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| 8-K - 8-K - COMMERCIAL METALS Co | cmc-05312017xearningsrelea.htm |
EXHIBIT 99.1
News Release 
COMMERCIAL METALS COMPANY REPORTS THIRD QUARTER FISCAL 2017 EARNINGS PER SHARE OF $0.34
Irving, TX - June 22, 2017 - Commercial Metals Company (NYSE: CMC) today announced financial results for its third quarter ended May 31, 2017. Net earnings for the third quarter of fiscal 2017 were $39.3 million ($0.34 per diluted share) on net sales of $1.4 billion. This compares to net earnings of $19.3 million ($0.17 per diluted share) on net sales of $1.2 billion for the third quarter of fiscal 2016. Results for the third quarter of fiscal 2016 included a non-cash impairment charge on businesses held for sale in discontinued operations of $15.8 million ($0.13 per diluted share). Earnings from continuing operations were $39.6 million for the third quarter of fiscal 2017, compared to $35.1 million for the same period of the prior year.
Adjusted operating profit from continuing operations was $64.8 million for the third quarter of fiscal 2017, compared with adjusted operating profit from continuing operations of $60.9 million for the third quarter of fiscal 2016. Adjusted EBITDA from continuing operations was $96.9 million for the third quarter of fiscal 2017, compared with adjusted EBITDA from continuing operations of $92.5 million for the third quarter of fiscal 2016.
The Company's liquidity position at May 31, 2017 remained strong with cash and cash equivalents of $275.8 million and availability under the Company's credit and accounts receivables sales facilities of approximately $618.7 million. The Company regularly evaluates the use of its cash in efforts to maximize total shareholder return, including debt repayment, capital deployment, share repurchases and dividends.
Joe Alvarado, Chairman of the Board and CEO, commented, "Continued strength across our markets, particularly in construction activity in both the United States and Poland, contributed to very strong volumes shipped this quarter and our best quarterly adjusted EBITDA from continuing operations over the past couple of years. Additionally, our tireless focus on what we control, including minimizing our costs and providing market leading customer service helped offset some of the significant metal margin compression we faced and allowed us to deliver these solid financial results. "
On June 21, 2017, the board of directors of CMC declared a quarterly dividend of $0.12 per share for shareholders of record on July 6, 2017. The dividend will be paid on July 20, 2017.
(CMC Third Quarter Fiscal 2017 - Page 2)
Business Segments-Fiscal Third Quarter 2017 Review
Our Americas Recycling segment recorded adjusted operating profit of $9.3 million for the third quarter of fiscal 2017 compared to an adjusted operating loss of $2.0 million for the third quarter of fiscal 2016. The improvement in adjusted operating profit compared to the same period in fiscal 2016 was primarily the result of strong ferrous scrap shipments, improved metal margins, realized efficiency improvements lowering conversion costs and the addition of seven recycling facilities acquired at the beginning of the quarter in the southeastern U.S.
Our Americas Mills segment recorded adjusted operating profit of $50.7 million for the third quarter of fiscal 2017 compared to adjusted operating profit of $55.0 million for the corresponding period in fiscal 2016. Shipment volumes in this segment were strong. However, margins have been under significant pressure in 2017 due to continued elevated import levels. Strong shipments and a solid cost performance helped to mitigate the metal margin squeeze during the third fiscal quarter of 2017.
Our Americas Fabrication segment recorded adjusted operating profit of $1.8 million for the third quarter of fiscal 2017 compared to adjusted operating profit of $22.8 million for the third quarter of fiscal 2016. This result continues the trend realized over the past few quarters of competitive pressures keeping awarded contract prices low. While the results for the segment on a standalone basis are low, it contributes significantly to the Company's overall results through our high level of vertically integrated operations and the associated rebar demand drawn from our Americas Mills segment.
Our International Mill segment in Poland recorded adjusted operating profit of $13.0 million for the third quarter of fiscal 2017 compared to adjusted operating profit of $5.5 million for the corresponding period in fiscal 2016. Increased pricing, supported by continued strength in construction activity and an enhanced product mix of more merchant products leveraging the recently completed capital improvements of our facilities, has resulted in improved margins in this segment during fiscal 2017.
