Seeking Alpha

AKRON, Ohio, July 1, 2014 /PRNewswire/ --

  • Net income from continuing operations for the third quarter of fiscal 2014 was $19.1 million, or $0.65 per diluted share; adjusted net income from continuing operations for the third quarter of fiscal 2014, excluding certain items, was $21.8 million, or $0.74 per diluted share, a 48% improvement over the prior-year quarter
  • The Company benefitted from both organic growth as well as acquisitions in the quarter
  • Company raises full-year fiscal 2014 adjusted net income guidance to a range of $2.31 to $2.36 per diluted share

A. Schulman, Inc. (SHLM) announced today earnings for the fiscal 2014 third quarter ended May 31, 2014.

Joseph M. Gingo, Chairman, President and Chief Executive Officer, said, "I am pleased with our excellent third-quarter financial results which reflect continued demand in our key end markets as well as contributions from our recent acquisitions. Unlike last year's unusual third quarter, I believe we have returned to our typical historic pattern where our third quarter is the strongest.  While our results are strong, we will continue to look for operational efficiencies, drive product mix improvement and seek acquisitions that expand our markets and provide profitable growth."

Bernard Rzepka, Chief Operating Officer, stated, "We are pleased with our global organic growth rate, particularly in Europe where improved mix and growing automotive sales have bolstered our quarter and nine-month results.  Globally, we continue to achieve double-digit growth in our custom performance color product family.   In Europe, Middle East and Africa (EMEA) we continue to see steady growth in other key markets such as packaging.  In the Americas, we saw a similar pattern with strength in our engineered plastics product family as a result of our acquisitions, and we had significant contributions from our specialty powders business.  In Asia Pacific (APAC), we continue to improve volume and sales by executing our growth activities aided by our recent Perrite acquisition.  Globally, our recent acquisitions contributed to a 10.2% quarter-over-quarter increase in net sales.  We expect this growth rate to continue now that we have closed on the acquisition of Ferro Corporation's specialty plastics business." 

Fiscal Third-Quarter Results

In the fiscal 2014 third quarter, net sales in the EMEA segment increased 14% compared with the same period last year.  During the quarter, the incremental contribution of the Perrite acquisition in EMEA was $22.2 million and 14.2 million pounds in net sales and volume, respectively.  Additionally, sales and volume benefited from greater demand as a result of continued strengthening in the automotive market and consistent strength in the packaging market.  Foreign currency translation positively impacted the segment's net sales by $21.6 million.  EMEA gross profit was $56.8 million for the quarter, an increase of $8.1 million compared with the same three-month period last year.  The increase in gross profit was primarily attributed to the incremental contribution of the Perrite acquisition, favorable product mix and overall higher volumes in all product families.  Foreign currency translation positively impacted EMEA gross profit by $2.9 million.

Net sales for the Americas increased by 18.9% compared with the prior-year period.  This increase was primarily driven by the incremental contributions of the Network Polymers and Prime Colorants acquisitions which totaled $20 million and 13.3 million pounds in net sales and volume, respectively. Foreign currency translation negatively impacted the segment's net sales by $5.1 million. Gross profit for the Americas was $28.3 million in the quarter, an increase of $8.3 million compared with the same period last year.  Gross profit benefitted from recent acquisitions, improved mix, and prior restructuring initiatives which were partially offset by the increased variable incentive compensation expense of $0.5 million and unfavorable foreign currency translation of $0.6 million.  

During the quarter, net sales for the Company's APAC segment increased approximately 52% compared with the same prior-year period. The contribution of the Perrite acquisition in APAC was $13.5 million and 10.1 million pounds in net sales and volume, respectively.  Excluding the Perrite acquisition, volume increased by 22% but was partially offset by decreased price per pound driven by continued competitive pricing pressures primarily in the masterbatch business.  Gross profit for APAC for the quarter increased 24% compared with the prior-year period.  This increase was primarily attributed to the positive contribution from the Perrite acquisition. Gross profit percentage declined as a result of competitive pricing pressures and the broadening of the Company's product portfolio within the APAC region. 

