July 9, 2012

A. Schulman Reports Solid Fiscal 2012 Third-Quarter Results

AKRON, Ohio, July 9, 2012 /PRNewswire/ --

  • Net income was $17.0 million, or $0.57 per diluted share, for the quarter compared with net income of $18.8 million, or $0.60 per diluted share, in last year's third quarter; excluding certain items, net income for the quarter was $20.4 million, or $0.69 per diluted share, compared with $20.3 million, or $0.65 per diluted share, for the prior-year period
  • Net income year-to-date was $39.7 million, or $1.34 per diluted share, compared with $35.1 million, or $1.12 per diluted share, for the same period last year; excluding certain items, net income year-to-date was $46.9 million, or $1.59 per diluted share, compared with $43.0 million, or $1.37 per diluted share, for the same period last year
  • The Company's Americas and Asia Pacific regions outperformed last year's segment operating income by 61% and 72% respectively for the quarter
  • Full-year fiscal 2012 net income, on a non-GAAP basis, expected to be in the range of $2.03 to $2.07 per diluted share

A. Schulman, Inc. (Nasdaq-GS: SHLM) announced today earnings for the fiscal 2012 third quarter ended May 31, 2012.  The Company reported net income for the third quarter of $17.0 million, or $0.57 per diluted share, compared with net income of $18.8 million, or $0.60 per diluted share, for the comparable period last year.  The translation effect of foreign currencies negatively impacted net income for the quarter by $0.8 million.

The fiscal 2012 third-quarter net income per diluted share of $0.57 included certain after-tax charges of $3.4 million, or $0.12 per diluted share, primarily related to non-cash asset impairment charges and costs associated with restructuring initiatives.  Excluding these items, net income for the fiscal 2012 third quarter was $20.4 million, or $0.69 per diluted share, compared with $20.3 million, or $0.65 per diluted share, for the prior-year period. Last year's third quarter included certain after-tax charges of $1.5 million, or $0.05 per diluted share, primarily related to restructuring initiatives.    

Net sales for the fiscal 2012 third quarter were $569.1 million compared with $611.1 million for the same period last year. Net sales declined primarily due to a $23.5 million negative impact of foreign currency translation and a 7% decrease in volume.

"Overcoming the economic and political headwinds in today's environment is a challenging task, and I am extremely proud of the efforts of our entire team in putting up some very strong numbers," said Joseph M. Gingo, Chairman, President and Chief Executive Officer.  "As expected, our Americas and Asia Pacific segments are significantly outpacing prior-year results while our EMEA segment, including the successful integration of our Elian acquisition, is working aggressively to offset the extremely difficult market conditions.  We continue to focus on what's within our control and we remain committed to developing high-value-added products and implementing cost-control initiatives to improve performance."

The Company uses the following non-GAAP financial measures of net income excluding certain items, net income per diluted share excluding certain items and EBITDA excluding certain items.  These financial measures are used by management to monitor and evaluate the ongoing performance of the Company and to allocate resources.  The Company believes that the additional measures are useful to investors for financial analysis.  However, non-GAAP measures are not in accordance with, nor are they a substitute for, GAAP measures.  Please see the table in this release for reconciliation of non-GAAP measures to the nearest comparable GAAP results.  Results in the following discussion are presented on a non-GAAP basis excluding certain items.

Gross profit for the quarter was $76.7 million, compared with $78.9 million last year. Excluding the impact of foreign currency translation, gross profit increased by $0.8 million.  Gross profit per pound was 15.4 cents, compared with 14.7 cents for the same period last year.  This increase reflects the Company's continual product mix improvement, the benefits of prior restructuring initiatives, and ongoing efforts to control costs. 

The Company's selling, general and administrative expenses decreased $3.4 million for the third quarter compared with the same period in the prior year.  The decrease was partially attributable to the Company realizing synergies in connection with the continued integration of acquisitions and efforts to control costs.  Additionally, incentive and equity compensation, in total, decreased $0.8 million. Foreign currency translation favorably impacted selling, general and administrative expense by $1.6 million.

