ALPHARETTA, GA, August 2,
2017 -- Schweitzer-Mauduit International, Inc. ("SWM" or the
"Company") (NYSE: SWM) reported earnings results for the three
month period ended June 30, 2017.
Adjusted measures
are reconciled to GAAP at the end of this release. All
financial measures are from continuing operations and per share
data is on a diluted basis. All financial and operational
comparisons are versus the comparable prior year period. Key
definitions: Advanced Materials & Structures segment (AMS),
Engineered Papers segment (EP), Low Ignition Propensity (LIP),
Reconstituted Tobacco Leaf (RTL), and Heat-not-Burn (HnB)
Second Quarter
2017 Financial Summary
-
Total net sales increased 17% to
$255.3 million; Advanced Materials & Structures' organic net
sales (excluding Conwed acquisition) increased 10%, offsetting the
expected decline in Engineered Papers
-
GAAP operating profit was $39.5
million, or 15.5% of net sales, up from $37.5 million, or
17.3% of net sales; adjusted operating profit was $47.0
million, or 18.4% of net sales, up from $41.5 million, or
19.1% of net sales
-
GAAP EPS was $0.72, down 15%; Adjusted EPS was
$0.88, down 5%
Second Quarter
2017 Business Highlights
-
Advanced Materials & Structures segment
organic net sales increased 10%, driven by accelerated momentum of
specialty films growth into the transportation end-market; net
sales increased 64% including the Conwed acquisition
-
AMS segment GAAP and adjusted operating profit
margins expanded 170 and 310 basis points, respectively, reflecting
strong organic sales growth, improvements in base business
profitability, and acquisition synergies
-
Engineered Papers segment net sales decreased
5%, due mainly to anticipated volume declines in cigarette papers,
including LIP, while reconstituted tobacco volume was stable; total
segment volume declined 2%
-
EP segment GAAP and adjusted operating profit
margins each decreased 230 basis points due primarily to the impact
of lower LIP-related sales and manufacturing inefficiencies from
lower segment volume
Dr. Jeff Kramer, Chief Executive
Officer, commented, "Second quarter financial results demonstrate
solid overall performance of our business with several notable
highlights. AMS delivered strong organic sales growth, with
accelerating double-digit growth in high-margin specialty films
underpinning segment results. These surface protection
products for the transportation end-market are exhibiting
significant momentum, particularly in Asia, and we are exploring
options to leverage SWM's international footprint to capitalize on
this increasing regional demand. This growth, coupled with
continued execution of our Conwed synergy plans, contributed to
another quarter of robust segment margin expansion. The
phased site consolidation project of a legacy AMS site is underway,
and we remain confident in our ability to deliver $10 million of
expected run-rate synergies by the end of next year."
"Engineered Papers performed
generally as expected. Although the anticipated volume
challenges for traditional RTL remain a factor, continued momentum
of wrapper and binder reconstituted tobacco products and the
ramp-up of Heat-not-Burn sales provided a stabilizing offset.
Insights from our customers, combined with increasing product
awareness and test marketing of this innovative tobacco technology,
support our optimism and growth-oriented investments in HnB.
While our suite of recon products delivered essentially flat
volume, declines in cigarette papers, including LIP, drove an
overall EP segment volume decline. Expected lower pricing,
LIP royalties, and reduced efficiencies contributed to margin
pressure, however, we resolved certain production issues that
significantly impacted EP's first quarter profits."
Dr. Kramer concluded, "With a
solid first half of 2017 behind us, we remain keenly focused on
continued execution of our Conwed synergy plans, supporting the
momentum in our fastest growing product lines, and overall cost
management to achieve our 2017 guidance for Adjusted EPS of
$3.15. Looking longer-term, with AMS achieving critical mass
and non-tobacco products now representing roughly half of the
company's total sales, I believe SWM is approaching an inflection
point. While the past several years have been spent
rebalancing the portfolio by building AMS as we navigated the
headwinds in our tobacco business, we believe that we are now
poised to become a growth-oriented enterprise in the years
ahead. The strong cash flows, international footprint, and
operational excellence expertise from our mature paper operations
are a powerful complement to our expanding AMS segment and we
intend to continue investing in attractive technologies, products,
and end-markets to drive sustainable long-term growth."
