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 January 11, 2016 - 8:12 AM EST
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A. Schulman Reports Fiscal 2016 First Quarter Results

- Fiscal first quarter GAAP earnings per share were $0.18 compared with $0.45 in the prior year. Adjusted earnings were $0.50 per share, compared with $0.63 per share in the fiscal 2015 first quarter. - Adjusted EBITDA rose 44% to $57.9 million, compared with $40.1 million in the prior year period enabling the Company to use its strong cash flow to continue to pay down debt. - Adjusted operating income rose 35% to $37.8 million compared with the prior year quarter, and adjusted operating margin expanded to 5.8%, up 120 basis points driven by the highest gross margin percentage in the past five years. - Company reaffirms fiscal 2016 adjusted net income guidance of $2.80 to $2.85 per diluted share, an approximate 20% increase compared with fiscal 2015 results.

AKRON, Ohio, Jan. 11, 2016 /PRNewswire/ -- A. Schulman, Inc. (Nasdaq: SHLM) announced today earnings for the fiscal first quarter ended November 30, 2015.

Bernard Rzepka, president and chief executive officer, said, "We are pleased to demonstrate ongoing progress toward our strategic vision of moving beyond plastic compounding by continuing to transform A. Schulman from a commodity business to a specialty solutions company. All of our segments posted considerable profit improvement, excluding the impact of foreign currency, driven by our focus on our '3S' execution excellence initiatives: Safety, Smart Sales, and Smart Savings, and in addition, our acquisition of the high-margin Citadel business. When compared with the prior year, we boosted adjusted gross margin by 260 basis points and adjusted operating margin by 120 basis points as we continue to drive product mix improvements."

Joseph Levanduski, executive vice president & chief financial officer, said, "Our bottom line was significantly impacted by the costs incurred during the investigation and the ongoing resolution process of the Lucent quality reporting matter. Our GAAP results were negatively impacted by $4.9 million or $0.12 per diluted share related to these actions, of which $3.7 million or $0.09 per diluted share were excluded from our non-GAAP results. Still, we have confidence that we will drive restructuring, integration, and other smart savings actions that will overcome the ongoing costs to resolve the Lucent matter and our strategic initiatives are continuing to provide greater profitability. Therefore, we reaffirm our full year guidance."

Fiscal First-Quarter Results
Net sales for the fiscal 2016 first quarter were $649.2 million, an increase of 5.6% compared with $615.1 million in the prior-year quarter. Foreign currency translation negatively impacted net sales by $62 million, or 10% of sales. Net sales from Citadel contributed $111.1 million of revenue during the quarter. Excluding the incremental sales from the Citadel acquisition and negative foreign currency impact, net sales declined 2.4% as the Company experienced lower volumes in its U.S. and Canada ("USCAN") segment's commodity product and service offerings.

Adjusted gross margin in the first quarter as a percent of net sales improved to 16.8% compared with 14.2% in the prior-year period due to a stronger customer shift to higher value added product sales and mix improvement from higher margin product sales from the Citadel acquisition.

The Company reported GAAP income from continuing operations of $0.18 per diluted share, compared with $0.45 in the year-ago period. On an adjusted basis, excluding certain financing, restructuring and acquisitions-related costs, the Company generated net income of $0.50 per diluted share compared to $0.63 in the year-ago period.

Europe, Middle East and Africa ("EMEA") net sales were $328.1 million compared with $371.2 million in the same prior-year period. Excluding the unfavorable impact of foreign currency translation of $44.2 million, legacy revenues were essentially flat, consistent with fiscal fourth-quarter 2015 results. Excluding the negative impact of foreign currency translation of $5.9 million, adjusted gross profit margin rose 110 basis points to 14.5%, primarily due to improved product mix and favorable raw material pricing.

Net sales for the USCAN were $178.3 million in the quarter, compared with $144.7 million in the prior-year period. Excluding the $59.1 million of acquired Citadel revenue, legacy revenues fell 17.6%.