Year-To-Date Results

Foreign currency translation adversely impacted consolidated net sales by $52.1 million.  Excluding the foreign currency impact, consolidated net sales increased $19.5 million.  The Company was able to increase the average selling price per pound by 10%, excluding the impact of foreign currency, which offset a volume decrease of 8%.

For the fiscal 2012 year-to-date results, the Company reported net income of $39.7 million, or $1.34 per diluted share, compared with net income of $35.1 million, or $1.12 per diluted share, for the same period last year.  The translation effect of foreign currencies negatively impacted year-to-date reported net income by $1.6 million or $0.06 cents per diluted share.

Excluding the effect of certain items including restructuring-related charges, asset impairments and acquisition-related costs, year-to-date net income was $46.9 million, or $1.59 per diluted share, compared with $43.0 million, or $1.37 per diluted share, a year ago. 

Europe, Middle East and Africa ("EMEA") — In the fiscal 2012 third quarter, EMEA net sales were $383.9 million, a decrease of $52.1 million, or 12.0%, compared with the prior-year period. Foreign currency translation negatively impacted net sales by $20.4 million.  Excluding the impact of the foreign currency translation, EMEA net sales declined 7.3%. Excluding foreign currency translation, price per pound increased 1.4% to $1.31 per pound due to improved product mix.

EMEA gross profit was $49.6 million for the quarter, a decrease of $5.1 million compared with the same three-month period last year.  Foreign currency translation negatively impacted EMEA gross profit by $2.5 million or approximately 50% of the decline. Excluding the foreign currency impact, gross profit per pound increased 4.0% primarily in the engineered plastics and specialty powders product families offset by an overall decrease in volume of 8.6%.

EMEA segment operating income was $23.4 million, a decrease of $2.3 million compared with the same period last year.  Benefits of reducing selling, general and administrative expenses by $2.8 million were offset by the decrease in gross profit, and a $1.2 million negative impact from foreign currency translation.

The Americas In the fiscal 2012 third quarter, net sales for the Americas were $147.1 million, an increase of $9.1 million or 6.6% compared with the prior-year period. The increase in net sales was primarily attributable to improved product mix in the Company's specialty powders and masterbatch product families. The volume decline of 8.9 million pounds or approximately 5% from the prior-year third quarter was primarily attributed to softening in the Company's calcium carbonate masterbatch business in the U.S.  Foreign currency translation negatively impacted net sales by $3.8 million. Excluding the foreign currency impact, price per pound increased 15.6% to $0.97 per pound.

Gross profit for the Americas was $21.3 million in the fiscal 2012 third quarter, an increase of $1.9 million from the comparable period last year. The increases in gross profit and gross profit per pound of 9.9% and 16.1%, respectively, were primarily in the engineered plastics product family. The Company was able to increase margins by improving product mix and implementing operational efficiencies from restructuring initiatives in the Americas. Foreign currency translation negatively impacted gross profit by $0.6 million. Excluding the impact of foreign currency, gross profit per pound increased 19%.

Segment operating income for the Americas for the quarter was $7.9 million compared with $4.9 million last year. The 60.9% increase in operating income was primarily due to improved gross profit per pound and a decrease of $1.1 million in selling, general and administrative expenses. The decline in selling, general and administrative expenses resulted from restructuring initiatives and cost-control efforts, offset by incremental expenses from a fiscal 2011 acquisition. Foreign currency translation negatively impacted operating income by $0.3 million.

Asia Pacific ("APAC") In the fiscal 2012 third quarter, net sales for APAC were $38.2 million, an increase of $1.0 million compared with the same prior-year period due to increased volume and the favorable impact of foreign currency translation. The increase in volume of 2.1% was primarily related to the masterbatch and engineered plastics product families partially offset by a decline in the specialty powders product family.

Gross profit for APAC for the quarter was $5.8 million, an increase of 20.9% compared with last year. The increase in gross profit and gross profit per pound were primarily due to successful restructuring initiatives that have improved the region's cost structure and a focus on products with higher technical requirements.

