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| 8-K - FORM 8-K - SCHULMAN A INC | shlm120709pressrelease.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE
A. SCHULMAN REPORTS FISCAL 2012 THIRD-QUARTER RESULTS
• | Net income was $17.0 million, or $0.57 per diluted share, for the quarter compared with net income of $18.8 million, or $0.60 per diluted share, in last year's third quarter; excluding certain items, net income for the quarter was $20.4 million, or $0.69 per diluted share, compared with $20.3 million, or $0.65 per diluted share, for the prior-year period |
• | Net income year-to-date was $39.7 million, or $1.34 per diluted share, compared with $35.1 million, or $1.12 per diluted share, for the same period last year; excluding certain items, net income year-to-date was $46.9 million, or $1.59 per diluted share, compared with $43.0 million, or $1.37 per diluted share, for the same period last year |
• | The Company's Americas and Asia Pacific regions outperformed last year's segment operating income by 61% and 72% respectively for the quarter |
• | Full-year fiscal 2012 net income, on a non-GAAP basis, expected to be in the range of $2.03 to $2.07 per diluted share |
AKRON, Ohio – July 9, 2012 – A. Schulman, Inc. (Nasdaq-GS: SHLM) announced today earnings for the fiscal 2012 third quarter ended May 31, 2012. The Company reported net income for the third quarter of $17.0 million, or $0.57 per diluted share, compared with net income of $18.8 million, or $0.60 per diluted share, for the comparable period last year. The translation effect of foreign currencies negatively impacted net income for the quarter by $0.8 million.
The fiscal 2012 third-quarter net income per diluted share of $0.57 included certain after-tax charges of $3.4 million, or $0.12 per diluted share, primarily related to non-cash asset impairment charges and costs associated with restructuring initiatives. Excluding these items, net income for the fiscal 2012 third quarter was $20.4 million, or $0.69 per diluted share, compared with $20.3 million, or $0.65 per diluted share, for the prior-year period. Last year's third quarter included certain after-tax charges of $1.5 million, or $0.05 per diluted share, primarily related to restructuring initiatives.
Net sales for the fiscal 2012 third quarter were $569.1 million compared with $611.1 million for the same period last year. Net sales declined primarily due to a $23.5 million negative impact of foreign currency translation and a 7% decrease in volume.
“Overcoming the economic and political headwinds in today's environment is a challenging task, and I am extremely proud of the efforts of our entire team in putting up some very strong numbers,” said Joseph M. Gingo, Chairman, President and Chief Executive Officer. “As expected, our Americas and Asia Pacific segments are significantly outpacing prior-year results while our EMEA segment, including the successful integration of our Elian acquisition, is working aggressively to offset the extremely difficult market conditions. We continue to focus on what's within our control and we remain committed to developing high-v
alue-added products and implementing cost-control initiatives to improve performance."
The Company uses the following non-GAAP financial measures of net income excluding certain items, net income per diluted share excluding certain items and EBITDA excluding certain items. These financial measures are used by management to monitor and evaluate the ongoing performance of the Company and to allocate resources. The Company believes that the additional measures are useful to investors for financial analysis. However, non-GAAP measures are not in accordance with, nor are they a substitute for, GAAP measures. Please see the table in this release for reconciliation of non-GAAP measures to the nearest comparable GAAP results. Results in the following discussion are presented on a non-GAAP basis excluding certain items.
Gross profit for the quarter was $76.7 million, compared with $78.9 million last year. Excluding the impact of foreign currency translation, gross profit increased by $0.8 million. Gross profit per pound was 15.4 cents, compared with 14.7 cents for the same period last year. This increase reflects the Company's continual product mix improvement, the benefits of prior restructuring initiatives, and ongoing efforts to control costs.
The Company's selling, general and administrative expenses decreased $3.4 million for the third quarter compared with the same period in the prior year. The decrease was partially attributable to the Company realizing synergies in connection with the continued integration of acquisitions and efforts to control costs. Additionally, incentive and equity compensation, in total, decreased $0.8 million. Foreign currency translation favorably impacted selling, general and administrative expense by $1.6 million.
Year-To-Date Results
Foreign currency translation adversely impacted consolidated net sales by $52.1 million. Excluding the foreign currency impact, consolidated net sales increased $19.5 million. The Company was able to increase the average selling price per pound by 10%, excluding the impact of foreign currency, which offset a volume decrease of 8%.
