A. Schulman Reports Fiscal 2017 Third-Quarter Results

June 28, 2017 at 4:05 PM EDT

AKRON, Ohio, June 28, 2017 /PRNewswire/ -- A. Schulman, Inc. (Nasdaq: SHLM) today announced earnings for the quarter ended May 31, 2017 of $0.47 per diluted share, compared with $0.53 per diluted share in the prior year period. On an adjusted basis, reported earnings per share were $0.63 in the third quarter of fiscal 2017, compared with $0.79 in the third quarter of fiscal 2016. The fiscal 2017 third quarter adjusted earnings per diluted share of $0.63 includes the negative effect of foreign currency of $0.04 over the prior year period.

Joseph M. Gingo, chairman, president and chief executive officer stated, "I am very pleased with our strong performance in Asia-Pacific, Latin America and Engineered Composites. Our consolidated results were largely influenced by two factors. In our U.S and Canada region, while operations improved, our sales and profitability are still hampered by the complexity of the business consolidation in Evansville, Indiana. In Europe, a significant mid-quarter drop in polyolefin raw material prices interrupted our sales cycle and adversely impacted profitability. We have seen our sales cycle normalize in May and continue into June."

Consolidated net sales for the fiscal 2017 third quarter were $645.8 million, compared with $650.4 million in the same prior-year quarter. Excluding the negative impact of foreign currency translation in the third quarter of fiscal 2017 of $16.3 million, net sales rose 1.8 percent from a year ago.

GAAP operating income in the third quarter of fiscal 2017 was $32.2 million, compared with $31.6 million in the prior year period. Adjusted operating income margin was 5.7 percent in the third quarter of fiscal 2017, compared with 7 percent in the third quarter of fiscal 2016. On a year-to-date basis, the adjusted operating margin was 5.5 percent compared with 5.9 percent in the prior year.

Net income in the fiscal 2017 third quarter was $13.9 million, compared with $15.5 million in the year-ago period. On an adjusted basis, net income for the third quarter of fiscal 2017 was $18.5 million, compared with $25.2 million in the prior year period. Fiscal 2017 third-quarter adjusted EBITDA was $56 million, compared with $66.9 million in the third quarter of fiscal 2016. 

Cash Flow/Debt Reduction
Cash provided from operations was $73.6 million in the nine months ended May 31, 2017. During the quarter, the Company reduced its net debt position by $20.3 million to a balance of $880.4 million as of May 31, 2017. Net leverage at the end of the third quarter of fiscal 2017 was 4.13x.

Business Update and Outlook
Gingo stated, "Currency translation, although improving, is a continuing headwind. If the dollar stays at the end-of-May level for the duration of the fourth quarter this would further impact the Company's earnings by as much as two cents in the quarter and would result in 12 cents for currency impact compared with the Company's guidance for the full fiscal year.  

"With the return to a more normal sales pattern in Europe and strong performances in Latin America, Asia-Pacific and Engineered Composites, we foresee stronger year-over-year performance in our fiscal 2017 fourth quarter as we anticipate operational improvement in the U.S. and Canada region. Therefore, excluding the potential 2017 currency translation as noted above, we are maintaining our initial fiscal 2017 guidance of $2.5 billion to $2.6 billion in sales, adjusted EBITDA of $225 million to $230 million, adjusted earnings per diluted share in the range of $2.08 to $2.18 on an operating basis. Likewise, we continue to expect to achieve a return on invested capital of 11 percent to 12.5 percent in fiscal 2017.

"The trends that are starting to take shape in the fourth quarter are encouraging and will create added momentum as we progress into fiscal 2018," he said.

Please refer to the reconciliation of GAAP and Non-GAAP financial measures for the types of items excluded from the Company's business outlook.

Conference Call on the Web
A live Internet broadcast of A. Schulman's conference call regarding fiscal 2017 third-quarter earnings can be accessed at 10:00 a.m. Eastern Time on June 29, 2017, on the Company's website, www.aschulman.com. An archived replay of the call will also be available on the website.