Our International Marketing and Distribution segment recorded adjusted operating profit of $10.2 million for the third quarter of fiscal 2017 compared to an adjusted operating profit of $0.9 million for the same period in the prior fiscal year. The increase in adjusted operating profit was the result of improved margins in our U.S. steel trading business and the elimination of losses from our U.K. operations, which have been wound down. On June 13, 2017, the Company announced its plan to exit the International Marketing and Distribution segment and it had signed a definitive agreement to sell the CMC Cometals Division.
(CMC Third Quarter Fiscal 2017 - Page 3)
Year to Date Results
Net earnings for the nine months ended May 31, 2017 were $75.9 million ($0.65 per diluted share) on net sales of $3.6 billion, compared with net earnings of $54.9 million ($0.47 per diluted share) on net sales of $3.4 billion for the nine months ended May 31, 2016. For the nine months ended May 31, 2017, earnings from continuing operations were $76.4 million, compared with $71.6 million for the same period of the prior year. For the nine months ended May 31, 2017, adjusted operating profit from continuing operations was $140.5 million, compared with $147.0 million for the nine months ended May 31, 2016. Adjusted EBITDA from continuing operations was $233.4 million for the nine months ended May 31, 2017, compared with $241.3 million for the nine months ended May 31, 2016.
Outlook
"We anticipate stability in the key macro economic drivers that impact our business for the remainder of our fiscal 2017, including continued strong demand in both the US and Polish markets and also historically low steel margins in the U.S.," said Barbara Smith, President and Chief Operating Officer. "We continue to be optimistic that the ongoing trade actions taken in both the U.S. and Poland, once finalized, will provide some relief from the flood of unfairly priced rebar imports that have impacted our markets."
Conference Call
CMC invites you to listen to a live broadcast of its third quarter of fiscal 2017 conference call today, Thursday, June 22, 2017, at 11:00 a.m. ET. Joe Alvarado, Chairman of the Board and CEO, Barbara Smith, President and COO, and Mary Lindsey, Vice President and CFO, will host the call. The call is accessible via our website at www.cmc.com. In the event you are unable to listen to the live broadcast, the call will be archived and available for replay on our website on the next business day. Financial and statistical information presented in the broadcast are located on CMC's website under "Investors."
About Commercial Metals Company
Commercial Metals Company and its subsidiaries manufacture, recycle and market steel and metal products, related materials and services through a network including steel minimills, steel fabrication and processing plants, construction-related product warehouses, metal recycling facilities and marketing and distribution offices in the United States and in strategic international markets.
Forward-Looking Statements
This news release contains forward-looking statements regarding CMC's expectations relating to key macro economic drivers that impact its business including demand, steel margins and effects of the ongoing trade actions in the U.S. and Poland. These forward-looking statements generally can be identified by phrases such as we, CMC or its management, "expects," "anticipates," "believes," "estimates," "intends," "plans to," "ought," "could," "will," "should," "likely," "appears," "potential," "outlook," or other similar words or phrases. There are inherent risks and uncertainties
(CMC Third Quarter Fiscal 2017 - Page 4)
in any forward-looking statements. Although we believe that our expectations are reasonable, we can give no assurance that these expectations will prove to have been correct, and actual results may vary materially. Except as required by law, CMC undertakes no obligation to update, amend or clarify any forward-looking statements to reflect changed assumptions, the occurrence of anticipated or unanticipated events, new information or circumstances or otherwise.