"We experienced USCAN revenue and volume weakness in our Masterbatch and Specialty Powders business units as well as Engineered Plastics. The declines in Masterbatch and Specialty Powders were primarily driven by certain tolling customers who destocked their inventory and shifted some production in-house. The decline in Engineered Plastics is a result of the team's intense focus to resolve the previously disclosed Lucent quality reporting matter," said Rzepka. "Despite the contraction in these businesses, USCAN adjusted gross margin was 17.0%, steady with the prior-year period, as the Citadel integration and our focus on added-value products continue to bear fruit."

Latin America's ("LATAM") net sales for the quarter were $45.2 million. Excluding the unfavorable impact of foreign currency translation of $10.6 million, core revenues increased nearly 21%, up significantly from the 12.7% growth in the fourth quarter. LATAM adjusted gross profit of 21.5% was nearly double that of the 12.2% in the prior year.  LATAM results were driven by market expansion and operational improvements. 

Asia Pacific ("APAC") reported net sales were $45.7 million. Adjusting for a negative foreign exchange impact of $6.7 million, legacy revenues fell 1%. APAC adjusted gross profit margin was 17.2%, up 350 basis points from the prior period due to the benefits of several strategic focus initiatives to improve product mix.

Engineered Composites ("EC") net sales for the quarter were $51.9 million. While EC was acquired on June 1, 2015, for comparison purposes, the legacy revenues declined slightly from the year-ago period results, after adjusting for currency and Citadel's earlier acquisition of The Composites Group. Organic volumes in the legacy EC business improved but were offset by domestic weakness in the oil & gas market. EC gross profit margin for the quarter was 25.4%, stable with the fourth quarter of fiscal 2015 results. 

Citadel Integration
"We are pleased that during the quarter we over-delivered on our internal synergy targets. We remain focused on capturing our stated Citadel integration synergy savings of $20 million by the end of fiscal 2016 and achieve the full run rate of $25 million during fiscal 2017," said Rzepka. "In October, we announced the consolidation across several Engineered Plastics operations, which will result in closure of three manufacturing facilities, more efficient operations at the remaining facilities, and ultimate annual savings of $9.5 million. The remainder of the synergy savings will be driven from sourcing actions and SG&A consolidations. These efforts are underway, and contributed $3.8 million or $0.09 per share to the current quarter results." 

Lucent Update
As previously reported, the Company identified quality reporting issues affecting certain product lines at two former Citadel manufacturing facilities that were once part of Lucent Polymers, which was acquired as part of the Citadel acquisition. Specifically, the Company discovered discrepancies between laboratory data and certifications provided by Lucent to customers with respect to certain products using recycled or reclaimed raw materials.

"We took immediate decisive actions following our initial discovery, including implementing strict protocols designed to meet customer standards and certification requirements for all future shipments," stated Rzepka. "To date, we have notified all affected customers and I am encouraged that no customers or other parties have initiated recalls or have made material claims against the Company or have sought to terminate their relationships with us."

The Company incurred a total of $4.9 million of costs related to this matter that negatively impacted the Company's operating results for the first quarter of fiscal 2016, including product and manufacturing operational costs, dedicated internal personnel costs, a reduction in inventory value, and additional legal and investigative costs.

An internal investigation will continue as to the scope of products, customers, and other parties affected. The Company has provided a written claim notice to the sellers and to the escrow agent with respect to the indemnity escrow established in connection with the stock purchase agreement pursuant to which the Company acquired Citadel and its subsidiaries.

Working Capital/Cash Flow
Cash provided from operations was $40.0 million in the quarter ending November 30, 2015, compared to $10.3 million in the year-ago quarter. Working capital days were 64 days in the current quarter, unchanged from the fourth quarter of fiscal 2015.

Capital expenditures for the quarter were $7.4 million compared with $10.3 million in the prior year. During the fiscal 2016 first quarter the Company paid down 20 million Euro of its Term Loan B debt in Europe and continued to focus on deleveraging the balance sheet as quickly as possible. Net leverage on an adjusted basis is now further lowered to 3.85x, and the Company continues to repay term debt, with an additional 10 million Euro term debt pay down in early January, 2016.