For the fiscal 2012 year-to-date results, the Company reported net income of $39.7 million, or $1.34 per diluted share, compared with net income of $35.1 million, or $1.12 per diluted share, for the same period last year. The translation effect of foreign currencies negatively impacted year-to-date reported net income by $1.6 million or $0.06 cents per diluted share.
Excluding the effect of certain items including restructuring-related charges, asset impairments and acquisition-related costs, year-to-date net income was $46.9 million, or $1.59 per diluted share, compared with $43.0 million, or $1.37 per diluted share, a year ago.
Europe, Middle East and Africa (“EMEA”) – In the fiscal 2012 third quarter, EMEA net sales were $383.9 million, a decrease of $52.1 million, or 12.0%, compared with the prior-year period. Foreign currency translation negatively impacted net sales by $20.4 million. Excluding the impact of the foreign currency translation, EMEA net sales declined 7.3%. Excluding foreign currency translation, price per pound increased 1.4% to $1.31 per pound due to improved product mix.
EMEA gross profit was $49.6 million for the quarter, a decrease of $5.1 million compared with the same three-month period last year. Foreign currency translation negatively impacted EMEA gross profit by $2.5 million or approximately 50% of the decline. Excluding the foreign currency impact, gross profit per pound increased 4.0% primarily in the engineered plastics and specialty powders product families offset by a
n overall decrease in volume of 8.6%.
EMEA segment operating income was $23.4 million, a decrease of $2.3 million compared with the same period last year. Benefits of reducing selling, general and administrative expenses by $2.8 million were offset by the decrease in gross profit, and a $1.2 million negative impact from foreign currency translation.
The Americas – In the fiscal 2012 third quarter, net sales for the Americas were $147.1 million, an increase of $9.1 million or 6.6% compared with the prior-year period. The increase in net sales was primarily attributable to improved product mix in the Company's specialty powders and masterbatch product families. The volume decline of 8.9 million pounds or approximately 5% from the prior-year third quarter was primarily attributed to softening in the Company's calcium carbonate masterbatch business in the U.S. Foreign currency translation negatively impacted net sales by $3.8 million. Excluding the foreign currency impact, price per pound increased 15.6% to $0.97 per pound.
Gross profit for the Americas was $21.3 million in the fiscal 2012 third quarter, an increase of $1.9 million from the comparable period last year. The increases in gross profit and gross profit per pound of 9.9% and 16.1%, respectively, were primarily in the engineered plastics product family. The Company was able to increase margins by improving product mix and implementing operational efficiencies from restructuring initiatives in the Americas. Foreign currency translation negatively impacted gross profit by $0.6 million. Excluding the impact of foreign currency, gross profit per pound increased 19%.
Segment operating income for the Americas for the quarter was $7.9 million compared with $4.9 million last year. The 60.9% increase in operating income was primarily due to improved gross profit per pound and a decrease of $1.1 million in selling, general and administrative expenses. The decline in selling, general and administrative expenses resulted from restructuring initiatives and cost-control efforts, offset by incremental expenses from a fiscal 2011 acquisition. Foreign currency translation negatively impacted operating income by $0.3 million.
Asia Pacific (“APAC”) – In the fiscal 2012 third quarter, net sales for APAC were $38.2 million, an increase of $1.0 million compared with the same prior-year period due to increased volume and the favorable impact of foreign currency translation. The increase in volume of 2.1% was primarily related to the masterbatch and engineered plastics product families partially offset by a decline in the specialty powders product family.
Gross profit for APAC for the quarter was $5.8 million, an increase of 20.9% compared with last year. The increase in gross profit and gross profit per pound were primarily due to successful restructuring initiatives that have improved the region's cost structure and a focus on products with higher technical requirements.
APAC segment operating income was $2.9 million for the quarter compared with $1.7 million last year. The 71.6% increase in profitability was principally due to the increase in gross profit and a slight decrease in selling, general and administrative expenses.
Cash Flow From Operations/Working Capital/Share Repurchase
Working capital was 59 days at the end of the fiscal 2012 third quarter, compared with 65 days at the end of the fiscal 2011 third quarter. The improvement in working capital was attributable to a decrease in accounts receivable and inventory levels in the face of declining volumes in fiscal 2012, as compared with the prior fiscal year, and continued emphasis on working capital management.