Factors that could cause actual results to differ materially from CMC's expectations include the following: overall global economic conditions, including the ongoing recovery from the last recession, continued sovereign debt problems in the Euro-zone and construction activity or lack thereof, and their impact in a highly cyclical industry; rapid and significant changes in the price of metals, potentially impairing our inventory values due to declines in commodity prices; excess capacity in our industry, particularly in China, and product availability from competing steel mills and other steel suppliers including import quantities and pricing; compliance with and changes in environmental laws and regulations, including increased regulation associated with climate change and greenhouse gas emissions; potential limitations in our or our customers' abilities to access credit and non-compliance by our customers with our contracts; financial covenants and restrictions on the operation of our business contained in agreements governing our debt; currency fluctuations; global factors, including political uncertainties and military conflicts; availability of electricity and natural gas for mill operations; information technology interruptions and breaches in data security; ability to hire and retain key executives and other employees; our ability to make necessary capital expenditures; availability and pricing of raw materials over which we exert little influence, including scrap metal, energy, insurance and supply prices; unexpected equipment failures; competition from other materials or from competitors that have a lower cost structure or access to greater financial resources; losses or limited potential gains due to hedging transactions; litigation claims and settlements, court decisions, regulatory rulings and legal compliance risks; risk of injury or death to employees, customers or other visitors to our operations; and increased costs related to health care reform legislation.
(CMC Third Quarter Fiscal 2017 - Page 5)
COMMERCIAL METALS COMPANY OPERATING STATISTICS (UNAUDITED) | ||||||||||||||||||||||||||||
Three Months Ended May 31, | Nine Months Ended May 31, | Three Months Ended | ||||||||||||||||||||||||||
(short tons in thousands) | 2017 | 2016 | 2017 | 2016 | 2/28/2017 | 11/30/2016 | 8/31/2016 | |||||||||||||||||||||
Americas Recycling | ||||||||||||||||||||||||||||
Ferrous tons shipped | 590 | 423 | 1,416 | 1,191 | 421 | 405 | 423 | |||||||||||||||||||||
Nonferrous tons shipped | 61 | 49 | 163 | 149 | 53 | 49 | 52 | |||||||||||||||||||||
Americas Recycling tons shipped | 651 | 472 | 1,579 | 1,340 | 474 | 454 | 475 | |||||||||||||||||||||
Americas Steel Mills | ||||||||||||||||||||||||||||
Rebar shipments | 445 | 462 | 1,255 | 1,220 | 406 | 404 | 411 | |||||||||||||||||||||
Merchant and other shipments | 277 | 262 | 760 | 752 | 252 | 231 | 247 | |||||||||||||||||||||
Americas Steel Mills tons shipped | 722 | 724 | 2,015 | 1,972 | 658 | 635 | 658 | |||||||||||||||||||||
Average selling price (total sales) | $ | 540 | $ | 501 | $ | 522 | $ | 522 | $ | 524 | $ | 499 | $ | 531 | ||||||||||||||
Average cost ferrous scrap utilized | 266 | 213 | 239 | 197 | 245 | 201 | 234 | |||||||||||||||||||||
Americas Steel Mills metal margin | $ | 274 | $ | 288 | $ | 283 | $ | 325 | $ | 279 | $ | 298 | $ | 297 | ||||||||||||||
International Mill | ||||||||||||||||||||||||||||
Tons shipped | 354 | 353 | 983 | 913 | 313 | 316 | 341 | |||||||||||||||||||||