Year-to-Date Results

Net sales for the nine months ended May 31, 2014 were $1.8 billion, an increase of 14% compared with the same period last year.  Incremental net sales and volume from the Company's recent acquisitions contributed $142.6 million and 98.1 million pounds, respectively. Excluding the impact of recent acquisitions, net sales were positively impacted by a 3.2% increase in price per pound and a 1.8% increase in volume. Foreign currency translation favorably impacted net sales by $30.8 million.

The Company's SG&A expenses, excluding certain items, increased $20.6 million compared with the same period in the prior year. The increase was primarily attributable to incremental SG&A expense of $7.6 million from recent acquisitions, higher variable incentive compensation expense of $9.4 million and unfavorable foreign currency translation of $2.5 million.  SG&A expense, excluding certain items, was 9.6% of net sales for the nine-month period. Operating income increased $15.2 million for the nine months ended May 31, 2014, compared with the same prior-year period. Total operating income, before certain items, for the nine months ended May 31, 2014, was $72.1 million, an increase of $16.7 million compared with a year ago.

Working Capital/Cash Flow From Operations

Cash provided from operations was $35 million and $52.6 million for the nine months ended May 31, 2014 and 2013, respectively.  The Company's cash and cash equivalents decreased $23.3 million from August 31, 2013. This decrease was driven primarily by fiscal 2014 acquisitions and was partially offset by an increase in net borrowings and cash generated from operations.  Working capital was 60 days at the end of the fiscal 2014 third quarter, an increase of three days when compared with the same period last year.

Capital expenditures for the nine months were $24.1 million compared with $20.5 million last year.  The Company continued regular and ongoing investments in the Company's global manufacturing facilities and technical innovation centers.

During the three- and nine-month periods ended May 31, 2014, the Company declared and paid quarterly cash dividends of $0.20 and $0.60 per common share, respectively. The total amount of these dividends was $5.9 million and $17.7 million, respectively.

Business Outlook

"We are pleased with the strength of our third-quarter and year-to-date results despite modest global economic growth.  Our acquisitions, combined with the benefits of prior restructurings and our organic growth initiatives, are putting us on pace to deliver a record year for A. Schulman.  Accordingly, we are raising our expectations for fiscal 2014 adjusted net income to be in a range of $2.31 to $2.36 per diluted share, which would represent an approximate 25% increase over the prior-year results using the high end of this range.  This equates to a fourth-quarter adjusted net income expectation of between $0.61 and $0.66 per diluted share, which resumes a more historical trend of quarterly earnings given the normal holiday cycle in the U.S. and Europe in the July and August time period," Gingo said.  

Conference Call on the Web

A live Internet broadcast of A. Schulman's conference call regarding fiscal 2014 third-quarter earnings can be accessed at 10:00 a.m. Eastern Time on Wednesday, July 2, 2014 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 3,800 people and has 43 manufacturing facilities globally.  A. Schulman reported net sales of $2.1 billion for the fiscal year ended August 31, 2013. 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, operating income excluding certain items, net income excluding certain items and net income per diluted share excluding certain items, 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, 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; and
  • operating problems with our information systems as a result of system security failures such as viruses, computer "hackers" or other causes.

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, 2013. 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

www.aschulman.com 

 


A. SCHULMAN, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS



Three months ended May 31,


Nine months ended May 31,


2014



2013



2014



2013



Unaudited
(In thousands, except per share data)

Net sales

$

645,735



$

548,589



$

1,819,640



$

1,596,114


Cost of sales

553,771



474,545



1,574,269



1,387,206


Selling, general and administrative expenses

65,536



54,409



181,647



157,744


Restructuring expense

1,078



1,807



4,583



5,413


Asset impairment



1,121



104



1,619


Curtailment (gain) loss







333


Operating income

25,350



16,707



59,037



43,799


Interest expense

1,433



1,865



6,112



5,559


Interest income

(68)



(80)



(211)



(408)


Foreign currency transaction (gains) losses

(28)



139



2,120



676


Other (income) expense, net

4



(27)



(267)



(374)


Income from continuing operations before taxes

24,009



14,810



51,283



38,346


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

4,662



4,497



12,657



3,584


Income from continuing operations

19,347



10,313



38,626



34,762


Income (loss) from discontinued operations, net of tax

(23)



(4,821)



2,979



(5,102)


Net income

19,324



5,492



41,605



29,660


Noncontrolling interests

(233)



(275)



(584)



(881)


Net income attributable to A. Schulman, Inc.

