ALPHARETTA, GA, November 1,
2017 -- Schweitzer-Mauduit International, Inc. ("SWM" or the
"Company") (NYSE: SWM) reported earnings results for the three
month period ended September 30, 2017 and announced a 2%
increase of its per share quarterly cash dividend rate to $0.43
from $0.42.
Adjusted measures
are reconciled to GAAP at the end of this release. Financial
measures are from continuing operations and per share data is on a
diluted basis. 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)
Third Quarter
2017 Financial Summary
-
Total net sales increased 23% to
$257.8 million; Advanced Materials & Structures' organic net
sales (excluding Conwed acquisition) increased 4% and Engineered
Papers' net sales also increased 4%
-
GAAP operating profit was $38.5
million, or 14.9% of net sales, up from $30.8 million, or
14.7% of net sales; adjusted operating profit was $45.4
million, or 17.6% of net sales, up from $35.1 million, or
16.8% of net sales
-
GAAP EPS was $0.84, up 38%, and
Adjusted EPS was $1.00, up 35%; both benefited from an $0.11
non-operating gain from an asset sale (excluding the gain, GAAP and
adjusted EPS were each up 20%)
Third Quarter
2017 Business Highlights
-
Advanced Materials & Structures segment
organic net sales increased 4%, with continued growth of specialty
films for transportation leading the portfolio; net sales
increased 60% including the Conwed acquisition
-
AMS segment GAAP and adjusted operating profit
margins expanded 130 and 280 basis points, respectively, reflecting
organic sales growth, operating leverage, and the addition of
Conwed and related synergies
-
Engineered Papers segment net sales increased 4%
despite a segment volume decline of 3%; positive mix from LIP
volume growth and currency benefits more than offset the
anticipated RTL volume decline and pricing reductions
-
EP segment GAAP and adjusted operating profit
margins decreased 60 and 120 basis points, respectively, due
primarily to the expected RTL volume decline
Dr. Jeff Kramer, Chief Executive
Officer, commented, "Our business continued to perform well overall
in the third quarter, with continued sales momentum and margin
expansion in AMS and relatively stable results from EP.
Consistent with recent quarters, specialty film demand was strong
as sales traction from new channels in Asia continued to bolster
our results. In addition, Conwed synergy execution
successfully progressed toward our $10 million annualized cost
reduction goal by the end of next year. Our most synergistic
acquisition to date is on track with our expectations to drive
value creation as we optimize the scaled AMS platform."
"Engineered Papers continued to
perform as expected, with strong LIP volume growth compared to a
soft quarter last year and a temporary customer inventory build in
the U.S. LIP growth, combined with pockets of strength in
other cigarette papers, helped offset the anticipated volume
challenges for traditional RTL. Regarding other reconstituted
tobacco products, wrapper and binder sales remained solid and
Heat-not-Burn volume for next generation tobacco products continued
to ramp up. We are actively working across our customer base
on the development of customized HnB products to meet the projected
growing demand in this innovative category."
Dr. Kramer concluded, "As we close
out 2017, our near-term priorities remain execution on the Conwed
integration synergies, manufacturing efficiencies, and growth
initiatives across the businesses to deliver on our previously
announced 2017 Adjusted EPS guidance of $3.15. Key strategic
growth investments, including a new film line in Europe, the
development of specialty filtration papers, and HnB product
roll-outs, are all hitting their respective milestones with
expected benefits in 2018. We are at an exciting juncture in
our evolution as we head into next year, with a scaled and growing
AMS segment designed to more than offset the long-term volume and
pricing headwinds in the tobacco-driven EP segment. Our free
cash flow has remained healthy, supporting another dividend
increase, and our outlook for sustainable long-term growth is
significantly improved as a result of these transformative
strategic actions."