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

About A. Schulman, Inc.
A. Schulman, Inc. is a leading international supplier of high-performance plastic compounds and resins headquartered in Akron, Ohio. Since 1928, the Company has been providing innovative solutions to meet its customers' demanding requirements. The Company's customers span a wide range of markets such as packaging, mobility, building & construction, electronics & electrical, agriculture, personal care & hygiene, sports, leisure & home, custom services and others. The Company employs approximately 4,900 people and has 53 manufacturing facilities globally. A. Schulman reported net sales of approximately $2.5 billion for the fiscal year ended August 31, 2016. Additional information about A. Schulman can be found at www.aschulman.com.

Use of Non-GAAP Financial Measures
This release includes certain financial information determined by methods other than in accordance with accounting principles generally accepted in the United States ("GAAP"). These non-GAAP financial measures include segment gross profit, SG&A expenses excluding certain items, segment operating income, operating income before certain items, net income excluding certain items, net income per diluted share excluding certain items and adjusted EBITDA, as discussed further in the Reconciliation of GAAP and Non-GAAP Financial Measures below. These non-GAAP financial measures are considered relevant to aid analysis and understanding of the Company's results and business trends. 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, may not be reported by all of the Company's competitors and may not be directly comparable to similarly titled measures of the Company's competitors due to potential differences in the exact method of calculation. The Company compensates for these limitations by using these non-GAAP financial measures as supplements to GAAP financial measures and by reviewing the reconciliations of the non-GAAP financial measures to their most comparable GAAP financial measures.

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

  • worldwide and regional economic, business and political conditions, including continuing economic uncertainties in some or all of the Company's major product markets or countries where the Company has operations;
  • the effectiveness of the Company's efforts to improve operating margins through sales growth, price increases, productivity gains, and improved purchasing techniques;
  • competitive factors, including intense price competition;
  • fluctuations in the value of currencies in areas where the Company operates;
  • volatility of prices and availability of the supply of energy and raw materials that are critical to the manufacture of the Company's products, particularly plastic resins derived from oil and natural gas;
  • changes in customer demand and requirements;
  • effectiveness of the Company to achieve the level of cost savings, productivity improvements, growth and other benefits anticipated from acquisitions and the integration thereof, joint ventures and restructuring initiatives;
  • escalation in the cost of providing employee health care;
  • uncertainties regarding the resolution of pending and future litigation and other claims;
  • the performance of the global automotive market as well as other markets served;
  • further adverse changes in economic or industry conditions, including global supply and demand conditions and prices for products;
  • operating problems with our information systems as a result of system security failures such as viruses, cyber-attacks or other causes;
  • our current debt position could adversely affect our financial health and prevent us from fulfilling our financial obligations; and
  • failure of counterparties to perform under the terms and conditions of contractual arrangements, including suppliers, customers, buyers and sellers of a business and other third parties with which the Company contracts.

The risks and uncertainties identified above are not the only risks the Company faces. Additional risk factors that could affect the Company's performance are set forth in the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2016. In addition, risks and uncertainties not presently known to the Company or that it believes to be immaterial also may adversely affect the Company. Should any known or unknown risks or uncertainties develop into actual events, or underlying assumptions prove inaccurate, these developments could have material adverse effects on the Company's business, financial condition and results of operations.

SHLM_ALL

 

 

A. SCHULMAN, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)



Three months ended May 31,


Nine months ended May 31,


2017


2016


2017


2016


(In thousands, except per share data)

Net sales

$

645,795



$

650,439



$

1,814,473



$

1,891,419


Cost of sales

547,368



540,965



1,525,845



1,587,192


Selling, general and administrative expenses

65,266



73,641



203,608



222,482


Restructuring expense

939



4,245



12,361



8,005


Operating income (loss)

32,222



31,588



72,659



73,740


Interest expense

13,179



13,557



39,450



40,965


Foreign currency transaction (gains) losses

(68)



392



1,575



2,071


Other (income) expense, net

(682)



(311)



(1,138)



(529)


Income (loss) before taxes

19,793



17,950



32,772



31,233


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

3,695



312



8,157



4,076


Net income (loss)

16,098



17,638



24,615



27,157


Noncontrolling interests

(320)