Second Quarter
2017 Financial Results
Advanced Materials & Structures segment net
sales were $117.8 million, up 64%, including the Conwed
acquisition. Organic net sales increased 10%, driven by
surface protection films for the transportation end-market.
Conwed's overall results remained generally in line with the
Company's expectations, with strong sales growth of erosion and
sediment control products into the infrastructure and construction
end-markets driving results. GAAP operating profit was $16.6
million, up 87%; adjusted operating profit was $23.3 million, up
94%. GAAP and adjusted operating profit margins expanded 170
and 310 basis points, respectively. The overall segment sales
increase, favorable mix of surface protection products, and
early-stage acquisition synergies drove margin expansion.
Engineered Papers segment net
sales were $137.5 million, down 5%, driven by a 2% overall volume
decline. A net negative price/mix impact, lower LIP licensing
royalties, and unfavorable currency movements combined for the
remaining 3%. The overall volume decline reflected lower
cigarette papers volume, including LIP, partially offset by
non-tobacco paper volume growth. Total reconstituted tobacco
volume was stable. GAAP operating profit was $30.8 million,
down 14%; adjusted operating profit was $31.6 million, also down
14%. GAAP and adjusted operating profit margin each declined
230 basis points. Operating profit margin was negatively
affected by the decrease in high-margin LIP-related sales (volume,
price, and royalties), the negative mix impact of higher volume of
low-margin non-tobacco papers, and manufacturing inefficiencies
from lower overall volume compared to the prior year period.
Unallocated GAAP and adjusted expenses were each
$7.9 million, up 8%, due mostly to costs associated with the 1H:17
CEO transition. Unallocated expenses were 3.1% of total
sales, down 30 basis points.
Consolidated net sales were $255.3 million, up 17%,
but flat on an organic basis. The Conwed acquisition
contributed $38.9 million of incremental net sales. GAAP
operating profit was $39.5 million, up 5%, and GAAP operating
profit margin was 15.5%, down 180 basis points. Adjusted
operating profit was $47.0 million, up 13%, and adjusted operating
profit margin was 18.4%, down 70 basis points. Adjusted
EBITDA was $55.4 million, up 8%, and adjusted EBITDA margin was
21.7%, down 200 basis points.
GAAP income was $22.3 million,
down 14%; this equated to GAAP EPS of $0.72. Adjusted income
was $27.5 million, down 4%; this equated to Adjusted EPS of
$0.88. Interest expense was $6.8 million, up $2.7 million due
to the Conwed acquisition and related debt structure changes.
Other income/expense was $1.8 million unfavorable versus the prior
year period. The Company's effective tax rate was 31.0%, up
from 26.5%, due to a higher concentration of U.S. profits, tax rate
increases in certain jurisdictions, and certain discrete
items. The Chinese JVs contributed $0.01 to GAAP EPS and
Adjusted EPS, down $0.01. Net currency movements had a 1% negative
impact on sales and an immaterial impact on operating profits;
translation impact of net currency movements was negative $0.01 to
both GAAP EPS and Adjusted EPS.
Non-GAAP Adjustments reflect items included in GAAP
operating profit, income, and EPS, but excluded from adjusted
operating profit, income, and EPS. The most significant item
was purchase accounting expenses, which were $0.12 per share, up
$0.05. These expenses capture the ongoing non-cash
intangible asset amortization, as well as any non-cash one-time
inventory step-up charges, associated with AMS acquisitions.
Restructuring and impairment expenses were $0.04 per share, up
$0.03, primarily due to synergy-related headcount reductions in AMS
and an asset impairment in EP.
2017 Year-to-Date
Financial Results
Advanced Materials & Structures segment net
sales were $217.8 million, up 52%, including the Conwed
acquisition, with year-to-date trends consistent with those of the
second quarter. Organic net sales increased 7%, led by
specialty films for the transportation end-market. Conwed's
overall results for the first six months of 2017 were generally in
line with the Company's expectations, driven by sales growth of
erosion and sediment control products into the infrastructure and
construction end-markets. GAAP operating profit was $25.5
million, up 81%; adjusted operating profit was $40.5 million, up
94%. GAAP and adjusted operating profit margins expanded 180
and 400 basis points, respectively. Total segment sales
growth, favorable mix, and Conwed-related synergies contributed to
the margin improvements.