Third Quarter
2017 Financial Results
Advanced Materials & Structures segment net
sales were $116.2 million, up 60%, including the Conwed acquisition
(Conwed net sales were $40.7 million). Organic net sales
increased 4%, driven by double-digit growth of surface protection
films for transportation. Filtration sales weakness was
partially offset by strength in medical. Conwed results
remained generally in line with our expectations, driven by strong
sales growth of building and agricultural products into the
infrastructure and construction end-markets. GAAP operating
profit was $15.4 million, up 77%; adjusted operating profit was
$22.0 million, up 88%. GAAP and adjusted operating profit
margins expanded 130 and 280 basis points, respectively. The
organic sales increase, favorable mix, and the Conwed acquisition
(including synergies) contributed to margin expansion.
Engineered Papers segment net
sales were $141.6 million, up 4%; positive mix effects from strong
LIP performance coupled with positive currency movements more than
offset the 3% overall segment volume decline, pricing concessions,
and as expected lower third-party LIP royalties. The overall
volume decline reflected higher cigarette papers volume, including
double-digit growth in LIP papers due to low volume in the prior
year quarter and a customer inventory build, and higher non-tobacco
sales, which were offset by lower traditional RTL volume.
GAAP operating profit was $32.3 million, up 1%; adjusted operating
profit was $32.7 million, down 2%. GAAP and adjusted
operating profit margin declined 60 and 120 basis points,
respectively. Operating profit margin was negatively affected
by lower RTL volume, pricing, and LIP royalties, which were
partially offset by LIP growth and favorable currency
movements.
Unallocated GAAP and adjusted expenses were $9.2
million and 9.3 million, down 7% and 6%, respectively, due
primarily to favorable timing of third-party consulting
services. GAAP and adjusted Unallocated expenses were both
3.6% of total sales, down 110 basis points.
Consolidated net sales were $257.8 million, up 23%,
and 4% on an organic basis. The Conwed acquisition
contributed $40.7 million of incremental net sales. GAAP
operating profit was $38.5 million, up 25%, and GAAP operating
profit margin was 14.9%, up 20 basis points. Adjusted
operating profit was $45.4 million, up 29%, and adjusted operating
profit margin was 17.6%, up 80 basis points. Adjusted EBITDA
was $59.1 million, up 29%, and adjusted EBITDA margin was 22.9%, up
100 basis points.
GAAP Income was $25.7 million, up
37%; this equated to GAAP EPS of $0.84. Adjusted income was
$30.7 million, up 35%; this equated to Adjusted EPS of $1.00.
Interest expense was $7.4 million, up $3.5 million due to the
Conwed acquisition and related debt structure changes. Other
income was $4.1 million, up $3.4 million due primarily to a $4.8
million pretax gain, or $0.11 per share, from an asset sale.
The Company's effective tax rate was 27.0%, down from 38.8%, due to
favorable discrete items in the current year, versus unfavorable
discrete items in the prior year period. The Chinese JVs were
neutral to GAAP EPS and Adjusted EPS, down from a $0.06
contribution due to sales timing and challenging market conditions.
Net currency movements had a 2% positive impact on sales and a $1.7
million positive impact on operating profits; translation impact of
net currency movements was positive $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 $0.14 per share, up
$0.08. 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 $0.02 per share, down
$0.01, and were primarily related to synergy-driven headcount
reductions in AMS.
Year-to-Date 2017
Financial Results
Advanced Materials & Structures segment net
sales were $334.0 million, up 55%, including the Conwed acquisition
(Conwed net sales were $106.2 million), with year-to-date trends
generally consistent with those of the third quarter. Organic
net sales increased 6%, led by specialty films for transportation;
this growth was partially offset by softness in filtration
sales. Conwed's overall results 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 $40.9 million, up 79%;
adjusted operating profit was $62.5 million, up 92%. GAAP and
adjusted operating profit margins expanded 160 and 360 basis
points, respectively. Total segment organic sales growth,
favorable mix, and the Conwed acquisition (including synergies)
contributed to margin expansion.