(241)



(868)



(1,075)


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

15,778



17,397



23,747



26,082


Convertible special stock dividends

1,875



1,875



5,625



5,625


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

$

13,903



$

15,522



$

18,122



$

20,457










Weighted-average number of shares outstanding:








Basic

29,421



29,339



29,392



29,284


Diluted

29,530



29,474



29,496



29,459










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








Basic

$

0.47



$

0.53



$

0.62



$

0.70


Diluted

$

0.47



$

0.53



$

0.61



$

0.69










Cash dividends per common share

$

0.205



$

0.205



$

0.615



$

0.615


Cash dividends per share of convertible
special stock

$

15.00



$

15.00



$

45.00



$

45.00


 

 

A. SCHULMAN, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)



May 31,
 2017


August 31,
 2016


(In thousands)

ASSETS

Current assets:




Cash and cash equivalents

$

50,130



$

35,260


Restricted cash

1,068



8,143


Accounts receivable, less allowance for doubtful accounts of $10,415 at May 31, 2017 and
$11,341 at August 31, 2016

411,004



376,786


Inventories

297,104



263,617


Prepaid expenses and other current assets

38,783



40,263


Assets held for sale

6,586




Total current assets

804,675



724,069


Property, plant and equipment, at cost:




Land and improvements

31,218



32,957


Buildings and leasehold improvements

177,468



184,291


Machinery and equipment

450,250



447,932


Furniture and fixtures

34,361



34,457


Construction in progress

28,674



20,431


Gross property, plant and equipment

721,971



720,068


Accumulated depreciation

425,486



405,246


Net property, plant and equipment

296,485



314,822


Deferred charges and other noncurrent assets

87,141



88,161


Goodwill

260,768



257,773


Intangible assets, net

338,304



362,614


Total assets

$

1,787,373



$

1,747,439


LIABILITIES AND EQUITY

Current liabilities:




Accounts payable

$

339,566



$

280,060


U.S. and foreign income taxes payable

3,783



8,985


Accrued payroll, taxes and related benefits

44,458



47,569


Other accrued liabilities

69,661



67,704


Short-term debt

21,453



25,447


Total current liabilities

478,921



429,765


Long-term debt

910,132



919,349


Pension plans

147,017



145,108


Deferred income taxes

49,873



59,013


Other long-term liabilities

24,270



25,844


Total liabilities

1,610,213



1,579,079


Commitments and contingencies




Stockholders' equity:




Convertible special stock, no par value

120,289



120,289


Common stock, $1 par value, authorized - 75,000 shares, issued - 48,529 shares at May 31,
2017 and 48,510 shares at August 31, 2016

48,529



48,510


Additional paid-in capital

277,867



275,115


Accumulated other comprehensive income (loss)

(115,501)



(120,721)


Retained earnings

219,032



219,039


Treasury stock, at cost, 19,064 shares at May 31, 2017 and 19,069 shares at August 31, 2016

(382,871)



(382,963)


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

167,345



159,269


Noncontrolling interests

9,815



9,091


Total equity

177,160



168,360


Total liabilities and equity

$

1,787,373



$

1,747,439



 

 

A. SCHULMAN, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



Nine months ended May 31,


2017


2016


(In thousands)

Operating activities:




Net income

$

24,615



$

27,157


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




Depreciation

32,455



37,347


Amortization

26,381



30,163


Deferred tax provision (benefit)

(9,539)



(2,395)


Pension, postretirement benefits and other compensation

5,302



3,161


Changes in assets and liabilities, net of acquisitions:




Accounts receivable

(32,841)



2,574


Inventories

(32,694)



19,900


Accounts payable

64,795



(8,145)


Income taxes

(5,122)



(9,955)


Accrued payroll and other accrued liabilities

(1,131)



2,583


Other assets and long-term liabilities

1,345



(6,718)


Net cash provided from (used in) operating activities

73,566



95,672


Investing activities




Expenditures for property, plant and equipment

(30,719)



(34,618)


Proceeds from the sale of assets

2,750



1,184


Other investing activities

125




Net cash provided from (used in) investing activities

(27,844)