Engineered Papers segment net
sales were $270.8 million, down 6%. Several fundamental
trends exhibited in the first quarter continued through the second
quarter. Sales were impacted by a 3% overall volume
decline. A net negative price/mix impact, lower LIP licensing
royalties, and unfavorable currency movements combined for the
remaining 3%. Lower RTL and cigarette paper volumes,
including LIP, were partially offset by growth of non-tobacco paper
volumes. GAAP operating profit was $57.7 million, down 19%;
adjusted operating profit was $59.0 million, also down 19%.
GAAP and adjusted operating profit margin declined 340 and 350
basis points, respectively. The decrease in high-margin
LIP-related sales (volume, price, and royalties) and the negative
mix impact of higher non-tobacco paper volume impacted
margins. In addition, first quarter 2017 manufacturing
inefficiencies related to production line restarts impacted
year-to-date profitability.
Unallocated GAAP expenses were $17.1 million, up
4%; unallocated adjusted expenses were $16.9 million, up 5%, due to
the CEO transition. Adjusted unallocated expenses were 3.5%
of total sales, down 20 basis points.
Consolidated net sales were $488.6 million, up 13%,
but decreased 2% on an organic basis. The Conwed acquisition
contributed $65.5 million of incremental net sales. GAAP
operating profit was $66.1 million, down 4%, and GAAP operating
profit margin was 13.5%, down 250 basis points. Adjusted
operating profit was $82.6 million, up 6%, and adjusted operating
profit margin was 16.9%, down 120 basis points. Adjusted
EBITDA was $99.3 million, up 2%, and adjusted EBITDA margin was
20.3%, down 230 basis points.
GAAP income was $36.0 million,
down 24%; this equated to GAAP EPS of $1.17. Adjusted income
was $47.3 million, down 11%; this equated to Adjusted EPS of
$1.54. Interest expense was $12.6 million, up $3.9 million
due to the Conwed acquisition and related debt structure
changes. Other income/expense was $4.2 million unfavorable
versus the prior year period due in part to the $1.8 million gain
in 1Q:16 related to the sale of water rights, with no comparable
gain recognized this year. The Company's effective tax rate
was 32.3%, up from 27.0%, due to a higher concentration of U.S.
profits, tax rate increases in certain jurisdictions, and certain
discrete items. The Chinese JVs contributed $0.01 to GAAP EPS
and Adjusted EPS, down $0.01. Net currency movements had an
immaterial impact on sales and operating profits; translation
impact of net currency movements was negative $0.02 to both GAAP
EPS and Adjusted EPS.
Non-GAAP Adjustments reflect items included in GAAP
operating profit, income, and EPS, but excluded from adjusted
operating profit, income, and EPS. The most significant item
was purchase accounting expenses, which were $0.30 per share, up
$0.17. These expenses primarily capture the ongoing non-cash
intangible asset amortization, as well as any non-cash one-time
inventory step-up charges, associated with AMS acquisitions.
Restructuring and impairment expenses were $0.07 per share, up
$0.01.
Cash Flow, Debt, & Dividend
Year-to-date cash provided by
operating activities was $44.8 million, down $7.5 million.
The Company's working capital-related cash outflows were $28.0
million, up $9.7 million, as a result of AMS segment organic sales
growth, inventory builds related to the planned relocation of
certain AMS production assets, and timing related to tax
payments. Capital spending and capitalized software totaled
$20.9 million, up $10.3 million, due primarily to investments for
specialty filtration paper production and the addition of
Conwed. Free cash flow was $23.9 million, down $17.8 million
due to working capital timing and higher capital spending.
The Company expects free cash flow in the second half of 2017 to
significantly exceed the first half. Year-to-date, the
Company has paid dividends to shareholders totaling $25.8
million
Net debt was $623.3 million on
June 30, 2017, versus $333.0 million at December 31, 2016 due
mainly to the January 2017 closing of the Conwed acquisition.
Pursuant to the debt covenants and certain adjustments to foreign
cash balances contained in the Company's credit facility, the
Company's net debt to adjusted EBITDA was approximately 3.2x as of
June 30, 2017.
The Company announced that a
quarterly cash dividend of $0.42 per share will be payable on
September 22, 2017 to stockholders of record as of
August 25, 2017.