Net cash provided from operations was $34.5 million and net cash used in operations was $6.0 million for the nine months ended May 31, 2012 and 2011, respectively. The improvement of $40.5 million in cash provided by operations was primarily due to the improvement in operating results and working capital
management for the nine months ended May 31, 2012, as compared with the prior year.
The Company's cash and cash equivalents decreased $86.3 million from August 31, 2011. This decrease was driven primarily by the acquisition of Elian SAS for $64.9 million in net cash consideration, the first-quarter repurchase of treasury shares totaling $21.5 million, expenditures for capital projects of $27.5 million, and dividend payments of $15.4 million. Combined, these four uses of cash and cash equivalents totaled $129.3 million, and were offset by increased net borrowings on revolving credit facilities of $27.1 million and net cash provided from operations.
Business Outlook
“Under difficult and challenging economic conditions, we have proven that we can deliver on our commitment and strategy with improved net income. Our team is determined to hold its market leadership position in Europe; continue to grow profitably in the Americas and Asia Pacific; and promote innovation as evidenced by the investment in two new global technical centers,” Gingo said.
“We are evaluating options to further maximize our strong balance sheet and leverage position. We are investing in our future through internal growth initiatives coupled with strategic acquisitions. In addition, given our strong cash generation, we are confident that we will continue to support our dividend and share repurchase programs to maximize shareholder value.”
Gingo continued, “Under the current economic environment, we anticipate that our fiscal 2012 full-year net income, on a non-GAAP basis, will be in the range of $2.03 to $2.07 per diluted share.”
Conference Call on the Web
A live Internet broadcast of A. Schulman's conference call regarding fiscal 2012 third-quarter earnings can be accessed at 10:00 a.m. Eastern Time on Tuesday, July 10, 2012, on the Company's website, www.aschulman.com. An archived replay of the call will also be available on the website.
About A. Schulman, Inc.
A. Schulman, Inc. is a leading international supplier of high-performance plastic compounds and resins headquartered in Akron, Ohio. The Company's customers span a wide range of markets such as packaging, consumer products, industrial and automotive, among others. The Company employs about 3,100 people and has 35 manufacturing facilities globally. A. Schulman reported net sales of $2.2 billion for the fiscal year ended August 31, 2011. 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: net income excluding certain items, net income per diluted share excluding certain items and EBITDA excluding certain items. 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 income before taxes, 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 Note on Forward-Looking 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 major 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; and |
• | further adverse changes in economic or industry conditions, including global supply and demand conditions and prices for products. |
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, 2011. 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
Contact information:
Jennifer K. Beeman
Director of Corporate Communications & Investor Relations
A. Schulman, Inc.
3550 W. Market St.
Akron, Ohio 44333
Tel: 330-668-7346
email: Jennifer_Beeman@us.aschulman.com
A. SCHULMAN, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended May 31, | Nine months ended May 31, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Unaudited (In thousands, except per share data) | |||||||||||||||
Net sales | $ | 569,107 | $ | 611,142 | $ | 1,582,307 | $ | 1,614,868 | |||||||
Cost of sales | 492,518 | 532,254 | 1,371,673 | 1,400,367 | |||||||||||
Selling, general and administrative expenses | 48,861 | 51,746 | 145,692 | 154,081 | |||||||||||
Restructuring expense | 1,944 | 1,843 | 6,785 | 5,779 | |||||||||||
Asset impairment | 2,586 | 125 | 2,586 | 1,925 | |||||||||||
Curtailment (gain) loss | (101 | ) | — | (310 | ) | — | |||||||||
Operating income | 23,299 | 25,174 | 55,881 | 52,716 | |||||||||||
Interest expense | 1,953 | 1,802 | 6,532 | 4,729 | |||||||||||
Interest income | (318 | ) | (200 | ) | (675 | ) | (591 | ) | |||||||
Foreign currency transaction (gains) losses | 53 | 60 | 569 | 1,398 | |||||||||||
Other (income) expense, net | (60 | ) | (1,637 | ) | (1,113 | ) | (2,074 | ) | |||||||
Income before taxes | 21,671 | 25,149 | 50,568 | 49,254 | |||||||||||
Provision (benefit) for U.S. and foreign income taxes | 4,423 | 6,225 | 10,067 | 13,675 | |||||||||||
Net income | 17,248 | 18,924 | 40,501 | 35,579 | |||||||||||
Noncontrolling interests | (252 | ) | (170 | ) | (850 | ) | (441 | ) | |||||||
Net income attributable to A. Schulman, Inc. | $ | 16,996 | $ | 18,754 | $ | 39,651 | $ | 35,138 | |||||||
Weighted-average number of shares outstanding: | |||||||||||||||
Basic | 29,440 | 30,853 | 29,411 | 31,092 | |||||||||||
Diluted | 29,569 | 31,061 | 29,585 | 31,289 | |||||||||||
Earnings per share of common stock attributable to A. Schulman, Inc.: | |||||||||||||||
Basic | $ | 0.58 | $ | 0.61 | $ | 1.35 | $ | 1.13 | |||||||
Diluted | $ | 0.57 | $ | 0.60 | $ | 1.34 | $ | 1.12 | |||||||
Cash dividends per common share | $ | 0.190 | $ | 0.155 | $ | 0.530 | $ | 0.465 | |||||||