(33,434)


Financing activities:




Cash dividends paid to special stockholders

(5,625)



(5,625)


Cash dividends paid to common stockholders

(18,129)



(18,012)


Increase (decrease) in short-term debt

(2,283)



2,780


Borrowings on revolving credit facility

283,943



124,671


Repayments of revolving credit facility

(228,973)



(112,470)


Repayments of other long-term debt and capital leases

(66,735)



(97,978)


Noncontrolling interests' distributions

(53)




Issuances of stock, common and treasury

143



213


Redemptions of common stock

(711)



(1,077)


Purchases of treasury stock




Net cash provided from (used in) financing activities

(38,423)



(107,498)


Effect of exchange rate changes on cash

496



(2,186)


Net increase (decrease) in cash, cash equivalents, and restricted cash

7,795



(47,446)


Cash, cash equivalents, and restricted cash at beginning of period

43,403



96,872


Cash, cash equivalents, and restricted cash at end of period

$

51,198



$

49,426






Cash and cash equivalents

$

50,130



$

47,019


Restricted cash

1,068



2,407


Total cash, cash equivalents, and restricted cash

$

51,198



$

49,426



 

 

A. SCHULMAN, INC.

Reconciliation of GAAP and Non-GAAP Financial Measures

Unaudited


Three months ended May 31, 2017


Cost of
Sales


Gross
Margin


SG&A


Restructuring
Expense


Operating
Income


Non
Operating
(Income)
Expense


Income
Tax
Expense
(Benefit)


Net Income
Available to
ASI Common
Stockholders


Diluted
EPS



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

As reported


$

547,368



15.2

%


$

65,266



$

939



$

32,222



$

12,429



$

3,695



$

13,903



$

0.47


Certain items:



















Accelerated depreciation (1)


(236)





(1)





237





49



188



0.01


Restructuring and related costs (3)






(1,993)



(939)



2,932





604



2,328



0.07


Lucent costs (4)


(104)





(1,626)





1,730





356



1,374



0.05


Tax (benefits) charges (7)














(890)



890



0.03


Gain on asset sale (10)












169



(35)



(134)




Total certain items


(340)



0.1

%


(3,620)



(939)



4,899



169



84



4,646



0.16


As Adjusted


$

547,028



15.3

%


$

61,646



$



$

37,121



$

12,598



$

3,779



$

18,549



$

0.63





















Percentage of Revenue






9.5

%




5.7

%






2.9

%






















Effective Tax Rate














15.4

%
























Three months ended May 31, 2016


Cost of
Sales


Gross
Margin


SG&A


Restructuring
Expense


Operating
Income


Non
Operating
(Income)
Expense


Income
Tax
Expense
(Benefit)


Net Income
Available to
ASI Common
Stockholders


Diluted
EPS



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

As reported


$

540,965



16.8

%


$

73,641



$

4,245



$

31,588



$

13,638



$

312



$

15,522



$

0.53


Convertible special stock dividends (9)
















1,875



0.03


Certain items:



















Accelerated depreciation (1)


(1,283)





(3)





1,286





243



1,043



0.03


Costs related to acquisitions and integrations (2)


(423)





(1,020)





1,443





235



1,208



0.04


Restructuring and related costs (3)


(1,647)





(3,628)



(4,245)



9,520



(127)



2,099



7,548



0.23


Lucent costs (4)


(466)





(1,485)





1,951





385



1,566



0.05


Accelerated amortization of debt issuance costs (6)












(163)



34



129




Tax (benefits) charges (7)














3,664



(3,664)



(0.12)


Total certain items


(3,819)



0.6

%


(6,136)



(4,245)



14,200



(290)



6,660



9,705



0.26


As Adjusted


$

537,146



17.4

%


$

67,505



$



$

45,788



$

13,348



$

6,972



$

25,227



$

0.79





















Percentage of Revenue






10.4

%




7.0

%






3.9

%






















Effective Tax Rate














21.5

%





 

 

Nine months ended May 31, 2017


Cost of Sales


Gross
Margin


SG&A


Restructuring
Expense


Operating
Income


Non
Operating
(Income)
Expense


Income
Tax
Expense
(Benefit)