2017 Financial Outlook
In February 2017, the Company
issued annual guidance of $3.15 for 2017E Adjusted EPS. This
equated to $2.52 of GAAP EPS based on initial estimates of $0.09
per share of restructuring expenses and $0.54 per share of non-cash
purchase accounting expenses related to AMS segment acquisitions
that are excluded from Adjusted EPS.
The Company now expects 2017
capital expenditures and capitalized software spending to exceed
$40 million. The Company previously expected approximately
$35 million. The expected increase is primarily due to an
acceleration of certain investments related to growth opportunities
and cost reduction projects across both segments, including
synergies related to the Conwed acquisition.
Conference Call
SWM will hold a conference call to
review second quarter 2017 results with investors and analysts at
8:30 a.m. Eastern time on Thursday, August 3, 2017. The earnings
conference call will be simultaneously broadcast over the Internet
at www.swmintl.com. To listen to the call, please go to the
Company's Web site at least 15 minutes prior to the call to
register and to download and install any necessary audio software.
For those unable to listen to the live broadcast, a replay will be
available on the Company's Web site shortly after the call.
SWM will use a presentation in
conjunction with its conference call. The presentation can be
found on the Company's Web site in advance of the earnings
conference call. The presentation can also be accessed via
the earnings conference call webcast.
About SWM
SWM is a leading global provider
of highly engineered papers, films, nets, and non-wovens for a
variety of applications and industries. As experts in
manufacturing materials made from fibers, resins, and polymers, we
provide our customers critical components that enhance the
performance of their end products. The Advanced Materials
& Structures segment focuses on resin-based rolled goods for
the filtration, transportation, infrastructure & construction,
medical, and industrial end-markets. This segment was
established in 2013 as part of a strategic transformation intended
to diversify SWM's historical concentration in the tobacco industry
and reposition the Company for long-term growth. The Company
currently generates approximately half of its total sales outside
the tobacco industry. The Engineered Papers segment remains
primarily focused on supplying major cigarette manufacturers with a
variety of specialty papers. SWM and its subsidiaries conduct
business in over 90 countries and employ approximately 3,400 people
worldwide. For further information, please visit SWM's Web
site at www.swmintl.com.
Forward-Looking
Statements
This press release contains
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 and other federal
securities laws that are subject to the safe harbor created by such
laws and other legal protections. Forward-looking
statements include, without limitation, those regarding 2017
guidance and future performance, future market and EPS trends,
future EPS contributions of our China JVs and RTL, AMS margins,
sales and volume trends, Argotec financial results, growth
prospects, capital spending, currency rates and trends and impact
on EPS, 2017 momentum, future cash flows, effective tax rates, 2017
LIP sales trends, future RTL volumes, LIP pricing and royalties,
diversification efforts of our AMS segment, accretion from the
Conwed acquisition, future results of DelStar, interest rate swap
impacts, future growth of non-tobacco sales, benefits of AMS' new
enterprise resource planning system, and other statements generally
identified by words such as "believe," "expect," "intend," "plan,"
"potential," "anticipate," "project," "appear," "should," "could,"
"may," "typically," "will," and similar words. These
statements are not guarantees of future performance and involve
certain risks and uncertainties that may cause actual results to
differ materially from our expectations as of the date of this
release. These risks include, among other things, those set
forth in Part I, Item 1A. Risk Factors of our Annual Report on Form
10-K for the year ended December 31, 2016, as well as the following
factors:
-
Changes in sales or production
volumes, pricing and/or manufacturing costs of reconstituted
tobacco products, cigarette paper (including for lower ignition
propensity cigarettes), filtration-related products due to changing
customer demands (including any change by our customers in their
tobacco and tobacco-related blends for their cigarettes, their
target inventory levels and/or the overall demand for their
products), new technologies such as e-cigarettes, inventory
adjustments and rebalancings, competition or otherwise;
-
Changes in the Chinese economy,
including relating to the demand for reconstituted tobacco, premium
cigarettes and netting;
-
Risks associated with the
implementation of our strategic growth initiatives, including
diversification, and the Company's understanding of, and entry
into, new industries and technologies;
-
Changes in the source and
intensity of competition in our commercial segments, including in
Asia regarding our AMS business;
-
Our ability to attract and retain
key personnel, due to our prior restructuring actions, the tobacco
industry in which we operate or otherwise;
-
Weather conditions, including
potential impacts, if any, from climate change, known and unknown,
seasonality factors that affect the demand for virgin tobacco leaf