Engineered Papers segment net
sales were $412.4 million, down 3%, mainly due to a 3% overall
volume decline. Price/mix was neutral and expected lower LIP
royalties were offset by positive currency movements. Lower
RTL and cigarette paper volumes were partially offset by growth of
non-tobacco paper volumes. GAAP operating profit was $90.0
million, down 13%; adjusted operating profit was $91.7 million,
down 14%. GAAP and adjusted operating profit margin declined
250 and 280 basis points, respectively. The decrease in
high-margin LIP and RTL sales and manufacturing inefficiencies
resulting from lower overall segment volume impacted year-to-date
profitability. In addition, year-to-date profitability was
impacted by high costs in the first quarter of 2017 related to
certain production line restart issues.
Unallocated GAAP expenses were $26.3 million, flat
compared to the prior year; adjusted unallocated expenses were
$26.2 million, up 1%. GAAP and adjusted Unallocated expenses were
both 3.5% of total sales, down 60 basis points.
Consolidated net sales were $746.4 million, up 16%,
but were flat on an organic basis. The Conwed acquisition
contributed $106.2 million of incremental net sales. GAAP
operating profit was $104.6 million, up 5%, and GAAP operating
profit margin was 14.0%, down 160 basis points. Adjusted
operating profit was $128.0 million, up 13%, and adjusted operating
profit margin was 17.1%, down 50 basis points. Adjusted
EBITDA was $158.4 million, up 10%, and adjusted EBITDA margin was
21.2%, down 120 basis points.
GAAP Income was $61.7 million,
down 6%; this equated to GAAP EPS of $2.01. Adjusted income
was $78.0 million, up 4%; this equated to Adjusted EPS of
$2.54. Interest expense was $20.0 million, up $7.4 million
due to the Conwed acquisition and related debt structure
changes. Other income was $3.2 million, down $0.8
million. The Company's effective tax rate was 30.2%, down
slightly from 30.6%. The Chinese JVs contributed $0.01 to
GAAP EPS and Adjusted EPS, down $0.07 due to sales timing and
challenging market conditions. Net currency movements had an
immaterial impact on sales and $1.3 million positive impact on
operating profits; translation impact of net currency movements was
neutral 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 $0.44 per share, up
$0.25. 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 $0.09 per share, flat
compared to the prior year.
Cash Flow, Debt, &
Dividend
Year-to-date cash provided by
operating activities was $93.2 million, up $10.1 million. The
Company's working capital-related cash outflows were $21.8 million,
up $7.4 million, primarily resulting from increased receivables
associated with higher sales, inventory builds related to facility
relocations, and higher cash tax payments. Capital spending
and capitalized software totaled $30.1 million, up $10.9 million,
due primarily to investments for specialty filtration paper
production and the addition of Conwed. Free cash flow was
$63.1 million, essentially flat with the prior year period.
Year-to-date, the Company has paid dividends to shareholders
totaling $38.7 million.
Net debt was $593.4 million on
September 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 2.9x as of September 30, 2017.
The Company announced a 2.4%
increase of its quarterly cash dividend to $0.43 per share from
$0.42 per share. the dividend will be payable on
December 22, 2017 to stockholders of record as of
December 1, 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 expects 2017 capital
expenditures and capitalized software spending to exceed $40
million.