A. SCHULMAN, INC.
CONSOLIDATED BALANCE SHEETS
May 31, 2012 | August 31, 2011 | ||||||
Unaudited (In thousands) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 69,453 | $ | 155,753 | |||
Accounts receivable, less allowance for doubtful accounts of $8,560 at May 31, 2012 and $9,475 at August 31, 2011 | 321,038 | 347,036 | |||||
Inventories, average cost or market, whichever is lower | 267,645 | 264,747 | |||||
Prepaid expenses and other current assets | 28,262 | 34,376 | |||||
Total current assets | 686,398 | 801,912 | |||||
Property, plant and equipment, at cost: | |||||||
Land and improvements | 28,745 | 30,826 | |||||
Buildings and leasehold improvements | 152,988 | 165,267 | |||||
Machinery and equipment | 366,813 | 382,828 | |||||
Furniture and fixtures | 38,126 | 41,860 | |||||
Construction in progress | 15,741 | 12,967 | |||||
Gross property, plant and equipment | 602,413 | 633,748 | |||||
Accumulated depreciation and investment grants of $606 at May 31, 2012 and $815 at August 31, 2011 | 379,921 | 399,448 | |||||
Net property, plant and equipment | 222,492 | 234,300 | |||||
Other assets: | |||||||
Deferred charges and other noncurrent assets | 36,388 | 35,947 | |||||
Goodwill | 126,712 | 91,753 | |||||
Intangible assets | 91,726 | 76,075 | |||||
Total other assets | 254,826 | 203,775 | |||||
Total assets | $ | 1,163,716 | $ | 1,239,987 | |||
LIABILITIES AND EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 248,704 | $ | 254,405 | |||
U.S. and foreign income taxes payable | 2,865 | 11,072 | |||||
Accrued payroll, taxes and related benefits | 38,797 | 44,560 | |||||
Other accrued liabilities | 39,460 | 50,608 | |||||
Short-term debt | 36,033 | 11,550 | |||||
Total current liabilities | 365,859 | 372,195 | |||||
Long-term debt | 167,752 | 184,598 | |||||
Pension plans | 75,065 | 84,673 | |||||
Other long-term liabilities | 25,731 | 24,161 | |||||
Deferred income taxes | 23,805 | 20,055 | |||||
Total liabilities | 658,212 | 685,682 | |||||
Commitments and contingencies | — | — | |||||
Stockholders’ equity: | |||||||
Common stock, $1 par value, authorized - 75,000 shares, issued - 47,948 shares at May 31, 2012 and 47,816 shares at August 31, 2011 | 47,948 | 47,816 | |||||
Additional paid-in capital | 257,973 | 254,184 | |||||
Accumulated other comprehensive income (loss) | (6,095 | ) | 50,007 | ||||
Retained earnings | 565,555 | 541,256 | |||||
Treasury stock, at cost, 18,408 shares at May 31, 2012 and 17,207 shares at August 31, 2011 | (365,887 | ) | (344,759 | ) | |||
Total A. Schulman, Inc.’s stockholders’ equity | 499,494 | 548,504 | |||||
Noncontrolling interests | 6,010 | 5,801 | |||||
Total equity | 505,504 | 554,305 | |||||
Total liabilities and equity | $ | 1,163,716 | $ | 1,239,987 | |||
A. SCHULMAN, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine months ended | |||||||
2012 | 2011 | ||||||
Unaudited (In thousands) | |||||||
Operating: | |||||||
Net income | $ | 40,501 | $ | 35,579 | |||
