
$
|
1,068
|
|
|
$
|
5,218
|
|
|
Interest expense
|
13,164
|
|
|
13,618
|
|
|
Provision for U.S. and foreign income
taxes
|
3,319
|
|
|
4,251
|
|
|
Depreciation and amortization
|
19,989
|
|
|
22,052
|
|
|
Noncontrolling interests
|
241
|
|
|
404
|
|
|
Convertible special stock dividends
|
1,875
|
|
|
1,875
|
|
|
Other (1)
|
(570)
|
|
|
780
|
|
|
EBITDA, as calculated
|
$
|
39,086
|
|
|
$
|
48,198
|
|
|
Non-GAAP Adjustments (2)
|
15,554
|
|
|
10,236
|
|
|
EBITDA, as adjusted
|
$
|
54,640
|
|
|
$
|
58,434
|
|
|
|
|
|
(1) - Other includes Foreign currency transaction (gains) losses and Other (income) expense, net.
(2) - For details on Non-GAAP adjustments, refer to "Reconciliation of GAAP and Non-GAAP Financial Measures", items (2) -
(8). Amounts are included in Operating Income. Accelerated depreciation on the "Reconciliation of GAAP and Non-GAAP
Financial Measures" has been excluded as it is already included in Depreciation and amortization above.
|
A. SCHULMAN, INC.
SUPPLEMENTAL SEGMENT INFORMATION
(Unaudited)
|
|
|
Net Sales
|
|
|
Three months ended November 30,
|
|
EMEA
|
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
|
|
(In thousands, except for %'s)
|
|
Custom Concentrates and Services
|
|
158,035
|
|
|
174,129
|
|
|
(16,094)
|
|
|
(9.2)
|
%
|
|
Performance Materials
|
|
138,037
|
|
|
153,967
|
|
|
(15,930)
|
|
|
(10.3)
|
%
|
|
Total EMEA
|
|
$
|
296,072
|
|
|
$
|
328,096
|
|
|
$
|
(32,024)
|
|
|
(9.8)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales
|
|
|
Three months ended November 30,
|
|
USCAN
|
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
|
|
(In thousands, except for %'s)
|
|
Custom Concentrates and Services
|
|
62,926
|
|
|
64,152
|
|
|
(1,226)
|
|
|
(1.9)
|
%
|
|
Performance Materials
|
|
93,492
|
|
|
114,130
|
|
|
(20,638)
|
|
|
(18.1)
|
%
|
|
Total USCAN
|
|
$
|
156,418
|
|
|
$
|
178,282
|
|
|
$
|
(21,864)
|
|
|
(12.3)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales
|
|
|
Three months ended November 30,
|
|
LATAM
|
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
|
|
(In thousands, except for %'s)
|
|
Custom Concentrates and Services
|
|
29,969
|
|
|
34,013
|
|
|
(4,044)
|
|
|
(11.9)
|
%
|
|
Performance Materials
|
|
12,247
|
|
|
11,190
|
|
|
1,057
|
|
|
9.4
|
%
|
|
Total LATAM
|
|
$
|
42,216
|
|
|
$
|
45,203
|
|
|
$
|
(2,987)
|
|
|
(6.6)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales
|
|
|
Three months ended November 30,
|
|
APAC
|
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
|
|
(In thousands, except for %'s)
|
|
Custom Concentrates and Services
|
|
24,991
|
|
|
23,543
|
|
|
1,448
|
|
|
6.2
|
%
|
|
Performance Materials
|
|
25,746
|
|
|
22,149
|
|
|
3,597
|
|
|
16.2
|
%
|
|
Total APAC
|
|
$
|
50,737
|
|
|
$
|
45,692
|
|
|
$
|
5,045
|
|
|
11.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales
|
|
|
Three months ended November 30,
|
|
Consolidated
|
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
|
|
(In thousands, except for %'s)
|
|
Engineered Composites
|
|
$
|
54,557
|
|
|
$
|
51,946
|
|
|
$
|
2,611
|
|
|
5.0
|
%
|
|
Custom Concentrates and Services
|
|
275,921
|
|
|
295,837
|
|
|
(19,916)
|
|
|
(6.7
|
%
|
|
Performance Materials
|
|
269,522
|
|
|
301,436
|
|
|
(31,914)
|
|
|
(10.6)
|
%
|
|
Total Consolidated
|
|
$
|
600,000
|
|
|
$
|
649,219
|
|
|
$
|
(49,219)
|
|
|
(7.6)
|
%
|
|
|
Segment Gross Profit
|
|
|
Three months ended November 30,
|
|
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
|
|
(In thousands, except for %'s)
|
|
EMEA
|
|
$
|
44,658
|
|
$
|
47,684
|
|
$
|
(3,026)
|
|
(6.3)
|
%
|
|
USCAN
|
|
24,516
|
|
30,294
|
|
$
|
(5,778)
|
|
(19.1)
|
%
|
|
LATAM
|
|
9,417
|
|
9,705
|
|
$
|
(288)
|
|
(3.0)
|
%
|
|
APAC
|
|
9,126
|
|
7,874
|
|
$
|
1,252
|
|
15.9
|
%
|
|
EC
|
|
13,968
|
|
13,208
|
|
$
|
760
|
|
5.8
|
%
|
|
Total segment gross profit
|
|
$
|
101,685
|
|
$
|
108,765
|
|
$
|
(7,080)
|
|
(6.5)
|
%
|
|
Accelerated depreciation and restructuring related costs
|
|
(528)
|
|
(1,877)
|
|
$
|
1,349
|
|
(71.9)
|
%
|
|
Costs related to acquisitions and integrations
|
|
(57)
|
|
(129)
|
|
$
|
72
|
|
(55.8)
|
%
|
|
Lucent costs (1)
|
|
(85)
|
|
(1,830)
|
|
$
|
1,745
|
|
(95.4)
|
%
|
|
Total gross profit
|
|
$
|
101,015
|
|
$
|
104,929
|
|
$
|
(3,914)
|
|
(3.7)
|
%
|
|
|
(1)Refer to Note 13 in the Company's Quarterly Report on Form 10-Q
for the three months ended November 30, 2016 for additional discussion on this matter. Lucent costs in cost of sales in
the three months ended November 30, 2016 and 2015 include additional product and manufacturing operational costs for
reworking inventory. In the three months ended November 30, 2016 and 2015, additional Lucent costs in selling, general
and administrative expenses include legal and investigative costs. In the three months ended November 30, 2015, Lucent
costs in SG&A also include dedicated internal personnel costs that would have otherwise been focused on normal
operations.
|
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/a-schulman-reports-fiscal-2017-first-quarter-results-300388148.html
SOURCE A. Schulman, Inc.