Conference Call
SWM will hold a conference call to
review third quarter 2017 results with investors and analysts at
8:30 a.m. Eastern time on Thursday, November 2, 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, integration of and
accretion from the Conwed acquisition, future results of legacy AMS
operations, 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. We operate in highly
competitive markets in which alternative supplies and technologies
may attract our customers away from our products. In
additional, our customers may, in some cases, produce for
themselves the components that the Company sells to them for
incorporation into their products, thus reducing or eliminating
their purchases from us;
- 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 September 30, |
|
Nine Months
Ended September 30, |
|
2017 |
|
2016 |
|
% Change |
|
2017 |
|
2016 |
|
% Change |
Advanced Materials & Structures |
$ |
116.2 |
|
|
$ |
72.5 |
|
|
60.3 |
% |
|
$ |
334.0 |
|
|
$ |
215.5 |
|
|
55.0 |
% |
Engineered Papers |
141.6 |
|
|
136.8 |
|
|
3.5 |
% |
|
412.4 |
|
|
425.7 |
|
|
(3.1 |
)% |
Total Consolidated |
$ |
257.8 |
|
|
$ |
209.3 |
|
|
23.2 |
% |
|
$ |
746.4 |
|
|
$ |
641.2 |
|
|
16.4 |
% |
Operating Profit (Loss) |
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months
Ended September 30, |
|
|
|
|
|
Return on Net Sales |
|
|
|
|
|
Return on Net Sales |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Advanced Materials & Structures |
$ |
15.4 |
|
|
$ |
8.7 |
|
|
13.3 |
% |
|
12.0 |
% |
|
$ |
40.9 |
|
|
$ |
22.8 |
|
|
12.2 |
% |
|
10.6 |
% |
Engineered Papers |
32.3 |
|
|
32.0 |
|
|
22.8 |
% |
|
23.4 |
% |
|
90.0 |
|
|
103.4 |
|
|
21.8 |
% |
|
24.3 |
% |
Unallocated |
(9.2 |
) |
|
(9.9 |
) |
|
|
|
|
|
(26.3 |
) |
|
(26.3 |
) |
|
|
|
|
Total
Consolidated |
$ |
38.5 |
|
|
$ |
30.8 |
|
|
14.9 |
% |
|
14.7 |
% |
|
$ |
104.6 |
|
|
$ |
99.9 |
|
|
14.0 |
% |
|
15.6 |
% |
Restructuring and Impairment Expenses and
Purchase Accounting Adjustments |
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months
Ended September 30, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Advanced Materials & Structures |
$ |
6.6 |
|
|
$ |
3.0 |
|
|
$ |
21.6 |
|
|
$ |
9.8 |
|
Engineered Papers |
0.4 |
|
|
1.3 |
|
|
1.7 |
|
|
3.1 |
|
Unallocated |
(0.1 |
) |
|
- |
|
|
0.1 |
|
|
0.3 |
|
Total
Consolidated |
$ |
6.9 |
|
|
$ |
4.3 |
|
|
$ |
23.4 |
|
|
$ |
13.2 |
|
Adjusted Operating Profit (Loss)
* |
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months
Ended September 30, |
|
|
|
|
|
Return on Net Sales |
|
|
|
|
|
Return on Net Sales |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Advanced Materials & Structures |
$ |
22.0 |
|
|
$ |
11.7 |
|
|
18.9 |
% |
|
16.1 |
% |
|
$ |
62.5 |
|
|
$ |
32.6 |
|
|
18.7 |
% |
|
15.1 |
% |
Engineered Papers |
32.7 |
|
|
33.3 |
|
|
23.1 |
% |
|
24.3 |
% |
|
91.7 |
|
|
106.5 |
|
|
22.2 |
% |
|
25.0 |
% |
Unallocated |
(9.3 |
) |
|
(9.9 |
) |
|
|
|
|
|
(26.2 |
) |
|
(26.0 |
) |
|
|
|
|
Total
Consolidated |
$ |
45.4 |
|
|
$ |
35.1 |
|
|
17.6 |
% |
|
16.8 |
% |
|
$ |
128.0 |
|
|
$ |
113.1 |
|
|
17.1 |
% |
|
17.6 |
% |
* Adjusted Operating Profit
(Loss), a non-GAAP financial measure, is calculated by adding
Restructuring and Impairment Expenses and Purchase Accounting
Adjustments to Operating Profit.