APAC segment operating income was $2.9 million for the quarter compared with $1.7 million last year. The 71.6% increase in profitability was principally due to the increase in gross profit and a slight decrease in selling, general and administrative expenses.

Cash Flow From Operations/Working Capital/Share Repurchase

Working capital was 59 days at the end of the fiscal 2012 third quarter, compared with 65 days at the end of the fiscal 2011 third quarter.  The improvement in working capital was attributable to a decrease in accounts receivable and inventory levels in the face of declining volumes in fiscal 2012, as compared with the prior fiscal year, and continued emphasis on working capital management.

Net cash provided from operations was $34.5 million and net cash used in operations was $6.0 million for the nine months ended May 31, 2012 and 2011, respectively. The improvement of $40.5 million in cash provided by operations was primarily due to the improvement in operating results and working capital management for the nine months ended May 31, 2012, as compared with the prior year.

The Company's cash and cash equivalents decreased $86.3 million from August 31, 2011. This decrease was driven primarily by the acquisition of Elian SAS for $64.9 million in net cash consideration, the first-quarter repurchase of treasury shares totaling $21.5 million, expenditures for capital projects of $27.5 million, and dividend payments of $15.4 million. Combined, these four uses of cash and cash equivalents totaled $129.3 million, and were offset by increased net borrowings on revolving credit facilities of $27.1 million and net cash provided from operations.

Business Outlook

"Under difficult and challenging economic conditions, we have proven that we can deliver on our commitment and strategy with improved net income.  Our team is determined to hold its market leadership position in Europe; continue to grow profitably in the Americas and Asia Pacific; and promote innovation as evidenced by the investment in two new global technical centers," Gingo said.

"We are evaluating options to further maximize our strong balance sheet and leverage position. We are investing in our future through internal growth initiatives coupled with strategic acquisitions.  In addition, given our strong cash generation, we are confident that we will continue to support our dividend and share repurchase programs to maximize shareholder value."

Gingo continued, "Under the current economic environment, we anticipate that our fiscal 2012 full-year net income, on a non-GAAP basis, will be in the range of $2.03 to $2.07 per diluted share."

Conference Call on the Web

A live Internet broadcast of A. Schulman's conference call regarding fiscal 2012 third-quarter earnings can be accessed at 10:00 a.m. Eastern Time on Tuesday, July 10, 2012, on the Company's website, www.aschulman.com.  An archived replay of the call will also be available on the website.

About A. Schulman, Inc.

A. Schulman, Inc. is a leading international supplier of high-performance plastic compounds and resins headquartered in Akron, Ohio. The Company's customers span a wide range of markets such as packaging, consumer products, industrial and automotive, among others.  The Company employs about 3,100 people and has 35 manufacturing facilities globally.  A. Schulman reported net sales of $2.2 billion for the fiscal year ended August 31, 2011.  Additional information about A. Schulman can be found at www.aschulman.com.

Use of Non-GAAP Financial Measures

This release includes certain financial information determined by methods other than in accordance with accounting principles generally accepted in the United States ("GAAP").  These non-GAAP financial measures include: net income excluding certain items, net income per diluted share excluding certain items and EBITDA excluding certain items. However, non-GAAP measures are not in accordance with, nor are they a substitute for, GAAP measures, and tables included in this release reconcile each non-GAAP financial measure with the most directly comparable GAAP financial measure. The most directly comparable GAAP financial measures for these purposes are income before taxes, net income and net income per diluted share.  The Company's non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures, and should be read only in conjunction with the Company's consolidated financial statements prepared in accordance with GAAP.