Average selling price (total sales) | $ | 443 | $ | 378 | $ | 415 | $ | 382 | $ | 402 | $ | 397 | $ | 409 | ||||||||||||||
Average cost ferrous scrap utilized | 253 | 187 | 229 | 190 | 229 | 202 | 211 | |||||||||||||||||||||
International Mill metal margin | $ | 190 | $ | 191 | $ | 186 | $ | 192 | $ | 173 | $ | 195 | $ | 198 | ||||||||||||||
Americas Fabrication | ||||||||||||||||||||||||||||
Rebar shipments | 275 | 270 | 749 | 744 | 226 | 248 | 284 | |||||||||||||||||||||
Structural and post shipments | 35 | 40 | 87 | 97 | 27 | 25 | 30 | |||||||||||||||||||||
Americas Fabrication tons shipped | 310 | 310 | 836 | 841 | 253 | 273 | 314 | |||||||||||||||||||||
Americas Fabrication average selling price (excluding stock and buyout sales) | $ | 775 | $ | 827 | $ | 772 | $ | 855 | $ | 756 | $ | 782 | $ | 805 | ||||||||||||||
(CMC Third Quarter Fiscal 2017 - Page 6)
COMMERCIAL METALS COMPANY BUSINESS SEGMENTS (UNAUDITED) | ||||||||||||||||||||||||||||
(in thousands) | Three Months Ended May 31, | Nine Months Ended May 31, | Three Months Ended | |||||||||||||||||||||||||
Net sales | 2017 | 2016 | 2017 | 2016 | 2/28/2017 | 11/30/2016 | 8/31/2016 | |||||||||||||||||||||
Americas Recycling | $ | 294,166 | $ | 182,477 | $ | 694,202 | $ | 510,030 | $ | 223,328 | $ | 176,708 | $ | 195,724 | ||||||||||||||
Americas Mills | 427,276 | 396,481 | 1,151,034 | 1,117,442 | 376,593 | 347,165 | 381,406 | |||||||||||||||||||||
Americas Fabrication | 379,976 | 385,080 | 1,022,202 | 1,103,538 | 303,826 | 338,400 | 385,917 | |||||||||||||||||||||
International Mill | 167,629 | 141,438 | 436,335 | 369,344 | 134,305 | 134,401 | 147,842 | |||||||||||||||||||||
International Marketing and Distribution | 347,113 | 319,604 | 897,568 | 879,517 | 302,295 | 248,160 | 310,079 | |||||||||||||||||||||
Corporate | 1,909 | 4,585 | 7,501 | 4,109 | 3,842 | 1,750 | 2,973 | |||||||||||||||||||||
Eliminations | (235,453 | ) | (202,275 | ) | (601,542 | ) | (582,034 | ) | (194,568 | ) | (171,521 | ) | (215,361 | ) | ||||||||||||||
Total net sales | $ | 1,382,616 | $ | 1,227,390 | $ | 3,607,300 | $ | 3,401,946 | $ | 1,149,621 | $ | 1,075,063 | $ | 1,208,580 | ||||||||||||||
Adjusted operating profit (loss) from continuing operations | ||||||||||||||||||||||||||||
Americas Recycling | $ | 9,286 | $ | (1,978 | ) | $ | 11,954 | $ | (16,171 | ) | $ | 7,766 | $ | (5,098 | ) | $ | (45,113 | ) | ||||||||||
Americas Mills | 50,734 | 54,976 | 139,002 | 164,739 | 51,319 | 36,949 | 45,012 | |||||||||||||||||||||
Americas Fabrication | 1,808 | 22,794 | 9,025 | 58,964 | 506 | 6,711 | 9,638 | |||||||||||||||||||||
International Mill | 12,953 | 5,467 | 32,356 | 10,189 | 9,430 | 9,973 | 18,703 | |||||||||||||||||||||
International Marketing and Distribution | 10,164 | 892 | 15,341 | (3,570 | ) | 6,143 | (966 | ) | (3,517 | ) | ||||||||||||||||||
Corporate | (20,880 | ) | (22,542 | ) | (67,210 | ) | (69,415 | ) | (22,317 | ) | (24,013 | ) | (25,670 | ) | ||||||||||||||
Eliminations | 783 | 1,331 | 3 | 2,233 | (576 | ) | (204 | ) | 3,086 | |||||||||||||||||||
Adjusted operating profit from continuing operations | $ | 64,848 | $ | 60,940 | $ | 140,471 | $ | 146,969 | $ | 52,271 | $ | 23,352 | $ | 2,139 | ||||||||||||||
(CMC Third Quarter Fiscal 2017 - Page 7)
COMMERCIAL METALS COMPANY CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED) | ||||||||||||||||
Three Months Ended May 31, | Nine Months Ended May 31, | |||||||||||||||
(in thousands, except share data) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Net sales | $ | 1,382,616 | $ | 1,227,390 | $ | 3,607,300 | $ | 3,401,946 | ||||||||