and natural disasters or unusual weather events;
-
Increases in commodity prices and
lack of availability of such commodities, including energy, wood
pulp and resins, could impact the sales and profitability of our
products;
-
Adverse changes in the oil, gas,
and mining sectors impacting key AMS segment customers;
-
Increases in operating costs due
to inflation or otherwise, such as labor expense, compensation and
benefits costs, including costs related to the comprehensive health
care reform law enacted in the US in 2010;
-
Employee retention and labor
shortages;
-
Changes in employment, wage and
hour laws and regulations in the U.S., France and elsewhere,
including loi de Securisation de l'emploi, unionization rule and
regulations by the National Labor Relations Board, equal pay
initiatives, additional anti-discrimination rules or tests and
different interpretations of exemptions from overtime laws;
-
Labor strikes, stoppages,
disruptions or other disruptions at our facilities;
-
Existing and future governmental
regulation and the enforcement thereof, for example relating to the
tobacco industry, taxation and the environment (including the
impact thereof on our Chinese joint ventures);
-
New reports as to the effect of
smoking on human health or the environment;
-
Changes in general economic,
financial and credit conditions in the U.S., Europe, China and
elsewhere, including the impact thereof on currency exchange rates
(including any weakening of the euro and Real) and on interest
rates;
-
Changes in the manner in which we
finance our debt and future capital needs, including potential
acquisitions;
-
The success of, and costs
associated with, our current or future restructuring initiatives,
including the granting of any needed governmental approvals and the
occurrence of work stoppages or other labor disruptions;
-
Changes in the discount rates,
revenue growth, cash flow growth rates or other assumptions used by
the Company in its assessment for impairment of assets and adverse
economic conditions or other factors that would result in
significant impairment charges;
-
The failure of one or more
material suppliers, including energy, resin and pulp suppliers, to
supply materials as needed to maintain our product plans and cost
structure;
-
International conflicts and
disputes such as those involving the Russian Federation and the
Middle East, which restrict our ability to supply product in the
affected regions due to the corresponding effects on demand, the
application of international sanctions, or practical consequences
on transportation, banking transactions, or other commercial
activities in troubled regions;
-
The pace and extent of further
international adoption of LIP cigarette standards and the nature of
standards so adopted;
-
Risks associated with our
50%-owned, non-U.S. joint ventures relating to control and
decision-making, compliance, accounting standards, transparency and
customer relations, among others;
-
A failure in our risk management
and/or currency or interest rate swaps and hedging programs,
including the failures of any insurance company or
counterparty;
-
The number, type, outcomes (by
judgment or settlement) and costs of legal, tax, regulatory or
administrative proceedings, litigation and/or amnesty programs,
including those in Brazil;
-
The outcome and cost of
LIP-related intellectual property infringement and validity
litigation in Europe and the European Patent Office opposition
proceedings;
-
Risks associated with acquisitions
or other strategic transactions, including acquired liabilities and
restrictions, retaining customers from businesses acquired,
achieving any expected results or synergies from acquired
businesses, complying with new regulatory frameworks, difficulties
in integrating acquired businesses or implementing strategic
transactions generally and risks associated with international
acquisition transactions, including in countries where we do not
currently have a material presence;
-
Risks associated with
dispositions, including post-closing claims being made against us,
disruption to our other businesses during a sale process or
thereafter, credit risks associated with any buyer of such disposed
assets and our ability to collect funds due from any such
buyer;
-
Risks associated with our global
asset realignment initiatives, including: changes in tax law,
treaties, interpretations, or regulatory determinations; audits
made by applicable regulatory authorities and/or our auditor; and
our ability to operate our business in a manner consistent with the
regulatory requirements for such realignment;
-
Increased taxation on
tobacco-related products;
-
Costs and timing of implementation
of any upgrades or changes to our information technology
systems;
-
Failure by us to comply with any
privacy or data security laws or to protect against theft of
customer, employee and corporate sensitive information;
-
Changes in tax rates, the adoption
of new U.S. or international tax legislation or exposure to
additional tax liabilities;
-
Changes in construction and
infrastructure spending and its impact on demand for certain
products;
-
Potential loss of consumer
awareness and demand for acquired companies' products if it is
decided to rebrand those products under the Company's legacy brand
names; and
-
Other factors described
elsewhere in this document and from time to time in documents that
we file with the SEC.