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

Cautionary Note on Forward-Looking Statements

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

  • worldwide and regional economic, business and political conditions, including continuing economic uncertainties in some or all of the Company's major product markets or countries where the Company has operations;
  • the effectiveness of the Company's efforts to improve operating margins through sales growth, price increases, productivity gains, and improved purchasing techniques;
  • competitive factors, including intense price competition;
  • fluctuations in the value of currencies in major areas where the Company operates;
  • volatility of prices and availability of the supply of energy and raw materials that are critical to the manufacture of the Company's products, particularly plastic resins derived from oil and natural gas;
  • changes in customer demand and requirements;
  • effectiveness of the Company to achieve the level of cost savings, productivity improvements, growth and other benefits anticipated from acquisitions, joint ventures and restructuring initiatives;
  • escalation in the cost of providing employee health care;
  • uncertainties regarding the resolution of pending and future litigation and other claims;
  • the performance of the global automotive market; and
  • further adverse changes in economic or industry conditions, including global supply and demand conditions and prices for products.

The risks and uncertainties identified above are not the only risks the Company faces. Additional risk factors that could affect the Company's performance are set forth in the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2011. In addition, risks and uncertainties not presently known to the Company or that it believes to be immaterial also may adversely affect the Company. Should any known or unknown risks or uncertainties develop into actual events, or underlying assumptions prove inaccurate, these developments could have material adverse effects on the Company's business, financial condition and results of operations.

SHLM_ALL

 

A. SCHULMAN, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS


Three months ended May 31,


Nine months ended May 31,


2012


2011


2012


2011


Unaudited

(In thousands, except per share data)

Net sales

$

569,107



$

611,142



$

1,582,307



$

1,614,868


Cost of sales

492,518



532,254



1,371,673



1,400,367


Selling, general and administrative expenses

48,861



51,746



145,692



154,081


Restructuring expense

1,944



1,843



6,785



5,779


Asset impairment

2,586



125



2,586



1,925


Curtailment (gain) loss

(101)





(310)




Operating income

23,299



25,174



55,881



52,716


Interest expense

1,953



1,802



6,532



4,729


Interest income

(318)



(200)



(675)



(591)


Foreign currency transaction (gains) losses

53



60



569



1,398


Other (income) expense, net

(60)



(1,637)



(1,113)



(2,074)


Income before taxes

21,671



25,149



50,568



49,254


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

4,423



6,225



10,067



13,675


Net income

17,248



18,924



40,501



35,579


Noncontrolling interests

(252)



(170)



(850)



(441)


Net income attributable to A. Schulman, Inc.

$

16,996



$

18,754



$

39,651



$

35,138


Weighted-average number of shares outstanding:








Basic

29,440



30,853



29,411



31,092


Diluted

29,569



31,061



29,585



31,289


Earnings per share of common stock attributable
to A. Schulman, Inc.:








Basic

$

0.58



$

0.61



$

1.35



$

1.13


Diluted

$

0.57



$

0.60



$

1.34



$

1.12


Cash dividends per common share

$

0.190



$

0.155



$

0.530



$

0.465


 

 

A. SCHULMAN, INC.

CONSOLIDATED BALANCE SHEETS

 



May 31,
2012


August 31,
2011



Unaudited

(In thousands)


ASSETS


Current assets:





Cash and cash equivalents

$

69,453



$

155,753


Accounts receivable, less allowance for doubtful accounts of $8,560 at May 31, 2012 and $9,475 at August 31, 2011

321,038



347,036


Inventories, average cost or market, whichever is lower

267,645



264,747


Prepaid expenses and other current assets

28,262



34,376


Total current assets

686,398



801,912


Property, plant and equipment, at cost:





Land and improvements

28,745



30,826


Buildings and leasehold improvements

152,988



165,267


Machinery and equipment

366,813



382,828


Furniture and fixtures

38,126



41,860


Construction in progress

15,741



12,967


Gross property, plant and equipment

602,413



633,748


Accumulated depreciation and investment grants of $606 at May 31, 2012 and $815 at August 31, 2011

379,921



399,448


Net property, plant and equipment

222,492



234,300


Other assets:





Deferred charges and other noncurrent assets

36,388



35,947


Goodwill

126,712



91,753


Intangible assets

91,726



76,075


Total other assets

254,826



203,775


Total assets

$

1,163,716



$

1,239,987


LIABILITIES AND EQUITY


Current liabilities:





Accounts payable

$

248,704



$

254,405


U.S. and foreign income taxes payable

2,865



11,072


Accrued payroll, taxes and related benefits

38,797



44,560


Other accrued liabilities

39,460



50,608


Short-term debt

36,033



11,550


Total current liabilities

365,859



372,195


Long-term debt

167,752



184,598


Pension plans

75,065



84,673


Other long-term liabilities

25,731



24,161


Deferred income taxes

23,805



20,055


Total liabilities

658,212



685,682


Commitments and contingencies




Stockholders' equity:





Common stock, $1 par value, authorized - 75,000 shares, issued - 47,948 shares at May 31, 2012 and 47,816 shares at August 31, 2011

47,948



47,816


Additional paid-in capital

257,973



254,184


Accumulated other comprehensive income (loss)

(6,095)



50,007


Retained earnings

565,555



541,256


Treasury stock, at cost, 18,408 shares at May 31, 2012 and 17,207 shares at August 31, 2011

(365,887)



(344,759)


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

499,494



548,504


Noncontrolling interests

6,010



5,801


Total equity

505,504



554,305


Total liabilities and equity

$

1,163,716



$

1,239,987


 

A. SCHULMAN, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

 




Nine months ended May 31,


2012


2011


Unaudited

(In thousands)

Operating:




Net income

$

40,501



$

35,579


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




Depreciation and amortization

28,797



30,413


Deferred tax provision

(7,414)



(1,550)


Pension, postretirement benefits and other deferred compensation

4,327



5,701


Net (gains) losses on asset sales



(775)


Asset impairment

2,586



1,925


Curtailment (gains) losses

(310)




Changes in assets and liabilities, net of acquisitions:




Accounts receivable

(6,501)



(55,523)


Inventories

(31,161)



(70,246)


Accounts payable

16,726



55,893


Income taxes

(6,123)



6,189


Accrued payroll and other accrued liabilities

(11,305)



(7,869)


Other assets and long-term liabilities

4,380



(5,710)


Net cash provided from (used in) operating activities

34,503



(5,973)


Investing:




Expenditures for property, plant and equipment

(27,505)



(18,362)


Proceeds from the sale of assets

1,255



7,041


Business acquisitions, net of cash acquired

(64,918)



(15,071)


Net cash provided from (used in) investing activities

(91,168)



(26,392)


Financing:




Cash dividends paid

(15,352)



(14,559)


Increase (decrease) in notes payable

(5,623)



(3,475)


Borrowings on revolving credit facilities

166,830



213,000


Repayments on revolving credit facilities

(139,769)



(170,250)


Repayments on long-term debt

(3,382)



(21)


Payment of debt issuance costs



(2,220)


Cash distributions to noncontrolling interests

(580)



(700)


Common stock issued (redeemed), net

358



(382)


Issuances (purchases) of treasury stock, net

(21,128)



(14,393)


Net cash provided from (used in) financing activities

(18,646)



7,000


Effect of exchange rate changes on cash

(10,989)



8,599


Net increase (decrease) in cash and cash equivalents

(86,300)



(16,766)


Cash and cash equivalents at beginning of period

155,753



122,754


Cash and cash equivalents at end of period

$

69,453



$

105,988


 

 

A. SCHULMAN, INC.

Reconciliation of GAAP and Non-GAAP Financial Measures

Unaudited

 
















Three months ended May 31, 2012


As Reported


Asset Write-

downs


Costs Related

to Acquisitions


Restructuring

Related


Inventory

Step-up


Tax Benefits

(Charges)


Before Certain

Items



(In thousands, except per share data)

Net sales


$

569,107



$



$



$



$



$



$

569,107


Cost of sales


492,518









(80)





492,438


Selling, general and administrative expenses


48,861





(192)









48,669


Restructuring expense


1,944







(1,944)








Asset impairment


2,586



(2,586)












Curtailment (gain) loss


(101)







101








Operating income


23,299



2,586



192



1,843



80





28,000


Interest expense, net


1,635













1,635


Foreign currency transaction (gains) losses


53













53


Other (income) expense, net


(60)













(60)


Income before taxes


21,671



2,586



192



1,843



80





26,372


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


4,423



669



45



287



27



260



5,711


Net income


17,248



1,917



147



1,556



53



(260)



20,661


Noncontrolling interests


(252)













(252)


Net income attributable to A. Schulman, Inc.