During the first quarter of fiscal 2016, the Company declared and paid quarterly cash dividends of $0.205 per common share, for a total amount of $6.0 million. In addition, a quarterly cash dividend of $15.00 per share was declared and paid on the 125,000 shares of the Company's convertible special stock, representing a $1.9 million cash outflow.

Business Outlook
Rzepka said, "Fiscal 2016 has begun on a challenging note, with weakening macroeconomic conditions across several regions, continued pressure in the oil, energy, and material markets, ongoing currency headwinds, and the costs of our internal actions to resolve the Lucent matter. To that end, we are undertaking additional cost reduction actions company-wide, designed to more than offset the first quarter shortfall. Therefore, we maintain our fiscal 2016 earnings guidance range of $2.80 to $2.85 per diluted share. 

"We have faced challenges before and our seasoned team is highly focused on our commitment to deliver substantial annual earnings growth from both the continuing transformation to higher specialization and the wide-ranging benefits that are unfolding from the integration of Citadel."

Conference Call on the Web
A live Internet broadcast of A. Schulman's conference call regarding fiscal 2016 first-quarter earnings can be accessed at 10:00 a.m. Eastern Time on Monday, January 11, 2016, on the Company's website, www.aschulman.com. An archived replay of the call will also be available on the website.

Investor Presentation Materials
Senior executives of the Company participate in meetings with analysts and investors throughout the fiscal year. The Company has posted presentation materials, portions of which are be used during such meetings, in the Investors section of its website at www.aschulman.com. The presentation will remain on the website as long as it is in use.

About A. Schulman, Inc.
A. Schulman, Inc. is a leading international supplier of high-performance plastic compounds and resins headquartered in Akron, Ohio. Since 1928, the Company has been providing innovative solutions to meet its customers' demanding requirements. The Company's customers span a wide range of markets such as packaging, mobility, building & construction, electronics & electrical, agriculture, personal care & hygiene, sports, leisure & home, custom services and others. The Company employs approximately 5,000 people and has 58 manufacturing facilities globally. A. Schulman reported net sales of approximately $2.4 billion for the fiscal year ended August 31, 2015. Additional information about A. Schulman can be found at www.aschulman.com.

Use of Non-GAAP Financial Measures
This release includes certain financial information determined by methods other than in accordance with accounting principles generally accepted in the United States ("GAAP"). These non-GAAP financial measures include segment gross profit, SG&A expenses excluding certain items, segment operating income, operating income before certain items, net income excluding certain items, net income per diluted share excluding certain items and adjusted EBITDA, as discussed further in the Reconciliation of GAAP and Non-GAAP Financial Measures below. These non-GAAP financial measures are considered relevant to aid analysis and understanding of the Company's results and business trends. However, non-GAAP measures are not in accordance with, nor are they a substitute for, GAAP measures, and tables included in this release reconcile each non-GAAP financial measure with the most directly comparable GAAP financial measure. The most directly comparable GAAP financial measures for these purposes are gross profit, SG&A expenses, operating income, net income and net income per diluted share. The Company's non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures, and should be read only in conjunction with the Company's consolidated financial statements prepared in accordance with GAAP.

While the Company believes that these non-GAAP financial measures provide useful supplemental information to investors, there are very significant limitations associated with their use. These non-GAAP financial measures are not prepared in accordance with GAAP, August not be reported by all of the Company's competitors and August not be directly comparable to similarly titled measures of the Company's competitors due to potential differences in the exact method of calculation. The Company compensates for these limitations by using these non-GAAP financial measures as supplements to GAAP financial measures and by reviewing the reconciliations of the non-GAAP financial measures to their most comparable GAAP financial measures.