Adjustments to reconcile net income to net cash provided from (used in) operating activities: | |||||||
Depreciation and amortization | 28,797 | 30,413 | |||||
Deferred tax provision | (7,414 | ) | (1,550 | ) | |||
Pension, postretirement benefits and other deferred compensation | 4,327 | 5,701 | |||||
Net (gains) losses on asset sales | — | (775 | ) | ||||
Asset impairment | 2,586 | 1,925 | |||||
Curtailment (gains) losses | (310 | ) | — | ||||
Changes in assets and liabilities, net of acquisitions: | |||||||
Accounts receivable | (6,501 | ) | (55,523 | ) | |||
Inventories | (31,161 | ) | (70,246 | ) | |||
Accounts payable | 16,726 | 55,893 | |||||
Income taxes | (6,123 | ) | 6,189 | ||||
Accrued payroll and other accrued liabilities | (11,305 | ) | (7,869 | ) | |||
Other assets and long-term liabilities | 4,380 | (5,710 | ) | ||||
Net cash provided from (used in) operating activities | 34,503 | (5,973 | ) | ||||
Investing: | |||||||
Expenditures for property, plant and equipment | (27,505 | ) | (18,362 | ) | |||
Proceeds from the sale of assets | 1,255 | 7,041 | |||||
Business acquisitions, net of cash acquired | (64,918 | ) | (15,071 | ) | |||
Net cash provided from (used in) investing activities | (91,168 | ) | (26,392 | ) | |||
Financing: | |||||||
Cash dividends paid | (15,352 | ) | (14,559 | ) | |||
Increase (decrease) in notes payable | (5,623 | ) | (3,475 | ) | |||
Borrowings on revolving credit facilities | 166,830 | 213,000 | |||||
Repayments on revolving credit facilities | (139,769 | ) | (170,250 | ) | |||
Repayments on long-term debt | (3,382 | ) | (21 | ) | |||
Payment of debt issuance costs | — | (2,220 | ) | ||||
Cash distributions to noncontrolling interests | (580 | ) | (700 | ) | |||
Common stock issued (redeemed), net | 358 | (382 | ) | ||||
Issuances (purchases) of treasury stock, net | (21,128 | ) | (14,393 | ) | |||
Net cash provided from (used in) financing activities | (18,646 | ) | 7,000 | ||||
Effect of exchange rate changes on cash | (10,989 | ) | 8,599 | ||||
Net increase (decrease) in cash and cash equivalents | (86,300 | ) | (16,766 | ) | |||
Cash and cash equivalents at beginning of period | 155,753 | 122,754 | |||||
Cash and cash equivalents at end of period | $ | 69,453 | $ | 105,988 | |||
A. SCHULMAN, INC.
Reconciliation of GAAP and Non-GAAP Financial Measures
Unaudited
Three months ended May 31, 2012 | As Reported | Asset Write- downs | Costs Related to Acquisitions | Restructuring Related | Inventory Step-up | Tax Benefits (Charges) | Before Certain Items | |||||||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||||||||||||||
Net sales | $ | 569,107 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 569,107 | ||||||||||||||
Cost of sales | 492,518 | — | — | — | (80 | ) | — | 492,438 | ||||||||||||||||||||
Selling, general and administrative expenses | 48,861 | — | (192 | ) | — | — | — | 48,669 | ||||||||||||||||||||
Restructuring expense | 1,944 | — | — | (1,944 | ) | — | — | — | ||||||||||||||||||||