$

16,996



$

1,917



$

147



$

1,556



$

53



$

(260)



$

20,409


Diluted EPS


$

0.57













$

0.69


Weighted-average number of shares outstanding—diluted


29,569













29,569


 

 

Three months ended May 31, 2011


As Reported


Asset Write-
downs


Costs Related
to Acquisitions


Restructuring
Related


Inventory
Step-up


Tax Benefits
(Charges)


Before Certain
Items



(In thousands, except per share data)

Net sales


$

611,142





$



$



$



$



$

611,142


Cost of sales


532,254













532,254


Selling, general and administrative expenses


51,746





319









52,065


Restructuring expense


1,843







(1,843)








Asset impairment


125



(125)












Operating income


25,174



125



(319)



1,843







26,823


Interest expense, net


1,602













1,602


Foreign currency transaction (gains) losses


60













60


Other (income) expense, net


(1,637)













(1,637)


Income before taxes


25,149



125



(319)



1,843







26,798


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


6,225





37



95







6,357


Net income


18,924



125



(356)



1,748







20,441


Noncontrolling interests


(170)













(170)


Net income attributable to A. Schulman, Inc.


$

18,754



$

125



$

(356)



$

1,748



$



$



$

20,271


Diluted EPS


$

0.60













$

0.65


Weighted-average number of shares outstanding—diluted


31,061













31,061































 

 

 

A. SCHULMAN, INC.

Reconciliation of GAAP and Non-GAAP Financial Measures

Unaudited

 
















Nine months ended May 31, 2012


As Reported


Asset Write-
downs


Costs Related
to Acquisitions


Restructuring
Related


Inventory
Step-up


Tax Benefits
(Charges)


Before Certain
Items



(In thousands, except per share data)

Net sales


$

1,582,307



$



$



$



$



$



$

1,582,307


Cost of sales


1,371,673









(677)





1,370,996


Selling, general and administrative expenses


145,692





(1,066)









144,626


Restructuring expense


6,785







(6,785)








Asset impairment


2,586



(2,586)












Curtailment (gain) loss


(310)







310








Operating income


55,881



2,586



1,066



6,475



677





66,685


Interest expense, net


5,857













5,857


Foreign currency transaction (gains) losses


569













569


Other (income) expense, net


(1,113)













(1,113)


Income before taxes


50,568



2,586



1,066



6,475



677





61,372


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


10,067



669



114



1,571



226



967



13,614


Net income


40,501



1,917



952



4,904



451



(967)



47,758


Noncontrolling interests


(850)













(850)


Net income attributable to A. Schulman, Inc.


$

39,651



$

1,917



$

952



$

4,904



$

451



$

(967)



$

46,908


Diluted EPS


$

1.34













$

1.59


Weighted-average number of shares outstanding—diluted


29,585













29,585


 

 

Nine months ended May 31, 2011


As Reported


Asset Write-
downs


Costs Related
to Acquisitions


Restructuring
Related


Inventory
Step-up


Tax Benefits
(Charges)


Before Certain
Items



(In thousands, except per share data)

Net sales


$

1,614,868





$



$



$



$



$

1,614,868


Cost of sales


1,400,367









(283)





1,400,084


Selling, general and administrative expenses


154,081





(876)









153,205


Restructuring expense


5,779







(5,779)








Asset impairment


1,925



(1,925)












Operating income


52,716



1,925



876



5,779



283





61,579


Interest expense, net


4,138













4,138


Foreign currency transaction (gains) losses


1,398













1,398


Other (income) expense, net


(2,074)













(2,074)


Income before taxes


49,254



1,925



876



5,779



283





58,117


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


13,675





37



824



99



65



14,700


Net income


35,579



1,925



839



4,955



184



(65)



43,417


Noncontrolling interests


(441)













(441)


Net income attributable to A. Schulman, Inc.