All forward-looking statements
made in this document are qualified by these cautionary
statements. These forward-looking statements are made only as
of the date of this document, and we do not undertake any
obligation, other than as may be required by law, to update or
revise any forward-looking or cautionary statements to reflect
changes in assumptions, the occurrence of events, unanticipated or
otherwise, or changes in future operating results over time or
otherwise.
Comparisons of results for current
and any prior periods are not intended to express any future trends
or indications of future performance unless expressed as such, and
should only be viewed as historical data.
For additional factors and further
discussion of these factors, please see SWM's Annual Report on Form
10-K for the period ended December 31, 2016 and other reports we
file from time to time. The financial results reported in
this release are unaudited.
Non-GAAP
Financial Measures
Certain financial measures and
comments contained in this press release exclude restructuring
expenses, certain purchase accounting adjustments related to AMS
segment acquisitions, interest expense, income tax provision,
capital spending, capitalized software, and depreciation and
amortization. This press release also provides certain
information regarding the Company's financial results excluding
currency impacts. This information estimates the impact of
changes in foreign currency rates on the translation of the
Company's current financial results as compared to the applicable
comparable period and is derived by translating the current local
currency results into U.S. Dollars based upon the foreign currency
exchange rates for the applicable comparable period.
Financial measures which exclude or include these items have not
been determined in accordance with accounting principles generally
accepted in the United States (GAAP) and are therefore "non-GAAP"
financial measures. Reconciliations of these non-GAAP financial
measures to the most closely analogous measure determined in
accordance with GAAP are included in the financial schedules
attached to this release.
The Company believes that the
presentation of non-GAAP financial measures in addition to the
related GAAP measures provides investors with greater transparency
to the information used by the Company's management in its
financial and operational decision-making. Management also
believes that the non-GAAP financial measures provide additional
insight for analysts and investors in evaluating the Company's
financial and operational performance in the same way that
management evaluates the Company's financial performance.
Management believes that providing this information enables
investors to better understand the Company's operating performance
and financial condition. These non-GAAP financial measures
are not calculated or presented in accordance with, and are not
alternatives or substitutes for, financial measures prepared in
accordance with GAAP, and should be read only in conjunction with
the Company's financial measures prepared in accordance with
GAAP.
(Tables to Follow)
SOURCE SWM:
CONTACT
Allison Aden
Chief Financial Officer
+1-770-569-4277
Or
Mark Chekanow
Director of Investor Relations
+1-770-569-4229
Web site:
http://www.swmintl.com
SCHWEITZER-MAUDUIT
INTERNATIONAL, INC. AND SUBSIDIARIES
BUSINESS SEGMENT REPORTING
(Dollars in millions)
(Unaudited)