Net Income
Available to
ASI Common
Stockholders


Diluted
EPS



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

As reported


$

1,525,845



15.9

%


$

203,608



$

12,361



$

72,659



$

39,887



$

8,157



$

18,122



$

0.61


Certain items:



















Asset impairment (8)






(678)





678



(1,623)



474



1,827



0.06


Accelerated depreciation (1)


(1,059)





(1)





1,060





218



842



0.03


Costs related to acquisitions and integrations (2)


(57)





(548)





605





125



480



0.02


Restructuring and related costs (3)


(1,042)





(7,773)



(12,361)



21,176





4,362



16,814



0.56


Lucent costs (4)


(190)





(2,945)





3,135





646



2,489



0.08


CEO transition costs (5)






(196)





196





40



156



0.01


Accelerated amortization of debt issuance costs (6)












(227)



47



180



0.01


Tax (benefits) charges (7)














(1,428)



1,428



0.05


Gain on asset sale (10)












169



(35)



(134)




Total certain items


(2,348)



0.1

%


(12,141)



(12,361)



26,850



(1,681)



4,449



24,082



0.82


As Adjusted


$

1,523,497



16.0

%


$

191,467



$



$

99,509



$

38,206



$

12,606



$

42,204



$

1.43





















Percentage of Revenue






10.6

%




5.5

%






2.3

%






















Effective Tax Rate














20.6

%
























Nine months ended May 31, 2016


Cost of Sales


Gross
Margin


SG&A


Restructuring
Expense


Operating
Income


Non
Operating
(Income)
Expense


Income
Tax
Expense
(Benefit)


Net Income
Available to
ASI Common
Stockholders


Diluted
EPS



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

As reported


$

1,587,192



16.1

%


$

222,482



$

8,005



$

73,740



$

42,507



$

4,076



$

20,457



$

0.69


Certain items:



















Accelerated depreciation (1)


(4,779)





(17)





4,796





1,127



3,669



0.12


Costs related to acquisitions and integrations (2)


(2,522)





(5,048)





7,570





1,779



5,791



0.19


Restructuring and related costs (3)


(2,532)





(9,422)



(8,005)



19,959



(488)



4,872



15,575



0.54


Lucent costs (4)


(1,844)





(4,424)





6,268





1,473



4,795



0.17


Accelerated amortization of debt issuance costs (6)












(437)



103



334



0.01


Tax (benefits) charges (7)














3,197



(3,197)



(0.11)


Total certain items


(11,677)



0.6

%


(18,911)



(8,005)



38,593



(925)



12,551



26,967



0.92


As Adjusted


$

1,575,515



16.7

%


$

203,571



$



$

112,333



$

41,582



$

16,627



$

47,424



$

1.61





















Percentage of Revenue






10.8

%




5.9

%







2.5

%






















Effective Tax Rate














23.5

%





 

1 - Accelerated depreciation is related to restructuring plans in the Company's USCAN and EMEA segments.

2 - Costs related to acquisitions and integrations primarily include third party professional, legal, IT and other expenses associated with successful and unsuccessful full or partial acquisition and divestiture/dissolution transactions, as well as certain employee-related expenses such as travel, one-time bonuses and post-acquisition severance separate from a formal restructuring plan.

3 - Restructuring and related costs include items such as employee severance charges, lease termination charges, curtailment gains/losses, other employee termination costs and charges related to the reorganization of the legal entity structure. Refer to Note 12 in the Company's Quarterly Report on Form 10-Q for further discussion.

4 - Lucent costs primarily represent legal and investigation costs related to resolving the Lucent matter, product manufacturing costs for reworking existing Lucent inventory, obsolete Lucent inventory reserve costs, and dedicated internal personnel costs that would have otherwise been focused on normal operations.

5 - CEO transition costs represent charges for deferred compensation granted to Bernard Rzepka.

6 - Write off of debt issuance costs are related to prepayments of $56.0 million of Term Loan B. Refer to Note 3 in the Company's Quarterly Report on Form 10-Q for further discussion.