$

35,138



$

1,925



$

839



$

4,955



$

184



$

(65)



$

42,976


Diluted EPS


$

1.12













$

1.37


Weighted-average number of shares outstanding—diluted


31,289













31,289
































 

 

 

A. SCHULMAN, INC.

SUPPLEMENTAL SEGMENT INFORMATION










Three months ended May 31,


Nine months ended May 31,


2012


2011


2012


2011


 Unaudited


 (In thousands, except for %)

Pounds sold to unaffiliated customers








EMEA

309,200


338,233


882,292


969,073

Americas

155,705


164,586


439,415


468,716

APAC

33,264


32,595


91,460


98,845

     Total pounds sold to unaffiliated customers

498,169


535,414


1,413,167


1,536,634









Net sales to unaffiliated customers








EMEA

$       383,852


$        435,982


$    1,069,304


$   1,139,197

Americas

147,059


137,940


404,685


371,611

APAC

38,196


37,220


108,318


104,060

     Total net sales to unaffiliated customers

$       569,107


$        611,142


$    1,582,307


$   1,614,868









Segment gross profit








EMEA

$         49,612


$          54,742


$       133,926


$      150,314

Americas

21,273


19,363


60,796


51,749

APAC

5,784


4,783


16,589


12,721

     Total segment gross profit

76,669


78,888


211,311


214,784

Inventory step-up

(80)


-


(677)


(283)

     Total gross profit

$         76,589


$          78,888


$       210,634


$      214,501









Segment operating income








EMEA

$         23,413


$          25,726


$         57,953


$        66,850

Americas

7,869


4,892


19,323


12,091

APAC

2,913


1,698


7,976


3,890

Total segment operating income

34,195


32,316


85,252


82,831

Corporate and other

(6,195)


(5,493)


(18,567)


(21,252)

Costs related to acquisitions

(192)


319


(1,066)


(876)

Restructuring related

(1,944)


(1,843)


(6,785)


(5,779)

Asset write-downs

(2,586)


(125)


(2,586)


(1,925)

Curtailment gain (loss)

101


-


310


-

Inventory step-up

(80)


-


(677)


(283)

Total operating income

23,299


25,174


55,881


52,716

Interest expense, net

(1,635)


(1,602)


(5,857)


(4,138)

Foreign currency transaction gains (losses)

(53)


(60)


(569)


(1,398)

Other income (expense), net

60


1,637


1,113


2,074

Income before taxes

$         21,671


$          25,149


$         50,568


$        49,254









Capacity utilization








EMEA

87%


85%


81%


79%

Americas

70%


67%


67%


64%

APAC

90%


81%


84%


86%

Worldwide

80%


78%


75%


74%

 

A. SCHULMAN, INC. 

Reconciliation of GAAP and Non-GAAP Financial Measures

EBITDA Excluding Certain Items Reconciliation

Unaudited

(In thousands)












Three months ended May 31,


Nine months ended May 31,



2012


2011


2012


2011










Income before taxes

$        21,671


$        25,149


$        50,568


$        49,254










Adjustments (pretax):








Depreciation and amortization

9,988


10,710


28,797


30,413

Interest expense, net

1,635


1,602


5,857


4,138

Costs related to acquisitions

192


(319)


1,066


876

Restructuring related

1,944


1,843


6,785


5,779

Asset write-downs

2,586


125


2,586


1,925

Curtailment (gain) loss

(101)


-


(310)


-

Inventory step-up

80


-


677


283

EBITDA excluding certain items

$        37,995


$        39,110


$        96,026


$        92,668










 

SOURCE A. Schulman, Inc.

News Provided by Acquire Media


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