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 September 30, |
|
Nine Months
Ended September 30, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Operating profit |
$ |
38.5 |
|
|
$ |
30.8 |
|
|
$ |
104.6 |
|
|
$ |
99.9 |
|
Plus:
Restructuring and impairment expense |
1.5 |
|
|
1.3 |
|
|
4.2 |
|
|
4.0 |
|
Plus: Purchase accounting adjustments |
5.4 |
|
|
3.0 |
|
|
19.2 |
|
|
9.2 |
|
Adjusted Operating Profit |
$ |
45.4 |
|
|
$ |
35.1 |
|
|
$ |
128.0 |
|
|
$ |
113.1 |
|
|
|
|
|
|
|
|
|
Income |
$ |
25.7 |
|
|
$ |
18.7 |
|
|
$ |
61.7 |
|
|
$ |
65.8 |
|
Plus: Restructuring and impairment expense |
1.5 |
|
|
1.3 |
|
|
4.2 |
|
|
4.0 |
|
Less:
Tax impact of restructuring and impairment expense |
(0.4 |
) |
|
(0.5 |
) |
|
(1.2 |
) |
|
(1.2 |
) |
Plus: Purchase accounting adjustments |
5.4 |
|
|
3.0 |
|
|
19.2 |
|
|
9.2 |
|
Less:
Tax impact of purchase accounting adjustments |
(1.5 |
) |
|
(1.0 |
) |
|
(5.9 |
) |
|
(3.4 |
) |
Less: Income tax valuation allowance & one-time
tax expense |
- |
|
|
1.3 |
|
|
- |
|
|
0.9 |
|
Adjusted Income |
$ |
30.7 |
|
|
$ |
22.8 |
|
|
$ |
78.0 |
|
|
$ |
75.3 |
|
|
|
|
|
|
|
|
|
Earnings per share - diluted |
$ |
0.84 |
|
|
$ |
0.61 |
|
|
$ |
2.01 |
|
|
$ |
2.15 |
|
Plus: Restructuring and impairment expense |
0.04 |
|
|
0.04 |
|
|
0.13 |
|
|
0.13 |
|
Less:
Tax impact of restructuring and impairment expense |
(0.02 |
) |
|
(0.01 |
) |
|
(0.04 |
) |
|
(0.04 |
) |
Plus: Purchase accounting adjustments |
0.18 |
|
|
0.10 |
|
|
0.63 |
|
|
0.30 |
|
Less:
Tax impact of purchase accounting adjustments |
(0.04 |
) |
|
(0.04 |
) |
|
(0.19 |
) |
|
(0.11 |
) |
Less:
Income tax valuation allowance & one-time tax expense |
- |
|
|
0.04 |
|
|
- |
|
|
0.03 |
|
Adjusted Earnings Per Share - Diluted |
$ |
1.00 |
|
|
$ |
0.74 |
|
|
$ |
2.54 |
|
|
$ |
2.46 |
|
|
|
|
|
|
|
|
|
Income |
$ |
25.7 |
|
|
$ |
18.7 |
|
|
$ |
61.7 |
|
|
$ |
65.8 |
|
Plus: Interest expense |
7.4 |
|
|
3.9 |
|
|
20.0 |
|
|
12.6 |
|
Plus:
Income tax (benefit) provision |
9.5 |
|
|
10.7 |
|
|
26.5 |
|
|
27.9 |
|
Plus: Depreciation & amortization |
15.0 |
|
|
11.2 |
|
|
46.0 |
|
|
33.3 |
|
Plus:
Restructuring and impairment expense |
1.5 |
|
|
1.3 |
|
|
4.2 |
|
|
4.0 |
|
Adjusted EBITDA |
$ |
59.1 |
|
|
$ |
45.8 |
|
|
$ |
158.4 |
|
|
$ |
143.6 |
|
|
|
|
|
|
|
|
|
Cash provided by operating activities |
$ |
48.4 |
|
|
$ |
30.8 |
|
|
$ |
93.2 |
|
|
$ |
83.1 |
|
Less:
Capital spending |
(8.2 |
) |
|
(7.8 |
) |
|
(27.5 |
) |
|
(17.5 |
) |
Less: Capitalized software costs |
(1.0 |
) |
|
(0.8 |
) |
|
(2.6 |
) |
|
(1.7 |
) |
Free
Cash Flow |
$ |
39.2 |
|
|
$ |
22.2 |
|
|
$ |
63.1 |
|
|
$ |
63.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2017 |
|
December 31, 2016 |
|
|
|
|
|
|
|
|
Total Debt |
|
|
|
|
$ |
694.0 |
|
|
$ |
440.4 |
|
Less:
Cash |
|
|
|
|
100.6 |
|
|
107.4 |
|
Net Debt |
|
|
|
|
$ |
593.4 |
|
|
$ |
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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