$

19,091



$

5,217



$

41,021



$

28,779














Weighted-average number of shares outstanding:












Basic

29,081



29,316



29,052



29,275


Diluted

29,375



29,477



29,300



29,421














Basic earnings per share attributable to A. Schulman, Inc.












Income from continuing operations

$

0.66



$

0.34



$

1.31



$

1.16


Income (loss) from discontinued operations



(0.16)



0.10



(0.18)


Net income attributable to A. Schulman, Inc.

$

0.66



$

0.18



$

1.41



$

0.98














Diluted earnings per share attributable to A. Schulman, Inc.












Income from continuing operations

$

0.65



$

0.34



$

1.30



$

1.15


Income (loss) from discontinued operations



(0.16)



0.10



(0.17)


Net income attributable to A. Schulman, Inc.

$

0.65



$

0.18



$

1.40



$

0.98














Cash dividends per common share

$

0.200



$

0.195



$

0.600



$

0.585


 

 


A. SCHULMAN, INC.

CONSOLIDATED BALANCE SHEETS



May 31,
 2014


August 31,
 2013


Unaudited
(In thousands)

ASSETS

Current assets:






Cash and cash equivalents

$

110,804



$

134,054


Accounts receivable, less allowance for doubtful accounts of $11,128 at May 31, 2014 and $10,434 at August 31, 2013

384,988



310,749


Inventories, lower of average cost or market

307,960



261,658


Prepaid expenses and other current assets

46,992



41,224


Total current assets

850,744



747,685


Property, plant and equipment, at cost:






Land and improvements

26,708



27,954


Buildings and leasehold improvements

158,458



146,647


Machinery and equipment

391,716



356,144


Furniture and fixtures

42,030



39,065


Construction in progress

10,902



7,149


Gross property, plant and equipment

629,814



576,959


Accumulated depreciation

397,025



366,438


Net property, plant and equipment

232,789



210,521


Deferred charges and other noncurrent assets

55,132



48,723


Goodwill

184,547



139,526


Intangible assets, net

116,224



91,887


Total assets

$

1,439,436



$

1,238,342


LIABILITIES AND EQUITY

Current liabilities:






Accounts payable

$

310,098



$

265,477


U.S. and foreign income taxes payable

8,838



6,423


Accrued payroll, taxes and related benefits

50,527



43,072


Other accrued liabilities

44,618



48,689


Short-term debt

21,955



8,373


Total current liabilities

436,036



372,034


Long-term debt

292,742



207,435


Pension plans

103,639



98,599


Deferred income taxes

23,769



20,873


Other long-term liabilities

24,968



24,657


Total liabilities

881,154



723,598


Commitments and contingencies






Stockholders' equity:






Common stock, $1 par value, authorized - 75,000 shares, issued - 48,183 shares at May 31, 2014 and 48,094 shares at August 31, 2013

48,183



48,094


Additional paid-in capital

268,326



263,158


Accumulated other comprehensive income (loss)

16,192



682


Retained earnings

597,674



574,370


Treasury stock, at cost, 18,874 shares at May 31, 2014 and 18,940 shares at August 31, 2013

(379,922)



(378,927)


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

550,453



507,377


Noncontrolling interests

7,829



7,367


Total equity

558,282



514,744


Total liabilities and equity

$

1,439,436



$

1,238,342


 

 


A. SCHULMAN, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS



Nine months ended May 31,


2014



2013



Unaudited
(In thousands)

Operating from continuing and discontinued operations:






Net income

$

41,605



$

29,660


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






Depreciation

24,751



22,489


Amortization

10,308



8,665


Deferred tax provision

(3,182)



(8,879)


Pension, postretirement benefits and other deferred compensation

9,157



6,465


Asset impairment

104



5,619


Curtailment (gain) loss



333


Gain on sale of assets from discontinued operations

(3,344)