Costs and expenses: | ||||||||||||||||
Cost of goods sold | 1,209,195 | 1,051,910 | 3,142,697 | 2,934,028 | ||||||||||||
Selling, general and administrative expenses | 108,803 | 114,841 | 324,789 | 310,667 | ||||||||||||
Interest expense | 12,368 | 14,737 | 38,108 | 49,666 | ||||||||||||
Loss on debt extinguishment | — | 115 | — | 11,480 | ||||||||||||
1,330,366 | 1,181,603 | 3,505,594 | 3,305,841 | |||||||||||||
Earnings from continuing operations before income taxes | 52,250 | 45,787 | 101,706 | 96,105 | ||||||||||||
Income taxes | 12,641 | 10,676 | 25,284 | 24,512 | ||||||||||||
Earnings from continuing operations | 39,609 | 35,111 | 76,422 | 71,593 | ||||||||||||
Loss from discontinued operations before income taxes (benefit) | (351 | ) | (15,785 | ) | (542 | ) | (16,803 | ) | ||||||||
Income taxes (benefit) | (8 | ) | (2 | ) | 7 | (103 | ) | |||||||||
Loss from discontinued operations | (343 | ) | (15,783 | ) | (549 | ) | (16,700 | ) | ||||||||
Net earnings | 39,266 | 19,328 | 75,873 | 54,893 | ||||||||||||
Less net earnings attributable to noncontrolling interests | — | — | — | — | ||||||||||||
Net earnings attributable to CMC | 39,266 | 19,328 | 75,873 | 54,893 | ||||||||||||
Basic earnings (loss) per share attributable to CMC: | ||||||||||||||||
Earnings from continuing operations | $ | 0.34 | $ | 0.31 | $ | 0.66 | $ | 0.62 | ||||||||
Loss from discontinued operations | — | (0.14 | ) | — | (0.14 | ) | ||||||||||
Net earnings | $ | 0.34 | $ | 0.17 | $ | 0.66 | $ | 0.48 | ||||||||
Diluted earnings (loss) per share attributable to CMC: | ||||||||||||||||
Earnings from continuing operations | $ | 0.34 | $ | 0.30 | $ | 0.65 | $ | 0.61 | ||||||||
Loss from discontinued operations | — | (0.13 | ) | — | (0.14 | ) | ||||||||||
Net earnings | $ | 0.34 | $ | 0.17 | $ | 0.65 | $ | 0.47 | ||||||||
Cash dividends per share | $ | 0.12 | $ | 0.12 | $ | 0.36 | $ | 0.36 | ||||||||
Average basic shares outstanding | 115,886,372 | 114,677,109 | 115,574,289 | 115,373,736 | ||||||||||||
Average diluted shares outstanding | 117,205,369 | 115,995,515 | 117,087,341 | 116,758,716 | ||||||||||||
(CMC Third Quarter Fiscal 2017 - Page 8)
COMMERCIAL METALS COMPANY CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) | ||||||||
(in thousands) | May 31, 2017 | August 31, 2016 | ||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 275,778 | $ | 517,544 | ||||
Accounts receivable, net | 869,970 | 765,784 | ||||||
Inventories, net | 798,013 | 652,754 | ||||||
Other current assets | 108,248 | 112,043 | ||||||
Total current assets | 2,052,009 | 2,048,125 | ||||||
Net property, plant and equipment | 1,016,875 | 895,049 | ||||||
Goodwill | 66,764 | 66,373 | ||||||
Other assets | 138,951 | 121,322 | ||||||
Total assets | $ | 3,274,599 | $ | 3,130,869 | ||||
Liabilities and stockholders' equity | ||||||||
Current liabilities: | ||||||||
Accounts payable-trade | $ | 345,974 | $ | 243,532 | ||||
Accounts payable-documentary letters of credit | 566 | 5 | ||||||
Accrued expenses and other payables | 258,288 | 264,112 | ||||||
Current maturities of long-term debt | 311,654 | 313,469 | ||||||
Total current liabilities | 916,482 | 821,118 | ||||||
Deferred income taxes | 61,492 | 63,021 | ||||||
Other long-term liabilities | 126,864 | 121,351 | ||||||
Long-term debt | 751,676 | 757,948 | ||||||
Total liabilities | 1,856,514 | 1,763,438 | ||||||
Stockholders' equity attributable to CMC | 1,417,912 | 1,367,272 | ||||||