Cautionary Statements
A number of the matters discussed in this document that are not historical or current facts deal with potential future circumstances and developments and August constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the fact that they do not relate strictly to historic or current facts and relate to future events and expectations. Forward-looking statements contain such words as "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. Forward-looking statements are based on management's current expectations and include known and unknown risks, uncertainties and other factors, many of which management is unable to predict or control, that August cause actual results, performance or achievements to differ materially from those expressed or implied in the forward-looking statements. Important factors that could cause actual results to differ materially from those suggested by these forward-looking statements, and that could adversely affect the Company's future financial performance, include, but are not limited to, the following:

  • worldwide and regional economic, business and political conditions, including continuing economic uncertainties in some or all of the Company's major product markets or countries where the Company has operations;
  • the effectiveness of the Company's efforts to improve operating margins through sales growth, price increases, productivity gains, and improved purchasing techniques;
  • competitive factors, including intense price competition;
  • fluctuations in the value of currencies in areas where the Company operates;
  • volatility of prices and availability of the supply of energy and raw materials that are critical to the manufacture of the Company's products, particularly plastic resins derived from oil and natural gas;
  • changes in customer demand and requirements;
  • effectiveness of the Company to achieve the level of cost savings, productivity improvements, growth and other benefits anticipated from acquisitions, joint ventures and restructuring initiatives;
  • escalation in the cost of providing employee health care;
  • uncertainties and unanticipated developments regarding contingencies, such as pending and future litigation and other claims, including developments that would require increases in our costs and/or reserves for such contingencies;
  • 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;
  • integration of acquisitions, including most recently Citadel, with our existing business, including the risk that the integration will be more costly or more time consuming and complex or simply less effective than anticipated;
  • our ability to achieve the anticipated synergies, cost savings and other benefits from the Citadel acquisition; 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, 2015. In addition, risks and uncertainties not presently known to the Company or that it believes to be immaterial also may adversely affect the Company. Should any known or unknown risks or uncertainties develop into actual events, or underlying assumptions prove inaccurate, these developments could have material adverse effects on the Company's business, financial condition and results of operations.

SHLM_ALL

 

A. SCHULMAN, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)



Three months ended November 30,


2015


2014


(In thousands, except per share data)

Net sales

$

649,219



$

615,053


Cost of sales

544,290



528,209


Selling, general and administrative expenses

77,237



60,547


Restructuring expense

1,546



5,219


Operating income

26,146



21,078


Interest expense

13,618



2,359


Foreign currency transaction (gains) losses

729



1,099


Other (income) expense, net

71



(254)


Income (loss) from continuing operations before taxes

11,728



17,874


Provision (benefit) for U.S. and foreign income taxes

4,251



4,486


Income (loss) from continuing operations

7,477



13,388


Income (loss) from discontinued operations, net of tax

20



(10)


Net income (loss)

7,497



13,378


Noncontrolling interests

(404)



(220)


Net income (loss) attributable to A. Schulman, Inc.

7,093



13,158


Convertible special stock dividends

1,875




Net income (loss) available to A. Schulman, Inc. common stockholders

$

5,218



$

13,158






Weighted-average number of shares outstanding:




Basic

29,223



29,017


Diluted

29,462



29,468






Basic earnings per share available to A. Schulman, Inc. common stockholders




Income (loss) from continuing operations

$

0.18



$

0.45


Income (loss) from discontinued operations




Net income (loss) available to A. Schulman, Inc. common stockholders

$

0.18



$

0.45






Diluted earnings per share available to A. Schulman, Inc. common stockholders




Income (loss) from continuing operations

$

0.18



$

0.45


Income (loss) from discontinued operations




Net income (loss) available to A. Schulman, Inc. common stockholders

$

0.18



$

0.45






Cash dividends per common share

$

0.205



$

0.205


Cash dividends per share of convertible special stock

$

15.00



$


 

A. SCHULMAN, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)



November 30,
 2015


August 31,
 2015


(In thousands)

ASSETS

Current assets:




Cash and cash equivalents

$

95,562



$

96,872


Accounts receivable, less allowance for doubtful accounts of $10,533 at November 30, 2015 and $10,777 at August 31, 2015

395,317



413,943


Inventories

313,616



317,328


Prepaid expenses and other current assets

68,483



60,205


Total current assets

872,978



888,348


Property, plant and equipment, at cost:




Land and improvements

31,883



31,674


Buildings and leasehold improvements

163,448



164,759


Machinery and equipment

418,652



427,183


Furniture and fixtures

33,733



34,393


Construction in progress

25,960



23,866


Gross property, plant and equipment

673,676



681,875


Accumulated depreciation

365,590



367,381


Net property, plant and equipment

308,086



314,494


Deferred charges and other noncurrent assets

88,490



90,749


Goodwill

623,551



623,583


Intangible assets, net

423,302



434,537


Total assets

$

2,316,407



$

2,351,711


LIABILITIES AND EQUITY

Current liabilities:




Accounts payable

$

299,219



$

305,385


U.S. and foreign income taxes payable

3,885



4,205


Accrued payroll, taxes and related benefits

58,067



56,192


Other accrued liabilities

84,109



70,824


Short-term debt

22,433



20,710


Total current liabilities

467,713



457,316


Long-term debt

1,013,576



1,045,349


Pension plans

112,265



117,889


Deferred income taxes

117,186



115,537


Other long-term liabilities

22,281



22,885


Total liabilities

1,733,021



1,758,976


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 - 48,371 shares at November 30, 2015 and 48,369 shares at August 31, 2015

48,371



48,369


Additional paid-in capital

275,095



274,319


Accumulated other comprehensive income (loss)

(93,152)



(83,460)


Retained earnings

606,884



607,690


Treasury stock, at cost, 19,075 shares at November 30, 2015 and 19,077 shares at August 31, 2015

(383,085)



(383,121)


Total A. Schulman, Inc.'s stockholders' equity

574,402



584,086


Noncontrolling interests

8,984



8,649


Total equity

583,386



592,735


Total liabilities and equity

$

2,316,407



$

2,351,711


 

A. SCHULMAN, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



Three months ended November 30,


2015


2014


(In thousands)

Operating from continuing and discontinued operations:




Net income

7,497



13,378


Adjustments to reconcile net income to net cash provided from (used in) operating activities:




Depreciation

12,013



8,963


Amortization

10,039



4,066


Deferred tax provision

1,306



633


Pension, postretirement benefits and other compensation

1,217



2,452


Changes in assets and liabilities, net of acquisitions:




Accounts receivable

7,345



(4,731)


Inventories

(8,671)



(16,341)


Accounts payable

377



8,200


Income taxes

1,432



463


Accrued payroll and other accrued liabilities

18,614



2,846


Other assets and long-term liabilities

(11,144)



(9,670)


Net cash provided from (used in) operating activities

40,025



10,259


Investing from continuing and discontinued operations:




Expenditures for property, plant and equipment

(7,402)



(10,324)


Proceeds from the sale of assets

361



904


Business acquisitions, net of cash



(6,698)


Net cash provided from (used in) investing activities

(7,041)



(16,118)


Financing from continuing and discontinued operations:




Cash dividends paid to special stockholders

(1,875)




Cash dividends paid to common stockholders

(6,024)



(5,962)


Increase (decrease) in short-term debt

1,926



870


Borrowings on long-term debt



27,500


Repayments on long-term debt including current portion

(24,946)



(10,915)


Noncontrolling interests' contributions (distributions)



(1,750)


Issuances of stock, common and treasury

90



71


Purchases of treasury stock



(3,335)


Net cash provided from (used in) financing activities

(30,829)



6,479


Effect of exchange rate changes on cash

(3,465)



(4,004)


Net increase (decrease) in cash and cash equivalents

(1,310)



(3,384)


Cash and cash equivalents at beginning of period

96,872



135,493


Cash and cash equivalents at end of period

$

95,562



$

132,109














 

A. SCHULMAN, INC.

Reconciliation of GAAP and Non-GAAP Financial Measures

Unaudited


Three months ended November 30, 2015


Cost of Sales


Gross Margin


SG&A


Restructuring Expense


Operating Income


Operating Income per Pound


Non Operating (Income) Expense


Income Tax Expense (Benefit)