Changes in assets and liabilities, net of acquisitions:






Accounts receivable

(26,048)



(13,123)


Inventories

(15,330)



(18,841)


Accounts payable

2,847



27,092


Income taxes

204



(1,157)


Accrued payroll and other accrued liabilities

260



2,034


Other assets and long-term liabilities

(6,296)



(7,780)


Net cash provided from (used in) operating activities

35,036



52,577


Investing from continuing and discontinued operations:






Expenditures for property, plant and equipment

(24,126)



(20,518)


Proceeds from the sale of assets

5,255



11,745


Business acquisitions, net of cash

(115,624)



(36,360)


Net cash provided from (used in) investing activities

(134,495)



(45,133)


Financing from continuing and discontinued operations:






Cash dividends paid

(17,717)



(17,313)


Increase (decrease) in short-term debt

3,747



(28,086)


Borrowings on long-term debt

703,141



134,097


Repayments on long-term debt

(609,501)



(89,241)


Payment of debt issuance costs

(1,782)




Issuances of stock, common and treasury

403



1,469


Redemptions of common stock

(361)



(397)


Purchases of treasury stock

(1,116)



(1,021)


Net cash provided from (used in) financing activities

76,814



(492)


Effect of exchange rate changes on cash

(605)



(895)


Net increase (decrease) in cash and cash equivalents

(23,250)



6,057


Cash and cash equivalents at beginning of period

134,054



124,031


Cash and cash equivalents at end of period

$

110,804



$

130,088


 

 


A. SCHULMAN, INC.

Reconciliation of GAAP and Non-GAAP Financial Measures


Three months ended May 31, 2014


Cost of Sales


Gross margin


SG&A


Restructuring expense


Asset impairment


Operating income


Operating income per pound


Income tax expense (benefit)


Net income attributable to A. Schulman, Inc.


Diluted EPS



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

As reported


$

553,771



14.2

%


$

65,536



$

1,078



$



$

25,350



$

0.046



$

4,662



$

19,091



$

0.65


Certain items:































Asset write-downs (1)























Costs related to acquisitions (2)







(888)







888






16



872



0.03


Restructuring and related costs (3)


(149)






(933)



(1,078)





2,160






320



1,840



0.06


Inventory step-up (4)























Tax benefits (charges)























Loss (income) from discontinued operations


























23




Total certain items


$

(149)



0.1

%


$

(1,821)



$

(1,078)



$



$

3,048



$

0.006



$

336



$

2,735



$

0.09


As Adjusted


$

553,622



14.3

%


$

63,715



$



$



$

28,398



$

0.052



$

4,998



$

21,826



$

0.74

































Percentage of Revenue








9.9

%








4.4

%








3.4

%



































Three months ended May 31, 2013


Cost of Sales


Gross margin


SG&A


Restructuring expense


Asset impairment


Operating income


Operating income per pound


Income tax expense (benefit)


Net income attributable to A. Schulman, Inc.


Diluted EPS



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

As reported


$

474,545



13.5

%


$

54,409



$

1,807



$

1,121



$

16,707



$

0.034



$

4,497



$

5,217



$

0.18


Certain items:































Asset write-downs (1)


(265)










(1,121)



1,386








1,386



0.05


Costs related to acquisitions (2)







(849)







849






(41)



890



0.03


Restructuring and related costs (3)


(56)






(1,303)



(1,807)





3,166






694



2,472



0.08


Inventory step-up (4)























Tax benefits (charges)


















17



(17)




Loss (income) from discontinued operations


























4,821



0.16


Total certain items


$

(321)



0.1

%


$

(2,152)



$

(1,807)



$

(1,121)



$

5,401



$

0.011



$

670



$

9,552



$

0.32


As Adjusted


$

474,224



13.6

%


$

52,257



$



$



$

22,108



$

0.045



$

5,167



$

14,769



$

0.50

































Percentage of Revenue








9.5

%








4.0

%








2.7

%




 

 


A. SCHULMAN, INC. Reconciliation of GAAP and Non-GAAP Financial Measures (Continued)


Nine months ended May 31, 2014


Cost of Sales


Gross margin


SG&A



Restructuring expense



Asset impairment


Operating income


Operating income per pound


Income tax expense (benefit)


Net income attributable to A. Schulman, Inc.