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

8 - Asset impairment relates to the discontinuation of information technology assets in the USCAN segment and future cash settlement of a commitment to a local government.

9 - Convertible special stock dividends have been added back as the 2.4 million shares of convertible special stock were considered dilutive to the third quarter of fiscal 2016.

10 - Gain related to sale of assets that had previously been classified as held for sale.

 

 

A. SCHULMAN, INC.

ADJUSTED EBITDA RECONCILIATION

(Unaudited)



Three months ended May 31,


Nine months ended May 31,


2017


2016


2017


2016


(In thousands)









Net income available to A. Schulman, Inc.
common stockholders

$

13,903



$

15,522



$

18,122



$

20,457


     Interest expense

13,179



13,557



39,450



40,965


     Provision for U.S. and foreign income taxes

3,695



312



8,157



4,076


     Depreciation and amortization

18,977



22,409



58,836



67,510


     Noncontrolling interests

320



241



868



1,075


     Convertible special stock dividends

1,875



1,875



5,625



5,625


     Other (1)

(750)



163



437



1,825


EBITDA, as calculated

$

51,199



$

54,079



$

131,495



$

141,533


     Non-GAAP Adjustments (2)

4,765



12,832



25,790



33,501


EBITDA, as adjusted

$

55,964



$

66,911



$

157,285



$

175,034










 

(1) - Other includes Foreign currency transaction (gains) losses and Other (income) expense, net.

(2) - For details on Non-GAAP adjustments, refer to "Reconciliation of GAAP and Non-GAAP Financial Measures", items (2) - (8).  Amounts are included in Operating Income. Accelerated depreciation on the "Reconciliation of GAAP and Non-GAAP Financial Measures" has been excluded as it is already included in Depreciation and amortization above. The three months ended May 31, 2017 exclude additional depreciation expense which is in restructuring and related costs as it has already been included in Depreciation and amortization above. The nine months ended May 31, 2016 also include additional amortization expense which is in SG&A in the "Reconciliation of GAAP and Non-GAAP Financial Measures". This expense has been added back to adjusted EBITDA.

 

 

A. SCHULMAN, INC.

SUPPLEMENTAL SEGMENT INFORMATION

(Unaudited)




Net Sales


Net Sales



Three months ended May 31,


Nine months ended May 31,

EMEA


2017


2016


$ Change


% Change


2017


2016


$ Change


% Change



(In thousands, except for %'s)

Custom Concentrates
and Services


$

174,394



$

177,863



$

(3,469)



(2.0)

%


$

481,512



$

506,773



$

(25,261)



(5.0)

%

Performance Materials


143,632



144,505



(873)



(0.6)

%


409,488



434,021



(24,533)



(5.7)

%

Total EMEA


$

318,026



$

322,368



$

(4,342)



(1.3)

%


$

891,000



$

940,794



$

(49,794)



(5.3)

%




















Net Sales


Net Sales



Three months ended May 31,


Nine months ended May 31,

USCAN


2017


2016


$ Change


% Change


2017


2016


$ Change


% Change



(In thousands, except for %'s)

Custom Concentrates
and Services


$

65,613



$

66,841



$

(1,228)



(1.8)

%


$

188,496



$

194,153



$

(5,657)



(2.9)

%

Performance Materials


102,268



116,497



(14,229)



(12.2)

%


287,721



338,284



(50,563)



(14.9)

%

Total USCAN


$

167,881



$

183,338



$

(15,457)



(8.4)

%


$

476,217



$

532,437



$

(56,220)



(10.6)

%




















Net Sales


Net Sales



Three months ended May 31,


Nine months ended May 31,

LATAM


2017


2016


$ Change


% Change


2017


2016


$ Change


% Change



(In thousands, except for %'s)

Custom Concentrates
and Services


$

32,396



$

32,156



$

240



0.7

%


$

89,739



$

94,568



$

(4,829)



(5.1)

%

Performance Materials


15,012



11,221



3,791



33.8

%


39,547



32,170



7,377



22.9

%

Total LATAM


$

47,408



$

43,377



$

4,031



9.3

%


$

129,286



$

126,738



$

2,548



2.0

%




















Net Sales


Net Sales



Three months ended May 31,


Nine months ended May 31,

APAC


2017


2016


$ Change


% Change


2017


2016


$ Change


% Change



(In thousands, except for %'s)