Net Income Available to ASI Common Stockholders


Diluted EPS



(In thousands, except for %'s, per pound and per share data)

As reported


$

544,290



16.2

%


$

77,237



$

1,546



$

26,146



$

0.041



$

14,418



$

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





(297)



1,391



3,576



0.12


Lucent costs (4)


(1,830)





(1,876)





3,706







1,037



2,669



0.09


Accelerated amortization of deferred financing fees (5)














(110)



31



79




Tax benefits (charges) (6)
















(965)



965



0.03


Loss (income) from discontinued operations


















(20)




Total certain items


(3,836)



0.6

%


(6,313)



(1,546)



11,695



0.018



(407)



2,422



9,660



0.32


As Adjusted


$

540,454



16.8

%


$

70,924



$



$

37,841



$

0.059



$

14,011



$

6,673



$

14,878



$

0.50























Percentage of Revenue






10.9

%




5.8

%








2.2

%
























Effective Tax Rate
















28.0

%


























Three months ended November 30, 2014


Cost of Sales


Gross Margin


SG&A


Restructuring Expense


Operating Income


Operating Income per Pound


Non Operating (Income) Expense


Income Tax Expense (Benefit)


Net Income Available to ASI Common Stockholders


Diluted EPS



(In thousands, except for %'s, per pound and per share data)

As reported


$

528,209



14.1

%


$

60,547



$

5,219



$

21,078



$

0.039



$

3,204



$

4,486



$

13,158



$

0.45


Certain items:





















Costs related to acquisitions and integrations (2)


(50)





(1,003)





1,053







77



976



0.03


Restructuring and related costs (3)






(360)



(5,219)



5,579







1,483



4,096



0.14


Inventory step-up (7)


(341)









341







102



239



0.01


Loss (income) from discontinued operations


















10




Total certain items


(391)



0.1

%


(1,363)



(5,219)



6,973



0.013





1,662



5,321



0.18


As Adjusted


$

527,818



14.2

%


$

59,184



$



$

28,051



$

0.052



$

3,204



$

6,148



$

18,479



$

0.63























Percentage of Revenue






9.6

%




4.6

%








3.0

%
























Effective Tax Rate
















24.7

%






1 - Accelerated depreciation is related to restructuring plans in the Company's USCAN and EMEA segments. Refer to Note 14 in the Company's Quarterly Report on Form 10-Q for the three months ended November 30, 2015 for further discussion.

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.

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 - Write off of deferred financing costs related to the €20.0 million pay down of the Euro Term Loan B.

6 - Tax benefits (charges) represent the Company's quarterly non-GAAP tax based on the overall estimated annual non-GAAP effective tax rates.

7 - Inventory step-up costs represent the amortization of adjustments to fair value of inventory acquired for acquisition purchase accounting.

 

A. SCHULMAN, INC.

ADJUSTED EBITDA RECONCILIATION

(Unaudited)



Three months ended November 30,


2015


2014


(In thousands)





Net income available to A. Schulman, Inc. common
stockholders, as adjusted (1)

$

14,878



$

18,479


Interest expense, as adjusted (2)

13,508



2,359


Provision for U.S. and foreign income taxes, as adjusted (1)

6,673



6,148


Depreciation, as adjusted (3)

10,548



8,963


Amortization

10,039



3,961


Minority Interest

404



220


Special Stock Dividends

1,875




EBITDA, as adjusted

$

57,925



$

40,130







(1) - For a list of certain items to reconcile between "net income available to A. Schulman, Inc. common stockholders" and "net income available to A. Schulman, Inc. common stockholders, as adjusted", refer to the reconciliation of GAAP and non-GAAP financial measures.


(2) - Adjusted interest expense excludes the accelerated amortization of deferred financing costs related to the €20.0 million pay down of the Euro Term Loan B as they are already included (1).


(3) - Adjusted depreciation excludes accelerated depreciation charges as they are already included in (1).