Diluted EPS



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

As reported


$

1,574,269



13.5

%


$

181,647




$

4,583




$

104



$

59,037



$

0.038



$

12,657



$

41,021



$

1.40


Certain items:

































Asset write-downs (1)


(108)












(104)



212






34



178



0.01


Costs related to acquisitions (2)


(34)






(3,343)









3,377






141



3,244



0.11


Restructuring and related costs (3)


(649)






(3,090)




(4,583)







8,322






920



7,692



0.26


Inventory step-up (4)


(1,199)














1,199






98



1,101



0.04


Tax benefits (charges)




















427



(427)



(0.02)


Loss (income) from discontinued operations




























(2,979)



(0.10)


Total certain items


$

(1,990)



0.1

%


$

(6,433)




$

(4,583)




$

(104)



$

13,110



$

0.009



$

1,620



$

8,809



$

0.30


As Adjusted


$

1,572,279



13.6

%


$

175,214




$




$



$

72,147



$

0.047



$

14,277



$

49,830



$

1.70



































Percentage of Revenue








9.6

%










4.0

%








2.7

%





































Nine months ended May 31, 2013


Cost of Sales


Gross margin


SG&A



Restructuring expense



Asset impairment


Operating income


Operating income per pound


Income tax expense (benefit)


Net income attributable to A. Schulman, Inc.


Diluted EPS



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

As reported


$

1,387,206



13.1

%


$

157,744




$

5,413




$

1,619



$

43,799



$

0.031



$

3,584



$

28,779



$

0.98


Certain items:

































Asset write-downs (1)


(947)












(1,619)



2,566






149



2,417



0.08


Costs related to acquisitions (2)







(1,837)









1,837






38



1,799



0.06


Restructuring and related costs (3)


(56)






(1,303)




(5,413)






7,105






1,551



5,554



0.19


Inventory step-up (4)


(138)














138








138




Tax benefits (charges) (5)




















6,177



(6,177)



(0.21)


Loss (income) from discontinued operations




























5,102



0.18


Total certain items


$

(1,141)



0.1

%


$

(3,140)



$

(5,413)



$

(1,619)



$

11,646



$

0.008



$

7,915



$

8,833



$

0.30


As Adjusted


$

1,386,065



13.2

%


$

154,604




$




$



$

55,445



$

0.039



$

11,499



$

37,612



$

1.28



































Percentage of Revenue








9.7

%










3.5

%








2.4

%


















































1 - Asset write-downs primarily relate to asset impairments and accelerated depreciation.

2 - Costs related to acquisitions include third party professional, legal 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 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 - Inventory step-up costs include the adjustment for fair value of inventory acquired as a result of acquisition purchase accounting.

5 - Tax benefits (charges) include the effect of the adjustments to the Germany and Brazil valuation allowances in fiscal 2013.

 

 

 

 

A. SCHULMAN, INC.

SUPPLEMENTAL SEGMENT INFORMATION




Net Sales


Pounds Sold



Three months ended May 31,

EMEA


2014



2013



$ Change


% Change


2014



2013



Lbs. Change


% Change



(In thousands, except for %'s)

Masterbatch Solutions


$

122,450



$

112,077



$

10,373



9.3

%


94,228



91,307



2,921



3.2

%

Engineered Plastics


123,634



94,417



29,217



30.9

%


77,649



59,022



18,627



31.6

%

Distribution Services


80,666



76,671



3,995



5.2

%


96,600



95,211



1,389



1.5

%

Specialty Powders


47,533



44,091



3,442



7.8

%


47,193



45,712



1,481



3.2

%

Custom Performance Colors


39,505



35,591



3,914



11.0

%


13,114



12,410



704



5.7

%

Total EMEA


$

413,788



$

362,847



$

50,941



14.0

%


328,784



303,662



25,122



8.3

%




























Net Sales


Pounds Sold



Three months ended May 31,

Americas


2014



2013



$ Change


% Change


2014



2013



Lbs. Change


% Change



(In thousands, except for %'s)