Stockholders' equity attributable to noncontrolling interests | 173 | 159 | ||||||
Total equity | 1,418,085 | 1,367,431 | ||||||
Total liabilities and stockholders' equity | $ | 3,274,599 | $ | 3,130,869 | ||||
(CMC Third Quarter Fiscal 2017 - Page 9)
COMMERCIAL METALS COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | ||||||||
Nine Months Ended May 31, | ||||||||
(in thousands) | 2017 | 2016 | ||||||
Cash flows from (used by) operating activities: | ||||||||
Net earnings | $ | 75,873 | $ | 54,893 | ||||
Adjustments to reconcile net earnings to cash flows from (used by) operating activities: | ||||||||
Depreciation and amortization | 93,049 | 95,423 | ||||||
Stock-based compensation | 19,716 | 19,889 | ||||||
Deferred income taxes | (2,538 | ) | 9,744 | |||||
Amortization of interest rate swaps termination gain | (5,698 | ) | (5,698 | ) | ||||
Write-down of inventories | 1,820 | 9,567 | ||||||
Provision for losses on receivables, net | 856 | 3,748 | ||||||
Asset impairment | 622 | 15,842 | ||||||
Net gain on disposals of assets and other | (343 | ) | (1,802 | ) | ||||
Loss on debt extinguishment | — | 11,480 | ||||||
Tax benefit from stock plans | — | (666 | ) | |||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (86,668 | ) | 146,166 | |||||
Proceeds (payments) on sales of accounts receivable programs, net | (4,327 | ) | 1,473 | |||||
Inventories | (134,720 | ) | 205,717 | |||||
Accounts payable, accrued expenses and other payables | 83,355 | (64,676 | ) | |||||
Changes in other operating assets and liabilities | (22,083 | ) | 5,768 | |||||
Net cash flows from operating activities | 18,914 | 506,868 | ||||||
Cash flows from (used by) investing activities: | ||||||||
Capital expenditures | (162,082 | ) | (104,481 | ) | ||||
Acquisitions | (54,425 | ) | — | |||||
Decrease (increase) in restricted cash, net | 7,492 | (49,094 | ) | |||||
Proceeds from the sale of property, plant and equipment and other | 1,884 | 3,470 | ||||||
Net cash flows used by investing activities | (207,131 | ) | (150,105 | ) | ||||
Cash flows from (used by) financing activities: | ||||||||
Cash dividends | (41,619 | ) | (41,586 | ) | ||||
Repayments on long-term debt | (8,775 | ) | (208,605 | ) | ||||
Stock issued under incentive and purchase plans, net of forfeitures | (5,516 | ) | (6,036 | ) | ||||
Proceeds from New Markets Tax Credit transactions | 2,141 | — | ||||||
Contribution from noncontrolling interests | 14 | 29 | ||||||
Increase (decrease) in documentary letters of credit, net | 569 | (40,145 | ) | |||||
Short-term borrowings, net change | — | (20,090 | ) | |||||
Treasury stock acquired | — | (30,595 | ) | |||||
Debt extinguishment costs | — | (11,127 | ) | |||||
Tax benefit from stock plans | — | 666 | ||||||
Decrease in restricted cash | — | 1 | ||||||
Net cash flows used by financing activities | (53,186 | ) | (357,488 | ) | ||||
Effect of exchange rate changes on cash | (363 | ) | (743 | ) | ||||
Decrease in cash and cash equivalents | (241,766 | ) | (1,468 | ) | ||||
Cash and cash equivalents at beginning of year | 517,544 | 485,323 | ||||||
Cash and cash equivalents at end of period | $ | 275,778 | $ | 483,855 | ||||
(CMC Third Quarter Fiscal 2017 - Page 10)
COMMERCIAL METALS COMPANY
NON-GAAP FINANCIAL MEASURES (UNAUDITED)
This press release contains financial measures not derived in accordance with generally accepted accounting principles ("GAAP"). Reconciliations to the most comparable GAAP measures are provided below.