Custom Concentrates
and Services


$

24,514



$

23,531



$

983



4.2

%


$

72,677



$

69,191



$

3,486



5.0

%

Performance Materials


28,714



23,349



5,365



23.0

%


80,202



68,444



11,758



17.2

%

Total APAC


$

53,228



$

46,880



$

6,348



13.5

%


$

152,879



$

137,635



$

15,244



11.1

%




















Net Sales


Net Sales



Three months ended May 31,


Nine months ended May 31,

Consolidated


2017


2016


$ Change


% Change


2017


2016


$ Change


% Change



(In thousands, except for %'s)

Engineered Composites


$

59,252



$

54,476



$

4,776



8.8

%


$

165,091



$

153,815



$

11,276



7.3

%

Custom Concentrates
and Services


296,917



300,391



(3,474)



(1.2)

%


832,424



864,685



(32,261)



(3.7)

%

Performance Materials


289,626



295,572



(5,946)



(2.0)

%


816,958



872,919



(55,961)



(6.4)

%

Total Consolidated


$

645,795



$

650,439



$

(4,644)



(0.7)

%


$

1,814,473



$

1,891,419



$

(76,946)



(4.1)

%


















 

 




Segment Gross Profit


Segment Gross Profit



Three months ended May 31,


Nine months ended May 31,



2017


2016


$ Change


% Change


2017


2016


$ Change


% Change



(In thousands, except for %'s)









EMEA


$

42,509



$

49,852



$

(7,343)



(14.7)

%


$

126,297



$

136,489



$

(10,192)



(7.5)

%

USCAN


21,844



32,560



(10,716)



(32.9)

%


66,420



90,095



(23,675)



(26.3)

%

LATAM


9,928



9,055



873



9.6

%


28,940



27,226



1,714



6.3

%

APAC


9,155



8,080



1,075



13.3

%


27,189



24,153



3,036



12.6

%

EC


15,331



13,746



1,585



11.5

%


42,130



37,941



4,189



11.0

%

Total segment gross profit


$

98,767



$

113,293



$

(14,526)



(12.8)

%


$

290,976



$

315,904



$

(24,928)



(7.9)

%

Accelerated depreciation and
restructuring related costs


(236)



(2,930)



2,694



(91.9)

%


(2,101)



(7,311)



5,210



(71.3)

%

Costs related to acquisitions
and integrations




(423)



423



%


(57)



(2,522)



2,465



(97.7)

%

Lucent costs (1)


(104)



(466)



362



%


(190)



(1,844)



1,654



(89.7)

%

Total gross profit


$

98,427



$

109,474



$

(11,047)



(10.1)%



$

288,628



$

304,227



$

(15,599)



(5.1)

%


















 

(1)Refer to Note 13, Commitments and Contingencies, for additional discussion on this matter. Lucent costs in cost of sales include additional product and manufacturing operational costs for reworking inventory.  Lucent costs in selling, general and administrative expenses include legal and investigative costs. In addition, in the three and nine months ended May 31, 2016, Lucent costs in SG&A also include dedicated internal personnel costs that would have otherwise been focused on normal operations.

(2)Retructuring related costs for the three and nine months ended May 31, 2017 of $2.0 million and $8.8 million, respectively, and for the three and nine months ended May 31, 2016 of $5.3 million and $12.0 million, respectively, primarily included in selling, general and administrative expenses in the Company's statements of operations, are costs associated with professional fees for outside strategic consultants regarding actions to improve the profitability of the organization and efficiency of its operations, and costs associated with reorganizations of the legal entity structure of the Company.  Restructuring expenses included in restructuring expense in the Company's statement of operations include costs permitted under ASC 420, Exit or Disposal Obligations, such as severance costs, outplacement services and contract termination costs.

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/a-schulman-reports-fiscal-2017-third-quarter-results-300481451.html

SOURCE A. Schulman, Inc.

News Provided by Acquire Media