Masterbatch Solutions


$

67,164



$

65,836



$

1,328



2.0

%


75,371



76,033



(662)



(0.9)%


Engineered Plastics


49,307



33,992



15,315



45.1

%


31,454



19,340



12,114



62.6

%

Distribution Services


12,408



12,048



360



3.0

%


13,195



13,666



(471)



(3.4)%


Specialty Powders


45,503



35,442



10,061



28.4

%


53,410



51,334



2,076



4.0

%

Custom Performance Colors


7,017



5,217



1,800



34.5

%


2,593



2,038



555



27.2

%

Total Americas


$

181,399



$

152,535



$

28,864



18.9

%


176,023



162,411



13,612



8.4

%




























Net Sales


Pounds Sold



Three months ended May 31,

APAC


2014



2013



$ Change


% Change


2014



2013



Lbs. Change


% Change



(In thousands, except for %'s)

Masterbatch Solutions


$

21,272



$

19,156



$

2,116



11.0

%


19,652



15,721



3,931



25.0

%

Engineered Plastics


23,803



10,161



13,642



134.3

%


15,788



5,457



10,331



189.3

%

Distribution Services


512



19



493



        n/a



618



13



605



   n/a


Specialty Powders


4,085



3,860



225



5.8

%


3,651



3,612



39



1.1

%

Custom Performance Colors


876



11



865



     n/a


738



2



736



    n/a

Total APAC


$

50,548



$

33,207



$

17,341



52.2

%


40,447



24,805



15,642



63.1

%




























Net Sales


Pounds Sold



Three months ended May 31,

Consolidated


2014



2013



$ Change


% Change


2014



2013



Lbs. Change


% Change



(In thousands, except for %'s)

Masterbatch Solutions


$

210,886



$

197,069



$

13,817



7.0

%


189,251



183,061



6,190



3.4

%

Engineered Plastics


196,744



138,570



58,174



42.0

%


124,891



83,819



41,072



49.0

%

Distribution Services


93,586



88,738



4,848



5.5

%


110,413



108,890



1,523



1.4

%

Specialty Powders


97,121



83,393



13,728



16.5

%


104,254



100,658



3,596



3.6

%

Custom Performance Colors


47,398



40,819



6,579



16.1

%


16,445



14,450



1,995



13.8

%

Total Consolidated


$

645,735



$

548,589



$

97,146



17.7

%


545,254



490,878



54,376



11.1

%

 

 




A. SCHULMAN, INC.


SUPPLEMENTAL SEGMENT INFORMATION (continued)






Net Sales


Pounds Sold




Nine months ended May 31,


EMEA


2014



2013



$ Change


% Change


2014



2013



Lbs.

Change


% Change




(In thousands, except for %'s)

Masterbatch Solutions


$

336,976



$

333,824



$

3,152



0.9

%


262,785



261,954



831


0.3

%


Engineered Plastics


360,983



267,777



93,206



34.8

%


222,411



165,748



56,663


34.2

%


Distribution Services


241,884



237,162



4,722



2.0

%


288,278



287,741



537


0.2

%


Specialty Powders


137,941



117,220



20,721



17.7

%


136,660



125,359



11,301


9.0

%


Custom Performance Colors


111,490



100,550



10,940



10.9

%


37,086



34,591



2,495


7.2

%


Total EMEA


$

1,189,274



$

1,056,533



$

132,741



12.6

%


947,220



875,393



71,827


8.2

%






























Net Sales


Pounds Sold




Nine months ended May 31,


Americas


2014



2013



$ Change


% Change


2014



2013



Lbs.

Change


% Change




(In thousands, except for %'s)


Masterbatch Solutions


$

193,590



$

194,579



$

(989)



(0.5)%



213,900



219,305



(5,405)



(2.5)%



Engineered Plastics


124,277



103,963



20,314



19.5

%


78,196



62,659



15,537



24.8

%


Distribution Services


34,701



33,793



908



2.7

%


37,667



39,962



(2,295)



(5.7)%



Specialty Powders


114,879



99,449



15,430



15.5

%


151,102



151,680



(578)



(0.4)%



Custom Performance Colors


17,578



14,530



3,048



21.0

%


6,626



5,454



1,172



21.5

%


Total Americas


$

485,025



$

446,314



$

38,711



8.7

%


487,491



479,060



8,431



1.8

%






























Net Sales


Pounds Sold




Nine months ended May 31,


APAC


2014



2013



$ Change


% Change


2014



2013



Lbs.