Asset impairment | 2,586 | (2,586 | ) | — | — | — | — | — | ||||||||||||||||||||
Curtailment (gain) loss | (101 | ) | — | — | 101 | — | — | — | ||||||||||||||||||||
Operating income | 23,299 | 2,586 | 192 | 1,843 | 80 | — | 28,000 | |||||||||||||||||||||
Interest expense, net | 1,635 | — | — | — | — | — | 1,635 | |||||||||||||||||||||
Foreign currency transaction (gains) losses | 53 | — | — | — | — | — | 53 | |||||||||||||||||||||
Other (income) expense, net | (60 | ) | — | — | — | — | — | (60 | ) | |||||||||||||||||||
Income before taxes | 21,671 | 2,586 | 192 | 1,843 | 80 | — | 26,372 | |||||||||||||||||||||
Provision (benefit) for U.S. and foreign income taxes | 4,423 | 669 | 45 | 287 | 27 | 260 | 5,711 | |||||||||||||||||||||
Net income | 17,248 | 1,917 | 147 | 1,556 | 53 | (260 | ) | 20,661 | ||||||||||||||||||||
Noncontrolling interests | (252 | ) | — | — | — | — | — | (252 | ) | |||||||||||||||||||
Net income attributable to A. Schulman, Inc. | $ | 16,996 | $ | 1,917 | $ | 147 | $ | 1,556 | $ | 53 | $ | (260 | ) | $ | 20,409 | |||||||||||||
Diluted EPS | $ | 0.57 | $ | 0.69 | ||||||||||||||||||||||||
Weighted-average number of shares outstanding—diluted | 29,569 | 29,569 | ||||||||||||||||||||||||||
Three months ended May 31, 2011 | As Reported | Asset Write- downs | Costs Related to Acquisitions | Restructuring Related | Inventory Step-up | Tax Benefits (Charges) | Before Certain Items | |||||||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||||||||||||||
Net sales | $ | 611,142 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 611,142 | ||||||||||||||
Cost of sales | 532,254 | — | — | — | — | — | 532,254 | |||||||||||||||||||||
Selling, general and administrative expenses | 51,746 | — | 319 | — | — | — | 52,065 | |||||||||||||||||||||
Restructuring expense | 1,843 | — | — | (1,843 | ) | — | — | — | ||||||||||||||||||||
Asset impairment | 125 | (125 | ) | — | — | — | — | — | ||||||||||||||||||||
Operating income | 25,174 | 125 | (319 | ) | 1,843 | — | — | 26,823 | ||||||||||||||||||||
Interest expense, net | 1,602 | — | — | — | — | — | 1,602 | |||||||||||||||||||||
Foreign currency transaction (gains) losses | 60 | — | — | — | — | — | 60 | |||||||||||||||||||||
Other (income) expense, net | (1,637 | ) | — | — | — | — | — | (1,637 | ) | |||||||||||||||||||
Income before taxes | 25,149 | 125 | (319 | ) | 1,843 | — | — | 26,798 | ||||||||||||||||||||
Provision (benefit) for U.S. and foreign income taxes | 6,225 | — | 37 | 95 | — | — | 6,357 | |||||||||||||||||||||
Net income | 18,924 | 125 | (356 | ) | 1,748 | — | — | 20,441 | ||||||||||||||||||||
Noncontrolling interests | (170 | ) | — | — | — | — | — | (170 | ) | |||||||||||||||||||
Net income attributable to A. Schulman, Inc. | $ | 18,754 | $ | 125 | $ | (356 | ) | $ | 1,748 | $ | — | $ | — | $ | 20,271 | |||||||||||||
Diluted EPS | $ | 0.60 | $ | 0.65 | ||||||||||||||||||||||||
Weighted-average number of shares outstanding—diluted | 31,061 | 31,061 | ||||||||||||||||||||||||||