 

A. SCHULMAN, INC.

SUPPLEMENTAL SEGMENT INFORMATION

(Unaudited)





Net Sales


Pounds Sold



Three months ended November 30,

EMEA


2015


2014


$ Change


% Change


2015


2014


Lbs. Change


% Change



(In thousands, except for %'s)

Custom performance colors


$

32,840



$

36,679



$

(3,839)



(10.5)

%


13,165



12,584



581



4.6

%

Masterbatch solutions


105,280



112,728



(7,448)



(6.6)

%


102,687



96,221



6,466



6.7

%

Engineered plastics


100,780



109,725



(8,945)



(8.2)

%


75,047



71,724



3,323



4.6

%

Specialty powders


36,009



41,450



(5,441)



(13.1)

%


42,841



43,443



(602)



(1.4)

%

Distribution services


53,187



70,609



(17,422)



(24.7)

%


81,186



92,486



(11,300)



(12.2)

%

Total EMEA


$

328,096



$

371,191



$

(43,095)



(11.6)

%


314,926



316,458



(1,532)



(0.5)

%




















Net Sales


Pounds Sold



Three months ended November 30,

USCAN


2015


2014


$ Change


% Change


2015


2014


Lbs. Change


% Change



(In thousands, except for %'s)

Custom performance colors


$

9,616



$

10,222



$

(606)



(5.9)

%


3,443



3,421



22



0.6

%

Masterbatch solutions


32,514



43,335



(10,821)



(25.0)

%


47,973



58,160



(10,187)



(17.5)

%

Engineered plastics


100,178



47,774



52,404



109.7

%


97,951



30,082



67,869



225.6

%

Specialty powders


22,022



26,269



(4,247)



(16.2)

%


30,238



44,142



(13,904)



(31.5)

%

Distribution services


13,952



17,107



(3,155)



(18.4)

%


18,840



17,159



1,681



9.8

%

Total USCAN


$

178,282



$

144,707



$

33,575



23.2

%


198,445



152,964



45,481



29.7

%




















Net Sales


Pounds Sold



Three months ended November 30,

LATAM


2015


2014


$ Change


% Change


2015


2014


Lbs. Change


% Change



(In thousands, except for %'s)

Custom performance colors


$

1,428



$

1,166



$

262



22.5

%


523



448



75



16.7

%

Masterbatch solutions


24,112



21,956



2,156



9.8

%


18,441



14,983



3,458



23.1

%

Engineered plastics


11,190



12,193



(1,003)



(8.2)

%


9,460



8,687



773



8.9

%

Specialty powders


8,473



10,866



(2,393)



(22.0)

%


8,934



8,826



108



1.2

%

Distribution services








N/A









N/A


Total LATAM


$

45,203



$

46,181



$

(978)



(2.1)

%


37,358



32,944



4,414



13.4

%




















Net Sales


Pounds Sold



Three months ended November 30,

APAC


2015


2014


$ Change


% Change


2015


2014


Lbs. Change


% Change



(In thousands, except for %'s)

Custom performance colors


$

2,636



$

3,231



$

(595)



(18.4)

%


2,090



2,371



(281)



(11.9)

%

Masterbatch solutions


19,989



20,339



(350)



(1.7)

%


21,773



18,853



2,920



15.5

%

Engineered plastics


22,070



25,276



(3,206)



(12.7)

%


18,023



16,905



1,118



6.6

%

Specialty powders1


918



3,772



(2,854)



(75.7)

%


1,045



3,691



(2,646)



(71.7)

%

Distribution services


79



356



(277)



(77.8)

%


112



410



(298)



(72.7)

%

Total APAC


$

45,692



$

52,974



$

(7,282)



(13.7)

%


43,043



42,230



813



1.9

%



















1

APAC Specialty Powders for the three months ended November 30, 2014 include net sales of $2.3 million and pounds sold of 2.2 million related to roto-molding products that were subsequently contributed to the Company's unconsolidated venture in Thailand.