Net Sales |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended June 30, |
|
Six Months
Ended June 30, |
|
2017 |
|
2016 |
|
% Change |
|
2017 |
|
2016 |
|
% Change |
Advanced Materials &
Structures |
$ |
117.8 |
|
|
$ |
72.0 |
|
|
63.6 |
% |
|
$ |
217.8 |
|
|
$ |
143.0 |
|
|
52.3 |
% |
Engineered Papers |
137.5 |
|
|
145.3 |
|
|
(5.4 |
)% |
|
270.8 |
|
|
288.9 |
|
|
(6.3 |
)% |
Total Consolidated |
$ |
255.3 |
|
|
$ |
217.3 |
|
|
17.5 |
% |
|
$ |
488.6 |
|
|
$ |
431.9 |
|
|
13.1 |
% |
Operating
Profit (Loss) from Continuing Operations |
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months
Ended June 30, |
|
|
|
|
|
Return on Net Sales |
|
|
|
|
|
Return on Net Sales |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Advanced Materials &
Structures |
$ |
16.6 |
|
|
$ |
8.9 |
|
|
14.1 |
% |
|
12.4 |
% |
|
$ |
25.5 |
|
|
$ |
14.1 |
|
|
11.7 |
% |
|
9.9 |
% |
Engineered Papers |
30.8 |
|
|
35.9 |
|
|
22.4 |
% |
|
24.7 |
% |
|
57.7 |
|
|
71.4 |
|
|
21.3 |
% |
|
24.7 |
% |
Unallocated |
(7.9 |
) |
|
(7.3 |
) |
|
|
|
|
|
(17.1 |
) |
|
(16.4 |
) |
|
|
|
|
Total Consolidated |
$ |
39.5 |
|
|
$ |
37.5 |
|
|
15.5 |
% |
|
17.3 |
% |
|
$ |
66.1 |
|
|
$ |
69.1 |
|
|
13.5 |
% |
|
16.0 |
% |
Restructuring
and Impairment Expenses and Purchase Accounting
Adjustments |
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months
Ended June 30, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Advanced Materials &
Structures |
$ |
6.7 |
|
|
$ |
3.1 |
|
|
$ |
15.0 |
|
|
$ |
6.8 |
|
Engineered Papers |
0.8 |
|
|
0.9 |
|
|
1.3 |
|
|
1.8 |
|
Unallocated |
- |
|
|
- |
|
|
0.2 |
|
|
0.3 |
|
Total Consolidated |
$ |
7.5 |
|
|
$ |
4.0 |
|
|
$ |
16.5 |
|
|
$ |
8.9 |
|
Adjusted
Operating Profit (Loss) from Continuing Operations* |
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months
Ended June 30, |
|
|
|
|
|
Return on Net Sales |
|
|
|
|
|
Return on Net Sales |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Advanced Materials &
Structures |
$ |
23.3 |
|
|
$ |
12.0 |
|
|
19.8 |
% |
|
16.7 |
% |
|
$ |
40.5 |
|
|
$ |
20.9 |
|
|
18.6 |
% |
|
14.6 |
% |
Engineered Papers |
31.6 |
|
|
36.8 |
|
|
23.0 |
% |
|
25.3 |
% |
|
59.0 |
|
|
73.2 |
|
|
21.8 |
% |
|
25.3 |
% |
Unallocated |
(7.9 |
) |
|
(7.3 |
) |
|
|
|
|
|
(16.9 |
) |
|
(16.1 |
) |
|
|
|
|
Total Consolidated |
$ |
47.0 |
|
|
$ |
41.5 |
|
|
18.4 |
% |
|
19.1 |
% |
|
$ |
82.6 |
|
|
$ |
78.0 |
|
|
16.9 |
% |
|
18.1 |
% |
* Adjusted Operating Profit (Loss)
from Continuing Operations, a non-GAAP financial measure, is
calculated by adding Restructuring and Impairment Expenses and
Purchase Accounting Adjustments to Operating Profit from Continuing
Operations.
SCHWEITZER-MAUDUIT INTERNATIONAL,
INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND
SUPPLEMENTAL DATA
(Dollars in millions, except per share
amounts)
|
Three Months
Ended June 30, |
|
Six Months
Ended June 30, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Operating profit from continuing operations |
$ |
39.5 |
|
|
$ |
37.5 |
|
|
$ |
66.1 |
|
|
$ |
69.1 |
|
Plus:
Restructuring and impairment expense |
1.6 |
|
|
0.9 |
|
|
2.7 |
|
|
2.7 |
|
Plus: Purchase accounting adjustments |
5.9 |
|
|
3.1 |
|
|
13.8 |
|
|
6.2 |
|
Adjusted Operating Profit from Continuing Operations |
$ |
47.0 |
|
|
$ |
41.5 |
|
|
$ |
82.6 |
|
|
$ |
78.0 |
|
|
|
|
|
|
|
|
|
Income
from continuing operations |
$ |
22.3 |
|
|
$ |
26.0 |
|
|
$ |
36.0 |
|
|
$ |
47.1 |
|