A. SCHULMAN, INC.
Reconciliation of GAAP and Non-GAAP Financial Measures
Unaudited
Nine months ended May 31, 2012 | As Reported | Asset Write- downs | Costs Related to Acquisitions | Restructuring Related | Inventory Step-up | Tax Benefits (Charges) | Before Certain Items | |||||||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||||||||||||||
Net sales | $ | 1,582,307 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 1,582,307 | ||||||||||||||
Cost of sales | 1,371,673 | — | — | — | (677 | ) | — | 1,370,996 | ||||||||||||||||||||
Selling, general and administrative expenses | 145,692 | — | (1,066 | ) | — | — | — | 144,626 | ||||||||||||||||||||
Restructuring expense | 6,785 | — | — | (6,785 | ) | — | — | — | ||||||||||||||||||||
Asset impairment | 2,586 | (2,586 | ) | — | — | — | — | — | ||||||||||||||||||||
Curtailment (gain) loss | (310 | ) | — | — | 310 | — | — | — | ||||||||||||||||||||
Operating income | 55,881 | 2,586 | 1,066 | 6,475 | 677 | — | 66,685 | |||||||||||||||||||||
Interest expense, net | 5,857 | — | — | — | — | — | 5,857 | |||||||||||||||||||||
Foreign currency transaction (gains) losses | 569 | — | — | — | — | — | 569 | |||||||||||||||||||||
Other (income) expense, net | (1,113 | ) | — | — | — | — | — | (1,113 | ) | |||||||||||||||||||
Income before taxes | 50,568 | 2,586 | 1,066 | 6,475 | 677 | — | 61,372 | |||||||||||||||||||||
Provision (benefit) for U.S. and foreign income taxes | 10,067 | 669 | 114 | 1,571 | 226 | 967 | 13,614 | |||||||||||||||||||||
Net income | 40,501 | 1,917 | 952 | 4,904 | 451 | (967 | ) | 47,758 | ||||||||||||||||||||
Noncontrolling interests | (850 | ) | — | — | — | — | — | (850 | ) | |||||||||||||||||||
Net income attributable to A. Schulman, Inc. | $ | 39,651 | $ | 1,917 | $ | 952 | $ | 4,904 | $ | 451 | $ | (967 | ) | $ | 46,908 | |||||||||||||
Diluted EPS | $ | 1.34 | $ | 1.59 | ||||||||||||||||||||||||
Weighted-average number of shares outstanding—diluted | 29,585 | 29,585 | ||||||||||||||||||||||||||
Nine months ended May 31, 2011 | As Reported | Asset Write- downs | Costs Related to Acquisitions | Restructuring Related | Inventory Step-up | Tax Benefits (Charges) | Before Certain Items | |||||||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||||||||||||||
Net sales | $ | 1,614,868 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 1,614,868 | ||||||||||||||
Cost of sales | 1,400,367 | — | — | — | (283 | ) | — | 1,400,084 | ||||||||||||||||||||
Selling, general and administrative expenses | 154,081 | — | (876 | ) | — | — | — | 153,205 | ||||||||||||||||||||
Restructuring expense | 5,779 | — | — | — | — | — | 5,779 | |||||||||||||||||||||
Asset impairment | 1,925 | (1,925 | ) | — | — | — | — | — | ||||||||||||||||||||
Operating income | 52,716 | 1,925 | 876 | — | 283 | — | 55,800 | |||||||||||||||||||||
Interest expense, net | 4,138 | — | — | — | — | — | 4,138 | |||||||||||||||||||||
Foreign currency transaction (gains) losses | 1,398 | — | — | — | — | — | 1,398 | |||||||||||||||||||||
Other (income) expense, net | (2,074 | ) | — | — | — | — | — | (2,074 | ) | |||||||||||||||||||
Income before taxes | 49,254 | 1,925 | 876 | — | 283 | — | 52,338 | |||||||||||||||||||||
Provision (benefit) for U.S. and foreign income taxes | 13,675 | — | 37 | 824 | 99 | 65 | 14,700 | |||||||||||||||||||||
Net income | 35,579 | 1,925 | 839 | (824 | ) | 184 | (65 | ) | 37,638 | |||||||||||||||||||
Noncontrolling interests | (441 | ) | — | — | — | — | — | (441 | ) | |||||||||||||||||||
Net income attributable to A. Schulman, Inc. | $ | 35,138 | $ | 1,925 | $ | 839 | $ | (824 | ) | $ | 184 | $ | (65 | ) | $ | 37,197 | ||||||||||||
Diluted EPS | $ | 1.12 | $ | 1.19 | ||||||||||||||||||||||||
Weighted-average number of shares outstanding—diluted | 31,289 | 31,289 | ||||||||||||||||||||||||||