Adjusted Operating Profit from Continuing Operations is a non-GAAP financial measure. Adjusted operating profit from continuing operations is the sum of our earnings from continuing operations before income taxes, interest expense and discounts on sales of accounts receivable. Adjusted operating profit from continuing operations should not be considered as an alternative to earnings from continuing operations or net earnings, as determined by GAAP. Management uses adjusted operating profit from continuing operations to evaluate our financial performance. For added flexibility, we may sell certain trade accounts receivable both in the U.S. and internationally. We consider sales of accounts receivable as an alternative source of liquidity to finance our operations, and we believe that removing these costs provides a clearer perspective of our operating performance. Adjusted operating profit from continuing operations may be inconsistent with similar measures presented by other companies.
Three Months Ended May 31, | Nine Months Ended May 31, | Three Months Ended | ||||||||||||||||||||||||||
(in thousands) | 2017 | 2016 | 2017 | 2016 | 2/28/2017 | 11/30/2016 | 8/31/2016 | |||||||||||||||||||||
Earnings from continuing operations | $ | 39,609 | $ | 35,111 | $ | 76,422 | $ | 71,593 | $ | 29,639 | $ | 7,174 | $ | 950 | ||||||||||||||
Income taxes | 12,641 | 10,676 | 25,284 | 24,512 | 9,990 | 2,653 | (11,865 | ) | ||||||||||||||||||||
Interest expense | 12,368 | 14,737 | 38,108 | 49,666 | 12,442 | 13,298 | 12,565 | |||||||||||||||||||||
Discounts on sales of accounts receivable | 230 | 416 | 657 | 1,198 | 200 | 227 | 489 | |||||||||||||||||||||
Adjusted operating profit from continuing operations | $ | 64,848 | $ | 60,940 | $ | 140,471 | $ | 146,969 | $ | 52,271 | $ | 23,352 | $ | 2,139 | ||||||||||||||
Adjusted EBITDA from Continuing Operations is a non-GAAP financial measure. Adjusted EBITDA from continuing operations is the sum of earnings from continuing operations before net earnings attributable to noncontrolling interests, interest expense and income taxes. It also excludes our largest recurring non-cash charge, depreciation and amortization, as well as long-lived asset and goodwill impairment charges, which are also non-cash. Adjusted EBITDA from continuing operations should not be considered as an alternative to earnings from continuing operations or net earnings, or as a better measure of liquidity than net cash flows from operating activities, as determined by GAAP. However, we believe that adjusted EBITDA from continuing operations provides relevant and useful information, which is often used by analysts, creditors and other interested parties as it allows: (i) comparison of our earnings to those of our competitors; (ii) a supplemental measure of our ongoing core performance; and (iii) the assessment of period-to-period performance trends. Additionally, adjusted EBITDA from continuing operations is the target benchmark for our annual and long-term cash incentive performance plans for management. Adjusted EBITDA from continuing operations may be inconsistent with similar measures presented by other companies.
There were no net earnings attributable to noncontrolling interests during the three and nine months ended May 31, 2017 and 2016.
Three Months Ended May 31, | Nine Months Ended May 31, | Three Months Ended | ||||||||||||||||||||||||||
(in thousands) | 2017 | 2016 | 2017 | 2016 | 2/28/2017 | 11/30/2016 | 8/31/2016 | |||||||||||||||||||||
Earnings from continuing operations | $ | 39,609 | $ | 35,111 | $ | 76,422 | $ | 71,593 | $ | 29,639 | $ | 7,174 | $ | 950 | ||||||||||||||
Interest expense | 12,368 | 14,737 | 38,108 | 49,666 | 12,442 | 13,298 | 12,565 | |||||||||||||||||||||
Income taxes | 12,641 | 10,676 | 25,284 | 24,512 | 9,990 | 2,653 | (11,865 | ) | ||||||||||||||||||||
Depreciation and amortization | 32,259 | 31,883 | 93,044 | 95,424 | 30,499 | 30,286 | 31,516 | |||||||||||||||||||||
Impairment charges | 70 | 76 | 549 | 76 | 91 | 388 | 39,952 | |||||||||||||||||||||
Adjusted EBITDA from continuing operations | $ | 96,947 | $ | 92,483 | $ | 233,407 | $ | 241,271 | $ | 82,661 | $ | 53,799 | $ | 73,118 | ||||||||||||||
Media Contact:
Susan Gerber
214.689.4300