Plus: Restructuring and impairment expense |
1.6 |
|
|
0.9 |
|
|
2.7 |
|
|
2.7 |
|
Less:
Tax impact of restructuring and impairment expense |
(0.4 |
) |
|
(0.3 |
) |
|
(0.8 |
) |
|
(0.7 |
) |
Plus: Purchase accounting adjustments |
5.9 |
|
|
3.1 |
|
|
13.8 |
|
|
6.2 |
|
Less:
Tax impact of purchase accounting adjustments |
(1.9 |
) |
|
(1.2 |
) |
|
(4.4 |
) |
|
(2.4 |
) |
Adjusted Income from Continuing Operations |
$ |
27.5 |
|
|
$ |
28.5 |
|
|
$ |
47.3 |
|
|
$ |
52.9 |
|
|
|
|
|
|
|
|
|
Earnings per share - diluted |
$ |
0.72 |
|
|
$ |
0.85 |
|
|
$ |
1.17 |
|
|
$ |
1.54 |
|
Plus:
Loss (income) per share from discontinued operations |
- |
|
|
- |
|
|
- |
|
|
- |
|
Earnings per share from continuing operations |
0.72 |
|
|
0.85 |
|
|
1.17 |
|
|
1.54 |
|
Plus:
Restructuring and impairment expense per share |
0.05 |
|
|
0.03 |
|
|
0.09 |
|
|
0.09 |
|
Less: Tax impact of restructuring and impairment
expense per share |
(0.01 |
) |
|
(0.02 |
) |
|
(0.02 |
) |
|
(0.03 |
) |
Plus:
Purchase accounting adjustments per share |
0.19 |
|
|
0.10 |
|
|
0.45 |
|
|
0.20 |
|
Less: Tax impact of purchase accounting adjustments
per share |
(0.07 |
) |
|
(0.03 |
) |
|
(0.15 |
) |
|
(0.07 |
) |
Adjusted Earnings Per Share from Continuing Operations -
Diluted |
$ |
0.88 |
|
|
$ |
0.93 |
|
|
$ |
1.54 |
|
|
$ |
1.73 |
|
|
|
|
|
|
|
|
|
Income
from continuing operations |
$ |
22.3 |
|
|
$ |
26.0 |
|
|
$ |
36.0 |
|
|
$ |
47.1 |
|
Plus: Interest expense |
6.8 |
|
|
4.1 |
|
|
12.6 |
|
|
8.7 |
|
Plus:
Income tax (benefit) provision |
9.9 |
|
|
9.1 |
|
|
17.0 |
|
|
17.2 |
|
Plus: Depreciation & amortization |
14.8 |
|
|
11.3 |
|
|
31.0 |
|
|
22.1 |
|
Plus:
Restructuring and impairment expense |
1.6 |
|
|
0.9 |
|
|
2.7 |
|
|
2.7 |
|
Adjusted EBITDA from Continuing Operations |
$ |
55.4 |
|
|
$ |
51.4 |
|
|
$ |
99.3 |
|
|
$ |
97.8 |
|
|
|
|
|
|
|
|
|
Cash provided by operating activities of continuing
operations |
$ |
31.9 |
|
|
$ |
34.6 |
|
|
$ |
44.8 |
|
|
$ |
52.3 |
|
Less:
Capital spending |
(8.2 |
) |
|
(5.2 |
) |
|
(19.3 |
) |
|
(9.7 |
) |
Less: Capitalized software costs |
(0.8 |
) |
|
(0.7 |
) |
|
(1.6 |
) |
|
(0.9 |
) |
Free
Cash Flow from Continuing Operations |
$ |
22.9 |
|
|
$ |
28.7 |
|
|
$ |
23.9 |
|
|
$ |
41.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2017 |
|
December 31, 2016 |
|
|
|
|
|
|
|
|
Total Debt |
|
|
|
|
$ |
721.1 |
|
|
$ |
440.4 |
|
Less:
Cash |
|
|
|
|
97.8 |
|
|
107.4 |
|
Net Debt |
|
|
|
|
$ |
623.3 |
|
|
$ |
333.0 |
|
SCHWEITZER-MAUDUIT INTERNATIONAL,
INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND
SUPPLEMENTAL DATA
(Dollars in per share amounts)
2017 Earnings Per Share Guidance - Diluted,
from Continuing Operations |
|
2017E |
2017E
EPS |
$ |
2.52 |
|
Plus: Restructuring/Impairment expense |
0.13 |
|
Less:
Tax impact of restructuring/impairment expense |
(0.04 |
) |
Plus: Purchase accounting expense |
0.81 |
|
Less:
Tax impact of purchase accounting expense |
(0.27 |
) |
2017E Adjusted EPS |
$ |
3.15 |
|
* 2017E Adjusted EPS guidance issued in February
2017; reconciliation to GAAP issued in May 2017 upon completion of
initial estimates for restructuring/impairment and purchase
accounting expenses
** Excluded from the above reconciliation are potential transaction
costs associated with future acquisitions.
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Schweitzer-Mauduit International Inc via
Globenewswire
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