A. SCHULMAN, INC.
SUPPLEMENTAL SEGMENT INFORMATION
Three months ended May 31, | Nine months ended May 31, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Unaudited (In thousands, except for %'s) | ||||||||||||||||
Pounds sold to unaffiliated customers | ||||||||||||||||
EMEA | 309,200 | 338,233 | 882,292 | 969,073 | ||||||||||||
Americas | 155,705 | 164,586 | 439,415 | 468,716 | ||||||||||||
APAC | 33,264 | 32,595 | 91,460 | 98,845 | ||||||||||||
Total pounds sold to unaffiliated customers | 498,169 | 535,414 | 1,413,167 | 1,536,634 | ||||||||||||
Net sales to unaffiliated customers | ||||||||||||||||
EMEA | $ | 383,852 | $ | 435,982 | $ | 1,069,304 | $ | 1,139,197 | ||||||||
Americas | 147,059 | 137,940 | 404,685 | 371,611 | ||||||||||||
APAC | 38,196 | 37,220 | 108,318 | 104,060 | ||||||||||||
Total net sales to unaffiliated customers | $ | 569,107 | $ | 611,142 | $ | 1,582,307 | $ | 1,614,868 | ||||||||
Segment gross profit | ||||||||||||||||
EMEA | $ | 49,612 | $ | 54,742 | $ | 133,926 | $ | 150,314 | ||||||||
Americas | 21,273 | 19,363 | 60,796 | 51,749 | ||||||||||||
APAC | 5,784 | 4,783 | 16,589 | 12,721 | ||||||||||||
Total segment gross profit | 76,669 | 78,888 | 211,311 | 214,784 | ||||||||||||
Inventory step-up | (80 | ) | — | (677 | ) | (283 | ) | |||||||||
Total gross profit | $ | 76,589 | $ | 78,888 | $ | 210,634 | $ | 214,501 | ||||||||
Segment operating income | ||||||||||||||||
EMEA | $ | 23,413 | $ | 25,726 | $ | 57,953 | $ | 66,850 | ||||||||
Americas | 7,869 | 4,892 | 19,323 | 12,091 | ||||||||||||
APAC | 2,913 | 1,698 | 7,976 | 3,890 | ||||||||||||
Total segment operating income | 34,195 | 32,316 | 85,252 | 82,831 | ||||||||||||
Corporate and other | (6,195 | ) | (5,493 | ) | (18,567 | ) | (21,252 | ) | ||||||||
Costs related to acquisitions | (192 | ) | 319 | (1,066 | ) | (876 | ) | |||||||||
Restructuring related | (1,944 | ) | (1,843 | ) | (6,785 | ) | (5,779 | ) | ||||||||
Asset write-downs | (2,586 | ) | (125 | ) | (2,586 | ) | (1,925 | ) | ||||||||
Curtailment gain (loss) | 101 | — | 310 | — | ||||||||||||
Inventory step-up | (80 | ) | — | (677 | ) | (283 | ) | |||||||||
Operating income | 23,299 | 25,174 | 55,881 | 52,716 | ||||||||||||
Interest expense, net | (1,635 | ) | (1,602 | ) | (5,857 | ) | (4,138 | ) | ||||||||
Foreign currency transaction gains (losses) | (53 | ) | (60 | ) | (569 | ) | (1,398 | ) | ||||||||
Other income (expense), net | 60 | 1,637 | 1,113 | 2,074 | ||||||||||||
Income before taxes | $ | 21,671 | $ | 25,149 | $ | 50,568 | $ | 49,254 | ||||||||
Capacity Utilization | ||||||||||||||||
EMEA | 87 | % | 85 | % | 81 | % | 79 | % | ||||||||
Americas | 70 | % | 67 | % | 67 | % | 64 | % | ||||||||
APAC | 90 | % | 81 | % | 84 | % | 86 | % | ||||||||
Worldwide | 80 | % | 78 | % | 75 | % | 74 | % | ||||||||
A. SCHULMAN, INC.
Reconciliation of GAAP and Non-GAAP Financial Measures
EBITDA Excluding Certain Items Reconciliation
Unaudited
(In thousands)
Three months ended May 31, | Nine months ended May 31, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Income before taxes | $ | 21,671 | $ | 25,149 | $ | 50,568 | $ | 49,254 | ||||||||
Adjustments (pre-tax): | ||||||||||||||||
Depreciation and amortization | 9,988 | 10,710 | 28,797 | 30,413 | ||||||||||||
Interest expense, net | 1,635 | 1,602 | 5,857 | 4,138 | ||||||||||||
Costs related to acquisitions | 192 | (319 | ) | 1,066 | 876 | |||||||||||
Restructuring related | 1,944 | 1,843 | 6,785 | 5,779 | ||||||||||||
Asset write-downs | 2,586 | 125 | 2,586 | 1,925 | ||||||||||||
Curtailment (gain) loss | (101 | ) | — | (310 | ) | — | ||||||||||
Inventory step-up | 80 | — | 677 | 283 | ||||||||||||
EBITDA excluding certain items | $ | 37,995 | $ | 39,110 | $ | 96,026 | $ | 92,668 | ||||||||