Net Sales


Pounds Sold



Three months ended November 30,

Consolidated


2015


2014


$ Change


% Change


2015


2014


Lbs. Change


% Change



(In thousands, except for %'s)

Custom performance colors


$

46,520



$

51,298



$

(4,778)



(9.3)

%


19,221



18,824



397



2.1

%

Engineered composites


51,946





51,946



N/A



44,096





44,096



N/A


Masterbatch solutions


181,895



198,358



(16,463)



(8.3)

%


190,874



188,217



2,657



1.4

%

Engineered plastics


234,218



194,968



39,250



20.1

%


200,481



127,398



73,083



57.4

%

Specialty powders


67,422



82,357



(14,935)



(18.1)

%


83,058



100,102



(17,044)



(17.0)

%

Distribution services


67,218



88,072



(20,854)



(23.7)

%


100,138



110,055



(9,917)



(9.0)

%

Total Consolidated


$

649,219



$

615,053



$

34,166



5.6

%


637,868



544,596



93,272



17.1

%

 

A. SCHULMAN, INC.

SUPPLEMENTAL SEGMENT INFORMATION

(Unaudited)




Three months ended November 30,



2015


2014



(In thousands, except for %'s)

Segment gross profit





EMEA


$

47,684



$

49,706


USCAN


30,294



24,629


LATAM


9,705



5,650


APAC


7,874



7,250


EC


13,208




     Total segment gross profit


108,765



87,235


Inventory step-up




(341)


Accelerated depreciation and restructuring related costs


(1,877)




Costs related to acquisitions and integrations


(129)



(50)


Lucent costs


(1,830)




     Total gross profit


$

104,929



$

86,844







Segment operating income





EMEA


$

20,153



$

20,039


USCAN


12,163



11,393


LATAM


5,604



595


APAC


4,307



3,508


EC


4,102




Total segment operating income


46,329



35,535


Corporate


(8,488)



(7,484)


Costs related to acquisitions and integrations


(1,866)



(1,053)


Restructuring and related costs


(4,670)



(5,579)


Accelerated depreciation


(1,453)




Inventory step-up




(341)


Lucent costs


(3,706)




Operating income


26,146



21,078


Interest expense


(13,618)



(2,359)


Foreign currency transaction gains (losses)


(729)



(1,099)


Other income (expense), net


(71)



254


Income from continuing operations before taxes


$

11,728



$

17,874







Capacity utilization





EMEA


88

%


92

%

USCAN


67

%


67

%

LATAM


78

%


72

%

APAC


65

%


65

%

EC


55

%


%

Worldwide


73

%


78

%

 

A. SCHULMAN, INC.

Sales by Geographical Region

(Unaudited)




Three months ended November 30, 2015



(In thousands, except for %'s)



Thermoplastics


Engineered Composites


Total

Geographical Region


Sales by Region


% of TP


Sales by Region


% of EC


Total Sales


Total %

United States / Canada


$

178,282



29.8

%


$

37,321



71.8

%


$

215,603



33.2

%

Europe


328,096



54.9

%


5,996



11.5

%


334,092



51.5

%

Mexico / South America


45,203



7.6

%


8,629



16.6

%


53,832



8.3

%

Asia Pacific


45,692



7.7

%




%


45,692



7.0

%

Total


$

597,273



100.0

%


$

51,946



100.0

%


$

649,219



100.0

%





























Three months ended November 30, 2014



(In thousands, except for %'s)



Thermoplastics


Engineered Composites


Total

Geographical Region


Sales by Region


% of TP


Sales by Region


% of EC


Total Sales


Total %

United States / Canada


$

144,707



23.5

%


$



%


$

144,707



23.5

%

Europe


371,191



60.4

%




%


371,191



60.4

%

Mexico / South America


46,181



7.5

%




%


46,181



7.5

%

Asia Pacific


52,974



8.6

%




%


52,974



8.6

%

Total


$

615,053



100.0

%


$



%


$

615,053



100.0

%



























 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/a-schulman-reports-fiscal-2016-first-quarter-results-300202102.html

SOURCE A. Schulman, Inc.


Source: PR Newswire (January 11, 2016 - 8:12 AM EST)

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