Change


% Change




(In thousands, except for %'s)


Masterbatch Solutions


$

61,681



$

57,136



$

4,545



8.0

%


55,126



45,931



9,195



20.0

%


Engineered Plastics


69,085



25,556



43,529



170.3

%


45,381



13,688



31,693



231.5

%


Distribution Services


1,315



38



1,277



n/a


1,622



26



1,596



n/a


Specialty Powders


11,111



10,288



823



8.0

%


10,074



10,053



21



0.2

%


Custom Performance Colors


2,149



249



1,900



n/a


1,700



81



1,619



n/a


Total APAC


$

145,341



$

93,267



$

52,074



55.8

%


113,903



69,779



44,124



63.2

%

































Net Sales


Pounds Sold




Nine months ended May 31,


Consolidated


2014



2013



$ Change


% Change


2014



2013



Lbs.

Change


% Change




(In thousands, except for %'s)


 Masterbatch Solutions


$

592,247



$

585,539



$

6,708



1.1

%


531,811



527,190



4,621



0.9

%


 Engineered Plastics


554,345



397,296



157,049



39.5

%


345,988



242,095



103,893



42.9

%


 Distribution Services


277,900



270,993



6,907



2.5

%


327,567



327,729



(162)



%


 Specialty Powders


263,931



226,957



36,974



16.3

%


297,836



287,092



10,744



3.7

%


 Custom Performance

 Colors


131,217



115,329



15,888



13.8

%


45,412



40,126



5,286



13.2

%


  Total Consolidated


$

1,819,640



$

1,596,114



$

223,526



14.0

%


1,548,614



1,424,232



124,382



8.7

%


 

 

A. SCHULMAN, INC.

SUPPLEMENTAL SEGMENT INFORMATION

(continued)




Three months ended May 31,


Nine months ended May 31,



2014



2013



2014



2013




Unaudited

(In thousands, except for %'s)

Segment gross profit













EMEA


$

56,798



$

48,684



$

156,237



$

133,715


Americas


28,263



19,994



70,922



60,155


APAC


7,052



5,687



20,202



16,179


     Total segment gross profit


92,113



74,365



247,361



210,049


Inventory step-up






(1,199)



(138)


Accelerated depreciation and restructuring related


(149)



(321)



(791)



(1,003)


     Total gross profit


$

91,964



$

74,044



$

245,371



$

208,908















Segment operating income













EMEA


$

23,565



$

20,222



$

61,537



$

47,888


Americas


11,257



5,340



24,889



18,977


APAC


3,328



2,738



9,870



8,231


Total segment operating income


38,150



28,300



96,296



75,096


Corporate


(9,752)



(6,192)



(24,149)



(19,651)


Costs related to acquisitions


(888)



(849)



(3,377)



(1,837)


Restructuring and related costs


(2,160)



(3,166)



(8,322)



(6,772)


Accelerated depreciation




(265)



(108)



(947)


Asset impairment




(1,121)



(104)



(1,619)


Curtailment gain (loss)








(333)


Inventory step-up






(1,199)



(138)


Operating income


25,350



16,707



59,037



43,799


Interest expense, net


(1,365)



(1,785)



(5,901)



(5,151)


Foreign currency transaction gains (losses)


28



(139)



(2,120)



(676)


Other income (expense), net


(4)



27



267



374


Income from continuing operations before taxes


$

24,009



$

14,810



$

51,283



$

38,346















Capacity utilization













EMEA


87

%


81

%


84

%


77

%

Americas


67

%


67

%


65

%


65

%

APAC


73

%


66

%


71

%


69

%

Worldwide


77

%


74

%


74

%


71

%

 

 

SOURCE A. Schulman, Inc.

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